On November 20, 2018, former speech therapist Gena Randolph was sentenced to 111 months in federal prison and ordered to pay $580,937.44 on convictions of criminal healthcare fraud. This sentence is noteworthy in that it fell outside of the applicable Sentencing Guidelines range and practitioners need to be aware of its implications.
Randolph had been excluded from Medicaid and Medicare after her 2012 conviction for Filing False Claims with the South Carolina Medicaid Program. Federal regulations provide that exclusion from future participation in federal health care programs is mandatory upon the conviction of a program-related crime or a felony conviction relating to health care fraud.[1] Additionally, federal law specifies exclusions from the state administered Medicaid programs in many instances.[2]
Over the course of the four-day trial in July, the Government presented evidence showing that Randolph disguised her ownership and control over Palmetto Speech and Language Associates and Per Diem Healthcare Services, both of which were submitting claims to Medicare and Medicaid. As part of the fraudulent scheme, Randolph submitted thousands of claims worth over $2 million dollars both for speech therapy services that either were provided by other speech therapists and for services that were never rendered. In addition to hearing testimony from the speech therapists in whose names Randolph submitted fraudulent claims, the jury received evidence showing that Randolph submitted claims for services to beneficiaries who were dead. A federal jury convicted Randolph on one count of Health Care Fraud, one count of Aggravated Identity Theft, and four counts of Making False Statements Relating to Health Care Matters. She was found not guilty on one charge of false statements relating to health care matters.
The United States Sentencing Guidelines apply to any federal offense classified as a felony or high-level misdemeanor.[3] The sentencing judge first determines what sentencing range the convictions fall under and considers this range in conjunction with other statutory factors.[4] Because these guidelines are merely advisory, a court may sentence a defendant outside the applicable guideline range, if he finds and delineates certain enumerated factors.
In an unrequested and unexpected upward departure, United States District Judge Richard M. Gergel sentenced Randolph to 111 months in federal prison. Based on Randolph’s convictions, the Guidelines placed her in a sentencing range between 78 months and 97 months. The Assistant United States Attorney, Matt Austin, requested that Randolph be sentenced on the higher end of the range and argued for several enhancements. First, the Government requested a two-level enhancement for abuse of position of trust. It argued that Randolph continued to occupy a position of trust with Medicare and Medicaid after being excluded. Second, the Government requested an enhancement for Obstruction of Justice for committing perjury. At trial, Randolph stated that she was a licensed speech pathologist despite losing her license after her 2012 fraud conviction. However, Judge Gergel sua sponte sentenced Randolph to 111 months, which was well outside her applicable range.
This case is significant for several reasons. Courts are now considering health care offenses more seriously and sentencing them accordingly. When advising clients of potential sentencing outcomes, defense attorneys need to alert defendants of the possibility of a judge ordering an upward departure in egregious cases. Additionally, it further bolsters the efforts of the Department of Justice and U.S. Attorney’s Office. Finally, it emphasizes the high priority DOJ and the USAO have placed on investigation and prosecution of health care fraud.
[1] 21 U.S.C § 1320a-7(a)A
[2] See 42 U.S.C. § 1396(a)(a).
[3] U.S. Sentencing Guidelines Manual § 1B1.9 [hereinafter “Guidelines Manual”].
[4] See United States v. Hughes, 401 F.3d 540, 546 (4th Cir. 2005).
