The Supreme Court seemed unreceptive to the Biden administration’s arguments on Feb. 27 that a Texas man convicted of Medicaid fraud should also be convicted of aggravated identity theft arising out of the same transaction because a form he filed contained a patient’s name.
Several justices expressed concern that the government wants to interpret the Identity Theft Penalty Enhancement Act, which mandates a two-year prison sentence, so broadly that it could entangle potentially innocent individuals.
The law establishes the federal “offense of aggravated identity theft,” Bush said, adding it would ensure someone convicted of that crime would receive jail time “for stealing a person’s good name.”
“These punishments will come on top of any punishment for crimes that proceed from identity theft,” he said. The law “raises the standard of conduct for people who have access to personal records through their work at banks, government agencies, insurance companies, and other storehouses of financial data.”
The petitioner, David Fox Dubin, worked as a managing partner for PARTS, a psychology practice in Texas created by his father, William Dubin, a licensed psychologist. Both men were convicted by a federal district court for a scheme to defraud Texas’s Medicaid program. A divided U.S. Court of Appeals for the 5th Circuit affirmed the convictions in March 2022.
Medicaid is a joint federal-state program that serves low-income people of all ages and varies from state to state. It’s run by state and local governments within federal guidelines. Each state sets its own rules about eligibility and services. Although patients usually don’t have to pay for covered medical expenses, a small co-payment is sometimes required.
Petitioner David Dubin filed a claim with Medicaid for $540 for services provided to someone identified as Patient L. The government didn’t dispute that the corporation treated the patient or had the authority to use the patient’s name in the billing process, according to Dubin’s petition.
“Instead, the government’s theory was that petitioner overbilled Medicaid for the services provided,” which was sufficient for a conviction for health care fraud.
“But the government was not content with that conviction. It also indicted petitioner for aggravated identity theft,” the petition stated. The government’s position is that Dubin violated the identity theft law because he placed Patient L’s “identifying information on the fraudulent Medicaid claim form.”
The 5th Circuit held that “a defendant is guilty of aggravated identity theft anytime he recites someone else’s name as part of a predicate crime—even when he has authority to use that person’s name and the predicate crime does not involve a misrepresentation about that person’s identity,” the petition stated.
Dubin argues that the 5th Circuit’s interpretation of the law, which required that a mandatory two-year sentence be stacked on top of the sentence for fraud, applies “not only to most every commission of healthcare fraud, but would also sweep in tax preparers, immigration attorneys, and anyone else convicted of submitting any form on someone’s behalf that contains a misrepresentation unrelated to the person’s identity.”
Dubin’s attorney, Jeffrey L. Fisher, told the Supreme Court during oral arguments on Feb. 27 that the 5th Circuit’s “decision here stretches the aggravated identity theft statute beyond its breaking point.”
“Overbilling Medicaid by $101 may provide fodder for a simple healthcare fraud prosecution, but ... it does not meet any ordinary understanding of the term ‘identity theft.’”
The government’s hardline interpretation “would just sweep in every misbilling,” Fisher said. As an example, he said that “a lawyer who bills 4.9 hours when he worked 4.8, bills for a second-year associate when it was really a first-year,” could be prosecuted.
“We would not assume Congress would sweep in vast arrays of conduct without doing it clearly,” the lawyer said.
Justice Samuel Alito said Fisher’s argument “has a lot of intuitive appeal because this does not seem like what one normally thinks of as identity theft.”
Responding to Justice Ketanji Brown Jackson, who expressed concern about the broad application of the Identity Theft Penalty Enhancement Act, Fisher said the government’s theory is that there is “this incredibly broad statute that makes every fraud prosecution also punishable as aggravated identity theft, and that ... creates exactly the kind of standardless sweep” that the due process clause of the Constitution is “directly concerned with and gives you very serious pause.”
Justice Neil Gorsuch was skeptical of the government’s far-reaching theory, saying that under it, “every time I order salmon at a restaurant [and] I’m told it’s fresh, but it’s frozen, and my credit card is run for fresh salmon, that’s identity theft.”
After Justice Brett Kavanaugh said there may be a danger of “trapping the unwary or increasing the sentence on an unwary person,” U.S. Department of Justice attorney Vivek Suri said supporting the government’s position here wouldn’t give federal prosecutors a free hand to transform law-abiding people into criminals.
This statute “only comes into play only if someone has committed a predicate crime,” the lawyer said.
“When you really get down to it, all health care fraud is done using people’s names,” Justice Elena Kagan said.
The Supreme Court is expected to hand down its decision in Dubin v. United States, court file 22-10, by June.
