Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:

Buford Gibson, Jr., M.D., Date: October 10, 1997

Petitioner,

“Ver Docket No. C-97-127
Decision No. CR499

The Inspector General.

DECISION

I conclude that the 10-year exclusion imposed and directed
against Petitioner, Buford Gibson, Jr., M.D., from participating
as a provider in Medicare and other federally financed health
care programs is reasonable.

PROCEDURAL HISTORY

By letter dated November 19, 1996, the Inspector General (I.G.)
of the United States Department of Health and Human Services
(DHHS) notified Petitioner that, as a result of his conviction of
a criminal offense related to the delivery of an item or service
under the Medicaid (Medi-Cal) program, he was being excluded for
10 years from participation in the Medicare, Medicaid, Maternal
and Child Health Services Block Grant and Block Grants to States
for Social Services programs.' The I.G. further advised
Petitioner that exclusion is mandated by section 1128(a) (1) of
the Social Security Act (Act),? that a five-year minimum period
of exclusion is required by section 1128(c) (3)(B) of the Act, and
that Petitioner's 10-year period of exclusion took into
consideration certain specified aggravating factors.

1 Unless otherwise indicated, hereafter I refer to all
programs from which Petitioner has been excluded, other than
Medicare, as "Medicaid."

2 Those parts of the Act discussed herein are codified in
42 U.S.C. § 1320a-7.
2

By letter dated December 20, 1996, Petitioner filed a request for
hearing. Petitioner asserts that his conviction was not related
to the delivery of an item or service under Medicare and
indicates that he did not bill Medicare for any services during
this time. Petitioner also challenges the length of his
exclusion, stating that if he must be excluded, a five-year
exclusion should suffice to accomplish the remedial purposes of
the Act.

The I.G. filed her Brief in Support of Exclusion, with 10
exhibits (I.G. Ex. 1-10). Petitioner filed his Brief in Support
of Non-Exclusion or Limited Exclusion, with four exhibits (P. Ex.
1-4). The I.G. filed her Reply Brief, with three additional
exhibits (I.G. Ex. 11-13). Petitioner filed his Reply Brief.’

Petitioner does not object to the admission into evidence of the
exhibits submitted by the I.G., and I admit into evidence I.G.
Ex. 1 through 13. The I.G. objects to the admission into
evidence of the exhibits submitted by Petitioner. I.G. R. Br. at
4. Over the I.G.'s objection, I admit into evidence P. Ex. 1
through 4. No facts of decisional significance are in dispute
and, consequently, there is no need for an in-person hearing.

Based on the law, the evidence before me, and the parties'
written arguments, I conclude that Petitioner's 10-year period of
exclusion comports with the remedial purposes of the Act and is
reasonable. Accordingly, I affirm the 10-year exclusion.

ISSUES

The first issue is whether Petitioner's conviction is related to
the delivery of an item or service under Medicare or Medicaid.

The second issue is whether the 10-year exclusion which the I.G.
imposed and directed against Petitioner is unreasonable. 42
C.F.R. § 1001.2007(a) (1) (ii).

3 In this Decision, I refer to the parties' submissions
as follows:
Petitioner's

I.G. Submissions Submissions

Brief in Support of Brief in Support of

Exclusion [I.G. Br.] Non-Exclusion or
Limited Exclusion

Reply Brief (P. Br.)

(I.G. R. Br.]
Reply Brief
[P. R. Br.]
3
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCL)

1. Petitioner, a physician trained in adult and child
psychiatry, was licensed to practice medicine in the State of
California. I.G. Ex. 10, 11.

2. Petitioner pled guilty to Grand Theft "(f)rom on or about
May 18, 1991, to on or about January 31, 1992," in Count 3 of an
Information filed in Superior Court, State of California, County
of Los Angeles (Superior Court). I.G. Ex. 1, 4, 5, 6, 7, 8.

3. As enhancements to Count 3, Petitioner admitted to Special
Allegations of Excessive Taking, in an amount in excess of
$150,000, plus an additional amount in excess of $100,000,
totalling an amount in excess of $250,000. I.G. Ex. 1, 4, 5, 6,
7.

4. In November 1995, the Superior Court sentenced Petitioner to
five years' probation, requiring, among other things, that he pay
restitution to Medi-Cal (California's Medicaid program) in the
amount of $500,000, either jointly with his two co-defendants or
severally. I.G. Ex. 6, 7.

5. Petitioner was convicted of a criminal offense, within the
meaning of section 1128(i) of the Act. FFCL 2-4. 42 U.S.C. §
1320a-7(i).

6. Petitioner's conviction is based on his participation in the
submission of false claims to Medi-Cal for psychiatric services
which were, in fact, provided by non-physicians. I.G. Ex. 8.

7. Petitioner's conviction is related to the delivery of an
item or service under Medi-Cal, which is a State health care
program within the meaning of section 1128(a)(1) of the Act. 42
U.S.C. §§ 1320a-7(a) (1), 1320a-7(h); FFCL 4-6.

8. The Secretary of DHHS (Secretary) has delegated to the I.G.
the authority to exclude individuals from participation in
Medicare and to direct their exclusion from participation in
Medicaid. 48 Fed. Reg. 21,662 (1983); 53 Fed. Reg. 12,993
(1988).

9. The I.G. was required to exclude Petitioner from
participating in Medicare and to direct his exclusion from
participating in Medicaid for at least five years. Act, sections
1128(a) (1), 1128(c) (3) (B); 42 U.S.C. §§ 1320a-7(a) (1), 1320a-

7 (c) (3) (B).

10. The evidence proves two aggravating factors, either of which
may be considered as a basis for lengthening the period of
exclusion beyond the mandatory five years. 42 C.F.R. §
1001.102(b) (1), (6); FFCL 3, 4.
4

11. The evidence is insufficient to prove two other aggravating
factors alleged by the I.G. 42 C.F.R. § 1001.102(b) (2), (3).

12. None of the mitigating factors applies. 42 C.F.R. §
1001.102(c) (1)-(3).

13. The evidence relevant to the two aggravating factors proves
Petitioner to be untrustworthy to the extent that a 10-year
exclusion is reasonably necessary to protect the integrity of
federally financed health care programs, and to protect program
beneficiaries and recipients.

14. The 10-year exclusion imposed and directed against
Petitioner by the I.G. comports with the remedial purposes of the
Act and, consequently, is reasonable. FFCL 1-13.

DISCUSSION

The I.G. excluded Petitioner from participating in Medicare and
directed that he be excluded from participating in Medicaid,
pursuant to section 1128(a) (1) of the Act.‘ The evidence proves
that Petitioner was convicted under California law of a criminal
offense, Grand Theft. The Grand Theft charge was predicated on
Petitioner's involvement in a scheme to defraud the Medi-Cal
program by generating false claims to Medi-Cal for psychiatric
services which were, in fact, provided by non-physicians. FFCL
6. Further, Petitioner was ordered to pay restitution to Medi-
Cal, which is a State Medicaid program. FFCL 4. Thus,
Petitioner's Grand Theft conviction is related to the delivery of
an item or service under Medi-Cal. 42 U.S.C. § 1320a-7(a) (1), 42

U.S.C. § 1320a-7(h). See Tito B. Trinidad, M.D., DAB CR468, at 6
(1997), and Niranjana B. Parikh, M.D., DAB No. 1334, at 5-6
(1992).

Consequently, a five-year exclusion is required as a matter of
law as a result of Petitioner's Grand Theft conviction. It is
not necessary that Petitioner's conviction involve Medicare, as
Petitioner seems to argue; a conviction related to a State health

4 Section 1128(a)(1) of the Act states:

Sec. 1128 (a) Mandatory Exclusion.-The Secretary shall
exclude the following individuals and entities from
participation in any program under title XVIII and shall
direct that the following individuals and entities be
excluded from participation in any State health care program
(as defined in subsection (h)): (1) CONVICTION OF PROGRAM-
RELATED CRIMES-Any individual or entity that has been
convicted of a criminal offense related to the delivery of
an item or service under title XVIII or under any State
health care program.
5

care program, such as Medi~Cal, also triggers exclusion.
Petitioner never asserted that his conviction was not related to
Medi-Cal. 42 U.S.C. §§ 1320a-7(a) (1), 1320a-7(h); I.G. R. Br. at
2-4.

Aggravating factors specified in the regulations may be
considered to be a basis for lengthening the period of exclusion.
The reasonableness of the length of any exclusion imposed for a
period of more than five years will be decided based on the
presence of, and the weight assigned to, certain aggravating and
offsetting mitigating factors, if any, which the regulations
identify. 42 C.F.R. § 1001.102(b)(1)-(6), (c)(1)-(3)-

An administrative law judge is obligated to decide, using the
factors contained in the regulations, whether an exclusion of a
particular length is reasonably necessary to protect the
integrity of federally financed health care programs and the
welfare of the programs' beneficiaries and recipients. Rosaly

Saba Khalil, M.D., DAB CR353, at 10 (1995); Dr, Abdu] Abassi, DAB
CR390, at 3-4 (1995). Evidence that does not fall within any of
the aggravating or mitigating factors contained in the
regulations will not be considered as evidence of a party's
trustworthiness. Abassi, DAB CR390, at 3-4.

Petitioner asserts that his motivation was and is to serve the
poor and the underserved, that his patients loved him, that the
quality of his care was great, and that he gave to the community
and actively participated in his church. P. Br. at 4-6.
Petitioner's assertions may be true, but they do not affect my
evaluation of the reasonableness of Petitioner's exclusion. The
regulations limit the factors which an administrative law judge
can consider as relevant to an excluded party's trustworthiness
to provide care.

Although the I.G. alleges four aggravating factors (42 C.F.R. §
1001.102(b) (1), (2), (3), (6)), I find that only two aggravating
factors apply in Petitioner's case (42 C.F.R. § 1001.102(b) (1)
and (6)). No mitigating factors apply in Petitioner's case.

I. Aggravating factors

Below, I discuss the four aggravating factors asserted by the
I.G., 42 C.F.R. § 1001.102(b) (1), (2), (3), (6). I discuss also
the weight I have assigned to the two aggravating factors that
have been proved, taking the most weighty first. 42 C.F.R. §
1001.102(b)(1) and (6).

A. Financial loss to Medicaid

The most weighty aggravating factor in Petitioner's case is the
financial loss to Medicaid. 42 C.F.R. § 1001.102(b) (1).
6

The threshold that triggers this aggravating factor is $1,500.
California's Medicaid program, Medi-Cal, lost at least $500,000,°
as confirmed by the $500,000 in restitution to Medi-Cal required
under the plea agreement to be paid by Petitioner and his two co-
defendants, either jointly or severally. I.G. Ex. 6 at 1.

The more-than-$500,000 loss to Medi-Cal is far greater than the
$1,500 threshold that triggers this aggravating factor (42 C.F.R.
§ 1001.102(b) (1)) and demonstrates the magnitude of Petitioner's
untrustworthiness. The more-than-$500,000 loss to Medi-Cal
persuades me that Petitioner's period of exclusion must be
lengthened significantly beyond the mandatory five years.

B. Overpayment to Petitioner

The next most weighty aggravating factor is the overpayment to
Petitioner by Medi-Cal as a result of the improper billings. 42
C.F.R. § 1001.102(b) (6).

The threshold that triggers this aggravating factor is $1,500.
The amount of Petitioner's illegal gain is evidenced by his
admission during his guilty plea to two enhancements to Count 3,
Special Allegations of Excessive Taking, in excess of the amounts
of $150,000 (the first Special Allegation) and $100,000 (the
second Special Allegation). I.G. Ex. 1 at 6-7; I.G. Ex. 4, 5, 6,
7. Thus, Petitioner illegally gained in excess of $250,000.

Petitioner's illegal gain is further confirmed by the $500,000°
in restitution to Medi-Cal that Petitioner is required to pay
under the plea agreement, either jointly with his two co-
defendants or severally. I.G. Ex. 6 at 1.

5 Evidence from outside the Court proceedings indicates

the loss to Medi-Cal caused by Petitioner and his two co-
defendants was actually in excess of 1.2 million dollars. I.G.
Ex. 3 at 1.

6 Further, the company co-owned by Petitioner and his two
co-defendants, the Institute of Advanced Therapy (I.A.T.), was
the vehicle that Petitioner and his two co-defendants used to
bill Medi-Cal illegally. The illegal gain to I.A.T. actually
exceeded 1.2 million dollars, according to an auditor from the
Financial Crimes Unit of the California State Attorney General's
Office. This evidence was from outside the Court proceedings.
I.G. Ex. 3 at 1.
7

The $250,000 or more of illegal gain to Petitioner goes far
beyond the $1,500 threshold that triggers this aggravating factor
and underscores his untrustworthiness. Again I am persuaded that
Petitioner's period of exclusion must be lengthened significantly
beyond the mandatory five years.

c. Insufficient proof that Petitioner's acts were
committed over a period of one year or more

The I.G. asserts that the acts resulting in Petitioner's
conviction, or similar acts, were committed over a period of one
year or more. 42 C.F.R. § 1001.102(b)(2). While that may be
true, it has not been proved to my satisfaction in the record
before me.

The Grand Theft count to which Petitioner pled guilty specifies a
period of more-than-eight months, "(f)rom on or about May 18,
1991, to on or about January 31, 1992." I.G. Ex. 1 at 6; I.G.
Ex. 4, 5, 6, 7; FFCL 3.

Petitioner may have committed similar acts in addition to those
specified in the Grand Theft count to which he pled guilty. If
one considers the similar acts charged in the indictment, alleged
to have been committed at various times from May 18, 1991 through
December 1992, Petitioner's acts took place over approximately a
19-month period. I.G. Ex. 1. In addition, there was also the
warning letter to Petitioner from California's Attorney General,
dated January 14, 1991, advising Petitioner that only services
provided by licensed physicians may be billed to Medi-Cal under
procedure code 90844, and that "(u)sing this procedure code to
bill the Medi-Cal program for services rendered by non-physicians
constitutes fraud." I.G. Ex. 2. This letter leads me to believe
that Petitioner may have committed similar acts before, as well
as after, the more-than-eight month period covered by the Grand
Theft count to which he pled guilty.

Nevertheless, I am unable to glean reliable specifics of similar
acts from the evidence to substantiate the allegation that
Petitioner's pattern of repeated similar acts occurred over a
period of one year or more. When Petitioner pled guilty, he
admitted to committing acts that constitute Grand Theft during a
period of more-than-eight months. I make no finding beyond the
more-than-eight months that he admitted.

D. nsufficie: that Petitioner's acts had

significant adverse impact on program
beneficiaries or others

The I.G. asserts that the acts which resulted in Petitioner's
conviction, or similar acts, had a significant adverse physical,
mental, or financial impact on one or more program beneficiaries
or other individuals. 42 C.F.R. § 1001.102(b) (3).
8

The evidence of record is insufficient to show "that I.A.T.'s
Medi-Cal patients paid substantial amounts in inflated co-
insurance and deductibles," as argued by the I.G. I.G. Br. at
16. I do not know whether Medi-Cal patients pay any portion of
covered services. No evidence was presented to me regarding what
portion, if any, Medi-Cal patients pay of covered services.

The evidence is also insufficient to show that beneficiaries or
others were harmed by psychotherapy treatments by non-physicians.
I.G. Ex. 9 at 2.

Absent specific evidence of significant adverse physical, mental,
or financial impact, I conclude that this aggravating factor has
not been proved.

II. Mitigating factors

I can only consider the mitigating factors identified by the
regulations. 42 C.F R. § 1001.102(c) (1)-(3). None of the
mitigating factors applies in Petitioner's case.

III. Collateral attack on Petitioner's conviction

Petitioner argues that he did not "handle any money" and did not
do the billing at I.A.T. P. Br. at 2-3. Petitioner's arguments
are unavailing, however, because he may not argue the merits of
his criminal case in this administrative proceeding. His
arguments amount to a collateral attack on his conviction. The
correct forum for the Petitioner to have dealt with the
circumstances of his criminal case was the State court in which
he was charged criminally. Francis Shaenboen, R.Ph., DAB No.
1249, at 9 (1991). Paul R. Scollo, D.P.M., DAB No. 1498, at 14
(1994).

The regulations which apply in this case provide that --

When the exclusion is based on the existence of a
conviction, . . . the basis for the underlying determination
is not reviewable and the individual or entity may not
collaterally attack the underlying determination, either on
substantive or procedural grounds. . .

42 C.F.R. § 1001.2007(d).
An appellate panel of the Departmental Appeals Board discussed

the reasoning behind this rule, with regard to a mandatory
exclusion taken under section 1128(a) (2) of the Act, in the case
9

of Peter J. Edmonson, DAB No. 1330 (1992). In Edmonson, the
appellate panel held:

It is the fact of the conviction which causes the exclusion.
The law does not permit the Secretary to look behind the
conviction. Instead, Congress intended the Secretary to
exclude potentially untrustworthy individuals or entities
based on criminal convictions. This provides protection for
federally funded programs and their beneficiaries and
recipients, without expending program resources to duplicate
existing criminal processes.

Id. at 4. See also Anthony Accaputo, Jr., DAB No. 1416 (1

As for Petitioner's argument that he was unaware that his

plea could serve as the basis for the I.G.'s exclusion, a similar
argument was rejected in the case of Douglas Schram, R.Ph., DAB
CR215 (1992), aff'd, DAB No. 1372 (1992). In rejecting
Petitioner's argument, the Administrative Law Judge cited U.S. v.
Suter, 755 F.2d 523, 525 (7th Cir. 1985), and noted that the
court had held that a defendant in a criminal proceeding does not
have to be advised of all the possible consequences which may
flow from his plea. These consequences may include, as is the
case here, temporarily being barred from the receipt of
government reimbursement for professional services. See Paul
Karsch, DAB CR454 (1997), and Thomas Malik, DAB CR357 (1995).

Iv. Reasonableness of the 10-year exclusion

Petitioner deliberately and systematically defrauded Medi-Cal,
California's Medicaid program, to obtain illegal payments for the
company co-owned by Petitioner and his two co-defendants, I.A.T.
FFCL 6; I.G. Ex. 3. The theft by I.A.T. from Medi-Cal may have
exceeded the $500,000 in restitution they were ordered to repay
to Medi-cal.

I.A.T. billed Medi-Cal for psychotherapy provided by a licensed
physician [Petitioner] when the "services" had instead been
provided by licensed psychologists or even unlicensed personnel.
FFCL 6. Even after having been warned by California's Attorney
General to stop submitting these false claims to Medi-Cal,
Petitioner persisted in the illegal scheme. I.G. Ex. 2.
Petitioner's guilty plea acknowledges his responsibility.
Petitioner maintains that because Medicare was not involved, but
only California's Medi-Cal program, the State of California's
judgment should suffice, because it is reasonable and designed to
accomplish the remedial purpose of the judgment. Alternatively,
Petitioner argues that if the exclusion must be upheld, a five-
year exclusion is reasonable to accomplish the remedial purpose.
10

I disagree with Petitioner and, instead, agree with his Probation
officer, who wrote: "The incidents in question are interpreted
as being a sophisticated assault on the system which aids in the
weakening of the fabric of society." I.G. Ex. 10 at 17.
Petitioner's Probation Officer assessed the "Circumstances in
Aggravation" as follows:

1. THE PLANNING, SOPHISTICATION OR PROFESSIONALISM
WITH WHICH THE CRIME WAS CARRIED OUT, OR OTHER FACTS,
INDICATE PREMEDITATION.

2. THE DEFENDANT [PETITIONER] TOOK ADVANTAGE OF A
POSITION OF PUBLIC TRUST OR CONFIDENCE TO COMMIT THE
CRIME.

I.G. Ex. 10 at 17-18.

Mandatory exclusions pursuant to section 1128(a)(1) of the Act
are not punitive actions, but administrative remedies designed to

protect federally funded health care programs. Larry White,
R.Ph., DAB No. 1346, at 3 (1992), cited in Paul R. Scollo,
D.P.M., DAB No. 1498, at 15 (1994). Not only did Petitioner take

hundreds of thousands of dollars from Medi-Cal illegally, but he
did so after having been warned by California's Attorney General
that if he persisted he would be prosecuted criminally:

On receipt of this letter, you have been formally
advised that any continued practice by you and/or your
associates to bill the Medi-Cal program, for services
rendered by non-physicians under procedure code 90844
(billing as though the services were actually rendered
by a physician), will result in a criminal prosecution
for submission of false claims to the Medi-Cal program

I.G. Ex. 2 (dated January 14, 1991).

Petitioner's high degree of culpability and the magnitude of the
two aggravating factors convince me that the 10-year period of
exclusion imposed and directed against Petitioner is necessary to
protect Medicare and Medicaid and the programs' beneficiaries and
recipients. The 10-year period of exclusion should allow the
I.G. adequate time to assess Petitioner's performance and to
determine whether Petitioner is trustworthy to provide services
to beneficiaries and recipients of the Medicare and Medicaid
programs.
11
CONCLUSION

The I.G.'s determination to exclude Petitioner for 10 years from
participating in Medicare, and to direct that he be excluded for
10 years from participating in Medicaid, comports with the
remedial purposes of the Act and is, thus, reasonable.
Accordingly, I affirm the 10-year exclusion.

/s/

Jill S. Clifton
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
In the Case of:
Kathleen Ann Kahler, DATE: October 8, 1997
Petitioner,

Docket No. C-97-413
Decision No. CR498

-v-

The Inspector General.

DECISION

By letter dated March 26, 1997, Kathleen Ann Kahler, the
Petitioner herein, was notified by the Inspector General
(I.G.), United States Department of Health and Human
Services (HHS), that it had been decided to exclude her
for a period of five years from participation in the
Medicare, Medicaid, Maternal and Child Services Block
Grant and Block Grant to States for Social Services
programs.' The I.G. explained that the five year
exclusion was mandatory under sections 1128(a) (1) and
1128(c) (3) (B) of the Social Security Act (Act) because
Petitioner had been convicted of a criminal offense
related to the delivery of a health care item or service
under the Medicare program.

Petitioner filed a request for review of the I.G.'s
action. The I.G. moved for summary disposition. The
parties agreed that this matter would be decided on the
basis of the written record without the need for an in-
person hearing if no material facts are in dispute and
since the issues are legal in nature. I have determined
that there are no material and relevant factual issues in
dispute. Both parties submitted briefs in this matter.
The I.G. submitted six proposed exhibits (I.G. Ex. 1-6).
Petitioner did not object to these exhibits, and I admit
them into evidence.

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

I grant the I.G.'s motion for summary disposition. I
affirm the I.G.'s determination to exclude Petitioner
from participation in the Medicare and Medicaid programs
for a period of five years.

I. 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 a health care
item or service under Medicare or Medicaid to be excluded
from participation in such programs for a period of at
least five years.

II. Petitioner's Arguments

Petitioner cdntends that she is not subject to mandatory
exclusion because her offense does not relate to the
delivery of a health care item or service under the
Medicare program. Specifically she maintains that she
did not herself file false claims with Medicare.
Petitioner relates that she was employed as a mental
health counselor by Senior Counseling Services and that
her employer was the entity that filed the fraudulent
claims.

Petitioner also maintains that the statute of limitations
has passed for bringing an exclusion action against her.
She notes that the claims in question were submitted in
1990 and 1991. She asserts that the I.G. can only bring
an exclusion action within six years from the time a
claim or request for payment is presented and she cites
42 U.S.C. section 1320a-7a, section 1128A(c)(1) of the
Act, as authority for her position.

Finally, Petitioner argues in her request for a hearing
that she did not know that her guilty plea would trigger
an exclusion from the federally-funded health care
programs. She asserts that neither the prosecuting
attorney nor HHS representatives with whom she had
cooperated in the investigation of her former employer
informed her that she would be excluded as a result of
her guilty plea.

III. Findings of Fact and Conclusions of Law

1. At all times relevant herein, Petitioner was employed
by Senior Counseling Services as a mental health
counselor who provided psychological counseling and low
vision counseling to Medicare patients in nursing homes.
3

2. Senior Counseling Services was owned by David
Redfering.

3. The claims submitted to the Medicare program for
Petitioner's services were submitted by David Redfering
under the name "Senior Counseling Services" and later
under the name of "David L. Redfering and Associates."

4. An Information charging Petitioner with one count of
conspiracy to defraud the United States Medicare program
was filed by the United States Attorney in the United
States District Court, Middle District of Florida, Tampa
Division. I.G. Ex. 3.

5. On July 10, 1996, Petitioner pled guilty in the
United States District Court, Middle District of Florida,
Tampa Division, to Count One of the Information for
conspiracy to defraud the United States. I.G. Ex. 4.

6. In her plea agreement, Petitioner admitted that
during the period of October 1990 though October 1991 she
assisted David Redfering in preparing false documentation
in support of Medicare claims submitted by Senior
Counseling Services and David L. Redfering and Associates
for psychological evaluations and group and individual
therapy sessions, although neither Petitioner nor
Redfering performed these services. I.G. Ex. 6 at 14.

7. In her plea agreement, Petitioner admitted that
during the period October 1990 through October 1991 she
also assisted David Redfering in preparing false
documentation in support of Medicare claims by Senior
Counseling Services and David L. Redfering and Associates
for psychological evaluations conducted while no
qualified clinical psychologist was present, in violation
of Medicare payment rules. I.G. Ex. 6 at 14.

8. In her plea agreement, Petitioner acknowledged that
she assisted David Redfering in the preparation of false
documentation to support the Medicare claims, including
Petitioner's forging patient signatures on psychological
assessment and counseling consent forms, backdating file
entries, and describing low vision services in terms of
psychological counseling in progress notes and patient
files. I.G. Ex. 6 at 14.

9. As a result of her July 10, 1996 conviction,
Petitioner was sentenced to five years probation, was
ordered to pay restitution including $4,356.48 to
Medicare, a fine of $2000, and a $50 special assessment.
I.G. Ex.4.
4

10. Section 1128(a)(1) of the Act provides for the
mandatory exclusion from Medicare and Medicaid of
individuals convicted under federal or state law of a
criminal offense related to the delivery of a health care
item or service under the Medicare or Medicaid program.

11. Petitioner's criminal conviction for conspiracy to
defraud the United States constitutes a conviction within
the meaning of section 1128(i)(3) of the Act.

12. Petitioner's criminal conviction for conspiracy to
defraud the United States is related to the delivery of a
health care item or service under the Medicare program
within the meaning of section 1128(a)(1) of the Act.

13. Once an individual has been convicted of a program-
related criminal offense under section 1128(a)(1) of the
Act, exclusion is mandatory under section 1128(c) (3) (B)
of the Act for a minimum of 5 years.

14. The I.G. properly excluded Petitioner, pursuant to
section 1128(a)(1) of the Act, for a period of five
years, as required by the minimum mandatory exclusion
provision of section 1128(c) (3) (B) of the Act.

Iv. Discussion

The first statutory requirement for the imposition of
mandatory exclusion pursuant to section 1128(a)(1) of the
Act is that the individual or entity in question be
convicted of a criminal offense under federal or state
law. 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;

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

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

Section 1128(i)(3) of the Act.

Petitioner does not dispute that she was convicted of a
criminal offense. The record reflects that Petitioner
pled guilty to one count of conspiracy to defraud the
United States and her plea was accepted by the United
States District Court, Middle District of Florida, Tampa
Division, on July 10, 1996. Therefore, on these facts,
section 1128(i)(3) of the Act is satisfied.

Next, it is required under section 1128(a)(1) of the Act
that the crime at issue be related to the delivery of a
health care item or service under Medicare or Medicaid.
Petitioner does not dispute that the services allegedly
involved in the fraudulent claims relate to health care
items or services within the scope of the Act. She also
does not dispute that such services were billed to
Medicare and the Information to which she pled guilty
reflects this fact. In her defense, Petitioner cites the
fact that she was precluded from filing Medicare claims
and that her employer was the entity that filed the
claims at issue. On these facts, she asserts that the
crime for which she was convicted does not relate to the
Medicare program as she did not herself file the false
claims.

I reject this claim. The record reflects that Petitioner
assisted her employer in the submission of false Medicare
claims. These claims were falsified to reflect
compliance with Medicare rules when such compliance had
in fact not occurred as the services were not performed
when a qualified clinical psychologist was present. She
also assisted her employer in the submission of
fraudulent Medicare claims for psychological services she
never rendered. In this regard, Petitioner worded claims
for low vision visits to read as though she had provided
the patients with psychological evaluations and therapy.
She also forged the signatures of patients on consent
forms indicating that they agreed to psychological
treatment and counseling. These consent forms and
records were then presented to the Medicare program as
supporting documentation in an effort to obtain
reimbursement for psychological services never provided
to these patients. Petitioner's assistance to her
employer enabled him to submit false claims to the
Medicare program and resulted in Petitioner's conviction
for conspiracy to defraud the United States.
6

It is well-established that financial misconduct directed
at Medicare-or Medicaid, in connection with the delivery
of items or services under the program, constitutes
program-related offense invoking mandatory exclusion.

Alan J. Chernick, D.D.S., DAB CR434 (1996). Departmental
Appeals Board case law has long held that filing false
Medicare or Medicaid claims constitutes program
misconduct which warrants exclusion. Paul Karsch, DAB
CR454 (1997). I find that the offense which Petitioner
was convicted of constitutes criminal fraud related to
the delivery of a health care item or service under the
Medicare program. Petitioner's fraudulent conduct was
instrumental in enabling her employer to submit false
Medicare claims.

I find no merit in Petitioner's argument that she should
not be excluded, because her employer filed the claims as
she was precluded from filing. The Departmental Appeals
Board has rejected a similar claim in Robert C.
Greenwood, DAB No. 1423 (1993). In that case the
Departmental Appeals Board upheld on appeal a mandatory
five year exclusion of a home health aide who was
employed by providers to which he submitted false time
sheets. His employers then filed claims with Medicaid.
Although the petitioner contended that there was no
evidence to show that he had knowledge that the patient
was a Medicaid recipient or that his employer would file
a claim with Medicaid for his services, the Departmental
Appeals Board found that exclusion was proper.
Petitioner's case is even more compelling as she was
convicted of conspiring with her employer to defraud the
Medicare program.

Petitioner also argues that she should not be subject to
an exclusion under section 1128(a)(1) of the Act because
she was not informed in the criminal proceeding that she
would be excluded from the Medicare and Medicaid programs
as a result of her conviction. I reject this argument.
It is well-settled that arguments regarding the process
leading to a petitioner's criminal conviction are
irrelevant for purposes of an exclusion proceeding.
Charles W. Wheeler, DAB No. 1123 (1990); Douglas Schram,
R.Ph., DAB CR215 (1992) aff'd DAB No. 1372 (1992); Paul
Karsch, DAB CR454 (1997). In Schram, the petitioner
argued that because he was not given adequate notice
concerning the consequences of his plea, his right to due
process had been violated. The Departmental Appeals
Board rejected this argument, relying on the proposition
in U.S. v. Suter, 755 F.2d 523 (7th Cir. 1985) that a
defendant does not have to be advised of all of the
possible consequences of his plea. Suter, at 525. In
essence, Petitioner's argument amounts to a collateral
7

attack on her conviction, which the DAB has previously
held to be an ineffectual argument in the context of an
exclusion appeal as the I.G. and the ALJ are not
permitted to look beyond the fact of conviction. Paul R.
Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB
CR309 (1994); Peter Edmondson, DAB No. 1330 (1992).

Finally, Petitioner maintains that the statute of
limitations has passed for bringing an exclusion action
against her and cites section 1128A(c)(1) of the Act (42
U.S.C. section 1320a-7a) as authority for her position.
I find that Petitioner's argument is misplaced. The
provision upon which Petitioner relies, otherwise known
as the Civil Money Penalty Law (CMPL), provides the I.G.
with the authority to impose monetary penalties upon
providers who have either directly submitted, or caused
to be submitted, claims which are improper or false.
Section 1128A of the Act. While it is true that an
individual or entity may be excluded under the CMPL as a
result of the submission of false or fraudulent claims
for reimbursement, pursuant to section 1128A(a) of the
Act, the exclusion at issue in this case is predicated
upon Petitioner's criminal conviction. Therefore,
section 1128A of the Act and the referenced statute of
limitations does not apply. As stated in Petitioner's
notice of exclusion, Petitioner's exclusion is the direct
result of her conviction for conspiracy to defraud the
United States related to the Medicare program. She is
therefore subject to mandatory exclusion pursuant to
section 1128(a)(1) of the Act. No statute of limitations
is applicable to this remedial sanction.

Vv. Conclusion

Sections 1128(a)(1) and 1128(c) (3) (B) of the Act mandate
that Petitioner be excluded from the Medicare and
Medicaid programs for a period of at least five years
because she has been convicted of a criminal offense
related to the delivery of a health care item or service
under the Medicare program. The five year exclusion is
therefore sustained.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

In the Case of:
Rehaissance Care Center, Inc., DATE: September 25, 1997
Petitioner,

Docket No. C-97-313
Decision No. CR497

-v-

Health Care Financing
Administration.

DECISION

Below, I explain my reasons for dismissing this case pursuant to
42 C.F.R. § 498.70(c).

This case was originally assigned to Administrative Law Judge
Mimi Hwang Leahy and, subsequently, reassigned to me. A
prehearing conference was held with counsel for the parties by
telephone on June 4, 1997, at which time there was some
discussion as to whether this case should be consolidated with a
similar case involving the parties (Docket No. C-97-008). It was
agreed by the parties at that time that the cases should not be
consolidated, as there were different facts, issues, and
witnesses involved in the two cases. Counsel for the Health Care
Financing Administration (HCFA) indicated at that time that it
might be filing a motion with respect to this case which could be
dispositive of the issues, and both parties asked that I not set
a hearing date until the status of the second case could be
clarified. I agreed, but did set a second telephone prehearing
conference date of September 5, 1997, with the intention of
ruling on the motion which was to be forthcoming at that time,
and establishing a hearing date if the case was to go forward. I
have since determined, for the reasons set forth below, that a
second prehearing conference is not required.

On July 11, 1997, HCFA filed a Motion to Dismiss Petitioner's
hearing request, and a memorandum in support thereof, contending
that Petitioner's hearing request was not timely filed pursuant
to the regulations. Petitioner filed its response in opposition
on August 30, 1997. Having carefully considered the record
2

before me, as well as the arguments of counsel for the parties, I
must concur with the argument advanced by HCFA.!

FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLS)

1. At all times relevant hereto, Petitioner was and is a
provider of medical and related services and participates in the
Medicare and Medicaid programs. HCFA Ex. 2 at 1.

2. On January 15, 1997, an inspection was conducted at
Renaissance Care Center (Petitioner herein) by staff of the
Illinois Department of Public Health to determine Petitioner's
compliance with federal certification requirements for nursing
homes participating in the Medicare and Medicaid programs. HCFA
Ex. 1 at 1.

3. By notice dated January 17, 1997, the Illinois Department of
Public Health (State agency) advised Petitioner that, as a result
of the inspection, it was determined that Petitioner's facility
was not in substantial compliance with regulatory requirements.
The State agency included a copy of HCFA form 2567-L setting
forth those deficiencies with specificity. The State agency
found that some of the deficiencies posed "immediate jeopardy" to
resident health and safety. The State agency further advised
Petitioner that, as a result of its findings, it was recommending
to HCFA that HCFA: impose a civil money penalty (CMP) of
$3050.00 per day until the "immediate jeopardy" was abated,
effective January 3, 1997; deny payment for new admissions,
effective January 27, 1997; impose State monitoring, effective
January 21, 1997; and terminate Petitioner from the programs,
effective February 7, 1997. HCFA Ex. 1.

4. By letter and notice dated January 24, 1997, HCFA advised
Petitioner that, based on the State agency's recommendation in
response to the survey, it was imposing all of the recommended
remedies. HCFA further advised Petitioner that, if it disagreed
with HCFA's determination, Petitioner had the right to request a
hearing before an administrative law judge of the Department of
Health and Human Services, Departmental Appeals Board, but that
such request must be filed no later than 60 days from the date of
receipt of said notice. HCFA Ex. 2.

‘with their briefs, the parties have filed various
proposed exhibits, to which there has been no objection. I
hereby admit HCFA Exhibits (HCFA Ex.) 1 through 3 into the
record. Similarly, I hereby admit Petitioner's Exhibits (P. Ex.)
1 through 4 into the record. References herein to HCFA's brief
shall be denoted as (HCFA Br.), and to Petitioner's Brief as (P.
Br.).
3

5. 42 C.F.R. § 498.3(b) (12) provides, in part, that with respect
to a nursing facility or skilled nursing facility, a finding of
noncompliance that results in the imposition of a remedy
specified in 42 C.F.R. § 488.406, except the State monitoring and
loss of approval for a nurse-aide training program remedies, is
an initial determination.

6. Termination, denial of payment for new admissions, and CMPs,
are all remedies listed in 42 C.F.R. § 488.406, and, accordingly,
HCFA's letter and notice dated January 24, 1997, was an initial
determination within the meaning of the regulations.

7. 42 C.F.R. § 498.40(a) provides, in pertinent part, that the
affected party or its authorized representative must file a
request for hearing within 60 days from receipt of the notice of
initial, reconsidered, or revised determination.

8. As stated aforesaid, HCFA rendered its initial determination
on January 24, 1997. The parties agree, and the record
indicates, that Petitioner did not file its request for hearing
until April 18, 1997, and did not file its request for hearing
within 60 days from receipt of the notice of initial
determination.

9. Petitioner did not file a request to extend the time for
filing its request for hearing pursuant to 42 C.F.R. § 498.42(c).

10. By notice dated February 20, 1997, HCFA advised Petitioner
that, as a result of a revisit to the facility on February 5,
1997, the State agency had recommended, and HCFA had concurred
with, a revision to the previously imposed enforcement remedies.
The remedy of termination was rescinded, and the CMP was reduced
from $3,050 per day to $50 per day, effective January 17, 1997.
HCFA Ex. 3.

11. By letter dated April 30, 1997, HCFA notified Petitioner
that the remedies imposed on January 24, 1997, were discontinued,
effective March 12, 1997, and that the total amount of the CMP
assessed to Petitioner was $45,400. HCFA Motion to Dismiss; HCFA
Br. at 3.

12. Neither the notice of February 20, 1997, nor the letter of
April 30, 1997, gave Petitioner appeal rights, as neither
document issued new findings of noncompliance. Instead, these
documents merely modified the remedies HCFA had decided to
impose. HCFA Br. at 6.

13. 42 C.F.R. § 488.408(g) provides that a facility may appeal
the finding of noncompliance that results in the imposition of
[remedies] but may not appeal the choice of remedy. Since the
finding of noncompliance which resulted in the imposition of

remedies was issued by HCFA on January 24, 1997, it is from the
4

date of notice of that finding that the appeal period runs, and
not from subsequent amendments and revisions to the remedy, as
HCFA's choice of remedy, under the regulations, is not an
appealable issue.

14. Petitioner does not contend that HCFA made any new findings
of noncompliance subsequent to its initial determination of
January 24, 1997, but contends that HCFA's regulation denying it
the right to contest HCFA's choice of remedies is an
unconstitutional deprivation of its right to due process.

15. An administrative law judge derives his limited authority
from the statute and the implementing regulations. In
adjudicating claims, he or she is bound by the governing
regulations. It is not within the scope of an administrative law
judge's authority to declare the regulations through which he or
she obtains jurisdiction unconstitutional, and, accordingly, this
Administrative Law Judge makes no finding on the issues of
constitutionality raised by Petitioner.

16. Petitioner's request for hearing was not timely filed, no
extension of the time for filing was either requested or granted,
and, accordingly, this matter must be dismissed. 42 C.F.R. §
498.70(c).

DISCUSSION
I. Agreement of the Parties as to the Facts

A reading of the pleadings filed with respect to this matter
indicates that the parties are in complete agreement as to those
Findings of Fact and Conclusions of Law (FFCLs) set forth as
numbers 1 through 12 above. Of primary importance is the fact
that HCFA rendered an initial determination on January 24, 1997,
finding that Petitioner was not in substantial compliance with
participation requirements, and notifying Petitioner of several
remedies, including a CMP in the amount of $3050 per day,
effective January 3, 1997. P. Br. at 1; HCFA Br. at 2.

The parties further agree that on February 20, 1997, HCFA issued
a notice revising and modifying the remedies it had initially
imposed, but did not change, revise, or modify the basis upon
which those remedies were imposed. HCFA noted that "[It]
certified no new findings of noncompliance but instead referenced
two repeat findings . . . [and] also indicated that its letter of
February 20, 1997 did not toll the time in which the Petitioner
had to request a hearing or waive its right to a hearing and
still receive a 35 percent reduction of the CMP." HCFA Br. at 3;
HCFA Ex. 3. Petitioner does not dispute this fact, and, in fact,
indicates its agreement by noting that "On February 20, 1997,
based upon [the State agency] recommendations regarding the
5

February 5, 1997 survey, HCFA revised its remedies . . .
(Emphasis Added). P. Br. at 2.

HCFA issued an additional notice on April 30, 1997, advising
Petitioner that the remedies imposed on January 24, 1997, were
being discontinued. HCFA Br. at 3; P. Br. at 3. Neither side
contends that this notice did anything except notify Petitioner
of HCFA's final decision with respect to the remedies imposed.
There was no revision or modification to the initial findings of
noncompliance upon which the remedies were based.

Finally, of critical importance herein, both parties agree that
Petitioner did not file its request for hearing until April 18,
1997, some 84 days after HCFA's initial determination. HCFA Br.
at 3; P. Br. at 3.

II. Applicable Law

42 C.F.R. § 498.70 provides, in pertinent part, that an affected
party must file its request for hearing within 60 days from
receipt of its notice of an initial, reconsidered, or revised
determination, unless that period is extended by the
administrative law judge upon written request of the affected
party and for good cause shown. In this case, Petitioner did not
file a written request seeking an extension of its time to file.

There is no evidence to show that HCFA issued either a
reconsidered or revised determination in this case. While HCFA
did issue notices revising the remedies it elected to impose,
those notices did not constitute reconsidered or revised
determinations within the meaning of 42 C.F.R. §§ 498.24
(reconsidered determination) or 498.32 (revised determination).

Pursuant to the aforesaid regulations, a reconsidered
determination occurs following a formal request for same, upon
which HCFA considers the initial determination, the findings on
which it was made, and new evidence the affected party might wish
to submit. HCFA then issues a formal reconsidered determination
affirming or modifying the initial determination and the findings
on which it was based. Here, there is nothing to indicate, and
indeed Petitioner does not contend, that a formal request for a
reconsidered determination was made, or, indeed, that such a
determination was issued.

A revised determination is one in which HCFA gives the affected
party notice that it is reopening the initial determination and
revising same.

In the instance of either a reconsidered or revised
determination, HCFA is obligated under the aforesaid regulations
to extend the right of appeal for 60 days following issuance of
notice. HCFA did not extend the right of appeal in this case
6

because there was no request for reconsideration, and HCFA did
not on its own reopen and revise its initial determination.

Because there was neither a reconsidered nor revised
determination as defined by the regulations, Petitioner could
only appeal the initial determination, which in this case was
rendered on January 24, 1997. Pursuant to 42 C.F.R. §

498.3(b) (12), an initial determination with respect to a skilled
nursing facility (SNF) or nursing facility (NF), such as
Petitioner herein, is "a finding of noncompliance that results in
the imposition of a remedy specified in § 488.406 of this
chapter, except the State monitoring remedy, and the loss of the
approval for a nurse-aide training program." In this instance,
HCFA made findings of noncompliance (HCFA Ex. 1) and those
findings led to the imposition of remedies specified in 42 C.F.R.
§ 488.406, namely termination, CMP, and denial of payment for new
admissions.

It is important to note that 42 C.F.R. § 498.3(b)(12) states that
it is the "finding of noncompliance" which is the initial
determination, not the remedy which is imposed. It is,
accordingly, the "finding of noncompliance" which must be
appealed and not HCFA's choice of remedy. The regulations make
this conclusion absolutely clear. For example, 42 C.F.R. §
498.3(d)(11) provides that the choice of an alternative sanction
or remedy to be imposed on a provider or supplier is an
administrative action which is NOT an initial determination.
Similarly, 42 C.F.R. § 488.408(g) provides that: "(1) A facility
may appeal a certification of noncompliance leading to an
enforcement remedy. (2) A facility may not appeal the choice of
remedy, including the factors considered by HCFA or the State in
selecting the remedy, specified in § 488.404." Finally, with
respect to civil money penalties, 42 C.F.R. § 488.432 provides
that "[a] facility must request a hearing on the determination of
the noncompliance that is the basis for imposition of the civil
money penalty . . . .(emphasis added). In reviewing that
penalty, 42 C.F.R. § 488.438 provides that an administrative law
judge must determine whether or not the basis for imposition of
the penalty exists. Under that regulation, the administrative
law judge can review the amount of the penalty with certain
qualifications, but he cannot review the selection of that remedy
(penalty) itself.

All of the aforesaid regulations are consistent with the
conclusion that the Secretary of the Department of Health and
Human Services (Secretary) specifically limited facilities to an
appeal of the findings of deficiency leading to the imposition of
a remedy, and not to an appeal of the remedy itself. Similarly,
the Secretary specifically limited an administrative law judge's
authority and jurisdiction to a consideration of HCFA's findings
of deficiency, leaving the selection of remedy within the
discretion of HCFA.
7
III. Constitutionality of HCFA's Regulations.

It is clear from Petitioner's response to HCFA's motion to
dismiss that it does not contend that HCFA failed to follow the
regulations. Rather, it contends that those regulations violate
the due process clause of the fifth and fourteenth amendments to
the United States Constitution. P. Br. at 3. Specifically,
Petitioner seeks to challenge the selection of remedies imposed
by HCFA in its notice of February 20, 1997, and argues that the
regulations discussed above, which prohibit Petitioner from
contesting the choice of remedy, or, it argues, from contesting
the scope and severity of deficiencies, are unconstitutional.

An administrative law judge, unlike a federal judge in the
judicial branch of our government, does not derive his or her
authority directly from the Constitution. Instead, the
administrative law judge is a creation of Congress, housed in the
executive branch of the government, and is vested with only such
authority as the Congress by statute, or the Executive by
regulation and delegation of authority, chooses to impart.
Neither Congress nor the Executive have conferred upon
administrative law judges the authority to rule on the
Constitutionality of the statutes and regulations under which the
administrative law judge presides. Indeed, the administrative
law judge is duty bound to uphold and enforce those statutes and
regulations while they remain in force and effect. The
administrative law judge must assume that the laws and
regulations over which he or she presides are lawful.
Accordingly, as the arguments advanced by Petitioner are beyond
the scope of my authority as an administrative law judge, I
decline to rule on them. The Petitioner's right to appeal this
decision and to raise his constitutional argument is preserved.

Iv. Conclusion

I conclude that, in this case, HCFA rendered its initial
determination on January 24, 1997. I conclude further that
Petitioner's request for hearing, filed on April 18, 1997, was
untimely filed and was beyond the 60 day time limit as provided
by 42 C.F.R. § 498.40(a) (2). I conclude finally that no request
to extend that time limit was made, nor was any extension granted
for good cause shown. Accordingly, this matter should be, and
is, HEREBY DISMISSED pursuant to 42 C.F.R. § 498.70(c).

/s/

Stephen J. Ahlgren

Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Michelle Burnette, R.N., DATE: September 23, 1997
Petitioner,

Docket No. C-97-253
Decision No. CR496

-vo-

The Inspector General.

DECISION

By letter dated February 25, 1997, the Inspector General
(I.G.), United States Department of Health and Human
Services (HHS), notified Michelle Burnette, R.N.
(Petitioner), that she would be excluded from
participation in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to
States for Social Services programs for a period of five
years.' The I.G. explained that the five-year exclusion
was mandatory under sections 1128(a)(2) and 1128(c) (3) (B)
of the Social Security Act (Act) because Petitioner had
been convicted of a criminal offense relating to neglect
or abuse of patients in connection with the delivery of a
health care item or service.

Petitioner filed a request for review of the I.G.'s
action. I convened a prehearing conference on May 20,
1997. During the conference, the parties agreed that the
case could be heard and decided based on a written
record. The I.G. submitted a brief accompanied by five
proposed exhibits. (I.G. Ex. 1-5). Petitioner
submitted a response brief. The I.G. submitted a reply
brief. Petitioner did not object to the five exhibits
submitted by the I.G. and I receive into evidence I.G.
Ex. 1- 5.

! unless the context indicates otherwise, I use
the term "Medicaid" to refer to all State health care
programs from which Petitioner was excluded.
2

I affirm 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) (2) and 1128(c) (3)(B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense relating to neglect or abuse of patients
in connection with the delivery of a health care item or
service to be excluded from participation in the Medicare
and Medicaid programs for a period of at least five
years.

PETITIONER'S ARGUMENT

Petitioner contends that her plea of no contest cannot be
used as a basis to exclude her from program
participation. She also maintains that exclusion under
section 1128(a) (2) of the Act contemplates conviction of
serious felonies, not simple assault (a misdemeanor) of
the sort committed by Petitioner. Finally she asserts
that by excluding her from program participation for a
greater period than that imposed by the State Board of
Nursing, the I.G. is inflicting cruel and unusual
punishment.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. At all times relevant herein, Petitioner was a
registered nurse who was employed at Hosmer Senior
Citizens' Home. I.G.'s Proposed Findings of Fact #1;
Petitioner's Response Brief at 2; I.G. Ex. 1.

2. Petitioner's duties as a nurse at the Hosmer Senior
Citizens' Home included providing care to patients at
that facility. I.G.'s Proposed Findings of Fact #2;
Petitioner's Response Brief at 2; I.G. Ex. 1.

3. In a proceeding before the South Dakota Board of
Nursing on July 18, 1996, Petitioner stipulated that
during the course of her employment as a registered nurse
at Colonial Manor and Hosmer Senior Citizens' Home during
the period from February 18, 1996 through June 17, 1996,
she allegedly was involved in two incidents in which she
engaged in abusive conduct against persons entrusted to
her care. I.G. Ex. 1.

4. Petitioner waived her right to a hearing on the
charges of abuse and agreed to enter into a Stipulation
and Order which placed her nursing license on a
probationary status for two years. The South Dakota
3

Board of Nursing approved the Stipulation and Order.
I.G. Ex. 1.

5. On or about September 23, 1996, a criminal
Information was filed in the Fifth Judicial Circuit
Court, Edmunds County, South Dakota. Count I of the
Information charged Petitioner with the felony offense of
abuse of a disabled adult. Count II charged Petitioner
with the misdemeanor offense of simple assault, alleging
that on June 17, 1996, Petitioner intentionally caused
bodily injury to Reuben Holwager, a nursing home patient,
which did not result in serious bodily injury. I.G. Ex.
2, 3; I.G. Proposed Findings of Fact #5 - 7; Petitioner's
Response Brief at 2.

6. On November 5, 1996, Petitioner entered into a plea
of no contest to the charge of simple assault, Count II
of the criminal Information. I.G. Ex. 3.

7. ‘The Fifth Judicial Circuit Court accepted
Petitioner's no contest plea. Based on this acceptance,
the court entered a judgment of conviction against
Petitioner on the charge of simple assault, Count II of
the criminal Information. I.G. Ex. 3.

8. Petitioner was sentenced to serve fifteen days in
jail. The sentence was suspended on the condition that
Petitioner pay court costs in the amount of $26.50 and
transcript fees in the amount of $94.50; and that
Petitioner comply with the terms of the South Dakota
Board of Nursing Stipulation and Order which the court
incorporated into the Judgment of Conviction. I.G. Ex.
3; I.G. Proposed Findings of Fact #10; Petitioner's
Response Brief at 2.

9. Petitioner's plea of no contest, and the court's
acceptance of that plea, constitutes a conviction within
the meaning of section 1128(i)(3) of the Act.

10. The court's entry of judgment against Petitioner
constitutes a conviction within the meaning of section
1128(i)(1) of the Act.

11. Petitioner was convicted of a criminal offense
relating to neglect or abuse of patients in connection
with the delivery of a health care item or service within
the meaning of section 1128(a)(2) of the Act.

12. The Secretary of HHS has delegated to the I.G. the
authority to determine and impose exclusions pursuant to
section 1128 of the Act.
4

13. Pursuant to section 1128(a)(2) of the Act, the I.G.
is required to exclude Petitioner from participating in
Medicare and Medicaid programs.

14. The minimum mandatory period for exclusions pursuant
to section 1128(a)(2) of the Act is five years.

15. The I.G. properly excluded Petitioner from
participation in the Medicare and Medicaid programs for a
period of five years pursuant to sections 1128(a) (2) and
1128(c) (3) (B) of the Act.

16. Neither the I.G. nor the administrative law judge
(ALJ) has the authority to reduce the five-year minimum
exclusion mandated by sections 1128(a) (2) and
1128(c) (3) (B) of the Act.

DISCUSSION

To justify excluding an individual pursuant to section
1128(a) (2) of the Act, the I.G. must prove that: (1) the
individual charged has been convicted of a criminal
offense; (2) the conviction is related to the neglect or
abuse of patients; and (3) the patient neglect or abuse
to which an excluded individual's conviction is related
occurred in connection with the delivery of a health care
item or service.

The first criterion that must be satisfied in order to
establish that the I.G. has the authority to exclude
Petitioner under section 1128(a)(2) of the Act is that
Petitioner must have been convicted of a criminal
offense. Section 1128(i) of the Act defines when a
person has been convicted for purposes of an exclusion.

I find that Petitioner was "convicted" of a criminal
offense within the meaning of sections 1128(i)(1) and (3)
of the Act.”

In this case, Petitioner admits that she pled no contest
to the charge of simple assault, but she argues that the
I.G. lacks authority to exclude her because this type of
plea does not constitute a "conviction" within the
meaning of the Act. I disagree.

2 For Petitioner to be "convicted" of a criminal
offense within the meaning of section 1128(i) of the Act,
it is only necessary to find that one of the four
subsections of section 1128(i) has been satisfied. Here,
however, I found that Petitioner's conviction fell within
two subsections.
5

Section 1128(i)(3) of the Act expressly provides that
when a person enters a plea of nolo contendere to a
criminal charge and the court accepts such plea, the
individual will be regarded as having been "convicted"
within the meaning of the mandatory exclusion provisions
of the Act. The undisputed evidence of record
establishes that Petitioner pled no contest to the charge
of simple assault and that the court entered a judgment
of conviction against Petitioner based on her plea. The
record shows that Petitioner pled no contest in order to
dispose of the criminal charge against her, and that the
court disposed of the case based on its receipt of
Petitioner's plea. This transaction amounts to
"acceptance" of a plea within the meaning of section
1128(i)(3) of the Act, and Petitioner was therefore
"convicted" of a criminal offense within the meaning of
that provision. Carlos E. Zamora, M.D., DAB CR22 (1989),
aff'd DAB No. 1104 (1989); Anthony Tommasiello, DAB CR282
(1993).

In addition, section 1128(i)(1) of the Act provides that
an individual is "convicted" of a criminal offense "when
a judgment of conviction has been entered against the
individual . .. by a Federal, State, or local court."
The undisputed evidence shows that a judgment of
conviction was entered against Petitioner by the court,
and this establishes that Petitioner was convicted of a
criminal offense pursuant to section 1128(i)(1) of the
Act.

I conclude also that the offense of which Petitioner was
convicted related to the abuse of a patient within the
scope of section 1128(a) (2) of the Act.

A conviction need not be for an offense called patient
abuse or patient neglect; it need only "relate" to
neglect or abuse. Patricia Self, DAB CR198 (1992). In
that case, the petitioner was a nurse's aide who pled
nolo contendere to a charge of battery. The petitioner
allegedly struck a nursing home patient with an
electrical cord. The ALJ held that it was sufficient
that a party is convicted of an offense based on charges
of abusive conduct, even if the crime of which that party
is convicted is not specifically labeled "abuse."

In this case, Petitioner pled no contest to the charge of
simple assault. The Information to which she pled no
contest alleged that she intentionally caused bodily
injury to another in an incident which occurred on June
17, 1996. In addition, the judgment of conviction
incorporated the Stipulation and Order of the South
Dakota Board of Nursing. That document states that in
6

the course of her employment as a registered nurse,
Petitioner allegedly engaged in abusive conduct against a
person entrusted to her care in an incident which
occurred on June 17, 1996. Given that the judgment of
conviction incorporated the Stipulation and Order of the
South Dakota Board of Nursing and that both documents
refer to an incident which occurred on June 17, 1996, I
conclude that the criminal charge to which Petitioner
pled no contest emanated from the alleged June 17, 1996
incident described by the Stipulation and Order of the
South Dakota Board of Nursing. Moreover, Petitioner does
not contest assertions made by the I.G. in her brief that
the criminal charge to which Petitioner pled no contest
emanated from allegations of abusive conduct against a
nursing home patient.

Although the term "abuse" is not defined within the Act,
the term "abuse" is intended to include those situations
where a party wilfully mistreats another person. Thomas
M. Cook, DAB CR51 (1989). In the present case,
Petitioner was convicted of simple assault for
intentionally causing bodily injury to another person. A
physical assault against an individual clearly falls
within the common and ordinary meaning of the term
"abuse." Self, supra.

I also find that Petitioner's abuse of a patient occurred
in connection with the delivery of a health care item or
service. It is undisputed that Petitioner was a nurse,
and that her duties as a nurse directly involve patient
care and the delivery of health care services. In
addition, the undisputed material facts establish that
the alleged incident underlying Petitioner's no contest
plea occurred in the course of Petitioner's employment
duties, and that it involved an individual entrusted to
her care. Based on these undisputed facts, I conclude
that Petitioner was convicted of a criminal offense which
occurred in connection with the delivery of a health care
item or service.

Petitioner contends that the I.G. has no authority to
exclude her because she was convicted only of a
misdemeanor offense. I find that the fact that
Petitioner was convicted of a misdemeanor crime does not
negate the imposition of an exclusion pursuant to section
1128(a) (2). Congress intended that the exclusion
authority set forth in section 1128(a) would apply to all
convictions, regardless of class or type. Congress
recognized no distinctions between felonies and
misdemeanors. Patricia McClendon, DAB CR264 (1993); Joel

A. Baringer, R.Ph., DAB CR397 at 4 (1995).

7

Petitioner points out that the South Dakota Board of
Nursing placed her license to practice nursing on a
probationary status for a period of two years. She
asserts that by excluding her for five years, the I.G.
has effectively removed her from nursing for a period of
five years. She argues that by imposing an exclusion
which is three years longer than the sanction imposed by
the State Board of Nursing, the I.G. has inflicted cruel
and unusual punishment on her in violation of her
constitutional rights.

Petitioner's argument is without merit. It is well-
settled that the primary purpose of an exclusion is
remedial rather than punitive. The purpose of a
mandatory exclusion is to protect the integrity of the
Medicare and Medicaid programs, program beneficiaries and
recipients, and the public from persons who have been
shown to be guilty of program-related or patient-related
crimes. Joel A. Baringer, R.Ph., DAB CR397 (1995).
Moreover, I have no authority to rule on the
constitutionality of Petitioner's exclusion. Id. See 42
C.F.R. § 1005.4.

A five-year exclusion under section 1128(a) (2) of the Act
is mandatory when a petitioner has been convicted of a
criminal offense relating to the abuse or neglect of
patients in connection with the delivery of a health care
item or service. In this case, Petitioner has been
convicted of such an offense. Therefore the I.G. is
required to exclude Petitioner for at least five years.
Neither the I.G. nor the ALJ is authorized to reduce the
five-year minimum mandatory period of exclusion. Jack W.
Greene, DAB CR19, aff'd DAB No. 1078 (1989), aff'd sub

nom, Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn.
1990).

CONCLUSION

Sections 1128(a) (2) and 1128(c) (3) (B) of the Act mandate
that Petitioner herein be excluded from the Medicare and
Medicaid programs for a period of at least five years
because she was convicted of a criminal offense relating
to the abuse of a patient in connection with the delivery
of a health care item or service. The five-year
exclusion is therefore sustained.

/s/

Joseph K. Riotto
Administrative Law Judge


Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Douglas Edmund Foster, L.P.N.,) DATE: September 23, 1997
Petitioner,

Docket No. C-97-250
Decision No. CR495

-v-

The Inspector General.

DECISION

By letter dated February 19, 1997, Douglas Edmund Foster,
L.P.N., the Petitioner herein, was notified by the
Inspector General (1.G.), United States Department of
Health and Human Services (HHS), that it had been decided
to exclude him for a period of five years from
participation in the Medicare, Medicaid, Maternal and
Child Health Services Block Grant and Block Grants to
States for Social Services programs.' The I.G. explained
that the five-year exclusion was mandatory under section
1128(a)(2) of the Social Security Act (Act) because
Petitioner had been convicted of a criminal offense
relating to the neglect or abuse of patients in
connection with the delivery of a health care item or
service.

Petitioner filed a request for review of the I.G.'s
action. The I.G. moved for summary disposition. Because
I have determined that there are no material and relevant
factual issues in dispute (the only matter to be decided
is the legal significance of the undisputed facts), I
have decided the case on the basis of the parties’
written submissions in lieu of an in-person hearing. The
I.G. submitted a brief with eight proposed exhibits (1.G.
Exs. 1-8). Petitioner submitted a statement in response.
Petitioner did not submit any proposed exhibits with his
statement, nor did he object to the I.G.'s exhibits. I

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

admit I.G. Exs. 1-8 into evidence. The I.G. also filed a
motion to file a reply brief and a reply brief.
Petitioner made no objection. I have therefore granted
the I.G.'s motion and made her reply brief part of the
record before me.

I grant the I.G.'s motion for summary disposition. I
affirm 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) (2) and 1128(c) (3) (B) of the Act make it
mandatory for any individual who has been convicted of a
criminal offense relating to neglect or abuse of patients
in connection with the delivery of a health care item or
service to be excluded from participation in the Medicare
and Medicaid programs for a minimum period of five years.

PETITIONER'S ARGUMENTS

Petitioner does not dispute the length of his exclusion,
but contends that the I.G acted improperly by excluding
him over three years after the date of his criminal
conviction. Petitioner contends that such exclusion
should have begun on the date of his conviction.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. At all times relevant hereto, Petitioner had been
licensed as a practical nurse in the states of Oklahoma
and Michigan. I.G. Exs. 3, 8.

2. During the period relevant herein, Petitioner was
employed as a licensed practical nurse at Hobart Good
Samaritan Center in Hobart, Oklahoma. I.G. Ex. 3.

3. On or about January 14, 1994, a criminal information
was filed in Kiowa County (Oklahoma) District Court, Case
No. CRM-94-15, against Petitioner. I.G. Ex. 4.

4. The criminal information charged Petitioner with one
count of aggravated assault and battery against E.P., a
nursing home patient. I.G. Ex. 4; see I.G. Ex. 3.

5. The criminal information alleged that Petitioner
picked up E.P. and threw her into a wheelchair, while
shouting and threatening her, and repeatedly slammed her
wheelchair into a wall. I.G. Ex. 4.
3

6. Petitioner was convicted in a jury trial for the
crime of aggravated assault and battery. I.G. Ex. 5.

7. On or about March 8, 1994, the Oklahoma court entered
judgment against Petitioner for the crime of aggravated
assault and battery and sentenced Petitioner to pay a
fine of $250. Id.

8. Petitioner's duties as a licensed practical nurse at
the Hobart Good Samaritan Center directly involved
patient care and the delivery of health care services.

9. Petitioner's conviction satisfies the definition of
"conviction" found in section 1128(i) of the Act for
purposes of mandatory exclusion.

10. Petitioner's conviction for aggravated assault and
battery was an offense relating to the abuse of a patient
in connection with the delivery of a health care item or
service, within the meaning of section 1128(a) (2) of the
Act.

11. The Secretary of HHS is required under section
1128(a)(2) of the Act to exclude Petitioner from
participation in the Medicare and Medicaid programs
because of his conviction.

12. The mandatory minimum period of exclusion for a
person convicted of a criminal offense relating to
neglect or abuse of patients in connection with the
delivery of a health care item or service is five years,
pursuant to sections 1128(a)(2) and 1128(c)(3)(B) of the
Act.

13. The Secretary has delegated to the I.G. the duty to
impose a mandatory exclusion when an individual is
convicted of an offense, pursuant to section 1128(a) of
the Act.

14. Petitioner is subject to the mandatory minimum
exclusion of five years for his conviction of a criminal
offense relating to neglect or abuse of a patient in
connection with the delivery of a health care item or
service.

15. The I.G. properly excluded Petitioner from
participation in the Medicare and Medicaid programs for a
period of five years, pursuant to sections 1128(a)(2) and
1128(c) (3)(B) of the Act.
4
DISCUSSION

To justify excluding an individual pursuant to section
1128(a)(2) of the Act, the I.G. must prove that: (1) the
excluded individual has been convicted of a criminal
offense; (2) the conviction is related to the abuse or
neglect of a patient; and (3) the patient neglect or
abuse to which an excluded individual's conviction is
related occurred in connection with the delivery of a
health care item or service.

In the present case, I find, and Petitioner does not
dispute, that he was "convicted" of a criminal offense
within the meaning of sections 1128(i)(1) and (2) of the
Act.” On March 8, 1994, the Oklahoma court entered a
judgment of conviction against Petitioner, satisfying
section 1128(i)(1). This judgment was based upon a jury
finding of guilt within the scope of section 1128(i) (2)
of the Act.

I further find that Petitioner's conviction for
aggravated assault and battery against a nursing home
patient must be deemed to be a conviction for abuse or
neglect of a patient within the scope of section
1128(a)(2) of the Act. A conviction need not be for an
offense called patient abuse or patient neglect; it need
only "relate" to neglect or abuse. Patricia Self, DAB
CR198 (1992). In Self, the petitioner was a nurse's aide
who pled nolo contendere to a charge of battery. The
petitioner allegedly struck a nursing home patient with
an electrical cord in the course of performing her
nurse's aide duties. The administrative law judge (ALJ)
held in the decision that it was sufficient that a party
is convicted of an offense based on charges of neglectful
or abusive conduct even if the crime of which that party
is convicted is not specifically labeled "neglect" or
"abuse." Id.

Petitioner in this case is a licensed practical nurse who
was employed at the Hobart Good Samaritan Nursing Home.
Petitioner does not dispute that, during the course of
his regular duties, he committed an aggravated assault
and battery upon E.P., a nursing home patient. According
to the criminal information, Petitioner picked E.P. up
and threw her into a wheelchair, while shouting and

2? For Petitioner to be "convicted" of a criminal

offense within the meaning of section 1128(i) of the Act,
it is necessary to find that one of the four subsections

of section 1128(i) has been satisfied. Here, I find that
Petitioner's conviction fell within two subsections.
5

threatening her, and repeatedly slammed her wheelchair
into a wall.

Although the terms "abuse" and "neglect" are not defined
within the Act, the term "abuse" is to include those
situations where a party willfully mistreats another
person. Thomas M. Cook, DAB CR51 (1989). In the present
case, Petitioner was convicted of aggravated assault and
battery for his abusive conduct towards E.P. described
above. A physical assault against an individual clearly
falls within the common and ordinary meaning of the term
"abuse." Self, supra.

E.P. was a "patient" within the meaning of the Act. See
I.G. Ex. 3. I find that Petitioner's abuse of E.P.
occurred in connection with the delivery of a health care
item or service. Petitioner's duties as a licensed
practical nurse directly involved patient care and the
delivery of health care services. Petitioner does not
dispute that he was an employee of the facility and had
the duty to assist in caring for E.P. when the assault
and battery occurred. Where an attack occurs in a health
care facility where the victim had been residing as a
patient and the perpetrator was an employee of the
facility whose duty was to assist in the care of
patients, the conviction is deemed to be related to the
delivery of health care. Patricia McClendon, DAB CR264
(1993).

In his statement, Petitioner asserts that his exclusion
should have begun on March 8, 1994, the date of his
conviction of aggravated assault and battery. I find no
merit in this claim. As a matter of law, an exclusion
must take effect 20 days from the date of the I.G.'s
notice of exclusion. Section 1128(c); 42 C.F.R. §
1001.2002. This means that Petitioner's exclusion took
effect 20 days after the I.G's February 19, 1997
exclusion letter and not 20 days after Petitioner's
conviction. Although Petitioner asserts that his
exclusion should be retroactive, an ALJ is without
authority to change the effective date of an exclusion.

Stanley Karpo, D.P.M., DAB CR356 (1995); Chander
Kachoria, R.Ph., DAB CR220 (1992), aff'd, DAB No. 1380
(1993); Laurence Wynn, M.D., DAB CR344 (1994); Samuel W.
Chang, M.D., DAB No. 1198 (1990). The effective date of

Petitioner's exclusion cannot be altered in this
proceeding. Furthermore, the I.G. has no authority to
make exclusions retroactive. Neither the ALJ nor the
I.G. can move the effective date of exclusion back to
Petitioner's original March 8, 1994 date of conviction.
In Kachoria, the petitioner argued that his exclusion was
unreasonable because the I.G. arbitrarily delayed
6

imposing the exclusion. An appellate panel of the DAB
ruled, however, that neither the statute nor the
regulations set any specific deadline for the I.G. to act
once an individual becomes subject to exclusion due to a
conviction. Kachoria, DAB No. 1330, at 10 (citing
Douglas Schram, R.Ph., DAB No. 1372, at 10 (1992) and
Chang, DAB No. 1198, at 13-16 (1990)). Consequently, I
find that the time which has elapsed between Petitioner's
conviction and the receipt of the exclusion letter from
the I.G. does not violate Petitioner's due process
rights.

CONCLUSION

Sections 1128(a)(2) and 1128(c) (3) (B) of the Act mandate
that Petitioner herein be excluded from the Medicare and
Medicaid programs for a period of at least five years
because he was convicted of a criminal offense related to
the neglect or abuse of a patient in connection with the
delivery of a health care item or service. The five-year
exclusion is therefore sustained.

/s/

Joseph K. Riotto
Administrative Law Judge