Dr. Alap Shah was convicted of participating in a Kickback system where he was paid to prescribe expensive compound medicines in United States of America against Alap Shah No. 19-12319, United States Court of Appeal for the Eleventh Circle (24 November 2020). He appealed the conviction based on what he and the government admitted was an incorrect instruction to the jury.
At the request of the government, the district court instructed the jury that Dr. Alap Shah violated the charter which prohibits rebuttals if a reason he accepted the payment was that it was in exchange for writing a prescription. In his written submissions on appeal, Shah argued that the district court erred and should have instructed the jury that the government was obliged to prove that his main or sole reason for accepting the payment was that it was made in exchange for writing a prescription.  Both parties agreed by oral argument that the jury's instruction was incorrect and that the Charter requires no proof of the defendant's motivation to accept the illegal payment, as long as he accepts setbacks knowingly and knowingly. The question presented to the eleventh circuit was whether the instruction harmed Shah.
Dr. Alap Shah was a podiatrist in Columbus, Georgia. Sometimes he prescribed mixed drugs to his patients. Compound medicines are specially adapted medicines that can vary from medicines in stock, strength, delivery method or combinations. For example, a compound drug may be a cream that combines three analgesic drugs that are usually produced in pill form with lower potency than what is available off the shelf. Specialized pharmacies produce compound medicines that are much more expensive than prescription drugs. A single tube of a composite cream can cost $ 15,000 or more.
Shah and about 20 others participated in a kickback conspiracy that involved prescribing compounded drugs. Each of them faxed prescriptions for compound medicines to a company called PGRx Group, which in turn instructed a compound pharmacy to fill the prescriptions. The pharmacy paid the PGRx group a return, usually about 50 percent of the profit, for each prescription that the PGRx group referred to it. The PGRx group transmitted part of this regression to the prescribing physician.
Shah received his share of the profits as a fixed monthly fee of $ 5,000. The PGRx group disguised the nature of the payments by hiring the doctors as "medical directors" by calling the payments speaker fees to market the PGRx group and compound medicines at professional events and by directing payments to the prescribing doctors' family members or employees.
Shah joined the conspiracy in May 2014 after being recruited by his brains, Paul Meek and Gary Small. Meek and Small offered him $ 5,000 each month for his participation. Shah corrected a typo in the contract from PGRx before signing it. The agreement provided Shah with duties as medical director, including on-site monitoring and training, management and administrative responsibilities. And the contract required PGRx Group to provide Shah with offices in its facility. Shah did not perform any of his duties under the contract. he did not even know where the PGRx Group was. And PGRx Group never gave him office space. Regardless, the PGRx Group always paid Shah $ 5,000 per month.
Shah prescribed mixed drugs much more often after signing the contract with the PGRx Group than before signing the contract. At trial, however, Shah insisted he never wrote a prescription that a patient did not need.
Tricare, a federal program for military members and their families, paid for many of the recipes Shah wrote. It is reimbursed at a higher interest rate than other insurance companies. Shah continued in this role until around May 2015, when Tricare made the conspiracy less profitable by introducing a requirement for prior authorization for compound medicines. That said, he received checks from the PGRx Group totaling $ 55,350.43. The recipes he wrote during the conspiracy cost Tricare more than a million dollars.
Shah's final argument focused on mens sale and the defense of good faith. He began by telling the jury that "
The Charter to which he was sentenced says nothing about the defendant's motivation to accept payment. The text does not require proof that the defendant "intends to request or receive" a payment. The law's key phrase – compensation. . . in exchange for [writing Tricare prescriptions] ”- says nothing about the reasons the defendant accepted the payment. The Eleventh Circuit found no reason to extend that phrase to a description of the defendant's mental state. Congress specified the necessary mental state by requiring the defendant to accept the payment "knowingly and knowingly."
To act "corruptly" means to act knowingly and dishonestly for an unjust purpose. In the same way, the phrase "in exchange for" the nature of the payment speaks, not Shah's reasons for accepting it. the payer's offense, which prohibits "knowingly and knowingly offering [ing] or paying [ing] any compensation… To provoke" the same set of enumerated activities, prohibits payments intended by the payer [19459022motiveisdecisiveforthepayer'soffenseevenifitisnotforDrShah'sreceiptofpayment
The district court erred in instructing the jury that the government had to prove that Shah accepted the payments at least in part because they were made. in exchange. for the prescriptions he wrote. No such proof was required. The government met its burden of proving beyond a reasonable doubt that the error did not harm Shah. The incorrect instruction required the government to prove more than the required statute, so if anything the error worked in favor of Shah.
The district court correctly instructed the jury on the burden the government bore to prove intent. the jury correctly stated that Shah did not commit any crime if he accepted the payments in good faith.
Shah's own concluding argument focused on mensrea requirements and good faith instruction. Adding an unnecessary instruction to "a purpose" could not have affected Shah by undermining the otherwise correct willingness and good faith instructions. In the absence of any prejudice against Shah, the conviction was confirmed.
This is a classic case of a convicted criminal claiming that his conviction should be revoked due to an incorrect instruction. The problem for Dr. Shah was that the incorrect instruction charged the prosecution more than a correct instruction. The jury convicted him for the government proving his criminal conduct without reasonable doubt, despite the fact that the incorrect instruction made the job of proving the crime more difficult. No harm, no foul, go straight to jail and not collect $ 200.00.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to employment as an insurance consultant specializing in insurance coverage, insurance claims handling, fraud and insurance fraud almost equally for insurers and insurers. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
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