DEPARTMENT OF H&ALTH AND HUMAN SERVICES
Departmental Grant Appeals Board

Office of Hearings for Civil Money Penalties

In the Case of:
DATE: May 29, 1987
rhe Inspector General,
Docket No. C-23
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DECISION CR 9
Dean B. Massey, D.D.S.,

Respondent.

DECISION AND ORDER

In this case, the Inspector General (I.G.) of the United States
Department of Health and Human Services (DHHS) issued a Notice of
Determination (Notice) informing Dean B. Massey, D.D.S. (the
Respondent), that the I.G. sought $41,010.60 in civil monetary
penalties (a penalty of $35,000 and an assessment of $6,010.60)

from the Respondent and a five year suspension of the Respondent
from participating as a dental provider in the Medicare and Medicaid
programs. In the Notice, the I.G. alleyed that the Respondent had
violated the Civil Monetary Penalties Law (CMPL) and its implementing
federal regulations (Regulations) by presenting 147 requests for
payment to Medicaid recipients, during the period August 20, 1981
through October 7, 1983, in violation of the ReSpondent's provider
agreement with the Maryland Medicaid Proyram, 1/ 2/ 3/ The I.G.

17 The CMPL, consisting of sections 1128A and 1128(c) of the

Social Security Act (Act), is codified in Title 42 U.S.C., sections
1320a~7a and 1320a-7(c). The Regulations are codified in 42

C.F-R- §§1003.100 through 1003.133. See, 48 Fed. Reg. 38827

(August 26, 1983); 51 Fed, Reg. 34764 et seg. (September 30,

1986); and 51 Fed. Reg. 37577 and 39528 (October 23 and 29,

1986).

2/ The terms “civil monetary penalties" and "civil money penalties”
‘are used interchangeably in the CMPL, the Regulations and this
becision and order.

3/ A person eligible for Medicaid benefits is defined at 42 C.F.R.
$430.1 and in the Maryland Medicaid regulations as a “recipient.”
The Medicaid recipients in issue are also referred to in this

Decision and Order as Medicaid beneficiaries or Medicaid patients.
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later amended the Notice by withdrawing the proposed assessment

and now seeks a $35,00U civil monetary penalty and a five year
suspension. The Respondent, pro se, challenges the I.G.'s proposed
imposition of a penalty and refutes the allegations, but does not
contest the proposed suspension,

JURISDICTIONAL AND PROCEDURAL BACKGROUND

The Respondent is a dentist practicing in Crisfield, Maryland.
For the period in issue, he was a Medicaid dental provider and
was required to comply with the terms of his Medicaid provider
agreement.

The 1.G.'s February 28, 1986 Notice to the Respondent alleges

that the Respondent improperly made a request for payment to
Medicaid patients on 147 occasions, and that these actions violated
the terms of the Respondent's provider agreement with the Medicaid
program, which required that the Respondent not "charge a

person for an item or service in excess of the amount permitted

to be charged." CMPL §1320a-7a (B)(2); Regulations §1003.102(b)(1)(ii);
COMAR 10.09.05 - Dental services 4/ The I.G. argued that while
Medicaid paid the Respondent a total of $3,005.30 for dental
services, the Respondent also made a request for payment from the
patients of an additional $845.00 for these same visits (including
$5.00 charged 143 times, and $10.00, $12.00, $18.00, and $90.00
each charged once) and that the Respondent designated each of these
147 requests for payment as an “exam" or an “office visit". 5/

See, FFCL/22, infra.

The I.G. argues, in effect, that the Respondent's actions give

rise to liability under the CMPL and Regulations because the 147
requests for payment to the Medicaid recipients were prohibited.

The I1.G. argues that the American Dental Association (ADA) standards
of practice specify that dentists should not bill for an “office
visit" when other services are performed, and that the State Medicaid
policy and regulations in effect during the period at issue

(August 20, 1981 through October 7, 1983) prohibited the billing

of Medicaid recipients for an "exam" or an “office visit" when
Medicaid was billed for dental services. The I.G. argues further
that: (1) the Respondent did not perform any additional services

for the "exam" or “office visit" charge, and (2) even if he did
perform additional services, the State regulations made it clear

4/7 The Maryland Medicaid program's regulations governing dentists
is published at Code of Maryland Annotated Regulations (COMAR)
10.09.05 - Dental Services. IG Ex 152/Attachments A&B.

5/ The I.G. attached a list of alleged improper violations ("Appendix")
to the February 28, 1986 Notice. See, FFCL/7, infra. Only 146 of the
147 listed violations are at issue. See also, footnote 23, infra.

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that the Respondent could not properly bill Medicaid recipients
personally for an "exam" or an "office visit" if he also billed
Medicaid for other dental services performed during the same
visit, because the "exam" or “office visit" fee was included in
the Medicaid payment to the Respondent for any other dental
services rendered.

In addition, the I.G. argues that the Respondent's prior guilty
plea to a misdemeanor count of Medicaid fraud (and the Maryland
Circuit Court's determination) in Criminal No. 4063 is a “final
determination" (for purposes of §1003.114(c) of the Regulations)
and operates to establish both the liability and the degree of
culpability of the Respondent in this case. The I.G. also

argues that all alleged aggravating circumstances were proven by
a preponderance of the evidence and that a penalty of $35,000 and
a five year suspension are appropriate. Finally, the 1.G. argues
that the Respondent is potentially liable for a penalty of $2,000
for each of the 147 improper requests for payment, for a total of
$294,000.00.

The Respondent filed an answer and a request for a hearing on

March 14, 1986. The Respondent does not contest the proposed
suspension, but argues that the proposed penalty is inappropriate. 6/
While the Respondent admits that he charged the Medicaid

recipients personally and also charged Medicaid for services
performed on the same day, as alleged by the 1.G., he denies
knowledge of wrongdoing and alleges that he thought he was only
charying the Medicaid patients for "non-covered" services rendered

at the same time "covered" services were rendered. He argues

that he was legally authorized (in accordance with materials

supplied by the Maryland Medicaid Program) to bill these Medicaid

patients as he did. The Respondent argues, in effect, that while

he designated the services performed for the Medicaid recipients

as an "office visit" or for an “initial exam," he actually performed
"non-covered" services, Next, the Respondent argues that liability
is not established by reason of section 1003.114(c) of the Regulations

Decause there is no “final determination," in that there is no

judgment of conviction on State criminal charges, only a plea of

guilty before judgment.

With regard to mitigating factors outlined in section 1003.106 of
the Regulations, the Respondent argues that the proposed civil
monetary penalty should be reduced because: (1) he already reimbursed

67 The Respondent stated in the preamble to his proposed Findings of
Fact that he “consents to being excluded as a provider." The
Respondent also made significant concessions in his brief, his
proposed findings of fact and conclusion of law, his reply brief,

and in the September 15, 1986 "Stipulations." These concessions
included his acceptance of many of the I.G.'s proposed findings

of fact and conclusions of law.
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the State of Maryland pursuant to his plea agreement; (2) he made

no money on the Medicaid patients in question (he alleged that he
suffered a 22% loss); (3) his financial condition is very grave

{he alleged that he could not afford an attorney in this case);

(4) he cooperated fully in the investigation of this case; (5) he
has no prior offenses and has a good reputation in the community

for voluntarily contributing his time to indigent care and community
activities; (6) he had no premeditated fraudulent plan (i.e., he
made an unintentional error because the Maryland Medicaid regulations
were unclear, contradictory, and confusing); and (7) the penalty
proposed by the I.G. is disproportionate to the offense alleged.

A prehearing meeting was held on April 21, 1986 and a prehearing
conference was held on July 23, 1986, both in Washington, D.C. A
Prehearing Order was issued on July 30, 1986 and a Supplemental
Order was issued on August 12, 1986. Prehearing and hearing
procedures, opportunities for discovery, and rights under the CMPL
and Regulations were discussed at the meeting, at the conference,
and were discussed in the two Prehearing Orders. A_ schedule was
set forth regarding hearing preparations, including discovery,
exchanges of proposed exhibits and lists, and the submission of
prehearing motions. Extensive discovery was conducted. Also,
many telephone conferences were held to assist the parties during
the prehearing process. 7/

The parties filed Stipulations, dated September 15, 1986. Based

on the Stipulations, Maryland State Court documents, and the
parties' briefs on the question of the effect of the Respondent's
prior guilty plea in his criminal case, I issued a Prehearing
Ruling on September 19, 1986. In the Ruling, I held that the

I.G. had established liability in this case by proving that the
Respondent's prior plea of guilty and the State Court's disposition
of the plea are binding on the Respondent, pursuant to Section
1003.114(c) of the Regulations.

A formal hearing was held in Snow Hill, Maryland on November 18

and 19, 1986 and in Princess Anne, Maryland on November 20, 1986,

At the hearing, the parties were afforded a full opportunity to
present and have relevant evidence entered into the record, to
present and cross-examine witnesses, and to present statements,
motions, and argument. One witness testified on behalf of the I.G,
and ten witnesses testified on behalf of the Respondent. The

I.G. was represented by Thomas Herrmann, an attorney with the

Office of General Counsel, Inspector General Division; the Respondent
was pro se. 8/

77 In addition, the Senior Staff Attorney for this Office (Gerald
P., Choppin, Esq.) spent many hours explaining prehearing and
hearing procedures to the Respondent.

8/ The Respondent conducted his own defense in this case.
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The parties were given the maximum time allowed under the Regulations
to submit post-hearing written briefs and proposed findings of

fact and conclusions of law. The I.G. and the Respondent presented
post-hearing briefs, proposed findings of fact and conclusions of
law, and reply briefs.

THE GOVERNING LAW AND REGULATIONS

I. General Provisions of The Civil Monetary Penalties Law (CMPL)
and Reyulations 9/ 10/

section 1320a-7a of the CMPL (§1128A of the Act) grants authority
for the 1.G. to issue a Notice to impose civil money penalties

and assessments ayainst a medical provider wno the I.G. determines:
(1) has presented or caused to be presented any false or improper
claims for payment under tne Medicare, Medicaid, or the Maternal

and Child Health Services Block Grant Programs; or (2) presented or
caused to be presented a request for payment to a Medicaid recipient
or Medicare beneficiary in violation of the terms of a respondent's
Medicaid or Medicare provider ayreement. See, Regulations §1003.102.
Once a respondent is subject to a penalty or an assessment,

section 1320a-7(c) of the CMPL (§1128(c) of the Act) grants
authority for the I,G. to include a proposal to suspend the medical
provider from participation in the above named public assistance
programs. See, Regulations §§1003.105, 1003.107.

The intended purpose of imposing a civil money penalty is to
deter persons from presenting false or improper Medicare or
Medicaid claims (or from making requests for payments to Medicaid
recipients or Medicare beneficiaries in violation of a provider

97 The CMPL was added to the Act Dy section 2105 of the Omnibus Budget
Reconciliation Act of 1981 (Pub. L. No. 97-35; 95 Stat. 357,

789-92 effective August 13, 1981), amended in 1982 (Pub. L. No.
97-248; 96 Stat. 380), amended in 1984 (Pub. L. No. 98-369; 98

Stat. 1073, 1089, 1100), and amended in 1986 (Pub. L. No. 99-50;
October 21, 1986). The 1986 Amendments are not applicable to this
case. All references to the CMPL in this Decision and order are to
the codified sections; see 42 U.S.C.A. §§1320a-7a and 1320a-7(c)

(1983 and 1985 Supp.).

10/ The Regulations (currently found at 42 CFR §§1003.100 to
1003.133) became effective on September 26, 1983 (48 Fed. Reg.
38827 et seg., August 26, 1983). They have been amended a few
times Since I983 to make minor changes and additions and were
moved from 45 CFR to 42 CFR in 1986 (See 50 Fed. Reg. 37371 et
Seqg., Sept. 13, 1985; 51 Fed. Reg. 18790 et seg., May 22, 1986;
51 Fed. Reg. 34764 et seq., Sept. 30, 1986; 51 Fed. Reg. 37577
and 39528, Oct. 23 and 29, 1986).
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agreement); the purpose of imposing an assessment is to make the
yovernment whole for its costs and any damages resulting from such
improper acts; the purpose of a suspension is to protect program
integrity. See, H.R. Rep. No. 97-158, 97th Cong., lst Sess. Vol
III, 329; Preamble to the Regulations (48 Fed. Reg. 38827 to
38836, August 26, 1983).

The Regulations implement the provisions of the CMPL, delegate
authority from the Secretary to the I.G. to make determinations
regarding civil monetary penalties, and provide a respondent

the right to a hearing before a federal Administrative Law Judge
(ALJ).

The I.G. has the burden of producing and proving by a preponderance
of the evidence (1) liability under the CMPL and Regulations, and (2)
agyravating circumstances. A respondent has the Durden of producing
and proving by a preponderance of the evidence any mitigating
circumstances that would justify reducing the amount of the

penalty, assessment, and suspension. Regulations §1003.114.

The CMPL and Regulations provide for a civil money penalty of
"not more than $2,000" for each improper request for payment made
to a Medicaid recipient or Medicare beneficiary. Regulations
§1003.103.

The Regulations require that a full and fair trial-type hearing be
conducted by an ALJ. Regulations §1003.115. Either party may

seek review by the Secretary of DHHS, within 60 days, of an ALJ's
decision and order; judicial review of any final decision and

order may also be sought. Regulations §§1003.125, 1003.127.
Judicial review of penalties and assessments is in the appropriate
United States Court of Appeals, and judicial review of a suspension
is in the appropriate United States District Court.

II. Liability Under the CMPL and Regulations

A. Requisite Proof to Establish Liability

Liability will not attach under the CMPL and the Regulations

unless the I.G. establishes liability by a preponderance of the
evidence adduced during the proceedings in a case. The Regulations
allow the I.G. to establish liability in either of two distinct
ways. The first requires the I.G. to prove the merits of the

case by a preponderance of the evidence. To do this, the I.G.

must prove each of the requisite elements of liability set forth

in the CMPL and Regulations for each “item or service," "claim,"
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or "request for payment" that tne I.G. alleyes to be false or improper.
see CMPL §1320a-7a; Regulations §§1003.102, 1003.114(a). 11/ 12/
13/ ae

The second manner ot estaPlishing liability is akin to collateral
estoppel. In order for liability to be established in this manner,
the I.G. must prove that a “final determination" has been rendered
ayainst a respondent in a prior proceeding (within the meaning of
§1003.114(c) of the Regulations), that the “final determination"
involved the same subject matter in issue, and that the key
elements of liability under the CMPL and Regulations were either
synonymous with, or encompassed within, a standard of liability
found in the statute governiny the prior proceeding.

B. The Two Primary Bases for Liability and Their £lements

There are two primary bases upon which a person can be subject
to liability under the CMPL and Regulations. See, Regulations
§1003.102(a)(1) and (b)(1). 14/ Each has its own elements (or
standards) which must be proven in order for liability to attach.
The first basis for liability requires the I.G. to establish that
false or improper claims were presented or caused to be presented
by a respondent and that the claims contained items or services

Ti/ Section 1320a-7a(h)(2) of the CMPL and §1003.101 of the Regulations
define a “claim" as an application for payment submitted for one or
more items or services for which payment may be made under the Medicare
(Title XVIII), Medicaid (Title XIX), or Maternal and Child Health
Services Block Grant (Title V) programs.

12/ Section 1320a-7a(h)(3) of the CMPL and §1003.101 of the Regulations
define an “item or service" to include any item, device, medical

supply or service claimed to have been provided to a patient and

listed in an itemized claim for payment.

13/ Section 1003.101 of the Regulations defines "request for payment"
as an application for payment by a medical provider to a Medicaid
recipient or Medicare beneficiary for an “item or service" which

is covered under Medicaid or Medicare. The terms "bill," "charge,"
and “request for payment" are used interchangeaDly in this Decision
and Order.

14/ The CMPL and Regulations also set forth other lesser known bases
for liability which are not relevant to this case and which have

not yet been tested under the CMPL and Reyulations. See, e.g.,
Regulations §1003.102(a)(2) and (b)(2).
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which the respondent "knew or had reason to know" were "not
provided as claimed" (emphasis added). CMPL §1320a-7a(1)(A);
Regulations §1003.102(a)(1). 15/

The second basis for liability under the CMPL and Regulations
requires the 1.G. to establish that a request for payment was
presented or caused to be presented to a Medicaid recipient

or Medicare beneficiary by a respondent, and that such action
violated a provider agreement or other agreement. CMPL §1320a-
7a(B)(2); Regulations §1003.102(b)(1). This is the basis in
issue in this case. This is the first case of its type to be
heard under the CMPL and Regulations. In order for liability to
attach, the I.G. must prove that a respondent: "(1) has presented
or caused to be presented a request for payment in violation of
the terms of: ... (ii) an agreement with a State agency not to
charge a person for an item or service in excess of the amount
permitted to be charged." Regulations §1003.102(b) (1)(ii). 16/ 17/

The most significant difference between these two bases of
liability is that for a person to be held liable under the first
he must "know or have reason to know;" scienter is required.
There is no such requirement under the second; strict liability

157 Under §1320a-7a (a)(1)(A) of the CMPL and §1003.102(a)(1) of
the Regulations, penalties and assessments may be imposed against
(1) any "person" (medical provider) who (2) “presented or caused
to be presented" (3) one or more Medicaid (or Medicare) "claims"
(4) containing one or more medical “items or services" (5) to the
Medicaid (or Medicare) "agency" for payment (6) that a Respondent

"knew or had reason to_ know" (7) "were not provided as claimed"

(emphasis added).

16/ Since the Respondent in this case has admitted he made the

146 requests for payment to the Medicaid recipients and filed
claims with Medicaid for dental services performed on the same
day, the only element of liability left for the I.G. to prove is
that the actions of the Respondent violated his provider agreement
with Medicaid (i.e., that the Respondent was prohibited from
making the 146 requests for payment to the Medicaid recipients).

17/ It is noted that the CMPL calls for imposition of both a
penalty and an assessment when liability attaches in either of
the two primary fact categories outlined above. The Regulations,
however, provide for the imposition of a penalty and an assessment
in the first, but only for the imposition of a penalty in the
second (the situation presented in this case). See, Regulations
§1003.104, The I.G. withdrew the proposed imposition of an
assessment in this case to comport with the Regulations.
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attaches when it is proven that a respondent's provider agreement
has deen violated by the presentation of improper requests for
Payment to Medicaid recipients or Medicare beneficiaries. 18/

III. The Medicaid Law and Program in Maryland

The Medicaid proyram (Title XIX of the Act; 42 U.S.C. §1396 et seq.)
was created by Congress to assist states in providing medical

care to needy persons. If a state chooses to have a Medicaid

program, it must submit, for approval Dy the Secretary of DHHS,

a State Plan which meets federal statutory and regulatory requirements.

The Maryland Medicaid program is administered py the Maryland
Department of Health and Mental Hygiene (MDHMH). MDHMH is responsible
for determining eligibility for services, establishing standards

for the services provided, establishing standards and requirements

for the submission of claims for reimbursement, setting payment

levels for providers of services, processing claims, paying

claims, and providing reyulations and guidance concerning what

acts constitute a violation of a provider agreement. MDHMH

issues regulations and transmittals which notify providers and
beneficiaries about the Medicaid rules, regulations, and practices.
Reimbursable dental services may be provided to Medicaid beneficiaries
by either a facility or an individual who has voluntarily chosen

to participate in Maryland's Medicaid program. See 42 C.F.R.
§44U.100. These providers must qualify for participation by

Meeting certain criteria and must enter into a provider ayreement

with the State. I.G. Ex 151 B/1 to 2.

There is no dispute that a dental provider is prohibited by the
Maryland Medicaid regulations from personally charginy a Medicaid
recipient for "covered" services or for services "not covered as
separate procedure." "Covered services" are those services

Medicaid pays for. Services "not covered as separate procedure"

are those services that are included in the Medicaid payment to

the provider for the other "covered" services rendered. "Non~covered"
services are generally those services that Medicaid does not pay

for. In some instances, a Medicaid dental provider can charge a

187 The CMPL and the Regulations provide relief for those who might
accidentally fall within these strict liability provisions. For
example, the Regulations specify that an ALJ should find it a
“mitigating circumstance" where the facts prove that a medical
provider made improper requests for payment to Medicaid recipients
as a “result of an unintentional and unrecognized error" and
“corrective steps were taken promptly after the error was discovered."
Regulations §1003.106(b)(2). Additionally, the Regulations

specify that other circumstances of a mitigating nature should be
taken into account when "the interests of justice" so require.
Regulations, §1003.106(b)(2), (5).
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Medicaid recipient for "non-covered" services rendered even when
"covered" services are also rendered during the same visit, and
in other instances he cannot. See, IG Ex 152/Attachment A&B; IG
Ex 154; and R Ex 9A,

ISSUES

Since liability has been established by reason of a prior "final
determination," since the I.G. withdrew the proposed assessment,
and since the Respondent does not contest the I.G.'s proposed
suspension, the only remaining issues are:

1) whether the amount of the proposed penalty of $35,000
is reasonable and appropriate under the circumstances of this
case;

2) whether the I.G. proved by a preponderance of the
evidence the aggravating circumstances alleged in the I.G.'s
Notice; and

3) whether the Respondent proved by a preponderance of
the evidence any mitigating circumstances that would justify
reducing the amount of the penalty.
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FINDINGS OF FACT AND CONCLUSIONS OF LAW 19/ 20/ 21/

Having considered the entire record, the arguments, objections,
motions, and submissions of the parties, and beiny advised fully
herein, I make the following Findings of Fact and Conclusions of
Law:

l. For the purposes of this case, I have taken judicial notice
of the statutes of the United States, the regulations of the
Secretary of DHHS, all other pertinent regulations of the
United States, the statutes of the State of Maryland, the
regulations and transmittals of the Maryland Medicaid Program,
and all other pertinent regulations of the State of Maryland
as they existed during the time at issue in this case.
Stip/A.l, 2.

2. This proceeding is governed by the CMPL and the Regulations.
Stip/A.3.

3. The Secretary has delegated his authority to take action under
the CMPL and the Regulations to the I.G. and to the I.G.'s
delegates. Stip /A.4 to 7.

19/7 References to the briefs, the transcript, the stipulations,
hearing exhibits, and to these Findings of Fact and Conclusion of
Law are as follows:
I.G.'s Brief
L.G.'s Reply Brief
Respondent's Brief
Respondent's Reply Brief
Transcript
Stipulations
I.G. Exhibit
Respondent's Exhibit
ALJ Findings of Fact

and Conclusions of Law

IG Br/page number

IG Rep Br/page number

R Br/page number

R Rep Br/page number

TR volume number/page number
Stip/number

IG Ex number/page number

R Ex number/page number

FFCL/number

20/ Some of the findings and conclusions proposed by the parties
were rejected or modified because they were not supported by the

evidence in the record and some have been incorporated elsewhere

in this Decision,

21/ Any part of this Decision and Order preceding or following
the Findings of Fact and Conclusions of Law which is obviously a
finding of fact or conclusion of law is hereby incorporated as a
finding of fact or conclusion of law; I refer primarily to the
facts and conclusions that were not disputed.
lo.

ll.

12.

13.

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On February 28, 1986, Eileen Boyd, the Deputy Assistant I.G.,
Civil Fraud Division, DHHS, issued a Notice informing the
Respondent of the I.G.'s intent to impose penalties of $35,000
and assessments of $6,010.60, pursuant to §132Ua-7a of the
CMPL (§1128 of the Act), and a five year suspension from
participation in Medicare and Medicaid pursuant to §1320a-7(c)
of the CMPL (§1128(c) of the Act). Stip/B.12.

On October 28, 1986, the I.G. withdrew the proposed assessments.
The I.G, did so because section 1003.102(b)(2) of the Regulations
does not provide for an assessment in this type of case.

Tne I.G.'s Notice was based on a determination that the
Respondent presented or caused to be presented to Medicaid
recipients 147 reyuests for payment in violation of his
agreement witn the Maryland Medicaid Program “not to charge
for an item or service in excess of the amount permitted to
be charged." Reyulations §1003.102 (b)(1)(ii).

One of the alleged violations cited in the Notice occurred
prior to August 14, 1981. IG Ex 144. The Respondent is not
liable for violations prior to August 13, 1981, the effective
date of the CMPL. See, Griffon v. United States Department of
Health, 802 F.2d 146 (5th Cir. 1986). Thus, only 146 of the
alleyed violations are at issue here.

On March 14, 1986, the Respondent requested a hearing before
an Administrative Law Judge; the heariny was held from November
18 to 20, 1986.

Tne Respondent no longer contests the suspension; he contests
only the penalty.

The CMPL and Regulations authorize the Secretary to impose
civil monetary penalties against any person who presents or
causes to be presented a request for payment which is in
violation of the terms of an agreement with a State Medicaid
agency "not to charge a person for an item or service in
excess of the amount permitted to be charged." CMPL §1320a-7a
(B)(2); Regulations §1003,102(b)(2).

Any person subject to a penalty may be suspended from
participating in the Medicare and Medicaid programs. CMPL
§1320a-7(c).

The I.G. has the burden of producing and proving liability by
a preponderance of the evidence. Regulations §1003.114.

The maximum penalty that could be imposed against the Respondent
in this proceeding is $292,000.00.
14.

15.

16.

lj.

18.

19.

20.

21.

22.

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The purpose of a penalty is to deter persons from presenting
false or improper Medicaid or Medicare claims or from making
requests for payment to Medicaid recipients or Medicare
beneficiaries in violation of a provider agreement. H.R.
Rep. No. 97-158, 97th Cong., lst Sess. Vol. III, 329.

Civil money penalties substantially in excess of the amount
actually collected may be imposed against a respondent;
Mayers v. U.S. Department of Health and Human Services, 806
F.2d 995 (11th Cir. 1986). In Mayers the provider claimed
$145,550 and was reimbursed $24,697.73 by Medicare; the
penalties and assessments upheld totalled $1,791,000
(approximately 12 times the amount claimed and 70 times the
amount collected).

In making the determination on the appropriate amount of a
penalty to be imposed, the statute and implementing regulations
direct an Administrative Law Judge to consider aggravating
and mitigating factors. CMPL §1320a-7a; Regulations §1003.106.

The I.G. has the burden of proviny the existence of aggravating
factors, and the Respondent bears the burden of proving the
existence of any mitigating factors. Each party must meet his
burden by a preponderance of the evidence. Regulations
§1003.114.

Agyravating and mitigating factors include the nature and
circumstances under which the claims or requests for payment
were made, the degree of a respondent's culpability, prior
offenses, financial condition of a respondent, and any other
matters that justice might require be considered. CMPL
§$§1320a-7a(c), 1003.106(a)(b).

The Maryland Department of Health and Mental Hygiene (MDHMH) is
the authorized State Medicaid Agency for the State of Maryland.
MDHMH administers the Medicaid program in Maryland. Stip/B.1l, 2.
See, 42 U.5S.C. $1396 et seg.

The Respondent, a practicing dentist, opened an office in
Crisfield, Maryland in 1979 (TR III/532).

On August 10, 1979, the Respondent, Dean B. Massey, D.D.S.,
filed an application to participate in the Maryland Medicaid
program. He was enrolled in the program, entered into a
provider agreement with MDHMH, treated Medicaid recipients,
and submitted claims for reimbursement to MDHMH using provider
number 4-97810. Stip/B.3, B.4.

The Respondent admits, and I find, that: (A) he presented

or caused to be presented 146 requests for payment from
Medicaid recipients (from August 20, 1981 to October 7, 1983)
and designated these charges as an “office visit" or “exam";
and (B) he presented or caused to be submitted 146 claims for
Medicaid reimbursement and received payment, as specified in
the Appendix to the I.G.'s February 28, 1986 Notice. Stip/B.5,
Stip/B.7A. See also, TR 1/30, 165, 178, 183, 184; TR III/556.
23.

24.

25.

26.

27.

28.

- 14 -

The MDHMH promulgated regulations, guidelines and transmittals
governing the participation of dental providers in the Medicaid
program during the relevant period. See, COMAR 10.09.05 -
Dental Services.

Dental providers participating in the Medicaid program are
opligated to know about and to comply with the yoverning
Medicaid regulations and requirements. IG Ex 151B/1~2; TR
II/339. See also, Decision and order in Inspector General
v. Scott, OHCMP/DGAB Docket No. C-15, at 27-28.

At all times in issue, the Maryland Medicaid regulations
governing dentists participating in the Maryland Medicaid
Program provided that a dentist must “[a]ccept payment by

the Department as payment in full for services rendered and
make no additional charge to any person for covered services"
(emphasis added). COMAR 10.09.05.03; IG Ex 152/7Attachment
A/560, Attachment B/561,. From July 1, 1982 through the end
of the period in issue, this also applied to services “not
covered as separate procedure."

In 1983, the Dental Consultant for the Medical Assistance
Compliance Administration of the Maryland Medical Assistance
Program told the Respondent that a dentist could contract
with a Medicaid recipient for non-covered services paid for
by the recipient. IG Ex 154,

MDHMH regulations specified which "dentally necessary"
services were "covered services," which were “not covered as
separate procedure," and which were “non=covered" services.
Based on the record, I interpret the regulations to mean

that Medicaid pays for "covered" services, that a dental
provider is prohibited from charging a Medicaid recipient
separately for "covered" services or for services "not
covered as separate procedure" (NCASP), and Medicaid did not
pay for non-covered services. Based on the record, I also
interpret these regulations to mean that a dental provider
could charge a Medicaid recipient personally for "non-covered"
services in certain instances and that in certain other
instances a dental provider was prohibited from doing so.
COMAR 10.09.05.04, 05; IG Ex 152/Attachment A/561, Attachment
B/562; 154,

The MDHMH regulation in effect on January 1, 1981 listed
“covered" and "non-covered" services; neither "exam" nor
“office visit" were listed as either "covered" services or
“non-covered" services. Non-emergency services for recipients
2l years of age or older were listed as "non-covered" services.
COMAR 10.09.04, 05; IG Ex 152/Attachment A/561-562.
29.

30,

31.

32.

33.

34,

- 15 -

On March 22, 1982, the MDHMH sent dental providers a new

list of covered, NCASP, non-covered services, and a fee
schedule, all effective July 1, 1982. Initial, periodic,

and emergency oral examinations were listed as NCASP.

Office visits were listed as "not covered." R Ex 9B/Appendices
A, C.

None of the Respondent's “exam" charyes to Medicaid recipients
occurred after March 1982; the Respondent testified that he
understood tne March 1982 MDHMH issuance to prohibit such
charges. TR III/55, 569, 658.

The Respondent testified that after March 1982 he continued

to provide the same services (for which he had been charging
Medicaid recipients $5.00 as an "exam" and an “office visit"),
but listed the charge solely as an “office visit." TR III/659.
He testified that part of the services were oral hygiene
instruction (listed in the MDHMH March 1982 issuance separately
as a non-covered service), and the presentation of a $1.50
toothbrush and an oral hygiene kit. Id. He testified that

he was told Dy MDHMH that examination “fees" (services) were
“subsumed" under prophylaxis, a covered procedure. TR

III/658; R Ex 9 B/ Appendix A, C.

In December 1982, MDHMH revised the regulations governing
gentists participating in the Maryland Medicaid Proyram,
effective January 1, 1983, and sent all dentists MDHMH

Dental Transmittal No. 7 notifying them of the revision.

The listing of office visits as “not covered" was not changed.
IG Ex 152/2; 152/Attachments B and Cc.

MDAHMH Dental Transmittal No. 7 stated that program recipients
would be notified of the revised regulations. Attached to
Transmittal No. 7 was a copy of the recipient notice. The
notice summarized the changes, and stated in part, that
MDHMH would “den{y] separate payment for office visits and
house calls, as payment for these visits is included in the
rogram payment for actual services rendered emphasis
added). IG Ex 152/Attachment C/2, 10. See also, IG Ex
152/Attachments A, B, C/10; R Ex 7; R Bx 11/2. In each
instance, the Respondent was absolutely prohibited from
charging Medicaid recipients for an “office visit," a
"non-covered" service.

At all times in issue here, MDHMH regulations prohibited
dentists from billing recipients for "covered" services.

Prior to January 1, 1983, MDHMH regulations did not specifically
prohibit a dentist from billing a recipient for an “office
visit." After January 1, 1983, a dentist could not bill a
recipient for an “office visit." IG Ex 152/Attachments A,

B, C.
35.

36.

37.

38.

39.

40.

41.

- 16-

General Medicaid policy is that program reimbursement is
intended to cover provider charyes in full; providers are not
allowed to bill Medicaid patients personally for any of the
covered or NCASP services provided during a visit. TR II/330.

MDHMH regulations governing dentists specify that a “provider
shall supmit a request for payment" on a claim form. The
form contained a certification statement which read (until
July 1, 1982):

I certify that I have rendered the professional
care shown on this report, and have made no

charge, and will accept no payment from the patient
or patient's family. . .

(and after July 1, 1982):

I certify that the services shown on this report
were rendered and that no charge has been or will
be made for payment from the patient, the
patient's family or other source, except as
authorized by the program.

IG Ex. 151/B; Stip/B9; See IG Ex 1A to 143A and 145A to 147A.

The Respondent employed his wife, Gail Massey, as a “receptionist,

assistant, business manager and hygienist." TR 1/29-30.

Gail Massey and Melinda Sterling (hired in March 1982), were
responsible for billing patients, insurance companies, and
the Medicaid program for services rendered by the Respondent.
Ms. Massey and Ms. Sterling did the billing in accordance
with instructions given directly by the Respondent. TR 1/36,
164.

During the period in issue, all services rendered by the
Respondent were recorded on office ledger cards by either
the Respondent or his staff. TR 1/36, 41, 54, 183, 186.
With respect to Medicaid recipients, the office ledger card
showed the services rendered and amount claimed from the
Medicaid program, and also any charge to the recipient. TR
I/4l. See, e.g., IG Ex 1B.

A Medicaid claim form would be prepared from the information
recorded on a patient's ledger card. TR 1/186. The claim
form was subsequently signed by the Respondent and submitted
to MDHMH for payment. Stip/6.

When a patient was charged, a copy of the office ledger card
was sent to the patient as a Dill. TR I/36; IG Ex 86C.
42.

43.

44,

45.

46.

47.

48.

49.

-17-

All billing instructions, charges made, bills presented

and claims presented were yenerated by the Respondent. ‘TR
I/165, 178, 186. The Respondent "read the [Medicaid] Manual
completely," and would either write on a patient's ledger
card after rendering treatment or instruct personnel what

to write. TR 1/37, 42, 54.

There are 23 instances in which the Respondent billed a
Medicaid recipient $5.00 for “exam" or “emery. exam"

in conjunction with an “office visit," and one instance in
which the Respondent billed a Medicaid recipient $5.00

for an “oral exam." All 24 of these instances occurred
between August 17, 1981 and March 25, 1982. The Respondent
added the words “office visit" to nine of these records

some time after September 1983. FFCL/76; IG Notice/Appendix.

The Respondent admits that the charges in issue ranged from
$5.00 (e.g., IG Ex/1B) to $90.00 (IG Ex/72B); and that he
submitted claims to the Maryland Medicaid program for services
rendered on the same dates as these charges for “exam" or
“office visit" were made. See, IG Ex/1lA, B to 143A, B and
145A, B to 147A, B; Stips/B6, B7.

The Respondent stated that he designated certain charges to
recipients as "office visits" for various reasons. These
included (1) the need to save space on the ledger card; (2)

the need to "separat[e] Medicaid charges from private charges,"
and (3) the need to facilitate the billiny process. TR

1/41; TR III/596, 622.

With regard to why the Respondent charged the Medicaid
recipients, the Respondent testified that the terms
“examination" and “office visit" are “not synonymous .. ."
and that there are differences between the two services. TR
III/592-593. He also testified that while he charyed $5.00
for an "office visit," the same $5.00 fee at times was for
both an "exam" and an “office visit" and that he could have
called the fee anything. TR III/618 to 664.

On September 25, 1983, the Respondent received from MDHMH
the revised Maryland Medical Assistance Proyram Provider
Manual for Dental Services. TR I/188-189, 195; TR III/557.

On October 7, 1983, the Respondent received a complaint from
a Medicaid recipient questioning his "office visit" charge.

The Respondent then stopped billing Medicaid recipients for

“office visit." Tr I/171-173, 192; TR III/566.

The Respondent had a policy of billing a $2.00 per month
"interest" charge on overdue accounts. TR I/203. Interest
was assessed on unpaid “exam" or “office visit" charges
after a three month period had elapsed. IG Ex/16B, 43B,

49B, 86B, 109B, 1348, 135B. The Respondent stopped assessing
interest on unpaid balances of Medicaid recipients after the
State began its investigation. TR I/18l.
SU.

Sl.

52.

33.

54.

55.

- 18 -

In 1984, the Maryland Medicaid Fraud Control Unit (MFCU)
conducted an investigation of the Respondent's participation
in the Medicaid proyram. IG Ex 151B/3. The MFCU determined
that the Respondent charged and collected $955.00 from
Medicaid recipients for 168 “office visits" occurring

on the same dates as those appearing on signed claim forms
submitted to MDHMH for reimbursement of covered services.

IG &x 151B/4; Stip/B9.

The MFCU determined that the Respondent had given various
justifications for the "exam" or “office visit" charye: he
characterized it as an “office fee" (IG Ex 17C) or “service
cnarye" (IG Ex 26C, 49D, 59C); he stated that Medicaid did
not cover all his costs or charges for services rendered
(IG Ex 14C, 37C, 81D, 97D, 98D, 137D); and he stated that
the program did not pay for specific services rendered to a
recipient, such as tooth extraction (IG Ex 20C) or teeth
cleaning (IG Ex 103C).

The Respondent or members of his staff told Medicaid recipients
that the "office visit" fee was charged because Medicaid

would not cover the entire cost of services rendered (IG Ex

15C, 15D, 37C, 38C, 49D, 71E, 81D, 82D, 93D, 93E, 94D, 948,

95D, 95E, 98F, 99F, 135E) or would not cover specific services
rendered (e.g., teeth extractions (IG Ex 2UC, 20D, 20E, 21C, 21D,
21E, 22C, 22D, 22£) (e.g., cleaning of teeth - IG Ex 103F, 104F,
105F) (e.g., x-rays - IG Ex 150A).

The MFCU determined, and the I.G. proved, that on one occasion
the Respondent refused to treat a Medicaid recipient until

the requested “office visit" fee had been paid. IG Ex 72c,
725.

The MCFU determined, and the I.G. proved, that during the
period in issue, the Respondent charged Medicaid patients,

put not private patients, an “office visit" fee. IG Ex 34

C, 47C. Patients who were not using a Medicaid card were not
charged a separate amount for an "office visit" because the
Respondent incorporated that fee into his charge for specified
services rendered, TR I/110-121, 122-123; IG Ex 34B, 34C,
34C, 47B, 47C.

The MFCU determined, and the I.G. proved, that the Respondent had
charged Medicaid recipients monthly interest of $2.00 on

their outstanding “office visit" charges. IG Ex 16B, 48B, 49B,
86B, 109B, 134B, 135B. One recipient was billed interest

for seven months until she paid the $5.00 “office visit" fee

in addition to $14.00 interest. See, IG Ex 86B; IG Ex

151B/4; Stip/B9. See, also, IG Ex 50C, 130C, 131C, 132Cc,

137C, 137D, 147D, 153B/8.
56.

57.

58.

59.

60.

6l.

62.

- 19 -

Based on the MFCU investiyation, the Respondent was charged
by the Maryland Attorney General in Criminal Information No.
4063 on June 14, 1984 with one count of Medicaid Fraud

(State of Maryland v. Dean Bb. Massey) in violation of MD.
ANN. Code Art. 27, §§230B(D)(1), 230C. Stip/B.8A. The
conclusions in Criminal Information No. 4063 are incorporated
herein by reference,

The Respondent agreed and stipulated to a Statement of Facts
in Maryland Criminal No. 4063. IG Ex 151B; Stip/B.9. These
facts are incorporated herein by reference.

The Respondent admits, and I find, that on November 28,

1984, the Respondent pled guilty in the Circuit Court for
Somerset County to one misdemeanor count of Medicaid Fraud

in Criminal No. 4063 (Art. 27, §§230B(b)(1), 230c), encompassing
the 146 requests for payment in issue in this case, as set

forth in the Appendix to the I.G.'s Notice. Stip/B.10A.,
B.11lA.; IG Ex 151E.

Based on the Respondent's guilty plea in Maryland Criminal No.
4063, the Office of Inspector General conducted an investigation
of the Respondent's participation in the Maryland Medicaid
Program. TR I/89-93,.

On September 19, 1986, I issued a prehearing Ruling which
held that the I.G, had established liability in this case
by proving that the Respondent was bound by a prior
"final determination" in Criminal Case No. 4063, pursuant
to section 1003.114(c) of the Regulations. The September
19, 1986 Ruling in this case is reconfirmed.

Dr. Massey was represented by counsel at his trial in Maryland
Criminal No. 4063. The trial was held on November 28, 1984
before the HonoraDle Alfred T. Truitt, Jr., Associate Judge,
First Judicial Circuit Court for Somerset County, Maryland,
Dr. Massey pled guilty at that time to the charge as set

forth in “Criminal Information No. 4063." The State court

had his plea agreement and a signed "Statement of Facts"
before it when the Court accepted the Respondent’s guilty

plea and made its determination of guilt.

Appended to the stipulated "Statement of Facts" (IG Ex 151B)
was a listing of those Medicaid recipients who were charged
an “office visit" or “exam" fee for services allegedly
rendered on the same day as covered services for which Dr.
Massey submitted a claim to tne State Medicaid program.
70.

71.

72.

73.

74.

75.

- 21-

The Respondent's practice of billing Medicaid recipients
for an "exam" or an “office visit" was a deviation from
accepted dental practices; Medicaid recipients were never
charged such fees by other doctors and dentists. IG Ex
118C, 118D, 118E, 154, 155, 156; TR I/149, 154. This is an
aggravating factor. TR I/149, 154; IG Ex 1ll8c, b, E.

A random sample of the chanyes which the Respondent made to
non-Medicaid patients duriny the period at issue in this case
shows that the Respondent billed non-Medicaid patients only

for specitied services and that he did not bill non-Medicaid
patients additional amounts for "office visits." IG Ex

158/6, 14, 31, 35, 50, 57, 58, 59, 71; TR I/113, 114, 117,

118, 120-122. The Respondent billed Medicaid recipients

$5.U0U and more for an "office visit," in addition to the amounts
billed the Medicaid program for various dental services

which he rendered to the recipients on the same dates as the
requests tor payment for “office visits. IG Ex 1A to I/143B

and 145A to 147D. The Respondent bDilled the Medicaid program
approximately the same amount as he bdilled private patients

for the same or similar dental services. See, TR 113-122;

and compare, IG Ex 1548/6, 14, 57, and 58, with IG Ex 3A, 3B,

6B, 29B, 498; and compare, IG Ex 158/31 with IG Ex 10A.

Under these circumstances, justice requires that the Respondent's
act ot billing Medicaid recipients an additional $5.00 for

an “office visit" be considered an aggravating circumstance.

In one instance, the Respondent refused to treat a Medicaid
recipient until she had paid a $90 "office visit" charge.
IG Ex 72C, 72E. Justice requires that this be considered a
Major aygravating circumstance.

The Respondent assessed a $2.00 per month “interest" charge
against Medicaid recipients for unpaid balances of three
months or less. FFCL 49; IG Ex 158/9, 34, 62. This is an
aggravating circumstance.

The I.G. alleged that, in addition to the violations set out

in the Notice, the Respondent had billed the Medicaid program
for services which he had not provided as claimed, and that

this was an aygravating circumstance. I find that the I.G,

has not proven these allegations as an agyravatiny circumstance.

The I.G. based his proposed penalties of $35,000 in part on
one alleged violation that occurred prior to August 13,
1981, the effective date of the CMPL. FFCL/7. This is a
mitigating circumstance.
63.

64,

65.

66.

67.

68.

69.

- 20 -

Based on the evidence in this record, I find and conclude

that the State Court's determination was a judgment of guilt,
that the Court's judgment of yuilt was a "final determination,"
and that the Court's judgment of guilt is conclusive and binding
on the Respondent by reason of section 1003.114(c) of the
Regulations,

The facts distinctly put at issue and directly determined by
the trial judge in Criminal No. 4063 are those stipulated to
by the Respondent in the November 26, 1984 "Statement of
Facts" and those set forth in the November 28, 1984 transcript
of proceedings in Criminal No. 4063. The questions of law

put at issue and directly determined by Judge Truitt in
Criminal No. 4063 are set forth in the "Criminal Information"
and subsequent plea agreement, as evidenced by the November
28, 1984 transcript of proceedings and the docket sheet in
Criminal No. 4063. These documents establish that the
Respondent admitted that: (1) he made the 146 requests for payment
from Medicaid recipients at issue in this case; and (2) he
falsely certified on Medicaid claims (for dental services
provided at the same time as the alleged services for which

he billed the recipients) that he had not charged or accepted
payment for "covered" dental services rendered to Medicaid
recipients when, in fact, he had done so with actual knowledge
in willful violation of his Medicaid provider agreement.

By virtue of the prior "final determination" (i.e., the
determination of guilt of Medicaid fraud in Criminal No.
4063 made by the Court), the issue of the Respondent's
liability and degree of culpability with respect to the CMPL
violations alleged by the I.G. has been established pursuant
to section 1003.114(c) of the Regulations. See, Ruling

and Order of September 19, 1986 in this case,

The degree of the Respondent's culpability is determined by
the Maryland Circuit Court's judgment in Criminal No. 4063
that he “knowingly and willfully” engaged in Medicaid Fraud
(IG Ex 151). This is an aggravating circumstance.

The 146 instances at issue are a large number of violations;
and the two year period over which the violations occurred is
a long period of time; these are aggravating circumstnces.

The Respondent made 146 requests for payment for a total of
$840; this is a large amount given that it was taken from
Medicaid recipients. This is an aggravating circumstance.

The Respondent's “office visit" charges during the period
January 1, 1983 - October 7, 1983 are indicative of an
established pattern of billing Medicaid recipients for
covered services in violation of his provider agreement.
This is an aggravating factor.
76.

77.

78.

79.

80.

él.

82.

83.

- 22-

The Respondent admits that he altered the patient billing
ledgers in nine of the violations alleyed in the Notice, to

add the words "office visit" to the word "exam." IG Ex 164,
34B, 73B, 76B, 84B, 86B, 103B, 106B, 1298, 137B. The

original “exam" entries were made between January 4 and

March 5, 1982, Id. The Respondent personally added "office
visit" to each of the nine entries some time between September
1983 and January 31, 1984, TR III/681. The Respondent

learned of the State investigation on January 4, 1984; the
State served the Respondent with a subpoena on January 28,
1984, and the Respondent turned the records over to the State
on January 31, 1984, Id. The I.G. proved that the Respondent's
alteration of the records of his requests for payment made to
Medicaid recipients was an attempt to hide a possible violation
of his provider agreement and, as such, an aggravating
circumstance.

Character witnesses, Philomena Bradford (TR 1/141), William E.
Dykes, Jr. (TR II/293), Wade D. Ward (TR 11/347), Kim Lawson
(TR 11/449), and Tony Bruce (TR/461) all indicate that the
intentional filing of false, misleading or unauthorized claims
with the willful intention to secure funds to which the
Respondent was not entitled was out of character and that the
Respondent voluntarily contributed much time and effort to
indigent care and community endeavors. The Respondent's
contributions to his fellow citizens and the community is a
mitigating factor.

The Respondent has no history of prior offenses. This is
neither a mitigating nor an aggravating circumstance.

It is not a mitigating circumstance that the Respondent
allegedly suffered a monetary loss as a Medicaid dental provider.

It is a mitigating circumstance that the Respondent cooperated
in the investigation of this case.

It is a mitigating circumstance that the Respondent has paid
$973 in restitution, most of which pertained to the 146
violations at issue in this case, and has performea 250
hours of community service. R Ex 18B.

The available figures and the testimony indicate that the
Respondent has a net worth of approximately $27,000. R Ex
16B; 1G Ex 159, 160; TR II 260-280, 397-444. The Respondent's
financial condition is a mitigating circumstance.

After weighing all of the aggravating and mitigating circumstances,
alleged and proven, it is appropriate, based on the evidence
adduced in this case, to impose a penalty of $13,500 on

the Respondent and to suspend him from participating in the
program for a period of 5 years.
- 23-

DISCUSSION

I. Liability is Established in this Case by a "Final Determination"

in a Prior Proceeding

On September 19, 1986, I issued a prehearing Ruling which held

that tne I.G. had established liability in this case by proviny that
the Respondent was bound by a prior “final determination" in a
criminal case, pursuant to section 1003.114(c) of the Regulations.
For reasons discussed below, the September 19, 1986 Ruling in

this case is reconfirmed,

Section 1003.114(c) of the Regulations provides that:

(c) Where a final determination that the Respondent

presented or caused to be presented a claim and/or

request for payment falling within the scope of

§1003.102 has been rendered in any proceeding in which

the Respondent was a party and had an opportunity to

be heard, the Respondent shall be bound by such determination

in_any proceeding under this part [emphasis added].
In 1984, the Maryland Medicaid Fraud Control Unit (MFCU) of the
Office of the State Attorney General investigated the Respondent's
participation in the State Medicaid program. The investigation
revealed that on 168 occasions, from early 1981 to October 7, 1983,
tne Respondent billed Medicaid patients personally for an "exam" or
an "office visit" while also billing Medicaid for dental services
rendered to these patients during the same visit; in most instances
the "office visit" or "exam" fee was $5.00. See, IG Ex/lA, B
to 147A, B; 151B/4; 153; Stip/B9. Also during the period at
issue, the Respondent assessed interest against Medicaid patients
at the rate of $2.00 per month on the $5.00 "office visit" or
"exam" charge. See, IG &x 86B, 151B-4; Stip/B9. FFCL/49 and 55.
The Respondent never charged private patients a separate
"exam" or "office visit" fee, Id.

Based on the MFCU investigation, on June 14, 1984, the Respondent
was charged with ome count of Medicaid fraud, in violation of MD.
ANN. CODE, art. 27, §§230B(b)(1); 230(C). FFCL/56 through 58.
Criminal Information No. 4063 alleged that the Respondent:

did knowingly and willfully make and cause to be

made false statements and representations of

material facts in certain applications for payment

for services submitted to the Medical Assistance

Program [Medicaid] . . . in that the said Dean B.

Massey did falsely represent in connection with the
applications for payment that no charge had been made

or would be made for payment from the patients, the
patients' families or other sources, except as authorized
- 24 -

by the Program, when in truth and in fact the said Dean B.
Massey did in fact impose charges for payment upon the
patients and the patients’ families, which ["office visit"]
charges were not authorized by the Program... .

IG ex 151A.

Dr. Massey was represented py counsel and "nad an opportunity to
De heard" at his trial on November 28, 1984 before the Honorable
Alfred T. Truitt, Jr., Associate Judye, First Judicial Circuit
Court for Somerset County, Maryland. Dr. Massey pled guilty

to the charge as set forth in “Criminal Information No. 4063."

The State Court had his plea agreement and a signed "Statement

of Facts" when the Court accepted the Respondent's guilty plea

and made its determination of guilt. The Judge asked Dr. Massey
if ne wished to plead guilty “because in fact you are yuilty" and
if he wished to give up his rights; Dr. Massey stated: “yes, sir."
The Court then stated "the finding is guilty." FFCL 58 and 61.
See, transcript of proceedinys in Criminal No. 4063, November 28,
1984, p. 12, line 11. 22/ Appended to the stipulated "Statement
of Facts" (IG Ex 151B) was a listing of Medicaid recipients whom
Dr. Massey charyed for an “office visit" or "exam" while also billing
the State Medicaid program for dental services rendered during

the same visit. Stip/Bl0; FFCL/62. The Statement of Facts
provided that:

Dr. Massey charged and collected a total of

$955.00 from [Medicaid] patients for 168 office visits
on the same date that he submitted signed invoices

to the Department for reimbursement of covered
services rendered, and was reimbursed by the
Department for those covered services.

IG &x 151B/4. See IG Ex 151B/7-12. The Appendix to the I.G.'s
Notice to the Respondent in this case lists 147 of the same Medicaia
recipients, 147 requests for payment, and 147 claims presented to
Medicaid, which were at issue in the State Criminal proceeding.
Those charges occurring prior to August 13, 1981 were purposely

not included in the I.G.'s Notice in this case. 23/ Thus, the

146 requests for payment at issue in this case are the identical
requests for payment that were in issue in the State criminal

22/7 The transcript of proceedings in Criminal No. 4063 is found
in the record in this case as Attachment A to the I.G.'s brief
in support of the I.G.'s Motion for a Prehearing Ruling.

23/ The 1.G. indicated in this case that he is not pursuing
matters occuring prior to the effective date of the CMPL, August
13, 1981. There is, however, one request for payment, of the 147
listed, that was made prior to August 13, 1981. Apparently, the
inclusion of this one request for payment in the I.G.'s Notice
was an oversight. Accordingly, it is dismissed from this case
and there remain 146 requests for payment at issue. FFCL/7.
- 25 -

proceeding. In tnat case, Dr. Massey stated that he made these
requests for payment "knowinyly and willfully" in violation of
his provider agreement.

In the criminal case, the Respondent received a suspended sentence
and was placed on probation, pursuant to MD. ANN. CODE, art. 27,
§641. On November 28, 1984, the Circuit Court for Somerset

County filed its “Order For Probation," ordering the Respondent

to pay court costs and restitution of $955 plus $18.00 interest,

and to perform 250 hours of community service. The controversy
between the State of Maryland and the Respondent was then concluded,
except for administrative execution of the terms of probation.

The Maryland Annotated Code, Art. 27, s641 provided (at the time
in issue) that:

Whenever a person accused of a crime pleads guilty
or nolo contendere or is found guilty of an offense,
a court exercising criminal jurisdiction, if
satisfied that the best interests of the person

and the welfare of the people of the State would

be served thereby, and with the written consent of
the person atter a determination of guilty or
acceptance of a nolo contendere plea, may stay the
entering of judgment, defer further proceedings,

and place the person on probation ....

* * *

(3) By consenting to and receiving a stay of entering

of judgment as provided by this subsection, the person
waives the riyht to appeal from the judgment of guilt

by the court at any time. Prior to the person consenting
to stay of entering of the judgment, the court shall
notify the person that by consenting to and receiving a
Stay of entry of judgment, the person waives the right to
appeal from the judgment of guilt by the court at any time.

(Emphasis added.) 1982, ch. 98; 1983, chs. 8, 291.

Based on the evidence in this record, I find and conclude tnat
the State Court's determination was a judgment of guilt, that the
Court's judgment of guilt was a “final determination," and that
the Court's judgment of guilt is conclusive and pDinding on the
Respondent by reason of section 1003.114(c) of the Regulations.
This estops the Respondent from contestiny in this proceeding any
finding of fact or conclusion of law necessarily established by
reason of the "final determination" in Criminal No. 4U63. The
facts directly determined by the trial judge in Criminal No. 4063
are those stipulated to Dy the Respondent in the November 26,
1984 "Statement of Facts" and admitted to in the November 28,
- 26-

1984 transcript of proceedings in Criminal No. 4063. The questions
of law put at issue and directly determined by the trial judge in
Criminal No. 4063 are set forth in the “Criminal Information" and
subdDsequent plea agreement, as evidenced Dy the November 28, 1984
transcript of proceedinys and the docket sheet in Criminal No. 4063.
These documents establish that the Respondent admitted that he

made the 146 requests for payment at issue here with actual
knowledge and in willful violation of his Medicaid provider
agreement. I conclude: (1) that the issues of fact and law
determined in Criminal No. 4063 are sufficient to establish
liability in fact and in law under the CMPL and its implementing
Regulations in this case, and (2) that section 1003.114(c) requires
that the Respondent be bound by those issues of fact and law
already determined. FFCL/63 through 65. See, “The Two Primary
bases For Liability", supra. Accordingly, the liability of the
Respondent is estaDlished here.

II. The Appropriate Amount of the Penalty Must Be Based On the

Entire Record In This Case

In order to decide the appropriate amount of the penalty that
snould pe imposed in any case where the I.G. has established
liability, the CMPL and Regulations require tne ALJ to consider
aggravating and mitigating circumstances. Specifically, Section
1003.106(a) and (b) of the Regulations and Section 132Ua-7a(c) of
the CMPL require the ALJ to examine the following circumstances:
(1) the nature of the claims or requests for payment and the
circumstances under which they were presented, (2) the degree of
culpability of the Respondent, (3) the history of prior offenses
of the Respondent (as an aygravating factor only), (4) the financial
condition of the Respondent, and (5) such other matters as justice
May require.

While the CMPL and Regulations require consideration of aygravating
and mitigating factors to determine the appropriate amount of the
penalty to be imposed in a given case, there is no formula for
computing the penalty and there is little guidance to be found in
the CMPL and its legislative history. The preamble to the Regulations
states that "fixed numbers" have been “eliminated" as "triggering
devices," emphasizing that discretion is preferable to a mechanical
formula. 48 Fed. Reg. 38827 (August 26, 1983). Section 1003.106(b)
of the Regulations contains some general guidelines for the
interpretation and application of the aggravating and mitigating
factors set forth in section 1003.106(a).

The parties briefed their respective views regarding the ayyravating
and mitigating factors and how those factors should be applied to the
facts in this case. Neither side, however, suggests any formulas

for computing the appropriate amount of the penalty, gives insight
into a quantum weight ascrided to each aggravating or mitigating
-27-

factor alleged, or points to any analogous cases or situations
that might illustrate a method for arriviny at the appropriate
amount of the penalty. The lack of information is not surprising,
given that there is little or no guidance available, other than
the general guidelines in section 1003.106(b) of the Regulations.

The I.G. argues, in effect, that the amount of the penalty proposed
by the I.G. should be imposed by the ALJ, so long as the I.G.
sustains the burden of proof with reyard to each of the alleyed
ayyravating circumstances (and indicates that he has already
considered any mitigating circumstances that he contemplates can

De proven by the Respondent). In other words, the I.G. argues

tnat if the I.G. proved all elements of the case as alleged, tne

ALJ should uphold the proposed amount. The I.G. does not argue

what should be done if one or more alleyed aygravatinyg circumstances
are not proven (as is the case here), or if a mitiyating circumstance
deserves more consideration than that given by the I.G. (as is

also the case here). On the other hand, the Respondent argues

that tne ALJ has complete discretion and aryues that the facts

here justify a penalty of one dollar.

I conclude that it is both Congress' and the Secretary's intent
tor the ALJ to decide each case on its own merits, using discretion
rather than a formula. While the ALJ has much discretion to fix
the amount of the penalty on the relative merits of eacn case,

the ALJ must attempt to craft a rational approach designed to
reconcile the facts of each case with the intent of Congress,

See, yenerally, DAVIS, Administrative Law Treatise, 2d Ed. 1978
and 1982 Supplement, Chapters 8, to 13, 29. The process is
somewhat like sailiny on uncharted waters. As the preamble to

the Reyulations states: “as we gain more experience in imposing
sanctions unger the statute, we may further refine the guidelines,
but at this early staye we believe that increased flexibility is
preferable,"

Congress intended the penalty to be a deterrent rather than to ve
retribution or punishment. See, Mayers v. U.S. Department of
Health and Human Services, 806 F. 2d 995 (llth Cir. 1986). A
deterrent is meant both to encourage others to comply with the

law and to discourage a respondent from committing the wrong again.
Retribution or punishment goes well beyond this point and might
raise constitutional questions. To arrive at an appropriate
penalty that would be a deterrent, rather than retribution, the
ALJ should consider the factors outlined in the Reyulations, weigh
tne gravity of the wrong done by a respondent, and consider what
it would take to prevent tne wrony from being committed ayain by

a respondent and others.

Accordingly, taking into consideration the aygravating and mitigating
factors, the penalty I deem appropriate in this case is meant to be
proportionate to the offense committed by the Respondent, as fashioned
by the facts in tne record, and is meant to be a deterrent rather

than punishment.
III. The Degree of Culpability of the Respondent

One of the most complex of the factors to be considered by the

ALJ in determining the amount of the penalty is the "degree of
culpability." The guidelines in the Regulations indicate that this
factor relates to the degree of the Respondent's knowledye and intent.
AS stated earlier, it is not a prerequisite that a respondent

“knew or had reason to know" that any of his requests for payment
were improper in order for liability to attach in this type of

case, Decause strict liability attaches under section 1320a-7a(B) (2)
of the CMPL and section 1003.102(b)(1) (ii) of the Reyulations
whenever the Respondent presents any request for payment which
violates his agreement with a State Medicaid agency. See, "The

Two Primary Bases For Liability," supra. Knowledge, however,

is an aggravating factor, and “unintentional or unrecognized error"
is a mitigating factor if the Respondent "took corrective steps
promptly after the error was discovered." Regulations, §1003.106(b)(2).
The determination of the degree of culpability in this case

involves an inquiry into whether the Respondent knew at the time

he personally billed Medicaid recipients 146 times from August 20,
1981 to October 7, 1983, that he was violating his Medicaid provider
agreement, or whether he simply made a mistake and then corrected
his error promptly after he discovered it. See, 48 Fed Reg.

38831.

A. The Degree of Culpability ot the Respondent has been

Established in this Case by Reason of the Respondent's
Prior "Final Determination".

The I.G. argues that the deyree of Dr. Massey's culpability

is already established in this case by proof of the Respondent's
prior “final determination" in Criminal No. 4063. I.G. Br/39,
40. The Respondent disputes this.

The I.G. is correct. The Respondent freely and voluntarily

pled and was found guilty of "knowingly and willfully" falsely
representing on the Medicaid claims in issue in this case that

“no charge had been or would be made for payment from the patients,
the patients' families or other sources . . . when in truth and

in fact" the Respondent did impose exam and office visit

charges directly upon the patients and the patients' families,

“which charges were not authorized by the Program... ." IG Ex
151A, D, E; FFCL/64 . The Respondent was found to have the requisite
criminal intent and knowledge to sustain a determination that he
-~ 29 -

had engaged in Medicaid fraud, because he agreed at his plea
hearing on November 28, 1984 that the “office visit" charyes to
the Medicaid recipients were not authorized by the Medicaid
program and, as a result, "he was not truthful in his statement to
the State Medicaid authorities on his claims when he said that he
was accepting no other payment from the patient and his family."
I.G. Ex 151A, 151D, ISIE.

I am convinced that section 1003.114(c) of the Regulations establishes
the deyree of culpability, because the Respondent is bound by his
prior statements in open court that he knew he was violating his
Medicaid provider agreement and intended to do so. Thus, for the

same reasons that liability has been established (i.e., section
1003.114(c) of the Regulations mandates that the Respondent's

“final determination" is binding), the degree of the Respondent's
culpability is also established. FFCL 65, 66. Since the I.G,

proved by a preponderance of evidence the maximum degree of culpability
(i.e., knowledge and intent), the deyree of culpability is a major
aggravating circumstance. See, Regulations §1003.106(b)(2).

B. The Facts in This Record (Which are in addition to the Facts
Established by The Court's Prior "Final Determination")
Do Not Change tne Degree of Culpability of the Respondent,
1. Background

The general Medicaid policy is that the amount which the program
reimburses a dental provider is payment in full, and the provider
is not permitted to request payment from a Medicaid recipient for
the difference between the reimbursed amount and the provider's
usual and customary charge. A provider is not entitled to any
more than the usual and customary charge. See, FFCL 35; R Ex

7; IG Ex 152.

There is no dispute that the Maryland Medicaid regulations provided
that a dentist must accept payment Dy MDHMH “as payment in full
for services rendered and make no additional charge to any person
for covered services" (emphasis added). COMAR 10.09.05.03. IG

Ex 152/Attachment A/560, Attachment B/561. See also, R Ex 2.

This provision also applied to services "not covered as separate
procedure" (NCASP). The regulations specified which "dentally
necessary services" were considered to be “covered services" and
"not covered as separate procedure." COMAR 10.09.05.04.

IG &x 152/Attachment A/561, Attachment B/562. See also, R Ex 2.
Although it would violate the Maryland Medicaid Regulations for a
dentist to charge a Medicaid recipient directly for a "covered
service," or for a service “not covered as separate procedure," a
dental provider could contract with a Medicaid recipient directly
for "non-covered" services (under certain specified circumstances
not relevant here). See R Ex 1/2; IG Ex 154/2 (affidavit of Dr.
Roosevelt Bush). In listing the services not covered by Medicaid,
the Regulations in effect from January 1, 1981 to June 30, 1982
did not specifically include either "exam" or "office visit" as a
"non-covered service," or as a "covered service." These regulations
did not specifically prohibit a dentist from billing a Medicaid

- 30 -

recipient directly for an “office visit" for this period. See,
COMAR 10.09.05.05, IG Ex 152/Attachment A/561. See, R Ex 1/2,
where an attorney for the State Dental Association gives his
professional opinion that it was legal for a dental provider to
Dill Medicaid recipients for "non-covered" services. 25/

A modification of the yeneral policy that Medicaid providers are
“not allowed to Dill in excess of [the Medicaid reimbursement] "
(TR II/330), was stated by Dr. Roosevelt Bush, a consultant to
MDHMH. Dr. Bush informed br. Massey in 1983 that Dr. Massey
could "set up a private contract with any patient, including a
Medicaid recipient, for services not covered by the Medicaid
program, but that the recipient must agree, preferably in writing,
before the services are rendered.” (Emphasis added.) IG Ex 154/2.
If the Respondent had merely charged the Medicaid program for
“covered services" and the recipients paid for "non-covered
services," he would not have violated his Medicaid provider
agreement and, arguendo, would not be liable under the CMPL and
Regulations. Dr. Bush, however, attested in an affidavit that at
“no time did [he] ever tell Dr. Massey that he could bill Medicaid
recipients for “office visits." IG Ex 154/2.

In March 1982, MDHMH updated its list of covered and non-covered
services and added a new category designated: “not covered as
separate procedure" (NCASP). The latter represented services for
which neither the Medicaid program separately nor the recipient
individually could be charged. Initial, periodic, and emeryency
oral examinations were listed as NCASP. See, FFCL 27. The March
1982 update, effective July 1, 1982, listed an “office visit" as
a non-covered service. The Respondent admits he received this
Medicaid notice. TR III/554.

Effective January 1, 1983, MDHMH revised its regulations yoverning
dentists participating in the Medicaid program. IG Ex 152/2.

See, also, IG Ex 152/Attachment B, Just prior to January 1, 1983,
all dentists participating in the Maryland Medicaid program were
notified, through MDHMH Dental Transmittal No. 7, of the revision
of the regulations governing Medicaid dental services. IG Ex
152/2, 152/Attachment C. The evidence in this record indicates
that the Respondent had to have known of Transmittal No. 7 on, or
shortly before, January 1, 1983. Attached to Transmittal No. 7
was a notice to Medicaid recipients. IG Ex 152/Attachment C/2.
The notice explained the new Maryland Medicaid regulations

257 Shortly after the Respondent informed the I.G. that he proposed
as one of his hearing exhibits the opinion of an attorney for the
State Dental Association, the I.G. obtained an affidavit in which
the attorney stated that he was not familiar with the usual and
customary billing procedures of dentists, and that the letter opinion
which he furnisned to Dr. Massey did not address those issues or

the issue of what constitutes a "covered" service. IG Ex 162.
-31l-

reyarding dentists and stated that “separate payment" for office
visits and house calls" is denied because "payments for these
visits is included in the program payment for actual services
rendered." (bmphasis added.) FFCL/32, 33, 34. The regulations
regarding dentists, coupled with Transmittal No. 7, make it
absolutely clear that a dental provider could not bill a Medicaid
recipient for an "office visit" after January 1, 1983 without
violating nis provider agreement. 27/

2. The Arguments of the Parties

The I.G. argues, in effect, that the facts in tne record (in addition
to the facts estaDlished by Respondent's prior “final determination")
establish that the Respondent had the highest degree of culpability.
IG Br/3¥, 40. There is no need to address the I.G.'s argument
because, as stated above, the maximum degree of culpability that

can be established under section 1003.106(b)(2) of the Regulations
(i.e., knowledge and intent) has already been established as a

result of the prior “final determination."

In contrast, the Respondent argues that the facts (excluding the facts
established by the prior "final determination") evidence that he

had no knowledge of wrongdoing and that he thought that the Maryland
Medicaid regulations allowed him to do what he did. The finding

the Respondent seeks is that the Medicaid regulations were sufficiently
ambiguous and confusiny so that the combination of services he
designated as an “exam" or “office visit" could reasonably be
considered separate "non-covered" services and, thus, legally billed
separately to Medicaid recipients. In other words, the Respondent
argues that I should disregard the prior "final determination"

and that the additional facts in this record support a finding

that he was not culpadle at all; he argues that this is a mitiyatiny
factor.

3. Analysis

There are two compelling reasons why I shoula not make a further
determination in this case concerning the degree of the Respondent's
culpability. First, as stated above, under section 1003.114(c) of the
Regulations the prior "final determination" clearly binds the
Respondent. Thus, the issue is foreclosed, and I must base my

277 Participating dental providers in Maryland, such as the Respondent
are obligated to be knowledyable about and to comply with the
yoverning Maryland Medicaid regulations and requirements. Stip/Bl;
IG 151B/1l-2; TR II/339. See also, Decision and Order in Inspector
General v. Scott, OHCMP/DGAB Docket No. C-15, at 27-28. The
Respondent and his office personnel were aware of their obligation
to follow the Maryland Medicaid regulations governing the billiny
of dental services to Medicaid recipients. The Respondent knew
what the regulations said. TR 1/37, 42, 185. The Respondent
specifically instructed his office personnel on which billing
procedures were covered and which were not. TR 1/42. There is

no dispute that the Respondent was actually responsible for the
requests for payment from the Medicaid recipients in issue here.
= 32-

finding on the facts as determined in the State criminal proceeding.
Moreover, while I might sympathize with the Respondent's argument
that he could not afford to defend himself properly in his criminal
case, he is foreclosed from making any collateral attack here on
the prior "final determination" in the criminal case; the Criminal
Court was the proper forum for him to make those arguments. The
only way in which it would be proper for me to reexamine the
Respondent's culpability is if the Respondent estabDlished that he
had not had an “opportunity to be heard,“ within the meaning of
section 1003.114(c) of the Regulations, in the criminal case.

Since the Respondent did not prove this, he is bound by the

“final determination."

Second, even though the Respondent's culpability has already been
established, the additional tacts in this record (i.e., those
exclusive of the prior "final determination") do not prove by a
preponderance of the evidence that the Respondent committed an
“unintentional or unrecoynized error” and then "took corrective
steps promptly after the error was discovered." Regulations
§1003.106(b)(2). The additional facts in the record tend to
support the I[.G.'s allegations that the Respondent knew he was
charging Medicaid recipients for "covered services;" the facts do
not support the Respondent's alleyations that he thought he was
charging for “non-covered" services and that he was permitted to
do so. Thus, the record indicates that the Respondent knew he was
charging Medicaid recipients for dental services that were included
in the services which Medicaid covered because: (a) the Respondent,
in effect, gave the Medicaid recipients no choice Dut to pay the
“office visit" or "exam" fee; (b) the Respondent had a duty to
inguire on March 22, 1982; (c) the Respondent was on notice that

he was specifically prohibited from doing so after January l,

1983, and the Respondent did not take "corrective steps promptly"
after he knew that he could not do so.

In fairness to the parties, it should be noted that because I
issued a pre-hearing Ruling which held that the Respondent was
bound by his prior “final determination," the parties were, in
effect, diverted from telling the full story concerning liability
and the deyree of culpability. For example, put for the Ruling
the I.G. might have presented testimony from Medicaid recipients
or others in an effort to prove that the Respondent was charging
Medicaid recipients for “covered services" under the guise of an
“office visit" or “exam," as alleged. On the other hand, but for
the Ruling the Respondent might have made an effort to demonstrate
more effectively that prior to January 1, 1983, the Medicaid
regulations per se did not prohibit what he was doing prior to
January 1, 1983 or that he had not had notice that he was prohibited
from charying Medicaid recipients for an “office visit." Even
pro se, the Respondent's effort brought out certain facts which

I carefully reviewed.

The additional facts as developed in this record are set out above
and in the three points below. These facts illustrate that even
- 33-

without the facts established py the prior “final determination,"
the Respondent's degree of culpability would not chanye so as to
make it a mitigating circumstance.

(a) The Respondent, in Effect, Forced Medicaid kecipients to
Pay an "Oftice Visit" or "Exam" Fee Before They Could
Receive Medicaid Services.

Tne first reason why the facts in the record are not a mitigating
factor (exclusive of the prior “final determination") is that they
indicate that the Respondent made Medicid recipients feel that he
would not provide covered Medicaid services unless the Medicaid
recipients first agreed to pay a charge which the Respondent
labeled as an “exam" or “office visit."

A dental provider interested in the well being of his patient, as
Dr. Massey said he was, would have made sure that he told the
patient what "non-covered" services were needed and that the
quantity and quality of "covered" services was in no way dependent
on whether the patient agreed to pay personally for the “non-
covered" services. Dr. Massey did not give Medicaid recipients
that understanding and, thus, did not allow them the option of
rejecting his “office visit" and “exam" services if they wanted
only “covered" services. See, FFCL 72 . Thus, his method of
operating gave the 146 Medicaid recipients no choice. This
illustrates that the Respondent violated both the letter and the
spirit of his provider agreement,

(b) On or Shortly After March 22, 1982 The Respondent hada
Duty to Inguire Into Whether he was Allowed to Charge
Medicaid Recipients for the Services He Called an "Oftice

Visit.

The Respondent testified that when he received information from
Medicaid in March 1982 that an examination would be “not covered
as separate procedure" after July 1, 1982, he asked Medicaid what
those words meant, because that classification was new to him.

TR III/554-555. The Respondent admits that he became aware of the
regulatory change on or shortly after March 1982. He indicated
that he made a telephone inquiry in 1982 to Dr. Roosevelt Bush, a
consultant to Medicaid. TR I[II/556. Although Dr. Bush stated

in a sworn affidavit that Dr. Massey actually made the inquiry in
1983, the facts clearly establish that the Respondent recoynized
he had a duty to inquire whether his practice of charging Medicaid
recipients for an "exam" was allowed by Medicaid regulations.

Dr. Massey testified at one point that an “office visit" charge

was justified if ne gave the patient oral nygiene instructions.

TR IIfI/637, 639, 658. This is also what he told one Medicaid
recipient, the mother of a Downs Syndrome patient who needed
reinforcement in "cleaning his teeth properly." TR I/146, 153,
154, 156. But, at another point, Dr. Massey testified that a "bona
fide office visit" . .. "a legitimate office visit" was where he
- 34 -

spent time explaining to a patient how to get treatment which
Medicaid did not pay for. TR III/592-593, 622. He also testified,
in response to my questioning, that prior to the above described
regulatory change, he charyead Medicaid recipients $5.00 for a
composite of "exam" and “office visit" services, yet continued to
charge $5.00 for an “office visit" without an “exam" after that.
See, TR III/659. Clearly, under the circumstances, the Respondent
had a duty to ask Medicaid whether he could do this.

In his alleged conversation with Medicaid in 1982, the Respondent
apparently did not seek to clarify his use of the term "office
visit." Given the imprecise nature of the collection of “services"
he alleyedly provided as an "office visit" and the lack of a clear
distinction between his understanding of the terms “office visit"
and "exam," Dr. Massey was obliged to make a more thorough inquiry.
His failure to do so is a further indication that he already knew
-- or did not want to know -- the answer.

(c) The Respondent knew he was Prohibited by the Medicaid
Regulations from Charging Medicaid Recipients for an
“Oftice Visit™ for the Period After January 1, 1983
The preponderance of the evidence indicates that the MDHMH
issued a transmittal which made clear that, after January 1, 1983,
the Respondent could not charge Medicaid recipients for an “office
visit" or “exam," It is unlikely that the Respondent did not
receive this transmittal because he admits that he received other
Medicaid notices. At the very least, the Respondent had some

deyree of knowledge. State Medicaid reyulations are published in
the Maryland Register. See, R &x 9A.

The Respondent's knowledge of his wrongdoing in billing for an
"office visit" after January 1, 1983 is further evidenced by the
Respondent's own testimony during cross-examination, TR III/618
to 664. During cross-examination, the Respondent initially was
not forthright in answering questions addressed by the I.G. and
although he acknowledged that “we are talking in circles" (TR
III/636), he did little to find a way out of the confusion created
by his testimony. In fact, he seemed to be attempting to obscure
the truth. See e.g., TR III/623, 630. At other times, he seemed
uncertain that he had done what was right and genuinely sorry for
what he did, He stated that although he intended "to help patients"
by giving them oral hygiene instuctions and generally helping

them prevent decay and maintain dental hygiene, he agreed: (1)
that he could not charge for an exam after mid-1982 (TR III/658);
and (2) that it appeared that all he really had done (after MDHMH
listed examinations as "not covered as separate procedure" in
mid-1982) was change the designation in nis records from "exam"

to "office visit" while continuing to provide the identical
services to the recipients. TR III/659. See also, TR
=~ 35 -

III/660 to 664. The Respondent stopped his illegal practices
only after a Medicaid recipient complained in October 1983. 28/

IV. The Nature and Circumstances of the Claims and Services in
Tssue

The guidelines at section 1003.1U6(b)(1) of the Regulations state
that the nature and circumstances of the requests for payment

should be considered a mitigating factor if requests for payment
were all of the same type, occurred within a short period of

time, were few in number, and the total amount requested from
Medicaid recipients was under $1,000. But, the regulations do

not specify what constitutes a "short period of time" or how to
evaluate the number of claims. The guidelines at section 1003.106(b)
(1) of the Regulations also state that an aggravating circumstance
exists where the requests for payment were of several types, occurred
over a lengthy period of time, were large in number, indicated

a pattern of making such requests for payment, or the amount
requested from Medicaid recipients was substantial. Again, however,
the yuidelines do not indicate what period of time is lengthy,

what amount of requests is a large number, or what is a substantial
amount. See, 48 Fed. Reg. 38827 (August 26, 1983). These judgments
are left to the discretion of the ALJ.

Since the guideline examples of aggravating circumstances are
couched in the disjunctive, only one need be proven by the I.G.
to establish the nature and circumstances as an aggravating
circumstance. Here, the I.G. has established more than one.

On the other hand, the guideline examples of mitigating circumstances
are couched in the conjunctive; all must be proven by the Respondent
in order to have the nature and circumstances of the claims in

issue to be considered mitigating. The Respondent did not prove
them.

The Respondent improperly billed Medicaid recipients for an "exam"

or an “office visit" in 146 instances during the two year period

in question. I find that the 146 instances constitute a "large

number of claims" under the guidelines. I find this because the
Respondent admitted that he so billed all Medicaid recipients

served during the period in issue. Also, given that Dr. Massey

admitted knowledge of his wrongdoing in the prior "final determination,"
I find the two year period to constitute a “lengthy” period of time.
See, generally, IG Ex 1A to 143B ana 145A to 147D. These are two
aggravating circumstances proven by the I.G.

28/ Absent the Respondent's prior "final determination," I might
fave been persuaded to impose a much lower, or perhaps nominal,
penalty (as the Respondent sugyested in his brief) if the record

had shown that the Respondent had ceased billing Medicaid recipients
{who could ill afford a $5.00 "office visit" fee) no later than
January 1, 1983 and had not, in effect, forced the Medicaid
recipients to pay the “office visit" fee.
- 36-

The Respondent's “office visit" charges during the period in issue
are indicative of an estaDlished pattern of billing Medicaid
recipients tor covered services in violation of his provider
agreement, as discussed above. This is an aggravating circumstance
proven by the I.G,.

The Respondent's practice of billing Medicaid recipients for an
"exam" or an “office visit" was a deviation from accepted dental
practices; Medicaid recipients were never charged such fees by

other doctors and dentists. Dr. Roosevelt Bush, a consultant to

the Maryland Medicaid proyram (a source cited by Dr. Massey), stated
in a sworn affidavit that:

During my professional career and tenure with the
Maryland Medical Assistance Program, I have never
encountered a dentist, with the exception of

Dr. Massey, who billed the patient or a third party
for an “office visit" on the same date and time
when other billable services were rendered,

IG Ex 154. Dr. Bush's statement was corroborated Dy the testimony

of the mother of one of the Medicaid recipients whose billings

were at issue. The witness was called by Dr. Massey. She stated
that she "never felt she was injured" by Dr. Massey's charging an
“office visit" fee, but affirmed on the I.G.'s cross~-examination

that no other doctor charyed an office visit fee. TR I/145, 149,
154. The mother of another Medicaid recipient whose billings

were at issue also furnished information to a State investiyator

that a dentist in Salisbury, Maryland (near Crisfield), who had
treated her child prior to Dr. Massey, had not charged an "office
visit" fee. IG Ex 118D. Thus, in addition to the Respondent violating
his Medicaid provider agreement, he charged Medicaid recipients for a
“service" for which other dentists and doctors did not bill. In
addition, a random sample of the amount which the Respondent

billed to non-Medicaid patients during the period at issue in

this case shows that the Respondent billed non-Medicaid patients

only for specific services, rather than the general "exam" or

“office visit" fees. FFCL/71. This is an aggravating circumstance
proven Dy the I.G.

The guideline makes it an aggravating circumstance if the total
amount taken from Medicaid recipients is "substantial." The

charges in issue are less than the $1,000 set forth in the guidelines
for a mitigating circumstance. The total of all the charges in

issue here is $840, consisting mostly of $5.00 charges. The

broad sweep of the guidelines includes claims improperly made to

and collected from government ayencies as well as charges to

Medicaid recipients, as here. I find the amount to be "substantial"
within the meaning of the guidelines. Even small amounts taken
- 37 -

from indiyent people may reasonably be considered "substantial.

This is an aggravating factor. 29/

Vv. Other Matters to be Considered as Justice Requires

The CMPL and the Regulations also contain an umbrella factor,
“other matters as justice may require." The Regulations do not
provide furtner detail, except to indicate that consideration
of other matters should be limited to those relating to the
purposes of civil money penalties and assessments. Regulations
§1003.106(b)(5).

The Respondent billed one of the Medicaid recipients (named in the
I.G.'s Notice) $90 for an “office visit" on June 7, 1983. IG Ex
72 B. The Respondent charged tne Medicaid proyram for “outpatient
suryery" performed on the same patient on June 8, 1983. IG Ex
72A. In a sworn statement dated September 10, 1985, the recipient
stated that the Respondent had told her on June 7 that if “she
didn't have the money before the surgery .. . he would not do
the surgery." IG Ex 72E. This was consistent with information
reported to the State at the time of its investiyation in 1984.

IG Ex 72C, 72D. This incident occurred six months after MDHMH
adopted new regulations and specifically informed providers that

a Medicaid recipient could not be charged for an “office visit."
By conditioning the provision of covered services on the payment
of such a large amount, Dr. Massey seriously jeopardized the
quality of care received by the Medicaid recipient. This incident
is a major aggravating circumstance. FFCL/72.

The I.G. argues that, in addition to the violations set out in the
Notice, the Respondent had billed the Medicaid program for services
which he did not provide as claimed, and that this should be considered
an aggravating circumstance. The I.G. relied in part on alleged
incidents or persons not cited in its Notice. IG Ex 130E, 131E,

132£. In the one instance which might properly have been under

the Notice, the statement given to the I.G. was in direct conflict

with one previously given to the State. Compare, IG Ex 49F and

IG Ex 49E. Accordingly, I find that the I.G. has failed to

establish these allegations as an aggravating circumstance. FFC/74.

The I.G. erroneously based his proposed penalty of $35,000, in

part, on one alleged violation which occurred prior to the effective
date of the CMPL. FFCL/7. This is a mitigating circumstance because
an improper claim made prior to the effective date of the CMPL does
not constitute a violation of the CMPL.

297 The guidelines state that a total amount of less than $1,00U

is one element necessary for finding the nature and circumstances of
payment to be a mitigating factor. The total amount here was less

than $1000. Nevertheless, since the other necessary elements specified
in the guidelines were not present (and they all must be present to
find the nature and circumstances to be a mitigating factor), the
nature and circumstances of payment cannot be considered a mitigating
factor, and I am not precludea from finding the amount, if less than
$1000, to be an aggravating factor,
- 38 -

During the entire period at issue, the Respondent was required by
Medicaid to "[m]aintain adequate records for a minimum of 5 years,
and make them available" to MDHMH. COMAR 10.09.05.03; IG Ex 152,
Attachments/A&B. The I.G. alleged that the Respondent altered
patient Dilling ledgers in this case so as to mislead State
investigators. The Respondent admitted that he had altered the
records as alleged -- by adding the words "office visit" to
records already bearing the word “exam" in 13 instances in which
he requestea payment from Medicaid recipients for an "exam" (he
initially had contended that he added the word "office visit" "to
separate out what a patient paid ine versus what Medicaid billed"),
TR III/684.

The Respondent was shown to have altered at least one record some
time after a February 8, 1983 postmark on a bill sent to a recipient.
The bill was for "exams" which were provided on June 25, 1981 and
January 4, 1982. 30/ The Respondent testified that he altered

the records himself some time between September 1983 and January

29, 1984, The latter is the day that he and his wife assemblea

the 175 records requested by the State investigators; he said:

"we didn't alter anything that day . . . we didn't have time.”

TR III/681, 683.

The Respondent argued that his alteration of Medicaid records was
"legal" because the instances in which he added the words "office
visit" all occurred prior to the July 1, 1982 reyulatory chanye
which prohibited billing a Medicaid recipient for an "exam."

TR III/676, 679, 685. The Respondent stated that the "fee remained
the same, the person got charged for the same." TR III/676.

This contradicted his earlier testimony which explained the
differences between an “exam" and an “office visit." There he
defined "exam" as “checking for pathology. . . soft and hard

tissue . . . [fJilling the forms out ... ." TR III/592. He
defined an "office visit," for example, as "sitting down" with a
patient and trying to “work .. . through" how to get treatment

when Medicaid would not pay for it. TR III/593. 31/

I find that the Respondent's explanations do not excuse the

alteration of records which the Respondent was oDliged to maintain
and make available to the Medicaid program. The evidence that he
made the additions long after the "exam" or “office visit" belies

307 On each Of those dates, the Respondent provided other dental
services and billed the Medicaid program for those services. IG
Ex 86B, E.

31/ Later in his testimony he described an “oftice visit" as oral
hygiene instruction, giving a patient a toothbrush, and talking
about treatment plans. TR III 639, 653-656.
- 39 -

his explanation that he did it to separate patient billinys from
Medicaid billinys. The evidence also strongly suggests that he
altered the records during the four weeks between learning of the
State investigation (January 4) and delivery of the records to
the State investigators (January 31). He admittedly altered the
records long after such notations would have been useful to his
billiny process and only after he became aware that there was
some problem with his billing of Medicaid recipients. Under
these circumstances, any alteration of records which the Respondent
was obliged to maintain for the State, and which were potential
evidence, however harmless the alteration, must be considered

an aggravating circumstance. FFCL/76.

Character witnesses Philomena Bradford (Transcript TR I/141),
William E. Dykes, Jr. (TR II/293), Wade D. Ward (TR II/347), Kim
Lawson (TR II/449), and Tony Bruce (TR/461) ali indicate that the
intentional filing of false, misleading or unauthorized claims

with the wiliful intent to secure funds to whicn the Respondent

was not entitled was out of character for the Respondent. They
also indicated that the Respondent voluntarily contributed much
time and effort to indigent care and community endeavors. The
Respondent's contributions to his fellow citizens and the community
is considered a mitigating factor. FFCL/78.

vI. History of Prior Offenses

The next factor discussed in the Reyulations is "prior offenses" of
the Respondent. The yuidelines at section 1003.106(b)(3) state

that an aggravating circumstance exists if, prior to the presentation
of the improper claims at issue, the Respondent was held liable

for criminal, civil or administrative sanctions in connection

with one of the programs covered by the CMPL or any other medical
services program. This guideline would clearly prevent consideration
of mere allegations of past wrongdoing; the Respondent must have

been "held liable" and subjected to actual sanctions before
committing the acts for which he is found liable here. The

preamble makes clear that prior offenses are not an aggravating
circumstance, unless there has been a final agency determination

or a final adjudication in a court. 48 Fed. Rey. 38832.

The Respondent had not been found guilty of offenses prior to the
time he presented the requests for payment and the claims at
issue here. Thus, there are no prior offenses which could be
considered an aggravatiny factor in this case. On the other
hand, absence of a prior offense is not a mitigating factor under
the Reyulations, FFCL/77.

VII. Financial Condition
The Regulations state that the financial condition of the Respondent

would constitute a mitigating circumstance if the penalty or
assessment, without reduction, would jeopardize the ability of a
- 4Uu -

respondent to continue as a health care provider. Thus, it is

clear that the ALJ may consider the Respondent's financial condition
(a traditional element evaluated in compromising or settling

claims). Furthermore, the guidelines at section 1003.106(b)(4)

note that the ALJ must consider the resources available toa
respondent. This indicates that financial disclosure by a respondent
is a key requirement in evaluating a Respondent's financial condition.

There is testimony in the record reyardiny the Respondent's net
worth. The testimony centered around the Respondent's submission
of an unaudited balance sheet dated Octoper 9, 1986. R Ex 16 B.
This balance sheet showed the Respondent to have a net worth of
minus $11,881.61. The negative balance reflects an alleged
excess of liabilities over assets.

The Respondent's accountant testified that although he had not
performed an audit in connection with the preparation of the
balance sheet, he would not otherwise qualify (condition) the
result. TR II/424. The accountant stated that he had considered
both personal and Dusiness assets, Dut acknowledged that he had
tailed to list furnishings and jewelry. TR II/432.

The Dalance sheet did not include a specific line item for the value
of the Respondent's dental practice. Nevertheless, the accountant
testified that the practice was worth approximately $18,000. TR
II/417. He based this figure on accounts receivable of $14,026.77
and the purchase price of the dental equipment, minus accumulated
depreciation ($4,187.64). Id. The I.G.'s witness, who investigated
this case for the I.G., and who is also an accountant, testified
that the Respondent's practice should be valued at $47,000. TR
II/230. This figure was determined for the investiyator by a
professor who teaches dental management at the University of
Maryland. TR II/279. The figure was corroborated by a 1985

Survey of Dental Practice conducted by the American Dental Association.
I.G. Ex 159. The investigator testified that he had not revealed
the Respondent's name to the professor, who had taught the Respondent.
The investigator noted that he had indicated to the professor

only the geographic location of the practice and information from
the Respondent's 1984 income tax reports showing the Respondent's
business income, statement of profit and loss, and depreciation
schedule, TR II/288. Those fiyures disclosed that the Respondent
had a $2,000 profit that year on a gross income of $47,000. The
Respondent's expenses included a salary of $8,256 paid to the
Respondent's wife for assistance in the office. TR II/437.

The I.G.'s witness also indicated that the Respondent's house and
lot in Crisfield, Maryland, might have been undervalued, at $29,900,
on tne balance sheet. TR II/255, 272, 275. The Respondent's
accountant used the Somerset County assessment appraisal of

$13,450. The accountant said that Somerset County appraisals

were usually 40 to 45 percent of the market value. TR II/400,

427. Subsequent to his preparation of the balance sheet, he
-~41-

obtained an appraisal from a local realtor, who valued the property
at $31,000. Id. The testimony of the I.G.'s investigator was

based on a visit to the assessor's office and a review of property
sales in Crisfield; he indicated that the assessed value of a

house in Crisfield ranyed from 30 to 60 percent of market value.

TR II/273-274. In my view, the testimony of Doth sides is consistent
and persuades me that an estimated value of approximately $30,000

is reasonable.

The I.G. also questioned the accountant's valuation of the Respondent's
1984 Oldsmobile Cutlass at $5,500. The $5,500 figure was obtained

by the Respondent from a used car dealer in Crisfield. TR I1I/399.

The I.G. cited the National Automobile Dealer's Association "blue

book" average retail price, starting at $6,625 for a four door

sedan. I.G. Ex 160; cf. TR II/261. The "blue book" average loan

value for a four door sedan was $5,000, and the average trade-in

value was $5,550. Id. I find that an estimated value of approximately
$5,500 is reasonable,

Thus, the Respondent's net worth is reasonabDly representd by the
figures shown on the balance sheet, except for the value of
Respondent's dental practice, furnishings, and jewelry.
Considering these factors and other incidental aspects covered in
the testimony of both witnesses, I estimate that, based on the
figures available to me in this record, the Respondent's net
worth is approximately $27,000.

The I.G. considered the Respondent's financial condition to be a
significant mitigating factor (TR 1/291, 292), and I agree.

Although I find the evidence to indicate a more substantial net
worth than the Respondent's balance sheet showed, I am not persuaded
that it is as substantial as the I.G. argues. Thus, I conclude

that the Respondent's financial condition is a more significant
mitigating circumstance than the I.G. considered it to be in
proposing a penalty of $35,000.

VIII. The Penalty As Modified Here is Supported by the Record

Based on my viewing of the Respondent's financial condition, the
fact that the Respondent has already paid $973 in restitution and
performed 250 hours of community service, and the other aggravating
and mitigating circumstances, I reduce the penalty to $13,500.

The penalty that could have been imposed under the CMPL and
Regulations (i.e., $294,000) is much greater than the $35,000
penalty actually proposed by the I1.G. As stated earlier, the
penalty is intended to serve as a deterrent to future unlawful
conduct by both respondents and other providers in the Medicare
~ 42 -

or Medicaid programs. In its report on the CMPL, the House Ways

and Means Committee found that “civil money penalty proceedings

are necessary for the effective prevention of abuses in the

Medicare and Medicaid program. . , ." H.R. Rep. No, 97-158, 96th
Cong., lst Sess. Vol. III, 32, 329 (1981). After weighing all

of the aggravating and mitigating circumstances, I conclude that

a penalty of $13,50U is a sufficient deterrent under the circumstances
of this case.

ORDER

Based on the evidence in the record and the CMPL and Regulations,
it is hereDy Ordered that the Respondent:

(1) pay a penalty of $13,500; and

(2) be suspenaed from Medicare and Medicaid programs for a period
of five (5) years.

/s/

Charles E. Stratton
Administrative Law Judge