Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Norman E. Hein, D.D.S., Petitioner,
- v. -
The Inspector General.
DATE: February 26, 1993
Docket No. C-92-124
Decision No. CR251
DECISION
By letter dated June 9, 1992, Norman E. Hein, D.D.S., 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 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 the 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, and what
must be decided is the legal significance of the undisputed facts, I have decided
the case on the basis of
written submissions in lieu of an in-person hearing. 1/
I affirm the I.G.'s determination to exclude Petitioner from participation
in the Medicare and Medicaid
programs for a period of five years 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(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, as bases for exclusion, offenses described in sections
1128A and 1128B of the
Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. During the period relevant to this case, Petitioner was a licensed dentist
in the State of Washington. P.
Ex. 1.
2. Petitioner was charged by the Washington State Attorney General with the
crime of theft (third degree)
for having allegedly induced a woman to pay him money for dental services he
rendered to her niece, even
though Petitioner was required by contract and State regulations to accept payment
from Medicaid as his
sole payment. I.G. Exs. 1, 2.
3. On January 27, 1992, pursuant to a plea bargain with the prosecution, Petitioner
entered an "Alford"
plea (in which he averred that he was not guilty of the offense charged, but
that he would plead guilty to
avoid the risks, time, and expense of a trial) to the charge of theft (third
degree) in the Seattle District
Court. I.G. Exs. 3, 6.
4. On January 27, 1992, the judge presiding over Petitioner's criminal case
found that there was a factual
basis for Petitioner's plea and that Petitioner was guilty as charged. The judge
issued an Order captioned
"Judgment and Sentence" which declared that Petitioner's sentence
would be deferred for a period of 12
months, and ordered Petitioner to pay restitution in the amount of $1200, perform
community service, and
pay court costs of $15 and the victim's penalty of $75. I.G. Exs. 4, 6.
5. Petitioner complied with the court's conditions, and, on April 15, 1992,
the court granted Petitioner's
request to withdraw his guilty plea, ordered the conviction vacated, and dismissed
the action. I.G. Exs. 6,
7.
6. The Secretary of HHS has delegated to the I.G. the authority to determine
and impose exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21662 (1983).
7. By letter dated June 9, 1992, 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 Petitioner had
been convicted of a criminal offense related to the delivery of an item or service
under Medicaid.
8. An "Alford" plea constitutes a plea of guilty within the meaning of section 1128(i) of the Act.
9. The court's acceptance of Petitioner's "Alford" plea to a criminal
charge constitutes a conviction within
the meaning of section 1128(i) of the Act. The fact that the court subsequently
permitted Petitioner to
withdraw his guilty plea and agreed to vacate the conviction is irrelevant.
10. The conviction of a criminal offense based upon Petitioner's requesting
and receiving "donations" on
behalf of an individual being treated by him under Medicaid constitutes a conviction
of a criminal offense
related to the delivery of services under Medicaid within the meaning of section
1128(a)(1) and therefore
justifies application of that exclusion provision.
11. Petitioner may not utilize this administrative proceeding to collaterally attack his criminal conviction.
12. Pursuant to section 1128(a)(1) of the Act, the I.G. is required to exclude
Petitioner from participating
in Medicare and Medicaid.
13. The minimum mandatory period for exclusions pursuant to section 1128(a)(1) of the Act is five years.
14. 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.
15. 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.
ARGUMENT
Petitioner admits that he did receive cash "donations" from an individual
who was not a Medicaid recipient
and acknowledges that his doing so constituted the basis of a theft charge to
which he entered an Alford
plea. He admits that he had been informed that he could not bill Medicaid patients
for the difference
between what Medicaid allowed and his normal charge for the item or service.
He asserts, however, that
he had never been informed that it was illegal to solicit "donations"
and that the "donations" were not a
precondition to treatment or continued treatment of any patient. He states also
that when he received
payments from Medicaid recipients, such monies were for services not covered
by Medicaid.
As to legal argument, Petitioner contends that Washington law prohibits the
solicitation or receipt of
money in addition to monies received through the Medicaid program only if the
additional money is a
precondition to the treatment or continued treatment of a Medicaid recipient.
According to Petitioner, he
was charged with asking an individual who was not a Medicaid recipient to donate
monies. Petitioner
argues that the necessary legal elements of a criminal offense were not alleged
or established and the
criminal offense of which he was convicted did not relate to Medicaid because:
(1) the allegations which
formed the basis for his conviction involved soliciting and receiving monies
from an individual who was
not a Medicaid recipient; (2) there were no allegations that the donations were
a precondition to the
treatment or continued treatment of a Medicaid recipient; and (3) he never admitted
guilt or intended to
obtain money wrongfully. In the alternative, Petitioner argues that if he is
guilty of a health care related
offense, it is one which must be dealt with under section 1128(b) of the Act,
which authorizes permissive
exclusion, rather than section 1128(a) of the Act.
DISCUSSION
The first statutory requirement for the imposition of mandatory exclusion pursuant
to section 1128(a)(1) of
the Act is that the individual or entity in question be convicted of a criminal
offense. Prior decisions of the
Departmental Appeals Board (DAB) have established that acceptance by a State
court of an "Alford" plea
to a criminal charge constitutes a conviction within the meaning of section
1128(i) of the Act. Russell E.
Baisley and Patricia Mary Baisley, DAB CR128 (1991); Raymond R. Veloso, M.D.,
DAB CR124 (1991).
This precedent is controlling in the instant case.
The fact that the court permitted Petitioner to withdraw his guilty plea and
agreed to vacate the conviction
is irrelevant. Subsection 1128(i)(1) of the Act provides that an individual
will be regarded as having been
convicted, regardless of whether his judgment of conviction or criminal record
is subsequently expunged.
This provision has been interpreted as meaning that all arrangements which provide
for "post-pleading
erasures of convictions [are] included within the statutory definition of conviction."
James F. Allen,
M.D.F.P., DAB CR71, at 10 (1990).
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. This criterion is met where there is a commonsense
connection
between the criminal offense and the Medicaid or Medicare programs. Clarence
H. Olson, DAB CR46
(1989). Case law has consistently held that a criminal offense falls within
the reach of section 1128(a)(1)
of the Act where the delivery of an item or service is an element in the chain
of events giving rise to the
offense. Larry W. Dabbs, R.Ph. and Gary L. Schwendimann, R.Ph., DAB CR151 (1991).
In the case at hand, Petitioner was convicted of theft in the third degree.
I.G. Ex. 4. It is not possible to
ascertain from the name of the offense alone whether it relates to the delivery
of a health care item or
service under the Medicaid program. However, it is consistent with congressional
intent to admit limited
evidence concerning the facts upon which the conviction was predicated in order
to determine whether the
statutory criteria of section 1128(a)(1) have been satisfied. As stated in H.
Gene Blankenship, DAB CR42,
at 11 (1989):
The test of whether a "conviction" is "related to" Medicaid
must be a common sense
determination based on all relevant facts as determined by the finder of fact,
not merely a narrow
examination of the language within the four corners of the final judgment and
order of the criminal trial
court.
Relying on the holding in Blankenship, an appellate panel of the DAB held that:
[T]he ALJ, the finder of fact, can look beyond the findings of the state court
to determine if a
conviction was related to Medicaid. Therefore the ALJ's characterization of
an offense is not limited to the
state court's or the violated statute's precise terms for purposes of determining
whether a conviction related
to Medicaid.
DeWayne Franzen, DAB 1165, at 6 (1990).
Accordingly, in considering whether the offense of which Petitioner was convicted
is related to the
delivery of an item or service under the Medicaid program, I may consider all
relevant documents
pertaining to the criminal court proceeding. In this case, the criminal complaint
charged Petitioner with the
offense of theft in the third degree and alleged that the offense occurred between
January 18, 1990 and
March 8, 1990. I.G. Ex. 1. In addition, the I.G. has submitted a probable cause
statement which describes
more fully the circumstances upon which the complaint was based.
The probable cause statement asserts that as part of his contract to provide
dental services to Medicaid
recipients, Petitioner agreed to accept payment from Medicaid for covered services
he provided as payment
in full for those services. The probable cause statement asserts also that Petitioner
told an individual who
was the aunt of one of his Medicaid patients that Medicaid did not pay him in
full for his dental services.
According to the probable cause statement, Petitioner asked the Medicaid recipient's
aunt to donate the
difference, and the aunt did so on behalf of the Medicaid recipient on three
separate occasions during the
period from January 18, 1990 through March 8, 1990. I.G. Ex. 2. 2/
It is undisputed that Medicaid prohibits a provider from billing patients for
the difference between what the
Medicaid program pays for a service and what the provider charges non-Medicaid
patients for those
services. P. Ex. 1. The fact that Medicaid prohibits such conduct shows that
the Medicaid program
regards any additional payments linked to transactions reimbursable by Medicaid
as inimical to the
integrity of the program.
Petitioner contends that the offense of which he was convicted was not related
to the Medicaid program
because the additional payment for Petitioner's services was made by an individual
who was not a
Medicaid recipient. I disagree. Common sense shows that the delivery of Petitioner's
dental services to a
Medicaid patient played an essential and integral role in Petitioner's criminal
offense and conviction.
Petitioner allegedly asked a relative of a Medicaid recipient to "donate"
the difference between the full
value of dental services he provided to the Medicaid recipient and the amount
of money Medicaid paid him
for these services. The Medicaid recipient's relative allegedly paid this difference
on behalf of the
Medicaid recipient. Based on these allegations, the delivery of dental services
to a Medicaid recipient is an
element in the chain of events giving rise to the offense. But for the delivery
of Petitioner's dental services
to a Medicaid recipient, Petitioner would not have solicited the "donations"
from the recipient's relative.
I note that the case Marshall J. Hubsher, M.D., DAB CR188 (1992), aff'd, DAB
1353 (1992) involved a
similar offense. In that case, a State court convicted Dr. Hubsher of the offense
of grand larceny because
he accepted reimbursement for his medical services from Medicaid in addition
to accepting direct payment
for the same services from his patients. The law in effect as of the date of
Dr. Hubsher's conviction
required the Secretary to exclude individuals convicted of a criminal offense
related to such individual's
"participation" in the delivery of medical care or services under
Medicare or Medicaid. Dr. Hubsher
admitted that his criminal offense was related to his participation in the Medicaid
program, but contested
the length of the exclusion.
Hubsher differs from the case at hand in that Dr. Hubsher's conviction was
based on his acceptance of
payments from Medicaid recipients rather than relatives of Medicaid recipients.
In addition, Dr. Hubsher
conceded that his offenses were program related; thus the ALJ and the appellate
panel of the DAB did not
specifically hold that they were. Nevertheless, Hubsher is an example of an
instance where a conviction of
the offense of accepting payments from individuals for health care services
while also receiving
compensation from Medicaid was the basis of a mandatory exclusion for a program-related
offense.
Petitioner contends also that under Washington law it is illegal to solicit
monies from individuals in
addition to monies received through the Medicaid program only if the solicited
money is a precondition to
the treatment or continued treatment of a patient. According to Petitioner,
there were no specific
allegations that the donations were a precondition to treatment or continued
treatment of any patient.
Based on this, Petitioner asserts that the necessary legal elements of a criminal
offense have not been
properly alleged.
Petitioner asserts that the monies he received were lawful donations which
were applied to those services
which were not covered by the program. Petitioner states that he inquired about
the propriety of accepting
donations and that no one ever told him that accepting donations were prohibited.
Petitioner claims that he
never intended to obtain money wrongfully and he never has admitted his guilt.
Based on this, Petitioner
argues that the necessary legal elements of a criminal offense have not been
established and he has not
been convicted of a criminal offense within the meaning of section 1128(a)(1).
These arguments constitute a collateral attack on Petitioner's State criminal
conviction. According to
Petitioner, the necessary legal elements of a criminal offense have not been
properly alleged or established.
Petitioner asserts that he was not guilty of a criminal offense because the
monies he received were lawful
donations. Petitioner reasons that the I.G. is without authority to exclude
him because he has not
committed any crime and he has not admitted that he has committed any crime.
It is a settled principle that a petitioner cannot challenge the I.G.'s authority
to exclude him by denying that
he is guilty of that for which he has been convicted. The I.G.'s authority to
exclude a party under section
1128(a)(1) arises by virtue of that party's conviction of a criminal offense,
as described in the Act. The law
does not authorize the Secretary to look behind the conviction to determine
whether it is valid. Richard G.
Philips, D.P.M., DAB CR133 (1991), aff'd, DAB 1279 (1991). It is not relevant
to the issue of the I.G.'s
authority to exclude that the criminal conviction may have been defective or
that Petitioner may have been
innocent of the charges of which he was convicted. Petitioner may not utilize
this administrative
proceeding to collaterally attack his criminal conviction. He may have recourse
within the State court
system, but not here. Baisley at 10.
Petitioner argues additionally that, if the I.G. had to proceed against him
at all, the I.G. should have treated
his conviction as grounds for a permissive exclusion action only -- rather than
as a basis for mandatory
exclusion. This position, however, is contrary to precedent and without merit.
For example, the decision
rendered in Samuel W. Chang, M.D., DAB 1198, at 8 (1990), 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."
In another relevant case, it was
decided that, where a criminal conviction satisfies the statutory criteria of
section 1128(a)(1), then section
1128(a)(1) is controlling and the I.G. must impose the mandatory exclusion which
the statute provides.
The fact that the criminal conviction may appear also to fall within the broader
criteria for permissive
exclusion found in section 1128(b) is irrelevant. Boris Lipovsky, M.D., DAB
1363 (1992). In the present
case, I conclude that, inasmuch as Petitioner's criminal conviction related
to the delivery of an item or
service under Medicare or Medicaid, the law imposes a non-discretionary requirement
that he be excluded
from participation in such programs for a period of at least five years.
CONCLUSION
Section 1128(a)(1) of the Act requires that Petitioner be excluded from the
Medicare and Medicaid
programs for a period of at least five years because of his conviction of a
program-related criminal offense.
The I.G.'s five-year exclusion is, therefore, sustained.
__________________________
Joseph K. Riotto
Administrative Law Judge
1. The I.G. filed a brief in support of his motion for summary disposition
accompanied by eight exhibits.
Petitioner has not contested the authenticity or relevancy of these documents.
I am admitting these exhibits
into evidence and hereafter I will refer to them as I.G. Ex. (number). Petitioner
filed a reply brief
accompanied by an affidavit signed by Petitioner. I am admitting Petitioner's
affidavit into evidence and
hereafter I will refer to it as P. Ex. 1.
2. The probable cause statement alleged also that Petitioner "routinely
obtained funds from Medicaid
recipients in addition to having them surrender their Medicaid coupon for covered
services. Contact with
numerous Medicaid patients seen by [Petitioner] confirms that [Petitioner] regularly
solicited and received
additional funds from them." I.G. Ex. 2. The complaint, however, did not
refer to these allegations of
obtaining monies from Medicaid recipients. Instead, it specifically referred
to the incidents during the
period from January 18, 1990 to March 8, 1990 involving the receipt of monies
from the individual who
was the aunt of a Medicaid recipient. Since Petitioner entered an Alford plea
to the charges in the
complaint, I base my finding that Petitioner was convicted of a program-related
offense on that part of the
probable cause statement involving the receipt of monies from the aunt of a
Medicaid recipient. The
allegations involving the receipt of monies from Medicaid recipients were not
referred to in the complaint,
and I do not base my finding that Petitioner was convicted of a program-related
offense on these
allegations.