DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Jack W. Greene,
Petitioner,
- v. -
The Inspector General
DATE: January 31, 1989
Docket No. C-56
DECISION OF ADMINISTRATIVE LAW JUDGE
ON MOTIONS FOR SUMMARY DISPOSITION
Petitioner requested a hearing, protesting the Inspector General's (the I.G.)
determination to exclude him
from participating in the Medicare program, and to direct that he be excluded
from participating in State
health care programs, for five years. Both parties filed motions for summary
disposition of this case. I
have considered the supporting memoranda of both parties and their stipulations.
Based on the undisputed
facts, the law, and applicable regulations, I conclude that the exclusions imposed
and directed by the I.G.
are mandatory. There remain no questions to be addressed at a hearing whose
answers could affect the
outcome of this case. Therefore, I am deciding this case in favor of the I.G.
BACKGROUND
On June 24, 1988, the I.G. sent notice to Petitioner, advising him that he
was being excluded from
Medicare and any State health care programs for a period of five years. Petitioner
was advised that his
exclusions were due to his conviction of a criminal offense related to the delivery
of an item or service
under the Medicaid program. Petitioner was further advised that the law required
minimum mandatory
exclusions from Medicare and State health care programs, of five years, for
individuals convicted of a
program-related offense. The I.G. told Petitioner that, in consideration of
the circumstances of his case, he
was being excluded for the minimum period required by law.
Petitioner timely requested a hearing as to the exclusions, and the case was
assigned to me for a hearing
and decision. I conducted a prehearing conference on October 26, 1988, at which
both parties expressed
their intent to move for summary disposition in this case. I issued a prehearing
Order on October 28, 1988,
which established a schedule for moving for summary disposition and for responding
to such motions. The
Order also provided for exchanges of documents and for stipulations. It further
provided for oral argument
of motions at the request of either party. The parties filed and responded to
motions and agreed to
stipulations pursuant to my Order. At Petitioner's request, I heard oral argument
by telephone as to the
motions on January 24, 1989.
ISSUES
The issues raised by the parties in their respective motions are whether:
1. The delegation of authority by the Secretary of Health and Human Services
(the Secretary) to
the I.G. to determine and to impose or direct exclusions pursuant to 42 U.S.C.
1320a-7 is unlawful;
2. The Secretary is required to adopt regulations implementing the 1987 revisions
to 42 U.S.C.
1320a-7, before the I.G. may make exclusion determinations pursuant to the law.
3. Given the undisputed material facts, the I.G.'s determination to exclude
Petitioner from
participation in the Medicare program, and to direct that he be excluded from
participation in State health
care programs, for five years, is mandated by law.
APPLICABLE LAWS AND REGULATIONS
1. Section 1128 of the Social Security Act: Section 1128(a)(1) of the Social
Security Act, 42
U.S.C. 1320a-7(a)(1), requires the Secretary to exclude from participation in
the Medicare program, and to
direct exclusion from participation in any State health care programs, any individual
or entity "convicted of
a criminal offense related to the delivery of an item or service" under
Medicare or any State health care
program. Exclusions are also mandated by 42 U.S.C. 1320(a)(2), for "any
individual or entity that has been
convicted . . . of a criminal offense relating to neglect or abuse of patients
in connection with the delivery
of a health care item or service." "Conviction" is defined at
42 U.S.C. 1320a-7(i) to include those
circumstances when: (1) a
judgment of conviction has been entered against a physician or individual, regardless
whether there is an
appeal pending, or the judgment of conviction or other record of criminal conduct
has been expunged; (2)
there has been a finding of guilt against the physician or individual; (3) a
plea of guilty or nolo contendere
by the physician or individual has been accepted; and (4) the physician or individual
has entered into
participation in a first offender or other program where judgment of conviction
has been withheld. The law
provides at 42 U.S.C. 1320a-7(c)(3)(B), that for those excluded under section
1320a-7(a), "the minimum
period of exclusion shall not be less than five years."
The law also provides the Secretary with discretionary authority to exclude
individuals from participation
in Medicare, and to direct their exclusion from participation in State health
care programs, in certain
enumerated circumstances. These include conviction "in connection with
the delivery of a health care item
or service or with respect to any act or omission in a program operated by or
financed in whole or in part
by any Federal, State, or local government agency, of a criminal offense relating
to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct."
42 U.S.C. 1320a-7(b)(1).
The law does not prescribe a minimum period of exclusion in such cases.
The current law was enacted in August 1987, and embodies revisions to preexisting
law. Prior to August
1987, the law provided at 42 U.S.C. 1320a-7(a), that the Secretary must bar
from participation in Medicare,
and direct debarment from participation in State plans approved under title
XIX, any physician or other
individual "convicted . . . of a criminal offense related to such individual's
participation in the delivery of
medical care or services under title XVIII, XIX, or XX . . . ." Unlike
current law, the law did not prescribe
a minimum suspension or exclusion period for such mandatory suspensions. Furthermore,
the law did not
grant the Secretary the discretionary exclusion authority now provided by 42
U.S.C. 1320a-7(b)(1).
Both the pre-1987 law and current law provide that an excluded party may request
a hearing as to the
exclusion. The law presently states, at 42 U.S.C. 1320a-7(f), that an excluded
party is entitled to a hearing
to the same extent as is provided in 42 U.S.C. 405(b). That section provides
that a party entitled to an
administrative hearing by virtue of an adverse decision by the Secretary shall
be given reasonable notice
and opportunity for a hearing before the Secretary "with respect to such
decision."
2. Regulations Governing Suspension, Exclusion, or Termination of Practitioners,
Providers,
Suppliers of Services and Other Individuals: The Secretary delegated to the
I.G. the authority to determine,
impose, and direct exclusions pursuant to section 1128 of the Social Security
Act. 48 Fed. Reg. 21662,
May 13, 1983. Regulations governing suspension and exclusion of individuals
pursuant to section 1128
and this delegation are contained in 42 C.F.R. Part 1001. Section 1001.123(a)
provides that when the I.G.
has conclusive information that an individual has been convicted of a program-related
crime, he shall give
that individual written notice that he is being suspended (excluded) from participation.
Section
1001.125(b) establishes criteria for the I.G. to use in determining the appropriate
length of exclusions, in
those circumstances where the I.G. may exercise discretion. Section 1001.128
provides that an individual
excluded based on conviction of a program-related offense may request a hearing
before an administrative
law judge on the issues of whether: (1) he or she was, in fact, convicted; (2)
the conviction was related to
his or her participation in the delivery of medical care or services under the
Medicare, Medicaid, or social
services program; and (3) whether the length of the exclusion is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a pharmacist who operated a pharmacy in Oliver Springs, Tennessee. Stip. 1.
2. On April 21, 1987, Petitioner was indicted on 18 counts of filing false
reports, statements, or
documents in violation of Tennessee law. Stip. 3; Ex. 7.
3. Petitioner pleaded guilty to one count of the indictment on January 29,
1988. Stip. 4. On
February 3, 1988, a felony judgment was entered against Petitioner. Stip. 5;
Ex. 6.
4. Petitioner was convicted of "unlawfully feloniously and willfully
falsify(ing) a report or
document required by (Tennessee law) by falsely billing the State for having
filled a prescription with a
brand-named medicinal drug(s), . . . when instead the defendant or one of his
agents did dispense a generic
drug of a lesser value, contrary to (Tennessee law), against the peace and dignity
of the State of
Tennessee." Stip. 6; Ex. 7.
5. In the indictment for which Petitioner was convicted, a Medicaid claim
was submitted for
brand name drugs when in fact, Petitioner had filled prescriptions with FDA-approved
generic drugs. The
claims were paid by Medicaid and caused a Medicaid overpayment. Stip. 7.
6. The offense to which Petitioner pleaded guilty is a "criminal offense
related to the delivery of
an item or service" under the Medicaid program. 42 U.S.C. 1320a-7(a)(1).
7. Petitioner's guilty plea is a "conviction" as defined by 42 U.S.C. 1320a-7(i).
8. The minimum mandatory exclusion period for a person excluded based on conviction
of a
criminal offense related to the delivery of an item or service under Medicaid
is five years. 42 U.S.C.
1320a-7(c)(3)(B).
9. The Secretary delegated to the I.G. the duty to exclude from participation
in Medicare, and to
direct the exclusion from participation in State health care programs, of persons
whose exclusion is
required or permitted under 42 U.S.C. 1320a-7. 48 Fed. Reg. 21662, May 13, 1983.
10. I do not have authority to decide whether the Secretary's delegation of
duties to the I.G
pursuant to 42 U.S.C. 1320a-7 is lawful. 42 U.S.C. 1320a-7(f); 42 U.S.C. 405(b);
42 C.F.R. 100l.128.
11. I do not have authority to decide whether the Secretary is required to
adopt regulations
implementing the 1987 revisions to 42 U.S.C. 1320a-7, before the I.G. may make
exclusion determinations
pursuant to the law. 42 U.S.C. 1320a-7(f); 42 U.S.C. 405(b); 42 C.F.R. 1001.128.
12. The I.G. has excluded Petitioner from participation in the Medicare program,
and has directed
that Petitioner be excluded from participation in State health care programs,
for five years. The exclusions
are mandatory and for the minimum period of time required by law. 42 U.S.C.
1320a-7(a)(1); (c)(3)(B).
ANALYSIS
Petitioner pleaded guilty to, and was convicted of, a crime involving claims
he submitted for Medicaid
reimbursement. As a consequence of Petitioner's conviction, the I.G. imposed
on Petitioner a five-year
exclusion from participating in Medicare, and directed that he be excluded from
participating in State
health care programs for five years. Petitioner challenged his exclusions, asserting
that: (1) the Secretary's
delegation of authority to the I.G. to impose and direct exclusions pursuant
to 42 U.S.C. 1320a-7 is
unlawful; (2) his exclusions are contrary to law because the Secretary has not
yet adopted regulations
implementing the 1987 revisions to 42 U.S.C. 1320a-7; and (3) the I.G. improperly
characterized the crime
for which Petitioner was excluded as an offense "related to the delivery
of an item or service" under the
Medicare or State health care programs, and improperly imposed and directed
mandatory five-year
exclusions on Petitioner pursuant to 42 U.S.C. 1320a-7(a)(1). According to Petitioner,
the offense for
which he was convicted should be characterized as an offense for which discretionary
exclusions, rather
than mandatory exclusions, would be appropriate, pursuant to 42 U.S.C. 1320a-7(b)(1).
I have carefully considered the contentions of the parties, their joint exhibits,
and relevant law and
regulations. I conclude that the Secretary's delegation of authority to me to
hear and decide cases
concerning exclusions does not include jurisdiction to decide whether the Secretary's
delegation of
authority to the I.G. was lawful, or whether the Secretary is required to issue
regulations to implement the
1987 revisions to 42 U.S.C. 1320a-7 before the I.G. may make exclusion determinations
pursuant to the
law. I further conclude that the offense for which Petitioner was convicted
is an offense "related to the
delivery of an item or service" under the Medicare and State health care
programs, for which exclusions of
at least five years are mandated by 42 U.S.C. 1320a-7(a)(1).
1. I do not have authority to decide whether the Secretary lawfully delegated
to the I.G. the duty
to impose and direct exclusions pursuant to 42 U.S.C. 1320a-7. Petitioner contends
that the duty to impose
and direct exclusions is a "program operating responsibility" which
is prohibited from transfer to the I.G.
by 42 U.S.C. 3526(a). Therefore, according to Petitioner, "the imposition
of an exclusion upon Petitioner
by the (I.G.) is in violation of Congress' specific prohibition," and this
in turn voids any exclusions
imposed or directed by the I.G. P.'s Memorandum at 26. The I.G. contends that
the duty to exclude and to
direct exclusions is not a "program operating responsibility," asserting
that the legislative history of the
Inspector General statute shows that Congress intended the term to mean "day-to-day
hands-on
responsibilities for overall administration of HHS's health and safety programs."
I.G.'s Memorandum at 6.
The I.G. also cites legislative history to the 1987 revision to 42 U.S.C. 1320a-7
to urge that Congress
specifically approved the Secretary's delegation of exclusion authority to the
I.G.
I am satisfied from the language of 42 U.S.C. 1320a-7, 42 U.S.C. 405(b), and
relevant regulations that I do
not have jurisdiction to decide this issue. Neither Congress nor the Secretary
intended to confer that
jurisdiction on me, and there exists no other source of authority which confers
it.7
Congress directed the Secretary to provide excluded parties with the opportunity
to have hearings as to
their exclusions. 42 U.S.C. 1320a-7(f); 42 U.S.C. 405(b). There is no language
in 42 U.S.C. 1320a-7(f)
which states or implies that in conducting hearings as to the propriety of exclusions,
the Secretary is
required to consider challenges to his broad regulatory and policy determinations.
The law requires that an
excluded party is entitled to reasonable notice and opportunity for a hearing
by the Secretary "to the same
extent as is provided in section 405(b) of this title." Section 405(b)
states that:
Upon request by any . . . individual who makes a
showing in writing that his or her rights may be
prejudiced by any decision the Secretary has
rendered, (the Secretary) shall give such
(individual) reasonable notice and opportunity
for a hearing with respect to such decision, and,
if a hearing is held, shall on the basis of evidence
adduced at the hearing, affirm, modify, or reverse
his findings of fact and such decision. (Emphasis
added).
The plain meaning of this language is that the Secretary has the duty only
to provide hearings as to
decisions made in applying laws, regulations, and policies in specific cases.
The law does not create
hearing rights before the Secretary to challenge laws, regulations, or policy
determinations.
The Secretary has issued regulations providing for administrative law judges
to hear and decide exclusion
cases involving criminal offenses. 42 C.F.R. 1001.128(a). The regulations are
consistent with the law. 42
C.F.R.1001.128 limits administrative law judges' authority to hear and decide
such cases to the issues of
whether: (1) the petitioner was in fact, convicted; (2) the conviction was related
to his or her participation
in the delivery of medical care or services under the Medicare, Medicaid, or
social services program; and
(3) the length of the suspension (exclusion) is reasonable. Id..
Subsection (a)(3) of this regulation appears on its face to permit administrative
law judges to hear and
decide issues pertaining to the reasonableness of the I.G.'s decision-making
processes and procedures he
used in determining, imposing and directing individual exclusions. Indeed, in
adopting this regulation, the
Secretary made it clear that the administrative law judge's role was to decide
whether the I.G.'s exclusion
determination in a particular case was reasonable. 48 Fed. Reg. 3744 (Jan. 27,
1983). For example, a
question of whether the I.G. had improperly failed to consider relevant facts
would clearly relate to the
issue of whether the exclusions imposed and directed by the I.G. were reasonable,
and would therefore be
reviewable by an administrative law judge. Similarly, a question concerning
whether the I.G. gave the
excluded party reasonable notice and opportunity to be heard would ultimately
relate to the issue of
whether the length of the exclusion is reasonable.
There is no language in 42 C.F.R. 1001.128, or in other regulations, which
states or implies that the
Secretary has conferred on administrative law judges authority to examine the
lawfulness of regulations or
of departmental delegations. The jurisdiction conferred upon administrative
law judges by 42 C.F.R.
1001.128 only permits inquiry into the propriety of the I.G.'s decisions in
individual cases.
Petitioner cites several decisions for the proposition that the administrative
law judge's jurisdiction includes
authority to decide the lawfulness of the Secretary's regulations and delegations.
None of these decisions
support this argument. Firth v. Celebrezze, 333 F.2d 557, 560 (5th Cir. 1964),
and Taliferro v. Califano,
426 F. Supp. 1380 (N.D. Mo. 1977), hold that administrative law judges must
apply correct legal standards
in their decisions. Neither case addresses the question of whether an administrative
law judge may rule on
the Secretary's legal or policy determinations. Locklear v. Matthews, 424 F.
Supp. 639, 646 (D. Md.
1976), holds that an administrative law judge correctly relied on the statutory
standard for disability in a
Social Security disability case. The case does not address a conflict between
the Secretary's policies and
the law, much less hold that administrative law judges had jurisdiction to decide
that issue.
Marion v. Gardner, 359 F. 2d 175, 181 (8th Cir. 1966), merely holds that an
administrative law judge too
narrowly applied a regulation. Pollard v. Gardner, 267 F. Supp. 891, 907 (W.D.
Mo. 1967), holds that the
Secretary may not defeat Congressional intent through regulations. It says nothing
about the administrative
law judge's jurisdiction. Finally, Shrader v. Harris, 631 F. 2d 297, 302-303
(4th Cir. 1980), deals with the
administrative law judge's responsibility to develop a record and to make findings
on issues over which he
has jurisdiction. It does not suggest that the administrative law judge has
jurisdiction to overrule the
Secretary's regulatory or administrative decisions.
Because I do not have jurisdiction to adjudicate questions concerning the lawfulness
of the Secretary's
delegations of authority to the I.G., I make no findings or conclusions as to
the merits of this issue. I
therefore deny Petitioner's motion for summary disposition on this issue.
2. I do not have authority to decide whether the Secretary is required to
adopt regulations
implementing the 1987 revisions to 42 U.S.C. 1320a-7 before the I.G. may make
exclusion determinations
pursuant to the law. Petitioner argues that the exclusions imposed on him are
invalid because the Secretary
has not adopted regulations implementing the 1987 revisions to 42 U.S.C. 1320a-7.
More specifically, he
asserts that regulations are necessary to clarify any "ambiguities"
that may exist between the mandatory
exclusion provisions of 42 U.S.C. 1320(a) and the permissive exclusion provisions
of 42 U.S.C. 1320(b).
P.'s Memorandum at 12. He urges that I conclude that the Secretary is ignoring
a need for clarifying
regulations, and that the I.G. is relying on "unpublished, internal . .
. guidelines/directives" to determine
whether individual exclusion cases should be characterized as mandatory or permissive.
P.'s Memorandum
at 5. Such actions allegedly violate the Administrative Procedure Act, 5 U.S.C.
552 et seq.. Petitioner also
contends that the Secretary's failure to adopt implementing regulations injured
him, because had he known
that the I.G. would conclude that mandatory five-year exclusions were required
in his case, Petitioner
"would not have agreed to his guilty plea . . . ." P.'s Memorandum
at 4.
The I.G. responds to these arguments by asserting that Petitioner's contentions
are based on a
misunderstanding of 42 U.S.C. 1320a-7. I.G.'s Memorandum at 12. According to
the I.G., the law clearly
and unambiguously requires mandatory five-year exclusions in Petitioner's case,
and therefore, no
regulations are required to resolve nonexistent ambiguities. I.G.'s Reply Memorandum
at 12. The I.G. also
asserts that the Secretary is, in any event, entitled to execute his statutory
duty in the absence of
regulations, so long as he proceeds in accordance with "ascertainable standards"
and "provides a statement
showing (his) reasoning in applying the standards." I.G.'s Memorandum at
14. The I.G. contends that the
Secretary complied with these legal requirements in this case.
Petitioner's argument reduces to the contention that the Secretary is obligated
to adopt implementing
regulations before applying 42 U.S.C. 1320a-7 to particular cases. I am without
authority to decide this
issue for the same reason that I lack authority to decide the lawfulness of
the Secretary's delegations.
Neither the law nor existing regulations confer jurisdiction on me to decide
under what circumstances the
Secretary must issue regulations. As I have held supra, my jurisdiction is limited
by law to deciding
whether the I.G. has acted reasonably in applying law, regulations, and policies
to the facts of individual
cases. 42 U.S.C. 1320a-7(f); 42 U.S.C. 405(b); 42 C.F.R. 1001.128.
Therefore, I make no findings or conclusions as to whether the Secretary is
obligated to issue regulations
implementing the 1987 revisions to 42 U.S.C. 1320a-7, and I deny Petitioner's
motion for partial summary
disposition on this issue.
3. Given the undisputed material facts, the I.G.'s determination to exclude
Petitioner from
participation in the Medicare program, and to direct that he be excluded from
participation in State health
care programs, for five years, is mandated by law. The undisputed facts of this
case are that Petitioner
pleaded guilty to, and was convicted of, a felony charge of fraud against the
Tennessee Medicaid program.
Specifically, Petitioner, a pharmacist, billed the Medicaid program for dispensing
brand name drugs, when
in fact, he had sold cheaper, generic medication. Petitioner fraudulently obtained
reimbursement which he
was not owed, and he deceived the Medicaid program into making a payment to
Petitioner which it was not
obligated to make.
The I.G. excluded Petitioner from participation in the Medicare program, and
directed that he be excluded
from participation in State health care programs, for five years, pursuant to
42 U.S.C. 1320a-7(a)(1) and
(c)(3)(B). Subsection (a)(1) requires the Secretary to exclude from participation
in Medicare, and direct
the exclusion from participation in State health care programs (including Medicaid),
"any individual or
entity that has been convicted of a criminal offense related to the delivery
of an item or service" under
Medicare or any State health care program. (Emphasis added). Subsection (c)(3)(B)
directs that for those
parties excluded pursuant to subsection (a), the minimum exclusion period shall
be for five years.
The I.G. contends that, given the undisputed facts of this case, the law requires
that Petitioner be excluded
from participation in Medicare and State health care programs for at least five
years. The I.G. asserts that
there exist neither facts nor law which could alter this conclusion; consequently
he urges that I enter a
summary disposition upholding the exclusions imposed on Petitioner. I.G.'s Memorandum
at 8.
Petitioner asserts that the I.G. has mischaracterized the offense to which
Petitioner pleaded guilty and was
convicted of committing. According to Petitioner, his conviction was for "financial
misconduct" and was
not related to the delivery of an item or service under the Medicare or State
health care programs.
Petitioner contends that exclusions of parties convicted of such offenses are
governed by 42 U.S.C. 1320a-
7(b)(1), which gives the Secretary discretion to exclude from participation
in Medicare, and direct the
exclusion from participation in State health care programs, parties convicted
"in connection with the
delivery of a health care item or service with respect to any act or omission
in a program operated by or
financed in whole or in part by any Federal, State, or local government agency,
of a criminal offense
relating to fraud, theft, embezzlement, breach of fiduciary responsibility,
or other financial misconduct."
There is no statutory requirement that such exclusions be for a minimum period.
Therefore, according to
Petitioner, if any exclusion is appropriate, it must be determined without regard
to statutory minimum
mandatory periods. P.'s Memorandum at 23. Petitioner also contends that in any
event, he is entitled to an
evidentiary hearing to determine which statutory section applies to the offense
for which he was convicted.
P.'s Memorandum at 19.
I conclude that it is manifest, both from the language of the statute, and
from legislative history, that the
offense committed by Petitioner is governed by 42 U.S.C. 1320a-7(a)(1). The
I.G. had no choice but to
exclude Petitioner from participation in Medicare, and to direct his exclusion
from participation in State
health care programs, for at least five years.
There is no question that if subsection (b)(1) of the law is read in isolation,
its language would literally
encompass the offense for which Petitioner was convicted. His conviction was
for an act of fraud, and
certainly constituted "financial misconduct" directed against a program
financed in part by a State
government agency. However, when this subsection is read in context with subsection
(a)(1), it becomes
clear that Petitioner's case is not governed by the permissive exclusion provisions.
This is so because the law specifically requires exclusions of parties who
commit offenses described in
subsection (a)(1), and Petitioner's offense obviously falls within the ambit
of offenses characterized by that
subsection. The plain meaning of the language of subsection (a)(1) is to require
exclusion from
participation in the Medicare and State health care programs of those parties
who commit offenses,
including fraud or financial misconduct, in connection with the delivery of
or billing for items or services
rendered pursuant to these programs. The phrase in subsection (a)(1), "related
to the delivery of an item or
service," conveys legislative intent to sweep within the subsection all
"financial" offenses directed against
the Medicare and State health care programs. Petitioner's offense--which amounted
to theft or conversion
of Medicaid funds--is covered by this language.
Subsection (a)(1), therefore, encompasses the same kinds of "financial"
offenses which are described in
subsection (b)(1), but limited to those offenses which are directed against,
or committed in connection with
the rendering of services pursuant to, the Medicare and State health care programs.
The legislative scheme
apparent from reading subsections (a)(1) and (b)(1) in conjunction with each
other is to mandate exclusions
of those who commit financial crimes directed against Medicare and State health
care programs, and to
permit exclusions of those who commit financial crimes in connection with the
delivery of a health care
item or service pursuant to programs other than Medicare or State health care
programs, which are financed
by federal, state, or local government agencies. As the fraud committed by Petitioner
was directed against
Medicaid, a State health care program, his exclusion is covered by subsection
(a)(1).
Petitioner asserts that subsection (a)(1) was intended to encompass only "the
illegal delivery of services,
themselves" and not "subsequent illegal billing" for services
pursuant to the Medicare and State health care
programs. P.'s Memorandum at 20. He seeks to distinguish "billing offenses"
from such offenses as
"taking sexual advantage of a patient" or "charging for medically
unnecessary diagnostic and testing
procedures," asserting that section (a)(1), by its terms, applies only
to the latter offenses. However,
although the language of subsection (a)(1) is arguably broad enough to apply
to those kinds of offenses
identified as covered by Petitioner, it also covers the offense he committed.
Furthermore, 42 U.S.C.
1320a-7(a)(2) requires exclusion of parties convicted of "neglect or abuse
of patients in connection with
the delivery of a health care item or service." This subsection, then,
covers the kinds of "abuse" cases that
Petitioner asserts constitute the ambit of subsection (a)(1).
The purpose of the law is underscored when the current law is compared with
the law in effect prior to
enactment of the 1987 revisions. The law then in effect mandated suspensions
from participation in the
Medicare and state programs of physicians or other individuals convicted of
a "criminal offense related to
such individual's participation in the delivery of medical care or services
under" Medicare, Medicaid, or the
social services programs. The law then in effect did not specify a minimum suspension
period. This law
covered a narrower class of offenses than are covered by the present 42 U.S.C.
1320a-7(a) and (b). For
example, the pre-1987 law would not have permitted exclusions of individuals
committing offenses against
government-financed health care programs other than Medicare and State health
care programs, whereas
exclusions of such persons are now permitted by subsection (b)(1). So, an obvious
objective of the 1987
revisions was to broaden the kinds of offenses for which exclusions could be
imposed.
The kind of offense for which Petitioner was convicted (fraud against the Medicaid
program) would have
resulted in a mandatory exclusion under the pre-revision version of the law.
There is nothing in the
language of the current law to suggest that Congress, in broadening the scope
and reach of the law,
narrowed the category of cases which require exclusions. Indeed, the mandatory
exclusion language of the
present subsection (a)(1) is, if anything, more sweeping than that of its predecessor.
Legislative history to the 1987 revisions also makes it clear that Congress
intended its enactment to enlarge
the scope of offenses for which exclusions could be imposed--and not limit or
undercut the mandatory
exclusion requirements which had previously been enacted. The Senate Report
which accompanied the
1987 legislation explained Congressional intent in enacting subsection (b)(1):
The Secretary would be authorized to exclude any individual or entity convicted
under Federal
or State law of a criminal offense relating to fraud, theft, embezzlement, breach
of fiduciary responsibility
or financial abuse if such offense was committed either in connection with the
delivery of health care or
with respect to a program that is financed, at least partially, by Federal,
State, or local government.
Under current law, the Secretary does not have the authority to exclude individuals
or entities
convicted of criminal offenses which are not related to Medicare or Medicaid
or the other State health care
programs. This provision would permit the Secretary to exclude persons and entities
who have already
been convicted of offenses relating to their financial integrity, if the offenses
occurred in delivering health
care topatients not covered by public programs or if theyoccurred during participation
in any other
governmentalprogram.
S. Rept. No. 100-109, 100th Cong., 1st Sess. 5, 6-7 (1987), reprinted in, 1987
U.S. Code Cong & Admin.
News 682, 687. (Emphasis added). Thus, Congress intended the new subsection
(b)(1) to permit exclusion
for offenses not related to Medicare and State health care programs. Subsection
(a)(1) was reserved, in
part, for those "financial" offenses which were related to the Medicare
and State health care programs.
Finally, there is no merit to Petitioner's claim that he is entitled to an
evidentiary hearing to determine
under which statutory subsection his offense falls. Petitioner has stipulated
to the material facts of this
case. He has acknowledged that he was convicted of a criminal offense consisting
of fraud against the
Medicaid program. He has not offered any facts which would derogate from this
admission or suggest that
he was convicted of something other than that to which he has stipulated. At
oral argument on the motions
for summary disposition, Petitioner's counsel stated that he would like to consider
offering expert
testimony as to whether the offenses of which Petitioner was convicted are offenses
encompassed by 42
U.S.C. 1320a-7(a)(1). But the question of how to legally classify facts to which
the parties have stipulated
is not an issue which can be resolved with expert testimony. How the offense
for which Petitioner was
convicted is characterized pursuant to 42 U.S.C. 1320a-7 is a question of law.
Therefore, given the
undisputed material facts, there is no need for an evidentiary hearing in this
matter.
CONCLUSION
Based on the undisputed material facts, the law, and regulations, I conclude
that the I.G.'s determination to
exclude Petitioner from participation in the Medicare program, and to direct
that Petitioner be excluded
from participating in State health care programs, for five years, was mandated
by law. Therefore, I am
entering a decision in favor of the I.G. in this case.
___________________________
Steven T. Kessel
Administrative Law Judge
Addresses:
RETURN RECEIPT REQUESTED
Kenneth J. Haber, P.C.
1730 K Street, Suite 304
Washington, D.C. 20006
and
F. Richard Waitsman
Assistant Regional Counsel
DHHS - Region IV
Room 521
101 Marietta Tower
Atlanta, Georgia 30323
cc: Office of Inspector General
Office of Investigations
Room 3-C-1, Meadows East Building
Baltimore, Maryland 21207
Regional Inspector General
Office of Investigations
Attn: James Cottos
P.O. Box 2201
Atlanta, Georgia 30301