Mohammad H. Azarpira, D.D.S., CR No. 372 (1995)

$05:Exclusion Case

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Mohammad H. Azarpira, D.D.S.,

Petitioner,

- v. -

The Inspector General.

DATE: April 28, 1995
Docket No. C-93-085
Decision No. CR372


DECISION

By letter dated April 23, 1993, the Inspector General (I.G.) of the
United States Department of Health and Human Services (DHHS)
notified Petitioner Mohammad H. Azarpira 1/ that, as a result of
his failure to repay his Health Education Assistance Loans (HEALs)
or to enter into an agreement to repay his HEALs, he was being
excluded under sections 1128(b)(14) [42 U.S.C. 1320a-7(b)(14)]
and 1892 [42 U.S.C. 1395ccc] of the Social Security Act (Act) 2/
from participation in Medicare and in the State health care
programs enumerated in section 1128(h) of the Act [42 U.S.C.
1320a-7(h)]. 3/

By letter dated June 18, 1993, Petitioner timely requested a
hearing before an administrative law judge (ALJ). 4/ During a
telephone prehearing conference held on July 28, 1993, Petitioner
stipulated that: 1) he had received a HEAL; 2) he had not repaid
his HEAL; and 3) he was in default on his HEAL. August 2, 1993
Prehearing Order. Petitioner requested, however, that Judge Leahy
hear the issue of whether, prior to his exclusion, Petitioner was
given all reasonable administrative opportunities to repay his
HEAL. Id. During this conference also, the parties agreed the
case could be heard via an exchange of written briefs and
documentary evidence in lieu of an in-person hearing. 5/ Id.

Upon careful consideration of the record before me, I find that
there exist no facts of decisional significance genuinely in
dispute and that the only matters to be decided are the legal
implications of the undisputed material facts. I find that DHHS
has taken all reasonable steps available to secure Petitioner's
repayment of his HEALs. Consequently, it was reasonable for the
I.G. to exclude Petitioner from participation in Medicare and to
direct his exclusion from participation in Medicaid. Social
Security Act, section 1128(b)(14) [42 U.S.C. 1320a-7(b)(14)].
Further, I conclude that the period of exclusion directed and
imposed against Petitioner by the I.G. is reasonable. 42 C.F.R.
1001.1501.


APPLICABLE LAW

Section 1128(b)(14) of the Act [42 U.S.C. 1320a-7(b)(14)]
provides in pertinent part as follows:

(b) PERMISSIVE EXCLUSION.-The Secretary [of DHHS] may exclude the
following individuals and entities from participation in any
program under title XVIII [Medicare] and may direct that the
following individuals and entities be excluded from participation
in any State health care program [defined in subsection (h) of this
section as including, but not limited to, Medicaid]:

(14) DEFAULT ON HEALTH EDUCATION LOAN OR SCHOLARSHIP
OBLIGATIONS.-Any individual who the Secretarydetermines is in
default on repayments ofscholarship obligations or loans in
connection withhealth professions education made or secured,
inwhole or in part, by the Secretary and with respectto whom the
Secretary has taken all reasonable stepsavailable to the Secretary
to secure repayment ofsuch obligations or loans . . .

Social Security Act, section 1128(b)(14) [42 U.S.C.
1320a-7(b)(14)].


ISSUES

The only issue in this case is whether, prior to his exclusion,
Petitioner was given all reasonable administrative opportunities to
repay his HEALs.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. While studying dentistry, Petitioner applied for and received
the following HEALs:

$10,000.00 1984/February I.G. Exs. 3, 25
3,000.00 1984/April I.G. Exs. 4, 25
2,500.00 1985/January I.G. Exs. 5, 6, 25
8,865.00 1985/March I.G. Exs. 7, 8, 25
4,000.00 1985/June I.G. Exs. 9, 10, 25
11,750.00 1985/November I.G. Exs. 11, 12, 25
15,000.00 1986/June I.G. Exs. 13, 14, 25


2. HEALs are insured by the United States Government. I.G. Ex.
25.

3. Due to Petitioner's failure to repay his seven HEAL notes as
promised, judgment in the amount of $90,039.93 was entered against
him in favor of the Student Loan Marketing Association (SLMA),
which had purchased his notes. The judgment was entered on October
2, 1990, in the United States District Court, Northern District of
Illinois, Eastern Division, Case No. 90 C 3248. I.G. Exs. 17, 18.


4. SLMA assigned its judgment to the United States Government and
submitted a claim to the Health Resources and Services
Administration (HRSA) of the Public Health Service (PHS) of DHHS
for the amount due. I.G. Exs. 20, 21, 25, 26.

5. By letter dated January 30, 1991, Petitioner was notified by
HRSA that $92,023.00 was due in payment of his HEALs as of January
18, 1991. HRSA instructed Petitioner on how, if he was unable to
remit the total due within 30 days, he could request entry into a
repayment agreement. I.G. Ex. 22.

6. Petitioner failed to make any payment in response and failed
to respond to the instructions on how to enter into a repayment
agreement. I.G. Ex. 25.

7. By letter dated April 4, 1991, Petitioner was notified by HRSA
that $93,453.42 was due in payment of his HEALs as of March 31,
1991. Petitioner was advised that his case would be referred to
the United States Attorney for enforced collection if he failed to
indicate within 15 days how he intended to resolve his delinquent
indebtedness. I.G. Ex. 23.

8. Petitioner failed to make any payment in response and failed to
respond in writing to this letter. I.G. Ex. 25.

9. By letter dated July 17, 1991, Petitioner was notified by HRSA
that $95,261.31 was due in payment of his HEALs as of July 17,
1991. Petitioner was advised again that his case would be referred
to the United States Attorney for enforced collection if he failed
to indicate within 15 days how he intended to resolve his
delinquent indebtedness. I.G. Ex. 24.

10. Petitioner failed to make any payment in response and failed
to respond in writing to this letter. I.G. Ex. 25.

11. Petitioner was notified by HRSA, in a document dated November
10, 1992 and entitled Certificate of Indebtedness, that he owed
$105,050.22 in payment of his HEALs as of October 31, 1992. HRSA
noted that Petitioner had failed to make any payments and had
failed to respond to any of the instructions on how to enter into
a repayment agreement. As a result, HRSA notified Petitioner that
his debt had been referred to the Department of Justice for
enforcement of the judgment entered against him. I.G. Ex. 25.

12. Petitioner failed to make any payment in response to HRSA's
notice and failed to respond to the instructions on how to enter
into a repayment agreement. I.G. Br. at 7.

13. By letter dated December 14, 1992, HRSA again sent Petitioner
instructions on how to establish a repayment agreement. HRSA
advised Petitioner that, as an alternative, Petitioner could
establish an offset agreement by which his Medicare and/or Medicaid
reimbursements would be applied to his account. HRSA further
advised Petitioner as follows:

If you are unwilling or unable to negotiate an offset or
repayment agreement within 60 days, we will immediately refer your
case to the Office of the Inspector General (OIG) for initiation of
an exclusion from participation in the Medicare program . . . [and]
any State health care program, including Medicaid . . . until your
entire debt has been repaid.

I.G. Ex. 27.

14. Petitioner failed to make any payment in response, failed to
respond to the instructions on how to enter into a repayment
agreement, and failed to provide the information and signed
statement necessary to establish an offset agreement. I.G. Br. at
8.

15. Petitioner failed to make any payment on his HEALs until June
1993, after his exclusion had become effective. On June 30, 1993,
Petitioner made a $50.00 payment through the U.S. Attorney's
office. P. Ex. 4.

16. The repayment agreement Petitioner entered into with the U.S.
Attorney's office in the summer of 1993, after his exclusion had
become effective, does not pay even the interest that accrues each
month on his HEALs. I.G. Br. at 9, footnote 4; I.G. R. Br. at 1-2;
P. Ex. 4.

17. Petitioner remains in default on repayment of his HEALs, and
he now owes a balance in excess of $112,000.00. I.G. R. Br. at 2.


18. The Secretary has taken all reasonable steps available to
secure repayment of Petitioner's HEALs. 42 C.F.R.
1001.1501(a)(2); Finding 13.

19. The Secretary has delegated to the I.G. the authority to
exclude individuals and entities from participation in Medicare and
to direct exclusion from participation in Medicaid. 53 Fed. Reg.
12993 (1988); see also 1987 U.S.C.C.A.N. 682, 695.

20. The period of exclusion which the I.G. imposed and directed
against Petitioner is reasonable. 42 C.F.R. 1001.1501.


DISCUSSION

I. The I.G. has the authority to exclude Petitioner from
participating in Medicare and to direct that Petitioner be excluded
from participating in Medicaid.

Section 1128(b)(14) of the Act [42 U.S.C. 1320a-7(b)(14)]
provides that the Secretary (or her delegate, the I.G.) may exclude
a party from participating in Medicare and Medicaid who:

is in default on repayments of scholarship obligations or
loans in connection with health professions education made or
secured, in whole or in part, by the Secretary and with respect to
whom the Secretary has taken all reasonable steps available to the
Secretary to secure repayment of such obligations or loans . . .

There is no dispute that Petitioner's HEAL obligations arise from
loans made "in connection with health professions education."
There is also no dispute that Petitioner defaulted on repayment of
his HEALs. Therefore, if I conclude that the Secretary took "all
reasonable steps available" to secure repayment from Petitioner of
his HEALs, I must find that the I.G. had authority to exclude
Petitioner under section 1128(b)(14) of the Act [42 U.S.C.
1320a-7(b)(14)].

The efforts made by HRSA to obtain Petitioner's repayment of his
HEAL debt included sending notices to Petitioner over a nearly
two-year period. Specifically, notices were sent to Petitioner on
January 30, 1991 (I.G. Ex. 22); April 4, 1991 (I.G. Ex. 23); July
17, 1991 (I.G. Ex. 24); November 10, 1992 (I.G. Ex. 25); and
December 14, 1992 (I.G. Ex. 27). Petitioner never followed HRSA's
instructions for establishing a repayment agreement, nor did he
send any payment in response.

In the last notice, sent to Petitioner on December 14, 1992,
Petitioner was advised that an alternative method of repayment
would be for him to enter into an offset agreement. Under an
offset agreement, Petitioner's Medicare and Medicaid reimbursements
would be applied to his HEALs. Petitioner did not provide the
information and signed statement necessary to establish an offset
agreement.

Petitioner asserts that these efforts do not constitute "all
reasonable steps available" on the part of the Secretary to secure
repayment of Petitioner's HEALs. Petitioner argues that "[s]ending
me a letter with financial statement forms every now and then does
not resolve anything." P. Br. at 8.

The record reflects, however, that Petitioner was sent numerous
demands to repay his HEALs. Petitioner knew he was in default.
Yet, notwithstanding this knowledge, Petitioner made no payment
from October 1, 1989, when his payments were to have begun (I.G.
Ex. 25), until June 1993, after his exclusion had become effective.
P. Ex. 4.

Petitioner alleges that his income was not high enough to support
much repayment during the years through 1992 and that he could not
afford the monthly payments demanded in negotiations with DHHS.
However, even assuming this is true, Petitioner's refusal to
complete the financial statements necessary to enter into a
repayment agreement prevented HRSA from knowing what Petitioner
could afford.
Petitioner's negotiations with the U.S. Attorney's office and his
repayment "agreement with the U.S. Justice Dept.," have resulted in
his making some payments on his HEALs. P. Br. at 3-4; I.G. Br. at
8-9. Any payments made, however, were made after his exclusion had
become effective. Further, Petitioner's payments have been too
small to pay even the interest that accrues on his HEALs.
Specifically, PHS reports that interest of $700.00 per month
accrues on Petitioner's HEAL debt. I.G. Br. at 9, footnote 4.

PHS is unwilling to stay Petitioner's exclusion for a repayment
schedule that would fail to reduce Petitioner's HEAL debt. I do
not construe the statutory phrase "[a]ll reasonable steps
available" to mean that the Secretary must excuse individuals'
repayment obligations based on their financial status. Nor do I
construe it to mean that the Secretary should accept repayment
arrangements which do not accomplish the objective of repayment, or
which require the Secretary to enter into agreements that are not
in the public interest. See James F. Cleary, D.D.S., DAB CR252 at
12-13 (1993).

The intent of Congress in enacting section 1128(b)(14) of the Act
was, in part, to provide the Secretary with a mechanism by which
she could assert some leverage over individuals who default on
their HEALs. Thus, section 1128(b)(14) is, among other things, a
debt collection tool by which the Secretary can collect a debt once
voluntary persuasion has failed. In assuming Petitioner's HEAL
debt, the Secretary acquired the right -- and the obligation -- to
collect on that debt. See Charles K. Angelo, Jr., M.D., DAB CR290
at 11 (1993).

Section 1128(b)(14) of the Act requires the Secretary only to take
all reasonable steps available to secure repayment. I construe the
term "all reasonable steps available" to mean all reasonable and
legitimate means of debt collection. The relevant regulation
states that all reasonable steps will have been taken to collect a
HEAL debt if PHS offers a debtor a Medicare and Medicaid
reimbursement offset arrangement as required by section 1892 of the
Act prior to the I.G.'s imposing an exclusion. 42 C.F.R.
1001.1501(a)(2).

The Secretary reasonably could infer, from Petitioner's conduct,
that Petitioner was unlikely to repay his debt voluntarily. The
Secretary provided Petitioner with many opportunities to repay his
debt and to enter into a repayment agreement. Petitioner was
offered the opportunity to enter into a Medicare and Medicaid
reimbursement offset agreement prior to his exclusion. Petitioner
did not avail himself of any of these opportunities for repayment.
I conclude that the Secretary did that which was necessary to
establish conclusively that all reasonable steps available were
taken to collect Petitioner's HEAL debt. 42 C.F.R.
1001.1501(a)(2).

I have found that the Secretary took all reasonable steps to
collect Petitioner's HEAL debt prior to excluding him.
Consequently, I find that the I.G. had the authority to exclude
Petitioner from participating in Medicare and to direct that
Petitioner be excluded from participating in Medicaid. Social
Security Act, section 1128(b)(14) [42 U.S.C. 1320a-7(b)(14)]; 42
C.F.R. 1001.1501.

II. The period of exclusion imposed and directed against
Petitioner by the I.G. under section 1128(b)(14) of the Act is
reasonable.

The notice of exclusion which the I.G. sent to Petitioner advised
him that his exclusion would remain in effect until his debt was
completely satisfied. Thus, in this case, only when Petitioner's
HEALs are fully repaid, will Petitioner's HEAL debt have been
resolved to the satisfaction of the Secretary. 42 C.F.R.
1001.1501; 6/ I.G. Br. at 12-15.

Under the circumstances of this case, in which Petitioner:

(1) failed to respond to instructions on how to enter into a
repayment agreement;

(2) failed to provide the information and signedstatement
necessary to establish an offsetagreement;

(3) made his first payment only after his exclusionhad become
effective; and

(4) has never made payments large enough to pay eventhe
interest that accrues on his HEALs;

exclusion until Petitioner's HEALs are fully repaid is a reasonable
course of action.


CONCLUSION

The Secretary has taken all reasonable steps available to secure
Petitioner's repayment. Consequently, it is reasonable for the
I.G. to exclude Petitioner from participating in Medicare and to
direct that he be excluded from participating in Medicaid.
Furthermore, the period of exclusion imposed by the I.G. is
reasonable.

________________________
Jill S. Clifton
Administrative Law Judge

1. Petitioner is known also as M. Hassan Azarpira and Hassan
Azarpira. Petitioner's brief (P. Br.) at page 10; Petitioner's
exhibit (P. Ex.) 5.

2. This Decision does not address Petitioner's exclusion under
section 1892 of the Act, for two reasons. First, it is not clear
that I have the authority to review an exclusion imposed pursuant
to section 1892. See I.G.'s brief (I.G. Br.) at page 3; James F.
Cleary, D.D.S., DAB CR252 (1993); Charles K. Angelo, Jr., M.D., DAB
CR290 (1993); and Joseph Marcel-Saint Louis, M.D., DAB CR320
(1994). Second, for purposes of my decision in this case, the
issue is moot, because I have found Petitioner's exclusion to be
authorized under section 1128(b)(14) of the Act.

3. The State health care programs from which Petitioner has
been excluded include Medicaid, the Maternal and Child Health
Services Block Grant under Title V of the Act, and the Block Grants
to States for Social Services under Title XX of the Act. Unless
otherwise indicated, hereafter I refer to the State health care
programs from which Petitioner has been excluded as "Medicaid."

4. This case was assigned originally to Administrative Law
Judge Mimi Hwang Leahy. The case was reassigned to me on April 14,
1995.

5. In this Decision, I cite the I.G.'s motion for summary
disposition and accompanying brief as I.G. Br. at (page). I cite
Petitioner's response as P. Br. at (page). I cite the I.G.'s reply
to Petitioner's response as I.G. R. Br. at (page).

The I.G. submitted 28 exhibits (I.G. Exs. 1-28) with her motion for
summary disposition. Petitioner submitted seven exhibits (P. Exs.
1-7) with his opposition. The parties did not object to the
admission of each other's proposed exhibits. Thus, I am admitting
I.G. Exs. 1-28 and P. Exs. 1-7 into evidence.

6. I note, however, that under 42 C.F.R. 1001.1501(b), if
Petitioner's obligations are otherwise resolved to PHS'
satisfaction, Petitioner may be eligible for reinstatement prior to
having fully repaid his HEALs. However, this does not detract from
my finding that it is reasonable here that Petitioner remain
excluded until his HEALs have been fully repaid.