United States v. Shah

• Decision Date: 22 July 2022
• Docket Number: 21-2581
• Citation: 43 F.4th 356
• Parties: UNITED STATES of America v. Samirkumar J. SHAH, Appellant
• Court: U.S. Court of Appeals — Third Circuit

43 F.4th 356

UNITED STATES of America

v.Samirkumar J. SHAH, Appellant

No. 21-2581

United States Court of Appeals, Third Circuit.

Submitted Under Third Circuit L.A.R. 34.1a July 8, 2022

Filed: July 22, 2022

Laura S. Irwin, Eric G. Olshan, Office of United States Attorney, 700 Grant Street, Suite 4000, Pittsburgh, PA 15219, Counsel for Appellee

Joshua S. Lowther, Lowther Walker, 101 Marietta Street, N.W., Suite 3325, Atlanta, GA 30303, Counsel for Appellant

Before: SHWARTZ, KRAUSE, and ROTH, Circuit Judges.

OPINION

SHWARTZ, Circuit Judge.

Samirkumar Shah appeals his conviction and sentence for health care fraud. Because the District Court correctly denied his motions to disqualify the United States Attorney's Office ("USAO"), for a continuance, and for a judgment of acquittal, and because his sentence is procedurally and substantively reasonable, we will affirm.

I

A

Shah practiced cardiology in multiple offices in Pennsylvania. Among other things, Shah prescribed external counterpulsion (ECP) treatment, which is designed to increase blood flow to the heart using compression cuffs around the patient's legs while they are lying down. Shah purchased ECP beds and billed insurers, including Medicaid and Medicare plans, for ECP treatment.

Medicaid and Medicare have three limitations for reimbursement of ECP treatment. First, the programs cover ECP treatment only for patients who suffer from angina (chest pain). Second, the programs will only reimburse for ECP treatment that was conducted under a physician's direct supervision. Third, the programs restrict billing for reimbursement. Specifically, a system of codes is used to identify the service rendered, and each coded service is assigned a price. ECP treatment is assigned code G0166, which is a "bundled code" because it includes companion treatments.¹ App. 197. As result, physicians who bill code G0166 may not also bill the separate codes for the companion treatments on the same day "unless they are medically necessary and delivered in a clinical setting not involving ECP therapy." S. App. 6. The ECP bed supplier provided Shah with guidelines informing him of these limitations.

Insurers audited Shah's billing and told him that he improperly billed ECP treatments by using both the G0166 code and codes for companion treatments and that the medical necessity of many of his ECP treatments was unsubstantiated. Although Shah's agreements with insurers required that he only seek reimbursement for medically necessary treatments, and he told one insurer that he instructed his billing department to remove the incorrect codes, he in fact directed his third-party billing service to continue billing "[a]ll four codes." App. 836.

In addition to ignoring insurers' directives, Shah (1) prescribed ECP for patients, including an undercover agent, who did not suffer chest pain, telling some patients that ECP treatment would make them "younger and smarter" and could help with conditions including high and low blood pressure, obesity, erectile dysfunction, and restless leg syndrome, App. 385; and (2) was "very often" not present—nor was any doctor—to supervise patients' ECP treatments, App. 457-58. Shah (1) told his staff that all patients had angina; (2) instructed staff to "beef[ ] up" patient files before insurance reviews, long after treatment was provided, App. 327; and (3) used pre-printed forms that included angina diagnoses. Notably, during an interview with the Pennsylvania Attorney General's Office, Shah stated that he reported angina diagnoses for patients who did not have that condition "[f]or reimbursement purposes." App. 1151.

B

A grand jury indicted Shah for two counts of health care fraud in violation of 18 U.S.C. § 1347.

On the first day of jury selection, Shah moved to disqualify the entire USAO and sought a continuance to conduct additional discovery.

Shah's disqualification motion arose out of his prior representation by Tina Miller, who represented Shah until June 2017, and then, ten months later, joined the USAO as a supervisory Assistant U.S. Attorney ("AUSA"). Shah argued that because Miller became a supervisor in the office prosecuting him, there was "both a conflict of interest and an appearance of a loss of impartiality." D. Ct. ECF No. 145 at 7. The District Court denied the motion, noting that it did not "see any issue of any facts demonstrating a conflict of [interest]" and emphasizing the need to avoid delaying the trial. App. 67.²

Shah also sought a continuance so he could have an expert review 350 patient files seized from his offices. The Government responded that the records had been available to him for years and thus a continuance was inappropriate. The Court denied the request for a continuance as untimely.

C

The trial commenced, and the Government presented thirty-two witnesses, including Shah's patients and employees, the ECP bed supplier, insurers, his third-party billing service, and law enforcement officers. After the government rested, Shah moved for judgment of acquittal on Count Two, which the District Court denied. The jury found Shah guilty on both counts of health care fraud.

D

The District Court held a sentencing hearing to calculate the loss to insurers from Shah's conduct. FBI Special Agent Brooklynn Riordan testified that, for each insurer, she calculated (1) the average amount Shah billed and (2) the average amount the insurer reimbursed Shah, and identified, by dividing the average amount reimbursed by the average amount billed, a reimbursement rate. She then multiplied that rate by the total billing to that insurer, which, across all insurers, yielded a total loss of $5,919,100.00. The Government recommended reducing the total loss amount by 50%, which had the effect of treating half of Shah's billing for ECP treatment and companion codes as legitimate, even though there was no evidence that he ever legitimately used those codes. The District Court accepted the loss calculation over Shah's objection.

The Court sentenced Shah to concurrent terms of 78 months' imprisonment and three years' supervised release and ordered that he pay $1,234,983.60 in restitution.

Shah appeals.

II³

A

We will address, in turn, Shah's challenges to the District Court's orders denying his motions to disqualify the entire USAO, for a continuance to conduct additional discovery, and for judgment of acquittal on Count Two.⁴

The District Court properly denied Shah's motion to disqualify the entire USAO. First, the District Court's decision was not arbitrary. We have recognized that "[a]s long as the court makes a ‘reasoned determination on the basis of a fully prepared record,’ its decision will not be deemed arbitrary." United States v. Stewart, 185 F.3d 112, 120 (3d Cir. 1999) (quoting United States v. Voigt, 89 F.3d 1050, 1075 (3d Cir. 1996) ). Here, the District Court complied with its obligations, as it heard oral argument and received written submissions from both Shah and the Government on this issue and made its decision based on a complete record, including declarations from Miller and the two AUSAs handling Shah's trial. Thus, we review the Court's ruling for abuse of discretion. See Whittaker, 268 F.3d at 194.

Second, the District Court did not abuse its discretion. Attorneys practicing before the United States District Court for the Western District of Pennsylvania must adhere to the Pennsylvania Supreme Court's Rules of Professional Conduct. See W.D. Pa. L. Civ. R. 83.3(A)(2); Pa. Const. art. V § 10. Under the Pennsylvania rules, a lawyer "currently serving as a public officer or employee ... shall not ... participate in any matter in which the lawyer participated personally and substantially while in private practice." 204 Pa. Code R. 1.11(d). While the lawyer who switches sides "is of course disqualified from participating in the case[,] ... individual rather than vicarious disqualification is the general rule." Commonwealth v. Miller, 281 Pa.Super. 392, 422 A.2d 525, 529 (1980) (quotation marks and citation omitted); see also 204 Pa. Code R. 1.11(d) cmt. (2) ("Because of the special problems raised by imputation [of a conflict of interest] within a government agency, [ Rule 1.11(d) ] does not impute the conflicts of a [government] lawyer to other associated government officers or employees, although ordinarily it will be prudent to screen such lawyers."). This is so because disqualifying an entire prosecutor's office, rather than just the conflicted attorney, would impose substantial costs on taxpayers because it would trigger the need to appoint special prosecutors each time a member of the defense bar switches sides. See, e.g., Miller, 422 A.2d at 529 ; Commonwealth v. Harris, 501 Pa. 178, 460 A.2d 747, 749 (1983) (calling such an approach "simply not viable"). Furthermore, it would not address the true concern: to be sure that "the acts of a public prosecutor have [not] actually tainted the proceedings." Harris, 460 A.2d at 749. Because actual taint must be shown, the mere "appearance of impropriety" is insufficient to support disqualification of an entire office.⁵ See id.

To avoid taint, USAOs use methods to wall off the attorney from cases in which he played a role while in practice. Disqualification of an entire USAO is required only when screening devices, aimed at ensuring side-switching counsel is in no way involved in the case giving rise to the conflict, were not used or were ineffective. United States v. Goot, 894 F.2d 231, 234-35 (7th Cir. 1990) ; see United States v. Caggiano, 660 F.2d 184, 191 (6th Cir. 1981) (holding that because an attorney was separated from all participation on matters affecting his former client, "disqualification of an entire government department ... would not be appropriate").

Here, the affidavits from Miller and the two AUSAs who tried Shah showed Miller was properly screened. Miller stated that she had "been recused and walled off from any involvement or oversight" in cases where she represented a defendant, including...