Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
John A. Crawford, Jr., M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: October 18, 1991
Docket No. C-364
DECISION
On March 22, 1991 the Inspector General (I.G.) notified Petitioner that he
was being excluded from
participation in the Medicare and State health care programs. 1/ The I.G. told
Petitioner that he was being
excluded pursuant to section 1128(a)(1) of the Social Security Act (Act) because
he had been convicted of
a criminal offense related to Medicare. The I.G. advised Petitioner that the
Act mandated that he be
excluded for at least five years, and that the I.G. had determined to exclude
Petitioner for a period of six
years.
Petitioner timely requested a hearing and the case was assigned to me for a
hearing and decision. I held a
hearing in Chicago, Illinois, on July 18, 1991.
I have considered the evidence, the parties' arguments, and the applicable
laws and regulations. I conclude
that the I.G. was mandated by section 1128(a)(1) to exclude Petitioner for at
least five years. I conclude
further that the six-year exclusion imposed and directed against Petitioner
by the I.G. is reasonable.
ISSUES
The issues in this case are whether:
1. I have authority to decide whether the exclusion in this case violated
Petitioner's constitutional
right not to be placed in double jeopardy;
2. I have authority to decide whether the exclusion in this case is an unconstitutional
ex post facto
application of the Act; and
3. the six-year exclusion imposed and directed against Petitioner by the I.G. is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a physician whose practice has included treating patients in their homes. Tr. at 123-127. 2/
2. In April 1987, a United States grand jury indicted Petitioner on 32 counts
of Medicare fraud and 17
counts of mail fraud. I.G. Ex. 1/1-55.
3. On February 15, 1990 Petitioner was convicted of 20 counts of Medicare fraud
and five counts of mail
fraud. I.G. Ex. 2/1-4.
4. Petitioner was convicted of knowingly submitting for Medicare reimbursement
claim forms containing
false statements and representations concerning the number, dates, location,
and nature of claimed medical
services. I.G. Ex. 1/15, /17-24, /26-35, /38; I.G. Ex. 2/1.
5. Petitioner was convicted of knowingly causing Medicare reimbursement checks
to be delivered to him
in the mail as an element of a scheme to unlawfully obtain Medicare reimbursement.
I.G. Ex. 1/2, /40, /42,
/44, /52, /54; I.G. Ex. 2/1.
6. Petitioner was sentenced to a term of five years' probation, six months'
service in a work release
program, and 500 hours of community service. I.G. Ex. 2/2.
7. Petitioner was ordered not to practice any medicine involving Medicare or
Medicaid payments during
his term of probation. I.G. Ex. 2/2.
8. Petitioner was additionally ordered to pay a special assessment of $1,300.00
to the United States and to
pay restitution to Medicare. I.G. Ex. 2/1, /3.
9. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under the
Medicare program. Findings 2-5; Social Security Act, section 1128(a)(1).
10. Petitioner's fraud included knowingly presenting numerous claims for Medicare
reimbursement for
items or services which Petitioner had never provided. I.G. Ex. 1/15, /17-24,
/26-35, /38; I.G. Ex. 2/1; I.G.
Ex. 9/1-2; I.G. Ex. 10/10-16; I.G. Ex. 13/21-27;
I.G. Ex. 15; I.G. Ex. 17/13-24; I.G. Ex. 19; I.G. Ex. 21/20, /27-32, /35; I.G.
Ex. 25; I.G. Ex. 26/9-10, /16,
/19-21; See 42 C.F.R. 1001.125(b)(1).
11. The Medicare program suffered substantial pecuniary loss as a result of
Petitioner's fraud. See I.G. Ex.
2/3; Tr. at 111; See 42 C.F.R. 1001.125(b)(3).
12. Petitioner presented fraudulent Medicare reimbursement claims over a two-year
period, a lengthy
period of time. I.G. Ex. 8; I.G. Ex. 28; See 42 C.F.R. 1001.125(b)(1), (6).
13. Petitioner's denial that he ever presented false Medicare reimbursement
claims is not credible. See
Findings 3-10; See P. Ex. 3/7; Tr. at 154-155.
14. Petitioner refuses to accept any responsibility for his wrongful conduct. See Finding 13.
15. Petitioner's fraud against the Medicare program and his refusal to acknowledge
responsibility for such
fraud establishes that he is not a trustworthy provider of health care. Findings
3-14.
16. The personal support and trust placed in Petitioner by friends and associates
does not establish that
Petitioner is a trustworthy provider of health care. See P. Ex. 2; P. Ex. 3/1-6;
P. Ex. 4; P. Ex. 5; P. Ex. 7; P.
Ex. 8, 8A - 8D.
17. The Secretary of Health and Human Services (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).
18. On March 22, 1991 the I.G. excluded Petitioner from participating in Medicare
and directed that he be
excluded from participating in Medicaid, pursuant to section 1128(a)(1) of the
Act.
19. The exclusion imposed and directed against Petitioner is for six years.
20. The I.G. had authority to impose and direct an exclusion against Petitioner
pursuant to section
1128(a)(1) of the Act, because Petitioner had been convicted of a criminal offense
related to the delivery of
an item or service under Medicare. Finding 9; Social Security Act, section 1128(a)(1).
21. The minimum mandatory exclusion which the I.G. must impose and direct against
an individual
pursuant to section 1128(a)(1) of the Act is five years. Social Security Act,
section 1128(c)(3)(B).
22. An exclusion of six years is needed in this case to protect federally-funded
health care programs and
their beneficiaries and recipients from the commission of future harm by Petitioner.
23. I do not have authority to decide whether the exclusion imposed and directed
against Petitioner by the
I.G. violates Petitioner's constitutional right against being placed in double
jeopardy. See 42 C.F.R.
1001.128(a).
24. I do not have authority to decide whether the exclusion imposed and directed
against Petitioner by the
I.G. is an unconstitutional ex post facto application of the Act. See 42 C.F.R.
1001.128(a).
ANALYSIS
The parties do not dispute that Petitioner was convicted of a criminal offense
related to the delivery of an
item or service under Medicare. Petitioner was convicted of, among other things,
20 counts of fraud
against the Medicare program. Petitioner's fraud consisted of presenting false
claims for Medicare
reimbursement to the program. This crime plainly relates to the delivery of
items or services under
Medicare. Jack W. Greene, DAB App. 1078 (1989), aff'd sub nom. Greene v. Sullivan,
731 F. Supp. 835,
838 (E.D. Tenn. 1990). Therefore, the I.G. was mandated by section 1128(a)(1)
of the Act to exclude
Petitioner from participating in Medicare. Furthermore, the Act requires that,
for exclusions imposed
pursuant to section 1128(a)(1), the minimum exclusion period must be for at
least five years. Social
Security Act, section 1128(c)(3)(B).
Petitioner argues that the exclusion was improper in this case for three reasons.
First, he asserts that the
exclusion serves as a punishment of Petitioner in addition to that imposed by
the United States District
Court as a sentence for Petitioner's crimes. Therefore, according to Petitioner,
the I.G.'s imposition of an
exclusion against him amounted to an unconstitutional placing of Petitioner
in double jeopardy. Second,
Petitioner contends that the exclusion constitutes an unconstitutional ex post
facto application of the Act.
Finally, he argues that the six-year exclusion which was imposed and directed
against Petitioner is
unreasonable, given the evidence in this case.
1. I do not have authority to decide whether the exclusion in this case violated
Petitioner's
constitutional right not to be placed in double jeopardy.
My authority to hear and decide cases pursuant to section 1128 of the Act is
limited to the issues of
whether the I.G. had statutory authority to impose and direct an exclusion and
whether the exclusion is
reasonable. I do not have the authority to decide whether the I.G.'s determination
to impose and direct an
exclusion is an unconstitutional application of the Act. Betsy Chua, M.D. et
al., DAB App. 1204 (1990);
see 42 C.F.R. 1001.128(a). Therefore, I do not have authority to decide whether
the I.G.'s exclusion
determination in this case was an unconstitutional placing of Petitioner in
double jeopardy.
However, I do have authority to rule on the factual premises and contentions
of the parties, as well as to
interpret laws, regulations, and applicable court decisions. Chua, supra; see
Edward J. Petrus, Jr., M.D. et
al., DAB Civ. Rem. C-147 (1990), aff'd DAB App. 1264 (1991); Greene, supra.
The premise of Petitioner's double jeopardy argument is that the exclusion
in this case is a punitive
application of section 1128(a)(1) by the I.G. against Petitioner. Petitioner
asserts that, inasmuch as he has
already been punished once for his crimes, a punitive exclusion constitutes
an unconstitutional "second
punishment." He relies on the Supreme Court's decision in United States
v. Halper, 490 U.S. 435 (1989) as
support for his argument.
Arguably, Petitioner could find support for his argument in the Halper decision
assuming that his premise
is correct that the exclusion imposed and directed against him by the I.G. is
punitive and not remedial.
Halper restates the constitutional principle that a party cannot be punished
twice for the same offense.
However, Halper also unequivocally states that a remedial civil penalty imposed
against a party which is
derived from the same facts upon which that party was previously convicted and
for which that party was
previously punished in a criminal prosecution does not implicate the double
jeopardy clause of the United
States Constitution. Id. at 448.
I conclude at Part 3 of this Analysis that the exclusion imposed and directed
against Petitioner by the I.G. is
a reasonable remedial application of the Act. Therefore, although I reach no
conclusion as to the
constitution-ality of the I.G.'s exclusion determination, I find that the premise
on which Petitioner rests his
double jeopardy argument -- that the exclusion is punitive and a "second
punishment" -- is incorrect. 3/
2. I do not have authority to decide whether the exclusion in this case is
an unconstitutional ex
post facto application of the Act.
Petitioner argues that the I.G.'s exclusion determination is an unconstitutional
ex post facto application of
the Act. He contends that the 1987 revisions to section 1128, which for the
first time mandated an
exclusion of at least five years for individuals convicted of program-related
crimes, may only
constitutionally apply to conduct occurring on or after the effective date of
the revisions. Petitioner
contends that, inasmuch as the conduct for which he was convicted transpired
prior to 1987, it cannot
constitutionally comprise a basis for the exclusion imposed and directed in
this case.
As with Petitioner's other constitutional argument, I lack authority to decide
this contention. See Part 1 of
this Analysis. I would note, however, that the argument made by Petitioner here
was also made by the
petitioners in the Chua case. Both Judge Stratton, the administra-tive law judge
who heard and decided
Chua, and the appellate panel of the Departmental Appeals Board which reviewed
and affirmed his
decision, concluded that the ex post facto clause of the United States Constitution
forbids penal legislation
which imposes or increases criminal punishment for conduct lawful prior to its
enactment. Inasmuch as
section 1128(a)(1) is, both in its language and intent and in its application
in this case, a civil remedies law,
the underlying premise of Petitioner's constitutional argument as to the ex
post facto clause is incorrect.
DAB App. 1204 at 6; see Part 3 of this Analysis.
3. The six-year exclusion imposed and directed against Petitioner is reasonable.
Section 1128 is a civil remedies statute. The remedial purpose of section 1128
is to enable the Secretary to
protect federally-funded health care programs and their beneficiaries and recipients
from individuals and
entities who have proven by their misconduct that they are untrustworthy. Exclusions
are intended to
protect against future misconduct by providers. Manocchio v. Sullivan, No. 90-8114,
slip op. at 1 (S.D.
Fla. July 12, 1991).
Federally-funded health care programs are no more obligated to deal with dishonest
or untrustworthy
providers than any purchaser of goods or services would be obligated to deal
with a dishonest or
untrustworthy supplier. The exclusion remedy allows the Secretary to suspend
his contractual relationship
with those providers of items or services who are dishonest or untrustworthy.
The remedy enables the
Secretary to assure that federally-funded health care programs will not continue
to be harmed by dishonest
or untrustworthy providers of items or services. The exclusion remedy is closely
analogous to the civil
remedy of termination or suspension of a contract to forestall future damages
from a continuing breach of
that contract.
Exclusions may have the ancillary benefit of deterring providers of items or
services from engaging in the
same or similar misconduct as that engaged in by excluded providers. However,
the primary purpose of an
exclusion is the remedial purpose of protecting the trust funds and beneficiaries
and recipients of those
funds. Deterrence cannot be a primary purpose for imposing an exclusion. Where
deterrence becomes the
primary purpose, section 1128 no longer accomplishes the civil remedies objectives
intended by Congress.
Punishment, rather than remedy, becomes the end.
[A] civil sanction that cannot fairly be said solely to serve a remedial purpose,
but rather can be
explained only as also serving either retributive or deterrent purposes, is
punishment, as we have come to
understand the term.
United States v. Halper, 490 U.S. 435, 448 (1989).
Therefore, in determining the reasonableness of an exclusion, the primary consideration
must be the degree
to which the exclusion serves the law's remedial objective of protecting program
recipients and benefici-
aries from untrustworthy providers. An exclusion is not excessive if it does
reasonably serve these
objectives.
The hearing in an exclusion case is, by law, de novo. Social Security Act,
section 205(b). Evidence which
is relevant to the reasonableness of the length of an exclusion will be admitted
in a hearing on an exclusion
whether or not that evidence was available to the I.G. at the time the I.G.
made his exclusion determination.
Evidence which relates to a petitioner's trustworthiness or the remedial objectives
of the exclusion law is
admissible at an exclusion hearing even if that evidence is of conduct other
than that which establishes
statutory authority to exclude a petitioner. For example, in this case I allowed
Petitioner to introduce as
evidence numerous letters and petitions which he obtained from his friends and
associates attesting to his
trustworthiness and honesty. See P. Ex. 7; P. Ex. 8, 8A - 8D. These exhibits
were not offered in
Petitioner's criminal trial as evidence of his guilt or innocence.
The purpose of the hearing is not to determine how accurately the I.G. applied
the law to the facts before
him, but whether, based on all relevant evidence, the exclusion comports with
legislative intent. Because
of the de novo nature of the hearing, my duty is to objectively determine the
reasonableness of the
exclusion by considering what the I.G. determined to impose in light of the
statutory purpose and the
evidence which the parties offer and I admit. The I.G.'s thought processes in
arriving at his exclusion
determination are not relevant to my assessment of the reasonableness of the
exclusion.
Furthermore, my purpose in hearing and deciding the issue of whether an exclusion
is reasonable is not to
second-guess the I.G.'s exclusion determination so much as it is to decide whether
the determination was
extreme or excessive. 48 Fed. Reg. 3744 (Jan. 27, 1983). Should I determine
that an exclusion is extreme
or excessive, I have authority to modify the exclusion, based on the law and
the evidence. Social Security
Act, section 205(b).
The Secretary has adopted regulations to be applied in exclusion cases. The
regulations specifically apply
to exclusion cases for "program-related" offenses (convictions for
criminal offenses relating to Medicare or
Medicaid). The regulations express the Secretary's policy for evaluating cases
where the I.G. has discretion
in determining the length of an exclusion. The regula-tions require the I.G.
to consider factors related to
the seriousness and program impact of the offense and to balance those factors
against any factors that may
exist demonstrating trustworthiness. 42 C.F.R. 1001.125(b)(1) - (7). In evaluating
the reasonableness of
an exclusion, I consider the regulatory factors contained in 42 C.F.R. 1001.125(b).
The evidence in this case establishes Petitioner to be a highly untrustworthy
health care provider. For that
reason, the six-year exclusion imposed and directed against Petitioner by the
I.G. is a reasonable remedy.
Petitioner was convicted of 20 counts of Medicare fraud, involving numerous
false claims for Medicare
reimburse-ment. The evidence establishes that Petitioner engaged in a systematic
fraud of the Medicare
program for more than a two-year period. He unlawfully appropriated thousands
of dollars of trust fund
monies. I conclude from this evidence that Petitioner is an individual who is
capable of engaging in
flagrantly dishonest conduct when it suits his ends. His unlawful acts establish
a propensity to commit
harmful conduct which in and of itself justifies the remedy imposed in this
case. Moreover, Petitioner
refuses to admit that he has engaged in dishonest conduct or to accept any responsibility
for his acts. I find
that Petitioner's denial of responsi-bility in the face of overwhelming evidence
to the contrary establishes a
strong propensity on his part to commit future dishonest or damaging acts against
federally-funded health
care programs. This provides additional support for the remedy imposed and directed
against Petitioner by
the I.G.
The gravamen of Petitioner's fraud against Medicare was that Petitioner presented
numerous claims for
Medicare reimbursement for items or services which he never provided. Petitioner
made home visits to
elderly Medicare beneficiaries. His reimbursement claims for services for these
individuals included many
claims for services allegedly rendered at visits which never occurred. Finding
10; See, e.g., I.G. Ex. 25/2.
His fraudulent claims also included fictitious claims for services which Petitioner
never provided (such as
claims for Holter monitoring), regardless of whether Petitioner actually visited
the beneficiary for some
other reason. 4/ See, e.g., I.G. Ex. 4/1.
Petitioner submitted these many false claims over an extended period of time,
establishing that he
manifested a high level of culpability. This evidence as to Petitioner's culpability
alone satisfies me that
Petitioner is not trustworthy and that a lengthy exclusion is needed in this
case for remedial purposes.
But what is more disturbing is Petitioner's denial of responsibility for his
actions in the face of overwhelm-
ing evidence that he defrauded the Medicare program. Both at his criminal trial
and at the hearing in this
case, Petitioner asserted that he had never presented a false claim or defrauded
the Medicare program.
Findings 13, 14. Petitioner's denials fly in the face of the unequivocal testimony
of several Medicare
beneficiaries whom Petitioner falsely claimed to have treated. I conclude from
Petitioner's unwillingness
to acknowledge that he has engaged in wrongful conduct that he has offered me
no meaningful assurance
that he may not engage in future wrongdoing. 5/
Furthermore, I am disturbed by the way in which Petitioner attempted to deny
responsibility for his
misconduct. In my judgment, this is additional evidence of a lack of trustworthiness.
Upon being
confronted with the testimony of several Medicare beneficiaries that he had
not provided items or services
to them as he had claimed to have provided, Petitioner countered with the wholly
unpersuasive assertions
that these beneficiaries were incompetent, or suffering from mental illnesses,
or had been intimidated into
making false statements. Tr. at 127, 141.
I have considered the many statements which Petitioner offered from third parties
attesting to his character
and honesty. See P. Ex. 7; P. Ex. 8, 8A - 8D. These do not cause me to hesitate
in my conclusions that he
is an untrustworthy provider of care and that the six-year exclusion is reasonable
in this case. These
statements speak to the declarants' personal relationships with Petitioner and
to his skills as a physician. I
accept as true that the declarants may have found Petitioner to be honest and
of good character in his
personal dealings with them. Also, I do not question their judgment as to Petitioner's
skills. However,
none of these declarants profess knowledge of the evidence of Petitioner's crimes
or of the misconduct
which leads me to conclude that he is an untrustworthy provider of care. Therefore,
while the declarants'
statements may be literally true, they do not derogate in any sense from the
strong evidence of lack of
trustworthiness which I have discussed in this Decision.
CONCLUSION
Based on the law and the evidence, I conclude that the six-year exclusion from
participating in Medicare
and Medicaid imposed and directed against Petitioner is reasonable. Therefore,
I sustain the exclusion.
___________________________
Steven T. Kessel
Administrative Law Judg
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three types
of federally-financed health care programs, including Medicaid. I use the term
"Medicaid" hereafter to
represent all State health care programs from which Petitioner was excluded.
2. The parties' exhibits and the transcript of proceedings in this case will be cited as follows:
Inspector General Exhibit I.G. Ex. (number)/(page)
Petitioner Exhibit P. Ex. (number)/(page)
Transcript Tr. at (page)
3. One element of Petitioner's premise is that his criminal sentence included
a prohibition against his
offering health care items or services to Medicare beneficiaries and Medicaid
recipients during the term of
his probation (five years). Petitioner argues that, inasmuch as he has already
been punished by an
"exclusion," the exclusion in this case serves as a second punishment.
However, the sentence imposed
against Petitioner by the district court serves a different purpose (punishment)
than the exclusion imposed
and directed against Petitioner by the I.G. (remedy). That the punishment and
the remedy may have
similar features, or, in some respects, may achieve complementary results, does
not derogate from their
separate purposes.
4. Holter monitoring is an electrocardiographic tracing conducted over a protracted
period of time. Tr. at
95 - 97. Petitioner claimed reimbursement for such services when, in fact, he
did not provide them. Tr. at
99.
5. Petitioner's expressions of remorse, proclaimed at a time when it plainly
suited his self-interest, ring
hollow. At his sentencing hearing, Petitioner told the judge that he was "very,
very sorry" for his actions
that resulted in his conviction, that he had learned some "very painful
lessons," that he acknowledged
having made many mistakes, and that these mistakes would not be repeated. P.
Ex. 6/14.