Commonwealth v. Kiago

Decision Date20 September 2022
Docket Number20-P-959
Citation101 Mass.App.Ct. 717,195 N.E.3d 927
Parties COMMONWEALTH v. Hellen KIAGO (and nine companion cases ).
CourtAppeals Court of Massachusetts

S. James Boumil, Jr., Lowell, for the defendants.

Susanne Reardon, Assistant Attorney General (Gregoire Ucuz, Assistant Attorney General, also present) for the Commonwealth.

Present: Milkey, Kinder, & Sacks, JJ.

MILKEY, J.

Hellen Kiago was the president and chief executive officer of Lifestream Healthcare Alliance, LLC (Lifestream). Lifestream provided various home health services, such as nursing care, and physical and occupational therapy. It obtained its revenues principally from the Massachusetts Medicaid program administered by the State agency known as MassHealth. Based on evidence of fraudulent billing practices and related conduct, a Superior Court jury found Kiago and Lifestream (collectively, the defendants) each guilty of four counts of violating the Medicaid false claims statute, G. L. c. 118E, § 40, and one count of larceny over $250 by false pretenses, G. L. c. 266, § 30.2 The defendants jointly appealed from these convictions.

On appeal, Kiago claims that the convictions under G. L. c. 118E, § 40 (3), violated her Federal and State constitutional protections against self-incrimination. In addition, both defendants argue that the judge erred in denying their motion to suppress and in failing to exclude certain evidence at trial; that relevant MassHealth regulations are void for vagueness or are ambiguous, implicating the doctrine of lenity; and that the evidence was legally insufficient in one respect. We affirm.

Regulatory background. We begin with a brief summary of how the Medicaid payment system operates under applicable MassHealth regulations.3 The process begins when a home health provider, such as Lifestream, receives a patient referral from a physician. 130 Code Mass. Regs. § 403.410(A) (2016).4 Typically, a provider employee, which at Lifestream was a registered nurse (RN), then completes a medical assessment and develops a plan of care for the patient. The plan of care specifies the type and frequency of services to be provided, as well as the type of professional to provide them. 130 Code Mass. Regs. § 403.419(B) (2016).5 This plan of care must be approved by the referring physician. Id.

To secure such approval, the provider is to send a copy of the plan of care -- typically done at Lifestream via electronic fax -- to the referring physician, who approves the plan with his or her signature. 130 Code Mass. Regs. § 403.419(B). After receiving that signature, the provider can submit a claim to MassHealth. Id. In the event that a physician verbally approves the plan, the provider lawfully can submit the claim so long as it obtains a signed form within a specified timeframe. 130 Code Mass. Regs. § 403.419(D)(1) (2016).

The plan of care allows the patient to receive services for sixty days. For care to continue thereafter, the provider needs to recertify the plan, and that recertification also must be supported by a physician's signature. 130 Code Mass. Regs. § 403.419(A)(1) (2016).6 The same verbal authorization rules apply to the recertified plan of care. 130 Code Mass. Regs. § 403.419(D)(1).

Occasionally, mistakes in billing lead to overpayment of MassHealth funds to the provider.7 Should providers learn that they had billed MassHealth for money to which they were not entitled, there are processes in place for the provider to disclose this to MassHealth. Pursuant to the regulations, "provider[s] must report in writing and return any overpayments to the MassHealth agency within 60 days of the provider identifying such overpayment," and "provider[s] must include in such written report the reason for the overpayment and use such form and follow such process that may be prescribed by the MassHealth agency." 130 Code Mass. Regs. § 450.235(B) (2015). See 130 Code Mass. Regs. § 450.260(A) (2013) ("[a] provider is liable for the prompt payment to the MassHealth agency of the full amount of any overpayments"). To meet their regulatory duties, providers are to fill out the agency's overpayment disclosure form and send the form to MassHealth.8 As discussed infra, a provider who fails to report an overpayment and fails to return the money may be prosecuted for filing a false claim so long as the Commonwealth can prove fraudulent intent. See G. L. c. 118E, § 40 (3).

Factual background. 1. Lifestream's reliance on Medicaid. Most of Lifestream's patients used MassHealth as their insurance. At any given time, Lifestream served about 200 MassHealth patients, and Medicaid funds from MassHealth supplied the bulk of Lifestream's revenues.

On April 8, 2014, Kiago signed a provider contract with MassHealth on behalf of Lifestream agreeing "to comply with all federal and state laws, regulations, and rules [pertaining to MassHealth]." Specifically, this contract required Lifestream "to furnish services ... that conform to the requirements for such services ... as set forth in MassHealth regulations, to furnish only those services ... that qualify as medically necessary" as determined by the member's physician and "to keep such records as are necessary to disclose fully to MassHealth ... the extent and medical necessity of the services ... provided to, or prescribed for, eligible members for each claim submitted to MassHealth." In addition to maintaining paper records at its office, Lifestream used a particular computer software -- known as Kinnser software -- to store its patients’ records electronically. Thus, for example, when physicians faxed to Lifestream signed plans of care, a Lifestream employee would upload the form using the Kinnser software.

2. Overriding what was medically necessary. We turn next to the particular conduct underlying the various indictments. In July 2015, Kiago purported to override the clinical assessment of the Lifestream RN who had assessed two patients for services with Lifestream. Specifically, Kiago directed that those patients receive more hours than the RN had determined were necessary. This became the basis of count 6 of the indictments (larceny over $250 by false pretenses). It was also the basis for one of the Medicaid false claims counts (count 1), which the Commonwealth summarized at trial as alleging that Kiago "caused false claims to be submitted above and beyond what [the RN] had assessed those patients as needing."

3. The "correction orders." Count 2 of the indictments was based on certain actions that Kiago took in response to issues raised by Eva DeLuca, the RN who was hired as Lifestream's administrator in July 2015. DeLuca, who reported directly to Kiago and communicated with her almost daily, became responsible for the day-to-day oversight of Lifestream. Shortly after starting her position, DeLuca became concerned about various improprieties that came to her attention. Specifically, DeLuca was concerned that Lifestream was providing home health services without signed plans of care, or in excess of what was authorized by them. For example, Lifestream billed twenty-eight hours of care per week for one patient, even though that patient's plan of care authorized only up to fourteen hours per week. DeLuca communicated these concerns to Kiago. In response, Kiago directed DeLuca to issue "correction orders" in late 2015. These orders stated that "[d]ue to clerical error, patient inadvertently received" more hours of services than were ordered in the patient's plan of care "until [the] error was rectified." According to DeLuca, this information was false because no clerical errors in fact had been made, and because the overbillings were not in any way "inadvertent." She nevertheless sent the correction orders to physicians for their signatures. Some of the physicians refused to sign the forms. DeLuca informed Kiago of the physicians’ refusals, while offering her view that Lifestream "had to return moneys to MassHealth." Kiago told DeLuca that the overbillings would be rectified, but Kiago neither disclosed the overbillings to MassHealth nor returned the money.

DeLuca became debilitated by the stress of the job, including "seeing and having to ... live with" what she viewed as regulatory violations. This led to her own month-long hospitalization in October 2015, and she left her job in March 2016 shortly after Lifestream was audited. DeLuca eventually contacted the Office of the Attorney General (OAG) through its Medicaid fraud tip line and provided the Commonwealth with fifty-four of the correction orders. The allegations regarding these orders became count 2 of the indictments alleging violations of the Medicaid false claims statute. As the Commonwealth summarized to the jury at trial, count 2 was "for concealing or failing to disclose excess hours where instead correction orders were made."

4. Response to internal audit. DeLuca was not the only Lifestream employee concerned about improprieties in Lifestream's business practices. Another key Commonwealth witness was Christine Perez, who worked in Lifestream's billing department. In that role, Perez billed MassHealth for nurse visits and home health aide hours, and she checked whether the hours billed in fact had been approved under a plan of care. She testified that Kiago instructed her to bill MassHealth for the actual recorded hours, even if they exceeded the number that a physician had approved. Perez also learned that the home health aides did not have the required training or certifications. When she brought this to Kiago's attention, Kiago told Perez to bill for the hours regardless of the aides’ lack of certifications.

The concerns that employees such as DeLuca and Perez had raised about irregularities in Lifestream's billing and documentation practices, along with whether money had to be returned to MassHealth,9 were discussed at a series of internal meetings in the fall of 2015.10 Kiago eventually instructed Perez to...

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