Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Vladimir Coric, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: June 11, 1991
Docket No. C-244
DECISION
On April 18, 1990, the Inspector General (I.G.) informed Petitioner that he
was excluded from
participating in the Medicare and Medicaid programs for seven years, pursuant
to section 1128 of the
Social Security Act (Act). The I.G. stated that Petitioner was excluded as a
result of his conviction of a
criminal offense related to the delivery of an item or service under the Medicaid
program.
By letter dated May 1, 1990, Petitioner requested a hearing before an Administrative
Law Judge (ALJ), and
the case was assigned to me. On February 11, 1991, I conducted an in-person
hearing in Hartford,
Connecticut. I have considered the evidence of record, the parties' arguments,
and the applicable laws and
regulations. I conclude that the I.G. has the authority to impose and direct
an exclusion against Petitioner
pursuant to section 1128(a)(1) of the Act and that the minimum mandatory provisions
of section
1128(c)(3)(B) of the Act apply. I also conclude that the I.G.'s determination
to exclude Petitioner from
participation in Medicare and Medicaid programs for seven years is excessive,
and that an exclusion for
five years is reasonable under the circumstances of this case.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
Section 1128 of the Act is codified at 42 U.S.C. 1320a-7 (West U.S.C.A., 1990
Supp.). Section 1128(a)(1)
of the Act requires the exclusion from Medicare and Medicaid of those individuals
or entities "convicted"
of a criminal offense "related to the delivery of an item or service"
under the Medicare or Medicaid
programs. Section 1128(c)(3)(B) provides for a five-year minimum period of exclusion
for those excluded
under section 1128(a)(1) of the Act.
II. The Federal Regulations.
The governing federal regulations (Regulations) are codified in 42 C.F.R. Parts
498, 1001, and 1002
(1989). Part 498 governs the procedural aspects of this exclusion case; Parts
1001 and 1002 govern the
substantive aspects.
Section 1001.123 requires the I.G. to issue an exclusion notice to an individual
or entity whenever the I.G.
has "conclusive information" that such individual or entity has been
"convicted" of a criminal offense
"related to the delivery of an item or service" under the Medicare
or Medicaid programs. In this case, the
exclusion began 20 days from the date on the notice.
PROCEDURAL BACKGROUND
On April 18, 1990, the I.G. issued a notice of determination (Notice) informing
Petitioner that he was being
excluded from participation in Medicare and Medicaid for a period of seven years.
The I.G. stated in his
Notice that this exclusion is based on Petitioner's conviction in the Hartford
Superior Court of Connecticut
of a criminal offense related to the delivery of an item or service under the
Medicaid program. By letter
dated May 1, 1990, Petitioner requested a hearing to contest the I.G.'s determination.
This case was
docketed and assigned to me for a hearing and decision.
Thereafter, the I.G. filed a motion for summary disposition on all issues,
accompanied by a supporting
brief and exhibits. Petitioner responded with a memorandum in opposition to
the I.G.'s motion for
summary disposition and a cross motion for summary disposition accompanied by
exhibits. The I.G. filed
a reply brief.
At the time Petitioner submitted his response to the I.G.'s motion for summary
disposition, he made a
written request for "oral argument and an evidentiary hearing (by telephone)".
In an October 16, 1990
telephone status call, Petitioner withdrew his request for oral argument and
a hearing by telephone, and
instead requested an in-person hearing. On February 11, 1991, I conducted and
in-person evidentiary
hearing in Hartford, Connecticut.
ADMISSIONS
As documented by my July 16, 1990 Prehearing Order, Petitioner admitted during
the July 11, 1990
prehearing conference that he was "convicted" of a criminal offense
within the meaning of section of
1128(i) of the Act. Tr. 109.
ISSUES
The remaining issues in this case are:
1. Whether Petitioner's conviction was for a criminal offense "related
to the delivery of an item or service"
under the Medicaid program, within the meaning of section 1128(a)(1) of the
Act.
2. Whether the I.G.'s exclusion determination amounts to an unlawful retroactive
application of the
mandatory exclusion provisions of the Act.
3. Whether the length of Petitioner's exclusion is reasonable and appropriate.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and submissions of the parties,
and being fully advised
herein, I make the following Findings of Fact and Conclusions of Law:
1. Petitioner has been a practicing psychiatrist in Norwich, Connecticut, since
January 1961. P. Ex. 1/1; P.
Ex. 2/1.
2. An on-site audit of Petitioner's business records performed by Medicaid
auditors on January 30, 1986
revealed a pattern of false bills submitted by Petitioner. On June 30, 1986,
the Medicaid auditors referred
the case to the Connecticut Medicaid Fraud Control Unit for further investigation.
I.G. Ex. 4/3-5; Tr. 70.
3. The investigation of the Medicaid Fraud Control Unit revealed that during
the period from January 1,
1984 through June 30, 1986, Petitioner submitted or caused to be submitted 1,995
false claims to the
Connecticut Medicaid program on behalf of 99 Medicaid recipients. I.G. Ex. 4/40.
4. As a result of the submission of these false claims, Petitioner received
an overpayment from the
Connecticut Medicaid program in the amount of $30,028.80 during the period from
July 13, 1984 through
December 15, 1986. I.G. Ex. 2; I.G. Ex. 4/39, Tr. 83-85.
5. The majority of the 1,995 false claims submitted by Petitioner consisted
of bills which represented that
medical services had been performed by a psychiatrist when, in fact, less expensive
services had actually
been performed by a health care professional who was not a psychiatrist. Tr.
85; I.G. Ex. 4.
6. Petitioner also violated Medicaid regulations by submitting bills charging
for office visits where the
patient had canceled the appointment or simply failed to appear for it without
warning. Tr. 72; I.G. Ex. 4.
7. Petitioner also submitted bills which represented that individual psychotherapy
services had been
performed when, in fact, less expensive family therapy services had actually
been performed. Tr. 74; I.G.
Ex. 4.
8. Petitioner also violated Medicaid regulations by submitting bills charging
for psychological testing by
the hour rather than by the test. Tr. 76; I.G. Ex. 4.
9. On November 5, 1986, a subpoena was issued to Petitioner ordering him to
turn over his medical and
business records to the custody of the Medicaid Fraud Control Unit for investigation.
I.G. Ex. 4/5.
10. Upon receiving the subpoena, Petitioner instructed members of his staff
to fabricate their records by
writing progress notes for "no-show" and canceled appointments in
order to conceal that Petitioner had
improperly billed these appointments to the Medicaid program. I.G. Ex. 4/13,
32-38; Tr. 64-66.
11. An application for arrest warrant, signed and attested to by an inspector
with the Medicaid Fraud
Control Unit on May 11, 1989, alleged that the investigation of Petitioner revealed
that there was probable
cause to charge Petitioner with the following offenses: (1) larceny in the first
degree by defrauding a
public community, and (2) tampering with or fabricating physical evidence. I.G.
Ex. 4/1, 40.
12. On October 10, 1989, the Connecticut Superior Court accepted a nolo contendere
plea by Petitioner on
the charge of larceny in the first degree by defrauding a public community and
entered a judgment of
guilty on this offense. I.G. Ex. 2.
13. The Connecticut Superior Court sentenced Petitioner to the Connecticut
Correctional Institution for a
term of three years, execution suspended; probation for two years; a fine of
$6,000, and full restitution to
the Medicaid program in the amount of $30,028.80. I.G. Ex. 2.
14. Petitioner was "convicted" of a criminal offense within the meaning
of section 1128(a)(1) and 1128(i)
of the Act. July 16, 1990 Prehearing Order; Tr. 109.
15. Petitioner was convicted of a criminal offense "related to the delivery
of an item or service" under the
Medicaid program, within the meaning of section 1128(a)(1) of the Act.
16. Sections 1128(a)(1) and 1128(c)(3)(B) of the Act provide that the minimum
mandatory exclusion
period is five years for an individual who has been convicted of a criminal
offense related to the delivery of
an item or service under the Medicaid program.
17. The Secretary of the United States Department of Health and Human Services
(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. 21661 (May 13, 1983).
18. On April 18, 1990, the I.G. notified Petitioner that he was being excluded
from participation in the
Medicare and Medicaid programs for seven years, pursuant to section 1128(a)(1)
of the Act.
19. The I.G. properly excluded Petitioner from participation in the Medicare
and Medicaid programs for a
period of at least five years as required by the minimum mandatory exclusion
provisions of sections
1128(a)(1) and 1128(c)(3)(B) of the Act.
20. The I.G.'s exclusion determination does not amount to an unlawful retroactive
application of section
1128(a)(1) of the Act to the facts of this case.
21. The remedial purpose of section 1128 of the Act is to protect federally-funded
health care programs
and their beneficiaries and recipients from providers who have demonstrated
by their conduct that they
cannot be trusted to handle program funds or to treat beneficiaries and recipients.
22. An ancillary remedial objective of section 1128 of the Act is to deter
individuals from engaging in
conduct which jeopardizes the integrity of federally-funded health care programs.
23. Felonies are serious criminal offenses. Larceny in the first degree by
defrauding a public community,
the offense which formed the basis of Petitioner's conviction, is a felony.
Tr. 10.
24. The serious nature of Petitioner's offense is reflected in the sentence fashioned by the court. I.G. Ex. 2.
25. The serious nature of Petitioner's offense is also reflected in the fact
that the Connecticut Department of
Income Maintenance suspended Petitioner from participating in the Connecticut
Medicaid program for a
period of three years as a result of his criminal misconduct. I.G. Ex. 5.
26. Petitioner's criminal misconduct continued over a prolonged period of time
and involved a substantial
number of claims. FFCL 3.
27. Petitioner's criminal misconduct resulted in a significant amount of monetary
damage to the Medicaid
program. FFCL 4.
28. The fact that Petitioner's initial reaction to the threat of getting caught
in wrongdoing was to falsify
office records in an effort to cover up his misconduct reflects poorly on his
judgment, character, and
trustworthiness. FFCL 10.
29. Notwithstanding the evidence showing that Petitioner was guilty of serious
misconduct, he has offered
persuasive evidence which establishes that a seven year exclusion is not necessary
to achieve the law's
remedial objectives in this case.
30. Petitioner has never been convicted of a criminal offense prior to 1989.
P. Ex. 1/1. In addition, there is
no evidence that Petitioner has been sanctioned by either Medicare or Medicaid
prior to 1986 when
Medicaid began its investigation.
31. Petitioner's professionalism is highly regarded by the medical community
in Norwich, Connecticut, and
he is held in high esteem by his patients. Tr. 15, 23, 28, 36; P. Ex. 8, 11.
While Petitioner's
professionalism is not directly at issue in this case, it is one indicia of
his trustworthiness. The fact that
Petitioner has consistently provided excellent care to his patients over a period
of almost thirty years
reflects well on his character.
32. In addition to being admired for his professionalism, Petitioner also enjoys
a reputation in the
community for being an honest and trustworthy individual. Tr. 40.
33. Petitioner met a need to provide psychiatric care to indigent psychotic
patients who had been
discharged from the state mental hospital in Norwich, Connecticut, that few
other psychiatrists in the
community were either willing or able to meet. P. Ex. 4.
34. Throughout his career, Petitioner has demonstrated enormous dedication
to his work and compassion
for his patients. Petitioner is exceptionally committed to caring for his patients,
and he has repeatedly
demonstrated that he is capable of placing the needs of his patients above his
personal and financial
interests. P. Ex. 2; P. Ex. 6; P. Ex. 9; Tr. 18, 48.
35. Petitioner considered the administrative and financial aspects of his practice
to be less important than
providing quality care to his patients, and, as a result, he paid little attention
to the business functions of his
office. P. Ex. 2/4; P. Ex. 6/1; P. Ex. 9/2. Petitioner's billing violations
were motivated by a failure to
accept responsibility for adhering to Medicaid regulations rather than by a
desire to steal funds from
Medicaid as part of an elaborate scheme to defraud the program.
36. Petitioner often rendered services for unscheduled visits for which he
did not charge the Medicaid
program. I.G. Ex. 1/4; I.G. Ex. 6/3.
37. Petitioner's violations of the rules against charging for missed appointments
were motivated by laziness
in educating himself about relevant Medicaid regulations rather than a desire
to fraudulently receive money
for services that were never performed at any time. Tr. 93; I.G. Ex. 4/11-12.
38. Petitioner experienced a great deal of humiliation as a result of the criminal
proceedings and
conviction, and the trauma of these events will deter Petitioner from repeating
his unlawful misconduct in
the future. Tr. 59-60.
39. Petitioner now acknowledges that the responsibility for submitting accurate
bills rests with him, and he
now takes that responsibility seriously. P. Ex. 1/4.
40. Petitioner has taken steps to upgrade his office bookkeeping functions. Tr. 59-60.
41. There is little likelihood that Petitioner will repeat his unlawful misconduct in the future. FFCL 30-40.
42. The I.G. has failed to consider any of the factors which mitigate against
imposing a seven year
exclusion in this case. I.G. Br. 1, 2, 11, 12.
43. The seven year exclusion imposed and directed against Petitioner is excessive.
44. The remedial considerations of section 1128 of the Act will be served in
this case by a five year
exclusion.
DISCUSSION
I. The Mandatory Exclusion Provisions Of Section 1128 Apply To This Case.
Section 1128(a)(1) of the Act mandates an exclusion 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].
The Act further requires, at section 1128(c)(3)(B), that in the case of an
exclusion imposed and directed
pursuant to section 1128(a)(1), the minimum term of such exclusion shall be
five years. The I.G. asserts
that "the criminal conduct in which the petitioner engaged, and the resulting
conviction, were related to the
Medicaid program as required by 1128(a)(1)." I.G. Br. 6. The I.G. asserts
that Petitioner's exclusion
therefore was mandatory and thus he must be excluded for at least five years
pursuant to section
1128(c)(3)(B). I.G. Br. 14.
See Tr. 109-123.
The I.G.'s authority to impose and direct an exclusion under section 1128(a)(1)
is based on the fulfillment
of the following statutory criteria: (1) an individual or entity must be "convicted"
of a criminal offense
within the meaning of sections 1128(a)(1) and 1128(i) of the Act, and (2) the
conviction must be "related to
the delivery of an item or service" under the Medicare or Medicaid programs.
A. Petitioner Was "Convicted" Of Criminal Offenses Within The Meaning
Of Sections 1128(a)(1) And
1128(i) Of The Act.
Section 1128(i)(3) of the Act defines the term "convicted" of a criminal
offense to include those
circumstances in which a nolo contendere plea by an individual has been accepted
by a federal, state, or
local court.
The undisputed facts establish that Petitioner entered a nolo contendere plea
on the charge of larceny in the
first degree by defrauding a public community. On October 10, 1989, the Connecticut
Superior Court
accepted this plea and entered a judgment of guilty on this charge. I.G. Ex.
2.
Petitioner admitted during the July 11, 1990 prehearing conference that he
was "convicted" within the
meaning of the exclusion law, and I conclude that the record supports this admission.
See Tr. 109.
B. Petitioner's Criminal Offenses Underlying His Conviction Is "Related
To The Delivery Of An Item Or
Service" under the Medicaid Program.
Having concluded that Petitioner was "convicted" of a criminal offense,
I must determine whether the
criminal offense which formed the basis for the conviction was "related
to the delivery of an item or
service" under the Medicaid program, within the meaning of section 1128(a)(1)
of the Act.
Petitioner was convicted of larceny in the first degree by defrauding a public
community. While the name
of the offense, on its face, suggests that it involves fraud against the government
rather than against an
individual, it is not possible to ascertain from the name of the offense alone
whether it relates to the
delivery of an item or service under the Medicaid program. In order to determine
the existence of a
relationship between the criminal offense for which Petitioner was convicted
and the delivery of an item or
service under the Medicaid program, it is necessary to examine the facts underlying
the conviction.
Charles W. Wheeler and Joan K. Todd, DAB Civ. Rem. 61 & 63 (1989), aff'd
DAB App. 1123 (1990).
The I.G. submitted the application for the warrant of arrest of Petitioner,
signed and attested to by Ms.
Justine M. Miller, an inspector with the Connecticut Medicaid Fraud Control
Unit. According to this
document, an investigation conducted by the Medicaid Fraud Control Unit revealed
that during the period
from January 1, 1984 through June 30, 1986, Petitioner was responsible for the
submission of a total of
1,995 false claims to the Connecticut Medicaid program, on behalf of 99 Medicaid
recipients, for services
which were not performed as claimed. I.G. Ex 4/40. Documents submitted by the
I.G. also show that as a
result of his conviction for larceny in the first degree by defrauding a public
community, Petitioner was
ordered to pay restitution to the Connecticut Medicaid program in the amount
of $30,028.80. I.G. Ex. 2.
In addition, Petitioner was suspended from participating in the Connecticut
Medicaid program for three
years as a result of his conviction. I.G. Ex. 5.
Petitioner does not dispute these facts. Instead, he makes the legal argument
that the I.G. has
mischaracterized the criminal offense which formed the basis of his conviction.
Petitioner states that the "normal starting point" in interpreting
the meaning of a statute is "the actual
language of the statute itself". Petitioner contends that section 1128(a)(1),
when read alone, does not
explain what Congress intended to encompass by the term "related to the
delivery of an item or service".
Petitioner therefore argues that it is necessary to look at the entire statutory
scheme of the exclusion law in
order to construe the meaning of the language in section 1128(a)(1). P. Br.
3-4.
Petitioner points out that section 1128(a) of the Act contains provisions requiring
the exclusion of health
care providers in certain circumstances, while section 1128(b) of the Act contains
provisions permitting the
Secretary to use his discretion to exclude providers in certain circumstances.
Petitioner argues that "[s]ince
the subsections on mandatory and permissive exclusion are separate and distinct,
it is . . . obvious that a
conviction might fit under subsection (a) or subsection (b), but not under both".
Petitioner therefore
reasons that since the enumerated circumstances which are grounds for a permissive
exclusion under
section 1128(b) of the Act cannot also be grounds for a mandatory exclusion
under 1128(a), a reading of
section 1128(b) provides clear guidance as to what is not encompassed by the
section 1128(a) phrase
"related to the delivery of an item or service". Petitioner argues
that this conclusion "is necessary to avoid
rendering subsection (b) at least in part a nullity, thus violating a cardinal
rule of construction that effect
should be given to the intent of Congress and that a legislative body does not
intend to adopt useless
legislation". P. Br. 3-5.
Petitioner contends that of all the provisions contained in sections 1128(a)
and 1128(b) of the Act, section
1128(b)(1) "describes most precisely the circumstances of [this] case".
P. Br. 5. Section 1128(b)(1) gives
the Secretary discretion to exclude providers who have been convicted "in
connection with the delivery of
a health care item or service or with respect to any act or omission in a program
operated by or financed in
whole or in part by any Federal, State, or local government agency, of a criminal
offense relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other financial
misconduct". Petitioner asserts
that his conviction for larceny in defrauding a public community was "financial
misconduct" within the
meaning of section 1128(b)(1) of the Act. Applying his premise that conduct
which is grounds for an
exclusion under section 1128(b) may not also be grounds for an exclusion under
section 1128(a), Petitioner
concludes that his criminal offenses are not governed by the mandatory exclusion
provisions of section
1128(a) of the Act. P. Br. 6.
Petitioner cites another rule of statutory construction to further support
his contention that section
1128(b)(1), rather than section 1128(a), applies to this case. Petitioner states
that it "is an accepted rule of
statutory construction that specific terms covering given subject matter will
prevail over general language
in the same statute which might otherwise prove controlling". P. Br. 6.
Using this rule of statutory
construction, Petitioner argues that the specific language of section 1128(b)(1)
clearly applies to his
conviction and it must therefore be treated as an exception to the more general
language contained in
section 1128(a)(1). P. Br. 7. Petitioner concludes that, as a matter of law,
the permissive exclusion
provision of section 1128(b)(1) governs this case, and it was improper for the
I.G. to proceed under the
mandatory exclusion provision of section 1128(a)(1). See Tr. 109-123.
The I.G. contends financial offenses such as fraud and theft directed at the
Medicare or Medicaid programs
are "related to the delivery of an item or service" under such programs,
within the meaning of section
1128(a)1() of the Act. The I.G. argues that Petitioner was convicted of such
an offense, and therefore he is
subject to the mandatory minimum five-year exclusion provisions of sections
1128(a)(1) and
1128(c)(3)(B). I.G. Br. 6-9; Tr. 121-123.
Petitioner's arguments are based on a misreading of the statute. Petitioner
acknowledges in his brief that
the normal starting point of interpreting a law is the actual language of the
statute itself, but he fails to
properly apply this rule to the exclusion law. The plain meaning of the language
of section 1128(a)(1) is to
require exclusion from participation in the Medicare and State health care programs
of those providers who
commit offenses, including fraud or financial misconduct, in connection with
the delivery of an item or
service rendered pursuant to these programs. The phrase in section 1128(a)(1)
"related to the delivery of
an item or service" conveys legislative intent to sweep within section
1128(a)(1) all "financial" offenses
directed against Medicare and Medicaid programs. Charles W. Wheeler and Joan
K. Todd, supra.
Petitioner's offense falls within the ambit of the offenses described by the
language of section 1128(a)(1).
The undisputed facts establish that Petitioner submitted false claims to the
Connecticut Medicaid program
which misrepresented the services that were actually delivered. As a result
of these false claims, Petitioner
received an overpayment from the Medicaid program in the amount of $30,028.80.
Petitioner's offense,
which amounts to theft or conversion of Medicaid funds, is covered by the language
in section 1128(a)(1).
Id.
Section 1128(a)(1) encompasses the same kinds of "financial" offenses
which are described in 1128(b)(1),
but is limited to those offenses which are directed against, or committed in
connection with, the rendering
of services pursuant to the Medicare and Medicaid programs. The legislative
scheme apparent from
reading 1128(a)(1) and 1128(b)(1) in conjunction with each other is to mandate
exclusions of those who
commit financial crimes directed against Medicare and Medicaid, and to permit
exclusions of those who
commit financial crimes in connection with the delivery of a health care item
or service pursuant to
programs, other than Medicare or Medicaid, which are financed by federal, state,
or local government
agencies. As the fraud committed by Petitioner was directed against Medicaid,
his exclusion is mandated
by section 1128(a)(1).
There is no question that if 1128(b)(1) is read in isolation, its language
would literally encompass the
offense for which Petitioner was convicted. However, when this section is read
in context with 1128(a)(1),
it becomes clear that Petitioner's exclusion is not governed by the permissive
exclusion provisions. This is
so because the law specifically requires a minimum five-year term for exclusions
of parties who commit
offenses described in 1128(a)(1).
In the case Jack W. Greene, DAB App. 1978 (1989), the petitioner was convicted
of a criminal offense that
is not materially different from the offense committed by Petitioner in this
case. The petitioner in Greene
was convicted of fraud against the Tennessee Medicaid program. His crime consisted
of substituting a
generic drug for a brand name drug and billing the program for the more expensive
brand name drug. In
Greene and the present case, the petitioners attempted to obtain reimbursement
for items or services which
were not delivered as claimed. Both cases involve fraudulent acts against Medicaid
programs, related to
the delivery of items or services under those programs. The petitioner in the
Greene case argued that his
criminal offenses fell within the permissive exclusion provisions of section
1128(b)(1), rather than the
mandatory exclusion provision of section 1128(b)(1), because his criminal offense
related to fraud against
the Medicaid program. The Departmental Appeals Board (DAB) expressly rejected
this argument, holding
that:
[The] . . . offense is directly related to the delivery of the item or service
since the submission 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.
DAB App. 1078 at 7 (1989). The DAB concluded in Greene that false Medicaid
billing and the delivery of
an item or service to a Medicaid recipient are "inextricably intertwined"
and therefore "related". The
Greene decision was subsequently affirmed by the United States District Court.
Greene v. Sullivan, 731 F.
Supp. 835, 838 (E.D. Tenn. 1990). Thus, under Greene, it is well-settled that
financial offenses directed
against the Medicare and Medicaid programs such as submitting fraudulent claims
for services which were
not provided as claimed would be "related to the delivery of an item or
service" within the meaning of
section 1128(a)(1).
In view of the foregoing, I find that Petitioner was convicted of a criminal
offense "related to the delivery
of an item or service" under the Medicaid program, and I conclude that
the I.G. properly classified
Petitioner's offense as falling under the mandatory exclusion authority. Accordingly,
the I.G. is required to
exclude Petitioner for a minimum of five years under sections 1128(a)(1) and
1128(c)(3)(B) of the Act.
II. The I.G.'s Exclusion Determination Does Not Amount To An Unlawful Retroactive
Application Of
Section 1128(a)(1) Of The Act To The Facts Of This Case.
On August 18, 1987, section 1128(a) of the Act was amended by the Medicare
and Medicaid Patient and
Program Protection Act of 1987, Public Law 100-93, 101 Stat. 680 (1987). While
the pre-August 1987
version of section 1128 provided for an exclusion for a conviction of a program-related
criminal offense,
there was no mandatory minimum exclusion. Congress provided for the first time
on August 18, 1987 that
the exclusion must be for a mandatory minimum period of five years for program-related
criminal offenses.
Petitioner contends that the conduct which formed the basis of his conviction
occurred during the years
from 1984 through 1986. He argues that section 1128(a)(1) cannot be applied
retroactively to conduct
which occurred before its enactment on August 17, 1987. Petitioner contends
that it "is an elementary rule
of statutory construction (1) that statutes affecting substantive matters and
rights are deemed to be
prospective only and (2) that, in general, statutes are strongly presumed to
be prospective unless their
language is such as to show clearly and unequivocally that Congress intended
retroactive application".
Petitioner asserts that section 1128 does not unequivocally indicate that Congress
intended retroactive
application. In addition, Petitioner asserts that application of the 1987 Amendments
to this case would
violate the ex post facto clause of the United States Constitution. P. Br. 8-9.
Although I do not have the authority to declare the 1987 Amendments unconstitutional,
I do have the
authority to interpret and apply the federal statute and regulations. In addition,
where there is room to
decide how to apply the statute, I have a duty to apply it in a manner that
is constitutional and valid. See
Betsy Chua, M.D., DAB Civ. Rem. C-139 (1990), aff'd, DAB App. 1204 (1990).
I disagree with Petitioner that the exclusion law was applied retroactively
in this case. The 1987
Amendments were enacted by Public Law 100-93, and section 15(b) of Public Law
100-93 specifically
states:
Mandatory minimum exclusions apply prospectively. Section 1128(c)(3)(B) of
the Social
Security Act (subsec (c)(3)(B) of this section) (as amended by this Act [Pub.
L. 100-93, section 2]) which
requires an exclusion of not less than 5 years in the case of certain exclusions,
shall not apply to exclusions
based on convictions occurring before the date of the enactment of this Act
[Aug. 18, 1987].
The Senate Report discussing this provision states, "The provision establishing
mandatory five year
minimum exclusion periods for conviction of certain crimes would apply to convictions
occurring on or
after the date of enactment." S. Rep. No. 109, 100th Cong., 1st Sess. 27,
reprinted in 1987 U.S. Code
Cong. & Admin. News 682, 708.
It is clear from both the language of the statute itself and its legislative
history that Congress intended the
mandatory minimum exclusion provisions to apply prospectively from the date
of the statute's enactment to
all convictions occurring on or after August 18, 1987. Obviously, if a conviction
occurred on August 18,
1987 or shortly thereafter, the misconduct giving rise to the conviction would
necessarily have occurred
prior to August 18, 1987. Accordingly, in enacting this provision, Congress
must have been aware that
there would be many convictions that would be entered after the effective date
of the amendments and
these convictions would be based on acts that were committed prior to that date.
Thus, by logical
inference, Congress intended the 1987 Amendments to apply even in those cases
as long as the conviction
resulting from the misconduct occurred on or after August 18, 1987. This logical
inference is inescapable,
and the only way it could be overcome would be by specific language in the text
of the statute itself or in
its legislative history indicating Congressional intent not to apply the mandatory
exclusion to convictions
based on misconduct occurring prior to August 18, 1987.
In this case, there is no dispute that Petitioner was convicted after the effective
date of the 1987
Amendments. Petitioner was convicted of a program-related offense on October
10, 1989, more than two
years after the enactment of the amendments to the Act. The I.G.'s authority
to impose and direct
exclusions against Petitioner arose from the conviction on October 10, 1989,
and that is the controlling
event specified by Congress in its 1987 amendment. Therefore, the act which
gave the I.G. grounds to
exclude Petitioner occurred after the date that Congress enacted the 1987 statutory
revisions.
I also disagree with Petitioners' assertion that the constitutional prohibition
against ex post facto laws bars
the I.G. from imposing the mandatory minimum exclusion in this case.
It is a well established principle that constitutional protection against ex
post facto laws applies to criminal
or penal laws which impose punishment. In Chua, supra, as in the instant case,
the petitioner objected to
application of the mandatory exclusion on ex post facto grounds. This objection
is necessarily premised on
the assertion that Congress intended the imposition of the five year mandatory
minimum exclusion to be a
punishment. The purpose of the exclusion law is not to punish, but to protect
federally funded health care
programs from untrustworthy health care providers. See Chua, supra at 10, citing
Orlando Ariz and Ariz
Pharmacy Inc., DAB Civ. Rem. C-115 (1990). The mandatory exclusion provisions
are civil remedies, and
they are not punishment within the meaning of that term in the United States
Constitution. Therefore, this
civil remedy does not trigger the protections afforded by the Constitution which
are applicable to criminal
laws.
In view of the foregoing, I conclude that since Petitioner was convicted of
a program-related offense after
August 18, 1987, the I.G. had no choice but to apply the mandatory minimum exclusion
provisions and
exclude Petitioner for at least five years. This exclusion is not an unlawful
retroactive application of the
law in violation of the ex post facto clause of the United States Constitution.
III. A Five Year Exclusion Is Appropriate And Reasonable In This Case.
The I.G. excluded Petitioner from participating in the Medicare and Medicaid
programs for seven years.
While the exclusion provisions of sections 1128(a)(1) and 1128(c)(3)(B) of the
Act require that an
individual or entity who has been convicted of a criminal offense related to
the delivery of an item or
service under the Medicaid program be excluded for a minimum period of five
years, there is no mandated
maximum period for exclusions imposed pursuant to section 1128. The remaining
issue in this case is
whether the I.G. is justified in excluding Petitioner for seven years. Since
there is no statutory provision
which sets the maximum exclusion period for exclusions imposed under the authority
of section
1128(a)(1), it is reasonable to conclude that Congress intended that resolution
of this issue be based on
analysis of the evidence in a particular case in light of the legislative purposes
of the exclusion statute. See
Frank J. Haney, DAB Civ. Rem. C-156 (1990).
Section 1128 is a civil statute, and Congress intended it to be remedial in
application. The remedial
purpose of the exclusion law is to enable the Secretary to protect federally-funded
health care programs
from misconduct. Such misconduct includes fraud or theft against federally-funded
health care programs.
It also includes neglectful or abusive conduct against program recipients and
beneficiaries. See, S. Rep.
No. 109, 100th Cong., 1st Sess. 1, reprinted 1987 U.S. Code Cong. and Admin.
News 682.
The key term to keep in mind is "protection", the prevention of harm.
See, Webster's II New Riverside
University Dictionary 946 (1984). As a means of protecting the Medicare and
Medicaid programs and
their beneficiaries and recipients, Congress chose to mandate, and in other
instances to permit, the
exclusion of untrustworthy providers. Through exclusion, individuals who have
caused harm, or
demonstrated that they may cause harm, to the federally funded health care programs
or its beneficiaries or
recipients are no longer permitted to receive reimbursement for items or services
which they provide to
Medicare beneficiaries or Medicaid recipients. Thus, untrustworthy providers
are removed from a position
which provides a potential avenue for causing harm to the program or to its
beneficiaries or recipients. See
Charles J. Burks, M.D., DAB Civ. Rem. C-111 (1989).
Congress has not mandated that exclusions from participation in the federally-funded
health care programs
be permanent. Instead, section 1128(g) provides that an excluded provider may
apply for reinstatement
into the program at the end of the exclusion period. The Secretary may then
terminate the exclusion if
there is no basis for a continuation of the exclusion, and there are reasonable
assurances that the types of
actions which formed the basis for the original exclusion have not recurred
and will not recur.
By not mandating that exclusions from participation in federally-funded health
care programs be
permanent, Congress has allowed the I.G. the opportunity to give individuals
a "second chance". The
placement of a limit on the period of exclusion allows an excluded individual
or entity the opportunity to
demonstrate that he or she can and should be trusted to participate in the federally-funded
health care
programs as a provider of items and services to beneficiaries and recipients.
See Thomas J. DePietro, R.
Ph., DAB Civ. Rem. C-282 at 8 (1991).
The ultimate issue to be determined at a hearing pertaining to an exclusion
imposed pursuant to section
1128 of the Act is whether the exclusion is reasonable. 42 C.F.R. 1001.128(a)(3).
In adopting this
regulation, the Secretary stated that:
The word `reasonable' conveys the meaning that . . . [the I.G.] is required
at the hearing only to show
that the length of the [exclusion] determined . . . was not extreme or excessive.
48 Fed. Reg. 3744 (January 27, 1983). An exclusion determination will be held
to be reasonable where,
given the evidence of the case, it is consistent with the legislative purpose
of protecting federally-funded
health care programs and their beneficiaries and recipients and it is not extreme
or excessive as a length of
time necessary to establish that the excluded provider no longer poses a risk
to covered programs and their
beneficiaries and recipients. See Basem F. Kandah, R. Ph., DAB Civ. Rem. C-155
at 5 (1990).
In order to be adjudged reasonable under section 1128, an exclusion must satisfy
the remedial objective of
protecting federally-funded health care programs and their beneficiaries and
recipients from untrustworthy
providers of items or services. An exclusion which satisfies this purpose may
also have the ancillary
benefit of deterring wrongdoing. However, an exclusion fashioned solely to achieve
the objective of
deterrence is punitive if it does not reasonably serve the Act's remedial objective.
See Elias Goldstein,
DAB Civ. Rem. C-104 (1989).
Guidance in determining the appropriate length of an exclusion is found in
regulations contained in 42
C.F.R. 1001.125(b). These regulations were adopted by the Secretary prior to
the enactment of the 1987
Amendments to the Act. Even though the Regulations were adopted by the Secretary
to implement the law
as it existed prior to the enactment of the 1987 Amendments, they are entirely
consistent with
congressional intent to exclude untrustworthy providers from participation in
federally-funded health care
programs. Thus, to the extent that they have not been repealed or modified,
the Regulations are instructive
as broad guidelines for determining the appropriate length of exclusions in
cases such as this one, which
have arisen after the enactment of the 1987 revisions.
The regulations enumerate a number of factors which should be considered in
deciding how long an
exclusion will be reasonable. They include: (1) the number and nature of the
offenses, (2) the nature and
extent of any adverse impact the violations have had on beneficiaries, (3) the
amount of the damages
incurred by the Medicare, Medicaid, and social services programs, (4) the existence
of mitigating
circumstances, (5) the length of sentence imposed by the court, (6) any other
facts bearing on the nature
and seriousness of the violations, and (7) the previous sanction record of the
excluded party. 42 C.F.R.
1001.125(b).
Since the exclusion remedy is not intended to be a punishment for wrongdoing,
the regulations should not
be applied as sentencing guidelines to the facts of a case to determine the
degree of a provider's culpability
with a view to determining the punishment he "deserves". Instead,
the regulations provide guidance as to
the factors that should be considered in order to make inferences about a provider's
trustworthiness and the
length of time a provider should be excluded to provide the Secretary adequate
opportunity to determine
that a provider no longer poses a risk to the covered programs and to their
beneficiaries and recipients.
The regulations do not define what factors may be considered as "mitigating."
However, given
congressional intent to exclude untrustworthy individuals from partici-pation
in federally-funded programs,
it is reasonable to conclude that such factors would constitute those factors
which would lead to the
conclusion that an excluded individual is trustworthy and no longer poses a
danger to covered programs
and beneficiaries and recipients of program funds. Leonard N. Schwartz, R. Ph.,
DAB Civ. Rem. C-62 at
14 (1989). In addition, language contained in the legislative history of the
Act indicates that Congress
intended "the availability of alternate providers of needed health care
services" be considered a "mitigating
circumstance" in determining the length of an exclusion. S. Rep. No. 109,
100th Cong., 1st Sess. 2,
reprinted in 1987 U.S. Code Cong. & Admin. News 682, 693.
A determination of the length of time necessary to establish that a provider
is no longer a threat to the
covered programs and to their beneficiaries and recipients necessitates an evaluation
of the myriad facts of
each case, including the nature of the offense committed by the provider, the
circumstances surrounding
the offense, whether and when the provider sought help to correct the behavior
which led to the offense,
how far the provider has come towards rehabilitation, and any other factors
relating to the provider's
character and trustworthiness. See Thomas J. DePietro, R. Ph., DAB Civ. Rem.
C-282 (1991).
The I.G. contends that he was justified in excluding Petitioner for two years
in addition to the minimum
five year exclusion period required by law due to the presence of three "aggravating
factors". The three
"aggravating factors" identified by the I.G. which support the addition
of two years to the five year
minimum exclusion are: (1) the criminal acts were committed over a lengthy period
of time; (2) the
Medicaid program incurred financial damages of over $30,000.00; and (3) the
Connecticut Department of
Income Maintenances excluded Petitioner from the Medicaid program. The I.G.
also contends that there
are no "mitigating factors" in this case. According to the I.G., the
proposed regulations provide for only
three factors that may be considered as "mitigating". The I.G. asserts
that none of these three factors apply
to this case, and therefore there is no basis to reduce the exclusion below
seven years. I.G. Br. 1, 2, 11, &
12.
Petitioner asserts that the I.G. may not rely on the proposed regulations in
defining what factors may be
considered in determining the length of an exclusion because the proposed regulations
are not now in effect
and they were not in effect at the time Petitioner submitted the false claims
between 1984 and 1986. P. Br.
22.
I agree with Petitioner that it is inappropriate to rely on the proposed regulations.
The proposed
regulations, if adopted by the Secretary, would establish his policy for exclusions
imposed pursuant to
section 1128. See 55 Fed. Reg. 12205 (April 2, 1990). These proposed regulations,
however, have not
been adopted and they may not finally be adopted in their current form. Additionally,
it is not clear that,
assuming these proposed regulations are adopted, they would apply retroactively
to exclusion cases heard
prior to the date of their adoption. See Joyce Faye Hughey, DAB App. 1221 (1991).
There is no precise formula which can be applied to calculate when a provider
should be trusted and
allowed to reapply for participation in the federally-funded health care programs.
The totality of the
circumstances of each case must be evaluated in order to reach a determination
regarding the appropriate
length of an exclusion.
The parties presented a rich an thorough record in this case. Petitioner was
convicted of larceny in the first
degree by defrauding a public community. This is a felony, and felonies are
serious criminal offenses. Tr.
10. The seriousness of this offense is in some measure reflected in the sentence
fashioned by the criminal
court. The court sentenced Petitioner to the Connecticut Correctional Institution
for a term of three years,
execution suspended; probation for a term of two years; a fine of $6,000; and
restitution to the Medicaid
program in the amount of $30,028.80. I.G. Ex. 2. The seriousness of Petitioner's
criminal offenses is also
reflected in the fact that as a result of his conviction for larceny by defrauding
a public community, the
Connecticut Department of Income Maintenance determined that Petitioner should
be suspended from
participating in the Connecticut Medicaid program. I.G. Ex. 5.
The evidence establishes that the acts which formed the basis of Petitioner's
conviction involved the
submission of 1,995 false claims on behalf of 99 Medicaid recipients during
the period from January 1,
1984 through June 30, 1986. I.G. Ex. 4/40. This is a substantial number of false
claims. In addition, the
evidence establishes that as a result of the submission of these false claims,
Petitioner received an
overpayment in the amount of $30,028.80 from the Medicaid program. This is a
substantial sum of money,
and this evidence shows that Petitioner's actions resulted in significant monetary
damage to the Medicaid
program. This evidence also shows that Petitioner's criminal misconduct occurred
over a lengthy period of
time, well in excess of one year. Thus, the record shows that Petitioner repeatedly
submitted false claims
over a prolonged period of time, and that this misconduct resulted in a substantial
financial loss to the
Connecticut Medicaid program.
The investigation of the Connecticut Medicaid Fraud Control Unit revealed that
the most of these false
claims consisted of bills which represented that medical services had been performed
by a psychiatrist
when, in fact, the services had been performed by a health care professional
who is not a psychiatrist.
Other false claims consisted of bills for office visits where the patient canceled
the appointment or simply
failed to appear for it without warning. The investigation also revealed that
Petitioner submitted bills
which falsely represented that he had provided individual psychotherapy services
when, in fact, less
expensive family therapy services had been performed. The evidence also shows
that Petitioner violated
Medicaid regulations requiring Petitioner to bill psychological tests by the
test rather than by the hour. I.G.
Ex. 4; Tr. 85, 72, 74, 76.
The circumstances surrounding the billings for canceled and "no-show"
appointments is disturbing for the
reason that the Medicaid Fraud Control Unit's investigation revealed that Petitioner
attempted to conceal
his noncompliance with these Medicaid billing regulations. On November 5, 1986,
the Connecticut
Judicial Inquiry issued a subpoena ordering Petitioner to produce his medical
and business records. I.G.
Ex. 4/5. Susan Burns, Petitioner's bookkeeper since 1975, testified under oath
at the Judicial Inquiry that at
the time the subpoena was received by Petitioner's office, Petitioner instructed
members of his staff to
fabricate their records by writing progress notes for "no-show" and
canceled appointments that were billed
to the Medicaid program. I.G. Ex. 4/32-38; P. Ex. 6/1. Petitioner himself admitted
in both his testimony
before both the Judicial Inquiry and the hearing before me that he directed
at least one of his employees to
fabricate his records by writing medical progress notes for "no-show"
and canceled appointments.
Petitioner admitted that he was aware that this was improper, and he explained
that he "panicked and did
not use his right judgement" when he did this. I.G. Ex. 4/13; Tr. 64-66.
I agree with Petitioner that this
conduct showed poor judgment. The fact that Petitioner's initial reaction to
getting "caught" in wrongdoing
was to attempt to cover it up through the falsification of office records reflects
poorly on his character, and
it is evidence that he is untrustworthy.
According to the application for arrest warrant, there was probable cause to
charge Petitioner with the
offense of tampering with or fabricating physical evidence in addition to the
offense of larceny in the first
degree by defrauding a public community. I.G. Ex. 4/40. At the hearing before
me, counsel for Petitioner
pointed out that the tampering with the evidence charge was dropped by the prosecution,
and that
Petitioner was convicted only for the larceny charge. Tr. 108. Petitioner asserts
that in reaching a decision
about the appropriate length of an exclusion in this case, I should consider
only the larcenous conduct
involving the submission of 1,995 false claims which formed the basis for his
conviction. P. Br. 8. The
I.G. urges that I also consider the evidence regarding Petitioner's efforts
to tamper with his business
records. I.G. Rep. Br. 14-15.
I agree with the I.G. that the evidence regarding Petitioner's efforts to tamper
with his business records is
relevant to the issue of the appropriate length of the exclusion in this case.
This evidence provides
information about Petitioner's character and trustworthiness. Thus, even though
this evidence relates to
facts beyond the narrow scope of the offense which formed the basis for Petitioner's
conviction, it pertains
to the remedial consideration embodied in section 1128. It therefore is relevant
to the issue of whether the
length of the I.G.'s exclusion in excess of the minimum mandatory period is
reasonable.
Certainly, the fact that Petitioner was convicted of a larceny offense involving
$30,028.80 of Medicaid
funds, raises serious questions about his ability to be trusted to handle Medicare
and Medicaid funds.
Petitioner's admission that he attempted to conceal this violation through the
fabrication of office records
leads to additional doubt about his trustworthiness. However, notwithstanding
the evidence showing that
Petitioner engaged in serious criminal misconduct, I conclude that Petitioner
offered persuasive evidence,
not considered by the I.G., which establishes that a seven year exclusion is
not necessary to achieve the
exclusion law's remedial objectives in this case. Thus, I find that while a
seven-year exclusion would
surely serve a deterrent purpose, its effect on Petitioner would be punitive,
given the circumstances of this
case.
The evidence establishes that Petitioner has been practicing psychiatry since
1962, and that he has never
been convicted of any criminal offense prior to 1989. P. Ex. 1/1. In addition,
there is no evidence that
Petitioner has been sanctioned by either the Medicare program or the Medicaid
program prior to the
investigation of the Medicaid Fraud Control Unit in 1986. Instead, evidence
gleaned from the testimony of
character witnesses and from letters written on Petitioner's behalf establish
that Petitioner has a reputation
for competence and trustworthiness, that he enjoys the respect of his medical
colleagues, that he is held in
high esteem by his patients, and that he has provided a needed specialty in
the Norwich, Connecticut area.
Three physicians who have worked closely with Petitioner over long periods
of time testified at the hearing
in this case. This testimony establishes that Petitioner is highly regarded
in the medical community in
Norwich, Connecticut. Petitioner's professional colleagues frequently seek his
advice on difficult medical
questions they are facing in their own practices, and they refer patients to
Petitioner without hesitation. Tr.
15, 23, 28, 36. All three physicians testified that the quality of care that
Petitioner has provided to his
patients over the years is excellent. Tr. 23, 28, 36. While Petitioner's professionalism
is not directly at
issue in this case, it is one indicia of trustworthiness. The fact that Petitioner
has consistently provided
high quality care to his patients over a career of almost three decades reflects
well on his character and
trustworthiness.
Petitioner's medical colleagues also addressed the issue of Petitioner's character
and trustworthiness in their
testimony. This testimony establishes that Petitioner has a reputation in the
community for being an honest
and trustworthy individual. Tr. 40.
In addition to showing that Petitioner has a reputation for being a reliable
physician and an honest
individual, the testimony presented at the hearing also establishes that Petitioner
has filled a need to
provide psychiatric care to the indigent, profoundly ill segment of the population
in the Norwich,
Connecticut community. Prior to his exclusion from Medicare and Medicaid, Petitioner's
practice
consisted primarily of psychotic patients who had been discharged from the state
hospital in Norwich.
These patients are extremely difficult to treat because they are often assaultive
and suicidal. In addition,
they tend to be highly demanding of their physician's time. They have a tendency
to be unreliable in
keeping their scheduled appointments, and they often require medical care at
unexpected, unscheduled
times. They frequently need emergency medical care outside of normal business
hours, including all hours
of the night. While these patients are likely to be dangerous and exceptionally
difficult and demanding, the
financial rewards for treating them are limited. They are often from the most
economically deprived
segment of the population, and, in some instances, are homeless. Tr. 17, 18,
19, 22, 28, 30, 37, 46.
These patients have great difficulty finding and sustaining treatment outside
the hospital setting. Most
private practitioners and privately run mental health clinics refuse to treat
them because it simply is not
lucrative to do so. Tr. 30. Even if a practitioner is willing to accept them
for treatment, they are often
unsuccessful in treating them over extended periods of time because these patients
are often unable to
accept normal treatment protocols and they tend to be difficult to handle. The
record shows that Petitioner
was unusual in his willingness to accept these deinstitutionalized patients
for psychiatric treatment. Not
only was Petitioner willing to accept them for treatment, but he demonstrated
an unusual ability to continue
treating them over long periods of time. He was able to provide many individuals
who were at risk for
being rehospitalized with the necessary medical care and support to sustain
them in the community. Thus,
Petitioner's work met a need in the community that few other psychiatrists were
either willing or able to
meet. P. Ex. 4.
In meeting this need in the community, Petitioner has demonstrated enormous
dedication and compassion.
The record shows that he regularly worked seven days a week, and that many of
these days he worked up
to sixteen hours a day. P. Ex. 9. He was accessible to his patients at all hours
of the day or night, and he
often provided services for which he did not receive any payment. According
to an affidavit submitted by
Ms. Burns, Petitioner often treated patients outside of normal business hours
if the need arose. Even if he
saw a patient several times a week for unscheduled visits, he would usually
bill Medicaid for only one visit
that week. If he was treating a patient whose benefits ran out in the middle
of the year, he would typically
continue to treat that patient free of charge for the rest of the year. P. Ex.
6. In fact, Petitioner testified that
after he was notified that he was going to be excluded from the Medicaid program,
he continued to treat his
Medicaid patients free of charge for over a year. The reason Petitioner gave
for doing this was "[b]ecause
nobody else would take care of them. They have developed attachments to me and
they relied on my
expertise and my help". Tr. 48. This testimony was corroborated by one
of Petitioner's medical
colleagues. Tr. 18.
Not only did Petitioner provide medical services free of charge, but he often
performed personal services
for his patients when he saw a need. Patients often requested him to assist
them in filling out applications
for housing and other government assistance programs, and he provided such assistance
free of charge. P.
Ex. 6/3. He has provided transportation to patients who were unable to get to
and from his office without
this assistance, and he has made house calls when necessary. P. Ex. 9/3. On
occasion, he has invited an
emotionally disturbed child to spend a day with his family so that the parents
of the child would be able to
"get a break for the day." P. Ex. 2/3.
While the parties presented thorough and concise arguments in this case, the
I.G. characterized Petitioner's
improper billing procedures as an "elaborate scheme to defraud the Medicaid
program". I.G. Br. 6. In
characterizing Petitioner's conduct in this manner, the I.G. implies that Petitioner
is a greedy health care
provider who deliberately and painstakingly set out to formulate and implement
a plan to steal as much
money as possible from the Medicaid program. I do not accept this characterization
of Petitioner's
conduct. The evidence shows that Petitioner is an exceptionally generous individual
who is committed to
caring for his patients and that he repeatedly placed the needs of his patients
above his own financial
interests. In fact, Petitioner's commitment to patient care and his disinterest
in monetary gain resulted in a
woeful neglect of the financial aspects of his practice. The record shows that
Petitioner's billing violations
were in large part the product of poor business management practices rather
than an elaborate plan to
defraud Medicaid.
Petitioner devoted virtually all of his time and attention to patient care
and he paid little attention to what
he considered was the less important recordkeeping and administrative functions
of his office. P. Ex. 2/4.
According to one of Petitioner's medical colleagues, Petitioner was notoriously
disorganized. He failed to
keep adequate records, tried to remember everything "in his head",
and often forgot to inform his office
staff of whom to bill. Office cleanups often uncovered uncashed checks and unopened
business
correspondence. P. Ex. 9/2.
Ms. Burns stated in her affidavit that Petitioner relied on her to prepare bills
properly and to read and
understand Medicaid bulletins. She explained that when she first began to work
for Petitioner in 1975, she
did not receive any training in Medicaid billing procedures. P. Ex. 6/1-3. Ms.
Burns states in her affidavit
that Petitioner often signed invoices without reading what he signed. P. Ex.
6/1. Petitioner also admitted
that he delegated billing matters to Ms. Burns and did not take time to inform
himself of Medicaid
regulations or to train or supervise Ms. Burns. P. Ex. 1/6.
In testimony before the Judicial Inquiry, Petitioner explained his policy to
charge for "no-show" or
canceled appointments by stating that he provided additional services which
offset the billing for missed
appointments. Petitioner indicated that while he charged for missed appointments,
he often saw patients in
unscheduled visits once or twice a week for regulation of medication or night
calls, and that he did not
charge for these visits. I.G. Ex. 4/11-12. This testimony was corroborated by
Ms. Burns. I.G. Ex. 6/3.
According to testimony by an investigator with the Medicaid Fraud Control Unit,
there are procedures
which can be followed to reimburse a provider in instances where a patient is
treated in an emergency or
when he needs treatment more than once a week. Tr. 94-95. Due to his lack of
interest in the technicalities
of Medicaid billing regulations, Petitioner failed to learn about and follow
these procedures. Instead, he
charged for missed visits on the theory that these billings would be offset
by the other services for which he
was not paid.
While this explanation does not excuse Petitioner from violating the Medicaid
prohibition against charging
for missed appointments, it does offer insight into why Petitioner violated
this rule. In violating the rule
against charging for "no-shows", Petitioner was motivated by laziness
in acquainting himself with relevant
Medicaid regulations which would enable him to be properly compensated for services
he actually
performed rather than by a desire to fraudulently receive money for services
that were never performed.
Similarly, Petitioner's violations of Medicaid regulations regarding the correct
procedure codes to be used
in billing for the services of Allied Health Professionals and for family therapy
services and his violation of
the Medicaid requirement that psychological services be billed by the test rather
than by the hour appears
to be the result of Petitioner's failure to accept his responsibility to adhere
to Medicaid regulations rather
than an "elaborate scheme" to bilk the Medicaid program for as much
money as possible.
The picture of Petitioner that emerges from the record is that of an exceptionally
dedicated medical
practitioner who devoted his attention to patient care at the expense of the
administrative aspects of his
practice. Petitioner apparently considered his ability to provide excellent
psychiatric care to his patients to
entirely supersede his duty to adhere to Medicaid billing regulations. Petitioner's
overriding interest was
the care of his patients, and he did not want to be bothered with clerical duties
or paperwork which he
considered to be far less important than the needs of his patients. As a result,
Petitioner cavalierly ignored
Medicaid regulations, and instead admits that he made billing decisions on an
ad hoc "shoot from the hip"
basis. P. Ex. 1/6. While Petitioner is guilty of disregarding Medicaid regulations,
he did not engage in an
"elaborate scheme" to defraud the Medicaid program.
I recognize that false billings motivated by a failure to accept responsibility
for adhering to Medicaid rules
are as harmful to the financial health of the Medicaid program as false billings
motivated by a desire to
steal funds as part of an elaborate scheme to defraud the government. Petitioner's
disregard of the law and
his misconduct cannot be excused. In spite of this, I find that an examination
of Petitioner's motivation for
his misconduct is relevant in determining the length of the exclusion because
it sheds light on the
likelihood that he will repeat the offenses of which he was convicted. Since
inferences regarding
Petitioner's trustworthiness and his propensity to repeat the criminal offenses
can be drawn from the
circumstances leading to the criminal offense, including the reasons Petitioner
committed the offenses,
these facts are relevant in determining the length of an exclusion.
The facts of this case lead to the conclusion Petitioner is unlikely to repeat
his criminal offenses. Petitioner
enjoyed an unblemished record and the high regard of his colleagues, his patients,
and the community at
large for the almost thirty years that he has been practicing as a psychiatrist.
The record also shows that
Petitioner is an individual who takes a lot of pride in his work, and that he
experienced a great deal of pain
and humiliation as a result of his criminal conviction. Petitioner testified
at the hearing before me that the
criminal proceedings and conviction were so painful and traumatic that he will
never engage in the same
type of criminal misconduct again. I find this testimony to be convincing, and
I find that Petitioner has
learned that it is unacceptable to cavalierly ignore Medicaid billing regulations.
Petitioner testified that he
has upgraded his office procedures and that he has new secretarial help to assist
him in the bookkeeping
functions of his office. Petitioner also acknowledges that the ultimate responsibility
for accurate bills rests
with him, and that he now takes that responsibility seriously. Tr. 59-60; P.
Ex. 1/4-6.
Based on a review of all the evidence before me, I conclude that a seven year
exclusion would be excessive
in order to assure Petitioner's trustworthiness to submit accurate Medicaid
claims. Petitioner has
conscientiously provided high quality health care to his patients for almost
three decades. He is an
individual who has repeatedly placed the interests of his patients above his
personal financial interests.
While Petitioner has failed to adhere to Medicaid billing regulations, this
failure resulted from a lack of
interest in the administrative aspects of his practice rather than an "elaborate
scheme" to defraud the
government. Petitioner has also admitted his wrongdoing, and has demonstrated
by his demeanor and
statements that he has become fully aware of his responsibilities to the Medicare
and Medicaid programs.
All of these factors reflect well on Petitioner's character and lead to the
conclusion that he can be trusted
not to repeat his criminal offenses. Moreover, Petitioner's unusual willingness
to treat deinstitutionalized
psychotic patients and his rare success at maintaining them in the community
has filled a pressing medical
need in the Norwich, Connecticut area. While the fact that Petitioner provides
a needed specialty does not
necessarily lead to the conclusion that Petitioner is trustworthy, it is a factor
which can be considered to be
"mitigating", according to the legislative history.
The I.G. abused his discretion in failing to consider any of these factors
in reaching his decision to exclude
Petitioner for seven years. See Leonard P. Harman, D.O., DAB Civ. Rem. C-162
at 10 (1990).
Accordingly, I find that the exclusion of seven years would be unreasonably
punitive when applied to
Petitioner.
I conclude that the circumstances of this case, coupled with my observation
of Petitioner during his
testimony, convince me that the exclusion should be modified in this case to
a term of five years. A five
year exclusion will, given the circumstances of this case, be sufficient to
demonstrate that he no longer
poses a threat to the integrity of federally funded health care programs.
CONCLUSION
Based on the law and evidence in this case, I conclude the I.G. properly excluded
Petitioner from the
Medicare and Medicaid programs pursuant to section 1128(a)(1) of the Act, and
that a minimum period of
exclusion of five years is mandated by section 1128(c)(3)(B) of the Act. In
addition, I conclude that the
seven year exclusion imposed against Petitioner is excessive and unreasonable,
and I modify it to five
years.
_________________________________
Charles E. Stratton
Administrative Law Judge