Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Randall T. Dow, Petitioner,
- v. -
The Inspector General.
DATE: August 7, 1992
Docket No. C-92-061
Decision No. CR222
DECISION
By letter dated December 4, 1991, Randall T. Dow, the Petitioner herein, was
notified by the Inspector
General (I.G.), U.S. Department of Health & Human Services (HHS), that it
had been decided to exclude
him for a period of five years from participation in the Medicare and Medicaid
programs (in this decision,
"Medicaid" means those State health care programs mentioned in section
1128(h) of the Social Security
Act (the Act)). The I.G. explained that the five-year exclusion was mandatory
under sections 1128(a)(1)
and 1128(c)(3)(B) of the Act because Petitioner had been convicted of a criminal
offense related to the
delivery of an item or service under Medicare or Medicaid.
Petitioner filed a timely request for review of the I.G.'s action, and the
I.G. moved for summary
disposition.
Counsel for the parties presented oral argument by telephone on August 5, 1992.
Petitioner contends that this case contains disputed issues of material fact
which make summary disposition
inappropriate. However, I find that the factual contentions advanced by Petitioner
are legally irrelevant,
and that the undisputed facts are sufficient to support summary judgment in
favor of the I.G.
APPLICABLE LAW
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act make it mandatory for any
individual who has been
convicted of a criminal offense related to the delivery of an item or service
under Medicare or Medicaid to
be excluded from participation in such programs, for a period of at least five
years.
Section 1128(i) of the Act provides that an individual will be regarded as
having been convicted when a
judgment of conviction has been entered against him by a competent court (regardless
of whether there is
an appeal pending or whether the judgment is ultimately expunged); or when there
has been a formal
finding of guilt by a court; or when a court accepts a nolo or guilty plea;
or when a court defers judgment
to allow a guilty defendant who complies with certain conditions to preserve
a clean record.
ARGUMENT
Petitioner raised several factual and legal arguments.
Petitioner contends that he merely did as he was instructed by his employer
-- i.e., he reported the names
of no show patients. He alleges that it was the employer who decided whether
to bill Medicaid in each
case. Petitioner states that he was never aware that it was improper to bill
for no show patients. He alleges
that Memorial's management and Board used him as a scapegoat by falsely stating
that he was responsible
for the unlawful claims.
Petitioner argues that where there is no delivery of a service, there is no
basis for exclusion under section
1128(a)(1). He contends that by reporting only that a particular patient had
not kept an appointment,
Petitioner did nothing improper (since he rendered no treatment), even though
a bill may have
subsequently been submitted. He maintains also that the I.G. should have proceeded
against him under the
permissive exclusion provisions of section 1128(b), rather than the mandatory
exclusion provisions of
section 1128(a)(1). Petitioner asserts that, in a permissive exclusion action,
he would be able to show that
he was legitimately confused by Medicare/Medicaid billing rules.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 1/
1. Petitioner worked as a physical therapist at Memorial Medical Center during
the period that the offenses
to which he pled guilty occurred.
2. Petitioner pled guilty in the Third Circuit Court, State of Utah, Salt Lake
County, Sandy Department,
and was convicted of violating section 26-20-7(2)(b) of the Utah Code, a Class
A misdemeanor. The law
in question provides that no person shall knowingly file a claim for a medical
benefit which misrepresents
the type, quality, or quantity of the items or services rendered. P. Br. 1,
10; I.G. Ex. 3, 4.
3. Petitioner entered into a plea agreement which obliged him to pay the State
restitution, investigatory
costs, and penalties totalling $12,000. The agreement further provided that
Petitioner and the prosecution
would request the court to hold in abeyance the plea and disposition of the
case. I.G. Ex. 4.
4. Petitioner submitted to the court a document called a waiver, in which he
attested that his guilty plea was
entirely voluntary. I.G. Ex. 5.
5. The court accepted Petitioner's guilty plea on April 8, 1991. I.G. Ex. 6.
6. Acceptance of such plea is the equivalent of a conviction under section 1128(i) of the Act.
7. Petitioner's criminal conviction for filing false Medicaid claims is related
to the delivery of an item or
service under Medicaid.
8. The Secretary of HHS has delegated to the I.G. the authority to determine
and impose exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21662 (May 13, 1983).
9. The I.G. was required to impose and direct Petitioner's exclusion for a period of at least five years.
10. The permissive exclusion provisions of section 1128(b) apply to convictions
for offenses other than
those related to the delivery of an item or service under either the Medicare
or Medicaid.
11. The I.G. is under no obligation to institute a permissive exclusion action under section 1128(b).
DISCUSSION
The first statutory requirement for mandatory exclusion pursuant to section
1128(a)(1) of the Act is that the
individual or entity in question be convicted of a criminal offense under federal
or State law. In the present
case, it is undisputed that Petitioner pled guilty to a crime and that his plea
was accepted by the Utah court.
This satisfies the definition of "convicted" within the meaning of
section 1128(i) of the Act.
I find also that the requirement of section 1128(a)(1) that the criminal offense
leading to the conviction be
related to the delivery of an item or service under Medicare or Medicaid has
been satisfied. It is well-
established that financial misconduct directed at these programs, connected
with the delivery of items or
services, constitutes a program-related offense invoking mandatory exclusion.
In particular, filing
fraudulent Medicare or Medicaid claims has been held to constitute clear program-related
misconduct.
Jack W. Greene, DAB 1078 (1990).
It is no defense that the subject individual did not actually deliver an item
or service, as long as common
sense shows his criminal conduct to constitute a link in the established treatment-reimbursement
cycle and
that one of the covered programs was the intended victim of the crime. Niranjana
B. Parikh, M.D., et al.,
DAB 1334 (1992).
To be sure (although he pled guilty to knowingly filing false claims), Petitioner
now contends that he
merely did as he was told by his superiors, that he was ignorant as to the rules
concerning billing for no
show patients, and that it was the office manager who decided whether to bill
Medicaid. This argument,
though, is unavailing. The law does not permit HHS to look behind the fact of
conviction. When an
individual has been convicted of a crime encompassed by section 1128(a)(1),
exclusion is mandatory; such
individual's subsequent claim of innocence is irrelevant. Peter J. Edmonson,
DAB 1330 (1992).
Petitioner argues also that the I.G. should have treated his criminal conduct
as grounds for a permissive
exclusion action. In this regard, although the literal language of the Act may
cause some confusion
between the mandatory exclusion provisions of section 1128(a) and the permissive
exclusions authorized
by section 1128(b), it has long been held that section 1128(a) addresses only
Medicare or Medicaid related
crimes and requires action by HHS. Permissive exclusions, by contrast, can be
based upon a much wider
spectrum of conduct (which may or may not involve crimes against the governement,
and where there
might not be a criminal conviction), and their application is discretionary.
This distinction was central to
the appellate decision rendered by the DAB in Samuel W. Chang, M.D., DAB 1198
(1990), which held
that "the permissive exclusion provisions of section 1128(b) apply to convictions
for offenses other than
those related to the delivery of an item or service under either the Medicare
or Medicaid ... programs."
There is also precedent dealing with the scope of the Secretary's discretion
holding that HHS is under no
obligation to institute a permissive exclusion under section 1128(b), but that
once a person has been
convicted of a program-related criminal offense, exclusion is mandatory. See
e.g., Leon Brown, M.D.,
DAB CR83, aff'd DAB 1208 (1990).
CONCLUSION
Petitioner's conviction requires his exclusion for a period of five years, pursuant to section 1128(a)(1).
____________________________
Joseph K. Riotto
Administrative Law Judge
1. Petitioner and the I.G. submitted briefs and documentary exhibits. I admitted
all of the exhibits into
evidence and refer to them herein as "P. Ex. (number)" or "I.G.
Ex. (number)."