SUBJECT:

Aloysius C.. Maduford, M.D., aka Aloysius C. Maduforo,

Petitioner,

The Inspector General

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Aloysius C. Maduford, M.D., aka Aloysius C. Maduforo, ⁽¹⁾ from participating in the Medicare, Medicaid, and all federal health care programs pursuant to section 1128(b)(14) of the Social Security Act (Act). However, while the I.G. notified Petitioner that his exclusion would remain in effect "until your debt has been completely satisfied," I find that pursuant to regulation Petitioner is to be excluded "until such time as PHS [the Public Health Service] notifies the OIG [Office of the Inspector General] that the default has been cured or the obligations have been resolved to the PHS's satisfaction." 42 C.F.R. § 1001.1501(b).

The I.G. also excluded Petitioner under section 1892 of the Act. I do not address Petitioner's exclusion under this section inasmuch as I question whether I have the authority to review an exclusion imposed pursuant to section 1892, and such review is not necessary for the resolution of this matter. Cynthia Iraci, D.C., DAB CR629 (1999); Michael D. Lawton, M.D., DAB No. 1784, at fn. 1 (2001).

I. BACKGROUND

A. Background facts

On June 29, 2001, the I.G. notified Petitioner that he was being excluded from participating in Medicare, Medicaid and all federal health care programs due to his failure to repay his Health Education Assistance Loans (HEAL loans) or to enter into an agreement to repay the debt. The I.G. indicated that Petitioner had been excluded pursuant to the I.G.'s authority under sections 1892 and 1128(b)(14) of the Act and that the exclusion would remain in effect until his debt had been completely satisfied. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision.

On August 29, 2001, I convened a telephone prehearing conference. During the conference I gave Petitioner until September 28, 2001 to set up a repayment plan for his HEAL loans. On October 19, 2001, the staff attorney assigned to this case contacted Petitioner to ascertain the status of the case (as I had informed the parties during the August 29, 2001 telephone prehearing conference she would be doing, as reflected in the staff attorney's letter to the parties dated September 4, 2001). Petitioner informed her that he had been unable to set up a repayment plan for his HEAL loans and that he wanted to brief the issues in the case. I then set a briefing schedule. See Order and Schedule for Filing Briefs and Documentary Evidence dated October 19, 2001. The I.G. timely submitted a brief accompanied by 31 exhibits. Petitioner has not objected to the I.G.'s exhibits (I.G. Exs.) and thus I admit I.G. Exs. 1 - 31 into evidence. Petitioner filed his response untimely, but the I.G. has not objected to my consideration of his submission. Thus, I am accepting Petitioner's two page "Answer to the Inspector General's Case" dated February 24, 2002, and Petitioner's letter dated April 15, 2002, as Petitioner's response to the I.G.'s brief. The I.G. declined to submit a reply.

B. Governing Law

Section 1128(b)(14) of the Act provides, in pertinent part:

(b) PERMISSIVE EXCLUSION. - The Secretary [of the Department of Health and Human Services] may exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f) . . . . (14) DEFAULT ON HEALTH EDUCATION LOAN OR SCHOLARSHIP OBLIGATIONS. - Any individual who the Secretary determines is in default on repayments of scholarship obligations or loans in connection with health professions education made or secured, in whole or in part, by the Secretary and with respect to whom the Secretary has taken all reasonable steps available to the Secretary to secure repayment of such obligations or loans . . . .

Act, section 1128(b)(14).

The Secretary has delegated to the I.G. the authority to exclude individuals pursuant to this provision.

The regulations at 42 C.F.R. § 1001.1501 provide that before imposing an exclusion on an individual whom the Public Health Service (PHS) has determined is in default, the I.G. must determine that PHS has taken "all reasonable administrative steps to secure repayment of the loans or obligations." 42 C.F.R. § 1001.1501(a)(2). The I.G. will find that all reasonable steps have been taken if PHS has offered a Medicare offset arrangement as required by section 1892 of the Act. Id. An individual is excluded until such time as "PHS notifies the OIG that the default has been cured or the obligations have been resolved to the PHS's satisfaction." 42 C.F.R. § 1001.1501(b).

II. ISSUES, FINDINGS OF FACT AND CONCLUSIONS OF LAW.

A. Issues

1. Whether the I.G. has a basis upon which to impose and direct an exclusion against Petitioner.

2. If the I.G. has a basis upon which to impose and direct an exclusion against Petitioner, what is the appropriate length for that exclusion?

B. Findings of Fact and Conclusions of Law

I make findings of fact and conclusions of law (Findings) to support my decision that the I.G. is authorized to exclude Petitioner until PHS notifies the I.G. that his default on his HEAL loans have been cured or the obligations have been resolved to PHS's satisfaction.

My findings are numbered consecutively and in bold and italics.

1. The I.G. is authorized to exclude Petitioner because he is an individual who is in default on repayments of loans in connection with health professions education made or secured, in whole or in part, by the Secretary, and with respect to whom the Secretary has taken all reasonable steps available to secure repayment of such obligations or loans.

Petitioner was a student at Temple University during the school years 1991 - 1995. I.G. Exs. 3 - 7. While a student, Petitioner applied for, was approved for, and received, five HEAL loans, and executed promissory notes for each, agreeing to repay the borrowed amounts. Id. The lenders for these HEAL loans were the Pennsylvania Higher Education Assistance Agency (PHEAA) and the Student Loan Marketing Association/Loan Servicing Center (Sallie Mae). I.G. Exs. 3 - 9, 31.

Petitioner did not timely begin repayment of his HEAL loans. On April 8, 1998, Sallie Mae obtained a default judgment against Petitioner in the amount of $27,105.46. I.G. Ex. 8. Sallie Mae then assigned the judgment to the United States. Id. On April 27, 1998, PHEAA obtained a judgment against Petitioner for $70,323.73. I.G. Ex. 9. PHEAA then assigned this judgment to the United States. Id. The Department of Health and Human Services (HHS) assumed the debt and commenced collection efforts.

On July 23, 1998, and September 24, 1998, Petitioner was contacted by the Program Support Center (PSC), an operating division of HHS. I.G. Exs. 10 - 14. PSC sent Petitioner five separate letters, one for each of the separate HEAL loans Petitioner had obtained. Id. Petitioner was informed that his loans had been consolidated to provide him with the lowest interest rate allowable by law, and he was given instructions on how to enter into a repayment agreement. Id. Petitioner was also informed that if he failed either to pay his debt in full or enter into a repayment agreement, then the debt would be reported to consumer reporting agencies and referred to a collection agency or the Department of Justice for enforced collection. Id. Petitioner was also informed that his account might be referred to the Department of Treasury for offset, or to the I.G. for the initiation of exclusion from participation in Medicare. Id.

On September 1, 1998, and December 1, 1998, PSC informed Petitioner (again by five separate letters) that his account was referred to PSC's collection agency. I.G. Exs. 15 -19. PSC reiterated that it was imperative that Petitioner either pay his debt in full or establish a repayment agreement. Id. PSC reiterated that the failure to do this would cause PSC to refer Petitioner's account to the Department of Justice for enforced collection and/or to other federal agencies for administrative offset, including income tax refunds, wage garnishments, and offset of payments made by the United States. Id.

On January 21, 1999, Petitioner was again advised by PSC (again by five separate letters) of his indebtedness and that his account was seriously delinquent. I.G. Exs. 20 - 24. Petitioner was informed that the debt would be referred to other federal agencies for the purpose of administrative offset. Id. Petitioner was informed he had the right to inspect and copy the agency's records relating to his debt and to present evidence that the debt was not past due or legally enforceable. Id. Petitioner was told that payment in full would terminate administrative offset. Id. Petitioner was again offered the opportunity to enter into a repayment agreement. Id.

On February 21, 2001, Petitioner was given a final opportunity (again by five separate letters) to enter into a repayment agreement. I.G. Exs. 25 - 29. Petitioner was advised again that if he did not negotiate a repayment agreement within 60 days, his case would be referred to the I.G. for initiation of a program exclusion. Id. Petitioner did not respond (as Petitioner apparently had not responded to any of the previous letters to him requesting repayment) and the I.G. excluded him by notice letter dated June 29, 2001.

In his request for a hearing, Petitioner asserted that he did not recall receiving the I.G.'s February 21, 2001 letter "to the best of my recollection." ⁽²⁾ Petitioner also asked for reconsideration of the exclusion, noting, among other things, that he was not employed, had a family to support, and that he had other, unspecified loans in deferment or forbearance. In his response to the I.G.'s motion for summary affirmance, Petitioner asserted that "[a]fter reading the multitudes of documents the Inspector's office presented, I am dumb founded because some of the letters included in their petition is noticed for the first time." Petitioner did not detail which of the "multitudes of documents" he allegedly did not receive. Petitioner then admitted "that the fact that I have not paid my debt to HEAL is not in dispute." Instead, Petitioner argues that, by excluding him, the I.G. is acting with "malicious intent" in that he will not be able to complete his residency training if he is excluded. Petitioner asserts that he wants to enter into a repayment agreement, but that he also wants his exclusion held in abeyance until he begins employment and is in a position to make repayment, which the government has not agreed to do. ⁽³⁾ Petitioner's brief arguments, which appear to rest on equity and fairness principles, are unavailing.

Petitioner does not contest that he applied for and received the loans in question, nor does he dispute that the loans were made "in connection with health professions education." Act, section 1128(b)(14). Petitioner admits that he remains in default on his HEAL loans and has not entered into an agreement for repayment of his HEAL loan indebtedness. Given these undisputed facts, I must find that the I.G. has the authority to exclude Petitioner under section 1128(b)(14) if I conclude that the Secretary took "all reasonable steps available" to secure Petitioner's repayment of his HEAL debt.

The term "all reasonable steps available" has been construed to mean all reasonable and legitimate means of debt collection. Cynthia Iraci, D.C., DAB CR629 (1999); Cynthia M. Ramkelawan, D.D.S., DAB CR415 (1996); Charles K. Angelo, Jr., M.D., DAB CR290 (1993). In Ramkelawan, the petitioner was given the opportunity to reduce her HEAL loan indebtedness by surrendering a part of the payments she received from government programs, that is, by entering into an offset agreement. HHS also issued numerous warnings to the petitioner prior to the I.G.'s imposition of an exclusion. Under such circumstances, an administrative law judge held that HHS took reasonable measures to collect the indebtedness before Petitioner was excluded. Ramkelawan, DAB CR415, at 5, 7 - 8. The circumstances in this case are similar. PHS offered Petitioner the ability to enter a repayment agreement for each of his five HEAL loans on several occasions, as noted above, and also included language referencing offset. Moreover, during the pendency of this appeal, I gave Petitioner additional time to negotiate a repayment agreement. Thus, I find from this that PHS has taken all reasonable administrative steps necessary to secure repayment of Petitioner's loans, including offering an offset arrangement. 42 C.F.R. § 1001.1501(a).

2. The length of the exclusion imposed by the I.G. under section 1128(b)(14) of the Act is modified to comport with the language of section 1128(b)(14) of the Act.

In the I.G.'s letter of June 29, 2001 notifying Petitioner of his exclusion, the I.G. advised Petitioner that his exclusion would "remain in effect until your debt has been completely satisfied." The I.G.'s determination, however, does not comport with the standard for the length of an exclusion that may be imposed under section 1128(b)(14) of the Act. That standard is set forth in 42 C.F.R. § 1001.1501(b) as being "until such time as PHS notifies the OIG that the default has been cured or the obligations have been resolved to the PHS's satisfaction." Accordingly, I find that Petitioner shall be excluded until such time as PHS notifies the I.G. that his HEAL loan default has been cured or the obligations have been resolved to PHS's satisfaction.

Carolyn Cozad Hughes

Administrative Law Judge

1. The notice letter sent to Petitioner on June 29, 2001 was sent to "Aloysiuc C. Maduford, M.D." In his hearing request, Petitioner states his name to be "Aloysius C.E. Maduforo, M.D." Petitioner did not, however, contest that he was in fact the "Aloysius C. Maduford, M.D." noticed by the I.G. and I accept him as such. Moreover, in my review of the evidence submitted by the I.G., which includes applications for HEAL loans filled out by Petitioner (I.G. Exhibits 3 - 7), I note that Petitioner's name is hand-printed as Aloysius C. Maduforo. However the way the name is hand-printed, it is possible that at some point the name was mistaken to be "Maduford."

2. I note that all the letters to Petitioner (I.G. Exs. 10 - 29), including the letters of February 21, 2001, were sent to Petitioner at the address he noted on his loan applications. The I.G.'s letter of June 29, 2001 was sent to a different address, the address reflected on Petitioner's hearing request. Nothing in the record indicates when Petitioner moved, and Petitioner has not argued that he did not receive letters from the PSC or from the I.G. due to a change of address. Petitioner was afforded the opportunity to submit evidence regarding whether or not he received these communications and has chosen to make only an unsupported allegation that he did not recall receiving the February 21, 2001 letters and that he did not receive an unspecified number of the other letters. I do not find Petitioner's assertion that he did not receive these documents to be credible.

3. Petitioner also claims that if he had realized the "Dept of justice" would not resolve the repayment issue to his satisfaction, he might have needed to hire an attorney to resolve the issue, but that his "financial constrain could not enable me at this time" to do so. However, Petitioner has not requested that I delay my consideration of the parties' briefing while he attempts to retain an attorney, nor do I believe the facts in this case compel me to delay my decision in order for Petitioner to obtain an attorney. Nothing precludes Petitioner from negotiating a repayment plan during the period of his exclusion.