Healthcare fraud; Jury instructions on the word “willfully” in 18 USC § 1347; Bryan v United States; Ratzlaf v United States The exclusion of “hearsay” statements; FRE 803(3) (the then-existing state of mind hearsay exception); Whether an error was harmless; Denial of defendant’s motion to require the government to use an expert to testify about the medical necessity of durable medical equipment (DME); FRE 701 & 702

The court vacated defendant-Dr. Singh’s convictions for healthcare fraud based on inadequate jury instructions on the meaning of the word “willfully” in the statute, the improper exclusion of hearsay statements made by Singh, and the use of lay-witness testimony as to medical necessity. The government alleged that she defrauded Medicare by signing orders for DME for patients whom she had not herself evaluated. No evidence showed she ever personally “submitted any order, claim, or request for reimbursement to Medicare, or that she knew the amounts being billed.” Instead, she contracted with two telehealth companies to review their patient charts, allegedly believing “that she was reviewing and approving medical charts for patients whom other healthcare providers had already evaluated[.]” She reported all the money she received for reviewing the charts on her federal income tax returns. On appeal, the court agreed with her that the district court erred when instructing the jury on the meaning of “willfully” as used in § 1347. To establish “‘a “willful” violation of a statute, “the Government must prove that the defendant acted with knowledge that his conduct was unlawful.”’” The jury instructions here “did not state that the government was required to prove that Singh ‘acted with knowledge that [her] conduct was unlawful.’” The court rejected the government’s argument that the instructions, “considered as a whole, sufficiently conveyed that the government had to prove that Singh knew that her conduct was unlawful.” The court noted that “the healthcare-fraud jury instructions were consistent with Sixth Circuit Pattern Instruction 10.05 (2024) and were agreed upon by both parties.” If she is retried, the jury instructions for a violation of “§ 1347 must specify that the government is required to prove beyond a reasonable doubt that Singh acted with knowledge that her conduct was unlawful.” The court also agreed with Singh that reversal of her convictions was merited based on her other two arguments on appeal. As to the exclusion of her hearsay statements made to an insurance company representative, the court concluded “that the district court abused its discretion by not allowing these statements under” FRE 803(3). Further, their exclusion was not harmless error because the “excluded evidence went directly to the critical, disputed issue of Singh’s intent.” Lastly, the court held that “the district court abused its discretion by allowing lay testimony on” the issue of the medical necessity of DME. This question “requires specialized knowledge of the professional standards of care for physicians and the established standards for Medicare.” Remanded.