US v. Halper

• Decision Date: 23 April 1987
• Docket Number: No. 86 Civ. 2955 (RWS).,86 Civ. 2955 (RWS).
• Citation: 660 F. Supp. 531
• Parties: UNITED STATES of America, Plaintiff, v. Irwin HALPER, Defendant.
• Court: U.S. District Court — Southern District of New York

660 F. Supp. 531

UNITED STATES of America, Plaintiff, v. Irwin HALPER, Defendant.

No. 86 Civ. 2955 (RWS).

United States District Court, S.D. New York.

April 23, 1987.

Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City (Amy Rothstein, Asst. U.S. Atty., of counsel), for plaintiff.

Irwin Halper, pro se.

OPINION

SWEET, District Judge.

In this action brought by the United States (the "Government") against the defendant pro se Irwin Halper ("Halper") for the filing of allegedly inflated Medicare claims in violation of the False Claims Act, 31 U.S.C. §§ 3729-3731, the Government has moved for summary judgment. Because Halper is collaterally estopped from denying the facts which entitle the Government to judgment in its favor, the motion for summary judgment is granted.

The following findings and conclusions are made on the affidavit, memorandum of law, and exhibits submitted by the Government, and the letter in opposition from Halper dated January 10, 1987.

The Facts

At all times relevant to the complaint, Halper was manager of New City Medical Laboratories, Inc. ("NCML"), a corporation providing medical services to patients eligible for Medicare. Since January, 1982, providers of Medicare services have been instructed to use certain billing procedure codes on claims filed with Blue Cross and Blue Shield of Greater New York ("Blue Cross"), the fiscal intermediary of the United States Department of Health and Human Services. Blue Cross made available to each provider manuals listing the Medicare procedure code corresponding to each type of medical service and the cost Medicare would pay to providers for that service.

In addition to the procedure codes corresponding to each particular medical service, the manual specified two procedure codes to be included on Medicare claim forms for additional reimbursement to providers who had to travel to a private home, a nursing home or a Skilled Nursing Facility to perform a medical service. The "9018" procedure code was the proper code for seeking reimbursement for services performed on the first or only patient seen at such a facility. The "9019" procedure code was the proper code for seeking reimbursement for services performed on each subsequent patient seen on the same day at the same facility. According to the manuals, at all relevant times, the reimbursement allowed by Medicare for services billed under the "9018" code was either $10.00 or $12.00, and the reimbursement allowed by Medicare for services billed under the "9019" code was $3.00.

From in or about January, 1982 until in or about December, 1983, Halper submitted 65 claim forms that falsely characterized certain services performed by NCML as services reimbursable under the higher-priced "9018" procedure code rather than the "9019" code, even though they were performed not on the first or only patient but on subsequent patients at a particular facility on a particular day. Blue Cross, unaware of the foregoing circumstances, made payment on the Medicare claims at the higher "9018" rate when the claims should have been paid at the lower "9019" rate.

On July 9, 1985, Halper was convicted of 65 counts of submitting false claims in violation of 18 U.S.C. §§ 2 and 287, based on the same acts alleged in the complaint in the present action. He was sentenced to two years and a fine of $5,000.

Collateral Estoppel

The False Claims Act is violated by anyone not a member of the armed services of the United States who "knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved." 31 U.S.C. § 3729(a)(2). The fact that Halper submitted false claims to Blue Cross, the Government's fiscal intermediary, rather than directly to the Government, is of no significance. See United States ex rel. Marcus v. Hess, 317 U.S. 537, 544-45, 63 S.Ct. 379, 384-85, 87 L.Ed. 443 (1943); United States v. Bornstein, 361 F.Supp. 869, 875 (D.N.J.1973), aff'd in relevant part, 504 F.2d 368 (3d Cir.1974), rev'd on other grounds, 423 U.S. 303, 96 S.Ct. 523, 46 L.Ed.2d 514 (1976). The elements of the criminal false claims statute, 18 U.S.C. § 287, under which Halper was convicted, are identical to 31 U.S.C. § 3729(a)(2) in all relevant respects. The criminal statute makes it a crime to present to the Government "any claim upon or against the United States, or any department or agency thereof, knowing such claims to be false, fictitious or fraudulent."

In this civil case, the Government can rely on the criminal conviction obtained against Halper to establish issues which were necessarily determined by the judgment of conviction. United States v. Greenberg, 237 F.Supp. 439, 442 (S.D.N.Y. 1965). Since the conviction necessarily determined that Halper submitted claims to the Government "knowing such claims to be false, fictitious, or fraudulent," Halper cannot challenge that finding on this motion for summary judgment. See United States v. Thomas, 709 F.2d 968, 972 (5th Cir.1983) ("Because of the existence of a higher standard of proof and greater procedural protection in a criminal prosecution, a conviction under the criminal false claims statute is conclusive as to an issue arising against the criminal defendant in a subsequent civil action"); Berdick v. United States, 612 F.2d 533, 537 (Ct.Cl.1979); Sell v. United States, 336 F.2d 467, 474-75 (10th Cir.1964). Since Halper is collaterally estopped from creating a genuine issue of material fact, the Government is entitled to summary judgment under the False Claims Act.

Damages and...