$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Laurence Wynn, M.D., Petitioner,
- v. -
The Inspector General.
DATE: November 21, 1994
Docket No. C-93-062
Decision No. CR344
DECISION
On February 12, 1993, the Inspector General (I.G.) notified
Petitioner that he was being excluded from participating in the
following programs: Medicare, Medicaid, Maternal and Child Health
Services Block Grant, and Block Grants to States for Social
Services. The I.G. stated that the exclusion was authorized by
section 1128(b)(5) of the Social Security Act (Act). The I.G. told
Petitioner that he was being excluded for a period of five years.
Petitioner requested a hearing. The case was assigned to
Administrative Law Judge Charles Stratton for a hearing and a
decision. At Petitioner's request, Judge Stratton agreed to stay
the case pending the outcome of administrative proceedings in New
York State concerning Petitioner's participation in that State's
Medicaid program. Eventually, a New York State administrative law
judge issued a decision in that proceeding. 1/ The parties agreed
to proceed to disposition of this case.
The parties agreed that an in-person hearing was not necessary to
decide the issues in this case. On June 9, 1994, Judge Stratton
issued an order which established a schedule for the parties to
file proposed exhibits and briefs. Subsequently, the case was
reassigned to me due to the death of Judge Stratton.
I have considered the parties' briefs and exhibits, as well as the
applicable law. 2/ I conclude that the five-year exclusion which
the I.G. imposed against Petitioner is reasonable. I sustain the
exclusion.
I. Issues, findings of fact, and conclusions of law
The I.G. excluded Petitioner pursuant to section 1128(b)(5) of the
Act, a section which authorizes the Secretary of the Department of
Health and Human Services(or her delegate, the I.G.) to exclude an
individual where that individual has been suspended, excluded from
participation, or otherwise sanctioned by a State health care
program for reasons bearing on that individual's professional
competence, professional performance, or financial integrity. 3/
Petitioner has not asserted that the I.G. lacks authority to
exclude him pursuant to section 1128(b)(5). There is no dispute in
this case that New York State authorities excluded Petitioner from
participation in the New York Medicaid program, a State health care
program within the meaning of section 1128(b)(5). Nor is there any
dispute that Petitioner was excluded from participating in the New
York Medicaid program for reasons bearing on his professional
competence, professional performance, or financial integrity.
What is disputed in this case is whether the five-year exclusion
which the I.G. imposed against Petitioner is reasonable. As to
this issue, I make the following findings of fact and conclusions
of law. In setting forth these findings and conclusions, I cite to
relevant portions of my decision, at which I discuss my findings
and conclusions in detail.
1. Under applicable regulations, an exclusion imposed pursuant to
section 1128(b)(5) of the Act must be for three years, unless
aggravating factors exist which justify an exclusion of more than
three years, or unless mitigating factors exist which justify an
exclusion of less than three years. Page 5.
2. There are no mitigating factors in this case. Pages 5 - 6.
3. The I.G. proved the presence of an aggravating factor, in that
Petitioner was excluded from participating in the New York Medicaid
program for more than three years. Page 7.
4. The I.G. proved the presence of an additional aggravating
factor, in that the conduct which caused Petitioner's exclusion
from the New York Medicaid program had or could have had an adverse
impact on that program or program recipients. Pages 7 - 9.
5. The seriousness of the conduct which caused Petitioner's
exclusion from the New York Medicaid program establishes Petitioner
to be an untrustworthy provider of care and justifies an exclusion
of five years. Page 10.
6. Because the two aggravating factors proved by the I.G.
establish that a five-year exclusion is reasonable, it is not
necessary for me to decide whether Petitioner's exclusion by the
New Jersey Medicaid program is an additional aggravating factor.
Pages 9 - 10.
7. I do not have the authority to decide Petitioner's argument
that the I.G.'s exclusion determination deprived Petitioner of his
rights under the Fifth Amendment of the United States Constitution.
Pages 10 - 11.
II. Discussion
The following facts are undisputed. Petitioner was excluded from
participating in the New York Medicaid program based on findings --
in administrative proceedings in New York State -- that he had
engaged in improper record keeping, that he had ordered and claimed
reimbursement for unnecessary services, and that these practices
resulted in substantial overpayments to him. Petitioner challenged
these findings. They were largely sustained, based on the record
adduced at the New York State administrative hearing. The
undisputed facts also are that Petitioner was suspended from
participating in the New Jersey Medicaid program based entirely on
the determination in New York to exclude him from participating in
the New York Medicaid program.
Petitioner is a physician who has practiced in both New York and
New Jersey. On July 2, 1990, the New York State Department of
Social Services (DSS) advised Petitioner that it had determined
that he had engaged in unacceptable practices, causing the New York
Medicaid program to make overpayments for Medicaid services or
supplies which Petitioner ordered or for which he claimed
reimbursement. I.G. Ex. 1 at 1. DSS determined that Petitioner
had failed to maintain medical records necessary to fully disclose
the need for, and the nature and extent of, the care which
Petitioner claimed to have provided to Medicaid recipients. Id.
DSS determined further that Petitioner had furnished or ordered
medical care and services and supplies that were substantially in
excess of Medicaid recipients' needs. Id. DSS determined to
exclude Petitioner from participating in the New York Medicaid
program for a period of five years. Id. at 2.
Petitioner requested a hearing regarding DSS' determination to
exclude him from participating in the New York Medicaid program.
An administrative hearing was conducted by a New York State
administrative law judge. On March 23, 1994, a decision was
rendered sustaining the State Medicaid exclusion. I.G. Ex. 5. The
decision concluded that Petitioner engaged in unacceptable record
keeping practices. Id. at 5. It concluded also that Petitioner
provided excessive services to Medicaid recipients. Id. Finally,
it concluded that Petitioner had caused DSS to make overpayments in
the amount of $223,867. Id.
The decision was based on evidence obtained from an audit of
Petitioner's patient records which proved that, in a number of
cases, Petitioner had failed to document: the need for the
treatments that he had provided, the drugs which he prescribed to
Medicaid recipients, or, in some instances, the services for which
he claimed reimbursement. I.G. Ex. 5 at 11 - 20. The decision was
based also on evidence obtained from an audit of Petitioner's
reimbursement claims and Petitioner's records of the services for
which the claims ostensibly were made. That audit found that
Petitioner had claimed reimbursement for providing comprehensive
services to Medicaid recipients when, in fact, he had provided less
extensive services to those recipients. Id. at 20 - 27. The
finding of an overpayment was based on a review of a sample of the
reimbursement claims to the New York Medicaid program for
Petitioner's services and those which he had ordered, extrapolated
as a percentange of the total number of those claims. Id. at 27 -
28.
On December 13, 1990, the New Jersey Department of Human Services
advised Petitioner that it had determined to suspend him from
participating in the New Jersey Medicaid program. I.G. Ex. 2 at 1.
This determination was based on the determination to exclude him
from participating in the New York Medicaid program. Subsequently,
a hearing was held before a New Jersey State administrative law
judge. The evidence adduced at that hearing was limited to the
July 2, 1990 notice of exclusion that had been sent to Petitioner
by DSS concerning his participation in the New York Medicaid
program. Id. at 8 - 9. At the hearing, debarment was sought as a
remedy. The administrative law judge found that a suspension, and
not debarment, was the appropriate remedy. On review, the Director
of the New Jersey Department of Human Services Division of Medical
Assistance and Health Services modified this ruling to impose the
remedy of debarment. Id. at 2 - 6. This decision was appealed to
the Appellate Division of the Superior Court of New Jersey, which
modified the director's decision to conform with the decision of
the administrative law judge. Id. at 7 - 14.
A. The presence of aggravating factors
Regulations which govern the length of exclusions imposed pursuant
to section 1128(a) and (b) of the Act are contained in 42 C.F.R.
Part 1001. The specific regulation governing exclusions imposed
pursuant to section 1128(b)(5) is 42 C.F.R. 1001.601. The
regulation provides that an exclusion imposed pursuant to section
1128(b)(5) will be for a term of three years in the absence of any
factors defined as either aggravating or mitigating. 42 C.F.R.
1001.601(b)(1).
An exclusion under section 1128(b)(5) may be for more than three
years where aggravating factors exist that are not offset by
mitigating factors. An exclusion may be for less than three years
if there exist mitigating factors which are not offset by
aggravating factors. The factors which may be aggravating consist
of the following:
(i) The acts that resulted in the exclusion, suspension or
other sanction under the Federal or State health care program had,
or could have had, a significant adverse impact on Federal or State
health care programs or the beneficiaries of those programs or
other individuals;
(ii) The period of exclusion, suspension or other sanction
imposed under the Federal or State health care program is greater
than three years; or
(iii) The individual or entity has a prior criminal, civil or
administrative record.
42 C.F.R. 1001.601(b)(2)(i) - (iii).
Factors which may be mitigating are set forth in 42 C.F.R.
1001.601(b)(3)(i) - (iii). Petitioner concedes that there are no
mitigating factors present in this case. Petitioner's Brief at 7.
The presence of aggravating factors in a particular case is not in
and of itself an automatic basis for excluding a party for more
than the three-year benchmark established by the regulation.
Section 1128 of the Act is a remedial statute whose purpose is to
protect federally financed health care programs and their
beneficiaries and recipients from individuals and entities who are
not trustworthy to provide care. The presence of an aggravating
factor in a given case may establish that a party is sufficiently
untrustworthy so as to require a lengthier exclusion than the
benchmark period. But, that is not necessarily so. The evidence
which establishes the presence of aggravating factors must be
evaluated in order to determine whether it shows a party to be so
untrustworthy as to merit a lengthier exclusion than the benchmark
period. William F. Middleton, DAB CR297, at 11 (1993). 4/
The I.G. argues that there are three aggravating factors present
here. First, she asserts that the conduct for which Petitioner was
excluded from the New York Medicaid program had or could have had
a significant adverse impact on that program or on program
recipients. 42 C.F.R. 1001.601(b)(2)(i). Second, she contends
that Petitioner was excluded from a State health care program, New
York Medicaid, for a period of more than three years (five years in
this case). 42 C.F.R. 1001.601(b)(2)(ii). Finally, she argues
that Petitioner's suspension from the New Jersey Medicaid program
is a prior administrative sanction record. 42 C.F.R.
1001.601(b)(2)(iii).
Petitioner concedes that the aggravating factor identified at 42
C.F.R. 1001.601(b)(2)(ii) is present in this case. He
acknowledges that he was excluded from participating in the New
York Medicaid program for more than three years, although he notes
that he continues to appeal that exclusion in New York State court.
He contends, however, that the length of the State exclusion was
not reasonable and, therefore, should be given little weight.
Petitioner disputes that the aggravating factor identified at 42
C.F.R. 1001.601(b)(2)(i) is applicable to his case. Petitioner
argues that the findings in the State proceeding resulting in his
exclusion from the New York Medicaid program do not establish that
his conduct had or could have had an adverse impact on program
recipients. Petitioner argues that the State findings should be
given no weight, because the evidence underlying the administrative
decision in the New York State hearing as to his exclusion is not
conclusive. Petitioner's Brief at 8. Petitioner asserts that the
majority of the medications which he prescribed and which are the
basis for findings concerning his failure to justify the treatments
he provided to Medicaid recipients, were prescribed only for minor
ailments. Id. From this, Petitioner argues that, even if he
prescribed unnecessary treatments, the treatments caused no harm to
patients. Furthermore, Petitioner argues that the amount of the
overpayment found in his case, $223,867, was de minimis in
comparison to the total New York Medicaid budget. Id.
Lastly, Petitioner disputes that his suspension from the New Jersey
Medicaid program is a "prior administrative record" within the
meaning of 42 C.F.R. 1001.601(b)(2)(iii). Petitioner argues
that the New Jersey suspension could not constitute a prior
administrative record, because it postdated the action in New York
and, indeed, was based on the record of the New York exclusion
action.
I conclude that the record in this case establishes the presence of
two aggravating factors. The record of the New York exclusion
proceeding establishes that Petitioner's conduct harmed, or could
have harmed, the New York Medicaid program and its recipients.
That is an aggravating factor within the meaning of 42 C.F.R.
1001.601(b)(2)(i). Furthermore, the exclusion imposed in New York
against Petitioner exceeded three years in length, and thus, is an
aggravating factor within the meaning of 42 C.F.R.
1001.601(b)(2)(ii). For reasons which I discuss below, it is not
necessary for me to decide whether a third aggravating factor,
consisting of a prior administrative sanction, is present here.
The findings in the New York State administrative decision to
exclude Petitioner from that State's Medicaid program are not
necessarily dispositive as to the presence or absence of
aggravating factors in this case. Those findings are evidence
which I must evaluate along with other evidence which the parties
may offer as to the presence or absence of aggravating factors.
Bernardo G. Bilang, M.D., DAB 1295, at 10 - 13 (1992). Moreover,
although the New York State decision is not conclusive proof of the
presence of aggravating factors in this case, I am entitled to
infer that the findings in that decision are accurate, in the
absence of some meaningful challenge to their accuracy by
Petitioner. Id. at 12.
I have read closely the New York State decision. That decision's
findings are buttressed by a careful analysis of both the exhibits
offered by the parties to the case, and the testimony of witnesses,
including the expert called by Petitioner. I.G. Ex. 5 at 12 - 19.
Petitioner has not pointed to any evidence which would refute the
findings in that decision. He argues that I should not rely on
that decision without offering a convincing reason for his
argument. Moreover, the one specific argument that he makes
concerning some of his practices which were at issue in the New
York case -- his documentation of the basis for prescribing
medication to Medicaid recipients -- is the same argument that he
made in the New York case. He argues here, as he did in that case,
that a reasonable person could infer from his treatment records why
he prescribed a particular medication in a given case.
Petitioner's Brief at 8; I.G. Ex. 5 at 12. That argument was
rejected in the New York case because it failed to address the
question of whether Petitioner's treatment records conformed to
applicable regulations governing maintenance of treatment records
in Medicaid cases. I.G. Ex. 5 at 12. Petitioner has offered
nothing here which would suggest that that conclusion is incorrect.
In the absence of probative evidence to the contrary, I conclude
that the decision in the New York State
proceeding establishes by the preponderance of the evidence the
following facts:
Petitioner was excluded from participating in the
New York Medicaid program for five years.
Petitioner prescribed unnecessary treatments and
medications to Medicaid recipients.
Petitioner caused the New York Medicaid program to
make overpayments of $223,867 for services improperly billed or
ordered by Petitioner.
I must next evaluate these facts to decide whether they meet the
definition of aggravating factors under 42 C.F.R.
1001.601(b)(2).
These facts plainly establish the presence of two aggravating
factors in this case. As Petitioner concedes, the five-year
exclusion from the New York Medicaid program is an aggravating
factor. Furthermore, I conclude that Petitioner's prescribing of
unnecessary treatments and medications and his improper claims
resulting in substantial overpayments are also proof of an
aggravating factor under 42 C.F.R. 1001.601(b)(2)(i).
I disagree with Petitioner's argument that his prescribing of
unnecessary treatments and medications and his improper claims do
not establish either harm or the potential to harm the New York
Medicaid program or its recipients. The fact that Petitioner
prescribed medications under circumstances where the need for those
medications was not documented certainly posed at least the
potential for harming recipients. As for the overpayment, I do not
find it to be de minimis as Petitioner contends it to be. The
amount involved was substantial. It consitituted a sum which could
have been devoted to other, legitimate purposes by the New York
Medicaid program had it not been expended to pay for services
improperly billed or ordered by Petitioner.
There is no need for me to make findings here as to whether
Petitioner's suspension from the New Jersey Medicaid program is a
prior administrative sanction and an aggravating factor. The
presence of two aggravating factors authorizes me to consider
whether an exclusion of more than three years is reasonable. The
I.G. did not rely on this alleged additional aggravating factor as
a basis for imposing the five-year exclusion originally. Moreover,
even if I were to find the New Jersey suspension to constitute an
aggravating factor, I would not find that it added anything to my
conclusions as to Petitioner's trustworthiness to provide care.
The New Jersey suspension was based on the action taken against
Petitioner in New York. No new evidence was adduced in the New
Jersey suspension action.
B. The basis for the five-year exclusion
I conclude that the evidence relating to the two aggravating
factors which have been established provides ample grounds for me
to conclude that Petitioner is so untrustworthy as to necessitate
a five-year exclusion. The findings in the New York administrative
proceeding establish that Petitioner engaged in a pattern of
improper documentation of the treatments and services he provided
and the medication he prescribed. They establish also that
Petitioner systematically claimed reimbursement for services which
he had not provided. The amount of the overpayment in this case is
strong evidence that Petitioner poses a threat of substantial harm
to the financial integrity of federally financed health care
programs. The fact that New York felt it necessary to impose a
five-year exclusion against Petitioner is additional proof that he
is untrustworthy and that a five-year exclusion is needed here.
C. Petitioner's constitutional and due process arguments
Petitioner asserts that the I.G.'s exclusion determination was made
in violation of his right to due process under the Fifth Amendment
of the United States Constitution. Petitioner asserts that the
I.G.'s actions have unconstitutionally deprived him of a protected
liberty interest. He asserts also that the I.G.'s delay in
imposing an exclusion against him deprived him of his right to due
process of law.
I do not have the authority to find invalid either federal statutes
or regulations. 42 C.F.R. 1005.4(c)(1). It is unclear from
Petitioner's argument whether he is asserting that he has been
deprived of a liberty interest as an inevitable consequence of the
I.G.'s application of the Act and regulations. If so, that is, in
effect, a challenge to the consitutionality of the Act and
regulations, which I do not have authority to decide.
On the other hand, it appears that Petitioner may be asserting that
the I.G.'s discretionary act -- the determination to exclude him --
deprived him of a liberty interest. If that is so, I also do not
have the authority to decide this assertion because I do not have
authority to review the I.G.'s exercise of discretion. 42 C.F.R.
1005.4(c)(5).
I am certain that Petitioner's challenge to the timing of the
exclusion is a challenge to the I.G.'s exercise of discretion. The
determination to impose an exclusion in a given case and at a given
point in time is an act of discretion by the I.G. which I have no
authority to review. 42 C.F.R. 1005.4(c)(5).
CONCLUSION
I conclude that the five-year exclusion which the I.G. imposed in
this case is reasonable.
________________________
Steven T. Kessel
Administrative Law Judge
1. Petitioner has appealed that decision to New York State
authorities.
2. The I.G. submitted five proposed exhibits (I.G. Exs. 1 - 5).
Petitioner submitted 11 proposed exhibits (P. Exs. 1 - 11).
Neither party objected to the admission into evidence of the other
party's proposed exhibits. I admit all of the exhibits into
evidence.
3. This section also authorizes an exclusion where an
individual has been suspended, excluded from participation, or
otherwise sanctioned by any federal program involving the provision
of health care.
4. The Middleton case involved an exclusion imposed under
section 1128(a)(1) of the Act, rather than under section
1128(b)(5). However, the principal identified in Middleton -- that
an exclusion must comport with the Act's remedial purpose in order
to be reasonable -- is applicable equally in this case.