Document: 529 U.S. 667120 S.Ct. 1780146 L.Ed.2d 707 SyllabusNOTE: Where it is feasible, a syllabus (headnote) will be released, as being done in connection with this case, at the time opinion issued. The constitutes no part of Court but has been prepared by Reporter Decisions for convenience reader. See United States v. Detroit Timber & Lumber Co., 200 321, 337. SUPREME COURT OF THE UNITED STATES FISCHERv.UNITED CERTIORARI TO APPEALS FOR ELEVENTH CIRCUIT No. 99_116. Argued February 22, 2000 Decided May 15, Petitioner, while president and owner Quality Medical Consultants, Inc. (QMC), negotiated $1.2 million loan to QMC from West Volusia Hospital Authority (WVHA), municipal agency responsible operating two Florida hospitals, both which participate federal Medicare program. In 1993 WHVA received between $10 $15 funds. After 1994 audit raised questions about loan, petitioner was indicted violations bribery statute, including defrauding an organization receives benefits under assistance program, 18 U.S.C. § 666(a)(1)(A), paying kickback one its agents, §666(a)(2). A jury convicted him on all counts, District sentenced imprisonment, imposed term supervised release, ordered payment restitution. On appeal argued that Government failed prove WHVA, affected his wrongdoing, "benefits excess $10,000 Federal program," required §666(b). rejecting argument affirming convictions, Eleventh Circuit held funds constitute "benefits" within §666's meaning if source like Medicare, provides aid or participating organizations. Held: Health care providers such defrauded receive Pp. 3_14. (a) Medicare's nature purposes provide essential instruction resolving controversy. federally funded medical insurance program elderly disabled. single largest hospitals Medicare. Such qualify upon satisfying comprehensive series statutory regulatory requirements, licensing, quality assurance, staffing, other standards. Compliance these standards assurance possess capacity fulfill their obligation providing "medically necessary" services "of meets professionally recognized health care." 42 1320c_5(a). attains objectives through elaborate funding structure designed not only compensate reasonable cost actually rendered patients, also enhance organizations' ongoing, community large. normal course disbursements occur periodically, often advance provider's rendering services, order protect providers' liquidity thereby assist ongoing provision services. then, establishes correlating reinforcing incentives: interest making available high level disabled; providers, because financial dependence have incentives achieve goals. 3_7. (b) provider payments are "benefits," used ordinary sense intended rejects petitioner's disabled, While standard definitions "benefit" provisions support assertion qualifying patients rank program's primary beneficiaries, fact beneficiary can identified does foreclose existence others. Section 666(b)'s language specifying form "a grant, contract, subsidy, guarantee, insurance, assistance," coupled §666(a)'s broad substantive prohibitions, reveals Congress' unambiguous intent ensure integrity organizations programs. removing statute's coverage any "bona fide salary, wages, fees, compensation paid, expenses paid reimbursed, usual business," §666(c) exclude here issue simply reimbursement. payments, contrast, hospital maintaining certain own interests those greater community. itself object substantial regulation, adequate objectives. Accordingly, receiving benefit conventional term, unlike case contractor whom regulate long-term beyond performance immediate transaction. 7_13. (c) suggest disbursed result recipient fraud Adopting broad, almost limitless use would upset proper balance. inquiry should examine conditions received. answer could depend, here, whether recipient's operations reasons legitimate significant prohibiting perpetrated providers: acts threaten raise risk lack resources needed requisite care. 13_14. 168 F.3d 1273, affirmed. Kennedy, J., delivered Court, Rehnquist, C. Stevens, O'Connor, Souter, Ginsburg, Breyer, JJ., joined. Thomas, filed dissenting opinion, Scalia, Opinion 1 NOTICE: This subject formal revision before publication preliminary print Reports. Readers requested notify Decisions, Supreme States, Washington, D. 20543, typographical errors, corrections may made goes press. 99_116 2 JEFFREY ALLAN FISCHER, PETITIONERv.UNITED 3 ON WRIT 4 [May 2000] 5 Justice Kennedy Court. 6 statute prohibits "receiv[e], year period, program." 666(b). We granted certiorari determine covers Upon consideration role regulated status we hold they statute. affirm convictions. 7 * Petitioner Jeffrey Allan Fischer partial corporation performed billing audits petitioner, QMC's behalf, located County, Florida. Both WVHA 8 WVHA's affairs loan. An investigation revealed proceeds repay creditors salaries five owner-employees, petitioner. It determined had arranged least $100,000 private company owned individual who assisted securing letter credit QMC, directive, committed portions speculative securities. These investments yielded losses $400,000. further uncovered pay, intermediate transfer, chief officer, first instance. defaulted bankruptcy. 9 1996 grand 13 charges counts charged, 65 months' imprisonment 3-year release. addition, pay 10 WVHA, Rejecting argument, Appeals affirmed 1273 (1999). §666(b) Id., 1276_1277. Entities commercial contracts, court stated, fall outside coverage. Ibid. (citing discussing Copeland, 143 1439 (CA11 1998) (holding contract construct military aircraft did §666(b))). added construction furthered "the purpose protecting fraud, theft, undue influence money distributed particular, similar programs." F.3d, 1277. rejected view "targeted recipients," patients. 1278 (disagreeing LaHue, 998 F. Supp. 1182 (Kan. 1998), aff'd, 170 1026 (CA10 1999)). 11 certiorari, 528 ____ (1999), affirm. II 12 give us present Established 1965 Social Security Act, 1395 et seq. (1994 ed. III), fiscal 1997 some 38.8 individuals were enrolled over 6,100 authorized them. Dept. Human Services, Care Financing Administration, 1998 Data Compendium 45, 75 (Aug. 1998). expenditures exceeded $123 billion 1998, hospitals. Highlights, National Expenditures, Table (May 11, 2000), http://www.hcfa.gov/stats/nhe-oact/tables/ t9.htm. amount constituted 32% hospitals' total receipts. Providers operated particular accreditation Hospitals, instance, must satisfy licensing standards, CFR 482.11 (1999); governing body "ensure there effective, hospital-wide evaluate patient care," §482.21; employ "well organized" staff accountable matters relating provided patients," §482.22(b). implementing regulations require among many maintain 24-hour nursing §482.23; complete record §482.24; "pharmaceutical meet needs §482.25; organized dietary staffed qualified personnel, §482.28. go further, requiring facilities "be constructed, arranged, maintained safety patient, diagnosis treatment special appropriate community." §482.41. Peer review monitor compliance obligations. §1320c_3(a); 466.71 Sanctions noncompliance include dismissal 1320c_5(b)(1). 14 structure. Participating organizations, exchange periodic basis. §§1395g, 1395l. amounts reflect "reasonable cost" rendered, defined costs necessary efficient delivery covered [by program]." §1395x(v)(1)(A). Necessary limited procedure. Instead broader terms: "Necessary helpful developing operation activities." 413.9(b)(2) Allowable organization's eligible By way example, incurred "certain educational programs interns residents, known [graduate education] programs, `allowable cost[s]' (a provider) reimbursement." Regions Shalala, 522 448, 452 (1998) 413.85(a) (1996)); see §413.85(b) Thomas Jefferson Univ. 512 504, 507_508 (1994) (describing regulation education programs). "These programs," explain, "contribute institution community's paramedical personnel. . [M]any communities assumed responsibility financing purchasing healthcare. Until undertake bear costs, appropriately 413.85(c) permits, indeed encourages, deposit reimbursements depreciation cash into sinking called "funded accounts." §413.134(e). Investment income earned operate reduce expense, §413.153(b)(2)(iii), creating modern equipment facilities. 15 regulations, furthermore, afford "special treatment," availability pt. 412G "Medicare-dependent, small rural hospitals," entitled additional, "lump sum" declines demand §412.108. additional enable "maintai[n] [its] core services" "fixed (and semi-fixed) costs." §§412.108(d)(3)(A), (B). So too authorize treatment" for, "sole "renal transplantation centers," "hospitals serve disproportionate share low-income patients." §§412.92, 412.100, 412.106. subsidies obligations continue going concerns accordance requirements. See, e.g., §412.92(d)(2). 16 basis, 1395g(a); §§413.60, 413.64 system serves "protect liquidity," Good Samaritan 508 402, 406 (1993), assisting 413.5(b)(1) (1999) (requiring reimbursement method "result current so institutions disadvantaged, sometimes arrangements, having put up purchase goods well reimbursement"); §413.5(b)(6) (reimbursement "recognition need keep pace growing make improvements"). bears question B 17 666 Title Code theft against relevant follows: "(a) Whoever, circumstance described subsection section exists- 19 "(1) agent organization, State, local, Indian tribal government, thereof- 20 "(A) embezzles, steals, obtains otherwise without authority knowingly converts person than rightful intentionally misapplies, property that- 21 "(i) valued $5,000 more, 22 "(ii) by, care, custody, control agency; 23 "(B) corruptly solicits demands person, accepts agrees accept, anything value intending influenced rewarded business, transaction, transactions 24 involving more; 25 "(2) gives, offers, reward local thereof, 26 "shall fined title, imprisoned more years, both. 27 "(b) referred receives, assistance. 28 "(c) apply bona business." 29 Liability prohibited predicated showing "receive[d], Those assistance." All agree 400.200 actions, sole point contention (b). 30 argues disabled Provider view, do render compensation. Under submission envisions beneficiary, patient. Government, opposition, urges determination turns payment. Funds asserts, traced coffers, intermediary carrier, provider. "federal-program funds" satisfies definition. Brief 11. 31 reject reading endorsing Government's position. conclude noun means "something guards, aids, promotes well-being: advantage, good"; "useful aid"; "payment, gift [such as] help sickness, old age, unemployment"; service annuity, pension plan, policy." Webster's Third New International Dictionary 204 (1971). commonplace refer retirement plans "benefits." ought disputed beneficiaries 1395c 1395j; 400.202 (defining "beneficiary" "person benefits"); Shalala Guernsey Memorial Hospital, 514 87, 91 (1995) ("Under scheme _ furnish reimbursed Secretary intermediaries"); U.S., 404 (same). 32 That others, however. respect incomplete operates design above point-of-sale follows extend manner well. limiting targeted exclude, (such Blue Cross Shield), parties disavow. For cannot themselves derive advantage participation Government. advantages "expansive," "both [conduct] forbidden entities covered." Salinas 52, 56 (1997). 33 Subsection identifies several sources program-"a indicates Congress viewed Coupled prohibitions (a), expansive, 34 analysis. removes §666(c). either "compensation" "expenses reimbursed," combination two, "usual disagree. 35 specified sorts ones applies. One inference formulation exemption. far. Even assuming examples definition benefits, nonapplicability necessarily rise absent enumeration apply. To define exempted word. hand, written say "The `benefits' construe consistent reach enumerated class transactions. S. Rep. 98_225, p. 370 (1984) (stating "not every disbursement [under §666]. government lawfully purchases supplier, supplier crime"). 36 accept compensating reimbursing them expenditures. addition reimbursement, neither terms nor business set forth met here. attributes (c). "benefit." might similarities insurer remit quite regard unless complies intricate scheme. reimburse 37 Here, explained, regulation. end reciprocal isolated sound effective enacted specific statutes secure promoting provider, Adequate effects suffice 38 reveal enterprise aimed ensuring our discussion shows, qualification 482 wide range expenses, overhead furthers objective. structured render, structure, moreover, proves untenable stability once Payments calculated stability. §413.5(b); 406. Incentives given improvements, capital education. §§413.85, 413.134(e), 413.153(b)(2)(iii). Subsidies, awarded providers. 412G. short, play vital carrying out purposes. funds, turn, extending isolated, 39 Our taken Any receipt can, generality, characterized benefit. term. Doing turn act offense, upsetting examination undertaken operation, purpose. payments. standard. 40 Fraudulent integrity. They envisioned Cf. Salinas, 61 acceptance bribes official jail housing prisoners pursuant agreement "was threat program"). 41 Other cases elaboration Here suffices judgment ordered. 43 Scalia joins, dissenting. 44 my persons rather hospital, I respectfully dissent. 45 jurisdictional 666(b) requires "organization, receiv[e], As notes, merely Ante, 9, 13. Rather, admits, something "guards, well-being"; [as] unemployment." Therefore, acknowledges, "receives benefits" guard, aid, promote well-being useful trouble. market transaction "benefits."1 46 leaves doubt Although complex, few critical components.2 47 relied ante, 5_7, reimburses incurred, excluding therefrom found unnecessary services." 1395x(v)(1)(A). Act created instructed Services promulgate establishing methods determining costs" specifically directed consider, things, insurers. 91_92 (1995). 48 based lower furnishing customary 413.1(b) actual beneficiaries. §413.5(a) ("Thus, application approach, accounting support, meeting beneficiaries"). clear opposed nonbeneficiary §413.80(d) borne program"); §413.9(a) ("All related beneficiaries"); §413.9(c)(3) ("The 49 permit recover building facilities, §413.9(c), allowable reasonably attributable general maintenance §413.9(b) objective covered, 50 "prospective system" adopted 1983 increase efficiency somewhat differently 1395ww; 412 system, pays fixed price each patient's grouping (DRG), assigned diagnosis, sex, things. 1395ww(e); 412.60 DRG figure represents average treating DRG. 1395ww(d)(2); Fed. Reg. 251 (1984). Significantly, DRG, contractor, higher costs. Kinney, Making Hard Choices Prospective Payment System: Administrative Model Allocating Resources Insurance Program, Ind. L. Rev. 1151, 1151_1152 (1986). 51 Thus, estimated patients-not hospitals-are Indeed, explicitly says so. 1395a(b)(5) ed., III) `medicare beneficiary' (emphasis added)). repeatedly refers participants, §1395a ("Any subchapter"); §1395b_2 ("Such notice shall mailed annually subchapter when applies enrolls §1395b_4(a) ("health §1395b_4(b)(2)(A)(i) ("information obtaining benefits"). commonly "payments" §1395g(a) ("no furnished information request"); §1395f(a) ("payment services"); §1395n(a) eligible"). terminology, defining "financial help" treat nothing establish said 52 cited demonstrate aid" help," finds evidence are, along target think Court's reasoning unpersuasive boundless; flowing deemed rationale, notwithstanding concluding disclaimer result. although purports "funds originate practice, adopts it. 53 First, describes notes recovery allows training. 5. contrary, recoverable tied supra, 3. sense, expressly defeat suggestion meant hospital. hospital; And again, picks portion §§413.50, 413.85 fact, grapple systematically under-compensates undermine notion Utz, Federalism Care: Costs Benefits, Conn. 127, 138_139 54 Second, relies numerous 4_7. laundry list quality-assurance assume, however, same most contractors. defense build military's is, doubt, extensive intends place controls expenditure dollars. 1439, 1442 (discussing burdens contractors). Similarly, insurers impose various requirements different insurers, except exercises vastly power. words, imposition irrelevant benefits. 55 Third, contends lump sum ability 6. feature insufficient show Authority. prospective 3_4, 412.108 Like schemes outlined above, subsidize prospectively performing service. Finally, concludes, observations "Medicare namely, "ensuring 10, 12. According guarantees "providers on-going exists guarantee patients' access remain financially viable. create and, therefore, syllogism, self-evident aims program-patients-are able dole. 57 none components flow that, invokes, mantra-like, conclusion see, 12, 13, comes around identifying purpose, state: bring say, must, hospital.3 58 disclaims expansive rationale applied organization. inconsistent plain If §666 "funds" totaling per annum, 665 ("Whoever, connected [a program] ineligible participant, willfully moneys, assets, [punished]"). Congress, matter, omitted word "receives, assistance" suggests separate apart words "under am doubtful interpretation gives because, amount. 59 very least, rule lenity-which discuss. principle extent ambiguity resolve favor defendant. Bass, 336, 347 (1971) ("In ways stated choice readings what conduct crime, appropriate, choose harsher alternative, spoken definite" (internal quotation marks omitted)). C 60 illustrate just example employed courts. Wyncoop, 119, 123 (CA9 1993); 1182, 1187 1999). Many grocery stores annum food stamps Food Stamp Distribution Program. Program 278 sell percentage staple foods meat, cereal, dairy products. §278.1(b)(1). Stores document attract stamp reputation store owners managers. §§278.1(b)(2)_(3). monitors §278.1(n). sanctions §278.1(l). And, point-of-sale" food. 10. Undoubtedly, helps address "grocery gap," priced nutritional areas. Note, Trafficking: Why Small Groceries Need Judicial Protection Department Agriculture (And Their Own Employees), 96 Mich. 2156, 2176_2177 (1998); Agriculture, Office Analysis Evaluation, Retailers Program: Characteristics Service Participants (Feb. 1997) (Table 6). There ample face mind stores. 2021(a) IV) consider hardship disqualification determinations); 278.1(b)(1)(ii)(C) (listing factor firm's program). said, store's "own mind, reason corner fail how would. assures holding today narrow factbound, depending "structure, purpose" ibid., consequences far reaching. candidly acknowledges reads "Congress organizations." added). reflects congressional unemployment," 62 63 foregoing reasons, Notes 64 1. thought standing alone, eliminate doubt. 666(c) makes discussed below, precisely type 2. 1993, instant consisted Parts B. Part cover inpatient facility home hospice generally 1395c-1395i_4. voluntary supplemental participants of, physician laboratory diagnostic tests, ambulance prescription drugs. §§1395j-1395w_4. trial regarding accounted 1993. 66 even Medicare-the provisions, example-provide Without evidence, reliance uphold conviction improper. after all, prosecution treats window dressing. necessary, sufficient approach particularly inappropriate §666(b), provision, constitutionally required. spending power, Art. I, §8, cl. power requires, exercise "to national projects South Dakota Dole, 483 203, 207 (1987) omitted). id., 213 (O'Connor, dissenting). Arguably, attempted criminalize solely that-in circumstances unrelated bribery-the victim constitutional requirement satisfied. routine bribery, which, "upse[t] balance." Lopez, 549, 561 ("[Section] 922(q) contains element ensure, case-by-case inquiry, firearm possession affects interstate commerce").

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