Opinion ID: 4554964
Heading Depth: 3
Heading Rank: 2

Heading: sufficiency of the evidence

Text: The Andersons insist the evidence was insufficient to sustain their convictions of health care fraud because of the absence of any evidence that they made any explicit or implicit fraudulent representations, that they had the intent to defraud, or that their alleged false representations were material. 1 We look at each claimed shortfall.
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.
The Andersons argue they lacked the specific intent to defraud BCBS because they had no knowledge of the requirement that all claims submitted to BCBS must be medically necessary. The district court provided the jury with an instruction regarding the requisite criminal intent to defraud. The court explained that a defendant “acts with the ‘requisite intent to defraud’ if 10 Case: 19-10963 Document: 00515523996 Page: 11 Date Filed: 08/12/2020 No. 19-10963 the defendant acted knowingly and with the specific intent to deceive.” The district court further instructed the jury that an honestly held opinion or belief cannot constitute fraudulent intent even if that opinion or belief is mistaken. The court explained that “evidence of a mistake in judgment, an error in management, or carelessness cannot establish fraudulent intent. But an honest belief does not constitute good faith if the defendant intended to deceive others by making representations the defendant knew to be false or fraudulent.” The jury was presented with competing evidence regarding the Andersons’ knowledge of this medical necessity requirement. It does not matter whether the defendants personally filled out or submitted the forms for the claims. Culpable participation in healthcare fraud can exist regardless of whether someone else prepared or submitted the fraudulent documentation. United States v. Umawa Oke Imo, 739 F.3d 226, 235 (5th Cir. 2014). The evidence at trial was that the office managers for the Arlington and Bedford locations would fill out and submit the CMS1500 forms only after one of the Andersons instructed them to do so. Although Terry testified that no one at BCBS ever communicated with him on how to fill out CMS1500 forms or discussed with him the “sort of tests” he would conduct before dispensing hearing aids, the jury was presented with evidence from which it could infer fraudulent intent. For example, the jury could have credited the testimony of the Government’s expert witness who testified that it is generally known by those recommending hearing aids that medical necessity must be shown to submit an insurance claim. The jury also could have credited the testimony of two licensed fitters and dispensers who each testified that fitting an individual for hearing aids involves more than just a pure tone test, which was often the only test conducted by the Andersons on the American employees. In fact, both fitters and dispensers testified that 11 Case: 19-10963 Document: 00515523996 Page: 12 Date Filed: 08/12/2020 No. 19-10963 a pure tone test was commonly used to screen an individual’s hearing and not to fully test that person’s hearing. Undisputed at trial was the fact that it takes anywhere from 30 minutes to an hour to conduct a full hearing test. Conflicting evidence existed in this case regarding the amount of time the Andersons spent testing individuals for hearing aids. Terry testified that both he and Rocky spent at least 25 to 30 minutes, “if not slightly more,” testing the hearing of each individual during airport visits. Other evidence was that Rocky was not adequately testing individuals for hearing aids and at times spending “ten minutes or less” testing. Jurors could have placed weight on an exchange between Terry and the prosecutor regarding a specific day in 2012 where AOHAC submitted 102 claims to BCBS. It was during this colloquy that the prosecutor established that for AOHAC to submit 102 claims in one day, Terry and Rocky would had to have tested approximately 170 individuals. Based on Terry’s testimony that he and Rocky worked 14-hour days testing individuals at the airport, the prosecutor calculated that, on this particular day in 2012, the Andersons would have had to spend under 10 minutes testing each individual in order to test 170 American employees. Moreover, even assuming that a pure tone test alone is sufficient to test whether hearing aids were medically necessary, the jury heard evidence that undermined the reliability of the Andersons’ airport tests. Multiple witnesses testified that pure tone tests must be conducted in a sound-proof environment, and failure to do so could result in an invalid test. At minimum, the evidence was that if testing is conducted outside of a sound-proof environment, then an ambient-noise test should be conducted to measure background noise. During their airport visits, though, the Andersons neither tested in a sound-proof environment nor conducted an ambient noise test. 12 Case: 19-10963 Document: 00515523996 Page: 13 Date Filed: 08/12/2020 No. 19-10963 Last, the jury was presented with considerable evidence that the Andersons falsified client records. On multiple occasions, for example, certain test scores were recorded for clients even though the tests used to produce such scores were never conducted. There was evidence of multiple occasions in which BCBS was billed for hearing aids for individuals who were never tested at all. The billing documents were signed by either Terry or Rocky. Accordingly, the jury could have reasonably inferred that the Andersons acted with the requisite criminal intent based on the prosecution’s presentation of falsified client files. See United States v. Sanjar, 876 F.3d 725, 746 (5th Cir. 2017) (concluding that falsification of medical charts amounted to strong indicia of fraud). The Andersons compare their case to one in which we reversed convictions for health care fraud and aiding and abetting, holding there was insufficient proof of knowledge. Ganji, 880 F.3d at 777–78. We found insufficient evidence to support a defendant’s conviction for health care fraud because the evidence supported an inference that a patient was not actually homebound but did not support “a second inference that [the defendant] knew the patient was not homebound.” Id. In Ganji, the defendant doctor rarely personally visited the patients she certified for home care. Id. at 771. Both Andersons here at least purported to be the ones actually testing American employees for whom they recommended hearing aids. We accept the credibility choices and inferences made by the jury. The evidence was sufficient to find that the Andersons acted with the specific intent to defraud BCBS. See Umawa Oke Imo, 739 F.3d at 235.
Last, the Andersons argue there was insufficient evidence to support their convictions because any implicit misrepresentation of medical necessity was immaterial to BCBS’s decision to pay AOHAC’s claims. This argument 13 Case: 19-10963 Document: 00515523996 Page: 14 Date Filed: 08/12/2020 No. 19-10963 fails because the jury heard and must have accepted testimony that BCBS would not pay for a service or item that was not medically necessary. See id.