DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Frank Waltz, M.D.
Petitioner,
- v. -
The Inspector General.
DATE: September 1, 1989
Docket No. C-86
DECISION OF ADMINISTRATIVE LAW JUDGE
On November 4, 1988, the Inspector General (the I.G.) notified Petitioner that
he was being excluded from
participation in the Medicare program and State health care programs. The I.G.
told Petitioner that his
exclusions were due to revocation by the Alabama State Board of Medical Examiners
(the Board of
Examiners) of Petitioner's license to practice medicine in Alabama. Petitioner
was advised that at the time
he obtained a valid license to practice medicine in Alabama, he would have the
right to apply for
reinstatement to the Medicare and State health care programs.
Petitioner timely requested a hearing, and the case was assigned to me for
a hearing and decision. I
conducted a prehearing conference by telephone on February 9, 1989, at which
Petitioner appeared pro se.
I advised Petitioner that he had a right to obtain legal counsel. Petitioner
acknowledged that he knew he
had that right, but stated that he intended to appear pro se. As a result of
this prehearing conference, I
issued a Prehearing Order on February 21, 1989, which, among other things, scheduled
a hearing to be held
in the case in Mobile, Alabama, on April 4, 1989.
Subsequently, I was advised by the parties that they had agreed to try this
case on the basis of the written
record, with oral argument to be conducted by telephone. I issued a Prehearing
Order on March 31, 1989,
which recited this agreement and established a schedule for the parties to submit
proposed exhibits and
briefs.
On July 31, 1989, I conducted oral argument of this case by telephone. Prior
to hearing the parties'
arguments, I admitted into evidence all of the exhibits that the parties proffered.
I have considered the evidence in this case, the parties' arguments, and applicable
law. I conclude that the
exclusions imposed and directed by the I.G. are permitted by section 1128(b)(4)(A)
of the Social Security
Act. Therefore, I am deciding this case in favor of the I.G.
ISSUES
The issues in this case are whether:
1. the Board of Examiners revoked Petitioner's license to practicemedicine
in Alabama for
reasons bearing on Petitioner's professional competence or performance;
2. it would be relevant for Petitioner to prove that the Board of Examiners
deprived him of
due process;
3. I have authority to grant Petitioner relief based on his argument that
section
1128(b)(4)(A) of the Social Security Act is unconstitutional;
4. the exclusions imposed and directed against Petitioner are reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a doctor of medicine. I.G. Ex. 1.
2. Petitioner held a license to practice medicine in the State of Alabama. I.G. Ex. 1.
3. On September 17, 1987, the Board of Examiners issued an administrative
complaint against
Petitioner. I.G. Ex. 1.
4. The complaint alleged that Petitioner was unable to practice medicine,
with reasonable skill
and safety to patients, by virtue of physical and mental illness characterized
by a physical impairment,
mental and emotional depression, and misuse and abuse of controlled substances.
I.G. Ex. 1.
5. The Board of Examiners issued an order, temporarily suspending Petitioner's
license to
practice medicine, and scheduled a hearing in Petitioner's case. I.G. Ex. 2.
6. On November 25, 1987, the Board of Examiners held a hearing concerning
the allegations
against Petitioner. I.G. Ex. 4.
7. On January 8, 1988, the Board of Examiners issued an Order revoking Petitioner's
license to
practice medicine in Alabama. I.G. Ex. 3.
8. The Board of Examiners found that in several instances Petitioner had prescribed,
dispensed,
furnished or supplied controlled substances for reasons other than a legitimate
medical purpose and/or in
quantities not reasonably related to a patient's medical condition. I.G. Ex.
3.
9. The Board of Examiners found that Petitioner was unable to practice medicine,
with reasonable
skill and safety to patients, by virtue of physical and mental illness characterized
by physical and mental
impairment. I.G. Ex. 3.
10. The Board of Examiners revoked Petitioner's license to practice medicine
in Alabama, for
reasons bearing on Petitioner's professional competence or performance. Findings
7-9; Social Security
Act, section 1128(b)(4)(A).
11. The Secretary of Health and Human Services (the Secretary) delegated to
the I.G. the
authority to determine, impose, and direct exclusions pursuant to section 1128
of the Social Security Act.
48 Fed. Reg. 21662, May 13, 1983.
12. On November 4, 1988, the I.G. excluded Petitioner from participating in
the Medicare
program and directed that he be excluded from participating in Medicaid, pursuant
to section
1128(b)(4)(A) of the Social Security Act. I.G. Ex. 9.
13. Petitioner's exclusions are effective until such time as his license to
practice medicine in
Alabama is restored and his participation status is reinstated. I.G. Ex. 9.
14. The I.G. had discretion to exclude Petitioner from participation in Medicare
and to direct his
exclusion from participation in Medicaid. Social Security Act, section 1128(b)(4)(A).
15. Petitioner's assertion that he was deprived of due process by the Board
of Examiners is not
relevant. See Social Security Act, section 1128(b)(4)(A).
16. I do not have authority to grant Petitioner relief based on his argument
that section
1128(b)(4)(A) of the Social Security Act is unconstitutional. See Social Security
Act, section 205(b).
17. The exclusions imposed and directed against Petitioner are reasonable.
Social Security Act,
section 1128(b)(4)(A).
ANALYSIS
The Board of Examiners revoked Petitioner's license to practice medicine in
Alabama based on findings
that Petitioner prescribed controlled substances to patients in circumstances
where such prescriptions were
not medically indicated and that Petitioner was unfit to practice medicine,
by virtue of physical and mental
illness. Findings 7-9. Subsequently, the I.G. imposed and directed exclusions
against Petitioner pursuant
to section 1128(b)(4)(A) of the Social Security Act, which permits such exclusions
in cases where an
individual or entity's license to provide health care has been suspended or
revoked by a state licensing
authority for reasons bearing on the individual's or entity's professional competence
or performance, or
financial integrity. The exclusions imposed and directed by the I.G. are indefinite
in duration. Petitioner
may request reinstatement as a provider in Medicare and Medicaid when his license
is reinstated.
Petitioner does not deny that the Board of Examiners revoked his license to
practice medicine in Alabama.
He does not dispute that the rationale expressed by the Board of Examiners pertained
to Petitioner's
professional competence or performance. He does not claim that, assuming it
was reasonable for the I.G.
to exclude him, the indefinite nature of the exclusions is unreasonable.
Petitioner argues that the exclusions in this case are unreasonable because
the Board of Examiners
allegedly did not give him a fair hearing. P.'s Ex. A-L; P.'s Memoranda. Alternatively,
he argues that if
section 1128(b)(4)(A) permits his exclusion from Medicare and State health care
programs based on unfair
Board of Examiners proceedings, then the exclusion law is unconstitutional.
The I.G. asserts that the authority contained in section 1128(b)(4)(A) for
the Secretary (or his delegate, the
I.G.) to impose and direct exclusions derives from the actions taken by state
licensing boards, not the
underlying facts on which state boards' decisions may be based. According to
the I.G., the exclusion law
does not authorize the Secretary to examine state boards' actions to ascertain
their validity under state or
federal statutes and constitutions, nor does it authorize the Secretary to examine
the facts on which boards'
actions are based, except to determine whether the reasons for such actions
bear on the individuals' or
entities' professional competence, performance, or financial integrity. I.G.'s
Brief at 4.
1. The Board of Examiners revoked Petitioner's license to practice medicine
in Alabama for
reasons bearing on Petitioner's professional competence or performance.
As noted above, the Board of Examiners concluded that Petitioner had prescribed
controlled substances, in
a number of cases, to patients under circumstances where such prescriptions
were not medically indicated.
Finding 7. The Board of Examiners also found that Petitioner was unfit to practice
medicine by virtue of
physical and mental illness. Finding 8. These findings manifestly pertain to
Petitioner's professional
competence and performance. Therefore, the Board of Examiners revoked Petitioner's
license to practice
medicine in Alabama for reasons bearing on Petitioner's professional competence
or performance, within
the meaning of section 1128(b)(4)(A).
2. Petitioner's assertion that he was deprived of due process by the Board
of Examiners is
irrelevant. See Social Security Act, section 1128(b)(4)(A).
The heart of Petitioner's case is his assertion that he was not given a fair
hearing by the Board of
Examiners. According to Petitioner, the I.G.'s exclusion determination is invalid
because it is based on a
defective Board of Examiners' decision.
I conclude that Petitioner's claims concerning the fairness and completeness
of the state licensing board
proceedings are irrelevant. There are several possible issues which a petitioner
may raise in a hearing
brought to challenge exclusions imposed pursuant to section 1128(b)(4)(A). A
petitioner may argue that
his license was not, in fact, suspended or revoked; that no action was taken
by a state licensing authority; or
that the suspension or revocation imposed against the petitioner was not for
reasons bearing on his or her
professional competence, performance, or financial integrity. A petitioner may
also argue that the terms of
the exclusions imposed and directed by the I.G. are unreasonable.
A hearing on exclusions imposed and directed pursuant to section 1128(b)(4)(A)
may not be used by a
petitioner to mount a collateral attack on a state board's decision. The I.G.'s
authority to impose and direct
exclusions pursuant to section 1128(b)(4)(A) emanates from the actions taken
by state licensing boards.
The law instructs the Secretary to rely on these boards' decisions. The law
does not intend that the
Secretary examine the fairness or propriety of the process which led to the
decisions.
The sections of the law which provide for administrative hearings in exclusion
cases do not authorize
collateral challenges of state board decisions on due process grounds. Congress
directed the Secretary to
provide excluded parties with the opportunity to have hearings on their exclusions.
Social Security Act,
section 1128(f). The law requires that an excluded party be afforded reasonable
notice and opportunity for
a hearing by the Secretary to the same extent as is provided in section 205(b)
of the Social Security Act.
Section 205(b) states that:
Upon request by any . . . individual who makes a showing in writing that his
or her rights may
beprejudiced by any decision the Secretary hasrendered . . .[the Secretary]
shall give such. . . [individual]
reasonable notice and opportunityfor a hearing with respect to such decision,
andif a hearing is held, shall
on the basis of evidenceadduced at the hearing, affirm, modify, or reverse his
findings of fact and such
decision. (Emphasis added.)
This section does not provide a petitioner with the right in an administrative
hearing to prevail based on
issues which are not relevant to the Secretary's (or pursuant to delegation,
the I.G.'s) exclusion decision. In
this case, the "decision" which is challenged is the I.G.'s decision
to exclude Petitioner based on the Board
of Examiners' license revocation determination. The fairness of the Board of
Examiners' license revocation
determination is not relevant to the I.G.'s exclusion decision, and thus evidence
of the Board of Examiners'
alleged lack of due process is similarly not relevant.
3. I do not have authority to grant Petitioner relief based on his argument
that section
1128(b)(4)(A) of the Social Security Act is unconstitutional. See Social Security
Act, section 205(b).
At oral argument of this case, Petitioner asserted that if the exclusion law
did not permit him to challenge
the fairness of the Board of Examiners' license revocation decision in this
case then the law is
unconstitutional. I conclude that I do not have authority to decide this issue.
There is no language in section 1128(f) which provides that, in conducting
hearings as to the propriety of
exclusions, the Secretary must consider challenges to the constitutionality
of the exclusion law. Section
205(b) does not suggest that challenges to the Secretary's decisions in administrative
hearings may include
arguments as to the constitutionality of statutes which give the Secretary authority
to make decisions in
individual cases.
4. The exclusions imposed and directed against Petitioner are reasonable.
Although Petitioner has challenged the basis for the I.G.'s exclusion determination,
he has not asserted that,
assuming the I.G. had authority to impose and direct exclusions in this case,
the duration of the exclusions
imposed and directed against Petitioner is unreasonable.
The I.G. imposed and directed conditional exclusions against Petitioner's participation
as a provider in
Medicare and Medicaid. The I.G. asserts that his exclusion determination in
this case is consistent with
Congress' intent that individuals or entities who lose their licenses to provide
health care in any State, for
reasons pertaining to their professional competence or performance, or their
financial integrity, be
excluded in all States from participating in Medicare or in Medicaid until such
time as they reacquire
licenses and demonstrate trustworthiness as providers of services. I.G.'s Brief
at 8-9.
One purpose of the exclusion law is to give the Secretary a remedy to protect
Medicare beneficiaries and
Medicaid recipients from individuals or entities who are found capable of causing
harm to beneficiaries or
recipients. Congress intended that the Secretary exclude individuals or entities
who have lost their licenses
for reasons pertaining to their professional competence or performance, or their
financial integrity, from
performing those services for which they had been licensed, until such time
as their licenses are restored.
S. REP. No. 109, 100th Cong., 1st Sess. 7, reprinted in 1987 U.S. CODE CONG.
& ADMIN. NEWS 688.
The I.G. imposed and directed exclusions against Petitioner based on the Commission's
revoking
Petitioner's license to practice medicine for reasons pertaining to Petitioner's
professional competence and
performance. Given this, and in light of legislative purpose, the conditional
exclusions imposed and
directed by the I.G. are reasonable.
CONCLUSION
Based on the evidence and the law, I conclude that the I.G.'s determination
to exclude Petitioner from
participating in Medicare, and to direct that Petitioner be excluded from participating
in Medicaid, was
justified pursuant to section 1128(b)(4)(A) of the Social Security Act. I conclude
further that it was
reasonable to base the duration of the exclusions on Petitioner's obtaining
a license to practice medicine in
Alabama. Therefore, I am entering a decision in favor of the I.G. in this case.
__________________________
Steven T. Kessel
Administrative Law Judge