$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Alan J. Chernick, D.D.S.,
Petitioner,
- v. -
The Inspector General.
DATE: August 30, 1996
Docket No. C-96-099
Decision No. CR434
DECISION
By letter dated November 28, 1995, Alan J. Chernick, D.D.S., the Petitioner
herein, was notified by the
Inspector General (I.G.), U.S. Department of Health and Human Services (HHS),
that it had been decided
to exclude Petitioner for a period of five years from participation in the Medicare,
Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to States for Social Services
programs. 1/ The I.G.'s
rationale was that exclusion, for at least 5 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 Medicaid program.
Petitioner filed a timely request for review of the I.G.'s action by an administrative
law judge (ALJ) of the
Departmental Appeals Board (DAB). The I.G. moved for summary disposition.
Because I have 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 granted the I.G.'s
motion and decided the case on the basis of the parties' written submissions.
2/
I affirm 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
1. During the period relevant to this case, Petitioner was a dentist licensed
to practice in the State of New
York. P. Ex. 3 at 2; I.G. Ex. 1 at 8-9.
2. A State Superior Court Information charged Petitioner with the crime of
offering a false instrument for
filing in the first degree. According to the Superior Court Information, which
is the basis of the Petitioner's
criminal conviction, on or about December 11, 1992, Petitioner, knowing that
a magnetic diskette
contained false billing information, caused that diskette to be submitted to
a fiscal agent of the New York
Medicaid program. I.G. Ex. 2.
3. The Superior Court Information alleged that the claim submitted by Petitioner
was false in that it
represented that Petitioner had furnished certain dental services to a Medicaid
recipient when Petitioner
knew these services had not been furnished. I.G. Ex. 2.
4. On June 7, 1994, Petitioner pled guilty in County Court, Rockland County,
State of New York, to the
reduced charge of offering a false instrument for filing in the second degree
in violation of N.Y. Penal Law
section 175.30, a misdemeanor. Petitioner admitted that, on or about December
11, 1992, he filed or
caused to be filed a claim form with regard to a Medicaid recipient that contained
false billing information.
I.G. Ex. 1.
5. On July 19, 1994, as a result of his guilty plea, Petitioner was sentenced
to three-years' probation, 300
hours of community service, and a penalty assessment of $90. I.G. Exs. 3, 4.
6. Petitioner paid restitution to the State of New York in the amount of $18,000. I.G. Exs. 1, 3.
7. As a result of Petitioner's conviction, the New York State Department of
Social Services, by letter dated
June 14, 1994, excluded Petitioner from the Medicaid program for two years.
I.G. Ex. 5.
8. By letter dated November 28, 1995 (Notice), the I.G. informed Petitioner
that, effective 20 days from
the date of the Notice, he would be excluded from participation in Medicare
and Medicaid for the
minimum mandatory period of five years.
9. The Secretary of HHS (Secretary) has delegated to the I.G. the authority
to determine and impose
exclusions pursuant to section 1128 of the Act. 48 Fed. Reg. 21662.
10. Petitioner's guilty plea, and the court's acceptance of that plea, constitute
a "conviction" within the
meaning of sections 1128(a)(1) and 1128(i) of the Act. Findings 4-5.
11. Petitioner was convicted of a criminal offense related to the delivery
of an item or service under
Medicaid, within the meaning of section 1128(a)(1) of the Act. Findings 2-4,
10.
12. The minimum mandatory period of exclusion pursuant to section 1128(a)(1)
is five years. Act, section
1128(c)(3)(B).
13. Assertions by a petitioner that he or she actually is innocent, that his
or her trial was unfair, or that the
statutory five-year minimum mandatory exclusion specified in section 1128(a)
should be modified because
of mitigating circumstances cannot be addressed in this forum.
14. The I.G. properly excluded Petitioner from participation in Medicare and
Medicaid for a period of five
years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act. Findings
1-13.
15. Neither the I.G. nor an ALJ has the authority to reduce a five-year minimum
exclusion mandated by
sections 1128(a)(1) and 1128(c)(3)(B) of the Act.
PETITIONER'S ARGUMENT
Petitioner acknowledges that he was convicted of a misdemeanor offense. Petitioner
acknowledges further
that the basis of the criminal charge upon which he was convicted was the result
of his performing dental
services for a Medicaid patient. He asserts in his defense that the offense
at issue involved only a small
amount of money and he maintains that he properly submitted the work to Medicaid.
Petitioner admits that
he pled guilty to the offense, but claims he did so only because he did not
wish to undergo a trial with the
expense and stress such a proceeding would involve. Petitioner contends also
that he was not informed
that, as a result of his guilty plea, he would be excluded from participation
in Medicare and Medicaid.
Pet.'s request for hearing; P. Brief. Petitioner alleges that "the exclusion
is disproportionate to the actual
circumstances of the case." P. Brief, at 1. He requests that I "consider
a concomitant two year exclusion
[with the State exclusion] and that any mandated exclusion start on the day
of conviction," rather than 20
days from the date of the I.G.'s Notice. Id. at 2.
DISCUSSION
The first statutory requirement for mandatory exclusion pursuant to section
1128(a)(1) of the Act is that the
individual or entity in question has been convicted of a criminal offense under
federal or State law. Section
1128(i) of the Act defines the term "convicted of a criminal offense"
to include those circumstances in
which a plea of guilty by an individual has been accepted by a federal, State,
or local court. Act, section
1128(i)(3). In the present case, it is undisputed that, on June 7, 1994, Petitioner
pled guilty to the crime of
offering a false instrument for filing in the second degree and that the State
court accepted the plea. I.G.
Ex. 1 at 27-28, 30. On July 19, 1994, as a result of his guilty plea, Petitioner
was sentenced to three-years'
probation, 300 hours of community service, and a penalty assessment of $90.
I.G. Exs. 3, 4. Petitioner
paid also restitution in the amount of $18,000. I.G. Exs. 1, 3. Based on the
foregoing, I conclude that
Petitioner was convicted of a criminal offense within the meaning of sections
1128(a)(1) and 1128(i) of the
Act.
I find also that the second requirement of section 1128(a)(1) -- that the criminal
offense leading to the
conviction be related to the delivery of an item or service under Medicare or
Medicaid -- has been satisfied.
Here, Petitioner, in pleading guilty, admitted that, on or about December 11,
1992, he filed or caused to be
filed a claim with regard to a Medicaid recipient that contained false billing
information. I.G. Exs. 1, 2. It
is well-established that financial misconduct directed at Medicare or Medicaid,
in connection with the
delivery of items or services under the program, constitutes a program-related
offense invoking mandatory
exclusion. In particular, filing fraudulent Medicare or Medicaid claims has
been held to constitute clear
program-related misconduct. Jack W. Greene, DAB CR19 (1989), aff'd DAB 1078
(1989), aff'd sub nom.
Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990); Scott Gladstone,
M.D., DAB CR331 (1994);
Ian C. Klein, D.P.M., DAB CR177 (1992).
Once it is determined that a program-related criminal conviction has occurred,
exclusion is mandatory
under section 1128(a) of the Act as a purely derivative action. The Secretary
is not permitted to look
beyond the fact of conviction. Peter J. Edmonson, DAB CR163 (1991), aff'd, DAB
1330 (1992). The
intent of the individual committing the offense is not relevant under section
1128(a). DeWayne Franzen,
DAB CR58 (1989), aff'd, DAB 1165 (1990). Further, assertions by a petitioner
that he or she actually is
innocent, that his or her trial was unfair, or that the statutory five-year
minimum mandatory exclusion
specified in section 1128(a) should be modified because of mitigating circumstances
cannot be addressed
in this forum. Edmonson, DAB 1330, at 4-5; Janet Wallace, L.P.N., DAB CR155
(1991), aff'd, DAB 1326
(1992); Richard G. Philips, D.P.M., DAB CR133 (1991), aff'd, DAB 1279 (1991).
Thus, in the case at
hand, Petitioner's assertions that he was not informed of the consequences of
his guilty plea or that he pled
guilty only to avoid the expense and stress of a trial are irrelevant. Additionally,
although Petitioner
requests "that some mitigation be applied to the length of exclusion"
(P. Brief, at 2), I have no authority to
consider his request.
The fact that New York State excluded Petitioner for two years from the date
of his conviction has no
bearing on the length of the exclusion imposed and directed by the I.G. Section
1128(c)(3)(B) of the Act
requires that an exclusion imposed under section 1128(a)(1) be for a minimum
mandatory period of at least
five years. This five-year minimum mandatory requirement is codified also in
the regulations at 42 C.F.R.
1001.102(a). The Act does not permit the Secretary to offset a minimum mandatory
exclusion against a
previously imposed State exclusion. Neither the I.G. nor an ALJ has the authority
to reduce a five-year
minimum mandatory exclusion. Maximo Levin, M.D., DAB CR343 (1994). Since the
I.G. excluded
Petitioner pursuant to section 1128(a)(1), Petitioner's five-year exclusion
is reasonable as a matter of law.
Furthermore, the appellate panel in Shanti Jain, M.D., DAB CR237 (1992), aff'd,
DAB 1398 (1993), held
that "[a]n administrative law judge has no authority to alter the effective
date of exclusion designated by
the I.G. where the I.G. acted within the discretion afforded by statute and
regulation in setting the effective
date." Jain, DAB 1398, at 7. Thus, I am without authority to alter the
commencement date of Petitioner's
exclusion.
Finally, I note that Petitioner has submitted numerous "character reference"
letters. P. Ex. 2. Whether or
not Petitioner has a good character is immaterial and irrelevant to my consideration
of the issues in this
case. While statements attesting to Petitioner's good character may reflect
positively upon him, I have no
authority to consider them as bases for reducing the five-year exclusion imposed
and directed against him
by the I.G.
CONCLUSION
For the foregoing reasons, I find that the I.G. properly excluded Petitioner
from participating in Medicare
and Medicaid, pursuant to section 1128(a)(1) of the Act. Furthermore, the five-year
minimum period of
exclusion imposed and directed against Petitioner is mandated by section 1128(c)(3)(B)
of the Act.
Petitioner's five-year exclusion is, therefore, sustained.
________________________
Joseph K. Riotto
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. The I.G. submitted a brief (I.G. Brief), accompanied by five exhibits (I.G.
Exs. 1-5). I admit I.G. Exs.
1-5 into evidence. Petitioner submitted a brief (P. Brief), accompanied by four
exhibits (P. Exs. 1-4). I
admit P. Exs. 1-4 into evidence.