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Univ. of South Carolina School of Law

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Thursday, May 28, 2009

Public Enemy?: Eleventh Circuit Finds No Plain Error In Business Records Ruling In Health Care Fraud Appeal

The recent opinion of the Eleventh Circuit in United States v. Hoffman-Vaile, 2009 WL 1458567 (11th Cir. 2009), raised but did not resolve an interesting question: Do the records of a private administrator that processes and reviews claims for Medicare qualify as business records under Federal Rule of Evidence 803(6) or public records under Federal Rule of Evidence 803(8)? And the reason that the question is interesting is that the classification of such records could have drastic consequences in terms of their admissibility at criminal trials.

In Hoffman-Vaile

Dr. Marsha Lynn Hoffman-Vaile [wa]s a dermatologist who practiced in Florida and regularly sought reimbursement from Medicare for surgical procedures she performed on her patients. Dr. Hoffman-Vaile submitted her Medicare claims to First Coast Service Options, a private contractor that administers the Medicare program in Florida. First Coast reviewed the claims prepared by Dr. Hoffman-Vaile and approved payments to her based on the Current Procedural Terminology Code that she identified on each claim. First Coast regularly reviewed claims submitted by physicians and code usage to detect unusual diagnosis patterns or statistical anomalies that might suggest fraudulent billing.

First Coast eventually flagged potentially fraudulent billing by Dr. Hoffman-Vaille, and she was later convicted of 44 counts of health care fraud, 44 counts of filing false claims, and one count of obstruction of justice. Those convictions were secured in part through the prosecution's introduction into evidence of reports prepared by First Coast in the processing and reviewing of Medicare claims by Dr. Hoffman-Vaille. At trial, Dr. Hoffman-Vaile did not object to the admission of these reports, which the district court deemed admissible under Federal Rule of Evidence 803(6), which provides an exception to the rule against hearsay for

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11), Rule 902(12), or a statute permitting certification, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.

After she was convicted, however, Dr. Hoffman-Vaile appealed, claiming, inter alia, that the reports actually fell under Federal Rule of Evidence 803(8), which provides an exception to the rule against hearsay for 

Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duty imposed by law as to which matters there was a duty to report, excluding, however, in criminal cases matters observed by police officers and other law enforcement personnel, or (C) in civil actions and proceedings and against the Government in criminal cases, factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness.

Specifically, Dr. Hoffman-Vaile claimed that these records fell under Federal Rule of Evidence 803(8)(B), which meant that they should have been inadmissible at her criminal trial. According to the Eleventh Circuit, however, the (main) problem for the doctor was that she did not object to the admission of the records at trial, which meant that it could only reverse for plain error under Federal Rule of Evidence 103(d). And, according to the court,

[a]ny error in the admission of the reports was not plain. First Coast is a private administrator that processes and reviews claims for Medicare, and Dr. Hoffman-Vaile cites no controlling authority about the reports of a similar private entity.

I agree with the Eleventh CIrcuit that there was no plain error by the district court, but I wonder what result the court would have reached if Dr. Hoffman-Vaile preserved the issue for appeal. My inclination is to guess that the records of a private administrator that processes and reviews claims for Medicare do not qualify as public records, but I am not aware of much case law on the issue of whether records are public or private.

-CM

http://lawprofessors.typepad.com/evidenceprof/2009/05/public-recordsus-v-hoffman-vaile----f3d------2009-wl-1458567ca112009.html

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