CASE | DECISION | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

S. Ramachandran Nair M.D.,

Petitioner,

DATE: January 05, 2004
                                          
             - v -

 

The Inspector General

 

Docket No.C-03-671
Decision No. CR1127
DECISION
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DECISION

I find that the Inspector General (I.G.) is authorized to exclude Petitioner, Ramachandran Nair, M.D., pursuant to section 1128(a)(1) of the Social Security Act (Act), from participating in Medicare and all other federally funded health care programs for a period of at least five years. I find to be unreasonable the 10-year exclusion that the I.G. determined to impose. I modify the exclusion to a period of five years.

I. Background

Petitioner is a physician who practices medicine in the Boroughs of Richmond (Staten Island) and Brooklyn, New York. On August 20, 2003, the I.G. notified Petitioner that he was being excluded from participating in Medicare and other federally funded health care programs for at least 10 years. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision.

I held a pre-hearing conference by telephone at which time I determined that it appeared as if this case could be heard and decided based on the parties' written submissions. Accordingly, I established a schedule by which the parties would file proposed exhibits and briefs. During the pre-hearing conference I told the parties that I would grant them an in-person hearing if either of them could satisfy me that he or she intended to offer testimony containing relevant evidence which was not present in any written exhibit.

The parties then submitted briefs and proposed exhibits. The I.G. submitted six proposed exhibits consisting of I.G. Ex. 1 - I.G. Ex. 6. Petitioner submitted 14 proposed exhibits consisting of P. Ex. 1 - P. Ex. 14. I am receiving these exhibits into evidence, although some of Petitioner's exhibits are not relevant for reasons which I discuss below. The parties then submitted reply briefs.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. An in-person hearing is necessary;

2. The I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act;

3. An exclusion of 10 years is unreasonable.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading and I discuss it in detail.

1. An in-person hearing is unnecessary.

At the pre-hearing conference I advised the parties that an in-person hearing appeared to be unnecessary because it did not appear to me that either party had any relevant evidence that did not exist in documentary form. I told the parties that either of them could advise me in his or her brief whether he or she possessed evidence in the form of testimony that must be presented in person and I advised the parties that I would schedule an in-person hearing if either party had such evidence.

The I.G. did not offer to present testimony nor did she request that I schedule an in-person hearing. In his brief Petitioner requested that I schedule an in-person hearing "should the document reviews and . . . brief presentation with the exhibits still leave . . . [the administrative law judge] in doubt." Petitioner's brief at 2.

I find an in-person hearing to be unnecessary. Petitioner has not provided me with a reason to schedule a hearing. He has not proffered any testimony nor has he asserted that the exhibits that he offers are inadequate to set forth fully the evidence that he is relying on to make his case.

2. The I.G. is authorized to exclude Petitioner because Petitioner was convicted of a criminal offense which is within the reach of section 1128(a)(1) of the Act.

Section 1128(a)(1) mandates the exclusion of any individual who is convicted of a criminal offense that is related to the delivery of an item or service under Medicare or a State Medicaid program. The evidence in this case establishes that Petitioner was convicted of such a program related offense.

On April 11, 2003 Petitioner pled guilty to Counts 10 and 17 of an indictment that had been issued against him in the Supreme Court of the State of New York, County of Richmond. I.G. Ex. 3, at 11, 18; I.G. Ex. 4, at 3 - 4. All other counts of the indictment were simultaneously dismissed. I.G. Ex. 4, at 16.

Count 10 of the indictment charged that Petitioner attempted to defraud the State of New York by knowingly presenting to a public office and public servant a written instrument containing false statements and information. I.G. Ex. 3, at 11. Specifically, Count 10 charged that Petitioner knowingly submitted and caused to be submitted to a fiscal agent for New York's Medicaid program a claim for payment that contained false information and false statements in that it certified that Petitioner had received no other payment for services rendered to a Medicaid recipient when, in fact, Petitioner had received $100 for those services. Id.

Count 17 also charged that Petitioner had knowingly presented a written instrument containing false statements and false information to a public office and a public servant. I.G. Ex. 3, at 18. Specifically, it charged that Petitioner submitted a claim for Medicaid reimbursement in which Petitioner falsely represented that he had treated a Medicaid recipient when, in fact, he had never treated this person. Id. The amount of this claim was not specified in the count or elsewhere in the indictment.

Both of the counts to which Petitioner pled guilty allege, in effect, that Petitioner sought to defraud the Medicaid program. In Count 10, Petitioner is alleged to have sought reimbursement from Medicaid for services that had been reimbursed privately. In Count 17, Petitioner is alleged to have attempted to extract payments for services from Medicaid for services that he never performed.

It is settled law that an attempt to extract funds from a Medicaid program based on false representations about services allegedly provided, or to defraud such a program into paying for services that were never delivered, constitute program related crimes within the meaning section 1128(a)(1). Petitioner does not argue that the crimes of which he was convicted are not program related. He appears to argue, however, that he should not be excluded because he is not really guilty of having committed any crime. Petitioner's brief at 2. Petitioner contends that:

Although a felony conviction was entered, this plea was reflective only of paper trail irregularities created by the undercover agent, who came to my office posing as a patient; a circumstance that never once occurred in all of my twenty three years of practice.

Id. This argument is without merit as the I.G.'s authority to exclude Petitioner pursuant to section 1128(a)(1) derives from Petitioner's conviction of a program related offense and not from the conduct that was the basis for his indictment. Petitioner - by pleading guilty to program related offenses - was "convicted" of such crimes. Act, section 1128(i)(3). Moreover, Petitioner acknowledged his guilt of the offenses to which he pled guilty when he entered his plea. I.G. Ex. 4, at 8.

3. The I.G. proved the presence of a single aggravating factor.

The I.G. is required to exclude any individual who is convicted of an offense that comes within the reach of section 1128(a)(1) of the Act for a minimum period of at least five years. Act, section 1128(c)(3)(B). An exclusion of more than five years is discretionary.

However, the I.G.'s authority to exclude for periods of more than five years is not unbounded. Section 1128(a)(1) is remedial and not punitive. Its purpose is to protect federally funded health care programs and their beneficiaries and recipients from individuals whose convictions establish them to be untrustworthy. An exclusion is remedial only if its length is reasonably related to an excluded individual's untrustworthiness.

The Secretary of this Department has published regulations which provide criteria for measuring excluded persons' untrustworthiness and for deciding the length of exclusions. 42 C.F.R. Part 1001. The regulation which establishes such criteria for individuals excluded pursuant to section 1128(a)(1) is 42 C.F.R. § 1001.102. The regulation identifies factors which may be either aggravating or mitigating. 42 C.F.R. 1001.102(b), (c). Evidence which relates to an aggravating factor may justify lengthening an exclusion beyond the five-year minimum period established by the Act. Evidence which relates to a mitigating factor may offset evidence which relates to an aggravating factor but it may never justify reducing an exclusion below the five-year minimum. Id.

In this case, the I.G. alleged the presence of two aggravating factors. These are the factors which are identified at 42 C.F.R. § 1001.102(b)(1) and (b)(9). I find that the I.G. proved the presence of one of them.

At 42 C.F.R. § 1001.102(b)(9), the regulation provides that an aggravating factor is present if:

the [excluded] individual . . . was convicted of other offenses besides those which formed the basis for the exclusion, or has been the subject of any other adverse action by any Federal, State, or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.

The undisputed evidence in this case establishes that, on June 24, 2003, the State of New York Department of Health excluded Petitioner from participating in the New York Medicaid program based on Petitioner's conviction of the crimes which are at issue in this case. I.G. Ex. 6. This action plainly is an adverse action against Petitioner by a State agency which is based on the same set of circumstances which serves as the basis for imposition of an exclusion by the I.G. Therefore, an aggravating factor is established.

At 42 C.F.R. § 1001.102(b)(1), the regulation provides that an aggravating factor is present if:

The acts resulting in the conviction, or similar acts, that caused, or were intended to cause, a financial loss to a Government program or to one or more entities of $5,000 or more.

The I.G. argues that Petitioner's crimes and related behavior by Petitioner caused the New York Medicaid program to sustain losses of $5,000 or more and that, consequently, the aggravating factor is established. As proof of the alleged loss the I.G. relies on the fact that Petitioner's plea required that he pay restitution of $40,000 to the New York Attorney General's fund. I.G. Ex. 4, at 6; I.G. Ex. 5.

I am not persuaded that, in the circumstances of this case, the restitution paid by Petitioner is a meaningful measure of the extent of his crimes or of related activity. It does not provide proof that the impact of Petitioner's crimes or related conduct equaled or exceeded $5,000. The I.G. offered no evidence to explain how the restitution amount was arrived at or even to explain what is meant by the term "restitution" in the context of Petitioner's plea.

In other cases I have often cited the amount of restitution that is paid by an excluded individual as part of his sentence as a rough measure of the impact of that individual's criminal or related conduct. But in those cases, there has always been evidence independent of the restitution amount from which I might infer that the restitution bears some relationship to the impact of the excluded individual's behavior. Typically, the indictment will allege some broad criminal scheme and frequently it will allege an estimate of the impact of the excluded party's crimes. Often the evidence before me includes a pre-sentencing report or a plea agreement which discusses the financial impact of the excluded individual's crimes and related conduct. Or the transcript of the sentencing proceeding contains a discussion which relates the restitution amount to the crimes or to related conduct.

Here there is none of that. The indictment does not allege an overall scheme or conspiracy. Rather it alleges only a series of individual criminal acts. It is impossible to infer from Petitioner's indictment - including those charges that were dismissed - that the global impact of Petitioner's crimes and related conduct was at the aggravating level of $5,000 or higher. The total financial impact of Petitioner's crimes alleged in all of the counts of the indictment, including those counts which were dismissed, is $450. I.G. Ex. 3, at 11 - 16. There is nothing else in the evidence offered by the I.G. which explains how the restitution amount of $40,000 was arrived at. The I.G. did not offer a pre-sentencing report, a copy of Petitioner's plea agreement, or any other document that purported to explain the restitution amount. The transcript of Petitioner's sentencing proceeding contains no explanation. I.G. Ex. 4.

Certainly it is possible that the restitution amount reflects an estimate of the impact of Petitioner's unlawful conduct. But it is equally possible that the amount reflects some other consideration. For example, it is well within the realm of reasonable possibility that the amount was negotiated by Petitioner's counsel and the New York Attorney General simply as a way of settling the criminal allegations against Petitioner and without regard to the actual impact of Petitioner's crimes. Indeed, there is support for that conclusion in a letter to Petitioner from his former counsel:

The $40,000 financial penalty imposed as part of the sentence and payable to the Attorney General's restitution fund bears no relationship to any specific act charged in the now dismissed indictment.

P. Ex. 2.

The I.G. argues that evidence of Petitioner's agreement to pay restitution is prima facie proof that the New York Medicaid program suffered a pecuniary loss from Petitioner's unlawful activity. I.G.'s reply brief at 5. I disagree with this argument for the reasons that I have given in this Finding. I do not agree that one should presume, as a matter of law, that a restitution amount equates automatically with or even should be held to approximate the amount of damages sustained by the victim of a crime. The significance of restitution depends on the facts of a case and it is always the I.G.'s burden to provide an explanation of what a restitution amount means in a particular case. The I.G. has failed to provide any evidence in this case which relates the restitution that Petitioner agreed to pay with the economic impact of his crimes and related activity. Indeed, facts of Petitioner's indictment suggest that the financial impact of his crimes and related activity actually was quite small. I note, moreover, the I.G.'s assertions notwithstanding, that Petitioner did not pay restitution to the New York Medicaid program. See Id.; P. Ex. 2. Rather, Petitioner paid his restitution to the New York Attorney General's fund. The I.G. has offered no explanation as to the nature and contents of this fund.

4. Petitioner did not prove the presence of any mitigating factor.

Petitioner did not prove the presence of any of the mitigating factors that are identified at 42 C.F.R. § 1001.102(c). He offered a statement of support from an employee and numerous statements of support from present or former patients. P. Ex. 3; P. Ex. 4. These statements laud Petitioner's good qualities including his excellence as a physician. Id. Although I received these exhibits into evidence for purposes of completing the record of this case, I find that none of them contain anything that is relevant to proving the presence of a mitigating factor.

5. An exclusion of 10 years is unreasonable. An exclusion of five years is reasonable.

My task in deciding whether an exclusion is unreasonable is to decide whether it falls within a reasonable range of possible exclusions given the evidence that may pertain to aggravating or mitigating factors.

The aggravating and mitigating factors that are described at 42 C.F.R. § 1001.102(b) and (c) operate as rules of evidence for deciding whether an exclusion is unreasonable. The regulation contains no criteria for assigning weight to an aggravating or a mitigating factor. It merely describes what categories of evidence may be considered. Thus, the presence of one or more aggravating factors in a case is not, in and of itself, a basis for imposing an exclusion of more than five years. What is relevant to deciding whether a greater than five year exclusion is reasonable in any case is the evidence that relates to an aggravating or a mitigating factor. The ultimate question that must be asked and answered in any case is: what does such evidence say about the excluded party's trustworthiness to provide care? Evidence relating to an aggravating factor or factors which shows a high degree of untrustworthiness is reason to sustain a lengthy exclusion. But the absence of such evidence may be a basis for finding an exclusion to be unreasonable.

It is not my role to second-guess the I.G. If the evidence which relates to an aggravating factor or factors shows that an exclusion falls within a reasonable range of possible exclusions, then I will sustain it even if I might not come to the same conclusion on my own as to length of exclusion as was reached by the I.G.

Here, the evidence relating to aggravation does not indicate that an exclusion for more than the five-year minimum period is reasonable. The evidence of aggravation in this case is only that the New York Department of Health determined to exclude Petitioner from participating in New York's Medicaid program based on its own review of Petitioner's conviction. The fact that the New York Department of Health took this step is not insignificant. It shows that an independent administrative agency determined on its own initiative that Petitioner is untrustworthy to provide care. But, in this case, the New York Department of Health independently determined to exclude Petitioner from participating in Medicaid for a period of two years, allowing Petitioner to seek reinstatement into the Medicaid program two years from the date of his exclusion. I.G. Ex. 6, at 2. That is for three years less than the statutory minimum period that is mandated for exclusions under section 1128(a)(1) 0f the Act. (1)

Thus, the only evidence of aggravation in this case shows that Petitioner was determined independently not to be so untrustworthy as to merit a lengthy exclusion, and certainly, not to require an exclusion of more than the five-year minimum period that is mandated by federal law. That evidence hardly can be relied on as a basis for excluding Petitioner for more than the five-year minimum period.

III. Conclusion

I find that an exclusion of 10 years is not within a reasonable range of exclusions given the absence of any evidence that would establish a basis for excluding Petitioner for more than the five-year minimum period. Consequently, I modify Petitioner's exclusion to a term of five years.

JUDGE
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Steven T. Kessel

Administrative Law Judge

FOOTNOTES
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1. Ultimately, Petitioner's exclusion from all Medicaid programs will be for at least as long as his exclusion from Medicare because the effect of the I.G.'s determination is to exclude Petitioner from all federally funded health care programs. My point here is that the New York Department of Health's independent assessment of Petitioner's lack of trustworthiness was that two years would be sufficient to protect its Medicaid program absent any federal action to exclude Petitioner for a longer period.

CASE | DECISION | JUDGE | FOOTNOTES