When Must "Evidentiary Alternatives" Be Used?

In a medical fraud prosecution, evidence of the defendant's false medical service claims was admissible under FRE 403, even though the claims predated the 17 specific false statements from June 2004 charged in the indictment; the evidence did not risk convicting the defendant based on his past conduct rather than his present conduct, in United States v. Akhigbe, __ F.3d __ (D.C. Cir. June 14, 2011) (No. 10–3019)

When is it over kill? When has the prosecution presented evidence that, while probative, unfairly distracts jurors from the issues at trial? Often this concern is dealt with under FRE 404(b). Recently, the D.C. Circuit had reason to assess this problem under FRE 403. In the case, it rejected the defense contention that the "evidentiary alternatives" available to the government precluded it from using extensive evidence of the defendant's prior false statements that pre-dated the charged conduct.

In the case, defendant Akhigbe was a doctor who joined the victim, a medical network called Amerigroup, to provide services to Medicaid patients. The network doctors were paid when they completed a form ("HCFA 1500") for their patients, identifying the patient, dates of services rendered, diagnosis, etc. Amerigroup began noticing "unusual trends" in its billings from the defendant and after an audit, discovered that the defendant could only document six percent of the services he billed to Amerigroup.

The defendant was terminated from the medical group and the FBI summoned to examine the Medicaid claims submitted by the defendant to Amerigroup by the defendant. This resulted in the defendant's indictment for health care fraud and making false statements. The government charged that the defendant submitted "claims for visits and surgical procedures that never took place." This included an illustrative 18 specific false medicaid service claims by the defendant in June 2004. Akhigbe, __ F.3d at __.

The defense theory of the case was that defendant's billings were not intentional fraud or false statements and that the problem billing was a result of "negligent oversight" of personnel who processed the bills for the defendant to submit to Amerigroup. At trial this defense suffered from the onslaught of testimony from patients and employees "that numerous visits and procedures for which Akhigbe had billed Amerigroup either never occurred or were misrepresented, as well as with evidence that he had created false progress report notes for patient files to cover up discrepancies." Of special salience was the documentation the government submitted to show that the defendant "had billed for so-called impossible days — i.e., days where the sum of the claim forms indicated Akhigbe had worked more than 24 hours." The jury rendered a guilty verdict and the defendant appealed contending that the trial court had committed evidentiary errors. Akhigbe, __ F.3d at __.

In particular, the defendant's appeal claimed that the trial court erred in admitting into evidence "false HCFA claim submissions that predated" the specific false statements the government charged were made in June 2004. The defendant challenged this evidence as excludable under FRE 403. The prior false claims were neither "relevant to proving health care fraud," the defendant alleged and the prior false statements were merely "cumulative given the government's ability to rely exclusively on evidence regarding the specific false statements" alleged in the indictment. By admitting the prior HCFA false submissions, the defendant claimed the court "risked confusion and prejudice because it could have led the jury to convict Akhigbe for making false statements based on evidence that he made similar false statements in the past," rather the 17 specific false statements charged." The defendant also faulted the trial judge for not "explain[ing] its Rule 403 balancing on the record." Akhigbe, __ F.3d at __

The D.C. Circuit rejected the defendant's claim of evidentiary error. The circuit noted that "although the district court never expressly weighed [on the record] the prejudicial effect of the evidence against its probative value," as required by FRE 403, if it was an error it would not result in reversal or in remand as the results of the FRE 403 balance were "readily apparent from the record.” In a sense, if it was an error, it was harmless. Akhigbe, __ F.3d at __ (citing United States v. Manner, 887 F.2d 317, 322 (D.C.Cir. 1989)).

The circuit rejected the defense claim that the trial judge erred in applying FRE 403. First, the prior false claims was “highly probative on the issue of the existence of a scheme to defraud,” in that it:

"allowed the government to establish a pattern of false claim submissions spanning the full period of the charged health care fraud, as well as to show that Akhigbe had billed for impossible days [e.g., days in which he billed for delivering over 24 hours of medical services]. Akhigbe contends that the probative value of this evidence was greatly diminished because the government had "evidentiary alternatives." But the “mere showing of some alternative means of proof” does not necessarily indicate an abuse of discretion. In any event, evidence relating to discrete false statements from a single month in 2004 was hardly equivalent in probative value to the evidence Akhigbe sought to exclude. Balanced against its probative value, the risk that this earlier evidence of false HCFA submissions confused and prejudiced the jury with respect to the separate and discrete false statement charges seems minimal, particularly given that the district court instructed the jury that it could not consider this evidence for any purpose other than to decide whether Akhigbe was guilty of health care fraud."
Akhigbe, __ F.3d at __ (citing Old Chief v. United States, 519 U.S. 172, 183 n.7, 184 (1997); United States v. Douglas, 482 F.3d 591, 601 (D.C.Cir. 2007) (explaining how jury instructions concerning the permissible and impermissible uses of evidence may decrease the risk of prejudice from the admission of prior bad act evidence)).

"Reduced to its core," concluded the circuit, the defendant's objection to admission of the prior false claim billings under FRE 403 had no merit. The evidence the government presented was "highly probative direct evidence that [defendant] engaged in healthcare fraud over a several year period because the government also charged [defendant] Akhigbe with making specific false statements during one month within that period. Given the implausibility of that Rule 403 argument, we have no trouble affirming the district court's admission of this evidence even absent express on-the-record balancing." Akhigbe, __ F.3d at __ .

Federal Rules of Evidence