DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
DATE: March 5, 1990
Docket No. C-162
In the Case of:
Leonard P. Harman, D.O.,
Petitioner,
- v. -
The Inspector General.
DECISION AND ORDER
Petitioner timely requested a hearing before an Administrative Law Judge, to
contest a determination by
the Inspector General (I.G.) to exclude him from participation in the Medicare
and Medicaid programs for
four years, pursuant to section 1128(b)(5) of the Social Security Act (Act).
I conducted a hearing in
Philadelphia, Pennsylvania on December 7, 1989. Based on the evidence introduced
at the hearing, the
parties' submissions, and applicable law, I conclude that an exclusion of one
year is appropriate.
BACKGROUND
By letter dated July 27, 1989, the Inspector General (the I.G.) notified Petitioner
that he was being
excluded from participation in Medicare and Medicaid programs. The I.G. advised
Petitioner that he was
being excluded as a result of his exclusion or suspension by the Pennsylvania
Department of
Welfare(DPW) for reasons bearing upon his professional competence, professional
performance, or
financial integrity within the meaning of section 1128(b)(5)(B) of the Act.
The I.G. further advised
Petitioner that he was being excluded for a period of four years. Petitioner
timely requested a hearing, and
the case was assigned to me for a hearing and a decision. I held a telephone
prehearing conference in this
case on October 25, 1989 and an evidentiary hearing on December 7, 1989, in
Philadelphia, Pennsylvania.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
Section 1128 of the Act is codified at 42 U.S.C. 1320a-7 (West U.S.C.A., 1989
Supp.). Section
1128(b)(5)(B) of the Act permits the I.G. to exclude from Medicare and Medicaid
participation any
individual or entity which has been suspended or excluded from participation,
or otherwise sanctioned,
under a State health care program, for reasons bearing on the individual's or
entity's professional
competence, professional performance, or financial integrity.
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.
ISSUES
The issues are whether:
1. Petitioner was "suspended or excluded from participation" in a
"State health care program, for reasons
bearing on his professional competence, professional performance, or financial
integrity" within the
meaning of section 1128(b)(5)(B) of the Act;
2. Section 1128(b)(5)(B) of the Act permits an exclusion under the circumstances of this case; and
3. The length of Petitioner's exclusion is appropriate
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a doctor of medicine, having received a Doctor of Osteopathy
degree in 1972 from the
Philadelphia College of Osteopathic Medicine. Tr. 90.
2. On June 27, 1988, Petitioner was notified by the Pennsylvania Department
of Public Welfare (DPW)
that DPW proposed to terminate Petitioner's provider agreement and exclude him
from participation in the
Medical Assistance Program. The Notice of Termination and Restitution Demand
(Notice of Termination)
also advised Petitioner that restitution was being sought. I.G. Ex. 1.
3. The DPW found that Petitioner had billed contrary to medical assistance
regulations in that from April
1, 1986, to January 1, 1987, he had billed for services:
a. provided by an uncertified physician assistant and that Petitioner was
not registered by
the Osteopathic Board of Medical Examiners to supervise a physician assistant;
b. in which an uncertified physician assistant prescribed drugs for patients
using blank
prescription forms which had been signed in advance by Petitioner;
c. rendered by an inactive provider in the Medical Assistance program; and
d. in which patient records did not conform to standards of practice.
4. Petitioner did not answer the Notice of Termination. I.G. Ex. 2.
5. On October 20, 1988, the DPW ordered that Petitioner: (1) be excluded from
participation in the
Pennsylvania Medical Assistance Program for a period of four years, (2) be prohibited
from receiving any
payments from the DPW for any services arranged, rendered, supervised, prescribed
or ordered by
Petitioner, and (3) pay restitution in the amount of $1,414.50. I.G. 2.
6. Petitioner did not appeal the decision of the DPW. I.G. Ex. 3; Tr. 92, 93.
7. By letter dated May 2, 1989, the I.G. informed Petitioner that the Department
of Health and Human
Services (DHHS) was considering excluding Petitioner from participation in the
Medicare and Medicaid
programs for four years due to his exclusion from the Pennsylvania health care
program. I.G. Ex. 4.
8. By letter dated June 19, 1989, Petitioner responded to the I.G.'s May 2, 1989 letter. I.G. Ex. 11.
9. by letter dated July 27, 1989, the I.G. notified Petitioner that he was
being excluded from participating
in the Medicare and Medicaid programs for a period of four years pursuant to
section 1128(b)(5)(B) of the
Act. I.G. Ex. 6.
10. The Pennsylvania Medical Assistance program (Medicaid) is a State health
care program within the
meaning of sections 1128(h) and 1128(b)(5)(B) of the Act.
11. Petitioner was excluded or suspended from a State health care program for
reasons bearing on his
professional competence and professional performance within the meaning of section
1128(b)(5)(B) of the
Act.
12. The Secretary of Health and Human Services (the Secretary) delegated to
the I.G. the authority to
determine, impose, and direct exclusions pursuant to section 1128 of the Act.
48 Fed. Reg. 21662, May
13, 1983.
13. The I.G. was authorized to impose an exclusion against Petitioner by section
1128(b)(5)(B) of the Act.
42 U.S.C. 1320a-7(b)(5)(B).
14. There are mitigating circumstances in this case which the I.G. did not
consider or accord the proper
weight:
a. Petitioner practices in a neighborhood in which the majority of the persons
are elderly
Medicare beneficiaries and often homebound. Petitioner is one of the few doctors
in the area who makes
house calls and the loss of his services will harm these patients. Tr. 147,
148. 64-66.
b. Petitioner has an excellent reputation for trustworthiness. Tr. 60, 64, 101.
c. Petitioner has no prior Medicare or Medicaid sanctions and has never been
disciplined
by the Pennsylvania licensing medical board. Tr. 139;
P. Br. 28.
d. Petitioner's practice will be economically devastated by the Medicare exclusion.
Tr.
137-139, 147-149; P. Ex. 27, 28.
15. The I.G. did not consider any mitigating circumstances and the four-year
period of exclusion imposed
by the I.G. is unreasonable under the circumstances of this case.
16. An exclusion of one year is appropriate in this case.
DISCUSSION
I. Petitioner Was Suspended Or Excluded From Participation In A "State
Health Care Program, For
Reasons Bearing On [His] Professional Competence And Performance," Within
The Meaning Of Section
1128(b)(5)(B) Of The Act.
Section 1128(b)(5)(B) of the Act grants the authority to the DHHS Secretary's
delegate, the I.G., to exclude
any individual or entity which has been suspended or excluded from participation,
or otherwise sanctioned,
under:
a State health care program, for reasons bearing upon the individual's or
entity's
professional competence, professional performance, or financial integrity.
Petitioner argues that he was not suspended or excluded from a State health
care program for "reasons
bearing on [his] professional competence or professional performance",
because his "errors or omissions
were not significant or substantial breaches" and thus do not fall within
the purview of section
1128(b)(5)(B). Petitioner asserts that the findings of the DPW are allegations
and that testimony and
documentary evidence introduced at his hearing in this case demonstrate that
these findings are inaccurate.
Furthermore, Petitioner contends that the I.G. must perform an independent investigation
of the facts upon
which the DWP based Petitioner's exclusion.
The I.G. argues that Petitioner's exclusion was based upon a review of the
findings and exclusion Order of
the DPW and that this was authorized by section 1128(b)(5)(B) of the Act. He
asserts that he is not
required by the Act to perform an independent investigation of the factual basis
for Petitioner's exclusion
and cites John W. Foderick, M.D., DAB Civ. Rem. C-113 (1989) in support of his
argument that the I.G.'s
authority to impose exclusions emanates from the actions taken by the State.
Most importantly, the I.G.
also argues that Petitioner cannot collaterally attack the state agency's findings
in this proceeding.
I conclude that Petitioner was suspended or excluded from "a State health
care program for reasons bearing
on his professional competence and professional performance." I also conclude
that section 1128(b)(5)(B)
intended that the I.G. rely on the State's actions in imposing exclusions, and
did not intend that the I.G.
examine the fairness or propriety of the process which led to the actions of
the State. See John W.
Foderick, M.D., DAB App. 1125 at 10 (1989).
As I indicated during the December 7, 1989 hearing in this case, the determination
of whether or not
certain conduct affects professional competence or performance has to be made
by examining the face of
the DPW's Notice of Termination and Order excluding Petitioner from participation
as a provider. Tr. 72.
These documents reflect that on June 27, 1988, Petitioner was notified that
the DPW proposed to terminate
Petitioner's provider agreement and exclude him from participation in the program.
I.G. Ex. 1. The DPW
found that Petitioner had violated the program's regulations by billing for
services which had been (1)
provided by an uncertified physician assistant, (2) rendered by an inactive
provider in the program, and (3)
in which an uncertified physician assistant had prescribed drugs to patients
by using blank prescription
forms which had been signed by Petitioner in advance.
The DPW also found that Petitioner had not been registered by the Osteopathic
Board of Medical
Examiners to supervise a physician assistant and had billed the program for
services in which the
corresponding patient records did not conform to standards of practice. I.G.
Ex. 1. On October 20, 1988,
the DPW ordered that Petitioner be excluded from participation in the program
for a period of four years
and pay restitution in the amount of $1,414.50. I.G. 2.
Although section 1128(b)(5)(B) does not define the terms "professional
competence" or "professional
performance," it is reasonable to conclude that these terms encompass those
circumstances where
termination proceedings concern a provider's qualifications and manner of functioning
in his profession.
The DPW's basis for terminating Petitioner as a provider was that he had violated
the program's regulations
by conducting himself in a manner in which he was not qualified by supervising
a physician assistant.
Furthermore, the DPW found that Petitioner had violated standards of practice
in failing to keep accurate
patient records and by signing blank prescription forms and giving them to his
physician assistant. These
findings bear on Petitioner's competence or legal qualifications to practice
his profession and concern the
essence of Petitioner's performance in his profession as a physician.
Petitioner did not respond to the DPW's Notice of Termination nor did he appeal
its October 20, 1988
Order, and Petitioner cannot use this administrative proceeding to collaterally
attack the DPW's
determination. Accordingly, I conclude that Petitioner was excluded from participation
under a "State
health care program, for reasons bearing on his professional competence and
professional performance"
within the meaning of section 1128(b)(5)(B) of the Act.
II. The I.G. Is Authorized to Exclude Petitioner By Section 1128(b)(5)(B) Of
The Social Security Act.
The Secretary of DHHS delegated to the I.G. the authority to determine, impose,
and direct exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21662, May 13, 1983. On July
27, 1989, the I.G.
excluded Petitioner from participating in the Medicare and Medicaid programs
for a period of four years
pursuant to section 1128(b)(5)(B) of the Act. I.G. Ex. 6.
Petitioner contends that, under section 1128(b)(5)(B), the Secretary must make
a finding that Petitioner
was excluded from a State health care program for one of the statutorily identified
reasons, and then must
exercise discretion and make an independent determination of whether an exclusion
from Medicare is
appropriate and warranted under the facts and circumstances of a case.
The I.G. asserts that in determining whether to exclude Petitioner, the I.G.
relied on the findings of the
State agency, the I.G.'s policy implementing the 1987 Amendments to the Act,
and the seven factors
contained in the Regulations in effect prior to the passage of the 1987 Amendments.
The I.G. argues that
his reliance on these factors is reasonable and that the exclusion was properly
imposed.
While Petitioner's arguments may be relevant as mitigating circumstances in
considering the appropriate
length of an exclusion, I conclude that his distinctions are not significant
for purposes of determining
whether an exclusion is authorized in this case. Section 1128(b)(5)(B) of the
Act allows the Secretary (or
his delegate, the I.G.) to exclude from participation in Medicare, and to direct
the exclusion from
participation in Medicaid, of "any individual or entity which has been
suspended or excluded from
participation, or otherwise sanctioned under a State health care program, for
reasons bearing upon the
individual's or entity's professional competence, professional performance,
or financial integrity." While I
do have the authority to decide whether the I.G. is authorized by law to exclude
an individual or entity
under section 1128 of the Act, based on the facts of a particular case, I do
not have the authority to decide
whether the I.G. should or should not exercise that discretion. Thus, the exclusion
imposed against
Petitioner by the I.G. was authorized by section 1128(b)(5)(B) of the Act. 42
U.S.C. 1320a-7(b)(5)(B).
III. An Exclusion Of One Year Is Appropriate In This Case.
The I.G. excluded Petitioner from participating in the Medicare and Medicaid
programs for four years.
Since I have decided that the I.G. had discretion to impose an exclusion in
this case, I must now decide if
the length of exclusion imposed is appropriate.
The Regulations provide that certain criteria be considered in determining
the length of exclusion in this
case. 42 C.F.R. 1001.125. Petitioner asserts that an application of these criteria
to his case leads to the
conclusion that an exclusion of four years is unreasonable. He argues that under
the particular facts of this
case he has already been excluded for a reasonable period of time, and that
it is appropriate that no further
exclusion should be imposed. In support of his arguments, Petitioner cites mitigating
circumstances and
argues that his exclusion should be lessened because: (1) he has no prior Medicare
or Medicaid sanctions;
(2) the exclusion from Medicaid is an adequate remedy for his errors, (3) that
he provides specialized
services to the community that would suffer if he is excluded for four years,
(4) a four-year exclusion
would force Petitioner to cease practicing medicine and cause financial hardship
to his family, and (5) he is
a trustworthy and extremely competent physician.
The I.G. argues that: (1) the purpose of an exclusion under section 1128(b)(5)(B)
is to protect program
recipients and beneficiaries, (2) a four-year exclusion in this case is reasonable,
and (3) in the alternative, if
a four-year exclusion is unreasonable, I should determine de novo the appropriate
length of exclusion.
At the December 7, 1989 hearing in this case, Robert Taylor, a program analyst
employed by the I.G.,
testified. Petitioner's exclusion was based upon Robert Taylor's recommendation.
Mr. Taylor testified
that he: (1) had relied on the DPW's findings contained in the Notice of Termination
and the October 20,
1988 Order, (2) did not independently investigate the findings contained in
the Notice of Determination,
(3) used an I.G. policy to determine the length of Petitioner's exclusion; and
(4) did not consider any
mitigating factors in determining the length of Petitioner's exclusion.
In order to decide the appropriate length of an exclusion, I must make a de
novo determination by making
an independent assessment of the seven factors listed in section 1001.125 of
the Regulations and consider
all of the purposes designated by Congress for the enactment of section 1128(b)(5)(B)
of the Act. In
making that de novo determination, much weight is accorded to a determination
of whether the four-year
period of exclusion imposed by the I.G. is reasonable. The main purposes of
an exclusion are to allow for
a period of time in which to ensure that Petitioner is trustworthy and that
persons helped by these programs
are protected. I must look at all relevant factors in determining Petitioner's
trustworthiness and ensuring
the protection of the beneficiaries and recipients of these programs. Although
the Regulations do not
define what circumstances may be considered as mitigating, I must also consider
any mitigating
circumstances. See 42 C.F.R. 1001.125(b)(4).
During the December 7, 1989 hearing, Petitioner offered testimony which established
that he has practiced
medicine for approximately 18 years, has no prior Medicaid or Medicare sanctions,
and has never been
sanctioned by the State medical licensing board. See, 42 C.F.R. 1001.125(b)(7).
Petitioner also
established that a Medicare exclusion for a period of four years would economically
devastate his practice
and be a hardship to many of his patients. Most importantly, Petitioner demonstrated
that he is held in high
esteem by his patients, has a reputation for competence and trustworthiness,
and is well respected by other
physicians in the area.
At the hearing in this case, Dr. Herbert Secoular testified on behalf of Petitioner.
Dr. Secoular testified that
he had known Petitioner for 19 years and that Petitioner's reputation for professional
competence and
trustworthiness was excellent. Moreover, Dr. Secoular testified that Petitioner
had covered for him when
he had to be away from his own practice, and that he had referred his patients
to Petitioner when Dr.
Secoular moved his practice away from the neighborhood. Tr. 63-66.
Dr. Secoular also confirmed that Petitioner practices in a neighborhood in
which a majority of the persons
are elderly Medicare beneficiaries, many of whom are homebound, and that Petitioner
is one of the few
physicians who makes house calls to these elderly patients. Tr. 65, 66.
The evidence demonstrates that Petitioner is a competent and compassionate
physician who truly cares
about the well-being of his patients. Petitioner has practiced in the same neighborhood
in Philadelphia
since 1974 and serves many elderly patients, most of whom are Medicare beneficiaries,
who would suffer a
hardship by the loss of Petitioner's medical services.
Petitioner testified on his own behalf. In addition to the information he provided
as to the circumstances of
the events which resulted in his exclusion, he demonstrated by his demeanor
and statements that he has
become fully aware of his responsibilities to the Medicare and Medicaid programs.
I found his testimony
to be credible and convincing.
The I.G. abused his discretion in refusing to consider any mitigating circumstances.
My review of the
mitigating circumstances leads me to conclude that a four-year exclusion is
unreasonable. The
circumstances of Petitioner's exclusion, coupled with my observation of him
during his testimony,
convince me that it would be more appropriate for the I.G. to have the opportunity
to consider him for
reinstatement in mid-August 1990 rather than mid-August 1993. In other words,
I conclude that Petitioner
should be excluded for one year, not four.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from participation in the Medicare and Medicaid programs was authorized
by law. I further
conclude that a one-year exclusion is reasonable and appropriate in this case.
IT IS SO ORDERED.
____________________________
Charles E. Stratton
Administrative Law Judge