Kentucky doctors convicted of health fraud ask Supreme Court to overturn convictions
Five partners in a Russell County drug-testing lab who were convicted of health fraud have asked the U.S. Supreme Court to take their appeal.
The five argue that the U.S. 6th Circuit Court of Appeals erred in upholding their convictions.
The defendants in the case are physicians Bryan S. Wood, Robin Peavler and Robert L. Bertram; former Russell Springs Mayor Brian C. Walters; and James W. “Wes” Bottom, a businessman in Russell County.
They were partners in a business called PremierTox, which performed drug screens on urine samples from people in treatment for substance-use disorder.
Doctors use the test results in treating people to make sure they are using medication properly and not abusing other drugs.
A federal grand jury charged that the partners in PremierTox defrauded insurance companies by billing for drug tests that were not medically necessary.
That allegedly happened after an employee damaged equipment at the lab in 2010, causing a backlog of urine samples that couldn’t be tested immediately, according to court records.
During the delay, the partners in the lab had urine samples stored in freezers at a rented facility.
The partners had the samples tested, as much as 10 months later in some cases, and billed public and private insurance programs for doing the tests.
Prosecutors argued that was fraud because by then, the tests were of no use in treating patients.
Defense attorneys argued the five men did not intend to defraud insurance companies and that the government was trying to substitute its judgment about the medical necessity of the tests over that of doctors.
A jury convicted all five PremierTox partners on 17 counts of health fraud in April 2017, based on bills submitted to one private insurer, Anthem, but acquitted them on 83 other charges.
The five argued in an appeal to the U.S. 6th Circuit that there was not sufficient evidence to support their convictions.
The appeals court disagreed, ruling in August that it was reasonable for jurors to conclude the five knew they were billing for tests that were not necessary.
“No one reasonably thought that the tests, when ordered, would be performed seven to ten months later,” the appeals court said.
The appeals court said the lab owners could not escape responsibility by arguing that the doctors who ordered the tests didn’t say how quickly they wanted them done, and never canceled them.
“Just because the doctors didn’t put expiration dates on their order forms didn’t mean they were certifying they would be medically necessary until the end of time,” the court said. “Customary practice and common sense have a role to play.”
Attorneys for the five argued in their petition to the Supreme Court that the appeals court used an incorrect standard in its decision.
The appeals court decision incorrectly equated non-disclosure of information with actively concealing information, imposing a duty on the lab partners that was “manufactured from ‘customary practice and common sense’ to volunteer information that Anthem never required or requested,” the petition argued.
The alleged fraud in the case was that PremierTox should have notified insurance companies it conducted tests late, but the companies could easily see that because the claims included the test dates, the petition said.
“PremierTox did not conceal any information from Anthem, and it had no legal or contractual duty to disclose that it tested some samples months after they were submitted,” the lab partners’ petition said.
There was no evidence PremierTox had a duty to determine if the urine screens ordered by doctors were necessary, and no law, regulation, or contract provision barred delayed testing of samples, according to the lab partners’ petition.
U.S. District Judge Gregory F. Van Tatenhove sentenced Wood and Bertram each to 21 months in prison; Walters and Peavler each to 18 months; and Bottom to 13 months.
All five are in prison now.