Subramaniam E. Khanthan, M.D., DAB CR5478 (2019)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Subramaniam E. Khanthan (Dr. Khanthan or Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for the statutory minimum period of five years under 42 U.S.C. § 1320a-7(a)(3). Dr. Khanthan requested a hearing before an administrative law judge (ALJ) to dispute the exclusion. For the following reasons, I conclude that § 1320a-7(a)(3) mandates Dr. Khanthan’s exclusion for five years. Therefore, I affirm the IG’s determination.

I. Background

In an April 30, 2019 letter, the IG informed Dr. Khanthan that he was being excluded, effective 20 days after the date of the notice, from participation in all federal health care programs for five years based on 42 U.S.C. § 1320a-7(a)(3).  IG Ex. 1.  The notice explained that: 

This exclusion is due to [Petitioner’s] felony conviction . . . in the Hudson County Superior Court for the State of New Jersey, of a criminal offense related to fraud, theft,

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embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State or local Government agency. 

IG Ex. 1 at 1.    

Petitioner timely requested a hearing to dispute the exclusion.  This case was assigned to me and, on June 26, 2019, I held a prehearing conference, which was summarized in my June 27, 2019 Prehearing Conference Summary Order.  Petitioner represented himself at the conference.  I advised Petitioner that he had the right to be represented by an attorney, at his own expense.  During the conference, I established a prehearing submission schedule.  Based on that submission schedule, the IG timely filed a brief (IG Br.) and four proposed exhibits (IG Exs. 1-4).  Petitioner missed his deadline for submissions; however, in response to an Order to Show Cause, Petitioner’s newly retained counsel filed a letter brief (P. Br.) and three exhibits (P. Exs. A-C).  The IG filed a reply brief (IG Reply).      

II. Issue

Whether the IG has a basis to exclude Petitioner for five years under 42 U.S.C. § 1320a-7(a)(3).

III. Jurisdiction

I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007, 1005.2.

IV. Decision on the Record

Neither party objected to any of the proposed exhibits. Therefore, I admit IG Exs. 1 4 and P Exs. A-C into the record. Standing Prehearing Order ¶ 12; Civil Remedies Division Procedures (CRDP) § 14(e); see also 42 C.F.R. § 1005.8(c).

The IG has no witnesses to present in this case and indicated that a hearing is unnecessary. IG Br. at 6. Petitioner submitted written direct testimony for himself, but indicated that he was not requesting an in-person hearing. P. Br. at 3. The IG did not request to cross-examine Petitioner; therefore, I decide this case based on the written

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record.  Standing Prehearing Order ¶¶ 10-11, 16; 42 C.F.R. § 1005.16(b); CRDP §§ 16(b), 19(b), (d).

V. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are in bold and italics.   

The Social Security Act mandates exclusion of an individual from participating in all federal health care programs when the individual:

has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program (other than those specifically described in [§ 1320a-7(a)(1)]) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

42 U.S.C. § 1320a-7(a)(3).  Therefore, the three essential elements necessary to support a mandatory exclusion in this case are:  (1) the individual to be excluded must have been convicted of a felony offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; (2) the felony offense must be in connection with the delivery of a health care item or service; and (3) the felonious conduct must have occurred after August 21, 1996.

1. Petitioner was convicted of a felony offense related to theft. 

An individual is considered to be convicted of a criminal offense for purposes of exclusion under 42 U.S.C § 1320a-7(a) when there has been:  a judgment of conviction entered against the individual by a federal, state, or local court; a finding of guilt against the individual by a federal, state, or local court; a plea of guilty or nolo contendere that has been accepted by a federal, state, or local court; or participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.  42 U.S.C. § 1320a-7(i).  The record shows that Petitioner pleaded guilty to violating New Jersey Annotated Statutes § 2C:20-3a on August 31, 2018, that plea was accepted by the Superior Court of New Jersey, Hudson County (Superior Court) and, on

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November 13, 2018, the Superior Court issued a Judgment of Conviction in which the Superior Court sentenced Petitioner to one year of probation.  IG Exs. 3-4; P. Ex. A ¶¶ 6, 9. 

The Judgment of Conviction describes Petitioner’s offense as theft by unlawful taking—movable property valued from $500-$74,999.  IG Ex. 4 at 1. 

Both the Judgment of Conviction and the Petitioner’s guilty plea indicate that Petitioner was convicted of that offense in the third degree.  IG Ex. 3 at 1; IG Ex. 4 at 1.  Under New Jersey common law, a third degree offense is considered to be a felony.  Amir Tadros, DAB No. 2550 at 6-7 (2013).  

2. Petitioner’s felonious conduct was in connection with the delivery of a health care item or service.

In order for the IG to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(3), the felony offense that was the basis of Petitioner’s conviction must have been for conduct in connection with the delivery of a health care item or service.  To be “in connection with” the delivery of a health care item or service, there only needs to be a nexus or common sense connection to the delivery of a health care item or service.  Charice D. Curtis, DAB No. 2430 at 5 (2011).  Therefore, the delivery of health care items or services need not be the focus of the criminal conduct, just connected to it.   

Petitioner asserts that “[t]he allocution that I gave to the Court, under Oath, was that I was guilty of inaccurate record keeping and not to health care fraud” and that “[a]ll Health care and Fraud counts were dismissed.”  P. Ex. A ¶¶ 7-8.  However, Petitioner admits that underlying the criminal charge against him was a meeting he had with a “Marketing Consultant” who brought three patients with him who said they had been involved in an automobile accident.  P. Ex. A ¶ 13.  Petitioner prescribed physical therapy for each of the patients.  P. Ex. A ¶ 13.  However, this was done without examining the patients because Petitioner stated that he refused to prescribe Percocet to one of the patients “unless I examined him to confirm his injury.”  P. Ex. A ¶ 14.  Petitioner then billed GEICO for his services and was criminally charged.  P. Ex. A ¶ 15.  Petitioner testified that he “was lied to by the State’s witnesses and was set up to treat persons who lied to me about being in an accident and about being injured.” P. Ex. A ¶ 17.  Subsequently, Petitioner pleaded guilty to a charge that indicated he falsely represented that physical therapy was warranted for the individuals and then submitted claims to GEICO based on those representations.  IG Ex. 2 at 9; IG Ex. 3 at 1; IG Ex. 4 at 1.  Therefore, Petitioner’s felony offense was in connection with the delivery of a health care item or service.

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3. Petitioner’s criminal conduct occurred after August 21, 1996.

To be excluded under 42 U.S.C. § 1320a-7(a)(3), Petitioner’s felony offense must have occurred after August 21, 1996.  Petitioner’s conviction was based on conduct in 2017.   IG Ex. 2 at 9. 

4. Petitioner is subject to exclusion under 42 U.S.C. § 1320a-7(a)(3); therefore, Petitioner must be excluded for at least five years.

Petitioner concedes that “the Inspector General has the statutory authority to exclude me for the alleged violation of the Act.”  P. Ex. A. ¶ 5.  However, Petitioner raises a number of matters as mitigating.  He testified that:  he has no prior criminal record; he has no professional disciplinary history; he is aged 77, in poor health, and wants to continue practicing medicine to help his patients and support his family; he was “set up” by the government agents who came to his office; he never cashed the checks that GEICO sent him; and he pleaded guilty because he could not afford a lengthy criminal trial and could not risk imprisonment due to poor health.  P. Ex. A ¶¶ 10-13, 15-17; P. Ex. B.  Further, Petitioner has been reinstated to participate in Medicaid in New Jersey.  P. Ex. C.       

Despite the matters raised above, I conclude that Petitioner’s conviction meets the elements of a mandatory exclusion under 42 U.S.C. § 1320a-7(a)(3), and, therefore, the IG had to impose a minimum of a five-year exclusion on Petitioner.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2) (the reasonableness of a five-year length of exclusion imposed under § 1320a-7(a) is not an appealable issue). 

The United States Court of Appeals for the Ninth Circuit explained the mandatory nature of a five-year exclusion under 42 U.S.C. § 1320a-7(a) in the following manner: 

However, the Inspector General was not engaging in a fact-finding or discretionary function when he excluded Travers.

Conviction of a program-related offense as defined by § 1320a–7(i) is the triggering event that mandates the Secretary to impose a minimum five-year exclusion.  The language—“[t]he Secretary shall exclude”—is mandatory, not discretionary.  42 U.S.C. § 1320a-7(a).  To determine whether Travers was convicted of a program-related offense, the Inspector General looked to the substance of the state proceedings and the nature of Travers’ crime as charged by the State of Utah.  As noted by the district court, “[i]t is not necessary or proper for the Inspector General to delve into the facts surrounding the conviction.”  Travers v. Sullivan, 801 F. Supp. 394, 403 (E.D. Wash. 1992).  Once he found that the  

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Utah state court’s disposition of the charge amounted to a conviction of a program-related offense, the Inspector General had no choice but to impose the mandatory 5-year exclusion under § 1320a-7(a)(1).

Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994).  As indicated above, the record conclusively shows that Petitioner’s conviction meets all of the elements under 42 U.S.C. § 1320a-7(a)(3) for a mandatory exclusion.  Therefore, the law required the IG to exclude Petitioner for five years and requires me to affirm that exclusion. 

VII. Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for a five-year minimum period under 42 U.S.C. § 1320a‑7(a)(3).