SUBJECT:

Charles Philip Colosimo,

Petitioner,

The Inspector General.

DECISION

I sustain the Inspector General's (I.G.'s) decision to exclude Petitioner, Charles Philip Colosimo, from participating in Medicare, Medicaid, and all other federal health care programs, as defined in section 1128B(f) of the Social Security Act (Act), for a period of ten years due to his conviction 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.

I. Procedural History

By letter dated August 30, 2003, the I.G. notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of ten years pursuant to section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1). By letter dated October 29, 2003, Petitioner requested review of his exclusion. I convened a telephone conference on January 13, 2004. During the telephone conference, I established a briefing schedule.

Thereafter, on February 17, 2004, the I.G. filed The Inspector General's Brief in Support of Motion for Summary Affirmance (I.G. Br.). With the brief, the I.G. submitted five proposed exhibits, I.G. Exhibits (Exs.) 1-5. On April 26, 2004, Petitioner filed Petitioner Charles Philip Colosimo's Brief Opposing Inspector General's Motion for Summary Affirmance (P. Br.). With his brief, Petitioner submitted five proposed exhibits, Petitioner's Exhibits (P. Exs.) 1-5. On June 9, 2004, I issued an Order in which I offered both parties the opportunity to amend their submissions to correct certain discrepancies. Pursuant to that Order, on July 19, 2004, Petitioner submitted an amended brief with a different document offered as P. Ex. 1. I construe Petitioner's offering a new P. Ex. 1 to also be a request to withdraw the document previously offered as P. Ex. 1. Neither party objected to the exhibits offered by the other party. I therefore admit I.G. Exs. 1-5 and P. Exs. 1-5.

II. Legal Authority

Section 1128(a)(1) of the Act requires the Secretary of Heath and Human Services (Secretary) to exclude from participation in Medicare, Medicaid, and all other federal health care programs, any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under the Medicare or Medicaid program. 42 U.S.C. � 1320a-7(a)(1).

An exclusion imposed under section 1128(a)(1) must be for a period of at least five years. Act, section 1128(c)(3)(B); 42 U.S.C. � 1320a-7(c)(3)(B). An exclusion pursuant to section 1128(a)(1) may be for longer than five years if specified aggravating factors are present. 42 C.F.R. � 1001.102(b). In a case where the I.G. relies on aggravating factors to impose an exclusion in excess of five years, a petitioner may argue that specified mitigating factors should be considered to reduce the length of exclusion to not less than five years. 42 C.F.R. � 1001.102(c).

An individual is "convicted" of a criminal offense within the meaning of section 1128(i) of the Act -

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court . . . ;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court; [or]

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court . . . .

Act, section 1128(i); 42 U.S.C. � 1320a-7(i).

III. Factual Background

The facts which I recite in this section are not disputed. ⁽¹⁾ Petitioner is a licensed psychologist, who operated C. Philip Colosimo, Ph.D. & Associates, Ltd., a private psychological counseling practice, in Las Vegas, Nevada. P. Br. at 3-4. In the fall of 1999, the State of Nevada Office of Attorney General began an investigation of Petitioner's practice. Id. at 4. In the fall of 2000, investigators executed a search warrant at Petitioner's place of business. Id. The search warrant was issued based on the affidavit of David M. Borum, who is identified in the warrant as an investigator for the Medicaid Fraud Control Unit. P. Ex. 3. The search warrant authorized investigators to search for, among other things:

1. Any and all documents and records which tend to show C. Philip Colosimo and Associates possessed knowledge of the proper billing procedures for Medicaid and Medicare . . . .

2. Any and all business, financial, corporate or other records pertaining to C. Philip Colosimo and Associates that refer to billing procedures for Medicaid providers, including, but not limited to claims, remittance advises [sic] and payment records, all billing statements, invoices, health insurance claim forms for Medicaid and Medicare.

3. Any and all records which may contain any audits, inspections, reviews, examinations, inquiries, investigations, probes, relating to Medicaid or Medicare.

Id.

On May 15, 2002, Petitioner was charged, in Count 1 of a criminal complaint, with the following conduct:

Defendant, C. Philip Colosimo, did have in his possession, control or custody, public money belonging to this state and did use said funds for a purpose other than one provided by law, in an amount less than $250, in the following manner: From October 1995 through June 1999 and continuing, defendant operated a business located on South Rancho Road, Las Vegas, Nevada. During this time period, defendant's business made claims/billings for reimbursement from a state agency. Many of the billings were inaccurate and could not be wholly substantiated. Upon receipt of remuneration for the claims, defendant failed to exercise his authority over his billing department and thereby retained possession of the remuneration/payments instead of verifying the accuracy of the claims and refunding amounts that could not be accurately or wholly substantiated. . . .All of the above, . . . constitutes a misdemeanor violation of [Nevada Revised Statutes] 204.010.

I.G. Ex. 2, at 1-2.

On June 20, 2002, Petitioner pled guilty, in the Justice Court of Las Vegas Township, to Count 1 of the criminal complaint, and the court accepted the plea. I.G. Ex. 1. On July 1, 2002, the court entered a judgment of conviction against Petitioner and sentenced him to pay the sum of $75,000, "as penalties and costs of enforcement . . . [s]aid amount is based on [Petitioner's] . . . knowing failure to ensure the refund of public monies received from an agency of the State of Nevada." Id. at 2. Of that amount, $25,965.06 was paid as restitution to the Nevada Medicaid program. I.G. Ex. 4.

IV. Issues

The issues in this case are whether 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 and whether the ten-year period of exclusion falls within a reasonable range.

V. Discussion

Section 1128(a)(1) of the Act requires that the Secretary exclude an individual who has been convicted under federal or State law of a criminal offense related to the delivery of an item or service under Medicare or a State health care program. ⁽²⁾ 42 C.F.R. � 1001.101. Individuals excluded under section 1128(a)(1) of the Act must be excluded for a period of not less than five years. Act, section 1128(c)(3)(B). I make findings of fact and conclusions of law to support my decision in this case. I set forth each finding below, in bold italic type, as a separate heading.

1. Petitioner was convicted of a criminal offense, within the meaning of section 1128(i) of the Act.

Section 1128(i) of the Act provides, in part, that an individual or entity is considered to have been convicted of a criminal offense under the following circumstances:

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court . . . ;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court; [or]

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court . . . .

In the present case, Petitioner entered an "Alford" plea to one misdemeanor count of unlawful use of public money. ⁽³⁾ Pursuant to a plea agreement, Petitioner pled guilty and the Justice Court of Las Vegas Township accepted the plea and judged him guilty. I.G. Exs. 1, 3. The court also entered a judgment of conviction against Petitioner. Id. Thus, Petitioner was "convicted" within the meaning of subsections (1), (2), and (3) of section 1128(i) of the Act. In addition, Petitioner does not dispute that he was convicted of a criminal offense. See P. Br. at 6. ⁽⁴⁾

2. The criminal offense of which Petitioner was convicted was related to the delivery of an item or service under the Medicaid program, within the meaning of section 1128(a)(1) of the Act.

Petitioner argues that the offense to which he pled guilty, "Unlawful Use of Public Money," on its face, bears no relationship to the Medicaid program. See P. Br. at 6-7. While it is true that a relationship to Medicaid is not an element of the offense to which Petitioner pled guilty, this fact is not dispositive as to whether the offense is program-related within the meaning of section 1128(a)(1). Petitioner need not be convicted of Medicaid fraud for section 1128(a)(1) to apply. He need only be convicted of an offense related to the delivery of a Medicaid item or service. An offense is related to the delivery of an item or service under Medicare or Medicaid within the meaning of the statute if there is a common-sense connection between the conduct giving rise to the offense and the delivery of a Medicare or Medicaid item or service. Berton Siegel, D.O., DAB No. 1467, at 5 (1994). In making my determination, I am not limited to a "narrow examination of the language within the four corners of the final judgment." H. Gene Blankenship, DAB CR42, at 11 (1989). Rather, I may examine extrinsic evidence to determine whether an offense is program-related. Dewayne Franzen, DAB No. 1165 (1990).

In the present case, Petitioner pled guilty to Count 1 of the criminal complaint, which charged that his counseling practice made claims for reimbursement to a "state agency." The complaint charged that many of the claims were inaccurate or unsubstantiated. The complaint did not identify the state agency to which the claims were submitted. Petitioner's brief does not concede that the state agency referenced in the criminal complaint is Nevada Medicaid. Petitioner's brief also does not explicitly deny that this is the case. Thus, it is not entirely clear to me whether Petitioner contends that the identity of the state agency is a disputed issue of fact. Even if there is a dispute as to this issue, there is nevertheless sufficient evidence in the record from which I can infer that the unnamed agency is the Nevada Medicaid program. First of all, the search warrant executed at Petitioner's place of business was issued at the request of an employee of the Nevada Medicaid Fraud Control Unit. See P. Ex. 3. Further, many of the items sought in the search warrant related to Medicaid billing procedures. Id. Thus, it is apparent that the investigation that led to Petitioner's conviction involved the manner in which Petitioner's practice was submitting claims to Nevada Medicaid. Moreover, Petitioner was required to pay restitution in the amount of $25,965.06 to the Nevada Medicaid program. I.G. Ex. 4. The fact that Petitioner was required to pay restitution to the Medicaid program is further evidence that the Medicaid program was the source of the public money which Petitioner was convicted of unlawfully using. Indeed, Petitioner nowhere suggests that the public money which he pled guilty to unlawfully retaining belonged to a state agency other than the Medicaid program.

For these reasons, I conclude that the state agency described in the criminal complaint is the Nevada Medicaid program. Thus, Petitioner's conviction came about because his practice submitted improper claims to Medicaid, and because he retained Medicaid reimbursements to which he was not entitled. Convictions for submitting improper bills to Medicare or Medicaid have long been held to subject individuals to the mandatory exclusion provisions of section 1128(a)(1). See Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990). It is also well-established that an offense is program-related where a covered program is the victim of the criminal conduct. See, e.g., Napoleon S. Maminta, M.D., DAB No. 1135, at 12, 15 (1990).

Petitioner argues that his conviction was for "not paying attention" to how claims were submitted to a state agency, and that he had no intent that incorrect billing be submitted. P. Br. at 6-7. However, no element of intent is required for a finding that a conviction is program-related within the meaning of section 1128(a)(1) of the Act. Franzen, DAB No. 1165, at 7-8.

Petitioner suggests that the I.G. should have excluded him, if at all, pursuant to the permissive exclusion authority of section 1128(b)(1). See P. Br. at 3. Given that Petitioner was convicted of a criminal offense related to the delivery of an item or service under the Medicaid program, however, the I.G. was required to exclude him pursuant to section 1128(a)(1) of the Act. See, e.g., Greene, DAB No. 1078, at 6-13.

For the reasons discussed above, Petitioner is subject to the mandatory exclusion provisions of section 1128(a)(1) of the Act. Accordingly, Petitioner must be excluded for at least five years.

3. The ten-year exclusion imposed by the I.G. is within a reasonable range.

An individual or entity convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid must be excluded for not less than five years. Act, section 1128(c)(3)(B); 42 C.F.R. � 1001.102(a). The I.G. may impose an exclusion for a longer period if certain aggravating factors are present. 42 C.F.R. � 1001.102(b). If the I.G. imposes an exclusion of longer than five years, based on the presence of aggravating factors, then specified mitigating factors may be considered to determine whether the term of exclusion should be shortened. 42 C.F.R. � 1001.102(c). In no event may the exclusion be for less than five years.

Under the regulations, as interpreted by decisions of the Departmental Appeals Board, so long as the term of exclusion imposed by the I.G. is within a reasonable range, based on the regulatory criteria, an administrative law judge has no authority to modify the term. Joann Fletcher Cash, DAB No. 1725, at 16-18 (2000); see also 42 C.F.R. � 1001.2007(a)(1)(ii).

a. The I.G. has proved the existence of two aggravating factors.

In the present case, the I.G. relied on the presence of two aggravating factors in determining that Petitioner should be excluded for a ten-year period. The first aggravating factor which the I.G. alleges is that Petitioner's criminal acts caused a loss of more than $5,000 to a government program. 42 C.F.R. � 1001.102(b)(1). Petitioner was required to pay restitution to the Nevada Medicaid program in the amount of $25,965.06. I.G. Ex. 4. It is appropriate to consider the amount of restitution as evidence of the amount of loss to an entity. Raymond Montoya, DAB CR1062, at 9 (2003). I therefore find that the I.G. has proved that Petitioner's criminal conduct caused a loss to Nevada Medicaid well in excess of $5,000, thus establishing one aggravating factor.

Second, the I.G. alleges that Petitioner engaged in criminal acts over a period of one year or more, thus satisfying the aggravating factor specified at 42 C.F.R. � 1001.102(b)(2). Petitioner was convicted of Count 1 of the criminal complaint, which charged that Petitioner's practice engaged in improper billing from October 1995 through June 1999. I.G. Exs. 1, 2. The judgment of conviction against Petitioner therefore establishes that the conduct underlying his conviction continued over a period of more than three years. Accordingly, this aggravating factor is established, as well.

I do consider the quality and circumstances of the aggravating factors in determining whether the aggravating factors support the period of time the I.G. added to the mandatory exclusion. In making this determination, I note that the amount Petitioner was required to return to Nevada Medicaid as restitution was far over the minimum $5000 loss that triggers the aggravating factor listed in 42 C.F.R. � 1001.102(b)(1). I also note Petitioner's argument that he was not paying attention in reviewing how claims were being submitted. The lengthy period of time the incorrect billing continued, however, suggests otherwise because Petitioner had ample opportunity to detect errors being made in his office's billing practices.

I note additionally that I have in other situations had concerns that petitioners who were faced with criminal charges have entered into plea arrangements simply to get the matter behind them and without knowledge of the plea's effect on their future ability to continue their careers. See, e.g., Steven Caplan, R.Ph., DAB CR1112, at 9 (2003). In this case, however, Petitioner's signed plea agreement acknowledges his awareness that he could be excluded from participating in "the provision of health care services in governmental associated health care programs." I.G. Ex. 3, at 3-4.

I therefore conclude that an additional five years of exclusion based on the two aggravating factors is not unreasonable.

b. Petitioner has neither alleged nor proved the existence of mitigating factors.

Petitioner argues generally that the ten-year exclusion imposed by the I.G. is unreasonable based on the remedial purposes of the Act. P. Br. at 9. He argues that he is a trustworthy, competent professional. Id. at 10. He argues that he did not intend to submit inaccurate bills or to cause a loss to any government program. Id. However, Petitioner has not argued that any of the mitigating factors defined by the regulations are present in this case. As the regulations are structured, the specified mitigating factors operate as evidentiary rules. Thus, I may consider only evidence related to a specified mitigating factor in making a determination as to Petitioner's trustworthiness. Since there is no evidence relating to any specified mitigating factor, there is no basis for me to reduce the period of exclusion.

4. There are no material facts in dispute that would require a hearing, and the I.G. is entitled to judgment as a matter of law.

Petitioner has not alleged that there are any material facts in dispute. Nor has Petitioner identified any issue as to which he seeks the opportunity to present in-person testimony. My own review of this case has not revealed any issue of fact which is disputed or which would require in-person testimony to resolve. For the reasons discussed above, I find that the I.G. has satisfied the burden of proof and is entitled to judgment as a matter of law.

VI. Conclusion

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. Individuals convicted of such offenses must be excluded from participation in Medicare, Medicaid, and all federal health care programs for not less than five years. Given the presence of two aggravating factors and no mitigating factors, the I.G. properly excluded Petitioner for ten years.

Anne E. Blair

Administrative Law Judge

1. Some of the facts which I recite are derived from the parties' exhibits, which were admitted without objection. In my briefing order of January 13, 2004, I advised the parties: " If a party does not object to the authenticity of or deny the contents of an exhibit, I may accept as fact what is contained in the exhibit."

2. The term "State health care program" includes a State's Medicaid program. Act, section 1128(h)(1); 42 U.S.C. � 1320a-7(h)(1).

3. A so-called "Alford" plea is based on the Supreme Court's decision in North Carolina v. Alford, 400 U.S. 25 (1970). Petitioner's plea agreement recites that, in entering an "Alford" plea, Petitioner is not required to admit guilt, but acknowledges that the State could present evidence at trial which could result in his being convicted of a more serious offense or multiple offenses. I.G. Ex. 3, at 2-3. Many administrative law judge decisions have concluded that an "Alford" plea satisfies the definition of a guilty plea under section 1128(i)(3) and, thus, may be the basis for finding that an individual was convicted under the statutory definition. See, e.g., John Y. Salinas, M.D., DAB CR1117, at 7 (2003).

4. Page references to Petitioner's Brief are to the amended version, dated July 19, 2004.