Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
|
IN THE CASE OF | |
Salvacion Lee, M.D., |
DATE: June 24, 2002 |
- v - |
|
The Inspector General
|
Docket No.C-02-054 Decision No. CR920 |
DECISION | |
DECISION I affirm the Inspector General's (I.G.'s) determination to exclude Salvacion Lee, M.D. (Petitioner) under section 1128(a)(1) of the Social Security Act (Act) for a five-year minimum mandatory period from participation in Medicare, Medicaid, and all other federally funded health care programs. BACKGROUND By letter dated September 28, 2001, the I.G. notified the Petitioner that she was to be excluded, for a period of five years, from participation in the Medicare, Medicaid, and all other federal health care programs as defined in section 1128B(f) of the Act. In that letter, the I.G. explained that Petitioner was being excluded, pursuant to section 1128(a)(1) of the Act, based on her conviction in United States District Court for the Central District of California of violating 18 U.S.C. � 371 by conspiring to commit bribery. The I.G. relied on section 1128(a)(1) of the Act, which provides for mandatory exclusion from participation in federal health programs of "[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII (Medicare) or a State health care program."By letter dated October 11, 2001, Petitioner
timely sought review of the I.G.'s action. The sufficiency of Petitioner's
hearing request has not been challenged, and no other jurisdictional issues
have been raised or become apparent to me. On November 27, 2001, I held a telephone
conference with the parties to discuss the issues presented by this case
and the procedures best suited for addressing them. The parties agreed
to have the case decided on written submissions in lieu of an in-person
hearing. The I.G. submitted a motion for summary judgment and brief in
support (I.G. Br.). Petitioner submitted a brief in response (P. Br.)
to the I.G.'s motion. The I.G. submitted a reply (I.G. Reply Br.) to Petitioner's
response, and Petitioner submitted a sur-reply (P. Reply Br.) to the I.G.'s
reply. The I.G. filed six exhibits (I.G. Exs. 1-6) as part of her submission;
Petitioner filed one exhibit (P. Ex. 1). In the absence of objection by
either side, I admit I.G. Exs. 1-6 and P. Ex. 1. Based on the documentary evidence, the applicable law, and the arguments of the parties, I enter summary judgment in favor of the I.G. and thereby affirm her determination to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs for a period of five years. ISSUES The legal issues before me in this case are:
CONTROLLING STATUTES AND REGULATIONS Section 1128(a)(1) of the Act, 42 U.S.C.
� 1320a-7(a)(1), requires the exclusion from participation in Medicare,
Medicaid, and all other federal health care programs of any individual
or entity convicted of a criminal offense related to the delivery of an
item or service under Title XVIII of the Act (the Medicare program) or
under any State health care program. This exclusion is mandatory and must
be imposed for a minimum of five years. Section 1128(c)(3)(B) of the Act.
The Act defines "conviction" as including those circumstances "when a
judgment of conviction has been entered against the individual or entity
by a Federal, State, or local court." Section 1128(i)(1) of the Act. This
definition is repeated at 42 C.F.R. � 1001.2. Petitioner does not contest
that her conviction falls within the statutory and regulatory definition. The minimum mandatory five-year exclusion
is subject to enlargement: 42 C.F.R. � 1001.102 allows the I.G. to extend
the five-year period if certain aggravating factors are demonstrated.
If the I.G. proposes to rely on any of the specified aggravating factors
to seek an enlargement of the exclusionary period, then the subject of
the proposed exclusion is permitted to assert the existence of certain
mitigating factors and thereby seek to limit the exclusion to the five-year
mandatory minimum. Those aggravating and mitigating factors are set out
in detail at 42 C.F.R. �� 1001.102(b)(1)-(9) and (c)(1)-(3). However,
the I.G. has not sought to enhance the five-year mandatory minimum exclusion
in this case, and for that reason the existence of aggravating or mitigating
factors is of no direct importance in the record before me. Title 18 of the United States Code, entitled
"Crimes and Criminal Procedure," establishes, defines, and classifies
most activity proscribed as criminal under federal law. 18 U.S.C. � 371
addresses the crime of conspiracy, and provides:
18 U.S.C. � 201 addresses the crime of bribery of public officials. In relevant part, it provides:
FINDINGS OF FACT
AND CONCLUSIONS OF LAW I find and conclude as follows: 1. At all material times, Petitioner Salvacion
Lee was a physician licensed to practice medicine in the State of California.
I.G. Ex. 4; P. Ex. 1. 2. At all material times, Petitioner was
a Medicare participating physician, and was authorized to submit claims
for services provided and delivered to Medicare beneficiaries. I.G. Ex.
4; P. Ex. 1. 3. At all material times, the Health Care
Financing Administration (HCFA) was responsible for administering the
Medicare program, and had designated Transamerica Occidental Life Insurance
Company (Transamerica) to act as its fiscal agent in processing and paying
Medicare claims on HCFA's behalf in southern California. I.G. Ex. 4. 4. At all material times, Reggie Sells
was an auditor in Transamerica's Medicare Fraud Investigations Unit. I.G.
Ex 4. 5. Beginning in approximately August 1996,
Petitioner devised and executed a scheme whereby she submitted claims
to Medicare via Transamerica for respiratory therapy services provided
to Medicare beneficiaries allegedly performed in compliance with Medicare
program requirements, but in fact not performed in compliance with such
requirements. Those claims were false and were known by Petitioner to
be false when she submitted them for payment. P.
Ex.1. 6. On August 5, 1997, Transamerica determined
that Petitioner had been overpaid for her claims for Medicare services
provided pursuant to the scheme described above in Finding 5, in the approximate
amount of $173,103.98. P. Ex. 1. 7. Beginning on or about September 1997
and continuing until approximately November 1997, Petitioner combined,
conspired, confederated, and agreed with Bernie Ramos to pay a bribe to
Reggie Sells, with the intent to influence Sells substantially to understate
the amount of Medicare overpayments which Petitioner would be required
to repay. The conspiracy embodied the underlying facts, objects, means,
and overt acts set out in Count I of the Superseding Indictment described
below in Finding 8. I.G. Ex. 4; P. Ex. 1. 8. Petitioner was named as a defendant
in a Superseding Indictment handed up on January 29, 1999, in United States
District Court for the Central District of California. That Superseding
Indictment was filed as United States v. Salvacion Lee, CR 98-518(A),
and charged Petitioner in two counts: Count I charged the crime of Conspiracy,
in violation of 18 U.S.C. � 371; Count II charged the crime of Bribery
of a Public Official, in violation of 18 U.S.C. � 201(b)(1). I.G. Ex.
4. 9. Petitioner pleaded guilty to Count I
of the Superseding Indictment in CR 98-518(A), and her guilty plea was
accepted by the court, on August 12, 1999. I.G. Ex. 6. 10. Judgment of conviction was entered
against Petitioner, and she was sentenced on her plea of guilty, on Count
I of the Superseding Indictment in CR 98-518(A) on September 1, 2000.
I.G. Exs. 5, 6. 11. Petitioner's plea of guilty, as described
above in Finding 9, and the entry of judgment of conviction and sentence
as described above in Finding 10, constitute a "conviction" within the
terms of section 1128(i)(1), (2), and (3) of the Act, 42 U.S.C. � 1320a-7(i)(1),
(2), and (3). 42 C.F.R. � 1001.2. 12. By letter dated September 28, 2001,
the I.G. notified Petitioner that she would be excluded for a term of
five years from participation in Medicare, Medicaid, and all federal health
care programs, pursuant to the authority set out in section 1128(a)(1)
of the Act. I.G. Ex. 1. 13. On October 11, 2001,Petitioner perfected
her appeal from the I.G.'s action by filing a timely hearing request.
I.G. Ex. 2; 42 C.F.R. � 1005.2(c). 14. Section 1128(a)(1) of the Act authorizes
the exclusion of any individual or entity convicted of a criminal offense
related to the delivery of an item or service under the Medicare program
from participation in Medicare, Medicaid, and all federal health care
programs. 42 U.S.C. � 1320a-7(a)(1). 15. A conviction of a criminal offense
is related to the delivery of an item or service under Medicare if there
is a nexus or common-sense connection between the criminal offense on
which the conviction is based and the delivery of an item or service under
the Medicare program. Berton Siegel, D.O., DAB No. 1467, at 5
(1994). 16. A nexus and a common-sense connection
exists between the criminal offense to which Petitioner pleaded guilty,
as noted above in Finding 9, and on which plea she was convicted and sentenced,
as noted above in Finding 10, and the delivery of an item or service under
the Medicare program. 17. Because of the nexus and common-sense
connection noted above in Finding 16, Petitioner's conviction for violation
of 18 U.S.C. � 371 relates to the delivery of an item or service under
the Medicare program within the meaning of section 1128(a)(1) of the Act. 18. Once an individual has been convicted
of a program-related criminal offense within the meaning of section 1128(a)(1)
of the Act, exclusion for a minimum term of five years is mandatory. Section
1128(c)(3)(B) of the Act; 42 U.S.C. � 1320a-7(c)(3)(B). 19. The I.G. properly excluded Petitioner
from participation in Medicare, Medicaid, and all other federal health
care programs for five years. 20. There are no remaining disputed issues
of material fact and summary judgment is therefore appropriate in this
matter. DISCUSSION As I have noted above, there are two issues
before me in this case: first, whether Petitioner's conviction authorizes
the I.G. to exclude Petitioner from Medicare, Medicaid, and all other
federal health care programs pursuant to section 1128(a)(1) of the Act;
and second, whether the I.G. correctly invoked the terms of section 1128(c)(3)(B)
of the Act, thereby imposing the mandatory five-year term of exclusion.
Although I have formulated them as distinct propositions for purposes
of this discussion, they are in truth both to be resolved by deciding
this fundamental question: is the criminal act to which Petitioner pleaded
guilty and of which she was convicted a criminal offense related to the
delivery of an item or service under Title XVIII (Medicare) or a State
health care program? If it is such an offense, as the I.G. asserts, then
the terms of section 1128(a)(1) of the Act apply, and certain well-settled
consequences follow that application. If Petitioner's conviction and guilty
plea cannot be characterized as such an offense, as Petitioner vigorously
maintains, then the terms of section 1128(a)(1) do not apply, and the
I.G.'s proposed exclusion of her cannot be supported by the authority
of that section and section 1128(c)(3)(B) of the Act. Petitioner believes
that her conviction exposes her only to the permissive exclusion permitted
by section 1128(b) of the Act. Petitioner does not deny here that she
was convicted of a criminal offense. P. Br. at 3-4. She admits the fact
of her guilty plea, but insists that the conviction is unrelated to the
delivery of an item or service under the Medicare program. Petitioner
relies on the fact that the specific crime of which she was convicted
was the crime of conspiracy, as that crime is defined at 18 U.S.C. � 371,
and not one of the several specific prohibitions against the submission
of false or fraudulent claims in federally-protected health programs,
such as those enumerated in 42 U.S.C. � 1320a-7(b), et seq. She
characterizes her criminal conduct as directed "against the administrative
and/or judicial system, not against [the] Medicare program." P. Br. at
4; P. Reply Br. at 4. On that theory she argues that the mandatory exclusion
proposed by the I.G. is without legal foundation:
P. Br. at 4. Petitioner is correct in her assertion
that the examples of criminal conduct she cites lie well within the ambit
of section 1128(a)(1), and she is just as correct in maintaining that
unless a conviction falls within the reach of section 1128(a)(1), one
or more of the permissive exclusion mechanisms of section 1128(b) may
apply and may operate to ameliorate or completely eliminate her actual
exclusion from participation in the Medicare and Medicaid programs. She
is mistaken, however, in every other element of her position. Her first error is her assumption, implicit in the language noted above, that section 1128(a)(1) is applicable only to cases of expressly charged Medicare and Medicaid fraud, and only in situations of direct abuse of the victim program by the convicted individual. Section 1128(a)(1) authorizes mandatory exclusion for a "criminal offense related to the delivery of an item or service under Title XVIII (Medicare) or a State health care program." Petitioner reads the limits of this language as precisely coterminous with the crimes identified in 42 U.S.C. �� 1320a-7(b) et seq. Her position is altered somewhat in her reply brief, where she concedes that section 1128(a)(1) would reach the conduct of care givers who misappropriated the medications of Medicaid patients (P. Reply Br. at 3-4), but the fundamental tenet of her position is this:
P. Br. at 3. This first error in Petitioner's reading
of section 1128(a)(1) is the result of her failure to appreciate the effect
of a long series of decisions that addresses the question directly. Contrary
to the position taken here by Petitioner, it is a settled point that she
" . . . need not be convicted of Medicaid fraud to be subject to exclusion
under section 1128(a)(1). Instead, it is sufficient if the delivery of
a Medicaid service is an element in the chain of events giving rise to
the offense." Donald J. Purcell, II, M.D. DAB CR572 (1999); see
also Tanya A. Chouke, R.N., DAB CR865 (2002); Dan Anderson,
DAB CR855 (2002); Larry W. Dabbs, R.Ph., et al., DAB
CR151 (1991). I will discuss the method by which an Administrative Law
Judge (ALJ) must review and assess that chain of events presently, but
for now it will suffice to note that both ALJs and appellate panels of
the Departmental Appeals Board (DAB) have held that a conviction may be
related to the delivery of an item or service under Medicaid or Medicare
where financial misconduct against the program had or could have had an
impact on the delivery of health care items or services. Purcell,
supra, at 5; see also Berton Siegel, D.O., DAB No.1467
(1994); Dabbs, supra; Napoleon S. Maminta, M.D., DAB
No. 1135 (1990). It is not required that the misconduct involve a direct
interaction between the criminal and program-funded patient care; the
critical link in the chain of events can be present "despite the fact
that Petitioner may not have provided items or services to Medicaid recipients
personally or made reimbursement claims for those items or services."
Rosaly Saba Khalil, M.D., DAB CR353 (1995). The second error in Petitioner's understanding
of section 1128(a)(1) is her failure to realize that its operation is
mandatory. She earnestly advances her argument: "Exclusions under section
1128(a)(1) of the Act for a minimum of five years is [sic] unreasonable,
harsh and unjust." P. Br. at 8. Petitioner goes on to assert that the
"Permissive standard must be applied in this case. First, the Department
may apply criminal sanctions, civil monetary penalties, and exclusion.
The Department has applied all three. It should carefully consider
the third method and only apply the permissive exclusion, because there
is no evidence that Dr. Lee poses a risk to the Medicare or Medicaid program
or its beneficiaries." P. Br. at 9. In pressing this argument, she simply
fails to acknowledge the settled law of this forum. It is a firmly-established principle that
once an individual's conviction is found to have been "related to the
delivery of an item or service under title XVIII or a State health care
program," and thus to lie within the terms of section 1128(a)(1), the
imposition of the five-year minimum exclusion dictated by section 1128(c)(3)(B)
of the Act is mandatory, and is beyond the authority of the I.G. or an
ALJ to reduce, modify, or suspend. The clearest possible language has
been used to make this point: "[w]e therefore affirm the ALJ conclusion
. . . that once an individual has been found to have been convicted of
a program-related criminal offense under section 1128(A)(1) of the Act,
exclusion is mandatory." Lorna Fay Gardner, DAB No. 1733 (2000);
see also, Tanya A. Chuoke, R.N., supra; Douglas
Schram, R.Ph., DAB No. 1372 (1992); Napoleon S. Maminta, supra;
Dan Anderson, supra; Jitrenda C. Shah, M.D., DAB CR720
(2000). Even in situations where the underlying conviction could be plausibly
argued to fall within both section 1128(a)(1) and one or more of the permissive-exclusion
provisions of section 1128(b)(1)-(14), the rule is clear: the mandatory
exclusion for a minimum of five years is required and must be imposed.
Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom.
Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990); Douglas
Schram, R.Ph., supra; Brenda J. Motley, DAB CR414 (1996). Her failure to understand the mandatory
operation of sections 1128(a)(1) and 1128(c)(3)(B) leads directly to Petitioner's
third error. Because she considers the I.G. and the ALJ to have a choice
between the mandatory exclusion mechanism and the permissive exclusion
remedy, she urges that the latter's application, and presumably its less-stringent
sanctions, should be invoked as a matter of lenity, equity, and constitutional
protection. P. Br. at 9, 11; P. Reply Br. at 5. As a matter of law, none
of those considerations afford her position support in this forum. The application in exclusion proceedings
of the principle of lenity - the notion that a statute ought to be read
as narrowly as possible in order to give its effect the least-severe results
- has been explicitly considered and rejected by an appellate panel of
the DAB. Writing in Douglas Schram, R.Ph., supra, the DAB rejected
the application of the principle of lenity in exclusion proceedings for
two reasons entirely independent of the mandatory-rule concept. First,
the DAB noted that the principle itself is a creature of criminal law,
and reiterated the point that I will repeat: exclusion proceedings are
civil in nature and remedial in goal, not criminal and punitive. The panel
also observed that even in the context of criminal law, the principle
of lenity is to be applied only in situations where the statute at issue
is ambiguous and susceptible of more than one meaning. The statutory framework
providing for exclusion under section 1128(a)(1), wrote the DAB, is not
ambiguous. Nor do these proceedings allow the principles
of equity a forum or a pulpit. In spite of Petitioner's assertions that
"Equity is a court of conscience. It is unconscionable to prevent Dr.
Lee from using her Medicare Provider Number in order to serve the local
community . . . . Equity abhors forfeiture," (P. Br., at 11), those arguments
simply do not raise an issue that I may consider. Tanya A. Chouke,
R.N., supra; Mark Zweig, M.D., DAB CR563 (1999);
Joshua Yaw Boateng, D.P.M., DAB CR365 (1995); Mark Gventer,
D.P.M., DAB CR173 (1992); Mark E. Silver, D.P.M., DAB CR139
(1991). Constitutional challenges to exclusions
are well-understood to be beyond an ALJ's jurisdiction, and the regulatory
basis for this proceeding makes that understanding explicit. 42 C.F.R.
� 1005.4(c)(1). That rule appears frequently in the case law, e. g., Mark
Zweig, M.D., supra, and Roberta E. Miller, DAB
CR367 (1995), in answering the assertion that a petitioner's exclusion
amounted to double jeopardy. Petitioner makes that argument in all but
name (P. Br., at 9-10), but even in that form it cannot avoid the effect
of a remarkably-clear line of authority, beginning with Douglas Schram,
supra, and continuing through Joann Fletcher Cash, DAB
No. 1725 (2000) and Dr. Darren J. James, D.P.M., DAB CR860 (2002).
That authority rejects the proposition that a constitutional issue is
raised in this context, because the exclusion remedy is civil and remedial,
not criminal and punitive like Petitioner's underlying conviction. As
purely remedial sanctions, exclusions such as this one violate none of
the Constitution's protections against abuse of the government's power
to punish, such as its protection against double-jeopardy prosecutions. That is the also the lesson to be drawn
from Hanlester Network v. Sullivan, 51 F.3d 1390 (9th Cir., 1995)
and Manocchio v. Kusserow, 961 F.2d 1539 (11th Cir. 1992). Petitioner's
reliance on those cases (P. Br., at 9-10; P. Reply Br., at 5) is misplaced,
and the correct principle was elucidated by the DAB in Schram:
"In Manocchio the court looked to the purposes served by the exclusion
sanction. It concluded that the legislative history demonstrated that
the primary goal of the legislation was to protect present and future
Medicare beneficiaries from abusers of these programs." The DAB relied
on Greene v. Sullivan, supra, to reach its conclusion.
But the inquiry need not end there; if one harbored any remaining doubt
that a double-jeopardy claim is inapposite in exclusion proceedings, one
need only study ALJ C. C. Hughes' searching and thoughtful discussion
of the topic in Rosemary Oteri, DAB CR775 (2001), and her review
there of Joann Fletcher Cash, supra, and Hudson
v. United States, 522 U.S. 93 (1997). Petitioner urges that the "Department [of
Health and Human Services] must consider mitigating factors in deciding
the length of the exclusion." P. Br. at 10. Whether in the context of
a mandatory or a permissive exclusion, her effort to establish "mitigating
factors" is her fourth error. At its first level, it is simply outside
the legal framework of this case. As I noted earlier, the I.G. has not
attempted to enlarge or enhance the term of exclusion beyond the minimum
by asserting the existence of any of the aggravating factors listed at
42 C.F.R. � 1001.102(b)(1)-(9). Unless the I.G. does successfully invoke
one or more of those factors, an ALJ may not consider factors in mitigation.
42 C.F.R. � 1001.102(c). " . . . [O]nly when aggravating factors justify
an exclusion for a period of longer than five years, may any mitigating
factors be considered as a basis for reducing the period of exclusion
. . . ." Dr. Darren J. James, D.P.M., supra. But at
its deeper level, Petitioner's suggestion of mitigating factors misses
the point that the only factors that an ALJ may ever consider are very
specifically defined in 42 C.F.R. � 1001.102(c)(1)-(3). Evidence or the
suggestion of factors not specifically enumerated by regulation cannot
be considered in mitigation of exclusion. Valerie Baker, DAB
CR882 (2002); Narendra M. Patel, M.D., DAB CR631 (1999). Petitioner's fifth error appears to be
more artful; she repeatedly offers an extremely nearsighted - or disingenuous
- view of the aim of the conspiracy she admitted in her guilty plea. Twice
she describes it in identical language: "[t]he conspiracy had one aim
- to avoid the administrative process, rather than bribe a beneficiary.
The conviction related, to the scheme of solving disputes through an administrative
procedure. The crime was related to the improper method of dispute resolution."
P. Br. at 4; P. Reply Br. at 4. Avoiding an administrative hearing may
very well have been part of Petitioner's overall strategy, but that is
hardly the ultimate desideratum she had in mind, and certainly
not the goal set out in the charge to which she pleaded guilty. To put
the point another way: avoidance of the administrative review of her false
Medicare claims may have been an incidental part of what she hoped to
accomplish, but her real goal in conspiring with Ramos was to bribe Sells,
who was auditing those false claims, and to suborn Sells' approval of
those false claims in order that she might keep Medicare funds paid to
her improperly on the basis of those false claims. By conspiring to bribe
Sells, Petitioner sought to end abruptly and with finality the inquiry
into those claims, and thus to obviate the need for any administrative
hearing whatsoever. At this point, the discussion must return to and consider in detail the touchstone in this case: whether " . . . the delivery of a Medicaid service is an element in the chain of events giving rise to the offense." Donald J. Purcell, II, M.D., supra. The cases provide a lucid expression of the test, and the first expression of the test's specific language is found in a decision that narrowed, rather than expanded, the reach of section 1128(a)(1). In Berton Siegel, D.O., supra, the DAB was asked to affirm a rule that financial misconduct in connection with a protected health program was, in itself, sufficient to invoke section 1128(a)(1). The DAB declined to let the broad reading stand, and wrote: " . . . finding that an offense is program-related financial misconduct is insufficient without also finding a nexus to the delivery of items or services under one or more covered programs." Instead, the DAB carefully set out the test it insisted be applied:
Berton Siegel, D.O., supra.
See, e. g., Thelma Walley, DAB No. 1367 (1992); Niranjana
B. Parikh, M.D., et al. DAB No. 1334 (1992). It is of no small import that the petitioner Dr. Siegel was convicted in State court, for a State offense defined as "facilitation of theft," and was based on his complicity in a scheme to divert Medicaid funds to pay for non-Medicaid-eligible equipment. The specific acts committed by Dr. Siegel were countersigning, or causing others to countersign, checks drawn on his Medicaid-funded organization to pay for ineligible equipment. The DAB saw no material attenuation between Dr. Siegel's crime and the delivery of items or services under Medicaid:
Berton Siegel, supra. That expression of the test has been applied with approval in the following form, set out in the ALJ's still-undisturbed language in Tanya A. Chuoke, R.N., supra:
Tanya A. Chuoke, R.N., supra. Section 1128(a)(1) can be invoked in situations
well beyond the immediate boundaries of 42 U.S.C. � 1320a-7(b). The statute's
reach is demonstrated by its application to petitioners convicted under
State criminal statutes for misapplying Medicaid patients' private funds
and property, Brenda J. Motley, supra; Roberta E.
Miller, supra; Jerry L. Edmonson, DAB CR59; by
its application to a petitioner convicted of not reporting a co-defendant's
fraudulent dealings with the Medicaid program, in violation of the federal
prohibition against misprision of a felony, 18 U.S.C. � 4, Andrew
Anello, DAB No. 1803 (2001); by its application to a petitioner convicted
in State court of a State crime relating to improper access to State Medicaid
records, Sabina E. Acquah, DAB CR480 (1997); and by its application
to a petitioner who, finding himself confronted with inquiries into his
billing Medicaid for services provided by unauthorized contractors, falsified
State records in an effort to conceal his billing activities and was convicted
for that crime in State court, Donald J. Purcell, II, M.D.,
supra. Each of these cases illustrates the correct application of
the principle articulated in Siegel; the ALJ must examine the
entire record, reviewing all facts and circumstances that illuminate the
chain of events giving rise to the offense, and then determine whether
a common-sense connection exists between the offense and the delivery
of an item or service under a covered program. Petitioner's Ex. 1 is the text of the January
20, 2000 Decision of ALJ A. Weir, III. It reflects the administrative
proceedings that grew out of the overpayments to Petitioner, and I emphasize
here that this exhibit was tendered by Petitioner, and was relied on extensively
by her in setting forth her position. P. Br. at 3, 4, 6, 9, 11; P. Reply
Br. at 2, 5. To the extent that this exhibit is extrinsic to the actual
United States District Court documents, I believe that it is both reliable
and credible to show the underlying facts of Petitioner's specific conduct
which formed the basis of her conviction, and that its reliability and
credibility form an entirely independent basis for its admission here.
Narendra M. Patel, supra; Tanya A. Chuoke, R.N.,
supra ; Donald J. Purcell, II, M.D., supra. There is no dispute that Petitioner pleaded
guilty to the offense set out in I.G. Ex. 4, but in any case, the dates,
docket numbers, district judge's initials, attorneys' names, and internal
references in I.G. Ex. 5 and I.G. Ex. 6 fully and conclusively establish
that the crime to which Petitioner pleaded guilty, of which she was found
guilty, and for which she was sentenced is set out in I.G. Ex. 4, at 1-7.
Those pages comprise the "Introductory Allegations," " Object of the Conspiracy,"
"Means of the Conspiracy," and "Overt Acts" charged by the grand jury
and admitted by Petitioner in Count I of the Superseding Indictment. As
the statutory language found in 18 U.S.C. � 371 makes perfectly clear,
the essential elements of the federal crime of conspiracy include an agreement,
an illegal object or goal, and at least one overt act. In admitting her
violation of 18 U.S.C. � 371, Petitioner admitted all of the charge's
allegations concerning each of those elements. The admitted allegations establish the
role of Transamerica as HCFA's fiscal agent in processing and paying Medicare
claims, and Petitioner's authorization to submit claims to Transamerica
for services provided to Medicare beneficiaries. The admitted allegations
establish that Transamerica was authorized to audit Medicare claims submitted
by Medicare providers, with particular reference to determining whether
providers' fraud or billing errors had caused them to receive payments
to which they were not entitled. The admitted allegations place the co-conspirator
Bernie Ramos in the position of an "insider," a go-between who could and
did represent the recipients of challenged Medicare payments before his
former employer, Transamerica; and those admitted allegations establish
Reggie Sells as an auditor in the Medicare Fraud Investigations Unit at
Transamerica. I.G. Ex. 4, at 2-3. The importance of the relationships set
out in the Superseding Indictment can be appreciated on its face, but
a good deal of flavor is added to that appreciation if P. Ex 1 is examined.
What emerges from ALJ Weir's decision is that Petitioner reached an agreement
with a non-eligible health care provider to bill Medicare improperly for
services. The non-eligible provider and its employees would perform services,
and Petitioner would bill Medicare for them as if she had performed them
herself; a fee-splitting arrangement allowed both parties to profit illegally.
P. Ex.1, at 7. Transamerica's audit staff eventually became suspicious,
and concluded that Petitioner had been overpaid for Medicare services.
I.G. Ex. 1, at 8. Petitioner, learning that Transamerica believed that
she had been improperly paid, took two steps: first, she requested a hearing
with Transamerica to contest the overpayment (P. Ex.1, at 1-2), and she
arranged for Ramos to approach Sells, whom Ramos apparently assumed was
assigned to Petitioner's audit. P. Ex. 1, at 2, 8, 9. Sells told his supervisors
of the bribe offer, and later cooperated with the FBI in recording most
of the contacts among Petitioner, Ramos, and himself. P. Ex. 1, at 8-9. The Superseding Indictment's language makes
the rest of the case supporting Petitioner's exclusion plain. Petitioner
and Ramos agreed to "corruptly pay a bribe to a person acting for or on
behalf of an agency of the United States, with the intent to influence
that person to do an act in violation of his lawful duty, namely, to substantially
understate the amount of Medicare overpayments which defendant SALVACION
LEE had to repay Transamerica . . . ." I.G. Ex 4, at 4. The plan called
for Ramos, acting on Petitioner's behalf, to offer a bribe to Sells, the
auditor. According to the conspiracy's modus operandi,
Sells would then use his role as auditor to manipulate - or "substantially
understate," in the Indictment's specific language - the amount of Medicare
overpayments that Petitioner would have to repay. I.G. Ex. 4, at 4. The
Indictment recites how a series of meetings began in mid-September, 1997,
in which Ramos discussed the details of the bribe's amount with Sells,
asserting that the amount Sells could expect was related directly and
proportionally to the amount by which Sells could reduce the Medicare
overpayment. I.G. Ex. 4, at 4. Over the course of the meetings, Ramos
explained to Sells that the Medicare overpayment was approximately $173,000
(I.G. Ex. 4, at 4), and cautioned Sells that Petitioner, although able
to provide some limited documentation, could support only between 25 and
40 percent of her claims for Medicare services. I.G. Ex. 4, at 4, 5. Ramos named the sum Petitioner was willing
to pay on November 4, 1997, and three days later Petitioner met Ramos
and Sells at her medical office, where she demanded that Sells "just lower�a
little bit" the amount of Medicare funds she would have to repay, and
promised Sells that the payoff was near. I.G. Ex. 4, at 6. Three more
days after that, Ramos and Sells met Petitioner at her medical office
again. This time, Petitioner paid Sells the agreed-upon sum of $10,000
cash and received from him two letters: the first was ostensibly from
Transamerica's Medicare Fraud Investigations Unit, and it stated that
the suspension of her Medicare payments had been lifted; the second was
purportedly from Transamerica's Overpayment Collections Team, and it represented
that the $8,360.57 overpayment calculated by the Medicare Fraud Investigations
Unit had been recovered and that the investigation was complete. I.G.
Ex. 4, at 6-7. Petitioner relied exclusively on the conspiracy
to defeat Transamerica's effort to recover Medicare overpayments and to
retain the Medicare funds gained by her fraudulent billings for Medicare
services: although she had filed a request for an administrative hearing
with Transamerica on September 3, 1997, she withdrew that request on October
17, 1997. P. Ex. 1, at 2. The admitted date of Ramos' first contact with
Sells was September 11, 1997. I.G. Ex. 4, at 4. The sequence is significant
because it establishes that the conspiracy was well underway by mid-October,
which explains why Petitioner withdrew her request for the administrative
hearing with Transamerica: Sells told her to do so in order to allow him
to "resolve" the audit in his own fashion. P. Ex. 1, at 9. The chain of events giving rise to the
offense of which Petitioner stands convicted is easily appreciated. Petitioner
systematically submitted fraudulent claims for services to Medicare beneficiaries.
She received payment of Medicare funds for those fraudulent claims and
retained some of those proceeds for herself. The Medicare program's fiscal
agent became suspicious of those false claims and determined to recover
the Medicare funds fraudulently obtained by Petitioner. When Petitioner
learned that she might have to repay those Medicare funds, she first requested
an administrative hearing with the fiscal agent to contest the overpayment,
but then resolved to bribe the fiscal agent's auditor Sells, whom she
believed to be assigned to her case. Her purpose in bribing Sells was
to induce him unlawfully to reduce or eliminate the amount of Medicare
funds she would be required to repay. She agreed with the go-between Ramos
to effect the bribe, and met with Ramos and Sells to settle the amount
of the bribe and the quid pro quo. At some point, with the aim
of aiding what she thought was Sells' scheme to manipulate the audit,
she withdrew her request for an administrative hearing with the fiscal
agent. Finally, in return for a cash payment tendered directly from Petitioner
to Sells, Petitioner received from him documents purporting to relieve
her of any obligation to repay the Medicare funds she had obtained by
fraud. The nexus between Petitioner's offense and the delivery of an item or service is far stronger than a simple common-sense connection: the facts set out above describe a situation in which the delivery of services, the false billings for those services, and Petitioner's scheme to retain the proceeds of those false billings are the essential - and necessary - components of the offense. Petitioner abused the Medicare program and its plan for the delivery of services by falsely claiming payment for services delivered by ineligible providers. She received payment for those ineligible services. When faced with an official investigation, she determined to retain those fraudulently-obtained Medicare funds through illegal means, and directed her efforts at subverting the investigation of her fraudulent claims by the Medicare program's fiscal agent. Petitioner's hoped-for result in the conspiracy was concealment from the Medicare fiscal agent the fact that her claims to Medicare were fraudulent, which result would allow her to retain Medicare funds she had received for services not delivered as required by the program. The nexus links improper delivery of services, illegal billing for those services, a desire to retain the illegal proceeds of those illegal billings for improper services, and the conspiratorial effort to conceal the improper delivery of the services as a means to retaining Medicare funds paid for them. The facts recall the DAB's analysis in Siegel, D.O., supra:
Siegel, D.O., supra. There exists a patent nexus between the
criminal conspiracy that Petitioner admitted and the delivery of services
under the Medicare program. The chain of events disclosed in this record
establishes a remarkably strong common sense connection between her abuse
of the Medicare program, her improper receipt of Medicare funds, and her
efforts to conceal her misconduct and retain those Medicare funds as detailed
in Count I of the Superseding Indictment to which she pleaded guilty.
Petitioner's conviction is therefore correctly understood to be related
to the delivery of an item or service under Medicare, and for that reason
subject to the terms of section 1128(a)(1) of the Act. Because the terms
of section 1128(a)(1) govern this situation, the I.G. correctly invoked
the mandatory five-year term of exclusion required by section 1128(c)(3)(B)
of the Act. CONCLUSION For the reasons set forth above, I grant summary judgment in favor of the I.G., and thereby sustain the I.G.'s exclusion of Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for a term of five years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1). |
|
JUDGE | |
Richard J. Smith Administrative Law Judge |
|