Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
________________________ In the Case of: ) DATE: January 18,
1990 ) John W. Foderick, M.D., ) ) Appellate Docket No. 89-205
Petitioner, ) Decision No. 1125 ) - v. - ) )
The Inspector General. ) ) ________________________)
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE
DECISION
Petitioner, Dr. John W. Foderick, appealed the decision of
Administrative Law Judge (ALJ) Steven T. Kessel (ALJ decision) affirming
the determination of the Inspector General (I.G.) to exclude Petitioner
from participating in the Medicare program, Title XVIII of the Social
Security Act (Act), and to direct that he be excluded from participating
in any state health care programs. 1/
The Inspector General excluded Petitioner from the Medicare and Medicaid
programs on the basis that Petitioner had surrendered his license to
practice medicine in the State of Minnesota while a formal disciplinary
proceeding was pending against him before the Minnesota Board of Medical
Examiners. The I.G. advised Petitioner that he would have the right to
apply for reinstatement to the Medicare and Medicaid programs if he
obtained a valid license to practice medicine from the State of
Minnesota. Before Judge Kessel, Petitioner argued that the Board of
Medical Examiners' decision was not final because he did not surrender
his license, and that actions of the Board of Medical Examiners deprived
him of due process. Judge Kessel granted the I.G.'s motion for summary
disposition, concluding that the exclusions imposed by the I.G. were
authorized by the applicable authority and were reasonable.
On appeal to this Board, Petitioner argued that: (1) the proceedings
before the Board of Medical Examiners were not formal; (2) the Board of
Medical Examiners was not a state licensing authority; (3) the
proceeding did not concern his professional competence, professional
performance, or financial integrity; and (4) he did not surrender his
license to practice medicine in Minnesota. Petitioner argued that
summary disposition was not appropriate, and contested two of Judge
Kessel's conclusions of law. Petitioner argued that his assertion that
the Board of Medical Examiners deprived him of due process was relevant,
and that the length and the scope of his exclusion was unreasonable. 2/
Based on the following analysis, we conclude that the ALJ's decision was
correct. Accordingly, we affirm Judge Kessel's decision in its
entirety.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Judge Kessel made the following findings and conclusions:
1. Petitioner is a doctor of medicine.
2. Petitioner held a license to practice medicine and surgery in the
State of Minnesota.
3. The Board of Medical Examiners is the state agency responsible for
the licensure of, and, if necessary, the imposition of discipline,
against physicians and surgeons in Minnesota. 4. In the Fall of 1987,
the Board of Medical Examiners received a complaint against Petitioner,
alleging that he abused alcohol.
5. In May 1988, pursuant to an order issued by the Board of Medical
Examiners, Petitioner submitted to a mental and physical examination.
6. The Board of Medical Examiners Discipline Committee concluded that
the examination established that Petitioner suffered from serious
physical impairments and deteriorating mental abilities that rendered
him unable to practice medicine and surgery safely and that provided a
basis for disciplinary action by the Board.
7. Based on this evidence, the Discipline Committee held a conference
with Petitioner at which it recommended that Petitioner permanently
surrender his license to practice medicine in Minnesota, in order to
avoid the necessity of further disciplinary proceedings.
8. On June 15, 1988, as a condition for the Board of Medical Examiners
terminating its investigation, Petitioner agreed to permanently
surrender his license to practice medicine and surgery in Minnesota.
9. On June 15, 1988, the Board of Medical Examiners issued a
Stipulation and Order accepting Petitioner's surrender of his license to
practice medicine and surgery in Minnesota.
10. Subsequently, Petitioner requested the Board of Medical Examiners
to modify or void its June 15, 1988 Stipulation and Order.
11. Petitioner's request was denied by the Board of Medical Examiners
on February 14, 1989.
12. Subsequently, Petitioner requested the Board of Medical Examiners
to reconsider its decision not to modify or void its June 15, 1988
Stipulation and Order. 13. On May 17, 1989, the Board of Medical
Examiners affirmed its February 14, 1989 decision not to void or modify
the June 15, 1988 Stipulation and Order.
14. On May 17, 1989, the Board of Medical Examiners held that its June
15, 1988 Stipulation and Order was its final decision in Petitioner's
case.
15. The Secretary of Health and Human Services (the Secretary)
delegated to the I.G. the authority to determine, impose, and direct
exclusions pursuant to section 1128 of the Act. 48 Fed. Reg. 21662 (May
13, 1983).
16. On March 29, 1989, the I.G. excluded Petitioner from participating
in the Medicare program, and directed that he be excluded from
participating in Medicaid.
17. Petitioner's exclusions are effective until such time as his
license to practice medicine and surgery in Minnesota is restored and he
is reinstated as a provider.
18. Petitioner's exclusions are based upon section 1128(b)(4)(B) of the
Act.
19. Petitioner's assertion that the Board of Medical Examiners deprived
him of due process is not relevant. See sections 205(b) and
1128(b)(4)(B) of the Act.
20. There do not exist disputed issues of material fact in this case;
therefore, summary disposition is appropriate. See Federal Rules of
Civil Procedure, Rule 56.
21. Petitioner surrendered his license to practice medicine and surgery
while a formal disciplinary hearing was pending which concerned his
professional competence, professional performance, or financial
integrity within the meaning of section 1128(b)(4)(B) of the Act.
Findings 3-17.
22. The I.G. had discretion to exclude Petitioner from participation in
Medicare and to direct his exclusion from participation in Medicaid.
Section 1128(b)(4)(B) of the Act.
23. The exclusions imposed and directed by the I.G. are reasonable.
Section 1128(b)(4)(B) of the Act.
ALJ decision, pp. 3-5 (citations to record omitted).
ANALYSIS
I. There are no genuine issues of material fact in dispute.
Petitioner was excluded pursuant to section 1128(b)(4)(B) of the Social
Security Act, which permits the exclusion of an individual who
surrendered his or her license to provide health care while a formal
disciplinary proceeding was pending before a state licensing authority,
and such proceeding concerned professional competence, professional
performance, or financial integrity.
The ALJ properly identified the potential issues of material fact as:
(1) whether the proceeding before the Board of Medical Examiners was a
formal disciplinary proceeding; (2) whether the Board of Medical
Examiners was a state licensing authority; (3) whether this proceeding
concerned Petitioner's professional competence, professional
performance, or financial integrity; and (4) whether Petitioner
surrendered his license to practice medicine. Although Petitioner
objected to the ALJ's factual conclusions on several bases, he presented
no challenges which are relevant to the material facts.
1. The proceeding before the Board of Medical Examiners was a
formal disciplinary one.
The ALJ considered at some length the fact that the statute did not
define the term "formal disciplinary proceeding." He stated that it
was
reasonable to conclude from the face of the statute and legislative
history that the law referred to:
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 a license suspension or revocation. .
. .
ALJ decision, p. 6. The ALJ went on to say that this interpretation was
consistent with the purpose of the law:
[T]he law is intended to protect Medicare beneficiaries and Medicaid
recipients from individuals and entities who are demonstrated to be
untrustworthy. The 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 [as] untrustworthy as the individual or entity who
loses a license after litigating the issue of his or her
professional competence, performance, or financial integrity.
ALJ decision, pp. 6-7. The ALJ determined that Petitioner had not
challenged the veracity of the evidence offered by the I.G. (the
Stipulation and Order signed by the Petitioner and the affidavit of Dr.
George Martin, Chairman of the Discipline Committee of the Board of
Medical Examiners), and that this evidence established that "based on a
complaint filed against Petitioner, and the results of physical and
mental examinations, a disciplinary hearing had been implemented." ALJ
decision, p. 11.
On appeal, Petitioner did not specifically challenge the ALJ's legal
interpretation of the term "formal disciplinary proceeding," nor did
Petitioner assert that the proceedings in his case could not have
resulted in a license suspension or revocation. Petitioner's argument
that there were no "formal disciplinary proceedings" is not sufficient
to raise such a dispute of a material fact, however. We conclude, for
the following reasons, that the bases on which Petitioner challenged the
finding that there was a "formal disciplinary proceeding" do not raise
a
genuine issue of material fact:
o Petitioner asserted that the affidavit by Chairman Martin of the
Discipline Committee (I.G.'s Memorandum in support of Martin for Summary
Disposition, Ex.5), described the Board's usual procedures rather than
the particular procedures used in his case. Petitioner offered his own
affidavit, which stated that he and his attorney understood the
proceeding to have been "conducted informally under the aegis of an
illegally devised alcohol incident investigation" and that he never felt
his license was in jeopardy. Petitioner's Affidavit, pp. 6, 8.
Petitioner did not, however, deny the statement in the Martin Affidavit
that the Board of Examiners had ordered an evaluation of Petitioner's
health and held a conference with Petitioner at which the Committee
recommended that he permanently surrender his license "in order to avoid
the necessity of further disciplinary proceedings." Martin Affidavit,
p.2 Even if Petitioner could establish that he and his attorney
understood the proceedings differently, he offered no evidence to
contradict directly the evidence in the Martin Affidavit that the Board
of Examiners viewed its actions as an early stage of disciplinary
proceedings and communicated this to Petitioner.
o Petitioner challenged the statement in the Martin Affidavit that a
complaint had been filed against him. Whether a formal complaint had
been filed, however, is not material to the ALJ's decision.
Petitioner's own arguments acknowledge that, whether initiated by a
complaint or not, charges had been made against him. 3/
o Petitioner challenged the ALJ's reliance on the Stipulation and
Order, arguing that the stipulations were not reliable because he had
entered into them under circumstances where he was under duress and
where he had no real stake in the outcome of the proceedings since he
was not practicing medicine in Minnesota at the time. Petitioner did
not, however, specifically contradict his admissions in the stipulations
about actions taken by the Board or which the Board might have taken but
for his agreement. Even if he had challenged the veracity of his own
stipulations, incorporated in the Board Order, we would not look behind
them, particularly where he was represented by counsel. While
Petitioner argued that he had no opportunity to defend himself, he did
not specifically deny that a conference was held and that he agreed in
the Stipulation and Order to waive any right to a further hearing.
2. The Board of Medical Examiners is a state licensing authority.
Dr. Martin's affidavit stated that the Board of Medical Examiners was
"the state agency responsible for the licensure of and, if necessary,
the imposition of discipline against physicians and surgeons in
Minnesota." Petitioner did not dispute this statement, and in fact
admitted this in the first paragraph of the Stipulation and Order dated
June 15, 1988, which stated that Petitioner was "subject to the
jurisdiction of the Board of Medical Examiners from which he holds a
license to practice medicine and surgery." I.G.'s Memorandum in Support
of Motion for Summary Disposition, Exs. 1 and 5. While Petitioner
alleged that the Board was acting in an unauthorized way, this does not
raise a genuine issue of fact about whether the Board was a state
licensing authority.
3. The proceeding before the Board of Medical Examiners concerned
Petitioner's professional competence.
The ALJ correctly concluded that:
the plain meaning of the terms "professional competence" and
"professional performance" encompasses those circumstances where
license revocation proceedings concern the question of whether a
party's ability to provide health care in a competent and
professional manner has been compromised for reasons of health.
ALJ decision, p. 7. Petitioner said that he was disputing whether the
proceedings addressed his professional competence. Petitioner did not,
however, directly challenge the ALJ's finding that the proceedings
raised the question of whether Petitioner's ability to provide health
care in a competent and professional manner had been compromised for
reasons of health, nor the ALJ's legal conclusion that these
circumstances were encompassed within the terms "professional
competence" and "professional performance." Instead, Petitioner
raised
the following points: that the proceeding was not set up to evaluate
competence through a peer review, according to the usual and customary
practice; that the Board would not have denied his request to go to an
independent medical clinic if competency was at issue; that the Board
never checked on his professional work; that the Board's action was an
"alcohol evaluation," the findings of which were incidental and
irrelevant to health matters since the alcoholism treatment facility
which examined him did not have the requisite expertise and
independence; and that the Board had publicly stated in newsprint that
competency was not at issue in his case. He also argued that the
stipulations he entered into regarding his health were not reliable
because they did not represent a balanced medical point of view.
None of these points is sufficient to raise a genuine issue of material
fact. While Petitioner disputed whether he was in fact impaired by
alcohol and whether the Board of Examiners had followed acceptable means
of evaluating his health, he did not offer any evidence to contradict
the finding that the effects of alcohol on his health were at issue.
Contrary to what Petitioner implied, the ALJ was not relying on the
Stipulation and Order as establishing the facts of what Petitioner's
health was; rather, the ALJ correctly relied on this document as
establishing that Petitioner's health was at issue before the Board of
Examiners. Moreover, Petitioner provided no support other than his own
affidavit for his assertion that the Board had stated in newsprint that
competency was not involved; news articles previously submitted by
Petitioner pertain to peer review generally, but do not mention the
proceeding against Petitioner. Petitioner's affidavit, pp. 3-4 and
Petitioner's June 15, 1989 submissions. Finally, Petitioner admitted,
"I realize that they were 'investigating' for objective signs of alcohol
related health factors . . . ." Petitioner's Affidavit, p. 8.
4. Petitioner surrendered his license.
The ALJ correctly concluded that Petitioner surrendered his license to
the Board of Medical Examiners. Both before the ALJ and before us,
Petitioner claimed that he did not actually surrender his license,
contesting in the former instance the finality of such action, and in
the latter, that he had withdrawn his "surrender." The Stipulation
signed by Petitioner, however, shows that there is no basis for this
claim. The Stipulation reads, in part:
3. In the interest of settling this matter and avoiding the
necessity of further proceedings... Respondent [Petitioner] does
hereby consent that the Board of Medical Examiners may make and
enter an order as follows:
a. Respondent shall permanently surrender his license to practice
medicine and surgery in Minnesota effective upon service of this
order. . . .
I.G.'s Memorandum in Support of Motion for Summary Disposition, Ex. 1.
Petitioner's entire objection to the proceeding, other than vague
mention of duress, was that he did not realize the ramifications of his
surrendering his license and considered it tantamount to dropping a
license for nonpayment of dues. He may not have realized that a
surrender was a basis for excluding him from the Medicare and Medicaid
programs under the statute, but Petitioner was of course charged with
constructive notice of the unambiguous statutory provisions.
Because no genuine issues of material fact exist, 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. The ALJ properly
identified the potential issues of material fact. The Petitioner has
offered no challenges to the facts which are relevant and material. We,
therefore, affirm the ALJ's decision to grant summary disposition.
II. The ALJ's decision was fully supported by the law.
Petitioner argued that the fairness of the Board of Medical Examiners'
action against him was relevant to the ALJ's determination, and that his
exclusion was unreasonable.
In his submissions, Petitioner attacked the proceedings before the Board
of Medical Examiners at great length, claiming a lack of fairness and
impartiality, which he argued amounted to a denial of due process. 4/
Petitioner contended that the ALJ should have considered his arguments
on this issue.
The authority given to the I.G. to impose and direct exclusions pursuant
to section 1128(b)(4)(B) is based on actions taken by state licensing
boards. The statute clearly intended that the I.G. was to rely on the
state board actions, and did not intend that the I.G. examine the
fairness or propriety of the process which led to the actions of the
state boards.
We agree with the ALJ that whether the Board of Medical Examiners
deprived Petitioner of due process was not relevant in the hearing
before him. The ALJ's determination in this case was clearly consistent
with the applicable statutory authority. The hearing before the ALJ was
with respect to the decision of the I.G. Sections 1128(f)(1) and 205(b)
of the Act. Since the nature of the process before the Board of Medical
Examiners was not a proper factor for the I.G. to consider under the
statute, then neither was it appropriate for the ALJ's consideration.
The statute never intended that the party excluded could mount a
collateral attack on the state disciplinary procedure.
Since the fairness of the procedures before the Board of Medical
Examiners was not properly before the ALJ, there was clearly no error in
the refusal by the ALJ to consider Petitioner's arguments. The fairness
of the Board of Medical Examiners proceedings is therefore not before
us, since we decide only whether the ALJ's decision was correct.
The only question remaining for the ALJ's resolution was whether the
I.G.'s exclusions were reasonable. The ALJ properly concluded that the
I.G.'s exclusion determination was consistent with Congressional intent.
The legislative history demonstrated that the Act was designed to ensure
that health care providers who lose their licenses for reasons related
to their professional competence be prohibited from participating in
Medicare and Medicaid in all states until they reacquire their licenses
and demonstrate their trustworthiness. The Act was, furthermore,
intended to prevent providers from surrendering their licenses in order
to avoid exclusion before the conclusion of state proceedings. S. Rep.
No. 109, 100th Cong. 1st Sess. 7, reprinted in 1987 U.S. Code Cong. &
Admin. News 688.
Section 1128(b)(4)(B), read with ll28(b)(4)(A), provides that an
individual who surrenders his license to provide health care while a
formal disciplinary proceeding was pending before any state licensing
authority which concerned his professional competence may be excluded
from participation in the Medicare and Medicaid programs. Section
1861(r) of the Act defines a "physician" eligible for participation
in
the Medicare program as an individual who is "legally authorized to
practice medicine and surgery by the State in which he performs such
function or action." Section 1905(a)(5)(A) of the Act, which governs
the Medicaid program, defines physician services as those furnished by a
physician "to the extent such services may be performed under State
law."
With respect to Petitioner's argument that the national scope of his
exclusion was unreasonable, he was fully apprised that the surrender of
his license could have repercussions in other states. He agreed in the
Stipulation that the Board of Medical Examiners could reopen its
investigation of him and share investigative information with any state,
should he seek licensure in another state.
An exclusion of the Petitioner which is effective until he is able to
obtain a valid license in the State where he surrendered his license is,
therefore, not only reasonable, but clearly within the purview of the
statutory authority.
CONCLUSION
For the foregoing reasons, we affirm the ALJ's decision and adopt each
and every one of his Findings of Fact and Conclusions of Law.
Judith A. Ballard
Theodore J. Roumel U.S. Public Health Service
Alexander G. Teitz Presiding Panel Member
1. "State health care program" is defined by section 1128(h) of the
Act to include any State plan approved under Title XIX of the Act. The
term "Medicaid" is used hereafter to represent all State health care
programs from which the I.G. directed that the Petitioner be excluded.
2. Petitioner also contended that his exclusion somehow violated
federal labor and antitrust laws and the constitutional prohibition
against cruel and unusual punishment. The complete lack of relevance of
these contentions is so obvious that no discussion is necessary.
Similarly, we do not address the ruling of the ALJ that he was without
authority to grant Petitioner's request for appointment of counsel.
3. Petitioner stated that he never felt his license was in jeopardy
because "there had been no misconduct to discipline." Petitioner's
Affidavit, pp. 4-5. This may be read as merely meaning that he thought
he had not engaged in misconduct. To the extent it implies that only an
allegation of misconduct can lead to a disciplinary proceeding, we note
that, under Minnesota law, inability to practice medicine with
reasonable skill and safety to patients for reasons of mental or
physical health can be a ground for a disciplinary proceeding, even if
no resulting misconduct is alleged. Minn. Stat. section 147.091(l)(l).
4. We note that Petitioner was represented before the Board of Medical
Examiners by an attorney, who was also a medical doctor. See I.G.'s
Memorandum in Support of Summary Disposition, Ex.