DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board

Civil Remedies Division

In the Case of:

Nov 2, 1989

Walter J. Mikolinski, Jr., DATE:

Petitioner,
-~ Vem Docket No. C-83

The Inspector General. DECISION CR 52

DECISION NOT TO REVISE REOPENED DECISION

The Inspector General (the I.G.) petitioned to reopen and
revise my decision in this case. I reopened my decision
to consider the issues raised by the I.G. in his
petition. Both parties have submitted briefs. Based on
the arguments of the parties and on the applicable law, I
conclude that the I.G. has offered neither argument nor
new and relevant evidence which justifies revising my
decision in this case. Therefore, I decline to revise my
decision.

BACKGROUND

On December 9, 1988, the I.G. notified Petitioner that he
was being excluded from participating in Medicare and
State health care programs.’ The exclusion was based on
the suspension by the State of Massachusetts of
Petitioner's license to practice pharmacy. Petitioner
was advised by the I.G. that he would be excluded until

‘’ “state health care program" is defined by section

1128(h) of the Social Security Act to include any State
Plan approved under Title XIX of the Act (such as
Medicaid). I use the term "Medicaid" hereafter to
represent all State health care programs from which
Petitioner was excluded.
he regained his pharmacy license. Petitioner requested a
hearing. The parties agreed that the case could be
decided based on a stipulated record and on motions for
summary disposition. The parties filed stipulations and
briefs supporting their positions, and I conducted oral
argument. On August 8, 1989, I issued a decision in this
case.

I held that the I.G. had authority to impose and direct
an exclusion against Petitioner, pursuant to section
1128(b) (4) (A) of the Social Security Act. This
conclusion was based on my finding that Petitioner's
pharmacy license had been suspended by the Massachusetts
Board of Registration in Pharmacy (Pharmacy Board) for
reasons bearing on Petitioner's professional competence,
professional performance, or financial integrity.

I found that the length of the exclusion imposed and
directed against Petitioner by the I.G. was reasonable
insofar as it applied to Petitioner's participation as a
pharmacist in Medicare and Medicaid. However, I
concluded that the length of the exclusion was not
reasonable insofar as it applied to Petitioner's
participation in Medicare and Medicaid as a nursing home
operator, administrator, or employee.

This conclusion was premised on my finding that the
exclusion imposed and directed by the I.G. conditioned
Petitioner's eligibility for reinstatement as a
participant in Medicare and Medicaid on his regaining his
pharmacy license in Massachusetts. The terms of
Petitioner's license suspension conditioned restoration
of the license on Petitioner completing certain
continuing education courses and on his taking and
passing a pharmacy law examination with a grade of no
less than 75 percent. I concluded that these conditions
effectively made Petitioner's exclusion indefinite in
duration. While the conditions were reasonably related
to Petitioner's trustworthiness to render services as a
pharmacist, they bore no rational relationship to
Petitioner's trustworthiness to participate in Medicare
and Medicaid as a nursing home operator, administrator or
employee.

Therefore, I sustained the exclusion insofar as it
applied to Petitioner's participation in Medicare and
Medicaid as a pharmacist. I modified the exclusion
insofar as it applied to Petitioner's participation in
Medicare and Medicaid as a nursing home operator,
-3-

administrator, or employee to exclude Petitioner from
participating in that capacity for a two year period.

ANALYSIS

The I.G. now asserts that my decision is incorrect in two
respects and urges that I revise my decision accordingly.
First, the I.G. argues that, by law, exclusions imposed
and directed pursuant to section 1128 of the Social
Security Act apply to any item or service rendered by an
excluded party for which that party seeks reimbursement.
Therefore, according to the I.G., any exclusion imposed
and directed against Petitioner must apply equally to his
participation as a nursing home operator, administrator,
or employee as it does to his participation as a
pharmacist. Second, the I.G. asserts that my finding
that the length of the exclusion originally imposed
against Petitioner is unreasonable, insofar as it applies
to his participation as a nursing home operator,
administrator or employee, is not supported by
substantial evidence, and is, therefore, incorrect.

The I.G. premises his first argument on the language of
section 1862(e)(1) of the Social Security Act. That
section provides in relevant part that:

No payment may be made under this title with
respect to any item or service (other than an
emergency item or service) furnished --

(A) by an individual or entity during the
period when such individual or entity is
excluded pursuant to section 1128, 1128A,
1156, or 1842(j)(2) from participation in
the program under this title; ....

The I.G. argues that when an individual or entity is
excluded pursuant to section 1128 of the Social Security
Act, section 1862(e)(1) operates to require that that
individual or entity be barred from reimbursement for any
item or service that he may provide to a Medicare
recipient or Medicaid beneficiary. Thus, according to
the I.G., exclusion of Petitioner based on suspension of
his pharmacy license would, by law, require that he not
be reimbursed for items or services rendered as a nursing
home operator, administrator, or employee. The I.G.
asserts that section 1862(e)(1) prohibits the Secretary
from tailoring exclusions to apply to reimbursement for
specific items or services.
-4-

I disagree with the I.G.'s "all or nothing" reading of
section 1862(e)(1). The plain language of section
1862(e)(1) is that it bars reimbursement for items or
services where reimbursement has been excluded pursuant
to section 1128, Thus, the law does nothing more than
direct the Secretary to adhere to the terms of exclusions
imposed pursuant to section 1128.

A broader reading of section 1862(e) (1) would be
inconsistent with the language and intent of section
1128. The exclusion law is remedial and is intended to
protect the integrity of federally funded health care
programs from parties who have demonstrated by their
actions that they cannot be trusted to deal with program
funds or to treat recipients and beneficiaries of those
funds. Exclusions imposed and directed pursuant to
section 1128 must be tailored to accomplish this remedial
objective, in order to avoid having a punitive effect
which would be inconsistent with legislative intent. If
section 1862(e)(1) were read as categorically as is urged
by the I.G., it would necessarily result in exclusions
that are not rationally related to the remedial
objectives of section 1128.

The I.G. premises his second argument on the contention
that the record does not substantiate my conclusion that
an indefinite exclusion is unreasonable insofar as it
applies to Petitioner's participation in Medicare and
Medicaid as a nursing home operator, administrator, or
employee. The I.G. concedes that there exists at least a
"theoretical or hypothetical possibility that
[Petitioner] may, for an indefinitely prolonged period of
time, (or may never) be able to satisfy" the conditions
for reinstatement of his pharmacy license. Therefore,
the I.G. admits that it is at least possible that
Petitioner may never qualify for reinstatement as a
nursing home operator, administrator, or employee under
the terms of the the exclusion the I.G. originally
imposed and directed. However, the I.G. contends that
the record does not substantiate my conclusion that the
exclusion imposed and directed against Petitioner was
‘inreasonable as it applied to his participation as a
aursing home operator, administrator, or employee, in the
absence of evidence showing a likelihood that this
possibility may eventuate.

My conclusion that the exclusion originally imposed and
directed against Petitioner by the I.G. was unreasonable
as it applied to Petitioner's participation as a nursing
home operator, administrator, or employee, was based on
my finding that the conditions for reinstatement of
Petitioner's pharmacy license bore no rational
relationship to his trustworthiness to provide nursing
home items or services. The likelihood that Petitioner
might satisfy these conditions did not enter into my
analysis. Evidence as to that likelihood is not
relevant.

Therefore, the I.G.'s argument misses the point of my
decision. An exclusion which is premised on conditions
which are not rationally related to the remedial purpose
of the exclusion law is not a reasonable exclusion,
irrespective of the likelihood that these conditions will
be satisfied.

2 at oral argument of the parties' motions for
summary disposition, counsel for the I.G. stated that the
I.G. had intended the exclusion imposed and directed
against Petitioner to be limited in duration to two
years. Tr. at 57. Counsel for the I.G. suggested to me
that the appropriate course for me to take should I
conclude that the exclusion be premised on satisfaction
of conditions which potentially indefinitely prolonged
the duration of the exclusion would be to modify the
exclusion to be limited to two years or reinstatement of
Petitioner's pharmacy license, whichever occurred first.
Id. Counsel for the I.G. has offered me no explanation
for his change of position to his present assertion that
an indefinite exclusion was intended and is not
necessarily unreasonable.
-6-

CONCLUSION
Having considered the arguments offered by the parties, I

conclude that there exists no basis to revise the
decision entered by me in this case on August 8, 1989.

/s/

Steven T. Kessel
Administrative Law Judge


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board

Civil Remedies Division

In the Case of:

Thomas M. Cook, DATE: October 27, 1989
Petitioner,
Docket No. C-106
-v-

DECISION CR 51
The Inspector General.

DECISION OF ADMINISTRATIVE LAW JUDGE
ON MOTION FOR SUMMARY DISPOSITION

On February 14, 1989, the Inspector General (the I.G.)
notified Petitioner that he was being excluded from
participation in Medicare and State health care
prograns.! The I.G. told Petitioner that he was being
excluded as a result of his conviction in a Texas court
of a criminal offense relating to the neglect or abuse of
patients in connection with the delivery of a health care
item or service. Petitioner was advised that the
exclusion of individuals convicted of such an offense is
mandated by section 1128(a)(2) of the Social Security
Act. The I.G. further advised Petitioner that the law
required that the minimum period of such an exclusion be
for not less than five years.

Petitioner timely requested a hearing as to the
exclusion, and the case was assigned to me for a hearing
and a decision. The I.G. moved for summary disposition
of the case, and Petitioner opposed the motion. I have
considered the parties' arguments, the undisputed
material facts, and the applicable law and regulations.

1 «state health care program" is defined by section

1128(h) of the Social Security Act to include any State
Plan approved under Title XIX of the Act (such as
Medicaid). I use the term "Medicaid" hereafter to
represent all State health care programs from which
Petitioner was excluded.
2

I conclude that the exclusions imposed and directed by
the I.G. are mandated by section 1128(a) (2) of the Social
Security Act. Therefore, I am deciding this case in
favor of the I.G.

ISSUE

The issue in this case is whether Petitioner was
convicted of a criminal offense relating to neglect or
abuse of patients in connection with the delivery of a
health care item or service, within the meaning of
section 1128(a)(2) of the Social Security Act.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. On February 8, 1988, Petitioner was charged under
Texas law with committing a criminal offense of
intentionally or recklessly engaging in conduct that
caused injury to an elderly individual. I.G. Ex. 1.

2. Petitioner was accused of causing injury to a nursing
home patient. I.G. Ex. 1.

3. Petitioner was an administrator of the nursing home
in which the allegedly injured party resided. I1.G. Ex.
1; P.'s Brief at 2.

2 The parties' exhibits and memoranda will be

referred to as follows:

I.G.'s Exhibit I.G. Exhibit (number)
Brief in Support of Motion I.G.'s Brief at (page)
for Summary Disposition
Response to Government's P.'s Brief at (page)
Motion for Summary
Disposition
Reply Brief to Petitioner's I.G.'s Reply Brief at
Response to Government's (page)
Motion for Summary
Disposition
Petitioner's Supplemental P.'s Supplemental
Brief Brief at (page)
Supplemental Brief in I.G.'s Supplemental
Support of Motion for Brief at (page)

Summary Disposition
4. The incident which led to criminal charges being
filed against Petitioner occurred in the course of
Petitioner's administrative duties and involved a nursing
home patient. I.G. Ex. 1; P.'s Brief at 2-3.

5. On July 13, 1988, Petitioner pleaded guilty ina
Texas court to the criminal offense of reckless conduct.
I.G. Ex. 2.

6. Petitioner's guilty plea was made in lieu of a trial
of the criminal charges against Petitioner. I.G. Ex. 2.

7. The Texas court found Petitioner guilty of reckless
conduct and entered a final judgment against him. I.G.
Ex. 2.

8. Petitioner was convicted of a criminal offense
relating to neglect or abuse of patients in connection
with the delivery of a health care item or service.
Findings 1-6.

9. Petitioner was convicted of a criminal offense within
the meaning of section 1128(a)(2) of the Social Security
Act. Findings 1-7; Social Security Act, section

1128 (a) (2).

10. Petitioner was convicted of a criminal offense as
defined by section 1128(i) of the Social Security Act.
Finding 7; Social Security Act, section 1128(i).

11. The Secretary of Health and Human Services (the
Secretary) delegated to the I.G. the authority to
determine, impose, and direct exclusions pursuant to
section 1128 of the Social Security Act. 48 Fed. Reg.
21662 (May 13, 1983).

12. On February 14, 1989, the I.G. excluded Petitioner
from participating in the Medicare program and directed
that he be excluded from participating in Medicaid,
pursuant to section 1128(a) (2) of the Social Security
Act.

13. The exclusion imposed and directed against
Petitioner by the I.G. was for five years, the minimum
period required by law for exclusions imposed and
directed pursuant to section 1128(a)(2) of the Social
Security Act. Social Security Act, section

1128 (c) (3) (B).
4

14. The exclusion imposed and directed against
Petitioner by the I.G. is mandated by law. Finding 7;
Social Security Act, sections 1128(a) (2); 1128(c) (3) (B).

ANALYSIS

Petitioner pleaded guilty in a Texas court to the
criminal offense of reckless conduct. The I.G. excluded
Petitioner from participating in Medicare and directed
that Petitioner be excluded from participating in
Medicaid, pursuant to section 1128(a)(2) of the Social
Security Act. This section mandates the exclusion from
participating in Medicare and Medicaid of individuals who
are:

(C)onvicted, 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.

Neither party to this case disagrees that Petitioner was
convicted of a criminal offense within the meaning of
section 1128. The undisputed facts establish that
Petitioner entered a guilty plea to a criminal offense,
and the Court accepted Petitioner's plea and entered a
judgment of guilty. The exclusion law defines the term
"convicted of a criminal offense" to include those
circumstances in which a judgment of conviction has been
entered against an individual by a federal, state, or
local court. Social Security Act, section 1128(i) (1).

The statute of which Petitioner was convicted does not
specifically refer to neglect or abuse. Petitioner was
convicted of the offense of reckless conduct. I conclude
that Petitioner was convicted of an offense relating to
"neglect" of another individual, as that term is used in
section 1128(a) (2) of the Social Security Act.

The terms "neglect" and "abuse" are not defined in
section 1128(a)(2). In the absence of a definition, they
should be given their common and ordinary meaning.

"Neglect" is defined in Webster's Third New International
Dictionary, 1976 Edition as "1: to give little or no
attention or respect to:. . . 2: to carelessly omit doing
(something that should be done) either altogether or
almost altogether... ." "Abuse" is defined as "4: to
use or treat so as to injure, hurt, or damage; MALTREAT .
- + ." I conclude from these common definitions that
Congress intended the statutory term "neglect" to include
failure by a party to satisfy a duty of care to another
5

person. "Abuse" is intended to include those situations
where a party willfully mistreats another person.

Petitioner was convicted of violating section 22.05 of
the Texas Penal Code, which provides in relevant part
that:

(a) A person commits an offense if he
recklessly engages in conduct that places
another in imminent danger of serious bodily
injury.

I conclude that reckless conduct that places another in
imminent danger of serious bodily harm falls within the
common definition of "neglect." Therefore, a conviction
under section 22.05 of the Texas Penal Code is plainly a
conviction related to "neglect" within the meaning of
section 1128(a) (2).

Thus, Petitioner's guilty plea and the statute under
which Petitioner was convicted establish that he was
convicted of an offense relating to neglect of another.
However, it is not clear from Petitioner's guilty plea or
from the statute under which Petitioner was convicted
whether the offense related to patient neglect or abuse

connection wi t eliv £ 2. i
service. That raises the issue of whether there is
relevant evidence concerning the facts upon which
Petitioner's conviction was predicated to determine if
Petitioner was convicted of an offense related to patient
neglect or abuse. [I conclude that it is consistent with
Congressional intent to admit limited evidence to
establish whether the individual who was the subject of
the offense for which Petitioner was convicted is a
"patient," and to determine whether the incident which
led to Petitioner's conviction was "in connection with
the delivery of a health care item or service."

A primary purpose of the exclusion law is to provide a
remedy to protect Medicare beneficiaries and Medicaid
recipients from individuals who have demonstrated by
their actions that they are not trustworthy to render
services. The purpose is not to create additional
penalties for state criminal convictions, but, rather, to
protect federal programs and recipients and beneficiaries
of those programs. Congress made a legislative
determination that parties convicted of criminal offenses
relating to neglect or abuse of patients in connection
with the delivery of a health care item or service were
untrustworthy, and it mandated the exclusion of such
parties.

6

Congress could have conditioned imposition of the
exclusion remedy on conviction of criminal offenses
consisting of patient neglect or abuse. Had it used the
term "of" instead of the term "relating to" in section
1128(a) (2), that intent would have been apparent.
However, Congress plainly intended that the exclusion
apply to a broader array of circumstances. It mandated
that the Secretary exclude parties who are convicted of
criminal offenses "relating to" patient neglect or abuse
in connection with the delivery of a health care item or
service.

It is consistent with Congressional intent to admit
evidence which explains the circumstances of the offense
of which a party is convicted. In this case, the only
extrinsic evidence that is necessary to establish whether
Petitioner was convicted of an offense within the meaning
of section 1128(a)(2) is evidence establishing the
identity of the person Petitioner was convicted of
endangering and Petitioner's relationship to that
individual.

The undisputed material facts of this case establish that
Petitioner was a nursing home administrator, that the
incident that resulted in Petitioner's guilty plea
occurred in the course of Petitioner's administrative
duties, and that the incident involved a nursing home
patient. Findings 2-4. These undisputed facts therefore
establish all that is necessary to conclude that
Petitioner was convicted of a criminal offense relating
to neglect of a patient in connection with the delivery
of a health care item or service, satisfying the
requirements of section 1128(a)(2). Therefore, I
conclude that the I.G. was required to impose and direct
an exclusion against Petitioner pursuant to section
1128(a)(2) of the Social Security Act.

3 This is not to suggest that evidence should be

admitted to establish whether Petitioner is guilty of the
offense to which he pleaded. The event which triggers
the Secretary's duty to impose and direct exclusions is
an individual's conviction of an offense related to
patient neglect or abuse. The term "conviction" is
defined in section 1128(i) to include circumstances where
parties enter guilty pleas, even if they do not admit
guilt or the court makes no finding of guilt. See Carlos
E. Zamora, M.D. v. The Inspector Genera], Civil Remedies
Docket No. C-74 (1989), appeal docketed, DAB No. 89-100,
Decision No. 1104 (1989).
7
CONCLUSION

Based on the undisputed material facts and the law, I
conclude that the I.G.'s exclusion was mandated by law.
Therefore, I am entering a decision in favor of the I.G.
in this case. The five-year exclusion imposed and
directed against Petitioner is sustained.

/s/

Steven T. Kessel
Administrative Law Judge


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board

Civil Remedies Division

In the Case of:

Mary Katherine Lyons, DATE: October 13, 1989
Petitioner,

- veo Docket No. C-49

The Inspector General. DECISION CR 49

DECISION AND ORDER

In this case, governed by section 1128 of the Social
Security Act (Act), Petitioner filed a timely request for
a hearing before an Administrative Law Judge (ALJ) to
contest the July 11, 1988 notice of determination
(Notice) issued by the Inspector General (I.G.) which
excluded Petitioner from participating, in the Medicare
and Medicaid programs for seven years.!

Based on the entire record before me, I conclude that
there are no material facts at issue, that Petitioner is
subject to the minimum mandatory exclusion provisions of
sections 1128 (a) (1) and 1128 (c) (3) (B) of the Act,
and that it is appropriate for Petitioner to be excluded
for a period of Seven years.

' Section 1128 of the Act provides for the

exclusion of individuals and entities from the Medicare
program (Title XVIII of the Act) and requires the I.G. to
direct States to exclude those same individuals and
entities for the same period of time from “any State
health care program" as defined in section 1128(h). The
Medicaid program (Title XIX of the Act) is one of three
types of State health care programs defined in Section
1128(h) and, for the sake of brevity, I refer only to it.
2
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.

Section 1128 of the Social Security Act (Act) is codified
at 42 U.S.C. 1320a-7 (West U.S.C.A., 1989 Supp.).

Section 1128(a) (1) of the Act provides for the exclusion
from Medicare and Medicaid of those individuals or
entities "convicted" of a criminal offense “related to"
the delivery of an item or service under the Medicare or
Medicaid programs. Section 1128(c)(3)(B) provides for a
five year minimum period of exclusion for those excluded
under section 1128 (a)(1).

While section 1128(a) of the Act provides for a minimum
five-year mandatory exclusion for (1) convictions of
program-related crimes and (2) convictions relating to
patient abuse, section 1128(b) of the Act provides for
the permissive exclusion of "individuals and entities"
for twelve types of other convictions, infractions, or
undesirable behavior, such as convictions relating to
fraud, license revocation, or failure to supply payment
information.

II. The Federa tions.

The governing federal regulations (Regulations) are
codified in 42 C.F.R., Parts 498, 1001, and 1002 (1988).
Part 498 governs the procedural aspects of this exclusion
case; Parts 1001 and 1002 govern the substantive aspects.

Section 1001.123 requires the I.G. to issue an exclusion
notice to an individual whenever the I.G. has "conclusive
information" that such individual has been "convicted" of
a criminal offense "related to" the delivery of a
Medicare or Medicaid item or service; such, exclusion must
begin 15 days from the date on the notice.

2 The I.G.'s notice letter allows an additional
five days for receipt by mail.
3

BACKGROUND *

Shortly after the I.G. issued the Notice in this case and
Petitioner requested a hearing before an ALJ, a
prehearing conference was held by telephone. After the
prehearing conference, the parties agreed that two legal
issues should be decided prior to any evidentiary hearing
in this case. The parties submitted briefs and
documentary evidence in support of their respective
positions concerning summary disposition. Neither party
objected to any of the proposed exhibits of the other.

On April 3, 1989, I issued a Ruling, wherein I concluded
(1) that Petitioner was "convicted," (2) that the offense
to which Petitioner pled guilty and was convicted was
"related to the delivery of an item or service" under
Medicare within the meaning of section 1128(a)(1) of the
Act and (3) that the I.G. was required to exclude
Petitioner from Medicare and Medicaid for at least five
years under the minimum mandatory provisions of section
1128. I then scheduled a hearing on the issue of the
appropriate length of exclusion.

The hearing was set for July 27, 1989. However, at a
prehearing telephone conference on July 19, 1989,
Petitioner withdrew her request for an evidentiary
hearing and the parties agreed to submit the case for
decision on briefs. Thereafter, they each filed a brief,
Petitioner filed additional exhibits, and the record was
closed.

3 The citations in this Ruling are as follows:
Petitioner's Memorandum in P. Memo. (page)

Support of Motion for

Partial Summary Judgment
Petitioner's Brief P. Br. (page)
Petitioner's Exhibits P. Ex. (letter) / (page)
Transcript of Arraignment Tr. (page)

in Court of Common Pleas,

Franklin, Ohio
I.G.'s Response to P. Memo I.G. Resp. (page)
I.G.'s Brief I.G. Br. (page)

I.G.'s Exhibits I.G. Ex. (number) / (page)
4

ISSUE

1. Whether it is appropriate in this case for Petitioner
to be excluded from the Medicare and Medicaid programs
for a period of seven years.

FINDINGS OF FACT AND CONCLUSIONS OF LAW *

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

1. Petitioner was employed as a data processing person or
claims examiner in the claims department for Nationwide
Insurance Co., the Medicare carrier in the State of Ohio
for the Department of Health and Human Services (DHHS)
during the period from 1982 through 1987.

2. Nationwide processed and paid Medicare claims for DHHS
during the period 1982 to 1987.

3. Petitioner used her computer to order approximately
$30,568.04 in checks for Medicare reimbursement by
billing the Medicare system for fraudulent claims. I.G.
Ex. 12; P. Br. 1,2; Tr. 30.

4. Petitioner caused Medicare checks to be issued to her
father-in-law and brother-in-law and delivered to her
sister's address. Her sister cashed the checks and split
the proceeds with Petitioner. Tr. 30; I.G. Ex. 12/2,3.

5. A field audit revealed Petitioner's wrongful actions.
Investigators approached Petitioner and she gave a
statement to the auditors and to the police. P. Br. 1,2.

6. Subsequently, Petitioner was charged by way of a bill
of information with six counts of theft and forgery.
I.G. Ex. 1; Tr. 5.

7. Petitioner pled guilty, on September 14, 1987, to two
counts of theft and four counts of forgery. I.G. Ex. 3;
Tr. 1 to 37.

4 Any part of this Decision and Order preceding the

Findings of Fact and Conclusions of law which is
obviously a finding of fact or conclusion of law is
incorporated herein.
5

8. At the time of the entry of the guilty pleas, the
court sentenced Petitioner to a term of imprisonment.
Tr. 36; P. Br. 1,2.

9. Petitioner was convicted of a criminal offense
"related to the delivery of an item or service" under the
Medicare program within the meaning of section 1128(a) (1)
of the Act.

10. The I.G. properly excluded Petitioner from
participation in Medicare, and properly directed her
exclusion from Medicaid for a period of at least five
years, pursuant to the minimum mandatory exclusion
provisions of section 1128 of the Act..

11. Based on the facts in the record in this case, I find
and conclude that Petitioner should be excluded for a
period of seven years.

12. The material and relevant facts in this case are not
contested.

13. The classification of the Petitioner's criminal
offense as subject to the authority of 1128(a)(1) is a
legal issue.

14. The I.G. is entitled to summary disposition in this
proceeding.

DISCUSSION
I. Petitioner's Conviction "Re d_to e iv
an_Item or Service" Within The M ing of S ion °

The Act.

Section 1128 of the Act clearly requires the I.G. to
exclude from Medicare, for a minimum of five years, any
“individual or entity" that has been "convicted of a
criminal offense related to the delivery of an item or
service" under Medicare or state health care (e.qg.,
Medicaid) programs. The I.G. must also direct states to
exclude such individuals from Medicaid for a period which
is at least "the same as any period" of Medicare
exclusion. 42 U.S.C. 1320a-7(a) (1), (c)(3)(B), and

(a) (3) (A); 42 C.F.R. 1002,211. Congressional intent on
this matter is clear:

A minimum five-year exclusion is appropriate, given
the seriousness of the offenses at issue. . .
Moreover, a mandatory five-year exclusion Should
6

provide a clear and strong deterrent against the
commission of criminal acts.

S. Rep. No. 109, 100th Cong., lst Sess. 2; 1987 U.S. Code
Cong. and Admin. News 682, 686.

In this case, the I.G. properly excluded Petitioner from
participation in Medicare and Medicaid for at least a
five year period because she was "convicted" of a
“criminal offense related to the delivery of an item or
service" under the Medicare program within the meaning of
section 1128(a)(1) of the Act.

Petitioner argued that section 1128 of the Act does not
apply to her because she is not a physician or other type
of health care provider. This argument fails because the
provisions of section 1128(a)(1) of the Act clearly apply
to any “individual or entity" and are not restricted to
health care providers. Merriam Webster's Third New
International Unabridged Dictionary defines "individual"
as "a single human being." Petitioner is unquestionably
an "individual" within the meaning of section 1128(a) (1)
of the Act.

Next, Petitioner argues that her crimes of theft and
torgery involved the processing of claim forms on a
computer and that these crimes were not "related to" the
"delivery of an item or service" under the Medicare
program within the meaning of section 1128(a)(1) of the
Act. Petitioner argues that the Act “obviously only
applies to cases where a medical provider submits a claim
for some type of service or item provided to a patient."
P. Br/5. This argument fails because Petitioner
admittedly processed fraudulent Medicare claims on her
computer to obtain monies from the Medicare program. The
fraudulent Medicare claims she processed and the monies
she stole "related to" the "delivery of" (or lack
thereof) of "an item or service" under the Medicare
program. Ms. Lyons' function of processing claims for
Nationwide, the Medicare carrier in Ohio, was an
essential part of the system of Medicare reimbursement.
Section 1128(a)(1) of the Act sweeps within its ambit all
crimes "related to the delivery of an item or service",
such as the conversion of Medicare or Medicaid funds by
Petitioner in this case.

5 Even if Petitioner were correct and this case

should have been brought by the I.G. under the permissive
provisions of section 1128, seven years would be an
appropriate period of exclusion for Petitioner under
section 1128(b), of the Act.
7

II. Seven Years Is An Appropriate Length Of Exclusion For
Petitioner.

Petitioner argued that the seven year period of exclusion
imposed and directed by the I.G. was unreasonable. She
contends that five years was the appropriate length of
exclusion, based on several factors:

1. She cooperated in the investigation and provided
information which could help Medicare carriers
such as Nationwide avoid such thefts in the
future.

2. She did her best to make restitution, confessing
judgment in the $425,915 civil action brought
against her by Nationwide and forfeiting to
Nationwide $7,763.61 which she had in savings.

3. She felt remorse for her actions and expressed
them in a letter to the State trial judge and in
a "to whom it may concern" letter.

4. The I.G. imposed and directed an exclusion of
only five years in the case of a pharmacist
convicted of substituting generic drugs for brand
name drugs in Medicaid prescriptions and charging
for the higher priced brand name drugs. Jack W.
Greene v. The Inspector General, DAB Decision No.
1078 (1989).

The I.G. responded by noting that in arriving at the
seven-year term of exclusion, he had considered
Petitioner's cooperation and efforts to make restitution,
along with the other factors which the I.G. is required
to consider under 42 C.F.R. 1001.125(b) .° The I.G.

6 fhe seven factors are:

(1) The number and nature of the program violations
and related offenses;

(2) The nature and extent of any adverse impact the
violations have had on beneficiaries;

(3) The amount of the damages incurred by the
Medicare, Medicaid, and the Social Services
program;

(4) Whether there are any mitigating circumstances;

(continued...)
8

argued that Petitioner's cooperation and restitution were
so limited that a seven-year exclusion was reasonable.
The I.G. contended that at best Petitioner made
restitution of only approximately $25,000, although her
total theft was almost half a million dollars (including
$30,568.04 taken from the Medicare program). The
remainder of the stolen money was spent on "vacations,
cars, jewelry and relatives." Tr. 32; I.G. Br. 3; I.G.
Ex. 12. The I.G. alleged that, although Petitioner
cooperated with authorities once the theft was
discovered, Petitioner did not cease her wrongful
activity until it was discovered, nor did she turn
herself in prior to the discovery. The I.G. noted that
in the pharmacist's case relied on by Petitioner (See
Greene, supra.) the amount involved totalled only several
thousand dollars and the pharmacist was placed on
probation, rather than incarcerated.

The basic facts are not in dispute in this case. The
parties supported most of their allegations with
documentation in the form of exhibits to which, in
effect, they stipulated.

Petitioner does not dispute that the I.G. considered the
relevant mitigating circumstances, but disagrees with the
I.G.'s conclusion that the appropriate term of exclusion
should be seven, rather than five, years. Petitioner
declined the opportunity for an oral hearing, although we
were willing to do it at the Women's Reformatory in
Columbus, if necessary.

6 (...continued)

(5) The length of the sentence imposed by the
court;

(6) Any other facts bearing on the nature and
seriousness of the program violations; and

(7) The previous sanction record of the suspended
party under the Medicare and Medicaid programs.

7 he I.G.'s allegation that Petitioner continued

her wrongful activity until it was discovered in February
1987 does not seem to be supported by the record. Also,
the record in this case does not contain documentation of
the dollar amount involved in the pharmacist's case. The
ALJ's decision in that case, a copy of which was attached
to the I.G.'s letter of February 9, 1989, does not
mention the dollar amount.
9

I accept Petitioner's written declarations of remorse

(P. Ex. A. B) as sincere and feel sympathy for her
current plight. I also applaud her cooperation with
authorities and with her former employer. Had it not
been for these mitigating factors, ten or more years
might have been the appropriate length of exclusion in
this case where the nature of the crimes committed
strikes at the nerve center of the Medicare system.

Given Congressional intent to exclude untrustworthy
individuals from participation in Medicare and State
health care programs, it is reasonable to conclude that
mitigating circumstances should constitute those
circumstances which demonstrate trustworthiness. See
Leonard N. Schwartz, R. Ph. v. The Inspector General,
Civil Remedies Docket No. C-62 (1981) at p. 13-15. None
of the circumstances asserted to be mitigating by
Petitioner in this case prove that she is an individual
who should be trusted to be near Medicare or State health
care funds. The circumstances cited by Petitioner
essentially demonstrate that she is a relatively
cooperative and remorseful individual. While these
factors may have had some bearing on the extent to which
Petitioner was punished for her crimes, they are not
dispositive of the question of whether Petitioner can now
or in the near future be trusted not to steal public
funds. Thus, given the gravity and circumstances of the
offense, the timing and quality of Petitioner's
cooperation, restitution, and remorse, I conclude that
the intent of Congress in protecting the integrity of the
Medicare program is best served by a seven year period of
exclusion.

CONCLUSION

Based on the law and undisputed material facts in the
record of this case, I conclude that Petitioner is
subject to the minimum mandatory provisions of section
1128 of the Act and that seven years in an appropriate
period of exclusicn.

IT IS SO ORDERED.

/s/

Charles E. Stratton
Administrative Law Judge


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board

Civil Remedies Division

In the Case of:
Surabhan Ratanasen, M.D., DATE: October 6, 1989
Petitioner,

Docket No. C-101
DECISION CR 48

-v-

The Inspector General.

DECISION AND ORDER

Petitioner requested a hearing to contest the Inspector
General's (I.G.'s) determination to exclude him from
participation in the Medicare and Medicaid programs for a
period of five years.’ The 1.G. filed a motion for
summary disposition of this case. This Decision and
Order resolves this case on the basis of written briefs
and a stipulated record. I hereby grant the I.G.'s
motion for summary disposition and conclude that the I.G.
was required under federal law to exclude Petitioner from
participation in the Medicare and Medicaid programs for a
period of five years.

' Section 1128 of the Act provides for the

exclusion of individuals and entities from the Medicare
program and requires the I.G. to direct States to exclude
those same individuals and entities from “any State
health care program" as defined in section 1128(h) of the
Act. The Medicaid program is one of the three types of
State health care programs defined in Section 1128 (h),
and for the sake of brevity, I refer only to it in this
Decision.
2
APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.

This case is governed by section 1128 of the Social
Security Act (Act), codified at 42 U.S.C.A. 1320a-7 (West
Supp. 1989). Section 1128(a)(1) of the Act provides for
the exclusion from Medicare, and a directive to the State
to exclude from Medicaid, any individual who is
"convicted of a criminal offense related to the delivery
of an item or service" under the Medicare or Medicaid
programs. Section 1128(c) (3)(B) provides for a five year
minimum period of exclusion for those excluded under
section 1128(a) (1).

Section 1128(b) of the Act provides for the permissive
exclusion of individuals or entities: (1) convicted of
criminal offenses, such as fraud or financial misconduct,
which are not related to the Medicare or Medicaid
program, or (2) who have been convicted of, or have
committed criminal offenses, or acts which are related to
the Medicare, Medicaid, or other government funded health
care programs.

II. he Federal Regulations.

The governing federal regulations (Regulations) are found
in 42 C.F.R. Parts 498, 1001, and 1002 (1988). Part 498
governs the procedural aspects of this exclusion case and
Parts 1001 and 1002 govern the substantive aspects.

In accordance with section 498.5(i), a practitioner,
provider, or supplier who has been excluded from program
coverage is "entitled to a hearing before an ALJ
(Administrative Law Judge)." The excluded individual or
entity has a right to request a hearing before an ALJ on
the issues of whether: (1) he or she was, in fact,
convicted; (2) the conviction was related to the delivery
of an item or service under Medicare or Medicaid; and (3)
the length of the exclusion is reasonable. 42 C.F.R.
1001.128(1988).

The I.G. is required by section 1001.123(a) to send
written notice of his determination to exclude an
individual or entity from participation in Medicare, when
he has "conclusive information that the individual or
entity has been convicted of a crime related to the
3

delivery of an item or service" under the Medicare or
Medicaid progran.

BACKGROUND

On December 28, 1988, the I.G. issued a notice (Notice)
to Petitioner, which stated that Petitioner would be
excluded from participation in the Medicare and Medicaid
programs for a period of five years, commencing 20 days
from the date of the Notice. The Notice stated that the
basis for these exclusions was Petitioner's conviction of
an offense covered by the mandatory provisions of section
1128(a) (1).

By letter dated February 23, 1989, (Request), Petitioner
timely requested a hearing before a federal ALJ, and this
case was docketed.

I conducted a prehearing telephone conference on April
25, 1989. During the prehearing conference: (1)
Petitioner admitted that he was "convicted" of a criminal
offense within the meaning of section 1128(i) of the Act,
and (2) the I.G. expressed his intention to file a motion
for summary disposition. I determined that Petitioner
had raised legal issues in his Request, which could be
further developed by the parties in written briefing. I
further determined that the material facts of this case
were not in dispute. On May 1, 1989, I issued a
Prehearing Order and schedule for filing motions for
summary disposition (Prehearing Order). Thereafter, the
I.G. submitted a motion for summary disposition (Motion),
a brief in support thereof, and nine exhibits.

Petitioner submitted a brief in support of his opposition
to the I.G.'s motion (Opposition) and one exhibit. The
parties submitted a stipulation regarding the
authenticity of I.G. Ex. 1- 3. Petitioner subsequently
filed supplemental points and authorities in opposition
to the I.G.'s motion (Supplemental), and the I.G. fileda
reply to Petitioner's Opposition and a reply to
Petitioner's Supplemental.

2 Section 1001.123 provides that the period of

exclusion is to begin 15 days from the date on the
notice; however, the I.G. allows five days for mailing.
42 C.F.R. 1001.123.
4

ISSUES

1. Whether Petitioner was convicted of a criminal
offense "related to the delivery of an item or service"
under the Medicaid program, within the meaning of section
1128(a) (1) of the Act.

2. Whether the I.G.'s determination to exclude
Petitioner from participation in the Medicare program,
and to direct that he be excluded from participation in
the Medicaid program, for a period of five years, is
mandated by law.

ONCLU: w

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

1. Petitioner is a physician in private practice in
Fresno, California. I.G. Br./2.

2. On May 18, 1987, Petitioner was charged with 12
counts of violating section 14107 of the California
Welfare and Institutions Code, Fraudulent Claims; Intent;

3 Citations to the record in this Decision and
Order are as follows:

Petitioner's Brief P.Br./ (page)

Petitioner's Supplemental P. Supp. Br./ (page)
Points and Authorities

I.G.'s Brief I.G. Br./ (page)

I.G.'s Reply Brief I.G. Rep. Br./ (page)

I.G.'s Reply to Petitioner's 1.G. Supp.

Supplemental Points and Rep. Br./ (page)
Authorities

Petitioner's Exhibits P. Ex. (letter) / (page)

I.G.'s Exhibits I.G. Ex. (number) / (page)
5

Punishment; Other Enforcement Remedies.’ P. Br./2; I.G.
Ex. 1.

3. Petitioner entered into a plea bargain by which he
agreed to plead guilty to four counts of violating
section 2261 of the Business and Professions Code.” I.G.
Ex. 2; P. Br./3-4, 6; I.G. Br./3.

4. Petitioner pled guilty to and was convicted of four
counts of violating section 2261 of the Business and
Professions Code. I.G. Ex. 2; I.G. Ex. 3; P. Ex. A/2;
P. Br./l.

5. Petitioner stipulated that the four counts to which
he pled guilty were reasonably related to Counts One,
Four, Seven, and Ten, of the May 18, 1987 charge filed
against Petitioner.® I.G. Ex. 2; I.G. Br./3; P. Br./3-4.

Section 14107 provides that

“Any person whom with intent to defraud,
presents for allowance or payment any false or
fraudulent claim for furnishing services or
merchandise, knowingly submits false
information for the purpose of obtaining
greater compensation than that to which he is
legally entitled for furnishing services or
merchandise, or knowingly submits false
information for the purpose of obtaining
authorization for furnishing services or
merchandise under this chapter [Basic Health
Care] or Chapter 8 [Prepaid Plans} is
punishable by imprisonment in the county jail not
longer than one year or in the state prison, or
by fine not exceeding five thousand dollars, or
by both such fine and imprisonment."

5 Section 2261 of the California Business and
Professions Code provides that:

“knowingly making or signing any certificate of
other document directly or indirectly related
to the practice of medicine or podiatry which
falsely represents the existence or "non-
existence of a state of facts, constitutes
unprofessional conduct."

® counts One, Four, Seven, and Ten of the May 18,
1987 Complaint alleged that Petitioner "did willfully,
unlawfully, and with intent to defraud, present to
(continued...)
6

6. Petitioner admitted that he was "convicted" of a
criminal offense within the meaning of section 1128(i) of
the Act. Prehearing Order/2.

7. The four counts to which Petitioner pled guilty were
related to Petitioner's commission of fraud against the
Medicaid program. I.G. Ex. 2; P. Br./2.

8. Petitioner was convicted of a criminal offense
“related to the delivery of an item or service" under the
Medicaid program within the meaning of section 1128(a) (1)
of the Act.

9. The I.G. must exclude individuals or entities from
participation in the Medicare program, and direct their
exclusion from participation in the Medicaid program, for
a minimum five year period, if they have been convicted
of a criminal offense related to the delivery of an item
or service under the Medicaid program.

10. The I.G. does not have the discretion to exclude an
individual or entity from participation in the Medicare
and Medicaid programs, based upon the permissive
provisions of section 1128(b) of the Act, in instances
where the individual or entity has been convicted of a
criminal offense which is “related to the delivery of an
item or service" under the Medicare or Medicaid program.

11. The I.G. acted properly in excluding and directing
the exclusion of Petitioner from participation in the
Medicare and Medicaid programs for the minimum period of
five years.

12. The principles pronounced in United States v.
Halper, 109 S. Ct. 1892 (1989), are not applicable to the
facts of this case.

$(...continued)
Computer Sciences Corporation and the state of California
for allowance or payment a false or fraudulent Medi-cal
claim for furnishing services." These counts pertained
to Medi-Cal claim numbers 6157281909701, 6174122526001,
6195301108101, and 6210260300901 for services allegedly
rendered to Bouakeo Phonexa, Medi-Cal Identification
number 103046180002.
7
I SS

I. The Minimum Mandatory Five Year Exclusion
Provisions Apply In This Case.

Section 1128(a)(1) of the Act requires the I.G. to
exclude individuals or entities from the Medicare
program, and direct their exclusion from the Medicaid
program, for a minimum period of five years, when such
individuals or entities have been "convicted" of a
criminal offense "related to the delivery of an item or
service" under the Medicare or Medicaid programs within
the meaning of section 1128(a)(1) of the Act.

Congress' purpose for the imposition of a five-year
minimum period of exclusion for individuals or entities
convicted of criminal offenses related to the delivery of
an item or service under the Medicare and Medicaid
programs is clear. In the legislative history of the
enactment of the Medicare and Medicaid Patient and
Program Protection Act of 1987, Congress stated that:

"A minimum five-year exclusion is appropriate,
given the seriousness of the offenses at

issue. ... Moreover, a mandatory five-year
exclusion should provide a clear and strong
deterrent against the commission of criminal acts."

S. Rep. No. 109, 100th Cong., 1st Sess. 2, reprinted in
1987 U.S. Code Cong. and Admin. News 682, 686.

In making the determination of whether an individual or
entity must be excluded from participation in the
Medicare and Medicaid programs based upon the mandatory
provisions of section 1128(a), two major issues must be
addressed: (1) whether the individual or entity was
"convicted" of a criminal offense within the meaning of
section 1128(a)(1) and (i) of the Act, and (2) whether
the conviction was "related to the delivery of an item or
service" under the Medicare or Medicaid program. Both of
the above issues must be answered affirmatively in order
for a petitioner to be properly excluded from
participation in the Medicare and Medicaid programs based
upon the mandatory provisions of the Act.

A. "Convicted"
In response to the first issue, Petitioner admits that he

was "convicted" of a criminal offense within the meaning
of section 1128(i) of the Act. FFCL 6.
B. titi 's Conv "Rela 'o The Deliv:
Of An Item Or Service" Under The Medicare or Medicaid
Program.

With regard to the second issue, Petitioner does not
specifically address the issue of whether his conviction
was "related to the delivery of an item or service under
the Medicaid program." However, this issue must be
addressed in making a determination of whether Petitioner
was properly excluded from participation in the Medicare
and Medicaid programs. In order to determine the
existence of a relationship between the criminal offense
for which Petitioner was convicted, and the delivery of
an item or service under the Medicare or Medicaid
program, it is necessary to examine the specific criminal
offense for which Petitioner was convicted, and the
actions of Petitioner which formed the basis for the
conviction.

Petitioner was convicted of four counts of violating
section 2261 of the California Business and Professions
Code, Unprofessional Conduct. FFCL 4. Originally,
Petitioner was charged with 12 counts of violating
section 14107 of the California Welfare and Institutions,
Fraudulent Claims; Intent; Punishment; Other Enforcement.
FFCL 2. However, pursuant to a plea-bargain, Petitioner
pleaded guilty to, and was convicted of, four counts of
violating section 2261 of the California Business and
Professions Code. FFCL 3, 4.

Petitioner stipulated that the four counts, for which he
was convicted, were reasonably related to Counts One,
Four, Seven, and Ten, of the original twelve counts with
which he was charged. FFCL 5. Those counts charged that
Petitioner willfully, unlawfully, and with intent to
defraud, presented to Computer Sciences Corporation and
the State of California "for allowance or payment, a
false or fraudulent Medi-Cal claim for furnishing
services." FFCL 5. The charges specifically stated that
Medi-Cal claims were involved and that the claims were
for furnishing services. FFCL 5.

Two differing sets of facts were offered by the parties
as the basis for Petitioner's conviction. The I.G.-
asserts that Petitioner billed Medi-cal for undelivered
services, whereas Petitioner asserts that he filled in
information on the charts of patients after he was
notified that Medi-cal was going to audit his medical
charts as part of its investigation. Either version of
the facts underlying Petitioner's conviction is
sufficient to prove that Petitioner was convicted of a
9

criminal offense related to the delivery of an item or
service under the Medicaid program.

Based upon the I.G.'s version of the facts underlying the
conviction, Petitioner billed the Medicaid program for
services which were never provided. Congress
specifically intended to exclude individuals convicted of
this type of offense.’ Based upon Petitioner's version
of the facts, Petitioner filled in information on the
charts of patients to insure that he would be reimbursed
for services which he had rendered. Petitioner's failure
to keep adequate records which demonstrate the need for
services rendered is directly related to the delivery of
the item or service for which he seeks reimbursement.

7 In the legislative history to the 1977 enactment,
Congress stated that:

Perhaps the most flagrant fraud involves billings
for patients whom the practitioner has not treated.
A related form of fraud involves claims for
services to a practitioner's patients that were not
actually furnished and intentionally billing more
than once for the same service.

H.R. Rep. No. 393-Part II, 95th Cong., 1st Sess. 47,
reprinted in 1977 U.S. Code Cong. & Admin. News 3039,
3050.

Congress reiterated its intent by enacting the Medicare
and Medicaid patient and Program Protection Act of 1987,
Pub. L. 100-93 (August 1987), and by stating that its
purpose in enacting the legislation was:

to improve the ability of the Secretary and
Inspector General of the Department of Health and
Human Services to protect the Medicare, medicaid,
Maternal and Child Health Services Block Grant, and
Title xx Social Services Block Grant from fraud and
abuse, and to protect the beneficiaries from
incompetent practitioners and from inappropriate
and inadequate care.

S. Rep. No. 109, 100th Cong., 1st Sess. 2, reprinted in
1987 U.S. Code Cong. & Admin. News 682.

Congress did this by providing a minimum mandatory period
of exclusion for those convicted of criminal offenses
which relate to the delivery of an item or service.
10

The determination of whether a conviction is related to
the delivery of an item or service under the Medicaid
program “must be a common sense determination based on
all relevant facts as determined by the finder of fact,
not merely a narrow examination of the language within
the four corners of the final judgement and order of the
criminal trial court." H. Gene Blankenship, v. The
Inspector General, Civil Remedies Docket No. C-67 (1989)
at p. 11. As stated in Jack W. Gree v. The spector
General, DAB Decision No. 1078 (1989) at p. 7, criminal
offenses may be related to the delivery of an item or
service because "they concern acts that directly and
necessarily follow under the health care program from the
delivery of the item or service."

In this case, Petitioner's stipulation and either version
of the facts underlying Petitioner's conviction have
provided the relationship between his conviction and the
delivery of an item or service under the Medicaid
program. The fact that Petitioner was not specifically
convicted of Medi-Cal fraud is irrelevant.

Therefore, I conclude that Petitioner was convicted of a
criminal offense "related to the delivery of an item or
service" under the Medicaid program within the meaning
off section 1128 of the Act.

II. The Permissive Provisions Of Section 1128 Of The Act
Do Not Apply To This Case

Petitioner also asserts that his conviction was directly
related to fraud or financial misconduct, as defined in
section 1128(b)(1) of the Act, and therefore, the I.G.
must exclude Petitioner based upon the permissive
provisions of the Act, and, not the mandatory provisions
of section 1128(a) (1).

Petitioner has misconstrued the requirements of the Act.
The Act does not present the I.G. with an "option" to
exclude an individual or entity, for a period of five
years, who has been convicted of a criminal offense which
is related to the delivery of an item or service under
the Medicaid or Medicare programs, but requires that the
I.G. exclude that individual or entity from participation
in the Medicare program and to direct that he be excluded
from participation in the Medicaid program.” The

8 Brown v. State Department of Health, 150 Cal.
Rptr. 344, 86 Cal. App. 3d 548 (1978), cited by
Petitioner's counsel, is not relevant to the facts of
this case.
11

permissive provisions of 1128(b)(1) were enacted to
broaden the category of individuals and entities which
may be excluded from participation in the Medicare and
Medicaid programs, not to provide an alternative basis
for excluding, or alternative length of exclusion, for
individuals whose behavior may be enunciated within the
provisions of 1128(b). If there has been a conviction,
the initial determination to be made by the I.G. is
whether the conviction was related to the delivery of an
item or service under the Medicaid or Medicare programs.
If the response to that issue is in the affirmative, the
inquiry ceases, and the individual or entity is properly
excluded based upon the mandatory provisions of section
1128(a). If the response is in the negative, the I.G.
will proceed to determine whether the individual's or
entity's behavior or conviction falls within the realm of
behaviors and convictions addressed in section 1128(b).
As stated in Greene, the I.G. "has no obligation under
the statute to decide that section 1128(b)(1) would not
apply before imposing the mandatory provisions of section
1128(a)." Id. at 10.

Since the Petitioner was "convicted" of a criminal
offense and I have concluded that the conviction was
"related to the delivery of an item or service" under the
Medicaid program within the meaning of section 1128(a) (1)
and (i) of the Act, I conclude that the I.G. was required
to exclude the Petitioner for a minimum of five years.

III. The Principles Pronounced in United States v.
Halper Do Not Apply In This Case.

Petitioner asserts that the recent Supreme Court decision
in United States v. Halper, 109 S.Ct. 1892 (1989), should

apply to excuse him from a mandatory five year exclusion
from participation in the Medicare and Medicaid prograns.
I disagree with Petitioner's assertion. In Halper, the
Supreme Court held that, under a limited number of
circumstances, the imposition of a civil monetary penalty
may be viewed as a "punishment," and as such, may violate
the Double Jeopardy Clause of the Sixth Amendment to the
United States Constitution. The issue to be addressed in
determining the applicability of Halper to this case is

° Since I have found and concluded that the

mandatory exclusion provisions of section 1128(a) (1)
apply in this case, I need not address the issue raised
by the Petitioner of whether I should make a de novo
determination to reclassify the Petitioner's criminal
offense as subject to the permissive authority under
section 1128(b) of the Act.
12

whether Petitioner's conviction was based upon federal
law, and in a federal court. If Petitioner's conviction
was in a state court, and based upon state law, the
"Separate Sovereign Doctrine" would prohibit the Double
Jeopardy Clause from taking effect.

Under the Separate Sovereign Doctrine, one sovereign,
(i.e., the United States Government), is not barred from
seeking a sanction against an individual, even though
another sovereign (i.e., a state government), may already
have imposed sanctions against the individual based upon
the same conduct or crime.

In this case, Petitioner was convicted in a state court
based upon his violation of state law. The sanctions
imposed by that state court have no bearing upon the
imposition of sanctions by the federal government based
upon Petitioner's violation of federal law, even though
both sanctions arise from the same conduct. Thus, I
conclude that the principles pronounced in Halper do not
apply to Petitioner's case.

CONCLUSION

Based on the law and undisputed material facts in the
record of this case, I conclude the I.G. properly
excluded the Petitioner from the Medicare and Medicaid
programs for the minimum mandatory period of five years.

IT IS SO ORDERED.

/s/

Charles E. Stratton
Administrative Law Judge


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board
Civil Remedies Division
In the Case of:
Date: October 5, 1989

Clarence H. Olson,

Petitioner,
Docket No. C-85
aan DECISION CR 46

The Inspector General.

DECISION AND ORDER

In this case, governed by section 1128 of the Social
Security Act (Act), Petitioner filed a timely request for
a hearing before an Administrative Law Judge (ALJ) to
contest the December 14, 1988 notice of determination
(Notice) issued by the Inspector General (I.G.) which
excluded Petitioner from participating in the Medicare
and Medicaid programs for five years.

After a telephone prehearing conference, both parties
filed motions for summary disposition. In addition,
Petitioner sought, in the alternative, an evidentiary
hearing on the issue of the length of exclusion.
Thereafter, oral argument was held by telephone and the
record was closed.

The parties filed a stipulation agreeing to the
authenticity of six of eight exhibits filed by the I.c.

' Section 1128 of the Act provides for the

exclusion of individuals and entities from the Medicare
program (Title XVIII of the Act) and requires the I.G. to
direct States to exclude those same individuals and
entities for the same period of time from “any State
health care program" as defined in section 1128(h). The
Medicaid program (Title XIX of the Act) is one of three
types of State health care programs defined in Section
1128(h) and, for the sake of brevity, I refer only to it.
2

in support of the motion for summary disposition.
Certified copies of the two remaining I.G. exhibits were
filed and, during the oral argument, Petitioner
stipulated to the authenticity of these two exhibits.
Exhibits A-1 through A-10 were filed in support

of Petitioner's motion and opposition and there was no
objection made by the I.G. to these exhibits.

Based on the entire record before me, I conclude that
summary disposition is appropriate in this case, that
Petitioner is subject to the minimum mandatory exclusion
provisions of sections 1128 (a) (1) and 1128 (c) (3) (B)
of the Act, and that it is appropriate for Petitioner to
be excluded for a minimum period of five years.

APPLICABLE STATUTES AND REGULATIONS
I. The Federal Statute.

Section 1128 of the Social Security Act (Act) is codified
at 42 U.S.C. 1320a-7 (West U.S.C.A., 1989 Supp.).

Section 1128(a) (1) of the Act provides for the exclusion
from Medicare and Medicaid of those individuals or
entities "convicted" of a criminal offense "related to"
the delivery of an item or service under the Medicare or
Medicaid programs. Section 1128(c)(3)(B) provides for a
five year minimum period of exclusion for those excluded
under section 1128 (a) (1).

While section 1128(a) of the Act provides for a minimum
five-year mandatory exclusion for (1) convictions of
program-related crimes and (2) convictions relating to
patient abuse, section 1128(b) of the Act provides for
the permissive exclusion of “individuals and entities"
for twelve types of other convictions, infractions, or
undesirable behavior, such as convictions relating to
fraud, license revocation, or failure to supply payment
information.

2 The citations to the record in this Decision and

Order are noted as follows:

Petitioner's Brief P. Br. (page)
Petitioner's Exhibit P. Ex. (number) / (page)
I.G.'s Brief I.G. Br. (page)

I.G.'s Exhibit I.G. Ex. (number) / (page)
Stipulation of 5/11/89 Stip. (number)

Tape of oral argument Tape

(by telephone)
II. The Federal Regulations.

The governing federal regulations (Regulations) are
codified in 42 C.F.R., Parts 498, 1001, and 1002 (1988).
Part 498 governs the procedural aspects of this exclusion
case; Parts 1001 and 1002 govern the substantive aspects.

Section 1001.123 requires the I.G. to issue an exclusion
notice to an individual whenever the I.G. has "conclusive
information" that such individual has been "convicted" of
a criminal offense “related to" the delivery of a
Medicare or Medicaid item or service; such exclusion must
begin 15 days from the date on the notice.?

ISSUES
The issues raised by the parties are:

1. Whether Petitioner was "convicted" of a criminal
offense within the meaning of sections 1128(a)(1) and (i)
of the Act.

2. Whether Petitioner was convicted of a criminal offense
"related to the delivery of an item or service" under the
Medicaid program within the meaning of section 1128(a) (1)
of the Act.

3. Whether Petitioner is subject to the minimum
mandatory five year exclusion provisions of sections 1128
(a) (1) and 1128(c) (3) (B) of the Act.

4. Whether the exclusion should be terminated by this ALJ
on the ground that the I.G. failed to comply with the
Administrative Procedure Act.

5. Whether the I.G. is prohibited by provisions of
federal law (regarding program operating
responsibilities) from excluding Petitioner.

6. Whether summary disposition is appropriate in this
case.

3 The I.G.'s notice letter allows an additional
five days for receipt by mail.
4

FINDINGS OF FACT AND CONCLUSIONS OF LAW ‘

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

1. Petitioner is a resident of California and, for the
relevant periods in issue, he was a partner in the United
Ambulance Company (aka United Health Enterprise) anda
partner in Guardian Ambulance.

2. As part of his duties for both of the companies,
Petitioner reviewed ambulance "tickets" (lists for
services rendered during the course of the ambulance
trip) for accuracy and completeness.

3. Petitioner was indicted in February of 1987 by a
federal grand jury on 32 counts of causing false
statements to be submitted on Medicare claims, in
violation of 42 U.S.C. 1395nn(a)(1). I.G. Ex. 1.

4. The indictment charged that Petitioner directed
employees to mark ambulance tickets for services that had
not been rendered and instructed employees to bill
Medicare for services that had not been rendered. 1.G.
Ex. 1.

5. On March 28, 1988, Petitioner pled nolo contendere to
32 misdemeanor counts of making false statements in
applications for Medicare payments, from July, 1986

to December, 1986, in violation of federal law. I.G. Ex.
2.

6. On March 28, 1988,the United States District Court
for the Central District of California "accepted"
Petitioner's plea of nolo contendere to all 32 counts
in the indictment within the meaning of sections
1128(a)(1) and 1128(i) of the Act. I.G. Ex. 2, 3, 4.

7. Petitioner was convicted of a criminal offense
"related to the delivery of an item or service" under the
Medicare program within the meaning of section 1128(a) (1)
of the Act.

Any part of this Decision and Order preceding the
Findings of Fact and Conclusions of law which is
obviously a finding of fact or conclusion of law is
incorporated herein.
5

8. The I.G. properly excluded Petitioner from
participation in Medicare, and properly directed his
exclusion from Medicaid, for a period of five years and
was required to do so under section 1128 of the Act.

9. The I.G. did not violate the federal Administrative
Procedure Act, 5 U.S.C. 551, et seg., by not promulgating
regulations to distinguish the exclusion authorities in
section 1128(a)(1) and 1128(b)1) of the Act.

10. The I.G. did not rely upon an “unpublished
guidance/directive" in classifying Petitioner as subject
to the mandatory exclusion authority of section
1128(a)(1) of the Act.

11. The material and relevant facts in this case are not
contested.

12. The classification of the Petitioner's criminal
offense as subject to the authority of 1128(a)(1) is a
legal issue.

13. There is no need for an evidentiary hearing in this
case.

14. The I.G. is not prohibited by federal law or
regulations from participation in the exclusion process.

15. The I.G. is entitled to summary disposition in this
proceeding.
DISCUSSION

I. Petitioner was "Convicted" of a Criminal Offense as a
Matter of Federal Law.

Section 1128(i) of the Act provides that an individual
has been "convicted" of a criminal offense when:

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

(2) there has been a finding of guilt against the
individual or entity by a Federal, State, or
local court;
6

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

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

I find and conclude that Petitioner was "convicted"
within the meaning of section 1128(a)(1) and (i) (3)
because it is axiomatic that the interpretation of a
federal statute or regulation is a question of federal
and not state law. United States v. Allegheny Co., 322
U.S. 174, 183 (1944); United States v. Anderson Co.
Tenn., 705 F.2d 184, 187 (6th Cir., 1983), cert. denied,
464 U.S. 1017 (1984). My task is to interpret the words
of section 1128 of the Act in light of the purposes that
section 1128 was designed to serve. See Chapman v.
Houston Welfare Rights Organization, 441 U.S. 600, 608
(1979).

The term "accepted" in section 1128(i)(3) is defined by
Webster's Third New International Dictionary, 1976
Unabridged Edition, as the past tense of "to receive with
consent." The term "accepted" is the opposite of the
term rejected. The United States District Court for the
Central District of California did not reject
Petitioner's plea of guilty. Quite the contrary, the
court "accepted" Petitioner's plea within the meaning of
section 1128(i) (3).

II. Petitioner's Conviction "Related to the Delivery of
an_ item or service" Within The Meaning of Section
1128 of The Act.

Petitioner argues that even if I rule that he was
"convicted," he should not be excluded because the
offense was not a program-related crime giving rise to a
mandatory exclusion under section 1128(a)(1) of the Act.

I find and conclude, as a matter of federal law, that the
mandatory exclusion provisions of section 1128 are not
limited to situations where a medical provider or other
individual or entity is convicted under a statute
expressly criminalizing fraud against a federal or state
health care program. See Arthur B. Stone, D.P.M., v. The
Inspector General, Civil Remedies Docket No. C-52 (1989);
and Charles W. Wheeler v. The Inspector General, Civil
Remedies Docket No. C-61 (1989).

7

The test of whether a "conviction" is "related to the
delivery of an item or service" must be a common sense
determination based on all relevant facts as determined
by the finder of fact, not merely a narrow examination of
the language within the four corners of the final
judgment and order of the criminal trial court.

The inquiry is whether the conviction "related to the
delivery of an item or service" under Medicare, not
whether the criminal court convicted Petitioner of actual
fraud. My task is to examine all relevant conduct to
determine if there is a relationship between the judgment
of conviction and the Medicare program. Had Congress
intended a different result, it would have used the
phrase "conviction for" or conviction "restricted to"
instead of "related to." An examination of whether a
conviction is "related to the delivery of a item or
service" under the Medicare program necessarily involves
an inquiry into Petitioner's conduct.

Accordingly, the finder of fact must consider all
relevant documents pertaining to the trial court
proceeding. These may include the indictment, the
transcript of the sentencing proceeding, and plea
agreements.

The record establish that the "conviction" of Petitioner
was "related to" the delivery of a Medicare item within
the meaning of section 1128 of the Act.

Black's Law Dictionary, Fifth Edition (West Publishing
1979) defines "related" as: "standing in relation;
connected; allied; akin." This case should not be
decided in a vacuum, or with a strict, hypertechnical
interpretation of the term "related to." Petitioner was
convicted of submitting false Medicare claims. There is
a simple, common-sense connection, supported by the
record, between the actions associated with the
conviction and the "delivery of an item or service" under
the Medicare progran.

III. A Minimum Mandatory Five Year Exclusion Was
Required In This Case.

Section 1128(a)(1) of the Act clearly requires the I.c.
to exclude individuals and entities from the Medicare
program, and direct their exclusion from the Medicaid
program, for a minimum period of five years, when such
individuals and entities have been "convicted" of a
criminal offense "related to the delivery of an item or
service" under the Medicare or Medicaid programs within
8

the meaning of section 1128(a)(1) of the Act.
Congressional intent on this matter is clear:

A minimum five-year exclusion is appropriate,
given the seriousness of the offenses at
issue. . . . Moreover, a mandatory five-year
exclusion should provide a clear and strong
deterrent against the commission of criminal
acts.

S. Rep. No. 109, 100th Cong., 1st Sess. 2, reprinted in
1987 U.S. CODE CONG. & ADMIN. NEWS 682, 686.

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

Iv. The I.G. Has Complied With The Administrative
Procedure Act.

The Petitioner argued that the I.G. (1) failed to comply
with the federal Administrative Procedure Act, 5 U.S.C.
552(a)(1) and 553, by not promulgating regulations.

For the reasons I stated in my Decision and Order in
Stone, supra, Docket No. C-52, and Wheeler, supra, Docket
No. C-61, I find that Petitioner's argument has no merit.

Vv. The I.G.'s Participation In The Exclusion Process
Does Not Violate The Act.

The I.G.'s "participation" in the exclusion process is
not contrary to the Act, because it does not conflict
with the prohibition on the "transfer of program
operating responsibilities" to the I.G. 42 U.S.C.
3526(a).

5 Since I have found and concluded that the

mandatory exclusion provisions of section 1128(a) (1)
apply in this case, I need not address the issue, raised
by the Petitioner, of whether I should make a de novo
determination to reclassify the Petitioner's criminal
offense as subject to the permissive authority under
section 1128(b) of the Act.
9

The arguments raised here by Petitioner are similar, if
not identical, to the arguments raised by Petitioner in
Stone, supra, and Wheeler, supra. For the same reasons I
stated in Stone and Wheeler, I feel that Petitioner's
arguments are without merit.

VI. There Is No Need For An Evidentiary Hearing In This
Case.

I also find the Petitioner's argument that he is entitled
to an evidentiary hearing concerning the classification
of his exclusion to be without merit for the same reasons
expressed in Stone supra, at p. 15, and Wheeler, supra,
at pp. 17 and 18.

CONCLUSTIO}

Based on the law and undisputed material facts in the
record of this case, I conclude the I.G. properly
excluded the Petitioner from the Medicare program, and
directed his exclusion from the Medicaid program, for the
minimum mandatory period of five years.

IT IS SO ORDERED.

/s/

Charles E. Stratton
Administrative Law Judge


DEPARTMENT OF HEALTH AND HUMAN SERVICES
Departmental Appeals Board

Civil Remedies Division

In the Case of:

Robert M. Buncher, DATE: September 27, 1989

Petitioner,

“ver Docket No. C-102

The Inspector General. DECISION CR 45

DECISION OF ADMINISTRATIVE LAW JUDGE
ON MOTION FOR SUMMARY DISPOSITION

On December 29, 1988, the Inspector General (the I.G.)
notified Petitioner that he was being excluded from
participation in Medicare and State health care programs
for five years.' The I.G. told Petitioner that he was
being excluded as a result of his conviction in a Florida
court of a criminal offense related to the delivery of an
item or service under Medicaid. Petitioner was advised
that exclusions from participation in Medicare and
Medicaid of individuals or entities convicted of such an
offense are mandated by section 1128(a)(1) of the Social
Security Act. The I.G. further advised Petitioner that
the law required that the minimum period of such an
exclusion be not less than five years.

Petitioner timely requested a hearing, and the case was
assigned to me for a hearing and a decision. The I.G.
moved for summary decision, and Petitioner opposed the

‘ "State health care program" is defined by

section 1128(h) of the Social Security Act to include any
State Plan approved under Title XIX of the Act (such as
Medicaid). I use the term "Medicaid" hereafter to
represent all State health care programs from which
Petitioner was excluded.
2

motion. I heard oral argument of the motion on September
13, 1989.

I have considered the parties' arguments, their fact
submissions, and applicable law. JI conclude that the
exclusions imposed and directed by the I.G. in this case
are mandated by law. Therefore, I enter summary
disposition in favor of the I.G.

ISSUE

The issue in this case is whether the exclusions imposed
and directed by the I.G. against Petitioner are mandated
by law.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. On December 28, 1987, Petitioner was charged with, two
felony offenses, pursuant to Florida law. I.G. Ex. 4.

2. Count I of the information filed against Petitioner
charged him with knowingly aiding or abetting in the
filing of false or unauthorized claims for services under
the Florida Medicaid program. I.G. Ex. 4.

3. On July 25, 1988, Petitioner entered a plea of nolo
contendere to Count I of the information filed against
him. I.G. Ex. 1.

4. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid. I.G. Ex. 1, 4.

2 The parties' exhibits and memoranda will be

cited as follows:

I.G.'s Exhibit I.G. Ex. (number)
Petitioner's Exhibit P. Ex. (number)
Memorandum in Support I.G.'s Brief at (page)

of the Inspector
General's Motion for
Summary Disposition

Memorandum in Response P.'s Brief at (page)
to the Inspector

General's Motion for

Summary Disposition
5. Petitioner was convicted of a criminal offense within
the meaning of section 1128(i) of the Social Security
Act. Findings 1-3; Social Security Act, section 1128(i).

6. Petitioner was convicted of a criminal offense as
defined by section 1128(a)(1) of the Social Security Act.
Finding 4; Social Security Act, section 1128(a) (1).

7. The Secretary of Health and Human Services (the
Secretary) delegated to the I.G. the authority to
determine, impose, and direct exclusions pursuant to
section 1128 of the Social Security Act. 48 Fed. Reg.
21662 (May 13, 1983).

8. On February 28, 1989, the I.G. excluded Petitioner
from participating in the Medicare program and directed
that he be excluded from participating in Medicaid,
pursuant to section 1128(a)(1) of the Social Security
Act.

9. The exclusions imposed and directed against
Petitioner by the I.G. were for five years, the minimum
period required by law for exclusions imposed and
directed pursuant to section 1128(a)(1) of the Social
Security Act. Social Security Act, section
1128(c) (3) (B).

10. The exclusions imposed and directed against
Petitioner by the I,G. are mandated by law. Finding 4;
Social Security Act, sections 1128(a) (1); 1128(c) (3) (B).

ANALYSIS

There are no disputed material facts in tnis case.

The record establishes that Petitioner pleaded nolo
contendere in a Florida court to a single count of fraud
against the Florida Medicaid program. Based on this
conviction, the I.G. excluded Petitioner from
participating in Medicare and directed that he be
excluded from participating in Medicaid, for five years.

The I.G. contends that Petitioner was convicted of a
criminal offense related to the delivery of an item or
service under the Medicaid program. I.G.'s Brief at 5.
The I.G. argues that section 1128 of the Social Security
Act mandates that individuals convicted of such offenses
be excluded from participation in Medicare and Medicaid.
Id. Furthermore, according to the I.G., Petitioner was
excluded for the minimum period mandated by law, inasmuch
as section 1128(c)(3)(B) of the Social Security Act
4

requires that an individual convicted of an offense, as
defined by section 1128(a) (1), be excluded for at least
five years. Id.

Petitioner conceded at oral argument that he was
convicted of a criminal offense related to the delivery
of an item or service under the Medicaid program, as
defined by section 1128(a)(1) of the Social Security
Act.> Petitioner's principal argument is that the five
year exclusions imposed and directed against him are
unreasonable, given the particular facts of his case.
According to Petitioner, he should have a hearing and the
opportunity to establish the presence of mitigating
factors in his case. P.'s Brief at 3-5.

I disagree with Petitioner's contentions. The law not
only mandates exclusions for individuals convicted of
offenses related to the delivery of an item or service
under the Medicaid program, it requires that the term of
such exclusions be for at least five years. Social
Security Act, section 1128(c)(3)(B). The law does not
permit any exceptions to this rule, regardless of the
equities that may be present in particular cases.
Petitioner's unique circumstances are not relevant in
assessing the reasonableness of the five-year exclusions
imposed and directed against him.

Petitioner argues that to decide this case without an
evidentiary hearing as to the reasonableness of the
length of the exclusions imposed and directed against him
would contravene section 205(b) of the Social Security
Act which provides for de novo hearings to review certain
decisions by the Secretary. I agree that Petitioner's
hearing rights in this case are provided by section

3 In his brief, Petitioner argued that a nolo

contendere plea under Florida law was not a conviction,
but during oral argument in response to a question from
me, Petitioner conceded that he had been convicted of an
offense related to the delivery of an item or service
under the Medicaid program. In any event, a nolo
contendere plea is a conviction within the meaning of
section 1128(i) (3).

4 tf the I.G. had imposed and directed exclusions
against Petitioner for a period longer than five years,
then there would exist an issue as to the reasonableness
of that part of the exclusions which exceeded five years.
In that event, either side would be permitted to
introduce evidence as to the presence of aggravating or
mitigating factors.
5

205(b), and that this law requires ge novo hearings. But
the law does not require the administrative law judge to
admit and consider evidence which is not relevant to the
issues in a case. In this case, Petitioner offered
evidence to show that the five-year exclusions imposed
and directed against him are unreasonable. This evidence
is not relevant. I have provided Petitioner with an
opportunity to contest the issue which is relevant--that
is, whether Petitioner was convicted of an offense
related to the delivery of an item or service under the
Medicaid program.

Petitioner also contends that he should be permitted to
offer evidence concerning the reasonableness of the
exclusions in this case, in order to create a record for
judicial review of my decision.

I disagree with the Petitioner's contention. I have
concluded that evidence offered to show the
reasonableness of exclusions for less than five years is
not relevant, because the law mandates a minimum five
year period of exclusion. It is inappropriate for me to
admit irrelevant evidence on the possibility that a
reviewer might disagree with my assessment of the issues.
Were I to do so, there would be no boundaries on the
admissibility of evidence in an administrative hearing.

CONCLUSION

Based on the undisputed material facts and the law, I
conclude that the I.G.'s exclusions were mandated by law.
Therefore, I am entering a decision in favor of the I.c.
in this case. The five-year exclusions imposed and
directed against Petitioner are sustained.

/s/

Steven T. Kessel
Administrative Law Judge