Court Reinstates Guilty Verdicts In Healthcare Fraud Case

US v. Elfenbein: Elfenbein was a doctor who ran an urgent-care clinic in Maryland. When COVID hit he reconfigured the business into a drive-thru COVID testing operation, with patients being there only for a few minutes. Elfenbein billed insurance for these visits using a billing code that indicated COVID was “a condition likely to result in a high risk of morbidity without treatment” rather than a more mundane condition. For five patients, the Government alleged that Elfenbein inflated the billing code and doctored medical records to support the code. He was tried on five counts of healthcare fraud, for which the jury found him guilty. The district court, however, granted Elfenbein’s motion for acquittal after trial, holding in the alternative that he was entitled to a new trial, concluding that the Government had not proven that Elfenbein’s reading of the billing guidance in terms of the codes had been unreasonable.

On appeal, the Fourth Circuit reversed the district court’s granting of the motion of acquittal, but affirmed the grant of a new trial. The court concluded that there was sufficient evidence from which a jury, “armed with a dose of common sense,” could conclude that COVID did not have a high risk of morbidity, noting that Elfenbein himself testified that “for the vase majority of our COVID patients . . . it was very low, minimal or low risk.” The court also noted that the treatments prescribe for those who tested positive “matched his low-risk assessment.” Testimony from Elfenbein’s employees backed up that assessment. As to Elfenbein’s argument that his statements were not false because they were based on reasonable interpretations of the codes at issue, the court held that “it is the jury’s job to decide . . . which interpretation is better.” That said, the court found no abuse of discretion in the district court’s grant of a new trial, noting that while “the jury had enough evidence to convict Elfenbein . . . it got that evidence in an unusual way” – that is, largely through defense witnesses  (“at the close of the government’s case-in-chief, the jury had little of the key evidence”).