U.S. v. Davis, 06-5073.
| Decision Date | 22 June 2007 |
| Docket Number | No. 06-5073.,No. 06-5074.,06-5073.,06-5074. |
| Citation | 490 F.3d 541 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Carolyn Sue DAVIS (06-5073) and Otis Davis (06-5074), Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Joseph R. Lane, Pillersdorf, DeRossett & Lane, Prestonsburg, Kentucky, Brenda Popplewell, Brenda Popplewell, Attorney at Law, Somerset, Kentucky, for Appellants. Erin J. May, Assistant United States Attorney, Lexington, Kentucky, for Appellee. ON BRIEF: Ned B. Pillersdorf, Pillersdorf, DeRossett & Lane, Prestonsburg, Kentucky, Janet L. Stumbo, Van Lear, Kentucky, for Appellants. Erin J. May, Charles P. Wisdom, Jr., Assistant United States Attorneys, Lexington, Kentucky, for Appellee.
Before: KENNEDY, BATCHELDER, and CLAY, Circuit Judges.
Carolyn Sue Davis (hereinafter "Ms. Davis") and Otis Davis (hereinafter "Mr. Davis") (collectively "appellants") appeal their August 25, 2005 convictions for twelve counts of aiding and abetting Medicare fraud, in violation of 18 U.S.C. § 1347(1) and (2), and one count of obstruction of a criminal investigation involving federal healthcare offenses, in violation of 18 U.S.C. § 1518(a). Ms. Davis asserts that the trial court erred in (1) excluding evidence that oxygen received by certain miners named in the indictment was medically necessary, (2) limiting the cross-examination of a prosecution witness with regard to bias, (3) handling an exhibit in a way that emphasized certain portions of the material, and (4) responding to a jury question with supplemental instructions. Mr. Davis asserts that the trial court erred by (1) permitting him to proceed throughout trial without separate counsel, and (2) denying him a directed verdict on the twelve counts of aiding and abetting health care fraud. For the reasons that follow, we affirm the district court's convictions of Ms. Davis and Mr. Davis on all counts.
On August 25, 2005, a jury convicted Carolyn Sue Davis and her husband, Otis Davis, on twelve counts of aiding and abetting Medicare fraud in violation of 18 U.S.C. § 1347(1) and (2), with each of the twelve counts based on claims filed on behalf of particular named patients, and one count of obstruction of a criminal investigation involving federal healthcare offenses, in violation of 18 U.S.C. § 1518(a). These charges stemmed from the Davis's orchestration of and participation in a scheme to supply oxygen to coal miners suffering from black lung disease. Ms. Davis was instrumental in the founding of the Kentucky Black Lung Association (hereinafter "KBLA"), an organization designed to help miners obtain black lung benefits, as well as other goods and services they might need in order to live with the disease. She would send miners that were associated with the KBLA to Dr. Raghu Sundaram, a pulmonary doctor, for the requisite medical testing. Dr. Sundaram established a special clinic for individuals associated with the KBLA, at which Ms. Davis volunteered. Dr. Sundaram was also named in the indictment as an aider and abetter but was acquitted at the joint trial.
From Dr. Sundaram's office, the patients were directed to J & J Medical, a durable medical equipment (hereinafter "DME") company created and owned by Mr. Davis, a retired coal miner, for their oxygen supplies. A DME company is paid by Medicare for supplying equipment by submitting a certificate of medical necessity (hereinafter "CMN"), created electronically from a computer-generated form and electronically submitted to the insurer, here, Medicare contractor Palmetto GBA, which pays upon its processing of the claim. A CMN contains three sections with instructions as to the party to complete each portion. The middle portion, Section B, requires someone from the doctor's office to provide the patient's blood-oxygen levels. The form explicitly stipulates that the supplier of the health care product is not to fill out this medical information. At the bottom of the form, the doctor is to sign and confirm that the medical information is true and accurate.
The investigation of J & J Medical began in March of 2002, when a Health and Human Services investigator discovered information about questionable practices of the company in relation to Dr. Sundaram. Examination revealed that the vast majority of J & J Medical clients were referrals from Dr. Sundaram. It also indicated that Ms. Davis, as a volunteer at Dr. Sundaram's clinics, had special access to the doctor's patients, their files, and their prescriptions. During an interview with the investigator, and later at trial, Dr. Sundaram unequivocally stated that he had never authorized anyone to sign prescription forms for him, nor had he authorized anyone to sign a CMN for him.
Yet at trial, witnesses from the offices of Dr. Sundaram and J & J Medical testified that they personally observed Ms. Davis doctoring prescriptions and forging the doctor's signature on them, as well as forging his signatures and including data on CMNs without any paperwork to ensure that the data required for Medicare reimbursement was accurate. Connie Webb, who volunteered in Dr. Sundaram's office, testified that Ms. Davis directed her to go to J & J Medical on at least four or five occasions to sign the doctor's name to CMNs. Upon completion of the forms, Webb would have someone at the J & J Medical office supply her with copies of the forms, which she could insert into the patient's charts upon returning to the doctor's office. Letha Justice, Ms. Davis's son's cohabitating girlfriend whom Ms. Davis paid for her work at Dr. Sundaram's clinic, testified that she went to the Davis's home, where, at Ms. Davis's direction, she wrote figures in Section B of the CMNs, though Ms. Davis did not consult any patient files when dictating the numbers to fill in. Ms. Justice recounted that she filled in data on more than a hundred CMN forms per Ms. Davis's instructions. Phyllis Bennett Blair, a billing agent for J & J Medical, recalled witnessing Ms. Davis herself signing Dr. Sundaram's name to CMN forms, even practicing duplicating his signature. Ms. Blair and Margaret Lawson, another billing agent for J & J Medical, both testified to refusing Ms. Davis's requests that they, too, participate in fraudulent completions of CMNs.
Multiple witnesses also testified as to the falsification of "check-off" sheets, forms used in Dr. Sundaram's office, but not legally required, as a measure to ensure patients had a choice of medical suppliers. Ms. Blair, Amanda Tibbs, a medical billing agent working in the same building as J & J Medical, and Jennifer Akers, Ms. Davis's daughter and an employee of J & J Medical, recounted at trial that Ms. Davis directed a group at the J & J Medical office to fill out "check-off" sheets, sign them with the patients' names, copy them, and put them in patient files.
In addition to recalling instances of fraud that they witnessed in the course of the Medicare fraud scheme itself, many testified as to the various ways the Davis's attempted to cover up their misdeeds when they became aware of the investigation. Ms. Blair testified that Ms. Davis offered to give her fifteen dollars to remove "all of the prescriptions and anything that would incriminate her." Upon her refusal, she stated that Mr. Davis ultimately removed the items. Jennifer Akers and her husband both took the stand and testified that Mr. and Ms. Davis together came to their house to request that they hide a garbage bag containing improperly completed CMNs and prescriptions at various stages of completion.
At the conclusion of the trial, the jury found Ms. Davis and Mr. Davis guilty on all twelve counts of violating 18 U.S.C. § 1347(1) and (2) as well as the single count of obstruction of justice in violation of 18 U.S.C. § 1518(a). Upon conviction for health care fraud and obstruction of justice, Ms. Davis was sentenced to a term of imprisonment for 60-months, and Mr. Davis received a sentence of 36-months' imprisonment. Both received three years of supervised release, a special assessment of $100.00 on each count, and direction to make restitution in the amount of $171,933.00, imposed jointly and severally on Ms. Davis and Mr. Davis. Here, they each appeal their conviction on counts one through twelve, based on various errors allegedly committed by the trial court.
A. Defendant Carolyn Sue Davis argues on appeal that the trial court erred by excluding evidence that oxygen received by the miners was medically necessary, asserting such evidence to be relevant to whether any alleged misrepresentations were material. In essence, Ms. Davis posits that "those paperwork mistakes, if any, only resulted in payments of claims that were proper rather that any false statements" of medical necessity where none existed. Four of the miners named in the first twelve counts testified that they did need oxygen and continued to receive oxygen. Ms. Davis suggests that, during her trial on charges of health care fraud, she should have been permitted to introduce evidence that the eight others also actually had a valid basis for receiving oxygen, in an effort to prove that Medicare only paid for treatment that was medically justified, even if the CMNs themselves were not completed with perfect accuracy and honesty. The trial court's decision to admit or exclude evidence is within the discretion of the trial judge and will be reviewed only for abuse of discretion. In re Air Crash Disaster, 86 F.3d 498, 526 (6th Cir.1996).
Section 1347 states that one commits health care fraud when he:
in...
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