$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Cynthia M. Ramkelawan, D.D.S.,
Petitioner,
- v. -
The Inspector General.
DATE: March 25, 1996
Docket No. C-95-088
Decision No. CR415
DECISION
By letter dated January 19, 1995, Cynthia M. Ramkelawan, 1/ D.D.S.
(Petitioner), was notified by the Inspector General (I.G.) of the
Department of Health and Human Services (DHHS) that, as a result of
her failure to repay her Health Education Assistance Loans (HEALs)
or to enter into an agreement to repay her HEALs, with which she
had financed her dental education, she was being excluded from
participation in the Medicare program. The I.G. informed
Petitioner that she was being excluded from participation in
Medicare pursuant to section 1892 of the Social Security Act (Act).
2/ The I.G. further informed Petitioner that she was being
excluded from participation in Medicaid 3/ pursuant to section
1128(b)(14) of the Act. The I.G. advised Petitioner that she would
be excluded until her debt had been satisfied completely.
By letter dated February 28, 1995, Petitioner filed a timely
request for a review of the I.G.'s action by an administrative law
judge (ALJ). In her letter requesting a hearing, Petitioner does
not dispute any specific issue or finding stated in the January 19,
1995 letter from the I.G. During the initial telephone prehearing
conference call, I granted the parties a stay in order for them to
negotiate settlement. By letter dated August 26, 1995, Petitioner
indicated that she was unable to work out a financial settlement
with the United States Attorney's Office. During a subsequent
telephone prehearing conference call on September 20, 1995, the
I.G. suggested that this case be decided by submission of written
documentation and that an in-person hearing was not necessary.
September 20, 1995 Order and Schedule for Filing Briefs and
Documentary Evidence. Petitioner did not object to the I.G.'s
request.
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 her HEALs. Thus, it was reasonable for the I.G. to
exclude Petitioner from participation in Medicare and to direct her
exclusion from participation in Medicaid. Act, section
1128(b)(14). I conclude that the term of the exclusion imposed
pursuant to section 1128(b)(14) is reasonable based on the I.G.'s
representation to me that, under the exclusion imposed pursuant to
section 1128(b)(14), Petitioner will be eligible to apply for
reinstatement to Medicare and Medicaid at such time as the Public
Health Service (PHS) notifies the I.G. that Petitioner's HEAL
default is cured or that Petitioner's indebtedness has been
resolved to PHS' satisfaction. I.G. Brief at 2; 42 C.F.R.
1001.1501(b).
APPLICABLE LAW
Section 1128(b)(14) of the Act permits the Secretary of DHHS to
exclude from participation in the Medicare and Medicaid programs
"any individual who the Secretary determines 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."
PETITIONER'S POSITION
Petitioner contends that she is unable to generate sufficient
income to repay her debts. Furthermore she believes that excluding
her would be counterproductive, inasmuch as such action would
reduce her income further, making repayment less likely. She
suggests that repayment is particularly difficult for her because
she intentionally established her practice in a poor section of the
community.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
The facts are undisputed:
1. While studying dentistry, Petitioner applied for and received
the following three HEALs through the Wisconsin Health Education
Assistance Board (WHEAB):
$15,000 October 1983 I.G. Exs. 1, 4 4/
20,000 September 1984 I.G. Exs. 2, 5
20,000 September 1985 I.G. Exs. 3, 6
2. To provide additional financing for her dental education,
Petitioner applied for and received the following two additional
HEALs through the Student Loan Marketing Association (SLMA):
$20,000 September 1986 I.G. Exs. 25, 27
5,000 September 1987 I.G. Exs. 26, 28
3. Petitioner signed promissory notes for each of the five HEALs
and she promised to make payments beginning on the first day of the
tenth month she ceased being a full-time student at a
HEAL-recognized school, or an intern, or resident in an approved
program. I.G. Exs. 4 - 6, 27, 28.
4. By signing the promissory notes, Petitioner further agreed
that, if she defaulted upon her repayments, the entire amount she
owed would become immediately due and payable. I.G. Exs. 4 - 6,
27, 28.
5. Petitioner graduated from dental school in December 1988.
I.G. Ex. 22 at 3.
6. Petitioner failed to repay principal or interest as provided
in each of the five loan agreements. I.G. Exs. 7 - 9, 13 - 17.
7. As of February 19, 1992, Petitioner owed $126,452.36 on the
three loans that she received from WHEAB (including principal and
interest). As of September 24, 1993, Petitioner owed $44,835
(including principal and interest) on her two loans with SLMA.
I.G. Exs. 22, 34. Findings 2, 3.
8. Petitioner was granted several deferments from her obligation
to repay the HEALs by both WHEAB and SLMA. I.G. Exs. 7 - 9, 29,
30.
9. When Petitioner failed to repay her HEALs, WHEAB sent
delinquency notices on April 15 and May 15, 1991. I.G. Exs. 13,
14.
10. WHEAB subsequently issued repayment schedules to Petitioner.
I.G. Exs. 10 - 12.
11. On June 15, 1991, WHEAB advised Petitioner that if she did not
repay her HEALs, her account would be filed as a default claim.
I.G. Ex. 16.
12. On June 28, 1991, WHEAB filed a claim with PHS based on
Petitioner's failure to repay her HEALs to WHEAB. I.G. Exs. 17,
18.
13. On January 7, 1992, a suit was filed against Petitioner in
Wisconsin circuit court to collect the outstanding balance of
Petitioner's HEALs with WHEAB. I.G. Ex. 22.
14. The court entered judgment against Petitioner. I.G. Ex. 22.
15. On May 4, 1992, PHS agreed to pay WHEAB the amount of $129,562
for unpaid principal and interest on Petitioner's HEALs. I.G. Ex.
19.
16. On May 20, 1992, PHS notified Petitioner that it had been
authorized by the United States Government to collect the unpaid
interest and principal on Petitioner's HEALs and demanded that
Petitioner repay the loans. I.G. Ex. 20; Findings 12 - 15.
17. On May 20, 1993, Petitioner was offered a Medicare and
Medicaid offset arrangement to repay her indebtedness for the loans
initially with WHEAB. I.G. Ex. 21; Finding 1.
18. SLMA issued a repayment schedule to Petitioner. I.G. Ex. 31;
see also Findings 3, 4, 6, 7.
19. On August 16, 1993, SLMA filed a claim with PHS based on
Petitioner's failure to repay her HEALs. I.G. Ex. 32.
20. On September 8, 1993, PHS agreed to pay SLMA the amount of
$44,835 for unpaid principal and interest on Petitioner's HEALs.
I.G. Ex. 33.
21. On September 29, 1993, PHS notified Petitioner that she had
been placed in default by the previous loan holder (SLMA) and the
HEAL debt had been assigned by SLMA to PHS. I.G. Ex. 34.
22. On January 19, 1995, the I.G. excluded Petitioner from
participating in the Medicare and Medicaid programs.
23. As of January 19, 1995, Petitioner had not repaid her HEAL
debts. Findings 1 - 22.
24. The I.G. had authority to impose and direct an exclusion
pursuant to section 1128(b)(14) of the Act. Findings 1 - 23.
25. The Secretary has taken all reasonable steps available to
secure repayment of Petitioner's HEALs. 42 C.F.R.
1001.1501(a)(2); Finding 17.
26. An exclusion imposed pursuant to section 1128(b)(14) of the
Act is reasonable if the excluded party is excluded until such time
as PHS notifies the I.G. that the default has been cured or the
debt has been resolved to PHS' satisfaction. 42 C.F.R.
1001.1501(b).
27. The exclusion imposed against Petitioner pursuant to section
1128(b)(14) of the Act was intended by the I.G. to exclude
Petitioner until such time as PHS notifies the I.G. that
Petitioner's default of her HEAL debt has been cured or that her
HEAL debt has been resolved to PHS' satisfaction. I.G. Brief at 2.
28. The exclusion which the I.G. imposed against Petitioner
pursuant to section 1128(b)(14) of the Act is reasonable. Findings
1 - 27.
ISSUES
1. Whether the I.G. had authority to exclude Petitioner from
participation in the Medicare program pursuant to section
1128(b)(14) of the Act.
2. Whether the term of exclusion imposed pursuant to section
1128(b)(14) of the Act is reasonable.
DISCUSSION
1. The I.G. had authority under section 1128(b)(14) ofthe Act to
exclude Petitioner from participating inMedicare and Medicaid.
Section 1128(b)(14) of the Act provides that the Secretary (or her
delegate, the I.G.) may exclude a party from participating in
Medicare or 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 in this case Petitioner's HEAL debts arise
from loans made "in connection with health professionals
education." There is also no dispute that Petitioner defaulted on
repayment of her HEALs. Thus, if I conclude that the Secretary
took "all reasonable steps available" to secure repayment from
Petitioner of her HEALs, I must find that the I.G. had authority to
exclude Petitioner under section 1128(b)(14) of the Act.
The parties to this case do not disagree that Petitioner applied
for and received five HEALS to pursue her education as a dentist.
The parties do not disagree that Petitioner defaulted on her HEALs.
Petitioner does contend, however, that she is unable to generate
sufficient income to repay her HEALs. Petitioner did not
specifically assert that PHS failed to take all reasonable steps
available to secure repayment from Petitioner of her HEAL debts.
However, her assertion that she has been unable to repay even a
part of her debt can be construed as an argument that PHS failed to
take all reasonable steps to secure repayment. I do not accept
Petitioner's argument. It is apparent, both from the law and from
the undisputed material facts of this case, that the Secretary took
"all reasonable steps available" to her to secure repayment from
Petitioner of her HEAL debts prior to the I.G. excluding Petitioner
under section 1128(b)(14).
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
debts, the Secretary acquired the right -- and the obligation -- to
collect on that debt. Mohammad H. Azarpira, D.D.S., DAB CR372 at
8; 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).
Inasmuch as Petitioner herein borrowed the money needed for her
dental education from a loan program established by the federal
government to assist individuals seeking to enter the health care
professions, it is evident that her loans are exactly the kind
contemplated by section 1128(b)(14) and that, upon her default,
DHHS was entitled to exclude her.
It is also apparent that, inasmuch as Petitioner (1) was granted a
delay in repayment (forbearance); (2) was also given the
opportunity to reduce her debt by surrendering a portion of
payments she received from government programs; and (3) was given
several warnings before being declared delinquent, DHHS took
reasonable measures to collect the indebtedness before deciding on
this exclusion.
The Secretary reasonably could infer, from Petitioner's conduct,
that Petitioner was unlikely to repay her debt voluntarily. The
Secretary provided Petitioner with many opportunities to repay her
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 her exclusion. Petitioner
did not avail herself 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 debts. 42 C.F.R.
1001.1501(a)(2).
2. The exclusion which the I.G. imposed under section1128(b)(14)
of the Act is reasonable.
The notice of exclusion which the I.G. sent to Petitioner advised
her that she would be excluded, both under sections 1128(b)(14) and
1892 of the Act, until her HEAL debt had been completely satisfied.
However, the I.G. contends now that Petitioner's exclusion remains
in effect until such time as PHS notifies the I.G. that the default
has been cured or the obligations have been resolved to PHS'
satisfaction. I.G. Brief at 2.
The I.G.'s clarification is consistent with the requirements of 42
C.F.R. 1001.1501(b). I conclude that the exclusion which the
I.G. imposed under section 1128(b)(14) is reasonable, and I sustain
it. I find that the exclusion is reasonable because, on its face,
it enables Petitioner to negotiate an agreement with PHS to repay
her HEAL debt.
CONCLUSION
I conclude that the I.G. had authority to exclude Petitioner from
participating in Medicare and Medicaid under section 1128(b)(14) of
the Act. I conclude further that the exclusion which the I.G.
imposed under section 1128(b)(14) is reasonable.
Joseph K. Riotto
Administrative Law Judge
1. Petitioner is known also as Cynthia Marie Williams
Langford-Ramkelawan, D.D.S. See I.G. notice letter dated January
19, 1995.
2. This decision does not address Petitioner's exclusion
under section 1892 of the Act. It is not clear that I have the
authority to review an exclusion imposed pursuant to section 1892.
See I.G. Brief at 7; Mohammad H. Azarpira, D.D.S., DAB CR372
(1995); 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). Moreover, 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. "State health care program" is defined by section 1128(h)
of the Act to cover three types of federally financed health care
programs, including Medicaid. Unless the context indicates
otherwise, I use the term "Medicaid" hereafter to represent all
State health care programs from which Petitioner was excluded.
4. The I.G. submitted 34 exhibits (I.G. Exs. 1 - 34) with
her motion and brief for summary disposition. Petitioner did not
object to the I.G.'s exhibits. Petitioner did not submit any
exhibits. Thus, I am admitting I.G. Exs. 1 - 34 into evidence.