Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Magdi Z. Fahmy, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: February 19, 1992
Docket No. C-92-014
DECISION
By letter dated October 22. 1991, the Inspector General (I.G.) of the U.S.
Department of Health & Human
Services notified Magdi Z. Fahmy, M.D., Petitioner, that he was being excluded
for a period of five years
from partici-pation in the Medicare program and from participation in the State
health care programs
identified in section 1128(h) of the Social Security Act (Act). (Hereinafter,
these State health care
programs are referred to collectively as Medicaid.) The I.G. stated that the
exclusion was mandated by
section 1128(a)(1) of the Act, based upon Petitioner's conviction of a criminal
offense related to the
delivery of services under Medicaid.
The record indicates that Petitioner made false or fraudulent representations,
relating to unnecessary
medical services (breathing tests), on claims for Medicaid reimbursement. On
April 15, 1991, Petitioner
entered a plea, "pursuant to North Carolina v. Alford," in the Franklin
Circuit Court, Commonwealth of
Kentucky, to the offense of knowingly making false or fraudulent representations
in claims or applications
for government benefits. I.G. Exhibit (hereinafter I.G. Ex.) 2.
After being informed of his exclusion, Petitioner filed the present action
in which he contends that the
I.G.'s reliance upon the mandatory exclusion provisions of the Act was inappropriate.
Petitioner contends
that instead the I.G. should have proceeded under the permissive exclusion provisions
of section 1128(b)
which permit the exclusion of persons convicted of an offense "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 ... government."
Petitioner contends also that he performed genuine medical procedures which
benefitted his patients -- he
merely failed to document their necessity, purportedly without any fraudulent
intent. Lastly, Petitioner
argues that he should not be excluded at all, in light of his having made restitution,
having reimbursed the
costs of investigation, and having undergone a period of probation.
I conclude that no issues have been raised which necessitate 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, enter summary disposition
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)(7) permits, but does not mandate, the exclusion from these same
programs of any person
whom the Secretary of HHS (or the I.G.) concludes is guilty of program-related
fraud, kickbacks, or related
activities. Before a person is excluded pursuant to the "b" provi-sions,
he is entitled to a hearing before an
administrative law judge (1128(f)(2)).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner knowingly submitted criminally false or fraudulent representations,
relating to unnecessary
medical services, on claims for Medicaid reimbursement. I.G. Ex. 1.
2. On April 15, 1991, Petitioner entered a plea "pursuant to North Carolina
v. Alford" in the Franklin
Circuit Court, Commonwealth of Kentucky. I.G. Ex. 2, 4, 5.
3. Based upon this plea, the court entered a "judgment of conviction"
and sentenced Petitioner to restitution
($35,000 to Kentucky Medicaid, plus $10,000 to reimburse investigative costs),
and probation. I.G. Ex. 4.
4. The Secretary of Health and Human Services 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 October 22. 1991, the I.G. notified Petitioner that, based upon his criminal
conviction, he was being
excluded for five years from the Medicaid and Medicare programs. I.G. Ex. 8.
6. An "Alford" plea to a criminal charge satisfies the requirement
that Petitioner has been convicted within
the meaning of section 1128(i) of the Act.
7. A criminal conviction for knowingly making false representations on Medicaid
claims constitutes a
scheme to defraud Medicaid, for which is manifestly "related to the delivery
of an item or service" under
such program and justifies the application of section 1128(a)(1).
8. That Petitioner may have actually performed services of some value is irrelevant.
9. Once a person has been convicted of a program-related criminal offense, exclusion is mandatory.
DISCUSSION
First, it must be noted that prior decisions of the Departmental Appeals Board
have unequivocally held that
an "Alford" plea to a criminal charge satisfies the requirement that
Petitioner have been convicted within
the meaning of section 1128(i) of the Act. Russell E. Baisley, DAB CR128 (1991);
Raymond R. Veloso,
DAB CR124 (1991). This precedent is controlling in the instant case.
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, 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.
That Petitioner may have actually performed services of some value is irrelevant.
His suggestion that his
only offense was merely failing to adequately document such services' value
is unconvincing. Petitioner
acknowledged, in plea documents, having knowingly made criminally false representations
on Medicaid
claims (apparently regarding the extent, nature, or value of his services),
and it is evident from the record
and the amount of restitution imposed upon him that he profited considerably
thereby. (It should be noted
that Petitioner offered no affidavit or other evidence to support his suggestion
of inadvertence or to dispute
the court records submitted by the I.G.) I therefore find that the essence of
the conduct Petitioner pled to
was a scheme to defraud Medicaid, the conviction for which is "related
to the delivery of an item or
service" under such program, and justifies the application of section 1128(a)(1).
Indeed, once a person has
been convicted of a program-related criminal offense, exclusion is mandatory.
See e.g., Leon Brown,
M.D., DAB CR83, aff'd DAB 1208 (1990).
CONCLUSION
Petitioner's conduct mandated exclusion pursuant to section 1128(a)(1). The
I.G. correctly chose not to
proceed against Petitioner under the permissive exclusion provisions of Section
1128(b).
____________________________
Joseph K. Riotto
Administrative Law Judge