DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Mark M. Akagi, R.Ph.,
Petitioner,
- v. -
The Inspector General.
Date: November 6, 1989
Docket No. C-91
DECISION AND ORDER
This case is 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 January 11,
1989 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.
A motion to consolidate this case with the case of Dale Bain v. The Inspector
General, Docket No. C-92,
was filed on May 4, 1989, and a telephone prehearing conference was held on
June 9, 1989. The motion to
consolidate was granted in my June 12, 1989 Order. Thereafter, the I.G. filed
a motion for summary
disposition and thirteen exhibits in support of his motion. Petitioner filed
a response to the I.G.'s motion, a
motion to dismiss, and, in the alternative, Petitioner sought an evidentiary
hearing on the issue of the length
of exclusion. Oral argument was held by telephone on October 24, 1989, and the
record was closed.
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 Petitioner's exclusion for a minimum period
of five years is mandated by
law.
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) is the pertient section at issue in this case, I note
that 1128(b) of the Act provides for
permissive exclusion for convictions relating to fraud, obstruction of an investigation,
and controlled
substances, and for nine other types of infractions.
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 give a party written notice that he or
she is excluded from
participation in Medicare, beginning 15 days from the date on the notice, whenever
the I.G. has conclusive
information that a practitioner or other individual has been convicted of a
crime related to his or her
participation in the delivery of medical care or services under the Medicare,
Medicaid, or the social
services program.
ISSUES
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 the provisions of 42 U.S.C. 3526(a) 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 licensed pharmacist in the State of Utah. P. Ex. A-1
2. A summons was filed against Petitioner in the Third Circuit Court for the
County of Sandy, Utah (the
court), alleging that Petitioner had submitted false claims for medical benefits.
I.G. Ex. 5
3. On September 1, 1988, the Utah Attorney General filed charges alleging that
Petitioner had filed false
Medicaid claims. The complaint stated that Petitioner had presented claims for
Medicaid benefits for
services allegedly performed, knowing the claims to be false, ficticious, or
fraudulent. I.G. Ex. 7
4. Petitioner signed a plea agreement in which he agreed to enter a plea to
Medicaid fraud and pay the sum
of $1000.00 to the Bureau of Medicaid Fraud. I.G. Ex. 9.
5. The court agreed to accept the terms of Petitioner's plea agreement, and
Petitioner was advised that if he
violated the agreement, the court would enter Petitioner's guilty plea and impose
a sentence.
I.G. Ex. 11
6. On September 15, 1988, Petitioner pled guilty to one charge of Medicaid fraud. I.G. Ex. 9
7. The court "accepted" Petitioner's plea of guilty of the charge
of Medicaid fraud within the meaning of
sections 1128(a)(1) and 1128(i)(3) of the Act.
8. Petitioner's plea agreement and subsequent guilty plea were an arrangement
"where judgment of
conviction was withheld", and I conclude that Petitioner was "convicted"
within the meaning of section
1128(i)(4).
9. 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.
10. On December 22, 1988, the court dismissed the charges against Petitioner. I.G. Ex. 12
11. The December 22, 1988 court order does not alter the fact that Petitioner
was "convicted," as a matter
of federal law, for purposes of section 1128 of the Act.
12. The I.G. properly excluded Petitioner from participation in Medicare, and
properly directed his
exclusion from Medicaid, for a period of five years, as required by section
1128 of the Act.
13. 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.
14. 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.
15. The I.G. is not prohibited by federal law or regulations from participation in the exclusion process.
16. The material and relevant facts in this case are not contested.
17. The classification of Petitioner's criminal offense as subject to the authority
of 1128(a)(1) is a legal
issue.
18. There is no need for an evidentiary hearing in this case.
19. 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), (i)(3) and
(i)(4).
The interpretation of a federal statute or regulation is a question of federal
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).
Petitioner argues that no plea of guilty was "accepted" by the court
and that Petitioner was, therefore, not
convicted within the meaning of 1128(i)(3). He further contends that since no
guilty plea was accepted,
there is no judgment of conviction to withhold, and, thus, Petitioner was not
convicted within the meaning
of subsection(i)(4).
In support of his argument that no guilty plea was "accepted" by
the court, Petitioner points to the language
of the court order of December 22, 1988, which states that "the defendant's
plea of guilty which was not
received by the court, but held in abeyance ..." I.G. Ex. 12. The proceedings
at which Petitioner pled
guilty occurred on June 19, 1989. It is clear that the court "accepted"
Petitioner's plea of guilty within the
meaning of section 1128(i)(3) and held the plea in abeyance. Petitioner was
advised that he was giving up
his legal rights and acknowledged that he had waived the rights which would
have been accorded him in a
trial on the charges.
The December 22, 1988 order is irrelevant to whether the plea was "accepted"
in the first place. The
statutory definition of acceptance of a guilty plea was met on June 19, 1989.
The transcript clearly
demonstrates that Petitioner pled guilty to Medicaid fraud and that the court
"accepted" his plea. I.G. Ex.
11 Accordingly, Petitioner pled guilty and was convicted within the meaning
of section 1128(i)(3).
Petitioner also contends that he was not "convicted" within the meaning
of subsection (i)(4). He argues
that since there is no conviction under subsection (i)(3), there is no judgment
of conviction to withhold,
and thus, Petitioner was not "convicted" within the meaning of subsection
(i)(4). Petitioner entered a plea
agreement in which he agreed to enter a plea to Medicaid fraud and pay the sum
of $1000.00 to the Bureau
of Medicaid Fraud. I.G. Ex. 9 The court held his plea in abeyance and subsequently,
upon Petitioner's
compliance with the terms of the agreement, the court dismissed the charges.
This arrangement is clearly
one in which a judgment of conviction has been withheld, and meets the statutory
definition of conviction.
Therefore, I conclude that Petitioner was also "convicted" within
the meaning of 1128(i)(4).
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 criminal
offense to which he pled guilty was not "related to the delivery of an
item or service" under section
1128(a)(1) of the Act, but, rather, relates to the reimbursement function under
the Medicaid program.
Petitioner was charged with filing false Medicaid claims and pled guilty to
Medicaid fraud. The inquiry is
whether the conviction "related to the delivery of an item or service"
under Medicare or Medicaid. In the
case of Jack W. Greene v. Inspector General, Docket No. C-56, decided January
31, 1989, appeal
docketed, DAB No. 89-59, Decision No. 1078 (1989), the Departmental Appeals
Board (DAB) addressed
this argument and held that "the false Medicaid billing and the delivery
of the drugs to the Medicaid
recipient are inextricably interwined and therefore 'related' under any reasonable
reading of that term".
The record establishes that Petitioner was "convicted" of a criminal
offense "related to" the delivery of a
Medicaid item or service within the meaning of section 1128 of the Act. He was
charged with submitting
false claims and pled guilty to Medicaid fraud. The two are also "inextricably
interwined" and "related". I
conclude that Petitioner's conviction was "related to" the delivery
of a Medicaid item or service" within the
meaning of 1128(a)(1) of the Act.
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 Medicaid program within the meaning of section 1128(a)(1)
and (i) of the Act, the I.G.
was required to exclude Petitioner for a minimum of five years.
IV. The I.G. Has Complied With The Administrative Procedure Act.
Petitioner argues 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.
This issue was also raised in Greene, supra. The DAB held that the revised
statutory provisions concerning
a mandatory exclusion on their face cover a conviction for false billing and
do not require the promulgation
of regulations before they may be implemented.
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 of 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
Arthur B. Stone, D.P.M., v. The Inspector General, Docket No. C-52, decided
May 5, 1989, and Charles
W. Wheeler, v. The Inspector General, Docket No. C-61, decided June 8, 1989.
As I stated in Stone and
Wheeler, I feel that Petitioner's arguments are without merit. The legislative
history of the 1987
amendments to the law clearly reflects the intent of Congress, and approves
the Secretary's delegation of
the exclusion authority to the I.G. S. Rep. No. 109, 100th Cong., 1st Sess.
14, reprinted in 1987 U.S. Code
Cong. and Admin. News 682, 695.
VI. There Is No Need For An Evidentiary Hearing In This Case.
I also find 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.
The issue of whether the I.G. had the authority to exclude Petitioner under
section 1128(a)(1) is a legal
issue. I have concluded as a matter of law that Petitioner was properly excluded
and that the length of his
exclusion is mandated by law. There are no genuine issues of material fact which
would require the
submission of additional evidence, and there is no need for an evidentiary hearing
in this case. The I.G. is
entitled to summary disposition as a matter of law.
CONCLUSION
Based on the law and undisputed material facts in the record of this case,
I conclude the I.G. properly
excluded 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