Monday, September 6, 2010

The Patient Protection and Affordable Care Act of 2010 Reduces the Criminal Mens Rea Requirement for Healthcare Fraud and Increases Penalties Under the Federal Sentencing Guidelines

GUEST BLOGGER-BENSON WEINTRAUB

            There has been a significant uptick in the number of criminal statutes enacted by Congress that diminish or eliminate the mens rea  or “guilty mind” requirement. The Patient Protection and Affordable Care Act of 2010 (“PPACA”), Pub. L. No. 111-148, Title VI, §§ 10606, 6402, 124 Stat. 1008 (Mar. 23, 2010), is the most recent and significant example of legislative relaxation of the standard of criminal culpability in federal courts and healthcare fraud cases in particular.

            The PPACA added subsection (b) to the healthcare fraud statute, 18 U.S.C. §1347, stating: “With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” The same language was added to the Anti-Kickback Statute now codified at 42 U.S.C. 1320a-7b(h).

            Section 1347 previously contained elements of the offense underscoring that a specific intent to knowingly or willfully violate the criminal healthcare fraud statute is necessary before imposing criminal liability:

To support a conviction for health care fraud under 18 U.S.C. § 1347, the government must prove that the defendant: (1) knowingly and willfully executed, or attempted to execute, a scheme or artifice; to (2) defraud a health care benefit program or to obtain by false or fraudulent pretenses any money or property under the custody or control of a health care benefit program; (3) in connection with the delivery of or payment for health care benefits, items, or services.

United States v. Abdallah, 629 F.Supp.2d 699, 720 (S.D.Tx. 2009); United States v. Choiniere, 517 F.3d 967 (7th Cir. 2008), cert. denied, 130 S.Ct. 193 (2009).

            Moreover, the Patient Protection and Affordable Care Act of 2010 includes Congressional mandates increasing the Sentencing Guidelines in healthcare fraud cases. Under the PPACA, the Guidelines will be amended to provide a specific offense characteristic enhancing the otherwise applicable fraud Guideline by two to four additional levels according, again, to the amount of “loss.” Loss is an elusive term of art and the Guidelines authorize several methodologies for loss determination.

            Yet, the Act materially impacts the common law of sentencing’s definitions of loss and instead directs that: “… the aggregate dollar amount of fraudulent bills submitted to the Government health care program [which] shall constitute prima facie evidence of the amount of the intended loss by the defendant. Pub. L. No. 111-148 at §10606(a)(2)(B).

            In conclusion, one result of the PPACA engenders conflict between competing values of allocating criminal blameworthiness for culpable criminal conduct and reconciling social imperatives reflected by Congressional intent to deter burgeoning healthcare fraud. On balance, the legal issues that emerge from amendment of 18 U.S.C. §1347(b) and 42 U.S.C. §1320a-7b(h) will be the subject of significant litigation concerning both the guilt/innocence and penalty phases of healthcare fraud prosecutions.

(bw)

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Fraud, Prosecutions, Scholarship, Statutes | Permalink

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