A 2018 Sixth Circuit panel upheld a jury verdict convicting Dr. Richard Paulus of submitting fraudulent medical claims. That same panel, with 2020 hindsight(!), reversed that conviction. It held that the trial court’s order unconstitutionally blocked exculpatory evidence.
Jury Verdict Set Aside
The “twisted” history of the verdict began when a jury deadlocked twice and needed an Allen charge in order to convict Dr. Paulus of billing angiograms that were unnecessary. The trial court rejected the jury’s verdict and set aside the conviction: a doctor’s decision about the degree of blockage of an artery was a matter of subjective medical opinion that “could be neither be false nor fraudulent.” The government disagreed and appealed. (Double jeopardy does not prevent appeal of a judgment of acquittal after verdict.)
In the first appeal, the panel (McKeague, Batchelder, Griffin) recognized the difficulty of distinguishing a fraudulent medical opinion from mere expert disagreement. Relying on the U.S. v. Persaud, however, the panel reaffirmed that fraud occurs when a doctor deliberately inflates artery blockage in order to bill for unnecessary procedures. The panel emphasized that “it is up to the jury – not the court – to decide whether the government’s proof is worthy of belief.” Deferring to the jury, the panel reversed, reinstated the conviction, and remanded the case for sentencing.
Claim of Brady Violation
Before sentencing, Dr. Paulus learned that his hospital had audited his angiograms long before trial. More important: the government knew about the audit but did not disclose it. That audit revealed a 7% rate of misdiagnosis whereas government experts testified during trial to a nearly 50% error rate. Dr. Paulus moved for a new trial, claiming that the government withheld exculpatory evidence in violation of Brady v. Maryland. Continue Reading