Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Ian C. Klein, D.P.M.,
Petitioner,
- v. -
The Inspector General.
DATE: February 20, 1992
Docket No. C-373
DECISION
By letter dated September 6, 1990, the Inspector General (I.G.) notified Petitioner
Ian C. Klein, D.P.M.
(Petitioner) that he was being excluded from participa-tion in the Medicare
program, and any State health
care program, as defined in section 1128(h) of the Social Security Act (Act).
1/ The I.G.'s notice informed
Petitioner that his exclusion resulted from a State conviction of a criminal
offense related to the delivery of
an item or service under Medicare. The I.G. further informed Petitioner that
section 1128(a)(1) of the Act
requires that individuals and entities convicted of such program-related offenses
be excluded for a
minimum period of five years. The I.G. told Petitioner that he was being excluded
for a period of five
years, the mandatory minimum under section 1128(c)(3)(B).
In a letter dated April 23, 1991, Petitioner requested a hearing and the case
was assigned to me for hearing
and decision. On June 3, 1991, I held a prehearing conference during which the
I.G. indicated he would
move to dismiss Petitioner's request for a hearing as being untimely filed.
In my Ruling of July 30, 1991, I
ruled that good cause existed to give Petitioner an extended filing deadline
of April 23, 1991.
I held a second prehearing conference on September 23, 1991. At this conference,
Petitioner admitted that
he had been convicted of a criminal offense within the meaning of section 1128(i)
of the Act, but denied
that his conviction was related to the delivery of an item or service under
Medicare. I established a
schedule for the I.G. to file a motion for summary disposition on the remaining
issue of whether
Petitioner's conviction was for an offense which was related to the delivery
of an item or service under
Medicare within the meaning of section 1128(a)(1) of the Act.
The parties timely filed their motions and briefs along with supporting exhibits.
I have admitted all of the
parties' exhibits into evidence. 2/ I have considered the evidence, the parties'
written briefs and supporting
exhibits, and the applicable laws and regulations. There are no disputed issues
of material fact in this case
which would preclude the entry of summary disposition. I conclude that the I.G.
was mandated by section
1128(a)(1) to exclude Petitioners for five years. I therefore sustain the exclusion.
ISSUE
The issue in this case is whether 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
Social Security Act (Act).
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner Ian Charles Klein (Petitioner) was indicted in State court in
New York for 2 counts of
grand larceny in the second degree and 10 counts of offering a false instrument
for filing in the first degree,
a total of 12 counts. I.G. Ex. 1.
2. Under Count Two of the indictment, Petitioner was charged with having submitted
and causing to
be submitted to McAuto Systems Group, Inc., a fiscal agent of the State of New
York, numerous Medicaid
claim forms which falsely represented that Molded Plastazote Inlays, reimbursable
at $220 a pair, had been
provided to Medicaid recipients, whereas, in truth and in fact, as the defendants
well knew, stock plastazote
inlays that were not molded to patients feet were actually provided. Petitioner
was charged, along with
Arthur Minkoff, with intentionally causing the State of New York to pay the
above-named entities
approximately $95,420 to which they were not entitled. I.G. Ex. 1/3-4.
3. On August 29, 1988, Petitioner entered a plea of guilty under count two
of the indictment. I.G.
Ex. 2/3.
4. Petitioner admitted that he presented Medicaid reimbursement claims for
custom made orthotics
when in fact he had supplied patients with non-custom stock items and further
admitted that he accepted a
kickback for prescribing the orthotics. I.G. Ex. 2/12 - 13.
5. Petitioner was sentenced on October 28, 1988 to pay $7,500 in restitution
to the Medicaid
program and placed on five years probation. 3/
6. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under
Medicaid. Findings 1 - 5.
7. The Secretary of Health and Human Services (Secretary) delegated to the
I.G. the authority to
determine, impose, and direct exclusions pursuant to section 1128(a)(1) of the
Act. 48 Fed. Reg. 21622
(May 13, 1983).
8. On September 6, 1990, the I.G. excluded Petitioner from participating in
Medicare and directed he
be excluded from Medicaid, pursuant to section 1128(a)(1) of the Act.
9. There are no disputed issues of material fact in this case and summary disposition is appropriate.
10. The exclusion imposed and directed against Petitioner is for five years,
the minimum period
required under the Act. Social Security Act, sections 1128(a)(1) and 1128(c)(3)(B).
11. The exclusion imposed and directed against Petitioner by the I.G. is mandated
by law. Findings 1
- 7; Social Security Act, sections 1128(a)(1) and 1128(c)(3)(B).
ANALYSIS
There are no disputed material facts in this case. Petitioner is a podiatrist
who supplied items or services to
Medicaid recipients. P. Ex. 1. Petitioner was indicted for two counts of grand
larceny in the second degree
and ten counts of offering a false instrument for filing in the first degree.
On August 29, 1988, Petitioner
pled guilty to count two of the indictment, to the criminal offense of grand
larceny in the second degree.
Count two of Petitioner's indictment specifically states that Petitioner submitted
and caused to be submitted
Medicaid claim forms which falsely represented items provided to Medicaid recipients.
Based on this
conviction, the I.G. excluded Petitioner under section 1128(a)(1) of the Act.
Petitioner admits that his crime is a conviction within the meaning of section
1128(i). However, Petitioner
disputes that his conviction is related to the delivery of an item or service
under the Medicaid program
within the meaning of section 1128(a)(1). 4/ Although Petitioner does not deny
his conviction, he contends
that he was not the party who actually committed an act of larceny against the
New York Medicaid
program. Petitioner asserts that, notwithstanding his conviction, the perpetrator
of the offense was the
laboratory which presented the false Medicaid reimbursement claims.
I disagree with Petitioner's contention. Irrespective of any contention now
made by Petitioner concerning
the facts of his case, the undisputed facts are that Petitioner was convicted
of the criminal offense of
larceny against the New York Medicaid program. That conviction is in and of
itself sufficient to establish
the requisite basis for the exclusion imposed and directed against Petitioner
by the I.G. Furthermore,
inasmuch as this is a case which falls within the mandatory exclusion provisions
of section 1128, Petitioner
must be excluded based on his conviction, regardless of any assertions he makes
concerning his culpability
for the offense of which he was convicted.
Section 1128(a)(1) of the Act requires the Secretary (or his lawful delegate,
the I.G.) to impose and direct
an exclusion against 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 any . . . [Medicaid] program.
Section 1128(c)(3)(B) provides that the minimum term for any exclusion imposed
under section 1128(a)(1)
is five years.
The Act does not define the term "criminal offense related to the delivery
of an item or service." In Jack
W. Greene, DAB App. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835 and 838 (E.D.
Tenn. 1990), an appellate panel of the Departmental Appeals Board (Board) held
that a conviction for
submission of a false Medicaid claim was a conviction within the meaning of
section 1128(a)(1). The
appellate panel held that the offens
was directly related to the delivery of an item or service under Medicaid:
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.
Petitioner's conviction is clearly detailed in the minutes of the plea agreement.
Petitioner, represented by
counsel, entered a guilty plea to the second count of his indictment for grand
larceny in the second degree.
I.G. Ex. 2/3. The second count of Petitioner's indictment specifically states
that Petitioner, acting with
others, "took, obtained and withheld property valued in excess of $1,500
by submitting numerous Medicaid
claim forms which falsely represented that Molded Plastazote Inlays, reimbursable
at $220 a pair, had been
provided to Medicaid, whereas, in truth and in fact, as the defendants well
knew, stock plastazote inlays
that were not molded to patients feet were actually provided." I.G. Ex.
1/3.
The evidence leaves no doubt that the crime to which Petitioner pled guilty
was submitting false Medicaid
claim forms which claimed expensive custom inserts were provided, when, in fact,
cheaper standard inserts
were provided. The specific references made by the court in accepting the plea
and Petitioner's attorney in
offering the plea, make it clear that Petitioner's guilty plea was for submitting
false bills to the Medicaid
program. I.G. Ex. 2/3. Under the test enunciated in Greene, Petitioner's crime
is related to the delivery of
an item or service under Medicaid.
An appellate panel of the Board also has 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, M.D., DAB App. 1135 (1990). The petitioner
in Maminta
was convicted of converting a Medicare reimbursement check to his own use, when
the check was intended
to be paid to another health care provider. Moreover, in Richard G. Phillips,
DAB Civ. Rem C-347 (1991)
it was held that a conviction for presentation of a false Medicaid claim is
a conviction of an offense related
to the delivery of an item or service under Medicaid.
The rationale of Maminta and Phillips applies here. Both the indictment and
the conviction specifically
state that Petitioner's crime was willfully and knowingly submitting false Medicaid
claims. I.G. Exs. 1/3;
2/3. The victim of Petitioner's criminal offense was the New York Medicaid program.
Petitioner's criminal
conviction therefore satisfies the tests enunciated in Maminta and Phillips.
Petitioner's contention that his conviction is not related to the Medicaid
program is without merit.
Essentially, Petitioner contends that he is not in fact guilty of the offense
to which he pleaded and of which
he was convicted. Rather, according to Petitioner, the actual perpetrator of
the offense was the laboratory
which presented false claims for Medicaid items or services. P. Br. at 4.
However, the issue in this case is not who billed Medicaid, or even whether
there exist facts which
exculpate Petitioner. The issue is whether Petitioner's conviction is related
to the delivery of a Medicaid
item or service within the meaning of section 1128(a)(1). As I find above, Petitioner
pled guilty to count
two of a criminal indictment which avers that he presented false claims to Medicaid.
Petitioner was
convicted of larceny against the New York Medicaid program. The mandate for
exclusion contained in
section 1128(a)(1) is premised on a conviction of a criminal offense related
to the delivery of an item or
service under Medicare or Medicaid. Petitioner was convicted of such an offense.
It is irrelevant that
Petitioner now asserts that some third party is actually culpable for the offense
of which Petitioner was
convicted.
CONCLUSION
Based on the undisputed material facts, the evidence and the law, I conclude
that Petitioner was convicted
of a criminal offense within the meaning of section 1128(a)(1) of the Act. I
conclude that the I.G.'s
determination to exclude Petitioner from participation in Medicaid for five
years was mandated by law.
Therefore, I enter summary disposition in favor of the I.G. and sustain the
five year exclusion imposed
against Petitioner.
_________________________
Steven T. Kessel
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 parties' exhibits, briefs, and stipulations will be referred to as follows:
I.G.'s Exhibits I.G. Ex. (number/page)
Petitioner's Exhibits P. Ex. (number/page)
I.G.'s Brief I.G. Br. (page)
Petitioner's Brief P. Br. (page)
3. At the sentencing proceedings on October 28, 1992, the State Court mischaracterizes
Petitioner's
conviction. The court stated that Petitioner was convicted of grand larceny
third degree under Count Two
of the indictment. I.G. Ex. 3/4. However, Count Two of Petitioner's indictment
states that Petitioner was
indicted for grand larceny second degree. FFCL 2; I.G. Ex. 1/3. Additionally,
when Petitioner pled guilty
on August 29, 1988, the Court accepted Petitioner's plea of guilty to the charge
of grand larceny second
degree, in accordance with count two of the indictment. I.G. Ex. 2/3. Therefore,
Petitioner was convicted
for grand larceny in the second degree, not in the third degree.
4. Section 1128(i) defines a conviction of a criminal offense to include the
circumstance where a
judgment of conviction has been entered against a party by a court. A judgment
of conviction was entered
against Petitioner. I.G. Exs. 2, 3.