The opinion
Case: 09-30039 Document: 00511060110 Page: 1 Date Filed: 03/23/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 23, 2010
No. 09-30039 Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA
Plaintiff - Appellee
v.
MARIA CARMEN PALAZZO, M D, Ph D, MMM,
Defendant - Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:05-cr-00266-MVL-SS
Before JOLLY and DENNIS, Circuit Judges, and BOYLE, District Judge.*
PER CURIAM:**
This appeal arises out of a jury conviction for Medicare fraud. Because the
evidence was sufficient to support the verdict, the indictment was not
duplicitous, and the district court did not err in admitting a demonstrative aid
or in calculating the loss and forfeiture amounts, we AFFIRM.
*
District Judge, Northern District of Texas, sitting by designation.
**
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 09-30039 Document: 00511060110 Page: 2 Date Filed: 03/23/2010
No. 09-30039
BACKGROUND
Maria Carmen Palazzo (“Palazzo”) is a psychiatrist who, until 2005,
operated a private psychiatric practice in New Orleans, working out of both an
office on the seventh floor of the Gumbel Building and her home. From the
Summer of 2000 until March 2005 Palazzo was also the medical director of the
Touro Infirmary Partial Hospitalization Program (“PHP”), which was located on
the eighth floor of the Gumbel Building. Evidence of the following facts was
adduced at trial through the testimony of numerous employees of PHP, among
other witnesses. PHP was a psychiatric unit that was designed to function as a
bridge between inpatient and outpatient facilities. PHP employed social workers,
therapists, and nurses, all of whom were paid by Touro. PHP operated Monday
through Friday, from about 8:30 a.m. to 2:30 p.m. The patients were either
eating breakfast or lunch, in group therapy, or taking smoke breaks at all times
during that period. Many of the patients were transported to and from PHP by
bus. In addition to her private practice and her role at PHP, Palazzo, during the
time period in question, conducted utilization review for Mississippi Medicaid
claims, reported spending more than 50 percent of her time on her real estate
business, served as an expert witness for a forensic referral service, contracted
with other mental health centers to provide on-site care at those facilities,
acquired a master’s degree in medical management, and conducted clinical drug
trials.
On June 14, 2007, Palazzo was charged under a superseding indictment
with 40 counts of violating 18 U.S.C. § 1347.1 These charges can be grouped into
three general means of executing the overall scheme of defrauding Medicare; we
consider the evidence underlying these convictions according to this division.
1
Palazzo was also charged with 15 counts of violating 21 U.S.C. §§ 331(e) and
333(a)(2). These counts concern drug studies conducted by Palazzo and are not at issue in this
appeal.
2
Case: 09-30039 Document: 00511060110 Page: 3 Date Filed: 03/23/2010
No. 09-30039
In Counts 1-14, Palazzo was charged with billing Medicare for services
that did not qualify for the codes with which she billed them. These counts cover
instances in which Palazzo billed Medicare using a code for professional services
classified as Evaluation and Management (“E&M”) services, which require face-
to-face visits between a physician and a patient and require at the least that the
patient be present when the services are performed. The Government produced
evidence that Palazzo had her assistant bill Medicare every morning before any
services were rendered. The census for the day was faxed to Palazzo’s office on
the seventh floor every day and billing was prepared by 8:30 or 9:00 a.m. Palazzo
herself visited PHP only about three times a week, staying only 10-20 minutes.
When Palazzo did come she did not arrive at PHP until at or near the end of the
patients’ day. During the time Palazzo was at PHP the patients were in group
therapy or were leaving on the bus. Palazzo did not have a private room where
an E&M visit could have been conducted, and only saw the patients while they
were in group therapy with another therapist or when she boarded their bus
briefly as it was leaving. Various witnesses testified that they never saw Palazzo
conduct a single individual session with a single patient at PHP.
Counts 1-14 specifically cover occasions on which Palazzo billed Medicare
for “E&M subsequent visit” codes 99232 and 99233. These types of visits require
at least two of three components: a detailed history, a detailed examination, and
medical decision-making of high complexity. The suggested Medicare guideline
time factors for 99232 and 99233 visits are 25 and 35 minutes per patient,
respectively. Consistent testimony from the witnesses established that none of
the billings covered by Counts 1-14 were performed in the presence of patients,
much less in direct interaction with them. Instead the billings were submitted
for what Palazzo called “treatment teams,” which were meetings held after the
patients left PHP at which the nurse, social workers, and PHP staff discussed
patient progress and Palazzo typed notes on her computer which were later
3
Case: 09-30039 Document: 00511060110 Page: 4 Date Filed: 03/23/2010
No. 09-30039
placed in patient charts. A Medicare expert presented by the Government
testified at trial that such meetings could not be given an E&M code because
there were no face-to-face meetings with patients as the codes require.
In Counts 15 and 17-27 2 , Palazzo was charged with billing for services
performed by her physician’s assistant (“PA”), Natalie Prejean (“Prejean”), as if
she had performed them herself. Prejean was licensed under state law to
practice medicine under the supervision of a practicing physician, and Palazzo
obtained a Medicare PIN for Prejean so that she could bill Medicare for Prejean’s
services. However Palazzo billed Medicare under her own PIN for services that,
the evidence showed, Prejean provided at PHP while Palazzo was not present.
Medicare establishes different billing options for PA services depending on
whether the facility in which the services are performed is an inpatient facility
or a doctor’s office. PHP occupies a grey area between these two categories, but
the evidence produced at trial proved that Palazzo did not bill Prejean’s services
properly whether PHP is considered an inpatient or outpatient facility.
Assuming PHP to be an inpatient facility, Palazzo could have legally
obtained reimbursement for Prejean’s PA services to patients in two ways: (1)
through Prejean’s PIN, which provided reimbursement directly to Palazzo at 85
percent of the scheduled fee amount, or (2) as a service “incident” to Palazzo’s
services, in which case Medicare would reimburse the hospital at 100 percent of
the scheduled fee amount. Instead of using either of these proper avenues,
however, Palazzo billed Medicare for Prejean’s services using Palazzo’s own
Medicare PIN, thereby receiving 100 percent of the scheduled fee directly for
services that Prejean had performed. During one week that Palazzo was
overseas Prejean’s services were billed under her own Medicare PIN (producing
a reimbursement of 85 percent of the scheduled fee amount), but this was the
2
Count 16 was dismissed before trial.
4
Case: 09-30039 Document: 00511060110 Page: 5 Date Filed: 03/23/2010
No. 09-30039
only time that any services were billed under Prejean’s PIN. If, on the other
hand, PHP was considered an outpatient facility/doctor’s office, Palazzo could
have billed Prejean’s services as “incident to” Palazzo’s services using Palazzo’s
own Medicare PIN and received 100 percent of the scheduled fee, but only if she
had direct personal supervision over Prejean while the services were provided.
This form of supervision requires that the supervising physician be physically
present in the office suite and immediately available to direct or assist the PA.
It would not have been sufficient for Palazzo to be in her seventh floor office
suite while Prejean was in the PHP on the eighth floor, much less not present
in the building at all (as the Government’s evidence showed was usually the
case).
Further, the Government’s Medicare expert testified at trial that not only
did Palazzo incorrectly bill these services under either theory, but that the
services were in fact not billable at all as E&M services. The activities performed
by Prejean for which Palazzo was billing Medicare under Palazzo’s PIN took
place in the 15-60 minutes Prejean spent at PHP on an average day, during
which she saw patients, sat in group therapy, talked to staff, and wrote progress
notes. Prejean testified that her activities at PHP were not consistent with her
understanding of the kind of services that qualify as E&M services and that she
did not have sufficient time to have more than minimal contact with the
patients.3 According to the Government’s Medicare expert these services were
not billable because they were not medically necessary, were not E&M-coded
services, and were not supervised under the “incident to” framework available
for services provided by a PA in a doctor’s office when the doctor is physically
present to supervise or help. In fact patients receiving group therapy
3
At some point Prejean learned that Palazzo was signing and taking credit for the
notes she wrote while at PHP; she subsequently began signing the notes herself.
5
Case: 09-30039 Document: 00511060110 Page: 6 Date Filed: 03/23/2010
No. 09-30039
categorically cannot receive an Evaluation and Management service at the same
time.
Counts 28-40 concern the period from July 17, 2000 until October 31, 2004,
during which Palazzo was a consultant and/or medical director for Touro’s in-
patient psychiatric unit and PHP and contracted to provide administrative
services to or on behalf of Touro. Palazzo was paid $150 an hour for these
services and made the maximum allowable salary of $144,000 a year. Palazzo’s
contract specified that any reimbursement Touro received for the contract would
come through Medicare, and that any change in the method of Medicare
reimbursement relative to the contract would amend the contract. One of the
contract documents also made clear that if Palazzo was performing services for
Touro during a given time period she could not bill anyone else for the same
period of time. Touro reimbursed Palazzo based on monthly invoices she
submitted for time she spent doing administrative work for the hospital
pursuant to her contract. Touro listed the payments it made to Palazzo for this
work on annual cost reports submitted to Medicare as operational costs and
received partial reimbursement for them.
The invoices that Palazzo submitted to Touro included weekly entries for
PHP staffing for between one and five hours. The Government’s evidence
included testimony that the only PHP meetings Palazzo held on days for which
she submitted invoices to Touro were treatment team meetings to discuss
patient progress, which she billed to Medicare directly, and which therefore
could not be billed to Touro under her contract. The Government also presented
several witnesses who testified that Palazzo billed Touro for meetings with them
that had never happened, and evidence that showed that Palazzo billed Touro,
on one occasion, for six hours of activity on a day when Palazzo was sitting for
two exams to complete her master’s degree, and on another occasion, billed
6
Case: 09-30039 Document: 00511060110 Page: 7 Date Filed: 03/23/2010
No. 09-30039
Touro for 14.5 hours of travel to Indianapolis for a meeting when in fact she was
in Austin attending a deposition for a legal case with no connection to Touro.
A jury convicted Palazzo of Counts 1-15 and 17-40 on April 16, 2008, and
returned a forfeiture verdict of $655,260.97. Palazzo filed a motion for judgment
of acquittal or, in the alternative, for a new trial, contending that the
Government had failed to prove she executed the health care fraud and failed to
prove criminal intent, that a demonstrative aid was erroneously admitted, and
that the district court had improperly performed the loss and forfeiture
calculations. The district court denied the motion and rendered judgment in
favor of the Government in the amount of the jury’s forfeiture verdict. Palazzo
was sentenced to 87 months in prison followed by a three-year term of
supervised release. Palazzo timely appealed.
ANALYSIS
Palazzo brings several claims on appeal: (1) that the evidence was
insufficient to support her conviction, (2) that the indictment was duplicitous,
(3) that the district court erred in admitting a demonstrative aid into evidence,
and (4) that the district court erred in calculating the loss and forfeiture
amounts. We address each in turn.
Sufficiency of the Evidence
Palazzo argues first that the evidence was insufficient to support her
conviction. This court reviews a preserved sufficiency of the evidence claim de
novo. United States v. Alarcon, 261 F.3d 416, 421 (5th Cir. 2001). The inquiry is
whether, “viewing all evidence in the light most favorable to the verdict,” a
rational jury “could have found that the evidence established the elements of the
offense beyond a reasonable doubt.” United States v. Villarreal, 324 F.3d 319,
322 (5th Cir. 2003). All reasonable inferences must be drawn in favor of the
verdict. Id.
7
Case: 09-30039 Document: 00511060110 Page: 8 Date Filed: 03/23/2010
No. 09-30039
Palazzo argues that the evidence was insufficient as to Counts 1-14
because the Government did not put on evidence as to Palazzo’s failure to meet
with the specific patients on the specific dates mentioned in those counts. The
Government presented testimony from multiple witnesses, however, that
Palazzo never met with a patient individually. The testimony indicated that
Palazzo was rarely at PHP when the patients were, and if she was, she only saw
them “en masse” in the hallway or on the bus. If Palazzo never met with any
patients individually, a clear inference can be drawn that she did not meet with
the specific patients charged in the indictment individually, as is required for an
E&M service. See United States v. Martinez, 588 F.3d 301, 315 (6th Cir. 2009)
(“lack of individualized patient testimony for each count in the indictment alone
does not render the evidence before the court insufficient” where jury had heard
testimony that the doctor could not have conducted the number of procedures
and consultations for which he billed Medicare). Further the consistent
testimony was that there were no patients at the “treatment team” meetings for
which Palazzo billed Medicare and which are the source of Charges 1-14, and the
Government’s Medicare expert testified that such meetings do not qualify as
Evaluation and Management activities and could not be billed as such. The
Government also presented evidence that Palazzo was employed to do high-level
administrative work by Touro Hospital and had a master’s degree in medical
management, from which a jury could rationally infer that she knew she was
billing fraudulently for services that either were not performed or did not qualify
for Medicare reimbursement under the codes she was using. The evidence was
therefore sufficient as to these counts.
Palazzo next argues that the evidence was insufficient as to Counts 15 and
17-27 because the Government failed to prove criminal intent because, she
claims, the rules for billing a PA’s services are ambiguous and confusing and she
submitted the bills in good faith. While a jury reasonably might have so found
8
Case: 09-30039 Document: 00511060110 Page: 9 Date Filed: 03/23/2010
No. 09-30039
or inferred, because the jury convicted her the proper inquiry is instead whether
it reasonably could have found or inferred the facts necessary to her conviction
beyond a reasonable doubt. The jury reasonably could have so found. The
evidence presented at trial established that whether PHP was an inpatient or
an outpatient facility, Palazzo improperly billed the services in question; that the
services in question were not reimbursable services under Medicare; that
Palazzo had applied for and received a separate PIN code for Prejean’s services
but used it only during a week that Palazzo was overseas; and that Palazzo was
hired by Touro to provide director-level administrative services and had a
master’s degree in medical management. A reasonable jury could infer from this
evidence that Palazzo was aware of the correct billing procedures and chose to
bill improperly to obtain the maximum amount possible directly, and that the
Government established an evidentiary basis from which a jury could find and
infer these facts beyond a reasonable doubt
Palazzo also argues that the fact that the district court’s failure to find
that Palazzo had perjured herself, when she testified that she was confused
about the proper billing procedures, precluded the jury’s finding that she acted
with criminal intent. The jury was not so legally constrained, however, because
“not every accused who testifies at trial and is convicted will incur an enhanced
sentence under U.S.S.G. § 3C1.1 for committing perjury.” United States v.
Dunnigan, 507 U.S. 87, 95 (1993). Perjury involves a finding of intent to testify
falsely, not simply a finding that testimony was inaccurate or false. United
States v. Collier, 527 F.3d 695, 702 (8th Cir. 2008). In other words, the district
court must find that the defendant provided “false testimony concerning a
matter with the willful intent to provide false testimony, rather than as a result
of confusion, mistake, or faulty memory.” Collier, 527 F.3d at 702.4
4
Even if the jury had been required to find that Palazzo not only knew the billings were
improper when she made them but lied on the stand, the fact that the district court did not
9
Case: 09-30039 Document: 00511060110 Page: 10 Date Filed: 03/23/2010
No. 09-30039
Palazzo’s final argument as to Counts 28-40, which concern thirteen
fraudulent monthly invoices Palazzo submitted to Touro for her services as the
hospital’s psychiatric medical director, is that the evidence was insufficient
because she intended to defraud only Touro and not Medicare. Palazzo’s reliance
on several older mail fraud cases, however, is misplaced. Kann v. United States,
323 U.S. 88 (1944) and Parr v. United States, 363 U.S. 370, 393 (1960), upon
which Palazzo relies, concerned mail fraud in which defendants who had written
fraudulent checks or made unauthorized purchases were not guilty of mail fraud
when those checks were subsequently sent to another bank or the purchase
receipts were submitted to another company, respectively. Palazzo’s contracts
with Touro, however, made clear that Touro’s source of reimbursement for any
funds paid to Palazzo was Medicare, and that any change in Medicare
reimbursement policy would cause the contracts to be amended in turn. More
analogous than the cases cited by Palazzo is United States v. Hanson, 161 F.3d
896, 901 (5th Cir. 1998), in which this court held that a defendant’s claim that
he did not commit bank fraud because his misrepresentations were made to a
mortgage company that was a subsidiary of a bank, not the bank itself, and thus
he lacked the intent to defraud the bank, “border[ed] on frivolousness.” Indeed,
the Second Circuit has rejected Palazzo’s argument in an analogous case
concerning fraudulent claims to the New York State Department of Health.
United States v. Huber, 603 F.2d 387, 400 (2d Cir. 1979) (“[R]egardless of
whether all of the invoices had already been paid [by the hospital to the doctor
before the hospital submitted them to the government for reimbursement], the
mailing to obtain reimbursement was a part of this ongoing scheme to defraud.
agree would not make the evidence insufficient. As the Eighth Circuit has explained, “a
district court might conclude that the evidence was sufficient to permit a jury to find guilt
beyond a reasonable doubt, yet not itself be convinced of the defendant’s guilt, even by a
preponderance.” United States v. Smith, 62 F.3d 641, 648 n.3 (1993).
10
Case: 09-30039 Document: 00511060110 Page: 11 Date Filed: 03/23/2010
No. 09-30039
. . . [T]he jury could find that government funding of hospital expansion was
essential to the prosperity of appellant’s fraudulent scheme.”).
Further, when a statutory scheme does not specify that
misrepresentations be made directly to the victims this Court has not read such
a requirement into the elements of the crime. See United States v. Pepper, 51
F.3d 469, 473 (5th Cir. 1995). The statute under which Palazzo was convicted
does not specify that misrepresentations must be made directly to Medicare but
only that “Whoever knowingly and willfully executes, or attempts to execute, a
scheme or artifice (1) to defraud any health care benefit program; or (2) to
obtain, by means of false or fraudulent pretenses, representations, or promises,
any of the money or property owned by, or under the custody or control of, any
health care benefit program, in connection with the delivery of or payment for
health care benefits, items, or services, shall be fined under this title or
imprisoned not more than 10 years, or both.” 18 U.S.C. § 1347. The jury was
presented with sufficient evidence to infer that Palazzo submitted invoices to
Touro knowing that Touro paid her on the basis of its ability to obtain
reimbursement from Medicare, and that Palazzo was therefore obtaining money
from Medicare, via Touro, for services she had not performed on the basis of
fraudulent invoices she knew would be submitted to Medicare. Given Palazzo’s
high-level administrative job, her master’s degree in medical management, and
the general sophistication of her scheme, the jury could easily infer that Palazzo
submitted these invoices knowing that Touro would submit them to Medicare for
reimbursement. The evidence was therefore sufficient to support the verdict on
these counts.
Duplicitous Indictment
A claim that an indictment is duplicitous is reviewed de novo. United
States v. Mauskar, 557 F.3d 219, 225 (5th Cir. 2009). A charge is duplicitous if
it joins two or more distinct and separate offenses (for instance, two or more
11
Case: 09-30039 Document: 00511060110 Page: 12 Date Filed: 03/23/2010
No. 09-30039
distinct and separate executions of a fraudulent scheme) in a single count.
United States v. Lyons, 703 F.2d 815, 821 n.8 (5th Cir. 1983). An indictment that
alleges multiple means to accomplish a single execution of a scheme is not
duplicitous. Mauskar, 557 F.3d at 225. “In reviewing an indictment for duplicity,
our task is not to review the evidence presented at trial to determine whether
it would support charging several crimes rather than just one, but rather solely
to assess whether the indictment itself can be read to charge only one violation
in each count.” Id. (internal quotation marks and citation omitted).
The indictment in this case alleged that on Mondays between August 2001
and October 2004 Palazzo falsely billed Touro for “PHP staffing” and for
“inpatient staffing,” neither of which were reimbursable under her contract with
Touro or under Touro’s contract with Medicare. Each of the charges from 28 to
40 consisted of a single invoice submitted to Touro with multiple fraudulent line
items for “PHP staffing” and “inpatient staffing.” Palazzo argues the indictment
is duplicitous because, essentially, each line item on her invoices is a separate
fraudulent execution of her overarching scheme, and therefore should not have
been listed together in the same count.
But Palazzo is incorrect. As noted, “our task [in this inquiry] . . . [is] to
assess whether the indictment itself can be read to charge only one violation in
each count.” Mauskar, 557 F.3d at 225. In this case, each invoice (and thus, each
of charges 28-40) constituted a separate execution of her scheme (which was to
defraud Medicare); the line items on a given invoice were merely means by which
Palazzo executed that scheme. “That an indictment alleges more than one means
by which [a defendant] sought to accomplish [an execution of a] scheme does not
render it duplicitous.’” Mauskar, 557 F.3d at 225 (internal quotation marks
omitted). See also Owens v. United States, 221 F.2d 351, 354 (5th Cir. 1955)
(holding that “the defrauding of different people over an extended period of time,
using different means and representations, may constitute but one scheme”).
12
Case: 09-30039 Document: 00511060110 Page: 13 Date Filed: 03/23/2010
No. 09-30039
In United States v. Adler, 623 F.2d 1287 (8th Cir. 1980), the Eighth Circuit
considered an almost identical situation. In Adler, the defendant, like Palazzo,
was charged with Medicare fraud for submitting false invoices to Medicare for
reimbursement. Each count of the indictment concerned a different invoice, and
each invoice had multiple fraudulent line items on it. The defendant challenged
the indictment as duplicitous because some of the counts involved invoices with
more than one fraudulent line item on them. The Eighth Circuit rejected this
line of reasoning, explaining that “the government charged only one crime in
each count of the indictment” and that “there may be more than one piece of
evidence to support each count, but that certainly does not make the counts
duplicitous.” Id. at 1290. In other words, each invoice was a single execution, and
the line items on each invoice were merely additional means of pursuing the
single execution. This case is essentially identical. The scheme was to defraud
Medicare by submitting falsified invoices to Touro, which would then submit
them to Medicare. Each invoice was a single execution, and the various falsified
entries that Palazzo listed on each invoice were multiple means of accomplishing
a single execution (invoice) in the overall scheme (defrauding Medicare). The
indictment was therefore not duplicitous and Palazzo is not entitled to relief on
this ground.
Demonstrative Aid
Evidentiary admissions by the district court are reviewed for abuse of
discretion. United States v. Ollison, 555 F.3d 152, 161 (5th Cir. 2009). “An error
in the admission of evidence is excused unless it had a substantial and injurious
effect or influence in determining the jury’s verdict.” United States v. Harms, 442
F.3d 367, 375 (5th Cir. 2006).
During Palazzo’s trial, after all of the testimony detailed above, the district
court admitted a chart prepared by a Government expert that showed the
number of hours per day that Palazzo claimed to have spent providing services
13
Case: 09-30039 Document: 00511060110 Page: 14 Date Filed: 03/23/2010
No. 09-30039
she had billed to Medicare. In calculating these numbers, the Government used
the guidelines suggested by Medicare for the appropriate length of time for a
doctor to spend on the kinds of treatment and activities Palazzo billed. Palazzo
argues that admitting this chart was an abuse of discretion and had a
substantial and injurious effect on the jury’s guilty verdict, primarily because
the chart was based on “time billing” and Palazzo claims to have billed based on
“key components” of services, not on time spent. Palazzo’s contention is meritless
however; the chart was properly admitted, the jury was properly instructed, and
the evidence against Palazzo was so otherwise overwhelming that no prejudice
could have resulted.
“[A]llowing the use of charts as pedagogical devices intended to present the
government’s version of the case is within the bounds of the trial court's
discretion to control the presentation of evidence under Rule 611(a).” United
States v. Taylor, 210 F.3d 311, 315 (5th Cir.2000) (internal citation and
quotation marks omitted).5 “Summary charts are, in the trial court’s discretion,
ordinarily admissible when: (1) the charts are based on competent evidence
before the jury; (2) the primary evidence used to construct the charts is available
to the other side for comparison in order that the correctness of the summary
5
Although the Government argues that the chart was admissible either as a
demonstrative aid under Federal Rule of Evidence 611(a) or as a summary of voluminous
evidence under Federal Rule of Evidence 1006, it is clear that the district court admitted the
chart as the former and not the latter. Charts summarizing voluminous material under
Federal Rule of Evidence 1006 are admitted as evidence themselves when the evidence
underlying them is too voluminous to be effectively presented, while pedagogical or
demonstrative aids submitted under Federal Rule of Evidence 611(a) are not introduced into
evidence, but merely shown to the jury to help them understand evidence that has already
been admitted into the record. United States v. Buck, 324 F.3d 786, 790-91 (5th Cir. 2003). In
this case, the district court’s instructions to the jury made clear that the chart was not
evidence, but merely summarized evidence that had already been admitted. As such, the chart
was not a summary of voluminous evidence submitted to stand in for the evidence itself, but
was instead merely a summary of evidence already admitted, and was therefore a
demonstrative aid under Rule 611(a). See Weinstein’s Federal Evidence § 1006.08[4]; United
States v. Buck, 324 F.3d 786, 790 (5th Cir. 2003).
14
Case: 09-30039 Document: 00511060110 Page: 15 Date Filed: 03/23/2010
No. 09-30039
may be tested; (3) the person who prepared the charts is available for
cross-examination; and (4) the jury is properly instructed concerning their
consideration of the charts.” United States v. Winn, 948 F.2d 145, 159 (5th Cir.
1991). Full cross-examination and proper instructions to the jury minimize the
chance of prejudice. Id. at 159 n. 36.
In this case, the jury had been presented with evidence concerning the
fraudulent bills Palazzo submitted to Medicare for services never performed and
for services not eligible for reimbursement, and testimony from her staff about
the minimal time she spent at PHP and her complete lack of individual
interaction with patients, as well as testimony and documents concerning the
amount of time Palazzo had spent or claimed to spend on other activities (her
other jobs, her real estate business, etc.) during the period the bills were
generated. The witness who prepared the chart appeared in court and was
examined and cross-examined by counsel. The district court instructed the jury
that: “[c]ertain charts and summaries have been shown to you solely to help
explain the facts disclosed by the books, records and other documents which are
in evidence in the case. These charts and summaries are not proof of any facts.
You should determine the facts from the evidence.” The demonstrative aid met
all of the requirements for presentation, and the district court did not abuse its
discretion in allowing it to be shown to the jury.
Further, there was no prejudice to Palazzo. The evidence in the case
against Palazzo was overwhelming, even in the absence of any argument about
how many hours it was possible to bill in a day. The simple fact is that all of the
evidence presented at trial showed that Palazzo never provided any of the
services that she billed, and that those services provided by Prejean that were
billed under Palazzo’s PIN were not eligible for reimbursement. Palazzo, as an
administrative director of a major hospital who possessed a master’s degree in
medical management, was not able to convince the jury that any of this was good
15
Case: 09-30039 Document: 00511060110 Page: 16 Date Filed: 03/23/2010
No. 09-30039
faith error. Given this evidence, the question of whether Palazzo billed more
hours than were possible in a day was minor, or even irrelevant, because none
of the bills charged in the indictment were properly submitted for eligible services
actually performed. In other words, the evidence, without the chart, showed that
Palazzo had never performed any of the services in question and that none of the
services submitted were eligible for reimbursement, and therefore the
implication created by the demonstrative aid, if any, that she could not have
performed all of the fictitious services in the time she claimed was not
prejudicial. See Winn, 948 F.2d at 157-58 (holding that any error in admission
of demonstrative aid was harmless because evidence of defendant’s guilt was
overwhelming).
Loss & Forfeiture Calculations
Factual determinations regarding loss amount for Guideline calculation
purposes are reviewed for clear error. Ollison, 555 F.3d at 164. With regard to
forfeiture, the district court’s factual findings are reviewed for clear error, but
whether those facts are sufficient to constitute a proper criminal forfeiture is
reviewed de novo. United States v. Marmolejo, 89 F.3d 1185, 1197 (5th Cir.
1996).
The jury’s forfeiture verdict was $655,260.97, which the district court
found to be the loss amount as well. This number included Palazzo’s Medicare
proceeds from PHP between 2000 and 2005 ($467,666.97); her proceeds from
cross-billing the E&M services she billed to Medicare to Medicaid as well
($95,000.00); and Medicare’s full reimbursement to Touro for Palazzo’s medical
director duties ($92,594.00). Palazzo argues that the court’s determination was
clearly erroneous for several reasons.
First, Palazzo argues that even if she improperly billed Medicare for
activities performed by Prejean, her PA, in Counts 15 and 17-27, the proper
billing for such activities would have been at 85 percent reimbursement, not 100
16
Case: 09-30039 Document: 00511060110 Page: 17 Date Filed: 03/23/2010
No. 09-30039
percent, and so Medicare lost only the 15 percent difference. The Government’s
evidence established, however, that the services Prejean performed were not
themselves reimbursable services, because they were coded as E&M services,
which require an individual meeting with a patient, and Prejean testified that
she did not have such meetings and that the services she was performing were
not what she considered an E&M service. Palazzo is correct that the Government
did not allege that “no services were provided,” but the Government did allege,
and prove, that no reimbursable services were provided. The district court did
not clearly err in determining that there was therefore no residual amount that
should be credited to Palazzo.
Palazzo also contends that the entire amount Palazzo billed to Medicare
includes thousands of bills submitted over five years and that the Government
did not prove that all of these bills were fraudulent. What Palazzo neglects to
specify is that the amount in question is the amount that was billed for E&M-
coded services. The Government’s evidence showed that none of the staff working
at PHP ever saw Palazzo or Prejean provide a service to patients that qualified
as an E&M service. Therefore the district court did not clearly err in finding that
the amount of money Palazzo received for E&M services – $467,666.97 – was
subject to forfeiture.
Palazzo’s next contention is that the Medicaid loss of $95,000 was
erroneous because that is the amount of Palazzo’s entire Medicaid
reimbursement, including PHP, inpatient, and outpatient billings from 2000 to
2005. The Government, however, showed that the billings to Medicaid were
cross-payments made for services billed to Medicare arising out of Palazzo’s PHP
billings. In other words, the $95,000 in question was billed to Medicaid as a
secondary insurer (which would pay for certain amounts of the claim that were
not covered by Medicare) for the same PHP services that the Government
17
Case: 09-30039 Document: 00511060110 Page: 18 Date Filed: 03/23/2010
No. 09-30039
showed were never performed. The district court therefore did not clearly err in
calculating this part of the loss amount.
Finally Palazzo contends that it was error to include the entire $92,594
that Medicare paid Touro as reimbursement for Palazzo’s medical director
services because the Government did not prove that every entry on her medical
director invoices was fraudulent. Palazzo does not provide any authority for the
proposition that she is entitled to a credit for unenumerated services she may or
may not actually have provided to Touro. Further, Palazzo does not provide any
calculations as to what portion of the amount should not have been counted,
identify any particular services that were legitimately performed and billed, or
cite to any authority for her argument. She has therefore failed to show any
error on the district court’s part.
CONCLUSION
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
18