Date: February 4, 1999

In the Case of:

Donald J. Purcell, II, M.D.,
Petitioner,

- v. -

The Inspector General.

Docket No. C-98-478
Decision No. CR572

By letter dated July 31, 1998, Donald J. Purcell, II, M.D., the Petitioner herein, was notified by the Inspector General (I.G.), U.S. Department of Health and Human Services (H.H.S.), that it had been decided to exclude him for a period of five years from participation in the Medicare, Medicaid, and all federal health care programs, as defined in section 1128B(f) of the Social Security Act (Act).⁽¹⁾ The I.G. explained that the five-year exclusion was mandatory under section 1128(a)(1) and 1128(c)(3)(B) of the Act because Petitioner had been convicted of a criminal offense in connection with the delivery of a health care item or service under the Medicaid program.

Petitioner filed a request for review of the I.G.'s action. At a telephone prehearing conference, the parties agreed to proceed on the basis of written submissions in lieu of an in-person hearing.

Both parties submitted briefs in this matter. I.G. submitted five proposed exhibits which I have numbered I.G. Exhibits one through five (I.G. Ex. 1-5). Petitioner does not object to these exhibits and I accept into evidence I.G. Ex. 1-5. Petitioner submitted thirteen proposed exhibits which I have designated Petitioner Exhibits one through thirteen (P. Ex. 1-13). The I.G. did not object to these exhibits and I accept P. Ex. 1-13 into evidence.

I have determined that there are no material and relevant factual issues in dispute; the only matters to be decided are the legal significance of the undisputed facts. Therefore, based on my review of the parties' briefs and documentary evidence, as well as the applicable law, I have concluded that it is appropriate to grant summary disposition in favor of the I.G. I affirm the I.G.'s determination to exclude Petitioner from participation in the Medicare and Medicaid programs for a period of five years.

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act make it mandatory for any individual who has been convicted of a criminal offense related to the delivery of a health care item or service under Medicare or Medicaid to be excluded from participation in such programs for a period of at least five years.

Petitioner contends that his conviction for tampering with a government record is not an offense related to a health care item or service under the Medicare or Medicaid programs. He asserts that the statute under which he was convicted, section 710-1017(a)(1) of the Hawaii Revised Statutes, does not specifically refer to Medicare or Medicaid.⁽²⁾ He also notes that the Criminal Complaint filed against him on April 22, 1996 in the Hawaii District Court for the First Circuit, Honolulu Division also does not identify the government record which he allegedly falsified.⁽³⁾ Finally he maintains that the Civil Settlement Agreement he entered into with Medicaid Investigations Division of the Hawaii Department of the Attorney General concerning his actions which allegedly resulted in the criminal conviction was incorporated in the criminal judgement and specifically precludes consideration in any subsequent legal action of any alleged misconduct on his part.⁽⁴⁾ He therefore maintains that the I.G. cannot use his criminal conviction under that statute to support a mandatory exclusion under section 1128(a)(1) of the Act because the misconduct in which he engaged is not specified as relating to the Medicare or Medicaid programs.

Petitioner also alleges that the procedure followed by the I.G. violates his due process rights. He asserts that the July 31, 1998 exclusion notice from the I.G. does not identify the information upon which such notice is based. In this regard, he also asserts it is improper for the I.G. to offer as support for his exclusion an affidavit dated October 16, 1998, from the prosecuting attorney in the criminal matter (I.G. Ex. 3) as such affidavit was made after the notification of his exclusion.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was a physician licensed to practice in the State of Hawaii. I.G. Ex. 3, attachment 6.

2. At all relevant times, Petitioner was a partner of Meridian Medical Clinic and Health Care Services. I.G. Ex. 3, attachment 5.

3. On January 31, 1996 Medicaid Investigations Division (MID) of the Hawaii Department of the Attorney General issued a report alleging that during 1994 Petitioner was billing for Medicaid services which were being performed by unlicensed contractors at Meridian Medical Clinic and Health Care Services. I.G. Ex. 3, attachment 5.

4. As a result of the January 31, 1996 Medicaid Investigations Report, a criminal complaint was filed in the District Court of the First Circuit, Honolulu Division, State of Hawaii, on April 22, 1996, by the Hawaii Department of the Attorney General charging Petitioner with Tampering with a Government Record in violation of section 710-1017(1)(a) of the Hawaii Revised Statutes. I.G. Ex. 3, attachment 2; P. Ex. 2.

5. On April 22, 1996, Petitioner entered into a Civil Settlement Agreement with the MID whereby he agreed to the terms set forth in that agreement including a reimbursement payment of $7,025.85 to Medicaid, $3,757.44 to Medicare, and $9,528.34 to Hawaii Medical Service Association (HMSA); payment of $27,500 for investigative costs; and a payment of $60,934.89 for additional damages. I.G. Ex. 3, attachment 6.

6. Petitioner entered into a plea agreement with the Department of the Attorney General in which Petitioner agreed to plead to one count of Tampering with a Government Record in violation of section 710-1017(1)(a) of the Hawaii Revised Statutes and which incorporated the terms of the April 22, 1996, Civil Settlement Agreement. I.G. Ex. 3, attachment 1.

7. On May 3, 1996, the Hawaii District Court for the First Circuit, Honolulu Division, entered Petitioner into a "Deferred Acceptance of a No Contest Plea" (DANCP) to one count of violation of section 710-1017(1)(a) of the Hawaii Revised Statutes. I.G. Ex. 3, attachment 3.

8. In the May 3, 1996 judgment, the Hawaii District Court stated as a condition of the acceptance of the plea that Petitioner satisfy the conditions stated in the April 22, 1996 Civil Settlement Agreement. I.G. Ex. 3, attachment 3.

9. On July 31, 1998, the I.G. notified Petitioner that he was being excluded from participation in the Medicare/Medicaid program for a period of five years pursuant to section 1128(a)(1) of the Act. I.G. Ex. 1.

10. Petitioner's entry of a no contest plea and the deferred acceptance of such plea by the Hawaii District Court constitutes a conviction within the meaning of section 1128(i)(4) of the Act.

11. Petitioner's conviction for Tampering with a Government Record is related to the delivery of a health care item or service under the Medicare/Medicaid programs within the meaning of section 1128(a)(1) of the Act.

12. Once an individual has been convicted of a program-related criminal offense under section 1128(a)(1) of the Act, exclusion is mandatory under section 1128(c)(3)(B) of the Act.

13. The I.G. properly excluded Petitioner, pursuant to section 1128(a)(1) of the Act, for a period of five years, as required by the minimum mandatory exclusion provision of section 1128(c)(3)(B) of the Act.

At the outset of my consideration, I note that Petitioner alleges that the I.G. failed in the July 31, 1998 exclusion letter to identify the evidentiary materials upon which the exclusion is based. He also asserts that the I.G. has improperly based the July 1998 exclusion on evidence obtained after that date as the I.G. has submitted correspondence dated October 16, 1998 from the Hawaiian Deputy Attorney General. In my review, I find no due process violations. In the exclusion letter, the I.G. informed Petitioner that his exclusion was based on the criminal conviction and thus Petitioner was on notice of the basis of the action and the issues in his case. The fact that some of the evidentiary materials were created after the notice is irrelevant because Petitioner was afforded an opportunity to examine them and rebut them in this proceeding.

Considering the requirements for exclusion, the first statutory requirement for the imposition of a mandatory exclusion pursuant to section 1128(a)(1) of the Act is that the individual or entity in question be convicted of a criminal offense under federal or state law. I find that this requirement is met in Petitioner's case. The term "convicted" is defined in section 1128(i) of the Act. This section provides that an individual or entity will be 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;

(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.

This section establishes four alternative definitions of the term "convicted." An individual or entity need satisfy only one of the four definitions under section 1128(i) to establish that the individual or entity has been convicted of a criminal offense within the meaning of the Act.

I find that Petitioner was convicted within the scope of section 1128(i)(4) of the Act. Petitioner on appeal has conceded that the deferred adjudication in his case constitutes a conviction within the scope of section 1128(i)(4) of the Act. P. Brief at 14. Departmental Appeals Board decisions which have dealt with such deferred adjudications have held that such procedures constitute convictions within the scope of section 1128(i)(4) of the Act. Benjamin P. Council, M.D., DAB CR391 (1995); Carlos E. Zamora, M.D., DAB CR22 (1989) (five-year exclusion of physician who entered a plea of nolo contendere which was later withdrawn upheld).

Next, it is required under section 1128(a)(1) of the Act that the crime at issue be related to the delivery of a health care item or service under the Medicare/Medicaid program. Petitioner asserts that, from the evidence adduced herein, it is impossible to conclude that his conviction arose out of Medicaid/Medicare-related circumstances. He asserts that the criminal complaint and the statute which he was convicted of violating are silent concerning the type of misconduct which led to his conviction. He also cites ¶ 4 of the Civil Settlement Agreement executed between himself and MID on April 22, 1996, which, he argues, precludes that Agreement from being construed as evidence of his misconduct. I.G. Ex. 3, attachment 6.

To determine if an offense is program-related, the ALJ must analyze the facts and circumstances underlying the conviction to determine whether a nexus or common sense connection links the offense for which a petitioner has been convicted and the delivery of an health care item or service under a covered program. Berton Siegel, D.O., DAB No. 1467 (1994); Norman C. Barber, D.D.S., DAB CR123 (1991). See also Krishan Kumar Batra, M.D., DAB CR537 (1998). In Barber, the ALJ reasoned that it was consistent with Congressional intent to admit evidence which explains the circumstances of the offense of which a party is convicted. In H. Gene Blankenship, DAB CR42 (1989), the ALJ stated:

[t]he test of whether a "conviction" is "related to" Medicaid 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.

Id. at 11. Accordingly, it follows that extrinsic evidence is admissible to explain ambiguities in criminal complaints or pleas and that it is admissible to explain unstated but necessarily implied elements of the offense to which a party pleads. Barber, DAB CR123 at 12. Based on this rationale, I find that I may consider the full circumstances surrounding Petitioner's conviction to determine if the statutory requirements of section 1128(a)(1) of the Act were met.

Petitioner need not be convicted of Medicaid fraud to be subject to exclusion under section 1128(a)(1). Instead, it is sufficient if the delivery of a Medicaid service is an element in the chain of events giving rise to the offense. Larry W. Dabbs, R.Ph., et al, DAB CR151 (1991). It is apparent that the delivery of a Medicaid service was an element in the chain of events which led to Petitioner's plea of no contest. The MID investigative report (I.G. Ex. 3, attachment 5) demonstrates that Petitioner filed--or caused to be filed--claims for Medicaid reimbursement under his own provider number on behalf of providers of medical services at his clinic who were unauthorized to receive Medicaid reimbursement, either because they were unlicensed or because they had not executed Medicaid provider agreements. On these facts, the nexus between Petitioner's offenses and the delivery of health care items or services is firmly established, even if he did not personally render the disputed services or file the claims himself. In Rosaly Saba Khalil, M.D., DAB CR353 (1995), the ALJ held that a nexus may exist "despite the fact that Petitioner may not have provided items or services to Medicaid recipients personally or made reimbursement claims for those items or services."

Moreover, the Civil Settlement Agreement of April 22, 1996, which Petitioner executed, acknowledges that the charge to which he pled arose out of MID's investigation of "improper billing to the Medicaid, Medicare, and HMSA programs . . . ." I.G. Ex. 3, attachment 6 at 2.⁽⁵⁾ In addition, I find that insofar as such Agreement provides for Petitioner's restitution to the Medicare and Medicaid programs, such Agreement serves to demonstrate that his criminal conviction is related to the delivery of items or services under Medicare and Medicaid. Both ALJs and appellate panels of the DAB have held that a conviction may be related to the delivery of an item or service under Medicare or Medicaid where financial misconduct against the program has or could have an impact on the delivery of health care items or services. See Siegel, DAB No. 1467 at 5-6; see also Dabbs, DAB CR151 at 6; Napoleon S. Maminta, M.D., DAB No. 1135 (1990).

For the reasons stated above, I find that the record in Petitioner's case establishes that his conviction for Tampering with a Government Record arose as a result of his submission of improper claims to the Medicaid program. I therefore conclude that the I.G. has established the requirements for mandatory exclusion under section 1128(a)(1) of the Act.

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner herein be excluded from the Medicare and Medicaid programs for a period of at least five years because he has been convicted of a criminal offense related to the delivery of a health care item or service under the Medicaid program. The five-year exclusion is therefore sustained.

Joseph K. Riotto
Administrative Law Judge

1. In this decision, I use the term "Medicaid" to refer to these State health care programs.

2. Section 710-1017(1)(a) of the Hawaii Revised Statutes defines the offense of "tampering with a government record" and provides:

a person commits the offense of tampering with a government record if: (a) he knowingly and falsely makes, completes, or alters, or knowingly makes a false entry in, a written instrument which is or purports to be a government record or a true copy thereof.

P. Ex. 4.

3. The criminal complaint states:

on or about the 2nd of August, 1994 to and including the 9th of September, 1994, in the City and County of Honolulu, State of Hawaii, Donald J. Purcell, II, M.D. did knowingly and falsely make, complete, or alter, or knowingly make a false entry in, a written instrument which is or purports to be a government record or a true copy thereof, thereby committing the offense of Tampering with a Government Record, in violation Section 710-1017(1)(a) of the Hawaii Revised Statutes.

I.G. Ex. 3, attachment 2.

4. Petitioner specifically cites ¶ 4 of the Civil Settlement Agreement dated April 22, 1996, which states:

It is understood and agreed that this agreement is entered into solely as a compromise to avoid litigation of a disputed claim and Dr. Purcell denies and does not admit any violation of any federal, state law, regulation, or any other breach or wrongdoing of any nature whatsoever, except for pleading no contest to one (1) count of Tampering with a Government Record section 710-1017(1)(a) of the Hawaii Revised Statutes. This agreement, as well as, the fact of Dr. Purcell's payment of reimbursement, investigative costs, and damages are not and shall not be construed as evidence of any fact, a conclusion as to any issue of law, an admission, a statement against interest or waiver as to any issue of law or fact regarding any issue alleged or implied by this agreement, including, but not limited to, culpability, liability or the violation of any federal, state, local statute or regulation.

I.G. Ex. 3, attachment 6.

5. I reject Petitioner's claim that ¶ 4 of the Agreement precludes my consideration of that document. By its own terms, the Agreement contemplates that it would be forwarded to the I.G. and that its terms would not be binding on the I.G. Specifically, ¶ 7 states:

[t]he parties understand the Department of the Attorney General, Medicaid Investigations Division, has an obligation to report the audit results and settlement of this case to the Office of the Inspector General, United States Department of Health and Human Services.

Paragraph 8 states:

the parties specifically recognize and agree that this agreement has no force and effect on any investigation and legal proceedings that may be initiated by the United States Government.

I.G. Ex. 3, attachment 6.