Third Circuit Ruling Highlights Burden With Statistical Sampling – Healthcare

Legal proceedings questioning the medical judgment of a
healthcare provider generally entail the production and review of
voluminous amounts of data, such as medical and billing records.
Government agencies and/or prosecutors often extrapolate the total
incidence of alleged misconduct based on a smaller data set.

For example, prosecutors often use statistical sampling and
extrapolation in matters involving unlawful prescriptions. In these
cases, the Third Circuit permits prosecutors to extrapolate for
such purposes, but “the government must show, and the court
must find, that there is an adequate basis in fact for the
extrapolation and that the quantity was determined in a manner
consistent with accepted standards of reliability.”
United States v. McCutchen, 992 F.2d 22, 25-26 (3d
Cir. 1993).

A recent decision by the United States Court of Appeals for the
Third Circuit demonstrates the high threshold prosecutors must
satisfy to demonstrate that their expert’s extrapolation was
consistent with accepted standards of reliability. In
United States v. Patrick Titus, the United States
Department of Justice (“DOJ”) sought to extrapolate the
total converted drug weight (“TCDW”) of illegal
prescriptions issued by the physician-defendant, Patrick Titus
(“Titus”). Titus had been convicted of thirteen counts of
unlawfully dispensing and distributing controlled substances and
one count of maintaining drug-involved premises. The calculation of
the TCDW of Titus’s illegal prescriptions was required at
sentencing to determine the length of his incarceration. The United
States District Court for the District of New Jersey accepted the
DOJ’s extrapolation of 30,000 kilos, sentencing Titus to 240
months of imprisonment. Titus filed an appeal, challenging the
DOJ’s extrapolation and his conviction.

The Third Circuit found that the DOJ’s use of extrapolation
had not been performed in a manner consistent with accepted
standards of reliability. The Third Circuit held that it was an
error for the District Court to rely on the DOJ’s medical
expert even though the District Court acknowledged that the medical
expert’s sample size was not “statistically valid.”
United States v. Titus, 2023 U.S. App. LEXIS
22009, *7. Moreover, the Third Circuit found that the District
Court had based its decision on an extrapolation it deemed invalid
“without much explanation and without giving Titus [a] chance
to ‘respond meaningfully, or for that matter, at
all’.” Id.

The Third Circuit further highlighted that the DOJ had (1)
“never showed that [its] sample was large enough to be
reliably representative of the remaining thousands of
prescriptions”; (2) failed to document proper extrapolation
methods; and (3) “never explained how extrapolating from [its]
sample could prove the huge [TCDW] by a preponderance of the
evidence.” Id. At *7-8. The Third Circuit
concluded that “[t]he government may not use a small sample
size to justify a much larger criminal punishment without
explaining how that evidence satisfies its burden of proof…[and]
[a]t a minimum, any extrapolation must be shown to be reliable, and
defendants must have a fair chance to challenge its
reliability.” Id. at *12.

As stated succinctly by the Third Circuit, “[t]hough the
prosecution bears a heavy burden of proof, [the Court] will not let
it cut corners.” Titus, 2023 U.S. App. LEXIS
22009 at *1.

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