Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Kathleen Ann Kahler, Petitioner,
- v. -
The Inspector General.
DATE: October 8, 1997
Docket No. C-97-413
Decision No. CR498
DECISION
By letter dated March 26, 1997, Kathleen Ann Kahler, the
Petitioner herein, was notified by the Inspector General
(I.G.), United States Department of Health and Human
Services (HHS), that it had been decided to exclude her
for a period of five years from participation in the
Medicare, Medicaid, Maternal and Child Services Block
Grant and Block Grant 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 a health care item or service
under the Medicare program.
Petitioner filed a request for review of the I.G.'s
action. The I.G. moved for summary disposition. The
parties agreed that this matter would be decided on the
basis of the written record without the need for an in-
person hearing if no material facts are in dispute and
since the issues are legal in nature. I have determined
that there are no material and relevant factual issues in
dispute. Both parties submitted briefs in this matter.
The I.G. submitted six proposed exhibits (I.G. Ex. 1-6).
Petitioner did not object to these exhibits, and I admit
them into evidence.
I grant the I.G.'s motion for summary disposition. I
affirm the I.G.'s determination to exclude Petitioner
from participation in the Medicare and Medicaid programs
for a period of five years.
I. 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 a health care
item or service under Medicare or Medicaid to be excluded
from participation in such programs for a period of at
least five years.
II. Petitioner's Arguments
Petitioner contends that she is not subject to mandatory
exclusion because her offense does not relate to the
delivery of a health care item or service under the
Medicare program. Specifically she maintains that she
did not herself file false claims with Medicare.
Petitioner relates that she was employed as a mental
health counselor by Senior Counseling Services and that
her employer was the entity that filed the fraudulent
claims.
Petitioner also maintains that the statute of limitations
has passed for bringing an exclusion action against her.
She notes that the claims in question were submitted in
1990 and 1991. She asserts that the I.G. can only bring
an exclusion action within six years from the time a
claim or request for payment is presented and she cites
42 U.S.C. section 1320a-7a, section 1128A(c)(1) of the
Act, as authority for her position.
Finally, Petitioner argues in her request for a hearing
that she did not know that her guilty plea would trigger
an exclusion from the federally-funded health care
programs. She asserts that neither the prosecuting
attorney nor HHS representatives with whom she had
cooperated in the investigation of her former employer
informed her that she would be excluded as a result of
her guilty plea.
III. Findings of Fact and Conclusions of Law
1. At all times relevant herein, Petitioner was employed
by Senior Counseling Services as a mental health
counselor who provided psychological counseling and low
vision counseling to Medicare patients in nursing homes.
2. Senior Counseling Services was owned by David
Redfering.
3. The claims submitted to the Medicare program for
Petitioner's services were submitted by David Redfering
under the name "Senior Counseling Services" and later
under the name of "David L. Redfering and Associates."
4. An Information charging Petitioner with one count of
conspiracy to defraud the United States Medicare program
was filed by the United States Attorney in the United
States District Court, Middle District of Florida, Tampa
Division. I.G. Ex. 3.
5. On July 10, 1996, Petitioner pled guilty in the
United States District Court, Middle District of Florida,
Tampa Division, to Count One of the Information for
conspiracy to defraud the United States. I.G. Ex. 4.
6. In her plea agreement, Petitioner admitted that
during the period of October 1990 though October 1991 she
assisted David Redfering in preparing false documentation
in support of Medicare claims submitted by Senior
Counseling Services and David L. Redfering and Associates
for psychological evaluations and group and individual
therapy sessions, although neither Petitioner nor
Redfering performed these services. I.G. Ex. 6 at 14.
7. In her plea agreement, Petitioner admitted that
during the period October 1990 through October 1991 she
also assisted David Redfering in preparing false
documentation in support of Medicare claims by Senior
Counseling Services and David L. Redfering and Associates
for psychological evaluations conducted while no
qualified clinical psychologist was present, in violation
of Medicare payment rules. I.G. Ex. 6 at 14.
8. In her plea agreement, Petitioner acknowledged that
she assisted David Redfering in the preparation of false
documentation to support the Medicare claims, including
Petitioner's forging patient signatures on psychological
assessment and counseling consent forms, backdating file
entries, and describing low vision services in terms of
psychological counseling in progress notes and patient
files. I.G. Ex. 6 at 14.
9. As a result of her July 10, 1996 conviction,
Petitioner was sentenced to five years probation, was
ordered to pay restitution including $4,356.48 to
Medicare, a fine of $2000, and a $50 special assessment.
I.G. Ex.4.
10. Section 1128(a)(1) of the Act provides for the
mandatory exclusion from Medicare and Medicaid of
individuals convicted under federal or state law of a
criminal offense related to the delivery of a health care
item or service under the Medicare or Medicaid program.
11. Petitioner's criminal conviction for conspiracy to
defraud the United States constitutes a conviction within
the meaning of section 1128(i)(3) of the Act.
12. Petitioner's criminal conviction for conspiracy to
defraud the United States is related to the delivery of a
health care item or service under the Medicare program
within the meaning of section 1128(a)(1) of the Act.
13. Once an individual has been convicted of a program-
related criminal offense under section 1128(a)(1) of the
Act, exclusion is mandatory under section 1128(c)(3)(B)
of the Act for a minimum of 5 years.
14. 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.
IV. Discussion
The first statutory requirement for the imposition of
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. The Act provides that an individual will be deemed
convicted under any of the following circumstances:
(1) when a judgment of conviction has been entered
against the individual or entity by a Federal,
State, or local court, regardless of whether there
is an appeal pending or whether the judgment of
conviction or other record relating to criminal
conduct has been expunged;
(2) when there has been a finding of guilt against
the individual or entity by a Federal, State, or
local court;
(3) when a plea of guilty or nolo contendere by the
individual or entity has been accepted by a Federal,
State, or local court; or
(4) when the individual or entity has entered into
participation in a first offender, deferred
adjudication, or other arrangement or program where
judgment of conviction has been withheld.
Section 1128(i)(3) of the Act.
Petitioner does not dispute that she was convicted of a
criminal offense. The record reflects that Petitioner
pled guilty to one count of conspiracy to defraud the
United States and her plea was accepted by the United
States District Court, Middle District of Florida, Tampa
Division, on July 10, 1996. Therefore, on these facts,
section 1128(i)(3) of the Act is satisfied.
Next, it is required under section 1128(a)(1) of the Act
that the crime at issue be related to the delivery of a
health care item or service under Medicare or Medicaid.
Petitioner does not dispute that the services allegedly
involved in the fraudulent claims relate to health care
items or services within the scope of the Act. She also
does not dispute that such services were billed to
Medicare and the Information to which she pled guilty
reflects this fact. In her defense, Petitioner cites the
fact that she was precluded from filing Medicare claims
and that her employer was the entity that filed the
claims at issue. On these facts, she asserts that the
crime for which she was convicted does not relate to the
Medicare program as she did not herself file the false
claims.
I reject this claim. The record reflects that Petitioner
assisted her employer in the submission of false Medicare
claims. These claims were falsified to reflect
compliance with Medicare rules when such compliance had
in fact not occurred as the services were not performed
when a qualified clinical psychologist was present. She
also assisted her employer in the submission of
fraudulent Medicare claims for psychological services she
never rendered. In this regard, Petitioner worded claims
for low vision visits to read as though she had provided
the patients with psychological evaluations and therapy.
She also forged the signatures of patients on consent
forms indicating that they agreed to psychological
treatment and counseling. These consent forms and
records were then presented to the Medicare program as
supporting documentation in an effort to obtain
reimbursement for psychological services never provided
to these patients. Petitioner's assistance to her
employer enabled him to submit false claims to the
Medicare program and resulted in Petitioner's conviction
for conspiracy to defraud the United States.
It is well-established that financial misconduct directed
at Medicare or Medicaid, in connection with the delivery
of items or services under the program, constitutes
program-related offense invoking mandatory exclusion.
Alan J. Chernick, D.D.S., DAB CR434 (1996). Departmental
Appeals Board case law has long held that filing false
Medicare or Medicaid claims constitutes program
misconduct which warrants exclusion. Paul Karsch, DAB
CR454 (1997). I find that the offense which Petitioner
was convicted of constitutes criminal fraud related to
the delivery of a health care item or service under the
Medicare program. Petitioner's fraudulent conduct was
instrumental in enabling her employer to submit false
Medicare claims.
I find no merit in Petitioner's argument that she should
not be excluded, because her employer filed the claims as
she was precluded from filing. The Departmental Appeals
Board has rejected a similar claim in Robert C.
Greenwood, DAB No. 1423 (1993). In that case the
Departmental Appeals Board upheld on appeal a mandatory
five year exclusion of a home health aide who was
employed by providers to which he submitted false time
sheets. His employers then filed claims with Medicaid.
Although the petitioner contended that there was no
evidence to show that he had knowledge that the patient
was a Medicaid recipient or that his employer would file
a claim with Medicaid for his services, the Departmental
Appeals Board found that exclusion was proper.
Petitioner's case is even more compelling as she was
convicted of conspiring with her employer to defraud the
Medicare program.
Petitioner also argues that she should not be subject to
an exclusion under section 1128(a)(1) of the Act because
she was not informed in the criminal proceeding that she
would be excluded from the Medicare and Medicaid programs
as a result of her conviction. I reject this argument.
It is well-settled that arguments regarding the process
leading to a petitioner's criminal conviction are
irrelevant for purposes of an exclusion proceeding.
Charles W. Wheeler, DAB No. 1123 (1990); Douglas Schram,
R.Ph., DAB CR215 (1992) aff'd DAB No. 1372 (1992); Paul
Karsch, DAB CR454 (1997). In Schram, the petitioner
argued that because he was not given adequate notice
concerning the consequences of his plea, his right to due
process had been violated. The Departmental Appeals
Board rejected this argument, relying on the proposition
in U.S. v. Suter, 755 F.2d 523 (7th Cir. 1985) that a
defendant does not have to be advised of all of the
possible consequences of his plea. Suter, at 525. In
essence, Petitioner's argument amounts to a collateral
attack on her conviction, which the DAB has previously
held to be an ineffectual argument in the context of an
exclusion appeal as the I.G. and the ALJ are not
permitted to look beyond the fact of conviction. Paul R.
Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB
CR309 (1994); Peter Edmondson, DAB No. 1330 (1992).
Finally, Petitioner maintains that the statute of
limitations has passed for bringing an exclusion action
against her and cites section 1128A(c)(1) of the Act (42
U.S.C. section 1320a-7a) as authority for her position.
I find that Petitioner's argument is misplaced. The
provision upon which Petitioner relies, otherwise known
as the Civil Money Penalty Law (CMPL), provides the I.G.
with the authority to impose monetary penalties upon
providers who have either directly submitted, or caused
to be submitted, claims which are improper or false.
Section 1128A of the Act. While it is true that an
individual or entity may be excluded under the CMPL as a
result of the submission of false or fraudulent claims
for reimbursement, pursuant to section 1128A(a) of the
Act, the exclusion at issue in this case is predicated
upon Petitioner's criminal conviction. Therefore,
section 1128A of the Act and the referenced statute of
limitations does not apply. As stated in Petitioner's
notice of exclusion, Petitioner's exclusion is the direct
result of her conviction for conspiracy to defraud the
United States related to the Medicare program. She is
therefore subject to mandatory exclusion pursuant to
section 1128(a)(1) of the Act. No statute of limitations
is applicable to this remedial sanction.
V. Conclusion
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate
that Petitioner be excluded from the Medicare and
Medicaid programs for a period of at least five years
because she has been convicted of a criminal offense
related to the delivery of a health care item or service
under the Medicare 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.