SUBJECT:

Norman Imperial,

Petitioner,

The Inspector General

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Norman Imperial, Petitioner, from participating in Medicare, Medicaid, and all federal health care programs for a period of five years. I find that the I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Social Security Act (Act). Further, I find that the I.G.'s exclusion for a minimum period of five years is mandatory. I therefore grant the I.G.'s Motion for Summary Affirmance.

I. Background

By letter dated January 31, 2001 (Notice), the I.G. notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of five years. The I.G. imposed the exclusion pursuant to section 1128(a)(1) of the Act, based on Petitioner's conviction in the California Superior Court, Los Angeles County, of a criminal offense related to the delivery of an item or service under the Medicaid program.

By letter dated April 3, 2001 (hearing request), Petitioner contested the exclusion.⁽¹⁾

During a prehearing conference I held on May 14, 2001, the parties agreed that Petitioner had been convicted of a program-related crime. Petitioner, however, argued that the exclusion is unduly harsh, and would adversely affect his chances of being readmitted into his hospital residency program. The parties agreed that no facts are in dispute; therefore, an in-person hearing is not necessary, and the matter can be decided on the written record.

The parties submitted briefs. The I.G.'s brief was accompanied by five proposed exhibits (I.G. Exs. 1 - 5). Attached to Petitioner's submission were documents which were not marked as proposed exhibits. I am treating these documents as a single exhibit, which I am identifying as P. Ex. 1.

The I.G. declined to file a reply brief. There being no objections raised, I am admitting I.G. Exs. 1 - 5 and P. Ex. 1 into evidence. I base my decision in this case on the parties' arguments, the exhibits admitted, and the applicable law.

II. Issues

The issues in this case are:

1. Whether the I.G. appropriately excluded Petitioner from participating in Medicare, Medicaid, and all federal health care programs; and

2. Whether the five-year exclusion is mandated.

III. Discussion⁽²⁾

1. Petitioner was convicted of a criminal offense related to the delivery of items or services under the California Medicaid program (Medi-Cal).

In 1998, Petitioner was a physician in the Philippines, but was not licensed to practice medicine in California. I.G. Ex. 3 at 4. That year, he went to work part-time at a Long Beach, California clinic, where, as part of a scheme to defraud the Medi-Cal program, he and other individuals fabricated medical charts for ghost patients. P. Ex. 1; I.G. Ex. 3. He created physical examination results, diagnoses, treatment plans, and prescriptions, which were then used to bill the State Medicaid program for services that were never provided. I.G. Ex. 3 at 4. Although he did not directly receive the ill-gotten funds, Petitioner was paid a salary for his part in the scheme. Id. at 5; P. Ex. 1.

Petitioner was indicted, and, on January 24, 2000, pleaded guilty to one felony count of health benefits fraud in violation of California Penal Code § 550(a)(6) ("knowingly mak[ing] and caus[ing] to be made false and fraudulent claims for payment of health care benefits under the Medi-Cal program"). I.G. Ex. 2 at 6. He was sentenced to five years formal probation, on the condition that he serve eight months in county jail, and ordered to pay $200 in restitution. I.G. Ex. 4 at 1. Petitioner's guilty plea and the California State court's acceptance of that plea constitute a "conviction" within the meaning of section 1128(i)(3) of the Act.

Section 1128(a)(1) of the Act requires the exclusion from participation in federal health care programs of any individual or entity convicted of a criminal offense "related to the delivery of an item or service under" Medicare or any State health care program.⁽³⁾ The filing of fraudulent Medicaid claims constitutes program-related misconduct. Alan J. Chernick, D.D.S., DAB CR434 (1996); see also Rosaly Saba Khalil, M.D., DAB CR353 (1995). Here, Petitioner was convicted of health benefits fraud, and does not challenge that he is subject to an exclusion under section 1128(a)(1) of the Act. Therefore, I conclude that Petitioner was convicted of a program-related crime within the meaning of section 1128(a)(1) of the Act.⁽⁴⁾

2. The I.G. is required to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs.

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

3. The statute requires that Petitioner be excluded from participation in federal health care programs for a minimum of five years.

An exclusion of at least five years is mandatory for any individual or entity that has been convicted of a criminal offense under section 1128(a) of the Act. Act, section 1128(c)(3)(B). In a case where the exclusion is for the minimum amount of time, no question of reasonableness exists and, notwithstanding the predictably significant impact of the exclusion on Petitioner's life, I have no authority to lessen the length of the exclusion.

IV. Conclusion

I find that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act. A five-year exclusion is the minimum mandatory period of exclusion required by the Act.

Carolyn Cozad Hughes

Administrative Law Judge

1. Under the relevant regulations, a petitioner must file a written hearing request within 60 days after the notice is received (42 C.F.R. § 1005.2(c)), and the Administrative Law Judge (ALJ) will dismiss a hearing request that is not timely filed. 42 C.F.R. § 1005.2(e). The time within which the request must be filed begins to run when a petitioner receives the notice of exclusion. The date of receipt of the notice of exclusion is presumed to be five days after the date of such notice "unless there is a reasonable showing to the contrary." 42 C.F.R. § 1005.2(c). Although the Notice here is dated January 31, 2001, Petitioner indicated in his hearing request that he did not receive it until the end of February because he moved, and his mail was not forwarded on time. Although the I.G. has suggested that timeliness may be an issue here, she has not seriously challenged Petitioner's assertion. I therefore consider the hearing request timely filed.

2. In the Discussion section of this decision, I make findings of fact and conclusions of law, which are set out as separately numbered headings and discussed in detail.

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

4. Portions of section 1128 of the Act were amended by Congress through its enactment of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, Public Law No. 104-191, on August 21, 1996. One of the amendments created a new section, section 1128(a)(3), which requires that any individual or entity convicted of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, be excluded for a minimum of five years. See John A. Sayegh, M.D., DAB CR551 (1998); Donald R. Kirks, M.D., DAB CR765 (2001). Here, Petitioner was convicted of health benefits fraud, a felony. Although the I.G. cited only to section 1128(a)(1) Petitioner could also be subject to an exclusion under section 1128(a)(3) of the Act.