Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
L. John Flage, M.D., DATE: November 3, 1995

Docket No. C-95-064
Decision No. CR399

Petitioner,
-v-

The Inspector General.

Verve veer

DECISION

This case is before me on Petitioner's January 30, 1995
request for hearing to contest the determination of the
Inspector General (I.G.) of the Department of Health and
Human Services (DHHS) to exclude him from participation
in Medicare and to direct his exclusion from
participation from Medicaid for a period of three years.!
The parties have stipulated that there exists a basis
for the I.G. to impose and direct an exclusion pursuant
to section 1156 of the Act. In this Decision, I conclude
that the three-year exclusion imposed and directed
against Petitioner by the I.G. is reasonable.

BACKGROUND

In a letter dated December 1, 1994, the I.G. notified
Petitioner that she had decided to adopt the August 11,
1994 recommendation of the Iowa Foundation for Medical
Care, the peer review organization (PRO) for Iowa, to
exclude Petitioner from participation in Medicare and
Medicaid for a period of three years.

1 petitioner was excluded from participation as a
provider in Medicare and any State health care program as
defined in section 1128(h) of the Social Security Act
(Act). I use the term "Medicaid" in this Decision to
include all State health care programs from which
Petitioner was excluded.
2

The PRO's recommendation of August 11 was based on its
determination that Petitioner, in 10 cases,
“substantially violated" the obligations imposed upon him
by section 1156 of the Act: 1) to provide care of a
quality which meets professionally recognized standards
of health care in a substantial number of cases; and 2)
to support the services or items he ordered or provided
with evidence of the medical necessity and quality as may
reasonably be required by the reviewing PRO. In
addition, on the basis of similar violations in certain
other cases, the PRO found that Petitioner had
demonstrated an inability and unwillingness substantially
to comply with his obligations under section 1156(a) of
the Act.

In its August 11 letter, the PRO gave Petitioner 30 days
to submit to the I.G. any additional material Petitioner
believed would affect the PRO's recommendation to exclude
him from Medicare and Medicaid. Petitioner submitted no
material.

In her December 1 letter, the I.G. informed Petitioner
that she agreed with the PRO's conclusion that
Petitioner, in his treatment of 10 patients, had
"substantially violated" his obligations under section
1156 of the Act. Further, the I.G. informed Petitioner
that she agreed with the PRO's conclusion that Petitioner
had demonstrated an inability and unwillingness
substantially to comply with the obligations imposed upon
him by section 1156 of the Act.?

By letter dated January 30, 1995, Petitioner requested a
hearing, stating that he disagreed with each of the PRO
findings relied on by the I.G. in her December 1 letter.
The case was subsequently assigned to me for hearing and
Decision. During the prehearing conference I conducted
in this case on February 28, 1995, I established
procedures by which this case was to proceed to an in-
person hearing in Des Moines, Iowa, on May 8, 1995.

On May 4, 1995, the parties informed me that they had
agreed to file a joint stipulation that would obviate the
need for an in-person hearing. I conducted a telephone
conference on May 5, 1995, during which Petitioner

2? In so doing, the I.G. indicated that she had not
relied on some or all of the PRO's findings in six of the
cases which it cited to support its conclusion that
Petitioner is unwilling or unable to comply with his
obligations under section 1156 of the Act. I.G. Exhibit
1 at page 10.
3

reaffirmed that he was waiving his right to an in-person
hearing in this case and declared that he was not
disputing the I.G.'s authority to exclude him.

Petitioner informed me also that he wanted to proceed by
submitting briefs and documentary evidence. Accordingly,
in my Order of May 11, 1995, I established a schedule for
the parties to submit briefs and documentary evidence,
including their joint stipulation.

In his brief (P. Br.), Petitioner requested permission to
provide oral argument as well.’ I granted Petitioner's
request. Accordingly, I heard the parties' oral argument
in this case on September 6, 1995.

STIPULATION

The parties have stipulated that Petitioner failed ina
number of cases substantially to comply with the
obligations imposed on him under section 1156(a) of the
Act, as cited by the PRO in its August 11, 1994 letter
and as restated by the I.G. in her December 1, 1994
letter. The parties further stipulated that the sole
remaining issue in this proceeding is the reasonableness
of the three-year exclusion imposed and directed by the
I.G. against Petitioner. ALJ Ex. 1.‘

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During all times relevant to this case, Petitioner
was practicing medicine as a physician in Independence
and Buchanan Counties in Iowa. P. Ex. 1.

2. During all times relevant to this case, the Iowa
Foundation for Medical Care (IFMC) was the PRO for Iowa.
I.G. Ex. 3.

3. On April 17, 1992, the PRO issued Petitioner an
initial sanction notice advising him that he had violated

3 Petitioner indicated also a desire to file a
reply brief. P. Br. at 6. Both parties later waived the
opportunity to file reply briefs. Transcript of Oral
Argument at 3. .

‘4 I have received the parties' stipulation into
evidence as Administrative Law Judge Exhibit 1 (ALJ Ex.
1). Also, I have received I.G. exhibits (I.G. Ex.) 1
through 34 and Petitioner's exhibit (P. Ex. 1) into
evidence.
4

his statutory obligations under section 1156 of the Act
in ten cases. I.G. Ex. 5.

4. After meeting with Petitioner on July 15, 1992, the
PRO outlined a corrective action plan (CAP) for
Petitioner to follow instead of recommending that
Petitioner be sanctioned. I.G. Ex. 6 at 2 - 7.

5. In a response dated August 13, 1992, Petitioner
accepted and agreed to follow the PRO's recommended CAP.
I.G. Ex. 6 atl- 7.

6. On November 12, 1993, the PRO issued a second
sanction notice to Petitioner which informed Petitioner
that, subsequent to the implementation of the CAP,
Petitioner had continued to violate his obligations under
section 1156 of the Act. I.G. Ex. 5.

7. On April 20, 1994, the PRO met with Petitioner to
discuss its findings of additional violations subsequent
to the implementation of Petitioner's CAP. I.G. Ex. 10.

8. On August 11, 1994, the PRO issued a final sanction
notice which informed Petitioner that it had found that
Petitioner had, in specified cases, substantially failed
to comply with his obligations under the Act to assure
that the services ordered or provided by Petitioner were:
a) of a quality that meets professionally recognized
standards of health care; and b) supported by adequate
evidence of medical necessity and quality. ALJ Ex. 1;
I.G. Ex. 3.

9. The PRO's August 11 letter informed Petitioner also
that he had demonstrated an unwillingness and inability
to comply with his obligations under the Act and that it
was recommending to the I.G. that Petitioner be excluded
for three years. I.G. Ex. 3.

10. The I.G. largely accepted the PRO's findings
regarding Petitioner and adopted the PRO's recommendation
that Petitioner be excluded for three years from Medicare
and Medicaid. I.G. Ex. 1.

11. The parties have stipulated that Petitioner violated
his obligations under section 1156 of the Act, as stated
in the PRO's August 11 letter and as cited also in the
I.G.'s December 1, 1994 letter informing Petitioner of
his exclusion from Medicare and Medicaid. ALJ Ex. 1.

12. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
5

recognized standards of health care in the case of
patient I. McG. (admission date March 2, 1991) by failing
to: a) repeat abnormal calcium and phosphorus tests; and
b) evaluate patient I. McG.'s drop in hemoglobin. ALJ
Ex. 1; I.G. Ex. 1, 2, 10 at 27 - 29.

13. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO by failing to provide accurate information
on patient I. McG's discharge summary. ALJ Ex. 1; I.G.
Ex. 1 - 3, 10 at 29 - 30.

14. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care by failing to monitor
arterial blood gases (ABGs) or oximetry for patient M.S.
(admission date June 11, 1991), who had dyspneic chronic
obstructive pulmonary disease (COPD). ALJ Ex. 1; I.G.
Ex. 1, 2, 10 at 33 - 35.

15. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care: a) by
inappropriately ordering Valium and morphine for patient
D.M. (admitted on June 22, 1991 for neurological
observation), specifically by failing to specify a route
for the morphine; and b) by failing to obtain adequate
information regarding D.M. on admission. ALJ Ex. 1; I.G.
Ex. 1 - 3, 10 at 36 ~ 38.

16. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of E.H.
(admitted June 27, 1991) by failing to: a) continue
Cardizem during E.H.'s hospital stay; b) obtain ABGs to
evaluate E.H.'s dyspnea (labored breathing); and c)
appropriately manage E.H.'s fluid therapy. ALJ Ex. 1;
I.G. Ex. 1 - 3, 10 at 38 - 40.

17. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of E.G.
(admitted May 21, 1991) by failing to: a) adequately
evaluate the cause of E.G.'s hematuria (blood in her
urine); b) order appropriate laboratory tests on the
fluid from both of E.G.'s thoracenteses; c) adequately
evaluate E.G.'s abnormal ABGs, aggressively treat E.G.'s
6

compromised. oxygen.status, and specify the route and flow
rate of the oxygen administration; and d) appropriately
manage E.G.'s intravenous fluid therapy. ALJ Ex. 1; I.G.
EX. 1 - 3, 10 at 40 - 49,

18. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO by failing to: a) provide an adequate and
timely history and physical (H & P) of patient E.G.; and
b) complete E.G.'s discharge summary in a timely manner.
ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 49.

19. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of
patient 0.S. (admitted October 22, 1990) by failing to:
a) repeat the white blood count that was elevated; b)
obtain blood and sputum cultures before initiating
treatment with a broad acting third generation
cephalosporin (Cefobid); c) treat 0.S.'s pneumonia with a
long enough course of antibiotic therapy; d) order an ACE
inhibitor for a patient with cardiomegaly and CHF; and e)
appropriately manage 0.S.'s intravenous fluid therapy.
ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 50 - 52.

20. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO by failing to: a) provide an adequate and
timely H & P; and b) complete patient 0.S.'s discharge
summary in a timely manner. ALJ Ex. 1; I.G. Ex. 1 - 3,
10 at 52.

21. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of M.R.
(admitted March 12, 1991): a) by failing to adequately
evaluate and appropriately treat patient M.R.'s
hyponatremia; b) by inappropriately writing an order for
“home meds" without specific knowledge of the drugs being
ordered; c) by failing to obtain blood cultures before
initiating treatment with a broad acting third generation
cephalosporin (Cefobid); and d) by failing to
appropriately manage M.R.'s intravenous fluid therapy.
ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 53 - 67, 80 - 82.

22. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
7

reviewing PRO by failing to complete patient M.R.'s H & P
in a timely manner. I.G. Ex. 1 - 3, 10 at 83.

23. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of
patient R.E. (admitted March 19, 1991) by
inappropriately: a) ordering oral Lasix, 40 mg twice
daily, for a patient without continued signs of heart
failure; b) writing an order for "home meds" without
specific knowledge of the drugs being ordered; and c)
writing an order on March 20 which stated "May use
Lanoxin but wait to see chest x-ray results." ALJ Ex. 1;
I.G. Ex. 1 - 3, 10 at 85 - 89.

24. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO: a) by failing to complete patient R.E.'s
H & P in a timely manner; and b) by inappropriately
providing inaccurate information in R.E.'s discharge
summary. ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 89 - 91.

25. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of
patient M.C. (admitted June 9, 1991) by failing to
adequately address the abnormal thyroid study, thus
providing inappropriate care to a patient with a history
of hypothyroidism. ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 91 -
94.

26. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO by failing to provide accurate information
in M.C.'s discharge summary. ALJ Ex. 1; I.G. Ex. 1 - 3,
10 at 91 - 94.

27. Petitioner has stipulated that he substantially
violated his statutory obligation to provide health care
of a quality and type which meets professionally
recognized standards of health care in the case of
patient I.c. (admitted July 17, 1991): a) by
inappropriately ordering Synthroid for a patient with
normal thyroid function studies; and b) by failing to
discontinue or lower the Lanoxin dosage in a patient with
bradycardia. ALJ Ex. 1; I.G. Ex. 1 - 3, 10 at 94 - 102.
3

28. Petitioner has stipulated that he substantially
violated his statutory obligation to provide appropriate
evidence of medical necessity and quality to the
reviewing PRO by failing to provide a complete and timely
H & P within 48 hours of I.C.'s admission. ALJ Ex. 1;
I.G. Ex. 1- 3, 10 at 94 - 102.

29. Prior to recommending Petitioner's exclusion, the
PRO gave Petitioner the opportunity to complete a CAP to
remedy the quality of care and medical documentation
problems which the PRO had identified in Petitioner's
practice. I.G. Ex. 3, 4.

30. In 22 cases involving incidents which occurred after
Petitioner agreed to the terms of the CAP, he violated
his statutory obligations. I.G. Ex. 3, 4, 6; Finding 5.

31. Petitioner failed to comply substantially with the
terms of the CAP. I.G. Ex. 3, 4; Finding 30.

32. Petitioner has demonstrated an inability or
unwillingness to comply with the terms of his CAP. I.6G.
Ex. 3 at 21, 73 - 79, 96 - 97; I.G. Ex. 10 at 6 - 7;
Findings 30, 31.

33. Petitioner has placed patients at risk by failing to
order or perform appropriate medical tests, or by failing
to order repeat testing or monitoring in situations where
patients' test results were abnormal. I.G. Ex. 1 - 3; 10
at 87; 12; 13; 15; 16; 17; 18; 20; and 21.

34. Petitioner has placed patients at risk by failing to
appropriately evaluate patients' medical conditions or by
failing to order appropriate medical treatment for
patients. I.G. Ex. 1 - 3; 10 at 38; 14; 15; 16; 17; 18;
19; 20; and 21.

35. Petitioner has admitted that his treatment of 10
patients was not in accordance with professionally
recognized standards of health care. I.G. Ex. 10 at 27 -
102; Finding 11.

36. Petitioner has admitted that, in the cases cited by
the I.G., he did not provide appropriate evidence of
medical necessity and quality to the reviewing PRO .
I.G. Ex. 10 at 27 - 102; Finding 11.

37. Petitioner's treatment of the 10 patients identified
by the I.G. shows that he failed substantially in his
obligation to provide care of a quality which meets
professionally recognized standards of health care. See
9

Findings 12, 14 - 17, 19, 21, 23, 25, and 27; Act,
section 1156(a) (2).

38. In a substantial number of cases, Petitioner failed
to comply substantially with the obligation imposed upon
him by section 1156(a)(2) of the Act to provide care of a
quality which meets professionally recognized standards
of health care. Finding 37.

39. In a substantial number of cases, Petitioner failed
to comply substantially with the obligation imposed upon
him by section 1156(a) (3) of the Act to provide

appropriate evidence of medical necessity and quality to
the reviewing PRO. Findings 13, 18, 20, 22, 24, and 28.

40. Through his treatment of the 10 patients cited by
the I.G. as the basis for Petitioner's exclusion, and
through the violations he committed while under a CAP,
Petitioner has demonstrated that he is unable or
unwilling substantially to comply with professionally
recognized standards of health care. Findings 12, 14 -
17, 19, 21, 23, 25, 27, 30 - 32.

41. Section 1156 is a remedial, not a punitive statute.
Act, section 1156; Dr. Abdu] Abassi, DAB CR390 at 3
(1995); Gary E. Wolfe, D.Q., DAB CR395 at 5 (1995).

42. Petitioner's violations of his obligations under
section 1156 of the Act are serious in nature. Findings
12 - 28, 33, 34.

43. Petitioner's repeated violations of his obligations
under sections 1156(a)(2) and (3) of the Act indicate
inadequate medical understanding or confusion regarding
treatments which endanger the health of patients.
Findings 33, 34, 38 — 40.

44. Petitioner's repeated violations of his obligations
under section 1156(a)(2) and (3) of the Act indicate a
lack of thoroughness in his medical evaluations and
treatment of patients which endanger the patients'
health. Findings 33, 34, 38 - 40.

45. Petitioner's stipulations and his arguments based on
those stipulations do not negate the seriousness of his
violations or the risks he currently pose to patients.
Findings 36, 37, 43, 44.

46. Petitioner's stipulations and his arguments based on
those stipulations do not negate the consequences of
Petitioner's inability to evaluate, manage, or treat
10

relatively basic medical conditions. Findings 11 - 32,
36, 37.

47. Petitioner's stipulations and his arguments based on
those stipulations do not negate the consequences of
Petitioner's failure or inability to complete his CAP
successfully. Findings 29 - 31, 37, 38.

48. Petitioner's arguments in this proceeding do not
show that he recognizes the seriousness of his violations
or that he is willing and able to comply with the
requirements of section 1156 of the Act. See P. Br. at
2.

49. One of the remedial purposes of section 1156 of the
Act is to protect the health of Medicare beneficiaries
and Medicaid recipients. S. Khalid Hussain, M.D., DAB
CR204 (1992); Louis W. DeInnocentes. Jr., M.D., DAB CR247
(1992).

50. A three-year period of exclusion will provide
Petitioner with adequate time to: a) improve his medical
knowledge; b) prepare him to treat patients in accordance
with professionally recognized standards of health care;
and c) avoid creating undue risks of harm for patients.
See, e.g., Findings 33, 34, 46, 48.

51. A three-year period of exclusion will protect
program beneficiaries from being placed at risk by a
provider who has demonstrated deficiencies in complying
with professionally recognized standards of health care.
See, e.g,, Findings 48 - 50.

52. A three-year exclusion will provide Petitioner with
adequate time to acquire the training to improve the
documentation of his prescribed course of treatment,
patients' medical history, and the medical necessity and
quality of the treatment he provides. See, ¢.q.,
Findings 29, 40.

53. A three-year exclusion is necessary, appropriate,
and justified in this case. Findings 1 - 52.
DISCUSSION
Section 1156(a) of the Act provides as follows:
It shall be the obligation of any health care
practitioner and any other person . . . who provides

health care services for which payment may be made
(in whole or in part) under this Act, to assure, to
11

the extent of his authority that services or items
ordered or provided by such practitioner or person
to beneficiaries and recipients under this Act -~-

(1) will be provided economically and only
when, and to the extent, medically necessary;

(2) will be of a quality which meets
professionally recognized standards of health
care; and

(3) will be supported by evidence of medical
necessity and quality in such form and fashion
and at such time as may reasonably be required
by a reviewing peer review organization in the
exercise of its duties and responsibilities.

Section 1156(b) of the Act provides:

(1) If after reasonable notice and opportunity for
discussion with the practitioner or person
concerned, and, if appropriate, after the
practitioner or person has been given a reasonable
opportunity to enter into and complete a corrective
action plan (which may include remedial education)
agreed to by the organization, and has failed
successfully to complete such plan, any organization
having a contract with the Secretary under this part
determines that such practitioner or person has --

(A) failed in a substantial number of cases
substantially to comply with any obligation
imposed on him under subsection(a), or

(B) grossly and flagrantly violated any such
obligation in one or more instances,

such organization shall submit a report and
recommendations to the Secretary. If the Secretary
agrees with such determination, and determines that
such practitioner or person, in providing health
care services over which such an organization has
review responsibility and for which payment (in
whole or in part) may be made under this Act, has
demonstrated an unwillingness or a lack of ability
substantially to comply with such obligations, the
Secretary (in addition to any other sanction
provided under law) may exclude (permanently or for
such period as the Secretary may prescribe) such
practitioner or person from eligibility to provide
services under the Act on a reimbursable basis. In
12

determining whether’ a practitioner or person has
demonstrated an unwillingness or lack of ability
substantially to comply with such obligations, the
Secretary shall consider the practitioner's or
person's willingness or lack of ability, during the
period before the organization submits its report
and recommendations, to enter into and successfully
complete a corrective action plan.

An excluded individual has a right to a de novo hearing
to contest the decision of the Secretary or her delegate
(the I.G.) to impose and direct the exclusion. Act,
sections 1156(b) (4) and 205(b) (1); Louis W. DeInnocentes,
Jr... M.D., DAB CR247 (1992). Only two issues are subject
to the de novo hearing: 1) whether there is a basis for
the imposition of the exclusion; and 2) whether the
length of the exclusion is unreasonable. 42 C.F.R. §
1001.2007(a).

Petitioner has stipulated to the basis for his exclusion.
Petitioner stipulated that he violated his obligations
under section 1156 of the Act. ALJ Ex. 1. In so
stipulating, Petitioner has admitted that, in the 10
cases identified by the I.G., he substantially violated
his statutory obligation to provide care of a quality
which meets professionally recognized standards of health
care. Also, Petitioner has stipulated that, in seven
cases, he substantially violated his obligation to
provide appropriate evidence of medical necessity and
quality to the PRO.

Thus, the only issue is the length of time during which
Petitioner should be excluded from participation as a
provider in the Medicare and Medicaid programs. The I.G.
adopted the recommendation of the PRO and imposed a
three-year exclusion, which began in late December of
1994. I.G. Ex. 1 at 13. Petitioner contends that the
exclusion should be limited to the period of time that
has already elapsed since the exclusion began. P. Br. at
5. I have the authority to review the record and to
affirm, increase, or reduce the I.G.'s determination that
Petitioner should be excluded for three years. 42 C.F.R.
§ 1005.20(b).

The regulation relevant to the issue before me specifies
the consideration of certain information but does not
formulate the period of exclusion. 42 C.F.R. § 1004.90.
I am, however, guided by the principles of logic and

5 In the Act, this appears as "whehter". I have
changed it here for the sake of clarity.
13

reason, as well as by the remedial purpose of the Act. I
have concluded that the three-year exclusion imposed
against Petitioner is reasonable for advancing the
remedial goals of the Act.

In determining the reasonableness of the exclusion
period, I have especially considered the evidence
establishing the nature and seriousness of Petitioner's
violations. I have concluded from my review of the
evidence that Petitioner has serious and recurring
deficiencies in his willingness or ability to comply with
the requirements set by section 1156(a)(2) and (3) of the
Act. Findings 12 to 35. Many of these deficiencies
relate to his medical knowledge of the management and
treatment of patients, which are evidenced by his failure
to 1) order appropriate tests to evaluate the condition
of his patients; 2) specify dosage and route for
medications; 3) timely obtain or timely report adequate
information upon the admission or discharge of his
patients; 4) properly monitor his patients' conditions;
5) order appropriate medications for some of his
patients; 6) continue to administer medications for a
sufficient length of time; and 7) consider or take
appropriate actions based on abnormal test results. At
the very minimum, Petitioner's acts and omissions
deprived each of these 10 patients of a level of care
required by statute that was conducive to properly
diagnosing or improving their condition.

The evidence provided by the I.G. is replete with details
showing that the medical care Petitioner provided to 10
patients was, in each instance, lacking in some basic
element of diagnostic or treatment knowledge which also
placed the patient's health in unnecessary jeopardy. As
correctly pointed out in the I.G.'s Brief (I.G. Br.),
examples of such fundamental problems in the record
include Petitioner's failure to understand that he should
not give morphine and Valium to a patient who was
admitted for neurological observation; Petitioner's
repeated failure to monitor ABGs in patients who had
conditions involving oxygen depletion; Petitioner's
failure to address an abnormal thyroid study and provide
appropriate care to a patient who had a history of
hypothyroidism; Petitioner's inappropriate ordering of
oral Lasix for a patient who had no continued signs of
heart failure; Petitioner's repeated and inadequate
orders for "home meds" for patients without specific
knowledge of the drugs the patients received; and
Petitioner's repeated failure to properly manage
patients' intravenous fluid therapy.
14

Petitioner relies on the opinions of his professional
colleagues who believe that his violations under section
1156 of the Act are not severe, do not evidence
deficiencies in his clinical judgment, were errors of
omission as opposed to commission, and have not adversely
affected his patients' condition. P. Br. at 3 (referring
to letters to Petitioner's attorney from Drs. Sutherland
and Myers in P. Ex. 1 at 7 - 8). One physician's opinion
cited by Petitioner suggests also that Petitioner's
recordkeeping problems do not amount to improper patient
care. P. Br. at 3 and P. Ex. 1 at 7.

I do not find Petitioner's arguments to be persuasive.
Nor do I find Petitioner's reliance on the letters from
his colleagues to be appropriate or well founded.

First of all, Petitioner has stipulated that he has
“failed in a number of cases substantially to comply with
the obligations imposed on him under section 1156(a) of
the Act ...." ALJ Ex. 1. Congress has already
determined the importance of the obligations specified
under section 1156(a) by permitting the Secretary or her
delegate, the I.G., to impose an exclusion in the event
these obligations are substantially violated ina
substantial number of cases. Act, section 1156(b) (1).
Even though Petitioner has not specifically acknowledged
that his multiple failings in the cases cited by the I.G.
establish his violations in a substantial number of
cases, this conclusion is self-evident from the evidence
of record and the parties' stipulation. See, e.g.,
Findings 12 - 28, 38, 39.

Petitioner's stipulation and my related conclusion cannot
be altered by physicians who formed contrary opinions or
who disagree with the importance Congress has attached to
a physician's need to fulfill obligations under section
1156(b) of the Act. For an exclusion to be valid,
Petitioner's violations of the statutory standard do not
have to result in actual harm to patients. Act, section
1156. Nor does the practitioner need to make errors of
commission instead of errors of omission, as suggested by
one of Petitioner's colleagues. As noted above, the goal
of an exclusion is to protect program beneficiaries and
recipients from possible harm. Finding 49.

In this case, the I.G. has set the exclusion at three
years due to Petitioner's potential for harming patients;
there is no allegation that the substandard quality of
care rendered by Petitioner actually has harmed patients.
I.G. Ex. 1 at 11. The I.G. is authorized to preclude
Petitioner from being a source of harm to program
beneficiaries and recipients.
15

I find logical the I.G.'s conclusion that Petitioner's
failure to use proper documentation or recordkeeping
procedures also could harm patients in that other
physicians would not have adequate information for
properly treating the same patient. I.G. Ex. 1 at 11.
Notwithstanding the belief of one of the physicians who
submitted a statement on behalf of Petitioner, there is
no adequate or logical basis for accepting that
Petitioner was providing proper patient care while
Petitioner was unable or unwilling to document the
medical necessity or quality of his care. See P. Ex. 1
at 7. Therefore, I do not find persuasive Petitioner's
arguments that his violations were not severe because
most of them were documentation problems which had no
impact on patient care. See P. Br. at 3.

Moreover, Petitioner has not established the proper
foundation for the opinions of the doctors who wrote in
support of reducing Petitioner's exclusion. For example,
Dr. Myers, whose opinion was quoted by Petitioner (P. Br.
at 3), specifically noted that he did not know the
details of the deficiencies that have resulted in
Petitioner's exclusion. P. Ex. 1 at 7; see also letters
of other physicians in P. Ex. 1 at 1- 6. Dr.
Sutherland, who did review the PRO's recommendation and
summarized his disagreement in a letter also relied upon
by Petitioner (P. Br. at 3), did not list his experience
or his qualifications for evaluating the significance of
deficiencies under section 1156(a) of the Act. P. Ex. 1
at 8.

The letters from Petitioner's physician colleagues are
also conclusive in nature and lack the detailed analysis
and attention to facts seen in the PRO's reports and in
the I.G.'s notice letter. Although Dr. Sutherland, in
his letter, does profess to have knowledge concerning the
PRO records, nothing in his letter persuades me that he
has knowledge of the cases of the 10 patients whose
treatment is at issue. Even were I to assume such
knowledge on the part of Dr. Sutherland, his one-page
letter lacks the detailed and fact intensive analysis of
the PRO's reports. Also, I note that Dr. Sutherland
agrees that Petitioner was deficient in his care of
patients, as cited by the PRO. P. Ex. 1 at 8.
Accordingly, I have given no weight to any of the
physicians' opinions relied upon by Petitioner.

With regard to Petitioner's unwillingness or inability to
comply with his statutory obligation under the Act, I
find relevant that, although, since November of 1991,
Petitioner has not had a registration number for
prescribing a controlled substance, he was convicted of
16

the offense of dispensing or prescribing a controlled
substance on the basis of a post-November 1991 incident.
I.G. Ex. 1 at 12. This type of conduct evidences
Petitioner's general unwillingness to follow the
requirements imposed by law.

I find relevant also that Petitioner argues that the
violations cited by the I.G. in her December 1994 letter,
to which he stipulated, were "deficiencies" only, and
which were "the exceptions and not the rule for his
practice." P. Br. at 2. I disagree. The cited
violations form a pattern and are not "exceptions" to
Petitioner's practice. P. Br. at 2. For example, there
is proof of Petitioner's recurring failure to order
appropriate medication therapy as evidenced by the cases
of: 1) patient R.E., who was placed on Lasix during
March 1991 without continued signs of heart failure
(Finding 23); 2) patient D.M., who was placed on Valium
and morphine during June of 1991 despite his having been
admitted to the hospital for neurological observation
(Finding 15); and 3) patient 0.G., who was not placed on
a long enough course of antibiotic therapy for his
pneumonia during his hospitalization in October 1992
(Finding 19).

In addition, there were recurring problems with
Petitioner's failure to use or to properly interpret
laboratory tests, such as in the cases of: 1) patient
M.R., who was placed on a broad acting third generation
cephalosporin in March 1991 before a blood culture had
been obtained and evaluated (Finding 21); 2) patient
E.G., for whom there was no adequate evaluation of ABGs
or aggressive treatment of the patient's compromised
oxygen status in May 1991 (Finding 17); 3) patient E.H.,
for whom no ABGs were ordered to evaluate dyspnea in June
of 1991 (Finding 16); 4) patient M.C., who had a history
of hypothyroidism and abnormal thyroid studies but was
not provided appropriate care in June 1991; and 5)
patient I.C., who was placed on Synthroid in July of 1991
despite normal thyroid study results (Finding 27). There
were also recurring failures by Petitioner to provide
timely reports of histories and physicals of his patients
which, as discussed above, impedes the ability of other
physicians to delivery effective treatment to patients.
See Findings 13, 18, 20, 22, 24, 26, and 28.

Further evidence that Petitioner has remained unwilling
or unable to comply with his statutory obligation is
found in Petitioner's failure to live up to the terms of
his CAP, and to take advantage of the opportunity to
remedy his recurring problems under the statute. As
correctly pointed out by the I.G. and the PRO, the same
17

types of deficiencies in his practice occurred again in
22 cases (each case consisting of multiple violations)
after he had agreed to comply with the terms of a CAP.
I.G. Ex. 1 - 6; Findings 30, 31. From November 1992
until December 1993, Petitioner continued to exhibit
significant problems, such as failing to: 1) adequately
evaluate patients; 2) address abnormal test results; 3)
order appropriate medication therapy; 4) order
appropriate IV therapy; e) provide adequate or
appropriate medical orders; and 5) provide timely and
adequate documentation, such as H & Ps and discharge
summaries. I.G. Ex. 1- 4. Even after the PRO apprised
him of these additional cases in a second sanction
notice, Petitioner did not respond. I.G. Ex. 3 at 73.

Petitioner contends that he has successfully completed
the CAP. P. Br. at 8. Indeed, during oral argument,
counsel for the I.G. admitted that Petitioner had
completed the training elements of the CAP. Transcript
of September 6, 1995 oral argument at 23 (Tr. at 23).
However, while Petitioner has shown that he eventually
fulfilled the training requirements in the CAP, the
record reflects that, during the time the CAP was in
effect, he continued to commit numerous substantial
violations of professionally recognized standards of
health care. Tr. at 23. The violations that occurred
during the period that the CAP was in effect, coupled
with Petitioner's established pattern of basic mistakes
regarding his treatment of the 10 patients at issue, are
very persuasive proof that he is unwilling or unable to
comply with his statutory obligations.

Therefore, the record reflects that Petitioner's
completion of the CAP courses and paperwork are not
persuasive in light of Petitioner's continued violations
of the most basic and important elements of the CAP
regarding the proper care and treatment of patients and
proper and adequate documentation. Petitioner's
completion of the CAP coursework is meaningless in view
of his continued violations of his obligation under the
Act during the CAP period, and certainly does not provide
any indication that at present Petitioner is willing or
able to comply with his obligations under section 1156 of
the Act.

I find equally unpersuasive Petitioner's additional
arguments and evidence to support reducing the length of
his exclusion. Having already addressed the letters from
physicians, I will now discuss the letters of support
from some patient and hospital staff members, as well as
the petitions signed by local residents. It is obvious
18

from these submissions that Petitioner is a well-liked
physician in his community. P. Ex. 1.

However, as set out in the I.G.'s letter of December
1994, Petitioner's exclusion does not bar him from
practicing medicine. The exclusion bars him only from
receiving payments under the Medicare and Medicaid
programs, so as to protect those whose access to medical
care depends on such payments. I.G. Ex. 1. The I.G. has
no authority to preclude Petitioner from practicing
medicine, having hospital privileges, or treating
patients who wish to be treated by him. In fact,
Petitioner's exclusion has no potential impact whatsoever
on persons who are not Medicare beneficiaries or Medicaid
recipients. Yet the letters of support for Petitioner
and the petitions signed by local residents fail to
indicate an understanding of these distinctions. Some
letters ask for reinstatement of Petitioner's hospital
privileges. E.g., P. Ex. 1 at 34, 35, 40, 47. Others
object to depriving Petitioner of the privilege of
practicing medicine. E.g., P. Ex. 1 at 124. The
Administrator of a local hospital, for example, notes a
physician shortage in the area even though the exclusion
from participation in the Medicare and Medicaid programs
does not require Petitioner to terminate his medical
practice or leave the area. P. Ex. 1 at 9; I.G. Ex. 1.

More importantly, none of the letters from patients or
petitions signed by local residents indicates any
knowledge of the nature or extent of those violations
committed by Petitioner. One individual, for example,
appears to assume that Petitioner has been derelict in

required by the government." P.
Ex. 1 at 38 (emphasis in original). Nor does the record
show that the writers of the letters or signatories of
the petitions have the qualifications to evaluate the
appropriateness and quality of services rendered by
physicians.

The majority of the letters express patient loyalty,
contain lay opinions on the quality of medical care, do
not show sufficient knowledge of the underlying facts of
this case, and are not entitled to any weight. I find it
significant that Petitioner has declined the repeated
opportunities afforded him by the PRO to address the
merits of all the violations alleged by the PRO. E.g.,
I.G. Ex. 3 at 73. Now, having been unwilling or unable
to convince his professional peers familiar with the
specific cases that his medical decisions and actions
were within professionally recognized standards,
Petitioner relies upon the opinions of lay individuals
unfamiliar with the PRO's medical findings and the I.G.'s
19

reasons for excluding him. I do not find that this
approach establishes that a three year exclusion is
unreasonable.

With respect to the physician shortage alleged by
Petitioner and his supporters, I conclude that the
evidence relevant to this issue is not sufficient for
finding a three year exclusion unreasonable. Petitioner
does not contest the I.G.'s determination that other
physicians practice in the area (I.G. Ex. 1 at 11), and
Petitioner does not allege that his Medicare and Medicaid
patients will be rejected by other area doctors. In
fact, the physicians who wrote letters in Petitioner's
support do not assert that they have full patient loads
or will reject Medicare and Medicaid patients. P. Ex. 1
at 1-8. Only one doctor has stated in his letter that
Petitioner's situation has created “somewhat of a
hardship" for other physicians. P. Ex. 1 at 7; P. Br.,
4. However, at the time this doctor wrote the letter,
many patients of Petitioner's already had changed
doctors, and this doctor did not note that any Medicare
or Medicaid patient had failed or will fail to find a
local physician willing to treat him. Id.. Nor has any
Medicare or Medicaid beneficiary or recipient alleged
that since Petitioner's exclusion no doctor in the area
has been willing to accept her or him as a patient .

Moreover, I do not find that the appropriate method for
relieving the physician shortage situation alleged by
many local residents and Petitioner is to modify the
exclusion period of a physician whose treatment poses
serious risks to patient health and who cannot or will
not conform the care he renders to professionally
recognized standards. It may be true that Petitioner's
exclusion causes the other doctors of the community to be
“overworked,” as alleged by a hospital employee. P. Ex.
1 at 11. Placing Petitioner back in the programs at this
time may indeed lessen the workload of other health care
professionals in the community. However, doing so will
be a disservice to the health of program patients who may
be receiving treatment from Petitioner.

I am aware that Petitioner, at least in the proceedings
before the PRO and before me, has stipulated to the
existence of his violations under the Act. However, his
willingness to enter into the stipulation does not negate
the seriousness of Petitioner's violations, the risks he
creates for patients, or his failure to adequately remedy
his deficiencies during the time period that the CAP was
in effect. To date, Petitioner continues to minimize the
potential harm he created for patients and shirk off the
importance of proper medical documentation, as seen by
20

his reliance upon the letters discussed above. People
writing to support a reduction in Petitioner's sanction
period may have been given the incorrect impression that
the exclusions resulted from hypertechnical and
unnecessary paperwork requirements which Petitioner's
busy schedule as a good physician did not permit him to
satisfy, or from his failure to communicate with the
government. E.g., P. Ex. 1 at 2, 13, 38.

The fact that others believe that Petitioner can and will
work with the local hospital's Continuing Quality
Improvement (CQI) committee to overcome his problems also
does not establish that the exclusion period should be
decreased. Petitioner is being excluded due to the
numerous quality of care and documentation problems that
have resulted from his treatment of patients who were
admitted to the same hospital with the CQI committee.
See, e.g., I.G. Ex. 12 - 34. Petitioner's reliance on
letters suggesting the usefulness of the same hospital's
CQI committee and his willingness to work with that
committee does not amount to a sincere recognition by
Petitioner that he has failed to meet his obligations
under section 1156 of the Act. Until he understands the
nature and significance of his past violations, it is
unlikely that he will be able to comply substantially
with the statutory requirements.

Based on all of the foregoing considerations and the
totality of the evidence, I conclude that a three-year
exclusion is reasonable in order to protect the programs'
beneficiaries and recipients. A three-year exclusion
will give Petitioner the opportunity to understand the
manner in which he has violated his statutory obligations
and the potentially harmful consequences to his patients.
A three year exclusion will also enable Petitioner to
obtain the necessary training and instruction which may
persuade him to change the types of practices noted by
the I.G. and the PRO. The three-year exclusion will
provide Petitioner with sufficient time to demonstrate
that he can provide medical care to program beneficiaries
and recipients in a manner consistent with his
obligations under the Act and which will not create undue
risk of harm to then.
21
CONCLUSION

I uphold the three-year exclusion which the I.G. imposed
and directed against Petitioner.

/s/
Mimi Hwang Leahy
Administrative Law Judge

Addressees:

Hugh Field, Esq. and Eric Johnson, Esq.
Beecher, Rathert, Roberts, Field,
Walker & Morris, P.C.

Court Square Building, Suite 300

620 Lafayette Street

P.O. Box 178

Waterloo, Iowa 50704

and

Nancy K. Born, Esq.

Assistant Regional Counsel
DHHS ~ Region VII

Room 535, 601 East 12th Street
Kansas City, Missouri 64106


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Maria M. Melendez, M.D., DATE: October 20, 1995
Petitioner,

Docket No. C-95-097
Decision No. CR398

-vo-

The Inspector General.

weeererwererererern

DECISION

By letter dated January 24, 1995, Maria M. Melendez,
M.D., the Petitioner herein, was notified by the
Inspector General (I.G.), of the U.S. Department of
Health & Human Services (HHS), that it had been decided
to exclude Petitioner for a period of five years from
participation in the Medicare program and from
participation in the State health care programs described
in section 1128(h) of the Social Security Act (Act),
which are referred to herein as "Medicaid." The I.G.'s
rationale was that exclusion, for at least five years, is
mandated by sections 1128(a)({1) and 1128(c)(3)(B) of the
Act because Petitioner had been convicted of a criminal
offense related to the delivery of an item or service
under Medicaid.

Petitioner requested a review of the I.G.'s action by an
administrative law judge of HHS's Departmental Appeals
Board (DAB). During the telephone prehearing conference
call on April 21, 1995, the I.G. moved for submission of
this case on a written record. Petitioner did not object
to the I.G.'s request. I granted the I.G.'s request.

Because I determined that there are no facts of
decisional significance genuinely in dispute, and that
the only matters to be decided are the legal implications
of the undisputed facts, I have decided the case on the
basis of the parties' written submissions in lieu of an
in-person evidentiary hearing. 42 C.F.R. § 1005.4(b) (12)
(1992).
2

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

APPLICABLE LAW

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

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Petitioner is a medical doctor, practicing in the
Bronx, New York.

2. On August 22, 1994, Petitioner pled guilty in the
District Court of the State of Vermont, Unit 3, Orleans
Circuit, to one count of Medicaid Fraud and one count of
Prescription Fraud. I.G. Exs. 1, 2.!

3. Specifically, the Information charged that, on or
about August 30, 1993, Petitioner intentionally prepared
a false or fraudulent prescription, which she gave to a
Medicaid recipient who was not her patient nor was he
ever examined by her. I.G. Exs. 1 - 3.

4. Allegedly, Petitioner issued the false prescription
knowing that a pharmacy would fill the prescription, as
she directed, and wrongly bill the Medicaid program.
I.G. Ex. 2 at 2 - 3.

5. On September 9, 1993, the pharmacy which received
Petitioner's false prescription, billed the Medicaid
program based on her fraudulent representation. I.G.
Exs. 1, 2.

6. In pleading guilty, Petitioner indicated that there
were sufficient facts to support the charges in count 2
(Medicaid Fraud) and count 3 (Prescription Fraud) of the
Information filed against her. I.G. Ex. 1 at 4; Finding
3.

1 The I.G. submitted three exhibits with her brief
and I have admitted them into evidence. I refer to the
I.G.'s exhibits as "I.G. Ex(s). 1 - 3."
3

7. Petitioner was sentenced by the court to probation,
a $3500 fine, and 100 days of community service. I.G.
Ex. 3 at 1 - 2.

8. The Secretary of HHS has delegated to the I.G. the
authority to determine and impose exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21,662 (1983).

9. On January 24, 1995, the I.G. issued a notice
stating that Petitioner was being excluded from
participation in the Medicare and Medicaid programs for
five years, pursuant to section 1128(a)(1) of the Act.

10. Petitioner's guilty plea, and the court's acceptance
of that plea, constitutes a "conviction," within the
meaning of section 1128(a)(1) and 1128(i) of the Act.

11. Petitioner was convicted of a criminal offense
related to the delivery of an item or service under
Medicaid, within the meaning of section 1128(a) (1) of the
Act. Findings 6, 7, 10.

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

13. The minimum mandatory period of exclusion pursuant
to section 1128(a)(1) is five years. Act, section
1128 (c) (3) (B).

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

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

16. Although Petitioner may indeed provide medical
services to indigent persons, that, also, does not
provide me with authority to waive or lessen her
exclusion.

PETITIONER'S ARGUMENT

Petitioner contends that, under the totality of
circumstances in her case, a five-year sanction is
inherently excessive. Petitioner argues also that the
public has nothing to fear from her continuing to
4

practice in light of the fact that her writing of this
single false prescription was her only transgression of
law.

Petitioner notes that she has had to overcome a history
of childhood deprivation and abuse which have caused her
psychological difficulties in life, which necessitated
extensive treatment and that she now applies her skills
as a psychiatrist to serve a uniquely disadvantaged
clientele in the South Bronx.

Lastly, Petitioner notes that the medicine which she
prescribed contrary to regulation was an antidepressant,
which she needed for own treatment but was unable to
afford. Petitioner has also submitted numerous letters
of support attesting to her professional skills and
service to the community.’

DISCUSSION

I. Petitioner was properly excluded under section
1128(a) (1) of the Act.

The statute under which the I.G. seeks to exclude
Petitioner -- section 1128(a)(1) -- requires, initially,
that Petitioner have been convicted of a criminal
offense.

Section 1128(i) of the Act provides that an individual
will be deemed "convicted" under any of the following
circumstances:

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

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

2 In her responsive brief, Petitioner included
numerous letters and refers to them in the brief as
"Exhibit A." I have relabelled this exhibit as
Petitioner's exhibit 1 "P. Ex. 1," in accordance with my
Order and Schedule for Filing Briefs and Documentary
Evidence, dated April 25, 1995. I admit P. Ex. 1 into
evidence.
5

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

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

In the case at hand, sections 1128(i)(1) and (3) are
obviously applicable. Petitioner pled guilty and the
court clearly accepted such plea when it imposed a
sentence. Findings 2, 6, 7; I.G. Ex. 3.

Next, the statute requires that the criminal activity
have been program related. It is well established that
financial misconduct directed at Medicare and Medicaid,
in connection with the delivery of items or services
under the programs, constitutes a program-related offense
invoking mandatory exclusion. Jack W. Greene, DAB CR19
(1989), aff'd DAB 1078 (1989), aff'd sub nom. Greene v.
Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990). In
this regard, Petitioner's misrepresentations resulted in
the payment by Medicaid of a fraudulent claim. Moreover,
Petitioner's offense was program related because Medicaid
was the victim of the offense. Jan Klein, DAB CR177
(1992). For these reasons, Petitioner's conviction was
related to the delivery of an item or service under
Medicaid.

In this case, the I.G. made the determination that
Petitioner's conviction was governed by section
1128(a)(1). Once that determination was made, the I.G.
had no discretion to impose anything but a mandatory
five-year exclusion. i ,
DAB 1334, at 7 (1992). I conclude that in this case, the
I.G. properly classified Petitioner's conviction as
falling under the minimum mandatory exclusion authority
of sections 1128(a)(1) and 1128(c)(3)(B). The law
requires’ that Petitioner be excluded for at least five
years.

II. The 1.G. is entitled to prevail as a matter of law.

As noted above, Petitioner offers several explanations
for her criminal behavior -- j.e., psychological
difficulties and financial hardship. She claims also
that any violation of law on her part is more than
balanced by her community service. However, under
section 1128(a)(1), proof that a relevant criminal
conviction has occurred ends the inquiry as to whether
6

mandatory exclusion is justified. DeWayne Franzen, DAB
1165 (1990). The administrative law judge does not look
beyond the fact of conviction, or entertain claims of
innocence, or evaluate explanations for the misconduct,
or consider evidence intended to mitigate the minimun
exclusionary period. It is also well established that
the intent of the individual committing the criminal
offense is not relevant.

, DAB 1173 (1990).
Consequently, Petitioner's explanations are not relevant
or material to the outcome of this case.

Section 112(c) (3) (B) of the Act requires that an
exclusion imposed under section 1128(a)(1) be for a
mandatory minimum period of at least five years. Chris
Mark Spierer, DAB CR360 (1995); , DAB
CR347 (1994). This five-year mandatory minimum
requirement is also codified at 42 C.F.R. § 1001.102(a).
Neither the administrative law judge nor the 1.G is
authorized to reduce the five-year mandatory minimum
exclusion. Maximo Levin, DAB CR343 (1994). Since the
I.G. excluded Petitioner pursuant to section 1128(a) (1),
the five-year exclusion is deemed reasonable as a matter
of law.

For the reasons stated above, the I.G. is entitled to
prevail as a matter of law. Thus, for the purposes of
this decision and to resolve this summary disposition
issue, I find that there is no material fact in dispute,
and the I.G. is entitled to summary disposition.

CONCLUSION

Petitioner's exclusion, for at least five years, is
mandated by sections 1128(a)(1) and 1128(c)(3)(B) of the
Act because of her conviction of a criminal offense ©
related to the delivery of an item or service under
Medicaid.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Joel A. Baringer, R.Ph., DATE: October 5, 1995
Petitioner,

Docket No. C-95-125
Decision No. CR397

-voe

The Inspector General.

DECISION

By letter dated March 22, 1995, Joel A. Baringer, R.Ph.,
the Petitioner herein, was notified by the Inspector
General (I.G.), of the U.S. Department of Health & Human
Services (HHS), that it had been decided to exclude
Petitioner for a period of five years from participation
in the Medicare program and from participation in the
State health care programs described in section 1128 (h)
of the Social Security Act (Act), which are referred to
herein as "Medicaid." The I.G.'s rationale was that
exclusion, for at least five years, is mandated by
sections 1128(a)(1) and 1128(c)(3)(B) of the Act because
Petitioner had been convicted of a criminal offense
related to the delivery of an item or service under
Medicaid.

Petitioner requested a review of the I.G.'s action by an
administrative law judge of HHS's Departmental Appeals
Board (DAB). The I.G. moved for summary disposition.

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

I find no reason to disturb the I.G.'s determination to
exclude Petitioner from participation in the Medicare and
Medicaid programs for a period of five years.
2
APPLICABLE LAW

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

FINDINGS OF FACT AND CONCLUSIONS OF LAW!

1. During the period relevant to this case, Petitioner
was a licensed pharmacist in the State of Ohio. P. Ex.
1.

2. On May 13, 1994, in the Franklin County Municipal
Court (State court), Columbus, Ohio, Petitioner pled
guilty to attempted Medicaid fraud, a misdemeanor. I.G.
Ex. 1.

3. The State court accepted Petitioner's guilty plea to
the charge of attempted Medicaid fraud and sentenced
Petitioner to 1) pay a $150 fine; 2) serve 90 days in
jail (suspended); and 3) probation for two years. I.G.
Ex. 2.

4. Petitioner was convicted within the meaning of
section 1128(i) of the Act. Act, section 1128(i) (1),
1128(i)(3); I.G. Exs. 1, 2; Findings 1 - 3.

5. Petitioner's conviction for attempted Medicaid fraud
is program-related within the meaning of section
1128(a)(1). I.G. Exs. 1, 2; Finding 4.

6. Petitioner was properly excluded from participation
in Medicare and Medicaid for the mandatory minimum five-

year period. I.G. Exs. 1, 2; Act, sections 1128(a) (1),
1128(c) (3)(B); Findings 1 - 5.

1 I cite to the parties' exhibits and my Findings of
Fact and Conclusions of Law as follows:

Petitioner's Exhibit ....... . . P. Ex. (number)
I.G.'s Exhibit ......4..4. +... I1.G. Ex. (number)

My Findings of Fact and
Conclusions of Law... .... . . Findings (number)
3
PETITIONER'S ARGUMENT

Petitioner acknowledges that he pled guilty to the
misdemeanor charge of attempted Medicaid fraud. However,
he argues that a misdemeanor is too trivial an offense to
justify exclusion from the Medicare and Medicaid
programs.

Petitioner contends that the State's prosecuting attorney
in his criminal case represented to him that he knew of
no further action that the federal government would take
against him. Petitioner further contends that for the
I.G. to direct and impose a five-year exclusion against
him violates the spirit and the terms of Petitioner's
plea agreement, because the intent of all parties in
entering into a plea agreement was to allow Petitioner to
keep his license and continue being a pharmacist
providing services to patients in federally funded
programs.

Petitioner asserts that excluding him would violate the
Eighth Amendment in that it would be cruel and unusual
punishment because it would preclude Petitioner from
being able to earn a living as a pharmacist. Finally,
Petitioner further argues that his exclusion from
Medicare and Medicaid constitutes double jeopardy.

DISCUSSION

The statute under which the I.G. seeks to exclude
Petitioner, section 1128(a)(1) of the Act, requires,
initially, that Petitioner have been convicted of a
criminal offense.

Section 1128(i) of the Act provides that an individual
will be deemed "convicted" under any of the following
circumstances:

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

(2) when there has been a finding of guilt against
the individual or entity by a federal, State, or
local court;
4

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

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

In the case at hand, sections 1128(i)(1) and (3) are
applicable. Petitioner pled guilty to the offense of
attempted Medicaid fraud and the State court accepted
Petitioner's plea. Moreover, the evidence shows that the
State court entered judgment against Petitioner because
Petitioner's guilty plea explicitly states that "[t]he
Court accepts the defendant's plea of 'guilty' and enters
a finding and judgment of 'guilty' accordingly." I.c.
Ex. 1.

The second requirement of section 1128(a)(1) of the Act
is that the criminal activity be program-related. In
this regard, Petitioner's conviction is, on its face,
program-related because Petitioner was convicted of
attempted Medicaid fraud. I.G. Exs. 1, 2. No further
connection need be shown. Scott Gladstone, M.D., DAB
CR331 (1994); Ian C. Klein, D.P.M., DAB CR177 (1992);
Qlufemi Okunoren, M.D., DAB CR150 (1991). Petitioner

admits that his conviction is program-related in page two
of his brief.

Petitioner pled guilty to the offense of attempted
Medicaid fraud. I.G. Exs. 1, 2. Webster's Dictionary
defines fraud as "intentional perversion of truth in
order to induce another to part with something of value
or surrender a legal right." Webster's Ninth New
Collegiate Dictionary 490 (9th ed. 1990).

? Petitioner submitted four exhibits in conjunction with
his motion for summary disposition. (P. Exs. 1-4). I
admit all four of Petitioner's exhibits into evidence.
The I.G. submitted three exhibits in conjunction with her
motion for summary disposition (I.G. Exs. 1 - 3). I
admit I.G. Exs. 1 and 2. I reject I.G. Ex. 3, as, per my
June 5, 1995 Order (Order), I instructed the parties not
to submit a copy of the Notice letter as an exhibit in
this case. The I.G. submitted two attachments which are

copies of DAB decisions in the cases of Larry D. Warden,
DAB CR299 (1993) and Glen E. Bandel, DAB CR261 (1993). I

have labelled these as Attachments 1 and 2 respectively,
but, as per my Order, I do not admit them into evidence
in this case.
5

In the context of this case, the evidence establishes
that the intended victim of Petitioner's fraud was the
Medicaid program. I1.G. Exs. 1, 2. The plain meaning of
the offense to which Petitioner pled guilty is that
Petitioner intentionally submitted a claim to Medicaid in
order to receive monetary reimbursement to which he was
not entitled. It is well established that such financial
crimes directed at Medicare or Medicaid are related to
the delivery of items or services under Medicare or
Medicaid. Jack W. Greene, DAB CR19, aff'd DAB 1078
(1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835, 838 (E.D. Tenn. 1990). Therefore, there is no
question that Petitioner's offense is program-related
within the meaning of section 1128(a)(1) of the Act.

As to Petitioner's contention that his exclusion would
subject him to cruel and unusual punishment, in violation
of his rights under the Eighth Amendment of the
Constitution, it is well settled that the primary purpose
of the exclusion sanction is remedial rather than
punitive. Moreover, the purpose of a mandatory exclusion
is to protect the integrity of the Medicare and Medicaid
programs, program beneficiaries, and the public from
persons who have been shown to be guilty of program-
related or patient-related crimes. Francis Shaenboen,
R.Ph., DAB CR97 (1990), aff'd DAB 1249 (1991). I have no
authority to rule on the constitutionality of
Petitioner's exclusion. Shanti Jain, M.D., DAB 1398
(1993); See 42 C.F.R. § 1005.4.

Petitioner further claims that subjecting him to an
exclusion is violative of the double jeopardy provisions
of the Constitution. However, double jeopardy does not
apply to a subsequent federal prosecution based on facts
which led to a State conviction. Abbate v. United
States, 359 U.S. 187 (1959). As an appellate panel of
the DAB expressed, the mandatory exclusion provision is
not comparable to the civil penalty imposed in Halper
(U.S. v. Halper, 490 U.S. 435 (1989)], but is remedial in
nature and, therefore, constitutionally inoffensive.

Janet Wallace, L.P.N., DAB 1126 (1992).

Finally, Petitioner argues that a five-year exclusion is
too harsh, given that he was convicted of only a
misdemeanor. The distinction that Petitioner is
attempting to make is not one that exists in the
application of the mandatory exclusion provisions of
sections 1128(a)(1) and 1128(c)(3)(B). The Act makes no
distinction between a felony conviction and a misdemeanor
conviction, it simply mandates that all persons or
entities convicted of program-related offenses are to be
excluded for the mandatory minimum five years. Larry D.
6

Warden, DAB CR299 (1993); Glenn E. Bandel, DAB CR261
(1993); Act, sections 1128(a)(1) and 1128(c) (3) (B); 42
C.F.R. §§ 1001.101, 1001.102.

CONCLUSION

Petitioner's exclusion, for at least five years, is
mandated by sections 1128(a)(1) and 1128(c)(3)(B) of the
Act because the I.G. has demonstrated that Petitioner was
convicted of a criminal offense related to the delivery
of an item or service under Medicaid.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Nick S. Pomonis, D.0O., DATE: September 28, 1995
Petitioner,

Docket No. C-95-090
Decision No. CR396

“ve

The Inspector General.

DECISION

By letter dated January 19, 1995, Nick S. Pomonis, D.O.,
Petitioner herein, was notified by the Inspector General
(I.G.) of the U.S. Department of Health & Human Services
(DHHS), that it had been decided to exclude him, for a
period of five years, from participation in the Medicare
program and from participation in the Medicaid, Maternal
and Child Health Services Block Grant and Block Grants to
States for Social Services programs, which are referred
to hereinafter collectively as "Medicaid." The I.G.'s
rationale was that exclusion, for at least five years, is
mandated by sections 1128(a)(1) and 1128(c) (3) (B) of the
Act because Petitioner had been convicted of a criminal
offense related to the delivery of an item or service
under Medicaid.

Petitioner filed a timely request for review of the

I.G.'s action by an administrative law judge of the

Departmental Appeals Board (DAB). The I.G. moved for
summary disposition.

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

As the I.G. has proven that Petitioner was convicted of a
criminal offense related to the delivery of an item or
service under the Medicaid program, within the meaning of
2

section 1128(a) (1) of the Social Security Act (Act), I
find no reason to disturb the I.G.'s determination to
exclude Petitioner from participation in the Medicare and
Medicaid programs for a period of five years.

APPLICABLE LAW

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

PETITIONER'S ARGUMENT AND OBJECTIONS
TO THE I.G.'s EXHIBITS

Petitioner contends that he was not convicted of any
offense under State law. Accordingly, Petitioner
contends that the I.G. had no basis to exclude him for
the five year mandatory period under section 1128(a) (1)
of the Act.

The I.G. submitted 15 exhibits (marked as I.G. Ex. 1
through 15) in conjunction with her motion for summary
disposition. Petitioner submitted six exhibits (marked
as P. Exs. 1 through 6) in conjunction with his
opposition to the I.G.'s motion for summary disposition.
Petitioner has objected to I.G. Exs. 2, 3, 5, 9, and 13.
The I.G. has not objected to any of Petitioner's
exhibits. The I.G. submitted four additional exhibits,
marked as I.G. Exs. 16 ~ 19, with her reply brief.
Petitioner has filed no objection to I.G. Exs. 16 - 19.
Although the I.G. submitted I.G. Exs. 16 ~ 19 untimely, I
find that she had good cause for doing so, as these
exhibits specifically address issues that were first
raised by Petitioner in his response brief. See 42
C.F.R. § 1005.4; 42 C.F.R. § 1005.8; 42 C.F.R. § 1005.15.

I overrule all of Petitioner's objections to the I.G.'s
exhibits. Petitioner has not argued that I should
exclude the I.G.'s exhibits because they are either

' Section 1128(a)(1) of the Act mandates that the
Secretary of the Department of Health and Human Services
(Secretary) exclude individuals and entities convicted of
program related criminal offenses from participation in
Medicare and shall direct that such individuals and
entities be excluded from participation in Medicaid.
3

irrelevant or immaterial. 42 C.F.R. § 1005.17(b). Nor
has Petitioner suggested that any of these exhibits
unfairly prejudice or confuse the issues before me. 42
C.F.R. § 1005.17(d). While Petitioner suggests that I
apply the Federal Rules of Evidence and reject the above
I.G. exhibits, I am not bound by the Federal Rules in the
context of this administrative proceeding. 42 C.F.R. §
1005.17.

As to I.G. Exs. 2 and 15, Petitioner contends that these
exhibits contains unsworn and incorrect allegations and
conclusions that are directly contradicted by his
affidavit. That objection is not proper in this
administrative forum. The fact that I.G. Exs. 2 and 15
are at odds with Petitioner's sworn statement is not
relevant to the exhibits' admissibility, but to the
weight I assign to these exhibit. Moreover, neither
Petitioner's affidavits nor any of his exhibits
contradict the vital points contained in I.G. Exs. 2 and
15.

The record as a whole establishes that Petitioner's plea
of nolo contendere was the direct result of Petitioner's
submission of a claim for reimbursement in the amount of
$177.72 for Medicaid services that were not in fact
provided as claimed by Petitioner. I.G. Exs. 1 - 8, 10 -
19; P. Exs. 1 - 4. Petitioner's contention that the
patients he saw on December 18, 1991 had other insurance
is not relevant to my determination here, nor does
Petitioner's exhibit support these contentions. The
documentation submitted by Petitioner contains nothing
which contradicts that Medicaid recipient PCN-511369544
was a Medicaid recipient on December 18, 1991, the date
she allegedly received treatment at his office. Nor does
anything in the record contradict that Petitioner's
submission of a claim for reimbursement to provide
Medicaid services to recipient PCN-511368544 in the
amount of $177.72 formed the basis for Petitioner's
conviction. I.G. Exs. 2, 3; P. Exs. 4, 5.

Additionally, Petitioner objects to the characterization
contained in I.G. Ex. 5. This objection is specious.

The I.G. is entitled to argue as to the meaning of I.G.
Ex. 5. It is my function as the finder of fact to
determine what interpretation that exhibit ultimately has
in the context of this case. I have done that in the
context of this Decision. The record as a whole supports
that the events described in I.G. Ex. 5 did occur in the
context of Petitioner's criminal case. Petitioner has
offered nothing substantive to contradict this evidence.
4

Petitioner objects to I.G. Ex. 9, which is a copy of the
letter notifying Petitioner of the I.G.'s determination
to exclude him. The basis for Petitioner's objection is
that the exclusion directed and imposed against
Petitioner by the I.G. is unreasonable. I take this
argument to mean that since the five-year exclusion of
Petitioner is unreasonable, the notice letter which the
I.G. sent to Petitioner, and which informed Petitioner of
his exclusion, is merely a self-serving, unsupported
statement by the I.G. I do not find I.G. Ex. 9
particularly helpful to me in my determination in this
case, but I do not reject it for the reasons argued by
Petitioner. In my prehearing order dated March 15, 1995,
I told the parties not to submit the notice letter as an
exhibit. Accordingly, I reject I.G. Ex. 9.

Petitioner objects to I.G. Ex. 13 because he received it
after he received notice of his exclusion. This exhibit
is a letter informing Petitioner that the I.G. has
considered additional information provided by Petitioner
and remains convinced that Petitioner should be excluded
under the mandatory exclusion provisions. Again, while I
do not find this exhibit particularly helpful to me in
making my Decision, there is nothing prejudicial to
Petitioner contained in this letter. The letter merely
states the I.G.'s position.

Accordingly, I admit I.G. Exs. 1 - 8 and 10 ~ 19 and P.
Exs. 1 through 6 into evidence for purposes of my
Decision in this case.

FINDINGS OF FACT AND CONCLUSIONS OF LAW?

1. During the period relevant herein, Petitioner was an
osteopathic physician licensed in the state of Texas.
I.G. Ex. 1.

2. On December 13, 1993, Petitioner was charged by the
State of Texas with committing deceptive business

? I cite to the parties' briefs and my Findings of
Fact and Conclusions of Law as follows:

Petitioner's Brief . .
I.G.'s Brief .....
Petitioner's Exhibit .
I.G.'s Exhibit. ...
My Findings of Fact and
Conclusions of Law... .. . . Finding (number)

» . ~P. Br. (page)
» . . I.G. Br. (page)
+ « ». P. Ex. (number)
« « . I.G. Ex. (number)
5

practices, a misdemeanor under Texas law. I.G. Exs. 1,
5, 10 at 2.

3. Specifically, the State alleged that Petitioner
claimed reimbursement from Medicaid for services he did
not actually provide to patients. I.G. Exs. 1, 2, 3, 19.

4. On December 14, 1993, Petitioner pled nolo contendere
to the misdemeanor charge of deceptive business
practices, as contained in the charging document, and the
plea was accepted by the court. I.G. Exs. 1, 3, 5, 10 at
2; P. Ex. 4.

5. The judge receiving Petitioner's plea issued a
"Deferred Adjudication Order," requiring Petitioner to be
placed on probation for 6 months, pay a fine, and pay
restitution in an unspecified amount. I.G. Exs. 3, 4, 5;
P. Exs. 2, 4.

6. Petitioner's plea of nolo contendere is a conviction
for purposes of section 1128(a)(1) of the Act. Act,
section 1128(i)(3). Finding 4.

7. Petitioner's participation in a deferred adjudication
program is a conviction for purposes of section
1128(a)(1) of the Act. Act, section 1128(i)(4). Finding
5.

8. Petitioner's conviction for deceptive business
practices was based on his claiming to have provided
$177.72 of Medicaid services which he did not in fact
provide. I.G. Exs. 1, 2, 3; Findings 6, 7.

9. Inasmuch as (1) Petitioner's plea of nolo contendere
was accepted by the court; (2) the offense to which
Petitioner pled was related to his delivery of an item or
service under Medicaid; and (3) Petitioner participated
in a formal deferred adjudication program, Petitioner's
conviction satisfies the criteria set forth in section
1128(a)(1) of the Act. Findings 4 - 8; Act, section
1128(a) (1).

10. On or about June 3, 1994, Petitioner satisfied the
deferred adjudication requirements imposed by the court,
whereupon the court terminated his probation, permitted
him to withdraw his plea, and dismissed the charges
against him. P. Ex. 2; I.G. Exs. 8, 19.

11. Prior to the June 3, 1994 action by the State court,
on April 25, 1994, the court entered an order dismissing
the criminal complaint against Petitioner because he
6

fulfilled the terms of his probation. P. Ex. 2; I.G.
Exs. 6, 19.

12. On May 6, 1994, the State court granted Petitioner's
motion for a new trial in Petitioner's misdemeanor case.
P. Ex. 1; I.G. Ex. 6, 19.3

13. In an order dated June 1, 1994, the State court
vacated its May 6 order granting Petitioner a new trial,
and set aside its April 25, 1994 order. I.G. Ex. 19;
Findings 11 - 12.

14. On April 20, 1995, the State court dismissed
separate felony indictments against Petitioner. I.G. Ex.
19.

15. The State court's dismissal of Petitioner's felony
indictments did not affect the misdemeanor charge of
deceptive business practices to which Petitioner pled
nolo contendere. I.G. Ex. 19.

16. Federal law is controlling in determining whether an
individual has been "convicted" for purposes of section
1128(a)(1). Act, section 1128(i).

17. Petitioner was properly excluded pursuant to the
mandatory five year exclusion provision contained in the
Act. Act, sections 1128(a) (1), 1128(c)(3)(B). Findings
1 - 16.

18. I have no authority to reduce the five-year
exclusion that the I.G. has directed and imposed upon
Petitioner. Act, sections 1128(a)(1), 1128(c)(3)(B); 42
C.F.R. §§ 1001.102, 1005.4. Findings 1 - 17.

DISCUSSION

The law relied upon by the I.G. to exclude Petitioner
requires, initially, that the person to be excluded have
been convicted of a crime.

Section 1128(i) provides that an individual will be
deemed to have been "convicted" of a crime under any of
the following circumstances:

(1) when a judgment of conviction has been entered
against the individual or entity by a federal,

3p, Ex. 1 and I.G. Ex. 6 are identical copies of
Petitioner's May 2, 1994 motion for new trial.
7

State, or local court, regardless of whether there
is an appeal pending or whether the judgment of
conviction or other record relating to criminal
conduct has been expunged;

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

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

(4) when the individual or entity has entered into
participation first offender, deferred adjudication,
or other arrangement or program where formal
judgement of conviction is withheld in order to give
a defendant an opportunity to correct his conduct or
make restitution, in the hope that this will
convince the judge that no formal finding of guilt
is necessary.

In the case at hand, Petitioner, an osteopath, was
charged with intentionally billing the Medicaid program
for services he did not, in fact, render as claimed. He
entered a plea of nolo contendere to the charges and a
State judge sentenced him to a fine and probation,
imposed in the context of deferred adjudication. Finding
5. The I.G. argues that Petitioner has been convicted of
a criminal offense for purposes of the exclusion statute
because his nolo plea was accepted by the court and
because he was placed on deferred adjudication as part of
sentencing. Findings 6, 7.

It is well established in numerous DAB and federal court
decisions that a criminal conviction based on filing
false claims for reimbursement from Medicare or Medicaid
mandates exclusion under 1128({a)(1). Jack W. Greene, DAB
CR19, aff'd DAB 1078 (1989), aff'd sub nom.

Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990). Therefore,
Petitioner's submission of documents to Medicaid in which
he claimed reimbursement from Medicaid for services that
were not provided as claimed constitutes financial
misconduct related to the delivery of Medicaid services.

Petitioner, however, has a very different analysis of the
question of whether he was convicted. He argues that, in
Texas, when a prior court decision is vacated, and/or a
new trial ordered, the case "is restored to its position
before any former trial and/or plea or holding by the
court." Consequently, since he sought and was granted a
new trial in his criminal case, his plea and the court's
8

holdings become nullities. Since his conviction no
longer existed, Petitioner contends, there was no legal
basis for excluding hin.

However, contrary to Petitioner's argument, the DAB has
concluded that a determination of whether an individual
has been convicted within the meaning of section 1128(i)
of the Act is a matter of federal law, and that a State
court's determination is not controlling. Michael P.
Hiotis, DAB CR316 (1994). The federal courts, too, have
held that what constitutes a conviction under the
Medicaid Act is determined by federal law not State law.

Dickerson v. New Banner Institute Inc., 460 U.S. 103, 110
(1983).

The federal law which controls this case is section
1128(i) of the Act, quoted above. It has been held by
this office, and affirmed by an appellate panel of the
DAB, that Congress intended mandatory exclusion to apply
to all situations in which a person is convicted of a
program-related offense, and that a conviction remains a
conviction, with regard to section 1128(a), even if it is
subsequently expunged from the defendant's record.
Carlos E. Zamora, DAB CR22, aff'd DAB 1104 (1989). The
legislative intent of the Act could not be clearer than
that expressed by the congressional committee that
drafted the 1986 amendments to the exclusion law:

The principal criminal disposition to which the
exclusion remedy [currently] does not apply are the
"first offender" and "deferred adjudication"
dispositions. It is the Committee's understanding
that States are increasingly opting to dispose of
criminal cases through such programs, where judgment
of conviction is withheld. The Committee is
informed that State first offender or deferred
adjudication programs typically consist of a
procedure whereby an individual pleads guilty or
nolo contendere to criminal charges, but the court
withholds the actual entry of a judgment of
conviction against them and instead imposes certain
conditions of probation, such as community service
or a given number of months of good behavior. If
the individual successfully complies with these
terms, the case is dismissed entirely without a
judgment of conviction ever being entered.

These criminal dispositions may well represent
rational criminal justice policy. The Committee is
concerned, however, that individuals who have
entered guilty or nolo [contendere] pleas to
criminal charges of defrauding the Medicaid program
9

are not subject to exclusion from either Medicare or
Medicaid. These individuals admitted that they
engaged in criminal abuse against a Federal health
program and, in the view of the Committee, they
should be subject to exclusion. If the financial
integrity of Medicare and Medicaid is to be
protected, the programs must have the prerogative
not to do business with those who have pleaded to
charges of criminal abuse against them.

H.R. Rep. No. 727, 99th Cong., 2d Sess. 75 (1986),
reprinted in 1986 U.S.C.C.A.N. 3607, 3665.

Consequently, Texas law does not control the outcome
here. The case law and statutory intent both support
that Petitioner was convicted by pleading nolo contendere
and by his participation in a deferred adjudication
program, irrespective of the fact that the charges were
dismissed before a conviction was entered. Findings 6,
7.

The second requirement of section 1128(a)(1) is that the
conviction must be related to the delivery of an item or
service under Medicare or Medicaid.

Petitioner has submitted an affidavit in which he states
that he did not commit the offense to which he pled nolo
contendere. P. Ex. 5. Petitioner further states in his
affidavit that it was not his understanding that he was
being charged with deceptive business practices related
to the Medicare or Medicaid program. P. Ex. 5.
Petitioner has also submitted an affidavit from an
employee that, in part, attacks the Medicaid fraud
investigator's report (I.G. Ex. 15). P. Ex. 6. However,
as I stated in overruling Petitioner's objection to I.G.
Ex. 5, nothing in either P. Ex. 5 or P. Ex. 6 contradicts
the evidence of record that Petitioner's plea of nolo
contendere was the direct result of Petitioner's
submission of a claim for reimbursement for Medicaid
services in the amount of $177.72 that were not in fact
provided as claimed by Petitioner. I.G. Exs. 1 - 8, 10 -
19; P. Exs. 1 - 4.4 The I.G.'s contention that Medicaid

* Although the evidence of record establishes that
Petitioner paid $19,886 in restitution to the Texas
Attorney General's Medicaid Fraud Control Unit, the I.G.
has not alleged the aggravating factor at 42 C.F.R. §
1001.102(b) (2) [acts resulting in conviction, or similar
acts, resulted in financial loss to Medicare and Medicaid
of $1,500 or more). I.G. Exs. 5, 15. Moreover, the
evidence indicates that most, if not all, of the
10

recipient PCN-511369544 was a Medicaid recipient on
December 18, 1991 is undisputed, even by a generous
reading of Petitioner's exhibits. Petitioner's statement
that it was never his understanding that the charge of
committing deceptive business practices was related to
Medicare or Medicaid is irrelevant. P. Ex. 5 at 2.

The fact remains that the I.G. has submitted a statement
from the prosecuting attorney, who has personal knowledge
of the nature of the charges against Petitioner, that the
charge to which Petitioner pled nolo contendere was based
on Petitioner's failure to provide services to Medicaid
recipient PCN-5511368544. I.G. Exs. 5, 19. Petitioner
has offered nothing to contradict that the investigation
conducted by the Texas Medicaid Fraud Bureau found that
Petitioner had submitted a claim for reimbursement for
Medicaid services that were not provided as claimed and
formed the basis for the charge of deceptive business
practices to which Petitioner ultimately pled. I.G. Exs.
1-5, 19. Nor does anything in the record contradict
that Petitioner's submission of a claim for reimbursement
to provide Medicaid services to recipient PCN-511368544
in the amount of $177.72 formed the basis for
Petitioner's conviction. I.G. Ex. 2, 3; P. Ex. 4, 5.

The affidavits that Petitioner contends cast doubt upon
the I.G.'s assertion that Petitioner's nolo contendere
plea is program related simply fail to do so. P. Ex. 5.

restitution of $19,886 was paid for offenses which are
not related to the offense to which Petitioner pled nolo
contendere, because the affidavit from the prosecuting
attorney states that the $19,886 in restitution was for
many offenses that were allegedly outside the statute of
limitations. I.G. Exs. 2, 3, 4, 5. Obviously, any
offense that Petitioner allegedly committed outside of
the criminal statute of limitations was not the basis for
Petitioner's plea of nolo contendere. I.G. Exs. 2, 3, 4,
5.

The court documents do not state with specificity the
amount of restitution that Petitioner was required to
pay. However, the record as a whole does reflect that
Petitioner pled guilty to one count of deceptive business
practices, where Medicaid services totalling $177.72 were
not provided as claimed by Petitioner. I.G. Exs. 2, 3.
However, I am unable to make any conclusions regarding
the amount of restitution Petitioner was made to pay as a
result of his pleading nolo contendere to the charge of
deceptive business practices, nor is it necessary for me
to do so in this case. I.G. Exs. 2, 3.
11

Petitioner states in his affidavit that the charges
against him do not state that they involved Medicare or
Medicaid and further states that it was not his
understanding that he was being charged with an offense
related to Medicare or Medicaid. These statements do
nothing to contradict the evidence against Petitioner.
Whether Petitioner understood that the charges to which
he pled nolo contendere involved Medicare or Medicaid is
irrelevant to my Decision in this case. Furthermore, it
is well established that having the words Medicare or
Medicaid within the conviction documents is not a
prerequisite to a finding that the conviction is program
related. Napoleon S. Maminta, M.D., DAB 1135 (1990);
Robert C. Greenwood, N.A., DAB 1423 (1993).

The affidavit submitted by Petitioner's nurse likewise
fails to cast doubt upon the program related nature of
Petitioner's offense. P. Ex. 6. The affidavit's primary
focus is the accuracy of the I.G. investigator's report
contained at I.G. Ex. 15. However, the affidavit does
not address the accuracy of the report contained at I.G.
Ex. 2, which states that the basis for the charge to
which Petitioner pled nolo tontendere was Petitioner's
failure to provide services to a Medicaid recipient.
I.G. Ex. 2; P. Ex. 6. Nor does the affidavit contained
at P. Ex. 6 contradict any of the evidence on the
critical issues of whether Petitioner was convicted and
whether that conviction is program related.

Finally, Petitioner has requested oral argument for the
purpose of presenting his arguments and evidence. I deny
Petitioner's request. Petitioner has no inherent right
to an oral argument. 42 C.F.R. § 1005.3, 1005.4. The
regulations grant me the discretion to grant or deny any
motion by either party, including a motion for oral
argument. 42 C.F.R. § 1005.3, 1005.4. I exercise that
discretion here and deny Petitioner's request for oral
argument.

Petitioner has already submitted his argument and
evidence through his briefs. and exhibits, as well as a
sworn statement on his own behalf and an affidavit from
his nurse. P. Exs. 5, 6. Both of these exhibits contain
denials stating that Petitioner did nothing wrong.
However, as I stated above, these affidavits are not
probative of the critical aspects of this case, that is,
whether Petitioner was convicted of a criminal offense
and whether that conviction is related to the delivery of
an item or service under Medicaid. To the extent that
Petitioner's affidavit contains a denial of his
conviction, it amounts to a collateral attack upon his
conviction, which I cannot consider in the context of
12

this case. Petitioner cannot use this forum to
collaterally attack his conviction. Jan C. Klein,
D:P.M., DAB CR177 (1992); Qlufemji Okunoren, M.D., DAB
CR150 (1991). Whether Petitioner knew that his
conviction in State court would result in an exclusion
from Medicare and Medicaid is also irrelevant. Thomas
Malik, DAB CR357 (1995); Douglas Schram, R.Ph., DAB CR215
(1992), aff'd DAB 1372 (1992).

As I find above, it is Petitioner's plea of nolo
contendere, and the fact that the conduct to which
Petitioner pled nolo contendere is program related that
triggers the mandatory exclusion. The statute requires
only a common sense connection between the criminal
offense and the delivery of items or services under
Medicare or Medicaid. Berton Siege], D.Q., DAB 1467, at
5 (1994); Thelma Walley, DAB CR207 (1992); Boris
Lipovsky, M.D., DAB 1363 (1992). The I.G. has more than
met her burden to establish a common sense connection
between Petitioner's plea of nolo contendere and the
Medicaid program. The record as a whole establishes that
Petitioner's plea of nolo contendere to the charge of
deceptive business practices was the result of his not
providing services to a Medicaid recipient as he claimed
to have done.

Under the law and regulations governing this case,
Petitioner must be excluded for a mandatory five-year
period once it is established that the offense to which
he pled nolo contendere is program related. Act, section
1128(a)(1); 42 C.F.R. § 1001.101, 1001.102. Petitioner
has not made any showing that an oral argument is
necessary in this case, nor has Petitioner made any
proffer that oral argument would be helpful to me in
deciding this case. I am not permitted to consider any
factors Petitioner may have to offer in mitigation unless
the exclusion imposed and directed by the I.G. is for
more than the five-year mandatory period and the I.G. has
alleged an aggravating factor. 42 C.F.R. § 1001.101,
1001.102. I have no authority to reduce Petitioner's
exclusion based on any mitigating factors that Petitioner
may allege at oral argument.

I have considered the statement made to me by Petitioner
in his affidavit, but nothing in that statement can serve
as a basis from which I can reduce his exclusion below
the five-year mandatory period. The evidence in this
case establishes that Petitioner was convicted within the
meaning of section 1128(i) and that his conviction is
program related under section 1128(a)(1). These are the
only issues before me in this case. The regulations do
13

not permit me to assess mitigating factors in this case
of mandatory exclusion.

CONCLUSION

Sections 1128(a) (1) and 1128(c)(3)(B) of the Act make it
mandatory for the Petitioner who has been convicted of a
criminal offense related to the delivery of an item or
service under Medicare or Medicaid to be excluded from
participation in such programs for a period of at least
five years. Accordingly, because the I.G. has
established that Petitioner has been convicted and has
further shown that Petitioner's conviction is related to
the delivery of Medicaid items or services, I have no
discretion but to uphold the mandatory five-year
exclusion imposed and directed against Petitioner by the
I.G.

/s/

Joseph K. Riotto
Administrative Law Judge