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United States v. Brown

United States Court of Appeals, Fifth Circuit

September 13, 2017

UNITED STATES OF AMERICA, Plaintiff - Appellee
v.
TRACY RICHARDSON BROWN, Defendant-Appellant

         Appeal from the United States District Court for the Eastern District of Louisiana

          Before DAVIS, GRAVES, and COSTA, Circuit Judges.

          GREGG COSTA, Circuit Judge

         Tracy Brown was convicted of multiple health care fraud and kickback offenses perpetrated through her medical equipment company. We must decide whether the evidence introduced at trial was sufficient to sustain her conviction; whether the jury was properly given a deliberate ignorance instruction; whether an expert was properly allowed to testify; and whether a leadership enhancement was properly included in her Guidelines calculation. Because we find that the trial court did not err on any of these points, we AFFIRM.

         I.

         Brown was the co-owner of the medical equipment company Psalms 23. Psalms 23 provided equipment for Medicare beneficiaries. In 2005, Brown hired marketers to assist in finding patients for whom Psalms could provide medical equipment. For legitimate equipment companies, patient referrals often come directly from doctors who prescribe the equipment to patients. For her marketers, Brown emphasized that they should refer patients who needed motorized wheelchairs and scooters, as these were the most profitable pieces of equipment. Instead of paying the marketers a set salary, Brown proposed a commission system; marketers would be paid on a per-piece-of-equipment basis. Federal law forbids commission payments for referrals, as they greatly increase the incentive for fraud (that is, for recruiting patients who do not need the equipment). See 42 U.S.C. § 1320a-7b(b)(1)(A). As a result of this setup- and Brown's encouragement to refer the most profitable equipment-many patients were billed for the same equipment, which is highly unusual for a legitimate supplier. Indeed, expensive power wheelchairs, wheelchair accessories, and orthotics represented more than 95% of Psalms' Medicare billings. And sometimes Psalms billed Medicare for expensive versions of the orthotics while purchasing much cheaper counterparts to give to the patients. To detail just one example of this upcoding, Psalms routinely billed Medicare $830 for a sophisticated back brace (HCPCS code L0631), but provided beneficiaries with a different brace (HCPCS code L0625) that cost about $11. By upcoding this one brace 334 times, Psalms billed Medicare more than a quarter million dollars above what the brace given to beneficiaries cost.

         For just about all the equipment that was ordered, only two doctors were used to certify that the equipment was needed. Both doctors testified that they never met with Brown, working instead through the marketers to refer patients to Psalms. Many of these patients did not actually need the equipment the doctors prescribed. And that was if the doctors even wrote out the prescription; one marketer stated that she filled out prescriptions and progress reports for patients herself and only used the doctor as a rubber stamp. Another doctor who evaluated patients and referred them to Brown, asked that payments be made out to her mother to avoid "the appearance of impropriety."

         In fall of 2007, Brown hired a consultant to show her the "right way" to bill Medicare. The consultant identified a number of the fraud indicators identified above and then some:

• Psalms did not have a physical therapist, which Medicare requires to ensure that the orthotics fit the beneficiary.
• Psalms did not collect copays from beneficiaries, something Medicare requires and that helps ensure that the equipment is needed.
• Psalms repeatedly ordered bilateral braces-one for each side of the body-meaning the patient was immobilized, which did not "make any sense" to the consultant.
• Medicare did not pay for full series of orthotics (knee brace, arm brace, back brace, and heating pad) that Psalms was billing as "arthritis kits."
• Psalms never billed for manual wheelchairs, instead selling only the more expensive power wheelchairs.
• At least one marketer (that the consultant was aware of) was being paid on commission ...

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