Criminal – Medicaid fraud convictions overturned

Where the government was required to prove that the defendant submitted claims for services that were actually not rendered on two specific days, in order to convict him of scheming to defraud Medicaid by overbilling for counseling services, but the testimony at trial from the two providers did not provide this required testimony, his convictions were vacated.

Background

After a bench trial, the district court found Richard Davis, the former director of a mental health counseling company, guilty of scheming to defraud Medicaid by overbilling for counseling services on two specific dates: April 30, 2018, and May 9, 2018.

Sufficiency

Davis contends that the evidence wasn’t sufficient to support his convictions. This court agrees. “To sustain a conviction under 18 U.S.C. § 1347, the government was required to prove beyond a reasonable doubt that [Davis] knowingly and willfully executed a scheme to defraud.” But the government also had to prove beyond a reasonable doubt that Davis “caused to be submitted . . . false claims for [day-treatment] services not actually rendered” on the two dates in question: April 30, 2018 and May 9, 2018. That’s where the government faltered. It failed to present sufficient evidence to prove beyond a reasonable doubt that the counselors falsely billed three units to Medicaid on those two dates.

Kasi Loney

Kasi Loney logged eight hours of day treatment on April 30, 2018, which translated to three units billed to Medicaid. As long as she completed at least five hours of reimbursable work to reflect the three units billed, there’s no fraud.

Loney testified that she typically completed face-to-face treatment for between three and four hours. And she testified that care coordination and planning usually took place for two-and-a-half hours, from 11:30 to 2:00.

Both are reimbursable tasks. So for example, if Loney provided four hours of day treatment on April 30 and only one hour of care coordination, that would get her to the five hours necessary to bill three units. So too if she provided three hours of treatment and two hours of care coordination.

The government never asked Loney how much time she spent providing counseling on April 30. And while the government asked why she didn’t document care coordination on that day, it never asked whether she in fact completed reimbursable work during the midday period. Davis’s conviction on Count Three is reversed.

Hazel Bell

Hazel Bell billed three units to Medicaid on May 9. So again the question is whether proved beyond a reasonable doubt that Bell didn’t complete at least five hours of reimbursable work that day? As with Loney, the answer is no.

Bell testified that she didn’t—and couldn’t—provide two full hours of care coordination as a general rule because of her teaching job. But she documented four hours of day treatment on May 9, from 3:00 to 7:00, which the government did not challenge. And she was generally available to do Innovative work on breaks and during lunch. So if she completed at least one hour of care coordination on that day, she would have notched the five hours necessary to bill three units.

Yet again, the government failed to elicit any testimony or other evidence that Bell *didn’t *complete one hour of care coordination that day. All the government showed is that she couldn’t complete the full two hours. But that doesn’t prove beyond a reasonable doubt that Bell did not provide five hours of reimbursable services on May 9. Davis’s conviction on Count Four is dismissed.

Davis’s convictions are reversed, his sentence is vacated and the case is remanded to the district court with instructions to enter a judgment of acquittal.

Reversed, vacated and remanded.

Dissenting opinion

Wilkinson, J., dissenting:

After a four-day bench trial in which 18 witnesses testified, the district court carefully considered the evidence and found Davis guilty of two of the six counts of health care fraud that were charged in the indictment. Rather than defer to the district court’s judgment, however, the majority decides for itself that reasonable doubts exist regarding Davis’s guilt. In doing so, it demands a standard of proof that will prove insurmountable in far too many cases of health care fraud, all to the detriment of Medicaid and the public fisc. I respectfully dissent.

United States v. Davis, Case Nos. 25-4093, April 24, 2026. 4th Cir. (Diaz), from EDVA at Richmond (Gibney Jr.). Robert James Wagner for Appellant. Shea Gibbons for Appellee. VLW 026-2-160. 19 pp.

Full-Text Opinion

VLW 026-2-160
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