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Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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| IN THE CASE OF | |
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Roderick Spencer, D.P.M., |
DATE: December 13, 2000 |
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- v - |
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The
Inspector General
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Docket No.C-00-116 Decision No. CR721 |
| DECISION | |
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I exclude Petitioner, Roderick Spencer, D.P.M., from participating
in Medicare and other federally funded health care programs. I find that
a basis exists to exclude Petitioner pursuant to section 1128(b)(7) of
the Social Security Act (Act). Petitioner submitted reimbursement claims
to an agent of the United States, Transamerica Occidental Life Insurance
Company, (Transamerica) for Medicare reimbursement for podiatric services
that he should have known were either not provided as claimed or were
false. I find additionally that it is reasonable to exclude Petitioner
for a period of three years. I. Background Petitioner is a podiatrist who practices at various locations
in Southern California. On September 21, 1999, the Inspector General (I.G.)
sent a notice to Petitioner in which she advised Petitioner of her intent
to exclude him from participating in Medicare and other federally funded
health care programs. In her notice, the I.G. asserted that she was authorized
to exclude Petitioner pursuant to section 1128(b)(7) of the Act. She contended
that exclusion was authorized because Petitioner allegedly had submitted
claims to Transamerica for medical or other items or services that Petitioner
knew or should have known were: (1) not provided as claimed; or (2) false
or fraudulent. The I.G. asserted that Petitioner made these claims in
violation of section 1128A(a)(1)(A) of the Act. The I.G. alleged that, in incidents involving 28 Medicare
beneficiaries, Petitioner presented or caused to be presented to Transamerica
claims which misrepresented the services that Petitioner had provided.
The I.G. asserted that in each of the incidents in question Petitioner
had submitted a claim for debridement of six or more toenails when in
fact he had debrided five or fewer toenails. The I.G. alleged that in
1995 and 1996 Transamerica had issued instructions to Petitioner concerning
how to file claims for reimbursement of debridement services. She asserted
that Petitioner ignored these instructions and, during 1995 and 1996,
made claims for reimbursement using inappropriate reimbursement codes.
The I.G. alleged further that, during a period which ran from 1994 until
1997, Petitioner billed for debridement services for six or more toenails
for three different patients who each had only one foot. The I.G. proposed to exclude Petitioner for a period of
five years. The I.G. asserted that an exclusion for five years was justified
given the alleged presence of aggravating factors. These allegedly aggravating
factors included: the period of time over which Petitioner submitted allegedly
false or fraudulent claims, the number of allegedly false or fraudulent
claims that he submitted over this period of time, and his propensity
to continue to submit false or fraudulent claims over this period of time;
Petitioner's personal involvement in the submission of claims and his
allegedly high degree of culpability for submitting false or fraudulent
claims; and Petitioner's alleged engagement in other questionable claims
or billing practices. Petitioner requested a hearing. The case was assigned
originally to another administrative law judge for a hearing and decision
and was then reassigned to me. I held a hearing in Los Angeles, California,
on July 31 and August 1, 2000. The parties submitted posthearing briefs
and reply briefs. At the hearing, I received into evidence from the I.G.
exhibits consisting of I.G. Ex. 1 - I.G. Ex. 37, and I.G. Ex. 40 - I.G.
Ex. 45. I excluded I.G. Ex. 39. I reserved deciding whether I would receive
into evidence I.G. Ex. 38, I.G. Ex. 46, and I.G. Ex. 47. As I discuss
below at Part II.B. of this decision I have decided to exclude I.G. Ex.
38, I.G. Ex. 46, and I.G. Ex. 47. I received into evidence from Petitioner
exhibits consisting of P. Ex. 1 - P. Ex. 45. The following witnesses testified at the hearing on behalf
of the I.G.:
The following witnesses testified at the hearing on behalf of Petitioner:
II. Issues, rulings on objections to exhibits,
findings of fact and conclusions of law
The issues in this case are:
As a preliminary matter, I sustain Petitioner's objections
to my receiving into evidence I.G. Ex. 38, I.G. Ex. 46, and I.G. Ex. 47,
and I exclude these exhibits. The exhibits in question relate to determinations
by the Health Care Financing Administration (HCFA) that Petitioner has
been overpaid for Medicare reimbursement claims for podiatric services
(I.G. Ex. 38 and I.G. Ex. 46 are essentially identical). I deny Petitioner's
renewed objections to my receiving into evidence I.G. Ex. 7.
The length of an exclusion may be based on factors which
include whether:
42 C.F.R. § 1001.901(b)(4) (emphasis added). The I.G.
advocates that I.G. Ex. 38, I.G. Ex. 46, and I.G. Ex. 47 address the "same
circumstances" that are the basis for this case. The exhibits relate to
an overpayment determination by the Health Care Financing Administration
(HCFA) concerning Petitioner's Medicare reimbursement claims. The I.G.
argues that the exhibits are relevant to the criteria of 42 C.F.R. § 1001.901(b)(4)
because they are in part based on the same claims and services that are
the basis for the I.G.'s allegations against Petitioner. I am not persuaded by this argument. The facts that are
addressed in the exhibits relate to much more than the "same circumstances"
that gave rise to the I.G.'s exclusion determination. Admitting these
exhibits into evidence would enlarge the I.G.'s case against Petitioner
to include a universe of claims that vastly exceeds the 28 claims that
are the basis for the I.G.'s exclusion determination. HCFA's overpayment
determination may be based in part on the same claims that are at issue
in this case. However, it is also evident from the exhibits that the determination
extrapolates from these claims over the universe of claims submitted by
Petitioner over a period of time. I.G. Ex. 38 at 3. The determinations
that are encompassed in the exhibits thus involve many claims in addition
to the 28 claims that are at issue in this case.
I would exclude these exhibits even if, technically, they
were relevant to the issues of this case. That is because of the prejudice
that they pose to Petitioner. In alleging improper claims practices by
Petitioner the exhibits address an array of claims that is much broader
than the 28 claims that are at issue in this case. In order to defend
against the allegations that are contained in these exhibits Petitioner
would have to offer evidence which addresses many claims other than the
28 claims that are the basis for the I.G.'s exclusion determination. The
I.G. did not put Petitioner on notice that he would have to mount so broad
a defense to the I.G.'s allegations. The I.G.'s notice letter to Petitioner
does not refer to the HCFA overpayment findings. Indeed, those findings
were made by HCFA on February 4, 2000, more than a year after the I.G.
served her exclusion notice on Petitioner. The I.G. never moved to amend
her notice to encompass these findings.
In its reply brief, Petitioner renewed an objection that
it made at the hearing to the admission into evidence of I.G. Ex. 7. The
exhibit is a report of an audit of Petitioner's records that was conducted
by the I.G. I overruled Petitioner's objection at the hearing and I affirm
that ruling here. Petitioner's primary basis for objecting to the exhibit
is that it contains hearsay. However, hearsay evidence may be admitted
in hearings involving the I.G. See 42 C.F.R. § 1005.18. Petitioner
also asserts that he is prejudiced by the I.G.'s audit report because
he is unable to respond effectively to the hearsay allegations in the
report. However, I note that, at the hearing, the I.G. offered independent
evidence to verify the findings in the audit report that are elements
in the I.G.'s case.
I make findings of fact and conclusions of law (Findings)
to support my decision in this case. I set forth each Finding below as
a separately numbered heading. I discuss each Finding in detail.
The I.G. asserts that she is authorized by section 1128(b)(7)
of the Act to exclude Petitioner. Section 1128(b)(7) permits an exclusion
of an individual where that individual has committed an Act that is described
in section 1128A, 1128B, or 1129 of the Act. The I.G. alleges that Petitioner committed acts that are
described in section 1128A of the Act. Specifically, the I.G. contends
that Petitioner committed acts that are described by subsections 1128A(a)(1)(A)
and (B). Under subsection 1128A(a)(1)(A), the Secretary may impose remedies
against an individual who knowingly presents or causes to be presented
a claim for Medicare reimbursement that is for a medical or other item
or service that the individual "knows or should know was not provided
as claimed . . . ." Under subsection 1128A(a)(1)(B), the Secretary may
impose remedies against an individual who knowingly presents or causes
to be presented a claim for Medicare reimbursement that is for a medical
item or service the individual "knows or should know . . . is false or
fraudulent." The I.G. bears the burden of proving the elements of her
case against Petitioner by the preponderance of the evidence. 42 C.F.R.
§§ 1005.15(b), (c). The elements of the I.G.'s assertion that a basis
exists for excluding Petitioner consist of proving that Petitioner: (1)
knowingly presented or caused to be presented claims for Medicare reimbursement
for podiatric services that were either not provided as claimed or were
false or fraudulent; and (2) knew or should have known that he presented
or caused to be presented claims for items or services that either were
not provided as claimed or were false or fraudulent.
Petitioner admits that he presented or caused to be presented
Medicare reimbursement claims for services that he did not, in fact, provide.
Petitioner's reply brief at 2; I.G. Ex. 9 - I.G. Ex. 34. Petitioner does
not deny that he presented or caused to be presented to Transamerica reimbursement
claims for the services that are at issue in this case with the intent
that he be reimbursed for these services. Petitioner admits also that
he "incorrectly applied . . . Medicare billing codes" to make claims for
services. Petitioner's posthearing brief at 1. All of the claims at issue are for debridement of toenails
by Petitioner. I.G. Ex. 9 - I.G. Ex. 34. "Debridement" essentially is
the removal of dead, necrotic, nonviable tissue. Tr. at 194. Generally,
debridement of a toenail means removal of nail tissue where the nail is
infected by a fungus or where the toenail is abnormal. Id. The evidence that was presented by the I.G. in this case
unequivocally establishes that Petitioner made reimbursement claims for
services that he did not provide. Petitioner presented to Transamerica
Medicare reimbursement claims in 35 instances involving care allegedly
given to 28 Medicare beneficiaries for manual debridement of six or more
toenails when, in fact, he did not provide these services. I.G. Ex. 9
- 34. Petitioner's own records establish that in all of these cases Petitioner
debrided five or fewer toenails. Id. In some instances, Petitioner
claimed reimbursement for debriding six or more toenails where the beneficiary
for whom he allegedly performed these services was an amputee. I.G. Ex.
16, I.G. Ex. 26, I.G. 34, I.G. Ex. 35. Petitioner's claims were for services that he did not
provide as claimed because he misrepresented the amount and type of podiatric
care that he provided to Medicare beneficiaries. Petitioner's claims were
obviously false in that he repeatedly represented that he provided services
(debridement of six or more toenails) when, in fact, he did not provide
such services. Petitioner made his reimbursement claims under two Medicare
reimbursement codes that were in effect at the time that he made his claims.
These codes are identified in the Common Procedural Terminology (CPT)
Guidebook as CPT Codes 11700 and 11701. I.G. Ex. 44, I.G. Ex. 45. The
CPT Guidebook is an annual publication produced by the American Medical
Association. Tr. at 116. The Medicare program has adopted these codes
for billing purposes. Id. CPT Code 11700 is defined in the CPT Guidebook as: "Debridement
of nails, manual; five or less." I.G. Ex. 45 at 7. CPT Code 11701 is defined
in the same document as "each additional, five or less." Id. During
the time periods that are relevant to this case, a provider making a reimbursement
claim for debridement of five toenails or less in a Medicare beneficiary
would cite CPT code 11700 in his or her claims documentation. Tr. at 192
- 193. A provider making a reimbursement claim for debridement of more
than five toenails in a Medicare beneficiary would cite CPT codes 11700
and 11701 in his or her claims documentation. Id. In each of the 35 claims that are at issue Petitioner
presented or caused to be presented claims documentation which specified
that he had performed services described under CPT Code 11701. I.G. Ex.
9 - I.G. Ex. 34. In doing so, Petitioner told Transamerica and ultimately,
the Medicare program, that in each case he debrided six or more toenails.
In fact, and as Petitioner admits, in none of the instances that
are at issue did Petitioner debride as many as six toenails. Id.
This is made evident by examination of the treatment records that Petitioner
generated. I.G. Ex. 9 - 34. In each instance that is at issue here, Petitioner's
treatment records failed to document and appropriately link symptomatic
conditions of the patient's foot, digit, and border treated to more than
five toes. Tr. at 203, 206, 210 - 211, 214, 216 - 217, 221 - 226, 228
- 229, 231, 286, 288, 292, 295, 297, 300 - 301, 303 - 304, 306 - 307,
309, 312 - 313, 315, 317, 319.
I do not find that the I.G. proved that Petitioner knew
that his claims were false or for items or services that were not provided
as claimed. I am not persuaded that Petitioner intentionally defrauded
the Medicare program. However, the I.G. established that Petitioner submitted
claims in reckless disregard for the accuracy of those claims. Petitioner
should have known that he submitted claims that were false or for items
or services that were not provided as claimed. Petitioner argues that the was - at worst - merely negligent.
He claims that he was "confused" about the criteria governing claims for
toenail debridement. He contends that he was misled by ambiguous statements
issued by Transamerica. He asserts that he sought clarification from Transamerica
concerning his obligations and that Transamerica failed to assist him
in understanding those obligations. I find these assertions to be unpersuasive.
Petitioner was not confused about his obligations nor was he merely negligent
in filing claims. Petitioner was indifferent to the accuracy of his claims.
He may not have intended to defraud Medicare but the way in which he claimed
reimbursement for his services had the same effect as if he had committed
fraud. Petitioner cannot assert reasonably that Transamerica
failed to explain to podiatrists how to claim reimbursement for toenail
debridement. Between 1994 and 1996, Transamerica issued several written
statements to podiatrists, including Petitioner, that explained their
obligations. I.G. Ex. 2 - I.G. Ex. 6; see Tr. at 113. For example,
in March 1995, Transamerica sent a newsletter to all participating podiatrists,
including Petitioner, which contained the following instructions concerning
billing for toenail debridement:
I.G. Ex. 4 at 6. Transamerica included identical instructions
in a document entitled "Billing Guidelines for Foot Procedures" which
it sent to podiatrists in 1996. I.G. Ex. 6, at 8. Any reasonable podiatrist would have known what his or
her obligations were had the podiatrist merely taken the time to read
Transamerica's billing instructions. The fact that Petitioner systematically
ignored these explicit instructions establishes him to have been at the
least indifferent to his obligations. These statements unequivocally told
podiatrists that they were to use CPT Code 11701
as a billing entry only in the circumstance where they were claiming
to have debrided more than five toenails in a patient. Petitioner asserts that he misread the reimbursement codes
as being "bilateral codes." According to Petitioner, he thought that he
should use CPT Code 11700 to claim reimbursement when he debrided toenails
on one foot and should use CPT Code 11701 to claim reimbursement when
he debrided toenails on two feet. Petitioner avers that he understood
that he should claim reimbursement under CPT Code 11701 regardless of
the total number of toenails that he debrided so long as he debrided at
least one toenail on each foot of a patient. Petitioner contends that
he misunderstood the codes to permit him to claim reimbursement for debriding
as few as two toenails so long as the toenails were on two feet. Petitioner's explanation makes no sense. There is absolutely
no language, either in the codes themselves or in Transamerica's billing
instructions to podiatrists, that would allow a reasonable podiatrist
to infer that CPT Codes 11700 and 11701 were "bilateral" codes. Indeed,
Petitioner did not claim reimbursement consistent with his purported understanding
of the codes' meaning. Petitioner used CPT Code 11701 to claim reimbursement
for multiple instances in which he performed debridements of amputees'
toenails. I.G. Ex. 7, at 15; see Tr. at 497. There would have been
no need for Petitioner to claim reimbursement under CPT Code 11701 in
the case of an amputee even under Petitioner's purported interpretation
that the code should be used where toenails on both feet are debrided
irrespective of the number of toes that were debrided. Petitioner contends that his alleged confusion as to how
to utilize the codes was exacerbated by Transamerica's dissemination of
a "modifier list" to be used in describing the specific toes on which
a podiatrist performed surgery. I. G. Ex. 6, at 14. The modifier list
uses nomenclature to describe specific toes running from TA (left foot,
great toe) through T9 (right foot, fifth digit). Petitioner asserts that
this list is confusing in that podiatrists are trained to describe toes
using nomenclature running from T1 (left foot, great toe) through T10
(right foot, fifth digit). Again, this assertion makes no sense. Whether or not Transamerica's
modifier list might confuse a podiatrist who was trained to use slightly
different nomenclature to describe toes is irrelevant. As Petitioner concedes,
Transamerica's billing instructions did not require a podiatrist to use
modifiers to describe the toenails that he or she debrided. Tr. at 497.
In fact, Petitioner did not use modifiers to describe the toenails that
he claimed to have debrided in any of the claims that are at issue in
this case. Tr. at 505; I.G. Ex. 9 - I.G. Ex. 34. Petitioner asserts additionally that Transamerica failed
to provide him with guidance when he sought assistance from it to explain
how the CPT Codes were to be used. See Tr. at 474. I do not find
this assertion to be credible. Petitioner offered no evidence that confirms
any attempt by him to obtain help from Transamerica aside from his self-serving
assertions that he sought guidance but was unable to obtain it. He has
produced no notes of any conversation that he had with any Transamerica
representative nor has he offered any written communications with Transamerica
in which he requested help. Petitioner would have received ample assistance from Transamerica
about its reimbursement policies had he asked for it. Petitioner's assertion
that Transamerica was not helpful is belied by evidence establishing that
Transamerica offered assistance to podiatrists to explain reimbursement
requirements. Transamerica has a customer service telephone line that
is available to any provider who needs to have questions answered. Tr.
at 125. It also has an office to handle walk-in inquiries in person. Id.
Transamerica's educational staff is also available to meet with providers
on a one-on-one basis, by appointment. Tr. at 125. Petitioner also argues that Transamerica acknowledged
that CPT Codes 11700 and 11701 were confusing inasmuch as the codes were
revised and clarified in 1997. Neither Petitioner nor the I.G. has offered
evidence showing precisely why these codes were revised. I do not infer
from any revision of the codes that they were so confusing as to cause
a reasonable podiatrist to make the kinds of reimbursement claims that
Petitioner made. The explanations of CPT Codes 11700 and 11701 that Transamerica
mailed to podiatrists made it absolutely clear that a podiatrist could
not claim reimbursement under CPT Code 11701 if that podiatrist debrided
five or fewer toenails in a patient. Finally, Petitioner contends that his alleged confusion
about how to claim reimbursement for toenail debridement mirrors widespread
confusion within the podiatric community about that issue. Petitioner
argues, in effect, that his improper billings may be excused because his
claims mirrored claims filed by many other podiatrists. Petitioner premises
his assertion that there was widespread confusion among podiatrists concerning
the meaning of CPT Codes 11700 and 11701 largely on the testimony of his
witness Mr. Benson. Tr. at 408. I am not persuaded that Petitioner's contention is correct.
Although Mr. Benson attested to confusion among podiatrists about how
to utilize reimbursement codes, he did not establish that such confusion
caused podiatrists other than Petitioner to file claims under CPT Code
11701 where five or fewer toenails had been debrided. Petitioner offered
no credible evidence to show that any podiatrist other than Petitioner
filed claims under CPT Code 11701 for reimbursement where that podiatrist
had debrided five or fewer toenails. In fact, there is no evidence in
this case that other podiatrists filed improper claims for debridement
services. And, there certainly is no credible evidence that other podiatrists
thought that the codes could be applied as "bilateral codes" in the way
in which Petitioner applied these codes. Petitioner's wholesale disregard of reimbursement requirements
in the face of unambiguous communications from Transamerica as to how
these requirements applied to claims for debridement services raises the
question of Petitioner's motivation for filing false claims. As I have
discussed, I am not persuaded that Petitioner merely was negligent in
filing claims. His claims filing practice establishes more than a state
of confusion in light of the unambiguous explanation of the CPT codes
governing debridement services that Transamerica sent to Petitioner. The
question which arises from Petitioner's actions is whether he filed claims
with the deliberate intent of obtaining reimbursement to which he was
not entitled or, rather, whether Petitioner was simply heedless of Medicare's
reimbursement requirements. The I.G. offered no direct evidence to prove that Petitioner
deliberately intended to defraud the Medicare program. Petitioner vehemently
denies intending to defraud the Medicare program and no witness testified
that he had such an intent. Any intent manifested by Petitioner must be
inferred from the claims and other documents that are in evidence in this
case. Although it is possible to infer from this evidence that
Petitioner deliberately defrauded the Medicare program, I conclude that
the better inference is that Petitioner ignored Medicare reimbursement
requirements. I conclude that Petitioner simply did not care whether his
claims complied with these requirements. Petitioner's indifference to the accuracy of his claims
is evident from the fact that he frequently failed to claim reimbursement
for services for which he legitimately could have claimed reimbursement.
I.G. Ex. 7; Tr. at 59 - 112. The numerous billing errors that Petitioner
committed which were harmful to his pecuniary interests, when coupled
with the false claims that Petitioner presented, strongly suggests that
Petitioner was indifferent to the accuracy of his claims and was not engaged
in deliberate fraud. Petitioner's propensity to not claim reimbursement for
reimbursable services is documented in the audit that the I.G. conducted
of Petitioner's reimbursement claims. The I.G. based her audit of Petitioner's
claims on a sample of 100 claims for 167 services provided by Petitioner
during a period that ran from June 1, 1992 through May 31, 1997. I.G.
Ex. 7, at 9. The I.G. obtained evidence that 151 of the claimed services
were either partially or completely unallowable. Id. This universe
of 151 alleged overpayments includes the claims for items or services
that were not provided as claimed or are false that make up the I.G.'s
case against Petitioner. However, the I.G. also found evidence of significant
underpayments to Petitioner. The I.G. found evidence of 27 allowable services
for which Petitioner did not claim reimbursement. I.G. Ex. 7, at 11 -
12, 39. Nearly all of these services involve the same CPT codes - CPT
11700 and 11701 - as are involved in the false claims that Petitioner
submitted. Id. at 39. Petitioner's indifference to the accuracy of his claims
is part and parcel of Petitioner's overall attitude towards his medical
records. Petitioner's claims practices were mirrored by the generally
slovenly state of his medical records. Questions of accuracy, both in
the generation of claims, and in the keeping of underlying medical records,
were of little importance to Petitioner. The picture which emerges from
Petitioner's overall performance as a medical record keeper is of an individual
who did not care whether his records accurately reflected the services
he provided. Petitioner had a duty, both to his patients and to the
Medicare program, to maintain accurate and complete records of the care
that he provided. Tr. at 232, 276 - 277. The necessity for good record
keeping is a subject that podiatrists are trained in as students in schools
of podiatric medicine. Tr. at 276 - 277. Good record keeping is a basic
aspect of patient care. Id. The requirement for good record keeping
is also a fundamental requirement for submitting Medicare reimbursement
claims. Transamerica advised podiatrists that:
I.G. Ex. 6 at 9 (emphasis in original). Petitioner disregarded these duties. The medical records
that Petitioner generated in the instances that are at issue in this case
omit to discuss relevant information about Petitioner's patients and their
medical conditions which Petitioner was obligated to supply, both as a
general requirement of good patient care, and to support the reimbursement
claims that he made for his services. Petitioner frequently omitted to
discuss symptomatic diagnoses of patients' conditions and his documentation
of the foot, digit, and border that he treated was often sketchy, at best.
I.G. Ex. 9 - 34; Tr. at 190 - 191. It is arguable that Petitioner did not document his services
because he knew that there was no valid medical basis for him to have
provided such services. However, I conclude that the more reasonable inference
is that Petitioner simply did not care whether or not he had accurately
documented his services. I reach this conclusion because Petitioner's
failure to document the services that he provided is in some respects
self-defeating. His failure to provide adequate documentation for his
services meant that he would not be able to justify even those services
that he had provided legitimately. Such sloppiness in record keeping is
more the mark of a person who is indifferent to his obligations than it
is of a person who has set about deliberately to commit fraud. Moreover, Petitioner's failure to document his services
accurately falls into the same self-defeating pattern as is the manner
in which Petitioner made his reimbursement claims. Both his claims and
his record keeping manifest an indifference to accuracy which resulted
in Petitioner making claims for services which were not reimbursable or
justified and in failing to make claims for services which were
reimbursable. To some extent, Petitioner's record keeping and claims
behavior is explained by the overall way in which he conducted his practice.
Petitioner conducted a practice in which he exalted a high volume of services
over accuracy of record keeping and claims. A picture of Petitioner's practice as a podiatrist emerges
both from his testimony and the I.G.'s audit report. Petitioner's practice
in 1995 and 1996 consisted in large measure of visits to residential facilities
for developmentally disabled individuals. He treated many patients at
each facility that he visited. The practice was extremely lucrative. Petitioner's
1996 income was approximately $272,000. Tr. at 505. Between 1992 and 1997
Petitioner filed 22,629 Medicare reimbursement claims with Transamerica.
I.G. Ex. 7, at 9. The total volume of claims that Petitioner submitted
and the revenues he earned from these claims reflected a huge volume of
daily services by Petitioner. Petitioner presented 50 or more claims for
services on 61 separate days between 1992 and 1997. Id. at 12.
The I.G. proved that Petitioner presented or caused to
be presented claims for Medicare services that were not provided as claimed
or were false. The I.G. proved further that Petitioner should have known
that his claims were for items or services that were not provided as claimed
or were false. These are the necessary elements for establishing conduct
that is described under sections 1128A(a)(1)(a) and 1128A(a)(1)(b) of
the Act. Such conduct is a basis for imposing an exclusion pursuant to
section 1128(b)(7) of the Act.
The I.G. determined to impose an exclusion of five years
against Petitioner. I conclude that an exclusion of this length is unreasonable
given the facts of this case. I impose an exclusion of three years. The purpose of any exclusion that is imposed either pursuant
to section 1128 or section 1128A of the Act is remedial and not punitive.
The remedial purpose of both sections is to protect federally funded health
care programs and the beneficiaries and recipients of those programs from
an untrustworthy individual. Labeling an exclusion as "remedial" does
not automatically make it so. In order to be truly remedial, an exclusion
must be calculated to serve the protective purposes required by the Act. The regulations which govern exclusions establish criteria
which must be considered to determine the length of any exclusion that
is imposed pursuant to section 1128(b)(7). These are listed at 42 C.F.R.
§ 1001.901(b) and include the following:
I have considered the evidence and the parties' arguments
as they pertain to each of these factors. On balance, I conclude that
this evidence shows that Petitioner is an untrustworthy individual for
whom a substantial exclusion is merited. The nature and extent of Petitioner's
reckless conduct is strong evidence that a substantial exclusion is needed,
both to protect trust fund monies and to protect beneficiaries and recipients
of federally funded health care programs. Over a period of several years,
Petitioner manifested indifference to the requirements of the Medicare
program. He submitted numerous claims for services without regard for
the accuracy of those claims. And, in many instances he failed to satisfy
even basic medical record keeping requirements. However, Petitioner is not so culpable or so untrustworthy
as the I.G. depicts him to be. The preponderance of the evidence does
not show that Petitioner willfully defrauded the Medicare program with
the intent of unlawfully obtaining program funds. Rather, it shows that
he was indifferent to program reimbursement requirements, a somewhat lower
level of culpability than is associated with fraud. I am reducing the
exclusion in this case from five years to three years essentially because
Petitioner's culpability for his conduct is less than what the I.G. determined
it to be. Petitioner, albeit untrustworthy, is not an individual who is
prone to commit intentional fraud.
The evidence pertaining to the acts that are the basis
for excluding Petitioner shows that Petitioner manifests a high level
of untrustworthiness. As I have discussed in detail above, at Finding
2, this evidence shows that Petitioner was indifferent to Medicare reimbursement
requirements and to his obligations to his patients to accurately record
the care that he gave to them. Petitioner submitted numerous claims that
were either false or were for services that were not provided as claimed
over a period of several years.
The I.G. has argued that Petitioner either deliberately
defrauded the Medicare program or was indifferent to program requirements.
The distinction between fraudulent and reckless conduct by a provider
is irrelevant for purposes of establishing a basis for imposing an exclusion.
A provider who presents or causes to present claims that are either
willfully false or that are false and are made in reckless disregard
for their accuracy has committed conduct that is described under section
1128A of the Act and may be excluded pursuant to section 1128(b)(7). However, the distinction between fraudulent and reckless
conduct may be significant for purposes of determining the length of an
exclusion. A person who engages in deliberate fraud manifests a higher
level of culpability than does a person who is reckless. The level of
culpability that is involved in a case of deliberate fraud is tantamount
to criminal culpability. A person may engage in reckless conduct and not
be culpable for a crime. Congress has recognized that an individual who commits
a program related crime is a highly untrustworthy individual. The Act
requires that such an individual be excluded for, at minimum, five years.
Act, sections 1128(a)(1), 1128(c)(3)(B). Congress has not found that an
individual whose conduct is reckless is necessarily as untrustworthy as
a person who has committed criminal fraud against Medicare. There is no
mandatory minimum exclusion for such an individual under sections 1128(b)(7)
or 1128A of the Act. Here, the evidence establishes that Petitioner was reckless.
It does not establish that Petitioner deliberately defrauded the Medicare
program. That raises the obvious question of whether Petitioner's culpability
is tantamount to that of an individual who has engaged in criminal fraud. I find that Petitioner's culpability is not so high. Petitioner
was indifferent to the accuracy of his claims. However, the evidence does
not support a conclusion that he deliberately set about to extract monies
from Medicare to which he was not entitled. Rather, it supports the conclusion
that Petitioner made claims without regard to their truth or falsity.
This resulted in Petitioner improperly claiming reimbursement for non-reimbursable
services. But, it also resulted in Petitioner failing to claim reimbursement
for other services for which he could have been reimbursed. I find that Petitioner's untrustworthiness is reduced
somewhat from the I.G.'s estimate due to his reduced culpability. That
is not to suggest that I find Petitioner to be trustworthy. Far from it.
However, I do find that Petitioner does not manifest the level of culpability
and untrustworthiness that is manifested by individuals who perpetrate
fraud against Medicare. Because I find that Petitioner's culpability is
less than that of an individual who would be subject to a mandatory exclusion
of 5 years under section 1128(a)(1), I conclude that, in Petitioner's
case, a five-year exclusion is unreasonable and excessive.
There is no evidence that Petitioner has a prior record
of criminal, civil, or administrative misconduct. In light of that, I
conclude that there is nothing in Petitioner's past record which would
suggest a higher degree of culpability or untrustworthiness than is indicated
by the other evidence that is of record in this case.
I do not find that there is evidence of record relating
to other adverse actions against Petitioner that arise from the same circumstances
that are the basis for excluding Petitioner. I have excluded evidence
that the I.G. contends relates to other adverse actions against Petitioner
that arise from the same circumstances that are the basis for excluding
Petitioner. See I.G. Ex. 38; I.G. Ex. 46; I.G. Ex. 47. As I explain
at Part II.B. of this decision, I chose to exclude that evidence for several
reasons. First, that evidence relates to many more instances than those
involved in this case. Second, the I.G.'s notice to Petitioner did not
suggest that the case would be broadened to include a much larger universe
of claims than the instances that are the basis for the exclusion. Finally,
I concluded that Petitioner would be prejudiced if I now admitted the
excluded exhibits. I note, however, that the excluded exhibits may not preponderate
as strongly in favor of the I.G. as the I.G. contends. HCFA's overpayment
determinations are an extrapolation from the relatively few claims that
the I.G. sampled as part of its audit report. See I.G. Ex. 7. It
appears that HCFA obtained overpayment amounts by multiplying the value
of the false claims that were identified by the I.G. as part of its sample
by the entire number of claims Petitioner submitted for similar services.
I do not question the accuracy of the I.G.'s sampling technique and it
may be that HCFA's overpayment determinations are correct. But, I note
that the I.G. also determined in her audit report that Petitioner had
not claimed reimbursement for a substantial number of claims where reimbursement
was justified. Obviously, an extrapolation of these claims using the same
calculation that HCFA used to arrive at its overpayment determinations
might produce a substantial offset for any overpayment.
The regulation does not specify what other matters I may
consider as justice may require. See 42 C.F.R. § 1001.901(b)(5).
I have considered any evidence which might bear on Petitioner's trustworthiness
other than that which relates to the other factors that are specified
under the regulation. I find that the evidence does not support a further
reduction of the exclusion from the three years that I find to be reasonable. Petitioner argues that his trustworthiness is established
by the fact that he was placed on prepayment review for his Medicare claims
but removed from that review based on findings that his claims now comply
with Medicare standards. Petitioner's reply brief at 14. I agree that
Petitioner's satisfactory claims practices while on prepayment review
show that he is capable of presenting claims that conform to Medicare's
reimbursement criteria. I have factored that into my conclusion that the
I.G.'s exclusion determination is excessive. However, I do not conclude that the fact that Petitioner
has been removed from prepayment review shows him to be trustworthy. For
years, Petitioner demonstrated a propensity to disregard cavalierly Medicare's
claims criteria. His past behavior shows him to be a highly careless and
reckless individual. I am not satisfied that the period during which he
conformed his claims to Medicare's criteria demonstrates that he is now
trustworthy to do so. Petitioner also asserts that, at a recent hearing, a "neutral party" reduced the amount of Petitioner's overpayment from Medicare from an alleged $52,196 to $88.89. Petitioner's reply brief at 14. I do not have the record of that proceeding and I do not know the basis for the reduction. It may be that the fact finder in that case offset the amounts that Petitioner claimed improperly against the amounts that he failed to claim reimbursement for, but to which he would have been entitled, had he filed claims. I have discussed Petitioner's overpayments and underpayments above. I am not satisfied that reckless conduct of one type (claiming reimbursement based on false or incorrect claims) may be canceled by reckless conduct of another type (failing to make claims for reimbursable services). Both types of conduct are indicative of indifference to reimbursement requirements. |
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| JUDGE | |
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Steven T. Kessel Administrative Law Judge |
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