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The Georgia Supreme Court has reversed a pair of lower court rulings that had threatened the state’s ability to prosecute millions of dollars in Medicaid fraud. Monday’s decision reinstated convictions against a doctor accused of charging the state for unnecessary drug tests and the owner of a counseling center accused of submitting bogus claims for $150,000 in psychotherapy services. The Georgia Court of Appeals last year held that Medicaid fraud cases must be prosecuted only in DeKalb County, Ga., because that is where Medicaid claims are processed, making it the only county where venue would be proper. But in a decision by Justice Hugh P. Thompson, the justices ruled that Medicaid fraud was “an ongoing crime which occurs in any county in which an act in furtherance of the crime is committed.” Thompson added that since the Medicaid fraud statute prohibits attempts to obtain illegal payments, “it would be illogical to require prosecution only where the claims are processed because in the case of attempted Medicaid fraud the crime may never reach that level of completion.” Among 18 other decisions released on Monday, the justices ruled the American Red Cross could not be held liable for distributing blood, which was later given to a patient, that did not conform to its HIV-screening procedures. VENUE FOR MEDICAID FRAUD The Medicaid fraud cases dealt with one of Georgia Attorney General Thurbert E. Baker’s top priorities. His Web site boasts that since 1995, the state’s Medicaid fraud unit has won more than 130 convictions and $35 million in fines. But last year’s decisions by the Georgia Court of Appeals posed “a real danger” to the prosecutions, according to a brief by Baker and Harrison Kohler, a senior assistant attorney general. They argued that holding all trials in DeKalb would require transportation for witnesses all across Georgia. And if the state ever outsourced its Medicaid processing to an out-of-state company, they added, it might be impossible to prosecute Medicaid fraud cases altogether. The decisions came from a panel of Presiding Judge Edward H. Johnson and Judges John J. Ellington and John H. Ruffin Jr. They held that the state failed to prove that Michael Jon Kell, the doctor accused of bilking Medicaid for unnecessary drug tests, committed his crime in Fulton County, where the trial was held. Proper venue was in DeKalb County, the judges said, because that is where the state processes its Medicaid bills. Culver v. State, 254 Ga. App. 297 (2002). Two weeks later, the panel repeated its reasoning in a decision that reversed convictions against a former Atlanta businesswoman, JoAnn Fletcher Cash. She was accused in Glynn County of billing Medicaid nearly $150,000 for psychotherapy services at a counseling service she owned, even though no psychologist worked at her company for much of the time it was in business. Again, the appeals court said the case belonged in DeKalb County. Cash v. State, 254 Ga. App. 718 (2002). Writing for the panel, Ruffin cited a 1998 decision by the Georgia Supreme Court, State v. Johnson, 269 Ga. 370, that indicated venue for illegal collection of medical assistance benefits is the county where a false report was submitted. Ruffin agreed with the state’s lawyers that the discussion of Medicaid fraud in the Johnson decision — which dealt with making false statements, not Medicaid fraud — was only dicta. But he added that the Georgia Supreme Court’s opinion offered guidance, “and we refuse to ignore that guidance.” On Monday, Thompson confirmed that the guidance in Johnson and a 1990 case, State v. Barber, 260 Ga. 269, was mere dicta “and thus are not binding with regard to the issue presently before the Court.” Noting that this was the first time the court spoke definitively on the issue, Thompson concluded that Medicaid fraud prosecutions “may be brought in any county in which an act in furtherance of the crime took place.” State v. Kell, No. S02G0997 and State v. Cash, No. S02G1144 (Sup. Ct. Ga. Feb. 24, 2003). A Baker spokesman said the Medicaid fraud unit had not stopped its prosecutions because of the earlier decisions. He added that the Law Department’s interpretation of the law was upheld by the Georgia Supreme Court unanimously. Kell’s lawyer, Leonard L. Franco, said the decision was “a radical departure from previous rulings,” making Georgia law similar to federal law by allowing prosecutors wide latitude in choosing venue. Franco added that he was considering challenging Kell’s conviction by filing a federal habeas corpus suit. Kell was fined $50,000 for his Medicaid fraud convictions. Cash’s lawyer, James A. Yancey, had not yet received the decision when asked for comment. BLOOD-BANK LIABILITY The Red Cross case came out of an August 1998 episode in which a woman received a transfusion of blood that all sides now agree never should have been accepted by the Red Cross. The blood came from a man who had lived for 13 months in a region of Africa where a rare, undetectable strain of HIV called “Group O” was known to exist, according to the Georgia Court of Appeals decision in the case. As a precaution, the Red Cross did not allow people who had lived in that area of Africa for longer than 12 months to donate blood. The donor had not tested positive for HIV in the five years since he had left Africa, and there was no evidence that he had been exposed to the virus. In October 1998, the Red Cross notified the Cartersville, Ga., hospital that administered the transfusion that it had supplied the hospital with blood that did not meet its standards. A doctor informed the patient, 75-year-old Bernice Mantooth, of the mistake in December 1998. Mantooth died in 2001, but there’s no evidence she died of an AIDS-related illness. Lawyers for her estate, Richard L. Brittain and Wendell R. Bird of Atlanta’s Bird & Associates, wrote in court briefs that upon hearing of the Red Cross mistake, “Mrs. Mantooth suffered sleeplessness, anxiety and drastic changes in her daily habits.” An HIV test was negative, but the lawyers added, “the tests offered no reassurance” because the donor had been in an area where “undetectable” HIV exists. Thus, Mantooth spent the rest of her life “in serious fear that she had Group O HIV or AIDS,” the lawyers said. Mantooth sued the Red Cross and others for negligence and intentional infliction of emotional distress before she died. But Fulton Superior Court Judge Constance C. Russell granted summary judgment to the Red Cross based on the conclusion that Mantooth failed to present any evidence that she was actually exposed to HIV. At the Georgia Court of Appeals, Chief Judge G. Alan Blackburn, Presiding Judge Marion T. Pope Jr. and Judge Charles B. Mikell Jr. affirmed Russell’s ruling. Mantooth v. American National Red Cross, 253 Ga. App. 587 (2002). In a decision by Mikell, the panel relied on Russaw v. Martin, 221 Ga. App. 683 (1996), in which the appeals court held that a plaintiff must prove actual exposure in order to recover for the fear of being exposed to HIV and/or the AIDS virus. The panel added that in McAllister v. American National Red Cross, 240 Ga. 246 (1977), the Georgia Supreme Court exempted blood banks from strict liability. In their petition for certiorari, Brittain and Bird argued that the appeals court ruling gave “blood banks a carte blanche license to commit reckless or even intentional acts and yet not be held responsible for those acts.” They added that the appeals court had extended the Russaw decision and asked the justices to reject the appeals court ruling and Russaw itself, arguing that blood banks should not be completely immunized from potential liability. They compared the fear Mantooth felt to that of someone who was tortured by playing “Russian roulette” or who was exposed to aerosolized anthrax. The McAllister decision was inapplicable, they added, because it dealt with product liability, not negligence. Representing the Red Cross, Jeffrey C. Baxter of Nelson Mullins Riley & Scarborough responded that if Mantooth’s estate were able to get a trial simply because certain strains of the HIV virus remain undetectable by current tests, “then there would be no limits on blood-bank liability.” The lawyers explained that the Red Cross mistake occurred when the donor wrote on a form that he had lived in Africa from 1992 until 1993. An employee should have followed up the question by determining whether the donor spent more than 12 months there. When the donor tried to donate again, the fact that he had lived there for 13 months was revealed and the donor’s blood was tracked to Mantooth. Baxter argued that the appeals court properly applied Russaw because in both Russaw and the current case, there was no evidence that either plaintiff was truly exposed to HIV. That the Group O strain was undetectable by current testing did not mean doctors could not deduce whether Mantooth, in fact, had the disease, the lawyers added, pointing out that no evidence showed the donor or Mantooth had symptoms of HIV or AIDS. The Georgia Supreme Court voted 5-2 to hear the case, with Chief Justice Norman S. Fletcher and Justice Robert Benham voting to let the appeals court decision stand. On Monday the court was unanimous in upholding the appeals court’s decision in favor of the Red Cross. Writing for the court, Justice P. Harris Hines noted that “the facts are that there was no evidence whatsoever that the donor was infected with any form of HIV.” “In the face of this complete absence of exposure, Mantooth feared that she was infected with the virus,” Hines added. “However, the evidence compels a finding that Mantooth’s fears were unreasonable as a matter of law.” Johnson v. American National Red Cross, No. S02G0871 (Sup. Ct. Ga. Feb. 24, 2003). Brittain, the plaintiff’s lawyer, declined to comment because he had not read the decision. Baxter, who represented the Red Cross, said the decision was written “exactly the way we would have wanted it.”

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