As previously reported in this post, criminal trials premised on upcoding evaluation and management (E/M) service codes are extremely rare. The Justice Department took that rare step in Maryland in connection with a practice in which Dr. Ron Elfenbein, a physician, billed Medicare and private payors a Level 4 E/M for patients receiving COVID-19 tests. That billing practice, which at times took place at drive-through COVID testing centers, resulted in Dr. Elfenbein’s indictment and conviction by a jury in Maryland federal court.

But on December 21, 2023, the federal judge who presided over that trial granted Dr. Elfenbein’s motion for judgment of acquittal, vacating the conviction. These motions are commonly made but seldom granted. Why was this particular motion for acquittal granted? And what can the healthcare community learn from this case? Read on for details.

Why Was This Physician Acquitted Following Conviction at Trial?

Dr. Elfenbein was indicted for billing Level 4 E/M claims for patients receiving COVID-19 tests, and at trial, the Justice Department introduced evidence of exactly what Medicare guidance calls for when billing Level 4 E/M claims. But unlike some CPT codes, E/M CPT codes are imprecise. There is purpose in E/M CPT codes’ imprecision in that it allows physicians flexibility to exercise their best judgment given the multitude of factors that go into medical decision-making.

But that imprecision in E/M CPT codes makes for difficult federal prosecutions. As the court held in overturning Dr. Elfenbein’s convictions, CPT codes’ “imprecision does not necessarily integrate well with the clear notice and due process guarantees of our criminal law” and “where the relevant CPT codes and related definitions are ambiguous and subject to multiple interpretations, problems clearly arise.”[1]

Those problems in the trial of Dr. Elfenbein came in the form of a lack of evidence that billing Level 4 E/M codes were objectively false. The court went into detail on the definitions of CPT codes and what the prosecution needed to prove to show that Level 4 E/M Codes were improper and concluded that “selecting the correct CPT code in [Dr. Elfenbein’s] context is somewhat ambiguous.”[2] The prosecution conceded in its closing argument that the jury might be confused as to whether a lower-paying CPT code might have been appropriate, and the court seized on that concession to make the point that ambiguity requires additional evidence that the prosecution did not offer in its case.

For example, the court pointed out that there was evidence presented that “the full spectrum of E/M codes were available to providers to be billed for COVID-19 testing,” but that “[n]either coding expert was asked to opine on the circumstances under which each code might be appropriate.”[3] In fact, “[t]he only person who testified about this guidance was the Defendant, who testified that he understood level 4 to apply to the patient encounters based on the relevant guidelines.”[4] Given these prosecutorial shortcomings, the court granted Dr. Elfenbein’s motion for judgment of acquittal.

The court was careful to make clear that it is possible for the Justice Department to successfully prosecute defendants who take advantage of ambiguous CPT codes, but that such prosecutions must show objective falsity in a way the prosecutors failed to do in Dr. Elfenbein’s trial. The “Government sails in shallow waters when it prosecutes a case of this type; these cases require careful navigation,” wrote the court.[5]

To make its point, the court pointed to several cases in which the Justice Department was able to navigate ambiguous waters, including one E/M CPT case in which the prosecution’s expert testified the medical judgment was “not even close to being properly classified” at the code’s level.[6]And so, while prosecutions based on ambiguous CPT codes are clearly an uphill battle for the Justice Department, they are not insurmountably uphill.

What Can the Healthcare Community Learn from This Case?

There is ambiguity galore in healthcare billing. And while ambiguity serves important purposes in the healthcare billing world, it creates severe challenges when ambiguous concepts form the basis of criminal fraud prosecutions.

But this does not mean that the courts are endorsing aggressive medical billing; this case merely reflects an elevated expectation on the prosecution when it comes to proving crimes associated with ambiguous codes. Moreover, there are other consequences to healthcare providers who improperly bill Medicare and other payors, besides criminal prosecution, such as False Claims Act liability, Medicare contractor overpayment proceedings, and Medicare administrative sanctions. The court’s decision in Elfenbein does not speak to those alternative consequences to healthcare providers.

However, this post-trial acquittal will hopefully spark awareness of the fact that imprecise concepts in the Medicare world should not serve as bases for government action. The Elfenbein court properly calls out the need for “clear notice and due process guarantees” in making sure that healthcare providers are not prosecuted for ambiguous obligations. That is a lesson more for federal regulators than the healthcare community, but the healthcare community needs to continue to guard itself against government action premised on imprecise or ambiguous healthcare concepts.

[1] United States v. Elfenbein, 1:22-cr-146, Doc. 99 (D. Md. Dec. 21, 2023), at 81.

[2] Id. at 58.

[3] Id. at 59.

[4] Id.

[5] Id. at 84.

[6] Id.

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Photo of Jonathan Porter Jonathan Porter

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations,

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations, particularly those involving the healthcare industry. He is a former Assistant U.S. Attorney for the Southern District of Georgia, and in that capacity, he brought charges against numerous individuals and companies under federal law, including criminal charges of health care fraud, wire fraud, and violation of the Anti-Kickback Statute, and civil complaints alleging violations of the False Claims Act.

At the Department of Justice, Jonathan was a key member of multiple international health care fraud takedowns, in which Jonathan charged dozens of doctors, nurses, and other licensed medical professionals, along with marketers and health care executives for alleged participation in healthcare fraud schemes involving billions of dollars in false billings. In total, these charges resulted in more than 30 guilty pleas plus a conviction in the nation’s first trial of a medical professional charged as part of Operation Brace Yourself, which Jonathan first-chaired. Jonathan also was active in dozens of civil investigations brought under the False Claims Act. Jonathan resolved tens of millions of dollars in civil settlements and judgments for False Claims Act violations.

Jonathan also advises clients on a range of regulatory issues, along with the development and implementation of corporate compliance programs. He uses his unique perspective as a former AUSA, providing a prosecutor’s eye for detail in helping clients understand how DOJ and other agencies view compliance, particularly in light of the changing standards for compliance as outlined in the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) and implemented in the Department’s white-collar crime enforcement initiative.