$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Nazirul Quayum, D.D.S.,
Petitioner,
- v. -
The Inspector General.
DATE: December 15, 1995
Docket No. C-95-127
Decision No. CR408
DECISION
For the reasons discussed below, I conclude that the three-year
exclusion from participating in the Medicare, Medicaid, Maternal
and Child Health Services Block Grant and Block Grants to States
for Social Services programs 1/, imposed and directed against
Nazirul Quayum, D.D.S. (Petitioner), is reasonable.
Procedural History
By letter dated March 21, 1995, the Inspector General (I.G.) of the
United States Department of Health and Human Services (DHHS)
notified Petitioner that he was being excluded for three years from
participating as a provider in Medicare and Medicaid.
The I.G. notified Petitioner that he was being excluded as a result
of his conviction in New York of a criminal offense in connection
with the interference with or obstruction of an investigation into
a criminal offense involving fraud, theft, embezzlement, breach of
fiduciary responsibility, financial misconduct, patient abuse or
neglect, or program-related crime. The I.G. further advised
Petitioner that exclusions after such a conviction are authorized
by section 1128(b)(2) of the Social Security Act (Act). 2/
Petitioner filed a request for hearing. During a prehearing
conference held on June 2, 1995, the parties agreed that there were
no disputed issues of material fact which would need to be resolved
by an in-person hearing. The parties consequently agreed to a
schedule for filing briefs supported by documentary evidence. 3/
During the prehearing conference, Petitioner admitted that he pled
guilty to one count of attempted perjury as part of a plea
agreement. Petitioner denied, however, that the attempted perjury
to which he pled guilty was in connection with the interference
with or obstruction of an investigation into a criminal offense
involving fraud, theft, embezzlement, breach of fiduciary
responsibility, financial misconduct, patient abuse or neglect, or
program-related crime, within the meaning of section 1128(b)(2) of
the Act.
Upon careful consideration of the record before me, I find that no
facts material to my decision are genuinely in dispute and that the
only matters to be decided are the legal implications of the
undisputed facts. I conclude that Petitioner is subject to the
exclusion provisions of section 1128(b)(2) of the Act, and I affirm
the I.G.'s determination to exclude Petitioner from participation
in Medicare and Medicaid for a period of three years.
Applicable Law
Section 1128(b)(2) of the Act authorizes the I.G. to exclude --
[a]ny individual or entity that has been convicted, under
Federal or State law, in connection with the interference with or
obstruction of any investigation into any criminal offense
described in [section 1128(b)(1) or section 1128(a) of the Act].
Criminal offenses described in section 1128(a) include those
related to the delivery of an item or service under the Medicare or
State health care programs 4/ and those related to neglect or abuse
of patients in connection with the delivery of a health care item
or service.
Criminal offenses described in section 1128(b)(1) include those
relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct in connection with
the delivery of a health care item or service or with respect to
any act or omission in a program operated by or financed in whole
or in part by any federal, State, or local government agency.
Issues
The first issue is whether Petitioner's conviction was in
connection with the interference with or obstruction of an
investigation into a criminal offense described in section 1128(a)
or 1128(b)(1) of the Act, within the meaning of section 1128(b)(2)
of the Act.
A further issue is whether the length of the exclusion imposed and
directed against Petitioner -- three years -- is reasonable.
Findings of Fact and Conclusions of Law
1. Petitioner is a dentist, practicing in New York.
2. On April 15, 1994, Petitioner pled guilty to attempted perjury
in the first degree, in satisfaction of Count 1 of Indictment No.
11775/93, in Kings County, New York. I.G. Exs. 1 and 2.
3. Count 1 charges that Petitioner testified falsely before a
special grand jury on January 26, 1993, and that Petitioner's false
testimony was material to the special grand jury's investigation of
a Medicaid fraud scheme involving employees of pharmacies located
near Petitioner's dental offices. I.G. Ex. 2.
4. At his plea allocution, Petitioner admitted to the court that
he knowingly made false statements under oath before the grand
jury, related to conversations he had "with employees in the
pharmacy as well as in the medical center." I.G. Ex. 1 at 12, 13.
5. At his plea allocution, Petitioner specifically admitted that
his false statements were in response to questions from the grand
jury that related to Medicaid fraud. I.G. Ex. 1 at 15.
6. On May 27, 1994, the court sentenced Petitioner to pay a fine
of $5000, to be on probation for five years, to provide 250 hours
of community service, and to pay a five-dollar crime victim's
assistance fee. I.G. Ex. 1 at 13-14; P. Request for Hearing at
3-4.
7. Petitioner was convicted of a criminal offense within the
meaning of section 1128(i)(3) of the Act. Findings 2, 6.
8. Petitioner's conviction of Count 1 of the indictment was in
connection with the interference with or obstruction of an
investigation into a criminal offense relating to the delivery of
an item or service under Medicaid (a program-related crime), as
described in section 1128(a), within the meaning of section
1128(b)(2) of the Act. Findings 2-7.
9. The Secretary of DHHS (Secretary) has delegated to the I.G. the
authority to exclude individuals from participation in Medicare and
to direct their exclusion from participation in Medicaid. 48 Fed.
Reg. 21,662 (1983); 53 Fed. Reg. 12,993 (1988).
10. There are no aggravating or mitigating factors as specified in
the regulations.
11. In the absence of aggravating or mitigating factors, the I.G.
is required to exclude Petitioner from participating in Medicare
and to direct his exclusion from participating in Medicaid for a
three-year period. Act, section 1128(c)(3)(A); 42 C.F.R.
1001.301(b) (1994).
12. A three-year period of exclusion is reasonable.
DISCUSSION
A. Petitioner was convicted of a criminal offense.
Petitioner admits that he pled guilty to one count of attempted
perjury. June 14, 1995 Order and Schedule for Filing Briefs and
Documentary Evidence at 1; P. Br. at 1-2. Petitioner also admits
that the court sentenced him, based on his guilty plea. P. Letter
Brief at 3-4. Petitioner has not expressly admitted that he was
convicted of a criminal offense, within the meaning of section
1128(i) of the Act. Nevertheless, that conclusion follows as a
matter of law from Petitioner's admissions that he pled guilty, and
from the fact that the court, in passing sentence, accepted that
plea. Therefore, I conclude that Petitioner was convicted of a
criminal offense within the meaning of section 1128(i)(3) of the
Act.
B. Petitioner's conviction was in connection with the
interference with or obstruction of an investigation into a
criminal offense described in section 1128(a) or 1128(b)(1) of the
Act, within the meaning of section 1128(b)(2).
Petitioner was convicted of the crime of attempted perjury.
Examination of the indictment to which Petitioner pled guilty and
of his plea allocution establishes conclusively that Petitioner's
conviction was in connection with the interference with or
obstruction of an investigation into a program related criminal
offense. Therefore, Petitioner's exclusion was authorized by
section 1128(b)(2) of the Act.
1. Petitioner was convicted of an offense in connection with
the interference with or obstruction of an investigation.
Count One of Petitioner's indictment charges that, on January 26,
1993, Petitioner gave false answers in testimony before the Special
Grand Jury of Kings County, New York. The indictment alleges that
the grand jury was investigating whether the New York State
Medicaid program had been defrauded through a scheme under which
employees of a pharmacy purchased prescriptions from Medicaid
recipients so that the pharmacy could bill the Medicaid program for
dispensing drugs without actually doing so. The indictment charges
that it was material to this investigation to know whether
Petitioner had ever discussed the prescription buying scheme with
employees of the pharmacy. The indictment charges that Petitioner
falsely testified that he never had any such conversations. I.G.
Ex. 2.
At his plea allocution, Petitioner admitted that he had lied when
he testified that he had no conversations with employees or others
connected with the pharmacy regarding the prescription buying
scheme. I.G. Ex. 1 at 15. Petitioner argues, however, that his
conviction was not in connection with the interference with or
obstruction of an investigation, within the meaning of section
1128(b)(2), for two reasons. First, Petitioner contends that his
conviction was not for obstructing or interfering with an
investigation. Second, Petitioner argues that, regardless of his
conviction, he did not in fact obstruct or interfere with an
investigation. I am not persuaded by Petitioner's arguments.
Petitioner argues, first, that his conviction was for attempted
perjury, and not for obstructing or interfering with an
investigation. Petitioner's argument is that he was not charged
with, and could not have been convicted of, hindering prosecution,
which is a specific criminal offense under New York law (P. Ex. 1).
P. Br. at 4. Petitioner pursues his argument by contending that if
he could not have been convicted of hindering prosecution, he
cannot be found to have interfered with or obstructed an
investigation. Petitioner cites People v. Lorenzo, 110 Misc. 2nd
410, 422 N.Y.S.2d 726 (1981), for the proposition that Petitioner
would have to have been involved with the wrongdoing to have
hindered prosecution. P. Br. at 4.
Petitioner overlooks the broad scope of the prohibition against
interfering with or obstructing an investigation under section
1128(b)(2). That section does not require that an individual be
convicted of the specific offenses of interference with or
obstruction of an investigation. Nor does section 1128(b)(2)
require an individual to have been involved with the wrongdoing
being investigated for that individual to be found to have
interfered with or obstructed an investigation. Instead, section
1128(b)(2) permits the exclusion of individuals convicted of crimes
in connection with the interference with or obstruction of an
investigation. Administrative law judges and appellate panels of
the DAB have held that the phrase "in connection with" is
equivalent to the phrase "related to" as used in section 1128(a) of
the Act. Chander Kachoria, DAB CR220, at 11 n.6 (1992), aff'd, DAB
1380, at 4-5 (1993). The cases interpreting the latter phrase have
held that an offense is "related to the delivery of an item or
service" when there is a common sense connection or nexus between
the criminal offense and the delivery of items or services under
the Medicare or Medicaid programs. Berton Siegel, D.O., DAB 1467,
at 5 (1994). Thus, an individual convicted of perjury may be
excluded pursuant to section 1128(b)(2) if there is a nexus or
common sense connection between the perjury and interference with
or obstruction of an investigation.
This broad interpretation of the phrase "in connection with" is
reinforced by the preamble to the notice of proposed rulemaking for
42 C.F.R. 1001.301, the regulation implementing section
1128(b)(2) of the Act. The preamble enumerates perjury among the
types of crimes intended to be within the scope of the statute and
regulation:
Among the types of convictions covered by this section are
perjury, witness tampering, and obstruction of justice. This list
is not intended to be exhaustive.
55 Fed. Reg. 12207 (1990)(emphasis added).
Petitioner's conviction for attempted perjury in testimony before
the grand jury satisfies the requirement of the statute. His
testimony was material to the grand jury's investigation.
Therefore, it follows that, in testifying falsely, he obstructed or
interfered with the grand jury's investigation. It appears beyond
debate that Petitioner's conviction has a common sense connection
to the offenses of interference with or obstruction of an
investigation.
Petitioner's second argument is that, as a factual matter, he could
not have interfered with or obstructed an investigation, because
the investigation was over:
Since Dr. Williams was already "wired," and this Grand Jury
was an extension of the old Grand Jury, it seemed obvious that this
particular investigation was over, when they subpoenaed Quayum
(Petitioner).
P. Br. at 5. Petitioner reasons that Dr. Williams had already been
shown to be guilty of Medicaid fraud (P. Br. at 4); and that the
grand jury inquiry of Petitioner was not really targeting Dr.
Williams or other pharmacy employees, but was instead targeting
Petitioner. Petitioner labels his grand jury appearances a
"perjury trap."
Petitioner's argument is unpersuasive. The prosecutor could not
have known that Petitioner would lie before the grand jury.
Furthermore, Petitioner has not shown what basis, if any, he has to
know what individuals, besides Dr. Williams, were being
investigated. Further, Petitioner cannot know what offenses were
being investigated, even if Petitioner was aware of certain
offenses previously committed by Dr. Williams.
Perhaps more importantly, however, Petitioner's argument that the
facts underlying his conviction are not consistent with the facts
charged in the indictment, to which he pled guilty, amounts to a
collateral attack on his conviction. Petitioner may not reargue
the merits of his criminal case in this administrative proceeding.
In this regard, an appellate panel of the Departmental Appeals
Board has held:
[i]t is the fact of the conviction which causes theexclusion.
The law does not permit the Secretary tolook behind the conviction.
Instead, Congressintended the Secretary to exclude
potentiallyuntrustworthy individuals or entities based oncriminal
convictions. This provides protection forfederally funded programs
and their beneficiariesand recipients, without expending program
resourcesto duplicate existing criminal processes.
Peter J. Edmonson, DAB 1330, at 4 (1992); see also 42 C.F.R.
1001.2007(d) ("the basis for the underlying [conviction] is not
reviewable and the individual or entity may not collaterally attack
the underlying [conviction], either on substantive or procedural
grounds"). Because Petitioner was convicted of Count 1 of the
indictment, the facts charged therein are accepted as true for
purposes of this decision. As I have already discussed, the
language of the indictment establishes that Petitioner's criminal
offense was in connection with the interference with or obstruction
of the grand jury's investigation.
2. Petitioner interfered with or obstructed an investigation
into a criminal offense related to the delivery of items or
services under Medicaid.
I have concluded that Petitioner was convicted of a criminal
offense in connection with the interference with or obstruction of
an investigation. For Petitioner to be excluded under section
1128(b)(2), the investigation he interfered with or obstructed must
have been into a criminal offense described in section 1128(b)(1)
or section 1128(a) of the Act. I conclude that the investigation
which Petitioner interfered with or obstructed was related to the
delivery of an item or service under the Medicaid program, within
the meaning of section 1128(a)(1).
Petitioner argues that his crime of attempted perjury is not
related to Medicare/Medicaid. P. Br. at 6. The indictment
language proves to the contrary:
As part of its inquiry, the Grand Jury was attempting to
ascertain whether the New York State Medical Assistance Program
(Medicaid) had been defrauded through a scheme under which
employees of a pharmacy had purchased prescriptions from Medicaid
recipients so that the pharmacy could bill Medicaid for dispensing
drugs without actually doing so. It was material to this
investigation to know whether defendant (Petitioner), a dentist in
a medical center adjacent to one of the pharmacies under
investigation, had ever discussed the foregoing practices with
employees and other persons connected with the facilities.
I.G. Ex. 2 at 2.
At the time that he entered his guilty plea, Petitioner admitted
that his false testimony before the grand jury related to Medicaid
fraud. The court inquired of Petitioner: "The questions asked of
you before the grand jury related to Medicaid fraud, is that
right?" Petitioner responded: "Yes." I.G. Ex. 1 at 15.
Petitioner specifically admitted that the questions he answered
falsely were about whether he had had any conversations with
employees or people from the medical
center or pharmacy about the "script" buying scheme, i.e.,
purchasing prescriptions from Medicaid recipients:
Prosecutor: Could I ask the defendant just
to -- could I ask the defendant, Doctor Quayum Nazirul 5/, you
were asked in the grand jury whether you had any conversations with
employees or people from the medical center or pharmacy whether you
had conversations with them about the script buying scheme. Do you
remember that?
Petitioner: Yes, sir.
Prosecutor: The purchasing script from Medicaid recipients?
Petitioner: Yes, sir.
Prosecutor: In the grand jury you said you had no
conversations?
Petitioner: Yes.
Prosecutor: And that was a lie, that was not correct?
Petitioner: Yes, sir.
Prosecutor: Thank you.
I.G. Ex. 1 at 15.
Thus, the indictment charged, and Petitioner admitted, that the
grand jury was investigating Medicaid fraud, and that Petitioner's
testimony was material to that investigation. Medicaid fraud is a
crime described in section 1128(a)(1) of the Act. Greene v.
Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). Thus, taken
together, the facts charged in the indictment and Petitioner's
admissions in pleading guilty establish on their face that
Petitioner was convicted of a crime described in section 1128(b)(2)
of the Act. Accordingly, the I.G. was authorized to exclude
Petitioner.
C. Petitioner's argument that his exclusion is unfair is not
persuasive; further, I am not authorized to set aside a valid
exclusion based on equitable considerations.
In the letter brief attached to his request for a hearing, as well
as in his response to the I.G.'s motion for summary disposition,
Petitioner argues that excluding him from Medicare and Medicaid
would be unfair, for several reasons. Petitioner argues that he
intended, by his guilty plea, to avoid collateral consequences. P.
Br. at 1-2. He suggests that he was misled into entering a guilty
plea. P. Letter Brief at 6-7. Petitioner argues that he relied on
the prosecutor's representation that, if no one asked him, he would
not write a recommendation against Petitioner receiving a Medicaid
provider's license (I.G. Ex. 1 at 4-5). Petitioner argues also that
he was issued a Certificate for Relief from Disabilities (P. Ex.
4), which I should also consider in determining whether Petitioner
ought to be excluded. P. Br. at 6.
Contrary to Petitioner's suggestion that he relied on
representations by the prosecutor that he would not be subject to
collateral consequences if he pled guilty, the transcript of
Petitioner's guilty plea shows that Petitioner was on notice that
his conviction would be reported to appropriate agencies, including
Medicaid:
Petitioner's attorney: ***my client was a Medicaid provider,
and he's going to again apply for that Medicaid provider's license.
The Department of Social Services investigates him and does what
they have to do. [The prosecutor] has committed himself that if no
one asks him, he is not going to write a recommendation against my
client receiving the provider's license. If the Department of
Social Security does inquire of [the prosecutor], [the prosecutor]
will explain fully the entire proceeding that took place today and
what occurred during the investigation.
Prosecutor: Yes, that is correct. To the extent, your Honor,
as a matter of course, when any Medicaid provider is convicted of
any crime, my office automatically refers the fact of that
conviction to the appropriate agency.
I.G. Ex. 1 at 4-5. Thus, it appears that Petitioner's argument
that he was misled about the consequences of his plea is without
factual support. Nevertheless, even if Petitioner had, in fact,
been unaware that his guilty plea might subject him to exclusion,
this would not invalidate his exclusion. See Douglas Schram,
R.Ph., DAB 1372, at 11 (1992).
Similarly, the fact that Petitioner received a Certificate of
Relief from Civil Disabilities is not a bar to the imposition of an
exclusion. Janet Wallace, L.P.N., DAB CR155 (1991), aff'd, DAB
1326 (1992). As Petitioner acknowledges, such certificate relates
only to civil actions by the State and does not bind the federal
government. See P. Br. at 6.
Finally, Petitioner argues that he did not profit from his crime of
attempted perjury. P. Br. at 3. Profit by Petitioner is not
requisite to his being excluded. Bernard Lerner, M.D., DAB CR60,
at 13 (1989); cf. Basem S. Kandah, R.Ph., DAB CR80, at 9; Barry D.
Garfinkel, M.D., DAB CR400, at 27 (1995) (both holding that lack of
profit by petitioners may be evidence relevant to trustworthiness,
but nevertheless upholding exclusions). Further, financial crimes
are not the only crimes which are related to delivery of items or
services under the programs. Paul R. Scollo, D.P.M., DAB 1498, at
9-11 (1994).
Although Petitioner has failed to persuade me that his exclusion is
inequitable, even if I were persuaded of the merits of Petitioner's
claims, I am without authority to overturn the exclusion. I have
already concluded that Petitioner's exclusion was authorized under
section 1128(b)(2) of the Act. The regulations governing these
proceedings make clear that the administrative law judge lacks
authority to set aside an exclusion in these circumstances. The
regulations provide:
The ALJ does not have the authority to--
* * *
Review the exercise of discretion by the OIG to exclude an
individual or entity under section 1128(b) of the Act. . .[or]
* * *
Set a period of exclusion at zero, or reduce a period of
exclusion to zero, in any case where the ALJ finds that an
individual or entity committed an act described in section 1128(b)
of the Act. . . .
42 C.F.R. 1005.4(c)(5),(6). Thus, to the extent Petitioner is
arguing that the I.G. should not have exercised her discretion to
exclude him, I am without authority to review that act of
discretion. Similarly, to the extent Petitioner is arguing that it
would not serve the remedial purposes of the Act to exclude him for
any period, I am without authority to reduce his period of
exclusion to zero.
D. A three-year period of exclusion is reasonable.
In the absence of aggravating or mitigating factors, the Petitioner
is required to be excluded from participating in the Medicare and
Medicaid programs for a three-year period. Act, section
1128(c)(3)(A); 42 C.F.R. 1001.301(b). Petitioner has the burden
of proving mitigating factors, which he has made no attempt to do.
Potential mitigating factors which could reduce the length of the
exclusion are found at 42 CFR 1001.301(b)(3) (1994). I.G. Br.
at 12-13. Nothing in the record indicates that any of the
potential mitigating factors would apply here.
Furthermore, upon careful review of the record as a whole, I find
that a three-year exclusion of Petitioner is reasonable. Congress
intended that the Act, including section 1128(b)(2), be applied to
protect the integrity of federally funded health care programs, and
the welfare of program beneficiaries and recipients, from
individuals and entities who have been shown to be untrustworthy.
Petitioner's lying before the grand jury demonstrates
untrustworthiness, which is addressed by excluding him, in
accordance with the remedial purposes of section 1128. See Robert
Matesic, R.Ph., d/b/a Northway Pharmacy, DAB 1327 (1992).
Conclusion
The three-year exclusion from participating in Medicare and
Medicaid which the I.G. imposed and directed against Petitioner is
reasonable.
Jill S. Clifton
Administrative Law Judge
1. Unless otherwise indicated, hereafter I refer to all
programs from which Petitioner has been excluded, other than
Medicare, as "Medicaid."
2. Those parts of the Act discussed herein are codified in 42
U.S.C. 1320a-7.
3. The I.G. filed a brief (I.G. Br.), including a statement
enumerating the material facts and conclusions of law the I.G.
considered to be uncontested. The I.G.'s brief was accompanied by
I.G. Exhibits (I.G. Exs.) 1 and 2. At my direction, the I.G. later
submitted a corrected copy of I.G. Ex. 2. Petitioner filed a
response brief (P. Br.), accompanied by Petitioner's Exhibits (P.
Exs.) 1 through 4, and incorporating Petitioner's letter brief
filed with his request for hearing. Petitioner requested that the
documents submitted with his letter brief be admitted in evidence.
Petitioner had marked the documents submitted with his letter brief
as P. Exs. A-G. Although this marking is inconsistent with my
prehearing order, I have retained Petitioner's marking because the
exhibits are referenced in Petitioner's letter brief. The I.G.
then filed a reply brief (I.G. R. Br.).
There were no objections to the proposed exhibits. In the absence
of objection, I admit into evidence I.G. Exs. 1 and 2, and P. Exs.
1 through 4 and A-G.
4. "State health care programs" are defined at section 1128(h)
of the Act and include Medicaid.
5. The clerk later clarified for the record that the
Defendant's (Petitioner's) true name is Nazirul Quayum [not Quayum
Nazirul]. I.G. Ex. 1 at 16.