CASE | DECISION | ISSUES | FINDINGS OF FACT AND CONCLUSIONS OF LAW | ANALYSIS | CONCLUSION | JUDGE | FOOTNOTES

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division


IN THE CASE OF  
Yolanda Crespo Capo Fernandez, D.O., petitioner Date: 1999 July 9
- v. -  
The Inspector General Docket No. C-97-328
Decision No. CR606
DECISION
...TO TOP

By letter dated March 27, 1997, the Inspector General (I.G.), United States Department of Health and Human Services (DHHS), notified Yolanda Crespo Capo Fernandez, D.O. (Petitioner),(1) that she would be excluded from participation in the Medicare and Medicaid programs.(2) The I.G. imposed this exclusion pursuant to sections 1892 and 1128(b)(14) of the Social Security Act (Act) due to Petitioner's failure to repay student loans borrowed through the Health Education Assistance Loan program (HEAL) or to enter into a repayment agreement. The I.G. informed Petitioner that this exclusion would remain in effect until her debt was satisfied. By letter dated April 22, 1997, Petitioner requested a hearing and the case was assigned to me for hearing and decision. The case was then stayed for a lengthy period during which the parties attempted to settle the case. They were unable to do so. During a telephone prehearing conference which I convened on February 22, 1999, the parties agreed that I could hear the case via an exchange of written briefs and documentary evidence in lieu of an in-person hearing.

Petitioner submitted a brief (P. Br.). The I.G. responded to Petitioner's brief (I.G. Br.) and Petitioner replied (P. Reply Br.). The I.G. submitted 13 proposed exhibits with its response brief. Petitioner did not object to the I.G.'s proposed exhibits 1-12 and I accept those exhibits into evidence as I.G. Exs. 1-12. Petitioner objected to proposed I.G. Ex. 13. However, as I find I.G. Ex. 13 to be relevant and material, and as the document refers to Petitioner by name,(3) I accept it into evidence as I.G. Ex. 13. With her brief, Petitioner submitted copies of the promissory notes concerning her HEAL loans. As such documentation is a duplication of the I.G.'s exhibits, I decline to accept such documents into evidence. With her brief, Petitioner also submitted a document in Spanish. As such document is untranslated, I decline to accept it into evidence. With her brief, Petitioner also submitted amortization schedules for loans in the amounts of $10,000, $10,000, $5,000, and $6,000 payable at interest rates of 19.5%, 13.375%, 12.750%, and 14.375% respectively. I accept this exhibit into evidence as P. Ex. 1. Petitioner also submitted documentation with her reply brief. Petitioner submitted an "Account Payment History" dated March 14, 1989 (with a run date for the copy submitted of August 11, 1991), concerning her HEAL loans, which she marked as Petitioner's proposed exhibit 1. I renumber this exhibit as P. Ex. 2 and I accept it into evidence without objection. She also submitted a "Claim Package of Default and Claim for Reimbursement" consisting of pages 3-11, marked as Petitioner's proposed exhibit 2. I renumber this exhibit P. Ex. 3 and I accept it into evidence without objection. Petitioner also submitted as Petitioner's proposed exhibit 3, a document in Spanish without an accompanying translation. As it is untranslated, I will not accept it into evidence. Petitioner also submitted other documents, including two proposed exhibits both marked by Petitioner as Petitioner's proposed exhibit 4. I accept into evidence without objection these documents which consist of correspondence concerning the servicing of Petitioner's HEAL loan, and I renumber them as P. Ex. 4 and P. Ex. 5. I also accept into evidence Petitioner's proposed exhibit 5, an excerpt from the laws of Puerto Rico. I renumber it P. Ex. 6.

Based on my review of the parties' briefs and exhibits and the law, I have determined that there are no facts of decisional significance in dispute, and that the only matters to be decided are the legal implications of the undisputed facts. Thus, I am able to decide the case on the basis of the parties' written submissions. I conclude that Petitioner is subject to exclusion from participation in the Medicare and Medicaid programs until her HEAL debt has been satisfied. I therefore affirm the I.G.'s determination.

APPLICABLE LAW

Medicare and Medicaid exclusions imposed by the Secretary as a result of a health care practitioner's failure to repay a HEAL loan are governed by sections 1128(b)(14) and 1892 of the Act. In 1987, Congress enacted section 1128(b)(14) as a part of the Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. 100-93 (MMPPPA). MMPPPA recodified and expanded the Secretary's existing authority to exclude a provider from participating in the Medicare and Medicaid programs, including "[a]ny individual who the Secretary determines is in default on repayments of . . . loans in connection with health professions education made or secured, in whole or in part, by the Secretary and with respect to whom the Secretary has taken all reasonable steps available to the Secretary to secure repayment of such obligations or loans. . . ." Section 1128(b)(14) of the Act. Section 1128(b)(14) applies to HEAL loans.

Section 1892 of the Act authorizes the Secretary to enter into an agreement with a health care practitioner who owes "a past-due obligation to the United States" to deduct from amounts otherwise payable to the debtor by the Medicare program "until such past-due obligation (and accrued interest) have been repaid. . . ." If an individual does not generate sufficient program reimbursement to satisfy the outstanding debt, or if he or she "refuses to enter into an agreement or breaches any provision of the agreement," the Secretary is directed by section 1892(a)(2)(C)(ii) and 1892(a)(3)(B) of the Act to exclude the individual from participation in the Medicare program "until such time as the entire past-due obligation has been repaid." The Secretary's exclusion authority under section 1892 of the Act has been delegated to the I.G.(4)

PETITIONER'S CONTENTIONS

Petitioner does not contest that she took out the HEAL loans in question. Petitioner contends, instead, that she does not owe the amount on these loans that HCFA alleges, because she paid monthly sums of over $500 on 64 occasions over a period of years. Petitioner asserts that, on this basis, she surely must have satisfied her debt. She asserts that if the amounts owed are as substantial as the I.G. claims, such amounts must be interest upon interest, which, she maintains, is illegal under Puerto Rican law. She also asserts that the statute of limitations has run on the collection of the debt. She maintains that the judgment of the Puerto Rican court does not relate to her, as the name on the judgment was Yolanda Crespo Fernandez, and not her name. Finally, she asserts that she repeatedly requested a repayment schedule but such was never provided to her. She maintains that as she paid substantial amounts and as the amounts that the I.G. claims she owes do not therefore appear correct to her, the Secretary has not taken all reasonable steps to secure repayment. Rather, Petitioner asserts that she is willing to enter into a repayment agreement if the debt is properly computed. P. Reply Br., at paragraph 5.


ISSUES
...TO TOP


FINDINGS OF FACT AND CONCLUSIONS OF LAW
...TO TOP

1. At all times relevant to this case, Petitioner practiced as an optometrist in the Commonwealth of Puerto Rico.

2. Petitioner attended the Inter American University of Puerto Rico, School of Optometry, from 1981 through 1984. I.G. Ex. 1.

3. On September 22, 1981, Petitioner executed a borrower's agreement and promissory note for a HEAL loan in the amount of $10,000, with a variable rate of interest and a repayment term to

commence on the first day of the tenth month after she ceased to be a full-time student or an intern or resident in an accredited program. I.G. Exs. 1, 2.

4. On November 26, 1982, Petitioner executed a borrower's agreement and promissory note for a second HEAL loan in the amount of $10,000, with a variable rate of interest and a repayment term to commence on the first day of the tenth month after she ceased to be a full-time student or an intern or resident in an accredited program. I.G. Exs. 1, 3.

5. On March 29, 1984, Petitioner executed a borrower's agreement and promissory note for a third HEAL loan in the amount of $5,000, with a variable rate of interest and a repayment term to commence on the first day of the tenth month after she ceased to be a full-time student or an intern or resident in an accredited program. I.G. Exs. 1, 4.

6. On October 31, 1984, Petitioner executed a borrower's agreement and promissory note for a fourth HEAL loan in the amount of $6000, with a variable rate of interest and a repayment term to commence on the first day of the tenth month after she ceased to be a full-time student or an intern or resident in an accredited program. I.G. Exs. 1, 5.

7. DHHS Public Health Service (PHS) records indicate that Petitioner owed over $40,000 on her loans in 1994. I.G. Exs. 1, 12; P. Exs. 2, 3.

8. Petitioner's failure to repay her HEAL loans resulted in a judgment against her on June 28, 1994, in District Court, San Juan, Puerto Rico. I.G. Ex. 13; P. Exs. 3, 4.

9. Petitioner's loans were assigned to the United States government on August 23, 1994. I.G. Ex. 13.

10. On October 12, 1994, Petitioner's HEAL loans were placed in default status. I.G. Exs. 10-12.

11. Commencing in 1994, and continuing until December 1995, PHS contacted Petitioner regarding her entering into a repayment agreement or offset agreement to satisfy her unpaid HEAL loans. I.G. Exs. 10, 12.

12. Petitioner has not entered into a repayment agreement or other arrangement to satisfy her outstanding debt.

13. Petitioner's HEAL loans remain in default status.

14. On March 27, 1997, the I.G. notified Petitioner of her exclusion from participation in the Medicare and Medicaid programs, which exclusion would remain in effect until her HEAL loans were satisfied.

15. Petitioner's unpaid HEAL loans are loans within the scope of section 1128(b)(14) of the Act.

16. The Secretary has taken all reasonable steps available to secure repayment of Petitioner's HEAL loans.

17. The Secretary has delegated to the I.G. the duty to determine and impose exclusions pursuant to section 1128(b) of the Act.

18. The I.G. properly excluded Petitioner under section 1128(b)(14) of the Act from participation in the Medicare and Medicaid programs for an indefinite period, lasting until such time as Petitioner satisfies her past-due indebtedness.

DISCUSSION

It is uncontested that Petitioner was enrolled as a student at the Inter American University and that, beginning in 1981, she borrowed a total of $31,000 from the HEAL program to finance her optometry education. She received and executed promissory notes for a $10,000 loan, with a note executed on September 22, 1981; a $10,000 loan, with a note executed on November 26, 1982; a $5,000 loan, with a note executed on March 29, 1984; and a $6,000 loan, with a note executed on October 31, 1984. I.G. Exs. 2-9. Each promissory note detailed the interest rate, amount borrowed, and the date on which interest began to accrue. I.G. Exs. 2-5. Petitioner, in her brief dated March 15, 1999, acknowledges receiving these loans and does not dispute that these loans were made in connection with health professions education. See e.g. Mohammad H. Azarpira, D.D.S., DAB CR372 (1995); James F. Cleary, D.D.S., DAB CR252 (1993)(uncontested that debt arose from loans made in connection health professions education where petitioners attended dental school when they applied for HEAL loans).

According to the terms of the promissory notes, Petitioner promised to repay the loans in periodic installments beginning the first day of the tenth month after she either ceased being a full-time student at a HEAL-recognized school or ceased being an intern or resident in an accredited program. I.G. Exs. 2-5. The amount of money repaid would include an interest amount based on the terms of the individual promissory notes. Id. Repayment of Petitioner's HEAL loans was to commence on April 1, 1986. I.G. Ex. 1, at 1.

The record further reflects that Petitioner did not repay the sums owed under the HEAL loan agreements. The I.G. alleges that Petitioner made only two payments for a total of $1006.56. I.G. Ex. 1. Petitioner submitted documentation to show that in fact she made approximately 64 payments of $503.28 from March 31, 1986 through February, 1991. P. Ex. 2. The accounting which Petitioner submitted reflects, however, that these payments were applied mostly to the interest component of her loans and that at the end of such period she still owed over $40,000. P. Reply Br., at 3; P. Ex. 2. Petitioner's failure to make payments on the debt resulted in a judgment against her in the amount of $41,149.14 in the District Court, San Juan, Puerto Rico, on June 28, 1994. I.G. Ex. 13; P. Ex. 3, at 2. This judgment, docketed as Case No. 92-5652 (502), was assigned to the United States government for collection on August 23, 1994. I.G. Ex. 13. After this assignment, on October 12, 1994, Petitioner's loans were placed in default status. PHS attempted to collect the debt from Petitioner. I.G. Exs. 10-12. There is no evidence that Petitioner ever responded or repaid the debt. On such record, I find that Petitioner clearly is in default regarding the outstanding unpaid balance on her loans.

Section 1128(b)(14) of the Act requires that the Secretary or her delegate take "all reasonable steps available to the Secretary to secure repayment" of the loans before excluding Petitioner from participation in the Medicare and Medicaid programs. "The term 'all reasonable steps available' means all reasonable and legitimate means of debt collection. In attempting to collect a debt, the Secretary must be 'reasonable' only in the sense that she should not insist on repayment arrangements which are palpably unfair." Cleary, DAB CR252, at 12-13.

The reasonableness standard also does not require the Secretary to excuse individuals from repayment obligations because of financial status, or to accept financial arrangements which do not accomplish the objective of repayment, or to enter into relationships that are not in the public interest. Id. at 13; see also Majauskas, DAB CR441. The Secretary has also by regulation interpreted the phrase "all reasonable steps available" to mean that all reasonable administrative steps available to secure repayment" of a HEAL debt will have been achieved where the debtor has been offered a Medicare offset arrangement. 42 C.F.R. § 1001.1501(a)(2). Although an offset arrangement is not a necessary element of "all reasonable administrative steps," it is conclusive proof that all reasonable steps have been taken by the Secretary. Charles K. Angelo, Jr., DAB CR290, at 12 (1993).

I find that the record establishes that Petitioner was accorded all reasonable opportunities to repay her HEAL debt. On January 6, 1997, Petitioner was notified that DHHS was exercising its option to declare the entire HEAL note due and payable. I.G. Ex. 1. This notification followed several prior attempts by PHS to obtain repayment. PHS had provided instructions to Petitioner on at least two prior occasions regarding how to make settlement arrangements, to no avail. I.G. Exs. 10, 12. In each of these letters, Petitioner was given the opportunity and instructions to enter into a repayment or offset arrangement. Id.

Specifically, on October 27, 1994, Petitioner was notified that her loans had been placed in default status, which resulted in a claim to the United States government for the amount due. She was asked to contact PHS regarding entering a repayment agreement. I.G. Ex. 10. On October 4, 1995, Petitioner was notified that any federal income tax refund to which she may have been entitled would be retained in full or in part to satisfy her delinquent HEAL debt. I.G. Ex. 11. On November 20, 1995, PHS notified Petitioner that her HEAL loans were in delinquent status and that her account would be referred to the United States Attorney for collection proceedings if Petitioner failed to respond within 60 days from the date of the letter. I.G. Ex. 12. In the letter dated November 20, 1995, PHS specifically offered Petitioner the option to establish an offset agreement, whereby her Medicare and Medicaid reimbursements would be directly applied to her outstanding loan debt. I.G. Ex. 12. Petitioner was also advised that continued unwillingness or inability to negotiate a repayment agreement would result in referral of her case to the I.G. for initiation of exclusion proceedings.

On March 27, 1997, the I.G. notified Petitioner that, as a result of her failure to repay her HEAL loans, she was excluded from participating in the Medicare and Medicaid programs and that such exclusion would continue until her debt was satisfied. During the proceedings before me, Petitioner was granted a stay to negotiate a settlement agreement. Petitioner did not avail herself of any of these options and, instead, has allowed her debt to accrue to its present level. In offering a Medicare offset agreement, PHS satisfied the regulatory requirements for securing Petitioner's repayment of her HEAL loans. On this record, I therefore find that the Secretary has taken all reasonable steps available to secure repayment of Petitioner's debt.

Petitioner's submissions raise a number of challenges concerning her exclusion. She asserts that the judgment of the Puerto Rican court does not relate to her because such judgment was not entered in her correct name. I find no merit in this assertion. Petitioner's own exhibits refer to this judgment. P. Ex. 3, at 2. The assignment of judgment also refers to Petitioner by name, as "Yoland[a] Capo Fernandez," not as "Yolanda Crespo Capo Fernandez." HCFA Ex. 13. On such record, I do not find Petitioner's challenge credible. However, even if I were to credit Petitioner's argument that the judgment refers to some other individual or is otherwise invalid, I would still find substantial evidence to support the conclusion that Petitioner's HEAL loans remain in default.

Petitioner also asserts that she was not afforded reasonable steps to repay her debt. In this regard, she maintains that the amount of the debt is improper and that, had she been presented with an accurate accounting of her debt and a corresponding correct payment schedule, she would have repaid the loans. Again, I do not find such assertions credible. Regarding the amount of the debt, Petitioner's own evidence (P. Ex. 2) shows that the payments she made were applied primarily to the interest on her debt and that there is in fact a substantial balance owing. As Petitioner was obviously provided with this documentation, her claim cannot be substantiated. In fact, by her evidence, which reflects approximately 64 payments of $503.28, for a total of approximately $32,210, such amount clearly is insufficient to satisfy the principal she borrowed plus interest. Petitioner's assertion that such amount includes interest computed upon interest, which she maintains is illegal under Puerto Rican law, is completely unsupported. Moreover, the promissory notes signed by Petitioner are governed by federal law, and Puerto Rican law, in this instance, is irrelevant. Finally, concerning the amount of the debt, insofar as the amount owed was established by judgment, this is not the proper forum to challenge such judgment. I cannot entertain a collateral attack on that judgment. Cf. Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter Edmondson, DAB No. 1330 (1992).

Petitioner also complains that she was not afforded a reasonable opportunity to repay her debt because she was never provided with an accurate payment schedule. Again, I do not find such assertion supportable. I note that, according to Petitioner's documentation, she did make some monthly payments, evidencing that she knew the amounts of monthly payments. The record also reflects that she was contacted by PHS regarding establishing a repayment procedure. I.G. Exs. 10, 12. There is no evidence that Petitioner responded to these notices.

Finally, Petitioner alleges that the statute of limitations has run on the payment of the debt. She has provided no support for her claim. Moreover, as this is an exclusion action, such claim is not relevant in this forum.

I therefore find that the I.G. properly excluded Petitioner under section 1128(b)(14) of the Act from the Medicare and Medicaid programs. See Azarpira, DAB CR372 (exclusion is reasonable where this petitioner failed to respond to instructions on how to enter into repayment agreement; failed to provide information necessary to enter into an offset agreement; made his first payment only after exclusion; and never made payments large enough to pay even the accruing interest on his HEAL loans). The regulations provide that an exclusion remains in effect until the default is cured or the obligations have been resolved to PHS's satisfaction. 42 C.F.R. § 1001.1501(b). The fact that PHS referred the matter to the I.G. after giving Petitioner the opportunity to resolve the debt indicates that PHS was not satisfied within the meaning of the regulation. The debt remains unpaid and Petitioner has not entered into a repayment or offset agreement. The exclusion, therefore, is proper and remains in effect.


ANALYSIS
...TO TOP


CONCLUSION
...TO TOP


JUDGE
...TO TOP
Joseph K. Riotto
Administrative Law Judge


FOOTNOTES
...TO TOP

1. Petitioner asserts in her brief dated March 15, 1999, that she "has never been known as nor has she ever used the last name of Crespo." P. Br. at 2. However, as this case has been docketed as "Yolanda Crespo Capo Fernandez, D.O." since its initial docketing in May 1997, without formal objection, I am not changing the caption of the case.

2. In this decision, I use the term "Medicaid" to include any State health care program which receives federal funds as defined by section 1128(h) of the Act.

3. I note here that the exhibit refers to Petitioner as "Dr. Yoland Capo Fernandez." While the "a" has been left off of Yolanda in this exhibit, I find this to be immaterial. I note also that Petitioner is referred to as "Yoland[a] Capo Fernandez" without the "Crespo" being added. As Petitioner herself notes that her name does not include "Crespo," I also find the absence of "Crespo" to be immaterial.

4. My decision here does not address Petitioner's exclusion under section 1892 of the Act for two reasons. First, I have found Petitioner's exclusion to be authorized under section 1128(b)(14) of the Act and I need not consider whether it is also authorized under section 1892. Second, it is not clear whether I have the authority to review an exclusion imposed by the I.G. under section 1892. See Rikantas (Rik) Majauskas, D.O., DAB CR441 (1996).


CASE | DECISION | ISSUES | FINDINGS OF FACT AND CONCLUSIONS OF LAW | ANALYSIS | CONCLUSION | JUDGE | FOOTNOTES