$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Bernard Harmon,
Petitioner,
- v. -
The Inspector General.
DATE: September 3, 1996
Docket No. C-95-158
Decision No. CR435
DECISION
I conclude that I have no authority to hear and decide Petitioner's July 3,
1995 request for a hearing.
Therefore, I dismiss Petitioner's request for a hearing.
I. Background
By letter dated December 13, 1993, Bernard Harmon, the Petitioner herein, was
notified by the Inspector
General (I.G.) of the U.S. Department of Health and Human Services (HHS), that
it had been decided to
exclude Petitioner for a period of five years from participation in Medicare
and Medicaid. The I.G.'s
rationale was that the exclusion is 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 Medicaid.
Petitioner, through counsel, filed a hearing request dated January 6, 1994,
and the case was assigned to me
as Docket Number C-94-051. By letter dated January 18, 1994, the I.G. imposed
and directed a five-year
exclusion against C.D. Hearing Laboratories, Inc. (Docket Number C-94-287),
which Petitioner apparently
owned at the time, pursuant to section 1128(b)(8) of the Act. I consolidated
the two cases in February
1994.
In February 1994, pursuant to my Order and Schedule for Filing Briefs and Documentary
Evidence dated
February 7, 1994, the I.G. filed a brief in support of a motion for summary
disposition accompanied by
I.G. Exhibits (I.G. Exs.) 1-9.
By letter dated April 4, 1994, Petitioner's counsel withdrew the hearing requests
as to Docket Nos. C-94-
051 and C-94-287. He stated that Petitioners (i.e., Bernard Harmon and C.D.
Hearing Laboratories, Inc.)
would not oppose the imposed exclusion and that the "non-opposition was
being made without prejudice"
since they were seeking a request for a waiver from the State of New York. On
April 13, 1994, based on
Petitioner's letter, I dismissed both cases. Order Dismissing Cases, dated April
13, 1994.
By letter dated July 3, 1995, Petitioner, acting pro se, requested a hearing
to contest his December 1993
five-year exclusion. This hearing request was assigned to me as Docket Number
C-95-158. Petitioner
contended in his letter that the withdrawal of his previous hearing request
was arranged by his attorney
without his knowledge or consent. Petitioner argued also that, although he had
pled guilty to the
underlying charge, there was no basis for the charge upon which his conviction
was based.
I issued an Order to Show Cause dated July 25, 1995, in which I gave Petitioner
a deadline by which to
respond and show to my satisfaction that he did not know or consent to his attorney's
withdrawal of the
previous hearing request and why, after all the time that has elapsed since
his exclusion and my dismissal,
he should have a hearing. The Order stated further that, if Petitioner did submit
a response, the I.G. would
have until October 5, 1995 to reply.
I received two letters in response to my Order to Show Cause: a letter dated
August 22, 1995 from
Petitioner and a letter dated August 16, 1995 from Mr. Finkelstein, the attorney
who had previously
represented Petitioner in the earlier actions (Docket Nos. C-94-051 and C-94-287).
In his letter, Petitioner
again requested a hearing to contest his December 1993 exclusion. Petitioner
contended that he did not
believe he had been properly represented by his criminal attorney. Petitioner
argued that he was innocent
of the charges against him and was unfairly convicted. He reiterated his contention
that he had not known
of or consented to the withdrawal of his earlier hearing request. Petitioner
briefly set forth his version of
the circumstances of his criminal case and alleged that he had never made any
improper charges to
Medicaid.
In his letter dated August 16, 1995, Mr. Finkelstein stated that Petitioner
had informed him of his new
request for a hearing. He alleged that Petitioner may not have fully understood
the withdrawal of the
earlier cases. He stated that requests for a waiver from New York State and
also an attempt to set aside
Petitioner's guilty plea based upon legal malpractice were unsuccessful. Mr.
Finkelstein contended further
that Petitioner claimed he was never informed of the consequences of pleading
guilty by his criminal
attorney and that, "had he known that he would be excluded for five years
he never would have pleaded
guilty to a program-related crime but would have gone to trial. . . ."
Mr. Finkelstein expressed his opinion
that Petitioner "was under the impression that he never, technically or
otherwise, consented to or
understood what took place in terms of my withdrawl [sic] of the previous hearing
request. Rather, he
believed that the matter was being held in abeyance pending the outcome of local
proceedings and that he
would be given an opportunity to oppose the exclusion at a later date if he
saw fit." Mr. Finkelstein
requested that Petitioner be given a hearing.
Because the I.G. was not initially aware that Petitioner had filed a submission
since Petitioner had not
served the I.G., the I.G. requested an extension of one month to submit a response.
I granted the I.G.'s
request.
The I.G. filed a Memorandum of Law seeking an order dismissing Petitioner's
request for a hearing. In its
Memorandum, the I.G. argued that Petitioner's request for a hearing should be
dismissed for untimeliness
and because it did not raise any issues which I have the authority to hear and
decide. The I.G. alleged that
Petitioner's July 3, 1995 hearing request was untimely since it was filed almost
seventeen months after
Petitioner received the I.G.'s December 13, 1993 exclusion notice. The I.G.
questioned the credibility of
Petitioner's contention that he did not know of or consent to his counsel's
withdrawal of his earlier hearing
request. The I.G. argued that Petitioner's counsel's correspondence shows that
Petitioner was informed of
his counsel's course of action and that in hindsight Petitioner may not have
fully understood the
significance of the withdrawal of his hearing request.
The I.G. contended further that Petitioner's request for a hearing is a collateral
attack upon his conviction,
which is prohibited under the regulations. The I.G. asserted that Petitioner
does not dispute that a basis for
his exclusion exists. Lastly, the I.G. argued that the relevant regulations
do not allow the reopening of
cases which have been dismissed.
I issued another Order to Show Cause dated April 18, 1996. I stated, inter
alia, that, based on the letters
from Petitioner and Mr. Finkelstein, it appeared that Petitioner admits that
he pled guilty to a program-
related crime. I stated further that, even without addressing the timeliness
issue, there appeared to be little
doubt that Petitioner's exclusion for five years is warranted under the regulations.
I gave Petitioner the
opportunity to address the issue of the validity of his exclusion, with a brief
and documentation in support
of his arguments. I stated that, if I did not receive anything from Petitioner
by the deadline given, I would
decide the case based on what was then in the record before me, which included
the I.G.'s brief, with
accompanying exhibits, which was filed on February 28, 1994, in support of its
motion for summary
disposition in the earlier consolidated action (Docket Nos. C-94-051 and C-94-287).
I stated further that
although I did not consider the I.G.'s brief in issuing the April 1994 dismissal
order, I would consider it in
this present action.
Lastly, in the Order to Show Cause, I informed Petitioner that, if he was seeking
also a hearing on the five-
year exclusion against C.D. Hearing Laboratories, Inc., he should state that
in his response and include any
pertinent arguments and documentation. 1/
Petitioner submitted three exhibits (P. Exs. 1-3), in response to the Order
to Show Cause. The I.G. has not
objected to the admission into evidence of the exhibits submitted by Petitioner.
In the absence of
objection, I admit into evidence P. Exs. 1-3.
I did not receive anything from the I.G. in response to Petitioner's submission.
Petitioner has not objected to the admission into evidence of the exhibits
submitted previously by the I.G.
in 1994. In the absence of objection, I admit into evidence I.G. Exs. 1-9.
I GRANT the I.G.'s motion to dismiss Petitioner's hearing request. I have no
authority to consider
Petitioner's arguments as they may relate to reopening, or to grant him a new
hearing in this case. For the
reasons stated below, Petitioner's 1995 request for a hearing is dismissed.
II. Issue
The issue is whether I have authority to hear and decide Petitioner's July
3, 1995 request to, in effect,
reopen his case and grant him a hearing.
III. Findings
1. By letter dated December 13, 1993, Petitioner was notified by the I.G. that
it had been decided to
exclude him for five years from participation in Medicare and Medicaid as a
result of his conviction of a
criminal offense related to the delivery of an item or service under Medicaid.
2. Petitioner, through counsel, filed a hearing request dated January 6, 1994,
and the case was assigned to
me as Docket Number C-94-051.
3. By letter dated January 18, 1994, the I.G. imposed and directed a five-year
exclusion against C.D.
Hearing Laboratories, Inc. (Docket Number C-94-287), which Petitioner apparently
owned at the time,
pursuant to section 1128(b)(8) of the Act. I consolidated the two cases in February
1994.
4. On April 13, 1994, based on Petitioner's letter dated April 4, 1994, I dismissed
both cases. Order
Dismissing Cases, dated April 13, 1994.
5. By letter dated July 3, 1995, Petitioner, acting pro se, requested a hearing
on the December 1993 five-
year exclusion. Petitioner's July 3, 1995 request is, in effect, a request to
reopen his case and grant him a
hearing.
6. The regulation at 42 C.F.R. 1005.20(d) provides that "Except as provided
in paragraph (e) of this
section, unless the initial decision is appealed to the DAB, it will be final
and binding on the parties 30
days after the ALJ serves the parties with a copy of the decision. If service
is by mail, the date of service
will be deemed to be 5 days from the date of mailing."
7. Inasmuch as a dismissal of a case is a disposition of the matter, albeit
not on the merits, I find that the
rationale of 42 C.F.R. 1005.20(d) applies to dismissals, as well as to decisions.
8. Under the rationale of 42 C.F.R. 1005.20(d), once an administrative law
judge issues a dismissal of a
case, that dismissal becomes final and binding on the parties 30 days after
the administrative law judge
serves the parties with a copy of the dismissal.
9. My dismissal became final and binding on May 18, 1994.
10. Petitioner made his July 3, 1995 request to reopen his case more than one
year after the date my
dismissal order became final.
11. I do not have authority to hear and decide the merits of Petitioner's July
3, 1995 request for a hearing
under the regulations contained in 42 C.F.R. Part 1005.
12. Given that my dismissal of Petitioner's case has become final, Petitioner
has no right to a hearing at
this time.
13. In the alternative, if I were to reopen Petitioner's case, I would conclude
that the I.G. was required to
exclude Petitioner for five years as a matter of law because 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.
IV. Discussion
The Part 1005 regulations contain no language relating specifically to reopening
or revising an
administrative law judge or an appellate panel decision, or a dismissal of a
case by an administrative law
judge. See 42 C.F.R. 1005.4, 1005.20, 1005.21. The regulations provide that,
unless appealed, an
administrative law judge decision will become final and binding on the parties
30 days from the date that
the administrative law judge serves the parties with a copy of the decision.
42 C.F.R. 1005.20(d). The
regulations provide additionally that a decision by an appellate panel will
become final and binding 60
days from the date that it serves the parties with a copy of its decision. 42
C.F.R. 1005.21(j).
A logical reading of 42 C.F.R. 1005.20(d) is that it permits the administrative
law judge to consider
reopening and revising a decision during the 30-day time period prior to the
decision becoming final and
binding, or during the dates between the date of service of a decision on the
parties and the date of appeal
of that decision. 2/ However, it is also logical to read the regulations as
precluding the administrative law
judge from reopening or revising a decision after that decision becomes final
and binding or after DAB
appellate review is sought. Keith O. Irby, DAB CR427 (1996).
I note that the regulations cited above specifically refer to decisions. 3/
Inasmuch as a dismissal of a case is
a disposition of the matter, albeit not on the merits, I find the regulations
cited above should be interpreted
to apply to dismissals as well. Thus, once an administrative law judge issues
a dismissal of a case, under
the rationale of 42 C.F.R. 1005.20(d), it would become final and binding on
the parties 30 days after the
ALJ serves the parties with a copy of the dismissal.
As stated above, Petitioner made his original hearing request in 1994. I dismissed
Petitioner's hearing
request (as well as that of his company) on April 13, 1994, pursuant to the
April 4, 1994 letter filed by his
counsel, Mr. Finkelstein.
By his letter dated July 3, 1995, Petitioner, now acting pro se, is, in effect,
seeking a reopening of his case
despite the fact that I dismissed the matter in April 1994. In her brief, the
I.G. argued that Petitioner's
hearing request should be dismissed for untimeliness and because it did not
raise any issues which I have
the authority to hear and decide. The I.G. argued also, among other things,
that the relevant regulations do
not contain any provisions which permit the reopening of cases which have been
dismissed.
Because I am treating Petitioner's July 1995 request as a motion to vacate
my 1994 dismissal of his case,
the relevant issue is not whether this request was filed timely in accordance
with 42 C.F.R. 1005.2(e), but
whether I have the authority under the regulations to now reopen Petitioner's
case. I conclude that I do not
have that authority.
Applying the rationale of 42 C.F.R. 1005.20(d) to dismissals, it is logical
to conclude that my dismissal of
the cases concerning Petitioner and his company became final and binding on
the parties 30 days from the
date they were served. Petitioner does not allege, nor do the facts support,
that he filed his July 1995
request within 30 days of receipt of my April 1994 dismissal. Petitioner's July
1995 request to reopen my
April 13, 1994 dismissal order is thus out of time. Accordingly, I am without
authority under the
regulations to hear and decide Petitioner's July 1995 request to, in effect,
reopen my dismissal of his case.
Given that the dismissal has become final, Petitioner has no right to a hearing
at this time. Therefore, I
grant the I.G.'s motion and dismiss Petitioner's July 3, 1995 hearing request.
Furthermore, to the extent that Petitioner misunderstood the withdrawal of
his hearing request and its
consequences, it appears that any such misunderstanding occurred between Petitioner
and his counsel, Mr.
Finkelstein. The dismissal order I issued was unequivocal and stated that the
cases (i.e., the two cases
concerning Petitioner and his company) were dismissed. If Petitioner had a question
about the nature of
the dismissal, it was incumbent upon him or his counsel to raise such questions
upon receiving the order. I
agree with the I.G. that "the remedy lies between counsel and petitioner."
I.G. Memorandum of Law, at 3.
Although I gave Petitioner the opportunity to address the validity of his exclusion
by submitting
documentation in support of his arguments (Order to Show Cause, dated April
18, 1996), for the reasons
stated above, I have since determined that I lack authority to reopen the record
in this case and grant
Petitioner a hearing on the merits.
However, in the alternative, were I to consider Petitioner's case on the merits,
I would find that the I.G.
properly excluded him for five years from participation in the Medicare and
Medicaid programs pursuant
to sections 1128(a)(1) and 1128(c)(3)(B) of the Act, for the reasons stated
below.
It is undisputed that Petitioner pled guilty to the crime of offering a false
instrument for filing in the second
degree, and that the State court accepted the plea. I.G. Ex. 2. Petitioner was
thus convicted of a criminal
offense within the meaning of sections 1128(a)(1) and 1128(i) of the Act.
Petitioner, in pleading guilty, admitted at the sentencing proceeding that he
had filed a false Medicaid
claim form with a fiscal agent for New York State Medicaid. I.G. Ex. 2 at 6.
Petitioner admitted that the
claim form falsely stated the acquisition cost of a hearing aid that he dispensed.
Id. It has been previously
determined that financial misconduct directed at Medicare or Medicaid, in connection
with the delivery of
items or services under the program, constitutes a program-related offense invoking
mandatory 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). Thus, 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 Medicaid,
within the meaning of section 1128(a)(1) of the Act.
V. Conclusion
I lack authority to reopen Petitioner's case because the dismissal of his case
has become final and binding.
Therefore, I grant the I.G.'s motion to dismiss. In the alternative, were I
to consider Petitioner's case on the
merits, I would conclude that the I.G. was required to exclude Petitioner for
five years as a matter of law
because 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.
Joseph K. Riotto
Administrative Law Judge
1. Petitioner did not respond to the portion of the Order to Show Cause which
requested him to clarify
his position with regard to the hearing request of C.D. Hearing Laboratories,
Inc. For this reason, my
decision addresses only the hearing request relating to Petitioner himself.
2. I do not have authority to interpret regulations which affect the handling
of appeals at the DAB.
Therefore, I am making no decision concerning whether an appellate panel might
have authority to reopen
or revise its decision in a case, under 42 C.F.R. 1005.21(j).
3. 42 C.F.R. 1005.20(a) provides that "[t]he ALJ will issue an initial
decision, based only on the record,
which will contain findings of fact and conclusions of law."