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Double jeopardy challenge rejected for therapists convicted of Medicare fraud


In US v Crabtree a therapist at a health care clinic in Miami was convicted along with her two therapist codefendants of conspiracy to commit health care fraud in violation of 18 U.S.C. 1349. In this appeal they raised several issues, including a constitutional challenge under the double jeopardy clause. The underlying facts involved the operation of a mental health centers in Florida and North Carolina called the Health Care Solutions Network (HCSN) which billed Medicare for over $63 million in fraudulent claims. Crabtree and two of the co-defendants were former employees of HCSN who worked therapists.

HCSN was set up as a “partial hospitalization program” (PHP) that was purportedly designed to provide intensive psychiatric therapy to patients with “serious and acutely symptomatic mental illnesses.” These programs serve as a bridge between restrictive in patient care (psychiatric hospitalization) and routine outpatient care.

A PHP complying with federal and state law may seek Medicare reimbursement for its services. However, HCSN was not following Medicare standards and practices. From intake to discharge HCSN organized its business around Medicare fraud by editing intake information, fabricating treatment plans, and falsifying therapy and treatment notes to support Medicare claims. Therapist fabricated therapy notes for absent patients, falsified details from therapy sessions, and cloned notes by copying and pasting therapy notes from one patient’s file to another’s.

At the conclusion of the first trial the jury acquitted Crabtree and her two codefendant therapists of the false statement counts but it failed to reach a verdict on the conspiracy counts. At the first trial the court gave an instruction for Pinkerton liability with the false statement instruction. Under the Pinkerton instruction if the jury found the defendant guilty of participating in conspiracy it could find the defendant guilty of the substantive false statement crime even though the defendant did not personally participate in the false statement crime. The defendants were retried and convicted of the conspiracy count at the second trial.

The therapist defendants challenged the federal criminal conspiracy conviction on double jeopardy grounds arguing that because the jury acquitted them of the false statement counts, after the district court gave the Pinkerton liability instruction, the jury necessarily concluded as a factual matter that they were not a part of the HCSN healthcare fraud. They argued that the false statement fact was essential to the conspiracy count, and therefore the Fifth Amendment barred the government from retrying them on a conspiracy charge.

The court of appeals rejected this double jeopardy argument in concluding that the acquittal on the false statements charge did not necessarily determine any factual issue essential to the healthcare fraud conspiracy charge. A rational jury could have acquitted without foreclosing the issue of whether the defendants were part of the HCSN healthcare conspiracy.

The court also rejected the argument that there was a lack of sufficient evidence the therapist voluntarily joined the conspiracy, finding there was extensive proof of surrounding circumstances at HCSN coupled with numerous acts committed by the defendants which furthered the purpose of the conspiracy.

Another challenge by the therapists that was rejected by the appellate court was the dismissal of a juror for being late during the closing argument phase of the trial. The appellate court upheld the trial court’s decision finding the district court did not abuse its discretion in dismissing the juror. The trial judge had a reasonable grounds for replacing the juror who failed to arrive for court and whoa had already delayed closing arguments by 15 minutes at the time she was replaced.