Go Directly to Jail, Do not Pass Go, Again

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Douglas Moss, a convicted health insurance fraud perpetrator on his way to federal prison sought an in banc review of his trial and unsuccessful appeal that I reported on at https://zalma.com/blog/go-to-jail-go-directly-to-jail-do-not-pass-go/

Posted on May 26, 2022 by Barry Zalma

Douglas Moss, a convicted health insurance fraud perpetrator on his way to federal prison sought an in banc review of his trial and unsuccessful appeal that I reported on at https://zalma.com/blog/go-to-jail-go-directly-to-jail-do-not-pass-go/

The petition for rehearing en banc remains pending. In light of the issuance of a revised panel opinion, adding one paragraph, Moss is granted 21 days to file a supplement to his petition for rehearing en banc, if he wishes to do so. He is not required to file a supplement. If he does file one and the Court desires a response from the government, it will be requested. The current decision, in United States Of America, Plaintiff-Appellee v. Douglas Moss, Nos. 19-14548, 19-14565, United States Court of Appeals, Eleventh Circuit (May 20, 2022) he unsuccessfully tries again to avoid jail, restitution and forfeiture.
THE BASIS OF THE CRIME

Medicare and Medicaid combined spend $1,500,000,000,000 a year, which is more than one-third of the total health expenditures in this country. Like other government health care programs, these two work on the honor system. Both programs take a pay first, ask questions later (if ever) approach. Which leads to crime and more crime, both sooner and later.

A trust-based system is only as good as the people who are trusted. Douglas Moss is one of those who was trusted but not trustworthy. As a physician, he fraudulently billed Medicare and Medicaid for millions of dollars for visits to nursing home patients that he never made. Someone else with a lower billing rate made some of those visits, and others never took place.

For his fraudulent conduct, Moss was convicted of conspiracy and substantive health care fraud, sentenced to 97 months imprisonment, ordered to pay restitution of about 2.2 million dollars, and ordered to forfeit around 2.5 million dollars. He appealed, challenging the convictions, sentence, restitution amount, and forfeiture amount, which is nearly every component of the judgment against him and he lost on every component of his appeal.
FACTUAL BACKGROUND

Medicare and Medicaid are federally funded health care programs. Medicare pays “claims,” which are requests by a health care provider to be “reimbursed” (paid) for services provided to Medicare recipients. CPT codes are a national uniform coding structure created for use in billing and overseen by the American Medical Association. They are used by all health insurance companies and by Medicare and Medicaid.

For Medicare to pay a claim several requirements must be met. The service must be provided to a real patient who is properly enrolled as a Medicare beneficiary; it must be provided by a health care provider properly licensed and “enrolled” as a Medicare provider; it must be a service covered by Medicare; and it must be properly documented and billed. The service also must be reasonable and medically necessary. It is common practice for physicians to submit claims exceeding the amount in the fee schedule, even though they know they won’t get reimbursed the excess amount.

To properly bill Medicare at the physician’s rate for services provided in a nursing home setting, the physician must be the one in the patient’s room directly providing the service to the patient.
THE FRAUD SCHEME

Moss was the medical director and attending physician at four nursing homes. The services Moss billed on one stellar day would have required him to put in nearly 100 hours in that one 24-hour period. People sometimes wish there were more hours in a day, but Moss alone miraculously stretched some of his days to far more than 24 hours. Of course, Moss’ miracle was non-miraculous, it was old-fashioned fraud.
INDICTMENT AND TRIAL

Moss went to trial. After a seven-day trial, a jury found him guilty on all counts. The jury heard evidence about how the representations Moss made in the billings were impossible: his claiming to have performed more than 24 hours of services a day, his claiming to have seen over 50 patients a day, and his claiming to have seen patients in Georgia when he was actually in Las Vegas. It wasn’t a close case.
SENTENCING

Moss’ presentence investigation report recommended a guidelines range of 78 to 97 months. The court sentenced Moss to 97 months imprisonment, the top of the guidelines range. It also ordered him to forfeit $2,507,623.69 and to pay $2,256,861.32 in restitution. The forfeiture amount was for the total that Medicare and Medicaid had paid to Moss, with no reduction for any legitimate services he had provided.
ANALYSIS

Moss was allowed to present six character witnesses: four former patients, one former patient’s wife, and one registered nurse who had worked with him in an emergency room. Those witnesses testified in detail about the medical care that Moss provided, and they testified consistently that in their opinions he had a good character and was compassionate, caring, and honest.

Moss was not on trial for being unkind or uncaring, or for not being compassionate when he did see patients, but for lying about seeing some patients at all and for billing Medicare for services he did not provide.
CLOSING ARGUMENT

It is one thing to argue that a defendant was not motivated by profit and another to argue that he didn’t commit a crime because there was no proof that he had netted a profit. The government does not have to prove a penny of profit to establish the elements of fraud. A paucity of proof of profit is no defense. Defense counsel was not entitled to argue that it was.
SENTENCE ISSUES

The district court did not clearly err in finding that Moss’ intended loss is $6.7 million, not $2.5 million. Intended loss is pecuniary harm that the defendant purposely sought to inflict and also includes intended pecuniary harm that would have been impossible or unlikely to occur.

Moss intentionally billed in a way that would maximize the money he received from Medicare. The way Moss “maximized” his profits was by always billing his claims at a rate higher than the one in Medicare’s schedules.

Intended loss includes even loss and harm that is unlikely to occur. The appellate court’s review of the intended loss amount is only for clear error, and there is none.
RESTITUTION

Moss contends that the $2,256,861.32 the district court ordered him to pay in restitution is too much. He claims that he is entitled to more than a 10 percent reduction for legitimate services. Moss’ estimate was that the value of legitimate services was $1,079,219.39, which would reduce restitution to $1,428,404.30.

Moss had the burden to prove the value of any medically necessary goods or services he provided that he claims should not be included in the restitution amount. He failed to do so.

The trial court concluded: While presenting evidence as to the number of visits performed, Moss failed to present evidence establishing the legitimacy of those visits.

The appellate court concluded that the district court did not clearly err in rejecting it and in identifying the fatal defect in his methodology we just discussed. The burden was on Moss to show that the services he provided were medically necessary

The trial court committed no clear error in rejecting Moss’ estimate and in ordering restitution in the amount of $2, 256, 861.32.
FORFEITURE

The district court ordered Moss to forfeit $2,507,623.69. That is the total that Medicare and Medicaid paid him for claims billed under CPT codes 99306, 99309, and 99310. Forfeiture was ordered under 18 U.S.C. § 982(a)(7), which provides that, in convictions for federal health care offenses like Moss’, the court “shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.”

Given Moss’ failure to identify a single properly billed claim, he has not persuaded the appellate court that the district court clearly erred.
ZALMA OPINION

The Eleventh Circuit has given much to ex-doctor Moss, including a second opinion affirming his conviction and sentences although he is the consummate health care fraud perpetrator. He belongs in jail and should be prevented from using the money he stole to force the government to try him before a jury and consider two attempts to appeal his conviction and sentence. He clearly violated the first oath a physician takes which is: “first, do no harm.” A physician relative of mine once told me that it was not until the 1950’s that the chance of getting better when treated by a physician was greater than no treatment at all. If you were treated by Dr. Moss or his co-conspirators the chances of receiving a benefit from the service was close to nil. And, if the treatment needed was not given, and his bills were fraudulent, the patient certainly will get worse.
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(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].

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