The average American likely commits three felonies a day, according to attorney Harvey Silverglate. While the overcriminalization phenomenon is nothing new, even the government itself is now becoming ensnared by the tangled criminal code. A recent case out of the Tenth Circuit, Caring Hearts Home Services, Inc. v. Burwell, exposes a government agency that did not know its own regulations.
Caring Hearts is a home health care service providing physical therapy and skilled nursing services to homebound Medicare patients. The Centers for Medicare & Medicaid Services (CMS) claimed that Caring Hearts had provided services to numerous patients who did not qualify as homebound—or had provided services that were not “reasonable and necessary”—and sought repayment for over $800,000 in Medicare payments that Caring Hearts had received.
But instead of applying the 2008 version of its regulations (which were in effect at the time), CMS applied a more stringent version of regulations it had adopted several years later. Under the older, correct version of the regulations, it appears that Caring Hearts was properly entitled to the Medicare payments for the services it had provided, but under the newer regulations it was not entitled to such payments. Caring Hearts, in essence, was expected to adhere to a version of regulations that didn’t exist at the time it was providing the services in question.
In a biting opinion, Judge Neil Gorsuch, writing for a unanimous court, ruled in favor of Caring Hearts. As the court wryly put it, “this isn’t (and never was) a case about willful Medicare fraud [but rather] it’s a case about an agency struggling to keep up with the furious pace of its own rulemaking.” Perhaps most alarming of all was the court’s revelation that CMS’s briefing in the case also “struggle[d] to keep up with the right regulations, repeatedly citing and quoting and relying the 2010 provisions” rather than the proper 2008 regulations
The court based its holding on a provision in the Medicare statute which states that medical providers who did not know, and could not have reasonably been expected to know, that their services weren’t permissible when rendered do not have to repay the amounts they received from CMS. (The court declined to consider other arguments against CMS’s action for repayment because they were not presented to the court and because the statutory argument sufficed to prevent the repayment).
Despite the relatively narrow statutory holding, the import of the case was not lost on the Tenth Circuit. Judge Gorsuch’s opinion highlighted the due process and fair notice concerns that occur when Congress delegates ever-greater swaths of lawmaking power to administrative agencies, which in turn promulgate an ever-expanding array of laws and regulations.
The proliferation of crimes—especially at the federal level—is jaw-dropping. Although efforts to count all the existing federal crimes on the books have failed, estimates put the number at over 3,000, and this does not count regulatory crimes (which could push the number to 300,000 or more). According to the court in Caring Hearts, CMS itself “issues literally thousands of new or revised guidance documents (not pages) every single year,” and that “about 37,000 separate guidance documents can be found on CMS’s website.” With so many laws, it’s difficult for well-meaning individuals and businesses to comply, especially when they often have no idea certain regulations even exist.
Although “ignorance of the law is no excuse” is an oft-repeated maxim in the legal world, courts have long recognized the concept of fair notice as a key feature of due process. As the Supreme Court put it in McBoyle v. United States, 283 U.S. 25, 27 (1931), “a fair warning . . . should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed.” In other words, people have to actually know what the law is in order to be able to obey it.
Fair notice is particularly important when it comes to regulatory crimes that go beyond the traditional contours of criminal law. Nearly everyone understands that malum in se (“wrong in itself”) crimes such as murder and rape are illegal, but regulatory crimes are often malum prohibita (“wrong because prohibited”), meaning that the action they target is only illegal because the government says it is. While we have long since passed the point where any one citizen can be expected to know all the laws on the books—especially regulatory ones—most Americans undoubtedly assume that the government is at least aware of the laws it is entrusted to enforce.
To underscore these points, Judge Gorsuch’s opinion in Caring Hearts invoked James Madison’s admonition in The Federalist No. 62 about uncertainty under the law:
It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood … or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be tomorrow.
Judge Gorsuch recognized, however, that the situation in Caring Hearts actually exceeded Madison’s worst fears:
But what if the problem is even worse than that? What happens if we reach the point where even [government agencies] don’t know what their own ‘law’ is? That’s the problem we confront in this case.
As the court noted, it is “a strange world” we have entered when “the government itself—the very ‘expert’ agency responsible for promulgating the ‘law’ no less—seems unable to keep pace with its own frenetic lawmaking.” In addition to a strange world, it’s also a scary one. A government that cannot keep track of its own laws cannot be trusted to faithfully and even-handedly execute those laws. The rule of law is undermined when government officials and agencies can no longer comprehend their own regulations and apply them in the appropriate circumstances. And average citizens cannot possibly be expected to have fair notice of the law when even the government itself does not know the law.
It’s nearly impossible to gauge the extent of this problem given that both the number of federal crimes as well as the number of federal agencies have proven to be literally uncountable. Unfortunately, it often takes a court case like Caring Hearts to expose situations where agencies misapply or are unaware of their own regulations. What is clear, however, is that the pace of new regulations is increasing, which means that more and more government agencies may find themselves in the same position as CMS—losing track of their own regulations and wrongly applying them to innocent individuals and businesses.
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C. Jarrett Dieterle is an attorney and policy writer in the Washington, D.C. area.