HLD, v. 33, n. 7 (July 2005)
Sixth Circuit Says
Evidence Of DME Provider's High Profit Margin Was Relevant To Establish Motive In
The Sixth Circuit held that
evidence showing the high profit margin received by the owner of a durable
medical equipment (DME) provider was relevant and admissible to establish
motive in a case involving healthcare fraud, mail fraud, illegal kickbacks,
money laundering, and engaging in illegal transactions.
The case involved Hussein Amr,
owner of a DME company called United States Medical Supply (USMS), who
allegedly (1) induced patients to purchase power wheelchairs that they did not ask
for or need, (2) offered free lift chairs to induce patients to purchase power
wheelchairs, (3) failed to offer patients the option of renting rather than
purchasing, (4) charged for accessories that were already included with the
chairs, and (5) inflated repair charges.
A jury found Amr guilty on
twenty-two counts and returned a forfeiture verdict of $1,015,384.55. Amr
appealed on the issue of whether the district court erred in allowing the government
to introduce evidence establishing that USMS was making a profit of over $4,000
per power wheelchair, a portion of which was obtained by up-coding. Specifically,
Amr argued that such evidence was irrelevant, or that its probative value was
substantially outweighed by the danger of unfair prejudice.
The appeals court affirmed the
judgment below. The appeals court found the evidence of the high profit margin
"highly relevant to show why the Defendant, in violation of Medicare rules,
steered patients who expressed interest only in lift or manual chairs to
purchase power wheelchairs and did not inform the patients that they had a
right to lease the chairs." Thus, the appeals court concluded that the evidence
was relevant to establishing Amr's motive. The appeals court also found the
evidence was prejudicial only in the sense that it damaged Amr's case, "and not
that it suggested a decision to the jury on an improper basis."
United States v. Amr, No. 03-2131 (6th Cir. May 25,
2005). To read the case, go to http://www.ca6.uscourts.gov/opinions.pdf/05a0434n-06.pdf