U.S. v. Sanders, 84-1327

• Decision Date: 11 December 1984
• Docket Number: No. 84-1327,84-1327
• Parties: Medicare&Medicaid Gu 34,440, 16 Fed. R. Evid. Serv. 1274 UNITED STATES of America, Plaintiff-Appellee, v. Jesse Cornell SANDERS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 195

749 F.2d 195

Medicare&Medicaid Gu 34,440, 16 Fed. R. Evid. Serv. 1274

UNITED STATES of America, Plaintiff-Appellee, v. Jesse Cornell SANDERS, Defendant-Appellant.

No. 84-1327.

United States Court of Appeals, Fifth Circuit.

Dec. 11, 1984.

Frank D. McCown, J. Don Carter, Fort Worth, Tex., for defendant-appellant.

James A. Rolfe, U.S. Atty., Ronald C.H. Eddins, Asst. U.S. Atty., Fort Worth, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before CLARK, Chief Judge, WISDOM and HIGGINBOTHAM, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Jesse Cornell Sanders, a Fort Worth pharmacist, appeals from his conviction on a multiple count indictment charging him with Medicaid fraud, violations of federal controlled substance laws and the federal tax laws. ¹ He challenges his conviction on one ground only: that the district court improperly admitted into evidence as business records certain computer printouts of medical claims received, processed, and paid by the Texas Department of Human Resources. We conclude that the district court was correct in admitting the computer printouts and affirm.

I

Beginning in 1975, Sanders owned and operated North Side Pharmacy, a drugstore in a low-income neighborhood in Fort Worth. The pharmacy served many families who were entitled to Medicaid benefits, and these benefits included three free prescriptions each month for each family member. The procedure for dispensing the free prescriptions was as follows: the Medicaid patient would have Sanders fill his prescription at no charge; Sanders would then list these prescriptions on Medicaid claim forms which he submitted to Southwestern Drug Company of Dallas to be keypunched onto magnetic tape for submission to the Texas Department of Human Resources in Austin; ² upon receipt of the tape TDHR would load the data into TDHR computers and have the computers verify certain information; finally, TDHR would mail a check to Sanders for the amounts claimed and indicate payment on its computer records. Sanders was charged with writing during the years 1978 through 1981 phony prescriptions, never filled, and submitting claims for reimbursement.

At trial, the government's evidence included computer records from TDHR which reflected the reimbursement claims submitted by Sanders and TDHR's payment of those claims. Ronnie Weiss, Director for Medical Claims Processing at TDHR, testified that such claims information is stored on TDHR computers for operational purposes and to serve as business records. The information is used by the Comptroller of Public Accounts, for example, to generate checks for payment of claims.

Exhibits 122-157 were composed of printouts of TDHR "Payment Registers" sent to Sanders for the years 1978 through 1981. A Payment Register is a printout periodically generated by the TDHR computers to show which claims are approved and how much is paid on each claim. All parties and prescriptions involved are listed by their TDHR code numbers, and copies of the printouts are sent with monthly checks to the pharmacist. Government Exhibit 158, another TDHR computer printout, was a "Provider Profile" containing the same information as the Payment Registers and listing all claims filed by Sanders from 1978 through 1981. The format of the Provider Profile was such that it was more readable than the Payment Registers, however, because the names of the recipients and drugs prescribed were written out rather than listed by prescription and client numbers. The format also differed in that the claims were listed by Medicaid client rather than by order of submission to TDHR. Aside from these variations in format, both sets of computer printouts were simply graphical depictions of identical information retrieved from TDHR computers.

II

Sanders challenges the district court's decision to admit these computer records as business records under Fed.R.Evid. 803(6). ³ He argues that the printouts were not business records but instead were mere summaries of inadmissible evidence prepared long after the events described and prepared for the purpose of investigation and trial rather than in the ordinary course of business. Sanders contends that to be properly admissible, the evidence should have been qualified under Fed.R.Evid. 1006 as summaries of evidence otherwise admissible and the jury should have been instructed on the use of summaries.

We disagree. The district court has broad authority to determine the admissibility of evidence under the business records exception, and we review such decisions under an abuse of discretion standard. Capital Marine Supply, Inc. v. M/V ROLAND THOMAS II, 719 F.2d 104, 106 (5th Cir.1983); Rosenberg v. Collins, 624 F.2d 659, 665 (5th Cir.1980). There was no abuse of discretion here. As we noted in Capital Marine Supply,

Computer business records are admissible if (1) they are kept pursuant to a routine procedure designed to assure their accuracy, (2) they are created for motives that tend to assure accuracy (e.g., not including those prepared for litigation), and (3) they are not themselves mere accumulations of hearsay. (citations omitted).

719 F.2d at 106. Because the TDHR computer records meet these requirements, they were properly admitted as business records.

Steven Seidmier, the custodian of business records for Southwestern Drug, explained the routine procedures used at Southwestern to transfer the information from Sanders' Medicaid claim forms to magnetic tape. As part of these procedures the transposition of information from the claim forms was checked for accuracy by two Southwestern employees before the tape was submitted to TDHR. Ronnie Weiss of TDHR testified that the data from the magnetic tape prepared by Southwestern was then entered into TDHR computers for use in processing claims submitted by pharmacists such as Sanders. TDHR used the computer data to verify, among other things, that the Medicaid recipient identified in the claims had received no more than three prescriptions in a given month and that the drug sold was one for which TDHR authorized reimbursement. The Comptroller then used the information to generate reimbursement checks, and the data was thereafter maintained in TDHR computers for recordkeeping purposes. Such testimony established both that the computer data was prepared and kept pursuant to routine procedures and that the procedures were designed to assure accuracy of the records. Thus the first element for admissibility of computer records was satisfied.

As for the second element, Sanders' arguments that the printouts were records prepared for litigation are misplaced. The printouts themselves may have been made in preparation for litigation, but the data contained in the printouts was not so prepared. That information was recorded in Medicaid claim forms by Sanders or his employees shortly after Sanders supposedly filled the prescriptions, and Southwestern promptly recorded the information in a form acceptable to TDHR computers. TDHR then added a notation indicating payment at the time Sanders' claims were paid. No further additions or modifications were made to the data at any time after these transactions took place. Thus while the data was summoned in a readable form shortly before trial, it had been entered into TDHR computers "at or near the time" of the events recorded. It is not necessary that the printout itself be ordered in the ordinary course of business, at least when the program that calls forth the data only orders it out rather than sorting, compiling or summarizing the information. ⁴ As the Sixth Circuit has observed: "It would restrict the admissibility of...