Background
Gustavo Kinrys, a Massachusetts psychiatrist, defrauded private and public health insurers between 2015 and 2018. Among other conduct, he billed for more than 1,000 sessions while either he or the purported patient was outside the country, delayed insurers’ requests for records by directing them to a fictitious office manager, and created false treatment records. A jury convicted him on fourteen of fifteen counts arising from the scheme.
At sentencing, the district court treated the roughly $19 million face value of Kinrys’s fraudulent bills as the intended loss, resulting in a twenty-level guidelines enhancement. It sentenced him to ninety-nine months’ imprisonment on the first seven counts and concurrent sixty-month terms on the remaining counts. The court also ordered $6,537,309.59 in restitution and $6,527,391.19 in criminal forfeiture. Kinrys appealed the intended-loss and restitution calculations.
The Court’s Holding
The First Circuit affirmed the intended-loss calculation. When a scheme is rife with fraud, the billed amount may serve as prima facie evidence of intended loss, subject to the defendant’s opportunity to show that he intended to obtain less. Although Kinrys’s in-network contracts supported his argument that he expected only the insurers’ negotiated reimbursement rates, the district court did not clearly err in finding that he intended to obtain as much as possible, up to the billed amounts. Kinrys had filed civil suits seeking billed charges, sometimes received and retained full billed amounts exceeding contract rates, and offered no contrary evidence at sentencing beyond counsel’s argument.
The court also affirmed the restitution award. Kinrys sought to offset the approximately $6.5 million award with separate claims for allegedly legitimate services for which insurers had not paid him. Because those claims were distinct from the fraudulent claims underlying restitution and remained contested—including questions about preauthorization and requested billing records—the criminal restitution proceeding was not the proper forum to resolve them. Kinrys could pursue any entitlement to payment through civil or administrative channels.
Key Takeaways
- In a fraud-rife billing scheme, the face value of submitted bills may constitute prima facie evidence of intended loss, while the government retains the ultimate burden of supporting the enhancement.
- An in-network provider’s negotiated reimbursement rates may support a lower intended-loss figure, but they do not compel it when other evidence supports an intent to collect up to the full billed amounts.
- A defendant may not use a criminal restitution hearing to litigate separate, contested claims that victims allegedly owe for legitimate services.
Why It Matters
The decision shows that intended loss remains a fact-specific inquiry into the defendant’s subjective aim. Contract reimbursement rates can be relevant in health-insurance-fraud cases, but defendants seeking a reduction from billed amounts must present evidence that meaningfully rebuts the inference that they intended to collect everything billed.
It also limits restitution offsets to losses and credits properly connected to the fraudulent transactions before the sentencing court. Separate reimbursement disputes generally belong in civil litigation or an insurer’s administrative process.