United States v. Chikvashvili, 16-4393

• Citation: 859 F.3d 285
• Decision Date: 09 June 2017
• Docket Number: No. 16-4393,16-4393
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Rafael CHIKVASHVILI, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

859 F.3d 285

UNITED STATES of America, Plaintiff-Appellee,

v.Rafael CHIKVASHVILI, Defendant-Appellant.

No. 16-4393

United States Court of Appeals, Fourth Circuit.

Argued: May 11, 2017

Decided: June 9, 2017

ARGUED: Booth Marcus Ripke, NATHANS & BIDDLE, LLP, Baltimore, Maryland, for Appellant. Leo Joseph Wise, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee. ON BRIEF: Robert W. Biddle, NATHANS & BIDDLE, LLP, Baltimore, Maryland, for Appellant. Rod J. Rosenstein, United States Attorney, P. Michael Cunningham, Assistant United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellee.

Before WILKINSON, KING, and WYNN, Circuit Judges.

Affirmed by published opinion. Judge Wilkinson wrote the opinion, in which Judge King and Judge Wynn joined.

WILKINSON, Circuit Judge:

Rafael Chikvashvili, the former CEO of diagnostic imaging company Alpha Diagnostics, was charged with two counts of healthcare fraud resulting in death under 18 U.S.C. § 1347. At trial, the government alleged that Chikvashvili directed unqualified radiologic technicians to interpret x-rays and billed Medicare as though licensed physicians had performed the work. The government further contended that two patients died because their x-rays were misread by Alpha technicians. A jury convicted Chikvashvili on both counts.

Chikvashvili seeks acquittal on appeal. For criminal liability to attach under Section 1347, he argues, the false billing—as opposed to the fraudulent scheme as a whole—must be the "but-for" cause of death. Because the fraudulent billing did not cause the deaths of the two patients, Chikvashvili concludes, this court ought to vacate the "resulting in death" convictions. This same reasoning underlies his appeal of the district court's denial of his motion for acquittal and his challenge to the indictment and jury instructions. He also appeals the admission of expert testimony on causation. We reject his various challenges and affirm the judgment.

I.

Chikvashvili founded Alpha Diagnostics and served as the company's CEO. Alpha provided portable, on-site diagnostic imaging services such as x-rays, sonograms

, and electrocardiograms. An Alpha technician would travel to the patient's location, perform the imaging requested by the patient's attending physician, and transmit the results to a qualified doctor for interpretation. Alpha's revenue came from its patients and their insurers, including Medicare and Medicaid.

The government alleges that Chikvashvili supervised an elaborate, longstanding conspiracy to cheat Medicare through an assortment of fraudulent practices. Three former employees, all of whom worked as technicians, testified for the government. According to these witnesses, Alpha routinely requested reimbursement for two x-ray images when it had taken only one. Testimony also indicated that Alpha regularly charged excessive transportation costs, pretending that technicians had made separate trips to serve different patients at a single facility despite assisting multiple patients at a time. These accounts were corroborated by another former employee who oversaw billing and office administration. This employee also asserted that Alpha changed the attending physician's diagnosis or symptom codes so that the service would qualify for Medicare reimbursement.

This appeal concerns an even more dangerous form of healthcare fraud. According to Chikvashvili's former technicians, Chikvashvili directed them to interpret scans, prepare reports, and submit the results to attending physicians while passing off their handiwork as that of actual, board-certified radiologists and cardiologists. For some reports, technicians signed with a doctor's name; for others, Chikvashvili placed cut-outs of physicians' signatures on the documents. Alpha would then submit claims for reimbursement to Medicare as though qualified physicians had examined the images. The fraud was pervasive. One of the three technicians claimed that Chikvashvili directed them to read as many scans as possible and that they were responsible for analyzing the vast majority of Alpha's diagnostic images. Chikvashvili, for his part, kept a detailed log of Alpha's services. The technicians reported that he denoted fraudulent, in-house reads by placing a "minus" sign next to the initials of the purported interpreting physician.

In many instances, the technicians made mistakes in interpreting the images. And on two occasions, a patient died after an Alpha technician overlooked the congestive heart failure

documented in her x-ray. One patient, M.V.K., lived in a nursing home and had a chest x-ray taken shortly before her death. Alpha performed a chest x-ray of another patient, D.M.C., prior to D.M.C.'s elective surgery. D.M.C. bled profusely following the surgery and died shortly thereafter. The government's expert witnesses—Dr. Sanjeev Bhalla and Dr. Philip Buescher—opined that Alpha's reports on M.V.K. and D.M.C. failed to diagnose congestive heart failure in both patients.

Dr. Buescher also offered an opinion on causation. He testified that Alpha's misreads of the x-rays were the but-for causes of death for M.V.K. and D.M.C. In M.V.K's case, Dr. Buescher explained, diagnosing her congestive heart failure

would have led to treatment at a hospital, which would have alleviated her condition. And diagnosing D.M.C.'s condition would have led her attending physician to postpone her elective surgery until her heart condition had been addressed. In Dr. Buescher's opinion, neither patient would have died if their x-rays had been interpreted accurately.

The deaths of M.V.K. and D.M.C. formed the respective bases for Counts 2 and 3 of the indictment, which charged Chikvashvili with healthcare fraud resulting in death under 18 U.S.C. § 1347. Chikvashvili was also charged with conspiracy to commit healthcare fraud (Count 1); healthcare fraud (Counts 4-12); wire fraud (Counts 13-20); false statements relating to healthcare matters (Counts 21-31); and aggravated identity theft (Counts 32-33).

Chikvashvili lodged a number of unsuccessful objections to the proceedings below. First, before trial, Chikvashvili moved to exclude Dr. Buescher's expert testimony on causation with respect to Counts 2 and 3. The district court, however, ruled that Dr. Buescher's testimony was admissible. After the government closed its evidence, Chikvashvili moved for a judgment of acquittal under Rule 29 of the Federal Rules of Criminal Procedure, arguing that the evidence was legally insufficient for a conviction on any count. The district court denied the motion. Finally, Chikvashvili objected to two summation paragraphs in the jury instruction on Counts 2 and 3 but was again rebuffed.

A jury convicted Chikvashvili on all counts, and he was sentenced to a total of 120 months of imprisonment.

After Chikvashvili renewed his Rule 29 motion for acquittal, the district court rejected his request once again. The court noted that the government had presented "a mountain of evidence against Chikvashvili" in general as well as "ample evidence" that "the health care fraud orchestrated and carried on by Chikvashvili was the but-for cause of M.V.K.'s and D.M[.]C.'s deaths." J.A. 964-65.

II.

We begin with the proper reading of 18 U.S.C. § 1347. We hold that the execution of a fraudulent scheme—not merely the submission of a false claim—may give rise to liability under Section 1347 when execution of the scheme results in death. In light of this holding, we conclude that there was sufficient evidence to sustain Chikvashvili's convictions on Counts 2 and 3. We further hold that the district court did not err in instructing the jury on those counts. Finally, we affirm the district court's decision to admit the expert testimony of Dr. Buescher on causation.

A.

Congress established the crime of healthcare fraud in 18 U.S.C. § 1347 :

Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—

(1) to defraud any health care benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program,

in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both.

18 U.S.C. § 1347(a). In addition, Congress authorized the imposition of a life sentence where "the violation results in death." Id.

Congress, of course, has the ultimate authority to determine what are elements of an offense and what are sentencing factors and to demarcate the boundary between the two. It was conceivable that "result[ing] in death" would be in the nature of a sentencing enhancement, but that is not at all how the statute is constructed. Instead, "result[ing] in death" for purposes of Section 1347 must be found by a jury as with any element beyond a reasonable doubt.

Chikvashvili argues that a jury assessing whether a "violation result [ed] in death" may consider only whether the submission of a fraudulent claim for reimbursement caused the death in question. On his view, it is "legally insufficient" for purposes of establishing criminal liability to prove "that a death happened in the course of a broader conspiracy or scheme to commit health care fraud." Br. of Appellant at 23. As a result, Chikvashvili suggests, he is entitled to acquittal on Counts 2 and 3 as a matter of law because Alpha's submission of false claims did not cause the deaths of M.V.K. and D.M.C.

The unambiguous statutory text, however, refutes Chikvashvili's cramped interpretation of Section 1347. To violate that provision, one must "knowingly and willfully execut[e] ... a scheme or artifice " to defraud a healthcare benefit program. 18 U.S.C. § 1347(a) (emphasis added). Further, this "scheme or artifice" must be connected to either "the delivery of or payment for health care benefits, items, or services." Id...