DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of: Surabhan Ratanasen, M.D., Petitioner,
- v. -
The Inspector General.
DATE: October 6, 1989
Docket No. C-101
DECISION AND ORDER
Petitioner requested a hearing to contest the Inspector General's (I.G.'s)
determination to exclude him from
participation in the Medicare and Medicaid programs for a period of five years.
The I.G. filed a motion for
summary disposition of this case. This Decision and Order resolves this case
on the basis of written briefs
and a stipulated record. I hereby grant the I.G.'s motion for summary disposition
and conclude that the I.G.
was required under federal law to exclude Petitioner from participation in the
Medicare and Medicaid
programs for a period of five years
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
This case is governed by section 1128 of the Social Security Act (Act), codified
at 42 U.S.C.A. 1320a-7
(West Supp. 1989). Section 1128(a)(1) of the Act provides for the exclusion
from Medicare, and a
directive to the State to exclude from Medicaid, any individual who is "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).
Section 1128(b) of the Act provides for the permissive exclusion of individuals
or entities: (1) convicted
of criminal offenses, such as fraud or financial misconduct, which are not related
to the Medicare or
Medicaid program, or (2) who have been convicted of, or have committed criminal
offenses, or acts which
are related to the Medicare, Medicaid, or other government funded health care
programs.
II. The Federal Regulations.
The governing federal regulations (Regulations) are found in 42 C.F.R. Parts
498, 1001, and 1002 (1988).
Part 498 governs the procedural aspects of this exclusion case and Parts 1001
and 1002 govern the
substantive aspects.
In accordance with section 498.5(i), a practitioner, provider, or supplier
who has been excluded from
program coverage is "entitled to a hearing before an ALJ (Administrative
Law Judge)." The excluded
individual or entity has a right to request a hearing before an ALJ on the issues
of whether: (1) he or she
was, in fact, convicted; (2) the conviction was related to the delivery of an
item or service under Medicare
or Medicaid; and (3) the length of the exclusion is reasonable. 42 C.F.R. 1001.128(1988).
The I.G. is required by section 1001.123(a) to send written notice of his determination
to exclude an
individual or entity from participation in Medicare, when he has "conclusive
information that the
individual or entity has been convicted of a crime related to the delivery of
an item or service" under the
Medicare or Medicaid program.
BACKGROUND
On December 28, 1988, the I.G. issued a notice (Notice) to Petitioner, which
stated that Petitioner would be
excluded from participation in the Medicare and Medicaid programs for a period
of five years,
commencing 20 days from the date of the Notice. The Notice stated that the basis
for these exclusions was
Petitioner's conviction of an offense covered by the mandatory provisions of
section 1128(a)(1).
By letter dated February 23, 1989, (Request), Petitioner timely requested a
hearing before a federal ALJ,
and this case was docketed.
I conducted a prehearing telephone conference on April 25, 1989. During the
prehearing conference: (1)
Petitioner admitted that he was "convicted" of a criminal offense
within the meaning of section 1128(i) of
the Act, and (2) the I.G. expressed his intention to file a motion for summary
disposition. I determined that
Petitioner had raised legal issues in his Request, which could be further developed
by the parties in written
briefing. I further determined that the material facts of this case were not
in dispute. On May 1, 1989, I
issued a Prehearing Order and schedule for filing motions for summary disposition
(Prehearing Order).
Thereafter, the I.G. submitted a motion for summary disposition (Motion), a
brief in support thereof, and
nine exhibits. Petitioner submitted a brief in support of his opposition to
the I.G.'s motion (Opposition) and
one exhibit. The parties submitted a stipulation regarding the authenticity
of I.G. Ex. 1 - 3. Petitioner
subsequently filed supplemental points and authorities in opposition to the
I.G.'s motion (Supplemental),
and the I.G. filed a reply to Petitioner's Opposition and a reply to Petitioner's
Supplemental.
ISSUES
1. 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.
2. Whether the I.G.'s determination to exclude Petitioner from participation
in the Medicare program, and
to direct that he be excluded from participation in the Medicaid program, for
a period of five years, is
mandated by law.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments and submissions of the parties,
and being fully advised
herein, I make the following Findings of Fact and Conclusions of Law:
1. Petitioner is a physician in private practice in Fresno, California. I.G. Br./2.
2. On May 18, 1987, Petitioner was charged with 12 counts of violating section
14107 of the California
Welfare and Institutions Code, Fraudulent Claims; Intent; Punishment; Other
Enforcement Remedies. P.
Br./2; I.G. Ex. 1.
3. Petitioner entered into a plea bargain by which he agreed to plead guilty
to four counts of violating
section 2261 of the Business and Professions Code. I.G. Ex. 2; P. Br./3-4, 6;
I.G. Br./3.
4. Petitioner pled guilty to and was convicted of four counts of violating
section 2261 of the Business and
Professions Code. I.G. Ex. 2; I.G. Ex. 3; P. Ex. A/2;
P. Br./1.
5. Petitioner stipulated that the four counts to which he pled guilty were
reasonably related to Counts One,
Four, Seven, and Ten, of the May 18, 1987 charge filed against Petitioner. I.G.
Ex. 2; I.G. Br./3; P. Br./3-4.
6. Petitioner admitted that he was "convicted" of a criminal offense
within the meaning of section 1128(i)
of the Act. Prehearing Order/2.
7. The four counts to which Petitioner pled guilty were related to Petitioner's
commission of fraud against
the Medicaid program. I.G. Ex. 2; P. Br./2.
8. 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.
9. The I.G. must exclude individuals or entities from participation in the
Medicare program, and direct
their exclusion from participation in the Medicaid program, for a minimum five
year period, if they have
been convicted of a criminal offense related to the delivery of an item or service
under the Medicaid
program.
10. The I.G. does not have the discretion to exclude an individual or entity
from participation in the
Medicare and Medicaid programs, based upon the permissive provisions of section
1128(b) of the Act, in
instances where the individual or entity has been convicted of a criminal offense
which is "related to the
delivery of an item or service" under the Medicare or Medicaid program.
11. The I.G. acted properly in excluding and directing the exclusion of Petitioner
from participation in the
Medicare and Medicaid programs for the minimum period of five years.
12. The principles pronounced in United States v. Halper, 109 S. Ct. 1892 (1989),
are not applicable to the
facts of this case
DISCUSSION
I. The Minimum Mandatory Five Year Exclusion Provisions Apply In This Case.
Section 1128(a)(1) of the Act requires the I.G. to exclude individuals or entities
from the Medicare
program, and direct their exclusion from the Medicaid program, for a minimum
period of five years, when
such individuals or 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.
Congress' purpose for the imposition of a five-year minimum period of exclusion
for individuals or entities
convicted of criminal offenses related to the delivery of an item or service
under the Medicare and
Medicaid programs is clear. In the legislative history of the enactment of the
Medicare and Medicaid
Patient and Program Protection Act of 1987, Congress stated that:
"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. and Admin. News 682, 686.
In making the determination of whether an individual or entity must be excluded
from participation in the
Medicare and Medicaid programs based upon the mandatory provisions of section
1128(a), two major
issues must be addressed: (1) whether the individual or entity was "convicted"
of a criminal offense within
the meaning of section 1128(a)(1) and (i) of the Act, and (2) whether the conviction
was "related to the
delivery of an item or service" under the Medicare or Medicaid program.
Both of the above issues must be
answered affirmatively in order for a petitioner to be properly excluded from
participation in the Medicare
and Medicaid programs based upon the mandatory provisions of the Act.
A. "Convicted"
In response to the first issue, Petitioner admits that he was "convicted"
of a criminal offense within the
meaning of section 1128(i) of the Act. FFCL 6.
B. Petitioner's Conviction Is "Related To The Delivery Of An Item Or Service"
Under The Medicare or
Medicaid Program.
With regard to the second issue, Petitioner does not specifically address the
issue of whether his conviction
was "related to the delivery of an item or service under the Medicaid program."
However, this issue must
be addressed in making a determination of whether Petitioner was properly excluded
from participation in
the Medicare and Medicaid programs. In order to determine the existence of a
relationship between the
criminal offense for which Petitioner was convicted, and the delivery of an
item or service under the
Medicare or Medicaid program, it is necessary to examine the specific criminal
offense for which
Petitioner was convicted, and the actions of Petitioner which formed the basis
for the conviction.
Petitioner was convicted of four counts of violating section 2261 of the California
Business and
Professions Code, Unprofessional Conduct. FFCL 4. Originally, Petitioner was
charged with 12 counts of
violating section 14107 of the California Welfare and Institutions, Fraudulent
Claims; Intent; Punishment;
Other Enforcement. FFCL 2. However, pursuant to a plea-bargain, Petitioner pleaded
guilty to, and was
convicted of, four counts of violating section 2261 of the California Business
and Professions Code. FFCL
3, 4.
Petitioner stipulated that the four counts, for which he was convicted, were
reasonably related to Counts
One, Four, Seven, and Ten, of the original twelve counts with which he was charged.
FFCL 5. Those
counts charged that Petitioner willfully, unlawfully, and with intent to defraud,
presented to Computer
Sciences Corporation and the State of California "for allowance or payment,
a false or fraudulent Medi-Cal
claim for furnishing services." FFCL 5. The charges specifically stated
that Medi-Cal claims were
involved and that the claims were for furnishing services. FFCL 5.
Two differing sets of facts were offered by the parties as the basis for Petitioner's
conviction. The I.G.
asserts that Petitioner billed Medi-Cal for undelivered services, whereas Petitioner
asserts that he filled in
information on the charts of patients after he was notified that Medi-Cal was
going to audit his medical
charts as part of its investigation. Either version of the facts underlying
Petitioner's conviction is sufficient
to prove that Petitioner was convicted of a criminal offense related to the
delivery of an item or service
under the Medicaid program.
Based upon the I.G.'s version of the facts underlying the conviction, Petitioner
billed the Medicaid program
for services which were never provided. Congress specifically intended to exclude
individuals convicted
of this type of offense. Based upon Petitioner's version of the facts, Petitioner
filled in information on the
charts of patients to insure that he would be reimbursed for services which
he had rendered. Petitioner's
failure to keep adequate records which demonstrate the need for services rendered
is directly related to the
delivery of the item or service for which he seeks reimbursement.
The determination of whether a conviction is related to the delivery of an
item or service under the
Medicaid program "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
judgement and order of the criminal trial court." H. Gene Blankenship,
v. The Inspector General, Civil
Remedies Docket No. C-67 (1989) at p. 11. As stated in Jack W. Greene, v. The
Inspector General, DAB
Decision No. 1078 (1989) at p. 7, criminal offenses may be related to the delivery
of an item or service
because "they concern acts that directly and necessarily follow under the
health care program from the
delivery of the item or service."
In this case, Petitioner's stipulation and either version of the facts underlying
Petitioner's conviction have
provided the relationship between his conviction and the delivery of an item
or service under the Medicaid
program. The fact that Petitioner was not specifically convicted of Medi-Cal
fraud is irrelevant.
Therefore, I conclude that Petitioner was convicted of a criminal offense "related
to the delivery of an item
or service" under the Medicaid program within the meaning off section 1128
of the Act.
II. The Permissive Provisions Of Section 1128 Of The Act Do Not Apply To This Case.
Petitioner also asserts that his conviction was directly related to fraud or
financial misconduct, as defined in
section 1128(b)(1) of the Act, and therefore, the I.G. must exclude Petitioner
based upon the permissive
provisions of the Act, and, not the mandatory provisions of section 1128(a)(1).
Petitioner has misconstrued the requirements of the Act. The Act does not present
the I.G. with an
"option" to exclude an individual or entity, for a period of five
years, who has been convicted of a criminal
offense which is related to the delivery of an item or service under the Medicaid
or Medicare programs, but
requires that the I.G. exclude that individual or entity from participation
in the Medicare program and to
direct that he be excluded from participation in the Medicaid program. The permissive
provisions of
1128(b)(1) were enacted to broaden the category of individuals and entities
which may be excluded from
participation in the Medicare and Medicaid programs, not to provide an alternative
basis for excluding, or
alternative length of exclusion, for individuals whose behavior may be enunciated
within the provisions of
1128(b). If there has been a conviction, the initial determination to be made
by the I.G. is whether the
conviction was related to the delivery of an item or service under the Medicaid
or Medicare programs. If
the response to that issue is in the affirmative, the inquiry ceases, and the
individual or entity is properly
excluded based upon the mandatory provisions of section 1128(a). If the response
is in the negative, the
I.G. will proceed to determine whether the individual's or entity's behavior
or conviction falls within the
realm of behaviors and convictions addressed in section 1128(b). As stated in
Greene, the I.G. "has no
obligation under the statute to decide that section 1128(b)(1) would not apply
before imposing the
mandatory provisions of section 1128(a)." Id. at 10.
Since the Petitioner was "convicted" of a criminal offense and I
have concluded that the conviction was
"related to the delivery of an item or service" under the Medicaid
program within the meaning of section
1128(a)(1) and (i) of the Act, I conclude that the I.G. was required to exclude
the Petitioner for a minimum
of five years.
III. The Principles Pronounced in United States v. Halper Do Not Apply In This Case.
Petitioner asserts that the recent Supreme Court decision in United States
v. Halper, 109 S.Ct. 1892 (1989),
should apply to excuse him from a mandatory five year exclusion from participation
in the Medicare and
Medicaid programs. I disagree with Petitioner's assertion. In Halper, the Supreme
Court held that, under a
limited number of circumstances, the imposition of a civil monetary penalty
may be viewed as a
"punishment," and as such, may violate the Double Jeopardy Clause
of the Sixth Amendment to the United
States Constitution. The issue to be addressed in determining the applicability
of Halper to this case is
whether Petitioner's conviction was based upon federal law, and in a federal
court. If Petitioner's
conviction was in a state court, and based upon state law, the "Separate
Sovereign Doctrine" would prohibit
the Double Jeopardy Clause from taking effect.
Under the Separate Sovereign Doctrine, one sovereign, (i.e., the United States
Government), is not barred
from seeking a sanction against an individual, even though another sovereign
(i.e., a state government),
may already have imposed sanctions against the individual based upon the same
conduct or crime.
In this case, Petitioner was convicted in a state court based upon his violation
of state law. The sanctions
imposed by that state court have no bearing upon the imposition of sanctions
by the federal government
based upon Petitioner's violation of federal law, even though both sanctions
arise from the same conduct.
Thus, I conclude that the principles pronounced in Halper do not apply to Petitioner's
case.
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 and Medicaid programs for the minimum
mandatory period of
five years.
IT IS SO ORDERED.
__________________________
Charles E. Stratton
Administrative Law Judge