Opinion ID: 672928
Heading Depth: 2
Heading Rank: 1

Heading: the materiality issue

Text: 7 Counts 2 through 6 alleged that on specified dates between January and August 1986, the Whites submitted Medicare claims that falsely indicated that the billed diagnostic tests were ordered by a medical doctor, who was shown in block 19 to be the referring physician. These claims were false because the tests had actually been ordered by Roy White. With respect to counts 2 through 6, the court instructed the jury that it need not consider whether the false claim was material. However, immediately thereafter, the court instructed the jury that: 8 [Y]ou must determine as a factual matter whether at the time alleged in the count line 19 of the [claim form] was required to be filled out. If you find that it was not required to be filled out, I instruct you that it was not material. If it was required to be filled out, then it was material. 9 The court then instructed the jury that it should apply the same instructions to counts 7 to 10, which charged Roy White with making a false representation in block 25 of four specific claims filed in 1988 and 1989. During its deliberations, the jury inquired of the court: If we consider line 19 to be not required to be filled out, does this eliminate counts 2 through 6? The district court, concluding that the jury should never have been charged on materiality, referred the jurors to the sections of the indictment and charge dealing with counts 2 through 6, omitting, however, all reference to materiality. The jury subsequently found the defendants guilty on all counts. 10 The Whites argue that the law is clear that ... materiality is an essential element of a false statements offense. Unfortunately for the Whites, they are charged with filing false claims in violation of section 287 and not with making false statements in violation of 18 U.S.C.A. Sec. 1001 (1976). Materiality is an element under section 1001, United States v. Beer, 518 F.2d 168, 170-71 (5th Cir.1975); however, we have never held that materiality is an element under section 287. We have previously touched upon this issue only once. In United States v. Haynie, 568 F.2d 1091, 1092 (5th Cir.1978) (per curiam ), we observed that the issue of whether materiality is an element of a section 287 charge has not been squarely presented to and decided by this court. Without holding that materiality is an element of a section 287 offense, we concluded that if materiality is a required element, the issue is one for the trial judge to handle as a question of law. Id. Because the district court had correctly found that the misrepresentations in that case were material, we affirmed Haynie's conviction under section 287 without determining whether materiality is an element under that section. Id. The four circuits that have addressed the issue of whether materiality is an element of a section 287 offense are evenly split. Compare United States v. Pruitt, 702 F.2d 152, 155 (8th Cir.1983) (holding that materiality is an essential element of a section 287 charge) and United States v. Snider, 502 F.2d 645, 652 n. 12 (4th Cir.1974) (same) with United States v. Parsons, 967 F.2d 452, 455 (10th Cir.1992) ([M]ateriality is not an element required by 18 U.S.C. Sec. 287.) and United States v. Elkin, 731 F.2d 1005, 1009 (2d Cir.) (Since the language of Sec. 287 in no way suggests that materiality is an element of the offense, we conclude that proof of materiality was not required.), cert. denied, 469 U.S. 822, 105 S.Ct. 97, 83 L.Ed.2d 43 (1984). 11 We need not align ourselves on either side of this intercircuit split, because the present case is controlled by our own Haynie decision. Here, as in Haynie, because the misrepresentations were material, it does not matter whether materiality is an element of a section 287 charge. The district court realized that it should not have submitted the question of materiality to the jury. 3 Although it withdrew the issue from the jury, the district court never made a clear finding of materiality. However, because materiality is a question of law, the district court's ruling, had it made one, would have been subject to de novo review in this Court. We see no reason not to address this legal issue, which the parties have fully briefed and argued, in the first instance, instead of remanding the case to the district court. 12 In our section 1001 false statements case law, we have held that a statement is material if it  'has a natural tendency to influence, or was capable of influencing, the decision of the tribunal in making a determination required to be made.'  United States v. Beer, 518 F.2d 168, 171 (5th Cir.1975) (quoting United States v. Krause, 507 F.2d 113, 118 (5th Cir.1975)). Given the shared history and purpose of sections 287 and 1001, if materiality is indeed an element under section 287, it should be measured by the same yardstick as under section 1001. Cf. United States v. Bramblett, 348 U.S. 503, 509, 75 S.Ct. 504, 508, 99 L.Ed. 594 (1955) (detailing the common origin and legislative evolution of the two sections); United States v. Johnson, 284 F.Supp. 273, 278 (W.D.Mo.1968) (The very purpose of sections 287 and 1001 is to protect the government against those who would cheat or mislead it in the administration of its programs.), aff'd, 410 F.2d 38 (8th Cir.), cert. denied, 396 U.S. 822, 90 S.Ct. 63, 24 L.Ed.2d 72 (1969). Thus, the central question in this case is not, as the district court apparently believed, whether completion of blocks 19 and 25 was mandatory, but instead, whether the false answers inserted in those spaces ha[d] a natural tendency to influence, or [were] capable of influencing the decision to honor or reject the claims. Beer, 518 F.2d at 171. We conclude that they did. 13 To determine whether the false entries in blocks 19 and 25 of the Medicare claim forms listed in the indictment constituted material falsehoods, we must first address the Whites' claim that until December 15, 1986, the Medicare program authorized payment for diagnostic tests ordered by a chiropractor. We conclude that the Whites' interpretation of the governing statute and regulations is in error. From the start of the Whites' activities in July 1985 until December 15, 1986, 42 C.F.R. Sec. 405.232b(c) (1977) provided: Payment may be made only for the chiropractor's manual manipulation of the spine to correct a subluxation (demonstrated by X-ray to exist) which has resulted in a neuromusculoskeletal condition for which such manipulation is appropriate treatment. No reimbursement may be made for X-rays or other diagnostic or therapeutic services. (Emphasis added). Effective December 15, 1986, the regulations were revised. Section 405.232b(c) was replaced by section 410.22(b), which provides: 14 (1) Medicare Part B pays only for a chiropractor's manual manipulation of the spine to correct a subluxation, if X-ray demonstrates that a subluxation exists and if the subluxation has resulted in a neuromusculoskeletal condition for which manipulation is appropriate treatment. 15 (2) Medicare Part B does not pay for X-rays or other diagnostic or therapeutic services furnished or ordered by a chiropractor. 16 (Emphasis added). The Whites maintain that under former section 405.232b(c) it was unclear whether Medicare would pay for diagnostic tests ordered by--as opposed to furnished by--a chiropractor; after all, they argue, the federal agency thought it necessary to clarify the regulation in 1986. We disagree. 17 The Social Security Act unambiguously provides that a chiropractor's services are not routinely covered. Mayers v. U.S. Dep't of Health & Human Serv., 806 F.2d 995, 1000 (11th Cir.1986), cert. denied, 484 U.S. 822, 108 S.Ct. 82, 98 L.Ed.2d 44 (1987). For Medicare purposes, chiropractors are physicians only with respect to treatment by means of manual manipulation of the spine. 42 U.S.C.A. Sec. 1395x(r)(5) (1992 & Supp.1994). This limited inclusion was added by Congress in 1972. Social Security Amendments of 1972, Pub.L. No. 92-603, Sec. 273, 1972 U.S.C.C.A.N. (86 Stat.) 1548, 1698. In Mayers we held that [i]n light of the explicit detail in which Congress narrowly defined reimbursable chiropractic services, no individual could reasonably conclude that other services performed by a Doctor of Chiropractic medicine would be reimbursable. Mayers, 806 F.2d at 1000. 4 18 Under the Whites' proposed reading of section 405.232b(c), Medicare would not cover tests performed by a chiropractor, but would pay for the same tests, performed by someone else at the chiropractor's direction or under his supervision. Such an interpretation makes no sense. Our conclusion, that at no time relevant to this case did the Medicare program authorize payment for diagnostic tests furnished or ordered by a chiropractor, is strengthened by a 1968 Department of Health, Education, and Welfare (HEW) study which concluded: 19 Chiropractic theory and practice are not based upon the body of basic knowledge related to health, disease, and health care that has been widely accepted by the scientific community. Moreover, irrespective of its theory, the scope and quality of chiropractic education do not prepare the practitioner to make an adequate diagnosis and provide appropriate treatment. Therefore, it is recommended that chiropractic service not be covered in the Medicare program. 20 Rastetter v. Weinberger, 379 F.Supp. 170, 174 (D.Ariz.1974) (quoting HEW, Independent Practitioners Under Medicare: A Report to the Congress 197 (1968)), aff'd, 419 U.S. 1098, 95 S.Ct. 767, 42 L.Ed.2d 795 (1975). As the HEW study indicates, the problem confronting the regulation's drafters was not that chiropractors lacked the technical ability to perform diagnostic tests, but instead, that they were ill-prepared to make adequate diagnoses and to determine a medically appropriate course of treatment. If Medicare were to pay for chiropractor-ordered diagnostic tests, the program would, in effect, be putting its seal of approval on the chiropractor's diagnostic medical abilities. We think that this is exactly what section 405.232b(c) was designed not to do. The most reasonable reading of the statute and regulations, even before December 15, 1986, was that the Medicare program did not authorize payment for diagnostic tests performed or ordered by a chiropractor. We hold that at all times relevant to this case, Medicare Part B did not allow payment for diagnostic tests furnished or ordered by Roy White, because he was a chiropractor. 21 At trial, Roy White testified that Blue Cross had previously honored claims submitted under his name. If true, this testimony was relevant to the Whites' claim that they had a good faith belief that they were entitled to Medicare reimbursement. However, it is scarcely probative of the actual state of the law. Government programs are administered by people and people occasionally make mistakes. Those mistakes do not change the law. 22 Because the Medicare program was not authorized to pay for diagnostic tests ordered or furnished by a chiropractor, the Whites' claims should not have been honored had the claims adjustors realized that Roy White was a chiropractor and that he had furnished or ordered the tests being billed. Thus, the false representations that the tests were ordered by (block 19) and performed by (block 25) a medical doctor were clearly capable of influencing Blue Cross' decision, on behalf of Medicare Part B, about whether to honor the claims. Had block 19 been completed truthfully, it would have indicated that the billed tests were performed upon the order of a chiropractor, and the law would have required Blue Cross to deny the claims. The insertion of false information, namely the representation that a medical doctor had ordered the tests, made it significantly more likely that the claims would be paid. 23 There was conflicting evidence at trial as to whether completion of block 19 was mandatory. However, whether Medicare would have honored the claims had block 19 been left blank is beside the point, because block 19 was not left blank in any of the claims covered by counts 2 through 6. Instead, it was filled in with false information which had a natural tendency to influence Blue Cross to pay a claim which, under the law, it should not have paid. That is all the materiality, if any, required under section 287. 24 Counts 7 through 10 involved false representations in block 25 of the claim form. Robert Foster is a policy specialist with the Health Care Finance Administration (HCFA), the federal agency that administers the Medicare and Medicaid programs. He testified that the person signing block 25 of the Medicare Claim Form 1500 subscribes to the attestation printed on the reverse of the form that the service that he is billing for was medically necessary and indicated. William Carter, Blue Cross' supervisor of Medicare Part B program integrity, testified that block 25 was relevant to Blue Cross' determination to pay a claim: The claim form must be signed by the physician or supplier in order for us to pay for a service. Loraine Molinari, a defense expert, testified, however, that although completion of block 25 was required, the block did not necessarily have to be completed by a medical doctor. Instead, the owner of [an independent] lab or somebody who was an agent of the laboratory would sign that particular block. Nonetheless, even Molinari conceded that the person signing block 25 is saying that [the claim form is] certainly true, and certifies that the services being billed were medically indicated and necessary. The fact that any agent of the laboratory could have signed block 25 is not determinative. By falsely inserting the name of a medical doctor in block 25, Roy White once again made it appear that a medical doctor (and not a chiropractor) had decided that the tests were medically necessary and performed the diagnostic tests or supervised their performance. As with the false entries in block 19, the misrepresentations in block 25 would have the natural tendency to persuade Medicare that a medical doctor and not a chiropractor had made the diagnosis resulting in the tests covered by the claim form. Thus, the forged signatures in block 25 were material as a matter of law.