Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Sandra Lee, Petitioner,
- v. -
The Inspector General.
DATE: February 25, 1994
Docket No. C-93-115
Decision No. CR306
DECISION
By letter dated June 4, 1992, the Inspector General ("I.G.") of the
U.S. Department of Health & Human
Services ("HHS"), attempted to notify Sandra Lee, the Petitioner herein,
that it had been decided to exclude
her for a period of five years from participation in the Medicare program and
the State health care
programs which are encompassed by section 1128(h) of the Social Security Act
("Act") and referred to as
"Medicaid." The I.G.'s rationale was that exclusion, for at least
five years, is mandated by 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. The letter was
returned to the I.G. as
undeliverable.
By letter dated June 28, 1993, Petitioner requested review of the I.G.'s action
by an administrative law
judge of HHS's Departmental Appeals Board ("DAB"). On September 17,
1993, I conducted a telephone
prehearing conference in this case. At the prehearing conference, the I.G. admitted
that Petitioner had not
previously received the June 4, 1992 notice letter. Therefore, the I.G. did
not contend that Petitioner's
request for a hearing was untimely. See Prehearing Order and Schedule for Filing
Motions for Summary
Disposition, dated September 20, 1993. The I.G. moved for summary disposition
on the merits of the case.
Since I find that there are no facts of decisional significance genuinely in
dispute, 1/ and the only matters to
be decided are the legal implications of the undisputed facts, I have granted
the I.G.'s motion and decided
the case on the basis of the parties' written submissions.
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.
PETITIONER'S ARGUMENT
Petitioner contends: (1) that the evidence against her in the prior criminal
proceedings was biased and
perjured, and that she is innocent of any intentional wrongdoing; (2) that she
had not been fully and
accurately advised as to the consequences of pleading no contest; (3) that her
son was very ill at the time
her company was being investigated, making it impossible for her to concentrate
on presenting an adequate
defense during the Florida investigation or initiating an appeal to the Secretary;
and (4) that mitigating
evidence and circumstances are present in her case. Letter of June 28, 1993
from Kathleen Reynolds, Esq.,
to the DAB; see also Petitioner's Motion for Summary Disposition.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. During the period relevant to this case, Petitioner was an administrator
and part owner of Sunshine
Home Health Services, Inc. ("Sunshine"), of Florida. I.G. Ex. 8 2/;
see I.G. Ex. 1 3/.
2. The Florida Office of the Auditor General, Medicaid Fraud Control Unit ("MFCU")
conducted an
investigation of the Medicaid claims filed by Sunshine. I.G. Ex. 8; see I.G.
Ex. 1.
3. Petitioner was charged by criminal information with a second degree felony
of Grand Theft for
submitting Medicaid claims for services which were not authorized by the attending
physician in the case
and was charged by criminal information with a third degree felony of Medicaid
fraud for filing Medicaid
claims for services which were not rendered as stated on the claim. I.G. Ex.
8; see I.G. Ex. 2.
4. For both counts, as specified in the preceding paragraph, Petitioner filed
or caused to be filed, a claim
for Medicaid reimbursement. Each claim was paid by Medicaid and caused a Medicaid
overpayment. I.G.
Ex. 8
5. On November 6, 1991, in Florida Circuit Court, Leon County, Petitioner pled
nolo contendere to
Medicaid Fraud. I.G. Ex. 8; see I.G. Ex. 3.
6. The Circuit Court of the Second Judicial Circuit in and for Leon County,
Florida accepted Petitioner's
nolo plea, entered an "Order Withholding Adjudication of Guilt and Placing
Defendant on Probation," and
put her on supervised probation for a period of three years. On December 18,
1991, the Court also entered
a "Restitution Order," which ordered Petitioner to pay $3328 restitution
to the Florida Medicaid program.
I.G. Ex. 8; see I.G. Ex. 3, 4.
7. By letter dated February 6, 1992, Petitioner was notified by the Office
of Investigations ("OI") of HHS
that, as a result of her criminal conviction, the I.G was preparing to exclude
her from the Medicare and
Medicaid programs. I.G. Ex. 8; see I.G. Ex. 5.
8. The letter of February 6, 1992 informed Petitioner that formal notification
of any action taken would be
sent to her, as would information about her appeal rights. I.G. Ex. 5.
9. By letter dated April 13, 1992, Petitioner responded to the February 6, 1992
OI letter. I.G. Ex. 8; see
I.G. Ex. 6.
10. By letter dated June 4, 1992, the Director, Health Care Administrative
Sanctions, OI, attempted to
advise Petitioner of her exclusion from Medicare and any State health care program
as defined by 1128(h)
of the Act, due to her conviction of a criminal offense related to the delivery
of an item or service under the
Medicaid program. The letter was returned to OI as undeliverable to Petitioner.
I.G. Ex. 8; see I.G. Ex. 7.
11. There is no evidence that Petitioner received the June 4, 1992 notice of
her exclusion prior to these
proceedings. Finding 10.
12. By letter dated June 28, 1993, Petitioner appealed her exclusion. I.G. Ex.
8.
13. Petitioner's nolo plea, and the Florida court's acceptance thereof, mean
that she is considered to have
been "convicted" of a criminal offense for purposes of the mandatory
exclusion law, within the meaning of
section 1128(i)(3). Findings 5-6; Social Security Act, section 1128(i)(3).
14. Pursuant to the November 6, 1991 "Order Withholding Adjudication of
Guilt and Placing Defendant
on Probation", an entry of a formal finding of guilt against Petitioner
was deferred. This was a deferred
adjudication constituting a "conviction" within the meaning of 1128(i)(4).
Finding 6; I.G. Ex. 3; Social
Security Act, section 1128(i)(4).
15. The criminal behavior that Petitioner pled to involved financial misconduct,
specifically, stealing
from the Medicaid program, which clearly affected the program's capacity to
deliver medical items or
services, and, thus, mandated exclusion. Findings 3-5; Social Security Act,
section 1128(a)(1).
16. Because Petitioner's criminal conviction related to the delivery of health
care items or services under
Medicaid, within the meaning of section 1128(a)(1) of the Act, the I.G. must
exclude her for a period of at
least five years. Findings 3-6, 13-14; Social Security Act, sections 1128(a)(1),
1128(c)(3)(B).
17. Under section 1128(a)(1), the fact that a relevant conviction has occurred
mandates exclusion.
The Secretary of HHS ("Secretary") is not permitted to look behind
the conviction.
18. Petitioner may not utilize the Secretary's
administrative proceedings to collaterally attack her criminal conviction by
seeking to show that she did
not do the act charged, that there was no criminal intent, or that the conviction
was tainted by legal error.
19. The administrative law judge is not authorized to reduce the length of
a mandatory five-year period of
exclusion.
20. The I.G. properly excluded Petitioner from participation in Medicare and
Medicaid for five years, as
required by section 1128(c)(3)(B) of the Act.
DISCUSSION
The regulations, at 42 C.F.R. 1001.2007(b) and 1005.2(c), require that Petitioner
file her request for a
hearing within 60 days after receipt of notice of the exclusion. In the present
case, the parties stipulated
that "[t]he [June 4, 1992] letter was returned to the Office of Investigations
as undeliverable to
[Petitioner]." I.G. Ex. 8, at 2. There is no evidence that Petitioner received
the I.G.'s notice letter prior to
these proceedings. The I.G. did not contend that Petitioner's request for a
hearing was untimely.
Accordingly, I am disposing of this case on the merits.
The section of the Act under which the I.G. seeks Petitioner's exclusion, 1128(a)(1),
contains two
requirements. It requires that an individual (1) b
convicted of a criminal offense, and (2) that such conviction be related to
the delivery of an item or service
under Medicare or Medicaid.
In the case at hand, Petitioner pled nolo contendere and the Florida court
accepted her plea and imposed a
substantial sentence. Section 1128(i) of the Act expressly states that when
an individual enters a nolo plea,
and the court accepts the plea, such individual is considered to have been "convicted"
of a criminal offense
for purposes of the mandatory exclusion law. Section 1128(i)(3) of the Act.
I note that the State judge's Order was entitled "Order Withholding Adjudication
of Guilt and Placing
Defendant on Probation." This implies, as is the practice in many State
"first offender" programs, that
formal adjudication of Petitioner's guilt might never be entered on the record
-- or it might later be totally
expunged -- if she complies with the terms of her probation and otherwise manifests
good behavior.
However, under section 1128(i) of the Act, an individual will continue to be
regarded as having been
"convicted" regardless of whether his criminal record is expunged
or whether entry of a formal finding of
guilt is deferred. Sections 1128(i)(1) and (4) of the Act. I conclude that the
State judge's Order was a
deferred adjudication within the meaning of 1128(i)(4). Thus, I find that Petitioner
was "convicted"
within the meaning of both sections 1128(i)(3) and (4).
Next, it is required by section 1128(a)(1) that Petitioner's criminal offense
be related to the delivery of an
item or service under Medicaid or Medicare. It is well-established in case precedent
that financial crime
directed at these programs, such as filing false Medicare or Medicaid claims,
clearly affects their capacity
to deliver medical items or services and, thus, constitutes clear program-related
misconduct mandating
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). In the present case, the record is sufficient
to establish that the
criminal behavior that Petitioner pled to involved financial misconduct, specifically,
stealing from the
Medicaid program. Petitioner's conviction, therefore, satisfies the statutory
requirement of program-
relatedness.
As noted previously, Petitioner argues, in essence, that she had been incriminated
by false evidence given
by her enemies, that she never had any intent to commit any wrongdoing, and
that she was not guilty of the
crimes with which she had been charged. These arguments, however, are misplaced.
First, it is settled law that the mere fact that a person was convicted of
a relevant criminal offense suffices
to justify excluding him; criminal intent is not required to bring a conviction
within the ambit of section
1128(a)(1). DeWayne Franzen, DAB 1165 (1990).
Next, it must be emphasized that once it is shown that a program-related criminal
conviction has occurred,
exclusion for at least five years is mandatory under Sections 1128(a)(1) and
1128(c)(3)(B) as a purely
derivative action. Thus, not only have our cases held that the intent of the
individual committing the
offense is not relevant, they hold also that we will not consider assertions
that an individual is actually
innocent, that his criminal conviction was unfair, or that the five-year mandatory
exclusion specified in
1128(c)(3)(B) should be modified because of mitigating circumstances. See, e.g.,
Janet Wallace, L.P.N.,
DAB CR155 (1991), aff'd, DAB 1326 (1992); DeWayne Franzen, DAB 1165 (1990);
Richard G. Philips,
D.P.M., DAB CR133 (1991), aff'd, DAB 1279 (1991); Peter J. Edmonson, DAB 1330
(1992).
In sum, section 1128(a)(1) does not permit the Secretary to look beyond the
fact of Petitioner's conviction
of a program-related criminal offense. Petitioner may not utilize the Secretary's
administrative proceedings
to collaterally attack her criminal conviction by seeking to show that she did
not do the act charged, that
there was no criminal intent, or that the conviction was tainted by legal error.
Petitioner may have recourse
in the courts to rectify these problems; this appeal is not a vehicle for such
matters. Janet Wallace, L.P.N.,
DAB 1326, at 15 (1992); Richard G. Philips, D.P.M., DAB CR133, at 5-6 (1991);
Peter J. Edmonson,
DAB 1330, at 5 (1992). If, for example, the Petitioner herein felt that she
lacked the state of mind required
by law for conviction of a crime, she could have presented this argument to
a judge or jury. She cannot re-
litigate the criminal case here.
CONCLUSION
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that the Petitioner
herein be excluded from the
Medicare and Medicaid programs for a period of at least five years because of
her criminal conviction for
theft from the Medicaid program. This conviction is clearly related to the program's
ability to deliver
medical items or services. Neither the I.G. nor an administrative law judge
is authorized to reduce the five-
year mandatory minimum period of exclusion. Greene, DAB CR19, at 12-14 (1989).
The five-year exclusion is, therefore, sustained.
__________________________
Joseph K. Riotto
Administrative Law Judge
1. Although Petitioner argued that numerous disputed issues of fact exist, I
find that they related to
matters exclusively within the purview of the State court.
2. The I.G. and the Petitioner entered into a separate stipulation in which
they agreed to certain
undisputed facts and agreed also to the genuineness of certain documents. This
stipulation is entered in the
record as I.G. Ex. 8.
3. The I.G. submitted eight exhibits. I cite the I.G.'s exhibits as "I.G.
Ex. (number) at (page)." Petitioner
submitted four exhibits. The I.G. contested the relevancy of Petitioner's exhibits
to her appeal of her
exclusion. I admit into evidence I.G. Ex. 1-8 and P. Ex. 1-4. I find, however,
that P. Ex. 1-4 are entitled to
little weight because they appear to address circumstances relating to Petitioner's
underlying criminal
conviction.