Summary
The Fifth Circuit affirmed convictions for health care fraud and aggravated identity theft, holding that a third-party administrator (BCBS) paying claims for a self-funded employer plan qualifies as a "health care benefit program" under 18 U.S.C. § 24(b). The court recognized an implicit misrepresentation theory of health care fraud, finding that submitting CMS1500 forms implied medical necessity, and that sufficient evidence of intent to defraud and materiality supported the jury's verdict. The aggravated identity theft convictions were upheld based on direct or circumstantial evidence linking the defendants to the unauthorized use of patient identifications during the fraud.
Topics
Practice areas
Questions Presented
- Whether BCBS qualifies as a 'health care benefit program' under 18 U.S.C. § 24(b) when it acts as a third-party administrator of a self-funded employer plan.
- Whether the evidence was sufficient to support convictions for health care fraud, including the validity of an implicit misrepresentation theory and proof of intent to defraud and materiality.
- Whether the evidence was sufficient to support convictions for aggravated identity theft.
Holdings
- BCBS qualifies as a health care benefit program because an administrator that pays claims for medical items is providing a medical benefit, item, or service under the plain text of the statute.
- An implicit misrepresentation theory of health care fraud is valid.
- The evidence was sufficient to support the convictions for health care fraud. The jury could rationally find that the submission of claims implied medical necessity, that the Andersons knew of the requirement and acted with intent to defraud, and that the misrepresentations were material.
- The evidence was sufficient to support the aggravated identity theft convictions. There was direct or circumstantial evidence linking each defendant to the patients named in the counts, and the underlying health care fraud was proven.
Key quotations
“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.” (at 7)
“We will affirm a jury verdict 'unless, viewing the evidence and reasonable inferences in light most favorable to the verdict, no rational jury could have found the essential elements of the offense to be satisfied beyond a reasonable doubt.'” (at 5)
“Following a 10-day jury trial, the defendants were convicted of multiple counts of health care fraud and multiple counts of aggravated identity theft based on their submission of fraudulent insurance claims. On appeal, the defendants argue there was insufficient evidence to sustain conviction. We AFFIRM.” (at 1)
Factual background
Terry and Rocky Anderson operated an optical and hearing aid business in Texas. In 2012-2013, they submitted over 2000 claims to Blue Cross Blue Shield of Texas (BCBS) for hearing aids for American Airlines employees. The claims were for hearing aids dispensed after hearing tests conducted at airports. The Andersons are licensed hearing aid fitters and dispensers, not physicians or audiologists. Evidence showed that testing was often inadequate (e.g., not in sound-proof environment, brief testing), records were falsified, and some patients were never tested but billed. BCBS paid the claims, and American reimbursed BCBS.
Procedural history
Following a 10-day jury trial, defendants were convicted of multiple counts of health care fraud and aggravated identity theft. The district court granted acquittal on some counts but denied acquittal as to the remaining counts. Defendants appealed.