USA v. Divine
| Decision Date | 20 July 2010 |
| Docket Number | Case No. 3:09-cr-00008. |
| Citation | 724 F.Supp.2d 590 |
| Parties | UNITED STATES of America, v. Pamela Kay DIVINE, Defendant. |
| Court | U.S. District Court — Western District of Virginia |
OPINION TEXT STARTS HERE
C. Patrick Hogeboom, III, United States Attorneys Office, Roanoke, VA, Michele B. Brooks, Office of the Attorney General, Abingdon, VA, for United States of America.
This matter is before the Court upon the Government's request that Defendant Pamela Kay Divine be ordered to pay the Virginia Department of Medical Assistance Services (hereinafter “DMAS”) restitution in the amount of $130,157. At the sentencing hearing on January 11, 2010, the Court ordered the matter of restitution deferred for up to 90 days, and directed the parties to submit briefing on the issue. On February 8, 2010, the Government submitted its Memorandum in Support of an Order of Restitution (docket no. 64), on April 7, Defendant filed her Opposition thereto (docket no. 68), and the Court heard argument on the issue of restitution on April 12. After full consideration of the arguments presented by the parties, for the reasons set forth below, the Court will DENY the Government's request for restitution, in an accompanying Order, to follow.
Advantage Care was a business that provided home care services and respite care services to Medicaid recipients, and which had offices in Staunton, Covington, Culpeper, Harrisonburg, and Charlottesville, Virginia. 1 This business was solely owned by John Divine, who was Defendant's husband at all times relevant to the conduct at issue in these proceedings. Defendant was employed as Advantage Care's Regional Administrator, in which role she ran the daily operations of the business, including hiring and managing its workforce.
For its home care services, Advantage Care employed Personal Care Aides (hereinafter “PCAs”) to provide basic health-related services, including assisting with daily living activities, ambulation and exercises, and other household services for the Medicaid recipient, so they could remain in their home. Advantage Care was registered as a provider with DMAS, which is the state agency responsible for administering the Virginia Medicaid Program and reimbursing claims for services rendered by the PCAs. Advantage Care entered into several contractual agreements with DMAS for the provision of health-related services by PCAs (docket no. 65, ex. 2). As one term of such agreements, Advantage Care agreed to “comply with all applicable state and federal laws, as well as administrative policies and procedures of DMAS as from time to time amended.” Id. at ¶ 8.
The parties agree that one such term for reimbursement from DMAS is that the PCA must be properly trained. Specifically, the PCA must have completed a 40-hour training program using a Medicaid-approved curriculum prior to receiving a PCA Certificate, which then must be signed by a Registered Nurse. Medicaid rules prohibit the reimbursement for services rendered by untrained PCAs. As a home care provider registered and approved by Medicaid, Advantage Care trained its PCAs “in house” using the Medicaid-approved curriculum, as it was permitted to do.
However, in 2004, the Virginia Department of Health Professions (hereinafter “DHP”) received an anonymous complaint that the PCAs at Advantage Care were provided their Certificates without the mandatory 40 hours of training. No adverse action was taken in the ensuing investigation as, in part, Defendant represented that she personally audited Advantage Care records. Again in October, 2005, another complaint was filed (this time with DMAS) about Advantage Care issuing PCA Certificates to individuals without the necessary training. In response to the DMAS complaint, Co-Defendant Linda Utley McCrae (hereinafter “McCrae”), a Registered Nurse employed with Advantage Care, was directed to conduct the 40-hour training course for all untrained PCAs. Although this course did not meet the requirements of the Medicaid approved curriculum, PCA Certificates were issued to the attendees. As a result of the October 2005 DMAS complaint, DHP launched an investigation of another Registered Nurse with Advantage Care (identified as “MH” in the Statement of Facts). When Defendant was interviewed by a DHP investigator regarding the conduct of MH, Defendant protected MH and blamed the improper issuance of PCA Certificates on an administrative assistant, who was subsequently fired.
In fact, as early as 2004, it had been the practice at Advantage Care at the direction of its management to issue PCA Certificates to persons with prior medical experience, after taking a test. “Testing out” was not an approved way of obtaining a PCA Certificate, as the Medicaid regulations required the 40-hour training course. As a consequence of this improper certification process, between January of 2004 and October of 2005, six untrained and uncertified PCAs in Harrisonburg provided personal health care services to Medicaid recipients, for which Advantage Care submitted, and was reimbursed for, claims in excess of $120,000.00. 2
Defendant's plea agreement contains the following provisions with respect to the issue of restitution:
I understand restitution may be ordered, my assets may be subject to forfeiture, and fees may be imposed to pay for incarceration and supervised release.
...
I understand that, pursuant to 18 U.S.C. §§ 3663 and/or 3663A and given the fact that the amount of loss used to calculate the Sentencing Guidelines Base level is conservatively calculated, I may be required to pay restitution for the entire scope of my criminal conduct, including, but not limited to, all matters deemed as relevant conduct. However, I further understand that the Untied States will provide to the Court and recommend that I pay restitution to Medicaid for the loss caused by billing untrained Personal Care Aides at the Harrisonburg, Virginia office in 2004 and 2005. As such, I agree to make good faith efforts toward payment of all mandatory assessments, restitution and fines, with whatever means I have at my disposal. I agree failure to do so will constitute a violation of this agreement. I will execute any documents necessary to release the funds I have in any repository, bank, investment, other financial institution, or any other location in order to make partial or total payment toward the mandatory assessments, restitution and fines imposed in my case.
Plea Agreement, at 1, 4 (docket no. 51).
The Government now seeks restitution in the amount of $130,157.00. It does so on the grounds that “18 U.S.C. § 3663A(c)(1)(A)(ii) requires the award of restitution for any offense committed by fraud or deceit that results in a conviction,” and that Defendant “pleaded guilty to one count of Conspiracy, in violation of 18 U.S.C. § 371 [], thereby admitting that she had committed health care fraud or defrauded the United States.” Government's Memorandum in Support, at 4. The Government argues that Advantage Care had agreed, in its Provider's Contract with DMAS, only to bill for the services of those PCAs that had received the requisite training. Id. at 5. Because Defendant submitted claims for the services of PCAs who had not received the required training in the amount of $130,157.00, and because DMAS would not have reimbursed for these claims if it had known the services rendered were provided by untrained individuals, the Government seeks this sum in restitution. Id. at 6.
In response, Defendant argues that “[t]he Government has never contested that these PCA's actually provided care for all of the hours billed and paid,” nor has it ever “contended that any of these PCA's provided inadequate or substandard care.” Defendant's Memorandum in Opposition, at 2. Defendant admits that the practice of Advantage Care of failing to properly train PCAs may have been in violation of its Provider's Contract, but she argues that the Government has not produced evidence that it suffered an actual loss as a result. Id. at 3.
Federal courts do not possess any inherent power to enter an award of restitution, and may only do so as expressly authorized by statute. See United States v. Cohen, 459 F.3d 490, 498 (4th Cir.2006) (citing United States v. Broughton-Jones, 71 F.3d 1143, 1149 (4th Cir.1995)); United States v. Davold Real Estate P'ship, No. 5:01-cr-30064, 2004 WL 1242733, at *2 . There are two general restitution statutes that govern the award of restitution in the vast majority of criminal cases. The first is the Victim and Witness Protection Act (hereinafter “VWPA”), which provides that “when sentencing a defendant convicted of an offense under [Title 18],” the Court may order that the defendant make restitution to any victim of such offense, i.e., “a person directly and proximately harmed” as a result thereof. 18 U.S.C. § 3663(a). Under the VWPA, the Court may also order restitution “to the extent agreed to by the parties in a plea agreement.” 18 U.S.C. § 3663(a)(3). However, while the VWPA is permissive in nature, the Court is required to order restitution pursuant to the second such statute, the Mandatory Victims Restitution Act (hereinafter “MVRA”), in the following subset of cases:
... all sentencing proceedings for convictions of, or plea agreements relating to charges for, any offense-
(i) a crime of violence, as defined in section 16;
(ii) an offense against property under this title, or under section 416(a) of the Controlled Substances Act (21 U.S.C. 856(a)), including any offense committed by fraud or deceit;
(iii) an offense described in section 1365 (); and
Whether based on the statutory authority in...
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