Criminal Convictions for Maryland Cardiologist Upheld on Appeal

Published on May 27, 2013 at 2:29 pm in General Blogs.

A federal appeals court has upheld the criminal convictions of a Maryland cardiologist accused of implanting unnecessary stents in patients. The United States Court of Appeals for the Fourth Circuit rejected John McLean’s claims that there wasn’t enough evidence to convict him of several counts of healthcare fraud.

McLean, an interventional cardiologist, was in private practice in Salisbury, Maryland and held privileges at Peninsula Regional Medical Center (PRMC). He performed cardiac catheterizations and coronary stent procedures.

PRMC started investigating his stenting practices in 2006 after a quality control review revealed he had placed a stent in a coronary artery with no significant blockage or “stenosis.” An outside contractor confirmed that McLean had performed inappropriate stents in about half of 25 randomly selected cases. Shortly thereafter, McLean resigned his hospital privileges after telling PRMC that he had developed an eye condition causing vision loss in one eye. However, McLean continued to see patients and review diagnostic test results in his office.

In 2007, federal investigators – acting on a tip that patient records were in peril – arrived at McLean’s office. They found files stacked on McLean’s desk and a shredder nearby. McLean admitted that he was removing documents from the files for shredding.

McLean was indicted on one count of health care fraud and six counts of knowingly and willfully making false statements in connection with the delivery of and payment for health care services in violation of federal law. In the health care fraud charge, the government alleged that McLean executed a scheme to defraud Medicare, Medicaid and private insurers by submitting claims for medically unnecessary procedures and testing. The false statements charges related to allegations that McLean willfully misrepresented the level of stenosis in patient arteries.

The jury convicted Dr. McLean on all counts. He was sentenced to 97 months of imprisonment and three years of supervised released and entered forfeiture and restitution orders of $579,070. McLean appealed. The judges unanimously rejected his arguments.

McLean argued on appeal that the health care fraud statute is unconstitutionally vague as applied to him; that the evidence was insufficient to support his convictions on all counts and that his trial was prejudiced by the government’s failure to disclose impeachment evidence and certain erroneous evidentiary rulings committed by the district court. McLean also contended that the case should be remanded for resentencing because his sentence was procedurally unreasonable.

McLean said the healthcare fraud statute is vague because no clear standard of medical necessity governed the use of coronary artery stents during the time he was practicing. McLean said the statute is unconstitutionally vague because no government statute or professional guideline defined the stenosis level needed to justify a coronary stent. As a result, he had no way of knowing whether his conduct was prohibited.

“We disagree,” the court said. A statute is unconstitutionally vague if it fails to provide people of ordinary intelligence a reasonable opportunity to understand what conduct it prohibits or if it authorizes or encourages arbitrary and discriminatory enforcement. The health care fraud statute makes it a crime to knowingly and willingly execute a scheme to defraud any health care benefit program or to obtain by any means of false or fraudulent representations any of the money of any health care benefit program in connection with the delivery of or payment for health care benefits, items or services. Although the statute does not explain every possible fraud, an average person would understand that this kind of conduct is prohibited, the court said.

McLean also argued that his convictions on all counts were not supported by sufficient evidence. The government was required to prove beyond a reasonable doubt that McLean knowingly and willfully executed a scheme to defraud insurers by billing for medically unnecessary procedures. “After carefully reviewing the record, we conclude that substantial evidence supports McLean’s conviction,” court said. The court first pointed out that McLean’s habit of overstating blockages by a wide margin and placing unnecessary stents in a large number of cases was direct evidence of a fraudulent scheme. The court also said there was sufficient evidence to rule out non-criminal explanations for McLean’s overstatements.

There was also sufficient evidence to prove McLean had a financial motive for the fraudulent scheme because he received reimbursement for each stent procedure as well as for a series of regularly scheduled diagnostic tests after the stenting. This evidence showed that stenting provided a significant source of reimbursement for McLean’s private practice, the court said.

The court also rejected McLean’s arguments about false statements. The government was required to prove beyond a reasonable doubt that McLean knowingly and willingly made materially false or fraudulent statements in connection with the delivery of or payment for health care benefits, items or services. Given the sheer disparity between the stenosis McLean recorded and what the angiograms showed and other evidence of fraud, there was sufficient evidence for the jury to conclude that McLean intentionally overstated stenosis levels, the court said. Further, the misrepresentations were material as they were necessary for McLean to justify the stents and obtain reimbursement from insurers, the court said. As a result, the court held that there was substantial evidence to support the false statement convictions.

Finally, McLean argued that the evidence was insufficient as to all counts because the government failed to prove beyond a reasonable doubt that an objective standard of medical necessity existed. There was ample evidence that a standard existed, the court said. Both government experts testified that stents are not justified unless there is 70 percent or more stenosis in an artery and the patient suffers from symptoms of blockage. McLean was aware of this standard because he referred to in a letter to the hospital, the court said. Even taking into account expert witness disagreement with this standard, the evidence clearly showed that stents are objectively unnecessary in cases of less than 50 percent stenosis, the court said.

McLean also argued that the government’s failure to disclose that it had reached an agreement with PRMC to settle a civil fraud investigation of the hospital for being aware of and failing to take action to prevent McLean’s medically unnecessary procedures, violated his due process rights because he could have used the information to impeach the PRMC witnesses. The due process clause of the Fifth Amendment requires the government to disclose favorable impeachment evidence to the defendant. The court said it found no due process violation because the settlement information had little impeachment value and there was no reasonable probability it would have affected the jury’s verdict.

This case is quite similar to the lawsuits against former St. Joseph Medical Center cardiologist Mark Midei now making their way through the civil court in Baltimore County. This law firm is handling several of those cases. Midei was also accused of overstating the level of stenosis and performing unnecessary stent procedures. St. Joe’s has agreed to pay Medicare millions of dollars for overcharges in connection with Midei’s unnecessary procedures. Midei was stripped of his medical license. It is unclear whether criminal charges have or will be brought against him, but the number of patients St. Joe’s identified in its internal review as having received unnecessary stents certainly makes it likely that he will face criminal charges.

The case is United States of America v. John McLean.

Baltimore, Md.-based Belsky, Weinberg & Horowitz has been fighting for the victims of medical malpractice, negligence and personal injury for many years. Call us at 410-234-0100 or email us for a free consultation and let our attorneys help you.



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