This case is before me pursuant to a request for hearing filed on August 26, 2005 by Lester Eisenberg, Petitioner.

By letter dated June 30, 2005, the Inspector General (I.G.) notified Petitioner, Lester Eisenberg, that he was being excluded from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a period of 5 years. The I.G. informed Petitioner that his exclusion was imposed under section 1128(a)(1) of the Act, due to his conviction of a criminal offense (as defined in section 1128(i) of the Act) related to the delivery of an item or service under the Medicaid program.

On October 31, 2005, I convened a telephone prehearing conference during which the parties agreed that an in-person hearing was not required and that the issues could be decided based on written memoranda and documentary evidence. Consequently, I issued an Order establishing briefing deadlines. Pursuant to that Order, on November 30, 2005, the I.G. filed a brief (I.G. Br.), accompanied by three proposed exhibits. On December 30, 2005, Petitioner submitted a brief in support of his contentions (P. Br.), with one proposed exhibit containing 16 pages. On January 17, 2006, the I.G. filed a reply brief (I.G. Reply). Neither party objected to the exhibits submitted. I admit into evidence I.G. Exhibits (I.G. Exs.) 1-3 and Petitioner's Exhibit (P. Ex.) 1.

It is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in the Medicare, Medicaid, and all federal health care programs, for a period of five years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. It is my finding that Petitioner was convicted of a criminal offense related to the delivery of an item or service under a state health care program.

ISSUES

APPLICABLE LAW AND REGULATIONS

Section 1128(a)(1) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual convicted of a criminal offense relating to the delivery of a health care item or service under Title XVIII of the Act (Medicare) or a state health care program (Medicaid).

An exclusion under section 1128(a)(1) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B).

Pursuant to 42 C.F.R. � 1001.2007, an individual or entity excluded under section 1128(a)(1) of the Act may file a request for a hearing before an administrative law judge.

The findings of fact and conclusions of law noted below, in bold face, are followed by a discussion of each finding.

I.G. Ex. 2, at 9, 10. Petitioner entered a plea of guilty to the misdemeanor information. Id. at 10-11. Petitioner was convicted, pursuant to his plea, and sentenced to conditional discharge and required to pay a court surcharge. I.G. Ex. 3.

Petitioner's guilty plea and the judgment of conviction entered by the Southold Town Justice Court meet the definition of conviction under sections 1128(i)(1) and (3) of the Act. Therefore, I find that Petitioner was convicted of a criminal offense under sections 1128(i)(1) and (3) of the Act.

Petitioner admits that he engaged in criminal diversion in the fourth degree when he knowingly received, in exchange for items of pecuniary value, a prescription medication with reasonable knowledge and reasonable grounds to know that the seller and transferor was not authorized by law to sell and transfer the prescription. P. Br. at 7. Petitioner further maintains that the crime was complete when he received the medication from an unauthorized source, and that the delivery of items under a state health care program is not an element of the crime. Id. In addition, Petitioner argues that his conviction is not related to the delivery of items or services under Medicaid because there is no evidence that the program was billed for any samples that might have been sold to recipients. P. Br. at 8. For these reasons, he argues that he is not subject to a mandatory exclusion pursuant to section 1128(a)(1). I find no merit in these arguments.

While the mandatory exclusion provisions of the Act plainly apply to individuals convicted of offenses in which the illegal delivery of an item or service under Title XVIII or under any state health care program is an element of the crime, the provisions also apply to a much broader set of offenses. The statute requires only that the individual be convicted of an offense that is "related to the delivery" of items or services under such a program. Act, section 1128(a)(1). The Departmental Appeals Board (Board) has held that an offense is related to the delivery of a health care item or service under Medicaid if a "common sense connection" between the two exist. In fact, the Board has stated that:

Clearly, when Petitioner, working for a provider of pharmaceutical services under the New York Medicaid program, obtained prescription medication from an illegal source, he engaged in criminal conduct that was "related" to the delivery of a health care item or service pursuant to the Act. Petitioner argues that any connection between his conviction and the Medicaid program is "sheer speculation." P. Br. at 10. It is not speculation, however, but his own admission that establishes the connection. As part of his plea allocution, he admitted that he added the illegally-obtained medication to his inventory and, contrary to federal and state law and regulations, sold it to members of the general public, including Medicaid recipients. I.G. Ex. 2, at 10. It is beyond question that such conduct relates directly to the delivery of Medicaid items and services. Nor is the I.G. required to produce evidence that the New York State Medicaid program was actually billed for the items that Petitioner admittedly dispensed to beneficiaries of that program in order to establish the requisite connection.

Consequently, the remedial purpose of the Act is served in the case at hand by the I.G.'s exclusion of someone who is demonstrably untrustworthy.