* Pursuant to 5 TH C IR

. R. 47.5, the court has determined th a t

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5 TH C IR . R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 97-10786

_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

HENRY EDWARD EUGENE BONHAM;

BEVERLY LARAE BULGER,

Defendants-Appellants.

_________________________________________________________________

Appeals from the United States District Court

for the Northern District of Texas

(4:98-CR-88-1-Y)

_________________________________________________________________ June 22, 1999

Before KING, Chief Judge, and REYNALDO G. GARZA and JOLLY, Circuit

Judges.

E. GRADY JOLLY, Circuit Judge: *

Dr. Henry E. Bonham, a psychiatrist, and Beverly L . Bulger,

his office manager, appeal their convictions and sentences,

involving Medi caid, Medicare, and CHAMPUS fraud. They were

convicted of twenty-two counts of mail fraud and aiding and

abetting mail fraud, and one count of conspiring to commit mail

fraud and to submit a false claim to a federal governmental agency.

Bonham was also convicted of an additional count of submitting a

false claim to a federal governmental agency and aiding and

abetting the submission of a false claim. Bonham argues for2

reversal of each of his convictions, contending: (1) none of the

convictions are supported by the sufficiency of the evidence; (2)

each of the convictions violate the due process clause of the Fifth

Amendment to the United States Constitution; (3) the district court

erred under Fed.R.Evid. 404(b) in admitting the extrinsic evidence

of his improper billing practices; and (4) his prosecution runs

afoul of the separation of powers clause of the United States

Constitution.

Bulger a lso contends that the evidence is insufficient to

support her mail fraud and false claim convictions. In her

remaining arguments on appeal, Bulger challenge s the district

court’s application of §§ 2F1.1 and 3A1.1(b) of the United States

Sentencing Guidelines.

For the foregoing reasons, we affirm each of the defendants’

convictions and sentences.

I

A

Appellant D r. Henry E. Bonham maintained a psychiatric

p ractice in various parts of the state of Texas. The government

alleged that Bonham, through the use of deceptive billing

practices, bilked the federal government out of millions of dollars

in he alth care proceeds. The evidence showed that from 1991,

onward, Bonham entrusted the day-to-day operations of his practice

to his office manager Beverly Bulger. The fact that is predicate3

to this criminal case, however, is that Bonham was a certified

provider of services under three federally funded health insurance

p rograms–-Medicare Part B, Medicaid, and the Civilian Health and

Medical Program of the Uniformed Services (“CHAMPUS”).

Briefly stated, Medicare Part B, Title XVIII of the Social

S ecurity Act, 42 §§ 1395j to 1395w-4, is a health insurance

program that provides medical benefits primarily to p ersons

sixty-five years of age and older who are eligible for Social

Security retirement benef its and to individuals under sixty-five

who have received Social Security benefits for at least two years.

Medicaid, Title XIX of the Social Security Act, § 42 U.S.C.,

1396-1396v, is a feder al and state cooperative cost-sharing

program, which provides necessary medical assistance to families

and individuals with insufficient income and resources. Finally,

CHAMPUS is a Defense Department program that provides medical

benefits to the spouses and unmar ried children of living and

deceased members of the military services.

Further background information o n these federal health care

p rograms is instructive in understanding the exact nature of the

appellants’ a lleged fraudulent billing practices. Under the

federal regulations applicable to Medicare, Medicaid, and CHAMPUS,

a physician is required to submit each of his claims for

reimbursement to the appropriate intermediary or carrier, on the

claim form prescribed by the Health Care Financing Administration4

(HCFA)--the HCFA 1500 form. To accurately complete the HCFA 1500

form, the physician is required to provide, inter alia

, the

following information: his medical provider number, relevant

patient information, the appropriate diagnostic billing code

identifying the services for which reimbursement is sought, and the

identity of the health care provider who rendered the services.

The face of the HCFA 1500 form also includes the following

certification–-one that a physician attests to each t ime that he

submits a claim:

SIGNATURE OF PHYSICIAN OR SUPPLIER (MEDICARE, CHAMPUS,

FECA AND BLACK LUNG)

I certify that the services shown on this form were

medically indicated and necessary for the health of the

patient and were personally furnished by me or were

furnished incident to my professional service by my

employee under my immediate personal supervision, except

as otherwise permitted by Medicare or CHAMPUS

regulations.

For services to be considered as “incident” to a

physician’s professional service, (1) they must be

rendered under the physician’s immediate personal

supervision by his/her employee, (2) they m ust be an

integral, although incidental part of a covered

physician’s service, (3) they must be of kinds commonly

furnished in physician’s offices, and (4) the services of

nonphysicians must be included on the physician’s bills.

[. . . .]

No Part B Medicare benefits may be paid unless this form

is received as required by existing law and regulations

(42 C.F.R. 424.32).

Thus, to determine whether a pati ent has been provided a

compensable medical service under the Medicare, Medic aid, or1 To comply with the direct personal supervision requirement,

the physician is not required to be present in the same room with

his aide. However, the physician must be in the office suite and

immediately available to provide assistance and direction

throughout the time services are being performed

. Medicare and

Medicaid Guide (CCH)

, § 3315 (citin g MCM § 2050.2); s ee also 42

C.F.R. 411.351.

5 CHAMPUS program, or to determine the appropriate pay scale by which

to reimburse the physician for such care, the federal agencies rely

h eavily, if not solely, on the representations the physician has

made on the HCFA 1500 form. The federal agencies likewise rely on

the physician’s use of a diagnostic billing code to determine what

type of health care the patient has received. The appellants’

alleged violation of this honor system is the basis for the mail

fraud convictions underlying this appeal.

The government charged that Bonham and Bulger, using the HCFA

1500 form, executed a billing scheme whereby they submitted

fraudulent insurance claims to Medicare, Medicaid, CHAMPUS, private

insurance companies, and individuals through the United States

mail. The insurance claims were fraudulent because the psychiatric

services for which Bonham and Bulger sought reimbursement had not

been personally provided by Bonham, nor were the services provided

under his direct personal supervision 1

, or rendered a “incident to”

a medical service provided by him, as required by the applicable

federal regulations. In submitting the HCFA 1500 forms, the Bonham

and Bulger deli berately misused billing codes, which, by their2 From the record before us, its seems that Bonham and Bulger

customarily submitted the claims using the following d iagnostic

billing codes: 90801 (psychiatric diagnostic interview and

examination); 90830 (psychological testing); 90841 (individual

psychotherapy, time unspecified); 90843 (individual psychotherapy,

20 to 30 minutes); 90844 (individual psychotherapy, 4 5 to 50

minutes); 90845 (medical psychoanalysis); 90846 (family

psychotherapy); 90862 (management of psychotropic medication);

99238 (hospital discharge day management); 99253 (inpatient

consultation); and 99262 (follow-up patient consultation). These

codes, referred to herein as “CPT codes,” were developed by the

American Medical Association (“AMA”), and are listed in the AMA’s

manual, Common Procedural Terminology , Fourth Edition.

3 The superceding indictment also named a third defendant, Gina

Weems, under counts 1-23, and count 26. The district court granted

Weems a judgment of acquittal during the course of trial.

4 18 U.S.C.§ 1341 and 2.

6 plain language, contemplated psychiatric and other medical services

personally provided by a physician. 2

B

On January 7, 1997, the grand jury returned a 26-count

superseding indictment against Bonham and Bulger. 3 Each count of

the indictment pertained to the appellants-defendants’ unlawful

billing practices and their submission of false and fraudulent

insurance claims. Specifically, the indictment charged both

appellant-defendants with 23 coun ts of mail fraud and aiding and

abetting mail fraud (counts 1-23), 4 and one count of conspiring to

commit mail fraud and to submit a f a lse claim to a federal5 18 U.S.C. § 1341; 18 U.S.C. 287.

6 18 U.S.C. § 287 and 2.

7 governmental agency (count 26). 5 Bonham, individually, was

i ndicted on 2 counts of submitting a false claim to a federal

governmental a gency and aiding and abetting the submission of a

false claim (counts 24-25). 6

On March 3, 1997, the defendants’ joint trial commenced, and

on March 28, 1997, the jury rendered its verdict. The jury

convicted Bonham on counts 1-3 and 5-23 (mail fraud and aiding and

abetting mail fraud), count 24 (submitting a false claim to a

federal governmental agency and aiding and abetting the submission

of a false claim), and count 26 (conspiring to commit mail fraud

and to submit a false claim). Next, the jury found Bulger guilty

of mail fraud, specifically, counts 1-3, and 5-23, and conspiring

to commit mail fraud and to submit a false claim (count 26). Both

defendants were acquitted on mail fraud (count four).

On July 14, 1997, after a c ontested sentencing hearing, the

district court sentenced Bonham to 60 months imprisonment on count

1, and 60 months imprisonment on each of counts 2-3, 5-24, and 26.

The district court ordered that Bonham’s sentences on counts 2-3,

5-24, and cou nt 26 run concurrently with one other, but

consecutively to his sentence on count 1, only to the extent

necessary to produce a combined sentence of 87 months. Bonham was

also ordered to make restitution in the amount of $3,911,000.7 Bonham’s reliance on S iddiqi v. United States

, 98 F.3d 1427

(2d Cir. 1996), is misplaced. The record is clear that during the

prosecution of Bonham’s case, and likewise on appeal, the

government pursued the same

, single theory of guilt; one, we add,

that previously earned our approval in United States v. Sidhu

, 130

F.3d 644, 647 (5th Cir. 1997). Furthermore, our discussion in part

three of this opinion belies Bonham’s contention that the

government’s experts failed to agree on the proper interpretation

of the CPT codes esta blished by the AMA. We therefore reject

Bonham’s alternative due process argument that the CPT codes are

unconstitutionally vague. In sum, we find no due process violation

with respect to Bonham’s convictions.

8 We find no purpose in addressing at any length, under the

plain error standard, or otherwise, Bonham’s separation of powers

argument raised for the first time of on appeal. Bonham contends

that his convictions violate the separation of powers clause

8 Next, the district court ordered Bulger to serve 46 months

imprisonment on each of her convictions, with the sentences to run

concurrently. In calculating Bulger’s sentence the district added

a two-level enhancement to Bulger’s o ffense level under U.S.S.G.

§ 3A1.1(b), based on the unusual vulnerability of the victims of

the mail fraud–-Dr. Bonham’s patients. The district court also

increased Bulger’s offense level by ten under U.S.S.G.

§ 2F1.1(b)(1)(N), based on the $3,911,000 in loss caused by the

fraud. Bulger and Bonham both timely appealed each of their

judgments of conviction and sentences.

II

As a threshold matter, we note that many of the arguments that

Bonham and Bulger have raised on appeal are frivolo us.

Specifically, we find no merit in Bonham’s arguments under the due

process clause, 7 the separation of powers clause, 8 nor Fed.R.Evid.because he was prosecuted, not for a crime enacted by Congress, but

for the improper use of the CPT codes devised by the AMA, which

resulted from agency, i.e., executive action of the HCFA in

contracting w ith the AMA for the use of its CPT codes in the

Medicare, Medicaid and CHAMPUS programs. Bonham, in advancing this

argument, has misconstrued th e basis of his federal convictions,

which rest on his fraud in violation of specific criminal statutes.

9 We cannot say that the district court erred under Fed.R.Evid.

404(b) in admitting extrinsic evidence of Bonham’s improper billing

practices through the testimony of Robert and Robin Wester. The

Westers’ testimony provided circumstantial proof of the scheme to

defraud the federal and private health care insurers, as well as

Bonham’s specific intent to commit mail fraud. We have previously

recognized that bad acts or wrongs, which establish a scheme to

defraud, are not the type of extrinsic acts contemplated by

Fed.R.Evid.404(b), and therefore the rule does n ot prohibit the

admission of such evidence. U nited States v. Hatch

, 926 F.2d 387,

394 (5th Cir. 1991).

9 404(b) 9

. Similarly implausible are Bulger’s arguments that the

d istrict court erred in adding a ten-level enhancement to her

offense level under U.S.S.G. § 2F1.1, based on the loss caused by1 0 We agree with the gove r nment that the district court’s

calculation of the loss resulting from the fraud at $3,911,000, was

both a reasonable and conservative estimate of the loss. S ee

Sidhu

, 130 F.3d at 651 (citations omitted). The district court

initially calculated the loss resulting from the fraud at

$8,693,000. The district court then gave the defendant a 25%

credit, representing the time Bonham purportedly spent personally

treating his pati ents. The record illustrates that the district

court was generous in t his regard, however. Bonham’s office

records show that he spent even a lesser percentage o f time with

his patients. The district court further reduced its loss

calculation by yet another 40% to reflect payments that Bonham did

not expect to receive from the insuring entities and patients.

This last reduction netted the district court’s final estimate of

$3,911,000. Moreover, in making its initial calculation, the

district court only c onsidered the fraudulent insurance claims

submitted from January 1990 to November 1994, and did not include

the claims Bonham filed against Medicaid in 1990 and 1991, nor his

claims filed a gainst Medicare in 1990. Finally, in adjusting

Bulger’s offense level upward by ten, the district court rejected

the thirteen-level incr ease recommended in the PSI Report, and

departed downward from the adjustment manda ted by the guideline

itself. S ee U.S.S.G. § 2F1.1(b)(1)(N) (if loss is more than

$2,500,000 add 13 level increase). In doing so, the district court

concluded that a thirteen-level increase overestimated Bulger’s

culpability, as she was only Bonham’s employee and not the director

of the mail fraud scheme. See Sidhu , 130 F.3d at 651 (citations

omitted) (noting district court properly accounted for defendant’s

relative culpability under U.S.S.G. § 2F1.1 by treating him as a “minor participant”). In the light of this record, we cannot say

that Bulger has demonstrated error with respect to t he district

court’s application of U.S.S.G. § 2F1.1.

1 1 Bulger argues that the district court’s application of

U.S.S.G. § 3A1.1(b) (1995) is improper because she is neither a physician, nor did she stand in a fiduciary relationship with

Bonham’s patients. Alternatively, Bulger contends that the true

“victims” of the mail fr aud scheme were Medicaid, Medicare, and

CHAMPUS–-entities who a re not “unusually vulnerable” for the

purposes of the guideline. Each of these contentions are

meritless.

U.S.S.G. § 3A1.1(b) (1995) provid es that “if the defendant

knew or should have known that a victim of the offense was

10 the fraud 10

, and in adjusting her offense level upward by two under

the vulnerable victim enhancement, U.S.S.G. § 3A1.1(b) 11unusually vulnerable due to age, physical or mental condition, or

that a victim was otherwise par ticularly susceptible to the

criminal conduct, increase by 2 levels.”

Nothing in the plain language of the guideline, nor its

commentary, can be read to support Bulger’s interpretation of the

vulnerable victim enhancement.

Second, in applying the vulnerable victim enhancement to

Bulger’s offense level, the district court conclu ded that Bulger

was aware that Bonham’s patients were unusually vulnerable because

of their psychological co nditions. The district court further

concluded that “[b]ecause of their mental and emotional conditions,

Bonham was able to convince patients or their families that

hos pitalization was necessary. By targeting these groups of

in dividuals, Bulger and Bonham were able to access the benefits

afforded by the insurance carriers.” The district court’s factual

finding is entirely supported by the record, and, thus, we accord

the district court the appropriate deference. Moreover, we have

time and again recognized that a phys ician’s unwitting patients,

specifically, those with mental infirmities, are the “unusually

vulnerable” victims of the physician’s fraudulent billing scheme.

United States v. Burgos

, 137 F.3d 841, 844 (5th Cir.), cert.

denied

, 119 S.Ct. 833 (1999); United States v Sidhu

, 130 F.3d 644,

655 (5th Cir. 1997); United States v. Bachynsky

, 949 F.2d 722,

735-36 (5th Cir. 1991). This rationale is controlling here. We

find no error with the district court’s application of U.S.S.G.

§ 3A1.1(b).

11 .We apply the sentencing guidelines in effect on the date that

Bulger was sentenced, July 14, 1997. U.S.S.G. §§ 1B1.11(a) and

( b )(1). S ee also 18 U.S.C. § 3553 (a)(4)(A). 12

. We likewise

discern no merit to the defendants’ remaining points error, namely

their numerous challenges to the sufficiency of the evidence.

However, because of the manner in which Bonham and Bulger have

gilded over the substantial evidence against them, we find that

each of the defendants’ sufficiency of the evidence arguments

warrant specific attention.

We further note that the evidence presented by the government

in support of the defendants’ c onvictions and sentences is

considerably commingled and overlapping. Thus, we will first

address, collectively, Bonham and Bulger’s challenge to the

sufficiency of the evidence supporting the mail fraud counts.

Second, we will address the defendants’ contention th at no proof

exists in support of their conspiracy conviction. Third, we will

dispose of Bonham’s challenge to his false claim conviction. With

this framework in mind, we turn now to the record before us.12 III

A

Bonham challenges the sufficiency of the evidence supporting

his convictions for twenty counts of mail fraud and aiding and

a betting mail fraud on the following grounds: (1) the government

presented four different interpretations of the “direct

supervision” requirement to the jury; (2) the evidence presented at

trial, at best, established that he ha d only “improper” billing

practic es; (3) the government failed to prove that the

psychotherapy services for which he billed the federal entities,

private insurers, and individuals had not been actually provided by

his therapists; and, thus, (4) without a showing of such loss from

the purported fraud, the government has failed to meet its burden

of proof of a reasonable doubt.

Bulger’s first argument is that the government failed to

establish that she placed any of the fr audulent insurance claims

underlying the twenty-two coun ts of mail fraud and aiding and

abetting mail fraud in the United States mail. Bulger similarly

contends that there exists no evidence that she entered, or caused

the billing information to be entered on any of the claims.

Therefore, citing United States v. Ragan

, 24 F.3d 657 (5th Cir.

1994), Bulger argues that the government failed to “link” her to

the indictment transactions, and, thus, each of her mail fraud

convictions should be reversed.

To establish a violation of the federal mail fraud statutes,

18 U.S.C. §§ 1341 and 2, the government must prove: (1) a scheme to

defraud; (2) the use of mails to execute that scheme; and (3) the

defendant’s specific intent to commit fraud. U nited States v.

Tencer

, 107 F.3d 1120, 1125 (5th Cir. 1997), cert. denied

, 118

S.Ct. 390 (1997) (citations omitted). A conviction for aiding and

abetting mail fraud must be corroborated with sufficient proof that

the defendants: (1) vol untarily associated with the criminal

enterprise; (2) voluntarily participated in the venture; and (3)

sought by independent action to make the venture succeed. Sidhu

, 130 F.3d at 650 (citations omitted).

B

(1)

Viewing the evidence in the light most favorable to the jury’s

verdict, as we must, Sidhu

, 130 F.3d at 648, we hold that the

government met its burden of establishing each of the defendants’

guilt beyond a reasonable doubt. The superceding indictment

alleged that from 1985 until January 7, 1997, Bonham and Bulger

knowingly devised and participated in a scheme to submit false and

fraudulent insurance claims to Medicare, Medicaid, CHAMPUS, private

insurers, and individuals. The theory of the government’s case was

that the defendants systemically billed the federally funded health

care programs, private insurers, and individuals for psychotherapy

and related medical services that were not personally provided by9 Jennifer Joergensen testifi ed that daily, Bulger created

hospital charge sheets, which listed the names of Bonham’s

p atients, where they were hospitalized, the dates of their

hospi talization, and the charges to be posted to their accounts.

Joergensen st ated that notwithstanding the medical care the

patien ts actually received, Bulger charged each patient for the

same “set” of standardized services: physician’s rounds, stress

reduction therapy, individual psychotherapy, and group

psychotherapy. To create the charge sheets, Bulger used an officegenerated patient list, which only identified the patients by name. She made no attempt to verify the true nature of the patient’s

psychiatric care, or if patients had been treated by t herapists

instead of Bonham. Bulger then gave the completed charge sheets to

Joergenson, and instructed her to bill the patients accor dingly.

Joergenson testified that these “charges” w ere, in turn, used to

generate the insurance claims ma iled to Medicaid, Medicare,

CHAMPUS, the private insurers, and individu als. Next, Kelly

Bridges, one of Bonham’s former receptionists, similarly testified

that under direct orders from Bulger, she routinely charged each

patient for the same cluster of psychiatric services. Finally,

consistent with Joergen son and Bridges’s testimony, Renee Husky,

testified that Bulger provided her nursing home charge sheets, and

instructed her to bill Bonham’s nursing home patients in a cookiecutter fashion. Husky also stated that Bulger never provided her

any proof of whether Bonham or his therapists had actually treated

the patients as billed. Husky further testified that Bulger

instructed her to use particular codes to update the patients’

accounts–-CPT billing codes 90801 and 90843. Husky stated that she

never knew, however, what information the codes communicated to the

13 Bonham, not provided under his “direct personal supervision,” nor

provided “incident to” a medical service rendered by him, as

required by the applicable federal regul ations. The government

further charged that Bonham, with Bulger’s assistance, filed the

insurance claims under his name and provider number, deliberately

using CPT codes that affirmatively misrepresented that he had

personally provided the psychiatr ic care for which he sought

payment. If rendered at all, the medical services were rendered by

Bonham’s nurses and therapists--employees for whose work Bonham was

not lawfully entitled to be reimbursed. Even still, the

defendants’ submitted fraudulent claims for medical services that

the therapists and nurses had not provided, or had not provided in

the manner or length of time billed.

(2)

We are satisfied that through the testimony of Bonham’s former

billing clerks, 9 therapists, 10 nurses, 11 and patients, 12 the governmentinsurance companies.

1 0 Georgia Williams testified that for the year s he worked as

a therapist for Bonham, from August 1991 until September 1992, she

was not a licensed psychotherapist, and did not become one until

after she left Bonham’s employment. Notwithstanding, Williams

stated that her job responsibilities included providing 45 minutes

of daily psychotherapy to 15 or 20 geriatric patients daily.

Williams further testified that during the year of her employment,

she never saw Bonham personally provide psy chotherapy to his

patients. Williams also testified that Bonham directed her to

complete daily, false p rogress notes on his geriatric patients.

Thus, for six months, Williams charted events in the patients’

files that had not occurred, and listed medical systems that the

patients did not have. Williams also documented that the geriatric

patients received 45 minutes of psychotherapy, although, because of

her heavy patient load, she spent only two to five minutes with the

patients. Finally, Williams testified that Bulger instructed her

t o tell the patients that Bonham was “out on an emergency” when

they inquired about his absence.

A second therapist, Car rie Gasparovic, testified that she

complied with Bulger’s instructions to falsely chart that she

conducted 30-minute psychotherapy sessions with Bonham’s adolescent

patients who were hospitalized at CPC Oak Bend Hospital.

Gasparovic further stated that, in any event, she never conducted

45- to 50-minute individual psychoth erapy sessions with the

patients–-a time period for which the patients were customarily

billed. Further, when the government questioned her if she had

been instructed to sp end less time with the patients, Gasparovic

responded that it was “something” about the Medicaid patients; “we

d idn’t need to spend as much time with them.” Gasparovic also

testified that for a ten d ollar bonus, she conducted Bonham’s

physician’s rounds on weekends.

Finally, Mary Elizabeth Costas testified that Bonham was never

present when she provided psychotherapy to his patients in the

Huguley Hospital. Similar to Williams, however, Costas was not a

licensed psychotherapist in March of 1993, when first hired by

Bonham. Costas testified that when she expressed to Bonham that

his patients had become disenchanted because they wer e being

treating by therapists, Bonham responded that he was no longer

seeing patients for individual psychotherapy.

1 1 Carrie Crawford worked for Bonh am as a licensed vocational

nurse, starting in August of 1992. Crawford testified that she and

second nurse, Lynn Hibben, customarily conducted the psychiatric

evaluations of Bonham’s nursing home patients. Using a book of

14diagnostic co des compiled by Bonham, Crawford would randomly

dictate codes for each pati ent. Crawford testified that Bonham

t old her which codes to dictate when conducting the evaluations,

and, thus, it only took five to ten minutes to complete the

evaluations. The trial evidence further established that Bonham

would bill the medical insurers for psy chiatric evaluations

conducted by the nurses. In doing so, Bonham would falsely certify

that he personally spent 70 minutes at the patients’ bedside.

Margaret Escamilla g ave a similar account of her work

experience with Bonham. Escamilla testified that for approximately

two and one half months, starting in July 1992, she worked part-time

as a psychiatric nurse for Bonham, and conducted psychiatric

evaluations of Bonham’s nursing home patients. Escamilla was still

in college at the time, however, and had not obtained a degree.

Escamilla stated that although she was not qualified to conduct the

evaluations, Bonham never accompan i ed her to the nursing homes.

Bonham instead trained her to complete the nursing evaluations using

an outline, and his book of diagnosis codes. Escamilla further

testified that Bonham did not follow up on the nursing home patients

as he represented he would and that, unbeknownst to her, he had

billed Medicare for the psychiatric evaluations she had completed.

1 2 From March 1998 until June 1998, Robin Wester was hospitalized at the Psychiatric Institute of Forth Worth and Medical Plaza

hospital. Wester stated that during that entire period, Bonham

never provided her the 60 minutes of individual psychotherapy, nor

the 60 minutes of family psychotherapy, for which he billed her

father’s insurer, Aetna. Regarding a 30-minute medicine check for

which Bonham billed Aetna, Wester stated that Bonham never treated

her for that period of time. Moreover, the group psychotherapy

sessions Wester attended were always conducted by therapists.

Wester clarified, however, that the time she spent with the

therapists wa s “usually very brief.” Wester’s father also

testified that the three fa mily psychotherapy sessions that he

attended with his daughter were each conducted by Bonha m’s

therapists. Bonham, however, billed Aetna as if he had personally

conducted the sessions.

Amy Lynn Kelty-Jacobs testified that during he r stay at the

Psychiatric Institute of Forth Worth from November 12, 1991 until

December of 1991, she only saw Bonham for three or four times, in

increments of only 5 or 10 minutes. Kelty-Jacobs further testified

that Bonham never provided her the 30 nor 45 to 50 minutes of

individual psychotherapy for which he billed CHAMPUS. Finally,

Kelty-Jacobs stated that her medical charts included false

information--diagnoses for prescriptions that she had never taken,

and entries that falsely represented that she had been treated by

15Bonham for several consecutive days in one week, several weeks in

a row.

Leesa Jo Pavelka similarl y testified that during her

hospitalization at CPC Oak Bend Hospital from October 5, 1992 until

November 21, 1992, she hardly saw Bonham; maybe two or three times.

Pavelka had no recollection of attending the 20- nor 30-minute

individual psychotherapy sessions with Bonham, for which he billed

Medicaid.

Kerri Springfield also denied receiving the psychiatric care

for which she and CHAMPUS were subsequently billed. Springfield

testified that during her thre e hospitalizations in the Medical

Plaza Hospital and the Huguley Hospital in 1991 and 1992, Bonham

never conducted fifteen weekly individual psychotherapy sessions

with her, and never made physician’s rounds to see her. At best,

Springf ield saw Bonham once a week for fifteen minutes. She had

daily encounters with his therapists, however. On September 14,

1992, however, Bonham sent Springfield a bill totaling $6,689.31.

The invoice als o showed that a claim for charges in excess of

$83,000 had been submitted to CHAMPUS.

Penny Schmidt offered a similar account of her psychiatric

treatment under Bonham’s care from February 19, 1992 to March 6,

1992. Schmidt was also a patient at Psychiatric Institute of Fort

Worth. Schmidt testified that she saw Bonham maybe once or twice

walking down the hall, and that he never provided her the

biofeedback, medication checks, individual psychotherapy, and group

psychotherapy as listed in the CHAMPUS insura nce claim. Schmidt

also stated that Bonham had not personally trea ted her as

represented in the physician’s notes included in her patient file.

Smith instead testified that the individual and group psychotherapy

sessions she attended were conducted by Georgia Williams, Bonham’s

therapist.

16 established the existence of the mail fraud scheme beyond a

reasonable doubt.

(3)

The numerous incidents of phantom billing also provided some

evidence fromwhich the jury could have reasonably inferred the

defendants’ guilt. On Sunday, November 24, 1991, 38 of Bonham’s

patients were collectively billed $7,150 in psychiatric treatment,

although Bonham was not scheduled to treat patients that day.

Next, on November 25, 1991, 70 of Bonham’s clinical patients were

charged for diagnostic psychiatric interviews and 45-minute

psychotherapy sessions. The total amount billed was $13,363.00.

Again, there existed no proof, i.e., patients’ files, physician’s

notes, that the services were actually rendered. The testimony of13 With respect to counts five and six, the evidence presented

at trial established that Bonham was in Washington, D.C., from

April 23-24, 1992. Likewise for counts seven, eight, and nine,

Bonham was in Tucson, Arizona, from November 5-7, 1992. Next, from

February 17 -19, 1993, the dates relative to counts ten, eleven,

twelve, and thirteen, Bonham vacationed in Albuquerque, New Mexico.

For the remaining counts of mail fraud (counts f ourteen through

twenty-two), for the period of March 16-19, 1993, Bonham was in

Cancun, Mexico.

17 the government’s witnesses made clear, however, that

notwithstanding how Bulger manipulated Bonham’s appointment books

by varying the amount of time a patient would be seen, Bonham, nor

his therapists could have treated that number of patients in one working day, and certainly could not have provided them 45 minutes

of psychotherapy. Finally, on Thanksgiving Day, in 1991, Bonham

vacationed in Cancun, Mexico. Although he admitted at trial that

he treated no patients this day, 20 of his patients were collectively charged $3,244 for individual psychotherapy sessions

allegedly conducted by him.

(4)

We next note that the government presented eviden ce to

corroborate each of the twenty-two substantive counts of mail

fraud. To establish that Bonham did not personally render the

medical services underlying each of the twenty-two counts of mail

fraud and aiding and abetting mail fraud, the government presented

proof, and, indeed, Bonham admitted on cross-examination, that he

was actually out of town on particular dates that he was alleged to

have treated his patients. 13 Additionally, for each of the twentytwo counts, the government introduced: (1) the HCFA 1500 claim form

that Bonham submitted to Medicare, Medicaid, CHAMPUS, and the

private insurance companies; (2) the copies of the canceled checks

remitted to Bonham in payment on the claims; and (3) status reports

that itemized the psychiatric services that Bonham alleged to have

provided his patients, the CPT codes Bonham and Bulger used to make

these represe ntations, and the benefits paid by the insuring

entities.

Finally, representatives from Medicare, Medicaid, and CHAMPUS all

testified that under the federal regulations applicable to each of

the twenty-two counts , Bonham and Bulger’s method of billing was

unlawful.

(5)1 4 Harvey is the director of customer support for the Medicare

division of Blue Cross and Blue Shield of Texas. Blue Cross and

Blue Shield administers the Medicare program in the state of Texas.

18 Barbara Harvey, 14 the Medicare representative, testified to the

Medicare regulations, as applied to mail fraud counts 1-2, 5-8,

10-11, 15-16, 18, 20-22. Harvey explained that when a physician

submits a claim to Medicare on the HCFA 1500 form, the physician,

vis-à-vis his signature on the form, has certified that he either

p ersonally provided the medical services for which the Medicare

claim was submitted, or that he directly supervised the performance

of that service by one of his employee s. Harvey also testified

that a physician’s (Bonham’s) use of the CPT codes 90843 and 90844

on the HCFA 1500 form constituted an affirmative representation

that he personally spent the time indicated in the code treating

the patient. Harvey explained, however, that under the Medicare

regulations, a physician--in this case, Bonham--could not

“personally provide” psychotherapy to a patient from a telephone in

Cancun, Mexico; nor could Bonham, from Mexico, “directly supervise”

psychotherapy sessions being conducted by therapists back in his

Texas clinics.

The defendants attempted to respond to this damaging

testimony, by asking Harvey a series of questions on crossexaminat ion as to whether Medicare permitted Bonham to bill for

services performed by his therapi sts or other employees. Harvey

r esponded affirmatively in each instance but, in doing so,

explicitly emphasized that Bonham was nonetheless required to abide

by Medicare’s billing regulations, i.e., that he personally provide

the services billed or that he meet the direct supervision

requirement, or the incidental services requirement. Harvey

further testified that with the exception o f certain exclusions

under the guidelines not applicable here, the direct supervision

requirement must be met with respect to every service provided by

a non-physician.

Harvey next testified that to bill Medicare for services

provide d “incident to” a physician’s services, the physician was

not required to be present in the room with the patient. Instead,

Medicare regula tions only required the physician (Bonham) to be

present in the office suite when his employees provided the

“incidental” se rvices. Harvey clarified, however, that the only

medical service she could qualify as being provided “incident to”

psychotherapy would be an injection given to the patient by the

physician’s employee. In response to a hypothetical question posed

by defense counsel, Harvey expounded even further on this concept:

an inject ion provided by a nurse is n ot provided “incident to” a physician’s services if the physician is out of the office when the1 5 Wallace is the m anager of the professional claims services

area of NHIC with Medicaid.

1 6 Smith is a program integrity special ist with the office of

CHAMPUS in Aurora, Colorado.

1 7 To become an authorized provider, an individual must complete

a CHAMPUS application, which certifies, i nter alia

, h i s professio nal credentials, and that he is licensed to practice in

his state. Indeed, physicians, physician’s assistants and

therapists are required to be certified and licensed in the state

in which they practice to participate in the CHAMPUS program. Once

a physician or therapist becomes authorized under CHAMPUS, for

bil ling purposes, the physician or therapist is given a provider

number, which is generally the same as his tax identification or social security number. [10 R 156].

19 nurse administers the shot, and, thus, the physician would not be

authorized to bill Medicare for the injection.

Next, Mary Ann Wallace 15 interpreted the Medicaid regulations,

as applied to counts 9, 12, 13, 14, 17, and 19. Wallace stated

that for the purposes of billing Medicaid for a physician’s medical

services, a physician was required to be physically present to

treat the patient. Wallace likewise testified that to lawfully be

reimbursed from Medicaid for psychotherapy billed under psychiatric

CPT code 90943, the physician (Bonham) must have personally

provided the psychotherapy. Wallace further clarified that for the

purposes of billing Medicaid under code 90843, a physician is

permitted to have a staff person assist him during the psychiatric

session, but the physician, nonetheless, must be physically present

in the room, actually treatin g the patient. A physician,

therefore, is not permitted to bill Medicaid under CPT code 90843

for psychotherapy provided by either a licensed vocational or registered nurse. Wallace did testify that under the Medicaid

guidelines a physician could arrange for “cover”–-to have another

accredited, licensed physician to provide psy chotherapy to his

patients during his short-term absence. The absent physician was

required to indicate on the claim form that some other doctor

treated the patient. Wallace stated that Bonham made no such

representations in his Medicare claim forms.

Finally, Ruth Smith, 16 interpreted the CHAMPUS regulations, and

testified to count three. Smith testified that CHAMPUS only pays

the claims for services of those health care professionals, i.e.,

physicians, therapists, and nurses, who are listed as “authorized

providers” under the CHAMPUS program. 17 CHAMPUS also permits

physicians to personally bill for medical service s rendered by

their the r apists, provided that the therapists themselves are20

authorized to treat patients under the program. In such instances,

the physician is required to indicate on th e HCFA 1500 form that

his therapists, not he, actually provided the medic al services

billed. Smith further testified that the claim form expressly

i nstructs the physician to indicate therein if “other providers”

have treated the patient. Smith testified, however, that according

to CHAMPUS records, none of Bonham’s nine therapists were identified as authorized providers under the program. Smith then

stated that if Bonham, co nsistent with CHAMPUS regulations, had

indicated on the CHAMPUS claim form that his therapists had

actually provided the psychotherapy session underlying count 3, the

claims would not have been honored. Smith similarly testified that

if Bonham had indicated to CHAMPUS that he was in New Mexico on

February 18, 1993, rather than his office suite, CHAMPUS would have

denied the claims for psychotherapy that Bonham alleged he provided

that day. The only service Smith could phantom as being rendered

“incident to” individual psychotherapy provided by Bonham would be

a nurse esc orting a patient into the room. Smith’s testimony on

this point is telling.

Indeed, we are of the view that this record literally speaks

volumes with respect to Bonham and Bulger’s guilt, which fully

s upports the jury’s verdict. In choosing among reasonable

constructions of this evidence, the jury properly rejected the

defendants’ theory of the case--that the psychiatric services for

which they billed Medicare, Medicaid, and CHAMPUS were, at all

times, provided under Bonham’s direct personal supervisi on, and

that a licensed physician treated Bonham’s patients in his absence.

Similarly, the jury reasonably could have found implausible

Bonham’s self-serving, and uncorroborated testimony that he

honestly believed it was permissibl e to bill Medicaid, Medicare,

and CHAMPUS at a phys ician’s rate for the work of his nurses and

therapists, and that he contacted the federal agencies, who in

turn, verified the accuracy of his billing procedures.

(6)

Furthermore, we find that neither defendant has weakened the

strength of the evidence of their guilt by their arguments on

a ppeal. First, in arguing that the government presented varying

interpretations of the direct supervision requirement, Bonham has

distorted the nature and content of the testimony of Smith, Roberta

Stellman, and Dr. Myron F. Weiner. Smith testified only to the

general b illing requirements applicable to CHAMPUS and, in doing

so, offered no interpretation of the “direct supervision”

requirement. The testimony that Bonham cites in support of his

argument ot herwise only reinforces our conclusion here. We are

likewise convinced that Dr. Stellman testified to issues regarding

“cover” and medical services provided “incident to” a physician’s

treatment of a patient. These concepts, while relative, are21

nonetheless quite different from notion of “direct supervision,” a distinction that Bonham has attempted to blur.

Weiner did state, however , as Bonham argues on appeal, that

“direct supervision” by a physician means that “the person does it

under your control–not always under your observation, but certainly

reports very directly to you.” Notwithstanding, consistent with

our obligation to attribute all reasonable inferences from the

testimony in favor of the jury’s judgment of conviction, our task

here is not to view this statement in isolation, but in conjunction

with the whole of Weiner’s testimony. In doing so, we find that

Weiner’s interpretation of “direct supervision” is entirely

consistent with Harvey’s earlie r testimony that Bonham could not

provide direct su pervision to his therapists while he vacationed

outside of Texas, specifically, in Cancun, Mexico. In response to

a hypothet ical question on the issue, Weiner testified that the

“direct supervision” requirement was not met where the physician’s

(Bonham’s) nurse conducts psychiatric evaluations of nursing home

patients while he is out of the state –-circumstances identical to

the facts of this appeal. Weiner further explained that the absent

p hysician should not submit a claim for a nurse’s evaluati on, misrepresenting it as his own; to do so would be to charge the

insurer for psychia tric care that the physician did not provide.

Thus, after viewing Weiner’s testimony in its proper light, we

cannot say that the government presented inconsistent

interpretations of the “direct supe rvision” requirement to the

jury. Bonham, in parsing the above isolated statement from

Wallace’s testimony, has attempted to manufacture a discrepancy in

the record that does not exist.

Second, in the li ght of the testimony of Bonham’s former

employees and patients, as informed by the testimony of the

Medicare, Medicaid, and CHAMPUS representatives, Bonham’s argument

that he only had improper, rather than unlawful, billing practices

is frivolous. The law in this circuit is entirely consistent with

the Second Circuit’s explicit pronouncement that a physician’s

deliberately misleading use of a particular billing code in claims

submitted to Medicare suppo rts criminal fraud charges under 18

U.S.C. § 1341 and 18 U.S.C. 287. Cf. Siddiqi , 98 F.3d at 1428 to

Sidhu , 130 F.3d at 647-49.

Finally, Bonham’s assertion that his therapists fully provided

the medical services for which he billed–-an argument, we add, not

s upported by the evidence--does nothing to undermine the

overwhelming case against him. The truly relevant considerations

underlying Bonham’s convictions are not what services his

therapists allegedly provided, but what medical services Congress

through its legislation, and the agencies t hrough implementing

regulations, intended to pay fo r under Medicare, Medicaid, and

CHAMPUS. Notably, the testimony of the representatives of federal

agencie s was entirely consistent on this point: the government22

would not have knowingly compensated Bonham at the much higher fee

schedule ap plicable only to physician’s services for the

psychiatric treatment purportedly provided by his therapists. This

tes timony, which stands uncontested on the record before us,

disposes of Bonham’s final argument–-that the government failed to

show loss from the fraud.

(7)

Bulger argues that there exists no evidence that she actually

placed any of insurance claims underlying the 22 counts of mail

fraud in the United States mail. Even if we assume her statement

to be true, this fact does not warrant the reversal of her

convictions. To sustain a § 1341 or § 1342 mail fraud conviction

the government need not establish th at the defendant personally

sent the offending articles through the mail. U nited States v.

Manges

, 110 F.3d 1162, 1169 (5th Cir. 1997), cert. denied

, 118

S.Ct. 1675 (1998). Where, as here, the mailing of the insurance

claims was an essential part of the defendants’ scheme, it is

sufficient if the claims were sent either b y a victim of the

scheme, or an innocent third party M anges

, 110 F.3d at 1169

(internal citations and quotations omitted). Bulger concedes in

her brief tha t several of Bonham’s unindicted employees were

responsible for mailing the HCFA 1500 forms on which the fraudulent

insurance claims were submitted. This concession is fatal to her

appeal. These individuals qualify as “innocent third parties” as

contemplated by Manges

. Ragan does also nothing to advance Bulger’s position. In

Ragan , 24 F.3d at 659, the government conceded that the defendant

never personally entered the information on the fictitious trade

tickets underlying his convictions for eighteen c ounts of mail

fraud. Therefore, to sustain the convictions, we held that the

government had the burden of proving that the defendant was so involved with the information being placed onto the trade tickets

by the third party that reasonable and fair-minded men would agree

that the defendant “caused” the fraudulent information to be to be

transmitted through the mail. I d. (citing United States v.

Vontsteen

, 872 F.2d 626, 628 (5th Cir. 1989). In U nited States v.

Humphrey , 104 F.3d 65, 70 (5th Cir. 1997), cert. denied , 520 U.S.

1235 (1997) (citations omitted), we further expounded on this

premise. We explained that if a defendant acts “with the knowledge

that the use of the United States mail would follow in the ordinary

course, or that the use of the mail was reasonably foreseeable,”

then she has “caused” an article to enter the United States mail

for the purposes of § 1341. Id.

Applying Ragan

, as informed by Humphrey

, we find there exists

sufficient proof that Bulger “caused” the f raudulent insurance

cla ims to be placed in the mail. It is without dispute that the

placement of the HCFA 1500 form in the mail provided the sole means by which the defendants submitted, as well as recouped payment on23

the fraudulent insurance claims. Thus, from the evidence that

Bulger instructed Bonham’s staff to bill the nursing home patients’

using a specific CPT code, and that she routinely charged each

patient for a “set” of psychiatric services–-information she later

instructed the staff to transferred to the HCFA 1550 forms--we find

that Bulger acted with the requisite knowledge of a very foreseeable, if not an obvious fact–-the mailing of the HCFA 1500

form would follow in the ordinary course of the scheme.

(8)

In sum, the evidence su pporting the jury’s verdict is

overwhelming. Bonham and Bulger’s convictions on the twenty-two

counts of mail fraud and aiding and abetting mail fraud are

therefore affirmed.

IV

A

Bonham and Bulger next argue that the sufficiency of the

evidence fails to support their conviction on count 26, conspiring

to commit mail fraud and to submit a false claim to a federal

governmental agency. The ultimate points of contention between the

government and the defendants are: (1) whether the government met

its burde n of establishing the existence of the conspiratorial

agreement; and (2) whether the defendants committed any overt acts

in furtherance of the agreement.

B

To establish the existence of a mail fraud and false claims

conspiracy the government must establish beyond a reasonable doubt:

(1) an agreement between two or more persons; (2) to commit these

crimes; and (3) an overt act committed by one of the conspirators

in furtherance of the agreement. Id. at 681-82.

Resolving all inferences and credibility determinations from

the evi dence in favor of the government, we hold that Bonham and

Bulger’s concert of action in actively submitting false and

fraudulent claims to Medic a id, Medicare, and CHAMPUS provided

circumstantial evidence from which the jury reasonably found the

existence of the mail fraud and false claim conspiracy. S ee Sidhu

, 130 F.3d at 648.

Next, we need only to refer to much of the ground previously

covered in this appeal to hold that the government met its burden

of showing at least one of the co-conspir ator’s took an act in

furtherance of the conspiracy

. S ee Sidhu

, 130 at 658. Bonham

acted complicitly in the mail fraud and false claim conspiracy when

he deliberately misused the CPT codes to misrepresent the nature of

the psychia tric services provided his patients, the duration of

such services, and the fact that he never treated the patients.

Bonham also instructed his employees to falsify inf ormation

contained in the patients’ progress notes, and the actual length of

the psy chotherapy sessions they conducted. Moreover, although24

further proof is unnecessary to sustain the defendants’

convictions, see Sidhu

, 130 F.3d at 649, (co-conspirator liable for

reasonable foreseeable acts o f her cohort), we further note that

Bulger acted in furtherance of the conspiracy when she instructed

the office staff to add bogus charges to the patients’ accounts.

Bulger also scheduled patients for 20-minute psychotherapy

sessions, which she later billed as 45-minute sessions. To be

sure, this case bears an uncanny resem blance the conspiracy for

which the def endant psychiatrist and his office manager were

convicted of in Sidhu

, 130 F.3d at 647-50. Thus, we need not dwell

on this issue further. We affirm Bonham and Bulger’s conspiracy

conviction on count 26.

V

A

In his f inal argument on appeal Bonham challenges the

sufficiency of the evidence supporting his conviction for one count

of submitting a false claim to a federal governmental agency and

aiding and abetting the submission of a false claim. Bonham

presses the same arguments here as he did in challenging his

convictions for the twenty-two counts of mail fraud.

B

To sustain Bonham’s conviction for filing a false claim under

18 U.S.C. § 287, the government must prove that: (1) a false or fraudulent claim was presented against the United States; (2) the

claim was presented to a governmental agency; and (3) the defendant

knew that the claim was fal se. U pton

, 91 F.3d at 681. Bonham’s

conviction for aiding and abetting the submission of a false claim

must be supported with sufficient ev idence that Bonham: (1)

voluntarily associated with the criminal enterprise; (2)

voluntarily participated in the venture; and (3) soug ht by

independent action to make the venture succeed. S ee Sidhu

, 130

F.3d at 650 (citations omitted) (aiding and abetting mail fraud).

We are satisfied that the governm ent presented evidence

sufficient to m eet its burden of proof on each of the essential

elements of these crimes beyo nd a reasonable doubt. Count 24 of

the superceding indictment alleged that Bon ham knowingly and

willfully submitted a false and fraudul ent claim to CHAMPUS, an

agency of the United States, for medical services purportedly

provided to Georgia Malyszka. The evidence presented at trial

established that on February 25, 1993, Bonham filed a $1,375 claim

with CHAMPUS for psychiatric and related medical services that he

purportedly provided Malyszka from February 14-20, 1993. On

April 7, 1993, CHAMPUS paid Bonham $366 on the claim. The record

shows, and Bonham concedes, however, that he did not personally

provide the medical services claimed for the dates of February

17-19, 1993, as he was in Albuq uerque, New Mexico. Smith, the

CHAMPUS representative, testified that if the government had known25

tha t Bonham was out of the state from February 14-20, 1993, the

government would have denied the claim as false.

Regarding the remaining dates listed in the CHAMPUS claim,

Malyszka testified that she was never treated by Bonham during her

February 1993, stay at the CPC Oak Bend Hospital. Malyszka stated

that she instead met with Betty Spainhour daily, one of Bonham’s

therapists. Bonham’s appointment book supports this testimony.

The appointment book showed that Malysz ka was scheduled for

45-minute psychotherapy sessions with Spainhour on the 15, 16, 18,

and 19 of February 19 93. Malyszka was paired with a second

therapist on February 17, 1993. Neither one of these therapists

were listed as authorized providers under the CHAMPUS program,

however. Bonham, therefore, was not lawfully entitled to be

reimbursed for psychotherapy they purportedly provided.

Significantly, Malyszka further testified that even her

psychotherapy sessions with Spainhour only lasted five to ten

minutes, and that the multiple 45-minute individual psychotherapy

sessions, t he family psychotherapy sessions, and the psychiatric

diagnostic interview, for which CHAMPUS reimbursed Bonham, ne ver

occurred. Malyszka explained that prior to Bonham’s trial, she had

neither m et nor spoken to the physician. Incriminatingly,

Malyszka’s patient file contained progress notes signed by Bonham,

which falsely represent ed that he conducted the 45-minute

psychotherapy sessions for which he billed CHAMPUS.

In the light of the record before us, we are fully satisfied

that the jury properly rejected as untenable Bonham’s te stimony

that he properly complied with the CHAMPUS regulations in

submitting this claim. We therefore affirm Bonham’s false claim

conviction.

VI

For the afore mentioned reasons, we AFFIRM each of the

defendants’ convictions and their respective sen t ences on all

counts.

A F F I R M E D.