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Commonwealth v. Rogal

Superior Court of Pennsylvania

July 7, 2015

OWEN ROGAL, Appellant

Argued, February 24, 2015

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[Copyrighted Material Omitted]

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Appeal from the Judgment of Sentence November 18, 2013 of the Court of Common Pleas, Philadelphia County, Criminal Division at No(s): CP-51-CR-0002115-2012. Before TRENT, J.

Cheryl J. Sturm, Chadds Ford, for appellant.

Michael C. Witsch, Assistant District Attorney, Philadelphia, for Commonwealth, appellee.


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Dr. Owen Rogal appeals the judgment of sentence entered November 18, 2013, in the Philadelphia County Court of Common Pleas. The trial court sentenced Rogal to a term of one to seven years' imprisonment after a jury found him guilty of 31 charges, including corrupt organizations, conspiracy, theft by deception, attempted theft by deception, and insurance fraud.[1] The jury determined Rogal and his daughter, co-defendant Kim Rogal, intentionally and systematically used an improper billing code to collect higher payments from insurance companies for procedures performed in their pain clinic. On appeal, Rogal contends (1) the evidence was insufficient to support the verdict; (2) the trial court failed to act as gatekeeper when it permitted the dual testimony of Commonwealth witness, Frank J. Dubeck, Jr., M.D., as both a lay witness and an expert witness; and (2) the court erred in failing to determine that Rogal's attorney operated under a conflict of interest. For the reasons below, we affirm.

The facts underlying Rogal's conviction are as follows. Rogal and his daughter, Kim Rogal, owned and operated The Pain Center (" TPC" ), a clinic that specialized in performing radio frequency surgery (" RFS" ) to relieve pain. Rogal, a dentist by trade, supervised the doctors employed by TPC and interviewed prospective patients, while Kim Rogal was the office manager and ran the billing department.[2] Kim Rogal also developed the computerized billing program TPC used to bill insurance companies for the RFS procedure.

RFS is a simple, " low-risk" procedure, performed in an office suite,[3] that uses " high-intensity heat" to reduce pain. N.T., 4/23/2013, at 20, 89. At TPC, a doctor would apply a local anesthetic to numb the area on the patient, and then insert a needle, guided by a fluoroscope,[4] to administer

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heat to a small area to stop the pain. See id. at 31-38. The doctors working at TPC did not receive any specialized training, but rather, simply observed other physicians performing RFS for a few days before attempting the procedure themselves. Id. at 15. Dr. John Paul Palmerio, who worked at TPC from November of 2004 until March of 2012, testified the doctors at TPC " worked strictly on bone" to relieve pain in the " cervical spine, thoracic spine, lumbar spine, hips, on a knee, or on a[n] elbow[.]" Id. at 23.

Since 1990, TPC has been billing insurance companies for the RFS procedure using standard billing code 61790 (" CPT Code 61790" ).[5] In layman's terms, CPT Code 61790 refers to " destroying tissue with precise locational control by sticking something through the skin that destroys the nerve of the gasserian ganglion." N.T., 4/22/2013, at 75. The gasserian ganglion, located in the " cranial vault," is " one of the 12 cranial nerves in the brain," and " supplies sensation to the face and taste to the anterior two-thirds of the tongue." [6] Id. at 69. The procedure described in CPT Code 61790 is a " very delicate" procedure which is usually performed by a neurosurgeon in an operating room with the assistance of an anesthesiologist. Id., at 70; N.T., 4/25/2013, at 21. It is used as a last resort to treat patients with trigeminal neuralgia, " a debilitating facial pain." [7] N.T., 4/22/2013, at 88. While the procedure described in CPT Code 61790 is similar to the RFS procedure performed at TPC, that is, a doctor sticks a needle through the skin to destroy nerves, the doctors at TPC never performed procedures near the brain.[8]

Nevertheless, TPC always billed its low-risk RFS procedure using CPT Code 61790, which had a reimbursement value of $4,800. N.T., 4/23/2013, at 51, 54-55. Whereas, the typical reimbursement value for the actual procedure performed at TPC was $300 to $400. Id. at 109. During the course of the subsequent investigation, the Commonwealth determined that TPC billed 12 insurance companies in excess of $5,000,000.00 under CPT Code 61790.[9] N.T., 4/24/2013, at 108. Furthermore, although the Commonwealth's expert neurosurgeon

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testified it would be rare for a patient to undergo the procedure at CPT Code 61790 more than once, TPC billed insurance companies for as many as 78 treatments for the same patient. See N.T., 4/24/2013, at 116-117; N.T., 4/25/2013, at 31.

Eventually, the insurance companies began flagging claims submitted by TPC. See N.T., 4/22/2014, at 123 (Blue Cross Excellus); N.T. 4/24/2013, at 20 (Horizon Blue Cross Blue Shield of New Jersey); 75 (Aetna). In 2005, both Horizon and Aetna notified TPC that its use of CPT Code 61790 was improper for the procedure actually performed. Ann Browne, Senior Investigator for Horizon, testified that after meeting with TPC's attorney, Kevin Rafeal, she obtained 12 peer reviews, per his request, which all confirmed that CPT Code 61790 was not appropriate for the procedure performed at TPC. N.T., 4/24/2012, at 15. Although she informed Rafeal of the coding problem in 2006, TPC continued to bill Horizon for CPT Code 61790, using the individual physician's taxpayer ID numbers until June of 2010. Id. at 22. Similarly, Elizabeth Saragusa, fraud investigator for Aetna, testified that Aetna began flagging TPC claims in 2004. Id. at 75.

Dr. Stuart Kaufmann began working for TPC in late 2004. About a year later, he was contacted by a Blue Cross representative, who informed him of the billing code discrepancy. N.T., 4/23/2013, at 101. Dr. Kaufmann testified at trial that he was angry because he feared he might lose his medical license. Id. at 102. He stated he confronted Rogal who responded as follows:

He tried to reassure me that he had really good attorneys who said that the procedure [was] billed correctly, and not to worry, and I am making something out of nothing, that insurance companies for years have been trying to take him down. It was just more of a witch hunt is basically what he told me.

Id. at 103. Dr. Kaufmann then spoke with TPC's attorney, Kevin Rafeal, regarding his concerns about the legality of the code. After that conversation, Dr. Kaufmann left TPC.

In February of 2005, another TPC physician, Dr. John Paul Palmerio, received a similar letter from Highmark Insurance Company questioning his submission of bills using CPT Code 61790. Id. at 52, 57. Dr. Palmerio spoke with Kim Rogal the next day. She told him " not to worry" because " [t]hese people are not allowed to do what they are doing." Id. at 60. She also told him she was " turning it over to the lawyers who [would] write [him] a letter regarding this matter." Id.

Dr. Dubeck, who was medical liaison to the fraud unit for Blue Cross Excellus, testified that his company was notified by another Blue Cross plan to take a " closer look" at the TPC bills.[10] N.T., 4/22/2013, at 67. His investigation revealed the billing code TPC used was for " brain surgery," but the procedure actually performed " was nowhere near the brain." Id. at 68. Blue Cross Excellus began flagging TPC's claims in September of 2009. In response to an appeal by TPC, Dr. Dubeck sent Kim Rogal a detailed letter on December 18, 2009, in which he explained the use of CPT Code 61790 for the RFS procedure performed at TPC was incorrect and provided two alternative codes for the procedure performed. Id. at 170-173. However, despite having advised Kim Rogal " in no uncertain terms ... not to bill [Excellus] using the code 61790 ever again[,]" Execellus received at least six subsequent

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bills from TPC in 2010 with CPT Code 61790. Id. at 174-175.

Additionally, in late 2009, the Philadelphia District Attorney's Office received a referral regarding TPC's fraudulent billing practices from the National Insurance Crime Bureau. After further investigation, District Attorney Detective Karl Supperer secured a search warrant for TPC, which he executed on November 22, 2010. A 15-month grand jury investigation followed, after which the Commonwealth charged Rogal and his daughter with multiple crimes, including corrupt organizations, conspiracy and insurance fraud.[11] On February 16, 2012, the trial court granted the Commonwealth's motion to bypass a preliminary hearing and proceed to trial.

On May 1, 2013, a jury returned a verdict of guilty on all charges against both Rogal and Kim Rogal. Prior to sentencing, Cheryl J. Sturm, Esq., entered her appearance on behalf of Rogal. On October 22, 2013, counsel filed a motion for extraordinary relief challenging, inter alia, the sufficiency of the evidence, several evidentiary rulings and a potential conflict of interest regarding trial counsel's representation. The trial court denied the motion without a hearing on November 5, 2013. On November 18, 2013, the court imposed concurrent sentences of one to seven years' incarceration on each of Rogal's 31 convictions.[12] Rogal filed a timely post sentence motion and a motion for modification of sentence, both of which the trial court denied without a hearing. This timely appeal follows.[13]

In his first issue on appeal, Rogal challenges the sufficiency of the evidence supporting his convictions of corrupt organizations and conspiracy. With respect to the corrupt organizations charge, Rogal argues that there is no evidence he committed a predicate act of racketeering. Further, with respect to the conspiracy charge, he contends he was found guilty by association. Specifically, Rogal asserts there was no evidence he had a shared criminal intent with his daughter to defraud the insurance companies. Rather, he argues, the evidence demonstrates he had no involvement in the billing process, which was handled exclusively by Kim Rogal, and the jury improperly inferred a conspiracy based solely on their father/daughter relationship. He also maintains the remaining convictions were tarnished by the stigma of the corrupt organizations charge.

Our review of a challenge to the sufficiency of the evidence is well-established.

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We review the evidence in the light most favorable to the verdict winner to determine whether there is sufficient evidence to allow the jury to find every element of a crime beyond a reasonable doubt.
In applying the above test, we may not weigh the evidence and substitute our judgment for the fact-finder. In addition, we note that the facts and circumstances established by the Commonwealth need not preclude every possibility of innocence. Any doubts regarding a defendant's guilt may be resolved by the fact-finder unless the evidence is so weak and inconclusive that as a matter of law no probability of fact may be drawn from the combined circumstances. The Commonwealth may sustain its burden of proving every element of the crime beyond a reasonable doubt by means of wholly circumstantial evidence. Moreover, in applying the above test, the entire record must be evaluated and all evidence actually received must be considered. Finally, the finder of fact while passing upon the credibility of witnesses and the weight of the evidence produced, is free to believe all, part or none of the evidence.

Commonwealth v. Tejada, 2015 PA Super 2, 107 A.3d 788, 792-793 (Pa. Super. 2015) (citation omitted).

The crime of corrupt organizations is codified at Section 911 of the Crimes Code, which provides, in relevant part:

It shall be unlawful for any person employed by or associated with any enterprise to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity.

18 Pa.C.S. § 911(b)(3). It is also unlawful for a person to conspire to violate subsection (b)(3). Id. at § 911(b)(4). Subsection (h) defines " enterprise" as " any ... corporation, association or other legal entity, ... engaged in commerce and includes legitimate as well as illegitimate entities and governmental entities." Id. at § 911(h)(3). Further, the subsection lists numerous crimes that constitute " racketeering activity," including theft and insurance fraud, and defines a " pattern of racketeering activity" as " a course of conduct requiring two or more acts of racketeering activity one of which occurred after the effective date of this section." Id. at § § 911(h)(1), (h)(4).

With regard to Rogal's conspiracy conviction, we note:

To sustain a conviction for criminal conspiracy, the Commonwealth must establish the defendant: 1) entered into an agreement to commit or aid in an unlawful act with another person or persons; 2) with a shared criminal intent; and 3) an overt act was done in furtherance of the conspiracy. The conduct of the parties and the circumstances surrounding such conduct may create a web of evidence linking the accused to the alleged conspiracy beyond a reasonable doubt. The conspiratorial agreement can be inferred from a variety of circumstances including, but not limited to, the relation ...

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