Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: C. William Alexander, Ph.D., Petitioner,
- v. -
The Inspector General.
Date: June 26, 1997
Docket No. C-97-116
Decision No. CR479
DECISION
By letter dated September 20, 1996, Petitioner C. William
Alexander, Ph.D., 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 three years from
participation in the Medicare, Medicaid, Maternal and Child
Health Services Block Grant and Block Grants to States for Social
Services (Medicare and Medicaid) programs. The I.G. explained
that the three-year exclusion was authorized under section
1128(b)(5)(B) of the Social Security Act (Act). The exclusion
was based upon the May 19, 1994 termination by the Kansas
Department of Social and Rehabilitative Services (SRS) of
Petitioner's Medicaid provider agreement, for reasons bearing on
his professional competence, professional performance, or
financial integrity.
Petitioner filed a timely request for review of the I.G.'s
action, and the I.G. moved for summary disposition. Because I
have determined that there are no material and relevant factual
issues in dispute (i.e., the only matter to be decided is the
legal significance of the undisputed facts), I have granted the
I.G.'s motion and decide the case on the basis of written
submissions in lieu of an in-person hearing. 1/
I affirm the I.G.'s determination to exclude Petitioner from
participation in the Medicare and Medicaid programs for a period
of three years.
APPLICABLE LAW
Section 1128(b)(5)(B) of the Act authorizes the I.G. to exclude
"any individual or entity which has been suspended or excluded
from participation, or otherwise sanctioned, under . . . a State
health care program, for reasons bearing on the individual's or
entity's professional competence, professional performance, or
financial integrity."
An appellate panel of the Departmental Appeals Board (DAB) has
held that to justify exclusion under section 1128(b)(5)(B), the
I.G. need prove that only two elements have been met: (1) a
petitioner must have been excluded or suspended from a state
health care program; and (2) the exclusion or suspension must
have been for reasons bearing on the petitioner's professional
competence, professional performance, or financial integrity.
George Iturralde, M.D., DAB 1374 (1992).
Because exclusion under section 1128(b)(5)(B) is wholly
derivative of suspension or exclusion under a state health care
program, a petitioner may not collaterally attack the state
proceeding which led to the state exclusion or suspension in a
hearing before an administrative law judge (ALJ) of the DAB's
Civil Remedies Division. Olufemi Okonuren, DAB 1319 (1992).
Similarly, an ALJ is not required to determine the guilt or
innocence of a petitioner with reference to the conduct on which
the state action is based. Behrooz Bassim, M. D., DAB 1330
(1992). As stated by the DAB, "there would be no point in
relying on these [state] actions if they would be reopened and
relitigated during the [section 1128] exclusion proceedings."
Iturralde, at 7.
Unless aggravating or mitigating factors provide a basis for
lengthening or shortening a period of exclusion, an exclusion
imposed under section 1128(b)(5)(B) will be for a period of three
years. 42 C.F.R. § 1001.601(b)(1). Only the following factors
may be considered in mitigation: (1) the period of exclusion,
suspension or other sanction imposed under the federal or state
health care program is less than three years; (2) the
individual's or entity's cooperation with federal or state
officials resulted in the sanctioning of other individuals or
entities; or (3) alternative sources of the types of health care
items or services furnished by the individual or entity are not
available. 42 C.F.R. § 1001.601(b)(3).
ISSUES, FINDINGS OF FACT AND CONCLUSIONS OF LAW
The issues in this case are whether the I.G. was authorized to
exclude Petitioner pursuant to section 1128(b)(5)(B) of the Act,
and whether the three-year exclusion imposed by the I.G. is
reasonable.
I make the following findings of fact and conclusions of law to
support my decision that the I.G.'s determination to exclude
Petitioner is authorized and that the three-year term of the
exclusion is reasonable.
1. At all times relevant to this case, Petitioner was a
psychologist providing mental health services to Medicaid
patients in Kansas.
2. As a general rule, the Medicaid program in Kansas will
not pay for psychotherapy services provided at an Intermediate
Care Facility for the Mentally Retarded (ICF-MR). I.G. Ex. 2.
3. On September 18, 1990, SRS notified Petitioner that
Petitioner had received a Medicaid overpayment in the amount of
$105,480, which was related to his submission of claims for
psychotherapy services. I.G. Exs. 1, 2.
4. Subsequent to the SRS notice of overpayment, the
director of SRS reduced to $46,165 the amount of the overpayment
which it was requesting that Petitioner repay. The $46,165
equaled the amount that Kansas Medicaid had paid Petitioner for
non-covered psychotherapy services provided at ICF-MRs from
December 1988 through May 1990. I.G. Exs. 1, 2.
5. On January 25, 1991, SRS notified Petitioner that it was
proposing to terminate him from participation in the Kansas
Medicaid program for five years.
6. On May 19, 1994, as a result of Petitioner's request for
an administrative hearing, an SRS hearing officer entered an
initial order affirming a five-year termination of Petitioner's
Kansas Medicaid provider agreement, effective May 19, 1994, as
well as requiring recoupment of the $46,165 overpayment. I.G.
Ex. 1
7. On September 13, 1994, the SRS State Appeals Committee
issued a final order affirming the hearing officer's initial
order (I.G. Ex. 1), which stated that "the Committee finds there
is evidence to support [that] the appellant had a history of
submitting improper billings. He billed for noncovered services
and may have billed for unnecessary services. Good cause to
terminate him as a provider in the Medicaid program has been
established." Id. at 3.
8. Petitioner filed suit in Kansas State court contesting
the SRS State Appeals Committee's order. On March 29, 1995, the
District Court of Shawnee County affirmed the SRS termination and
recoupment order, herein to be referred to as the "State court
order." I.G. Ex. 2.
9. The March 29, 1995 State court order states in part:
"based solely on Alexander's conduct with respect to providing
noncovered psychotherapy at the ICF-MRs, the Appeals Committee's
decision to affirm the hearing officer's decision to terminate
Alexander's participation in the Medicaid program is consistent
with the provisions of the regulation allowing termination."
I.G. Ex. 2 at 10.
10. The hearing officer, the SRS State Appeals Committee,
and the Kansas State court, all rejected Petitioner's arguments
concerning his authority to submit claims to Kansas Medicaid for
psychotherapy services provided at ICF-MRs.
11. On June 27, 1995, Petitioner and SRS entered into a
consent agreement, which states that "Dr. Alexander shall
immediately stop participating in the Kansas Medicaid program and
shall not rejoin that program before May 19, 1999." I.G. Ex. 3.
12. Under sections 3(a) and 3(b) of the consent agreement,
Petitioner agreed to repay the balance of the $46,165 overpayment
that had not already been withheld by SRS. I.G. Ex. 3.
13. As required by section 3(e) of the consent agreement,
Petitioner's lawsuit seeking judicial review of the State court
order was dismissed with prejudice at the request of both
parties. I.G. Exs. 3, 4.
14. The Kansas Medicaid termination affirmed by the SRS
final order and the State court order has not been revoked and
remains in effect. I.G. Br. at 5.
15. Kansas Medicaid is a State health care program, within
the meaning of sections 1128(h) and 1128(b)(5)(B) of the Act.
16. Pursuant to section 1128(b)(5)(B) of the Act, the
Secretary of HHS has authority to impose and direct an exclusion
against Petitioner from participating in Medicare and Medicaid.
17. The Secretary has delegated to the I.G. the duty to
impose and direct exclusions pursuant to section 1128 of the Act.
48 Fed. Reg. 21,662 (1983).
18. On September 20, 1996, the I.G. excluded Petitioner from
participation in the Medicare and Medicaid programs. I.G. Ex. 5.
19. Petitioner's termination from participation in the
Kansas Medicaid program constitutes an exclusion or suspension or
other sanction as those terms are used in section 1128(b)(5)(B)
of the Act. 42 C.F.R. § 1001.601(a)(2).
20. Petitioner was excluded from participation in a State
health care program for reasons bearing on his professional
competence, professional performance, or financial integrity.
I.G. Ex. 5; FFCL 7, 9.
21. In this administrative proceeding, Petitioner cannot
collaterally attack the Kansas administrative and judicial
actions which led to his exclusion from the Medicare and Medicaid
programs. 42 C.F.R. § 1001.2007(d).
22. Petitioner has not established the existence of any
mitigating factors within the scope of 42 C.F.R § 1001.601(b)(3).
23. Petitioner's three-year exclusion from participation in the
Medicare and Medicaid programs is proper.
DISCUSSION
Petitioner argues that, in view of his settlement agreement, his
"inactivity" in the Kansas Medicaid program is the result of
mutual agreement, not an exclusion or suspension. P. Br. at 1.
I find no merit in his argument. The orders of the State
administrative agency and the State court constitute sufficient
bases to exclude Petitioner from participation in the Medicare
and Medicaid programs. The facts reflect that the settlement
agreement is a result of SRS actions to terminate Petitioner's
Medicaid provider status. As I found above, the record in this
case reflects that SRS terminated Petitioner's Kansas Medicaid
provider agreement for five years, beginning on May 19, 1994, as
a result of Petitioner's improper billing practices. Following
this, an SRS hearing officer issued an initial order affirming
Petitioner's exclusion from Kansas Medicaid. On September 13,
1994, the SRS State Appeals Committee issued a final order
unanimously affirming the hearing officer's initial order. On
May 29, 1995, in response to Petitioner's appeal, the State court
issued a memorandum decision and order affirming the SRS final
order. On June 27, 1995, Petitioner and the SRS entered into a
consent agreement, in which Petitioner agreed to stop
participating in Kansas Medicaid and to a dismissal with
prejudice of his appeal of the State court order.
Petitioner cites clauses in the consent agreement which stated
that such agreement constitutes the "full and complete agreement
between the parties," "that any other prior or written
understandings or agreements are superseded hereby," and that
"nothing in the agreement is to be construed to be a concession
or admission by Dr. Alexander of any wrongdoing." I.G. Ex. 3 at
2. Petitioner contends these terms undermine any claim that he
has been sanctioned within the scope of section 1128(b)(5)(B) of
the Act. I reject these arguments. I find that the record shows
that the existence of the SRS consent agreement does not negate
the fact that, on three separate occasions, administrative and
judicial reviewers upheld Petitioner's five-year exclusion from
Kansas Medicaid. Under section 1128(b)(5)(B), it is the fact of
an exclusion or suspension by a state for reasons bearing on an
individual's professional competence, professional performance,
or financial integrity, which gives the I.G. the authority to
exclude that individual. The orders referenced here have not
been revoked, remain in effect, and by themselves constitute
sufficient bases for the I.G. to exclude Petitioner from
participation in the Medicare and Medicaid programs. These
clauses cited by Petitioner merely show that he has not conceded
wrongdoing, and that the agreement constitutes the only agreement
between the parties, but it does not in any way alter the legal
effect of the judgements against him.
Based on this factual background, I find that Petitioner's case
constitutes an exclusion, suspension, or other sanction within
the scope of section 1128(b)(5)(B) of the Act. Moreover, I find
further that the consent agreement provides an additional basis
for Petitioner's exclusion. An appellate panel of the DAB has
previously found that "an individual who withdraws voluntarily
from participating in a federal or State health care program in
order to avoid the imposition of a formal sanction against that
individual, is `otherwise sanctioned' within the meaning of
section 1128(b)(5)(B)." Hassan Ibrahim, M.D., DAB 1613 (1997) at
1-2.
In Petitioner's case, a formal sanction was already in place at
the time the SRS consent agreement was executed, but settlement
was entered into to forestall continued appeal of the exclusion
which had already been upheld by a State court judge. The
petitioner in Ibrahim, like Petitioner here, contended that the
I.G. should rely only on the settlement agreement in which the
petitioner did not admit wrongdoing. The DAB rejected such
argument, stating:
Petitioner's arguments are without merit . . .
Petitioner executed the agreement to remove a state
exclusion resulting from an audit of his practice which
found Petitioner's professional care to be below standard in
numerous respects, as well as finding that Petitioner
submitted a false Medicaid claim. Even though Petitioner
did not admit any unacceptable practice in the agreement,
the State action which the agreement resolved was clearly
taken for reasons bearing on Petitioner's professional
competence and performance, as well as financial integrity.
Petitioner's voluntary withdrawal from full participation
in the Medicaid program, even while retaining by agreement
some limited ability to participate, in order to avoid a
formal exclusion, meets the definition of 'otherwise
sanctioned.' [within the meaning of section 1128(b)(5)(B) of
the Act]. Id. at 2-3.
I find Petitioner's case presents an even more compelling example
of a "sanction," in that the SRS consent agreement does not alter
or remove the State exclusion which was affirmed in both
administrative and judicial proceedings and does not even permit
Petitioner the "limited ability to participate" in Medicaid, as
the agreement in Ibrahim did for the petitioner in that case.
In his response, Petitioner seeks to collaterally attack the
State proceedings, but I reject this challenge. Petitioner
contends that he maintained legitimate offices on the premises of
the ICF-MRs and, therefore, his practice of billing Kansas
Medicaid for services in the ICF-MRs was proper and should not
have resulted in his exclusion from Kansas Medicaid. It is
clear, however, that Petitioner is not entitled to use this
proceeding to relitigate or collaterally attack the State
Medicaid proceedings. The regulations specifically preclude such
action and state that "when the exclusion is based on the
existence of a conviction, a determination by another government
agency or any other prior determination, the basis for the
underlying determination is not reviewable and the individual or
entity may not collaterally attack the underlying determination,
either on substantive or procedural grounds, in this appeal." 42
C.F.R. § 1001.2007(d).
Moreover, on this issue, an appellate panel of the DAB has
precluded a collateral attack in a case involving a settlement
agreement. Specifically, in Ibrahim, the panel held that
"Petitioner was not entitled to collaterally attack the State
proceedings before the ALJ. See George Iturralde, M.D., DAB No.
1374 (1992); Olufemi Okunoren, M.D., DAB No. 1319 (1992). The
I.G. could reasonably rely on the State action in imposing a
derivative federal exclusion." Ibrahim at 2-3.
In order to show that exclusion is justified, the I.G. must also
establish that the exclusion, suspension, or other sanction
occurred for reasons bearing on Petitioner's professional
competence, professional performance, or financial integrity. I
find that this requirement is established in Petitioner's case.
The record shows that the exclusion was based on a finding that
Petitioner had submitted claims to Kansas Medicaid for
psychotherapy services provided at ICF-MRs that he knew or should
have known were noncovered services. I.G. Ex. 1 at 3. I find
that Petitioner's submission of claims to Kansas Medicaid for
noncovered services bears on his professional performance and
financial integrity.
In George Iturralde, M.D., an appellate panel of the DAB stated
that exclusion under section 1128(b)(5)(B) is authorized where
there is a "common sense connection between a state's findings
and either professional competence, performance, or financial
integrity," and that the "common sense connection is obvious"
in
a case of repeated overbilling. Iturralde, at 11. In Iturralde,
the panel upheld the finding that the petitioner was properly
excluded from Kansas Medicaid on the basis that "repeated
overbilling of Medicaid evidenced a lack of financial integrity"
within the meaning of section 1128(b)(5)(B). Id. at 9. In
Petitioner's case, the SRS State Appeals Committee unanimously
found "evidence to support [that] the appellant had a history of
submitting improper billings. He billed for noncovered services
and may have billed for unnecessary services." I.G. Ex. 1 at 4.
The State court order pointed to "Alexander's conduct with
respect to providing noncovered psychotherapy at the ICF-MRs," as
an example of "a pattern of submitting billings for services not
covered under the program." I.G. Ex. 2 at 10. I find that there
is a common sense connection between these State findings and a
lack of financial integrity.
I find also that the three-year term of exclusion is proper. In
so finding, I reject Petitioner's arguments for mitigation. He
contends that he has been fully cooperative in providing
requested information. However, unless such cooperation results
in the sanctioning of other individuals or entities, it does not
qualify as a mitigating circumstance under 42 C.F.R. §
1001.601(b)(3)(ii).
Petitioner also asserts that he was in compliance with Medicaid
guidelines. I cannot consider this assertion in mitigation of
Petitioner's period of exclusion, because such compliance is not
an enumerated mitigating circumstance under the regulations. He
also maintains that he discontinued the use of satellite offices
10 years ago, but passage of time also is not an enumerated
mitigating circumstance. 2/
Finally, Petitioner contends that his period of exclusion should
be shortened because "he is the only psychologist who is board
certified (by the American Association of Pain Management) to
provide pain management services to this population in his area
for hundreds of miles." P. Br. at 7. Petitioner has the burden
of proof on this issue, since a mitigating factor is in the
nature of an affirmative defense. Barry D. Garfinkel, M.D., DAB
1572 (1996). Petitioner has provided no evidence to support his
contention. Thus, Petitioner has not met his burden of proof on
this issue.
CONCLUSION
Section 1128(b)(5)(B) authorizes the I.G. to exclude Petitioner
from participation in the Medicare and Medicaid programs for a
period of three years, because he has been suspended or excluded
from participation, or otherwise sanctioned, under a State health
care program for reasons bearing on his professional competence,
professional performance, or financial integrity. Therefore, I
sustain Petitioner's three-year exclusion.
Joseph K. Riotto
Administrative Law Judge
* * * Footnotes * * *
1. The I.G. submitted five proposed exhibits (I.G.
Exs. 1-5). Petitioner submitted 10 proposed exhibits (P. Exs. 1-
10). Neither party objected to my receiving any of these
proposed exhibits into evidence. Therefore, I am receiving into
evidence I.G. Exs. 1-5 and P. Exs. 1-10.
2. Petitioner had satellite offices at ICF-MRs where
he provided non-covered psychotherapy services. The Medicaid
overpayment derived from Petitioner's billing for these non-
covered services.
(..continued)