Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
DATE: September 14, 1990
Docket No. C-230
In the Case of:
Roderick L. Jones, R.N.,
Petitioner,
- v. -
The Inspector General.
DECISION
By letter dated March 5, 1990, the Inspector General (I.G.) notified Petitioner
that he was being excluded
from participation in the Medicare and State health care programs for a period
of five years. Petitioner was
advised that his exclusion resulted from his conviction of a criminal offense
related to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct.
Petitioner was further
advised that exclusion from participation in the Medicare and Medicaid programs
of individuals convicted
of such offenses is permitted by section 1128(b)(1) of the Social Security Act
(Act).
Petitioner timely requested a hearing and the case was assigned to me for a
hearing and decision. I held a
hearing in Baltimore, Maryland on July 24, 1990. Based on the evidence introduced
at the hearing, and on
applicable law, I conclude that there exists a basis in law and fact to impose
and direct a substantial
exclusion against Petitioner. However, given the presence of mitigating evidence,
the five-year exclusion
imposed and directed against Petitioner by the I.G. is excessive. A three-year
exclusion will satisfy the
remedial purpose of the exclusion law. Therefore, I am modifying the exclusion
imposed and directed
against Petitioner to a period of three years.
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)(1)
of the Act permits the I.G. to exclude from Medicare and Medicaid participation
any individual or entity
which has been convicted, under Federal or State law, in connection with the
delivery of a health care item
or service or with respect to any act or omission in a program operated by or
financed in whole or in part
by any Federal, State, or local government agency, of a criminal offense relating
to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct.
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.
ADMISSIONS
Petitioner admits that he was convicted of a criminal offense for which exclusion
under the provisions of
section 1128(b)(1) of the Act is permitted.
ISSUE
The remaining issue in this case is whether the length of the exclusion imposed
and directed against
Petitioner is reasonable and appropriate.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a Registered Nurse who, at all relevant times, was employed
by Bon Secours Hospital
Systems, Inc. I.G. Ex. 5, Tr. 8,9.
2. On April 17, 1989, Petitioner was indicted in the Circuit Court for Baltimore
City, Maryland, of
unlawfully stealing $7,259.26 from Bon Secours Hospital Systems, Inc. in a continuing
scheme and course
of conduct dating from July 1987 up to and including August 1988. I.G. Ex. 5.
3. On May 12, 1989 Petitioner was found guilty in the Circuit Court for Baltimore
City and was sentenced
to five years (which was suspended), restitution in the amount of $7,259.26,
to be repaid to Bon Secours
Hospital Systems, Inc. at the rate of $151.24 per month for 48 months, and to
probation to end upon
payment of restitution. P. Ex. 1, I.G. Ex. 6.
4. The scheme and course of conduct leading to Petitioner's conviction involved
"padding the payroll."
Time cards were adjusted to show additional work performed which did not take
place. Ultimately these
time cards were submitted to the payroll department, which generated a check
based on the erroneous
information. The check was then provided to the employee. Tr. 9.
5. Petitioner received $7,259.26 as the result of this scheme and course of conduct. Tr. 9.
6. Three other people were also convicted as a result of this scheme and course of conduct. Tr. 10.
7. A remedial objective of section 1128 of the Act is to protect program beneficiaries
and recipients and
program funds by mandating or permitting the Secretary to disqualify or to direct
disqualification from
participation in Medicare and Medicaid of those individuals and entities who
demonstrate by their conduct
that they cannot be trusted to administer program funds. Act, section 1128.
8. An additional remedial objective of section 1128 of the Act is to deter
individuals and entities from
engaging in conduct which jeopardizes the integrity of federally-funded health
care programs. Act, section
1128.
9. The offense of which Petitioner was convicted is a serious criminal offense.
10. Petitioner participated in the conduct resulting in his conviction for a period of over a year. Tr. 9.
11. Petitioner stole a substantial amount of money.
12. Petitioner was "convicted" of a criminal offense within the meaning
of section 1128(i) of the Act.
FFCL 3.
13. The I.G. may exclude individuals convicted, "in connection with the
delivery of a health care item or
service, of a criminal offense relating to fraud, theft, embezzlement, breach
of fiduciary responsibility, or
other financial misconduct" within the meaning of section 1128(b)(1) of
the Act.
14. The permissive exclusion provisions of section 1128 of the Act do not establish
minimum or
maximum periods of exclusion. Act, sections 1128 (b)(1) - (14).
15. The I.G. properly excluded Petitioner from participation in the Medicare
and Medicaid programs.
FFCL 1-19.
16. Petitioner has stated that he knows what he did was wrong. Tr. 37-38.
17. There was no evidence submitted that Petitioner had been convicted of any
crime before or after the
conviction upon which the I.G. based his exclusion.
18. Petitioner did not take an active roll in falsifying the documents or submitting
the false time cards. Tr.
26, 27
19. When the conspiracy of which defendant was a part was discovered, Petitioner
admitted his
involvement and offered to testify against others in the scheme; Petitioner
never denied his guilt. P. Ex. 1.
20. Petitioner is making timely restitution payments, and is trying to accelerate
his restitution payments.
P. Ex. 1/3.
21. In light of the mitigating factors that are present in this case, a three-year
exclusion of Petitioner is
reasonable and appropriate.
DISCUSSION
There is no dispute in this case that Petitioner was convicted of a criminal
offense relating to fraud and
theft in connection with the delivery of health care items or services. Therefore,
I find and conclude that
the I.G. has authority, pursuant to section 1128(b)(1) of the Act, to impose
and direct an exclusion against
Petitioner from participating in the Medicare and Medicaid programs. The only
contested issue in this case
is whether the length of the exclusion that the I.G. determined to impose and
direct against Petitioner is
reasonable and appropriate.
As I stated in Frank J. Haney, DAB Civ. Rem. C-156 (1990), an exclusion must
be judged in light of the
evidence in the case and the intent of the exclusion law. An exclusion determination
will be held to be
reasonable where, given the evidence in the case, it is shown to fairly comport
with legislative intent. "The
word `reasonable' conveys the meaning that . . . [the I.G.] is required at the
hearing only to show that the
length of the [exclusion] determined . . . was not extreme or excessive."
(Emphasis added). 48 Fed. Reg.
3744 (January 27, 1983). Thus, based on the law and the evidence, I have the
authority to modify an
exclusion if I determine that the exclusion is not reasonable. Act, section
205(b).
The purpose of the hearing is not to determine how accurately the I.G. applied
the law to the facts before
him, but whether, based on all relevant evidence, the exclusion comports with
the legislative purpose of
protecting the Medicare and Medicaid programs and their beneficiaries and recipients
from untrustworthy
individuals.
The Secretary adopted regulations to be applied in exclusion cases. The regulations
specifically apply only
to exclusions for "program-related" offenses. However, they also express
the intent of the Secretary in
cases where a permissive exclusion is imposed. The factors require a consideration
of the seriousness of
the offense weighed against any mitigating factors. 42 C.F.R. 1001.125.
In this case, the I.G. excluded the Petitioner for five years. At the hearing,
the program analyst who made
the recommendation to the I.G. to exclude Petitioner for five years stated that
the I.G.'s policy is now to use
the five year minimum, mandatory exclusion, which is applicable in all section
1128(a) program related
exclusions, as a "benchmark" for permissive exclusions under section
1128(b). The I.G. would then
consider any mitigating or aggravating factors which might affect that five
year period of exclusion. Here,
the I.G. found that while there were mitigating circumstances, they did not
mitigate to the extent of
recommending a lesser period of exclusion. Tr. 15-16. I disagree.
In Haney, supra, I reduced petitioner's exclusion from five years to three.
The petitioner in that case had
been convicted of two felonies, relating to fraud, whereby the petitioner and
others generated income
payments for themselves and concealed the income by making false entries in
accounting records. As a
result of his criminal actions, petitioner was placed on probation for a period
of five years, sentenced to
serve 50 hours of community service, and fined $10,000. I found, however, several
mitigating factors in
Haney which warranted a reduction in the five year period of exclusion imposed
and directed by the I.G.
These included letters regarding Petitioner's good character, the illness and
resulting death of Petitioner's
mother during the pertinent time, and the fact that Petitioner was no longer
employed, and did not intend to
become employed, in the health care field.
While Petitioner in the instant case, unlike the petitioner in Haney, did not
actively change records or
personally send in the altered time cards, Petitioner did accept and enjoy the
fruits of the theft. A
substantial exclusion is reasonable and necessary to ensure that Petitioner
is trustworthy enough to again
participate in the programs. However, as in Haney, I also find additional mitigating
circumstances to exist,
which lead me to reduce Petitioner's period of exclusion.
I believe that Petitioner is repentant. Petitioner has admitted what he did
was wrong. FFCL 16. At the
hearing Petitioner seemed truly remorseful. As soon as the theft was discovered,
Petitioner admitted it and
agreed to cooperate with the authorities in the prosecution of others involved
in the scheme. FFCL 19. No
evidence was offered to show that Petitioner had ever been convicted of a previous
offense, and no
complaint has been raised with respect to Petitioner's conduct since his conviction.
FFCL 17. Petitioner
stated that he has changed his life and his associations, and that he would
not engage in unlawful activities
ever again. Also, an assertion was made, which the I.G. did not dispute, that
as well as timely making
restitution payments, Petitioner has even been trying to accelerate his restitution
payments. FFCL 20. This
reflects that Petitioner is taking his responsibility seriously and is faithfully
fulfilling his commitment.
These observations and developments are positive and encouraging signs that
Petitioner has made
substantial progress toward recovering the trustworthiness he should have to
participate in Medicare and
State health care programs.
CONCLUSION
In view of the mitigating factors and the factors considered by the I.G. in
determining the period of
exclusion to be imposed and directed against Petitioner, I conclude that a five
year period of exclusion is
excessive and that a three year period of exclusion is sufficient to serve the
exclusion law's purpose of
protecting the Medicare and Medicaid programs and their respective beneficiaries
and recipients.
_____________________________
Charles E. Stratton
Administrative Law Judge