$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Jacqueline A. Cordle-Boggs, Petitioner,
- v. -
The Inspector General.
DATE: April 19, 1994
Docket No. C-94-008
Decision No. CR311
DECISION
By letter dated September 22, 1993, Jacqueline A. Cordle-Boggs, 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, Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for Social Services
programs. 1/ The I.G.'s rationale was that exclusion, for at least
five years, was mandated by sections 1128(a)(1) and 1128(c)(3)(B)
of the Social Security Act (Act) because Petitioner had been
convicted of a criminal offense related to the delivery of an item
or service under Medicare.
Petitioner filed a timely request for review of the I.G.'s action.
The I.G. moved for summary disposition.
Because I have determined that there are no facts of significance
genuinely in dispute, and that the only matters to be decided are
the legal implications of the undisputed facts, I have 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 the Medicare or
Medicaid programs 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
president of Ancor Med Serv, Inc., an Ohio corporation, whose
principal business was supplying medical equipment to nursing
homes. I.G. Ex. 1. 2/
2. Upon receiving complaints alleging unlawful billing practices
by Petitioner through Ancor Med Serv, the I.G. conducted an
investigation which revealed that, in or about 1986, Petitioner
began supplying nursing homes with catheter irrigation kits to be
used as nutritional devices for administering fluids to patients
who could swallow but could not drink normally. I.G. Ex. 1; P. Ex.
14.
3. A catheter irrigation kit is reimbursable under Medicare when
it is used for urological purposes. I.G. Ex. 1 at 4-6; P. Ex. 14.
4. A catheter irrigation kit is not reimbursable under Medicare
when it is used for dietary purposes, i.e. feeding. I.G. Ex. 1 at
5-6; P. Ex. 14.
5. On August 20, 1991, Petitioner was indicted on 68 counts of
mail fraud. The indictment alleged that the basis of the counts
against Petitioner was her submission of false and fraudulent
Medicare claims for reimbursement, in which she billed for catheter
irrigation kits purportedly used for urological purposes when, in
fact, Petitioner knew that the kits had been provided for dietary
purposes. Petitioner received more than $12,000 in Medicare
reimbursement. I.G. Ex. 1; FFCL 2-4.
6. Petitioner acknowledges that, on September 21, 1992, in the
United States District Court, Southern District of Ohio, pursuant
to a plea agreement, she entered a guilty plea to count 2 of the
indictment, mail fraud in violation of 18 U.S.C. 1341 and 2.
I.G. Exs. 2, 3; P. Exs. 1, 15; letter from Petitioner's attorney
dated October 4, 1993.
7. On February 3, 1993, the court accepted Petitioner's guilty
plea and entered a judgment of conviction for mail fraud in
violation of 18 U.S.C. 1341 and 2. I.G. Ex. 3; letter from
Petitioner's attorney dated October 4, 1993.
8. Petitioner was sentenced to the following: 1) 24-month term of
imprisonment, all but three months suspended; 2) five-year
probation; and 3) special assessment, and restitution of
approximately $104,000. I.G. Ex. 3.
9. The judgment of conviction entered by the court on February 3,
1993, constitutes a "conviction" of Petitioner, within the meaning
of section 1128(i)(1) of the Act. FFCL 7.
10. The judgment of conviction entered by the court against
Petitioner on February 3, 1993, states that the court made a
finding of guilt against Petitioner as to count 2 of the
indictment. FFCL 7; I.G. Ex. 3.
11. The court's finding of guilt against Petitioner constitutes a
"conviction" of Petitioner within the meaning of section 1128(i)(2)
of the Act. FFCL 10.
12. Petitioner's guilty plea, and the actions taken by the court
indicating acceptance of her plea, constitute a "conviction" of
Petitioner within the meaning of section 1128(i)(3) of the Act.
FFCL 6-8.
13. For a conviction to subject an individual or entity to
exclusion under section 1128(a)(1) of the Act, there must be some
nexus or common sense connection between the criminal offense for
which the individual or entity has been convicted and the delivery
of an item or service under the Medicare or Medicaid programs.
Berton Siegel, D.O., DAB 1467, at 5 (1994).
14. There exists a nexus or common sense connection between the
criminal offense for which Petitioner was convicted and the
delivery of an item or service under Medicare. FFCL 2-5.
15. The criminal offense which provided the basis for Petitioner's
conviction constitutes a criminal offense related to the delivery
of an item or service under Medicare, within the meaning of section
1128(a)(1). FFCL 14.
16. The statutory requirements for mandatory exclusion pursuant to
section 1128(a)(1) of the Act -- that the individual or entity in
question have been convicted of a criminal offense under federal or
State law, and that such offense be related to the delivery of an
item or service under Medicare or Medicaid -- have been satisfied
by Petitioner's conviction, which involved defrauding the Medicare
program. FFCL 5-15.
17. The Act requires an exclusion of not less than five
years if an individual or entity is convicted of a criminal offense
related to the delivery of an item or service under Medicare. Act,
sections 1128(a)(1), 1128(c)(3)(B).
18. Under section 1128(a)(1) of the Act, the fact that a
conviction within the meaning of section 1128(i) has occurred
mandates exclusion. The Secretary of HHS (Secretary) is not
permitted to look behind the conviction.
19. Neither the I.G. nor an administrative law judge is authorized
to reduce the length of a mandatory minimum five-year period of
exclusion. Act, sections 1128(a)(1), 1128(c)(3)(B).
20. The I.G. acted properly in excluding and directing the
exclusion of Petitioner from participation in the Medicare and
Medicaid programs for the minimum period of five years. Act,
sections 1128(a)(1), 1128(c)(3)(B).
PETITIONER'S ARGUMENT
Petitioner acknowledges that she was convicted of a felony. FFCL
6. She contends, however, that she entered a guilty plea when
charged with this offense only because she did not want to risk a
trial, not because she knowingly violated the law. Letter from
Petitioner's attorney, dated October 4, 1993; P. Ex. 1; P. Br. at
2-3.
Further, Petitioner asserts that the I.G. should have considered
mitigating factors which she alleged existed in her case in
directing and imposing her exclusion. Letter from Petitioner's
attorney, dated October 4, 1993; P. Br. at 6-8.
Petitioner asserts also that the criminal offense she acknowledges
committing -- mail fraud -- falls within the scope of section
1128(b)(1) of the Act, and, thus, she should be subject to a
permissive exclusion, not a mandatory exclusion. P. Br. at 4-8.
Finally, Petitioner asserts that the billing practices which led to
her criminal conviction for fraud were approved in advance by an
official of the Medicare carrier which handled her claims,
Nationwide Mutual Insurance Co. P. Exs. 1, 15; P. Br. at 2.
Petitioner argues that, since she followed this individual's
advice, she was legally blameless. Id.
DISCUSSION
The first statutory requirement for mandatory exclusion pursuant to
section 1128(a)(1) of the Act is that the individual or entity in
question have been convicted of a criminal offense under federal or
State law. In the present case, I find that Petitioner was
"convicted" of a criminal offense within the meaning of sections
1128(i)(1), (2), and (3) of the Act. 3/ The court, on February 3,
1993, entered a judgment of conviction against Petitioner. FFCL 7.
Such judgment falls within the definition of "conviction" found at
section 1128(i)(1) of the Act. FFCL 9. Additionally, the judgment
of conviction entered against Petitioner states that the court made
a finding of guilt against Petitioner as to count 2 of the
indictment. FFCL 10. Thus, the court's finding of guilt against
Petitioner also constitutes a "conviction" within the meaning of
section 1128(i)(2) of the Act. FFCL 11. Further, it is undisputed
that Petitioner pled guilty to a crime and that the court accepted
her guilty plea. FFCL 6-8. These events constitute a "conviction"
within the meaning of section 1128(i)(3) of the Act. FFCL 12.
I find also that the second requirement for mandatory exclusion
pursuant to section 1128(a)(1) -- that the criminal offense leading
to the conviction be related to the delivery of an item or service
under Medicare or Medicaid -- has been satisfied here.
For a conviction to subject an individual or entity to exclusion
under section 1128(a)(1) of the Act, there must be some nexus or
common sense connection between the criminal offense for which the
individual or entity has been convicted and the delivery of an item
or service under the Medicare or Medicaid programs. FFCL 13.
Here, Petitioner was convicted of the criminal offense of mail
fraud.
Petitioner's mail fraud arose from her submission of false and
fraudulent Medicare claims for reimbursement, in which she billed
for catheter irrigation kits purportedly used for urological
purposes when, in fact, Petitioner knew that the kits had been
provided for dietary purposes. 4/ FFCL 2-5. Moreover, the bills
and supporting documentation submitted to Medicare by Petitioner
were fraudulent in that they had been prepared or altered to
include the false diagnosis of "Permanent Urinary Incontinence."
I.G. Ex. 1. Petitioner received more than $12,000 in Medicare
reimbursement. FFCL 5. The fact that Petitioner's offense was
formally characterized as "mail fraud" is irrelevant; the purpose
and result of Petitioner's actions was to defraud the Medicare
program.
Thus, there exists a direct connection between the criminal offense
for which Petitioner was convicted and the Medicare program.
Moreover, because Petitioner's fraudulent claims for Medicare
reimbursement related to the furnishing of catheter irrigation kits
to Medicare patients for a nonreimbursable purpose (feeding), I
find that there exists a nexus or common sense connection between
the criminal offense for which Petitioner was convicted and the
delivery of an item or service under Medicare. FFCL 14. It is
well-established that financial misconduct directed at the Medicare
and Medicaid programs, connected with the delivery of items or
services under a covered program, constitutes a program-related
offense invoking mandatory exclusion. Siegel, DAB 1467, at 5. In
particular, filing fraudulent Medicare or Medicaid claims has been
held to constitute program-related misconduct. 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). Thus, I find
that the criminal offense which provided the basis for Petitioner's
conviction constitutes a criminal offense related to the delivery
of an item or service under Medicare, within the meaning of section
1128(a)(1). FFCL 15.
Once it is shown that an appropriate program-related criminal
conviction has occurred, exclusion is mandatory under section
1128(a) as a purely derivative action.
The Secretary is not permitted to look behind the conviction. FFCL
18; Peter J. Edmonson, DAB CR163 (1991), aff'd, DAB 1330 (1992).
The intent of the individual committing the offense is not
relevant under section 1128(a). DeWayne Franzen, DAB CR58 (1989),
aff'd DAB 1165 (1990). Further, assertions by a petitioner that he
or she actually is innocent, that his or her trial was unfair, or
that the mandatory exclusion specified in section 1128(a) should be
modified because of mitigating circumstances cannot be addressed in
this forum. Edmonson, DAB 1330, at 4-5; Janet Wallace, L.P.N., DAB
CR155 (1991), aff'd, DAB 1326 (1992); Richard G. Philips, D.P.M.,
DAB CR133 (1991), aff'd, DAB 1279 (1991). Thus, in the case at
hand, Petitioner's assertion that her billing practices had been
approved by the Medicare carrier is irrelevant.
As to the use of permissive versus mandatory exclusion, it is
well-established that mandatory exclusion will be initiated by
convictions for program-related financial misconduct (including
filing fraudulent claims for Medicare reimbursement, as occurred in
the case at hand). Also, a mandatory exclusion under section
1128(a) of the Act is required where applicable to an offense, even
if the permissive exclusion provisions at section 1128(b) of the
Act could also be read to apply. Thus, it was entirely appropriate
for the I.G. to proceed under section 1128(a)(1) of the Act in the
present matter. David D. DeFries, D.C., DAB CR156 (1991), aff'd,
DAB 1317 (1992) (and cases cited therein).
CONCLUSION
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that the
Petitioner herein be excluded from the Medicare and Medicaid
programs for a period of at least five years. FFCL 17. Neither
the I.G. nor an administrative law judge is authorized to reduce
the five-year mandatory minimum exclusion. Greene, DAB CR19, at
12-14; Stanley H. Guberman, D.C., DAB CR111, at 9 (1990) (citing
Samuel W. Chang, M.D., DAB 1198 (1990)); FFCL 19.
Petitioner's five-year exclusion is, therefore, sustained.
__________________________
Joseph K. Riotto
Administrative Law Judge
1. In this decision, I refer to all programs from which
Petitioner has been excluded, other than Medicare, as "Medicaid."
2. The parties' briefs and my findings of fact and conclusions
of law will be cited as follows:
I.G.'s Brief in Support of the I.G. Br. (at page)
I.G.'s Motion for Summary
Disposition
Petitioner's Brief P. Br. (at page)
I.G.'s Reply Brief I.G. R. Br. (at page)
My Findings of Fact FFCL (number)
and Conclusions of Law
The I.G. submitted four exhibits. I admit I.G. exhibits 1-4 into
evidence. I cite the I.G.'s exhibits as "I.G. Ex(s). (number) (at
page)." Petitioner submitted 14 exhibits, identifying them by
letters A through N. Because Petitioner did not identify her
exhibits by whole numbers, as required in my November 23, 1993
Order and Schedule for Filing Briefs and Documentary Evidence, I
have marked her exhibits with whole numbers. I cite Petitioner's
exhibits as "P. Ex(s). (number) (at page)." P. Ex. A is now marked
as P. Ex. 1, P. Ex. B is now marked as P. Ex. 2, and so on. I
admit Petitioner's Exs. 1-14 into evidence.
I also note that, with her request for hearing, Petitioner
submitted affidavits from herself and from an individual named
Duena R. Ames. I have marked Petitioner's affidavit as P. Ex. 15.
I have marked Duena Ames' affidavit as P. Ex. 16. I admit P. Exs.
15 and 16 into evidence.
3.
For a Petitioner to be "convicted" of a criminal offense within
the meaning of section 1128(i) of the Act, it is only necessary to
find that one of the four subsections of section 1128(i) has been
satisfied. Here, however, I found that Petitioner's conviction
fell within three subsections of section 1128(i).
4. The judgment of conviction entered against Petitioner stated
that counts 1 and 3-68 were dismissed. I.G. Ex. 3. I note,
however, that count 2 of the indictment, the count for which
Petitioner was convicted, stated that it "incorporates by reference
each and every allegation of Paragraphs 1 through 24 of Count 1 of
the Indictment." I.G. Ex. 1 at 8. Thus, I find that Petitioner,
by her guilty plea to count 2, has admitted the factual background
upon which her conviction was based, which background was related
in paragraphs 1-23 of Count 1.