CASE | DECISION | JUDGE

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


SUBJECT:

Efstathios Mark Varidin, D.O.,

Petitioner,

DATE: November 13, 2002

             - v -

 

The Inspector General

 

Docket No.C-02-482
Decision No. CR971
DECISION
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DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Efstathios Mark Varidin, D.O., from participating in Medicare and other federally funded programs for a period of five years. I find that Petitioner was convicted of a criminal offense described in section 1128(a)(1) of the Social Security Act (Act) for which a five-year minimum exclusion is mandatory. Additionally, I conclude that I do not have authority to consider Petitioner's argument that the I.G. should be ordered to make the exclusion retroactive to December 8, 2000.

I. Background and undisputed material facts

A. Background

On March 29, 2002, the I.G. notified Petitioner that he was being excluded for a period of five years pursuant to section 1128(a)(1) based on the I.G.'s determination that Petitioner had been convicted of a criminal offense that is related to the delivery of an item or service under the Medicare program. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision.

Neither party advised me that he or she desired to offer evidence in person. I established a schedule so that the parties could submit briefs and written evidence to support their respective contentions. The I.G. submitted a brief and three proposed exhibits along with that brief (I.G. Ex. 1 - I.G. Ex. 3). Petitioner submitted a brief and five proposed exhibits (P. Ex. 1 - P. Ex. 5). Neither party objected to my receiving into evidence any of these proposed exhibits. Therefore, I am receiving into evidence I.G. Ex. 1 - I.G. Ex. 3 and P. Ex. 1 - P. Ex. 5.

The I.G. submitted two supplementary exhibits (I.G. Ex. 4 - I.G. Ex. 5) in addition to those three that it submitted originally. The I.G. offered these two exhibits to show that it had excluded two other individuals pursuant to section 1128(a)(1) of the Act who had been convicted of the same crimes involving the same core set of facts as was Petitioner. I decline to receive these two supplementary exhibits because they are irrelevant.

B. Undisputed material facts

There are no disputed material facts in this case. Petitioner is a physician who has practiced medicine in the State of Florida. On December 7, 2000, Petitioner pled guilty in the United States District Court for the Middle District of Florida to a criminal offense consisting of receiving an unlawful kickback from a clinical laboratory in return for referring a Medicare item or service to that laboratory. I.G. Ex. 1 at 1; I.G. Ex. 2 at 8; I.G. Ex. 3 at 1. Specifically, Petitioner pled guilty to the charge that he and others:

knowingly and willfully solicited and received remuneration . . . in return for referring individuals to . . . [a clinical laboratory] for the furnishing, and arranging for the furnishing, of items and services for which payment may have been made in whole or in part under the Medicare program; and for ordering, arranging for, and 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 . . . .

I.G. Ex. 3 at 8.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. Petitioner was convicted of a criminal offense within the scope of section 1128(a)(1) of the Act thereby mandating the I.G. to exclude Petitioner for a minimum of five years; and,

2. I have the authority to order Petitioner's exclusion be made retroactive.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act thereby mandating the I.G. to exclude Petitioner for a minimum of five years.

Section 1128(a)(1) of the Act mandates the I.G. to exclude from participating in Medicare and other federally funded programs any individual who is convicted in federal or State court of a criminal offense that is related to the delivery of an item or service under the Medicare program. A related section of the Act, section 1128(c)(3)(B), requires that the minimum exclusion period be for five years in any case where a mandatory exclusion is imposed.

The undisputed material facts of this case establish that Petitioner was convicted of a program-related offense as described in section 1128(a)(1). As a matter of law it is a settled principle that conviction of a criminal offense for knowingly and willfully accepting a kickback for referring Medicare or other federally funded health care items or services is a crime that falls within the scope of section 1128(a)(1). Boris Lipovsky, M.D., DAB No. 1363 (1992); Jose Grau, M.D., DAB CR930 (2002). Petitioner was convicted of accepting a kickback in return for referral of a Medicare-reimbursable item or service to a clinical laboratory. The offense related to the delivery of an item or service under Medicare because referral of a Medicare service was an essential element of Petitioner's crime. There would not have been a basis for the specific charge to which Petitioner pled guilty had Petitioner not accepted a kickback for a Medicare service. I.G. Ex. 3 at 8.

Petitioner argues that his conviction is not of an offense that is included within section 1128(a)(1) because his crime did not involve the making of false statements, false representations, or billing violations, nor did Medicare suffer any pecuniary loss as a result of his crime. As support for his argument Petitioner asserts that the Eleventh Circuit Court of Appeals voided an order that two other individuals who had been convicted of unlawful referrals to the same laboratory as was Petitioner pay restitution to Medicare for the amount of unlawful kickbacks he obtained. Petitioner's brief at 3. However, it is not a necessary element of a section 1128(a)(1) offense that Medicare suffer financial harm as a consequence of a crime (although a crime involving a conversion of Medicare funds or a theft from the program certainly is an offense within the meaning of section 1128(a)(1)), or that a crime involve false statements, false representations, or billing violations. A criminal offense is related to the delivery of a Medicare item or service where the item or service itself is an essential element of the offense. That is precisely the case here. The crime of which Petitioner was convicted was the unlawful referral of a Medicare item or service.

2. I have no authority to order Petitioner's exclusion be made retroactive.

Petitioner argues that his exclusion should be made retroactive to December 8, 2000, the date when, as Petitioner, describes it, he "opted out" of Medicare. Petitioner's brief at 7. Petitioner asserts that he accepted no Medicare reimbursement after that date and, effectively, excluded himself from the program. Consequently, according to Petitioner, he should be given credit for his self-exclusion from Medicare.

I have no authority to address Petitioner's challenge to the effective date of his exclusion. Chander Kachoria, R.Ph., DAB No. 1380 (1993). Under regulations governing exclusions an exclusion becomes effective 20 days from the date of the notice of exclusion that the I.G. sends to the excluded individual. 42 C.F.R. § 1001.2002(b). This regulation gives the I.G. the authority to determine the timing of the inception of any exclusion. An excluded party may appeal the basis for an exclusion (that is, whether there exists statutory authority to impose an exclusion) and the reasonableness of the length of an exclusion (excepting an exclusion for a minimum period, as is the case here). 42 C.F.R. § 1001.2007(a)(1)(i), (ii); see 42 C.F.R. § 1001.2007(a)(2). But, nothing in the regulations permits an excluded party to appeal the effective date of an exclusion. See Ids.

JUDGE
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Steven T. Kessel

Administrative Law Judge

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