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United States v. Bertram

United States District Court, E.D. Kentucky, Central Division, Frankfort

February 21, 2018

ROBERT L. BERTRAM, M.D., et al., Defendants.


          Gregory F. Van Tatenhove United States District Judge.

         This matter is before the Court on the Defendants' various motions for release pending appeal. [R. 422; R. 423; R. 426; R. 427.] Because they have not adequately raised a substantial question of law or fact likely to result in reversal, these motions must be DENIED. See 18 U.S.C. § 3143(b).


         The facts have been recited several times over the course of litigation, but a brief summary is helpful here. [See, e.g., R. 1; R. 82; R. 178.] In November 2015, the United States indicted these five men, Dr. Robert Bertram, Jr., Mr. Wes Bottom, Dr. Robin Peavler, Mr. Brian Walters, and Dr. Bryan Wood, for ninety-nine counts of health care fraud and one count of conspiracy to commit health care fraud. [R. 1.] Dr. Peavler and Dr. Wood co-owned SelfRefind, a chain of substance abuse treatment clinics headquartered in Danville, Kentucky. As part of the prescribed treatment for substance abuse, physicians at SelfRefind tested for the presence or absence of illicit substances in a patient by conducting a urine drug test. SelfRefind conducted initial qualitative drug screens, which could then be submitted to another lab for a quanititative confirmation test if the doctor believed this was necessary. Dr. Peavler and Dr. Wood later joined Dr. Bertram, Mr. Bottom, and Mr. Walters as co-owners of PremierTox, Inc. in Russell Springs, Kentucky. PremierTox was a clinical laboratory that conducted quantitative confirmation urine drug tests for places like SelfRefind.

         The Indictment alleged that Dr. Peavler and Dr. Wood referred all urine samples from SelfRefind to PremierTox for testing, even if the initial drug screen did not indicate a need for quantitative confirmation tests. Furthermore, the Indictment alleged that PremierTox accepted these samples even though PremierTox did not yet have the proper equipment to test the samples. Thus, the urine samples from SelfRefind were frozen at PremierTox and tested later. PremierTox prioritized the testing of fresh urine samples, but continued testing frozen samples and billing insurance providers for the tests on frozen samples, even if many months had passed since the initial collection.

         Of the ninety-nine counts of health care fraud charged in the indictment, thirty-six involved claims submitted to Medicaid and/or Medicare, fifteen stemmed from claims submitted to Bluegrass Family Health, and forty-eight resulted from claims submitted to Anthem BlueCross BlueShield. After two and a half weeks of trial, the jury acquitted all five defendants of the conspiracy charge and of eighty-two of the ninety-nine counts of health care fraud. The jury only convicted Dr. Bertram, Mr. Bottom, Dr. Peavler, Mr. Walters, and Dr. Wood of seventeen counts of knowingly and willingly executing a scheme to defraud a health care benefit program in violation of 18 U.S.C. § 1347. All seventeen counts of conviction were derived from the forty-eight total counts relating to Anthem.

         During and after trial, all five Defendants filed various motions for acquittal under Federal Rule of Criminal Procedure 29 and for a new trial pursuant to Federal Rule of Criminal Procedure 33, asserting claims of insufficient evidence, insufficient weight of evidence, reversible legal error, and improper criminalization of opinions of medical necessity, among others. [R. 267; R. 270; R. 300; R. 301; R. 302; R. 303; R. 304; R. 305; R. 306.] This Court denied these motions. [R. 350.] On December 11, 2017, Dr. Bertram was sentenced to twenty-one months imprisonment [R. 385], Mr. Bottom was sentenced to thirteen months imprisonment [R. 387], Dr. Peavler was sentenced to eighteen months imprisonment [R. 389], Mr. Walters was sentenced to eighteen months imprisonment [R. 391], and Dr. Wood was sentenced to twenty-one months imprisonment [R. 393]. All filed notices of appeal. [R. 394; R. 395; R. 398; R. 401; R. 402.]

         Each Defendant now requests release pending appeal pursuant to 18 U.S.C. § 3143(b)(1), citing substantial questions of law. Mr. Bottom and Mr. Walters filed a joint motion, claiming the Sixth Circuit would likely find an absence of evidence for conviction, error as to the enhancements applied at sentencing, and error as to the loss amount determined at sentencing. [R. 422 at 8-16.] Dr. Wood also asserted an absence of evidence as a substantial question, but also raised issue with the representation of “medical necessity, ” asserting a substantial question as to whether he could be convicted when qualified medical experts disagree as to what was “medically necessary.” [R. 423-1 at 3-13.] Dr. Bertram adopts the arguments presented by Mr. Bottom, Mr. Walters, and Dr. Wood, reiterating questions as to sufficient evidence and conviction when experts disagree as to medical necessity. [R. 436 at 6-7.] Dr. Peavler also adopts these arguments. [R. 427-1.] Alternatively, Dr. Wood requests this Court delay their report date until the Sixth Circuit issues a decision in United States v. Paulus, No. 0:15-cr-00015-DLB, 2017 WL 908409 (E.D. Ky. March 7, 2017). [R. 423-1 at 13.]

         Aside from the issues related to sentencing, Defendants raise essentially the same claims as their post-conviction motions, with the added concern that this Court erred in denying those motions. First, Defendants maintain that the Government did not present sufficient evidence to result in a conviction, and next, that medical necessity is a matter of opinion that cannot be relied upon to determine criminal culpability for fraud. The Court has already addressed these issues in a previous order. [R. 350.] However, the Defendants ask this Court to grant release pending appeal because a favorable Sixth Circuit decision would result in reversal or a reduced sentence.



         The Bail Reform Act, 18 U.S.C. § 3143(b), creates a presumption against release pending appeal. United States v. Vance, 851 F.2d 166, 168 (6th Cir. 1988), cert. denied, 488 U.S. 893 (1988). In order to be released pending appeal, a defendant must establish two things: first, he must show, by clear and convincing evidence, that he is not likely to flee or pose a danger to the safety of another person or the community; and second, that the appeal is not for delay and raises a substantial question of law or fact likely to result in reversal, an order for new trial, a sentence that does not include a term of imprisonment, or a reduced sentence to a term of imprisonment less than the total of the time already served plus the expected duration of the appeal process. 18 U.S.C. § 3143(b); United States v. Chilingirian, 280 F.3d 704, 709 (6th Cir. 2002); Vance, 851 F.2d at 167 (noting that defendant bears the burden of overcoming statutory presumption of detention). The United States concedes that the Defendants are neither dangers to the community nor flight risk, satisfying the first part of the § 3143(b) test. [R. 432 at 2, n. 1.] Furthermore, the United States does not argue that the Defendants' appeal is for purposes of delay. Thus, the Court will focus on whether the appeal raises a substantial question of law or fact.

         In determining whether a question on appeal raises “a substantial question of law or fact, ” a Court does not need to find that it committed reversible error. United States v. Pollard, 778 F.2d 1177, 1181 (6th Cir. 1985). To determine whether the question is, in fact, substantial, “a judge must essentially evaluate the difficulty of the question he previously decided.” United States v. Sutherlin, 84 F. App'x 630, 631 (6th Cir. 2003) (quoting United States v. Shoffner, 791 F.2d 586, 589 (7th Cir. 1986)). It must be a “close question” that can “go either ...

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