Rubin v. Garvin, Docket No. 06-1614-pr.

• Citation: 544 F.3d 461
• Decision Date: 29 September 2008
• Docket Number: Docket No. 06-1614-pr.
• Parties: Daniel RUBIN, Petitioner-Appellant, v. Henry GARVIN, Superintendent, Mid-Orange Correctional Facility, Respondent-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

544 F.3d 461

Daniel RUBIN, Petitioner-Appellant, v. Henry GARVIN, Superintendent, Mid-Orange Correctional Facility, Respondent-Appellee.

Docket No. 06-1614-pr.

United States Court of Appeals, Second Circuit.

Argued: March 26, 2008.

Decided: September 29, 2008.

Robert A. Culp, Garrison, N.Y., for Petitioner-Appellant.

Alyson J. Gill, Assistant Attorney General (Andrew M. Cuomo, Attorney General of the State of New York, Barbara D. Underwood, Solicitor General, Roseann B. MacKechnie, Deputy Solicitor General for Criminal Matters, on the brief), New York, N.Y., for Respondent-Appellee.

Before: FEINBERG and HALL, Circuit Judges, and SAND, District Judge.^*

FEINBERG, Circuit Judge:

In 1999, Petitioner Daniel Rubin was convicted in New York Supreme Court, Albany County, of one count of second-degree grand larceny and eight counts of first-degree offering a false instrument for filing, based on evidence that he and his home health care agency knowingly overcharged New York State for Medicaid reimbursements. Now, some nine years later, we are faced with Rubin's appeal from a decision of the United States District Court for the Northern District of New York (Mordue, Chief Judge) insofar as it denied his petition for habeas corpus as to seven of the nine counts of conviction. He argues that his conviction should be overturned because a regulation underlying both the grand larceny and false instrument counts, the so-called "public charge" regulation, N.Y. Comp.Codes R. & Regs. tit. 18, § 505.14(h)(7)(ii)(a)(1), is unconstitutionally vague. Because we disagree, as explained below, the judgment of the district court is affirmed.

I. BACKGROUND¹

A. Parties and Applicable Regulations

Rubin was the founder and president of Allstate Home Care, Inc. ("Allstate"), a provider of home health care services with three offices and about 200 employees in Dutchess County, New York. Medicaid paid for services for the majority of Allstate's clients.

Medicaid, a program that finances health care for the poor, is jointly funded by the state and federal governments but run by the states individually. See Conn. Dep't of Soc. Servs. v. Leavitt, 428 F.3d 138, 141 (2d Cir.2005). New York's Medicaid program was administered until September 1996 by the New York State Department of Social Services ("DSS"), and thereafter by the New York State Department of Health.²

New York State has promulgated detailed regulations that govern Medicaid. One such regulation, concerning payment rates for providers of personal care services that have cost experience (such as Allstate), states:

(h) Payment.

...

(7) This paragraph sets forth the methodology by which the department will determine MA [medical assistance] payment rates for personal care services providers that have contracts with social services districts for any rate year that begins on or after January 1, 1994.

...

(ii) Determination of payment rate.

(a) Providers with cost experience.

(1) Medical assistance payments to personal care services providers for any rate year beginning on or after January 1, 1994, are made at the lower of the following rates:

(i) the rate the provider charges the general public for personal care services; or

(ii) the rate determined by the department in accordance with [a method that accounts for the provider's costs].

N.Y. Comp.Codes R. & Regs. tit. 18, § 505.14(h)(7)(ii)(a)(1). We follow the parties in calling this provision the "public charge" regulation. The public charge regulation appears in a section of the Medicaid regulations that governs DSS departmental procedures.

Another provision, which the parties call the "unacceptable practices" regulation, states:

(b) Conduct included. An unacceptable practice is conduct which constitutes fraud or abuse and includes....

(1) False claims.

(i) Submitting, or causing to be submitted, a claim or claims for:

...

(d) amounts substantially in excess of the customary charges or costs to the general public.

Id. § 515.2(b)(1)(i)(d).

Rubin and Allstate were indicted in March 1998.³ Rubin was charged with one count of second-degree grand larceny (Count One) and six counts of first-degree filing of a false instrument (Counts Two through Seven), for submitting claims that he falsely certified were in compliance with federal and state laws and regulations; and two more counts of first-degree filing of a false instrument (Counts Eight and Nine), for submitting false cost reports.⁴ After Rubin requested a bill of particulars, the state identified two regulations with which it alleged Rubin had falsely certified compliance: the public charge regulation and the unacceptable practices regulation.

Rubin was tried before a jury in Supreme Court, Albany County, in March 1999. The case lasted two weeks and featured 22 witnesses.

B. Evidence at Trial

As part of its participation in Medicaid, Allstate submitted annual reports to DSS detailing various business costs and other figures. Allstate reported to DSS that its charge to the general public for "Level II" personal care services was $13.50 per hour in 1993 and $15.25 per hour in 1994 and 1995.⁵ DSS used data provided by Allstate about prior years' costs to set its Medicaid reimbursement rates for upcoming years: $13.35 per hour for individual Level II clients in 1994, $15.02 in 1995, and $14.79 in 1996. Allstate, like other providers, was told that it could request that its reimbursement rate be adjusted downward if it wanted to charge the public a lower rate. Letters mailed to Rubin in 1994 and 1995 that accompanied DSS's newly calculated reimbursement rates also stated, "Medicaid regulations preclude payment in excess of the charge made to the general public for personal care services."

Several former Allstate employees testified that Rubin was in charge of day-to-day operations and decisionmaking at Allstate. In particular, many of these employees said that Rubin was responsible for determining or approving rates for personal care services, and that he had detailed command of the business's billing and finances. For instance, both Debbie Dubois, who worked in payroll and accounts receivable, and former accounting manager Susan Malavet testified that Rubin reviewed all Medicaid remittance statements and approved payment of all bills. Rubin's administrative assistant, Elizabeth Fernandes, testified that he could quote Medicaid's rates off the top of his head.

Employees also testified that Rubin knew about the state's requirement that the Medicaid reimbursement rate be no higher than the rate charged to the general public. Ina Lynch, Allstate's director of community relations from 1990 to 1992, testified that she learned about the requirement from Rubin personally, and that Rubin mentioned it on several occasions. Malavet testified that she first learned about the requirement at a seminar in 1993; Rubin confirmed Malavet's understanding but added that there were "exceptions" to the rule, such as for ongoing contracts or for discounted rates for prompt billing. In 1994, when Allstate was notified of its new Medicaid reimbursement rate for the coming year, Malavet told Rubin that the rate for private clients would have to be raised to match the Medicaid rate; Rubin responded only that he would "check into it."

Despite Rubin's knowledge of the Medicaid rules, the People's evidence showed that Allstate billed the overwhelming majority of private, self-paying (i.e., non-Medicaid) Level II clients at rates lower than it reported to DSS and lower than its approved Medicaid reimbursement rates. According to employees who worked at Allstate during the mid-1990s, private Level II clients were charged $12 an hour during that time period and were never quoted any higher rate.⁶ One employee testified flatly that the rate was never negotiable. A state auditor testified that of 3,500 private payer noncontractual invoices submitted by Allstate between 1994 and 1996, only one invoice was actually billed and paid at a non-holiday hourly rate higher than $12.⁷ The auditor also calculated that if Allstate's Medicaid reimbursement rate had been the same as its charge to the general public, DSS would have saved more than $600,000.⁸

Witnesses also testified that Rubin intentionally tried to obscure the discrepancy between the rate charged to the general public and the Medicaid rate. After Malavet's 1994 conversation with Rubin, Rubin directed employees to create two sets of fliers listing the agency's rates: one stating a "regular" rate of $15.25 an hour, and another stating a "discounted" rate of $12 an hour. The cost reports sent to DSS contained only the higher rate, while Rubin told Fernandes to distribute to the office staff only the flier with the lower rate. He told her to keep the flier with the higher rate in a drawer, "for Medicaid." A review of Allstate records indicated that no one paid the "regular" rate of $15.25 an hour. In 1997 Rubin instructed Malavet to alter existing billing records to insert the higher rate reported to DSS; she refused, and quit her job shortly afterward.

Allstate transmitted claims to DSS for reimbursement on computer disks, accompanied by paper certificates that Rubin signed. Six of these certificates formed the basis of the first six false instrument charges, Counts Two through Seven. Beginning in February 1995, the certificates contained the following boilerplate language: "I have reviewed these claims: I (or the entity) have furnished or caused to be furnished the care, services and supplies itemized and done so in accordance with applicable federal and state laws and regulations."⁹ They also stated, "I UNDERSTAND ... THAT I MAY BE PROSECUTED UNDER APPLICABLE FEDERAL AND STATE LAWS FOR ANY FALSE CLAIMS, STATEMENTS OR DOCUMENTS OR CONCEALMENT OF A MATERIAL FACT."

C. Jury Charge, Conviction, and Post-Trial Proceedings

At the close of trial, defense counsel asked that the jury charge include references to both the public charge...