SUBJECT:

Anthony Halili Galvan,

Petitioner,

The Inspector General.

DECISION

This case is before me pursuant to a request for hearing filed on February 8, 2006 by Anthony Halili Galvan, Petitioner.

By letter dated December 31, 2005, the Inspector General (I.G.) notified Petitioner, that he was being excluded from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a period of 5 years. ⁽¹⁾ The I.G. informed Petitioner that his exclusion was imposed under section 1128(a)(1) of the Act, due to his conviction of a criminal offense (as defined in section 1128(i) of the Act) related to the delivery of an item or service under the Medicaid program.

On April 12, 2006, I convened a telephone prehearing conference during which the parties agreed that an in-person hearing was not required and that the issues could be decided based on written memoranda and documentary evidence. Consequently, I issued an Order establishing briefing deadlines. Pursuant to that Order, on May 12, 2006, the I.G. filed a brief, accompanied by five proposed exhibits. On June 12, 2006, Petitioner submitted a brief (P. Br.) in support of his contentions, with three exhibits. On June 15, 2006, the I.G. filed a Reply brief. Petitioner requested leave on June 28, 2006, to file a rebuttal brief. I granted that request and Petitioner timely filed a rebuttal on September 5, 2006.

Neither party objected to the exhibits submitted. I admit into evidence I.G. exhibits (I.G. Exs.) 1-5 and Petitioner exhibits (P. Exs.) 1-3.

It is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in the Medicare, Medicaid, and all federal health care programs, for a period of five years. I base my decision on the documentary evidence, applicable law, regulations, and the arguments of the parties. It is my finding that Petitioner was convicted of a criminal offense related to the delivery of an item or service under a State health care program.

I. Issue

The only issue in this case is:

Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act.

II. Applicable Law and Regulations

Section 1128(a)(1) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual convicted of a criminal offense relating to the delivery of a health care item or service.

An exclusion under section 1128(a)(1) of the Act must be for a minimum period of five years. Section 1128(c)(3)(B) of the Act.

Pursuant to 42 C.F.R. � 1001.2007, an individual or entity excluded under section 1128(a)(1) of the Act may file a request for a hearing before an administrative law judge.

III. Findings and Discussion

The findings of fact and conclusions of law noted below, in bold face, are followed by a discussion of each finding.

1. Petitioner's conviction of a criminal offense related to the delivery of an item or service under the Medicaid program justifies his exclusion by the I.G. from participation in the Medicare, Medicaid, and all other federal health care programs.

Medi-Cal is a medical assistance program that pays the cost of essential medical care for California's qualifying poor. It is a Medicaid program administered by the State of California and funded jointly with the federal government. Medi-Cal's benefits include dental services provided by independent dentists enrolled as Denti-Cal providers. The dentists are paid on a fee-for-service basis and submit their claims for providing dental services to beneficiaries. I.G. Ex. 3, at 5.

All dental services provided to beneficiaries must be dentally indicated in order to qualify for payment by Denti-Cal. Denti-Cal generally pays claims upon receipt without requiring the claim to be accompanied by any documentary proof that the services were actually provided or were dentally indicated. However, providers on special claims review must provide such documentation. I.G. Ex. 3, at 7.

J. Wall, a Special Agent of the California Justice Department, conducted an investigation leading to the conclusion that during the period commencing on or about December 15, 1999, through on or about March 11, 2004, Kyon Maung Teo, D.D.S., doing business as Hatch Dental, defrauded the State of California Medi-Cal Dental Program (Denti-Cal) by filing claims and receiving payments for approximately $ 4.5 million dollars worth of reimbursements to which he was not lawfully entitled. As a means of perpetrating the fraud against the Denti-Cal program, Dr. Teo enlisted a team of co-conspirators, including his wife, Kin Thor Pang, and 19 dentists. All 21 persons who engaged in this scheme were rewarded for their unlawful activity. Anthony Halili Galvan, the Petitioner herein, was one of the 21 persons who participated in this scheme. I.G. Ex. 3, at 9.

As a means of defrauding the Denti-Cal program, Dr. Teo and his co-conspirators engaged in a complicated scheme to submit claims for dental treatment that was: 1) not performed; 2) performed although it was not dentally indicated; 3)performed by persons who were not licensed to practice dentistry; 4) performed in such substandard manner that it did not comport with the minimum requirements of the Denti-Cal program; 5) justified as being dentally indicated based on falsified diagnostic records; 6) encouraged through the use of bribes or remuneration that were paid to patients as inducements for them to receive dental treatment; and 7) billed to the Denti-Cal program by using the subterfuge of being performed under the auspices of another billing provider after Dr. Teo had been suspended from participation in the Denti-Cal program. I.G. Ex. 3, at 9, 10.

Dr. Morton Rosenberg, D.D.S., ⁽²⁾ analyzed dental charts of seven patients from the Hatch Dental Offices that had been treated by Petitioner and determined that 48 dental procedures that were performed by Dr. Galvan were not dentally indicated. I.G. Ex. 3, at 67. Patient Somphone R. was one of the 7 patients.

On September 21, 2004, a felony complaint was filed against Petitioner, along with 20 other co-defendants. Petitioner Anthony Halili Galvan was named in 4 counts of the 40 count felony complaint. P. Br. at 3. He was charged with engaging in a conspiracy to commit grand theft to cheat and defraud the [State of California] Medi-Cal dental program, and with the commission of health benefits fraud on or about and between December 3, 2001 and January 22, 2002. ⁽³⁾ The complaint was filed in the Superior Court of the State of California, County of Stanislaus. P. Ex. 3, at 2, 20.

Pursuant to an agreement between the State and the Defendant (Petitioner herein), on August 1, 2005, Petitioner entered a no contest plea as to count 10 as amended, to allege a misdemeanor violation of Penal Code section 242, simple battery, to have occurred on January 22, 2002, with respect to dental patient Somphone R. P. Ex. 2, at 2, 6. The remaining counts were dismissed. The Court accepted Petitioner's no contest plea, adjudged him guilty of the crime of battery, sentenced him to 36 months informal probation and 100 hours of community service, and ordered restitution in the sum of $850 and disgorgement in the sum of $6,875. ⁽⁴⁾ P. Ex. 2, at 2, 13, 15.

The I.G. notified Petitioner on December 31, 2005 that he was being excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years based on his conviction in the Superior Court of the State of California, County of Stanislaus, of a criminal offense related to the delivery of an item or service under Medicare or a State health care program as defined in Section 1128(i) of the Act.

Petitioner contends that no common sense connection exists between the conduct giving rise to the offense committed by Petitioner and the delivery of a health care item or service. Furthermore, Petitioner argues that the I.G.'s exclusion does not apply to him notwithstanding the fact that he entered a no contest plea to a simple battery which was connected to a count in the felony complaint that expressly related to the submission of false and fraudulent claims to the Medi-Cal program. This alleged inapplicability is grounded on two assertions. In the first instance, Petitioner alleges that it was not he, but rather the owner of the dental clinic that submitted false and fraudulent claims. Secondly, Petitioner alleges that the misdemeanor battery to which he entered a no contest plea has nothing to do whatsoever with the submission of false and fraudulent claims to the Medi-Cal program. Of course, this allegation is inconsistent with his prior assertion that "count 10 expressly related to the submission of false and fraudulent claims to the Medi-Cal program." P. Br. at 5.

The threshold question to be decided is whether Petitioner was convicted of a criminal offense (as defined in section 1128(i) of the Act) related to the delivery of an item or service under the Medicaid program.

The Act provides that, for purposes of an exclusion under section1128(a)(1), an individual is considered "convicted" of a criminal offense-

(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 or conviction or other record relating to criminal conduct has been expunged;

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

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

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

Section 1128(i) of the Act.

In this case, Petitioner entered a plea of nolo contendere to a misdemeanor battery. Petitioner does not dispute that he has been convicted of a criminal offense, but denies that he submitted false and fraudulent claims to the Medi-Cal program, or that there is a nexus between his misdemeanor battery plea and the commission of Medicaid fraud. His arguments cannot prosper.

It is not open to debate that the underlying conduct giving rise to Petitioner's conviction was participation in a conspiracy to defraud the State of California Medi-Cal program, as well as the making of fraudulent claims on behalf of certain named beneficiaries. Thus, there is a common sense connection between the conduct giving rise to the felony complaint and the eventual conviction of a misdemeanor battery as to one of the named individuals in whose behalf he made false claims; to wit, Somphone R. P. Ex. 3, at 20. Moreover, the sentence imposed, that included restitution and disgorgement, is more associated with fraud than with simple battery.

In Lyle Kai, R. Ph., DAB No. 1979, at 5 (2005), the Board held that:

In determining whether an offense is related to the delivery of an item or service under a covered program such as Medicaid, "[i]t is not the labeling of the offense under the state statute which determines whether the offense is program-related." Berton Siegel, D.O., DAB No. 1467, at 7 (1994) (conviction for facilitation of theft); see also Salvacion Lee, M.D., DAB No. 1850 (2002)(conviction for conspiracy to commit bribery); Thelma Walley, DAB No. 1367 (1992)(conviction of unlawful destruction of property); Dewayne Franzen, DAB No. 1165 (1990)(conviction for mislabeling drugs). Rather, the ALJ examines whether there is "some nexus or common sense connection between the offense of which a petitioner was convicted and the delivery of an item or service under a covered program." Siegel, DAB No. 1467, at 5 (quotation marks omitted); see also Walley, DAB No. 1367; Niranjana B. Parikh, DAB No. 1334 (1992). "In determining whether there is such a nexus or connection, evidence as to the nature of an offense may be considered," such as "facts upon which the conviction was predicated." Siegel, DAB No. 1367, at 6-7; see also Tanya A. Chuoke, R.N., DAB No. 1721, at 7 (2000). However, "the basis for the underlying conviction . . . is not reviewable and the individual . . . may not collaterally attack it . . . ."42 C.F.R. � 1001.2007(d); Peter J. Edmonson, DAB No. 1330, at 4 (1992).

Additionally, it should be noted that Section 1128(a)(1) of the Act authorizes the Secretary to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual convicted of a criminal offense relating to the delivery of a health care item or service. A conviction for submission of false or fraudulent claims is not a requirement for exclusion under this section. All that is required is that there be some nexus between the conviction and the delivery of an item or service under a Medicare or Medicaid program.

Thus, Petitioner need not be convicted of Medicaid fraud to be subject to exclusion under section 1128(a)(1) of the Act; instead it is sufficient if the delivery of a Medicaid item or service is an element in the chain of events giving rise to the offense. In this case not only was Petitioner convicted of a simple battery against a Medicaid patient, but the delivery of a Medicaid item or service is an element in the chain of events leading up to his conviction. I must also note that Petitioner's allegation that it was his employer and not he who submitted fraudulent Medicaid claims amounts to an impermissible collateral attack on his conviction and the underlying basis for his no contest plea. See Lyle Kai, R. Ph., supra.

Petitioner argues that he did not really commit battery against a Medi-Cal patient and that his no contest plea as to that individual was an expedient measure to avoid the possibility of conviction of a more serious crime regarding that same individual and others. However, the exclusion statute does not allow him to have it both ways. Thus, state criminal procedures schemes cannot have a nullifying effect on the I.G.'s application of the exclusion statute.

2. Petitioner's exclusion for a period of five years is the mandatory minimum period as a matter of law.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years. Act, section 1128(c)(3)(B). When the I.G. imposes an exclusion for the mandatory five-year period, the reasonableness of the length of the exclusion is not an issue. 42 C.F.R. � 1001.2007(a)(2).

IV. Conclusion

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs, for a period of at least five years, because he was convicted of a criminal offense related to the delivery of an item or service under Medicaid.

Jose A. Anglada

Administrative Law Judge

1. In spite of my specific instructions, the I.G. failed to include the letter of exclusion as an exhibit. Therefore, I have entered that document into the record as Administrative Law Judge (ALJ) Ex. 1, sua sponte.

2. Dr. Morton Rosenberg is a dental consultant employed by the Department of Health Services Medi-Cal Dental Services Branch. He earned his degree in dental surgery at the University of the Pacific, and has been licensed to practice dentistry by the dental board of California since 1985. I.G. Ex. 3, at 13.

3. In his Rebuttal Brief, Petitioner asserts that he only worked for the owner of the Hatch Clinic for a total of 14 days. The number of days that Petitioner was actually employed is not relevant to my analysis.

4. The disgorgement was described by the prosecution as approximately 80% of the compensation that Petitioner received while employed at Action Dental.