Opinion ID: 4554964
Heading Depth: 3
Heading Rank: 1

Heading: Health care benefit program

Text: An essential element of health care fraud is that the fraud was perpetrated on a health care benefit program. See § 1347(a)(2). Such a 5 Case: 19-10963 Document: 00515523996 Page: 6 Date Filed: 08/12/2020 No. 19-10963 program is “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.” 18 U.S.C. § 24(b). In their motions for acquittal, the Andersons argued that BCBS, as the third-party administrator of American’s Plan, did not meet the statutory definition of a health care benefit program. The district court held that there was sufficient evidence for a rational juror to conclude that BCBS was a health care benefit program because “BCBS was the agent of [American], such that any conduct on BCBS’s part was attributable to” American. We will discuss two out-of-circuit opinions that the district court relied on for its conclusion. A Pennsylvania district court opinion dealt with a defendant who was indicted for defrauding the principal, i.e., Medicare, not a third-party administrator. United States v. McGill, No. 12-112-01, 2016 WL 8716240, at –2 (E.D. Pa. May 13, 2016). The district court reasoned that the third-party administrator could be viewed as an agent of Medicare and any actions the administrator took could be attributable to Medicare. Id. at –7. Thus, there was sufficient evidence to show that, by submitting claims to the third-party administrator, the defendant had defrauded Medicare. Id. McGill is not particularly helpful because the facts there would be equivalent to this case only if the indictment here concerned defrauding American rather than BCBS. The other case relied on by the district court is an unpublished Fourth Circuit opinion. United States v. Makarita, 576 F. App’x 252 (4th Cir. 2014). The defendant was charged with health care fraud for submitting fraudulent claims for dental services to the third-party administrator of an employer’s self-funded insurance plan. Id. at 254. The administrator would pay the claim, and the employer would reimburse the administrator. Id. at 257–58. That 6 Case: 19-10963 Document: 00515523996 Page: 7 Date Filed: 08/12/2020 No. 19-10963 court held that the administrator was the agent for the health care plan provider, which meant any fraud on the administrator was fraud on the health care benefit program. Id. at 264. We find it unnecessary to embrace what appears to be a novel approach of applying agency principles in deciding what is a health care benefit program under Section 1347. Setting aside the caselaw on which the district court relied, we start with the statutory definition of “health care benefit program,” which is “any public or private plan or contract, affecting commerce, under which any medical benefit, item, or service is provided to any individual, and includes any individual or entity who is providing a medical benefit, item, or service for which payment may be made under the plan or contract.” § 24(b). The Andersons argue that BCBS cannot be a health care benefit program because the plan under which medical benefits were provided was not an American Plan, and BCBS did not provide any medical benefit or service. So restrictive a reading of the statute is inconsistent with our caselaw. For example, we once interpreted Section 24(b) as including automobile insurance companies. United States v. Collins, 774 F.3d 256, 260 (5th Cir. 2014). There, the defendants were convicted of counts of conspiracy to commit health care fraud. Id. at 259. On appeal a defendant argued that the automobile insurance companies he defrauded did not meet the definition of “health care benefit program.” We disagreed. “To the extent automobile insurers pay for medical treatment, they are health care benefit programs under the statute.” Id. at 260. The specifics of that application of the statute are not terribly important for us, but its direction to apply a broad meaning to “health care benefit program” is relevant guidance. The definition in Section 24(b) of a “health care benefit program” begins with categorizing the term broadly as a “public or private plan or contract, affecting commerce.” § 24(b). The “program,” thus, is the plan or contract 7 Case: 19-10963 Document: 00515523996 Page: 8 Date Filed: 08/12/2020 No. 19-10963 under which medical benefits to an individual are provided. The definition continues by saying the program includes an “entity who is providing a medical benefit, item, or service.” Id. American entered a contract to allow BCBS to administer American’s Plan. Under the terms of that contract, BCBS agreed to process claims, make available its network of providers, and pay claims in accordance with American’s benefits. American agreed to reimburse BCBS weekly for the claims BCBS paid and to pay BCBS a monthly administrative fee for its services. Under the plain text of the statute, an administrator’s payment to a health care provider who has furnished services or equipment to an individual is the provider of a “medical benefit, item, or service.” BCBS under this Plan was a health care benefit program as defined by Section 24(b). That is so even if American was also such a program.