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: February 24, 1994
Docket No. C-94-023
Decision No. CR305
DECISION ON REMAND
Petitioner requested a hearing on a January 12, 1993 determination by the Inspector
General (I.G.) to
exclude him from participation in the Medicare and State health care programs
1/ for five years pursuant to
section 1128(a)(1) of the Social Security Act (Act). On August 12, 1993, I issued
a decision in which I
granted the I.G.'s motion for summary disposition and affirmed the I.G.'s determination
to exclude
Petitioner from participation in Medicare and Medicaid programs for five years.
Douglas L. Reece, D.O.,
DAB CR280 (1993). I found that the I.G. had the authority to exclude Petitioner
under section 1128(a)(1)
of the Act because the undisputed material facts established that he was convicted
of a criminal offense
related to the delivery of an item or service under the Medicaid program. I
further found that Petitioner is
subject to the federal minimum mandatory provisions of sections 1128(a)(1) and
1128(c)(3)(B) of the Act,
and that Petitioner's exclusion for five years is the minimum period mandated
by federal law. In addition, I
concluded that the five year exclusion did not violate the United States Constitution's
prohibition against
double jeopardy.
Petitioner appealed my decision to an appellate panel of the Departmental Appeals
Board (DAB). On
November 15, 1993, the appellate panel issued its decision. The appellate panel
affirmed my decision in
part and remanded it in part for further consideration.
The appellate panel noted that Petitioner raised three interrelated exceptions
to my decision. Petitioner
asserted that he had not been "convicted" as that term is defined
by section 1128(i) of the Act. Petitioner
disputed my findings that he had pled guilty in State court and that the State
court had accepted the plea
and determined that the evidence substantiated Petitioner's guilt. Additionally,
based on United States v.
Halper, 490 U.S. 435 (1989), Petitioner asserted that the five year exclusion
did not bear a rational
relationship to the goal of compensating the government for its loss and thus
violated the United States
Constitution's prohibition against double jeopardy. Finally, given these alleged
errors, Petitioner asserted
that I erred in granting the I.G.'s motion for summary disposition because there
existed questions of fact
which necessitated a hearing. Petitioner therefore argued that the Board should
either remand this case to
me for a hearing or reverse my decision based on the facts alleged by Petitioner.
Petitioner did not take
exception to my finding that the criminal offense in question was related to
the delivery of an item or
service under the Medicaid program.
The appellate panel agreed with my conclusion that Petitioner's five year exclusion
did not violate the
constitutional ban on double jeopardy. However, the appellate panel stated that
my decision was
ambiguous in its treatment of the issue of whether Petitioner was convicted.
The I.G. contended that Petitioner was convicted as that term is defined by
sections 1128(i)(2), (3), or (4)
of the Act. Petitioner disputed the I.G.'s contentions. The appellate panel
asserted that my decision
provided specific Findings of Fact and Conclusion of Law (FFCLs) only on the
issue of whether Petitioner
was convicted as defined by section 1128(i)(3) of the Act. The appellate panel
stated that, in focusing the
analysis in this manner, my decision was ambiguous regarding the additional
bases for exclusion offered
by the I.G. -- that Petitioner was convicted within the meaning of sections
1128(i)(2) and (4) of the Act.
The appellate panel stated that even with regard to my discussion on the applicability
of section 1128(i)(3)
of the Act, my analysis did not fully consider all the arguments before me.
The appellate panel remanded
this case to me so that I can clarify my decision concerning whether Petitioner
was convicted within the
meaning of section 1128(i)(2), (3), or (4).
The appellate panel concluded also that, in view of the need for additional
clarification of my decision, the
issue of whether summary disposition of this case was appropriate was not ripe
for the appellate panel's
consideration. The appellate panel reserved judgment on the issue of whether
summary disposition was
appropriate pending my decision on remand.
On remand, by letter dated November 17, 1993, I offered the parties the opportunity
to submit
supplemental briefs. Neither party filed a brief.
I have considered the issues before me on remand and I conclude that, based
on the undisputed material
facts in the record of this case, Petitioner was convicted of a criminal offense
within the meaning of
sections 1128(i)(2), (3), and (4) of the Act. As I found in my August 12, 1993
decision, the undisputed
material facts establish that the criminal offense which formed the basis of
Petitioner's conviction was
related to the delivery of an item or service under the Texas Medicaid Program
within the meaning of
section 1128(a)(1) of the Act. Petitioner is subject to the federal minimum
mandatory provisions of
sections 1128(a)(1) and 1128(c)(3)(B) of the Act, and his five year exclusion
is the minimum period
mandated by federal law. There are no genuine issues of material fact which
would require the submission
of evidence at an in-person hearing and the I.G. is entitled to summary disposition
in this proceeding.
ISSUES
The issues to be decided on remand are:
1. Whether Petitioner was convicted of a criminal offense within the meaning
of section 1128(i)(2) of the
Act.
2. Whether Petitioner was convicted of a criminal offense within the meaning
of section of 1128(i)(3) of
the Act.
3. Whether Petitioner was convicted of a criminal offense within the meaning
of section of 1128(i)(4) of
the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
My August 12, 1993 decision was based on 14 FFCLs set forth at pages 2 - 3
of the decision. I amend the
FFCLs I made in my August 12, 1993 decision to add the following new FFCLs:
15. The Texas court found that Petitioner was guilty of the offense charged
against him, Tampering with
Government Records. FFCL 7.
16. The court deferred entry of a formal adjudication of guilt. FFCL 8.
17. Petitioner participated in a deferred adjudication program where judgment
of conviction has been
withheld. FFCL 8, 16.
18. Petitioner was convicted within the meaning of section 1128(i)(2) of the Act. FFCL 15.
19. Petitioner was convicted within the meaning of section 1128(i)(4) of the Act. FFCL 17. 2/
DISCUSSION
The undisputed facts establish that, on June 14, 1990, a grand jury in Lubbock,
Texas, charged Petitioner
with the felony offense of Tampering with Government Records. FFCL 2. The grand
jury charged that, on
or about November 25, 1988, Petitioner intentionally and knowingly made a false
claim for reimbursement
by Medicaid for providing an "office visit" to an individual when,
in fact, Petitioner knew that the
individual had not had an office visit. FFCL 3. On May 5, 1992, Petitioner pled
guilty to the charge
contained in the indictment in the 237th District Court of Lubbock County, Texas.
FFCL 6. The 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."
FFCL 7. The court declared that the "best interest of society and the defendant"
would be served by
deferring further proceedings without entering an adjudication of guilt. FFCL
8. The court placed
Petitioner on probation for a period of ten years and ordered him to pay a fine
in the amount of $5000 and
to pay restitution and costs. FFCL 9.
Petitioner's exclusion was based on sections 1128(a)(1) of the Act. Section
1128(a)(1) of the Act mandates
exclusion from Medicare and Medicaid programs for any individual or entity "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) establishes that "[i]n the case of an exclusion under subsection
(a), the minimum period of
exclusion shall not be less than five years . . ."
The threshold question in every case under section 1128(a) is whether the individual
or entity was
convicted as that term is defined under the Act. Petitioner asserts that he
was not convicted of a criminal
offense. Therefore, according to Petitioner, there exists no authority for the
I.G. to impose and direct an
exclusion against him. This is a legal issue involving questions of interpretation
and application of law to
the undisputed material facts. Summary disposition is therefore an appropriate
mechanism for deciding
this issue. John W. Foderick, M.D., DAB CR43 (1989), aff'd DAB 1125 (1990).
The term "convicted" is defined at section 1128(i) of the Act. It
is clear from the statutory language at
section 1128(i) that Congress intended that its definition of conviction encompass
a wide range of
situations. Section 1128(i) establishes four alternative definitions of the
term "convicted." An individual
or entity need only be convicted under one of the four definitions in section
1128(i) to establish that the
individual or entity was convicted of a criminal offense within the meaning
of the Act. Pursuant to this
statutory section, an individual or entity is considered to have been convicted
of a criminal offense:
(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.
Petitioner contends that none of the four statutory definitions of convicted
apply to this case. The I.G.
contends that Petitioner was convicted within the meaning of three of the four
definitions: 1128(i)(2), (3),
and (4). The I.G. does not contend that Petitioner was convicted within the
meaning of section 1128(i)(1).
Thus, the parties dispute the issues of whether: (1) the court made a finding
of guilt against Petitioner
within the meaning of section 1128(i)(2); (2) the court accepted Petitioner's
guilty plea within the meaning
of section 1128(i)(3); and (3) the disposition of Petitioner's plea constitutes
a first offender, deferred
adjudication, or other arrangement or program where judgment of conviction has
been withheld within the
meaning of section 1128(i)(4).
Section 1128(i) defines conviction in the context of the federal exclusion
law. It is evident from the face of
the statute and its legislative history that a principal goal of the exclusion
law is to protect the integrity of
federally-funded health care programs and the welfare of the programs' beneficiaries
and recipients. The
exclusion law is intended to protect program funds and beneficiaries and recipients
from providers who
have demonstrated by their conduct that they pose a threat to the integrity
of such funds, or to the well-
being and safety of beneficiaries and recipients. See S. Rep. No. 109, 100th
Cong., 1st Sess. 1 (1987),
reprinted in 1987 U.S.C.C.A.N. 682. In light of the strong government interest
in ensuring that federally-
funded health programs and their beneficiaries and recipients be protected against
untrustworthy providers,
I conclude that Congress intends that the term "convicted" should
be broadly construed.
I will now discuss in turn the applicability to this case of the three alternative
definitions of the term
"convicted" which are in dispute in this case under sections 1128(i)(2),
(3), and (4) of the Act. Consistent
with the legislative goal to protect the Medicare and Medicaid programs from
untrustworthy providers, I
will give a broad reading to the language contained in section 1128(i), and
I will apply any exceptions to
section 1128(i) narrowly.
I. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(2) of the Act.
The record shows that Petitioner appeared before a State court judge and pled
guilty to the charge
contained in the indictment. I.G. Ex. 1. Petitioner further requested the consent
of the judge to waive his
right of a trial by jury, and the judge gave his consent for Petitioner to waive
his right of trial by jury. At
that point, the Order for Deferred Adjudication states that Petitioner:
proceeded to trial before the Court, who having heard and considered the pleadings
and evidence
offered, the Court finds that it substantiates [Petitioner's] guilt for the
offense charged against him to wit:
Tampering with Government Records . . . (Emphasis added.)
I.G. Ex. 1 at 1.
The language in this document is clear on its face. It states that after Petitioner
waived his right to trial
before a jury, he proceeded to trial before a judge. The judge considered the
pleadings and evidence and
explicitly made a finding that the evidence substantiated Petitioner's guilt
for the offense charged. Pursuant
to section 1128(i)(2), an individual or entity is considered to be convicted
of a criminal offense when
"there has been a finding of guilt against the individual or entity by
a Federal, State, or local court." The
language in the Order for Deferred Adjudication shows that a judge in a State
court considered the
evidence against Petitioner and specifically found that the evidence substantiated
his guilt. This falls
squarely within the definition of conviction at section 1128(i)(2).
Petitioner states that the State court disposed of Petitioner's criminal charge
under Article 42.12 of the
Texas Code of Criminal Procedure, Sec. 5(a). Petitioner's opposition to summary
judgment at 10. That
section provides in relevant part that:
the Court may, after receiving a plea of guilty or plea of nolo contendere,
hearing the evidence
and finding that it substantiates the Defendant's guilt, defer further proceedings
without entering an
adjudication of guilt, and place the Defendant on probation. (Emphasis added.)
Under this section, a judicial finding of guilt is a necessary condition that
must be met before a court can
defer further proceedings and place a Defendant on probation. In this case,
the court deferred further
proceedings and placed Petitioner on probation. Since the court indisputably
disposed of Petitioner's
criminal charge under this provision, Petitioner had to have been found guilty
for the court to defer further
proceedings and place him on probation. The court would not have had the authority
to defer further
proceedings and impose probation under this section without a finding of guilt
against Petitioner.
Support for this reasoning is found in the case Leon Brown, M.D., DAB CR83
(1990). In that case, Dr.
Brown was charged with Medicaid fraud. Pursuant to a plea agreement, Dr. Brown
agreed to have his case
submitted to court upon the statement of facts. The State court judge reviewed
the statement of facts and
specifically found that they were sufficient to find Dr. Brown guilty of the
charge. The State court judge
then stated that he decided to stay any finding of guilt against Dr. Brown and
the judge indicated that entry
of judgment had been stayed. Dr. Brown was then placed on probation and assessed
restitution.
Based on these facts, the administrative law judge found that there was a finding
of guilt against Petitioner
by a State court within the meaning of section 1128(i)(2) of the Act. The administrative
law judge
reasoned:
This is not an unreasonable conclusion in light of the fact that the state
court specifically stated
that the facts were sufficient to find Petitioner guilty, and would not have
had the authority to impose
probation or any other type of sanction against Petitioner without such a finding
of guilt.
Brown, DAB CR83, at 7. An appellate panel of the Departmental Appeals Board
reviewed this decision,
and agreed with the administrative law judge's reasoning. Leon Brown, DAB 1208
(1990).
Petitioner argues that the State court did not make a finding of guilt against
Petitioner within the meaning
of section 1128(i)(2) because the State court deferred further proceedings without
entering an adjudication
of guilt. The language of section 1128(i)(2) is plain an
without qualifying terms or conditions. Under that section, conviction is defined
to include the
circumstances where there has been a finding of guilt by a court. In this case,
the statutory definition of
finding of guilt was met when the State court, after reviewing the evidence
before it, found that the
evidence substantiated Petitioner's guilt. This finding of guilt precisely conforms
to the criteria of section
1128(i)(2). Thus, even though the record of the court proceedings show that
a finding of guilt in the sense
of an entry of a formal adjudication of guilt had been deferred, Petitioner
nevertheless had to have been
found guilty for the court to defer adjudication of guilt and impose probation.
II. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(3) of the Act.
In my August 12, 1993 decision I explicitly found that Petitioner was convicted
within the meaning of
section 1128(i)(2) of the Act. FFCL 11. In this decision on remand, I make the
same finding.
Under section 1128(i)(2), an individual or entity is convicted of a criminal
offense "when a plea of guilty
or nolo contendere by the individual or entity has been accepted by a Federal,
State or local court." The
event described by section 1128(i)(3) as constituting a conviction is the acceptance
of a plea. The term
"accept" is not specifically defined in section 1128(i)(3). However,
it is well settled law that a plea is
accepted within the meaning of section 1128(i)(3) whenever a party offers a
plea and a court consents to
receive it as an element of an arrangement to dispose of a pending criminal
matter. Robert W. Emfinger,
R.Ph., DAB CR92 (1990).
The facts in this case indicate clearly that the court consented to receive
Petitioner's plea as an element of
an arrangement to dispose of a criminal complaint against him. The records of
the criminal proceedings
before the State court show that Petitioner was charged with a criminal offense.
I.G. Ex. 2. Petitioner
appeared in open court and unambiguously admitted his guilt in order to dispose
of the criminal charges
against him. The court took care to determine that the proffered guilty plea
was acceptable as a basis for
disposing of the criminal charges. The court determined that the plea was voluntary
and informed. In
addition, the court considered the evidence related to the criminal charges
and made an affirmative
determination that there was a sufficient legal basis for the guilty plea. Once
the court determined that the
guilty plea was acceptable as a basis for disposing of the criminal charges,
the court placed Petitioner on
probation and ordered him to pay a fine plus restitution and costs. In addition,
the court deferred entering
an adjudication of guilt and ordered that, upon the successful completion of
Petitioner's probation,
Petitioner "shall be discharged and the proceeding against him shall be
dismissed." I.G. Ex. 1.
Petitioner contends that the Texas court did not "accept" the plea
of guilty, but instead deferred
adjudication of Petitioner's guilt. Petitioner contends that when he completed
probation the court could
enter a finding of not guilty and dismiss the charges against him. Additionally,
if he violated the terms of
probation, the prosecuting authorities have the burden of proceeding with an
adjudication of guilt. The
trial court has the discretion to hold further proceedings on the issue of guilt
before entering an
adjudication of guilt. Therefore, Petitioner argued that the I.G. had not provided
sufficient evidence to
show that he had been convicted of a criminal offense or to show that his plea
was a final conviction for
purposes of section 1128(a)(1) and 1128(i) of the Act. Citing Cole v. State,
757 S.W.2d 864 (Tex. Ct.
App. 1988) and McNew v. State, 608 S.W.2d 166 (Tex. Crim. App. 1978), Petitioner
states that Texas law
is clear in establishing the availability of further proceedings. Petitioner's
opposition to summary judgment
at 12 - 14; Petitioner's appellate brief at 7.
While it may be true, as Petitioner asserts, that, under Texas procedure, a
trial court has the discretion to
hold further proceedings on the issue of guilt before entering a formal adjudication
of guilt, the case law
cited by Petitioner shows that a probationer is not entitled to a hearing on
the issue of guilt if he violates the
terms of his probation. In McNew, the appellant argued that, under the Texas
deferred adjudication
procedure, a probationer who violates the terms of probation is entitled to
two separate hearings. First, a
hearing should be held limited solely to a determination by the trial court
of whether the court should
proceed to enter an adjudication of guilt, and then a second hearing should
be held in which guilt is
determined. The court in McNew stated that while Texas procedure requires a
hearing limited to a
determination of whether the trial court should proceed to enter an adjudication
of guilt, there is no
requirement to hold a second hearing to determine guilt. The court in McNew
reasoned that, since the
Texas deferred adjudication law:
requires that a trial judge hear evidence which "substantiates the defendant's
guilt" before
he can defer further proceedings without entering an adjudication of guilt,
we see no reason that once a
hearing is held on whether the trial judge should proceed with an adjudication
of guilt, the trial judge
cannot immediately continue with " . . . all proceedings, including assessment
of punishment,
pronouncement of sentence, granting of probation, and defendant's appeal . .
. as if the adjudication of guilt
had not been deferred."
608 S.W.2d at 173 - 174. Thus, under McNew, if a trial court determines that
a probationer has violated
the terms of his probation, the trial court may immediately proceed to enter
an adjudication of guilt and
impose punishment based on the guilty plea. The trial court is not required
to review the question of guilt.
Moreover, while the Texas court cases cited by Petitioner support the conclusion
that Petitioner was not
convicted under Texas law, they do not address the question of whether he was
convicted within the
meaning of the federal exclusion law. In McNew, the Texas Court of Criminal
Appeals held that, under
Texas law, a conviction "always involves an adjudication of guilt."
The Texas Court of Criminal Appeals
went on to say that, since the procedures under the Texas deferred adjudication
statute do not involve an
adjudication of guilt until after probation is revoked, "it is clear that
a trial judge's action in deferring the
proceedings without entering an adjudication of guilt is not a `conviction'."
608 S.W.2d at 172.
McNew states that an individual is not convicted within the meaning of Texas
law unless there is a formal
adjudication of guilt. If there were no definition of the term "convicted"
in the Act, then the issue of
whether a conviction exists for State law purposes would be relevant. However,
Congress has defined
what the term "convicted" means for purposes of section 1128 of the
Act. Section 1128 is a federal statute.
It defines what constitutes a conviction independently from the definitions
or interpretations applied by
states. It is not relevant that an action might not constitute a conviction
within the meaning of State law so
long as the action meets the federal definition of conviction.
Petitioner relies also on Cole v. State. In describing the factual background
of the case, the Texas Court of
Appeals stated that the trial court withheld judgment under the Texas deferred
adjudication statute and that
the trial court accepted the Defendant's guilty plea during a hearing on the
State's motion to proceed to
adjudication of guilt after Defendant violated his terms of probation. This
case supports the proposition
that, under Texas law, a guilty plea is not accepted until there is a formal
adjudication of guilt. That may
be so under Texas law, but it is not relevant. The issue before me is not whether
the Texas court accepted
Petitioner's guilty plea within the meaning of Texas law. Instead, the issue
before me is whether the Texas
court accepted the guilty plea within the meaning of section 1128(i)(3) of the
Act.
I disagree with Petitioner's contention that the Texas court's determination
to defer entering an adjudication
of guilt meant that the court did not accept Petitioner's guilty plea within
the meaning of section 1128(i)(3).
Petitioner offered a guilty plea in order to dispose of the criminal charges
against him. After taking care to
determine that the guilty plea was an acceptable basis to dispose of the criminal
charges in the context of
that particular case, the court then disposed of the matter by placing Petitioner
on probation and ordering
that the proceeding be dismissed upon successful completion of the probation.
If Petitioner violates the
terms of his probation, the court may proceed immediately to enter an adjudication
of guilt and impose a
sentence based on the guilty plea. Petitioner offered a guilty plea in exchange
for a term of probation and
the opportunity to have the charges dismissed upon successful completion of
his probation. That
transaction amounts to acceptance of a guilty plea within the meaning of section
1128(i)(3).
The statutory definition of acceptance was met when Petitioner offered to plead
guilty and the court placed
Petitioner on probation based on its acceptance of the guilty plea. The language
of section 1128(i)(2) is
plain and without qualifying terms. There is no language in that section which
states or suggests that the
definition of conviction is qualified or limited by judicial actions taken subsequent
to acceptance of the
plea. Jerry L. Edmonson, DAB CR59 (1989); Charles E. Zamora, M.D., DAB CR 22,
aff'd DAB 1104
(1989). The fact that the court deferred entering a formal adjudication of guilt
and agreed to dismiss the
criminal charges against Petitioner, conditioned on his satisfying the terms
of his probation, is not relevant.
Similarly, the fact that the court may proceed to enter an adjudication of guilt
in the event that Petitioner
violates the terms of probation is not relevant. In addition, the fact that
the court has the discretion to
reconsider the issue of guilt does not derogate from my conclusion that the
court accepted Petitioner's
guilty plea within the meaning of section 1128(i)(3).
Petitioner's reliance on the United States District Court's decision in Travers
v. Sullivan, 791 F. Supp. 1471
(E.D. Wash. 1992), is misplaced. Travers involved a nolo contendere plea before
a Utah court, and the
issue in Travers was whether this plea was accepted within the meaning of section
1128(i)(3). The court in
Travers applied the same definition of the term "accept" which I apply
in this case: a plea is accepted
within the meaning of section 1128(i)(3) when a court consents to receive it
as an element of an
arrangement to dispose of a pending criminal complaint. In applying this definition
to the facts before it,
the court in Travers found that as, a matter of law, the plea in question was
never accepted. The court in
Travers based this conclusion on the fact that the Utah court expressly took
the plea under advisement.
I read the Travers court's finding regarding the applicability of section 1128(i)(3)
narrowly. I construe
Travers to stand for the proposition that a plea is not accepted within the
meaning of section 1128(i)(3) in
the limited circumstances where a court expressly takes a plea under advisement.
In the instant case, the
Texas court did not expressly take the plea under advisement. To the contrary,
the Texas court received it,
considered evidence related to it, and made an explicit finding that there was
a legal basis for the plea. I
recognize that the Texas court deferred entering an adjudication of guilt in
this case, but I do not find that
this is tantamount to expressly taking the plea under advisement. Nor do I conclude
that Travers stands for
the proposition that a plea is not accepted within the meaning of section 1128(i)(3)
in every instance where
there is the possibility of future proceedings.
III. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(4) of the Act.
I conclude also that the disposition of Petitioner's criminal case constituted
entry into a deferred
adjudication program within the plain meaning of section 1128(i)(4) of the Act.
Therefore, even if there
had not been a finding of guilt by the court within the meaning of section 1128(i)(2)
and even if a guilty
plea had not been accepted within the meaning of 1128(i)(3), Petitioner's guilty
plea would nonetheless
constitute a conviction for purposes of section 1128.
As the appellate panel noted in its November 15, 1993 decision in this case,
although the Travers court
found that Travers was not convicted within the definition of section 1128(i)(3)
because the court had not
accepted Petitioner's plea of guilty, the court did find that Travers was convicted
under section 1128(i)(4).
The language of section 1228(i)(4) is plain and without qualifying terms or
conditions. It encompasses
situations where an individual or entity has entered into a first offender,
deferred adjudication, or other
arrangement where judgment of conviction has been withheld. The undisputed facts
in this case establish
that Petitioner participated in a first offender or deferred adjudication program
where judgment of
conviction has been withheld.
The Order memorializing the disposition of Petitioner's criminal case is captioned
"Order for Deferred
Adjudication." The Order for Deferred Adjudication explicitly stated that
the court was deferring further
proceedings without entering an adjudication of guilt. The Order further stated
that, upon successful
completion of his probation, "the Defendant shall be discharged and the
proceeding against him shall be
dismissed." I.G. Ex. 1. On its face, the treatment of Petitioner by the
Texas State court falls within the
term "deferred adjudication, or other program where judgment of conviction
has been withheld."
This conclusion is consistent not only with the plain meaning of section 1128(i)(4),
but also with
Congressional intent, as expressed through legislative history. The Congressional
committee charged with
drafting the 1986 amendments to the statute stated:
The principal criminal dispositions to which the exclusion remedy [currently]
does not apply are
the "first offender" or "deferred adjudication"y dispositions.
It is the Committee's understanding that States
are increasingly opting to dispose of criminal cases through such programs,
where judgment of conviction
is withheld. The Committee is informed that State first offender or deferred
adjudication programs
typically consist of a procedure whereby an individual pleads guilty or nolo
contendere to criminal charges,
but the court withholds the actual entry of a judgment of conviction against
them and instead imposes
certain conditions of probation, such as community service or a given number
of months of good behavior.
If the individual successfully complies with these terms, the case is dismissed
entirely without a judgment
of conviction ever being entered.
These criminal dispositions may well represent rational criminal justice policy.
The Committee is
concerned, however, that individuals who have entered guilty or nolo [contendere]
pleas to criminal
charges of defrauding the Medicaid program are not subject to exclusion from
either Medicare or
Medicaid. These individuals have admitted that they engaged in criminal abuse
against a Federal health
program and, in the view of the Committee, they should be subject to exclusion.
If the financial integrity
of Medicare and Medicaid is to be protected, the programs must have the prerogative
not to do business
with those who have pleaded to charges of criminal abuse against them.
H.R. Rep. No. 727, 99th Cong., 2d Sess. 75 (1986), reprinted in 1986 U.S.C.C.A.N. 3607, 3665.
The committee added:
With respect to convictions that are "expunged," the Committee intends
to include all instances of
conviction which are removed from the criminal record of an individual for any
reason other than the
vacating of the conviction itself, e.g., a conviction which is vacated on appeal.
Id. The Congressional voice speaks unequivocally that Congress intended to
exclude from Medicare and
Medicaid programs those who entered into first offender or deferred adjudication
programs. More
importantly, the legislative history reveals Congress' strong desire to protect
the Medicare and Medicaid
programs from untrustworthy providers. I find that the arrangement entered into
by Petitioner falls
squarely within the kinds of arrangements which the committee responsible for
drafting the law sought to
include within the ambit of section 1128(i)(4).
Petitioner argues that the United States Court of Appeals decision in Martinez-Montoya
v. I.N.S., 904 F. 2d
1018 (5th Cir. 1990), precluded a finding that he had been convicted under the
definition of that term
presented at section 1128(i)(4) of the Act. Martinez-Montoya involved an analysis
of the Texas deferred
adjudication statute in the context of the Immigration Reform and Control Act,
8 U.S.C. 1255. Petitioner
reads Martinez-Montoya to stand for the proposition that a defendant was not
convicted when final
adjudication of his case had been deferred. Petitioner argued that it was improper
for federal law to utilize
two different standards for the same type of determinations. Petitioner appellate
brief at 5 - 6.
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
Texas deferred adjudication
determination was not a conviction for purposes of the immigration laws. As
I stated in my August 12,
1993 decision, I find not relevant Petitioner's argument that in another area
of federal law deferred
adjudication is treated differently. In its November 15, 1993 decision, the
appellate panel agreed that
"Martinez-Montoya did not establish a definition of conviction for purposes
of the federal exclusion
statute." Douglas L. Reece, D.O., DAB 1448, at 6 (1993).
Congress defined conviction to include a deferred adjudication for purposes
of exclusion under section
1128 of the Act. The legislative history of section 1128(i) demonstrates that
Congress, being aware that
persons who were involved in first offender or deferred adjudication programs
under State law were not
subject to exclusion, made a reasoned decision to change the law to protect
the integrity of the Medicare
and Medicaid programs. The Congressional mandate controls, and it is not within
the authority of the
administrative law judge to disregard or hold invalid federal statutes or regulations.
CONCLUSION
The I.G. has the authority to exclude Petitioner under section 1128(a)(1) of
the Act because the undisputed
material facts establish that he was convicted of a criminal offense related
to the delivery or an item or
service under the Medicare or Medicaid programs. Petitioner is subject to the
federal minimum mandatory
provisions of sections 1128(a)(1) and 1128(c)(3)(B) of the Act, and Petitioner's
exclusion for five years is
the minimum period mandated by federal law.
Joseph K. Riotto
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Act to cover three types of federally-
financed health care programs, including Medicaid. I use the term "Medicaid"
hereafter to represent all
State health care programs from which Petitioner was excluded.
2. Based on the content of these FFCLs, they would logically not be placed
at the end of the FFCLs
already in place. However, in order to avoid the confusion of renumbering the
FFCLs, I have decided to
add them to the end of the FFCLs which already exist.