Ishfaq Pendi, M.D., CR No. 368 (1995)

$05:Exclusion Case

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division


In the Case of:

Ishfaq Pendi, M.D.,

Petitioner,

- v. -

The Inspector General

Date: April 7, 1995
Docket No. C-94-417
Decision No. CR368

DECISION

By letter dated July 21, 1994, Ishfaq Pendi, M.D., the Petitioner
herein, was notified by the Inspector General (I.G.) of the United
States Department of Health and Human Services (HHS), that it had
been decided to exclude him 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. asserted that an exclusion of at
least five years is mandatory under 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 Medicaid.

Petitioner filed a timely request for review of the I.G.'s action.
On September 8, 1994, I held a prehearing conference in this case.
During that conference, the parties agreed to proceed by filing
briefs supported by documentary evidence. 2/ Having reviewed the
parties' submissions, I have determined that there are no material
and relevant factual issues in dispute (i.e., the only dispute is
as to the legal significance of the undisputed facts). Based on
the undisputed facts and the law, I have determined that the I.G.
is entitled to prevail because she properly determined that she was
required to exclude Petitioner for at least 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.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. In 1985 and 1986, Petitioner was the office manager in at least
two of his stepfather's medical clinics in New York City. 3/ I.G.
Ex. 2 at 1; I.G. Proposed Finding (PF) #1; P. PF #1.

2. On or about September 4, 1986, Petitioner was indicted in the
United States District Court for the Southern District of New York
on one count of conspiracy and seven counts of knowingly soliciting
and receiving kickbacks and bribes for referring Medicaid patients
to an ambulette service for transportation that was reimbursed by
Medicaid. I.G. Ex. 2; I.G. PF #3; P. PF #4.


3. On or about April 28, 1987, Petitioner and prosecutors executed
an agreement in which Petitioner agreed to cooperate with
authorities in their investigation of Medicaid fraud in return for
an agreement by prosecutors to accept his guilty plea to one count
of conspiracy in full satisfaction of the criminal charges pending
against him. P. Ex. 1; I.G. PF ##5, 6; P. PF #5.

4. On or about November 19, 1990, Petitioner pled guilty to count
one of the indictment, conspiracy to solicit and receive Medicaid
kickbacks. P. Ex. 2; I.G. PF #6; P. PF #8.

5. The court accepted Petitioner's plea, but deferred sentencing
and placed the plea allocution under seal at the request of
prosecutors because Petitioner's cooperation was not at an end. P.
Ex. 2; I.G. PF #7; P. PF #8.

6. Petitioner cooperated fully with authorities. I.G. Ex. 3; I.G.
PF #8; P. PF #10.

7. On or about July 26, 1993, Petitioner was sentenced to a
suspended prison sentence of one year, was placed on probation for
five years, and was fined $10,000. I.G. Ex. 4; I.G. PF #9; P. PF
#9.

8. Petitioner was convicted of a criminal offense. Findings 4, 5.

9. The criminal offense of which Petitioner was convicted was
related to the delivery of an item or service under Medicaid,
within the meaning of section 1128(a)(1) of the Act. Findings 4,
8.

10. The Secretary of HHS has delegated to the I.G. her authority
to impose and direct exclusions pursuant to section 1128 of the
Act. 48 Fed. Reg. 21662 (1983).

11. The I.G. was required to exclude Petitioner for at least five
years. Finding 9.

12. By letter dated July 21, 1994, the I.G. imposed and directed
Petitioner's exclusion from participation in the Medicare and
Medicaid programs for a period of five years, to commence 20 days
after the date of the letter.

13. An administrative law judge has no authority to modify the
date on which an exclusion becomes effective.

14. An administrative law judge has no authority to remand a case
to the I.G. with directions to change the effective date of an
exclusion.


PETITIONER'S ARGUMENT

Petitioner states that he does not contest the I.G.'s proposed
findings of fact. P. Br. at 6. I take this to be an admission
that Petitioner was "convicted" and that his conviction related to
the delivery of an item or service under Medicaid. Thus,
Petitioner concedes that the I.G. had a basis for the exclusion.

Petitioner's only argument is that his exclusion should be modified
to commence on or about November 19, 1990, the date Petitioner pled
guilty pursuant to the cooperation agreement. Petitioner argues
that it is arbitrary and capricious to delay the effect of his
exclusion when the delays in his sentencing were due to the desire
of prosecutors to maintain secrecy so that Petitioner could
continue to serve as an undercover witness. If I cannot modify the
exclusion, Petitioner asks, in the alternative, that I remand this
case to the I.G. with directions to modify the commencement of the
exclusion.


DISCUSSION

The facts alleged by the I.G. and not disputed by Petitioner
demonstrate that 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. For this reason,
Petitioner's five-year exclusion is required as a matter of law.

An individual is "convicted" of a criminal offense, as defined by
section 1128(i) of the Act, when, among other things, the
individual's plea of guilty is accepted by a court. Act, section
1128(i)(3). In the present case, it is undisputed that Petitioner
pled guilty to one count of conspiracy to solicit and receive
Medicaid kickbacks. The district court accepted Petitioner's plea.
P. Ex. 2. Therefore, Petitioner was convicted of a criminal
offense, within the meaning of sections 1128(a) and 1128(i) of the
Act.

Further, Petitioner's conviction is related to the delivery of an
item or service under Medicaid. Petitioner pled guilty to
conspiring to solicit and receive bribes and kickbacks for
referring patients to an ambulette service for transportation
reimbursable by Medicaid. An appellate panel of the Departmental
Appeals Board (DAB) has previously held that the crime of accepting
kickbacks for Medicaid referrals is related to the delivery of
items or services, within the meaning of section 1128(a)(1).
Niranjana Parikh, M.D., DAB 1334 (1992). Therefore, a conspiracy
to pay or receive kickbacks for Medicaid referrals must likewise be
related to the delivery of Medicaid items or services.

Because Petitioner was convicted of a criminal offense related to
the delivery of an item or service under Medicaid, the I.G. was
required to exclude Petitioner for at least five years. Petitioner
argues, however, that his five-year exclusion should be treated as
having commenced on or about November 19, 1990, when he pled guilty
in federal district court. Petitioner's argument is unavailing,
however, because both the regulations and case precedent make clear
that I am without authority to change the commencement date of his
exclusion.

Section 1005.4(c)(5) of Title 42 of the Code of Federal Regulations
provides that the administrative law judge is without authority to
review any exercise of discretion by the I.G. In Laurence Wynn,
M.D., DAB CR344 (1994), the administrative law judge concluded that
a challenge to the timing of an exclusion amounted to a challenge
to the I.G.'s exercise of discretion in deciding when to impose an
exclusion. Id. at 11. I agree with this analysis. Thus, the
regulations do not authorize the administrative law judge to review
the timing of an exclusion.

Indeed, the preamble to the regulations explicitly states that "the
ALJ is not authorized under these regulations to modify the date of
commencement of the exclusion." 57 Fed. Reg. 3298, 3325 (1992).
Similarly, appellate panels and administrative law judges of the
DAB have consistently held that an administrative law judge "has no
power to change . . . the beginning date" of a mandatory exclusion.
Samuel W. Chang, M.D., DAB 1198, at 10 (1990); see also Thomas J.
DePietro, R.Ph., DAB CR117 (1991). Moreover, in the Chang case,
the appellate panel rejected the argument that an exclusion should
be made retroactive to run concurrently with another sanction.
Chang, DAB 1198, at 10-11; see also David D. DeFries, D.C., DAB
CR156, at 7 (1991), aff'd, DAB 1317 (1992).

As these authorities demonstrate, it is well-settled that I am
without authority to modify Petitioner's exclusion, whether to make
it retroactive to the date of his guilty plea or for any other
reason. Nevertheless, Petitioner argues, in the alternative, that
I should remand the case to the I.G. for reconsideration of the
commencement date of the exclusion. I reject Petitioner's request
for a remand. I can find no remand authority in the regulations
governing my conduct of hearings in these cases. 42 C.F.R. Part
1005. However, even were I to conclude that my inherent authority
to conduct a fair hearing included the power to remand appropriate
cases to the I.G., I would not exercise that power here. It is my
conclusion that my lack of authority to modify the date on which
the I.G. imposes an exclusion amounts to a lack of jurisdiction
over the question. Thus, as I lack jurisdiction to consider
Petitioner's request that I change the commencement date of his
exclusion, I similarly lack jurisdiction to remand this issue to
the I.G.


CONCLUSION

For the reasons stated, I conclude that the I.G. was required to
exclude Petitioner for not less than five years because he was
convicted of a criminal offense related to the delivery of an item
or service under Medicaid. I am without authority either to modify
the beginning date of Petitioner's exclusion or to remand the case
to the I.G. for reconsideration of that issue.

________________________
Joseph K. Riotto
Administrative Law Judge

1. In this decision, I refer to all programs from which
Petitioner has been excluded, other than Medicare, as "Medicaid."

2. The I.G. submitted a brief (Br.) and eight exhibits (I.G.
Exs. 1-8). Petitioner submitted a brief (P. Br.) and five
exhibits, which Petitioner labeled "A" through "E." I have
renumbered Petitioner's exhibits as P. Exs. 1-5. The I.G. objected
to exhibits "C" through "E" (P. Exs. 3-5) as duplicative. I
sustain the I.G.'s objection and reject P. Exs. 3-5. I have
admitted I.G. Exs. 1-8 and P. Exs. 1 and 2 in evidence.

3. Both the I.G. and Petitioner submitted proposed findings of
fact and conclusions of law. Neither party contested the other's
proposed findings of fact. The only issue contested by the parties
is whether the I.G. properly decided to exclude Petitioner for five
years, effective 20 days after July 21, 1994. My findings of fact
incorporate elements from the proposed findings of each party.