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Crunching the Numbers: The Sentencing Guidelines and Healthcare Fraud

Posted in Fraud and Abuse, Litigation, Medicare and Medicaid, Reimbursement Matters, White Collar

In United States v. Mehmood, the Sixth Circuit affirmed the conviction of Zafar Mehmood and Badar Ahmadani but vacated their sentences and remanded for resentencing. The two were tried and convicted for participation in a massive healthcare fraud scheme that entailed paying kickbacks and obtaining payment from Medicare for fictitious patients.At sentencing, the district court determined that “the full amount of billings submitted by Mehmood’s companies between 2006 and 2011—$47,219,535.47—constituted loss for sentencing purposes.” In doing so, it “determined that none of Mehmood’s claims were legitimate—and thus could not be offset against the aggregate billings—because Mehmood obtained access to the Medicare program by certifying that he would not engage in kickbacks,” but he had no intention of abiding by that promise.

On appeal, the Sixth Circuit rejected the district court’s approach because the guidelines require “the aggregate dollar amount of fraudulent bills submitted to the Government health care program shall constitute prima facie evidence of the amount of the intended loss.” U.S.S.G. § 2B1.1, comment. (n.3(F)(viii)) (emphasis added). And because some of Mehmood’s patients—and therefore billings—were legitimate, the district court should have deducted those from its calculation of intended loss. Therefore, the sentence was erroneous and remand was appropriate.

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