DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of: Maurice Labbe, Petitioner,
- v. -
The Inspector General.
Date: August 5, 1997
Docket No. C-97-212
Decision No. CR488
DECISION
I sustain the determination of the Inspector General
(I.G.) to exclude Petitioner, Maurice Labbe, from
participating in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to
States for Social Services programs (Medicare and
Medicaid), until Petitioner obtains a valid license to
practice medicine or provide health care in the State of
Maine. I base my decision on evidence which proves that
Petitioner surrendered his Nursing Home Administrator's
license during the pendency in that State of a formal
disciplinary proceeding related to his professional
competence, professional performance, or financial
integrity. I further base my decision on evidence which
proves that Petitioner lost such license, and the right
to apply for or renew it, for reasons bearing on his
professional competence, professional performance, or
financial integrity. Additionally, I find that when an
exclusion imposed by the I.G., as here, is concurrent
with the remedy imposed by a State licensing authority,
then no issue of reasonableness exists and such an
exclusion is mandated by law.
BACKGROUND
By letter dated January 13, 1997, the I.G. notified
Petitioner that he was being excluded from participating
in the Medicare and Medicaid programs. The I.G.
explained that Petitioner's exclusion was authorized
under section 1128(b)(4) of the Social Security Act (Act)
because Petitioner's "license to practice medicine or
provide health care in the State of Maine was revoked,
suspended, or otherwise lost or was surrendered while a
formal disciplinary proceeding was pending before the
licensing authority for reasons bearing on [his]
professional competence, professional performance, or
financial integrity." Additionally, the I.G. advised
Petitioner that his exclusion would remain in effect
until he obtained a valid license to practice medicine or
provide health care in the State of Maine.
Petitioner requested a hearing and the case was assigned
to me for decision. The parties agreed that the case
could be decided based on their written submissions, and
that an in-person hearing was not necessary. The parties
have each submitted written arguments and proposed
exhibits.
The I.G. submitted six proposed exhibits (I.G. Ex. 1-6).
Petitioner did not object to these exhibits. Petitioner
submitted two exhibits labelled Ex. A and B with his
February 24, 1997 request for a hearing. I have re-
marked these exhibits as P. Ex. 1 and 2. Petitioner also
submitted six exhibits with his response (P. Br.) to the
I.G.'s brief in support of exclusion (I.G. Br.). I have
re-marked these exhibits (originally designated P. Ex. 1-
6) as P. Ex. 3-8. Petitioner submitted also the
affidavit of Peter D. Lowe. I have designated Mr. Lowe's
affidavit as P. Ex. 9. The I.G. did not object to
Petitioner's exhibits or to Mr. Lowe's affidavit. Thus,
in the absence of objection, I am admitting I.G. Ex. 1-6
and P. Ex. 1-9 into evidence in this case. I base my
decision in this case on these exhibits, the applicable
law, and the arguments of the parties.
APPLICABLE LAW
Pursuant to section 1128(b)(4) of the Act, the I.G. may
exclude "[a]ny individual or entity - (A) whose license
to provide health care has been revoked or suspended by
any State licensing authority, or who otherwise lost such
a license or the right to apply for or renew such a
license, for reasons bearing on the individual's or
entity's professional competence, professional
performance, or financial integrity, or (B) who
surrendered such a license while a formal disciplinary
proceeding was pending before such an authority and the
proceeding concerned the individual's or entity's
professional competence, professional performance, or
financial integrity."
Pursuant to section 1128(c)(3)(E) of the Act, as amended
by section 212 of the Health Insurance Portability and
Accountability Act of 1996 (Pub. L. 104-191), the length
of an exclusion under section 1128(b)(4) "shall not be
less than the period during which the individual's or
entity's license to provide health care is revoked,
suspended, or surrendered, or the individual or the
entity is excluded or suspended from a Federal or State
health care program." Prior to 1996, the Act provided no
criteria for establishing the length of exclusions for
individuals or entities excluded pursuant to section
1128(b)(4). The 1996 amendments require, at section
1128(c)(3)(E), that an individual or entity who is
excluded under section 1128(b)(4) be excluded for not
less than the period during which the individual's or
entity's license to provide health care is revoked,
suspended, or surrendered. Under the 1996 amendments, no
issue of reasonableness exists where the exclusion
imposed by the I.G. is concurrent with the loss,
suspension, or revocation of a State license. A
concurrent exclusion, as in Petitioner's case, is the
mandated minimum required by law. 1/
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCL)
1. At all times relevant to this case, Petitioner was
the owner of Medical Care Management Corporation, which
owned and operated Russell Park Manor, a nursing home
licensed in the State of Maine. I.G. Br. 2, para. 1; P.
Br. 2, fn. 1.
2. Petitioner held the Nursing Home Administrator's
license for Russell Park Manor. I.G. Br. 2, para. 2; P.
Br. 2, fn. 1.
3. As Administrator, Petitioner was responsible for the
management and operation of Russell Park Manor. I.G. Br.
2, para. 3; P. Br. 2, fn. 1.
4. Following a survey of Russell Park Manor completed on
August 4, 1995, the Maine Department of Human Services
("DHS") issued a statement of deficiencies report (DHS
survey report) citing a number of violations at Russell
Park Manor involving patient care. I.G. Ex. 1; I.G. Br.
2, para. 4; P. Br. 2, fn. 1.
5. On August 4, 1995, in a case brought by DHS against
the owners and operators of Russell Park Manor, the
Superior Court of Androscoggin County, Maine (Superior
Court), placed Russell Park Manor into receivership.
I.G. Ex. 2.
6. In settlement of the DHS action, Petitioner, as
reflected in a Superior Court Consent Order dated
September 6, 1995, agreed to surrender his Maine Nursing
Home Administrator's license and not to re-apply for an
Administrator's license in the State of Maine. I.G. Ex.
2.
7. The Maine Nursing Home Administrators Board (Board)
received a copy of the August 4, 1995 DHS survey report.
I.G. Ex. 1; I.G. Ex. 3 at 1; I.G. Ex. 4 at 1.
8. The Board notified Petitioner that at its September
20, 1995 meeting, it had "found that reasonable grounds
exist to believe that (Petitioner) may have violated
Board statutes or rules which govern (his) license as a
Nursing Home Administrator." I.G. Ex. 3.
9. By letter dated September 20, 1995, the Board agreed
to allow Petitioner to resolve the complaint by entering
into a consent agreement whereby he would agree to
surrender his Nursing Home Administrator's license and
not apply for any presently offered or future offered
category of license in the State of Maine. I.G. Ex. 3;
see I.G. Ex. 6.
10. In its September 20, 1995 letter, the Board further
stated that it would place the issue of Petitioner's
alleged violations on the agenda of its next meeting for
"appropriate action by the Board." I.G. Ex. 3; see I.G.
Ex. 6.
11. On November 14, 1995, Petitioner entered into a
Consent Agreement with the Board whereby he agreed to
indefinitely surrender his license and not apply for
future licensure. I.G. Ex. 4.
12. On January 13, 1997, the I.G. notified Petitioner of
his indefinite exclusion from participation in the
Medicare and Medicaid programs. I.G. Ex. 5.
13. Section 1128(b)(4)(A) of the Act authorizes the I.G.
to exclude an individual whose license to provide health
care has been revoked or suspended by any State licensing
authority, or who otherwise lost such a license or the
right to apply for or renew such a license, for reasons
bearing on the individual's professional competence,
professional performance, or financial integrity.
14. Section 1128(b)(4)(B) of the Act authorizes the I.G.
to exclude an individual who surrenders his or her
license to provide health care during the pendency of
formal disciplinary proceedings by a State's licensing
authority which concern the individual's professional
competence, professional performance, or financial
integrity.
15. The consent agreement Petitioner entered into with
the Board resulted in the loss of his right to apply for
or renew his Nursing Home Administrator's license, within
the scope of section 1128(b)(4)(A) of the Act. I.G. Ex.
4; See I.G. Br. 4, para. 13; P. Br. 2, fn. 1.
16. Petitioner surrendered his Nursing Home
Administrator's license during the pendency of a formal
disciplinary proceeding, within the scope of section
1128(b)(4)(B) of the Act. I.G. Ex. 3, 4, 6.
17. Petitioner's loss or surrender of his Nursing Home
Administrator's license was for reasons bearing on or
concerning his professional competence, professional
performance, or financial integrity, within the scope of
section 1128(b)(4) of the Act. FFCL 1-16.
18. The I.G. was authorized to exclude Petitioner
pursuant to sections 1128(b)(4)(A) and 1128(b)(4)(B) of
the Act. FFCL 1 - 17.
19. Where an exclusion is imposed pursuant to section
1128(b)(4) of the Act, the period of the exclusion shall
not be less than the period during which the individual's
license to provide health care is revoked, suspended, or
surrendered. Act, section 1128(c)(3)(E).
20. When an exclusion is imposed pursuant to section
1128(b)(4) of the Act and the period of exclusion is
concurrent with the loss, suspension, revocation, or
surrender of a State license, then no issue of
reasonableness concerning the length of the exclusion
exists.
21. The exclusion imposed by the I.G. against
Petitioner, which will remain in effect until Petitioner
obtains a valid license to practice medicine or provide
health care in the State of Maine, was authorized under
sections 1128(b)(4) and 1128(c)(3)(E) of the Act.
PETITIONER'S ARGUMENTS
Petitioner's primary argument is that he did not
surrender his license as specified in section 1128(b)(4)
of the Act. Rather, he argues that he relinquished his
license prior to the institution of formal disciplinary
proceedings against him. He asserts that he did this on
August 28, 1995, before he received notification of the
September 20, 1995 Board proceedings against him.
Petitioner also contends that he relinquished his license
to negotiate a settlement of litigation with the State of
Maine, and that he did not admit any of the allegations
made against him in the DHS survey report. Thus,
Petitioner argues that his license was not surrendered or
lost for reasons bearing on his professional competence,
professional performance, or financial integrity.
Petitioner also contends that for the I.G. to now take
action against him is against the intent of the
settlement agreement entered into between his company and
DHS.
DISCUSSION
The record in this case establishes that Petitioner
surrendered his Nursing Home Administrator's license
while a formal disciplinary proceeding was pending before
the Board which related to his professional performance,
professional competence, or financial integrity. I
specifically reject Petitioner's contention that he
voluntarily relinquished his license prior to such
disciplinary proceeding. Such contention does not
comport with the facts in his case. Petitioner was the
licensed Nursing Home Administrator of the Russell Park
Manor Nursing Home. In 1995, DHS conducted a survey of
the facility and found its operation deficient in a
number of areas, including the quality of patient care.
DHS then generated the August 4, 1995 survey report.
I.G. Ex. 1.
The DHS survey report was forwarded to the Board. I.G.
Ex. 1, 3, 4. The allegations raised in the DHS survey
report relate to Petitioner's professional performance
and competence as they pertain to his ability to properly
manage Russell Park Manor. The same DHS survey report
was relied upon in the Superior Court action filed by DHS
against Petitioner's medical management company. This
action was resolved through a Consent Order, in which
Petitioner agreed to permanently relinquish his State of
Maine administrator's license and his company agreed to
cease managing Russell Park Manor. I.G. Ex. 2.
During its September 20, 1995 meeting, based on the DHS
survey report and the Superior Court Consent Order, the
Board found reasonable grounds to believe Petitioner may
have violated its rules or statutes governing his license
as a Nursing Home Administrator. I.G. Ex. 3, 6. The
Board sent a letter dated September 20, 1995, to
Petitioner informing him of its findings and proposed
action. I.G. Ex. 3. This letter indicated that the
Board had begun a formal investigation of the allegations
against Petitioner and offered him the opportunity to
enter into a consent agreement with it whereby he would
permanently surrender his license and not apply for
future licensure. On November 14, 1995, Petitioner
signed such agreement, which was accepted by the Board on
November 29, 1995. I.G. Ex. 4.
The decisions of Departmental Appeals Board (DAB)
administrative law judges (ALJ) establish that a
chronology such as occurred in Petitioner's case
constitutes a license surrender within the scope of
section 1128(b)(4)(B) of the Act. An ALJ found the
I.G.'s indefinite exclusion of a provider who violated
section 1128(b)(4) to be reasonable in Dillard P.
Enright, DAB CR138 (1991). In that case, the petitioner
alleged that his license was not surrendered while a
formal disciplinary proceeding was pending. Enright
involved a petitioner who surrendered his nursing license
to a Nursing Board before formal findings were made as to
the allegations in a complaint filed against him. In
this decision, the ALJ found that the petitioner's
license surrender at an informal meeting was a surrender
while a formal disciplinary proceeding was pending. The
ALJ found that "[i]f Petitioner had not surrendered his
license, the Nursing Board would have had a
responsibility to resolve the issues raised by the claims
. . . The Nursing Board, in the absence of Petitioner's
surrender of his license, was fully prepared to go
forward." Enright, at 9. Likewise, in this case, the
Board was prepared to go forward, as Petitioner's failure
to enter into a consent agreement would result in the
matter being "placed on the agenda of the next meeting of
the Board . . . for appropriate action." I.G. Ex. 3.
In John W. Foderick, M.D., DAB CR43 (1989), an ALJ found
that legislative history defines a formal disciplinary
proceeding as "a license proceeding which places a
party's license in jeopardy and which provides that party
with an opportunity to defend against charges which might
result in license suspension or revocation." Foderick at
6. This decision further states that "[t]he law presumes
that an individual or entity who surrenders a health care
license in the face of charges, and in the circumstance
where he has the opportunity to defend himself, is as
likely to be untrustworthy as the individual or entity
who loses a license after litigating the issue . . ." Id.
at 7.
In the present case, Petitioner surrendered his license
in the wake of the Board's investigation of a complaint
filed against him. I.G. Ex. 3, 4. A letter from the
Board dated September 20, 1995, notified Petitioner of
the complaint and provided him with the opportunity to
respond. I.G. Ex. 3. If Petitioner had not surrendered
his license, the Board would have continued its
investigation of the allegations which could have led to
sanctions including license suspension or revocation.
Petitioner was subject to the jurisdiction of the Board,
was notified of the complaint pending against him, and
was afforded the opportunity to respond to the complaint.
I.G. Ex. 3. Prior to the completion of formal
proceedings, Petitioner entered into a consent agreement
with the Board. I.G. Ex. 4. Petitioner agreed to
surrender physical possession of his wallet and wall
licenses to the Board. Petitioner also agreed that the
surrender of his licenses would be indefinite, and that
he would not be granted licensure in any existing or
future classification governed by the Board. In
exchange, the Board agreed to make no formal findings as
to the DHS survey report and to refrain from issuing any
media statements regarding Petitioner or his management
company. I.G. Ex. 4.
Contrary to Petitioner's assertions, the chronology in
his case does not support his claim that he voluntarily
relinquished his license prior to commencement of formal
disciplinary proceedings. Petitioner relies on his
letter to the Board, dated August 28, 1995, to support
his claim that he voluntarily relinquished his license.
However, in such correspondence, he merely states that he
wished to "relinquish my State of Maine Administrator's
license effective immediately." P. Ex. 2. He did not,
in fact, surrender such license until he entered into the
consent agreement with the Board on November 14, 1995, at
which time he physically surrendered his license as
required by the Board. This action, however, was in
direct response to the Board complaint dated September
20, 1995. I.G. Ex. 3. Correspondence from Board
personnel also shows that the Board did not view
Petitioner's August 28, 1995 correspondence as
constituting a surrender of his license. In a letter
dated September 18, 1995, acknowledging receipt of
Petitioner's August 28, 1995 letter, Gregory Girardin,
Case Compliance Coordinator of the Maine Division of
Licensing and Enforcement, states that he would present
Petitioner's request to the Board at its next meeting, an
action which, in fact, resulted in the issuance of the
September 20, 1995 complaint. P. Ex. 7. From such
response, it can be concluded that the Board did not view
Petitioner's action as sufficient, without more, to
constitute a relinquishment. Indeed, the Board issued a
formal complaint on September 20, 1995. I.G. Ex. 3, 6.
As an alternative ground for sustaining the I.G., I note
that the agreement entered into by Petitioner with the
Board resulted in the loss of his license and precludes
him from ever applying for a license in the State of
Maine. I.G. Ex. 4. I therefore find that this agreement
also equates to a loss of a license or right to apply for
or renew a license under section 1128(b)(4)(A) of the
Act.
Petitioner also contends that his license was not lost or
surrendered for reasons bearing on or concerning his
professional competence, professional performance or
financial integrity. I note that the DHS survey report
of Russell Park Manor, which was completed on August 4,
1995, was conducted while that facility was under
Petitioner's ownership and operation, and cited
deficiencies which, if sustained, would constitute
mismanagement or poor quality of care at the facility
(examples of which, among many other cited deficiencies,
include deficiencies regarding the protection of resident
funds, where the Administrator's written, signed
statement of self-assurance did not meet the requirements
of either a purchase of a security bond or an acceptable
alternative to a security bond; as well as the 19
separate allegations based on surveyor observations that
residents at the facility did not receive care in a
manner and in an environment that maintained or enhanced
each resident's dignity). I.G. Ex. 1. The deficiencies
cited in the survey report are directly related to
Petitioner's responsibilities as a Nursing Home
Administrator, as they relate to the management and care
of the residents of Russell Park Manor. It was this
survey report upon which the Superior Court and Board
actions were based. It is not necessary under the Act
that the I.G. prove that the allegations in the survey
report are true. It is necessary only that Petitioner's
license was lost or surrendered for reasons bearing on or
concerning his professional competence, performance, or
financial integrity. I agree with the I.G. (I.G.
Response to Petitioner's Brief at 8) that it can hardly
be disputed that charges against a Nursing Home
Administrator regarding management of a nursing home
facility (such as those made in the DHS survey report)
directly relate to that administrator's or that
facility's professional competence or performance (and
here, with regard to the protection of resident funds,
perhaps Petitioner's financial integrity as well). Thus,
I conclude that the loss or surrender of Petitioner's
license was for reasons bearing on or concerning his
professional competence, professional performance, or
financial integrity.
Finally, Petitioner contends that for the I.G. to take
action against him is against the intent of the
settlement entered into between DHS and Medical Care
Management. I.G. Ex. 2. An examination of the Superior
Court Consent Order, however, shows no merit to this
claim. This agreement specifically provides that
Petitioner relinquish and not be allowed to reapply for
his Nursing Home Administrator's license. The I.G.'s
action in excluding Petitioner until he regains his Maine
license is entirely consistent with this intent.
CONCLUSION
I conclude that the I.G. was authorized to exclude
Petitioner pursuant to sections 1128(b)(4)(A) and (B) of
the Act. I conclude also that the term of exclusion
imposed by the I.G. is mandated by section 1128(c)(3)(E)
of the Act.
Joseph K. Riotto
Administrative Law Judge
* * * Footnotes * * *
1. An issue of reasonableness will arise only
if the I.G. imposes an exclusion for a longer term than
the sanction which has been imposed by a State licensing
authority. In that event, the administrative law judge
will hear and decide the issue of whether the period of
exclusion which extends beyond the concurrent exclusion
term is reasonable.