CASE | DECISION | JUDGE | FOOTNOTES

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


SUBJECT:

Jose Grau, M.D.,

Petitioner,

DATE: July 15, 2002
                                          
             - v -

 

The Inspector General

 

Docket No.C-02-079
Decision No. CR930
DECISION
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DECISION

Jose Grau, M.D. (Petitioner) is excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years pursuant to section 1128(a)(1) of the Social Security Act (Act), based upon his "conviction" in the United States District Court for the Middle District of Florida, Tampa, Florida, of a criminal offense related to the Medicare program. There is a proper basis for exclusion and a five-year exclusion is the minimum allowed by law.

PROCEDURAL HISTORY

Petitioner was notified of his exclusion by letter dated August 31, 2001. The Inspector General (I.G.) cited section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)) as the basis for Petitioner's exclusion. Petitioner appeals the I.G.'s action by letter dated October 25, 2001, arguing that: (1) despite his guilty plea and plea agreement, he is now challenging his sentence; and (2) he is not subject to mandatory exclusion but may be subject to permissive exclusion.

The case was assigned to me for hearing and decision on November 9, 2001. I convened a telephonic prehearing conference with the parties on December 11, 2001, which is memorialized in a letter dated December 20, 2001 sent at my direction, containing a briefing schedule. The I.G. filed her brief on January 9, 2002. However, Petitioner failed to file a response brief on February 8, 2002. Accordingly, on April 9, 2002, I issued an "Order to Show Cause" as to why I should not dismiss the case for abandonment due to Petitioner's failure to file a response.

On May 14, 2002, Petitioner's April 18, 2002 letter responding to the "Order to Show Cause" with his responsive brief attached, was received at the Civil Remedies Division. However, due to clerical error the response was not brought to my attention and on May 20, 2002, I dismissed this case. On May 22, 2002, after staff discovered the error, I vacated my dismissal, found good cause for Petitioner's prior failure to file, and accepted his responsive brief. The I.G. did not file a reply brief. The I.G. submitted exhibits 1 through 6 (I.G. Ex.), with her brief. Petitioner filed his response with exhibits A through H (P. Ex.). The offered exhibits are admitted.

There are no disputed issues of material fact in this case. The only issues are: (1) whether Petitioner's challenges to his sentence or conviction have any bearing upon his exclusion; and (2) whether he should have been subject to the permissive rather than mandatory exclusion provisions of the Act. Because I find that the I.G. appropriately applied the mandatory exclusion provisions of section1128(a) of the Act, the minimum period of exclusion is five years as a matter of law. The I.G. did not extend the statutory minimum five-year period in this case. Thus, there is no issue related to the reasonableness of the period of mandatory exclusion. The issues presented by this case must all be resolved as issues of law. Accordingly, summary judgment is appropriate and no hearing is necessary in this case for a full and fair disposition.

FINDINGS OF FACT

The following findings of fact are based on the uncontested and undisputed assertions of fact in the parties' pleadings and the exhibits admitted.

1. Petitioner was, on the date of the I.G. action, a licensed medical practitioner in the State of Florida, and authorized to participate in Medicare, Medicaid, or other federal health care programs. I.G. Ex. 5 at 2.

2. Community Clinical Laboratory, Inc. (CCL) is a clinical laboratory based in Clearwater, Florida, and a provider of Medicare services. I.G. Ex. 5 at 2.

3. Petitioner was one subject of a 31-count grand jury indictment (he was named in 11 of the 31 counts) that alleged he conspired and participated in an illegal kick-back scheme from November 1995 until April 1998, more specifically, that he knowingly and willfully solicited and received remuneration in return for referring individuals for the furnishing of items and services and for recommending the purchasing and ordering of goods and services for which payment may have been made in whole or in part under the Medicare program in violation of 42 U.S.C. § 13201-7b(b)(1). I.G. Exs. 4-6.

4. Pursuant to a plea agreement, Petitioner pled guilty to Count 2 of the indictment, which charged him with soliciting and receiving remuneration in return for referring Medicare work, in violation of 42 U.S.C. § 1320a-7b(b)(1). I.G. Exs. 4, 5 and 6.

5. Petitioner was convicted, pursuant to his plea of guilty, by the United States District Court, Middle District of Florida, and he was placed on probation for three years. He was also ordered to pay a $3,000 fine, $100 assessment, and $46,500 in restitution, based upon a finding of a $46,500 loss to the government. I.G. Ex. 4 at 4.

6. By letter dated August 31, 2001, the I.G. informed Petitioner that he would be excluded from participation in Medicare, Medicaid, or other federal health care programs for a period of five years, effective 20 days after the date of the letter, based upon Petitioner's conviction as described in Findings 5 and 6. I.G. Ex. 1.

7. The I.G. did not extend the period of exclusion beyond the five-year minimum based upon the aggravating factor that the loss to the government exceeded $1500.

8. In the notice letter of August 31, 2001, the I.G. noted the existence of the mitigating factor that "[Petitioner's] cooperation with Federal or State officials ... resulted in others being convicted or excluded from Medicare, Medicaid, and all other Federal health care programs." I.G. Ex. 1.

CONCLUSIONS OF LAW

1. Summary judgment is appropriate in this case as there are no material facts in dispute.

2. On March 27, 2001, Petitioner was convicted of violating 42 U.S.C. § 1320a-7b(b)(1) for receiving remuneration in return for Medicare work. I.G. Ex. 4.

3. Petitioner was convicted within the meaning of section 1128(i) of the Act. 42 U.S.C. § 1320a-7(i).

4. Petitioner is subject to mandatory exclusion pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)) due to his conviction for participating in an illegal kick-back scheme in violation of section 1128B(b)(1) of the Act (42 U.S.C. § 1320a-7b(b)(1)).

5. Petitioner must be excluded from participation in any federal health care program for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) due to his conviction.

DISCUSSION

A. APPLICABLE LAW

Petitioner's right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1230a-7(f)). Petitioner's request for a hearing was timely filed and I do have jurisdiction. However, the Secretary of the United States Department of Health and Human Services (Secretary) has by regulation limited my scope of review to two issues: (1) whether there is a basis for the imposition of the sanction; and, (2) whether the length of the exclusion is unreasonable. 42 C.F.R. § 1001.2007(a)(1). The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c) and (d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b) and (c).

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual or entity convicted of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs. Section 1128(i) of the Act (42 U.S.C. § 1230a-7(i)) defines the term "convicted" as used in section 1128(a) as follows:

an individual or entity is 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 beenwithheld.

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 five years, unless specified aggravating or mitigating factors are present which form the basis for lengthening or shortening the period of exclusion. See also 42 C.F.R. § 1001.10(a), (b), and (c). Only if the aggravating factors justify an exclusion of longer than five years, may mitigating factors be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

B. ISSUES

(1) Whether Petitioner's challenges to his sentence or conviction have any bearing upon his exclusion.

(2) Whether Petitioner should have been subject to the permissive rather than mandatory exclusion provisions of the Act.

C. ANALYSIS

There is no dispute as to the material facts in this case. On December 21, 2000, Petitioner entered a guilty plea to one count of an indictment, which charged him with soliciting and receiving remuneration in return for referring Medicare work, in violation of 42 U.S.C. § 1320a-7b(b)(1). (1) On March 27, 2001, a judgment of conviction was entered in the United States District Court against Petitioner for receiving unlawful remuneration in return for Medicare work, violating 42 U.S.C. § 1320a-7b(b)(1). I.G. Ex.4. Petitioner was placed on probation for three years, ordered to pay a $3,000 fine, a $100 assessment, and $46,500 in restitution to the Health Care Financing Administration. (2) I.G. Ex. 4 at 4.

By notice letter dated August 31, 2001, the I.G. informed Petitioner that he would be excluded from participation in the Medicare, Medicaid, and all federal health care programs for a period of five years due to his conviction for a criminal offense related to the delivery of an item or service. Petitioner challenges his exclusion on two grounds. He argues that he is: (1) filing a motion to vacate, set aside, or correct his sentence, pursuant to 28 U.S.C. § 2255; and, (2) that his conviction does not fall under section 1128(a)(1) of the Act, the provision for mandatory exclusions. Petitioner argues that a permissive exclusion is more applicable in this case, referring to section 1320a-7(b)(7); Petitioner feels that the permissive exclusion at 1320a-7(b)(7) specifically deals with fraud, kickbacks, and other prohibited activities. P. Request for Hearing at 2; I.G. Ex. 2 at 2.

1. Summary judgment is appropriate.

Summary disposition is appropriate where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor or the party against whom the motion is made. A party opposing summary disposition must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c). There are no issues of material fact in dispute in this case. The only issues in this case involve application of the law to the facts. No hearing is required for a full adjudication of the issue and summary judgment is appropriate.

2. Petitioner may not challenge his conviction or sentence before me as such collateral attack is prohibited by regulation.

Petitioner asserted in his request for hearing that he was in the process of filing a motion to vacate, set aside or correct sentence, pursuant to 28 U.S.C. § 2255. He further asserts that if he receives relief from the sentence, the basis for exclusion will be eliminated. Petitioner is in error. He suggests that favorable action on his motion to vacate, set aside, or correct his sentence, may eliminate the basis for his exclusion. However, it is the conviction of a criminal offense that triggers exclusion - not the sentence. If Petitioner's conviction is set aside he might have an argument to be reinstated, but a favorable result on appeal from his criminal conviction would not necessarily void his exclusion. While a criminal sentence may become relevant if it is used as an aggravating factor to extend the period of exclusion, that did not happen in this case.

Petitioner's allegation that he may receive relief from his sentence or even that his conviction might be subject to challenge are not only irrelevant to my decision, the regulations specifically prohibit collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(d). Petitioner simply cannot challenge the facts relating to his criminal conviction in a hearing before me. See Valerie Baker, DAB CR815 (2001); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter Edmondson, DAB CR163, aff'd, DAB No. 1330 (1992).

3. Petitioner was properly excluded pursuant to section 1128(a)(1) of the Act based on his conviction for violation of section 1128B(b)(1) of the Act.

Petitioner's argument that his conviction does not fall within the mandatory exclusion provisions of the Act but rather should be considered under the permissive exclusion section, is also without merit. The same or closely related arguments have been considered and definitively rejected by the appellate panel of the Departmental Appeals Board (DAB) in Lorna Fay Gardner, DAB No. 1733 (2002). Petitioner Gardner raised an argument similar to that raised in this case - that her offense could be characterized as falling under either the mandatory or permissive exclusion provisions of section 1128. Petitioner Gardner was convicted of a misdemeanor and she argued that her misdemeanor was more appropriately handled under the permissive rather than the mandatory exclusion provisions. See also Stacy Ann Battle, D.D.S., P.C., DAB CR900 (2002). Petitioner Grau argues that 42 U.S.C. § 1320a-7(b)(7), a permissive exclusion, is applicable because the behavior that his conviction was based on was for "fraud, kickbacks, and other prohibited activities." P. Request for hearing at 2. The DAB, relying upon the plain language of section 1128, the legislative history of the Act, and a prior DAB decision which was upheld on appeal to the Federal District Court, held that the distinction recognized by section 1128 of the Act is whether an offense is program-related.

Petitioner was convicted for receiving remuneration in return for Medicare work, clearly program-related conduct. Petitioner was convicted for knowingly and willfully receiving remuneration in return for referring individuals for the furnishing of items and services and for recommending the purchasing and ordering of laboratory services under the Medicare program in violation of 42 U.S.C. § 1320a-7b(b)(1). I.G. Exs. 4-6. Petitioner referred patients (including Medicare beneficiaries) and laboratory work (including laboratory work which was reimbursable by Medicare) to CCL in return for payment. Moreover, Petitioner received money from CCL for the referral of Medicare work. I.G. Exs. 4-5.

The unlawful receipt of remuneration in return for Medicare referrals constitutes program-related misconduct. Administrative Law Judges of the DAB have repeatedly upheld section 1128(a)(1) exclusions based on convictions of receiving illegal kickbacks or bribes concerning Medicare or Medicaid. Further, the DAB has specifically found that someone convicted of a section 1128B(b)(1) offense is appropriately excluded under section 1128(a)(1). Boris Lipovsky, M.D., DAB No. 1363 (1992); see also, Jitendra C. Shah, M.D., DAB CR720 (2000) (the receipt of unlawful remuneration is an offense clearly related to the delivery of an item or service under the Medicare or Medicaid program); Maximo Levin, M.D., DAB CR343 (1994) (it is well-established that violation of the antikickback provisions of the Act, set forth in section 1128B(b)(1)(B), constitutes a clear program-related offense invoking mandatory exclusion). It is well-established, that once there's been a determination that a petitioner has been convicted of a program-related offense, exclusion is mandatory under section 1128(a)(1) of the Act. Peter J. Edmonson, DAB CR163, aff'd, DAB No. 1330 (1992). The conviction in the instant case is clearly program-related. Therefore, the Secretary and the I.G. have no choice but to exclude Petitioner pursuant to section 1128(a) of the Act.

Accordingly, I conclude that there is an appropriate basis for the mandatory exclusion of Petitioner, Jose Grau, M.D., due to his conviction for a program-related offense.

The effective date of Petitioner's exclusion is September 20, 2001, 20 days after the August 31, 2001 I.G. notice of exclusion. 42 C.F.R. § 1005.20(b).

CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years effective September 20, 2001.
JUDGE
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Keith W. Sickendick

Administrative Law Judge

FOOTNOTES
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1. The remaining counts were dismissed in accordance with the plea negotiations. I.G. Ex. 6 at 2.

2. The Health Care Financing Administration changed its name to the Centers for Medicare and Medicaid Services. See 66 Fed. Reg. 35,437 (July 5, 2001).

CASE | DECISION | JUDGE | FOOTNOTES