Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
____________________________ ) In the Case of: ) DATE:
March 15, 1990 ) Surabhan Ratanasen, M.D., ) ) Docket No. C-101
Petitioner, ) Decision No. 1138 ) - v. -
) ) The Inspector General. ) ____________________________)
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE
DECISION
Dr. Surabhan Ratanasen (Petitioner) requested review by the Appellate
Panel of an October 6, 1989 decision by Administrative Law Judge Charles
E. Stratton (ALJ). The decision granted the motion of the Inspector
General (I.G.) for summary disposition and dismissal of Petitioner's
request for an administrative hearing to challenge the I.G.'s decision
to exclude Petitioner from participation in the Medicare program for
five years and to direct his exclusion from state health care programs
(including Medicaid) for the same length of time. Petitioner's
exclusions were based on section 1128(a)(1) of the Social Security Act
(Act), which provides as follows:
(a) Mandatory Exclusion.--The Secretary shall exclude the
following individuals and entities from participation in any
program under title XVIII and shall direct that the following
individuals and entities be excluded from participation in any
State health care program . . . .
(1) Conviction of program-related crimes.-- 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 further provides:
In the case of an exclusion under subsection (a), the minimum
period of exclusion shall be not less than five years . . . .
Petitioner pleaded guilty to four counts of unprofessional conduct under
section 2261 of the California Business and Professions Code. 1/ The
facts that served as a basis for this plea were that Petitioner directed
an employee to fill in information -- temperature and blood pressure
readings -- on the charts of four patients, shown by the record to have
been non- existent, after he was notified that Medi-Cal, California's
Medicaid plan, was going to audit his medical charts as part of an
investigation.
On appeal to this Board, Petitioner argued that the crime for which he
was convicted did not involve the delivery of a medical item or service,
and that, therefore, section 1128(a) of the Act did not apply to
Petitioner's situation. Petitioner contended that the ALJ's failure to
hold an evidentiary hearing to determine the specific facts surrounding
Petitioner's conviction led to the ALJ's erroneous conclusion that
section 1128(a) was applicable. According to Petitioner, a hearing
would have shown that Petitioner's conviction properly fell within the
scope of either section 1128(b)(2) or section 1128(b)(1) of the Act,
both of which provide for a permissive, rather than mandatory, exclusion
from the Medicare and State health care programs. Accordingly,
Petitioner disputed those findings of fact and conclusions of law
(FFCLs) made by the ALJ that section 1128(a) applied to Petitioner,
arguing that there was no substantial evidence to support that
conclusion. A hearing, Petitioner continued, would have given the I.G.
a fuller understanding of the circumstances of Petitioner's conviction
so as to allow the I.G. the discretion to proceed under the mandatory
exclusion provisions or the permissive exclusion provisions of the Act.
The ALJ made 12 FFCLs. Without specifically listing all of them, it is
apparent from Petitioner's arguments that he is challenging FFCL Nos. 5,
8, 10, and 11. 2/ These read as follows:
5. Petitioner stipulated that the four counts to which he pleaded
guilty were reasonably related to Counts One, Four, Seven, and Ten,
of the May 18, 1987 charge filed against Petitioner. [footnote and
citations to record omitted]
8. Petitioner was convicted of a criminal offense "related to the
delivery of an item or service" under the Medicaid program within the
meaning of section 1128(a)(1) of the Act.
10. The I.G. does not have the discretion to exclude an individual
or entity from participation in the Medicare and Medicaid programs,
based upon the permissive provisions of section 1128(b) of the Act,
in instances where the individual or entity has been convicted of a
criminal offense which is "related to the delivery of an item or
service" under the Medicare or Medicaid program.
11. The I.G. acted properly in excluding and directing the exclusion
of Petitioner from participation in the Medicare and Medicaid
programs for the minimum period of five years.
Based on our review of the ALJ's decision and the record below, the
parties' written submissions before us, and the following analysis, we
conclude that the ALJ properly granted summary disposition. The
standard for the granting of summary disposition is that there exist no
genuine issues of material fact which justify having an evidentiary
hearing. John W. Foderick, M.D., DAB App. 1125 (1990), p. 10. The ALJ
properly identified the potential issues of material fact. Petitioner
has offered no relevant or material challenges to the facts.
We therefore affirm and adopt each of the ALJ's findings of fact and
conclusions of law as written. We find that there was undisputed
evidence in the record before the ALJ to support Petitioner's mandatory
exclusion from the Medicare and Medicaid programs. The undisputed
material facts establish that the crime of which Petitioner was
convicted was related to the "delivery of an item or service" under
the
Medicaid program, and that an evidentiary hearing, accordingly, was
unnecessary.
I. Undisputed evidence supports the ALJ's finding that Petitioner was
convicted of an offense related to the delivery of an item or service
under the Medicaid program.
In granting the I.G.'s motion for summary disposition, the ALJ found
that the evidence before him clearly supported a finding that
Petitioner's conviction was related to the delivery of an item or
service under the Medicaid program. The ALJ noted that Petitioner, in
pleading guilty to violating four counts of section 2261 of the
California Business and Professions Code, had been charged originally
with 12 counts of violating section 14107 of the California Welfare and
Institutions Code. 3/ FFCL No. 2. The ALJ found that Petitioner had
stipulated that the four counts to which he had pleaded guilty were
reasonably related to four of the original counts with which he was
charged, to wit, that Petitioner "did willfully, unlawfully, and with
intent to defraud, present to Computer Sciences Corporation and the
State of California for allowance or payment a false or fraudulent
Medi-Cal claim for furnishing services." FFCL No. 5.
The ALJ found that irrespective of the basis for Petitioner's conviction
-- whether Petitioner billed Medi-Cal for undelivered services, as
alleged by the I.G., or Petitioner directed the inclusion of information
on the charts of patients after learning that Medi-Cal was going to
audit his medical charts, as admitted by Petitioner -- Petitioner was
guilty of an offense related to the delivery of an item or service under
the Medicaid program. The ALJ reasoned:
The determination of whether a conviction is related to the
delivery of an item or service under the Medicaid program
"must be a common sense determination based on all
relevant facts as determined by the finder of fact, not
merely a narrow examination of the language within the four
corners of the final judgment and order of the criminal trial
court." (citation omitted)
ALJ decision, p. 10. Citing Jack W. Greene, DAB App. 1078 (1989),
aff'd sub nom Greene v. Sullivan, Civil No. 3-89-758 (E.D. Tenn. Feb.
8, 1990), the ALJ stated that "criminal offenses may be related to the
delivery of an item or service because 'they concern acts that directly
and necessarily follow under the health care program from the delivery
of the item or service.'" Id.
Petitioner questioned the factual basis for the ALJ's conclusions.
Petitioner disputed that he had stipulated that the offense to which he
had pleaded guilty was reasonably related to four counts in his original
indictment. Petitioner argued that the "stipulation" referred to in
FFCL No. 5 was merely a report by Petitioner's probation officer which
was prepared to assist the court in sentencing Petitioner. It was not
substantial evidence, according to Petitioner, and therefore cannot be
used to establish that Petitioner's conviction was related to the
delivery of a Medicaid item or service. 4/
We find no basis for Petitioner's objection to FFCL No. 5. The record
before the ALJ was replete with admissions that Petitioner's conviction
was related to the fraudulent claim counts of his original indictment.
We need not rely on the probation officer's report. Petitioner, through
his counsel, stipulated that his conviction was related to the original
counts and specifically argued that his conviction should result in only
a permissive exclusion because it was related to the fraud charges of
the original indictment. Petitioner's brief, pp. 2-4.
The fact that the Medicaid fraud charges in the original indictment were
ultimately dismissed as a result of a plea bargain is not a bar to the
ALJ considering evidence in the record before him that Petitioner's
conviction was "related to" items or services under the Medicaid
program. The uncontested fact is that Petitioner sought, through the
submitted Medi-Cal claims, Medicaid reimbursement for patients that he
had never seen. In Petitioner's Statement for Sentencing, Petitioner
declared, "I pled guilty to putting information that was untrue in the
patient charts because that is what I felt I had done wrong. . . . I
never knew that those [patients] were nonexistent persons when I
submitted these claims." I.G. Exhibit 7, pp. 13-14. In other words,
Petitioner, when informed of the imminent Medi-Cal investigation of his
records, directed the post facto entry of the temperature and blood
pressure information - - the offense for which he was convicted -- into
the medical charts of people who did not exist. For the medical
treatment of these "people," Petitioner had submitted Medicaid claims.
In the face of such an admission, we find it difficult to see how
Petitioner can argue either that the ALJ needed more information to
conclude that Petitioner's conviction was related to the delivery of an
item or service under the Medicaid program, or that an evidentiary
hearing was warranted.
II. The ALJ properly found that the five-year mandatory exclusion
provisions of section 1128(a) of the Act applied to Petitioner's
conviction.
Petitioner argued that the ALJ erred in concluding that Petitioner was
convicted of a criminal offense within the meaning of section 1128(a)(1)
of the Act and accordingly affirming the I.G.'s exclusion of Petitioner
from the Medicare and Medicaid programs for five years. FFCL Nos. 8
and 11. Petitioner maintained that his conviction is covered by section
1128(b)(2) of the Act:
(2) Conviction relating to obstruction of an
investigation.--Any individual or entity that has been
convicted, under Federal or State law, in connection with the
interference with or obstruction of any investigation into any
criminal offense described in paragraph (1) or in subsection
(a).
Petitioner argued that he was convicted for interfering with Medi-Cal's
investigation of his records. In the alternative, Petitioner contended
that his conviction was covered by section 1128(b)(1) of the Act:
(1) Conviction relating to fraud.--Any individual or
entity that has been convicted, under Federal or State law, in
connection with the delivery of a health care item or
service or with respect to any act or omission in a program
operated by or financed in whole or in part by any Federal, State,
or local government agency, of a criminal offense relating to
fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct.
If either of these two provisions of section 1128(b) were to apply to
Petitioner's conviction, Petitioner argued that he should escape the
five-year mandatory exclusion of section 1128(a). Instead, he would
face the possibility of a permissive exclusion from the Medicare and
Medicaid programs as provided for in section 1128(b).
We find no merit in Petitioner's arguments. As we have shown above,
there was ample evidence in the record to sustain the ALJ's finding that
Petitioner's conviction was related to the delivery of Medicaid services
so that the ALJ could uphold the I.G.'s mandatory exclusion of
Petitioner for five years under section 1128(a). Therefore there is no
basis for Petitioner's claim that the I.G. should have applied either of
the cited provisions of section 1128(b). 5/
The permissive exclusion provisions of section 1128(b) apply to
convictions for offenses other than those related to the delivery of an
item or service under either the Medicare or Medicaid or other covered
programs. While it is not inconceivable that one of the provisions of
section 1128(b) could have been applied in the absence of section
1128(a), which provides that the Secretary "shall" exclude individuals
where applicable, these provisions focus on different circumstances from
those raised here, such as where an individual's conviction does not
relate to the Medicare or Medicaid programs. 6/ Petitioner admitted
that the counts of which he was convicted were reasonably related to the
four counts originally charged of falsely billing the Medi-Cal program.
Accordingly, his conviction falls squarely within the parameters of the
mandatory five-year exclusion provision of section 1128(a).
As such, the I.G. did not have the discretion to determine whether
Petitioner's exclusion should have been mandatory or permissive. FFCL
No. 10. In the circumstances of Petitioner's conviction, the I.G. was
required by law to impose the five-year exclusion. The evidentiary
hearing sought by Petitioner would not have given the I.G. any
discretion to do otherwise in these circumstances.
Conclusion
Based on the foregoing, we affirm the five-year exclusion imposed on
Petitioner.
_______________________________ Cecilia Sparks
Ford
_______________________________ Theodore J.
Roumel U.S. Public Health Service
_______________________________ Alexander G.
Teitz Presiding Panel Member
1. Section 2261 provides: "Knowingly making or signing any
certificate or other document directly or indirectly related to the
practice of medicine or podiatry which falsely represents the existence
or non-existence of a state of facts, constitutes unprofessional
conduct."
2. As for the other FFCLs which Petitioner did not challenge directly
or by implication, FFCL Nos. 1, 2, 3, 4, 6, 7, 9, and 12, we affirm them
without further discussion.
3. Section 14107 provides:
Any person who, with intent to defraud, presents for allowance
or payment any false or fraudulent claim for furnishing
services or merchandise, knowingly submits false information
for the purpose of obtaining greater compensation than
that to which he is legally entitled for furnishing
services or merchandise, or knowingly submits false information
for the purpose of obtaining authorization for furnishing
services or merchandise under this chapter [Basic Health
Care] or Chapter 8 [Prepaid Plans] is punishable by
imprisonment in the county jail not longer than one year or
in the state prison, or by fine not exceeding five thousand
dollars, or by both such fine and imprisonment.
4. Petitioner before us, as well as before the ALJ, relied on the case
of Brown v. State Department of Health, 150 Cal. Rptr. 344, 86 Cal. App.
3d 548 (1978). This is a state court case dealing with state
disciplinary proceedings against a physician without any conviction
involved, and has no relevance to the exclusion under a federal statute
relying on a conviction of a crime related to the delivery of a medical
item or service.
Petitioner also relied before the ALJ on the recent Supreme Court case
of United States v. Halper, __ U.S. __, 109 S.Ct. 1892 (1989). The
ALJ found that the principles pronounced in Halper did not apply to the
facts of this case. FFCL N0. 12. Petitioner did not challenge this
finding before us.
5. Petitioner, as the I.G. correctly pointed out, never argued before
the ALJ that his conviction involved the obstruction of an investigation
and that section 1128(b)(2) was applicable to his situation. Section
III(c) of the Board's Appellate Division Guidelines provides that this
Panel "will not consider . . . issues which could have been presented to
the ALJ but were not." We have, however, addressed Petitioner's
arguments before us that were not presented to the ALJ, and found them
to be without merit.
6. The 1987 amendment to section 1128 by Public Law 100-93 added
section 1128(b). Its purpose was explained as follows:
Under current law, the Secretary does not have the authority to
exclude individuals or entities convicted of criminal
offenses which are not related to Medicare or Medicaid or the other
State health care programs. This provision would permit the
Secretary to exclude persons and entities who have already been
convicted of offenses relating to their financial integrity, if the
offenses occurred in delivering health care to patients not
covered by public programs or if they occurred during
participation in any other governmental program.
S. Rep. No. 109, 100th Cong., 1st Sess. 7, reprinted in 1987 U.S. Code
Cong. & Ad. News