Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Divisn
DATE: August 8, 1990
Docket No. C-182
In the Case of:
Albert Lerner, Ph. D.,
Petitioner,
- v. -
The Inspector General.
DECISION
By letter dated October 24, 1989, the Inspector General (the I.G.) notified
Petitioner that he was being
excluded from participation in the Medicare and any State health care program
for five years. Petitioner
was advised that his exclusion resulted from his conviction of a criminal offense
related to the delivery of
an item or service under the Medicaid program. Petitioner was further advised
that his exclusion was
mandated by section 1128(a)(1) of the Social Security Act.
Petitioner timely requested a hearing, and the case was assigned to me for
a hearing and decision. The I.G.
moved for summary disposition. Petitioner opposed the motion. In opposing the
motion, Petitioner raised
an issue not addressed by the I.G. in his motion -- whether the California Medicaid
Program (Medi-Cal)
was a "State health care program" within the meaning of section 1128
of the Social Security Act -- and I
afforded both parties the opportunity to file briefs as to this new issue. Neither
party requested oral
argument.
I have considered the applicable law, the parties' arguments, and the undisputed
material facts. I conclude
that the exclusion imposed and directed against Petitioner by the I.G. was mandated
by section 1128(a)(1)
of the Social Security Act. Therefore, I enter summary disposition in favor
of the I.G. and affirm the
exclusion.
ISSUES
The issues in this case are whether:
1. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under
Medicaid; and
2. I am required to withhold a decision in this case pending the Secretary's
decision on a request for waiver
of the exclusions imposed and directed against Petitioner.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Medi-Cal is a "State health care program" within the meaning of
section 1128(a) of the Social Security
Act and provides eligible recipients with Medicaid health care coverage. See,
Lynch v. Rank, 747 F.2d
528, 530 (9th Cir. 1984); I.G. Ex. 15.
2. On December 3, 1986, Petitioner was charged in a felony complaint in a California
state court with
criminal offenses, including intentionally filing false Medi-Cal claims. I.G.
Ex. 2.
3. On October 31, 1988, Petitioner pleaded guilty to Count 13 of the complaint. I.G. Ex. 4.
4. Count 13 specifically charged Petitioner with the crime of willfully, feloniously,
and with intent to
defraud, presenting a false or fraudulent Medi-Cal claim for furnishing services.
I.G. Ex. 2.
5. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under
Medicaid, within the meaning of section 1128(a)(1) of the Social Security Act.
Findings 1 - 4; Social
Security Act, section 1128(a)(1).
6. Pursuant to section 1128(a)(1) of the Social Security Act, the Secretary
is required to exclude Petitioner
from participating in Medicare and Medicaid. Social Security Act, section 1128(a)(1).
7. The minimum mandatory period of exclusion for exclusions pursuant to section
1128(a)(1) of the Social
Security Act is five years. Social Security Act, section 1128(c)(3)(B).
8. The Secretary delegated to the I.G. the duty to impose and direct exclusions
pursuant to section 1128 of
the Social Security Act. 48 Fed. Reg. 21662 (May 13, 1983).
9. On October 24, 1989, the I.G. notified Petitioner that he was being excluded
from participation in the
Medicare and Medicaid programs as a result of his conviction of a criminal offense
related to the delivery
of an item or service under Medicaid. I.G. Ex. 11.
10. Petitioner was notified that he was being excluded from participation for
five years, the minimum
period mandated by law. I.G. Ex. 11.
11. The exclusion imposed against Petitioner by the I.G. was mandated by law.
Findings 1 - 10; Social
Security Act, section 1128(a)(1).
12. I am not required to withhold a decision in this case pending the Secretary's
decision on a request to
waive the exclusion imposed and directed against Petitioner. Social Security
Act, section 1128(c)(3)(B).
ANALYSIS
1. Petitioner was convicted of a criminal offense related to the delivery of
an item or service under
Medicaid. Many of the material facts of this case are not in dispute. The I.G.
offered exhibits to show that
Petitioner was charged with criminal offenses, including filing false claims
with Medi-Cal, and that
Petitioner pleaded guilty to one count of the criminal complaint. Petitioner
did not deny that this was the
case. Petitioner does not disagree that these undisputed facts prove that he
was convicted of a criminal
offense related to the delivery of an item or service under the Medi-Cal program.
Indeed, these facts
establish that Petitioner was convicted of fraud directed against Medi-Cal and
such an offense is plainly
related to the delivery of an item or service under that program. See Jack W.
Greene, DAB Civ. Rem. C-
56 (1989), aff'd DAB App. 1078 (1989), aff'd sub nom Greene v. Sullivan, Civil
No. 3-89-758 (E.D. Tenn.
February 8, 1990); Napoleon S. Maminta, DAB App. 1035 (1990).
Petitioner argues, however, that notwithstanding these undisputed facts, the
I.G. has not established that
Petitioner was convicted of a criminal offense related to the delivery of an
item or service under a "State
health care" (Medicaid) program, within the meaning of section 1128(a)(1)
of the Social Security Act.
Petitioner bases his argument on two contentions.
First, Petitioner asserts that the I.G. has not offered undisputed proof that
Medi-Cal is a Medicaid program
within the meaning of section 1128. Specifically, Petitioner asserts that the
I.G. has not established that
Medi-Cal is a "State plan approved under title XIX" as required by
section 1128(h)(1). Therefore,
according to Petitioner, the issue of Medi-Cal's status is an issue of fact
which must be tried in an
evidentiary hearing.
Second, Petitioner argues that even if Medi-Cal was at one time authorized
to operate as a federally-
approved Medicaid program, the undisputed facts do not establish that Medi-Cal
was, at the time of the
commission of Petitioner's criminal offense, in compliance with applicable federal
law and regulations.
Petitioner asserts that proof of such compliance is a necessary prerequisite
to finding that Medi-Cal was, at
the relevant point in time, an approved State plan within the meaning of section
1128(a)(1). Petitioner also
offers exhibits which he contends show that Medi-Cal has not complied with federal
law and regulations.
Therefore, according to Petitioner, there is a disputed issue of fact concerning
whether Medi-Cal is an
approved State plan, and an evidentiary hearing is necessary as to that issue.
The I.G. argues that I should take judicial notice that Medi-Cal is an approved
State plan. He argues
alternatively that documents which he has offered as I.G. Ex. 15 establish that
to be the case. The I.G. also
argues that proof of ongoing compliance with federal law and regulations is
not necessary to show that a
State plan is a "State health care program" within the meaning of
section 1128(a)(1).
The term "State health care program" is defined by section 1128(h)
of the Social Security Act to include
any State plan approved under Title XIX. If Medi-Cal is a State plan approved
under Title XIX, it is a
"State health care program" as defined by law.
I take judicial notice of the fact that Medi-Cal is California's State plan
approved under Title XIX.
Therefore, it is a "State health care program" within the meaning
of section 1128(a)(1). I discern no
legitimate reason to conduct an evidentiary hearing as to the issue of whether
Medi-Cal is in fact a
Medicaid program. I conclude further that the law does not require proof that
Medi-Cal complied with
applicable federal law and regulations as a necessary prerequisite to concluding
that Medi-Cal is a
Medicaid program.
There are no regulations governing the circumstances under which judicial notice
may be taken in
administrative hearings concerning exclusions imposed under section 1128. However,
regulations provide
at 42 C.F.R. 498.60(b)(1) that the administrative law judge who conducts an
exclusion hearing shall
inquire fully into all of the matters at issue and receive into evidence the
testimony of witnesses and any
documents that are relevant and material. This regulation effectively mandates
that hearings in exclusion
cases comport with accepted requisites of due process. Furthermore, the Administrative
Procedure Act, 5
U.S.C. 556, implicitly requires that administrative hearings comport with due
process requirements.
I conclude that I may take judicial notice of facts in issue in those circumstances
where to do so would
efficiently resolve controverted issues, and where the parties' rights to due
process are not transgressed. I
consider it relevant, in deciding under what circumstances I may take judicial
notice, to consider analogous
situations where courts are permitted to do so.
The Federal Rules of Evidence provide, at Rule 201(b), that:
A judicially noticed fact must be one not subject to reasonable dispute in
that it is either (1) generally
known within the territorial jurisdiction of the trial court or (2) capable
of accurate and ready determination
by resort to sources whose accuracy cannot reasonably be questioned.
The judicial notice rule is a mechanism by which courts may draw factual conclusions
without requiring
parties to prove that which is obvious. It is not a rule which may be lightly
applied. I would not take
judicial notice of any fact under circumstances where there exists reasonable
doubt as to whether that fact
is established.
I conclude that, in this case, Medi-Cal's status as a State plan approved under
Title XIX is an obvious fact
of which I can take notice. The I.G. has offered two sources which establish
Medi-Cal to be California's
Medicaid plan, and these sources' accuracy cannot reasonably be questioned.
The United States Court of Appeals for the Ninth Circuit specifically found
that Medi-Cal is a State plan
approved under Title XIX. Lynch v. Rank, 747 F.2d 528, 530 (9th Cir. 1984).
Lynch establishes that
Medi-Cal's status as an approved State plan is a fact generally known within
the jurisdiction of the Ninth
Circuit. Furthermore, there exists no reasonable basis to challenge the accuracy
of the Court of Appeals'
finding.
The I.G. has also offered documents that establish that Medi-Cal is California's
State plan approved under
Title XIX. These are compiled as I.G. Ex. 15. The exhibit includes Departmental
documents which
plainly describe Medi-Cal as an approved State plan. I am aware of nothing which
would call into question
the accuracy of the source offered by the I.G.
I do not agree with Petitioner's contention that the I.G. must prove that Medi-Cal
is in continuing
compliance with all relevant laws and regulations in order to satisfy the definition
of the term "State health
care program." The I.G. meets his burden by showing that Medi-Cal is a
State plan approved under Title
XIX. The term "approved" does not suggest a continuing approval process
contingent upon ongoing
compliance by a State plan with applicable federal laws and regulations. Rather,
the term plainly refers to
the act of approving a plan by the Secretary or by his delegate. Once a plan
is "approved" by the Secretary,
it meets the definition contained in sections 1128(h) and incorporated in section
1128(a).
This conclusion is directed by the plain language of section 1128(h). However,
I also conclude that any
other interpretation of the meaning of that section would be inconsistent with
Congress' purpose in
enacting the exclusion law. The purpose of the exclusion law is to protect federally-funded
health care
programs and the programs' beneficiaries and recipients from untrustworthy providers
of services.
Petitioner in effect argues that Congress did not intend to protect programs
or recipients from
untrustworthy providers in those circumstances where State programs defrauded
by those providers were
not technically complying with every detail of federal regulations. I find this
analysis to be inimical to
Congressional intent, for three reasons.
First, there is nothing in either the letter of the law or in its history to
suggest that Congress qualified its
application as averred by Petitioner. As I note above, the meaning of the term
"approved" is plain and
unambiguous. Had Congress intended to qualify that meaning, it would have said
so.
Second, the law's remedial objectives would be frustrated if recipients of
a State plan were denied
protection from an untrustworthy provider because the plan had not complied
with some legal requirement.
Finally, the exclusion law is written to enable the Secretary to protect all
State plans and Medicare from an
untrustworthy provider, based on that provider's conviction of a criminal offense
related to the delivery of
an item or service under any approved State plan or Medicare. The law's premise
is that an offense
committed against any plan evidences untrustworthiness with respect to all plans.
It would be an absurd
result to deny that protection to all plans and Medicare based on the failure
of a State plan victimized by
fraud to comply with some federal law or regulation.
2. I am not required to withhold my decision in this case pending the Secretary's
decision on a request to
waive the exclusion imposed and directed against Petitioner. Petitioner asserts
that a request for a waiver
of the exclusion has been made on his behalf by the State of California. Petitioner
contends that the
Secretary must decide whether a waiver should be granted before I decide the
I.G.'s motion for summary
disposition. In effect, Petitioner argues that I must stay this case, pending
the Secretary's decision on the
waiver request.
The exclusion law expressly provides that a request for a waiver shall be nonreviewable.
Social Security
Act, section 1128(c)(3)(B). I conclude that, inasmuch as I do not have authority
to review the Secretary's
waiver decisions, I am not required to withhold my disposition in a case pending
the Secretary's decision as
to whether to grant or deny a waiver. It would be illogical to read the law
as requiring me to withhold a
decision in a case pending the Secretary's final action on a waiver request,
given that I have no authority to
review the Secretary's decision. Moreover, the Secretary's decision as to a
waiver has nothing to do with
the issues addressed to me in this case. Presumably, the Secretary could decide
to grant a waiver even if I
affirm the I.G.'s exclusion determination.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that the I.G.'s
determination to exclude
Petitioner from participation in Medicare, and to direct that Petitioner be
excluded from participation in
Medicaid, for five years was mandated by law. Therefore, I am entering a decision
in this case sustaining
the five year exclusion imposed and directed against Petitioner.
___________________________
Steven T. Kessel
Administrative Law Judge