Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
|
IN THE CASE OF | |
Alfredo Rodriguez-Machado, |
DATE: October 20, 2000 |
- v - |
|
The
Inspector General
|
Docket No.C-00-416
Decision No. CR706 |
DECISION | |
By letter dated February 29, 2000, Alfredo Rodriguez-Machado,
(Petitioner), was notified by the Inspector General (I.G.), U.S. Department
of Health and Human Services (DHHS), that he would be excluded for a period
of five years from participation in the Medicare, Medicaid, and all federal
health care programs.(1) The
I.G. explained that the five-year exclusion was mandatory under sections
1128(a)(1) and 1128(c)(3)(B) of the Social Security Act (Act) because
Petitioner had been convicted of a criminal offense in connection with
the delivery of a health care item or service under the Medicare program. Petitioner filed a request for review of the I.G.'s action.
The I.G. moved for summary disposition. In a prehearing conference, the
parties agreed that the issue in this case could be decided by written
submissions. Because I have determined that there are no material and
relevant factual issues in dispute (the only matter to be decided is the
legal significance of the undisputed facts), I have decided the case on
the basis of the parties' written submissions in lieu of an in-person
hearing. Both parties submitted briefs in this matter. The I.G.
submitted four proposed exhibits (I.G. Exs. 1-4). Petitioner did not object
to these exhibits. Petitioner submitted 24 exhibits, which I have marked
as P. Ex. 1-24. P. Exs. 6 and 7, the indictment and criminal conviction
in his case, are duplicates of those exhibits submitted by the I.G., and
I will not accept them into evidence for that reason. The I.G. did not
object to Petitioner's other exhibits which I renumber and accept as P.
Ex. 1-22. I grant the I.G.'s motion for summary disposition. I affirm
the I.G.'s determination to exclude Petitioner from participation in the
Medicare and Medicaid programs for a period of five years.
APPLICABLE LAW Under section 1128(a)(1) of the Act, the Secretary of
DHHS, shall exclude from participation in the Medicare and Medicaid programs
any individual or entity that has been convicted of a criminal offense
related to the delivery of an item or service under Medicare or Medicaid.
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under
section 1128(a)(1) of the Act shall be for a period of at least five years.
PETITIONER'S ARGUMENTS Petitioner contends that he was not guilty of the criminal
conduct for which he has been convicted. Instead, Petitioner asserts that
he pled guilty on the advice of his attorney. Further, Petitioner maintains
that the I.G. acted improperly in having his exclusion begin almost five
years after the date his case first came under investigation.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 1. During the period relevant to this case, Petitioner
was the general manager and principal officer of Ivonyx, Inc. for Puerto
Rico. I.G. Ex. 1. 2. Ivonyx was in the business of providing parenteral
hemodialysis nutrition therapy treatment (treatment) to Medicare beneficiaries.
I.G. Ex. 1. 3. Ivonyx contracted with Farmacia Nueva Modelo (Farmacia),
a company in Puerto Rico, to prepare and dispense for Ivonyx the treatment
for Medicare beneficiaries in plastic bags. Id. 4. Petitioner and Farmacia devised a scheme to defraud
Medicare in which Farmacia would present Petitioner with an invoice for
five units of treatment when in fact only three units of treatment were
provided; Petitioner would, in turn, refer the fraudulent invoice for
five units of treatment to Ivonyx's headquarters which would thereafter
submit a claim to Medicare for five units of treatment; and, as a result,
Medicare paid Ivonyx for two units of treatment that were never prepared
by Farmacia or delivered to Medicare beneficiaries. Id. 5. On December 11, 1996, a Grand Jury Indictment was filed
in the United States District Court, District of Puerto Rico, charging
that Petitioner and Farmacia, in violation of 42 U.S.C. � 1320a-7b(a)(1)
and 18 U.S.C. � 2, aiding and abetting each other, did knowingly, wilfully,
and unlawfully make, or cause to be made, multiple false statements or
representations of material facts in applications for payment from the
Medicare program in that Petitioner and his co-defendants fraudulently
certified to Medicare that parenteral hemodialysis patients were receiving
five weekly bags of treatment when in fact, as Petitioner knew, such statements
were false. Id. 6. On February 9, 1998, Petitioner entered a plea of guilty
to the indictment of false statements or representations for payment under
a federal health care program (Medicare), in violation of 42 U.S.C. �
1320a-7b(a)(1) and the District Court found him guilty thereof. I.G. Ex.
2. 7. As a result of his conviction, Petitioner was sentenced
to a five-month period of incarceration with work release, two years of
supervised probation after release, and a $50 special assessment. I.G.
Ex. 2. 8. Petitioner's guilty plea, the acceptance of such plea
by the District Court, and the entry of a judgment of conviction against
Petitioner by the District Court, constitutes a "conviction" within the
meaning of sections 1128(i)(1) and 1128(i)(3) of the Act. 9. Petitioner's conviction for false statements or representations
for payment under a federal health care program, in violation 42 U.S.C.
� 1320a-7b(a)(1), is related to the delivery of a [health care] item or
service under the Medicare/Medicaid programs within the meaning of section
1128(a)(1) of the Act. 10. The Secretary of DHHS has delegated to the I.G. the
duty to determine and impose exclusions pursuant to section 1128(a)(1)
of the Act. 11. Once an individual has been convicted of a program-related
criminal offense under section 1128(a)(1) of the Act, exclusion is mandatory
under section 1128(c)(3)(B) of the Act. 12. On February 29, 2000, Petitioner was notified by the
I.G. that he was being excluded from participation in the Medicare, Medicaid,
and all federal health care programs for a five-year period, pursuant
to section to section 1128(a)(1) of the Act. 13. The I.G. properly excluded Petitioner, pursuant to
section 1128(a)(1) of the Act, for a period of five years, as required
by the minimum mandatory exclusion provision of section 1128(c)(3)(B)
of the Act. DISCUSSION The first statutory requirement for the imposition of
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. I find that this requirement is met in Petitioner's
case. The term "convicted" is defined in section
1128(i) of the Act. This section provides that an individual or entity
will be convicted of a criminal offense:
This section establishes four alternative definitions
of the term "convicted." An individual or entity need satisfy only one
of the four definitions under section 1128(i) to establish that the individual
or entity has been convicted of a criminal offense within the meaning
of the Act. Petitioner pled guilty and the record shows that the District
Court accepted his plea. Therefore, Petitioner was convicted within the
meaning of section 1128(i)(3). The District Court also entered a judgment
of conviction against Petitioner. Accordingly, Petitioner also was convicted
within the meaning of section 1128(a)(i) of the Act. Next, it is required under section 1128(a)(1) of the Act
that the crime at issue be related to the delivery of a health care item
or service under the Medicare/Medicaid program. The record establishes
that the Petitioner, in pleading guilty to Count 1 of the indictment,
admitted to filing, or causing to be filed, claims against Medicare that
charged for items or services which were never provided. The filing of
fraudulent Medicare and Medicaid claims consistently has been held to
constitute clear program-related misconduct. Alan J. Chernick, D.D.S.,
DAB CR434 (1996) (I.G.'s five-year mandatory exclusion of dentist who
was convicted in state court of filing false claims upheld); see
also Barbara Johnson, D.D.S., DAB CR78 (1990) (I.G.'s five-year
mandatory exclusion of dentist convicted of filing false claims upheld). To determine if an offense is program related, the administrative
law judge (ALJ) must analyze the facts and circumstances underlying the
conviction to determine whether a nexus or common sense connection links
the offense for which a petitioner has been convicted and the delivery
of an health care item or service under a covered program. Berton Siegel,
D.O., DAB No. 1467 (1994). In Petitioner's case, a necessary nexus
links the facts underlying his crime with the delivery of health care
items or services under Medicare. The falsified claims leading to Petitioner's
conviction resulted in his receipt of fraudulent Medicare reimbursement.
In Rosaly Saba Khalil, M.D., DAB CR353 (1995), the ALJ found that
a criminal offense stemming from the fraudulent receipt of reimbursement
checks from Medicaid provided a sufficient nexus between the offense and
the delivery of health care items or services under Medicaid. Additionally,
the ALJ in Khalil held that a nexus may exist "despite the fact
that Petitioner may not have provided items or services to Medicaid recipients
personally or made reimbursement claims for those items or services."
Id. In the present case, the nexus between Petitioner's offenses
and the delivery of health care items or services is firmly established
by his guilty plea to the charge of "false statements or representations
for payment under a Federal Health Care Program" in violation of 42 U.S.C.
� 1320a-7b(a)(1). Petitioner also seeks to challenge the propriety of his
criminal conviction, claiming that he was in fact not guilty of the offense
for which he has been convicted and only pled guilty on advice of counsel.
Petitioner's argument amounts to a collateral attack on his conviction,
which the Departmental Appeals Board has previously held to be an ineffectual
argument in the context of an exclusion appeal as the I.G. and the ALJ
are not permitted to look beyond the fact of conviction. Paul R. Scollo,
D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994);
Peter Edmondson, DAB No. 1330 (1992). In his statement, Petitioner also asserts that it is unfair
that his exclusion did not commence on the date he entered into an agreement
with the Department of Justice acknowledging his role in the criminal
scheme. I find no merit in this claim. The I.G. has the discretion to
determine when to impose an exclusion. Laurence Wynn, M.D., DAB
CR344 (1994), and neither the statute nor the regulations set any specific
deadline for the I.G. to act. Chander Kachoria, DAB No. 1380 (1993).
It is clear that an exclusion must take effect 20 days from the date of
the I.G.'s notice of exclusion. 42 C.F.R. � 1001.2002(b). Consequently,
this exclusion must take effect 20 days after the February 29, 2000 exclusion
letter. Although Petitioner implies that his exclusion should be retroactive,
an ALJ is without authority to change the effective date of an exclusion.
Stanley Karpo, D.P.M., CR356 (1995); Chander Kachoria, supra;
Laurence Wynn, M.D., supra; Samuel W. Chang, M.D.,
DAB No. 1198 (1990). Similarly, the I.G. has no authority to make exclusions
retroactive. Thus, neither the ALJ nor the I.G. can move the effective
date of the exclusion back to Petitioner's date of conviction. See
Karpo, at 12. In Chander Kachoria, supra, there was
a three-year delay between the date of the I.G. initial investigation
and the date when the Petitioner received the exclusion notification from
the I.G. The Petitioner argued that his rights were violated by the length
of time between the conviction and the exclusion letter. The ALJ ruled
however that neither the statute nor the regulations set any specific
deadline for the I.G. to act, once an individual is convicted. Consequently,
I find that the time which has elapsed between Petitioner's conviction
or some earlier point and the receipt of the exclusion letter does not
violate his due process rights.
CONCLUSION Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from the Medicare and Medicaid programs for a period of at least five years because he has been convicted of a criminal offense related to the delivery of a [health care] item or service under the Medicare program. The five-year exclusion is therefore sustained. |
|
JUDGE | |
Joseph K. Riotto Administrative Law Judge |
|
FOOTNOTES | |
1. In this decision, I use the term "Medicaid" to include any State health care programs which receives federal funds as defined by section 1128(h) of the Social Security Act. | |