In a recent opinion from the United States Court of Appeals for the Sixth Circuit, the court analyzed several alleged points of error from a criminal jury trial about a healthcare kickback scheme. See United States v. Trumbo, No. 20-1393, __ F. App’x __, 2021 WL 957337 (6th Cir. March 15, 2021). The opinion is significant because it gives insight into how an appellate court will approach contested issues on appeal after a rare criminal jury trial.
In Trumbo, Defendant “owned and operated . . . a telemarketing company that targeted Medicare beneficiaries in several states[.]” Id. at *1. The purpose of his company was to “enroll its eligible clientele with various home healthcare agencies.” Id. After his company “enrolled the new patients, the prescribing doctors referred the patients to U.S. Home Health[.]” Id. In return, “U.S. Home Health paid Trumbo between $200 and $500 for each new patient who successfully billed Medicare.” Id. The scheme was concealed by bills “for hours worked” and “false notations on the checks[.]” Id. “Medicare paid U.S. Home Health” over half a million dollars, and Defendant received over $100,000 from U.S. Home Health. See id.
The U.S. government charged Defendant with conspiracy “to commit healthcare and wire fraud” (18 U.S.C. § 1349), conspiracy “to pay and receive healthcare kickbacks” (18 U.S.C. § 371), and “receipt of kickbacks in connection with a federal healthcare program” (42 U.S.C. § 1320a-7b(b)(1)(A), 18 U.S.C. § 2). See id. A jury “convicted [Defendant] on the kickback-related charges and acquitted him on the healthcare-fraud charge.” See id. at *2.
Defendant appealed on multiple grounds, but the sixth circuit affirmed across the board. Here are some key takeaways:
To start, the court’s opinion illuminates how Rule 404(b) can be used at trial. Defendant claimed the trial court erred in admitting evidence that Defendant had received kickbacks from other home healthcare agencies as well. See id. at **2–3. Defendant contended admitting that evidence violated Federal Rule of Evidence 404(b) (addressing evidence of other crimes, wrongs, or acts). See id. The sixth circuit disagreed. See id. It reasoned that because the government “had to prove that [Defendant] knew that he was receiving kickbacks unlawfully”, and Defendant asserted that he lacked the necessary mens rea, the evidence was highly probative. See id.
Next, Trumbo gives clarification regarding the good faith jury instruction. Defendant claims the trial court erred in not issuing “his proposed instruction of ‘good faith’ regarding his four anti-kickback charges.” See id. at *4. But the sixth circuit disagreed, noting that “[b]ecause ‘the good-faith requirement is effectively bundled into the willfulness instruction,’ the district court substantially covered [Defendant’s] request.” See id. (citing United States v. Damra, 621 F.3d 474, 502 (6th Cir. 2010)). As a result, the trial court did not abuse its discretion in giving a good faith instruction only for the fraud count. See id.
Finally, Trumbo is a powerful illustration of the importance of preserving points for appeal. For example, Defendant claimed that the trial court erred over Rule 607 impeachment evidence, but he failed to “object to that line of questioning at trial[.]” Id. at **3–4. For that reason, the court applied the plain error standard of review. See id. And again, Defendant failed to object to what he claimed was prosecutorial misconduct at the trial. See id. at *4. Needless to say, but the plain error standard of review can be difficult to overcome.
Trumbo shows the importance of having experienced lawyers that can ably navigate defendants through a federal criminal proceeding. It also highlights the importance of properly preserving appellate points. If you have any questions about laws related to health care fraud or kickbacks, please contact the authors or any member of the healthcare department.