Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Huntington Beach Clinical Laboratory, Inc.,
Howard Pfupajena, M.D., Director,
(CLIA Number: 05D1080532),

Petitioner
v.
Centers for Medicare and Medicaid Services.
Docket No. C-11-192
Decision No. CR2490

Date: January 17, 2012

DECISION

Huntington Beach Clinical Laboratory, Inc. (Huntington or lab) was a California clinical
laboratory certified under the Clinical Laboratory Improvement Amendments of 1988
(CLIA), 42 U.S.C. § 263a et seg. Finding that the lab: 1) misrepresented its annual
testing volume; and 2) performed and represented that it was authorized to perform tests
that its CLIA certificate did not authorize, the Centers for Medicare and Medicaid
Services (CMS) has imposed sanctions against the lab, its owner, and its director — it
revoked the lab’s CLIA certificate and cancelled its approval to bill the Medicare
program.

Neither the lab nor its owner appealed. In a submission, which CMS accepted as an
“appeal,” lab director Howard Pfupajena, M.D. (Petitioner), does not challenge CMS’s
findings regarding Huntington’s deficiencies but suggests that he should not be
sanctioned because he resigned from his position as director before the lab lost its
certification.
For the reasons set forth below, I find that, during his tenure as Huntington’s director, the
lab failed to comply with CLIA requirements, and I therefore sustain the sanctions
imposed against Director Pfupajena.

Background

To ensure the accuracy and reliability of laboratory tests, and thus the health and safety of
those tested, CLIA creates a federal certification process for laboratories that perform
clinical diagnostic tests on human specimens. Public Law No. 100-58, amending section
353 of the Public Health Service Act, 42 U.S.C. § 263a et seq.; see H.R. REP. NO. 100-
899, at 8, reprinted in 1988 U.S.C.C.A.N. 3828, 3829. To be certified, a laboratory must
meet requirements set out in the statute and regulations. 42 U.S.C. § 263(a)(f)(1)(E); 42
C.F.R. Part 493. The statute gives the Secretary of Health and Human Services broad
enforcement authority, which the Secretary has delegated to CMS. Ifa laboratory does
not comply with the Secretary’s rules, CMS may suspend, limit, or revoke its CLIA
certificate and/or impose alternative sanctions (directed plan of correction, state
monitoring, civil money penalty). 42 C.F.R. § 493.1806.

Here, CMS initially determined that: 1) in applying for CLIA certification, Huntington
misrepresented its annual testing volume; 2) Huntington performed and represented that
it was authorized to perform tests that its CLIA certificate did not authorize; and 3)
Huntington employed a director (Dr. Pfupajena) who was prohibited from owning,
operating or directing any laboratory. In a letter dated September 28, 2010, CMS advised
the lab, its owner, and Director Pfupajena that it was therefore revoking the lab’s CLIA
certificate (pursuant to 42 C.F.R. § 493.1840(a)(1), (a)(2), and (a)(3)), and cancelling the
lab’s approval to receive Medicare payments (pursuant to 42 C.F.R. §§ 493.1808(a) and
493.1842(a)(1). The letter also explained that the CLIA statute prohibits the owner or
operator (which includes the director), from owning or operating (or directing) a
laboratory for at least two years from the date of the revocation. CMS Ex. 2. The letter
then advised the lab of its appeal rights. CMS Ex. 2 at 2.

Neither Huntington nor its owner appealed. On October 1, 2010, however, CMS
received a letter from Director Pfupajena, dated August 24, 2010, but postmarked
September 28, 2010, in which he requested “reconsideration” of CMS’s determination to
sanction him.' He claimed that he should not have been prohibited from directing

' The August 24, 2010 date was obviously a mistake, because the letter refers to CMS’s
September 3, 2010 warning letter (CMS Ex. 1). In the September 3 letter, CMS warned
that it would sanction the lab and explained the reasons. It also offered the recipients ten
days from the date of the notice, or until September 13, 2010, in which “to provide
evidence as to why these sanctions should not be imposed.” CMS Ex. 1. None of the
recipients responded within the ten-day period.
Huntington, based on his earlier affiliation with Bixby Clinical Laboratory, because he
resigned from his position as Bixby’s director prior to that lab’s loss of certification. He
also maintained that he should not be sanctioned for Huntington’s deficiencies because he
resigned from his position as Huntington’s director in August 2010. CMS Ex. 4.

CMS accepted that Director Pfupajena had resigned as Bixby’s director by a written
statement dated July 20, 2009, and that the appropriate state agency received notice of his
resignation on August 12, 2009. Bixby’s actionable conduct apparently occurred after
the date of Director Pfupajena’s resignation, so CMS removed “prohibition of the
director” as a basis for sanctioning Huntington. CMS Ex. 3; CMS Ex. 18 at 6-7 (Jew
Decl. {| 16).

With respect to Huntington, however, the state agency had no record of Director
Pfupajena’s resignation. CMS Ex. 3; CMS Ex. 18 at 6 (Jew Decl. § 16). In any event,
because the wrongful misrepresentations occurred prior to the date of his purported
resignation, CMS advised Director Pfupajena that it would continue to consider him “the
responsible director in connection with the [Huntington] sanction action.” CMS Ex. 3;
CMS Ex. 18 at 6-7 (Jew Decl. { 16).

CMS also advised Director Pfupajena that it would treat his letter as a hearing request
and forwarded his letter to the Civil Remedies Division. CMS Ex. 3 at 2-3.

On January 4, 2011, I issued an initial pre-hearing order, directing the parties to file their
pre-hearing exchanges, which were to include proposed exhibits, witness lists, witness
declarations, and a written brief containing “any argument [the] party intends to make.”
Initial Pre-hearing Order {J 1, 7 (January 4, 2011). I directed CMS to file its exchange
no later than May 11, 2011, and Petitioner to file its exchange no later than June 10,
2011. The order warned that I could impose sanctions pursuant to section 1128A(c)(4) of
the Social Security Act (Act) if a party failed to comply. Initial Pre-Hearing Order § 11.

I subsequently extended the deadlines by two weeks, ordering the filings no later than
May 25, 2011 and June 24, 2011.

CMS timely filed its exchange. Petitioner, however, did not file anything and did not ask
for an extension of time in which to file.” In an order dated July 21, 2011, I directed
Petitioner to show cause why his case should not be dismissed for abandonment pursuant
to 42 C.F.R. § 498.69(b)(2). In the event that he had not abandoned his exchange, I
ordered him to include his pre-hearing exchange with his showing of good cause. Order

> By failing to comply with my order, Director Pfupajena interfered with the “speedy”
and “orderly” conduct of these proceedings, and could have been sanctioned. Act
§ 1128A(c)(4)(E); Initial Pre-Hearing Order § 11 (Jan. 4, 2011).
to Show Cause (July 21, 2011). Petitioner responded in a letter dated August 1, 2011,
received on August 5. He did not submit a prehearing exchange. He said that he had not
abandoned his appeal but needed an additional, indefinite amount of time in which to
seek counsel and prepare his defense. CMS objected to any additional extensions of
time.

In a ruling dated September 21, 2011, I denied Petitioner’s request for extension. My
January 4, 2011 order afforded him ample time in which to obtain counsel and prepare
his case. That he failed to do so does not constitute good cause. Nevertheless, I declined
to dismiss under 42 C.F.R. § 498.69(b)(2), which authorizes dismissal where the party
fails to respond to a “show cause” notice with a showing of good cause. Instead, I closed
the record and issue this decision on the merits.*

CMS has submitted a written brief and twenty exhibits (CMS Exs. 1-20). In the absence
of any objection, I admit into evidence CMS Exs. 1-20.

Discussion

Petitioner is subject to the mandatory two-year prohibition on
owning, operating or directing a laboratory, because, during
his tenure as Huntington’s director, the lab failed to comply
with CLIA requirements and its certification was revoked.*

The owner or operator (which includes the director) of any laboratory that has had its
CLIA certificate revoked may not own or operate another CLIA-certified lab for two
years. 42 U.S.C. § 263a(i)(3); 42 C.F.R. § 493.1840(a)(8).

Here, no one disputes that Huntington violated CLIA rules and is subject to sanction.
The lab’s January 11, 2010 application for certification, which was signed by Director
Pfupajena, said that its annual test volume would be 8,500. CMS Ex. 6 at 3, 4. Based on
this representation, CMS imposed a CLIA fee of $1,174 for a compliance survey and
$150 for a certificate fee. CMS Ex. 1. Because fees are based on the lab’s annual testing
volume, the amounts would have been higher had the lab more accurately reported its
testing volume. CMS Ex. 1; see 42 C.F.R. § 493.649(a). In fact, Medicare billing data
showed that, from February through at least June 2010, the lab billed Medicare for
120,782 tests, more than 14 times the reported volume. CMS Ex. 15; CMS Ex. 18 at 4

* The ALJ need not hold an oral hearing if the affected party concedes all material facts.
Sol Teitelbaum, M.D., DAB No. 1849 at 10 (2002) (citing Glenburn Home, DAB No.
1806 at 17 (2002)).

* My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion
captions of this decision.
(Jew Decl. § 11); but see CMS Ex. | (suggesting that the billing continued through
August 9, 2010). Huntington did not report the increase. Remarkably, just two
individuals — Director Pfupajena and one other employee — supposedly performed all of
these tests. CMS Ex. 11; CMS Ex. 12 at 1.

The lab was certified to perform three tests only: urinalysis, endocrinology and
toxicology. CMS Ex. 18 at 2 (Jew Decl. 6). Nevertheless, it billed Medicare for many
tests outside these subspecialities. In fact, the lab was not authorized to perform 92% of
the tests for which it billed Medicare. CMS Ex. 16; CMS Ex. 18 at 4-5 (Jew Decl. § 12).
And it did not report that it had performed tests outside its certificate, which is required
by 42 C.F.R. § 493.51(b). CMS Ex. 18 at 3-4 (Jew Decl. § 10).

Petitioner has not challenged any of this. He admits that he became Medical Director in
January 2010, which was when the lab applied for CLIA certification, but pleads
ignorance regarding the lab’s billing activities. He complains that he was unable to
contact the lab’s owner, even though he “visited the facility and left messages with the
receptionist.” Finally, he claims that he sent a letter of resignation to the owner’s address
and to the appropriate state agency in August 2010. CMS Ex. 4.

Thus, by his own admission, as well as CMS’s uncontroverted documentation, Director

Pfupajena served as Huntington’s director from the time it applied for CLIA certification
until a few weeks before CMS sent its warning letter (September 3, 2010). CMS Exs. 4,
6, 7,9, 10, 11, 12.

The lab director provides the lab’s “overall management and direction.” 42 C.F.R.

§ 493.1403. He is responsible for the operation and administration of the lab, which
includes assuring compliance with applicable regulations. 42 C.F.R. § 493.1407.
Director Pfupajena well understood his responsibilities.’ On January 11, 2010, he signed
an attestation in which he agreed to assume “all directorship responsibilities” and
confirmed that he understood that, with the lab owner, he would be held responsible for
any violations. If, during his tenure as director, violations were found that led to
revocation of the lab’s CLIA certificate, he acknowledged that, pursuant to the CLIA
statute and regulations, he would be prohibited from owning, operating or directing
another clinical lab for two years from the date of the revocation. Finally, Petitioner
acknowledged that he would “continue to be held responsible as a laboratory director of
this laboratory until the day that the California Department of Public Health receives a
signed statement from me notifying the Department of my resignation or termination.”
CMS Ex. 9 (emphasis in original).

* Inote also that, since 1996, Petitioner has served as director of eight other labs. CMS
Ex. 18 at 5 (Jew Decl. 13).
Petitioner concedes that he was Huntington’s director until at least August 2010. He
claims that he sent his letter of resignation to the state agency at that time. CMS Ex. 4.
He has provided no evidence of his resignation, and the state agency denies receiving
such a letter. CMS Ex. 18 at 6-7 (Jew Decl. § 16). In any event, he acknowledges that he
was director from January through August 2010. Huntington provided the testing volume
misrepresentations to CMS in January. CMS Ex. 10. The billing documents for the
unauthorized testing show that it occurred between February and at least June 2010, when
Petitioner admits he was the director. That he managed to tender a resignation letter a

few weeks before CMS sent its first notice, on September 3, does not make him any less
accountable for the rule violations that occurred on his watch.

Conclusion

During Petitioner’s tenure as Huntington’s director, the lab failed to comply with CLIA
requirements, so CMS has revoked its CLIA certificate and cancelled its approval to bill
the Medicare program. Pursuant to 42 U.S.C. section 263a(i)(3) and 42 C.F.R.

§ 493.1840(a)(8), CMS may prohibit Director Pfupajena from owning, operating or
directing a laboratory for two years from the date of Huntington’s revocation. I sustain
its determination to do so.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Margally Samy,
Petitioner
v.
The Inspector General.
Docket No. C-11-459
Decision No. CR2489

Date: January 13, 2012

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Disposition affirming the I.G.’s determination to exclude Petitioner Margally Samy from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of five years. The I.G.’s Motion and determination are based on section
1128(a)(2) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(2), and arise from
Petitioner’s conviction of an offense relating to patient neglect or abuse. As I shall
explain below, the undisputed facts in this case require the imposition of the five-year
exclusion. I grant the I.G.’s Motion for Summary Disposition.

I. Procedural Background

In March 2010, Petitioner Margally Samy was employed as a Certified Nurse Aide
(CNA) at a facility in North Easton, Massachusetts called Southeast Rehabilitation &
Skilled Care Center (SRSCC). On March 15, 2010, she was providing personal care
services to a 92-year-old male hospice patient and resident of the facility. The resident,
whose diagnoses included dementia and behavioral disturbances, became combative. A
brief struggle ensued, during which Petitioner struck the resident with her closed right
fist. LG. Ex. 3.
The facility reported the incident to state authorities, who conducted an investigation and
eventually filed a charge of Assault and Battery on an Elderly or Disabled Person against
Petitioner, based on MASS. GEN. LAWS. ch. 265 § 13K(al/2). I. G. Exs. 3, 4.

On or about December 14, 2010, Petitioner was convicted of the charge following a jury
trial on her plea of not guilty. She was sentenced to a one-year term of probation, and as
part of that sentence was ordered “not to work with elderly or disabled” during that term.
LG. Ex. 5.

Section 1128(a)(2) of the Act dictates the mandatory exclusion, for a term of not less than
five years, of “[a]ny individual or entity that has been convicted, under Federal or State
law, of a criminal offense relating to neglect or abuse of patients in connection with the
delivery of a health care item or service.” The I.G. notified Petitioner of her exclusion
for the mandatory minimum period of five years on April 29, 2011.

Acting pro se, Petitioner timely sought review of the L.G.’s action on May 10, 2011. I
scheduled a telephone prehearing conference pursuant to 42 C.F.R. § 1005.6, in order to
discuss the issues presented by the case and the procedures best suited for addressing
them, but was unable to proceed in that way because no translator was available to assist
Petitioner, whose first language is not English but Haitian Creole. In lieu of the
telephone conference, I explained the nature of these proceedings and Petitioner’s rights
and obligations in writing, and established a schedule for the submission of documents
and briefs. The details are set out in my Order of June 7, 2011. Under the terms of my
Orders of September 20 and October 28, 2011, briefing is now complete, and for
purposes of 42 C.F.R. § 1005.20(c) the record closed January 9, 2012.

There are eleven exhibits in this case. The I.G. has proffered I.G.’s Exhibits 1-5 (1.G.
Exs. 1-5), and they are admitted. I have treated Petitioner’s proffer of exhibits as made
up of the six documents identified in my Order of October 28, 2011, and have numbered
them accordingly as Petitioner’s Exhibits 1-6 (P. Exs. 1-6), to which no objection has
been made by the I.G. They, too, are admitted.

The record in this case reflects Petitioner’s unfamiliarity with the appeal process in
general, and her very limited ability to frame her pleadings in a way that might make
them clearer or more forceful. She has submitted no briefing in the usual sense, but has
proffered a series of documents relevant to the events that led to her conviction and the
events that followed. I have attempted to interpret and discuss her position based on all
of her submissions, but in particular on her May 10, 2011 request for hearing. In doing
so I have been guided by the notion that pro se litigants should be offered “some extra
measure of consideration” in developing their records and their cases. Louis Mathews,
DAB No. 1574 (1996); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991).
IL. Issues

The legal issues before me are limited to those set out at 42 C.F.R. § 1001.2007(a)(1).
In the specific context of this record, they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in
Medicare, Medicaid, and all other federal health care programs pursuant to
section 1128(a)(2) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

Both issues must be resolved in favor of the I.G.’s position. Section 1128(a)(2) of the
Act mandates Petitioner’s exclusion since her predicate conviction has been established.
A five-year period of exclusion is the minimum period established by section
1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is therefore reasonable as a
matter of law.

Ill. Controlling Statutes and Regulations

Section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), requires the exclusion from
participation in Medicare, Medicaid, and all other federal health care programs of any
“individual or entity that has been convicted, under Federal or State law, of a criminal
offense relating to neglect or abuse of patients in connection with the delivery of a health
care item or service.” The terms of section 1128(a)(2) are restated in regulatory language
at 42 C.F.R. § 1001.101(b). This statutory provision makes no distinction between felony
convictions and misdemeanor convictions as predicates for mandatory exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... bya... State... court, regardless
of whether . . . the judgment of conviction or other record relating to criminal conduct has
been expunged,” section 1128(i)(1) of the Act; or “when there has been a finding of guilt
against the individual... bya... State... court,” section 1128(i)(2) of the Act. 42
U.S.C. §§ 1320a-7(i)(1)-(2). These definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(2) is mandatory and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.

In pertinent part, MASS. GEN. LAWS. ch. 265 § 13K(al/2) provides:
Whoever commits an assault and battery upon an elder or person with a
disability shall be punished by imprisonment in the state prison for not
more than 3 years or by imprisonment in a house of correction for not
more than 2 1/2 years, or by a fine of not more than $1,000, or both such
fine and imprisonment.

IV. Findings and Conclusions
I find and conclude as follows:

1. On December 14, 2010 in the Taunton District Court, Commonwealth of
Massachusetts, Petitioner was found guilty by jury verdict of one count of the criminal
offense of Assault and Battery on an Elderly or Disabled Person, in violation of MASS.
GEN. LAWS. ch. 265 § 13K(al/2). 1.G. Exs. 4, 5.

2. The guilty verdict described above in Finding 1, and the disposition and sentence
entered thereon, constitute a “conviction” within the meanings of sections 1128(a)(2) and
1128(i)(2) of the Act, and 42 C.F.R. § 1001.2.

3. There is a nexus and a common-sense relationship between the criminal offense of
which Petitioner was convicted, as noted above in Finding 1, and the neglect or abuse of
a patient in connection with the delivery of a health care item or service. I.G. Exs. 3, 4,
5; P. Ex. 6.

4. Petitioner’s conviction of a criminal offense relating to neglect or abuse of a patient in
connection with the delivery of a health care item or service constitutes a basis for the
1.G.’s exclusion of Petitioner from participation in Medicare, Medicaid, and all other
federal health care programs. Section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2).

5. The five-year period of Petitioner’s exclusion is the mandatory minimum period
provided by law, and is therefore not unreasonable. Section 1128(c)(3)(B) of the Act; 42
C.F.R. §§ 1001.102(a) and 1001.2007(a)(2).

6. There are no disputed issues of material fact and summary disposition is therefore
appropriate in this matter. Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma
Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(2) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; (2) the conviction must have been related to the neglect or abuse of patients; and,
(3) the patient neglect or abuse to which an excluded individual’s conviction related must
have occurred in connection with the delivery of a health care item or service. Bruce
Lindberg, D.C., DAB No. 1280 (1991); Neitra Maddox, DAB CR1218 (2004); Maureen
T. Kehoe, DAB CR673 (2000); Gabriel S. Orzame, M.D., DAB CR587 (1999); Ann M.
MacDonald, DAB CRS519 (1998); Anthony A. Tommasiello, DAB CR282 (1993).

Those three elements are demonstrated beyond dispute in this record. A recitation of the
incident’s details appears in I.G. Ex. 3, the Statement of Facts filed by the investigator,
and it shows that Petitioner was employed as a CNA at SRSCC on March 15, 2010, and
was directly engaged in providing patient care to a 92-year-old male resident when he
began to struggle and she struck him with her fist. A similar recitation of the incident’s
details appears in P. Ex. 6. LG. Exs. 3 and 4 confirm that the incident was the basis for
the charge filed against Petitioner, and that the charge specifically relates to her abuse of
the resident, in violation of MASS. GEN. LAWS. ch. 265 § 13K(al/2), Assault and Battery
on an Elderly or Disabled Person. The fact of her conviction on that charge is shown by
1G. Ex. 5. The LG. has a basis for the proposed exclusion.

Because the I.G. has established a basis for Petitioner’s exclusion pursuant to section
1128(a)(2), her exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of
the Act. 42 U.S.C. § 1320a-7(c)(3)(B). That period is reasonable as a matter of law.

As I have pointed out above, Petitioner has submitted only one document in which she
states her position in narrative form. That document is her May 10, 2011 request for
hearing, and it appears here verbatim:

To Whom it may concern:

I am writing this letter in response to the recent letter I received from the
office of the OIG. I am requesting an appeal over the exclusion of my
participation in the Medicare, Medicaid, and all federal health programs for
five years. According to the findings in my judgment at Taunton court I am
not to work on my certified nurses assistant license only for one year. Also
according to the DPH findings, I was found not guilty. Attached to this
letter are the findings of the DPH. Thank you for your time.

Sincerely,
Margally Samy.

The only attachments to this request for hearing were a copy of the Taunton District
Court’s disposition record (I.G. Ex. 5) and the I.G.’s April 29, 2010 notice-of-exclusion
letter. The document Petitioner refers to as “DPH findings” appears to be her Settlement
Agreement in complaint proceedings against her before the Massachusetts Department of
Public Health (MDPH), and it is now part of this record as P. Ex. 6.
1 interpret Petitioner’s request for hearing as presenting two arguments: first, that the
Taunton District Court’s prohibition of her working with elderly or disabled persons
during the one-year term of her probation is a bar to the I.G.’s proposed five-year
exclusion from protected federal health programs; and second, that her settlement of the
MDPH proceedings by agreeing to a 90-day suspension of her CNA certificate amounts
to her exoneration of the state criminal charges. Neither of these arguments raises a valid
defense to the exclusion.

Here, in the absence of an effort by the I.G. to enhance the period of exclusion by relying
on certain aggravating factors, the terms of Petitioner’s sentence are irrelevant. It is her
conviction, not her sentence or the terms of her probation, that forms the predicate for the
1.G.’s action. The I.G.’s action is mandatory, and the five-year exclusion is the
mandatory minimum period that the I.G. must impose by the terms of section
1128(c)(3)(B) of the Act and 42 C.F.R. § 1001.102(a). No lesser period can be imposed
by the I.G., by me, or by the Departmental Appeals Board (DAB). Henry L. Gupton,
DAB No. 2058 (2007); Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D.,
DAB No. 1850 (2002).

Petitioner’s reliance on her settlement of the MDPH proceedings seems misplaced:
nothing in the Settlement Agreement can be construed as a finding of “not guilty.” The
Agreement does limit the possible sanctions to which Petitioner was exposed by
imposing only the 90-day suspension of her certificate. It does resolve the MDPH
complaint without further substantive proceedings. But the Agreement also
acknowledges that the incident of March 15, 2010 at SRSCC happened and that
Petitioner was culpable for her part in it. P. Ex. 6. And for the reasons set out in the
paragraph immediately above, the fact that the MDPH proceedings resulted in a
suspension of Petitioner’s certification for only 90 days has no limiting effect on the
1.G.’s mandatory imposition of the minimum period of exclusion.

I note once more that Petitioner appears here pro se, and that her skills in the English
language are minimal. Because of those factors I have tried to be particularly mindful of
the Board’s reminders concerning pro se litigants. Louis Mathews, DAB No. 1574;
Edward J. Petrus, Jr., M.D., et al., DAB No. 1264. I have searched the entire record
before me, but have found no evidence or argument that might raise a valid, relevant
defense to the I.G.’s Motion and the proposed exclusion.

Summary disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). Resolution
of a case by summary disposition is in order when settled law can be applied to
undisputed material facts. Marvin L. Gibbs, Jr., M.D., DAB No. 2279 (2009); Michael J.
Rosen, M.D., DAB No. 2096. The material facts in this case are undisputed and
unambiguous. They support summary disposition as a matter of settled law, and this
Decision issues accordingly.
VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Disposition should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Margally Samy from participation in
Medicare, Medicaid, and all other federal health care programs for a period of five years,
pursuant to the terms of section 1128(a)(2) of the Act, 42 U.S.C. § 1320a-7(a)(2), is
thereby sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Edgar Narvaez
(O.I. File No. 6-06-40291-9),

Petitioner
Vv.

The Inspector General
Department of Health and Human Services.

Docket No. C-11-683
Decision No. CR2487
Date: January 11, 2012
DECISION

Petitioner, Edgar Narvaez, is excluded from participating 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 August 18, 2011. Petitioner’s exclusion for
five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).
An additional period of exclusion of ten years, for a total minimum period of exclusion of
fifteen years,’ is not unreasonable based upon the four aggravating factors established in
this case and the absence of any mitigating factors.

I. Background

The Inspector General for the Department of Health and Human Services (I.G.) notified
Petitioner by letter dated July 29, 2011, that he was being excluded from participation in
Medicare, Medicaid, and all federal health care programs for a minimum period of fifteen
years. The I.G. advised Petitioner that he was being excluded 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 based on his conviction in the United States District Court, Western
District of Texas, San Antonio Division, of a criminal offense related to the delivery of
an item or service under Medicare or a state health care program. The L.G. cited four
aggravating factors in support of extending the five-year statutory period of exclusion to
fifteen years.

Petitioner timely requested a hearing by letter dated August 7, 2011. The case was
assigned to me for hearing and decision on August 16, 2011. A prehearing telephone
conference was convened on September 2, 2011, the substance of which is memorialized
in my order dated September 6, 2011. During the prehearing conference, Petitioner
waived an oral hearing and agreed to proceed upon the documentary evidence and the
parties’ briefs. On October 13, 2011, the I.G. filed an opening brief, with I.G. Exhibits
(1G. Exs.) 1 through 9. Petitioner filed a brief in opposition (P. Br.) on November 28,
2011, with no exhibits. The LG. filed a reply brief (I.G. Reply) on December 16, 2011.
Petitioner did not object to my consideration of I.G. Exs. 1, 2, 4, 5, 6, and 9, and they are
admitted. Petitioner objects to I.G. Ex. 3 on grounds that it was not updated to reflect the
“final judgment.” P. Br. at 1. The objection is overruled and I.G. Ex. 3 is admitted. LG.
Ex. 3 is a copy of the indictment filed in the United States District Court, Western
District of Texas, San Antonio Division, on May 20, 2009, charging Petitioner with ten
counts of health care fraud and two counts of conspiracy to commit health care fraud.
The document is relevant. Petitioner does not object to I.G. Ex. 4, his plea agreement,
which shows that Petitioner agreed to plead guilty to counts 11 and 12 of the indictment.
Petitioner also agreed to the conduct alleged in the other counts of the indictment as part
of his statement of the factual basis for his plea. Although the grand jury foreperson’s
signature has been redacted on the last page of the indictment, I find there is sufficient
evidence of authenticity based on court stamps and the signatures of the Assistant United
States Attorneys. Petition objects to I.G. Exs. 7 and 8. I overrule Petitioner’s objection
to LG. Ex. 7, a copy of a judgment dated July 21, 2010, which shows that Petitioner was
convicted of one count of forgery in the U.S. District Court, Western District of Texas. I
also overrule Petitioner’s objection to 1.G. Ex. 8, which is a copy of the indictment and
criminal complaint charging Petitioner with the one count of forgery of which he was
convicted and a related FBI agent’s affidavit. I.G. Exs. 7 and 8 are relevant to establish
an aggravating factor under 42 C.F.R. § 1001.102(b)(9). I find sufficient indicia that they
are authentic, and they are admitted.

IL. Discussion
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a

hearing by an Administrative Law Judge (ALJ) and judicial review of the final action of
the Secretary of Health and Human Services (the Secretary).
Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation
in any federal health care program any individual convicted under federal or state law of
a criminal offense related to the delivery of an item or service under Medicare or a state
health care program. The Secretary has promulgated regulations implementing this
provision of the Act. 42 C.F.R. § 1001.101(a). Section 1128(c)(3)(B) of the Act
provides that an exclusion imposed under section 1128(a) of the Act will be for a period
of not less than five years. The Secretary has published regulations that establish
aggravating factors that the I.G. may consider to extend the period of exclusion beyond
the minimum five-year period, as well as mitigating factors that must be considered only
if the minimum five-year period is extended. 42 C.F.R. § 1001.102(b), (c).

The standard of proof is a preponderance of the evidence, and there may be no collateral
attack of the conviction that provides the basis of the exclusion. 42 C.F.R.
§ 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. 42 C.F.R. § 1005.15(b).

B. Issues
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).

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. Petitioner’s exclusion is required by section 1128(a)(1) of the Act.
There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction.
Petitioner does not dispute that on April 29, 2010, he agreed to plead guilty to two counts
of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349. I.G. Ex. 4.
Petitioner admitted as part of his plea agreement that, from on or about January 2004 to

on or about August 2006, he and two other individuals doing business as Narvaez Family
Provider Services, engaged in a scheme to defraud the Texas Medicaid Program.
Petitioner admitted in his plea agreement that he and the other individuals fraudulently
obtained a Medicaid provider license and contract, which allowed them to wrongfully bill
Medicaid for personal assistance services. Petitioner admitted that he and the other
individuals engaged in the systematic practice of falsifying client records, forging
physician certifications, and billing Medicaid for unauthorized services and services not
rendered. Petitioner also admitted in his plea agreement that he and the other individuals
obtained $400,000 from Medicaid that they were not authorized to receive. I.G. Ex. 4, at
2-4. Petitioner agreed to forfeit to the United States the sum of $400,000, which
represented the amount of proceeds obtained, directly or indirectly, as a result of his
criminal conduct. I.G. Ex. 4, at 10.

Petitioner does not dispute that on July 21, 2010, he was convicted, pursuant to his guilty
plea, of two counts of conspiracy to commit health care fraud by the United States
District Court for the Western District of Texas, San Antonio Division. Petitioner was
sentenced to: 30 months incarceration on each of the counts, to be served concurrently,
followed by 3 years of supervised release; pay a special assessment of $200; and pay
restitution of $366,000 to the Texas Health and Human Services Commission. I.G. Ex. 2.

The LG. cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

(a) MANDATORY EXCLUSION. - The Secretary 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 title XVIII or under
any State health care program.

The statute requires that the Secretary exclude from participation any individual or entity:
(1) convicted of a criminal offense; (2) where the offense is related to the delivery of an
item or service; and (3) the delivery of the item or service was under Medicare or a state
health care program.

Petitioner does not dispute that he was convicted within the meaning of section 1128(i) of
the Act (42 U.S.C. 1320a-7(i)), when the district court accepted his guilty plea to two
counts of conspiracy to commit health care fraud in violation of federal law. I.G. Ex. 2.
Pursuant to section 1128(i) of the Act, an individual is “convicted” of a criminal offense
when: a judgment of conviction has been entered by a federal, state, or local court
whether or not an appeal is pending or the record has been expunged; or there has been a
finding of guilt in a federal, state, or local court; or a plea of guilty or no contest has been
accepted in a federal, state, or local court; or an accused individual enters a first offender
program, deferred adjudication program, or other arrangement where a judgment of
conviction has been withheld.

Petitioner argues that his purported business did not involve delivery of professional
medical or therapeutic services but, rather cooking and cleaning services. P. Br. at 1. To
the extent that this argument might be construed to be an argument that Petitioner’s
offenses were not related to the delivery of an item or service under Medicare or
Medicaid, it is not persuasive. The plain language of section 1128(a)(1) of the Act shows
that it is not limited to criminal offenses related only to the delivery of professional
medical services. Rather, the statute plainly states it applies to any criminal offense
related to the delivery of an item or service under Medicare or Medicaid. The issue of
whether Petitioner’s criminal offense is related to the delivery of an item or service under
Medicaid is really a question of whether or not there is a nexus or common sense
connection between Petitioner’s admitted criminal conduct and the Medicaid program.
Berton Siegel, D.O., DAB No. 1467 (1994); Thelma Walley, DAB No. 1367 (1992). The
issue is not whether the services were professional medical services. Petitioner pled
guilty to two counts of conspiracy to commit health care fraud. By his plea, he admitted
that he engaged in a scheme to defraud the Texas Medicaid Program. I.G. Ex. 4, at 2.
Petitioner agreed in his plea agreement that the government could prove beyond a
reasonable doubt that he and the other individuals involved fraudulently obtained a
Medicaid provider license and contract, which allowed them to wrongfully bill Medicaid
for personal assistance services and to engage in the systematic practice of falsifying
client records, forging physician certifications, and billing Medicaid for unauthorized
services and services not rendered. I.G. Ex. 4, at 1-6. The submission of false billings to
the Medicare and Medicaid programs has been consistently held to be a program-related
crime within the scope of section 1128(a)(1) of the Act. Jack W. Greene, DAB No. 1078
(1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990); Mark D.
Perrault, M.D., DAB CR1471; Kennard C. Kobrin, DAB CR1213 (2004); Norman
Imperial, DAB CR833 (2001); Egbert Aung Kyang Tan, M.D., DAB CR798 (2001);
Mark Zweig, M.D., DAB CR563 (1999); Alan J. Chernick, D.D.S., DAB CR434 (1996).
The fact that Petitioner was sentenced to pay the Texas Health and Human Services
Commission restitution of $366,000 also supports my conclusion that Petitioner’s offense
was related to the delivery of an item or service under the Texas Medicaid program.

Accordingly, I conclude that all three elements of section 1128(a)(1) of the Act are
satisfied, and there is a basis for his exclusion.

3. Pursuant to section 1128(c)(3)(B) of the Act, the minimum period of
exclusion under section 1128(a) is five years.

4. Aggravating factors exist that justify extending the period of
exclusion to fifteen years.
5. No mitigating factors established by the regulations have been
proven.

6. Exclusion for fifteen years is not unreasonable in this case.

Because I have concluded that a basis exists to exclude Petitioner pursuant to section
1128(a)(1) of the Act, the I.G. must exclude him for a minimum period of five years
pursuant to section 1128(c)(3)(B) of the Act. The remaining issue is whether it is
unreasonable to extend his period of exclusion by an additional ten years.

Petitioner argues that his fifteen-year exclusion is unreasonable. Petitioner contends that
his business involved nonmedical services such as cooking and cleaning rather than
professional medical services. P. Br. at 1. As already discussed, section 1128(a)(1) of
the Act does not distinguish between professional medical services and services such as
cooking and cleaning. Thus, Petitioner’s attempt to draw a distinction has no impact
upon the period of exclusion that is reasonable in this case.

My determination of whether the exclusionary period in this case is unreasonable turns
on whether: (1) the I.G. has proven that there are aggravating factors; (2) Petitioner has
proven that there are mitigating factors the I.G. failed to consider or that the I.G.
considered an aggravating factor that does not exist; and (3) the period of exclusion is
within a reasonable range.

a. Four aggravating factors justify lengthening the period of
exclusion beyond the five-year statutory minimum.

The LG. notified Petitioner that four aggravating factors are present in this case that
justify an exclusion of more than five years: (1) Petitioner’s criminal acts caused or were
intended to cause, a financial loss to a government program or other entities and the loss
was $5,000 or more as evidenced by the order to pay restitution to Texas Medicaid in the
amount of $366,000; (2) the acts that resulted in Petitioner’s conviction occurred over a
period of one year or more, as Petitioner agreed his criminal conduct occurred between
January 2004 and August 2006; (3) the sentence imposed by the court included
incarceration of 30 months; and 4) Petitioner was convicted of other offenses besides
those which formed the basis of the exclusion or has been the subject of an adverse action
by a federal, state, or local government agency or board, and the adverse action is based
on the same set of circumstances that served as the basis for the imposition of the
exclusion. I also conclude that there are four aggravating factors recognized by the
regulations that serve as a basis for extending the period of exclusion. 42 C.F.R.

§ 1001.102(b)(1), (b)(2), (b)(5), (6)(9).

Petitioner admitted in his plea agreement that he and the other individuals obtained
$400,000 from Medicaid that they were not authorized to receive. I.G. Ex. 4, at 2-4.
Petitioner agreed to forfeit to the United States the sum of $400,000, which represented
the amount of proceeds obtained, directly or indirectly, as a result of his criminal
conduct. LG. Ex. 4, at 10. Petitioner was ordered to pay restitution of $366,000 to the
Texas Health and Human Services Commission. I.G. Ex. 2, at 6,7. The foregoing facts
support an inference that the actual or intended loss to the Texas Medicaid program as a
result of Petitioner’s criminal acts exceeded $5,000. Jeremy Robinson, DAB No. 1905
(2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003); Jason Hollady, M.D., DAB
No. 1855 (2002). Petitioner argues that he has requested an appeal regarding the amount
of restitution and that there was no determination of the actual loss. P. Br. at 2.

The fact that the amount of restitution may be subject to an appeal does not negate the
fact that Petitioner admitted as part of his plea agreement that $400,000 represented the
amount he obtained as a result of his criminal conduct. LG. Ex. 4, at 10. The regulation
does not require that the I.G. prove the exact amount of the losses sustained by Medicare
or Medicaid, but only that the actual or intended loss exceeded $5,000. 42 C.F.R.

§ 1001.102(c)(1). Based on the plea agreement and the amount of restitution ordered by
the court, there can be little doubt that the conduct for which Petitioner was convicted
resulted in an actual or intended loss to the Texas Medicaid program of more than
$5,000. 42 C.F.R. § 1001.102(b)(1). Further, to the extent that Petitioner disputes the
restitution amount as calculated by the court, the regulations specifically prohibit such a
collateral attack upon his conviction as that conviction is not subject to collateral attack
or review by me, whether on substantive or procedural grounds. 42 C.F.R.

§ 1001.2007(d). The aggravating factor established by 42 C.F.R. § 1001.102(b)(1) is
clearly established.

Petitioner does not deny that the counts of the indictment to which he pled guilty and for
which he was convicted show that his criminal conduct occurred from January 2004 to
August 2006, a period of more than one year. I.G. Ex. 3, at 10-11; LG. Ex. 4, at 2-6; P.
Br. at 2. However, Petitioner asks that I consider that his business “conducted services
pro-bono for a year” and that the I.G. failed to take this into consideration. According to
Petitioner, “there were no payments of any sort and the business passed random
inspections with flying colors.” P. Br. at 2. Petitioner’s argument that his business did
not charge for its services for a year is not an aggravating or mitigating factor under 42
C.F.R. § 1001.102 and is irrelevant to assessing the reasonableness of the period of
exclusion. The undisputed evidence shows that Petitioner’s criminal acts occurred over a
period of one year or more, and the second aggravating factor is established. 42 C.F.R.
§ 1001.102(b)(2).

Petitioner does not dispute that he was sentenced to be imprisoned for thirty months. I.G.
Ex. 2, at 2; P. Br. at 1. I conclude the third aggravating factor cited by the LG. is
established. 42 C.F.R. § 1001.102(b)(5).

The LG. cites both a forgery conviction and Petitioner’s exclusion from Texas Medicaid
in support of the fourth aggravating factor. I.G. Ex. 1. On July 21, 2010, Petitioner was
convicted by the United States District Court, Western District of Texas in San Antonio
of one count of forgery, in violation of 18 U.S.C. § 505. LG. Exs. 7, 8. The Texas
Health and Human Services Commission notified Petitioner by letter dated February 18,
2011, that he was excluded from Texas Medicaid for at least six years, effective twenty-
five days from the date of the letter. I.G. Ex. 9. The I.G. argues that the fourth
aggravating factor is present under 42 C.F.R. § 1001.102(b)(9) based on Petitioner’s
unrelated conviction of forgery and his exclusion from Texas Medicaid. I.G. Brief at 3,
9-10. Petitioner argues that the forgery conviction should not be considered. The I.G.
alleges that Petitioner’s forgery conviction falls within the meaning of 42 C.F.R.

§ 1001.102(b)(9) because it is a conviction of another offense besides that which formed
the basis for his exclusion. The I.G. recognizes Petitioner’s forgery conviction was based
on completely different factual circumstances and has no relation at all to Petitioner’s
conviction for the conspiracy to commit health care fraud. I.G. Br. at 9-10; I.G. Reply at
4. The LG.’s interpretation of 42 C.F.R. § 1001.102(b)(9) is consistent with the plain
language of the regulation and I conclude that consideration of the forgery conviction
(.G. Exs. 7 and 8) is appropriate to establish the aggravating factor under 42 C.F.R.

§ 1001.102(b)(9). Even if I refused to consider the forgery conviction as Petitioner
urges, Petitioner’s exclusion from Texas Medicaid (I.G. Ex. 9) clearly establishes the
fourth aggravating factor under 42 C.F.R. § 1001.102(b)(9).

Accordingly, I conclude that the I.G. has established four aggravating factors, and the
1.G. was authorized by the Secretary to rely upon these factors as a basis for extending
Petitioner’s exclusion by ten years.

b. No mitigating factors justify reducing the period of exclusion.

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an
exclusion of longer than five years, then mitigating factors may be considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).
The only authorized mitigating factors that I may consider are listed in 42 C.F.R.

§ 1001.102(c):

(1) The individual or entity was convicted of 3 or fewer
misdemeanor offenses, and the entire amount of financial loss
(both actual loss and intended loss) to Medicare or any other
Federal, State or local governmental health care program due
to the acts that resulted in the conviction, and similar acts, is
less than $1,500;

(2) The record in the criminal proceedings, including
sentencing documents, demonstrates that the court determined
that the individual had a mental, emotional or physical
condition before or during the commission of the offense that
reduced the individual’s culpability; or
(3) The individual’s or entity’s cooperation with Federal or

State officials resulted in —
(i) Others being convicted or excluded from Medicare,
Medicaid and all other Federal health care programs,
(ii) Additional cases being investigated or reports being
issued by the appropriate law enforcement agency
identifying program vulnerabilities or weaknesses, or
(iii) The imposition against anyone of a civil money
penalty or assessment under part 1003 of this chapter.

Petitioner has the burden to prove that there is a mitigating factor for me to consider. 42
CFR. § 1005.15(b)(1).

Petitioner urges me to consider that he is working to show that he is trustworthy. P. Br.
at 3. However, Petitioner points to no evidence that establishes a mitigating factor
established by the regulations. Accordingly, this case presents no mitigating factors to
justify reducing the period of exclusion.

The Board has made clear that the role of the ALJ in cases such as this is to conduct a “de
novo” review as to the facts related to the basis for the exclusion and the existence of
aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine
whether the period of exclusion imposed by the I.G. falls within a reasonable range.
Joann Fletcher Cash, DAB No. 1725 n.6 (2000).” The regulation specifies that I must
determine whether the length of exclusion imposed is “unreasonable” (42 C.F.R.

§ 1001.2007(a)(1)). The Board has explained that, in determining whether a period of
exclusion is “unreasonable,” I am to consider whether such period falls “within a
reasonable range.” Cash, DAB No. 1725 n.6. The Board cautions that whether I think
the period of exclusion too long or too short is not the issue. I am not to substitute my
judgment for that of the I.G. and may only change the period of exclusion in limited
circumstances.

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the I.G.
considers an aggravating factor to extend the period of exclusion and that factor is not
later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is
shown to exist, then the ALJ may make a decision as to the appropriate extension of the
period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842
(2002), the Board suggests that, when it is found that an aggravating factor considered by
the I.G. is not proved before the ALJ, then some downward adjustment of the period of

> The citation is to the version of the decision of the Board available at
http://www.hhs.gov/dab/decisions/dab1725.html. In the original decision released by the
Board and the copy available on Westlaw™, it is footnote 9 rather than footnote 6.

10

exclusion should be expected absent some circumstances that indicate no such adjustment
is appropriate.

In this case, after de novo review I have concluded that a basis for exclusion exists and
that the evidence establishes the four aggravating factors that the I.G. relied on to impose
the fifteen-year exclusion. Petitioner has not established that the I.G. failed to consider
any mitigating factor or considered an aggravating factor that did not exist. I conclude
that a period of exclusion of fifteen years is in a reasonable range and not unreasonable.
Accordingly, no basis exists for me to reassess the period of exclusion.

III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare,
Medicaid, and all federal health care programs for a period of fifteen years, effective
August 18, 2011.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Sonia Marie Rivera
(O.1. File No.: 9-09-40520-9),
Petitioner
v.
The Inspector General.
Docket No. C-11-747
Decision No. CR2486

Date: January 9, 2012

DECISION

Petitioner, Sonia Marie Rivera, asks review of the Inspector General’s (I.G.’s)
determination to exclude her for five years from participation in the Medicare, Medicaid,
and all federal health care programs under section 1128(a)(1) of the Social Security Act
(Act). For the reasons discussed below, I find that the I.G. is authorized to exclude
Petitioner and that the statute mandates a minimum five-year exclusion.

Discussion

The sole issue before me is whether the I.G. has a basis for excluding Petitioner from
program participation. Because an exclusion under section 1128(a)(1) of the Act must be
for a minimum period of five years, the reasonableness of the length of the exclusion is
not an issue. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).
The parties have submitted written arguments,' and the I.G. filed a reply. With his brief,
the I.G. submitted three exhibits (I.G. Exs. 1-3). Petitioner submitted fifteen exhibits (P.
Exs. 1-15). In the absence of any objections, I admit into evidence I.G. Exs. 1-3 and P.
Exs. 1-15.

The parties agree that this case can be resolved without an in-person hearing. I.G. Br. at
5; P. Submission 2 at 3.

Petitioner must be excluded for five years because she was
convicted of a criminal offense related to the delivery of an
item or service under the Medicare or a state health
program, within the meaning of section 1128(a)(1) of the
Social Security Act.”

Under certain circumstances, the California Medicaid program (Medi-Cal) pays for
personal care services for elderly and disabled persons. Petitioner was enrolled in that
program as care-provider for her father. From 2006 through 2009, she billed the program
for hours that she could not have worked because she was incarcerated. I.G. Ex. 3. Ina
criminal complaint dated July 15, 2009, the State of California charged her with grand
theft and presenting false claims to the State of California. I1.G. Ex. 2. On October 16,
2009, Petitioner pled guilty in a California State Court to the felony count of grand theft,
and the court accepted the plea. She was sentenced to 16 months in jail and ordered to
pay $2,276.97 in restitution to the State of California. I.G. Ex. 1.

' The LG. filed a brief (I1.G. Br.). Petitioner’s written arguments are contained in the
following submissions: 1) an untitled document dated November 27, 2011 that begins
“The facts that support Petitioner’s exhibits are as follows;” 2) a document titled
“Petitioner’s Informal Exhibit List,” which includes Petitioner’s responses to some of the
questions posed by the short form brief I instructed her to file (September 21, 2011 Order
and schedule for Filing Briefs and Documentary Evidence); 3) a document titled
“Attachment List” followed by Attachment A, with a “notice of entry of appearance,”
Attachment B, with another “notice of entry of appearance,” and Attachment C; 4) a two-
page document titled “Statement of Issues;” and 5) a one-page document titled “Motion
to Quash Exclusion.” I note that the “appearances” are not statements from potential
representatives but are short witness-like statements from individuals who make
additional statements in the attachments. We have marked the submissions, using the
numbers designated above, and I refer to them as P. Submissions 1-5.

? I make this one finding of fact/conclusion of law.
In a letter dated June 30, 2010, the I.G. advised Petitioner that, because she had been
convicted of a criminal offense related to the delivery of an item or service under the
Medicare or a state health care program, the I.G. was excluding her from participation in
Medicare, Medicaid, and all federal health care programs for a period of five years.

Section 1128(a)(1) of the Act requires that the Secretary of Health and Human Services
exclude an individual who has been convicted under federal or state law of a criminal
offense related to the delivery of an item or service under Medicare or a state health care
program.’ 42 C.F.R. § 1001.101.

An offense is related to the delivery of an item or service under Medicare or a state health
care program if there is “a nexus or common-sense connection” between the conduct
giving rise to the offense and the delivery of the item or service. Lyle Kai, R.Ph., DAB
No. 1979 (2005); Berton Siegel, D.O., DAB No. 1467 (1994). Here, the court documents
establish the necessary connection between Petitioner’s crime and a state healthcare
program. As the criminal complaint makes clear, the grand theft charge, to which she
pled guilty, was related to her presenting fraudulent claims to the Medi-Cal program.

LG. Ex. 2.

Petitioner was therefore convicted of a crime related to the delivery of an item under the
Medicaid program, and is subject to a minimum five-year exclusion. Act §
1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Petitioner answers yes when asked if she was convicted of a criminal offense. But then
she says that she does not “agree” that she was convicted of a criminal offense. She
explains that she pled no contest to the charges that were filed. P. Submission 2 at 1.
The regulations provide that a no contest plea, accepted by the court, is a conviction. 42
C.F.R. § 1001.2.

Petitioner complains that no one assisted her with her defense. P. Submission 1; P.
Submission 4. She admits submitting the time sheets to the State of California but cites
“discrepancies” in state program’s reimbursement to her and says that, when unable to
care for her father, she hired and paid a third party to provide the service. She claims that
the state knew about the situation. P. Submission 3 at 2, 4; P. Submission 4; P.
Submission 5. Based on these assertions, she denies committing any unlawful act. P.
Submission 5.

The regulations explicitly preclude such a collateral attack on a conviction.

* The term “state health care program” included a state’s Medicaid program. Section
1128(h)(1) of the Act; 42 C.F.R. § 1320a-7(h)(1).
When the exclusion is based on the existence of a criminal conviction . . .
where the facts were adjudicated and a final decision was made, the basis
for the underlying conviction .. . 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); Joann Fletcher Cash, DAB No. 1725 (2000); Chander
Kachoria, R.Ph., DAB No. 1380, at 8 (1993) (“There is no reason to ‘unnecessarily
encumber the exclusion process’ with efforts to reexamine the fairness of state
convictions.”); Young Moon, M.D., DAB CR1572 (2007).

Conclusion

The L.G. therefore properly excluded Petitioner from participation in Medicare, Medicaid
and the statute mandates a five-year minimum period of exclusion.

/s/

Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Edgard Cruz Baez, M.D.,
(NPI: 1225014434),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-11-799
Decision No. CR2483

Date: January 6, 2012

DECISION

On June 21, 2002, Petitioner, Edgard Cruz Baez, M.D., was convicted of conspiracy to
defraud the United States through solicitation and receipt of kickbacks in relation to
Medicare referrals. Based on that conviction, the Centers for Medicare and Medicaid
Services (CMS) has denied his request to enroll in the Medicare program as a supplier of
services. Petitioner appeals. For the reasons set forth below, I find that the statute and
regulations authorize CMS to deny Petitioner Baez’s enrollment application. I therefore
affirm CMS’s determination.

Background

CMS, acting on behalf of the Secretary of Health and Human Services, may deny a
provider’s or supplier’s enrollment in the Medicare program if, within the preceding ten
years, he was convicted of a felony offense that CMS “has determined to be detrimental
to the best interests of the program and its beneficiaries.” 42 C.F.R. § 424.530(a)(3); see
Social Security Act (Act) §§ 1842 (h)(8) (authorizing the Secretary to deny enrollment to
a physician who has been convicted of a felony offense that the Secretary has determined
is “detrimental to the best interests of the program or program beneficiaries”) and
1866(b)(2)(D) (authorizing the Secretary to deny enrollment after she ascertains that the
provider has been convicted of a felony that she “determines is detrimental to the best
interests of the program or program beneficiaries”). Offenses for which billing privileges
may be denied include financial crimes such as “extortion, embezzlement, income tax
evasion, insurance fraud, and other similar crimes,” as well as any felonies “outlined in
section 1128 of the Act.” 42 C.F.R. § 424.530(a)(3)(i)(B), (a)(3)(i)(D). Among the
crimes outlined in section 1128 are “‘program-related” crimes, i.e., offenses related to the
delivery of an item or service under Medicare or a state health care program (Medicaid).
Act § 1128(a)(1).

Here, initially and on reconsideration, the Medicare contractor, First Coast Service
Options, Inc., denied Petitioner Baez’s application for enrollment in the Medicare
program. CMS Exs. 16, 18. Petitioner timely filed this appeal. The parties agree that no
material facts are in dispute and have filed cross-motions for summary judgment. Each
party has submitted a supporting brief (CMS Br.; P. Br.). CMS submitted nineteen
exhibits (CMS Exs. 1-19).

Discussion

CMS may deny Petitioner enrollment in the Medicare program because,
within the last ten years, he was convicted of conspiracy to defraud the
United States, a felony detrimental to the best interests of the Medicare
program.

On June 21, 2002, Petitioner pled guilty and was convicted on one count of conspiracy to
defraud the United States through the solicitation and receipt of kickbacks in relation to
Medicare referrals (18 U.S.C. § 371), a class D felony. Edgar Cruz Baez, M.D., DAB
CR1140 (2004) at 2; CMS Ex. | at 2. Inasmuch as Petitioner conspired to defraud
Medicare, which is, after all, an insurance program, his crime — insurance fraud —
appears to be among those explicitly listed in 42 C.F.R. § 424.530(a)(3)(i)(B).
Inexplicably, however, CMS says that the crime is not listed in the regulation. Instead,
citing Ahmed v. Sebelius, 710 F. Supp. 167, 174 (D. Mass. 2010), in which the physician
was convicted of obstruction of a criminal investigation of health care offenses, and
Fayad v. Sebelius, 2011 WL 1120036 (E.D. Mich., March 25, 2011), in which the
physician falsified immigration forms, CMS argues that, so long as the crime is “similar
enough” to the financial crimes listed in the regulation, it can reasonably be considered
detrimental to the best interest of the Medicare program. CMS Br. at 8. CMS is correct
that the regulation broadly interprets the term “financial crime” to include any offense
similar to those listed. Here, if not explicitly listed in the regulation, Petitioner’s crime is
as “similar” to insurance fraud as possible and must reasonably be considered detrimental
to the best interests of the Medicare program.

'T make this one finding of fact/conclusion of law to support my decision.
In any event, even if Petitioner’s crime were not a “financial crime” within the meaning
of section 424.530, he was convicted of a felony that is also an offense “outlined in
section 1128 of the Act.” See Edgar Cruz Baez, M.D., DAB CR1140 at 2(finding that
Petitioner’s conviction “falls squarely within the ambit of section 1128(a)(1)”). So,
without regard to whether his crime falls under section (a)(3)(i)(B), CMS has the
authority to deny his enrollment under section (a)(3)(i)(D).

Thus, under the plain language of the regulations, CMS may deny Petitioner’s Medicare
enrollment and I need look no further into the underlying rationale for its actions.
Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994); Christensen v. Harris
County, 529 U.S. 576, 583 (2000); and In re: SEALED CASE, 237 F.3d 657, 669 (D.C.
Cir. 2001).

Petitioner nevertheless argues that CMS may not deny him enrollment because he
committed only one felony. According to Petitioner, section 424.530 “clearly states that
the minimum ten year ban applies only in cases where the provider has had a prior
conviction, meaning that it applies to providers that have had a second conviction. . . .”
P. Br. at 2. Petitioner simply misreads the regulation, which says nothing about prior
convictions or multiple convictions; the regulation says “convicted of a Federal or State
felony offense.””

Petitioner also faults CMS for failing to “weigh” the severity of his offense. As I have
explained in earlier decisions, I have no authority to interject myself into the
discretionary enforcement processes of the agency component to which the discretion to
act has been explicitly granted. Jason Bellak, M.D., DAB CR1680 at 3 (2007)(citing
Wayne E. Imber, M.D., DAB No. 1740 (2000)); Brier Oak Terrace Care Ctr., DAB No.
1798 (2001). Once I find a legal and factual basis for denying Petitioner’s enrollment, I

m “without jurisdiction to evaluate on any basis whatsoever the propriety of [CMS’s]
exercise of discretion in deciding to proceed... .”. Michael J. Rosen, M.D., DAB
CR1566 (2007); cf: Puget Sound Behavioral Health, DAB No. 1944 at 15-16 (2004),
aff'd County of Pierce, d/b/a/ Puget Sound Behavioral Health v. Leavitt, D.C., No. CV-
04-02308-JLR (2007) (finding where regulation uses permissive rather than mandatory
language, ALJ had no authority to compel CMS to exercise its discretion). I thus decline
to review the manner in which CMS opted to exercise its discretion.

? Petitioner may have confused these provider/supplier enrollment regulations with the
Inspector General’s regulations governing mandatory exclusions from Medicare and state
healthcare programs. The Inspector General excludes from program participation those
convicted of certain criminal offenses. The minimum length of exclusion is generally
five years, but, if an individual has been convicted “on one other occasion of one or more
offenses” for which an exclusion is warranted, the period of exclusion must be for at least
ten years. 42 C.F.R. § 1001.201(d).
Conclusion

Because Petitioner was convicted of felony conspiracy to defraud the Medicare program,
CMS may deny his Medicare enrollment. I therefore deny Petitioner’s motion for
summary judgment and grant CMS’s motion for summary judgment.

/s/
Carolyn Cozad Hughes
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Scott S. Reuben, M.D.,
(O.1. File No.: 1-09-40105-9),
Petitioner,

v.

The Inspector General.
Docket No. C-11-664
Decision No. CR2481

Date: January 6, 2012

DECISION

Petitioner, Scott S. Reuben, M.D., asks review of the Inspector General’s (I.G.’s)
determination to exclude him for five years from participation in the Medicare, Medicaid,
and all federal health care programs under section 1128(a)(3) of the Social Security Act
(Act). For the reasons discussed below, I find that the I.G. is authorized to exclude
Petitioner and that the statute mandates a minimum five-year exclusion.

Discussion

The sole issue before me is whether the I.G. has a basis for excluding Petitioner from
program participation. Because an exclusion under section 1128(a)(3) of the Act must be
for a minimum period of five years, the reasonableness of the length of the exclusion is
not an issue. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

The parties have submitted their written arguments (I.G. Br.; P. Br.), and the L.G. filed a
reply. With his brief, the 1.G. submitted four exhibits (I.G. Exs. 1-4). In the absence of
any objections, I admit into evidence I.G. Exs. 1-4.
I directed the parties to indicate in their briefs whether an in-person hearing would be
necessary and, if so, to describe the testimony it wishes to present, the names of the
witnesses it would call, and a summary of each witnesses’ proposed testimony. I
specifically directed the parties to explain why the testimony would be relevant. Order
and Schedule for Filing Briefs and Documentary Evidence, Attachment | (Informal Brief
of Petitioner § III) and Attachment 2 (Informal Brief of I.G. { II) (Sept. 9, 2011). The
1.G. indicates that an in-person hearing is not necessary. Although Petitioner does not
directly respond to the question, he does not contend that an in-person hearing is
necessary and lists no potential witnesses. I therefore conclude that an in-person hearing
is not required.

Petitioner must be excluded for five years because he was
convicted of felony fraud in connection with the delivery of
a healthcare item or service.

Petitioner was a Massachusetts anesthesiologist who contracted with the drug
manufacturer, Pfizer, Inc., to conduct clinical studies on patients to determine the efficacy
of a certain drug in treating post-operative pain. Pfizer paid for the studies. Petitioner
subsequently claimed to have conducted the studies, administering the tested drug to 100
post-surgical patients and a placebo to another 100 post-surgical patients. He published
papers in a scientific journal claiming to have achieved success with the tested drug. In
fact, he had not enrolled any patients in any study, and he fabricated the “results.” LG.
Ex. 3 at 12-16.

On June 24, 2010, Petitioner pled guilty in federal district court for the District of
Massachusetts to one count of felony health care fraud, 18 U.S.C. § 1347. Under that
provision, a person commits health care fraud if, “in connection with the delivery of or
payment for health care benefits, items, or services,” he “knowingly and willfully
executes, or attempts to execute” a scheme 1) to defraud a health benefit program or 2) to
obtain, “by means of false or fraudulent pretenses, representations, or promises,” money
or property owned by a health benefit program.

The court accepted Petitioner’s plea and entered judgment against him. I.G. Exs. 2, 4.

In a letter dated June 30, 2011, the I.G. advised Petitioner that, because he had been
convicted of a felony offense related to fraud, theft, embezzlement, breach of fiduciary
responsibility or other financial misconduct in connection with the delivery of a
healthcare item or service, the I.G. was excluding him from participation in Medicare,
Medicaid, and all federal health care programs for a period of five years. I.G. Ex. 1.

' [make this one finding of fact/conclusion of law.
Section 1128(a)(3) provides that an individual or entity convicted of felony fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct in
connection with the delivery of a health care item or service must be excluded from
participation in federal health care programs for a minimum of five years. See 42 C.F.R.
1001.101(c). Because Petitioner was convicted of felony health care fraud, he is subject
to exclusion.

Petitioner does not deny that he was convicted of felony fraud in connection with the
delivery of a health care item or service. Instead, he attributes his misconduct to mental
illness, points out that his practice as a clinician is unblemished, argues that he has paid

is debt to society, and maintains that he is ready to resume his medical career. These are
simply not bases for overturning a mandatory exclusion.

Conclusion

For these reasons, I conclude that the I.G. properly excluded Petitioner from participation
in Medicare, Medicaid and all federal health care programs, and I sustain the five-year
exclusion.

/s/
Carolyn Cozad Hughes
Administrative Law Judge