Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Charles K. Angelo, Jr., M.D., Petitioner,
- v. -
The Inspector General.
DATE: October 20, 1993
Docket No. C-92-130
Decision No. CR290
DECISION
On May 12, 1992, the Inspector General (I.G.) notified Petitioner, Charles
K. Angelo, Jr., M.D., that he
was being excluded from participation in the Medicare and State health care
programs. 1/ The I.G.
informed Petitioner that he was being excluded from participation in Medicare
pursuant to section 1892 of
the Social Security Act (Act). The I.G. informed Petitioner that he was being
excluded also from
participation in Medicaid pursuant to section 1128(b)(14) of the Act. The I.G.
further informed Petitioner
that he was being excluded because he had failed to repay his Health Education
Assistance Loans (HEALs)
or to enter into an agreement to repay the loans. The I.G. advised Petitioner
that he would be excluded
until his debt had been satisfied completely.
Petitioner requested a hearing, and the case was assigned to me for a hearing
and decision. Petitioner then
requested that the proceeding be stayed while he pursued attempts to resolve
his indebtedness. The I.G.
did not object to a stay, and I stayed the proceeding. Subsequently, Petitioner
requested that the case be
heard and decided.
I provided the I.G. with the opportunity to file a motion for summary disposition
in this case. The I.G.
filed a motion for summary disposition. Petitioner opposed the motion.
I have carefully considered the I.G.'s motion, the undisputed material facts
of this case, and Petitioner's
opposition to the motion. I conclude that I lack authority to adjudicate the
I.G.'s exclusion of Petitioner
from participating in Medicare, which the I.G. imposed pursuant to section 1892
of the Act. I conclude
further that the I.G. had authority pursuant to section 1128(b)(14) of the Act
to exclude Petitioner from
participating in Medicaid. Finally, I conclude that the term of the exclusion
imposed pursuant to section
1128(b)(14) is reasonable based on the I.G.'s representation to me that, under
the exclusion imposed
pursuant to section 1128(b)(14), Petitioner will be eligible to apply for reinstatement
to Medicaid at such
time as the Public Health Service (PHS) notifies the I.G. that either Petitioner's
HEAL default is cured or
that Petitioner's indebtedness has been resolved to PHS' satisfaction. I.G.'s
Motion for Summary
Disposition, p. 12; 42 C.F.R. 1001.1501(b).
ISSUES
The issues in this case are whether:
1. I have authority to adjudicate the exclusion from Medicare which the I.G.
imposed pursuant to
section 1892 of the Act.
2. The I.G. had authority to exclude Petitioner from participation in Medicaid
pursuant to section
1128(b)(14) of the Act.
3. The term of the exclusion imposed pursuant to section 1128(b)(14) of the Act is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. On November 22, 1983, Petitioner applied for a HEAL to enable him to pursue
his education as a
physician. I.G. Ex. 2, p. 1. 2/
2. On January 26, 1984, Petitioner received approval for a HEAL in the amount
of $4,630. I.G. Ex. 2, p.
1.
3. On August 1, 1984, Petitioner applied for a second HEAL. I.G. Ex. 2, p. 3.
4. On August 30, 1984, Petitioner received approval for a HEAL in the amount
of $11,098. I.G. Ex. 2, p.
3.
5. In promising to repay the HEALs, Petitioner agreed to make payments beginning
on the first day of the
tenth month after he ceased being a full-time student at a HEAL-recognized school,
or an intern or resident
in an approved program. I.G. Ex. 3, p. 1; I.G. Ex. 4, p. 1.
6. In promising to repay the HEALs, Petitioner agreed that he would be required
to repay them in not less
than 10 years, or more than 25 years, and that he would make annual payments
of at least the annual
interest on the unpaid balance of the HEALs. I.G. Ex. 3, p. 1; I.G. Ex. 4, p.
1.
7. In promising to repay the HEALs, Petitioner agreed that, in the event of
his default, the entire unpaid
amounts of the loans, including interest due and accrued, would, at the option
of the holder, become
immediately due and payable. I.G. Ex. 3, p. 1; I.G. Ex. 4, p. 1.
8. Petitioner was granted a deferment until August 1986 from his obligation
to repay the HEALs. I.G. Ex.
5.
9. On November 7, 1985, the Student Loan Marketing Association (SLMA) issued
a repayment schedule
to Petitioner. I.G. Ex. 6.
10. Petitioner failed to repay the HEALs. I.G. Ex. 7; Memorandum in Support
of Opposition of Petitioner,
Charles K. Angelo, Jr., M.D. to Inspector General's Motion for Summary Disposition
(Petitioner's
Memorandum), p. 2.
11. On June 18, 1988, SLMA advised Petitioner that, if he did not repay the
HEALs by July 18, 1988, his
account would be filed as a default claim. I.G. Ex. 7.
12. On August 5, 1988, SLMA filed a claim with PHS, based on Petitioner's failure
to repay his HEALs.
I.G. Ex. 8.
13. On August 31, 1988, PHS agreed to pay SLMA the amount of $24,284, for unpaid
principal and
interest on Petitioner's HEALs. I.G. Ex. 9, p. 2; see I.G. Ex. 8, p. 3.
14. On September 26, 1988, Skyline Credit Corporation notified Petitioner that
it had been authorized by
the United States Government to collect the unpaid interest and principal on
Petitioner's HEALs, and it
demanded that Petitioner repay the loans. I.G. Ex. 10, pp. 1 - 2.
15. Skyline Credit Corporation sent to Petitioner additional demands for repayment
on November 15,
1988, December 16, 1988, January 26, 1989, and April 12, 1989. I.G. Ex. 10,
pp. 3 - 7.
16. Petitioner did not respond to the repayment demands. See Finding 15.
17. On September 8, 1989, PHS notified Petitioner that it intended to refer
his debt to the Internal Revenue
Service for collection under provisions of the Deficit Reduction Act of 1984.
I.G. Ex. 11.
18. PHS advised Petitioner that his repayment of his indebtedness would terminate
debt collection action.
I.G. Ex. 11, p. 2.
19. On January 23, 1990, September 21, 1990 and September 26, 1990, PHS notified
Petitioner that he
would be afforded the opportunity to enter into a debt repayment agreement with
the Department of Health
and Human Services. I.G. Ex. 12, pp. 1 - 3.
20. Petitioner did not respond to these notices. See Finding 19.
21. On September 27, 1990, PHS again notified Petitioner that it intended to
refer his debt to the Internal
Revenue Service for collection. I.G. Ex. 13.
22. On November 26, 1990, Petitioner entered into a repayment agreement with
PHS, in which he agreed
to repay his indebtedness with monthly payments of $350. I.G. Ex. 16.
23. Petitioner defaulted on the repayment agreement after making four payments
of $350 to PHS. I.G. Ex.
17; I.G. Ex. 18; Petitioner's Memorandum, p. 2.
24. On December 10, 1991, PHS sent Petitioner an offer to resolve his debt
by offsetting against the debt
claims made by Petitioner for reimbursement for Medicare and Medicaid items
or services provided by
Petitioner. I.G. Ex. 19.
25. PHS sent the offer to Petitioner at his home address of 715 Majestic Place,
New Orleans, Louisiana.
I.G. Ex. 14, p. 3; I.G. Ex. 16, p. 1; I.G. Ex. 19.
26. Petitioner did not agree to enter into a Medicare and Medicaid reimbursement
offset agreement with
PHS. See Finding 25.
27. On July 16, 1992, a suit was filed against Petitioner in the United States
District Court for the Eastern
District of Louisiana to collect the outstanding indebtedness on Petitioner's
HEALs. I.G. Ex. 20.
28. On May 12, 1992, the I.G. excluded Petitioner from participating in Medicare
and directed that he be
excluded from participating in Medicaid.
29. As of May 12, 1992, Petitioner had not repaid his HEAL debt, nor had he
honored an agreement with
PHS to repay his HEAL debt. Findings 1 - 27.
30. The I.G. excluded Petitioner from participating in Medicare pursuant to
section 1892 of the Act.
Social Security Act, section 1892.
31. The I.G. excluded Petitioner from participating in Medicaid pursuant to
section 1128(b)(14) of the Act.
Social Security Act, section 1128(b)(14).
32. The Secretary of the United States Department of Health and Human Services
(Secretary) has not
delegated to administrative law judges of the Departmental Appeals Board (DAB)
the authority to hear and
decide requests for hearings concerning exclusions imposed pursuant to section
1892 of the Act.
33. I do not have authority to hear and decide Petitioner's request for a hearing
concerning his exclusion
from participating in Medicare which the I.G. imposed pursuant to section 1892
of the Act. Finding 32.
34. Petitioner's HEAL debt is an indebtedness on loans in connection with health
professions education
which have been secured by the Secretary. Findings 1 - 27; Social Security Act,
section 1128(b)(14).
35. The Secretary's duty to take all reasonable steps available to collect
Petitioner's debt prior to excluding
Petitioner under section 1128(b)(14) of the Act does not require the Secretary
to serve Petitioner with an
offer to resolve his debt by offsetting against his debt claims for reimbursement
for Medicare and Medicaid
items or services provided by Petitioner. Social Security Act, section 1128(b)(14);
see Social Security Act,
section 1892; 42 C.F.R. 1001.1501(a)(2).
36. PHS offered to resolve Petitioner's debt when it mailed to Petitioner's
home address a proposal to
offset against his debt claims for reimbursement for Medicare and Medicaid items
or services provided by
Petitioner. 42 C.F.R. 1001.1501(a)(2); Social Security Act, section 1128(b)(14).
37. The Secretary has taken all reasonable steps available to her to secure
repayment from Petitioner of his
HEAL debt. Findings 13 - 27, 34 - 36.
38. The Secretary delegated to the I.G. the authority to determine, impose,
and direct exclusions pursuant
to section 1128 of the Act. 48 Fed. Reg. 21,662 (1983).
39. The I.G. had authority to impose and direct an exclusion pursuant to section
1128(b)(14) of the Act.
Findings 1 - 38.
40. An exclusion imposed pursuant to section 1128(b)(14) of the Act is reasonable
if the excluded party is
excluded until such time as PHS notifies the I.G. that the default has been
cured or the debt has been
resolved to PHS' satisfaction. 42 C.F.R. 1001.1501(b).
41. The exclusion imposed against Petitioner pursuant to section 1128(b)(14)
of the Act was intended by
the I.G. to exclude Petitioner until such time as PHS notifies the I.G. that
Petitioner's default of his HEAL
debt has been cured or that his HEAL debt has been resolved to PHS' satisfaction.
I.G.'s Motion for
Summary Disposition, p. 12.
42. The exclusion which the I.G. imposed against Petitioner pursuant to section
1128(b)(14) of the Act is
reasonable. Findings 1 - 41.
ANALYSIS
The parties to this case do not disagree that Petitioner applied for and received
two HEALs to pursue his
education in medicine. Nor do they disagree that Petitioner defaulted on his
HEALs and, subsequently,
defaulted on a repayment agreement which he entered into with PHS. Petitioner
contends, however, that,
notwithstanding these undisputed material facts, the I.G. is without authority
to exclude him under section
1128(b)(14) of the Act. He asserts that the I.G. has not shown that all reasonable
efforts were made to
collect Petitioner's debts prior to excluding him.
1. I do not have authority to decide whether the I.G. can exclude Petitioner
under section 1892 of
the Act, or to decide whether an exclusion imposed under section 1892 is reasonable.
The exclusions imposed by the I.G. include an exclusion imposed under section
1892 of the Act, affecting
Petitioner's participation in the Medicare program. A threshold issue in this
case is whether I have
jurisdiction to decide whether the I.G. has the authority to impose this exclusion.
I conclude that the
authority delegated to me by the Secretary to hear and decide cases does not
include exclusions imposed
pursuant to section 1892. 3/ Therefore, I make no findings as to whether the
I.G. has authority to impose
an exclusion under section 1892 or whether the exclusion which the I.G. imposed
pursuant to that section is
reasonable.
I previously considered and decided this issue in James F. Cleary, D.D.S.,
DAB CR252 (1993). Petitioner
has not asserted here that my decision in that case was incorrect, nor does
he argue that I have the
delegated authority to consider issues concerning the exclusion imposed pursuant
to section 1892.
Section 1892(a)(1)(A) of the Act directs the Secretary to enter into a repayment
agreement with any
individual who, by reason of a breach of contract entered into with entities
including the HEAL program,
owes a past-due obligation to the United States. Section 1892(a)(3)(B) of the
Act provides that if such an
individual refuses to enter into a repayment agreement or breaches any provision
of a repayment
agreement, the Secretary shall immediately exclude such individual from participating
in Medicare.
I cannot hear cases involving exclusions imposed under section 1892 absent
either delegated authority to
hear such cases or an agreement by the parties to be bound by my decision. I
am unaware of any
delegation of authority by the Secretary to the DAB or to administrative law
judges to provide hearings to
individuals excluded pursuant to section 1892. Neither party to this case has
contended that such
delegations have been made.
2. The I.G. has authority under section 1128(b)(14) of the Act to exclude
Petitioner from
participating in Medicare and Medicaid.
The I.G. excluded Petitioner from participating in Medicaid pursuant to section
1128(b)(14) of the Act.
That section is part of a section of the Act which provides for administrative
hearings for parties who are
dissatisfied with exclusion determinations. The DAB has been delegated authority
to hear and decide cases
involving hearing requests challenging exclusions made pursuant to section 1128
of the Act and this
delegation includes exclusions made pursuant to section 1128(b)(14). Therefore,
I have authority to hear
and decide Petitioner's request concerning his exclusion from Medicaid under
section 1128(b)(14).
Section 1128(b)(14) of the Act provides that the Secretary (or her delegate,
the I.G.) may exclude a party
from participating in Medicare and Medicaid who:
is in default on repayments of scholarship obligations or loans in connection
with health professions
education made or secured, in whole or in part, by the Secretary and with respect
to whom the Secretary
has taken all reasonable steps available to the Secretary to secure repayment
of such obligations or loans, . .
.
The I.G.'s motion for summary disposition assumes that the exclusion imposed
pursuant to section
1128(b)(14) applies both to Petitioner's participation in Medicare and in Medicaid.
In fact, although
section 1128(b)(14) permits the Secretary (or her delegate, the I.G.) to impose
exclusions from
participating in Medicare or Medicaid, assuming that the requisite authority
to exclude exists, the exclusion
which was imposed here under section 1128(b)(14) applies only to Petitioner's
participation in Medicaid.
The notice letter which the I.G. sent to Petitioner advising him of his exclusion
states:
This letter is to notify you that, according to the authority delegated to
the Inspector General by the
Secretary of DHHS, you are being excluded from participation in the Medicare
program, pursuant to
section 1892 of the Social Security Act (Act) (42 U.S.C. 1395cc). In addition,
pursuant to the authority
contained in section 1128(b)(14) of the Act, you are also being excluded from
participation in the Medicaid
and State health care programs as defined in section 1128(h) of the Act.
(Emphasis added). Thus, although the I.G. could have excluded Petitioner from
participating in Medicare
and Medicaid pursuant to section 1128(b)(14), the I.G. elected only to exclude
him from participating in
Medicaid pursuant to that section. The I.G. did not move to amend the notice
to Petitioner. I conclude that
the notice must be construed to mean what it plainly says. Therefore, I find
that the I.G. excluded
Petitioner only from participating in Medicaid pursuant to section 1128(b)(14)
of the Act.
There is no dispute in this case that Petitioner's HEAL debt arises from loans
made "in connection with
health professions education." Nor is there any dispute that Petitioner
defaulted on repayment of his HEAL
debt. Therefore, I must find that the I.G. had authority to exclude Petitioner
under section 1128(b)(14) if I
conclude that the Secretary took "all reasonable steps available"
to secure repayment from Petitioner of his
HEAL debt. 4/
The record of this case is replete with efforts agencies operating on behalf
of the Secretary made to obtain
repayment from Petitioner of his HEAL debt. Those efforts included sending numerous
notices to
Petitioner, entering into a debt repayment agreement with Petitioner, and sending
a proposal to Petitioner to
offset his debt with reimbursement for Medicare and Medicaid items or services
provided by Petitioner.
When all else failed, the Secretary referred Petitioner's debt to the Department
of Justice for
commencement of a lawsuit against Petitioner in federal court.
Petitioner asserts that these efforts do not constitute "all reasonable
steps available." He argues that, as an
absolute prerequisite to imposing an exclusion, the Secretary had to serve him
with an offer to offset his
debt with reimbursement for Medicare and Medicaid items or services provided
by Petitioner. He does not
dispute that such an offer was mailed to him. He asserts, however, that he never
received the offer, and
therefore, was never served with it in accordance with the requirements of the
Act and regulations.
Inasmuch as this is a case in which the I.G. has moved for summary disposition,
and Petitioner has denied
receiving the proposal, I must assume for the purpose of deciding the motion
that Petitioner did not receive
the proposed offset agreement.
In this case, the undisputed material facts establish that the Secretary took
all reasonable steps to collect
Petitioner's HEAL debt prior to excluding him. First, I do not agree with Petitioner's
argument that, as a
prerequisite to imposing an exclusion under section 1128(b)(14), the Secretary
must tender to a debtor an
offer to enter into a Medicare and Medicaid reimbursement offset agreement.
While the making of such an
offer is conclusive evidence that the Secretary has taken all reasonable steps
short of exclusion to collect
the debt, it is not a necessary condition for finding that the Secretary has
taken all reasonable steps. I find
further that the Secretary's efforts to collect Petitioner's debt meet the statutory
requirement that all
reasonable steps short of exclusion be taken, without considering the issue
of whether PHS made an offset
agreement offer to Petitioner.
Second, I conclude that, in this case, PHS in fact made an offset agreement
offer to Petitioner. PHS made
that offer when it mailed it to Petitioner at the address which Petitioner provided
to PHS as his home
address. Accepting as true Petitioner's contention that he never received the
offer, I find that PHS had no
duty to assure that Petitioner was actually served with the offer. Thus, the
Secretary did that which was
necessary to establish conclusively that all reasonable efforts were made to
collect the debt from Petitioner,
as prescribed by 42 C.F.R. 1001.1501(a)(2).
The intent of Congress in enacting section 1128(b)(14) was in part to provide
the Secretary with a
mechanism by which she could assert some leverage over parties who default on
their HEAL debts. 5/ In
assuming Petitioner's HEAL debt, the Secretary acquired the right -- and the
obligation -- to collect on that
debt. Section 1128(b)(14) is a debt collection tool, among other things. The
term "all reasonable steps
available" means all reasonable and legitimate means of debt collection.
In attempting to collect a debt, the
Secretary must be "reasonable" only in the sense that she should not
insist on repayment arrangements or
resort to collection actions that are palpably unfair.
There is no language in section 1128(b)(14) which requires the Secretary to
offer a Medicare and Medicaid
reimbursement offset agreement to a party as a necessary element of the "all
reasonable steps available" to
the Secretary. Section 1128(b)(14) cannot be construed as a debtors' rights
statute which gives debtors
absolute rights to enter into offset agreements. 6/ Certainly, there may be
circumstances where offering an
offset agreement to a debtor might be a reasonable step. On the other hand,
there are circumstances where
such an offer is not required.
The regulations do not require the offer of a Medicare and Medicaid reimbursement
offset agreement as a
prerequisite to imposing an exclusion. The relevant regulation, 42 C.F.R. 1001.1501(a)(2),
states that the
Secretary will be deemed to have taken all reasonable steps to collect a debt
if she offers a debtor a
Medicare and Medicaid reimbursement offset agreement prior to imposing an exclusion.
The regulation
provides that the making of such an offer is conclusive proof that all reasonable
steps have been taken by
the Secretary. However, the regulation does not state that the Secretary must
make an offer of an offset
agreement as a necessary element of "all reasonable steps."
The facts of this case are that PHS, acting on the Secretary's behalf, made
numerous demands of Petitioner
that he repay his HEAL debt. Petitioner knew that he was in default of his loans,
and he knew also that
PHS was demanding that he repay his debt. After making numerous attempts to
collect the debt, PHS
entered into a repayment agreement with Petitioner. Petitioner then defaulted
on that agreement, as well as
on the underlying debt. I conclude that at the point that Petitioner defaulted
on the repayment agreement,
the Secretary had taken "all reasonable steps" to collect Petitioner's
debt. The Secretary had been
eminently fair to Petitioner. She had provided him with many opportunities to
repay his debt. She had
entered into a repayment agreement with Petitioner which took into account Petitioner's
income, his
resources, and his other obligations. She could have inferred, reasonably, from
Petitioner's default of his
repayment agreement that Petitioner was unlikely to repay his debt voluntarily.
The I.G. was, therefore,
authorized to exclude Petitioner at the moment Petitioner defaulted on the repayment
agreement.
However, the record of this case demonstrates that the Secretary did even more
to attempt to obtain
Petitioner's voluntary repayment of his debt. Although the Secretary and her
agents are not required under
section 1128(b)(14) to tender a proposed Medicare and Medicaid reimbursement
offset agreement to
defaulting debtors prior to excluding them, the undisputed facts of this case
establish that PHS tendered
such an agreement to Petitioner. On December 10, 1991, PHS mailed a proposal
to Petitioner at his home
address offering to offset Petitioner's debt with Medicare and Medicaid reimbursement
for items or services
provided by Petitioner. Findings 24 - 25.
The proposed offset agreement was "offered" within the meaning of
42 C.F.R. 1001.1501(a)(2) when
PHS mailed it to Petitioner's home address. The regulation does not prescribe
the manner in which
proposed offset agreements must be offered. I conclude that the regulation does
not impose a service
requirement on PHS. It is plainly within the spirit of the regulation and the
purpose of section 1128(b)(14)
that PHS be permitted to communicate offers of offset agreements by regular
mail, relying on debtors'
statements of their home addresses as the mailing destinations for such offers.
Neither the regulation or the
Act suggests that PHS has the additional duty of assuring that such offers are
received and reviewed by
debtors.
As I held above, section 1128(b)(14) is not a debtors' rights statute. The
Secretary's obligation to take
reasonable steps to collect debts -- if in fact, it includes an obligation to
propose offset agreements -- does
not go beyond taking reasonable steps to communicate such offers to debtors.
Reasonable communication
includes mailing such offers to debtors at the addresses which debtors provide
as their home addresses.
The possibility that some mailings may not be received imposes no additional
obligations on PHS or the
Secretary.
In Louis W. DeInnocentes, Jr., M.D., DAB CR247 (1992), I held that, under section
1156 of the Act, a
peer review organization discharged its duty to give notice to a provider under
review by mailing the notice
to the provider at the provider's home address. I concluded that the peer review
organization had no
responsibility to assure that the provider received and read the notice. In
that decision, I analogized the
peer review organization's responsibility to that of a party providing notice
pursuant to Rule 5(b) of the
Federal Rules of Civil Procedure. DeInnocentes, p. 38.
The present situation is not identical to that which I addressed in DeInnocentes,
but it is analogous. Unlike
the present case, the regulations at issue in DeInnocentes, 42 C.F.R. 1004.40
and 1004.50, specifically
require peer review organizations to provide notice to affected providers. Here,
the regulation is silent as
to the manner by which the Secretary should notify debtors of proposed offset
agreements. However, as in
DeInnocentes, the section of the Act which is at issue here is a section which
is designed to enable the
Secretary to take remedial action to protect federally funded health care programs.
As with section 1156,
Congress intended section 1128(b)(14) to ensure that the remedy imposed by the
Secretary not be imposed
without providing due process to affected providers. Under the regulations which
govern the application of
section 1156, due process requires sending notices to affected providers. The
regulation at issue here, to
the extent that it requires the Secretary to provide debtors with an opportunity
to enter into offset
agreements, implicitly requires also that some reasonable notice be sent to
debtors. But, in both instances,
in setting the balance between protecting programs and protecting the interests
of affected providers,
Congress opted to establish a notice standard which would not impede the Secretary
in the discharge of her
duties to protect the programs.
As with the notice requirement under section 1156, the duty to communicate
an offer of an offset
agreement under section 1128(b)(14) -- assuming, arguendo, that such duty exists
-- is limited to providing
reasonable notice of such an offer. PHS communicates an offer of an offset agreement
to a debtor by
sending the debtor notice of that offer through regular mail to the address
which the debtor provides to
PHS as his or her home address. If such communication is made, then the Secretary
will be deemed to
have taken all reasonable steps to collect the debt pursuant to 42 C.F.R. 1001.1501(a)(2).
It is irrelevant
whether the debtor actually receives the proposal.
I premise this analysis on my conclusion that the paramount purpose of section
1128(b)(14) is to provide
the Secretary with a tool by which to collect a debt once voluntary persuasion
has failed. It would frustrate
the purpose of the Act and jeopardize the integrity of federally funded programs
if clever or lucky debtors
were able to avoid their obligations. Yet that is precisely the result which
would occur were I to construe
the Act or regulations to require actual service on debtors of offset offers,
as is advocated by Petitioner.
Petitioner asserts additionally that the document which contains the offset
agreement proposal does not
state the proposal clearly. In fact, the proposal to enter into an offset agreement
is clear and explicit, and
not in the least ambiguous. The notice which was sent to Petitioner provides:
An alternative is to establish an offset agreement with this office to have
your Medicare and/or
Medicaid reimbursements directly forwarded to this office and applied to your
account. If you elect to do
this, please provide this office with your provider number, place of employment,
present carrier, proposed
offset amount, and a signed statement authorizing us to commence offset procedures.
I.G. Ex. 19.
3. The exclusion which the I.G. imposed under section 1128(b)(14) of the Act is reasonable.
The notice of exclusion which the I.G. sent to Petitioner advised him that
he would be excluded, both
under sections 1128(b)(14) and 1892 of the Act, until his HEAL debt had been
completely satisfied.
However, the I.G. now avers that the intent is that the exclusion imposed under
section 1128(b)(14) will be
effective until PHS notifies the I.G. that Petitioner's default has been cured
or that Petitioner's debt has been
resolved to PHS' satisfaction. I.G.'s Motion for Summary Disposition, p. 12.
The I.G.'s clarification of the term of the exclusion is consistent with the
requirements of 42 C.F.R.
1001.1501(b). I therefore find that the exclusion which the I.G. imposed under
section 1128(b)(14) is
reasonable, and I sustain it. Furthermore, the exclusion is on its face reasonable
because it enables
Petitioner to negotiate an agreement with PHS to repay his HEAL debt. 7/
CONCLUSION
I conclude that the I.G. had authority to exclude Petitioner from participating
in Medicaid under section
1128(b)(14) of the Act. I conclude further that the exclusion which the I.G.
imposed under section
1128(b)(14) is reasonable. I make no findings o
conclusions as to whether the I.G. had the authority to exclude Petitioner
pursuant to section 1892, or
whether the exclusion which the I.G. imposed under section 1892 is reasonable.
_________________________________
Steven T. Kessel
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three
types of federally financed health care programs, including Medicaid. Unless
the context indicates
otherwise, I use the term "Medicaid" hereafter to represent all State
health care programs from which
Petitioner was excluded.
2. I hereby admit the I.G.'s Exhibits 1 - 22 into evidence. I hereby admit
Petitioner's Exhibits 1 and 2
into evidence. I refer to the I.G.'s Exhibits as "I.G. Ex."
3. Section 1892 of the Act does not, on its face, provide for administrative hearings.
4. Section 1128(b)(14) provides that the Secretary shall not exclude a physician who is:
the sole community physician or sole source of essential specialized services
in a community if a State
requests that the physician not be excluded, and . . . the Secretary shall take
into account, in determining
whether to exclude any other physician pursuant to . . . [section 1128(b)(14)]
access of beneficiaries to
physician services for which payment may be made under . . . [Medicare or Medicaid].
Petitioner does not contend that he qualifies for the exception from exclusion
provided by this section. Nor
does Petitioner contend that the I.G. failed to take into account beneficiaries'
access to physician services in
determining whether to exclude him.
5. Another purpose of section 1128(b)(14) is to protect the integrity of federally
funded health care
programs from parties who demonstrate that they cannot be trusted to deal with
public funds.
6. Section 1128(b)(14) does not mention offset agreements. Arguably, an offer
by the Secretary to a
debtor of an offset agreement is a prerequisite to imposing an exclusion under
section 1892 of the Act. See
Social Security Act, sections 1892(1)(A), (2). However, section 1128(b)(14)
does not incorporate section
1892 either explicitly, or by reference.
7. Petitioner now avers that he is willing to enter into a Medicare and Medicaid
offset agreement as a
way of resolving his debt. I have no authority to direct either the I.G. or
PHS to accept a proposal from
Petitioner to resolve his debt. Furthermore, the fact that Petitioner may now
be willing to enter into a
settlement agreement does not detract from the I.G.'s authority to exclude him.