United States v. Arshad

325 F. Supp. 3d 695
CourtDistrict Court, E.D. Louisiana
DecidedJuly 2, 2018
DocketCRIMINAL ACTION NO. 18-32
StatusPublished

This text of 325 F. Supp. 3d 695 (United States v. Arshad) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Arshad, 325 F. Supp. 3d 695 (E.D. La. 2018).

Opinion

SUSIE MORGAN, U.S. DISTRICT COURT JUDGE

This is a criminal action stemming from an alleged scheme to commit healthcare fraud and to pay and receive illegal healthcare kickbacks. Defendants Dr. Muhammad Kaleem Arshad, Dr. Padmini Nagaraj, and Mr. Joseph A. Haynes have moved to dismiss the Indictment.1 The United States opposes the motion.2 The questions presented are two-fold. First, the Court must determine whether the Indictment must be dismissed for failing to state an offense.3 If not, the Court must determine whether the Indictment should nevertheless be dismissed for alleged misstatements of law before the grand jury.4 Having held an oral hearing on the motion, the Court is ready to rule.5 For the reasons that follow, the motion is DENIED in its entirety.

BACKGROUND

Defendants were indicted by a federal grand jury on February 8, 2018 for ten counts of health care fraud.6 The Indictment alleges that, beginning around September 2010 and continuing through in or around April 2015, Defendants knowingly and willfully engaged in a scheme to fraudulently bill Medicare for home health care services in exchange for bribes and kickbacks.7 According to the Indictment, Defendants executed the conspiracy by:

(a) referring home health care that was not medically necessary for psychiatric patients who were not homebound so that [Home Health Agencies ("HHAs") ], ... could submit false and fraudulent claims to Medicare;
(b) receiving kickbacks and bribes to refer such services to HHAs ...;
(c) concealing the receipt of kickbacks and bribes, and the submission of false and fraudulent claims to Medicare; and
(d) diverting proceeds of the fraud for the personal use and benefits of the defendants and their co-conspirators.8

*698Specifically, the Government alleges Defendants Mr. Haynes, Dr. Arshad, and Dr. Nagaraj worked together at "Company A," which owned and operated a number of behavioral healthcare facilities in Louisiana.9 Company A provided, inter alia , outpatient psychiatric services to mentally ill Medicare beneficiaries.10

The Indictment alleges Defendant Mr. Haynes served as a marketer for Company A.11 Kim Ricard, a co-conspirator identified in the Indictment, recruited Medicare beneficiaries to HHAs.12 These HHAs would pay Ms. Ricard for each Medicare patient she referred to them.13 Mr. Haynes allegedly had access to Company A's patients and their Medicare information. The Indictment alleges that, using this information, Mr. Haynes worked with Ms. Ricard to procure beneficiaries for the HHAs.14

Ms. Ricard and Mr. Haynes allegedly executed the conspiracy with the help of Defendants Dr. Arshad and Dr. Nagaraj, both of whom were psychiatrists at Company A with the authority to refer patients to HHAs.15 According to the Indictment, Mr. Haynes brokered arrangements between Dr. Arshad and Dr. Nagaraj and the local HHAs,16 whereby Defendants would receive a kickback for each patient they referred to home health. The Indictment alleges Defendants would refer patients who did not require home health services to HHAs and would order those patients to undergo medically unnecessary treatment. Defendants allegedly received kickbacks by posing as medical directors for the home health clinics.

The Indictment alleges Dr. Arshad and Dr. Nagaraj referred Company A's beneficiaries to home health care, even though the doctors knew that the beneficiaries did not qualify for the services.17 Finally, the Indictment alleges Defendants made home health care referrals knowing that the HHAs would provide medically unnecessary home health services to these Medicare beneficiaries and ultimately submit claims for reimbursement to Medicare, the proceeds of which would then be distributed to Defendants.18

The first six counts of the Indictment allege Defendants Dr. Arshad and Dr. Nagaraj committed fraud when they falsely certified patients for medically unnecessary home health care in violation of 18 U.S.C. §§ 1347 and 2. Counts Seven through Ten charge all three Defendants with soliciting and receiving kickbacks and bribes in exchange for referring Medicare patients to home health in violation of 42 U.S.C. §§ 1320a-7b(b)(1)(A)-(B) and 18 U.S.C. § 371.

DISCUSSION

The arguments for dismissal are predicated on an allegedly erroneous definition *699of "homebound," which Defendants contend was "incorporated into each and every count" of the Indictment.19 Specifically, Defendants point to Section (A)(6) of Count 1, wherein the Indictment states "a patient qualified for home health care benefits only if: the patient was confined to the home, also referred to as 'homebound' ";20 and Section (A)(9) of Count 1, wherein the Indictment states "the basic requirement that a physician certify that a beneficiary was confined to the home or was homebound was a continuing requirement for a Medicare beneficiary to receive home health care benefits."21 According to Defendants, these statements are legally erroneous, as the Medicare Act specifically provides that:

While an individual does not have to be bedridden to be considered "confined to his home", the condition of the individual should be such that there exists a normal inability to leave home and that leaving home requires a considerable and taxing effort by the individual. Any absence of an individual from the home attributable to the need to receive health care treatment, including regular absences for the purpose of participating in therapeutic, psychosocial, or medical treatment in an adult day-care program that is licensed or certified by a State, or accredited, to furnish adult day-care services in the State shall not disqualify an individual from being considered to be "confined to his home". Any other absence of an individual from the home shall not so disqualify an individual if the absence is of infrequent or of relatively short duration.22

Thus, according to Defendants, because "beneficiaries need not be 'bedridden' " to be "considered 'confined to the home' " and leaving the home "for short durations" does not disqualify a beneficiary for homebound services, the Indictment's definition of "homebound" is materially false.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

United States v. Gaytan
74 F.3d 545 (Fifth Circuit, 1996)
Izen v. Catalina
256 F.3d 324 (Fifth Circuit, 2001)
Pittsburgh Plate Glass Co. v. United States
360 U.S. 395 (Supreme Court, 1959)
Douglas Oil Co. of Cal. v. Petrol Stops Northwest
441 U.S. 211 (Supreme Court, 1979)
United States v. Mechanik
475 U.S. 66 (Supreme Court, 1986)
Bank of Nova Scotia v. United States
487 U.S. 250 (Supreme Court, 1988)
United States v. R. Enterprises, Inc.
498 U.S. 292 (Supreme Court, 1991)
United States v. Williams
504 U.S. 36 (Supreme Court, 1992)
United States v. Resendiz-Ponce
549 U.S. 102 (Supreme Court, 2007)
In Re Grand Jury Testimony. Appeal of John Doe
832 F.2d 60 (Fifth Circuit, 1987)
United States v. Eusebio Miramontez, Jr.
995 F.2d 56 (Fifth Circuit, 1993)
United States v. Kenny Hogue and Jesse Meeks
132 F.3d 1087 (Fifth Circuit, 1998)
United States v. Darrell H. Strouse James R. Willis
286 F.3d 767 (Fifth Circuit, 2002)
United States v. Stein
429 F. Supp. 2d 633 (S.D. New York, 2006)
United States v. Umawa Oke Imo
739 F.3d 226 (Fifth Circuit, 2014)
United States v. Ebolose Eghobor
812 F.3d 352 (Fifth Circuit, 2015)
United States v. Pramela Ganji
880 F.3d 760 (Fifth Circuit, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
325 F. Supp. 3d 695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-arshad-laed-2018.