Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Boris Lipovsky, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: June 10, 1992
Docket No. C-92-050
DECISION
By letter dated November 4, 1991, Boris Lipovsky, M.D., the Petitioner herein,
was notified by the
Inspector General (I.G.), U.S. Department of Health & Human Services (HHS),
that it had been decided to
exclude him for a period of five years from participation in the Medicare and
Medicaid programs
("Medicaid" here represents those State health care programs mentioned
in section 1128(h) of the Social
Security Act (the Act)). The I.G. explained that the five-year exclusion was
mandatory under sections
1128(a)(1) and 1128(c)(3)(B) of the Act because Petitioner had been convicted
of a criminal offense
related to the delivery of an item or service under Medicaid.
Petitioner filed a timely request for review of the I.G.'s action, and the
I.G. moved for summary
disposition.
Because there are no disputed material issues of fact, I have granted the I.G.'s
motion and have decided the
case on the basis of written submissions in lieu of an in-person hearing.
APPLICABLE LAW
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act 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 particpation in such programs, for a period of at least five
years.
Section 1128(b) permits, but does not mandate, the exclusion of any person
whom the Secretary of HHS
concludes is guilty, or has been convicted, of health care related fraud, kickbacks,
false claims, or similar
activities. It incorporates by reference, as bases for exclusion, the offenses
described in sections 1128A
and 1128B of the Act. Relevant to the Petitioner herein is 1128B(b)(1)(B), which
proscribes the soliciting
or receiving of any remuneration in return for purchasing, ordering, or arranging
for the acquisition of
goods or services for which payment may be made under Medicare or Medicaid.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 1/
1. During the period relevant to this decision, Petitioner was a duly licensed
physician and Medicaid
provider in the State of New York.
2. Petitioner pled guilty in the United States District Court for the Eastern
District of New York to
violating section 1128B(b)(1)(B) of the Act by knowingly and willfully receiving
kickbacks from a
supplier of medical equipment for authorizing the purchase of items paid for
under the Medicaid program.
I.G. Ex. 2, 3.
3. The District Judge found that there was a factual basis for Petitioner's
plea. In a written statement to the
New York Department of Health dated October 2, 1991, Petitioner reaffirmed that
he had been guilty of
receiving remuneration for ordering items paid for by Medicaid. I.G. Ex. 2,3.
4. Petitioner was sentenced to probation for three years
and was fined $5000. I.G. Ex. 2.
5. 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).
6. On November 4, 1991, Petitioner was notified by the I.G. that it had been
decided to exclude him for a
period of five years from participation in the Medicare and Medicaid programs
because of his conviction of
a criminal offense related to the delivery of an item or service under Medicaid.
7. A criminal conviction for knowing acceptance of cash payments designed to
influence purchasing
decisions on medical equipment payable by Medicaid justifies application of
the mandatory exclusion
provisions of section 1128(a)(1).
8. Section 1128(a) addresses only Medicare or Medicaid related crimes and requires
exclusion by HHS
once there has been a relevant conviction. Permissive exclusions under 1128(b)
can be based upon a much
wider spectrum of misconduct (which may or may not involve crimes against the
government), but their
application is discretionary. Section 1128(b) may be applied to convictions
only for offenses other than
those related to the delivery of an item or service under Medicare or Medicaid.
9. The I.G. is under no obligation to proceed under the permissive exclusion
provisions of sections
1128(b)(1) or (7) of the Act against a person who might have committed fraud.
However, once there has
been a conviction of a program-related offense, a five-year exclusion is mandatory
under section 1128(a).
ARGUMENT
Petitioner acknowledges that he was "convicted" within the meaning
of section 1128(i) of the Act.
However, he argues that he pled guilty only to a Medicaid violation, specifically
excluding any reference to
Medicare, and that the conviction ought not to bar him from Medicare participation.
Petitioner`s principal contention is that mandatory exclusion pursuant to section
1128(a)(1) is not
applicable to the conduct for which he was convicted. He believes that any HHS
proceedings relating to
his offense, which he characterizes as fraud and/or financial misconduct, should
be handled in the manner
of permissive exclusions under section 1128(b). Petitioner states that when
one considers mitigating
factors relevant to a permissive exclusion, the gravity of his offense is lessened
by the facts that his patients
benefitted from the medical equipment here at issue, that the State did not
revoke his license, and that his
conduct reflected a lack of appreciation of his responsibilities under Medicaid
rather than any systematic
scheme to make illicit gains.
DISCUSSION
The first statutory requirement for mandatory exclusion pursuant to section
1128(a) is that the the
individual or entity in question be convicted of a criminal offense under federal
or State law. In the present
case, Petitioner admits that he was convicted within the meaning of section
1128(i) of the Act.
I find also that the requirement of section 1128(a)(1) that the criminal offense
leading to the convicition be
related to the delivery of an item or service under Medicare or Medicaid has
been satisfied. Specifically, it
is well-established in Departmental Appeals Board (DAB) appellate precedent
that "financial misconduct
directed at the Medicaid program in the course of service delivery" constitutes
a program-related offense
invoking mandatory exclusion. David D. DeFries, D.C., DAB 1317 (1992). This
holding well describes
the situation in the case at hand, in which Petitioner knowingly accepted unlawful
cash payments designed
to influence his purchasing decisions on medical equipment payable by Medicaid.
Applying mandatory
exclusion under these circumstances also comports with the intent of Congress
that mandatory exclusions
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.C.C.A.N. 3039, 3047, 3072. Finally, I would note that I have previously
held, in a case that was
factually similar to the instant matter and which was sustained by a DAB appellate
panel, that a criminal
conviction for receiving kickbacks in violation of section 1128B(b)(1)(B) of
the Act justifies mandatory
exclusion pursuant to section 1128(a)(1). Niranjana B. Parikh, M.D., et. al,
DAB CR171 (1992), aff'd
DAB 1334 (1992).
Petitioner argues that the I.G. should have treated his conviction as a possible
basis for permissive
exclusion. In this regard, although the literal language of the Act suggests
subject matter overlap between
the mandatory exclusion provisions of section 1128(a) and the permissive exclusion
provisions of section
1128(b), it has long been held that section 1128(a) addresses only Medicare
or Medicaid related crimes and
requires action by HHS. Permissive exclusions, by contrast, can be based upon
a much wider spectrum of
conduct (which may or may not involve crimes against the government) and their
application is
discretionary. This distinction was central to the decision of the appellate
panel in Samuel W. Chang,
M.D., DAB 1198 (1990), which held that "the permissive exclusion provisions
of section 1128(b) apply to
convictions for offenses other than those related to the delivery of an item
or service under either the
Medicare or Medicaid . . . programs." Precedent dealing with the scope
of the Secretary's discretion holds
that HHS is under no obligation to institute a permissive exclusion under section
1128(b), but that 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 conviction requires his exclusion for a period of at least five
years, pursuant to section
1128(a)(1). The statute also clearly provides that the exclusion must encompass
Medicaid and Medicare.
Neither the I.G. nor this judge is authorized to reduce the mandatory minimum
exclusion, even if
mitigating factors are present.
______________________________
Joseph K. Riotto
Administrative Law Judge
1. Petitioner and the I.G. submitted documentary exhibits, briefs and rebuttals.
I admitted all of the
exhibits into evidence and refer to them herein as "P. Ex. (number)"
or "I.G. Ex. (number)."