Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Joseph Picciotti, D.P.M., |
DATE: May 1, 2001 |
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The
Inspector General
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Docket No.C-00-892
Decision No. CR769 |
DECISION | |
DECISION I conclude that Joseph Picciotti, D.P.M. (Petitioner)
is subject to a 10-year exclusion from participation in Medicare, Medicaid,
and all other federally funded health care programs. Therefore, I affirm
the Inspector General's (I.G.'s) determination. Additionally, I conclude
that a 10-year exclusion is not unreasonable. I base my decision on the
documentary evidence, the applicable law and regulations, and the arguments
of the parties.
Background By letter dated August 31, 2000, the Inspector General
(I.G.) notified Petitioner that he was being excluded from participation
in the Medicare, Medicaid, and all other federal health care programs
as defined in section 1128B(f) of the Social Security Act (Act) for a
minimum period of 10 years. The I.G. informed Petitioner that his exclusion
was imposed under section 1128(a)(1) of the Act, due to his conviction
(as defined in section 1128(i) of the Act) in the United States District
Court for the District of New Jersey of a criminal offense related to
the delivery of an item or service under the Medicare program. Petitioner filed a request for a hearing on September
16, 2000, and this case was assigned to me for adjudication. The I.G.
is represented in this case by the Office of Counsel. Petitioner appeared
on his own behalf. The parties agreed that the case could be decided based
on written briefing and that an in-person hearing was unnecessary. The
I.G. submitted a written brief and four proposed exhibits on December
4, 2000. These have been identified as I.G. Exhibits (I.G. Exs.) 1-4.
Petitioner did not submit a brief but submitted two unmarked proposed
exhibits which were received by the Civil Remedies Division on January
8, 2001.(1) I have identified Petitioner's
unmarked exhibits as Petitioner Exhibits (P. Exs.) 1-2.(2)
Since neither party opposed the admission of the other's exhibits, I am
admitting I.G. Exs. 1-4 and P. Exs. 1-2 into evidence. It is my finding that Petitioner was convicted of a criminal
offense related to the delivery of an item or service under the Medicaid
program. Additionally, I find that a 10-year exclusion is not unreasonable.
Issues 1. Whether the I.G. had a basis upon which to exclude
Petitioner from participation in the Medicare, Medicaid, and all other
health care programs. 2. Whether the 10-year exclusion imposed by the I.G. is
unreasonable.
Applicable Law and Regulations Section 1128(a)(1) of the Act authorizes the Secretary
of the U.S. Department of Health and Human Services (Secretary) to exclude
from participation in any federal health care program (as defined in section
1128B(f) of the Act), any individual convicted under federal or state
law of a criminal offense relating to the delivery of a health care item
or service. An exclusion under section 1128(a)(1) of the Act must be for a minimum period of five years. Section 1128(c)(3)(B) of the Act. Aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. � 1001.102(b). As relevant here, the aggravating factors include:
If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. � 1001.102(c). The mitigating factors are:
Pursuant to 42 C.F.R. � 1001.2007, a person excluded under
section 1128(a)(1) of the Act may file a request for hearing before an
administrative law judge limited to the issues of whether (i) the basis
for the imposition of the sanction exists, and (ii) the length of exclusion
is unreasonable. If the length of the exclusion imposed by the I.G. is
"within a reasonable range" under the circumstances of the case, the ALJ
has no authority to change it. 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992);
see also Gerald A. Snider, M.D., DAB No. 1637 (1997); Frank
A. DeLia, D.O., DAB No. 1620 (1997); Barry D. Garfinkel, M.D.,
DAB No. 1572 (1996).
Findings of Fact and Conclusions of Law I make the following findings of fact and conclusions
of law (FFCLs) to support my decision in this case. 1. Petitioner was licensed to practice podiatry in the
State of New Jersey. I.G. Ex. 4. 2. Petitioner participated in illegal schemes to defraud
the Medicare program which involved two providers of durable medical equipment
and supplies. In the first scheme, he received kickbacks disguised as
lease payments for referring patients to Leon SCD and placing orders with
Leon SCD for durable medical equipment and supplies paid for in whole
or in part by the Medicare program. In the second scheme, he failed to
disclose his ownership interest on an application by BKA(3)
to become a Medicare provider, and after approval of BKA as a provider,
received payments from BKA in exchange for referring patients and placing
orders for durable medical equipment and supplies paid for in whole or
in part by the Medicare program. In addition, on some occasions, Petitioner
falsely stated on certificates of medical necessity that patients had
chronic intractable lymphedema, placing orders with Leon SCD and BKA for
excessive and medically unnecessary wound care supplies and durable medical
equipment for this condition. I.G. Ex. 1. 3. Petitioner conspired to carry out these illegal schemes
from on or about January 1, 1994 through on or about December 31, 1995.
He carried out the illegal scheme with Leon SCD from on or about July
14, 1994 through on or about October 20, 1995. He carried out the illegal
scheme with BKA from on or about September 29, 1994 through on or about
December 31, 1995. I.G. Ex. 1. 4. On July 2, 1999, Petitioner was found guilty after
a jury trial in the U.S. District Court for the District of New Jersey
of one count of conspiracy to defraud the United States in violation of
18 U.S.C. � 371, six counts of soliciting and receiving kickbacks in violation
of 42 U.S.C. � 1320(a)-7b(b)(1)(B), and six counts of mail fraud in violation
of 18 U.S.C. � 1341. I.G. Ex. 2, at 1. 5. Petitioner was sentenced to 30 months imprisonment
to be followed by three years of supervised probation and ordered to pay
a fine of $40,000. I.G. Ex. 2, at 2-3, 5. 6. Based on Petitioner's criminal conviction, the New
Jersey Board of Medical Examiners revoked Petitioner's license to practice
podiatry in the State of New Jersey effective December 17, 1999. I.G.
Ex. 4. 7. Based on Petitioner's criminal conviction and on the
revocation of his license to practice podiatry, the New Jersey Department
of Human Services, Division of Medical Assistance and Health Services,
disqualified Petitioner from participating in the New Jersey Medicaid
and KidCare programs effective February 16, 2000. I.G. Ex. 3. 8. The I.G. notified Petitioner by letter dated August
31, 2000 that, pursuant to section 1128(a)(1) of the Act, he was being
excluded from participating in the Medicare, Medicaid, and all Federal
health care programs for 10 years, effective 20 days from the date of
the letter. 9. Petitioner was convicted of a criminal offense related
to the delivery of an item or service under title XVIII (Medicare) within
the meaning of section 1128(a)(1) of the Act. 10. The minimum length of exclusion under section 1128(a)(1)
of the Act is five years. 11. An exclusion may be for a period longer than five
years if aggravating factors are present. 42 C.F.R. � 1001.102(b). 12. The I.G. notified Petitioner that the period of exclusion
was greater than the minimum of five years because the I.G.'s records
contained evidence of three aggravating factors. 13. The I.G. established the existence of aggravating
factors under 42 C.F.R. �� 1001.102(b)(2), (5), and (9). 14. Petitioner did not establish the existence of any
of the mitigating circumstances in 42 C.F.R. � 1001.102(c). 15. An exclusion of 10 years is within the range of reasonable
exclusion periods under the circumstances of this case.
Discussion In his request for hearing, Petitioner did not dispute
that a five-year exclusion was properly imposed by the I.G. under section
1128(a)(1) of the Act. Petitioner took the position, however, that a 10-year
exclusion was unreasonable. Specifically, Petitioner disputed that the
I.G. had established the existence of two of the aggravating factors on
which it relied in imposing the exclusion, i.e., that the acts that resulted
in the conviction occurred over a period of more than one year (42 C.F.R.
� 1001.102(b)(2)), and that Petitioner was the subject of other adverse
action by a state agency or board (42 C.F.R. � 1001.102(b)(9)). In addition,
Petitioner argued that there were mitigating circumstances which should
have been considered in setting the length of the exclusion period. Finally,
Petitioner argued that the exclusion should have been effective at the
onset of his incarceration rather than 20 days from the date of the I.G.'s
notice of exclusion. I discuss each of Petitioner's arguments below.
Petitioner stated that, according to testimony at the
trial, the acts on which the exclusion was based were for a period of
less than one year. Section 1001.102(b)(2) requires that the acts have
occurred for a period of one year or more in order to constitute an aggravating
factor. The testimony at the trial is irrelevant, however. The
counts of the indictment of which Petitioner was convicted describe several
illegal activities in which Petitioner was engaged for a period of one
year or more.(4) The facts charged in those
counts must be accepted as true for purposes of determining the reasonableness
of the length of the exclusion since the applicable regulations preclude
a collateral attack on the underlying conviction in these proceedings.
See 42 C.F.R. � 1001.2007(d). Accordingly, I conclude that the I.G. established the existence of the aggravating factor at section 1001.102(b)(2).
Petitioner asserted that "the other adverse actions taken
against me were all based on the same circumstances." It is unclear what
Petitioner intended by this; however, I take it to be an argument that
the aggravating factor at section 1001.102(b)(9) did not apply here because
the other adverse actions, i.e., the revocation of Petitioner's license
to practice podiatry in the State of New Jersey and the disqualification
of Petitioner from participating in the New Jersey Medicaid and KidCare
programs, were based on the same circumstances as the exclusion. As is
evident from the language of section 1001.102(b)(9) itself, however, this
is precisely the situation covered by that section. See also Feyerdoon
Abir, M.D., DAB No. 1764, at 7-9 (2001) (finding that the history
of this provision confirms that the I.G. intended it to be read in this
manner). Accordingly, I find that the I.G. established the existence of the aggravating factor at section 1001.102(b)(9).
In his hearing request, Petitioner stated that, given
his current age, a 10-year exclusion "would essentially exclude [him]
from ever practicing again." He also stated that since his "specialty,
wound care, involves treating a significant number of Medicare recipients,
the lengthy exclusion would bar [him] from providing his expertise to
those who need it most." He further stated that this was "a first and
only offense during a twenty year career . . . ." Petitioner's letter
dated September 16, 2000. In addition, Petitioner submitted a copy of
a letter from his former counsel to the I.G. requesting that the exclusion
be for the five-year minimum and stating that there are very few podiatrists
in the town in which Petitioner practiced, that Petitioner's specialization
in wound care was unique, that Petitioner was the director of residency
and medical director at the hospital in his town-a rare level of professional
responsibility for a podiatrist, and that there was no allegation or evidence
that any patient received inadequate treatment. Letter dated August 18,
2000 from Lodge to Smith. Although Petitioner did not expressly identify
these as mitigating factors, he clearly took the position that they should
be considered as such. Section 1001.102(c) of 42 C.F.R. sets out a limited list
of factors which may be considered mitigating. These factors, quoted earlier
in this decision, relate to the seriousness of the crime, diminished capacity
in committing the crime, and cooperation with the government. Since none
of the considerations noted by Petitioner are on the list, they are not
mitigating factors within the meaning of the regulations. See John
E. Calhoon, DAB No. 1729, at 7 (2000). Moreover, I conclude that, even if Petitioner could establish
that there were mitigating factors, a 10-year exclusion is still warranted
because of the seriousness and magnitude of the offenses committed by
Petitioner, as measured by the aggravating factors.(5)
Some of Petitioner's illegal activities spanned a period of two full years,
double the minimum necessary to establish the existence of this aggravating
factor. In addition, he was sentenced to incarceration for two and one-half
years, a lengthy period which reflects his central role in planning and
executing various schemes to defraud the Medicare program. Furthermore,
two state entities concluded that Petitioner was so untrustworthy as to
warrant their taking action to permanently prevent him from practicing
podiatry in the state or receiving any payments from the Medicaid or KidCare
programs. Accordingly, I conclude that a 10-year exclusion is within the range of reasonable exclusion periods necessary to protect federally funded health care programs and beneficiaries and recipients of those programs from Petitioner.
The I.G.'s August 31, 2000 notice of exclusion stated
that the exclusion would be effective "20 days from the date of this letter,"
consistent with the requirement at 42 C.F.R. � 1001.2002(b) that an exclusion
will be effective 20 days from the date of the notice. In Petitioner's
request for hearing, he questioned this effective date, asserting that
"[a]ccording to previous letters from H.H.S. and Medicare, my exclusion
started at the onset of my incarceration." Letter to Chief, Civil Remedies
Division, dated September 16, 2000. The record indicates that Petitioner
was scheduled to surrender for service of his sentence at the designated
institution within 60 days of the July 2, 1999 judgment. I.G. Ex. 2, at
2. Petitioner did not provide any further information regarding
the content of the letters to which he referred. In any event, it is well-settled
that neither the statute nor the regulations set any specific deadline
for the I.G. to act to exclude an individual once that individual is convicted,
and that an ALJ is without authority to change the effective date of an
exclusion prescribed by the regulations. See Alfredo Rodriguez-Machado,
DAB CR706 (2000), and cases cited therein. Accordingly, I find that the exclusion was effective 20
days from the date of the I.G.'s August 31, 2000 notice of exclusion.
Conclusion I find that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act and that a 10-year exclusion was within a range of reasonable exclusion periods under the circumstances. |
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JUDGE | |
Jose A. Anglada Administrative Law Judge
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FOOTNOTES | |
1. In accordance with the briefing schedule which I established, Petitioner's response brief and exhibits should have been filed by January 4, 2001. On December 26, 2000, Petitioner requested a continuance of this case until after his release from the Fairfield Correctional Institution, which he stated was scheduled for May 2001, on the grounds that he did not have access to the necessary legal research material and that he was unable to afford counsel at that time. In a letter of the same date, Petitioner requested a telephone conference to further discuss his appeal. Petitioner subsequently submitted the two proposed exhibits referred to above. Petitioner was advised by letter dated January 22, 2001 that I had denied both of his requests but extended the time for submission of his brief to February 9, 2001. Petitioner was further advised that if he did not respond, I would close the record and proceed to decision. By letter dated March 26, 2001, Petitioner was advised that the record in the case was closed. 2. The first exhibit is a letter, dated August 18, 2000, from an attorney to the Office of the Inspector General request that Dr. Picciotti's exclusion be reduced to five years. The second exhibit is request from Dr. Picciotti to the education department of the prison requesting certain documents. 3. BKA is company created by Petitioner in or about September 1994 to provide durable medical equipment and supplies. I.G. Ex. 1, at 9. 4. Petitioner was convicted of all counts in the indictment with the exception of one of seven counts of mail fraud. I do not rely on the mail fraud counts in determining the period of time covered by Petitioner's criminal activities since the indictment describes all seven mail fraud counts together. 5. Thus, Petitioner was not prejudiced by his purported ignorance of the mitigating factors enumerated in the regulations resulting from his lack of access to legal reference materials or ability to afford counsel. | |