In re Subpoenas Duces Tecum

• Decision Date: 23 June 1999
• Docket Number: No. 1:99MC00005.,No. 1:99MC00006.,1:99MC00005.,1:99MC00006.
• Citation: 51 F.Supp.2d 726
• Parties: In re SUBPOENAS DUCES TECUM NOS. A99-0001, A99-0002, A99-0003 and A99-0004.
• Court: U.S. District Court — Western District of Virginia

Page 726

51 F.Supp.2d 726

In re SUBPOENAS DUCES TECUM NOS. A99-0001, A99-0002, A99-0003 and A99-0004.

No. 1:99MC00005.

No. 1:99MC00006.

United States District Court, W.D. Virginia, Abingdon Division.

June 23, 1999.

Rick A. Mountcastle, S. Randall Ramseyer, U.S. Attorney's Office, Abingdon, VA, for plaintiffs.

Dennis E. Jones, Dennis E. Jones & Associates, Lebanon, VA, for defendants.

MEMORANDUM OPINION

SARGENT, United States Magistrate Judge.

I. Background and Facts

This matter came before the court for hearing on May 17, 1999, on motions to quash, ("the Motions to Quash"), certain subpoenas duces tecum served on a local physician and three health care providers by the United States Attorney for the Western District of Virginia pursuant to 18 U.S.C.A. § 3486. These matters were referred to the undersigned for hearing and determination pursuant to 28 U.S.C.A. § 636(b)(1)(A).

While no evidentiary hearing has been held in this matter, certain facts appear uncontested by the parties. On April 29, 1999, Federal Bureau of Investigation, ("FBI"), agents served four subpoenas duces tecum on an employee of Family Health Care Associates of Southwest Virginia, P.C., ("Family Health Care"). Copies of these subpoenas are attached to the Motions to Quash. The subpoenas appear identical, except that each subpoena is directed to a different person or entity. Subpoena No. A99-0001 is directed to Dr. Dwight L. Bailey or the custodian of records of Dwight L. Bailey, M.D.; Subpoena No. A99-0002 is directed to Dr. Dwight L. Bailey or the custodian of records of Ridgewood Health Care Clinic; Subpoena No. A99-0003 is directed to Dr. Dwight L. Bailey or the custodian of records of Family Health Care; Subpoena No. A99-0004 is directed to Dr. Dwight L. Bailey or the custodian of records of Abingdon Family Health Care. Family Health Care is the sole owner and operator of Ridgewood Health Care Clinic, ("Ridgewood"), and Abingdon Family Health Care.

The subpoenas state the following:

You are hereby commanded to appear before Assistant U.S. Attorney S. Randall Ramseyer and/or Rick A. Mountcastle, or another Assistant U.S. Attorney, at the time and place set forth below. You are required to bring with you and produce the records described in the attachment to this subpoena. The production of such records is necessary to the United States Department of Justice's performance of its responsibility to investigate Federal health care offenses, as defined in Title 18, United States Code, Section 24. In addition to the production of such documents, you are required to give testimony concerning the production and authentication of such records.

The subpoenas were issued by the Department of Justice and are signed by Assistant U.S. Attorney Rick A. Mountcastle. The subpoenas state that the requested documents must be provided at the U.S. Attorney's Office in Abingdon, Virginia, at 10 a.m. on Tuesday, May 18, 1999. The subpoenas also stated that they were issued under authority of 18 U.S.C.A. § 3486 and that "[f]ailure to comply with the requirements of this subpoena will render you liable to proceedings in the United States District Court to enforce obedience, pursuant to Title 18, United States Code, Section 3486(c)."

The subpoenas compelled the production of the following documents:

1. All patient records and documentation concerning patients whose services were billed to Medicare, Medicaid, UMWA, Trigon, Blue Cross Blue Shield, U.S. Department of Labor Black Lung Program and CHAMPUS, including complete medical files, patient appointment books, patient billing records, office sign-in sheets, and telephone messages in any form.

2. All purchase records and invoices reflecting Schedule II through V controlled substance purchases, DEA Official Order Forms, records of inventories, dispensing records, DEA Form 41 Registrant, Inventory of Drugs Surrendered, DEA form 106 Reports of Theft or Loss of Controlled Substances.

3. All original accounting and bank records, general ledgers, patient information/insurance cards, cash receipt and disbursement records, business ownership records and other items identifying sources of income from billings. These records include the following:

patient billing records

patient account records

business bank account records

personal bank account records including checks (front & back)

bank statements

deposit items and tickets

check ledgers

expense records, including receipts, contracts and journals

accounting ledgers & journals

cash receipt journals

insurance correspondence, instructions, memoranda and the like detailing communications and transactions with insurors

titles, receipts, deeds, certificates, and other records of assets purchased in whole or in part with practice related funds.

4. All documents regarding health care plans' requirements for claim filing and record retention, including instructions, manuals, code listings, memoranda, notices, directives, phone messages and correspondence. All documents regarding the Medicaid requirements for claim filing and record retention, including instructions, manuals, code listings, memoranda, notices, directives, phone messages and correspondence.

5. All records of any controlled substance samples provided to Dr. Dwight L. Bailey, M.D. by wholesale drug companies, manufacturers, or their representatives. All documents regarding proper uses and contraindications for controlled substances, including correspondence, notices, and directives from governmental entities, drug manufacturers, wholesalers, retailers and pharmacies, or their representatives.

The subpoenas compelled the production of all such records, regardless of whatever form they were in or medium in which they were held, for the period of January 1992 to the present.

On May 12, 1999, Dr. Bailey and Family Health Care moved the court to quash the subpoenas based on a number of grounds. First, Dr. Bailey asserts that he is the "target" of an ongoing criminal investigation,¹ and, as such, the act of producing the requested documents and/or testifying regarding the possession and authenticity of the documents would violate his right against self-incrimination under the Fifth Amendment to the United States Constitution. Second, the movants assert that the subpoenas, on their face, are overly broad and that compliance with the subpoenas will be unduly burdensome on the movants. In support of this position, the movants assert that the subpoenas compel the production of approximately 15,000 patient files, which contain between 750,000 and 1,250,000 pages of material. Third, the movants assert that the subpoenas violate their rights against unreasonable searches and seizures under the Fourth Amendment to the U.S. Constitution in that the U.S. Attorney has served these subpoenas without a court determination that probable cause exists to believe that the movants are involved in any criminal activity. Fourth, the movants argue that producing patient records absent a showing of probable cause violates the patients' right of privacy in their medical records. In the alternative, the movants also request that, should the court order them to comply with the subpoenas, the court order the U.S. Attorney's Office to reimburse them for the cost of retrieving and photocopying of all the requested records.²

The U.S. Attorney, through his assistants, asserts that 18 U.S.C.A. § 3486 gives him the broad authority to issue "health care subpoenas" to obtain records which "may be relevant" to his investigation of certain criminal health care offenses from any individual or entity. The U.S. Attorney also asserts that the statute does not require any probable cause showing, and, at most, a court may determine only whether the documents requested "may be relevant" to a health care offense investigation. See 18 U.S.C.A. § 3486. The U.S. Attorney contends that the subpoenas are precise and detailed in what documents are sought and that the mere fact that the subpoenas call for the production of a large volume of documents does not make compliance with the subpoenas unreasonable. To address any concern that compliance with the subpoenas may place an undue burden on the movants, the U.S. Attorney has offered to allow the movants to first produce all documents with the exception of patient treatment files and records pertaining to claim filing procedures. After reviewing these documents, the U.S. Attorney would then notify the movants what, if any, patient files and records pertaining to claim filing procedures he wished them to produce. The U.S. Attorney contends that absent specific statutory authority, his office should not be required to reimburse a party for costs associated with complying with a subpoena. The U.S. Attorney also argues that the production of these documents will not violate Dr. Bailey's Fifth Amendment right against self-incrimination. Finally, the U.S. Attorney states that production of the requested patient medical records will not violate the patients' privacy rights because the patients have no real expectation of privacy in the records requested and any individual privacy interest is outweighed by the significant government interests in investigation of acts of health care fraud.

II. Analysis

In 1996 Congress passed and President Clinton signed the Health Insurance Portability and Accountability Act, Pub.L. 104-191, ("the Act"), which, according to at least one commentator, includes the most comprehensive set of federal health care fraud provisions in history. Kirk J. Nahra, Commentary, The Anti-Fraud Elements Of The Kennedy-Kassebaum Legislation 3 No. 15 MEALEY'S LITIG.REP.: INS. FRAUD 19 (1996). Section 248 of the Act added a new statute, 18 U.S.C.A. § 3486, which authorizes the Attorney General, or her designee, to issue subpoenas duces tecum³ to obtain records for investigations relating to federal criminal health care offenses. Section 3486(a)(1) states:

(1) In any...