Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Mark Gventer, D.P.M.,
Petitioner,
- v. -
The Inspector General.
DATE: January 21, 1992
Docket No. C-397
DECISION
In this case, governed by section 1128 of the Social
Security Act (Act), the Inspector General (I.G.) of
the Department of Health and Human Services notified
Petitioner by letter dated May 17, 1991, that he was
being excluded from participation in the Medicare and
State health care programs for five years. 1/
Petitioner was advised that his exclusion resulted from
the fact that he was convicted of a criminal offense
related to the delivery of a health care item or service
under Medicaid. Petitioner was further advised that his
exclusion was authorized by section 1128(a)(1) of the 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 filed a request for a hearing before an
administrative law judge (ALJ), and the case was assigned
to me for hearing and decision. During the prehearing
conference held on August 1, 1991, Petitioner admitted
that his conviction of a criminal offense came within the
purview of section 1128(i) of the Act. Moreover, the
parties agreed that this matter could proceed by motion
for summary disposition on other issues relating to the
I.G.'s authority to exclude and the reasonableness of the
mandated five-year exclusion. In my prehearing order of
August 2, 1991, I established a schedule for the submis-
sion of briefs. The I.G. filed a motion for summary
disposition and supporting brief, and Petitioner filed a
brief in response to the I.G.'s motion. Both the I.G.
and Petitioner filed reply briefs. Neither party
requested oral argument.
I have considered the arguments, the evidence, and the
applicable law. I conclude that there is no dispute
as to any material facts, the parties do not seek oral
argument, and that summary disposition is therefore
appropriate. 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:
(1) Petitioner was convicted of a criminal
offense "related to the delivery of a health care
item or service," within the meaning of section
1128(a)(1) of the Act;
(2) Petitioner is subject to the minimum mandatory
five-year exclusion provisions of sections
1128(a)(1) and 1128(c)(3)(B) of the Act;
(3) The I.G.'s exclusion determination amounts to
an unlawful retroactive application of the mandatory
exclusion provisions of the Act;
(4) Petitioner may collaterally challenge his state
conviction in this proceeding; and
(5) Petitioner may rely on mitigating circumstances
to reduce the period of his exclusion.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 2/
1. Petitioner is and has been a licensed, self-employed
podiatrist in Brooklyn, New York. P. Ex. 2/1 3/ P.
Memo. 2.
2. In or before 1985, Petitioner agreed to purchase
from Dr. Mark Nelson's laboratory, Midstance, orthotics
for his patients. The orthotics fabricated by Midstance
were based on Petitioner's specifications and were cast
on the basis of a two-dimensional impression. Such
orthotics were used to provide support/correction for
patients with gait deformities. Petitioner was led to
believe that these were custom orthotics and were
reimbursable under Medicaid billing code 90473, which had
a reimbursement rate of $46.00. P. Memo. 3 - 6; P. Ex.
8.
3. In 1987, the New York State Podiatry Society
obtained a clarification from Medicaid that a three-
dimensional casting was necessary to support
reimbursement under billing code 90473. Orthotics which
were based on less than a three-dimensional casting were
reimbursable under billing code 90477 at a rate of
$18.00. P. Memo. 4 - 5; P. Ex. 4, 8.
4. An 11-count indictment was filed against Petitioner
in the Supreme Court of New York, County of Albany,
charging Petitioner with one count of grand larceny in
the fourth degree and ten counts of offering a false
instrument for filing in the first degree. I.G. Ex. 1.
5. On January 8, 1991, Petitioner pled guilty to, and
was convicted of, count one of the indictment, attempted
grand larceny in the fourth degree, a misdemeanor. I.G.
Ex. 2/4; I.G. Ex. 1.
6. Count one of the indictment states that from
February 20, 1985 to November 6, 1985, Petitioner
submitted to McAuto Systems, Inc., fiscal agent of the
State of New York, numerous claims stating that he had
provided foot molds fabricated from casts to various
Medicaid recipients, when in fact he did not provide
appliances made from a cast. 4/ In reliance on these
false claims, the State paid Petitioner approximately
$1,794 to which he was not entitled. I.G. Ex. 1; 2/16.
7. During his sentencing, Petitioner admitted that he
had wrongfully billed an orthotic device under a Medicaid
code, that he should have received less payment from
Medicaid for that device, and that he should have billed
for the device at a different Medicaid code. I.G. Ex.
2/16.
8. Petitioner was sentenced to a conditional discharge
and as an element of his plea he was required to make
full restitution to the State in the amount of $7,396.80
(for a total of $9,671.44, which includes interest) for
the incorrectly billed orthotics. I.G. Ex. 2/20; P.
Memo. 8.
9. Petitioner's criminal conviction in the Supreme
Court of the State of New York, County of Albany, is
within the meaning of section 1128(i) of the Act.
Admission of Petitioner.
10. 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. FFCL 4 - 6.
11. 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.
21662 (May 13, 1983).
12. On May 17, 1991, the I.G. excluded Petitioner from
participating in the Medicare and Medicaid programs for a
period of five years. I.G. Ex. 3.
13. There are no disputed issues of material fact in
this case, and summary disposition is appropriate. FFCL
1 - 10.
14. Petitioner may not collaterally challenge his
state conviction in this proceeding nor are mitigating
circumstances surrounding Petitioner's conviction
relevant to the length of his exclusion.
15. 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.
16. 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
1128(c)(3)(B) of the Act.
17. The exclusion imposed and directed against
Petitioner by the I.G. is mandated by law. Sections
1128(a)(1) and 1128(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, Mark Gventer, is a licensed podiatrist in
Brooklyn, New York. FFCL 1. Petitioner pled guilty
to, and was convicted of, attempted grand larceny in
the fourth degree, a misdemeanor. FFCL 3, 5-6.
Specifically, Petitioner was charged with submitting to
McAuto Systems, Inc., a fiscal agent of the State of New
York, numerous claims which stated that he had provided
foot molds fabricated from casts to various Medicaid
recipients, when, in fact, he did not provide appliances
made from a cast. FFCL 6. In reliance on these false
claims, the State paid Petitioner in 1985 approximately
$1,794 to which he was not entitled. FFCL 6; I.G. Ex. 1;
P. Memo 3. Petitioner was sentenced to a conditional
discharge and ordered to make full restitution to the
State in the amount of $7,396.80 (for a total of
$9,671.44, which includes interest) for the incorrectly
billed orthotics over a three-year period. FFCL 6, 8.
The I.G. imposed and directed a five-year exclusion
against Petitioner in May 1991, pursuant to section
1128(a)(1) of the Act. FFCL 11.
Petitioner admits that he was convicted of a criminal
offense, within the meaning of section 1128(i). However,
Petitioner argues that the criminal offense to which he
pled guilty was not related to the delivery of an item or
service under section 1128(a)(1) of the Act and therefore
does not fall within the mandatory five-year exclusion
period. I.G. Ex. 4; P. Memo. 1.
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.
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). See
also Ricardo Santos, DAB CR165 (1991) at 7. 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.
In H. Gene Blankenship, DAB CR42 (1989) at 11, the ALJ
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."
The facts in this case are that Petitioner pled guilty
to, and was convicted of, attempted grand larceny for
falsifying Medicaid reimbursement claims. FFCL 5.
Petitioner incorrectly submitted reimbursement claim
forms to Medicaid under billing code 90473 at a rate of
$46.00 for orthotics fabricated from less than three-
dimensional casts. FFCL 2. The correct billing code for
such orthotics was 90477 at a rate of $18.00. FFCL 3.
Petitioner improperly billed Medicaid over a three-year
period. FFCL 6. Because of these incorrect billings,
Petitioner received $7,396.80 in excess of the amount he
was entitled, to the detriment of the Medicaid program.
FFCL 8.
Common sense, as well as prior decisions of the
Departmental Appeals Board (DAB), lead me to conclude
that Petitioner's conviction was program related, within
the meaning of section 1128(a)(1). The conviction is,
both under the Blankenship test of "common sense
determination based on all of the relevant facts," and
under the Greene test of "an act that directly and
necessarily follows from the delivery of the item or
service," directly related to the Medicare and Medicaid
programs. An appellate panel of the DAB has also held
that a conviction of a criminal offense is related to the
delivery of an item or service under Medicare or Medicaid
where the victim of the offense is the Medicare or
Medicaid program. Napoleon S. Maminta, DAB 1135 (1990).
That was plainly the case here.
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. Also, in such a case, the review by the ALJ
is limited to determining whether there is a basis for
the exclusion. The I.G. proved here that there was a
basis, and thus I affirm the exclusion.
3. 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 in 1985, prior to the
effective date of the legislation mandating a minimum
five-year exclusion. Petitioner argues that the
exclusion amounts to an unlawful retroactive application
of the mandatory exclusion provisions of the Act. I.G.
Ex. 4.
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., et
al., DAB CR76 (1990), aff'd, DAB 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 provi-
sion, 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 convic-
tions 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 amend-
ments. Petitioner was convicted of a program-related
offense on January 8, 1991, more than three years after
the enactment of the amendments to the Act. The I.G.'s
authority to impose and direct exclusions against
Petitioner arose from his conviction on January 8, 1991,
and that is the controlling event specified by Congress
in its 1987 amendments. Therefore, the act which gave
the I.G. grounds to exclude Petitioner occurred after the
date that Congress enacted the 1987 statutory revisions.
Based on 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.
4. Petitioner may not collaterally challenge his State
conviction in this proceeding.
Petitioner appears to be arguing that his conviction for
submitting false claims to Medicaid was not program
related because of the following:
(1) He pled guilty even though he could not
truthfully state at his sentencing to knowingly
engaging in criminal conduct when he submitted
billings for the orthotics in 1985. P. Memo. 6; P.
Reply.
(2) He only ordered orthotics when they were
medically necessary; and, in any event, the
orthotics were reimbursable by Medicaid, although at
a lower billing rate than Petitioner claimed. I.G.
Ex. 4.
(3) His conduct was the result of being misled by
the lab he used. P. Memo. 4 - 7.
(4) It was not until November 1987 that the New York
State Podiatry Society was able to get clarification
on the correct billing classification for custom
orthotics for Medicaid purposes. P. Ex. 3; P. Memo.
4 - 5. See also P. Ex. 4.
The I.G. argues that Petitioner may not now collaterally
attack his State court conviction. I.G. Reply 2 - 5.
Even assuming that all of Petitioner's assertions of fact
are true, they are not relevant to the issue of whether
the I.G. was required to impose and direct an exclusion
against Petitioner. The I.G.'s authority to exclude a
party under section 1128(a)(1) arises by virtue of that
party's conviction of a criminal offense, as described in
the Act. The underlying conduct behind the conviction,
except for the limited purpose of establishing the
"related to" requirement of the statute, is not relevant
in considering whether the I.G. had authority to impose
and direct a mandatory exclusion pursuant to section
1128(a)(1). The conviction, and not the underlying
conduct, is the triggering event which requires the I.G.
to impose and direct an exclusion. It is not relevant
to the issue of the I.G.'s authority that the criminal
conviction may have been defective or that the conduct
which resulted in the conviction may no longer be
unlawful. See Richard G. Philips, D.P.M., DAB CR133
(1991), aff'd, DAB 1279 (1991); Andy E. Bailey, C.T., DAB
CR47 (1989), aff'd, DAB 1131 (1990); John W. Foderick,
M.D., DAB 1125 (1990). A party who believes his
conviction was defective is not without recourse. That
party may appeal the conviction in a court which has
jurisdiction over the matter. If the conviction is
overturned on appeal, then the I.G. would reinstate the
excluded party. See 42 C.F.R. 1001.136(a).
5. I do not have the authority to grant Petitioner the
extraordinary relief requested.
Petitioner argues that, if an exclusion is ordered, there
are mitigating circumstances which compel a reduction in
the proposed five years, regardless of the minimum
mandatory provisions. Petitioner contends that at the
time he submitted the orthotic billings for Medicaid
patients, he did not intentionally engage in conduct to
defraud Medicaid and he believes this is mitigating in
terms of his intent. P. Memo. 7; I.G. Ex. 4. Petitioner
asserts that because he practices podiatry in a community
serving an elderly and disabled population, these clients
would not have immediate access to podiatric care. I.G.
Ex. 4. Since Petitioner would like me to consider his
personal and professional devotion to the community in
which he practices, he presents character letters from
colleagues, patients, elected officials, and community
leaders. P. Memo. 2; P. Ex. 2.
I do not have the authority to grant the type of
extraordinary relief which Petitioner seeks. However,
Petitioner pled guilty to a single count of attempted
grand larceny, pursuant to section 155.30 of New York
State's Penal Law, as further defined in section 110 of
the State's Penal Law. Section 110 of the Penal Law
states that "[a] person is guilty of an attempt to commit
a crime when, with intent to commit a crime, he engages
in conduct which tends to effect the commission of such
crime." N.Y. Penal Law section 110 (McKinney 1991).
Petitioner pled guilty to attempted grand larceny for
falsifying Medicaid claims and "intent" is a requisite
element of the crime to which he pled guilty.
Petitioner's argument that he did not intend to falsify
Medicaid claims is contrary to his plea. Further, the
provisions of section 1128(a)(1) do not require that the
individual must intend to commit the criminal offense in
order for an exclusion to be proper. Section 1128(a)(1)
requires only 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. Dewayne Franzen, DAB 1165
(1990) at 8.
I might be inclined to reduce Petitioner's period of
exclusion if the law permitted me to consider mitigating
circumstances. It is quite possible that Petitioner was
misled or at least misinformed as to Medicaid's require-
ments for billing of orthotics under billing code 90473.
However, in this proceeding, the scope of my review does
not include mitigating circumstances, such as the degree
of Petitioner's culpability as evidenced by his intent
(or lack thereof), or other evidence of his trustworthi-
ness to be a provider of Medicare or Medicaid as
reflected in his character letters. There is no
equitable relief from the minimum mandatory provisions of
section 1128 of the Act. The equities of a particular
case are not relevant with respect to the issue of
whether the minimum mandatory exclusion provisions apply
to that case, and I do not have the authority to reduce
the minimum exclusion mandated by section 1128(c)(3)(B).
See Orlando Ariz, et al., DAB CR69 (1990).
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. Accordingly, I grant summary
disposition in favor of the I.G.
________________________
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. The I.G. filed four exhibits with his memorandum,
accompanied by the required declaration. Although the
I.G. designated these exhibits in his memorandum as
Respondent's exhibits, I have designated the exhibits as
I.G. exhibits. These exhibits are admitted into
evidence. Petitioner filed seven exhibits with his
memorandum, without the required declaration. Petitioner
submitted his exhibits with letters (A - G). However, I
have designated the exhibits as Petitioner's exhibits 1 -
7. Petitioner filed an attachment with his reply and
this is designated as Petitioner's exhibit 8. Since the
I.G. did not object to the authenticity of any of
Petitioner's exhibits, these exhibits are admitted into
evidence.
3. Citations to the record in this Decision are as
follows:
Petitioner's Exhibit P. Ex. (number)
Petitioner's Memorandum P. Memo. (page)
Petitioner's Sur-Reply P. Reply (page)
I.G.'s Exhibit I.G. Ex. (number)/(page)
I.G.'s Memorandum I.G. Memo. (page)
I.G.'s Reply I.G. Reply (page)
Findings of Fact and FFCL (number)
Conclusions of Law
4. At the sentencing, Petitioner's attorney stated for
the record that Petitioner was making restitution for
false claims over a three-year period, and not the few
months stated in the indictment. I.G. Ex. 2/16, 17.