SUBJECT:

Salmon Daniels,

Petitioner,

The Inspector General

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary Affirmance of the I.G.'s determination to exclude the Petitioner herein, Salmon Daniels, M.D., from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years. The I.G.'s Motion and determination to exclude Petitioner are based on the terms of section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(a)(1). The facts in this case mandate the imposition of a five-year exclusion, and for that reason I grant the I.G.'s Motion for Summary Affirmance.

I. Procedural Background

Salmon Daniels, Petitioner, was first licensed to practice medicine in the State of California in 1980. On March 16, 2001, Dr. Daniels was interviewed by California law enforcement officers in connection with his operation of a clinic located on Gower Street in Los Angeles. The information he provided in his statement led on June 30, 2003 to the filing of a misdemeanor complaint charging him with a single violation of CAL. BUS. & PROF. CODE � 2314, by aiding and abetting the unlicensed practice of medicine.

Petitioner appeared with counsel in the Superior Court of California, County of Los Angeles, on July 29, 2003, and pleaded nolo contendere to the criminal complaint. On January 30, 2004, Petitioner was sentenced to a term of 36 months' probation and was ordered to perform 480 hours of community service, to make restitution of $56,000.00 to the California Medi-Cal program, to pay the state $15,000.00 toward the cost of its investigation, and to pay other minor costs and fees. Petitioner sought and was granted early termination of his probation on or about August 22, 2004.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. � 1320a-7(a), the I.G. began the process of excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Section 1128(a)(1) of the Act mandates the exclusion, for a period of not less than five years, of "[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under . . . any State health care program." On April 29, 2005, the I.G. notified Petitioner that he was to be excluded pursuant to the terms of section 1128(a)(1) of the Act for the mandatory minimum period of five years.

Acting through counsel, Petitioner timely sought review of the I.G.'s action by letter dated May 13, 2005. I convened a telephonic prehearing conference on August 3, 2005, pursuant to 42 C.F.R. � 1005.6, in order to discuss the issues presented by the case with both parties, and to explore with them the procedures best suited for addressing those issues. The parties agreed that the case likely could be decided on written submissions, and I established a schedule for the submission of documents and briefs. All briefing is now complete.

The evidentiary record on which I decide the issues before me consists of six exhibits. The I.G. and Petitioner jointly proffered five exhibits marked I.G. Exhibits 1-5 (I.G. Exs. 1-5). They are admitted as designated. Petitioner attached to his Response Brief a five-page "Declaration of Salmon Daniels, MD" which contains numerous assertions of fact. To ensure that the record is orderly and complete, the "Declaration" is admitted with the designation Petitioner's Exhibit 1 (P. Ex. 1).

II. Issues

The legal issues before me are limited to those enumerated at 42 C.F.R. � 1001.2007(a)(1). In the specific context of this record they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(1) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

The controlling authorities require that both issues be resolved in favor of the I.G.'s position. Section 1128(a)(1) of the Act mandates Petitioner's exclusion, for his predicate conviction has been established. A five-year period of exclusion is reasonable as a matter of law, since it is the minimum period established by section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B).

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), requires the mandatory exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any "individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Title XVIII or under any State health care program." The terms of section 1128(a)(1) are restated in regulatory language at 42 C.F.R. � 1001.101(a). This statutory provision makes no distinction between felony convictions and misdemeanor convictions as predicates for mandatory exclusion.

The Act defines "conviction" as including those circumstances "when a judgment of conviction has been entered against the individual . . . by a . . . State . . . court, regardless of whether . . . the judgment of conviction or other record relating to criminal conduct has been expunged," section 1128(i)(1) of the Act; "when there has been a finding of guilt against the individual . . . by a . . . State . . . court," section 1128(i)(2) of the Act; "when a plea of guilty or nolo contendere by the individual . . . has been accepted by a . . . State . . . court," section 1128(i)(3) of the Act; or "when the individual . . . has entered into participation in a . . . deferred adjudication . . . program where judgment of conviction has been withheld," section 1128(i)(4) of the Act, 42 U.S.C. �� 1320a-7(i)(1)-(4). These definitions are repeated at 42 C.F.R. � 1001.2.

An exclusion based in section 1128(a)(1) is mandatory and the I.G. must impose it for a minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B). The regulatory language of 42 C.F.R. � 1001.102(a) affirms the statutory provision. Although the minimum mandatory period of exclusion is subject to enhancement in some limited circumstances and on proof of carefully-defined aggravating factors set out at 42 C.F.R. � 1001.102(b), in this case, the I.G. has not sought to enhance the five-year mandatory minimum period by offering to prove any of them. For that reason, I may not inquire into the existence, importance, or effect of any of the specific aggravating or mitigating factors set out at 42 C.F.R. � 1001.102(b) and (c).

Pursuant to section 1128(f) of the Act, an individual or entity subject to exclusion has a right to reasonable notice and an opportunity for a hearing. The right to hearing before an Administrative Law Judge (ALJ) is accorded to a sanctioned party by 42 C.F.R. � 1005.2 and the rights of both the sanctioned party and the I.G. to participate in a hearing are specified in 42 C.F.R. � 1005.3. Either or both parties may waive appearance at an oral hearing and submit only documentary evidence and written argument for the ALJ's consideration. 42 C.F.R. � 1005.6(b)(5). The ALJ may also resolve a case, in whole or in part, by summary judgment or summary affirmance. 42 C.F.R. � 1005.4(b)(12). Summary affirmance is appropriate and no hearing is required when either there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts, or when the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary affirmance must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., FED. R. CIV. P. 56; Garden City Medical Clinic, DAB No. 1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997) (in-person hearing required where non-movant shows there are material facts in dispute that require testimony); Thelma Walley, DAB No. 1367 (1992); see also, New Millennium CMHC, DAB CR672 (2000); New Life Plus Center, DAB CR700 (2000).

The standard of proof in this case is a preponderance of the evidence. Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. �1005.15(b) and (c)

IV. Findings and Conclusions

I find and conclude as follows:

1. On his plea of nolo contendere on July 29, 2003, in the Superior Court of California, County of Los Angeles, Petitioner Salmon Daniels was found guilty of the misdemeanor offense of aiding and abetting the unlicensed practice of medicine, in violation of CAL. BUS. & PROF. CODE � 2314. I.G. Exs. 2, 3.

2. Final judgment of conviction was entered against Petitioner, and sentence was imposed upon him, in the Superior Court on January 30, 2004. I.G. Ex. 3.

3. The plea, finding of guilt, judgment of conviction, and sentence described above constitute a "conviction" within the meaning of sections 1128(a)(1) and 1128(i)(1), (2), and (3) of the Act, and 42 C.F.R. � 1001.2.

4. A nexus and a common-sense connection exist between the criminal offense to which Petitioner pleaded guilty and of which he was found guilty, as noted above in Findings 1 and 2, and on which plea and finding of guilty the final judgment of conviction was entered and sentence imposed, as noted in Finding 3, and the delivery of an item or service under a State health care program. I.G. Exs. 1, 2, and 3; P. Ex. 1; Berton Siegel, D.O., DAB No. 1467 (1994).

5. By reason of Petitioner's conviction, a mandatory basis exists for the I.G.'s exercise of authority, pursuant to section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs.

6. By reason of his conviction, Petitioner was subject to, and the I.G. was required to impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid, and all other federal health care programs. Section 1128(c)(3)(B) of the Act; 42 C.F.R. � 1001.102(a).

7. On April 29, 2005, the I.G. notified Petitioner that he was to be excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years, based on the authority set out in section 1128(a)(1) of the Act.

8. On May 13, 2005, and acting through counsel, Petitioner perfected his appeal from the I.G.'s action by filing a timely hearing request.

9. Because the five-year period of Petitioner's exclusion is the mandatory minimum period provided by law, it is therefore not unreasonable. Section 1128(c)(3)(B) of the Act; 42 C.F.R. �� 1001.102(a) and 1001.2007(a)(2).

10. There are no disputed issues of material fact and summary disposition is therefore appropriate in this matter.

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of the Act are: (1) the individual to be excluded must have been convicted of a criminal offense; and (2) the criminal offense must have been related to the delivery of an item or service under Title XVIII of the Act (Medicare) or any state health care program. Thelma Walley, DAB No. 1367 (1992); Boris Lipovsky, M.D., DAB No. 1363 (1992); Andrew L. Branch, DAB CR1359 (2005); Lyle Kai, R.Ph., DAB CR1262 (2004) rev'd on other grounds, DAB No. 1979 (2005). Those two essential elements are fully established in the record before me.

Petitioner does not deny here that he has been convicted. The fact of his conviction is clear: I.G. Exs. 2 and 3 show that on July 29, 2003, Petitioner appeared in the Superior Court of California, County of Los Angeles, with counsel. The appearance was in response to a one-count misdemeanor complaint filed against him a month earlier, charging violation of CAL. BUS. & PROF. CODE � 2314, by aiding and abetting the unlicensed practice of medicine. Petitioner tendered a plea of nolo contendere; the trial court found that a factual basis existed for the plea, accepted the plea, and found Petitioner guilty. Final judgment of conviction was entered against Petitioner and sentence was imposed upon him in the Superior Court on January 30, 2004. Those events satisfy the definitions of "conviction" set out at sections 1128(i)(1), 1128(i)(2), and 1128(i)(3) of the Act. The I.G. has proven the first essential element.

The relation of the offense for which Petitioner was convicted to the delivery of an item or service under the California state health care program called Medi-Cal is also uncontested by Petitioner here. P. Br. at 4-5. Even before his conviction, Petitioner had provided a detailed narrative statement of the events that resulted in that conviction. I.G. Ex. 1. That statement was given to agents of California's Bureau of Medi-Cal Fraud and Elder Abuse, one of whom signed the Superior Court complaint, and was given at Petitioner's office and in the presence of the attorney who represented Petitioner at that time. I.G. Ex. 1, at 1. In it, Petitioner explained the practice in his clinic which became the basis of the criminal charges. Although that statement is not part of the official court record of Petitioner's conviction, I find it both reliable and credible for purposes of showing the underlying facts of Petitioner's conduct. Narendra M. Patel, M.D., DAB No. 1736 (2000); Gerald A. Goff, DAB CR1123 (2003).

Stated in its essentials, the practice involved Petitioner's permitting unlicensed and non-professional staff at the clinic to provide health care services to the clinic's patients without his supervision. To be sure, Petitioner's statement did not identify specific items or services provided to specific Medicare or Medi-Cal patients, or specific billings to either program for those items or services, but Petitioner concedes that Medi-Cal patients and services were involved, and that the clinic's practice "created a situation that facilitated abuse of the Medi-Cal program." P. Ex. 1, at 4. His statement admitted receiving approximately $200,000.00 in Medi-Cal payments for the clinic's operations, but neither the specific time of these payments nor the specific items or services for which they were made appeared in the statement or elsewhere. I.G. Ex. 1. There is no mention in the Superior Court records before me of any specific item or service delivered or billed to Medi-Cal, but it is significant that part of Petitioner's sentence required that he pay $56,000.00 in restitution to that program. Thus, while not linking Petitioner's conviction to the Medi-Cal program with perfect clarity and an abundance of detail, the evidence before me is sufficient to establish the requisite nexus and common-sense connection between the conviction and the Medi-Cal program. Andrew Anello, DAB No. 1803 (2001); Neil R. Hirsch, M.D., DAB No. 1550 (1995); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Berton Siegel, D.O., DAB No. 1467 (1994). The I.G. has proven the second essential element.

As I have observed above, Petitioner denies neither the material facts of his conviction as set out above nor their relationship to the delivery of health care items and services to the Medi-Cal program. Putting those concessions aside, however, the evidence before me independently satisfies the two elements essential to the application of section 1128(a)(1) of the Act. A predicate conviction within the purview of section 1128(a)(1) of the Act has been demonstrated, and the consequent application of the section's exclusion is mandatory. Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002); Lorna Fay Gardner, DAB No. 1733 (2000).

Petitioner's concession of the material facts does not mean, however, that he accepts the outcome proposed by the I.G. It may be best to let Petitioner speak for himself:

It is submitted that exclusion from the Medicare program would be too harsh a penalty, given the circumstances of the case. In addition, exclusion would actually result in harm to the public interest, as shown by the enclosed patient support letters. Finally, the length of the exclusion is unwarranted, again in light of the considerable mitigating evidence discussed above.

P. Br. at 6.

Petitioner's briefing and several of the exhibits portray him as having been cooperative with investigators and as being a respected and valued member of his community. I have no reason to believe otherwise and no wish to minimize the importance of those facts in general. But unless the I.G. proposes to enhance the period of exclusion beyond the mandatory minimum period, I may not consider such matters at all in assessing the reasonableness of the five-year period. 42 C.F.R. � 1001.102(c). Emma Voloshin, M.D., DAB CR1179 (2004); Diane C. Turner, M.D., DAB CR1176 (2004); Carl Jeffrey Boyette, DAB CR1165 (2004); Karl Eric Swanson, M.D., DAB CR1002 (2003); Diane Amicucci, L.P.N., DAB CR540 (1998); Robert L. Howard, DAB CR459 (1997); Charles Addo Yobo, M.D., DAB CR361 (1995); Doina M. Buzea, M.D., DAB CR310 (1994). In cases where the I.G. proposes an enhanced period of exclusion, I am authorized to consider some factors that might mitigate the length of the period, but my consideration is strictly limited to only those factors enumerated at 42 C.F.R. � 1001.102(c). Most, and perhaps all, of the matters mentioned by Petitioner are simply outside that enumeration. Since the five-year period of exclusion proposed in this case is the irreducible minimum required by section 1128(c)(3)(B) of the Act, it is as a matter of law not unreasonable. 42 C.F.R. � 1001.2007(a)(2). Neither the Departmental Appeals Board nor I may reduce it. Mark K. Mileski, DAB No. 1945; Salvacion Lee, M.D., DAB No. 1850.

VI. Conclusion

For the reasons set out above, the I.G.'s Motion for Summary Affirmance should be, and it is, GRANTED. The I.G.'s exclusion of Petitioner Salmon Daniels, M.D., from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), is thereby sustained.

Richard J. Smith

Administrative Law Judge