C. William Alexander, Ph.D., DAB CR479 (1997)

	Department of Health and Human Services

	DEPARTMENTAL APPEALS BOARD

	Civil Remedies Division

______________________________
In the Case of:		   )
					 )
C. William Alexander, Ph.D.,  )   Date:  June 26, 1997
					 )
     Petitioner,		   )
					 )
	  - v. -			 )   Docket No. C-97-116
					 )   Decision No. CR479
The Inspector General.  	   )
______________________________)

	DECISION

By letter dated September 20, 1996, Petitioner C. William 
Alexander, Ph.D., was notified by the Inspector General (I.G.), 
U.S. Department of Health and Human Services (HHS), that it had 
been decided to exclude him for a period of three years from 
participation in the Medicare, Medicaid, Maternal and Child 
Health Services Block Grant and Block Grants to States for Social 
Services (Medicare and Medicaid) programs.  The I.G. explained 
that the three-year exclusion was authorized under section 
1128(b)(5)(B) of the Social Security Act (Act).  The exclusion 
was based upon the May 19, 1994 termination by the Kansas 
Department of Social and Rehabilitative Services (SRS) of 
Petitioner's Medicaid provider agreement, for reasons bearing on 
his professional competence, professional performance, or 
financial integrity.

Petitioner filed a timely request for review of the I.G.'s 
action, and the I.G. moved for summary disposition.  Because I 
have determined that there are no material and relevant factual 
issues in dispute (i.e., the only matter to be decided is the 
legal significance of the undisputed facts), I have granted the 
I.G.'s motion and decide the case on the basis of written 
submissions in lieu of an in-person hearing.   1/

I affirm the I.G.'s determination to exclude Petitioner from 
participation in the Medicare and Medicaid programs for a period 
of three years.

	APPLICABLE LAW

Section 1128(b)(5)(B) of the Act authorizes the I.G. to exclude 
"any individual or entity which has been suspended or excluded 
from participation, or otherwise sanctioned, under . . . a State 
health care program, for reasons bearing on the individual's or 
entity's professional competence, professional performance, or 
financial integrity."
  
An appellate panel of the Departmental Appeals Board (DAB) has 
held that to justify exclusion under section 1128(b)(5)(B), the 
I.G. need prove that only two elements have been met:  (1) a 
petitioner must have been excluded or suspended from a state 
health care program; and (2) the exclusion or suspension must 
have been for reasons bearing on the petitioner's professional 
competence, professional performance, or financial integrity.  
George Iturralde, M.D., DAB 1374 (1992).

Because exclusion under section 1128(b)(5)(B) is wholly 
derivative of suspension or exclusion under a state health care 
program, a petitioner may not collaterally attack the state 
proceeding which led to the state exclusion or suspension in a 
hearing before an administrative law judge (ALJ) of the DAB's 
Civil Remedies Division.  Olufemi Okonuren, DAB 1319 (1992).  
Similarly, an ALJ is not required to determine the guilt or 
innocence of a petitioner with reference to the conduct on which 
the state action is based.  Behrooz Bassim, M. D., DAB 1330 
(1992).  As stated by the DAB, "there would be no point in 
relying on these [state] actions if they would be reopened and 
relitigated during the [section 1128] exclusion proceedings."  
Iturralde, at 7.

Unless aggravating or mitigating factors provide a basis for 
lengthening or shortening a period of exclusion, an exclusion 
imposed under section 1128(b)(5)(B) will be for a period of three 
years.  42 C.F.R.  1001.601(b)(1).  Only the following factors 
may be considered in mitigation:  (1) the period of exclusion, 
suspension or other sanction imposed under the federal or state 
health care program is less than three years; (2) the 
individual's or entity's cooperation with federal or state 
officials resulted in the sanctioning of other individuals or 
entities; or (3) alternative sources of the types of health care 
items or services furnished by the individual or entity are not 
available.  42 C.F.R.  1001.601(b)(3). 

	ISSUES, FINDINGS OF FACT AND CONCLUSIONS OF LAW

The issues in this case are whether the I.G. was authorized to 
exclude Petitioner pursuant to section 1128(b)(5)(B) of the Act, 
and whether the three-year exclusion imposed by the I.G. is 
reasonable.

I make the following findings of fact and conclusions of law to 
support my decision that the I.G.'s determination to exclude 
Petitioner is authorized and that the three-year term of the 
exclusion is reasonable.

1.	At all times relevant to this case, Petitioner was a 
psychologist providing mental health services to Medicaid 
patients in Kansas.

2.	As a general rule, the Medicaid program in Kansas will 
not pay for psychotherapy services provided at an Intermediate 
Care Facility for the Mentally Retarded (ICF-MR).  I.G. Ex. 2.

3.	On September 18, 1990, SRS notified Petitioner that 
Petitioner had received a Medicaid overpayment in the amount of 
$105,480, which was related to his submission of claims for 
psychotherapy services.  I.G. Exs. 1, 2.

4.	Subsequent to the SRS notice of overpayment, the 
director of SRS reduced to $46,165 the amount of the overpayment 
which it was requesting that Petitioner repay.  The $46,165 
equaled the amount that Kansas Medicaid had paid Petitioner for 
non-covered psychotherapy services provided at ICF-MRs from 
December 1988 through May 1990.  I.G. Exs. 1, 2.

5.	On January 25, 1991, SRS notified Petitioner that it was 
proposing to terminate him from participation in the Kansas 
Medicaid program for five years.

6.	On May 19, 1994, as a result of Petitioner's request for 
an administrative hearing, an SRS hearing officer entered an 
initial order affirming a five-year termination of Petitioner's 
Kansas Medicaid provider agreement, effective May 19, 1994, as 
well as requiring recoupment of the $46,165 overpayment.  I.G. 
Ex. 1

7.	On September 13, 1994, the SRS State Appeals Committee 
issued a final order affirming the hearing officer's initial 
order (I.G. Ex. 1), which stated that "the Committee finds there 
is evidence to support [that] the appellant had a history of 
submitting improper billings.  He billed for noncovered services 
and may have billed for unnecessary services.  Good cause to 
terminate him as a provider in the Medicaid program has been 
established."  Id. at 3.

8.	Petitioner filed suit in Kansas State court contesting 
the SRS State Appeals Committee's order.  On March 29, 1995, the 
District Court of Shawnee County affirmed the SRS termination and 
recoupment order, herein to be referred to as the "State court 
order."  I.G. Ex. 2.

9.	The March 29, 1995 State court order states in part: 
"based solely on Alexander's conduct with respect to providing 
noncovered psychotherapy at the ICF-MRs, the Appeals Committee's 
decision to affirm the hearing officer's decision to terminate 
Alexander's participation in the Medicaid program is consistent 
with the provisions of the regulation allowing termination."  
I.G. Ex. 2 at 10.

10.	The hearing officer, the SRS State Appeals Committee, 
and the Kansas State court, all rejected Petitioner's arguments 
concerning his authority to submit claims to Kansas Medicaid for 
psychotherapy services provided at ICF-MRs. 

11.	On June 27, 1995, Petitioner and SRS entered into a 
consent agreement, which states that "Dr. Alexander shall 
immediately stop participating in the Kansas Medicaid program and 
shall not rejoin that program before May 19, 1999."  I.G. Ex. 3. 

12.	Under sections 3(a) and 3(b) of the consent agreement, 
Petitioner agreed to repay the balance of the $46,165 overpayment 
that had not already been withheld by SRS.  I.G. Ex. 3.

13.	As required by section 3(e) of the consent agreement, 
Petitioner's lawsuit seeking judicial review of the State court 
order was dismissed with prejudice at the request of both 
parties.  I.G. Exs. 3, 4.

14.	The Kansas Medicaid termination affirmed by the SRS 
final order and the State court order has not been revoked and 
remains in effect.  I.G. Br. at 5.

15.	Kansas Medicaid is a State health care program, within 
the meaning of sections 1128(h) and 1128(b)(5)(B) of the Act.   

16.	Pursuant to section 1128(b)(5)(B) of the Act, the 
Secretary of HHS has authority to impose and direct an exclusion 
against Petitioner from participating in Medicare and Medicaid.

17.	The Secretary has delegated to the I.G. the duty to 
impose and direct exclusions pursuant to section 1128 of the Act. 
 48 Fed. Reg. 21,662 (1983).

18.	On September 20, 1996, the I.G. excluded Petitioner from 
participation in the Medicare and Medicaid programs.  I.G. Ex. 5.

19.	Petitioner's termination from participation in the 
Kansas Medicaid program constitutes an exclusion or suspension or 
other sanction as those terms are used in section 1128(b)(5)(B) 
of the Act.  42 C.F.R.  1001.601(a)(2).

20.	Petitioner was excluded from participation in a State 
health care program for reasons bearing on his professional 
competence, professional performance, or financial integrity.  
I.G. Ex. 5; FFCL 7, 9.

21.  In this administrative proceeding, Petitioner cannot 
collaterally attack the Kansas administrative and judicial 
actions which led to his exclusion from the Medicare and Medicaid 
programs.  42 C.F.R.  1001.2007(d).

22.	Petitioner has not established the existence of any 
mitigating factors within the scope of 42 C.F.R  1001.601(b)(3).

23.  Petitioner's three-year exclusion from participation in the 
Medicare and Medicaid programs is proper. 

	DISCUSSION

Petitioner argues that, in view of his settlement agreement, his 
"inactivity" in the Kansas Medicaid program is the result of 
mutual agreement, not an exclusion or suspension.  P. Br. at 1.  
I find no merit in his argument.  The orders of the State 
administrative agency and the State court constitute sufficient 
bases to exclude Petitioner from participation in the Medicare 
and Medicaid programs.  The facts reflect that the settlement 
agreement is a result of SRS actions to terminate Petitioner's 
Medicaid provider status.  As I found above, the record in this 
case reflects that SRS terminated Petitioner's Kansas Medicaid 
provider agreement for five years, beginning on May 19, 1994, as 
a result of Petitioner's improper billing practices.  Following 
this, an SRS hearing officer issued an initial order affirming 
Petitioner's exclusion from Kansas Medicaid.  On September 13, 
1994, the SRS State Appeals Committee issued a final order 
unanimously affirming the hearing officer's initial order.  On 
May 29, 1995, in response to Petitioner's appeal, the State court 
issued a memorandum decision and order affirming the SRS final 
order.  On June 27, 1995, Petitioner and the SRS entered into a 
consent agreement, in which Petitioner agreed to stop 
participating in Kansas Medicaid and to a dismissal with 
prejudice of his appeal of the State court order.    

Petitioner cites clauses in the consent agreement which stated 
that such agreement constitutes the "full and complete agreement 
between the parties," "that any other prior or written 
understandings or agreements are superseded hereby," and that 
"nothing in the agreement is to be construed to be a concession 
or admission by Dr. Alexander of any wrongdoing."  I.G. Ex. 3 at 
2.  Petitioner contends these terms undermine any claim that he 
has been sanctioned within the scope of section 1128(b)(5)(B) of 
the Act.  I reject these arguments.  I find that the record shows 
that the existence of the SRS consent agreement does not negate 
the fact that, on three separate occasions, administrative and 
judicial reviewers upheld Petitioner's five-year exclusion from 
Kansas Medicaid.  Under section 1128(b)(5)(B), it is the fact of 
an exclusion or suspension by a state for reasons bearing on an 
individual's professional competence, professional performance, 
or financial integrity, which gives the I.G. the authority to 
exclude that individual.  The orders referenced here have not 
been revoked, remain in effect, and by themselves constitute 
sufficient bases for the I.G. to exclude Petitioner from 
participation in the Medicare and Medicaid programs.  These 
clauses cited by Petitioner merely show that he has not conceded 
wrongdoing, and that the agreement constitutes the only agreement 
between the parties, but it does not in any way alter the legal 
effect of the judgements against him.    

Based on this factual background, I find that Petitioner's case 
constitutes an exclusion, suspension, or other sanction within 
the scope of section 1128(b)(5)(B) of the Act.  Moreover, I find 
further that the consent agreement provides an additional basis 
for Petitioner's exclusion.  An appellate panel of the DAB has 
previously found that "an individual who withdraws voluntarily 
from participating in a federal or State health care program in 
order to avoid the imposition of a formal sanction against that 
individual, is `otherwise sanctioned' within the meaning of 
section 1128(b)(5)(B)."  Hassan Ibrahim, M.D., DAB 1613 (1997) at 
1-2.  

In Petitioner's case, a formal sanction was already in place at 
the time the SRS consent agreement was executed, but settlement 
was entered into to forestall continued appeal of the exclusion 
which had already been upheld by a State court judge.  The 
petitioner in Ibrahim, like  Petitioner here, contended that the 
I.G. should rely only on the settlement agreement in which the 
petitioner did not admit wrongdoing.  The DAB rejected such 
argument, stating:

	Petitioner's arguments are without merit . . . 
Petitioner executed the agreement to remove a state 
exclusion resulting from an audit of his practice which 
found Petitioner's professional care to be below standard in 
numerous respects, as well as finding that Petitioner 
submitted a false Medicaid claim.  Even though Petitioner 
did not admit any unacceptable practice in the agreement, 
the State action which the agreement resolved was clearly 
taken for reasons bearing on Petitioner's professional 
competence and performance, as well as financial integrity. 
 Petitioner's voluntary withdrawal from full participation 
in the Medicaid program, even while retaining by agreement 
some limited ability to participate, in order to avoid a 
formal exclusion, meets the definition of 'otherwise 
sanctioned.' [within the meaning of section 1128(b)(5)(B) of 
the Act].  Id. at 2-3. 

I find Petitioner's case presents an even more compelling example 
of a "sanction," in that the SRS consent agreement does not alter 
or remove the State exclusion which was affirmed in both 
administrative and judicial proceedings and does not even permit 
Petitioner the "limited ability to participate" in Medicaid, as 
the agreement in Ibrahim did for the petitioner in that case.  
In his response, Petitioner seeks to collaterally attack the 
State proceedings, but I reject this challenge.  Petitioner 
contends that he maintained legitimate offices on the premises of 
the ICF-MRs and, therefore, his practice of billing Kansas 
Medicaid for services in the ICF-MRs was proper and should not 
have resulted in his exclusion from Kansas Medicaid.  It is 
clear, however, that Petitioner is not entitled to use this 
proceeding to relitigate or collaterally attack the State 
Medicaid proceedings.  The regulations specifically preclude such 
action and state that "when the exclusion is based on the 
existence of a conviction, a determination by another government 
agency or any other prior determination, the basis for the 
underlying determination is not reviewable and the individual or 
entity may not collaterally attack the underlying determination, 
either on substantive or procedural grounds, in this appeal."  42 
C.F.R.  1001.2007(d).

Moreover, on this issue, an appellate panel of the DAB has 
precluded a collateral attack in a case involving a settlement 
agreement.  Specifically, in Ibrahim, the panel held that 
"Petitioner was not entitled to collaterally attack the State 
proceedings before the ALJ.  See George Iturralde, M.D., DAB No. 
1374 (1992); Olufemi Okunoren, M.D., DAB No. 1319 (1992).  The 
I.G. could reasonably rely on the State action in imposing a 
derivative federal exclusion."  Ibrahim at 2-3.  

In order to show that exclusion is justified, the I.G. must also 
establish that the exclusion, suspension, or other sanction 
occurred for reasons bearing on Petitioner's professional 
competence, professional performance, or financial integrity.  I 
find that this requirement is established in Petitioner's case.  
The record shows that the exclusion was based on a finding that 
Petitioner had submitted claims to Kansas Medicaid for 
psychotherapy services provided at ICF-MRs that he knew or should 
have known were noncovered services.  I.G. Ex. 1 at 3.  I find 
that Petitioner's submission of claims to Kansas Medicaid for 
noncovered services bears on his professional performance and 
financial integrity.  

In George Iturralde, M.D., an appellate panel of the DAB stated 
that exclusion under section 1128(b)(5)(B) is authorized where 
there is a "common sense connection between a state's findings 
and either professional competence, performance, or financial 
integrity," and that the "common sense connection is obvious" in 
a case of repeated overbilling.  Iturralde, at 11.  In Iturralde, 
the panel upheld the finding that the petitioner was properly 
excluded from Kansas Medicaid on the basis that "repeated 
overbilling of Medicaid  evidenced a lack of financial integrity" 
within the meaning of section 1128(b)(5)(B).  Id. at 9.  In 
Petitioner's case, the SRS State Appeals Committee unanimously 
found "evidence to support [that] the appellant had a history of 
submitting improper billings.  He billed for noncovered services 
and may have billed for unnecessary services."  I.G. Ex. 1 at 4. 
 The State court order pointed to "Alexander's conduct with 
respect to providing noncovered psychotherapy at the ICF-MRs," as 
an example of "a pattern of submitting billings for services not 
covered under the program."  I.G. Ex. 2 at 10.  I find that there 
is a common sense connection between these State findings and a 
lack of financial integrity.  

I find also that the three-year term of exclusion is proper.  In 
so finding, I reject Petitioner's arguments for mitigation.  He 
contends that he has been fully cooperative in providing 
requested information.  However, unless such cooperation results 
in the sanctioning of other individuals or entities, it does not 
qualify as a mitigating circumstance under 42 C.F.R.  
1001.601(b)(3)(ii).  

Petitioner also asserts that he was in compliance with Medicaid 
guidelines.  I cannot consider this assertion in mitigation of 
Petitioner's period of exclusion, because such compliance is not 
an enumerated mitigating circumstance under the regulations.  He 
also maintains that he discontinued the use of satellite offices 
10 years ago, but passage of time also is not an enumerated 
mitigating circumstance.   2/

Finally, Petitioner contends that his period of exclusion should 
be shortened because "he is the only psychologist who is board 
certified (by the American Association of Pain Management) to 
provide pain management services to this population in his area 
for hundreds of miles."  P. Br. at 7.  Petitioner has the burden 
of proof on this issue, since a mitigating factor is in the 
nature of an affirmative defense.  Barry D. Garfinkel, M.D., DAB 

1572 (1996).  Petitioner has provided no evidence to support his 
contention.  Thus, Petitioner has not met his burden of proof on 
this issue.

	CONCLUSION

Section 1128(b)(5)(B) authorizes the I.G. to exclude Petitioner 
from participation in the Medicare and Medicaid programs for a 
period of three years, because he has been suspended or excluded 
from participation, or otherwise sanctioned, under a State health 
care program for reasons bearing on his professional competence, 
professional performance, or financial integrity.  Therefore, I 
sustain Petitioner's three-year exclusion.

					                        		
		
					Joseph K. Riotto
					Administrative Law Judge

* * * Footnotes * * *

         1.    The I.G. submitted five proposed exhibits (I.G. 
Exs. 1-5).  Petitioner submitted 10 proposed exhibits (P. Exs. 1-
10).  Neither party objected to my receiving any of these 
proposed exhibits into evidence.  Therefore, I am receiving into 
evidence I.G. Exs. 1-5 and P. Exs. 1-10.   
         2.    Petitioner had satellite offices at ICF-MRs where 
he provided non-covered psychotherapy services. The Medicaid 
overpayment derived from Petitioner's billing for these non-
covered services. 
 

(..continued)