SUBJECT:

Diana J. Askew,

Petitioner,

The Inspector General

DECISION

This case is before me pursuant to a request for hearing dated August 16, 2001 and filed by Diana J. Askew (Petitioner), which was received by the Civil Remedies Division of the Departmental Appeals Board (DAB) on August 20, 2001.

By letter dated July 31, 2001, the Inspector General (I.G.) notified Petitioner that she was being excluded from participation in the "Medicare, Medicaid, and all Federal health care programs," as defined in section 1128B(f) of the Social Security Act (Act), for a period of five years, the minimum mandatory period of exclusion under the Act. The I.G. informed Petitioner that she was being excluded pursuant to section 1128(a)(1) of the Act, due to her conviction in the District Court of Finney County, Kansas, of a criminal offense related to the delivery of an item or service under the Medicaid program.

I held a telephone prehearing conference in this case on September 21, 2001. The parties agreed that this matter could be decided based on written arguments and documentary evidence, and that an in-person evidentiary hearing was unnecessary. Both parties submitted written submissions in support of their contentions (I.G. Br. and P. Br.) and responses (I.G. Reply Br. and P. Reply Br.). Additionally, the I.G. submitted four proposed exhibits. These have been identified as I.G. exhibits (I.G. Exs.) 1 - 4. Petitioner offered three exhibits. These have been identified as Petitioner's exhibits (P. Exs.) 1 - 3. Petitioner objected to the admission of I.G. Ex. 3 on hearsay grounds. P. Reply Br. at 2. That document is the "AFFIDAVIT FOR PROBABLE CAUSE AND ARREST WARRANT" prepared by Mr. Robert E. Swafford, an Investigator with the State of Kansas Office of Attorney General. Mr. Swafford's affidavit is a formal prosecutorial document which was filed with the District Court of Finney County, Kansas, and forms part of the criminal proceedings that gave rise to Petitioner's request for hearing, which request is now before me. Consequently, I deny Petitioner's objection and admit I.G. Exs. 1 - 4 and P. Exs. 1 - 3 into evidence.

It is my decision to sustain the determination of the I.G. to exclude Petitioner, Diana J. Askew, from participating in the Medicare, Medicaid, and all federal health care programs for a period of five years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. It is my finding that Petitioner was convicted of a criminal offense related to the delivery of an item or service under the Medicaid program. Additionally, I find that the five-year exclusion imposed by the I.G. is the minimum period mandated by law and that I am thus not permitted to review the length of such exclusion.

Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all other federal health care programs.

Section 1128(a)(1) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual convicted of a criminal offense related to the delivery of an item or service under the Medicaid program.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years. Act, section 1128(c)(3)(B), and 42 C.F.R. § 1001.102(a).

Pursuant to 42 C.F.R. § 1001.2007, a person excluded under section 1128(a)(1) may file a request for hearing before an Administrative Law Judge (ALJ).

Section 1128(b) of the Act authorizes the Secretary to exclude individuals from receiving payment for services that would otherwise be reimbursable under Medicare, Medicaid, or other federal health care programs.

Findings of Fact and Conclusions of Law

1. Beginning in January, 1996, Petitioner was employed as an Information Resource Specialist by the Department of Social Rehabilitation Services (SRS) area office in Garden City, Kansas. I.G. Ex. 3.

2. During the period beginning in February, 1995 through January, 7, 1999, Petitioner provided part-time services as a personal care attendant (PCA) to Jana Slemp in Hugoton Kansas. I.G. Exs. 1, 3.

3. Jana Slemp was a Medicaid recipient receiving Home and Community Based Services. I.G. Ex. 3.

4. On May 22, 2000, Petitioner was charged, in a one count Amended Information filed in the District Court of Finney County, Kansas, with unlawfully and negligently failing to maintain adequate records with regard to Medicaid services provided to Jana Slemp, between August 20, 1996 and January 7, 1999, in violation of K.S.A. 21-3848, K.S.A. 21-4502(1)(a), and K.S.A. 21-4503(a). I.G. Exs. 1, 3.

5. Petitioner entered a plea of nolo contendere on May 24, 2000, which was accepted by the District Court of Finney County, Kansas, on that date. I.G. Ex. 2.

6. Petitioner was sentenced on June 27, 2000, to 90 days in jail, suspended, on condition of payment of $928.70 restitution to the Medicaid program, $102.50 in court costs, and $2,171.08 for expenses incurred in the process of investigation. I.G. Ex. 4, at 2, 4.

7. Petitioner's plea of nolo contendere and the court's acceptance of that plea constitute a conviction within the meaning of section 1128(i)(3) of the Act.

8. Petitioner has been convicted under State law of a criminal offense related to the delivery of an item or service under the Medicaid program.

10. Pursuant to section 1128(a)(1) of the Act, the I.G. is required to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs.

11. The minimum mandatory period of exclusion under section 1128(a)(1) of the Act is five years. Act, section 1128(c)(3)(B).

12. The I.G. properly excluded Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for five years.

Petitioner was a PCA for Medicaid recipients in the State of Kansas during the period relevant to this case. Pursuant to an investigation conducted by the Office of the Kansas Attorney General through the Medicaid Fraud and Abuse Division, it was determined that between August 20, 1996 and January 7, 1999, in Finney County, Kansas, Petitioner unlawfully and negligently failed to maintain records, that is, time sheets that are necessary to disclose fully the amount and nature of services for which claims were submitted or payments were received under the Medicaid program. I.G. Exs. 1, 3. The Investigator concluded that the amount billed to the Medicaid program, based upon the time sheets submitted by Petitioner for those dates, failed to account for services reimbursed in the amount of $928.70. Id.

Based on the above facts, Petitioner was charged in a one count Amended Information with failing to maintain adequate records in violation of Kansas law. I.G. Ex. 1. She entered a plea of nolo contendere, which was accepted by the court. I.G. Ex. 2. In light of that conviction, the I.G. notified Petitioner of her exclusion from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of five years, as required by sections 1128(a)(1) and 1128(c)(3)(B) of the Act.

The issue before me is whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all federal health care programs.⁽¹⁾

Petitioner argues that a basis for exclusion does not exist because the Medicaid program suffered no loss as a result of her activities, fraud is not part of the definition of the crime of which she was convicted, nor is her offense related to the delivery of an item or service under the Medicaid program. P. Br. at 5, 6. These arguments find no support in the law or the facts of this case.

Section 1128(a)(1) of the Act states that:

The Secretary shall exclude the following individuals and entities from participation in any Federal health care program:

(1) 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.

Petitioner's initial argument that there is no fraud in the definition of the crime of which she was convicted is misplaced. In order to determine whether fraud is an element of the basis for exclusion we must look to the federal statute and not to the statute under which Petitioner was convicted. Perusal of the pertinent portion of the statute, as cited above, clearly indicates that the threshold requirement for exclusion is a conviction of a criminal offense without reference to whether fraud is involved. Similarly, it need not be established that there has been a financial loss to the Medicaid program.⁽²⁾

The regulatory criteria regarding the five-year mandatory exclusion for convictions related to the delivery of an item or service under Medicare or Medicaid, only require a specified financial loss when the I.G. utilizes that as a factor to lengthen the period of exclusion beyond the minimum statutory mandate. 42 C.F.R. § 1001.101, 101.102.

Petitioner's final assertion, that the offense of which she was convicted was not related to the delivery of an item or service under the Medicaid program, is also without merit. Petitioner advances the argument that the State statute that was the basis for her conviction does not speak to the delivery of an item or service, but rather to the records which an individual is required to maintain for a period of five years. Thus, claims Petitioner, the Secretary cannot say that the failure to maintain adequate records for five years is an offense related to the delivery of an item or service under the Medicaid program.

Petitioner overlooks that maintaining adequate records for a period of five years is not an element of the crime for which she was convicted. The critical elements are the unlawful and negligent failure to maintain records. The Amended Information specifically defines those elements as keeping "time sheets that are necessary to disclose fully the amount and nature of services for which a claim was submitted or payments were received under the [m]edicaid program." The Amended Information is unambiguous in stating that such unlawful and negligent record keeping failed to properly account for the services for which a claim under the Medicaid program was submitted. The federal statute previously cited does not require that the law under which the excluded individual is convicted specifically speak in verbatim terms of the delivery of an item or service under the Medicaid [or Medicare] program. The nexus required by the Act in the case under consideration here is sufficient because Petitioner failed to maintain adequate records to account for claims made for services rendered to a Medicaid beneficiary.

In view of the foregoing, I find that Petitioner is an "individual convicted . . . of a criminal offense related to the delivery of an item or service under [the Medicaid program]. Act, sections 1128(a)(1), 1128(i)(3). The essential elements for mandatory exclusion are the existence of a conviction and that the offense be related to the delivery of an item or service under Title XVIII of the Act or a State health care program. These elements are present in this case.

Pursuant to 42 C.F.R. § 1001.2007, an individual excluded under this section may file a request for hearing before an ALJ on the issues of whether:

• The basis for the imposition of the sanction exists; and



• The length of exclusion is unreasonable.

However, when the I.G. imposes an exclusion under subpart B of part 1001 of 42 C.F.R. for the mandatory five-year period, the issue of the length of such exclusion is not considered. 42 C.F.R. § 1001.2007(a)(2). Congress has established a mandatory exclusion period of five years, minimum. Aggravating factors for lengthening the period may be considered, but the five-year term will not be shortened.

Thus, the only issue in this case is whether a basis exists for the exclusion.

It is evident that Petitioner's conduct is the type that Congress sought to prevent and is for the benefit of a protected class of individuals. It follows then that a person who fails to disclose fully the amount and nature of services for which a claim is submitted or payments received under the Medicaid program, is not fit to participate in federal health care programs. This is consistent with the Secretary's duty to assure that the requirements that govern the provision of health care, and the enforcement of those requirements, are adequate to protect the health, safety, welfare, and rights of beneficiaries and recipients of federal health care programs.

In view of the clear statutory and regulatory language, none of Petitioner's defenses have any merit. The unambiguous language of the Congressional legislation and the regulations promulgated by the Secretary allow no room for a different interpretation.

Conclusion

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

Jose A. Anglada

Administrative Law Judge

1. In her brief, Petitioner states that it was her attorney's understanding from the dialogue at the prehearing conference that it may also be material whether Medicaid sustained a loss in this case. P. Br. at 5. That, no doubt, is a misunderstanding. The issue in this case was set forth at page 2 of the "ORDER AND SCHEDULE FOR FILING BRIEFS AND DOCUMENTARY EVIDENCE" noticed to the parties after the September 21, 2001 conference. Petitioner sought no clarification of that order. As discussed later in this decision, financial loss may be an issue in some situations but it is not an issue here.

2. As the I.G. points out in her brief, although financial loss is not a factor to be considered in connection with a five-year exclusion under section 1128(a)(1) of the Act, the restitution of $928.70 which was ordered by the court is evidence of a financial loss to a government program. I.G. Reply Br. at 4, 5.