Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Cheryl Elizabeth Richardson, M.D., |
DATE: July 6, 2000 |
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The
Inspector General
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Docket No.C-99-834
Decision No. CR682 |
DECISION | |
This case is before me pursuant to a request for hearing filed
on September 28, 1999, by Cheryl Elizabeth Richardson, M.D. (Petitioner). By letter dated July 30, 1999, the Inspector General (I.G.)
notified Petitioner that she was being excluded from participation in
the Medicare, Medicaid, and all other federal health care programs as
defined in section 1128B(f) of the Social Security Act (Act) for a minimum
period of 10 years. The I.G. informed Petitioner that her exclusion was
imposed under section 1128(a)(1) of the Act, due to her conviction of
a criminal offense (as defined in section 1128(i) of the Act) related
to the delivery of an item or service under the Medicaid program. The parties, through their respective counsel, agreed that the case could be decided based on written arguments and documentary evidence and that an in-person evidentiary hearing was unnecessary. Each party submitted written briefs and proposed exhibits. The I.G. filed nine proposed exhibits on December 23, 1999. These have been identified as I.G. Exhibits (I.G. Exs.) 1-9. Petitioner filed four proposed exhibits on December 21, 1999. These have been identified as Petitioner Exhibits (P. Exs.) 1-4. On December 22, 1999, the I.G. filed a motion objecting to Petitioner's exhibits. For the reasons outlined in my Ruling of January 11, 2000, I denied the I.G.'s objection. That Ruling is incorporated here by reference. On February 28, 2000, Petitioner requested leave to supplement her final exhibit list with the transcript from the criminal sentencing hearing which served as the basis for her exclusion. I granted Petitioner's unopposed motion.(1) I am, therefore, admitting I.G. Exs. 1-9 and P. Exs. 1-5 into evidence. It is my decision to sustain the determination of the
I.G. to exclude Petitioner, Cheryl Elizabeth Richardson, M.D., from participating
in the Medicare, Medicaid, and all other federal health care programs,
for a period of 10 years. I base my decision on the documentary evidence,
the applicable law and regulations, and the arguments of the parties.
It is my finding that Petitioner was convicted of a criminal offense related
to the delivery of an item or service under the Medicaid program. Additionally,
I find that her 10-year exclusion is not unreasonable.
APPLICABLE LAW AND REGULATIONS Section 1128(a)(1) of the Act authorizes the Secretary
of the U.S. Department of Health and Human Services (Secretary) to exclude
from participation in any federal health care program (as defined in section
1128B(f) of the Act), any individual convicted under
federal or State law, of a criminal offense relating to the delivery of
a health care item or service. An exclusion under section 1128(a)(1) of the Act must
be for a minimum period of five years. Section 1128(c)(3)(B) of the Act.
Aggravating factors can serve as a basis for lengthening the period of
exclusion. 42 C.F.R. � 1001.102(b). If aggravating factors justify an
exclusion longer than five years, mitigating factors may be considered
as a basis for reducing the period of exclusion to no less than five years.
42 C.F.R. � 1001.102(c). Pursuant to 42 C.F.R. � 1001.2007, a person excluded under
section 1128(a)(1) of the Act may file a request for hearing before an
administrative law judge (ALJ).
FINDINGS AND DISCUSSION The findings of fact and conclusions of law noted below
in bold face are followed by a discussion of each finding.
Petitioner is a physician who practiced psychiatry in
the State of Mississippi. On or about August 14, 1996, she directed her
staff to submit a claim to the Mississippi Division of Medicaid representing
that she had provided approximately one hour a day of in-patient individual
medical psychotherapy to a Medicaid patient for 22 consecutive days, from
June 17, 1996 through July 8, 1996. This claim resulted in payment to
Petitioner from the Mississippi Division of Medicaid in the amount of
$1,623.60. Petitioner made this claim knowing the same to be false, inasmuch
as it was not based on services actually rendered. This false claim prompted
the Attorney General of the State of Mississippi to file a Criminal Information(2)
against Petitioner on January 11, 1999, pursuant to Section 43-13-221
of the Mississippi Code of 1972, as amended. On that same date, Petitioner
appeared before the Circuit Court of the First Judicial District of Hinds
County, Mississippi, and entered a plea of guilty to a charge of Medicaid
Fraud. She specifically admitted to presenting, on August 14, 1996, a
false claim for certain services provided to a Medicaid recipient knowing
the claim to be false, fictitious, and fraudulent, because those services
were not provided. I.G. Exs. 4, 5. On April 2, 1999, Petitioner received a five-year suspended
sentence and two years of supervised probation. She was also ordered to
pay a $30,000 fine, and barred from the practice of psychiatry in the
State of Mississippi for a period of one year. I.G. Ex. 8. It has been
established, and Petitioner concedes, that she was convicted of a criminal
offense related to the delivery of an item or service under a State health
care program. I.G. Exs. 5, 8.
On July 30, 1999, the I.G. notified Petitioner that she
was being excluded from participation in the Medicare, Medicaid, and all
federal health care programs for a minimum period of 10 years. I.G. Ex.
1. That action was taken pursuant to section 1128(a)(1) of the Act due
to her conviction as defined in section 1128(i). An exclusion under section
1128(a)(1) must be for a minimum mandatory period of five years as set
forth in section 1128(c)(3)(B) of the Act:
When the I.G. imposes an exclusion for the mandatory five-
year period, the issue of the length of such exclusion is not considered.
42 C.F.R. � 1001.2007(a)(2). Aggravating factors that justify enlarging
the exclusion period may be taken into account, but the five-year term
will not be shortened. Petitioner admits that she was convicted of a criminal
offense related to the delivery of an item or service under the Mississippi
Medicaid program, and that the I.G. was required to exclude her pursuant
to section 1128(a)(1) of the Act for at least five years. Consequently,
the only issue in controversy is whether the 10-year exclusion imposed
and directed against Petitioner is unreasonable. The I.G. has discretion to impose an exclusion of more
than five years in appropriate circumstances. In Petitioner's case, the
I.G. added five years to the statutory five year minimum. The aggravating factors that the I.G. may consider in lengthening a period of exclusion are found at 42 C.F.R. � 1001.102(b). In the case at hand, the I.G. contends that a basis exists for enlarging the period of exclusion in view of these two factors:
With regard to the first factor, 42 C.F.R. � 1001.102(b)(1) provides for enlarging the period of exclusion if "the acts resulting in the conviction, or similar acts (emphasis added), resulted in financial loss to a government program or to one or more entities of $1,500.00 or more." In a civil proceeding brought by the State of Mississippi through its Medicaid Fraud Control Unit, Petitioner confessed to owing $223,474 to the Division of Medicaid, and agreed to make restitution. A consent judgment was issued to that effect on January 25, 1999. I.G. Ex. 7. The recovery action by the State of Mississippi arose from acts similar to those which resulted in the criminal charges against Petitioner and led to Petitioner's guilty plea on January 11, 1999. At that time, after plea bargaining, Petitioner pled guilty to submitting and being paid for fraudulent Medicaid claims in the amount of $1,623.60. I.G. Exs. 4, 5. Petitioner does not dispute the existence of an aggravating
factor under 42 C.F.R. � 1001.102(b)(1) and concedes that she engaged
in crimes resulting in financial loss to the Mississippi Medicaid program
in excess of $1,500. Petitioner's reply brief in opposition to the I.G.'s
10-year exclusion (Petitioner's reply brief), paragraph 14, at 4. However,
Petitioner asserts that this is the only aggravating factor present in
this case. Petitioner contends that the other aggravating factor claimed
by the I.G., based on 42 C.F.R. � 1001.102(b)(6), is inapplicable in her
case because she does not have a "prior criminal, civil or administrative
sanction record." Petitioner claims that the November 19, 1998 Consent
Order that she entered into with the Mississippi State Board of Medical
Licensure (State Board) does not constitute an administrative record.
The sole aggravating factor, Petitioner argues, is offset by mitigating
circumstances that reduced her culpability, because she had a mental condition
during the commission of the crime. 42 C.F.R. � 1001.102(c)(2). In sum, Petitioner opposes the reasonableness of the length
of the exclusion based on three arguments:
Petitioner contends that the Consent Order of November
19, 1998, does not fit the definition of a sanction.(3)
Furthermore, she entered into the Consent Order solely to avoid
disciplinary proceedings before the State Board. I find Petitioner's reasoning
to be faulty. An investigation by the State Board found that Petitioner
had prescribed controlled substances and other drugs having addiction-forming
and addiction-sustaining liability otherwise than in the course of her
legitimate professional practice. It was further determined that Petitioner's
certificate to practice medicine in the State of Mississippi had lapsed
due to her failure to renew it. I.G. Ex. 2, at 2. In lieu of being subjected to disciplinary proceedings
before the State Board, on November 14, 1998, Petitioner agreed never
to seek renewal of her license to practice medicine in Mississippi. I.G.
Ex. 2. The Consent Order signed by Petitioner was accepted and approved
by the State Board on November 19, 1998. I.G. Ex. 2, at 4. Regulations pertaining to the prescribing, administering,
and dispensing of medication promulgated pursuant to Chapters 25 and 27,
Title 73, and Chapter 29, Title 41, Mississippi Code (1972), as amended,
provide as follows:
The record is clear that the Investigative Staff of the
State Board conducted a comprehensive investigation into Petitioner's
medical practice regarding the prescribing of controlled substances and
other drugs having addiction-sustaining liability otherwise than in the
course of legitimate professional practice. I.G. Ex. 2, at 2. As a result
of that investigation, the State Board was poised to initiate disciplinary
proceedings against Petitioner. Had the State Board determined, after
a hearing, that Petitioner abused her medication prescription privileges,
the maximum penalty would have been permanent revocation of her license.
Because Petitioner agreed to what was tantamount to the most severe penalty
that could be imposed, it became obvious that further action was unnecessary.
The transcript from the criminal sentencing hearing (court record) clearly
illustrates that Petitioner agreed to relinquish her Mississippi medical
license in order to avoid having it revoked by the State Board. P. Ex.
5, at 8. Consequently, Petitioner's agreement to be forever barred from
seeking a Mississippi medical license to avoid disciplinary proceedings,
and the State Board's acceptance of that agreement, evinces her untrustworthiness
and amounts to a sanction. This situation is analogous to an exclusion by the I.G. when a physician surrenders a medical license to avoid revocation proceedings. In that case, the exclusion sanction, pursuant to section 1128(b)(4)(B) of the Act, cannot be avoided by such surrender. Relinquishing one's license under these circumstances gives rise to the presumption that the findings by the licensing authority upon which the revocation proceedings would be based are accurate. Likewise, I can infer in this case that the Investigative Staff of the State Board arrived at findings that were sufficient to bring disciplinary charges against Petitioner. Petitioner's argument that the November 19, 1998 Consent
Order is not a "prior" sanction is also without merit. Petitioner contends
that it cannot be a prior sanction because she committed Medicaid fraud
in 1996 and the Consent Order was signed in November 1998. Petitioner
relies on the case of Chris Spierer, DAB CR360 (1995) to argue
that the Consent Order was signed prior to the Medicaid fraud guilty plea
only as a product of timing. In the Spierer case, the I.G. excluded
the petitioner for a 10-year period based on a criminal conviction in
Colorado. The I.G. argued that petitioner had a prior administrative sanction
record as a result of a five-year exclusion previously imposed and directed
against him by the Inspector General.(4)
Id. at 1, 5, 9-10. The ALJ found that the length of the exclusion
period was unreasonable on the basis of the petitioner's prior administrative
sanction record. Id. at 16. The ALJ stated that the existence of
the prior administrative sanction record only reflected the I.G.'s timing
of its exclusion notices to the petitioner. Id. In order words,
the only reason the petitioner had a prior administrative sanction record
was due to the fact that the I.G. had delayed excluding the petitioner
based on a 1991 Colorado criminal conviction and chose first to exclude
the petitioner for five years from the Medicare and Medicaid programs
based a 1992 California criminal conviction. Thus, the ALJ concluded that
at the time the petitioner was convicted in Colorado, the petitioner had
no prior criminal or civil sanction record within the meaning of 42 C.F.R.
� 1001.102(b)(5). This, according to the ALJ, was inconsistent with the
remedial purpose of the Act. Id. at 17-18. Presumably, the thrust of Petitioner's contention here
is that if she had been convicted prior to November 19, 1998, the issue
of the Consent Order as a prior sanction may never have been at issue.
That may be true, but that does not negate the fact that she became a
"convicted individual" within the meaning of 42 C.F.R. � 1001.102(b)(6)
in January 1999. At the time the I.G. imposed the exclusion on July 30,
1999, Petitioner had a prior administrative sanction record that the I.G.
had discretion to consider. I find that the Spierer decision does not stand
for the proposition that aggravating factors pursuant to 42 C.F.R. � 1001.102(b)(6)
may only be present if they predate the commission of acts that eventually
lead to conviction. I also note that the administrative sanction dealt
with here, would have been proper for an independent exclusion action.
The I.G., however, chose to consolidate the matter in one single proceeding.
That is consistent with procedural economy. In Spierer, that was
not possible because the petitioner in that case had already been sanctioned
by the I.G. for the California criminal conviction. Furthermore, I find
that the exclusion by the I.G. in this case is remedial in nature, as
opposed to the ALJ's finding in the Spierer decision. Additionally, Petitioner cites the case of Gerald A.
Snider, M.D., DAB CR484 (1997) in its reply brief, at 10. In that
case, the I.G. excluded the petitioner for a 10-year period in 1996, based
on a 1995 Oklahoma criminal conviction. Id. at 1, 4. The I.G. asserted
that the petitioner had a prior administrative sanction record based on
a 1993 reprimand by the Oklahoma State Board of Medical Licensure and
Supervision. Id. at 12-13. The petitioner claimed that the 1993
reprimand was not a prior administrative sanction record because the criminal
acts resulting in the petitioner's exclusion occurred between January
1991 and August 1992. Id. at 14. The ALJ rejected the petitioner's
argument, finding that the I.G.'s purpose in excluding the petitioner
was remedial in nature, not punitive. Id. The ALJ further held
that the word "prior" contained in the regulation referred to a time period
before the I.G. determined the length of exclusion, and did not mean that
the offense on which the administrative sanction record is based (the
acts related to the 1993 administrative sanction record) must have occurred
prior to the offense (the acts leading to the 1995 Oklahoma criminal conviction).
Id. at 15. In this case, Petitioner makes a similar argument to the one made by the petitioner and rejected by the ALJ in Snider. Here, Petitioner claims that her November 19, 1998 Consent Order is not a prior administrative sanction record because the criminal acts resulting in Petitioner's exclusion (Medicaid Fraud) occurred in 1996. I find Petitioner's reliance on Snider unpersuasive. The focal point to determine whether an individual excluded pursuant to section 1128(a)(I) of the Act and 42 C.F.R. � 1001.101 satisfies the requirements of the aggravating factors set out in 42 C.F.R. � 1001.102(b)(6) is the date the I.G. excluded the petitioner, not the date of the underlying criminal conviction or the time period of the criminal acts which led to the conviction. Therefore, I find the word "prior" contained in the regulation refers to a time period before the I.G. excluded Petitioner here. Thus, I reject Petitioner's argument that the November 19, 1998, Consent Order is not a prior administrative sanction record. Finally, Petitioner contends that a mitigating factor
exists, in that the sentencing record shows that she had a mental condition
during the commission of the offense that reduced her culpability. In
her defense, Petitioner claims that at the time she defrauded the Medicaid
program her judgment was severely impaired as a direct result of an undiagnosed
bipolar disorder. P. Ex. 3. Additionally, she contends that because of
her extreme fear of incarceration, she had no recourse but to admit guilt.
P. Exs. 1, 4. To establish a mitigating factor under 42 C.F.R. � 1001.102(c)(2)
a petitioner must show that the record in the criminal proceedings demonstrates
that the court determined that the individual had a mental, emotional,
or physical condition before or during the commission of the offense that
reduced the individual's culpability. Thus, an ALJ's analysis involves
two separate steps: 1) a determination of whether a condition exists and
that the condition was responsible for or contributed to a petitioner's
criminal conduct; and, 2) a determination of whether the court record
demonstrates that the condition reduced a petitioner's culpability. See
Paul G. Klein, D.P.M., DAB CR317 (1994). A critical analysis of the pertinent documents does not
demonstrate that Petitioner had a mental impairment before or during the
commission of the offense. To the contrary, in the "Petition to Enter
a Plea of Guilty," Petitioner specifically declared that she was not suffering
from any mental disease at the time of the crime for which she was being
charged, nor at the time of her change of plea on January 11, 1999. I.G.
Ex. 5, at 2. An ALJ may not consider as mitigating evidence concerning
a party's mental state and culpability unless the party first proves that
the condition existed and related to his or her criminal offense. Klein,
DAB CR317, at 19. Nevertheless, the transcript from Petitioner's court
record indicates that, at sentencing on April 2, 1999, the judge did not
address Petitioner's mental condition at the time of the commission of
the offense. His remarks regarding Petitioner's mental condition were
made in the context of the sentence he was about to impose. Particularly,
he was concerned that, if given a suspended sentence, Petitioner would
continue to practice medicine. P. Ex. 5, at 4-6, 13. Additionally, the regulatory requirements for shortening
an exclusion period are not met by Petitioner's assertion that she entered
a plea of guilty for fear of incarceration. Faced with the evidence of
her misconduct, Petitioner appeared to be caught in a dilemma. She could
enter into a plea bargain agreement and hope for a suspended sentence
or plead insanity. She chose the former, and thus avoided a jail term.
Even if she had successfully pleaded insanity, according to Mississippi
law, she faced the possibility of being committed to a State insane asylum.
Mississippi Code of 1972, as amended, � 99-13-7. Thus, the latter option
appeared to be a no win situation for her. At the time of her guilty plea, Petitioner was employed
as a psychiatrist with excellent decision making ability. Dr. Clyde C.
Rouse, an associate of Petitioner's for the year preceding February 1999,
in a written declaration, stated:
P. Ex. 2. It is evident that when Petitioner entered her plea of
guilty in January 1999 she possessed excellent professional decision making
ability. Moreover, there is an absence of evidence in the court record
of a mental impairment before or at the time of the commission of the
offense, and the affidavits submitted by Petitioner are only speculative
in nature as to her medical condition during the commission of the offense.
P. Exs. 1-4. An objective view of the options available to Petitioner
in January 1999, lends support to the belief that her chosen course of
action was not unwise. It appears she made the best of a bleak situation.
She must come before me now, however, with complete acceptance and recognition
of the alternatives for which she opted in the criminal proceedings. She
cannot expect me, at this juncture, to consider the possible existence
and effects of an unsubstantiated and unclaimed mental impairment. If
it behooved her to deny the existence of a mental impairment when she
pled guilty, and created a record consistent with that denial, she must
also be willing to accept the unfolding consequences. Obviously, Petitioner's conduct is the type that Congress
sought to deter for the protection of the fiscal integrity of the Medicare,
Medicaid, and all other federal health care programs. It follows that
since Petitioner poses a risk to the financial soundness of all federal
health care programs, her untrustworthiness makes her unfit to participate
in any of these. Petitioner cites the case of Steven Herlich, DAB
CR197 (1992), at 6-7, in support of the proposition that the regulations
do not establish criteria for evaluating the reasonableness of exclusions,
and that ALJs must use the criteria established by the appellate panel
to evaluate the reasonableness of exclusions. She further suggests that
the application of such criteria in Herlich, led to a reduction
of a 20-year exclusion imposed by the I.G. to 10 years. Petitioner's reply
brief, at 5. I find Petitioner's argument unpersuasive. In Herlich, the ALJ held that the regulations contained
in Part 1001 of the new regulations, particularly 42 C.F.R. � 1001.102,
were not intended by the Secretary to govern hearings as to the reasonableness
of exclusion determinations(5). Id.
at 8. The ALJ further stated that even if the new regulations governed
such hearings, they did not apply in cases involving exclusion determinations
made prior to the regulations' publication date(6).
Id. Thus, the ALJ considered the regulatory criteria included in
42 C.F.R. � 1001.114 (1991) in making his determination. The ALJ further
considered the criteria established by the appellate panel to evaluate
the reasonableness of the length of the exclusion imposed by the IG(7).
Id. As a result, the ALJ concluded that the 20-year exclusion imposed
by the IG was excessive and reduced the exclusion to 10 years. Id.
at 1. The regulatory criteria and appellate panel's criteria
for evaluating the reasonableness of the IG's determination established
in Herlich is no longer relevant and thus not applicable to this
case. Here, the IG's exclusion occurred in 1999. The current regulatory
criteria to be employed by the IG in determining the length of exclusions
is contained in 42 C.F.R. � 1001.102 (1999). Additionally, since Herlich,
the appellate panel has established new criteria for evaluating the reasonableness
of the IG's determination regarding the length of exclusion. See
Joann Fletcher Cash, DAB No. 1725 (2000). The ALJ must determine
whether the length of exclusion is unreasonable based on the facts
as found by the ALJ. Id. at 17, n.9. In order to make that
determination, an ALJ must consider whether the amount of time (length
of the exclusion) chosen by the IG is within a reasonable range. Id.
Thus, to determine if the IG's length of exclusion is unreasonable, an
ALJ must consider evidence submitted by the parties pertaining to the
aggravating and mitigating factors contained in 42 C.F.R. � 1001.102,
and if the IG's decision is within a reasonable range, given the facts
found by the ALJ. For the reasons previously stated above and in light of my consideration of the current regulatory criteria and the appellate panel's criteria, I find that the 10-year exclusion imposed by the I.G. was within a reasonable range of possible exclusion periods given the circumstances of this case, in which two aggravating factors were present and no mitigating factors. The 10-year exclusion is a legitimate remedial remedy consistent with the purpose of section 1128 of the Act. That purpose is to protect federally funded health care programs and their beneficiaries and recipients from untrustworthy individuals.
CONCLUSION Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because she was convicted of a criminal offense related to the delivery of an item or service under Medicare or under any State health care program. The I.G. was also justified in lengthening the period of exclusion due to the existence of aggravating factors. The 10-year exclusion is therefore sustained. |
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JUDGE | |
Jose A. Anglada Administrative Law Judge |
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FOOTNOTES | |
1. The transcript from the criminal sentencing hearing was offered as P. Ex. 5. 2. Petitioner consented to a waiver of indictment and agreed to prosecution by Criminal Information. 3. ". . . [a] penalty or coercive measure that results from failure to comply with a law, rule, or order." Petitioner's reply brief, at 7. 4. The petitioner's California criminal conviction occurred in 1992 and the I.G. excluded the petitioner in 1993. The petitioner's Colorado criminal conviction occurred in 1991; however, the I.G. didn't exclude the petitioner based on the underlying conviction in Colorado until 1994. 5. On January 29, 1992, the Secretary published new regulations which established criteria, to be employed by the IG, to determine the length of exclusions to be imposed pursuant to sections 1128(a) and (b) of the Act. 42 C.F.R. Part 1001; 57 Fed. Reg. 3298, 3330-3341. These regulations included a section establishing criteria to be employed by the IG to determine the length of exclusions to be imposed pursuant to section 1128(a)(1). 42 C.F.R. � 1001.102; 57 Fed. Reg. 3331. 6. The IG notified Petitioner of his 20-year exclusion on February 15, 1991; prior to the effective date (January 29, 1992) of the new regulations. Id. at 1. 7. The criteria established by the appellate panel in Robert Matesic, R. Ph., d/b/a/ Northway Pharmacy, DAB No. 1327 (1992) included: (1) the nature of the offenses committed by the provider, (2) the circumstances surrounding the offense, (3) whether and when the provider sought help to correct the behavior which led to the offense, (4) how far the provider has come toward rehabilitation, and (5) any other factors relating to the provider's character and trustworthiness. | |