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High court sides with Medicaid fraudster in identity theft case  

The justices said the government can't charge the Austin-based doctor with stealing his patient's identity when he overbilled Medicaid for their appointment.

WASHINGTON (CN) — The Supreme Court unanimously shot down the government’s broad reading of identity theft law Thursday in a decision that will shorten the prison sentence of an Austin psychologist who defrauded Medicaid.

“While the Government represents that prosecutors will act responsibly in charging defendants under its sweeping reading, this Court 'cannot construe a criminal statute on the assumption that the Government will ‘use it responsibly,'’” Justice Sonia Sotomayor wrote for the court in the 21-page ruling.

The case stems from a mental health testing company called Psychological ARTs, operated by father-and-son psychologists William and David Dubin. In 2013, as the son, David, was examining a patient, the visit was cut short after the father realized the patient’s Medicaid benefits had already been exhausted. The younger Dubin still instructed an employee to file a reimbursement claim to Medicaid, including the patient’s name and ID number, which resulted in the canceled exam falsely qualifying for payment. 

A jury later convicted both Dubins on multiple charges. For filing a phony Medicaid reimbursement form, David Dubin was sentenced in 2019 to three years in prison on health care fraud and identity theft charges. The Fifth Circuit affirmed, but Dubin's lawyer fought for a reversal in Washington, saying the conviction “stretches the aggravated identity theft statute beyond its breaking point.”

“It does not meet any ordinary understanding of the term ‘identity theft,’” said Jeffrey Fisher, an attorney for Dubin with the Stanford Law School Supreme Court Litigation Clinic, at arguments in February.

The high court agreed Thursday, saying it could not support “such a boundless interpretation.” 

Someone can only be charged with identity theft “when the defendant’s misuse of another person’s means of identification is at the crux of what makes the underlying offense criminal, rather than merely an ancillary feature of a billing method,” Sotomayor wrote in the opinion. 

“Here, the crux of petitioner’s overbilling was inflating the value of services actually provided, while the patient’s means of identification was an ancillary part of the Medicaid billing process,” she continued.

Assistant to the U.S. Solicitor General Vivek Suri had insisted at oral arguments that both convictions should stand.

“In this case, you can't possibly charge a particular Medicaid account fraudulently without using that patient's Medicaid number. And, therefore, the use of the Medicaid number is on any reasonable definition in relation to that particular fraud,” Suri said, adding that while fraud in that context is relatively small fraud, it was nevertheless the correct reading of the statute, whose full name is the Identity Theft Penalty Enhancement Act of 2004.

“It's not a big fraud but it's inherent in the statute, which has a flat two-year penalty, regardless of the size of the fraud in a particular case," Suri said. "The small fraud is going to be punished the same way as the big fraud."

And with respect to this case, Suri had noted it's true that this one Medicaid claim was only $338, but said the trial court found that the scheme involved a lot of claims — $282,000 worth.

However, the high court found that endorsing the government’s argument that the doctor committed identity theft by using a patient identifier would likely prove a problem for them in other areas. 

“Patient names or other identifiers will, of course, be involved in the great majority of healthcare billing, whether Medicare for massages, or for ambulance stretcher services,” Sotomayor wrote. “Patient names will be on prescriptions, and patients committing fraud on their own behalf will often have to include the names of others on their forms, such as doctors or employers. Under the Government’s own reading, such cases are ‘automatically identity theft,’ independent of whether the name itself had anything to do with the fraudulent aspect of the offense.”

She said siding with the government here could also impact the legal interpretation of identity theft in relation to mail and wire fraud – and that under such a reading, mail fraud could be considered using another person’s name to address a letter to them.

“Even beyond that, names or other means of identification are used routinely for billing and payment, whether payment apps, credit and debit cards, a bill sent by mail, or an invoice sent electronically,” Sotomayor continued. “So long as the criteria for the broad predicate offenses are met, the Government’s reading creates an automatic 2-year sentence for generic overbilling that happens to use ubiquitous payment methods.”

In a concurring opinion, Justice Neil Gorsuch lamented the language the court had to use to describe why it sided with Dubin.

“From the patient’s perspective, Mr. Dubin’s use of his ‘means of identification’ could hardly feel ‘ancillary,’” Gorsuch noted, adding that the court did its best to make sense of the statute. 

“As an abstract exercise, debating fact patterns like these may seem good fun. But there is nothing entertaining about a 2-year mandatory federal prison sentence. Criminal statutes are not games to be played in the car on a cross-country road trip,” Gorsuch wrote. “To satisfy the constitutional minimum of due process, they must at least provide ‘ordinary people’ with ‘fair notice of the conduct [they] punis[h].’ And, respectfully, I do not see how [the identity theft statute] can clear that threshold. Under the Court’s ‘crux’ test, no boundary separates conduct that gives rise to liability from conduct that does not.”

The identity theft statute applies only when identity theft occurs during the course of someone using another person’s personal data that involves fraud or deception. This statute holds a mandatory two-year sentence that must be stacked on top of the predicate felony. 

In the petition for Dubin, Fisher had warned of major ramifications if the court affirms that the scope of the identity theft law extends to this case, namely that letting his client’s identity theft charge stand would slap an additional two-year sentence onto most health care fraud claims and would apply for anyone else who submits a form on someone else’s behalf that contains a misrepresentation.

Criminal defense lawyers referred to Dubin’s prosecution as a symptom of the federal overcriminalization epidemic. A group of them filed a friend-of-the-court brief that urged the justices to hear the case.

Neither Fisher nor a representative from the Department of Justice immediately returned a request for comment on the ruling Thursday.

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Categories / Appeals, Criminal, Government, Health

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