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Court dismisses grand jury indictment for prosecutor’s failure to define what constitutes unlicensed practice

An appellate court in New Jersey, in an August 25 decision, dismissed a grand jury’s criminal indictment for unlicensed practice and fraud, ruling that the prosecutor in the case had erred by deferring to an insurance investigator to delineate the authority of an unlicensed medical assistant, among other errors.

State v. Jeannotte-Rodriguez

The state filed criminal charges against physician Lisa Ferraro, medical assistant Jeannotte-Rodriguez, and office manager Marta Galvan, alleging that Jeannotte-Rodriguez practiced medicine without a license while working at a clinic run by Ferraro and that all three conspired to fraudulently bill for those services.

The case began after Ferraro and Galvan filed a complaint alleging that Jeannotte-Rodriguez, who had since moved on to another clinic, was being paid to refer patients from Ferraro’s clinic to her new employer.

At trial, a detective testified that Jeannotte-Rodriguez, who had been a licensed physician in the Dominican Republic but had been unable to obtain a residency in the United States and was not licensed, gave physical exams, administered allergy shots, and issued prescriptions. Those action were then billed as having been performed by Ferraro.

Ferraro and Galvan also stated that they referred to Jeannette-Rodriguez as “Dr.,” that patients believed she was a doctor, and that Ferraro had submitted billing orders based on Jeannette-Rodriguez’s work.

An insurance fraud investigator claimed to have worked out that Jeannotte-Rodriguez had treated 45 of 100 patients whose records he audited, and from that he posited that 45% of Ferraro’s billing from 2012-2017, or $153,776, was improperly attributed to Jeannotte-Rodriguez.

Despite the fact that the criminal case turned on whether Jeannotte-Rodrioguez had been practicing medicine, during grand jury proceedings the prosecutor did not attempt to define the practice of medicine or delineate the boundaries of an unlicensed medical assistant’s actions, instead deferring to testimony from the insurance investigator on those subjects.

In another unusual step, the prosecutor also referred to evidence not presented to the grand jury while summing up the case. The grand jury indicted all three with various unlicensed practice and fraudulent billings charges.

At trial, the defendants moved to dismiss the indictment, arguing that the state had made several errors and taken improper actions during the grand jury proceedings. The trial court agreed, finding that the prosecutor had improperly referred to “thousands of claims” of health care fraud for which the state had not introduced evidence and that the evidence presented by the insurance investigator was too speculative.

There was no proof, the trial court also found, that either Jeannotte-Rodriguez or Galvan had obtained a financial benefit from the billing practices, that the state had presented inadequate evidence regarding the authority of a medical assistant, and that the indictment’s failure to name specific dates on which Jeannotte-Rodriguez was alleged to have provided treatment prevented the defendants from a fair opportunity to defend themselves against the charges. The court dismissed the indictment and the state appealed.

Judge Mitchel Ostrer, hearing the appeal in the Appellate Division of the New Jersey Superior Court, agreed with the lower court and the defendants. “The most significant defect in the grand jury process was the prosecutor’s failure to adequately and accurately instruct the jury about what a medical assistant, as an unlicensed medical professional, may do, and what activities encroach upon the licensed practice of medicine,” he wrote.

Citing New Jersey medical board rules regarding medical assistants, Judge Ostrer noted that “a medical assistant, if certified, may administer certain injections without committing the crime of practicing medicine without a license . . . and perform certain physical modalities in a physician’s office,” regardless of whether those actions may come under a broad interpretation of the practice of medicine.”

New Jersey regulators, he continued, “have not charted the boundaries of a physician’s authority to delegate tasks to an unlicensed medical assistant. However, we are persuaded that a physician has authority, inherent in his or her license, to delegate certain ‘ministerial tasks’ to medical assistants, and other unlicensed staff . . . The failure of the Legislature or regulators to draw a clear line marking the full scope of a medical assistant’s allowable activities raises a significant hurdle to prosecuting someone for crossing the line,” as persons must receive fair warning that their conduct is criminal.

The court did add that, when it comes to delineating the bounds of unlicensed medical care, some things are “black and white,” such as prescribing medicine or diagnosing illness. But the prosecutor had failed to instruct the grand jury to limit itself to those types of violations, instead improperly relying on the testimony of the insurance investigator to define the crime.

First, noted the Judge, the prosecutor is the grand jury’s legal advisor and may not abdicate that role to a witness. And second, the investigator’s testimony was itself unable to identify reasonably clear episodes of unauthorized practice, referring to purportedly unauthorized conduct that was arguably allowable under New Jersey regulations.

The appellate court also agreed that the prosecutor’s reference to “thousands of claims,” without having presented evidence to the grand jury establishing those claims, was improper, as one element of the health care fraud count alleged was the submission of “more than 5” claims.

In addition, the court took issue with the investigator’s evidence and methodology for determining what amounts had been billed improperly as overly-speculative, and agreed that the prosecutor erred by failing to establish specific dates for the alleged unlicensed treatments by Jeannotte-Rodriguez.

The court dismissed the indictments without prejudice.