Opinion ID: 4554964
Heading Depth: 4
Heading Rank: 1

Heading: Implied representation of medical necessity

Text: According to the district court, by submitting the insurance claims forms (“CMS1500 forms”), the Andersons implicitly represented the hearing aids they were dispensing were medically necessary. The Andersons argue that implicit health care fraud is not cognizable. They provided no caselaw, and we 1 Although both defendants were convicted of health care fraud and aiding and abetting, they waived challenges to their aiding and abetting convictions by failing to brief the issue in an adequate manner. See United States v. Martinez, 263 F.3d 436, 438 (5th Cir. 2001). 8 Case: 19-10963 Document: 00515523996 Page: 9 Date Filed: 08/12/2020 No. 19-10963 found none, to support their argument. There is law as to fraud committed for a different purpose, mainly against a bank, which may be proven with implicit misrepresentations. United States v. Briggs, 965 F.2d 10, 12 (5th Cir. 1992). We conclude that an implicit misrepresentation theory of health care fraud is valid. We next consider the evidence to determine whether “any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Kuhrt, 788 F.3d 403, 413 (5th Cir. 2015). “Our review is limited to whether the jury’s verdict was reasonable, not whether we believe it to be correct.” Id. (quotation marks omitted). Nonetheless, we acknowledge as we start our summary that there is not much evidence on the question of whether submission of CMS1500 forms implied that hearing aids were medically necessary. The language in American’s pre-2014 Plan was not clear as to whether a determination of medical necessity was required for hearing aids. The CMS1500 form did not ask a provider whether a service or item was medically necessary. Nonetheless, three BCBS employees and one American employee testified that BCBS would not pay a claim unless the service or item provided was medically necessary. One of the witnesses was the BCBS employee who managed the processing of claims for American in 2011, 2012, and 2013. She testified that any type of claim to be paid on an insurance policy must be medically necessary. The American Plan, as she understood it, required hearing exams and hearing aids to be medically necessary. The BCBS medical director in Texas for managed care testified that she was not aware of any item, service, prescription drug, or anything else for which BCBS provides a benefit that was not required to be medically necessary, including hearing aids. The director of special investigations for BCBS testified that BCBS does not pay for claims unless they are medically necessary. Similarly, the senior 9 Case: 19-10963 Document: 00515523996 Page: 10 Date Filed: 08/12/2020 No. 19-10963 manager of benefit strategy for American testified that if a medical service or supply is not medically necessary, then it is not covered by American’s Plan, including hearing aids. The parties presented competing testimony as to whether the Andersons, as licensed hearing aid fitters and dispensers, could make a determination of medical necessity at all. Although there was testimony that no objective test existed to determine medical necessity, there was also testimony that BCBS listed a standard group of tests on its website for providers to use in their “initial work-up of a patient with hearing impairment.” These standard tests remain a source of disagreement because, as pointed out during trial, fitters and dispensers are not authorized to conduct all the tests on this list. Further, the district court decided not to instruct the jury regarding medical necessity. In so deciding, the district court stated that the issue of whether medical necessity was required was “clear as mud.” Because we resolve conflicting evidence in favor of the jury’s verdict, see United States v. Moreno-Gonzalez, 662 F.3d 369, 372 (5th Cir. 2011), we conclude that the jurors were not irrational in finding that the submission of CMS1500 forms implied medical necessity. To hold the Andersons criminally liable for these implicit representations, though, the Government must provide evidence that they executed a fraudulent scheme to defraud BCBS with knowledge that the relevant hearing aids were not medically necessary. See § 1347. That is the next evidentiary issue.