Florence Peters, D.P.M. (Petitioner) appealed the March 5, 1999 decision by Administrative Law Judge (ALJ) Joseph K. Riotto in Florence Peters, D.P.M., DAB CR582 (1999) (ALJ Decision). The ALJ affirmed the Inspector General's (I.G.) decision to exclude Petitioner from participation in the Medicare, Medicaid, and all federal health care programs for a minimum period of five years, as a result of her conviction for federal tax fraud involving tax returns concerning her podiatry practice. The ALJ found that the I.G. was authorized to exclude Petitioner under section 1128(b)(1) of the Social Security Act (Act) because she had been convicted, in connection with the delivery of a health care item or service, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, and that exclusion for five years was reasonable.

For the reasons explained below, we find that section 1128(b)(1) of the Act, as in effect at the time that the I.G. acted to exclude Petitioner, did not authorize her exclusion. Accordingly, we reverse the ALJ Decision.

Background

Petitioner, a podiatrist and sole shareholder of an Illinois corporation conducting business as Suburban Podiatry Associates, was excluded for five years based on her June 1997 conviction for five felony counts related to supplying false information on her individual and corporate income tax returns and obstructing and impeding administration of tax laws, during the period from 1987 through 1992. These offenses included understating business receipts and reporting personal expenses as business-related. She was sentenced to 27 months of imprisonment, one year of supervised release and 100 hours of community service, and ordered to pay a fine of $5,000 and prosecution costs of $8,693.30.

The I.G. notified Petitioner of her determination to exclude Petitioner from federal health care programs in a letter dated May 29, 1998, which stated that:

This action is being taken under section 1128(b)(1) of the Act (42 U.S.C. 1320a-7(b)) and is effective 20 days from the date of this letter. This exclusion is due to your conviction as defined in section 1128(i) (42 U.S.C. 1320a-7(i)) of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or related to any act or omission in a health care program operated by or financed in whole or in part by any Federal, State, or local government agency.

Applicable law

The I.G. applied to Petitioner section 1128(b)(1) of the Act as in effect at the time of her criminal offenses. At that time, section 1128(b)(1) permitted the exclusion of --

Any individual or entity that has been convicted, 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 program operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

Medicare and Medicaid Patient and Program Protection Act of 1987 (MMPPPA), Public Law No. 100-93, � 2.

Prior to the I.G.'s decision to exclude Petitioner, section 1128(b)(1) had been amended by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law No. 104-191, � 211, to permit the exclusion of --

Any individual or entity that has been convicted for an offense which occurred after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996 [August 21, 1996], under Federal or State law--

(A) of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct--

(i) in connection with the delivery of a health care item or service, or

(ii) with respect to any act or omission in a health care program (other than those specifically described in subsection (a)(1)) operated by or financed in whole or in part by any Federal, State, or local government agency; or

(B) of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct with respect to any act or omission in a program (other than a health care program) operated by or financed in whole or in part by any Federal, State, or local government agency.⁽¹⁾

The differences between these two versions of 1128(b)(1) are central to Petitioner's exceptions to the ALJ's conclusion that the I.G. had authority to exclude her.

The ALJ Decision and Petitioner's exceptions

The ALJ found that because Petitioner's felony offenses occurred between 1987 and 1992, the applicable statutory authority for her exclusion was former section 1128(b)(1) of the Act, which Congress enacted in 1987 as part of MMPPPA, rather than the provisions of section 1128(b)(1) of the Act as amended by HIPAA in 1996, which were in effect as of the date of the I.G.'s exclusion notice.

Petitioner argued that section 1128(b)(1) did not authorize the I.G. to exclude her because, as in effect currently and at the time of the exclusion, it applies only to misdemeanor offenses occurring after August 21, 1996, whereas she was convicted of felony offenses which occurred prior to that date. Accordingly, Petitioner took exception to the following findings of fact and conclusions of law:

10. Under section 1128(b)(1) of the Act, the I.G. is authorized to exclude any individual or entity that has been convicted, 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 program operated by or financed in whole or in part by any federal, State, or local government agency, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

14. The I.G. is authorized to exclude Petitioner pursuant to section 1128(b)(1) of the Act.

19. The I.G. properly excluded Petitioner from the [Medicare, Medicaid, and all federal health care programs] pursuant to section 1128(b)(1) of the Act.

Petitioner essentially argued that an earlier version of a properly amended statute cannot provide legal authority for government action, in this case the I.G.'s action to exclude her.⁽²⁾

In reviewing an ALJ decision, our standard of review on a disputed issue of law is whether the decision is erroneous. 42 C.F.R. � 1005.21(h). We find that the ALJ erred in concluding that the I.G. was authorized to exclude Petitioner under section 1128(b)(1) of the Act.

The I.G.'s notice of exclusion stated that Petitioner was being excluded pursuant to section 1128(b)(1) of the Act. By its plain language, section 1128(b)(1), as in effect currently and as of the date of the notice, applies only to criminal offenses occurring after August 21, 1996, the HIPAA date of enactment.⁽³⁾ Section 1128(b)(1) thus did not authorize the I.G. to exclude Petitioner based on her conviction for offenses occurring from 1987 through 1992.⁽⁴⁾

A federal agency may not impose a sanction except as authorized by law. 5 U.S.C. � 558(b).⁽⁵⁾ The version of section 1128(b)(1) that the I.G. applied was amended effective January 1, 1997 and thus did not authorize the I.G. to exclude Petitioner in May 1998. The notice of exclusion failed to explain that Petitioner was being excluded under the superseded version of section 1128(b)(1), as it existed prior to its amendment by HIPAA. Neither the I.G. nor the ALJ cited any authority for the proposition that an agency continues to derive authority to administer a sanction after Congress removes the specific statutory language that formerly authorized the sanction. Nor does the I.G.'s interest in protecting the programs from individuals such as Petitioner supply that authority.

The I.G. nonetheless argued that the language limiting certain exclusions to offenses committed after August 21, 1996 was meant to apply only to the new exclusion authorities granted by HIPAA, and that the legislative history authorized Petitioner's exclusion for earlier offenses under the superseded version of section 1128(b)(1). The I.G. further argued that this interpretation was supported by Board precedent, and that the prior statute provided notice that those committing fraud would be subject to exclusion. We consider each of these arguments below.

1. The legislative history

The I.G. argued that the legislative history supported exclusion under the pre-HIPAA version of section 1128(b)(1). The I.G. cited language in the HIPAA House Conference Report stating that the Secretary would retain the discretionary exclusion authorities under section 1128(b)(1). The I.G. also argued that MMPPPA and HIPAA were intended to expand the Secretary's authority to exclude persons convicted of covered offenses.⁽⁶⁾ Thus, the I.G. contended, the time limit on covered offenses in the current statutory language should be read as applying only to those offenses added by the HIPAA amendments.

The general rule of statutory construction is that the plain meaning of the statute should control, and that resort to legislative history is appropriate only where a statute is ambiguous. A-Z International v. Phillips, 179 F.3d 1187 (9^th Cir. 1999), ("It is only if the statutory language is ambiguous, i.e. gives rise to more than one reasonable interpretation, that this Court turns to legislative history." 179 F.3d at 1192); New Jersey Dept. of Human Services, DAB No. 1306 (1992). Here, the statute in question is not ambiguous as it is not susceptible of more than one interpretation: section 1128(b)(1) plainly states that it applies to criminal offenses committed after the date of enactment of HIPAA. The placement of the date in the statutory provision allows for no other interpretation. The Supreme Court has stated that "[g]iven the straightforward statutory command, there is no reason to resort to legislative history." United States v. Gonzales, 520 U.S. 1, 6 (1997), citing Connecticut Nat'l. Bank v. Germain, 503 U.S. 249, at 253-54 (1992) ("We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there . . . When the words of a statute are unambiguous, then, this first canon is also the last: 'judicial inquiry is complete.'"). Accordingly, the I.G.'s resort to the legislative history is not warranted.⁽⁷⁾

Even if it were appropriate to rely on the legislative history, we do not agree that the legislative history is inconsistent with a finding that the I.G. lacked authority to exclude Petitioner. The I.G. argued that there was no indication that Congress intended to terminate or restrict prior exclusion authority, and that a finding that HIPAA removed the authority to exclude Petitioner would be an extraordinary and unintended result. However, the cited language in the legislative history, that the Secretary would retain discretionary exclusion authorities, is susceptible of other, less sweeping interpretations than one permitting exclusions not authorized by the plain language of the statute. Given that a principal effect of HIPAA was to remove the Secretary's discretion to decline to exclude individuals convicted of certain felony offenses, the cited statement could reasonably be viewed as simply clarifying that there would still be offenses for which the Secretary could decline to issue an exclusion.

The Supreme Court has held that statutory language must be regarded as conclusive in the absence of a clearly-expressed contrary legislative intention, and that only the most extraordinary showing of clearly stated contrary intentions in the legislative history would justify a limitation on the "plain meaning" of the statutory language. Garcia v. United States, 469 U.S. 70, 75 (1984); North Dakota v. United States, 460 U.S. 300, 312 (1983), citing Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). The language in the legislative history that the I.G. cited does not clearly state an intention that is contrary to the unambiguous words of the statute. As the I.G. noted, the legislative history is silent as to the specific issue of offenses committed before August 21, 1996. I.G. Brief, at 13. Thus, this legislative history does not support a conclusion that the prior statutory language remained in effect after it was removed by Congress, or that the I.G. may issue exclusions which are not authorized by the plain language of the law.

2. The I.G.'s interpretation of the statute

The I.G. argued that pre-HIPAA exclusion authority remained in effect because the August 21, 1996 limitation applied only to the expanded exclusion authority provided under HIPAA. The I.G. argued that this interpretation was entitled to deference, given the silence of the legislative history and the statute as to offenses committed before August 21, 1996, and that health care providers have long had notice that they were subject to exclusion for offenses described in former section 1128(b)(1).

However, the issue before us is not the degree of deference accorded an agency's reasonable interpretation of the statutes it administers, but whether the exclusion was authorized by law. As we discussed above, the plain language of section 1128(b)(1) did not authorize the I.G. to exclude Petitioner in May 1998. The interpretation of the statute urged in the I.G.'s brief is not consistent with the statutory language or supported by the legislative history. If Congress had intended the time limitation to apply only to the new exclusion authorities, as the I.G. argued, then Congress could have accomplished this simply by not including the reference to the HIPAA date of enactment in section 1128(b). Instead, Congress included the time limit in both sections.

The Supreme Court case cited by the I.G. held that the agency's interpretation is entitled to deference where the statute is silent or ambiguous with respect to the specific issue. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Here, there is no ambiguity in the plain language of section 1128(b), which is explicit in its delineation of the Secretary's exclusion authority. For that reason, it has no bearing that the prior MMPPPA language may have put providers on notice that certain offenses were subject to exclusion. The I.G. was no longer authorized to continue to issue exclusions for those offenses once the Act had been amended to remove the specific authority that MMPPPA had previously provided.

Moreover, the I.G. did not show that the interpretation advanced here has been officially adopted as the Department's interpretation. Neither the text nor the preamble of the implementing regulations, issued on September 2, 1998 (after the exclusion notice), specifically addressed the issue here. 42 C.F.R. �� 1001.101, 1001.201; 63 Fed. Reg. 46,676.

3. Board precedent

The Board decisions that the I.G. cited also do not provide specific support for excluding Petitioner under the superseded version of section 1128(b)(1), because, as Petitioner noted, they do not squarely address the argument she raised in this case.

In Arie Oren, M.D., DAB CR490 (1997), the petitioner argued only that application of the current, post-HIPAA version of section 1128(a) was an ex post facto violation, and he challenged application of the superseded version of the statute on the ground that it provided for permissive exclusion only where the criminal activity involved a federal or state program. Before the Board, the Oren petitioner cited the HIPAA amendment of section 1128(b)(1) as evidence that the prior law must have been ambiguous, an argument rejected by the Board. Arie Oren, M.D., DAB 1650 (1998). On remand from the Board to consider evidence relating to the length of the exclusion, the ALJ again did not address the argument that Petitioner made here, and noted only that the type of offenses that formerly supported exclusion under section 1128(b)(1) are now covered under section 1128(a)(3).⁽⁸⁾ DAB CR564 (1999). Thus, Oren entailed no specific challenge to application of the former statute on the ground that it was no longer in effect and current law did not authorize the exclusion. Moreover, the I.G. in Oren excluded Petitioner by letter dated December 18, 1996, prior to the HIPAA effective date of January 1, 1997. Thus, the earlier version of section 1128 was applicable.

For the same reason, two other decisions that the I.G. cited do not provide a basis for sustaining the ALJ Decision here. In Joseph Tramontana, Ph.D., DAB CR503 (1997), the ALJ merely observed that the I.G. did not exclude the petitioner under the current, post-HIPAA version of the Act because it applies to offenses which occurred after the HIPAA date of enactment. The decision contains no indication that the petitioner ever objected to application of the old law. In Stephen J. Weiss, DAB CR581 (1999), the petitioner's sole basis for challenging the I.G.'s determination was his contention that he was not convicted of a type of criminal offense covered by the statute. As in Tramontana, the ALJ observed only that the petitioner's criminal conduct preceded the HIPAA amendments to section 1128, and there was no challenge to the I.G.'s use of the old version of the statute. Thus, neither decision cited offers any analysis to support a conclusion that the I.G. is authorized to issue an exclusion based on the superseded version of section 1128(b)(1).

Based on the analysis above, we reverse the ALJ Decision excluding Petitioner from participation in the Medicare, Medicaid, and all federal health care programs.

1. Section 1128(a) of the Act ("mandatory exclusion") requires the Secretary of Health and Human Services to exclude individuals or entities convicted of certain offenses, including felony offenses related to health care fraud. Section 1128(b) ("permissive exclusion") provides the Secretary the discretion to decline to issue exclusions for certain other offenses. One effect of HIPAA was to require mandatory exclusions under section 1128(a) for some felony offenses that had previously been subject to permissive exclusions under section 1128(b).

2. Because we reverse the decision, we need not reach Petitioner's other exceptions.

3. HIPAA amendments to section 1128, and to other portions of the Act involving the prevention of health care fraud and abuse, were effective January 1, 1997, prior to the date of Petitioner's exclusion. Public Law No. 104-191, � 218.

4. Petitioner also contended that her offenses were outside of the scope of the statute because they were not connected with the delivery of a health care item or service. As noted previously, we need not resolve that issue here.

5. "Sanction" includes the whole or a part of an agency --

(A) prohibition, requirement, limitation, or other condition affecting the freedom of a person;

(B) withholding of relief;

(C) imposition of penalty or fine;

(D) destruction, taking, seizure, or withholding of property;

(E) assessment of damages, reimbursement, restitution, compensation, costs, charges, or fees;

(F) requirement, revocation, or suspension of a license; or

(G) taking other compulsory or restrictive action[.]

5 U.S.C. � 551(10).

6. The House Conference Report on HIPAA states:

The Secretary would also retain the discretionary authority to exclude individuals from Medicare and State health care programs who have been convicted of misdemeanor criminal health care fraud offenses, or who have been convicted of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in programs (other than health care programs) funded in whole or part by any Federal, State or local agency.

H.R. Conf. Rep. No. 736, 104^th Cong., 2^nd Sess. 177, 247 (1996), reprinted in 1996 U.S.C.C.A.N. 1990, 2060.

7. The I.G. cited two Supreme Court decisions for the point that "[l]ooking beyond the naked text for guidance is perfectly proper when the result it apparently decrees is difficult to fathom or where it seems inconsistent with Congress' intention, since the plain-meaning rule is 'rather an axiom of experience than a rule of law, and does not preclude consideration of persuasive evidence if it exists.'" Public Citizen v. Dept. of Justice, 491 U.S. 440, 455 (1989), citing Boston Sand & Gravel Co. v. United States, 278 U.S. 41, 48 (1928). Neither of those decisions compels sustaining the exclusion here.

In Boston Sand & Gravel Co., the Court considered whether certain creditors were entitled to a judgment of interest against the United States, where the specific statute at issue was silent on that question. The Court looked to "the rule that the United States is not liable to interest except where it assumes the liability by contract or by the express words of a statute, or must pay it as part of the just compensation required by the Constitution." 278 U.S. at 47. Here, the statute is not silent on the extent of the I.G.'s exclusion authority, and there is no longstanding law permitting the exclusion in this instance; instead, the former authorizing provision was removed by HIPAA. Public Citizen involved interpretation of language in the Federal Advisory Committee Act requiring that meetings of an advisory committee -- defined as including any group "established or utilized" by the executive branch -- be open to the public. The Court there observed that "'[u]tilize' is a woolly verb, its contours left undefined by the statute itself." 491 U.S. at 452. Here, there is no uncertainty in the plain language of the current version of section 1128(b)(1).

8. Section 1128(a)(3) does not support the exclusion here because it was not cited by the I.G.'s notice of exclusion, and, moreover, section 1128(a)(3), like section 1128(b)(1), applies to offenses committed after August 21, 1996. The I.G. did not indicate what portion of the current section 1128 would cover felonious conduct occurring prior to August 21, 1996.