Department of Health and Human Services (H.H.S.)
Departmental Appeals Board
Civil Money Penalty
THE INSPECTOR GENERAL
v.
RAYMOND C. REYNAUD, M.D., RESPONDENT
Docket No. C-10
Decision No. CR4
December 16, 1985
DECISION AND ORDER
This is a civil money penalties, assessments, and suspension case arising
from a determination by the Inspector General (I.G.) of the Department of
Health and Human Services (DHHS) that the Respondent submitted 85 false or
improper Medicaid claims for payment in violation of sections 1128A and
1128(c) of the Social Security Act, as amended (42 U.S.C. Secs.1320a-7a and
1320a- 7(c)) (Act) and its implementing federal regulations (45 C.F.R.
Secs101.100 et seq.) (Regulations). [FN1] [FN2]
THE LAW AND REGULATIONS
Section 1320a-7a of the Act authorizes the Secretary of DHHS to determine
to
impose civil money penalties and assessments against any person who has
presented or caused to be presented any false or improper claims for payment
under the Medicare, Medicaid, or the Maternal and Child Health Services Block
Grant' programs.
Section 1320a-7(c) of the Act authorizes the Secretary to determine to
suspend from the Medicare and Medicaid programs any person against whom a
civil money penalty or assessment has been imposed. The Act provides for
written notice and the opportunity for a hearing.
The Regulations implement the provisions of the Act, delegate authority to
the I.G. to make determinations regarding false or improper claims presented,
and provide a right to a hearing before a federal administrative law judge
(ALJ) to those respondents against whom the I. G. proposes civil money
penalties, assessments, or a suspension. The I.G. has the burden of proof
regarding liability and aggravating circumstances; if found liable, a
respondent has the burden of proof regarding circumstances that would justify
reducing the amount of the penalty or assessment, or the period of suspension.
Regulations Sec. 101.114. Either party may seek review by the Secretary of an
ALJ's decision and order and may seek judicial review of any decision and
order that has become final. Regulations Secs.101.125, 101.127.
BACKGROUND
In this case, by letter dated November 27, 1984, the Deputy I.G. for Civil
Fraud notified the Respondent, a psychiatrist practicing in San Jose,
California, of the I.G.'s intent to impose civil money penalties and
assessments against him in the amount of $90,000 and to suspend him from
participation in the Title XVIII (Medicare) and Title XIX (Medicaid) programs
for a period of five years. The I.G.'s notice of intent was based on a
determination that the Respondent had presented or caused to be presented 85
false or improperly filed claims for Medicaid payment for services that were
not provided as claimed, in violation of the Act and Regulations, for the
period between November 28, 1979 and February 29, 1980. [FN3] [FN4] [FN5] By
letter dated December 26, 1984, the Respondent, through counsel, requested a
hearing before an ALJ pursuant to section 101.109(b) (2) of the Regulations.
A
prehearing conference was held in San Francisco, California on March 1, 1985
at which time prehearing procedures, opportunities for discovery, and due
process rights under the Regulations and Act were discussed and a schedule was
set forth regarding discovery, exchanges of documents, motions and preparation
for the hearing.
A formal hearing was held in San Francisco, California from June 18, 1985 to
June 21, 1985 at which time the parties were afforded a full opportunity to
present and have relevant evidence entered into the record, to present and
cross-examine witnesses, and to present statements, motions and argument, as
provided by the Act and Regulations. The parties were represented by counsel
at the hearing and were given the opportunity to submit post-hearing written
briefs and proposed findings of facts and conclusions of law.
Since all of the claims in issue were presented or caused to be presented
prior to the effective date of the Act, August 13, 1981, the Respondent argues
that this case cannot be heard and decided administratively, by reason of the
Federal Constitution, but rather, must be heard and decided by an Article III
Federal Court.
ISSUES
The principal issues are:
1) Whether the Act and Regulations provide for civil money penalties and
assessments for false or improperly filed claims presented prior to the
effective date of the Act (August 13, 1981).
2) Whether the Act and Regulations avoid potential constitutional conflicts
by guaranteeing that the amount of civil money penalties and assessments be
no
greater than those which could have been imposed under the False Claims Act
(for pre-August 13, 1981 claims).
3) Whether the Act and Regulations provide for a suspension if civil money
penalties and assessments are imposed solely on the basis of pre-August 13,
1981 claims.
4) Whether the doctrine of collateral estoppel or the doctrine of equitable
estoppel bar this action.
5) Whether the Act and Regulations guarantee the parties due process rights.
6) Whether the I.G. presented clear and convincing evidence that the
Respondent knowingly presented or caused to be presented claims for Medicaid
payment for services that were not provided as claimed, in violation of the
Act and Regulations.
7) Whether the amount of the proposed penalties, assessments, and suspension
is reasonable and appropriate under the circumstances of this case, within the
intent and meaning of the Act and Regulations.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments of the parties, and being
advised fully herein, I make the following Findings of Fact and Conclusions
of
Law: [FN6]
1. The Respondent, Raymond L. Reynaud, M.D., is a psychiatrist licensed in
the State of California, has participated in the California Medicaid program
(Medi-Cal) since at least 1973 and has filed claims for Medi-Cal
reimbursement. I.G. Ex 1; I.G. Ex 87/16; I.G. Ex 90; I. G. Ex 2 to 86. [FN7]
2. On November 27, 1984, the I.G. notified the Respondent that he determined
that the Respondent had submitted or caused to be submitted 85 false claims
for Medicaid reimbursement in violation of the Act and Regulations and that
he
proposed penalties and assessments and suspension from participation in the
Medicare/Medicaid programs. I.G. Ex 1; Stip. 1.
3. The California Department of Health Services (CDHS) is (and for all
relevant periods was) the Medicaid agency for the State of California,
authorized to administer Medi-Cal, and, until May 31, 1980, Blue Shield of
California (BSC) was the fiscal intermediary for the Medi-Cal program. Stip.
3: Tr 1/51.
4. BSC received, reviewed and processed claims for care rendered to Medi-Cal
beneficiaries by providers of services; these claims are subject to specific
requirements governing said filing of claims for Medi-Cal reimbursement;
judicial notice was taken of the relevant provisions of Title 22 of the
California Administrative Code (C.A.C.). Tr 1/146, 151.
5. To ensure compliance with its regulations or requirements, Medi-Cal
routinely issued educational bulletins to all eligible providers for the
purpose of highlighting and clarifying the C.A.C. Tr 1/80; I.G. Ex 94B/42:
(a) As a participant in the Medi-Cal program, the Respondent was sent the
Medi-Cal bulletins and was familiar with the relevant rules and regulations
of
the Medi-Cal program. Tr 1/80; I.G. Ex 87.
(b) Each claim submitted to Medi-Cal for reimbursement must contain the
name, address and Medi-Cal provider number of the provider submitting the
claim, proof of eligibility of the beneficiary, a proper coded description of
the services provided, the dates the services were provided, the place of
service, signature of the provider, and the charge for the services provided.
Tr 1/55-36; 1/60-61.
(c) Any medical provider is required to sign the claim, certifying that
all the information on the billing form is true, accurate, and complete. The
certification statement reads:
I certify that the services listed on this form were medically indicated and
necessary to the health of this patient and were personally rendered by me or
under my personal direction.
This is to certify that all information entered on this form is true,
accurate and complete.
I understand that payment and satisfaction of this claim will be from
federal and state funds and that any false claims, statements or documents or
concealment of a material fact may be prosecuted under applicable federal or
state laws.
Tr 1/57-59; I.G. Ex 94B/75; I.G. Ex 103.
(d) Medi-Cal benefits eligibility is demonstrated by attaching a proof of
eligibility (POE) label or Medi-Cal sticker to the claim form and POE labels
or Medi-Cal stickers are issued to all Medi-Cal beneficiaries on a monthly
basis. This label or sticker will indicate the month and year that the patient
is eligible to receive benefits. Tr 1/56-57.
6. On each of the Medi-Cal claims in issue in this action, the Respondent
signed the certification statement referenced above. I.G. Ex 2-86.
7. The coded description of services provided to a beneficiary is derived
from the California Relative Value Studies (CRVS), published by the California
Medical Association (CMA). I.G. Ex 98. Services provided to Medi-Cal
beneficiaries are billed using a procedure number from the 1974 Edition of the
CRVS. The payment is based on the unit value from the 1969 CRVS. Tr 1/71-72:
I.G. Ex 93A/69:
(a) Psychiatric services, including both individual and group therapy, are
covered by the CRVS coding system. Individual psychotherapy is billed in time
increments of 15, 25, and 45-50 minutes and by location (office, hospital or
other facility, or home). Group psychotherapy is billed for maximum size
groups of 8 or 16 persons, and it is billed for each person, in 45-50 minute
or 90 minute sessions. As with individual therapy, CRVS codes also specify the
location of the group session. I. G. Ex 98/6.
(b) The correct CRVS code to use when billing for 45-50 minutes of
individual psychotherapy in the office is 90803; 90805 represents the same
amount of time spent with an individual in his home. Tr 1/72; I. G. Ex 98/6.
(c) If a psychiatrist spends 25 minutes with an individual in his home,
the proper code number is 90808; 15 minutes of individual therapy in the
patient's home is billed as 90813; sessions lasting less than 15 minutes are
billed under CRVS code 90440. I.G. Ex 98/4, 5; Tr 1/73; I.G. Ex 98/6; Tr 2/11.
(d) Reimbursement for 50 minutes of psychotherapy is higher than for 15
minutes. The 1969 CRVS assigns a unit value of 50 to a 50 minute psychotherapy
session, while a 15 minute session carries a unit value of only 20. I.G. Ex
98/2.
(e) CRVS code 90440 is defined as a brief examination and in the
psychiatric context involves simply meeting the patient and observing him in
a
brief interaction; reimbursement by Medi-Cal for a brief visit is considerably
less than for 50 minutes of psychotherapy. Tr 2/ 13.
(f) Billing Medi-Cal for group therapy is as follows: A 45-50 minute
session with a maximum of 8 patients in the office is billed as 90815; the
same session conducted outside the office must be billed as 90816. A group
session of 45-50 minutes involving up to 16 patients in the doctor's office
is
billed as 90821, and as 90822 when conducted in a group home or elsewhere.
I.G. Ex 98/ 6.
(g) Group therapy cannot be billed under 90803 or 90805, as these codes
are limited to one-on-one therapy. Tr 1/77: 2/9-10; I.G. Ex 98/6.
(h) In neither group nor individual therapy can sessions be billed
cumulatively. In order to bill for 45-50 minutes of psychotherapy, the therapy
must have been given in one session and not accumulated over a series of
shorter sessions. Tr 1/77-78; 2/14-15; I.G. Ex 94B/11-12; I.G. Ex 93A/76, 96.
(i) If a psychiatrist chooses to see the patient for a series of brief
visits, the sessions must be billed separately by each date of service using
the appropriate CRVS code to indicate the location and the amount of time
spent with the patient. Tr 1/77-78; I.G. Ex 94B/11-12, 38-39.
8. The Medi-Cal program limits reimbursement for psychotherapy to the time
spent in actual face-to-face interaction between the psychiatrist and the
patient:
(a) The provider may not bill Medi-Cal for telephone consultations or for
a review of the patient's records, activity logs or other documents. I.G. Ex
94B/13, 27; I.G. Ex 93A/76, 100-101; Tr 2/9; I. G. Ex 104.
(b) Consultant services provided by a psychiatrist to a board and care
home or residential facility may not be billed to Medi-Cal. Tr 1/78; 2/9-10;
I.G. Ex 93A/76; I.G. Ex 94B/39-40.
(c) A psychiatrist's discussions with a facility operator concerning a
particular patient or the planning of the facility's general Medi-Cal program
may not be billed to Medi-Cal as psychotherapy. I.G. Ex 93A/ 76; Tr 1/79-80.
9. The Medi-Cal program, pursuant to federal standards, requires providers
to retain documentation that substantiates the services for which
reimbursement is claimed (42 C.F.R. Sec.431.107):
(a) Medi-Cal providers are required to keep, maintain and have readily
retrievable such records as are necessary to fully disclose the type and
extent of services provided to a Medi-Cal beneficiary. Title 22, Sec.51476,
C.A.C.
(b) Providers of psychological services to Medi-Cal beneficiaries are
required to keep and maintain patient logs, appointment books or similar
documents showing the date and time allotted for appointment of each patient
or group patients and the time actually spent with such patients. Id.
Sec.51476(f).
(c) Record keeping requirements protect the integrity of the Medi-Cal
program and are consistent with accepted psychiatric practice. At a minimum,
a
psychiatrist would be expected to keep a record of the patient's visit, any
medication prescribed and any significant observations bearing on the
patient's diagnosis or progress and treatment. Tr 2/13-14.
10. Respondent failed to maintain and keep sufficient documentation to
disclose the type, extent, and duration of services provided to Medi-Cal
beneficiaries. I.G. Ex 87/13-14, 17, 22. This was also evidenced by his
failure to produce documents sought by the I.G. in discovery, as ordered by
me.
11. During the period in issue here, Respondent's practice was devoted
primarily to providing psychiatric services to Medi-Cal beneficiaries. His
patients were largely developmentally disabled individuals living in
residential care facilities (also called board and care homes) which provide
care and supervision in a community setting in Santa Clara County, California.
Tr 1/97, 99; I.G. Ex 87/16, 23.
12. During the period of time that Respondent participated as a Medi-Cal
provider he treated residents of at least twenty-three board and care homes.
I.G. Ex 88/53, 54, 57-59, 62, 93-95, 97.
13. In 1979, the California Department of Justice initiated an investigation
of the Respondent's billing practices and placed the Respondent under
surveillance over a six month period from August 22, 1979 to February 29,
1980. Tr 1/96, 99-111, 118-119; I.G. Ex 88/7-41:
(a) Based on the results of the State's investigation, the State of
California filed a criminal complaint against the Respondent on November 18,
1980 charging him with ten felony counts of filing false claims and one felony
count of grand theft. I.G. Ex 96; I.G. Ex 93A-F; I.G. Ex 88/128.
(b) After the complaint (I.G. Ex 96) was filed against the Respondent, the
Department of Justice received another complaint that he was taking Medi-Cal
stickers from board and care home residents who were not his patients. Tr
2/29-30; I.G. Ex 89.
(c) An investigation conducted in October 1981 revealed that in September
1981 the Respondent had visited a board and care facility for a total of
thirty minutes, but had submitted eight claims for one hour and one claim for
fifteen minutes of psychotherapy on behalf of residents of the home. Tr
2/29-33.
(d) The State of California filed a second criminal complaint against the
Respondent charging him with seven felony counts of presenting false claims.
I.G. Ex 95; Tr 2/33; I.G. Ex 94A-D.
(e) On October 20, 1983, the Respondent was convicted on four counts of
presenting false Medi-Cal claims in violation of the California Welfare and
Institutions Code Sec.14107. Each claim was for fifty minutes of psychotherapy
rendered at the patient's home. Stip. 9; I.G. Ex 95.
14. A major portion of the Respondent's patients (in issue here) are
Medi-Cal beneficiaries residing at four residential care facilities owned by
Freda Farris and located in San Jose (177 South 12th Street and 119 South 13th
Street) and Santa Clara (1206 Main Street and 1264 Lincoln Street),
California. I.G. Ex 88/65-68.
15. During the relevant time period, the Respondent exhibited the following
pattern of practice at the Farris facilities:
(a) Once a month the Respondent held meetings with residents of the four
Farris board and care facilities. One meeting was in Santa Clara at 1206 Main
Street with the residents of that facility and the residents of 1264 Lincoln
Street. Tr 1/152; I.G. Ex 88/73.
(b) The other meeting was in San Jose at either 177 South 12th Street or
119 South 13th Street with the residents of both facilities. I.G. Ex 88/44,
47; I.G. Ex 93D/121.
(c) For the period in issue, the Respondent visited each of the two Farris
facilities for 15 minutes to one and one half hours. Tr 1/156: I.G. Ex 88/44-
48, 49-51, 55-63, 71, 73-74, 117-118; I.G. Ex 93C/118; I.G. Ex 93D/84-85,
121-122, 139-140.
(d) For the period in issue, the monthly visit to the Farris facilities
was the only time the Respondent saw the residents, except for Kathy Marsh
whom he saw one time at his office. I.G. Ex 3, 88/27-28, 44, 47, 50, 75; Tr
1/152; 159, 195; I.G. Ex 93D/139; I.G. Ex 3.
(e) For the period in issue, the Respondent would not spend more that 5 to
10 minutes with each individual resident during the monthly session at a
Farris home. I.G. Ex 88/ 8, 10, 15-16, 25, 30-31, 41, 44; I.G. Ex 93D/26.
(f) For the period in issue, at the monthly meetings at the Farris homes,
the Respondent collected Medi-Cal cards or the stickers of each of the
residents, whether or not that resident attended the meeting. Tr 1/157-158;
I.G. Ex 93D/14, 27, 141; I.G. Ex 88/20, 32, 68, 74.
(g) Each of the managers of the Farris homes made and kept a record of
medical appointments outside the home for the residents of each home. I.G. Ex
88/ 8, 14, 45, 48, 51, 67, 70, 72; Tr 1/103, 153, 167; I.G. Ex 93C/120-121;
I.G. Ex 93D/15, 28.
(h) The managers of the Farris homes did not make office appointments with
the Respondent for any residents on dates the Respondent claimed to have
rendered services to residents of these homes in his office. Tr 1/154-155;
I.G. Ex 88/46, 51, 67; I.G. Ex 92; I.G. Ex 93C/ 120-121; I.G. Ex 93D/142.
(i) The only time the Respondent saw the residents of 177 South 12th
Street and 119 South 13th Street during the month of August 1979 was at a
forty-five minute group meeting attended by thirteen residents on August 22,
1979, at a board and care facility. Tr 1/99-103; I.G. Ex 88/7-8, 44-51, 67,
120-121; I.G. Ex 93C/117-124; I.G. Ex 93D/ 81-82, 84, 121, 139, 142.
(j) The only time the Respondent saw the residents of 177 South 12th
Street and 119 South 13th Street during the month of October 1979, was at a
twenty- three minute group meeting attended by seventeen residents of the 13th
Street facility. I.G. Ex 88/9-10, 44-51, 67, 120-121; I. G. Ex 93C/117-124;
I.G. Ex 93D/81-82, 84, 121, 139, 142.
(k) The only time the Respondent saw the residents of 1206 Main Street and
1264 Lincoln Street during the month of November 1979, was at a twenty-six
minute group meeting attended by six residents on November 14, 1979 at a board
and care facility. Tr 1/51-155, 159; I.G. Ex 88/ 13-18, 27-28, 75.
(l) Other than Kathy Marsh, the only time the Respondent saw the residents
of 119 South 13th Street and 177 South 12th Street during the month of
November 1979, was at a forty-six minute group meeting attended by eighteen
residents on November 14, 1979 at a board and care home. I.G. Ex 88/15-17,
44-51, 67, 120-121; I.G. Ex 93C/117-124; I. G. Ex 93D/81-82, 84.
(m) Kathy Marsh had an appointment to see the Respondent on November 20,
1979. I.G. Ex 88/46. Yet the Respondent submitted a claim that he had rendered
services to Ms. Marsh on November 29, 1979. I.G. Ex 3.
(n) The only time the Respondent saw the residents of 177 South 12th
Street and 119 South 13th Street during the month of December 1979, was at a
thirteen-minute group meeting at a board and care facility on December 13,
1979. I.G. Ex 88/ 21-22, 44-51, 120-121; I.G. Ex 93C/ 117-124; I.G. Ex 93D/
81-82, 84.
(o) The only time the Respondent saw the residents of 1206 Main Street and
1264 Lincoln Street during the month of December 1979, was at a thirty-six
minute group meeting attended by sixteen residents at a board and care
facility on December 13, 1979. Tr 1/152-155, 159; I.G. Ex 88/20-21, 25, 27-
28, 75.
(p) The only time the Respondent saw the residents of 177 South 12th
Street and 119 South 13th Street during the month of January, 1980, was at a
thirty- six minute group meeting attended by fourteen residents at a board and
care facility on January 9, 1980. I.G. Ex 88/29-31, 44-51, 120-121; I.G. Ex
93C/117-124; I.G. Ex 93D/67, 81-82, 84.
(q) The only time the Respondent saw the residents of 1206 Main Street and
1264 Lincoln during the month of January 1980, was at a forty-two minute group
meeting attended by eleven residents at a board and care facility on January
9, 1980. Tr 1/152-153, 155, 159; I.G. Ex 88/29, 31-32, 75.
(r) On January 28, 1980, the Respondent did not go to any of the board and
care facilities where he claimed to have rendered services that day. I.G. Ex
68-74; I.G. Ex 88/33.
16. The Respondent submitted forty-eight separate claims to Medi-Cal for
psychotherapy provided during the period of January 30 to February 6, 1980 (R
Ex TT/640-643), when he was out of town and unavailable for consultation. I.G.
Ex 88/33-34.
17. On February 19, 1980 the Respondent did not go to any of the four board
and care facilities where he claimed to have provided services that day. I.G.
Ex 75, 76, 78-80; I.G. Ex 88/35.
18. On February 20, 1980 the Respondent did not go to any of the five board
and care homes which he represented to have visited that day. I. G. Ex 81, 82,
84, 85; I.G. Ex 88/ 35-36.
19. The Respondent did not go to his office or to any of the six addresses
where he represented to have provided services on February 21, 1980. I.G. Ex
23-25, 40, 41, 67; I.G. Ex 88/36-37.
20. The Respondent did not go to any of the three board and care homes where
he represented to have provided services on February 29, 1980. I. G. Ex 54,
66; I.G. Ex 88/39-40.
21. The Respondent received the resident's Medi-Cal stickers in exchange for
his services as consultant to the various board and care homes. I.G. Ex 88/20,
53-55, 66, 68.
22. Respondent knowingly misrepresented on his Medi-Cal claims the services
provided by him. I.G. Ex 87/3, 6-8, 21, 25; Tr 1/80.
23. Eighty-two of the eighty-five claims (I.G. Ex 2-86) in issue contain
services which were not provided as claimed.
24. The I.G. did not prove by clear and convincing evidence that the
following claims for services were falsely claimed: (a) I.G. Ex 7. (b) I.G.
Ex
77. (c) I.G. Ex 83. See Discussion, infra., p 33.
25. From June 8, 1973 through May 30, 1980, the Respondent was overpaid a
total of $92,559.93 by Medi-Cal and Medicare for billings for services to
residents of six board and care homes. Tr 2/19-25; I. G. Ex 88/124-129; I.G.
Ex 90.
26. Based on the two criminal complaints and his felony conviction on
October 20, 1983, the California Board of Medical Quality Assurance took the
following action:
(a) They charged the Respondent with (1) submitting one hundred and thirty
two claims to Medi-Cal, each for forty five to fifty minutes of individual
psychotherapy provided either in the patient's home or in the Respondent's
office, when in fact he either conducted brief monthly visits at custodial
care facilities or provided no therapy at all; and (2) signing and submitting
Medi-Cal claims, knowing them to be false. I.G. Ex 105; I. G. Ex 106.
(b) The Respondent's license to practice medicine was revoked and
revocation was stayed for a five year probation period upon Dr. Reynaud's
admission to all the charges contained in I.G. Ex 105, 106. I.G. Ex 107/2-3.
27. The entire record proves that the Respondent knew that the services for
which he sought reimbursement in 82 out of the 85 claims in issue here were
not provided as claimed and that the Respondent intended to defraud the
Medicaid system. See I.G. Ex 1 to 86.
28. The Respondent has a responsibility under the Act and Regulations to be
informed of the regulatory requirements and was in fact, knowledgeable of
them. I.G. Ex 88. See United States v. Cooperative Grain and Supply Co., 476
F.2d 47 (8th Cir. 1973). This responsibility or duty includes an obligation
to
ensure that the services billed for were in fact provided as claimed.
29. Had the services for which payment was sought been provided as claimed
by the Respondent, they would have been reimbursable services under Title XIX
of the Act.
30. Each of 82 of the 85 claims alleged by the I.G. as constituting a false
claim in this case is an item or service subject to a determination under
Section 101.102 of the Regulations:
(a) Each claim in issue states that 45-50 minutes of individual
psychotherapy was conducted when in fact the Respondent conducted brief
monthly visits at custodial care facilities or provided no individual
psychotherapy at all and each claim is signed by the Respondent.
(b) The I.G. has met his burden of proving by clear and convincing
evidence that Respondent is liable under the Act and Regulations for the
filing of 82 false claims. (Regulations Sec.101.114(b).)
31. The I.G. has met his burden of proving the existence of substantial
aggravating factors in this case:
(a) The nature of the claims in this case and the circumstances under
which they were presented are aggravating circumstances and I.G. Ex 2-86
(except for 7, 77, 83) represent a large number of claims over such a short
period of time.
(b) The I.G. has established the existence of a clear pattern of filing
claims for services which were not rendered by the Respondent as claimed.
(c) The pattern of filing false claims was a conscious one, created and
implemented by the Respondent, and he intended to defraud the Medicaid system
or program.
(d) The amounts falsely claimed by the Respondent for the charged items
and services are substantial for the short period in issue.
(e) The Respondent devised a broad scheme to obtain Medicaid reimbursement
to which he was not entitled and the claims in issue are only a portion of
that scheme.
(f) Knowledge and intent to file false claims is determined from the
Respondent's actions in filing claims for services he knew were not rendered
as claimed, from the record, and from reading his interview.
(g) The Respondent consciously sought to mislead Medi-Cal, the State, and
the Federal Government, in order to cover up the nature of his activities.
(h) The Respondent's attempt to cover up his activities evidences the
knowing and willful nature of his activities with respect to filing claims for
Medicaid reimbursement and is a substantial aggravating factor which justice
requires be considered. Tr 1/59-160; I.G. Ex 88/ 63-64, 116-117; I.G. Ex
93D/42-43.
(i) The Respondent's claims for reimbursement demonstrate a pattern of
Medicaid fraud.
(j) The Respondent has demonstrated a high degree of culpability.
(k) The Respondent's acts of filing fraudulent Medi-Cal claims after being
indicted on 10 counts of filing false claims and grand theft is a substantial
aggravating factor which justice requires be considered.
(l) The I.G. has established by clear and convincing evidence the
existence of substantial aggravating circumstances which justify imposition
of
penalties in the amount of $81,000 and assessments in the amount of $1,508.19
(minus 34.(c) below) and suspension from program participation for a period
of
five years.
32. The Respondent has met the burden of proving that there is one
mitigating factor. The Respondent provided services to Kathleen Marsh on
November 20, 1979 instead of November 29, 1979.
33. The same factors that are considered in determining penalties and
assessments are to be considered in determining the length of a suspension.
45
C.F.R. Sec.101.107.
34. The amount of the proposed penalty, assessment, and suspension is
reasonable and appropriate under the circumstances of this case:
(a) The maximum penalty in this case is $162,000.00 ($2,000 x 82 false
claims, minus $2,000.00 for one claim where I found mitigating circumstances).
(b) The I.G. has proved sufficient damages to warrant the proposed
assessment against the Respondent less the amount indicated below in (c).
Damages are twice the amount of the federal share paid to the Respondent, plus
costs of this action with regard to the 82 false claims, minus one claim where
I found mitigating circumstances. See United States v. Woodbury, 359 F.2d 370
(9th Cir. 1966).
(c) The amount paid to the Respondent with regard to the 85 claims in
issue was $3,016.38; one half represents the federal share, i.e., $1,508.19.
The maximum assessment is $2,776.38 (2 x $1,508.19) (minus $60 for each of
three claims found not to be false and one claim where I found mitigating
circumstances).
(d) The penalties and assessments imposed are not greater than the amount
which could have been imposed under the False Claims Act.
(e) The Regulations require, and the I.G. has proven by clear and
convincing evidence, that the Respondent presented or caused to be presented
82 false claims in issue and that this could have rendered the Respondent
liable under the False Claims Act, for payment of an assessment and penalty
more than that imposed. See Regulations Sec. 101.114(b)(2); Findings 13-18,
supra; Discussion, infra.
35. Any part of the following Discussion and any part of this Decision and
Order preceding the Findings of Fact and Conclusions of Law which is or may
be
deemed a finding of fact or a conclusion of law is hereby incorporated herein
as a finding of fact or conclusion of law.
DISCUSSION
The Respondent raised several procedural or jurisdictional arguments in the
form of objections or motions during the prehearing process, at the hearing,
and in his Post Trial Brief; these issues are discussed first because they are
in the nature of a motion to dismiss, for judgment on the pleadings or a
motion for special relief. The Respondent argues that the Act and Regulations
cannot be applied to him in this case because the claims in issue were
presented prior to the effective date of the Act, August 13, 1981. He argues
that to apply the Act retroactively, rather than applying the predecessor
statute, the False Claims Act, 31 U.S.C. Sec.3729, violates the ex post facto
(Article 1, Sec.9, clause 3) and due process clauses of the United States
Constitution. (RB 4 to 7.) [FN8] [FN9] The basis of the Respondent's ex post
facto clause argument is that the Act and Regulations are "penal"
in nature
and that they are more "onerous" than the provisions of the False
Claims Act,
the law in effect at the time the alleged false claims were presented by the
Respondent, thus placing him at a disadvantage, citing Weaver v. Graham, 450
U.S. 29, 29 (1981). (RB 4 to 6.) The basis of the Respondent's due process
argument is that because the claims in issue were presented prior to the
effective date of the Act, the institution of this case under the Act and
Regulations, rather than under the False Claims Act, deprives the Respondent
his right to a jury trial, the protections of the Federal Rules of Evidence,
and the extensive discovery procedures guaranteed by the Federal Rules of
Civil Procedure (RB 6 to 7.) [FN10] In short, the Respondent believes that he
has a right to have this case heard by an Article III Court, rather than
administratively. Finally, the Respondent argues that the Respondent's
criminal conviction in State court and subsequent restitution order issued by
that court acts to estop the I.G. from seeking civil money penalties and
assessments here.
The I.G. argues that the ALJ has no authority to rule on constitutional
issues, that the Act may be applied retroactively with regard to civil money
penalties and assessments (so long as it is limited to the liability that the
Respondent would have been subject to under the False Claims Act), that the
Respondent may be suspended (even though the False Claims Act does not
specifically provide for suspension), and that trying this case before an ALJ
(administratively, rather than before an Article III Court) does not deprive
the Respondent of any due process rights. (I.G. B 28 to 33; I.G. RB 1 to 11.)
Finally, the I.G. argues that the State Court's judgment does not act as an
estoppel or in any way preclude this federal administrative action.
I render no binding opinion on the constitutionality of the Act and
Regulations because "the ALJ has no authority to decide on the validity
of
federal statutes or regulations." Regulations Sec.101.115(c). Even if I
had
that authority, I believe that my interpretation of the Act and Regulations
herein may resolve the issues raised by the Respondent without resort to
deciding constitutional questions. Generally, courts will not pass on a
constitutional question if there is some other ground upon which the case may
be disposed of, such as a question of statutory construction. Ashwander v.
TVA., 297 U.S. 288, 341 (1936), Justice Brandeis concurring. Tantamount to my
authority under the Administrative Procedure Act (5 U.S.C. Sec.551 et seq.),
and the Act and Regulations, to hear and decide this case, I must make
findings and conclusions and interpret the provisions of the Act and
Regulations. Moreover, it is a cardinal principle of statutory construction
that every attempt should be made to save, not destroy, the legislative
product. In re United States, 563 F. 2d 637, 642 (4th Cir. 1977).
I. The Act And Regulations Provide For Civil Money Penalties And Assessments
For False Or Improper Claims Which Were presented Or Caused To Be Presented
Prior To The Effective Date Of The Act
Section 1128A of the Act provides for civil money penalties and assessments.
The effective date of the Act is August 13, 1981. The claims in issue in this
case (I.G. Ex 2-86) were presented for payment prior to the effective date of
the Act. It is clear that the Regulations, which implement the Act, apply to
these claims for the following reasons.
The preamble to the Regulations states:
The ex post facto clause of the United States Constitution, Art. I,
section 9, cl. 3, does not bar the retrospective application of this statute
to claims filed before the Act's effective date. It is well settled that the
clause pertains only to criminal statutes that make punishable conduct that
was not criminal at the time it was committed, that increase the amount of
punishment for past conduct, or that alter the rules of evidence to make it
easier to convict a criminal defendant. Calder v. Bull, 3 U.S. (3 Dall.) 386
(1878).
48 Fed. Reg. 38828 (August 26, 1983).
The preamble further states that, although section 1128A (Sec.1320a-7a) of
the Act does not expressly provide for retroactive treatment, "there is
some
indication in the legislative history that Congress intended it to so apply."
Id.
Section 101.114(b) of the Regulations provides:
(b) to the extent that a proposed penalty and assessment is based on
claims presented before August 13, 1981, the Inspector General must prove by
clear and convincing evidence that: (1) the Respondent presented or caused to
be presented such claims as described in Sec.101.102 and (2) presenting or
causing to be presented such claims could have rendered Respondent liable
under the provisions of the False Claims Act. 31 U.S.C. 3729 et seq. for
payment of an amount not less than that proposed.
These implementing Regulations have the force and effect of law. So long as
the Regulations are not inconsistent with the Act, for purposes of this
Decision and Order, I need inquire no further. I conclude that the Regulations
are not inconsistent with the Act because the Act is silent with regard to
retroactivity, the Act's legislative history suggests that retroactive
treatment be accorded and the Regulations provide certain guarantees
(discussed infra) that protect respondents from overreaching.
Accordingly, the Act and Regulations provide for civil money penalties and
assessments for false or improper claims which were presented prior to the
effective date of the Act.
The only time limitation on these types of actions is found in section
101.132 of the Regulations, which provides that an action must be brought by
the I.G. within five years from the date "on which the right of action
accrued." (This is not in issue in this case.)
Moreover, I am satisfied that even if I had the authority to rule on the
constitutionality of this retroactive application, there is no repugnance in
this case because (1) the Act is not "penal" or "quasi-criminal"
in nature
(see United States v. Ward, 448 U.S. 242, 251 to 254 (1980) where a "civil
penalty" was held not to be "quasi-criminal"); see also, United
States v.
Cooperative Grain and Supply Co., 476 F. 2d 47 (8th Cir. 1973), and (2) as
will be discussed more fully infra, the Regulations guarantee that the
liabilities cannot be more onerous than those imposed under the predecessor
statute, the False Claims Act.
II. The Act And Regulations Avoid Potential Constitutional Conflicts By
Guaranteeing That The Amount Of Civil Money Penalties And Assessments Be No
Greater Than Those Which Could Have Been Imposed under The False Claims Act
(For Pre-August 13, 1981 Claims).
While the preamble to the Regulations states that the ex post facto clause
of the United States Constitution does not bar the retrospective application
of the Act and that the Act is not a criminal or penal statute, the body of
the Regulations goes much further and guarantees that, even if the Act were
deemed to be a penal statute, which it is not, the Act cannot generate
penalties and assessments greater than those that could have been imposed
under the predecessor statute, the False Claims Act. Section 101.114(b) of the
Regulations provides this guarantee to any Respondent submitting claims prior
to August 13, 1981 and makes the I.G.'s burden of proof the same as it would
be if he were proceeding under the False Claims Act.
III. The Regulations provide For A Suspension If Penalties Or Assessments
Are Imposed Against A Respondent On The Basis Of Pre- August 13, 1981 Claims
On the one hand, one could argue, as the Respondent does, in effect, that a
literal reading of the preamble to the Regulations provides that the sanctions
which can be imposed under the Act are limited to those provided under the
False Claims Act, which specifically mentions only penalties and assessments
for damages and costs.
On the other hand, Section 1128(c) of the Act provides that the Secretary of
DHHS may bar a Respondent from program participation if there is a final
determination to impose a civil money penalty or an assessment and is silent
with regard to retroactive application. [FN11] What triggers the suspension
in
the Act is a final decision and order of civil liability imposed against a
respondent. The Regulations specifically provide for retroactive application
of the Act with regard to civil money penalties and assessments and
accordingly, a suspension is triggered by an imposition of civil money
penalties and assessments which are based on pre-August 13, 1981 claims.
The I.G. makes a convincing argument that the preamble is not inconsistent
with the body of the Regulations, that a suspension is a remedial action, and
that suspension in this case can be imposed on the basis of acts performed by
the Respondent prior to the effective date of the Act (because the Respondent
could have been subject to a suspension pursuant to a predecessor federal and
a California statute). See Title 42 U.S.C. Sec.1862(d)(1)(A). However, it is
up to the Courts to decide whether this application required by the
Regulations is violative of the Federal Constitution. I decide only that
suspension is provided for under the Regulations because liability is found
in
this case and that the Regulations are consistent with the intent of the Act.
Moreover, a suspension was triggered in this case, by reason of the
Regulations, because the I.G. met his strict burden of proof regarding civil
penalties and assessments under the False Claims Act standard; this in itself
provided the Respondent, with some additional guarantees that the Respondent
would not have if the alleged false or improper claims had been presented
after August 13, 1981.
The fact that there has been a suspension provision on the books since 1972,
lends credence to the I.G.'s conclusion. I believe that the suspension
authority under the Act does not reflect a substantial expansion of pre-
existing liability, since section 1862(d)(1)(A) of 42 U.S.C. has authorized
suspensions from program participation for filing false claims for periods
well before the effective date of the Act.
IV. Collateral Estoppel Has No Application In this Case
The doctrine of collateral estoppel precludes relitigating an issue in a
future action between the same parties where there is a final judgment in an
earlier action. While some of the claims in issue here are the same as those
litigated in an earlier action, that doctrine simply has no hint of
application here because there is no showing by the Respondent that the
parties in this action are the same as the parties in the State criminal
action cited by the Respondent, or no showing that the I.G. or the Federal
Government had the requisite control over that State Court action to preclude
the I.G. from litigating the claims in issue in this civil money penalties,
assessments and suspension case. Montana v. United States, 440 U.S. 147 (1979)
United States v. Laskey, 60 F. 2d 765, 768 (9th Cir. 1978), cert. den.; see
also DAVIS, Administrative Law Treatise, 2d Ed. 1978, chapter 16, Sec.16.10;
444 U.S. 979 (1979); Cf. United States v. Fields, 592 F. 2d 638 (2d Cir.
1978), cert. den.; 442 U.S. 917 (1979). See, e.g., 18 U.S.C. Sec.3579-80 for
restitution that would estop the federal government if "global settlement"
was
employed. Nor is the doctrine of equitable estoppel applicable here. See
Schweiker v. Hansen, 450 U.S. 785 (1981); United States v. Bureau of Revenue,
531 P. 2d 212 (N.M. Ct pp. 1975). Moreover, two generally well-known
principles of law are that (1) a conviction or acquittal of criminal charges
does not preclude a civil action like the one here and (2) successive state
and federal criminal prosecutions are not precluded.
V. The Act And Regulations Give The Parties Due Process Guaranteed By The
United States Constitution
The Respondent argues that because his request to transfer this case to the
United States District Court was denied, he is denied a jury trial, the
protections of the Federal Rules of Evidence, and the discovery procedures
guaranteed by the Federal Rules of Civil Procedure, resulting in a deprivation
of substantive due process rights guaranteed by the Federal Constitution.
Keeping in mind that the Respondent's due process arguments are enmeshed with
his principal argument of illegal retroactivity of the Act and Regulations,
he
is really saying that he ought to have the opportunity to either defend the
I.G.'s proposed civil money penalties, assessments and suspension in federal
court under the predecessor statute, the False Claims Act, or be accorded the
same procedural rights here as he would be accorded in federal court. While
I
disagree, this argument should be discussed. As discussed above, I believe
that the Act and Regulations are not violative of the ex post facto clause of
the United States Constitution, and that the Act and Regulations apply
retroactively. However, any due process argument raised by a party deserves
consideration because "the right to be heard before being condemned to
suffer
grievous loss" is a basic principle of our law. Mathews v. Eldridge, 424
U.S.
319, 333 (1976), quoting Justice Frankfurter in Joint Anti - Fascist Refugee
Comm. v. McGrath, 341 U.S. 123, 168 (1951).
The I.G. argues that the result of proceeding here under the Act and
Regulations, instead of in a federal court under the False Claims Act, is
merely a change in procedure and does not affect the substantive rights of the
Respondent. In addition, the I.G. argues that since this is a civil action and
not criminal or "quasi-criminal" in nature, the Respondent is not
entitled to
constitutional protections that would be accorded a criminal defendant. Again,
being mindful that I have no authority to rule on "the validity of federal
statutes or regulations," I may only construe the Act and Regulations in
light
of the above arguments.
While the Respondent had no right to a jury, and technical rules of evidence
were not applicable during the hearing in this case, the Respondent had a
right to a trial-type hearing before an ALJ under the Act and Regulations, a
requirement that is fundamental to due process. See Regulations Secs.101.111
(right to a hearing), 101.113 (notice of hearing), 101.114 (burden of proof),
101.115 (right to a fair hearing to be conducted by an ALJ), 101.116 (rights
of parties), 101.117 (discovery rights), 101.118 (evidence and witnesses),
101.120 (no ex parte contacts) 101.121 (separation of functions), 101.122
(official transcript), 101.123 (briefs and proposed findings of fact and
conclusions of law) 101.124 (record), 101.125 (decision and order), 101.126
(judicial review), and 101.132 (limitations); Act Sec.1128A; Londoner v.
Denver, 210 U.S. 373, 386 (1908); DAVIS, Administrative Law Treatise, 2d Ed.
1978, chapters 12, 13. The Respondent had notice of the I.G.'s proposals, a
fair hearing, the opportunity for discovery and the opportunity to cross-
examine witnesses. See Mathews v. Eldridge, supra, at p. 335 (1976); Greene
v.
McElroy, 360 U.S. 474 (1959).
Even so, the Respondent argues that if this action were in a federal court,
the Respondent would have had the opportunity to depose the witnesses called
by the I.G., that hearsay statements would not have been admitted into
evidence, and that he could have required that the board and care patients
submit to psychiatric examination. First, the Respondent is correct in arguing
that the Regulations do not allow for depositions, Regulations Sec.101.117.
However, the Respondent already had the opportunity to, and in fact did,
cross- examine all of the witnesses called by the I.G. in this case during the
course of the State criminal proceedings or at the hearing in this case.
Moreover, under the Regulations, the Respondent had the right to cross-examine
all witnesses called by the I.G. well beyond the normal scope of
cross-examination because Sec.101.118(d) provides:
(d) a witness may be cross-examined on any matter relevant to the
proceeding without regard to the scope of his or her direct examination.
Furthermore, the Respondent was given the opportunity to interview all
witnesses called by the I.G. during the prehearing process in this action; the
Record discloses no attempt by the Respondent to do so. With regard to the
Respondent's argument about lack of depositions, and the admission of
objectionable hearsay statements into evidence (the admission of prior sworn
statements of patients in lieu of testimony), the record discloses no attempt
made by the Respondent to subpoena these witnesses and cross-examine them at
the hearing (even after he was given that opportunity by me). The dispositive
case on this issue is Richardson v. Perales, 402 U.S. 389 (1971) which holds
that where the Respondent fails to attempt to confront a witness, the witness
statement may be substantial evidence even though it is hearsay. Finally, I
do
not believe that there is a Federal Rule of Evidence that permits the
psychiatric examination of a group of witnesses (1) without more of an effort
by the Respondent to show the efficacy of such an exercise and (2) in light
of
the fact that the Respondent had the opportunity to test the competency and
credibility of these witnesses at the hearing and made no discernible effort
to do so. It should be noted that, although hearsay is admissible in this
proceeding, it must be credible and reliable and used in a fair manner to have
any probative value. See 5 U.S.C. Sec.556(d); Catholic Medical Center v. NLRB
1589 F. 2d 1166 (2d Cir. 1978); DAVIS, supra at Secs.16.4 and 16.5.
Despite my ruling, the Respondent has the right to have his constitutional
arguments decided by the United States Court of Appeals for the Ninth Circuit,
if he appeals. Thus, assuming the Respondent appeals, it is up to the Ninth
Circuit to determine if the Respondent is seriously disadvantaged in violation
of the United States Constitution or whether the I.G. is correct in arguing
that the retroactive treatment in this case is merely a harmless change in
procedure and is not violative of due process because this is a civil
proceeding and not "quasi-criminal" in nature. Ward, supra [FN12]
VI. The I.G. Presented Clear And Convincing Evidence That The Respondent
Knew That 82 of The 85 Claims In Issue Which Were Presented For 45 to 50
Minutes Of Individual Psychotherapy Services Were Not Provided As Claimed, In
Violation Of The Act And Regulations
The I.G. argues that he has shown by clear and convincing evidence that the
Respondent knowingly presented 85 Medicaid (Medi-Cal) false claims from
November 28, 1979 to February 29, 1980 for services that were not provided as
claimed, that the Respondent was paid $3,016.38 for those services, that the
Respondent was not entitled to any payment for the claims submitted, and that
the claims at issue were a small part of a continuing scheme by the Respondent
from 1973 to 1980 to obtain Medicaid (Medi-Cal) reimbursement in violation of
the Act and Regulations. The I.G. argues that he need not show intent to
defraud, but only that the Respondent knowingly filed the claims in issue,
that there exist substantial aggravating factors, and that the amount of
penalties and assessments proposed are less than what could have been imposed
under the False Claims Act.
In addition to the objections and motions made by the Respondent which are
outlined above, the Respondent argues that the evidence presented by the I.G.
was insufficient to meet the burden of proof required, that the Act and
Regulations do not apply to Medicaid (Medi-Cal) claims, that the amount of
penalties and assessments proposed here is greater than the Respondent would
have been liable for under the False Claims Act, that the I.G. failed to
follow its internal formula in formulating the amount of penalties and
assessments, and that there are mitigating circumstances present in this case.
The Respondent also argued that certain witnesses presented by the I.G. were
not credible and that his witnesses are more reliable and credible.
I conclude that the I.G. presented clear and convincing evidence
establishing that the Respondent knew that each of 82 out of the 85 claims in
issue (I.G. Ex 2 to 86, except for 7, 77 and 83) which were presented for 45
to 50 minutes of individual psychotherapy services were not provided as
claimed, in violation of the Act and Regulations, and that the Respondent
intended to defraud the Medicaid system by submitting false claims in a scheme
to obtain monies to which he knew he was not entitled. On each of the 82 false
claims, the Respondent's provider number is indicated, each patient is listed
as suffering from schizophrenia or mental retardation, or both, and the
Respondent signed the claim certifying that he provided 45 to 50 minutes of
individual psychotherapy. Tr 1/57. Most of the patients listed in the 82
claims are residents of one of four board and care homes operated by Freda
Farris. During the period November 28, 1979 to February 29, 1980, the period
in which the Respondent claims to have rendered individual psychotherapy
services to those patients identified in the 82 false claims, the Respondent
was under surveillance by investigators of the California Department of
Justice, Medi-Cal Fraud Unit. This Investigation led to a criminal conviction
of the Respondent that he is appealing. Even without the fact of this
conviction, there is sufficient clear and convincing evidence in this record
to lead me to conclude that the Respondent knowingly submitted 82 false claims
with the intent to defraud the Medicaid system and obtain monies that he knew
he was not entitled to.
A. Requirements And Standards For Filing Medi-Cal Claims
The Medicaid program is a system under which the Federal Government provides
financial assistance to States to aid them in furnishing health care to needy
persons when they submit a "State Plan" to the secretary of DHHS that
fulfills
federal requirements. 42 U.S.C. Sec. 1396a. The California Department of
Health Services (CDHS) administers the Medicaid program for California, which
is known as the "Medi-Cal" program. The CDHS has promulgated strict
requirements for the filing of claims for Medi-Cal reimbursement. See Title
22, Sec.51502 C.A.C. Blue Shield of California (BSC) is the fiscal
intermediary for the Medi-Cal program. Tr 1/51. Each claim must provide the
name, address, Medi- Cal provider number, and signature of the provider
certifying that the information on the billing form is correct, a coded
description of the services provided, the charge for the services provided,
and contain a proof of eligibility (POE) label affixed to the claim form; POE
labels are issued to all Medi-Cal beneficiaries each month. Tr 1/55 to 60;
I.G. Ex 94B/75, 103. The coded description of services provided to a
beneficiary is determined by referring to the California Relative Value
Studies (CRVS), published by the California Medical Association. I.G. Ex
94B/7, 98. The procedure numbers for services provided to Medi-Cal
beneficiaries are derived from the 1974 edition of the CRVS and payment is
determined from the relative values in the 1969 CRVS. Tr 1/71-72; I.G. Ex
94B/8; I.G. Ex 93A/69. Individual psychotherapy is billed in 15, 25 and 45 to
50 minute increments; group psychotherapy is billed in 45 to 50 minute or 90
minute increments for each of the members, and each claim must indicate where
the service is provided (i.e., office, hospital, other facility or home). I.G.
Ex 98/17. The following are the correct CVRS codes for individual
psychotherapy:
45 to 50 minutes in office = 90803
45 to 50 minutes in residence = 90805
25 minutes in residence = 90808
15 minutes in residence = 90813
less than 15 minutes in residence = 90440
Tr 1/72, 73, 2/13; I.G. Ex 98/15, 17, 94B/12, 14.
The following are correct CVRS codes for billing for group psychotherapy:
45 to 50 minutes with a maximum 8 patients in office = 90815
45 to 50 minutes with a maximum 8 patients outside office = 90816
45 to 50 minutes with a maximum of 16 patients in office = 90821
45 to 50 minutes with a maximum of 16 patients outside office = 90822
Tr 1/75 to 76; I.G. Ex 98/17.
Group therapy cannot ever be billed under the individual therapy codes;
individual codes are limited to one-on-one therapy where privacy is required.
Tr 1/77; I.G. Ex 94B/10, 11. Psychotherapy sessions must be billed for the
exact amount of time given in each session and cannot be accumulated over a
number of small sessions. Tr 1/77, 78, 2/ 14 to 15; I.G. Ex 94B/11 to 13, 38
to 39; 93A/76, 96. Individual and group psychotherapy can be billed to
Medi-Cal only if there is face-to-face interaction between the psychotherapist
and patient; no other activities can be billed for. Tr 1/78, 80, 2/9 to 10;
I.G. Ex 94B/27, 39, 40, 94A/76, 99. Medi-Cal issued bulletins, such as
bulletin 96, dated January 1979, which clarified the fact that only direct
psychotherapy is covered and that other activities, such as consultation with
board and care operators, cannot be billed to Medi-Cal. A psychiatrist is
expected to keep a record of a patient's visit, medication prescribed and any
significant observations. Tr 2/13 to 14; 42 C.F.R. Sec.431.107; title 22
C.A.C. Sec.51476.
B. The Respondent's Practice Of Psychiatry For The Period In Issue
Most of the Respondent's practice of psychiatry in Santa Clara County,
California, was devoted to Medi-Cal patients from 1976 up to the years in
issue here. The Respondent's patients were largely developmentally disabled
persons living in board and care homes which provide care and supervision to
such persons in a community. Tr 1/97, 99. Most of the 85 claims in issue here
relate to four board and care homes operated by Freda Farris located at:
1. 119 S. 13th Street, San Jose, California. 2. 177 S. 12th Street, San
Jose, California. 3. 1206 Main Street, Santa Clara, California. 4. 1264
Lincoln Street, Santa Clara, California.
C. Complaints And Investigations Regarding The Respondent
Prior to 1979, three complaints were made against the Respondent, and
investigated, resulting in no formal charges; the first involved an alleged
conversation that was overheard; the second alleged that the Respondent might
be billing for longer sessions than actually conducted; the third involved an
accusation by a board and care home operator that the Respondent took two
Medi- Cal POE labels from a resident patient when the Respondent allegedly saw
the patient only 1 time and only for 5 to 10 minutes. I.G. Ex 88/5, 6. These
complaints resulted in no action being taken against the Respondent.
In 1979, Setsuko Furuike, a psychiatric social worker employed by the
California Department of Developmental Services, filed a complaint against the
Respondent based on two incidents, which resulted in an investigation by the
California Department of Justice. Tr 1/93 to 97, 195 to 196; I.G. Ex 88/11.
As
a result, John Shea, an investigator with the California Department of Justice
Medi-Cal Fraud Unit, placed the Respondent under surveillance from August 22,
1979 to February 29, 1980 (Tr 1/99 to 111) and a criminal complaint (ten
felony counts) was filed against the Respondent, based on Shea's report. After
the criminal complaint was filed, and before the trial, another criminal
complaint was filed against the Respondent on the basis of a second
investigation initiated by Phil Yee, Special Agent, California Department of
Justice, Bureau of Investigations, resulting in a second criminal complaint
(four felony counts). TR 1/118 to 119, 2/19, 29 to 38; I.G. Ex 89, 93A-F, 96.
Based on this second complaint, the Respondent was convicted of four counts
of
presenting false Medi-Cal claims, in violation of California Welfare and
Institutions Code Sec. 14107, on October 20, 1983. Stip. 9; Tr 2/33; I.G. Ex
95. That case is on appeal.
Besides the surveillance, Shea conducted numerous interviews with board and
care employees, residents, and owners. With the cooperation of some of these
people and Ms. Furuike, the surveillance and with the interview of the
Respondent by Shea, Shea learned about the Respondent's practices of filing
false Medi-Cal claims. Tr 1/118, 119; I.G. Ex 87, 88/101 to 104.
Based on the two criminal complaints, and the felony conviction, the
California Board of Medical Quality Assurance initiated disciplinary
proceedings against the Respondent. I.G. Ex 95, 105, 106/2. The Board charged
that the Respondent submitted 132 claims for individual psychotherapy in the
patient's home or in the office when he either conducted brief visits at
custodial care facilities or provided no therapy at all, and he signed and
submitted the claims knowing them to be false. I.G. Ex 105/2, 3, 106/2. The
Respondent admitted all charges and was given a five year probationary period.
I.G. Ex 107/2, 3.
D. Liability Under the Act And Regulations
The I.G. proved by clear and convincing evidence that the Respondent
knowingly submitted 82 out of 85 Medi-Cal claims for 45 to 50 minute sessions
of individual psychotherapy in the patient's home or in the Respondent's
office, when in fact the Respondent either conducted brief visits or group
therapy at board and care homes or conducted no therapy at all. The Act and
Regulations require that the I.G. prove by clear and convincing evidence that
the Respondent presented or caused to be presented false claims that could
have rendered the Respondent liable under the False Claims Act for payment of
an amount "not less than that imposed" by the I.G. 45 C.F.R. Sec.101.114(b).
The civil False Claims Act provides for a civil penalty of $2,000 for each
false claim and an amount equal to two times the amount of damages the
Government sustains.
Here, the I.G. has more than met his burden of proof and has demonstrated
that the Act and Regulations as well as the False Claims Act are applicable
to
false claims submitted to State Medicaid programs. See U.S. v. Jacobson, 467
F. Supp. 507 (S.D. N.Y. 1979); U. S. ex rel. Davis v. Long's Drugs Inc. 411
F.
Supp. 1144 (S.D. Cal. 1976). As one court noted, "(a)ny fraud-based claim
in
the Medicaid program . . . results in an impairment of the federal treasury
because the Government expends money it would not expend 'but for' the fraud."
U.S. ex rel. Fahner v. Alaska, 591 F. Supp. 794, 798 (N.D. Ill. 1984).
Accordingly, civil penalties may be imposed under the Act for false claims
submitted to a state Medicaid agency. Id.; See also U.S. ex rel. Marcus v.
Hess, 317 U.S. 537, 552 (1943).
Thus, under the False Claims Act, anyone determined to have filed false or
fraudulent claims is subject to a penalty of $2,000 per claim and double the
damages incurred by the Government. See United States v. Bornstein, 423 U.S.
303 (1976); United States v. Ehrlich, 643 F. 2d 634 (9th Cir. 1981).
Similarly, those who have submitted false claims or requests for payment under
the Medicare, Medicaid, or Maternal and Child Health Services block Grant
Programs, prior to August 13, 1981, are subject to the same liability under
the Act and Regulations. 48 Fed. Reg. 38828, 38829 (August 26, 1983). It
should be noted that the I.G. argues that the Act and Regulations apply to the
"negligent" as well as the "knowing" presentation of false
claims here because
the False Claims Act applies to the "negligent" as well as the intentional
submission of a false claim. (See I.G. B 29.) [FN13] There is some question
as
to whether the Ninth Circuit would agree. See United States v. Mead, 4626 F.
2d 118 (9th Cir. 1970). [FN14]
The I.G. argues that, at most, the False Claims Act requires only that the
Respondent knowingly present a false claim to the Government in order to
violate the statute, citing United States v. Hughes, 585 F. 2d 284 (8th Cir.
1973); United States v. Krietemeyer, 506 F. Supp. 289 (S.D. Ill. 1980); United
States ex rel. Fahner v. Alaska, 591 F. Supp. 794 (N.D. Ill. 1984); Fleming
v.
United States, 336 F. 2d 475, 479 (10th Cir. 1964) and United States v.
Toepleman, 141 F. Supp. 677, 683 (E.D. N.C. 1956). On the other hand, the
Ninth Circuit has held that in order to prevail, the Government must
demonstrate that the Respondent had an actual or specific intent to defraud.
United States v. Mead, supra. The I.G. argues that the ALJ may not be bound
by
the Ninth Circuit's holding in Mead, and that later cases dilute the holding
in Mead, citing United States v. Milton, 602 F. 2d 231 (9th Cir. 1979); United
States v. Kennedy, 431 F. Supp. 877, 878 (C.D. Cal. 1977). However, the
question of whether the I.G. need prove intent as suggested by Mead is
academic because I find that the I.G. has proven that the Respondent not only
knowingly submitted 82 false claims but also intended to defraud. See
Discussion, infra.
E. The False Claims Presented By The Respondent
It is clear that the Respondent submitted the 85 claims in issue (I.G. Ex 2
to 86), that each claim contains the Respondent's provider number, and his
signature. Steven Lack, an investigator for the I.G., testified at the hearing
that he conducted an audit and determined that all 85 claims had been
submitted to Blue-Shield of California (BSC) and that the Respondent had been
paid on each of the claims. Tr 1/64, 68, 2/45; I.G. Ex 100, 102. On each
claim, the Respondent certified that he had provided 45 to 50 minutes of
individual psychotherapy.
I conclude that the I.G. proved by clear and convincing evidence that the
Respondent knew that he provided less than 45 to 50 minutes of individual
psychotherapy for the patients named in the 82 false claims, that the
Respondent was familiar with the CVRS codes, knew that he would obtain only
a
fraction of the money if he submitted claims for the correct amount of time
provided to each of the patients in question, and deliberately chose to obtain
more money than he knew he was entitled to under Medi-Cal regulations. The
Respondent had to be well aware that he was filing false claims because he had
already been investigated by the State more than once prior to 1979 and when
interviewed by State investigators, admitted that he chose to misidentify the
place, dates and length of services provided on claims submitted to Medi-Cal.
I.G. Ex 87/6 to 15, 19, 20, 21, 23, 25, 28, 30.
It should be noted at the outset that all but four of the 85 claims
represented that the Respondent performed 45 to 50 minutes of individual
psychotherapy services at the patient's residence. (See I.G. Ex 7 (2 sessions
2/5/80 and 2/20/80), 53, (1/2/80), 77 (2/19/80), 83 (2/20/80). The other four
alleged that he performed those services in his office.
The following is a summary of each of the false claims presented by the
Respondent and the clear and convincing evidence proving that the claims are
false:
1. Five False Claims = I.G. Ex 2 to 6; November 14, 1979, Visit to 119 S.
13th Street, San Jose (Residents attending were also from the other Freda
Farris facility at 177 S. 12th Street, San Jose): [FN15]
The Respondent visited this facility only one time in November 1979 (i.
e., November 14, 1979) and only for 46 minutes. He submitted five claims for
45-50 minutes of individual psychotherapy services allegedly performed at the
residents' facility (CVRS Code 90805). The proof is clear and convincing that
the Respondent did not perform individual psychotherapy for any of these
residents in November 1979, except that he did see Kathleen Marsh (I.G. Ex 3)
on November 20, 1979 in his office; accordingly, the I.G. demonstrated that
all these claims were false claims (including Kathleen Marsh's, because
Respondent used the wrong CVRS Code, i.e., indicated that the services were
performed at her residence instead of his office, and used the wrong date
November 29, 1979 instead of November 20, 1979). However, because this could
have been a harmless clerical error, the I.G. did not prove intent to defraud,
and the Respondent did perform the services for Kathleen Marsh, this will be
considered as a mitigating factor and the penalty and assessment will be
removed. I.G. Ex 88/ 15 to 17, 45, 93D/46, 81, 82, 84.
2. Four False Claims = I.G. Ex 8 to 11; November 1979 visit to 1206 Main
Street, Santa Clara: [FN16]
The Respondent visited this facility only one time in November 1979 (i. e.,
November 14, 1979) and only for 26 minutes. He submitted four claims for 45
to
50 minutes of individual psychotherapy services allegedly performed at the
resident's facility (CVRS Code 90805). The proof is clear and convincing that
the Respondent did not perform the services as claimed and that these
residents of the Freda Farris facilities did not receive 45 to 50 minutes of
individual psychotherapy services from the Respondent in November of 1979.
I.G. Ex 88/15, 17, 18; Tr 1/155.
3. Eleven False Claims = I.G. Ex 12 to 22; December 13, 1979 visit to 1206
Main Street, Santa Clara: [FN17]
The Respondent visited this facility only one time during the month of
December 1979 for only 36 minutes (on December 13, 1979) and claimed to have
performed eleven 45 to 50 minute sessions of individual psychotherapy at this
facility or at the other nearby Santa Clara facility; he did not visit the
other nearby facility at all in December, as residents from that facility
attended the December 13, 1979 group meeting. I.G. Ex 88/20, 21, 28, 31, 92;
Tr 1/53 to 154. All claims were for Freda Farris residents.
4. Fourteen False Claims = I.G. Ex 26 to 39; December 13, 1979 visit to 177
S. 12th Sreet, San Jose: [FN18]
The Respondent visited this facility only one time during the month of
December 1979 for only 13 minutes (on December 31, 1979) and claimed to have
performed fourteen 45 to 50 minute individual psychotherapy sessions at this
facility or at the other nearby San Jose facility; he did not visit the nearby
San Jose facility at all in December, as residents from that facility attended
the December 13, 1979 group meeting. I.G. Ex 88/23, 49 to 51; 36; 93C/120,
124. All fourteen claims were for Freda Farris residents.
5. Eleven False Claims = I.G. Ex 42 to 53; January 9, 1980 visit to 177 S.
12th Street, San Jose: [FN19]
The Respondent visited this facility once during the month of January
1980 for only 36 minutes (on January 9, 1980) and claimed to have performed
more than eleven 45 to 50 minute sessions of individual psychotherapy at this
facility or at the other nearby San Jose facility; he did not visit the other
facility at all in January as residents from that facility attended the
January 9, 1980 group meeting. I.G. Ex 88/29, 30, 49 to 51; I.G. Ex 91; I.G.
Ex 93C/113 to 124. All claims were for Freda Farris residents.
6. Twelve False Claims = I.G. Ex 55 to 65, 86; January 9, 1980 visit to 1206
S. Main Street, San Jose: [FN20]
The Respondent visited this facility once during the month of January
1980 for only 42 minutes (on January 9, 1980) and claimed to have performed
more than twelve 45 to 50 minute sessions of individual psychotherapy at this
facility or at the other nearby San Jose facility; he did not visit the other
facility at all in January as residents from that facility attended the
January 9, 1980 group meeting. I.G. Ex 88/29, 31, 32. All twelve of these
claims were for Freda Farris residents.
7. Twenty-five False Claims (of 28 claims) I.G. Ex 7, 23 to 25, 40, 41, 53,
54, 66 to 85, claims submitted where there were no visits
Of the 28 claims listed above, four claims are for individual psychotherapy
services performed in the Respondent's office (I.G. Ex 7, 53, 77, 83). While
the I.G. proved by clear and convincing evidence that the Respondent did not
visit any of the board and care homes including the four Farris board and care
homes, as claimed on January 28, 1980, February 19, 1980 (I.G. Ex 75, 76, 78
to 80), February 20, 1980 (I.G. Ex 81, 82, 84, 85), February 21, 1980 (I.G.
Ex
23 to 25, 40, 41, 67), or on February 29, 1980 (I.G. Ex 54, 66,) (i.e., proved
that the Respondent could not possibly have rendered individual therapy at the
resident's homes on those dates; I.G. Ex 88/ 40, 41, 62), the Respondent did
spend 3 hours in his office on February 20, 1980 and I. G. Ex 7 and 83 each
list one 45 to 50 minute session of individual psychotherapy in the
Respondent's office on February 20, 1980. In addition, I.G. Ex 77 is a claim
for individual therapy on February 19, 1980 for services provided at the
Respondent's office and there is sufficient doubt as to whether the Respondent
could have rendered this service in his office on that date.
I.G. Ex 53 is for individual psychotherapy rendered on January 2, 1980 for
Ellen Alexion, a resident of one of the Freda Farris board and care homes (119
S. 12th Street) and I find that there is clear and convincing evidence that
the Respondent did not render this service. See I.G. Ex 88. Also, I.G. Ex 7
lists one individual session for February 5, 1980, a date when the Respondent
was out of town. See finding 16. With regard to all the other claims listed
in
the paragraph immediately above, the Respondent was under surveillance and did
not perform the individual psychotherapy claimed in each of these claims at
all because he never visited the board and care homes as claimed. I.G. Ex
88/33 to 40, 41, 62.
F. The Intent to Defraud
Medi-Cal only reimburses for the time spent in face-to-face interaction
between the psychiatrist and patient. Time spent consulting with the board and
care home operator, processing licensing forms, dealing with social service
agencies or other related functions cannot be billed to the Medi-Cal program.
Dr. Reynaud specifically acknowledged this program restriction and yet billed
Medi-Cal for these services.
After describing the variety of functions he performed as a consultant to
the board and care homes in San Jose and Santa Clara, Dr. Reynaud explained,
when interviewed by John Shea and Hector Comacho: "(B)ut there is no way
that
you can bill specifically for this. And I don't, I put it into the patient's
care and bill each individual patient for this." I.G. Ex 87/7, 25. Also,
the
I.G. repeatedly requested that Dr. Reynaud produce documentation that would
demonstrate when and where he saw the Medi-Cal patients. [FN21] The Respondent
objected to that request and alleged that he could not find any appointment
books. In addition to the credible testimony and thorough report of John
Shea's, the materials and testimony submitted by the board and care managers
of the four Farris homes, the beneficiaries themselves deny receiving monthly
therapy at the Respondent's office. I.G. Ex 88 at 119; I.G. Ex 94A at 56, 65,
71, 82, 92.
As to the argument that the Respondent mistakenly put the code for seeing
the patients in their home, instead of at his office, the board and care
managers, the report of investigation and statements of the patients prove
this not to be true. For example, Joyce Webster (I.G. Ex 5, 35, 50) and
Kathleen Marsh (I.G. Ex 3) both state they saw the doctor in his office only
once. Id.; I.G. Ex 93E at 34. Similarly, Richard Wright (I.G. Ex 8, 86),
Sandor Gardony (I.G. Ex 13, 56, 24) and Cornelius Adair (I.G. Ex 14, 55, 68),
all residents of 1206 Main Street, say they had never been to Reynaud's office
and did not know where it was located. Id. at 124; I.G. Ex 93E at 25; 94A at
56, 65-66, 71, 82, 92. Residents of 177 South 12th Street, including Ray White
(I.G. Ex 26, 42), Tim Fenton and Brian Gray (I.G. Ex 2, 30, 45, 79), state
that they had never been to Reynaud's office. I.G. Ex 88 at 120. Paul TerreIl
(I.G. Ex 61) said he went to the office once to get some papers signed.
Residents of 119 South 13th Street, including Joan Altknecht (I.G. Ex 28),
Deanna Wescott, Connie Sepulveda (I.G. Ex 4, 31, 46), and Ellen Alexion (I.G.
Ex 38, 53), deny ever seeing Dr. Reynaud in his office. Id. at 121.
Moreover, Dr. Reynaud admits that he saw his Medi-Cal patients for less than
the time claimed. While he represented on each claim that he had rendered 45
to 50 minutes of individual psychotherapy, the Respondent knew that he was
seeing the patients for far less time and some of the time in groups only.
When asked if he saw each patient in the board and care home for 45 minutes,
Dr. Reynaud replied "Ok, yes pretty close. Sometimes it's 30 minutes or,
but
yeah." I.G. Ex 87 at 8. The Respondent confessed, "I might see this
person 30
minutes one mon (sic), a month. Ok, I billed for 50 minutes, ah yeah. Now ok,
sue me." Id. at 25. The justification the Respondent offers for his billing
practices is that he is billing for the "total service" to the patient.
Id. at
15.
According to the Respondent, he considered the 50 minutes of individual
therapy to include consultation with the board and care home manager, dealing
with social service agencies, and reviewing medication orders. Id. at 7. In
addition, the Respondent claims to have accumulated brief visits with the
patient over the month. Id. at 19, 8. The Respondent stated that he did not
bill for the 15 or 25 minute sessions because ". .. I can't, I'm not set
up
for that. So I'll lump it." Id. at 20. The Respondent could submit a claim
for
15 minutes of psychotherapy as easily as a claim for 50 minutes. In fact, he
submitted one such claim for Agripena Vega. I.G. Ex 89 at 7. He elected not
to
do so in order to maximize his Medi-Cal payments. As Dr. Ryan observed,
billing for a brief visit involves considerably less reimbursement than a
claim for 50 minutes of individual therapy. Tr 2/13.
The evidence produced during the State's investigation of the Respondent
clearly proves that Dr. Reynaud knew he was filing false Medi-Cal claims. John
Shea's surveillance of Dr. Reynaud revealed that he would never spend more
than one hour per month at each of Freda Farris' board and care homes.
Interviews with other board and care home operators confirm that the
Respondent only visited their facilities once each month for no more than one
or two hours. I.G. Ex 88 at 49-51, 53, 55-63, 71, 73-74, 117-118. The
Respondent admitted that these monthly visits were for the benefit of the
board and care home in his role as a medical consultant. I.G. Ex 87 at 5-7,
11. During his monthly visits, the Respondent would collect the residents'
Medi-Cal stickers for the month. But, the Respondent stated: "that does
not
mean that is the treatment session, it merely makes it convenient for me to
get that Medi-Cal sticker at that time because if the patient comes here, for
instance, you see, no way are they going to give them that sticker." Id
at 11.
The I.G. proved, by clear and convincing evidence, that these monthly visits
to the homes were the only time the patients whose claims are the subject of
this action even had an opportunity to meet with the Respondent, except for
the three claims where the I.G. failed to prove that the Respondent did not
supply the services in his office on February 5, February 19 and February 20,
1980. Ms. Warr, manager of two of the Farris homes over the last ten years (Tr
1/148), explained that she made all medical appointments for her residents.
I.G. Ex 93D at 16; Tr 1/151, 167. All appointments were recorded on a monthly
calendar by Ms. Warr. Ms. Warr testified that she could not recall a resident
ever telling her he was going to Dr. Reynaud's office without an appointment.
Tr 1/155. In fact, she stated that only two residents, Karen Post and Carolyn
Finch, had ever seen the Respondent in his office, and they saw him a total
of
four times. Tr 1/163. For the months of November and December 1979,no
appointments for Dr. Reynaud were recorded. Tr 155; I.G. Ex 92.
Helen Barlow, manager of the Farris home at 13th Street, also testified
during the first criminal proceeding against the Respondent about his
treatment of patients in that home. Ms. Barlow confirms that the Respondent
came to the facility only once a month (I.G. Ex 93D/82) and spent fifteen to
thirty minutes with the group. Id. at 85. Like her counterpart, Ms. Warr, she
made all medical appointments for her residents and recalls making only one
appointment for an office visit to Dr. Reynaud. Id. at 85. As in the other
Farris homes, residents at the 13th Street facility were not permitted to make
their own medical appointments and were required to tell the manager if they
were going to see a doctor. No resident ever notified Ms. Barlow of a visit
to
the Respondent's office. Id. at 86. The same testimony was elicited from
Augusta Kennedy, Betty Mingus and Ollie Juarez, also managers of Farris board
and care homes during the relevant time. I.G. Ex 88 at 49-51, 69-72; I.G. Ex
93D at 116-119, 137-139. According to all three managers, Dr. Reynaud's visits
to the facilities occurred once a month (I.G. Ex 88 at 50, 71; I.G. Ex 93D at
121, 139), usually lasted less than one hour (I.G. Ex 88 at 51; I.G. Ex 93D
at
122, 140) and consisted of a group meeting (I.G. Ex 88 at 50-51, 71; I.G. Ex
93D at 121, 140). Residents never saw Dr. Reynaud at his office without an
appointment made by the manager (I.G. Ex 88 at 51; I.G. Ex 93D at 123, 141)
and none of the managers could ever recall making an appointment for Dr.
Reynaud. I.G. Ex 88 at 51, 71; I.G. Ex 93D at 123, 134, 142. Like the other
managers, Ms. Juarez reported seeing Dr. Reynaud take Medi-Cal stickers from
a
card of a resident who had not attended the monthly group session. I.G. Ex 88
at 74, 107; I.G. Ex 93D at 141. Furthermore, Shea corroborated the manager's
testimony by reviewing the appointment books used to record medical
appointments for the residents. Ms. Warr's appointment book contained only one
appointment with the Respondent during the eighteen-month period f January
1979 through July 7, 1980. This one appointment was for Carolyn Finch on
October 13, 1979.
I.G. Ex 88 at 67. Similarly, Ms. Barlow's appointment books showed only two
appointments with the Respondent ever made on behalf of individual residents
between January 1979 to April 16, 1980. Id. at 46.
Moreover, the Respondent failed to appear at the hearing by his own choice.
Because this is a civil proceeding and not "quasi-criminal," as argued
by the
Respondent, coupled by the fact that the Respondent failed to rebut the clear
and convincing evidence that the Respondent knowingly intended to defraud the
Medicaid program by appearing at the hearing, an inference can be made that
the Respondent's testimony would have been adverse. See footnote 12, supra.
See Daniel v. United States, 234 F. 2d 102, 106 (5th Cir. 1956). Although the
inference could be drawn, it is not necessary to do so in order to support my
findings and conclusions. My conclusion that the Respondent knowingly intended
to submit the false claims in issue and intended to defraud the Medicaid
program (Medi-Cal) is in part based on the conduct of the Respondent to cover-
up for his illegal acts when it became known to the Respondent that he was
being investigated; he attempted to get Ms. Warr and Freda Farris to cover-up
for his illegal acts. Tr 1/159, 160; I.G. Ex 88/63, 64, 116, 117, 93D/42, 43.
Also, I found Setseko Furuike, a psychiatric social worker with the State of
California (Tr 188 to 217), to be an extremely forthright and credible
witness. She testified that she reported the Respondent to John Shea, an
investigator for the California Medi-Cal Fraud Unit, because the Respondent
took a Medi-Cal sticker for a client of hers who lived in one of the Farris
board and care homes, when in fact the client refused to even see the
Respondent or any other doctor. She assisted John Shea in his investigation.
Tr/197. She was intimidated by the Respondent and lost respect for him.
Tr/220, 221. On the other hand, I found Mary Mason, although very accomplished
in her field, not to be a credible witness. She attempted to attack the
competency of several of the I.G.'s witnesses by way of bad reputation, bias,
or incompetency to recall facts because of alcoholism or sloppiness in
management of the Farris facilities and I did not accept her opinions abou
these witnesses because I found her to be biased; she winked at counsel for
the Respondent while being questioned and did not seem to be completely
forthright; in addition, she had little or no first hand knowledge of the
direct matters in issue in this case.
VII. The Amount of The Proposed Penalty (as Modified), Assessment (As
Modified), And Suspension Is Reasonable And Appropriate Under The
Circumstances Of This Case, Within the Meaning And Intent Of The Act And
Regulations
Having concluded that the Respondent is liable for a penalty, assessment,
and suspension in this case because the I.G. proved liability and intent to
defraud by clear and convincing evidence, I must decide the appropriateness
of
said proposed penalty, assessment and suspension.
I have already stated what the Act and Regulations provide and concluded
that the Respondent presented 82 false claims (I.G. Ex 2 to 86, excluding 7,
77, and 83). The maximum penalty, assessment and suspension which could be
imposed here are much greater than what the I.G. proposes. (See I.G. R Br at
p.14 to 19.)
A. There Exist Substantial Aggravating Factors
The Act and Regulations provide that in determining the amount or scope of
any penalty or assessment, the Secretary shall take into account: (1) the
nature of the claims and the circumstances under which false claims were
presented; (2) the degree of culpability, history of prior offenses, and
financial condition of the person presenting the claims; and (3) such other
matters as justice may require. Guidelines are provided for determining
appropriate assessments and penalties. See Regulations, Sec.101.106 The
Regulations require me to balance any aggravating against any mitigating
factors. The Regulations provide that, where there are substantial aggravating
circumstances, the amount of the penalty and assessment be set near or at the
maximum amount. The regulatory guidelines are not binding on the ALJ. To
determine the length of a suspension, the ALJ should consider the same
guidelines outlined in Regulations Secs.101.106, 101.107. The Regulations also
provide that these guidelines are not binding. Finally, the Regulations,
Sec.101.106(b) (4), provide that Respondent's resources will be considered.
I conclude that there exist many aggravating factors in this case. Many are
discussed earlier in this decision and listed in the Findings of Fact. As
noted, the Respondent billed for substantial sums and had a high degree of
culpability. The record demonstrates that the false claims in issue constitute
a small portion of a broad pattern or scheme to defraud the Medicaid program.
Only one of these aggravating circumstances need exist for the Respondent's
conduct to be deemed aggravating. The Inspector General has the burden of
proving the existence of any such aggravating factors by clear and convincing
evidence. 45 C.F.R. Sec.101.114(b).
Specifically, it has been proven that circumstances under which the claims
in question were presented by the Respondent were flagrant. This justifies the
imposition of a substantial penalty and assessment. The culpability of the
Respondent is so great that it is tantamount to criminal intent. Also, justice
requires that I consider both the Respondent's efforts to cover up his scheme
and his continued misconduct, notwithstanding his pending criminal charges.
I found and concluded that the Respondent submitted 82 false claims over a
three-month period. These claims are a large number for a small period of
time. Each claim sought reimbursement for 45 to 50 minutes of individual
psychotherapy, which is the highest reimbursable service for which the
Respondent could have billed. Yet, if any service was rendered, it was for
2-15 minutes of group therapy. I feel that this is a situation which calls for
the imposition of a penalty and assessment approaching the statutory maximum.
When the overall scheme devised by the Respondent is considered, the
imposition of a severe penalty and assessment is warranted. The Respondent
systematically undertook to defraud the Medicaid program. As Mary Hottal
testified, BSC relies on computers to audit claims for information which might
indicate the claim is false or inaccurate and the computer audit function
rejects any claims that are, on their face, incorrect or flags a provider who
claims to have more hours of service than the norm for his provider profile.
Tr 1/61-22. The Respondent's practice of falsely staggering the dates of
service on his billings throughout the month for beneficiaries seen on only
one day strongly suggests that he did so to avoid being caught. The Respondent
created billings for what appeared to be a normal work day, and so his
billings were unremarkable on their face.
While other psychiatrists in the area may not have been eager to accept
retarded and schizophrenic board and care residents as patients (I.G. 87 at
4), the Respondent discovered that, by accepting these individuals as
patients, while at the same time serving as program consultant to the board
and care home, he could obtain large sums of money for little effort. His
scheme was simple to implement and, to ensure that he had access to a volume
of Medi-Cal stickers, he created a financial incentive for the board and care
operators to elicit their cooperation. Deanna Corpuz and her husband owned and
managed two board and care homes in San Jose, located at 580 South Sixth
Street and 789 East San Carlos. I.G. Ex 88/53. When they needed a house
psychiatrist, Ms. Corpuz contacted the Respondent, who agreed to become the
house psychiatrist for the two Corpus facilities under the following
conditions: the Respondent would go to each facility once a month to see the
residents, monitor the residents' medication, and advise on program
enrichment;" in exchange, the Respondent would accept a Medi-Cal sticker
for
each resident who attended his group meeting. I.G. Ex 88/ 54-55. According to
Ms. Freda Farris, she and Dr. Reynaud initiated a business relationship in
1973, shortly after she acquired her Main Street facility. The Respondent
agreed to supervise the medical needs of the Main Street residents and conduct
a monthly meeting with them. Id./66. She retained the Respondent in order to
comply with the State licensing requirements that she have a program
consultant visit the facility and sign patient progress reports. She paid for
his services as consultant by giving him the residents' Medi-Cal stickers.
Id./ 68. Having established himself as a house consultant, the Respondent
implemented his practice of visiting each board and care home once a month,
collected his Medi-Cal stickers, talked to the manager, took care of his
duties to the facility (e.g., giving employees physical exams) chatted with
the residents who were preset and scheduled the next month's meeting. Id./
31,50. The Respondent took stickers for both the residents who attended these
monthly meetings and residents who did not. The Respondent would demand these
stickers, claiming he did not need to see all the residents each month. Tr
1/66-167; I.G. Ex 88/13,77. Also, the Respondent took stickers for those
residents who were not his patients; it was this latter situation which caused
Ms. Furuike to file the complaint against the Respondent. Tr 1/195-196; I.G.
Ex 88/ 1. The Respondent would combine the monthly meetings so that, rather
than holding two meetings, he would see the residents of two homes in one
meeting. I.G. Ex 87/5. The Respondent admitted to Investigators Shea and
Camacho that these monthly visits were for the benefit of the board and care
operator:
Dr. Reynaud: . . . when I go to this house . . . this isn't just for them
(patients).
Mr. Comacho: This is as a consultant?
Dr. Reynaud: But that the consulting, that's nothing to do with the
treatment of the patient per se.
I.G. Ex 87/8, 9.
A provider is not allowed to accumulate short sessions of 10, 15 or 30
minutes, and bill them as one 45-50 minute session. This is not only
established BSC policy (Tr 1/77-78), but reflects the view of the psychiatric
community. I.G. Ex 94B/3, 12. Assuming the Respondent was permitted to
accumulate a series of shorter sessions and represent them as one 50 minute
session, the evidence overwhelmingly establishes that he never conducted any
sessions of individual psychotherapy at the resident's home. The residents of
the Farris board and care homes did not see the Respondent either at his
office or at their residence (except for the monthly group meeting) except for
Kathleen Marsh. Tr 1/152, 154-155, 159, 163, 167, 205-26; I.G. Ex 88/46, 48,
50, 51. The Respondent told Ms. Warr that he was supposed to get a Medicare
sticker for each resident, whether seen by him or not, and he did not need to
see the patients every month. I.G. Ex 88/77. He also admitted to investigators
Shea and Camacho that he kept records of patient appointments with appointment
books and patient ledger cards, and identified one such appointment book. I.G.
Ex 87/9, 17. Yet, no appointment books were produced, despite repeated
requests for production by the I.G. He alleged that the books could not be
found.
Philip Yee, an investigator with the Medi-Cal Fraud Unit of the California
Department of Justice, calculated the amount Dr. Reynaud improperly received
for services allegedly provided to residents of six board and care homes.
Using the Respondent's provider payment history for the period of 1973 through
1980 (Resp. TT; Tr 2/21-22), and the statements of board and care managers
concerning the duration of his monthly sessions (I.G. 88), Yee determined the
amount Dr. Reynaud was entitled to be paid and the amount he was overpaid. Tr
2/24. For the six facilities audited, Dr. Reynaud was overpaid $92,500.00 as
a
direct result of his filing false claims. I.G. Ex 90; Tr 2/24.
An additional aggravating factor which justice requires be considered is the
attempt by the Respondent to interfere with the State Medi-Cal investigation.
When he became aware of the investigation, the Respondent called Ms. Warr and
asked her to tell investigators that, in addition to the monthly meetings at
her facility, he saw each resident individually for 45 minutes to an hour and
told her Freda Farris, her boss, was going along with the cover-up. Tr 1/159-
160; I.G. Ex 88/63-64. The Respondent also contacted Ms. Farris and asked her
to cooperate in the cover-up. When Ms. Farris told him she did not want to
jeopardize her license, the Respondent blurted that the State would have his
license. Id. 116-117
In addition, the Respondent continued to file fraudulent Medi-Cal claims
after his scheme had been uncovered and he had been indicted on eleven counts
of presenting false claims and grand theft. This is evidenced by yet another
complaint that the Respondent had taken Medi-Cal stickers of beneficiaries who
were not his patients. The subsequent investigation revealed that the
Respondent had not even modified his practice or scheme. Thus, a second
criminal complaint was filed against the Respondent, which resulted in his
conviction on charges of filing false Medi-Cal claims.
B. Rebuttal
In rebuttal, the Respondent offered the testimony of Mary Mason, who is the
owner/operator of two board and care homes in San Jose. Tr 4/20. A total of
nineteen Medi-Cal beneficiaries live at her homes. Tr 4/58. According to her,
the Respondent spent five hours each month at each of her two facilities. Tr
4/59. He allegedly saw every resident individually during his monthly visit
to
the home, in addition to 45 to 50 minutes of individual psychotherapy at his
office. Tr 4/60, 62. Ms. Mason claimed to be able to say precisely how long
Dr. Reynaud spent with her clients because she claimed to have kept records
of
the time he spent at the monthly facility meetings (Tr 4/63), timed the office
visits (Tr 4/62,66), and kept a record of his appointments. Tr 4/66-67. The
only other board and care operator who takes the position that the Respondent
routinely treated residents at his office, in addition to his monthly visit
to
the home, is Ms. Mildred Jordan, the owner/ operator of Jordan Hall, located
at 97 South 13th Street, San Jose. I. G. Ex 88/62. According to Ms. Jordan,
the Respondent had been the "house doctor" since 1970 or 1972 and
conducted
monthly meetings, of an hour or two with all the residents. Id. Ms. Jordan
claimed to have maintained a record of these monthly meetings.
Id. 62-63. When interviewed by investigator Shea, Ms. Jordan volunteered
that her clients also walked to Dr. Reynaud's office where they saw him
individually for forty-five minutes to one hour. Id. 63. Although she didn't
attend these office sessions and didn't have any record of the appointments,
Ms. Jordan could remember how long each session was "because her clients
told
her how long they took." Id. While the Respondent claims that these clients
are credible witnesses, he argues that the clients of the Farris homes are not
because they are retarded or schizophrenic.
The description of the Respondent by Ms. Mason and Ms. Jordan is quite a
contrast to the description given by social workers, the owners/ operators and
managers of other residential facilities, and his own patients. This creates
serious doubt as to the accuracy and veracity of the testimony of both Ms.
Mason and Ms. Jordan. For example, while all other managers say the Respondent
came to their facility once a month on a prearranged date (I.G. Ex 88/13, 27,
44, 47, 49, 50, 53, 58, 60), according to Ms. Mason, he would drop in
throughout the month "for an hour, hour and a half and we wouldn't know
that."
Tr 4/61. While Ms. Jordan says the Respondent saw each one of the Jordan hall
residents in his office for one hour of individual psychotherapy every month
(I.G. Ex 88/63), the subsequent managers of that facility, Terry Moritz and
Joan See, testified that from August through December 1981, only three
residents went to the Respondent's office. I.G. Ex 94A at 21. Each of the
three went to the office only once, and only two actually saw the doctor.
Id./23-24, 38-39. Ms. Mason told investigator Shea that she didn't keep a
record of the visits to the Respondent's office (I.G. 88/59), but when she
testified at the hearing, she stated that she recorded the appointments on a
calendar. Tr 4/67. She also stated that her residents made their own
appointments with Dr. Reynaud (Tr 4/68.). The manager of the 457 North 5th
Street facility, Ms. Davis, told investigators that Mary Mason made the office
appointment. Id. at 51; I.G. Ex 88 at 85. Ms. Davis also stated that the
residents returned from their rehabilitation projects at approximately 4:00
p.m. and the Respondent usually came to the facility between 4 and 6 p.m. Id.
This is more consistent with his general pattern. Yet, Ms. Mason testified
that the Respondent spent from 1 p.m. to 6 p.m. at each facility with the
residents. Tr 4/59. Also she testified that the Respondent's monthly visit to
the facility was held not to meet with her, but to talk to the residents. Tr
4/57. s. Mason denied that the Respondent spent several hours going over the
facility program with her. Tr 4/71. Yet, when interviewed by Mr. Shea in 1980,
she said the Respondent had been the facility program coordinator for eight
or
nine years and that she met with him once a month for one to two hours to
discuss her program and client problems. I.G. Ex 88/57.
In addition to her testimony revealing inconsistencies, it reveals a strong
bias in favor of the Respondent. While such a bias might be ascribed to a
professional respect for the Respondent, I ascribe a different motivation; Dr.
Reynaud was serving as her program consultant for several hours each month;
while he generally charged $75 per hour for his services, (I.G. Ex 87/23), Ms.
Mason received free services for a long period of time, even though she no
longer does. Tr 4/70.
The Respondent asserts that the investigators did a sloppy job and that Ms.
Furuike was biased against him. I find to the contrary; the investigators did
a thorough job and lent much credible evidence to this case. While Ms. Furuike
may have strong feelings against the Respondent, it is understandable and does
not detract from her credibility because, as she testified:
As a social worker, you learn to respect doctors, especially psychiatrists
and somehow they become on a pedestal. An it's very difficult - it was very
difficult for me to question anything a psychiatrist was doing. It was also
very difficult for me to accept the fact that some - a psychiatrist who I -
a
position that I hold in great esteem - would be doing something to me, very
heinous and really a detriment to people who are helpless.
Tr 1/221.
C. There Exists Only One Mitigating Factor
The Respondent has the burden of proving by a preponderance of evidence any
mitigating circumstances. Sec.101.114(a). The Respondent argues that I should
conclude that there exist mitigating factors in this case. He asserts that the
services on the 85 claims constitute only a tiny portion of the Respondent's
other activities. He asserts that no harm resulted from the false claims
inasmuch as the services were actually "provided," and that the claims
were
not harmful to the patients. He asserts that to the extent he made false
claims, it was in large measure due to error in using the codes. Finally, he
asserts that he has a high standard of respect in the psychiatric community,
that he is one of the few psychiatrists competent and willing to treat
retarded people in the San Jose area, and he has already made restitution in
the State Court.
While I can sympathize with the Respondent's embarrassment or chagrin over
being subject to penalty, assessment and suspension herein and I find that he
does share a good reputation for his competency in the psychiatric community,
it is obvious that his contempt or arrogance of the myriad rules and
restrictions of the Medicaid system or plain greed caused him to engage in an
intentional scheme to get around the system that would not allow him to be
paid for certain of the services he thought necessary for treatment that he
provided to the board and care homes and the residents therein. As a result,
he filed 82 false claims in a short period of time.
Moreover, the circumstances cited by the Respondent as mitigating are not
mitigating or are so outweighed by the aggravating circumstances that the
Respondent should consider himself fortunate to pay the amount proposed (less
adjustments for the three claims found by me not to be false). However, there
is one mitigating circumstance that I have considered, i.e., the claim (I.G.
Ex 3) filed on behalf of Kathleen Marsh. The Respondent provided the services,
but put the wrong date (November 29 instead of November 20). Although
technically the claim is a false claim, there was no intent to defraud and the
Respondent provided the service at another date (i.e., November 20).
Accordingly, there are a total of four claims out of the 85 claims in issue
that will be deemed not to be intentionally filed false claims.
D. The Assessment, Penalty And Suspension Are Supported By The Record In
This Case (After Modifications).
The I.G. requests that I order penalties of $85,000, assessments of
$3,016.38 [FN22], and a suspension for five years from Medicare and Medicaid
programs.
I conclude that the Respondent shall be subject to penalties of $81,000 (82
false claims and I claim found to be a mitigating circumstance) [FN23] and
shall be suspended from participating in the Medicare and Medicaid programs
for a period of five years.
The purpose of the assessments are to enable the United States to recover
the damages resulting from false claims; this includes the reimbursement
actually paid to the Respondent and the costs of investigating and prosecuting
his unlawful conduct. The assessments are "in lieu of damages." The
assessments enable the United States to recoup damages without having to
assume the burden of establishing actual damages. 48 Fed. Reg. 38831 (Aug. 26,
1983).
The penalties are intended to serve as a deterrent to future unlawful
conduct by a particular Respondent or by other participants in the Medicare
or
Medicaid programs. In its report on the Act, the House Ways and Means
Committee found that "civil money penalty proceedings are necessary for
the
effective prevention of abuses in the Medicare and Medicaid program. . . ."
H.R. Rep. No. 97-158, 9th Cong., 1st Sess. Vol. III, 327, 329. I conclude that
penalties of $81,000 are a sufficient deterrent to the Respondent.
Section 101.107 of the Regulations requires the same criteria used in
determining assessments and penalties be considered in determining the length
of any suspension imposed, including the presence of aggravating and
mitigating factors; the purpose of the suspension is deterrence and protection
of the Medicare and Medicaid programs. 48 Fed. Reg. 38832 (Aug. 26, 1983). A
five year suspension in this case is also a sufficient deterrent to the
Respondent.
There are many aggravating circumstances in this case which are discussed
above. The Respondent was found to have engaged in a scheme to unlawfully
secure Medicaid funds, to have attempted to cover up his scheme and to have
contempt for the law by continuing to engage in a practice that had already
resulted in indictments against him. This is a case where a strong deterrent
is required. The Respondent is fortunate that the maximum penalties and
assessments were not imposed and that he was not suspended for a greater
length of time.
ORDER
Based on the evidence in the record and the Act and Regulations, it is
hereby Ordered that the Respondent:
(1) Pay penalties of $81,000:
(2) pay assessments of $2,776.38; and
(3) be, and hereby is, suspended from the Medicare and Medicaid programs
for a period of five (5) years from the date of this Decision and Order.
Charles E. Stratton
FN1. Both sections 1128A and 1128(c) of the Social Security Act are codified
in sections 1320a-7a and 1320a-7(c) of Title 12, U.S.C., and are part of
section 2105 of the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 97-35,
enacted on August 13, 1981), as amended by section 137(b) (26) of the Tax
Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-248). Section 1128(c)
was formerly section 1128(b), and was redesignated as a result of amendments
to section 1128 in the Deficit Reduction Act of 1981 (Pub. L. 98-369
Sec.2333(a) (1)). All references to the Act hereinafter refer to the codified
sections.
FN2. The Regulations were approved on July 27, 1983, and became effective on
September 26, 1983. See 48 Fed. Reg. 38827 et seq. (August 26, 1983).
FN3. Section 1320a-7a(a)(1) of the Act defines a false or improperly filed
claim to be a claim for an item or service which the person knows or has
reason to know was not provided as claimed.
FN4. Section 1320a-7a(h)(2) of the Act and Sec.101.101 of the Regulations
define a "claim" as an application for payment submitted for an item
or
service for which payment may be made under the Title XVIII (Medicare), Title
XIX (Medicaid) or Title V (Maternal and Child Health Services Block Grant)
programs.
FN5. Section 1320a-7a(h)(3) of the Act and Sec.101.101 of the Regulations
define an "item or service" to include any item, device, medical supply
or
service claimed to have been provided to a patient and listed in an itemized
claim for payment.
FN6. In arriving at these Findings and Conclusions, I examined each of the
proposed findings and conclusions offered by the parties. I rejected some
because they were not supported by the record, others because they were not
material, and some I have incorporated elsewhere in this Decision.
FN7. References to record Exhibits, Stipulations and the Transcript are as
follows: Respondent's Exhibit = R Ex/(page number) I.G. Exhibit = I.G.
Ex/(page number) Joint Exhibit = J Ex/(page number) Transcript = Tr
(volume/page number) Stipulations = Stip. (number)
FN8. "RB" references are to the Respondent's brief. "RRB"
refer to the
Respondent's reply brief. "I.G.B" references are to the I.G.'s brief.
"I.G.RB"
references are to the I.G.'s reply brief.
FN9. The predecessor law in effect prior to August 13, 1981, was and still
is,
the civil False Claims Act, 31 U.S.C. Sec.231 et seq., (amended or reworded
slightly on September 13, 1982 and recodified as Sec.3729); the False Claims
Act has been in effect since 1865. The criminal portion of the False Claims
Act is found at 18 U.S.C. Sec.287 et seq. All references in this Decision and
Order are to the civil False Claims Act.
FN10. Generally, the right to a jury trial is provided by the 6th Amendment
to
the Federal Constitution. See United States v. State of New Mexico, 642 F. 2d
397 (10th Cir. 1981).
FN11. 42 U.S.C. Sec.1320 a-7(c) reads: Whenever the Secretary makes a final
determination to impose a civil monetary penalty or assessment . . . . under
section 1128A relating to a claim under Title XVIII (Medicare) or XIX
(Medicaid), the Secretary (1) may bar the person from participation in the
program under title XVIII, and (2) ***may require (appropriate state
agencies) to bar the person from participation in the program established (In
spite of the fact that a quick literal reading of the preamble to the
Regulations seems to require a strict False Claims Act standard with no
suspension, under title XIX).
FN12. It should be noted that the reason the Supreme Court held that the Self-
Incrimination Clause of the Fifth Amendment did not apply in Ward was because
the federal statute specifically provided that any information obtained "shall
not be used against any such person in any criminal case." Here, there
is no
such protection. Thus, I agree with the Respondent that this privilege is
applicable here if a person could show that the information requested would
prejudice them in respect to later or current criminal proceedings; it is not,
however, a blanket privilege and must be determined on a question by question
basis. There was no attempt made by the Respondent to testify on his own
behalf, so this privilege, although raised by the Respondent's counsel, was
never actually invoked by the Respondent.
FN13. Actual knowledge of the falsity of a claim is not required to sustain
a
criminal conviction under 18 U.S.C. Sec.1001 (false statements) or 18 U.S.C.
Sec.237 (false claims). The conviction will be sustained on showing that the
defendant had a "reckless disregard" for truthfulness and a "conscious
purpose" to avoid learning the truth. United States v. Evans, 559 F. 2d
244
(5th Cir. 1977); United States v. Restrepo-Granda, 575 F. 2d 524 (5th Cir.
1978) (willful ignorance of importing a controlled substance); United States
v. Cook, 586 F. 2d 572 (5th cir. 1978).
FN14. In reading United States v. Cooperative Grain and Supply Co., supra,
an
Eighth Circuit case, the Court held that proving extreme negligence (i.e.,
reckless disregard for the truth) is tantamount to providing intent and the
Court implied that the degree of negligence required to permit the government
to recover under the False Claims Act is the same as that which a plaintiff
must prove in a common law action for negligent misrepresentation. Also, the
standard of proof necessary to prevail on the basis of a civil fraudulent
claim is "clear and convincing evidence." Hageny v. United States
570 F. 2d
924, 933-934 (Ct. Cl. 1978).
FN15. The I.G. has clearly established that it was the practice of the
Respondent to have residents of nearby facilities gather together at one
facility and conduct only one meeting per month at one of the two nearby
facilities.
FN16. Id.
FN17. Id.
FN18. Id.
FN19. Id.
FN20. Id.
FN21. See Inspector General's Discovery Motion, dated May 8, 1985; supplement
to April 23, 1985 Revised Order, dated May 24, 1985; Inspector General's
Motion to Compel Discovery, dated June 7, 1985; Request to Produce a Witness
for Examination, dated June 7, 1985; Tr. 1/23. See Respondent's Objection to
Notice to Appear and Produce Documents, dated June 17, 1985; prehearing Order,
dated June 13, 1985.
FN22. Originally the I.G. proposed assessments of $5,000. See I.G. RB/14 to
15.
FN23. Since I am unable to calculate the amount paid, I will deduct the amount
claimed on each of the four claims, i.e., $60.
END OF DOCUMENT