Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Alida C. Reinoso, M.D., Petitioner,
- v. -
The Inspector General.
DATE: November 16, 1992
Docket No. C-92-119
Decision No. CR243
DECISION
By letter dated April 14, 1992, Alida C. Reinoso, 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 her for a period of five years from participation in the Medicare program
and those State health
care programs mentioned in section 1128(h) of the Social Security Act (Act).
(Unless the context indicates
otherwise, I use the term "Medicaid" in this Decision when referring
to these State programs.) The I.G.
explained that an exclusion of at least five years is 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 I conclude that there are no material and relevant factual
issues in dispute, I have
decided the case on the basis of written submissions in lieu of an in-person
hearing. I conclude that, under
the facts of this case, a five year exclusion is mandatory and I enter summary
disposition in favor of the
I.G.
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 participation in such programs for a period of at least five
years.
Section 1128(i) of the Act provides that an individual will be regarded as
having been convicted when a
judgment of conviction has been entered against him by a competent court (regardless
of whether there is
an appeal pending or whether the judgment is ultimately expunged); or when there
has been a formal
finding of guilt by a court; or when a court accepts a nolo or guilty plea;
or when a court withholds
judgment to allow a guilty defendant (who complies with certain conditions)
to preserve a clean record.
Section 1128(b)(1) authorizes, but does not mandate, the exclusion of any person
whom the Secretary of
HHS concludes has been convicted of health care related fraud, theft, false
claims, or similar financial
misconduct.
ARGUMENT
Petitioner contends that she was not convicted of a criminal offense because
the court did not adjudicate
her guilty of the criminal charge, and she stands without a record of conviction.
Petitioner maintains that
she did not intend to defraud Medicaid and that she had no knowledge of the
erroneous billing, which she
alleges was the result of mistakes made by one of her employees. Petitioner
contends also that the
permissive exclusion provision of section 1128(b)(1) of the Act, rather than
the mandatory exclusion
provision of section 1128(a)(1), applies to this case. She argues that a five
year exclusion is unreasonably
lengthy because she has paid full restitution, none of her patients have been
mistreated, she has no record
of prior offenses, and she did not intend to engage in wrongdoing.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 1/
1. During the period relevant to this case, Petitioner was a duly licensed
physician (psychiatrist) in the
State of Florida, and a Medicaid provider. I.G. Ex. 1/1.
2. Based upon an investigation conducted by the Florida Auditor General, the
State concluded that
Petitioner had billed the Medicaid program for services in excess of those she
had actually provided to her
Medicaid patients. I.G. Ex. 1.
3. On August 8, 1991, an Information filed in the Circuit Court for Dade County,
Florida, charged
Petitioner with the offense of Medicaid Fraud. The Information alleged that
Petitioner knowingly and
unlawfully received or attempted to receive unauthorized payments by submitting
false claims to the
Florida Medicaid Program in violation of Florida State law. This violation was
a felony. I.G. Ex. 3;
Petitioner's Hearing Request at 1.
4. Petitioner and the State entered into an agreement which provided that Petitioner
would plead nolo
contendere to the charge against her on the understanding that the court would
withhold adjudication and
sentence her to pay $5,425.00 restitution to the Florida Department of Health
and Rehabilitative Services,
$10,000.00 for investigative costs to the Medicaid Fraud Control Unit, a $1,000.00
donation to the
S.A.V.E. program, and an unspecified amount for court costs. I.G. Ex. 2.
5. The Circuit Court for Dade County, Florida found Petitioner guilty of the
offense of "Medicaid Fraud-
Receiving Unauthorized Payments for False Claims" based upon Petitioner's
entry of a nolo contendere
plea. The court also sentenced Petitioner to pay restitution in the amount of
$5,425.00 and ordered that an
adjudication of guilt be stayed and withheld. I.G. Ex. 4.
6. Petitioner paid restitution in open court. I.G. Ex. 4.
7. The Secretary of HHS has delegated to the I.G. the duty to determine and
impose exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21662 (May 13, 1983).
8. Petitioner was convicted of a criminal offense within the meaning of sections
1128(i)(2), 1128(i)(3),
and 1128(i)(4) of the Act.
9. The conviction of a criminal offense for Medicaid Fraud based upon receiving
unauthorized payments
for false claims constitutes a conviction of a criminal offense related to the
delivery of an item or service
under Medicaid, within the meaning of section 1128(a)(1), and therefore justifies
application of that
exclusion provision.
10. Pursuant to section 1128(a)(1) of the Act, the I.G. is required to exclude
Petitioner from participating
in Medicare and Medicaid.
11. The minimum mandatory period of exclusion for exclusions pursuant to section
1128(a)(1) of the Act
is five years. Act, section 1128(c)(3)(B).
12. The I.G. properly excluded Petitioner from participation in the Medicare
and Medicaid programs for a
period of five years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the
Act.
13. Neither the I.G. nor the administrative law judge has the authority to
reduce the five year minimum
exclusion mandated by sections 1128(a)(1) and 1128(c)(3)(B) of the Act.
14. There are no disputed material facts in this case, and the I.G. is entitled to summary disposition.
DISCUSSION
The section of the Act under which the I.G. seeks Petitioner's exclusion, 1128(a)(1),
contains two
requirements. It requires that an individual: (1) be convicted of a criminal
offense, and (2) that such
criminal offense be related to the delivery of an item or service under Medicare
or Medicaid.
A. Petitioner was "convicted" of a criminal offense within the meaning of the Act.
Petitioner asserts that she was not "convicted" of a criminal offense
because she "was not adjudicated
guilty of the offense charged and stands without a record of conviction."
Petitioner's Brief at 1.
The Act provides that an individual or entity is considered to have been convicted
of a criminal offense
under any of the following four conditions:
(1) when a judgment of conviction has been entered against the individual
or entity by a Federal,
State, or local court, regardless of whether there is an appeal pending or whether
the judgment of
conviction or other record relating to criminal conduct has been expunged;
(2) when there has been a finding of guilt against the individual or entity
by a Federal, State or
local court;
(3) when a plea of guilty or nolo contendere by the individual or entity has
been accepted by a
Federal, State or local court; or
(4) when the individual or entity has entered into participation in a first
offender, deferred
adjudication, or other arrangement or program where judgment of conviction has
been withheld.
Act, section 1128(i).
It is true, as Petitioner asserts, that no judgment of conviction was entered
against Petitioner. Thus, I find
that Petitioner was not convicted of a criminal offense within the meaning of
section 1128(i)(1) of the Act.
This finding, however, does not nullify a conclusion that Petitioner was convicted
within the meaning of
the Act, as long as it can be shown that the facts of the case fall within the
meaning of any of the remaining
three subsections of 1128(i). Based upon my review of the evidence, I conclude
that Petitioner was
convicted of a criminal offense within the meaning of sections 1128(i)(2), 1128(i)(3),
and 1128(i)(4) of the
Act.
Under section 1128(i)(2), an individual is defined as convicted "when
there has been a finding of guilt
against the individual or entity by a Federal, State, or local court".
The Florida Circuit Court's order
disposing of the underlying criminal case is entitled "Finding of Guilt
and Order Withholding Adjudication
and Special Conditions". It explicitly states on its face that "the
defendant . . . has been found guilty of the
charge" and indicates that what is being withheld is the formal adjudication
of her guilt. I.G. Ex. 4. I
conclude from these facts that the Florida Circuit Court made a finding of guilt
against Petitioner. The fact
that the court withheld formal adjudication of Petitioner's guilt and declined
to enter a judgment of
conviction does not derogate from my conclusion that the court made a finding
of guilt against Petitioner
within the meaning of section 1128(i)(2) of the Act.
Pursuant to section 1128(i)(3), the statute defines the term convicted of a
criminal offense to include those
circumstances in which "a plea of . . . nolo contendere by the individual
or entity has been accepted by a
Federal, State, or local court". In this case, the Florida Circuit Court's
Order does not state on its face that
the court "accepts" Petitioner's nolo contendere plea. However, the
absence of an explicit acceptance by
the court does not mean that Petitioner's plea was not accepted, particularly
where the totality of the facts
and circumstances indicates otherwise. James D. Redd, M.D., DAB CR213 (1992).
Petitioner entered into an agreement with the prosecutor, an officer of the
court. The agreement provided
that Petitioner would plead nolo contendere to the offense of Medicaid Fraud
on the understanding that the
court would withhold adjudication and sentence Petitioner to pay restitution,
costs and a donation.
Pursuant to that agreement, Petitioner entered a nolo contendere plea to the
charge against her. Based on
that plea, the Florida court found Petitioner guilty of the charge and sentenced
Petitioner to pay restitution.
In accordance with the plea agreement, the court did not enter a judgment of
conviction against Petitioner,
but disposed of the case by withholding an adjudication of guilt. I.G. Exs.
2, 4. While the court did not
explicitly declare that it accepted Petitioner's plea, its acceptance of the
plea is implied by virtue of the fact
that it found Petitioner guilty of the offense to which she pled nolo contendere.
The fact that the Florida
court withheld adjudication of guilt does not alter my conclusion that it accepted
Petitioner's nolo
contendere plea within the meaning of section 1128(b)(3) of the Act. I find
that the inference to be drawn
from the court's overseeing and approving of this entire process, from entry
of the plea through final
disposition of the charges, is that there was an acceptance of Petitioner's
plea, in the context of a deferred
adjudication arrangement. See Redd, DAB CR213 at 4.
I recognize that at least one federal court has refused to sustain a similar
decision by an administrative law
judge regarding acceptance of a plea. Travers v. Sullivan, 791 F. Supp. 1471
(E.D. Wash. 1992). In
Travers, however, the State court not only had not formally "accepted"
the plea entered by the defendant,
but also stated that it was taking the plea under advisement, and that plea
acceptance would require a
further petition by the parties. Thus, I find that the facts of the present
case differ from Travers and are
sufficient to support a finding that the court accepted Petitioner's nolo contendere
plea within the meaning
of section 1128(i)(3).
I find also that the facts of this case establish that the fourth alternative
for establishing conviction -- the
arranged deferral or withholding of judgment -- has been satisfied. The evidence
shows that the agreement
between Petitioner and the prosecutor which led Petitioner to plead nolo contendere
and led the court to
enter an order withholding adjudication was not solely an agreement involving
only the prosecutor and
Petitioner. The court involved itself in the process to find Petitioner guilty
of the charge, to sentence
Petitioner to pay restitution, and to enter an order withholding adjudication
of guilt. This is indicative not
only of the court's pervasive involvement and acceptance of the plea and process,
as noted above, but
shows also that there was a well-established deferred adjudication arrangement
in the jurisdiction in
question, which the court and parties all expected to utilize.
Section 1128(i)(4) of the Act expressly encompasses deferred or stayed judgments
and first offender
programs, and provides that a criminal defendant whose case is handled in such
manner will still be
regarded as having been convicted. Congress intended that disposition of a criminal
charge based on a
guilty plea or a plea of nolo contendere would be a conviction even under those
circumstances where a
court decided to hold in abeyance entry of a judgment against a party pending
the party's satisfaction of the
terms of a plea agreement. In H.R. Rep. No. 727, 99th Cong., 2d Sess. 75, reprinted
in 1986 U.S.C.C.A.N.
3607, 3665, the committee that drafted section 1128 declared that persons who
defraud Medicare or
Medicaid should not escape exclusion simply because their criminal cases are
handled under first offender
or deferred adjudication programs, whereby a defendant pleads guilty or nolo
contendere but no actual
judgment of conviction is entered against him provided he maintains good behavior
and satisfies any other
conditions that may be imposed. The arrangement entered into by Petitioner in
this case falls squarely
within the kinds of arrangements which the committee responsible for drafting
the exclusion law sought to
include within the ambit of section 1128(i)(4). I find that the Florida court's
disposition of Petitioner's plea
under the terms of the plea agreement constitutes a deferred adjudication arrangement
where judgment of
conviction has been withheld within the meaning of section 1128(i)(4).
B. Petitioner's criminal offense is related to the delivery of an item or service under the Medicaid program.
Next, it is required by section 1128(a)(1) that the crime at issue be related
to the delivery of an item or
service under Medicaid or Medicare. It is well established that filing false
Medicare or Medicaid claims
constitutes clear program-related misconduct. Jack W. Greene, DAB CR19 (1989),
aff'd DAB 1078
(1989), aff'd Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990).
Furthermore, case precedent also expressly holds that it is the fact of conviction
of a relevant offense that
triggers exclusion; proof of criminal intent is not required to bring a conviction
within the ambit of section
1128(a)(1). DeWayne Franzen, DAB 1165 (1990).
In sum, mandatory exclusion pursuant to section 1128(a) is applicable wherever
it is shown that an
appropriate criminal conviction has occurred. The I.G. does not look beyond
the fact of conviction and
Petitioner may not utilize this administrative proceeding to collaterally attack
the criminal conviction by
seeking to show that she did not do the act charged or that there was no criminal
intent. Richard G. Philips,
D.P.M., DAB CR133 (1991).
Petitioner argues that the criminal offense to which she pled nolo contendere
relates to financial
misconduct and therefore the I.G. should have treated her criminal conviction
as grounds for a permissive
action under section 1128(b)(1) of the Act. July 24, 1992 Prehearing Order at
2. As an appellate panel of
the Departmental Appeals Board stated in Boris Lipovsky, M.D., DAB 1363 at 8
(1992):
The Board has previously considered the relationship between section 1128(a)(1)
and section
1128(b)(1). We have decided that, where a conviction falls within the terms
of section 1128(a)(1), it is
governed by that section. The fact that the conviction also meets the more inclusive
elements of section
1128(b)(1) does not remove it from the ambit of section 1128(a)(1) and the I.G.
must impose a mandatory
exclusion.
Section 1128(a)(1) encompasses the same kinds of "financial" offenses
which are described in 1128(b)(1),
but is limited to those offenses which are directed against, or committed in
connection with, the rendering
of services pursuant to the Medicare and Medicaid programs. Reading sections
1128(a)(1) and 1128(b)(1)
in conjunction with each other makes it apparent that the legislative scheme
is to mandate exclusions of
those who commit financial crimes directed against Medicare and Medicaid and
to permit exclusions of
those who commit financial crimes in connection with the delivery of a health
care item or service pursuant
to programs, other than Medicare or Medicaid, which are financed by federal,
State, or local government
agencies. In this case, Petitioner was convicted of a financial crime in connection
with the delivery of an
item or service under the Medicaid program, and I conclude that the I.G. properly
classified Petitioner's
offense as falling under the mandatory exclusion authority. Accordingly, the
I.G. is required to exclude
Petitioner for a minimum of five years under sections 1128(a)(1) and 1128(c)(3)(B)
of the Act.
C. There is no need for an evidentiary hearing in this case.
Petitioner requested a hearing so that I would have the opportunity to consider
mitigating circumstances
which, in her view, would compel a reduction of the five year exclusion imposed
on her. Petitioner
contends that the five year exclusion should be reduced because she did not
mistreat her patients, she has
paid restitution to the Medicaid program, she has no prior offenses, and she
did not intend to defraud the
program.
Petitioner cites a Florida State statute to support the proposition that the
exclusion in this case may be
reduced to as low as one year. The I.G. imposed an exclusion pursuant to section
1128(a)(1) of the Act,
and the statutory provision cited by Petitioner is not applicable to this proceeding.
Since I do not have the authority to reduce the five year minimum exclusion
mandated by section
1128(c)(3)(B) of the Act, the facts which Petitioner seeks to establish in an
evidentiary hearing would not
materially affect the outcome of this case. There are no genuine issues of material
fact which would
require the submission of additional evidence, and, therefore, there is no need
for an evidentiary hearing in
this case. Accordingly, the I.G. is entitled to summary disposition as a matter
of law. See, Charles W.
Wheeler and Joan K. Todd, DAB 1123 (1990).
CONCLUSION
Petitioner's conviction requires her exclusion for a period of at least five
years, pursuant to section
1128(a)(1).
____________________________
Joseph K. Riotto
Administrative Law Judge
1. Petitioner and the I.G. submitted written argument and the I.G. introduced
documentary exhibits. I
admitted all of the exhibits into evidence and refer to them herein as I.G.
Ex. (number).