SUBJECT: Salvacion Lee, M.D.,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Salvacion Lee, M.D., (Petitioner) appealed the June 24, 2002 decision by Administrative Law Judge (ALJ) Richard J. Smith affirming the determination of the Inspector General (I.G.) to exclude Petitioner from participation in Medicare, Medicaid, and all federal health programs as defined in section 1128B(f) of the Social Security Act (Act) for a period of five years. Salvacion Lee, M.D., DAB CR920 (2002) (ALJ Decision). The ALJ determined that a five-year exclusion was mandatory because Petitioner had pleaded guilty to a charge of conspiracy to commit bribery. On appeal, Petitioner argued that her conviction was not related to the delivery of an item or service under Medicare or a state health care program and that therefore there was no basis for her mandatory exclusion.

For the reasons discussed below, we agree with the ALJ that there was a nexus between the offense of which Petitioner was convicted and the delivery of a service under the Medicare program.

Accordingly, we sustain the ALJ Decision excluding Petitioner from participation in federal health care programs for five years.

The record for our decision includes the record before the ALJ and the parties' submissions on appeal. Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. 42 C.F.R. � 1005.21(h). Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. Id.

Applicable Laws

Section 1128(a)(1) of the Act requires that any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Medicare or any state health care program be excluded from participation in federal health care programs. Section 1128(c)(3)(B) of the Act further provides that this exclusion is mandatory and must be for a minimum period of five years.

Factual Background

The following summary of the undisputed facts is intended to provide a general framework for understanding the decision and is not intended to be a substitute for the ALJ's findings.

Petitioner is a physician licensed to practice in California.

The Center for Medicare and Medicaid Services designated the Transamerica Occidental Life Insurance Company (Transamerica) to process Medicare claims in the Southern California area. In 1997, Transamerica notified Petitioner that she owed Transamerica approximately $173,000 for Medicare overpayments. Petitioner and a Medicare consultant met and conspired to pay a bribe of $10,000 to an auditor in Transamerica's Medicare Fraud Investigation Unit for the auditor to understate the amount of Medicare overpayments that Petitioner was required to repay Transamerica.

Petitioner was indicted in U.S. District Court on two charges, one count of conspiracy to commit bribery under 18 U.S.C. � 371 , and another count of corruptly paying a bribe in violation of 18 U.S.C. � 201(b)(1). On September 1, 2000, Petitioner pleaded guilty to conspiracy to commit bribery, and was placed on probation for three years and ordered to pay a $2,500 fine and a $100 assessment.

The I.G. subsequently notified Petitioner that she was being excluded for five years.

The ALJ Decision

In reaching his decision sustaining Petitioner's exclusion for five years, the ALJ made 20 findings of facts and conclusions of law (FFCLs), four of which Petitioner contested on appeal:

5. Beginning in approximately August 1996, Petitioner devised and executed a scheme whereby she submitted claims to Medicare via Transamerica for respiratory therapy services provided to Medicare beneficiaries allegedly performed in compliance with Medicare program requirements, but in fact not performed in compliance with such requirements. Those claims were false and were known by Petitioner to be false when she submitted them for payment. [citations to record omitted]

6. On August 5, 1997, Transamerica determined that Petitioner had been overpaid for her claims for Medicare services provided pursuant to the scheme described above in Finding 5, in the approximate amount of $173,103.98. [citations to record omitted]

16. A nexus and common-sense connection exists between the criminal offense to which Petitioner pleaded guilty, . . . and on which plea she was convicted and sentenced . . . and the delivery of an item or service under the Medicare program.

17. Because of the nexus and common-sense connection noted above in Finding 16, Petitioner's conviction for violation of 18 U.S.C. � 371 relates to the delivery of an item or service under the Medicare program within the meaning of section 1128(a)(1) of the Act.

The ALJ rejected Petitioner's arguments that the criminal offense for which she was convicted - conspiracy to commit bribery - was not related to the delivery of an item or service under the Medicare program, but rather the crime was directed toward avoiding a hearing on her administrative appeal of overpayments. The ALJ found that section 1128(a)(1) of the Act is applicable not only to cases of actual fraud against the Medicare and Medicaid programs, but also to convictions related to the delivery of an item or service where "financial misconduct against the program had or could have had an impact on the delivery of health care items or services." ALJ Decision at 8.

Discussion

On appeal, Petitioner argued that the ALJ Decision was based on facts which were not supported by substantial evidence in the record and on "erroneous laws." P. Br. at 2. Petitioner contended that the underlying offense in the chain of events that led to Petitioner's conviction was "an issue of an overpayment and not any fraud, false billing, fabrication of charts or any conduct remotely close to any crime." Id. Petitioner maintained that the ALJ in his decision failed to consider controlling cases regarding bribery, and further failed to take into consideration the equity and fairness of Petitioner's circumstances.

We find no merit whatsoever in Petitioner's arguments.

Petitioner's position is based on the mistaken assumption that the underlying basis for her exclusion was her receipt of overpayments from the Medicare program. That is simply not the case. Petitioner was not convicted of receiving overpayments. Rather, Petitioner was excluded because she was convicted for conspiracy to commit bribery of an agent of Transamerica in order to substantially reduce the amount of Medicare overpayments she would be required to refund. This is more than sufficient to establish a nexus between Petitioner's conduct and the delivery of a health care item or service under the Medicare program as set forth in section 1128(a)(1). Offering bribes to auditors overseeing the payment of Medicare claims places the Medicare program financially at risk by providing an incentive to auditors to underestimate the amounts due the program. Thus, it is irrelevant whether fraud or false claims might have been involved here as part of a scheme as described in FFCLs 5 and 6, as Petitioner's conviction for conspiracy to bribe a Medicare agent clearly put Petitioner within the ambit of proscribed conduct related to the delivery of an item or service under the Medicare program. Indeed, we accepted review of this case for the sole purpose of clarifying this point, as FFCLs 5 and 6 might have led to confusion as to the basis for Petitioner's exclusion, even though the ALJ Decision thoroughly discussed the nexus between Petitioner's offense for which she was convicted and its potential impact on the Medicare program.

Petitioner's other arguments are equally unavailing. Petitioner's exclusion was mandatory under the Act once the nexus was established between her offense and the delivery of an item or service under the Medicare program. The ALJ had no discretion to impose a lesser remedy. In the same vein, the ALJ could not consider any equitable concerns that might pertain to Petitioner's situation.

Conclusion

5. Beginning in approximately August 1996, Petitioner submitted claims to Medicare via Transamerica for respiratory therapy services provided to Medicare beneficiaries allegedly performed in compliance with Medicare program requirements, but in fact not performed in compliance with such requirements. P. Ex. 1.

6. On August 5, 1997, Transamerica determined that Petitioner had been overpaid for her claims for Medicare services in the approximate amount of $173,103.98. P. Ex. 1.

We affirm and adopt all the other FFCLs made by the ALJ

Judith A. Ballard

M. Terry Johnson

Marc R. Hillson
Presiding Board Member