Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Catherine L. Dodd, R.N.
Petitioner,
- v. -
The Inspector General.
DATE: July 16, 1992
Docket No. C-348
Decision No. 1345
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION
The Inspector General (I.G.) appealed the decision of Steven T.
Kessel,
Administrative Law Judge (ALJ), vacating the five-year
mandatory
exclusion of Petitioner Catherine L. Dodd, R.N., from participation
in
Medicare and certain state health care programs. 1/ Catherine Dodd,
DAB
CR184, at 3 (1992) (ALJ Decision). The I.G. had originally imposed
the
exclusion of Petitioner from Medicare and Medicaid under
sections
1128(a)(1) and (c)(3)(B) of the Social Security Act (42 U.S.C.
.
1320a-7(a)(1) and (c)(3)(B)) on the basis of Petitioner's plea of
guilty
to, and conviction of, a criminal misdemeanor under Texas state
law.
The conviction followed an investigation of certain actions taken
by
Petitioner while employed as a registered nurse by the
Brookhaven
Nursing Center during the fall of 1989. The ALJ found that
the I.G. had
not established that Petitioner's offense was related to the
delivery of
an item or service under Medicare or Medicaid as required
by
section.1128(a)(1). For the reasons stated below, we affirm the
ALJ
Decision. 2/
FINDINGS OF FACT AND CONCLUSIONS OF LAW
(FFCLs)
The ALJ Decision was based on the following FFCLs:
1. On May 31, 1990, Petitioner pled guilty to,
and was convicted
of, the offense of knowingly or intentionally making a
false written
statement to obtain property, in violation of Texas Penal
Code
Annotated, Section 32.32.
2. Petitioner admitted that the criminal
activity for which she was
convicted occurred on October 1, 1989.
3. The criminal charge against Petitioner, her
plea of guilty and
conviction, resulted from an investiga-tion conducted by
the Texas
Attorney General's Medicaid Fraud Unit beginning November 27, 1989
at
the Brookhaven Nursing Center in Cheyenne, Texas.
4. Brookhaven Nursing Center is a medical
facility receiving funds
under the Texas Medicaid Program.
5. Petitioner admitted to Nora E. Longoria, the
investigator for
the Texas Attorney General's Medicaid Fraud Unit, that she
had converted
for her own use medications provided for four patients (Peggy
Bang,
Dorothy Crowson, Creda Hoga, and James Martin) and had falsified
these
patients' treatment records.
6. On November 28, 1989, Petitioner signed a
statement which was
witnessed by Ms. Longoria, in which Petitioner admitted
that, starting
around the beginning of October, 1989, she had converted to
her own use
medications provided for residents at the Brookhaven
Nursing
Facility..7. In her statement, Petitioner admitted converting
to her
own use medication provided for patients, including Creda Hoga,
Dorothy
Crowson, Peggy Bang, Gertrude Clark, and James Martin.
8. James Martin was not a resident at the
Brookhaven Nursing
Facility on October 1, 1989.
9. Creda Hoga was a resident at the Brookhaven
Nursing Facility on
October 1, 1989, and was a Medicare beneficiary occupying
a Medicare
skilled nursing facility bed as of that date.
10. Dorothy Crowson was a resident at the Brookhaven
Nursing
Facility on October 1, 1989, and was eligible for Medicaid.
11. The I.G. did not prove that Brookhaven Nursing
Facility
presented a claim to a Medicaid program for items or services
provided
to Dorothy Crowson on October 1, 1989.
12. Peggy Bang was a resident at the Brookhaven
Nursing Facility on
October 1, 1989, and was eligible for Medicaid.
13. The I.G. did not prove that Brookhaven Nursing
Facility
presented a claim to a Medicaid program for items or services
provided
to Peggy Bang on October 1, 1989.
14. The I.G. did not prove that Gertrude Clark was a
resident at the
Brookhaven Nursing Facility on October 1, 1989, and did not
prove that
Gertrude Clark was either a Medicare beneficiary or a
Medicaid
recipient.
15. The Judgment of Conviction which was entered
against Petitioner
does not name the individual whose medical records were
falsified by
Petitioner.
16. The I.G. has not established by extrinsic
evidence the name of
the individual whose medical records Petitioner was
convicted of
falsifying.
17. Petitioner was convicted of a criminal offense
within the
meaning of section 1128(i) of the Act.
18. The I.G. did not prove that Petitioner was
convicted of a
criminal offense related to the delivery of an item or service
under
Medicare or Medicaid..19.
There are no disputed issues of
material fact in this case and summary
disposition is appropriate.
20. The I.G. has not proven that he has authority to
exclude
Petitioner pursuant to section 1128(a)(1) of the Act.
ALJ Decision at 3-5 (citations omitted).
In its appeal, the I.G. specifically objected to FFCL Nos. 16, 18
and
19. See generally The Inspector General's Appeal Brief, dated
5/26/92
(I.G. Br.). While the I.G. did not specifically object to FFCL
No. 20,
the I.G. objected to it by implication in its argument and we address
it
in this decision. The I.G. did not object to FFCL Nos. 1-15 and 17,
and
we therefore affirm and adopt those FFCLs without further discussion.
ANALYSIS
The Board has a limited role in reviewing an ALJ's decision in
an
exclusion case. The standard of review on disputed issues of fact
is
whether the ALJ Decision is supported by "substantial evidence."
The
standard of review on disputed issues of law is whether the ALJ
Decision
is "erroneous." Joyce Faye Hughey, DAB 1221, at 11 (1990);
Lakshmi N.
Murty Achalla, DAB 1231, at 7 (1991). Below, we address both
the
general issues raised by the I.G. on appeal and the
particular
objections stated in the I.G.'s exceptions to certain of the
FFCLs.
Under the applicable standard of review, we conclude that the
disputed
FFCLs were correct and supported by substantial evidence. Thus
we
affirm and adopt each of the four contested FFCLs and affirm
the
vacating of the five-year exclusion imposed on Petitioner.
Section 1128(a)(1) of the Social Security Act provides for the
mandatory
exclusion of any individual or entity that has been convicted of
a
criminal offense related to the delivery of an item or service
under
Medicare or Medicaid. Section 1128(c)(3)(B) provides that the
minimum
period of exclusion shall be five years. In this case, there is
no
question that Petitioner was convicted of a criminal offense based
on
her plea of guilty. 3/ The issue is whether the conviction related
to
the delivery of an item or service under Medicare or.Medicaid,
a
necessary element under section 1128(a)(1). In order to
determine
whether this element has been found, we first must examine
the
conviction itself and the circumstances surrounding the conviction.
I. The ALJ Did Not Err in Finding that the
I.G. Did Not Establish
by Extrinsic Evidence the Name(s) of the Individual(s)
Whose Medical
Records Petitioner Was Convicted of Falsifying.
The I.G. argued on appeal that the ALJ erred in finding that the I.G.
had
not established by extrinsic evidence the name of the individual
whose
records Petitioner was convicted of falsifying (FFCL No. 16). The
I.G.
argued essentially that it had shown that there were five named
individuals
whose records were falsified by Petitioner, including Creda
Hoga, Peggy Bang,
Dorothy Crowson and James Martin. 4/ I.G. Br. at 7.
The I.G. argued
that the "Information," 5/ to which the Judgment of
Conviction and Sentence
referred, stated that the false written
statement to which Petitioner pled
guilty referred to entries on the
records of multiple patients rather than to
a single false statement
referencing a single patient. Therefore, the
I.G. argued, it was clear
that the conviction was based on Petitioner's
actions regarding each of
the named patients. Id. at 7, 8..The criminal
Judgment of Conviction
and Sentence states that Petitioner pled guilty to the
misdemeanor
offense of making a false statement to obtain property.
While the
Judgment of Conviction itself does not specify in any more detail
the
circumstances surrounding Petitioner's conviction, it does
expressly
state that Defendant pled guilty to the Information presented
herein.
I.G. Ex. 1. The Information states that Petitioner --
did then and there intentionally and knowingly made [sic]
a
materially false written statement to obtain property
for
herself, to-wit, she made false entries on patients
[sic]
medical records indicating that patients were
receiving
medication, when in fact [Petitioner] was receiving
medication.
I.G. Ex. 7 (emphasis added).
Thus, Petitioner's conviction for a single false written
statement
evidently related to false entries in the medical records of at
least
two patients, as is indicated by the use of the words "entries"
and
"patients" in the Information. Despite the fact that the I.G.
raised
this argument below in its memorandum supporting its second
renewed
motion for summary judgment (at 4), the reference in the Information
to
the multiple patients and entries was not addressed by the ALJ,
who
questioned throughout his decision "the name of the individual"
whose
medical records Petitioner was convicted of falsifying and
concluded
that the single count of making a false statement to obtain
property
related to the falsification by Petitioner of the records "of at
least
one" patient. See, e.g., ALJ Decision at 5, 7, 10.
Nevertheless, we do not find that correcting this oversight requires
a
different outcome in the ALJ Decision. While the Information refers
to
(and, therefore, Petitioner's conviction relates to) false entries
in
the records of multiple patients, the record still does not
establish
the number and names of the patients to which the false entries
refer.
Six named patients were identified by the Texas Medicaid Fraud
Control
Unit and Petitioner's voluntary statement as being the victims
of
Petitioner's actions. See I.G. Exs. 2, 8. However, we do not
know
whether the Information is referring to two, three or all six
patients,
nor can we rule out the possibility that the Information is
referring to
other patients not named in the investigatory report or the
voluntary
statement. There is nothing in the record which would
indicate that the
Texas criminal court was relying on the investigatory
report or the
voluntary statement for the names of some.or all of the victims
on which
the guilty plea was based. We do not have any evidence that
these two
documents were even presented to the criminal court.
Moreover, the
record contains no transcript of any court proceedings which
indicates
exactly to which false entries on patients' records Petitioner
was
pleading guilty. Therefore, while we are able to identify at least
some
of the patients in whose records Petitioner allegedly made
false
entries, we are unable to identify to which of these patients, if
any,
Petitioner's conviction related. For this reason, the ALJ
correctly
evaluated the evidence and concluded in FFCL No. 16 that the I.G.
did
not establish by extrinsic evidence which patients' records
Petitioner
was convicted of falsifying.
II. The ALJ Did Not Err in Finding that the I.G.
Did Not Prove that
Petitioner Was Convicted of a Criminal Offense Related to
the Delivery
of an Item or Service Under Medicare or Medicaid.
The I.G. argued that the ALJ erred in concluding that the I.G. had
failed
to show that Petitioner was convicted of an offense relating to
the delivery
of an item or service under Medicare or Medicaid (FFCL No.
18). I.G.
Br. at 10-17. The I.G. also argued by implication that the
ALJ erred in
concluding that the I.G. had not proven that he had
authority to exclude
Petitioner pursuant to section 1128(a)(1) of the
Act (FFCL No. 20).
A. The I.G. Failed to Show a Link to a
Patient Receiving
Items or Services Under Medicare or Medicaid.
The I.G. argued that by erroneously concluding that the I.G. had failed
to
establish the name of the patient Petitioner's conviction related to,
the ALJ
also erred in finding that there was no link to the Medicare or
Medicaid
programs. I.G. Br. at 10-17. The I.G. argued that the ALJ did
not
give sufficient weight to the fact that Creda Hoga, who was one of
the
patients investigated by the Texas Medicaid Fraud Control Unit and
whose
records Petitioner acknowledged falsifying in her voluntary
statement, was
found to be a Medicare patient residing at the facility
on October 1, 1989.
6/ Id. at.6, 7. The I.G. cited cases for the
principle that
"relating to the delivery of an item or service" in
section 1128(a)(1) of the
Social Security Act means that a nexus must
exist between Petitioner's
conviction and the delivery of a Medicare or
Medicaid service. Id. at
10, 11. The I.G. argued that because Creda
Hoga was a Medicare patient
receiving medication and services under the
program on October 1, 1989, the
nexus between Petitioner's conviction
and the delivery of a program-related
item or service has been
established. Id. at 11, 12. The I.G.
stated that the ALJ is to examine
evidence beyond the conviction itself and
make a common sense
determination as to whether the conviction related to the
delivery of an
item or service under Medicare or Medicaid. Id. at 9,
10.
The ALJ did not err in concluding that the I.G.'s showing that Creda
Hoga
was receiving Medicare services on October 1, 1989 was not
sufficient to show
that the offense of which Petitioner was convicted
was related to the
delivery of a Medicare item or service. 7/.The I.G.
argued that Bruce
Lindberg, DAB 1280 (1990), does not require the I.G.
to show the name of the
individual to whom the conviction related or to
link to Medicare or Medicaid
each individual to whom the conviction
could possibly relate. The I.G.
stated that Lindberg was factually
distinguishable from this case because, in
Lindberg, the links to
patients and to the delivery of items or services, two
necessary
elements of that exclusion, were not present; in this case,
according to
the I.G., the link to the delivery of Medicare or Medicaid items
or
services has been established. Id. at 13-16.
Lindberg, while not exactly identical to this case, contains
many
significant similarities. In Lindberg, the defendant chiropractor
pled
guilty to charges involving the sexual abuse of two boys, and, as
part
of the plea and sentencing agreement, agreed to set up trust funds for
a
total of eight boys who had been the victims of his actions. Six
of
these boys were found to have been his patients and had been
receiving
health care services at the time the abuse occurred. The I.G.
moved to
exclude the defendant from participation in Medicare and Medicaid
under
section 1128(a)(2) of the Social Security Act, which provides for
the
mandatory exclusion for five years of practitioners who neglect or
abuse
patients in connection with the delivery of a health care item
or
service.
The defendant's exclusion was upheld by the ALJ. However, on
appeal,
the Board reversed the ALJ and remanded the case for
further
fact-finding. Since two of the boys had not been patients of
the
defendant nor the recipients of health care items or services from
the
defendant, and since the two counts of abuse to which defendant
pled
guilty did not sufficiently identify the two boys allegedly
involved,
the Board found that the I.G. had not met its burden of proof that
the
conviction related to patients in connection with the delivery of
health
care items or services. Lindberg at 6-9.
In this case, although we know that Petitioner pled guilty to making
false
entries in the records of.patients, the I.G. did not establish
which patients
were referenced in the guilty plea. Like Lindberg, where
at least eight
victims who were harmed were identifiable, we know the
names of at least six
persons whose records were allegedly falsified by
Petitioner. However,
the record does not identify which patients'
records Petitioner here pled
guilty to falsifying and whether any of
those patients were Medicare
beneficiaries or Medicaid recipients. It
is not always necessary in a
section 1128(a)(1) exclusion to link a
Petitioner's offense to specific named
patients since, for example, the
offense may affect uniformly all of the
patients in the facility.
However, such link is one way in which a nexus can
be established
between Petitioner's conduct and the delivery of items or
services under
Medicare or Medicaid. We find that, like in Lindberg,
the I.G. did not
establish any link between Petitioner's conviction and
specific named
patients.
B. The I.G. Failed to Show that Medicare
or Medicaid Was
the Victim of Petitioner's Crime.
The I.G. further argued that it had shown that the Medicare program
was
the victim of Petitioner's crime and that therefore it had
established
that Petitioner's conviction related to the delivery of an item
or
service under Medicare or Medicaid. I.G. Br. at 16, 17. The
I.G.
asserted that the Medicare program was harmed because
Petitioner's
conduct resulted in the Medicare program being billed for drugs
for
Medicare patients which were converted by Petitioner for her own
use
(citing Napolean S. Maminta, DAB 1135 (1990)). The I.G. also
argued
that the expense of the investigation by the Texas Medicaid
Fraud
Control Unit resulted in financial harm to the Medicaid program.
I.G.
Br. at 16-17.
The I.G.'s assertion that Petitioner's conviction resulted in the
Medicare
program being billed for excessive drug charges is unsupported.
The I.G.'s
own proffered evidence indicates that the Brookhaven Nursing
Facility paid a
pharmacy directly for prescription drugs needed by
Medicare patients and
submitted bills for individual drug items to the
fiscal intermediary.
I.G. Ex. 6. Therefore, since drugs for patients
at the Brookhaven
Nursing Facility were apparently billed on an
item-by-item basis, the only
drug payments which would have resulted in
an increase in costs to the
Medicare program would be those provided to
Medicare patients. The I.G.
did not allege much less substantiate that
drug conversions and false
statements relating to patients who were not
Medicare beneficiaries or
Medicaid recipients would have increased the
costs to the Medicare
or.Medicaid programs. 8/ See generally I.G. Ex 6.
Since the I.G. did
not establish that Petitioner's conviction related to
false entries in the
records of Creda Hoga, the only Medicare or
Medicaid patient receiving
services on October 1, 1989, the I.G. did not
establish that the Medicare or
Medicaid programs were the victim of
Petitioner's crime because of increased
charges for prescription drugs.
Moreover, we find this case to be distinguishable from Maminta, a
case
cited by the I.G. in its argument. In Maminta, there was a direct
link
to the Medicare program in that the Petitioner diverted a
Medicare
reimbursement check that had been made out to another health
care
provider. The Board found that Petitioner's conduct provided
the
requisite link to the Medicare program because the check which
was
improperly cashed was a Medicare reimbursement check for Medicare
items
or services. In this case, there has been no evidence that the
specific
offense of which Petitioner was convicted resulted in financial harm
to
the Medicare program.
Finally, the I.G.'s argument that the expenses incurred by the
Texas
Medicaid Fraud Control Unit in investigating Petitioner established
that
Petitioner's conviction resulted in the Medicaid program being
the
victim of Petitioner's crime has no merit. Under the I.G.'s
theory,
every time a state fraud control unit performs an investigation
and
there is a resulting conviction for any crime (whether related
to
Medicare or Medicaid), the Medicaid program would always be considered
a
financial victim. The I.G. cannot use the mere presence of
an
investigation to establish a link to the program.
In summary, the I.G. did not show that Petitioner's conviction
either
related to a specific named Medicare or Medicaid patient or that
the
Medicare or Medicaid program was the victim of Petitioner's crime
in
that the offense increased costs charged to either program.
Therefore,
the I.G. failed to establish any nexus between Petitioner's
conviction
and the delivery of an item or service under Medicare or Medicaid
and
the ALJ's conclusions in FFCL Nos. 18 and 20 are not
erroneous..III.
The ALJ Did Not Err in Finding that Summary Disposition in
Favor of
Petitioner Was Appropriate.
The I.G. objected to FFCL No. 19 on the ground that granting
summary
disposition to Petitioner was not appropriate because Petitioner did
not
move for summary disposition. The I.G. argued that the denial
of
summary disposition in favor of the I.G. did not make
summary
disposition in favor of Petitioner appropriate, and that the ALJ had
a
duty to schedule a hearing to determine disputed issues of fact
where
such issues exist. The I.G. further argued that Petitioner failed
to
introduce evidence to show that there were material facts in dispute
and
to thereby defeat the I.G.'s summary disposition motion, but
instead
relied solely upon her pleadings. I.G. Br. at 17-19.
We have previously concluded that an ALJ may grant summary judgment to
a
party where there are no genuine issues of material fact. See,
e.g.,
Summit Health Limited, DAB 1173 (ALJ decided case on summary
disposition
where there were only legal matters to be decided); 42 C.F.R.
.
1005.4(b)(12). Moreover, the majority rule in the federal courts
is
that summary judgment can be granted to a non-moving party. See
Wright,
Miller & Kane, Federal Practice and Procedure, Civil 2d . 2720
(and
cases cited therein.)
It is true that the denial of the I.G.'s motion for summary
disposition,
by itself, did not entitle Petitioner to summary disposition and
that
the ALJ should have scheduled a hearing to determine disputed issues
of
fact if such issues existed. However, the burden was on the I.G.
to
offer sufficient evidence to show that Petitioner was convicted of
a
crime relating to the delivery of a health care item or service
under
Medicare or Medicaid, and that exclusion was therefore proper.
The I.G.
made three motions for summary disposition, attaching affidavits
and
other documentation in support of its position. The ALJ found
that,
despite the three summary judgment motions, the I.G. was unable
to
provide sufficient evidence to establish that Petitioner's
conviction
related to the delivery of a program item or service. We see
no reason,
after three attempts by the I.G. to produce sufficient evidence on
this
issue, to remand this matter to the ALJ in order to give the I.G.
yet
another chance. The I.G. did not here allege that it had
additional
evidence to introduce, nor did it indicate the nature of any
additional
evidence. Therefore, we conclude that it was proper for the
ALJ to
grant summary judgment in favor of Petitioner and that FFCL No. 19
is
not
erroneous..
CONCLUSION
We conclude that the ALJ did not err in vacating the I.G.'s exclusion
of
Petitioner and in granting summary disposition in her favor. We
affirm
and adopt the ALJ's FFCLs. The I.G. did not provide or offer
evidence
sufficient to establish that Petitioner's conviction related to
the
delivery of an item or service under Medicare or Medicaid.
_________________________
Judith
A. Ballard
_________________________
Cecilia
Sparks Ford
_________________________
Donald
F. Garrett Presiding
Board
Member
1. The state health care programs from which Petitioner was
excluded
are those listed in section 1128(h) of the Social Security Act
and
include programs funded under titles XIX, V, and XX. We use the
term
"Medicaid" in this decision to represent all state health care
programs
from which the I.G. directed that Petitioner be excluded. We
use the
term "Petitioner" to refer to Catherine Dodd, who was the Petitioner
in
the action before the ALJ, even though this matter was appealed to
the
Board by the I.G.
2. The Board has been unable to reach Petitioner at her last
known
address and Petitioner did not respond to the exceptions filed by
the
I.G. To the best of our knowledge, Petitioner is unaware that the
ALJ
vacated her exclusion. The ALJ Decision, which was mailed
to
Petitioner's last known address, was returned to the ALJ by the
Postal
Service. Our decision was rendered without the benefit of a
brief being
filed by Petitioner.
3. Under section 1128(i)(3), a court's acceptance of a plea of
guilty
is a "conviction" for purposes of section 1128(a).
4. The investigative report by the Texas Medicaid Fraud Control
Unit
also referred to Joan Brown, another patient in whose medical
records
Petitioner was alleged to have made false entries. I.G. Ex.
2.
Petitioner's voluntary statement, while somewhat ambiguous, admitted
to
having made false entries in the medical records of a sixth
patient,
Gertrude Clark. The I.G., while stating that there were five
patients
from whom Petitioner took medication, consistently listed only the
four
patients mentioned by name above. While we are uncertain why the
I.G.
referred to only five patients instead of six and why the I.G.
omitted
any references to patients Brown or Clark, we find that the analysis
is
the same whether we consider only the four patients named by the I.G.
or
all six patients since both groups contain patients who were found
not
to be receiving services under either Medicare or Medicaid.
5. The Information is a document which relates the alleged facts
upon
which a defendant's arrest and charge is based.
6. As for the other patients, James Martin was found by the ALJ not
to
have been a patient at the Brookhaven Nursing Center on October 1,
1989,
the date on which Petitioner committed the acts leading to
the
conviction. Peggy Bang and Dorothy Crowson were found to be
patients at
the facility and Medicaid-eligible on October 1, 1989, but were
not
shown to be receiving services under Medicaid on that date.
No
information was provided as to whether Gertrude Clark was
receiving
services under either program or whether she was a patient of
the
facility on October 1, 1989. While not addressed by the ALJ, there
is
conflicting evidence in the record as to whether Joan Brown was
a
patient of the facility on October 1, 1989. I.G. Ex. 2 and Ex. 5 at
4.
See generally ALJ Decision at 4, 5. None of the ALJ's findings on
these
patients was contested by the I.G. on appeal and each of the
ALJ's
findings is supported by substantial evidence in the record.
7. The I.G. argued that the ALJ erred in finding that the
medications
provided to Creda Hoga which Petitioner converted were not
Medicare
items or services but that they were instead ancillary to Ms.
Hoga's
Medicare-covered stay. I.G. Br. at 12. The I.G.'s exhibits
indicate
that Medicare was billed for prescription drugs for Creda Hoga and
that
such drugs are covered under Medicare Part A. I.G. Ex. 6. This
evidence
undercuts the ALJ's statement that the medications were not
Medicare
items or services, but supports the ALJ's finding to the effect
that
they were ancillary (if that means they were not covered by the
nursing
facility rate for inpatient services.) In any event, the ALJ
concluded
that if it could be proven that Petitioner's conviction related
to
falsifying the records of Ms. Hoga, it would relate to the delivery of
a
Medicare item or service, so any error on this point would be
harmless.
ALJ Decision at 12.
8. In some circumstances, costs related to private pay patients
could
result in increased charges to Medicare or Medicaid if the
reimbursement
rates are based on the average costs of all patients at the
facility.
However, the I.G. did not allege such a
relationship