DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Clarence H. Olson,
Petitioner,
- v. -
The Inspector General.
Date: October 5, 1989
Docket No. C-85
DECISION AND ORDER
In this case, governed by section 1128 of the Social Security Act (Act), Petitioner
filed a timely request for
a hearing before an Administrative Law Judge (ALJ) to contest the December 14,
1988 notice of
determination (Notice) issued by the Inspector General (I.G.) which excluded
Petitioner from participating
in the Medicare and Medicaid programs for five years.
After a telephone prehearing conference, both parties filed motions for summary
disposition. In addition,
Petitioner sought, in the alternative, an evidentiary hearing on the issue of
the length of exclusion.
Thereafter, oral argument was held by telephone and the record was closed.
The parties filed a stipulation agreeing to the authenticity of six of eight
exhibits filed by the I.G. in support
of the motion for summary disposition. Certified copies of the two remaining
I.G. exhibits were filed and,
during the oral argument, Petitioner stipulated to the authenticity of these
two exhibits. Exhibits A-1
through A-10 were filed in support of Petitioner's motion and opposition and
there was no objection made
by the I.G. to these exhibits.
Based on the entire record before me, I conclude that summary disposition is
appropriate in this case, that
Petitioner is subject to the minimum mandatory exclusion provisions of sections
1128 (a) (1) and 1128 (c)
(3) (B) of the Act, and that it is appropriate for Petitioner to be excluded
for a minimum period of five
years.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
Section 1128 of the Social Security Act (Act) is codified at 42 U.S.C. 1320a-7
(West U.S.C.A., 1989
Supp.). Section 1128(a) (1) of the Act provides for the exclusion from Medicare
and Medicaid of those
individuals or entities "convicted" of a criminal offense "related
to" the delivery of an item or service under
the Medicare or Medicaid programs. Section 1128(c)(3)(B) provides for a five
year minimum period of
exclusion for those excluded under section 1128 (a)(1).
While section 1128(a) of the Act provides for a minimum five-year mandatory
exclusion for (1)
convictions of program-related crimes and (2) convictions relating to patient
abuse, section 1128(b) of the
Act provides for the permissive exclusion of "individuals and entities"
for twelve types of other
convictions, infractions, or undesirable behavior, such as convictions relating
to fraud, license revocation,
or failure to supply payment information.
II. The Federal Regulations.
The governing federal regulations (Regulations) are codified in 42 C.F.R.,
Parts 498, 1001, and 1002
(1988). Part 498 governs the procedural aspects of this exclusion case; Parts
1001 and 1002 govern the
substantive aspects.
Section 1001.123 requires the I.G. to issue an exclusion notice to an individual
whenever the I.G. has
"conclusive information" that such individual has been "convicted"
of a criminal offense "related to" the
delivery of a Medicare or Medicaid item or service; such exclusion must begin
15 days from the date on
the notice.
ISSUES
The issues raised by the parties are:
1. Whether Petitioner was "convicted" of a criminal offense within
the meaning of sections 1128(a)(1) and
(i) of the Act.
2. Whether Petitioner was convicted of a criminal offense "related to
the delivery of an item or service"
under the Medicaid program within the meaning of section 1128(a)(1) of the Act.
3. Whether Petitioner is subject to the minimum mandatory five year exclusion
provisions of sections
1128 (a) (1) and 1128(c)(3)(B) of the Act.
4. Whether the exclusion should be terminated by this ALJ on the ground that
the I.G. failed to comply
with the Administrative Procedure Act.
5. Whether the I.G. is prohibited by provisions of federal law (regarding program
operating
responsibilities) from excluding Petitioner.
6. Whether summary disposition is appropriate in this case
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and the submissions of the
parties, and being advised
fully herein, I make the following Findings of Fact and Conclusions of Law:
1. Petitioner is a resident of California and, for the relevant periods in
issue, he was a partner in the United
Ambulance Company (aka United Health Enterprise) and a partner in Guardian Ambulance.
2. As part of his duties for both of the companies, Petitioner reviewed ambulance
"tickets" (lists for
services rendered during the course of the ambulance trip) for accuracy and
completeness.
3. Petitioner was indicted in February of 1987 by a federal grand jury on 32
counts of causing false
statements to be submitted on Medicare claims, in violation of 42 U.S.C. 1395nn(a)(1).
I.G. Ex. 1.
4. The indictment charged that Petitioner directed employees to mark ambulance
tickets for services that
had not been rendered and instructed employees to bill Medicare for services
that had not been rendered.
I.G. Ex. 1.
5. On March 28, 1988, Petitioner pled nolo contendere to 32 misdemeanor counts
of making false
statements in applications for Medicare payments, from July, 1986
to December, 1986, in violation of federal law. I.G. Ex. 2.
6. On March 28, 1988,the United States District Court for the Central District
of California "accepted"
Petitioner's plea of nolo contendere to all 32 counts in the indictment within
the meaning of sections
1128(a)(1) and 1128(i) of the Act. I.G. Ex. 2, 3, 4.
7. Petitioner was convicted of a criminal offense "related to the delivery
of an item or service" under the
Medicare program within the meaning of section 1128(a)(1) of the Act.
8. The I.G. properly excluded Petitioner from participation in Medicare, and
properly directed his
exclusion from Medicaid, for a period of five years and was required to do so
under section 1128 of the
Act.
9. The I.G. did not violate the federal Administrative Procedure Act, 5 U.S.C.
551, et seq., by not
promulgating regulations to distinguish the exclusion authorities in section
1128(a)(1) and 1128(b)1) of the
Act.
10. The I.G. did not rely upon an "unpublished guidance/directive"
in classifying Petitioner as subject to
the mandatory exclusion authority of section 1128(a)(1) of the Act.
11. The material and relevant facts in this case are not contested.
12. The classification of the Petitioner's criminal offense as subject to the
authority of 1128(a)(1) is a legal
issue.
13. There is no need for an evidentiary hearing in this case.
14. The I.G. is not prohibited by federal law or regulations from participation in the exclusion process.
15. The I.G. is entitled to summary disposition in this proceeding.
DISCUSSION
I. Petitioner was "Convicted" of a Criminal Offense as a Matter of Federal Law.
Section 1128(i) of the Act provides that an individual has been "convicted" of a criminal offense when:
(1) 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) there has been a finding of guilt against the individual or entity by
a Federal, State, or
local court;
(3) a plea of guilty or nolo contendere by the individual or entity has been
accepted by a
Federal, State, or local court; or
(4) 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.
I find and conclude that Petitioner was "convicted" within the meaning
of section 1128(a)(1) and (i)(3)
because it is axiomatic that the interpretation of a federal statute or regulation
is a question of federal and
not state law. United States v. Allegheny Co., 322 U.S. 174, 183 (1944); United
States v. Anderson Co.,
Tenn., 705 F.2d 184, 187 (6th Cir., 1983), cert. denied, 464 U.S. 1017 (1984).
My task is to interpret the
words of section 1128 of the Act in light of the purposes that section 1128
was designed to serve. See
Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 608 (1979).
The term "accepted" in section 1128(i)(3) is defined by Webster's
Third New International Dictionary,
1976 Unabridged Edition, as the past tense of "to receive with consent."
The term "accepted" is the
opposite of the term rejected. The United States District Court for the Central
District of California did not
reject Petitioner's plea of guilty. Quite the contrary, the court "accepted"
Petitioner's plea within the
meaning of section 1128(i)(3).
II. Petitioner's Conviction "Related to the Delivery of an item or service"
Within The Meaning of
Section 1128 of The Act.
Petitioner argues that even if I rule that he was "convicted," he
should not be excluded because the offense
was not a program-related crime giving rise to a mandatory exclusion under section
1128(a)(1) of the Act.
I find and conclude, as a matter of federal law, that the mandatory exclusion
provisions of section 1128 are
not limited to situations where a medical provider or other individual or entity
is convicted under a statute
expressly criminalizing fraud against a federal or state health care program.
See Arthur B. Stone, D.P.M.,
v. The Inspector General, Civil Remedies Docket No. C-52 (1989); and Charles
W. Wheeler v. The
Inspector General, Civil Remedies Docket No. C-61 (1989).
The test of whether a "conviction" is "related to the delivery
of an item or service" must be a common
sense determination based on all relevant facts as determined by the finder
of fact, not merely a narrow
examination of the language within the four corners of the final judgment and
order of the criminal trial
court.
The inquiry is whether the conviction "related to the delivery of an item
or service" under Medicare, not
whether the criminal court convicted Petitioner of actual fraud. My task is
to examine all relevant conduct
to determine if there is a relationship between the judgment of conviction and
the Medicare program. Had
Congress intended a different result, it would have used the phrase "conviction
for" or conviction
"restricted to" instead of "related to." An examination
of whether a conviction is "related to the delivery of
a item or service" under the Medicare program necessarily involves an inquiry
into Petitioner's conduct.
Accordingly, the finder of fact must consider all relevant documents pertaining
to the trial court
proceeding. These may include the indictment, the transcript of the sentencing
proceeding, and plea
agreements.
The record establish that the "conviction" of Petitioner was "related
to" the delivery of a Medicare item
within the meaning of section 1128 of the Act.
Black's Law Dictionary, Fifth Edition (West Publishing 1979) defines "related"
as: "standing in relation;
connected; allied; akin." This case should not be decided in a vacuum,
or with a strict, hypertechnical
interpretation of the term "related to." Petitioner was convicted
of submitting false Medicare claims.
There is a simple, common-sense connection, supported by the record, between
the actions associated with
the conviction and the "delivery of an item or service" under the
Medicare program.
III. A Minimum Mandatory Five Year Exclusion Was Required In This Case.
Section 1128(a)(1) of the Act clearly requires the I.G. to exclude individuals
and entities from the
Medicare program, and direct their exclusion from the Medicaid program, for
a minimum period of five
years, when such individuals and entities have been "convicted" of
a criminal offense "related to the
delivery of an item or service" under the Medicare or Medicaid programs
within the meaning of section
1128(a)(1) of the Act. Congressional intent on this matter is clear:
A minimum five-year exclusion is appropriate, given the seriousness of the
offenses at
issue. . . . Moreover, a mandatory five-year exclusion should provide a clear
and strong deterrent against
the commission of criminal acts.
S. Rep. No. 109, 100th Cong., 1st Sess. 2, reprinted in 1987 U.S. CODE CONG.
& ADMIN. NEWS 682,
686.
Since Petitioner was "convicted" of a criminal offense and it was
"related to the delivery of an item or
service" under the Medicare program within the meaning of section 1128(a)(1)
and (i) of the Act, the I.G.
was required to exclude the Petitioner for a minimum of five years.
IV. The I.G. Has Complied With The Administrative Procedure Act.
The Petitioner argued that the I.G. (1) failed to comply with the federal Administrative
Procedure Act, 5
U.S.C. 552(a)(1) and 553, by not promulgating regulations.
For the reasons I stated in my Decision and Order in Stone, supra, Docket No.
C-52, and Wheeler, supra,
Docket No. C-61, I find that Petitioner's argument has no merit.
V. The I.G.'s Participation In The Exclusion Process Does Not Violate The Act.
The I.G.'s "participation" in the exclusion process is not contrary
to the Act, because it does not conflict
with the prohibition on the "transfer of program operating responsibilities"
to the I.G. 42 U.S.C. 3526(a).
The arguments raised here by Petitioner are similar, if not identical, to the
arguments raised by Petitioner in
Stone, supra, and Wheeler, supra. For the same reasons I stated in Stone and
Wheeler, I feel that
Petitioner's arguments are without merit.
VI. There Is No Need For An Evidentiary Hearing In This Case.
I also find the Petitioner's argument that he is entitled to an evidentiary
hearing concerning the
classification of his exclusion to be without merit for the same reasons expressed
in Stone supra, at p. 15,
and Wheeler, supra, at pp. 17 and 18.
CONCLUSION
Based on the law and undisputed material facts in the record of this case,
I conclude the I.G. properly
excluded the Petitioner from the Medicare program, and directed his exclusion
from the Medicaid program,
for the minimum mandatory period of five years.
IT IS SO ORDERED.
________________________________
Charles E. Stratton
Administrative Law Judge