Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Karthik Ramaswamy, M.D.,
Petitioner,
v.
Centers for Medicare and Medicaid Services.
Docket No. C-13-124
Decision No. CR2771

Date: May 1, 2013

DECISION

Wisconsin Physicians Service (WPS), an administrative contractor acting on behalf of the
Centers for Medicare and Medicaid Services (CMS), determined that Petitioner was not
eligible for enrollment in the Medicare program earlier than May 21, 2012, and that
Petitioner could not submit claims for payment of services performed or delivered earlier
than April 21, 2012. Petitioner appealed. For the reasons stated below, I affirm WPS’s
determination.

I. Case Background and Procedural History

On May 4, 2011, Petitioner mailed to WPS an initial Medicare enrollment application
(Form CMS-855I) and a reassignment of benefits application (Form CMS-855R) seeking
to reassign his Medicare payments to Physicians Groups, LC. CMS Exs. 6, 7. WPS
received the applications on May 9, 2011. CMS Ex. 6, at 1; CMS Ex. 7, at 1. On May
24, 2011, WPS requested additional information to process Petitioner’s applications.
CMS Ex. 8. By letter dated June 29, 2011, WPS denied Petitioner’s application because
Petitioner had not supplied the information requested. CMS Ex. 9.

On May 15, 2012, Petitioner mailed to WPS a second Medicare enrollment application
(Form CMS-855I), and a Medicare reassignment of benefits application (Form CMS-
855R) again seeking to reassign his Medicare payments to Physicians Groups, LC. CMS
Ex. 2, at 1. These applications are the subject of the present appeal. WPS received these
applications on May 21, 2012. CMS Ex. 1, at 1; CMS Ex. 2, at 1. On July 9, 2012, WPS
approved Petitioner’s Medicare enrollment application with an effective date of May 21,
2012, and a retrospective billing date of April 21, 2012. CMS Ex. 3, at 1.

By letter dated September 6, 2012, Petitioner requested reconsideration of his effective
date. CMS Ex. 4. In an October 20, 2012 reconsideration determination, WPS explained
that Petitioner’s application was received on May 21, 2012, and that 30 days prior to
receipt was April 21, 2012; WPS concluded that “the effective billing date will remain
April 21, 2012.” CMS Ex. 5, at 2.

By letter dated November 14, 2012, Petitioner timely filed a request for a hearing with
the Departmental Appeals Board, Civil Remedies Division. Following the issuance of
my November 21, 2012 Acknowledgment and Pre-hearing Order (Order), CMS filed a
motion for summary disposition, a pre-hearing brief and memorandum in support of its
motion for summary disposition (CMS Br.), and 11 proposed exhibits (CMS Exs. 1-11).
CMS did not list any specific proposed witnesses but indicated as witnesses “any and all
witnesses called by Petitioner.” Petitioner, through counsel, filed a cross motion for
summary disposition, a pre-hearing brief and memorandum in support of its motion for
summary disposition (P. Br.), and 12 proposed exhibits (P. Exs. 1-12). Petitioner
submitted an affidavit from Sarah Camp (P. Ex. 5) and lists Sarah Camp as its only
proposed witness. Because neither party has objected to any of the proposed exhibits, I
admit all of them into the record.

My Order advised the parties that they must submit written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party requested an opportunity to cross-examine a witness. Order § 8, 9, 10; Vandalia
Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 8 (2002)
(holding that the use of written direct testimony for witnesses is permissible so long as
the opposing party has the opportunity to cross-examine those witnesses). CMS did not
offer any witnesses that Petitioner could request to cross-examine. Petitioner offered the
affidavit of one witness; however, CMS did not affirmatively request an opportunity to
cross-examine that individual in accordance with the terms of the Order. Order 4 9.
CMS has waived its right to cross-examine Ms. Camp because CMS failed to submit a
specific written request in the timeframe permitted. Consequently, I will not hold an in-
person hearing in this matter. See Kate E. Paylo, D.O., DAB CR2232, at 9 (2010).
Accordingly, the record is closed and I will decide this matter based on the written
record. Order § 11.

II. Discussion
A. Issue

Whether CMS had a legitimate basis for finding that May 21, 2012, was the effective
date for Petitioner’s Medicare enrollment and that Petitioner could retrospectively bill for
services rendered to Medicare beneficiaries on or after April 21, 2012.

B. Findings of Fact, Conclusions of Law, and Analysis’

The Social Security Act authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers in the Medicare program.” 42 U.S.C. §§ 1302, 1395cc(j). Under the
Secretary’s regulations, a provider or supplier who seeks billing privileges under
Medicare must “submit enrollment information on the applicable enrollment application.
Once the provider or supplier successfully completes the enrollment process ... CMS
enrolls the provider or supplier into the Medicare program.” 42 C.F.R. § 424.510(a).

I. WPS received Petitioner’s completed applications (Forms CMS-855I
and CMS-855R) on May 21, 2012.

Physicians Groups, LC and Petitioner completed and signed Forms CMS-855I and CMS-
855R on May 15, 2012. CMS Ex. 1, at 12. WPS acknowledged receiving these
application forms on May 21, 2012. CMS Ex. 1, at 1; CMS Ex. 2, at 1. Sarah Camp
testified that she submitted the applications on Petitioner’s behalf on May 18, 2012.

P. Ex. 5, at 2. Therefore, the evidence of record supports the conclusion that WPS
received Petitioner’s enrollment and reassignment applications on May 21, 2012.

2. WPS properly concluded that Petitioner’s enrollment and
reassignment of Medicare benefits was effective on May 21, 2012,
with a retrospective billing period commencing on April 21, 2012.

WPS determined that the effective billing date or retrospective billing period of
Petitioner’s benefits was April 21, 2012. CMS Ex. 3, at 1. WPS indicated that “[t]his
effective billing date is based on 30 days prior to the filing date.” CMS Ex. 3, at 1; see
also CMS Ex. 5, at 1-2.

* My findings of fact and conclusions of law are set forth in italics and bold font.

> A “supplier” furnishes services under Medicare, and the term supplier applies to
physicians and other nonphysician practitioners and facilities that are not included within
the definition of the phrase “provider of services.” 42 U.S.C. § 1395x(d).
The Secretary’s regulations provide that the effective date of enrollment of physicians is
“the later of the date of filing of a Medicare enrollment application that was subsequently
approved by a Medicare contractor or the date an enrolled physician . . . first began
furnishing services at a new practice location.” 42 C.F.R. § 424.520(d) (emphasis
added). The “date of filing” is the date that the Medicare contractor “receives” a signed
provider/supplier enrollment application that the Medicare contractor is able to process to
approval. 73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); see also Caroline Lott Douglas,
PA, DAB CR2406, at 5-7 (2011); Rizwan Sadiq, M.D., DAB CR2401, at 5 (2011).
Because WPS received a complete, approvable application from Petitioner on May 21,
2012, WPS properly determined this date as Petitioner’s effective date.

The regulations applicable to this case permit limited retrospective billing for physician
services provided to Medicare beneficiaries for up to 30 days before the effective date of
enrollment. 42 C.F.R. § 424.521(a). Thus, WPS correctly determined, based on a May
21, 2012 date of filing, that the enrollment effective date is May 21, 2012, and Petitioner
could retrospectively bill for services provided to beneficiaries beginning on April 21,
2012.

3. The initial determination surrounding Petitioner’s May 4, 2011
applications (Form CMS-855I and Form CMS-855R) is administratively
final and does not provide a basis for altering Petitioner’s effective date
of enrollment.

Petitioner does not dispute that 42 C.F.R. § 424.520(d) means that the effective date for a
Medicare enrollment application is the date of filing. P. Br. at 1. However, Petitioner
asserts that he submitted a earlier completed Form CMS-855I and Form CMS-855R on
May 4, 2011. P. Br. at 2. Petitioner argues that the earlier submission date should result
in an earlier enrollment effective date because he promptly submitted the missing
information requested in WPS’s May 24, 2011 letter.

Petitioner provided the following chronology in support of his case. On May 4, 2011,
Petitioner mailed to WPS a Medicare enrollment application (Form CMS-8551) and a
reassignment of benefits application (Form CMS-855R) seeking to reassign his Medicare
billing privileges to Physicians Groups, LC. P. Ex. 1; CMS Exs. 6, 7. Petitioner asserts
that the applications were received on May 7, 2011. P. Ex. 1. On May 24, 2011, a WPS
analyst sent a letter by email to Sarah Camp at Physicians Groups, requesting additional
information to process Petitioner’s applications. P. Ex. 4, at 3; CMS Ex. 8. The letter
indicated that WPS could deny the applications if the additional information was not
received within 30 days of May 24, 2011. P. Ex. 4, at 1; CMS Ex. 8, at 3. Ms. Camp
testified that she responded to WPS’s request by submitting via facsimile materials
responding to WPS’s request and a Certification Statement (Form CMS-855I Section 15)
signed by Petitioner. P. Ex. 5, at 1; P. Ex. 6. A facsimile transmission report shows that
a facsimile was sent on May 24, 2011 to WPS and was received by WPS. CMS asserts
that WPS has no record of receiving the requested information on May 24, 2011, or at
any time prior to June 29, 2011. CMS Br. at 5. Ms. Camp states that she called WPS on
October 17, 2011, and again on December 14, 2011, and was informed each time that the
enrollment application was “in process.” She asserts that she attempted to contact WPS
on January 17, 2012, and on March 19, 2012, left messages, but WPS did not return her
telephone calls. On March 28, 2012, Ms. Camp called WPS and was verbally informe
that Petitioner’s application had been denied by letter dated June 29, 2011, because
Petitioner had not supplied the requested information within 30 days of the May 24, 2011
request. Ms. Camp asserts that neither she nor anyone else in her organization received
written notice of the denial. Ms. Camp requested written notification of the purported
denial and received it via facsimile on April 3, 2012. P. Ex. 5, at 5.

Petitioner submitted a corrective action plan and an initial request for reconsideration o
the June 29, 2011 denial determination on May 1, 2012. CMS Ex. 10. Petitioner asserted
that he had furnished the requested information in a timely manner and that he had not
received a copy of the June 29, 2011 denial letter until April 3, 2012. CMS Ex. 11, at 1-
3. WPS dismissed Petitioner’s request for reconsideration on May 18, 2012 because it

ad not been timely submitted and Petitioner had not shown good cause for the late filing.
CMS Ex. 11.

A provider or supplier may request reconsideration by filing a request for reconsideration
within 60 days from receipt of the notice of initial determination, unless CMS or its agent
determines there is “good cause” for extending the deadline. 42 C.F.R. §§ 498.5(1)(1),
498.22. A supplier “dissatisfied with a reconsidered determination . . . is entitled to a
hearing before an ALJ.” 42 C.F.R. § 498.5(1)(2). Ifa supplier does not request and
receive reconsideration of an initial determination, then the initial determination is
“binding.” 42 C.F.R. § 498.20(b). Only reconsidered determinations related to the denial
or revocation of billing privileges are eligible for ALJ review and I do not have authority
to inquire into a Medicare contractor’s determination whether there is good cause for the
late filing of a request for reconsideration. Better Health Ambulance, DAB No. 2475, at
4 (2012); Denise A. Hardy, D.P.M, DAB No. 2464, at 4 (2012); Hiva Vakil, MD., DAB
No. 2460, at 5 (2012) (noting that “the regulations plainly require that CMS or one of its
contractors issue a ‘reconsidered determination’ before the affected party is entitled to
request a hearing before an ALJ”). Here, WPS never issued a reconsidered determination
concerning the May 4, 2011 applications. Instead, it dismissed Petitioner’s request for
reconsideration as untimely. In the absence of a reconsidered determination from WPS,
the initial denial determination became binding and, therefore, administratively final. See
42 C.F.R. § 498.20(b). As a result, my review is limited to the applications filed in May
2012, and Petitioner’s earlier applications are not relevant to the decision in this case.
II. Conclusion

WPS’s determination that Petitioner’s effective date of enrollment is May 21, 2012, with
a 30-day retrospective billing period commencing on April 21, 2012, is affirmed.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

James O. Boothe
(OI File No.: 2-08-40329-9),

Petitioner,
v.
The Inspector General.
Docket No. C-12-1289
Decision No.: CR2770

Date: May 1, 2013

DECISION

The Inspector General (1.G.) of the Department of Health and Human Services notified
James O. Boothe (Petitioner) that he was being excluded from participation in Medicare,
Medicaid, and all other federal health care programs for a minimum period of five years
pursuant to 42 U.S.C. § 1320a-7(a)(1). Petitioner appealed. I find that the LG. has a
basis for excluding Petitioner from program participation and that the five-year exclusion
is mandated by law.

I. Background

By letter dated August 31, 2012, the I.G. notified Petitioner that he was being excluded
from Medicare, Medicaid, and all federal health care programs for a minimum period of
five years pursuant to 42 U.S.C. § 1320a-7(a)(1). LG. Exhibit (Ex.) 1. The I.G. advised
Petitioner that the exclusion was based on his conviction “in New York County Supreme
Court of the State of New York, of a criminal offense related to the delivery of an item or
service under the Medicare or a State health care program, including the performance of
management or administrative services relating to the delivery of items or services, under
any such program.” I.G. Ex. | at 1. Petitioner, represented by counsel, timely filed his
September 14, 2012 request for hearing (RFH) with the Departmental Appeals Board,
Civil Remedies Division (CRD). Subsequently, this case was assigned to me for hearing
and decision.

On October 25, 2012, I convened a telephonic prehearing conference, the substance of
which is summarized in my Order and Schedule for Filing Briefs and Documentary
Evidence (Order) dated November 1, 2012. See 42 C.F.R. § 1005.6. Pursuant to the
Order, the LG. filed a brief (I.G. Br.) on November 29, 2012, with LG. Exs. 1 through 5.
On January 3, 2013, Petitioner filed a brief (P. Br.), P. Exs. 1 and 2, and an objection to
1.G. Exs. 2 and 3. The L.G. responded to the objection on January 14, 2013, and filed a
reply brief (I.G. Reply Br.) and LG. Ex. 6 on January 17, 2013.

On January 23, 2013, I issued a Ruling and Order (Ruling) in which I overruled
Petitioner’s objections to I.G. Exs. 2 and 3, provided Petitioner with the opportunity to
file a supplemental response to those exhibits and time to file an objection to I.G. Ex. 6,
and ordered both parties to submit supplemental briefs on a legal issue by February 20,
2013. On February 5, 2013, Petitioner stated that he would not file a supplemental
response to I.G. Exs. 2 and 3, but did file an objection to I.G. Ex. 6. Further, on that date,
Petitioner’s counsel called and spoke with the CRD attorney assigned to this case and
asserted that the I.G. and Petitioner should not submit supplemental briefs
simultaneously, but that Petitioner should file its brief in response to the I.G.’s brief
because the I.G. has the burden of proof. In a February 6, 2013 e-mail message, the CRD
attorney conveyed to the parties I decided not to change the submission date for the
supplemental brief. DAB E-file Record Document # 24 (Email from CRD Attorney to
Petitioner).

On February 15, 2013, the LG. filed a response to Petitioner’s objection to 1.G. Ex. 6 and
submitted I.G. Exs. 7 through 9. On February 20, 2013, Petitioner filed a reply to the
1.G.’s response to Petitioner’s objection to I.G. Ex. 6, an objection to LG. Ex. 9, anda
Response to Supplemental Briefing. Later on that same date, the I.G. submitted its
supplemental brief and I.G. Ex. 10. On March 4, 2013, the I.G. filed a response to
Petitioner’s objection to I.G. Ex. 9.

IL. Evidentiary Objections

As part of the exchange of briefs and evidence that I ordered in this case (Order at 4), the
1.G. submitted five exhibits (I.G. Exs. 1-5) and Petitioner submitted two exhibits (P. Exs.
1-2). Petitioner filed an objection to I.G. Exs. 2 and 3, which I overruled. Ruling at 2.
The L.G. did not object to either of Petitioner’s exhibits. Further, Petitioner did not object
to I.G. Ex. 10. Therefore, I admit I.G. Exs. 1-5 and 10, and P. Exs. 1-2 into the record.
For the reasons stated below, I exclude I.G. Exs. 6-9 from the record.
The LG. filed I.G. Ex. 6 with its reply brief to Petitioner’s exchange. I.G. Ex. 6 is an
August 2008 affirmation by a prosecutor involved in the criminal case that underlies the
present exclusion action. This affirmation was originally submitted to the state court in
response to various motions that Petitioner made to that court. The I.G. submitted it
because the prosecutor avers to certain facts, laws, and policies that the I.G. believes will
elp it meet its burden of proof in this case. Further, in response to Petitioner’s objection
to LG. Ex. 6, the LG. submitted Ex. 7 (a memorandum of law that accompanied the
affirmation) and Ex. 8 (the decision of the court related to affirmation and memorandum).

Petitioner filed a written objection to I.G. Ex. 6, and also a reply to the I.G.’s response to
Petitioner’s objection. Petitioner argued that I.G. Ex. 6 was not relevant or material
because the facts stated by the prosecutor in that 2008 affirmation do not reflect the
ultimate outcome of the criminal case several years later. Further, Petitioner
characterized much of what the prosecutor wrote as merely her opinion because she often
failed to provide citation for her positions. Petitioner also argued that I.G. Exs. 7 and 8
did not cure the deficiencies in I.G. Ex. 6.

I agree with Petitioner that I.G. Ex. 6 has very limited relevance to this proceeding
because the affirmation significantly predates the final conviction in Petitioner’s case and
relates primarily to a variety of issues that have no bearing here. Although LG. Ex. 6,
along with the closely related IG. Exs. 7 and 8, have some limited probative value, that
value is easily outweighed by the risk confusion that they have the potential to cause. See
42 CFR. § 1005.17(d).

Further, the I.G. submitted I.G. Exs. 6-8 after the date on which the I.G. was to submit its
exchange (i.e., brief, proposed exhibits, proposed witnesses). Order at 3-4; P. Br. at 9.
1.G. Exs. 6-8 do not appear to be rebuttal evidence, see 42 C.F.R. § 1005.17(h), and the
1.G. did not characterize those documents as such in its reply brief. In fact, the I.G. did
not request leave to submit these untimely exhibits and did not provide a statement as to
the reason they were submitted late. The regulation provides that “[i]f at any time a party
objects to the proposed admission of evidence not exchanged in accordance with [an
administrative law judge’s [order], the [administrative law judge] will determine whether
the failure to comply [with the order] should result in the exclusion of such evidence.”
42 C.F.R. § 1005.8(b)(1). Furthermore, unless an administrative law judge finds
“extraordinary circumstances justified the failure to timely exchange,” then the
administrative law judge must exclude the evidence. Id. § 1005.8(b)(2).

In the present case, the I.G. provided no reason why LG. Ex. 6 was submitted late.
Further, the submission of I.G. Exs. 7 and 8 resulted from the submission from I.G. Ex. 6;
therefore, these exhibits suffer from the same defect as I.G. Ex. 6. Without a showing of
exceptional circumstances, I must exclude I.G. Exs. 6-8. Therefore, Petitioner’s
objection is sustained.
The I.G. also submitted I.G. Ex. 9 at the time it submitted Exs. 7 and 8. I.G. Ex. 9 isa
recently signed affirmation from a criminal prosecutor who was involved in Petitioner’s
criminal proceeding. The affirmation provides a detailed account of Petitioner’s criminal
case from beginning to end. Petitioner objected to this exhibit as an attempt by the I.G. to
obfuscate the issues in this case. Petitioner also requested that certain portions of the
exhibit be stricken.

In light of Lyle Kai, R Ph., 1.G. Ex. 9 appears relevant. DAB No. 1979 (2005)
(declaration by prosecutor summarizing criminal conduct accepted as evidence to
establish nexus). However, this exhibit is untimely, and the I.G. did not file a motion or
provide a reason for its late filing. There is also no reason to conclude that this
affirmation is submitted as rebuttal evidence. Further, the I.G. indicated that it did not
have any witnesses to offer in this proceeding and did not request a hearing. I.G. Br. at 9.
Although I can accept written testimony, the I.G. did not request that I admit I.G. Ex. 9 as
written direct testimony or provide Petitioner with notice that he could seek to cross-
examine the L.G.’s witness. 42 C.F.R. § 1005.16(b). The requirement to exclude late
filed exhibits also applies to “any written statements that the party intends to offer in lieu
of live testimony ....” Jd. § 1005.8(a), (b). Because Petitioner has objected to 1.G. Ex. 9
and I have no reason to conclude that there were exceptional circumstances for its late
submission, I must exclude this exhibit. Zd. § 1005.8(b)(2). Therefore, Petitioner’s
objection is sustained.

III. Sanction for Failing to Comply with Order

Following the exchange of briefs and exhibits in this matter, I ordered the parties to
simultaneously file a supplemental brief on a purely legal issue. Ruling at 3. Petitioner’s
lead counsel, Gregory J. Naclario, contacted the CRD attorney assisting on this case and
indicated that simultaneous briefing had the effect of shifting the burden of proof in this
case to Petitioner and that Petitioner should be permitted to file a brief in response to the
1.G. rather than simultaneously. The CRD attorney notified Mr. Naclario and the LG.’s
counsel that I would not change the briefing schedule because the supplemental brief
involved only a narrow issue of law and, therefore, there was no burden shifting to the
Petitioner. Further, the parties were notified that once they had filed their brief, they
could request to file a reply brief if the parties believed it was necessary. Mr. Naclario
acknowledged receipt of my ruling on his request. DAB E-file Record Document # 24
(Email from Petitioner to CRD Attorney).

On the day the supplemental brief was due, both of Petitioner’s attorneys (i.e., Mr.
Naclario and John J. Cooney) signed and filed a document entitled Petitioner’s Response
to Supplemental Briefing, in which Petitioner “respectfully decline[d]” what Petitioner
termed my “request” to file a supplemental brief. Petitioner based its position on the
theory that it somehow improperly shifted the burden of proof in this case. However,
Petitioner requested that he be permitted to file a reply brief to the yet unfiled I.G. brief.

Petitioner’s request to file a reply brief is denied. I provided Petitioner an opportunity to
request a reply brief, but only once he filed his supplemental brief. Petitioner did not file
a supplemental brief. Therefore, Petitioner abandoned the right to request the opportunity
to reply to the I.G.’s brief.

Petitioner was fully aware that I ordered, not requested, the filing of briefs by both parties
on the same date and that I previously denied Petitioner’s motion to permit him to file his
brief in response to the I.G.’s brief. To allow Petitioner to file a reply brief now would
reward Petitioner’s contumacious conduct and directly undermine this tribunal’s
authority to regulate the course of this proceeding. See, e.g.,42 C.F.R. § 1005.4(b)(8).
The regulations contemplate such a scenario and provide administrative law judges with
the authority to “sanction a person, including any party or attorney, for failing to comply
with an order. ...” Id. § 1005.14(a); see also id. § 1005.4(b)(8) (administrative law
judges have authority to regulate the conduct of representatives and parties).

A sanction imposed under the regulations “will reasonably relate to the severity and
nature of the failure or misconduct,” and may include “[p]rohibiting a party from . . .
supporting a particular claim or defense.” Jd. § 1005.14(a). Denying Petitioner’s motion
to file a reply brief is directly related to Petitioner’s contumacious conduct and is the least
severe sanction that can be imposed to uphold the integrity of the administrative
adjudicatory process.

IV. Decision on the Written Record

In their exchanges, both parties indicated that an in-person hearing was unnecessary and
that they did not offer any witnesses. LG. Br. at 9; P. Br. at 2. Further, neither party
requested summary judgment. See 42 C.F.R. § 1005.4(b)(12). Therefore, the record is
now closed and this decision is rendered based on the written record.

V. Issue

The only issue in this case is whether the I.G. has a basis for excluding Petitioner for five
years from participating in Medicare, Medicaid, and all other federal health care
programs, pursuant to 42 U.S.C. § 1320a-7(a)(1). See 42 C.F.R. § 1001.2007(a).

VI. Findings of Fact, Conclusions of Law, and Analysis’

The Secretary of Health and Human Services must exclude from participation in any
federal health care program “[a]ny individual or entity that has been convicted of a
criminal offense related to the delivery of an item or service under subchapter XVIII of
this chapter or under any State health care program.” 42 U.S.C. § 1320a-7(a)(1).

' My findings of fact and conclusions of law are set forth in italics and bold font.
A. Petitioner pled guilty to Offering a False Instrument for Filing in the second
degree in the Supreme Court of the State of New York.

HealthFirst, PHSP, Inc. (HealthFirst) is a New York based Medicaid managed care
insurance program. P. Br. at 5. In 2001, Petitioner was hired as a consultant at
HealthFirst, but in 2002 became its Chief Operating Officer and Executive Vice President
of Sales. 1.G. Ex. 2 at 1. On May 6, 2008, Petitioner was indicted based on various
alleged violations of law. LG. Ex. 3. Relevant to this case, Count 7 of the indictment
was Offering a False Instrument for Filing in the first degree, in violation of section
175.35 of the New York State Penal Law. I.G. Ex. 3 at 8. On September 30, 2011,
Petitioner pled guilty to the lesser-included misdemeanor offense of Offering a False
Instrument for Filing in the second degree.” I.G. Ex. 4; P. Br. at 6. Specifically,
Petitioner pled guilty to knowingly submitting to the “New York State Department of
Health the HealthFirst PHSP, Inc. May 2003 Medicaid Managed Care Marketing Plan,
which falsely represented that HealthFirst PHSP, Inc.’s marketing representatives were
being compensated in accordance with the Marketing Guidelines in the Medicaid
Managed and Family Health Plus Contracts.” I.G. Ex. 4 at 5. The trial court accepted the
plea agreement and sentenced Petitioner to one year of conditional discharge. 1.G. Ex. 5
at 1.

B. Petitioner was convicted of a criminal offense for the purposes of 42 U.S.C.
§ 1320a-7(a)(1).

Under 42 U.S.C. § 1320a-7(a)(1), Petitioner must be “convicted of a criminal offense”
before the LG. excludes him. The statute defines “convicted” to include “when a plea of
guilty... by the individual . . . has been accepted by a Federal, State, or local court.”

42 U.S.C. § 1320a-7(i)(3); see 42 C.F.R. § 1001.2. Here, the Supreme Court of the State
of New York accepted Petitioner’s guilty plea to a misdemeanor offering of a false
instrument for filing. LG. Ex. 5 at 1. Petitioner concedes that he was convicted of a
crime. P. Br. at 1. Accordingly, I conclude that Petitioner was convicted of a criminal
offense for the purposes of 42 U.S.C. § 1320a-7(a)(1).

> Petitioner highlights throughout his brief that the offense for which he was convicted did
not involve intent to defraud. Petitioner also acknowledges, as he must, that unlike

42 U.S.C. § 1320a-7(a)(3), which specifically refers to fraud, section 1320a-7(a)(1) does
not require the conviction be related to fraud. See P. Br. at 10. Therefore, that
Petitioner’s criminal offense does not include intent to defraud is not relevant to this
matter.
C. Petitioner must be excluded under 42 U.S.C. § 1320a-7(a)(1) because his
conviction was for an offense related to the delivery of an item or service
under a State health care program.

Petitioner’s primary argument in opposition to exclusion is that the “evidence does not
show that his conviction is related to the delivery of an item or service under Medicare or
a State health care (a State Medicaid) program.” P. Br. at 5. After careful review of the
record, I disagree.

The I.G. must exclude an individual from participation in any federal health care program
if the individual was convicted under federal or state law of a criminal offense related to
the delivery of an item or service under the Medicare program or a State health care
program. 42 U.S.C. § 1320a-7(a)(1). The relevant regulation further explains that the
exclusion includes “the performance of management or administrative services relating to
the delivery of items or services under [Medicare or a State health care] program.”

42 C.F.R. § 1001.101(a). Although the term “related to” is not defined in the statute, it is
well established “that an offense is ‘related to’ the delivery of an item or service under a
covered program if there is a. . . nexus between the offense and the delivery of an item or
service under the program.” James Randall Benham, DAB No. 2042 (2006) (internal
citations omitted); Cf: Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012)
(describing the phrase “related to” in another part of section 1320a-7 as “deliberately
expansive words,” “the ordinary meaning of [which] is a broad one,” and one that is not
subject to “crabbed and formalistic interpretation”) (internal quotes omitted). Therefore,
to determine whether Petitioner’s offense is related to the delivery of an item or service
under Medicaid,’ it is necessary to examine the underlying conviction.

HealthFirst is a Medicaid managed care insurance program pursuant to a Medicaid
Managed Care and Family Health Plus Contract (contract) with the New York
Department of Health. I.G. Exs. 2 at 1-2; 10. In general, marketing by such managed
care programs is regulated. See 42 U.S.C. § 1396u-2(a)(5), (d)(2); 42 C.F.R. §§ 438.10,
438.104. Specifically, under the contract, HealthFirst was required to have a marketing
plan approved by the New York Department of Health and local departments of social
services. I.G. Ex. 10 at 70. The marketing plan was required to be consistent with the
marketing guidelines included in Appendix D of the contract. I.G. Ex. 10 at 70, 145-56.
The marketing guidelines included a provision requiring that HealthFirst “not offer
financial or other kinds of incentives to Marketing representatives that uses the number of
Enrollees as a factor in compensation.” I.G. Ex. 10 at 154; see also LG. Ex. 2 at 2.
However, “from May 9, 2003 to October 7, 2003, [Petitioner] caused HealthFirst to

* The Medicaid program is a “State health care program” for purposes of exclusion. See
42 C.F.R. § 1001.2 (defining “Medicaid” as “medical assistance provided under a State
plan approved under Title XIX of the [Social Security] Act”).
submit to various public agencies three Marketing Plans . . . which falsely reported that
HealthFirst marketing representatives were being compensated in accordance with
Marketing Guidelines in the . . . contract[s].” I.G. Ex. 2 at 2. Specifically, Petitioner pled
guilty that he:

[K]nowingly submitted and caused to be submitted to the New York State
Department of Health, the HealthFirst PHSP, May 2003 Medicaid Managed
Care Marketing Plan, which falsely represented that HealthFirst, PHSP,
Inc.’s marketing representatives would be compensated in accordance with
the Marketing Guidelines in the Medicaid Managed Care and Family
Health Plan contracts.

LG. Ex. 4 at 5.

Petitioner argues that during his plea and sentencing hearing he was not required to admit
that HealthFirst would not have obtained the Medicaid contract if it had not submitted a
marketing plan or that Petitioner was required to admit that the marketing plan was
related to the delivery of an item or service under Medicaid. P. Br. at 7. However, in his
hearing request, Petitioner states “HealthFirst was required to have its ‘Marketing Plans’
approved by the New York State Department of Health as well as local department of
social services in the affected county” and that “[t]he Marketing Plans need[ed] to meet
the New York State ‘Marketing Guidelines’ that HealthFirst did not pay its marketing
representatives any incentive to enroll individuals in HealthFirst.” RFH at 1-2. Thus,
Petitioner acknowledges that pursuant to its contract, HealthFirst was required to have an
approved marketing plan, which met the requirement in Appendix D of the contract. As
such, when HealthFirst compensated its employees in a manner inconsistent with the
contract, it was in violation of its contract with the New York State Department of
Health, a contract which allowed HealthFirst to operate as a Medicaid managed care
insurance program and bill Medicaid for items and services rendered to its enrollees. See
1G. Ex. 10; see also 42 U.S.C. § 1396u-2(a)(1)(A); 42 C.F.R. § 438.6.

According to the terms of contract, sanctions for marketing infractions include
prohibiting the plan from conducting any marketing activities, suspending new
enrollments, or termination of the contract. I.G. Ex. 10 at 71; Petitioner’s Response to
Supplemental Briefing at 2; see also 42 U.S.C. § 1396u-2(e)(1)(A)(iv); 42 C.F.R.

§ 438.700(b)(4)(2001) (intermediate sanctions may be imposed where the managed care
organization “misrepresents or falsifies information that it furnishes to CMS or to the
State”). The purpose of the sanctions is “to protect the interests of the [Medicaid]
program and its clients.” I.G. Ex. 10 at 70. Moreover, each of these sanctions has the
effect — although to varying degrees — of restricting HealthFirst’s ability to provide
services to Medicaid beneficiaries. For example, a managed care organization prohibited
from engaging in marketing activities would be restricted from participating in events
such as health fairs and community outreach programs or engaging in any media

campaign. See I.G. Ex. 10 at 151. The nexus between Petitioner’s criminal offense and
the delivery of program-related health care items and services is clear and non-attenuated.
The submission of the fraudulent marketing plan permitted HealthFirst to obtain new
enrollees, provide unhindered health care items and services to Medicaid beneficiaries,
and to continue to bill Medicaid for those items and services. A sufficient nexus has been
found in other cases involving criminal conduct related to marketing of Medicaid
services. See Sabina E. Acquah, DAB CR480 (1997) (finding that illegally obtained
leads to market services has a nexus to Medicaid because the conduct was intended to
ultimately result in billing Medicaid); see also Vinita R. Warren, DAB CR423, at 6-7
(1996) (conviction for obtaining marketing leads for a Medicaid HMO through bribery
had a sufficient nexus to the delivery of items of services under Medicaid).

In the present matter, the nexus is stronger based on the fact that the New York
Department of Health sanctioned HealthFirst for its submission of the fraudulent
marketing plan. See Petitioner’s Response to Supplemental Briefing at 2 (HealthFirst
was suspended from marketing activities for four months); see also 1.G. Reply at 3 (the
New York Department of Health suspended HealthFirst’s marketing activities and new
enrollments). Petitioner contends that because the sanction imposed was suspension of
marketing activities, “the facts clearly show that the rejection of the marketing plan did
not result in rejection of the contract.” Petitioner’s Response to Supplemental Briefing at
2. Whether the contract was or was not terminated is not dispositive. The fact that
HealthFirst was sanctioned at all supports the nexus because, as previously stated, the
purpose of the sanctions is “to protect the interests of the [Medicaid] program and its
clients.” I.G. Ex. 10 at 70. As the I.G. states, “Petitioner’s submission of a fraudulent
marketing plan, the basis for his conviction, was a step in the chain of events leading to
delivery of Medicaid items or services to Medicaid beneficiaries ... .” I.G. Reply at 4.

Finally, Petitioner notes that the New York Office of the Medicaid Inspector General
(NYOMIG), although initially excluding Petitioner, ultimately decided to reduce the
sanction of exclusion to censure. Petitioner argues NYOMIG’s decision to not exclude
Petitioner supports the proposition that NYOMIG did not believe Petitioner’s conviction
related to the furnishing of medical care, services or supplies. I disagree with Petitioner’s
analysis. The letter from the NYOMIG indicates that Petitioner was excluded based on

is indictment for a felony offense related to “‘participation in the performance of
management or administrative services relating to furnishing medical care, services or
supplies ....” P. Ex. 2 at 1; 18 New York Code of Rules and Regulations (NYCRR) §
515.7(b)(2). The pertinent regulation also states that the department can take immediate
action against an individual convicted of a crime if the conviction relates to or results
from “participation in the performance of management or administrative services relating
to furnishing medical care, services or supplies ....” Jd. § 515.7(c)(2). In this case, the
NYOMIG decided to reduce the sanction of exclusion to censure. However, the authority
to impose a less severe sanction is granted only where the NYOMIG is “authorized to
exclude a person under this section.” Jd. § 515(f). Therefore, the NYOMIG’s decision to

10

censure Petitioner means that the NYOMIG concluded that Petitioner’s conviction was
one for which it could impose an exclusion or, in other words, a conviction which
“relates to participation in the performance of management or administrative services
relating to furnishing medical care, services or supplies... .” Jd. § 515.7(b)(2), (c)(2).
This language is strikingly similar to the language in 42 C.F.R. § 1001.101(a), which
requires the I.G. to exclude an individual “convicted of a criminal offense related to. . .
the performance of management or administrative services relating to the delivery of
items or services under [Medicare or a State health care] program.” Therefore, the
NYOMIG’s action is consistent with the L.G.’s conclusion that Petitioner is subject to
exclusion under 42 C.F.R. § 1001.101. However, unlike the NYOMIG, the I.G. does not
have discretion to impose less than a five-year exclusion. 42 C.F.R. § 1001.102(a).

Based on the foregoing, I conclude Petitioner’s conviction is related to the delivery of
services under a State health care program under section 1320a-7(a)(1).

D. Petitioner must be excluded for the statutory minimum of five years under
42 U.S.C. § 1320a-7(c)(3)(B).

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C.
§ 1320a-7(a)(1), Petitioner must be excluded for a minimum period of five years.
42 US.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).

IV. Conclusion

For the foregoing reasons, I affirm the I.G.’s determination to exclude Petitioner from
participating in Medicare, Medicaid, and all federal health care programs for the statutory
five-year minimum period pursuant to 42 U.S.C. § 1320a-7(a)(1), (c)(3)(B).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Clifton Howell, M.D.,
(OI File No. H-11-41768-9),
Petitioner,

v.

The Inspector General.
Docket No. C-13-23
ALJ Ruling No. 2013-9

Date: April 29, 2013

ORDER OF DISMISSAL

I dismiss Petitioner’s request for hearing because it fails to raise an issue which may
properly be addressed in a hearing. 42 C.F.R. § 1005.2(e)(4).

I. Background

The Inspector General (I.G.) of the Department of Health and Human Services, by letter
dated September 28, 2012, notified Petitioner Clifton Howell, M.D. that he was being
excluded from Medicare, Medicaid, and all other federal health care programs for the
minimum statutory period of five years pursuant to 42 U.S.C. § 1320a-7(a)(1). See

42 C.F.R. § 1001.101(a). The I.G. advised Petitioner that the exclusion was based on his
conviction in the Hudson County Superior Court of the State of New Jersey of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program, including the performance of management or administrative services relating to
the delivery of items or services under any such program.
On October 6, 2012, Petitioner filed a timely request for hearing. In his request,
Petitioner stated that the basis for his request was that the “length of the exclusion is
unreasonable.”

I was assigned to hear and decide the case on October 22, 2012. I initially set a pre-
hearing conference for November 7, 2012, but rescheduled it at Petitioner’s request.
During the rescheduled December 12, 2012 conference, | first advised Petitioner that he
had the right to be represented by an attorney at his own expense. Petitioner indicated
that he had consulted with an attorney but had not yet hired one. Further, I explained to
the parties that the only issue I am authorized to hear and decide in Petitioner’s case is
whether the I.G. had a basis for excluding Petitioner from participation in Medicare,
Medicaid, and other federal health care programs. | stated that an exclusion authorized
under 42 U.S.C. § 1320a-7(a)(1) must be for a minimum of five years and an
administrative law judge does not have the authority to consider whether or not the five-
year length of the exclusion is reasonable. 42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R.

§ 1001.2007(a)(2).

The I.G. requested to be allowed to file a motion to dismiss asserting that Petitioner had
not requested a hearing on an issue I am authorized to hear. I offered to permit Petitioner
to verbally amend his request for hearing to dispute the issue as to whether there was a
basis for his exclusion. I informed Petitioner that if he made such an amendment I would
set a briefing schedule and adjudicate the case on the merits. Petitioner did not verbally
amend his request for hearing, but asked for an opportunity to obtain counsel. I set a
briefing schedule for the I.G.’s motion to dismiss. In order to allow Petitioner sufficient
time to consult and retain an attorney, I gave Petitioner until March 7, 2013 to respond to
the I.G.’s motion to dismiss.

On January 15, 2013, the LG. filed his “Motion to Dismiss for Failure to Raise an
Appealable Issue” and supporting brief. The I.G. stated that the only issue raised by
Petitioner was one that I could not adjudicate. 42 C.F.R. § 1005.2(e)(4). On March 7,
2013, Petitioner requested additional time to retain counsel. On March 14, 2013, I
granted Petitioner an extension until April 8, 2013 to respond to the motion to dismiss.

Petitioner filed a response on April 8, 2013. Petitioner noted that he had not been able to
find an attorney to represent him. Petitioner admitted that he pled guilty to one count of
Medicaid fraud. Petitioner argues, however, that his exclusion should have “started at the
beginning of [his] sentence . . . .” and closer in time to his criminal conviction.

On April 9, 2013, the I.G. again moved to dismiss Petitioner’s hearing request because
Petitioner had failed to raise an issue that may be addressed at hearing.

IL. Discussion

The issue before me is whether Petitioner’s hearing request raises an issue that is within
my jurisdiction to adjudicate. Petitioner has never disputed the basis for his exclusion
(i.e., that he was convicted of a criminal offense requiring exclusion under 42 U.S.C.

§ 1320a-7(a)(1), and admits that he was convicted of Medicaid fraud, a basis for
exclusion under 42 U.S.C. § 1320a-7(a)(1). Because the I.G. has imposed the statutory
minimum five-year exclusion, a dispute as to the basis for the exclusion is the only issue I
can entertain. I cannot review the reasonableness of an exclusion of five years.

42 CFR. § 1001.2007(a)(1)-(2).

Further, I have no jurisdiction to change the effective date of the exclusion. Kailash C.
Singhvi, M.D., DAB No. 2138 (2007). The regulations indicate that an exclusion is
effective 20 days from the date of the exclusion notice, 42 C.F.R. § 1001.2002(b);
owever, the regulations do not specify when the I.G. must issue an exclusion notice.
Seide v. Shalala, 31 F. Supp. 2d 466, 469 (E.D. Pa. 1998). It is well-settled that neither
administrative law judges nor the Departmental Appeals Board has “the authority to
review the timing of the I.G.’s decision to impose an exclusion where the I.G. has a legal
basis to exclude.” Kris Durschmidt, DAB No. 2345, at 3 (2010) (citing Singhvi, DAB
No. 2138). Administrative law judges also do not have the authority to alter the effective
date of the exclusion by retroactively changing the beginning date of an exclusion. Lisa
Alice Gantt, DAB No. 2065, at 2-3 (2007); see also 57 Fed. Reg. 3,298, 3,325 (Jan. 29,
992) (stating that an administrative law judge is not authorized to modify the date of the
commencement of the exclusion identified in the notice of exclusion). The regulations
are binding on me and I must follow them. 42 C.F.R. §§ 1001.1(b), 1005.4(c)(1).

II. Conclusion

Because Petitioner expressly concedes that there is a basis for the imposition of an
exclusion, is unable to dispute the length of the exclusion, and has objected to the
effective date of the exclusion (an issue over which I have no jurisdiction), I must dismiss
Petitioner’s hearing request because “‘it fails to raise any issue which may properly be
addressed in a hearing.” 42 C.F.R. § 1005.2(e)(4).
This dismissal is final and not subject to further administrative appeal.

It is so ordered.

/s/
Scott Anderson
Administrative Law Judge

' Parties may only appeal an administrative law judge’s initial decision (42 C.F.R.

§ 1005.20), and the LG. may appeal an interlocutory ruling that a hearing request was
timely. 42 C.F.R. § 1005.21(a), (d); Departmental Appeals Board, Guidelines — In Cases
to which Procedures in 42 C.F.R. Part 1005 Apply; see also 57 Fed. Reg. 3,298, 3,327
(Jan 29, 1992) (stating that administrative appeals of administrative law judge decisions
have been limited by regulation). There is no administrative appeal from a dismissal of a
hearing request. 55 Fed. Reg. 12,205, 12,213 (Apr. 2, 1990) (“If [a] party fails to file a
timely request for a hearing, or thereafter withdraws or abandons his or her request for a
hearing, the [administrative law judge] is required to dismiss the hearing request. In such
a case, the CMP or exclusion would become final with no further appeal permitted)
emphasis added); see also 57 Fed. Reg. 3,298, 3,325 (Jan. 29, 1992) (adding as a ground
for dismissal in 42 C.F.R. § 1005.2(e) a party’s failure to raise any issue that may
properly be addressed in a hearing).


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

Howard Morris Weiss
(O.1. File Number H-11-42449-9),

Petitioner,
v.
Inspector General,
U.S. Department of Health and Human Services,
Respondent.
Docket No. C-13-141
Decision No. CR2769
Date: April 26, 2013
DECISION
Petitioner, Howard Morris Weiss, is excluded from participation in Medicare, Medicaid,
and all federal health care programs pursuant to section 1128(a)(1) of the Social Security
Act (Act) (42 U.S.C. § 1320a-7(a)(1)), effective October 18, 2012. There is a proper
basis for exclusion. Petitioner’s exclusion for the minimum period! of five years is
mandatory pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a- 7(c)(3)(B)).
I. Background
The Inspector General (I.G.) notified Petitioner by letter dated September 28, 2012, that

he was being excluded from participation in Medicare, Medicaid, and all federal health
care programs for the minimum statutory period of five years pursuant to section

' Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after
the period of exclusion expires. Reinstatement is not automatic upon completion of the
period of exclusion.
1128(a)(1) of the Act. The basis cited for Petitioner’s exclusion was his conviction in the
Superior Court of California for Los Angeles County of a criminal offense related to the
delivery of an item or service under Medicare or a state health care program.

Petitioner timely requested a hearing (RFH) on November 20, 2012. The case was
assigned to me for hearing and decision on November 26, 2012. On December 12, 2012,
I convened a prehearing conference by telephone, the substance of which is memorialized
in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary
Evidence (Prehearing Order) issued on the same date. During the prehearing conference,
Petitioner did not waive an oral hearing. The I.G. requested to file a motion for summary
judgment prior to further development of the case for hearing and I set a briefing
schedule.

The LG. filed a motion for summary judgment and supporting brief (1.G. Br.) on January
10, 2013, with I.G. exhibits (I.G. Exs.) | through 15. Petitioner e-filed a response in
opposition to the I.G. motion (P. Response) on February 12, 2013, with Petitioner’s
exhibits (P. Exs.) 1 through 6. The LG. filed its reply brief (I.G. Reply) on February 26,
2013. LG. Exs. | through 3 and 6 through 15, and P. Exs. 1through 6 are admitted and
considered as evidence for purposes of summary judgment.

On February 12, 2013, Petitioner filed objections (P. Objections) to I.G. Exs. 4 and 5,
citing 42 C.F.R. § 1005.17(c) and arguing, inter alia, that the exhibits are not relevant, are
more prejudicial than probative, may confuse the issues, may result in undue delay, or
may be cumulative. The I.G filed a response on February 26, 2013, arguing that both
exhibits should be admitted. I sustain Petitioner’s objection to LG. Ex. 4. LG. Ex. 4isa
document signed by Thomas Donohue, Special Agent for the California Department of
Justice Bureau of Medi-Cal Fraud and Elder Abuse, titled “Declaration Made Pursuant to
section 2015.5 C.C.P. In Support Of And Issuance Of Arrest Warrant” purportedly
related to Petitioner’s criminal prosecution. | first note that the purported declaration
does not satisfy the requirements of 28 U.S.C. § 1746, which prescribes the format and
attestation for unsworn declarations, certificates, verifications, or statements to be used in
any proceeding under laws of the United States. Furthermore, it is clear from the face of
the document that it was offered to the criminal court to show that there was probable
cause to believe that Petitioner and others committed the offenses alleged in the Felony
Complaint for Arrest Warrant (I.G. Ex. 3) (Felony Complaint). The I.G. has not shown
that the specific allegations of the declaration were proven by at least a preponderance of
the evidence or that Petitioner admitted to any of the allegations during the underlying
criminal proceedings as part of the plea inquiry or the plea agreement. Thus, the I.G. has
not shown that the allegations in the declaration are relevant to my consideration of the
1.G.’s motion for summary judgment. Although the Federal Rules of Evidence do not
apply in this proceeding, it is a fundamental rule of evidence that “[w]hen the relevance
of evidence depends on whether a fact exists, proof must be introduced sufficient to
support a finding that the fact does exist.” Fed. R. Evid. 104(b) (emphasis added).

Accordingly, out of an abundance of caution, I.G. Ex. 4 is not admitted into the record or
considered as evidence for purposes of summary judgment. 42 C.F.R. § 1005.17(c), (d).

Petitioner’s objection to I.G. Ex. 5 is sustained in part and overruled in part. 1.G. Ex. 5 is
a declaration of Vincent N. Bonotto, Deputy Attorney General (DAG) at the Bureau of
Medi-Cal Fraud and Elder Abuse, the prosecutor in Petitioner’s underlying criminal case.
While the declaration constitutes hearsay, that fact alone does not preclude its admission
in this proceeding. 42 C.F.R. § 1005.17(b). Petitioner does not dispute the authenticity
of the document or that the prosecutor has sufficient knowledge about the matters
asserted in the declaration. The prosecutor has sufficient knowledge of the criminal
proceedings to make the factual assertions he does regarding the procedural history of the
case. The allegations of the declaration that I am admitting as evidence are consistent
with court records that are admitted without objection by Petitioner and the allegations
are not denied by Petitioner. The declaration, therefore, is reliable and relevant.

Contrary to Petitioner’s arguments, the declaration does not contain evidence regarding
plea negotiations that might be subject to exclusion pursuant to 42 C.F.R. § 1005.17(f).
P. Objections at 3. Rather, the prosecutor simply relates the procedural history of the
criminal case, and that is the purpose for which it is admitted and considered on summary
judgment. I do not accept the assertion in paragraph 6 of LG. Ex. 6 that Petitioner’s
guilty plea in the criminal court was based upon the facts alleged in I.G. Ex. 4, as the
evidence before me on summary judgment does not support that assertion. I also do not
accept the legal opinion of the prosecutor regarding Petitioner’s conviction and its nexus
to Medi-Cal. Specifically, the prosecutor states that Petitioner’s guilty plea “directly
resulted from offenses related to Medi-Cal, a Federal health care program.” I.G. Ex. 13
at § 7 (emphasis added). Whether Petitioner’s conviction was “related to” the delivery of
a health care item or service under Medicare or a state health care program is an issue I
must resolve in deciding this case and the prosecutor’s opinion is not considered.
Accordingly, L.G. Ex. 5 is admitted and considered for purposes of summary judgment
but paragraphs 6 and 7 are stricken.

IL. Discussion
A. Applicable Law
The Act provides, in relevant part:
(a) Mandatory Exclusion. -- The Secretary [of HHS] shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined

in section 1128B(f)):

(1) Conviction of program-related crimes. -- Any individual
or entity that has been convicted of a criminal offense related
to the delivery of an item or service under [Medicare] or
under any State health care program.

Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)). The Secretary has promulgated
regulations implementing this provision of the Act. 42 C.F.R. § 1001.101(a).

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner the right to a
hearing before an administrative law judge (ALJ) and judicial review of the final action
of the Secretary.

The standard of proof in a hearing before an ALJ is a preponderance of the evidence.
42 C.F.R. § 1001.2007(c). Petitioner may not collaterally attack the conviction that
provides the basis for the exclusion. Jd. § 1001.2007(c), (d). Petitioner bears the burden
of proof and the burden of persuasion on any affirmative defenses or mitigating factors,
and the I.G. bears the burden on all other issues. Jd. § 1005.15(b).
B. Issue

The Secretary has by regulation limited my scope of review to two issues:

Whether there is a basis for the imposition of the exclusion; and

Whether the length of the exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1). Whether the length of exclusion is unreasonable is not an
issue in this case, as the five-year exclusion period imposed is the minimum period
specified by Congress and the Secretary. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent findings of fact and
analysis.

1. Petitioner’s request for hearing was timely, and I have jurisdiction.
2. Summary judgment is appropriate in this case.
Petitioner filed his request for hearing within 60 days of the date the I.G. notified
Petitioner of the exclusion. I.G. Ex. 1, at 1; RFH at 1. Petitioner’s request for hearing

was timely filed and preserved Petitioner’s right to review of justiciable issues. 42 C.F.R.
§§ 1001.2007, 1005.2(c). I have jurisdiction.
Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The Secretary has provided by
regulation that a sanctioned party has the right to a hearing before an ALJ and both the
sanctioned party and the LG. have a right to participate in the hearing. 42 C.F.R.

§§ 1001.2007, 1005.2, 1005.3. Either or both parties may choose to waive appearance at
an oral hearing and to submit only documentary evidence and written argument for my
consideration. 42 C.F.R. § 1005.6(b)(5). An ALJ may also resolve a case, in whole or in
part, by summary judgment. 42 C.F.R. § 1005.4(b)(12). Summary judgment is
appropriate and no hearing is required where either: there are no disputed issues of
material fact and the only questions that must be decided involve application of law to the
undisputed facts; or the moving party prevails as a matter of law even if all disputed facts
are resolved in favor of the party against whom the motion is made. A party opposing
summary judgment must allege facts which, if true, would refute the facts relied upon by
the moving party. See, e.g., Fed. R. Civ. P. 56(c); Garden City Med. Clinic, DAB No.
1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628, at 3 (1997) (holding in-person
hearing required where non-movant shows there are material facts in dispute that require
testimony); Thelma Walley, DAB No. 1367 (1992); see also New Millennium CMHC,
DAB CR672 (2000); New Life Plus Ctr., DAB CR700 (2000).

There is no genuine dispute as to any fact material to a determination of this case and,
therefore, summary judgment is appropriate. The undisputed material facts, as discussed
in more detail hereafter, are that: Petitioner pled guilty to one count of grand theft of
funds from the California Health Care Deposit Fund (1.G. Ex. 3 at 2), the funding source
of Medi-Cal (Cal.Welf. & Inst. Code § 14157); Petitioner’s guilty plea was accepted (L.G.
Ex. 2 at 4) resulting in a conviction within the meaning of section 1128(i) of the Act; and
Petitioner paid restitution to the California Health Care Deposit Fund. Petitioner
conceded that he was convicted within the meaning of section 1128(i) of the Act. P. Br.
at 4-6; RFH. Petitioner argues that summary judgment is not appropriate because his
conviction is not program-related as a matter of law and because there are material facts
in dispute related to whether his conviction is program related. The issue that Petitioner
raises, i.e., whether the undisputed facts establish the required nexus between his
conviction and Medi-Cal, is an issue of law that must be resolved against him.
Furthermore, the undisputed material facts satisfy the elements of section 1128(a)(1) of
the Act -- the facts establish that Petitioner was convicted and that there is a nexus
between Petitioner’s conviction and Medi-Cal, which is the California Medicaid program.
The five-year period of exclusion is fixed by law and there are no material issues related
to the reasonableness of that period. Accordingly, summary judgment is appropriate.

3. The offenses to which Petitioner pled guilty; for which the pleas of
guilty were accepted; and, therefore, of which Petitioner was convicted
were related to the delivery of an item or service under Medicare or a
state health care program.
The LG. cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute, the text of which is set forth above, requires that the Secretary
exclude from participation in Medicare or Medicaid any individual or entity: (1)
convicted of a criminal offense, whether a felony or a misdemeanor; and (2) the offense
is related to the delivery of an item or service under Medicare or a state health care
program.

a. Undisputed Facts

Petitioner’s rendition of the material facts in his opposition to the motion for summary
judgment is consistent with the evidence. On March 1, 2010, Petitioner appeared with
counsel in the Superior Court of the State of California, County of Los Angeles, and pled
guilty to Count 1 of a criminal complaint that alleged a felony offense of grand theft. I.G.
Ex. 2 at 5; 1.G. Ex. 6 at 2, 4; P. Ex. 1; P. Br. at 4. Petitioner’s counsel stipulated that
there was a factual basis for the guilty plea but none of the facts were actually stated on
the record. I.G. Ex. 6 at 4. The transcript of the proceeding shows that the plea was
entered pursuant to a plea agreement, apparently only an oral agreement, one term of
which required that Petitioner pay restitution. I.G. Ex. 6 at 3. The transcript also reflects
that Petitioner agreed to a “Harvey waiver” which under California law permits the
imposition of restitution for both the charges for which one is convicted and those related
charges for which one is not convicted. IG. Ex. 6 at 5. Count 1 of the felony compliant
of which Petitioner was convicted on March 1, 2010 pursuant to his guilty plea alleged
grand theft as follows:

From on or about May 1, 2003, through June 6, 2008, in the
County of Los Angeles, State of California, defendants
[including Petitioner], unlawfully took from the State of
California (Health Care Deposit Fund) property of a value in
excess of four hundred dollars ($400), in violation of section
487 of the Penal Code, a felony.

1.G. Ex. 3 at 2. Count 1 also alleged three special allegations that have no impact on this
decision and so need not be set forth in detail. The criminal court judge accepted
Petitioner’s guilty plea; entered a judgment of guilty; and ordered Petitioner to return for
sentencing on March 1, 2011. I.G. Ex. 2 at 4-5; I.G. Ex. 6 at 4-5.

> The Harvey waiver, as discussed in more detail hereafter, is based upon a California
statute that addresses the decision in People v. Harvey, 25 Cal. 3d 754 (1979).
Petitioner gave the State of California three checks totaling $450,000, each payable to the
California Health Care Deposit fund as directed by DAG Bonotto. I.G. Ex. 7 at 2; LG.
Exs. 9-11; P. Ex. 1; P. Br. at 4-5. The sentencing hearing was delayed to March 11,
2011. 1.G. Ex. 2 at 5. At the sentencing hearing, Petitioner pled guilty to a newly added
charge of misdemeanor trespass; he was permitted to withdraw his prior plea of guilty to
Count 1; and all the original counts of the criminal complaint were dismissed. The court
records state under “Court Orders and Findings” that Petitioner was to make restitution of
$450,000 to the victims, the “Department of Justice, Healthcare Deposit Fund, and the
Franchise Tax Board.” I.G. Ex. 2 at 5-7; I.G. Ex. 7.

Petitioner offered other evidence that also shows that there is no dispute as to the material
facts. Petitioner offered a declaration from his attorney in the criminal case, Benjamin
Gluck, who relates that Petitioner strongly contested the validity of the charges. P. Ex. 1.
However, Petitioner entered a plea agreement under which Petitioner promised to pay
$450,000 to the State of California over two years, to plead guilty to Count | of the
criminal complaint, and to plead guilty to a charge of either misdemeanor trespass or
failure to file a tax return at his sentencing hearing. The government promised in the plea
agreement to permit Petitioner to withdraw his guilty plea to Count 1 at sentencing and to
dismiss the original charge in the complaint when Petitioner’s plea of guilty to the
misdemeanor was accepted. Mr. Gluck asserts that Petitioner pled guilty to Count |
without making any admissions relating to the allegations upon which the charge was
based. P. Ex. 1.2 I accept Mr. Gluck’s assertions for purposes of summary judgment
except that the assertion that Petitioner made no admissions when pleading guilty to
Count | is inconsistent with Petitioner’s counsel’s stipulation in court that there was a
factual basis for the guilty plea to Count 1. I.G. Ex. 6 at 4. Mr. Gluck recognized the
apparent inconsistency and acknowledged that the parties stipulated that there was a
factual basis for both Petitioner’s guilty pleas. He asserts, however, that no one
articulated the facts on the record, and that in California state courts, one can stipulate to
a factual basis as a legal matter even when no such facts exist. P. Ex. 1. While Mr.
Gluck’s sworn assertion that in California one can stipulate to nonexistent facts raises an
interesting issue, I need not determine whether the assertion is either credible or correct.
The undisputed facts before me are that Petitioner pled guilty to Count | of the criminal
complaint and stipulated that there was a factual basis for the plea. Whether or not
Petitioner and his counsel falsely stated that there was a factual basis for the guilty plea to
Count 1, is not an issue that I may resolve. I have no authority to review the state court
criminal conviction and Petitioner cannot collaterally attack or retry his conviction before

> P.Ex, 2 is a letter Mr. Gluck sent to the I.G. in the case of Petitioner’s former business
associate who was also the subject of the same charges and also pled guilty to Count 1 of
the criminal complaint. Mr. Gluck’s assertions in the letter are similar in the essentials to
those of his declaration admitted at P. Ex. 1.

me on either substantive or procedural grounds. 42 C.F.R. § 1001.2007(d). In this
forum, Petitioner is bound by his statements and admissions during the criminal
proceeding. I do not accept half-truths, untruths, and misrepresentations. Mr. Gluck
states, and I accept for purposes of summary judgment, that Petitioner was not ordered to
pay money to the Medi-Cal program, rather the plea agreement provided that Petitioner
and the other individual who was also being prosecuted would pay $450,000 as directed
by the California Department of Justice, and it was the Deputy Attorney General who
specified that Petitioner make his checks payable to the California Health Care Deposit
Fund. P. Ex. | at 2.

Petitioner also provided me a July 16, 2012 letter to the I.G. from DAG Bonotto, who
prosecuted the case against Petitioner and his former business associate as well as three
companies. P. Ex. 3. DAG Bonotto states that Petitioner and the others were subject to
investigation for Medi-Cal fraud related to durable medical equipment. They were
subsequently charged by a criminal complaint with Medi-Cal fraud and separate tax
charges for under-reporting income. He states that there was serious dispute about the
fraud charges and whether the conduct at issue actually violated Medi-Cal regulations.*
Petitioner and the state entered a plea agreement, i.e., settlement. DAG Bonotto states
that the plea agreement was reached without resolution of the fraud issue. DAG Bonotto
states that it was agreed that Petitioner and the other defendants would pay restitution to
the Medi-Cal program and the California Franchise Tax Board and they would ultimately
be convicted of a misdemeanor charge. Petitioner elected the misdemeanor offense of
trespass in violation of California Penal Code § 602(0). DAG Bonotto states that the
settlement was without admission of guilt by Petitioner regarding the Medi-Cal fraud
allegations. He also states that it was not intended or contemplated by the parties that the
disposition would result in mandatory exclusion by the I.G. P. Ex. 3. DAG Bonotto’s
letter is consistent with the other evidence of the undisputed facts. Whether or not it was
contemplated or intended that the criminal disposition by the State of California would
result in Petitioner’s mandatory exclusion is not relevant. The Secretary and the I.G.
were not parties to the plea negotiations and there is no argument that they should be
bound by the terms of the plea agreement. Moreover, Congress mandated that the
Secretary implement and enforce section 1128 or the Act and the fact that the parties
failed to consider all possible impacts of their plea negotiations is neither surprising nor
persuasive that Petitioner should avoid the effect of exclusion as mandated by Congress.

* Whether or not DAG Bonotto could have proven the charges beyond a reasonable
doubt does not affect my decision in this case.
b. Analysis

Petitioner entered guilty pleas to two different offenses, grand theft from Medi-Cal and
misdemeanor trespass. His guilty pleas to both the felony and the misdemeanor were
accepted. Pursuant to section 1128(i) of the Act, one is convicted for purposes of
exclusion when a plea of guilty has been accepted by a federal, state, or a local court.
Petitioner concedes that he has a conviction within the meaning of the Act and that the
five-year period is the mandatory minimum. P. Br. at 4-6.

Petitioner opposes summary judgment and his exclusion on grounds that his convictions
were not program related as a matter of law and there are material facts in dispute as to
the nexus between the convictions and Medi-Cal. It is not disputed by Petitioner that on
March 1, 2010 he pled guilty to Count | of the criminal complaint that alleged grand theft
from Medi-Cal. His plea was accepted and, therefore, he was convicted of the offense of
grand theft from Medi-Cal. The conviction of grand theft from Medi-Cal adequately
establishes that Petitioner was convicted of a program related offense. Accordingly, there
is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act for the
minimum period of five years. Although the conviction of grand theft from Medi-Cal
provides the basis for exclusion, I proceed to analyze Petitioner’s misdemeanor
conviction of trespass.

Analysis of Petitioner’s conviction of misdemeanor trespass shows that that conviction
also has a sufficient nexus to the delivery of an item or service under Medi-Cal to be a

basis for exclusion pursuant to section 1128(a)(1). The crime of misdemeanor trespass,
unlike the crime of grand theft from Medi-Cal, was not on its face a crime related to the
delivery of a health care item or service under Medicare or a state health care program.°

> The misdemeanor offense to which Petitioner pled guilty was a violation of Cal. Penal
Code § 602(0), which provides that any person who willfully commits a trespass by any
of the acts described in the section is guilty of a misdemeanor. Section 602 (0) provides
the following description :

(0) Refusing or failing to leave land, real property, or
structures belonging to or lawfully occupied by another and
not open to the general public, upon being requested to leave
by (1) a peace officer at the request of the owner, the owner’s
agent, or the person in lawful possession, and upon being
informed by the peace officer that he or she is acting at the
request of the owner, the owner’s agent, or the person in
lawful possession, or (2) the owner, the owner’s agent, or the
person in lawful possession. The owner, the owner’s agent,
(Footnote continued next page.)

10

However, the Board has long held that the statutory terms of an offense do not control
whether that offense is “related to” the delivery of a health care item or service under
Medicare or a state health care program for purposes of an exclusion pursuant to section
1128(a)(1) of the Act. See, e.g., Dewayne Franzen, DAB No. 1165 (1990) (inquiry is
whether conviction is related to Medicaid fraud, not whether the petitioner was convicted
of Medicaid fraud). Rather, an ALJ must examine whether there is a “common sense
connection or nexus between the offense and the delivery of an item or service under the
program.” Scott D. Augustine, DAB No. 2043, at 5-6 (2006) (citations omitted). To
determine whether there is such a nexus or common-sense connection, “evidence as to
the nature of an offense may be considered,” including “facts upon which the conviction
was predicated.” Jd. at 6-7. An ALJ may also use extrinsic evidence to “[fill] in the

(Footnote continued.)
or the person in lawful possession shall make a separate
request to the peace officer on each occasion when the peace
officer’s assistance in dealing with a trespass is requested.
However, a single request for a peace officer’s assistance may
be made to cover a limited period of time not to exceed 30
days and identified by specific dates, during which there is a
fire hazard or the owner, owner’s agent, or person in lawful
possession is absent from the premises or property. In
addition, a single request for a peace officer’s assistance may
be made for a period not to exceed six months when the
premises or property is closed to the public and posted as
being closed. However, this subdivision shall not be
applicable to persons engaged in lawful labor union activities
which are permitted to be carried out on the property by the
Alatorre-Zenovich-Dunlap-Berman Agricultural Labor
Relations Act of 1975 (Part 3.5 (commencing with Section
1140) of Division 2 of the Labor Code) or by the National
Labor Relations Act. For purposes of this section, land, real
property, or structures owned or operated by any housing
authority for tenants as defined under Section 34213.5 of the
Health and Safety Code constitutes property not open to the
general public; however, this subdivision shall not apply to
persons on the premises who are engaging in activities
protected by the California or United States Constitution, or
to persons who are on the premises at the request of a resident
or management and who are not loitering or otherwise
suspected of violating or actually violating any law or
ordinance.
11

circumstances surrounding the events which formed the basis for the offense of which
Petitioner was convicted.” Narendra M. Patel, M.D., DAB No. 1736, at 7 (2000).

Petitioner cites Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994) in support of an argument
that it is improper for an ALJ to look to the circumstances surrounding a conviction to
determine whether a conviction is program related. P. Br. at 6-7. Petitioner misreads
Travers, which focused on whether an individual had been “convicted” for purposes of a
mandatory exclusion, and whether there was a need for the IG. to conduct an evidentiary
hearing to relitigate the facts underlying the state court conviction. Jd. at 996-98. The
appellate panel that decided Travers discussed the mandatory nature of certain
exclusions, stating that the I.G. may not “delve into the facts surrounding the conviction”
once he determines that a program-related “conviction” actually exists because there is no
fact-finding in that determination. Id. at 999; see also Travers v. Sullivan, 801 F.Supp.
394, 403 (E.D. Wash. 1992). In short, the Travers panel recognized that Congress did
not intend that an exclusion proceeding under section 1128(a) of the Act be an
opportunity for an excluded individual or entity to collaterally attack an underlying
conviction for which exclusion is required. The Travers panel did not suggest that it is
inappropriate for the I.G., an ALJ, or the Board, to consider all the circumstances related
to the charges and underlying state court proceedings to determine whether an offense of
which one was convicted is actually program related. As the Board previously
recognized, it is necessary to look at the underlying state proceedings to “[fill] in the
circumstances” surrounding the conviction and, therefore, to avoid applying the I.G.’s
exclusion authority too narrowly. Patel, DAB No. 1736, at 7; see Kenneth M. Behr,
DAB No. 1997, at 7 (2005) (addressing Congress’s “intent that the mandatory exclusion
authority be used broadly to protect the integrity of covered programs”).

Petitioner’s reliance upon a recent district court case, Kabins v. Sebelius, 2012 WL
4498295 (D. Nev., Sept. 28, 2012), is also misplaced. Petitioner cites Kabins for the
proposition that the phrase found in various subsections of section 1128(a) of the Act —
“in connection with the delivery of health care” — limits the Secretary’s authority to
exclude to offenses involving the delivery of health care, not health care previously
delivered. As I understand Petitioner’s argument, Kabins establishes a rule that exclusion
may not be premised on an offense remotely related to the delivery of health care but may
only be for an offense directly related to the delivery of health care. Neither the judge in
Kabins nor Petitioner explains the source of this limitation on the Secretary’s authority
other than a nonspecific reference to the statute’s fundamental purpose. Neither explains
how the perceived limitation on the Secretary’s authority to exclude is consistent with the
overarching Congressional intent that exclusion be used to protect the integrity of the
programs. It is important to recognize that the Kabins case was decided by an
unpublished order granting the motion of the plaintiff, Mark B. Kabins, M.D., for
summary judgment. The district court judge vacated the decision of the Secretary that
Dr. Kabins was excluded from participating in Medicare pursuant to section 1128(a)(3)
of the Act. The district judge in the Kabins case rejected the Secretary’s arguments that
12

her decision was entitled to deference. The district judge criticized the “nexus test” that
has been followed in exclusion cases for years, commenting that it may permit selective
enforcement and arbitrary results. In Travers, the Ninth Circuit recognized that the
Secretary’s decision that an individual’s criminal conviction was a program related
offense is subject to review using the substantial evidence test rather than de novo
review. Travers, 20 F.3d at 998. However, the district judge in Kabins did not apply the
substantial evidence test but analyzed the case looking for the nexus between Dr. Kabins’
conviction and the delivery of a health care item or service. The district judge concluded
that Dr. Kabins’ offense was not one of those listed in section 1128(a)(3) that triggered
mandatory exclusion and that the offense was not program related. The unpublished
order that disposed of the Kabins case has doubtful precedential effect beyond that
specific case even in the district or circuit court where issued and the disposition should
be viewed as being limited to the facts of that case, particularly as it appears to be
inconsistent with the prior Ninth Circuit opinion in Travers. The district judge’s analysis
is not persuasive in this case.

Petitioner also argues that Congress intended that the Secretary’s authority to exclude be
imited to a category or class or crimes that include an element related to the delivery of
items or services under Medicare or Medicaid. Petitioner asserts that Congress did not
intend for the Secretary’s exclusion authority to encompass a broader group of crimes
without a specific element of relatedness but that are considered related based upon
review of facts surrounding the crime, i.e., the nexus test the Board has adopted. P. Br. at
0-12. Petitioner cites no legislative history in support of his interpretation of
Congressional intent. Rather, Petitioner argues that both federal and state laws include a
class of crimes related to items and services delivered under Medicare and Medicaid and
cites that fact as evidence that Congress intended that exclusions be limited to
convictions for those crimes. Petitioner also relies upon his erroneous interpretation of
the decision in Travers to argue that the Ninth Circuit found it improper for the Secretary
to consider the facts and circumstances of an offense to determine whether or not it is
program related. Petitioner also asserts that the district court’s concern expressed in
Kabins that the Secretary’s nexus test poses a risk for arbitrary decision-making is well-
founded because exclusions were not imposed in an unrelated case involving
pharmaceutical companies. P. Br. at 11; P. Exs. 4-5. Petitioner’s arguments are not
persuasive. One need look no further than the plain language of section 1128(i) of the
Act to determine that Congress intended to grant the Secretary broad, though not
unfettered, discretion to ensure that individuals not avoid exclusion through skillful plea
negotiations. In section 1128(i), Congress adopted a broad definition of the term
“conviction” that includes a judgment of conviction whether or not on appeal or
expunged; a finding of guilt; an accepted plea of guilty or no contest; or a deferred
adjudication or other arrangement by which a judgment of conviction has been withheld.
Act § 1128(i)(1)-(4). The broad definition of conviction adopted by Congress is
consistent with the Congressional goal of protecting the programs from those who
Congress intended that the Secretary exclude. Considering the circumstances or facts

13

underlying a conviction to determine whether or not there is a nexus to the delivery of an
item or service under Medicare or Medicaid is also consistent with the Congressional
purpose of protecting the programs by ensuring that those who should be excluded do not
avoid exclusion by skillful plea negotiations.

Petitioner argues that even if section 1128(a)(1) of the Act applies, summary judgment
will not lie in this case because there are disputes as to material facts and the I.G. does
not show by a preponderance of the evidence that either offense of which Petitioner was
convicted was program related. Petitioner asserts that material facts at issue include:
whether the plea agreement resolved Petitioner’s liability for the Medi-Cal fraud charges;
the relationship between the initial allegations of the criminal complaint and Petitioner’s
guilty pleas; and whether Petitioner was required to pay restitution to Medi-Cal. P. Br. at
11-17.

Whether or not the plea agreement resolved Petitioner’s liability for the Medi-Cal fraud
charges is not a material fact that affects my decision in this case. Material facts are that
Petitioner pled guilty to Count 1 of the criminal complaint which alleged the offense of
grand theft from Medi-Cal, the guilty plea was accepted by the criminal court and,
therefore, as a matter of law Petitioner was convicted of the offense within the meaning
of section 1128(i) of the Act. It is not necessary for me to decide whether Petitioner’s
plea agreement had the intended effect, though I note that the evidence shows that on
March 11, 2011, the original charges were all dismissed after the court was assured that
Petitioner made his last restitution payment. I.G. Ex. 7 at 2-3; 1.G. Ex. 2 at 5-7.

Whether Petitioner was required to pay restitution to Medi-Cal is also not a material fact
in dispute. The undisputed facts show that Petitioner made payments, which at least in
part, went to the California Health Care Deposit Fund, which is indisputably Medi-Cal.
No written plea agreement is in evidence, but the written statements from both
Petitioner’s criminal defense attorney and DAG Bonotto show that restitution was to be
paid to the State of California and DAG Bonotto directed that restitution be paid to the
California Health Care Deposit Fund. P. Exs. | and 3. Court documents show that the
criminal court listed as “Orders and Findings” on March 11, 2011, that Petitioner and his
co-defendant were to make restitution to the victim and one of the listed victims is the
“Healthcare Deposit Fund.” LG. Ex. 2 at 5-7. The undisputed facts thus show that
Petitioner paid restitution to Medi-Cal, which is some evidence that there is a nexus
between the offenses of which Petitioner was convicted and Medi-Cal. The only
reasonable conclusion based on Petitioner’s payment to the California Health Care Fund
as part of the negotiated plea agreement, which also resulted in the dismissal of charges
alleging fraud against the Medi-Cal program, is that the offenses to which Petitioner
agreed to plead guilty were related to the charges alleging that Petitioner’s conduct
resulted in a loss to the Medi-Cal program. Petitioner need not admit to defrauding or
stealing from Medi-Cal in order for his conviction to be “related to” the delivery of an
item or service under the Medi-Cal program. Rather, his agreement to, among other

14

things, pay the California Health Care Fund in exchange for the dismissal of certain
charges alleging Medi-Cal fraud is enough to support a finding of a nexus between the
conduct underlying his conviction and the delivery of an item or service under the Medi-
Cal program.

The relationship between the initial allegations of the criminal complaint and Petitioner’s
guilty plea to Count | of the criminal complaint is, in reality, undisputed. As already
discussed Petitioner pled guilty to Count 1, the plea was accepted, and he was convicted.
There is no dispute that Count | alleged grand theft from Medi-Cal and there is no
dispute that counsel stipulated in open court that there was a factual basis for the plea.
Although counsel now argues that there was no factual basis for the plea, it is not for me
to review the criminal conviction and Petitioner cannot relitigate that matter before me.
The conviction of misdemeanor trespass also has the required nexus to Medi-Cal based
on the following undisputed facts: Petitioner’s conviction for misdemeanor trespass was
the result of a plea agreement that resulted in dismissal of a charge of grand theft from
Medi-Cal and Medi-Cal fraud; Petitioner was originally convicted of grand theft from
Medi-Cal; and Petitioner paid restitution that was directed, at least in part, to Medi-Cal;
and he acknowledged during the plea hearing on March 1, 2010 that he was responsible
for restitution on all charges of the criminal complaint even though he only pled guilty to
grand theft from Medi-Cal.

Additionally, Petitioner does not dispute that he knowingly and voluntarily entered a
Harvey waiver during the plea hearing on March 1, 2010, and acknowledged to the court
that he was responsible for restitution on all counts of the criminal complaint. I.G. Ex. 6,
at 5. In Harvey, the trial court accepted the defendant’s guilty plea to two counts of
armed robbery, dismissed a remaining third count that involved a separate armed robbery,
and increased the defendant’s sentence based on facts related to the dismissed count.
Harvey, 25 Cal. 3d. at 757. On appeal, the California Supreme Court determined that “it
would be improper and unfair to permit the sentencing court to consider any of the facts
underlying the dismissed count three for purposes of aggravating or enhancing
defendant’s sentence.” Jd. at 759. The court explained that “[i]mplicit in... a plea
bargain [such as the defendant’s] . . . is the understanding (in the absence of any contrary
agreement) that defendant will suffer no adverse sentencing consequences by reason of
the facts underlying, and solely pertaining to, the dismissed count.” Jd.

The California Penal Code has since been amended to reflect the decision in Harvey,
stating:

(a) A plea of guilty or nolo contendere to an accusatory
pleading charging a public offense ... which public offense
did not result in damage for which restitution may be ordered,
made on the condition that charges be dismissed for one or
more public offenses arising from the same or related course
15

of conduct by the defendant which did result in damage for
which restitution may be ordered, may specify the payment of
restitution by the defendant as a condition of the plea or any
probation granted pursuant thereto, so long as the plea is
freely and voluntarily made, there is factual basis for the plea,
and the plea and all conditions are approved by the court.

(b) If restitution is imposed which is attributable to a count
dismissed pursuant to a plea bargain, as described in this
section, the court shall obtain a waiver pursuant to People v.
Harvey (1979) 25 Cal. 3d 754 from the defendant as to the
dismissed count.

Cal. Penal Code § 1192.3. In cases where a Harvey waiver is necessary, the charge to
which the defendant pleads guilty may not have caused damage that would permit that
restitution be ordered. However, a court may order restitution based on damages
resulting from a dismissed charge, so long as the dismissed charge arises “from the same
or related course of conduct by the defendant” as the charge to which he pled guilty. Jd.
The court, therefore, must obtain a Harvey waiver in order to permit a valid restitution
order based on the dismissed charge.

In this case, one may question whether a Harvey waiver was required. However, the
criminal court judge thought it was, and Petitioner agreed to and the court accepted a
Harvey waiver. By agreeing to the waiver, Petitioner acknowledged, as a matter of law,
that the offenses to which he pled guilty were part of “the same or related course of
conduct” as the other charges on the criminal complaint that resulted in damage and were
a basis for restitution to the State of California. Accordingly, Petitioner’s convictions
were presumptively under the California statute, the result of the “same or related course
of conduct” giving rise to the charges of grand theft from Medi-Cal (Count 1) and Medi-
Cal fraud (Count 2). It is apparent from the plain language of the charges that the
offenses of grand theft from Medi-Cal and Medi-Cal fraud are offenses “related to” the
delivery of a health care item or service under Medi-Cal, a state health care program. See
e.g., Ellen L. Morand, DAB No. 2426 (2012) (theft of evening bank deposit of pharmacy
by pharmacy technician related); Andrew D. Goddard, DAB No. 2032 (2006); Erik D.
Desimone, R.Ph., DAB No. 1932 (2004) (pharmacists theft of drug related); Berton
Seigel, D.O., DAB No. 1467, at 5-6 (1994) (false claims for payment are “related to” the
delivery of a health care item or service under Medicare or a state health care program);
Lyle Kai, R.Ph., DAB No. 1979, at 7-8 (2005) (exclusion was required based on a
conviction for selling misbranded commodities even though the excluded individual may
have been unaware of underlying Medicaid fraud). Petitioner’s acknowledgment through
the Harvey waiver that the offenses to which he pled guilty were part of the same or
related course of conduct is a sufficient nexus — a reasonable “common sense” connection
— to the delivery of an item or service under the Medi-Cal program.

16

Accordingly, I conclude that Petitioner’s convictions for grand theft from Medi-Cal and
misdemeanor trespass were “related to” the delivery of a health care item or service under
Medicare or a state health care program.

4. There is a basis to exclude Petitioner pursuant to section 1128(a)(1)
of the Act.

The I.G. must exclude an individual or entity under section 1128(a)(1) of the Act if the
individual has been convicted of an offense related to the delivery of a health care item or
service under Medicare or a state health care program. Petitioner does not dispute that he
was convicted within the meaning of section 1128(a)(1). I have concluded that
Petitioner’s convictions were related to the delivery of a health care item or service under
Medicare or a state health care program. Therefore, there is a factual and legal basis for
the I.G. to exclude Petitioner from participating in all federal health care programs. Act
§ 1128(a)(1).

5. Section 1128(c)(3)(B) of the Act establishes that five years is the
minimum period of exclusion imposed pursuant to section 1128(a) of
the Act.

6. Petitioner’s exclusion for five years is not unreasonable as a matter
of law.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R.

§ 1001.102(b), the period of exclusion may be extended based on the presence of
specified aggravating factors. Only if the aggravating factors justify an exclusion of
longer than five years are mitigating factors considered as a basis for reducing the period
of exclusion to no less than five years. 42 C.F.R. § 1001.102(c). The LG. does not cite
any aggravating factors in this case and does not propose to exclude Petitioner for more
than the minimum period of five years.

I have concluded that Petitioner’s exclusion is required by section 1128(a)(1) of the Act.
Accordingly, the minimum exclusion period must be for five years, and that period is not
unreasonable as a matter of law.
17

II. Conclusion

For all of the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs for the minimum statutory period of five
years effective October 18, 2012.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Robert H. Glover, D.C.,
(OI File Number: H-12-40790-9),
Petitioner,
v.

The Inspector General.
Docket No. C-13-72
Decision No. CR2765

Date: April 24, 2013

DECISION

Petitioner, Robert H. Glover, was a chiropractor licensed in the State of California, whose
license to practice was revoked. Pursuant to section 1128(b)(4) of the Social Security
Act (Act), the Inspector General (1.G.) has excluded him from participation in Medicare,
Medicaid, and all federal health care programs until he regains his license. Petitioner
now appeals the exclusion.

For the reasons set forth below, I find that the California licensing authority revoked
Petitioner’s chiropractic license for reasons bearing on his professional competence and
performance, so the I.G. has appropriately excluded him from program participation.

Background

Ina letter dated August 31, 2012, the I.G. advised Petitioner Glover that he was excluded
from participation in Medicare, Medicaid, and all federal health care programs because
his license to practice medicine or provide health care as a chiropractor in the State of
California was revoked, suspended, or otherwise lost or was surrendered while a formal
disciplinary proceeding, bearing on his professional competence, professional
performance, or financial integrity was pending before the Board of Chiropractic
Examiners. The letter explained that section 1128(b)(4) authorizes the exclusion. I.G.
Exhibit (Ex.) 1. Petitioner Glover requested review, and the matter is before me for
resolution.

The L.G. submitted its brief (I.G. Br.) and three exhibits (I.G. Exs. 1-3). In the absence of
any objection, I admit into evidence I.G. Exs. 1-3. Petitioner submitted his brief (P. Br.)
and a cover letter dated March 15, 2013 (P. Ltr.). He has also filed the Petition for
Reconsideration (P. Pet. for Recon.) that he submitted to the State Board of Chiropractic
Examiners with twelve exhibits attached.

I directed the parties to indicate in their briefs whether an in-person hearing would be
necessary. The parties agree that an in-person hearing is not necessary. I.G. Br. at 5; P.
Br. at 3.

Discussion

1. Because California’s chiropractic licensing board
revoked Petitioner Glover’s license for reasons bearing
on his professional competence or performance, the IG.
may appropriately exclude him from participation in
Medicare, Medicaid, and other federally funded health
care programs.'

The Act authorizes the Secretary of Health and Human Services to exclude from program
participation an individual whose license to provide health care “has been revoked or
suspended by any State licensing authority” for reasons bearing on the individual’s
“professional competence, professional performance, or financial integrity.” Act

§ 1128(b)(4)(A); see also 42 C.F.R. § 1001.501.

The parties agree that, following a hearing before a state administrative law judge (ALJ),
the California Board of Chiropractic Examiners revoked Petitioner’s chiropractic license,
effective March 7, 2012, because Petitioner Glover’s interaction with one of his patients,
during treatment, involved gross negligence and sexual misconduct. I.G. Ex. 2 at 4, 20-
21.

Although he concedes (as he must) that the state board revoked his license for reasons
bearing on his professional performance, Petitioner argues that the ALJ decision was
wrong and that the state board never reviewed it. P. Ltr. at 1; P. Br. at 2-4. But Petitioner
may not use this forum to challenge the state proceedings. The regulations explicitly
preclude any such collateral attack:

'T make this one finding of fact/conclusion of law.
When the exclusion is based on . . . a determination by
another Government agency, or any other prior determination
where the facts were adjudicated and a final decision was
made, the basis for the underlying . . . determination is not
reviewable and the individual or entity may not collaterally
attack it either on substantive or procedural grounds in this
appeal.

42 C.F.R. § 1001.2007(d). See Donna Rogers, DAB No. 2381 at 4-5 (2011).

Petitioner also submits evidence attesting to his character, and discusses the impact the
exclusion has on his ability to work in the health care field. P. Br. at 4; see exhibits
attached to P. Pet. for Recon. As the Departmental Appeals Board observed in Donna
Rogers, such arguments are not relevant. I may not review the I.G.’s decision to impose
an exclusion under section 1128(b)(4) “on the ground that the excluded person is a good
person or well-thought of in the profession or suffering from the loss of his/her vocation.”
Rogers, DAB No. 2381, at 6.

The statute requires that Petitioner Glover’s period of exclusion “shall not be less than the
period during which [his] . . . license... is revoked ....” Act § 1128(c)(3)(E); see also
42 CFR. § 1001.501(b)(1).

Finally, Petitioner also asks that I waive his exclusion. P. Br. at 4. As the LG. points out,
I have no authority grant a waiver. I.G. Reply at 4; 42 C.F.R. § 1001.1801(f).

Conclusion

For the above reasons, I conclude that the I.G. properly excluded Petitioner Glover from
participation in Medicare, Medicaid, and all other federal health care programs for so
long as his chiropractic license is revoked.

/s/
Carolyn Cozad Hughes
Administrative Law Judge