$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Erol Ucer, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: March 25, 1996
Docket No. C-95-151
Decision No. CR416
DECISION
In a letter dated May 15, 1995, the Inspector General (I.G.)
notified Petitioner that she had made a determination to exclude
him for a period of three years from participation in Medicare,
Medicaid, Maternal and Child Health Services Block Grant and Block
Grants to States for Social Services programs. 1/ Petitioner was
informed that his exclusion was being imposed pursuant to section
1128(b)(1) of the Social Security Act (Act), due to the fact that
Petitioner had been convicted of a criminal offense related to
fraud, theft, embezzlement, breach of fiduciary responsibility, or
other financial misconduct. The I.G. further informed Petitioner
that his exclusion had national effect, and that she was required
by law to notify the appropriate State agency of Petitioner's
exclusion. The appropriate State agency was required by law to
exclude Petitioner for a minimum of three years as well.
By letter dated June 29, 1995, Petitioner requested a hearing to
contest his exclusion. The case was docketed and assigned to me.
I conducted a prehearing conference in this case on August 7, 1995,
during which time Petitioner conceded that he had in fact been
convicted of a criminal offense related to fraud in connection with
the delivery of a health care item or service. I informed
Petitioner of the regulation at 42 C.F.R. 1001.201, which
provides for a three-year benchmark exclusion in cases where an
individual has been convicted of a criminal offense related to
fraud in connection with the delivery of a health care item or
service. I informed Petitioner that, since he was not disputing
that he was convicted or that his conviction was related to fraud
in connection with the delivery of a health care item or service,
the only remaining issue in this case was whether the three-year
exclusion directed and imposed against Petitioner by the I.G. was
reasonable.
Counsel for the I.G. requested leave to file a motion for summary
disposition. Because there did not appear to be any material facts
in dispute in this case, I granted the I.G.'s request.
The parties have filed briefs and exhibits. I have reviewed the
parties' submissions and conclude that the I.G. is entitled to
judgment as a matter of law.
APPLICABLE LAW
Section 1128(b)(1) of the Act provides that the Secretary (or the
Secretary's lawful delegate, the I.G.) may exclude individuals and
entities from participation in Medicare and Medicaid under the
following circumstances:
(1) CONVICTION RELATING TO FRAUD. -- Any individual or entity
that has been convicted, under Federal or State law, 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,
of a criminal offense relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct
. . .
The implementing regulation, codified at 42 C.F.R. 1001.201,
sets forth the criteria for determining the length of exclusion
imposed pursuant to section 1128(b)(1) of the Act. Such an
exclusion will be for three years, unless the aggravating or
mitigating factors specified by the regulation are present and
warrant adjusting the three-year benchmark exclusion period. 42
C.F.R. 1001.201(b). The contents of the regulation are binding
upon administrative law judges. Joel Fass, DAB CR349, at 4 - 5
(1994).
The only issues appealable to an administrative law judge are
whether a basis for the imposition of the exclusion exists and
whether the length of the exclusion is reasonable. 42 C.F.R.
1001.2007(a)(1). When the exclusion is based on a conviction, the
basis of the conviction is not subject to review, and may not be
collaterally attacked during the appeal of an exclusion. 42 C.F.R.
1001.2007(d).
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FINDINGS)
A. Background facts concerning Petitioner's conviction
1. On June 15, 1992, Petitioner was formally charged with 54
counts alleging that he made or presented or caused to be made or
presented, false claims against the Medicaid program, in violation
of Mich. Comp. Laws Ann. 400.607(1) (West 1991) and with 44
counts alleging that he made or presented or caused to be made or
presented, false claims against Blue Cross, Blue Shield of
Michigan, in violation of Mich. Comp. Laws Ann. 752.1003(1)
(West 1991). I.G. Ex. 3 2/.
2. The 44 counts of fraud against Blue Cross, Blue Shield of
Michigan alleged that Petitioner made or presented or caused to be
made or presented to a health care corporation or health care
insurer, claims for payment of health care benefits, knowing the
claims to be false. I.G. Ex. 3.
3. Petitioner was convicted on 11 of the 44 counts of submitting
fraudulent or false claims to Blue Cross, Blue Shield of Michigan,
in violation of Mich. Comp. Laws Ann. 752.1003(1). I.G. Exs. 3,
4.
4. Petitioner was convicted of eleven felony counts. I.G. Ex. 4
at 2-3; Mich. Comp. Laws Ann. 752.1003(1) - (5) (West 1991).
5. Petitioner was sentenced to 90 days of incarceration and
ordered to pay $700 in restitution. I.G. Ex. 4.
B. The circumstances underlying Petitioner's conviction mandate
that he should be excluded for a three-year period.
6. Petitioner was convicted of a criminal offense, within the
meaning of section 1128(i) of the Act. Act, section 1128(i)(1) and
(2). Findings 1 - 5.
7. Petitioner's conviction for 11 counts of submitting fraudulent
or false claims to Blue Cross, Blue Shield of Michigan is a
conviction relating to fraud, within the meaning of section
1128(b)(1) of the Act. Act, section 1128(b)(1).
8. An exclusion imposed pursuant to section 1128(b)(1) of the Act
will be for a period of three years unless certain specific
aggravating or mitigating factors are present. 42 C.F.R.
1001.201.
9. It is an aggravating factor and a basis for increasing an
exclusion beyond the three-year benchmark period if the acts that
resulted in Petitioner's conviction, or similar acts, resulted in
financial loss of $1500 or more to a government program or to one
or more other entities, or had a significant financial impact on
program beneficiaries or other individuals. 42 C.F.R.
1001.201(b)(2)(i).
10. The aggravating factor at 42 C.F.R.
1001.201(b)(2)(i) is not present in this case.
11. It is an aggravating factor and a basis for increasing an
exclusion beyond the three-year benchmark period if the acts that
resulted in Petitioner's conviction, or similar acts, were
committed over a period of one year or more. 42 C.F.R.
1001.201(b)(2)(ii).
12. The aggravating factor contained at
42 C.F.R. 1001.201(b)(2)(ii) is not present in this case.
13. It is an aggravating factor and a basis for increasing an
exclusion beyond the three-year benchmark period if the acts that
resulted in Petitioner's conviction, or similar acts, had a
significant adverse physical or mental impact on one or more
program beneficiaries or other individuals.
42 C.F.R. 1001.201(b)(2)(iii).
14. The aggravating factor at 42 C.F.R.
1001.201(b)(2)(iii) is not present in this case.
15. It is an aggravating factor and a basis for increasing an
exclusion beyond the three-year benchmark period if the sentence
imposed by the court included incarceration. 42 C.F.R.
1001.201(b)(2)(iv).
16. The aggravating factor at 42 C.F.R. 1001.201(b)(2)(iv) is
present in this case. I.G. Ex. 4; Finding 5.
17. The I.G. has not presented any evidence or argument that would
support increasing Petitioner's exclusion based on the presence of
the aggravating factor at 42 C.F.R. 1001.201(b)(2)(iv).
18. It is an aggravating factor and a basis for increasing an
exclusion beyond the three-year benchmark period if Petitioner has
a prior criminal, civil, or administrative sanction record. 42
C.F.R. 1001.201(b)(2)(v).
19. The aggravating factor contained at 42 C.F.R.
1001.201(b)(2)(v) is not present in this case.
20. It is a mitigating factor if Petitioner was convicted of three
or fewer misdemeanor offenses, and the entire amount of financial
loss to a government program or to other individuals or entities
due to the acts that resulted in the conviction and similar acts is
less than $1500. 42 C.F.R. 1001.201(b)(3)(i).
21. The mitigating factor contained at 42 C.F.R.
1001.201(b)(3)(i) is not present in this case.
22. It is a mitigating factor if the record in the criminal
proceedings demonstrates that the court determined that the
individual had a mental, emotional, or physical condition, before
or during the commission of the offense, that reduced the
individual's culpability. 42 C.F.R. 1001.201(b)(3)(ii).
23. The mitigating factor contained at 42 C.F.R.
1001.201(b)(3)(ii) is not present in this case.
24. It is a mitigating factor if Petitioner cooperated with
federal or State officials and that cooperation resulted in others
being excluded from Medicare or any of the State health care
programs or resulted in the imposition of a civil monetary penalty
against others. 42 C.F.R. 1001.201(b)(3)(iii).
25. The mitigating factor contained at 42 C.F.R.
1001.201(b)(3)(iii) is not present in this case.
26. It is a mitigating factor if alternative sources of the type
of health care items or services furnished by Petitioner are not
available. 42 C.F.R. 1001.201(b)(3)(iv).
27. The mitigating factor contained at 42 C.F.R.
1001.201(b)(3)(iv) is not present in this case.
28. The I.G. properly excluded Petitioner for three years in
accordance with 42 C.F.R. 1001.201. Findings 1 - 27.
29. There exists no genuine issue of material fact. Findings 1 -
28.
30. As a matter of law, the I.G. is entitled to summary
disposition in her favor. Findings 1 - 29.
DISCUSSION
There is no dispute in this case that Petitioner was convicted of
a criminal offense, within the meaning of section 1128(i) of the
Act. Petitioner states that he was charged with 98 counts of
billing fraud and was acquitted of 87 of the counts. Still, the
record in this case reflects, and Petitioner does not dispute, that
he was convicted of 11 counts of filing false health care claims.
I.G. Exs. 3 - 5. Petitioner argues that he should not have been
excluded by the I.G. because he has committed no offense which has
caused harm to either the Medicare or Medicaid programs.
However, section 1128(b)(1) of the Act, under which Petitioner was
excluded, authorizes the I.G. to exclude any individual or entity
who has been convicted, in connection with the delivery of a health
care item or service, of a criminal offense relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct. Thus, the authority to exclude under this
section of the Act does not depend on whether Petitioner had harmed
the Medicare or Medicaid programs.
The facts of this case leave no doubt but that Petitioner was
convicted of a criminal offense in connection with the delivery of
a health care item or service relating to fraud. Specifically,
Petitioner was convicted, after a jury trial, of 11 counts of
submitting false health care claims for reimbursement to Blue
Cross, Blue Shield of Michigan when Petitioner knew that the claims
were false. I.G. Exs. 1, 4, 5. It is well established that where
an individual is convicted of an offense involving the submission
of fraudulent or false health care claims for reimbursement, that
offense is committed in connection with the delivery of health care
items or services. William D. Miles, M.D., DAB CR354 (1995); Joel
Fass, DAB CR349 (1994); Michael M. Bouer, R.Ph., DAB CR345 (1994).
Petitioner does not dispute this in his submission.
Moreover, Petitioner's conviction meets the second test required by
section 1128(b)(1) of the Act because it is a conviction relating
to fraud. I.G. Exs. 4, 5. The State statute under which
Petitioner was convicted is very specific, and it makes clear that
Petitioner's conviction involved not only filing false claims, but
involved Petitioner knowing that the claims were false. I.G. Exs.
4, 5. The conviction itself specifies that Petitioner was
convicted of fraud. I.G. Ex. 4. Petitioner's conviction is thus,
on its face, related to fraud in connection with the delivery of a
health care item or service. It falls squarely within the purview
of section 1128(b)(1) of the Act.
Petitioner argues also that a three-year exclusion is unduly harsh
and that the financial damage from his false billing activities
totalled only $650. I am bound in this case by regulations which
allow me to consider only certain mitigating and aggravating
factors. Absent such factors, a three-year exclusion is reasonable
under the relevant regulations. 42 C.F.R. 1001.201(b).
The record in this case does not disclose the extent of financial
damage resulting from Petitioner's criminal or any related
activities. However, even if I were to accept as true Petitioner's
statement that the extent of the financial damage was only $650,
this amount would be a mitigating factor only if Petitioner had
been convicted of no more than three misdemeanors. 42 C.F.R.
1001.201(b)(3). The record in this case reveals that Petitioner
was convicted of 11 felony counts. I.G. Exs. 1 - 5. The
mitigating factor at 42 C.F.R. 1001.201(b)(3) therefore is not
applicable to this case.
In addition, the I.G.'s decision to impose a three-year exclusion
in this case is reasonable because the I.G. could have argued for
a greater period of exclusion based upon the fact that Petitioner's
sentence included incarceration. 42 C.F.R. 1001.201(b)(2)(iv).
Instead, the I.G. showed restraint and imposed only the three-year
benchmark exclusion period.
CONCLUSION
For the foregoing reasons, I conclude as a matter of law that the
I.G. properly excluded Petitioner for a period of three years
pursuant to section 1128(b)(1) of the Act and 42 C.F.R.
1001.201.
Mimi Hwang Leahy
Administrative Law Judge
1. Unless the context indicates otherwise, I will use Medicare
and Medicaid to designate these programs.
2. The I.G. submitted five exhibits in conjunction with her
motion for summary disposition. I have marked and refer to these
exhibits as "I.G. Exs. 1 - 5," respectively. I admit I.G. Exs. 1
- 5 into evidence. Petitioner submitted a one page letter (brief)
on his own behalf and three pages of exhibits. I have marked and
refer to these exhibits as "P. Exs. 1 - 3," respectively. I admit
P. Exs. 1 - 3 into evidence.