DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Gordon Lee Hanks, R.Ph.,
Petitioner,
- v. -
The Inspector General.
DATE: September 22, 1989
Docket No. C-112
DECISION OF ADMINISTRATIVE LAW JUDGE
ON MOTION FOR SUMMARY DISPOSITION
On February 28, 1989, the Inspector General (the I.G.) notified Petitioner
that he was being excluded from
participation in Medicare and State health care programs. The I.G. told Petitioner
that he was being
excluded as a result of his conviction in Utah State Court of an offense related
to the delivery of an item or
service under Medicaid. Petitioner was advised that exclusions from participation
in Medicare and
Medicaid of individuals or entities convicted of such an offense are mandated
by section 1128(a)(1) of the
Social Security Act. The I.G. further advised Petitioner that the law required
that the minimum period of
such exclusions be not less than five years. Petitioner was advised that his
exclusions were for the
minimum five-year period.
Petitioner timely requested a hearing, and the case was assigned to me for
a hearing and a decision. The
I.G. moved for summary decision in the case, and Petitioner opposed the motion.
I heard oral argument of
the motion in Salt Lake City, Utah, on September 6, 1989
I have considered the parties' arguments, their fact submissions, and applicable
law. I conclude that the
exclusions imposed and directed by the I.G. in this case are mandated by section
1128(a)(1) of the Social
Security Act. Therefore, I enter summary disposition in favor of the I.G.
ISSUES
The issues in this case are whether:
1. Summary disposition is appropriate;
2. Petitioner was "convicted" of a criminal offense within the meaning
of section 1128(i) of the Social
Security Act;
3. Petitioner was convicted of a criminal offense related to the delivery
of an item or service under a
Medicaid program; and
4. The exclusions imposed and directed by the I.G. against Petitioner were mandated by law;
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is the proprietor of a pharmacy in Holladay, Utah. Oral Arg.
2. On September 14, 1988, Petitioner was charged with the criminal offense
of filing false Medicaid
claims.
P. Ex. 4; I.G. Ex. 3.
3. On October 6, 1988, Petitioner entered a plea bargain agreement. P. Ex. 2; I.G. Ex. 5.
4. Petitioner agreed to plead guilty to filing false claims. P. Ex. 2; I.G. Ex. 5.
5. Petitioner agreed to pay the sum of $4,200.00 to the Utah Bureau of Medicaid
Fraud, as restitution,
penalty, and to cover the costs of investigating his case. P. Ex. 2; I.G. Ex.
5.
6. Petitioner acknowledged that if he failed to comply with each and every
term of the plea agreement and
the orders of the Third Circuit Court, Salt Lake County, State of Utah (the
Court), the Court would accept
Petitioner's guilty plea and impose a sentence in his case. P. Ex. 2; I.G. Ex.
5.
7. The parties to the plea agreement recommended that the Court receive Petitioner's
plea and hold the
plea and imposition of sentence in abeyance pending Petitioner's successful
completion of probation.
P. Ex. 2; I.G. Ex. 5.
8. On October 6, 1988, Petitioner pleaded guilty to filing false claims with
Medicaid. P. Ex. 3;
I.G. Ex. 6.
9. The Court agreed to accept the terms of the plea agreement, and advised
Petitioner that if he violated the
agreement, the Court would enter Petitioner's guilty plea and impose a sentence.
P. Ex. 3; I.G. Ex. 6.
10. On December 6, 1988, the Court dismissed the charges against Petitioner,
based on Petitioner's
assertion that he had complied with the terms of the plea agreement.
P. Ex. 1.
11. Petitioner was convicted of a criminal offense within the meaning of section
1128(i) of the Social
Security Act. Findings 3-9; Social Security Act, section 1128(i).
12. Petitioner was convicted of an offense related to the delivery of an item
or service under a Medicaid
program. Findings 4, 8; Social Security Act, section 1128(a)(1).
13. 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.
14. On February 28, 1989, 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(a)(1) of the Social
Security Act. I.G. Ex. 1.
15. Summary disposition is appropriate in this case. See 56 F.R.C.P.
16. The exclusions imposed and directed against Petitioner by the I.G. were
for five years, the minimum
period required by section 1128(a)(1) of the Social Security Act. I.G. Ex. 1;
Social Security Act,
section 1128(c)(3)(B).
17. The exclusions imposed and directed against Petitioner by the I.G. are
mandated by law. Finding 12;
Social Security Act, sections 1128(a)(1); 1128(c)(3)(B).
ANALYSIS
1. Summary disposition is appropriate in this case.
The I.G. moved for summary disposition in this case, contending that he is
entitled to a favorable decision
as a matter of law. The motion raises the threshold question of whether this
is an appropriate case to enter
summary disposition.
Summary disposition is appropriate in an exclusion case where there are no
disputed issues of material fact
and where the undisputed facts demonstrate that one party is entitled to judgment
as a matter of law. John
W. Foderick, M.D., v. The Inspector General, Docket No. C-113, decided September
8, 1989; Howard B.
Reife, D.P.M., v. The Inspector General, Docket No. C-64, decided April 28,
1989; Michael I. Sabbagh,
M.D., v. The Inspector General, Docket No. C-59, decided February 22, 1989;
Jack W. Greene v. The
Inspector General, Docket No. C-56, decided January 31, 1989, appeal docketed,
DAB No. 89-59,
Decision No. 1078 (1989); see F.R.C.P. 56.
Summary disposition should not be granted unless, after considering the facts
in the light most favorable to
the party against whom the motion is made, the decision maker is convinced that
there exists no genuine
issue of material fact remaining for trial; the moving party then is entitled
to a decision as a matter of law.
Continental Casualty Co. v. City of Richmond, 763 F.2d 1076, 1078-79 (9th Cir.
1985); Lang v. New York
Life Ins. Co., 721 F.2d 118, 120 (3rd Cir. 1983); D.L. Auld Co. v. Chroma Graphics
Corp., 714 F.2d 1144,
1146 (Fed. Cir. 1983). Summary disposition is an appropriate method of disposing
of a legal question of
statutory construction in which the legislative history and policy are the primary
considerations. Mobil Oil
Corp. v. Federal Energy Administration, 566 F.2d 87, 92 (Temp. Emer.
Ct. App. 1977).
I conclude that the material facts in this case are not disputed. Indeed, the
parties both rely on the identical
documents to establish the facts of this case. The parties vigorously dispute
the meaning of the language in
section 1128 of the Social Security Act, and how that language should be applied
to the undisputed facts of
this case. Therefore, the issues which must be decided in this case are issues
of legal interpretation, and
summary disposition is an appropriate mechanism to resolve these issues.
2. Petitioner was "convicted" of a criminal offense within the meaning
of section 1128(i) of the
Social Security Act.
Petitioner's principal contention is that he was not "convicted"
of a criminal offense within the meaning of
section 1128 of the Social Security Act. Therefore, according to Petitioner,
there exists no authority for the
I.G. to impose and direct exclusions against him.
Section 1128(a)(1) of the Social Security Act requires the Secretary (or his
delegate, the I.G.) to exclude
from participation in Medicare, and to direct the exclusion from participation
in Medicaid:
any individual or entity that has been convicted of a criminal offense related
to the delivery of an
item or service under title XVIII or under any State health care program. (Emphasis
added).
The term "convicted of a criminal offense" is defined at section
1128(i) of the Social Security Act. The
law provides that an individual or entity is considered to have been convicted
of a criminal offense:
(1) when a judgment of conviction has been entered against the individual
or entity by a Federal,
State, or local court, regardless of whether there is an appeal pending or whether
the judgment of
conviction or other record relating to criminal conduct has been expunged;
(2) when there has been a finding of guilt against the individual or entity
by a Federal,
State, or local court;
(3) when a plea of guilty or nolo contendere by the individual or entity has
been accepted by a
Federal, State or local court; or
(4) when the individual or entity has entered into participation in a first
offender, deferred
adjudication, or other arrangement or program where judgment of conviction has
been withheld.
The undisputed facts in this case establish that Petitioner was charged under
Utah law with the crime of
submitting false Medicaid claims. Finding 2. Petitioner entered a plea agreement
with the prosecutor,
which was accepted by the Court. Findings 3-9. Petitioner pleaded guilty to
filing false claims against
Medicaid, and he agreed to pay restitution, a penalty, and the costs of investigation.
Id. The Court held
Petitioner's plea in abeyance pending Petitioner's compliance with the terms
of the plea agreement. Id.
The court then dismissed the charges against Petitioner, based on his representation
that he had complied
with the terms of the plea agreement. Finding 10.
Petitioner contends that he made his guilty plea as part of a "unique"
arrangement with the prosecutor. P.'s
Brief at 7. According to Petitioner, the terms of this arrangement enabled him
to discharge a "civil"
obligation to the State without any criminal judgment being entered against
him. The key to this
arrangement was that the court agreed to hold Petitioner's guilty plea in abeyance
pending satisfaction of
the terms of the plea agreement. Once the agreement was complied with by Petitioner,
the court dismissed
the criminal charges against Petitioner. P.'s Brief at 7-8.
Petitioner argues that his plea agreement does not fall within any of the definitions
of conviction contained
in section 1128(i). He contends that no judgment of conviction was entered against
him, as is specified by
subsection (i)(1). Nor, according to Petitioner, was any finding of guilt made
by the court, as would be
necessary to meet the criteria of subsection (i)(2). Petitioner asserts that
no plea of guilty or nolo
contendere was accepted by the Utah court within the meaning of subsection (i)(3).
Finally, Petitioner
claims that his plea agreement is not a first offender, deferred adjudication,
or "other arrangement or
program where judgment of conviction has been withheld" as described in
subsection (i)(4).
The I.G. argues that the plea agreement was not "civil" in character,
pointing out that Petitioner expressly
pleaded guilty to a criminal offense in both the plea agreement and at his court
appearance. The I.G.
asserts that Petitioner was convicted of a criminal offense because the plea
agreement falls within the
express criteria of subsections (i)(3) and (4).
For purposes of this decision, I accept Petitioner's assertion that his plea
agreement was a "unique"
arrangement. I also accept Petitioner's argument that the plea agreement reflected
his belief that he was not
actually guilty of the offense to which he pleaded, but embodied his desire
to put to rest the criminal
charges which had been filed against him. See P.'s Brief at 7-8. Nonetheless,
I conclude that Petitioner
was convicted of a criminal offense as defined by section 1128(i).
I conclude that Petitioner's plea agreement is a "guilty plea" pursuant
to subsection (i)(3). It also
constitutes entry into a deferred adjudication or other arrangement or program
where judgment of
conviction has been withheld pursuant to subsection (i)(4). I base my conclusion
on both the plain
meaning of the law and on legislative history.
Both the plea agreement and the transcript of Petitioner's court appearance
establish that Petitioner pleaded
guilty to a criminal offense. Findings 4, 8-9. Petitioner's guilty plea was
voluntary and was made as a
choice among the alternative courses of action available to him, including a
trial of the charges. The court
"accepted" Petitioner's plea. The statutory definition of acceptance
of a plea was met when Petitioner
offered to plead guilty and the court accepted his offer. Petitioner's plea
and the court's acceptance of the
plea precisely conform to the criteria established in section 1128(i)(3). The
fact that the court held entry of
the plea in abeyance and subsequently dismissed the charges against Petitioner,
conditioned on Petitioner's
satisfying the terms of his plea agreement, is not relevant, because there is
no language in subsection (i)(3)
which states or suggests that the definition of "conviction" in this
subsection is qualified or limited by
judicial actions taken subsequent to acceptance of a plea. Carlos E. Zamora,
M.D., v. The Inspector
General, Docket No. C-74, decided March 30, 1989; Roberto V. Salinas, v. The
Inspector General, Docket
No. C-72, decided April 12, 1989.
The language of subsection (i)(4) is also plain and without qualifying terms
or conditions. It encompasses
those arrangements where a party pleads guilty, but the court agrees to withhold
entry of the conviction
pending the party's satisfaction of the terms of a plea agreement. I conclude
that the court's agreement to
hold Petitioner's plea in abeyance pending Petitioner's satisfying the terms
of the plea agreement is an
"other program where judgment of conviction has been withheld." This
is evident from the transcript of
Petitioner's court appearance:
MR. KROLL (the prosecutor): Just so the defendant is clear or that I make on
the record my clear
intention: This is a plea given, and as the Court indicated, if there was violations
of probation, the
defendant would be brought back and sentenced. We would not come back and have
a trial. The
defendant is waiving his opportunity for trial.
THE COURT: He's pled guilty at this point but I'm holding him, conditioned
upon his compliance with
that agreement. If he doesn't, then we enter the guilty plea and sentence.
MR. KROLL: That's my understanding.
MR. McCONKIE (Petitioner's counsel): Right. But the guilty plea hasn't been
entered. That's the critical
thing to us in this hearing.
P. Ex. 3 at 8-9; I.G. Ex. 6 at 8-9.
Petitioner asserts that a plea agreement does not meet the criteria of subsections
(i)(3) or (i)(4) absent an
admission of guilt by an individual or a finding of guilt by the court which
accepts the plea. I disagree with
this assertion. Section 1128(i) establishes four alternative definitions of
"conviction". A finding of guilt is
a necessary element of a "conviction" as defined by section (i)(2).
It is not an element of the definitions of
conviction contained in either subsection (i)(3) or (i)(4).
I also disagree with Petitioner's argument that a guilty plea must be "entered"
by a court in order to
establish a conviction under section 1128(i). Subsection (i)(1) does require
that a judgment be "entered" by
a court. However, that requirement is absent in the definition of conviction
contained in subsection (i)(3),
which only requires that a court accept an individual's offer to plead guilty.
Subsection (i)(4) does refer to
"entry" by an individual in a first offender program or other program
where judgment of conviction has
been withheld. This is distinguishable from "entry" of a plea as the
term is used in subsection (i)(1). In the
former subsection, "entry" refers to an action taken by a court based
on a conviction. In the latter
subsection, "entry" refers to an action taken by an individual in
lieu of admitting guilt.
As I noted in the Zamora decision, the plain meaning of the law is underscored
by legislative history.
Congress intended the definition of "conviction" in section 1128(i)
to include all circumstances where a
party pleaded guilty to an offense, except where a conviction is vacated on
appeal. The law providing for
exclusion of individuals and entities who are convicted of certain offenses
from participating in Medicare
and Medicaid is a legislative judgment that such individuals and entities cannot
be trusted with public
funds or to treat beneficiaries or recipients of such funds. Congress determined
that parties who pleaded
guilty to such offenses were as untrustworthy as those convicted after a trial.
Zamora, supra, at 8-9; 1986
U.S. Cong. Code & Adm. News, 3664-65.
3. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under a
Medicaid program.
Petitioner contends that, assuming he was convicted of a criminal offense,
he was not convicted of an
offense related to the delivery of an item or service under the Medicaid program.
Petitioner asserts that the
I.G. improperly excluded him pursuant to section 1128(a)(1) of the Social Security
Act. I conclude that
Petitioner was convicted of a criminal offense within the meaning of section
1128(a)(1).
The undisputed facts of this case are that Petitioner was charged with filing
false Medicaid claims. Finding
2. Petitioner pleaded guilty to a lesser offense, but the crime to which he
pleaded nevertheless consisted of
the offense of fraud against a Medicaid program. Finding 8.
Section 1128(a)(1) of the Social Security Act has been consistently interpreted
to encompass convictions
for fraud or other financial crimes directed against Medicare and Medicaid.
Greene and Reife, supra. On
its face, the conviction in this case does not appear to be distinguishable
from those at issue in the
aforementioned cases.
Petitioner attempts to distinguish the conviction in the present case on two
grounds. First, he argues that,
notwithstanding his guilty plea, he "was never involved in any criminal
conduct . . . ." P.'s Brief at 10.
Second, he argues that he was not "found guilty" of criminal conduct.
Id. By the latter argument,
Petitioner evidently means that the Utah court never found as fact that Petitioner
had committed the crime
to which he pleaded guilty.
I conclude that these purported distinctions are not meaningful. The mandatory
exclusion provisions of
section 1128(a)(1) of the Social Security Act are triggered by conviction of
a criminal offense related to the
delivery of an item or service under Medicare or Medicaid. It is not relevant
that a petitioner subsequently
contends that he did not commit the offense of which he was convicted. Reife,
supra, at 10. Nor does
section 1128(a)(1) require that a conviction of a program-related offense be
supported by a finding of guilt.
See Part 2 of this Analysis, supra
4. The exclusions imposed and directed by the I.G. against Petitioner were mandated by law.
The exclusion law requires the Secretary (or his delegate, the I.G.) to impose
and direct exclusions against
individuals or entities convicted of offenses described in section 1128(a)(1)
for a minimum period of five
years. Social Security Act, section 1128(c)(3)(B). In this case, the I.G. correctly
determined that Petitioner
was convicted of a criminal offense described in section 1128(a)(1), and excluded
him for the minimum
period required by law.
Petitioner argues that the mandatory exclusions imposed against him are unreasonable,
because he
allegedly did not participate in any criminal activity against Medicare or Medicaid.
P.'s Brief at 11.
However, even as the mandatory exclusion provisions of section 1128(a)(1) are
triggered by conviction of
an offense related to the delivery of an item or service under the Medicare
or Medicaid programs, so also
are the five-year minimum exclusion requirements of section 1128(c)(3)(B). The
I.G. was required by law
to exclude Petitioner for at least five years. Evidence concerning the degree
of Petitioner's culpability does
not obviate this requirement. Therefore, it is not relevant.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from participation in Medicare, and to direct that Petitioner be
excluded from participation in
Medicaid, for five years, was mandated by law. Therefore, I am entering a decision
in favor of the I.G. in
this case.
____________________________
Steven T. Kessel
Administrative Law Judge