US v. Lahue

Decision Date17 August 2001
Docket NumberNos. 99-3344,99-3352,99-3347,s. 99-3344
Citation261 F.3d 993
Parties(10th Cir. 2001) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. ROBERT C. LAHUE, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. DAN ANDERSON, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. RONALD H. LAHUE, Defendant-Appellant. THE AMERICAN HOSPITAL ASSOCIATION; FEDERATION OF AMERICAN HEALTH SYSTEMS; ASSOCIATION OF AMERICAN MEDICAL COLLEGES; AMERICAN OSTEOPATHIC ASSOCIATION; MISSOURI HOSPITAL ASSOCIATION; NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS, Amici Curiae
CourtU.S. Court of Appeals — Tenth Circuit

Appeal from the United States District Court for the District of Kansas (D.C. Nos. 98-CR-20030-03, 98-CR-20030-01, 98-CR-20030-04) [Copyrighted Material Omitted] Tanya J. Treadway; Jackie N. Williams, United States Attorney, Topeka, KS; William H. Bowne, Department of Justice, Washington, DC, with her on the brief, Assistant United States Attorney, Topeka, KS, for Plaintiff-Appellee.

Bruce C. Houdek of Bruce C. Houdek, P.C., Kansas City, MO, for Defendant-Appellant Robert C. LaHue.

James R. Wyrsch; Keith E. Drill, Jacqueline A. Cook, and Cheryl A. Pilate with him on the briefs, of Wyrsch Hobbs Mirakian & Lee, P.C., Kansas City, MO, for Defendant-Appellant Dan Anderson.

Jeffrey D. Morris of Bryan Cave LLP, Overland Park, Kansas, for Defendant-Appellant Ronald H. LaHue.

Thomas S. Crane, Tracy A. Minder, Jeffrey D. Clements and Theresa M. Claffey, of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, MA, filed an amici curiae brief for The American Hospital Association, Federation of American Health Systems, Association of American Medical Colleges, and American Osteopathic Association, Missouri Hospital Association.

Vicki Mandell-King, National Association of Criminal Defense Lawyers, Denver, Colorado; Barbara E. Bergman, National Association of Criminal Defense Lawyers, Albuquerque, NM; Philip C. Zimmerman of Holme Roberts & Owen LLP, Denver, CO, filed an amicus curiae brief for National Association of Criminal Defense Lawyers.

Before ANDERSON, BALDOCK and BRORBY, Circuit Judges.

ORDER

BRORBY, Circuit Judge.

These matters are before the court on appellant's petitions for panel rehearing and for rehearing en banc. The petitions for rehearing are denied.

The petitions for rehearing en banc were transmitted to all of the judges of teh court who are in regular active service as required by Fed.R.App.P.35. As no member of the panel and no judge in regular active service on the court requested that the court be polled, those petitions are also denied.

A revised panel opinion is attached to this order.

OPINION

Defendants Dan Anderson, Dr. Robert LaHue, and Dr. Ronald LaHue were convicted by a jury for violations of the Medicare Antikickback Act ("Act"), 42 U.S.C. 1320a-7b(b), which criminalizes any remuneration knowingly and willfully offered, paid, solicited, or received in exchange for Medicare or Medicaid patient referrals, and violation of the conspiracy statute, 18 U.S.C. 371. See United States v. Anderson, 85 F. Supp. 2d 1047, 1053 (D. Kan. 1999). In ruling on defendants' objections during trial and denying their motions for a new trial, the district court concluded: (1) the jury instructions on the Act correctly utilized the "at least in part" or "one purpose" standard; (2) Rule 801(d)(2)(E) of the Federal Rules of Evidence contemplates statements made pursuant to a lawful common plan, which justified the court's admission of over sixty documents under the rule; (3) two variances between the indictment and the evidence at trial did not prejudice defendants' right to a fair trial; and (4) it correctly denied defendants' request to provide judicial immunity to selected witnesses in light of this circuit's case law and no indication the government engaged in a deliberate attempt to distort the fact-finding process. See Anderson, 85 F. Supp. at 1069-72, 1074-75, 1079-81. We have jurisdiction pursuant to 28 U.S.C. 1291 and affirm.

I. Background1

As a guide, the individuals discussed in this opinion can be broken down into three groups. First, osteopathic physicians Robert and Ronald LaHue ("the LaHues") served as the principals in Blue Valley Medical Group ("Blue Valley"), a specialized medical practice providing care to patients in nursing homes and other residential care facilities. See McClatchey, 217 F.3d at 826-27; Anderson, 85 F. Supp. 2d at 1052. Second, Baptist Medical Center ("Baptist"), a Kansas City, Missouri hospital, employed:

Anderson, Dan (President, Chief Executive Officer),

Eckard, Tom (Director of Geriatric Services),

Flynn, Dixie (Director of Geriatric and Gerontology Services),

Grim, Sarah (Director of Alternative Care Services),

Grimes, Deborah (Director of Geriatric Services),

Keel, Ronald (Vice President),

McClatchey, Dennis (Senior Vice President, Chief Operating Officer),

McGrath, Kevin (Vice President),

Probst, Gerard (Chief Financial Officer)

See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1052, 1054-57. Third, attorneys Ruth Lehr and Mark Thompson represented Baptist at various times during the course of the alleged conspiracy. See McClatchey, 217 F.3d at 827-28; Anderson, 85 F. Supp. 2d at 1052.

In the early 1980s, the LaHues were part-time faculty members at University Hospital, where they referred, admitted, and treated their patients. See Anderson, 85 F. Supp. 2d at 1053. In 1984, the LaHues sought an increase in salary from University Hospital in return for their continued patient referrals, in light of a competing offer from Baptist for $120,000 to $140,000 per year for the same patient referrals. See id. at 1054. University Hospital declined their request. See id.

In 1985, Baptist entered into a contract ("1985 contract") with the LaHues making them "Co-Directors of Gerontology Services." McClatchey, 217 F.3d at 827; see Anderson, 85 F. Supp. 2d at 1054. By this time, the LaHues had approximately 3,500 patients in the Kansas City metropolitan area and a correlatively large number of hospital referrals. See Anderson, 85 F. Supp. 2d at 1054-55. Mr. Probst testified the negotiations were "backwards"--establishing the fee first and only then agreeing to the services the LaHues would provide in return--and, from his and Messrs. Anderson, McClatchey, and Keel's perspective, were grounded in the hospital receiving patient referrals.2 McClatchey, 217 F.3d at 827. Mr. Probst described the resulting arrangement as unlike any he had seen in twenty years, and one with "the highest request for an annual consulting fee that I had experienced or had been involved with."

The arrangement evolved into a consulting contract in 1986 between Baptist and the LaHues ("1986 agreement"). See Anderson, 85 F. Supp. 2d at 1055-56. The 1986 agreement stated Baptist "desires to obtain the professional services of the [LaHues] to assist it and its affiliate organizations in the development and maintenance of a comprehensive Geriatrics Program, including medical education of health care professionals, quality of care standards, and philosophical and promotional matters relating to the care of the aged." The LaHues' duties under the 1986 agreement included: (1) clinical instruction, training and information to Baptist's professional staff, including the Adult Health Care Services Clinic ("Clinic"), Emergency Services, Social Services, the medical staff in general, and the hospital administration; (2) instruction and training to the family practice residents and medical students; (3) consultation relating to the development of geriatrics programs and the expansion and utilization of Baptist's services for the aged; and (4) assisting in the completion of applications or reviewing patient care data for grants and studies relating to the medical care and institutional treatment of the aged.

Pursuant to the 1985 contract and the 1986 agreement, Baptist paid $75,000 annually to each of the LaHues from 1985 to 1993, with the exception of 1990 when the LaHues each received $68,750. See McClatchey, 217 F.3d at 827 & n.2; Anderson, 85 F. Supp. 2d at 1054.3 Mr. Anderson directed those payments. See Anderson, 85 F. Supp. 2d at 1054. When the payments began, Blue Valley referred massive numbers of patients to Baptist, with a corresponding halt in referrals to University Hospital. See Anderson, 85 F. Supp. 2d at 1062. Blue Valley referred 8-10% of Baptist's hospital admissions and over 90% of the out-patient volume in its Clinic, which made it Baptist's largest referral source.

Ms. Grim, Baptist's Director of Alternative Care Services from 1984 to 1985, testified that Mr. Anderson: (1) made it clear to her the Baptist-Blue Valley relationship was a business deal in which Baptist would pay money to Blue Valley in return for patient referrals; and (2) told her he was very protective of the Baptist-Blue Valley relationship, because, in her words, Baptist was "going to get patients. It was about occupancy." Ms. Grimes, Baptist's Director of Geriatric Services from approximately 1986 to 1988, testified she was not aware of the 1985 contract, which purportedly made the LaHues Co-Directors of Gerontology Services.

In the summer of 1985, the LaHues approached Mr. Anderson for help in managing their practice. See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1055, 1064. Mr. Anderson placed one of Baptist's employees, Thomas Eckard,4 with Blue Valley soon thereafter, but kept him on the Baptist payroll. See McClatchey, 217 F.3d at 827; Anderson, 85 F. Supp. 2d at 1055. "Although [Mr.] Eckard's official title was Director of Geriatric Services for Baptist, [he] worked at [Blue Valley] and effectively acted as [Blue Valley]'s manager." McClatchey, 217 F.3d at 827.

Based on his discussions with Messrs. Anderson and McClatchey, and others, Mr. Eckard understood his primary job responsibility was to maintain Baptist's relationship with Blue...

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