The four convicted defendants in the Kansas City Medicare kickback case have had three weeks to get used to the idea that a federal jury of 12 Kansans found them to be felons who paid and accepted bribes for patient referrals.
That doesn't mean they've given up the fight.
Lawyers for the four-former hospital executives Dan Anderson and Dennis McClatchey, and physicians Robert LaHue, D.O., and Ronald LaHue, D.O.-say they are evaluating their legal options and will pursue other strategies to get the verdicts thrown out. If all else fails, they will file an appeal.
Anderson was chief executive officer and McClatchey was chief operating officer at Baptist Medical Center in Kansas City, Mo., in 1984, when the hospital began paying $75,000 a year to each of the LaHue brothers to refer their nursing home patients to the hospital. The defendants asserted that the LaHues came up with a new program designed to provide integrated care to those patients. The U.S. attorney's office for Kansas said it was nothing but a cash-for-patients scheme, illegal under federal law.
After a nine-week trial under U.S. District Judge John Lungstrum, the four were convicted on conspiracy and bribery charges in federal court in Kansas City, Kan., on April 5.
Anderson is the first hospital CEO convicted of criminally violating anti-kickback provisions of the Medicare and Medicaid fraud-and-abuse statutes. Those provisions bar offering any form of remuneration to induce the referral of Medicare or Medicaid patients.
McClatchey, reached at home last week, said "I'm doing a little better." But he referred questions to his lawyer, Charles German.
German said the defense team is preparing post-trial motions for the court. Those motions are due May 12. The government must respond by June 11. The defense's final brief on the motions is due June 21.
After June 21, German said, the court will schedule a hearing or simply rule on the motions. If the verdict stands, sentencing is set for Aug. 16. All of the defendants face possible prison time.
"That would be the second point of engagement," German said. "If things have not been resolved satisfactorily by that time, the next step of course would be the appeal."
Attorneys for Anderson and the LaHue brothers said possible grounds to set aside the verdict would be a jury instruction that was too restrictive and insufficient evidence of criminal intent (April 12, p. 14).
Alice Gosfield, a healthcare attorney in Philadelphia, said if the verdicts aren't overturned, the case is certain to be appealed. For practicing attorneys who give advice to hospitals, she said, "The question is, what kind of precedent will come out at the appellate court level? It is very difficult to draw conclusions from a verdict in a trial where you weren't there to hear the fact pattern. Outside the courtroom all you hear is other people's versions of the fact pattern. That's not good enough to affect a lawyer's advice to a client."
Because there have been so few criminal prosecutions of healthcare executives under the anti-kickback statutes, lawyers are on pins and needles trying to analyze the significance of this case.
Over the past 10 years, Gosfield said, the environment has become more and more frightening as the government "has consistently and without exception continued to ratchet up the war on fraud and abuse."