2005.11.23 CR1372 Jack Allen Kingen vs. The Inspector General

The I.G. determined to exclude Petitioner pursuant to the provisions of sections 1128(a)(1) and 1128(a)(3) of the Act and implementing regulations at 42 C.F.R. Part 1001. Section 1128(a)(1) directs the exclusion of any individual who is convicted of a criminal offense relating to the delivery of an item or service under Medicare or a state Medicaid program. Section 1128(a)(3) directs the exclusion of any individual who is convicted under federal or state law of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program that is operated or financed in whole or in part by any federal, state, or local government agency. Section 1128(a)(3) applies only to such offenses occurring after August 21, 1996.

Petitioner was the owner of J. & J. Sleep, Inc., a clinic in Durand, Michigan which specialized in treating sleep disorders. I.G. Ex. 3. On July 10, 2003, Petitioner, along with his clinic, were charged under Michigan law with 17 counts of filing false Medicaid claims and 14 counts of filing false health care claims, all felonies under Michigan law. I.G. Ex. 4; see I.G. Ex. 5, I .G. Ex. 6. The Michigan attorney general charged that, between February 2000 and March 2002, Petitioner and his clinic fraudulently billed Michigan's Medicaid program and a health care insurer. The alleged fraud consisted of double billing for sleep studies performed at the clinic. I.G. Ex. 4. Essentially, Petitioner was charged with multiple counts of filing two reimbursement claims for services that he knew were reimbursable only once. Id.

On May 27, 2004, Petitioner was found guilty by a jury of all except one of the criminal charges with which he had been charged. I.G. Ex. 7 - I.G. Ex. 10. Petitioner was sentenced to a term of probation and to pay restitution for his crimes. I.G. Ex. 10.

The undisputed facts plainly establish that Petitioner was convicted of offenses that fall within the reach of sections 1128(a)(1) and 1128(a)(3) of the Act. His conviction was of criminal offenses that relate to the delivery of Medicaid items or services. A conviction of fraud against a state Medicaid program involving Medicaid-reimbursed services is clearly one of the crimes to which section 1128(a)(1) applies. Additionally, his conviction was for state felonies relating to fraud committed after August 21, 1996, against a health care insurer. Consequently, it falls squarely within the convictions described at section 1128(a)(3).

The Act mandates exclusion of any individual who is convicted of a crime falling within the purview of section 1128(a)(1) or 1128(a)(3). The minimum mandatory exclusion is for five years. Act, section 1128(c)(3)(B). The I.G. was required to exclude Petitioner because he was convicted of offenses described in sections 1128(a)(1) and 1128(a)(3). In this case the I.G. excluded Petitioner for the minimum mandatory period of five years. Consequently, there is no issue in this case as to whether the length of Petitioner's exclusion is reasonable.

Petitioner argues that the doctrine of collateral estoppel applies to bar the I.G. from excluding him. He asserts that the I.G. is collaterally estopped because, in an administrative proceeding that is separate from this one, an administrative law judge found that Petitioner was without fault for double billing for sleep services. As proof of this assertion Petitioner relies on the decision of Administrative Law Judge K. Michael Foley, of the Social Security Administration, Office of Hearings and Appeals, in a case involving Petitioner's appeal of a denial of supplementary medical insurance benefits under Part B of the Medicare program. In the Case of J and J Sleep, Inc., Docket Nos. 999-27-4671 through 999-27-4685 (2004). P. Ex. 1.

I find Petitioner's argument to be without merit. The administrative law judge decision would have no impact on the I.G.'s authority to exclude Petitioner even if it had found that Petitioner was blameless for precisely the claims that were the basis for his criminal convictions. The doctrine of collateral estoppel simply does not apply under the circumstances of this case. Petitioner's exclusion derives from his conviction of felonies under Michigan law. Sections 1128(a)(1) and 1128(a)(3) mandate Petitioner's exclusion because he was convicted of criminal offenses that fall within the ambit of these sections. The I.G. is required to exclude Petitioner for at least five years so long as these convictions stand. The I.G. would be obligated to reinstate Petitioner only if the convictions are reversed on appeal or vacated. 42 C.F.R. � 1001.3005(a)(1). Nothing offered by Petitioner, including the decision in the Medicare benefits case, establishes that Petitioner's convictions have been reversed or vacated.

Having said that, it is obvious from a review of the administrative law judge decision that it does not address the claims for services that were the basis for Petitioner's criminal conviction. There is simply no congruity between the claims that were the basis for Petitioner's conviction and those that are the basis for the administrative law judge's decision. The absence of congruity is manifest when the decision is compared against the criminal charges that were filed against Petitioner. First, Petitioner's felony convictions involved fraudulent state Medicaid services. The administrative law judge's decision related to claims made under Medicare, a different program. Petitioner was convicted of felonies that transpired between February 2000 and March 2002. I.G. Ex. 4; I.G. Ex. 10. But, the administrative law judge's decision finds that Petitioner's clinic was without fault for overpayments from the Medicare program only with respect to charges for services that were provided between April 2, 2002 and July 31, 2002. P. Ex. 1, at 10. Finally, there is nothing to suggest that the administrative law judge who decided the Medicare benefits appeal was aware of all of the facts upon which Petitioner's conviction was based.

CASE \| DECISION \| JUDGE
Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division
IN THE CASE OF
SUBJECT: Jack Allen Kingen, Petitioner,	DATE: November 23, 2005
- v -
The Inspector General	Docket No.C-05-339 Decision No. CR1372
DECISION	...TO TOP
DECISION I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Jack Allen Kingen, from participating in federally funded health care programs, including Medicare and all state Medicaid programs, for a period of at least five years. I do so because Petitioner was convicted of criminal offenses described at sections 1128(a)(1) and 1128(a)(3) of the Social Security Act (Act). I. Background On March 31, 2005, the I.G. notified Petitioner that he was being excluded for a five-year minimum period pursuant to the requirements of sections 1128(a)(1) and 1128(a)(3) of the Act. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I held a pre-hearing conference by telephone at which I established a schedule for the parties to submit briefs and proposed exhibits. Additionally, I gave the parties the option of requesting to present testimony in-person. However, neither party proffered in-person testimony. Each party filed a brief and proposed exhibits. Additionally, the I.G. filed a reply brief. The I.G.'s proposed exhibits consist of I.G. Exhibit (Ex.) 1 - I.G. Ex. 10. Petitioner's proposed exhibits consist of P. Ex. 1 - P. Ex. 5. I am receiving all of these proposed exhibits into evidence. II. Issues, findings of fact, and conclusions of law A. Issue The issue in this case is whether the I.G. was required to exclude Petitioner from participating in federally funded health care programs for a minimum of five years. B. Findings of fact and conclusions of law I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail. *1. The I.G. was required to exclude Petitioner.* The I.G. determined to exclude Petitioner pursuant to the provisions of sections 1128(a)(1) and 1128(a)(3) of the Act and implementing regulations at 42 C.F.R. Part 1001. Section 1128(a)(1) directs the exclusion of any individual who is convicted of a criminal offense relating to the delivery of an item or service under Medicare or a state Medicaid program. Section 1128(a)(3) directs the exclusion of any individual who is convicted under federal or state law of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program that is operated or financed in whole or in part by any federal, state, or local government agency. Section 1128(a)(3) applies only to such offenses occurring after August 21, 1996. Petitioner was the owner of J. & J. Sleep, Inc., a clinic in Durand, Michigan which specialized in treating sleep disorders. I.G. Ex. 3. On July 10, 2003, Petitioner, along with his clinic, were charged under Michigan law with 17 counts of filing false Medicaid claims and 14 counts of filing false health care claims, all felonies under Michigan law. I.G. Ex. 4; see I.G. Ex. 5, I .G. Ex. 6. The Michigan attorney general charged that, between February 2000 and March 2002, Petitioner and his clinic fraudulently billed Michigan's Medicaid program and a health care insurer. The alleged fraud consisted of double billing for sleep studies performed at the clinic. I.G. Ex. 4. Essentially, Petitioner was charged with multiple counts of filing two reimbursement claims for services that he knew were reimbursable only once. Id. On May 27, 2004, Petitioner was found guilty by a jury of all except one of the criminal charges with which he had been charged. I.G. Ex. 7 - I.G. Ex. 10. Petitioner was sentenced to a term of probation and to pay restitution for his crimes. I.G. Ex. 10. The undisputed facts plainly establish that Petitioner was convicted of offenses that fall within the reach of sections 1128(a)(1) and 1128(a)(3) of the Act. His conviction was of criminal offenses that relate to the delivery of Medicaid items or services. A conviction of fraud against a state Medicaid program involving Medicaid-reimbursed services is clearly one of the crimes to which section 1128(a)(1) applies. Additionally, his conviction was for state felonies relating to fraud committed after August 21, 1996, against a health care insurer. Consequently, it falls squarely within the convictions described at section 1128(a)(3). The Act mandates exclusion of any individual who is convicted of a crime falling within the purview of section 1128(a)(1) or 1128(a)(3). The minimum mandatory exclusion is for five years. Act, section 1128(c)(3)(B). The I.G. was required to exclude Petitioner because he was convicted of offenses described in sections 1128(a)(1) and 1128(a)(3). In this case the I.G. excluded Petitioner for the minimum mandatory period of five years. Consequently, there is no issue in this case as to whether the length of Petitioner's exclusion is reasonable. Petitioner argues that the doctrine of collateral estoppel applies to bar the I.G. from excluding him. He asserts that the I.G. is collaterally estopped because, in an administrative proceeding that is separate from this one, an administrative law judge found that Petitioner was without fault for double billing for sleep services. As proof of this assertion Petitioner relies on the decision of Administrative Law Judge K. Michael Foley, of the Social Security Administration, Office of Hearings and Appeals, in a case involving Petitioner's appeal of a denial of supplementary medical insurance benefits under Part B of the Medicare program. In the Case of J and J Sleep, Inc., Docket Nos. 999-27-4671 through 999-27-4685 (2004). P. Ex. 1. I find Petitioner's argument to be without merit. The administrative law judge decision would have no impact on the I.G.'s authority to exclude Petitioner even if it had found that Petitioner was blameless for precisely the claims that were the basis for his criminal convictions. The doctrine of collateral estoppel simply does not apply under the circumstances of this case. Petitioner's exclusion derives from his conviction of felonies under Michigan law. Sections 1128(a)(1) and 1128(a)(3) mandate Petitioner's exclusion because he was convicted of criminal offenses that fall within the ambit of these sections. The I.G. is required to exclude Petitioner for at least five years so long as these convictions stand. The I.G. would be obligated to reinstate Petitioner only if the convictions are reversed on appeal or vacated. 42 C.F.R. � 1001.3005(a)(1). Nothing offered by Petitioner, including the decision in the Medicare benefits case, establishes that Petitioner's convictions have been reversed or vacated. Having said that, it is obvious from a review of the administrative law judge decision that it does not address the claims for services that were the basis for Petitioner's criminal conviction. There is simply no congruity between the claims that were the basis for Petitioner's conviction and those that are the basis for the administrative law judge's decision. The absence of congruity is manifest when the decision is compared against the criminal charges that were filed against Petitioner. First, Petitioner's felony convictions involved fraudulent state Medicaid services. The administrative law judge's decision related to claims made under Medicare, a different program. Petitioner was convicted of felonies that transpired between February 2000 and March 2002. I.G. Ex. 4; I.G. Ex. 10. But, the administrative law judge's decision finds that Petitioner's clinic was without fault for overpayments from the Medicare program only with respect to charges for services that were provided between April 2, 2002 and July 31, 2002. P. Ex. 1, at 10. Finally, there is nothing to suggest that the administrative law judge who decided the Medicare benefits appeal was aware of all of the facts upon which Petitioner's conviction was based.
JUDGE	...TO TOP
Steven T. Kessel Administrative Law Judge
CASE \| DECISION \| JUDGE