United States of America v. Rick A. Kulhman No. 11-15959 (11th Cir. 2013)
Dr. Rick Kuhlman, a chiropractor who operated in Atlanta, GA, and Nashville, TN, pled guilty to running a five-year, $3 million health care fraud scheme. He appeared to be the perfect defendant because of his efforts to make things right and a willingness to educate others on the criminal nature of his actions. Therefore, the district court ruled out a jail sentence. However, the 11th Circuit reversed the relatively light sentence and said that for this type of crime, jail is a must.
The United States Federal Sentencing Guidelines suggested a prison term of 57 months to 71 months. The U.S. Attorney’s Office recommended about 36 months. However, the judge did not impose jail time. The judge cited the defendant’s good behavior, the fact that he paid full restitution before sentencing, and his willingness to speak to other health care professionals about the illegality of health fraud as reasons. In addition, he also cited increasing incarceration costs and “alternatives to prison for non-violent criminals.”
On the U.S. Government’s appeal, the 11th Circuit overturned the sentence on the grounds that it was “substantively unreasonable.” Specifically, the Court of Appeals noted that Dr. Kuhlman stole $3 million and “did not receive so much as a slap on the wrist — it was more like a soft pat.” The court, citing federal law, said that a sentence should adequately deter criminal conduct. In this case, given the amount taken, the court was “hard-pressed to see how [no jail time] serves the goal of general deterrence.” The court noted that for the insurance system to work, honesty between the insurance company and the health care provider must be the best policy — in fact, the only policy.