CASE | DECISION | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Eloise Vergeire Darnell,

Petitioner,

DATE: June 28, 2001
                                          
             - v -

 

The Inspector General

 

Docket No.C-00-776
Decision No. CR789
DECISION
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DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Eloise Vergeire Darnell (Petitioner) from participating in Medicare, Medicaid, and all federal health care programs for a period of 10 years.(1) I find that a basis exists for the I.G. to exclude Petitioner pursuant to section 1128(a)(1) of the Social Security Act (Act). Further, I find that an exclusion of 10 years is not unreasonable.

I. Background

By letter dated July 31, 2000, the I.G. notified Petitioner that she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of 10 years. The I.G. imposed this exclusion pursuant to section 1128(a)(1) of the Act, based on Petitioner's conviction in the Superior Court of California, County of Los Angeles, of a criminal offense related to the delivery of an item or service under the Medicaid program.

By letter dated August 10, 2000, Petitioner contested the exclusion. This case was originally assigned to Administrative Law Judge Joseph K. Riotto. On May 2, 2001, this case was reassigned to me for hearing and decision.

On September 28, 2000, Judge Riotto convened a prehearing conference. During the conference, the parties agreed that an in-person hearing would not be necessary in this matter, and that this case could be decided based upon written submissions only. The parties submitted briefs. The I.G.'s brief (I.G. Br.) was accompanied by four proposed exhibits (I.G. Exs. 1-4). Petitioner's brief (P. Br.) in response was accompanied by four proposed exhibits (P. Exs. 1-4). The I.G. submitted a reply brief (I.G. Reply). Neither party objected to my receiving into evidence the opposition's proposed exhibits, and therefore, I receive into evidence I.G. Exs. 1-4 and P. Exs. 1-4. I base my decision in this case on the parties' arguments, the exhibits, and the applicable law.

II. Issues, findings of fact and conclusions of law

A. Issue

The issues in this case are whether:

1. The I.G. is authorized to exclude Petitioner from participating in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Act; and

2. An exclusion of 10 years is unreasonable.

B. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of law to support my decision, set forth in bold below. I then discuss my Findings in detail.

1. Petitioner was convicted of a criminal offense.

Petitioner was the owner of two health care clinics in Long Beach, California. I.G. Ex. 3, at 5. On October 29, 1998, a felony complaint was filed in the Municipal Court of the Long Beach Judicial District, County of Los Angeles, State of California, against Petitioner, and others, charging one count of grand theft, in violation of Penal Code § 487(a), and six counts of presenting false Medi-Cal claims, in violation of Welfare and Institutions Code § 14107. I.G. Ex. 3, at 17-19.

On January 27, 1999, Petitioner pled "no contest" to the one count of felony grand theft, and the remaining six counts of presenting false Medi-Cal claims were dismissed. I.G. Ex. 3, at 34-35.

On March 2, 1999, Petitioner was sentenced to five years' probation on the condition that she serve 12 months in the Los Angeles County Jail, pay a fine of $200 to Los Angeles County, and pay restitution in the amount of $50,000 to the California Department of Health Services, Health Care Deposit Fund. Id. at 34.

On January 26, 2001, the Superior Court of California, County of Los Angeles, granted Petitioner's request for reduction of conviction from a felony offense to a misdemeanor offense. I.G. Ex. 4, at 1.

Petitioner's plea of "no contest" and the Long Beach Municipal Court's acceptance of Petitioner's plea satisfy the definition of conviction under section 1128(i)(3) of the Act.

      2. Petitioner was convicted, within the meaning of section 1128(a)(1) of the Act, of criminal offenses related to the delivery of items or services under the Medicaid program.

Petitioner does not challenge that she is subject to an exclusion under section 1128(a)(1) of the Act, and I so find. Section 1128(a)(1) of the Act applies to any individual or entity who is convicted of a criminal offense that is "related to the delivery of an item or service under" Medicare or any State health care program.(2) I find that Petitioner's conviction, as described above at Finding 1, is of a crime that is a program-related within the meaning of section 1128(a)(1) of the Act.

The Declaration in Support of the Arrest Warrant and Complaint both describe the crimes of which Petitioner was ultimately convicted. I.G. Ex. 3, at 3-19. These documents describe Petitioner as unlawfully taking from the State of California property of a value in excess of $400 as a result of Petitioner's numerous submissions of fraudulent claims for services under the Medi-Cal Act. Medi-Cal is a State health care program within the meaning of section 1128(h) of the Act. Therefore, the filing of fraudulent Medi-Cal claims clearly constitutes program-related misconduct.

      3. The I.G. is required to exclude Petitioner, inasmuch as Petitioner has been convicted of criminal offenses related to the delivery of items or services under the State's Medicaid program.

Section 1128(a)(1) of the Act mandates that the I.G. exclude any individual or entity who is convicted of any offense which is related to the delivery of an item or service under Medicare or any State health care program. The I.G. must exclude Petitioner, inasmuch as Petitioner was convicted of such offenses.

      4. A 10-year exclusion of Petitioner is not unreasonable in light of the presence of aggravating factors and the absence of any mitigating factors.

An exclusion of at least five years is mandatory for any individual or entity who has been convicted of a criminal offense that is related to the delivery of an item or service under Medicare or under any State health care program. Act, sections 1128(a)(1) and 1128(c)(3)(B). In this case, the I.G. determined to exclude Petitioner for a period of 10 years. This raises the issue of whether an exclusion of 10 years is unreasonable given the evidence presented in this matter.

42 C.F.R. § 1001.102(b) provides that the following factors may be considered to be aggravating and a basis for lengthening the 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 of behavior, or consisted of non-consensual sex acts;

(5) [t]he sentence imposed by the court included incarceration;

(6) [t]he convicted individual or entity has a prior criminal, civil or administrative sanction record;

(7) [t]he individual or entity has at any time been overpaid a total of $1,500 or more by Medicare, Medicaid and all other Federal health care programs as a result of intentional (original emphasis) improper billings;

(8) [t]he individual or entity has been previously convicted of a criminal offense involving the same or similar circumstances; or

(9) [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 the exclusion."(3)

42 C.F.R. § 1001.102(c) provides that only in the event that any of the aforementioned aggravating factors justifies the exclusion for a period longer than five years, may any of the following factors be considered as mitigating and a basis for reducing the period of exclusion to not 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; or

(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, and 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.

Evidence which does not pertain to one of the specific aggravating or mitigating factors is not relevant and may not be used to decide whether an exclusion of a particular length is reasonable. The regulation does not prescribe the weight to be given to evidence that relates to an aggravating or a mitigating factor. While the regulation tells the decision-maker what criteria may be used to determine the length of an exclusion, it does not tell the decision-maker how to weigh relevant evidence to arrive at an exclusion that is reasonable in a given case.

There is, however, an overall purpose to which the regulations must adhere. An exclusion is not intended to be punitive. The purpose of any exclusion that is imposed under section 1128 of the Act is "to protect federally funded health care programs and its beneficiaries and recipients from an individual who has been shown not to be trustworthy." Sou Kwei Arndt, R.Ph. et al., DAB CR692 (2000). Therefore, in deciding the length of an exclusion that is imposed pursuant to section 1128 of the Act, the question to be considered is: what is reasonably necessary to protect the programs and their beneficiaries and recipients from an untrustworthy individual? In a case involving an exclusion that is imposed pursuant to section 1128(a)(1) of the Act, the factors delineated at 42 C.F.R. §§ 1001.102(b) and (c) state the criteria which may be used to answer this question.

      a. The I.G. proved the presence of aggravating factors.

The I.G. established the presence of three aggravating factors against Petitioner. The factors proved against Petitioner are as follows:

  • That the acts resulting in Petitioner's conviction resulted in a financial loss to the Medi-Cal program of more than $1,500;


  • That the acts, or similar acts, resulting in Petitioner's conviction were committed over a period of more than one year; and


  • That the sentence imposed by the court included a period of incarceration.

I.G. Ex. 1.

i. The acts which were the basis for Petitioner's conviction resulted in financial loss to the State Medicaid program of more than $1,500.

Petitioner does not dispute that the acts which serve as the basis for her conviction resulted in a financial loss to the California Medicaid program of more than $1,500. On March 2, 1999, Petitioner was sentenced and, among other things, was ordered to pay restitution to the California Department of Health Services in the amount of $50,000. I.G. Ex. 3. In fact, at the time of sentencing, Petitioner made a payment in the amount of $20,000 toward the restitution ordered by the court. Id. at 35. As demonstrated by the amount of restitution ordered, Petitioner's criminal acts clearly resulted in a financial loss to the Medi-Cal program of more than $1,500.

ii. The acts resulting in Petitioner's conviction, or similar acts, were committed over a period of one year or more.

Petitioner argues that the time frame for the criminal acts in question is not from February 24, 1994 through December 5, 1995. P. Br. at 7. Petitioner asserts that the dates in question were "merely allegations in the felony complaint." She argues that this particular aggravating factor cannot be established solely by a listing in a criminal complaint. Id. However, the I.G. contends, and I am persuaded, that Petitioner entered a plea to count one of the criminal complaint which states that the criminal acts occurred "from on or about February 24, 1994 to on or about December 5, 1995." I.G. Ex. 3, at 17. Therefore, the time frame delineated in the complaint does in fact cover a period of approximately 22 months. The I.G. has adequately shown the existence of this aggravating factor.

iii. Petitioner's sentence for her crimes included a period of incarceration.

Petitioner was sentenced to a period of incarceration for her criminal acts. Petitioner was sentenced to five years formal probation on the condition that she serve 12 months in the Los Angeles County Jail. I.G. Ex. 3, at 1. This is further substantiated by Superior Court of California, County of Los Angeles Minute Order which states that Petitioner is to "serve 012 months in Los Angeles County Jail." Id. at 34. I find that the I.G. has established this aggravating factor.

b. Petitioner did not prove the presence of any mitigating factors.

Petitioner concedes that she cannot establish any mitigating factors as defined under 42 C.F.R. § 1001.102(c). P. Br. at 8. Instead of claiming mitigating factors, Petitioner makes a "totality of the circumstances" argument as a basis for reduction of the exclusion period. Id. at 3. Petitioner contends that before the codification of 42 C.F.R. § 1001.102 in 1998, this tribunal relied on the "totality of the circumstances" analysis to determine the reasonableness of an exclusion period, and that such reliance is just as appropriate today as it was 10 years ago. P. Br. at 3-4. Petitioner asserts that:

. . . [t]he totality of circumstances analysis is relevant regardless of whether any mitigating factors are satisfied that are identified in 42 C.F.R. § 1001.102(c) as the analysis goes to the weight given to any of the aggravating factors, not the presence of any identified factors.

Id. at 4.

Petitioner asserts several arguments why the 10-year exclusion should be found unreasonable. She argues that, after filing a petition with the court, her conviction was reduced from a felony to a misdemeanor one year after her "no contest" plea. Id. at 5. She argues that she has proven to be a responsible person by keeping all appointments with her probation officer and complying with all of the terms of her probation. Id. Petitioner states that, since the imposition of the exclusion, she has been a law abiding citizen for approximately five years, and therefore has shown to be a trustworthy individual. Id. at 6. Finally, Petitioner argues that she "voluntarily agreed not to participate in any federal health care programs from [August 2000], even though the sentencing court permitted her to continue working in her husband's home health agency." Id

None of these asserted factors relates to any of the mitigating factors stated at 42 C.F.R. § 1001.102(c). Therefore, I may not consider any of the alleged reasons to be factors which mitigate the length of Petitioner's exclusion.

c. A 10-year exclusion is not unreasonable in light of evidence that relates to established aggravating factors.

Evidence relating to established aggravating factors proves Petitioner to have been highly untrustworthy. No mitigating factors were established to offset the aggravating factors. The 10-year exclusion is not unreasonable based on such evidence.

III. Conclusion

I find that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act. I find that a 10-year exclusion is reasonable.

JUDGE
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Marion T. Silva

Chief Administrative Law Judge

FOOTNOTES
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1. "Federal health care program" is defined in section 1128B(f) of the Social Security Act and includes any State health care program, as defined in section 1128(h) of the Act.

2. The term "State health care program" includes a State's Medicaid program. Act, section 1128(h)(1); 42 U.S.C. § 1320a-7(h)(1).

3. Effective October 1, 2000, Title 42 of the Code of Federal Regulations was revised. In this matter, the controlling regulatory provisions are those in effect prior to October 2000, i.e., the version in effect at the time of the I.G.'s notice of exclusion dated July 31, 2000. See Robert Alan Spriggs, R.P.T., DAB CR718 (2000).

CASE | DECISION | JUDGE | FOOTNOTES