DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of: Lectoy T. Johnson, M.D. Petitioner,
- v. -
The Inspector General.
DATE: June 26, 1989
Docket No. C-69
DECISION AND ORDER
The Petitioner requested a hearing to contest the Inspector General's (I.G.'s)
determination to exclude him
from participation in Medicare and State health care programs (e.g., Medicaid),
for a period of five years.
This Decision and Order resolves this case on the basis of written briefs and
a stipulated record. I hereby
deny the Petitioner's motion for summary disposition and I conclude that the
I.G. was required under
federal law to exclude the Petitioner for five years from Medicare and Medicaid.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
This case is governed by section 1128 of the Social Security Act (Act), codified
at 42 U.S.C. 1320a-7
(West U.S.C.A. Supp., 1988). Section 1128(a) of the Act, headed "MANDATORY
EXCLUSION,"
provides in subsection (1) for the exclusion from Medicare, and a directive
to the State to exclude from
State health care program, any individual who is "convicted of a criminal
offense related to the delivery of
an item or service" under the Medicare or Medicaid programs. Section 1128
(c)(3)(B) provides that the
period of exclusion from Medicare and Medicaid, for conviction of a criminal
offense related to the
delivery of an item or service, shall be for a minimum period of five years.
The term "convicted" is defined in section 1128(i) to include, when
a plea of guilty or nolo contendere has
been "accepted by a Federal, State, or local court" (section (i)(3))
and when under a "first offender or other
program" a "judgment of conviction has been withheld" (section
(i)(4)).
II. The Federal Regulations.
The governing federal regulations (Regulations) are found in 42 C.F.R. Parts
498, 1001, and 1002 (1987).
Part 498 governs the procedural aspects of this exclusion case and Parts 1001
and 1002 govern the
substantive aspects.
In accordance with section 498.5(i), a practitioner, provider, or supplier
who has been excluded from
program coverage is "entitled to a hearing before an ALJ (Administrative
Law Judge)." Pursuant to section
1001.128, an individual who has been excluded from participation has a right
to request a hearing before
an ALJ on the issues of whether: (1) he or she was, in fact, convicted; (2)
the conviction was related to the
delivery of an item or service under Medicare or Medicaid; and (3) the length
of the exclusion is
reasonable.
Section 1001.123(a) requires the I.G. to send written notice of his determination
to exclude an individual or
entity from participation in Medicare when he has "conclusive information
that the individual or entity has
been convicted of a crime related to the delivery of an item or service under
Medicare or Medicaid.
III. Texas Code of Criminal Procedure.
The Texas Code of Criminal Procedure states that the trial court, after 1)
receiving a plea of guilty or a plea
of nolo contendere, 2) hearing the evidence, and 3) finding that the evidence
substantiates a defendant's
guilt, may defer further proceedings without entering an adjudication of guilt,
and place the defendant on
probation. Article 42.12, Section 3(d). Upon expiration of the defendant's term
of probation, if the court
has not proceeded to adjudication of guilt, it "shall dismiss the proceedings
against the defendant and
discharge him." Id. at 3(c). Cf Section 7. Section 3(c) also states:
A dismissal and discharge under this section may not be deemed a conviction
for the
purposes of disqualifications or disabilities imposed by law for conviction
of an offense, except that upon
conviction of a subsequent offense, the fact that the defendant had previously
received probation shall be
admissible before the court or jury to be considered on the issue of penalty.
BACKGROUND
By letter October 14, 1988 (Notice), the I.G. notified the Petitioner that,
as a result of his conviction of a
criminal offense related to the delivery of an item or service under Medicaid,
he would be excluded from
participation in Medicare and Medicaid for a mandatory five year period, commencing
20 days from the
date of the Notice. The I.G.'s stated basis for the exclusion was the Petitioner's
conviction in state court in
Harris County, Texas, of a criminal offense related to the delivery of an item
or service under Medicaid.
On August 28, 1988, the Petitioner timely requested a hearing on the I.G.'s
determination. I held a
prehearing telephone conference call on January 17, 1989, at which I determined
that the issues raised by
the Petitioner's hearing request were legal issues, which could be further developed
by the parties in written
briefing and that there was no dispute as to any material fact. As reflected
in the January 23, 1989
Prehearing Order and Schedule for Filing Motions for Summary Disposition, I
scheduled a subsequent
conference call for April 5, 1989 (after the conclusion of the briefing process).
The purpose of the
subsequent call was to determine whether to schedule oral argument, an evidentiary
hearing, or to proceed
to decision based on the written record. During the April 5, 1989 call, I asked
the Petitioner to file a short
reply brief addressing why the decision in the case of Carlos Z. Zamora, M.D.,
v. The Inspector General,
Civil Remedies Docket No. C-74, decided March 30, 1989 (pending on appeal under
Docket No. 89-100)
should not control this case. I also gave either party until May 10, 1989 to
request oral argument. Neither
party requested oral argument.
EVIDENCE
The material facts in this case are stipulated to and evidenced by exhibits
concerning the Petitioner's plea of
nolo contendere, such as the probation order and deferment of adjudication of
guilt (I.G. Ex 1). See also
Tape (containing the stipulation by the parties as to the authenticity of all
exhibits). The Petitioner
acknowledges that he pleaded nolo contendere in State court to nine counts of
securing execution of a
document by deception, specifically submitting a false Medicaid claim to obtain
a payment in the form of a
check.
ISSUES
The sole issue presented in this case is whether the Petitioner was "convicted"
of a criminal offense within
the meaning of sections 1128(a)(1) and (i) of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and submissions of the parties,
and being fully advised
herein, I make the following Findings of Fact and Conclusions of Law:
1. The Petitioner is an anesthesiologist and has been enrolled as a physician
participating in the Medicaid
program since August 15, 1985. 2/15 Stip 1,2; 3/17 Stip 1,2.
2. On August 20, 1987, the Petitioner was indicted in the 174th District Court
of Harris County, Texas of
nine counts of securing execution of a document by deception, TEXAS PENAL CODE
ANN. Section
32.46; specifically, submitting a false Medicaid claim to obtain payment in
the form of a check. 2/15 Stip
3; 3/17 Stip 3.
3. On March 28, 1989, the Petitioner pleaded nolo contendere to the above criminal
offense and the court
deferred adjudication of his guilt and placed him on probation for one year.
2/15 Stip 4; 3/17 Stip 4; I.G.
Ex 1.
4. The conditions of probation were controlled by the Texas Code of Criminal
Procedure, Article 42.12,
Section 3d. Tape; I.G. Ex 1 See also, Texas Code Crim. Pro. Art. 42.12, Section
7.
5. The Petitioner was "convicted" of a criminal offense "related
to the delivery of an item or service" under
Medicaid, within the meaning of sections 1128(a)(1) and 1128(i) of the Act,
notwithstanding the provisions
of Art. 42.12 of the Texas Code of Criminal Procedure, or the terms of any Orders
which may be, or may
have been, entered in Texas State courts pursuant to that code section.
6. In accordance with section 1128 of the Act, the Petitioner was properly excluded
from participation in
Medicare and Medicaid for a period of five years.
7. The material and relevant facts in this case are not contested.
8. There is no need for an evidentiary hearing in this case.
9. The I.G. is entitled to summary disposition in this proceeding.
DISCUSSION
I. The Petitioner was convicted of a Criminal Offense As A Matter of Federal Law.
The Petitioner argued that he received deferred adjudication before deferred
adjudication was considered to
be a conviction under applicable federal law. The Petitioner argued that the
definition of "conviction" at
the time of his indictment on August 20, 1987 and his deferred adjudication
on March 28, 1988 was
conviction as follows:
(i) Convicted defined
For purposes of subsections (a) and (b) of this section, a physician or other
individual is
considered to have been "convicted" of a criminal offense--
(1) when a judgment of conviction has been entered against the physician or
individual by a Federal, State, or local court, regardless of whether the judgment
of conviction of other
record relating to criminal conduct has been expunged;
(2) when there has been a finding of guilt against the physician or individual
by
a Federal, State, or local court;
(3) when a plea of guilty or nolo contendere by the physician or individual
has
been accepted by a Federal, State, or local court; or;
(4) when the physician or individual has entered into participation in a first
offender or other programs where judgment of conviction has been withheld. [Emphasis
Added.]
P Br 3
The Petitioner argued that the definition of "conviction" in section
1128 (i)(4) of the Act as underlined
above was not amended to include deferred adjudication until the July 1988 amendment,
some three
months after the Petitioner was sentenced. See Pub. L. 100-360, Section 411,
July 1, 1988. The Petitioner
argued further that deferred adjudication was not contemplated by Congress in
defining "conviction" prior
to that time, and that the July amendment cannot be applied retroactively.
P Br 4, 5.
The I.G. argued that it was not applying the July 1988 amendment retroactively,
but rather that deferred
adjudication was contemplated under the definition effective at the time of
the Petitioner's plea. I.G. Rep
Br 1, 2. The I.G. argued that the addition of the term "deferred adjudication"
to subsection (i)(4) was
merely a "technical amendment." I.G. Rep Br 2, 3.
I find and conclude that the Petitioner was "convicted" within the
meaning of sections 1128(a)(1) and (i)(3)
of the Act because he pleaded nolo contendere to the charges against him and
the State Criminal Court
"accepted" his plea. Section 1128(i)(3) provides that "convicted"
includes a plea of nolo contendere
"accepted by a Federal, State, or local court." See Arthur B. Stone,
D.P.M. v. The Inspector General, Civil
Remedies Docket No. C-52, decided May 5, 1989.
As I said in Stone, the term "accepted" in section 1128(i)(3) is
defined by Webster's Third New
International Dictionary, 1976 Unabridged Edition, as the past tense of "to
receive with consent," and is the
opposite of the term rejected. The State Criminal Court did not reject the Petitioner's
plea. Quite the
contrary, the State Criminal Court "accepted" the Petitioner's plea
within the meaning of section 1128(i)(3).
Once that happened, the provisions of subsection 1128(i)(3) were triggered,
and what happened after that is
of no consequence to the determination that the Petitioner was "convicted,"
as a matter of federal law.
The circumstances of the Petitioner's case fall not only within the plain meaning
of subsection (i)(3), but
within the plain meaning of subsection (i)(4), as well. As of the date the Petitioner
entered his plea, the
latter subsection included within the definition of "conviction" the
situation in which "the physician or
individual has entered into participation in a first offender or other program
where judgment of conviction
has been withheld." The Order memorializing the Petitioner's plea is captioned
"Deferment of
Adjudication." I.G. Ex 1. Pursuant to Texas law, the Petitioner could move
the court to withdraw his plea
based on satisfactory completion of his sentence. On its face, the treatment
of the Petitioner's case by the
Texas court falls within the term "other program where judgment of conviction
has been withheld." See
Carlos Z. Zamora,M.D., v. The Inspector General, supra at p. 3 of this Decision
and Order.
The Zamora case, involved essentially the same law and facts as this case.
Dr. Zamora pleaded nolo
contendere in Texas State court to a criminal offense related to the delivery
of an item or service under
Medicaid and was placed on probation under the Texas Code of Criminal Procedure,
Article 42.12, Section
7, a later subsection of the same Article involved in this case 9 section 3d
and having essentially the same
effects as 3d. Dr. Zamora successfully completed his probation and his prosecution
was subsequently
dismissed in accordance with the terms of Section 7. Zamora Decision, pp. 5,6.
Dr. Zamora made essentially the same arguments as were presented by the Petitioner
in this case. Dr.
Zamora's case was somewhat stronger than the Petitioner's here, however, in
that Dr. Zamora had his
record "expunged" upon satisfactory completion of his probation, whereas
the Petitioner here did not argue
that he had completed probation or that his nolo contendere plea had been withdrawn.
The question before the court in Zamora was whether, under the same version
of section 1128(i) of the Act
as was in effect at the time of the nolo contendere plea in this case (see definition,
p. 6, herein), the nolo
contendere plea and subsequent treatment by the Texas court constituted a "conviction."
The
Administrative Law Judge hearing that case determined that it did, both under
subsections i(3) and i(4).
See Zamora Decision, pp. 7, 8.
During the April 5, 1989 telephone conference call, mentioned above, I informed
the Petitioner that the
Zamora decision appeared to control this case, and I gave the Petitioner the
opportunity to address its
applicability.
The Petitioner did not distinguish this case factually, nor did he contend
that there were any substantive
differences between subsections 7 and 3d. The Petitioner did make several broad
challenges to the
decision itself. First, the Petitioner argued that the holding in Zamora violated
the Tenth Amendment
proscription that powers not delegated to the United States by the Constitution
are reserved to the States.
Specifically, the Petitioner contended that it conflicted with the Tenth Amendment
to conclude that a state
court action which is defined as not being a conviction under state law was
by definition under federal law
a "conviction."The Petitioner argued that the Zamora holding also
conflicted with the judicial doctrine of
"comity" (courtesy between courts dealing with the same matter). Under
this doctrine, he asserted, the
federal government should "honor, respect, or accommodate" the previous
"`no conviction'" disposition of
the state court. P Add. Br 2, 3.
The Petitioner's reliance on these authorities is misplaced. My conclusion
that the Petitioner was
"convicted" is based on the principle that the interpretation of a
federal statute or regulation is a question of
federal, not state, law. Thus, to the extent that the definition of a "conviction"
in a federal statute is
different from state law, the state law definition would not be directly relevant
to this case. United States v.
Allegheny Co., 322 U.S. 174, 183 (1944); United States v. Anderson Co., Tenn.,
705 F.2d 184, 187 (6th
Cir., 1983), cert. denied, 464 U.S. 1017 (1984). The doctrine of comity does
not cannot override the
principle of the supremacy of federal law.
Finally, the Petitioner argued that application of the holding in Zamora conflicted
with the double jeopardy
and due process clauses of the Fifth Amendment. Specifically, the Petitioner
argued: (1) that the charges
against Dr. Zamora and himself were resolved without a conviction under State
law and then, for the same
actions, they were treated under federal law as if they were "convicted"
violating the prohibition against
double jeopardy; and (2) that the "perfunctory" action of declaring
that Dr. Zamora and he had been
"convicted" of a violation under state law, when no actual state conviction
had occurred, violated their
right to due process. P Add. Br 2, 3.
I am not persuaded by these arguments because, I conclude that the Section
(c) of Texas deferred
adjudication statute and the federal exclusion law do not conflict. In Zamora,
addressing a similarly
worded Section 7, l.c. the court stated:
the Petitioner's assertion that a conflict exists is premised on his argument
that the exclusions
mandated by 42 U.S.C. 1320a-7(a)(1) for persons convicted of program-related
offenses constitute
additional punishment to that imposed by state criminal laws. I disagree with
this analysis. It is evident
from the face of the federal statute, as well as the legislative history cited
above, that Congress' intent in
enacting the exclusion legislation was remedial and not punitive. A principal
objective of the law was to
protect the financial integrity of federally funded health care programs from
those who have proven
themselves to be untrustworthy. That excluded individuals might find themselves
to be financially
disadvantaged by their exclusions is an incidental effect. Because the intent
of Congress was not to
"punish," the exclusion remedy cannot be viewed as constituting an
additional punishment beyond that
contemplated by Texas law.
Zamora, supra, p. 9.
The Petitioner's double jeopardy/due process arguments are similarly premised
on the assertion that the
exclusion is an additional punishment. An Exclusion is not a punishment, but
a consequence of certain
court actions defined by the federal statute as a "conviction." The
Petitioner has not been subjected to
double jeopardy, not has he been denied due process, by application of the federal
definition.
II. A Minimum Mandatory Five Year Exclusion Was Required In This Case.
Section 1128(a)(1) of the Act clearly requires the I.G. to exclude individuals
and entities from the
Medicare program, and direct their exclusion from the Medicaid program, for
a minimum period of five
years, when such individuals and entities have been "convicted" of
a criminal offense "related to the
delivery of an item or service" under the Medicare or Medicaid programs
within the meaning of section
1128(a)(1) of the Act. Congressional intent on this matter is clear:
A minimum five-year exclusion is appropriate, given the seriousness of the
offenses at
issue. . . . Moreover, a mandatory five-year exclusion should provide a clear
and strong deterrent against
the commission of criminal acts.
S. Rep No. 109, 100th Cong., 1st Sess. 2, reprinted in 1987 U.S. Code Cong. and Ad. News 682, 686.
Since the Petitioner was "convicted" of a criminal offense and it
was "related to the delivery of an item or
service" under the Medicaid program within the meaning of section 1128(a)(1)
and (i) of the Act, the I.G.
was required to exclude the Petitioner for a minimum of five years.
CONCLUSION
Based on the law and undisputed material facts in the record of this case,
I conclude the I.G. properly
excluded the Petitioner from the Medicare program, an
directed his exclusion from State health care programs, for the minimum mandatory period of five years.
IT IS SO ORDERED.
__________________________
Charles E. Stratton
Administrative Law Judge