Maximo Levin, M.D., CR No. 343 (1994)

$05:Exclusion Case

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: Maximo Levin, M.D., Petitioner,
- v.-
The Inspector General.

DATE: November 10, 1994

Docket No. C-94-057
Decision No. CR343

DECISION

By letter dated November 18, 1993, Maximo Levin, M.D., the
Petitioner herein, was notified by the Inspector General (I.G.), of
the U.S. Department of Health & Human Services (HHS), that it had
been decided to exclude Petitioner for a period of five years from
participation in the Medicare, Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for Social Services
programs. 1/ 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 Social Security Act (Act) because Petitioner had been convicted
of a criminal offense related to the delivery of an item or service
under the Medicaid or Medicare programs.

Petitioner filed a timely request for review of the I.G.'s action
by an administrative law judge of the Departmental Appeals Board
(DAB). During a prehearing conference call on February 4, 1994,
the parties agreed that there was no need for an in-person hearing
and that the case could be decided on written submissions.

Thereafter, the I.G. filed a memorandum enumerating the material
facts and conclusions of law the I.G. considered to be uncontested.
The I.G.'s memorandum was accompanied by two exhibits which I admit
and identify as I.G. Exs. 1 and 2. Petitioner responded with a
memorandum in opposition to the I.G.'s position. Petitioner's
memorandum was accompanied by two exhibits marked as "A" and "B."
I remark Petitioner's exhibits as Petitioner's Exhibits 1 and 2.
I admit and identify Petitioner's Exhibits as P. Exs. 1 and 2. The
I.G. submitted a reply also.

I have considered the parties' written arguments and supporting
exhibits, and the applicable statutes and regulations. I conclude
that there are no material and relevant factual issues in dispute
(i.e., the only matter to be decided is the legal significance of
the undisputed facts). I conclude also that Petitioner is subject
to the mandatory exclusion provisions of sections 1128(a)(1) and
1128(c)(3)(B) of the Act, and I affirm the I.G.'s determination to
exclude Petitioner from participation in Medicaid or Medicare 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 Medicaid or
Medicare to be excluded from participation in such programs for a
period of at least five years.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was a
physician practicing in the State of New York. I.G. Ex. 1 at 20.

2. Petitioner was indicted in the United States District Court
for the Southern District of New York on nine counts of receiving
unlawful remuneration in return for ordering or arranging for the
ordering of items of durable equipment which could have been
eligible for payment by Medicaid or Medicare, "in violation of 42
U.S.C. 1320a-7b(b)(1)(B)." The nine counts were identical,
except that each referred to a different incident. I.G. Ex. 1.

3. On June 5, 1991, Petitioner pled guilty to count nine of the
indictment. He admitted that he knowingly and willfully received
remuneration in the amount of $30.00 in exchange for ordering or
arranging for ordering one or more items paid for under Medicaid or
Medicare programs. I.G. Exs. 1, 2.

4. A plea is accepted within the meaning of section 1128(i)(3) of
the Act 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. Section 1128(i)(3) of the Act.

5. The district court accepted Petitioner's guilty plea and he
was formally adjudged guilty.

6. On February 19, 1993, the district court sentenced Petitioner
to a two-month period of imprisonment, followed by supervised
probation; he was required also to pay an assessment and fine.

7. Petitioner's guilty plea, and the court's acceptance of that
plea, constitutes a "conviction," within the meaning of sections
1128(a)(1) and 1128(i) of the Act. Findings 3 - 6.

8. 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. Findings 3 - 7.

9. Pursuant to section 1128(a)(1) of the Act, the I.G. is
required to exclude Petitioner from participating in Medicaid or
Medicare.

10. The minimum mandatory period of exclusion pursuant to section
1128(a)(1) is five years. Section 1128(c)(3)(B) of the Act.

11. The I.G. properly excluded Petitioner, pursuant to section
1128(a)(1) of the Act, for a period of five years as required by
the minimum mandatory exclusion provision of section 1128(c)(3)(B)
of the Act.

12. The mandatory exclusion provision is remedial in nature and
not violative of the Fifth and Eighth Amendments to the United
States Constitution.

PETITIONER'S ARGUMENT

Petitioner acknowledges having accepted a $30.00 kickback from a
manufacturer of breathing equipment in exchange for prescribing
such devices for a patient, which may be paid for by Medicaid or
Medicare.

Petitioner contends also that excluding him, under the
circumstances present herein, violates the Fifth Amendment to the
Constitution, since the financial effect of his exclusion is so
disproportionate to the dollar value of his crime that the
exclusion has taken on the characteristics of a punishment and
amounts to placing him in double jeopardy. He contends further
that, for essentially the same reason, exclusion is forbidden by
the Eighth Amendment's prohibition against excessive fines.
Lastly, he maintains that his patients genuinely needed the medical
equipment he prescribed.


DISCUSSION

The first statutory requirement for mandatory exclusion pursuant to
sections 1128(a)(1) and 1128(c)(3)(B) of the Act is that the
individual or entity in question was convicted of a criminal
offense. Section 1128(i) of the Act defines when a person has been
convicted for purposes of an exclusion. That provision defines the
term "convicted" of a criminal offense to include those
circumstances "when a plea of guilty or nolo contendere by the
individual or entity has been accepted by a Federal, State or local
court . . . ." Section 1128(i)(3) of the Act.

In the present case, evidence adduced by the I.G. shows that
Petitioner pled guilty to one count of violating section
1128B(b)(1)(B) of the Act by knowingly and willfully receiving
remuneration in exchange for ordering or arranging for ordering one
or more items paid for under Medicaid or Medicare. I.G. Exs. 1, 2.
Petitioner entered his plea of guilty to this offense in the United
States District Court for the Southern District of New York. The
court's acceptance of Petitioner's guilty plea is demonstrated by
the fact that, on February 19, 1993, it entered a judgment in which
Petitioner was adjudged guilty of count nine of the indictment --
"Medicaid/Medicare Kickbacks -- in violation of 42 U.S.C.
1320a-7b(b)(1)(B)." I.G. Ex. 2. The court sentenced Petitioner to
a two-month period of imprisonment, followed by supervised
probation. Petitioner was required also to pay an assessment and
fine. The evidence adduced by the I.G. is clear and not subject to
conflicting interpretation. It establishes that Petitioner was
convicted of a criminal offense within the meaning of sections
1128(a)(1) and 1128(i) of the Act.

The evidence establishes also that the second requirement of
section 1128(a)(1) -- that the criminal offense leading to the
conviction be related to the delivery of an item or service under
Medicare or Medicaid -- has been satisfied. It is well-established
in decisions of appellate panels of the DAB that violation of the
antikickback provisions of the Act, set forth in section
1128B(b)(1)(B), constitutes a clear program-related offense
invoking mandatory exclusion. Niranjana B. Parikh, M.D., et al.,
DAB 1334 (1992); Boris Lipovsky, M.D., DAB 1363 (1992).

Petitioner contends that excluding him violates the Fifth and
Eighth Amendments to the Constitution, since the financial effect
of his exclusion is so disproportionate to the dollar value of his
crime that the exclusion has taken on the characteristics of a
punishment and amounts to placing him in double jeopardy. He
further argues that, because of what he defines as the punitive
nature of the mandatory exclusion process, its application herein
violates the Eighth Amendment's prohibition against excessive
fines. In making this argument, he relies primarily on the
principles established in U.S. v. Halper, 2/ 490 U.S. 435 (1989),
and Austin v. U.S., 113 S.Ct. 2801 (1993). These arguments,
however, have already been considered and rejected by federal
district courts and the DAB. See, e.g., Manocchio v. Kusserow, 961
F. 2d 1539 (11th Cir. 1992); Greene v. Sullivan, 731 F. Supp. 838
(E.D. Tenn. 1990); John N. Crawford, M.D., DAB 1324 (1992).

As to the contention that exclusion would subject Petitioner to
unconstitutional double jeopardy, the primary purpose of the
exclusion sanction is remedial rather than punitive. When an
exclusion is imposed pursuant to section 1128 of the Act, its
purpose is to protect the integrity of the programs and their
beneficiaries and recipients from persons who have been shown to be
guilty of program-related or patient-related crimes. Francis
Shaenboen, R.Ph., DAB CR97 (1990), aff'd DAB 1249 (1991). As a DAB
appellate panel held ". . . the mandatory exclusion provision is
not comparable to the civil penalty imposed in Halper but is
remedial in nature" and, therefore, constitutionally inoffensive.
Janet Wallace, L.P.N., DAB 1326 (1992). With regard to Austin, 3/
the DAB's finding that the statute is, in essence, remedial is
highly relevant. In addition, I doubt whether the standards
applied in a civil forfeiture case, where the government is seeking
to seize a person's house, car, business, or the like are
applicable to matters like the instant case, where the government
is seeking merely to avoid doing business with a person or entity
it regards as untrustworthy.

For all these reasons, I do not regard Petitioner's constitutional
arguments as controlling here.

Petitioner maintains also that the equipment prescribed was
medically necessary. However, the law proscribes all kickbacks
given in exchange for ordering items or services for which payment
may be made under Medicaid or Medicare -- there is no exception
allowing a person to receive kickbacks for medically justifiable
transactions.


CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that the
Petitioner herein be excluded from Medicare and Medicaid for a
period of at least five years because of his criminal conviction
for receiving a kickback, a conviction that is related to the
delivery of items or services under these programs. Neither the
I.G. nor an

administrative law judge is authorized to reduce the five-year
mandatory minimum exclusion. Jack W. Greene, DAB CR19 (1989),
aff'd, DAB 1078 (1989), aff'd sub nom., Greene v. Sullivan, 331 F.
Supp. 835, 838 (E.D. Tenn. 1990).

The five-year exclusion is, therefore, sustained.


__________________________
Joseph K. Riotto
Administrative Law Judge


1. I use the term "Medicaid" hereafter to represent all
programs, other than Medicare, from which Petitioner was excluded.

2. Halper involved a defendant who was penalized under the
federal criminal False Claims Act for submitting multiple false
claims for reimbursement under Medicare. After conviction and
sentencing, the government, in a separate action against the
defendant, imposed additional civil remedies that bore no rational
relation to the government's actual loss. The Court found that
this constituted a violation of the defendant's right against
double jeopardy. Halper, 490 U.S. at 452.

3. Austin addressed the issue of whether the Comprehensive
Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 881) is
subject to the limitations of the excessive fines clause of the
Eighth Amendment. The Court reasoned that a forfeiture that could
be considered a monetary punishment is subject to the excessive
fines clause. The Court held that 21 U.S.C. 881 was subject to
the excessive fines clause because, although it served some
remedial purpose, it served also as a monetary punishment.