DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Thomas C. Chestney, D.M.D.,
Petitioner
- v. -
The Inspector General.
DATE: March 20, 1989
Docket No. C-53
DECISION AND ORDER
The Petitioner waived his right to a formal evidentiary hearing in this five
year federal exclusion case, and
the parties jointly requested that I issue a decision and order based on the
uncontested facts.
APPLICABLE STATUTES AND REGULATIONS
I. Federal Statutes
This case is governed by section 1128 of the Social Security Act (Act); section
1128 is codified at 42
U.S.C. 1320a-7 (West U.S.C.A., 1988 Supp.). Section 1128(a)(1) of the Act provides
for the exclusion
from Medicare and Medicaid of those "convicted of a criminal offense related
to the delivery of an item or
service" under the Medicare or "any State health care" (Medicaid)
programs. Section 1128(c)(3)(B)
provides for a five year minimum period of exclusion for those, like the Petitioner,
excluded under section
1128(a)(1). The Inspector General (I.G.) is required to exclude such individuals
from participation in
Medicare, and to direct each State to exclude such individuals from participation
in Medicaid for a period
which is at least the "same as" the period of the Medicare exclusion.
42 U.S.C. 1320a-7(d)(1), (d)(2),
(d)(3). See also, 42 U.S.C. section 1396(a)(39). Section 1128(d)(3)(B)(ii) of
the Act allows a State to
independently exclude a convicted individual from Medicaid for a period which
is "longer" than the
federally directed period of exclusion.
II. Federal Regulations
The governing federal regulations (Regulations) are codified in 42 C.F.R. Parts
498, 1001, and 1002
(1987). Part 498 governs the procedural aspects of this exclusion case; Parts
1001 and 1002 govern the
substantive aspects.
Sections 1001.123, and 1001.124, at 42 C.F.R., consistent with section 1128(d)(2)
of the Act, provide that
the I.G. must direct a State to exclude such individual from the Medicaid program
for at least the "same
period" that the I.G. has excluded the individual from the Medicare program.
Section 1001.123 requires
the I.G. to issue a notice to an excluded individual whenever the I.G. has "conclusive
information" that
such individual has been convicted of a crime related to the delivery of Medicare
or Medicaid items or
services; such exclusion must begin "15 days from the date on the notice."
A State must follow the I.G.'s
direction to exclude convicted individuals from Medicaid for at least the "same
period" as the federal
Medicare exclusion. Sections 1002.211(a) and 1002.211(b), consistent with section
1128(d)(3) of the Act,
provide that a State may also impose separate Medicaid exclusions under State
law.
Sections 1001.125 and 1001.130 provide that the individual shall remain excluded
from the Medicare and
Medicaid programs until reinstated by the I.G. Section 1002.230(a) provides
that a State may not reinstate
until the I.G. notifies the State that the individual may be reinstated.
III. State Statutes
Pennsylvania law, similar to section 1128 of the Act, provides for a separate
five year termination from
Medicaid of any person convicted of a program-related crime. 62 P.S. 1407(b)(3).
The State termination,
however, begins as of the date of conviction, rather than 15 days after the
notice is received.
PROCEDURAL AND FACTUAL BACKGROUND
On March 30, 1988, the State of Pennsylvania notified the Petitioner that,
pursuant to State law, it had
terminated his participation in the Medicaid program for a period of five years
beginning January 19, 1988
and ending on January 19, 1993.
By letter dated July 25, 1988 (Notice), the I.G. notified the Petitioner, that
pursuant to federal law, the
Petitioner was being excluded from Medicare for a period of five years, commencing
20 days from the date
of the Notice. The Notice also stated that the I.G. had directed the State of
Pennsylvania to exclude the
Petitioner from Medicaid for at least the "same period"; the basis
for these exclusions was the Petitioner's
criminal conviction.
Pursuant to the I.G.'s directive, Pennsylvania notified the Petitioner on August
16, 1988 that he was
excluded from Medicaid for the period August 13, 1988 to August 13, 1993.
By letter dated September 21, 1988 (Request), the Petitioner requested a hearing
before a federal
Administrative Law Judge (ALJ) and this case was docketed. I conducted a telephone
prehearing
conference with counsel for the parties on October 25, 1988. On October 27,
1988, I issued a Prehearing
Order and Notice of Hearing, noting that the parties had agreed that the only
dispute was legal and not
factual. Thereafter, the parties submitted briefs in support of their respective
motions for summary
disposition.
The Petitioner admitted that he was convicted of a criminal offense related
to the delivery of Medicaid
services and does not contest that the I.G. is required by federal law to exclude
him from both the Medicare
and Medicaid programs for a five year minimum period. Also, the Petitioner does
not contest the timing of
or the period of his Medicare exclusion. P.Br/3. Instead, the Petitioner argues
that since the State of
Pennsylvania had already terminated him from Medicaid for five years, beginning
seven months prior to
his federally directed Medicaid exclusion, the federally directed Medicaid exclusion
should last only four
years and five months, rather than five years. He argues, in effect, that the
I.G. added seven months to his
five year Medicaid exclusion by simply delaying the sending of the Notice for
seven months, a result that is
contrary to the Act and Congressional intent.
ISSUE
The issue in this case is whether the timing or length of the federally directed
Medicaid exclusion imposed
upon the Petitioner by the I.G. is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and the submissions of the
parties, and being advised
fully herein, I make the following Findings of Fact and Conclusions of Law:
1. The Petitioner, a provider of dental services, admits that he was "convicted
of a criminal offense" on
January 19, 1988 and that the criminal offense to which he pled guilty is "related
to the delivery of an item
or service" under Medicaid within the meaning of section 1128 of the Act.
P.Br./1,2,7; P.Ex./A.
2. Pursuant to Pennsylvania law, an individual who is convicted of "Provider
Prohibited Acts" must be
terminated from participation in Medicaid for a five year period, to begin on
the date of conviction. P.
Br./7; I.G. Br./3; 62 Pa. Stat. Ann. Section 1407(b)(3); See P. Ex./A.
3. Pennsylvania properly terminated the Petitioner from the Medicaid program
for the five year period
from January 19, 1988 through January 19, 1993. P. Br./2; I.G. Br./7; P. Ex./B.
4. In accordance with section 1128 of the Act and the Regulations, the I.G.
did properly exclude the
Petitioner from Medicare for a five year period, from August 14, 1988 through
August 13, 1993. P.Ex./C.
5. As required by sections 1128(d)(2) and (d)(3)(A) of the Act, the I.G. properly
notified Pennsylvania of
the Petitioner's exclusion from participation in Medicare and properly directed
Pennsylvania to exclude the
Petitioner from Medicaid for at least the "same period" of time as
the federal exclusion from Medicare.
6. Pursuant to federal direction from the I.G., Pennsylvania properly excluded
the Petitioner from
Medicaid for the same five year period as the federal exclusion from Medicare,
from August 14, 1988
through August 13, 1993.
7. Both the length and the timing of the five year period of exclusion from
Medicare, imposed by the I.G.,
and the five year period of exclusion from Medicaid, directed by the I.G., are
reasonable within the
meaning of section 1128 of the Act and the Regulations.
8. The State of Pennsylvania's March 30, 1988 Medicaid termination is independent
of both the Medicare
exclusion and the federally directed Medicaid exclusion. I have no authority
to decide any issues with
respect to this State imposed termination.
9. The I.G. acted appropriately and properly under the Act and Regulations
in this case, and the Petitioner
is not entitled to the relief he sought.
DISCUSSION
Section 1128 of the Act clearly requires the I.G. to exclude from Medicare,
for a minimum of five years,
individuals who are convicted of "a criminal offense related to the delivery
of" a Medicare or Medicaid
"item or service." The I.G. has no discretion in reducing the period
of time for such an exclusion. 42
U.S.C. (c)(3)(B). The I.G. must exclude for at least five years and the exclusion
must begin 15 days from
the date on the notice. 42 U.S.C. 1320a - 7(c)(B)(B); 42 C.F.R. 1001.123, 1002.206.
This provision of
federal law also requires the I.G. to direct any State to exclude such individuals
from Medicaid for a
minimum of five years, with the five year period being at least "the same
as any period" of Medicare
exclusion. 42 U.S.C. 1320a-7(a)(1), (c)(3)(B), and (d)(3)(A); 42 C.F.R. 1002.211.
The I.G. has no
authority to reduce the time or alter the Medicaid period of exclusion, nor
does the State, pursuant to the
I.G.'s directive, possess any authority to reduce the time or alter the Medicaid
period of exclusion.
Congressional intent on this matter is clear:
A minimum five-year exclusion is appropriate, given the seriousness of the
offenses at
issue. . . . Moreover, a mandatory five-year exclusion should provide a clear
and strong deterrent against
the commission of criminal acts.
S. Rep. No. 100-109, 100th Cong. 1st Sess. 2; 1987 U.S. Cong. & Ad. News 682, 686.
In this case, the I.G. properly excluded the Petitioner from participation
in Medicare for a five year period,
beginning on August 14, 1988 and ending on August 13, 1993. The exclusion by
the I.G. resulted from the
Petitioner having been "convicted of a criminal offense related to the
delivery of" Medicaid services. The
I.G. then properly directed Pennsylvania to exclude the Petitioner from the
Medicaid program for at least
the "same period" as the Petitioner's Medicare exclusion. The State
of Pennsylvania complied with this
federal direction and properly excluded the Petitioner for a period at least
"the same as" the period of the
Petitioner's Medicare exclusion. 42 U.S.C. 1320a-7(d)(3)(A). In addition, the
Petitioner was separately
terminated from participation in the Medicaid program by the State of Pennsylvania
under its own
authority.
The Petitioner complains that the difference in the timing of the State law
Medicaid termination, which was
seven months prior to the federally directed Medicaid exclusion, effectively
results in a five year and seven
month exclusion from Medicaid. The Petitioner argues that this result is due
to the I.G.'s instruction to the
State of Pennsylvania to exclude the Petitioner from the Medicaid program for
at least the "same period"
the period of his Medicare exclusion. The Petitioner asserts that an exclusion
from Medicaid for a period
in excess of five years is both unintended and unreasonable. He argues that
the federally directed Medicaid
exclusion should run concurrently with the State Medicaid termination (i.e.,
January 19, 1988 through
January 19, 1993) rather than concurrently with the Medicare exclusion (i.e.,
August 14, 1988 through
August 13, 1993). Thus, the issue raised by the Petitioner concerns the reasonableness
of the length or
period of the federally directed Medicaid exclusion.
The Petitioner's loss in being effectively excluded from Medicaid for a period
in excess of five years, is
something for which there is no relief for. The reason for this is that the
Act and Regulations clearly
provide no discretion for reducing a five year minimum period of exclusion or
for altering the effective
dates of that five year period. The I.G. properly complied with the Act and
Regulations in excluding the
Petitioner from August 14, 1988 through August 13, 1993, and Pennsylvania correctly
followed the I.G.'s
directive to exclude the Petitioner from Medicaid for at least the same period.
Furthermore, the timing of
the I.G.'s Notice in this case, some seven months after the Petitioner's conviction,
was reasonable
considering that seven months is a reasonable amount of time for the I.G. (1)
to obtain "conclusive
information" of the Petitioner's program-related conviction in State court,
(2) to make a determination
regarding that program-related conviction, and (3) to issue his notice of said
determination. In summary,
under the circumstances in this case, the I.G. acted reasonably and had no authority
under the Act and
Regulations to reduce the length or alter the period of the federally directed
Medicaid exclusion.
CONCLUSION
I conclude that the Petitioner is not entitled to the relief sought. Accordingly,
I decide this case in favor of
the I.G. Based on the law and the undisputed material facts in the record, I
conclude that the length and the
period of the five year Medicare exclusion imposed upon the Petitioner by the
I.G. was reasonable and that
the period of the federally directed exclusion from the Medicaid program was
correctly imposed to run
concurrently with the Petitioner's exclusion from Medicare.
IT IS SO ORDERED.
__________________________
Charles E. Stratton
Administrative Law Judge