Rubin v. Garvin

544 F.3d 461, 2008 U.S. App. LEXIS 20434, 2008 WL 4378396
Court of Appeals for the Second Circuit·Decided September 29, 2008·No. Docket 06-1614-pr·Published·Cited by 42 cases

Opinion

*463 FEINBERG, Circuit Judge:

In 1999, Petitioner Daniel Rubin was convicted in New York Supreme Court, Albany County, of one count of second-degree grand larceny and eight counts of first-degree offering a false instrument for filing, based on evidence that he and his home health care agency knowingly overcharged New York State for Medicaid reimbursements. Now, some nine years later, we are faced with Rubin’s appeal from a decision of the United States District Court for the Northern District of New York (Mordue, Chief Judge) insofar as it denied his petition for habeas corpus as to seven of the nine counts of conviction. He argues that his conviction should be overturned because a regulation underlying both the grand larceny and false instrument counts, the so-called “public charge” regulation, N.Y. Comp.Codes R. & Regs, tit. 18, § 505.14(h)(7)(ii)(a)(l), is unconstitutionally vague. Because we disagree, as explained below, the judgment of the district court is affirmed.

I. BACKGROUND 1

A. Parties and Applicable Regulations Rubin was the founder and president of Allstate Home Care, Inc. (“Allstate”), a provider of home health care services with three offices and about 200 employees in Dutchess County, New York. Medicaid paid for services for the majority of Allstate’s clients.

Medicaid, a program that finances health care for the poor, is jointly funded by the state and federal governments but run by the states individually. See Conn. Dep’t of Soc. Servs. v. Leavitt, 428 F.3d 138, 141 (2d Cir.2005). New York’s Medicaid program was administered until September 1996 by the New York State Department of Social Services (“DSS”), and thereafter by the New York State Department of Health. 2

New York State has promulgated detailed regulations that govern Medicaid. One such regulation, concerning payment rates for providers of personal care services that have cost experience (such as Allstate), states:

(h) Payment.
(7) This paragraph sets forth the methodology by which the department will determine MA [medical assistance] payment rates for personal care services providers that have contracts with social services districts for any rate year that begins on or after January 1,1994.
(ii) Determination of payment rate.
(a) Providers with cost experience.
(2 ) Medical assistance payments to personal care services providers for any rate year beginning on or after January 1, 1994, are made at the lower of the following rates:
(i) the rate the provider charges the general public for personal care services; or
(ii) the rate determined by the department in accordance with [a method that accounts for the provider’s costs].

N.Y. Comp.Codes R. & Regs. tit. 18, § 505.14(h)(7)(ii)(a)(l). We follow the parties in calling this provision the “public charge” regulation. The public charge regulation appears in a section of the Med *464 icaid regulations that governs DSS departmental procedures.

Another provision, which the parties call the “unacceptable practices” regulation, states:

(b) Conduct included. An unacceptable practice is conduct which constitutes fraud or abuse and includes....
(1) False claims.
(i) Submitting, or causing to be submitted, a claim or claims for:
(d) amounts substantially in excess of the customary charges or costs to the general public.

Id. § 515.2(b)(l)(i)(d).

Rubin and Allstate were indicted in March 1998. 3 Rubin was charged with one count of second-degree grand larceny (Count One) and six counts of first-degree filing of a false instrument (Counts Two through Seven), for submitting claims that he falsely certified were in compliance with federal and state laws and regulations; and two more counts of first-degree filing of a false instrument (Counts Eight and Nine), for submitting false cost reports. 4 After Rubin requested a bill of particulars, the state identified two regulations with which it alleged Rubin had falsely certified compliance: the public charge regulation and the unacceptable practices regulation.

Rubin was tried before a jury in Supreme Court, Albany County, in March 1999. The case lasted two weeks and featured 22 witnesses.

B. Evidence at Trial

As part of its participation in Medicaid, Allstate submitted annual reports to DSS detailing various business costs and other figures. Allstate reported to DSS that its charge to the general public for “Level II” personal care services was $13.50 per hour in 1993 and $15.25 per hour in 1994 and 1995. 5 DSS used data provided by Allstate about prior years’ costs to set its Medicaid reimbursement rates for upcoming years: $13.35 per hour for individual Level II clients in 1994, $15.02 in 1995, and $14.79 in 1996. Allstate, like other providers, was told that it could request that its reimbursement rate be adjusted downward if it wanted to charge the public a lower rate. Letters mailed to Rubin in 1994 and 1995 that accompanied DSS’s newly calculated reimbursement rates also stated, “Medicaid regulations preclude payment in excess of the charge made to the general public for personal care services.”

Several former Allstate employees testified that Rubin was in charge of day-today operations and decisionmaking at Allstate. In particular, many of these employees said that Rubin was responsible for determining or approving rates for personal care services, and that he had detailed command of the business’s billing and finances. For instance, both Debbie Dubois, who worked in payroll and accounts receivable, and former accounting manager Susan Malavet testified that Rubin reviewed all Medicaid remittance statements and approved payment of all *465 bills. Rubin’s administrative assistant, Elizabeth Fernandes, testified that he could quote Medicaid’s rates off the top of his head.

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Rubin v. Garvin, 544 F.3d 461, 2008 U.S. App. LEXIS 20434, 2008 WL 4378396 (2d Cir. 2008).

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