Richard G. Philips, D.P.M., CR No. 133 (1991)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Richard G. Philips, D.P.M.,

Petitioner,
- v. -
The Inspector General.

DATE: June 7, 1991

Docket No. C-347

DECISION

On December 20, 1990, the Inspector General (I.G.) notified Petitioner that he was being excluded from
participation in the Medicare and State health care programs. The I.G. told Petitioner that he was being
excluded as a result of his conviction in a New York court of a criminal offense related to the delivery of
an item or service under Medicaid. Petitioner was advised that the exclusion of individuals convicted of
such an offense is mandated by section 1128(a)(1) of the Social Security Act (Act). The I.G. further
advised Petitioner that the law required that the minimum period of such an exclusion be for not less than
five years. The I.G. informed Petitioner that he was being excluded for the minimum mandatory period of
five years.

Petitioner timely requested a hearing and the case was assigned to me for a hearing and a decision. The
I.G. moved for summary disposition. Petitioner filed a response to the motion. Both parties filed reply
briefs. Neither party requested oral argument.

I have considered the parties' arguments, the undisputed material facts, and the law. I conclude that the
five-year exclusion imposed and directed by the I.G. against Petitioner is mandated by law. Therefore, I
enter summary disposition in favor of the I.G.

ISSUES

The issues in this case are whether:

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the
Act;

2. Petitioner may collaterally challenge his state conviction in this proceeding;

3. the Secretary of Health and Human Services (the Secretary) or his delegate, the I.G., is barred
from imposing and directing an exclusion against Petitioner by a state certificate of relief from civil
disabilities; and

4. I do have authority to change the effective date of the exclusion.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Petitioner is a podiatrist. I.G. Ex. 1/11.

2. On August 2, 1989, Petitioner pleaded guilty in a New York State court to the criminal offense of filing
a false instrument, a felony under New York law. I.G. Ex. 1/11, 12.

3. In his guilty plea, Petitioner admitted that he had knowingly submitted a false claim for an item or
service to a fiscal agent for the New York State Medicaid program. I.G. Ex. 1/10, 11.

4. As an element of his plea, Petitioner agreed to pay restitution in the amount of $34,292.00. I.G. Ex. 2/4.

5. Petitioner was sentenced to five years' probation. I.G. Ex. 2/7.

6. In connection with Petitioner's sentence, the New York State court issued to Petitioner a Certificate of
Relief from Disabilities. I.G. Ex. 2/8, 3/1, 2.

7. The Certificate of Relief from Disabilities relieved Petitioner from forfeitures, disabilities, and bars to
employment which otherwise would have been imposed automatically against Petitioner under New York
law by virtue of his conviction of a felony. I.G. Ex. 3/1, 2.

8. The Certificate of Relief from Disabilities did not purport to insulate Petitioner from any remedy that
might be imposed against him pursuant to a federal statute. I.G. Ex. 3/1, 2.

9. On September 15, 1989, the New York State Department of Social Services advised Petitioner that it
had determined to exclude him from participation in the New York Medicaid program. P. Ex. 2.

10. The New York State Department of Social Services advised Petitioner that after two years of the state
exclusion he would be eligible to apply for reinstatement. P. Ex. 2

11. Petitioner was convicted of a criminal offense related to the delivery of an item or service under
Medicaid. Findings 2, 3; Social Security Act, section 1128(a)(1).

12. The Secretary delegated to the I.G. the authority to determine, impose, and direct exclusions pursuant
to section 1128 of the Act. 48 Fed. Reg. 21662, May 13, 1983.

13. On December 20, 1990, the I.G. excluded Petitioner from participating in Medicare and directed that
he be excluded from participating in Medicaid, pursuant to section 1128(a)(1) of the Act.

14. There are no disputed issues of material fact in this case, and summary disposition is appropriate.
Findings 1-3.

15. Petitioner may not collaterally challenge his state conviction in this proceeding. Social Security Act,
section 1128(a)(1).

16. The I.G.'s authority to impose and direct exclusions pursuant to section 1128 of the Act is independent
of any authority to impose exclusions vested in the New York Medicaid program by state law or
regulations. Social Security Act, section 1128.

17. I do not have authority to change the effective date of the exclusion. Social Security Act, section
1128.

18. The exclusion imposed and directed against Petitioner by the I.G. is for five years, the minimum
period required by section 1128(a)(1) of the Act.

19. The exclusion imposed and directed against Petitioner by the I.G. is mandated by law. Findings 11,
18; Social Security Act, section 1128(a)(1).

ANALYSIS

There are no disputed material facts in this case. The undisputed facts are that in August 1989, Petitioner
pleaded guilty in New York to a state felony charge of filing a false instrument. In pleading guilty,
Petitioner admitted that he had knowingly filed a false claim for a Medicaid item or service. The New
York court imposed a sentence of probation against Petitioner, which was in part conditioned on
Petitioner's agreement to pay restitution of more than $34,000.00. As an element of the sentence, the New
York court entered an order which relieved Petitioner from certain forfeitures and disabilities which
otherwise would have been automatically imposed against him under New York law by virtue of his felony
conviction. In September 1989, the New York Medicaid program suspended Petitioner from participation
for two years, based on his state felony conviction. The I.G. imposed and directed a five year exclusion
against Petitioner in December 1990, pursuant to section 1128(a)(1) of the Act.

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.

Section 1128(a)(1) of the Act requires the Secretary (or his delegate, the I.G.) to exclude from participation
in Medicare, and to direct the exclusion from participation in Medicaid, of:

any individual or entity that has been convicted of a criminal offense related to the delivery of an item
or service under . . . [Medicare] or under . . . [Medicaid].

Petitioner's conviction for filing a false instrument constitutes a conviction of a criminal offense within the
meaning of section 1128(a)(1). The offense consists of the knowing filing of a false Medicaid claim. It is
a settled matter that conviction for presentation of a false Medicaid claim is a conviction of an offense
related to the delivery of an item or service under Medicaid. Jack W. Greene, DAB App. 1078 (1989),
aff'd, 731 F. Supp. 835 and 838 (E.D. Tenn. 1990); Michael Travers, M.D., DAB App. 1237 (1991). As
the Departmental Appeals Board held in Greene:

[S]ubmission of a bill or claim for Medicaid reimbursement is the necessary step, following the delivery
of the item or service, to bring the "item" within the purview of the program.

Id. at 7 and 11. The Board has also held that a conviction of a criminal offense is related to the delivery of
an item or service under Medicare or Medicaid where the victim of the offense is the Medicare or Medicaid
program. Napoleon S. Maminta, DAB App. 1135 (1990). That was plainly the case here.
2. Petitioner may not collaterally challenge his state conviction in this proceeding.

In his hearing request, Petitioner asserted that the conduct which was the basis for his conviction was his
preparation of orthotic devices from tracings of patients' feet and his presentation of Medicaid claims for
these devices. Petitioner asserted that recent New York case law held that Medicaid claims could
legitimately be presented for orthotic devices made from tracings. In response to the I.G.'s motion for
summary disposition, Petitioner presented an article, the gist of which is that New York prosecutors and the
New York Medicaid program were unfairly prosecuting providers who made orthotic devices from tracings
and presented Medicaid claims for such devices. See P. Ex. 3.

Although Petitioner has not articulated his argument, he appears to be asserting that his conviction for
filing a false instrument is unfair, inasmuch as it derived from items or services provided by Petitioner
which are, or ought to be, reimbursable under the New York Medicaid program.

Petitioner's argument devolves into a collateral attack on his state criminal conviction. He is in effect
arguing that he really wasn't guilty of a criminal offense, because the item or service which he provided to
Medicaid patients (orthotic devices generated on tracings) was a reimbursable item or service under the
New York Medicaid program. He apparently contends that his conviction, therefore, is invalid and the I.G.
is without authority to exclude him.

I accept Petitioner's assertions of fact as true for purposes of deciding the I.G.'s motion for summary
disposition. However, they are not relevant to the issue of whether the I.G. was required to impose and
direct exclusions against Petitioner. The mandatory exclusion which the I.G. imposed and directed against
Petitioner resulted from Petitioner's conviction of a criminal offense within the meaning of section
1128(a)(1). The conviction, and not the underlying conduct, is the triggering event which mandates the
Secretary to impose and direct an exclusion. The law does not require the Secretary to look behind the
conviction to determine whether it is valid. It is not relevant to the issue of the I.G.'s authority that the
criminal conviction may have been defective or that the conduct which resulted in the conviction may no
longer be unlawful. See Andy E. Bailey, C.T., DAB Civ. Rem. C-110 (1989), aff'd DAB App. 1131
(1990); John W. Foderick, M.D., DAB App. 1125 (1990).

3. The I.G. is not barred from imposing and directing an exclusion against Petitioner by a state
certificate of relief from civil disabilities.

Petitioner argues that he was freed from any additional liability for the conduct which resulted in his
conviction by the New York court's execution of a certificate of relief from disabilities. I disagree with this
argument. First, the document alluded to by Petitioner does not relieve him of any liability beyond that
which otherwise would be imposed automatically against Petitioner under New York law by virtue of his
conviction of a felony in that state. The document provides that:

This certificate is issued to relieve the holder, an "eligible offender" as defined in [section] 700 of the
Correction Law, of all or of enumerated forfeitures, disabilities, or bars to employment automatically
imposed by law by reason of his conviction of the crime or offense specified on the face of this certificate.

I.G. Ex. 3/2. The reasonable reading of this document is that it relieves Petitioner of civil disabilities
otherwise imposed against him under New York law by virtue of his New York state criminal conviction.
There is nothing in the document or in the statements made by the court at the time that Petitioner was
sentenced which suggests that the certificate even purported to insulate him from civil remedies which
might be imposed pursuant to section 1128. Id.; see I.G. Ex. 2.

Second, section 1128 is a federal enactment which Congress enacted to provide civil remedies independent
from punishments which might be applied to a party under state criminal law or from state or other federal
civil remedies. There is nothing in section 1128 which suggests that Congress intended that the authority
to impose and direct remedies be subject to limitations imposed by the states. Indeed, to the extent
Congress addressed the issue, it made it plain that deference to state action was not intended. See James F.
Allen, M.D.F.P., DAB Civ. Rem. C-152 (1990); Social Security Act, section 1128(i). Therefore, even if
the certificate was intended to operate precisely as contended by Petitioner, it would not protect him from
imposition and direction of an exclusion under section 1128.

4. I do not have authority to change the effective date of the exclusion.

Petitioner asserts that it is inequitable to now exclude him for five years, in light of the fact that, on
September 15, 1989, the New York Medicaid program excluded him for two years. He argues that, at least
with respect to Medicaid, the effective length of the exclusion directed against him by the I.G. is more than
six years. Therefore, according to Petitioner, the exclusion ought to be reduced or its effective date
changed to reflect the previous New York Medicaid exclusion.

As I hold above, the authority to impose and direct exclusions pursuant to section 1128 exists
independently from other civil remedies enactments. Sections 1128(a)(1) and (c)(3)(B) require the
Secretary to impose and direct an exclusion of at least five years against any party who is convicted of a
criminal offense related to the delivery of an item or service under Medicare or Medicaid. The Act does
not permit the Secretary to offset the minimum mandatory exclusion against previously imposed state
exclusions. In imposing the minimum mandatory exclusion without an offset:

The I.G. is merely carrying out the specific directive of section 1128 of the Act that a criminal
conviction related to the delivery of a Medicare [or Medicaid] item or service mandates a five-year
exclusion. By his plea of guilt to submitting fraudulent . . . claims, Petitioner must be excluded . . . for the
minimum period of five years.

David S. Muransky, D.C., DAB App. 1227 at 8 (1991).

I do not have authority to reduce the minimum mandatory exclusion imposed and directed against
Petitioner by the I.G. The mandatory provisions of section 1128(a)(1) apply equally to me as they do to
the I.G. Thus, I am without the authority to consider the equitable arguments raised by the Petitioner
concerning the effect the previously imposed Medicaid exclusion should have on the exclusion at issue in
this case.

CONCLUSION

Based on the undisputed material facts and the law, I conclude that the five-year exclusion from
participating in Medicare and Medicaid imposed and directed against Petitioner by the I.G. was mandated
by sections 1128(a)(1) and (c)(3)(B) of the Act. Therefore, I enter summary disposition in favor of the
I.G., sustaining the five-year exclusion.


___________________________
Steven T. Kessel
Administrative Law Judge