Where is DOJ....oh, here they are...U.S. Attorney's Office for the District of Nevada declined to comment

GOVERNMENT & MEDICINE
Judge rules criminal fraud case against Idaho doctor is frivolous
A federal judge found the government's case to be without merit. The Nevada U.S. Attorney's Office is pursuing an appeal.
By Amy Lynn Sorrel, AMNews staff. Aug. 20, 2007.


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In a rare victory, a physician turned the tables on the government and won nearly $300,000 in legal fees for what a Nevada federal trial judge found to be a frivolous health care fraud case.

The Justice Dept. accused otolaryngologist Mark Capener, MD, now in Idaho Falls, Idaho, of billing for endoscopic sinus surgeries that investigators alleged either were unnecessary or never performed, and of upcoding. Authorities accused the doctor of defrauding eight private health insurers, Medicare and Medicaid through his billing practices.

But the U.S. District Court for the District of Nevada in June found that the government's case "lacked merit" because its main expert witnesses presented testimony at trial that was contradicted by another expert it interviewed beforehand.

"Either the government consciously decided to proffer a theory it knew was false, or it failed to conduct any investigation or inquiry to confirm whether [the principal expert's] contentions ... [were] in fact accurate," U.S. District Judge Robert C. Jones wrote.

The U.S. Attorney's Office for the District of Nevada declined to comment on the ruling. Government officials in July appealed the decision to the 9th U.S. Circuit Court of Appeals.

If the ruling sticks, it could offer some hope for physicians who are caught in similar circumstances and shine the light on the government's often aggressive tactics in health care fraud cases, some experts said.

Doctors often are forced to settle such cases, even when they did nothing wrong, because the financial stakes are so high, said Robert S. Salcido, a Washington, D.C.-based attorney for Akin Gump Strauss Hauer & Feld LLP and a former Justice Dept. civil fraud lawyer. Sometimes doctors also face significant jail time.

The decision could prove to be significant because "even though a lot of cases are similar to this in that the government doesn't always engage in adequate pre-suit investigation, rarely is the government's conduct challenged," he said.

James R. Tate, Dr. Capener's attorney, said the doctor did nothing wrong -- which is why he decided to fight back. "He spent a lot of time and money to defend himself in a case that never should have been brought in the first place," Tate said.

The federal investigation into Dr. Capener's billing practices began in 2002 after authorities learned of several "red flags" that showed up in an independent audit of Dr. Capener's claims by a local health plan, court documents show. The review concluded that there was "huge discrepancy" in the number of sinus surgeries that Dr. Capener billed for in Elko, Nev., a town with a population of 40,000 when compared with the rest of the state, according to the government's brief.

A trial court in 2006 dismissed more than half of the fraud claims, and a jury came up with a "not guilty" verdict on the remaining counts.

Witnesses at odds
At trial, the government's main expert, also an otolaryngologist, had testified that Dr. Capener's pathology slides showed no bone fragments, a necessary condition to justify the sinus procedures at issue. Therefore, the expert concluded that Dr. Capener did not perform the surgeries for which he billed. Nor could he have completed that many surgeries within the time limits shown in his claims, according to the expert.

But a defense expert witness, a pathologist, testified and presented contradicting evidence that all of Dr. Capener's records showed bone fragments. The government interviewed the pathologist before trial but did not present his findings when making its case.

In addition, the government failed to share with Dr. Capener the evidence it had to support its argument, the judge said. "Taken together, these facts indicate that the government had reason to believe their lack of bone theory was without support."

The court awarded Dr. Capener $175,000 for expert witness expenses, and $104,000 in attorneys' fees. Still, that represents only a portion of the more than $1 million it cost the doctor to defend the case, Tate said.

Dr. Capener sued federal investigators for legal fees under the Hyde Amendment, which allows individuals to recoup litigation expenses when they prevail in federal criminal cases that a court finds to be frivolous or pursued in bad faith. But that is a difficult standard to prove, Tate warned.

Jeffrey S. Parker, a criminal law professor at George Mason University School of Law in Arlington, Va., said cases like the one against Dr. Capener -- prosecuted under a general 1996 health care fraud statute -- are not unusual. The statute sets a standard for criminal violations that requires the government to show that the doctor acted deliberately.

Instead, in many cases, "[the government] is just looking at CPT code usage and anybody out on the tail of the distribution is targeted for criminal prosecution," Parker said. "And that's not the same thing as intentional wrongdoing." If found guilty, doctors could face 10 years in prison, noted Parker, who assisted in Dr. Capener's suit.

Tate said that although Dr. Capener may have done more surgeries than what might be considered "normal" among other doctors, he did what was best for his patients.

Though it is difficult to prevent an unwarranted investigation, Parker recommended that doctors at least use a coding expert to help them accurately file claims and track their billing patterns.