United States v. Advantage Medical Transport In

• Court: Court of Appeals for the Third Circuit
• Decided: September 12, 2018
• Docket: 17-3132
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________

No. 17-3132 _____________

UNITED STATES OF AMERICA

v.

ADVANTAGE MEDICAL TRANSPORT, INC.; SERGE SIVCHUK, Appellants ______________

Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Action Nos. 1-12-cr-00004-001 & 1-12-cr-00004-002) District Judge: Honorable Christopher C. Conner ______________

Submitted Under Third Circuit L.A.R. 34.1(a) June 18, 2018 ______________

Before: GREENAWAY, JR., RESTREPO, and BIBAS, Circuit Judges

(Opinion Filed: September 12, 2018) ______________

OPINION* ______________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. GREENAWAY, JR., Circuit Judge.

Appellants Advantage Medical Transport, Inc. (“Advantage”) and Serge Sivchuk

appeal from two separate amended judgments of conviction. Specifically, each Appellant

appeals from the District Court’s order denying their respective motions to dismiss both a

count in the indictment and all counts of the superseding information charging violations

of 18 U.S.C. § 1035.1 Appellants argue that neither the indictment nor the superseding

information charge a criminal offense based on a ruling of our Court because certain

falsified documents were not “material” pursuant to § 1035. Accordingly, they contend

that the District Court’s denial of their respective motions to dismiss should be reversed.

We disagree, and will affirm the District Court’s amended judgments of conviction.

I. Facts & Procedural Background

Sivchuk was the sole owner of Advantage, an ambulance transport services

business, and served as its president, director, and managing employee. Advantage

provided nonemergency transportation to, among others, qualified Medicare beneficiaries

who needed transport to regularly-scheduled dialysis treatment. Medicare approved and

authorized Advantage to provide these services, and provided reimbursements for

qualifying services.

1 Advantage pled and was sentenced on counts 1–14 of the superseding information, and Sivchuk pled and was sentenced on count 15 of the indictment. 2 An audit and subsequent investigation of Advantage, which were conducted by

Medicare, revealed that fourteen “trip sheets”2 had been fraudulently altered at the behest

of Sivchuk to remove references indicating that patients had been ambulatory when they

were transported by Advantage.3 A grand jury investigation revealed that Sivchuk had

told several EMTs that the original trip sheets were lost and needed to be re-written in a

manner that concealed the patients’ ambulatory functions. Some EMTs complied and

signed the re-written trip sheets; the ones that did not, however, had their signatures

forged on trip sheets Sivchuk ordered re-written. Sivchuk and another employee were

indicted in January 2012 for twenty-nine counts of health care fraud, including making

false statements relating to health care matters. The indictment also alleged that

Advantage had billed Medicare for unnecessary ambulance transports for twenty-six

patients. Subsequently, Advantage was charged with making false statements relating to

health care matters in a superseding information in April 2013.

In February 2013, Sivchuk pled guilty to a single count of making false statements

in health care matters, in violation of 18 U.S.C. § 1035. Advantage eventually pled guilty

2 A “trip sheet” is a form document that has a narrative section for emergency medical technicians (“EMTs”) to complete at each ambulance transport. Trip sheets, among other things, identify the patients, date and time of transport, physical condition and ambulatory abilities of the patient, and any other concerns or relevant observations. 3 The fraud was intended to remove references that the patients were “able to walk, stand, or otherwise move on their own.” United States v. Advantage Med. Transp., Inc. (Advantage I), 698 F. App’x 680, 683 (3d Cir. 2017) (not precedential). Hence, rendering them eligible for reimbursement. 3 to fourteen counts of the same offense in April 2013. After the pleas, a presentence

investigation report (“PSR”) was prepared for sentencing. The PSR determined that

Medicare’s financial loss from the scheme was $740,300 for both Advantage and

Sivchuk, resulting in a Guidelines range of thirty to thirty-seven months in prison and a

fine ranging from $6,000 to $1,480,620 for Sivchuk, and a fine ranging from $592,248

and $1,1184,496 for Advantage. Advantage and Sivchuk objected, and the District

Court, after determining that five of the twenty-six patients would be considered in the

loss calculation, ultimately sentenced Sivchuk to twenty-four months’ imprisonment,

with a $300,000 fine, and fined Advantage $250,000.

Advantage and Sivchuk appealed their sentences to this Court. See United States

v. Advantage Med. Transp., Inc. (Advantage I), 698 F. App’x 680 (3d Cir. 2017) (not

precedential). They argued, inter alia, that the District Court had improperly calculated

the losses attributed to them by including three of the five patients, who were

categorically permitted to receive such services and should have been excluded from the

calculation because their treatment was medically necessary. See id. at 686. The panel

agreed, and vacated Sivchuk’s sentence and remanded to the District Court for it to

recalculate Medicare’s loss and adjust the sentence. Id. at 689. The panel held that the

three patients’ “transports satisfied the regulation [used to determine Medicare’s loss] in

effect at the time they occurred,” id. at 686, and acknowledged that “the plain language of

the regulation, as written at the time Advantage transported these [patients], required

4 nothing more than a physician’s certification that the transport was medically necessary.

Advantage did not have to second guess these certifications as long as they were legally

obtained,” id. at 687. The panel concluded that “the regulation can be plainly read to say

that, where the transportation service was scheduled, repetitive, and the doctor’s

certification addressed the beneficiary’s medical need for such transport, further inquiry

was not called for.” Id.

After remand, the Government conceded that the remaining patients whose

transports were included in the District Court’s loss calculation held valid certificates of

medical necessity (“CMN”), which, under the panel’s reasoning, supported Appellants’

claim for reimbursement. Accordingly, Sivchuk and Advantage filed motions to dismiss

the indictment and superseding information, arguing that the false statements admitted to

were not “material” under the statute. After full briefing, the District Court denied the

motions, and resentenced Sivchuk to time served, a $1,000 fine, and ordered him and

Advantage to pay $2,712.12 in restitution. Advantage was also assessed a fine of $6,300.

This timely appeal followed.

II. Jurisdiction

The District Court had jurisdiction arising under 18 U.S.C. § 3231. We have

jurisdiction pursuant to 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291.

This Court employs a mixed standard of review when reviewing a motion to

dismiss an indictment. See United States v. Menendez, 831 F.3d 155, 164 (3d Cir. 2016).

5 As such, “[w]e review the District Court’s legal conclusions de novo and its factual

determinations, including its findings about the contents and purposes of the acts alleged

in the Indictment, for clear error.” Id.

III. Discussion

Advantage and Sivchuk contend that the District Court erred in denying their

motions to dismiss the indictment and superseding information. According to them, the

charging documents failed to allege a criminal offense under § 1035 because “the

statements contained in the . . . trip sheets” and their “efforts to conceal the ambulatory

abilities of the beneficiaries, while false and misleading, were not ‘material’ in

determining the existence of medical necessity for the transports or in Medicare’s

corresponding obligation to cover the transports.” Adv. Br. 14.

Section 1035(a) provides:

Whoever, in any matter involving a health care benefit program, knowingly and willfully-- (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or

(2) makes any materially false, fictitious, or fraudulent statements or representations, or makes or uses any materially false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry,

. . . shall be fined . . . or imprisoned[.]

The standard for “materiality” is well settled. “A fact is ‘material’ if it has ‘a

natural tendency to influence, or [is] capable of influencing, the decision of the 6 decisionmaking body to which it was addressed.’” United States v. McLaughlin, 386

F.3d 547, 553 (3d Cir. 2004) (quoting United States v. Gaudin, 515 U.S. 506, 509

(1995)). Likewise, a statement may be material even if no agency actually relied on the

statement in making a decision. See, e.g., In re Cohn, 54 F.3d 1108, 1114 (3d Cir. 1995).

The inquiry, then, “is whether the test for ‘materiality’ necessarily requires that a false

statement be capable of influencing an actual, particular decision of the agency at issue,

or whether the test requires only that a statement be of a type that would naturally tend to

influence a reasonable decisionmaking agency in the abstract.” United States v. McBane,

433 F.3d 344, 350 (3d Cir. 2005) (emphasis in original).

Although the false statements were not material for loss calculation, see

Advantage I, 698 F. App’x at 686–87, they were nonetheless material to a myriad of other

government interests, such as, inter alia, corroborating contemporaneous ambulatory

capabilities, preventing fraudulent transactions, verifying independent medical

assessments and investigations, sentencing, see id. at 689–92, and maintaining accurate

medical records. We therefore agree with the Government’s contention that the false

statements here are material because they are of the type that would naturally tend to

influence Medicare’s decisionmaking authority when issuing reimbursements. See

McBane, 433 F.3d at 350 (recognizing that “materiality” requires a false statement

capable of influencing a reasonable decisionmaking body).

7 Appellants also assert that Advantage I makes the indictment and superseding

information deficient because it forecloses reliance on the veracity of the trip sheets at

issue, and the charging documents do not allege that the falsified trip sheets influenced

physicians’ assessments related to the issuances of CMNs.

Counts 15 through 28 of the indictment4 focused on Sivchuk’s efforts to deceive

Medicare and its contractor by making materially false statements related to health care

payments with “re-written and forged ambulance Trip Sheets . . . in order to conceal the

fact the patients were ambulatory.” App. 81. Advantage was later charged with making

false statements in violation of § 1035 through superseding information. Specifically, the

indictment and superseding information charged that, “[o]n or about September 28,

2010,” App. 80, 93, Sivchuk and Advantage:

did, in a matter involving a health care benefit program, knowingly and willfully falsify, conceal, and cover up by trick, scheme, and device a material fact, and did make and cause to be made, materially false, fictitious, and fraudulent statements, and did knowingly and willfully make and use, and cause to be made and used materially false writings and documents knowing same to contain materially false, fictitious, and fraudulent statements and entries, in connection with the delivery of and payment for health care benefits, items, and services, in that the . . . re-written and forged ambulance Trip Sheets were caused to be created by the defendants in order to conceal the fact the patients were ambulatory, and then were submitted to Medicare’s contractor (Highmark) in response to

4 Only count 15 of the indictment is at issue regarding Sivchuk’s culpability. 8 a pre-payment review in support of the defendants’ fraudulent claims for ambulance transport services[.]5

App. 81 (footnote added); see App. 93–94.

“[A]n indictment is facially sufficient if it (1) contains the elements of the offense

intended to be charged, (2) sufficiently apprises the defendant of what he must be

prepared to meet, and (3) allows the defendant to show with accuracy to what extent he

may plead a former acquittal or conviction in the event of a subsequent prosecution.”

United States v. Stevenson, 832 F.3d 412, 423 (3d Cir. 2016) (quoting United States v.

Huet, 665 F.3d 588, 595 (3d Cir. 2012)). It is also well settled that “no greater specificity

than the statutory language is required so long as there is sufficient factual orientation to

permit a defendant to prepare his defense and invoke double jeopardy.” Id. at 424

(quoting Huet, 665 F.3d at 595). Accordingly, an indictment should be upheld “unless it

is so defective that it does not, by any reasonable construction, charge an offense.”

United States v. Willis, 844 F.3d 155, 162 (3d Cir. 2016) (quoting United States v. Vitillo,

490 F.3d 314, 324 (3d Cir. 2007)).

We conclude that the indictment and the superseding information adequately

alleged an offense in violation of § 1035. As noted above, the charging documents stated

that Sivchuk and Advantage made materially false statements by fraudulently altering trip

sheets in order to deceive Medicare into issuing reimbursements. In so doing, the

5 The individuals in the indictment and superseding information reflect the dates various violations occurred based on the predicate facts set forth. 9 charging documents adequately informed Appellants of the statute that was alleged to be

violated, listed the elements of a violation under § 1035, and specified the time period

during which the violations transpired. See Huet, 665 F.3d at 595 (stating indictment is

generally facially sufficient when “it informs the defendant of the statute he is charged

with violating, lists the elements . . . under the statute, and specifies the time period”

when violations occurred). Thus, the District Court properly denied Appellants’

respective motions.6

IV. Conclusion

For the foregoing reasons, we shall affirm the District Court’s amended judgments

of conviction.

6 Because we conclude that the indictment and superseding information sufficiently charged Sivchuk and Advantage of a crime in violation of § 1035, we need not address their alternative argument involving a “change in the law.” 10