Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Zenaida Macapagal, R.N.
Petitioner,
- v. -
The Inspector General.
DATE: February 24, 1992
Docket No. C-445
DECISION
By letter dated August 9, 1991, Dr. Zenaida Macapagal, the Petitioner herein,
was notified by the Inspector
General (I.G.), U.S. Department of Health & Human Services, that she would
be excluded for a period of
five years from participation in the Medicare program and from participation
in the State Health Care
programs identified in section 1128(h) of the Social Security Act (the Act)
(which are referred to in this
decision as Medicaid). The I.G. stated that the exclusion was mandated by section
1128(a)(1) of the Act,
because of Petitioner's conviction of a criminal offense related to the delivery
of an item or service under
Medicaid or Medicare.
On March 13, 1990, Petitioner was convicted (after entering a guilty plea)
in the U.S. District Court,
Eastern District of New York, of violating 42 U.S.C. 1320a-7b(b)(1)(B) by knowingly
and wilfully
soliciting and receiving cash in exchange for ordering or arranging for the
ordering of items for which
payment may be made under the Medicaid or Medicare programs. The money was received
from an
officer of the company supplying inhalation therapy equipment which Petitioner
had prescribed and which
was reimbursable under Medicaid or Medicare.
Counsel for the I.G. moved for summary disposition of the case. Petitioner's
counsel opposed it. I
conclude that although certain non-outcome-determinative matters of fact --
such as the precise nature of
Petitioner's motivation -- may be controverted, there are no material issues
in dispute, 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)(1988)) 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. Sections 1128(b)(7) and 1128B(b)(1) permit, but
do 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
these latter provisions, he is entitled to a hearing before an administrative
law judge pursuant to section
1128(f)(2) of the Act.
Findings of Fact and Conclusions of Law 1/
1. At all times relevant herein, Petitioner was a duly licensed physician in
New York state and was a
Medicare and Medicaid provider.
2. Petitioner accepted cash gifts from an officer of the company supplying
inhalation therapy equipment
which she had prescribed and which was reimbursable under Medicaid or Medicare.
3. Petitioner was convicted (pursuant to a guilty plea) on March 13, 1990 in
the U.S. District Court,
Eastern District of New York, of accepting an illegal kickback in violation
of 42 U.S.C. 1320a-
7b(b)(1)(B). I.G. Ex. 5.
4. The State of New York excluded Petitioner from its Medicaid program. I.G. Ex. 6.
5. The Secretary of Health and Human Services has delegated the authority to
determine and impose
exclusions pursuant to section 1128 of the Act to the I.G. 48 Fed. Reg. 21662
(May 13, 1983).
6. By letter dated August 9, 1991, Petitioner was notified by the I.G. that
she would be excluded for a
period of five years from participation in the Medicare and Medicaid programs.
7. A criminal conviction for accepting kickbacks for authorizing the purchase
of medical equipment 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).
8. The law proscribes all kickbacks given in exchange for ordering items or
services for which payment
may be made under Medicaid or Medicare -- there is no exception allowing a person
to receive kickbacks
for medically-justifiable transactions.
9. The mere fact of conviction of a relevant offense triggers exclusion; criminal
intent is not required to
bring a conviction within the ambit of section 1128(a)(1).
10. The I.G. is under no obligation to proceed under the discretionary or permissive
exclusion provisions
of section 1128(b)(7) against a person who may be suspected of violating the
anti-kickback law.
11. Once a person has been convicted of a program-related criminal offense,
exclusion for at least five
years is mandatory.
Argument
Petitioner argues that her conviction does not constitute a program related
offense and that, therefore, only
a permissive exclusion (pursuant to section 1128(b)) could be brought against
her. As her brief states,
imposition of mandatory exclusion is not warranted "...since there is no
nexus between the petitioner's
activities and the Medicare program." Petitioner also declares (1) that
the equipment prescribed was
medically necessary, and would have been prescribed irrespective of the remuneration;
(2) that her conduct
was not motivated by Medicare coverage; and (3) that it did not adversely affect
the Medicare program
since the equipment was needed and its purchase was not contingent upon the
kickbacks.
Discussion
First, I note that a guilty plea to a criminal charge satisfies the requirement
that Petitioner have been
convicted within the meaning of the Act. Section 1128(i) of the Act.
As to Petitioner's contention that her conviction is unrelated to the delivery
of an item or service under
Medicaid or Medicare, and thus is not encompassed by the mandatory exclusion
provisions of section
1128(a), this standard is satisfied where there is a common-sense connection
between a criminal offense
and the Medicaid or Medicare programs. Clarence H. Olson, DAB CR46 (1989). A
person may be guilty
of a program related offense even if he or she did not physically deliver items
or services. Jack W. Greene,
DAB 1078 (1989). Other relevant precedent holds that a criminal offense is deemed
to be related to the
delivery of an item or service under Medicaid or Medicare where the delivery
of such Medicaid or
Medicare item or service is an element in the chain of events constituting the
offense. See Larry W. Dabbs
& Gary L. Schwendimann, DAB CR151 (1991), and cases cited therein.
Additionally, the law under which Petitioners were convicted shows by its very
existence that Congress has
determined that kickbacks impede the proper functioning of the Medicaid and
Medicare programs and the
delivery of items and services thereunder. Applying this statutory background
and case precedent to the
case at hand, I conclude that the delivery of items under Medicaid or Medicare
was an essential and
integral part of Petitioner's criminal conduct and her conviction, absent which
she would not have been
offered and taken the monies in question, and that her conviction satisfies
the requirements of section
1128(a) and mandates exclusion.
Based on the above reasoning, I reject Petitioner's argument that there was
no "nexus" between her
criminal conduct and the delivery of items or services under Medicaid/Medicare,
and also find no merit in
her contention that the absence of such a connection required the I.G. to proceed
under the permissive
exclusion provisions of section 1128(b). 2/
Petitioner also maintains that the equipment prescribed was medically necessary,
and "...would have been
prescribed irrespective of the remuneration." However, the law proscribes
all kickbacks given in exchange
for ordering items or services for which payment may be made under Medicaid
or Medicare -- there is no
exception allowing a person to receive kickbacks for medically-justifiable transactions.
Finally, it is argued that Petitioner was motivated by her patients' best interests
when she prescribed the
nebulizers, that she had no particular knowledge that Medicaid/Medicare would
reimburse the costs, and
that she was not influenced by the remuneration she received. To this, it can
only be said that Petitioner
admitted having knowingly and wilfully committed the criminal offense of soliciting
and receiving cash in
exchange for ordering or arranging for the ordering of items for which payment
may be made under the
Medicaid or Medicare programs. She cannot now challenge her criminal conviction
or deny the motivation
that she admitted. And, in any event, it is the mere fact of conviction of a
relevant offense that triggers
exclusion; criminal intent is not required to bring a conviction within the
ambit of section 1128(a)(1).
Dewayne Franzen, DAB 1165 (1990).
Conclusion
The conduct for which Petitioner was convicted mandates five year exclusion
pursuant to section
1128(a)(1) of the Act.
____________________________
Joseph K. Riotto
Administrative Law Judge
1. The record of this case consists of six documentary exhibits submitted by
the I.G. (referred to as "I.G.
Ex. 1," etc.), Petitioner's brief, the I.G.'s brief, and an I.G. rebuttal.
2. To be sure, there is some subject matter overlap between the Act's provision
of mandatory exclusion
for any relevant criminal conviction (section 1128(a)(1)) and its authorization
of permissive exclusion for
fraud, kickbacks, etc. (sections 1128(b)(7) and 1128B(b)(1)). Nevertheless,
case law has established that
the I.G. is not obliged to proceed under section 1128(b), but that once there
has been a conviction for a
program-related offense, section 1128(a)(1) is controlling and exclusion must
be imposed. See, e.g., Leon
Brown, M.D., DAB CR83, aff'd. DAB 1208 (1990). This rationale is also supported
by the Act's
legislative history, which shows that pre-exclusion hearings in (permissive)
kickback cases were intended
to allow accused persons the opportunity to explain their actions where no criminal
conviction had as yet
occurred. In the case at hand, since proceedings were not instituted until after
Petitioner's conviction, it
was appropriate for the I.G. to utilize the mandatory exclusion rule.