PRINT PAGEIf ACA's Invalid, So Are Health Fraud Charges, Esformes Says

By Jeff Overley

Law360 (March 28, 2019, 8:26 PM EDT) -- Nursing home mogul Philip Esformes is seizing on the U.S. Department of Justice’s new position that the entire Affordable Care Act is invalid, arguing that it dooms a health care fraud case that is premised on legal obligations created by the ACA.

In a motion on Wednesday in Florida federal court, Esformes requested the dismissal of charges or a mistrial in a closely watched case involving allegations that he defrauded Medicare and Medicaid out of hundreds of millions of dollars.

According to the motion, the charges have been doomed by the DOJ’s sudden announcement this week that it agrees with a December court ruling that deemed the ACA unconstitutional.

“This case was brought as an alleged health care fraud case based upon statutes and implementing regulations that the Justice Department … has just admitted are unconstitutional,” Esformes wrote.

Esformes, who faces charges related to alleged kickbacks and unnecessary medical services, argued on Wednesday that “every health care statute cited in the indictment has been identified as among those ruled unconstitutional.”

As part of his motion, Esformes asserted that the DOJ has taken contradictory positions by bringing charges under the same statutes that it now wants to see struck down. Those contradictions mean that the statutes Esformes allegedly violated have been rendered “unconstitutionally vague,” according to Wednesday’s motion.

Nicole Navas, a DOJ spokeswoman, declined to comment on Thursday, citing Esformes’ ongoing trial.

Attorneys for Esformes could not immediately be reached for comment on Thursday.

The ACA’s future is on the line in a case filed by Texas and other GOP-led states. They argue that changes to the ACA’s individual mandate rendered it unconstitutional and that the rest of the law is inextricably linked to the mandate and therefore must also fall. A Texas federal judge accepted that argument, and his ruling has been stayed pending an appeal at the Fifth Circuit.

A wide range of business groups and legal observers have called the anti-ACA case weak and warned of extreme disruption if it succeeds in wiping out the entire ACA, which made major changes to numerous federal laws affecting many parts of the health care industry.

Esformes’ motion on Wednesday alluded to unpredictable ripple effects, saying that “the full legal consequences of [the DOJ’s position] may take time to reveal themselves.”

The government is represented by James V. Hayes, Elizabeth Young and Allan Medina of the U.S. Department of Justice's Fraud Section.

Esformes is represented by Howard M. Srebnick, Roy Black, Jacqueline Perczek and Rossana Arteaga-Gomez of Black Srebnick Kornspan & Stumpf PA, Marissel Descalzo of Tache Bronis Christianson & Descalzo PA and Bradley Horenstein of The Horenstein Firm PA.

The case is U.S. v. Esformes et al., case number 1:16-cr-20549, in the U.S. District Court for the Southern District of Florida.

--Editing by Haylee Pearl.


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