Opinion ID: 1846641
Heading Depth: 2
Heading Rank: 1

Heading: Constitutionality of Medicaid Provider Fraud Statute

Text: In the information alleging violation of section 409.920(2)(a), the defendants were charged with on various dates knowingly making, causing to be made, or aiding and abetting the making of a claim for payment for dental services which were not rendered. The trial court's order granting the defendants' motion to dismiss on the ground that section 409.920(2)(a) is unconstitutional states that the trial court's ruling is as to the issue of law and not on the basis of findings of fact. State v. Rubio, No. 48-2003-CF-13501-O (Fla. 9th Cir. Ct. order dated Feb. 1, 2005) (Order). The Fifth District affirmed the motion to dismiss. The case is now presented for our review of whether the granting of the motion to dismiss on the constitutional ground was correct. Section 409.920(2)(a) provides that it is unlawful to: Knowingly make, cause to be made, or aid and abet in the making of any false statement or false representation of a material fact, by commission or omission, in any claim submitted to the agency or its fiscal agent for payment. At the time that the defendants were charged with violating this provision, knowingly was defined in section 409.920(1)(d) to mean that the act is done by a person who is aware or should be aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the intended result. [1] This issue is similar to the issue of constitutionality of section 409.920(2)(e) that this Court considered in State v. Harden, 938 So.2d 480 (Fla.2006), cert. denied, ___ U.S. ___, 127 S.Ct. 2097, 167 L.Ed.2d 812 (2007). In Harden, the defendants were charged with nine counts of conspiracy, racketeering, and Medicaid fraud under section 409.920(2)(e), Florida Statutes (2000). That section states that it is unlawful to: Knowingly solicit, offer, pay, or receive any remuneration, including any kickback, bribe, or rebate, directly or indirectly, overtly or covertly, in cash or in kind, in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made, in whole or in part, under the Medicaid program, or in return for obtaining, purchasing, leasing, ordering, or arranging for or recommending, obtaining, purchasing, leasing, or ordering any goods, facility, item, or service, for which payment may be made, in whole or in part, under the Medicaid program. This is known as the anti-kickback provision of the statute. The same definition of knowingly in section 409.920(1)(d) applies to both sections 409.920(2)(a) and 409.920(2)(e). In Harden, the defendants argued that the Florida statute was preempted by the federal Medicaid anti-kickback statute, in part because the Florida statute's definition of the term knowingly conflicted with the federal mens rea requirement that the kickback occur knowingly and willfully. However, the defendants in Harden also based their preemption argument on the federal statute's twenty-two exceptions or safe harbors from the anti-kickback provisions that were not similarly excluded by the state statute. These safe harbor provisions include an exception for patient referrals occurring within a bona fide employment relationship. The defendants in Harden maintained that the alleged kickbacks were part of a bona fide employment relationship and thus could not be prosecuted under the federal statute. In considering Harden, we reviewed the federal anti-kickback statute, noting that within the legislative history of the federal statute, it was clear that the purpose of the federal anti-kickback provision was to outlaw health care referrals that were unethical or inappropriate. Harden, 938 So.2d at 487-89. The federal statutory language for the anti-kickback provision originally had no mens rea requirement, though it was primarily concerned with outlawing health care referrals that were considered unethical or inappropriate. Id. at 487. Subsequent amendments added both a knowing and willful mens rea requirement, as well as the safe harbor provisions. These amendments were made because of health care providers' concerns that the statute was overbroad and punished conduct that while improper, was inadvertent. Id. at 487-89. We noted that although the federal statute did not provide for explicit preemption of the Florida anti-kickback statute, implied conflict preemption could still exist. We stated that we must look to the statutory differences between the federal and state laws and determine whether these differences warrant conflict preemption. Id. at 490. We concluded that Florida's anti-kickback statute was preempted by the federal statute because it criminalize[d] conduct that federal law specifically intended to be lawful and shielded from prosecution. Id. at 492-93. We continued: There is clear congressional intent to exempt compensation paid by employers to bona fide employees for providing covered items or services from those remunerations that constitute prohibited kickbacks under the federal statute. The heightened mens rea of the federal statute also indicates a clear intent that negligent or inadvertent behavior does not subject an individual to prosecution under the federal statute. Both the heightened mens rea requirement and the safe harbor provision are key elements in fulfilling the purpose of the federal anti-kickback statute, which is to outlaw health care referrals that are unethical. Accordingly, we agree with the Third District that the Florida anti-kickback statute is preempted because it presents an obstacle to the accomplishments of the purposes of the federal law. Id. at 493. The defendants in the present case repeat the argument that the charges based on the prohibition against filing a false statement in a claim for payment based upon section 409.920(2)(a) should be dismissed because this statute unconstitutionally conflicts with the federal false statements statute that contains the language knowingly and willfully. The federal statute, 42 U.S.C. § 1320a-7b(a) (2000), imposes penalties on whoever: (1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under a Federal health care program (as defined in subsection (f) of this section), (2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining rights to such benefit or payment. The defendants maintain that our holding the anti-kickback provision unconstitutional because of the reduced mens rea necessarily should apply to the false statement provision in this case. The defendants' argument fails to take into account that we held in Harden that both the mens rea and the safe harbor provisions were key elements in fulfilling the purpose of the federal anti-kickback statute. 938 So.2d at 492. No similar safe harbor provisions are key elements in fulfilling the purpose of the false statement provisions. The intent of the false statement provisions is to protect Medicaid funds from depletion by paying false claims. There are no bona fide relationships built upon false statements in claims for payment. As we expressly stated in Harden, for preemption to apply defendants must be able to show that any impediment to the purpose and objectives of the federal statute's purposes caused by the state statute must be severe and not merely modest. Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 665, 123 S.Ct. 1855, 155 L.Ed.2d 889 (2003). This impediment must seriously compromise important federal interests. Arkansas Elec. Coop. Corp. v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375, 389, 103 S.Ct. 1905, 76 L.Ed.2d 1 (1983). We stated in Harden: Federal preemption of a state law is strong medicine, and is not casually to be dispensed. [ Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir.2001)] (quoting Grant's Dairy [v. Comm'r ], 232 F.3d [8,] 18 [1st Cir.2000]). This is especially true when the federal statute creates a program, such as Medicaid, that utilizes cooperative federalism. Where coordinated state and federal efforts exist within a complementary administrative framework, and in the pursuit of common purposes, the case for federal preemption becomes a less persuasive one. Id. (quoting Wash. Dep't of Soc. & Health Servs. v. Bowen, 815 F.2d 549, 557 (9th Cir.1987)); see also Pharm. Research & Mfrs. of America v. Walsh, 538 U.S. 644, 665, 123 S.Ct. 1855, 155 L.Ed.2d 889 (2003) (The presumption against federal preemption of a state statute designed to foster public health has special force when it appears . . . that the two governments are pursuing common purposes.) Harden, 938 So.2d at 486. Prior to our decision in Harden, the Third District decided State v. Wolland, 902 So.2d 278 (Fla. 3d DCA 2005), which involved the issue of the constitutionality of the false statements prohibition of section 409.920(2)(a). In Wolland, the Third District distinguished its earlier decision in State v. Harden, 873 So.2d 352 (Fla. 3d DCA 2004), aff'd, 938 So.2d 480 (Fla.2006), and found that the false statements prohibition in section 409.920(2)(a) was constitutional. The Third District upheld the false statements provision, reasoning that the mens real concern in Harden was not the same in respect to false statements because one cannot negligently `knowingly make . . . [a] false statement . . . in [a] claim submitted to the agency . . . for payment.' Wolland, 902 So.2d at 284 (quoting § 409.920(2)(a)). The Fifth District, in its opinion in the present case, issued prior to the release of our decision in Harden, acknowledged the decisions of the Third District in Wolland and Harden. The Fifth District disagreed with the Wolland decision and held that under the definition of knowingly in the statute, the defendants could be convicted for conduct that may be improper but was inadvertent and found that this definition was not consistent with what Congress intended. Rubio, 917 So.2d at 392. While we do not agree with the reasoning of the Third District in Wolland that a prosecution of a violation of the false statements provision can proceed upon only proof of a negligent filing of a false statement in a claim for payment, we reject the Fifth District's conclusion that this means that the false statement provision is unconstitutional in the present case. As noted earlier, our concern about the reduced mens rea is not combined here with a concern about safe harbor provisions. While the strong medicine of preemption was necessary in Harden because the state statute criminalized activities expressly protected in the federal law, no similar safe harbor provision exists in the statute regarding false statements to induce payments from federal health care programs. The present case is only at the information stage of the proceedings. The charges are that the defendants filed claims for payment for dental services which were not performed and that, therefore, the claims for payment contained false statements. If the proof is that the defendants were aware that the statements in the claims for payment were false, we do not believe that the prohibition in section 409.920(2)(a) is unconstitutional as to such conduct by the defendants. The constitutionality of the false statement prohibition of section 409.920(2)(a) can and should be saved by severing the should be aware language from section 409.920(1)(d) as it pertains to section 409.920(2)(a). We have long recognized that if an unconstitutional provision of a statute can be severed so that the remaining provisions of the statute can be found to be constitutional, there should be a constitutionally saving severance. In State v. Calhoun County, 126 Fla. 376, 170 So. 883, 886 (1936) (citations omitted), we said: It is a well-established principle of statutory construction that the language of a statute should be so construed as to preserve its constitutionality rather than to defeat it, and that if two apparently contradictory provisions exist in a statute, one being consistent with the limitations of the Constitution and another in violation of them, the latter should not control to strike down the statute; in other words, if a clause in the statute which is violative of the Constitution may be eliminated and the remaining portion of the act stand as a valid expression of the legislative will the clause violative of constitutional limitations will be eliminated and the act permitted to stand although there is no separability clause in the act. . . . . The authority of the court to eliminate from an act of the Legislature an invalid clause does not flow from legislative authority authorizing the court to do so, but from the inherent power of the court to preserve the constitutionality of the act if it is possible to do so even by the elimination of invalid clauses, where it appears that the elimination of such clauses would not destroy the main and essential features of the act and the portion left is a completed and workable statute and where it cannot be said that the Legislature would not have enacted the remaining portions of the act without the invalid clause which is stricken. See also Schmitt v. State, 590 So.2d 404, 415 (Fla.1991) (portion of statute may be severed provided it meets four-part test that (1) unconstitutional provisions can be separated from valid provisions; (2) legislative purpose can be accomplished independently of provisions that are void, (3) good and bad features are not so inseparable that it can be said that the Legislature would have passed the one without the other; and (4) an act complete in itself remains after the invalid provisions are stricken). We apply this principle in this case in order to fulfill our obligation to preserve the constitutionality of the statute. In the present case, the trial court granted a motion to dismiss the charges based upon the allegations that the defendants knowingly filed false statements for payment. We reverse the affirmance of the trial court's dismissal, with directions that the charges be reinstated. In order to prove the charges, the State is required to prove as an element of the offense that the defendant was aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the intended result. By this decision we also adhere to the principle of preemption that state law is displaced only `to the extent that it actually conflicts with federal law.' Dalton v. Little Rock Family Planning Servs., 516 U.S. 474, 476, 116 S.Ct. 1063, 134 L.Ed.2d 115 (1996) (quoting Pacific Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190, 204, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983)). We disapprove the decision of the Third District in Wolland to the extent that it is in conflict with this decision.