Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Richard L. Pflepsen, D.C.
Petitioner,
- v. -
The Inspector General.
DATE: June 4, 1991
Docket No. C-345
DECISION
On September 21, 1990, the Inspector General (I.G.) notified Petitioner that
he was being excluded from
participation in the Medicare and State health care programs. The I.G. told
Petitioner that he was being
excluded because his license to provide health care in the State of Iowa had
been revoked. Petitioner was
advised that the Secretary of the Department of Health and Human Services (the
Secretary) was authorized
under section 1128(b)(4)(B) of the Social Security Act (Act) to exclude parties
whose licenses to provide
health care had been suspended or revoked or who had surrendered their licenses
to provide health care, for
reasons relating to such parties' professional competence, performance, or financial
integrity. The I.G.
further advised Petitioner that he would be eligible to apply for reinstatement
as a provider of Medicare and
Medicaid items or services when he obtained a valid license to provide health
care from the State of Iowa.
Petitioner requested a hearing and the case was assigned to me for a hearing
and a decision. The I.G.
moved to dismiss Petitioner's hearing request on the ground that Petitioner
had not timely filed it. On April
25, 1991, I issued a Ruling denying the I.G.'s motion. The I.G. then moved for
summary disposition. I
advised Petitioner that he would have until May 20, 1991 to file a response
to the motion. Petitioner has
not filed a response.
I have considered the facts alleged by the I.G. in connection with his motion
for summary disposition. I
have also considered the I.G.'s arguments and applicable law. I conclude that
the I.G. established that he
has authority to exclude Petitioner pursuant to section 1128(b)(4)(B) of the
Act. I also conclude that, based
on the undisputed material facts adduced by the I.G., the exclusion imposed
and directed against Petitioner
is reasonable. Therefore, I enter summary disposition in favor of the I.G.
ISSUES
The issues in this case are whether the:
1. I.G. has authority to impose and direct an exclusion against Petitioner
under section
1128(b)(4)(B) of the Act; and
2. length of the exclusion which the I.G. imposed and directed against Petitioner is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a chiropractor who has practiced in the State of Iowa. I.G. Ex. 1, 2.
2. On May 9, 1990, the Iowa Board of Chiropractic Examiners (Board of Examiners)
notified Petitioner
that a disciplinary hearing had been scheduled concerning his license to practice
as a chiropractor in the
State of Iowa. I.G. Ex. 1.
3. The Board of Examiners told Petitioner that the hearing would address the
issue of whether or not
disciplinary action should be taken against Petitioner's license as a result
of alleged violations by Petitioner
of the Board of Examiners' rules concerning: habitual intoxication or addiction
to drugs; inability to
practice chiropractic with reasonable skill and safety by reason of a mental
or physical impairment or
chemical abuse; and violating a lawful order of the Board of Examiners, previously
entered against
Petitioner in a disciplinary hearing. I.G. Ex. 1.
4. The Board of Examiners told Petitioner that allegations against him included
allegations that he had
continued to use drugs since 1988 and failed to comply with an order to advise
the Board of Examiners of
any initiation or final disposition of any charge or allegations against him
by any agency. I.G. Ex. 1.
5. On August 19, 1990, Petitioner entered into a settlement agreement with
the Board of Examiners. I.G.
Ex. 2.
6. Pursuant to the settlement agreement, Petitioner's license to practice as
a chiropractor in Iowa was
revoked. I.G. Ex. 2.
7. The settlement agreement precluded Petitioner from applying for reinstatement
of his license for at least
one year from the date of the agreement. I.G. Ex. 2.
8. The settlement agreement conditioned Petitioner's eligibility for reinstatement
on his providing evidence
of successful completion of a substance abuse program, including submitting
any records or information
that the Board of Examiners deemed necessary. I.G. Ex. 2.
9. The settlement agreement further conditioned Petitioner's eligibility for
reinstatement on his submitting
to any additional substance abuse evaluations deemed necessary by the Board
of Examiners, at Petitioner's
expense, including submitting to witnessed blood or urine testing. I.G. Ex.
2.
10. The settlement agreement further conditioned Petitioner's eligibility for
reinstatement on his providing
evidence of completion of the appropriate number of continuing education hours
as required by Iowa
regulation. I.G. Ex. 2.
11. Petitioner surrendered his license to practice as a chiropractor in Iowa
to the Board of Examiners, a
state licensing board, while a formal disciplinary proceeding was pending before
that board. Findings 2, 5,
6.
12. The Board Examiners proceeding against Petitioner concerned his professional
competence or
performance. Findings 3, 4.
13. The Secretary delegated to the I.G. the authority to determine, impose,
and direct exclusions pursuant
to section 1128 of the Act. 48 Fed. Reg. 21662, May 13, 1983.
14. On September 21, 1990, the I.G. excluded Petitioner from participating
in the Medicare program, and
directed that he be excluded from participating in Medicaid, pursuant to section
1128(b)(4)(B) of the Act.
15. Petitioner's exclusion is effective until such time as he receives a valid
license to practice health care in
the State of Iowa.
16. There are no disputed material facts in this case and summary disposition is appropriate.
17. The I.G. had authority to exclude Petitioner from participating in Medicare
and to direct that he be
excluded from participating in Medicaid. Findings 11, 12; Social Security Act,
section 1128(b)(4)(B).
18. The exclusion imposed and directed against Petitioner by the I.G. is reasonable.
Social Security Act,
section 1128(b)(4)(B).
ANALYSIS
There are no disputed material facts in this case. The I.G. offered exhibits
consisting of copies of the
official records of the Board of Examiners. Petitioner did not challenge the
authenticity or contents of the
exhibits. The exhibits establish that Petitioner is a chiropractor who was licensed
to practice in the State of
Iowa. In May 1990, the Board of Examiners notified Petitioner that a disciplinary
hearing had been
scheduled concerning his license. Petitioner was notified that possible grounds
for disciplinary action
against him included: habitual intoxication or addiction to drugs; inability
to practice chiropractic with
reasonable skill and safety by reason of a mental or physical impairment or
chemical abuse; and violation
of a Board of Examiners' order previously entered against Petitioner in a disciplinary
hearing. Petitioner
was advised that these possible grounds for discipline were the result of allegations
that he had continued
to use drugs since 1988 and failed to advise the Board of Examiners of the initiation
or final disposition of
allegations against him by another agency.
In August 1990, Petitioner and the Board of Examiners entered into a settlement
agreement. The terms of
the agreement included revocation of Petitioner's license to practice as a chiropractor
in Iowa. The
agreement provided that, after one year, Petitioner would be eligible to apply
to the Board of Examiners for
reinstatement. However, reinstatement would be conditioned on Petitioner providing
evidence that he had
successfully completed a program of treatment for substance abuse. Reinstatement
was further conditioned
on Petitioner agreeing to submit to tests for substance abuse as determined
to be necessary by the Board of
Examiners. Finally, the Board required Petitioner, as a condition for reinstatement,
to provide evidence of
completion of continuing education courses as required by state regulation.
The I.G. imposed and directed an exclusion against Petitioner pursuant to section
1128(b)(4)(B) of the Act.
This section permits exclusion of any individual or entity:
[W]ho surrendered . . . a license [to provide health care] while a formal
disciplinary proceeding was
pending before . . . a [state licensing authority] and the proceeding concerned
the individual's or entity's
professional competence, professional performance, or financial integrity.
The term of the exclusion imposed and directed by the I.G. against Petitioner
is coterminous with
Petitioner's license revocation. Petitioner will be eligible to apply to the
I.G. for reinstatement as a provider
of Medicare and Medicaid upon reinstatement of his Iowa license to practice
as a chiropractor. The effect
of the exclusion is to bar Petitioner from receiving payment for any Medicare
items or services for which
he might claim reimbursement. The duration of the exclusion is indefinite. Although
Petitioner may be
eligible to apply for reinstatement of his license to practice as a chiropractor
as early as August 19, 1991,
his eligibility for reinstatement is also conditioned on his satisfying the
other terms of the settlement
agreement, including proving that he has successfully completed a program of
treatment for substance
abuse and that he has met Iowa's continuing education requirements. There is
no guarantee that Petitioner
will meet these requirements by August 1991, or that he will ever meet them.
Petitioner did not file a response to the I.G.'s motion for summary disposition.
In his hearing request,
Petitioner contended that the Board of Examiners' disciplinary proceeding against
him did not concern his
professional competence or performance. Petitioner did not deny that he had
surrendered his license while
a formal disciplinary proceeding was pending against him. Nor did Petitioner
assert that the term of the
exclusion, assuming the I.G. had authority to exclude him, was unreasonable.
Petitioner does not contend
that he has or seeks a license to provide chiropractic services in any state
other than Iowa, and he does not
assert that he wishes to be a participant in Medicare and Medicaid in any status
other than as a chiropractor.
1. The I.G. has authority to impose and direct an exclusion against Petitioner
under section
1128(b)(4)(B) of the Act.
The notice sent to Petitioner by the Board of Examiners shows that the proceeding
against him constituted
formal disciplinary proceedings which concerned his professional competence
or performance. Petitioner
was specifically notified by the Board of Examiners that it had scheduled a
disciplinary hearing concerning
his license to provide health care. It advised Petitioner that the possible
grounds for action concerning his
license included Petitioner's habitual intoxication or addiction to drugs and
inability to practice chiropractic
with reasonable skill and safety by reason of a mental or physical impairment
or chemical abuse.
Although the terms "professional competence" and "professional
performance" are not defined in section
1128(b)(4), the plain meaning of these terms encompasses the ability to practice
a licensed service with
reasonable skill and safety. Thus, the basis for the Board of Examiners' disciplinary
proceeding against
Petitioner fell squarely within the meaning of section 1128(b)(4)(B).
In his hearing request, Petitioner asserted that the basis for the Board of
Examiners' proceeding against him
did not concern his professional competence or performance. Petitioner averred
that the proceedings
related to a criminal charge for fraud filed against him in 1990 by the State
of Iowa concerning an
application which Petitioner had filed for a credit card application.
I do not find that the Board of Examiners' notice to Petitioner proves that
the proceedings were in any
respect related to a criminal charge of fraud. See I.G. Ex. 1. The Notice did
include allegations concerning
Petitioner's failure to report to the Board of Examiners the initiation or final
disposition of criminal
charges, including a conviction for theft and an arrest for an undisclosed offense.
Arguably, Petitioner's
asserted failure to report these events could concern his financial integrity.
However, it is unnecessary for
me to make findings on this issue because the Board of Examiners' proceedings
so plainly concerned
Petitioner's professional competence and performance.
2. The length of the exclusion which the I.G. imposed and directed against Petitioner is reasonable.
As I note above, Petitioner has not contended that the indefinite exclusion
imposed and directed by the I.G.
is unreasonable. I conclude that the exclusion is on its face reasonable and
I sustain it in the absence of any
allegation that it is not reasonable.
Section 1128 is a civil remedies statute. The purpose of any exclusion imposed
and directed pursuant to
this section is remedial. The remedial purpose of the exclusion law is to enable
the Secretary to protect
federally-funded health care programs from misconduct, including fraud or theft.
It also includes
neglectful or abusive conduct against program recipients and beneficiaries.
See S. Rep. No. 109, 100th
Cong., 1st Sess. 1, reprinted in 1987 U.S. Code Cong. & Admin. News 682.
The remedial purpose of section 1128(b)(4) encompasses protection of program
funds and beneficiaries
and recipients from providers who have been determined by state licensing authorities
either to be
dishonest, or to lack the competence or professional ability to provide services
consistent with the
requirements for licensure. The remedy also extends to protect the program funds
and beneficiaries and
recipients from providers who, when faced with disciplinary action by state
licensing authorities
concerning their professional competence, performance, or financial integrity,
elect to surrender their
licenses in lieu of completing a formal disciplinary process.
Petitioner and the Board of Examiners agreed to a revocation of Petitioner's
license to provide health care
and stipulated the conditions which would qualify him for reinstatement of his
license. Those conditions
related to the basis for the disciplinary proceeding that had been initiated
against Petitioner. The notice of
hearing which the Board of Examiners sent to Petitioner evidences a concern
that Petitioner, by virtue of
possible abuse of drugs, was unable to practice chiropractic with reasonable
skill and safety. From the face
of the settlement agreement, it is apparent that the Board of Examiners found
that the key prerequisite to
license reinstatement was that Petitioner prove that he was not continuing to
engage in substance abuse.
Petitioner agreed to this prerequisite and to the other elements of the settlement
agreement.
The I.G. addressed the same remedial considerations embodied in the settlement
agreement and the terms
of Petitioner's license revocation by making the exclusion imposed against Petitioner
coterminous with the
license revocation. The terms for restoration of licensure, and by extension,
for reinstatement as a
Medicare and Medicaid provider, are plainly intended to assure that Petitioner
not be entrusted to treat
program beneficiaries and recipients until he has established that he is no
longer engaging in substance
abuse. The one-year minimum period of exclusion does not appear to be unreasonable
given the
allegations made against Petitioner and his acceptance of the settlement agreement.
Thus, the conditions of
the exclusion are on their face reasonably related to the remedial considerations
embodied in section 1128.
I find that the I.G.'s exclusion determination is reasonable in the absence
of any fact allegations which
would call into doubt its relation to the remedial purpose of section 1128.
This conclusion does not mean
that Petitioner could not have raised questions of material fact in the context
of this proceeding which
would have called into question the reasonableness of the exclusion and which
would require an in-person
hearing to resolve. Lakshmi N. Murty Achalla, M.D., DAB App. 1231 (1991). While
an indefinite
exclusion, such as that imposed here, may be reasonable under section 1128(b)(4)(B),
it is not mandated by
that section. Achalla at 9.
In Achalla, for example, the petitioner's state licenses to practice medicine
had been revoked by the States
of Florida and Pennsylvania and had been placed in "inactive" status
by the State of Georgia. The
petitioner had subsequently relocated to New York, acquired a license to practice
medicine, and had
established a practice there. The I.G. had imposed an indefinite exclusion against
the petitioner, with
eligibility for reinstatement conditioned on the petitioner having his Florida
license to practice medicine
restored. The administrative law judge who heard that case conducted an in-person
hearing and held that,
based on the evidence adduced at the hearing, the terms of the exclusion imposed
and directed by the I.G.
were not reasonable. He modified the exclusion to a term of three years, and
the Departmental Appeals
Board sustained this decision.
What distinguishes Achalla from this case is that, in Achalla, the petitioner
alleged that there were facts
that called into question the remedial necessity for the I.G.'s indefinite exclusion
determination. A central
allegation was the petitioner's argument that the remedial purposes of the Act
would not be satisfied by
compelling him to have his Florida license restored as a necessary precondition
for reinstatement as a
Medicare or Medicaid provider.
There may be circumstances in any case under section 1128(b)(4)(B) which would
raise disputed material
fact issues concerning the reasonableness of an exclusion. The Achalla case
provides an example.
However, no disputed issue of material fact was raised by Petitioner in this
case concerning the
reasonableness of the exclusion imposed and directed against him by the I.G.
Petitioner has not asserted
that the exclusion is unfair. There exists no need for me to hold an in-person
hearing to resolve issues that
have not been raised, given the fact that the exclusion in this case is on its
face reasonably related to the
remedial purpose of the Act. Andy E. Bailey, C.T., DAB App. 1131 (1990); John
W. Foderick, M.D.,
DAB App. 1125 (1990).
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from the Medicare program, and to direct that Petitioner be excluded
from participating in
Medicaid, was authorized pursuant to section 1128(b)(4)(B) of the Act and is
reasonable. Therefore, I
enter summary disposition in favor of the I.G. in this case.
_______________________
Steven T. Kessel
Administrative Law Judge