Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Syed Hussaini,
Petitioner,
- v. -
The Inspector General.
DATE: May 5, 1992
Docket No. C-317
DECISION
By letter dated October 22, 1990, the Inspector General (I.G.) notified Petitioner
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 his conviction of a criminal offense
related to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct.
Petitioner was further
advised that his exclusion was authorized by section 1128(b)(1) of the Social
Security Act (Act).
By letter dated October 26, 1990, Petitioner requested a hearing. This case
was originally assigned to
Administrative Law Judge (ALJ) Charles E. Stratton for hearing and decision.
At Petitioner's request,
Judge Stratton initially stayed this case pending a decision from the United
States Court of Appeals for the
Second Circuit (Second Circuit) on Petitioner's appeal of his criminal conviction.
Following the Second
Circuit's affirmance of Petitioner's conviction, Petitioner requested that the
action in this case proceed. O
April 17, 1991, this case was reassigned to me for hearing and decision.
I held a prehearing conference on April 29, 1991, at which time I set a hearing
date of August 22, 1991, in
New York, New York. The I.G. presented his case on that date. Petitioner presented
his case on October
30, 1991. 2/ Both parties submitted post-hearing briefs and replies, and responded
to the question as to
what, if any, effect new regulations promulgated on January 29, 1992 (57 Fed.
Reg. 3298) might have on
this case.
I have carefully considered the evidence introduced by both parties at the
hearing, as well as the applicable
law. I conclude that the five year exclusion originally imposed and directed
against Petitioner is excessive,
as is the I.G.'s determination under the new regulations to exclude Petitioner
for three years. I.G. Reg. Br.
at 1. 3
I conclude further that the remedial and deterrent purposes of section 1128
of the Act will be served in this
case by a two year exclusion, and I modify the exclusion accordingly.
ISSUES
The issues in this case are whether:
1) Petitioner was convicted of a criminal offense
within the meaning of section 1128(b)(1) of the act;
and
2) whether the length of the exclusion directed and
imposed against Petitioner by the I.G. isreasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner graduated from the University of Karachi, School of Pharmacy,
in Pakistan. Petitioner has
not yet passed the pharmacy licensing examination in New York, but has recently
passed the first part of
the examination which entitles him to work as an intern in a pharmacy. P. Br.
2; Tr. 2 at 23; P. Ex. 1/A.
2. On June 18, 1990, Petitioner was convicted of one count of Conspiracy to
Commit Medicaid Fraud (18
U.S.C. 371). I.G. Ex. 2.
3. Pursuant to this conviction, Petitioner was sentenced to four months of
home detention, two years of
probation, and was ordered to pay a $250 fine and a special assessment of $50.
I.G. Ex. 2.
4. Petitioner's conviction was based on a Grand Jury indictment which charged
that Petitioner and a co-
defendant, Curtis Evans (Evans) 4/, had violated 18 U.S.C. 641, 42 U.S.C. 1320a-7(b)(1)
and (2), and 18
U.S.C. 371. I.G. Ex. 1.
5. Petitioner and Mr. Evans were partners in a business leasing office space to physicians. Tr. 2 at 82 - 88.
6. Mr. Evans introduced Petitioner to Michael Tartack, a pharmacist. Mr. Tartack
was a Federal Bureau of
Investigation informant who taped his conversations with Petitioner. Tr. 1 at
60; Tr. 2 at 89 - 90, 97; I.G.
Ex. 9/2.
7. Petitioner and Mr. Evans agreed to supply Mr. Tartack with prescriptions.
Petitioner got 11
prescriptions for nebulizers from his brother-in-law, who received the prescriptions
from someone named
Tony. Tony worked in a medical lab and collected these prescriptions from patients.
Tr. 2 at 90 - 96, 99;
I.G. Br., Appendices A - C.
8. Petitioner states that he thought that the prescriptions, which he obtained
from his brother-in-law, were
legal and valid. Tr. 2 at 94, 112, 114 - 118.
9. Notwithstanding Petitioner's belief at the time, Petitioner has since stipulated
that these prescriptions
were false. I. G. Br., Appendices A - C.
10. The Second Circuit found that Petitioner had conceded that the prescriptions
sold to the government
informant at the pharmacy were false. I.G. Ex. 9/2.
11. Mr. Tartack was to pay Petitioner and Mr. Evans $100 for every prescription
provided to him. Tr. 2 at
105.
12. Mr. Tartack gave Petitioner $1,000 for the 11 prescriptions. Tr. 2 at 108 - 109.
13. Petitioner only received $250 of the $1,000; the rest went to Mr. Evans
and/or to Petitioner's brother-
in-law and Tony. I.G. Ex. 1; Tr. 2 at 98 - 109.
14. The Second Circuit, in affirming Petitioner's conviction, held that there
was sufficient evidence in
Petitioner's case to convict Petitioner of either: 1) stealing government property
(where the government
informant to whom Petitioner gave the prescriptions could have submitted fraudulent
prescriptions to
Medicaid for reimbursement); or 2) receiving a kickback after the prescriptions
were filled. Although the
decision as to whether or not to fill the prescriptions was up to the pharmacist,
the Second Circuit held that
the evidence showed Petitioner intended either result. I.G. Ex. 9/2.
15. The Secretary of the United States Department 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 Act. 48 Fed. Reg. 21662 (May 13, 1983).
16. The I.G. may exclude individuals convicted of a criminal offense relating
to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct,
within the meaning of
section 1128(b)(1) of the Act.
17. The permissive exclusion provisions of section 1128 of the Act, which include
section 1128(b)(1), do
not establish minimum or maximum periods of exclusion. Act, sections 1128(b)(1)-(14).
18. The Secretary did not make the regulations promulgated on January 29, 1992
concerning permissive
exclusions under section 1128(b) of the Act, 42 C.F.R. 1001 Subpart C, apply
retroactively to I.G.
permissive exclusion determinations in cases in which ALJ hearings or decisions
were pending at the time
the regulations were promulgated.
19. The remedial purpose of section 1128 of the Act is to protect the integrity
of federally-funded health
care programs and the welfare of beneficiaries and recipients of such programs
from individuals and
entities who have been shown to be untrustworthy.
20. An ancillary remedial objective of section 1128 of the Act is to deter
individuals from engaging in
conduct which jeopardizes the integrity of federally-funded health care programs.
21. Petitioner's conviction is a criminal offense related to fraud, theft,
embezzlement, breach of fiduciary
responsibility, or other financial misconduct, within the meaning of section
1128(b)(1) of the Act. FFCL 1
- 7.
22. The I.G. properly excluded Petitioner from participation in the Medicare
and Medicaid programs.
FFCL 16, 17, 22.
23. In determining the reasonableness of the length of Petitioner's exclusion,
I am guided by the
regulations as set forth in 42 C.F.R. 1001.125(b). In making my decision, I
take into consideration: 1)
the number and nature of the program violations and other related offenses;
2) the nature and extent of any
adverse impact the violations have had on beneficiaries; 3) the amount of damages
incurred by the
Medicare, Medicaid, and the social services programs; 4) whether there are any
mitigating circumstances;
5) the length of the sentence imposed by the court; 6) any other factors bearing
on the nature and
seriousness of the program violations; and 7) the previous sanction record of
the suspended party under the
Medicare or Medicaid program.
24. Petitioner was convicted of a serious criminal offense. FFCL 2.
25. Petitioner was confined to his home for a brief period (although during
this time he was allowed to go
to work) and received a lengthy period of probation. FFCL 3; I.G. Ex. 2.
26. Petitioner's criminal conduct was of a short duration, consisting of one
illegal transaction which took
place over a brief period of time. Tr. 1 at 71 - 74.
27. Petitioner has no record of criminal offenses, including previous Medicare
or Medicaid sanctions,
other than the charge for which he was convicted.
28. No damages to program recipients or beneficiaries occurred as a result
of Petitioner's conduct. Tr. 1 at
70 - 71.
29. Petitioner was not the principal in this scheme. Petitioner appears to
be a naive individual who entered
into the conspiracy at the direction of, and in reliance on, Curtis Evans. Tr.
2 at 88 - 109, 116, 119 - 120.
30. Petitioner is unlikely to re-offend, given his religious beliefs, strong
family background, and the
testimony of those who know him that he is a man of high moral character who
would never again commit
a criminal act. Tr. 2 at 25 - 28, 40, 48 - 51, 60 - 61, 71 - 72, 122; P. Ex.
1.
31. Either the five year exclusion originally imposed and directed against
Petitioner, or the three year
exclusion suggested by the I.G. following promulgation of the new regulations,
is excessive. A two year
exclusion is reasonable and appropriate in light of factors demonstrating Petitioner's
low risk of repeating
conduct which might threaten program recipients and beneficiaries.
RATIONALE
1. Petitioner was convicted of a criminal offense within the meaning of section 1128(b)(1) of the Act.
Petitioner does not dispute the fact that he was convicted. P. Br. 6. Moreover,
under section 1128(b)(1),
the I.G. does not have to establish a direct link between a conviction and the
adverse impact on a federal
program or beneficiary in order to establish his authority to exclude. The I.G.
has only to show that
Petitioner has been convicted of a criminal offense falling within the language
of section 1128(b)(1) of the
Act. See Robert Matesic, R.Ph., d/b/a Northway Pharmacy, DAB 1327 at 8 (1992).
Section 1128(b)(1) authorizes the I.G. to exclude individuals who have been
convicted of a criminal
offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility,
or other financial
misconduct in connection with the delivery of a health care item or service.
The determination as to
whether Petitioner's conviction fits within the language of section 1128(b)(1)
requires an examination of:
1) the criminal offense for which Petitioner was convicted; and 2) the actions
which formed the basis for
that offense.
In this case, Petitioner was convicted of conspiracy to commit Medicaid fraud.
Petitioner's specific
criminal actions included receiving false prescriptions (a health care item)
and conspiring to furnish these
false prescriptions to another individual, who paid Petitioner for the prescriptions
in order to then submit
those false prescriptions for payment by Medicaid. As a result of this, according
to the Second Circuit,
Petitioner committed a criminal act which would lead to his enrichment, independently
of whether the
prescriptions were ever filled. He either was to receive an illegal kickback
for filled prescriptions or an
illegal payment for prescriptions not filled. Clearly, Petitioner's conviction
falls within the language of
section 1128(b)(1) and gives the I.G. the authority to exclude Petitioner. Finally,
Petitioner offers no
arguments in his post-hearing brief to contest a finding that the I.G. has authority
to exclude him. The
essence of his brief relates solely to the reasonableness of the length of the
exclusion. See, P. Br. 1 - 7.
2. Reasonableness of the length of Petitioner's exclusion.
Petitioner contends that either the original five year exclusion imposed by
the I.G., or the I.G.'s apparent
modification of the exclusion to comport with the three year exclusion contemplated
by the new
regulations, is too long. Instead, Petitioner contends, the evidence in this
case shows him to be a
trustworthy and rehabilitated individual for whom exclusion serves no justifiable
purpose. P. Br. 6; P. Reg.
Br. 1.
a. Applicability of new regulations to this case
Effective January 29, 1992, the Secretary promulgated new regulations (Parts
1001 - 1007) pertaining to
his authority under the Medicare and Medicaid Patient and Program Protection
Act (MMPPPA), Public
Law 100-93, to exclude individuals and entities from reimbursement for services
rendered in connection
with the Medicare and Medicaid programs. 5/ These regulations also included
amendments to the civil
money penalty authority of the Secretary under MMPPPA. For purposes of this
proceeding, the specific
regulatory provisions relating to permissive exclusions under section 1128(b)(1)
of the Act (Section
1001.201) and appeals of such exclusions (Part 1005) must be considered in terms
of their
applicability to this case.
The I.G. asserts that the length of Petitioner's exclusion has been altered
by the new regulations, inasmuch
as the benchmark for exclusions absent aggravating or mitigating circumstances
has been changed from
five years under the proposed regulations (55 Fed. Reg. 12,205 (1990) to three
years under the new
regulations, although the basis for consideration of aggravating and mitigating
circumstances has not been
changed (57 Fed. Reg. 3304). I.G. Reg. Br. 1 - 2. The I.G. argues that the new
regulations govern this
case, and are binding on me in determining the reasonableness of the exclusion
imposed against Petitioner
and apply even though the hearing was held prior to the effective date of the
regulations. The I.G. further
cites section 1005.4(c)(5) to demonstrate that I have no authority to review
either the I.G.'s exercise of
discretion to exclude or the scope or effect of such exclusion. The logical
conclusion of the I.G.'s
argument is that once I rule that the I.G. has authority to exclude Petitioner
under section 1128(b)(1) and
the I.G. adopts as his exclusion the minimum set forth in the new regulations,
there is nothing left for me to
hear or decide, as I have no authority to review or alter the period of exclusion
imposed by the I.G.
While attempting to take advantage of the new regulations to reduce his exclusion
to three years, Petitioner
argues that other mitigating factors than those set forth in the new regulations
can be considered in
determining the reasonableness of the length of the exclusion. Petitioner cannot
have it both ways. Either
the new regulations apply, with a minimum of three years, using the specified
mitigating factors or the
regulations do not apply and the usual factors of trustworthiness and remedial
purposes of the Act must be
used in considering the appropriate length of the exclusion.
If it were not for the new regulations, the I.G. might not have reduced Petitioner's
exclusion to three years.
However, if I find that the new regulations do apply in this case, I would not
be free to consider the
evidence of trustworthiness adduced at the hearing, since I would be compelled
to find that the I.G.'s three
year exclusion of Petitioner is reasonable.
To apply the new regulations to this case when the effective date of the regulations
occurred after 1) the
I.G.'s decision to exclude Petitioner and 2) a full hearing on the reasonableness
of that exclusion had been
held, would result in the improper retroactive application of the new regulations
and result in the
substantial deprivation of Petitioner's hearing rights under section 205(b)(1)
of the Act. I have previously
addressed this issue in depth in my decision in Charles J. Barranco, M.D., DAB
CR187 at 16 - 27 (1992).
For purposes of this case, I incorporate the rationale in Barranco that Petitioner's
hearing rights would be
substantially adversely affected and it would be manifestly unjust to apply
the new regulations. 6/
Moreover, the Court of Appeals for the Fourth Circuit held in Varandani v. Bowen,
824 F.2d 307, 312 -
313 (4th Cir. 1987), that regulations implementing section 1156 of the Act would
not apply retroactively
even where the new regulations arguably placed the excluded party in a better
position to defend against
the I.G.'s exclusion. As here, the new Peer Review Organization (PRO) regulations
specified a specific
effective date and were silent on the issue of retroactivity. In such circumstances,
the court applied the
"usual rule that laws are not retroactive unless they expressly so provide".
Id at 312.
The applicable DAB precedent in section 1128(b)(1) cases is similar to those
cited for section 1128(b)(4)
proceedings. The essence of my position is that there is no legislative history
or DAB precedent in section
1128(b) permissive exclusion cases to support the application of minimum specified
periods of exclusion.
While the new regulations arguably reflect the Secretary's intent to have such
minimum exclusions apply in
permissive cases, the preamble and comments to the new regulations, as well
as the regulations themselves,
when considered in relation to such legislative history and applicable DAB precedent,
strongly suggest that
the Secretary intended that Subpart C, pertaining to permissive exclusions,
only applies to the I.G.'s
decision to exclude, and did not intend to abrogate any of the hearing rights
afforded petitioners under
section 205(b)(1) of the Act. Barranco, DAB CR187 at 24 - 27. 7/ Until I receive
a different interpretation
of the application of these regulations, I shall continue to interpret the new
regulations consistent with my
obligation under the Act to consider a myriad of facts needed to determine,
as in this case, the length of
time necessary to establish that Petitioner is not likely to repeat the type
of conduct which precipitated his
exclusion. Matesic, DAB 1327 at 12. 8/
b. A two year exclusion is reasonable.
In deciding whether an exclusion under section 1128(b)(1) is reasonable, I
must review the evidence with
regard to the purpose of section 1128 of the Act. Davids, DAB CR137; Roderick
L. Jones, DAB CR98
(1990); Frank J. Haney, DAB CR81 (1990).
Congress enacted the exclusion law to protect the integrity of federally funded
health care programs.
Among other things, the law was designed to protect program beneficiaries and
recipients from individuals
who have demonstrated by their behavior that they threaten the integrity of
federally funded health care
programs or that they could not be entrusted with the well-being and safety
of beneficiaries and recipients.
S. Rep. No. 109, 100th Cong., 1st Sess., reprinted in 1987 U.S. Code Cong. and
Admin. News 682.
An exclusion imposed and directed pursuant to section 1128 of the Act advances
this remedial purpose.
The principal purpose is to protect programs and their beneficiaries and recipients
from untrustworthy
providers until the providers demonstrate that they can be trusted to deal with
program funds and to
properly serve beneficiaries and recipients. As an ancillary benefit, the exclusion
deters other providers of
items or services from engaging in conduct which threatens the integrity of
programs or the well-being and
safety of beneficiaries and recipients. H. R. Rep. No. 393, Part II, 95th Cong.
1st Sess., reprinted in 1977
U.S. Code Cong. & Admin. News 3072.
Deterrence cannot be a primary purpose of imposing an exclusion. Where deterrence
becomes the primary
purpose, section 1128 no longer accomplishes a civil remedial purpose, but punishment
becomes the end
result. Such a result has been determined by the Supreme Court to contravene
the Constitution and is
beyond the purpose of a civil remedy statute. United States v. Halper, 490 U.S.
448 (1989).
An exclusion imposed and directed pursuant to section 1128 will likely have
an adverse financial impact
on the person against whom the exclusion is imposed. However, the law places
program integrity and the
well-being of beneficiaries and recipients ahead of the pecuniary interests
of providers. An exclusion is not
punitive if it reasonably serves the law's remedial objectives, even if the
exclusion has a severe adverse
financial impact on the person against whom it is imposed.
No statutory minimum mandatory exclusion period exists in cases where the I.G.'s
authority arises from
section 1128(b)(1). By not mandating that exclusions from participation in the
programs be permanent,
however, Congress has allowed the I.G. the opportunity to give individuals a
"second chance." An
excluded individual or entity has the opportunity to demonstrate that he or
she can and should be trusted to
participate in the Medicare and Medicaid programs as a provider. Achalla, DAB
1231.
This hearing is, by reason of section 205(b)(1) of the Act, de novo. Evidence
which is relevant to the
reasonableness of an exclusion is admissible, whether or not that evidence was
available to the I.G. at the
time the I.G. made his exclusion determination. I do not, however, substitute
my judgment for that of the
I.G. An exclusion determination will be held to be reasonable where, given the
evidence in the case, it is
shown to fairly comport with legislative intent. "The word 'reasonable'
conveys the meaning that . . . [the
I.G.] is required at the hearing only to show that the length of the [exclusion]
determined . . . was not
extreme or excessive." (Emphasis added.) 48 Fed. Reg. 3744 (1983).
Determining the reasonableness of an exclusion is based in large part on the
trustworthiness of a petitioner
to provide health care to program recipients and beneficiaries in the future.
The assessment of
trustworthiness in the context of a hearing under section 205(b)(1) of the Act
frequently requires
consideration of the degree of a petitioner's culpability for the acts and practices
arising from criminal
offenses or other conduct upon which the I.G. derives his authority to exclude.
Such assessment is not
relevant to whether the I.G. had authority to exclude in the first place, but
only to whether the length of the
exclusion mandated and directed by the I.G. is reasonable. Thus, here I considered
evidence regarding
Petitioner's conviction and the circumstances surrounding it, as well as evidence
with regard to Petitioner's
character and the likelihood that he would repeat his criminal conduct.
The determination of when an individual should be trusted and allowed to reapply
to the I.G. for
reinstatement as a provider in the Medicare and Medicaid programs is a difficult
issue. It involves
consideration of multiple factual circumstances. The appellate panel in Matesic
provided a listing of some
of these factors, which include:
the nature of the offenses committed by the provider, the circumstances surrounding
the offense,
whether and when the provider sought help to correct the behavior which led
to the offense, how far the
provider has come toward rehabilitation, and any other factors relating to the
provider's character and
trustworthiness.
Matesic, DAB 1327 at 12.
It is evident that in using these factors I must attempt to balance the seriousness
and program impact of the
offense with existing factors which may demonstrate trustworthiness. In assessing
the reasonableness of
the I.G.'s permissive exclusion, it is incumbent upon the ALJ to consider all
these matters as well as the
remedial purposes of the Act.
The I.G. argues that Petitioner's criminal conviction amply demonstrates his
untrustworthiness and supports
the exclusion directed and imposed against him. Essentially, the I.G. asserts
that Petitioner, who had
trained to become a pharmacist in Pakistan, and had been working in pharmacies
while attempting to
become a registered pharmacist in New York, fully understood the nature and
severity of his offense.
Thus, the I.G. argues that Petitioner's claims of innocence are dubious. The
I.G. argues also that Petitioner
has not completed his probation and that his crime was so serious that he was
incarcerated at home for four
months. The I.G. also asserts that Petitioner has presented no evidence of rehabilitation
in the form of
counseling or other assistance, and that the character evidence in this case
is that which can be expected
from one's immediate family and friends. Further, the I.G. asserts that Petitioner's
contradictory statements
concerning the source of the prescriptions and how he was to be paid for the
prescriptions and his refusal at
the hearing to admit that the prescriptions were false establishes his lack
of credibility and
untrustworthiness. I.G. Br. 10 - 12.
Petitioner responds that he is a hard-working man with a large family to support.
He came to the United
States from Pakistan and has had difficulty in learning English and in passing
the exams necessary to
become a licensed pharmacist in New York. Petitioner asserts that those who
know him have testified that
he is a religious man of high moral character, has never been in trouble with
the law other than in this one
instance, and will never be in such trouble again. Petitioner further asserts
in mitigation of his exclusion
that the dollar amount of his crime was low, he was not incarcerated, his home
detention allowed him to
go to work and to prayer services, no damage was done to the Medicare and Medicaid
programs, and,
finally, the length of time over which his criminal activity occurred was short.
P. Br. at 1 - 6.
In this case, I find that while it is true that Petitioner committed a serious
crime, there exist circumstances
which mitigate against a lengthy exclusion. Petitioner now appears to have recognized
the gravity of his
criminal conduct and appears to be deeply ashamed that he contravened the law.
Petitioner and his
witnesses point to his previous lawful conduct, strong family background, and
religious beliefs to buttress a
conclusion that he will not break the law again. Further, The I.G. put in no
evidence to dispute the
character evidence introduced by numerous witnesses with regard to Petitioner's
honesty, good character,
religious belief, and the unlikelihood that Petitioner would ever again commit
a criminal act.
There is also undisputed testimony in this case that Mr. Evans, not Petitioner,
was the instigator of the
criminal conduct. There is testimony that Petitioner is a naive individual.
Tr. 2 at 72. Petitioner's
uncontradicted testimony is that he was misled by Mr. Evans. Petitioner may
have legitimately believed
that the transaction constituting the criminal conduct upon which his conviction
was based was lawful.
In this case, as in the cases of Joyce Faye Hughey, DAB CR94 (1990), aff'd
DAB 1221 (1991) and Frank J.
Haney, DAB CR81 (1990), I find that Petitioner's conviction alone is not sufficient
evidence of Petitioner's
lack of trustworthiness to support a five or a three year exclusion. In Hughey,
the petitioner pled guilty to a
misdemeanor charge of theft and was sentenced to twelve months' probation and
a payment of $350. The
I.G. excluded the petitioner for five years. The ALJ reduced this exclusion
to one year, finding that the
amount of money misappropriated did not constitute a large sum, her conduct
was in some respects a
consequence of emotional duress and at variance with her record for honesty,
her sentence did not include
incarceration, and that it was unlikely that she would in the future repeat
her criminal conduct. In Haney,
the ALJ reduced an exclusion period from five years to three, despite petitioner's
conviction for two
felonies in a tax fraud scheme spreading over several years, for which he received
a lengthy probation.
The ALJ considered factors, including character evidence, the petitioner's mother's
illness and death, and
his otherwise good record, in significantly reducing his period of exclusion.
In this case, like that of Ms. Hughey, the amount of money involved did not
constitute a large sum,
Petitioner's conduct was at variance with his record for honesty, his sentence
did not include incarceration
9/ and it is unlikely that he will repeat his criminal conduct. Like Ms. Hughey,
whose sister instigated the
criminal conduct, Petitioner was not the instigator of the criminal conduct
in this case. However, Petitioner
did receive a lengthier probation than Ms. Hughey. 10/ Petitioner also received
four months of home
detention. Also, Petitioner's answers to questions with regard to his receipt
of the prescriptions and the
disbursal of payment for them are equivocal. 11/ This may be due in part to
his difficulties with the
English language and the use of a translator at the hearing, and to his apparent
emotional distress at
testifying in front of his family members. Overall, I have found Petitioner's
testimony to be generally
consistent. Petitioner does not appear to have been under emotional distress,
as was Ms. Hughey at the
time she entered into the unlawful conduct underlying her conviction. However,
Petitioner's criminal
conduct consisted only of one criminal trans-action and was not part of a well
thought out scheme which
lasted over several years, as was Mr. Haney's. Thus, I find that two years is
an appropriate period of
exclusion in this case, taking into account the serious nature of Petitioner's
offense, coupled with my belief
that it is unlikely that this Petitioner will re-offend. A two year exclusion
provides a sufficient period of
time for Petitioner to demonstrate that he is trustworthy enough to participate
in the Medicare and
Medicaid programs.
CONCLUSION
Based on the material facts and the law, I conclude that the I.G.'s determination
to exclude Petitioner from
participation in the Medicare and Medicaid programs for either of three or five
years is excessive. I further
conclude that a two year period of exclusion is reasonable and appropriate in
this case.
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-assisted programs, including State plans approved under Title
XIX (Medicaid) of the
Act. I use the term "Medicaid" hereafter to represent all State health
care programs from which Petitioner
was excluded.
2. It was agreed at the hearing on August 22, 1991, that the hearing would
be bifurcated and Petitioner
would present his case at a later date. Tr. 1 at 19.
3. The parties' exhibits, briefs and the transcript of the hearing will be cited as follows:
I.G.'s Exhibits I.G. Ex. (number/page)
I.G.'s Brief I.G. Br. at (page)
I.G. Reply Brief I.G. R. Br. at (page)
I.B. Brief on I.G. Reg. Br. at (page)
New Regulations
Petitioner's Exhibits P. Ex. (number/page)
Petitioner's Brief P. Br. at (page)
Petitioner's Reply P. R. Br. at (page)
Brief
Petitioner's Brief on P. Reg. Br. at (page)
New Regulations
Transcript of August Tr. 1 at (page)
22, 1991 Hearing
Transcript of October Tr. 2 at (page)
30, 1991 Hearing
Findings of Fact and FFCL
Conclusions of Law
4. Mr. Evans was acquitted of the charges against him. Tr. 1 at 53; I.G. Ex. 9/2.
5. These regulations can be found at 42 C.F.R. 1001 et seq., 57 Fed. Reg. 3298 et seq.
6. It is my understanding that neither the Petitioner nor the I.G. have filed
exceptions to my decision in
Barranco during the appeal period.
7. My position in Barranco has been reaffirmed by ALJ Steven T. Kessel in his
recent decision in Stephen
J. Willig, M.D., DAB CR192 (1992). He provides additional rationale for concluding
that Subpart C of the
new regulations was not intended to limit the hearing rights afforded by section
205(b)(1) of the Act. He
also held that the new regulations could not be applied retroactively to cases
pending prior to the effective
date of such regulations.
8. The appellate panel's decision in Matesic was issued after the effective
date of the new regulations.
While there is no reference in the decision to the new regulations, it appears
that this panel does not believe
that the regulations alter the basic responsibility of the ALJ to consider the
reasonableness of permissive
exclusions in section 1128(b) cases. The panel affirmed the ALJ's three year
exclusion for reasons other
than the new regulations.
9. As I previously noted, Petitioner's in-home detention provided that he could
continue his employment.
This type of penalty is obviously less severe than incarceration in jail or
even a work release program out
of a halfway house.
10. Petitioner's probation apparently was without restrictions.
11. At the conclusion of the evidentiary hearing, I was concerned that the
I.G. had provided a very limited
picture of Petitioner's involvement in this criminal scheme. In fact, it was
through the testimony of
Petitioner that the specifics of the criminal scheme become clear. As his only
witness, the I.G. called the
special agent who assisted in the development of the case against Petitioner
and Mr. Evans, but the agent
was able to provide very limited additional information beyond that reflected
in the criminal conviction
documents. Noting the equivocal nature of Petitioner's testimony and the effort
by Petitioner to place the
blame for the criminal scheme on Mr. Evans, I suggested to the I.G. that he
supplement the record with the
transcript from the criminal proceeding so that I could read the testimony that
led the jury to convict
Petitioner but acquit Mr. Evans. I wanted to compare the explanation provided
by Petitioner at the hearing
in this case with his testimony in the criminal proceeding. Such a comparison
might have revealed
contradictions and inconsistencies. The I.G. did not supplement the record with
the transcript.