Yvon Nazon, M.D., DAB CR214 (1992) (on remand)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Yvon Nazon, M.D.,

Petitioner,
- v. -
The Inspector General.

DATE: July 8, 1992

Docket No. C-92-126

DECISION ON REMAND

I issue this decision pursuant to a Ruling Remanding Case
issued by an appellate panel of the Departmental Appeals
Board (DAB). On December 11, 1990, Petitioner requested
a hearing on a November 2, 1990 determination by the
Inspector General (I.G.) to exclude him from
participation in the Medicare and State health care
programs for seven years pursuant to section 1128(a)(1)
of the Social Security Act (Act). On December 20, 1991,
I issued a decision (DAB CR169) in which I found that the
I.G. had the authority to exclude Petitioner under
section 1128(a)(1) of the Act because he was convicted of
a criminal offense related to the delivery of an item or
service under Medicaid. I concluded also that the seven
year exclusion was reasonable under the circumstances of
this case. My decision noted that as part of his
sentence for the underlying criminal offense, the United
States District Court for the Northern District of
Indiana ordered Petitioner to pay restitution to the
Medicaid program in the amount of $84,110.35. Finding 6.
I found also that this sentence reflected the "serious
nature of Petitioner's criminal offenses." Finding 17.

Petitioner appealed my decision to the DAB. In his April
7, 1992 reply brief, Petitioner notified the DAB of the
filing of a Stipulation and Agreed Order with the federal
judge in the underlying criminal case to modify the
sentence by reducing the restitution amount from
$84,110.35 to $4,979.00. Petitioner also indicated that
this Stipulation and Agreed Order had been signed by
Petitioner's attorney in that case and by the Assistant
United States Attorney and was awaiting entry by the
federal judge. Petitioner's Reply Brief at 7. On April
9, 1992, Petitioner also filed a petition to reopen the
hearing before the ALJ and amend the record on appeal to
include the new evidence. 1/

On May 8, 1992, an appellate panel of the DAB issued a
Ruling Remanding Case. The appellate panel concluded
that it is appropriate for the administrative law judge
(ALJ) "to assess whether this development alters his
conclusion that the exclusion period imposed is
reasonable." The appellate panel therefore remanded this
case pursuant to 42 C.F.R. § 1005.21(f) for the ALJ "to
consider whether to reopen the case below and whether the
reduction of restitution would alter his conclusions."

My office subsequently notified the parties by telephone
and offered them the opportunity to submit supplemental
briefs on the issues before me on remand. The parties
declined this offer and indicated that they wished me to
consider the arguments related to this new evidence set
forth by them in briefs filed with the appellate panel.

The regulations at 42 C.F.R. § 1005.21(f) provide:

If any party demonstrates to the satisfaction of the
DAB that additional evidence not presented at such
hearing is relevant and material and that there were
reasonable grounds for the failure to adduce such
evidence at such hearing, the DAB may remand the
matter to the ALJ for consideration of such
additional evidence.

By deciding to remand this case to me pursuant to 42
C.F.R. § 1005.21(f), I find that the appellate panel of
the DAB has concluded that the new evidence regarding the
reduction of restitution in this case is relevant,
material, and that there were reasonable grounds for
Petitioner's failure to adduce such evidence at the
hearing. Based on this, I have reopened the record,
redocketed the case (as No. C-92-126), and have admitted
this evidence. I am also modifying my Findings to reflect
the reduction of Petitioner's restitution.

I have considered the evidence, the parties' arguments,
and the applicable laws and regulations. I conclude that
the seven year exclusion imposed and directed against
Petitioner is reasonable.

ISSUE

The issue to be decided on remand is whether the new
evidence alters my December 20, 1991 decision upholding
the I.G.'s determination to exclude Petitioner for a
period of seven years.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I have reopened the record for the purpose of considering
the new evidence offered by Petitioner. Based on this
new evidence, I amend the Findings I made in my December
20, 1991 decision to add two new Findings after Finding
6. The new Findings are numbered 7 and 8 and all the
other Findings in that decision are renumbered to reflect
the addition of this new Finding. The new Findings are
as follows:

7. In March, 1992, the parties in the criminal
proceeding before the United States District Court for
the Northern District of Indiana agreed to modify the
court's May 10, 1990 sentence to reduce the amount of
restitution ordered in this case from $84,110.35 to
$4,979.00. The basis for the agreement to reduce the
amount of restitution is that the law in the Seventh
Circuit prohibits restitution exceeding the amount of
damages alleged in the indictment. P. Ex. 6. 2/

8. On April 7, 1992, the United States District Court
for the Northern District of Indiana entered an Agreed
Order, vacating its May 10, 1990 restitution order, and
ordering Petitioner to pay $4,979.OO in restitution. P.
Ex. 7. 3/

In addition, I am modifying Finding 17 (now renumbered as
19) to read:

19. The serious nature of Petitioner's criminal offense
is reflected in the sentence fashioned by the court, as
modified by the April 7, 1992 Agreed Order, which reduced
the amount of restitution ordered to $4,979.00. (The
modification is underlined.)

In all other respects, the Findings of Fact and
Conclusions of Law set forth in my December 20, 1991
decision remain unchanged.

ANALYSIS

Petitioner contends that, based on his reading of my
December 20, 1991 decision, the amount of restitution
that he was ordered to pay on May 10, 1990 was a
"significant factor" in my decision to sustain the seven
year exclusion imposed by the I.G. He therefore argues
that my assessment of the seriousness of his criminal
offenses and the reasonableness of the seven year
exclusion will be altered by the reduction of the
restitution from $84,110.35 to $4,979.00. Petitioner
Motion to Reopen at 3.

The I.G. argues that even though the amount of
restitution ordered in the criminal case is reduced, the
seven year exclusion period "remains reasonable given the
Petitioner's persistent refusal to accept responsibility
for his criminal actions and given the nature and extent
of his criminal conduct." I.G.'s Reply Brief at 5. The
I.G. also asserts that evidence in the record continues
to support the larger figure as the amount of damages to
the program and that any amount of damages over $1,500.00
should be treated as an aggravating factor. Id., citing
42 C.F.R. § 1001.102(b)(1).


In its Ruling Remanding Case, the DAB noted the I.G.'s
arguments, and stated:

[W]hat the ALJ is being asked to reconsider is only
the effect, if any, of the agreed reduction in
sentence on the degree of aggravation. He is not
thereby required to alter his findings as to the
damages to the program or to treat the damages any
less seriously.

Ruling Remanding Case at 2. In my December 20, 1991
decision, I found that the financial loss to the Medicaid
program resulting from Petitioner's criminal misconduct
amounted to at least $84,000.00 and that this was "a
significant amount of money". Finding 16. Petitioner
was initially ordered to pay full restitution for these
damages, but this order was subsequently modified to
require him to pay only partial restitution in the amount
of $4,979.00. The reason for the reduction of
restitution was related to a legal requirement
prohibiting restitution exceeding the amount of damages
alleged in the indictment. It was not related to any
newly discovered evidence showing that the financial loss
to the Medicaid program was less than $84,000.00. I
therefore do not alter my findings as to the damages to
the Medicaid program resulting from Petitioner's
misconduct. Since the restitution amount was reduced for
reasons unrelated to Petitioner's culpability, my
assessment of the nature and seriousness of his criminal
conduct remains unchanged.

My December 20, 1991 decision to uphold the seven year
exclusion was based on the nature and gravity of
Petitioner's offenses, Petitioner's culpability, and his
continuing efforts to avoid responsibility for his
actions. The amount of restitution he was ordered to pay
was a relatively insignificant factor in evaluating the
reasonableness of the exclusion. Since there is no new
evidence which shows that I should change my assessment
of Petitioner's culpability, I do not find a basis for
changing my decision sustaining the exclusion.

I do not draw any inferences favorable to Petitioner from
the reduction of restitution. In fact, the Medicaid
program is in a worse financial position after the Agreed
Order was entered on April 7, 1992 than it was before
this order was in effect. As a result of this Agreed
Order, Petitioner will pay only a small fraction of the
amount of damages to the program. That Petitioner was
able to avoid paying back the money he caused the program
to lose certainly does not lead to the conclusion that he
is trustworthy.

In view of the foregoing, I do not alter my previous
decision that the remedial purposes of the Act is
satisfied by a seven year exclusion in this case.

CONCLUSION

Based on the law and evidence, including the newly
admitted evidence, I conclude that the seven-year
exclusion from participating in Medicare and Medicaid
imposed and directed against Petitioner is reasonable. I
therefore sustain the exclusion.


Edward D. Steinman
Administrative Law Judge


* * * Footnotes * * *

1. On April 27, 1992, Petitioner filed a motion
to supplement the petition to reopen hearing and to amend
record on appeal. Petitioner stated in that document
that on April 7, 1992 the United States District Court
for the Northern District of Indiana entered the Agreed
Order reducing restitution.
2. This Finding is based on the document
attached to Petitioner's reply brief in his appeal before
the DAB which he identified as "Exhibit A". I have
reopened the record to admit this document into evidence,
and I redesignate it P. Ex. 6.
3. The April 7, 1992 Agreed Order was attached
to Petitioner's April 27, 1992 Motion to Supplement
Petition, and was identified as "Exhibit A". I have
admitted this document into evidence as P. Ex. 7.