$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Michael Blake Runyon, D.P.M.,
Petitioner,
- v. -
The Inspector General.
DATE: September 8, 1995
Docket No. C-95-067
Decision No. CR392
DECISION
By letter dated December 15, 1994, Michael Blake Runyon, D.P.M.,
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 him for a period of five years
from participation in the Medicare program and from participation
in the State health care programs described in section 1128(h) of
the Social Security Act (Act), which are referred to herein as
"Medicaid." 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 Act because Petitioner had been convicted of a criminal offense
related to the delivery of an item or service under the Medi-Cal
program. 1/
Petitioner filed a timely request for review of the I.G.'s action
by an administrative law judge of the Departmental Appeals Board
(DAB). The I.G. moved for summary disposition.
Because I 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, I have
decided the case on the basis of the parties' written submissions.
I find no reason to disturb the I.G.'s determination to exclude
Petitioner from participation in the Medicare and Medicaid programs
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 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
Findings of Fact and Conclusions of Law by Agreement of the
Parties 2/
1. As a result of an investigation conducted by the California
Department of Justice Bureau of Medi-Cal Fraud and the Office of
the I.G., Petitioner was charged with one felony count of
conspiracy to defraud the Medi-Cal and Medicare programs, in
violation of: section 182(a)(1) and (4) of the California Penal
Code (Conspiracy); section 14107.2(a) and (b) of the California
Welfare and Institutions Code (False Claims); section 650 of the
California Business and Professions Code (CBPC) (Unlawful
Remuneration); section 4390 of the CBPC (Prescription Forgery); and
four felony counts of forgery of a prescription for a TENS
(Transcutaneous Electrical Nerve Stimulators) device, a dangerous
drug, as defined in section 4211(b) of the CBPC, in violation of
section 4390(a) of the CBPC. I.G. Exs. 2 - 5, 14. 3/
2. Pursuant to a plea bargain, Petitioner pleaded no contest to,
and was convicted of, one count of receiving unlawful remuneration
on or about December 30, 1989, for sending medical business to
Sunmac, a medical supply company, in violation of section 650 of
the CBPC. Petitioner was sentenced to three years' probation on
condition that he disgorge his kickbacks in the amount of $3863;
pay a fine of $8500 for the cost of the investigation; and pay
restitution of $1000 through the California Department of Justice.
I.G. Exs. 17, 18.
3. The Secretary of HHS has delegated to the I.G. the duty
(pursuant to 42 U.S.C. 1320a-7(a)) of excluding persons and
entities convicted of program-related crimes from participating in
Medicare and of directing their exclusion from State health care
programs. 48 Fed. Reg. 21,662 (1983); 42 C.F.R. 1001.101 et
seq.
Other Findings of Fact and Conclusions of Law
4. During the period relevant to this case, Petitioner was a
podiatrist, practicing in California.
5. Under Medicare and Medicaid regulations, a physician must sign
a prescription for a patient to rent a TENS unit. The physician
must also complete and sign a Certificate of Medical Necessity
(CMN) for rental of the TENS device. If a patient wishes to
purchase a TENS unit, the physician must then sign a separate
written prescription after conducting a follow-up examination to
determine whether the TENS unit benefitted the patient. I.G. Ex.
3; P. Response at 2 - 3; I.G. Memorandum at 7 - 9; I.G. Reply at 4
- 6.
6. The authorizing prescription and CMN must be submitted to the
Medicare or Medicaid fiscal intermediary, along with a claim form,
for a TENS rental, TENS purchase, and subsequent TENS order for
supplies. I.G. Ex. 3.
7. The complaint filed against Petitioner alleged a fraudulent
scheme between Petitioner and Sunmac whereby Petitioner agreed to
prescribe Sunmac's TENS units, for certain of his podiatric
patients, knowing that these TENS units were not medically
necessary. Petitioner then allegedly received unlawful
remuneration from Sunmac for referring his podiatric patients to
Sunmac for the TENS units. I.G. Ex. 2 at 1; I.G. Exs. 3, 14, 18.
8. Allegedly, Sunmac submitted claims to Medicare and Medicaid
for the TENS units, which Petitioner had prescribed. Sunmac's
forms to Medicare contained falsely completed authorizing documents
and Sunmac was then paid by Medicare for the claims it submitted
based upon the false prescriptions and CMN forms. I.G. Exs. 14,
17, 18.
9. Petitioner's plea of no contest was accepted by the Los
Angeles County Municipal Court, Van Nuys Branch. The court found
him guilty as a matter of law. I.G. Ex. 17.
10. Petitioner's plea of no contest, and the court's acceptance of
that plea, constitute a conviction within the meaning of sections
1128(a)(1) and 1128(i)(3) of the Act.
11. The offense of which Petitioner was convicted -- receiving
remuneration in exchange for patient referrals -- is related to the
delivery of items or services under Medicare, within the meaning of
section 1128(a)(1) of the Act.
12. 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.
13. I do not have the authority to reduce the five-year minimum
exclusion mandated by section 1128(c)(3)(B) of the Act. 42 C.F.R.
1001.102.
14. Petitioner is not entitled to an in-person hearing, because no
disputed issue of material fact exists in this case.
PETITIONER'S ARGUMENT
Petitioner argues the following: (1) that his criminal conviction
was not related to the delivery of items or services under Medicare
or Medicaid; (2) that he did nothing improper in prescribing
medical equipment -- rather, he acted in good faith to help his
patients; and (3) that a criminal conviction for receiving
kickbacks does not justify mandatory exclusion under section
1128(a)(1) -- instead, section 1128(b) (permissive exclusion) must
be regarded as controlling.
DISCUSSION
I. The I.G. was required to exclude Petitioner pursuant to
section 1128(a)(1) of the Act.
The law relied upon by the I.G. to exclude Petitioner, section
1128(a)(1) of the Act, requires initially that Petitioner have been
convicted of a criminal offense. As previously noted, Petitioner,
a podiatrist, was charged with a number of criminal offenses, all
related to his receiving unlawful remuneration from a supplier of
medical equipment. Petitioner entered a no contest plea to the
unlawful remuneration charge. The judge accepted Petitioner's plea
and sentenced him. The Act defines the term "convicted of a
criminal offense" to include those circumstances in which a plea of
nolo contendere (no contest) by an individual has been accepted by
a federal, State, or local court. Act, section 1128(i)(3).
Therefore, I conclude that Petitioner was convicted of a criminal
offense within the meaning of sections 1128(a)(1) and 1128(i) of
the Act.
Next, the Act requires that the criminal activity must have been
related to the delivery of an item or service under Medicare or
Medicaid. A person may be guilty of a program-related offense even
if he or she did not physically deliver any items or services.
Napoleon S. Maminta, M.D., DAB 1135 (1990); Charles W. Wheeler and
Joan K. Todd, DAB 1123 (1990); Jack W. Greene, DAB CR19 (1989),
aff'd DAB 1078 (1989), aff'd sub nom., Greene v. Sullivan, 731 F.
Supp. 835 (E.D. Tenn. 1990). An offense is program-related if
there is a common-sense connection between the offense and the
Medicare or Medicaid programs. Berton Siegel, D.O., DAB 1467
(1994). I find that connection here. Petitioner admits that "he
pled no contest to . . . receiving unlawful remuneration for
sending business to Sunmac . . . ." P. Response at 3. See I.G.
Ex. 17. The receipt of unlawful remuneration for sending business
to the entity paying such remuneration constitutes a kickback. The
kickback paid by Sunmac to Petitioner involved medical equipment
(TENS units) for which Sunmac billed Medicare. Thus, Petitioner's
receipt of the kickback was directly related to the program that
paid for the equipment which was the subject of the kickback.
Niranjana B. Parikh, M.D., DAB 1334 (1992).
Applying a mandatory exclusion under these circumstances also
comports with the intent of Congress to strengthen the mandatory
exclusion provision by amendment of the exclusion laws in 1987.
See Medicare and Medicaid Patient and Program Protection Act of
1987, Pub. L. No. 100-93, 4(a)-(c), 101 Stat. 688, 689 (1987)
(codified at 42 U.S.C. 1396); Maminta, DAB 1135 at 10. In
Maminta, an appellate panel of the DAB examined the legislative
history of the mandatory exclusion provision and found that
Congress intended mandatory exclusions to be instituted whenever
the programs were victimized by a criminal offense whether or not
the offense involved actual delivery of medical care by a convicted
individual or entity. Id. at 12.
With regard to this case, Petitioner's criminal conviction for
accepting kickbacks for referring patients for the rental or
purchase of medical equipment that was not medically necessary is
sufficiently related to the delivery of an item or service under
Medicare or Medicaid to justify application of the mandatory
exclusion provisions of section 1128(a)(1). It is no defense that
the kickbacks may have been paid for medically justifiable
transactions or that Petitioner acted in good faith in prescribing
the equipment. Zenaida Macapagal, R.N., DAB CR179 (1992). It is
not necessary that I examine Petitioner's motivations, since proof
of criminal intent is not required to bring a conviction within the
ambit of section 1128(a)(1). Summit Health Limited dba Marina
Convalescent Hospital, DAB 1173 (1990). Further, with regard to
the five-year minimum mandatory exclusion, an administrative law
judge cannot look beyond the fact of conviction, or consider
evidence intended to mitigate the length of the minimum mandatory
exclusion. Asadollah Amrollahifar, Ph.D., DAB CR238 (1992).
I reject also Petitioner's argument that he should be sanctioned
under section 1128(b)(7) of the Act, which provides for the
exclusion of individuals who have committed an act described in
sections 1128A or 1128B. P. Response at 8 - 9. It is undeniable
that there is some subject matter overlap between the mandatory
exclusion for criminal convictions authorized by section 1128(a)(1)
and the permissive exclusion for fraud or kickbacks authorized by
section 1128(b)(7). Parikh, DAB 1334 at 4. However, once a person
has been convicted of a program-related criminal offense, exclusion
is mandatory under section 1128(a)(1). Id. at 4 (citing Leon
Brown, M.D., DAB CR83 (1990), aff'd DAB 1208 (1990)). Therefore,
it has consistently been held that the Secretary is under no
obligation to proceed under section 1128(b) of the Act. Thus, once
the I.G. determined that Petitioner's conviction was within the
meaning of section 1128(a)(1), the I.G. was under no obligation to
consider whether section 1128(b)(7) was applicable.
II. Petitioner is not entitled to an in-person hearing.
Since there are no disputed issues of material fact in this case,
I find that an in-person hearing is not justified. As the I.G. has
correctly noted, the only issues in this case are: (1) whether
Petitioner was convicted of a criminal offense under federal or
State law; and (2) whether Petitioner's criminal offense was
related to the delivery of an item or service under Medicare or
Medicaid. I.G. Memorandum at 16. As for the first issue,
Petitioner admitted that he was convicted of a criminal offense in
that he admitted pleading to a charge of "receiving unlawful
remuneration." P. Response at 1, 6. The second issue, whether
Petitioner's conviction was program-related, is a question of law.
I have found Petitioner's conviction to be program related. Thus,
I find that Petitioner's case can be decided without an in-person
hearing.
CONCLUSION
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that the
Petitioner herein be excluded from the Medicare and Medicaid
programs for a period of at least five years because of his
criminal conviction for accepting unlawful remuneration. Jack W.
Greene, DAB CR19 (1989), aff'd DAB 1078 (1989), aff'd sub nom.,
Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990).
The five-year exclusion is, therefore, sustained.
________________________
Joseph K. Riotto
Administrative Law Judge
1. The I.G.'s December 15, 1994 letter notifying Petitioner of
his exclusion states that Petitioner's criminal offense is related
to the delivery of an item or service "under the Medi-Cal program,"
(California's Medicaid program, a State health care program).
However, in her brief, the I.G. informed me that she had
inadvertently sent an incorrect notice to Petitioner. I.G.
Memorandum at 1 - 2, n.2. The notice should have stated that
Petitioner was convicted of a criminal offense related to the
Medicare program. The I.G. asserts that the reference to Medi-Cal
-- instead of Medicare -- is of no legal consequence because
section 1128(a)(1) of the Act requires the Secretary to exclude
"[a]ny individual or entity that has been convicted of a criminal
offense related to the delivery of an item or service under Title
XVIII [Medicare] or under any State health care program [including
Medicaid]." Id. Petitioner has not contested the adequacy of the
notice or argued that the I.G.'s inadvertent mistake supports a
contention that there is no basis for his exclusion. Thus, the
I.G.'s notice is not an issue in this case. P. Response at 4.
2. In this section, I have adopted I.G. Proposed Findings 1, 2,
and 7. Petitioner did not contest these specific findings of fact
and conclusions of law. P. Response at 2. I have independently
reviewed the record and determined that the findings have a basis
in the record. Thus, I have adopted these findings of fact and
conclusions of law, with only minor editorial changes.
Additionally, I have supplied the citations to the record that
support the findings.
3. The I.G. submitted 18 exhibits with the I.G.'s motion and
memorandum for summary disposition. I cite these exhibits as "I.G.
Ex(s). (number) at (page)." The I.G. submitted also one exhibit,
I.G. Ex. 19, with her reply brief. Petitioner submitted exhibits
A - E with his response. Since Petitioner's exhibits were not
labelled correctly, I have relabelled them and they are now
Petitioner's exhibits 1 - 5. I cite these exhibits as "P. Ex(s).
(number) at (page)." The pages in Petitioner's response brief are
not numbered. I have numbered these pages. Page 1 begins with the
"Introduction" and the last page is 12. Neither party has objected
to the other party's exhibits. In the absence of objection, I
admit both parties' exhibits into evidence.