Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Corey V. Penner, a.k.a., Corey Vaughn ) Date: January 11, 2007

Penner, )
Petitioner, )

) Docket No. C-06-589

-V.- ) Decision No. CR1553
)
The Inspector General. )
)

DECISION

There is no basis to exclude Petitioner, Corey V. Penner, from participation in Medicare,
Medicaid, and all other federal health care programs pursuant to section 1128(a)(2) of the
Social Security Act (the Act) (42 U.S.C. § 1320a-7(a)(2)) because of his March 21, 2002
conviction by the District Court of Harvey County, Kansas.

I. Background

The Inspector General for the Department of Health and Human Services (the I.G.)
notified Petitioner by letter dated June 30, 2006, that he was being excluded from
participation in Medicare, Medicaid, and all federal health care programs for the
minimum statutory period of five years, pursuant to section 1128(a)(2) of the Act. The
basis cited for Petitioner’s exclusion was his conviction in the District Court of Harvey
County Kansas of a criminal offense related to neglect or abuse of patients, in connection
with the delivery of a health care item or service. See Act, section 1128(a)(2); 42 U.S.C.
§ 1320a-7(a)(2); and 42 C.F.R. § 1001.101(b).

Petitioner timely requested a hearing by letter dated July 21, 2006. The case was assigned
to me for hearing and decision on August 1, 2006. On August 16, 2006, I convened a
prehearing telephonic conference, the substance of which is memorialized in my Order
dated August 17, 2006.
2

During the prehearing conference on August 16, 2006, the parties agreed to waive oral
hearing and that the case may proceed to decision on the briefs and documentary
evidence. Despite the I.G.’s waiver of an oral hearing and agreement that this case may
be decided on the documents, the I.G. filed a motion for summary judgment and
supporting brief on September 28, 2006 (I.G. Brief), with I.G. Exhibits (Exs.) | through
15. Petitioner filed a “Brief in Support of Motion to Deny Summary Judgment” on
November 13, 2006 (P. Brief), with copies of some I.G. exhibits attached but no
Petitioner’s exhibits. The I.G. filed a reply brief on November 28, 2006 (I.G. Reply). No
objection has been made to the admissibility of any of the proposed exhibits and I.G. Exs.
1 through 15 are admitted.

II. Discussion
A. Findings of Fact

The following findings of fact are based upon the uncontested and undisputed assertions
of fact in the pleadings and the exhibits admitted. Citations may be found in the analysis
section of this decision if not included here.

1. Petitioner was a pharmacist licensed by the State of Kansas.

2. On February 21, 2002, Petitioner was charged with 31 counts of battery between
March 1999 and February 2002, upon women from whom he drew blood
representing that he was doing so for purposes of a research project. P. Brief at 3;
LG. Ex. 5.

3. On March 21, 2002, Petitioner pled guilty to misdemeanor battery of 16 different
women, each charged as a violation of Kansas Statutes Annotated 21-3412(a)(1) a
Class B Person Misdemeanor. P. Brief at 3; I.G. Exs. 5, 13, 14, 15.

4. On April 19, 2002, Petitioner was sentenced to four, consecutive, six-month
sentences and twelve, concurrent, six-month sentences; he was placed on
supervised probation for two years, ordered to pay court costs, and ordered to
obtain a mental health evaluation and treatment. I.G. Ex. 15.

5. The I.G. notified Petitioner by letter dated June 30, 2006, that he was being
excluded from participation in Medicare, Medicaid, and all federal health care
programs for the minimum statutory period of five years, pursuant to section
1128(a)(2) of the Act. IG. Ex. 1.

6. Petitioner timely requested a hearing by letter dated July 21, 2006.
10.

12.

13.

14.

15.

3

The evidence reflects that some of his victims recognized Petitioner as a
pharmacist, some were co-workers at Dillon’s, some had contact with Petitioner at
Dillon’s, but the evidence does not show that any received prescriptions or related
counseling from Petitioner.

The evidence does not show that any of Petitioner’s victim were customers or
patients of Dillon’s Pharmacy.

Petitioner’s victims were not seeking or receiving care or treatment from
Petitioner, nor is there evidence that they ever did.

The evidence does not show any relationship between Petitioner in his capacity as
a pharmacist and any of the victims named in the charges of which he was
convicted.

The evidence shows that Petitioner sought out and solicited his victims, but not
that he used his position as a pharmacist to locate his victims or to convince them
to permit him to draw blood.

The evidence does not show that Petitioner’s victims were receiving needed care
for the maintenance, improvement, or protection of their health or treatment for the
prevention or lessening of an illness, disability, or pain.

Petitioner’s victim’s statements in the investigator’s reports show that they
believed that blood was being drawn for research, not their care or treatment.

Petitioner obtained supplies from Dillon’s Pharmacy for his purported research and
not for delivery as a health care item or service to his victims.

The evidence does not show that any of Petitioner’s victims believed or that
Petitioner ever suggested that he was providing his victims either health care items
or health care services.

B. Conclusions of Law

Petitioner’s request for hearing was timely filed and I have jurisdiction.

The parties waived an oral hearing during the prehearing conference, the waiver
has not been withdrawn, and this decision is not a “summary judgment,” but rather

a decision on the merits based upon the briefs of the parties and the documentary
evidence they have filed.
4

3. Petitioner was convicted of criminal offenses of misdemeanor battery under
Kansas law.

4. Petitioner’s plea of guilty to “battery” is an admission that he inflicted bodily harm
upon his victims pursuant to the law of Kansas, the jurisdiction where his plea was

accepted.

5. Petitioner abused, within the meaning of section 1128(a)(2) of the Act, the victims
of the criminal offenses of battery of which he was convicted because he inflicted
bodily harm.

6. The victims of the criminal offenses of battery of which Petitioner was convicted

were not his patients within the meaning of section 1128(a)(2) of the Act.

7. Petitioner’s abuse of his victims was not in connection with the delivery of a health
care item or service within the meaning of section 1128(a)(2) of the Act.

8. There is no basis for Petitioner’s exclusion pursuant to section 1 128(a)(2) of the
Act.
9. No period of exclusion is reasonable in this case as there is no basis for exclusion

under section 1128(a) of the Act.
C. Issues

The Secretary of the Department of Health and Human Services (the Secretary) has by
regulation limited my scope of review to two issues:

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

Whether the length of the exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1).
The standard of proof is a preponderance of the evidence and there may be no collateral
attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c) and
(d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or

mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R.
§ 1005.15(b) and (c).
D. Law Applicable

Petitioner’s right to a hearing by an administrative law judge (ALJ) and judicial review of
the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C.

§ 1320a-7(f)). Petitioner’s request for a hearing was timely filed and I do have
jurisdiction.

Pursuant to section 1128(a)(2) of the Act, the Secretary must exclude from participation
in Medicare and Medicaid programs any individual convicted of a criminal offense
related to the neglect or abuse of patients, in connection with the delivery of a health care
item or service.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section
1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R.
§ 1001.102(b), the period of exclusion may be extended based on the presence of
specified aggravating factors. Only if the aggravating factors justify an exclusion of
longer than five years may mitigating factors be considered as a basis for reducing the
period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

E. Analysis

1. The parties waived oral hearing and this decision is not a summary
judgment.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to
reasonable notice and an opportunity for a hearing. The right to hearing before an ALJ is
accorded to a sanctioned party by 42 C.F.R. § 1005.2 and the rights of both the sanctioned
party and the IG. to participate in a hearing are specified in 42 C.F.R. § 1005.3. Either or
both parties may choose to waive appearance at an oral hearing and to submit only
documentary evidence and written argument for my consideration. 42 C.F.R.

§ 1005.6(b)(5).

During the August 16 prehearing conference, the parties waived appearance at an oral
hearing and agreed that this case can be decided on the briefs and documentary evidence.
However, the I.G. filed a motion for summary judgment and Petitioner filed a brief in
support of a motion to deny summary judgment. The I.G. recognizes in its brief at page 2
that during the prehearing conference it was determined that the case would proceed on
the written submissions of the parties. Petitioner includes a similar recitation in its brief
but requests that I “deny the I.G.’s motion for summary judgment and overturn the
exclusion.” P. Brief at 2. The parties’ reference to summary judgment is confusing as it
could be construed to be inconsistent with the parties’ waiver of oral hearing. However, I
6

find no indication in the parties’ briefs that either desires to withdraw the waiver of an
oral hearing. Rather, the parties’ briefs show that they intend that this case be resolved on
the briefs and documentary evidence and the use of the phrase “summary judgment” is
simply in error. Due to the waiver of an oral hearing during the prehearing conference
this decision is clearly not a “summary judgment.” Rather this is a decision on the merits
based upon the briefs of the parties, and the documentary evidence they have filed as
agreed during the prehearing conference.

2. There is no basis for Petitioner’s exclusion pursuant to section
1128(a)(2) of the Act.

The I.G. cites section 1128(a)(2) of the Act as the basis for Petitioner’s mandatory
exclusion. The statute provides:

(a) MANDATORY EXCLUSION. — The Secretary shall
exclude the following individuals and entities from
participation in any Federal health care program (as defined in
section 1128B(f)):

(2) Conviction relating to patient abuse. — Any
individual or entity that has been convicted, under
Federal or State law, of a criminal offense relating to
neglect or abuse of patients in connection with the
delivery of a health care item or service.

The statute requires the Secretary to exclude from participation any individual or entity:
(1) convicted of a criminal offense; (2) where the offense is related to neglect or abuse;
(3) the neglect or abuse was of a patient; and (4) the neglect or abuse occurred in
connection with the delivery of a health care item or service. This section, unlike section
1128(a)(1), does not require that the delivery of the health care item or service was under
the Medicare or Medicaid programs.

Petitioner does not dispute that he was convicted of a criminal offense within the meaning
of section 1128(i) of the Act. Petitioner was a pharmacist licensed by the State of Kansas.
Between November 2000 and February 2002, Petitioner drew blood from multiple women
falsely representing that he was conducting a research project. Petitioner was charged
with 31 counts of battery upon the women from whom he drew blood. On March 21,
2002, Petitioner pled guilty to misdemeanor battery of 16 different women, each charged
as a violation of Kansas Statutes Annotated 21-3412(a)(1) a Class B Person
Misdemeanor. P. Brief at 3; I.G. Exs. 5, 13, 14, 15. On April 19, 2002, Petitioner was
sentenced to four, consecutive, six-month sentences and 12, concurrent, six-month
7

sentences. Petitioner was placed on supervised probation for two years, ordered to pay
court costs, and ordered to obtain a mental health evaluation and treatment. I.G. Ex. 15.
Thus, the first element for an exclusion pursuant to section 1128(a)(2) is satisfied.
Petitioner argues that the remaining three elements are not satisfied by the facts of this
case.

a. Petitioner abused his victims within the meaning of the Act.

The Kansas statute that Petitioner was found guilty of violating provides that battery is
“{i]ntentionally or recklessly causing bodily harm to another person ... .” Kan. Stat.
Ann. 21-3412(a)(1) (2001). Thus, Petitioner was convicted pursuant to his guilty plea of
causing “bodily harm” to his victims and this fact is not subject to challenge before me.
42 C.F.R. § 1001.2007(d). Petitioner argues however, that the bodily harm he caused his
victims does not amount to abuse within the meaning of section 1128(a)(2) of the Act.
The parties agree that the regulations do not provide a definition of abuse and that in prior
cases decided by appellate panels of the Departmental Appeals Board (the Board) and
ALJs the term has simply been given its ordinary meaning. I.G. Brief at 7-8; P. Brief at 5.

Although 42 C.F.R. Part 1001 (the I.G.’s exclusion regulations) does not include a
definition of “abuse,” the Secretary has defined abuse in another regulation promulgated
under the Act. “Abuse” is defined at 42 C.F.R. § 488.301 as “the willful infliction of
injury, unreasonable confinement, intimidation, or punishment with resulting physical
harm, pain, or mental anguish.” This definition of abuse is found in the Secretary’s
regulations governing the survey and certification of long-term care facilities, 42 C.F.R.
Part 488, subpart E. While the Secretary may not have intended its application in
exclusion cases, I see no need to resort to common meanings and dictionary definitions
where the Secretary has provided a workable definition that he promulgated under
authority of the Act that the I.G. seeks to enforce against Petitioner.

Petitioner’s plea of guilty to “battery” is an admission that he inflicted bodily harm upon
his victims pursuant to the law of the jurisdiction where his plea was accepted. There is
no dispute that he willfully punctured the skin and the vein of each victim in order to
draw a blood sample and I have no hesitation concluding that that was the willful
infliction of an injury which resulted in some physical harm and perhaps some pain.
Accordingly, I conclude that Petitioner, in fact, abused each victim within the meaning of
the Act and regulations. I am not persuaded by Petitioner’s arguments that there was no
abuse because the way he drew blood was “acceptable and expected” (P. Brief at 5) or
that it was not abuse because it was not “grossly inappropriate or unwanted physical
8

contact” (P. Brief at 6). I am also unswayed by the fact that the victims all originally
consented to the venous puncture and any associated risk. The Secretary’s definition of
abuse only requires physical injury and harm or pain. Petitioner admitted by his pleas that
he inflicted bodily harm and I find he is bound by that admission.

b. Petitioner’s victims were not his patients.

Petitioner argues that his conduct did not involve dispensing drugs or medication or
providing counseling regarding drugs or medication to any of the victims, thus, they were
not Petitioner’s patients. Petitioner also argues that the I.G. has not shown that any of his
victims were patients of Dillon’s Pharmacy! where Petitioner was employed. Petitioner
urges me to conclude that his victims were not patients within the meaning of the Act and
he is not subject to exclusion for this reason. P. Brief at 7. The I.G. argues that
Petitioner’s victims were his patients because they were examined and had their blood
drawn by him.” IG. Brief at 9; I.G. Reply at 1. The I.G. does not specifically assert in its
opening brief that any of Petitioner’s victims were customers or patients of the Dillon’s
Pharmacy where Petitioner worked, that Petitioner actually dispensed any drugs or
medications to the victims, or that he provided them with any advice or monitoring
related to any health care items or services. The I.G. does assert in its reply brief that
some of Petitioner’s victims were customers of Dillon’s Pharmacy (I.G. Reply at 5), but
that assertion is not proven by the evidence as discussed hereafter.

Whether Petitioner’s victims may be characterized as his patients is significant because
the third element that must be proved to trigger the required exclusion pursuant to section
1128(a)(2) is that Petitioner’s criminal conviction related to the abuse or neglect of a
“patient.” The I.G. bears the burden of showing that Petitioner’s victims were, in fact, his
patients. Bruce Lindberg, D.C., DAB No. 1280 (1991) (Lindberg J), at 3 (when the I.G.

' According to the investigator’s statement, Petitioner was a “Pharmacist with
Dillons,” but the investigator does not clarify which Dillons. There is evidence that
Petitioner worked at the “South Dillons” (I.G. Ex. 9, at 5) and that he worked at the
“Downtown Dillons Pharmacy” (I.G. Ex. 11, at 3). For those who travel the Midwest, it
is common knowledge that Dillon’s is part of a large supermarket chain that has a
pharmacy operation at its stores. However, the evidence in this case does not reveal if the
Dillon’s Pharmacy where Petitioner worked were actually part of the Dillon’s
supermarket chain.

? The I.G. also argues that Petitioner’s victims received “health care items” from
Petitioner including syringes, blood containers, and rubbing alcohol. I.G. Brief at 9. This
argument is discussed hereafter under the issue of whether or not there was delivery of a
health care item or service.
9

“invokes section 1128(a)(2), the I.G. must establish that these elements are present”).? In
this case, Petitioner was not convicted of an offense of neglect or abuse of a patient.
Thus, it is necessary to determine whether or not his victims were patients within the
meaning of section 1128(a)(2).

Neither the Act nor the I.G.’s exclusion regulations provide a definition of the term
“patient.” The I.G. cites Merriam-Webster’s Collegiate Dictionary for the definition that
a patient “is an individual awaiting or receiving medical care or treatment.” I.G. Brief at
8; I.G. Reply at 5. The I.G. also cites various decisions of the Board and ALJs for the
proposition that a patient is one who is “under the care of a medical practitioner.” I.G.
Brief at 8. The Secretary has provided a definition of “patient,” albeit in the context of
the Medicaid program:

Patient means an individual who is receiving needed
professional services that are directed by a licensed
practitioner of the healing arts toward the maintenance,
improvement, or protection of health, or lessening of illness,
disability, or pain.

42 C.F.R. § 440.2(a) (italics in original).*

The I.G., who bears the burden of persuasion on the elements of a violation of 1128(a)(2),
waived the opportunity for an oral hearing electing in this case to rely upon the
documentary evidence rather than to elicit testimony from Petitioner’s victims or the
police investigator. The documents offered include the I.G. notice (I.G. Ex. 1) and
Petitioner’s request for hearing (I.G. Ex. 2). The I.G. also had admitted as evidence some
investigators’ reports (I.G. Exs. 3, 8, 9, 10, 12); Petitioner’s consent agreement with the
Kansas Board of Pharmacy in which Petitioner admits nothing (I.G. Ex. 4); the criminal

> The I.G. asserts that Petitioner has failed to “disprove the legal sufficiency” of
the I.G.’s decision to exclude him. I.G. Reply at 1. The I.G. cites no authority for the
proposition that Petitioner bears such a burden and the argument is contrary to both the
regulation and prior decisions of the Board. 42 C.F.R. § 1005.15(b); Lindberg I.

‘ The Secretary has also defined “patient” in the regulations pertaining to the
confidentiality of alcohol and drug abuse patient records, as “any individual who has
applied for or been given diagnosis or treatment for alcohol or drug abuse at a federally
assisted program and includes any individual who, after arrest on a criminal charge, is
identified as an alcohol or drug abuser in order to determine that individual's eligibility to
participate in a program.” 42 C.F.R. § 2.11. However, this definition has no apparent
application in this case.
10

complaint (I.G. Ex. 5); some documents which appear to meet the investigating officer’s
description (I.G. Ex. 3, at 4) of documents that Petitioner used when collecting blood
(I.G. Ex. 6); Petitioner’s plea agreement (I.G. Ex. 13); the Journal Entry from the District
Court of Harvey County, Kansas reflecting Petitioner’s guilty pleas and the court’s
acceptance of those pleas (I.G. Ex. 14); and the Journal Entry of the District Court
reflecting Petitioner’s sentencing (I.G. Ex. 15).

The documentary evidence shows that Petitioner was convicted pursuant to his pleas of
counts 1, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 18, 21, 25, and 30, each of which alleged
battery. I.G. Ex. 14. The complaint provides little information in each count other than
the approximate date of the battery and the name of the victim. I.G. Ex. 5. The
investigating officers’ reports, specifically I.G. Ex. 3, at 1; IG. Ex. 9, at 1-5; I.G. Ex. 10,
at 2-3; and I.G. Ex. 11, at 1-3, provide the only details related to Petitioner’s contact with
each of the victims named in the counts to which Petitioner pled guilty.> The evidence
reflects that some of the victims recognized Petitioner as a pharmacist, some were co-
workers at Dillon’s, some had contact with Petitioner at Dillon’s, but the evidence does
not show that any received prescriptions or related counseling from Petitioner.
Furthermore, contrary to the I.G.’s assertion in its Reply Brief at 5, there is no evidence
that any of his victims were customers or patients of Dillon’s Pharmacy.*

The I.G.’s primary argument, however, is that Petitioner’s victims were his patients
because he drew their blood, with or without some examination, and he used some
supplies such as syringes, “blood containers,” and rubbing alcohol that he obtained at
Dillon’s. 1.G. Brief at 8-9; I.G. Reply at 5-6. However, applying either the common
definition suggested by the I.G. or the definition adopted by the Secretary, it is clear that
Petitioner’s victims were not patients. Petitioner’s victims were not seeking or receiving
care or treatment from Petitioner, nor is there evidence that they ever did. The evidence

5 The I.G. has provided no transcript of any proceeding in which the judge
discussed the providence of Petitioner’s guilty pleas so I have no detailed admissions by
Petitioner related to the counts to which he pled guilty. However, Petitioner did not
object to my consideration of the investigator’s reports or otherwise deny the content of
those reports. Thus, I can match the names in those reports with the names in the counts
to which Petitioner pled guilty to derive some information about Petitioner’s conduct with
the victims identified.

® The I.G. seems to assume that because Petitioner met some of his victims at the
“Dillons” and drew blood there in the backroom or parking lot that the victims must have
been customers of Dillon’s Pharmacy. I.G. Reply at 5. However, if the assumption is
based upon the victims’ presence, it does not necessarily hold if the Dillon’s stores where
Petitioner worked were supermarkets with pharmacy operations.
Il

does not show any relationship between him in his capacity as a pharmacist and any of the
victims named in the charges of which he was convicted. The evidence shows that
Petitioner sought out and solicited his victims but not that he used his position as a
pharmacist to locate his victims or to convince them to permit him to draw blood.
Furthermore, the evidence does not show that his victims were receiving needed care for
the maintenance, improvement, or protection of their health or treatment for the
prevention or lessening of an illness, disability, or pain. According to the victims’
statements in the investigator’s reports, they believed that blood was being drawn for
research, not their care or treatment.

Accordingly, I conclude that Petitioner’s victims were not his patients.

¢. Petitioner’s abuse of his victims did not occur in connection
with the delivery of a health care item or service.

The I.G. must also prove for an exclusion pursuant to section 1128(a)(2) that the neglect
or abuse occurred in connection with the delivery of a health care item or service.
According to the Board’s decision in Bruce Lindberg, DAB No. 1386 (1983) (Lindberg
71), “[t]he words ‘in connection with’ in section 1128(a)(2) require only a minimal nexus
between the abuse and the delivery of a health care service.”

The LG. argues that Petitioner evaluated his victims’ blood pressure, heart and liver
functions, and drew their blood. The I.G. argues that three of Petitioner’s victims (K.S.,
S.S., and M.A.) were patients of Dillon’s Pharmacy; however, review of the evidence
(.G. Ex. 3, at 1-2; LG. Exs. 8 and 11) shows that Petitioner met these three victims at the
Dillon’s but does not show that they were patients of the Dillon’s pharmacy. The mere
fact that the victims met Petitioner at the Dillon’s, particularly if it was a supermarket
with a pharmacy operation, does not give rise to the inference that they were pharmacy
customers. The I.G. further argues that Petitioner used supplies obtained from Dillon’s
Pharmacy. I.G. Reply at 6-8. However, Petitioner obtained the supplies for his purported
research and not for delivery as a health care item or service. The I.G. asserts in its
opening brief that Petitioner drew blood from three victims while “he was on duty as a
pharmacist” (I.G. Brief at 11) but the evidence does not support that assertion.

Although Petitioner did draw blood in some cases at the Dillon’s using supplies obtained
at the Dillion’s, the evidence does not show that he was either dispensing health care
items or providing health care services. Petitioner’s victims were tricked into believing
that they were giving blood samples for a research study. The evidence does not show
12

that any of the victims believed or that Petitioner ever suggested that he was providing his
victims either health care items or health care services. Thus, the nexus between
Petitioner’s abuse of his victims and the delivery of health care items or services simply
does not exist.

3. There is no basis for Petitioner’s exclusion pursuant to section
1128(a) of the Act and no period of exclusion is reasonable.

The I.G. has failed to prove that Petitioner’s victims were his patients. The I.G. has also
failed to prove that there is a nexus between Petitioner’s abuse of his victims and the
delivery of a health care item or service. Accordingly, I conclude that there is no basis
for Petitioner’s exclusion pursuant to section 1128(a)(2) of the Act and no period of
exclusion is reasonable.

II. Conclusion

For the foregoing reasons, Petitioner may not be excluded from participation in Medicare,
Medicaid and all federal health care programs pursuant to section 1128(a)(2) of the Act
based upon his March 21, 2002 conviction by the District Court of Harvey County
Kansas. :

/s/

Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Russell J. Ellicott, D.P.M., ) Date: January 10, 2007
)
Petitioner, )
)

-V.- ) Docket No. C-06-550

) Decision No. CR 1552
The Inspector General. )
)

DECISION

This matter is before me on the Inspector General’s (I.G.’s) Motion for Summary
Affirmance of the I.G.’s determination to exclude Petitioner pro se, Russell J. Ellicott,
D.P.M., from participation in Medicare, Medicaid, and all other federal health care
programs for a period of 10 years. The I.G.’s Motion and determination to exclude
Petitioner are based on section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C.
§ 1320a-7(a)(1). Petitioner’s only defense to the I.G.’s proposal is an impermissible
collateral attack on his conviction, which was based on four counseled and negotiated
guilty pleas.

The undisputed facts in this case require the imposition of at least the minimum five-year
exclusion, and fully support the reasonableness of the I.G.’s revised determination to
enhance that period of exclusion to 10 years. For those reasons, I grant the I.G.’s Motion
for Summary Affirmance.

I. Procedural Background

Petitioner pro se Russell J. Ellicott, D.P.M. was, between 1997 and 2002, a Doctor of
Podiatric Medicine who practiced in the State of Georgia, and who during that time was a
provider of podiatric services to beneficiaries of the Medicare program. A substantial
part of his practice was based on providing such services to residents of nursing homes.
2

Petitioner’s nursing home practice attracted the scrutiny of the Federal Grand Jury sitting
for the United States District Court for the Southern District of Georgia, which, on June
22, 2004, handed up a 22-count Indictment that named Petitioner as the sole defendant.!
The Indictment charged him with one felony count of health care fraud in his dealings
with Medicare and Medicaid, in violation of 18 U.S.C. § 1347, and 21 felony counts of
false statements to those programs related to health care matters, in violation of 18 U.S.C.
§ 1035(a)(2); the Indictment also set out a forfeiture claim against Petitioner based on 18
U.S.C. §§ 982(a)(7) and 982(b)(1) and 21 U.S.C. U.S.C. § 853(p).

On January 6, 2005, the Grand Jury revised its view of Petitioner’s transactions with
Medicare and Medicaid. It named him as the sole defendant in a Superseding Indictment
of 181 felony counts and a forfeiture claim. The original Indictment’s 22 counts were re-
alleged, but the Superseding Indictment added 159 new felony counts charging Petitioner
with mail fraud in his dealing with Medicare Part B, in violation of 18 U.S.C. § 1341.

Represented by two attorneys, Petitioner negotiated a Plea Agreement with the United
States on July 12, 2005. By that Agreement he pleaded guilty to all four counts of an
Information filed on July 8, 2005, and admitted that he had violated his Medicare
provider agreement contrary to 42 U.S.C. § 1320a-7b(e), section 1128B(e) of the Act, as
to each count. Each of the four violations charged was a misdemeanor. The Plea
Agreement stipulated that for sentencing purposes the amount of loss to the Medicare
program was $113,101.00. The date on which Petitioner’s guilty pleas were actually
tendered and accepted in open court does not appear in this record.

Petitioner appeared with both his counsel for sentencing on October 25, 2005. He was
sentenced to a four-year period of probation, and was in addition required to pay
restitution in the amount stipulated as the loss to Medicare, $113,101.00, a fine of
$20,000.00, and a $40.00 assessment. As the Plea Agreement required, the United States
moved the dismissal of the Superseding Indictment.

' The facts regarding Petitioner’s indictment and plea agreement that I recite in
this section are drawn from the Summary of Plea Agreement, Indictment, and
Superseding Indictment. Each of these documents was proffered by Petitioner as an
exhibit (Petitioner’s Exhibits 1, 2, and 7, respectively). As discussed below, the exhibits
have been received in evidence. Because Petitioner offered the documents, I presume he
does not dispute their contents.
3

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), mandates the exclusion for a
period of not less than five years of “any individual or entity that has been convicted of a
criminal offense related to the delivery of an item or service under Title XVII... ”, the
Medicare program. On May 31, 2006, the I.G. notified Petitioner that he was to be
excluded for a period of 10 years pursuant to the terms of section 1128(a)(1) of the Act.
The I.G.’s determination to set the period of exclusion at 10 years was based on the
apparent presence of two aggravating factors set out at 42 C.F.R. §§ 1001.102(b)(1) and
(b)(2).

Acting pro se, Petitioner sought review of the I.G.’s action by his letter dated June 26,
2006. I convened a prehearing conference by telephone on August 3, 2006, pursuant to
42 C.F.R. § 1005.6. The LG. expressed the intention to seek summary disposition on
written submissions, and I established a schedule for the filing of documents and briefs.
That schedule and other details of the conference are set out in my Order of August 10,
2006. That briefing cycle has been completed, and the record in this case closed
November 16, 2006.

The evidentiary record on which I decide this case contains 28 exhibits. The I.G.
submitted five proposed exhibits with his September 8, 2006 filing, marked I.G. Exhibits
1-5 (LG. Exs. 1-5). Petitioner submitted 22 proposed exhibits with his September 14,
2006 Brief for Denial of Summary A ffirmance (P. Br.), marked P. Exhibits 1-22 (P. Exs.
1-22). Petitioner submitted an additional exhibit with his November 15, 2006 Response
to OIG Reply Brief for Denial of Summary Affirmance (P. Resp. Br.). Petitioner
designated this exhibit as “P. Ex. 1” even though he had previously proffered an exhibit
so designated. I have redesignated the exhibit submitted with the November filing as P.
Ex. 23. Neither party has objected to any of the opposing party’s proposed exhibits, and
in the absence of objection I.G. Exs. 1-5 and P. Exs. 1-23 are admitted to the record. In
admitting P. Exs. 3-6, 8-12, and 14-23, however, | note that they are irrelevant to these
proceedings. I shall discuss their irrelevance below.

II. Issues

The issues before me are limited to those noted at 42 C.F.R. § 1001.2007(a)(1), and both
issues must be resolved in favor of the I.G.’s position. In the context of this record those
two issues are:

1. Whether the I.G. has a basis for excluding Petitioner from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(a)(1) of the Act; and
4

2. Whether the 10-year length of the period of exclusion is unreasonable.

Section 1128(a)(1) of the Act mandates Petitioner’s exclusion, for his predicate
conviction has been established. A five-year period of exclusion is the minimum period
established by section 1128(c)(3)(B) of the Act.

The enhancement of that period to 10 years is not unreasonable. Both of the aggravating
factors relied on in the 1.G.’s determination to enhance the period to 10 years are
demonstrated in the record before me, and no mitigating factors have been pleaded or
proven by Petitioner. The proposed length of the period of exclusion is within a
reasonable range, and is therefore not unreasonable.

III, Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of any “individual or entity that has been convicted of a criminal offense related
to the delivery of an item or service under Title XVIII or under any State health care
program.” Title XVIII of the Act is the Medicare program. The terms of section
1128(a)(1) are restated in similar regulatory language at 42 C.F.R. § 1001.101(a). This
statutory provision makes no distinction between felony convictions and misdemeanor
convictions as predicates for conviction.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual... by a Federal .. . court...” (Act,
section 1128(i)(1), 42 U.S.C. § 1320a-7(i)(1)); or “when there has been a finding of guilt
against the individual . . . by a Federal . . . court,” (Act, section 1128(i)(2), 42 U.S.C.

§ 1320a-7(i)(2)). These definitions are repeated at 42 C.F.R. § 1001.2.

An exclusion based on section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Act, section 1128(c)(3)(B); 42 U.S.C. § 1320a-7(c)(3)(B).
The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory provision. The
minimum mandatory period of exclusion is subject to enhancement in some limited
circumstances and on proof of narrowly-defined aggravating factors set out at 42 C.F.R.
§§ 1001.102(b)(1)-(9). In this case, the I.G. seeks to enhance the period of Petitioner’s
exclusion to 10 years, and relies on the two aggravating factors listed at 42 C.F.R.

§§ 1001.102(b)(1) and (b)(2).

5

If the I.G. seeks to enhance the period of exclusion by relying on any of those aggravating
factors, a petitioner may attempt to limit or nullify the proposed enhancement through a
showing of certain mitigating factors set out at 42 C.F.R. §§ 1001.102(c)(1)-(3).

The standard of proof in this case is a preponderance of the evidence. Petitioner bears the
burden of proof and persuasion on any affirmative defenses or mitigating factors and the
1.G. bears the burden on all other issues. 42 C.F.R. §§ 1005.15.

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

1. Ona date in 2005 not established by this record, in the United States District Court for
the Southern District of Georgia, Petitioner Russell J. Ellicott, D.P.M., pleaded guilty to
four counts of having violated his Medicare provider agreement, contrary to 42 U.S.C.

§ 1320a-7b(e), section 1128B(e) of the Act. I.G. Exs. 2, 3.

2. Final adjudication of guilt, judgment of conviction, and sentencing based on that plea
of guilty were imposed on Petitioner in the United States District Court on October 25,
2005. I.G. Ex. 2.

3. On May 31, 2006, the I.G. notified Petitioner that he was to be excluded from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of 10 years, based on the authority set out in section 1128(a)(1) of the Act and the
aggravating factors set out at 42 C.F.R. § 1001.102(b)(1) and (b)(2). LG. Ex. 1.

4. Petitioner perfected his appeal from the I.G.’s action by filing a pro se hearing request
on June 26, 2006.

5. The adjudication of guilt, judgment of conviction, and sentence based on Petitioner’s
violations of 42 U.S.C. § 1320a-7b(e), as described in Finding 2 above, constitute a
“conviction” related to the delivery of an item or service under the Medicare program,
within the meaning of sections 1128(a)(1) and 1128(i)(1) and (2) of the Act, and 42
C.F.R. § 1001.2.

6. Because of his conviction, Petitioner was subject to, and the I.G. was required to
impose, a period of exclusion from Medicare, Medicaid, and all other federal health care
programs of not less than five years. Act, sections 1128(a)(1) and 1128(c)(3)(B).
6

7. The acts resulting in Petitioner’s conviction as described in Finding 2 above caused a
financial loss to the Medicare program of $113,101.00. I.G. Ex. 2, at 3; LG. Ex. 5, at 4-5;
P. Ex. 1, at 5-6.

8. Because the acts resulting in Petitioner’s conviction caused a financial loss to the
Medicare program of $5,000 or more, the aggravating factor set out in 42 C.F.R.
§ 1001.102(b)(1) is present.

9. The acts resulting in Petitioner’s conviction as described in Finding 2 above were
committed over the period from in and about January of 1997 through June of 2002. LG.
Ex. 3, at 1; 1.G. Ex. 5, at 4.

0. Because the acts resulting in Petitioner’s conviction were committed over a period of
one year or more, the aggravating factor set out in 42 C.F.R. § 1001.102(b)(2) is present.

1. None of the mitigating factors set out in 42 C.F.R. §§ 1001.102(c)(1)-(3) is present.
2. The I.G.’s exclusion of Petitioner for a period of 10 years is supported by fact and

law, is within a reasonable range, and is therefore not unreasonable. I.G. Exs. 2, 3, and 5;
P. Ex. 1; Findings 1-11, above.

3. There are no disputed issues of material fact and summary affirmance is appropriate
in this matter. Thelma Walley, DAB No. 1367 (1992); 42 C.F.R. § 1005.4(b)(12).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under Title XVIII of the Act (Medicare) or any state health care program. Thelma
Walley, DAB No. 1367; Boris Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph.,
DAB CR12062 (2004), rev'd on other grounds, DAB No. 1979 (2005). Those two
essential elements are established in the record before me.

The fact of Petitioner’s criminal conviction is shown by I.G. Ex. 2. Although the date and
circumstances of Petitioner’s guilty plea do not appear in this record, the District Court’s
adjudication of Petitioner’s guilt and its judgment of his conviction on October 25, 2005,
as recorded in its October 28, 2005 Judgment in a Criminal Case, satisfy the definitions of
“conviction” set out at sections 1128(i)(1) and (2) of the Act. The I.G. has proved the
first essential element.
7

The second essential element, the relation of Petitioner’s criminal conviction to the
delivery of items or services under the Medicare program, appears in detailed recitations
throughout LG. Exs. 3 and 5, and P. Ex. 1. Those recitations explicitly identify
Petitioner’s crimes as billing for Medicare benefits using treatment codes for services
defined in a manner he knew to be materially different from that then established and
published by Medicare. I.G. Ex. 3; P. Ex. 1, at 5. Petitioner admitted that he had agreed
to participate in the Medicare program as a physician, that he knew the terms of his
agreement, especially the terms governing his acceptance of Medicare benefits
assignments for podiatric services, and that he willfully and repeatedly violated the terms
of his Medicare agreement. I.G. Ex. 5, at 2; P. Ex. 1, at 2.

The specific manner in which Petitioner admitted violating his Medicare agreement was
the criminal practice widely called “up-coding.” Petitioner charged Medicare using
billing codes for more expensive procedures than those he actually performed, by which
practice Medicare was induced to pay more to Petitioner than it would otherwise have
paid if the procedures had been truthfully coded. I.G. Ex. 5, at 4; P. Ex. 1, at 5. The
submission of false claims to the Medicare and Medicaid programs has been consistently
held to be a program-related crime within the reach of section 1128(a)(1). Jack W.
Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp. 835
(E.D. Tenn. 1990); Julius Williams, IIT, DAB CR1464 (2006); Kennard C. Kobrin, DAB
CR1213 (2004); Norman Imperial, DAB CR833 (2001); Egbert Aung Kyang Tan, M.D.,
DAB CR798 (2001); Lorna Fay Gardner, DAB CR648, aff'd DAB No. 1733 (2000);
Mark Zweig, M.D., DAB CR563 (1999); Alan J. Chernick, D.D.S., DAB CR434 (1996).

The required nexus and common-sense connection between the crime of which Petitioner
was convicted and the Medicare program is present here as a matter of fact. Berton
Siegel, D.O., DAB No. 1467 (1994). Moreover, I believe that Petitioner’s conviction for
violating section 1128B(e) of the Act, 42 U.S.C. § 1320a-7b(e), is a conviction for a
program-related offense as a matter of law. The I.G. has proved the second essential
element.

Petitioner stridently denies that he is subject to exclusion, and depicts his conviction as an
inadequate basis for the I.G.’s proposed action. The core of Petitioner’s argument is his
opinion that the podiatric procedures required by Medicare to support the billings he
submitted were medically improper, perhaps to the point of being harmful or dangerous to
patients. He insists that he was therefore free — in fact, obliged — to perform
procedures other than the ones for which he submitted his bills to Medicare. It may be
best to set out Petitioner’s principal tenet in his own words:
8

The failure to torture or abuse patients could never be considered a
“criminal offense related to the delivery of an item or service under title
XVIII or under any State health care program”. Several Federal and State
laws make illegal the abuse of patients necessitated by the toenail
debridement requirement (i.e. denailing or complete avulsion without
anesthesia) of Georgia Medicare, Part B, policies 306 and 307, Indictment
CR 104-60, and the plea agreement.

P. Br. at 19.

Petitioner’s Conviction is not related to the Delivery of an item or service
under a State Health Care Program within the Meaning of Section
1128(a)(1) of the Act because the basis or meaning of the conviction is
derived from an abusive act that wasn’t performed.

P. Br. at 22.

In order to have a conviction there has to be a criminal offense. The mere
fact that CMS, OIG and the Georgia Medicare Carrier have allowed or
overlooked the creation of a procedure by Georgia Medicare that is truly
objectionable to the public places the onus upon these agencies to eliminate
this procedure from being performed upon the public. Government
agencies should not be in the torture or abuse business.

P. Resp. Br. at 1.

IG cannot escape the fact that Georgia Medicare’s guidelines require an
illegal act to be performed for toenail debridement reimbursement that
makes the provider agreement voidable. That voidable agreement existed
long before the plea agreement. Those illegal guidelines have been used to
falsely convict Petitioner. That false conviction based on illegal guidelines
is the mitigating factor that completely trumps any aggravating factor the IG
represents because Petitioner’s so called program-related crime is
completely dependent on reasonable, publicly or medically accepted
guidelines.
P. Resp. Br. at 2-3.

That argument is not the only one at Petitioner’s command. Raising what might be
understood as the defense of selective prosecution, he portrays his conviction as the
fruition of a Medicare vendetta:

Petitioning Congressman Norwood in 1999 (P. Ex.16), which I thought was
allowed by the First Amendment appears to have brought on a response that
would result in my demise. Petitioner petitioned Congressman Norwood in
response to an erroneous letter Georgia Medicare, Part B was sending to
nursing home attending physicians . .. That is when Georgia Medicare
began to look for a way to take revenge against me.

P. Br. at 26-27.

But there remains yet a third argument in Petitioner’s briefing. It will be recalled that the
Superseding Indictment of January 6, 2005, charged Petitioner with a total of 181
felonies. The potential consecutive prison exposure on conviction of those 181 felonies
was 1705 years. The potential fine exposure was $250,000.00 on each felony count. The
Superseding Indictment pleaded a forfeiture claim, and conviction on even a single felony
would have, as matters of state and federal statutes, terminated many of Petitioner’s civil
rights, such as his right to own firearms, or to vote and hold public office. The bargain
that Petitioner’s attorneys were able to negotiate on his behalf allowed him to plead guilty
to four misdemeanors for which the total consecutive prison exposure was two years and
the cumulative fine exposure was $20,000.00, the amount actually imposed. The four-
misdemeanor Information contained no forfeiture claim. This is what Petitioner says
about the effectiveness of his counsel:

Poor lawyering has resulted in Petitioner pleading guilty to a non-crime that
was supposed to result in mere Class B misdemeanor charges that would not
have future affect on Petitioner or Petitioner’s family.

P. Resp. Br. at 4.

These are, at best, but speculative defenses to the criminal charges themselves. They
could have been raised in the District Court or in the United States Court of Appeals for
the Eleventh Circuit, but for the fact that Petitioner accepted the deal his lawyers
negotiated, pleaded guilty to four misdemeanors, and served no prison time at all. They
are not defenses here. They are irrelevant to these proceedings, as are P. Exs. 3-6, 8-12,
and 14-23. Those exhibits are proffered by Petitioner in an effort to bolster his claim of
10

selective prosecution and to support his assault on the Medicare podiatry procedures he
admitted flouting, but his efforts are beside the point here. Neither those procedures nor
Petitioner’s conviction may be attacked or impeached by indirect assault in this exclusion
case, and thus those Exhibits have no bearing on the issues in this exclusion case.

Petitioner cannot directly deny the procedural facts of his conviction. Instead, he protests
that he is not really guilty of the charges he admitted. But insofar as Petitioner now seeks
to abjure or disavow his admission of criminality, he is bound by the facts established by
his pleas of guilty to the four counts in the Information, including the specific admissions
that he “. . . did knowingly, willfully, and repeatedly violate the terms of . . .” his
Medicare agreement in that he “[W]illfully billed for Medicare benefits using treatment
codes for services defined in a manner he knew to be materially different from that then
established and published by Medicare .. . .” .G. Ex. 3. He will not be heard to recant
those admissions now. See Susan Malady, R.N., DAB No. 1816 (2002); Theodore Sabot,
M.D., DAB CR1160 (2004); Dirk G. Wood, M.D., DAB CR1068 (2003). Any form of
collateral attack on predicate convictions in exclusion proceedings is precluded by
regulation at 42 C.F.R. § 1001.2007(d), and that preclusion has been affirmed repeatedly
by the Departmental Appeals Board (Board). Susan Malady, R.N., DAB No. 1816; Dr.
Frank R. Pennington, M.D., DAB No. 1786 (2001); Joann Fletcher Cash, DAB No. 1725
(2000); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Chander Kachoria, R.Ph., DAB
No. 1380 (1993). Petitioner’s conviction stands and, as I have explained above, it
satisfies both essential elements necessary to sustaining the exclusion.

Once a predicate conviction within the scope of section 1128(a) has been shown,
exclusion for the minimum period of five years is mandatory. Mark K. Mileski, DAB No.
1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002); Lorna Fay Gardner, DAB No.
1733 (2000). The period of exclusion may be enhanced to more than five years if the I.G.
proves the existence of certain aggravating factors listed at 42 C.F.R. § 1001.102(b)(1)-
(9). In this case the I.G. has asserted the presence of two aggravating factors.

The first aggravating factor on which the I.G. relies is present when “[t]he acts resulting
in the conviction, or similar acts . .. caused . . . a financial loss to a Government program
... of $5,000 or more.” 42 C.F.R. § 1001.102(b)(1). Petitioner was ordered to pay
$113,101.00 in restitution to the Centers for Medicare (and Medicaid Services) as part of
his sentence. I.G. Ex. 2, at 3. The law of this forum supports reliance on this adjudicated
amount of restitution as prima facie proof of the amount of loss. Dr. Darren J. James,
D.P.M., DAB CR860 (2002); Ruth Ferguson, DAB CR725 (2000); Steven Alonzo Henry,
M.D., DAB CR638 (2000); Thomas P. Whitfield, D.P.M., DAB CR539 (1998); Gilbert
Ross, M.D., et al., DAB CR478 (1997). But here it is unnecessary to rely on the amount
of restitution as the only expression of the total loss caused by Petitioner’s crime, for the
11

Plea Agreement submitted to the District Court as the basis of Petitioner’s guilty plea
includes Petitioner’s stipulation to the same amount: “The course of conduct and series of
transactions of which Counts One through Four are representative involved the receipt by
defendant [here, Petitioner] of Medicare benefits overpayments of not less than
$113,101.00 for the time period embraced by the Information.” I.G. Ex. 5, at 2, 3, and 4-
5; P. Ex 1, at 4, and 5-6. That substantial and uncontested sum satisfies the requirement
of 42 C.F.R. § 1001.102(b)(1). The I.G. has established this first aggravating factor.

The second aggravating factor asserted by the I.G. is specified at 42 C.F.R.

§ 1001.102(b)(2). That factor is present if “[t]he acts that resulted in the conviction, or
similar acts, were committed over a period of one year or more.” The Information to
which Petitioner pleaded guilty demonstrates the factor. The first lines of each Count in
that Information read: “From in and about January of 1997 through June of 2002, in
Richmond County... RUSSELL J. ELLICOTT, D.P.M., .. . did knowingly, willfully,
and repeatedly violate the terms of such (Medicare) agreement...” I.G. Ex. 3.
Petitioner’s admission of guilt to those four charges is sufficient to demonstrate the 65-
month temporal span of his crimes. The I.G. has established this second aggravating
factor,

When the I.G. offers evidence of aggravating factors, a petitioner may attempt to limit or
nullify the proposed enhancement through proof of certain mitigating factors set out at 42
C.F.R. §§ 1001.102(c)(1)-(3). Those mitigating factors are listed immediately following
the regulation’s limiting language specifying that “[o]nly the following factors may be
considered mitigating . ..” 42 C.F.R. § 1001.102(c). As to each of the mitigating factors,
“... Petitioner ha[s] the burden of proving any mitigating factor by a preponderance of
the evidence, since the mitigating factor is in the nature of an affirmative defense.” Barry
D. Garfinkel, M.D., DAB No. 1572, at 12 (1996). This allocation of the burden of proof,
set out at 42 C.F.R. § 1005.15(b)(1), has been reaffirmed consistently. Stacey R. Gale,
DAB No. 1941 (2004); Dr. Darren James, D.P.M., DAB No. 1828, at 8-9 (2002).

Petitioner has made no attempt to assert the existence of any mitigating factors. Without
forgetting the rule that assigns to him the burden of proving any mitigating factor by a
preponderance of the evidence, I have searched all of the pleadings in this case for any
suggestion that one or more of those additional mitigating factors might be brought into
consideration. That search has revealed nothing that suggests any additional claim in
mitigation. Since Petitioner was convicted of four misdemeanors and the amount of loss
to Medicare was far more than $1500.00, 42 C.F.R. § 1001.102(c)(1) cannot apply.
Nothing in Petitioner’s briefing asserts that his conduct in connection with the events in
the criminal case was affected by a mental, emotional, or physical condition that led to his
reduced culpability at the time of those events. None of the Exhibits makes such a
12

suggestion, and I have given particular attention to the District Court’s sentencing
documents at I.G. Ex. 2, Thus, 42 C.F.R. § 1001.102(c)(2) cannot be brought into
consideration. Petitioner has neither demonstrated the attitude nor claimed the actions
which might even hint at the possibility of his invoking the mitigating factor set out at 42
C.F.R. § 1001.102(c)(3).

The 1.G.’s discretion in weighing the importance of aggravating and mitigating factors in
exclusion cases is due great deference when reviewed by Administrative Law Judges
(ALJs). This rule evolved in such Board decisions as Barry D. Garfinkel, M.D., DAB
No. 1572; Frank A. DeLia, D.O., DAB No. 1620 (1997), and Gerald A. Snider, M.D.,
DAB No. 1637 (1997). With the Board’s decisions in Joann Fletcher Cash, DAB No.
1725 (2000); Stacy Ann Battle, D.D.S., et al., DAB No. 1843 (2002), and Jeremy
Robinson, DAB No. 1905 (2004), the rule took its present form.

Stated in its present form, the rule forbids that ALJs substitute their own views of what
period of exclusion might appear “best” in any given case for the view of the I.G. on the
same evidence. The Board has insisted that ALJs reduce an exclusionary period only
when they discover some meaningful evidentiary failing in the aggravating factors upon
which the LG. relied, or when they discover evidence reliably establishing a mitigating
factor not considered by the I.G. in setting the enhanced period. Jeremy Robinson, DAB
No. 1905.

Where, as here, the I.G. has weighed all of the aggravating and mitigating factors
established by the evidence, and where, as here, there are no aggravating or mitigating
factors relied on but unproven, a holding that the exclusion period chosen by the I.G. is
unreasonable could be reached only through an exercise that the Cash-Battle-Robinson
tule forbids that I undertake. The only question now before me is whether the exclusion
period is within a reasonable range.

In the instant case, the proposed 10-year period is commensurate with the range
established as reasonable in such cases as Donald A. Burstein, Ph.D., DAB No. 1865
(2003); Ira Katz, Little Five Points Pharmacy, DAB CR1044 (2003); Alfredo Robert,
DAB CR1033 (2003); Paul W. Williams, Jr., et al., DAB CR787 (2001); Tarvinder
Singh, D.D.S., DAB CR697 (2000); Howard S. Weiss, M.D., DAB CR421 (1996). I rely
on those cases as points of reference because they were, like this one, based on
convictions for crimes of dishonesty and, like this one, contained evidence of the
aggravating factors set out at 42 C.F.R. § 1001.102(b)(1) and (b)(2). The loss attributed
to Petitioner’s crime is well in excess of the minimum necessary to invoke the “amount of
loss” factor, and the temporal span of his crimes was more than five years, a period quite
13

sufficient for him to have demonstrated both practiced duplicity and chronic
untrustworthiness. The 10-year length of the proposed exclusion is within a reasonable
range, and it is therefore not unreasonable.

Summary disposition is appropriate when there are no disputed issues of material fact and
when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate
that one party is entitled to judgment as a matter of law. Thelma Walley, DAB No. 1367.
Summary disposition is explicitly authorized by the terms of 42 C.F.R. § 1005.4(b)(12),
and this forum looks to FED. R. CIV. P. 56 for guidance in applying that regulation.
Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367; John W.
Foderick, M.D., DAB No. 1125 (1990). When the undisputed material facts of a case
support summary disposition, a full evidentiary hearing is unnecessary. Surabhan
Ratanasen, M.D., DAB No. 1138 (1990); John W. Foderick, M.D., DAB No. 1125. The
material facts in this case are undisputed, clear, and unambiguous. They support
summary disposition and this decision.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Affirmance must be, and it
is, GRANTED. The I.G.’s exclusion of Petitioner Russell J. Ellicott, D.P.M., from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of 10 years, pursuant to the terms of section 1128(a)(1) of the Act, is sustained.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Deborah Morris, ) Date: December 30, 2008

)
Petitioner, )
)

-Vv.- ) Docket No. C-08-517

) Decision No. CR1877
The Inspector General. )
)

DECISION

This matter is before me on the Inspector General’s (1.G.’s) Motion for Summary
Affirmance of the I.G.’s determination to exclude Petitioner pro se Deborah Morris from
participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15 years. The I.G.’s Motion and determination to exclude Petitioner are based
on the terms of section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. § 1320a-
7(a)(1). The facts in this case mandate the imposition of a five-year exclusion, and fully
support the I.G.’s determination to enhance that period of exclusion to 15 years. For
those reasons, I grant the I.G.’s Motion for Summary Affirmance.

I. Procedural Background

Deborah Morris was the owner and operator of a business called D. N. Morris &
Associates (DNMA), an ostensible provider of outpatient mental health services to
Pennsylvania children and their families under the Medicare program. Beginning in
1997, Petitioner devised a scheme to defraud Medicare by means of a virtual cascade of
mendacity.

That activity led to Petitioner’s indictment by the Federal Grand Jury sitting for the
Eastern District of Pennsylvania: on October 25, 2005, the Grand Jury handed up a 49-
count Indictment charging Petitioner with 34 counts of violating 18 U.S.C. § 1347, Health
Care Fraud; 14 counts of violating 18 U.S.C. § 1341, Mail Fraud and 18 U.S.C. § 2,
2

Aiding and Abetting; and one count of violating 18 U.S.C. § 1035, False Statements
Related to Health Care Matters. The Grand Jury specifically alleged that, as a
consequence of Petitioner’s false representations and claims, Medicare paid Petitioner
and DNMA approximately $278,507.

On December 7, 2006, upon her plea of not guilty, and following a six-day jury trial in the
United States District Court for the Eastern District of Pennsylvania during which she
was represented by counsel, Petitioner was found guilty of all 49 charged felonies exactly
as charged in the Indictment. On October 23, 2007, Petitioner was sentenced to a prison
term of 60 months to be followed by a three-year term of supervised probation, and was
ordered to pay restitution to The Centers for Medicare & Medicaid Services in the sum of
$278,507.05.

On May 30, 2008, the LG. notified Petitioner that she was to be excluded from Medicare,
Medicaid, and all other federal health care programs for a period of 15 years, pursuant to
the terms of section 1128(a)(1) of the Act. Section 1128(a)(1) mandates the exclusion,
for a period of not less than five years, of “[a]ny individual or entity that has been
convicted of a criminal offense related to the delivery of an item or service under title
XVIII or any State health care program.” The I.G.’s determination to set the period of
exclusion at 15 years was based on the asserted presence of three aggravating factors set
out at 42 C.F.R. §§ 1001.102(b)(1), (b)(2), and (b)(5).

Petitioner timely sought review of the I.G.’s action by her pro se letter of June 3, 2008.
Problems related to Petitioner’s status as an inmate in Alderson Federal Prison Camp in
Alderson, West Virginia, prevented the successful scheduling of a telephonic prehearing
conference pursuant to 42 C.F.R. § 1005.6(c), so by Order on July 22, 2008, I established
a schedule by which Petitioner’s appeal could proceed in a speedy, orderly, and fair
manner in the context of summary disposition based on the submission of documents and
briefs. All briefing is now complete, and the record in this case closed November 19,
2008.

The evidentiary record on which I decide the issues before me contains 11 exhibits. The
LG. proffered six exhibits marked I.G. Exhibits 1-6 (1.G. Exs. 1-6). Petitioner proffered
five exhibits marked Petitioner’s Exhibits 2, 3, 5, 6, and 7 (P. Exs. 2, 3, 5, 6, and 7), but
did not proffer exhibits marked Petitioner’s Exhibits 1 and 4, and did not correct the
omission when the matter was called to her attention in my Stay of Proceedings order
dated October 20, 2008. In the absence of objection I have admitted I.G. Exs. 1-6 and P.
Exs. 2, 3, 5, 6, and 7 as designated by her. Petitioner continues to appear pro se.
II. Issues

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

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

2. Whether the proposed 15-year period of exclusion is unreasonable.

I resolve both issues in favor of the I.G.’s position. Because her predicate conviction has
been established, section 1128(a)(1) of the Act mandates Petitioner’s exclusion.

A five-year period of exclusion is the minimum period established by section
1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B). All three of the aggravating
factors relied on by the I.G. in determining to enhance the period to 15 years have been
proven, and no mitigating factors recognized by regulation have been pleaded by
Petitioner or proven by the evidence before me. The length of the proposed enhancement
is within a reasonable range, and is therefore not unreasonable.

Ill. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), requires the mandatory
exclusion from participation in Medicare, Medicaid, and all other federal health care
programs of any “individual or entity that has been convicted of a criminal offense related
to the delivery of an item or service under title X VIII or under any State health care
program.” Title XVIII of the Act is the Medicare program. The terms of section
1128(a)(1) are restated in regulatory language at 42 C.F.R. § 1001.101(a). This statutory
provision makes no distinction between felony convictions and misdemeanor convictions
as predicates for mandatory exclusion.

The Act defines “conviction” as including those circumstances “when a judgment of
conviction has been entered against the individual . . . by a Federal . . . court, regardless
of whether there is an appeal pending .. . ”, section 1128(i)(1) of the Act; or “when there
has been a finding of guilt against the individual ... by a Federal .. . court,” section
1128(4)(2) of the Act. 42 U.S.C. § 1320a-7(i)(1) and (2). These definitions are repeated
at 42 C.F.R. § 1001.2.
4

An exclusion based on section 1128(a)(1) is mandatory and the I.G. must impose it for a
minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-
7(c)(3)(B). The regulatory language of 42 C.F.R. § 1001.102(a) affirms the statutory
provision.

The minimum mandatory period of exclusion is subject to enhancement in some limited
circumstances and on the I.G.’s proof of narrowly-defined aggravating factors set out at
42 C.F.R. § 1001.102(b)(1)-(9). In this case, the I.G. seeks to enhance the period of
Petitioner’s exclusion to 15 years, and relies on the three aggravating factors listed at 42
C.F.R. § 1001.102(b)(1), (b)(2), and (b)(5).

If the I.G. determines to enhance the period of exclusion by relying on any of those
aggravating factors, a petitioner may attempt to limit or nullify the proposed enhancement
through proof of certain specifically-defined mitigating factors set out at 42 C.F.R.

§ 1001.102(c)(1)-(3). In this case, no mitigating factor has been pleaded or appears in the
record before me, and thus none of them requires extended discussion.

The standard of proof in this case is a preponderance of the evidence. Petitioner bears the
urden of proof and persuasion on any affirmative defenses or mitigating factors and the
.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b).

IV. Findings and Conclusions
find and conclude as follows:

. Ona jury verdict of guilty on December 7, 2006, in the United States District Court for
the Eastern District of Pennsylvania, Petitioner Deborah Morris was found guilty on 34
counts of violating 18 U.S.C. § 1347, Health Care Fraud; 14 counts of violating 18 U.S.C.
§ 1341, Mail Fraud and 18 U.S.C. § 2, Aiding and Abetting; and one count of violating

8 U.S.C. § 1035, False Statements Related to Health Care Matters. I.G. Exs. 5, at 11; 3,
at 1.

2. Final adjudication of guilt and judgment of conviction based on that verdict were
entered against Petitioner, and sentence was imposed on her, in the United States District
Court on October 23, 2007. She was sentenced to a prison term of 60 months to be
followed by a three-year term of supervised probation, was assessed $4900, and was
ordered to pay restitution to The Centers for Medicare & Medicaid Services in the sum of
$278,507.05. I.G. Ex. 3, at 4.
5

3. The adjudication of guilt, judgment of conviction, and sentence based on Petitioner’s
violations of 18 U.S.C. §§ 1035, 1341 and 2, and 1347, as described in Findings 1 and 2
above, constitute a “conviction” related to the delivery of an item or service under the
Medicare program, within the meaning of sections 1128(a)(1) and 1128(i)(1) and (2) of
the Act, and 42 C.F.R. § 1001.2.

4. Because of her conviction, Petitioner was subject to, and the I.G. was required to
impose, a period of exclusion from Medicare, Medicaid, and all other federal health care
programs of not less than five years. Act, sections 1128(a)(1) and 1128(c)(3)(B).

5. The acts resulting in Petitioner’s conviction caused a financial loss to the Medicare
program of approximately $278,507.05. I.G. Exs. 3, 4.

6. Because the acts resulting in Petitioner’s conviction caused a financial loss to a
Government program of more than $5,000, the aggravating factor set out in 42 C.F.R.
§ 1001.102(b)(1) is present.

7. The acts resulting in Petitioner’s conviction, as described in Findings 1 and 2 above,
were committed over the period from on or about July 10, 1997, through on or about June
14, 2002. I.G. Exs. 3, 4.

8. Because the acts resulting in Petitioner’s conviction were committed over a period of
one year or more, the aggravating factor set out in 42 C.F.R. § 1001.102(b)(2) is present.

9. As the result of her conviction, as described in Findings 1 and 2 above, Petitioner was
sentenced to incarceration for a term of 60 months. I.G. Ex. 3.

0. Because Petitioner was sentenced to a term of incarceration, the aggravating factor
set out in 42 C.F.R. § 1001.102(b)(5) is present.

1. No mitigating factor set out in 42 C.F.R. § 1001.102(c)(1)-(3) is present.

2. The LG.’s exclusion of Petitioner for a period of 15 years is supported by fact and
law, is within a reasonable range, and is therefore not unreasonable. I.G. Exs. 1, 3, and 4;
Findings 1-11, above.

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

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of
the Act are: (1) the individual to be excluded must have been convicted of a criminal
offense; and (2) the criminal offense must have been related to the delivery of an item or
service under title XVIII of the Act (Medicare) or any state health care program. Tamara
Brown, DAB No. 2195 (2008); Thelma Walley, DAB No. 1367; Boris Lipovsky, M.D.,
DAB No. 1363 (1992). The I.G.’s proof of these two essential elements is patent in the
record before me.

The first essential element, the fact of Petitioner’s conviction, is established by District
Court records that include the Indictment on which Petitioner stood trial (1.G. Ex. 4), the
District Court’s Criminal Docket sheet (I.G. Ex. 5), by which the overall history of the
prosecution was recorded, and the District Court’s Judgment in a Criminal Case (1.G. Ex.
3), upon which the details of Petitioner’s sentence appear. While it is true, as Petitioner
asserts and the District Court’s records confirm (I.G. Ex. 5, at 11), that an appeal of the
conviction is pending, section 1128(i)(1) of the Act directly addresses the matter by
including in its definition of conviction cases “when a judgment of conviction has been
entered against the individual .. . by a Federal . . . court, regardless of whether there is an
appeal pending... .”

The second essential element, the relation of Petitioner’s criminal conviction to the
delivery of items or services under the Medicare program, appears in detailed recitations
throughout I.G. Ex. 4. Those recitations explicitly and in punctilious detail describe how
Petitioner billed Medicare for mental-health services neither she nor DNMA provided as
described, by the use of false professional credentials, false provider identification
numbers, and stolen patient-identity data including patients’ birth-dates, Social Security
numbers, and Medicare numbers. The submission of false claims to the Medicare and
Medicaid programs has been consistently held to be a program-related crime within the
reach of section 1128(a)(1). Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom.
Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990); Julius Williams, I, DAB
CR1464 (2006); Kennard C. Kobrin, DAB CR1213 (2004); Norman Imperial, DAB
CR833 (2001); Egbert Aung Kyang Tan, M.D., DAB CR798 (2001); Lorna Fay Gardner,
DAB CR648, aff'd DAB No. 1733 (2000); Mark Zweig, M.D., DAB CR563 (1999); Alan
J. Chernick, D.D.S., DAB CR434 (1996). The required nexus and common-sense
connection between the crimes of which Petitioner was convicted and the Medicare
program is present here as a matter of fact. Berton Siegel, D.O., DAB No. 1467 (1994).

The basis of Petitioner’s resistance to the proposed exclusion is not always well-
organized or articulated clearly, but the heart of it is that she protests her innocence of
crime and denies the truth of the charges, the correctness of the verdict, and the validity of
7

the judgment of conviction in the United States District Court. Her reasons and
arguments provide no support for her position in this forum. Any form of collateral
attack on predicate convictions in exclusion proceedings is precluded by regulation at 42
C.F.R. § 1001.2007(d), and that preclusion has been affirmed repeatedly by the
Departmental Appeals Board (Board). Lyle Kai, R.Ph., DAB No. 1979 (2005); Susan
Malady, R.N., DAB No. 1816 (2002); Dr. Frank R. Pennington, M.D., DAB No. 1786
(2001); Joann Fletcher Cash, DAB No. 1725 (2000); Paul R. Scollo, D.P.M., DAB No.
1498 (1994); Chander Kachoria, R.Ph., DAB No. 1380 (1993).

Petitioner appears here pro se. Because of that fact I have taken additional care in
reading her two briefs. In doing so, I have been guided by the Board’s reminders that pro
se litigants should be offered “some extra measure of consideration” in developing their
records and their cases. Louis Mathews, DAB No. 1574 (1996); Edward J. Petrus, Jr.,
M.D., et al, DAB No. 1264 (1991); see Mark K. Mileski, DAB No. 1945 (2004). I have
searched them for any arguments or contentions that might go beyond a collateral attack
on the District Court proceedings and raise a valid, relevant defense to the proposed
exclusion. That search has been unproductive. I have found nothing that could be so
construed.

Once a predicate conviction within the scope of section 1128(a) has been proven,
exclusion for the minimum period of five years is mandatory. Mark K. Mileski, DAB No.
1945; Salvacion Lee, M.D., DAB No. 1850 (2002); Lorna Fay Gardner, DAB No. 1733.
The period of exclusion may be enhanced to more than five years if the I.G. proves the
existence of certain aggravating factors listed at 42 C.F.R. § 1001.102(b)(1)-(9). In this
case the I.G. has asserted the presence of three aggravating factors.

The first aggravating factor on which the LG. relies is present when “[t]he acts resulting
in the conviction, or similar acts .. . caused .. . a financial loss to a Government program
... of $5,000 or more.” 42 C.F.R. § 1001.102(b)(1). Petitioner was ordered to pay
$278,507.05 in restitution to The Centers for Medicare and Medicaid Services as part of
her sentence. [.G. Ex. 3, at 5. The law of this forum supports reliance on this adjudicated
amount of restitution as prima facie proof of the amount of loss. Thomas D. Harris, DAB
No. 1881 (2003); Donald A. Burstein, Ph.D., DAB No. 1865 (2003). But here it is
unnecessary to rely on the amount of restitution as the only expression of the total loss
caused by Petitioner’s crimes, for the District Court’s Judgment in a Criminal Case sets
that amount out explicitly as the “Total Loss” in that case. That substantial and
uncontested sum satisfies the requirement of 42 C.F.R. § 1001.102(b)(1). The LG. has
established this first aggravating factor.
8

The second aggravating factor asserted by the I.G. is specified at 42 C.F.R.

§ 1001.102(b)(2). That factor is present if “[t]he acts that resulted in the conviction, or
similar acts, were committed over a period of one year or more.” The Indictment on
which Petitioner stood trial and was convicted precisely as charged demonstrates the
factor. The first lines of Paragraph 14 of that Indictment read: “From on or about July
10, 1997 to on or about June 14, 2002, defendant DEBORAH MORRIS knowingly and
willfully executed, or attempted to execute, a scheme or artifice to defraud the Medicaid
program...” I.G. Ex. 4, at3. The earliest false claim Petitioner submitted in execution
of her scheme was dated February 6, 2001, and the latest was dated February 18, 2002.
LG. Ex. 4, at 9-10. The Indictment’s final count charged that as part of her scheme,
Petitioner testified falsely at her Medicare Enrollment hearing on June 14, 2002. LG. Ex.
4, at 16. Petitioner’s conviction as charged is sufficient to demonstrate the 59-month span
of her crimes. The I.G. has established this second aggravating factor.

The third aggravating factor relied on by the I.G. is specified at 42 C.F.R.

§ 1001.102(b)(5). The LG. alleges that Petitioner’s sentence included incarceration. The
court records are plain that Petitioner was sentenced to a prison term of 60 months. I.G.
Ex. 3, at 2. She is serving it now. The LG. has established this third aggravating factor.

Petitioner has made no attempt explicitly to assert the existence of any of the mitigating
factors. Without disregard of the rule that assigns to her the burden of proving any
mitigating factor by a preponderance of the evidence, I have extended that “extra measure
of consideration” to searching everything submitted in this case for any suggestion that
one or more of those mitigating factors might be brought into consideration. That search
has revealed nothing that suggests any claim in mitigation. Since Petitioner was
convicted of 49 felonies, 42 C.F.R. § 1001.102(c)(1) does not apply. Petitioner does not
argue that her conduct in connection with the events in the criminal case was affected by
a mental, emotional, or physical condition that led to her reduced culpability at the time of
those events. No entries based on 18 U.S.C. §§ 4241 or 4242 appear in the District
Court’s Criminal Docket, nor does any notice related to FED. R. CRIM. P. 12.2. I.G. Ex.
5. Thus, 42 C.F.R. § 1001.102(c)(2) cannot be brought into consideration. And there is
nothing in this evidence that points to her productive cooperation with official
investigations of health care fraud, thereby invoking the mitigating factors set out at 42
C.F.R. § 1001.102(c)(3).

The I.G.’s discretion in weighing the importance of aggravating and mitigating factors in
exclusion cases commands great deference when reviewed by Administrative Law Judges
(ALJs). Jeremy Robinson, DAB No. 1905 (2004); Keith Michael Everman, D.C., DAB
No. 1880 (2003); Stacy Ann Battle, D.D.S., et al., DAB No. 1843 (2002). That deference
requires that the ALJ not substitute her or his own view of what period of exclusion might
be suitable in any given case for the view of the I.G. on the same evidence. In general,
9

the Board has insisted that ALJs may reduce an exclusionary period only when they

discover some significant evidentiary failing in the aggravating factors upon which the
LG. relied, or when they discover evidence reliably establishing a mitigating factor not
considered by the I.G. in setting the enhanced period. Jeremy Robinson, DAB No. 1905.

Where, as here, all of the aggravating factors on which the I.G. relied are present an
there are no mitigating factors, a holding that the exclusion period chosen by the I.G. was
unreasonable could be reached only through a substitution of views that the doctrine of
deference forbids. The only question now before me is whether the exclusion period is
within a reasonable range. In the instant case, the proposed 15-year period is
commensurate with the range established as reasonable in Russell Mark Posner, DAB No.
2033 (2006); Stacey R. Gale, DAB No. 1941 (2004); Jeremy Robinson, DAB No. 1905;
Thomas D. Harris, DAB No. 1881; Fereydoon Abir, M.D., DAB No. 1764 (2001); Joann
Fletcher Cash, DAB No. 1725; Lawrence J. White, D.D.S., DAB CR1584 (2007);
Russell J. Ellicott, D.P.M., DAB CR1552 (2007); and Stanley Junious Benn, DAB
CR1501 (2006).

Resolution of a case by summary disposition is appropriate when there are no disputed
issues of material fact and when the undisputed facts, clear and not subject to conflicting
interpretation, demonstrate that one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096; Thelma Walley, DAB No. 1367. Summary
disposition is authorized by the terms of 42 C.F.R. § 1005.4(b)(12). This forum looks to
FED. R. CIV. P. 56 for guidance in applying that regulation. Robert C. Greenwood, DAB
No. 1423 (1993). The material facts in this case are undisputed, clear, and unambiguous.
They support summary disposition as a matter of law. This Decision issues accordingly.

VI. Conclusion

For the reasons set out above, the I.G.’s Motion for Summary Affirmance should be, and
itis, GRANTED. The I.G.’s exclusion of Petitioner Deborah Morris from participation in
Medicare, Medicaid, and all other federal health care programs for a period of 15 years,
pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), is
thereby affirmed.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)

Social Security Administration, ) Date: December 29, 2008
Office of the Inspector General, )
)

-V.- ) Docket No. C-09-31
) Decision No. CR1876

Natkita Lester, )
)
Respondent. )
)

DECISION

The Office of the Inspector General for Social Security (SSA-OIG or I.G.) charges that
Respondent, Natkita Lester, made false statements and/or misrepresentations of material
fact when she requested to be selected as the representative payee for her minor child
niece. For this reason the I.G. proposed to impose a civil money penalty (CMP) against
Respondent Lester, and told her so in a notice letter which was personally served on her
on May 19, 2008 by an SSA-OIG Special Agent. Respondent Lester appealed. The I.G.
asks that her appeal be dismissed as untimely. For the reasons set forth below, I grant the
I.G.’s motion and dismiss this case.

I. Background

On April 27, 2007, the Respondent received and signed for a certified initial letter from
SSA-OIG, informing her that it was considering commencing a civil action against her
under section 1129 of the Social Security Act (Act), 42 U.S.C. § 1320a-8. The letter
stated that any action would be based on SSA-OIG’s belief that Respondent, in her
application to be named representative payee for child beneficiary Zikeya Lester, had
made false statements and/or misrepresentations to SSA regarding the child’s living
arrangements, in order to receive Supplemental Security Insurance (SSI) benefits to
which she was not entitled. The letter invited Respondent to respond with any relevant
information, and it included a financial disclosure form for her to complete if she wished
to do so. Finally, the letter served as an invitation to enter into settlement negotiations.
2

Respondent never sent any information or documents to SSA, and did not complete and
return the financial disclosure form she was provided. Further, SSA is in possession of a
photocopy of the SSI benefit check, which was endorsed and cashed by the Respondent.

Because SSA counsel was unsuccessful in contacting Respondent, she requested
assistance from the SSA-OIG’s Office of Investigations. On May 19, 2008, Special
Agent Steven Blawski of SSA-OIG’s Office of Investigations personally served a civil
monetary penalty demand letter on Respondent Lester in Utica, New York. The letter
informed Respondent that SSA-OIG was proposing a CMP against her under section
1129 of the Social Security Act, 42 U.S.C. § 1320a-8. The letter stated that any penalties
would be based on SSA’s determination that, when requesting to be selected as
representative payee for a child beneficiary of SSI named Zikeya Lester in September
2006, Respondent made a material false statement to SSA regarding Zikeya’s living
arrangements. In addition, in October 2006, Ms. Lester, acting in her capacity as
representative payee for Zikeya, received and cashed an SSI benefit check intended for
the use and benefit of the child, to which the Respondent was not entitled. SSA further
stated that Respondent knowingly and intentionally made these false statements to SSA in
an effort to improperly receive SSI benefits. A Certificate of Service dated May 19,
2008, submitted by Special Agent Blawski and signed by the Respondent Lester
demonstrates Respondent’s receipt of this demand letter.

The demand letter served on Respondent Lester proposed penalties in accordance with
20 C.F.R. § 498.100 et seq. The letter served as notice of a proposed administrative
action against Respondent Lester under section 1129, in the form of a CMP - including
both a penalty and an assessment based on the overpayment -- in the amount of
$11,500.00. The letter clearly explained the reasons for the proposed penalty, discussed
and outlined the required factors that went into the determination of the penalty amount,
and notified Respondent of all applicable due process rights. Petitioner also attached for
Respondent Lester’s information a printed copy of the entire Part 498 of Title 20 of the
U.S. Code of Federal Regulations, which includes the procedures for requesting a
hearing. The demand/penalty letter also specifically stated:

If you wish to contest this proposed civil monetary penalty, you have the
right to a hearing before an Administrative Law Judge in accordance with
20 C.F.R. §§ 498.109 and 498.202. If you desire such a hearing, you must
file a written request within 60 days of the date of receipt of this letter.
Such a request must be accompanied by an answer to this letter that admits
or denies your liability and states any defense upon which you intend to rely
pursuant to 20 C.F.R. § 498.202.

The 60-day time period in which Respondent was required by law to request a hearing
expired on July 18, 2008.
3

SSA maintains that it subsequently sent a certified letter to the Respondent on August 1,
2008, in which Petitioner informed Respondent that pursuant to the requirement
articulated in 20 C.F.R. § 498.110, SSA was imposing against her the CMP referenced in
the demand/penalty letter, noting that no timely request for hearing had been filed.
Specifically, the letter explained that OIG’s records and the records of the Department of
Health and Human Services, Departmental Appeals Board (DAB) showed that no written
request for a hearing to contest the CMP was filed within 60 days of the date of receipt of
the demand/penalty notification letter.

On October 4, 2008, approximately two and one-half months (78 days) after the 60-day
time period had expired on July 18, 2008 — and 138 days after Respondent’s initial receipt
of the penalty letter on May 19, 2008 — the Civil Remedies Division of the DAB received
a request for hearing on this matter from the Respondent.

I conducted a prehearing conference with the parties by telephone on October 31, 2008. I
explained that Respondent Lester could be represented by counsel. Ms. Lester indicated
that she would represent herself in this matter. I issued an Order summarizing the results
of that conference. Counsel for SSA indicated that he would be filing a motion to dismiss
because the hearing request was not timely filed. I therefore set a briefing schedule and
indicated to the parties that I would consider the briefs and any supporting document in
making my decision. | also indicated to Respondent that under the applicable regulations
Iam required to dismiss an hearing request if it is not timely filed and if the respondent
fails to demonstrate good cause for the failure to file timely. I indicated as well that if I
determined that dismissal was warranted that I would dismiss the case.

SSA submitted its motion together with its brief in support with four attachments which I
will refer to as I.G. Exhibits (Exs.) 1 through 4; Respondent submitted a one-page
response; SSA submitted a reply. Respondent had the opportunity to submit a sur-reply
but did not do so.

If. Finding of Fact and Conclusion of Law

Respondent Lester has not established good cause for
untimely filing, and her hearing request must therefore be
dismissed.

In its demand/penalty letter, the I1.G. advised Respondent Lester that, pursuant to section
1129 of the Act, the I.G. proposed imposing against her a CMP of $11,500.00 because
she knowingly made false or misleading statements in documents related to her request to
be representative payee for her minor child niece. 1.G. Ex. 3. The letter advised
Respondent of her right to request a hearing before an Administrative Law Judge (ALJ),
and said that such a request had to be filed within 60 days of her receiving the letter. That
4

letter was personally served on Respondent and the I.G. has included the Certificate of
Service signed by the SSA-OIG Special Agent and by Respondent on May 19, 2008. I.G.
Ex. 4. The letter included a copy of the regulations governing these proceedings, and
emphasized:

If no hearing is requested within the 60-day period, the
proposed civil money penalty will be imposed upon you
and you will have no right to an administrative appeal
after that time.

LG. Ex. 3, at 3 (Emphasis added).

To be timely, Respondent Lester’s hearing request should have been filed on or before
July 18, 2008. No appeal was filed within that time. Respondent Lester requested a
hearing by letter dated October 4, 2008.

Respondent Lester does not dispute the untimeliness of her appeal, nor does she indicate
any reason for her failure to timely file her hearing request.

The regulations mandate that a hearing request be filed within 60 days after notice is
received by the respondent “or upon a showing of good cause,” within the time permitted
by the ALJ. 20 C.F.R. § 498.202(c)(2). The date of receipt is presumed to be five days
after the date of the notice, “unless there is a reasonable showing to the contrary.” 20
C.F.R. § 498.202(e). The ALJ must dismiss an untimely hearing request when the
respondent fails to demonstrate good cause. 20 C.F.R. § 498.202(f)(1).

Here, the demand/penalty letter was personally served on Respondent Lester. Thus, the
60 days began to run beginning the day after personal service was made. Therefore, the
hearing request was required to be postmarked no later than July 18, 2008. Moreover,
Respondent Lester did not even attempt to make a showing of good cause as to why her
hearing request was filed so long after the 60-day filing period.

While the regulations do not define “good cause” but leave that determination to the
discretion of the ALJ, there must be at least some showing made by the Respondent as to
why her filing was late. Looking to regulations governing certain Social Security benefit
appeals — 20 C.F.R. § 404.911; 20 C.F.R. § 404.933(c) — for guidance, many ALJs have
ruled that “good cause” means circumstances beyond a party’s ability to control. See,
e.g., Hillcrest Healthcare, L.L.C., DAB CR976 (2002), aff'd DAB No. 1879 (2003); see
also SSA v. Parham, DAB CR1600 (2007), and cases cited therein. Under those
regulations, to determine whether good cause exists, the ALJ considers 1) the
circumstances that kept Respondent from making the request on time; 2) whether any
SSA action misled him; 3) whether Respondent understood the requirements for filing;
5

and 4) whether Respondent had any physical, mental, educational, or linguistic limitation
that prevented him/her from filing a timely request, or from understanding or knowing

about the need to file a timely request for review. 20 C.F.R. § 404.911.

Here Respondent Lester made no attempt to explain why she was unal

capable of filing timely. She does not claim that she misunderstood th
ndeed, SSA’s notice to her left no room for misunderstanding. It sai
within 60 days of “the date of receipt of this letter,” and warned that s
earing right if she failed to file the request within the 60-day period.

therefore find no good cause for extending Respondent’s time to app
this appeal pursuant to 20 C.F.R. § 498.202(f)(1).

/s/
Alfonso J. Montano
Administrative Law Judge

le to file her

earing request timely. Thus, there is no basis for me here to even consider whether there
was good cause for her filing her hearing request 78 days after the deadline. She has not
claimed that meeting the filing deadline was beyond her control; she was perfectly

e filing deadline.
that she must file
e would lose her
LG. Ex. 3.

eal, and dismiss


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Chelsea Place Care Center, LLC, ) Date: December 11, 2008

(CCN: 07-5299), )
)
Petitioner, )
)

-Ve- ) Docket No. C-08-704

) Decision No. CR1873
Centers for Medicare & Medicaid )
Services. )
a )

DECISION

I dismiss the hearing request of Petitioner, Chelsea Place Care Center, because it has no
right to a hearing.

I. Background

Petitioner is a skilled nursing facility located in Hartford, Connecticut. It participates in
the Medicare and Medicaid programs. Its participation in Medicare and Medicaid is
governed by sections 1866, 1819 and 1919 of the Social Security Act and by
implementing regulations at 42 C.F.R. Parts 483 and 488. Also, its right to a hearing in
this case is governed by regulations at 42 C.F.R. Part 498.

On May 8, 2008, Petitioner was surveyed for compliance with Medicare participation
requirements. Based on the results of that survey, the Centers for Medicare & Medicaid
Services (CMS) determined that Petitioner no longer met participation requirements. By
letter dated July 1, 2008, Medicare informed Petitioner that it had determined to impose
remedies against Petitioner consisting of a civil money penalty, a denial of payment for
new admissions, the termination of Petitioner’s Medicare provider agreement, and the
loss of Petitioner’s approval to conduct a nurse aide training and nurse aide competency
evaluation program (NATCEP) for two years.
Petitioner requested a hearing to challenge the deficiency findings on August 29, 2008
and the case was assigned to me for a hearing and a decision on September 4, 2008.

By letter dated September 12, 2008, CMS notified Petitioner that it was not imposing the
proposed enforcement remedies because the deficiencies identified during the May 8,
2008 survey had been corrected. Further, although the loss of NATCEP was imposed, it
was not based on a finding of substandard quality of care.

On October 28, 2008, CMS moved to dismiss Petitioner’s hearing request. CMS
submitted four exhibits with its motion. Petitioner submitted a response on November 19,
2008. Petitioner submitted three exhibits with its response. In the absence of objection, I
admit CMS’s Exhibits (CMS Exs.) 1-4 and Petitioner’s Exhibits (P. Ex.) 1-3 into the
record.

II. Discussion

The hearing rights of a long-term care facility are established by federal regulations at 42
C.F.R. Part 498. A provider dissatisfied with CMS’s initial determination is entitled to
further review, but administrative actions that are not initial determinations are not
subject to appeal. 42 C.F.R. § 498.3(d). The regulations specify which actions are
“initial determinations” and set forth examples of actions that are not. A finding of
noncompliance that results in the imposition of a remedy specified in 42 C.F.R. § 488.406
is an initial determination for which a facility may request a hearing before an
administrative law judge. 42 C.F.R. § 498.3(b)(13). Unless the finding of
noncompliance results in the imposition of a specified remedy, the finding is not an initial
determination. 42 C.F.R. § 498.3(d)(10)(ii).

In the matter before me, CMS did not impose any remedy which constitutes an “initial
determination” under the regulations. Petitioner no longer has a right to hearing because
the determination that is subject to a hearing no longer exists. Schowalter Villa, DAB No.
1688 (1999); Arcadia Acres, DAB No. 1607 (1997); Rafael Convalescent Hospital, DAB
No. 1616 (1997).

Petitioner recognizes that where there is no initial determination under the regulations in
the “usual case” a hearing request should be dismissed. Petitioner’s response at 4.
Petitioner asserts, however, that a special circumstance exists in this case and that I
should either deny this motion or decline to rule on the motion pending Petitioner’s
resolution of its status as a Special Focus Facility (SFF). Petitioner asserts that as a SFF it
will be terminated after three surveys if it does not significantly improve; i.e., that it have
no deficiencies greater than an “E” scope and severity during a survey. As CMS found a
3

deficiency at a “G” scope and severity level during the survey in this case, dismissal of its
hearing request will mean Petitioner will have been denied the opportunity for a hearing
on noncompliance which could lead to termination after three surveys. While I
understand Petitioner’s concern, my authority to hear a case is limited by regulation.
Under the pertinent regulations, Petitioner no longer has a right to a hearing.

Ill. Conclusion

I must dismiss a hearing request where the requesting party has no legal right to a
hearing. 42 C.F.R. § 498.70(b). Petitioner no longer has a right to a hearing in this case
because there is no CMS initial determination subject to my review. Consequently, I
dismiss Petitioner’s hearing request.

/s/
Alfonso J. Montafio
Administrative Law Judge