In its written opinion filed on April 23, 2013, the United States Court of Appeals for the Fourth Circuit upheld the conviction of a former Maryland cardiologist convicted of implanting medically unnecessary stents in cardiac patients in Maryland. The Maryland interventional cardiologist was in private practice in southern Maryland where he had privileges to perform cardiac catheterizations and coronary stent procedures at a local hospital. Near the end of 2006, an independent review of the cardiologist’s records determined that the cardiologist had performed medically unnecessary stent procedures in approximately half of 25 randomly selected cases that were reviewed.
In the spring of 2007, the United States subpoenaed 117 patient files from the cardiologist’s private practice. When the FBI agents arrived at the cardiologist’s office, they found subpoenaed files stacked on his desk and a shred bin nearby. The cardiologist admitted that he was removing documents from the files for shredding.
The cardiologist was indicted on one count of health care fraud for allegedly executing a scheme to defraud Medicare, Medicaid, and private insurers by submitting claims for medically unnecessary procedures and testing, in violation of 18 U.S.C. § 1347, and six counts of knowingly and willfully making false statements in connection with the delivery of and payment for health care services by willfully misrepresenting the level of stenosis (blockage) in his patients’ arteries, in violation of 18 U.S.C. § 1035(a)(2).
During the criminal trial, one of the government’s experts (a cardiologist) testified that although coronary artery disease is considered significant when an artery is blocked by 50%, stents are not medically necessary until they are 70% blocked because that is the point when the body can no longer compensate for reduced blood flow to the heart. The expert testified that the defendant cardiologist had grossly overstated the level of blockage in the patient files the expert reviewed (in 59 cases, the defendant cardiologist often recorded stenosis of 80% to 95% for lesions that were no more than 10% to 30%).
The second government expert (also a cardiologist) reviewed the defendant cardiologist’s stent procedures performed between 2003 and 2006 and testified that of the 707 stent procedures he reviewed, 101 of the stent procedures were “pretty black and white” that those procedures were medically inappropriate and for 108 of the stent procedures he reviewed, most physicians would not have proceeded with the stents. Nonetheless, the defendant cardiologist had certified to insurers that those stent procedures were reasonable and medically necessary in order to obtain reimbursement.
Evidence introduced during the criminal trial showed that although a smaller proportion of the defendant cardiologist’s Medicare patients received stents as compared to his peers (16 out of every 100 of the defendant’s Medicare patients received a stent, which rate was 67% below the average for his peers), the patients the defendant cardiologist chose to stent received nearly twice as many stents on average as the patients of his peers (the defendant cardiologist placed an average 2.03 stents in each of his patients compared to an average of 1.15 stents in each patient that were implanted by his peers). Other evidence showed that the number of stent reimbursement claims the defendant cardiologist submitted to Medicare increased dramatically in 2004, around the same time he purchased a $1.7 million condominium.
The criminal trial lasted ten days. The jury convicted the defendant cardiologist on all counts. The trial judge sentenced the defendant cardiologist to 97 months imprisonment followed by three years of supervision after release, applying a 16-level enhancement under United States Sentencing Guidelines § 2B.1.1(b)(1)(I) after calculating the total losses to be more than $1 million, and entered forfeiture and restitution orders of $579,070 against the defendant.
The defendant cardiologist filed an appeal arguing that the health care fraud statute is unconstitutionally vague as applied to him; that the evidence was insufficient to support his convictions on all counts; that his trial was prejudiced by the government’s failure to disclose impeachment evidence and certain erroneous evidentiary rulings committed by the district court; and, that his sentence is procedurally unreasonable.
The United States Court of Appeals for the Fourth Circuit (“Appellate Court”) noted that the health care fraud statute is not a medical malpractice statute but rather a fraud statute. As applied here, it prohibited the defendant cardiologist from knowingly and willfully defrauding insurers by falsely certifying that the stents he placed in arteries with little to no blockage were reasonable and medically necessary in order to obtain reimbursement. The Appellate Court held that the defendant cardiologist could only be convicted if the government proved beyond a reasonable doubt that he acted “knowingly and willfully” to defraud insurers, which necessarily entails proof that he knew the stent procedures were unnecessary, and thus the health care fraud statute is not unconstitutionally vague as applied to the defendant cardiologist.
The Appellate Court held that there was substantial evidence to support the defendant cardiologist’s conviction: his pattern of overstating blockage by a wide margin and placing unnecessary stents in a large number of cases was direct evidence of a fraudulent scheme; there was sufficient evidence to rule out non-criminal explanations for the defendant cardiologist’s overstatements; evidence showed that stenting provided a significant source of reimbursement for the defendant cardiologist’s private practice, and thus, that he had a financial motive for executing the fraudulent scheme; and, proof that the defendant cardiologist stented less patients on average than his peers does not undermine the other evidence of fraud.
The Appellate Court noted that in order to sustain a conviction under 18 U.S.C. § 1035, the government was required to prove beyond a reasonable doubt that the defendant cardiologist “knowingly and willfully . . . ma[de] . . . materially false . . . or fraudulent statements . . . in connection with the delivery of or payment for health care benefits, items, or services.” The specific intent to defraud may be inferred from the totality of the circumstances, and need not be proven by direct evidence.
The Appellate Court held that there was substantial evidence to support the defendant cardiologist’s conviction for the false statement charges: given the sheer disparity between the stenosis the defendant cardiologist recorded and what the angiograms showed, and the other evidence of fraud, there was sufficient evidence for the jury to conclude that he intentionally overstated stenosis levels in the patient files named in the indictment and the evidence showed that these misrepresentations were material insofar as they were necessary for the defendant cardiologist to justify the stents and obtain reimbursement from insurers.
The Appellate Court upheld the convictions and the sentence imposed on the defendant.
If you or a loved one may have suffered harm due to a medically unnecessary stent in Maryland or in another U.S. state, you should promptly seek the advice of a Maryland malpractice attorney or a malpractice attorney in your state who may agree to investigate whether your stent procedure was necessary and/or performed in the proper manner and represent you in a stent claim, if appropriate.
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