Fischer v. United States

PETITIONER: Fischer
RESPONDENT: United States
LOCATION: WILK Radio

DOCKET NO.: 99-116
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 529 US 667 (2000)
ARGUED: Feb 22, 2000
DECIDED: May 15, 2000

ADVOCATES:
Lisa Schiavo Blatt -
Lisa S. Blatt - Department of Justice, argued the cause for the respondent
Mark L. Horwitz - Argued the cause for the petitioner

Facts of the case

Jeffrey Fischer, while president and part owner of Quality Medical Consultants, Inc. (QMC), arranged for QMC to receive a $1.2 million loan from West Volusia Hospital Authority (WVHA), a municipal agency that operates two hospitals, which participate in and receive funding from the federal Medicare program. To get the loan, Fischer pledged QMC's accounts receivables and offered a $1 million letter of credit. After a 1994 audit of WHVA raised questions about the QMC loan, Fischer was indicted for federal bribery, including defrauding an organization which "receives, in any one year period, benefits in excess of $10,000 under a Federal program." A jury convicted him and the District Court sentenced him to imprisonment, imposed a term of supervised release, and ordered the payment of restitution. On appeal, Fischer argued that the Government failed to prove WHVA, as the organization affected by his wrongdoing, received "benefits in excess of $10,000 under a Federal program," as required by the federal bribery statute. In rejecting that argument and affirming the convictions, the Court of Appeals held that funds received by an organization constitute "benefits" within the statute's meaning if the source of the funds is a federal program, like Medicare, which provides aid or assistance to participating organizations.

Question

Do Medicare funds received by health care providers constitute "benefits" within the meaning of the federal bribery statute prohibiting fraud and other offenses against organizations receiving federal benefits?

Media for Fischer v. United States

Audio Transcription for Oral Argument - February 22, 2000 in Fischer v. United States

Audio Transcription for Opinion Announcement - May 15, 2000 in Fischer v. United States

William H. Rehnquist:

The opinion of the Court in No. 99-116, Fischer against United States will be announced by Justice Kennedy.

Anthony M. Kennedy:

The petitioner was the president and a part-owner of a corporation which provided auditing services to health care organizations.

He was convicted under the federal criminal bribery statute for defrauding a municipal hospital authority in a $1.2 million loan and for paying a $10,000 kickback to the hospital authority’s chief financial officer.

The hospitals participated in the Medicare program and during the relevant time they received over $10 million in Medicare funds.

The question is whether those funds constitute benefits, within the meaning of the federal bribery statute.

Now, we conclude that they do, and we affirm the petitioner’s convictions.

The statute's substantive provisions apply only if the defrauded organization and this is quoting from the statute, “Received in any one period benefits in excess of $10,000 under a federal program” the statute then goes on, but this is the relevant part.

Both parties agreed Medicare as a federal insurance program and that the defrauded hospital received over $10,000 in Medicare funds.

So, the dispute, as I have said, is whether the Medicare payments are benefits, a term that is undefined in the statute.

The structure operation and purpose of the Medicare program provide essential instruction in resolving the statutory question.

As the opinion explains in some detail, Medicare payments are made for significant reasons in addition to reimbursing a hospital for its costs.

The Government does not make the payment unless the hospital complies with an intricate regulatory scheme, one which ensures provider posses the capacity to render ongoing care to qualifying patients.

The Medicare program accomplishes this objective through an elaborate funding structure.

The Medicare program structure refutes the petitioner’s assertion that the Medicare program provides benefits only to qualifying patients.

Because the Medicare program operates with a purpose and design above and beyond point-of-sale patient care, we hold, the funds hospital receives under the program constitute benefits within the meaning of the federal bribery statutes.

We do not suggest federal funds disbursed under an assistance program will, in all instances, result in coverage of a recipient fraud under the statute.

Such a broad construction of the term benefits would turn almost every act of fraud or bribery into a federal offense, upsetting a federal balance.

The conrolling inquiry should examine the assistance program structure and operation and the conditions under which the defrauded organizations received the federal payments.

The answer could depend, as it does in this case, on whether the recipient’s own operations are one of the reasons for maintaining the program.

Health care organizations participating in the Medicare program satisfy the standard.

The judgment of the United States Court of Appeals for the Eleventh Circuit is affirmed.

Justice Thomas has filed a dissenting opinion, which Justice Scalia joins.