Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
In the Case of:
Joseph Tramontana, Ph.D., DATE: November 17, 1997

Petitioner,

Docket No. C-97-274
Decision No. CR503

-v-

The Inspector General.

DECISION

By letter dated February 25, 1997, the Inspector General
(I1.G.), United States Department of Health and Human
Services, notified Joseph Tramontana, Ph.D. (Petitioner),
that he would be excluded for a period of three years from
participation in Medicare, Medicaid, Maternal and Child
Health Services Block Grant and Block Grants to States for
Social Services programs.’ The I.G. imposed this exclusion
pursuant to section 1128(b)(1) of the Social Security Act
(Act), based on Petitioner's conviction in the United States
District Court for the Southern District of Mississippi for
false, fictitious, or fraudulent claims in violation of 18
U.S.C. section 287.

Petitioner filed a request for review of the I.G.'s action.
The I.G. moved for summary disposition. Because I have
determined that there are no material and relevant factual
issues in dispute (the only matter to be decided is the legal
significance of the undisputed facts), I have decided the
case on the basis of the parties' written submissions in lieu
of an in-person hearing. The I.G. submitted a brief
accompanied by three proposed exhibits (I.G. Ex. 1-3).
Petitioner submitted a response brief. The I.G. submitted a
reply brief. Petitioner did not object to my receiving into
evidence the I.G.'s proposed exhibits, and I hereby receive
into evidence I.G. Ex. 1-3.

1 In this decision, I use the term "Medicaid" to refer to
these State health care programs.
2

I affirm the I.G.'s determination to exclude Petitioner from
participating in Medicare and other federally-funded health
care programs, including Medicaid, for a period of three
years.

I. Applicable Law

Under section 1128(b)(1) of the Act, the Secretary may
exclude "(a)]ny individual or entity that has been convicted,
under Federal or state law, in connection with the delivery
of a health care item or service or with respect to any act
or omission in a program operated by or financed in whole or
in part by any Federal, State, or local government agency, of
a criminal offense relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial
misconduct. "?

42 C.F.R. § 1001.201(b)(1) provides that an exclusion imposed
under section 1128(b)(1) of the Act shall be for a period of
three years, unless specified aggravating or mitigating
factors are present which form the basis for lengthening or
shortening the period of exclusion.

42 C.F.R. § 1001.201(b) (2) provides that the following
factors may be considered to be aggravating and a basis for
lengthening the period of exclusion: "(i) (t]he acts
resulting in the conviction, or similar acts, resulted in
financial loss of $1500 or more to a government program or to
one or more other entities, or had a significant financial
impact on program beneficiaries or other individuals. (The
total amount of financial loss will be considered, including
any amounts resulting form similar acts not adjudicated,
regardless of whether full or partial restitution has been
made); (ii) (t]he acts that resulted in the conviction, or
similar acts, were committed over a period of one year or
more; (iii) [t]he acts that resulted in the conviction, or
similar acts, had a significant adverse physical or mental
impact on one or more program beneficiaries or other
individuals; (iv) [t]he sentence imposed by the court
included incarceration; or (v) [t]he convicted individual or

2? Congress amended section 1128 of the Act in 1996. One
of the amendments to section 1128 creates a new section, section
1128(a) (3), which mandates a minimum exclusion of at least five
years for any felony conviction for an offense formerly described
by section 1128(b)(1). Section 1128(b)(1) is retained, but
provides permissive exclusion authority for misdemeanor
convictions only. Because section 1128(a)(3) applies to offenses
which occurred after the date of enactment of the 1996 amendment,
the I.G. did not exclude Petitioner under this new exclusion
authority.
3

entity has a prior criminal, civil, or administrative
sanction record."

42 C.F.R § 1001.201(b) (3) provides that only the following
factors may be considered as mitigating and a basis for
reducing the period of exclusion: "(i) [t]he individual or
entity was convicted of 3 or fewer misdemeanor offenses, and
the entire amount of financial loss to a government program
or to other individuals or entities due to the acts is less
than $1500; (ii) [t]he record in the criminal proceedings,
including sentencing documents, demonstrates that the court
determined that the individual had a mental, emotional, or
physical condition, before or during the commission of the
offense, that reduced the individual's culpability; (iii)
(t)he individual's or entity's cooperation with Federal or
State officials resulted in --(A) [o]thers being convicted or
excluded from Medicare or any of the State health care
programs, or (B) [t]he imposition of a civil money penalty
against others; or (iv) [a]lternative sources of the type of
health care items or services furnished by the individual or
entity are not available."

II. Petitioner's Contentions

Although Petitioner concedes that he has been convicted of a
criminal offense within the scope of section 1128(b)(1) of
the Act, he cites a number of factors in his case which he
maintains warrant mitigation of the exclusion period. He
argues that the length of his exclusion should be reduced
because he asserts that he is the only licensed psychologist
in the part of Mississippi where he practices.

He also maintains that he did not commit the criminal offense
for which he was convicted. He asserts that he only pled
guilty on the advice of his counsel and that there was no
formal evidentiary court proceeding finding that he engaged
in criminal misconduct. He also maintains that he did not
engage in fraud, but that his only fault was inadequate
supervision of his assistant, who submitted claims for him to
sign and submit to the health insurer. He maintains that he
advised his assistant to cease her unauthorized services but
that she persisted over his objections and that he
inadvertently signed some of the improper claims as they were
commingled with other legitimate claims for payment from the
insurer.

Finally he asserts that he did not benefit financially from
submission of the claims and that the criminal activity was
not as lengthy as the indictment claims, lasting not five
years but only three.
4
III. Findings of Fact and Conclusions of Law

1. During the period of time relevant to this case,
Petitioner was licensed to practice as a psychologist in the
state of Mississippi and provided outpatient therapy to
patients through Behavioral Educational Training Associates,
Inc. ("BETA").

2. During the period of time relevant to this case,
Petitioner was co-owner and vice-president of BETA and also
clinical director of BETA, with responsibilities including
supervising and signing insurance claims and contracts.

3. On August 9, 1995, a criminal indictment was filed
against Petitioner in the United States District Court for
the Southern District of Mississippi, charging him with one
count of conspiracy and seven counts of fraudulent claims in
violation of 18 U.S.C sections 286 and 287. I.G. Ex. 1.

4. The August 9, 1995 indictment alleged that Petitioner
filed fraudulent claims with a private health insurer,
CHAMPUS, for psychology services that were not provided as
claimed; in particular, the claims were for services provided
by unauthorized providers (including services provided by an
associate of Petitioner's at BETA, Barbara Gholson, who was
not an authorized provider), services not covered as
benefits, and for missed or cancelled appointments.

5. Petitioner pled guilty to one count of false, fictitious,
or fraudulent claims (Count 2 of the Indictment) in violation
of 18 U.S.C. section 287. I.G. Ex. 2.

6. On November 30, 1995, the United States District Court
for the Southern District of Mississippi found Petitioner
guilty of Count 2 of the August 9, 1995 indictment, in
violation of 18 U.S.C section 287.

7. As a result of his conviction, Petitioner was placed on
probation for one year, of which six months were to be served
in home confinement; was required to pay restitution of
$10,353.98 to CHAMPUS; was fined $1000; and was required to
perform 400 hours of community service.

8. Under section 1128(b)(1) of the Act, the I.G. is
authorized to exclude any individual or entity that has been
convicted, under federal or state law, in connection with the
delivery of a health care item or service or with respect to
any act or omission in program operated by or financed in
whole or in part by any federal, State, or local government
agency, of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct.
5

9. Where the I.G. determines to exclude an individual
pursuant to section 1128(b)(1) of the Act, the term of
exclusion will be for a period of three years, in the absence
of aggravating or mitigating factors that would support an
exclusion of more or less than three years.

10. Petitioner's criminal conviction constitutes a
conviction within the scope of section 1128(i)(3) of the Act.

11. Petitioner was convicted under federal law, in
connection with the delivery of a health care item or
service, of a criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other
financial misconduct.

12. The I.G. is authorized to exclude Petitioner pursuant to
section 1128(b)(1) of the Act.

13. The I.G. did not allege or prove the presence of any
aggravating factors.

14. Petitioner did not prove the presence of any mitigating
factors.

15. A three-year exclusion of Petitioner is reasonable.
Iv. Discussion

To sustain its exclusion, the I.G. must demonstrate that
Petitioner was convicted under federal or state law in
connection with the delivery of a health care item or service
of a criminal offense relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial
misconduct. Section 1128(b)(1) of the Act. The first
_ requirement is therefore that Petitioner must have been
convicted of a criminal offense under federal or state law.
The record reflects that a judgment of conviction was entered
in Petitioner's case and he was sentenced by the United
States District Court for the Southern District of
Mississippi. This judgment was based upon the Court's
acceptance of Petitioner's guilty plea on November 30, 1995.
Petitioner was thus convicted within the meaning of section
1128(i) (3) of the Act.

I further find that the criminal misconduct for which
Petitioner has been convicted is within the scope of section
1128(b) (1) and properly results in his exclusion. The record
reflects that Petitioner was found guilty of one count of
making false, fictitious, or fraudulent claims in violation
of 18 U.S.C. section 287 as a result of his role in
falsifying CHAMPUS claims and submitting claims for services
rendered by an unlicensed and unauthorized provider. Where
an individual is convicted of an offense involving the
6

submission of fraudulent or false health care claims for
reimbursement, the offense is committed in connection with
the delivery of health care items and services and subjects
the individual to permissive exclusion under section

1128(b) (1) of the Act. Joel Fass, DAB CR349 (1994); see also
Erol Ucer, M.D., DAB CR416 (1996); lili D. les

DAB CR354 (1995); Michael M. Bouer, R.Ph., DAB CR345 (1994).

Although Petitioner concedes that he was convicted of a crime
within the scope of section 1128(b) (1) of the Act and that
the I.G. had authority to exclude him, he also alleges that
he did not commit the criminal misconduct for which he
convicted, that any wrongdoings were unintentional, and that
he pled guilty only after being advised to do so by counsel.
Arguments such as these amount to a collateral attack on his
conviction, which the Departmental Appeals Board has
previously held to be an ineffectual argument in the context
of an exclusion appeal because the I.G. and the ALJ are not
permitted to look beyond the fact of conviction. Paul R.
Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309
(1994); Peter Edmondson, DAB No. 1330 (1992).

Petitioner has argued in his brief that his three-year
exclusion should be reduced due to the presence of mitigating
factors. In his favor he maintains that he was not guilty of
the criminal offense for which he was convicted; that he did
not benefit financially from the alleged misconduct; that
such misconduct lasted for three years, not five years as
alleged; and that he is the only licensed psychologist in the
part of Mississippi where he practices. It is Petitioner's
burden to prove the existence of mitigating factors. James
H. Holmes, DAB CR270 (1993). Moreover, the only factors
which can be considered as mitigating are those factors
listed in 42 C.F.R. § 1001.201(b)(3) and Petitioner has not
established any of those factors. His claims that he
allegedly was not guilty of the offense, that he did not
benefit financially, and that the conspiracy was not so
longstanding are not factors within the scope of 42 C.F.R. §
1001.201(b) (3). The regulations dé provide for a
discretionary waiver of an exclusion if an individual or
entity "is the sole community physician or the sole source of
essential specialized services in a community." 42 C.F.R. §
1001.1801(b). However the I.G. will consider a request for
waiver only when it is presented in writing by "an individual
directly responsible for administering the state health care
program." 42 C.F.R. § 1001.1801(a). In Petitioner's case,
the State of Mississippi has not made a waiver request
pursuant to these procedures. In any event, the ALJ has no
authority to grant a waiver. Bobby D. Layma: DAB CR491
(1997); Benjamin P. Council, M.D., DAB CR391 (1995); Richard

Philips, D.P.M., DAB No. 1279 (1991). I therefore find
that Petitioner has not proved the existence of any
mitigating factors.
Vv. Conclusion

I conclude that the I.G. was authorized to exclude
Petitioner, pursuant to section 1128(b)(1) of the Act. I

find that the three-year exclusion is reasonable and I
sustain it.

/s/

Joseph K. Riotto
Administrative Law Judge