Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Temple Community Hospital, Date: Aug 7, 1995
Petitioner,

Docket No. C~94~-297
Decision No. CR385

-vec

Health Care Financing
Administration.

DECISION

In this case, I conclude that I am without authority to
hear and decide Petitioner's assertion that the Health
Care Financing Administration (HCFA) improperly refused
to waive a requirement for participation in the Medicare
program. I conclude also that I do not have the
discretion to provide Petitioner with a hearing on this
issue. Finally, I conclude that Petitioner withdrew its
request for a hearing on the issue of whether HCFA
improperly declined to certify Petitioner as a skilled
nursing facility (SNF) prior to December 6, 1991. I am,
therefore, without authority to hear this issue. Based
on these conclusions, I dismiss Petitioner's request for
a hearing.

I. Undisputed material] facts, summary of arguments and
procedural history
A. Facts

These facts are material and are undisputed.' In 1991,
Petitioner applied to HCFA to become certified to
participate in the Medicare program as an SNF.

' In reciting the undisputed material facts, I
make no citations to exhibits, as I have received none
into evidence. My recitation of the facts is based
entirely on the parties' representations, contained in
their respective briefs. I do not consider it necessary
to burden the parties with the obligation to offer
exhibits to support the facts which they aver to be
relevant where, as in this case, none of the facts are
disputed.
2

Petitioner applied to participate as a 20-bed SNF. In
April 1991, Petitioner was surveyed on behalf of HCFA by
the Los Angeles County Department of Health Services
(State survey agency) in order to determine whether
Petitioner met the applicable requirements to participate
as an SNF in the Medicare program.

The State survey agency concluded that Petitioner did not
comply with Medicare participation requirements. The
deficiencies identified by the State survey agency
included failures to comply with certain requirements
that an SNF must meet in order to be certified for
participation in Medicare (level A requirements). The
deficiencies that were identified by the State survey
agency included the finding that Petitioner failed to
comply with the requirements of 42 C.F.R. § 483.70, which
governs the physical environment of a participating SNF.
Specifically, the State survey agency found that several
of the rooms which Petitioner proposed to utilize as
residential facilities for its patients failed to meet
the minimum square footage requirements contained in 42
C.F.R. § 483.70. On May 30, 1991, HCFA determined that
Petitioner was not eligible to participate in Medicare,
based on the findings made by the State survey agency.

Petitioner then submitted to HCFA a plan of correction
which addressed most of the deficiencies that the State
survey agency had identified. However, HCFA concluded
that Petitioner was not eligible to submit a plan of
correction to HCFA, inasmuch as some of the deficiencies
identified by the State survey agency were failures to
meet level A requirements.” Petitioner requested also
that HCFA grant it a waiver or variance from the
residential room size requirements. HCFA denied this
request. Petitioner filed a request for a hearing on
HCFA's determination that Petitioner was not eligible to
participate in Medicare and on HCFA's refusal to waive
the minimum room size requirement.

Petitioner then submitted to HCFA a new application for
certification as an SNF. In its new application,
Petitioner applied for certification as an 11-bed SNF,
thus eliminating from consideration the issue of whether

2? Under applicable regulations, an applicant for
certification as an SNF may file a plan of correction to
address a failure to meet a level B requirement for
participation. 42 C.F.R. § 488.28. A level B
requirement is a standard which describes some component
or element of a level A requirement. An applicant for
certification as an SNF is not afforded the opportunity
to file a plan of correction to address a failure to meet
a level A requirement. 42 C.F.R. §§ 488.24, 488.28.
3

certain of its residential rooms failed to meet the
minimum square footage requirement.’ In October 1991,
the State survey agency conducted a second survey of
Petitioner's facility. The State survey agency concluded
that Petitioner continued to be deficient in complying
with some level B requirements for participation in
Medicare, but that Petitioner had corrected its prior
noncompliance with level A requirements.

Petitioner submitted a plan of correction to address the
level B deficiencies found in the October 1991 survey.
HCFA accepted this plan of correction, and Petitioner was
certified to participate in Medicare as an 11~bed SNF,
effective December 6, 1991.

B. Summa: argune: ay rrocedu: istor

Petitioner continues to assert that HCFA improperly
denied its waiver request. Petitioner argues that I
should afford it a hearing to determine whether the
request was denied improperly, and to decide whether the
room size requirement should be waived. Petitioner has
withdrawn its assertions that HCFA concluded incorrectly
that level A deficiencies existed as of the April 1991
survey, and it is not asserting now that it was
improperly denied the opportunity to submit a plan of
correction to address these deficiencies. In sun,
Petitioner accepts the certification date of December 6,
1991, except that it argues that, effective that date,
HCFA should have waived the room size requirement and
approved it to participate in Medicare as a 20~bed SNF.

HCFA asserts that I am without authority to hear and
decide the issue of whether it properly refused to waive
the room size requirements. HCFA asserts also that,
notwithstanding that Petitioner no longer is challenging
HCFA's refusal to certify Petitioner as an SNF on May 30,
1991, the issues of the propriety of HCFA's May 1991
determination to deny Petitioner's first application, and
HCFA's subsequent refusal to accept a plan of correction
from Petitioner, remain before me and I ought to hear and
decide these issues.

This case was originally assigned to an administrative
law judge in the Office of Hearings and Appeals of the
Social Security Administration. Effective October 1,
1993, the Secretary of the Department of Health and Human

3 Petitioner did so by converting several of its
residential rooms from proposed two-bed residential rooms
to proposed single-bed residential rooms. The
reconfigured rooms met the square footage requirement for
single-bed residential rooms.
4

Services (Secretary) redelegated the authority to hear
and decide administrative cases involving HCFA to
administrative law judges of the Department of Health and
Human Services Departmental Appeals Board (DAB). On
March 4, 1994, this case was reassigned to Administrative
Law Judge Charles E. Stratton of the DAB. At the request
of the parties, Judge Stratton stayed the DAB proceedings
in the case.

The case was reassigned to me in late 1994, after the
death of Judge Stratton. In December 1994, I was advised
by Petitioner that it desired that the stay be ended and
that the issues in the case be heard and decided. I
ended the stay. Shortly thereafter, I directed the
parties to file briefs on questions of law. The parties
filed briefs and reply briefs. On June 20, 1995, I held
an oral argument on the issues by telephone. My decision
in this case is based on the relevant law, the undisputed
facts, and the parties' arguments.

II. Issues
The issues in this case are whether:

1. Petitioner has a right to a hearing as to
whether HCFA improperly refused to waive the
minimum room size requirement.

2. I have the discretion to provide Petitioner
with a hearing as to whether HCFA improperly
refused to waive the minimum room size
requirement.

3. I may hear and decide whether HCFA properly
declined to certify Petitioner as an SNF in May
1991.

III. Findings of fact and conclusions of law

I make the following findings of fact and conclusions of
law. My findings of fact are based on the undisputed
material facts which I recite at Part I.A. of this
decision. After each finding or conclusion, I cite to
the page or pages of this decision at which I discuss the
finding or conclusion in detail.

1. HCFA's determination not to waive the minimum
room size requirement is not an initial
determination from which Petitioner has a right
to a hearing. Pages 5 - 8.
5

2. I do not have the discretion to provide
Petitioner with a hearing on HCFA's
determination not to waive the minimum room
size requirement. Pages 7 - 8.

3. Petitioner withdrew its contention that HCFA
improperly declined to certify Petitioner as an
SNF in May 1991. Petitioner accepts HCFA's
determination to certify Petitioner as an SNF
effective December 6, 1991, except that
Petitioner argues that, as of that date, it
should have been certified as a 20-bed SNF and
not as an 11-bed SNF. Page 9.

4. I do not have the authority to hear the issue
of whether HCFA properly declined to certify
Petitioner as an SNF in May 1991. Pages 9 -
10.

Iv. Discussion

A. Petitioner's request that I hear the issue of

whether HCFA improperly declined to waive the
inimum_ roo i equire! t.

A determination by HCFA not to waive a Medicare
participation requirement is not an initial determination
from which an applicant for participation in Medicare has
a right to a hearing. Petitioner has no right to a
hearing on HCFA's determination not to waive the minimum
room size requirement applicable to SNFs. I do not have
the authority to hear the issue of whether HCFA
improperly declined to waive the minimum room size
requirement.

An applicant for participation in Medicare does not enjoy
a general right to a hearing from every determination by
HCFA with which that applicant might not be satisfied.
An applicant for participation in Medicare has only
limited hearing rights. The Social Security Act (Act)
essentially gives an applicant for participation a right
to a hearing only on HCFA's determination that the
applicant does not meet the participation requirements
contained in the Act, regulations, or a participation
agreement. See Social Security Act, sections 1861,
1866(b) (2), and 1866(h) (1).

This limited right to a hearing is stated also in
regulations. Under the regulations, an applicant for
participation as a provider is entitled to a hearing only
from an initial determination by HCFA that it does not
6

meet participation requirements. 42 C.F.R. §§
498.5(a)(1), (2).

Petitioner argues that it has a right to be heard on its
assertion that HCFA improperly declined to waive the room
size requirement. It asserts that HCFA's determination
not to waive the room size requirement is a determination
by HCFA that Petitioner does not meet participation
requirements. I am not persuaded by this argument.

A determination by HCFA not to waive a participation
requirement is a determination which addresses an issue
other than the question of whether a provider meets a
participation requirement. It is a discretionary
determination by HCFA to permit an applicant to
participate in Medicare even though the applicant did not
meet a participation requirement.

The dichotomy between a determination by HCFA that a
provider does not meet a participation requirement and a
determination by HCFA to certify a provider
notwithstanding that provider's failure to meet a
participation requirement is stated in the regulations
governing participation. The regulation which governs
the size of residents' rooms in SNFs provides that a
determination by HCFA to waive the room size requirement
is an act of discretion to allow a provider to
participate even though the provider fails to meet a
participation requirement, and not a determination by
HCFA that the applicant meets the requirement. It states
that:

HCFA . . . may permit variations in
requirements . . . relating to rooms in
individual cases when the facility demonstrates
in writing that the variations --

(i) Are in accordance with the special needs of
the residents; and

(ii) Will not adversely affect residents'
health and safety.

42 C.F.R. § 483.70(d) (3) (emphasis added).

‘4 As an interim step before being entitled to a
hearing, a prospective provider that is dissatisfied with
an initial determination by HCFA that it does not qualify
as a provider must first request reconsideration of the
initial determination from HCFA, and HCFA must issue a
reconsidered determination. Id. Thus, technically, a
prospective provider's entitlement to a hearing is from a
reconsidered determination. Id.
7

The regulation which generally governs approvals by HCFA
of applications for participation in Medicare states also
that a waiver determination is a discretionary act to
allow an applicant to participate despite that
applicant's failure to satisfy a participation
requirement, and not a determination as to whether an
applicant meets participation requirements. The
regulation provides that, where an applicant for
participation is found not to have met all participation
requirements, HCFA will certify that provider for
participation on the earlier of the following dates:

(1) The date on which the provider meets all
requirements.

(2) The date on which the provider submits a
correction plan acceptable to HCFA or an
approvable waiver request, or both.

42 C.F.R. § 489.13(b).
There is nothing about the use of the term "waiver" in 42

C.F.R. § 489.13(b) to suggest that the Secretary intended
that it be given something other than its ordinary

meaning. “Waiver” is defined to mean "the act of
intentionally relinquishing or abandoning a known right,
claim, or privilege." Webster's i

Dictionary, 1977 Ed. In the context of a certification
by HCFA, “waiver" means HCFA's discretionary
determination to relinquish its right to disapprove an
application.

Petitioner argues that I would be denying it due process
by not giving it a hearing as to the propriety of HCFA's
determination not to waive the room size requirement.
However, Petitioner's due process rights, including its
limited hearing rights, are defined by the Act and
regulations. I am not denying Petitioner due process in
concluding that it has no right to a hearing, inasmuch as
neither the Act nor regulations give Petitioner a right
to a hearing on HCFA's determination not to waive the
room size requirement.

I conclude additionally that I do not have the
discretionary authority to give Petitioner a hearing
where it has no right to request a hearing on a
determination by HCFA. My authority to provide a hearing
in any case is delegated to me by the Secretary. I have
no authority to conduct a hearing in the absence of a
delegation of authority which is either expressly made by
the Secretary or implied in the regulations. The
regulations which govern hearings by administrative law
judges in cases involving determinations by HCFA are in
42 C.F.R. Part 498. As I find above, the regulations
8

give an applicant for participation as a provider a right
to a hearing only on a determination by HCFA that the
applicant does not meet participation requirements. The
Part 498 regulations neither state nor suggest that I
have discretion to give an applicant a hearing on some
other issue, including the issue of whether a waiver
ought to have been granted.‘

Petitioner argues that its challenge to HCFA's
determination not to waive the room size requirements is
supported by a proposed decision rendered by a State
administrative law judge ina hearing before the State of
California Department of Health Services, Temple
Community Hospital, Audit Appeal No. PS2-0791-046 (July
19, 1991).° In this decision, the State administrative
law judge concluded that Petitioner should have been
granted a waiver of the room size requirement by the
State survey agency, for purposes of certification under
the California Medicaid program (Medi-Cal). Id.

I do not find the proposed decision to be persuasive.

The proposed decision does not address the issue of
whether an applicant for participation in Medicare is
entitled to a hearing on a determination by HCFA not to
grant a waiver from a Medicare participation requirement.
The administrative law judge who heard the case evidently
assumed that he had authority to consider the issue of
whether the State survey agency ought to have granted a
waiver to Petitioner from the room size requirement as it
pertained to Petitioner's certification under Medi-Cal.
It appears from that decision that the administrative law
judge assumed that he had the authority to hear that
issue without analyzing it or making any findings on it.
Indeed, it is not clear that the parties to the
proceeding even addressed that issue to the State
administrative law judge.

5 My conclusion on this question of jurisdiction
is in accord with that reached by Administrative Law
Judge Mimi Hwang Leahy in Piedmont Family Clinic, DAB
CR355, at 13 (1995).

6 The proposed decision is an attachment to
Petitioner's initial brief. Although Petitioner
apparently did not offer the decision as an exhibit, HCFA
objected to its admission into evidence, contending that
it contains hearsay. HCFA's reply brief at 1-7. The
fact that an exhibit might contain hearsay would not
preclude me from admitting it into evidence. However, I
am not admitting the proposed decision into evidence. It
is being offered by Petitioner not as evidence, but as a
non-binding precedent on the merits of the waiver issue.
9

B. FA's est tha d_decide

propriety of its determination in May 1991 not
to certify Petitioner as_an SNF

HCFA asserts that the issue before me is whether it acted
reasonably on May 30, 1991 in denying Petitioner's
request for certification. However, Petitioner is no
longer asserting that it should have been certified as an
SNF prior to December 6, 1991. Transcript of June 20,
1995 oral argument (Tr.) at 4 - 5.7? In no longer
contesting HCFA's determinations, except as to the number
of beds that were certified by HCFA effective December 6,
1991, Petitioner has effectively withdrawn its challenge
to HCFA's May 1991 determination that Petitioner
manifested level A deficiencies.* HCFA argues that I
should hear and decide the issue of whether it properly
declined to certify Petitioner in May 1991 despite the
fact that Petitioner has abandoned that issue.

Both the Act and the Part 498 regulations governing
administrative hearings concerning determinations by HCFA
provide applicants for participation and, in enumerated
circumstances, providers and suppliers, hearing rights
only if they are dissatisfied with determinations by
HCFA. Neither the Act nor regulations provide HCFA with
the right to request an administrative hearing.
Petitioner's withdrawal of its assertions concerning
HCFA's May 1991 determination and HCFA's subsequent
refusal to consider Petitioner's plan of correction is
tantamount to a withdrawal of its request for a hearing
concerning those issues. If Petitioner no longer
requests that I hear these issues then the issues are no
longer before me. HCFA has no right to insist that I

7 However, Petitioner continues to assert that,
as of December 6, 1991, HCFA should have waived the
requirement for residents' room size and certified
Petitioner as a 20-bed SNF, rather than as an 11-bed SNF.

* It is unclear that Petitioner requested a
hearing concerning HCFA's refusal to consider a plan of
correction from Petitioner addressing the level A
deficiencies on which HCFA based its May 1991
determination not to certify Petitioner as an SNF.
However, by accepting December 6, 1991 as the
certification date, Petitioner has effectively abandoned
that issue to the extent it raised it. I note,
furthermore, that, under applicable regulations, HCFA is
not required to afford an applicant the opportunity to
submit a plan of correction to address level A or
condition-level deficiencies. See 42 C.F.R. § 488.28.
10

hear these issues if Petitioner no longer requests me to
hear then.’

Vv. Conclusion

I conclude that there exists no issue in this case that I
have authority to hear and decide. Therefore, I dismiss
Petitioner's request for a hearing.

/s/

Steven T. Kessel
Administrative Law Judge

° Furthermore, I am at a total loss to explain
why HCFA would want me to hear these issues. It would
seem that HCFA stands to gain nothing by my hearing these
issues. In its initial brief, HCFA seemed to suggest
that it wanted the issues heard because it was unclear
that Petitioner had abandoned them. However, Petitioner
made it clear, both in its reply brief, and at the oral
argument which I held on June 20, 1995, that it was no
longer pursuing the issues. At the oral argument, HCFA
continued to assert that I should hear these issues. Tr.
at 5 - 9. But it offered no explanation as to why I
should hear them.


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
In the Case of:
Subha Reddy, DATE: July 13, 1995
Petitioner,

Docket No. C-95-007
Decision No. CR384

-v-

The Inspector General.

DECISION

By letter dated September 16, 1994, Subha Reddy, the
Petitioner herein, was notified by the Inspector General
(I.G.) of the United States Department of Health and
Human Services (HHS), that it had been decided to exclude
Petitioner for a period of five years from participation
in the Medicare, Medicaid, Maternal and Child Health
Services Block Grant, and Block Grants to States for
Social Services programs.' The I.G. asserted that an
exclusion of at least five years was mandated by sections
1128(a)(1) and 1128(c)(3)(B) of the Social Security Act
(Act), because Petitioner had been convicted of a
criminal offense related to the delivery of an item or
service under Medicaid.

Petitioner filed a timely request for review of the
I.G.'s action. On January 4, 1995, I held a prehearing
conference in this case. During that conference, the
I.G. moved for disposition of the case without an in-
person hearing. Petitioner objected and requested an in-
person hearing. Having reviewed the parties'
submissions, I have determined that there are no facts of
decisional significance genuinely in dispute and that the
only matters to be decided are the legal implications of
the undisputed facts. Thus, I have decided the case on
the basis of the parties' written submissions. Based on
the undisputed facts and the law, I have determined that

! I refer to all programs from which Petitioner
has been excluded, other than Medicare, as "Medicaid."
2

the I.G. was required to exclude Petitioner for at least
five years.

APPLICABLE LAW

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense related to the delivery of an item or
service under Medicare or Medicaid to be excluded from
participation in such programs for a period of at least
five years.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner
was employed as a physician's assistant at the Kelly
Plaza Medical Clinic in Detroit, Michigan. P. Br. at 2.’

2. Also during the period relevant to this case,
Petitioner was not licensed to practice medicine as
either a physician or a physician's assistant in the
United States. P. Br. at 2.

3. Under Michigan law, an individual who is not licensed
as a physician or physician's assistant cannot legally
prescribe substances containing codeine. P. Br. at 6.

4. If an unlicensed individual prescribes substances
containing codeine to a Medicaid patient, and submits a
claim for his or her services to Medicaid, under Michigan
law the individual is presumed to have knowingly
submitted a false claim. P. Br. at 6.

5. Petitioner's responsibilities as a physician's
assistant included the prescribing of medications to
Medicaid-eligible patients at the Kelly Plaza Medical
Clinic. I.G. Br. at 5; I.G. Ex. 6 at 2.

2 I cite to Petitioner's brief as P. Br. at
(page). I cite to the I.G.'s brief as I.G. Br. at
(page). Petitioner submitted one exhibit with her brief,
which I cite to as P. Ex. 1. The I.G. submitted nine
exhibits with her brief, which I cite to as I.G. Exs. 1-
9. Since neither party has objected to the exhibits
offered by the other party, I admit P. Ex. 1 and I.G.
Exs. 1-9 into evidence,
3

6. On October 6, 1993, Petitioner was charged with two
counts of submitting false claims to the State of
Michigan for reimbursement. I.G. Ex. 7.

7. Specifically, Petitioner was alleged to have
illegally prescribed Tylenol/Acetaminophen with Codeine
to Medicaid patients and to have knowingly submitted
false claims for her services to the State of Michigan
for Medicaid reimbursement. I.G. Ex. 7.

8. Petitioner entered a guilty plea to two counts of
knowingly filing false claims for Medicaid reimbursement.
I.G. Ex. 8.

9. The court accepted Petitioner's guilty plea, and
sentenced her to two years' probation, performance of 150
hours of community service, and fined her $720. I.G.
Exs. 8, 9.

10. Petitioner was convicted of a criminal offense,
within the meaning of section 1128(i)(3) of the Act.
Findings 1-9.

11. Petitioner's conviction of a criminal offense was
based upon her submission of false Medicaid claims
regarding items which she had illegally prescribed. I.G.
Exs. 7-9; Findings 1-10.

12. Petitioner's conviction of a criminal offense is
related to the delivery of services under Medicaid,
within the meaning of section 1128(a)(1) of the Act.
I.G. Exs. 7-9; Findings 1-11.

13. An administrative law judge (ALJ) is without
authority to review the I.G.'s exercise of discretion to
exclude an individual or determine the scope or effect of
an exclusion. 42 C.F.R. § 1005.4(c) (5) (1993).

14. The preamble to the regulations which govern this
case states explicitly that "the ALJ is not authorized
under these regulations to modify the date of
commencement of the exclusion." 57 Fed. Reg. 3298, 3325
(1992).

15. I do not have the authority to change the effective
date of Petitioner's exclusion. Findings 13-14.

16. Any exclusion imposed pursuant to section 1128(a)
must be for a period of at least five years. Section
1128(c)(3)(B) of the Act.
4

17. Only if an exclusion is for a period of more than
five years, may an individual's cooperation with federal
or State officials (which cooperation results in others
being convicted, excluded, or assessed a civil monetary
penalty), act as a mitigating factor to reduce the
individual's period of exclusion. 42 C.F.R §
1001.102(c).

18. Since Petitioner received the minimum, mandatory
five-year period of exclusion, the mitigating factor of
cooperation with federal or State officials does not
apply to her case. Findings 16-17.

19. A defendant in a criminal proceeding does not have
to be advised of all possible consequences which may flow
from his plea. U.S. v. Suter, 755 F.2d 523, 525 (7th
Cir. 1985).

20. Petitioner's argument that she did not know that her
guilty plea would lead to a five-year exclusion does not
mitigate against the length of her exclusion. Finding
19.

21. Petitioner may not collaterally attack her
conviction by contending that she did not know that her
practice of prescribing codeine-based substances to
Medicaid patients, without a license, was against the
law. 42 C.F.R. § 1001.2007(d).

22. Petitioner's argument that she has been found by a
State administrative law judge to be a person of good
moral character is not relevant to any of the issues in
this case. See Finding 16.

23. The I.G. was required to exclude Petitioner from
participation in Medicare and Medicaid for a period of
five years, pursuant to sections 1128(a)(1) and
1128(c) (3) (B) of the Act. Findings 2-12, 16.

PETITIONER'S ARGUMENT

Petitioner argues that her exclusion should be held in
abeyance until she is able to complete her residency
program at Wayne State University's School of Medicine.
Petitioner alleges, in support of her argument, that the
I.G. held an exclusion in abeyance in a case similar to
hers.

Alternatively, Petitioner states that she understands
that her exclusion is mandatory and alleges that the
primary issue is “whether the Government should exclude
5

her from program participation for an additional period."
P. Br. at 1. Petitioner argues that "no additional
action [should] be taken" since she was a key witness for
the State of Michigan in its prosecution of one of her
former employers; she was naive regarding medical
practices in the United States and did not realize that
her actions were against the law; she was unaware that
her guilty plea could lead to her exclusion from Medicare
and Medicaid; and, finally, that findings made by an ALJ
for the Michigan Department of Commerce demonstrate that
she is a person of good moral character.

DISCUSSION

The facts alleged by the I.G., and not disputed by
Petitioner, demonstrate that Petitioner was convicted of
a criminal offense related to the delivery of a service
under Medicaid within the meaning of section 1128(a) (1)
of the Act. For this reason, Petitioner's five-year
exclusion is required as a matter of law.

For purposes of the Act, an individual is considered to
have been "convicted" of a criminal offense, when, among
other bases, the individual's plea of guilty has been
accepted by a State court. Section 1128(i)(3) of the
Act. In the present case, Petitioner pled guilty to two
counts of filing false Medicaid claims.’ Findings 6-8.
The Michigan State court accepted Petitioner's plea and
sentenced her to two years' probation, 150 hours of
community service, and fined her $720. Finding 9.
Accordingly, I find that Petitioner was convicted of a
criminal offense within the meaning of sections 1128(a)
and 1128(i) of the Act.

Further, I find that Petitioner's conviction is related
to the delivery of a service under Medicaid.
Petitioner's crime involved the fact that she knowingly
submitted of a false Medicaid claim for

3 Petitioner asserts that she pled no contest to
the two counts of filing false Medicaid claims, but she
has not offered any evidence to support her contention.
However, even if I accept Petitioner's statement as true,
it is immaterial here whether Petitioner pled guilty or
no contest to the charges against her. This is because
the definition of "conviction" under section 1128(i) (3)
of the Act, includes "when a plea of [either] guilty or
nolo contendre by the individual or entity has been
accepted by a Federal, State or local court." Emphasis
added.
6

Tylenol/Acetaminophene with Codeine to the State of
Michigan, when, as an unlicensed individual, Petitioner
could not legally prescribe such a substance. Findings
2-9. There exists an obvious nexus between the Medicaid
items which Petitioner illegally prescribed and
Petitioner's submission of false Medicaid claims. That
nexus lies in the relationship between the Medicaid items
prescribed by Petitioner and the receipt of reimbursement
checks from Medicaid for her services in prescribing
these items. Thus, Petitioner's conviction is "related
to the delivery of an item or service under Medicaid,"
pursuant to section 1128(a)(1) of the Act.

Because Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid, the I.G. was required to exclude Petitioner for
at least five years. Petitioner argues, however, that
her exclusion should be held in abeyance until she is
able to complete her residency program. P. Br. at 1. In
support of her position, Petitioner asserts that, in at
least one other instance, the I.G. agreed to delay the
imposition of a five-year exclusion. Petitioner contends
that in the case of Dr. Falih Kazangy, pursuant to a
settlement agreement, the I.G. held Dr. Kazangy's
exclusion in abeyance pending completion of his residency
training. P. Br. at 10. Petitioner argues that she
should be offered the same settlement agreement which was
given to Dr. Kazangy.’ Id.

In essence, Petitioner's request is that I change the
commencement date of her exclusion. However, I do not
believe that I am authorized to change the commencement
date of Petitioner's exclusion. I interpret the
regulations governing this case to preclude me from
reviewing the I.G.'s exercise of discretion in excluding
Petitioner or in determining the scope or effect of her
exclusion. 42 C.F.R. § 1005.4(c)(5). I agree with the
analysis of the ALJ in the case of Ww

DAB CR344 (1994), when he concluded that a Challenge to
the timing of an exclusion amounted to a challenge to the
I.G.'s exercise of discretion in deciding when to impose
an exclusion. Id. at 11. Indeed, the preamble to the
regulations governing this case states explicitly that
“the ALJ is not authorized under these regulations to
modify the date of commencement of the exclusion." 57

4 Dr. Kazangy's case has never been before the

Departmental Appeals Board (DAB) and Petitioner did not
provide any evidence of an agreement between Dr. Kazangy
and the I.G. Therefore, Petitioner's assertions
regarding Dr. Kazangy are mere allegations.
7

Fed. Reg. 3298, 3325 (1992). Furthermore, an appellate
panel of the DAB concluded that appellate panels and ALJs
of the DAB have no power to change the beginning date of
a mandatory exclusion. Samuel W. Chang, M.D., DAB 1198,
at 10 (1990); see also Thomas J. DePietro, R.Ph., DAB
CR117 (1991).

With regard to Petitioner's argument that she be offered
the same settlement agreement as that allegedly entered
into by Dr. Kazangy, it is within the the I.G.'s
discretion to decide whether or not to enter into
settlement agreements with individuals who have been
excluded. In this case, the I.G. apparently considered
Petitioner's request to have her exclusion held in
abeyance pending completion of her residency program and
decided not to grant her request. I.G. Exs. 2, 3. I do
not have the authority to review this decision and I
cannot order the I.G. to delay imposition of an exclusion
or to enter into settlement agreements with petitioners.

Petitioner argues also that the I.G. should not "exclude
her from program participation for an additional period"
since she cooperated with the State of Michigan in its
prosecution of Dr. Kelly, the Medical Director of the
clinic where Petitioner was employed. P. Br. at 1, 7-8.
In addition, Petitioner asserted that she made
arrangements with the Michigan State Attorney General's
Office to cooperate in their investigation of a kickback
scheme involving clinical laboratories and durable
medical equipment suppliers in the Detroit area. P. Br.
at 8. While under certain circumstances an individual's
cooperation with federal or State officials may be
considered as a mitigating factor in reducing the length
of an exclusion, it can only mitigate to reduce an
exclusion which is longer than the minimum five-year
period. 42 C.F.R § 1001.102(c) (1993). In this case,
the I.G. did not impose an exclusion of more than five
years. Thus, I cannot consider Petitioner's cooperation
with State authorities as a factor mitigating against the
length of her exclusion, since I do not have the
authority to reduce a five-year minimum exclusion
mandated by section 1128(c)(3)(B) of the Act.

Further, Petitioner argues that "no additional action
{should] be taken," because she was unaware that her plea
could serve as the basis for the I.G.'s exclusion. P.
Br. at 1, 7. This argument is without merit. I
rejected a similar argument in the case of
Schram, R. Ph., DAB CR215 (1992), aff'd, DAB 1372 (1992).
In rejecting Petitioner's argument, I cited U.S. v.
Suter, 755 F.2d 523, 525 (7th Cir. 1985), and I noted
that the court had held that a defendant in a criminal
8

proceeding does not have to be advised of all possible
consequences which may flow from his plea, which
consequences may include, as is the case here,
temporarily being barred from the receipt of government
reimbursement for professional services.

Petitioner contends that she did not realize that her
actions were against the law. Specifically, Petitioner
asserts that she did not knowingly make a false Medicaid
claim, as required by the Michigan law she was convicted
under, since she was naive regarding medical practices in
the United States. P. Br. at 8. Petitioner asserts
further that she told her employers she was not licensed
as a physician or physician's assistant in the United
States and that they assured her that this was not a
problem. Id. Petitioner's arguments, however, go to the
merits of her criminal case and amount to a collateral
attack on her conviction. Such collateral attacks on a
criminal conviction are beyond my scope of review and I
may not consider them here.

The regulations which apply in this case provide that
“(w]hen the exclusion is based on the existence of a
conviction, . . . 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." 42 C.F.R. § 1001.2007(d). Thus, Petitioner
may not argue the merits of her criminal case in this
forum. An appellate panel of the DAB discussed the
reasoning behind this rule, with regard to a mandatory
exclusion taken under section 1128(a)(2) of the Act in
the case of Peter J. Edmonson, DAB 1330 (1992). In
Edmonson, the appellate panel held as follows:

It is the fact of the conviction which causes the
exclusion. The law does not permit the Secretary
to look behind the conviction. Instead, Congress
intended the Secretary to exclude potentially
untrustworthy individuals or entities based on
criminal convictions. This provides protection
for federally funded programs and their
beneficiaries and recipients, without expending
program resources to duplicate existing criminal
processes.

Petitioner asserts, in essence, that she has appealed her
criminal conviction in the Detroit Recorder's Court and
that her exclusion should be stayed pending the outcome
of her appeal. P. Br. at 10 n.3. If Petitioner is
successful with her appeal there would be no basis for
her exclusion. Upon application to the I.G., she would
9

be reinstated. 42 C.F.R. § 1001.3005. At the present
time, however, there is no basis for staying the effect
of the exclusion.

Lastly, Petitioner alleges that in disciplinary
proceedings before an ALJ of the State of Michigan,
Department of Commerce, Bureau of Occupational and
Professional Regulation, Office of Legal Services, the
ALJ found that Petitioner was subject to professional
disciplinary action due to her conviction, but not
subject to disciplinary action due to a lack of good
moral character. P. Br. at 9. However, a finding of
good moral character is not relevant to any of the issues
before me. As I stated earlier, sections 1128(a)(1) and
1128(c)(3)(B) of the Act mandate a five-year exclusion
when an individual has been convicted of a program-
related offense. Therefore, while statements attesting
to Petitioner's good character may be factors that
reflect positively upon her, I have no authority to
consider them as bases for reducing the five-year
exclusion imposed and directed against her by the I.G.

CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate
that the Petitioner herein be excluded from Medicare and
Medicaid for a period of at least five years because of
her conviction of a criminal offense related to the
delivery of services under Medicaid. Neither the I.G.
nor an ALJ is authorized to reduce a five-year minimum
mandatory exclusion.

Petitioner's five-year exclusion is, therefore,
sustained.
/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Andre W. Gilmore, DATE: June 29, 1995
Petitioner,

Docket No. C-94-441
Decision No. CR383

-v-

The Inspector General.

DECISION

By letter dated August 30, 1994, the Inspector General
(I.G.) of the United States Department of Health and
Human Services (DHHS) notified Andre W. Gilmore
(Petitioner), that he was being excluded from
participation in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to
States for Social Services programs for a period of five
years.' The I.G. advised Petitioner that he was being
excluded as a result of his conviction in the Washington
State Superior Court of a criminal offense related to the
delivery of an item or service under Medicare. The I.G.
advised Petitioner that the exclusion of individuals
convicted of such program-related offenses is mandated by
section 1128(a)(1) of the Social Security Act (Act). The
I.G. further advised Petitioner that for exclusions
imposed pursuant to section 1128(a)(1) of the Act,
section 1128(c) (3) (B) requires a five~year minimum period
of exclusion.

By letter dated September 19, 1994, Petitioner requested
a hearing before an administrative law judge. By letter
dated October 25, 1994, Petitioner submitted a 29 page
document to support his request for a hearing.

' In this decision, I refer to all programs from
which Petitioner has been excluded, other than Medicare,
as "Medicaid."
2

I convened a prehearing conference on November 9, 1994.
During the conference, I identified the document
submitted by Petitioner on October 25, 1994 as P. Ex. 1.
The I.G. did not contest the admissibility of this
exhibit, and I admitted P. Ex. 1 into evidence. November
16, 1994 Order and Schedule for Filing Briefs and
Documentary Evidence (November 16, 1994 Order) at p. 3.

During the prehearing conference, Petitioner admitted
that: (1) he was convicted of a criminal offense, and
(2) the criminal offense of which he was convicted was
related to the delivery of an item or service under
Medicare or Medicaid. The parties agreed that, to the
extent that there are no genuine issues of material fact,
there was no need for an in-person hearing. They agreed
to proceed by written submissions. Accordingly, I
established a schedule for the parties to file written
submissions in my November 16, 1994 Order. In addition,
I memorialized Petitioner's admissions in my November 16,
1994 Order. Petitioner has not disagreed or retreated
from these admissions at any time during this proceeding.

The I.G. filed a brief in support of a motion for summary
disposition. The I.G. did not offer any evidentiary
materials into evidence. Petitioner filed a cross-motion
for summary disposition, accompanied by a brief and one
exhibit. By letter dated March 30, 1995, I identified
this exhibit as P. Ex. 2.

The I.G. filed a reply brief. The I.G. did not contest
the admissibility of P. Ex. 2, and I admit it into
evidence.

I have considered the parties' arguments, supporting
exhibits, and the applicable law. I conclude that there
are no material factual issues in dispute (i.e., the only
matter to be decided is the legal significance of the
undisputed facts). I conclude also that Petitioner is
subject to the minimum mandatory exclusion provisions of
sections 1128(a)(1) and 1128(c)(3)(B) of the Act, and I
affirm the I.G.'s determination to exclude Petitioner
from participation in Medicare and Medicaid for a period
of five years.

FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLs)
1. Petitioner was convicted of a criminal offense in

Washington State Superior Court. November 16, 1994 Order
at p. 2; P. Ex. 2.
3

2. The criminal offense of which Petitioner was
convicted is related to the delivery of an item or
service under Medicare or Medicaid. November 16, 1994
Order at p. 2.

3. The Secretary of DHHS has delegated to the I.G. the
authority to determine, impose, and direct exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 2166
(1983).

4. On August 30, 1994, the I.G. excluded Petitioner fr
participating in Medicare and directed that he be
excluded from participating in Medicaid for a period of
five years, pursuant to section 1128(a)(1) of the Act.

5. Section 1128(a)(1) of the Act requires the I.G. to
exclude Petitioner from participating in Medicare and
Medicaid.

6. The minimum mandatory period of exclusion pursuant
section 1128(a)(1) is five years. Act, section
1128(c) (3) (B).-

7. ‘The I.G. properly excluded Petitioner from
participation in Medicare and Medicaid for a period of
five years pursuant to sections 1128(a)(1) and
1128(c)(3)(B) of the Act. FFCLs 1 - 6.

8. I do not have the authority to reduce a five-year
minimum exclusion mandated by sections 1128(a)(1) and
1128(c) (3) (B) of the Act.

9. The determination of the I.G. to impose and direct
five-year exclusion in this case does not violate the
prohibition against double jeopardy under either the
United States Constitution or the Washington State
Constitution.

10. I do not have the authority to consider a request
for a waiver of Petitioner's exclusion.
DISCUSSION

Section 1128(a)(1) of the Act requires exclusions for

2

om

to

individuals convicted of offenses related to the delivery
of items or services under Medicare or Medicaid. The law
not only mandates exclusions for individuals convicted of

program-related offenses, it requires that the term of

such exclusions be for at least five years. Act, section

1128(c) (3) (B).
4

The material facts of this case are not in dispute.
Petitioner admitted during the November 9, 1994
prehearing conference that he was convicted of a criminal
offense. FFCL 1. Petitioner admitted also during the
same conference that the criminal offense of which he was
convicted is related to the delivery of an item or
service under Medicare or Medicaid. FFCL 2. Since
Petitioner was convicted of a criminal offense and it was
related to the delivery of an item or service under
Medicare or Medicaid, the I.G. is required by law to
exclude Petitioner for a minimum of five years.

Petitioner's principal argument is that application of
the mandatory exclusion provisions to this case violates
the prohibition against double jeopardy contained in the
United States Constitution and in the Washington State
Constitution. Petitioner argues that the double jeopardy
clause found in both the United States Constitution and
the Washington State Constitution prohibits multiple
punishments for the same offense. Petitioner states that
he was prosecuted and punished in State court for a
criminal offense. Later, the I.G. excluded him for the
same criminal offense. Petitioner contends that:

This is not a single coordinated prosecution, but
instead involves two separate efforts to punish the
defendant. The Double Jeopardy Clause prohibits
this type of action.

Petitioner's brief in support of cross-motion for summary
disposition at p. 10.

The purpose of a minimum mandatory exclusion imposed
pursuant to sections 1128(a)(1) and 1128(c)(3)(B) is
remedial, not punitive. The minimum mandatory exclusion
provisions serve to protect beneficiaries and recipients
from an individual or entity whose trustworthiness
Congress has deemed questionable, based on that
individual's or entity's conviction of a program-related
crime. Federal courts have specifically found that
exclusions under section 1128 are remedial in nature,
rather than punitive, and do not violate the prohibition
against double jeopardy. Greene v. Sullivan, 731 F.
Supp. 838 (E.D. Tenn. 1990); Manocchio v. Kusserow, 961
F.2d 1539 (11th Cir. 1992). The Greene court noted the
“apt comparison between the exclusion remedy and
professional license revocations for lawyers, physicians,
and real estate brokers which have the function of
protecting the public and have routinely been held not to
violate the double jeopardy clause." 731 F. Supp. 838,
840. In view of the remedial nature of the exclusion, I
5

reject Petitioner's argument that his exclusion violates
the prohibition against double jeopardy.

Petitioner requests also that consideration be given to
reducing the length of his exclusion in light of the
circumstances of this case. He states that he cooperated
with the authorities in the underlying criminal
proceeding and that he entered into a plea agreement in
which he agreed to divest himself of the portion of his
business involving Medicare and Medicaid. He states that
since he entered into the plea agreement on April 12,
1993, he has not been a provider of Medicare or Medicaid
services. Thus, he argues that the length of his
exclusion should be reduced because he has been
constructively excluded since April 12, 1993. Petitioner
states that he has learned his lesson and that safeguards
are now in place to prevent any recurrence of his
criminal misconduct. Petitioner states also that he is a
veteran of the Vietnam conflict and that he lost his left
leg in combat. He states that his injury provides him
with a unique ability to deal with other amputees in need
of prosthetic devices.

As I held above, sections 1128(a)(1) and 1128(c) (3) (B)
require the Secretary to impose and direct an exclusion
of at least five years against an individual who is
convicted of a criminal offense related to the delivery
of an item or service under Medicare or Medicaid. I do
not have the authority to reduce the minimum mandatory
exclusion imposed and directed against Petitioner. Thus,
I am without the authority to consider the equitable
arguments raised by Petitioner regarding the effect the
unique circumstances of his case should have on the
length of his five-year exclusion.

In the alternative, Petitioner requests that his
exclusion be waived on the grounds that he provides
specialized services to the community. As I stated in my
November 16, 1994 Order, I do not have the authority to
grant Petitioner's request that his exclusion be waived.
There is nothing in the law or regulations which either
states or suggests that the Secretary has delegated to
administrative law judges the authority to waive the
five-year minimum exclusion mandated by sections
1128(a)(1) and 1128(c) (3) (B) of the Act. Yvon Nazon,
M.D., DAB CR169 (1991).
6
CONCLUSION

Based on the law and the undisputed material facts in
this case, I conclude that the I.G. properly excluded
Petitioner from Medicare and Medicaid pursuant to section
1128(a)(1) of the Act. I further conclude that the five-
year minimum period of exclusion imposed and directed
against Petitioner is mandated by section 1128(c) (3) (B)
of the Act. Therefore, I sustain the exclusion.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Dr. William I. Cooper, DATE: June 7, 1995
Petitioner,

Docket No. C-95-024
Decision No. CR381

-v-

The Inspector General.

DECISION

On October 19, 1994, the Inspector General (I.G.) notified
Petitioner that he was being excluded from participating in
the following programs: Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to States
for Social Services. The I.G. notified Petitioner that he
was being excluded pursuant to the provisions of section
1128(b) (4) of the Social Security Act (Act). The I.G.
asserted that the exclusion was based on the fact that
Petitioner's license to practice medicine or provide health
care in the State of Pennsylvania, or the right to renew that
license, had been suspended, or was otherwise lost, due to
actions taken by the Pennsylvania State Board of Medicine for
reasons bearing on Petitioner's professional competence,
professional performance, or financial integrity. The I.cG.
told Petitioner that he would be excluded until he obtained a
valid license to practice medicine or provide health care in
Pennsylvania.

Petitioner requested a hearing, and the case was assigned to
me for a hearing and a decision. I scheduled an in-person
evidentiary hearing, based on Petitioner's request to present
in-person testimony. Petitioner then moved for summary
disposition. The I.G. opposed the motion. On February 21,
1995, I denied Petitioner's motion.! Petitioner then
submitted his list of proposed witnesses. Based on this
submission, the I.G. moved to cancel the in-person hearing,

' Ruling Denying Motion for Summary Disposition,
February 21, 1995.
2

arguing that there existed no disputed issues of material
fact in the case. On March 16, 1995, I ordered that the in-
person hearing be continued, and I afforded the I.G. the
opportunity to file a motion for summary disposition.’ The
I.G. then moved for summary disposition. Petitioner opposed
the motion.

I have considered the I.G.'s motion, Petitioner's opposition
to the motion, the exhibits submitted by the parties, and the
relevant law.’ I conclude that there exist no disputed
issues of material fact in this case. I conclude also that,
based on the undisputed material facts and the law, the I.G.
was authorized to exclude Petitioner pursuant to section
1128(b) (4) (B) of the Act. Finally, I conclude that the
length of the exclusion -- coterminous with Petitioner's loss
of his license to practice medicine in Pennsylvania -- is
authorized by applicable regulations.

I. Issues, findings of fact, and conclusions of law

There are two issues in this case. The first issue is
whether the I.G. had authority to exclude Petitioner under
section 1128(b)(4) of the Act. The second issue is whether
the length of the exclusion is reasonable.

In concluding that the I.G. had authority to exclude
Petitioner and that the length of the exclusion is
reasonable, I make the following findings of fact and
conclusions of law. After each finding or conclusion, I
state the page or pages of this decision at which I discuss
the finding or conclusion in detail.

2? order Continuing Hearing, March 16, 1995.

3 The I.G. submitted two exhibits (I.G. Ex. 1 and 2)
in support of her motion for summary disposition. Petitioner
submitted one exhibit (P. Ex. 1) in opposition to the I.G.'s
motion for summary disposition. Neither party objected to
the admission into evidence of the other party's exhibits.
Therefore, I admit into evidence I.G. Ex. 1 and 2, and P. Ex.
1.

I note, however, that it is not necessary for a party to
offer, or for me to receive, exhibits in support of or in
opposition to a motion for summary disposition where there
are no disputed issues of material fact. Where facts are
truly not in dispute, then a party need only aver those facts
which that party believes to be dispositive of an issue.
3

1. Petitioner surrendered his license to practice
medicine in Pennsylvania during the pendency of a formal
disciplinary proceeding which concerned his professional
competence or performance. Pages 3-4, 678.

2. The I.G. was authorized to exclude Petitioner
pursuant to section 1128(b)(4)(B) of the Act. Pages 8-
9.

3. The exclusion which the I.G. imposed against
Petitioner is reasonable. Page 9.

II. Analysis
A. Undisputed material facts

The undisputed material facts of this case are as follows.

On December 23, 1991, the Commonwealth of Pennsylvania, State
Board of Medicine (Pennsylvania Board of Medicine) issued an
order to show cause to Petitioner. I.G. Ex. 1. The order to
show cause contained numerous allegations that Petitioner had
failed to comply with the ethical or quality standards of the
medical profession. Jd. at 2-140. It stated that, should
the Pennsylvania Board of Medicine find the allegations to be
true, the Board could impose penalties against: Petitioner,
including revocation or suspension of Petitioner's license to
practice medicine in Pennsylvania. Id. at 140.

Petitioner was advised of his right to request a hearing.
I.G. Ex. 1 at 141. On March 18, 1992, Petitioner answered
the order to show cause. P. Ex. 1.

In March 1994, Petitioner and the Pennsylvania Board of
Medicine entered into a consent agreement. I.G. Ex. 2. In
order to resolve the allegations against him, Petitioner
agreed to the following:

a. That on or before June 30, 1994, [{Petitioner]
will voluntarily and permanently cease and desist
from practicing medicine and surgery within the
Commonwealth of Pennsylvania;

b. That on December 31, 1994, the end of the
current biennial renewal period, [Petitioner] shall
allow his unrestricted medical license, . .. to go
on permanent inactive status;

c. That [Petitioner] will not at any time
thereafter apply for reinstatement, reissuance,
reactivation or renewal of his unrestricted license
4

to practice medicine and surgery in the
Commonwealth of Pennsylvania.

Id. at 2-3.

Petitioner asserts that there exist facts in addition to the
foregoing undisputed material facts which are material to
this case and which he would prove at an in-person
evidentiary hearing. Petitioner avers that, if provided an
in-person hearing, he would prove that the reasons he entered
into the consent agreement had nothing to do with his
professional competence or performance. He asserts that he
would prove that his reasons for giving up his right to renew
his license relate to the time and financial commitment that
would have been involved in contesting the allegations made
against him in Pennsylvania, coupled with his intent to
relocate his practice to another State. Petitioner's Brief
at 4.

For purposes of resolving the I.G.'s motion, I accept as true
Petitioner's contention that he entered into the consent
agreement because he did not want to incur the expense and
time outlay that would be involved in defending against the
allegations made in the Pennsylvania Board of Medicine's
order to show cause. Also, I accept as true Petitioner's
contention that he entered into the consent agreement because
he was planning to relocate his practice to another State.
However, for the reasons I discuss at Part II.c. of this
decision, these contentions are not of facts that are
material to the outcome of this case.

In his request for hearing in response to the I.G.'s October
19, 1994 notice of exclusion, Petitioner alleged that he was
licensed to practice in States other than Pennsylvania, and
that these States were fully aware of the actions which
occurred in Pennsylvania concerning Petitioner's Pennsylvania
license. Petitioner contended further that none of these
other States had taken any adverse action concerning the
licenses to practice medicine which Petitioner held in those
States.‘ If true, these allegations might provide a basis
for Petitioner to argue that the exclusion which the I.G.
imposed is not reasonable. See Part II.B. of this decision.

4 In Petitioner's Request for Hearing and at the
initial prehearing conference that I held, Petitioner's
counsel asserted that the States of Oklahoma and New Jersey
were fully aware of the events which had occurred in
Pennsylvania, but had not taken any adverse action against
the licenses to practice medicine which Petitioner held in
those States. Petitioner's Request for Hearing, November 3,
1994; Order and Notice of Hearing, December 14, 1994.
5

However, Petitioner has not offered to prove any facts which
might support these allegations. He has not contended, in
response to the I.G.'s motion for summary disposition, that
he would be able to prove at an in-person hearing that
Oklahoma or New Jersey had decided not to take action against
Petitioner's licenses in those States, being fully apprised
of the events that occurred in Pennsylvania. He has not
submitted exhibits or proposed testimony to support the
assertions he made in his request for a hearing. I conclude
that Petitioner has not shown that there may exist evidence
which supports his allegations concerning his licenses to
practice medicine in States other than Pennsylvania.

B. Applicable law

The I.G. excluded Petitioner pursuant to section 1128(b) (4)
of the Act. This section authorizes the Secretary (or her
delegate, the I.G.), to exclude an individual or entity:

(A) whose license to provide health care has been
revoked or suspended by any State licensing
authority, or who otherwise lost such a license or
the right to apply for or renew such a license, for
reasons bearing on the individual's or entity's
professional competence, professional performance,
or financial integrity, or

(B) who surrendered such a license while a formal
disciplinary proceeding was pending before such an
authority and the proceeding concerned the
individual's or entity's professional competence,
professional performance, or financial integrity.

The Secretary has published a regulation which governs the
length of exclusions imposed pursuant to section 1128(b) (4)
of the Act. 42 C.F.R. § 1001.501. This regulation provides,
generally, that an exclusion imposed pursuant to section
1128(b) (4) will be for the same length of time as the State
revocation, suspension, surrender or other loss of a license
to provide health care which is the basis for the exclusion.
42 C.F.R. § 1001.501(b) (1). However, the regulation states
an exception permitting an exclusion to be for less than a
coterminous period. Under 42 C.F.R. § 1001.501(c) (1), an
exclusion may be for less than a coterminous period if, prior
to the date of the I.G.'s notice of exclusion to the excluded
individual or entity:

the licensing authority of a State (other than the
one in which the individual's or entity's license
had been revoked, suspended, surrendered or
otherwise lost), being fully apprised of all of the
circumstances surrounding the prior action by the
6

licensing board of the first State, grants the
individual or entity a license or takes no
significant adverse action as to a currently held
license...

Cc. Analysis of the materjal facts and law

The I.G. argues that, based on the undisputed material facts
and the law, she was authorized to exclude Petitioner, either
under section 1128(b) (4) (A) or section 1128(b) (4) (B) of the
Act. According to the I.G., within the meaning of section
1128(b) (4) (A) of the Act, Petitioner "otherwise lost" his
license to practice medicine in Pennsylvania for reasons
bearing on his professional competence or performance when he
entered into the consent agreement with the Pennsylvania
Board of Medicine. The I.G. argues also that, within the
meaning of section 1128(b)(4)(B) of the Act, Petitioner
"surrendered" his license to practice medicine in
Pennsylvania during the pendency of a formal disciplinary
proceeding in that State which concerned his professional
competence or performance.

Petitioner argues that the I.G. has not established a basis
to exclude him either under section 1128(b) (4) (A) or section
1128(b) (4) (B) of the Act. Petitioner asserts that his
license to practice medicine in Pennsylvania was not revoked,
suspended, or otherwise lost within the meaning of section
1128(b) (4) (A). He argues that, where an individual
relinquishes voluntarily the privilege of providing health
care for reasons of expedience, the loss of that privilege is
not a "loss" under section 1128(b) (4) (A), even if the events
that predicated the loss of license involve charges relating
to that individual's professional competence or performance.°
Petitioner asserts additionally that he should be permitted
to prove that the reasons he gave up his Pennsylvania license
to practice medicine had to do with expediency, and not with
the merits of the charges filed against him in Pennsylvania.

Petitioner argues also that the I.G. has not established a
basis to exclude him under section 1128(b) (4) (B) of the Act.
He argues that he did not surrender his license to practice
medicine within the meaning of this section.® Petitioner

5 Petitioner characterizes the terms of the consent
agreement as the relinquishing of his right to renew his
Pennsylvania license. Petitioner's Brief at 3.

6 Petitioner does not deny that a formal disciplinary
proceeding was pending against him in Pennsylvania when he
entered into the consent agreement. He concedes that this
proceeding concerned his professional competence or
7

apparently asserts that, in order to surrender a license
within the meaning of section 1128(b) (4) (B), an individual
must physically surrender his or her license document to the
appropriate State authorities. Although Petitioner
acknowledges that he agreed to cease practicing medicine in
Pennsylvania and to not seek renewal of his license to
practice in that State, he asserts that this agreement did
not contain a provision to physically surrender his license
to practice medicine.

Petitioner's license to practice medicine was not revoked,
suspended, or otherwise lost, within the meaning of section
1128(b) (4) (A) of the Act. It is apparent from the plain
language of this section that it applies only to those
circumstances where an individual or entity loses a license
to provide health care as the consequence of an adverse
action taken by a State licensing authority.’ Petitioner's
license to practice medicine in Pennsylvania was not taken
from him by the Pennsylvania Board of Medicine. Rather,
Petitioner voluntarily relinquished the privilege of
practicing in Pennsylvania in order to end a disciplinary
proceeding that had been initiated against him in that State.

It is unnecessary for me to address Petitioner's assertion
that the reason he ceased practicing in Pennsylvania did not
relate to his professional competence or performance. I do
not reach that issue because section 1128(b) (4) (A) does not
apply to the circumstance where an individual or entity
voluntarily relinquishes the privilege of providing health
care. Thus, the reason that the individual or entity
relinquishes the privilege is irrelevant to application of
this section. However, I would have concluded that
Petitioner's argument as to the reasons for his ceasing his
Pennsylvania practice is not germane, had I concluded that
his license was "otherwise lost" within the meaning of
section 1128(b)(4) (A). The reasons described by that section
relating to a loss of a license to provide health care
plainly relate to the reasons on which a State licensing
authority bases an adverse action, and not to an individual's
or entity's reasons for giving up a license to a State
licensing authority.

performance. Petitioner's Brief at 5.

7 If I were to interpret this section as broadly as
is urged by the I.G., then section 1128(b) (4) (B) would be
superfluous. That is so because, under the I.G.'s advocated
interpretation of "otherwise lost" in section 1128(b) (4) (A),
the term would encompass any situation that might comprise a
surrender of a license within the meaning of section
1128(b) (4) (B).
8

Petitioner "surrendered" his license to practice medicine in
Pennsylvania within the meaning of section 1128(b) (4) (B) of
the Act. I construe this section to apply to the case where
an individual or entity voluntarily relinquishes the
privilege to provide health care conferred by a license
during the pendency of formal disciplinary proceedings that
concern the individual's professional competence,
professional performance, or financial integrity. The
undisputed material facts of this case prove that Petitioner
relinquished his privilege to practice medicine in
Pennsylvania under circumstances described by section

1128 (b) (4) (B).

I do not agree with Petitioner's argument that this section
applies only to the circumstance where an individual or
entity physically surrenders to a State licensing authority
the document which authorizes that individual or entity to
provide health care. In neither section 1128(b) (4) (A) nor
section 1128(b) (4) (B) did Congress intend the word "license"
to mean only a document which memorializes a privilege to
provide health care. The word "license" is not defined
either in section 1128(b) (4) (A) or section 1128(b) (4) (B).
Absent an explicit congressional definition of "license," it
is reasonable to give it its common and ordinary meaning.
Webster's New Collegiate Dictionary, 1977 Ed., defines a
"license" to be:

1 a: permission to act br freedom of action 2 a: a
permission granted by a competent authority to
engage in a business or occupation or in an
activity otherwise unlawful b: a document, plate,
or tag evidencing a license granted... .

From this, it is evident that the common and ordinary meaning
of "license" encompasses permission by an authority to
perform an act. While it is true that a "license" may
constitute a document which evidences the grant of authority,
the common and ordinary meaning of the word plainly is far
broader than that. There is nothing contained in section
1128(b) (4) (A) or section 1128(b) (4) (B) to suggest that
Congress intended it to be applied consistent with only the
narrowest possible definition of "license."

The undisputed material facts of this case establish that
Petitioner surrendered the authority granted by the
Pennsylvania Board of Medicine to practice medicine in
Pennsylvania during the pendency of a formal disciplinary
proceeding concerning his professional competence or
performance. The consent agreement which Petitioner entered
into with the Pennsylvania Board of Medicine had three
relevant elements. Petitioner agreed to: (1) permanently
cease practicing medicine in Pennsylvania; (2) allow his
9

license to practice medicine in Pennsylvania to go on
permanent inactive status; and (3) not seek reinstatement of
his Pennsylvania license. I.G. Ex. 2. These elements
comprise a surrender by Petitioner of his Pennsylvania
license within the meaning of section 1128(b)(4)(B) of the
Act.

The exclusion of Petitioner is reasonable. The coterminous
exclusion imposed by the I.G. is authorized by 42 C.F.R. §
1001.501(b) (1). Petitioner has neither offered nor proven
any facts to show that the requirement of this regulation,
that, ordinarily, an exclusion imposed pursuant to section
1128(b) (4) must be coterminous with the loss of a license to
provide health care, should not apply here.

III. Conclusion

I conclude that the undisputed material facts of this case
establish that the I.G. was authorized to exclude Petitioner
under section 1128(b)(4)(B) of the Act, and that the
exclusion imposed by the I.G. is reasonable. Therefore, I
enter summary disposition sustaining the I.G.'s exclusion
determination.

/s/

Steven T. Kessel
Administrative Law Judge