United States v. Kestner, 3:19-cr-00095

• Decision Date: 07 December 2021
• Docket Number: 3:19-cr-00095
• Parties: UNITED STATES OF AMERICA, v. MICHAEL KESTNER et al.
• Court: U.S. District Court — Middle District of Tennessee

UNITED STATES OF AMERICA,
v.
MICHAEL KESTNER et al.

No. 3:19-cr-00095

United States District Court, M.D. Tennessee, Nashville Division

December 7, 2021

MEMORANDUM AND ORDER

ALETA A. TRAUGER UNITED STATES DISTRICT JUDGE.

Before the court are defendant Michael Kestner's Motion to Dismiss Counts Two, Seven, and Twelve of the Superseding Indictment as Time-Barred as to Him (Doc. No. 179) and his Motion to Dismiss Superseding Indictment for Lack of Fair Notice (Doc. No. 180). The United States has filed a consolidated Response to both motions (Doc. No. 186), and the defendant has filed a Reply (Doc. No. 188). For the reasons set forth herein, the Motion to Dismiss Superseding Indictment for Lack of Fair Notice will be denied, but the Motion to Dismiss certain counts as time-barred with be granted.

I. PROCEDURAL BACKGROUND

The original Indictment in this case, naming Kestner's co-defendants, was filed on April 10, 2019. (Doc. No. 3.) The Superseding Indictment, adding Kestner as a defendant, was filed on October 9, 2019. (Doc. No. 60.) It charges Kestner and his co-defendants with one count of conspiracy to commit healthcare fraud, in violation of 18 U.S.C. § 1349, and fifteen counts of knowingly and willfully executing and attempting to execute a scheme to defraud Medicare, TennCare, and TriCare, all healthcare benefit programs affecting commerce, in violation of 18 U.S.C. §§ 1347(a) and 2.

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In support of these charges, the Superseding Indictment alleges that, at all relevant times, MedManagement, Inc. (“MMI”) was a Tennessee management company with its principal place of business in Franklin, Tennessee and that Kestner was the sole owner and CEO of MMI. (Doc. No. 60 ¶ 8.) MMI was the majority owner of Pain MD, a Delaware limited liability company whose principal place of business was in Franklin, Tennessee. Pain MD operated pain and wellness clinics in Middle Tennessee, Virginia, and North Carolina. Kestner indirectly owned Pain MD and served as its President. (Id. ¶ 9.) The other defendants, all healthcare providers (three nurse practitioners and one physician's assistant), were employed by MMI or Pain MD. (Id. ¶ 10.)

The Superseding Indictment alleges that, beginning no later than January 2010 and continuing through May 29, 2018, the defendants knowingly agreed and conspired with each other and unknown others to commit healthcare fraud for the purpose of enriching themselves. (Id. ¶¶ 12-13.) To accomplish this purpose, the defendants represented to Medicare, TennCare, and TriCare that they provided services to patients-specifically Tendon Origin Insertion (“TOI”) injections into patients' backs, along the spine-even though these services were not medically necessary (id. ¶¶ 14, 15) and often were “not provided as represented” (id. ¶ 15), as the injections were “anatomically impossible to perform as recorded in the medical records” (id. ¶ 18).

The Superseding Indictment alleges that Pain MD held itself out to be an “interventional” pain management practice, meaning that it claimed to provide pain management services (“including injections and durable medical equipment”) that were intended to reduce patient reliance on opioids and other narcotic pain medications, when, in fact, these services were intended to increase Pain MD's revenues and enrich the defendants. (Id. ¶ 16.) As a result of the conspiracy, the defendants caused more than $27, 537, 383 to be billed to Medicare, which resulted in approximately $5, 054, 525 in reimbursement; more than $8.5 million to be billed to TennCare,

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resulting in approximately $101, 078 in reimbursement; and more than $2, 544, 322 to be billed to TriCare, resulting in approximately $284, 459 in reimbursement. (Id. ¶ 19.)^[1]

The portion of the Superseding Indictment entitled “Counts Two through Sixteen, ” charging “Health Care Fraud, ” expressly incorporates the allegations supporting the conspiracy charge and then largely repeats the same allegations pertaining to the conspiracy. The Superseding Indictment states that Kestner and his co-defendants “did knowingly and willfully execute, and attempt to execute a scheme and artifice to defraud” the three healthcare programs by submitting claims for reimbursement for TOI injections into patients' backs that were not medically necessary, for the purpose of enriching themselves. (Id. ¶¶ 21, 22.) The Superseding Indictment then states:

On or about the dates enumerated below, in the Middle District of Tennessee, the Defendants, . . . in connection with the delivery of, and payment for, health care benefits items, and services, did knowingly execute, and attempt to execute, the above-described scheme and artifice to defraud a health care benefit program affecting commerce . . . and to obtain, by means of materially false and fraudulent pretenses, . . . money and property owned by, and under the custody and control of, Medicare.

(Id. ¶ 24.)

The Superseding Indictment contains a chart inserted at paragraph 24, listing each enumerated Count Two through Sixteen and identifying the defendants charged in each specific count, the affected beneficiary's initials, the date of service, the claim receipt date, the service allegedly performed, the amount billed, and the program billed. (See id. at 8.) Kestner is charged

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in each of the counts. Thus, for example, the chart contains the following information relating to the three counts that Kestner contends are time-barred:

Count	Defendant	Beneficiary Name	Alleged Date of Service	Claim Receipt Date	Service Purportedly Performed	Billed Amount
TWO	MICHAEL KESTNER, and BRIAN RICHEY	R.D.	5/7/2014	5/19/2014	Tendon Origin Injection (201551)	$105 (x5) Medicare
SEVEN	MICHAEL KESTNER, and DANIEL SEELEY	P.M.	9/24/2014	9/29/2014	Tendon Origin Injection (201551)	$105 (x5) Medicare
TWELVE	MICHAEL KESTNER, and JONATHAN WHITE	B.D.	4/15/2014	5/13/2104	Tendon Origin Injection (201551)	$105 (x5) Medicare

(See Doc. No. 60 ¶ 24, at 8-9.^[2]) Aside from the information in the chart, the Superseding Indictment does not contain additional information related to the separate healthcare fraud charges.

II. MOTION TO DISMISS ENTIRE INDICTMENT

Kestner moves under Rule 12(b)(3)(B)(v) of the Federal Rules of Criminal Procedure for an order dismissing the Superseding Indictment in its entirety. He maintains that the Superseding Indictment is legally insufficient, because it does not consist of a “plain, concise, and definite written statement of the essential facts constituting the offense[s] charged.” (Doc. No. 180, at 1 (quoting Fed. R. Crim. P. 7(c)(1), and citing United States v. Superior Growers Supply, Inc., 982 F.2d 173, 176 (6th Cir. 1992)).)

A. Legal Standard

The Notice Clause of the...