Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
DATE: June 25, 1990
Docket No. C-209
In the Case of:
Soon Jack Leung
Petitioner,
- v. -
The Inspector General.
DECISION
Petitioner requested a hearing before an Administrative Law Judge (ALJ) to
contest a December 4, 1989
determination by the Inspector General (I.G.) to exclude Petitioner from participating
in the Medicare
program and certain federally-assisted State health care programs (including
Medicaid) for a period of five
years, under the authority of section 1128(a)(1) of the Social Security Act
(Act).
The I.G. moved for summary disposition and, based on the written submissions
by both the I.G. and
Petitioner, I conclude that there are no material facts at issue and that the
law requires that I uphold the
exclusion. I reach this conclusion because I find that Petitioner is subject
to the mandatory exclusion
provisions of section 1128(a)(1) of the Act and the provisions of section 1128(c)(3)(B)
of the Act,
requiring a minimum exclusion period of five years.
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).
II. The Federal Regulations.
The governing federal regulations (Regulations) are codified in 42 C.F.R.,
Parts 498, 1001, and 1002
(1989). 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.
BACKGROUND
The Inspector General (I.G.) notified Petitioner on December 4, 1989 that he
was being excluded from
participation in the Medicare program, and any State health care programs for
a period of five years. The
I.G.'s Notice alleged that Petitioner was convicted of a criminal offense related
to the delivery of an item or
service under Medicare and advised Petitioner that the law required a five-year
minimum exclusion from
participation in the Medicare and Medicaid programs for individuals convicted
of a program-related
offense. Petitioner requested a hearing to contest the I.G.'s determination
and the case was assigned to me
for a hearing and decision.
I conducted a prehearing conference in this case on March 15, 1990, and issued
a prehearing Order on
March 22, 1990, which established a schedule for filing motions and responses.
The I.G. filed a motion for
summary disposition, brief, reply brief, and exhibits in support thereof. Petitioner
filed a response and
brief in opposition to the I.G.'s motion.
ADMISSIONS
Petitioner admits he was "convicted" of a criminal offense within
the meaning of sections 1128(a)(1) and
1128(i) of the Act, of one felony count of mail fraud. P. Br. 1.
ISSUES
The issues are:
1. Whether 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.
2. 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.
3. Whether summary disposition is appropriate in this case.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a licensed medical doctor practicing in New York State. P. Br. 2.
2. A criminal information charged that Petitioner, in April, 1986, as part
of a scheme to obtain
reimbursement for acupuncture treatments which were not allowable under the
Medicare program, "falsely
and fraudulently indicated that reimbursable medical services had been provided"
and "did place and cause
to be placed in an authorized depository for mail, Medicare claim forms to be
sent and delivered by the
Postal Service." I.G. Ex. 2.
3. On April 27, 1989, Petitioner pleaded guilty in the United States District
Court for the Eastern District
of New York to the criminal offense of mail fraud, under 18 U.S.C. 1341, for
the use of the mail for
Medicare claim forms representing that he had administered injections which
he did not, in fact,
administer. The Court accepted his plea. I.G. Ex. 1, pp. 10-12.
4. Section 1128(a)(1) of the Act requires the I.G., as the delegate of the
Secretary of the Department of
Health and Human Services, to exclude individuals "convicted of a criminal
offense related to the delivery
of an item or service" under Medicare or Medicaid programs.
5. Section 1128(i)(3) of the Act defines "conviction" to include
when a "plea of guilty . . . has been
accepted by a federal, state or local court."
6. Petitioner was "convicted" of a criminal offense within the meaning
of section 1128(i)(3) of the Act.
I.G. Ex. 1 and FFCL 3.
7. Petitioner admitted, in the course of this proceeding, that his criminal
offense was "related to the
Medicare program." P. Br., p. 4.
8. Petitioner's criminal offense was "related to the delivery of an item
or service" under the Medicare
program, within the meaning of section 1128(a)(1) of the Act. FFCL 2 and 7.
9. The I.G. was required to exclude Petitioner for five years under section
1128(a)(1) of the Act and did so
in his Notice of December 4, 1989. FFCL 2-8.
10. Section 1128(c)(3)(B) of the Act requires a minimum five-year period for
exclusions under the
authority of section 1128(a)(1) of the Act.
11. There is no authority or discretion under federal law to reduce the exclusion
period in this case. FFCL
2-10.
12. Since the material facts presented above are undisputed and support the
five-year exclusion, the I.G. is
entitled to summary disposition in this proceeding.
DISCUSSION
I. The I.G. is Required To Exclude Petitioner Under Section 1128(a)(1) Of The Act.
Section 1128(a)(1) and 1128(c)(3)(B) of the Act requires the I.G. to exclude
individuals and entities from
the Medicare and Medicaid programs when 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. See
Greene v. Sullivan, Civ. No. 3-89-758 (E.D. Tenn. Feb. 8, 1990), affirming Jack
W. Greene, DAB App.
1078 (1989).
Petitioner admits and I find that he entered a plea of guilty to a criminal
offense "related to" the Medicare
program. Petitioner Brief, p. 4; FFCL 7, 8. That plea was accepted by the District
Court on April 27,
1989. I.G. Ex. 1; FFCL 3. In his plea, Petitioner admitted that the offense
involved claims for services
under the Medicare program when those services were not, in fact, rendered as
claimed. Id. Convictions
for criminal offenses involving false or fraudulent claims, such as the offense
here, are clearly "related to
the delivery of items or services" within the ambit of section 1128(a)(1)
because such claims "directly and
necessarily follow . . . from the delivery of the item or service." Dewayne
Franzen, DAB No. 1165 (1990);
Jack W. Greene, supra, pp. 7 and 12.
Since it is undisputed that Petitioner was "convicted" within the
meaning of section 1128(i)(3) of the Act
and the criminal offense was "related to the delivery of an item or service"
under Medicare, I conclude that
Petitioner is an individual within the scope of section 1128(a)(1) and the I.G.
was required to exclude him
from the Medicare and Medicaid programs.
Petitioner argues, however, that even though the I.G. has authority to exclude
under section 1128(a)(1) of
the Act, the I.G. could instead exclude under section 1128(b). An exclusion
under section 1128(b) would
not be subject to a five-year minimum exclusion period. Petitioner argues that
this would be more
appropriate in light of mitigating factors which he alleges made a five-year
exclusion period unreasonable.
P. Br. 1-9.
Petitioner's argument is based on a misreading of the statute. Section 1128(a)
mandates that the Secretary
"shall" exclude individuals identified in it. As the Board stated
in Napoleon S. Maminta, M.D. DAB No.
1135 (1990): "While it is possible that an individual or entity might fit
within both the mandatory or
permissive categories, the statute provides the Secretary with no option to
choose between them. Under
section 1128(a), if an individual or entity is convicted of a program-related
criminal offense, then the
Secretary must impose an exclusion under that section."
Furthermore, permissive authority to exclude based on fraud would not be appropriate
in this case, since
this authority applies to convictions for offenses not related to Medicare or
Medicaid. Section 1128(b)(1)
of the Act; see S. Rep. No. 109, 100th Cong., 1st Sess. 7, reprinted in 1987
U.S. Code Cong. & Admin.
News 682, 687. The mandatory authority under section 1128(a)(1) of the Act applies,
by its terms, to
convictions for offenses in which the Medicare or Medicaid program, are victims
of crime. See Napoleon
S. Maminta, M.D., supra, pp. 12-13. Petitioner admitted in his guilty plea that
the Medicare or Medicaid
program were the victims of the criminal offense here. I.G. Ex. 1; FFCL No.
3-8.
In sum, the I.G. was required to impose Petitioner's exclusion under section 1128(a)(1).
II. A Minimum Mandatory Five Year Exclusion Is Required In This Case.
Petitioner submitted evidence of mitigating factors which he alleges would
support imposition of a shorter
exclusion period than five years. Petitioner seeks to distinguish this case
from others under section
1128(a)(1) by arguing that he did not intend to defraud the Medicare or Medicaid
programs, and did not
personally profit from the fraud which did occur. P. Br. 7-8.
Section 1128(C)(3)(B) provides for a minimum exclusion period of five years
for exclusions authorized
under section 1128(a). Congressional intent on this matter is clear:
A minimum five-year exclusion is appropriate, given the seriousness of the
offenses at issue. The
minimum exclusion provides the Secretary with adequate opportunity to determine
whether there is a
reasonable assurance that the types of offenses for which the individual or
entity was excluded have not
recurred and are not likely to do so. Moreover, a mandatory five-year exclusion
should provide a clear and
strong deterrent against the commission of criminal acts.
S. Rep. No. 109, supra, at 5.
Since this exclusion is required by section 1128(a)(1), the minimum exclusion
period must be applied.
There is no authority to reduce the exclusion.
IV. Summary Disposition Is Appropriate In This Case.
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 that the undisputed documentary evidence in the record
supports findings and
conclusions that, as a matter of law, Petitioner was properly excluded and that
the length of his exclusion is
mandated by federal 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. Accordingly, the I.G. is
entitled to summary disposition as a matter of law. See Rule 56 F.R.C.P.; Wheeler
and Todd, DAB App.
1123 (1990).
CONCLUSION
Based on the law and undisputed material facts in the record of this case,
I conclude that the I.G. properly
excluded Petitioner from the Medicare and Medicaid programs for a period of
five years, pursuant to
section 1128(a)(1) and 1128(c)(3)(B) of the Act.
Charles E. Stratton
Administrative Law Judge