United States v. Samirkumar Shah ( 2022 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 21-2581
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UNITED STATES OF AMERICA
v.
SAMIRKUMAR J. SHAH,
Appellant
______________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Crim. Action No. 2-16-cr-00110-001)
U.S. District Judge: Honorable David S. Cercone
______________
Submitted Under Third Circuit L.A.R. 34.1(a)
July 8, 2022
______________
Before: SHWARTZ, KRAUSE, and ROTH, Circuit Judges.
(Filed: July 22, 2022)
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OPINION ∗
______________
∗
This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
SHWARTZ, Circuit Judge.
Samirkumar Shah appeals his conviction and sentence for health care fraud.
Because the District Court correctly denied his motions to disqualify the United States
Attorney’s Office (“USAO”), for a continuance, and for a judgment of acquittal, and
because his sentence is procedurally and substantively reasonable, we will affirm.
I
A
Shah practiced cardiology in multiple offices in Pennsylvania. Among other
things, Shah prescribed external counterpulsion (ECP) treatment, which is designed to
increase blood flow to the heart using compression cuffs around the patient’s legs while
they are lying down. Shah purchased ECP beds and billed insurers, including Medicaid
and Medicare plans, for ECP treatment.
Medicaid and Medicare have three limitations for reimbursement of ECP
treatment. First, the programs cover ECP treatment only for patients who suffer from
angina (chest pain). Second, the programs will only reimburse for ECP treatment that
was conducted under a physician’s direct supervision. Third, the programs restrict billing
for reimbursement. Specifically, a system of codes is used to identify the service
rendered, and each coded service is assigned a price. ECP treatment is assigned code
G0166, which is a “bundled code” because it includes companion treatments. 1 App. 197.
As result, physicians who bill code G0166 may not also bill the separate codes for the
1
The companion treatments bundled in G0166 include echocardiograms, Doppler
tests, pulse oximetries, and plethysmographies.
2
companion treatments on the same day “unless they are medically necessary and
delivered in a clinical setting not involving ECP therapy.” S. App. 6. The ECP bed
supplier provided Shah with guidelines informing him of these limitations.
Insurers audited Shah’s billing and told him that he improperly billed ECP
treatments by using both the G0166 code and codes for companion treatments and that
the medical necessity of many of his ECP treatments was unsubstantiated. Although
Shah’s agreements with insurers required that he only seek reimbursement for medically
necessary treatments, and he told one insurer that he instructed his billing department to
remove the incorrect codes, he in fact directed his third-party billing service to continue
billing “[a]ll four codes.” App. 836.
In addition to ignoring insurers’ directives, Shah (1) prescribed ECP for patients,
including an undercover agent, who did not suffer chest pain, telling some patients that
ECP treatment would make them “younger and smarter” and could help with conditions
including high and low blood pressure, obesity, erectile dysfunction, and restless leg
syndrome, App. 385; and (2) was “very often” not present—nor was any doctor—to
supervise patients’ ECP treatments, App. 457-58. Shah (1) told his staff that all patients
had angina; (2) instructed staff to “beef[] up” patient files before insurance reviews, long
after treatment was provided, App. 327; and (3) used pre-printed forms that included
angina diagnoses. Notably, during an interview with the Pennsylvania Attorney
General’s Office, Shah stated that he reported angina diagnoses for patients who did not
have that condition “[f]or reimbursement purposes.” App. 1151.
3
B
A grand jury indicted Shah for two counts of health care fraud in violation of 18
U.S.C. § 1347.
On the first day of jury selection, Shah moved to disqualify the entire USAO and
sought a continuance to conduct additional discovery.
Shah’s disqualification motion arose out of his prior representation by Tina Miller,
who represented Shah until June 2017, and then, ten months later, joined the USAO as a
supervisory Assistant U.S. Attorney (“AUSA”). Shah argued that because Miller became
a supervisor in the office prosecuting him, there was “both a conflict of interest and an
appearance of a loss of impartiality.” D. Ct. ECF No. 145 at 7. The District Court denied
the motion, noting that it did not “see any issue of any facts demonstrating a conflict of
[interest]” and emphasizing the need to avoid delaying the trial. App. 67. 2
Shah also sought a continuance so he could have an expert review 350 patient files
seized from his offices. The Government responded that the records had been available
2
After the Court ruled, it received declarations from Miller and the two AUSAs
handling the trial. Miller stated that she did not discuss employment with the USAO
when she represented Shah and, once she joined the office, she had no discussions about
or involvement in any cases in which she had played a role while in private practice. She
also represented that she divulged no confidential information learned during her
representation of Shah to any USAO employee or investigative agency. The two
AUSAs’ affidavits likewise stated that Miller was not involved in Shah’s prosecution and
did not divulge any client confidences. One AUSA added that her only discussion with
Miller regarding Shah’s prosecution involved her telling Miller that she was unable to
assist on a separate matter because she, unbeknownst to Miller, “would be in . . . the trial
of [Shah].” App. 90.
After trial, the District Court revisited Shah’s disqualification motion, again held
that disqualification of the entire USAO was inappropriate “given the lack of . . . Miller’s
4
to him for years and thus a continuance was inappropriate. The Court denied the request
for a continuance as untimely.
C
The trial commenced, and the Government presented thirty-two witnesses,
including Shah’s patients and employees, the ECP bed supplier, insurers, his third-party
billing service, and law enforcement officers. After the government rested, Shah moved
for judgment of acquittal on Count Two, which the District Court denied. The jury found
Shah guilty on both counts of health care fraud.
D
The District Court held a sentencing hearing to calculate the loss to insurers from
Shah’s conduct. FBI Special Agent Brooklynn Riordan testified that, for each insurer,
she calculated (1) the average amount Shah billed and (2) the average amount the insurer
reimbursed Shah, and identified, by dividing the average amount reimbursed by the
average amount billed, a reimbursement rate. She then multiplied that rate by the total
billing to that insurer, which, across all insurers, yielded a total loss of $5,919,100.00.
The Government recommended reducing the total loss amount by 50%, which had the
effect of treating half of Shah’s billing for ECP treatment and companion codes as
legitimate, even though there was no evidence that he ever legitimately used those codes.
The District Court accepted the loss calculation over Shah’s objection.
involvement in the government’s prosecution of defendant,” and declined to hold an
evidentiary hearing. App. 50.
5
The Court sentenced Shah to concurrent terms of 78 months’ imprisonment and
three years’ supervised release and ordered that he pay $1,234,983.60 in restitution.
Shah appeals.
II 3
A
We will address, in turn, Shah’s challenges to the District Court’s orders denying
his motions to disqualify the entire USAO, for a continuance to conduct additional
discovery, and for judgment of acquittal on Count Two.
14
The District Court properly denied Shah’s motion to disqualify the entire USAO.
First, the District Court’s decision was not arbitrary. We have recognized that “[a]s long
as the court makes a ‘reasoned determination on the basis of a fully prepared record,’ its
decision will not be deemed arbitrary.” United States v. Stewart, 185 F.3d 112, 120 (3d
Cir. 1999) (quoting United States v. Voigt, 89 F.3d 1050, 1075 (3d Cir. 1996)). Here, the
District Court complied with its obligations, as it heard oral argument and received
written submissions from both Shah and the Government on this issue and made its
3
The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction
under 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a).
4
“Our standard of review on an attorney disqualification issue includes both
deferential and de novo elements. To the extent that the district court made factual
findings, our review is for clear error . . . . [W]e exercise plenary review to determine
whether the district court’s disqualification was arbitrary in the sense that the court did
not appropriately balance proper considerations of judicial administration against the
United States’ right to prosecute the matter through counsel of its choice . . . . If the
disqualification was not arbitrary, we use an abuse of discretion standard . . . .” United
States v. Whittaker, 268 F.3d 185, 193-94 (3d Cir. 2001).
6
decision based on a complete record, including declarations from Miller and the two
AUSAs handling Shah’s trial. Thus, we review the Court’s ruling for abuse of discretion.
See Whittaker, 268 F.3d at 194.
Second, the District Court did not abuse its discretion. Attorneys practicing before
the United States District Court for the Western District of Pennsylvania must adhere to
the Pennsylvania Supreme Court’s Rules of Professional Conduct. See W.D. Pa. L. Civ.
R. 83.3(A)(2); Pa. Const. art. V § 10. Under the Pennsylvania rules, a lawyer “currently
serving as a public officer or employee . . . shall not . . . participate in any matter in which
the lawyer participated personally and substantially while in private practice.” 204 Pa.
Code R. 1.11(d). While the lawyer who switches sides “is of course disqualified from
participating in the case[,] . . . individual rather than vicarious disqualification is the
general rule.” Commonwealth v. Miller, 422 A.2d 525, 529 (Pa. Super. Ct. 1980)
(quotation marks and citation omitted); see also 204 Pa. Code R. 1.11(d) cmt. (2)
(“Because of the special problems raised by imputation [of a conflict of interest] within a
government agency, [Rule 1.11(d)] does not impute the conflicts of a [government]
lawyer to other associated government officers or employees, although ordinarily it will
be prudent to screen such lawyers.”). This is so because disqualifying an entire
prosecutor’s office, rather than just the conflicted attorney, would impose substantial
costs on taxpayers because it would trigger the need to appoint special prosecutors each
time a member of the defense bar switches sides. See, e.g., Miller, 422 A.2d at 529;
Commonwealth v. Harris, 460 A.2d 747, 749 (Pa. 1983) (calling such an approach
“simply not viable”). Furthermore, it would not address the true concern: to be sure that
7
“the acts of a public prosecutor have [not] actually tainted the proceedings.” Harris, 460
A.2d at 749. Because actual taint must be shown, the mere “appearance of impropriety”
is insufficient to support disqualification of an entire office. 5 See id.
To avoid taint, USAOs use methods to wall off the attorney from cases in which
he played a role while in practice. Disqualification of an entire USAO is required only
when screening devices, aimed at ensuring side-switching counsel is in no way involved
in the case giving rise to the conflict, were not used or were ineffective. United States v.
Goot, 894 F.2d 231, 234-35 (7th Cir. 1990); see United States v. Caggiano, 660 F.2d 184,
191 (6th Cir. 1981) (holding that because an attorney was separated from all participation
on matters affecting his former client, “disqualification of an entire government
department . . . would not be appropriate”).
Here, the affidavits from Miller and the two AUSAs who tried Shah showed
Miller was properly screened. Miller stated that she had “been recused and walled off
from any involvement or oversight” in cases where she represented a defendant,
including Shah’s matter. App. 84. To implement the ethical screen, Miller told attorneys
and supervisors assigned to cases from which she was recused that she could have no
involvement in those cases. As to Shah specifically, Miller stated that she neither
“participated . . . in the prosecution or supervision of this case” nor “divulged any
5
Shah’s reliance on People v. Shinkle, 415 N.E.2d 909 (N.Y. Ct. App. 1980), is
misplaced. Shinkle disqualified the entire District Attorney’s office because of “the
unmistakable appearance of impropriety,” id. at 920, a rationale that is not a basis for
disqualifying government counsel under Pennsylvania’s ethics rules, see Harris, 460 A.2d
at 749; Miller, 422 A.2d at 529.
8
confidential information [she] learned” about Shah. App. 84-85. The trial AUSAs
confirmed that Miller “has not participated in the [Shah] case in any manner” nor
“divulged [to them] client confidences.” App. 87, 90. Based on these sworn statements,
the District Court did not clearly err in finding that Miller was screened from Shah’s
prosecution. Cf. Commonwealth v. Ford, 122 A.3d 414, 418 (Pa. Super. Ct. 2015)
(remanding where trial court disqualified the entire district attorney’s office because the
record did not indicate whether confidential information was disclosed or a “sufficient
fire wall ha[d] been . . . erected” and thus did not “support an exception to the general
rule, i.e., [did not support] disqualification of the entire [District Attorney’s] Office”).
Moreover, Shah has not shown that the ethical screen was ineffective. 6 In fact, he
concedes that he has no evidence that the denial of the disqualification motion prejudiced
him in any way. See Caggiano, 660 F.2d at 191 (reversing order disqualifying entire
USAO because, in part, “no prejudice has resulted to anyone in this case”). Instead, Shah
simply suggests that Miller was inevitably involved in his prosecution because of her
supervisory duties. In support, he cites the decision not to assign one of the trial AUSAs
additional cases to allow her to work on Shah’s case and the absence, in the AUSAs’
6
Shah asserts that the ethical screen was ineffective because the trial AUSAs
“found out” about Miller’s recusal from the docket, Appellant’s Br. at 16, but the
attorneys’ subjective understanding does not indicate that Miller did not satisfy her
ethical obligations to notify attorneys in the office. In addition, United States v. Schell,
775 F.2d 559 (4th Cir. 1985), does not help Shah. Unlike this case, in Schell, there was
some evidence suggesting that the side-switching AUSA disclosed his former client’s
confidences, and this led the court to question the effectiveness of the ethical screen
there. Id. at 566. There is no indication here that Miller had any discussions about Shah
with anyone.
9
affidavits, of information about who supervised them. Shah also relies on State v.
Tippecanoe County Court, 432 N.E.2d 1377, 1379 (Ind. 1982), in which the Indiana
Supreme Court concluded an entire district attorney’s office was properly disqualified
because the prosecutor had “administrative control over the entire staff.” Here, however,
there is no evidence that Miller exercised any control over the attorneys prosecuting
Shah. To the contrary, she swore that she did not “participate[] or cooperate[] in the
prosecution or supervision of [his] case,” App. 84, was never the direct supervisor of the
trial AUSAs, and would “not be involved in evaluating their performance in prosecuting
the Shah matter,” App. 85. Any decision Miller made regarding the AUSA’s other cases
has no bearing on Shah’s prosecution. Furthermore, Shah points to no requirement that
the USAO identify those who supervised the Shah prosecution in her stead, and he did
not rebut her sworn statement that someone else handled the supervisory duties in Shah’s
case.
Thus, the District Court did not abuse its discretion in denying Shah’s
disqualification motion. 7
2
The District Court also acted within its discretion in denying Shah’s motion for a
continuance on the first day of jury selection so that he could have an expert examine his
The District Court also acted within its discretion in declining to hold an
7
evidentiary hearing. While such a hearing may be useful in some cases, it is not required.
Goot, 894 F.2d at 237. Here, the Court had affidavits from Miller and the trial AUSAs
demonstrating an effective ethical screen was in place, and Shah presented nothing to
show that Miller played any role in his case or disclosed any information she learned
while representing him. See id.10
patient files. Denial of a continuance “constitutes an abuse of discretion only when it is
‘so arbitrary as to violate due process.’” United States v. Kikumura, 947 F.2d 72, 78 (3d
Cir. 1991) (quoting Ungar v. Sarafite, 376 U.S. 575, 589 (1964)).
In this case, a continuance was not warranted. First, Shah had access to the files
since his 2016 indictment pursuant to Federal Rule of Criminal Procedure 16(a)(1)(E),
and his prior counsel acknowledged receipt of a notice providing that he could inspect
and copy all seized records. Moreover, Shah does not dispute that his counsel received at
least four letters in 2018 and 2019 reflecting that “[e]vidence gathered during the course
of the searches . . . is available for your inspection, upon request,” S. App. 101, and he
concedes that he did not ask for access before trial. 8 Second, Shah requested the
continuance at the start of trial without providing any explanation for the late request and
despite receiving other continuances. Cf. United States v. Irizarry, 341 F.3d 273, 305-06
(3d Cir. 2003) (denying continuance for discovery requested two weeks before trial
despite recent superseding indictment). Therefore, the District Court did not abuse its
discretion by denying the requested continuance. 9
8
To the extent Shah argues his counsel was ineffective in not requesting his
patient files earlier, such a claim is generally not cognizable on direct appeal. United
States v. Givan, 320 F.3d 452, 464 (3d Cir. 2003).
9
Moreover, Shah has not shown that he suffered any prejudice from the lack of
further discovery. Although he asserts that his patient files would reveal other symptoms
that could support angina diagnoses, trial testimony showed that his files contained false
information, he revised patient files before insurance reviews to “make them . . . sound
better,” App. 327, and regularly recorded angina diagnoses regardless of whether the
patient expressed chest pain—the defining characteristic of angina.
11
3 10
The District Court properly denied Shah’s motion for a judgment of acquittal on
Count Two. Count Two charged Shah with health care fraud by knowingly billing
insurers for ECP treatments using both the G0166 code and companion treatment codes
already encompassed by G0166. To convict Shah of health care fraud, the Government
was required to prove, among other things, that Shah acted with the intent to defraud the
insurers who provided medical benefits. United States ex rel. Doe v. Heart Solution,
P.C., 923 F.3d 308, 319 (3d Cir. 2019); 18 U.S.C. § 1347.
Viewing the record in the light most favorable to the Government, a reasonable
jury could have found Shah acted with intent to defraud. First, the evidence showed that
Shah knew that the G0166 code was not to be billed with codes for component treatments
on the same day. Second, the evidence demonstrated that Shah disregarded the billing
rules. Over his third-party billing service’s objection, Shah directed the service to
continue billing “[a]ll four codes.” App. 836. Although Shah argues that he eventually
stopped billing multiple codes—and told one insurer in 2011 that he instructed his billing
department to bill only G0166—a reasonable jury could find that, by instructing the third-
party billing service to continue billing using both code G0166 and the codes for the
companion treatments despite being told he should not, Shah acted with intent to defraud
10
We exercise plenary review over an order denying a motion for judgment of
acquittal, United States v. Smith, 294 F.3d 473, 477 (3d Cir. 2002), and view the record
“in the light most favorable to the prosecution,” United States v. Garner, 961 F.3d 264,
274 (3d Cir.), cert. denied, 141 S. Ct. 932 (2020).
12
insurers.
Because a reasonable jury could have found Shah knew the billing requirements
for ECP treatment and deliberately ignored them, the District Court properly denied his
motion for judgment of acquittal on Count Two.
B 11
Shah also argues that his sentence is both procedurally and substantively
unreasonable.
1 12
In reviewing the procedural reasonableness of a district court’s sentence, we focus
on, among other things, whether the district court correctly calculated the applicable
Guidelines range. United States v. Merced, 603 F.3d 203, 215 (3d Cir. 2010). Shah
disputes the District Court’s loss calculation, which triggered a sixteen-level increase to
his base offense level under U.S.S.G. § 2B1.1(b)(1)(I).
At the sentencing hearing, Special Agent Riordan testified that she examined
insurers’ data for claims involving ECP code G0166 together with the codes for the
companion treatments on the same day. Riordan totaled the average amounts reimbursed
11
“We review the factual determinations underlying a sentence for clear error.”
United States v. Douglas, 885 F.3d 145, 150 n.3 (3d Cir. 2018); see also United States v.
Brennan, 326 F.3d 176, 194 (3d Cir. 2003) (reviewing loss calculation for clear error).
12
A district court “need only make a reasonable estimate of the loss,” based on
available information in the record, United States v. Ali, 508 F.3d 136, 145 (3d Cir.
2007) (quoting U.S.S.G. § 2B1.1 cmt. 3(C)), and it “need not reach a precise figure,”
United States v. Tupone, 442 F.3d 145, 156 (3d Cir. 2006). “[T]he government bears the
burden of establishing, by a preponderance of the evidence, the amount of loss.” United
States v. Fumo, 655 F.3d 288, 310 (3d Cir. 2011).
13
by each insurer and endorsed a 50% reduction of that amount. Given evidence
suggesting that no ECP charges were legitimate, 13 Riordan testified that the 50%
reduction yielded a “conservative” estimate. App. 1469-70. The resulting loss
calculation was $2,959,550.00, with $1,296,502.00 coming from Medicare and Medicaid
plans.
Shah’s challenge to the loss calculation method fails. First, the average
reimbursements were based on the insurance claims data, and not Shah’s patient files as
he contends. Relying on the claims data was appropriate here given the evidence that
Shah’s patient files contained false information. Second, witness testimony about Shah’s
billing practices support the “reasonable estimate” of loss from Shah’s health care fraud
scheme. United States v. Kolodesh, 787 F.3d 224, 239-40 (3d Cir. 2015). Shah
instructed his third-party biller to continue billing “[a]ll four codes” despite insurers’
warnings against such billing. App. 836. In addition, insurers notified Shah that he
improperly submitted unbundled bills that were not substantiated by medical necessity.
Third, treating 50% of Shah’s ECP billing as legitimate is generous to Shah given the
“extensive and pervasive” nature of his scheme. See United States v. Hebron, 684 F.3d
554, 563 (5th Cir. 2012). Fourth, and relatedly, estimation was the only means to
calculate the loss. Shah’s records contained fraudulent information. Thus, they did not
13
Indeed, as the District Court observed in its discussion of the 50% reduction,
“the vast majority of the submitted claims under consideration were fraudulent” because
any of the following factors were present: (1) patient without a qualifying condition; (2)
records were “fraudulently created . . . after-the-fact;” (3) ECP treatment was
administered when a physician was not present; or (4) billing of unbundled codes without
justification. App. 48-49.
14
provide a reliable basis to determine if any of the ECP treatments were medically
necessary. See id. (affirming loss calculation because the defendant “should not reap the
benefits of a lower sentence because of his ability to defraud the government to such an
extent that an accurate loss calculation is not possible”); United States v. Miell, 661 F.3d
995, 1001 (8th Cir. 2011) (affirming loss calculation that subtracted average amount
defendant returned—rather than actual amount, due to practicality of reviewing over
2,500 files—because proceeds “were systemically tainted with fraud” such that “it was
difficult, if not impossible, to give [the defendant] any credit for parts of his claims that
might have been legitimate”). 14
For these reasons, Shah’s procedural challenge fails.
2
Shah’s sentence was also substantively reasonable as we cannot say that “no
reasonable sentencing court would have imposed the same sentence on that particular
defendant for the reasons the district court provided.” United States v. Tomko, 562 F.3d
558, 568 (3d Cir. 2009) (en banc). First, the sentence is within the applicable Guidelines
range of 78 to 97 months, U.S.S.G. § 5A, so we may presume that it is reasonable, Rita v.
United States, 551 U.S. 338, 347 (2007).
14
Shah cites United States v. Jones, 641 F.3d 706 (6th Cir. 2011), but that case is
distinguishable. Among other things, the Jones court called the extrapolation method
used there “into question” because it appeared the district court “[did not] even realize[]
that . . . fifty-four [of over 250] files were missing and . . . did not make a finding as to
whether they were fraudulent.” Jones, 641 F.3d at 712. Here, in contrast, the District
Court found that because Shah would “fraudulently create [patient] files after-the-fact
and solely for the benefit of receiving payment,” records that could establish which
treatments were fraudulent likely “did not exist.” App. 47-48.
15
Second, considering the totality of the circumstances, Tomko, 562 F.3d at 567,
Shah’s sentence was not greater than necessary given the seriousness of his offense and
the need for specific deterrence, 18 U.S.C. § 3553(a)(2)(A), (B). As to seriousness, Shah
billed insurers for millions of dollars in ECP treatments where they were either not
medically necessary for the patient or delivered without the required physician
supervision or both.
As to the need for specific deterrence, Shah twice failed to appear for his court
dates, leading the Court to issue arrest warrants. His failure to appear as required by
court order was consistent with his flagrant disregard for his obligations to his patients to
provide only medically necessary treatment and to follow the rules ensuring he was
reimbursed for only such services. His conduct reflects that he did not believe the rules
applied to him.
Because we cannot say that no reasonable sentencing court would have imposed
the same sentence, Shah’s substantive challenge fails.
III
For the foregoing reasons, we will affirm.
16