Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
The Inspector General
- v. -
Berney R. Keszler, M.D.,
and Berney R. Keszler
M.D., P.A.,
Respondents.
DATE: November 1, 1990
Docket No. C-167
DECISION
Respondents requested a hearing to contest the Inspector General's (I.G.) proposed
imposition against
them, jointly and severally, of civil monetary penalties of $390,000.00, assessments
of $148,843.54, and a
ten year exclusion from participation in the Medicare, Medicaid, Maternal and
Child Services Block Grant,
and Social Services Block Grant programs (Titles XVIII, XIX, V, and X of the
Social Security Act,
respectively). The I.G. alleged that Respondents violated section 1128A of the
Social Security Act (the
Act), as implemented by 42 C.F.R. 1003.100 et seq.
I held a hearing in Lufkin, Texas, on April 23-26, 1990. Based on the law,
regulations, and evidence
adduced at the hearing of this case, I conclude that Respondents unlawfully
presented or caused to be
presented 260 claims for items or services in violation of the Act. I impose
penalties of $150,000.00 and
assessments of $100,000.00 against Respondents, jointly and severally. I also
exclude Respondents from
participating in Medicare and Medicaid for 10 years.
ISSUES
The issues in this case are whether:
1. Respondents presented or caused to be presented claims for items or services
in violation of
section 1128A of the Act.
2. Assessments, penalties, and exclusions should be imposed against Respondents
and, if so, in
what amounts or for what period of time.
3. The assessments, penalties, and exclusions imposed in this case violate
Respondents' rights not
to be placed in double jeopardy.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. At all times relevant to this case, Respondent Berney R. Keszler, M.D.,
(Respondent Keszler) was an
anesthesiologist licensed to practice medicine in the State of Texas. Stip.
11.
2. At all times relevant to this case, Respondent Berney R. Keszler, M.D., P.A.
(Respondent Keszler, P.A.)
was a professional association under the Texas Professional Association Act.
Stip. 11.
3. At all times relevant to this case, Respondent Keszler was the sole owner
and proprietor of Respondent
Keszler, P.A. R. Ex. 76
4. The claims at issue in this action relate to anesthesia services performed
at Memorial Medical Center of
East Texas (Memorial Medical Center). Stip. 16., Tr. at 725, 727 - 729.
5. Respondent Keszler was issued a Medicare provider number, Number 00NL838,
which was in effect at
all times pertinent to this action at all times prior to July 28, 1987. Stip.
12.
6. Respondent Keszler was issued a Medicaid provider number in effect at all
times pertinent to this action
at all times prior to July 28, 1987. Stip. 12.5.
7. At all times pertinent to this action, Blue Cross and Blue Shield of Texas,
Inc. (Blue Cross) was the
fiscal agent for the Medicare program in the State of Texas, responsible for
processing and reimbursing
Medicare claims, and otherwise administering the Medicare program in Texas.
Stip. 8.
8. At all times pertinent to this action, the Texas Department of Human Services
(Medicaid) was the
authorized State Medicaid Agency in the State of Texas responsible for administering
the Medicaid
program in Texas. Stip. 9.
9. At all times pertinent to this action, the National Heritage Insurance Company
(NHIC) was the
designated Medicaid Carrier responsible for processing and reimbursing claims
submitted to the Texas
Medicaid program. Stip. 10.
10. The Inspector General (I.G.), in a Notice letter of September 15, 1989
(Notice), alleged that
Respondents presented or caused to be presented to Blue Cross: (1) 37 Medicare
claims for services that
they knew, had reason to know, or should have known were not provided as claimed,
and (2) 172 Medicare
claims for services furnished during a period when they were excluded from participation
in the Medicare
program.
11. The I.G. also alleged that Respondents had presented or caused to be presented
to NHIC 51 claims for
Medicaid items and services that they knew, had reason to know, or should have
known were not provided
as claimed.
12. The I.G. also alleged that Respondents presented or caused to be presented
88 claims to Medicare and
Medicaid that fraudulently misrepresented the amount of time spent by Respondents
or by certified
registered nurse anesthetists (CRNAs) in rendering services to Medicare and
Medicaid patients in violation
of section 1128A(a)(1)(A).
13. The 88 claims were claims for anesthesia services that were provided between
November 1, 1983, and
November 29, 1984. I.G. Ex. 1-1 - 88-1, 1-2 - 88-2.
14. The I.G. also alleged that Respondents submitted 172 unassigned claims
for reimbursement for
anesthesia services between September 1, 1987 and June 9, 1988 while Respondent
Keszler was suspended
or excluded from participation based on a conviction for conduct relating to
one of the false Medicaid
claims (claim 39) at issue in this case.
15. The I.G. appended an attachment to his Notice which indexed the allegedly
false claims at issue in this
case as counts 1 - 260.
16. Respondents admitted that they presented for Medicare or Medicaid reimbursement
the 88 claims
described in counts 1 - 88. Stip. 13, 14.
17. Respondents presented or caused to be presented for Medicare reimbursement
the 172 claims
described in counts 89 - 260. I.G. Ex. 89-1 - 260-1.
18. Respondent Keszler became a member of the staff at Memorial Medical Center
in 1982 and served as
head of the anesthesia department from 1982 - 1986. Tr. at 361 - 362, 388 -
389, 422, 727 - 729, 738.
19. Respondent Keszler determined the medical and billing policies and practices
of the anesthesia
department while serving as its head. Tr. at 161, 365, 728.
20. Respondent Keszler first employed and later contracted with various CRNAs
from 1982 until August
of 1986, including Tim Turney, Carolyn Rouse, Jerry Lazerus, Roland Daigle and
Rusty McMinn. Tr. at
147, 549, 629, 838; I.G. Ex. 343, 345, 346.
21. The CRNAs administered anesthesia under Respondent Keszler's direction.
Tr. at 147 - 150, 738
- 739.
22. Respondent Keszler directed four CRNAs concurrently during the years 1982
- 1986. Tr. at 148 - 150,
744, 759, 857, 921.
23. John Barrett, M.D., the only other anesthesiologist in the anesthesiology
department between 1984 and
1986, handled his own cases and did not direct CRNAs. Tr. at 149, 362, 929.
24. Anesthesia personnel at Memorial Medical Center prepared anesthesia records
which documented
the services they provided in each case. I.G. Ex. 1-2 - 88-2; Tr. at 152, 156,
165, 635.
25. In each case, the CRNA recorded in graphic form on the anesthesia record
the anesthesia services
provided, from the time that anesthesia was induced to the time the patient
emerged from anesthesia. I.G.
Ex. 1-2 - 88-2; Tr. at 168 - 173, 558 - 559, 635 - 636, 639, 643.
26. In each case, the CRNA also recorded in numeric form on the anesthesia record,
the anesthesia start
and end times, and the total time spent providing anesthesia. I.G. Ex. 1-2 -
88-2; Tr. at 167 - 168, 171 -
172, 559 -560, 636, 639, 644.
27. At Memorial Medical Center, the time spent providing anesthesia in each
case generally coincided
with the time spent providing surgery in that case, as is evidenced by the CRNAs'
graphs and the surgery
beginning and end times on the anesthesia records. Tr. at 167 - 168; I.G. Ex.
1-2 - 88-2.
28. Induction and emergence from anesthesia at Lufkin Memorial usually occurred
in the operating rooms,
and not elsewhere. Tr. at 554 - 555, 630, 734 - 735.
29. After emergence, a patient was transported to post- anesthesia recovery
(PAR) by the person who had
administered the anesthesia. Tr. at 153 - 154, 369 - 371, 555 - 556, 630 - 631.
30. When an anesthesiologist or a CRNA brought a patient to PAR, he or she
would check the patient's
vital signs and report potential medical problems to the recovery room nurse.
Tr. at 154, 370 - 371, 556,
631, 741 - 742; I.G. Ex. 346.
31. When patients were brought into PAR, their post-anesthetic condition, including
complications, was
recorded in the "postanesthetic condition" section of the anesthesia
record. Tr. at 173 - 174, 637; I.G. Ex.
1-2, 7-2.
32. In the unusual case that it would have been necessary to provide more than
routine post-anesthesia care
upon arrival in the recovery room, that information would have been recorded
in the "postanesthetic
condition" section of the anesthesia record. Tr. at 640 - 641; I.G. Ex.
4-2/2, 343, 345.
33. It was not common for anesthesia personnel to return to the recovery room
to deal with a medical
problem, once a patient was left in the care of recovery room personnel. Tr.
at 181 - 182, 632, 943.
34. It was never necessary for anesthesia personnel to spend an hour in the
recovery room providing care
to a patient. Tr. at 182, 558.
35. Approximately 25% of the anesthesia patients at Memorial Medical Center
between 1982 - 1986 were
cataract patients who required either no services or only routine services in
the recovery room. Tr. at 162 -
163, 178 -179, 411 - 412, 638, 646 - 647; I.G. Ex. 2-1, 3-1, 5-1, 7-1, 21-1,
31-1.
36. In the anesthesia cases represented by the claims contained in counts 1
- 88, the actual time spent
providing anesthesia is established by the graphic notations of anesthesia time
contained in the anesthesia
records generated by anesthesia personnel. Tr. at 169 -170, 559, 635; I.G. Ex.
1-2 - 88-2.
37. In each of these 88 cases, there is a substantial discrepancy between the
actual anesthesia time, as
established by the graphic notations contained in the anesthesia record, and
the amount of time claimed as
anesthesia time in the reimbursement claim. I.G. Ex. 1-1 - 88-1, 1-2 - 88-2.
38. In nearly all of these 88 cases, there is a substantial discrepancy between
the actual anesthesia time, as
established by the graphic notations contained in the anesthesia record, and
the total anesthesia time stated
numerically in the anesthesia record. I.G. Ex. 1-2 - 88-2.
39. Pursuant to the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA),
on March 2, 1983, new
Medicare regulations were published which revised the standards governing Medicare's
reimbursement of
anesthesiologists. 42 C.F.R. 405.550 et seq; I.G. Ex. 325; Tr. at 275 - 276.
40. Effective with claims processed on or after October 1, 1983, for dates of
service on or after July 1,
1983, reimbursement for anesthesiology services would no longer be based on
historical profile data, but
would be based on a point system. I.G. Ex. 325.
41. Medicaid adopted the same method as Medicare for implementing anesthesia
services under the Texas
Medicaid program, for dates of service on or after October 1, 1983, which claims
were processed on or
after January 6, 1984. I.G. Ex. 329, 326; Tr. at 219.
42. In order to determine a reasonable charge for anesthesia services, reimbursement
under TEFRA's point
system method is based on a combination of "base unit" points attributable
to the type and complexity of
the anesthesia procedure performed, and separate "time unit" points
attributable to the duration of time
spent performing an anesthesia procedure. 42 C.F.R. 405.552, 42 C.F.R. 405.553;
Tr. at 49 - 51, 219, 275
- 276, 301 -302.
43. Under TEFRA, reimbursement may be obtained for the period:
beginning from the time the physician or anesthetistbegins to prepare the
patient for induction
ofanesthesia, and ending when the patient may besafely placed under post-operative
supervision and
the physician or anesthetist is no longer inpersonal attendance.
42 C.F.R. 405.553(b)(2).
44. Within the meaning of 42 C.F.R. 405.553(b)(2), "personal attendance"
means that a physician is
actively involved in providing anesthesia services to a patient, and it is only
such provision of anesthesia
services that is reimbursable under the "time" unit portion of TEFRA.
See 42 Fed. Reg. 8928 (March 2,
1983).
45. Reimbursable anesthesia time under TEFRA usually approximates surgery time.
Tr. at 118, 278 - 281,
305, 338 - 339; I.G. Ex. 324.
46. Reimbursable anesthesia time under TEFRA may exceed surgery time in those
circumstances
where anesthesia personnel actually provide anesthesia beyond completion of
surgery. Tr. at 54 - 55, 56,
66 - 67, 115, 121, 338 -340.
47. In calculating time unit reimbursement under TEFRA, the only post-operative
time that usually should
be considered is the minimal time it routinely takes following surgery for the
patient to be safely placed
"under post-operative supervision." 42 C.F.R. 405.553(b)(2); Tr. at
302 - 303; I.G. Ex. 325.
48. PAR time is normally not reimbursable anesthesia time under TEFRA. Tr at 56 - 59, 278
49.PAR time, to the extent it involves anesthesia personnel, is deemed to be
"indicated post-anesthesia
care" under TEFRA, and is reimbursed as part of the base units. Tr. at
55 - 57, 118 - 119, 136 - 137, 275 -
281, 301 - 304; 42 C.F.R. 405.552(a)(1)(vii).
50. In the PAR records at Memorial Medical Center, recovery room nurses recorded
events which took
place in the recovery room on behalf of patients, i.e. administration of medication
or any procedures
performed on a patient. Tr. at 571 - 574, 614 - 615; I.G. Ex. 343.
51. Patient complications in the recovery room at Lufkin Memorial necessitating
intervention by
anesthesia personnel were rare. Tr. 177, 560 - 561, 565 - 568, 946; I.G. Ex.
1-2/3, 3-2/3, 5-2/3, 7-2/3, 8-2,
9-2, 10-2/3, 11-2/3, 15-2, 20-2, 25-2, 28-2/4, 30-2, 31-2/4, 35-2/3, 42-2/3,
43-2/3, 44-2/3, 45-2, 46-2/3, 47-
2/3, 48-2/3, 50-2, 53-2/2, 54-2/2, 58-2/3, 59-2/2, 63-2/2, 64-2/2, 67-2/2, 68-2/3,
70-2/3, 71-2/3, 72-2/3, 74-
2/3, 75-2/3, 78-2/3, 79-2/4, 81-2/2, 88-2, 343, 346.
52. In the cases contained in counts 1-88, PAR records do not document any
post-surgical
intervention by anesthesia personnel, with the exception of the cases contained
in counts 24, 27, 32, 52, 84,
86. I.G. Ex. 24-2/4, 27-2/4, 32-2/4, 52-2/4, 84-2/4, 86-2/3.
53. In none of the cases where post-surgical intervention by anesthesia personnel
is documented do
the PAR records demonstrate more than brief intervention by anesthesia personnel.
I.G. Ex. 24-2/4, 27-
2/4, 32-2/4, 52-2/4, 84-2/4, 86-2/3.
54. In none of the cases where post-surgical intervention by anesthesia personnel
is documented, does
the time spent performing such intervention account for the discrepancy between
actual anesthesia time (as
established by graphic notation in the anesthesia record), and the total anesthesia
time stated on the record.
I.G. Ex. 24-2/4, 27-2/4, 32-2/4, 52-2/4, 84-2/4, 86-2/3.
55. Medicare's medical direction requirements are designed to prohibit an anesthesiologist
from obtaining
reimbursement under Part B if he provides services in the recovery room while
supposedly directing
CRNAs performing concurrent procedures. 48 Fed. Reg. 8928 (March 2, 1983).
56. To educate physicians about Medicare's new reimbursement policies under
TEFRA, Blue Cross
sponsored various Part B training workshops. I.G. Ex. 327.
57. Patsy Hines, Respondents' office manager, attended training workshops to
learn about Medicare's new
reimbursement policies under TEFRA. Tr. at 716, 767.
58. Blue Cross disseminated newsletters to inform providers of the changes
in reimbursement under
TEFRA. I.G. Ex. 325, 328.
59. Physician Newsletter 154, which outlined the procedures for anesthesiologists
to follow to obtain
reimbursement for anesthesia services under TEFRA, was promulgated by Blue Cross
on September 30,
1983 for dissemination to Texas physicians, including Respondent Keszler. I.G.
Ex. 325.
60. Respondents received Physician Newsletter 154. Stip. 20.
61. To make appropriate time unit reimbursement determinations consistent with
TEFRA policy that
reimbursable anesthesia time approximates surgical time, Blue Cross issued the
requirement in Newsletter
154 that anesthesiologists disclose surgical procedure time on their claim forms.
Tr. at 59, 278 - 279.
62. Respondents understood Newsletter 154 to permit them to bill, as anesthesia
time, the time period
"from the induction of anesthesia until the patient was released to the
recovery room or out of the hospital."
Tr. at 765.
63. Respondent Keszler reviewed Newsletter 154 and discussed it with Ms. Hines. Tr. at 694, 763 - 764.
64. Medicaid, which requires participation in Medicare as a condition to participation
in Medicaid,
changed its reimbursement methodology for anesthesia services to the same formula
as was implemented
by Medicare pursuant to TEFRA. I.G. Ex. 329; Tr. at 219, 222.
65. NHIC informed participating physicians about Medicaid's post-TEFRA anesthesia
reimbursement
changes in Bulletin Nos. 41 and 42, disseminated in December of 1983 and April
of 1984, respectively.
I.G. Ex. 329, 330; Tr. at 220 - 221.
66. Respondents received Bulletin Nos. 41 and 42. Stip. 20.
67. Subsequent to his learning of TEFRA reimbursement requirements, Respondent
Keszler instructed the
anesthesiology staff to add an extra hour to total anesthesia time on the anesthesia
records for all Medicare
and Medicaid patients, who could be identified by the hospital admission or
"face" sheet in the record. Tr.
at 549 - 550, 619 - 620, 636 - 637, 156 - 158, 364; I.G. Ex. 343, 345.
68. Respondent Keszler instructed the anesthesia staff to overstate total anesthesia
time in Medicare and
Medicaid cases in order to increase Respondents' reimbursement from Medicare
and Medicaid. Tr. at 157,
434 - 436, 549 - 550; I.G. Ex. 343, 345.
69. Respondent Keszler reminded CRNAs who forgot to overstate total anesthesia
time that it was
necessary for them to do so. Tr. at 157, 565, 569, 639 - 640, I.G. Ex. 8-2/3,
11-2/1, 18-2/1, 22-2/1, 88-2/1,
343, 345.
70. Respondent Keszler interrupted CRNAs in the performance of their anesthesia
duties to remind
them to add time to anesthesia records in Medicare and Medicaid cases. Tr. at
564 - 565; I.G. Ex. 343,
345.
71. Respondent Keszler personally changed the total anesthesia time on anesthesia
records which had been
prepared by CRNAs. Tr. at 159 - 160, 424, 428, 433 - 437, 565, 810; I.G. Ex.
342, 345, 346.
72. Anesthesia times were changed on the anesthesia records in the cases stated
in counts 9, 11, 12, 20, 22,
23, 26, 27, 28, 30, 31, 32, 33, 35, 40, 42, 55, 60, 62, 71, 73, 74, 75, 84,
and 87. I.G. Ex. 9-2, 11-2, 12-2,
20-2, 22-2, 23-2, 26-2, 27-2, 28-2, 30-2, 31-2, 32-2, 33-2, 35-2 40-2, 42-2,
55-2, 60-2, 62-2, 71-2, 73-2,
74-2, 75-2, 84-2, 87-2.
73. Respondents' clerical staff used two medical records to prepare Respondents'
Medicare and Medicaid
claims: 1) the hospital admission sheet, also called a "face sheet",
which identifies the patient's insurer and
describes the surgical procedure performed, and 2) the anesthesia record, which
provides the anesthesia
time. Tr. at 470, 690 - 691, 701 - 702.
74. Physician order or "progress sheets" were never used to do billing. Tr. at 704.
75. Respondents directed their clerical staff to state on Medicare and Medicaid
claims that anesthesia time
was the time recorded on anesthesia records as total anesthesia time. Tr. at
691, 701.
76. Blue Cross and NHIC, the Medicare and Medicaid carriers, improperly paid
Respondent for this extra
recovery room time in the 88 claims relating to counts 1 - 88. I.G. Ex. 1-3
- 88-3; Tr. at 59, 228.
77. The reimbursement claims stated in counts 1 - 88 falsely state reimbursable
anesthesia time.
Findings 36 - 38; I.G. Ex. 1-1 - 88-1, 1-2 - 88-2.
78. The false statements of reimbursable anesthesia time in the claims stated
in counts 1 - 88 are the
consequence of Respondents': (1) directive to anesthesia staff to overstate
total anesthesia time on
anesthesia records, and (2) directive to their clerical staff to state on claims
that anesthesia time was the
total anesthesia time recorded on anesthesia records. Findings 67 - 73, 75.
79. A person "knows" that an item or service is not provided as claimed
within the meaning of the Act
when he or she knowingly presents or causes to be presented false claims.
80. It is not necessary for a respondent to personally make a false claim in
order to satisfy the "knows"
test. A person "knows" a claim is false when he or she knows that
the information that they are placing or
causing to be placed on a claim form is false.
81. A person has "reason to know" that an item or service is not
provided as claimed where he or she is a
provider of items or services and: 1) the provider had sufficient information
to place him, as a reasonable
medical provider, on notice that the claims presented were for services not
provided as claimed, or 2) there
were pre-existing duties which would require a provider to verify the truth,
accuracy and completeness of
claims.
82. A person "should know" that an item or service is not provided
as claimed, within the meaning of the
Act, where: 1) that person has reason to know that items or services were not
provided as claimed; or 2) is
negligent in preparing and submitting, or in directing the preparing and submitting
of, claims.
83. At all times relevant to this action, Respondents knew the standards governing
Medicare and
Medicaid's reimbursement of anesthesiologists under TEFRA. Respondents also
knew that the amount of
Medicare and Medicaid reimbursement they received would depend in part on the
amount of anesthesia
time which they claimed. Findings 56 - 68; Tr. at 763 - 765.
84. Respondents knew that they could not routinely claim Medicare reimbursement
pursuant to
TEFRA for PAR time, regardless whether Respondent Keszler or CRNAs working under
his direction
provided "indicated postanesthesia care" to patients in PAR. Findings
62 - 64, 66 - 68.
85. Respondents knew that neither Respondent Keszler nor CRNAs working under
his direction
provided care in PAR, with the exception of the care documented for the claims
contained in counts 24, 27,
32, 52, 84, and 86. Findings 30 - 34, 36 - 38, 52 - 54, 67 - 72.
86. Respondents knew that the anesthesia records on which the claims contained
in counts 1 - 88 were
based falsely stated the total anesthesia time in each case. Findings 36 - 38,
67 - 72.
87. Respondents knew that they had falsified the anesthesia time stated in
the claims contained in
counts 1 - 88, in order to increase their reimbursement from Medicare. Findings
67, 68.
88. Respondents knew that the services stated in the claims contained in counts
1 - 88 were not
provided as claimed. Findings 52 - 54, 67 - 72.
89. Respondents knew that the services stated in the claims contained in counts
1 - 88 were false or
fraudulent. Findings 52 - 54, 67 - 72.
90. As reasonable medical providers, Respondents were under a duty to assure
that the claims
contained in counts 1 - 88 did not contain false statements of anesthesia time,
because Respondents knew
that the anesthesia records for the claims contained in counts 1 -88 contained
false information, and knew
that their clerical staff would rely on these records to prepare Medicare and
Medicaid claims. Findings 52 -
54, 67 - 73, 75.
91. Respondents did nothing to prevent false statements from being made in
the claims contained in
counts 1 - 88.
Findings 73, 75.
92. Respondents had reason to know that the services stated in the claims contained
in counts 1 - 88
were not provided as claimed. Findings 52 - 54, 67 - 73, 75.
93. Because Respondents had reason to know that the items or services stated
in the claims contained
in counts 1 - 88 were not provided as claimed, Respondents should have known
that the items or services
stated in these claims were not provided as claimed. Findings
52 - 54, 67 - 73, 75.
94. At the least, Respondents were indifferent to whether the items or services
stated in the claims
contained in counts 1 - 88 were provided as claimed. Findings 52 - 54, 67 -
73, 75.
95. On March 11, 1987, Respondent Keszler pleaded guilty to the Texas felony
offense of Tampering
With a Governmental Record, a violation of V.T.C.A., Texas Penal Code, Section
37.10(a)(2). (i.e., a
Texas Medicaid claim form.) Stip. 22; I.G. Exs. 331, 332; R. Ex. 17, 22.
96. The criminal charges against Respondent Keszler and his conviction were
the result of an investigation
into his anesthesia claims for Medicare and Medicaid. R. Ex. 17; Tr. at 771
- 773, 777 - 778.
97. In pleading guilty, Respondent Keszler admitted that he fraudulently overstated
anesthesia time in a
Medicaid claim. R. Ex. 16, 17.
98. On March 11, 1987, in the District Court of Angelina County, Texas, Respondent
Keszler was
convicted of a criminal offense related to the Medicaid program. R. Ex. 16,
17.
99. Respondent Keszler's conviction related to the claim described in count 39 of the I.G.'s Notice.
100. On January 12, 1990, I entered summary disposition against Respondents
on count 39, based on the
principle of collateral estoppel, in which I found that Respondents presented
or caused to be presented the
claim contained in count 39 in violation of section 1128A(a)(1)(A) and (B) of
the Act.
101. As part of his sentence, Respondent Keszler was ordered to make restitution
to the Medicare and
Medicaid programs in the amount of $37,500. R. Ex. 22.
102. Respondent Keszler agreed as part of his plea bargain to withdraw from
participation as a
participating physician in the Medicare and Medicaid programs for a period of
two and a half years. R. Ex.
17.
103. Respondent Keszler's plea agreement specifically did not release Respondent
from any civil liability.
R. Ex. 17
104. On July 13, 1987, the I.G. notified Respondent Keszler of his determination
to suspend Respondent
Keszler from participation in the Medicare program for a period of five years,
effective July 28, 1987, and
to direct Medicaid to suspend Respondent Keszler from the Medicaid program for
the same period of time,
pursuant to section 1128(a) of the Act and 42 C.F.R. 1001.100 et seq. I.G. Ex.
331.
105. Respondent Keszler was also notified that if he continued to submit claims
during the term of his
suspension, he could be liable under the Act. I.G. Ex. 331.
106. The effect of the suspension was that Medicare and Medicaid would not
pay for services furnished by
or at the direction of Respondents. I.G. Ex. 331, 336; Tr. at 121.
107. Respondents were barred by the suspension from indirectly obtaining reimbursement
from Medicare
or Medicaid for Medicare or Medicaid services, by inducing beneficiaries or
recipients to claim Medicare
reimbursement for services or medical direction furnished by Respondent Keszler.
42 CFR 1001.126;
section 1128(a)(1) of the Act, Tr. at 76 - 80.
108. Subsequent to Respondent Keszler's suspension, Respondents induced Medicare
beneficiaries to seek
reimbursement from Medicare for services provided by Respondent Keszler, or
at his direction, and to
remit that reimbursement to Respondents. I.G. Ex. 335; Tr. at 697 - 700, 800
- 804.
109. At Respondent Keszler's direction, Ms. Hines prepared and submitted to
Medicare unassigned claims
for services furnished while Respondent Keszler was suspended from Medicare.
Tr. at 697 - 700, 800 -
804; I.G. Ex. 89-1 - 312-1.
110. Ms. Hines prepared a letter which she showed to Respondent Keszler, and
which she sent to each of
Respondents' Medicare patients. I.G. Ex. 335.
111. Respondent Keszler personally reviewed and approved the letter. Tr. at
720; I.G. Ex. 335.
112. The letter instructed the Medicare beneficiary to sign an enclosed Medicare
reimbursement claim.
I.G. Ex. 335.
113. The letter stated that Respondents' billing office would then submit the
claim to Medicare. I.G.
Ex. 335.
114. The letter requested the beneficiary to endorse any Medicare reimbursement
checks, when
received, to Respondents. I.G. Ex. 335.
115. The letter added that if the beneficiary immediately endorsed the Medicare
reimbursement check
over to Respondents, Respondents would give the beneficiary a discount on any
unpaid balance of
Respondents' bill and would also file other insurance claims on behalf of the
beneficiary. I.G. Ex. 335.
116. Medicare will pay the first claim for services of an excluded or suspended
provider submitted by a
beneficiary, and then immediately give the beneficiary notice of the exclusion
or suspension, because
Medicare does not want a beneficiary to be harmed by the fact that he or she
may be unaware that a
provider has been excluded or suspended. 42 C.F.R. 1001.126(d); Tr. at 79 -
80, 83 - 85, 531.
117. Typically, a service provided by an anesthesiologist to a patient is the
first service which that
anesthesiologist provides to that patient, because anesthesia is linked to surgery,
which generally does not
involve multiple encounters. Tr. at 382 - 385, 967.
118. Many of the 172 Medicare claims which Respondents induced patients to
sign, and which
Respondents presented subsequent to their suspension, constituted the first
post-suspension reimbursement
claims for anesthesia services provided to those patients. See I.G. Ex. 89-1
- 260-1.
119. Respondents' billing office submitted claim forms marked "unassigned"
and signed by patients to
Medicare. These claim forms appeared to be submitted by beneficiaries. Blue
Cross was induced to pay
these claims, consistent with Medicare's policy of reimbursing a beneficiary's
first claim for services of a
suspended or excluded physician. Finding 116; I.G. Ex. 89-1 - 260-1, 89-2 -
260-2; Tr. at 78 - 79; I.G. Ex.
351.
120. After Respondent Keszler was suspended from participation in Medicare
and Medicaid, Respondents
presented or caused to be presented 172 unassigned Medicare claims, representing
services furnished by
Respondent Keszler or CRNAs under his direction, in violation of section 1128A(a)(1)(D)
of the Act. I.G.
Ex. 89-1 - 260-1
121. Subsequent to their suspension, Respondents induced Medicare beneficiaries
to sign most of the
claims for Medicare benefits contained in counts 89 - 260. See I.G. Ex. 89-1
- 260-1.
122. Pursuant to Respondents' directions beneficiaries who were patients of
Respondents returned to
Respondents the claims contained in counts 89 - 132, and 134 - 260, and Respondents
presented these
claims to Medicare for reimbursement. I.G. Ex. 89-1 - 132-1, 134-1 - 260-1.
123. The claim contained in count 133 was presented directly to Medicare by
a beneficiary who was a
patient of Respondents. I.G. Ex. 133-1.
124. Respondents were able to obtain reimbursement for the services claimed
in counts 89 - 260 by
inducing their patients to present claims and to remit any Medicare reimbursement
to Respondents.
Findings 108 - 115.
125. Under section 1128A(a)(1)(D), Respondents are strictly liable for submitting
or causing to be
submitted the 172 Medicare claims for services furnished by them during their
suspension. Findings 108 -
115, 119.
126. Respondents presented or caused to be presented the Medicare claims contained
in counts 89 -
260 during a period when they were suspended from participating in Medicare
and Medicaid, in violation
of section 1128A(a)(1)(D) of the Act. Findings 104 - 115, 119.
127. Respondents had information which put them on notice that causing the
172 claims contained in
counts 89 - 260 to be presented would violate section 1128A(a)(1)(D) of the
Act. Findings 104 - 105.
128. Respondents did not prove that they were misled by government officials
into believing that they
could induce patients to present Medicare claims for Respondents' services during
Respondent Keszler's
suspension and have the patients remit Medicare reimbursement to Respondents.
129. Respondents did not prove that they believed in good faith that Medicare
reimbursement
regulations or the Act permitted them to induce patients to present Medicare
claims for Respondents'
services during Respondent Keszler's suspension and have the patients remit
Medicare reimbursement to
Respondents.
130. Respondents did not prove that they believed in good faith that they could
withdraw as
participating providers from Medicare and continue to receive Medicare reimbursement,
notwithstanding
Respondent Keszler's suspension.
131. The Act provides for the imposition of an assessment in lieu of damages
of not more than twice the
amount of each item or service which is falsely claimed. Social Security Act,
section 1128A(a).
132. The Act provides for the imposition of a penalty of up to $2,000 for each
item or service which is
falsely claimed. Social Security Act, section 1128A(a).
133. The Act provides for the imposition of exclusions against parties found
to have violated the Act,
in order to protect the integrity of federally-funded health care programs.
Social Security Act, section
1128A(a).
134. In determining the appropriate amount of assessments and penalties to
be imposed against
Respondents, the Act and regulations direct that both aggravating and mitigating
factors be considered.
Social Security Act, Section 1128A; 42 C.F.R. 1003.106.
135. If there are substantial or several aggravating circumstances, the aggregate
amount of penalties and
the assessment should be set at an amount sufficiently close to or at, the maximum
permitted by law. 42
C.F.R. 1003.106(c).
136. In proceedings brought pursuant to the Act, a Respondent has the burden
of proving the existence of
any mitigating factors. 42 C.F.R. 1003.114(d).
137. The unlawful claims in this case were presented over a lengthy period
of time, from November 2,
1983 through June 9, 1988. I.G. Ex. 27-1, 260-1.
138. The 260 claims which Respondents unlawfully presented or caused to be
presented are a substantial
number of unlawful claims. 42 C.F.R. 1003.106(b)(1).
.
139. For the 260 claims at issue, Respondents falsely claimed a substantial
amount of money, over
$90,000. 42 CFR 1003.106(b)(1); I.G. Ex. 1-1 - 260-1.
140. On the basis of the false claims contained in counts one through 88, Medicare
and Medicaid
reimbursed Respondents more than $4,000. 42 CFR 1003.106(b)(1); I.G. Ex. 1-3
- 88-3,; Tr. at 505
141. On the basis of the false claims contained in counts 89 - 260, Medicare
reimbursed Respondents more
than $25,000.00. 42 CFR 1003.106(b)(1); I.G. Ex. 89-2 - 260-2; Tr. at 506.
142. Given the resources allotted to the billing activity at Medicare, Medicare
cannot independently verify
the amount of time billed on every anesthesia claim, due to the volume of claims
received. In 1983 Blue
Cross received approximately 70,000 Medicare claims a day, and currently it
receives 100,000 claims a
day. Tr. at 273 - 274.
143. Medicare and Medicaid rely on the trustworthiness of participating anesthesiologists
to state their
anesthesia times truthfully when they certify that their claim forms contain
no misrepresentations. Tr. at 70
- 71, 229, 232 - 234; I.G. Ex. 349.
144. Respondents' actions seriously damaged the reputation for probity and
the integrity of the
Medicare and Medicaid programs.
145. Penalties totalling $150,000.00 and assessments of $100,000.00 are appropriate
in this case. Findings
137 - 141.
146. Respondents did not prove that the imposition against them of penalties
totalling $150,000.00, and
assessments of $100,000.00, jointly and severally, would jeopardize Respondents'
ability to continue as
health care providers. 42 CFR 1003.106(b)(4); R. Ex. 75, 76, 77; Tr. at 829
- 843, 888 - 895, 901 - 902.
147. Exclusions of Respondents from participating in Medicare and Medicaid
for ten years are necessary
to protect the integrity of federally funded health care programs. Social Security
Act, section 1128A;
Findings 137 - 141.
ANALYSIS
1. Respondents presented or caused to be presented claims for items or services
in violation of
section 1128A of the Act.
This case involves 260 Medicare or Medicaid claims for anesthesia services.
Of these, 88 claims are
claims for anesthesia services provided by or at the direction of Respondent
Keszler which the I.G. alleges
were not provided as claimed or were false or fraudulent, in violation of sections
1128A(a)(1)(A) and (B)
of the Act. The remaining 172 claims are claims for anesthesia services provided
by or at the direction of
Respondent Keszler which the I.G. alleges were furnished during a period when
Respondent Keszler was
suspended from participating in the Medicare and Medicaid programs. The I.G.
alleges that Respondents
presented or caused to be presented these 172 claims in violation of section
1128A(a)(1)(D) of the Act.
Respondent Keszler is an anesthesiologist. Respondent Keszler, P.A., is a professional
association which is
solely owned and operated by Respondent Keszler. All of the claims at issue
are for anesthesia provided
by Respondent Keszler or at his direction during surgery at Memorial Medical
Center in Lufkin, Texas.
For all of the dates in question, Respondent Keszler was on the staff of Memorial
Medical Center. During
the period of time covered by the first 88 claims, Respondent Keszler served
as the chief of the
anesthesiology department at Memorial Medical Center.
The 260 claims at issue are claims for services which were allegedly provided
by Respondents or by
certified registered nurse anesthetists employed by Respondents between November
1983 and June 1988.
The first 88 claims are for services which Respondents are alleged to have provided
between November
1983 and November 1984. The remaining 172 claims are for services which Respondents
are alleged to
have provided between September 1987 and June 1988.
a. Violation of sections 1128A(a)(1)(A) and (B).
Section 1128A(a)(1)(A) of the Act makes it unlawful for a party to present
or cause to be presented claims
for items or services where that party knows or should know that the items or
services were not provided as
claimed. Section 1128A(a)(1)(B) makes it unlawful for a party to present or
cause to be presented claims
for items or services where that party knows or should know the claim is false
or fraudulent. The evidence
in this case establishes that Respondents presented or caused to be presented
the first group of 88 claims in
violation of sections 1128A(a)(1)(A) and (B).
There is no dispute that Respondents either presented or caused these 88 claims
to be presented. The
claims were actually presented for reimbursement by Respondent Keszler, P.A.
However, Respondent
Keszler owned and controlled Respondent Keszler, P.A., and its every action
was at his direction. Findings
1-3
The evidence establishes that the first 88 claims contain false statements
of the amount of time spent by
Respondent Keszler or by his CRNA employees providing anesthesia. These claims
were generated by
Respondents from anesthesia records which falsely state the time spent providing
anesthesia. The
anesthesia records were created by Respondent Keszler or by his CRNA employees
and were used by
Respondents' office staff as the basis for Medicare and Medicaid reimbursement
claims. Findings 16, 19-
22, 24-38, 62-73, 75.
Respondent Keszler determined that the reimbursement formula utilized by Medicare
and Medicaid to
compensate for anesthesia services reimbursed him inadequately. Therefore, he
ordered his CRNA
employees to overstate anesthesia time in anesthesia records, generally by one
hour per procedure, in order
to increase his reimbursement. Findings 67-72.
Prior to 1983, Medicare and Medicaid reimbursed anesthesiologists for their
services based on
anesthesiologists' charges for these services. The time anesthesiologists spent
providing services was not
an element of the reimbursement formula. However, this changed with the enactment
of the Tax Equity
and Fiscal Responsibility Act of 1982 (TEFRA), Pub. L. 97-248, and the issuance
of implementing
regulations. 42 C.F.R. 405.550 et seq. These regulations mandated that, for
Medicare, reimbursement for
anesthesia services be established from a formula which included reimbursement
for a base unit (a payment
determined from the type of anesthesia service provided which reflected the
complexity and difficulty of
the service) and for the time actually spent providing anesthesia. 48 Fed. Reg.
8929 (March 2, 1983). The
regulations permitted anesthesiologists to charge for time spent providing anesthesia:
beginning from the time the physician or anesthetist begins to prepare the
patient for induction of
anesthesia, and ending when the patient may be safely placed under post-operative
supervision and the
physician or anesthetist is no longer in personal attendance.
42 C.F.R. 405.553(b)(2).
Medicare assured that the substance of these regulations was disseminated to
anesthesiologists and their
office staffs, and Respondents received publications advising them of the reimbursement
changes.
Findings 58-60. The Texas Medicaid program adopted the same reimbursement formula
as was contained
in the new regulations, and notified health care providers, including Respondents,
of this change. Findings
64-66.
Respondent Keszler instructed his employees to overstate the amount of time
spent providing anesthesia in
order to evade the reimbursement limitations established by the regulations.
His purpose is underscored by
the fact that he limited the directive that anesthesia time be overstated only
to Medicare and Medicaid
cases. He told his employees that overstating anesthesia time in such cases
was necessary, because he had
to do something to bring his Medicare reimbursement up to the reimbursement
level that he received in
private cases, and overstating anesthesia time was a means of doing so. Tr.
at 438. Respondent Keszler
told his staff to "f--- them b-------" (expletive deleted) at Medicare
and Medicaid. Tr. at 156.
Respondent Keszler denies instructing his employees to overstate anesthesia
time. He argues that the
anesthesia time recorded in anesthesia records was intended to capture the time
patients spent in post-
anesthesia recovery ("PAR"), which he assumed, in good faith, that
he was entitled to claim as part of the
reimbursable time units for anesthesia services. Respondents assert that either
Respondent Keszler or
CRNAs personally attended patients throughout their stays in PAR. They claim,
therefore, that under their
good faith interpretation of the regulations, they honestly believed that they
were entitled to claim
reimbursement for that time as anesthesia services.
Respondent Keszler's claim that he did not instruct CRNAs to overstate anesthesia
time is not credible. His
testimony is belied by the credible testimony of CRNAs who were employed by
Respondents and who
executed Respondent Keszler's instructions to overstate anesthesia time. Respondent
Keszler's assertion
that he relied in good faith on regulatory language which he interpreted as
permitting him to claim
reimbursement for PAR time defies the plain meaning of the regulation or the
explanatory documents
which he received from Medicare. Moreover, the evidence fails to support Respondents'
contention that
Respondent Keszler or CRNAs personally attended patients while they were in
PAR. Therefore,
Respondents had no basis to claim reimbursement for PAR time even under their
"interpretation" of
Medicare reimbursement criteria.
The I.G. produced as witnesses several CRNAs who had been employed by Respondents.
They credibly
testified that Respondent Keszler instructed them to add one hour of anesthesia
time to each procedure, as a
means of increasing Medicare and Medicaid reimbursement. They testified that,
when they failed to
execute this instruction, Respondent Keszler would direct them to "correct"
anesthesia records to reflect the
added time. The testimony of each CRNA was reinforced by its consistency with
that of the other CRNAs.
The testimony was also reinforced by its consistency with the anesthesia records
generated in the cases that
resulted in the 88 claims. Not only do these records corroborate the testimony
of the CRNAs as to the
instructions they received from Respondent Keszler, they establish that anesthesia
time was overstated in
each of the 88 claims. These records show that anesthesia time was entered by
the person who provided
anesthesia both in graphic form and as a numeric total. In nearly all cases,
the graphs show anesthesia time
roughly equivalent to the amount of time spent on the case by the surgeon. The
graphs record the moment
that induction of anesthesia occurred and the moment that the patient was brought
out of anesthesia and
sent to PAR. They also record the various interim procedures rendered by the
person providing anesthesia.
The graphs accurately record the time spent on a particular case by the person
who provided anesthesia.
By contrast, the numeric statement of anesthesia time in all 88 cases overstates
the amount of time spent
providing anesthesia, generally by one hour. It is also evident from these records
that, in many cases, the
total anesthesia time stated on the record was altered to increase the total
time stated by one hour. Finding
72.
Respondents argue that the CRNA witnesses were biased. There is evidence in
the record to show that
these individuals displayed animus towards Respondents. Nevertheless, I find
the testimony of the CRNAs
to be credible, because it is plausible, consistent with that given by other
witnesses, and consistent with the
records which these individuals generated.
Respondents assert that they interpreted the regulatory phrase "ending
when the patient may be safely
placed under post-operative supervision and the physician or anesthetist is
no longer in personal
attendance" to permit anesthesia claims to incorporate PAR time as an element
of the time units claimed,
provided that anesthesia personnel attended to patients while they were in PAR.
This is not a reasonable interpretation of the reimbursement criteria. The
testimony of several witnesses,
including personnel who were responsible for providing PAR services at Memorial
Medical Center, was
that in nearly all cases PAR constituted a holding process to monitor patients'
vital signs until patients
could be returned to their hospital beds (or in outpatient surgeries such as
cataract operations, discharged
from the hospital). PAR is non-reimbursable "post-operative supervision"
as is described in the relevant
Medicare reimbursement regulations and is not part of the anesthesia process.
I conclude that no
reasonable person who is familiar with the distinctions between providing anesthesia
and PAR could be
confused by this regulatory language. Respondents' assertions that they were
confused or misled are
therefore not credible.
This is not to suggest that an anesthesiologist might not be required to intervene
in PAR, and that the
regulations would deny the anesthesiologist reimbursement for that intervention.
The regulations
contemplate emergency situations or circumstances where emergence from anesthesia
might occur while
the patient is physically removed from the operating room. The regulations enable
anesthesiologists to be
reimbursed in such circumstances. However, reimbursable post-surgery intervention
is documented in
only a few of the 88 claims. The medical records generated in those few cases
document only brief
intervention in PAR by anesthesia personnel, and not the extensive time beyond
actual anesthesia time
claimed by Respondents. Findings 52-54.
I do not conclude that Medicare regulations require anesthesia time to be coextensive
with surgery in order
to be reimbursable. Induction of anesthesia may begin prior to surgery. Emergence
from anesthesia may
occur after surgery is concluded. In both circumstances, the time spent on the
case by the anesthesiologist
or by a medically directed CRNA is reimbursable. However, that does not give
an anesthesiologist carte
blanche to routinely add time to his actual services in order to increase his
Medicare or Medicaid
reimbursement. In each of the 88 cases, the anesthesia record was falsified
by adding time to the time
spent actually providing anesthesia. The inevitable consequence in each case
was a false reimbursement
claim.
Respondents also argue that the regulation could be read to permit reimbursement
for time spent by an
anesthesiologist or a CRNA attending a patient in PAR, regardless of whether
that time relates to the
provision of anesthesia. I disagree that the regulations permit anesthesiologists
to be reimbursed for
routine monitoring in PAR. However, there is no proof that Respondents or their
staff actually attended
patients in PAR as Respondents now claim to have occurred. For the most part,
the records do not
document the presence of anesthesiologists or CRNAs in PAR. Respondents' former
employees testified
that their involvement in PAR was minimal. I do not find credible the testimony
of one witness that
Respondent Keszler mostly attended patients in PAR. The testimony was inconsistent
with the weight of
the evidence in this case.
Finally, Respondents' explanation for the 88 claims is belied by the fact that
Respondent Keszler
effectively admitted his fraud by pleading guilty in 1987 to a Texas state criminal
charge of tampering with
a government record. Respondent Keszler was charged with defrauding the Texas
Medicaid program, by
filing a Medicaid claim (count 39 in this case) which falsely stated anesthesia
time. As part of a plea
agreement, Respondent Keszler explicitly admitted to the elements of the offense.
Although the claim
contained in count 39 is but one of 88 claims at issue here, it is apparent
that Respondent Keszler's
fraudulent presentation of that claim is part and parcel of the fraud Respondents
committed with respect to
the remaining 87 claims.
Respondents knew that the items claimed in the first 88 claims were not provided
as claimed and were false
and fraudulent. A party "knows" that an item or service is not provided
as claimed or is false or fraudulent
when he or she knows that the information that he or she is placing or causing
to be placed on a claim is
untrue. Edward J. Petrus, Jr., M.D., and The Eye Center of Austin, DAB Civ.
Rem. C-147 (1990); Tommy
G. Frazier and Prater Drugs, DAB Civ. Rem. C-127 (1990); Anesthesiologists Affiliated
et al. and James E.
Sykes, D.O. et al., DAB Civ. Rem. C-99, C-100 (1990); Thuong Vo, M.D. and Nga
Thieu Du, DAB Civ.
Rem. C-45 (1989). It is not necessary for a respondent to personally make a
false claim in order to satisfy
the "knows" test. All that is necessary to satisfy the test is that
a respondent issue instructions concerning
the preparation of claims which he or she knows will result in the inclusion
of false information in the
claims.
Here, the evidence establishes that Respondent Keszler instructed CRNAs to
make false statements in
documents which Respondents knew would be used to prepare Medicare and Medicaid
claims for
anesthesia services. The necessary consequence of these instructions was that
false claims would be
presented based on these false statements of anesthesia time. Respondents knew
that Respondent Keszler's
instructions were implemented by Respondents' employees. The evidence establishes
that Respondent
Keszler personally reviewed anesthesia records to assure that his directives
as to anesthesia time were
being implemented. Respondent Keszler also signed many of the 88 claims.
Although I have concluded that Respondents knew that the items or services
in the 88 claims were not
provided as claimed or were false or fraudulent, the evidence also establishes,
alternatively, that
Respondents had reason to know that the items or services in the 88 claims were
not provided as claimed.
The "reason to know" standard contained in section 1128A(a)(1)(A)
prior to December 22, 1987, created a
duty on the part of a provider to prevent the submission of false claims where:
(1) the provider had
sufficient information to place him, as a reasonable medical provider, on notice
that the claims presented
were for items or services not provided as claimed, or (2) there were pre-existing
duties which would
require a provider to verify the truth, accuracy, and completeness of claims.
Petrus and The Eye Center of
Austin, supra; Frazier and Prater Drugs, supra; Anesthesiologists Affiliated,
supra; Vo, supra; George A.
Kern, M.D., DAB Civ. Rem. C-25 (1987).
Assuming that Respondents did not know that the 88 claims were for items or
services that were not
provided as claimed, they were aware of information to place them, as reasonable
medical providers, on
notice that the claims presented were for items or services which were not provided
as claimed.
Respondents knew that Medicare defined anesthesia time in a manner which was
palpably inconsistent
with the way in which Respondents chose to define it. Assuming further that
Respondents were confused
as to the meaning of Medicare and Medicaid reimbursement criteria, they were
under a duty to make
reasonable inquiries to find out if their "interpretation" was correct.
They did not do so.
Finally, the evidence establishes that Respondents should have known that the
88 items or services were
not provided as claimed or were false or fraudulent. The broadest standard of
liability under the Act is
"should know." This standard subsumes reckless disregard for the consequences
of a person's acts. It
subsumes those situations where a respondent has reason to know that items or
services are not provided as
claimed or are false or fraudulent. "Should know" also subsumes negligence
in preparing and submitting
or in directing the preparing and submitting of claims or reckless disregard
for the truth or falsity of claims.
Mayers v. U.S. Dept. of Health and Human Services, 806 F.2d 995 (11th Cir. 1986),
cert. denied, 484 U.S.
822 (1987); Petrus and The Eye Center of Austin, supra; Frazier and Prater Drugs,
supra; Anesthesiologists
Affiliated, supra; Vo, supra.
Inasmuch as the Respondents had reason to know that the items or services were
not provided as claimed,
they should have known that they were not provided as claimed, or that they
were false or fraudulent.
Furthermore, the evidence establishes that at the least, Respondents displayed
reckless indifference for
whether relevant Medicare and Medicaid reimbursement criteria permitted them
to claim PAR time as
anesthesia time and for the truth of the claims which they presented.
b. Violation of section 1128A(a)(1)(D).
Section 1128A(a)(1)(D) of the Act makes it unlawful for a party to present
or cause to be a presented a
claim for a medical or other item or service during a period when the party
was excluded (or, under
previous versions of section 1128, suspended) from participation in Medicare
or Medicaid.
Congress intended that section 1128A(a)(1)(D) apply not only to reimbursement
claims which are
presented by excluded providers, but to those claims presented by Medicare beneficiaries
and Medicaid
recipients at the request of excluded providers. One purpose of section 1128A(a)(1)(D)
is to prevent
excluded providers from being reimbursed through the back door by beneficiaries
and recipients, on a non-
assigned basis. See S. Rep. No. 109, 100th Cong., 1st Sess. 3, reprinted in
1987 U.S. Code Cong. &
Admin. News, 695.
On the other hand, it is neither Congress' nor the Secretary's purpose to penalize
beneficiaries and
recipients who obtain treatment from an excluded provider, not knowing that
the provider has been
excluded. That problem is addressed for Medicare beneficiaries by a regulation
which provides that the
first claim submitted by a beneficiary for services rendered by an excluded
provider will be reimbursed. 42
C.F.R. 1001.126(d)(1). This regulation was not intended to redound to the advantage
of excluded
providers.
Unlike sections 1128A(a)(1)(A) and (B), section 1128A(a)(1)(D) does not require
proof of culpability as
an element of liability. The plain meaning of this section is to impose a strict
liability standard. Petrus and
the Eye Center of Austin, supra. The I.G. satisfies his burden under this section
by proving that an
excluded provider presents claims or causes claims to be presented during the
period when he or she is
excluded.
The I.G. met that burden with respect to the 172 claims at issue here. As is
noted supra, Respondent
Keszler pleaded guilty in a Texas court to the state criminal offense of tampering
with a government
record. Based on this conviction, and pursuant to section 1128(a) of the Social
Security Act, Respondent
Keszler was suspended, effective July 28, 1987, from participating in Medicare
and Medicaid.
Respondents presented or caused to be presented all of the 172 claims subsequent
to that date and during a
period when Respondent Keszler was suspended from participation in Medicare
and Medicaid. All of the
172 claims recite on their face that they are for services provided by Respondent
Keszler or at his direction.
Respondents prepared the claim forms for 171 of the 172 claims and mailed them
to the patients to whom
they had provided services. Findings 122-123. They requested the patients to
sign the claims and to return
them to Respondents' office. Respondents then mailed the signed claims to Medicare
and Medicaid.
Respondents requested the patients to remit to Respondents any reimbursement
checks that the patients
received, based on the claims. Findings 108-115, 119-121, 124.
Although it is not necessary to find culpability as an element of a violation
of section 1128A(a)(1)(D), I
conclude that Respondents manifest a high degree of culpability with respect
to the 172 claims.
Respondents knew that they had been suspended from participating in Medicare
and Medicaid. They knew
that they would not be reimbursed by these programs during their suspension.
I.G. Ex. 331. In light of
that, it is evident that Respondents' plan to have patients submit claims and
to remit reimbursement checks
for those claims to Respondents was a scheme to evade the suspension.
Respondents assert that section 1128A(a)(1)(D) is inapplicable to the 172 claims.
They note that the
section refers to providers who have been "excluded" from participation
in Medicare and Medicaid. They
argue that an "exclusion" is not synonymous with a "suspension"
and that, therefore, the section does not
apply.
I disagree with this argument. It is evident from the language of section 1128A(a)(1)(D)
and its history
that the term "exclusion" as presently contained in the Act is synonymous
with the term "suspension" in
Section 1128(a) prior to September 1987. Therefore, section 1128A(a)(1)(D) applies
both to excluded and
suspended health care providers.
Respondents were suspended from participation in Medicare and Medicaid pursuant
to the then-effective
section 1128(a) of the Social Security Act. At the date of Respondents' suspension
(July 1987), section
1128(a) mandated "suspension" of providers who were convicted of program-related
crimes.
Congress revised section 1128 in August 1987. The revisions were intended to
both broaden the reach of
the section and to strengthen its provisions. Congress added language which
expanded the scope of the
mandatory exclusion provisions. Social Security Act, sections 1128(a)(1) and
(2). For the first time,
Congress adopted a minimum term of exclusion for mandatory exclusion cases.
Social Security Act,
section 1128(c)(3)(B). It adopted permissive exclusion provisions which gave
the Secretary of the
Department of Health and Human Services authority to impose exclusions in certain
cases. Social Security
Act, sections 1128(b)(1)-(14). In revising the law, Congress substituted the
word "exclusion" for the word
"suspension," which had been contained in previous versions of section
1128, including the version which
immediately predated the 1987 revision. Congress simultaneously revised section
1128A, enacting the
present section 1128A(a)(1)(D). Pub. L. 100-93, 101 Stat. 680 (1987). The revised
section
1128A(a)(1)(D) was made parallel with the revised section 1128, applying to
parties who had been
excluded pursuant to section 1128.
The distinction now urged by Respondents rests solely on the semantic change
made by Congress in 1987,
rather than on any expression of Congressional intent or legislative history.
There is nothing in this history
which suggests that Congress intended to distinguish between suspended and excluded
parties by its
enactment of section 1128A(a)(1)(D). To the contrary, the revisions to section
1128 make it plain that
Congress intended the words "suspension" and "exclusion"
to be used interchangeably and to be
synonymous, and that it intended its revision of section 1128A to be applicable
both to suspended and
excluded providers.
Respondents also argue that they were misled by 42 C.F.R. 1001.126(d)(1) into
believing that they were
entitled to encourage their patients to each submit for reimbursement one claim
for services, and to have
the patients remit reimbursement checks to Respondents. They base their argument
on the language of the
regulation. This regulation provides, in relevant part:
Denial of payment to beneficiaries. If a beneficiary submits claims for items
or services furnished by a
suspended party . . . , on or after the effective date of the suspension --
(1) HCFA . . . [the Health Care Financing
Administration] will pay the first claimsubmitted by the beneficiary and immediatelygive
the beneficiary notice of the suspension.
As is noted above, the regulation was written to protect beneficiaries who
might, without being aware that
a provider had been excluded, obtain treatment from that provider. The regulation
was plainly not
intended to permit providers an avenue by which to circumvent exclusions.
That is evident from the context of the regulation. The regulation is a subsection
of 42 C.F.R. 1001.126.
This regulation unequivocally states in its other subsections that payment may
not be made to a suspended
provider for services furnished during a period of suspension. 42 C.F.R. 1001.126(a),
(c).
Respondents' assertion that they in good faith interpreted the regulation to
permit them to continue to
receive reimbursement from patients for Medicare and Medicaid services is not
credible, because no
rational person would be persuaded by the absurd result of their reasoning.
Rather, their asserted
interpretation is a pretext for Respondents to continue to do what they should
have known they were
forbidden to do. If the regulation were read as Respondents assert, it would
effectively render toothless
most suspensions and exclusions. What purpose would exist in suspending or excluding
a provider, if that
provider could simply direct his or her patients to file claims for his services,
and then demand
reimbursement from those patients?
Respondents also argue that Respondent Keszler was led by his attorney to believe
that his patients could
each submit one claim for Medicare or Medicaid reimbursement for services provided
by him after the date
of his suspension, and could remit reimbursement checks to him. He produced
his attorney as a witness.
The attorney testified that, during a conversation that he was privy to, an
agent of the I.G. stated
Respondent Keszler's patients could be reimbursed for the first service provided
by Respondent Keszler for
those patients subsequent to the date of his suspension.
While I do not dispute the accuracy of this witness' recollection, it provides
no basis for Respondents to
conclude that they could continue to obtain Medicare and Medicaid reimbursement
while suspended. The
attorney's recollection of the agent's statement coincides with the language
of 42 C.F.R. 1001.126(d)(1).
That language, as I have noted, permits a patient of an excluded provider to
be reimbursed for the first
treatment the patient receives from such provider subsequent to the provider's
suspension or exclusion. It
does not permit, and cannot be legitimately read to permit, an excluded provider
to continue to receive
Medicare and Medicaid reimbursement for his or her services.
2. Assessments, penalties, and exclusions are appropriate in this case.
The remedial purpose of the Act is to protect government financed health care
programs from fraud and
abuse by providers. Mayers, supra, 806 F.2d at 997; Petrus and the Eye Center
of Austin, supra at 43;
Frazier and Prater Drugs, supra at 23; Anesthesiologists Affiliated, supra at
58; Vo, supra, at 22. The
assessment and penalty provisions of the Act are designed to implement this
remedial purpose in two ways.
One is to enable the government to recoup the cost of bringing a respondent
to justice and the financial loss
to the government resulting from the false claims presented by that respondent.
The other is to deter other
providers from engaging in the false claims practices engaged in by a particular
respondent. Mayers,
supra, at 999; Frazier and Prater Drugs, supra, at 23; Anesthesiologists Affiliated,
supra, at 58; Vo, supra,
at 22.
The exclusion remedy is designed to protect the Medicare and Medicaid programs
from future misconduct.
Frazier and Prater Drugs, supra, at 23; Anesthesiologists Affiliated, supra,
at 58. It is thus distinguishable
from assessments, which compensate the government for wrongs already committed.
Medicare and
Medicaid programs have a contractual relationship with those providers who treat
beneficiaries and
recipients and present claims for reimbursement. Federally-funded health care
programs are no more
obligated to continue to deal with dishonest or untrustworthy providers than
any purchaser of goods or
services would be obligated to deal with a dishonest or untrustworthy supplier.
The exclusion remedy
allows the Secretary to suspend his contractual relationship with those providers
of items or services who
are dishonest or untrustworthy. One purpose of any exclusion, therefore, is
to exclude a provider for a
sufficient period of time to assure that these programs will not continue to
be harmed by dishonest or
untrustworthy providers of items or services.
Exclusion serves an ancillary purpose of deterring providers of items or services,
including those providers
against whom the remedy is imposed, from engaging in the same or similar misconduct
as that engaged in
by the excluded providers. In that respect, it is an exemplary remedy because
it reinforces the penalties
which may be imposed pursuant to the Act. Frazier and Prater Drugs, supra, at
23; Anesthesiologists
Affiliated, supra, at 58.
The Act and implementing regulations provide that a penalty of up to $2,000.00
and an assessment of not
more than twice the amount claimed may be imposed on a respondent for each item
or service which that
respondent presents or causes to be presented in violation of the Act. Social
Security Act, section
1128A(a); 42 C.F.R. 1003.103, 1003.104. The maximum penalties which I may impose
against
Respondents in this case are $520,000.00, based on their presenting 260 claims
in violation of the Act. The
maximum assessments which I may impose exceed $180,000.00, based on Respondents
having claimed
more than $90,000.00 on the 260 claims. The I.G. has requested that I impose
penalties of $390,000.00
and assessments of $148,843.54.
Neither the law nor regulations provide for a maximum exclusion which I may
impose. However, the
regulations provide that the length of the exclusion should be determined by
the same criteria that I employ
to determine the appropriate amount of penalties and assessments. 42 C.F.R.
1003.107. In this case, the
I.G. has requested that I exclude each Respondent for ten years.
Regulations provide that, in determining the amount of penalties and assessments,
I may consider, as
nonbinding guidelines, factors which may be either mitigating or aggravating.
These include: (1) the
nature of the claim or request for payment and the circumstances under which
it was presented, (2) the
degree of culpability of the person submitting the claim or request for payment,
(3) the history of prior
offenses of the person submitting the claim or request for payment, (4) the
financial condition of the person
presenting the claim or request for payment, and (5) such other matters as justice
may require. 42 C.F.R.
1003.106(a).
A respondent has the burden of proving the presence of mitigating factors,
including financial hardship. 42
C.F.R. 1003.114(c). The regulations provide that, in cases where mitigating
factors preponderate, the
penalties and assessments should be set correspondingly below the maximum permitted
by law. 42 C.F.R.
1003.106(c)(1). The regulations also provide that, in cases where aggravating
factors preponderate, the
penalties and assessments should be set close to the maximum permitted by law.
42 C.F.R.
1003.106(c)(2).
The Act has been interpreted to permit imposition of penalties and assessments
which exceed the amount
actually reimbursed to a respondent for items or services which were unlawfully
claimed. Chapman v.
U.S. Dept. of Health & Human Services, 821 F.2d 523 (10th Cir. 1987); Mayers,
supra, 806 F.2d at 999.
This reflects the legislative conclusion that activities in violation of the
Act "result in damages in excess of
the actual amount disbursed by the government to the fraudulent claimant."
I impose assessments of $100,000.00 and penalties of $150,000.00 against Respondents,
jointly and
severally, and I exclude them from participating in Medicare and Medicaid for
ten years. The assessments
and penalties will adequately compensate the government for the damages caused
by Respondents. The
penalties will, in conjunction with the exclusions that I am imposing, provide
a reasonable deterrent. The
exclusions will adequately serve to protect federally-funded health care programs
from further fraud by
Respondents and will operate as an additional deterrent.
a. Assessments.
There are several ways to measure the damages caused to the government by these
Respondents. They
unlawfully claimed more than $90,000.00 from Medicare and Medicaid. As a consequence
of
Respondents' unlawful claims, Medicare and Medicaid reimbursed approximately
$30,000.00 to which
Respondents were not entitled. Findings 139-141.
The government sustained additional costs by virtue of the investigation which
was necessary to bring
Respondents to justice. The I.G. produced the testimony of an agent concerning
the extensive efforts
necessary to put together the evidence of Respondents' unlawful conduct. Thus,
assessments of
$100,000.00 will serve to recoup the pecuniary damages the government suffered
as a result of
Respondents' misconduct.
The damages caused to Medicare and Medicaid by Respondents' fraud exceeds any
quantifiable pecuniary
loss. Respondents' conduct damaged the integrity and the reputation for probity
of the Medicare and
Medicaid programs. Those damages cannot be quantified in dollars. The I.G. established
that in Texas,
alone, federally-funded health care programs receive more than 100,000 reimbursement
claims per month.
These programs are without the wherewithal to systematically audit claims. Providers
of health care are
essentially trusted to do the right thing when filing reimbursement claims.
The programs, therefore, are
open to the depredations of those who would commit wholesale fraud.
Respondents' fraud illustrates just how vulnerable these programs are. There
was nothing complex or
sophisticated about Respondents' scheme. Respondents' fraud was evident upon
review of the relevant
claims and treatment records. However, Respondents were able to perpetrate their
scheme for a
considerable period of time, because Medicare and Medicaid depended on Respondents
to be honest.
Respondents' misconduct therefore raises serious questions about the integrity
of Medicare and Medicaid,
because its open and blatant nature suggests that even the most unsophisticated
theft of program funds may
go undetected. Such obvious, and for a time, successful fraud causes incalculable
damages to the
reputation of these programs. For this, the government deserves compensation.
b. Penalties.
The penalties of $150,000.00 which I impose against Respondents will, in conjunction
with the
assessments that I impose, serve to compensate the government for the damage
caused by Respondents to
the integrity of the Medicare and Medicaid programs. They will also serve to
deter others from engaging
in the fraud committed by Respondents.
The I.G. established the presence of many aggravating factors in this case.
The 88 false claims presented
by Respondents were presented in furtherance of a deliberate scheme to defraud
Medicare and Medicaid.
42 C.F.R. 1003.106(b)(1). The 172 claims which Respondents caused to be presented
after Respondent
Keszler's suspension became effective were presented as part of a plan to circumvent
and thwart that
suspension. Id. The claims in this case were presented over a lengthy period
of time. Id. Respondents
unlawfully claimed more than $90,000.00, a substantial sum. Id. Findings 137-141.
The I.G. also established a very high degree of culpability. Respondents knew
that the 88 false claims
were fraudulent. Respondents at least had reason to know that the 172 claims
they presented or caused to
be presented during the period of Respondent Keszler's suspension contravened
the terms of the suspension
and relevant laws. 42 C.F.R. 1003.106(b)(2). Furthermore, at the time Respondents
presented or caused
the 172 post-suspension claims to be presented, Respondent Keszler already had
been found criminally
liable for fraud against Medicaid. 42 C.F.R. 1003.106(b)(2). Findings 83-95,
126-127.
Respondents failed to prove the presence of mitigating factors. Respondents
argued, by way of mitigation,
that the claims at issue were the product of their misunderstanding or confusion
about relevant regulations
and reimbursement criteria. However, I have concluded that the regulations and
criteria which
Respondents claim to be ambiguous and confusing were, in fact, not ambiguous
or confusing.
Respondents' arguments are after-the-fact rationalizations designed to obfuscate
willful misconduct.
Respondents attempted to prove that they were financially incapable of paying
the penalties and
assessments sought by the I.G. I am not persuaded by the evidence which Respondents
offered. It was at
best, incomplete and anecdotal. For example, Respondents introduced incomplete
corporate tax returns for
Respondent Keszler, P.A. These returns did not establish a complete financial
picture of that Respondent.
They shed no light on the financial circumstances of Respondent Keszler. Respondents
did not introduce
any of Respondent Keszler's personal tax returns, nor did they introduce any
other of his personal financial
records.
Respondent Keszler testified that he was without resources to pay penalties
and assessments. I am not
satisfied that his unsupported assertions of financial distress are credible,
particularly in light of the fact
that he offered no documentation to support his statements. Moreover, I found
Respondent Keszler's
testimony to be generally not credible. His lack of credibility on other issues
impugns his testimony as to
his financial resources.
My decision to impose penalties totalling $150,000.00 reflects, as I have stated,
my conclusion as to the
damages sustained by the government, and my finding that there exists a need
to impose a credible
deterrent in this case. It is justified by the presence of aggravating factors
and the absence of mitigating
factors. Indeed, were I to simply decide penalties based on the presence of
aggravating factors and the
absence of mitigating factors, I could easily justify penalties in an amount
much greater than that which I
have imposed.
However, the purpose of the Act is remedial and not punitive. The determination
of penalties in particular
cases must be based on the remedial considerations which I have identified,
supra, and not just on those
criteria which would normally be used to determine punishment. Penalties and
assessments which are
grossly disproportionate to the costs sustained by the government would render
the Act punitive in its
application. See United States v. Halper, 109 S. Ct. 1892 (1989); Petrus and
the Eye Center of Austin,
supra at 46-48.
My decision as to penalties and assessments in this case takes into consideration
the evidence as to costs.
The total which I have imposed -- $250,000.00 -- is not grossly disproportionate
to the costs proven by the
I.G. Therefore, the penalties and assessments serve the Act's purposes without
becoming punitive in their
application.
c. Exclusions.
I exclude Respondents from participating in Medicare and Medicaid for ten years.
Exclusions are
necessary for two reasons. First, they will assure that Respondents will not
be in a position to do further
damage to the integrity of federally-funded health care programs. Second, they
will warn health care
providers that they cannot ignore their legal obligations to these programs.
My decision that ten-year exclusions are necessary in this case is in part
based on the many aggravating
factors which were proven, and the inescapable conclusion which must be drawn
from those factors. The
evidence in this case establishes that Respondents intentionally defrauded both
Medicare and Medicaid. It
also shows that Respondents had no interest in complying with program reimbursement
criteria, if
compliance interfered with their efforts to maximize their gain. Respondents
are manifestly untrustworthy
providers.
I also base the length of the exclusion on my conclusion that Respondents'
fraud is the kind of misconduct
for which Congress has prescribed a minimum mandatory exclusion of at least
five years under section
1128(a) of the Social Security Act. In enacting that section, Congress' intent
was not to prescribe
additional punishment for parties convicted of program-related fraud. Rather,
Congress concluded that
parties who engage in theft, fraud, and other criminal offenses of a financial
nature against Medicare or
Medicaid have demonstrated by their conduct that they should not be trusted
to do business with these
programs for at least five years. See Jack W. Greene, DAB App. 1078 (1989) aff'd
sub nom Greene v.
Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). And, in enacting section
1128(a), Congress made it
clear that exclusions of greater than five years should be imposed in appropriate
cases.
I am not concluding that the evidence in this case as to the 87 claims other
than count 39, or the 172 post-
suspension claims, proves that Respondents committed a crime. However, I do
conclude that Respondents
have engaged in fraud within the plain and ordinary meaning of that term, and
that in some respects it is
appropriate to measure the reasonableness of the exclusions I am imposing by
considering what Congress
has mandated for cases of criminal fraud. Greene, supra.
Nor am I imposing a second, lengthier exclusion for the misconduct that resulted
in Respondent Keszler's
criminal conviction for fraud related to the claim in count 39. The suspension
which was imposed based
on count 39 related only to one Medicaid claim. Here, there exists massive evidence
of a much wider-
ranging fraud than was evident from that case. Furthermore, the record establishes
continued misconduct
by Respondents relative to the 172 post-suspension claims.
I recognize that the exclusions which I am imposing are likely to have a significant
adverse financial effect
on Respondents. However, the law places the integrity of the Medicare and Medicaid
programs ahead of
the pecuniary interests of providers. In determining to impose an exclusion,
the primary consideration
must be the degree to which the exclusion serves the law's remedial objectives.
An exclusion is remedial if
it does reasonably serve these objectives, even if it has a severe adverse impact
on the person against whom
it is imposed. Greene v. Sullivan, 731 F. Supp. 838, 840 (E.D. Tenn. 1990).
3. The penalties, assessments, and exclusions imposed in this case do not
violate Respondents'
rights not to be placed in double jeopardy.
Respondents argue that the imposition against them of penalties, assessments,
and exclusions violates their
rights not to be placed in double jeopardy. They premise their argument on Respondent
Keszler's 1987
criminal conviction and the Supreme Court's decision in United States v. Halper,
109 S. Ct. 1892 (1989).
Respondents' arguments are in some respects the same as those made by respondents
in Petrus and the Eye
Center of Austin, supra. I found those arguments to be without merit, and I
reach the same conclusion
here. Respondents have raised some additional arguments in this case which were
not raised in the Petrus
case. I also find these arguments to be without merit.
Respondents contend that the Act is unconstitutional as applied to them. I
am without authority to decide
the validity of federal statutes or regulations in cases brought pursuant to
the Act. 42 C.F.R. 1003.105(c);
Petrus and the Eye Center of Austin, supra, at 48. I make no ruling concerning
the constitutionality of the
Act as it is being applied to Respondents.
However, I do have authority to rule on the factual premises and contentions
of the parties as well as to
interpret laws, regulations, and court decisions. I conclude that Respondents'
arguments as to the
applicability of the Halper decision to the facts of this case are incorrect.
The defendant in Halper was convicted in federal court of filing 65 false Medicare
claims resulting in an
overpayment of $585.00. Defendant was sentenced to two years' imprisonment and
fined $5,000.00.
Subsequently, the United States Government brought a civil action against defendant
under the False
Claims Act, a statute which provides for civil remedies of twice the dollar
amount of that which is
established as falsely claimed, plus penalties of $2,000.00 for each false claim.
The government's suit was
premised on defendant's conviction for all 65 claims. The District Court entered
summary judgment in
favor of the government on the issue of liability. However, it held that the
remedy sought by the
government -- penalties totalling $130,000.00 -- would violate the defendant's
right not to be placed in
double jeopardy. The court based its conclusion on its determination that there
was a "tremendous
disparity" between the civil penalty requested and the actual damages sustained
by the government. It
concluded that the disparity was so great as to render the penalty punitive.
The Supreme Court sustained the District Court's conclusion that imposition
of a $130,000.00 penalty
would be punitive in the context of the particular facts of the case. The Supreme
Court held that a civil
sanction constitutes punishment in those circumstances where the civil sanction
serves only the traditional
aims of punishment, retribution and deterrence. 109 S.Ct. at 1902. It stated
that a civil penalty could
operate as an unconstitutional second punishment in:
the rare case, the case such as the one before us, where a fixed-penalty provision
subjects a prolific but
small-gauge offender to a sanction overwhelmingly disproportionate to the damages
he has caused. The
rule is one of reason: Where a defendant previously has sustained a criminal
penalty and the civil penalty
sought in the subsequent proceeding bears no rational relation to the goal of
compensating the Government
for its loss, but rather appears to qualify as `punishment' in the plain meaning
of the word, then the
defendant is entitled to an accounting of the Government's damages and costs
to determine if the penalty
sought in fact constitutes a second punishment.
109 S.Ct. at 1902. The Supreme Court remanded the case to the District Court
for further proceedings to
determine the amount of damages sustained by the government. It also held that,
in determining damages,
the District Court would be permitted to impose a penalty which approximated
the damages sustained by
the government. The issue was not whether damages were precisely proven, but
whether there existed a
rational relationship between what was incurred and what was imposed.
The Supreme Court held that its decision was inapplicable to defendants who
had not previously been
convicted on the same offenses for which civil penalties are sought:
Nothing in today's ruling precludes the Government from seeking the full civil
penalty against a
defendant who previously has not been punished for the same conduct, even if
the civil sanction imposed is
punitive. In such a case, the Double Jeopardy Clause simply is not implicated.
109 S.Ct. at 1903 (emphasis added).
The Halper case is distinguishable from this case on several grounds. First,
there is no prior federal
conviction of record in this case. The double jeopardy doctrine does not apply
to a subsequent federal
prosecution based on facts which led to a state conviction. Abbate v. United
States, 359 U.S. 187 (1959);
Chapman v. U.S. Dept. of Health & Human Services, supra, 806 F. 2d 523,
529. Therefore, the double
jeopardy doctrine cannot apply in this case, even assuming the penalties, assessments,
and exclusions
which I impose are construed to be punitive rather than remedial.
Respondents argue that, in fact, the state criminal prosecution against Respondent
Keszler was the product
of a federal investigation. They contend that it was the United States which
opted to impose criminal
penalties against Respondent Keszler in the guise of a state criminal proceeding.
Therefore, the state
criminal conviction is in reality a "federal" conviction.
The fact that federal officials may have performed the investigation which
resulted in state charges being
brought against Respondent does not detract from my conclusion. A state prosecution
does not become a
"federal" action because state authorities are assisted by a federal
agency. Bartkus v. Illinois, 359 U.S.
121, 123 (1959); United States v. Russotti, 717 F. 2d 27 (2d Cir. 1983); United
States v. Aleman. 609 F. 2d
298, 309 (7th Cir. 1979); United States v. Nasworthy, 710 F. Supp. 1353 (S.D.
Fl. 1989).
Respondents have offered no evidence to prove that state authorities were merely
carrying out the
directives of federal officials, as they seem to contend. Respondents have not
proven that the state action
against Respondent Keszler was merely a sham or a cover for a federal prosecution.
See Bartkus, supra,
359 U.S. at 122. There is nothing of record in this case to suggest that there
was not a legitimate basis for
state officials to independently decide to prosecute Respondent Keszler. To
the contrary, the record is
replete with evidence which supports a decision by state authorities to prosecute
Respondent Keszler. The
Texas Medicaid program, which Respondent Keszler was convicted of defrauding,
is a state health care
program which is supported by federal funds. Respondent's fraud against that
program provided state
authorities with ample motive to prosecute him, irrespective of federal involvement
in the investigation.
This case is also distinguishable from Halper in that only one of the 260 claims
at issue is the subject of a
prior conviction. There was no adjudication and therefore, no jeopardy, for
any of the claims at issue in
this case except for the claim contained in count 39. Furthermore, Respondent
Keszler, P.A. was not a
party to that criminal case. Thus, the Double Jeopardy Clause cannot be implicated
with respect to this
respondent.
Finally, the penalties, assessments, and exclusions which I am imposing in
this case are not punitive. The
penalties and assessments are remedial because they relate to the damages sustained
by the government and
are not grossly disproportionate to the government's pecuniary loss. The exclusions
are remedial because
they protect the Medicare and Medicaid programs from untrustworthy providers
and do not impose
additional punishments on these providers. Greene v. Sullivan, 731 F. Supp.
at 840. Therefore, no issue of
a second punishment results from the remedies which I have imposed.
CONCLUSION
For the reasons set forth in this Decision, I impose assessments of $100,000.00,
and penalties of
$150,000.00 against Respondents, jointly and severally. I also exclude Respondents
from participating in
Medicare and Medicaid for ten years.
Steven T. Kessel
Administrative Law Judge