Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Mark D. Bornstein, D.P.M.,
Petitioner,
- v. -
The Inspector General.
DATE: January 17, 1990
Docket No. C-218
DECISION
This case is before me on Petitioner's request for a hearing to
contest his exclusion from participation in the Medicare program and
certain federally-assisted State health care programs.
By letter of January 26, 1990, the I.G. notified Petitioner that he
was being excluded from participation in the Medicare program, and
any State health care program (such as Medicaid), as defined in
section 1128(h) of the Social Security Act (Act). The I.G.'s notice
informed Petitioner that his exclusion resulted from his conviction
in the United States District Court for the Middle District of
Florida of a criminal offense related to the delivery of an item or
service under Medicare. The I.G. further informed Petitioner that
section 1128(a)(1) of the Act requires that individuals convicted of
such program-related offenses be excluded for a minimum period of
five years. The I.G. told Petitioner that he was being excluded for
the mandatory minimum five-year period.
Petitioner timely requested a hearing, and the case was assigned to
me for hearing and decision. The I.G. moved for summary disposition
of the case. Petitioner opposed the motion and cross-moved for an
evidentiary hearing. Neither party requested oral argument.
I have considered the parties' arguments, the undisputed material
facts, and the law. I conclude that there are no disputed questions
of material fact that would require an evidentiary hearing. I
further conclude that the exclusion imposed and directed by the I.G.
in this case is mandated by law. Therefore, I enter summary
disposition in favor of the I.G.
ISSUES
The issues in this case are whether:
1. Petitioner, who was convicted under a repealed and
recodified statute, was "convicted" of a criminal offense within the
meaning of section 1128(i) of the Act; and
2. The I.G. was required to exclude Petitioner for the
mandatory minimum five-year period prescribed by section 1128(a)(1)
of the Act.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. On October 31, 1988, Petitioner and the United States Attorney
for the Middle District of Florida (U.S. Attorney) entered into a
plea agreement. I.G. Ex. 1. 1/
2. Petitioner agreed to plead guilty to a misdemeanor violation of
42 U.S.C. 1395nn, knowingly causing to be made a false statement or
representation in an application for payment under the Medicare
program. I.G. Ex. 1.
3. Pursuant to the plea agreement, on or about November 1, 1988,
the U.S. Attorney filed an information in the United States District
Court for the Middle District of Florida charging that, on or about
September 8, 1984, Petitioner knowingly and willfully made and
caused to be made and presented to an agency of the United States a
claim for Medicare payments in the amount of $35.00 for podiatry
care which Petitioner knew or should have known was false,
fictitious, and fraudulent, a misdemeanor, in violation of 42 U.S.C.
1395nn. I.G. Mem. at 2; I.G. Ex. 2.
4. On March 7, 1989, Petitioner pled guilty to the charge contained
in the information. I.G. Ex. 3.
5. The court found Petitioner guilty and convicted him of making a
false statement in an application for payment under the Medicare
Program in violation of 42 U.S.C. 1395nn. I.G. Ex. 3.
6. The court sentenced Petitioner to one year of imprisonment,
which sentence was suspended, and placed Petitioner on probation for
a period of five years. The court further ordered Petitioner to pay
a $10,000 fine and a $90,000 payment under the False Claims Act and
to provide 1,000 hours of community service, as provided in the plea
agreement. I.G. Ex. 3.
7. On August 18, 1987, Congress enacted Public Law 100-93, which
repealed section 1877 of the Social Security Act (42 U.S.C. 1395nn)
and enacted a new section 1128B (42 U.S.C. 1320a-7b). Pub. L. No.
100-93, section 4, 101 Stat. 680, 688-89 (1987).
8. Section 1128B of the Social Security Act recodifies section
1877, which formerly governed fraud against the Medicare program,
and combines that section with section 1909, which formerly
contained the criminal provisions dealing with fraud against the
Medicaid program. S. Rep. No. 109, 100th Cong., 1st Sess. 17,
reprinted in 1987 U.S. Code Cong. & Admin. News 682, 698.
9. Section 1128B (42 U.S.C. 1320a-7b) criminalizes precisely the
same conduct covered by the former section 1877 (42 U.S.C. 1395nn).
10. Petitioner was convicted of a criminal offense within the
meaning of section 1128(i) of the Social Security Act. Findings 1-
6; Social Security Act section 1128(i).
11. Petitioner was convicted of a criminal offense related to the
delivery of an item or service under the Medicare program. Findings
1-6; Social Security Act section 1128(a)(1).
12. The Secretary of Health and Human Services (the Secretary)
delegated to the I.G. the authority to determine, impose, and direct
exclusions pursuant to section 1128 of the Social Security Act. 48
Fed. Reg. 21662 (May 13, 1983).
13. On February 15, 1990, the I.G. excluded Petitioner from
participating in Medicare and directed that he be excluded from
participating in Medicaid, pursuant to section 1128 of the Social
Security Act. I.G. Ex. 6.
14. There are no disputed issues of material fact in this case, and
summary disposition is appropriate.
15. The exclusion imposed and directed against Petitioner by the
I.G. is for five years, the minimum period required for exclusions
pursuant to section 1128(a)(1) of the Social Security Act. I.G. Ex.
6; Social Security Act section 1128(c)(3)(B).
16. The exclusion imposed and directed against Petitioner by the
I.G. is mandated by law. Finding 11; Social Security Act sections
1128(a)(1), 1128(c)(3)(B).
ANALYSIS
1. Petitioner was "convicted" of a criminal offense within the
meaning of section 1128(i) of the Act.
There are no disputed issues of material fact in this case.
Petitioner and the U.S. Attorney for the Middle District of Florida
entered into an agreement which provided that Petitioner would plead
guilty to a single misdemeanor count of making a false statement in
an application for payment under the Medicare program.
In November of 1988, the U.S. Attorney filed a criminal information
charging that, in 1984, Petitioner had made a false claim for
Medicare payment in the amount of $35.00. The U.S. Attorney
characterized this conduct as a violation of 42 U.S.C. 1395nn
(section 1877 of the Social Security Act). On August 18, 1987, the
U.S. Congress enacted Pub. Law No. 100-93, which repealed section
1877 of the Social Security Act and redesignated its substantive
provisions as section 1128B of the Act. Pub. L. No. 100-93, 101
Stat. 680, 688-89 (1987).
Petitioner pled guilty to the offense charged in the information.
The U.S. District Court for the Middle District of Florida found
Petitioner guilty and imposed a one year prison term, which was
suspended. The court placed Petitioner on five years' probation and
sentenced Petitioner to pay the fines and provide the community
service recited in his plea agreement.
Petitioner does not dispute that he pled guilty to the charge of
making a false claim against the Medicare program nor that the
United States District Court for the Middle District of Florida
accepted his plea and found him guilty of the charge. P. Mem. at 1.
However, he asserts that because the U.S. Attorney charged him with
violating 42 U.S.C. 1395nn (section 1877 of the Act), which was no
longer in force on the date the information was filed, his
conviction is fatally defective. Therefore, according to
Petitioner, he was not "convicted" of a criminal offense within the
meaning of sections 1128(i) and (a)(1). P. Mem. at 4.
The I.G. argues that Petitioner's contention amounts to a collateral
attack on his conviction. According to the I.G., I may not hear
such collateral attacks because my authority is limited to deciding
whether Petitioner was, in fact, convicted of a program-related
crime. I.G. Mem. at 5.
Petitioner counters that he is not asking me to reexamine the
underlying facts which led to his conviction. Rather, Petitioner
characterizes his argument as raising the legal question of whether
a conviction that he alleges is invalid can be the basis for his
exclusion from the Medicare and Medicaid programs. P. Mem. at 4-5.
In essence, Petitioner argues that a conviction under a repealed
statute should not be regarded as a "conviction" within the meaning
of section 1128(i) and therefore cannot require an exclusion under
section 1128(a)(1).
Under the applicable regulations, I am authorized to decide the
issues of whether: (1) the petitioner was, in fact, convicted; (2)
the conviction was related to the delivery of medical care or
services under the Medicare or Medicaid programs; and (3) the length
of the exclusion is reasonable. 42 C.F.R. 1001.128. Therefore, at
a minimum, I have authority to hear and decide whether a conviction
pursuant to a repealed and recodified statute is a "conviction"
within the statutory definition of section 1128(i).
Section 1128(i) defines the term "convicted" to include the
following dispositions of criminal cases:
(1) when a judgment of conviction has been entered against
the individual or entity by a Federal, State, or local court,
regardless of whether there is an appeal pending or whether
the judgment of conviction or other record relating to
criminal conduct has been expunged;
(2) when there has been a finding of guilt against the
individual or entity by a Federal, State, or local court;
(3) when a plea of guilty or nolo contendere by the
individual or entity has been accepted by a Federal, State, or
local court; or
(4) when the individual or entity has entered into
participation in a first offender, deferred adjudication, or
other arrangement or program where judgment of conviction has
been withheld.
It is apparent that Petitioner was "convicted" within the meaning
of
the statute. Petitioner's conviction meets the statutory definition
of subsection 1128(i)(2) in that the United States District Court
for the Middle District of Florida entered a finding of guilt
against Petitioner. I.G. Ex. 3; Finding 5. Petitioner was also
"convicted" within the meaning of subsection (i)(3) in that his
guilty plea was accepted by the court. I.G. Ex. 3; Finding 4.
Nothing in the statute supports Petitioner's contention that a
conviction under a repealed and recodified statute is not a
"conviction" for purposes of section 1128. 2/
Indeed, the statute, its legislative history, and the regulations
all require the conclusion that a conviction, once entered by a
federal, state, or local court, is a proper basis for an exclusion
unless or until that conviction is reversed or vacated. See H.R.
Rep. No. 727, 99th Cong., 2d Sess. 75, reprinted in 1986 U.S. Code
Cong. & Admin. News, 3607, 3665. See also 42 C.F.R. 1001.136.
Thus, the I.G. correctly argues that Petitioner's remedy, if he
believes his conviction to be unlawful, is to seek reversal of that
conviction by the U.S. District Court or the U.S. Court of Appeals.
Based on my analysis of the law, I conclude that Petitioner was
"convicted" of a program-related offense within the meaning of
section 1128(a)(1) of the Act. Therefore, the five-year exclusion
imposed and directed by the I.G. is required by law.
2. The exclusion imposed and directed against Petitioner is
required under sections 1128(a)(1) and 1128(c)(3)(B) of the Act.
Section 1128(a)(1) of the Act requires the I.G. to exclude from
participation in the Medicare and Medicaid programs individuals and
entities that 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, 838
(E.D. Tenn. 1990), affirming Jack W. Greene, DAB App. 1078 (1989).
Section 1128(c)(3)(B) provides that, where mandatory exclusions are
imposed, the minimum length of such exclusions shall be for five
years.
Petitioner argues that his exclusion is not required for the
mandatory minimum five-year period specified in section
1128(c)(3)(B) of the Act because, in his view, his conviction falls
within the permissive exclusion provisions of section 1128(b)(1)
rather than the mandatory exclusion provisions of section
1128(a)(1). Petitioner's argument is that because he was convicted
of a criminal offense related to "fraud, theft, embezzlement, breach
of fiduciary responsibility, or other financial misconduct," his
conviction is within the ambit of section 1128(b)(1). P. Mem. at 5.
This argument has been fully addressed in the Greene decisions cited
above. Those decisions make clear that where, as here, financial
crimes, such as fraud, theft, or embezzlement are committed in
connection with the rendering of services under the Medicare or
State health care programs, section 1128(a)(1) mandates exclusion.
By contrast, section 1128(b)(1) applies to convictions for financial
misconduct committed against programs other than Medicare and State
health care programs. The fraud committed by Petitioner was
directed against the Medicare program. Accordingly, his exclusion
is governed by section 1128(a)(1).
The I.G. has imposed and directed Petitioner's exclusion for the
mandatory minimum five year period required under section
1128(c)(3)(B) of the Act. Because I have concluded that the I.G.
correctly determined that Petitioner was convicted of an offense as
defined by section 1128(a)(1) of the Act, Petitioner's exclusion for
a period of five years is required as a matter of law.
CONCLUSION
Based on the undisputed material facts and the law, I conclude that
the I.G.'s determination to exclude Petitioner from participation in
Medicare and to direct that Petitioner be excluded from
participation in any State health care program, for five years, was
mandated by law. Therefore I am entering a decision in favor of the
I.G. in this case.
___________________________
Steven T. Kessel
Administrative Law Judge
* * * Footnotes * * *
1. The parties' exhibits and memoranda will be cited as
follows:
I.G. Exhibit I.G. Ex. (number)
Memorandum of the I.G. I.G. Mem. at (page)
Memorandum of
Petitioner P. Mem. at (page)
2. I note that the assumption underlying Petitioner's
argument--namely, that his conviction under section 1877 of the Act
is invalid--is of doubtful merit. The conduct which gave rise to
Petitioner's conviction occurred in 1984. At that time, section
1877 was in full force and effect; it was not repealed until 1987.
Title 1 section 109 of the U.S. Code contains a general savings
provision governing the effect of repeals of federal statutes. That
section specifies that existing liabilities are not extinguished by
the repeal of a statute:
The repeal of any statute shall not have the effect to release
or extinguish any penalty, forfeiture, or liability incurred
under such statute, unless the repealing Act shall so
expressly provide, and such statute shall be treated as still
remaining in force for the purpose of sustaining any proper
action or prosecution for the enforcement of such penalty,
forfeiture, or liability.
Thus, the repeal of section 1877 very likely does not render
Petitioner's conviction invalid.
Moreover, as the I.G. correctly points out, the substantive
provisions of section 1877 of the Act were not simply repealed, but
were, in essence, relocated to another section of the Act--section
1128B. This fact only serves to make more plain that Congress fully
intended to continue to impose criminal liability for fraud against
the Medicare program. That the U.S. Attorney charged Petitioner
with violating the statutory section in force at the time Petitioner
filed the false claim to which he pled guilty, rather than the
section in force at the time the information was filed, is
immaterial.