Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Dr. Darren J. James, D.P.M., |
DATE: January 23, 2002 |
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The
Inspector General
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Docket No.C-00-531
Decision No. CR860 |
DECISION | |
DECISION I sustain the determination of the Inspector General (I.G.)
to exclude Dr. Darren James (Petitioner) from participation in Medicare,
Medicaid, and all federal health care programs for a period of eight years.
I find that the I.G. is authorized to exclude Petitioner pursuant to section
1128(a)(1) of the Social Security Act (Act). I find also that the eight-year
exclusion imposed by the I.G. against Petitioner is reasonable. I. Background By letter dated March 31, 2000, the I.G. notified Petitioner
that he was being excluded from participation in the Medicare, Medicaid
and all federal health care programs for a minimum period of 10 years.
The I.G. informed Petitioner that, pursuant to section 1128(a)(1) of the
Act, he was being excluded because of a conviction, as defined in section
1128(i) of the Act, in the Superior Court of New Jersey, County of Mercer,
Law Division - Criminal, for a criminal offense related to the delivery
of an item or service under the Medicaid program. By letter dated April
28, 2000, the I.G. advised Petitioner that Petitioner's submission of
evidence showing Petitioner's cooperation with federal officials during
the course of their investigation into his activities qualified as a mitigating
circumstance for purposes of setting the period of exclusion. As a result,
the period of exclusion was reduced from 10 years to eight years.
Petitioner filed a request for hearing before an administrative
law judge (ALJ) on May 24, 2000. The case was assigned to me for hearing
and decision. A prehearing telephone conference was conducted on August
24, 2000. During the telephone conference, the parties agreed that initial
written submissions would be required in this case. Accordingly, with
the parties' agreement, I issued an order establishing a briefing schedule.
In my Order, I directed that Petitioner could request an in-person hearing
in his response to the I.G.'s reply brief. The I.G. submitted her brief in support of summary disposition
(I.G. Br.) on October 20, 2000, which included eight proposed exhibits
(I.G. Exs. 1-8). Petitioner submitted his response brief (P. Resp.) on
November 13, 2000, which included 12 proposed exhibits (P. Exs. A-L).
On December 15, 2000, the I.G. filed her reply brief (I.G. Reply), which
included four additional proposed exhibits (I.G. Exs. 9-12). On December
29, 2000, Petitioner filed his sur-reply (P. Sur-Reply).(1)
Neither party objected to the admission of the opposing party's exhibits.
I therefore admit into evidence I.G. Exs. 1-12 and P. Exs. A-L. On April 12, 2001, Petitioner requested that a telephonic
hearing be conducted for the presentation of evidence of purported additional
mitigating factors not previously considered by the I.G. Specifically,
Petitioner sought to show additional instances of his cooperation with
governmental agencies for the purpose of investigation and subsequent
prosecution of individuals involved in the same or similar activities.
A hearing, via telephone conference, was held on July 26, 2001. The hearing
was held for the purpose of examination of the hearing's only witness
Bruce Levy, former Assistant United States Attorney, to elicit testimony
as to the degree of Petitioner's cooperation with government officials
in the investigation and prosecution of related Medicaid fraud cases.
During the hearing, the I.G. submitted five proposed hearing exhibits
(I.G. Hearing Exs. 1-5). Petitioner cited to his November 13, 2000 brief
at pages 9-12 during examination of the hearing's only witness as a proposed
hearing exhibit. For clarity, I will refer to the referenced pages as
P. Hearing Ex. 1. Thus, I.G. Hearing Exs. 1-5 and P. Hearing Ex. 1 were
admitted and made part of the hearing record. I base my decision in this case on the law, the evidence,
and the parties' arguments. II. Applicable law Under section 1128(a)(1) of the Act, the Secretary of
the U.S. Department of Health and Human Services (Secretary) may 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 Title XVIII or under any State health
care program. 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 not
less than five years.See also, 42
C.F.R. � 1001.102(a). 42 C.F.R. � 1001.102(b) provides that the following factors
may be considered to be aggravating and a basis for lengthening the period
of exclusion: "(1) [t]he acts resulting in the conviction, or similar
acts, resulted in financial loss to a government program or to one or
more entities of $1500 or more. (The entire amount of financial loss to
such programs or entities, including any amounts resulting from similar
acts not adjudicated, will be considered regardless of whether full or
partial restitution has been made); (2) [t]he acts that resulted in the
conviction, or similar acts, were committed over a period of one year
or more; (3) [t]he acts that resulted in the conviction, or similar acts,
had a significant adverse physical, mental or financial impact on one
or more program beneficiaries or other individuals; (4) [i]n convictions
involving patient abuse or neglect, the action that resulted in the conviction
was premeditated, was part of a continuing pattern of behavior, or consisted
of non-consensual sex acts; (5) [t]he sentence imposed by the court included
incarceration; (6) [t]he convicted individual or entity has a prior criminal,
civil or administrative sanction record; (7) [t]he individual or entity
has at any time been overpaid a total of $1,500 or more by Medicare, Medicaid
and all other Federal health care programs as a result of intentional
(original emphasis) improper billings; (8) [t]he individual or entity
has been previously convicted of a criminal offense involving the same
or similar circumstances; or (9) [w]hether the individual or entity was
convicted of other offenses besides those which formed the basis for the
exclusion, or has been the subject of any other adverse action by any
Federal, State or local government agency or board, if the adverse action
is based on the same set of circumstances that serves as the basis for
the exclusion."(2) 42 C.F.R. � 1001.102(c) provides that only in the event
that any of the aforementioned aggravating factors justifies the exclusion
for a period longer than five years, may any of the following factors
be considered as mitigating and a basis for reducing the period of exclusion
to not less than five years: "(1) [t]he individual or entity was convicted
of 3 or fewer misdemeanor offenses, and the entire amount of financial
loss to Medicare and the State health care programs due to the acts that
resulted in the conviction, and similar acts, is less than $1,500; (2)
[t]he record in the criminal proceedings, including sentencing documents,
demonstrates that the court determined that the individual had a mental,
emotional, or physical condition before or during the commission of the
offense that reduced the individual's culpability; or (3) [t]he individual's
or entity's cooperation with Federal or State officials resulted in --
(i) [o]thers being convicted or excluded from Medicare, Medicaid, and
all other Federal health care programs, (ii) [a]dditional cases being
investigated or reports being issued by the appropriate law enforcement
agency identifying program vulnerabilities or weaknesses, or (iii) [t]he
imposition against anyone of a civil money penalty or assessment under
part 1003 of this chapter." III. Findings of fact and conclusions
of law 1. At all times relevant to this case, Petitioner was
licensed to practice podiatry in the State of New Jersey. I.G. Ex. 10,
at 2. 2. On June 14, 1999, a criminal Accusation was filed against
Petitioner in the New Jersey Superior Court for the County of Mercer,
charging one count of Medicaid Fraud in the Third Degree. I.G. Ex. 2,
at 1; see also N.J.S.A. 30:4D-17(a). 3. On June 14, 1999, Petitioner pled guilty to one count
of Medicaid Fraud in the Third Degree. Id., at 2. 4. On June 14, 1999, Petitioner agreed, in a Consent Order
of Exclusion, to a minimum exclusion period of five years from the New
Jersey Medicaid program. I.G. Ex. 6. 5. As a result of his conviction, Petitioner was ordered
to pay $74,233 in restitution, $200 and $211,867.35 as civil and administrative
penalties to the New Jersey Medicaid Program. I.G. Ex. 5. 6. On March 31, 2000, Petitioner was notified by the I.G.
that he was being excluded from participation in the Medicare and Medicaid
programs for a minimum period of 10 years pursuant to sections 1128(a)(1)
and 1128(c)(3)(B) of the Act. I.G. Ex. 1. 7. Under section 1128(a)(1) of the Act, the I.G. is authorized
to exclude any individual or entity that has been convicted of a criminal
offense related to the delivery of a health care item or service under
Medicare or Medicaid. Act, section 1128(c)(3)(B). 8. Where the I.G. determines to exclude an individual
pursuant to section 1128(a)(1) of the Act, the term of exclusion will
be for a minimum period of five years. 9. A finding of aggravating factors may support an exclusion
of more than five years. 42 C.F.R. � 1001.102(b). 10. A finding of mitigating factors may result in a reduction
of the exclusion period, but in any case, no less than the minimum period
of five years. 42 C.F.R. � 1001.102(c). 11. Petitioner's plea agreement constitutes a "conviction"
within the scope of sections 1128(a)(1) and (3) of the Act. 12. The acts that resulted in the conviction, or similar
acts, resulted in financial loss to the New Jersey Medicaid Program of
more than $1,500. Petitioner agreed to pay restitution in the amount of
$74,233. I.G. Exs. 1 and 5, at 1; see also 42 C.F.R. � 1001.102(b)(1). 13. Petitioner was convicted of other offenses besides
those which formed the basis for the exclusion, or has been subject of
another adverse action by a federal, state, or local government agency
or board. Petitioner agreed to be excluded from the New Jersey Medicaid
Program. I.G. Ex. 6; see also 42 C.F.R. � 1001.102(b)(9). 14. Petitioner did not prove the presence of any additional
mitigating factors apart from those previously presented to the I.G.,
which resulted in a modification of the period of exclusion from 10 years
to eight years. 15. The I.G. established the existence of aggravating
factors under 42 C.F.R. �� 1001.102(b)(1) and (9). 16. The aggravating factors established by the I.G. proved
Petitioner to be untrustworthy. 17. I conclude that the I.G. was authorized to exclude
Petitioner pursuant to section 1128(a)(1) of the Act. 18. An eight-year exclusion of Petitioner is reasonable
and appropriate. IV. Discussion
This case presents two issues: (1) whether the I.G. has
the authority to exclude Petitioner; and (2) whether the period of exclusion
is reasonable. 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 is convicted of a criminal offense under federal
or state law. Petitioner does not challenge that he has been convicted
under state law, and I so find. The record reflects that Petitioner pled
guilty to the offense on June 14, 1999 in the Superior Court of New Jersey,
County of Mercer, Law Division - Criminal. I.G. Exs. 1 at 4, 2 at 3. Petitioner
was thus convicted within the meaning of section 1128(i)(3) of the Act. Next, it is required under section 1128(a)(1) of the Act
that the crime in question be related to the delivery of a health care
item or service under the Medicare/Medicaid program. To determine if an
offense is program-related, the 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 a health care item or service under a covered program.
Berton Siegel, D.O., DAB No. 1467 (1994). In Petitioner's case,
a nexus links the facts underlying his crime with the delivery of health
care items or services under Medicaid. The record reflects that Petitioner
was employed as a licensed podiatrist in the State of New Jersey. I.G.
Ex. 10, at 2. In such capacity, Petitioner was responsible for providing
care and services to patients who were Medicare and Medicaid recipients.
In the course of his employment, Petitioner falsely submitted claims for
health care services and received reimbursement for services he had not
provided. In the present case, the nexus between Petitioner's offense
and the delivery of health care items or services is firmly established
by his guilty plea on the charge of Third Degree Medicaid Fraud. I.G.
Ex. 2. A plea constitutes a conviction under section 1128(i)(2) of the
Act. B. The applicable regulations were not applied
Ex Post Facto. Petitioner challenges the I.G.'s authority to impose sanctions
pursuant to section 1128(a)(1) of the Act. Specifically, Petitioner contends
that section 1128(a)(1) of the Act was not effective until 1997 -- two
years after the commission of the crimes at issue. P. Resp. at 2. As authority
for this supposition, Petitioner relies heavily on Florence Peters,
D.P.M., DAB No. 1706 (1999). In Peters, the petitioner was
excluded pursuant to section 1128(b)(1) of the Act. Section 1128(b)(1)
was amended in 1997 to incorporate the provision that the underlying criminal
act must have occurred after August 1996. The criminal acts in Peters
occurred between 1987 and 1992. An appellate panel of the Departmental
Appeals Board (the Board) ultimately determined that, under the amended
regulation, the petitioner could not be excluded. The Peters case
is not analogous to the facts in this case and therefore does not support
Petitioner's assertions. In the instant case, Petitioner was excluded
under section 1128(a)(1) of the Act, which was not only in effect at the
time of Petitioner's criminal acts, but also at the time of the I.G.'s
exclusion determination. At any rate, this is a moot issue. Recent case
law has established that it is the law in effect at the time of the exclusion
notice which is controlling. In this case, it is the version of the regulation
in effect at the time of the I.G.'s March 31, 2000 notice of exclusion.
See Robert Alan Spriggs, R.P.T., DAB CR718 (2000). C. The period of exclusion was reasonable in light of the circumstances. Petitioner also challenged whether the period of exclusion
is reasonable. Petitioner contends that, in light of the extent of his
cooperation with state and federal governmental agencies in assisting
with on-going investigations and potential prosecution of related suspects,
additional weight should be given to the degree of Petitioner's cooperation
for the purpose of further modification of the exclusion period. P. Sur-Reply,
at 3-5. An exclusion period of more than five years may be imposed where
aggravating factors, as identified in the regulations, are present in
a case. 42 C.F.R. � 1001.102(b). Only where aggravating factors have been
proven to support the extended period of exclusion may mitigating factors
be considered as a basis for reducing the period of exclusion (but not
less than five years). 42 C.F.R. � 1001.102(c). The regulation at 42 C.F.R. � 1001.102(b) sets forth the aggravating factors which may be considered in determining the length of an exclusion. I find that the I.G. has proven the presence of the two following aggravating factors:
I.G. Ex. 1, at 1; I.G. Br. at 11.(3) Following the I.G.'s issuance of the exclusion notice,
Petitioner presented evidence of mitigating factors to the I.G. for consideration
of modification of the 10-year exclusion period. Petitioner contends that,
given the risks Petitioner undertook in order to assist the federal and
state governmental agencies in their ongoing investigations of related
Medicaid fraud cases, the I.G. did not give sufficient weight to this
mitigating factor. Therefore, the eight-year exclusion should be modified
further. P. Resp. at 9.
The I.G. has effectively argued that an eight-year period
of exclusion is within a reasonable range given the facts, the aggravating
factors and the consideration previously given to the degree of Petitioner's
cooperation. It is well settled that the presence of aggravating factors, such as those advanced by the I.G., substantiates a determination for an extended period of exclusion. Ruth Ferguson, DAB CR725 (2000); Tarvinder Singh, D.D.S., DAB CR697 (2000); Dale F. Lowe, DAB CR655 (2000); Steven Alonzo Henry, M.D., DAB CR638 (2000); JoAnn Fletcher Cash, DAB CR624 (2000).
The I.G. asserts that Petitioner's acts for which he was convicted resulted in a financial loss of more than $1,500 to the State health care program. I.G. Br. at 11. The record reflects that Petitioner was ordered to pay Medicaid $74,233 in restitution as a condition of his plea agreement. I.G. Exs. 5. In Steven Alonzo Henry, M.D., DAB CR638 (2000), the ALJ determined that the amount of ordered restitution is "a fair estimate of the quantum of damages" caused by Petitioners' criminal act. See also Gilbert Ross, DAB CR478 (1997). Additionally, in the Consent Judgment, the court ordered Petitioner to pay $200 and $211,867.35 in civil and administrative penalties to Medicaid. I.G. Ex. 5, at 1. Thus, it is quite clear that Petitioner's criminal act resulted in a substantial financial loss to the Medicaid program.
Next, the I.G. argues that Petitioner's exclusion from
the New Jersey State Medicaid program is another aggravating factor specifically
listed in the regulations. I.G. Br. at 12. As a stipulation to the Consent
Order of Exclusion dated June 14, 1999, Petitioner agreed to a minimum
exclusion period of five years from the New Jersey State Medicaid program.
I.G. Ex. 6. The basis for exclusion from participation was Petitioner's
conviction for Medicaid fraud. I.G. Exs. 5, 6. I find that Petitioner's
exclusion from the New Jersey State Medicaid program constitutes an aggravating
factor under 42 C.F.R. � 1001.102(b)(9).
It is Petitioner's burden to prove any mitigating factors.
James H. Holmes, DAB CR270 (1993). Aside from those factors entertained
by the I.G., which resulted in the April 28, 2000 modification of the
exclusion period, Petitioner has not established the existence of any
additional mitigating factors. The record reflects that all due consideration
was given to Petitioner's mitigating factor by the I.G. well in advance
of Petitioner filing his request for hearing. Mr. Levy's testimony at
hearing did not assist Petitioner in establishing that the I.G. did not
wholly consider Petitioner's mitigating factors. The only relevant argument
Petitioner makes with respect to mitigating factors is that he has, and
continues to, fully cooperated with the government. However, despite being
given ample opportunity, Petitioner has failed to present any evidence
which supports his contention that his continued cooperation has led to
the conviction or investigation of others or the imposition of a monetary
penalty against others as required by 42 C.F.R. � 1001.102(c)(3)(i), (ii),
and (iii). Therefore, I have considered Petitioner's claim, but it is
without merit. As Petitioner has the burden concerning mitigating factors,
I find that he has not met such burden and conclude that Petitioner has
not proven the existence of any additional mitigating factors. V. Conclusion Based on the foregoing, I conclude that the I.G. was authorized to exclude Petitioner, pursuant to section 1128(a)(1) of the Act. I also find that, based on the existence of aggravating factors, the eight-year period of exclusion is reasonable. |
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JUDGE | |
Alfonso J. Montano Administrative Law Judge |
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FOOTNOTES | |
1. Following the conclusion of the scheduled briefing process, Petitioner filed numerous motions, with supporting documentation, on a variety of issues. I have admitted into evidence all supplemental exhibits submitted by both parties, although in some instances the exhibits were duplicative. 2. Effective October 1, 2000, Title 42 of the Code of Federal Regulations was revised. In this matter, the controlling regulatory provisions are those in effect prior to October, 2000. See Robert Alan Spriggs, R.P.T., DAB CR718 (2000). 3. Although the I.G.'s exclusion letter dated March 31, 2000 refers to three aggravating circumstances, i.e., 42 C.F.R. �� 1001.102(b)(1), (8), and (9), only sections 1001.102(b)(1) and (9) are addressed in the I.G.'s briefs. | |