Criminal Intent Proved by Circumstantial Evidence

36 Months in Jail For Fraudulently Taking $19.9 Million From Medicare

Defrauding the United States of America has become a popular sport and profit center for those health care providers that disposed of their moral and ethical compass. It is so easy to steal from the government that it took six years for the government to discover that fraud was happening when a single doctor represented face to face interviews with 150 patients a week.

In United States Of America v. Janice Troisi, Defendant, USCA, First Circuit, No. 16-1046, February 24, 2017 after a bench trial, Janice Troisi was convicted in 2015 both of conspiracy to commit healthcare fraud and of healthcare fraud, for her role from January 2010 forward in an extensive scheme between 2006 and 2012 to defraud Medicare by billing the program for services provided to patients falsely presented as eligible to receive them. Troisi does not dispute the role that she played in the fraudulent scheme, which involved billing the government for $27.6 million in false claims, $19.9 million of which were paid.

FACTS

On September 18, 2013, Troisi and co-defendant Michael Galatis [See ZIFL, 3/1/17)] were indicted by a grand jury in the District of Massachusetts on one count of conspiracy to commit healthcare fraud and eleven counts of substantive healthcare fraud.  The indictment alleged that Galatis, the owner of At Home VNA (“AHVNA”), a home health-services agency, and Troisi, AHVNA’s Director of Clinical Services since January 2010, had used AHVNA as a vehicle for defrauding Medicare by providing Medicare-reimbursable in-home nursing services to ineligible patients and then billing Medicare for those services based on falsified documents.

Medicare determines whether a beneficiary qualifies for coverage of home health services – and, in turn, whether and to what extent to reimburse the beneficiary’s healthcare provider for the cost of such services – based primarily on information contained in two forms submitted by the healthcare provider. The prosecution charged that the AHVNA scheme proceeded as follows. AHVNA aggressively recruited Medicare-insured individuals for in-home nursing services, for which they could not legally receive Medicare coverage, either because they were not homebound or because they were not in need of such services. Troisi instructed AHVNA’s nurses to fill out those patients’ OASIS Forms to represent, inaccurately, that the patients were incapable of caring for themselves. Troisi then personally prepared a Form 485 for each patient, populating it with whatever false information was required to obtain Medicare coverage for in-home nursing services. And AHVNA’s Medical Director, Dr. Spencer Wilking, signed the as many as 150 forms a day without reviewing their contents or even, in many cases, meeting with the patients.

Troisi and Galatis proceeded jointly to a jury trial on October 27, 2014. The district court declared a mistrial as to Troisi on November 30, 2014, after she became too ill to proceed. Troisi waived her right to a jury on retrial.

In total, the government introduced 217 documentary exhibits, including the transcripts of testimony at the Galatis trial. Its witnesses included patients linked to the substantive fraud counts, nurses who had provided care to those patients, most of those patients’ primary care providers, and Dr. Wilking. At the conclusion of the government’s case, Troisi moved for a judgment of acquittal, which was denied. In her defense, Troisi called no witnesses and introduced five exhibits. The thrust of her defense was that the government had not proved that she possessed the requisite mens rea (criminal intent) to commit the relevant crimes.

On August 5, 2015, the day after the trial ended, the district court delivered its verdict from the bench, finding Troisi guilty on all of the conspiracy and fraud counts. The court concluded that Troisi had participated in a “sophisticated scheme among the senior managers [of AHVNA] ․ to provide inaccurate information” to the government so as to secure payments, “which the [g]overnment was not obligated to make.” While “[h]er knowing and willful participation in this scheme with the intent to defraud [was] largely demonstrated circumstantially,” the court found sufficient evidence that Troisi had “manipulat[ed]. . . the staff and ․ the paperwork” with the purpose of “extracting monies that [AHVNA was] not entitled to ․ through fraud, that is, [the] misrepresentation of material facts.” The court sentenced Troisi to 36 months of imprisonment to be followed by three years of supervised release. This appeal followed.

ANALYSIS

Where the factfinder drew inferences from circumstantial evidence, the court will not second-guess its ensuing conclusions as long as (1) the inferences derive support from a plausible rendition of the record, and (2) the conclusions flow rationally from those inferences. Ultimately, the court asks whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.

A defendant violates 18 U.S.C. § 1347 if she knowingly and willfully executes a scheme intended to defraud a government health-care program and she violates 18 U.S.C. § 1349 if she engages in a conspiracy to execute such a scheme. The government may carry its burden of proof as to both offenses wholly through circumstantial evidence.

First, Troisi cannot claim that she was ignorant. She was deeply familiar with the regulatory scheme that she helped contravene. She knew what was permitted and what was not. Troisi demonstrated her familiarity with the relevant regulations in multiple conversations in 2010 and 2011 with Martha Fisk of Holyoke Health Center, who called AHVNA to express concern about the fact that all of the orders prescribing home health services to Holyoke patients had been signed by Dr. Wilking, who had not seen the patients, rather than by the patients’ primary care physicians. Troisi insisted that AHVNA’s paperwork was fine because the new “face-to-face” requirement had not yet taken effect.

Troisi also exercised total control over AHVNA’s preparation of the documentation required for Medicare reimbursement – the aspect of the scheme that directly contravened the regulations she knew so well. In fact, she oversaw AHVNA’s team of nurses, who were hired fresh out of nursing school with no experience in home health services or Medicare regulations.

Further, in exercising her control over the documentation process, Troisi instructed the nurses to put in particular information regardless of whether it was true or not. At oral argument, Troisi tried to put an innocent gloss on this behavior, explaining that she was just an “aggressive” boss and that her rules were aimed at ensuring that the nurses qualified patients for home health services she believed the patients needed. But Troisi’s “insistence” on qualifying patients for Medicare-reimbursable services creates a strong inference that she did not care whether the services served a legitimate medical purpose and that she therefore not only knew of the fraud, but actively played a role in directing it.

This evidence was sufficient to permit a reasonable factfinder to conclude, beyond a reasonable doubt, that Troisi conspired to commit, and indeed committed, healthcare fraud. The circumstances underlying each of the substantive fraud counts share the same badges of fraud that characterize the overall scheme and the First Circuit affirmed the convictions.

ZALMA OPINION

This is a perfect example of how to steal successfully from the U.S. — don’t be greedy. Had Troisi kept her theft small, had Dr. Wilking only signed 10 certificates a week instead of the impossible 150, the crime would have gone on forever. It is time the U.S. government installs software like that which American Express uses to tell me I spent money on line or that I spent more than $1,000, sufficient to advise Medicare that one doctor is submitting certificates in a number physically impossible so that criminals like Troisi and Galatis are caught in the first year of the crime instead of after $20 million stolen over six years.

ZALMA-INS-CONSULT                      © 2017 – Barry Zalma

This article and all of the blog posts on this site summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.

Mr. Zalma is the first recipient of theLEGEND-TROPHY-2 first annual Claims Magazine/ACE Legend Award.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.

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