United States v. Nelson
| Decision Date | 08 February 2023 |
| Docket Number | 4:17-CR-131-1 |
| Parties | UNITED STATES OF AMERICA v. SCOTT E. NELSON |
| Court | U.S. District Court — Northern District of Mississippi |
A jury convicted Scott Nelson of one count of conspiracy to commit healthcare fraud and seven counts of healthcare fraud. Nelson filed a “Motion for Judgment of Acquittal and/or New Trial” and, months later, an “Addendum” raising more arguments. Because there was sufficient trial evidence to support the jury verdict and because Nelson has not shown he was prejudiced by any alleged errors at trial (or before the grand jury), both acquittal and a new trial are denied.
On November 3, 2017, Scott E. Nelson, Charline Brandon, Wendell Brandon, and Annette Lofton were charged in a thirteen-count indictment with healthcare fraud and with conspiracy to commit healthcare fraud. Doc. #1. Regarding Nelson, who was named in all counts, the indictment alleged that “[f]rom on or about January 2005 through on or about March 2015,” Nelson, in his position as medical director for multiple hospices owned and operated by the Brandons and Lofton, “certified numerous patients as terminally ill and qualified for hospice when in truth and in fact, the patients were not terminally-ill and did not qualify for hospice,” and that Nelson knew his codefendants and other unnamed individuals “would submit fraudulent claims to Medicare and Medicaid [through the hospices] and receive payments from Medicare and Medicaid based on his false certifications and referrals.” Id. at PageID 1, 6-7. The indictment further alleged that “in addition to his monthly medical director's fee, [Nelson] received numerous payments from hospice providers for patient co-pays and past due amounts owed by patients.” Id. at PageID 8. Based on these factual allegations, the indictment charged Nelson with one count of conspiracy to commit healthcare fraud in violation of 18 U.S.C. § 1349 and twelve counts-each linked to a specific patient-of healthcare fraud in violation of 18 U.S.C. § 1347. Id. at PageID 9-12.
Charline Wendell,[1] and Lofton each pled guilty to the conspiracy to commit healthcare fraud charge. See Docs. #73, #89, #92. The remaining counts against Wendell and Lofton were dismissed upon their sentencing pursuant to their respective plea agreements. See Doc. #213 at 1; Doc #266 at 1. Charline died following her guilty plea and the Court granted the government's motion to dismiss the indictment against her due to her death. Doc. #248. Consequently, only Nelson was left to proceed to trial.[2]
On the government's motion a week before trial, the Court dismissed Count Eleven (one of the healthcare fraud counts) against Nelson. Doc. #300. Trial commenced on March 21, 2022. Doc. #302. On April 4, 2022, the jury convicted Nelson on the conspiracy to commit healthcare charge (Count One) and on seven of the remaining healthcare fraud charges as to patients M.A. (Count Two), E.T. (Count Three), E.M. (Count Four), L.S. (Count Five), E.B. (Count Seven), T.D. (Count Eight), and J.B. (Count Ten).[3] Doc. #308.
On April 26, 2022, Nelson filed a “Motion for Judgment of Acquittal and/or New Trial.”[4] Doc. #320. On October 26, 2022, while his post-trial motion was pending, Nelson filed an “Addendum to Defendant's Motion for Judgment of Acquittal and/or New Trial.” Doc #332. The government responded in opposition to both the motion and the Addendum. Docs. #322, #334. The Court denied the motion and the Addendum on January 11, 2023. Doc. #336. This opinion explains why.
Federal Rule of Criminal Procedure 29(a) provides that “[a]fter the government closes its evidence or after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” “Evidence is sufficient to support a conviction so long as any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” United States v. Gas Pipe, Inc., 997 F.3d 231, 240 (5th Cir. 2021) (internal quotation marks omitted). In applying this standard, “the court views all evidence, whether circumstantial or direct, in the light most favorable to the government, with all reasonable inferences and credibility choices to be made in support of the jury's verdict.” Id. (cleaned up).
Motions for new trials are governed by Federal Rule of Criminal Procedure 33(a). Under Rule 33(a), a “court may vacate any judgment and grant a new trial if the interest of justice so requires.” United States v. Crittenden, 46 F.4th 292, 296 (5th Cir. 2022). “[A]ny error of sufficient magnitude to require reversal on appeal is an adequate ground for granting a new trial.” United States v. Wall, 389 F.3d 457, 474 (5th Cir. 2004).
At trial, thirty witnesses testified and numerous documents were admitted into evidence. See Docs. #303, #304. The trial evidence generally falls into the categories of hospice care Medicare and Medicaid billing procedures related to hospice care, Nelson's involvement with various hospices, practices at Nelson's medical clinic, the investigation of Nelson and his practice, and the patients who received hospice care named in the relevant counts of the indictment.
David Delgado is a former criminal investigator for the Mississippi Attorney General's Medicaid Fraud Control Unit involved with investigating Nelson. Delgado testified that patients must elect to receive hospice care which, upon their election, indicates “they have given up th[e] right to be cured and they have agreed to just be treated as far as the symptoms go.” Before admitting a patient for hospice care, a hospice provider needs an election from the patient and a doctor's certification that the patient is terminally ill with six months to live. The certification must include a written statement and the physician's signature. Without a certification, a physician's order is insufficient for a hospice provider to bill Medicare.
For “at home” hospices, medical doctors are often employed as medical directors who essentially oversee all patient care and, most importantly, are responsible for certifying that a patient is terminally ill with less than six months to live. An attending physician or primary physician is “generally the physician [who] has the most knowledge about the care and history of a patient.”
Misty Day works for Qlarant, a private company contracted by the government that assists in identifying potential fraud, waste, and abuse of Medicare in seven states, including Mississippi. Without objection by Nelson, Day was qualified as an expert “to define hospice terms related to hospice and record requirements to go along with hospice regulations.”
Day testified that Medicare operates on a trust-based system and claims are paid without reviewing medical records. Before billing Medicare for hospice care, a provider should have documentation to support a terminal diagnosis, an election of benefits from the patient or proper representative, and a certification of terminal illness. Prior to 2014, an election of benefits was not required. The “main part” of the certification “is to acknowledge that the attending physician and the medical director have consulted with one another and that they are both in the understanding that they have the knowledge of this terminal illness.” Both the attending physician, if there is one, and the medical director sign the certification of terminal illness. When “two physicians are both signing the form, they are acknowledging that they are aware of the medical condition and the terminal illness and the plan for hospice.” A physician can rely upon the opinions and examinations of his nurse practitioner but “if [the doctor] is going to sign after the person, they need to make sure that the information presented is true and accurate to the best of their knowledge.”
Without objection by the government, Wendy Overstreet Gore was qualified as an expert in the hospice industry. Gore testified that two doctors are required to sign the initial certification of terminal illness. Typically, nurses would perform a “history and physical” on the patient and then the doctor would “read everything,” compare it with the written narrative on the certificate of terminal illness, and indicate his agreement that the patient was terminal. “[N]ine times out of ten the primary care [physician] never sees the patient” but signs the certification after reviewing the written narrative and patient history. The physician who wrote the narrative was the certifying physician. Based on Gore's personal experience as a hospice provider, it was not unusual for patients to die-she had nine to fifteen patients (out of approximately forty-five) die in one month.
At the government's request, Dr. Kenneth Kellough was qualified as an expert in his role as a hospice medical director.[5] In that role, Kellough would review medical records requested from a patient's primary care physician and perform his own exam to determine whether a patient was eligible for hospice care.
Nelson served as the medical director for multiple hospices including Genesis Hospice, Haven Hospice, Lion Hospice, Zion Hospice,...
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