Healthscript, Inc. v. StateHealthscript, Inc. v. State
- Reporters:
- , ,
- Before:
- Sullivan
Lead Opinion
ON PETITION TO TRANSFER
SULLIVAN, Justice.Defendant - Healthseript, Inc., was charged with Medicaid Fraud for allegedly overcharging Medicaid for products it provided to its customers. The trial court denied its motion to dismiss and Defendant appealed. We reverse the trial court‘s denial of Defendant‘s motion to dismiss, finding that the statute under which Defendant was charged is too vague to meet the requirements of due process.
Background
Medicaid is a joint federal-state program that pays for some health care costs of low-income people, including care in long-term care facilities such as nursing homes. The federal government pays about 62% of the costs of Medicaid in Indiana; the state pays the balance. Kendra A. Hovey & Harold A. Hovey, CQ‘s State Fact Finder 135 (2002). Defendant is a licensed pharmacy authorized to provide health-related services under Indiana‘s Medicaid program. In Medicaid parlance, Defendant is a “provider.” Between November, 1995, and June, 1997, Defendant submitted claims to and was paid by Medicaid for deliveries of sterile water to Haven Center, a long-term care facility. In 1998, the State charged Defendant under
Defendant filed a motion to dismiss, arguing that Defendant could not be charged under
Discussion
I
Reduced to its essentials, this is a case about whether a eriminal statute,
We start with the language of
[A] person who knowingly or intentionally ... files a Medicaid claim, including an electronic claim, in violation of Indiana Code § 12-15 ... commits Medicaid fraud, a Class D felony.
As such, we are required to examine
A provider who accepts payment of a claim submitted under the Medicaid program is considered to have agreed to comply with the statutes and rules governing the program. ,
The State alleged that Defendant charged between $22.50 and $25.00 per 9000 . milliliters to three other customers while charging the Medicaid program $181.00 per 9000 milliliters. According to the State, the resulting payments exceeded $50,000. It was the State‘s theory, then, that Defendant did not comply with Ind. Admin. Code tit. 405 r. 1-6-21.1(g)(8) when it overcharged the Medicaid program; that this in turn violated
Defendant attacks the charges against it with several arguments.2 Its broadest claim is that the charges must be dismissed because they violate constitutional separation of powers principles. Citing
We have held that the Legislature may constitutionally delegate rule-making powers to an administrative agency if that delegation is accompanied by sufficient standards to guide the agency in the exercise of its statutory authority. Barco Beverage Corp. v. Indiana Aleoholic Beverage Com‘n, 595 N.E.2d 250, 253-54 (Ind.1992) (quoting Taxpayers Lobby of Indiana, Inc. v. Orr, 262 Ind. 92, 103, 311 N.E.2d 814, 819 (1974)).5 Whether the delegation at issue here contravenes that principle is a question we need not decide today because we decide the case on other grounds.6
At issue here is whether the criminal statute under which Defendant was charged gave fair warning that the conduct alleged was proscribed. As set forth supra, that statute provides:
[A] person who knowingly or intentionally ... files a Medicaid claim, including an electronic claim, in violation of Indiana Code§ 12-15 ... commits Medicaid fraud, a Class D felony.
Defendant points out that while Indiana Code
The State counters that
While. we find the state‘s argument plausible, we conclude that the link between
Several venerable due process principles-variously framed as the “void for vagueness doctrine,” the “rule of lenity,” and the “fair notice requirement“bring us to this conclusion. “As generally stated, the void for vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discrimi
The penal statute at issue here,
We hold that the general reference
Conclusion
Having infeviously granted transfer, we summarily adopt the opinion of the Court of Appeals as to the issues referred to in footnotes 1 and 2 and remand this case to the trial court with directions to dismiss the information without prejudice.
SHEPARD, C.J., and DICKSON, BOEHM, and RUCKER, JJ., concur.BOEHM, J., concurs with separate opinion in which DICKSON and RUCKER, JJ., concur.
Notes
. The Court of Appeals affirmed the trial court‘s ruling on the search warrant. Healthscript, Inc. v. State, 724 N.E.2d 265, 271-73 (Ind.Ct.App.2000), rev‘d on reh‘g on other grounds, 740 N.E.2d 562 (Ind.Ct.App.2000). We summarily affirm the Court of Appeals on this issue. Ind. Appellate Rule 58(A)(2).
. Healthscript is charged with respect to covered legend drugs alleged to have been delivered between Nov. 1, 1995, and June 30, 1997. The “usual and customary charge” regulation, Ind. Admin. Code tit. 405 r. 1-6-21.1(g), was repealed July 25, 1997. See 20 Ind. Reg. 3365 (1997). In the Court of Appeals, Healthscript argued that it could not be prosecuted because the regulation had been repealed. The Court of Appeals rejected this claim. Healthscript, Inc. v. State, 724 N.E.2d 265, 270 (Ind.Ct.App.2000), rev‘d on reh‘g on other grounds, 740 N.E.2d 562 (Ind.Ct.App.2000). We summarily affirm the Court of Appeals on this point. App. R. 58(A)(2).
. - ‘‘The powers of the Government are divided into three separate departments; the Legislative, the Executive, including the Administrative, and the Judicial; and no person, charged with official duties under one of these departments, shall exercise any of the functions of another, except as in this Constitution expressly provided.”
. In Ensign, an employee of the Discount Gas Corp. was indicted on a charge of involuntary manslaughter in the death of a woman killed in an explosion on Halloween night, 1963, at the State Fairgrounds Coliseum. The basis of the indictment was that the explosion occurred after the defendant had unsafely stored three 100-pound cylinders of liquid propane at the Coliseum. A jury trial resulted in a verdict of guilty of assault and battery. 250 Ind. at 120, 235 N.E.2d at 162-63.
On appeal, our court held that defendant‘s indictment should have been dismissed because it was “not based upon the violation of any statute of the State of Indiana” but instead attempted “to charge [a] violation of certain rules and regulations of the Fire Marshall of Indiana.” This was impermissible, we said, because “[t]he legislature cannot delegate its express authority defining criminal responsibility to anyone.” 250 Ind. at 124, 235 N.E.2d at 164-65. (As to the assault and battery conviction, our court reversed on grounds that the indictment did not “allege any of the essential elements of assault and battery.” 250 Ind. at 125, 235 N.E.2d at 165.)
. As a matter of federal constitutional law, the U.S. Supreme Court recently revisited these principles in Whitman v. Am. Trucking Ass‘ns, where the court said, “In a delegation challenge, the constitutional question is whether the statute has delegated legislative power to the agency. Article I, § 1, of the Constitution vests ‘all legislative Powers herein granted ... in a Congress of the United States.’ This text permits no delegation of those powers.” 531 U.S. 457, 472, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001). See Barco, 595 N.E.2d at 254, for a brief history of federal jurisprudence in this area, including Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.E.d. 446 (1935), and Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935).
. As a general matter, the U.S. Constitution does not per se prohibit Congress from delegating to an administrative agency some re sponsibility for defining elements of a criminal offense. See Touby v. United States, 500 U.S. 160, 165, 111 S.Ct. 1752, 114 L.Ed.2d 219 (1991) (authorized drug prosecution where Attorney General authorized to specify controlled substances on a temporary basis when doing so was “necessary to avoid an imminent hazard to the public safety“); Unit ed States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563 (1911) (ruling that Congress acted within its constitutional power in delegating to the Secretary of Agriculture the power to make rules for the lawful use of forest reservations). However, the extent to which administrative rule-making in this regard should be entitled to the deferential standards of review set forth in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 866, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), has been the subject of scholarly debate. See Sanford N. Greenberg, Who Says It‘s a Crime?: Chevron Deference to Agency Interpretations of Regulatory Statutes That Create Criminal Liability, 58 U. Pitt. L.Rev. 1 (1996) (arguing that exceptions to Chevron deference when courts interpret administrative statutes that are criminally enforceable are not desirable, necessary, or easily administered); Mark D. Alexander, Note: Increased Judicial Scrutiny for the Administrative Crime, 77 Cornell L.Rev. 612 (1992) (arguing that courts reviewing challenges to criminal rule-making should consider de novo whether a particular criminal rule falls within the grant of power authorized in Congress‘s delegation); Cass R. Sunstein, Law and Administration After Chevron, 90 Colum. L.Rev. 2071, 2097-2100 (1990) (arguing that when courts interpret administrative statutes that are criminally enforceable, Chevron deference may conflict with the doctrine of lenity, or the canon of strict construction of criminal statutes).
. The Indiana Code is subdivided into 36 “titles.” Each title is further subdivided, first, into “articles,” then “chapters,” and then “sections.” The citation ”
. The Legislature itself has shown that it can be much more definite in identifying conduct for which a Medicaid provider can be held criminally responsible. See, eg.,
Concurrence Opinion
concurring.
I agree with the majority that the statutory provisions at issue here are less than models of clarity. One must sift through the many provisions of Indiana Code 12-15 to find the general requirement of
However, subsection (a)(1) is not the only relevant provision under section 7.1. Healthscript was charged in the second amended - information - with - violating Indiana Code
In my view, Healthseript‘s constitutional separation of powers argument-that delegating criminal authority to an administrative ageney is improper-becomes a non-issue if this case is viewed as a subsection (a)(2) fraudulent claim case. The administrative regulation does not define. the crime. < Rather, it is part of the background that renders Healthsecript‘s payment requests false. The prohibited con-duet of making a false statement to receive payment is prohibited by subsection (a)(2).
Although I believe a violation of 7.1(a)(2) could have been charged, I concur in the majority opinion because the information did not accomplish that. The charge in the second amended information of a violation of Indiana Code
For these reasons, I would find that the charging information did not charge a violation of (a)(2) with sufficient clarity. See Moran v. State, 477 N.E.2d 100, 104 (Ind. Ct.App.1985) (finding that a count in the indictment failed the specificity test by failing to restrict the allegations to a violation of a particular subsection of a statute). The accused has the right to require that the allegations contained in the charging instrument state the crimes charged with sufficient certainty to enable the accused to anticipate the evidence adduced against him at trial, thereby enabling him to marshal evidence in his defense. Harwei, Inc. v. State, 459 N.E.2d 52, 56 (Ind.Ct.App.1984). “The indictment must state the crime charged in direct and unmistakable terms.” Moran, 477 N.E.2d at 108-04. Any reasonable doubt as to the offense charged must be resolved in favor of the accused. Id. Simply charging Healthseript with conduct that contravenes a statute without specifying the violated subsections is insufficient specificity in the charging information.
DICKSON and RUCKER, JJ., concur.
. The State quotes subsections (a)(1), (a)(2), and (a)(5), but makes no argument focusing on either (2) or (5). Rather it contends, “This statute makes it a crime to knowingly or intentionally file a Medicaid claim in violation of Indiana Code 12-15” and “To be guilty of Medicaid Fraud, a provider must knowingly or intentionally file a claim in violation of Title 12, Article 15.” Both seem to point to a claim of a subsection (1) violation.