Narenda Khurana, M.D., DAB CR6 (1986)

Department of Health and Human Services (H.H.S.)
Departmental Appeals Board

Civil Money Penalty

THE INSPECTOR GENERAL
v.
NARENDRA KHURANA, M.D., RESPONDENT
Docket No. C-11 (CIVIL MONEY PENALTIES, ASSESSMENTS, AND SUSPENSION PROPOSED
PURSUANT TO SECS.1128A AND 1128(C) OF THE SOCIAL SECURITY ACT)
Decision No. CR6
March 14, 1986

DECISION AND ORDER

This is a civil money penalties, assessments, and suspension case arising
from (1) a determination by the Inspector General (I.G.) of the Department of
Health and Human Services (DHHS) that the Respondent submitted false or
improper Medicare 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 their implementing federal regulations (45 C.F.R.
Secs.101.100 et. seq.) (Regulations), and (2) a request for a hearing filed by
the Respondent in accordance with section 101.109(b)(2) of the Regulations.
[FN1] [FN2]

THE LAW AND REGULATIONS

Section 1320a-7a (Sec.1128A) 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) (Sec.1128(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; 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, if found liable. 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. There are differences in
the Act and Regulations for claims presented to and received by the Medicare
program prior to the effective date of the Act (August 13, 1981), versus
claims presented and received on or after that date.
A) False Claims Presented And Received By The Medicare Program Before August
13, 1981.
For false claims presented and received for to the effective date of the Act
(i.e., August 13, 1981), the amount of the civil money penalties and
assessments, and the burden of proof are governed by the provisions of the
False Claims Act (31 U.S.C. Sec.3729 et. seq.) by reason of sections 101.103,
101.104 and 101.114(b) of the Regulations. [FN3] The maximum penalty is $2,000
for each false claim, the assessment is limited to twice the amount of damages
sustained by the Federal Government, plus costs, and the I.G. has to prove
liability by clear and convincing evidence.
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.
The civil False Claims Act, 31 U.S.C. Sec.3729, authorizes:
. . . a civil penalty of $2,000, an amount equal to 2 times the amount of
damages the Government sustains . . . and costs of the civil action, if the
person1) knowingly presents or causes to be presented . . . false or
fraudulent claim for payment or approval; (or) 2) knowingly makes, uses, or
causes to be made or used, a false record or statement to get a false or
fraudulent claim paid or approved . . .
The Regulations implementing the Act have the force and effect of law. The
Regulations provide for the retrospective application of the Act to claims
filed by a respondent before the effective date of the Act (August 13, 1981).
But, section 101.132 of the Regulations provides that the I.G. must commence
an action (by sending a notice of determination to a respondent) within five
(5) years "from the date on which the right of action occurred." This
retrospective application of the Act by the Regulations is consistent with the
Act because the Act's legislative history suggests that retroactive treatment
be accorded. Also, the Regulations provide certain guarantees that protect
respondents from overreaching. 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
(1978). * * * * * * There is some indication in the legislative history that
Congress intended (the Act to be applied retrospectively).
48 Fed. Reg. 38828 (August 26, 1983).
But, even though 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,
section 101.114(b) of the Regulations goes much further than the Act and the
preamble and guarantees that (1) (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 which could have been imposed under the predecessor
statute, the False Claims Act, and (2) the I.G.'s burden of proof is the same
as it would be if he were proceeding under the False Claims Act. Accordingly,
the only real change the Act and Regulations make for pre-August 13, 1981
claims is a change in forum, (i.e., the case is heard by an ALJ instead of a
District Court). The retroactive change of forum is consistent with (1) the
rule that statutory changes that are basically procedural or remedial apply
retroactively, and (2) the rule that Congress may change the tribunal from a
Federal District Court to an administrative forum without violating
Constitutional or substantive rights. See, United States v. Ward, 448 U.S. 498
(1980); Zenith Radio Corp. v. United States, 437 U.S. 443, 450 (1978); Atlas
Roofing Co. v. Occupational Safety and Health Commission, 430 U.S. 442 (1977);
Hallowell v. Commons, 239 U.S. 506, 508 (1916); United States v. J. B.
Williams Co. 498 F. 2d 414, 421 (2nd Cir. 1979); see also, 29 U.S.C. Sec.651,
et. seq.
In summary, for claims presented prior to August 13, 1981, the Act and
Regulations limit the amount of civil money penalties and assessments to those
amounts that could have been recovered under the False Claims Act, provide the
same burden of proof as does the False Claims Act, and provide for a hearing
before an ALJ, rather than a proceeding in a Federal District Court.
B) False Claims Presented To And Received By The Medicare Program On Or
After August 13, 1981.
For false claims presented and received on or after August 13, 1981, the
maximum penalty is $2,000 for each false item or service listed on each claim,
the assessment is twice the amount claimed on each claim and the I.G. must
prove by a preponderance of the evidence that the Respondent presented or
caused to be presented any false claims. Regulations Secs.101.103, 101.104,
101.114(a).
C) Suspension From Medicare and Medicaid Program Participation Is
Appropriate Only If Liability For Civil Money Penalties Or Assessments Is
Proven.
Suspension from program participation may seem, at first blush, to be the
same for both pre and post-August 13, 1981 claims. [FN4] Simply stated,
suspension is never triggered unless liability for civil money penalties or
assessments is found to be proven. Section 101.107 of the Regulations provides
that the same factors used to determine liability and amount of liability are
used to determine suspension and length of suspension. So, in order to find
liability for pre-August 13, 1981 claims, the False Claims Act standard and
burden of proof are used; to find liability for post-August 13, 1981 claims, a
different standard and a lesser burden of proof are used. Thus, suspension
based upon pre-August 13, 1981 versus post-August 13, 1981 claims is different
in that differing burdens of proof apply.
D) Mitigation.
Section 101.114(d) of the Regulations provides that the Respondent shall:
bear the burden of producing and proving by a preponderance of the
evidence any circumstances . . . that would justify reducing the amount of the
penalty or assessment, or the period of suspension.
This burden applies to pre-August 13, 1981 claims as well as to claims
received by the Medicare program on or after August 13, 1981.
E) The Medicare Program and Reimbursement Procedures.
Title XVIII of the Act (42 U.S.C. Sec.1395, et. seq.) establishes a program
of Health Insurance for individuals who are age 65 or older or disabled
persons. This program, known as Medicare, basically consists of Part A, which
is not at issue in this case, and Part B, which is in issue here. [FN5] Part B
provides a voluntary subscription program of supplementary medical insurance
covering, in general, 80% of the reasonable charges for physician services, x-
rays, laboratory tests, and medical supplies. 42 U.S.C. Secs.1395k, 1395r and
1395x(s). Benefits under Part B are financed from the Federal Supplementary
Medical Insurance Trust Fund (funded by appropriations from the Treasury and
by premiums paid by individuals who choose to enroll in the Part B program).
42 U.S.C. Secs.1395j, 1395r, 1395s, Secs.1395t(a) and 1395t(g), and 1395w. See
generally, Schweiker v. McClure, 456 U.S. 188, 189-190 (1982).
To make the administration of the Part B program more efficient, Congress
authorized the Secretary of DHHS to contract with entities known as "carriers"
to perform designated functions. 42 U.S.C. Secs. 1395u, 1395u(f); 41 C.F.R.
Sec.421.200. Carriers perform a variety of functions as agents or contractors
of the Secretary, such as determining the rates and amounts of payment for
covered services, and processing and paying claims. 42 U.S.C. Sec.1395u. Blue
Cross/ Blue Shield (BC/BS) was the Medicare carrier for DHHS at all times
relevant to this action.

JURISDICTIONAL AND PROCEDURAL BACKGROUND

The Deputy I.G. for Civil Fraud notified the Respondent, a physician
practicing medicine from two locations in New York City from 1976 to 1984, by
letter dated February 8, 1985, of the I.G.'s intent to impose civil money
penalties and assessments against him in the amount of $150,000 and to suspend
him from participation in the Title XVIII (Medicare) and Title XIX (Medicaid)
programs for a period of ten years. The I.G.'s notice of intent was based on a
determination that between period February 1, 1980 and April 11, 1983, the
Respondent had presented or caused to be presented 100 false or improperly
filed claims for Medicare payment for 180 services that were not provided as
claimed, in violation of the Act and Regulations. [FN6] [FN7] [FN8] Of the 100
claims in issue here, 53 were received prior to August 13, 1981, the effective
date of the Act (i.e., from February 10, 1980 through August 12, 1981) and 47
claims were received on or after the effective date of the Act, (i.e., from
August 13, 1981, to April 11, 1983). In response, by letter dated March 7,
1985, 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 Washington, D.C., on June 18, 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. At the prehearing conference, the I.G. agreed that for the 53
claims presented by the Respondent prior to the effective date of the Act
(i.e., August 13, 1981), the maximum penalty can only be $2,000 for each false
claim presented and not for each false item or service presented.
As a result of a request by the Respondent, no objection by the I.G., and
for reasons of judicial economy, the June 14, 1985 Order and Summary of
Prehearing Proceedings stated that this case was consolidated with an
additional case involving the Respondent (identified as Docket No. C-12) for
purposes of hearing both cases during the same week; the Order also stated
that the hearing would be bifurcated and that two separate decisions would be
issued. [FN9] Accordingly, in view of the differing factual and procedural
considerations, the hearing was conducted in two distinct parts; the first
part involved Docket No. C-12, the Sec.1128(a) suspension, and the second part
involved this case, the civil money penalties, assessments, and section
1128(c) suspension. However, evidence entered into each record may be used in
either case.
The Respondent moved for an indefinite adjournment, or continuance, of the
hearing in this case and in Docket No. C-12 (prior to the hearing and again at
the hearing) on the grounds that the Respondent would seek (on the basis of
new evidence) to overturn the conviction upon which the I.G. based his
mandatory suspension in Docket No. C-12 and which the I.G. cites as an
aggravating circumstance in support of the I.G.'s proposed penalties,
assessments and suspension in this case. The I.G. objected to the motion. I
denied the Respondent's motion on August 19, 1985 verbally and issued a
confirmation of said verbal order on August 20, 1985. I denied the motion a
second time, at the hearing, on September 11, 1985. My reasons for denying the
Respondent's motion were: First, this case would be reopened and Docket No. C-
12 would be overturned if the Respondent was successful in overturning his
guilty plea in State Court because the I.G. is required to "reinstate a party
whose conviction has been reversed or vacated" Regulations Sec.420.136(a).
Next, the requested period of continuance and likelihood of success was too
indefinite. Finally, the Respondent had not yet even begun to attempt to
overturn his conviction in State Court (TR II/10 to 20). See, Michienzi v.
Harris, 634 F 2d 345 (6th Cir. 1980).
A formal hearing was held in this case in New York City from September 10,
1985 through September 13, 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. Seven witnesses testified on behalf of the I.G. and no witnesses
testified on behalf of the Respondent. The I.G. presented a post-hearing
brief, proposed findings of fact and conclusions of law and a reply brief. The
Respondent submitted only a post-hearing brief. [FN10]

ISSUES

The principal issues are:
1) Whether the I.G. proved by clear and convincing evidence that the
Respondent knowingly presented or caused to be presented claims for Medicare
payment, for services that were not provided as claimed, from February 10,
1980 to August 12, 1981, in violation of the Act and Regulations.
2) Whether the I.G. proved by a preponderance of the evidence that the
Respondent knowingly presented or caused to be presented claims for Medicare
payment, for services that were not provided as claimed, from August 13, 1981
to April 11, 1983.
3) Whether the Respondent proved by a preponderance of the evidence any
circumstances that would justify reducing the amount of the penalty,
assessment, or the period of suspension proposed in this case by the I. G.
4) 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 and submissions of the
parties, and being advised fully herein, I make the following Findings of Fact
and Conclusions of Law: [FN11] [FN12] [FN13]
1. For the purposes of these proceedings, I have taken judicial notice of
the statutes of the United States, the Regulations of the Secretary of DHHS,
all other pertinent Regulations of the United States, the statutes of the
State of New York, the Regulations of the New York State Department of Social
Services, and all other pertinent Regulations of the State of New York as they
existed at the time of the cause of action. Stip. 1, 2; TR II/5. [FN14] [FN15]
2. The Secretary delegated to the I.G. the authority to take action under
sections 1128A and 1128(c) of the Act pursuant to delegations of authority
dated April 18, 1983, July 27, 1983, April 18, 1983, September 15, 1983, and
September 26, 1983; see also, delegation of April 18, 1983 (48 Fed. Reg.
21662) (May 13, 1983) and May 6, 1983. Stip. 3 to 8; TR II/5, 6.
3. The DHHS has been authorized by the Department of Justice to proceed
with this administrative action. Stip. 10; TR II/6.
4. The New York State Department of Social Services is the State Medicare
Agency for the State of New York. Stip. B.1; TR II/7.
5. Blue Cross and Blue Shield (BC/BS) of Greater New York State was the
fiscal agent (carrier) for the Medicare program in New York during all times
relevant to this action. Stip. B.2; TR II/7.
6. Dr. Narendra Khurana is the Respondent in this case and was a provider-
participant in the New York State Medicare program during the period of time
relevant to this action. Stip. B.3; TR II/7.
7. BC/BS of Greater New York provided participants with and utilized
procedure codes found in the "Blue Cross and Blue Shield Medicare Part B
Prevailing Charges For All Covered Services" manual for submitting claims for
physician services during the time period relative to this action. Stip. B.4;
TR II/7; I.G. Ex 98.
8. The health insurance claim forms in evidence in this case are authentic
and genuine copies of claim forms which the Respondent submitted, or caused to
be submitted for payment under the Medicaid Program. Stip. B.5; TR II/7; I.G.
Ex 12 to 81, 99 to 112, 125 to 149.
9. On February 8, 1985, the Inspector General (I.G.) notified the
Respondent that the I.G. was proposing penalties, assessments and a suspension
based on the I.G.'s determination that from February 10, 1980 through April
11, 1983, Respondent had submitted or caused to be submitted one hundred (100)
claims for Medicare reimbursement for at least 180 services which the
Respondent knew or should have known were not provided as claimed. I.G. Ex 9.
10. The parties stipulated that the chart attached to the I.G.'s February
8, 1985, Notice of Proposed Determination in this action is a true and
accurate summary of the claim number, date of service, the procedure claimed,
and the amount paid to the Respondent on each of the claims in evidence in
this case. Actually, the chart shows the date the claim was received by the
carriers, which is apparently what the parties meant by "date of service."
Stip. B.6; TR II/7, 8; I.G. Ex 9.
11. The parties stipulated that the Respondent received payment from BC/BS
as specified in the I.G.'s February 8, 1985 letter, as reimbursement for the
one hundred (100) claims which he submitted or caused to be submitted and
which are in issue in this case. Stip. B.7; TR II/8.
12. On February 24, 1983, the Respondent pled guilty in the Supreme Court
of New York, County of New York, to One Count Grand Larceny in the Third
Degree and one count of Offering a False Instrument for Filing in the First
Degree. This plea was in satisfaction of an indictment charging him with 82
counts of Offering a False Instrument for Filing in First Degree and One Count
of Grand Larceny in the Third Degree. I.G. Ex 1. The indictment was based upon
evidence that the Respondent filed various Medical Assistance Practitioner
Claim Forms for reimbursement through the New York State Medicaid program in
which he claimed that services had been provided to patients when, as he knew,
the services had not been provided as claimed. Stip. B.8; TR II/9; I.G. Ex 2,
3.
13. On February 27, 1983, the Respondent was fined $5,000 for each count
on which he was convicted, for a total of $10,000, and ordered to pay
restitution of $55,000 plus $10,000 interest fora total of $65,000. Stip. B.9;
TR 11/9.
14. As the carrier for Medicare, BC/BS receives, reviews and processes
claims (and reviews procedure codes listed) for care rendered to Medicare
beneficiaries by providers of services. TR II/33-36.
15. To ensure compliance with its procedures, BC/BS routinely issues
educational bulletins to participating physicians. These bulletins, entitled
"Fast Facts," include information on Medicare law as well as procedure codes.
TR II/46.
16. As a provider participant in the Medicare program, Respondent would
have received these monthly bulletins. TR II/46.
17. Procedure code 1060 is defined as an injection of medication into a
joint, ligament, tendon or tendon sheath. Single or multiple injection into
one structure or site excluding interphalangeal, metacarpophalangeal or
metatarsophalangeal joints. I.G. Ex 98/3.
18. Procedure code 9021 is defined as an office visit. I.G. Ex 98/2.
19. Procedure code 9024 is defined as a reevaluation exam. I.G. Ex 98/ 2,
TR II/61.
20. Procedure code 9023 is defined as an extended office visit. An
extended visit requires that the patient have a one-to-one relationship with
the physician for a period of 30 minutes or more. TR II/45; I.G. Ex 98/2.
21. Each claim submitted to Medicare is supposed to contain the name of
the patient, patient health insurance claim number, sex, mailing address,
signature of the beneficiary, date signed, date of service, place of service,
description of the procedure provided, diagnosis, charge for each of the
services, name and address of the provider and the provider's code number. TR
II/36.
22. The provider is also required to sign the claim, certifying that all
the information on the billing form is true, accurate and complete. The
certification reads "A physician's signature certified that a physician's
services were personally rendered by the physician or under the physician's
personal direction." TR II/38; I.G. Ex 147.
23. For each of the Medicare claims subject to this action, the Respondent
certified as indicated in FFCL/21, 22. Stip. B. 6.
24. BC/BS received telephone calls from patients complaining that the
Respondent was submitting claims to Medicare for services that the patients
did not receive. TR II/51, 54, 55.
25. The patients that testified complained that the Respondent had them
sign extra blank claim forms when they entered his office. TR II/ 90, 159,
160, 162; TR III/8.
26. The patients that testified received remittance statements for days
they did not see the Respondent. TR II/94, TR III/120; I.G. Ex 87.
27. The Inspector General proved by clear and convincing evidence that the
Respondent submitted or caused to be submitted twenty-two (22) claims for
reimbursement in which the Respondent represented that he provided services to
Catherine Arrington knowing that one or more of the services on each claim
were not provided as claimed.
a. The Respondent's claim (I.G. Ex 125) that he gave Ms. Arrington a
shoulder injection on January 8, 1979 was false because he never gave her an
injection in her shoulder. TR II/93, 97, 99, 102, 103, 104; I. G. Ex 125; I.G.
Ex 9/5.
b. The Respondent's claim (I.G. Ex 126) that he gave Ms. Arrington a
shoulder injection on January 10, 1979 was false because he never gave her an
injection in her shoulder. TR 11/93, 97, 99, 102, 103, 104; I. G. Ex 126; I.G.
Ex 9/5.
c. The Respondent's claim (I.G. Ex 128) that he gave Ms. Arrington two
shoulder injections on January 16, 1979 was false because he never gave her an
injection in her shoulder and never gave her more than one injection the same
day. TR II/93, 97, 102, 103, 104; I.G. Ex 128, I.G. Ex 9/5.
d. The Respondent's claim (I.G. Ex 129) that he gave Ms. Arrington an
electrocardiogram, or EKG, on January 16, 1979 is false because he never gave
her an EKG. TR II/90, 97, 104, 121; I.G. Ex 129; I.G. Ex 9/5.
e. The Respondent's claim (I.G. Ex 130) that he gave Ms. Arrington a
shoulder injection in addition to another injection on January 24, 1979 is
false because he never gave her an injection in her shoulder and never gave
her more than one injection the same day. TR II/93, 97, 99, 102, 103, 104;
I.G. Ex 130, I.G. Ex 9/5.
f. The Respondent's claim (I.G. Ex 133) that he gave Ms. Arrington two
injections on January 31, 1979 is false because he never gave her more than
one injection the same day. TR II/103; I.G. Ex 133; I.G. Ex 9/ 5.
g. The Respondent's claims (I.G. Ex 134, 135) that he gave Ms. Arrington
an extended office visit and a shoulder injection on February 22, 1979 are
false because he never saw her in his office after January 1979, never saw her
more than six times, never saw her for as long as 30 minutes, and never gave
her an injection in her shoulder. TR II/89, 91, 92, 93, 97, 99, 101, 102, 103,
104, 120; I.G. Ex 134, 135; I.G. Ex 9/5.
h. The Respondent's claim (I.G. Ex 136) that he gave Ms. Arrington a
shoulder injection on March 1, 1979 is false because he never saw her in his
office after January 1979, never saw her more than six times, and never gave
her an injection in her shoulder. TR II/89, 91, 93, 97, 99, 102, 103, 104,
120; I.G. Ex 136; I.G. Ex 9/6.
i. The Respondent's claims (I.G. Ex 137, 138) that he gave Ms. Arrington
an office visit and two injections of March 5, 1979 are false because he never
saw her in his office after January 1979, never saw her more than six times,
and never gave her more than one injection the same day. TR II/89, 91, 97,
103, 104, 120; I.G. Ex 137, 109, 138; I. G. Ex 9/6.
j. The Respondent's claim (I.G. Ex 139) that he gave Ms. Arrington an
office visit and injections in both shoulders on March 21, 1979 are false
because he never saw her in his office after January 1979, never saw her more
than six times, and never gave her a shoulder injection or more than one
injection the same day. TR II/89, 91, 93, 97, 99, 102, 103, 104, 120; I.G. Ex
139, 107; I.G. Ex 9/6.
k. The Respondent's claims (I.G. Ex 140, 141) that he gave Ms. Arrington
an office visit and injections in both shoulders on March 22, 1979 are false
because he never saw her in his office after January 1979, never saw her more
than six times, and never gave her a shoulder injection or more than one
injection the same day. TR II/89, 91, 93, 97, 99, 102, 103, 104, 120; I.G. Ex
140, 141; I.G. Ex 9/6.
l. The Respondent's claims (I.G. Ex 142, 143) that he gave Ms. Arrington
an office visit and two injections on March 30, 1979 are false because he
never saw her in his office after January 1979, never saw her more than six
times, and never gave her more than one injection the same day. TR II/89, 91,
97, 103, 104, 120; I.G. Ex 142, 110, 143, 112; I.G. Ex 9/6.
m. The Respondent's claims (I.G. Ex 144, 145) that he gave Ms. Arrington
an extended office visit and a shoulder injection on April 12, 1979 are false
because he never saw her in his office after January 1979, never saw her more
than six times, never saw her for as long as 30 minutes, and never gave her a
shoulder injection. TR II/89, 91, 92, 93, 97, 99, 101, 102, 103, 104, 120;
I.G. Ex 144, 108, 145; I.G. Ex 9/6.
n. The Respondent's claims (I.G. Ex 148, 149) that he gave Ms. Arrington
an office visit and injections in both shoulders on April 27, 1979 are false
because he never saw her in his office after January 1979, never saw her more
than six times, and never gave her a shoulder injection or more than one
injection the same day. TR II/89, 91, 93, 97, 99, 102, 103, 104, 120; I.G. Ex
146, 147, 111; I.G. Ex 9/7.
o. The Respondent's claims (I.G. Ex 148, 149) that he gave Ms. Arrington
an office visit and shoulder and vitamin injections on May 31, 1979 are false
because he never saw her in his office after January 1979, never saw her more
than six times, never gave her a shoulder or vitamin injection or more than
one injection the same day. TR II/89, 91, 93, 97, 99, 102, 103, 104, 120; I.G.
Ex 148, 149; I.G. Ex 9/7.
28. The Inspector General proved by clear and convincing evidence that the
Respondent was paid a total of $673.78 on the twenty-two (22) false claims
listed in Finding No. 27 a - o (Catherine Arrington). I.G. Ex 9/5-7; Stip. 6,
7; TR II/7-8.
29. The Inspector General did not prove by clear and convincing evidence
that the Respondent was paid (a) $61.28 for a shoulder injection allegedly
given to Ms. Arrington on February 22, 1979 (I.G. Ex 135); (b) $45.96 for a
shoulder injection allegedly given to Ms. Arrington on March 1, 1979 (I.G. Ex
136); and (c) $45.96 for a shoulder injection allegedly given to Ms. Arrington
on April 12, 1979 (I.G. Ex 145), even though these are false claims and the
parties stipulated Respondent was paid these amounts. I.G. Ex 86/1; I.G. Ex 9/
5-7; Stip 6, 7; TR II/7-8.
30. The Inspector General did not prove by clear and convincing evidence
that Respondent falsely claimed (a) an office visit and knee injection
allegedly given to Ms. Arrington on January 8, 1979 (I.G. Ex 125); (b) an
office visit allegedly given to Ms. Arrington on January 10, 1979 (I.G. Ex
127); (c) an office visit allegedly given to Ms. Arrington on January 16, 1979
(I.G. Ex 129); (d) an office visit and an injection allegedly given to Ms.
Arrington on January 24, 1979 (I.G. Ex 130); (e) an office visit and a knee
injection allegedly given to Ms. Arrington on January 27, 1979 (I.G. Ex 131);
and (f) an office visit and a knee injection allegedly given to Ms. Arrington
on January 31, 1979 (I.G. Ex 132, 133). I.G. Ex 125, 127, 129, 130, 131, 132,
133; I.G. Ex 9/5.
31. The Inspector General proved by a preponderance of the evidence that
the Respondent submitted or caused to be submitted nineteen (19) claims for
reimbursement in which he represented that he provided 19 services to
Katherine Clinkscales knowing that these 19 services were not provided as
claimed. Respondent's claims that he gave Ms. Clinkscales injections on the
following dates are false because he never gave her more than one injection
the same day:
a. November 17, 1980. I.G. Ex 49. b. November 25, 1980. I.G. Ex 50. c.
December 1, 1980. I.G. Ex 51. d. December 5, 1980. I.G. Ex 52. e. December 12,
1980. I.G. Ex 53. f. December 29, 1980. I.G. Ex 54. g. January 3, 1981. I.G.
Ex 55. h. January 9, 1981. I.G. Ex 55. i. January 21, 1981. I.G. Ex 56. j.
February 16, 1981. I.G. Ex 62C. 106. k. August 25, 1981. I.G. Ex 62D. l.
September 17, 1981. I.G. Ex 62B. m. October 5, 1981. I.G. Ex 62A. n. October
9, 1981. I.G. Ex 57. o. October 21, 1981. I.G. Ex 58.
p. October 29, 1981. I.G. Ex 59. q. August 17, 1982. I.G. Ex 60. r.
September 2, 1982. I.G. Ex 61. s. January 25, 1983. I.G. Ex 62.
TR II/12
32. The Inspector General proved by a preponderance of the evidence that the
Respondent claimed a total of $1502.00 in reimbursement for the nineteen (19)
services allegedly given to Ms. Clinkscales as indicated in Finding No. 31 a -
s. I.G. Ex 49 - 62D.
33. The Inspector General did not prove by a preponderance of the evidence
that one of two injections which Respondent allegedly gave Ms. Clinkscales on
December 12, 1980, and one of two injections which Respondent allegedly gave
Ms. Clinkscales on December 29, 1980, were falsely claimed. I.G. Ex 53, 54;
I.G. Ex 9/7.
34. The Inspector General did not prove by a preponderance of the evidence
that a single injection which Respondent allegedly gave Ms. Clinkscales on May
5, 1981 was falsely claimed. I.G. Ex 9/8; I.G. Ex 115/6.
35. The Inspector General proved by clear and convincing evidence that the
Respondent submitted or caused to be submitted twelve (12) claims for
reimbursement in which he represented that he provided services to Fannie Mae
Jackson knowing that one or more of the services listed on each claim were not
provided as claimed.
a. Respondent's claim that he gave Ms. Jackson two injections on July
13, 1979 was false because he never gave her more than one injection the same
day. TR II/147, 150; I.G. Ex 12; I.G. Ex 9/11.
b. Respondent's claims that he gave Ms. Jackson extended office visits
on July 18, 20, and 23, 1979 were false because he never saw her for as long
as 30 minutes. TR II/145; I.G. Ex 14, 16, 18; I.G. Ex 9/11.
c. Respondent's claims that he gave Ms. Jackson a second injection on
August 3, 1979 and two injections on August 7, 1979 were false because he
never gave her more than one injection the same day. TR II/147, 150; I.G. Ex
19, 20; I.G. Ex 9/11.
d. Respondent's claims that he gave Ms. Jackson extended office visits
on August 10 and 20, 1979 were false because he never saw her for as long as
30 minutes. TR 11/145; I.G. Ex 22, 27; I.G. Ex 9/12.
e. Respondent's claims that he gave Ms. Jackson extended office visits
and two injections on each of August 14 and 16, 1979 were false because he
never saw her for as long as 30 minutes and never gave her more than on
injection the same day. TR II/145, 147, 150; I.G. Ex 23, 24, 25, 26; I.G. Ex
9/12.
36. The Inspector General proved by clear and convincing evidence that the
Respondent was paid a total of $290.50 on the twelve (12) false claims listed
in Finding No. 35 a - d. I.G. Ex 9/11, 12; I.G. Ex 82.
37. The Inspector General did not prove by clear and convincing evidence
that Respondent was paid $66.40 for an extended office visit allegedly given
to Ms. Jackson on July 18, 1979, even though this was a false claim and the
parties stipulated that the Respondent was paid this amount. I.G. Ex 14; I.G.
Ex 82/1, I.G. Ex 9/11.
38. The Inspector General did not prove by clear and convincing evidence
that Respondent falsely claimed a service (procedure coded as "7238" but
illegible on the claim form and not otherwise identified in the record)
allegedly given to Ms. Jackson on July 17, 1979; a knee injection allegedly
given to Ms. Jackson on each of July 18, 1979; July 20, 1979; July 23, 1979;
August 7, 1979; and August 10, 1979; a shoulder injection allegedly given to
Ms. Jackson on August 14, 1979; a knee injection and an electrocardiogram
(EKG) allegedly given to Ms. Jackson on August 16, 1979; an EKG and a shoulder
injection allegedly given to Ms. Jackson on August 20, 1979; an office visit
allegedly given to Ms. Jackson on August 21, 1979. I.G. Ex 14, 15, 17, 21, 24,
25, 26, 27, 28, 29; I.G. Ex 9/11, 12.
39. The Inspector General provided by clear and convincing evidence that
the Respondent presented or caused to be presented nine (9) claims for
reimbursement in which he represented that he provided services to Enrique
Martinez knowing that one or more of the services listed on each claim were
not provided as claimed.
a. Respondent's claims that he gave Mr. Martinez two injections on each
of July 25, 1979 and September 1, 1979 were false because he never gave him
more than one injection the same day. TR II/166; I.G. Ex 30, 32; I.G. Ex 9/9.
b. Respondent's claims that he gave Mr. Martinez two knee injections on
each of August 27, 1979; September 21, 1979; September 25, 1979; October 4,
1979; and October 8, 1979 were false because he never gave him a knee
injection and never gave him more than one injection the same day. TR II/158,
160, 164, 165, 166, 170, 179; I.G. Ex 31, 33, 34, 35, 36; I.G. Ex 9/9.
c. Respondent's claim that he gave Mr. Martinez an ankle injection in
addition to another injection on October 15, 1980 is false because he never
gave him an ankle injection and never gave him more than one injection the
same day. TR II/158, 160, 164, 165, 166, 170, 179; I.G. Ex 45; I.G. Ex 9/10.
d. Respondent's claim that he gave Mr. Martinez a reevaluation
examination on June 13, 1981 was false because he never saw Mr. Martinez in
the office after November 1980. TR II/163, 165; I.G. Ex 47; I.G. Ex 9/10.
40. The Inspector General provided by clear and convincing evidence that
the Respondent was paid a total of $309.26 on the nine (9) false claims listed
in Finding 39 a - d.
41. The Inspector General did not prove by clear and convincing evidence
that Respondent was paid $99.60 for an injection allegedly given to Mr.
Martinez on July 25, 1979, and $78.16 for an injection allegedly given to Mr.
Martinez on September 1, 1979, even though these were both false and the
parties stipulated that the Respondent was paid these amounts. I.G. Ex 114/1;
I.G. Ex 30, 32; I.G. Ex 9/9.
42. The Inspector General proved by a preponderance of the evidence that
the Respondent submitted or caused to be submitted seven (7) claims for
reimbursement in which he represented that he provided 9 services to Enrique
Martinez knowing that these 9 services were not provided as claimed.
a. Respondent's claim that he gave Mr. Martinez a knee injection on
October 12, 1979 was false because he never gave him a knee injection. TR
II/158, 160, 164, 165, 170; I.G. Ex 37; I.G. Ex 9/10.
b. Respondent's claims that he gave Mr. Martinez an injection in
addition to another injection on each of April 30, 1980; June 3, 1980; August
6, 1980; August 11, 1980; August 13, 1980; August 22, 1980 and June 15, 1981
were false because he never gave him more than one injection the same day. TR
II/166; I.G. Ex 39, 41, 42, 43, 48; I.G. Ex 9/10, 11: See also, Finding No.
42. f.
c. Respondent's claims that he gave Mr. Martinez a elbow injections on
each of August 6, 1980 and August 22, 1980 were false because he never gave
him an elbow injection. TR II/158, 160, 164, 165, 170; I.G. Ex 42, 43; I.G. Ex
9/10.
d. Respondent's claim that the gave Mr. Martinez an ankle injection in
addition to another injection on October 15, 1980 was false because he never
gave him an ankle injection and never gave him more than one injection the
same day. TR II/158, 160, 164, 165, 166, 170; I.G. Ex 45; I.G. Ex 9/10.
e. Respondent's claim that he gave Mr. Martinez an extended office visit
on December 1, 1980 was false because he never saw him for as long as 30
minutes and never saw him in the office after November 28, 1980. TR II/157,
163, 164, 165; I.G. Ex 46; I.G. Ex 9/10.
f. Respondent's claim that he gave Mr. Martinez an injection on June 15,
1981 was false because he never saw him in the office after November 28, 1980.
TR II/163, 165; I.G. Ex 48; I.G. Ex 9/11. See also, Finding No. 42. b.
43. The Inspector General proved by a preponderance of the evidence that
the Respondent claimed a total of $727 in reimbursement for the nine services
allegedly given to Mr. Martinez as indicated in Finding No. 42. a - f.
44. The Inspector General did not prove by a preponderance of the evidence
that a shoulder injection which Respondent allegedly gave to Mr. Martinez on
(a) March 20, 1980, (b) May 6, 1980, or (c) October 2, 1980, were falsely
claimed. I.G. Ex 38, 40, 44; I.G. Ex 9/10
45. The Inspector General did not prove by clear and convincing evidence
that a PPB" (procedure code 9399) and an office visit which Respondent
allegedly gave Eva Pearson on January 10, 1981 were falsely claimed. I.G Ex
95, 96; I.G. Ex 65; I.G. Ex 9/13.
46. The Inspector General did not prove by a preponderance of the evidence
that the services listed in I.G. Ex 9/13-15 which Respondent allegedly gave
Eva Pearson on January 3 and 24, 1981; February 9, 1981; and March 2, 5, 12
and 14, 1981 were falsely claimed. I.G. Ex 95, 96; I.G. Ex 63, 64, 66-81; I.G.
Ex 85/3, 5.
47. The Inspector General proved by clear and convincing evidence that
Respondent knew that the forty-three (43) claims which the Respondent
presented or caused to be presented (and received by the carrier) prior to
August 13, 1981 each contained alleged services which were not provided as
claimed, and by filing these claims the Respondent intended to defraud the
Medicare program.
48. The Inspector General proved by a preponderance of the evidence that
Respondent knew that twenty-eight (28) services listed on false claims which
the Respondent presented (and which were received by the carrier) after August
13, 1981 were not provided as claimed.
49. The Respondent has responsibility under the Act and Regulations to be
informed of the statutory, regulatory, and program requirements and has an
obligation to ensure that services for which he claimed reimbursement were in
fact provided as claimed.
50. Each of the forty-three (43) claims and twenty-eight (28) services
referred to above are subject to a determination under Section 101.102 of the
Regulations.
51. The Inspector General proved by clear and convincing evidence the
following aggravating factors:
a. The false claims were submitted over a lengthy period of time, were
many in number, involved substantial amounts, and were part of a pattern of
actions by the Respondent to systematically defraud the federal and state
programs of medical assistance to the elderly and poor which went far beyond
this case.
b. The Respondent attempted to obstruct my efforts to conduct a full
hearing and arrive at the truth by his delay in searching for records sought
by the Inspector General and by his selective production of those records
(deemed most favorable to his case) (several days after he allegedly found
them), without advising the Inspector General that the records had been found,
prior to the Respondent's attempt to use them in cross examination.
52. The Respondent proved by a preponderance of the evidence (based on
evidence introduced by the I.G the following mitigating factors:
a. Prior to and during the period in question the physical condition of
the Respondent's infant daughter and the connected nervous collapse of his
wife placed him under great mental strain; he was also dependent on drugs.
b. The Respondent mental state and dependency on drugs affected his work
and may have affected his judgment on legal, ethical, and moral questions
concerning his false claims for reimbursement from the Medicare program.
53. 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.
54. The maximum penalty in this case is $142,000 ($2000 x 71) (43 pre-
August 13, 1981 claims containing one or more services not provided as
claimed, plus 28 post-August 13, 1981 services not provided as claimed). The
Inspector General sought to prove that 53 pre-August 13, 1981 claims plus 98
post-August 13, 1981 services were false, which would have made the maximum
penalty $303,000. The Inspector General proposed a penalty of $138,800, which
is the equivalent of $771.11 for each allegedly false claim or service. At the
$771.11 penalty rate, the total penalty for the 43 claims and 28 services
would be, and is, $54,748.81.
55. The maximum assessment in this case is $7,005.08 (43 claims containing
one or more services not provided as claimed for which Respondent was paid
$1,273.54, plus 28 post-August 13, 1981 services not provided as claimed, for
which Respondent claimed $2,229; a total of $3,502.54, doubled). The Inspector
General proposed an assessment of $11,200 out of a total maximum assessment of
$33,145.50 (if the Inspector General had proved false the 53 claims plus 98
other services alleged to be false), which is equivalent to double the amount
of $.33 for each $1.00 paid or claimed. At the .33 rate, the total assessment
for double the amount paid on the 43 claims and double the amount claimed on
the 28 services would be, and is, $2,311.67.
56. The $33,157.73 penalty and $840.53 assessment imposed for those claims
received by Blue Cross-Blue Shield prior to August 13, 1981, are not greater
than the amounts which could have been imposed under the False Claims Act.
57. 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 an
obvious finding of fact or a conclusion of law is hereby incorporated herein
as a finding of fact or conclusion of law.

DISCUSSION

I. The Application of the Act and Regulations to this Case
A discussion of how the Act and the regulations apply to the general facts
in this case is outlined earlier in this Decision and Order. That discussion,
i.e., "the Law and Regulations," is incorporated herein by reference and will
not be repeated here.
II. The Hearing
The Regulations require that a full and fair trial-type hearing before an
ALJ be conducted; that was done in this case. See, Regulations Sec.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 (decisions and order), 101.126
(judicial review), and 101.132 (limitations); 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). Moreover, under the Regulations, the parties had the right to
cross-examine all witnesses called by the opposing party 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.
III. The Use of Hearsay in this Case
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, 16.5, 16.6, 16.7, and 16.8. Generally, with regard
to the admission of prior sworn statements of patients in lieu of testimony,
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, in most cases, substantial evidence,
even though it is hearsay. (This issue will be discussed in more detail infra,
i.e., regarding the evidence of specific claims in issue submitted with regard
to Eva Pearson.) IV. Adverse Inferences
In this case, seven witnesses testified on behalf of the I.G. and no
witnesses testified on behalf of the Respondent. The Respondent did not
testify on behalf of himself; he was, however, called by this ALJ and
voluntarily appeared for the limited purpose of testifying as to his efforts
to comply with my discovery Order requiring him to produce certain patient
logs. See, TR IV/5 to 65. [FN16]
In an attempt to bring additional relevant evidence before me, the I.G.
requested that the Respondent produce a handwriting sample, his disability
history and his patient logs for the period of time in issue. A review of the
transcript and the record makes it clear (TR. III/23-32) that the I.G. made
repeated requests for this information as early as June 1985. TR III/31. The
Respondent made the decision not to produce a handwriting sample and
information concerning his disability claim. TR III/61, 62. After hearing the
Respondent testify, and observing the Respondent as he testified, I find that
he withheld production of his patient logs until they could not be used
against him by the I.G.. I am not certain whether the Respondent did this by
design or because of his reduced mental capacity. See, "The Respondent's
Knowledge And His Intent to File False Claims," infra. The I.G. alleges that
the logs would show that the Respondent billed for certain patient services on
days that the said patient did not visit his office. I find that the logs
probably would have corroborated the testimony of the patients of who so
testified and the statements of Eva Pearson. I find this to be so because the
Respondent found and produced only those pages of the logs that helped his
case. The Respondent's failure to produce evidence within his control fairly
warrants the inference that the evidence, if produced, would have been
adverse. Daniel v. United States, 234 F. 2d 102 (5th Cir. 1956); Local 167 v.
United States, 291 U.S. 293.
Several of the beneficiaries interviewed by Mr. Jerson, the I.G.
investigator, stated that they did not recognize the patient signature on
claims submitted by the Respondent on their behalf. TR II/103. The I.G.
requested a sample of the Respondent's handwriting to determine whether he may
have forged the beneficiary's name on the claim form. The Respondent's refusal
to produce the requested handwriting sample raises the inference that had it
been produced, analysis would reveal that the Respondent had forged the claims
in questions. Thus, his failure to provide a handwriting sample tends to
corroborate the testimony of those witnesses.
A review of the Respondent's testimony (TR IV/5 to 65) reveals that the
Respondent was evasive and inconsistent in his response to questioning by the
I.G. and to my questions. The Respondent could not recall events that had
occurred two or three days prior to his testifying (TR 9/13 at 28-38), and
could not or would not remember clearly what he found during the search of his
office only days before. TR 9/13 at 28, 34. The Respondent testified that he
only found one book during his search (TR 9/13 at 31), although his counsel
referred to the production of books. TR IV/34, 60. Moreover, the patient
appointment book the Respondent produced was indexed to correspond to rebuttal
or cross-examination of the I.G.'s witnesses. The Respondent testified that he
undertook to index the book without consulting with his attorney or even
notifying him that the book had been "discovered". TR IV/61. Also, he admitted
that he had altered the patient sign-in sheets he produced by writing dates on
the sheets. TR IV/39. Although the Respondent initially suggested that the
dates were already on the sheets when he found them (TR IV/37, 38), it became
clear that he had marked the documents. TR III/48, 51.
I find that the Respondent's behavior in not searching for the requested
documents at an earlier date and his selective production of only those
documents that helped his case obstructed the hearing in this case, and that
this is an aggravating factor. Also, the Respondent's behavior requires the
inference that the items withheld would have made the Respondent's scheme to
intentionally defraud Medicare even more apparent.
V. The Respondent's Knowledge And His Intent To File False Claims
A thorough review of the entire record illustrates that the Respondent had
knowledge that the false claims he submitted to Medicare were indeed false.
The most compelling proof is provided by the testimony of the patients at the
hearing. Each of the Medicare beneficiaries that testified denied receiving
services billed by The Respondent. These patients testified that the
Respondent would have them sign extra claim forms when they went to see him
(TR II/90, 159, III/8) and that they would later receive billing statements
from Medicare for services by the Respondent that they had not received. The
Respondent had a well-established scheme which he used to defraud the Medicare
program. When Medicare patients entered Dr. Khurana's medical offices, they
were told that they had to sign a number of blank claim forms. I.G. 91, 92,
93, 96; TR II/90, 159, III/8. If the patients asked why it was necessary to
sign these extra blank forms, they were told either that it was "necessary"
(I.G. 92; TR II/90), or that the Respondent needed a copy (TR II/160, TR
III/8). The Respondent would fill out these blank claim forms and list various
services that the Respondent had not rendered and submit these forms to the
Medicare program for reimbursement. The program paid these claims in due
course and would send monthly billing statements to the patients identified as
having received these services. Some of the patients opened and read their
statements and called the carrier (BC/ BS) to complain that the Respondent was
billing for services that they had not received. TR II/54. On the basis of
these complaints, the Respondent's scheme was revealed. TR II/55.
In addition to the evidence of billing fraud supplied by the testimony of
patients at the hearing, the Respondent's wife, Dr. Rhoopa Khurana, provided
further proof and corroboration of his scheme to cheat not only the Medicare
but also the and Medicaid program as well. During the period of time that the
Respondent was being investigated by the New York State Medicaid Fraud Unit,
Dr. Rhoopa Khurana made a telephone call to a New York radio talk show on WABC
hosted by Mrs. Judith Kurianski, [FN17] a health professional who counsels
individuals who call in to discuss their personal problems over the air. TR
III/135 to 148. The Respondent's wife gave her name as "Mary" when she called
the radio talk-show and spoke to Ms. Kurianski. The radio station policy
required callers to give a phone number in case they are disconnected. New
York State investigators traced the number given by "Mary" to the home of Drs.
Narendra and Rhoopa Khurana. Ms. Khurana's identity is further confirmed by
the fact that, during the conversation, she gave a large amount of personal
and family history which corresponded exactly to the personal history of
Rhoopa and Narendra Khurana. Furthermore, counsel for the Respondent admits
that the caller was Ms. Khurana. TR IV/84, 88; TR III/151.
At the request of the I.G and over the objection of the Respondent, this
tape was played and transcribed into the record in this case (TR III/142 to
148) during the testimony of Mr. Barry Jerson, an investigator (program-
analyst) for the I.G. TR III/114 to 174. While the Respondent's counsel
originally objected to the admission of the tape into evidence, and objected
to having the tape transcribed by the court reporter in this case, and having
the transcription be used as evidence, the Respondent admits that the voice on
the tape was that of the Respondent's wife and urges that I consider and
weight the evidence to support the Respondent's argument that the I.G. failed
to consider certain factors as mitigating factors. RB at p. 12.
The Respondent now argues that Ms. Khurana's statements about the guilt of
her husband be discounted, but that her statements about the Respondent's
medical and psychological strain be given great weight as mitigating factors.
The I.G. argues that I should give great weight to the statements of the
Respondent's guilt, but does not equally address the Respondent's arguments
concerning the mitigating factors. The evidence offered by the I.G. is a
double-edged sword; it addresses not only the Respondent's intent to cheat
Medicaid, but outlines problems which impaired the Respondent's ability to
work. I give equal weight to all of Ms. Khurana's statements. The evidence
reveals shocking statements concerning the Respondent's intent to cheat
Medicaid, drug-addition causing impairment of the Respondent, a nervous
breakdown of the Respondent's wife, a daughter with cerebral palsy and her
operation, unhappiness and depression. TR III/142 to 148. I find that the
words of the Respondent's wife illustrate a clear concern of the well-being of
herself, her family and her husband's problems. She is also a physician and I
find her statements concerning her husband to be credible. I find that the
problems Ms. Khurana cited are evidence of the Respondent's mental condition,
(i.e., that the Respondent was under great mental strain, that the
Respondent's daughter was suffering from cerebral palsy, that the child's
condition and his wife's nervous breakdown affected the Respondent, that the
Respondent was suffering from dependency on drugs, and that the dependency and
mental strain affected his ability to work). It should be noted that although
he now admits that his wife's description of his mental state and drug
dependency is correct, the Respondent was remiss in not coming forward. At the
very least, the Respondent should have explained how his drug dependency and
family problem lessened his moral culpability. Instead, the Respondent sat
back, let the I.G. provide the evidence in the case that the Respondent later
seized upon asevidence of mitigating factors, and then still took no
affirmative action.
In her phone conversation, Rhoopa Khurana stated that she was a physician
who was married to a physician who is very unscrupulous because her husband
had been defrauding the Medicaid program for 10 years; she said that she had
tried, but was unable, to change him from his criminal ways. TR III/143, 146.
She said that she did not need to inform the authorities because Medicaid had
already begun investigating her husband. TR III/ 145. The Respondent's wife
discussed the scheme in which the Respondent was involved and revealed his
intent to cheat.
In admitting his guilt to his State crime of cheating Medicaid, the
Respondent specifically admitted that he had intended to defraud the Medicaid
program by filing false claims. I.G. 3. There is also evidence that the
Respondent intended to defraud the Medicare program as he had cheated the
Medicaid program. When Catherine Arrington began receiving numerous carrier
statements for Medicare services that she knew she had not received, she
confronted the Respondent; The Respondent told her not to worry about the
bills, and even billed her for an office visit on the day she went to
complain, although no services had been rendered. TR II/94. When she continued
to receive billing statements, Ms. Arrington again complained to the
Respondent. The Respondent asked "why should she worry, it (the money) was not
coming out of her pocket." TR II/95-122; I.G. 90. Ms. Jackson stated that Dr.
Khurana told her not to worry about the extra claims he was submitting under
her name since Medicare was paying. I.G. 87, I.G. 88. [FN18] VI. The I.G.
Proved By Clear And Convincing Evidence That The Respondent Knowingly
Presented Or Caused To Be Presented Forty-Three (43) Claims (of the 53 Claims
In Issue) For Medicare Payment, For Services That Were Not Provided As Claimed
(Where the Claims Were Received By The Carrier From February 10, 1980 to
August 12, 1981) In Violation Of The Act And Regulations
The I.G. argues that he has shown by clear and convincing evidence (1) that
the Respondent knowingly presented 53 Medicare false claims and received by
the carrier, BC/BS, from February 10, 1980 to August 12, 1981, for services
that were not provided as claimed, (2) that the Respondent was not entitled to
any payment for the claims submitted, and (3) that the claims at issue were a
small part of a continuing scheme by the Respondent to obtain Medicare and
Medicaid reimbursement in violation of the Act and Regulations. The I.G. also
argues that he also has proven (1) intent to defraud, (2) that the Respondent
knowingly filed the claims in issue, (3) that there exist substantial
aggravating factors, and (4) 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 outlined
above, the Respondent argues that (1) the evidence presented by the I.G. was
insufficient to meet the burden of proof required, and (2) that there are
mitigating circumstances present in this case that the I.G. failed to
consider. The Respondent also argues that the witnesses presented by the I.G.
were not credible because of their age and inability to remember dates, and
accordingly, that their entire testimony is unworthy of belief and should be
stricken.
The Act and Regulations require that, for claims received by the carrier
prior to August 13, 1981, 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 proposed 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. The Act and Regulations as well as the False Claims Act
are applicable to false claims submitted to the Medicaid and Medicare
programs. See, United States 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 federal court noted, any fraudulent claim "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.
I11. 1984).
The Second Circuit has interpreted the knowledge or intent to defraud
requirements of the False Claims Act as requiring that the Government
demonstrate the tort of intentional fraud and misrepresentation. United States
v. Repass 688 F. 2d 154 (2d Cir. 1980) quoting United States v. Ekelman and
Associate, 532 F. 2d 545, (6th Cir. 1976). The Second Circuit follows the
Sixth Circuit's standard in requiring that this intent be demonstrated by
clear, unequivocal and convincing evidence. Ekelman, supra, at p. 548. I find
that the I.G. has proven by clear and convincing evidence that the Respondent
knowingly submitted forty-three (43) false Medicare claims in issue here (that
were received by the carrier prior to August 13, 1981) and that the Respondent
intended to defraud and cheat the Medicare program. See, Discussion, Section
V, supra.
The following is a summary of each of the alleged false claims in issue here
which were presented by the Respondent prior to August 13, 1981 and the
reasons why they were or were not proven by clear and convincing evidence to
be false claims under the Act and Regulations (using the False Claims Act
standard): [FN19]
A. The I.G. Proved By Clear and Convincing Evidence That Twenty-Two (22)
Claims (Of The 25 Claims In Issue) Listing Services Allegedly Rendered to
Catherine Arrington are False Claims
The I.G. proved by clear and convincing evidence that the Respondent
intended to defraud the Medicare program by filing false claims in violation
of the Act and Regulations for the period in issue in this case. See,
Discussion, "V The Respondent's Knowledge And His Intent to File False
Claims," supra. The I.G. proved by clear and convincing evidence that the
Respondent presented twenty- two claims, each containing one or more services
allegedly rendered to Catherine Arrington but not provided as claimed, in
violation of the Act and Regulations (using the False Claims Act standard).
FFCL/27 a to o, 28. The I.G. did not prove by clear and convincing evidence
(a) that three other claims in issue submitted by Respondent were false
claims, and (b) that certain services listed on certain false claims were not
provided as claimed. FFCL/29, 30.
Contrary to the Respondent's assertions, Catherine Arrington's testimony is
not "riddled with inconsistencies" so as to make her entire testimony not
credible. See, RB at p. 7. Quite the reverse is the case with regard to some
important facts remembered quite clearly by Ms. Arrington, and these facts
establish that the Respondent filed twenty-two (22) false claims.
For example, I find that Catherine Arrington's testimony with regard to the
following is consistent, not controverted, and credible:
1. She never saw the Respondent after January, 1979 (TR II/ 89); 2. She
only saw the Respondent six times (TR II 91, 97, 104; 3. She never had an EKG
performed by the Respondent (TR II/90, 97, 104) (cf. TR II 143); 4. She never
had an examination; she only received injections from the Respondent (TR
II/93); 5. She never received two injections in the same day (TR II/ 103); 6.
She never received an injection in the shoulder (TR II/93, 97, 99, 102, 103,
104); 7. She never received vitamin injections (TR II/97, 99, 104); 8. She was
never in the Respondent's office for more than 7 to 8 minutes (TR II/92, 101)
(cf. TR II/102)
On the other hand, with regard to FFCL/29, there was an inconsistency
between some of the payment amounts listed on the I.G.'s Notice of Proposed
Determination (I.G. Ex 9 ), which the parties stipulated were the amounts paid
for the services alleged to be not provided as claimed, and the carrier's
computer listing (I.G. Ex 82) which showed payments also. The computer listing
indicated that the amount paid, which was the same amount shown on the Notice
as having been paid for one service (such as an office visit or an injection)
actually had been paid for two or more services. Thus, it was impossible to
tell how much was paid to the Respondent for the service shown not to be
provided as claimed. Also, the amounts paid in these instances substantially
exceeded either the amount claimed for an item or the amounts paid in other
instances involving the same type of services. Thus, I determined the
Inspector General had not proved the amounts paid where there were these
inconsistencies.
With regard to FFCL/30, the I.G. failed to prove that certain services were
not performed by the Respondent. Ms. Arrington's testimony about which knee
she received an injection in was too confused and her testimony about
frequency of office visits too vague, to accept as clear and convincing
evidence. Also, where the type of injection was not legible on the claim, I
assumed it might have been a knee injection and did not accept it as clear and
convincing evidence.
B. Fannie May Jackson (Eighteen (18) Claims In Issue; Twelve (12) Proved
False)
I find that the Respondent never gave Fannie May Jackson more than one
injection in one day, and never rendered an extended office visit (i. e.,
never saw her for as long as 30 minutes). FFCL/35 a to e, 36. The I.G. did not
prove that Fannie May Jackson did not receive (a) knee or shoulder injections;
(b) a service coded as 7238; (c) standard-length office visits. FFCL/38. There
was also an inconsistency between the amounts paid shown on the Notice of
Determination (I.G. Ex 9) ( stipulated to by the parties) and the computer
listing (I.G. Ex 82) similar to those described above regarding Ms. Arrington.
For the same reasons I gave there, I concluded that the I.G. had not proved
the payment for this false claim.
C. Enrique Martinez (Nine (9) Claims In Issue; Nine (9) Proved False)
I find that the Respondent never gave Enrique Martinez a knee injection and
never gave him more than one injection the same day. For a discussion of Mr.
Martinez's testimony, see, VII. B., infra.
D. Eva Pearson (One (1) Claim In Issue; It Was Not Proven To Be False)
(Hearsay, Due Process, Confrontation, And Cross-Examination)
In essence, the Respondent argues that the I.G.'s use of unsworn hearsay
statements attributed to Eva Pearson to establish that the Respondent
presented or caused to be presented one (1) false or improper Medicare claim
for payment (and received by the carrier prior to August 13, 1981) is unfair,
that these statements are unreliable, uncorroborated, and not authenticated;
the Respondent requests that such statements be given no probative value and
that the claims to which they relate be dismissed. [FN20] Due process
arguments should always be considered seriously 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). Moreover, the Regulations require that fundamental fairness will be
employed in this action. (See, Regulations, Sec.101.115(a), which requires the
Administrative Law Judge to conduct a fair hearing.) Under the Act and
Regulations, hearsay is admissible, but I agree that 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 589 F 2d 1166 (2d Cir. 1978);
Western Union v. FCC, 541 F. 2d 346, 353 (3rd Cir. 1976); cert. den. 429 U.S.
1092 (1977); DAVIS, Administrative Law Treatise, 2d Ed. 1978, Chapter 16,
Secs.16.4 16.5 and 16.8. Also, an unsworn, uncorroborated statement is not as
reliable as a sworn, corroborated or even a sworn, uncorroborated statement.
Under the Regulations, and pursuant to Richardson v. Perales, supra, the
primary burden is on the Respondent to locate (the I.G. having supplied the
last known address), and subpoena the person who made the statement, if the
Respondent wishes to confront and cross-examine that person. However, in this
case, the I.G. listed Eva Pearson as a witness and subpoenaed her, but she did
not respond to the subpoena and the I.G. was unable to produce her as a
witnessin time for the hearing. The I. G. did not ask that the hearing be
continued to compel her attendance.
I find that Eva Pearson did give two statements to the carrier stating that
she never saw the Respondent as a patient in 1981 and that an I.G.
investigator, Barry Jerson, visited the witness and heard the same thing from
her at a later time. TR II/52; TR III/ 1201121; I.G. Ex 95, 96. However, none
of the statements are signed by Eva Pearson, she did not appear, even though
she had been subpoenaed, and the I.G. did not attempt to enforce the subpoena
or obtain a sworn statement from the witness. Accordingly, the I.G. has not
proven that the one claim for service received by the carrier prior to August
13, 1981) is a false claim because there is not sufficiently convincing
evidence that her unsworn statements are assuredly true. Pascal v. United
States, 543 F. 2d 1284, 1289 (Ct. Cl. 1976).
Had any of the statements been sworn statements and had the witness been
available for cross-examination by the Respondent, I would have had a better
basis for determining whether her statements were reliable as to the
truthfulness of their contents. [FN21]
VII. The I.G. Proved By A Preponderance Of The Evidence That The Respondent
Knowingly Presented Or Caused To Be Presented Some (But Not All) Of The 46
Claims In Issue For Medicare Payment For Services That Were Not Provided As
Claimed, From August 13, 1981 to April 11, 1983, In Violation Of The Act And
Regulations
The I.G. proved by a preponderance of the evidence that the Respondent
submitted false claims, for services that were not provided as claimed, in
violation of the Act and Regulations. The following is a summary of each of
the alleged false claims in issue here which were presented by the Respondent
and received by the carrier on or after August 13, 1981 and the reasons why
they were or were not proven by a preponderance of the evidence to be false
claims under the Act and Regulations:
A. Eva Pearson (Eighteen (18) Claims In Issue; Eighteen (18) Not Proven
False)
For the reasons given in Section VI D. of this Decision and Order, the 18
claims alleged to be false were not proven by the I.G. to be false. This is so
even though the burden of proof for these 18 claims is by a preponderance of
the evidence, rather than clear and convincing evidence which was the burden
of proof for the one (1) Eva Pearson claim received by the carrier prior to
August 13, 1981 discussed above. Even though the burden here is a lesser
standard, I am reluctant to find that Eva Pearson's unsworn statements are
true in light of the fact she failed to appear at the hearing when commanded
to do so and did not sign a sworn statement.
B. Enrigue Martinez Nine (9) claims In Issue; Six (6) Claims Proved To Be
False For Nine (9) Services)
The reasons for finding that the I.G. proved by a preponderance of the
evidence that the Respondent presented or caused to be presented to Medicare 6
claims for 9 services that were not provided to Enrique Martinez as claimed
are (see, FFCL/39 a. to d, 40):
1. The Respondent never gave Mr. Martinez two (2) injections in one day.
2. The Respondent never saw Mr. Martinez in his office after November 28,
1980.
TR II/163, 165.
I was not persuaded by Mr. Martinez' repeated insistence that he never
received any injections. An investigation report attributed to a State
Medicaid investigator quotes Mr. Martinez as stating that he received a
shoulder injection which caused him a lot of pain. R Ex C; TR II/170-179. He
also gave one statement to an I.G. investigator that he received a flu shot
and contradicted that in another, later, statement and in his testimony. I.G.
Ex 93, 94; TR II/166, 168. Although he insisted he never made the statement
attributed to him by the State investigator and explained that his difficulty
with the language caused him to give incorrect information in his first flu
shot statement, I concluded that the I.G.'s proof with respect to the
allegedly falsity of shoulder injections (no flu shots were claimed) claimed
by Respondent fell short of meeting either burden of proof standard. (See,
FFCL/44 where the I.G. did not prove that Mr. Martinez did not receive a
shoulder injection on each of three claims.) I found the remainder of Mr.
Martinez' testimony to be clear, unequivocal and credible.
C. Katherine Clinkscales (Nineteen (19) Claims For Twenty-Two (22) Services
In Issue; Eighteen (18) Claims Proved False for Nineteen (19) Services)
The reason for finding that the Respondent presented 18 claims for 19
services that were not provided as claimed is that the Respondent never gave
Ms. Clinkscales more than one injection on the same day. See, FFCL/31 a to o,
32. However, because she could not testify consistently about the part of her
body in which she received injections, I did not accept as being proven false
those claims listing only a single injection. See, FFCL/33, 34.
VIII. The Amount Of The Proposed Penalties (As Modified) And, Assessments
(As Modified), And Length Of Suspension (As Modified) Are 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 penalties, assessments,
and a suspension in this case, because the I.G. proved liability and intent to
defraud by clear and convincing evidence (for claims received by the carrier
prior to August 13, 1981) and by a preponderance of the evidence (for claims
received by the carrier on or after August 13, 1981), I must decide the
appropriateness of said proposed penalties, assessments and suspension, as
modified by the proof.
I have already stated what the Act and Regulations provide and concluded
that the Respondent presented false claims. The maximum penalties, assessments
and suspension which could be imposed here, as modified by the proof, are much
greater than what the I.G. proposes, as modified by the proof. See, FFCL/54,
55.
A. There Exist 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 each 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 aggravating factors in this case. Some are
discussed earlier in this Decision and Order. 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 Medicare 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 (for claims
received prior to August 13, 1981) and by a preponderance of the evidence (for
claims received on or after August 13, 1981). 45 C.F.R. Sec.101.114(a) (b),
101.106(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 the Respondent's efforts to cover up his scheme and
his obstruction of the hearing in this case.
Section 101.106 of the Regulations provides:
It should be considered an aggravating circumstance if such items were of
several types, occurred over a lengthy period of time, there were many such
items or services (or the nature and circumstances indicate a pattern of
claims for such items or services), or the amount claimed for such items was
substantial.
In summary, a large number of claims were proven to be false, the
Respondent's intent to defraud is evident from the record, the Respondent's
scheme was systematic, the magnitude of the Respondent's scheme went well
beyond this case, and the Respondent obstructed the hearing in this case; each
of these factors in itself would support the proposed imposition of penalties,
assessments and a suspension of the Respondent in this case.
B. Rebuttal
The only rebuttal presented in this case was by way of cross-examination.
The Respondent's counsel was successful in creating enough doubt in some
instances so that the I.G. did not meet his burden of proof with regard to
certain claims in issue and with regard to certain services in issue.
C. Mitigating Factors
I find that the total amount of the penalties and assessments are low in
light of the record in this case, especially considering the aggravating
circumstances and weighing them against any mitigating factors. But, I am
reluctant to disturb the I.G.'s proposed amounts per each penalty and
assessment because feel that the I.G. is best equipped to make the decision
regarding the extent of penalties and assessments, unless additional evidence
damaging to the Respondent and previously unknown to the I.G. comes out at the
hearing, or vice versa.
Knowing that the standards for determining the length of a suspension are
different under the Act and Regulations with regard to the suspension proposed
in this case, from the standards presented in Docket C-12, I find that a
reduction is still warranted for the reasons stated in the Decision in Docket
C-12, for the reason that the I.G. was unable to prove that a substantial
number of claims and services in issue here were false claims and for the
reasons stated in this Decision and Order in Section V, "The Respondent's
Knowledge And His Intent To File False Claims," supra. Accordingly, I find and
conclude that the suspension should correspond to the suspension in Docket C-
12.
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 $138,800, assessments of
$11,200, and a suspension for ten (10) years from the Medicare and Medicaid
programs. See, FFCL/54, 55, 56.
I conclude that the Respondent shall be subject to penalties of $54,748.81,
assessments of $2,311.67, and shall be suspended from participating in the
Medicare and Medicaid programs for a period to run concurrently with the
suspension proposed in Docket C-12 (i.e., until December 10, 1990). See,
FFCL/54, 55, 56.
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 $54,748.81 are a sufficient deterrent to the Respondent, based on
the proof in the record.
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).
Section 101.107 of the Regulations requires the same criteria used in
determining penalties and assessments 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). The
suspension imposed in this case is also a sufficient deterrent to the
Respondent. based on the proof in the record.

ORDER

Based on the evidence in the record and the Act and Regulations, it is
hereby Ordered that the Respondent:
(1) pay penalties of $54,748.81
(2) pay assessments of $2,311.67; and
(3) be, and hereby is, suspended from the Medicare and Medicaid programs
for a time to run concurrently with the suspension in Docket C-12, (i.e., to
December 10, 1990) on the condition that, by October 10, 1990, the Respondent
submit evidence satisfactory to the I.G. (1) that he is not, as of October 1,
1990, dependent on drugs or alcohol and (2) submit evidence that he has
completed a seminar or program within that year on Medicaid and Medicare
billing requirements that is approved or sponsored by New York State, the
Federal Government or by the I.G. (In the event the Respondent submits this
evidence to the I. G. and the I.G. does not respond to the Respondent by
December 10, 1990, the Respondent is then automatically reinstated as of
December 10, 1990.) If this evidence is not submitted by the Respondent by
October 10, 1990, the Respondent's suspension from Medicare and Medicaid
programs will then be for the entire ten (10) year period proposed by the I.G.
in this case, unless the Secretary reinstates the Respondent pursuant to
another provision of federal law.

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 42, U.S.C. and are part of
section 2105 of the Omnibus Budget Reconciliation Act of 1981 (Pub. L. No.
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. No. 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 1984 (Pub. L. No.
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. 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., (recodified and
reworded slightly as Sec.3729 on September 13, 1982); the civil 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.

FN4. 42 U.S.C. Sec.1320a-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 (Medicare) program . . .
and
(2) ***may require (appropriate state agencies) to bar the person from
participation in the (Medicaid) program . . .

FN5. There is also a Part C of Title XVIII, 42 U.S.C. Secs. 1395x - 1395xx,
which contains miscellaneous provisions applicable to the programs under both
Parts A and B.

FN6. Section 1320a-7a(a)(1) of the Act and Sec.101.102 of the Regulations
define 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.

FN7. 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.

FN8. 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.

FN9. Docket No. C-12 involves a November 25, 1983 Notice of Suspension sent to
the Respondent which stated that the I.G. had determined that the Respondent
had been convicted of a criminal offense related to his participation in the
New York State Medicaid Program and, accordingly, he was, from December 10,
1983, mandatorily suspended from participation in the Medicare and Medicaid
programs for a period of 10 years pursuant to Sec.1128(a) of the Social
Security Act, 42 U.S. C. Sec.1320a-7(a) and its implementing regulations, 42
C.F.R. Sec. 420,000 et. seq. The Respondent's timely request for a hearing
resulted in Docket No. C-12.

FN10. "RB" references are to the Respondent's brief. "I.G.B" references are to
the I.G.'s brief and "I.G.RB" references are to she I.G.'s reply brief.

FN11. References to the transcript, the stipulations, Hearing Exhibits, and to
the Findings of Fact and Conclusion of Law are as follows: Transcript = TR
(volume/page number) Stipulations = Stip. (number) I.G. Exhibit = I.G.
Ex/(page number) Respondent's Exhibit = R Ex/(page number) ALJ Findings of
Fact and Conclusions of Law = FFCL/(number)

FN12. I rejected some of the proposed findings and conclusions offered because
some were not supported by the evidence in the record, needed to be modified,
were not material. Also, there were some conflicts between the documentary
evidence and testimony or there were conflicts between the documentary
evidence and the stipulations. Some findings and conclusions I have
incorporated elsewhere in this Decision.

FN13. Any part of this Decision and Order preceding the Findings of Fact and
Conclusions of Law which is obviously a finding of fact or conclusion of law
is hereby incorporated herein as a finding of fact or conclusion of law; I
refer primarily to the facts and conclusions that were not disputed or which
are clear and do not need to be repeated here.

FN14. The Findings of Fact numbered 1 to 13 were stipulated to by the parties
and, accordingly, I have adopted them as my Findings of Fact.

FN15. Stipulation references refer to the I.G.'s proposed stipulations of
7/19/85; which were all adopted by the Respondent, through counsel, at the
hearing on September 11, 1985. TR II/5 to 9.

FN16. It should be noted that the reasons the Supreme Court held that the
Self- Incrimination Clause of the Fifth Amendment did not apply in United
States v. Ward, 448 U.S. 242, 251 to 254 (1980) was because the federal
statute in question in that case 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, this privilege is applicable here if
a person could show that the information requested or question asked at the
hearing 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 mentioned by the
Respondent's counsel, was never actually invoked by the Respondent and the
Respondent did not attempt to defend this action by presenting himself or any
other witnesses.

FN17. At the hearing, the Respondent's wife appeared by counsel and opposed
the I.G.'s motion for an order to enforce appearance as a witness against her
husband. I ruled at the hearing that the Respondent's wife did not have to
testify in this case or in Docket No. C-12 on the grounds that (1) the
principles of the common law as interpreted by the courts of the United States
govern the law of privilege because federal law supplied the rule of decision
in this case (see, Rule 501 of the Federal Rules of Evidence), and (2) the
case of Trammel v. United States, 445 U.S. 40 (1979), stands for the
proposition that a wife cannot be compelled to testify against her husband in
a federal forum (on the basis of the marital privilege). Here, however, the
Respondent's wife waived the marital privilege with regard to the taped
conversation with the radio talk-show host, which is in evidence in this case,
because she volunteered information about her husband to thousands of people
over the radio. TR I/80 to 85.

FN18. Even though I found Ms. Khurana's testimony to be credible and found
that negative inferences should be drawn against the Respondent for his
obstruction in this case, I still reviewed the remaining evidence in the
record (i.e., primarily the testimony of the other witnesses in this case) on
its own merits and found that it alone established the liability of the
Respondent. In fact, if anything, Ms. Khurana's statements help the Respondent
by establishing mitigating circumstances and do nothing more than corroborate
the magnitude of his scheme to intentionally defraud the Medicare and Medicaid
programs; if her testimony were to be stricken from the record, the result
would be more harmful to the Respondent because evidence of mitigating factors
would be absent.

FN19. It should be generally noted that I found each of the four patient-
witnesses to be credible and reliable and their testimony to be probative in
spite of their advanced ages (Fannie May Jackson, age 94; Ms. Katherine
Clinkscales, age 74; Catherine Arrington age 73; and Enrique Martinez, age
78). However, because of their advanced ages and because of the slight
language barrier with Mr. Martinez, wherever the Respondent pointed out actual
inconsistencies or real weaknesses in their testimony, especially where the
Respondent was able to weaken their testimony on cross-examination, I found in
favor of the Respondent. For example, where a witness had problems recalling
whether shots were given in the right or left knee, I found that the I. G. did
not prove that the service was not performed, as claimed, when the Respondent
listed one knee injection.

FN20. The Respondent makes the same argument for the 18 claims in issue that
were received by the carrier after August 13, 1981 and discussed infra.

FN21. For example, if the I.G. had submitted a sworn statement, the I.G. had
not listed Ms. Pearson as a witness, and the Respondent failed to attempt to
cross-examine her, I might have had a basis for determining that her sworn
statement supported findings asserted by the I.G., unless her sworn statement
was weak or equivocal.
END OF DOCUMENT