Source: https://law.justia.com/cases/federal/appellate-courts/F2/806/995/45847/
Timestamp: 2019-09-21 19:31:15
Document Index: 416007326

Matched Legal Cases: ['§ 1320', '§ 1320', '§ 1395', '§ 1395', '§ 1395', '§ 1395', '§ 1320', '§ 1395']

Medicare&medicaid Gu 35,965william J. Mayers, D.c. and Patricia M. Mayers, Petitioners, v. U.S. Department of Health and Human Services, Respondent, 806 F.2d 995 (11th Cir. 1986) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eleventh Circuit › 1986 › Medicare&medicaid Gu 35,965william J. Mayers, D.c. and Patricia M. Mayers, Petitioners, v. U.S. Depa...
Medicare&medicaid Gu 35,965william J. Mayers, D.c. and Patricia M. Mayers, Petitioners, v. U.S. Department of Health and Human Services, Respondent, 806 F.2d 995 (11th Cir. 1986)
US Court of Appeals for the Eleventh Circuit - 806 F.2d 995 (11th Cir. 1986) Dec. 22, 1986
In this appeal from an administrative determination of the Secretary of Health and Human Services the constitutionality of the Civil Monetary Penalties and Assessment Act (CMPAA), 42 U.S.C. § 1320a-7a (1982 & Supp. III 1985) is challenged. We hold this statute to be constitutional on its face and as applied to the petitioner. Petitioner raises several additional challenges to the assessment of a civil penalty by the Administrative Law Judge. These attacks on the Administrative Law Judge's decision are also rejected.
The CMPAA was added to the Social Security Act to discourage fraud in the Medicare program. Specifically, the Act authorizes the Secretary of the Department of Health and Human Services to impose a $2,000 fine for each item submitted for reimbursement when the person submitting the claim knew or should have known the item was not provided as claimed. 42 U.S.C. § 1320a-7a (1982 & Supp. III 1985). In addition to the fine, the Act permits "an assessment of not more than twice the amount claimed for each such item or service in lieu of damages sustained by the United States or a State agency because of such claim." Id. Finally, the Act authorizes the Secretary to bar an individual from participating in the Medicare program from filing a false claim. Id. Sec. 1320a-7a(b).
The establishment and administration of Medicare is set forth in subchapter XVIII of the Social Security Act. Essentially, the medicare program consists of three parts: (1) Part A concerns insurance for hospital and related post-hospital services for eligible beneficiaries (42 U.S.C. §§ 1395c to 1395i-2); (2) Part B concerns supplemental insurance covering various health services for eligible beneficiaries not included within Part A (42 U.S.C. §§ 1395k-1395w); (3) Part C sets forth miscellaneous provisions not covered in Parts A and B (42 U.S.C. §§ 1395x-1395xx). All claims submitted by the Mayers are governed by Part B of the Medicare Program.
Part B specifically covers "medical and other health services" rendered to eligible beneficiaries. 42 U.S.C. § 1395k(a) (1) (1982). "Medical and other health services" are defined so as to include physicians' services, services and supplies "furnished as an incident to a physician's professional service," and diagnostic tests. Id. Sec. 1395x(s). The Act further defines physician's services as "professional services performed by physicians." Id. Sec. 1395x(g). Chiropractors are included in the definition of physician "only with respect to treatment by means of manual manipulation of the spine (to correct a subluxation demonstrated by X-ray to exist)." Id. Sec. 1395x(r). None of the claims filed by the Mayers were for services included within this very narrow category.
In determining whether a particular statute is civil or criminal in nature, a two prong inquiry is utilized. United States v. Ward, 448 U.S. 242, 248-49, 100 S. Ct. 2636, 2641, 65 L. Ed. 2d 742 (1980). The first inquiry is whether Congress has expressly or impliedly designated the statute as civil or criminal. The Mayers argue that the legislative intent in enacting the CMPAA was to provide the government with an alternative means of prosecuting Medicare/Medicaid fraud cases. Citation is made to numerous legislative reports in support of this argument. E.g., H.R.Rep. No. 158, 97th Cong., 1st Sess., vol. III, at 329 (1981) ("The civil monetary penalty provided for in this bill is intended to provide an alternative to criminal proceedings so as to increase the effectiveness of enforcement in the medicare and medicaid programs."). The clear congressional intention, however, is that the alternative to prosecution is to be a civil proceeding. As in United States v. Ward, 448 U.S. 242, 100 S. Ct. 2636, 65 L. Ed. 2d 742 (1980), the labeling of the sanction as a "civil penalty" is determinative of Congressional intent. This is particularly true in light of the name given by Congress to the act--the Civil Monetary Penalties & Assessment Act.
The second prong of the inquiry is whether the statute is "so punitive either in purpose or effect as to negate [the intention of Congress]." Ward, 448 U.S. at 249, 100 S. Ct. at 2641. Rarely will a court find a statute to be criminal in nature when Congress has exhibited an intent to impose civil sanctions: " [O]nly the clearest proof could suffice to establish the unconstitutionality of a statute on such a ground." Flemming v. Nestor, 363 U.S. 603, 617, 80 S. Ct. 1367, 1376, 4 L. Ed. 2d 1435 (1960). The issue to be addressed by this court is whether the sanctions are so severe that the excessive nature of the penalty has "transformed what was clearly intended as a civil remedy into a criminal penalty." Rex Trailer Co. v. United States, 350 U.S. 148, 154, 76 S. Ct. 219, 222, 100 L. Ed. 149 (1956).
We find this argument unpersuasive. Numerous statutes which exact heavy civil penalties have been held constitutional. See, e.g., Rex Trailer Co., Inc. v. United States, 350 U.S. 148, 76 S. Ct. 219, 100 L. Ed. 149 (1956) ($2,000 penalty per fraudulent act permissible under Surplus Property Act of 1944); United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S. Ct. 379, 87 L. Ed. 443 (1943) (False Claims Act). Just as these acts have been found to be permissible civil penalties, neither does the CMPAA violate the mandate of the constitution.
The administrative law judge found that Mayers knew or should have known that the claims filed contained false information. The CMPAA specifically provides for liability if a "person knows or has reason to know [that a medical item or service] was not provided as claimed." 42 U.S.C. § 1320-7a(a) (1) (A) (1982). In spite of the clear wording of the statute, appellant contends that actual knowledge must be established to impose liability under the CMPAA. Appellant fails to cite any authority indicating that a more rigorous standard is constitutionally required before imposing a civil penalty. A criminal statute may constitutionally impose a fine or imprisonment based upon a defendant's negligent conduct. The Mayers, however, argue that a civil penalty may not be imposed where they knew or should have known that their conduct was wrongful. Such an argument must be rejected.
The Social Security Act unambiguously provides that a chiropractor's services are not routinely covered. Such services are covered "only with respect to treatment by means of manual manipulation of the spine (to correct a sublaxation demonstrated by X-ray to exist) which he is legally authorized to perform by the State or jurisdiction in which such treatment is provided." 42 U.S.C. § 1395x(r) (1982). In light of the explicit detail in which Congress narrowly defined reimbursable chiropractic services, no individual could reasonably conclude that other services performed by a Doctor of Chiropractic medicine would be reimbursable.