SUBJECT:

Rickie Lewis,

Petitioner,

The Inspector General

Petitioner filed a hearing request. 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. The I.G. submitted a brief accompanied by five proposed exhibits (I.G. Exs. 1-5) and a reply brief. Petitioner submitted a brief. Petitioner did not object to my receiving into evidence the I.G.'s proposed exhibits, and I receive into evidence I.G. Exs. 1-5.

I affirm the I.G.'s determination to exclude Petitioner from participating in Medicare and Medicaid for a period of 15 years.

Under section 1128(a)(1) of the Act, the Secretary 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 Title XVIII or under any State health care program. For purposes of program exclusion, section 1128(i)(2) of the Act defines "conviction" as "when there has been a finding of guilt against the individual or entity by a Federal, State, or local court." 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 minimum period of not less than five years. See also 42 C.F.R. § 1001.102(a).

42 C.F.R. § 1001.102(b) provides that the following factors may be considered to be aggravating and a basis for lengthening the minimum mandatory five-year period of exclusion:

(1) [t]he acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more entities of $1500 or more. (The entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made); (2) [t]he acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; (3) [t]he acts that resulted in the conviction, or similar acts, had a significant adverse physical, mental or financial impact on one or more program beneficiaries or other individuals; (4) [i]n convictions involving patient abuse or neglect, the action that resulted in the conviction was premeditated, was part of a continuing pattern or behavior, or consisted of non-consensual sex acts; (5) [t]he sentence imposed by the court included incarceration; (6) [w]hether the individual or entity has a documented history of criminal, civil or administrative wrongdoing; (7) [t]he individual or entity has at any time been overpaid a total of $1500 or more by Medicare, Medicaid and all other Federal health care programs, or other third-party payers, as a result of improper billings; (8) [w]hether the individual or entity was convicted of other offenses besides those which formed the basis for the exclusion, or has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.

42 C.F.R. § 1001.102(c) provides that only if there are aggravating factors present which justify an exclusion longer than five years, may the following factors be considered as mitigating and a basis for reducing the period of exclusion to no less than five years:

(1) [t]he individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1,500; (2) [t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability; (3) [t]he individual's or entity's cooperation with Federal or State officials resulted in--(i) [o]thers being convicted or excluded from Medicare, Medicaid or all other Federal health care programs, (ii) [a]dditional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or (iii) [t]he imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

The regulations at 42 C.F.R. § 1001.2007 set forth the scope of my review in mandatory exclusion cases and provide that the only issue for my review is whether the basis for the imposition of the sanction exists. 42 C.F.R. § 1001.2007(a)(i) and (ii). That regulation also provides that when the I.G.'s exclusion is based on the existence of a conviction, that conviction and the basis for that underlying determination are not subject to my review and Petitioner may not collaterally attack that determination on substantive or procedural grounds before me. 42 C.F.R. § 1001.2007(d).

Petitioner contends that he was not guilty of the crime for which he was convicted. He asserts that he had no responsibility for the billing of the fraudulent claims to Medicaid. He further maintains that the State did not demonstrate in the criminal proceedings that he received any Medicaid reimbursements to which he was not entitled. He also contends that, as most of the illegal billings occurred more than four years before the criminal indictment, the criminal charges should have been barred by the statute of limitations. Finally, Petitioner maintains that the length of the exclusion is excessive.

1. During the period of time relevant to this case, Petitioner was the owner, operator and chief executive officer of We Care Family Services, Inc. I.G. Exs. 4 and 5.

2. We Care Family Services, Inc., provided psychological services to Medicaid recipients and was enrolled as a provider in the Georgia Medicaid program. I.G. Ex. 5.

3. On June 29, 1998, in the Superior Court of DeKalb County, State of Georgia, a Grand Jury Bill of Indictment was issued charging Petitioner with Conspiracy to Defraud the State of Georgia in violation of O.C.G.A. section 16-10-21, Medicaid Fraud in violation of O.C.G.A. section 49-4-146.1(b), and Theft by Taking in violation of O.C.G.A. section 16-8-2 in that Petitioner, in concert with others, from March 1, 1994 until April 3, 1995 submitted or caused claims to be submitted to Medicaid for reimbursement for psychological services to Medicaid recipients that were not medically necessary and in excess of the number of services that were actually provided to such recipients. I.G. Ex. 5.

4. On August 15, 1998, a jury found Petitioner guilty of Conspiracy to Defraud the State of Georgia, Medicaid Fraud, and Theft by Taking in violation of Georgia law. I.G. Ex. 5.

5. On August 31, 1998, the Superior Court of DeKalb County sentenced Petitioner to: confinement for five years with the possibility of probation after two years for Count 1 and 10 years with the possibility of probation for Count 2, to be served concurrently; and ordered him to pay court costs and restitution in the amount of $209,000. I.G. Ex. 5.

6. On December 31, 1998, Petitioner was notified by the I.G. that he was being excluded from participation in the Medicare and Medicaid programs for a 15-year period pursuant to section 1128(a)(1) and section 1128(c)(3)(B) of the Act. I.G. Ex. 1.

7. Under section 1128(a)(1) of the Act, the I.G. is required to exclude 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.

8. Where the I.G. determines to exclude an individual pursuant to section 1128(a)(1) of the Act, the term of exclusion will be, at minimum, a period of five years, and the I.G. is authorized to increase the length of the term of exclusion beyond five years if any of the aggravating factors set forth in 42 C.F.R. § 1001.102(b) are present.

9. Petitioner's criminal conviction constitutes a conviction within the scope of section 1128(i) (2) of the Act.

10. Petitioner's conviction for Conspiracy to Defraud the State of Georgia, Medicaid Fraud, and Theft by Taking is related to the delivery of an item or service under the Medicaid program within the meaning of section 1128(a)(1) of the Act.

11. The I.G. is required to exclude Petitioner pursuant to section 1128(a)(1) of the Act.

12. The I.G. established the existence of aggravating factors under 42 C.F.R. §§ 1001.102(b)(1), (2), (5), and (7) in this case.

13. The Petitioner did not prove the presence of any mitigating factors pursuant to 42 C.F.R. § 1001.102(c) which may be considered as a basis for reducing the exclusionary period to no less than five years.

14. The aggravating factors established by the I.G. prove Petitioner to be untrustworthy.

15. A 15-year exclusion of Petitioner is reasonable and appropriate.

I find that the I.G. has demonstrated that Petitioner is subject to exclusion under section 1128(a)(1) of the Act. The first statutory requirement for the imposition of a 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. I find that this requirement is met in Petitioner's case as he was found guilty of Conspiracy to Defraud the State, Medicaid Fraud, and Theft by Taking after a jury trial. The term "convicted" is defined in section 1128(i) of the Act. This section provides that an individual will be considered to have been convicted of a criminal offense -

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

The finding of guilt by jury constitutes a conviction under section 1128(i) (2) of the Act. On August 15, 1998, Petitioner was found guilty by the jury of all charges. FFCL 4. See also 42 C.F.R. § 1001.2; Alicia Pinto, DAB CR369 (1995).

Next, section 1128(a)(1) of the Act requires that the crime at issue be related to the delivery of an item or service under the Medicaid program. The record reflects that Petitioner was found guilty of Conspiracy to Defraud the State, Medicaid Fraud, and Theft by Taking, in that he filed or caused to be filed fraudulent claims for psychological services with Medicaid. The record reflects that Petitioner was the owner and operator of We Care Family Services, Inc., which offered psychological services to Medicaid recipients. The record further reflects that Petitioner was responsible for the clinic's billings to Electronic Data Systems, Inc., the financial agent for the Georgia Medicaid program. The record establishes that Petitioner submitted or caused claims to be submitted for reimbursement for psychological services to Medicaid recipients that were not medically necessary and in excess of the number of services that were actually provided to the recipients. FFCL 3. The filing of fraudulent Medicaid claims has been held to constitute clear program-related misconduct. Alan J. Chernick, D.D.S., DAB CR434 (1996).

Petitioner asserts that he was not involved in billing the relevant claims, that it was not demonstrated that he received any payment to which he was not entitled, and that the statute of limitations had expired, which should have prevented the prosecution of the claims at issue. I note that the Indictment of which Petitioner was found guilty charges in paragraphs 4 and 5 that Petitioner was involved in the fabrication of the claims, and that paragraph 7 of that document asserts that Petitioner received payment from Medicaid to which he was not entitled. These allegations undermine Petitioner's denials. Moreover, Petitioner's assertions constitute a collateral attack on his conviction, which is prohibited by 42 C.F.R. § 1001.2007(d). The Departmental Appeals Board (DAB) has previously held that collateral attacks are ineffectual arguments in the context of an exclusion proceeding because the I.G. and the Administrative Law Judge are not permitted to look beyond the fact of conviction. Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter J. Edmondson, DAB No. 1330 (1992).

Petitioner has argued in his brief that his 15-year exclusion should be reduced. It is Petitioner's burden to prove the existence of mitigating factors. James H. Holmes, DAB CR270 (1993). Petitioner has not established any of the mitigating factors listed at 42 C.F.R. § 1001.102(c). He asserts that he was not involved in the scheme as he did not have responsibility for billing, but such claim is not within the scope of the regulations. As Petitioner has the burden concerning mitigating factors, I find that he has not met such burden and conclude that Petitioner has not proved the existence of any mitigating factors.

In determining whether the length of an exclusion is reasonable, it is the responsibility of the administrative law judge to consider and evaluate all of the relevant evidence brought to bear in a case. The regulation at 42 C.F.R. § 1001.102(b) sets forth the aggravating factors which may be considered in determining the length of an exclusion. I find that the I.G. proved the presence of four aggravating factors. The four aggravating factors consist of the following:

- The acts resulting in Petitioner's conviction resulted in a loss to a State health care program of more than $1,500. Here, the court determined that Petitioner's acts resulted in $209,000 in damage to the Georgia Medicaid program and ordered him to repay that amount. FFCL 5. A fair estimate of the quantum of damages caused by a petitioner may be found in the amount of restitution that he was sentenced to pay. Steven Alonso Henry, M.D., DAB CR638 (2000). As established by the $209,000 restitution order, Petitioner's criminal acts resulted in financial loss to the Georgia Medicaid program of more than $1,500.

- The acts that resulted in Petitioner's conviction, or similar acts, were committed by Petitioner over a period of one year or more. 42 C.F.R. § 1001.102(b)(2). The indictment for which Petitioner was convicted reflects that the acts occurred from March 1, 1994 through April 3, 1995. FFCL 3. The facts stated in the indictment of which Petitioner was found guilty may be considered in this exclusion proceeding. See Norman C. Barber, DAB CR123 (1991).

- Petitioner's court imposed sentence included a period of incarceration. Under 42 C.F.R. § 1001.102(b)(5), it is an aggravating factor if the sentence imposed upon Petitioner by the court includes incarceration. In this case, as to Count 1, Petitioner was sentenced to five years imprisonment (with the possibility of probation after two years). FFCL 5. As to Count 2, Petitioner was sentenced to 10 years imprisonment (with the possibility of probation after two years). Id.

- Petitioner has been overpaid a total of $1500 or more by a federally funded health care program as a result of improper billings. 42 C.F.R. § 1001.102(b)(7). In this case, Petitioner's criminal activity resulted in overpayments that exceeded $1,500. The record reflects that Petitioner was responsible for billings to the Medicaid program that were for medically unnecessary services and for services not provided. FFCLs 3, 4. Furthermore, Petitioner was ordered to pay restitution to the State of Georgia in the amount of $209,000. This aggravating factor therefore applies in Petitioner's case.

Considering Petitioner's lack of evidence of mitigation, and the I.G.'s evidence of aggravating factors, I find that the aggravating factors in Petitioner's case make the imposition of a 15-year exclusion reasonable. I note that in evaluating these factors, it is not the mere presence of a greater number of aggravating factors which forms the basis for my decision. As the DAB held in Barry D. Garfinkel, M.D., DAB No. 1572 (1996), it is the quality of the circumstances, whether aggravating or mitigating, which is to be dispositive in analyzing evidence of these factors. Garfinkel, at 31.

In this case, the aggravating factors established by the I.G. prove Petitioner to be an untrustworthy individual. Petitioner's lack of trustworthiness is established by his actions in defrauding Medicaid on multiple occasions over a 13-month period, resulting in a substantial financial loss to that program. His fraud was recurrent and deliberate, not random and impulsive. I note also that the losses in Petitioner's case were much greater than the regulatory minimum. In this regard, I note the substantial amount of restitution that Petitioner was ordered to pay. I also note that the record further establishes that Petitioner was a central actor in the criminal scheme. The high level of his involvement is underscored by the period of incarceration to which he was sentenced.

I conclude that the I.G. was authorized to exclude Petitioner, pursuant to section 1128(a)(1) of the Act. I find that a 15-year exclusion is reasonable.

Joseph K. Riotto

Administrative Law Judge

1. In this decision, I use the term "Medicaid" to refer to all of the federally-funded State health care programs.