Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Samuel W. Chang, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: October 3, 1990
Docket No. C-125
Decision No. 1198
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE
DECISION
Dr. Samuel W. Chang (Petitioner) and the Inspector General (I.G.) both
requested review by the Appellate Panel of a March 14, 1990 decision by
Administrative Law Judge Charles E. Stratton (ALJ). The ALJ's decision
affirmed 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 . . . .
While the ALJ affirmed the I.G.'s decision, the ALJ nevertheless
determined that the I.G.'s notice to Petitioner was not timely and so
was not reasonable within the meaning of the Act and regulations. As a
result, instead of allowing the exclusion to begin 20 days from May 18,
1989, the date of the I.G.'s notice, the ALJ made the five-year
exclusion from the Medicare and Medicaid programs effective in November
1988, one year after November 12, 1987, the date that the I.G. received
notice of Petitioner's conviction. 1/
As discussed below, we reject Petitioner's contentions that the
exclusion should be overturned. We conclude, moreover, that the ALJ had
no authority to change the effective date of the exclusion. We
therefore modify the ALJ's decision by holding that the five-year
exclusion which is required by federal law was effective 20 days from
May 18, 1989, the date of the I.G.'s notice.
I. Undisputed findings of fact and conclusions of law
The ALJ's findings of fact and conclusions of law (FFCL) numbers 1
through 18 are not disputed by either party on appeal. Petitioner's
review brief, p. 1; I.G.'s request for review, p. 1. We therefore
affirm and adopt the following FFCL for purposes of our decision:
1. Petitioner was a licensed medical doctor who had practiced medicine
in Poolesville, Maryland since 1979.
2. The Maryland Medicaid Fraud Control Unit discovered a billing
pattern by Petitioner that caused them to initiate an investigation in
late 1986.
3. Petitioner was charged by the State of Maryland with Medicaid fraud
for billing for services that were not performed as claimed.
4. On October 28, 1987, Petitioner pleaded guilty to one count of
Medicaid fraud.
5. Petitioner agreed to pay restitution of $35,540.95, and was given
five years probation.
6. Petitioner was "convicted" within the meaning of section 1128(i)
of
the Act.
7. On November 5, 1987, the State of Maryland suspended Petitioner from
participation in the State Medicaid program, retroactive to October 28,
1987; the State's suspension was based on Dr. Chang's October 28, 1987
conviction on one count of Medicaid fraud.
8. On November 12, 1987, the I.G. was notified by the State of Maryland
of Petitioner's conviction.
9. On January 7, 1988, Petitioner was notified by the I.G. that the
I.G. was proposing to exclude him for at least five years under the
minimum mandatory provisions of section 1128 of the Act from Medicare
and Medicaid because of his October 28, 1987 conviction. The I.G.
allowed him the opportunity to submit mitigating circumstances before
the I.G. made a final determination on the length of the exclusion.
10. By letter of February 4, 1988, Petitioner requested that the I.G.
withdraw the proposed exclusion.
11. By letter dated May 18, 1989, the I.G. informed Petitioner that he
had been excluded for five years under the minimum mandatory provisions
of section 1128(a)(1) of the Act and that such federal exclusion from
both Medicare and Medicaid would begin twenty days from the date of the
Notice.
12. By letter dated June 5, 1989, Petitioner requested a hearing before
an ALJ.
13. Petitioner admits that he was "convicted" of a criminal offense
within the meaning of section 1128(i) of the Act.
14. 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.
15. The I.G. properly excluded Petitioner from participation in the
Medicare and Medicaid programs for a period of five years as required by
the minimum mandatory exclusion provisions of section 1128(c)(3)(B) of
the Act.
16. Since the material facts are undisputed in this case, the
classification of Petitioner's conviction of a criminal offense as
subject to the authority of 1128(a)(1) is a legal issue.
17. The I.G. is entitled to summary disposition in this proceeding.
18. The I.G. is not barred by principles of double jeopardy, due
process, or laches from excluding Petitioner in this case.
ALJ Decision, pp. 4-5 (citations to record omitted).
II. Disputed findings of fact and conclusions of law
The I.G. requested review of three of the ALJ's conclusions of law.
These conclusions were as follows:
19. The I.G.'s Notice in this case was not timely and, thus, was
not reasonable within the meaning of the Act and Regulations.
20. The five year exclusion from Medicare and Medicaid programs
which is required by federal law in this case is hereby effective
beginning November 22, 1988, which is one year and twenty days from
November 12, 1987, the date that the I.G. received notice of
Petitioner's conviction (instead of May 18, 1989, the date of the
I.G.'s notice).
21. All Medicare reimbursements, if any, received by Petitioner
from November 22, 1988 to May 18, 1989 must be refunded to the
Medicare carrier because Petitioner was effectively excluded during
that period. 2/
ALJ Decision, p. 5.
III. Background
Petitioner was convicted on October 28, 1987 in Maryland State court of
one count of Medicaid fraud. Pursuant to Maryland law, Petitioner was
(on November 5, 1987) disqualified from further participation in the
Maryland Medicaid Program, retroactive to October 28, 1987, the date of
conviction. Ex. E.
By letter dated November 12, 1987, the State notified the I.G. of the
conviction of Dr. Chang and also of the Maryland Medicaid action. Ex.
F.
On January 8, 1988, the I.G. wrote Dr. Chang that as a result of his
conviction, the Department was required to exclude him from the Medicare
program and any state health care program for a period of at least five
years. This exclusion would be in addition to any sanction imposed by a
state under the authority of state law. The stated purpose of the
letter was to give Petitioner an opportunity to furnish any information,
"mitigating in nature," for the I.G. to consider before determining
the
period of exclusion. Petitioner was given 30 days to submit any
information before the I.G. issued the final notice of exclusion. Ex.
G.
An attorney for Petitioner replied within the 30-day period, offering
not only mitigating circumstances, but also purported reasons why the
proposed exclusion should be withdrawn. Ex. H. Unfortunately, nothing
further was done for over 15 months; the delay was admittedly due to
administrative error. ALJ Decision, p.9.
On May 18, 1989, the I.G. sent Petitioner a letter informing him that he
was being excluded from participation in the Medicare program and any
state health care program, based on his conviction in state court.
These exclusions were effective 20 days from the date of the letter.
Petitioner was told that since there were no aggravating circumstances,
the exclusion would be for the statutory five-year minimum period.
Petitioner requested a hearing before an ALJ; this was held and a
decision rendered without any claimed delay.
IV. The ALJ's Decision
Petitioner argued before the ALJ that the I.G.'s exclusion notice was
not issued in a timely manner, since it was issued some 17 months after
the I.G. was notified of Petitioner's conviction. 3/ This was, claimed
Petitioner, a violation of section 1128(c) of the Act, which requires
the I.G. to "promptly notify" an individual of an exclusion. In
addition, Petitioner contended that the I.G.'s untimely exclusion
resulted in an "inequitable tacking on of additional time to the State's
Medicaid exclusion." Petitioner's br., pp. 7-12. Petitioner also argued
that the doctrines of laches, equitable estoppel, and fairness dictated
relief, and either there should be a reduction in the number of years
Petitioner was excluded, or the effective date of the exclusion should
be modified.
The ALJ concluded that the doctrines of laches and equitable estoppel
did not apply. ALJ Decision at 9. The ALJ did, however, find that
issuance of the exclusion notice by the I.G. some 17 months after the
I.G. became aware of the conviction "was not timely and not reasonable
notice." Id. His basis for this finding was that sections 1128(c) and
1128(f)(1) of the Act and section 1000.123 of the regulations required
"reasonable notice and an opportunity for a timely hearing," and the
delay of 17 months in issuing the notice was "contrary to those
provisions." Id.
The ALJ went on to say that, while neither the I.G. nor an ALJ had the
authority to reduce the minimum five-year exclusion period required by
the statute, he did have authority --
to correct mistakes which impact in such a way so as to deny a
petitioner due process or fundamental fairness and which are in
direct contradiction to the specific requirements of the Act and
the Regulations.
Id.
The ALJ concluded that "to correct the mistake made and to insure
compliance with the Act," the notice to Petitioner should have been
issued within a reasonable time from the date the I.G. learned of
Petitioner's conviction. The ALJ then determined that one year from the
date of notification of conviction would be "a reasonable period"
to
effect an exclusion. Id. at 10. Since the I.G. was notified by letter
on November 12, 1987, the ALJ concluded that the exclusion, to be
reasonable, should have been effective within one year from that date,
and he made the effective date of the five-year exclusion November 12,
1988. Id. (See n. 1 above.)
V. Analysis
On appeal here, Petitioner did not challenge FFCL Nos. 13 through 15,
regarding why the mandatory exclusion provisions of section 1128(a)(1)
of the Act applied to Petitioner. 4/ Instead, Petitioner argued that
the ALJ erred in not addressing the issue of whether the permissive
exclusion provisions of section 1128(b) were also applicable.
The I.G. argued that the ALJ did not have the authority to make
Petitioner's exclusion retroactive from the date of the I.G.'s notice of
exclusion. The I.G. maintained that there is no requirement that the
I.G. must notify an entity of an exclusion within a certain time from
the date the I.G. learns of a criminal conviction.
A. The ALJ properly found that the five-year mandatory
exclusion provisions of section 1128(a) of the Act
applied to Petitioner's conviction.
Petitioner maintained that the section 1128(a) mandatory exclusion must
be construed as a sanction available in addition to, rather than in lieu
of, the permissive exclusion under section 1128(b). Petitioner cited S.
Rep. No. 109, 100th Cong., 1st Sess. 7, reprinted in 1987 U.S. Code
Cong. & Ad. News 687, as support for his position.
Petitioner argued that Petitioner was charged by the State of Maryland
with Medicaid fraud for billing for services that were not performed as
claimed. (FFCL No. 3) Petitioner contended that such a finding should
invoke the permissive provisions of section 1128(b)(6) of the Act, which
are designed to address the specific offense of fraudulent billing.
We find no merit in Petitioner's arguments. Petitioner pleaded guilty
to one count of Medicaid fraud. FFCL No. 4. 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, the permissive
exclusion provisions of subsection (b) focus on different circumstances
from those raised here, such as where an individual's conviction does
not relate to the Medicare or Medicaid programs. See Jack W. Greene,
DAB App. 1078 (1989), aff'd, 731 F. Supp. 835, 839 (E.D. Tenn. 1990);
Surabhan Ratanasen, M.D., DAB App. 1138 (1990).
We conclude that the ALJ's decision in this case, concerning the use of
the mandatory exclusion provisions, was proper based on our analysis in
the Greene decision, and we find no reason to reconsider Greene based on
Petitioner's arguments in this case.
Finally, we conclude that Petitioner misconstrued the Senate Report.
While Petitioner cited a portion of the Senate Report to support his
position, Petitioner failed to consider the Senate Report's explanation
of the purpose of the section. 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 687.
Accordingly, we uphold the ALJ's conclusion that the mandatory exclusion
provisions, and not the permissive exclusion provisions, were
appropriately used in this case.
B. The ALJ could not change the effective date of the exclusion.
We consider first whether the prescribed duties of the ALJ gave him any
authority to decide, as he did, that the I.G. did not give Petitioner
timely and reasonable notice, and to attempt to correct this failure by
changing the effective date of the exclusion.
The duties of the ALJ are stated in 42 C.F.R. 1001.128(a). A hearing
before an ALJ on the exclusion of an individual is on the following
issues:
(1) Whether he or she was, in fact, convicted; (2) Whether the
conviction was related to his or her participation in the delivery
of medical care of services under the Medicare, Medicaid, or social
services program; and (3) Whether the length of the suspension is
reasonable.
The question here is not one of the "length" of the suspension. The
suspension from Medicare is the mandatory minimum in the statute of five
years. The ALJ can not decrease the time, nor can he decide when it is
to begin. The statute provides the exclusion shall be effective "at
such time" as may be specified in regulations. Section 1128(c)(1). 5/
The regulation provides that the suspension is to begin 15 days from the
date on the I.G.'s notice. 42 C.F.R. 1001.123(a). The ALJ has no power
to change either the length of the exclusion or its beginning date.
In Frank T. W. Chin, Jr. M.D., the Appeals Council of the Social
Security Administration upheld an I.G. exclusion which had the effect of
making the State Medicaid exclusion substantially longer than the
Medicare exclusion. Docket No. 000-67-0034 (1988), Ex. O. The State
suspended Dr. Chin from the Medicaid program for one year based on
conviction of Medicaid fraud. The I.G. then suspended him from the
Medicare program for ten years based on the same conviction, and
directed that he be excluded form Medicaid programs for the same length
of time. Dr. Chin contended that the beginning date of the I.G.
suspension should coincide with the beginning date of the one-year State
Medicaid suspension; otherwise, the I.G.'s actions amounted to an
11-year suspension.
The Appeals Council held that the beginning date set by the I.G. was
correct under the law and regulations, even though the practical effect
of the I.G. action was an 11 year suspension. Section 1902(a)(39) of
the Act and 42 C.F.R. 100l.123(b)(5) require the State to suspend the
person from participation in the Medicaid program for the same period as
set for the Medicare suspension. The regulations also provide that the
Medicare suspension is to begin 15 days from the I.G.'s notice (to which
the I.G. has added five days for mailing), 42 C.F.R. 1001.123(a), and
the suspension under Medicaid must be effective on the date established
by the I.G. for the Medicare suspension. 42 C.F.R. 1002.211(a).
In holding that the beginning date set by the I.G. was correct, the
Appeals Council concluded that, under 42 C.F.R. 1002.211(b), "the State
may impose its own sanction which can be effective before, or extend
beyond, the mandatory period set by OIG." Chin at 14.
We agree with the analysis in Chin and conclude that the ALJ erred in
disregarding statutory and regulatory provisions on the effective date
of the exclusion.
C. Reasonable notice does not require prompt notice.
Even if we assume that the ALJ could properly decide whether the notice
given Petitioner was reasonable, it was error for him to decide that the
notice was not reasonable, and so did not comply with statutory and
regulatory requirements.
The ALJ referred in his decision here to his prior decision in Thomas C.
Chestney, D.M.D., DAB Civ. Rem. C-53 (1989), so we examine Chestney in
some detail. Dr. Chestney, a dentist, was convicted of a criminal
offense related to the delivery of Medicaid services in a Pennsylvania
State court on January 19, 1988. Pennsylvania law provided for a
five-year termination from Medicaid of anyone convicted of a
program-related crime, to begin as of the date of conviction. Chestney
was terminated from the State Medicaid program for five years from the
date of conviction, or from January 19, 1988 to January 19, 1993.
The I.G. then excluded Chestney from the Medicare program for a
five-year period beginning August 14, 1988. He also notified
Pennsylvania of Chestney's exclusion from Medicare and directed the
State to exclude Chestney from the Medicaid program for at least the
"same period" of time as the federal exclusion from Medicare.
Pennsylvania then sent Chestney another notice excluding him from the
State Medicaid program for five years, beginning this time on August 14,
1988, the same date as the I.G. exclusion.
Chestney argued that since Pennsylvania had already excluded him from
Medicaid for five years, beginning seven months prior to the federally
directed Medicaid exclusion, this second State exclusion should last
only four years and five months, rather than five years. In effect, his
argument was that the I.G. added seven months to his five-year Medicaid
exclusion by delaying sending the exclusion notice for seven months.
The relief he sought was to have the federally directed Medicare
exclusion run concurrently with the original State Medicaid termination.
The ALJ found that Chestney's being effectively excluded from Medicaid
for a period in excess of five years was a result for which there was no
relief. The ALJ stated that the Act and regulations provide no
discretion for reducing the five-year minimum period of exclusion or for
altering the effective dates of the five-year period; the State followed
the I.G.'s directive to exclude Chestney for the same period as the I.G
exclusion.
The ALJ found that he had no authority to decide any issues with respect
to the State-imposed termination. The ALJ then considered whether the
I.G. acted reasonably. The ALJ found that the timing of the I.G.'s
notice was reasonable, considering that "seven months is a reasonable
amount of time" for the I.G. to obtain "conclusive information"
of the
program-related conviction, to make a determination regarding it, and to
issue his notice of the determination. The ALJ added a footnote to this
finding, which he cited in this case:
A delay in issuing a notice of exclusion much beyond seven months
from the date of conviction in a minimum five year exclusion case,
like this one, might result in the necessity of an evidentiary
hearing to determine if the I.G. issued the notice in a timely
fashion as required by section 1003.123.
ALJ decision, n.8. 6/
Actually, the situation here is different from Chestney in one important
respect. In that case, there were two exclusions from the State
Medicaid program. The first, dating back to the conviction, was for
five years. Then the second was for five years from the date of the
I.G. exclusion, as required by law. In this case, there was no reason
for Maryland to issue a second exclusion. The first exclusion was an
indefinite one, a termination from the program forever, if not
reinstated. The I.G. did not make this any longer, by waiting for
several months, because Dr. Chang was already out of the State Medicaid
program.
The ALJ in the footnote to the Chestney decision stated that the I.G.
notice of exclusion had to be issued in a "timely fashion" as required
by regulation. 7/ The regulation (section 1001.123) does not use this
language, or, in fact, anything like it. The section states that
whenever the OIG has conclusive information of conviction it will "give
the party written notice." As Petitioner pointed out in his brief
before the ALJ, "[n]either the statute nor the regulations spell out a
time frame in which the Inspector General should act to exclude nor a
time frame as to when notice should be given." Petitioner's br., p. 7.
Section 1128(d)(2) of the Act does use the word "promptly" when it
provides that the "Secretary shall promptly notify each appropriate
State agency" of the facts and circumstances of each exclusion by the
I.G. requiring action by the state for exclusion under state health
care programs. (Emphasis added.) In addition, the statute provides
that the Secretary shall "promptly notify" the appropriate state agency
having responsibility for licensing or certification of the individual
or entity excluded. Section 1128(e)(1). The statute does not use the
word "promptly" when it speaks of notice to the individual or entity
being excluded. It states only that the individual or entity is
entitled to "reasonable notice and opportunity for a hearing." Section
1128(f)(1). 8/ It is certainly arguable that the omission of the word
"promptly" in one section of the statute, when it is used in other
sections in close proximity to it, is not unintentional.
Further, the regulation does not use either "promptly" or "timely"
with
respect to the notice to be given to the person proposed to be excluded.
The reference is merely to "written notice." 42 C.F.R. 1001.123. The
words "reasonable notice" do not mean the same as "prompt notice"
or
"timely notice." They refer to giving the individual such notice as
is
reasonably calculated to reach him in adequate time for him to request a
hearing, notify him what the proceeding is about, and inform him how he
is to go about requesting a hearing. Such information is specifically
required by 42 C.F.R. 1001.123.
In White v. Mathews, 559 F.2d 852, 858 (2d Cir. 1977), the court said
that it read the words "reasonable notice and an opportunity for a
hearing" in section 205(b) of the Act "as giving the claimant a right
to
a hearing within a reasonable time." Dr. Chang was given notice of his
right to a hearing as soon as the I.G. gave him final notice of
exclusion from the Medicare program, and was given a hearing within a
reasonable time after he requested one. That is all the statute and the
regulation require. They do not require that the I.G. act promptly
after he notifies the person that he intends to exclude him and asks if
there are any extenuating circumstances before final exclusion follows.
The ALJ relied on the case of Ram v. Heckler, 792 F.2d 444 (4th Cir.
1986), to support his modification of the effective date of the
exclusion, as did Petitioner. Dr. Ram pleaded guilty to Medicare
fraud, and was notified by the Department of Health and Human Services
that because of the conviction he would be suspended for one year as a
Medicare provider, under the version of section 1128 of the Act then in
effect. Dr. Ram filed his action to stay the suspension pending an
administrative hearing, and also filed a request for such a hearing.
The statute then in effect provided that a suspended physician was
"entitled to reasonable notice and an opportunity for a hearing,"
the
same language now in section 1128(f)(1). As Petitioner pointed out, the
Court of Appeals held that an administrative presuspension hearing was
not required, but Dr. Ram was entitled to a "prompt postsuspension
hearing that should proceed and be concluded without unreasonable
delay", to satisfy the requirements of what is now section 1128(f)(1)
and the due process clause of the Fifth Amendment. Ram at 447.
The holding in Ram does not support either the ALJ or the Petitioner.
There is no contention here that Dr. Chang did not receive a "prompt
postsuspension hearing", nor that the hearing did not proceed without
unreasonable delay. The interesting fact in Ram, which was not even
referred to by the court, is that almost three years elapsed between the
doctor's conviction and the notification of his suspension as a Medicare
provider. 9/
The case of Hall v. Bowen, 830 F.2d 906 (8th Cir. 1987), appears to be
the only case which considers whether administrative delay in proceeding
with a sanction may be a violation of the statutory right to a hearing
within a reasonable time or a denial of due process. The proceedings
against Dr. Hall for the quality of services furnished by him were
initiated by a professional standards review organization (PSRO), as
provided for by statute at that time. The PSRO's initial decision to
recommend imposition of a sanction was in January 1981. The I.G.
actually notified Dr. Hall of his exclusion from the Medicare and
Medicaid programs in July 1983. He requested a hearing before an ALJ,
and then asked for review by the Appeals Council, with the final
decision coming in June 1985. Dr. Hall argued that a delay of more than
four years between the PSRO's initial decision to recommend the
imposition of a sanction and the final administrative decision was a
violation of his statutory right to a hearing within a reasonable time
and a denial of due process.
The Court said that neither the specific section of the Social Security
Act providing for reasonable notice and opportunity for a hearing, nor
section 205(b) referred to in that section, "impose a mandatory time
limit on administrative review." Hall at 909. The court referred to
Heckler v. Day, 467 U.S. 104 (1984), where the Supreme Court reversed
the imposition by a district court of a 90-day time limit, under section
205(b), on the resolution of appeals from denials of Social Security
disability benefits. The Court there noted that the failure of Congress
to specify a time limit in section 205(b) must have been intentional,
because that section was part of a complex statute which sometimes
imposes a time limit on administrative review, and sometimes does not.
The court in Hall went on to say that while section 205(b) did not
specify mandatory deadlines, a number of courts have held that this
section does require the Secretary "to provide a hearing within a
reasonable time." Hall at 910. The court then considered whether the
delay in that case was reasonable. While the court considered both
presuspension and postsuspension delay, we consider only the former,
since there is no claim here of any delay after the formal exclusion.
The period in Hall between the first recommendation of any sanction and
the actual imposition was about two and one-half years. The court said
that before any agency action could be set aside for lack of
punctuality, the person claimed to be aggrieved must show how the delay
prejudiced him, citing Panhandle Cooperative Association v. EPA, 771
F.2d 1149, 1153 (8th Cir. 1985). Dr. Hall could not demonstrate any
prejudice before any adverse administrative action against him, since he
was not prohibited from participating in either the Medicare or Medicaid
programs. (The court mentioned, but did not rely on the fact that Dr.
Hall apparently refused to cooperate.)
Dr. Chang was similarly not prejudiced by the delay of the I.G. in
imposing the sanction. During the period between the first notice of
intent to sanction and the actual exclusion, Dr. Chang was free to
participate in the Medicare program in any state. He was also able to
participate in Medicaid in any state but Maryland, and in fact did have
Medicaid patients in the District of Columbia. Petitioner's br., p. 11.
He was excluded from Medicaid in Maryland because that State took action
against him under its own laws, based on his conviction, not because of
any action by the I.G. He may have been inconvenienced by uncertainty,
but there was no prejudice in the legal sense.
D. The ALJ's solution is impractical.
Even if the ALJ had power to affect the time when the exclusion began,
it is obvious from the difficulties here that a solution, intended by
him to be equitable, has insuperable practical problems. The ALJ
ordered that the Petitioner return any Medicare reimbursements received
by him from November 22, 1988 to May 18, 1989. Unfortunately, this does
not take into account the problems posed. Technically, Medicare is an
insurance program to reimburse those insured under Medicare a percentage
of covered medical bills. While a participating provider agrees to
accept what Medicare pays as payment in full, not all doctors do so. In
that case, the patient has to pay the doctor and then seek reimbursement
of a percentage of the bill (such as 80%) from Medicare. It would
obviously be impractical to go through the doctor's records and see
which patients paid him, even possibly in cash. In addition, it would
also be a time-consuming task to review records to verify that Medicare
patients were included.
Finally, as the I.G. recognized, another problem is that the doctor
could be licensed in another state and could be receiving money from
Medicaid in another state during the period made retroactive by the
ALJ's revision. In this case, Petitioner's attorney admitted that
Petitioner was in fact practicing in the District of Columbia during the
retroactive period. Thus, if Petitioner would be required to return any
Medicaid reimbursements received by him from November 22, 1988 to May
18, 1989, practical problems, requiring verifying Medicaid payments from
any state other than Maryland, would also apply to those reimbursements.
VI. Conclusion
Based on the foregoing, we modify the ALJ's decision by reversing his
conclusion to change the effective date of Petitioner's five-year
exclusion to November 12, 1988; we reverse FFCL No. 19 and FFCL No. 20,
and delete FFCL No. 21. We uphold Petitioner's five-year exclusion
effective 20 days from the date of the I.G.'s notice, May 18, 1989.
_______________________________ Judith A.
Ballard
_______________________________ Theodore J.
Roumel U.S. Public Health Service
_______________________________ Alexander G.
Teitz Presiding Panel Member
1. The regulation (42 C.F.R. 1001.123) provides that the exclusion
will be effective beginning 15 days from the date on the notice from the
I.G. to the practitioner. The I.G. has added five days to allow for
receipt by mail. The exclusion here would therefore be effective 20
days from May 18, 1989, the date of the I.G.'s notice. The ALJ in his
decision (page 10) purported to make the exclusion effective November
12, 1988, one year from the date the I.G. received notice of
Petitioner's conviction. In FFCL No. 20 the ALJ attempted to make the
exclusion effective November 22, 1988, which he stated was one year and
twenty days from November 12, 1987. Since we reverse the ALJ on his
change in the beginning date of the five- year exclusion period, we need
not be concerned with any discrepancy in the dates the ALJ set.
2. The I.G. claimed that any refunds should apply to Medicaid
payments (from states other than Maryland) as well as to Medicare
payments. As the I.G. pointed out, however, there was no need to
consider FFCL No. 21 if we agreed with the I.G. on FFCL Nos. 19 and 20
and did not modify the beginning date of the exclusion set by the I.G.
Since we agree with the I.G. and reverse the ALJ on FFCL Nos. 19 and 20,
we need not address the question raised in FFCL No. 21 as to payments
between the modified date set by the ALJ and the original date set for
the beginning of the exclusion by the I.G. We therefore modify the ALJ
decision by deleting FFCL No. 21.
3. The I.G. noted that, in fact, Petitioner was not excluded until
19 months after the date of receiving the notice of conviction and 17
months from the date that the I.G. initially notified Petitioner that he
would be excluded. I.G.'s request for review, p. 2, n.3.
4. In fact, the opening sentence of Petitioner's review brief was:
"Petitioner does not dispute the findings of fact of the Administrative
Law Judge and adopts them for the purposes of this review." Petitioner
also did not contest before us the ALJ's conclusions on the laches,
equitable estoppel, or double jeopardy arguments raised below.
5. Section 1128(c), as revised in 1987, requires an effective date
and reasonable notice consistent with paragraph (2) of section 1128(c).
Paragraph (2) merely requires that "an exclusion shall be effective with
respect to services furnished to an individual on or after the effective
date of the exclusion." The regulations in effect before the 1987
revision provide for the timing and the notice of the exclusion in a
manner that is fully consistent with the revised statutory provisions.
See 42 C.F.R. 1001.123, providing for notice of suspension based upon a
criminal conviction related to Medicare or Medicaid and for the effect
of the suspension.
6. Section 1001.123 of 42 C.F.R. (cited by the ALJ as 1001.323)
states, in part:
(a) Whenever the OIG has conclusive information that a
practitioner or other individual has been convicted of a crime
related to his or her participation in the delivery of medical
care or services under the Medicare, Medicaid, or the social
services program, it will give the party written notice that
he or she is suspended from participation in Medicare
beginning 15 days from the date on the notice.
7. The ALJ made no mention in this case of any necessity for the type
of evidentiary hearing referred to in the Chestney footnote. Presumably
he thought the time involved was so long as to be untimely without any
need for evidence.
8. Section 1128(f)(1) of the Act provides for reasonable notice and
opportunity for a hearing to the same extent as is provided in section
205(b). Section 205(b) also speaks of "reasonable notice and
opportunity for a hearing."
9. The other two cases cited by the ALJ, Federal Deposit Insurance
Corp. v. Mallen, 486 U.S. 230 (1988), and Brock v. Roadway Express,
Inc., 471 U.S. 252 (1987), discuss procedural due process and
postsuspension remedies generally, but have no pertinence