Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: Barclay M. Wilson, D.O., Petitioner,
- v. -
The Inspector General.

DATE: November 10, 1992

Docket No. C-92-122
Decision No. CR241

DECISION

By letter dated June 17, 1992, Barclay M. Wilson, D.O., the Petitioner herein, was notified by the Inspector
General (I.G.), U.S. Department of Health & Human Services (HHS), that he been excluded for a period of
five years from participation in the Medicare program and from participation in the State health care
programs mentioned in section 1128(h) of the Social Security Act (Act). (Unless the context indicates
otherwise, I use the term "Medicaid" in this Decision when referring to the State programs.) The I.G.
explained that the five-year exclusion was mandatory under sections 1128(a)(1) and 1128(c)(3)(B) of the
Act because Petitioner had been convicted of a criminal offense related to the delivery of an item or service
under Medicaid.

Petitioner filed a timely request for review of the I.G.'s action, and the I.G. moved for summary
disposition. Because I conclude that there are no material and relevant factual issues in dispute, I have
granted the I.G.'s motion and have decided the case on the basis of written submissions in lieu of an in-
person hearing.

I uphold the I.G.'s determination to exclude Petitioner from participation in the Medicare and Medicaid
programs for a period of five years.

APPLICABLE LAW

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act make it mandatory for any individual who has been
convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid to
be excluded from participation in such programs for a period of at least five years.

Section 1128(b) permits, but does not mandate, the exclusion of any person whom the Secretary of HHS
concludes is guilty, or has been convicted, of health care related fraud, kickbacks, false claims, or similar
activities. It incorporates, as bases for exclusion, offenses described in sections 1128A and 1128B of the
Act.

ARGUMENT

Petitioner argues that any charges against him should have been brought under the permissive exclusion
provisions of section 1128(b) inasmuch as his offenses bore only a remote relationship to the delivery of
items or services under Medicaid.

FINDINGS OF FACT AND CONCLUSIONS OF LAW 1/

1. During the period relevant to this case, Petitioner was a licensed osteopathic physician and Medicaid
provider in the State of Pennsylvania.

2. On March 11, 1991, Petitioner pled guilty in the Court of Common Pleas for Northumberland County,
Pennsylvania, to four felony counts of Medicaid fraud. I.G. Ex. 2/9 - 12, /16 - 22.

3. Petitioner was sentenced on each of the four felony counts of Medicaid fraud to one year probation, a
fine of $1,000 and a $25/month probation supervision fee and 50 hours of community service, for a total of
four years probation, a $4,000 fine, a $100/month probation supervi-sion fee and 200 hours of community
service. I.G. Ex. 14 - 17.

4. The Secretary of the Department of Health and Human Services has delegated to the I.G. the authority
to determine and impose exclusions pursuant to section 1128 of the Act. 48 Fed. Reg. 21662 (May 13,
1983).

5. Petitioner's criminal conviction for four felony counts of Medicaid fraud is related to the delivery of an
item or service under Medicaid, within the meaning of section 1128(a), and thus mandates an exclusion for
at least five years.

DISCUSSION

The first statutory requirement for the imposition of mandatory exclusion pursuant to section 1128(a)(1) of
the Act is that the individual or entity in question must have been convicted of a criminal offense under
federal or State law. In the case at hand, Petitioner pled guilty to four felony counts of Medicaid fraud and
he was sentenced by a State court. This, manifestly, satisfies the first criterion of section 1128(a)(1). See
subsection 1128(i) of the Act.

The second statutory requirement under section 1128(a)(1) is that the crime at issue be related to the
delivery of an item or service under Medicaid or Medicare. This criterion is met where there is a common
sense connection between a criminal offense and the Medicaid or Medicare programs. Clarence H. Olson,
DAB CR46 (1989). A person may be guilty of a program related offense even if he or she did not
physically deliver items or services. Jack W. Greene, DAB 1078 (1989). Other relevant precedent holds
that a criminal offense is deemed to be related to the delivery of an item or service under Medicaid or
Medicare where the delivery of such Medicaid or Medicare item or service is an element in the chain of
events constituting the offense. See Larry W. Dabbs & Gary L. Schwendimann, DAB CR151 (1991), and
cases cited therein.

I conclude that there is a clear connection between the criminal conduct upon which Petitioner's conviction
was based and the delivery of items or services under Medicaid. The documentary evidence submitted by
the I.G. shows, on its face, that Petitioner was charged with, pled guilty to, and was sentenced for, four
separate counts of Medicaid fraud. I.G. Ex. 2; I.G. Ex. 3/1, 5 - 6; I.G. Ex. 14 - 17. A plea of guilty that is
accepted by a State court, as Petitioner's was, is a conviction for purposes of section 1128(a). Social
Security Act, section 1128(i)(3). Moreover, Petitioner's conviction is, on its, face, related to the Medicaid
program. This evidence alone is sufficient to enable me to find that Petitioner was convicted of a program
related offense within the meaning of section 1128(a)(1).

However, the record of this case provides even further evidence to support that Petitioner's conviction is
related to the delivery of a Medicare item or service within the meaning of section 1128(a)(1). The factual
basis underlying Petitioner's guilty plea to four counts of Medicaid fraud was Petitioner knowingly issuing
prescription drugs to a medical assistance recipient, when, in fact, he knew the prescription drugs would be
given to a third person not eligible for medical assistance benefits. I.G. Ex. 2/16 - 22. Petitioner, in
pleading guilty to Medicaid fraud, admitted that he knew that the purpose of issuing the prescriptions was
to ensure that the medical assistance program would reimburse him for the prescriptions, where it
otherwise would not have. I.G. Ex. 2/16 - 19. The admissions made by Petitioner during his guilty plea, in
conjunction with Petitioner's subsequent sentencing by the court, indicate that, in obtaining illicit
reimbursement from the State medical assistance program, Petitioner was defrauding the Medicaid
program. I.G. Ex. 2/16 - 22; I.G. Ex. 14 - 17.
Petitioner's admissions provide additional evidence that his conviction is program related within the
meaning of section 1128(a)(1). However, I reiterate that these admissions are not necessary to my
determination in this case. Petitioner's conviction alone is, on its face, sufficient evidence for me to find
Petitioner subject to the mandatory exclusion provision of section 1128(a)(1).
Petitioner's pattern of unlawful conduct began with his abusing the prescription process and continued with
his de facto cooperation with the submission of false claims. The Medicaid program was the intended
target of the fraud and Petitioner's acts directly impacted essential elements of the Medicaid treatment-
payment cycle. Under these circumstances, exclusion pursuant to section 1128(a)(1) is appropriate and a
period of exclusion of at least five years is mandatory.

Petitioner argues also that the I.G. should have treated his criminal conviction as grounds for a permissive
exclusion action. In this regard, the appellate decision rendered by the DAB in Samuel W. Chang, M.D.,
DAB 1198 (1990), held that "the permissive exclusion provisions of section 1128(b) apply to convictions
for offenses other than those related to the delivery of an item or service under either the Medicare or
Medicaid ... programs."
Also relevant is a recent decision in which an appellate panel considered the relationship between section
1128(a)(1) and section 1128(b)(1). It concluded that where a criminal conviction satisfies the requirement
of section 1128(a)(1), then that section is controlling and the I.G. must impose the mandatory exclusion
which the statute provides. The fact that the criminal conviction may appear to fall also within the broader
criteria for permissive exclusion found in section 1128(b)(1) is irrelevant. Boris Lipovsky, M.D., DAB
1363 (1992).

In light of this precedent, it is evident that the I.G. committed no error, under the facts of this case, in
proceeding under 1128(a)(1) and, indeed, that the I.G. had no discretion to do otherwise.

CONCLUSION

Petitioner's conviction requires his exclusion for a period of at least five years pursuant to section
1128(a)(1).

____________________________
Joseph K. Riotto
Administrative Law Judge

1. Petitioner and the I.G. submitted written argument and the I.G. submitted documentary exhibits. I
admitted all of the exhibits into evidence and refer to them herein as I.G. Ex. (number/page).