Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:

Ishfaq Pendi, M.D.,
Date: April 7, 1995
Petitioner,

Docket No. C-94-417
Decision No. CR368

-v-

The Inspector General

DECISION

By letter dated July 21, 1994, Ishfaq Pendi, M.D., the
Petitioner herein, was notified by the Inspector General
(I.G.) of the United States Department of Health and
Human Services (HHS), that it had been decided to exclude
him for a period of five years from participation in the
Medicare, Medicaid, Maternal and Child Health Services
Block Grant, and Block Grants to States for Social
Services programs.' The I.G. asserted that an exclusion
of at least five years is mandatory under sections
1128(a)(1) and 1128(c)(3)(B) of the Social Security Act
(Act) because Petitioner had been convicted of a criminal
offense related to the delivery of an item or service
under Medicaid.

Petitioner filed a timely request for review of the
I.G.'s action. On September 8, 1994, I held a prehearing
conference in this case. During that conference, the
parties agreed to proceed by filing briefs supported by
documentary evidence.* Having reviewed the parties'

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

? The I.G. submitted a brief (Br.) and eight
exhibits (I.G. Exs. 1-8). Petitioner submitted a brief
(P. Br.) and five exhibits, which Petitioner labeled "A"
through "E." I have renumbered Petitioner's exhibits as
P. Exs. 1-5. The I.G. objected to exhibits "C" through

(continued...)
2

submissions, I have determined that there are no material
and relevant factual issues in dispute (i.e., the only
dispute is as to the legal significance of the undisputed
facts). Based on the undisputed facts and the law, I
have determined that the I.G. is entitled to prevail
because she properly determined that she was required to
exclude Petitioner for at least five years.

APPLICABLE LAW

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

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. In 1985 and 1986, Petitioner was the office manager
in at least two of his stepfather's medical clinics in

New York City.? I.G. Ex. 2 at 1; I.G. Proposed Finding
(PF) #1; P. PP #1.

2. On or about September 4, 1986, Petitioner was
indicted in the United States District Court for the
Southern District of New York on one count of conspiracy
and seven counts of knowingly soliciting and receiving
kickbacks and bribes for referring Medicaid patients to
an ambulette service for transportation that was
reimbursed by Medicaid. I.G. Ex. 2; I.G. PF #3; P. PF
#4.

2(.. continued)
"E" (P. Exs. 3-5) as duplicative. I sustain the I.G.'s
objection and reject P. Exs. 3-5. I have admitted I.G.
Exs. 1-8 and P. Exs. 1 and 2 in evidence.

3 Both the I.G. and Petitioner submitted proposed
findings of fact and conclusions of law. Neither party
contested the other's proposed findings of fact. The
only issue contested by the parties is whether the I.G.
properly decided to exclude Petitioner for five years,
effective 20 days after July 21, 1994. My findings of
fact incorporate elements from the proposed findings of
each party.
3

3. On or about April 28, 1987, Petitioner and
prosecutors executed an agreement in which Petitioner
agreed to cooperate with authorities in their
investigation of Medicaid fraud in return for an
agreement by prosecutors to accept his guilty plea to one
count of conspiracy in full satisfaction of the criminal
charges pending against him. P. Ex. 1; I.G. PF ##5, 6;
P. PF #5.

4. On or about November 19, 1990, Petitioner pled guilty
to count one of the indictment, conspiracy to solicit and
receive Medicaid kickbacks. P. Ex. 2; I.G. PF #6; P. PF
#8.

5. The court accepted Petitioner's plea, but deferred
sentencing and placed the plea allocution under seal at
the request of prosecutors because Petitioner's
cooperation was not at an end. P. Ex. 2; I.G. PF #7; P.
PF #8.

6. Petitioner cooperated fully with authorities. I.G.
Ex. 3; I.G. PF #8; P. PF #10.

7. On or about July 26, 1993, Petitioner was sentenced
to a suspended prison sentence of one year, was placed on
probation for five years, and was fined $10,000. 1I.G.
Ex. 4; I.G. PF #9; P. PF #9.

8. Petitioner was convicted of a criminal offense.
Findings 4, 5.

9. The criminal offense of which Petitioner was
convicted was related to the delivery of an item or
service under Medicaid, within the meaning of section
1128(a)(1) of the Act. Findings 4, 8.

10. The Secretary of HHS has delegated to the I.G. her
authority to impose and direct exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21662 (1983).

11. The I.G. was required to exclude Petitioner for at
least five years. Finding 9.

12. By letter dated July 21, 1994, the I.G. imposed and
directed Petitioner's exclusion from participation in the
Medicare and Medicaid programs for a period of five
years, to commence 20 days after the date of the letter.

13. An administrative law judge has no authority to
modify the date on which an exclusion becomes effective.
4

14. An administrative law judge has no authority to
remand a case to the I.G. with directions to change the
effective date of an exclusion.

PETITIONER'S ARGUMENT

Petitioner states that he does not contest the I.G.'s
proposed findings of fact. P. Br. at 6. I take this to
be an admission that Petitioner was "convicted" and that
his conviction related to the delivery of an item or
service under Medicaid. Thus, Petitioner concedes that
the I.G. had a basis for the exclusion.

Petitioner's only argument is that his exclusion should
be modified to commence on or about November 19, 1990,
the date Petitioner pled guilty pursuant to the
cooperation agreement. Petitioner argues that it is
arbitrary and capricious to delay the effect of his
exclusion when the delays in his sentencing were due to
the desire of prosecutors to maintain secrecy so that
Petitioner could continue to serve as an undercover
witness. If I cannot modify the exclusion, Petitioner
asks, in the alternative, that I remand this case to the
I.G. with directions to modify the commencement of the
exclusion.

DISCUSSION

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

An individual is "convicted" of a criminal offense, as
defined by section 1128(i) of the Act, when, among other
things, the individual's plea of guilty is accepted by a
court. Act, section 1128(i)(3). In the present case, it
is undisputed that Petitioner pled guilty to one count of
conspiracy to solicit and receive Medicaid kickbacks.

The district court accepted Petitioner's plea. P. EX. 2.
Therefore, Petitioner was convicted of a criminal
offense, within the meaning of sections 1128(a) and
1128(i) of the Act.

Further, Petitioner's conviction is related to the
delivery of an item or service under Medicaid.

Petitioner pled guilty to conspiring to solicit and
receive bribes and kickbacks for referring patients to an
5

ambulette service for transportation reimbursable by
Medicaid. An appellate panel of the Departmental Appeals
Board (DAB) has previously held that the crime of
accepting kickbacks for Medicaid referrals is related to
the delivery of items or services, within the meaning of
section 1128(a)(1). Niranjana Parikh, M.D., DAB 1334
(1992). Therefore, a conspiracy to pay or receive
kickbacks for Medicaid referrals must likewise be related
to the delivery of Medicaid items or services.

Because Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid, the I.G. was required to exclude Petitioner for
at least five years. Petitioner argues, however, that
his five-year exclusion should be treated as having
commenced on or about November 19, 1990, when he pled
guilty in federal district court. Petitioner's argument
is unavailing, however, because both the regulations and
case precedent make clear that I am without authority to
change the commencement date of his exclusion.

Section 1005.4(c)(5) of Title 42 of the Code of Federal
Regulations provides that the administrative law judge is
without authority to review any exercise of discretion by
the I.G. In Laurence Wynn, M.D., DAB CR344 (1994), the
administrative law judge concluded that a challenge to
the timing of an exclusion amounted to a challenge to the
I.G.'s exercise of discretion in deciding when to impose
an exclusion. Id. at 11. I agree with this analysis.
Thus, the regulations do not authorize the administrative
law judge to review the timing of an exclusion.

Indeed, the preamble to the regulations explicitly states
that "the ALJ is not authorized under these regulations
to modify the date of commencement of the exclusion." 57
Fed. Reg. 3298, 3325 (1992). Similarly, appellate panels
and administrative law judges of the DAB have
consistently held that an administrative law judge "has
no power to change . . . the beginning date" of a
mandatory exclusion. Samuel W. Chang, M.D., DAB 1198, at
10 (1990); see also Thomas J. DePietro, R.Ph., DAB CR117
(1991). Moreover, in the Chang case, the appellate panel
rejected the argument that an exclusion should be made
retroactive to run concurrently with another sanction.
Chang, DAB 1198, at 10-11; see also David D. DeFries,
D.c., DAB CR156, at 7 (1991), aff'd, DAB 1317 (1992).

As these authorities demonstrate, it is well-settled that
I am without authority to modify Petitioner's exclusion,
whether to make it retroactive to the date of his guilty
plea or for any other reason. Nevertheless, Petitioner
argues, in the alternative, that I should remand the case
6

to the I.G. for reconsideration of the commencement date
of the exclusion. I reject Petitioner's request for a
remand. I can find no remand authority in the
regulations governing my conduct of hearings in these
cases. 42 C.F.R. Part 1005. However, even were I to
conclude that my inherent authority to conduct a fair
hearing included the power to remand appropriate cases to
the I.G., I would not exercise that power here. It is my
conclusion that my lack of authority to modify the date
on which the I.G. imposes an exclusion amounts to a lack
of jurisdiction over the question. Thus, as I lack
jurisdiction to consider Petitioner's request that I
change the commencement date of his exclusion, I
similarly lack jurisdiction to remand this issue to the
I.G.

CONCLUSION

For the reasons stated, I conclude that the I.G. was
required to exclude Petitioner for not less than five
years because he was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid. I am without authority either to modify the
beginning date of Petitioner's exclusion or to remand the
case to the I.G. for reconsideration of that issue.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Roberta E. Miller, DATE: April 4, 1995
Petitioner,

Docket No. C-95-006
Decision No. CR367

-v-

The Inspector General.

DECISION

By letter dated September 18, 1994, Roberta E. Miller, the
Petitioner herein, was notified by the Inspector General (I.G.)
of the United States Department of Health & Human Services (HHS),
that it had been decided to exclude Petitioner for a period of
five years from participation in the Medicare, Medicaid, Maternal
and Child Health Services Block Grant and Block Grants to States
for Social Services programs.' The I.G. asserted that an
exclusion of at least five years was mandated by sections
1128(a)(1) and 1128(c)(3)(B) of the Social Security Act (Act),
because Petitioner had been convicted of a criminal offense
related to the delivery of an item or service under Medicaid.

Petitioner filed a timely request for review of the I.G.'s
action. The parties moved for disposition on the written record.

Because I have determined that there are no facts of decisional
significance that are genuinely in dispute, and because I have
determined that the only matters to be decided are the legal
implications of the undisputed facts, I have decided the case on
the basis of the parties' written submissions.

I find no reason to disturb the I.G.'s determination to exclude
Petitioner from participation in Medicare and Medicaid for a
period of five years.

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

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

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was
administrator of the Alvin Convalescent Center, a Medicaid
certified nursing facility. I.G. Ex. 4, 5.?

2. Petitioner's responsibilities as administrator of the Alvin
Convalescent Center included maintaining trust fund accounts on
behalf of Medicaid patients. I.G. Ex. 4, 5.

3. On November 22, 1991, Petitioner was charged, in a Texas
county court, with the criminal offense of altering patient trust
fund records with intent to defraud. I.G. Ex. 1, 4, 5.

4. Specifically, Petitioner was alleged to have made false
entries on patients' records to make it appear that some
patients, including at least several Medicaid patients, had
received funds when they had not, or that funds had been spent on
a patient's behalf when, in fact, those funds had not been so
spent. I.G. Ex. 1, 4 - 10.

2 Petitioner submitted four exhibits (labelled A
through D) in conjunction with her brief. I have re-
marked these exhibits as Petitioner's exhibits (P. Ex.) 1
through 4 and I have admitted them. The I.G. submitted
14 exhibits in conjunction with her brief. I have
admitted I.G. exhibits (I.G. Ex.) 1 through 13 into
evidence. I reject I.G. Ex. 14 as duplicative. I.G. Ex.
14 is Petitioner's September 18, 1994 notice of
exclusion, which document is present already in the
record of this case. The I.G. submitted also an exhibit
(I.G. Ex. 15) with her reply brief. In my Order of
December 7, 1994, I established a schedule for the
parties to submit briefs and exhibits by December 16,
1994. However, counsel for the I.G. did not submit I.G.
Ex. 15 until sometime in March 1995, and it was not
received by this office until March 16, 1995. As counsel
for the I.G. did not request permission to file this
exhibit late (by almost three months), I reject I.G. Ex.
15 as untimely.
3

5. Petitioner entered a plea of nolo contendere to the charge of
altering patient trust fund records with intent to defraud. I.G.
Ex. 1 - 3.

6. The court accepted Petitioner's plea of nolo contendere, but
withheld making a finding of guilt against Petitioner pursuant to
a deferred adjudication program. Instead, the court placed
Petitioner on probation for six months and fined her $200. I.G.
Ex. 2, 3.

7. Petitioner was convicted of a criminal offense within the
meaning of section 1128(i)(3) of the Act. Findings 1 - 6.’

8. Petitioner was convicted of a criminal offense within the
meaning of section 1128(i)(4) of the Act. Findings 1 - 6.

9. A nursing facility administrator's protection of funds held
in trust for Medicaid recipients who are patients at that
facility is an integral element of the administrator's delivery
of health care services to those patients under Medicaid.

10. Petitioner's conviction of a criminal offense was based upon
her alteration, with the intent to defraud, of the records of
patients in the Alvin Convalescent Center, including several
Medicaid patients. I.G. Ex. 1 - 13; Findings 1 - 9.

11. Petitioner's conviction of a criminal offense is related to
the delivery of items or services under Medicaid, within the
meaning of section 1128(a)(1) of the Act. I.G. Ex. 1 = 13;
Findings 1 ~ 10.

12. Neither the I.G. nor an administrative law judge has the
authority to reduce a five-year minimum exclusion mandated by
sections 1128(a)(1) and 1128(c)(3)(B) of the Act. Act, sections
1128(a) (1), 1128(c) (3) (B); 42 C.F.R. §§ 1001.101, 1001.102.

13. Petitioner was properly excluded from participation in
Medicare and Medicaid for a period of five years pursuant to
sections 1128(a)(1) and 1128(c)(3)(B) of the Act. Findings 1 -
12.

PETITIONER'S POSITION

Petitioner maintains that, under Texas law, she was not found
guilty nor convicted of any criminal offense. Also, she denies
any connection between her actions and the delivery of items or
services under Medicare or Medicaid.

3 I cite to my Findings of Fact and Conclusions

of Law as "Finding(s) (number) ."
4

Moreover, Petitioner asserts that I should treat neither her plea
of nolo contendere or the court's deferral of adjudication in her
criminal case as a conviction under the Act. Section
1128(i)(3),(4). Petitioner asserts that if I were to find either
her plea of nolo contendere or the deferred adjudication to be a
conviction within the meaning of section 1128(i) of the Act, such
finding would circumvent the State's reasons for enacting laws
permitting nolo contendere pleas and deferred adjudications.

Petitioner contends that the State's reason for permitting nolo
contendere pleas is to promote the disposition of criminal cases
by compromise. Petitioner contends further that nolo contendere
pleas create a significant incentive for a defendant to terminate
litigation. This is because, by pleading nolo contendere, a
defendant does not have to admit guilt, which admission might
compromise a defendant's position in other legal proceedings.

Additionally, Petitioner contends that section 1128(i) of the Act
is unconstitutional as applied to her case under the Fifth and
Fourteenth Amendments to the United States Constitution.
Specifically, Petitioner contends that section 1128(i) is
unconstitutional based on the disparate impact the exclusion
proceeding will have upon her, as opposed to other persons who
plead nolo contendere.

DISCUSSION

Section 1128(a)(1) of the Act, under which the I.G. seeks
Petitioner's exclusion, contains two requirements. It requires
that an individual: (1) be convicted of a criminal offense, and
(2) that the conviction be related to the delivery of an item or
service under Medicare or Medicaid.

Section 1128(i) of the Act provides that, for purposes of
sections 1128(a) and 1128(b) of the Act, an individual will be
deemed to have been "convicted" of a criminal offense --

(1) when a judgment of conviction has been entered against
the individual or entity by a Federal, State, or local
court, regardless of whether there is an appeal pending or
whether the judgment of conviction or other record relating
to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the
individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the
individual or entity has been accepted by a Federal, State,
or local court; or
5

(4) when the individual or entity has entered into
participation in a first offender, deferred adjudication, or
other arrangement or program where judgment of conviction
has been withheld.

In the case at hand, I have found that Petitioner has been
convicted of a criminal offense under both sections 1128(i) (3)
and 1128(i)(4) of the Act. Regarding section 1128(i)(3), the
evidence demonstrates that Petitioner entered a nolo contendere
plea and the court expressly accepted it. A plea of nolo
contendere falls within the meaning of section 1128(i) (3)
whenever a party offers such a plea and a court agrees to accept
it as an element of an arrangement to dispose of a pending

criminal matter. Douglas L. Reece, D.0., DAB CR305 (1994).

Regarding section 1128(i)(4), the language of the statute is
plain and encompasses situations where an individual or entity
has entered into a first offender, deferred adjudication, or
other arrangement where judgment of conviction has been withheld.
The fact that, in this case, the court withheld making a finding
of guilt against Petitioner and instead imposed a period of
probation - rather than immediately declaring her to be guilty -
is precisely the situation contemplated by this section of the
Act. By the very terms of Petitioner's plea of nolo contendere,
the court withheld making a final finding of guilt against
Petitioner. Instead, the court placed Petitioner on probation
and reserved the right to reinstate the conviction in the event
Petitioner failed to fulfill the terms of her probation. Prior
decisions of administrative law judges at the Departmental
Appeals Board have held that such a deferred adjudication does
not bar mandatory exclusion under section 1128(a)(1) of the Act.
Douglas L. Reece, D.O., DAB CR305 (1994); James F. Allen,
M.D.F.P., DAB CR71 (1990). Thus, I have found that, under the
plain meaning of section 1128(i)(4) of the Act, Petitioner has
been convicted of a criminal offense.

Petitioner argues, however, that I should disregard section
1128(i) of the Act and not consider her to have been convicted of
a criminal offense within the meaning of the Act. Petitioner
supports her argument by asserting that once her probationary
period has elapsed, Texas law would regard her as having
committed no offense, implying that she should not be considered
to have been convicted of a criminal offense. While I do not
question the validity of Petitioner's interpretation of Texas
law, such interpretation is irrelevant here, because "what
constitutes a conviction under the Medicaid Act... is
determined by federal law, not State law." Travers v. Shalala,
20 F.3d 993, 996 (1994); see United States v. Brebner, 951 F.2d
1017, 1021 (1991).

6

Turning to the second requirement of section 1128(a)(1) of the
Act, I have found that Petitioner's conviction of the alteration
of patient trust fund records with intent to defraud relates to
the delivery of items or services under Medicaid. In this
regard, it has been held that the protection of funds held in
trust for Medicaid recipients is an integral element of the
services delivered to Medicaid recipients by nursing facilities.
Jerry Edmonson, DAB CR59 (1989); Gary Gregory, DAB CR274 (1993).
The petitioner in Edmonson was a nursing home administrator who
had been convicted of misapplying funds that he held ina
fiduciary capacity for a Medicaid recipient. The administrative
law judge in Edmonson found that the protection of Medicaid
recipients' funds is an integral element of the Medicaid services
delivered by nursing facilities. Since the petitioner in
Edmonson had been convicted of a criminal offense affecting an
integral element of the delivery of Medicaid services, the
administrative law judge reasoned that the petitioner's offense
was related to the delivery of Medicaid services within the
meaning of section 1128(a)(1) of the Act.

In the case at hand, the facts which led to Petitioner's plea of
nolo contendere involved her alteration of patients' trust fund
records with the intent to defraud. By altering these trust fund
records, Petitioner misappropriated the funds of Medicaid
recipients. Findings 1 - 10. As was stated in Edmonson, the
protection of such funds is an integral element of the Medicaid
services delivered by a nursing facility such as Alvin
Convalescent Center. As administrator of the Alvin Convalescent
Center, Petitioner had a duty, as part of the services she
provided as administrator, to protect those funds. Accordingly,
I found above that Petitioner's conviction for this criminal
offense was program-related within the meaning of section
1128(a)(1) of the Act.

Petitioner contends that the I.G.'s attempt to classify her nolo
contendere plea or deferred adjudication as a conviction
mandating a five-year exclusion under section 1128(a) (1) violates
her Constitutional rights. I construe one of Petitioner's
contentions regarding the Constitutionality of her exclusion to
be that her exclusion violates the Constitutional prohibition
against double jeopardy. However, my delegation of authority to
hear and decide exclusion cases brought pursuant to section 1128
does not include the authority to rule on the Constitutionality
of either federal statutes or the I.G.'s actions. Thus, I have
no authority to rule on the Constitutionality of any action the
I.G. has taken against Petitioner. 42 C.F.R. § 1005.4(c) (1),
(4). However, when an exclusion is imposed pursuant to section
1128 of the Act, the primary purpose of that exclusion is to
protect Medicare and Medicaid from future misconduct by a
provider who has been shown to be untrustworthy. Francis
Shaenboen, R.Ph., DAB CR97 (1990), aff'd DAB 1249 (1991).
District courts have specifically found that exclusions imposed
7

under section 1128 of the Act are remedial in nature, rather than
punitive, and do not violate the double jeopardy provisions of
the Constitution. Manocchio v. Sullivan, 768 F. Supp. 814 (S.D.
Fla. 1991). Additionally, it has been held that double jeopardy
does not apply to a subsequent federal prosecution based on facts
which led to a State conviction. Abbate v. United States, 359
U.S. 187 (1959).

Additionally, Petitioner argues that her exclusion circumvents
Texas' reasons for allowing defendants to plead nolo contendere,
and, thus, violates her right to due process and equal protection
under the Constitution. Again, I note that I do not have the
authority to rule on the Constitutionality of federal statutes or
any action the I.G. might take against Petitioner. Furthermore,
the exclusion imposed and directed against Petitioner by the I.G.
was done under the authority of federal law. What constitutes a
conviction under Texas law or what Texas' motivations were in
enacting a law allowing nolo contendere pleas is irrelevant to my
determination here, because federal law is controlling. Travers
v. Shalala, 20 F.3d 993, 996 (1994) (citations omitted); Larry M.
Edwards, M.D., DAB CR278 (1993); Carlos Zamora, M.D., DAB 1104
(1990); Douglas L. Reece, D.O., DAB CR305 (1994).

Petitioner argues also that the I.G. may not exclude her because
Petitioner was not aware that her nolo contendere plea could

serve as a basis for the I.G. to exclude her. This argument is
without merit. A similar argument was made by the petitioner in

the case of Douglas Schram, R.Ph,, DAB CR215 (1992), aff'd DAB
1372 (1992) and rejected by me. In rejecting petitioner's
argument, I cited U.S. v. Suter, 755 F.2d 523, 525 (7th Cir.

1985), and noted that the court had held that a defendant ina
criminal proceeding does not have to be advised of all possible
consequences which may flow from his plea, which consequences may
include, as is the case here, temporarily being barred from
receipt of government reimbursement for professional services.

Lastly, neither the evidence submitted by Petitioner regarding
her completion of probation without further incident or the
statements regarding Petitioner's good character prepared by
persons acquainted with her are relevant to any of the issues
before me. Sections 1128(a)(1) and 1128(c)(3)(B) of the Act
mandate a five-year exclusion for the conviction of a program-
related offense. Therefore, although Petitioner's successful
completion of probation and the statements attesting to her good
character may be factors that reflect positively upon her, I have
no authority to consider them as bases for reducing the five-year
exclusion imposed and directed against her by the I.G.

‘ These statements can be found at P. Ex. 1 - 4.
8
CONCLUSION
Petitioner's conviction of a program-related offense mandates

that she be excluded from Medicare and Medicaid for the mandatory
minimum five-year period.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Hospicio en el Hogar de Lajas, DATE: March 31, 1995
Petitioner,

Docket No. C-94-361
Decision No. CR366

- ver

Health Care Financing
Administration.

DECISION

Petitioner requested a hearing on a determination by the
Health Care Financing Administration (HCFA) to terminate
Petitioner's participation in the Medicare program. The
case was assigned to me for a hearing and a decision. I
scheduled a hearing to be held in San Juan, Puerto Rico,
beginning November 1, 1994. At the commencement of the
hearing, the parties advised me that neither of them
desired to offer in-person testimony. They agreed that
they would offer exhibits and briefs.

I have considered the applicable law and regulations, the
exhibits, and the parties' arguments.’ I conclude that
HCFA proved, by the preponderance of the evidence, that
Petitioner failed to comply with a condition governing
its participation in Medicare. Therefore, HCFA was
authorized to terminate Petitioner's participation in
Medicare.

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

The issue in this case is whether HCFA was authorized to
terminate Petitioner's participation in the Medicare

! HCFA offered HCFA exhibits 1 - 29 as evidence.
Petitioner did not offer any exhibits. I afforded
Petitioner the opportunity to object to HCFA's exhibits.
Petitioner did not object. I admit into evidence HCFA
exhibits 1 - 29.
2

program. In deciding that HCFA was authorized to
terminate Petitioner's participation, I make specific
findings of fact and conclusions of law. After each
finding or conclusion, I cite to the page or pages of the
decision at which I discuss the finding or conclusion.

1. HCFA may terminate a provider's participation in
the Medicare program when the provider is not
complying with a condition that governs its
participation in Medicare. Pages 9, 21.

2. In a case where a provider requests a hearing on
a determination by HCFA to terminate its
participation in Medicare, HCFA must come forward
with evidence that the determination to terminate
the provider's participation agreement is
authorized. HCFA must prove, by a preponderance of
the evidence, that the determination to terminate
the provider's agreement is authorized. Pages 6 -
8.

3. HCFA did not deny Petitioner due process when it
effectuated termination of Petitioner's
participation agreement after its May 2 - 3, 1994
resurvey of Petitioner without first affording
Petitioner the opportunity to correct deficiencies
that were identified at the resurvey. Pages 8 = 10.

4. HCFA proved, by the preponderance of the
evidence, that Petitioner failed to establish plans
of care for its patients which met the condition of
participation established by 42 C.F.R. § 418.58.
Pages 17 - 20.

5. HCFA was authorized to terminate Petitioner's
participation in the Medicare program. Page 21.

II. Discussion
A. C: Ow

Petitioner is a hospice, operating in Lajas, Puerto Rico.
A hospice is described under section 1861(dd)(1) of the
Social Security Act (Act) as a Medicare provider which
offers care and services to a terminally ill beneficiary
pursuant to a written plan of care established and
periodically reviewed by the beneficiary's attending
3

physician, the hospice's medical director, and its
interdisciplinary group.”

A hospice provides its care and services in the
beneficiary's home, on an outpatient basis, and, in some
instances, on a short-term inpatient basis. Act, section
1861(dd) (2) (A) (ii). Hospice services include: nursing
care, physical and other therapy, medical social
services, home health aide services, medical supplies,
physicians' services, short-term inpatient care, and
counseling. Id., section 1861(dd)(1)(A) - (H). In
addition, a hospice provides bereavement counseling for
the immediate family of a terminally ill beneficiary.
Id., section 1861(dd) (2) (A) (4).

On March 8, 1994, Petitioner was surveyed on behalf of
HCFA by the Puerto Rico Department of Health. HCFA
Exhibit (Ex.) 15 at 1. The purpose of the survey was to
determine whether Petitioner was conducting its
operations in compliance with the requirements of the
Medicare program. On March 23, 1994, HCFA advised
Petitioner that it had determined that Petitioner was not
in compliance with Medicare conditions of participation.
Id. HCFA advised Petitioner that it would terminate
Petitioner's participation as a provider of services in
the Medicare program.

On April 6, 1994, Petitioner submitted a plan of
correction to HCFA in which it proposed to correct the
deficiencies which the Puerto Rico Department of Health
had identified in its operations. HCFA Ex. 16. On April
19, 1994, HCFA notified Petitioner that it had found the
plan to be not fully acceptable. HCFA Ex. 17. On April
28, 1994, Petitioner submitted a revised plan of
correction to HCFA. HCFA Ex. 18. HCFA did not send a
response to Petitioner advising it whether HCFA found the
revised plan to be acceptable or unacceptable.

Neither HCFA nor Petitioner offered evidence to show
whether HCFA found the revised plan of correction to be
acceptable. Petitioner has not contended that HCFA
accepted the revised plan. Petitioner has not argued
that, if HCFA had accepted the revised plan of
correction, its relationship with HCFA would be governed
by the terms of that revised plan. Nor has Petitioner
asserted that, by virtue of HCFA's alleged acceptance of

2 Under the Medicare program, an individual is
considered to be "terminally ill" if that individual has
a medical prognosis that he or she is expected to live
six months or less. Act, section 1861(dd) (3) (A).
4

the revised plan of correction, Petitioner would be
entitled to a period of time in which to conform its
operations to the corrective actions it pledged to take.
Therefore, I make no findings in this decision as to
whether HCFA accepted Petitioner's revised plan of
correction. Furthermore, I make no findings as to
whether acceptance of a plan of correction by HCFA would
entitle a provider to any rights precluding HCFA from
terminating its participation in Medicare. I note
however, that it is not HCFA's practice always to notify
a provider that it finds a plan of correction to be
acceptable. HCFA Ex. 28 at 27 - 28.

On May 2 - 3, 1994, HCFA conducted a second survey of
Petitioner in order to determine whether Petitioner was
complying with the requirements for participation in
Medicare. HCFA found that Petitioner continued to be
noncompliant with regulations which governed Petitioner's
participation in Medicare. HCFA Ex. 20. The regulations
which HCFA found Petitioner to continue to contravene are
42 C.F.R. §§ 418.50 and 418.58. On May 20, 1994, HCFA
advised Petitioner of these findings, and advised it
further that it had affirmed its previous determination
to terminate Petitioner's participation in the Medicare
program. Id.

In its notification to Petitioner of the results of the
March survey, HCFA had advised Petitioner that it had
determined that Petitioner was not complying with six
regulations which state conditions governing hospices'
participation in Medicare. These were: 42 C.F.R. §§
418.50 (general provisions); 418.58 (plan of care);
418.62 (informed consent); 418.74 (general clinical
records); 418.92 (physical therapy, occupational therapy,
and speech language pathology); and 418.94 (home health
aide and homemaker services). HCFA does’ not contend
that, as of May 2 - 3, 1994 (the dates of the second
survey), Petitioner continued to fail to comply with 42
C.F.R. §§ 418.62, 418.74, 418.92, and 418.94.

This case addresses the issue of whether HCFA was
authorized to terminate Petitioner's participation in
Medicare based on Petitioner's failure to comply with
conditions of participation stated in 42 C.F.R. §§ 418.50
and 418.58. Petitioner's alleged previous noncompliance
with other regulations is not an issue. Furthermore,
HCFA now argues that it derives its finding that
Petitioner failed to comply with 42 C.F.R. § 418.50 from
its finding that Petitioner failed to comply with 42
C.F.R. § 418.58. HCFA's Brief at 18, n.4. Therefore,
the evidence in this case addresses only the question of
5

whether Petitioner failed to meet the requirements of 42
C.F.R. § 418.58.

That regulation governs the plans of care which hospices
must create and maintain for Medicare beneficiaries whose
care they manage. The regulation provides, as a
condition for participation, that a hospice must
establish and maintain a written plan of care for each
beneficiary to whom it provides care and that all care
provided to a beneficiary must be provided in accordance
with that beneficiary's plan of care. Iq.

The regulation contains three subparts which establish
standards of participation under the plan of care
condition. 42 C.F.R. § 418.58(a) - (c). The standards
set forth in these subparts are captioned:
"Establishment of plan," "Review of plan," and "Content
of plan." Id. Based on the survey conducted on May 2 -
3, 1994, HCFA found that Petitioner was not complying
with all three of these standards and with the condition
for, participation stated in the regulation. HCFA Ex.
20.3

B. iscuss °

This case involves legal issues concerning the
interpretation and application of the Act and relevant
regulations. The parties' arguments on these issues are
Similar to those raised by the parties in Arecibo Medical
Hospice Care, DAB CR363 (1995). I reach essentially the
same conclusions of law in this case as I did in the
Arecibo case.

3 Below, I discuss the contents and meaning of
these standards, HCFA's allegations about Petitioner's
performance under each of these standards, and my
conclusions.

4 As in this case, Arecibe involved the propriety
of a termination by HCFA of a hospice's participation in
the Medicare program. Both this case and Arecibo present
very similar facts and involve the application of the
same regulation. The same attorney represented the
petitioners in both Arecibo and the present case. The
briefs which HCFA submitted in the two cases presented
identical arguments regarding HCFA's position as to the
legal issues.
6

The legal issues, my analysis, and my conclusions are as
follows:

1. Burdens of coming forward with evidence and
persuasion

HCFA argues that Petitioner should bear the burden of
persuasion to prove that HCFA's determination to
terminate Petitioner's participation in Medicare is not
authorized. I am not persuaded by HCFA's arguments. I
conclude that HCFA bears the burdens of coming forward
with evidence and persuasion to establish that its
determination to terminate Petitioner's participation in
Medicare is justified. Arecibo at 8 - 13.

Neither Congress nor the Secretary has allocated the
burdens of coming forward with evidence and persuasion in
a hearing involving the propriety of a determination to
terminate a provider's participation in Medicare. The
Act provides for a de novo hearing in such a case,
governed by section 205 of the Act. Act, sections
205(b), 1866(b) (2), 1866(h)(1). The Act does not state
who shall bear the burdens of coming forward and
persuasion in an administrative hearing concerning
whether a determination to terminate a provider's
participation in Medicare is justified. Regulations
published by the Secretary to govern such a hearing do
not allocate the burdens of coming forward with evidence
and persuasion. See 42 C.F.R. Part 498.

However, the Secretary has reposed broad discretion in
administrative law judges to decide the manner in which
evidence is presented and received in such a hearing. 42
C.F.R. § 498.60(b) (3). I do not read this regulation or
the other regulations in Part 498 as containing a
statement by the Secretary as to who should bear the
burdens of coming forward with evidence and persuasion in
a provider termination hearing. I read the regulations'
silence on this question, coupled with the broad grant of
discretion conferred by 42 C.F.R. § 498.60(b)(3), to
constitute a decision by the Secretary to give
administrative law judges the authority to allocate such
burdens consistent with the requirements of due process.

Arecibo at 9.

In this case, as in most cases involving determinations
by HCFA to terminate providers' participation in
Medicare, HCFA has obtained the facts which justify its
determination through a survey of Petitioner's
operations. HCFA thus knows the facts on which it relies
to support its determination and is in the best position
to prove those facts. Id. It is therefore both fair and
7

efficient to require HCFA to come forward with evidence
sufficient to prove, by a preponderance of the evidence,
that its determination to terminate a provider's
participation in Medicare is justified under the Act and
regulations.

In contrast, it is not reasonable to expect a provider to
prove a negative proposition -- that it has not
contravened provider participation requirements -- in the
absence of affirmative proof that it has contravened
those requirements. I conclude here, as I did in
Arecibo, that imposing this burden on a provider would
inject a note of uncertainty into the administrative
hearing process, because the provider could never be sure
what or how much evidence it would be required to offer
to rebut HCFA's unsubstantiated determination. Id. at
11. The consequence might be to invite a massive and
unfocused submission of evidence from that provider. Id.

HCFA relies on the same arguments here as it did in
Arecibo to support its assertion that Petitioner bears
the burden of persuasion. HCFA asserts that a provider
who challenges an adverse determination by HCFA ought to
bear the burden of showing that the determination is not
justified, inasmuch as the determination is final if a
hearing is not requested. This argument ignores the fact
that a hearing as to the propriety of a determination by
HCFA made under the authority of section 1866 of the Act
is de novo.

HCFA argues also that, as a general principal of
‘administrative law, it is the applicant for relief,
benefits, or privilege that bears the burden of
persuasion in a hearing to contest the denial of those
benefits. While I do not take issue with that general
principal, it is not applicable in this-case. Petitioner
is no longer an applicant, but is instead an entity with
an established, quasi-contractual relationship with HCFA.
As I observed in Arecibo, a provider who has this quasi-
contractual relationship with HCFA will have made
financial commitments and have established business
relationships based on that relationship. Iq. at 11.
Although the quasi-contractual relationship does not
establish an unqualified entitlement to participate in
Medicare, it would ignore the reality of the provider's
reliance on that relationship to characterize the
provider merely as an “applicant,” in order to impose on
the provider the burden of proving that any determination
by HCFA is unreasonable. Iq.
8

HCFA relies also on judicial decisions and on a decision
by the Office of Hearings and Appeals and Appeals Council
of the Social Security Administration to support its
argument as to allocation of the burden of persuasion. I
discussed these decisions in Arecibo. Id. at 12. I do
not find them to be persuasive. The judicial decisions
simply restate the general rule as to allocating the
burden of persuasion to applicants for benefits, in cases
concerning denials of applications for benefits. I do
not find these decisions to be applicable here, for the
reasons which I explain above and in Arecibo. The
Appeals Council decision does not state expressly that
the burden of persuasion falls on the party whose
participation in Medicare has been terminated by HCFA.
Jefferson Memorial Hosp. Ass'n v. Health Care Financing
Administration, Docket No. PS-109, at 17 (1983). Indeed,
that decision may support my allocation of the burden of
persuasion to HCFA. Id.; Arecibo at 12.

2. Alleged denial of due process to Petitioner

As was argued by the petitioner in Arecibo, Petitioner
asserts that HCFA denied it due process of law by not
permitting it the opportunity to submit a plan of
correction to address the noncompliance which HCFA found
as a consequence of the May 2 - 3, 1994 resurvey.
Petitioner argues that, where HCFA finds a provider to be
deficient in complying with a standard contained in a
regulation, it is obligated to afford that provider the
opportunity to submit a plan of correction, prior to
taking any action to terminate that provider's
participation in Medicare. 42 C.F.R. § 488.28.

Petitioner points to the statement of deficiencies
generated as a result of the May 2 - 3, 1994 resurvey as
evidence that, at the resurvey, HCFA found Petitioner to
be out of compliance with a standard under 42 C.F.R. §
418.58 which was not cited in the statement of
deficiencies generated as a result of the March 8, 1994
survey. HCFA Ex. 16 at 2 - 7; HCFA Ex. 19 at 2 - 8.5
Petitioner argues that, as a consequence of HCFA's
determination that Petitioner was not complying with an
additional standard under the regulation, Petitioner was
entitled to submit a new plan of correction to HCFA.

5 Based on the March 8, 1994 survey, HCFA found
that Petitioner was not in compliance with 42 C.F.R. §
418.58(a) and (b), whereas based on the May 2 - 3, 1994
resurvey, HCFA found that Petitioner was not in
compliance with 42 C.F.R. § 418.58(a), (b), and (c).
9

I am not persuaded that HCFA denied Petitioner due
process. HCFA was under no obligation to give Petitioner
the opportunity to submit a plan of correction to cure
the deficiencies identified at the May 2 - 3, 1994
resurvey of Petitioner. Arecibo at 5 - 8.

HCFA is not obligated to give a provider the opportunity
to submit a plan of correction where it identifies a
failure by that provider to comply with a condition of
participation in Medicare. Here, the deficiencies which
HCFA identified in Petitioner's operations, both at the
March 1994 survey, and the May 1994 resurvey, constituted
failures to comply with conditions of participation. The
regulations authorize HCFA to terminate a provider's
participation in the Medicare program if the provider
fails to comply with any condition of participation. 42
C.F.R. § 489.53(a)(1), (3). Petitioner had no right to
expect that HCFA would give it the opportunity to submit
plans of correction to correct the condition-level
deficiencies which HCFA identified at either survey.

The regulations which govern participation of hospices in
the Medicare program state broad conditions of
participation which hospices must comply with in order to
participate in Medicare. 42 C.F.R. Part 418. These
regulations also contain standards of participation,
which constitute the criteria which a hospice must meet
under each condition of participation.

HCFA may determine that a hospice fails to comply with a
standard of participation under a given condition, and it
may conclude also that the severity of the noncompliance
is not so great as to constitute a failure to comply with
the overall condition of participation. In that event,
HCFA must afford the provider the opportunity to submit a
plan of correction to HCFA to redress the noncompliance.
42 C.F.R. § 488.28. However, where HCFA finds that the
failure of a hospice to comply with standards of
participation is so egregious as to constitute a failure
to comply with the broad condition that encompasses those
standards, then HCFA is not required to give that hospice
the opportunity to submit a plan of correction to redress
the noncompliance. Id.

In this case, HCFA found, both at the initial survey and
the resurvey which it conducted of Petitioner, that
Petitioner was not complying with conditions of
participation in Medicare. HCFA was not obligated, as a
result of these findings, to give Petitioner the
opportunity to file plans of correction. The fact that
HCFA gave Petitioner that opportunity after the March
10

survey did not obligate HCFA to give Petitioner the same
opportunity after the May resurvey.

It is true, as Petitioner points out, that based on the
May resurvey, HCFA found that Petitioner failed to comply
with all three standards under the condition stated in 42
C.F.R. § 418.58, whereas, in the March survey, HCFA found
that Petitioner failed to comply with only two of the
three standards under that condition. However, in both
the March survey and the May resurvey, HCFA found that
Petitioner's noncompliance with the standards stated in
42 C.F.R. § 418.58 was so egregious as to amount to a
failure to comply with the overall condition of
participation contained in the regulation. Petitioner
did not gain the right to submit a plan of correction in
response to the May survey by virtue of the fact that
HCFA found Petitioner to be deficient under an additional
standard of the regulation, inasmuch as HCFA's central
finding was that Petitioner was not complying with the
overall condition of participation expressed in that
regulation.

Cc. Analysis of t equ ent for
hospices

The regulation that is principally at issue in this case
is 42 C.F.R. § 418.58, which establishes the general
condition of participation for a hospice that it
establish and maintain a plan of care for each of its
patients and that it provide treatment in accordance with
the plan of care. This general condition is implemented
in three subsections.

1. 42 C.F.R. § 418,58(a)

The hospice's medical director or phys{fcian designee and
the hospice's interdisciplinary group must establish a
plan of care for each patient before the hospice provides
care to that patient. 42 C.F.R. § 418.58(a). On its
face, the requirements of this subsection are plain. A
hospice may not provide care to a patient until it has
reviewed that patient's needs and problems and
established a plan of care to deal with them. The
subsection plainly envisions a plan of care as
constituting an overall blueprint of care to be provided
to each hospice patient.

HCFA appears to interpret this subsection to impose
additional requirements on hospices which are not evident
from the subsection's plain meaning, but which may not
necessarily be unreasonable. HCFA appears to be arguing
that this subsection requires that a new or revised plan
11

of care be created to deal with each new problem
manifested by a hospice patient as it arises. See HCFA's
Brief at 21 ~ 22 (In Arecibo, HCFA made this argument
explicitly.)

2. 42 C.F.R. § 418.58(b

Each plan of care must be reviewed and updated, at
intervals specified in the plan, by the patient's
attending physician, the hospice medical director or
physician designee, and the hospice's interdisciplinary
group. These reviews must be documented. 42 C.F.R. §
418.58(b). The unambiguous requirement of this section
is that in each plan of care that a hospice establishes
for each of its patients, it must establish a schedule by
which it reviews that plan of care. Furthermore, each
review must be documented by the appropriate individuals
and by the hospice's interdisciplinary group. Plainly,
the intent of this subsection is to assure regular,
scheduled reviews of each hospice patient's condition
which are documented. The intent also is to assure that
no hospice patient receives sporadic or unsystematic
treatment of his or her problems.

The term "intervals specified in the plan" can be read
reasonably to require either that a hospice establish
specified dates for review of each patient's plan of care
or specified events which would trigger a review. The
subsection appears to repose some discretion on a hospice
to choose the schedule by which it elects to review each
patient's plan of care.

3. 42 C.F.R. § 418,58(¢)

Each plan of care must include an assessment of the
patient's needs and must identify the services to be
provided to address those needs, including services to
manage discomfort and symptom relief. Furthermore, each
plan of care must state in detail the scope and frequency
of services needed to meet the patient's and his or her
family's needs. 42 C.F.R. § 418.58(c). As with the
other subsections of the regulation, this subsection
contains unambiguous requirements. It requires that a
plan of care provide a specific statement of the needs of
the patient and a specific statement as to how those
needs will be addressed by the hospice and its personnel.

In Arecibo and in this case, HCFA asserts an
interpretation of this subsection which would impose
requirements on hospices which go beyond the subsection's
plain meaning. HCFA argues that this subsection should
be read to reinforce its interpretation of 42 C.F.R. §
12

418.58(a}) to require that a hospice create a new or
revised plan of care to address each new problem that a
patient develops.

HCFA argues also that 42 C.F.R. § 418.58(c) means that a
plan of care must specify the specific discipline that
will be providing each service to a patient pursuant to
the plan. Furthermore, according to HCFA, the subsection
should be interpreted to require that a plan of care
specify the name and frequency of administration of each
medication administered to a patient.* I find these
interpretations also to be beyond the plain meaning of
the subsection.

D. CFA's dut fe) te t oviders s
inte atio i

HCFA does not deny that its interpretations of the three
subsections of 42 C.F.R. § 418.58 may go beyond the plain
meaning of these subsections. However, HCFA appears to
be arguing that, as the entity vested with the authority
to implement the regulations, it must be vested also with
the authority to interpret these regulations reasonably.’
Furthermore, according to HCFA, hospices in general and
Petitioner in particular have a duty to be aware of and
to understand and comply with HCFA's interpretation of
regulations. Thus, according to HCFA, a hospice may not
use its ignorance of HCFA's interpretation of the
regulations as an excuse to avoid its duty to comply with
HCFA's interpretation.

I held in Arecibo, as I hold here, that HCFA certainly
has the authority to interpret regulations in a
reasonable way to account for and to address
circumstances that may not fall within the plain meaning
of the regulations. However, HCFA is fot entitled to
make its interpretation binding on any provider to which
it has not communicated that interpretation. Providers
cannot be expected to divine HCFA's interpretation of a
regulation where that interpretation departs from the
plain meaning of the regulation or where it addresses and
resolves ambiguous language.

6 HCFA argued this identical interpretation in
Arecibo. Arecibo at 15 - 16, 23 - 24.

7 HCFA does not assert this position as
explicitly here as it did in Arecibo. Arecibo at 14 -
16, 22 ~ 23. However, it is clear from the context of
HCFA's arguments that it has not modified its position.
13

HCFA argues here, as it did in Arecibo, that providers
have a duty to be aware of and abide by HCFA's
interpretation of regulations where that interpretation
comports with practices that are generally accepted and
followed by providers. HCFA can find support for the
reasonableness of its interpretation of regulations where
its interpretation comports with practices that are
accepted and followed by providers. But the fact that an
interpretation of a regulation comports with accepted
practices does not excuse HCFA from the duty of
communicating its interpretation to providers, where the
interpretation is not apparent from the plain meaning of
the regulation.

In both Arecibo and this case, HCFA asserts that its
position as to the duty of providers to be aware of and
comply with HCFA's interpretation of regulations is
consistent with my holding in Long Medical Laboratory,
DAB CR334 (1994). In the Long Medica] Laboratory case I
held that the petitioner had a duty to be aware of its
obligations to comply with provisions of the Clinical
Laboratories Improvement Amendments. But, what
distinguishes the Lon edi borato case from the
present case is that the dica ie) case
involved a provider's failure to comply with an
unambiguous statutory requirement, whereas, in this case,
the alleged failure to comply is with interpretations of
regulations that depart from the plain language of the
regulations. The Long Medica] Laboratory case did not
involve any issue of interpretation of the statutory
requirement.

My analysis here is entirely consistent with my analysis
in the ledica case. Petitioner is
required te be aware ape and to comply with, the
unambiguous requirements of the Act and- tegulations, as
well as any reasonable interpretations of law which HCFA
has communicated to providers. However, that duty does
not extend to interpretations by HCFA which have not been
communicated to providers.

HCFA contends that, in any event, it communicated to
Petitioner its interpretation of the three subsections of
42 C.F.R. § 418.58 in the statement of deficiencies which
was sent to Petitioner after the March 8, 1994 survey.
HCFA Ex. 16 at 2 - 7. I am not persuaded from my review
of this exhibit that it communicates precisely to
Petitioner HCFA's interpretation of the three subsections
of 42 C.F.R. § 418.58. Nowhere does the statement of
deficiencies state explicitly the interpretation now
advocated by HCFA.
14

Arguably, a provider might be in a position to infer from
the specific deficiencies described in the statement that
HCFA is advocating an interpretation that imposes
additional requirements to those which are stated in the
plain language of the regulation. For example, the
specific deficiencies which the statement identifies
under 42 C.F.R. § 418.58(a) could lead a provider to
conclude that HCFA was interpreting the subsection to
require at least that a plan of care be amended to deal
with new problems as they arise. HCFA Ex. 16 at 3 - 5.
However, where HCFA interprets a regulation to impose
requirements on providers that exceed those which are
stated in the plain language of the regulation, it owes a
duty to those providers to state its interpretation
plainly and directly. Giving providers a statement from
which they might be able to infer an interpretation will
not suffice.

I conclude that HCFA did not prove that it communicated
its interpretation of the three subsections of 42 C.F.R.
§ 418.58 to Petitioner sufficiently to put Petitioner on
notice that HCFA was requiring it to comply with
requirements that depart from the plain meaning of the
subsections. Therefore, I analyze HCFA's contentions
that Petitioner remained out of compliance with the
requirements of the regulation, using only the plain
meaning of the regulation.

E. Analysis of HCFA's allegations of noncompliance

I conclude from my review of the evidence that HCFA
established by a preponderance of the evidence that, as
of the May 8, 1994 resurvey, Petitioner was not complying
with plain and specific requirements of 42 C.F.R. §
418.58(b). I do not agree with HCFA's assertions that
Petitioner was not complying with the provisions of 42
C.F.R. § 418.58(a) and (c).

The weight of the evidence supports HCFA's contentions of
fact as to the way in which Petitioner generated and
reviewed its plans of care. However, HCFA's assertion
from these facts that Petitioner was not complying with
42 C.F.R. § 418.58(a) and (c) relies on its
interpretation of the requirements of these subsections.
As I hold above, HCFA's interpretation was not within the
plain meaning of the subsections' language. There is no
evidence that HCFA communicated its interpretation to
Petitioner.

There were no witnesses called by either party. The
parties agreed to rely solely on the exhibits which are
in evidence and their analysis of those exhibits. The
15

evidence which I find to be relevant to my conclusion
that Petitioner was not complying with 42 C.F.R. §
418.58(b) consists of the following exhibits: HCFA Ex.
19 (the statement of deficiencies which was prepared
after the May 2 - 3, 1994 resurvey); HCFA Exs. 21 - 24
(excerpts from records of patients that were reviewed at
the May 2 - 3, 1994 resurvey, portions of which have been
translated into English); HCFA Ex. 25 (notes made by one
of the surveyors who participated in the May 2 - 3, 1994
resurvey); and HCFA Exs. 26 - 27 (the curriculum vitae of
the surveyors who conducted the May 8, 1994 resurvey) .*

The statement of deficiencies which was prepared after
the May 8, 1994 resurvey of Petitioner is an unsigned
document. HCFA Ex. 19. However, there is no dispute
that this exhibit constitutes the results of a survey
conducted principally by Ms. Marjorie Finnigan, a HCFA
employee. Thus, the statement of deficiencies may be
considered as a statement by Ms. Finnigan in lieu of her
in-person testimony.

Petitioner has not challenged Ms. Finnigan's credibility,
although it has challenged the probative value of HCFA
Ex. 19. I find Ms. Finnigan's statement to be credible,
in the absence of any meaningful challenge to her
credibility. Furthermore, Ms. Finnigan's credibility is
bolstered by her curriculum vitae, which establishes that
she has substantial experience conducting surveys on
behalf of HCFA, professional experience in nursing, and
professional education in public health administration.
HCFA Ex. 26.

The statement of deficiencies asserts broadly that
Petitioner was not complying with the overall condition
of participation expressed in the regulation. HCFA Ex.
19 at 1-2. This assertion is premised on the
conclusions that, based on a review of ten patient
records, Petitioner failed to develop plans of care to
meet all of the needs of eight of ten of these patients
and failed to establish time frames for the review of the
plans of care for all ten of these patients. Id. at 2.
It is premised also on findings that Petitioner was not

® I am not fluent in Spanish. Therefore, I draw
no inferences or conclusions from those portions of HCFA
Exs. 21 ~ 24 which have not been translated into English.
I gave Petitioner the opportunity to object to, or to
offer supplements to, translations that were offered by
HCFA. Petitioner neither objected to HCFA's translations
nor offered supplements.
16

in compliance with each of the subsections of 42 C.F.R. §
418.58. Id.

1. ations etitioner's noncompliance

The statement of deficiencies generated after the May
1994 resurvey asserts that Petitioner's failure to comply
with the requirements of 42 C.F.R. § 418.58(a) is
supported by a review of ten patient records. It
concludes that this review shows that, in all ten cases,
Petitioner failed to consider all of the patients' needs
and problems. HCFA Ex. 19 at 3. Furthermore, in eight
of the ten cases, care plans were not developed to
address the patients' changing needs. Id. The statement
recites specific examples to support this latter
conclusion. These involve patients who are identified in
the statement as Patients # 9, # 3, and #7. Id. at 3 -
7.

A close review of the examples cited in the statement of
deficiencies leads me to conclude that the finding that
plans of care were not being developed to address
patients' changing needs emanates from HCFA's
interpretation of 42 C.F.R. § 418.58(a) to require that a
hospice create a new or revised plan of care to address
each new problem manifested by a patient. Thus,
Petitioner's failure to develop a specific plan of care
to deal with the consequences of Patient # 9's relocation
is cited as a deficiency under 42 C.F.R. § 418.58(a).
HCFA Ex. 19 at 4. Similarly, Petitioner's failure to
develop a specific plan of care to address an episode of
pain and vomiting which patient # 3 experienced on April
3, 1994 is cited as a deficiency under 42 C.F.R. §
418.58(a). Id. at 4 - 5.

I am not persuaded that HCFA proved, by a preponderance
of the evidence, that Petitioner was not complying with
the plain meaning of 42 C.F.R. § 418.58(a). Although the
specific findings of failures by Petitioner to develop
plans of care may be factually accurate (indeed,
Petitioner has not offered persuasive evidence to refute
these findings, and they are supported by the excerpts of
treatment records which HCFA offered in HCFA Exs. 21 and
22), they relate to an interpretation of the regulation
which exceeds the regulation's plain meaning and which
HCFA has not communicated precisely to Petitioner.

As I hold above, the plain meaning of 42 C.F.R. §
418.58(a) cannot be read to encompass the requirement
that a new or revised plan of care be prepared by a
hospice to address each new problem manifested by a
17

patient under hospice care. The specificity which HCFA
reads into this subsection is more precise than is
required on its face. Thus, while I do not dispute the
accuracy of the survey's findings as to 42 C.F.R. §
418.58(a), I conclude that they do not describe a failure
to comply with the plain requirements of the subsection.

i ° etiti ' te ian
with 42 C.F.R. § 418.58(b)

The statement of deficiencies asserts that Petitioner was
not reviewing and updating plans of care in compliance
with 42 C.F.R. § 418.58(b). This assertion is based on
the finding that, in the records of ten patients that
were reviewed by the surveyors, there was no evidence
that the plans of care specified the dates when they were
to be reviewed by Petitioner's interdisciplinary group.
HCFA Ex. 19 at 6 - 7. Furthermore, according to the
statement of deficiencies, the records did not contain
evidence that plans of care actually were being reviewed
by Petitioner's interdisciplinary group. Id.

2.

The surveyors found specifically that, although plans of
care in patients' records did specify dates of review,
they did not specify that Petitioner's interdisciplinary
group would be reviewing the plans. Id. The surveyors
found also that the review dates were for reviews by
specific disciplines and not by Petitioner's
interdisciplinary group. Iq.

HCFA proved by a preponderance of the evidence that
Petitioner failed to comply with the requirements of 42
C.F.R. § 418.58(b). The excerpts of treatment records
which are in evidence substantiate the findings contained
in the statement of deficiencies concerning Petitioner's
compliance with 42 C.F.R. § 418.58(b). HCFA Exs. 21 -
24. The records contain documents which are headed
"interdisciplinary care plan" or "interdisciplinary group
care plan.” See, e.g., HCFA Ex. 21 at 2, 4, 6, 8, and
10. Each of these plans state a date which may be a
planned review date. For example, in HCFA Ex. 21, the
plans contained on pages 2, 4, 6, 8, and 10 each recite a
date at the bottom of the page which may be a review date
(although, from the context of the date, it may also be
the date when the plan itself was prepared). However,
none of the records in evidence, including the plans
themselves, show that a schedule for regular reviews has
been established by the hospice's interdisciplinary group
or that the plans actually have been reviewed by the
interdisciplinary group.
18

Petitioner argues that there is no requirement in 42
C.F.R. § 418.58(b) that a plan of care state the dates
when it is to be reviewed. As I have found above, the
regulation permits a hospice to schedule reviews of a
plan of care according to intervals stated in the plan.
A review schedule does not necessarily have to be by
date, based on the plain language of the regulation.

However, a hospice cannot avoid the requirement that
there be periodic reviews of each plan of care based on a
schedule (whether governed by the calendar or changes in
a patient's condition) established in the plan of care
itself. Nor can a hospice avoid the requirement that
reviews be conducted by, among others, the hospice's
interdisciplinary group, and that the reviews be
documented. These requirements are stated plainly in the
regulation. Here, the essentially unrebutted evidence is
that Petitioner was not reviewing its plans of care
according to schedules established in the plans, nor was
it assuring that the reviews be accomplished by the
interdisciplinary group and documented.

3. liegations i er's noncompliance

with 42 C.F.R. § 418.58(c)

HCFA's assertion that Petitioner was not complying with
42 C.F.R. § 418.58(c) is based on the surveyors' finding
that in none of the ten records reviewed is there
evidence that the plans of care specified the discipline
that would be responsible for the interventions and care
described in the plans. HCFA Ex. 19 at 7 - 8. It is
based also on HCFA's interpretation that the subsection
requires each plan of care to identify the specific
discipline that is responsible for each intervention
identified in the plan. Ig. Petitioner has not offered
any evidence to controvert the evidence offered by HCFA.

However, I cannot conclude that this evidence proves that
Petitioner was not in compliance with 42 C.F.R. §
418.58(c). HCFA grounds its assertion that Petitioner
was not complying with this subsection on an
interpretation of the subsection which does not fall
within the plain meaning of the subsection's language. I
do not find that HCFA communicated its interpretation to
providers. I do not find that Petitioner is obligated to
comply with HCFA's interpretation absent evidence that
HCFA communicated its interpretation to providers.
19

F. titioner' ure com with a ditioi

for participation in Medicare

I conclude that HCFA proved that Petitioner failed to
comply with a condition for participation stated in 42
C.F.R. § 418.58. I do not conclude that HCFA proved that
Petitioner also failed to comply with a condition for
participation stated in 42 C.F.R. § 418.50.

1. 42 C.F.R. § 418.58

The preponderance of the evidence establishes that, as of
May 2 - 3, 1994, Petitioner remained out of compliance
with the standard of participation contained in 42 C.F.R.
§ 418.58(b). Petitioner was not scheduling reviews of
its plans of care at intervals specified in the plans.
Nor was Petitioner's interdisciplinary group conducting
reviews according to a schedule or schedules of review.
Finally, Petitioner was not documenting any reviews that
it may have been conducting.

The fact that a provider may not be complying with one
standard of several contained in a regulation does not
preclude a finding that the egregiousness of the
noncompliance is such as to constitute a failure to
comply with the overall condition for participation
contained in the regulation. I conclude that the level
of severity of Petitioner's noncompliance with 42 C.F.R.
§ 418.58(b) is sufficient to prove that Petitioner was
not complying with the condition for participation
contained in 42 C.F.R. § 418.58.

The circumstances where a failure by a provider to comply
with participation requirements constitutes a failure to
meet a condition of participation are defined in 42
C.F.R. § 488.24(a). That section specifies that a
deficient provider will be found to no longer comply with
a condition of participation where the deficiency is:

+ + of such character as to substantially
limit the provider's . . . capacity to render
adequate care or which adversely affect[{s] the
health and safety of patients; ...

This definition of a condition-level deficiency
implements the Act's grant of authority to the Secretary
to terminate a provider's participation in Medicare where
the Secretary determines that the provider fails to
comply "substantially" with the provisions of the
provider agreement, the Act, regulations, or a mandated
corrective action. Act, section 1866(b) (2) (A).
20

I am satisfied that Petitioner's failure to develop plans
of care in compliance with the requirements of 42 C.F.R.
§ 418.58(b) substantially limited Petitioner's capacity
to render adequate care to its patients and potentially
affected adversely the health and safety of Petitioner's
patients. Thus, Petitioner's deficiency was a failure to
meet the overall condition of participation stated in 42
C.F.R. § 418.58.

What is evident here is not simply a failure to comply
with a technical record keeping requirement. The
evidence is that, in all ten of the treatment records
reviewed by the surveyors on May 2 - 3, 1994, there was
no indication that plans of care were being reviewed
according to a schedule, that Petitioner's
interdisciplinary group was performing reviews, or that
reviews were being documented. This evidence proves a
systematic failure by Petitioner to fulfill its
obligation to plan care according to the requirements of
the regulation.

The essential requirement of 42 C.F.R. § 418.58 is that
each patient who is being provided care by hospices be
provided care according to a plan of care that is created
and maintained specifically for that individual. By
definition, hospice patients are in the last stages of
their lives. The critical role of hospices is to manage
the care provided to dying patients to maximize their
physical comfort and to relieve the patients and their
families, to the extent possible, of the emotional
distress caused by the patients’ imminent deaths. I
cannot envision how a hospice can perform this role if it
does not review its plans of care according to an
established schedule, if it does not assure that plans
are reviewed by those who are responsible for reviewing
the plans, and if it does not document -the reviews.
Because I conclude that Petitioner failed to comply with
the condition of participation identified at 42 C.F.R. §
418.58, HCFA was authorized to terminate Petitioner's
provider agreement.

2. 42 C.F.R. § 418,50

I do not agree with HCFA's argument that Petitioner
should also be found to be noncompliant with the
requirements of 42 C.F.R. § 418.50. This regulation
states the general conditions for participation as a
hospice. Subsection (a) requires hospices to "maintain
compliance with the conditions of this subpart." From
this, HCFA reasons that, if a provider is not complying
with a condition contained in a regulation governing
21

hospices, then it must also be found to be not complying
with 42 C.F.R. § 418.50.

It may be true literally that a provider who is not
complying with a condition for participation stated
elsewhere in the regulation governing hospices is also
not complying with the requirement in 42 C.F.R. §
418.50(a) that it comply with all conditions for
participation. However, I do not read 42 C.F.R. §
418.50(a) as directing a finding that a provider who is
found to be noncompliant with one condition of
participation must therefore be found to be noncompliant
with two conditions, thus implying a higher degree of
noncompliance. Such a reading would suggest an intent by
the Secretary to make noncompliance with a condition of
participation appear to be more serious in every case
than in fact it is.

The failure of a provider to comply with even one
condition for participation in Medicare provides HCFA
with grounds to terminate that provider's participation
in Medicare. 42 C.F.R. § 489.53(a)(1), (3). It would
add nothing to the analysis of a hospice's deficiencies
under 42 C.F.R. Part 418 to find an additional condition-
level deficiency exists under 42 C.F.R. § 418.50 each
time a condition-level deficiency is found under one of
the other regulations in 42 C.F.R. Part 418 which
establish the conditions for participation by a hospice.

III. Conclusion

Under both the Act and regulations, HCFA may terminate a
provider's participation in Medicare where the provider
is not complying with a condition for participation in
Medicare. Act, section 1866(b) (2) (A); 42 C.F.R. §
489.53(a)(1), (3). The preponderance of the evidence in
this case is that, as of the May 2 - 3, 1994 resurvey of
Petitioner, Petitioner was not complying with the
condition for participation stated in 42 C.F.R. § 418.58.
Based on this, I conclude that HCFA had authority to
terminate Petitioner's participation in Medicare.

/s/

Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Joshua Yaw Boateng, D.P.M., DATE: March 27, 1995
Petitioner,

Docket No. C-94-399
Decision No. CR365

-v-

The Inspector General.

DECISION

By letter dated June 27, 1994, the Inspector General
(I.G.) of the United States Department of Health and
Human Services (DHHS) notified Joshua Yaw Boateng, D.P.M.
(Petitioner), that he was being excluded from
participation in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to
States for Social Services programs for a period of five
years.! The I.G. advised Petitioner that he was being
excluded as a result of his conviction of a criminal
offense related to the delivery of an item or service
under Medicaid. The I.G. advised Petitioner that the
exclusion of individuals convicted of such program-
related offenses is mandated by section 1128(a) (1) of the
Social Security Act (Act). The I.G. further advised
Petitioner that for exclusions imposed pursuant to
section 1128(a)(1) of the Act, section 1128(c) (3) (B)
requires a five-year minimum period of exclusion.

Petitioner filed a timely request for review of the
I.G.'s action. During a prehearing conference conducted
by me on August 19, 1994, the parties agreed to proceed
by written submissions. Accordingly, I established a
schedule for the parties to file briefs and documentary
evidence.

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

On October 4, 1994, the I.G. filed a motion for summary
disposition accompanied by a brief and eight exhibits.
I identify these exhibits as I.G. Ex. 1 through 8.

By letter dated October 21, 1994, Petitioner requested an
in-person hearing. Petitioner stated that he wished "to
be heard personally (rather than by affidavit)."
Petitioner argued that characteristics of his speech, his
articulation, and his response to complex sentences in
English may “have substantial bearing upon the manner in
which the Administrative Law Judge may desire to exercise
whatever discretion he possesses in disposing of this
case." The I.G. opposed Petitioner's request for an in-
person hearing on the grounds that there existed no
genuine issues of material fact which justified my
holding such a hearing.

In order to allow Petitioner an opportunity to fully
present his case, I granted his request to make a
personal statement before me. However, I determined
that, under the circumstances of this case, a hearing by
telephone would be appropriate. I also determined that
the parties would continue to adhere to the briefing
schedule established by me. November 1, 1994 Order and
Notice of Telephone Hearing.

Petitioner subsequently filed a responsive brief
accompanied by three exhibits. I identify these as P.
Ex. 1 through 3. The I.G. filed a reply and Petitioner
filed a sur-reply.

On December 14, 1994, I conducted a hearing by telephone.
The parties agreed not to file posthearing briefs.

In his responsive brief, Petitioner made some objections
to I.G. Ex. 3 and I.G. Ex. 4 which go to the weight that
I should give these exhibits. Since Petitioner did not
contest the authenticity or relevancy of these or any
other exhibits offered by the I.G., I admit I.G. Ex. 1
through 8 into evidence. The I.G. did not object to any
of the exhibits offered by Petitioner, and I admit P. Ex.
1 through 3 into evidence.

I have carefully considered the applicable law, the
evidence, and the parties' arguments. I conclude that
Petitioner is subject to the minimum mandatory exclusion
provisions of sections 1128(a)(1) and 1128(c) (3) (B) of
the Act, and I affirm the I.G.'s determination to exclude
Petitioner from participation in Medicare and Medicaid
for a period of five years.
3
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLs)

1. At all times relevant to this case, Petitioner was a
licensed podiatrist in the Commonwealth of Pennsylvania.
I.G. Ex. 3.

2. On August 17, 1992, the Pennsylvania Attorney
General's Office filed a criminal complaint alleging that
Petitioner had: (1) knowingly submitted false
information for the purpose of obtaining greater
compensation than that to which he was legally entitled
for furnishing services under Medicaid; (2) submitted
claims which misrepresented the description of services
provided; and (3) submitted claims for services which
were not rendered to a recipient. In an attached
affidavit, the Attorney General's Office alleged that
there was probable cause to arrest Petitioner for
Medicaid Fraud. I.G. Ex. 1.

3. The Attorney General's Office subsequently filed a
Bill of Information charging Petitioner with 126 counts
of Medicaid Fraud. The Bill of Information alleged that
Petitioner knowingly submitted Medicaid claims for a
specific surgical procedure which was not rendered as
claimed. I.G. Ex. 2, 3.

4. Petitioner pled no contest to 78 counts of Medicaid
Fraud in the Court of Common Pleas of Dauphin County,
Pennsylvania (the court). I.G. Ex. 4, 5, 7.

5. Based on its acceptance of Petitioner's nolo
contendere plea, the court sentenced Petitioner to pay
costs totaling $16,224 and restitution with interest in
the amount of $16,224. The court also sentenced him to
probation for up to 23 months and required him to perform
100 hours of community service. I.G. Ex. 6.

6. The Secretary of DHHS has delegated to the I.G. the
authority to determine, impose, and direct exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21662
(1983).

7. Petitioner's nolo contendere plea, and the court's
acceptance of that plea, constitute a conviction within
the meaning of sections 1128(a)(1) and 1128(i) of the
Act. FFCLs 1 - 5.

8. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid, within the meaning of section 1128(a)(1) of the
Act. FFCLs 1 - 5, 7.
4

9. Pursuant to section 1128(a)(1) of the Act, the I.G.
is required to exclude Petitioner from participating in
Medicare and Medicaid.

10. The minimum mandatory period for an exclusion
imposed pursuant to section 1128(a)(1) of the Act is five
years. Act, section 1128(c) (3) (B).

11. The I.G. properly excluded Petitioner from
participation in Medicare and Medicaid for a period of
five years pursuant to sections 1128(a) (1) and

1128(c) (3)(B) of the Act. FFCLs 1 - 10.

12. Neither the I.G. nor an administrative law judge has
the authority to reduce a five-year minimum exclusion
mandated by sections 1128(a) (1) and 1128(c) (3) (B) of the
Act.

13. There is no equitable relief from the minimum
Mandatory exclusion provisions of sections 1128(a)(1) and
1128(c)(3)(B) of the Act.

DISCUSSION
1. Petitioner was convicted of a criminal offense

related to the delivery or an item or service under
Medicaid.

The material facts of this case are not in dispute. The
evidence adduced by the I.G., and not disputed by
Petitioner, amply demonstrates that Petitioner was
convicted of a criminal offense related to the delivery
or an item or service under Medicaid, within the meaning
of section 1128(a)(1) of the Act.

The first requirement that must be satisfied in order to
establish that the I.G. has the authority to exclude
Petitioner under section 1128(a) (1) of the Act is that
Petitioner must have been convicted of a criminal
offense. Petitioner does not dispute that he was
convicted of a criminal offense within the meaning of the
Act.? The undisputed facts establish that Petitioner

2 In his letter requesting a hearing, Petitioner
stated that he did not concede that he was, in fact,
convicted of a criminal offense. He stated that he was
never informed by the judge hearing the criminal case
upon which his exclusion is based that he was found
guilty, and he did not understand that he was convicted.

(continued...)
5

entered a nolo contendere plea to the offense of Medicaid
Fraud, and that the Court of Common Pleas of Dauphin
County, Pennsylvania, accepted Petitioner's plea. FFCLs
2-5. The Act defines the term "convicted of a criminal
offense" to include those circumstances in which a plea
of nolo contendere by an individual has been accepted by
a federal, State, or local court. Act, section

1128(i) (3). Therefore, I conclude that Petitioner was
convicted of a criminal offense within the meaning of
sections 1128(a)(1) and 1128(i) of the Act.

I further find that the second requirement of section
1128(a)(1) -- that the criminal offense leading to the
conviction must be related to the delivery of an item or
service under Medicare or Medicaid -- has also been met.
Petitioner does not dispute that he was convicted of
Medicaid Fraud and that this criminal offense relates to
the delivery of an item or service under Medicaid. The
I.G. offered evidence showing that Petitioner was
convicted of 78 counts of Medicaid Fraud based on charges
that he knowingly filed false Medicaid claims. FFCLs 2 -
5. A conviction for filing false Medicaid claims is a
conviction of an offense related to the delivery of an
item or service under Medicaid. Jack W. Greene, DAB 1078
(1989), aff'd sub nom Greene v. Sullivan, 731 F.Supp. 839
(E.D. Tenn. 1990). I find that the undisputed facts
establish that Petitioner was convicted of an offense
which is related to the delivery of an item or service
under Medicaid, within the meaning of section 1128 (a) (1)
of the Act.

2. A minimum mandatory five-year exclusion is required
by law.

Section 1128(a)(1) of the Act requires exclusions for
individuals convicted of offenses related to the delivery
of items or services under Medicaid. The law not only
mandates exclusions for individuals convicted of program-
related offenses, it requires that the term of such
exclusions be for at least five years. Congressional

2(...continued)
While he was aware that the court sentenced him, he did
not understand that this implied conviction. However, in
his responsive brief, Petitioner admitted that he
"submitted a plea of nolo contendere that was accepted by
the court, which the statute addresses as the equivalent
of a conviction." Petitioner's responsive brief at p. 6.
6

intent is clear from the express language of section
1128(c) (3) (B)of the Act:

In the case of an exclusion under subsection (a),
the minimum period of exclusion shall be not less
than five years...

Since Petitioner was convicted of a criminal offense and
it was related to the delivery of an item or service
under Medicaid within the meaning of section 1128(a) (1)
of the Act, the I.G. is required by law to exclude
Petitioner for a minimum of five years.

3. Ido not have the authority to grant Petitioner the

equitable relief he seeks.

Petitioner does not dispute that the Act mandates
exclusion for at least five years following conviction of
an offense related to the delivery of an item or service
under Medicaid. However, Petitioner argues that
"administrative adjudication resembles court decision-
making . . . and, therefore, logically, entails a certain
amount of inherent discretion and equitable power."
Petitioner's sur-reply at p. 2. According to Petitioner,
basic precepts of administrative law dictate that "even
where rules preclude discretion (as here, where exclusion
is mandatory upon a finding of conviction), there must be
‘needed individualizing.'" Petitioner's sur-reply at p.
2. Petitioner urges that the task of the administrative
law judge is to "harmonize" the demands of the statute
and regulations and the competing demands of "discretion,
equity, and individualizing of disposition."

Petitioner's responsive brief at p. 6.

Petitioner states that in deciding this case I should
consider certain "individualized concerns." Petitioner's
responsive brief at pp. 6 - 7. According to Petitioner,
these "individualized concerns" include the fact that he
did not understand the full meaning of the regulations
pertaining to the procedure code Medicaid required him to
use in billing for his services. Petitioner asserts that
since English is his second language, he did not
understand the punctuation used in the Medicaid
regulations and, as a result, he mistakenly believed that
he was billing under the proper procedure code.
Petitioner argues also that, during the criminal
proceedings which led to the conviction upon which his
exclusion is based, he was represented by a lawyer who
provided poor legal advice. As a result of this poor
legal advice, Petitioner contends that his nolo
contendere plea was not an informed plea. In addition,
Petitioner states that he was denied access to the
7

services of a public defender because he was misled into
believing that he was not eligible for these legal
services. Petitioner states that this forum is the
"practicable forum of last resort" because he does not
have sufficient funds to pursue relief under the Post-
Conviction Remedies Act. Petitioner's responsive brief
at pp. 7 - 8; Petitioner's hearing request.

Petitioner emphasizes that he is not challenging the
I.G.'s authority to exclude him. In addition, Petitioner
states that his arguments are not a collateral attack on
the underlying conviction. Petitioner does not object to
the five-year exclusion "being imposed and being made of
record." Petitioner's sur-reply at p. 3. Instead,
Petitioner states that what he is seeking is the exercise
of the administrative law judge's equitable discretion
after the exclusion is imposed. In particular,
Petitioner urges that the administrative law judge may
exercise equitable discretion to take either or both of
the following actions:

(1) grant Petitioner a stay of the exclusion for
such period of time as the administrative law judge
finds appropriate;

(2) grant Petitioner probation upon such conditions
as the administrative law judge finds appropriate.

Petitioner states that these "suggestions" are not made
to circumvent the mandatory exclusion requirement, but
that they are made "in search of equity, as an
amelioration of the harsh results of law." Petitioner's
responsive brief at pp. 8 - 9.

I do not have the authority to grant the equitable relief
sought by Petitioner. An administrative law judge's
jurisdiction in hearings regarding exclusions imposed
pursuant to section 1128(a) of the Act is limited to
those issues specified in the regulations. Specifically,
42 C.F.R. § 1001.2007(a) (1) restricts the issues that an
administrative law judge may hear to the issues of
“whether: (i) (t]he basis for the imposition of the
sanction exists, and (ii) [t]he length of the exclusion
is unreasonable." The regulations provide also that:

When the [I.G.] imposes an exclusion under subpart B
of this part for a period of 5 years, paragraph
(a) (1) (ii) of this section will not apply.

42 C.F.R. § 1001.2007(a) (2).
8

In the instant case, the I.G. has imposed a five-year
minimum mandatory exclusion under Subpart B of the
regulations.’ Thus, the only issue I may consider is
whether the basis for the imposition of the exclusion
exists.4 There is nothing in the law or regulations
which either states or suggests that the Secretary has
delegated to administrative law judges the authority to
grant the equitable relief sought by Petitioner.

There is no equitable relief from the minimum mandatory
exclusion provisions of sections 1128(a)(1) and

1128(c) (3)(B) of the Act. Mark Gventer, D.P.M., DAB
CR173 (1992). The equities that may be present in this
case are not relevant with respect to the issue of
whether there is a basis for the imposition of a five-
year exclusion under sections 1128(a)(1) and
1128(c) (3) (B) of the Act. Accordingly, I do not have the
authority to "stay" an exclusion, to grant "probation,"
or to grant any other equitable relief.

3 Subpart B of the regulations provides for a
mandatory exclusion for a minimum period of five years
for individuals convicted of criminal offenses related to
the delivery of an item or service under Medicare or
Medicaid.

4 If the I.G. had imposed an exclusion against
Petitioner under Subpart B for a period longer than five
years, then there would exist an issue as to the
reasonableness of that part of the exclusion which
exceeded five years. In that event, an administrative
law judge would be permitted to consider the presence of
aggravating or mitigating factors specified at 42 C.F.R.
§ 1001.102.
9
CONCLUSION

Based on the law and the undisputed material facts in
this case, I conclude that the I.G. properly excluded
Petitioner from Medicare and Medicaid pursuant to section
1128(a)(1) of the Act. I further conclude that the five-
year minimum period of exclusion imposed and directed
against Petitioner is mandated by section 1128(c) (3) (B)
of the Act. In addition, I conclude that I do not have
the authority to grant the equitable relief sought by
Petitioner.

/s/

Joseph K. Riotto
Administrative Law Judge