Court Opinion

ID: 4148339
Source: CourtListenerOpinion
Date Created: 2017-02-24 21:00:56.575118+00
Date Added: 2024-06-11T14:18:08.769971
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 16-1046

                    UNITED STATES OF AMERICA,

                            Appellee,

                               v.

                         JANICE TROISI,

                      Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Douglas P. Woodlock, U.S. District Judge]

                             Before

                      Howard, Chief Judge,
                Lynch and Lipez, Circuit Judges.

     James L. Sultan, with whom Kerry A. Haberlin and Rankin &
Sultan were on brief, for appellant.
     Kelly Begg Lawrence, Assistant United States Attorney, with
whom Carmen M. Ortiz, United States Attorney, was on brief, for
appellee.

                        February 24, 2017
           LYNCH, Circuit Judge. After a bench trial, Janice Troisi

was convicted in 2015 both of conspiracy to commit healthcare

fraud, see 18 U.S.C. § 1349, and of healthcare fraud, see id.

§ 1347, for her role from January 2010 forward in an extensive

scheme between 2006 and 2012 to defraud Medicare by billing the

program for services provided to patients falsely presented as

eligible to receive them.         Troisi does not dispute the role that

she played in the fraudulent scheme, which involved billing the

government for $27.6 million in false claims, $19.9 million of

which were paid.    She appeals, arguing that there was insufficient

evidence to prove beyond a reasonable doubt that she acted with

the required culpable state of mind.            We affirm her convictions.

                                        I.

           We summarize the basic contours of the healthcare fraud

scheme and proceedings below, reserving a fuller exposition of the

relevant facts for our analysis of the particular issues presented

by this appeal.     See United States v. López-Díaz, 794 F.3d 106,

109 (1st Cir. 2015) (citing United States v. Flores–Rivera, 787
F.3d 1, 9 (1st Cir. 2015)), cert. denied, 136 S. Ct. 1229 (2016).

           On September 18, 2013, Troisi and co-defendant Michael

Galatis1   were   indicted   by    a    grand   jury   in   the   District   of

     1    We have affirmed Galatis's conviction in United States
v. Galatis, No. 15-1322, ___ F.3d ___ (1st Cir. Feb. 24, 2017).
                                       - 2 -
Massachusetts on one count of conspiracy to commit healthcare

fraud, see 18 U.S.C. § 1349, and eleven counts of substantive

healthcare fraud,2 see id. § 1347.                    Galatis was also separately

charged with seven counts of money laundering.                      See id. § 1957.

The indictment alleged that Galatis, the owner of At Home VNA

("AHVNA"), a home health-services agency, and Troisi, AHVNA's

Director of Clinical Services since January 2010, had used AHVNA

as   a       vehicle    for     defrauding     Medicare   by    providing    Medicare-

reimbursable in-home nursing services to ineligible patients and

then         billing   Medicare     for   those      services   based   on   falsified

documents.

                 Medicare determines whether a beneficiary qualifies for

coverage of home health services -- and, in turn, whether and to

what extent to reimburse the beneficiary's healthcare provider for

the cost of such services -- based primarily on information

contained in two forms submitted by the healthcare provider.                       The

first        form,     called    the   OASIS   Form,    documents   the      healthcare

provider's assessment of the beneficiary's medical condition and

needs. In filling out this form, a healthcare provider must, inter

alia, rate on a numerical scale the beneficiary's ability to

         2One of the              substantive fraud counts was ultimately
dismissed as to both               defendants upon the government's motion
because the Medicare              beneficiary associated with the conduct
underlying that charge            was unable to testify at trial.
                                             - 3 -
perform certain activities -- such as eating, dressing, and bathing

-- without assistance.           The second form, called the Form 485 Home

Health Certification and Plan of Care ("Form 485"), requires a

physician to certify that (1) the beneficiary is confined to the

home ("homebound"), (2) the beneficiary is in need of skilled

services, (3) such "services will be or were furnished while the

[beneficiary is or] was under the care of a physician," and (4) a

"plan for furnishing the services has been established and will be

or was periodically reviewed by a physician."             42 C.F.R. § 424.22.

Additionally, for services started after April 1, 2011, a physician

must       certify   that    a    "face-to-face"     encounter   between   the

beneficiary and a physician, related to the beneficiary's need for

the services, occurred no more than 90 days prior to or 30 days

after the start of the services.3           Id.

              The prosecution charged that the AHVNA scheme proceeded

as     follows.      AHVNA       aggressively     recruited   Medicare-insured

individuals for in-home nursing services, for which they could not

legally receive Medicare coverage, either because they were not

homebound or because they were not in need of such services.

Troisi instructed AHVNA's nurses to fill out those patients' OASIS

       3   During the time period relevant here, each Form 485
"covered 60 days of services and could be renewed indefinitely
upon recertification of the patient’s continued need for such
services."
                                       - 4 -
Forms to represent, inaccurately, that the patients were incapable

of caring for themselves.    Troisi then personally prepared a Form

485 for each patient, populating it with whatever false information

was required to obtain Medicare coverage for in-home nursing

services.     And AHVNA’s Medical Director, Dr. Spencer Wilking,

signed the forms without reviewing their contents or even, in many

cases, meeting with the patients.4

             AHVNA nurses made home visits to patients, but most of

those visits did not actually involve the nurses providing skilled

services.     Yet at Troisi's direction, the nurses falsified their

notes to indicate that they had provided such services.       Using

fraudulent records, AHVNA billed Medicare for tens of millions of

dollars' worth of skilled nursing services, which had not been

provided or had been provided unnecessarily, between 2006 and 2012,

inclusive.

             Only the portion of the scheme beginning on January 1,

2010 -- when Troisi became AHVNA's Clinical Director -- is relevant

to this appeal.     The government's theory was that Galatis agreed

to promote Troisi from part-time employee to Clinical Director at

that time because she could -- and did -- take the scheme "to

another level."    Accordingly, she had a direct stake in the fraud

     4    Dr. Wilking pled guilty to one count of healthcare fraud
for his role in the scheme and served as a witness for the
government at trial.
                                - 5 -
even though she did not personally receive the reimbursement checks

from Medicare.

            Troisi and Galatis proceeded jointly to a jury trial on

October 27, 2014.5     The district court declared a mistrial as to

Troisi on November 30, 2014, after she became too ill to proceed.

Troisi waived her right to a jury on retrial.            A bench trial before

the same district judge who had presided over the earlier trial

started on July 28, 2015.

            The   parties   stipulated      that    "transcripts     of     the

testimony of 27 government witnesses who testified at the earlier,

joint trial, along with the exhibits admitted during the joint

trial," would be admissible evidence at Troisi's bench trial.6              The

government supplemented this evidence with live testimony from

four additional witnesses.        In total, the government introduced

217   documentary    exhibits,    including       the    transcripts.       Its

witnesses   included   patients    linked    to    the    substantive     fraud

counts, nurses who had provided care to those patients, most of

those patients' primary care providers, and Dr. Wilking.

      5   On December 3, 2014, the jury convicted Galatis of all
of the charges against him, and he was ultimately sentenced to 92
months of imprisonment, to be followed by three years of supervised
release, and ordered to pay $7,000,000 in restitution and a $50,000
fine.
      6  This evidence had been received before the court ordered
a mistrial and thus had been subject to cross-examination by
Troisi.
                                  - 6 -
          At the conclusion of the government's case, Troisi moved

for a judgment of acquittal, which was denied.      In her defense,

Troisi called no witnesses and introduced five exhibits.        The

thrust of her defense was that the government had not proved that

she possessed the requisite mens rea to commit the relevant crimes.

          On August 5, 2015, the day after the trial ended, the

district court delivered its verdict from the bench, finding Troisi

guilty on all of the conspiracy and fraud counts.         The court

concluded that Troisi had participated in a "sophisticated scheme

among the senior managers [of AHVNA] . . . to provide inaccurate

information" to the government so as to secure payments, "which

the [g]overnment was not obligated to make."7   While "[h]er knowing

and willful participation in this scheme with the intent to defraud

[was] largely demonstrated circumstantially," the court found

sufficient evidence that Troisi had "manipulat[ed]. . . the staff

and . . . the paperwork" with the purpose of "extracting monies

that [AHVNA was] not entitled to . . . through fraud, that is,

[the] misrepresentation of material facts."     The court sentenced

     7    The court noted that the AHVNA scheme was "somewhat
unusual" because in most Medicare-fraud schemes, "no services are
actually provided." The court correctly held, however, that the
"services apparently provided" by AHVNA "simply were not services
that the United States [was] supposed to pay for, and the parties
to the fraud understood that." See, e.g., United States v. Vega,
813 F.3d 386, 398-99 (1st Cir. 2016) (describing a Medicare-fraud
scheme that involved seeking reimbursement for services provided
to ineligible beneficiaries).
                              - 7 -
Troisi to 36 months of imprisonment to be followed by three years

of supervised release.   This appeal followed.

                                    II.

           "In assessing a challenge to the sufficiency of the

evidence, we 'examine the evidence, together with all inferences

that may be reasonably drawn from it, in the light most favorable

to the'" verdict.     López-Díaz, 794 F.3d at 111 (quoting United

States v. Andújar, 49 F.3d 16, 20 (1st Cir. 1995)).           Where the

factfinder drew "inferences from circumstantial evidence," we will

not "second-guess[] [its] ensuing conclusions as long as (1) the

inferences derive support from a plausible rendition of the record,

and (2) the conclusions flow rationally from those inferences."

United States v. Spinney, 65 F.3d 231, 234 (1st Cir. 1995).

Ultimately, we ask "whether 'any rational trier of fact could have

found the essential elements of the crime beyond a reasonable

doubt.'"   United States v. O'Donnell, 840 F.3d 15, 18 (1st Cir.

2016) (quoting United States v. Grace, 367 F.3d 29, 33 (1st Cir.

2004)).

           A defendant violates 18 U.S.C. § 1347 if she "knowingly

and   willfully   execute[s]   a   scheme   [intended]   to   defraud   a

government health-care program," United States v. Iwuala, 789 F.3d
1, 12 (1st Cir. 2015), cert. denied, 136 S. Ct. 913 (2016), and

she violates 18 U.S.C. § 1349 if she engages in a conspiracy to

execute such a scheme, id. at 9.      "[T]he government may carry its
                                   - 8 -
burden of proof [as to both offenses] wholly through circumstantial

evidence."    Id. at 11.

             Troisi   does   not   dispute    that   officials   at   AHVNA

successfully executed a conspiratorial scheme intended to defraud

Medicare. Nor does she dispute that she took actions that directly

and crucially furthered that scheme.         She attacks her convictions

solely on the ground that the government allegedly failed to

present sufficient evidence that she took those actions with the

required culpable state of mind.8      Cf. id. at 9.

             We disagree.    Troisi's culpable state of mind can be

readily gleaned from "several strands of circumstantial evidence"

presented at trial.    Vega, 813 F.3d at 398.

             First, Troisi cannot claim that she was ignorant.         She

was deeply familiar with the regulatory scheme that she helped

contravene. She knew what was permitted and what was not. Compare

López-Díaz, 794 F.3d at 112 (finding no evidence in the record to

     8    The parties do not dispute the applicable mens rea
requirement. Troisi's brief frames that requirement as comprising
two distinct elements: the defendant must have acted "willfully
with knowledge that her conduct was unlawful" and with the
"specific intent to defraud."      Our case law recognizes that
"willfulness" is normally understood to encompass "specific
intent," and both terms require a finding that the defendant acted
with a purpose to disobey or disregard the law, rather than by
ignorance, accident, or mistake.     See, e.g., United States v.
LaPlante, 714 F.3d 641, 644 (1st Cir. 2013); United States v.
Allen, 670 F.3d 12, 17 (1st Cir. 2012); United States v. Gonzalez,
570 F.3d 16, 24 (1st Cir. 2009); United States v. Lizardo, 445
F.3d 73, 86 (1st Cir. 2006); see also Bryan v. United States, 524
U.S. 184, 191–92 (1998).
                               - 9 -
support claim that a defendant dentist knew about the "different"

physician billing code system), with United States v. Singh, 390
F.3d 168, 187-89 (2d Cir. 2004) (allowing inference of fraudulent

intent based on a defendant doctor's possession of the applicable

billing code guidebook and his instructions to nurses as to how to

fill out the forms).       Troisi demonstrated her familiarity with the

relevant regulations in multiple conversations in 2010 and 2011

with Martha Fisk of Holyoke Health Center, who called AHVNA to

express concern about the fact that all of the orders prescribing

home health services to Holyoke patients had been signed by Dr.

Wilking,    who   had   not    seen    the   patients,      rather     than    by    the

patients'     primary     care     physicians.         More     than       that,     the

conversations showed Troisi defending the questionable practices.

Troisi insisted that AHVNA's paperwork was fine because the new

"face-to-face" requirement in 42 C.F.R. § 424.22 had not yet taken

effect.      In   addition,       on   her   resume,     Troisi      professed       her

"[e]xpertise" in "PPS," the process by which medical providers

submit payment requests to Medicare based on patients' OASIS Forms.

            Troisi      also   exercised      total    control       over      AHVNA's

preparation       of    the      documentation      required         for      Medicare

reimbursement -- the aspect of the scheme that directly contravened

the regulations she knew so well.               See Vega, 813 F.3d at 398-99

(finding    the   defendant's      "large    degree    of     control      over     [her

company's] operations" evidence that she knew the claims the
                                       - 10 -
company was submitting to Medicare were fraudulent); United States

v.   Willett,   751 F.3d 335,   340    (5th   Cir.    2014)      (finding    the

defendant’s     "proximity     to"    and    prominent     role   in     "fraudulent

activities" evidence of a culpable state of mind).                       As AHVNA's

Clinical Director, Troisi was in charge of "developing [and]

implementing . . . the day-to-day functions of clinical services,

in accordance with current rules, regulations, and guidelines that

govern Home Health Agencies."           In fact, she oversaw AHVNA's team

of nurses, who were hired fresh out of nursing school with no

experience in home health services or Medicare regulations.                      Those

inexperienced nurses were tasked with filling out patients' OASIS

Forms, which Troisi reviewed and edited at weekly meetings along

with   the   notes    reflecting      the    services     that    the    nurses    had

provided.     Troisi also personally filled out the Form 485s before

giving them to Dr. Wilking so that he could sign them.                       All of

this   documentation       contained        misrepresentations          material    to

Medicare's payment decisions.

             Further,     in     exercising         her    control        over     the

documentation process, Troisi instructed the nurses to put in

particular information regardless of whether it was true or not.

She insisted that the nurses filling out OASIS Forms never assign

a score of "zero" to a patient's ability to perform any activity

(as such a score would indicate full independence); never state

that a patient had not been home at the time of a scheduled visit
                                      - 11 -
(as doing so would indicate that the patient was not homebound);

and never check a box indicating that a patient had been "alert

and oriented."     When nurses protested that a patient's condition

warranted a zero and that they were "not . . . comfortable"

assigning a different score, Troisi would force them to do so,

even though Troisi had not evaluated the patient herself and had

no basis for disagreement.

          At oral argument, Troisi tried to put an innocent gloss

on this behavior, explaining that she was just an "aggressive"

boss and that her rules were aimed at ensuring that the nurses

qualified patients for home health services she believed the

patients needed.    But Troisi's "insistence" on qualifying patients

for Medicare-reimbursable services "creates a strong inference

that she did not care" whether the services "served a legitimate

medical purpose" and that she therefore "not only knew of the

fraud, but actively played a role in directing it."       Vega, 813
F.3d at 399.

          Additionally, Troisi's purported management style does

not account for the incriminating actions she took on her own.

Troisi would often personally change the number that a nurse had

entered on an OASIS Form, using the same color pen that the nurse

had used so as to make the form appear unaltered.      Troisi would

even replace entire pages in OASIS Forms completed by nurses if

the forms contained information suggesting that the patient was
                                - 12 -
not actually homebound or in need of skilled services.          She knew

that the OASIS Forms did not accurately reflect the opinions of

the medical professionals who had evaluated the patients, and she

directly facilitated the fraud.      See United States v. Njoku, 737
F.3d 55, 63 (5th Cir. 2013) (finding the defendant's instructions

to a nurse to represent patients as homebound on OASIS Forms,

despite   the   nurse's   "concern   that   some   patients    were     not

homebound," evidence of the defendant's culpable state of mind).

          Finally, Troisi filled out patients' Form 485s based on

the contents of those falsified OASIS Forms, knowing that Dr.

Wilking would sign them without taking the time to read them --

let alone meet with and evaluate the patients.       See Vega, 813 F.3d

at 399 (finding evidence of the defendant's knowing complicity in

healthcare fraud where she "allowed" her company to seek Medicare

reimbursement   for   services   "prescribe[d]     [by   a   doctor]    for

patients he did not see"). And she continued to recertify patients

for further home health services even when their nurses had

recommended that they be discharged, their primary care physicians

had sent letters explaining that such services were not needed,

and the patients themselves had tried to discontinue the visits.

          This evidence was sufficient to permit a reasonable

factfinder to conclude, beyond a reasonable doubt, that Troisi

conspired to commit, and indeed committed, healthcare fraud.           See,

e.g., United States v. Eghobor, 812 F.3d 352, 362 (5th Cir. 2015)
                                 - 13 -
(finding sufficient evidence of a healthcare-fraud conspiracy

where the defendant "admitted patients . . . by falsifying OASIS

forms," "create[d] [Form 485s] prescribing [those patients] home

health care," and had the forms signed by a doctor who had never

treated those patients).   The circumstances underlying each of the

substantive fraud counts "share[] . . . the [same] badges of fraud

that characterize[] the overall scheme."   Iwuala, 789 F.3d at 12.

Ultimately, "the guilty verdict finds [sufficient] support" in

this record.   O'Donnell, 840 F.3d at 18 (quoting United States v.

Hatch, 434 F.3d 1, 4 (1st Cir. 2006)).

                                III.

          The convictions are affirmed.

                               - 14 -