DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of: Joan K. Todd, Petitioner,
- v. -
The Inspector General.
DATE: June 8, 1989
Docket No. C-63
DECISION AND ORDER
Joan K. Todd, the Petitioner, requested a hearing to contest the Inspector
General's (I.G.'s) determination to
exclude her from participation in Medicare and to direct that she be excluded
from participation in State
health care programs (e.g., Medicaid), for a period of five years. This Decision
and Order resolves this
case on the basis of written briefs and a stipulated record. I
find no merit in the numerous arguments raised by the Petitioner and I hereby
deny the Petitioner's motion
to
dismiss. I conclude that the I.G. was required under federal law to exclude
the Petitioner from Medicare,
and to direct her exclusion from Medicaid, for five years.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
This case is governed by section 1128 of the Social Security Act (Act), codified
at 42 U.S.C. 1320a-7
(West U.S.C.A. Supp., 1988). Section 1128(a) of the Act, headed "Mandatory
Exclusion," provides for the
exclusion from Medicare, and a directive to the State to exclude from State
health care programs, any
individual who is "convicted of a criminal offense related to the delivery
of an item or service" under the
Medicare or Medicaid programs. Section 1128(c)(3)(B) provides that the period
of such exclusion shall be
for a minimum of five years.
The term "convicted" is defined in section 1128(i) to include "when
a judgment of conviction has been
entered against the physician or individual by a Federal, State, or local court,"
or when a plea of guilty or
nolo contendere has been "accepted by a Federal, State, or local court."
(Emphasis added.)
While section 1128(a) of the Act provides for a minimum five-year mandatory
exclusion for (1)
convictions of program-related crimes and (2) convictions relating to patient
abuse, section 1128(b) of the
Act provides for the permissive exclusion of "individuals and other entities"
for twelve types of other
convictions, infractions, or undesirable behavior, such as convictions relating
to fraud, license revocation,
or failure to supply payment information. The Act does not prescribe a minimum
period of exclusion in
the case of a permissive exclusion.
II. The Federal Regulations.
The governing federal regulations (Regulations) are found in 42 C.F.R. Parts
498, 1001, and 1002 (1987).
Part 498 governs the procedural aspects of this exclusion and Parts 1001 and
1002 govern the substantive
aspects.
In accordance with section 498.5(i), a practitioner
provider, or supplier who has been excluded from program coverage is "entitled
to a hearing before an ALJ
(Administrative Law Judge)." Pursuant to section 1001.128, an individual
who has been excluded from
participation has a right to request a hearing before an ALJ on the issues of
whether: (1) he or she was, in
fact, convicted; (2) the conviction was related to the delivery of an item or
service under Medicare or
Medicaid; and (3) the length of the exclusion is reasonable.
Section 1001.123(a) requires the I.G. to send written notice of his determination
to exclude an individual or
entity when he has "conclusive information" that the individual or
entity has been convicted of a crime
related to the delivery of an item or service under Medicare or Medicaid.
BACKGROUND
By letter dated October 6, 1988, the I.G. notified the Petitioner that, as
a result of her conviction of a
criminal offense related to the delivery of an item or service under Medicaid,
she would be excluded from
participation in Medicare and Medicaid for a mandatory five year period, commencing
20 days from the
date of the Notice. The I.G.'s basis for the exclusion here was the Petitioner's
guilty plea and her
conviction in the Circuit Court of Fayette County, West Virginia, of a criminal
offense related to the
delivery of an item or service under Medicaid.
On October 18, 1988, the Petitioner and Petitioner Wheeler timely filed a joint
request for hearing on the
I.G.'s determination. I held a prehearing telephone conference call on December
7, 1988, at which I
determined that the issues raised by the Petitioner's hearing request were primarily
legal issues, which
coul
be further developed by the parties in written briefing. As reflected in the
December 9, 1988 Prehearing
Order and Notice of Hearing Schedule, I stated that, if it was determined later
that an evidentiary hearing
was needed, I would contact the parties to schedule such a proceeding.
EVIDENCE
The material facts in this case are stipulated to and evidenced by State court
documents pertaining to the
guilty pleas of the Petitioner and her son: the indictments against the Petitioner
Wheeler in Fayette County
and Mercer County (I.G. Exs. 1 and 3, respectively); the indictment against
Petitioner in Fayette County
(I.G. Ex. 2); the transcript of the Petitioner's plea, along with Petitioner
Wheeler's plea, in Fayette County
(P.Ex. A-1); and the signed plea agreement of both Petitioners for the charges
in both counties. (P. Ex. A-
2). See also, Tape, containing the parties' stipulation to the authenticity
of all exhibits.
The Petitioner acknowledges that she pleaded guilty in State court to a misdemeanor
of "falsifying
accounts by falsely certifying Medicaid cost reports" under State law,
under "an Alford plea arrangement,"
which the Petitioner's counsel described as "equivalent to a nolo contendere
plea." P. Br.1.
ISSUES
1. Whether the Petitioner is subject to the minimum mandatory five-year exclusion
provision of section
1128(c)(3)(B) of the Act.
2. Whether the Petitioner was "convicted" of a criminal offense within
the meaning of sections 1128(a)(1)
and (i) of the Act.
3. Whether the Petitioner was convicted of a criminal offense "related
to the delivery of an item or
service" under the Medicaid program within the meaning of section 1128(a)(1)
of the Act.
4. Whether the I.G. failed to comply with the federal Administrative Procedure
Act, by (1) not publishing
regulations to implement the distinction between the mandatory and permissive
exclusion authorities, and
(2) relying upon unpublished guidelines/directives in implementing the Act.
5. Whether the I.G. was prohibited by provisions of federal law (regarding program
operating
responsibilities) from excluding the Petitioner.
6. Whether there is a need for an evidentiary hearing in this case.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and submissions of the parties,
and being fully advised
herein, I make the following Findings of Fact and Conclusions of Law:
1. The Petitioner is a resident of the State of West Virginia, and was an officer
of incorporated nursing
homes in the State. I.G.Ex. 2.
2. On March 2, 1987, a bill of indictment was returned in Fayette County, West
Virginia against the
Petitioner, charging her with two counts of "falsifying accounts"
in submission of Medicaid cost reports to
the State Department of Welfare. I.G.Ex. 2.
3. On December 15, 1987, the Petitioner entered into a Plea Agreement whereby
she agreed to plead guilty
in Fayette County, West Virginia to one count of "attempting to commit
the offense of falsifying
documents," a misdemeanor. P.Ex. A-2.
4. On February 16, 1988, the Fayette County Circuit Court accepted the Petitioner's plea. P.Ex. A-1.
5. The Petitioner informed the Fayette County Circuit Court that her guilty
plea was taken pursuant to
Kennedy v. Frazier, 357 S.E.2d 43 (W.Va. 1987) and North Carolina v. Alford,
400 U.S. 25 (1970). P.Ex.
A-1/5.
6. At the time the Petitioner entered her guilty plea, she was advised that
the guilty plea would result in a
judgment of guilt. P.Ex. A-1/25.
7. The offense to which the Petitioner pleaded guilty in Fayette County, West
Virginia, is a criminal
offense related to the delivery of an item or service under the Medicaid program
within the meaning of
section 1128(a)(1) of the Act.
8. The Petitioner's guilty plea was entered knowingly and voluntarily. P.Ex.A-1/16, 20.
9. The Petitioner was convicted of a criminal offense within the meaning of
sections 1128(a)(1) and
1128(i) of the Act.
10. The Petitioner was convicted of a criminal offense "related to the
delivery of an item or service" under
Medicaid, within the meaning of section 1128(a)(1) of the Act.
11. In accordance with section 1128 of the Act, the Petitioner was properly
excluded from participation in
Medicare and Medicaid for a period of five years.
12. The I.G. did not violate the federal Administrative Procedure Act, 5 U.S.C.
551 et seq., by not
promulgating regulations to distinguish the exclusion authorities in section
1128(a)(1) and 1128(b)(1) of
the Act.
13. The I.G. did not rely upon an "unpublished guidance/directive"
in classifying the Petitioner as subject
to the mandatory exclusion authority of section 1128(a)(1) of the Act.
14. The material and relevant facts in this case are not contested.
15. The classification of the Petitioner's conviction of a criminal offense
as subject to the authority of
section 1128(a)(1) is a legal issue.
16. There is no need for an evidentiary hearing in this case.
17. The I.G. is not prohibited by federal law or regulations from participation in the exclusion process.
18. The I.G. is entitled to summary disposition in this proceeding.
DISCUSSION
Section 1128(a)(1) of the Act clearly requires the I.G. to exclude individuals
and entities from the
Medicare program, and to direct their exclusion from the Medicaid program, for
a minimum period of five
years, when such individuals and entities have been "convicted" of
a criminal offense "related to the
delivery of an item or service" under the Medicare or Medicaid programs
within the meaning of section
1128(a)(1) of the Act.
For the reasons expressed in my Decision and Order in the case of Charles W.
Wheeler, Petitioner, v. The
Inspector
General, Docket No. C-61, decided June 8, 1989, I hereby adopt the reasoning
set forth therein as being
equally applicable to this Petitioner.
CONCLUSION
Based on the law and undisputed material facts in the record of this case,
I conclude that the I.G. properly
excluded the Petitioner from the Medicare program, and directed her exclusion
from State health care
programs, for the minimum mandatory period of five years.
IT IS SO ORDERED.
__________________________
Charles E. Stratton
Administrative Law Judg
Addressees:
RETURN RECEIPT REQUESTED
Kenneth J. Haber, Esquire
24 Gold Kettle Court
Gaithersburg, Maryland 20878
and
Javier Arrastia, Esquire
Anna Belle Loeb, Esquire
Assistant Regional Counsels
DHHS -- Region III
3535 Market Street, Room 9100
P.O. Box 13716
Philadelphia, Pennsylvania 19101
cc: Office of Inspector General Office of Investigations
Room 3-C-1, Meadows East Building
Baltimore, Maryland 21207
Robert Cavanaugh
Regional Inspector General
Office of Investigations
P.O. Box 8049
Philadelphia, Pennsylvania 19101