United States v. Troisi , 849 F.3d 490 ( 2017 )

United States Court of Appeals
For the First Circuit
No. 16-1046
UNITED STATES OF AMERICA,
Appellee,
v.
JANICE TROISI,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
Before
Howard, Chief Judge,
Lynch and Lipez, Circuit Judges.
James L. Sultan, with whom Kerry A. Haberlin and Rankin &
Sultan were on brief, for appellant.
Kelly Begg Lawrence, Assistant United States Attorney, with
whom Carmen M. Ortiz, United States Attorney, was on brief, for
appellee.
February 24, 2017
LYNCH, Circuit Judge. After a bench trial, Janice Troisi
was convicted in 2015 both of conspiracy to commit healthcare
fraud, see 18 U.S.C. § 1349, and of healthcare fraud, see id.
§ 1347, for her role from January 2010 forward in an extensive
scheme between 2006 and 2012 to defraud Medicare by billing the
program for services provided to patients falsely presented as
eligible to receive them. Troisi does not dispute the role that
she played in the fraudulent scheme, which involved billing the
government for $27.6 million in false claims, $19.9 million of
which were paid. She appeals, arguing that there was insufficient
evidence to prove beyond a reasonable doubt that she acted with
the required culpable state of mind. We affirm her convictions.
I.
We summarize the basic contours of the healthcare fraud
scheme and proceedings below, reserving a fuller exposition of the
relevant facts for our analysis of the particular issues presented
by this appeal. See United States v. López-Díaz, 794 F.3d 106,
109 (1st Cir. 2015) (citing United States v. Flores–Rivera, 787
F.3d 1, 9 (1st Cir. 2015)), cert. denied, 136 S. Ct. 1229 (2016).
On September 18, 2013, Troisi and co-defendant Michael
Galatis1 were indicted by a grand jury in the District of
1 We have affirmed Galatis's conviction in United States
v. Galatis, No. 15-1322, ___ F.3d ___ (1st Cir. Feb. 24, 2017).
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Massachusetts on one count of conspiracy to commit healthcare
fraud, see 18 U.S.C. § 1349, and eleven counts of substantive
healthcare fraud,2 see id. § 1347. Galatis was also separately
charged with seven counts of money laundering. See id. § 1957.
The indictment alleged that Galatis, the owner of At Home VNA
("AHVNA"), a home health-services agency, and Troisi, AHVNA's
Director of Clinical Services since January 2010, had used AHVNA
as a vehicle for defrauding Medicare by providing Medicare-
reimbursable in-home nursing services to ineligible patients and
then billing Medicare for those services based on falsified
documents.
Medicare determines whether a beneficiary qualifies for
coverage of home health services -- and, in turn, whether and to
what extent to reimburse the beneficiary's healthcare provider for
the cost of such services -- based primarily on information
contained in two forms submitted by the healthcare provider. The
first form, called the OASIS Form, documents the healthcare
provider's assessment of the beneficiary's medical condition and
needs. In filling out this form, a healthcare provider must, inter
alia, rate on a numerical scale the beneficiary's ability to
2One of the substantive fraud counts was ultimately
dismissed as to both defendants upon the government's motion
because the Medicare beneficiary associated with the conduct
underlying that charge was unable to testify at trial.
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perform certain activities -- such as eating, dressing, and bathing
-- without assistance. The second form, called the Form 485 Home
Health Certification and Plan of Care ("Form 485"), requires a
physician to certify that (1) the beneficiary is confined to the
home ("homebound"), (2) the beneficiary is in need of skilled
services, (3) such "services will be or were furnished while the
[beneficiary is or] was under the care of a physician," and (4) a
"plan for furnishing the services has been established and will be
or was periodically reviewed by a physician." 42 C.F.R. § 424.22.
Additionally, for services started after April 1, 2011, a physician
must certify that a "face-to-face" encounter between the
beneficiary and a physician, related to the beneficiary's need for
the services, occurred no more than 90 days prior to or 30 days
after the start of the services.3 Id.
The prosecution charged that the AHVNA scheme proceeded
as follows. AHVNA aggressively recruited Medicare-insured
individuals for in-home nursing services, for which they could not
legally receive Medicare coverage, either because they were not
homebound or because they were not in need of such services.
Troisi instructed AHVNA's nurses to fill out those patients' OASIS
3 During the time period relevant here, each Form 485
"covered 60 days of services and could be renewed indefinitely
upon recertification of the patient’s continued need for such
services."
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Forms to represent, inaccurately, that the patients were incapable
of caring for themselves. Troisi then personally prepared a Form
485 for each patient, populating it with whatever false information
was required to obtain Medicare coverage for in-home nursing
services. And AHVNA’s Medical Director, Dr. Spencer Wilking,
signed the forms without reviewing their contents or even, in many
cases, meeting with the patients.4
AHVNA nurses made home visits to patients, but most of
those visits did not actually involve the nurses providing skilled
services. Yet at Troisi's direction, the nurses falsified their
notes to indicate that they had provided such services. Using
fraudulent records, AHVNA billed Medicare for tens of millions of
dollars' worth of skilled nursing services, which had not been
provided or had been provided unnecessarily, between 2006 and 2012,
inclusive.
Only the portion of the scheme beginning on January 1,
2010 -- when Troisi became AHVNA's Clinical Director -- is relevant
to this appeal. The government's theory was that Galatis agreed
to promote Troisi from part-time employee to Clinical Director at
that time because she could -- and did -- take the scheme "to
another level." Accordingly, she had a direct stake in the fraud
4 Dr. Wilking pled guilty to one count of healthcare fraud
for his role in the scheme and served as a witness for the
government at trial.
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even though she did not personally receive the reimbursement checks
from Medicare.
Troisi and Galatis proceeded jointly to a jury trial on
October 27, 2014.5 The district court declared a mistrial as to
Troisi on November 30, 2014, after she became too ill to proceed.
Troisi waived her right to a jury on retrial. A bench trial before
the same district judge who had presided over the earlier trial
started on July 28, 2015.
The parties stipulated that "transcripts of the
testimony of 27 government witnesses who testified at the earlier,
joint trial, along with the exhibits admitted during the joint
trial," would be admissible evidence at Troisi's bench trial.6 The
government supplemented this evidence with live testimony from
four additional witnesses. In total, the government introduced
217 documentary exhibits, including the transcripts. Its
witnesses included patients linked to the substantive fraud
counts, nurses who had provided care to those patients, most of
those patients' primary care providers, and Dr. Wilking.
5 On December 3, 2014, the jury convicted Galatis of all
of the charges against him, and he was ultimately sentenced to 92
months of imprisonment, to be followed by three years of supervised
release, and ordered to pay $7,000,000 in restitution and a $50,000
fine.
6 This evidence had been received before the court ordered
a mistrial and thus had been subject to cross-examination by
Troisi.
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At the conclusion of the government's case, Troisi moved
for a judgment of acquittal, which was denied. In her defense,
Troisi called no witnesses and introduced five exhibits. The
thrust of her defense was that the government had not proved that
she possessed the requisite mens rea to commit the relevant crimes.
On August 5, 2015, the day after the trial ended, the
district court delivered its verdict from the bench, finding Troisi
guilty on all of the conspiracy and fraud counts. The court
concluded that Troisi had participated in a "sophisticated scheme
among the senior managers [of AHVNA] . . . to provide inaccurate
information" to the government so as to secure payments, "which
the [g]overnment was not obligated to make."7 While "[h]er knowing
and willful participation in this scheme with the intent to defraud
[was] largely demonstrated circumstantially," the court found
sufficient evidence that Troisi had "manipulat[ed]. . . the staff
and . . . the paperwork" with the purpose of "extracting monies
that [AHVNA was] not entitled to . . . through fraud, that is,
[the] misrepresentation of material facts." The court sentenced
7 The court noted that the AHVNA scheme was "somewhat
unusual" because in most Medicare-fraud schemes, "no services are
actually provided." The court correctly held, however, that the
"services apparently provided" by AHVNA "simply were not services
that the United States [was] supposed to pay for, and the parties
to the fraud understood that." See, e.g., United States v. Vega,
813 F.3d 386, 398-99 (1st Cir. 2016) (describing a Medicare-fraud
scheme that involved seeking reimbursement for services provided
to ineligible beneficiaries).
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Troisi to 36 months of imprisonment to be followed by three years
of supervised release. This appeal followed.
II.
"In assessing a challenge to the sufficiency of the
evidence, we 'examine the evidence, together with all inferences
that may be reasonably drawn from it, in the light most favorable
to the'" verdict. López-Díaz, 794 F.3d at 111 (quoting United
States v. Andújar, 49 F.3d 16, 20 (1st Cir. 1995)). Where the
factfinder drew "inferences from circumstantial evidence," we will
not "second-guess[] [its] ensuing conclusions as long as (1) the
inferences derive support from a plausible rendition of the record,
and (2) the conclusions flow rationally from those inferences."
United States v. Spinney, 65 F.3d 231, 234 (1st Cir. 1995).
Ultimately, we ask "whether 'any rational trier of fact could have
found the essential elements of the crime beyond a reasonable
doubt.'" United States v. O'Donnell, 840 F.3d 15, 18 (1st Cir.
2016) (quoting United States v. Grace, 367 F.3d 29, 33 (1st Cir.
2004)).
A defendant violates 18 U.S.C. § 1347 if she "knowingly
and willfully execute[s] a scheme [intended] to defraud a
government health-care program," United States v. Iwuala, 789 F.3d
1, 12 (1st Cir. 2015), cert. denied, 136 S. Ct. 913 (2016), and
she violates 18 U.S.C. § 1349 if she engages in a conspiracy to
execute such a scheme, id. at 9. "[T]he government may carry its
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burden of proof [as to both offenses] wholly through circumstantial
evidence." Id. at 11.
Troisi does not dispute that officials at AHVNA
successfully executed a conspiratorial scheme intended to defraud
Medicare. Nor does she dispute that she took actions that directly
and crucially furthered that scheme. She attacks her convictions
solely on the ground that the government allegedly failed to
present sufficient evidence that she took those actions with the
required culpable state of mind.8 Cf. id. at 9.
We disagree. Troisi's culpable state of mind can be
readily gleaned from "several strands of circumstantial evidence"
presented at trial. Vega, 813 F.3d at 398.
First, Troisi cannot claim that she was ignorant. She
was deeply familiar with the regulatory scheme that she helped
contravene. She knew what was permitted and what was not. Compare
López-Díaz, 794 F.3d at 112 (finding no evidence in the record to
8 The parties do not dispute the applicable mens rea
requirement. Troisi's brief frames that requirement as comprising
two distinct elements: the defendant must have acted "willfully
with knowledge that her conduct was unlawful" and with the
"specific intent to defraud." Our case law recognizes that
"willfulness" is normally understood to encompass "specific
intent," and both terms require a finding that the defendant acted
with a purpose to disobey or disregard the law, rather than by
ignorance, accident, or mistake. See, e.g., United States v.
LaPlante, 714 F.3d 641, 644 (1st Cir. 2013); United States v.
Allen, 670 F.3d 12, 17 (1st Cir. 2012); United States v. Gonzalez,
570 F.3d 16, 24 (1st Cir. 2009); United States v. Lizardo, 445
F.3d 73, 86 (1st Cir. 2006); see also Bryan v. United States, 524
U.S. 184, 191–92 (1998).
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support claim that a defendant dentist knew about the "different"
physician billing code system), with United States v. Singh, 390
F.3d 168, 187-89 (2d Cir. 2004) (allowing inference of fraudulent
intent based on a defendant doctor's possession of the applicable
billing code guidebook and his instructions to nurses as to how to
fill out the forms). Troisi demonstrated her familiarity with the
relevant regulations in multiple conversations in 2010 and 2011
with Martha Fisk of Holyoke Health Center, who called AHVNA to
express concern about the fact that all of the orders prescribing
home health services to Holyoke patients had been signed by Dr.
Wilking, who had not seen the patients, rather than by the
patients' primary care physicians. More than that, the
conversations showed Troisi defending the questionable practices.
Troisi insisted that AHVNA's paperwork was fine because the new
"face-to-face" requirement in 42 C.F.R. § 424.22 had not yet taken
effect. In addition, on her resume, Troisi professed her
"[e]xpertise" in "PPS," the process by which medical providers
submit payment requests to Medicare based on patients' OASIS Forms.
Troisi also exercised total control over AHVNA's
preparation of the documentation required for Medicare
reimbursement -- the aspect of the scheme that directly contravened
the regulations she knew so well. See Vega, 813 F.3d at 398-99
(finding the defendant's "large degree of control over [her
company's] operations" evidence that she knew the claims the
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company was submitting to Medicare were fraudulent); United States
v. Willett, 751 F.3d 335, 340 (5th Cir. 2014) (finding the
defendant’s "proximity to" and prominent role in "fraudulent
activities" evidence of a culpable state of mind). As AHVNA's
Clinical Director, Troisi was in charge of "developing [and]
implementing . . . the day-to-day functions of clinical services,
in accordance with current rules, regulations, and guidelines that
govern Home Health Agencies." In fact, she oversaw AHVNA's team
of nurses, who were hired fresh out of nursing school with no
experience in home health services or Medicare regulations. Those
inexperienced nurses were tasked with filling out patients' OASIS
Forms, which Troisi reviewed and edited at weekly meetings along
with the notes reflecting the services that the nurses had
provided. Troisi also personally filled out the Form 485s before
giving them to Dr. Wilking so that he could sign them. All of
this documentation contained misrepresentations material to
Medicare's payment decisions.
Further, in exercising her control over the
documentation process, Troisi instructed the nurses to put in
particular information regardless of whether it was true or not.
She insisted that the nurses filling out OASIS Forms never assign
a score of "zero" to a patient's ability to perform any activity
(as such a score would indicate full independence); never state
that a patient had not been home at the time of a scheduled visit
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(as doing so would indicate that the patient was not homebound);
and never check a box indicating that a patient had been "alert
and oriented." When nurses protested that a patient's condition
warranted a zero and that they were "not . . . comfortable"
assigning a different score, Troisi would force them to do so,
even though Troisi had not evaluated the patient herself and had
no basis for disagreement.
At oral argument, Troisi tried to put an innocent gloss
on this behavior, explaining that she was just an "aggressive"
boss and that her rules were aimed at ensuring that the nurses
qualified patients for home health services she believed the
patients needed. But Troisi's "insistence" on qualifying patients
for Medicare-reimbursable services "creates a strong inference
that she did not care" whether the services "served a legitimate
medical purpose" and that she therefore "not only knew of the
fraud, but actively played a role in directing it." Vega, 813
F.3d at 399.
Additionally, Troisi's purported management style does
not account for the incriminating actions she took on her own.
Troisi would often personally change the number that a nurse had
entered on an OASIS Form, using the same color pen that the nurse
had used so as to make the form appear unaltered. Troisi would
even replace entire pages in OASIS Forms completed by nurses if
the forms contained information suggesting that the patient was
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not actually homebound or in need of skilled services. She knew
that the OASIS Forms did not accurately reflect the opinions of
the medical professionals who had evaluated the patients, and she
directly facilitated the fraud. See United States v. Njoku, 737
F.3d 55, 63 (5th Cir. 2013) (finding the defendant's instructions
to a nurse to represent patients as homebound on OASIS Forms,
despite the nurse's "concern that some patients were not
homebound," evidence of the defendant's culpable state of mind).
Finally, Troisi filled out patients' Form 485s based on
the contents of those falsified OASIS Forms, knowing that Dr.
Wilking would sign them without taking the time to read them --
let alone meet with and evaluate the patients. See Vega, 813 F.3d
at 399 (finding evidence of the defendant's knowing complicity in
healthcare fraud where she "allowed" her company to seek Medicare
reimbursement for services "prescribe[d] [by a doctor] for
patients he did not see"). And she continued to recertify patients
for further home health services even when their nurses had
recommended that they be discharged, their primary care physicians
had sent letters explaining that such services were not needed,
and the patients themselves had tried to discontinue the visits.
This evidence was sufficient to permit a reasonable
factfinder to conclude, beyond a reasonable doubt, that Troisi
conspired to commit, and indeed committed, healthcare fraud. See,
e.g., United States v. Eghobor, 812 F.3d 352, 362 (5th Cir. 2015)
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(finding sufficient evidence of a healthcare-fraud conspiracy
where the defendant "admitted patients . . . by falsifying OASIS
forms," "create[d] [Form 485s] prescribing [those patients] home
health care," and had the forms signed by a doctor who had never
treated those patients). The circumstances underlying each of the
substantive fraud counts "share[] . . . the [same] badges of fraud
that characterize[] the overall scheme." Iwuala, 789 F.3d at 12.
Ultimately, "the guilty verdict finds [sufficient] support" in
this record. O'Donnell, 840 F.3d at 18 (quoting United States v.
Hatch, 434 F.3d 1, 4 (1st Cir. 2006)).
III.
The convictions are affirmed.
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