Philadelphia-Area Medicare Fraud Defendant Raises Interstate Commerce Argument In Post-Trial Motions

Posted On Thursday, March 31, 2016

This past February, Home Care Hospice Service, Inc.’s former professional services director, Patricia McGill, stood trial in the U.S. District Court for the Eastern District of Pennsylvania for 14 counts sounding in Medicare fraud.  The indictment alleged that McGill and other nurses from the Philadelphia-based company permitted the admission of more than 100 patients for medically unnecessary hospice services, for which Medicare was billed.  A jury returned a guilty verdict on four of the 14 counts.

Post-trial, McGill moved for a judgment of acquittal and, alternatively, a new trial, and the government filed its opposition to the motion on March 25. Motions for judgment of acquittal are infrequently granted, because the court must view all evidence in the light most favorable to the prosecution and grant the motion only if no reasonable trier of fact could have found the defendant guilty.  Courts are similarly reluctant to grant motions for new trial such as this one, which are not based on newly discovered evidence, absent cumulative trial errors that likely had a substantial influence on the outcome.

In an effort to carry her heavy burden, McGill advances numerous arguments regarding the import of both admitted evidence and evidence the government did not proffer.  One argument – unlikely to succeed – is of particular note for what it teaches about the federal criminal system. McGill contends that the government offered no direct proof of the effect that the Medicare fraud had on interstate commerce, which is an element of the offense.

To be sure, there is facial appeal to that argument. Defining crimes is traditionally the province of states and localities. Federal crimes must be founded in the U.S. Constitution, and the nexus for most is the Commerce Clause.  Here, the charged Medicare fraud must affect interstate commerce to be constitutionally valid.  However, as demonstrated by the generations-long expansion of the federal criminal code, an offense’s connection to interstate commerce need not be significant. Consistent with the governing law, the McGill court instructed the jury that “[a]ffecting interstate commerce means any action, which in any way interferes with, changes, or alters the movement or transportation or flow of goods, merchandise, money, or other property in commerce between or among states.  The effect can be minimal.”

McGill does not argue that the charged offense has no effect on interstate commerce – a contention that would be difficult to support in light of the complex state of health care delivery. Rather, she argues that the government neglected to present testimony on the issue, thus creating “a failure of proof of [a] critical element[] of the offense.” The government quips that the argument “borders on the frivolous,” and, while that response may be an overstatement, given the lack of direct precedent, governing case law has endorsed the general notion that juries may infer an effect on interstate commerce from the totality of the evidence. See, e.g., United States v. Haywood, 363 F.3d 200, 210 (3d Cir. 2004). Furthermore, a rule requiring the government to present direct testimony on interstate commerce would be difficult to reconcile with the approach that has permitted the federalization of crimes that have only a minimal or hypothetical effect on interstate commerce.

If McGill does not prevail on her post-trial motions, her case will proceed to sentencing.  The U.S. Sentencing Guidelines advise a sentence of imprisonment with the range of 33-41 months.  However, the court has discretion to depart from that range, either upward or downward, based on a number of factors identified in the Guidelines or the U.S. Code, including her history and characteristics and the nature and circumstances of the offense.