Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Eric Schwartz, D.P.M.,
Petitioner,
- v. -
The Inspector General.
DATE: May 11, 1992
Docket No. C-92-036
DECISION
On December 9, 1991, the Inspector General (I.G.) notified Petitioner that
he was being excluded from
participation in Medicare and any State health care program for a period of
five years. 1/ The I.G. stated
that Petitioner was being excluded as a result of his conviction of a criminal
offense related to the delivery
of an item or service under the New York Medicaid program. Petitioner was advised
that the exclusion of
an individual convicted of such an offense was mandated by section 1128(a)(1)
of the Social Security Act
(Act). The I.G. further advised Petitioner that the law required that the minimum
period of such an
exclusion be for not less than five years. The I.G. informed Petitioner that
he was being excluded for the
minimum period mandated by law.
Petitioner timely requested a hearing. The I.G. moved for summary disposition.
Petitioner opposed the
motion. I have considered the arguments made by the I.G. in his motion as well
as those made in
opposition to the motion by Petitioner. I have also considered the undisputed
material facts of the case
and applicable law. I conclude that the five-year exclusion imposed and directed
against Petitioner by the
I.G. is mandated by law. Therefore, I enter summary disposition in favor of
the I.G.
ISSUE
The issue in this case is whether Petitioner was convicted of a criminal offense
related to the delivery of an
item or service under a Medicaid program, within the meaning of section 1128(a)(1)
of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a podiatrist in the State of New York. I.G. Ex. 2/18. 2/
2. On February 7, 1991, Petitioner was convicted in a New York State Court
of the criminal offense of
filing a false instrument. I.G. Ex. 1; I.G. Ex. 2/12.
3. Petitioner pleaded guilty to falsely presenting claims for Medicaid reimbursement
for foot molds
fabricated from casts, when in fact the devices which he had made for patients
were made by a process
other than casts. I.G. Ex. 2/18 - 19.
4. In pleading guilty, Petitioner admitted to having submitted 358 false claims
for Medicaid
reimbursement. I.G. Ex. 2/19 - 20.
5. Petitioner was sentenced to pay restitution of $18,798.43. I.G. Ex. 1.
6. Petitioner was convicted of a criminal offense. Findings 2, 3; Social Security Act, 1128(i).
7. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under
Medicaid, within the meaning of section 1128(a)(1) of the Act. Findings 2, 3;
Social Security Act,
1128(a)(1).
8. The Secretary of the Department 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).
9. On December 9, 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.
10. There are no disputed issues of material fact in this case and summary disposition is appropriate.
11. The exclusion imposed and directed against Petitioner by the I.G. is for
five years, the minimum
period required under the Act. Social Security Act, 1128(a)(1) and 1128(c)(3)(B).
12. The exclusion imposed and directed against Petitioner by the I.G. is mandated
by law. Findings 1 - 7;
Social Security Act, 1128(a)(1) and 1128(c)(3)(B).
ANALYSIS
There are no disputed material facts in this case. Petitioner is a podiatrist
who practices in New York.
Petitioner pleaded guilty and was convicted of the criminal offense of filing
a false instrument. In pleading
guilty, Petitioner admitted to having presented 358 false claims for Medicaid
reimbursement. The claims
were false in that Petitioner represented that he had prepared orthotic devices
for patients' feet from molds
of these patients' feet, when in fact he had used another process. Based on
this conviction, the I.G.
excluded Petitioner under section 1128(a)(1) of the Act.
Petitioner does not deny that his offense is a conviction within the meaning
of section 1128(i) of the Act. 3/
Nor, apparently, does Petitioner dispute that individuals convicted of criminal
offenses within the meaning
of section 1128(a)(1) of the Act must be excluded for at least five years. In
this case, Petitioner was
excluded for the minimum period.
Petitioner's opposition to the I.G.'s motion, and his assertion that he should
not have been excluded, is
based on three contentions. First, Petitioner argues that, regardless of his
plea, there is no evidence of
intent on his part to defraud the New York Medicaid program. Therefore, according
to Petitioner, he was
not in fact convicted of a criminal offense related to the delivery of an item
or service under Medicaid.
Second, Petitioner contends that the Act is being applied to him in an unlawful
retroactive manner. He
bases this argument on his assertion that the conduct for which he was convicted
occurred prior to the
enactment of the current version of section 1128 in 1987. Finally, Petitioner
asserts that he is entitled to a
waiver of the exclusion, based on his cooperation with Medicaid officials.
I disagree with Petitioner's contentions. The undisputed facts are that Petitioner
was convicted of a
criminal offense related to his admitted presentation of false Medicaid claims.
That conviction is in and of
itself sufficient to establish the requisite basis for the exclusion imposed
and directed against Petitioner by
the I.G. Furthermore, inasmuch as this is a case which falls within the mandatory
exclusion provisions of
section 1128, Petitioner must be excluded based on his conviction, regardless
of any assertions he makes
concerning his culpability for the offense of which he was convicted. 4/
Section 1128(a)(1) of the Act requires the Secretary (or his delegate, the
I.G.) to impose and direct an
exclusion against any individual or entity:
that has been convicted of a criminal offense related to the delivery of an
item or service under . . .
[Medicare] or under any . . . [Medicaid] program.
The Act does not define the term "criminal offense related to the delivery
of an item or service." In Jack
W. Greene, DAB 1078 (1989), aff'd. sub nom. Greene v. Sullivan, 731 F. Supp.
835 and 838 (E.D. Tenn.
1990) (Greene), an appellate panel of the Departmental Appeals Board (Board)
held that a conviction for
submission of a false Medicaid claim was a conviction within the meaning of
section 1128(a)(1). The
appellate panel held that the offense was directly related to the delivery of
an item or service under
Medicaid:
since the submission of a bill or claim for Medicaid reimbursement is the
necessary step, following the
delivery of the item or service, to bring the "item" within the purview
of the program.
DAB 1078 at 7.
The offense to which Petitioner pleaded guilty in this case is clearly detailed
in the transcript of his plea.
I.G. Ex. 2. Petitioner admitted that he had filed false Medicaid claims for
orthotic devices. I.G. Ex. 2/18 -
19. He admitted that the claims were false in that he had alleged in the claims
that the orthotics were
prepared from molds of patients' feet when, in fact, they were prepared using
a different process. Id. He
admitted to having presented 358 such claims. As part of his plea, he agreed
to pay restitution to New
York Medicaid of over $18,000. I.G. Ex. 1. Petitioner's admissions in pleading
guilty make it clear that
his plea was to the offense of submitting false claims to the Medicaid program.
Under the test enunciated
in Greene, Petitioner's crime is related to the delivery of an item or service
under Medicaid.
An appellate panel of the Board also has held that a conviction of a criminal
offense is related to the
delivery of an item or service under Medicare or Medicaid where the victim of
the offense is the Medicare
or Medicaid program. Napoleon S. Maminta, M.D., DAB 1135 (1990) (Maminta). The
petitioner in
Maminta was convicted of converting a Medicare reimbursement check to his own
use, when the check
was intended to be paid to another health care provider. The rationale of Maminta
applies here. Petitioner
admitted to having presented false Medicaid claims. The victim of Petitioner's
criminal offense was the
New York Medicaid program.
For purposes of deciding whether summary disposition ought to be entered against
Petitioner, I am
assuming as true Petitioner's contention that he is not culpable of the offense
of which he was convicted.
However, this contention is not relevant to the question of whether the I.G.
had authority to exclude
Petitioner under section 1128(a)(1) of the Act.
Essentially, Petitioner contends that he is not really guilty of the crime
to which he pleaded and of which
he was convicted. However, the Act mandates exclusions for parties who are convicted
of criminal
offenses related to the delivery of an item or service under Medicare or Medicaid.
The fact that a party
may subsequently argue that he was not, in fact, guilty of the offense of which
he was convicted is
irrelevant if in fact he was convicted of an offense within the meaning of the
Act. Bernardo v. Bilang,
M.D., DAB 1295 (1992); Christino Enriquez, M.D., DAB CR119 (1991) at 11 - 12.
I find Petitioner's
assertion that the Act is being unlawfully applied retroactively to him to be
without merit. The 1987
version of the Act requires exclusions for convictions of program-related crimes.
The conviction in this
case was entered in February 1991, more than two years after the Act's effective
date. Therefore, there was
no retroactive application of the Act here, even though Petitioner may have
engaged in the criminal
misconduct for which he was convicted at a date prior to the Act's enactment.
David S. Muransky, D.C.,
DAB CR95 (1990), aff'd, DAB 1227 (1991).
The authority to waive an exclusion is contained in section 1128(d)(3)(B)(i)
of the Act, which provides
that:
The Secretary may waive an . . . exclusion under . . . [Medicaid] . . . if
the Secretary receives and
approves a request for the waiver with respect to the . . . [excluded party]
from the State agency
administering or supervising the administration of the program.
This section does not provide for waivers of exclusions from participating
in Medicare. It expressly
conditions eligibility for a waiver from an exclusion from partici-pating in
a Medicaid program on a
request by the State agency administering that program.
I do not have authority to decide Petitioner's contention that he is entitled
to a waiver from his exclusion.
The Act reserves to the Secretary the authority to grant waivers. The Secretary
has not delegated to
adminis-trative law judges the authority to rule on waiver requests. I note,
however, that Petitioner has
made no showing that he has satisfied the statutory precondition for a waiver.
There is no evidence to
suggest that the agency which administers the New York Medicaid program has
made a waiver request on
Petitioner's behalf.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from participation in Medicare, and to direct his exclusion from
Medicaid, for five years was
mandated by law. Therefore, I enter a decision in this case sustaining the five-year
exclusion imposed and
directed against Petitioner.
________________________
Steven T. Kessel
Administrative Law Judge
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 I.G. submitted four exhibits in support of his motion. I refer to these
exhibits as "I.G. Ex.
(number)/(page)." Petitioner submitted five exhibits in opposition to the
I.G.'s motion. I refer to these
exhibits as "P. Ex. (number)/(page)." Neither the I.G. nor Petitioner
disputed the facts contained in any of
these exhibits. For purposes of the record, I am admitting the I.G.'s exhibits
and Petitioner's exhibits into
evidence.
3. Section 1128(i)(1) defines a conviction to include entry of a judgment of
conviction against a party by
a court. A judgment of conviction was entered against Petitioner. I.G. Ex. 1.
Section 1128(i)(3) defines a
conviction to include acceptance of a plea of guilty by a court. On February
7, 1991, a New York court
accepted Petitioner's guilty plea. I.G. Ex. 2.
4. On January 29, 1992, the Secretary published regulations which, among other
things, govern
exclusion determinations made by the I.G. pursuant to section 1128 of the Act.
42 C.F.R. Part 1001, 57
Fed. Reg. 3298, 3330 - 3342 (January 29, 1992). Neither party contends that
these regulations are
applicable to this case, and I have not considered their potential impact here.
However, in Stephen J.
Willig, M.D., DAB CR192 (1992), I found that the new Part 1001 regulations did
not contain criteria
which established standards for review of exclusions by administrative law judges.