Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Douglas L. Reece, D.O., Petitioner,
- v. -
The Inspector General.
DATE: August 12, 1993
Docket No. C-93-048
Decision No. CR280
DECISION
By letter dated January 12, 1993, Douglas L. Reece, D.O., 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 from participation in
the State health care programs mentioned in section 1128(h) of the Social Security
Act (Act). (I use the
term "Medicaid" in this Decision when referring to the State programs.)
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. 1/
Petitioner filed a timely request for review of the I.G.'s action, and the
I.G. moved for summary
disposition.
Because I have determined that there are no material and relevant factual issues
in dispute -- i.e., the only
matter to be decided is the legal significance of the undisputed facts, I have
granted the I.G.'s motion and
decide the case on the basis of written submissions in lieu of an in-person
hearing.
I affirm the I.G.'s determination to exclude Petitioner from participation
in the Medicare and Medicaid
programs for a period of five years.
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.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is an osteopathic physician practicing in the State of Texas.
2. On June 14, 1990, a grand jury in Lubbock, Texas, indicted Petitioner for
the felony offense of
Tampering with Government Records. I.G. Ex. 2. 2/
3. The grand jury decided that there was probable cause to believe that on
or about November 25, 1988,
Petitioner knowingly and intentionally made a false claim for reimbursement
by Medicaid based upon
Petitioner's purportedly having provided an "office visit" to a certain
individual when, in fact, Petitioner
knew that such individual had not had an office visit. I.G. Ex. 2.
4. The indictment states that the claim was submitted to the National Heritage
Insurance Company on a
form used by the Texas Department of Human Services in determining eligibility
for Medicaid benefits.
I.G. Ex. 2.
5. The National Heritage Insurance Company was, on November 25, 1988, the Medicaid
carrier (fiscal
intermediary) for the State of Texas. See, Brief in Support of the Inspector
General's Motion for Summary
Disposition, p. 5.
6. On May 5, 1992, in the 237th District Court, Lubbock County, Texas, Petitioner
"pleaded guilty to the
charge contained in the indictment," and the court accepted the plea. I.G.
Ex. 1.
7. The Texas court determined that the evidence "substantiates the Defendant's
guilt for the offense
charged against him to-wit: Tampering with Government Records, a third-degree
felony committed on
November 25, 1988." I.G. Ex. 1.
8. The court declared that the "best interest of society and the defendant"
would be served by deferring
entry of a formal adjudication of guilt. I.G. Ex. 1.
9. The court placed Petitioner on probation for a period of 10 years and required
him to pay a substantial
fine ($5000), plus restitution and costs.
10. 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 (1983).
11. In making a discretionary determination, in the name of the State, to credit
Petitioner's plea, thereby
formally resolving an outstanding criminal charge, the judge was engaged in
the "acceptance" process,
within the meaning of section 1128(i)(3) of the Act.
12. The court's decision that formal entry of Petitioner's guilt should be
deferred is a common situation,
anticipated by Congress, which, the statute declares, does not undo the guilty
plea.
13. That other federal statutes treat situations involving deferred adjudication
differently is irrelevant,
particularly in light of the clear intent of Congress with regard to mandatory
exclusions.
14. Filing false Medicaid claims constitutes clear program-related misconduct,
sufficient to mandate
exclusion.
PETITIONER'S ARGUMENT
Petitioner contends that the I.G. failed to prove that he, Petitioner, was
"convicted," within the meaning of
section 1128(a)(1) of the Act, or that the convicton was a "final conviction."
Petitioner asserts that thus
there is a factual dispute which makes summary judgment inappropriate.
Petitioner cites the Immigration Reform and Control Act, which he maintains
does not treat a criminal
defendant as having been convicted when final adjudication of his case has been
deferred. Petitioner
argues that it is improper for federal law to utilize two different standards
for the same type of
determinations.
Next, Petitioner asserts that the District Court's Order for Deferred Adjudication
does not provide sufficient
detail as to the government records, the type of tampering, or the governmental
program involved. He
contends that because the indictment does not explicitly state that the Medicaid
or Medicare program has
been defrauded, the I.G. has not proven the required nexus between his alleged
conviction and the
program.
Lastly, Petitioner maintains that a five-year exclusion would probably put
him out of business permanently
-- at the very least, would cost him $500,000 in lost fees -- and that it would,
therefore, be so
disproportionate a sanction as to amount to an unconstitutional second punishment,
citing United States v.
Halper, 490 U.S. 435 (1989). Petitioner argues that he is entitled to an in-person
hearing on whether his
exclusion constitutes such prohibited punishment.
DISCUSSION
The first statutory requirement for mandatory exclusion pursuant to section
1128(a)(1) of the Act is that the
individual in question have been convicted of a criminal offense under federal
or State law.
As to the requirement that Petitioner had to have been convicted, the relevant
statute, section 1128(i) of the
Act, indicates that there are essentially four sets of actions which Congress
regards as legal equivalents of
conviction. These are: when a court enters a judgment of conviction (it is immaterial
whether there is an
appeal pending or whether the judgment is ultimately expunged); or when a court
makes a formal finding
of guilt; or a court accepts a guilty or nolo plea; or a court defers judgment
to allow a guilty defendant
(who complies with certain conditions) to preserve a clean record.
In the case at hand, Petitioner appeared in court and "pleaded guilty
to the charge contained in the
Indictment." (Emphasis added.)
The court carefully questioned Petitioner about his actions and motivation.
It thereupon "received" the
guilty plea and "entered [it] of record upon the minutes of the Court as
the plea of said defendant." The
court then considered the evidence and found "that it substantiates the
Defendant's guilt for the offense
charged against him to-wit: Tampering with Government Records . . ." (Quotations
mark the words of the
State judge; underscoring has been inserted for emphasis in this Decision).
Lastly, the court decided that, in the interest of justice, entry of a formal
adjudication of guilt should be
deferred.
Based on the above, I conclude that Petitioner must be regarded as having been
convicted, in context of
these statutory criteria. Specifically, the Petitioner herein entered a guilty
plea and the court accepted it.
The court's order (I.G. Ex. 1) clearly establishes that Petitioner declared
himself to be guilty and that the
judge found a real factual basis for the plea and found no coercion or other
improper motivation. In the
judge's own words, he "received" the plea. The judge then made a written
entry in court records that
Petitioner admitted he was guilty of the charge brought by the grand jury.
Thus, the judge evaluated Petitioner's plea and exercised a real option to
accept it or reject it. Upon
deciding that there was a genuine basis for the plea, the judge then noted Petitioner's
admission of guilt on
an official judicial document. I conclude that the court thereby satisfied the
essence of the statutory
standard -- that is, the judge made a truly discretionary determination, in
the name of the State of Texas, as
to whether or not to credit a particular plea, thereby formally resolving an
outstanding criminal charge.
The fact that the judge then decided that formal entry of Petitioner's guilt
should be deferred is a common
situation, anticipated by Congress, which, the statute declares, does not undo
the guilty plea which gave
rise to the conviction.
Petitioner's reliance on the decisions in Travers v. Sullivan, 791 F. Supp.
1471 (E.D. Wash. 1992) and
Martinez-Montoya v. Immigration and Naturalization Service, 904 F.2d 1018 (5th
Cir. 1990) is misplaced.
In Travers, which involved an I.G.-imposed-and-directed exclusion also, the
State court whose action on
the plea was in question not only had not formally "accepted" it,
but had also stated that it was taking the
plea under advisement and that plea acceptance would require a further petition
by the parties. Thus, the
facts of the present case differ significantly from Travers and are sufficient
to support the inferences and
conclusion I have drawn.
In Martinez-Montoya, the Fifth Circuit held that the Immigration and Naturalization
Service had
improperly ignored its own precedents and regulations in not recognizing that
a Texas deferred
adjudication determination was not a conviction for purposes of the immigration
laws. I find not relevant
Petitioner's argument that in another area of federal law deferred adjudication
is treated differently. In this
area of exclusion law, Congress has defined conviction to include a deferred
adjudication, and it is not
within the authority of an administrative law judge to disregard or hold invalid
federal statutes or
regulations. For that matter, it is unlikely that a federal court would do so
when there is no better reason
than that different policies exist in immigration law. Furthermore, Petitioner
is mistaken when he
maintains that this is a factual question which makes summary disposition unwarranted.
Rather, it is a
question of law, which may readily be resolved without the elucidation of additional
facts. 3/
The other requirement of section 1128(a)(1) of the Act is that the conviction
must be related to the delivery
of an item or service under Medicare or Medicaid. It is well-established in
decisions of the Departmental
Appeals Board (DAB) that filing false Medicare or Medicaid claims constitutes
clear program-related
misconduct, sufficient to mandate exclusion. Jack W. Greene, DAB CR19, aff'd,
DAB 1078 (1989), aff'd
sub nom. Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). I find
that Petitioner's actions in
the present case -- intentionally billing Medicaid for services that were not
provided as Petitioner alleged --
similarly constitute criminal fraud related to the delivery of Medicaid services.
Petitioner asserts also that the District Court's Order does not provide sufficient
details of the conduct
which led to charges being brought against him. I find that the opposite is
true.
As noted above, Petitioner "pleaded guilty to the charge contained in
the indictment," and it was found by
the court that the evidence "substantiates the Defendant's guilt for the
offense charged against him." Thus,
he must be regarded as having been convicted of exactly the offenses for which
he was indicted.
Turning to the Indictment, I find that such document is reasonably clear. It
charges that Petitioner
knowingly and intentionally falsified a claim form provided to the Texas Department
of Human Services
through a private company, National Heritage Insurance. I find it reasonable
to infer that this latter entity
was a Medicaid carrier (fiscal intermediary) for the State of Texas. Moreover,
the I.G. noted in the Brief in
Support of the Motion for Summary Disposition (page 5) that the private company
was the Medicaid fiscal
intermediary, and Petitioner did not dispute it. Had his crime not been discovered,
the data from the form
would have been transmitted to the State, and payment would have been made from
Medicaid funds to
Petitioner for work he did not perform.
Petitioner's reliance on the Double Jeopardy clause is also misplaced. In the
first place, his was a State
conviction and a federal administrative sanction, even if sufficiently punitive,
would not violate the Double
Jeopardy clause. Also, an appellate panel of the DAB has held explicitly that
" . . . the mandatory
exclusion provision is not comparable to the civil penalty imposed in United
States v. Halper , but is
remedial in nature" and, therefore, constitutionally inoffensive. Janet
Wallace, L.P.N., DAB 1126 (1992).
Also, see Manocchio v. Kusserow, 961 F.2d 1539 (11th Cir. 1992).
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.
Neither the I.G. nor an administrative law judge is authorized to reduce the
five-year minimum mandatory
period of exclusion. Jack W. Greene, DAB CR19, at 12 - 14 (1989). The I.G.'s
five-year exclusion is,
therefore, sustained.
_________________________________
Joseph K. Riotto
Administrative Law Judge
1. The I.G.'s notice letter mistakenly cited section 1128(a)(2) of the Act,
but counsel for the I.G.
corrected this to section 1128(a)(1) at the prehearing conference.
2. The I.G. submitted six exhibits and the affidavit of I.G. investigator William
Hughes with the Motion
for Summary Disposition. Petitioner submitted his own affidavit and an attached
document with his
response. Neither party objected to the other's exhibits. I am marking the affidavit
of investigator Hughes
as I.G. Exhibit (I.G. Ex.) 7 and the affidavit of Petitioner, including the
attachment, as Petitioner's Exhibit
(P. Ex.). I am admitting I.G. Ex. 1 through 5, and 7, and P. Ex. I reject I.G.
Ex. 6 because it (the Notice
letter) is already in the record and I directed the parties in my Prehearing
Order not to submit such
duplicative material.
3. Petitioner has emphasized also that the I.G. did not prove that there was
a "final conviction" in his
case. Inasmuch as this phrase does not appear in section 1128(a) of the Act,
there is no merit to Petitioner's
argument.