Robert H. Davis, R.Ph., CR No. 285 (1993)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: Robert H. Davis, R.Ph., Petitioner,
- v. -
The Inspector General.

DATE: September 20, 1993

Docket No. C-93-053
Decision No. CR285

DECISION

By letter dated December 10, 1992, Robert H. Davis, R.Ph., the Petitioner herein, was notified by the
Inspector General (I.G.), U.S. Department of Health & Human Services (HHS), that it had been decided to
exclude Petitioner for a period of five years from participation in the Medicare program and from
participation in the State health care programs described 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.'s rationale was that exclusion, for at least five years, is mandated by 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. 1/

Petitioner filed a timely request for review of the I.G.'s action. The I.G. moved for summary disposition.

Because I determined that there are no facts of decisional significance genuinely in dispute, and that the
only matters to be decided are legal, I have granted the I.G.'s motion and decided the case on the basis of
the parties' written submissions.

I affirm 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.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was a licensed pharmacist and owner/operator of Bill's
Discount Drugs located in Jeffersonville, Indiana. Petitioner's May 10, 1993 response brief at 1.

2. On June 26, 1991, a criminal Information was filed in the United States District Court, Southern District
of Indiana, alleging that Petitioner submitted "hundreds" of false and fraudulent claims for reimbursement
during the period 1985 - 1988. I.G. Ex. 3. 2/

3. The Information charged that Petitioner dispensed generic drugs, but billed for brand-name products.
The Information charged also that Petitioner billed for drugs which had not been prescribed by a doctor
and were never supplied to patients. I.G. Ex. 3.

4. Petitioner entered into a plea agreement with the prosecution whereby he would plead guilty to one
count of Medicaid Fraud in violation of 42 U.S.C. 1396(h)(a)(1), which allegedly occurred on or about
September 29, 1987 and involved the filing of a false Medicaid claim for reimbursement for drugs
purportedly furnished to a Medicaid recipient. I.G. Exs. 1, 3.

5. The agreement further provided that a recommendation would be made that Petitioner receive a three-
year suspended sentence, that he be placed on probation for three years, that he pay a $50,000 fine, and that
he pay restitution to Medicaid ($3,000) and to Blue Cross ($28,516.95). The prosecution agreed not to
bring further charges, and not to oppose Petitioner's request for probation. I.G. Ex. 1.

6. On September 20, 1991, the court accepted Petitioner's guilty plea, convicted him of Medicaid Fraud,
and imposed the penalties suggested in the plea agreement. I.G. Ex. 2.

7. The single count to which Petitioner pled guilty stated that he had knowingly misrepresented material
facts when applying for Medicaid reimbursement for pharmacy services. Specifically, the count charged
that he billed for providing the drug Hydergine to a Medicaid recipient, even though such drug was neither
prescribed by her physician nor ever supplied to her. I.G. Ex. 3.

8. Petitioner was convicted of a criminal offense related to the delivery of an item or service under the
Medicaid program. Findings 6 - 7.

9. The Secretary of HHS has delegated to the I.G. the authority to determine and impose exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21,662 (1983).

10. Mandatory exclusion pursuant to section 1128(a)(1) of the Act is warranted where a program-related
conviction has occurred.

11. I am not authorized to consider allegations by Petitioner which are no more than attacks on his guilty
plea and conviction by the court.

12. Since Petitioner's underlying criminal conviction occurred after August 18, 1987, the mandatory
exclusion provisions are applicable in his case.

13. I am not authorized to consider the alleged failings of Petitioner's counsel in the criminal case as a basis
for overturning Petitioner's exclusion.


PETITIONER'S ARGUMENT

Petitioner admits he was convicted, but contends:

1. He did not understand the charge to which he was pleading.

2. His attorney did not explain the ramifications of a conviction for Medicaid Fraud.

3. The person in whose name Petitioner purportedly filed a fraudulent claim was not a Medicaid
recipient at all -- her drugs were paid for by Blue Cross.

4. The person's status is substantiated by relevant documents. P. Ex. 1 shows that her prescription
for Hydergine bore the typed initials "BSK" (meaning Blue Cross/Blue Shield of Kentucky). P. Ex. 2
indicates that Petitioner's pharmacy claimed reimbursement from Blue Cross for this drug. P. Ex. 3 shows
that Blue Cross paid $46.14 for it.

5. Consequently, his conviction was not proven to be related to the delivery of items or services
under Medicaid.

6. He should not be subject to exclusion for things done prior to the enactment of the mandatory
exclusion sections of the Act in 1987 [Petitioner's alleged course of conduct dated back to 1985 -- see
Finding 2].


DISCUSSION

The first statutory requirement for mandatory exclusion pursuant to section 1128(a)(1) of the Act is that the
individual subject to such action must have been convicted of a criminal offense under federal or State law.
Section 1128(i)(3) of the Act expressly provides that when a person enters a guilty plea to a criminal
charge and the court accepts such plea, the individual will be regarded as having been "convicted" within
the meaning of the mandatory exclusion provisions of the Act. In the case at hand, Petitioner admits that
he entered a plea of guilty to one count of Medicaid Fraud and that the United States District Court for the
Southern District of Indiana accepted his guilty plea. Petitioner's May 10, 1993 response brief at 1 - 2.
Petitioner's admissions are supported by the evidence adduced by the I.G. and I find that Petitioner was
convicted of a criminal offense within the meaning of section 1128(i)(3) of the Act. Findings 2 - 6.

Next, it is required by section 1128(a)(1) that the criminal offense in question be related to the delivery of
an item or service under Medicaid or Medicare.

Petitioner does not dispute that he pled guilty to a one count Information which charged him with Medicaid
Fraud. Specifically, the Information to which Petitioner pled guilty charged that on September 27, 1987
Petitioner:

knowingly and willfully made and caused to be made a false statement and representation of a material
fact in application for benefit and payment of medicaid funds for pharmacy services provided to a medicaid
recipient, to wit: that [Petitioner] dispensed the drug, Hydergine, to Florence Conner when he knew that
such a drug was neither prescribed by her physician nor was the drug ever dispensed to her.

I.G. Ex. 3.

There is a well-established nexus between fraudulent billing of the Medicaid program and the delivery of
goods or services under Medicaid and Medicare which justifies mandatory exclusion. Departmental
Appeals Board (DAB) case law has long held that filing false Medicare or Medicaid claims constitutes
clear program-related misconduct, sufficient to mandate exclusion. Jack W. Greene, DAB CR19 (1989),
aff'd DAB 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). I
find that the offense which Petitioner was charged and convicted of in the present case -- willfully billing
Medicaid for pharmacy services that were not authorized and not provided to the patient -- similarly
constitutes criminal fraud related to the delivery of Medicaid services.

Petitioner contends that he admittedly pled guilty to submitting a wrongful claim, but that it had not been
shown by the I.G. that the false claim which formed the basis of his conviction related to Medicaid.
Petitioner argues that the offense of which he was convicted was not related to the delivery of an item or
service under the Medicaid program because the patient named in the Information was not, in fact, a
Medicaid recipient. Petitioner's May 10, 1993 response brief at 2 - 4. Petitioner submits various
documents in an attempt to prove that the Information incorrectly alleged that Ms. Conner was a Medicaid
recipient. Petitioner contends that these documents establish that he did not actually commit the offense
Medicaid Fraud.

I accept Petitioner's assertions of fact as true for purposes of deciding the I.G.'s motion for summary
disposition. However, they are not relevant to the issue of whether the I.G. was required to impose and
direct an exclusion against Petitioner. The mandatory exclusion which the I.G. imposed and directed
against Petitioner resulted from Petitioner's conviction of a criminal offense within the meaning of section
1128(a)(1). The conviction, and not the underlying conduct, is the triggering event which mandates the
imposition of the exclusion.

In this case, Petitioner pled guilty to a one count Information which charged him with filing a false
Medicaid claim. He was convicted of Medicaid Fraud. It is a settled rule that, in mandatory exclusion
cases brought pursuant to section 1128(a)(1) of the Act, exclusion is warranted by the mere fact that a
program-related conviction has occurred. I am not authorized to look behind a conviction when
adjudicating an exclusion appeal of this nature and will not permit a party to use this proceeding to
collaterally attack his prior conviction. Peter J. Edmonson, DAB 1330 (1992). In circumstances where the
court documents on their face describe an offense related to Medicaid, I do not look to the facts underlying
the conviction. Accordingly, it is irrelevant to these proceedings that Petitioner now asserts that the offense
of which he was convicted did not involve a Medicaid claim. If Petitioner desires to challenge the
sufficiency of the facts which were used to support the conviction, this is not the proper forum.

As to Petitioner's other principal argument -- that the conduct being penalized pre-dated the enactment of
the mandatory exclusion law -- the fact that there was a change in the statute is not fatal to the I.G.'s case.
The plain language of the law mandates a five-year minimum exclusion in all cases where the statutory
requirement of a program-related criminal conviction is met and such underlying criminal conviction
occurred after August 18, 1987. Medicare and Medicaid Patient and Program Protection Act of 1987, Pub.
L. No. 100-93, 15(b), 101 Stat. 680 (1987). See Francis Shaenboen, R.Ph., DAB 1249, at 5, 6 (1991).
Since Petitioner's criminal conviction occurred considerably after this date, the mandatory exclusion
provisions are applicable in his case. In any event, while the Information alleged that Petitioner submitted
hundreds of false and fraudulent claims from 1985 to 1988, the specific count to which Petitioner pled
guilty occurred on September 29, 1987, after the mandatory exclusion provision became effective on
August 18, 1987.

Finally, the alleged failings of Petitioner's lawyer in the criminal case do not lessen Petitioner's
responsibility in the present action. Petitioner argues that he should not be subject to an exclusion under
section 1128(a)(1) because his attorney in the criminal proceeding did not inform him that he would be
excluded from the Medicare and Medicaid programs as a result of his conviction. Petitioner stated that he
"would never have pled guilty to a crime if I had known that such a plea would basically strip me of all
ability to earn a living." Petitioner's May 10, 1993 response brief at 4.

This argument is essentially the same as an argument made by a petitioner in the case Douglas Schram,
R.Ph., DAB CR215 (1992), aff'd DAB 1372 (1992). In that case, the petitioner argued that his due process
rights were violated because he was deprived of the notice necessary to understand the possible
consequences of his guilty plea. The petitioner asserted that, had he known of the consequences of his
plea, he would have pled differently. I rejected this argument. In rejecting this argument, I cited U.S. v.
Suter, 755 F.2d 523, 525 (7th Cir. 1985) for the proposition that a defendant in a criminal proceeding does
not have to be advised of all the possible consequences, such as temporarily being barred from government
reimbursement for his professional services, which may flow from his plea of guilty. DAB CR215, at 6.
An appellate panel of the DAB affirmed my decision, finding that I "correctly held that, as a defendant,
Petitioner did not have to be advised of all the possible consequences of his plea." DAB 1372, at 11. The
DAB has held in other cases that arguments about the process leading to Petitioner's criminal conviction
are completely irrelevant to an exclusion proceeding. Charles W. Wheeler, DAB 1123 (1990).


CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act require that Petitioner be excluded from the Medicare
and Medicaid programs for a period of at least five years because of his conviction of a program-related
criminal offense. Neither the I.G. nor the judge is authorized to reduce the five-year minimum mandatory
period of exclusion. Jack W. Greene, DAB CR19 at 12 - 14 (1989).

The I.G.'s five-year exclusion is, therefore, upheld.


____________________________
Joseph K. Riotto
Administrative Law Judge


1. The I.G.'s December 10, 1992 letter alleged that Petitioner had been convicted of a criminal offense
related to the delivery of an item or service under Medicare. However, during the March 1, 1993
prehearing conference, the I.G.'s counsel clarified that the I.G. intended to allege that Petitioner had been
convicted of a criminal offense related to the delivery of an item or service under Medicaid.

2. The I.G. submitted four exhibits with the motion for summary disposition. I have marked these
exhibits as I.G. Exs. 1 through 4. Petitioner submitted four exhibits with his May 10, 1993 response. I
have marked these exhibits as P. Exs. 1 through 4. The I.G. did not submit any exhibits with the I.G.'s
reply. Petitioner submitted one exhibit with his surreply. While Petitioner referred to this exhibit as P. Ex.
1, I am marking it as P. Ex. 5. Petitioner has not contested the authenticity of the four exhibits submitted
by the I.G. I admit into evidence I.G. Exs. 1 through 3. I reject I.G. Ex. 4 because it is the I.G.'s Notice
letter and it is already in the record. In my prehearing order, I directed the parties not to file such
duplicative material. The I.G. has not contested the authenticity of the five exhibits submitted by
Petitioner, and I admit into evidence P. Exs. 1 through 5.