Overbilling Medicaid is also aggravated identity theft, says full 5th Circ


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[MM Curator Summary]: A recent ruling may bring a harsher treatment of Medicaid fraud, including a mandatory addition of 2 years to sentencing.


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  • En banc court divides 10-8, with five separate opinions
  • Dissents point to circuit split, SCOTUS warning against ‘breathtaking’ scope

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(Reuters) – A federal appeals court on Wednesday affirmed that overbilling Medicaid for services to a patient is not just healthcare fraud, but “aggravated identity theft” under a separate statute that includes a mandatory two-year sentence enhancement.

The full 5th U.S. Circuit Court of Appeals divided 10-8 on the question of whether David Dubin, who managed billing for his father’s psychology practice in Texas, violated the identity-theft law by falsifying the date and scope of services provided to “Patient L” – a real patient who had authorized him to bill Medicaid for the services provided.

A three-judge panel had affirmed Dubin’s convictions, one-year sentence for Medicaid fraud, and two-year sentence for identity theft related to Medicaid fraud in 2020. However, one judge pointed to a split in the federal circuits that led the 5th Circuit to grant en banc review last year.

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Dubin’s lawyers at Gross & Esparza and O’Melveny & Myers argued that the enhancement statute must require misrepresentation of the patient’s identity, not just misrepresentation of services, or the “enhancement” would increase the sentence for every case of Medicaid fraud. They drew amicus support from the National Association of Criminal Defense Lawyers.

The eight dissenters agreed, with separate opinions by Circuit Judge Janet Elrod and Gregg Costa highlighting 1st, 6th, 7th, 9th, and 11th Circuit decisions that support Dubin’s arguments. Costa also noted that the U.S. Supreme Court has repeatedly cautioned appellate courts not to interpret federal criminal statutes in a “breathtakingly” broad manner.

However, Chief Circuit Judge Priscilla Owen and eight other judges rejected that argument in a one-page per curiam decision. In a separate concurrence, Owen noted that the statute enhances the penalty for specified offenses, including Medicaid fraud, whenever an offender “uses” the patient’s identity “without lawful authority.” She praised the 4th Circuit’s view that overbilling violates the statute because it is beyond the scope of what the patient authorized.

Either way, “benefits were paid because the criminal used a person’s means of identification as the key to duping the government,” Owen wrote.

Judge Andrew Oldham provided the tenth vote to affirm, but solely on procedural grounds: he said Dubin waited too long to question what constitutes “use” under the identity-theft statute.

“In some future case, where the ‘use’ question is properly preserved, it might be wise for our court to reconsider our interpretation,” Oldham wrote.

Attorneys for both sides did not immediately respond to requests for comment on Wednesday.

The case is USA v. David Fox Dubin, 5th U.S. Circuit Court of Appeals, No. 20-50912.

For the USA: Joseph Gay Jr, Elizabeth Berenguer and Mark Randolph Stelmach of the U.S. Attorney’s Office for the Western District of Texas

For Dubin: Michael Clark Gross of Gross & Esparza; Anton Metlitsky and Jason Zarrow of O’Melveny & Myers

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Clipped from: https://www.reuters.com/legal/litigation/overbilling-medicaid-is-also-aggravated-identity-theft-says-full-5th-circ-2022-03-04/