United States v. Siefert & Ehn: Medicare LCDs, Overdose Evidence, and Loss Calculations in Criminal Health‑Care Fraud

United States v. Siefert & Ehn: Medicare Local Coverage Determinations, Overdose Evidence After Ruan, and Loss Calculations in Opioid‑Clinic Health‑Care Fraud

I. Introduction

In United States v. William Lawrence Siefert, M.D. & Timothy Ehn, D.C., Nos. 24‑5384/5385 (6th Cir. Nov. 24, 2025) (recommended for publication), the Sixth Circuit affirmed the convictions and below‑Guidelines sentences of a physician and a chiropractor who operated a Northern Kentucky pain clinic at the height of the opioid epidemic.

The case sits at the intersection of three live issues in federal criminal practice:

  • How Medicare’s Local Coverage Determinations (LCDs) can be used to prove “medical necessity” (or its absence) in a health‑care fraud prosecution;
  • How evidence of uncharged patient overdose deaths may be used after the Supreme Court’s decision in Ruan v. United States, 597 U.S. 450 (2022); and
  • How loss is reasonably estimated for sentencing in pervasive fraud schemes involving large volumes of claims.

The Sixth Circuit’s opinion is important not because it dramatically rewrites doctrine, but because it pulls together and sharpens several strands of law in the specific context of opioid‑clinic fraud:

  • It treats Medicare LCDs as binding contractual and regulatory standards for providers who enroll in Medicare, rejecting a defense theory that LCDs bind only the contractor who issued them.
  • It approves the admission of prior overbilling and kickback conduct under Rule 404(b) to show knowledge, intent, and lack of mistake in a health‑care fraud case.
  • It upholds the use of overdose‑death evidence post‑Ruan to prove unauthorized prescribing, while clarifying the limits of any resulting prejudice.
  • It endorses a pragmatic, percentage‑discount method of estimating loss for fraudulent definitive urine drug testing (UDT), anchored in expert testimony about what would actually be medically necessary.

This commentary walks through the case, its reasoning, and its implications for future prosecutions and defenses in health‑care fraud and opioid‑prescribing cases.

II. Case Background

A. The Parties and the Clinic

  • Dr. Timothy Ehn: a chiropractor who owned and operated the Northern Kentucky Center for Pain Relief. As a chiropractor, he could not prescribe opioids or order UDT, but he controlled the business side.
  • Dr. William Lawrence Siefert: a medical doctor hired in 2014 to run the medical side of the Clinic and serve as medical director. He held DEA authority to prescribe controlled substances.

The Clinic advertised multimodal pain management and prescribed not only opioids but also “helper medicines.” It participated in Medicare, Medicaid, and private insurance networks. As a consequence, its physicians had to follow the governing Medicare rules and local coverage determinations for reimbursement.

B. The Testing Scheme

The Clinic used two types of urine drug tests (UDT):

  • Presumptive UDT: cheaper, in‑office tests that give a positive/negative result for the presence of specific drug classes.
  • Definitive UDT: more expensive tests run on complex instruments, quantifying drug concentrations and often testing many drug classes at once. These tests are reimbursed at much higher rates and require individualized documentation of medical necessity under Medicare’s LCDs.

Evidence showed that:

  • The Clinic had a blanket policy of ordering both presumptive and definitive tests for nearly every patient, at nearly every monthly visit, generally billed at the highest level of reimbursement.
  • Ehn and Siefert jointly developed a business plan to purchase a definitive testing machine and to justify financing based on the highest reimbursement rate for definitive UDT on the 2016 Medicare fee schedule.
  • Clinic staff repeatedly warned about Medicare rules and the need for risk stratification and individualized documentation, but the Clinic continued the high‑volume, high‑level testing pattern.
  • Definitive tests were run on a machine that was known to be malfunctioning (yielding absurd results) and later on samples so old they were medically useless—yet the Clinic still billed for them.

C. The Charges and Trial Outcome

A grand jury charged:

  • Both Ehn and Siefert with:
    • Conspiracy to commit health‑care fraud, 18 U.S.C. § 1349 (Count 13), and
    • Substantive health‑care fraud, 18 U.S.C. § 1347 (Counts 14–15), centered on the UDT billing scheme.
    • Conspiracy to distribute controlled substances, 21 U.S.C. § 846 (Count 1).
  • Siefert alone with eleven counts of unlawful distribution of controlled substances, 21 U.S.C. § 841(a)(1) (Counts 2–12).

After a jury trial:

  • Ehn was convicted of:
    • Health‑care fraud (§ 1347) and
    • Conspiracy to commit health‑care fraud (§ 1349).
  • Siefert was convicted only of:
    • Health‑care fraud (§ 1347).
    He was acquitted of all drug‑distribution and drug‑conspiracy counts and of conspiracy to commit health‑care fraud.

The district court calculated Guidelines offense levels of 24 (Siefert) and 26 (Ehn), resulting in ranges of 51–63 months and 63–78 months, respectively. The court imposed below‑Guidelines sentences:

  • 18 months’ imprisonment for Siefert;
  • 30 months’ imprisonment for Ehn.

Both defendants appealed on multiple grounds, all of which the Sixth Circuit rejected.

III. Summary of the Opinion

The Sixth Circuit (Judge Davis, joined by Judges Gilman and Mathis) held:

  1. Sufficiency of the evidence:
    • There was ample evidence to support Ehn’s conviction for health‑care fraud (§ 1347) and conspiracy to commit health‑care fraud (§ 1349).
    • The “rule of consistency” (that a conspirator cannot be convicted if all other alleged conspirators tried with him are acquitted) has been abrogated by United States v. Powell, so Ehn’s conspiracy conviction stands despite Siefert’s acquittal.
  2. Rule 404(b) evidence:
    • Evidence of prior overbilling and kickback‑related conduct (Southwest Labs, Wellcare, and specimen‑validity double billing) was properly admitted to show knowledge, intent, motive, and absence of mistake, not character.
  3. Medicare LCD jury instruction:
    • The district court correctly rejected Ehn’s proposed LCD instruction as an incorrect statement of law. LCDs bind participating providers contractually and are enforceable unless displaced by an ALJ or HHS rulemaking (Agendia, Inc. v. Becerra, 4 F.4th 896 (9th Cir. 2021)).
  4. Material variance:
    • There was no material variance between the superseding indictment and the government’s proof. The indictment alleged a single fraud scheme carried out by multiple means—over‑testing, billing at the highest level, billing on malfunctioning equipment, and billing for useless delayed tests—all fairly encompassed in the charging language.
  5. Conflict of interest:
    • Ehn knowingly, intelligently, and voluntarily waived any conflict arising from his counsel’s law firm having represented Wellcare (a Medicaid contractor) and Centene (its parent). The waiver was valid under the Sixth Amendment and Fed. R. Crim. P. 44(c).
  6. Prosecutorial misconduct / patient death evidence:
    • The government did not commit misconduct by introducing evidence of seven uncharged patient deaths to prove Siefert’s knowledge and intent on the drug‑distribution counts post‑Ruan. The evidence was relevant; limiting instructions mitigated prejudice; and Siefert was acquitted on all counts to which the evidence related.
  7. Sentencing and loss calculations:
    • The district court’s methodology for estimating loss—summing total amounts paid for definitive UDT, subtracting 20% for potentially legitimate testing based on defense expert testimony, and netting out prior repayments—was a “reasonable estimate” under U.S.S.G. § 2B1.1 and Sixth Circuit precedent.
    • The resulting sentences were procedurally reasonable.

The court affirmed all convictions and sentences.

IV. Analysis of the Court’s Reasoning

A. Sufficiency of the Evidence

1. Health‑Care Fraud under 18 U.S.C. § 1347 (Ehn and Siefert)

To prove health‑care fraud, the government had to show that the defendant:

  1. “knowingly devised” a scheme to defraud a health‑care benefit program;
  2. “executed” that scheme; and
  3. did so with “intent to defraud.”

The court applied standard sufficiency‑of‑the‑evidence review:

  • De novo review;
  • Evidence viewed in the light most favorable to the government;
  • All reasonable inferences in the government’s favor; and
  • No re‑weighing of credibility determinations.
    (United States v. Sumlin, 956 F.3d 879, 891 (6th Cir. 2020); United States v. Maliszewski, 161 F.3d 992, 1005 (6th Cir. 1998); United States v. Ray, 803 F.3d 244, 262 (6th Cir. 2015).)

For Ehn in particular, the Sixth Circuit highlighted:

  • Knowledge of Medicare/Medicaid rules: He enrolled in the programs, thereby agreeing to abide by their regulations and LCDs, which expressly require individualized documentation of medical necessity for definitive tests.
  • Blanket policy of ordering definitive tests: Clinic staff and patient records reflected the practice of ordering both presumptive and definitive tests for almost every patient at every visit, with no individualized assessment.
  • Billing for malfunctioning and stale tests: The Clinic billed for definitive tests run on a machine known to be malfunctioning (returning implausible, “fatal” combinations of drugs in living patients) and for tests run on expired samples that could not be used in patient care.
  • Profit‑driven motive: The 2016 business plan used the highest reimbursement level per test ($215, the top Medicare fee schedule level) as the baseline, with no clinical justification. Ehn also previously benefited from overpayments by Wellcare and specimen‑validity overbilling and sought to keep the windfalls quiet.
  • Conscious awareness of over‑testing: In 2018, Siefert wrote a memo warning that the Clinic was “over‑testing” and needed risk stratification. Ehn’s response—ordering an internal audit but directing that most patients be classified as “high risk”—reinforced that he prioritized minimizing repayments and preserving revenue rather than aligning practices with medical necessity.

The court emphasized that direct evidence of fraudulent intent is unnecessary. Circumstantial evidence—such as systematically billing at the highest level without clinical justification, ignoring staff warnings, and continuing to bill on a broken machine—is sufficient to prove fraudulent intent. (United States v. Betro, 115 F.4th 429, 444–45 (6th Cir. 2024); United States v. Anderson, 67 F.4th 755, 770 (6th Cir. 2023) (per curiam).)

The court also cited United States v. Bertram, 900 F.3d 743, 749 (6th Cir. 2018), for the principle that providers cannot continue to bill tests when passage of time or other factors mean the original certification of medical necessity can no longer plausibly be relied upon.

The evidence “amply” supported a finding that Ehn knowingly designed and executed a scheme to over‑bill for medically unnecessary or useless definitive UDT, satisfying § 1347.

2. Conspiracy to Commit Health‑Care Fraud (§ 1349) and the Abrogated “Rule of Consistency”

To prove conspiracy, the government had to show:

  • Two or more persons agreed to commit health‑care fraud; and
  • The defendant knowingly and voluntarily joined that agreement.

The case law cited—United States v. Rogers, 769 F.3d 372, 377 (6th Cir. 2014), and United States v. Hughes, 505 F.3d 578, 593 (6th Cir. 2007)—confirms that the existence of a conspiracy can be inferred from circumstantial evidence showing a shared understanding and coordinated actions.

Key circumstantial evidence of joint agreement between Ehn and Siefert included:

  • Joint authorship and use of the 2016 business plan premised on billing all definitive tests at the highest reimbursement level;
  • Collaborative effort to bring definitive testing in‑house for profit‑sharing purposes;
  • Ehn’s reliance on Siefert’s DEA authority to order tests while Ehn set the billing and testing policy; and
  • The memos and internal audit in 2018, showing both were aware of over‑testing yet sought to minimize repayments.

Ehn’s main legal argument was that his conspiracy conviction could not stand because the jury acquitted Siefert on the same conspiracy count. He invoked the old common‑law “rule of consistency,” under which a lone conspirator could not be convicted where all alleged co‑conspirators tried with him were acquitted.

The Sixth Circuit rejected that argument as foreclosed. Relying on:

  • United States v. Powell, 469 U.S. 57 (1984);
  • Getsy v. Mitchell, 495 F.3d 295, 306–07 (6th Cir. 2007) (en banc); and
  • United States v. Crayton, 357 F.3d 560, 564–65 (6th Cir. 2004),

the court reaffirmed that inconsistent verdicts are constitutionally tolerable and do not require reversal. Juries may, for a variety of reasons (including lenity or compromise), acquit one defendant and convict another, even on ostensibly parallel theories. The relevant question is whether a rational jury could find that at least one conspirator existed; the answer here was yes.

B. Prior Overbilling and Kickback Conduct Under Rule 404(b)

Ehn challenged the admission of evidence that:

  • He received kickbacks from Southwest Labs for referral testing;
  • He engaged in an overpayment dispute with Wellcare, a Kentucky Medicaid contractor; and
  • He engaged in double billing of specimen‑validity tests from 2016–2018.

The district court had admitted this evidence under Federal Rule of Evidence 404(b) to show motive, intent, knowledge, and lack of mistake. It also gave a limiting instruction restricting the jury’s use of this evidence to those purposes.

The Sixth Circuit applied its “modified abuse‑of‑discretion” framework (United States v. Fairley, 137 F.4th 503, 517 (6th Cir. 2025); United States v. Adams, 722 F.3d 788, 810–11 (6th Cir. 2013)):

  1. Clear‑error review of whether the “other acts” occurred (they did; Ehn did not dispute this).
  2. De novo review of whether the acts were offered for a permissible non‑character purpose. Here, the evidence related to:
    • Conduct “substantially similar and reasonably near in time” to the charged scheme (United States v. Barnes, 822 F.3d 914, 922 (6th Cir. 2016)); and
    • Rebutted Ehn’s “good‑faith mistake” narrative by showing a pattern of overbilling awareness and an inclination to retain ill‑gotten gains.
  3. Abuse‑of‑discretion review of the Rule 403 balancing. The court noted:
    • The evidence’s probative value for knowledge and intent was high.
    • The limiting instruction sharply constrained the jury’s use of the evidence, consistent with United States v. Bartholomew, 310 F.3d 912, 922 (6th Cir. 2002).

The appellate court saw no undue prejudice; the evidence fell comfortably within the traditional use of 404(b) to rebut claims of inadvertence, especially where prior billing disputes involved the same or closely related practices (UDT and laboratory billing).

C. Medicare Local Coverage Determinations (LCDs) and the Jury Instruction

One of the most practically significant aspects of the decision is the court’s treatment of Medicare LCDs.

The government’s theory rested heavily on the idea that the Clinic’s UDT billing was inconsistent with Medicare LCDs, which define when definitive UDT is “reasonable and necessary” and therefore reimbursable. Ehn requested a jury instruction aimed at:

  • Describing the limited formal role of LCDs in claim adjudication; and
  • Stating that only the Medicare contractor that issued an LCD is “bound” by it, because other decision‑makers at each stage of appeal may disregard it.

The district court refused the instruction, calling it confusing and inaccurate. The Sixth Circuit agreed, and expressly clarified LCDs’ legal effect in this context:

  • When Ehn chose to enroll as a Medicare provider, he “entered a contract” obligating him to follow Medicare rules, including LCDs issued by the local contractor.
  • LCDs are binding on providers (not just the contractor) unless:
    • An Administrative Law Judge (ALJ) declines to apply the LCD in an appeal of a specific claim denial; or
    • The Department of Health and Human Services supersedes the LCD via formal rulemaking.
  • The court cited Agendia, Inc. v. Becerra, 4 F.4th 896, 902 (9th Cir. 2021), for this proposition, effectively aligning the Sixth Circuit’s approach with the Ninth Circuit’s.

The proposed instruction incorrectly suggested that only the issuing contractor is bound by an LCD. The panel held that this misstates the law, failing the first prong of the Sixth Circuit’s three‑part test for mandatory defense instructions (United States v. Volkman, 797 F.3d 377, 385 (6th Cir. 2015)): a requested instruction must correctly state the law, not be substantially covered elsewhere, and concern a point essential to the defense.

Additionally, the court noted that the instruction did not clearly express what Ehn claimed it should—namely, that a mere LCD violation does not automatically equal criminal liability. Instead, it risked confusing jurors about what legally mattered.

Practical effect: In the Sixth Circuit, LCDs are not simply advisory “billing guides” that bind only payors. They are contractual and regulatory benchmarks that providers must follow to obtain reimbursement, and they can be used as evidence of whether services were “medically necessary” for criminal fraud purposes—even though violating an LCD alone is not per se a crime.

D. Alleged Material Variance Between Indictment and Proof

Ehn argued that the superseding indictment charged only a “medically unnecessary testing” scheme, while at trial the government supposedly shifted to a different theory: billing for:

  • Tests run on a malfunctioning machine; and
  • Tests processed so late that they were useless for treatment.

He claimed that this amounted to a prejudicial variance—proof of “facts materially different” from those in the indictment. See United States v. Budd, 496 F.3d 517, 521 (6th Cir. 2007); United States v. Davis, 970 F.3d 650, 659 (6th Cir. 2020).

The Sixth Circuit, applying de novo review of variance claims (United States v. Mize, 814 F.3d 401, 408 (6th Cir. 2016)), held:

  • The indictment alleged a single health‑care fraud scheme (2017–2021) and a single conspiracy (2017–2019).
  • The “methods, manner, and means” included:
    • Submitting claims for services “not performed or not medically necessary”;
    • Using a “blanket order” for UDT regardless of patient need;
    • Billing at higher levels of complexity than necessary; and
    • Billing for definitive UDT “not used to treat patients.”
  • The indictment listed specific billed claims that overlapped with periods when the machine malfunctioned or when tests were processed so late as to be clinically meaningless.

Against this backdrop, the court found no variance at all:

  • Additional detail is not variance: “[T]he presentation of additional evidence to substantiate charged offenses … does not constitute facts materially different from those charged” (Kuehne, 547 F.3d 667, 686 (6th Cir. 2008)).
  • Conspiracy theory unchanged: The government always alleged one conspiracy to maximize profits through fraudulent UDT, regardless of which specific fraudulent acts (over‑testing, malfunctioning equipment, delay) the proof emphasized.
  • There was no shift from one conspiracy to multiple conspiracies, which is the typical basis for reversing on variance in conspiracy cases (Adams, 722 F.3d at 805–06; United States v. Caver, 470 F.3d 220, 236 (6th Cir. 2006)).

Without a variance, there was no need to consider prejudice to Ehn’s substantial rights (Mize, 814 F.3d at 409).

E. Counsel’s Conflict of Interest and Waiver (Ehn)

The government identified a potential conflict because Ehn’s chosen law firm:

  • Had previously represented Wellcare of Kentucky in the Clinic’s overpayment dispute; and
  • Represented Centene Corp., Wellcare’s parent, during the criminal proceedings.

The district court conducted a Rule 44(c) hearing and obtained a written waiver from Ehn. On appeal, Ehn argued that this conflict hampered counsel’s ability to use the Wellcare dispute in his defense.

The Sixth Circuit reiterated the standard from United States v. Osborne, 402 F.3d 626, 630–31 (6th Cir. 2005):

  • A defendant’s waiver of conflict‑free counsel must be knowing, intelligent, and voluntary.
  • The court must ensure the defendant understands:
    • The right to conflict‑free counsel;
    • The nature of the conflict and its potential impact on defense strategy; and
    • His right to consult with independent counsel on the conflict issue.

The record showed:

  • Ehn discussed the conflict with counsel;
  • He declined independent counsel three times;
  • He understood the firm could not use confidential information from the Wellcare representation against Wellcare; and
  • He signed a written waiver expressly acknowledging the risk and stating he wished to continue with current counsel.

The court held that Ehn waived any challenge to the conflict and that the district court properly accepted that waiver.

F. Prosecutorial Misconduct and Uncharged Patient Death Evidence (Siefert)

1. The Ruan Context and the Evidence at Issue

Post‑Ruan, the government must prove that a prescriber knowingly or intentionally acted in an unauthorized manner when issuing controlled‑substance prescriptions. The prosecution sought to show that Siefert was aware his prescribing practices were dangerous or abusive by presenting:

  • Evidence of seven patients who died from overdoses; and
  • Expert testimony that Siefert’s prescribing contributed to those deaths;
  • Family testimony indicating obvious signs of addiction while Siefert continued prescribing.

Before trial, the district court denied Siefert’s motion in limine, allowing “targeted” death‑related evidence to show knowledge and intent as to the drug counts, emphasizing that Ruan did not change the law of evidence but heightens the mens rea showing the government must make.

At trial:

  • The government produced direct or circumstantial evidence of Siefert’s knowledge of three patient deaths; for four others, proof of his knowledge was weaker.
  • The court issued limiting instructions:
    • Evidence of death could be considered only for knowledge/intent on the distribution counts, specifically to evaluate whether Siefert prescribed outside the usual course of professional practice and without legitimate medical purpose.
    • Death‑related evidence for a patient about whom Siefert had no knowledge should be disregarded as to his knowledge.

The jury ultimately acquitted Siefert on all drug‑distribution and conspiracy counts.

2. Misconduct Argument and Standard

On appeal, Siefert reframed his objections as prosecutorial misconduct, arguing that:

  • The prosecution defied the pretrial order by presenting death evidence without a “good‑faith” basis to prove knowledge;
  • The evidence was irrelevant and unduly prejudicial; and
  • The “cumulative effect” deprived him of due process on the remaining health‑care fraud count.

The court applied its two‑step misconduct analysis (United States v. Carson, 560 F.3d 566, 574 (6th Cir. 2009)):

  1. Were the challenged actions improper?
  2. If so, were they flagrant enough to warrant reversal?

The Sixth Circuit stopped at step one: there was no improper conduct.

3. No Violation of the Pretrial Order or Good‑Faith Duty

The panel noted:

  • The pretrial order did not categorically require direct proof of Siefert’s knowledge of each death as a condition to admitting death evidence. It contemplated that circumstantial evidence of “red flags” and deliberate ignorance could be sufficient.
  • The district court never found that the government had violated its order; to the contrary, it tailored mid‑trial limiting instructions to reflect the actual proof.
  • The prosecution had previewed death‑related evidence at the pretrial conference, and the district court had expressly found the proffer sufficient for admissibility. The subsequent failure to establish knowledge as to four patients does not retroactively prove bad faith.

Thus, the government’s use of death evidence to meet Ruan’s mens rea requirement was not misconduct.

4. Relevance, Prejudice, and Harmlessness

The court reaffirmed:

  • Evidence of overdoses and deaths is relevant to whether a prescriber knew or should have known that his prescribing practices were unauthorized under 21 U.S.C. § 841, as interpreted by Ruan.
  • Any risk of unfair prejudice was mitigated by:
    • Specific limiting instructions; and
    • The fact that the jury acquitted Siefert on all charges to which the death evidence was directly relevant.

Citing Samia v. United States, 599 U.S. 635, 646 (2023), the panel relied on the presumption that jurors follow limiting instructions. It also drew an analogy to United States v. Suarez, 263 F.3d 468, 484 (6th Cir. 2001), which held that improperly admitted evidence relating only to acquitted counts does not generally taint convictions on distinct counts absent a concrete showing of spillover prejudice.

Thus, even assuming arguendo that some death evidence should have been excluded, any error was harmless beyond a reasonable doubt as to the health‑care fraud conviction. There was no cumulative prejudice sufficient to render the trial fundamentally unfair (Slagle v. Bagley, 457 F.3d 501, 515 (6th Cir. 2006); Darden v. Wainwright, 477 U.S. 168, 181 (1986); United States v. Hernandez, 227 F.3d 686, 697 (6th Cir. 2000); United States v. Trujillo, 376 F.3d 593, 614 (6th Cir. 2004)).

G. Loss Calculation and Sentencing Reasonableness

Both defendants challenged the district court’s loss calculations, which drove their Guidelines offense levels. Under U.S.S.G. § 2B1.1, the offense level for economic offenses rises with the “greater of actual or intended loss.” The Sixth Circuit’s framework is:

  • “Actual loss” is the reasonably foreseeable pecuniary harm resulting from the offense (United States v. Triana, 468 F.3d 308, 319–20 (6th Cir. 2006));
  • Where precise calculation is difficult, courts need only make a “reasonable estimate of the loss” based on available information; and
  • Facts must be found by a preponderance of the evidence (United States v. White, 492 F.3d 380, 416 (6th Cir. 2007); United States v. Wendlandt, 714 F.3d 388, 393 (6th Cir. 2013)).

Here, the probation office initially calculated loss based on amounts billed for definitive tests, then subtracted 20% for legitimate services, yielding tens of millions in loss. Both sides objected to using billed amounts; they agreed that amounts paid were the appropriate starting point.

The district court:

  1. Adopted the paid amounts for all definitive UDT;
  2. Subtracted 20% to account for tests that might actually have been medically necessary; and
  3. Further reduced the figure by amounts repaid to Wellcare in a 2019 settlement.

This yielded:

  • Loss attributable to Siefert: $1,968,765.69;
  • Loss attributable to Ehn: $4,079,182.93.

Why 20%? The court grounded this number in defense expert testimony that, appropriately used, definitive UDT should occur only once or twice per year per patient—roughly 8–16% of the Clinic’s testing frequency. By crediting a 20% legitimate‑test rate, the court erred on the side of generosity to the defendants.

The Sixth Circuit held this was a reasonable estimate:

  • Given the pervasive, blanket testing practices, the court was entitled to presume that the vast majority of definitive UDT lacked medical necessity.
  • Using only definitive tests as the base avoided disputes about presumptive tests, which may legitimately be done more routinely.
  • The methodology was transparent and tied to evidence, satisfying the requirement that the court “actually find facts” by a preponderance (White, 492 F.3d at 416).

As a result, the panel found no clear error in the loss findings and no procedural error in the sentences. It noted that both sentences were significantly below the applicable Guidelines ranges, further undercutting any claim of prejudice (United States v. Rayyan, 885 F.3d 436, 440 (6th Cir. 2018); Betro, 115 F.4th at 454).

V. Key Precedents and Their Role in the Decision

The opinion is notable for the way it synthesizes a number of recent and older precedents:

  • Ruan v. United States, 597 U.S. 450 (2022):
    • Establishes the mens rea requirement for prescribers charged under § 841.
    • Here, it justified the admission of overdose evidence to prove knowledge and intent, while the court clarified that Ruan does not alter the basic evidentiary rules.
  • United States v. Powell, 469 U.S. 57 (1984) and Getsy v. Mitchell, 495 F.3d 295 (6th Cir. 2007) (en banc):
    • Abrogate the “rule of consistency” in conspiracy verdicts.
    • Used here to uphold Ehn’s conspiracy conviction despite Siefert’s acquittal.
  • Agendia, Inc. v. Becerra, 4 F.4th 896 (9th Cir. 2021):
    • Adopted to support the conclusion that Medicare LCDs bind providers and may be disregarded only by ALJs or through HHS rulemaking.
    • Central to rejecting Ehn’s LCD jury instruction as a misstatement of law.
  • United States v. Betro, 115 F.4th 429 (6th Cir. 2024); Anderson, 67 F.4th 755 (6th Cir. 2023):
    • Reaffirm that intent in fraud cases can be proved entirely by circumstantial evidence, and sufficiency is evaluated in the light most favorable to the verdict.
    • Cited to support the jury’s inferences from Ehn’s billing patterns and internal communications.
  • Triana, 468 F.3d 308; Wendlandt, 714 F.3d 388; White, 492 F.3d 380:
    • Anchor the “reasonable estimate” approach to loss in financial fraud cases.
    • Support the percentage‑discount method used here for UDT loss estimation.
  • Fairley, 137 F.4th 503; Adams, 722 F.3d 788; Barnes, 822 F.3d 914; Bartholomew, 310 F.3d 912:
    • Define the Sixth Circuit’s structured approach to Rule 404(b) and Rule 403 balancing.
    • Applied to uphold admission of prior overbilling and kickback episodes against Ehn.

VI. Simplifying the Complex Concepts

Several technical concepts are essential to understanding the decision.

A. Presumptive vs. Definitive Urine Drug Testing (UDT)

  • Presumptive UDT:
    • Quick, cheaper tests (often immunoassays) that show whether a drug class is present.
    • Commonly used as routine monitoring; typically covered by insurers when reasonable.
  • Definitive UDT:
    • Performed using more sophisticated instruments (e.g., mass spectrometry).
    • Quantifies drug concentrations and can test many drug classes in one run.
    • More expensive and reimbursed at higher rates; Medicare requires specific documentation of why such testing is necessary for each patient at each time.

B. Medicare Local Coverage Determinations (LCDs)

LCDs are written policies issued by Medicare Administrative Contractors (MACs) that define when a service is “reasonable and necessary” in that contractor’s jurisdiction. In this case:

  • LCDs specified when and how often definitive UDT would be reimbursed;
  • They required:
    • Individualized assessment of each patient’s risk of misuse or noncompliance;
    • Documentation of why definitive UDT is necessary for that visit; and
    • Justification for each drug class tested.

The Sixth Circuit treated LCDs as binding contractual standards for enrolled providers, not just internal claims‑processing guidance, although violating an LCD alone does not automatically constitute a crime. Instead, LCD violations are powerful evidence that services billed as “medically necessary” were not, in fact, necessary.

C. “Medical Necessity” in Health‑Care Fraud

For Medicare/Medicaid, a service is “medically necessary” when it is:

  • Reasonable and necessary for diagnosis or treatment of illness or injury;
  • Furnished at the proper level, frequency, and duration; and
  • Supported by adequate documentation.

In criminal fraud, the question is whether the defendant knew that services were not medically necessary but billed them as if they were. LCDs and other coverage policies operationalize medical necessity and become key evidence of the defendant’s knowledge and intent.

D. Risk Stratification

In chronic pain management, “risk stratification” means assessing each patient’s individual risk for misuse, abuse, or diversion of opioids. Factors include:

  • History of substance use disorder;
  • Psychiatric comorbidities;
  • Behavioral red flags (lost prescriptions, early refill requests, etc.).

Higher‑risk patients may warrant more frequent drug testing or definitive UDT; low‑risk patients may need far less frequent testing. In this case, Siefert’s 2018 memo acknowledged the Clinic should be doing risk stratification, while Ehn’s direction to classify nearly all patients as “high risk” undermined the legitimacy of that process.

E. Health‑Care Fraud and Conspiracy Statutes

  • 18 U.S.C. § 1347 (Health‑Care Fraud):
    • Makes it a crime to knowingly and willfully execute a scheme or artifice to defraud a health‑care benefit program, or to obtain money or property by false or fraudulent pretenses, in connection with health‑care benefits.
  • 18 U.S.C. § 1349 (Conspiracy):
    • Criminalizes conspiracy to commit any offense under the fraud chapter, including § 1347.
    • Does not require proof of an overt act (unlike some other conspiracy statutes).

F. Rule 404(b) “Other Acts” Evidence

Rule 404(b) prohibits using other bad acts simply to show that a person has a bad character and therefore likely acted in conformity with that character. But it permits such evidence to show:

  • Motive;
  • Opportunity;
  • Intent;
  • Preparation;
  • Plan;
  • Knowledge;
  • Identity; or
  • Absence of mistake or accident.

In fraud cases, prior billing misconduct is frequently admitted to rebut claims of good faith or honest mistake, so long as the court gives a limiting instruction and conducts Rule 403 balancing to prevent unfair prejudice.

G. Loss Calculation under U.S.S.G. § 2B1.1

In fraud cases, “loss” for Guidelines purposes is not the profit made by the defendant, but the total financial harm (or risk of harm) to victims:

  • Actual loss: reasonably foreseeable pecuniary harm actually resulting from the offense.
  • Intended loss: the pecuniary harm that the defendant purposely sought to inflict, even if it did not occur.

Courts regularly estimate loss by:

  • Using claim data (e.g., total amounts paid for certain services);
  • Identifying a subset of clearly legitimate claims; and
  • Applying a percentage discount to account for some services that may have been proper, based on expert testimony or sampling.

Precision is not required; what matters is that the method is reasonable and grounded in evidence.

VII. Impact and Future Implications

A. LCDs as Binding Standards in Criminal Health‑Care Fraud

The court’s reliance on Agendia and its explicit rejection of Ehn’s LCD instruction give prosecutors and regulators a clearer tool in the Sixth Circuit:

  • Providers who enroll in Medicare bind themselves to comply with LCDs, absent reversal in ALJ proceedings or superseding rulemaking.
  • Violation of LCD requirements—such as individualized risk stratification for definitive UDT—can be compelling evidence that claims were not medically necessary despite certifications to the contrary.

Defense counsel can no longer credibly argue in this circuit that LCDs are mere contractor suggestions binding only the MAC. Instead, the fight shifts to:

  • Whether the LCD was correctly interpreted and applied;
  • Whether the provider reasonably relied on conflicting guidance; and
  • Whether the government is improperly equating regulatory noncompliance with fraud, without proof of intent.

B. Overdose and Death Evidence Post‑Ruan

The opinion implicitly endorses a broad range of circumstantial evidence—red flags, overdoses, family reports of addiction—to prove that a prescriber acted in an unauthorized manner. But it also:

  • Encourages trial courts to use narrow limiting instructions segregating how and for what purpose such evidence may be used;
  • Signals that where juries acquit on drug charges, death evidence is unlikely to be found prejudicial as to other, conceptually distinct counts (such as health‑care fraud).

Future litigants should expect continued admission of overdose evidence, with disputes focusing on:

  • The scope of permissible inferences;
  • The sufficiency of limiting instructions; and
  • Whether evidence of patients’ deaths, particularly where knowledge is thin, substantially outweighs probative value under Rule 403.

C. Loss Estimation in High‑Volume Medical Billing Fraud

The court’s acceptance of a percentage discount method grounded in expert testimony (rather than patient‑by‑patient claim review) reinforces that:

  • In large schemes, courts may reasonably extrapolate from practice patterns and expert opinions;
  • Defendants who argue for lower loss amounts will need to offer concrete, data‑driven alternatives (e.g., audits, sampling) rather than simply criticizing the government’s global approach;
  • Generous discounts (here, 20% when evidence suggested 8–16% at most) are viewed favorably and may blunt appellate challenges.

D. Conspiracy Verdicts and Inconsistent Outcomes

The decision continues the Sixth Circuit’s line of authority rejecting the “rule of consistency.” Defendants will have limited ability to attack conspiracy convictions simply because co‑defendants were acquitted at the same trial. The focus will remain on:

  • Whether sufficient evidence showed some agreement with someone; and
  • Whether the individual defendant knowingly joined it.

E. Rule 404(b) Patterns in Health‑Care Fraud

This case adds to a growing body of authority approving the admission of prior billing misconduct and disputes in health‑care fraud prosecutions:

  • When issues of “good faith” or “inadvertence” are raised, prior overpayment disputes, kickbacks, or similar conduct close in time and subject matter will frequently be deemed admissible.
  • Defense counsel must anticipate that prior administrative or civil settlements may reappear in criminal trials as Rule 404(b) evidence and plan strategies accordingly (e.g., stipulations, limiting instructions, or outright exclusion where dissimilar).

VIII. Conclusion

United States v. Siefert & Ehn is an instructive, fact‑dense opinion at the intersection of opioid prescribing, laboratory billing, and Medicare rules. It does not create a brand‑new doctrine, but it meaningfully clarifies how existing principles apply in modern health‑care fraud prosecutions:

  • Medicare LCDs are binding standards for participating providers and can be used to measure “medical necessity” in fraud trials.
  • Overdose and death evidence remains admissible post‑Ruan to prove a prescriber acted outside authorized practice, so long as courts control for relevance and prejudice.
  • Loss in pervasive medical billing fraud can be reasonably estimated through rate‑based, percentage‑discount methodologies tied to expert testimony and practice patterns.
  • Prior overbilling conduct and disputes, when similar in time and subject, are potent Rule 404(b) evidence of knowledge and intent.
  • Inconsistent conspiracy verdicts are doctrinally acceptable; acquittal of one alleged conspirator does not shield another where independent evidence supports his agreement and intent.

For health‑care providers, compliance officers, and criminal practitioners, the opinion underscores the need to treat LCDs and other coverage policies not merely as billing guidance, but as standards with real criminal consequences when knowingly flouted. For courts, it provides a model for managing the complex evidentiary and sentencing issues that recur in high‑volume, opioid‑era health‑care fraud cases.

Case Details

Year: 2025
Court: Court of Appeals for the Sixth Circuit

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