Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Cases of: Gilbert Ross, M.D., and Deborah Williams, M.D., Petitioners,
- v. -
The Inspector General.
Date: June 16, 1997
Docket Nos. C-94-368
C-94-369
Decision No. CR478
DECISION
I sustain the determinations of the Inspector General (I.G.) to
exclude Petitioners Gilbert Ross, M.D. (Petitioner Ross) and
Deborah Williams, M.D. (Petitioner Williams) from participating
in Medicare and other federally funded health care programs,
including State Medicaid plans. I find that the I.G. is mandated
to exclude each Petitioner, because each Petitioner was
convicted, within the meaning of section 1128(a)(1) of the Social
Security Act (Act), of a criminal offense related to the delivery
of an item or service under the New York State Medicaid program.
I find to be reasonable the exclusions imposed by the I.G., of
10 years in the case of Petitioner Ross, and 15 years in the case
of Petitioner Williams.
I. Background
On June 10, 1994, the I.G. notified each Petitioner that she was
excluding that Petitioner pursuant to section 1128(a)(1) of the
Act. The I.G. advised Petitioner Ross that he was being excluded
for a period of 10 years. She advised Petitioner Williams that
she was being excluded for a period of 15 years. The I.G.
advised each Petitioner that the length of that Petitioner's
exclusion was based on factors in that Petitioner's case which
the I.G. determined to be aggravating.
Each Petitioner requested a hearing, and each Petitioner's case
was assigned to me for a hearing and a decision. I agreed to
stay each Petitioner's case pending the outcome of the appeal of
each Petitioner's conviction. Eventually, the Petitioners
advised me that the appeals had been decided and that their cases
were ready to be heard. The parties agreed that the cases should
be consolidated for hearing and decision. I agreed to
consolidate the cases, in light of the parties' requests, and
also in light of the facts that the cases share.
The parties agreed that the cases should be heard based on
written submissions. The I.G. submitted a brief and a reply
brief, and six proposed exhibits, I.G. Ex. 1 - 6. Petitioners
jointly submitted a brief. Petitioner Ross submitted a
supplemental brief. Petitioners also submitted a joint reply
brief. Petitioners submitted three proposed exhibits, P. Ex. 1 -
3.
Petitioners objected to the I.G.'s reliance on the indictment
(I.G. Ex. 1) as evidence, asserting that the indictment is not
evidence. Although the indictment would not be evidence if
Petitioners were acquitted, it does represent an accurate
depiction of the particulars of the criminal offenses of which
Petitioners were convicted. Therefore, I receive into evidence
I.G. Ex. 1 - 6. The I.G. objected to all or part of P. Ex. 1 - 3
on the grounds of relevancy. I agree with the I.G. that
substantial parts of Petitioners' exhibits are irrelevant, and
where pertinent, I set forth my reasoning below. However,
admission of Petitioners' exhibits is not prejudicial to the
I.G., and, in order to complete the record, I receive into
evidence P. Ex. 1 - 3. I base my decisions in these cases on the
governing law, the evidence, and the parties' arguments.
II. Issues, findings of fact and conclusions of law
The issues in these cases are: (1) whether the I.G. is required
to exclude Petitioner Ross or Petitioner Williams pursuant to
section 1128(a)(1) of the Act; and (2) whether the length of the
exclusions ¾ 10 years in the case of Petitioner Ross and 15
years in the case of Petitioner Williams ¾ is reasonable. I
make findings of fact and conclusions of law (Findings) to
support my decision that the I.G. is required to exclude each
Petitioner and that the exclusion of each Petitioner is
reasonable. I discuss each of my Findings in detail, below.
1. Section 1128(a)(1) of the Act mandates the I.G. to
exclude any individual who is convicted of a criminal
offense related to delivery of an item or service under
Medicare or under a State Medicaid program.
2. The I.G. is required to exclude for a minimum of
five years any individual who is convicted of a criminal
offense as defined by section 1128(a)(1) of the Act.
3. The I.G. may exclude an individual who is convicted
of a criminal offense as defined by section 1128(a)(1) for
more than five years where there exists evidence of a factor
or factors defined by the regulation to be aggravating,
which is not offset by evidence of any factor or factors
defined by the regulation to be mitigating.
4. Petitioners are physicians.
5. On November 23, 1992, Petitioners were indicted,
along with other individuals, in the United States District
Court for the Southern District of New York.
6. On November 10, 1993, a judgment of conviction was
entered against Petitioner Ross. Petitioner Ross was found
guilty of the following counts of the indictment:
1 (participating in a racketeering enterprise); 2
(violation and pattern of racketeering activity); 77 - 86
(mail fraud); and 131 (criminal forfeiture).
7. On November 10, 1993, a judgment of conviction was
entered against Petitioner Williams. Petitioner Williams
was found guilty of the following counts of the indictment:
1 (conspiracy to participate in a racketeering enterprise);
2 (participating in the affairs of an enterprise through a
pattern of racketeering activity); 31 - 50 (mail fraud); and
102 - 110 (money laundering).
8. Petitioners were associated with medical clinics in
a criminal conspiracy and scheme to commit mail fraud.
9. Petitioners engaged in a criminal enterprise through
a pattern of racketeering activity.
10. The target of the criminal conspiracy and scheme in
which Petitioners participated was the New York Medicaid
program.
11. Petitioners engaged in specific acts of mail fraud
by billing the New York Medicaid program for medically
unnecessary examinations, procedures, and drugs.
12. Additionally, Petitioner Williams engaged in money
laundering in furtherance of the conspiracy and scheme to
defraud the New York Medicaid program.
13. The amount of money paid by the New York Medicaid
program to Petitioner Ross as a consequence of the mail
fraud of which Petitioner Ross was convicted was $85,137.25.
14. The amount of money paid by the New York Medicaid
program to Petitioner Williams as a consequence of the mail
fraud of which Petitioner Williams was convicted was
$134,516.25.
15. On November 10, 1993, Petitioner Ross was sentenced
to pay restitution in the amount of $612,855.
16. On November 10, 1993, Petitioner Williams was
sentenced to pay restitution in the amount of $1,814,896.
17. On November 14, 1995, an amended judgment of
conviction was entered against Petitioner Ross. In the
amended judgment, Petitioner Ross was found guilty of the
same counts of which he had been found guilty previously:
counts 1, 2, 77 - 86, and 131. Petitioner Ross was
sentenced to a term of imprisonment of 46 months. The
amount of restitution that Petitioner Ross was ordered to
pay was reduced to $85,137.25.
18. On September 19, 1995, an amended judgment of
conviction was entered against Petitioner Williams. In the
amended judgment, Petitioner Williams was found guilty of
the same counts of which she had been found guilty
previously: counts 1, 2, 31 - 50, and 102 - 110.
Petitioner Williams was sentenced to a term of imprisonment
of 41 months. The amount of restitution that Petitioner
Williams was ordered to pay was reduced to $30,000.
19. A criminal conspiracy to defraud a State Medicaid
program is a criminal offense within the meaning of section
1128(a)(1) of the Act.
20. Mail fraud directed against a State Medicaid
program is a criminal offense within the meaning of section
1128(a)(1) of the Act.
21. The I.G. proved that Petitioner Ross was convicted
of criminal offenses within the meaning of section
1128(a)(1) of the Act.
22. The I.G. proved that Petitioner Williams was
convicted of criminal offenses within the meaning of section
1128(a)(1) of the Act.
23. A crime that satisfies the definition of a criminal
offense stated by section 1128(a)(1) of the Act is a
criminal offense within the meaning of section 1128(a)(1),
even if it also might fall within the definition of some
other offense stated in one of the other parts of section
1128 of the Act.
24. The I.G. proved the existence of an aggravating
factor in the case of Petitioner Ross, in that his crimes
caused a loss to the New York Medicaid program of more than
$1,500.
25. The I.G. proved the existence of a second
aggravating factor in the case of Petitioner Ross, in that
Petitioner Ross was sentenced to a period of incarceration
for his crimes.
26. The I.G. proved the presence of a third aggravating
factor in the case of Petitioner Ross, in that Petitioner
Ross was overpaid more than $1,500 by the New York Medicaid
program as the result of improper billings.
27. Petitioner Ross did not prove the existence of any
mitigating factors.
28. The I.G. proved the existence of an aggravating
factor in the case of Petitioner Williams, in that her
crimes caused a loss to the New York Medicaid program of
more than $1,500.
29. The I.G. proved the existence of a second
aggravating factor in the case of Petitioner Williams, in
that Petitioner Williams was sentenced to a period of
incarceration for her crimes.
30. The I.G. proved the presence of a third aggravating
factor in the case of Petitioner Williams, in that
Petitioner Williams was overpaid more than $1,500 by the New
York Medicaid program as the result of improper billings.
31. Petitioner Williams did not prove the presence of
any mitigating factors.
32. The evidence which relates to the aggravating
factors established in the case of Petitioner Williams
proves Petitioner Williams to be a highly untrustworthy
individual.
33. A 15-year exclusion of Petitioner Williams is
reasonable.
34. The evidence which relates to the aggravating
factors established in the case of Petitioner Ross proves
Petitioner Ross to be a highly untrustworthy individual.
35. A 10-year exclusion of Petitioner Ross is
reasonable.
III. Discussion
A. Governing law (Findings 1 - 3)
1. Section 1128(a)(1) of the Act (Finding 1 - 2)
The I.G. excluded Petitioners pursuant to section 1128(a)(1) of
the Act. This section mandates the I.G. to exclude any
individual who is convicted of a criminal offense related to the
delivery of an item or service under Medicare or under a State
health care program, including a State Medicaid program.
An individual who is found to have committed a crime within the
meaning of section 1128(a)(1) must be excluded. The minimum
period of exclusion for such an individual is five years. Act,
section 1128(c)(3)(B). The Act permits the I.G. to exclude for
more than five years an individual who is convicted of a section
1128(a)(1) offense where the circumstances of that individual's
case warrant an exclusion of more than five years.
Section 1128 of the Act, of which section 1128(a)(1) is a part,
is a remedial statute. Its purpose is not to punish individuals,
but to protect federally funded health care programs and their
beneficiaries and recipients from individuals who are established
to be untrustworthy. An exclusion that is imposed under section
1128 or any of its parts is reasonable if it relates reasonably
to the Act's legislative purpose. Congress concluded that an
individual who is convicted of a program-related offense within
the meaning of section 1128(a)(1) has established by his or her
criminal misconduct that he or she is so untrustworthy as to
necessitate an exclusion of at least five years. But, Congress
also recognized the possibility that such an individual may be so
untrustworthy as to require an exclusion of more than five
years.
2. The criteria for deciding the length of an
exclusion that is imposed under section 1128(a)(1) of
the Act (Finding 3)
The Secretary of the United States Department of Health and Human
Services (the Secretary) has published regulations which
establish the criteria for evaluating the trustworthiness of
those individuals who are excluded under any of the parts of
section 1128 of the Act, including section 1128(a)(1). These
regulations are contained in 42 C.F.R. Part 1001. The regulation
which specifically applies to exclusions imposed under section
1128(a)(1) is 42 C.F.R. §1001.102.
This regulation establishes the exclusive criteria which may be
used to evaluate the trustworthiness of an individual who is
excluded pursuant to section 1128(a)(1). The regulation provides
that, under section 1128(a)(1), an exclusion of more than five
years may be reasonable if there exists evidence in an
individual's case establishing the presence of any factors
defined by the regulation to be aggravating, which is not offset
by evidence of any factors defined by the regulation to be
mitigating. 42 C.F.R. § 1001.102(b)(1) - (6), (c)(1) - (3).
I may not consider evidence which does not relate to one of the
defined aggravating or mitigating factors in deciding whether an
exclusion imposed pursuant to section 1128(a)(1) is reasonable.
In effect, what is contained in 42 C.F.R. § 1001.102 are the
Secretary's rules of evidence on the issue of the trustworthiness
of an individual excluded pursuant to section 1128(a)(1) of the
Act.
Evidence which establishes the presence of aggravating or
mitigating factors in a case is only the starting point in
deciding whether an exclusion imposed pursuant to section
1128(a)(1) is reasonable. The regulation authorizes an exclusion
of more than five years where there exist aggravating factors
that are not offset by mitigating factors. It does not direct
that an exclusion of more than five years, or of any particular
length of more than five years, be imposed in such a case. The
decision of what is reasonable is left to the judgment of the
administrative law judge in a hearing concerning an exclusion of
more than five years imposed pursuant to section 1128(a)(1) of
the Act.
In order to evaluate the reasonableness of an exclusion imposed
pursuant to section 1128(a)(1), I must decide how any evidence
that relates to an aggravating or mitigating factor defines the
trustworthiness of an excluded individual. Evidence that
establishes one of the aggravating or mitigating factors may show
that an individual is relatively trustworthy or untrustworthy.
For example, an aggravating factor is established pursuant to 42
C.F.R. § 1001.102(b)(1), if the I.G. proves that the acts
resulting in an individual's conviction of a program-related
offense, or similar acts, resulted in financial loss to Medicare
or to a State health care program of $1,500 or more. Assuming
that such evidence exists, I would look at it as a gauge of the
excluded individual's trustworthiness to provide care. Proof
that an individual caused a financial loss greatly in excess of
$1,500 would be a basis to find that the individual is highly
untrustworthy. On the other hand, proof that an individual
caused a financial loss of only $1,500 or slightly more than
$1,500, while establishing the presence of an aggravating factor,
might not by itself prove the excluded individual to be so
untrustworthy as to require more than the five-year minimum
exclusion.
Petitioners assert that 42 C.F.R. § 1001.102 on its face deprives
them of due process. According to Petitioners, the regulation is
impermissibly ambiguous because it lacks precise standards which
would direct the length of exclusions based on the presence of
aggravating or mitigating factors. I do not have authority to
hear and decide challenges to regulations. 42 C.F.R. §
1005.4(c)(1). Therefore, I may not decide Petitioners' argument
that 42 C.F.R. § 1001.102 deprives them of due process.
Having said that, however, I do not find the regulation to be
imprecise or vague. The plain purpose of the regulation is
twofold: to define the criteria that the Secretary considers to
be relevant in deciding the trustworthiness of an excluded
individual; and, to allow the adjudicator discretion to apply
these criteria on a case-by-case basis. In order to comport with
the requirements of the Act, the regulation must allow for a
case-by-case evaluation of an individual's trustworthiness to
provide care.
B. The relevant facts (Findings 4 - 18)
Petitioners are physicians. I.G. Ex. 1 at 9 - 10. On November
23, 1992, Petitioners were indicted, along with other named
individuals, in the United States District Court for the Southern
District of New York. I.G. Ex. 1. The indictment charges that
Petitioners, along with the other named defendants, conspired to
defraud the New York Medicaid program by causing fraudulent
claims for Medicaid services to be submitted to that program.
Id. at 1 - 7. It charges additionally, that, in furtherance of
the scheme to defraud the New York Medicaid program, Petitioners
and other defendants combined and conspired to engage in a
pattern of racketeering in violation of the Racketeer Influenced
and Corrupt Organizations Act. Id. at 13 - 17. The indictment
charges Petitioners also with committing specific acts of mail
fraud and money laundering, in furtherance of their scheme to
defraud the New York Medicaid program. Id. at 17 - 29.
Judgments of conviction were entered against Petitioners on
November 10, 1993. Petitioner Ross was found guilty of: the
scheme and conspiracy described in count 1 of the indictment;
engaging in a pattern of racketeering activity, as described in
count 2; 10 specific acts of mail fraud, as described in counts
77 - 86; and criminal forfeiture, as described in count 131.
I.G. Ex. 3 at 1. Petitioner Williams was found guilty of: the
scheme and conspiracy described in count 1 of the indictment;
engaging in a pattern of racketeering activity, as described in
count 2, 20 specific acts of mail fraud, as described in counts
31 - 50; and nine counts of money laundering, as described in
counts 102 - 110 of the indictment. I.G. Ex. 2 at 1.
Petitioners were convicted of participating in an elaborate
conspiracy to defraud the New York Medicaid program. 1/ The
conspiracy involved the formation and operation of clinics which
were ostensibly intended to treat recipients of the New York
Medicaid program. I.G. Ex. 1 at 2. Petitioner Ross was employed
at one of these clinics. Id. at 5. Petitioner Williams also was
employed at that clinic, and at another clinic that was part of
the conspiracy. Id.
The clinics that were operated by the conspiracy were sham
clinics that generally did not provide legitimate Medicaid items
or services. The primary purpose of these clinics was to
manufacture fraudulent Medicaid reimbursement claims. The
patients that these clinics saw were Medicaid recipients who were
usually men between the ages of 25 and 45. United States v.
Jamshaid Khan et als., 53 F.3d 507, 512 (2d Cir. 1995). These
men, often, were homeless individuals and drug addicts. Id. The
patients seen by the clinics generally did not include women or
children, notwithstanding the fact that such recipients resided
in the neighborhoods where the clinics were located. Id. The
clinics never identified emergency cases or referred patients to
hospitals. Id. In order to maximize profits, the clinics
engaged in practices that were medically indefensible. Id.
These indefensible practices included turning away Medicaid
recipients after their first visit to a clinic, in order to avoid
devoting clinic time to less-lucrative follow-up visits by
recipients. Id. The clinics lacked substantial medical
equipment and were very dirty and unsanitary. Id.
The inducement that the clinics offered Medicaid recipients to
consent to be patients of the clinics was to issue the recipients
prescriptions for unnecessary drugs. Id. These prescriptions
could be converted into cash by the Medicaid recipients, by their
selling the drugs they obtained from the prescriptions on the
street, to street-level drug diverters. Id.
In return for receiving prescriptions, the Medicaid recipients
who were enlisted as patients provided the clinics with their
Medicaid recipient numbers. Id. That enabled the conspirators
to generate fraudulent Medicaid claims on behalf of the
recipients. The recipients also participated in unnecessary
medical tests and procedures, so that the conspiracy could make
money by fraudulently ordering the tests and procedures, and by
billing the New York Medicaid program for them, along with claims
for unnecessary office visits. Id.
Petitioners were necessary actors in the conspiracy. Id. In
order to be able to submit fraudulent Medicaid reimbursement
claims, the conspiracy needed the cooperation of physicians who
were authorized by the New York Medicaid program to claim
reimbursement from it for items or services provided to Medicaid
recipients. Id. Petitioners were authorized by the New York
Medicaid program to claim reimbursement from it for items or
services provided to Medicaid recipients. I.G. Ex. 1 at 5.
Petitioners facilitated the conspiracy by claiming reimbursement
from the New York Medicaid program for medically unnecessary
services and diagnostic tests. I.G. Ex. 1 at 9 - 10.
Additionally, Petitioners authorized physicians' assistants, who
were nominally under the supervision of Petitioners, to write
prescriptions for prescription drugs which were medically
unnecessary. Id.
Each Petitioner perpetrated fraud and related criminal activities
which caused the New York Medicaid program to incur very
substantial financial losses. Petitioner Ross was convicted of
engaging in specific acts of mail fraud which resulted in
payments by the New York Medicaid program totaling $85,137.25.
I.G. Ex. 1 at 17 - 29, 33; I.G. Ex. 3 at 1. Petitioner Williams
was convicted of engaging in specific acts of mail fraud which
resulted in payments by the New York Medicaid program totaling
$134,516.25. I.G. Ex. 1 at 17 - 29, 32; I.G. Ex. 2 at 1.
The quantum of each Petitioner's mail fraud significantly
understates the amount of financial loss that each Petitioner
caused to the New York Medicaid program. A fair estimate of the
quantum of damages caused by each Petitioner may be found in the
amount of restitution that each Petitioner originally was
sentenced to pay. Petitioner Ross originally was sentenced to
pay restitution to the New York Department of Social Services in
the amount of $612,855. I.G. Ex. 3 at 3, 4. Petitioner Williams
originally was sentenced to pay restitution to the New York
Department of Social Services in the amount of $1,814,896. I.G.
Ex. 2 at 3, 4.
Subsequent to appeals of their convictions, Petitioners were
resentenced to pay substantially less restitution than the
restitution which they originally were sentenced to pay.
Petitioner Williams was sentenced to pay a reduced restitution of
$30,000. I.G. Ex. 6 at 3, 4. Petitioner Ross was sentenced to
pay a reduced restitution of $85,137.25. I.G. Ex. 5 at 3, 4. In
each case, the reduced sentence of restitution reflects the
decision of the United States Court of Appeals for the Second
Circuit that the initial restitution sentences did not consider
adequately the Petitioners' ability to pay restitution. 53 F.3d
at 519. However, in remanding the Petitioners' cases for
reconsideration of the restitution amounts, the Second Circuit
found that the amount of restitution that the District Court
judge sentenced each Petitioner to originally, was equivalent to
the amount of loss caused to the New York Medicaid program by
that Petitioner. Id.
Each Petitioner was sentenced to a term of imprisonment as a
result of his or her conviction. Petitioner Ross was sentenced
to a prison term of 46 months. I.G. Ex. 5 at 2. Petitioner
Williams was sentenced to a prison term of 41 months. I.G. Ex. 6
at 2.
C. Evaluation of the Evidence (Findings 19 - 35)
1. The I.G.'s authority to exclude Petitioners
(Findings 19 - 23)
The evidence establishes that Petitioner Ross and Petitioner
Williams were each convicted of criminal offenses related to the
delivery of an item or service under the New York Medicaid plan.
Consequently, their exclusion is mandated by section 1128(a)(1)
of the Act. Petitioner Ross and Petitioner Williams were each
convicted of a criminal conspiracy to defraud the New York
Medicaid program. Petitioner Ross and Petitioner Williams were
each convicted of numerous, specific counts of mail fraud,
directed against the New York Medicaid program.
The essence of Petitioners' crimes was to make fraudulent claims
for Medicaid items or services resemble claims for legitimate
Medicaid items or services. The crimes in this case involved
Medicaid recipients who are entitled to receive items and
services from the New York Medicaid program. Petitioners could
not have committed any of the crimes of which they were convicted
unless they had access to Medicaid recipients who were entitled
to receive items or services from the New York Medicaid program.
The manufacture and submission of fraudulent Medicaid claims, and
the misuse of Medicaid recipients by Petitioners Ross and
Williams, is sufficient basis to find Petitioners' crimes to be
related to Medicaid items or services within the meaning of
section 1128(a)(1) of the Act.
Petitioners argue that their case is not subject to the exclusion
requirements of section 1128(a)(1) because they were convicted,
essentially, of making fraudulent reimbursement claims, and were
not convicted of any offense that is directly related to a
legitimate Medicaid item or service. Petitioners would have the
phrase "related to the delivery of an item or service" in section
1128(a)(1) interpreted to mean that a crime must relate directly
to a legitimate Medicare item or service in order to fall within
the purview of the section. Petitioners reason that a crime
against Medicare or a State Medicaid program that constitutes
fraud or theft against such a program is not "related to" the
delivery of an actual item or service under Medicare or a State
Medicaid program, inasmuch as the items or services that are
claimed fraudulently are either fictitious or are not
legitimately reimbursable, and thus, do not "relate to" actual
Medicare or Medicaid items or services.
This argument was made in other cases by individuals who were
excluded pursuant to section 1128(a)(1). Both the Departmental
Appeals Board and a United States District Court rejected the
argument. Jack W. Greene, DAB 1078 (1989), aff'd, Greene v.
Sullivan, 731 F. Supp. 835 and 838 (E.D. Tenn. 1990).
A legitimate Medicare or Medicaid item or service need not be the
object of a crime in order for that crime to relate to a Medicare
or Medicaid item or service. A crime is a crime within the
meaning of section 1128(a)(1) if it relates even indirectly to a
legitimate Medicare or Medicaid item or service. For example, a
crime will be found to be related to a Medicaid item or service
where the crime constitutes a false claim for Medicaid
reimbursement made on behalf of a Medicaid recipient on whose
behalf reimbursement will be made by a State Medicaid program for
legitimately reimbursable items or services. Such a crime
relates indirectly to legitimate Medicaid items or services.
The essence of the fraud in such a case is to make a false claim
appear to be reimbursable by emulating a legitimate claim for a
Medicaid item or service made on behalf of a Medicaid recipient.
The items or services to which the crime relates are the
legitimate Medicaid items or services that the perpetrator
emulates fraudulently. The fraud against the State Medicaid
program would not be possible but for the fact that the program
will reimburse for legitimate Medicaid items or services that are
delivered to the recipient. Absent the entitlement for
legitimate Medicaid items or services, there is nothing for the
perpetrator to emulate in a fraudulent reimbursement claim.
Both a conspiracy to defraud a State Medicaid program, or an act
of mail fraud directed against such a program, consisting of
submitting a fraudulent claim, constitute crimes that fall within
the meaning of section 1128(a)(1). Both crimes relate to items
or services that are legitimate Medicaid items or services. Both
crimes are predicated on making fraudulent reimbursement claims
look like legitimate reimbursement claims. An essential element
of both crimes is the witting or unwitting involvement of a
Medicaid recipient, on whose behalf legitimate claims for
reimbursement for Medicaid items or services may be made.
Petitioners' argument concerning the allegedly limited scope of
section 1128(a)(1), if accepted, would emasculate section
1128(a)(1). The section was written to address precisely the
type of program-related fraud that is at issue in this case.
However, as Petitioners would have the section read, it would not
reach any of that fraud.
Petitioners argue that the crimes at issue here are remediable
under the Act, but should be considered under the permissive
exclusion provisions of section 1128(b)(1), rather than under the
mandatory exclusion requirements of section 1128(a)(1). That
argument, too, was considered and rejected in the Greene case.
Put simply, a crime that falls within the more stringent
requirements of section 1128(a)(1) must be remedied pursuant to
that section, even if, arguably, it also could be considered
under the permissive exclusion requirements of section
1128(b)(1).
I note that, in 1996, Congress amended the Act so that felonies
which formerly fell within the purview of section 1128(b)(1), but
not section 1128(a)(1), now fall within a new section, section
1128(a)(3). That section, like section 1128(a)(1), now mandates
an exclusion. I am not considering this case under the 1996
amendments, inasmuch as the crimes at issue here transpired years
prior to the enactment of these amendments.
2. The presence of aggravating factors and the
absence of mitigating factors (Findings 24 - 31)
The I.G. proved the presence of three aggravating factors in the
cases of Petitioners Ross and Williams. In each case, the I.G.
proved that the acts resulting in the Petitioner's conviction, or
similar acts, resulted in financial loss to the New York Medicaid
program of more than $1,500. 42 C.F.R. § 1001.102(b)(1). In the
case of Petitioner Ross, the losses caused by him approximated
$612,855, the amount of restitution he was sentenced to pay
originally. 53 F.3d at 519. In no event were these losses less
than $85,137.25, the dollar amount of the mail fraud of which he
was convicted. In the case of Petitioner Williams, the losses
caused by her approximated $1,814,896, the amount of restitution
she was sentenced to pay originally. 53 F.3d at 519. In no
event were these losses less than $134,516.25, the dollar amount
of the mail fraud of which she was convicted.
Second, the I.G. proved that each Petitioner was sentenced to
incarceration for his or her crimes. 42 C.F.R. § 1001.102(b)(4).
Petitioner Ross was sentenced to a term of imprisonment of 46
months and Petitioner Williams was sentenced to a term of
imprisonment of 41 months.
Third, the I.G. proved that each Petitioner was the recipient of
overpayments from the New York Medicaid program, in excess of
$1,500, caused by improper billings to the program. 42 C.F.R. §
1001.102(b)(6). The amount of these overpayments equals the
dollar amount of the mail fraud of which each Petitioner was
convicted. In the case of Petitioner Ross, that amount is
$85,137.25. In the case of Petitioner Williams, that amount is
$134,516.25.
Petitioners argue that the evidence in these cases is
insufficient proof of the presence of aggravation. In
particular, Petitioners assert that the evidence does not
establish that either of them caused significant losses to the
New York Medicaid program. They make the following arguments to
support this assertion.
The restitution that each Petitioner was sentenced
to pay is not, in and of itself, an aggravating factor
under 42 C.F.R. § 1001.102.
Even if the restitution that each Petitioner was
sentenced to pay is relevant in establishing the
damages they caused, that restitution was ultimately
reduced, indicating that each Petitioner is less
culpable than was initially found to be the case.
In assessing the amount of damages caused by the
Petitioners, the United States District Court judge who
presided over Petitioners'' case made findings as to
the extent of Petitioners' participation in the
conspiracy that are not supported by the evidentiary
record of Petitioners' trial. In fact, Petitioners'
involvement was considerably less than that found by
the judge.
I do not find that these arguments, either individually or in
combination, blunt the force of the evidence offered by the I.G.,
which establishes the amount of damages caused by Petitioners.
First, the I.G. did not argue that the sentence that Petitioners
pay restitution is, in and of itself, an aggravating factor. The
I.G. offered the restitution sentences and amounts as evidence of
the quantum of losses to the New York Medicaid program caused by
Petitioners. The evidence relating to restitution is highly
relevant to the issue of the quantum of losses caused by
Petitioners.
Second, the reduction of restitution that ultimately was ordered
in each Petitioner's case had nothing to do with that
Petitioner's culpability, or with the amount of losses to the New
York Medicaid program caused by that Petitioner. The reduced
restitution was predicated on the ability of each Petitioner to
pay restitution, and not on any findings of diminished
culpability. 53 F.3d at 519.
Finally, I am not persuaded by Petitioners' assertions that the
District Court judge failed to assess accurately the extent to
which each Petitioner caused damages to the New York Medicaid
program. In its review of the Petitioners' appeals, the United
States Court of Appeals found that the amount of restitution that
the District Court judge ordered initially was equal to the
amount of damages that each Petitioner caused to the New York
Medicaid program. 53 F.3d at 519.
Moreover, each Petitioner was convicted of perpetrating a
specific dollar amount of mail fraud. While the dollar amount of
mail fraud perpetrated by each Petitioner is significantly less
than the amount of restitution that each Petitioner was sentenced
to pay originally, it is nonetheless very substantial. Thus,
even if the District Court judge was to be found to have
overstated the amount of losses caused by each Petitioner, there
nevertheless remains irrefutable proof that each Petitioner
caused massive losses to the New York Medicaid program.
Neither Petitioner proved the presence of any mitigating factors
which might offset the aggravating factors proved by the I.G.
Petitioner Williams offered several documents which include
attestations as to her character, her attainments, and her
dedication to her profession. P. Ex. 3. Although I received
these into evidence, they do not relate to any of the possible
mitigating factors identified in 42 C.F.R. § 1001.102(c).
Petitioner Ross pointed out in his supplemental brief that the
State licensing board treated him favorably. Again, even if I
were to accept this as true, it does not relate to any of the
mitigating factors identified in the regulation.
3. The length of the exclusions (Findings 32 - 35)
The evidence in each of these cases establishes Petitioner Ross
and Petitioner Williams each to be a highly untrustworthy
individual who must be excluded for a lengthy period in order to
protect federally funded health care programs and the
beneficiaries and recipients of these programs from that
Petitioner's propensity to engage in dishonest conduct. The
evidence of aggravation in each case is ample basis to justify a
lengthy exclusion in that case. In each case, the evidence
establishes that the Petitioner knowingly participated in the
operation of sham clinics whose only real purpose was to generate
fraudulent Medicaid claims. Each Petitioner's involvement was
necessary to the conspiracy. Each Petitioner caused substantial
financial damages to be incurred by the New York Medicaid
program.
In the case of Petitioner Williams, the evidence proves her to be
a highly untrustworthy individual. In light of this strong
evidence of lack of trustworthiness, I conclude that a 15-year
exclusion of Petitioner Williams is reasonable.
The evidence which relates to the aggravating factors stated at
42 C.F.R. §§ 1001.102(b)(1) proves that Petitioner Williams'
involvement in the conspiracy caused damages to the New York
Medicaid program of more than $1,800,000. The very large losses
that Petitioner Williams caused the New York Medicare program to
suffer are, in and of themselves, strong evidence that Petitioner
Williams is a highly untrustworthy individual.
My conclusion that Petitioner Williams is highly untrustworthy is
reinforced by the evidence of the lengthy prison sentence which
was imposed on Petitioner Williams. The sentence reflects a
finding by the District Court judge that Petitioner Williams
committed serious crimes for which she has a high degree of
culpability. The District Court judge concluded that the factors
to be considered in determining Petitioner Williams' sentence
should be enhanced, based on his conclusion that her
participation in the conspiracy involved more than minimal
planning and involved an abuse of trust. 53 F.3d at 517.
The evidence in the case of Petitioner Ross proves also that he
is a highly untrustworthy individual. A 10-year exclusion of
Petitioner Ross is reasonable in view of his high degree of
untrustworthiness.
As with Petitioner Williams, Petitioner Ross was a central
participant in the conspiracy. The evidence which relates to the
aggravating factors stated at 42 C.F.R. §§ 1001.102(b)(1)
establishes that his involvement in the conspiracy caused the New
York Medicaid program to incur losses in excess of $600,000.
This degree of involvement is strong evidence that Petitioner
Ross is highly untrustworthy.
The evidence of Petitioner Ross' lack of trustworthiness is
reinforced by the lengthy prison sentence that was imposed
against him. As was the case with Petitioner Williams, the
factors that were considered in determining Petitioner Ross'
sentence were enhanced based on the conclusion by the District
Court judge that Petitioner Ross' involvement with the conspiracy
involved more than minimal planning, and involved an abuse of
trust. 53 F.3d at 517. Indeed, the prison sentence that was
imposed on Petitioner Ross was greater than that which was
imposed on Petitioner Williams, because the District Court judge
concluded that Petitioner Ross had obstructed justice by
perjuring himself at his trial. Id.
Petitioner Ross is excluded for 10 years, whereas Petitioner
Williams is excluded for 15 years. Strictly speaking, the fact
that one Petitioner is excluded for a longer period than is the
other Petitioner is irrelevant in deciding the merits of each
Petitioner's case. An exclusion should be found to be reasonable
or unreasonable based on the facts that are unique to a case, and
not by comparing that exclusion with exclusions imposed in other
cases.
However, I have considered whether it makes sense to exclude
Petitioners Ross and Williams for different periods, in light of
the fact that they are co-conspirators, and also in light of the
fact that their involvement in the conspiracy seems generally to
be of about the equivalent degree. Given that, the disparity
between the exclusions imposed on the Petitioners seems somewhat
jarring. It seems particularly so in light of the fact that the
evidence which relates to Petitioner Ross may, in some respects,
suggest that his level of untrustworthiness is at least as high
as, and possibly higher than, that of Petitioner Williams.
Petitioner Ross was sentenced to a longer prison term than was
Petitioner Williams. The longer sentence in Petitioner Ross'
case was predicated on his dishonest testimony at his trial. The
basis for Petitioner Ross' sentence suggests that he may, in
fact, be less honest than, and more untrustworthy than,
Petitioner Williams.
My conclusion that Petitioner Ross may manifest an even higher
degree of dishonesty than is manifested by Petitioner Williams
suggests that, perhaps, the I.G. excluded Petitioner Ross for too
short a period of time. However, I make no findings in the case
of Petitioner Ross that a lengthier exclusion than the 10-year
exclusion imposed by the I.G. should be imposed against
Petitioner Ross. While I have authority, pursuant to 42 C.F.R. §
1005.20(b), to increase the length of an exclusion in the
appropriate case, I do not consider it appropriate to exercise
such authority on my own motion. The I.G. has not moved that I
increase the exclusion of Petitioner Ross.
I do not find that the arguably higher degree of Petitioner Ross'
dishonesty, when compared with that of Petitioner Williams,
suggests that the exclusion of Petitioner Williams is
unreasonable. As I discuss above, the merits of Petitioner
Williams' case, standing alone, justify a 15-year exclusion of
Petitioner Williams.
IV. Conclusion
I conclude that the I.G. is required, pursuant to section
1128(a)(1) of the Act, to exclude Petitioner Ross and Petitioner
Williams. I conclude that the 10-year exclusion of Petitioner
Ross is reasonable. I conclude that the 15-year exclusion of
Petitioner Williams is reasonable.
________________________
Steven T. Kessel
Administrative Law Judge
* * * Footnotes * * *
1. One of the co-conspirators named in the indictment is Rosaly Saba Khalil,
M.D.
I.G. Ex. 1 at 1. The I.G. excluded Dr. Khalil for a period of 15 years pursuant
to section
1128(a)(1). I heard Dr. Khalil's request for a hearing from that exclusion and
concluded that the
15-year exclusion imposed by the I.G. comports with the Act's remedial purposes.
Rosaly Saba
Khalil, M.D., DAB CR353 (1995). Many of the facts of Dr. Khalil's case, including
the
indictment which underlies her conviction, are the same as those which are at
issue here. I am not
basing my decision in these cases on any of those facts, however. I base my
decision here only on
the evidence which I have admitted in these cases.