UNITED STATES of America, Plaintiff-Appellee, v. Anmy TRAN, Defendant-Appellant.
No. 14-1092.
United States Court of Appeals, Sixth Circuit.
April 27, 2015.
295
BEFORE: KEITH, COOK, and DONALD, Circuit Judges.
A jury convicted Defendant-Appellant Anmy Tran, a Michigan podiatrist, of several offenses arising from her participation in a healthcare-fraud conspiracy organized by Babubhai Patel, the owner of several pharmacies and home-healthcare companies in the greater Detroit area. Tran argues that several evidentiary rulings denied her a fair trial and challenges the procedural reasonableness of her sentence. We AFFIRM the district court‘s judgment.
I.
A jury convicted Tran of participating in the following conspiracy, summarized by a prior panel of this court:
The scheme to defraud insurers depended on the participation of physicians, pharmacists, recruiters, and patients. [Babubhai] Patel paid cash bribes to physicians to entice them to write patient prescriptions for expensive medications and controlled substances that could be billed to Medicare, Medicaid, or private insurers through the Patel pharmacies. He paid kickbacks to managers of health-related companies so that they would send patients to his pharmacies, and he employed “marketers” to recruit “patients” directly from the streets.
Pharmacists facilitated the criminal activity by charging insurers for expensive medications that were ordered from wholesale distributors and held in inventory but not dispensed to patients. These surplus medications were later returned to the supplier for credit or sold on the black market. Pharmacists also billed insurers for controlled substances that the pharmacists knew were illegally prescribed. These controlled medications included hydrocodone (Vicodin, Lortab), oxycodone (Oxycontin), alprazolam (Xanax), and codeine-infused cough syrup. When filling prescriptions, the pharmacists usually “shorted” the number of dosage units placed in the medication vials for patients, billed the insurers for the full drug quantities prescribed, and then sold the excess pills on the street.
United States v. Patel, 579 Fed.Appx. 449, 451-52 (6th Cir.2014).
Patel recruited Tran in 2007 to participate in this conspiracy by paying her $50,000. She used the money to complete the down payment of the office building that housed both her podiatry practice and Patel‘s Highland Park Pharmacy. Patel also paid $1,200 toward each month‘s mortgage payment, $10,000 to cover the building‘s 2010 tax bill, and $17,500 to Tran through various intermediaries.
In exchange, Tran prescribed many of her patients a cocktail of eight to twelve drugs: one controlled pain medication combined with several non-controlled drugs, requested by Patel and his pharmacists because of their high profit margins. These patients would then proceed to Highland Park, where Patel‘s pharmacists would dispense the full amount of controlled pain medication but only half of the non-controlled drugs. Highland Park would then bill the insurers—Medicaid, Medicare, and Blue Cross Blue Shield—for the entire prescription. Many patients forced the pharmacists to count out hydrocodone pills and other controlled substances at the counter to ensure they received the prescribed amount, though they rarely complained about not receiving the full amount of non-controlled medication. And Tran always prescribed the non-controlled medicine in the same dosage, despite some patients reporting a growing surplus.
In addition, Tran accepted patients who were recruited off of the street by other conspirators. She continued to prescribe controlled pain medication to these patients even after learning that they were known or suspected “doctor shoppers“: patients recently received the same type of controlled substance from a different doctor. She also referred a number of recruited patients to home-healthcare companies operated by Patel without conducting a proper examination, for which she received a $100 kickback for every patient approved by the insurer. Patel also paid Tran $500 for every one of her own patients referred to his home-healthcare services and who were approved by the insurer.
The district court tried Tran jointly with two of her co-conspirators. The jury convicted Tran of conspiracy to commit healthcare fraud, to distribute controlled substances, and to pay and receive healthcare kickbacks. Post-trial, the district court denied her motion for a judgment of acquittal or new trial.
At sentencing, the district court adopted the Presentence Investigation Report‘s (PSR) findings with respect to the amount of loss and drug quantity attributable to Tran. According to the PSR, Tran‘s role in the conspiracy cost the insurers a combined $4,475,193.40.1 This figure included the cost of every prescription written by Tran and filled at Highland Park ($2,343,498.99), the costs incurred by all patients referred to one of Patel‘s home-healthcare services ($289,858.50), and fifty percent of Tran‘s bills for medical services ($1,841,835.99). This resulted in an adjusted offense level of twenty-eight for the combined offenses of conspiracy to commit healthcare fraud and conspiracy to receive healthcare kickbacks. See
After incorporating the multiple-count adjustment, the district court calculated Tran‘s total offense level at thirty. See
II.
On appeal, Tran contends that the district court abused its discretion in admitting statistical evidence comparing her prescriptions to other Michigan podiatrists and testimony by an expert pharmacist that her prescriptions raised ethical “red flags.” She also challenges her guidelines range, arguing that the court clearly erred in estimating the drug quantity and amount of loss attributable to her. We discern no abuse of discretion in the evidentiary rulings and conclude that any error in calculating her guidelines range proved harmless.
A. Statistical Evidence
Tran first challenges the admission of charts and testimony showing that she prescribed more than twice as much hydrocodone as any other Michigan podiatrist and controlled substances to eighty-five percent of her Medicare patients. According to this data, she ranked first in the state for total prescription drug costs
We review evidentiary rulings for abuse of discretion. United States v. Davis, 514 F.3d 596, 611 (6th Cir.2008). “[W]hen reviewing the balancing determinations required by Rule 403, this court must maximize the probative value of the challenged evidence and minimize its potential for unfair prejudice.” United States v. Lloyd, 462 F.3d 510, 516 (6th Cir.2006); see also United States v. Layne, 192 F.3d 556, 573 (6th Cir.1999) (holding that trial courts have particularly broad discretion under Rule 403). Tran fails to meet her burden under this deferential standard.
As the government points out, this court has upheld the admission of statistical evidence under similar circumstances. See, e.g., United States v. Weinstock, 153 F.3d 272, 278 (6th Cir.1998) (upholding the use of comparative statistics in the prosecution of a podiatrist who charged insurers for unperformed medical procedures); United States v. August, 984 F.2d 705, 713 (6th Cir.1992) (upholding a doctor‘s conviction for illegal distribution based, in part, on evidence that his purchases of Schedule III cough syrup “were much greater than the purchases of the average doctor, pharmacy or hospital“).
Tran attempts to distinguish this precedent on two grounds. First, she complains that hydrocodone carries a unique stigma because it receives “an enormous amount of unfavorable publicity.” She claims that a juror might base the decision to convict on emotion, not evidence. But we see nothing unfair about any prejudice flowing from the negative publicity surrounding hydrocodone abuse; the government specifically charged Tran with illegally prescribing hydrocodone. See
Tran also compares her case to two inapposite, extra-circuit decisions. See United States v. MacKay, 715 F.3d 807 (10th Cir.2013); United States v. Jones, 570 F.2d 765 (8th Cir.1978). In MacKay, the Tenth Circuit opined that charts showing how the defendant prescribed more hydrocodone and oxycodone than any other Utah physician would have been inadmissible under Rule 403 had the defendant not opened the door at trial. 715 F.3d at 841-42. But the MacKay court specifically contrasted the use of statistical evidence to prove distribution charges with its use to prove a complex healthcare-fraud conspiracy in which doctors prescribed unnecessary or excessive amounts of drugs.
Jones is also distinguishable. In that case, the Eighth Circuit reversed a trial court‘s admission of evidence showing that the defendant authored 478 prescriptions for Schedule II drugs over a twenty-two-month period. Jones, 570 F.2d at 767. The court noted that the government introduced no evidence showing that the defendant issued any of these prescriptions without a medical reason. Id. at 769. But here, as Tran concedes, the government produced evidence that she wrote at least some prescriptions without a medical rationale. Neither these decisions nor Tran‘s publicity argument persuade us that the district court abused its considerable discretion under Rule 403.
B. Expert Testimony
Tran next challenges the expert testimony of pharmacist Dr. William Drake, arguing that it exceeded the scope of his expertise. See
On appeal, Tran stresses that “[w]hile Drake purported to offer his opinions from the perspective of a pharmacist ..., the import of [his] opinions was a judgment on the medical decisionmaking ... which underlay the issuance of [Tran‘s] prescriptions.” She insists that Drake was not a physician and, therefore, could not assess whether her prescriptions came within the scope of her practice. But Tran cites no relevant legal authority in support of this argument and it fails to persuade us that admission of this testimony amounted to an abuse of discretion.
Tran‘s trial counsel conceded that “any opinion [Drake] gives ... indicating that there should be red flags raised[ by Tran‘s prescriptions] is perfectly appropriate.” It logically follows that Drake also possessed the requisite expertise to explain why Tran‘s prescriptions raised “red flags.” Drake‘s ability to identify suspicious prescriptions flows from the rational application of his training as a pharmacist. See
C. Tran‘s Sentence
Finally, Tran challenges the calculation of her guidelines range. She contends that the government failed to prove several facts underpinning the district court‘s drug-quantity and amount-of-loss findings. Specifically, Tran disputes that every unit of hydrocodone she prescribed during the conspiracy was unlawfully distributed and that every prescription filled at Highland Park constituted loss to the defrauded insurers. We conclude that any error by the district court proved harmless.
We review drug-quantity findings for clear error. United States v. Swanberg, 370 F.3d 622, 625 (6th Cir.2004); see also
Although Tran acknowledges prescribing all 213,548 units of hydrocodone found by the district court, she maintains that “the record does not even come close to demonstrating an across-the-board lack of medical necessity” for them. But to show prejudicial error in her guidelines range, Tran would need to prove that more than half—or 113,548 units—of the district court‘s drug-quantity finding is erroneous. See
The government‘s statistical evidence showed that Tran prescribed twice as much hydrocodone to her Medicare patients as the second-ranking podiatrist in Michigan, her partner Dr. Meghan Lee. Lee refused to participate in Patel‘s conspiracy. Although she served the same community of patients, her hydrocodone prescriptions totaled half of Tran‘s, and these numbers include the prescriptions Lee renewed when covering Tran‘s patients. This evidence suggests that the difference in hydrocodone prescriptions between the doctors resulted from Tran‘s participation in the conspiracy.
Furthermore, the government proved that the bulk of Tran‘s prescriptions followed a specific pattern: a controlled pain killer—usually hydrocodone—combined with a bundle of eight to twelve expensive, non-controlled drugs. Drake testified that
The same is true for the district court‘s loss calculation of $4,475,193.40. So long as the record supports a finding of at least $1 million, Tran‘s combined offense level remains unchanged. See
As the government pressed at oral argument, the district court reasonably counted as loss at least eighty-five percent of Tran‘s Medicare prescriptions—a measure worth $1,711,499.65. As discussed above, each prescription in this subset included a controlled substance like hydrocodone, and therefore fit the fraudulent pattern identified by the government‘s witnesses. As further support for Tran‘s offense level, her patients cost Medicare $1,069,644.42 more than Lee‘s patients in prescription-drug costs from May 2010 to August 2011. Once again, the cost of Tran‘s prescriptions surpassed all other podiatrists in Michigan during this period, with Lee coming in a distant second. The documented period also accounts for less than half the time Tran participated in the conspiracy. Combined with Tran‘s apparent disregard for drug-seeking behavior in her patients receiving controlled substances, this evidence supports the finding that she wrote at least eighty-five percent of her Medicare prescriptions in furtherance of the conspiracy. And Tran offers nothing to show the medical necessity of any drug included in these prescriptions. See
With no clear error evident in at least $1,711,499.65 of the district court‘s loss finding, Tran would have received at least a sixteen-point enhancement on the fraud count, leaving her total offense level and guidelines range unaltered. Thus, any error in calculating the remainder was harmless.
III.
We AFFIRM the district court‘s judgment.