Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Muhammad A. Malick, Petitioner,
- v. -
The Inspector General.
DATE: February 24, 1997
Docket No. C-97-014
Decision No. CR463
DECISION
By letter dated August 16, 1996, Muhammad A. Malick, the
Petitioner herein, was notified by the Inspector General (I.G.),
U.S. Department of Health and Human Services (HHS), that it had
been decided to exclude him 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. explained that the five-year
exclusion was mandatory under 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 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, and the only matter to be decided is
the legal significance of the undisputed facts, I have decided
the case on the basis of the parties' written submissions in lieu
of an in-person hearing. I grant the I.G.'s motion for summary
disposition.
Thus, 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.
PETITIONER'S ARGUMENT
Petitioner contends, first, that his exclusion is not warranted
because he was not a provider of items or services under
Medicaid. He argues also that the I.G. unreasonably prolonged
his exclusion by waiting so long to act against him. Petitioner
argues that the effective date of his exclusion should start from
the date of his conviction, which was more than two years ago.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. During the period relevant herein, Petitioner operated a
business which administered sonogram and blood tests.
2. On July 19, 1993, Petitioner was indicted in New Jersey
Superior Court on one count of conspiracy (3rd degree), one count
of misconduct by corporate officials and complicity (3rd degree),
one count of Medicaid fraud and complicity (high misdemeanor),
and one count of commercial bribery and complicity (3rd degree).
I.G. Ex. 2. 2/
3. The indictment alleged that Petitioner and an acquaintance
formed a corporation called Muasif Services, Inc., and its
purpose was to administer sonogram and blood tests. I.G. Ex. 2.
3/
4. In setting forth the conspiracy allegations, the indictment
charged that, between April 1, 1988 and February 28, 1989, a
physician who was also a Medicaid provider directed his patients
at various times to submit to tests administered by Petitioner,
without regard to the medical necessity of the tests.
5. The indictment alleged further that, as part of the
conspiracy, Petitioner paid the aforementioned physician's office
and overhead expenses in exchange for the referral of patients
for blood and sonogram testing.
6. The indictment alleged that Petitioner offered a kickback to
this physician in connection with the furnishing of services
under Medicaid, in that Petitioner paid for that physician's
office and overhead expenses, in exchange for the referral of
patients, including Medicaid recipients, to him for the
administration of sonogram and blood tests.
7. On June 24, 1994, a judgment of conviction was entered in New
Jersey Superior Court finding Petitioner guilty of conspiracy,
misconduct by corporate officials and complicity, and Medicaid
fraud and complicity. I.G. Ex. 1.
8. On June 24, 1994, Petitioner was sentenced to the custody of
the Commissioner of the Department of Corrections for three
years, and was assessed a $50 penalty. I.G. Ex. 1; I.G. Ex. 3 at
22-23.
9. The judgment of conviction entered against Petitioner
constitutes a conviction within the meaning of sections
1128(a)(1) and 1128(i)(1) of the Act.
10. Petitioner's offering of kickbacks in exchange for patient
referrals, including Medicaid recipients, is related to the
delivery of items or services under Medicaid, within the meaning
of section 1128(a)(1) of the Act.
11. Once a person has been convicted of a program-related
criminal offense, exclusion is mandatory under section 1128(a)(1)
of the Act.
12. The I.G. properly excluded Petitioner, pursuant to section
1128(a)(1) of the Act, for a period of five years, as required by
the minimum mandatory exclusion provision of section
1128(c)(3)(B) of the Act.
DISCUSSION
The first statutory requirement for the imposition of a mandatory
exclusion pursuant to section 1128(a)(1) of the Act is that the
individual or entity in question be convicted of a criminal
offense under federal or state law. In the case at hand,
Petitioner does not contest that he was convicted of a criminal
offense. A judgement of conviction was entered in Petitioner's
case and he was sentenced by the State court. Petitioner was
thus convicted within the meaning of section 1128(i)(1) of the
Act. This satisfies the first criterion of section 1128(a)(1) of
the Act.
Next, section 1128(a)(1) requires that the crime at issue be
related to the delivery of an item or service under Medicaid or
Medicare. I find that in this case there is a common-sense
connection between the criminal offense and the Medicaid program.
Clarence H. Olson, DAB CR46 (1989). I conclude that the
delivery of items or services under Medicaid played an essential
and integral role in Petitioner's criminal conduct and
conviction. The evidence relating to the State court proceeding
shows that Petitioner was found guilty of the crimes of
conspiracy, misconduct by corporate officials, and Medicaid
fraud. These crimes arose as part of a scheme by Petitioner to
have Petitioner's corporation perform medically unnecessary tests
on patients, including Medicaid recipients. In return, the
physician involved received kickbacks, in the form of payment of
his rent and overhead expenses, from Petitioner's corporation.
Thus, the criminal offenses for which Petitioner was convicted
arose directly out of the delivery of services under Medicaid.
Petitioner's argument that the exclusion mandated by section
1128(a)(1) is inapplicable to him because he is not a health care
practitioner or provider is without merit. Petitioner's
assertion is contrary to congressional intent. Specifically, in
1980, when Congress was drafting section 1128, it declared that
it intended to exclude not only "physicians and other
practitioners convicted of program-related crimes," but also
other persons, "such as administrators of health care
institutions," who were similarly convicted. 1980 U.S.C.C.A.N.
5526, 5572. This policy is reflected also in the regulations
which implement mandatory exclusion under section 1128(a)(1).
The regulations provide, inter alia, that the requirement of a
relationship between a criminal conviction and the delivery of
items or service under the Medicare and Medicaid programs can be
satisfied by criminality in ". . . the performance of management
or administrative services . . ." 42 C.F.R. § 1001.101(a).
Thus, I find that Petitioner, as co-owner of a business which
administered sonogram and blood tests, falls within the class of
persons the law was intended to deter and is not immune to
exclusion.
In Ifeoma Afeonyi, DAB CR262 (1993), the petitioner was an owner
of a clinic who received kickbacks for directing Medicaid-funded
laboratory work. It was held that the criminal conviction was
based upon acts which arose directly out of the delivery of
services under Medicaid and that it was proper to exclude the
petitioner from the programs based upon her criminal conviction
even though she was not a health-care practitioner but, rather,
occupied the role of an owner or manager.
As to Petitioner's contention that the I.G. did not act within a
reasonable time to effect his exclusion, I, as an administrative
law judge, have no authority to alter the effective date of
exclusion designated by the I.G. as a remedy for the latter's
alleged tardiness. The appellate panel in Shanti Jain, M.D., DAB
CR237 (1992), aff'd, DAB 1398 (1993), held that "[a]n
administrative law judge has no authority to alter the effective
date of exclusion designated by the I.G. where the I.G. acted
within the discretion afforded by statute and regulation in
setting the effective date." Jain, DAB 1398, at 7. Thus, I am
without authority to alter the commencement date of Petitioner's
exclusion.
Although one may understand Petitioner's irritation at being
excluded from federal health care programs over two years after
he was convicted by the State court and imprisoned, the
regulations specify no time limit for the I.G. in cases involving
exclusions under section 1128(a)(1) of the Act. Fred R. Spierer,
DAB CR359 (1995).
Finally, Petitioner contends also that his "exclusion is
permissive, not mandatory," and that "[t]he minimum period of
exclusive [sic] is 3 years". Petitioner's generalized position
that the I.G. should have proceeded under the permissive
exclusion provisions of section 1128(b) of the Act is without
merit. Where a criminal conviction satisfies the statutory
criteria of section 1128(a)(1), then section 1128(a)(1) is
controlling and the I.G. must impose the mandatory exclusion
which the statute provides.
The basis for Petitioner's exclusion rests upon his conviction of
a program-related offense. It is well established that, under
section 1128(a)(1), the Secretary is required to exclude from
participation any individual who is convicted of an offense
related to the delivery of an item or service under the Medicare
or Medicaid programs. See e.g., Francis Shaenboen, DAB 1249
(1991); DeWayne Franzen, DB 1165 (1990); Jack W. Greene, DAB 1078
(1989), aff'd sub nom, Greene v. Sullivan, 731 F.Supp. 835 (E.D.
Tenn 1990).
CONCLUSION
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that
Petitioner herein be excluded from the Medicare and Medicaid
programs for a period of at least five years because he has been
convicted of a criminal offense related to the delivery of a
health care item or service under the Medicaid program. The
five-year exclusion is therefore sustained.
________________________
Joseph K. Riotto
Administrative Law Judge
* * * Footnotes * * *
1. In this decision, I use the term "Medicaid" to
refer to these State health care programs.
2. The I.G. submitted a brief and five exhibits (I.G.
Exs. 1-5). I refer to the I.G.'s brief as "I.G. Brief."
Petitioner has not objected to the I.G.'s exhibits. In the
absence of objection, I admit the I.G.'s exhibits into evidence.
I refer to Petitioner's brief in this case as "P. Brief."
Petitioner did not submit any exhibits.
3. I note for the record that Petitioner, in his
brief, spells the name of his corporation as both "Masif
Services, Inc." (P. Brief at 1) and "Muasif Services, Inc." (P.
Brief at 2, 3, 4). I will use "Muasif Services, Inc.", which is
also the spelling used in the Indictment.