On February 12, prosecutors at the Department of Justice asked for a second extension to respond to a 2255 Petition by Dr. Rodney Hesson, who was at the center of the 2015 high profile Medicare fraud case that resulted in convictions of two other well-respected psychologists in the community, Dr. Beverly Stubblefield and Dr. John Teal.
Dr. Hesson filed 829-pages of documents and exhibits with the United States District Court, Eastern District of Louisiana on November 1, 2019, alleging violation of his Constitutional rights to a fair trial due to inadequate representation.
A 2255 petition is a motion under 28 United States Constitution §2255 to vacate, set-aside, or correct sentences for a person in federal custody.
Among other assertions, Hesson alleges that his rights were violated when his defense attorney failed to “move the court” to issue a jury instruction which would have identified the governing Medicare rules and regulations that Hesson relied upon in his clinical and billing practices. In contrast, prosecutors focused on CPT codes. The failure to explain Medicare regulations caused numerous “prejudicial consequences which were overwhelming…” Hesson writes.
Representing himself in the Petition, Hesson argues that the jury was not given instructions as to how to understand critical Medicare regulations and rules, and if they had, their understanding would have been the basis of a “complete defense.”
“In the end, not even one governing Medicare regulation was presented in the court’s instructions to jurors,” he writes, “leaving jurors unable to determine that the billing procedures were based on Medicare regulations, CPT codes being only a part of the more complex Medicare guidelines, and that Hesson relied on these regulations in good faith.”
If jurors had been made to fully understand, he explains, that Hesson’s company, Nursing Home Psychology Services (NHPS) passed a 2011 Medicare audit and review of its procedures for billing, and also that in 2012 he voluntarily asked Civil-DOJ to review NHPS billing procedures, then jurors would have concluded that he did not have any intent to do fraud or make false statements, he writes.
In the fact-filled 2255 Petition, Hesson argues that the jury was not instructed nor allowed to understand the official regulations, which would have successfully countered the prosecutors’ theory of fraud, and more importantly, their “theory of conspiracy.”
In response to the November 8 Petition, Judge Carl Barbier ordered that the US attorneys file a response to Hesson’s arguments by January 7. In December the prosecutors filed a motion for additional time and then again in February prosecutors asked for more time. Judge Barbier granted both extensions. The US response is now due on April 6, 2020.
Hesson’s company, Nursing Home Psychological Services (NHPS) consulted with and served up to 72 nursing facilities and employed between 23 and 26 psychologists and between 18 and 20 clinical coordinators. Hesson designed a service that paired each psychologist with a clinical assistant, and the total units/hours billed was a sum of both the psychologist’s and the supervised assistant’s procedures. Consulting with the staff at the nursing home and working from physician referrals were part of the program for diagnostic testing of patients.
Three main NHPS practices formed the basis of the charges against Hesson: use of clinical assistants, medical necessity, and “locum tenens” billing, of one psychologist under the agency Medicare number of another.
In the Petition, Hesson argues that each of these business practices would have been shown to be legal and valid, or a good faith reliance upon them at the least, if the jury would have been caused to fully understand the Medicare regulations and rules. And, his company’s willingness to undergo voluntary reviews by Civil-DOJ would have countered any conclusion of “conspiracy.”
The 2015-2016 charges against all defendants were elevated to “conspiracy,” which carries some of the harshest legal treatment that Government prosecutors can bring to bear on defendants, through laws that allow pre-trial and pre-conviction seizing of assets and property.
“Conspiracy” laws originate from prosecution of individuals in organized crime and terrorists. “Federal prosecutors can, and should, use civil forfeiture to enhance criminal cases and further the Department of Justice’s (Department) goal of effective law enforcement,” writes Craig Gaumer in the U.S. Attorney’s Bulletin, “A Prosecutor’s Secret Weapon: Federal Civil Forfeiture Law.
Even the Judge, notes Hesson, commented on the unusual circumstances of the case. Before the trial began, Judge Barbier said, “You know, in many criminal cases, the defense is: I didn’t do it. I didn’t commit the act you said I committed. I didn’t have a gun, I did not do whatever it is. But in this case, as I understand it, the defendants are saying: we did what we did, but we didn’t believe it was illegal to do what we did.”
And, the transcript confirms that confusion. The Judge acknowledged that he had not reviewed the regulations and stated, “I have seen references to them in all the pleadings, all the memoranda that have been filed. They said these are very complex regulations, does it pretty much say in black and white under 101 and 102 what you can do and not do?“
Prosecutor’s Kanellis response was misleading at best, writes Hesson: “The CPT codes are very short. What [the defense] want[s] to do is they want to muddle the picture by saying here’s a way you interpret these codes, why don’t we consider this ….”
Hesson writes that when prosecutor Kanellis reinforced his point that any interpretations about the governing law is “the Judge’s function,“ the following conversation occurred:
The Court: You’re going to propose or suggests legal instructions on that, right?
Prosecutor Kanellis: Yeah. If there’s a reason —
The Court: is there case law on this that’s relevant, on how to instruct the jury on these types of regulations?
Prosecutor Kanellis: There are cases that discuss the issue in general. I have not seen a case where they discuss the specific instructions in that regard. That’s certainly something, your honor – – I mean, the easiest thing to do is for the court to say, this is what CPT code 96101 says,” and it’s a sentence, or a few sentences. Here is what CPT code 96102 says.”
Jurors never received these instructions, Hesson writes, and so could not determine whether he and his employees reasonably complied in good faith with civil law.
Hesson and his mother, Gertrude Parker, owned and operated regional companies, Nursing Home Psychological Service and Psychological Care Services. They marketed to nursing homes in Louisiana, Mississippi, Alabama and Florida. At the trial, Hesson said that his company was “…inundated with referrals.” He said that at times the company had to cap how many people could be seen.
Physicians ordered the assessments and nursing homes appeared to need them, based in part in changing attitudes around the country and the increasing awareness about overmedication of senior citizens in nursing home care. Many sources note the under utilization of psychological services in senior care facilities. Hessen and his company, classified as a small-business based on yearly revenues, became a top biller of Medicare services.
Dr. Hesson was found guilty and sentenced to 120 months, and restitution of $13,800,553 with at least $200 per month after release, paid to Medicare.
Gertrude Parker was sentenced to 84 months, restitution of $7,313,379, and $200 per month.
Dr. John Teal was sentenced to serve 24 months, restitution of $3,505,137, and $200 per month. He has completed his sentence.
Dr. Beverly Stubblefield was sentenced to serve 30 months, restitution of $2,181,378, and $200 per month. She is home in Ecru, Mississippi. Stubblefield worked contract for the Hesson companies, part-time for about five years. She was paid roughly $89,000 per year.