Key Points

  • The Fifth Circuit affirmed chiropractor Benjamin Tekippe's 84-month sentence for health care fraud against Blue Cross and Blue Shield of Louisiana.
  • The panel held that the district court's finding of pervasive fraud was at least plausible and survived clear-error review.
  • Under United States v. Hebron, a showing of pervasive fraud shifts the burden to the defendant to prove that particular amounts were legitimate.
  • Twenty-five patient declarations did not carry that burden because legitimate services are not necessarily legitimate claims under the insurer's policies, and the declarants' claims were under a quarter of the total.
  • The district court considered the declarations and found that Tekippe's proposed lower loss figure would not change the guideline enhancement.

A federal appeals court on Oct. 12 upheld an 84-month prison sentence for a Louisiana chiropractor convicted of defrauding Blue Cross and Blue Shield of Louisiana. The court rejected his argument that 25 declarations from patients he personally treated should have reduced the roughly $754,000 loss figure used to calculate his sentence.

A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit affirmed the sentence of Benjamin Tekippe, who owned and operated Metairie Chiropractic & Rehab. Judge Jerry E. Smith wrote the opinion for a panel that also included Circuit Judges Haynes and Engelhardt. The panel held that the trial judge permissibly found Tekippe's fraud pervasive.

The decision applies a 2012 Fifth Circuit precedent, United States v. Hebron. Under that case, once the government shows that fraud was so extensive that legitimate and fraudulent claims cannot practicably be separated, "the burden shifts to the defendant to make a showing that particular amounts are legitimate." Judge Smith wrote that "legitimate services are not necessarily synonymous with legitimate claims," meaning claims that complied with the insurer's policies.

A jury convicted Tekippe of six counts of health care fraud and one count of wire fraud after a seven-day trial in the U.S. District Court for the Eastern District of Louisiana. The jury acquitted him of making a false statement to federal agents. According to the opinion, Tekippe submitted fraudulent reimbursement claims to the insurer for about three and a half years.

At least 93% of the claims Tekippe billed to the insurer included the same six service codes. A Blue Cross investigator testified that his practice "stuck out" because he billed more for massage therapy than any other chiropractor in Louisiana. Licensed massage therapists who worked in a suite next to the clinic testified that they gave clients whatever massage they requested, typically a full body massage, and had received no chiropractic-massage training.

Employees testified that Tekippe asked massage therapists to write backdated treatment records, known as SOAP notes, and offered $2 per note. A chiropractic assistant testified that Tekippe trained staff to use a "cheat sheet" to fabricate notes for repeat patients. An insurance investigator found "hardly any differentiation from patient to patient" in one year's records. Tekippe denied intending to defraud the insurer and attributed the irregularities to ignorance, oversights and employee lapses.

Over the fraud period, Tekippe billed the insurer more than $2.3 million, and the insurer paid $740,842.36. He also received at least $12,952 in fraudulent unemployment insurance payments from the Louisiana Workforce Commission. The presentence report set a guideline range of 151 to 188 months, based in part on treating the roughly $2.3 million billed as intended loss.

Tekippe's sentencing memorandum attached the 25 patient declarations. He calculated that the declarants' services accounted for more than $450,000 billed and $158,327.14 paid, and he argued that the insurer's loss should fall to $582,515.12 "[a]t a minimum." The government countered that the fraud was pervasive and that the billings and records of several declarants contained indications of fraud.

The district judge agreed that the intended loss on the health care fraud equaled the insurer's actual loss. With the unemployment-insurance fraud added, the total loss of $753,794.36 lowered Tekippe's offense level from 33 to 31 and his guideline range to 121 to 151 months. The judge refused to exclude any payments, saying the defense had "not presented any evidence separating every legitimate claim . . . from all of the fraudulent ones." The judge sentenced Tekippe to 84 months and three years of supervised release, varying downward because the intended-loss figure produced a guideline sentence "disproportionate with the nature and circumstance of the offense."

On appeal, Tekippe argued that the declarations showed his counts of conviction "were the exception, not the norm," and that the government had "elicited broad, misleading testimony" about his practice. The panel reviewed the pervasiveness finding for clear error, a deferential standard under which a finding stands if it is "plausible in light of the record read as a whole."

Judge Smith identified three categories of evidence supporting the finding. First, Tekippe acknowledged billing the same bundle of services for every patient, and his massage billing exceeded that of every other chiropractor in Louisiana, a disparity the opinion said "likely did not occur 'by . . . chance.'" Second, witnesses testified that he billed for services he did not perform. One patient testified that he received two or three therapeutic exercises, not the 55 billed, and one or two adjustments, not the 53 billed. Third, the panel cited evidence that services were performed without regard to medical necessity and by unsupervised assistants.

The panel rejected Tekippe's argument that the testimony lacked detail and corroboration. Sentencing facts need only be found by a preponderance of the evidence, the court wrote, and even hearsay may suffice. The trial evidence "reinforced the district court's sound conclusion that Tekippe's fraud was pervasive, not just isolated billing discrepancies," Judge Smith wrote.

The court said Tekippe's reliance on the declarations was "likely misplaced" because the evidence "is not inconsistent with extensive fraud." "Even if these declarant-supported claims were all non-fraudulent—a stretch considering the instant record—such claims would account for less than a quarter of the amount billed and received," Judge Smith wrote. The opinion added that Tekippe did not try to show that those claims met the insurer's reimbursement criteria.

The panel also rejected Tekippe's contention that the district judge refused to consider the declarations. The judge had stated that reducing the loss to Tekippe's proposed $582,515.12 would still produce the same 14-level increase under the fraud guideline. The judge also said the same sentence would apply even under a higher guideline range.

The Fifth Circuit's ruling, which ends with the single word "AFFIRMED," leaves in place the 84-month prison term and three years of supervised release.