Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
William I. Cooper, M.D.,
Petitioner,
- v. -
The Inspector General.
Docket No. C-95-024
Decision No. 1534
DATE: September 8, 1995
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION
William I. Cooper, M.D. (Petitioner) appealed a June 7,
1995 decision by Administrative Law Judge (ALJ) Steven T.
Kessel upholding Petitioner's indefinite exclusion from
participation in the following programs: Medicare,
Medicaid, Maternal and Child Health Services Block Grant,
and Block Grants to States for Social Services. Dr.
William I. Cooper, DAB CR381 (1995) (ALJ Decision). The
Inspector General (I.G.) had excluded Petitioner under
section 1128(b)(4) of the Social Security Act (Act) on
the basis that Petitioner's license, or right to renew
his license, to practice medicine in Pennsylvania was
suspended, or otherwise lost, due to actions taken by the
Pennsylvania State Board of Medicine. The ALJ granted
summary disposition for the I.G., finding that there was
no genuine issue of material fact in dispute.
Petitioner appealed the ALJ Decision, taking exception to
two of the findings of fact and conclusions of law
(FFCLs) made by the ALJ. After review of the written
arguments submitted by the parties, we affirm the ALJ
Decision for the reasons stated below.
BACKGROUND
Section 1128(b)(4) of the Act authorizes the Secretary
(or her delegate, the I.G.) to exclude an individual or
entity from participation in the Medicare program and any
State health care program:
(A) whose license to provide health care has been
revoked or suspended by any State licensing
authority, or who otherwise lost such a license or
the right to apply for or renew such a license, for
reasons bearing on the individual's or entity's
professional competence, professional performance,
or financial integrity, or
(B) who surrendered such a license while a formal
disciplinary proceeding was pending before such an
authority and the proceeding concerned the
individual's or entity's professional competence,
professional performance, or financial integrity.
On December 23, 1991, the Pennsylvania Board of Medicine
issued an order to show cause to Petitioner containing
numerous allegations that Petitioner had failed to comply
with the ethical or quality standards of the medical
profession. The order stated that if the allegations
were found to be true, penalties could be imposed against
Petitioner, including the revocation or suspension of his
license to practice medicine in Pennsylvania. In March
1994 Petitioner and the Pennsylvania Board of Medicine
entered into a consent agreement, in which Petitioner
agreed to the following:
a. That on or before June 30, 1994, Petitioner
would voluntarily and permanently cease and desist
from practicing medicine and surgery in
Pennsylvania;
b. That on December 31, 1994, the end of the
current biennial renewal period, Petitioner would
allow his unrestricted medical license to go on
permanent inactive status; and
c. That Petitioner would not at any time thereafter
apply for reinstatement, reissuance, reactivation or
renewal of his unrestricted license to practice
medicine and surgery in Pennsylvania.
On October 19, 1994, the I.G. informed Petitioner of his
exclusion based on the actions of the Pennsylvania State
Board of Medicine. Petitioner appealed his proposed
exclusion to the ALJ.
The ALJ found that the I.G. had properly excluded
Petitioner. The ALJ, however, rejected the I.G.'s
position that either section 1128(b)(4)(A) or section
1128(b)(4)(B) authorized Petitioner's exclusion. The ALJ
found that Petitioner's license to practice medicine was
not revoked, suspended, or otherwise lost within the
meaning of section 1128(b)(4)(A). The ALJ declared that
the plain language of that section applies only to those
instances where an individual or entity loses a license
to provide health care as the consequence of an action
taken by a State licensing authority, but not to
instances where an individual such as Petitioner
voluntarily surrendered his license in order to end a
disciplinary proceeding. ALJ Decision at 7.
The ALJ found that Petitioner did "surrender" his license
within the meaning of section 1128(b)(4)(B), however.
The ALJ rejected Petitioner's argument that section
1128(b)(4)(B) applies only to those instances where an
individual or entity physically surrenders to a State
licensing authority the document which authorizes that
individual or entity to provide health care. The ALJ
found that the common and ordinary meaning of the word
"license" encompasses permission by an authority to
perform an act. ALJ Decision at 8.
PARTIES' ARGUMENTS
Petitioner took exception to the following findings of
fact and conclusions of law made by the ALJ:
1. Petitioner surrendered his license to practice
medicine in Pennsylvania during the pendency of a
formal disciplinary proceeding which concerned his
professional competence or performance.
2. The I.G. was authorized to exclude Petitioner
pursuant to section 1128(b)(4)(B) of the Act.
ALJ Decision at 3 (citations omitted).
Petitioner argued that the ALJ erred in relying on
section 1128(b)(4)(B) as the basis for the exclusion when
the I.G. did not refer to that specific authority in the
exclusion notification. According to Petitioner, he did
not receive adequate notice of the basis for the
exclusion since the I.G.'s exclusion notification
referred to the language of section 1128(b)(4)(A), and
the ALJ rejected that basis for the exclusion and
improperly substituted section 1128(b)(4)(B) to justify
the I.G.'s action. Petitioner also disputed the ALJ's
finding that there was a surrender of his license under
the facts of this case. Petitioner argued that any
ambiguity in the Act over what is meant by the term
"license" should be interpreted against the I.G. rather
than Petitioner. Petitioner contended that under
Pennsylvania law a license is clearly contemplated as a
physical document, rather than just a privilege as the
ALJ found.
The I.G. responded that the reasonable interpretation of
a surrender of a license in section 1128(b)(4)(B) within
the meaning of section 1128(b) as a whole is clearly the
loss of the privilege to practice medicine rather than
the loss of a physical document. The I.G. additionally
argued that the issue of whether the ALJ erred in
rejecting the specific basis which the I.G. cited in her
exclusion letter and then relying on a separate basis for
the exclusion was not properly before this Panel. The
I.G. noted that Petitioner had not raised this issue
before the ALJ and that regulations at 42 C.F.R.
1005.21(e) preclude a petitioner from raising that issue
for the first time before this forum. Thus, according to
the I.G., Petitioner should not be permitted to raise the
issue of whether the ALJ's reliance on section
1128(b)(4)(B) was proper.
ANALYSIS
I. The ALJ did not err in interpreting section
1128(b)(4)(B).
The ALJ's reading of section 1128(b)(4)(B) as not
requiring actual physical surrender of the license
document is consistent with the wording of the statute as
a whole and with its purpose. As the ALJ concluded, the
term "license" can mean a permission to act, as well as
the document evidencing that that permission has been
conferred. Nothing in the wording of section 1128(b)
suggests that Congress was using the term to mean the
document, as opposed to the permission.
The ALJ's conclusion that Congress was using the term to
mean the permission to practice is supported by the
legislative history of section 1128(b). In the Omnibus
Budget Reconciliation Act of 1989, Congress added the
language to section 1128(b)(4)(A) referring to loss of a
right to apply for or renew a license. In explaining
this change, the House Committee on the Budget stated:
The Committee is informed that, in reviewing State
licensure board actions to determine whether
exclusion is appropriate, the Inspector General has
found a number of cases in which a board has revoked
the "license" of a physician whose actual license
had already expired, or in which a board has revoked
the right of a physician to renew a license which
has expired. The Committee bill would clarify that
the loss of a right to apply for or renew a license
to provide health care is tantamount to losing the
license itself and may serve as the basis for
exclusion from Medicare and State health care
programs.
H.R. Rep. No. 247, 101st Cong. 1st Sess. 483. If the
term "license" had been used in section 1128(b)(4) to
mean solely the license document, Congress would not have
referred to the loss of the right to apply or renew the
license as being tantamount to loss of the license.
Congress enacted section 1128(b)(4)(B) to ensure that
practitioners could not place program beneficiaries at
risk by surrendering a license pending a disciplinary
proceeding and then moving to another State. H.R. Rep.
No. 85, 100th Cong. 1st Sess. Pt. 1, 7; S. Rep. No. 109,
100th Cong. 1st Sess. Requiring actual physical
surrender of the license document would permit
practitioners to evade the consequences of a disciplinary
proceeding by carefully worded consent agreements, such
as the one at issue here, which effectively give up the
practitioner's right to practice in a state, but avoid
actual physical surrender of a document. State licensing
authorities have no incentive to insist on surrender of
the license document if it is due to expire. Yet, the
potential harm to program beneficiaries, if the
practitioner moves to another State and sets up practice,
is as great in this situation as in the situation where
the license document has been physically surrendered.
Thus, interpreting the section to require physical
surrender of a document would frustrate Congressional
intent.
II. Petitioner is not precluded from raising the
question of whether the ALJ properly relied on section
1128(b)(4)(B).
We reject the I.G.'s position that Petitioner cannot
raise before this Panel the issue of whether the ALJ
erred by rejecting the specific statutory basis cited in
the I.G.'s exclusion letter and relying instead on a
separate basis for the exclusion. The I.G. relied on 42
C.F.R. 1005.21(e). That provision applies only to any
issue "that could have been raised before the ALJ but was
not." Clearly, Petitioner could not have raised this
particular argument before the ALJ because this question
did not arise until after the ALJ had issued his
decision.
Thus, we conclude that Petitioner is not barred from
raising the issue here.
III. Petitioner had sufficient notice that the ALJ might
rely on section 1128(b)(4)(B).
Contrary to Petitioner's arguments, Petitioner had
adequate notice of the statutory authority for his
exclusion. The I.G.'s October 19, 1994 exclusion
notification referenced section 1128(b)(4) generally as
authority for Petitioner's exclusion, as well as citing
specifically to section 1128(b)(4)(A). Furthermore, in a
December 14, 1994 Order and Notice of Hearing, the ALJ
stated that one of the issues raised by this case was
whether the I.G. has authority to exclude Petitioner
under section 1128(b)(4) of the Act. At 2. In her
February 13, 1995 Response to Petitioner's Motion for
Summary Judgment, the I.G. argued that Petitioner could
be properly excluded under either section 1128(b)(4)(A)
or section 1128(b)(4)(B). At 11-14. In his May 3, 1995
Brief in Opposition to Inspector General's Motion for
Summary Disposition, Petitioner advanced arguments as to
why section 1128(b)(4)(B) was not applicable to the facts
of this case. At 5-6.
Therefore Petitioner cannot now reasonably claim lack of
notice of section 1128(b)(4)(B) as a potential basis for
his exclusion. 1/
CONCLUSION
For the reasons stated above, we affirm the ALJ Decision
and uphold Petitioner's exclusion from participating in
the Medicare, Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for
Social Services programs.
_________________________
Cecilia Sparks Ford
_________________________
M. Terry Johnson
_________________________
Judith A. Ballard
Presiding Board Member
1. Irrespective of Petitioner's complaints about the
lack of notice for his exclusion under section
1128(b)(4)(B), we would additionally conclude that
Petitioner could also have been excluded under the
provisions of section 1128(b)(4)(A). The broad
"otherwise lost" language Congress included in section
1128(b)(4)(A) indicates that Congress intended that
section to encompass any loss that occurs by a means
other than revocation or suspension by a licensing
authority. Moreover, the I.G.'s interpretation of
section 1128(b)(4)(A) would not render section
1128(b)(4)(B) superfluous, as the ALJ reasoned. Section
1128(b)(4)(A) focuses on the reasons for the loss, rather
than on the circumstances of the loss, and applies to an
individual or entity who otherwise lost the right to
apply for or renew such a license, for reasons bearing on
the individual's or entity's professional competence,
professional performance, or financial integrity. See
H.R. Rep. 386, 101st Cong. 1st Sess. 389-90. Section
1128(b)(4)(B), on the other hand, permits the I.G. to
exclude an individual or entity who surrenders a license
pending a disciplinary proceeding without having to prove
the reasons for the surrender.