CASE | DECISION | JUDGE | FOOTNOTES

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


SUBJECT:

Jorge Miguel Perez,

Petitioner,

DATE: September 9, 2002
                                          
             - v -

 

The Inspector General

 

Docket No.C-02-390
Decision No. CR951
DECISION
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DECISION

This case is before me pursuant to a request for hearing filed on March 7, 2002, by Jorge Miguel Perez, Petitioner (Petitioner).

By letter dated February 28, 2002, the Inspector General (I.G.) notified Petitioner that he 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 10 years. The I.G. informed Petitioner that his exclusion was imposed under section 1128(a)(1) of the Act, due to his conviction of a criminal offense (as defined in section 1128(i) of the Act) related to the delivery of an item or service under the Medicare program. Petitioner was also informed that his exclusion was for a period greater than the minimum period of five years under section 1128(c)(3)(B) of the Act because of the following circumstances:

1. The sentence imposed by the court included incarceration.

2. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.

On April 30, 2002, I convened a telephone prehearing conference with counsel for the I.G. and Petitioner during which the parties agreed that an in-person hearing was not required and that the issues could be decided by summary disposition. I advised Petitioner of his right to retain counsel, but he stated that he was representing himself in these proceedings. Following the conference, I issued an Order establishing simultaneous briefing deadlines. Pursuant to that Order, the I.G. timely filed a brief on May 30, 2002, accompanied by four proposed exhibits. I admit into evidence I.G. exhibits (Exs.) 1 - 4, without objection. Petitioner also timely submitted a brief in support of his contentions on May 29, 2002, accompanied by fourteen exhibits. I admit into evidence P. Exs. 1 - 14, without objection. On June 17, 2002, the I.G. filed a response brief, without additional documentary evidence. Petitioner also filed a response brief on June 17, 2002, which was accompanied by twelve additional exhibits that he identified as P. Exs. 16 - 27. I admit into evidence P. Exs. 16 - 27, without objection. Petitioner filed a reply brief on July 9, 2002.

With his initial brief, Petitioner also filed a motion to place under seal P. Ex. 11. In her response dated July 5, 2002, the I.G. stated she has no objection if P. Ex. 11 is sealed and available only to those persons involved in this case. In light of the I.G's response to Petitioner's request, I hereby direct that the contents of P. Ex. 11 shall be available only to those persons involved in this case.

It is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in the Medicare, Medicaid, and all federal health care programs, for a period of 10 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 Medicare program. Additionally, I find that the 10-year exclusion imposed on Petitioner is not unreasonable.

ISSUES

1. Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Act;

2.
Whether Petitioner's exclusion is barred by the statute of limitations; and

3. Whether the 10-year exclusion imposed by the I.G. upon Petitioner is unreasonable.

APPLICABLE LAW AND REGULATIONS

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 relating to the delivery of a health care item or service under title XVIII of the Act (the Medicare program) or under any State health care program.

An exclusion under section 1128(a)(1) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B). Aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. § 1001.102(b). If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. §1001.102(c).

Pursuant to 42 C.F.R. § 1001.2007, an individual or entity excluded under § 1128(a)(1) of the Act may file a request for a hearing before an administrative law judge (ALJ).

FINDINGS AND DISCUSSION

The findings of fact and conclusions of law noted below in boldface are followed by a discussion of each finding.

1. Petitioner's conviction of a criminal offense related to the delivery of an item or service under the Medicare program justified his exclusion by the I.G. from participation in the Medicare, Medicaid, and all other federal health care programs.

Petitioner was a physical therapist licensed to practice in Florida and was employed by Mederi of Dade County, Inc., a Medicare home health care provider located in Coral Gables, Florida. I.G. Ex. 1, at 6, 12.

On November 12, 1997, a federal grand jury returned an indictment against Petitioner as well as other defendants, all of whom were charged with participating in a broad scale conspiracy to defraud the United States through deceitful and dishonest means in a manner that brought about an adverse impact on the lawful government functions of the United States Department of Health and Human Services (HHS) in its administration of the Medicare program. I.G. Ex. 1.

On November 29, 1999, Petitioner was found guilty of multiple felony counts of conspiracy, fraud, and making false claims against the United States (specifically, by filing false claims with HHS), after having entered a plea of not guilty. I.G. Ex. 3; P. Ex. 2.

Petitioner's conviction was related to the delivery of an item or service under the Medicare program. I.G. Ex. 1 at 2.

I find that Petitioner was convicted of a criminal offense related to the delivery of an item or service under title XVIII of the Act (the Medicare program) within the meaning of section 1128(a)(1) of the Act. Thus, the I.G. had a basis upon which to exclude him from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act.

2. Petitioner's exclusion is not barred by the statute of limitations.

Petitioner contends that the exclusion imposed by the I.G. is time-barred by the six-year statute of limitations set forth in section 1128A(c)(1) of the Act. In support of that argument, Petitioner relies on United States v. Anthony, 727 F. Supp. 792 (E.D.N.Y. 1989). It is true that the court in United States v. Anthony stated that, pursuant to 42 U.S.C. § 1320a-7a(c)(1), (1) the Secretary has six years from the underlying act within which to commence an action pursuant to that section. 727 F. Supp. 792, 795. However, the I.G. has not invoked section 1128A of the Act in this exclusion action. The I.G. has, instead, imposed an exclusion pursuant to section 1128(a) of the Act because of Petitioner's convictions of criminal offenses related to the delivery of an item or service under Medicare. As the I.G. correctly points out, no statute of limitations applies to section 1128(a) of the Act. In a case where an argument similar to Petitioner's was made, the ALJ stated in the decision,

[w]hile it is true that an individual or entity may be excluded under the CMPL [Civil Monetary Penalties Law] as a result of the submission of false or fraudulent claims for reimbursement, pursuant to section 1128A of the Act, the exclusion at issue in this case is predicated upon Petitioner's criminal conviction [under section 1128(a)(1) of the Act]; therefore, section 1128A of the Act, and the referenced statute of limitations, do not apply.

Arlene Elizabeth Hunter, DAB CR505 (1997), at 6; see also Kathleen Ann Kahler, DAB CR498 (1997).

When the Secretary promulgated regulations pursuant to the two statutory provisions discussed above, a distinction was preserved concerning the application of rules regarding the statute of limitations. Thus, part 1001 of 42 C.F.R., which contains the regulatory provisions promulgated pursuant to section 1128(a) of the Act, and is applicable to the exclusion action at issue here, imposes no time limits on the I.G. Part 1003 of 42 C.F.R., on the other hand, promulgated pursuant to section 1128A of the Act, contains a six-year statute of limitations at 42 C.F.R. § 1003.132.

Petitioner also argues that the exclusion imposed by the I.G. is in violation of 42 C.F.R. §1001.101(c) because that section only applies in situations where the felony occurred after August 21, 1996. Petitioner contends that the indictment shows that his conspiracy ended in October 1993. The argument is misplaced inasmuch as the I.G. is proceeding pursuant to 42 C.F.R. § 1001.101(a) and not 42 C.F.R. § 1001.101(c). The latter subsection applies to certain felonies occurring after August 21, 1996, but the former has no such limitation.

In view of the foregoing, I find that Petitioner's argument that the exclusion action in this case is time-barred is without merit.

3. Petitioner's exclusion for a period of 10 years is not unreasonable.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years as set forth in section 1128(c)(3)(B) of the Act:

Subject to subparagraph (G), in the case of an exclusion under subsection (a), the minimum period of exclusion shall be not less than five years, . . .

When the I.G. imposes an exclusion for the mandatory five-year period, the reasonableness of the length of the exclusion is not an issue. 42 C.F.R. § 1001.2007(a)(2). Aggravating factors that justify lengthening the exclusion period may be taken into account, but the five-year term will not be shortened. Petitioner was found guilty of multiple felony counts after entering a plea of not guilty. He does not dispute his conviction of a criminal offense related to the delivery of an item or service under the Medicare program. As a result of Petitioner's program-related conviction, the I.G. was therefore required to exclude him pursuant to section 1128(a)(1) of the Act for at least five years.

The I.G. has discretion to impose an exclusion of more than five years in appropriate circumstances. In Petitioner's case, the I.G. added five years to the statutory five-year minimum period.

The aggravating factors that the I.G. may consider as a basis for lengthening a period of exclusion are found at 42 C.F.R. § 1001.102(b). In the case at hand, the I.G. alleges the existence of two aggravating factors, which justify the 10-year exclusion period imposed against Petitioner.

1. The sentence imposed by the court included incarceration.

2. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.

Petitioner does not dispute that these two aggravating factors, which are found at 42 C.F.R. § 1001.102(b)(2) and 42 C.F.R. § 1001.102(b)(5), are present in this case.

42 C.F.R. § 1001.102(c) provides that if any of the aggravating factors set forth in paragraph (b) of that section justifies an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. This regulation states that only the following factors may be considered mitigating:

(1) The 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) The 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) The individual's or entity's cooperation with Federal or State officials resulted in -

(i) Others being convicted or excluded from Medicare, Medicaid, and all other Federal health care programs,

(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

42 C.F.R. § 1001.102(c).

To determine if the I.G.'s length of exclusion is unreasonable, I must consider evidence submitted by the parties pertaining to the aggravating and mitigating factors contained in 42 C.F.R. § 1001.102, and whether the I.G.'s decision is within a reasonable range, given my findings. I conclude that the I.G. has established the existence of two aggravating factors, and Petitioner has failed to point to even one mitigating factor. In fact, the evidence before me points to the seriousness of Petitioner's deliberate conduct over an extended period of time, impairing the fiscal soundness of federal health care programs and the public confidence in those programs. This is clear evidence of Petitioner's untrustworthiness. Pertinent to this is the fact that Petitioner was sentenced to 102 months in prison followed by 3 years supervised release during which time he is prohibited from having any interest, directly or indirectly, in any medical business, and is also prohibited from participating in any Medicare or Medicaid program. I.G. Ex. 3 at 3 - 5. I infer that the court deemed that Petitioner is a menace to the fiscal soundness of federal health care programs.

For the reasons stated above, and in light of my consideration of the current statutory and regulatory criteria, I find that the 10-year exclusion imposed by the I.G. was within a reasonable range of possible exclusion periods given the circumstances of Petitioner's case, in which two aggravating factors were present and no mitigating factors were established. The 10-year exclusion is a legitimate remedy consistent with the purpose of section 1128 of the Act. That purpose is to protect federally funded health care programs and their beneficiaries and recipients from untrustworthy individuals and entities. See Joann Fletcher Cash, DAB No. 1725 (2000).

CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because he was convicted of a criminal offense related to the delivery of an item or service under Medicare or any State health care program. The I.G. was also justified in lengthening the period of exclusion due to the existence of aggravating factors. The 10-year exclusion is therefore sustained.

JUDGE
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Jose A. Anglada

Administrative Law Judge

 

FOOTNOTES
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1. Section 1128A(c)(1) of the Act.

CASE | DECISION | JUDGE | FOOTNOTES