U.S. v. Lennartz, 90-1770
| Decision Date | 08 January 1992 |
| Docket Number | No. 90-1770,90-1770 |
| Parties | Medicare & Medicaid Guide P 39,731, 34 Fed. R. Evid. Serv. 1085 UNITED STATES of America, Plaintiff-Appellee, v. Dennis M. LENNARTZ, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Andrew B. Baker, Jr., Asst. U.S. Atty. (argued), Office of the U.S. Atty., Dyer, Ind., William T. Grimmer, Asst. U.S. Atty., Office of the U.S. Atty., South Bend, Ind., for plaintiff-appellee.
Randall R. Fearnow (argued), Michael R. Franceschini, Steers, Sullivan, McNamar & Rogers, Indianapolis, Ind., Chris Potts, South Bend, Ind., Thomas J. O'Brien, Donahue, O'Brien & Morrissey, Lafayette, Ind., for defendant-appellant.
Before WOOD, Jr., POSNER and MANION, Circuit Judges.
A grand jury indictment charged defendant-appellant Dennis Lennartz with eighteen counts of mail fraud, in violation of 18 U.S.C. § 1341, and one count of making a false Medicaid claim, in violation of 18 U.S.C. § 1001. After a sixteen-day trial, the jury convicted him on six of the mail fraud counts. Lennartz now appeals his conviction arguing (1) that the district court erred by admitting, for a purpose not allowed by Federal Rule of Evidence 404(b), testimony regarding prior uncharged misconduct by Lennartz; (2) that the district court erred in giving, over Lennartz's objection, a conscious avoidance instruction; and (3) that there was insufficient evidence to prove that the mailings alleged in the mail fraud counts were for the purpose of executing a scheme and artifice to defraud. We affirm the conviction.
Lennartz began operating a commercial ambulatory service, known as Ambulatory Renal Services ("ARS"), in Indiana in 1982. With proper authorization from the Medicaid program, commercial ambulatory services provide transportation of Medicaid recipients to and from medically necessary appointments, and the ambulatory services then bill Medicaid for the cost of transportation. Medicaid, supported substantially by federal government funds, is administered in Indiana by the Indiana Department of Public Welfare and Blue Cross/Blue Shield of Indiana ("Blue Cross").
Blue Cross processes the Medicaid provider applications from the commercial ambulatory services. All accepted providers are sent a copy of the Provider Manual. The Provider Manual explains the compensation system for ambulatory services, which is as follows: reimbursement is figured according to (1) the base rate for transportation costs within the county in which the patient resides; (2) out-of-county mileage; (3) waiting time; and (4) for multiple patient transportation--full base rate, out-of-county mileage, and waiting time for the first patient, and only one half of the base rate for the second patient. To recover these transportation costs, the transportation services must first be authorized by the county welfare department in which the Medicaid recipient resides. The county welfare departments enroll Medicaid recipients and give prior authorization for certain transportation of Medicaid recipients. Prior authorization may be granted prospectively, such as one or two months in advance.
Lennartz applied to Blue Cross to enroll ARS as a Medicaid transportation provider. ARS satisfied the requirements and was enrolled as a Medicaid provider. Lennartz was sent a copy of the Provider Manual.
ARS transported primarily kidney dialysis patients. Most dialysis patients receive dialysis three times a week. Expert testimony at trial indicated that five hours is a reasonable amount of time for dialysis treatment; however, the normal dialysis time is between three and four hours, plus the time needed to begin and end the dialysis process.
Lennartz was the only employee of ARS, although he was not the only driver for ARS. Lennartz contracted with individuals who transported patients for ARS. Lennartz submitted the Medicaid claims for all drivers associated with ARS and in turn reimbursed those drivers. Most of Lennartz's business operations were conducted through the United States mail. These operations included submitting claim forms, obtaining prior authorization request forms and paying his drivers by check.
Lennartz instructed the drivers to notify him as to missed trips or changes in service but usually did not discuss computation of out-of-county mileage or waiting time. The drivers received mileage logs from Lennartz. These logs had blanks for starting and ending mileage and time but did not have blanks for waiting time or out-of-county mileage. Lennartz asked the drivers to send him the logs every month or so, but failure to submit the logs did not prevent the driver from receiving payment from ARS.
On a patient's first trip with ARS, Lennartz normally drove the patient himself. In figuring the out-of-county mileage amounts for each patient, Lennartz relied on this initial transport of the patient. He did not make the effort to discover the actual out-of-county mileage traveled by his drivers in subsequent transports. Because of his system he routinely submitted the initial transport mileage figure, even if his drivers used different, shorter routes. For waiting times, Lennartz consistently submitted claims for five hours of waiting time.
In January 1987, the Indiana Department of Welfare requested that Blue Cross conduct an investigation of ARS. The initial Blue Cross investigation led to recommendation by Blue Cross that the case be referred to the Office of the Attorney General of Indiana. The Medicaid Fraud Unit of the attorney general's office commenced an investigation in late February 1987. The investigation included interviews of drivers, Medicaid recipients, county welfare workers, and hospital and dialysis center employees. Records from hospitals, dialysis centers, ARS and Blue Cross were examined. The investigators also conducted surveillance at dialysis centers, noting arrival and departure times, and checked the out-of-county mileage of transportation routes.
The investigation exposed improper charging by Lennartz in his Medicaid claims. The investigators discovered many instances where a patient remained in dialysis for four hours or less, yet Lennartz consistently billed Medicaid for five hours of waiting time. After checking the transportation routes, the investigators found that the out-of-county mileage charged by Lennartz was frequently higher than the mileage actually traveled. Occasionally patients missed appointments and, despite the driver having reported the missed appointment to Lennartz, Lennartz would submit a claim to Medicaid. Lennartz also would submit claims for individual patients, when in fact the patients had been transported in group trip situations.
The indictment charged that Lennartz used the mails in furtherance of a scheme and artifice to defraud in which he would provide to county welfare officials false information regarding Medicaid recipients. Specifically, it charged he submitted to Blue Cross fraudulent claims which contained overstated mileage and waiting times, sought improper compensation for services not provided, and claimed reimbursement for individual trips in group transport situations.
The jury found Lennartz guilty on counts 1, 6, 7, 13, 16, and 17. The district court sentenced Lennartz to one year of imprisonment on count 1 and suspended imposition of any further sentence on the remaining counts. Lennartz was placed on probation for five years, to be consecutive to the one year's imprisonment.
The mailings involved in these counts were the paychecks mailed to drivers Randy Abbey and Charlene Nunn. The patient transported by Abbey often missed appointments, and Abbey reported these missed appointments to Lennartz. Lennartz, however, continued to file Medicaid claims and to pay Abbey despite there having been no actual transportation of the patient. Lennartz billed correct out-of-county mileage for Abbey's trips, yet until 1987 he billed for a waiting time of five hours when the waiting time generally was between three and one-half and four hours.
Nunn never received instructions from Lennartz about reporting waiting time nor was she instructed to record out-of-county mileage. When she first began transporting patients for ARS, she transported two patients separately. When circumstances changed, making it convenient to combine the trips, she did so. After having combined the trips for four months, she informed Lennartz of her change in practice. Nonetheless, she continued to receive the same compensation per patient. Lennartz submitted individual transportation claims for these patients and disregarded the multiple transport regulation. Lennartz testified that for the times he improperly submitted individual claims, he did not know that the patients were being transported together. When a patient transported by Nunn was hospitalized for a time, Nunn left messages for Lennartz informing him of the hospitalization; however, Lennartz continued to submit claims for the patient's transportation. Lennartz billed the waiting time as five hours for each trip. He billed out-of-county mileage of forty-eight miles, while the investigation found the mileage to be thirty-two miles.
Lennartz contends that the district court's admission of testimony regarding prior uncharged misconduct attributed to him violated Federal Rule of Evidence 404(b). In reviewing the district court's evidentiary rulings, we are limited to determining whether the district court abused its discretion. United States v. Whalen, 940 F.2d 1027, 1032 (7th Cir.1991). As this court has noted, " '[a]ppellants who challenge evidentiary rulings of the district court are like rich men who wish to enter the Kingdom; their prospects compare with those of camels who wish to pass through the eye of a needle.' " Id. (quoting United States v....
To continue reading
Request your trial
-
U.S. v. Koen
...and (4) the probative value of the evidence is not substantially outweighed by the danger of unfair prejudice." United States v. Lennartz, 948 F.2d 363, 366 (7th Cir.1991) (quoting United States v. Scop, 940 F.2d 1004, 1009 (7th Cir.1991)). 12 We review a district court's decision to admit ......
-
U.S. v. Neely
...act, and (4) the probative value is not substantially outweighed by the danger of unfair prejudice. Id. See United States v. Lennartz, 948 F.2d 363, 366 (7th Cir.1991); United States v. Zapata, 871 F.2d 616, 620 (7th Cir.1989) (citing United States v. Shackleford, 738 F.2d 776, 779 (7th Cir......
-
People v. Xun Wang
...steps to make sure that he does not acquire full or exact knowledge of the nature and extent of those dealings." United States v. Lennartz , 948 F.2d 363, 369 (C.A. 7, 1991) (quotation marks and citation omitted).Given that defendant was, or should have been, aware of the following four fac......
-
U.S. v. Shorter
...v. Dominguez, 992 F.2d 678, 680 (7th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 250, 126 L.Ed.2d 203 (1993); United States v. Lennartz, 948 F.2d 363, 366 (7th Cir.1991); United States v. Shukitis, 877 F.2d 1322, 1327 (7th Cir.1989). "Appellants who challenge evidentiary rulings of the di......
-
Health care fraud.
...(stating intent requirement satisfied when defendant knows false statement is essential to scheme's success); United States v. Lennartz, 948 F.2d 363, 369 (7th Cir. 1991) (approving lower court's conscious avoidance instruction when defendant denied knowledge but evidence showed he delibera......
-
Health care fraud.
...ignorance" jury instruction where facts indicate defendant might have been willfully blind to requirements); United States v. Lennartz, 948 F.2d 363, 369 (7th Cir. 1991) (holding failure to take steps to assure bills for Medicaid services were correct could support finding of conscious avoi......
-
Health care fraud.
...ignorance" jury instruction where facts indicate defendant might have been willfully blind to requirements); United States v. Lennartz, 948 F.2d 363, 369 (7th Cir. 1991) (holding failure to take steps to assure bills for Medicaid services were correct could support finding of conscious avoi......
-
Health care fraud.
...ignorance" jury instruction where facts indicate defendant might have been willfully blind to requirements); United States v. Lennartz, 948 F.2d 363, 369 (7th Cir. 1991) (holding failure to take steps to assure bills for Medicaid services were correct could support finding of conscious avoi......