SUBJECT:

Lorna Fay Gardner,

Petitioner,

The Inspector General

By letter dated June 30, 1999, Lorna Fay Gardner, Petitioner herein, was notified by the Inspector General (I.G.), U.S. Department of Health and Human Services (DHHS), that she would be excluded for a period of five years from participation in Medicare, Medicaid, and all federal health care programs.⁽¹⁾ The I.G. explained that the five-year exclusion was mandatory under section 1128(a)(1) of the Social Security Act (Act), because Petitioner had been convicted of a criminal offense in connection with the delivery of a health care item or service under the Medicare program.

Petitioner filed a request for review of the I.G.'s action. The I.G. moved for summary disposition. Because I have determined that there are no material and relevant factual issues in dispute (the only matter to be decided is the legal significance of the undisputed facts), I have decided the case on the basis of the parties' written submissions in lieu of an in-person hearing.

Both parties submitted briefs in this matter. The I.G. submitted five proposed exhibits which I have numbered I.G. Exhibits (I.G. Ex.) 1-5. Petitioner did not object to these exhibits and I accept into evidence I.G. Ex. 1-5. Petitioner submitted no proposed exhibits, but appended a one-page document (Appendix A) to its brief. The I.G. did not object to Appendix A. I note, however, that Appendix A corresponds to page one of I.G. Ex. 3. Therefore, I will not admit Appendix A into evidence as it duplicates another exhibit already in the record.

I grant the I.G.'s motion for summary disposition. I affirm the I.G.'s determination to exclude Petitioner from participation in the Medicare and Medicaid programs for a period of five years.

Applicable Law

Under section 1128(a)(1) of the Act, the Secretary of DHHS, shall exclude from participation in the Medicare and Medicaid programs any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid. Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(1) of the Act shall be for a period of at least five years.

Petitioner's Arguments

Petitioner contends that the administrative law judge (ALJ) should take into consideration which subsection of the Act is more appropriate to Petitioner's crime. She contends that, as her offense was a misdemeanor not a felony, she should be excluded under the more lenient provision of section 1128(b) of the Act.

1. During the period relevent to this case, Petitioner operated MedProc/RAS-Medical Claims Processing Service (MedProc), a medical claims processing company. I.G. Ex.

2. On February 10, 1999, in the United States District Court for the Northern District of Texas (District Court), Petitioner pled guilty to a superseding Information charging a violation of 42 U.S.C. § 1320a-7b(1)(ii), False Statements in Medicare Claims. I.G. Ex. 2.

3. In a document styled "Amended Factual Resume" filed in the District Court on February 10, 1999, Petitioner agreed that she knowingly filed false claims with Medicare on behalf of Dr. Karen E. Tucker, a podiatrist who utillized the billing services of MedProc. I.G. Ex. 1.

4. On February 22, 1999, the District Court accepted Petitioner's guilty plea to one count of False Statements in Medicare Claims in violation of 42 U.S.C. § 1320a-7b(1)(ii). I.G. Ex. 3.

5. As a result of her guilty plea and conviction, the District Court sentenced Petitioner to two years' probation and ordered her to pay a special assessment in the amount of $25. Id.

6. The I.G. notified Petitioner, on June 30, 1999, that she was being excluded from participation in the Medicare, Medicaid, and all federal health care programs for a period of five years pursuant to section 1128(a)(1) of the Act. I.G. Ex. 5.

7. Petitioner's guilty plea, the acceptance of such plea by the District Court, and the entry of a judgment of conviction against Petitioner by the District Court, constitute a "conviction" within the meaning of sections 1128(i)(1) and (i)(3) of the Act.

8. Petitioner's conviction for False Statements in Medicare Claims is related to the delivery of a health care item or service under the Medicare program within the meaning of section 1128(a)(1) of the Act. FFCL 1-7.

9. The Secretary of DHHS, has delegated to the I.G. the duty to determine and impose exclusions pursuant to section 1128(a)(1) of the Act.

10. Once an individual has been convicted of a program-related criminal offense under section 1128(a)(1) of the Act, exclusion is mandatory under section 1128(c)(3)(B) of the Act.

11. On June 30, 1999, Petitioner was notified by the I.G. that she was being excluded from participation in the Medicare, Medicaid, and all federal health care programs for a five-year period, pursuant to section 1128(a)(1) of the Act.

12. The I.G. properly excluded Petitioner, pursuant to section 1128(a)(1) of the Act, for a period of five years, as required by the minimum mandatory exclusion provision of section 1128(c)(3)(B) of the Act.

Discussion

The first statutory requirement for the imposition of mandatory exclusion pursuant to section 1128(a)(1) of the Act is that the individual or entity in question be convicted of a criminal offense under federal or State law. I find that this requirement is met in Petitioner's case. The term "convicted" is defined in section 1128(i) of the Act. This section provides that an individual or entity will be convicted of a criminal offense:

participation in first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

This section establishes four alternative definitions of the term "convicted." An individual or entity need satisfy only one of the four definitions under section 1128(i) to establish that the individual or entity has been convicted of a criminal offense within the meaning of the Act.

Petitioner pled guilty and the record shows that the District Court accepted her plea. Therefore, Petitioner was convicted within the meaning of section 1128(i)(3). The District Court also entered a judgment of conviction against Petitioner. Accordingly, Petitioner also was convicted within the meaning of section 1128(i)(1) of the Act.

Next, it is required under section 1128(a)(1) of the Act that the crime at issue be related to the delivery of a health care item or service under the Medicare and/or Medicaid program. The record establishes that the Petitioner, who was adjudged guilty of False Statements in Medicare Claims, filed, or caused to be filed, fraudulent claims against Medicare. The filing of fraudulent Medicare and Medicaid claims consistently has been held to constitute clear program-related misconduct. Alan J. Chernick, D.D.S., DAB CR434 (1996) (I.G.'s five-year mandatory exclusion of a dentist who was convicted in a State court of filing false claims upheld); see also, Barbara Johnson, D.D.S., DAB CR78 (1990) (I.G.'s five-year mandatory exclusion of a dentist convicted of filing false claims upheld).

In this case, Petitioner maintains that the ALJ should consider whether section 1128(b)of the Act, as opposed to section 1128(a)(1) of the Act, should apply when considering the nature of her crime. Petitioner contends that because her conviction fits within the scope of section 1128(b) of the Act, she should be excluded under the more lenient provisions of that section rather than the stricter provisions of section 1128(a)(1) of the Act. In this regard, she notes that she was convicted of a misdemeanor, not a felony, offense.

In my review, I find that Petitioner's conviction for False Statements in Medicare Claims falls within the purview of section 1128(a) of the Act. Petitioner believes that, because her offense constituted a misdemeanor, she is entitled to exclusion under the more lenient provisions of section 1128(b) of the Act, as she asserts her offense was less serious than a felony. Petitioner's argument is irrelevant, however, because the provisions of the applicable statute make no distinction between degrees of criminal offenses with regard to convictions of program-related crimes. Brenda J. Motley, DAB CR414 (1996).

I have found that Petitioner's offense is related to the delivery of a health care item or service under Medicare. The I.G.'s mandatory exclusion authority requires the imposition a minimum five-year exclusion in such case. Peter J. Edmondson, DAB CR163 (1991); see also, 42 C.F.R. § 1001.2007(d). Once a person has been convicted of a program-related offense, exclusion is mandatory. Muhammad R. Chaudhry, DAB CR326 (1994). The I.G. has no discretion to impose a permissive exclusion when the threshold provisions for exclusion pursuant to section 1128(a)(1) have been fulfilled, even if the conduct can be fairly characterized under either the permissive or mandatory exclusion provisions. Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990). That a petitioner's conduct might also satisfy the permissive provisions of section 1128(b) of the Act is irrelevant. Brenda J. Motley, DAB CR414, supra.

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner herein be excluded from the Medicare and Medicaid programs for a period of at least five years because she has been convicted of a criminal offense related to the delivery of a health care item or service under the Medicaid program. The five-year exclusion is therefore sustained.

Joseph K. Riotto
Administrative Law Judge

⁽¹⁾ 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 Social Security Act.