$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Subha Reddy,
Petitioner,
- v. -
The Inspector General.
DATE: July 13, 1995
Docket No. C-95-007
Decision No. CR384
DECISION
By letter dated September 16, 1994, Subha Reddy, 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 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. asserted that an exclusion of at
least five years was 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 Medicaid.
Petitioner filed a timely request for review of the I.G.'s action.
On January 4, 1995, I held a prehearing conference in this case.
During that conference, the I.G. moved for disposition of the case
without an in-person hearing. Petitioner objected and requested an
in-person hearing. Having reviewed the parties' submissions, I
have determined that there are no facts of decisional significance
genuinely in dispute and that the only matters to be decided are
the legal implications of the undisputed facts. Thus, I have
decided the case on the basis of the parties' written submissions.
Based on the undisputed facts and the law, I have determined that
the I.G. 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. During the period relevant to this case, Petitioner was
employed as a physician's assistant at the Kelly Plaza Medical
Clinic in Detroit, Michigan. P. Br. at 2. 2/
2. Also during the period relevant to this case, Petitioner was
not licensed to practice medicine as either a physician or a
physician's assistant in the United States. P. Br. at 2.
3. Under Michigan law, an individual who is not licensed as a
physician or physician's assistant cannot legally prescribe
substances containing codeine. P. Br. at 6.
4. If an unlicensed individual prescribes substances containing
codeine to a Medicaid patient, and submits a claim for his or her
services to Medicaid, under Michigan law the individual is presumed
to have knowingly submitted a false claim. P. Br. at 6.
5. Petitioner's responsibilities as a physician's assistant
included the prescribing of medications to Medicaid-eligible
patients at the Kelly Plaza Medical Clinic. I.G. Br. at 5; I.G.
Ex. 6 at 2.
6. On October 6, 1993, Petitioner was charged with two counts of
submitting false claims to the State of Michigan for reimbursement.
I.G. Ex. 7.
7. Specifically, Petitioner was alleged to have illegally
prescribed Tylenol/Acetaminophen with Codeine to Medicaid patients
and to have knowingly submitted false claims for her services to
the State of Michigan for Medicaid reimbursement. I.G. Ex. 7.
8. Petitioner entered a guilty plea to two counts of knowingly
filing false claims for Medicaid reimbursement. I.G. Ex. 8.
9. The court accepted Petitioner's guilty plea, and sentenced her
to two years' probation, performance of 150 hours of community
service, and fined her $720. I.G. Exs. 8, 9.
10. Petitioner was convicted of a criminal offense, within the
meaning of section 1128(i)(3) of the Act. Findings 1-9.
11. Petitioner's conviction of a criminal offense was based upon
her submission of false Medicaid claims
regarding items which she had illegally prescribed. I.G. Exs. 7-9;
Findings 1-10.
12. Petitioner's conviction of a criminal offense is related to
the delivery of services under Medicaid, within the meaning of
section 1128(a)(1) of the Act. I.G. Exs. 7-9; Findings 1-11.
13. An administrative law judge (ALJ) is without authority to
review the I.G.'s exercise of discretion to exclude an individual
or determine the scope or effect of an exclusion. 42 C.F.R.
1005.4(c)(5) (1993).
14. The preamble to the regulations which govern this case states
explicitly that "the ALJ is not authorized under these regulations
to modify the date of commencement of the exclusion." 57 Fed. Reg.
3298, 3325 (1992).
15. I do not have the authority to change the effective date of
Petitioner's exclusion. Findings 13-14.
16. Any exclusion imposed pursuant to section 1128(a) must be for
a period of at least five years. Section 1128(c)(3)(B) of the Act.
17. Only if an exclusion is for a period of more than five years,
may an individual's cooperation with federal or State officials
(which cooperation results in others being convicted, excluded, or
assessed a civil monetary penalty), act as a mitigating factor to
reduce the individual's period of exclusion. 42 C.F.R
1001.102(c).
18. Since Petitioner received the minimum, mandatory five-year
period of exclusion, the mitigating factor of cooperation with
federal or State officials does not apply to her case. Findings
16-17.
19. A defendant in a criminal proceeding does not have to be
advised of all possible consequences which may flow from his plea.
U.S. v. Suter, 755 F.2d 523, 525 (7th Cir. 1985).
20. Petitioner's argument that she did not know that her guilty
plea would lead to a five-year exclusion does not mitigate against
the length of her exclusion. Finding 19.
21. Petitioner may not collaterally attack her conviction by
contending that she did not know that her practice of prescribing
codeine-based substances to Medicaid patients, without a license,
was against the law. 42 C.F.R. 1001.2007(d).
22. Petitioner's argument that she has been found by a State
administrative law judge to be a person of good moral character is
not relevant to any of the issues in this case. See Finding 16.
23. The I.G. was required to exclude Petitioner from participation
in Medicare and Medicaid for a period of five years, pursuant to
sections 1128(a)(1) and 1128(c)(3)(B) of the Act. Findings 2-12,
16.
PETITIONER'S ARGUMENT
Petitioner argues that her exclusion should be held in abeyance
until she is able to complete her residency program at Wayne State
University's School of Medicine. Petitioner alleges, in support of
her argument, that the I.G. held an exclusion in abeyance in a case
similar to hers.
Alternatively, Petitioner states that she understands that her
exclusion is mandatory and alleges that the primary issue is
"whether the Government should exclude her from program
participation for an additional period." P. Br. at 1. Petitioner
argues that "no additional action [should] be taken" since she was
a key witness for the State of Michigan in its prosecution of one
of her former employers; she was naive regarding medical practices
in the United States and did not realize that her actions were
against the law; she was unaware that her guilty plea could lead to
her exclusion from Medicare and Medicaid; and, finally, that
findings made by an ALJ for the Michigan Department of Commerce
demonstrate that she is a person of good moral character.
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 a 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.
For purposes of the Act, an individual is considered to have been
"convicted" of a criminal offense, when, among other bases, the
individual's plea of guilty has been accepted by a State court.
Section 1128(i)(3) of the Act. In the present case, Petitioner
pled guilty to two counts of filing false Medicaid claims. 3/
Findings 6-8. The Michigan State court accepted Petitioner's plea
and sentenced her to two years' probation, 150 hours of community
service, and fined her $720. Finding 9. Accordingly, I find that
Petitioner was convicted of a criminal offense within the meaning
of sections 1128(a) and 1128(i) of the Act.
Further, I find that Petitioner's conviction is related to the
delivery of a service under Medicaid. Petitioner's crime involved
the fact that she knowingly submitted of a false Medicaid claim for
Tylenol/Acetaminophene with Codeine to the State of Michigan, when,
as an unlicensed individual, Petitioner could not legally prescribe
such a substance. Findings 2-9. There exists an obvious nexus
between the Medicaid items which Petitioner illegally prescribed
and Petitioner's submission of false Medicaid claims. That nexus
lies in the relationship between the Medicaid items prescribed by
Petitioner and the receipt of reimbursement checks from Medicaid
for her services in prescribing these items. Thus, Petitioner's
conviction is "related to the delivery of an item or service under
Medicaid," pursuant to section 1128(a)(1) of the Act.
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 her exclusion should be held in abeyance
until she is able to complete her residency program. P. Br. at 1.
In support of her position, Petitioner asserts that, in at least
one other instance, the I.G. agreed to delay the imposition of a
five-year exclusion. Petitioner contends that in the case of Dr.
Falih Kazangy, pursuant to a settlement agreement, the I.G. held
Dr. Kazangy's exclusion in abeyance pending completion of his
residency training. P. Br. at 10. Petitioner argues that she
should be offered the same settlement agreement which was given to
Dr. Kazangy. 4/ Id.
In essence, Petitioner's request is that I change the commencement
date of her exclusion. However, I do not believe that I am
authorized to change the commencement date of Petitioner's
exclusion. I interpret the regulations governing this case to
preclude me from reviewing the I.G.'s exercise of discretion in
excluding Petitioner or in determining the scope or effect of her
exclusion. 42 C.F.R. 1005.4(c)(5). I agree with the analysis
of the ALJ in the case of Laurence Wynn, M.D., DAB CR344 (1994),
when he 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. Indeed, the
preamble to the regulations governing this case states explicitly
that "the ALJ is not authorized under these regulations to modify
the date of commencement of the exclusion." 57 Fed. Reg. 3298,
3325 (1992). Furthermore, an appellate panel of the DAB concluded
that appellate panels and ALJs of the DAB have 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).
With regard to Petitioner's argument that she be offered the same
settlement agreement as that allegedly entered into by Dr. Kazangy,
it is within the the I.G.'s discretion to decide whether or not to
enter into settlement agreements with individuals who have been
excluded. In this case, the I.G. apparently considered
Petitioner's request to have her exclusion held in abeyance pending
completion of her residency program and decided not to grant her
request. I.G. Exs. 2, 3. I do not have the authority to review
this decision and I cannot order the I.G. to delay imposition of an
exclusion or to enter into settlement agreements with petitioners.
Petitioner argues also that the I.G. should not "exclude her from
program participation for an additional period" since she
cooperated with the State of Michigan in its prosecution of Dr.
Kelly, the Medical Director of the clinic where Petitioner was
employed. P. Br. at 1, 7-8. In addition, Petitioner asserted that
she made arrangements with the Michigan State Attorney General's
Office to cooperate in their investigation of a kickback scheme
involving clinical laboratories and durable medical equipment
suppliers in the Detroit area. P. Br. at 8. While under certain
circumstances an individual's cooperation with federal or State
officials may be considered as a mitigating factor in reducing the
length of an exclusion, it can only mitigate to reduce an exclusion
which is longer than the minimum five-year period. 42 C.F.R
1001.102(c) (1993). In this case, the I.G. did not impose an
exclusion of more than five years. Thus, I cannot consider
Petitioner's cooperation with State authorities as a factor
mitigating against the length of her exclusion, since I do not have
the authority to reduce a five-year minimum exclusion mandated by
section 1128(c)(3)(B) of the Act.
Further, Petitioner argues that "no additional action [should] be
taken," because she was unaware that her plea could serve as the
basis for the I.G.'s exclusion. P. Br. at 1, 7. This argument is
without merit. I rejected a similar argument in the case of
Douglas Schram, R. Ph., DAB CR215 (1992), aff'd, DAB 1372 (1992).
In rejecting Petitioner's argument, I cited U.S. v. Suter, 755 F.2d
523, 525 (7th Cir. 1985), and I noted that the court had held that
a defendant in a criminal proceeding does not have to be advised of
all possible consequences which may flow from his plea, which
consequences may include, as is the case here, temporarily being
barred from the receipt of government reimbursement for
professional services.
Petitioner contends that she did not realize that her actions were
against the law. Specifically, Petitioner asserts that she did not
knowingly make a false Medicaid claim, as required by the Michigan
law she was convicted under, since she was naive regarding medical
practices in the United States. P. Br. at 8. Petitioner asserts
further that she told her employers she was not licensed as a
physician or physician's assistant in the United States and that
they assured her that this was not a problem. Id. Petitioner's
arguments, however, go to the merits of her criminal case and
amount to a collateral attack on her conviction. Such collateral
attacks on a criminal conviction are beyond my scope of review and
I may not consider them here.
The regulations which apply in this case provide that "[w]hen the
exclusion is based on the existence of a conviction, . . . the
basis for the underlying determination is not reviewable and the
individual or entity may not collaterally attack the underlying
determination, either on substantive or procedural grounds." 42
C.F.R. 1001.2007(d). Thus, Petitioner may not argue the merits
of her criminal case in this forum. An appellate panel of the DAB
discussed the reasoning behind this rule, with regard to a
mandatory exclusion taken under section 1128(a)(2) of the Act in
the case of Peter J. Edmonson, DAB 1330 (1992). In Edmonson, the
appellate panel held as follows:
It is the fact of the conviction which causes the
exclusion. The law does not permit the Secretary
to look behind the conviction. Instead, Congress
intended the Secretary to exclude potentially
untrustworthy individuals or entities based on
criminal convictions. This provides protection
for federally funded programs and their
beneficiaries and recipients, without expending
program resources to duplicate existing criminal
processes.
Petitioner asserts, in essence, that she has appealed her criminal
conviction in the Detroit Recorder's Court and that her exclusion
should be stayed pending the outcome of her appeal. P. Br. at 10
n.3. If Petitioner is successful with her appeal there would be no
basis for her exclusion. Upon application to the I.G., she would
be reinstated. 42 C.F.R. 1001.3005. At the present time,
however, there is no basis for staying the effect of the exclusion.
Lastly, Petitioner alleges that in disciplinary proceedings before
an ALJ of the State of Michigan, Department of Commerce, Bureau of
Occupational and Professional Regulation, Office of Legal Services,
the ALJ found that Petitioner was subject to professional
disciplinary action due to her conviction, but not subject to
disciplinary action due to a lack of good moral character. P. Br.
at 9. However, a finding of good moral character is not relevant
to any of the issues before me. As I stated earlier, sections
1128(a)(1) and 1128(c)(3)(B) of the Act mandate a five-year
exclusion when an individual has been convicted of a
program-related offense. Therefore, while statements attesting to
Petitioner's good character may be factors that reflect positively
upon her, I have no authority to consider them as bases for
reducing the five-year exclusion imposed and directed against her
by the I.G.
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 her conviction of a
criminal offense related to the delivery of services under
Medicaid. Neither the I.G. nor an ALJ is authorized to reduce a
five-year minimum mandatory exclusion.
Petitioner's five-year exclusion is, therefore, sustained.
________________________
Joseph K. Riotto
Administrative Law Judge
1. I refer to all programs from which Petitioner has been
excluded, other than Medicare, as "Medicaid."
2. I cite to Petitioner's brief as P. Br. at (page). I cite to
the I.G.'s brief as I.G. Br. at (page). Petitioner submitted one
exhibit with her brief, which I cite to as P. Ex. 1. The I.G.
submitted nine exhibits with her brief, which I cite to as I.G.
Exs. 1-9. Since neither party has objected to the exhibits offered
by the other party, I admit P. Ex. 1 and I.G. Exs. 1-9 into
evidence.
3. Petitioner asserts that she pled no contest to the two
counts of filing false Medicaid claims, but she has not offered any
evidence to support her contention. However, even if I accept
Petitioner's statement as true, it is immaterial here whether
Petitioner pled guilty or no contest to the charges against her.
This is because the definition of "conviction" under section
1128(i)(3) of the Act, includes "when a plea of [either] guilty or
nolo contendre by the individual or entity has been accepted by a
Federal, State or local court." Emphasis added.
4. Dr. Kazangy's case has never been before the Departmental
Appeals Board (DAB) and Petitioner did not provide any evidence of
an agreement between Dr. Kazangy and the I.G. Therefore,
Petitioner's assertions regarding Dr. Kazangy are mere allegations.