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United States v. DeHaan

United States Court of Appeals, Seventh Circuit

July 25, 2018

United States of America, Plaintiff-Appellee,
v.
Charles DeHaan, Defendant-Appellant.

          Argued February 14, 2018

          Appeal from the United States District Court for the Northern District of Illinois, Western Division. No. 14 CR 50005 - Frederick J. Kapala, Judge.

          Before Easterbrook and Rovner, Circuit Judges, and Griesbach, District Judge.[*]

          ROVNER, CIRCUIT JUDGE

         Dr. Charles DeHaan appeals the sentence he received for engaging in a scheme to defraud Medicare in violation of 18 U.S.C. § 1347. In estimating the loss attributable to DeHaan's conduct, the district court found that he was responsible for fraudulently certifying the eligibility of least 305 individuals for home health care services, resulting in wrongful billings to Medicare of nearly $2.8 million. DeHaan contends that the court's finding that he fraudulently certified 305 individuals is tainted by a legal error as to what was required to properly certify a patient as eligible for home care. He also argues that the loss figure for these individuals was inflated, as the government did not prove that the individuals in question in fact were not eligible for the services billed. Finally, because he believes that this loss amount was erroneous, DeHaan contends that the court also erred in requiring him to pay restitution in the same amount. Finding no error in the district court's conservative loss-estimation methodology, we affirm.

         I.

         During the five-year time period relevant to this case, DeHaan was a licensed family-practice physician working in the Chicago and Rockford metropolitan areas of Illinois. He was president of Housecall Physicians Group of Rockford, S.C., was affiliated with other similar agencies providing medical services to homebound patients, and served as medical director of a number of home health agencies, assisted living facilities, and hospices. He was enrolled as a provider with Medicare and as such had a unique national provider number pursuant to which he would bill Medicare for services he provided to Medicare beneficiaries.

         Among the services for which Medicare will reimburse qualified beneficiaries are home health services. In order to qualify for such services, an individual must be effectively confined to the home and must be certified as such by a physician.

         DeHaan knew that Medicare authorized payment for physician house calls and other home health services only if those services were actually provided and were medically necessary due to a patient's disease, infirmity, or impairment. DeHaan also knew that Medicare did not authorize payment for services and treatment that were not actually provided or for which the patient did not meet the criteria necessary to justify the claimed service or treatment.

         Beginning in January 2009 and continuing into January 2014, DeHaan participated in a scheme to defraud Medicare with the aim of obtaining monetary reimbursement from the Medicare program by means of materially false and fraudulent representations. The misrepresentations fell into two primary categories.

         First, DeHaan would bill Medicare at the highest levels for services to homebound patients that were ostensibly time- consuming and/or complex, when in fact he had either conducted a routine, non-complex visit with the patient (perhaps lasting no more than a few minutes), or he had not seen (or served) the patient at all on the occasion for which he was billing. We shall refer to this as the overbilling aspect of the scheme.

         Second, at the behest of home health agencies, DeHaan certified as homebound patients whom he either knew did not meet Medicare's criteria for home care or as to whom he lacked meaningful knowledge as to their health status. We shall refer to this as the fraudulent certification component of the scheme. Apropos of that aspect of the scheme, DeHaan at least twice acknowledged to one of the investigating agents that he had certified as homebound patients who did not, in fact, meet Medicare's criteria for being homebound. He added that the home health agencies would tell him what services their clients needed (and wanted, in many cases), and, in DeHaan's words, "I certify." R. 150 at 222. DeHaan questioned whether some of the patients truly qualified as homebound, but he told the agent that he could always find a reason why they needed home health services. "I will have some issues with this," he told the agent, R. 150 at 224, seemingly recognizing that some number of his certifications were of dubious legitimacy.

         Medicare will authorize payment for health services-which include such things as intermittent skilled nursing, physical therapy, speech therapy, and occupational therapy-provided that three criteria are satisfied. First, the beneficiary must in fact be homebound, meaning that his ability to leave the home is restricted due to illness or disability. Second, the beneficiary must be under the care of a physician who has created a specific plan of care for him. Third, the beneficiary's physician must complete and sign a Medicare Form 485 setting forth, among other things, the beneficiary's diagnosis, functional limitations, medications, and plan of care, along with a certification that the beneficiary is homebound, is under the physician's care, and is in need of home health services. See 42 U.S.C. § 1395n(a)(2)(A); 42 C.F.R. § 424.22(a); United States v. Echols, 574 Fed.Appx. 350, 352 (5th Cir. 2014) (non-precedential decision); R. 93 at 5-6. Periodically, a physician will need to re-certify the beneficiary as homebound in order to preserve the beneficiary's eligibility for home health services. 42 C.F.R. § 424.22(b). The certifying physician will bill Medicare for the certification or re-certification. Certification, of course, paves the way for home health agencies to provide services to the beneficiary and to bill Medicare for those services.

         DeHaan elected to plead guilty to two counts of a 23-count superseding indictment. Although DeHaan denied certain aspects of the scheme to defraud as the government had framed it, he did admit to engaging in each of the two categories of misrepresentations that we have discussed: overbilling and fraudulent certifications. As it happens, the two counts of the indictment to which DeHaan pleaded guilty both involved overbilling as we have described it. Count 9 alleged that DeHaan had sought reimbursement for an in-home visit to a beneficiary, "SJ," whom DeHaan had actually not seen on the occasion in question. And Count 21 alleged that DeHaan had sought reimbursement for an in-home visit to a beneficiary, "CH," who had died some six weeks prior to the date of the fictitious visit.

         The parties were unable to reach an agreement as to the loss resulting from DeHaan's criminal conduct, and the probation officer did not propose a loss amount in the pre-sentence report. The district court took evidence on the loss amount over the course of two days, after which the parties filed ...


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