CASE | DECISION | JUDGE

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


SUBJECT:

Ngoni Christopher Kwangwari

Petitioner,

DATE: March 30, 2004
                                          
             - v -

 

The Inspector General

 

Docket No.C-03-712
Decision No. CR1162
DECISION
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DECISION

This case is before me pursuant to a request for hearing filed on September 24, 2003, by Ngoni Christopher Kwangwari, Petitioner.

By letter dated July 31, 2003, the Inspector General (I.G.) notified Petitioner, Ngoni Christopher Kwangwari, that he was being excluded from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a period of 10 years. The I.G. informed Petitioner that his exclusion was imposed under section 1128(a)(1) of the Act, due to his 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. Petitioner was also informed that his exclusion was for a period greater than the minimum period of five years made mandatory by section 1128(c)(3)(B) of the Act, because of the following circumstances:

1. Petitioner's criminal acts resulted in a financial loss to a government program of $5,000 or more.

2. The sentence imposed by the court included incarceration.

On November 19, 2003, I convened a telephone prehearing conference during which the parties agreed that an in-person hearing was not required and that the issues could be decided based on written memoranda and documentary evidence. Consequently, I issued an Order establishing briefing deadlines. Pursuant to that Order, on December 22, 2003, the I.G. timely filed a brief, accompanied by seven proposed exhibits; and then added an eighth proposed exhibit on February 19, 2003 along with its Reply brief. On February 3, 2004, Petitioner submitted a brief in support of his contentions, with eight proposed exhibits. On March 17, 2004, Petitioner filed a Sur-Reply brief with a ninth proposed exhibit. Neither party objected to the exhibits submitted. I admit into evidence I.G. exhibits (I.G. Exs.) 1 - 8 and Petitioner exhibits (P. Exs.) 1 - 9.

By letter dated December 18, 2003, the I.G. revised its letter of July 31, 2003 and reduced the period of exclusion to eight years based on a review of the sentencing documents related to Petitioner's conviction. The I.G. determined that Petitioner was not sentenced to incarceration because the court suspended Petitioner's sentence of 364 days in jail. As a result, one aggravating factor used to lengthen Petitioner's exclusion to 10 years was no longer applicable and, accordingly, the I.G. revised the length of the exclusion down to eight years.

It is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in the Medicare, Medicaid, and all federal health care programs, for a period of eight 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 Florida Medicaid program. Additionally, I find that the eight-year exclusion imposed on Petitioner is not unreasonable.

ISSUES

1. Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act.

2. Whether the eight-year exclusion imposed by the I.G. upon Petitioner is unreasonable.

APPLICABLE LAW AND REGULATIONS

Section 1128(a)(1) of the Act authorizes the Secretary 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 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, an individual or entity excluded under section 1128(a)(1) of the Act may file a request for a hearing before an administrative law judge.

FINDINGS AND DISCUSSION

The findings of fact and conclusions of law noted below, in bold face, are followed by a discussion of each finding.

1. Petitioner's conviction of a criminal offense related to the delivery of an item or service under the Medicaid program justifies his exclusion by the I.G. from participation in the Medicare, Medicaid, and all other federal health care programs.

On September 18, 2001, an Information was filed in the Circuit Court of the Eleventh Judicial Circuit, Miami-Dade County, Florida, charging Petitioner with one count of Grand Theft and 50 counts of Medicaid Fraud. I.G. Ex. 2. The 50 counts of Medicaid Fraud all charge that, beginning on or about February 1, 1997, Petitioner engaged in the filing of false claims to the Florida Medicaid program relating to prescriptions for 300 mcg. of Neupogen supplied to various Florida Medicaid recipients. Id. Petitioner billed the Florida Medicaid program for amounts that were in excess of the amounts dispensed. I.G. Ex. 3. On October 29, 2002, Petitioner entered into a Plea Agreement. I.G. Ex. 4. Petitioner agreed to plead guilty to one felony count of Grand Theft and three felony counts of Medicaid fraud. According to the Plea Agreement, the State of Florida would recommend a sentence of five years' probation, subject to certain conditions, including a withholding of adjudication, a sentence of 364 days in the Dade County Jail, which would be suspended if Petitioner paid certain identified court costs and investigative costs, and restitution in the amount of $120,000. Id. After three years, if Petitioner complied with all terms of the agreement, including divesting himself of all interests from healthcare related facilities and employment, Petitioner's probation would be terminated. In addition, Petitioner was prohibited from practicing pharmacy or being employed by anyone who benefits from Medicaid payments after March 1, 2003. I.G. Ex. 7.

Petitioner's guilty plea and the Eleventh Judicial Circuit Court's acceptance of the guilty plea constitutes a conviction under section 1128(i)(3) of the Act. The Eleventh Judicial Circuit Court entered a Finding of Guilty and Order of Withholding Adjudication with Special Conditions. I.G. Ex. 5. Deferred adjudications are specifically included as part of the definition of a conviction under section 1128(i)(4) of the Act. Therefore, I find that Petitioner was convicted of a criminal offense under sections 1128(i)(3) and (4) of the Act.

Petitioner pled guilty to three counts of Medicaid fraud. I.G. Exs. 4, 5. He also pled guilty to filing false claims with the Florida Medicaid program relating to prescriptions for 300 mcg. of Neupogen supplied to various Florida Medicaid recipients. Id. Petitioner billed the Florida Medicaid program for amounts that were in excess of the amounts dispensed. I.G. Ex. 3. The filing of false Medicaid claims have consistently been held to constitute program-related conduct. Travers v. Shala, 20 F.3d 993 (9th Cir. 1994); Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn 1990); Carlos Rivera-Cruz, DAB CR677 (2000). I find, therefore, that Petitioner was convicted of a criminal offense related to the delivery of an item or service under a State health care program within the meaning of section 1128(a)(1) of the Act. Thus, the I.G. had a basis upon which to exclude him from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act.

2. The I.G. has established one aggravating factor.

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 three years to the statutory five-year minimum period.

The aggravating factors that the I.G. may consider as a basis for lengthening a period of exclusion are found at 42 C.F.R. § 1001.102(b). In the case at hand, the I.G. alleges the existence of one aggravating factor to justify the eight-year exclusion period imposed against Petitioner. The aggravating factor upon which the I.G. relies is that the Petitioner committed criminal acts that resulted in a financial loss to a government program of $5,000 or more. Petitioner was ordered to pay $120,000 in restitution. Petitioner concedes that this aggravating factor is present in this case and I so find. P. Brief at 2.

3. Petitioner has failed to establish any mitigating factor.

42 C.F.R. § 1001.102(c) provides that if any of the aggravating factors set forth in paragraph (b) of that section justifies 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. This regulation states that only the following factors may be considered mitigating:

(1) The individual or entity was convicted of three or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1,500;

(2) The record in the criminal proceedings, including sentencing documents, 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; or

(3) The individual's or entity's cooperation with federal or State officials resulted in -

(i) Others being convicted or excluded from Medicare, Medicaid, and all other federal health care programs,

(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

42 C.F.R. § 1001.102(c).

Petitioner contends that I should consider his cooperation with Medicaid Fraud Control Unit (MFCU) investigations in Florida as a mitigating factor. On August 28, 2003, Petitioner was interviewed by the MFCU and provided information to the MFCU. Assistant Attorney General Martinez stated, in a letter dated January 27, 2003, that the information provided by Petitioner was "substantive and truthful to the investigation and could lead to an administrative violation against Dade Pharmacy Discount." P. Ex. 3 (emphasis added). Petitioner argues that this letter satisfies the first part of section 42 C.F.R. § 1001.102(c)(3)(ii). In addition, Petitioner argues that he was convicted for conduct concerning Kalahari Drugs, Inc., but that his voluntary cooperation related to Dade Pharmacy Discount, which is a separate entity. Petitioner has the burden of proof regarding the existence of mitigating factors and he has not met his burden. The evidence upon which Petitioner relies here only allows for a possibility that there might be further investigation because of the use of the word "could." More significantly, the I.G. submitted a February 19, 2004 declaration executed by Mr. Martinez that, at the time of Petitioner's August 28, 2003 interview, there was already a pending investigation involving Dade Pharmacy Discount and that the information provided by Petitioner has not led to any additional cases being investigated by the Florida Attorney General's Office or the MFCU. I.G. Ex. 8. Petitioner has offered nothing to rebut the declaration by Mr. Martinez and, therefore, fails to meet his burden of proof.

Furthermore, Petitioner argues that the second part of 42 C.F.R. § 1001.102(c)(3)(ii) is satisfied because the information that he provided specifically corresponds to the Medicaid program's vulnerabilities and weaknesses identified by the First and Second Report of the Seventeenth Statewide Grand Jury (P. Ex. 4) and by the Federal General Accounting Office's (GAO's) May, 2002, Report to the Subcommittee on Oversight and Investigations, Committee on Energy and Commerce, House of Representatives, entitled Prescription Drugs: State Monitoring Programs Provide Useful Tools to Reduce Diversion (P. Ex. 5).

The GAO report was issued in May, 2002, more than a year before Petitioner's August 28, 2003 interview. The First Interim Report of the Seventeenth Statewide Grand Jury (P. Ex. 4) appears to have been issued February, 2003, six months before Petitioner's August 28, 2003 interview. Therefore, the information that Petitioner provided could not have led to either of these reports being issued.

In addition, the Petitioner does not assert and the Second Interim Report of the Seventeenth Statewide Grand Jury (P. Ex. 4) does not indicate that Petitioner testified before the Grand Jury, or that information provided by Petitioner was used in any way before the Grand Jury. Petitioner only asserts that the information he provided "specifically corresponds" to reports concerning program vulnerabilities and weaknesses not that the information he provided led to these reports. Therefore, Petitioner's has not met his burden of proof as to this mitigating factor.

Petitioner also puts forth as mitigating factors that he has a current and unencumbered pharmacy license, that he is married with two children and that he has no prior convictions, felonies or misdemeanors. None of these are factors that I may consider as mitigating under the regulations and therefore are not relevant to the matter before me.

4. Petitioner's exclusion for a period of eight years is not unreasonable.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years. Section 1128(c)(3)(B) of the Act. When the I.G. imposes an exclusion for the mandatory five-year period, the reasonableness of the length of the exclusion is not an issue. 42 C.F.R. § 1001.2007(a)(2). Petitioner was convicted of Medicaid fraud. He does not dispute his conviction of a criminal offense related to the delivery of an item or service under the Medicaid program. As a result of Petitioner's program-related conviction, the I.G. was required to exclude him pursuant to section 1128(a)(1) of the Act, for at least five years.

For the reasons stated above, and in light of my consideration of the current statutory and regulatory criteria, I find that the eight-year exclusion imposed by the I.G. is within a reasonable range of possible exclusion periods given the circumstances of Petitioner's case, in which one aggravating factor is present and no mitigating factors have been established. The eight-year exclusion is a legitimate 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 and entities. See Joann Fletcher Cash, DAB No. 1725 (2000).

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 he was convicted of a criminal offense related to the delivery of an item or service under Medicaid. The I.G. is justified in lengthening the period of exclusion, due to the existence of an aggravating factor. I therefore sustain Petitioner's eight-year exclusion.

 

JUDGE
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José A. Anglada

Administrative Law Judge

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