United States v. Scott E. Nelson
In United States v. Nelson, No. 23-60086 (5th Cir. Aug. 9, 2024) (unpublished), the Fifth Circuit affirmed Dr. Scott E. nelson’s convictions for healthcare fraud and conspiracy to commit the same, under 18 U.S.C. §§ 1347, 1349. The court also affirmed Nelon’s 60-month prison sentence and $15,453,316.57 order of restitution.
Background: To summarize, the trial evidence showed that Dr. Nelson acted as medical director for several hospice care providers, and he would certify patients for hospice even when they did not qualify — for instance, “very few of them actually died,” and “many … did not even know they were on hospice.” As a result, hospice providers billed Medicare over $16 million, and Nelson received over $400,000 for his role as medical director.
Holding 1: There was enough evidence to convict Dr. Nelson of conspiracy to commit healthcare fraud.
The Government’s evidence showed that Dr. Nelson was the “common denominator” linking otherwise unconnected organizations involved in the Medicare fraud scheme. It also proved that employees of those organizations would go door-to-door to solicit new hospice patients, and they would transport each patient to Dr. Nelson’s office even though he was rarely their usual doctor. Ultimately, it was “very rare” for Dr. Nelson not to certify a prospective patient as hospice eligible, even though it was “very, very rare” for one of them to die while in hospice care — several were alive to testify at trial, ten years after Dr. Nelson had certified them for hospice.
Although the Government presented no direct evidence that Dr. Nelson agreed with anyone to commit healthcare fraud, the circumstantial evidence here was sufficient.
Holding 2: There was enough evidence to convict Dr. Nelson of each of the seven counts of healthcare fraud.
Dr. Nelson argued that the evidence failed to show he knew his patients were not ill, but the Fifth Circuit disagreed. In the court’s words, “[o]f the seven individual patients for whom Nelson was convicted of defrauding Medicare, he personally examined four of them. Three of those patients testified at trial that they were not terminally ill at the time Nelson examined them. They also testified that no one ever told them they were placed on hospice, and they never believed they needed to be on hospice.”
Moreover, Dr. Nelson “electronically certified the other three patients for hospice care without examining them.” None of those three patients died, and all three testified against Dr. Nelson at trial. In fact, “it is telling that the jurors saw six of these seven patients come into court and take the stand in person. Nelson certified each patient for hospice eligibility between 2012 and 2014. Thus, when they testified in 2022, it had been nearly a decade since they received a terminal diagnosis.”
Holding 3: The district court correctly calculated the loss amount for Dr. Nelson’s Sentencing Guidelines and restitution.
The Government bears the burden of providing the loss amount to be used in a defendant’s Guidelines calculations, but when the fraud is “so extensive and pervasive that separating legitimate benefits from fraudulent ones is not reasonably practicable,” the burden shifts to the defendant to prove certain amounts were legitimate. United States v. Hebron, 684 F.3d 554, 563 (5th Cir. 2012). Here, Dr. Nelson was the referring physician for over 7,000 hospice claims that led to over $16 million in Medicare payments, supported by “thousands and thousands of medical records.” There was sufficient evidence that his fraud was pervasive.