The First Steps
1. Learn the Language of Medical Fraud
There are standard terms and phrases that apply to most medical fraud cases. CPT codes ICD-9, ICD-10, , Health Insurance Claim Form (HCFA, 1500), upcoding, unbundling are some that you should know.
Here are some of the basics with links to web pages that give some useful detail. Note: These are not our links. If any of them go “bad”, please let us know so we can update.
For common medical acronyms, check out this DICTIONARY by CSHA (California Society for Healthcare Attorneys)
CPT Coding Website (Recommended)
Health Insurance Claim Form (HCFA, 1500)
2. Hire an Expert Immediately
Medical fraud is often a battle of experts. Billing and medical practice involves a tension between patient care, profitability and masses of government and insurance company regulations. Reasonable people and hired guns can and will differ on interpretation.
For example, let’s assume that your client has more 99245 billings than 90% of practitioners in similar locales with a similar type of practice. 99245 is a high level of care during a single visit.
Your client is then charged with billing fraud via upcoding. The theory is that the vast differential in billing data (your client has far more complex visits than similar MD’s), is caused by fraud. Perhaps a disgruntled employee has contacted prosecutors or the medical board and promoted this theory.
Your defense may focus on some aspect of the client’s practice that distinguishes his/her practice from the mean. Your client can help with this but an expert will be needed. Very early on you must assemble evidence to support this position. That includes interviews of staff, an investigation into the background of the disgruntled employee and an expert review of relevant records.
Do not be intimidated by the limitations on expert testimony in Federal Rule of Evidence 704. Except for expressing an “ultimate” opinion as to the existence of an element of the crime, experts have a lot to say. The fact that the expert gives an opinion on a predicate matter from which a jury might easily infer the defendant’s mental state, is not a basis for exclusion. The case of U.S. v. Morales (9th Cir. 1997) 108 F.3d 1031 was a rather simple bookkeeping fraud case. In Morales, a bookkeeping expert, “intended to testify to a predicate matter—Morales’s level of understanding of bookkeeping principles—and not to whether Morales willfully made the false entries.” Despite the fact that there was a small jump from that opinion to the ultimate issue in the case, the Ninth Circuit held that the evidence should have been admitted because “Rule 704(b) does not preclude expert testimony from which a jury might infer that a criminal defendant did or did not possess the requisite mens rea”. U.S. v. Morales (9th Cir. 1997) 108 F.3d 1031, 1041 In other words, even though the expert came real close to saying “Hey, there’s no fraud, he just didn’t know what he was doing !!!!”, his testimony was admissible.
3. Understand the Charges
Medical fraud is unlike even a special circumstance murder case. The charges are very VERY broad and it is often difficult to relate the listed charges to specific files, billings or conduct. A typical case might charge the following:
18 USC 1347 − Health Care Fraud
18 USC 1035 − False Statements Relating to Health Care Matters
8 USC 956(h) − Conspiracy to Commit Money Laundering
For some of these charges there is a jury instruction available. <<Instruction for 8 USC 956>> (money laundering)
<<Instruction for 18 USC 1035>> (conspiracy)
Otherwise, read the leading cases after you have read the statute. There are often jurisdictional differences in the interpretation of these vague laws. You are going struggle to clearly understand the government’s theory and defining their universe of relevant documents. Motions for a bill of particulars, a review of search warrant affidavits and a focus on prearrest communications with insurance companies are methods of clearly defining the scope of the government’s case.
4. Organize Documents
Create a very clear computer based discovery system. We use Casemap to index documents and to note the date and production (discovery) batch that they come from. We also clearly delineate documents that are self generated and privileged.
Keep a clean, untouched set.
Use a Bates numbering system.
4. Use Your Documents – And Do it Early
Hire a coder, biller or experienced paralegal to take the Indictment and break out each separate alleged wrongful act into a folder. Put every document that relates to that alleged wrongful act into the folder.
Make sure that the folders are on your computer and you can use paper if you like.
Make sure each document has a Bates number.
If you do these 4 things ASAP, you will have control of your case. If you don’t, do it at the beginning, you will have lost valuable time.
The Legal Part
If a client comes to you with a DUI, homicide or any normal crime, you automatically know the elements, defenses and particularly, the requirement mental states.
In medical fraud cases the elements, defenses and mental state are not that easy. Intent changes among statutes and the same acts easily fall under many statutes. Consider the fact that the pattern jury instructions used in federal court do not generally sufficiently focus on intent. Consider this U.S. Supreme Court holding on a good faith belief as a defense to fraud.
… if Cheek asserted that he truly believed that the Internal Revenue Code did not purport to treat wages as income, and the jury believed him, the Government would not have carried its burden to prove willfulness, however unreasonable a court might deem such a belief. Of course, in deciding whether to credit Cheek’s good-faith belief claim, the jury would be free to consider any admissible evidence from any source showing that Cheek was aware of his duty to file a return and to treat wages as income, including evidence showing his awareness of the relevant provisions of the Code or regulations, of court decisions rejecting his interpretation of the tax law, of authoritative rulings of the Internal Revenue Service, or of any contents of the personal income tax return forms and accompanying instructions that made it plain that wages should be returned as income. [citations]
Cheek v. U.S. (1991) 498 U.S. 192, 202–03
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