Atlanta doctor Rick Kuhlman promptly paid $2.94 million in restitution. He then spent hundreds of hours warning medical students about the perils of health-care fraud. He also set up free chiropractic clinics at metro homeless shelters.
But the federal appeals court in Atlanta has ruled that all of Kuhlman’s good deeds won’t keep him out of prison. In a unanimous ruling, the 11th U.S. Circuit Court of Appeals said sentences for health-care fraud need to send a message that deters others from doing the same thing — and the extraordinary one given to Kulman did exactly the opposite.
The court ordered Senior U.S. District Judge Marvin Shoob to try sentencing Kuhlman again. It ordered Shoob to set a new hearing and impose a new sentence that reflects the seriousness of his crimes and deters like-minded providers.
The court found Kuhlman stole “not out of need, but out of greed,” U.S. Attorney Sally Yates said. “We shouldn’t have two systems of justice, where one class of defendants goes to prison, and the other goes home. “
Kuhlman, who ran five chiropractic clinics in the metro area, pleaded guilty in March 2011 to submitting $2.94 million in fraudulent claims over a five-year period. At an initial sentencing hearing, Shoob said he was impressed Kuhlman had already paid restitution in full to United Healthcare, Blue Cross Blue Shield of GA and Aetna.
Shoob noted that a state council on criminal justice reform was recommending alternatives to prison for nonviolent criminals, and he expressed concern over rising prison costs. Shoob gave Kuhlman six months to show what he could do in community service before imposing final sentence.
Shoob said he had success giving a similar chance to a “budding rock star.” He was referring to the Bruce Falson, the rapper known as “Blood Raw” who had pleaded guilty to an illegal firearms charge.
Shoob postponed Falson’s sentencing for a year, during which time the rapper spoke out against a life of crime in radio interviews before dozens of his concerts. In 2009, Shoob sentenced Falson, who faced up to five years in prison, to three years on probation and ordered him to pay a $20,000 fine.
The rapper T.I., whose name is Clifford Harris Jr., was given a similar opportunity by prosecutors before a different federal judge in 2007. Harris’ sentencing was postponed a year after his guilty plea. He spoke to thousands of youth about the dangers of gangs and crime before receiving greatly reduced prison time for firearms violations.
Kuhlman performed 391 hours of community service during the six months he was given. He spoke about health-care fraud, gave free chiropractic services to the homeless and painted a gym at an elementary school.
On Nov. 14, 2011, Shoob praised Kuhlman for his deeds and sentenced him to the time he spent free while on bond.
Prosecutors, who had asked for three years in prison, appealed, saying the sentence was too lenient. On Friday, the 11th Circuit agreed.
The resolution failed to achieve the important goal of general deterrence, Judge Charles Wilson wrote. Punishing health care fraud is particularly important, because it is so rampant the government lacks the resources to catch it all, Wilson said.
Kuhlman’s lawyer, Jay Strongwater, said the doctor has been put on probation by the state licensing board. While the appeal was pending, Kuhlman continued to perform community service and prosecutors will be informed about that before the new sentencing hearing, Strongwater said.
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