Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Baron L. Curtis,
Petitioner,
- v. -
The Inspector General.
DATE: March 21, 1991
Docket No. C-306
DECISION
In this case, governed by section ll28 of the Social
Security Act, Petitioner requested a hearing before an
administrative law judge (ALJ) to contest the December
27, l989 notice of determination (Notice) issued by the
Inspector General (I.G.).
By letter dated December 27, l989, the Inspector General
(I.G.) advised Petitioner that he was being excluded
from participation in the Medicare and State health care
programs based on the fact that he had been convicted,
within the meaning of section ll28(i) of the Social
Security Act, of a criminal offense related to the
delivery of an item or service under Medicaid. 1/
Petitioner was further informed that exclusions from
participation in Medicare and Medicaid of individuals
convicted of such an offense are mandated by section
ll28(a)(1) of the Social Security Act for a minimum
period of five years. He was advised that his exclusion
was for the minimum five-year period.
Petitioner timely requested a hearing, and the case was
assigned to ALJ Charles E. Stratton for hearing and
decision. After a prehearing telephone conference which
was conducted by Judge Stratton, the I.G. filed a motion
for summary judgment. Petitioner filed an opposition.
On November 2, l990, the parties agreed that the matter
was appropriate for summary disposition on the basis of
their stipulation of facts. The case was subsequently
reassigned to me for decision.
ISSUES
1. Whether Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicare or Medicaid, within the meaning of section
ll28(a)(1) of the Social Security Act.
2. Whether the mandatory provisions of section
ll28(c)(3)(B) apply to the facts of this case.
FINDINGS OF FACTS AND CONCLUSIONS OF LAW
l. Petitioner, a pharmacist, has been the sole owner of
Metrocare Center Pharmacy, 6323 Georgia Avenue N.W.,
Washington, D.C., since June l986. Stipulations 1 and
2. 2/
2. By information dated April 5, l988, the Corporation
Counsel for the District of Columbia charged Petitioner
with 142 counts of violation of D.C. Code section
3-702(b((3) (l985 Supp.). Stip. 3.
3. The April 5, l988 Information charged that Petitioner
had committed "Medicaid Provider Fraud" on 142 specified
dates at the MetroCare Center Pharmacy, 6323 Georgia
Avenue, N.W., Washington, D.C., as indicated in the 142
counts of violation of D.C. Code section 3-702(b)(3)
(l985 Supp.) in that he did, in dispensing medication,
"with intent to defraud, by means of a false claim, false
statement, and a failure to disclose information, obtain
payment from the District of Columbia as a District of
Columbia Medicaid provider, for an item and service that
he knew and had reason to know was not provided as
claimed." Stip 4.
4. Petitioner pled guilty to 15 of the 142 counts in the
April 5, l988 Information. All l5 counts charged
Medicaid fraud. Stip. 5.
5. Petitioner's plea of guilty was accepted by the court.
6. By Judgment and Probation Order dated June l9, l989,
the Superior Court of the District of Columbia sentenced
Petitioner to 60 days incarceration and $50.00 fine,
sentences to run concurrently on each of the 15 counts of
Medicaid fraud to which Petitioner had pled guilty. The
court suspended imposition of sentence and placed
Petitioner on probation for l5 months, supervised, and
ordered Petitioner to make restitution of $3,500.00 to
the District of Columbia Office of Health Care Financing.
The court assessed Petitioner costs of $150.00 and
ordered Petitioner to complete l00 hours of community
service. Stip. 6.
7. On July 26, l990, the I.G. notified Petitioner of his
exclusion for five years from the Medicare and Medicaid
programs. Stip. 9.
8. The District of Columbia, as a District of Columbia
Medicaid provider, is a federally financed State health
care program as defined by section ll28(h) of the Social
Security Act. 42 C.F.R. l00l.123(a)(5) and 42 C.F.R.
l00l.30.
9. Petitioner was "convicted" of a criminal offense
within the meaning of sections ll28(a) and ll28(i) of the
Act. Findings l-8; Social Security Act, sections
1128(a)(1) and 1128(i).
10. Petitioner was convicted of a criminal offense which
was "related to the delivery of an item or service"
under a State health care program, within the meaning of
section 1128(a)(1) of the Act. Findings l-9; Social
Security Act, sections 1128(a)(1) and 1128(i).
11. Pursuant to section 1128(a)(1) of the Social Security
Act, the Secretary is required to exclude Petitioner from
participation in Medicare and to direct his exclusion
from participation in Medicaid. Social Security Act,
section 1128(a)(1).
12. The minimum mandatory period of exclusion for
exclusions pursuant to section ll28(a) of the Social
Security Act is five years. Social Security Act, section
1128(c)(3)(B).
13. The Secretary delegated to the I.G. the duty to
impose and direct exclusions pursuant to section 1128 of
the Social Security Act. 48 Fed. Reg. 21662 (May l3,
l983); 42 U.S.C. 3521.
14. The exclusion imposed and directed against Petitioner
by the I.G. is mandated by law. Findings l-13; Social
Security Act, section 1128(a).
ANALYSIS
The agreed upon facts show that Petitioner was charged
in an Information filed in the Superior Court for the
District of Columbia with 142 counts of making false
claims to the D.C. Medicaid program and obtaining
reimbursement based thereon. The Information charged
that Petitioner, a pharmacist, had filled prescriptions
with generic drugs but billed Medicaid for brand name
drugs and/or that he had billed for services he had not
provided at all. After plea negotiations with the
prosecutor, Petitioner pled guilty to l5 counts of the
Information and the remaining counts were nolle prossed.
Petitioner's guilty plea was accepted by the court. As a
result of his conviction, the I.G. notified Petitioner
that he would be excluded from participation in the
Medicare and Medicaid programs and that his exclusion was
mandatory for a minimum period of five years under
section ll28(a)(l) of the Social Security Act.
Having reviewed all of the evidence and the arguments
made, I conclude that the exclusion imposed by the I.G.
in this case is mandatory under the law. Therefore, I
enter summary disposition in favor of the I.G.
1. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicare or Medicaid, within the meaning of section
ll28(a)(1) of the Social Security Act.
Petitioner contends that he should not be subject to
exclusion under section ll28(a)(1). Although he concedes
that his conviction after his plea of guilty in the
Superior Court of the District of Columbia constitutes a
"conviction" for the purposes of section ll28(a) of the
Social Security Act, he argues that his plea of guilty
was "not supported by a sufficient factual determination
as to the specific counts of his conviction" to show that
his conviction was for a program-related offense.
(Petitioner`s Brief page 5) 3/. He contends that the
circumstances surrounding his plea of guilty should be
considered in determining whether he was convicted of a
program-related violation. Petitioner points to the fact
that his conviction was not the result of a trial on the
merits. He states that his plea agreement with the
Corporation Counsel for the District of Columbia allowed
him to enter a guilty plea to any 15 counts of the 142 in
the Information and asserts that since the government
allowed him to choose the specific counts for his pleas,
the government was not making a factual determination as
to the merits of any particular count. He claims that he
pled guilty simply because he had no desire to contest
the indictment in a trial on the merits. He maintains he
was not admitting guilt as to any of the counts and
asserts that his plea for all practical purposes was a
nolo contendere plea. (P's Br. pp. 5-6).
Petitioner's argument that there is not a sufficient
factual basis in the record to support a finding that his
conviction was for a program-related crime under section
1128(a)(1) is without merit. The I.G. argues that under
the facts and the law, Petitioner's conviction is clearly
for a program-related offense. I agree. The undisputed
facts show that the Petitioner's plea of guilty to 15
counts in the Information was accepted by the court.
Further, each count to which he pled guilty charged that
Petitioner violated the District of Columbia Medicaid
Provider Fraud Prevention statute in that he
intentionally defrauded, by making false claims for
Medicaid reimbursement, the District of Columbia Medicaid
program. (Stip. 5). Underlying the Information were
charges that Petitioner submitted claims and received
reimbursement for medications which were not provided as
claimed (i.e., he filled prescriptions with a generic
drug and billed for a brand name drug) or which were not
provided at all. As the I.G. has noted, the charges on
their face show a program-related violation.
Moreover, that Petitioner was allowed to select which
l5 counts of the 142 he would plead guilty to is of no
significance. Each and every one of the 142 counts
charged that he submitted a false claim for Medicaid
reimbursement (Inspector General Exhibit E and Stip.4)
4/. Therefore, it did not matter which l5 of the counts
he chose.
Further, it does not matter that Petitioner was not
convicted after a trial on the merits. By his pleas of
guilty, he admitted that he intentionally defrauded the
District of Columbia Medicaid program, since such intent
was an element of the offenses to which he pled guilty.
5/ His pleas were accepted by the court which found him
guilty of the 15 counts to which he pled. Ex.D. These
15 counts charged program-related offenses.
Whether Petitioner intended to admit to the factual
predicate which would establish guilt is not material to
the determination as to whether he was convicted of a
criminal offense which is related to the delivery of an
item or service under Medicaid within the meaning of
section 1128(i). It is not the Petitioner's guilt that
has to be determined, but rather the fact of his
conviction. Charles W. Wheeler, DAB App. 1123 (l990).
The ALJ is not to delve into the underlying facts to
determine guilt. If Petitioner desires to challenge the
sufficiency of the facts which support the finding of
guilty, he is in the wrong forum. That challenge must be
raised in the trial court - - in this case the Superior
Court of the District of Columbia. See Wheeler at ll23;
Andy E. Bailey DAB App. ll3l (l990).
Petitioner's contention that I should consider the
circumstances he alleged to have surrounded his plea --
that he entered into a plea agreement simply because he
did not want to challenge the l42 counts at trial; that
he was allowed to choose which of the l5 counts he pled
to so that his guilt on any one count was not established
by the prosecutor; and that he was promised by the D.C.
prosecutor that his medical license and his Medicaid
privileges would not be restricted -- must be rejected.
The underlying facts about the plea agreement are not
material to this proceeding. They do not go to the fact
of the conviction, but rather the correctness of the
charges brought by the D C. Corporation Counsel, which is
not relevant to the issues before me.
The allegations in this case are very similar to those
made by the petitioners in Wheeler. In that case, the
petitioners, in challenging their exclusion from
participation in the Medicare and Medicaid programs, had
entered "Alford" pleas to a program-related offense.
They alleged that they pled guilty, not because they were
guilty, but because they wanted to avoid the strain of a
trial. In that case, the Board concluded that the
underlying facts of the plea agreement were not relevant
to the issues before the ALJ in the exclusion proceeding.
It concluded that the important fact was that the pleas
were accepted by the trial court, "which is all that
section 1128(i) requires." DAB App. 1123 at 9.
Based on the Board's ruling in Wheeler, I conclude that
the proper forum for any challenge to the validity of
Petitioner's plea of guilty, and the acceptance by the
trial court, is in that court, not in this administrative
proceeding.
Petitioner argues that his conviction was for acts
related to financial misconduct or billing errors and
does not fall within the scope of the provision of the
mandatory exclusion law. The I.G. relies on the decision
in the case of Jack W. Greene, DAB App. l078 (l989),
aff'd sub nom Greene v. Sullivan, 731 F. Supp. 835 (E.D.
Tenn. l990). Petitioner argues that the Greene decision
is inconsistent with the clear language of the statute.
He urges that Greene not be followed in his case.
The argument made by Petitioner here (described in the
preceding paragraph) also was made by the petitioner in
the Greene case. The petitioner in that case was a
pharmacist who, like Petitioner, was convicted of falsely
billing Medicaid for brand name drugs for prescriptions
he filled with generic drugs. In specifically rejecting
Greene's argument that his violation was a "financial" or
"billing" violation which was not covered by section
1128(a)(1), the Board held:
[The] . . . offense is directly related to the
delivery of the item or service since the submission
of a bill or claim for Medicaid reimbursement is the
necessary step, following the delivery of the item
or service, to bring the `item' within the purview
of the program.
DAB App. l078 at 7. In reaching their decision in
Greene, the Board reviewed the legislative history of
sections ll28(a) and ll28(b). DAB App. l078.
DeWayne Franzen, DAB App. ll65 (l990) (decided after
Greene), is another case where a pharmacist was convicted
of dispensing to Medicaid patients generic drugs in lieu
of brand name drugs billed to Medicaid. The Board noted
its holding in Greene and reiterated two ways that the
conviction was 'related' to Medicaid (at p. 7):
First, program recipients failed to receive drugs
consistent with prescription labels . . . Second,
the program was billed for the higher priced brand
named drugs rather than the generic drugs actually
dispensed . . . As such, Petitioner's action
resulted in an overpayment by the Medicaid program.
The program is authorized to pay only for drugs
within the limitations of state and federal laws.
Since Petitioner's actions resulted both in the receipt
by Medicaid patients of drugs not consistent with that
shown on their prescription labels, and excess expenses
paid by the Medicaid program of at least $3500.00, it
harmed the Medicaid program and was "related to the
delivery of an item or service" under Medicaid.
As indicated, the Board's decision in Greene was affirmed
by the U. S. District Court. The criminal violations for
which Petitioner was convicted are essentially the same
as those in Greene and Franzen. Petitioner cites no
authority for his position nor does he set forth any
cogent argument which persuades me that the holding in
Greene is inconsistent with the language of the statute.
Thus, I find that section ll28(a)(1) was intended to
reach convictions of criminal violations for "financial"
offenses which harm the Medicare and Medicaid programs.
Petitioner's conviction for filing false claims for
Medicaid reimbursement is a conviction within the meaning
of section 1128(a)(1).
I find also that Petitioner's offense was "related to the
delivery of an item or service" under the Medicare and
Medicaid programs, within the meaning of section
1128(a)(l) of the Act.
2. Based on Petitioner's conviction for a criminal
offense related to the delivery of an item or service
under the Medicaid program, the I.G. was required to
exclude Petitioner from participation in the Medicare
program and to direct his exclusion from the Medicaid
program for a minimum of five years.
Having determined that Petitioner was convicted of a
criminal offense related to the delivery of an item or
service under Medicaid, I will now discuss the
reasonableness of the exclusion. The I.G. applied
section 1128(c)(3)(B), which provides for a mandatory
exclusion for a minimum period of five years. Petitioner
asserts that his conviction "was for acts related to
financial misconduct" and does not fall within the scope
of the mandatory exclusion law at section 1128(a)(1), but
rather within the permissive exclusion provisions of
section 1128(b). I have already found that the
conviction falls under section ll28(a)(1) in this case.
Petitioner would not prevail even if I were to conclude
that his conviction might also trigger an exclusion under
1128(b)(1) or ll28(b)(6). The I.G. has no discretion to
choose under which section to proceed. Where a
conviction falls under section ll28(a)(1), the I.G. is
required to impose a mandatory minimum exclusion. The
statute gives the Secretary no option to choose between
ll28(a) and ll28(b). Therefore, the ALJ need not first
consider whether the offense falls under ll28(b). Samuel
W. Chang, M.D., DAB App. ll98 at 8 (1990); Charles W.
Wheeler, DAB App. ll23 at 6 (l990); Leon Brown, M.D., DAB
App. l208 at 4 (l990).
Since Petitioner's criminal violation fell under
1128(a)(1), the I.G. was required to exclude his
participation for a mandatory five year period.
Finally, Petitioner argues that he should not be excluded
from participation in the Medicaid program because the
prosecutor in the Office of the D.C. Corporation Counsel
promised him, as a part of his plea agreement, that there
would be no referral to any government agency and that
his Medicaid privileges would not be restricted.
He asserts he would not have entered the guilty plea had
he known that it would lead to his exclusion from
participating in the Medicaid program. 6/ He argues
that, under the circumstances of the plea agreement, his
exclusion would not be consistent with the intention of
section 1128(a)(1). However, this is not the proper
forum for Petitioner to challenge the voluntariness of
his guilty plea.
The allegations stated above are essentially the same as
those made by the petitioner in Wheeler. In that case,
petitioners claimed they pled guilty (entered an "Alford"
plea) in large part because they were assured by the
state prosecutor that they would not be excluded from
participating in the Medicaid and Medicare programs if
they did so. They sought an evidentiary hearing to
establish the underlying conduct surrounding their pleas.
In upholding the ALJ's ruling that no hearing was
required in the case, the Board stated:
The proffered testimony that a misrepresentation was
made to the Petitioners about the effect of their
pleas on participation in Medicare and Medicaid
would not necessarily establish that their pleas
were not properly accepted by the State court . . .
In any event, the proper forum for any challenge to
the validity of their pleas, and their acceptance by
the State court, is in State court and not in this
administrative proceeding.
DAB App. ll23 at 9. The Board has held in other cases
that arguments about the process leading to a
Petitioner's criminal conviction are completely
irrelevant to an exclusion proceeding. See David S.
Muransky, DAB App. l227 at 5 (l99l), citing the decision
of the Board in Andy E. Bailey, DAB App. 1131 at 3
(l990).
Since there is no dispute that the Petitioner was
convicted of the 15 counts charging Medicaid fraud, I
hold that Petitioner's exclusion was mandated based on
the facts in his case and that section ll28(c)(3)(B)
gives the Secretary no discretion to reduce the period of
exclusion below five years.
CONCLUSION
Having considered all of the evidence and arguments
presented in this case, I find that the Petitioner was
convicted of an offense which was related to the delivery
of an item or service under a State health care plan and
that his exclusion by the I.G. from participation in the
Medicare and Medicaid programs for a period of five years
is required under the provisions of sections 1128(a)(1)
and ll28(c)(3)(B) of the Act and is therefore reasonable.
_____________________________
Constance T. O'Bryant
Administrative Law Judge
* * * Footnotes * * *
1. "State health care program" is defined by
section 1128(h) of the Social Security Act to cover three
types of federally financed programs, including Medicaid.
I use the term "Medicaid" hereafter to represent all
state health care programs from which Petitioner was
excluded.
2. The parties stipulated to the principal facts,
cited hereafter as Stip. (number).
3. Petitioner's Brief will hereafter be referred
to as P. Br. p. (number).
4. The Inspector General was the only party to
offer hearing exhibits. The exhibits hereafter will be
referred to as Ex. (number).
5. It appears from the judgment of conviction,
the presentence report, and the stipulation of record,
that the plea of guilty was a straight plea, i.e. not an
Alford plea (with denial of guilt) nor a nolo contendere
plea (without admission of guilt). However, the type of
plea is immaterial. Even if his plea were considered a
nolo contendere plea, as he asserts it should, his
conviction for the offenses charged in the l5 counts
would be established. "It is well settled that a plea
of nolo contendere constitutes an admission of every
essential element of the offense [that is] . . . pleaded
in the charge." Myers v. Secretary of Health and Human
Services, 898 F.2d 840 at 845 (6th Cir. l990), quoting
from U.S. v. Frederickson, 444 U.S. 934, quoting Lott v.
U.S., 367 U.S. 421, 426 (l961). In any event, Petitioner
concedes that a plea of nolo contendere is within the
definition of a "conviction" under section ll28(i) (P's
Br. p.6). See Carlos E. Zamora, M.D., DAB App. ll04 at
pp. 4-7 (l989); Charles W. Wheeler, DAB App. ll23 (l989).
6. The record before me does not clearly support
Petitioner's claim that such a promise was made.
However, even if a promise had been made, the evidence
does not show that the I.G., or any person acting on
behalf of the Secretary, was a party to Petitioner's
agreement. It would not appear that an Assistant D.C.
Corporation Counsel, who did not represent the federal
government, would have had the authority to make a
decision on Medicare and Medicaid sanctions that would
bind the I.G., who, by law, was required to exclude
Petitioner. Under these circumstances, I question
whether Petitioner, who was represented by counsel, could
reasonably have relied on any representation by a non-
federal prosecutor that he would be excluded in a civil
action under federal statutes.