Opinion ID: 4534155
Heading Depth: 3
Heading Rank: 3

Heading: medicaid fraud

Text: Defendant next claims that the evidence was insufficient “to show that the defendant was in possession of facts under which she was aware or should have been aware that her conduct was substantially certain to cause the payment of a Medicaid benefit.”23 The Medicaid False Claim Act24 provides that “[a] person shall not make or 20 Although defendant introduced herself to Bates as Hussain’s “assistant,” defendant takes care to note, in her supplemental brief, that she did not say that she was a “physician assistant,” which is among the types of professionals that, if licensed, may qualify as a “prescriber” under MCL 333.17708(2). 21 See MCL 333.16215(1); MCL 333.17708(2). 22 See MCL 333.16215(1). Defendant also raised the issue of ineffective assistance of trial counsel for failure to call the delegation exception to the trial court’s attention. Of course, because defendant could not prevail under the delegation exception, trial counsel cannot have been ineffective for failing to call it to the trial court’s attention. People v Ericksen, 288 Mich App 192, 201; 793 NW2d 120 (2010) (“Failing to advance a meritless argument or raise a futile objection does not constitute ineffective assistance of counsel.”). 23 Wang, 503 Mich at 987. 24 MCL 400.601 et seq. 10 present or cause to be made or presented to an employee or officer of this state a claim under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, upon or against the state, knowing the claim to be false.”25 To sustain a conviction for Medicaid fraud, the prosecution must therefore prove: (1) the existence of a claim, (2) that the accused makes, presents, or causes to be made or presented to the state or its agent, (3) the claim is made under the Social Welfare Act . . . , (4) the claim is false . . . , and (5) the accused knows the claim is false . . . .[26] MCL 400.602(f) provides: 25 MCL 400.607(1) (emphasis added). 26 People v Orzame, 224 Mich App 551, 558; 570 NW2d 118 (1997), citing In re Wayne Co Prosecutor, 121 Mich App 798, 801-802; 329 NW2d 510 (1982). Notably, the fourth and fifth elements of Medicaid fraud as outlined by Orzame initially required that a claim be “false, fictitious, or fraudulent, and . . . [that] the accused knows the claim is false, fictitious, or fraudulent.” Orzame, 224 Mich App at 558 (emphasis added). The emphasized language stems from the original version of MCL 400.607 as enacted in 1977. See 1977 PA 72, effective July 27, 1977; People v American Med Ctrs of Mich, Ltd, 118 Mich App 135, 144; 324 NW2d 782 (1982). That language was removed, however, when MCL 400.607 was amended in 1984. See 1984 PA 333, effective December 26, 1984; Orzame, 224 Mich App at 558. Even now, after a second amendment to the statute, see 2008 PA 421, effective January 6, 2009, all that the statute requires is that a claim be “false” and that the defendant have knowledge of that falsity, without a distinction for claims that are “fictitious” or “fraudulent,” as opposed to “false.” Nevertheless, Michigan courts continue to refer to the “fictitious, or fraudulent” language, which has not been a part of MCL 400.607(1) for over 30 years. See, e.g., People v Kanaan, 278 Mich App 594, 619; 751 NW2d 57 (2008), quoting Orzame, 224 Mich App at 558; Wang, unpub op at 7. We take this opportunity to clarify that MCL 400.607(1) now requires, as the fourth and fifth elements of a viable Medicaid fraud conviction, sufficient evidence that the claim at issue was false as defined under the Medicaid False Claim Act, MCL 400.602(d), and that the defendant possessed the requisite knowledge of that falsity. The Legislature has indicated that there is no longer a distinction for claims that are “fictitious” or “fraudulent.” 11 “Knowing” and “knowingly” means that a person is in possession of facts under which he or she 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 payment of a medicaid benefit. Knowing or knowingly includes acting in deliberate ignorance of the truth or falsity of facts or acting in reckless disregard of the truth or falsity of facts. Proof of specific intent to defraud is not required. With regard to the knowledge element of MCL 400.607(1) and MCL 400.602(f), the Court of Appeals has explained: “Intent and knowledge can be inferred from one’s actions and, when knowledge is an element of an offense, it includes both actual and constructive knowledge.” People v American Medical Centers of Michigan, Limited, 118 Mich App 135, 154; 324 NW2d 782 (1982). Therefore, it is not problematic that these statutes define “knowing” to include “should be aware.” Contrary to defendants’ contention, this actual or constructive knowledge element does not relate solely to knowledge that a claim is filed. The knowledge element relates to both “the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a [Medicaid or] health care benefit.” . . . Accordingly, the actual or constructive knowledge element of these offenses appropriately requires knowledge of both the falseness of a claim and that the claim is substantially certain to cause payment of a benefit.[27] Defense witness Darius Baty was an employee of the clinic who was involved in Medicaid billing. He testified that a patient’s insurance status was known to the front desk staff, the clinical manager, and the billing staff and that a copy of a patient’s Medicaid card would be included in the paper chart and could be seen if one “flipped through the paper chart.” He further testified that “a good 50 percent” of the clinic’s 27 People v Perez-DeLeon, 224 Mich App 43, 48-49; 568 NW2d 324 (1997). 12 patients were Medicaid patients. Importantly, Baty added that defendant had no involvement in the billing process.28 Defendant testified that she was aware that some of the patients at the clinic were Medicaid patients, but she “never paid attention for their insurance . . . .” Defendant explained, “I have this piece of paper,[29] there’s no Medicaid card on it.” Defendant said that she thought that insurance information was included in the clinic’s electronic medical record system but that she never looked at the medical insurance and did not know how it would be billed. Macon testified that he did not know whether defendant had any knowledge of Medicaid procedures or Medicaid billing and, significantly, the prosecution presented no evidence that defendant was trained in or otherwise possessed knowledge of the clinic’s billing practices. To the contrary, defendant testified that she was never trained in billing procedures. Further, Macon could not recall seeing at any time during the investigation any documents pertaining to Medicaid procedures or billing that were signed by defendant. Bates likewise did not identify anyone who claimed that defendant was involved in the Medicaid process at all. Hussain stated that billing was not discussed with individuals who came to the clinic through AmeriClerkships. Indeed, during the 22 years in which Hussain owned the clinic, he never trained foreign doctors like defendant in billing. Hussain explained that 28 Unsurprisingly, Baty conceded that everyone, including defendant, who had contact with a patient “knew that a bill was going to be generated and sent to somebody so that the clinic could be paid for that patient visit . . . .” 29 Defendant appears to refer to a piece of paper on which she took notes during interactions with patients. The other side of this paper contained billing codes, but defendant testified that she was unfamiliar with this side of the form. 13 he was not required to train individuals like defendant in billing, and so it was “never” done. Even when defendant became a paid employee—as opposed to a clerk or volunteer—she was not expected to be involved in Medicaid billing at all, and nothing presented at trial suggests that defendant was knowledgeable or in any way involved in the billing practices of her employer. The evidence presented in this case simply does not demonstrate actual or constructive knowledge that defendant’s “conduct [was] substantially certain to cause the payment of a medicaid benefit.”30 As to actual knowledge, the prosecution relies on evidence that clinic patients’ charts contained their Medicaid status and copies of their cards. Nevertheless, there is no evidence that defendant had possession of the paper chart, much less that she flipped through it to find the Medicaid information. Significantly, the trial court found defendant to be credible and that she possessed a “truthful nature.” Defendant’s recitation of the evidence is consistent with the other evidence offered at trial—the video in particular—which appears to show that defendant had single sheets of paper on the clipboard with her in the examination room, not a multipage chart. Moreover, defendant testified that she was not aware of any particular patient’s insurance status. When reviewing the sufficiency of the evidence, appellate courts must not interfere with the fact-finder’s role of deciding credibility.31 Notwithstanding the trial court’s finding that defendant was truthful and credible, the court nonetheless imputed knowledge to defendant with regard to Medicaid billing. 30 See MCL 400.602(f). 31 People v Wolfe, 440 Mich 508, 514; 489 NW2d 748 (1992). 14 The trial court on two occasions declared that “ignorance of the law” is not an excuse. But the critical question is not whether defendant knew the law. Instead, it is whether reasonable inferences can be drawn from the circumstantial evidence to conclude that defendant knew or should have known that a false claim would be submitted to the state under the Social Welfare Act. On this point the trial court found: There is evidence that at least half of the money—and it doesn’t matter if it’s half or any other portion, but I believe the testimony is or was that Livernois Family Medical Services received about half of their income from Medicaid. This is insufficient evidence to sustain defendant’s convictions. Even assuming that this statistic is accurate and that defendant was aware of it, a high percentage of Medicaid patients at the clinic does not establish that defendant had knowledge under which she was aware or should have been aware that her conduct in treating Macon and Bates was substantially certain to cause the payment of a Medicaid benefit.32 The trial court also placed great emphasis on the fact that defendant knew that the clinic would be billing an insurance company for medical care: [T]he form that defendant used, this encounter form, Exhibit B, is not the full form, the other side is the billing form, so defendant clearly knew that there was billing going on to insurance. That there are multiple forms of insurance. This was not her only job. She had multiple experiences. She testified to that. And she clearly knew that her paycheck was derived from insurance, that insurance was going to be billed, that that’s what her paycheck was coming from, at least in part—at least in part from Medicaid. 32 See MCL 400.602(f). 15 It is unremarkable that any person employed in the healthcare industry would know that a variety of insurance companies will be billed for services rendered. It is equally unremarkable that such person may infer that his or her employment is funded in part by the revenue generated by insurance billing. But such inferred knowledge does not sustain a claim for Medicaid fraud. Again, the critical inquiry is whether defendant had knowledge from which she was aware or should have been aware that her conduct in treating Macon and Bates was substantially certain to cause the payment of a Medicaid benefit. General knowledge that some source of insurance will be billed is simply not enough. The trial court’s findings are speculative and not reasonably drawn inferences from the evidence that the trial court found determinative. Likewise, the Court of Appeals erred in its determination that defendant’s general knowledge of the American healthcare system—as a student, employee, and patient—or her general knowledge that the clinic was not a free clinic and that she was a paid employee provided evidence that defendant had satisfied the “knowing” element of a Medicaid fraud conviction. Defendant was charged with two counts of Medicaid fraud related to claims for two specific individuals. She cannot be held liable on the basis of the Medicaid status of other individuals treated at the clinic in its day-to-day operation.33 Even viewed in the light most favorable to the prosecution, the evidence presented does not appear to establish that defendant was aware or should have been aware that the 33 See People v Schilling, 110 Mich 412, 414; 68 NW 233 (1896) (a defendant cannot be convicted for crimes other than those charged in the complaint); MCL 768.32(1) (a defendant may be found guilty of an offense upon which an indictment was based or of an inferior offense to the one charged). 16 patients at issue were Medicaid beneficiaries and that their treatment was substantially certain to cause the payment of a Medicaid benefit. Finally, we also conclude that there was no evidence presented that defendant should have familiarized herself with the insurance status of clinic patients. Thus, the evidence did not support a finding that defendant acted “in deliberate ignorance of the truth or falsity of facts or acting in reckless disregard of the truth or falsity of facts.”34 Although the prosecution’s expert testified that defendant could be expected to be aware of the American healthcare model, the expert did not testify that defendant should have obtained the patients’ Medicaid status before, during, or after her encounter with them. Because defendant was never trained to examine or alter billing information, and because her employer did not expect her to become familiar with this process, it cannot be said that the ignorance of Medicaid billing procedures was “deliberate” or due to “reckless disregard of the truth or falsity of facts.”35 From the evidence presented, it appears that 34 MCL 400.602(f). 35