Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
John E. Calhoon, |
DATE: December 1, 2000 |
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The
Inspector General
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Docket No.C-00-571 Decision No. CR719 |
DECISION | |
On January 12, 2000, I issued a decision in
this case in which I sustained the determination of theInspector General
(I.G.) to exclude Petitioner, John E. Calhoon, from participating in federally
funded health care programs for a period of 10 years. John E. Calhoon,
DAB CR641 (2000). On June 7, 2000, an appellate panel of the Departmental
Appeals Board remanded the case to me to reconsider my decision as to the
length of the exclusion period. John E. Calhoon, DAB No. 1729 (2000). I conducted further proceedings in this case in accord
with the appellate panel's decision. Both parties submitted additional
briefs. Neither party submitted additional exhibits. I decide, based on
the appellate panel's decision and the parties' arguments, that the exclusion
in this case should be modified to a term of seven years. Issue, findings of fact and conclusions of law
The issue on remand is whether an exclusion of 10 years
is unreasonable.
I make findings of fact and conclusions of law (Findings)
to support my decision. I set forth each Finding below as a separately
numbered heading. I discuss each Finding in detail.
In my initial decision in this case I sustained the I.G.'s
exclusion determination based on the presence of three aggravating factors.
These were that: (1) the acts which were the basis for Petitioner's conviction
of a program-related offense resulted in financial loss to the Medicare
program of more than $1,500; (2) the acts resulting in Petitioner's conviction,
or similar acts, were committed over a period of one year or more; and
(3) Petitioner was sentenced to a period of incarceration for his crimes.
DAB CR641 at 7 - 9. I concluded that the most significant of these factors
were the duration of Petitioner's crimes and the financial impact that
Petitioner's crimes had on the Medicare program. I stated that:
DAB CR641 at 10. On appeal, the appellate panel found that the weight of
the evidence did not sustain my finding that Petitioner's crimes had a
substantial financial impact on the Medicare program. DAB No. 1729 at
6 - 12. Therefore, I may no longer decide whether the I.G.'s exclusion
determination is reasonable based in part on the financial impact that
Petitioner's crimes had on the program. I may evaluate Petitioner's untrustworthiness
based essentially on the fact that he perpetrated crimes over a substantial
period of time. Although I continue to find that Petitioner's crimes were
protracted, I can no longer say that they constituted a "massive fraud"
against Medicare. Indeed, I can draw no conclusion as to the financial
impact of Petitioner's crimes. In my judgment the absence of evidence
that Petitioner's crimes had any financial impact on the program significantly
undercuts my original conclusion concerning the level of Petitioner's
untrustworthiness. There now is significantly less evidence that Petitioner
is untrustworthy. I conclude that a 10-year exclusion is not reasonable
in the absence of evidence that Petitioner's crimes had a substantial
financial impact on the Medicare program. There simply is not persuasive
evidence in this case that Petitioner is so untrustworthy as the I.G.
contends him to be. The I.G. argues that a 10-year exclusion is reasonable
in the presence of only two aggravating factors because the exclusion
falls within a "reasonable range" of possible exclusions that may be imposed
against Petitioner. I disagree. It is evident that the I.G. initially
premised her exclusion determination on her belief that Petitioner's crimes
had a very substantial financial impact on the Medicare program. Originally,
the I.G. argued that Petitioner's crimes had resulted in a loss to the
program exceeding $900,000. DAB CR641 at 11. And, although I did not agree
with this assertion, I concluded that Petitioner's crimes had cost the
program at least between $20,001 and $50,000. Id. In the absence of evidence about the financial impact
that Petitioner's crimes had on Medicare, all that can be said about them
is that Petitioner perpetrated fraud on a number of occasions over a period
of more than one year. This certainly is significant and is strong evidence
that Petitioner is untrustworthy. But, I am not persuaded that Petitioner's
untrustworthiness rises to the level that would be established in the
presence of evidence that he had perpetrated fraud having a substantial
financial impact. The case for an exclusion of 10 years - or even for
a range of exclusions that includes 10 years - is not persuasive in the
absence of evidence to support the I.G.'s contention that Petitioner's
crimes had a substantial financial impact on the program.
Although there is no evidence that Petitioner's crimes
had a substantial financial impact on the program, there is evidence that
they were protracted and systematic. This evidence of aggravation is a
basis for an exclusion of more than the five-year minimum period that
is mandated for program-related crimes. I modify Petitioner's exclusion
to a term of seven years. An exclusion of seven years is reasonable in
light of the fact that the evidence continues to demonstrate that Petitioner
shows a high degree of untrustworthiness, albeit not so high as the I.G.
asserts to be present. The evidence which relates to duration establishes that
Petitioner submitted a small number of fraudulent Medicare cost reports
over a relatively lengthy period of time (20 months). DAB CR641 at 11.
I reiterate my original holding in this case that Petitioner's repeated
submission of fraudulent cost reports is evidence of determined and protracted
criminal activity by Petitioner. Id. As I have discussed above, however, the significance of
this activity is diminished somewhat by the absence of any evidence which
explains its financial impact. It is not possible for me to conclude,
as I did in my previous decision, that Petitioner's crimes had a massive
impact on the Medicare program. That is not to say that the evidence shows Petitioner
to have engaged in inconsequential or trivial crimes. Petitioner was convicted
of several crimes. He was found to have engaged in a scheme to defraud
the Health Care Financing Administration of money by various false and
fraudulent pretenses, representations, and documents. DAB CR641 at 3 -
4. And, he was sentenced to incarceration for his crimes. This evidence
shows that the crimes that Petitioner committed over a period of 20 months
were, indeed, serious and demonstrate a propensity by Petitioner to engage
in criminal conduct. In addition, Petitioner did not prove the presence
of any mitigating factors under the relevant regulations. DAB CR641 at
9 - 10. Petitioner is a highly untrustworthy individual even in the absence
of evidence establishing the financial impact of his crimes. My conclusion that Petitioner should be excluded for a period of seven years strikes a balance between evidence establishing the duration and scope of Petitioner's crimes and the lack of evidence establishing that Petitioner's crimes had any significant financial impact on the Medicare program. I conclude that the evidence shows that Petitioner is not so untrustworthy as the I.G. contends. I conclude also that he is a manifestly untrustworthy individual. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge |
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