## Facts

- West Volusia Hospital Authority (WVHA), a Florida municipal hospital authority operating two hospitals, participated in Medicare and received approximately $10–$15 million in Medicare funds in 1993.
- Jeffrey Allan Fischer, president and part owner of Quality Medical Consultants, Inc. (QMC), negotiated a $1.2 million loan from WVHA to QMC.
- An audit of WVHA raised concerns about the loan transaction, prompting a federal criminal investigation.
- Fischer was indicted and convicted under 18 U.S.C. § 666 for (1) defrauding an organization receiving federal program funds and (2) paying a kickback to an agent of that organization.
- On appeal, Fischer argued that Medicare payments to WVHA were mere reimbursements and not “benefits” under § 666(b), so the statute’s federal-funds threshold was not met.
- The Eleventh Circuit affirmed, concluding Medicare funds to participating providers qualify as “benefits.”
- The Supreme Court granted review to decide whether Medicare payments to health care providers are “benefits” within § 666(b).

## Issues

1. Whether Medicare payments made to a participating health care provider constitute “benefits” under a federal program for purposes of 18 U.S.C. § 666(b).
2. Whether WVHA’s receipt of Medicare funds exceeding $10,000 in a one-year period satisfied § 666(b)’s jurisdictional requirement, supporting Fischer’s convictions under § 666(a).

## Decision

- The Supreme Court affirmed in a 7–2 decision (Justice Kennedy).
- Medicare payments to providers can qualify as “benefits” under § 666(b) when the provider receives more than $10,000 in such funds in a one-year period.
- The Court reasoned that Medicare is a federally funded program conditioned on extensive participation requirements, and its payment structure serves program objectives beyond compensating isolated transactions.
- The Court rejected the claim that only patients are Medicare beneficiaries; a federal program may have multiple beneficiaries, including participating institutions.
- Justice Thomas, joined by Justice Scalia, dissented, viewing Medicare payments as compensation for services (like private-insurance reimbursement) rather than institutional financial assistance.

## Legal Principles

- 18 U.S.C. § 666(b) applies when an organization receives, in any one-year period, more than $10,000 in “benefits” under a federal program involving federal assistance.
- Receipt of federal funds does not automatically make an organization a program beneficiary; whether funds are “benefits” depends on the structure and operation of the program and the organization’s role within it.
- Medicare payments to participating providers may constitute “benefits” because the program functions as federal assistance tied to conditions and standards intended to support ongoing institutional capacity and quality of care.
- Congress enacted § 666 broadly to protect the integrity of federal assistance programs by criminalizing significant fraud and bribery affecting recipient organizations.

## Conclusion

The Court held that Medicare payments to participating hospitals can be “benefits” under 18 U.S.C. § 666(b), so WVHA’s receipt of more than $10,000 in Medicare funds satisfied the statute’s jurisdictional threshold and supported Fischer’s § 666 convictions.


Fischer v. United States, 529 U.S. 667 (2000)