Date: February 8, 1999

In the Case of:

Fee Ong, R.Ph.,
Petitioner,

- v. -

The Inspector General.

Docket No. C-98-491
Decision No. CR573

By letter dated June 30, 1998, Fee Ong, R.Ph., Petitioner, was notified by the Inspector General (I.G.), United States 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.⁽¹⁾ The I.G. explained that an exclusion of at least five years is mandatory under sections 1128(a)(1) and 1128(c)(3)(B) of the Social Security Act (Act) because Petitioner had been convicted of a criminal offense related to the delivery of an item or service under the Medicaid program.

Petitioner filed a request for review of the I.G.'s action. The I.G. moved for summary disposition. Because I have determined that there are no material and relevant factual issues in dispute (the only matter to be decided is the legal significance of the undisputed facts), I have decided the case on the basis of the parties' written submissions in lieu of an in-person hearing.

Both parties submitted briefs and reply briefs in this matter. The I.G. submitted five proposed exhibits (I.G. Exs. 1-5). Petitioner does not object to these exhibits and I admit into evidence I.G. Exs. 1-5. Petitioner submitted 29 proposed exhibits (P. Exs. 1-29). The I.G. did not object to these exhibits and I admit into evidence P. Exs. 1-29.

I conclude that Petitioner is subject to the minimum mandatory exclusion provisions of sections 1128(a)(1) and 1128(c)(3)(B) of the Act. Therefore, 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 an 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 the administrative law judge (ALJ) should take into consideration which subsection of the Act is more appropriate to Petitioner's crime. He contends that he should be excluded under the more lenient provision of section 1128(b) of the Act because his offense was a misdemeanor rather than a felony and his misconduct was not intentional.

Petitioner also asserts that he was not guilty of the criminal conduct for which he was charged. Rather, he asserts that the conduct involved innocent billing errors of which he was unaware.

1. During the period relevant to this case, Petitioner was a pharmacist licensed to practice in the State of Nevada. I.G. Ex. 1.

2. On January 28, 1998, the State of Nevada filed a criminal complaint in District Court, Clark County, Nevada, charging Petitioner with the misdemeanor of "Conspiracy to Commit Medicaid Fraud, Submitting False Claims" in violation of Nevada Revised Statutes 199.480(3)(g) and 422.540(1). I.G. Ex. 1.

3. The criminal complaint alleged that Petitioner knowingly failed to maintain accurate records regarding the purchase price of drugs and infusion accessories and had knowledge that his failure to keep accurate records was causing claims to be submitted to Medicaid that were false in whole or in part. I.G. Ex. 1.

4. On March 10, 1998, the court accepted Petitioner's plea of guilty pursuant to North Carolina v. Alford, 400 U.S. 25 (1970) to one count of "Conspiracy to Commit Medicaid Fraud, Submitting False Claims" in violation of Nevada Revised Statutes 199.480(3)(g) and 422.540(1). I.G. Ex. 2.

5. On March 10, 1998, following the acceptance of Petitioner's Alford plea, the Court sentenced Petitioner to pay a fine in the amount of $2000 and an administrative assessment fee of $25. I.G. Exs. 3 and 4.

6. On June 30, 1998, the I.G. notified Petitioner that he was being excluded from participation in the Medicare and Medicaid programs for a period of five years pursuant to section 1128(a)(1) of the Act. I.G. Ex. 5.

7. Petitioner's entry of an Alford plea and the acceptance of such plea by the District Court of the State of Nevada constitutes a conviction within the meaning of sections 1128(a)(1) and 1128(i)(3) of the Act.

8. Petitioner's conviction for Conspiracy to Commit Medicaid Fraud, Submitting False Claims is 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. Once an individual has been convicted of a program-related criminal offense under section 1128(a)(1) of the Act, exclusion is mandatory.

10. Pursuant to section 1128(c)(3)(B) of the Act, the minimum mandatory period for an exclusion imposed pursuant to section 1128(a)(1) of the Act is five years.

11. The I.G. properly excluded Petitioner from participation in Medicare and Medicaid for a period of five years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act.

The first statutory requirement for the imposition of 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. 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; or

(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.

Section 1128(i) 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.

Initially, I note that the record reflects that Petitioner entered an "Alford plea" on March 10, 1998. I.G. Ex. 2. Prior decisions of the Departmental Appeals Board (DAB) have unequivocally held that a court's acceptance of an "Alford plea" to a criminal charge satisfies the requirement that an individual has been convicted within the meaning of section 1128(i)(3) of the Act. Russell E. Baisley, DAB CR128 (1991); Raymond R. Veloso, DAB CR124 (1991); Magdi Z. Fahmy, DAB CR176 (1992). Under such arrangement, an individual is deemed to have pled guilty. In the instant case, the record shows that the Court accepted this plea. Therefore, Petitioner was convicted within the meaning of section 1128(i)(3).

Next, section 1128(a)(1) of the Act requires that the criminal offense at issue be related to the delivery of an item or service under the Medicare or Medicaid programs. The record establishes that Petitioner, by being found guilty of the offense charged in the criminal complaint, was found to have filed, or caused to be filed, fraudulent claims against Medicaid. The filing of fraudulent Medicare or Medicaid claims consistently has been held to constitute clear program-related misconduct. Alan J. Chernick, D.D.S., DAB CR434 (1996) (I.G.'s five-year mandatory exclusion of dentist who was convicted in New York State court of filing false claims upheld); see also Barbara Johnson, D.D.S., DAB CR78 (1990) (I.G.'s five-year mandatory exclusion of dentist convicted of filing false claims upheld).

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 item or service under a covered program. Berton Siegel, D.O., DAB No. 1467 (1994). In Petitioner's case, a necessary nexus links the facts underlying his crime with the delivery of items or services under Medicaid because the falsified claims leading to Petitioner's conviction resulted in his receipt of fraudulent Medicaid reimbursement. In Rosaly Saba Khalil, M.D., DAB CR353 (1995), the ALJ found that a criminal offense stemming from the fraudulent receipt of reimbursement checks from Medicaid provided a sufficient nexus between the offense and the delivery of items or services under Medicaid. Additionally, the ALJ in Khalil 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." Id. at 8. In the present case, the nexus between Petitioner's offenses and the delivery of items or services is firmly established by his conviction of the charge of "Conspiracy to Commit Medicaid Fraud, Submitting False Claims."

In his defense, Petitioner contends that he should not be subject to an exclusion under section 1128(a)(1) of the Act because he was not guilty in fact of the charges in the criminal complaint. He asserts that any improper claims were the result of unintentional errors in billing procedures. Petitioner, by such argument, seeks to challenge the propriety of his criminal conviction and such assertion amounts to a collateral attack on his conviction. The DAB has previously held such arguments to be ineffectual in the context of an exclusion appeal, as the I.G. and the ALJ are not permitted to look beyond the fact of conviction. Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter J. Edmonson, DAB No. 1330 (1992).

In this case, Petitioner also maintains that the ALJ should consider which subsection of the statute is more appropriate to Petitioner's crime. He contends that because his conviction fits within the scope of section 1128(b) of the Act, he should be excluded under the more lenient provisions of that section rather than the stricter provisions of section 1128(a)(1) of the Act. In this regard, he notes that his offense was a misdemeanor, not a felony, and his misconduct was unintentional.

In my review, I find that Petitioner's conviction for "Conspiracy to Commit Medicaid Fraud, Submitting False Claims" falls within the purview of section 1128(a) of the Act. Petitioner believes that because his offense was a misdemeanor he is entitled to be excluded under the more lenient section 1128(b). He asserts that his offense was less serious than a felony. It is irrelevant, however, that Petitioner was convicted of a misdemeanor because the statute makes no distinction between degrees of criminal offenses. Brenda J. Motley, DAB CR414 (1996). I have found that Petitioner's offense is one that is related to the delivery of an item or service under Medicaid. The I.G.'s mandatory exclusion authority requires a minimum five-year exclusion in such case. Peter J. Edmonson, DAB CR163 (1991), aff'd, DAB No. 1330 (1992); 42 C.F.R. § 1001.2007(d). Once a person has been convicted of a program-related offense, exclusion is mandatory. Muhammad R. Chaudhry, DAB CR326(1994). The I.G. has no discretion to impose a permissive exclusion when the threshold provisions of a section 1128(a) exclusion have been fulfilled, even if the conduct can be fairly characterized under either the permissive or mandatory exclusion provisions. Jack W. Greene, DAB No. 1078 (1989), aff'd, Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990). It is irrelevant that a petitioner's conduct might also satisfy the permissive provisions of section 1128(b) of the Act. Brenda J. Motley, DAB CR414 (1996).

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner 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 an item or service under the Medicaid program. Therefore, the five-year exclusion is sustained.

Joseph K. Riotto
Administrative Law Judge

1. In this decision, I use the term "Medicare" to refer to all of the federal health care programs from which Petitioner was excluded. I use the term "Medicaid" to refer to all the State health care programs from which Petitioner was excluded.