$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Michael Fesler,
Petitioner,
- v. -
The Inspector General.
DATE: August 22, 1995
Docket No. C-95-066
Decision No. CR388
DECISION
By letter dated January 27, 1995, Michael Fesler, the Petitioner
herein, was notified by the Inspector General (I.G.), of the United
States 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 program and from participation in the
the State health care programs described in section 1128(h) of the
Social Security Act (Act), which are referred to herein as
"Medicaid." The I.G.'s rationale was that exclusion, for at least
five years, is mandated by 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.
Petitioner filed a timely request for review of the I.G.'s action
by an an administrative law judge (ALJ) of the Departmental Appeals
Board (DAB). The I.G. moved for summary disposition.
Because I determined that there are no facts of decisional
significance genuinely in dispute, and that the only matters to be
decided are the legal implications of the undisputed facts, I have
decided the case on the basis of the parties' written submissions.
I conclude that Petitioner is subject to the minimum mandatory
exclusion provisions of sections 1128(a)(1) and 1128(c)(3)(B) of
the Act, and affirm the I.G.'s determination to exclude Petitioner
from participation in Medicare and Medicaid for a period of five
years.
PETITIONER'S ARGUMENT
Petitioner contends that the I.G. does not have the authority to
exclude Petitioner from Medicare and Medicaid, because an agent of
the United States (U.S.) released Petitioner from any civil action
or penalty arising from the claims which he filed for Medicare
reimbursement. P. Br. at 1.
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLs) 1/
1. During the period relevant to this case, Petitioner was a
provider of ambulance services in the State of Arkansas. I.G. Exs.
2 - 6; P. Ex. 1.
2. In 1994, the U.S. Department of Justice (DOJ) brought a civil
action against Petitioner, pursuant to the False Claims Act (31
U.S.C. 3729 et. seq.). I.G. Exs. 2, 3; P. Ex. 1.
3. The DOJ alleged that, during the period January 7, 1991 to
January 6, 1993, Petitioner had submitted claims for reimbursement
from Medicaid and Medicare covering services that Petitioner had
not provided as he had claimed. I.G. Exs. 2, 3; P. Ex. 1.
4. Petitioner and the DOJ entered into an agreement on March 4,
1994 to settle the civil action. I.G. Exs. 2, 3; P. Ex. 1.
5. The settlement agreement provided that Petitioner would make
restitution to the government in the amount of $14,168. I.G. Exs.
2, 3; P. Ex. 1.
6. The settlement agreement further provided that the DOJ released
Petitioner from any claims or actions it might have against him
under the False Claims Act, or the Civil Monetary Penalties Law (42
U.S.C. 1320a-7a), or from any other claims, actions, demands, or
causes of action whatsoever arising from the requests by Petitioner
for reimbursement under the provisions of Titles XVIII and XIX of
the Act, for services purportedly rendered from January 7, 1991
through January 6, 1993. I.G. Exs. 2, 3; P. Ex. 1.
7. On April 22, 1994, a criminal information was filed aginst
Petitioner in the U.S. District Court for the Eastern District of
Arkansas charging him with seven counts of converting government
property to his own use by submitting false claims for
reimbursement to the Medicaid/Medicare programs. The events
underlying these charges took place on or about January 16, 1993
(Count I), December 3, 1992 (Count II), January 14, 1993 (Count
III), December 28, 1992 (Count IV), December 10, 1992 (Count V),
December 15, 1992 (Count VI), and December 10, 1992 (Count VII).
I.G. Ex. 4.
8. Petitioner pled guilty to counts I, II, III, IV,
and V. I.G. Ex. 5.
9. The district court accepted the plea, dismissed the remaining
charges, and issued a formal judgment declaring Petitioner to be
guilty of conversion of government property. I.G. Ex. 6.
10. Petitioner was sentenced to two years of probation, fined
$1000, and ordered to perform 100 hours of community service. I.G.
Ex. 6.
11. A judgment of conviction was entered against Petitioner on May
23, 1994. I.G. Ex. 6.
12. The entry of Petitioner's judgment of conviction constitutes a
conviction within the meaning of section 1128(i)(1) of the Act.
Section 1128(i)(1) of the Act; FFCL 11.
13. The judgment of conviction entered against Petitioner states
that Petitioner is "adjudged guilty" of the counts to which he pled
guilty. I.G. Ex. 6.
14. The adjudication contained in the judgment of conviction
constitutes a finding of guilt against Petitioner within the
meaning of section 1128(i)(2) of the Act. Section 1128(i)(2) of
the Act; FFCL 13.
15. The district court which convicted Petitioner "accepted" his
plea, within the meaning of section 1128(i)(3) of the Act. Section
1128(i)(3) of the Act; FFCLs 9, 10, 11.
16. I find that Petitioner was "convicted" under the three separate
criteria of sections 1128(i)(1), (2), and (3). FFCLs 11-15.
17. Petitioner's conviction of five counts of conversion of U.S.
property were all based on false claims by Petitioner to Medicare
for payment for ambulance services. I.G. Ex. 4.
18. Filing a false or fraudulent claim for payment is "related to
the delivery of a health care item or service" under the mandatory
exclusion provision of section 1128(a)(1). Jack W. Greene, DAB
CR19 (1989), aff'd DAB 1078 (1989), aff'd sub nom. Greene v.
Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990).
19. Petitioner's conviction is related to the delivery of an item
or service under the Medicare program within the meaning of section
1128(a)(1) of the Act. FFCLS 11-18.
20. Section 1128(c)(3)(B) of the Act and the applicable regulation
at 42 C.F.R. 1001.102(a) require that an exclusion imposed under
section 1128(a)(1) be for a mandatory minimum period of at least
five years. Section 1128(c)(3)(B) of the Act; 42 C.F.R.
1001.102(a) (1993).
21. Neither the ALJ nor the I.G. is authorized to reduce the
five-year mandatory minimum exclusion. Maximo Levin, DAB CR343
(1994).
22. Petitioner's five-year exclusion is deemed reasonable as a
matter of law. FFCLs 20-21.
23. The release clause of the settlement agreement which Petitioner
entered into with the DOJ, specifically states that Petitioner
would be released from any claims or causes of action that the U.S.
may have against Petitioner, "under the False Claims Act . . . and
the Civil Monetary Penalties Law." I.G. Exs. 2, 3; P. Ex. 1.
24. The mandatory exclusion provision of section 1128(a) of the Act
is not included within the scope of the False Claims Act or the
Civil Monetary Penalties Law. See Section 1128(a) of the Act.
25. The settlement agreement releases Petitioner from any claims or
causes of action arising from payments requested by or amounts
received by Petitioner from Medicare and Medicaid. I.G. Exs. 2, 3;
P. Ex. 1.
26. Petitioner's exclusion under section 1128(a)(1) arose from the
fact of his conviction and the fact that his conviction is
program-related. I.G. Ex. 1.
27. I find that Petitioner's exclusion was not the type of action
which the parties intended to include within the scope of the
release language of the settlement agreement. FFCLs 23 - 26.
28. The settlement agreement released Petitioner from any causes of
action arising from his claims for, and receipts of Medicaid or
Medicare payments, "for services provided by [Petitioner] from
January 7, 1991, through January 6, 1993." I.G. Ex. 3; P. Ex. 1.
29. One of the counts to which Petitioner pled guilty, (Count I),
charges Petitioner with criminal conversion of U.S. property "on or
about the 16th day of January, 1993." I.G. Ex. 4 at 1.
30. The conduct which led to the charge in Count I was committed
after the January 6, 1993 date set out in the settlement agreement,
and therefore, is outside the scope of the agreement. FFCLs 28 -
29.
31. I find that Petitioner's exclusion does not fall within the
purview of the release clause of the settlement agreement. FFCLs
23 - 30.
32. The I.G. was authorized to exclude Petitioner from the Medicare
and Medicaid programs for a period of at least five years, pursuant
to sections 1128(a)(1) and 1128(c)(3)(B) of the Act. FFCLs 1 - 31.
DISCUSSION
I. The I.G. was authorized to exclude Petitioner pursuant to
section 1128(a)(1) of the Act.
The I.G. is authorized to exclude an individual or entity from
participation in Medicare and Medicaid pursuant to section
1128(a)(1) of the Act where two elements are present: (1) the
individual or entity has been "convicted" of a criminal offense,
within the meaning of section 1128(i); and (2) the conviction is
related to the delivery of an item or service under Medicare or
Medicaid. In the present case, the I.G. has proven that Petitioner
was "convicted" under the three separate criteria of sections
1128(i)(1), (2), and (3), and that Petitioner was convicted of a
program-related crime.
Petitioner was charged, by federal information, with seven
misdemeanor counts of conversion of U.S. property in violation of
18 U.S.C. 641. I.G. Ex. 4. The information alleged that
Petitioner had converted U.S. money and property through claims to
Medicare for reimbursement of ambulatory services provided by
Petitioner. Id. Petitioner pled guilty to five counts of the
misdemeanor information (Counts I through V), and was adjudged
guilty of the counts to which he pled guilty, by the U.S.
Magistrate Judge of the U.S. District Court for the Eastern
District of Arkansas. I.G. Ex. 5, 6. Petitioner was sentenced to
two years of probation, fined $1000, and ordered to perform 100
hours of community service. I.G. Ex. 6.
Under section 1128(i)(1) of the Act, an individual or entity is
determined to have been convicted "when a judgement of conviction
has been entered against the individual or entity by a Federal,
State, or local court." I find that a "judgment of conviction"
was
entered against Petitioner within the meaning of section 1128(i),
since the corrected judgment entered against Petitioner states that
he was "adjudged guilty" of the counts to which he pled guilty.
I.G. Ex. 6. Moreover, the adjudication of Petitioner guilt stated
in the corrected judgment constitutes a finding of guilt against
Petitioner within the meaning of section 1128(i)(2) of the Act.
Finally, Petitioner's plea of guilty and the court's acceptance of
the plea also constitute a "conviction" within the meaning of
section 1128(i)(3) of the Act. A plea is "accepted" within the
meaning of section 1128(i)(3) whenever a party offers the plea and
the court consents to receive the plea in disposing of the pending
criminal matter. Maximo Levin, M.D., DAB CR343 (1994); Lila M.
Nevrekar, M.D., DAB CR319 (1994). The federal court in
Petitioner's criminal case disposed of Petitioner's criminal matter
when the presiding magistrate sentenced Petitioner to a term of
probation, a fine, and the performance of 100 hours of community
service. Thus, the federal court "accepted" Petitioner's plea
within the meaning of section 1128(i)(3) of the Act.
I find also that Petitioner was convicted of a criminal offense
related to the delivery of a Medicare service. In each of the five
counts at issue, Petitioner pled guilty to "knowingly convert[ing]
to his own use money and property belonging to the United States
and the Department of Health and Human Services . . . by and
through a claim to Medicare for reimbursement for ambulance
services." I.G. Ex. 4. Petitioner's conviction of five counts of
conversion of U.S. property were all based on false claims by
Petitioner to Medicare for payment for ambulance services. It is
well- established that filing a false or fraudulent claim for
payment is "related to the delivery of a health care item or
service" under the mandatory exclusion provisions of section
1128(a). Jack W. Greene, DAB CR19 (1989), aff'd DAB 1078 (1989),
aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn.
1990). Thus, Petitioner's conviction is related to the delivery of
an item or service under the Medicare program within the meaning of
section 1128(a)(1) of the Act.
II. Petitioner must be excluded for the mandatory minimum
period of five years.
Section 1128(c)(3)(B) of the Act requires that an exclusion imposed
under section 1128(a)(1) be for a mandatory minimum period of at
least five years. Chris Mark Spierer, DAB CR360 (1995); Pamela
Gail Hill, DAB CR347 (1994). This five-year mandatory minimum
requirement is also codified at 42 C.F.R. 1001.102(a). Neither
the ALJ nor the I.G. is authorized to reduce the five-year
mandatory minimum exclusion. Maximo Levin, DAB CR343 (1994).
Since the I.G. excluded Petitioner pursuant to section 1128(a)(1),
the five-year exclusion is deemed reasonable as a matter of law.
III. The I.G. is not precluded from excluding Petitioner
under section 1128(a) of the Act.
Petitioner's argument that the I.G. does not have the authority to
exclude him, by reason of the settlement agreement which he entered
into with the DOJ, is without merit. Petitioner entered into a
settlement agreement with the DOJ on March 4, 1994, to resolve the
issue of Petitioner's claims for reimbursement for ambulance
services. I.G. Ex. 3; P. Ex. 1. The U.S. alleged that Petitioner
submitted claims for reimbursement for services which were not
provided as claimed, and which constituted false claims under the
False Claims Act, 31 U.S.C. 3729 et seq. I.G. Ex. 3 at 1, 2.
In order to avoid litigation, Petitioner agreed to settle. As part
of the settlement agreement, Petitioner agreed to pay the U.S. the
sum of $14,168. Id. In consideration of the settlement amount,
the U.S., through an agent of the DOJ, agreed to release Petitioner
and his spouse
from --
any claims, actions, demands, or causes of action they may
have against defendant under the False Claims Act, 31 U.S.C.
3729 et seq., and the Civil Money Penalties Law, 42 U.S.C., Sec.
1320a-7a, or any other claims, actions, or causes of action
whatsoever, other than any potential IRS claims, arising from the
claims filed by defendant for reimbursement, or request for payment
made by defendant or amounts received by defendant as reimbursement
under the provision of Title XVIII and XIX of the Social Security
Act for services provided by defendant from January 7, 1991,
through January 6, 1993.
I.G. Ex. 3 at 2-3. In April of 1994, Petitioner was charged by a
federal misdemeanor information with seven counts of conversion of
money and property of the U.S. I.G. Ex. 4.
I find that the express terms of the release language cited above
do not apply to Petitioner's exclusion. The release specifically
states that Petitioner would be released from any claims or causes
of action that the U.S. may have against Petitioner "under the
False Claims Act . . . and the Civil Money Penalties Law." I.G.
Ex. 3 at 2, 3; P. Ex. 1 at 2, 3. The mandatory exclusion provision
of section 1128(a) of the Act is not included within the scope of
the False Claims Act or the Civil Monetary Penalties Law. 2/
Furthermore, the settlement agreement releases Petitioner from any
claims or causes of action arising from payments requested by, or
amounts received by Petitioner, from Medicare and Medicaid.
However, Petitioner's exclusion under section 1128(a)(1) arose
solely from his conviction and the fact that his conviction was
program-related. I.G. Ex. 1. The I.G.'s authority to exclude
an individual under section 1128(a)(1) derives from the fact of the
individual's criminal conviction, and not from the conduct which
culminated in the conviction. Rosaly Saba Khalil, M.D., DAB CR353
(1995) (citing Peter J. Edmonson, DAB 1330 (1992)). Thus, it is
simply the fact of the conviction which provides the I.G. with the
authority to exclude the individual or entity as a means of
protecting program beneficiaries and recipients. Id. It is for
these reasons that an ALJ does not have the authority to look
behind the actions which led to the conviction. Id. I find,
therefore, that Petitioner's exclusion derived solely from his
conviction of a program-related crime, and was not the type of
action which the parties intended to include within the scope of
the release language of the settlement agreement.
Moreover, Petitioner was convicted of a criminal offense which was
expressly not covered by the terms of the settlement agreement.
The settlement agreement released Petitioner from actions and
causes of action arising from his claims for and receipt of
Medicaid or Medicare payments "for services provided by
[Petitioner] from January 7, 1991, through January 6, 1993." I.G.
Ex. 3 at 3; P. Ex. 1 at 3. As I stated earlier, Petitioner pled
guilty to and was convicted of Counts I through V of a seven-count
information. I.G. Exs. 5, 6. Count I charges Petitioner with
criminal conversion of U.S. property "on or about the 16th day of
January, 1993." I.G. Ex. 4 at 1. Thus, the conduct which led to
the charge in Count I was committed after the January 6, 1993 date
set out in the settlement agreement, and therefore, is outside the
scope of the agreement.
I find, therefore, that the settlement agreement which Petitioner
entered into with an agent of the DOJ is immaterial to the issue of
whether the I.G. had the authority to exclude Petitioner under
section 1128(a). I find that Petitioner's exclusion does not fall
within the purview of the release clause of the settlement
agreement. Furthermore, I find that Petitioner was "convicted,"
within the meaning of section 1128(i), of a program-related crime,
and that his exclusion was mandatory pursuant to section 1128(a).
CONCLUSION
The I.G. was authorized to exclude Petitioner from the Medicare and
Medicaid programs for a period of at least five years, pursuant to
sections 1128(a)(1) and 1128(c)(3)(B) of the Act.
The five-year exclusion is, therefore, sustained.
________________________
Joseph K. Riotto
Administrative Law Judge
1. The I.G. submitted five exhibits and an attachment to I.G.
Ex. 2 which I have marked as an exhibit. Accordingly, I have
redesignated the attachment as I.G. Ex. 3, and renumbered the
exhibits which were originally designated as I.G. Exs. 3 - 5 to be
I.G. Exs. 4 - 6. I cite the I.G.'s exhibits as "I.G. Ex.(s).
(number) at (page)." I admit into evidence I.G. Exs. 1 - 6.
Petitioner offered one exhibit which I cite as "P. Ex. 1." I admit
P. Ex. 1 into evidence. I cite the I.G.'s brief as "I.G. Br. at
(page)." I cite Petitioner's response as "P. Br. at (page)."
2. The permissive exclusion provision of section 1128(b)(7),
however, specifically refers to the Civil Monetary Penalties Law.
Thus, it appears that the parties intended to release Petitioner
from any causes of action arising under this exclusionary
authority. Since Petitioner was excluded under section 1128(a),
Petitioner's exclusion falls outside the purview of the release
clause.