Ricardo Santos, CR No. 165 (1991)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Ricardo Santos,
Petitioner,
- v. -
The Inspector General.

DATE: November 13, 1991

Docket No. C-376

DECISION

On March 5, 1991, the Inspector General notified
Petitioner, Ricardo Santos, that he would be excluded
from participating in the Medicare and State health care
programs for a period of five years. 1/ The I.G. advised
him that the exclusion was mandated based on his convic-
tion of a criminal offense "relating to the delivery of
a health care item or service" within the meaning of
section 1128(a)(1) of the Social Security Act (Act) and
that section 1128(c)(3)(B) of the Act provides that such
exclusions be for a period of not less than five years.

Petitioner timely requested a hearing, and the case
was assigned to me for hearing and decision. By my
prehearing order of May 14, 1991, the I.G. was given
until August 8, 1991 to file a motion for summary
disposition and supporting brief. Petitioner was given
until September 9, 1991 to file a brief in response. The
I.G. was given until September 24, 1991, to file a reply
brief and request for oral argument. On September 6,
1991, I granted Petitioner's request for an extension of
time to file his brief. He was given until September 30,
1991 and the I.G. was given until October 14, 1991 to
file his reply.

I have considered the arguments, the evidence and the
applicable law. I conclude that there is no dispute
as to any material fact, the parties do not seek oral
argument and that summary disposition is therefore
appropriate. 2/ I also conclude that the five year
exclusion imposed and directed by the I.G. against
Petitioner is mandated by law, under section 1128(a)(1)
of the Act, and that the exclusion imposed is the minimum
mandatory period required by section 1128(c)(3)(B) of the
Act.


ISSUES

The issues in this case are whether Petitioner:

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

2. was properly excluded from the Medicare and
Medicaid programs for a five year period
pursuant to section 1128(c)(3)(B) of the Act.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Petitioner in 1984 or 1986 began working as a
medical assistant at the Coast Urgent Medical Clinic in
Huntington Park, California. I.G. Ex. 6, 7; I.G. Br. 4-
5; P. Br. 2. 3/

2. Petitioner's employer and supervisor at the Coast
Urgent Medical Clinic was Dr. Suresh Gandotra. Dr.
Gandotra was also the owner of the Coast Urgent Medical
Clinic. P. Br. 2; P. Ex. C; I.G. Ex. 6, 7; I.G. Br. 4.

3. Petitioner was never a licensed physician or surgeon
in the State of California. I.G. Ex. 6-7.

4. At no time was Petitioner licensed to provide
medical care and treatment, in any capacity, to patients
in the United States. I.G. Ex. 6-8; I.G. Br. 5.

5. Petitioner is a licensed physician in Mexico. I.G.
Ex. 8.

6. As a medical assistant, Petitioner, under the
direction of Dr. Gandotra, was involved in the treatment
and care of patients of the Clinic. Dr. Gandotra
instructed Petitioner to sign Dr. Gandotra's name on
medical prescriptions and to furnish prescription
medication to patients. Upon inquiry by Petitioner
regarding the legality of his actions on behalf on the
Clinic, Dr. Gandotra on several instances led him to
believe his actions were lawful. I.G. Ex. 16; P. Ex. B,
C.

7. Medi-Cal, the California Medicaid program, is a
State health care program as defined by section 1128(h)
of the Act.

8. On or about March 4, 1988, Petitioner provided
medical care and treatment to two patients of the Clinic
who were undercover agents from the Bureau of Medi-Cal
Fraud posing as Medi-Cal recipients. In the course of
providing treatment to these agents, Petitioner forged
the name of Dr. Gandotra on prescriptions given for their
medical care. P. Br. 3; I.G. Ex. 6-7; I.G. Ex. 9-11.

9. The prescriptions and the Medi-Cal claims prepared
by the Clinic for the treatment of the undercover agents
were seized as evidence before the claims could be
processed. I.G. Ex. 12.

10. On March 19, 1989, a criminal information was filed
in the Superior Court of the Southeast Judicial District,
County of Los Angeles, State of California, charging
Petitioner, inter alia, with two counts of forging
prescriptions in connection with the unlawful medical
care and treatment he provided to undercover agents
posing as Medi-Cal recipients. Dr. Gandotra was charged
in the same criminal information with various felony and
misdemeanor counts of prescription forgery, unlawful
practice of medicine, unlawfully furnishing a dangerous
drug, and unlawfully prescribing and furnishing
controlled substances. I.G. Ex. 16 - 17; 19.

11. On August 9, 1989, Petitioner entered a plea of nolo
contendere to two misdemeanor counts of prescription
forgery. On March 22, 1990, a jury returned a guilty
verdict on all counts charged against Dr. Gandotra. P.
Ex. B; P. Br. 3; I.G. Ex. 16, 19.

12. Petitioner was sentenced on September 7, 1991 to two
years' probation, a $1,500 fine, and a payment of $1.00
to the victims/restitution fund. Dr. Gandotra was
sentenced on May 30, 1990 to incarceration in a State
prison, for 16 months, and a fine of $347,800. I.G. Br.
8; I.G. Ex. 18, 20.

13. The Secretary 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 Social Security Act. 48 Fed. Reg.
21622 (May 13, 1983).

14. On March 5, 1991, the I.G. excluded Petitioner from
participating in the Medicare and Medicaid programs for a
period of five years. I.G. Ex. 4.
15. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid within the meaning of section 1128(a)(1) of the
Act. Findings 5 - 9.

16. There are no disputed issues of material fact in
this case, and summary disposition is appropriate.

17. The exclusion imposed and directed against
Petitioner by the I.G. is for five years, the minimum
period required by the Act. Sections 1128(a)(1) and
(c)(3)(B) of the Act.

18. The exclusion imposed and directed against
Petitioner by the I.G. is mandated by law. Sections
1128(a)(1) and (c)(3)(B) of the Act.


RATIONALE

1. 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.

Petitioner, Ricardo Santos, was hired by Dr. Suresh
Gandotra to work as a medical assistant at Dr. Gandotra's
medical clinic, Coast Urgent Clinic. Petitioner is a
licensed physician in Mexico but is not licensed in the
United States. Dr. Gandotra instructed Petitioner to
sign Dr. Gandotra's name on prescriptions that Petitioner
provided to patients under his care at the Clinic.
Petitioner was misled by Dr. Gandotra as to the legality
of his practicing medicine without a license and signing
Dr. Gandotra's name on prescriptions. FFCL 1 - 5.

On March 4, 1988, two undercover agents from the Bureau
of Medi-Cal Fraud entered the clinic posing as Medi-Cal
patients. Petitioner proceeded to provide medical
treatment to them, including the provision of prescrip-
tions for each of the "patients", and, in doing so,
forged Dr. Gandotra's signature on the prescriptions.
The Clinic prepared forms to bill Medi-Cal for such
treatment, but before forms or the prescriptions could be
processed, they were seized as evidence for use in the
subsequent criminal proceeding. FFCL 6 - 7.

On August 9, 1989, Petitioner entered a plea of nolo
contendere to two misdemeanor counts of prescription
forgery and was sentenced to two years' probation,
a $1,500 fine, and payment of $1.00 to the
victims/restitution fund. 4/ In contrast, Dr. Gandotra,
Petitioner's supervisor and owner of the Clinic, was
found guilty of all counts of the criminal information in
a jury trial and sentenced to 16 months in a State prison
and fined $347,800. FFCL 9 - 10.

Petitioner's principal contention is that his offense
does not relate to the delivery of a health care item or
service because the California statute under which
Petitioner was convicted does not, on its face, state
that the offense is related to any State health care
program. Petitioner further contends that 42 C.F.R. Sec.
1002.1 et seq. is applicable in making a determination as
to whether a criminal offense is related to the delivery
of a health care item or service. Additionally,
Petitioner argues that the I.G. must show that his
criminal conviction involved "fraud" in order to support
a mandatory exclusion. Lastly, Petitioner avers that the
I.G. should have imposed a permissive exclusion under
section 1128(b), instead of the minimum mandatory
exclusion under section 1128(a)(1). P. Br. at 6, 8, 10.

The I.G. contends that the regulations cited by
Petitioner are irrelevant to the instant case because
they only apply to a State Medicaid agency's ability to
exclude a provider that defrauds or abuses that State's
Medicaid program. The I.G. argues that these regulations
have nothing to do with this case, which is an exclusion
of Petitioner by the I.G. for conviction of a program-
related crime, not an action taken by a State agency
under its own authority to police its Medicaid program.
The I.G. states the applicable regulations as 42 C.F.R.
Sec. 1001.123. 5/ Also, the I.G. argues that it has no
discretion in selecting an exclusion if Petitioner's
criminal conviction falls within section 1128(a). The
I.G. has no option to seek a permissive exclusion in
cases where the conviction arguably can come within the
purview of sections 1128(a) or 1128(b). I.G. R. Br. 2 -
3; 5.

Petitioner's position is that the I.G. lacks authority
under section 1128(a)(1) to exclude him. Petitioner
supports his assertion by arguing that the State statute
forming the basis for his criminal conviction did not
specifically state that his offense is related to any
health care program. Petitioner's position on this issue
has no foundation in the law. Contrary to Petitioner's
position, the I.G. is not limited to the "four corners"
of the State statute in determining whether the convic-
tion meets the elements of section 1128(a)(1). In H.
Gene Blankenship, DAB CR42 (1989) at 11 (Docket No.
C-67), the administrative law judge stated that the
determination of whether a conviction is related to the
delivery of an item or service under the Medicare program
"must be a common sense determination based on all the
relevant facts as determined by the finder of fact, not
merely a narrow examination of the language within the
four corners of the final judgment and order of the
criminal trial court." To determine whether the
conviction falls within section 1128(a)(1), the I.G.
is not confined by the specific language of the
State statue, criminal conviction, or judgment.
A substantially broader test can be applied.

While the Act does not specifically define the term
"criminal offense related to the delivery of an item or
service", a criminal offense related to the delivery of
an item or service has been held to fall within the reach
of section 1128(a)(1) where:

[T]he 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.

Jack W. Greene, DAB 1078 (1989) at 7; aff'd sub nom.
Greene v. Sullivan, 731 F. Supp 835 and 838 (1990).
Under the rationale of Greene, a criminal offense is an
offense which is related to the delivery of an item or
service under Medicare or Medicaid where the delivery of
a Medicare or Medicaid item or service is an element in
the chain of events giving rise to the offense.

The facts of this case are that Petitioner was convicted
of forging a doctor's name on prescriptions that were
given to undercover agents from the Bureau of Medi-Cal
Fraud posing as Medi-Cal (Medicaid) recipients. The cost
of the medical treatment, including the prescriptions,
provided to the agents would have been billed to the
Medi-Cal (Medicaid) program had the Medi-Cal agents not
seized the billing for evidentiary purposes. The chain
of events giving rise to Petitioner's offense was the
visit to the Clinic of agents whom he thought were Medi-
Cal-eligible patients. The chain continued with
Petitioner's forging a doctor's name on prescriptions
that would ultimately be billed to Medicaid via the Medi-
Cal program. Under Greene, the offense is related to the
delivery of an item or service because the delivery of a
Medicaid item or service, here a prescription, is an
element in the chain of events giving rise to
Petitioner's conviction for forgery. Additionally under
Greene, the prescription is brought within the purview of
the program by the submission of a bill or claim for
Medicaid reimbursement.

Moreover, using the Blankenship common sense test yields
the same result as Greene mandates. Specifically, while
the language of Petitioner's conviction does not directly
mention Medicaid, all of the relevant facts surrounding
the conviction can be determined. In this case, it is
undisputed that Petitioner thought the undercover agents
were Medi-Cal recipients. Petitioner provided services
to the agents believing that the Clinic would be
reimbursed by the Medicaid program, through Medi-Cal. In
writing the prescriptions, Petitioner would have caused
the program to be billed for prescriptions written by a
licensed physician, even though Petitioner was not a
licensed physician. Where a non-physician's services
are billed to Medicaid as having been performed by a
physician, there is no question that Petitioner's
criminal offense relates to the delivery of an item or
service under Medicare. See Leon Brown, M.D., DAB CR83
(1990) (Docket No. C-180); aff'd DAB 1208 (1990).
Applying the applicable precedents to the uncontested
facts of this case supports the conclusion that
Petitioner's conviction is program-related.

Petitioner also contends that the I.G. must prove that
he knowingly and willfully engaged in conduct which
constituted an abuse or fraud of the program in order
to exclude him under section 1128(a)(1) of the Act.
Petitioner states in his brief that the I.G. has not
sustained his burden of proving fraud. Petitioner argues
that he had authorization from Dr. Gandotra to write
prescriptions. In support of his arguments, Petitioner
cites a letter from the prosecuting attorney, Pet. Ex. B.
The letter states that, in the opinion of the prosecutor,
Petitioner did not have the requisite criminal mind to
garner a felony conviction, only a misdemeanor, and that
Petitioner was instructed by Dr. Gandotra to forge
medical prescriptions.

Petitioner's argument that the I.G. must prove Petitioner
engaged in conduct which constituted an abuse or fraud of
the program is not supported by the statute or case
precedent. The DAB has specifically held that a convic-
tion of Medicaid fraud is not required to sustain an
exclusion under section 1128(a).

The sole test is whether the conviction involves delivery
of an item or service "related to" the Medicare or
Medicaid programs. See, DeWayne Franzen, DAB 1165
(1990). As the appellate panel stated in Franzen at 8:

Section 1128(a)(1) does not require that the
individual must intend to commit a criminal
offense, or indeed fraud, for an exclusion to
be proper. It merely requires, as here
applicable, that the individual's acts cause
the individual to be convicted of an offense
and that the offense be related to the delivery
of an item or service under the Medicaid
program.

In furtherance of his position that "fraud" is required
under section 1128(a), Petitioner cites Willie B.
Sherman, Jr., DAB CR105 (1990) (Docket No. C-235). As
the I.G. correctly points out at I.G. R. Br. 3 - 4,
Petitioner misreads this case and improperly interprets
language in the case referring to permissive exclusions
under section 1128(b) as applicable to section 1128(a) of
the Act. Section 1128(b) of the Act was enacted by
Congress in 1987 to cover criminal convictions that were
not related to the Medicare or Medicaid programs and,
therefore, prior to enactment of section 1128(b), outside
of the I.G.'s authority to impose exclusions. It is
correct that section 1128(b)(1) criminal convictions must
relate, inter alia, to "fraud." However, as the I.G.
notes at I.G. R. Br. 5, it is well settled law that where
both sections 1128(a) and 1128(b) can provide a basis for
an exclusion, the I.G. has no discretion to choose which
section to proceed under and must impose a minimum
mandatory exclusion under section 1128(a).

As stated by the appellate panel in Samuel W. Chang,
M.D., DAB 1198 (1990) at 8:

The permissive exclusion provisions of section
1128(b) apply to convictions for offenses other
than those related to the delivery of an item
or service under either the Medicare or
Medicaid or other covered programs. While it
is not inconceivable that one of the provisions
of section 1128(b) could have been applied in
the absence of section 1128(a), which provides
that the Secretary "shall" exclude individuals
where applicable, the permissive exclusion
provisions of subsection (b) focus on different
circumstances from those raised here, such as
where an individual's conviction does not
relate to the Medicare or Medicaid programs.

See, Charles W. Wheeler, DAB 1123 (1990); Leon Brown,
M.D., DAB 1208 (1990); Jack W. Greene, supra.

Petitioner erroneously relies on 42 C.F.R. 1002.1 et seq.
to further support his position that "fraud" or "abuse"
must be shown to exclude him from the Medicaid program.
This section refers to actions taken by Medicaid
agencies, not the I.G., to protect the integrity of the
program. The applicable section pertaining to actions by
the I.G. based on program-related criminal convictions is
42 C.F.R. 1001.122. This section states:

(a) The OIG will suspend from participation in
Medicare any party specified in paragraph (b)
of this section who is convicted on or after
October 25, 1987, of a criminal offense related
to --
(1) Participation in the delivery of medical
care or services under the Medicare or
Medicaid, or the social services program; . . .

Paragraph (b) states:

(b) The suspension from participation in
Medicare for conviction of a program-related
crime, specified in paragraph (a) of this
section, will apply to -- . . .

(3) Individuals who are employees,
administrators, or operators of
providers; . . .

A careful reading of this section of the regulations
fails to support Petitioner's position that the
regulations require a showing of "fraud" in a program-
related criminal conviction under section 1128(a) of the
Act. The operative language is the "delivery of medical
care or services under Medicare or Medicaid". If the
criminal conviction involves such care or services, it is
program-related and provides the I.G. with authority to
exclude.

Petitioner has presented as an exhibit a letter from the
prosecuting attorney in his criminal case. P Ex. B.
This letter states that Petitioner did not possess the
requisite intent to be charged with a felony. The letter
also states that Petitioner has cooperated with authori-
ties. The letter lends credence to Petitioner's
contention that he had permission from Dr. Gandotra to
sign prescriptions. There is no doubt that Petitioner
may have been misled by Dr. Gandotra into believing he
could practice medicine under the auspices of Dr.
Gandotra and even sign his name on prescriptions. I am
willing to concede that Petitioner believed his actions
were lawful. A simple comparison of the sentences
imposed on Petitioner and Dr. Gandotra strongly supports
the conclusion that Petitioner was not the principal in
the cited criminal offenses. However, these facts are
not material to whether Petitioner committed a program-
related crime, the sole issue before me in determining
whether the I.G. has authority to exclude him. Moreover,
absence the existence of a permissive exclusion, the
circumstances surrounding his criminal conduct can not be
considered when Petitioner's exclusion is the minimum
five year exclusion imposed by operation of law.


2. The exclusion imposed and directed against
Petitioner is mandated by law.

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act require
the I.G. to exclude individuals and entities from the
Medicare and Medicaid programs for a minimum period of
five years when such individuals and entities have been
convicted of a criminal offense relating to the delivery
of a health care item or service. Congressional intent
is clear from the express language of section
1128(c)(3)(B):

In the case of an exclusion under subsection (a),
the minimum period of exclusion shall be not less
than five years . . .

The I.G. must apply the minimum mandatory exclusion of
five years once a section 1128(a) violation is
established. Unlike cases brought under section 1128(b)
of the Act, where I have the authority to consider the
reasonableness of the exclusions and the trustworthiness
of petitioners, I have no discretion here and must affirm
the exclusion. Absence the exercise of discretion,
section 1128(a) violations unfortunately may result in
exclusions of a length seemingly disproportionate to the
severity of the crimes upon which the exclusions are
based.


CONCLUSION

Based on the law and the undisputed material facts of
this case, I conclude that the I.G. properly excluded
Petitioner from the Medicare and Medicaid programs for a
period of five years, pursuant to sections 1128(a)(1) and
1128(c)(3)(B) of the Act and accordingly grant summary
disposition in favor of the I.G. Petitioner's motion for
summary disposition is denied.

____________________________
Edward D. Steinman
Administrative Law Judge

1.
"State health care program" is defined by section
1128(h) of the Social Security Act to cover three types
of federally-financed health care programs, including
Medicaid. I use the term "Medicaid" hereafter to
represent all State health care programs from which
Petitioner was excluded.

2.
In his brief at 12, Petitioner seeks a summary
disposition in his favor, or in the alternative, that a
"formal hearing be set" for the receipt of additional
evidence. Since there is no dispute as to any material
fact regarding Petitioner's conviction and the
reasonableness of the exclusion is not at issue, there is
no need for an in-person hearing. In exclusion cases, an
in-person hearing is usually held where there are
outstanding issues of Petitioner's trustworthiness as
they relate to the reasonableness of the exclusion. The
minimum mandatory exclusion in this case obviates the
need for a hearing on such issues. The only issues
herein are legal. Thus, summary disposition is an
appropriate means to decide this case.

3.
The parties' exhibits and briefs will be cited as
follows:

I.G.'s Exhibit I.G.
Ex. (number)
Petitioner's Exhibit P. Ex.
(number)
I.G.'s Brief I.G. Br.
(page)
Petitioner's Brief P. Br.
(page)
I.G.'s Reply Brief I.G. R. Br.
(page)
My Findings and Conclusions FFCL
(number)


4.
Section 1128(i) of the Act defines a conviction for
purposes of sections 1128(a) and 1128(b) of the Act. It
reads, in relevant part "Conviction Defined. - For
purposes of subsections (a) and (b), an individual or
entity is considered to have been "convicted" of a
criminal offense - . . . (3) when a plea of guilty or
nolo contendere by the individual or entity has been
accepted by a Federal, State, or local court." Since
Petitioner does not address this point in his brief, he
apparently concedes that his "nolo contendere" plea and
resultant conviction comes within the purview of section
1128(i) of the Act.

5.
The I.G.'s citation to 42 C.F.R. 1001.123 is incorrect.
The correct citation is 42 C.F.R. 1001.122. Section
1001.122 refers to the notice given to the affected party
while section 1001.122 refers to the basis for the I.G.'s
action.