U.S. v. Syme

• Decision Date: 31 July 2001
• Docket Number: No. 00-5172,00-5172
• Citation: 276 F.3d 131
• Parties: (3rd Cir. 2002) UNITED STATES OF AMERICA v. ROBERT U. SYME, APPELLANT Argued:
• Court: U.S. Court of Appeals — Third Circuit

Page 131

276 F.3d 131 (3rd Cir. 2002)

UNITED STATES OF AMERICA v. ROBERT U. SYME, APPELLANT

No. 00-5172

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued: July 31, 2001

January 7, 2002

On Appeal From the United States District Court For the District of Delaware (D.C. Crim. No. 98-cr-00032-5) District Judge: Honorable Joseph J. Farnan, Jr. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Peter Goldberger, Esquire (argued), Pamela A. Wilk, Esquire, 50 Rittenhouse Place Ardmore, PA 19003-2276, and Joseph A. Hurley, Esquire, 1215 King Street Wilmington, DE 19801, for Appellant.

Carl Schnee, Esquire, United States Attorney, Beth Moskow-Schnoll, Esquire (argued), Assistant United States Attorney, 1201 Market Street, Suite 1100 P.O. Box 2046 Wilmington, DE 19899-2046, for Appellee.

Before: Becker, Chief Judge, McKEE, and Weis, Circuit Judges.

OPINION OF THE COURT

Becker, Chief Judge.

This is an appeal by defendant Robert U. Syme, who owned and operated a number of individually incorporated ambulance companies which, according to the 31-count superseding indictment, fraudulently sought over-reimbursement through the Medicare and Medicaid programs. Syme was convicted on several counts of wire fraud, mail fraud, and False Claims Act violations, and on one count of making a false statement relating to a health care matter. Syme's corporate co-defendants were convicted on all counts and are not involved in this appeal. Each of the fraud and False Claims Act counts alleged that Syme engaged in two or more of the following forms of fraud when he billed the government for ambulance trips: (1) falsely identifying a Pennsylvania address for his companies and seeking reimbursement at the rate paid to Pennsylvania companies, when the claim should have been billed at the (lower) Delaware or Maryland rates; (2) falsely representing that ambulance transport was medically necessary; (3) providing false information about the destination of the ambulance trip; and (4) providing false information about the type of treatment that the patient being transported was going to receive.

Syme raises several challenges to his convictions. The principal challenge is that the indictment alleged and the District Court instructed the jury on a theory of fraud that is invalid as a matter of law. More particularly, Syme contends that the government's theory that he committed fraud by misrepresenting that Pennsylvania was the "home station" of his ambulance companies, thereby getting reimbursed at the Pennsylvania rate, is invalid as a matter of law because the term "home station" had not been authoritatively defined during the time covered in the indictment. We conclude, however, that this fraud theory is not legally invalid, but rather, at most, may have been unsupported by the evidence presented at trial. Because each challenged count also rests on a fraud theory that Syme does not challenge on appeal, we must affirm the convictions that Syme challenges on this basis. See United States v. Griffin, 502 U.S. 46, 57-58 (1991).

We will, however, vacate and remand for a new trial Syme's False Claims Act conviction on count 25 of the superseding indictment. Albeit quite inadvertently, the District Court committed plain error with respect to that count, constructively amending the indictment by instructing the jury on a fraud theory that was not alleged in the count. In noticing plain error in this case, we hold that constructive amendments, which are per se reversible under harmless error review, are presumptively prejudicial under plain error review. Because we find that the government failed to present sufficient evidence during the first trial for the jury to convict on the "medical necessity" theory on Count 25, the "medical necessity" theory must be removed from the scope of the new trial thereon. To retry count 25 based on that theory would violate the Double Jeopardy Clause.

Syme also attacks all counts of conviction on the grounds that the District Court erred in the admission of certain evidence. Primarily, he challenges the admissibility of the testimony of a physician expert witness on the grounds that it could not "assist the trier of fact to understand the evidence or to determine a fact in issue." Fed. R. Ev. 702. We disagree, concluding that his testimony that an ambulance trip is actually medically necessary is an issue on which the average juror could benefit from a physician's expert testimony. We reject Syme's other evidentiary objections summarily. See infra note 2.

Turning from the convictions to the sentence, we agree with Syme that the sentence imposed by the District Court needs be vacated because the District Court committed plain error in violation of the Ex Post Facto Clause by applying the Sentencing Guidelines' enhancement for fraud committed by "sophisticated means," which was not included in the Guidelines until after Syme committed the offenses in this case. We will remand for resentencing on this count. We reject, however, Syme's claim that the restitution order that the District Court imposed on him violates Apprendi v. New Jersey, 530 U.S. 466 (2000). This claim presents a question of first impression in this Circuit, which we resolve by concluding that, because the statute under which the District Court sentenced Syme to pay restitution contains no maximum penalty, Apprendi does not apply.

I. Facts and Procedural History

From 1987 through late 1996, Syme owned and operated an ambulance company called Medical Services Corps, Inc. ("MSC"), which had its main office first in Stanton, Delaware, and after 1995, in Wilmington, Delaware. Syme created three corporate subsidiaries to MSC. In 1989, he founded NCC Transportation, Inc. ("NCC") and Elk Transportation, Inc. ("Elk"). In 1992 he created Independence EMS, Inc. ("Independence"). All three subsidiaries operated from MSC's Delaware offices and engaged in the business of providing ambulance transportation services. Ambulances from Syme's companies sometimes also operated in Pennsylvania, New Jersey, and Maryland. Syme exercised day-to-day control over MSC and all of its subsidiaries, including oversight of the ambulance dispatch and billing operations. One of the mainstays of Syme's ambulance businesses was transporting patients to and from regularly scheduled medical treatments. For example, his companies had contracts with the Delaware State Hospital to transport patients to the hospital for treatment.

The majority of the patients that Syme's companies transported were covered either by Medicare, the federally funded program that funds medical services for the elderly, or by Medicaid, a similar program that funds services for low-income people. The Health Care Financing Administration ("HCFA"), a federal agency within the Department of Health and Human Services ("HHS"), is responsible for coordinating and financing the reimbursement of health care service providers under the Medicare and Medicaid programs. During the period relevant to this case, HCFA contracted first with Pennsylvania Blue Shield and later with its subsidiary, Xact Medicare Services ("Xact"), to administer the reimbursement of Medicare claims. Xact was responsible for claims arising in Pennsylvania, New Jersey, and Delaware, and processed the claims for Medicare reimbursement submitted by Syme's ambulance companies.

Xact developed operational guidelines governing which claims would be reimbursed under Medicare consistent with HCFA policy memoranda. In order to get paid for transporting Medicare patients, ambulance companies were required to submit standard reimbursement requests to Xact with information about the patient, the purpose of the trip, and the starting point and destination. Xact would determine whether to reimburse an ambulance service for a trip depending on whether the trip met certain criteria. First, the ambulance trip had to be "medically necessary" as defined by Xact's guidelines. Second, the patient had to be transported for a treatment covered by Medicare's ambulance reimbursement guidelines. Third, the ambulance trip had to be to a covered destination. Certain destinations, such as hospitals, were covered by Xact's reimbursement program, while others, such as a dental offices, were not.

Ambulance services were also required to record on their reimbursement forms a provider number that indicated the state in which their service was located. Most importantly, the rate of reimbursement that Medicare paid varied widely according to which state provider number the ambulance service used. The reimbursement rates for Pennsylvania ambulance services, for example, were almost twice as high as the rates for Delaware services.

Syme and his companies have long had a rocky relationship with HCFA and its subcontractors. In February 1982, Xact's predecessor, Pennsylvania Blue Shield, became concerned that Delaware Medical Services, Inc. ("DMS"), a separate company that Syme had formed around the same time as MSC, was filing duplicate claims for the same ambulance trip and billing at the higher Pennsylvania rate rather than at the Delaware rate. According to an affidavit by an employee in the HHS Office of the Inspector General, representatives from Pennsylvania Blue Shield spoke with Syme "in an attempt to educate [him] in the appropriate claim filing policies and procedures." Syme represented in this meeting that "he was inadequately reimbursed for ambulance service in Delaware."

In 1987, the government filed a civil suit against Syme and DMS, alleging, among other things, that DMS had falsely filed claims for Delaware ambulance trips using a Pennsylvania provider number in order to get reimbursed at the higher Pennsylvania rate. Syme settled the suit for $4,000 in May 1992, but did not admit any wrongdoing.

In April 1992, Donald Baxter, a Pennsylvania Blue Shield investigator, started looking into the location of...