DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Michael I. Sabbagh, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: February 21, 1989
Docket No. C-59
DECISION OF ADMINISTRATIVE LAW JUDGE
ON MOTIONS FOR SUMMARY DISPOSITION
Petitioner requested a hearing to contest the Inspector General's (the I.G.)
determination excluding him
from participating in the Medicare program, and directing 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. Based on the undisputed
facts, the law, and the
applicable regulations, I conclude that the exclusions imposed and directed
by the I.G. are mandatory.
There remain no questions of fact, to be addressed at a hearing, which could
affect the outcome of this
case. Therefore, I am deciding this case in favor of the I.G.
BACKGROUND
On August 31, 1988, the I.G. sent notice to Petitioner, advising him that he
was being excluded from
participation in 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
five year mandatory exclusions from participation in Medicare and State health
care programs for
individuals convicted of a program-related offense. The I.G. told Petitioner
that, because 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 November 18, 1988, at which
both parties expressed
their intent to move for summary disposition. I issued a prehearing Order on
November 22, 1988, which
established a schedule for moving for summary disposition and for responding
to such motions. The Order
also provided for oral argument on the motions, at the request of either party.
The I.G. moved for
summary disposition. Petitioner opposed the motion, and filed cross motions
for summary relief.
Petitioner requested oral argument, and, by agreement of the parties, I conducted
oral argument via
telephone on February 7, 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 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. summary disposition is appropriate in this case;
4. 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; and
5. I have authority to review the I.G.'s decision that there exists no basis
to waive the exclusions
imposed on Petitioner or to consider Petitioner's request that I grant a waiver
from the exclusions that have
been imposed on him.
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 the exclusion from participation in any State health care programs, of
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 of 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 be not 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 law further provides that the Secretary may waive exclusions imposed pursuant
to 42 U.S.C. 1320a-
7(a)(1), in the case of an individual or entity that is the sole community physician
or the sole source of
essential specialized services in the community, "upon the request of a
State." 42 U.S.C. 1320a-7(c)(3)(B).
However, "the Secretary's decision whether to waive the exclusion shall
not be reviewable." Id..
The current law was enacted in August 1987 and embodies revisions of 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 physician who has practiced in Michigan. P. Ex. 1/10.
2. Petitioner was indicted for, and on March 7, 1988, pleaded guilty to, the
crime of Attempted
False Medicaid Claim, a high misdemeanor under the laws of the State of Michigan.
P. Ex. 1/2, 8; P.'s
Memorandum at 1.
3. In his guilty plea, Petitioner admitted submitting a fraudulent claim to
the State Medicaid
program for reimbursement for an office visit, which in fact did not occur.
P. Ex. 1/9, 12. The crime to
which Petitioner pleaded guilty exposed him to a potential prison sentence of
two years. P. Ex. 1/6.
4. During the hearing on Petitioner's guilty plea, counsel represented to
the court that, as a
condition for the plea, "the Medical Services Administration, which is
Medicaid, and the Department of
Social Services will, before sentencing, provide to . . . [Petitioner] a letter
affirmatively assuring . . . [him]
that as a result of this conviction, Medicaid Services Administration will take
no affirmative action against
. . . [Petitioner's] present provider enrollment." P. Ex. 1/7.
5. In October, 1988, the St. Clair, Michigan, county health department requested
that Petitioner
be allowed to continue treating indigent patients, because Petitioner was "the
only OB-GYN specialist from
our county accepting new Medicaid General Assistance patients at this time."
P. Ex. 2.
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 is five years for a person who has
been excluded
based on conviction of a criminal offense related to the delivery of an item
or service under Medicaid. 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, 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. 1001.128.
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. There do not exist disputed issues of material fact in this case; therefore,
summary disposition
is appropriate. See F.R.C.P. 56.
13. 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, based on
Petitioner's conviction of a criminal offense related to the delivery of an
item or service under the Medicaid
program. 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).
14. I do not have authority to review the I.G.'s determination that there
exists no basis to waive
the exclusions imposed on Petitioner. 42 U.S.C. 1320a-7(c)(3)(B). I have no
authority to consider
Petitioner's request that the exclusions be waived. 42 U.S.C. 1320a-7(c)(3)(B);
42 C.F.R. 1001.128.
ANALYSIS
Petitioner pleaded guilty to, and was convicted of, a crime involving a claim
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) Petitioner's 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 the I.G.
is instead relying on a
"verbal directive, rule, or writing" to determine exclusions; (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), whereas 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); and (4)
assuming Petitioner was
properly excluded pursuant to 42 U.S.C. 1320a-7(a)(1), his exclusions ought
to be waived because he is the
sole provider of Ob-Gyn medical services to indigent patients in St. Clair County,
Michigan.
Petitioner also contends that, in any event, he is entitled to an evidentiary
hearing as to these issues. He
asserts that "this matter is factually contested" and that, therefore,
an evidentiary hearing is required to
resolve contested issues. P.'s Memorandum at 44. He further asserts that an
evidentiary hearing is
necessary for fact finding on "constitutional issues" to "permit
subsequent judicial review." Id. at 50.
I have carefully considered the contentions of the parties, their 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 conclude that
when the relevant factual assertions of the parties are considered in a light
most favorable to Petitioner,
there exist no disputed issues of material fact in this case and, consequently,
summary disposition is
appropriate.
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). I conclude that I have no
authority to decide the
propriety of any decision the I.G. may have made concerning Petitioner's request
for waiver of his
exclusions. Furthermore, I have no authority to consider a request that I determine
whether a waiver is
appropriate in this case.
Several of the arguments made by Petitioner in this case are identical to arguments
made by petitioner in
Jack W. Greene v. The Inspector General, Docket No. C-56. Indeed, counsel for
Petitioner also
represented petitioner in Greene. I will not repeat verbatim my analysis in
the Greene decision in deciding
this case; however, where relevant, I will cite to aspects of that decision.
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). P.'s Memorandum at 30. Petitioner argues that exclusions
imposed or directed
pursuant to this allegedly illegal delegation are invalid. Id. at 31. Therefore,
according to Petitioner, I
should enter a "default judgment" (summary disposition) in his favor,
voiding the exclusions imposed and
directed against him by the I.G. Id. at 32. The I.G. disputes these contentions,
asserting that the delegation
of exclusion authority to the I.G. is not a "program operating responsibility"
as is defined by law.
Furthermore, according to the I.G., the delegation has been expressly condoned
and directed by Congress.
I.G.'s Memorandum at 3-6.
The identical contentions as to the delegation of exclusion authority were
raised by petitioner in Greene. I
held in Greene that neither 42 U.S.C. 1320a-7 nor 42 U.S.C. 405(b) (incorporated
by reference in 42
U.S.C. 1320a-7) provided for administrative review of regulations or policy
determinations in exclusion
cases. Furthermore, the Secretary's regulatory grant of jurisdiction to administrative
law judges to hear and
decide exclusion cases did not include a grant of authority to decide the lawfulness
of regulations and
policies. 42 C.F.R. 1001.128. I concluded that I did not have authority to hear
and decide contentions
concerning the lawfulness of delegations of authority from the Secretary to
the I.G. Neither party to this
case has provided anything which adds to the arguments presented by the parties
in Greene. Therefore, I
again conclude that I do not have authority to hear and decide Petitioner's
contentions concerning the
delegation of exclusion authority to the I.G. I make no findings or conclusions
as to the merits of this
issue, and I deny Petitioner's motion for summary disposition.
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.
Petitioner premises
this conclusion on his contention that the 1987 law is ambiguous. According
to Petitioner, the I.G. is
interpreting the ambiguous provisions of the law in a manner which classifies
Petitioner's case as a
"mandatory" exclusion case pursuant to 42 U.S.C. 1320a-7(a)(1). The
Petitioner argues that this alleged
classification is invalid because the Secretary has not first conducted a rulemaking
proceeding pursuant to
the Administrative Procedure Act. 5 U.S.C. 552 et seq.. Instead, according to
Petitioner, the I.G. is relying
on "unpublished, internal . . . guidelines/directives" to interpret
and apply the law. P.'s Memorandum at 7.
Petitioner also argues that these alleged acts or omissions by the Secretary
are unfair because Petitioner, at
the time he pleaded guilty, did not know that his offense would be characterized
as one which mandated
exclusions. P.'s Memorandum at 2-11.
In response to these assertions, the I.G. contends that no regulations are
required for an agency to carry out
its statutory responsibilities, so long as it proceeds in accordance with ascertainable
standards. Petitioner's
exclusions were imposed according to such standards and, therefore, were lawful.
I.G.'s Memorandum at
6-7. Moreover, according to the I.G., Petitioner received more than adequate
notification of the standards
pursuant to which the I.G. proceeded. Id..
As with the issue of the lawfulness of the delegation of exclusion authority
to the I.G., this issue was
argued by petitioner in Greene. I held in my Greene decision that I am without
authority to decide the
issue for the same reason that I lack authority to decide the lawfulness of
the Secretary's delegations. I
decided that neither the law nor regulations conferred jurisdiction upon me
to decide the circumstances in
which the Secretary must issue regulations. I held that 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.
Neither party to this case has offered anything which adds to the arguments
presented in Greene.
Therefore, I again conclude that I am without jurisdiction to decide whether
the Secretary is obligated to
issue regulations implementing the 1987 revisions to 42 U.S.C. 1320a-7.
3. Summary disposition is appropriate in this case. Petitioner has advanced
several arguments to
support his contention that this case cannot be decided without an evidentiary
hearing. Petitioner contends
that a hearing is necessary to adduce evidence which will clarify the nature
of the offense pleaded to by
him, and how it should be classified pursuant to 42 U.S.C. 1320a-7. He argues
that if his offense falls
under the "discretionary" exclusion provisions of 42 U.S.C. 1320a-7(b)(1),
a hearing will be necessary to
determine which, if any, exclusions are reasonable. He asserts that a hearing
is required to determine
whether a waiver of exclusions is appropriate in his case. Finally, Petitioner
contends that an evidentiary
hearing is necessary in order to make a factual record upon which to premise
appeals concerning the
constitutionality of the actions taken by the I.G. P.'s Memorandum at 44-50.
Summary disposition has long been utilized as an efficiency-promoting mechanism
to decide federal cases
where there exist no disputed issues of material fact or where the undisputed
facts demonstrate that one
party is entitled to judgment as a matter of law. 56 F.R.C.P; Collins v. American
Optometric Ass'n., 693 F.
2d 636 (7th Cir. 1982). The remedy must be cautiously employed to assure that
parties are not unfairly
deprived of their hearing rights. Summary disposition should not be granted
unless, after viewing the facts
in the light most favorable to the party against whom the motion is made, the
decision-maker is convinced
that there exists no genuine issue of material fact remaining for trial; the
moving party then is entitled to a
decision as a matter of law. Continental Casualty Co. v. City of Richmond, 763
F.2d 1076, 1078-79 (9th
Cir. 1985); Lang v. New York Life Ins. Co., 721 F.2d 118, 120 (3rd Cir. 1983);
D.L. Auld Co. v. Chroma
Graphics Corp., 714 F.2d 1144, 1146 (Fed. Cir. 1983). Summary disposition is
an appropriate method of
disposing of a legal question of statutory construction in which the legislative
history and policy are the
primary considerations. Mobil Oil Corp. v. Federal Energy Administration, 566
F.2d 87, 92 (Temp. Em.
Cir. 1977).
It is clear that 42 U.S.C. 1320a-7 and 42 U.S.C. 405(b) require that petitioners
in exclusion cases be
granted hearings on all issues of disputed material facts. However, the law
is silent as to whether summary
disposition is appropriate in cases where material facts are not in dispute.
I conclude that, so long as
petitioners are provided hearings on issues of disputed material fact, there
is nothing in the law which
would prohibit use of summary disposition as an appropriate technique for deciding
cases where material
facts are not controverted or where the only issues involve questions of law.
Petitioner's contentions that an evidentiary hearing is necessary in this case
are without merit. He asserts
that a "factual controversy" exists concerning the nature of his offense
and how it should be characterized
pursuant to the law. However, Petitioner and the I.G. agree that Petitioner
pleaded guilty to an attempt to
defraud the Medicaid program and rely on the same document to establish these
facts. See P. Ex. 1; I.G.
Ex. 1. My findings of fact concerning the offense pleaded to by Petitioner are
based entirely on Petitioner's
own exhibits and his allegations and accept as true the facts most favorable
to Petitioner. See Findings 1-5.
The area of disagreement between the parties is the manner in which Petitioner's
conviction ought to be
characterized under the law. That is a legal question.
At oral argument on the motions for summary disposition, Petitioner's counsel
stated that he wanted to
offer expert testimony as to whether the offense of which Petitioner was convicted
is an offense
encompassed by 42 U.S.C. 1320a-7(a)(1). He also stated that he wished to take
the testimony of the I.G.
employee who reviewed Petitioner's case in order to ascertain the criteria that
employee used in deciding
that the case fell under the aforesaid subsection. But how the offense of which
Petitioner was convicted is
classified pursuant to 42 U.S.C. 1320a-7 is not a question of fact, but of law.
Expert opinion, or the state
of mind of the I.G.'s employees, is irrelevant to this issue.
Petitioner's assertion that a hearing is necessary to determine which, if any,
discretionary exclusions should
be imposed pursuant to 42 U.S.C. 1320a-7(b)(1) hinges on his claim that the
offense to which he pleaded
guilty should be classified pursuant to that statutory subsection. As I shall
discuss at Part 4 of this
Analysis, Petitioner's offense falls within the ambit of 42 U.S.C. 1320a-7(a)(1),
and not subsection (b)(1).
Therefore, Petitioner's argument fails.
I also conclude that Petitioner's claim that he must have a hearing to offer
evidence regarding why he
deserves a waiver from the exclusions imposed on him is without merit because
there exists no authority
for me to review the I.G.'s determination on that issue or to independently
decide whether a waiver should
be granted. See Part 5 of this Analysis. In so concluding, I accept as true,
albeit irrelevant, that the St.
Clair County, Michigan, health department has certified that Petitioner is the
only Ob-Gyn specialist in St.
Clair County accepting indigent referrals, and that Petitioner's guilty plea
was conditioned on the
prosecutor's representation that Medicaid would provide Petitioner with a letter
assuring him that it would
take no action against his "present provider enrollment" as a result
of the conviction. See Findings 4 and 5.
Petitioner argues that he must take testimony as to the I.G.'s exclusion determination
process, so that he can
challenge its constitutionality. But there is not any meaningful factual dispute
regarding what the I.G. has
done in this case. The I.G.'s exclusion determinations, and the reasoning which
supports those
determinations, are described in the notice of exclusion which the I.G. sent
to Petitioner on August 31,
1988.
I conclude that there are no disputed issues of material fact in this case.
The only issues in dispute are legal
issues. Summary disposition is, therefore, an appropriate mechanism for deciding
the matter.
4. 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 criminal offense consisting of attempted
fraud against the
Michigan state Medicaid program. Specifically, Petitioner, a physician, sought
to obtain reimbursement
from the program for an office visit by a patient when, in fact, the service
that he rendered was a telephone
consultation--a service not covered by the Medicaid program. Petitioner attempted
to fraudulently obtain
reimbursement which he was not owed and to deceive 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 to 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. I.G.'s Memorandum
at 16-25.
Petitioner asserts that the I.G. has mischaracterized the offense to which
Petitioner pleaded guilty and was
convicted. 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 Medicare and to 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 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 standards. P.'s Memorandum
at 23-29.
The crime committed by Petitioner is not materially different from that committed
by the petitioner in the
Greene case. Petitioner in Greene was convicted of fraud against the Tennessee
Medicaid program. His
crime consisted of substituting a generic drug for a brand name drug, and billing
the program for the more
expensive brand name drug. In Greene and the present case, the petitioners attempted
to obtain
reimbursement for items or services which were not rendered as claimed. Both
cases, therefore, involve
fraudulent acts against Medicaid programs, related to the delivery of services
pursuant to those programs.
In Greene, I concluded that the conduct at issue fell within the ambit of the
mandatory exclusion provisions
of 42 U.S.C. 1320a-7(a)(1) and not the permissive exclusion provisions of 42
U.S.C. 1320a-7(b)(1). My
conclusion was based on the plain meaning of the law, comparison of the current
law with the pre-1987
version, and legislative history. Petitioner, in this case, has simply reiterated
the arguments that were made
by the petitioner in Greene. He has offered nothing new which would derogate
from my analysis or my
conclusion.
The plain meaning of 42 U.S.C. 1320a-7(a)(1) is that individuals or entities
who are convicted of
"financial" crimes against the Medicare or State health care programs,
including all forms of fraudulent
billing schemes directed against those programs, must be excluded from participation.
That meaning is
evident when the section is read in context with the other sections of 42 U.S.C.
1320a-7. Congress' intent
was to require exclusion of those individuals or entities who committed offenses
directed against the
Medicare and State health care programs and to permit exclusion of those individuals
or entities who
committed offenses directed against government-financed health care programs
other
than Medicare or State health care programs. See 42 U.S.C. 1320a-7(b)(1).
The law is the latest version of a series of Congressional enactments which
have progressively
strengthened remedies against providers of services and others who commit crimes
related to or directed
against government-financed health care programs. In 1977, Congress passed a
law requiring the Secretary
to suspend physicians or practitioners convicted of criminal offenses related
to their involvement in
Medicare or State health care programs. 91 Stat. 1175, 1192-1193 (1977) (codified
as section 1862(e)(1)
of the Social Security Act). By its terms and history, this mandatory exclusion
law was directed against
physicians or practitioners who were convicted of fraud against the Medicare
or State health care
programs. In the legislative history to the law, Congress specifically stated
its intent to mandate exclusion
of those who were convicted of acts of fraud against these programs. H.R. Rep.
No. 95-393-Part II, 95th
Cong., 1st Sess. 44 (1977).
The law was revised in 1980 to assure that exclusions would also be imposed
against health professionals
other than physicians who committed program-related crimes. 94 Stat. 2599, 2619
(1980) (codified as
section 1128(a) of the Social Security Act). The 1980 revision maintained the
mandatory exclusion
features of the 1977 enactment, but broadened the scope of its coverage.
The current law was adopted by Congress in August 1987. Congress again broadened
the reach of the law
by adding sections which: (1) required exclusion of individuals or entities
from participation in the
Medicare and State health care programs who were convicted of offenses involving
patient neglect or
abuse (42 U.S.C. 1320a-7(a)(2)); and (2) permitted exclusion of individuals
or entities convicted of a range
of other offenses, including fraud directed at government-financed health care
programs other than
Medicare or Medicaid. See 42 U.S.C. 1320(b)(1).
Petitioner would stand this history on its head. The thrust of his argument
is that in 1987 Congress
weakened the mandatory exclusion requirements of 42 U.S.C. 1320a-7(a)(1) by
enacting subsection (b)(1).
He asserts that exclusions which were mandated prior to the 1987 enactment,
including exclusions based
on convictions for fraud against Medicare or State health care programs, became
discretionary by virtue of
the 1987 revision. I conclude that this argument ignores both the plain meaning
of the law and Congress'
intent as expressed through legislative history and is without merit. As I noted
in Greene, this argument
can only appear credible if subsection (b)(1) is read out of context, without
reference to the rest of the law.
Petitioner attempts to distinguish this case from Greene by arguing that in
Greene the offense involved
charging more for a covered item or service than Medicaid was required to reimburse,
whereas in the
present case the offense involved an attempt to obtain reimbursement for an
act or service that was not
covered by the Medicaid program. He argues that even if some "financial
crimes" fall within the ambit of
42 U.S.C. 1320a-7(a)(1), the offense committed by him does not, because it did
not relate to a service
actually rendered and reimbursable under the Medicaid program. According to
Petitioner, a fraudulent
claim for reimbursement which represents that a covered service had been rendered
when, in fact, it had
not would not fall within the coverage of the section, even if a fraudulent
overcharge for a covered service
does.
This is a distinction without a difference. The language of 42 U.S.C. 1320a-7(a)(1)
is plainly broad
enough to include false claims as well as overcharges. The history of the law
makes it clear that a primary
objective of Congress has always been to mandate exclusion of those who sought
to defraud Medicare and
State health care programs with charges for fictitious services, as this Petitioner
did. In the legislative
history to the 1977 enactment, Congress stated that:
Perhaps the most flagrant fraud involves billings for patients whom the practitioner
has not
treated.A related form of fraud involves claims for servicesto a practitioner's
patients that were not actually
furnished and intentionally billing more than once for the same service.
H.R. Rep. No. 95-393-Part II, 95th Cong., 1st Sess. 44 (1977), reprinted in
1977 U.S. Code Cong. & Ad.
News 3050. (Emphasis added.) Legislative revisions since 1977 (1980 and 1987)
do not suggest that
Congress' intent is any different today than it was then.
I conclude that this case involves a conviction of a criminal offense related
to the delivery of an item or
service under the Medicaid program, and is governed by the mandatory exclusion
provisions of 42 U.S.C.
1320a-7(a)(1).
5. I do not have authority to review the I.G.'s decision that there exists
no basis to waive the
exclusion imposed on Petitioner or to consider Petitioner's request that I grant
a waiver from the exclusions
that have been imposed on him. Petitioner has produced a letter from the St.Clair
County, Michigan,
health department which states that he is the only provider of Ob-Gyn services
in that county willing to
accept referrals of indigent patients, and Petitioner requests that he be allowed
to continue serving them.
See Finding 5. He argues that the I.G. should have considered this as a request
to waive the exclusions
imposed on him. Alternatively, he argues that I should construe this letter
to be a waiver request and either
waive the exclusions or grant a hearing so that he may prove that a waiver is
justified.
The I.G. challenges the significance of the letter and has produced letters
from the Michigan Department of
Social Services which arguably dispute the conclusions set forth in the letter
from the County health
department. Furthermore, the I.G. argues that I lack authority to review waiver
decisions or to
independently decide whether a waiver of exclusions should be granted.
The law provides that the Secretary may waive exclusions imposed pursuant to
42 U.S.C. 1320a-7(a)(1),
"upon the request of a State," "in the case of an individual
or entity that is the sole community physician or
sole source of essential specialized services in a community." 42 U.S.C.
1320a-7(c)(3)(B). The Secretary's
decision whether to waive exclusions "shall not be reviewable." Id..
It is unclear from the record of this proceeding whether "a State"
has actually requested that Petitioner's
exclusions be waived. The letter request is from a County department, and not
from the State Department
of Social Services or from some other State government authority. It is not
addressed to the Secretary, but
"to whom it may concern," and it does not specifically request that
the Secretary grant waivers. It is also
unclear whether the Secretary or his delegate, the I.G., has denied the request,
or simply not considered it.
I need not resolve these ambiguities, because I am without authority to order
relief based on their
resolution.
The law is specific in its injunction that the Secretary's decisions on waiver
requests are not reviewable.
Irrespective of whether the "decision" at issue is to deny or to not
consider a request, I do not have
authority to review that decision.
Petitioner has urged that, as the Secretary's delegate to hear and decide exclusion
cases, I have the authority
to grant a waiver request, even if the I.G. has not made a determination on
the request. This assertion is
incorrect. There is nothing in the law or regulations which either states or
suggests that the Secretary has
delegated to administrative law judges the authority to consider waiver requests.
The administrative law
judge's jurisdiction in hearings concerning exclusions is limited to those issues
specified in 42 C.F.R.
1001.128(a)(1)-(3). The issues which may be heard and decided do not include
the issue of waiver.
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 participation 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