McMahon told Rufe he met with Gosnell in prison for four hours, ending at 8 p.m. Tuesday, reviewing the plea offer.
"I thought he would [plead guilty] today, but he said no," McMahon said.
Afterward, McMahon said he did not know the reason for Gosnell's decision.
Although Gosnell could still plead guilty, it would not be on the terms he rejected. Assistant U.S. Attorney Joan E. Burnes formally withdrew that offer.
Burnes said the proposed plea agreement would have had Gosnell plead guilty to all 23 charges in an indictment filed in April. In return, Burnes said, Gosnell would have served the mandatory minimum sentence of 20 years in prison. Rufe would later determine a fine based on the amount of prescriptions - likely in the millions of dollars.
Gosnell sat in court for almost 30 minutes, guarded by U.S. marshals, when his decision to plead not guilty resulted in an in-chambers conference between judge and lawyers.
Dressed in an olive-green prison jumpsuit, Gosnell quietly read over his meticulous notes written on graph paper and then compulsively stacked and aligned the documents before him on the table.
Rufe asked him a series of questions to determine if he understood what he was doing. No, Gosnell answered, he had never been addicted to drugs or alcohol. No, he said, he had never been treated for mental illness.
"And how do you feel physically, mentally, and emotionally today?" asked Rufe.
"I feel well, physically, and emotionally, today," Gosnell replied in his mellifluous baritone.
The onetime triathlete told Rufe his only medication was ibuprofen for arthritis pain.
It was a Feb. 18, 2010, drug raid on Gosnell's Women's Medical Society clinic at 3801 Lancaster Ave. that resulted in the discovery of more than 45 frozen fetal remains. That discovery triggered a Philadelphia grand jury probe that ended with murder charges against Gosnell and four employees and illegal abortion counts against five others.
Among those charged in the state court trial was Pearl Gosnell, 52, Gosnell's third wife, who pleaded guilty to participating in illegal late-term abortions. Coincidentally, Pearl Gosnell reported to Common Pleas Court on Wednesday morning to begin her 7- to 23-month prison term.
The federal charges against Gosnell involved the sale of almost a million pills containing the narcotic painkiller oxycodone and the generic version of the antianxiety drug Xanax.
Those two drugs and scripts for more than 19,000 ounces of codeine-based cough syrup - all coveted by addicts - were allegedly sold for cash out of the clinic from 2008 through January 2010 under cover of what Gosnell called his "pain management practice."
Gosnell was indicted by a federal grand jury with three former employees, and the U.S. Attorney's Office separately charged four other Gosnell workers.
All the federal defendants but Gosnell pleaded guilty. None have been sentenced in case their testimony is needed in Gosnell's trial.
According to the indictment, Gosnell began selling prescriptions in 2008, writing several hundred bogus prescriptions a month. By January 2010, he was writing more than 2,300 scripts a month and was Pennsylvania's third-largest prescriber of oxycodone.
In a related development, the Philadelphia office of the U.S. Drug Enforcement Administration on Wednesday announced creation of "Tip411," an anonymous cellphone texting tip line to report prescription-drug trafficking.
DEA officials said citizens can enter Tip411  in the "To" field, and the keyword RXTIP followed by the information in the text field. All information is anonymous because the technology removes the sender's telephone number and identifying information before the tip reaches the DEA.
Contact Joseph A. Slobodzian at 215-854-2985, email@example.com, or @joeslobo on Twitter.