Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Suwonnee Pongnorsing,
Petitioner,
- v. -
The Inspector General.
DATE: November 14, 1990
Docket No. C-231
DECISION
In this case, governed by section 1128 of the Social Security Act
(Act), Petitioner filed a timely request for a hearing before an
Administrative Law Judge (ALJ) to contest the February 12, 1990
notice of determination (Notice) issued by the Inspector General
(I.G.) which excluded Petitioner from participating in the Medicare
and any State health care programs for five years. 1/
Based on the entire record before me, I conclude that summary
disposition is appropriate in this case, that Petitioner is subject
to the minimum mandatory exclusion provisions of sections 1128(a)(1)
and 1128(c)(3)(B) of the Act, and that Petitioner's exclusion for a
minimum period of five years is mandated by federal law.
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.
Section 1128 of the Social Security Act (Act) is codified at 42
U.S.C. 1320a-7 (West U.S.C.A., 1989 Supp.). Section 1128(a)(1) of
the Act provides for the exclusion from Medicare and Medicaid of
those individuals or entities "convicted" of a criminal offense
"related to the delivery of an item or service" under the Medicare
or Medicaid programs. Section 1128(c)3)(B) provides for a five year
minimum period of exclusion for those excluded under section
1128(a)(1).
II. The Federal Regulations.
The governing federal regulations (Regulations) are codified in 42
C.F.R. Parts 498, 1001, and 1002 (1989). Part 498 governs the
procedural aspects of this exclusion case; Parts 1001 and 1002
govern the substantive aspects.
BACKGROUND
The I.G.'s Notice alleged that Petitioner was convicted of a
criminal offense related to the delivery of an item or service under
the Medi-Cal program and advised Petitioner that the law required a
five-year minimum exclusion from participation in the Medicare and
Medi-Cal programs for individuals convicted of a program-related
offense. Petitioner requested a hearing to contest the I.G.'s
determination and the case was assigned to me for hearing and a
decision.
I conducted a prehearing conference in this case on May 11, 1990,
and issued a prehearing Order on May 17, 1990, which established a
schedule for filing motions and responses. On June 19, 1990, the
I.G. requested an extension of time in which to file his motion for
summary disposition in this matter, to which Petitioner made no
objection. On July 26, 1990, the I.G. filed a motion for summary
disposition, with a supporting memorandum attached. On August 24,
1990, Petitioner filed a response to the I.G.'s motion for summary
disposition, and on August 27, 1990 Petitioner filed a supplemental
response. I heard oral argument on September 12, 1990. It is my
usual practice to tape record such arguments and to retain the tape
in the record. Due to difficulties with the recording equipment,
however, this argument was not recorded. On September 17, 1990, I
gave the parties ten days to decide whether to again present oral
argument or to prepare written summaries of their arguments. They
chose to forego the opportunity to do either, and elected instead to
have me base my decision on their written submissions already in the
record and on the oral argument I heard on September 12, 1990.
ADMISSIONS
Petitioner admits that she was "convicted," within the meaning of
section 1128(i), of the misdemeanor offense of violating California
Business and Professions Code section 4227(a) (dispensing a drug
without a valid prescription).
ISSUES
1) Whether Petitioner was convicted of a criminal offense "related
to the delivery of an item or service" under the Medicaid program
within the meaning of section 1128(a)(1) of the Act.
2) Whether Petitioner is subject to the minimum mandatory five-year
exclusion provisions of section 1128(c)(3)(B) of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 2/ 3/
Having considered the entire record, the arguments and the
submissions of the parties, and being advised fully herein, I make
the following Findings of Fact and Conclusions of Law:
1. Petitioner is a licensed pharmacist in the State of California.
P. Ex. B/1.
2. At all times relevant to this case, Petitioner was the owner of
the Modesto and Westside Pharmacies. P. Ex. B/1 - 2.
3. Petitioner pled guilty to Count VI of a Second Amended Felony
Complaint issued by the Municipal Court of Stanislaus County,
California. I.G. Ex. 4, 5; P. Ex. A.
4. Count VI alleged that "on or about June 29, 1988 . . .
(Petitioner) . . . willfully and unlawfully furnished a dangerous
drug, to wit, ampicillin, upon a prescription that was not from a
physician, dentist, podiatrist, or veterinarian in violation of
section 4227(a) of the Business and Professions Code, a
misdemeanor." I.G. Ex. 4/17.
5. Imposition of sentence was suspended. Petitioner was placed on
36 months probation and ordered to pay a $1,000 fine by July 14,
1989. I.G. Ex. 5.
6. "Medi-Cal" is the name for California's Medicaid program and it
is a State health care program as defined by section 1128(h). I.G.
Br. 1.
7. Petitioner's indictment by the Municipal Court of Stanislaus
County on several counts, including Count VI, came as a result of an
investigation by the Medi-Cal Fraud Unit of the State of California
Department of Justice into the Medi-Cal billing and patient care
practices of the Indochinese Medical Clinic, near which Petitioner
had located her Westside Pharmacy. I.G. Ex. 1/22 - 23, 32, 55 - 57,
60, 70, 108, 111, 124, 160 - 163; I.G. Ex. 4; P. Ex. B/2.
8. An Huc Ngo was the name given to undercover operative SA-J-001.
An Huc Ngo's Medi-Cal card, employed for purposes of this
investigation, was 50350193671101. I.G. Ex. 1/9, 37.
9. Count VI was based upon a prescription presented to Petitioner
on June 30, 1988 at her Modesto Pharmacy. I.G. Ex. 1/161 - 163.
4/
10. The prescription was written on June 29, 1990, for Anh Huc Ngo,
for 40 tablets (250 ml.) of Ampicillin. I.G. Ex. 1/160 - 163.
11. An Huc Ngo presented the prescription to Petitioner on June 30,
1988, along with his photocopied Medi-Cal card number 50350193671101
as payment. An Huc Ngo was then given the Ampicillin. I.G. Ex. 1/
160 - 163.
12. Petitioner filed a claim for payment with Medi-Cal for the
Ampicillin which is the subject of Count VI. I.G. Ex. 12, 13, 14.
13. Medi-Cal paid Petitioner for the Ampicillin which is the
subject of Count VI. I.G. Ex. 15.
14. On February 12, 1990, the I.G. excluded Petitioner from
participating in the Medicare and Medicaid programs for a period of
five years.
15. The Secretary of DHHS (the Secretary) delegated to the I.G. the
authority to determine, impose, and direct exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21662 (May 13, 1983); 42 U.S.
C. 3521 et seq.
16. Since the material facts are undisputed in this case, the
classification of Petitioner's conviction of a criminal offense as
subject to the authority of 1128(a)(1) is a legal issue.
17. Summary disposition is appropriate in this case. See 56
F.R.C.P.
18. Petitioner was "convicted" of a criminal offense within the
meaning of section 1128(a) and 1128(i) of the Act.
19. Petitioner was convicted of a criminal offense "related to the
delivery of an item or service" under the Medi-Cal program within
the meaning of section 1128(a)(1) of the Act.
20. A minimum mandatory exclusion of five years is required in this
case by section 1128(c)(3)(B) of the Act.
DISCUSSION
I. Petitioner's Conviction Was "Related To The Delivery Of An Item
Or Service" Within The Meaning Of Section 1128 Of The Act.
Sections 1128(a)(1) and 1128(c)(3)(B) of the Act require the I.G. to
exclude individuals and entities from the Medicare and Medicaid
(Medi-Cal) programs when individuals and entities have been
"convicted" of a criminal offense "related to the delivery of
an
item or service" under the Medicare or Medicaid programs. See
Greene v. Sullivan, 731 F. Supp. 835 and 838 (E.D. Tenn. 1990),
affirming Jack W. Greene, DAB App. 1078 (1989). Petitioner admits
that she was convicted under section 1128(i), but argues that her
conviction contained no reference to the Medicare or Medi-Cal
programs.
I find, however, that the I.G. has established through collateral
evidence that this conviction was "related to the delivery of an
item or service" under the Medi-Cal program. As I held in Clarence
H. Olson, DAB Civ. Rem. C-85 at 7 (1989), and as I reiterated in Hai
Nuh Bui, DAB Civ. Rem. C-103 (1990) and Essa Abdulla, M.D., DAB Civ.
Rem. C-211 (1990), the issue of whether a conviction is program-
related should not be decided in a vacuum or with a strict
hypertechnical interpretation of the term "related to." It is
appropriate for me to consider all relevant documents pertaining to
the trial court proceeding. This includes any evidence which
explains or assists me in determining whether the criminal offense
to which she pled guilty relates to the Medi-Cal program.
Petitioner pled guilty to Count VI of a second amended felony
complaint, I.G. Ex. 4. Count VI states on its face that it is
"connected in the Commission of Count I." Count I, while alleging
various acts for which Petitioner has not been convicted, alleges in
"Overt Act No. 12," that "said defendant Suwonnee Pongnorsing
in the
County of Stanislaus on or about June 29, 1988 in her capacity as
pharmacist did fill a prescription signed by K. Quinn, R.N." It is
this act which is made the basis of Count VI. To determine whether
this act is related to the delivery of an item under the Medi-Cal
program, I refer to the Report of Investigation, I.G. Ex. 1. 5/
The specific act to which Petitioner pled guilty was to having
"willfully and unlawfully furnish(ed) a dangerous drug, to wit,
ampicillin, upon a prescription that was not from a physician,
dentist, podiatrist, or veterinarian in violation of section 4227(a)
of the Business and Professions Code, a misdemeanor." The I.G.
proved, through use of the Medi-Cal Fraud Unit's "Report of
Investigation", I.G. Ex. 1, that this prescription for Ampicillin
was written for a Medi-Cal patient, and that Petitioner furnished
goods, i.e. the Ampicillin, to that Medi-Cal patient. The I.G. also
proved that Petitioner then sent a claim in for payment to the Medi-
Cal program, and the Medi-Cal program paid Petitioner for furnishing
the Ampicillin. FFCL 3 - 13. Petitioner pled guilty to a specific
offense, and that offense is a violation of sections 1128(a)(1) and
1128(c)(3)(B).
Petitioner argues that this result does not comport with
Congressional intent, and she lists factors which she alleges should
mitigate her exclusion. Petitioner states that excluding her would
mean that any pharmacy who accepted a prescription such as the one
in this case, filled it and then sent in a claim for it, would be
subject to an exclusion. P. Br. 10 - 11. Petitioner asserts that
she did not know the prescription was unlawful and that she did not
intend to circumvent any laws. P. Br. 8, 10. Furthermore,
Petitioner asserts that a pharmacist is entitled to rely on the
validity of a prescription such as the one contained in Count VI.
P. Br. 8 - 10. Petitioner also stresses that if she had known she
would be excluded she would not have made her plea. P. Ex. B/5 - 6.
Petitioner offers collateral evidence in support of her
contentions.
As was held in Thomas M. Cook, DAB Civ. Rem. C-106, however, "it is
consistent with Congressional intent to admit evidence which
explains the circumstances of the offense of which a party is
convicted." In this case the only extrinsic evidence necessary to
establish whether Petitioner was convicted of an offense within the
meaning of section 1128(a)(1) is the Report of Investigation which
is contained in Ex. 1. Evidence of the degree of Petitioner's guilt
is not relevant. Where the I.G. has imposed a five year minimum
mandatory exclusion under sections 1128(a)(1) and 1128(c)(3)(B), I
do not have the authority to reduce the length of the exclusion.
6/ Petitioner's conviction required the I.G. to impose and direct
her exclusion. Petitioner pled guilty to furnishing that Ampicillin
without a valid prescription. Her reasons for making that plea are
not relevant here. Also, Petitioner's attacks on the validity of
her conviction are not a basis on which I can set aside or modify
her exclusion.
I conclude that the I.G. has demonstrated the necessary relationship
between Petitioner's "conviction" and the "delivery of an item
or
service" under the Medicaid program. Accordingly, I find that
Petitioner was convicted of a criminal offense related to the
delivery of an item or service within the meaning of section
1128(a)(1) of the Act.
II. A Minimum Mandatory Five Year Exclusion Is Required In This
Case.
Section 1128(c)(3)(B) of the Act provides for a minimum exclusion
period of five years for program-related exclusions. As I have
concluded, the I.G. correctly determined that Petitioner was
convicted of an offense as defined by sections 1128(a)(1) and
1128(i) of the Act. Congressional intent on this matter is clear:
A minimum five-year exclusion is appropriate, given the
seriousness of the offenses at issue . . . . Moreover,
a mandatory five-year exclusion should provide a clear
and strong deterrent against the commission of criminal
acts.
S. Rep. No. 109, 100th Cong., 1st Sess. 2, reprinted in 1987 U.S.
Code Cong. & Admin. News 682, 686. Accordingly, I conclude that the
I.G.'s exclusion of Petitioner for a period of five years is
required by section 1128(c)(3)(B) of the Act.
III. Summary Disposition Is Appropriate In This Case.
The issue of whether the I.G. had the authority to exclude
Petitioner under Section 1128(a)(1) is a legal issue. I have
concluded as a matter of law that Petitioner was properly excluded
and that the length of his exclusion is mandated by law. There are
no genuine issues of material fact which would require the
submission of additional evidence, and there is no need for an
evidentiary hearing in this case. Accordingly, the I.G. is entitled
to summary disposition as a matter of law. See Charles W. Wheeler
and Joan K. Todd, DAB App. 1123 at 10 (1990), and Rule 56 F.R.C.P.
CONCLUSION
Based on the law and undisputed facts in the record of this case, I
conclude the I.G. properly excluded Petitioner from the Medicare and
Medicaid programs for the minimum mandatory period of five years.
IT IS SO ORDERED.
Charles E. Stratton
Administrative Law Judge
* * * Footnotes * * *
1. "State health care program" is defined by section
1128(h) of the Act to cover three types of federally-financed health
care programs, including Medicaid. I use the term "Medicaid"
hereafter to represent all State health care programs from which
Petitioner was excluded. The Medicaid program in California is
called Medi-Cal.
2. The citation to the record in this Decision and Order
is noted as follows:
I.G.'s Exhibit I.G. Ex. (number)/(page)
I.G.'s Brief I.G. Br. (page)
Petitioner's Exhibits P. Ex. (number)/(page)
Petitioner's Brief P. Br. (page)
Petitioner's Supplemental P. Supp. Br. (page)
Brief
Finding of Fact and FFCL (number)
Conclusion of Law
3. Some of my statements in the sections preceding these
formal findings and conclusions are also Findings of Fact and
Conclusions of Law. To the extent that they are not repeated here,
they were not in controversy.
4. The prescription Ampicillin for Anh Huc Ngo also
contained a prescription for Mylanta Liquid. Also, one other
fictitious prescription was presented at the same time: a
prescription for Mylanta Liquid and Erythromycin for Minh Van
Nguyen. I.G. Ex. 1/160 - 163.
5. Petitioner came to the attention of the Medi-Cal Fraud
Unit during the Medi-Cal Fraud Unit's investigation of the
Indochinese Medical Clinic. Petitioner's conviction, however, is
not predicated on anything having to do with the Indochinese Medical
Clinic itself. The Medi-Cal Fraud Unit's investigation of
Petitioner stands alone as it relates to Count VI. FFCL 7 - 13. It
is not necessary for the I.G. to establish that Petitioner was a
knowing participant in any alleged wrongdoing on the part of the
Indochinese Medical Clinic to establish a nexus between Petitioner
and the delivery of an item under the Medi-Cal program.
6. If the exclusion were for more than five years, I would
have the authority to consider the reasonableness of the length of
that part of the exclusion that was over five years.