Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Randall E. Wierzba,
Petitioner,
- v. -
The Inspector General.
DATE: January 13, 1992
Docket No. C-353
DECISION
By letter dated December 20, 1990, the Inspector General
(I.G.) notified Randall E. Wierzba, Petitioner herein,
that he was being excluded for a period of five years
from participation in the Medicare program and from
participation in State health care programs as defined
in section 1128(h) of the Social Security Act (Act). In
this Decision, I refer to these State programs
collectively as Medicaid. This exclusion, the I.G.
contended, was mandated by section 1128(a)(1) of the Act,
which was triggered by Petitioner's conviction of a
criminal offense related to the delivery of services
under Medicaid. Section 1128(c)(3)(B) of the Act
provides that the minimum period of exclusion shall not
be less than five years.
The I.G. moved for summary disposition of the case.
Inasmuch as there are no material facts in dispute, I
conclude that there is no need for oral testimony or the
confrontation of witnesses and that summary disposition
is appropriate. I further conclude that, under the facts
of this case, a five-year exclusion is mandatory, and,
accordingly, summary disposition is entered in favor of
the I.G.
APPLICABLE LAW
Sections 1128(a)(1) and (c) of the Act (codified at
42 U.S.C. 1320a-7 (a)(1) and (c)) make it mandatory for
any individual who has been convicted of a criminal
offense related to the delivery of an item or service
under Medicare or Medicaid to be excluded from
participation in such programs for a period of at least
five years.
Section 1128(b)(1) permits, but does not mandate, the
exclusion from these same programs of any person whom the
Secretary of Health and Human Services (HHS) (or his
delegate, the I.G.) concludes is convicted of a criminal
offense related to fraud, theft, or other financial
misconduct. Before a person is excluded pursuant to
this provision, he is entitled to a hearing before an
administrative law judge. Section 1128(f)(2) of the Act.
BACKGROUND
The facts giving rise to the conviction are that in June
1988, Petitioner pled guilty in the New York State
Supreme Court, Erie County, to attempted grand larceny
against the Medicaid program.
After being informed of his exclusion, Petitioner filed
the present action in which he contends that his
conviction was not related to the delivery of services
under Medicaid or Medicare and that the I.G.'s
application of the mandatory exclusion provisions of the
law was inappropriate. Instead, Petitioner suggests that
the I.G. should have proceeded under the permissive
exclusion provisions of section 1128(b)(1). Petitioner's
second contention is that the onset date of the exclusion
-- two and one half years after his criminal conviction
and New York State's banning him from its Medicaid
program -- unjustifiably extended the exclusion's overall
length and caused him economic hardship. Furthermore,
Petitioner argues that the I.G.'s tardiness deprived him
of his right to a "reasonable" opportunity for a hearing,
as provided by section 1128(f)(1).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner, in his capacity as President of Courtesy
Wheelchair Van Service, Inc., submitted fraudulent claims
for Medicaid reimbursement for services which were not
rendered. I.G. Ex. 1 & 2. 1/
2. On June 14, 1988, Petitioner pled guilty in the New
York State Supreme Court, Erie County, to a single felony
count of attempted grand larceny, consisting of
submitting false invoices to the Erie County Department
of Social Services for reimbursement under the Medicaid
program. I.G. Ex. 1.
3. The State of New York excluded Petitioner from
participation in Medicaid for a period of two years,
effective June 1988. I.G. Ex. 4.
4. The Secretary of HHS has delegated to the I.G. the
authority to determine and impose exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21662 (May 13,
1983).
5. On December 20, 1990, the I.G. notified Petitioner
that, based upon his criminal conviction, he was being
excluded for five years from the Medicaid and Medicare
programs pursuant to section 1128(a)(1) of the Act. I.G.
Ex. 6.
6. A criminal conviction for submitting fraudulent bills
for services not rendered is sufficiently related to the
delivery of an item or service under Medicare or Medicaid
to justify application of the mandatory exclusion
provisions of section 1128(a)(1).
7. The I.G. is under no obligation to proceed under the
permissive exclusion provisions of section 1128(b)(1)
against a person whom there might be reason to suspect of
fraud. Once such person has been convicted, though,
exclusion is mandatory.
DISCUSSION
First, as to the applicability of section 1128(a)(1), it
has already been held that submitting fraudulent
Medicaid claims constitutes a program-related offense
which justifies mandatory exclusion. Russell E. Baisley
et al., DAB CR128 (1991); Marie Chappell, DAB CR109
(1990). These holdings comport fully with the intent of
Congress (expressed when the mandatory exclusion
provisions of section 1128 were added to the Act in 1977)
that such suspensions should " . . . serve as a
significant deterrent to fraudulent practices under
Medicare and Medicaid" and combat the misuse of Federal
and State funds. H. Rep. No. 393, 95th Cong., 1st Sess.
44, 69 (1977), reprinted in 1977 U.S. Code Cong. & Admin.
News, 3039, 3047, 3072.
It is undeniable that there can be subject matter overlap
between the mandatory exclusion for criminal conviction
provisions of section 1128(a)(1) and the permissive
exclusions for fraud or other financial misconduct
authorized by section 1128(b)(1). Nevertheless, there is
clear precedent holding that the Secretary is under no
obligation to proceed under section 1128(b), but that
once a person has been convicted of a program-related
criminal offense, the exclusion is mandatory. See, e.g.,
Leon Brown, M.D., DAB CR83, aff'd, DAB 1208 (1990).
Support for this rationale is also derived from the Act's
legislative history. Exclusion hearings were apparently
intended to allow accused persons the opportunity to
clarify and explain their actions in cases where no
criminal conviction had as yet been obtained. 133 Cong.
Rec. 20,922 (1987). Thus, inasmuch as these exclusion
proceedings were not instituted until after the criminal
conviction, it was appropriate for the I.G. to invoke the
mandatory exclusion rule.
It has also been expressly held that an administrative
law judge has no authority to alter the designated
effective date of a period of exclusion. Samuel W.
Chang, M.D., DAB 1198 (1990); Christino Enriquez, M.D.,
DAB CR119 (1991).
CONCLUSION
The I.G. committed no error by not proceeding against
Petitioner under the permissive exclusion provisions of
Section 1128(b)(1). The language of these statutory
provisions, as well as relevant precedent, show that the
use of these provisions is discretionary and that the
I.G. is not obliged to take action against every person
whom there might be grounds to suspect.
However, once Petitioner had been convicted (of an
offense that I have found to be related to the delivery
of items or services under Medicaid), the mandatory
provisions of section 1128(a)(1) left the I.G. with no
option but to exclude him.
The exclusion is AFFIRMED.
____________________________
Joseph K. Riotto
Administrative Law Judge
1. The I.G. filed seven exhibits with his memorandum
accompanied by the required declaration and designated as
Respondent's exhibits 1-7. These exhibits are admitted
into evidence, but I have designated the exhibits as I.G.
Ex. 1-7. Petitioner filed an attachment with his
exhibit, accompanied by the required declaration, this
exhibit is admitted into evidence, and I have designated
it as P. Ex. 1.