Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Georgia Goldfarb, M.D., |
DATE: May 17, 2000 |
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The
Inspector General
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Docket No.C-97-244
Decision No. CR670 |
DECISION | |
By letter dated January 15, 1997, the Inspector
General (I.G.), United States Department of Health and Human Services, notified
Georgia Goldfarb, M.D. (Petitioner) that she would be excluded from participation
in Medicare and Medicaid.(1) The I.G. imposed
this exclusion pursuant to sections 1892 and 1128(b)(14) of the Social Security
Act (Act) due to Petitioner's failure to repay student loans borrowed through
the Health Education Assistance Loan program (HEAL) or to enter into a repayment
agreement. The I.G. informed Petitioner that this exclusion would be effective
20 days from the date of the notice letter and that it would remain in effect
until the debt has been satisfied. On February 18, 1997, the United States Department of
Justice and the Public Health Service accepted a compromise offer of settlement
from Petitioner. On February 24, 1997, the I.G. notified Petitioner that
she was reinstated to participate as a provider in Medicare, effective
February 18, 1997, and that appropriate State health care programs had
been notified of this action. Although she was already reinstated, Petitioner requested
a hearing by letter dated March 13, 1997. At Petitioner's request, the
case was stayed for an indefinite period in order to allow her the opportunity
to obtain counsel. Petitioner was instructed to contact my office when
she was ready to proceed. Petitioner did not contact my office, and on
August 11, 1999, I issued an Order to Cause why this case should not be
dismissed for abandonment. In response to the Order to Show Cause, Petitioner
submitted a letter dated August 24, 1999, in which she stated that she
never intended to abandon the appeal and that she wished to proceed. The I.G. subsequently filed a motion to dismiss accompanied
by a supporting brief (I.G. Br.) and 26 proposed exhibits (I.G. Exs. 1
- 26). Petitioner filed a response brief (P. Br.). Petitioner did not
object to the I.G.'s exhibits in her response brief, and I admit I.G.
Exs. 1 - 26 into evidence. Petitioner referred to two documents in her response brief
which were not contained in the record. By letter dated February 3, 2000,
I gave Petitioner the opportunity to submit these documents. I gave the
I.G. the opportunity to object to my admitting these documents into evidence
in the event that Petitioner submitted them. I also noted that Petitioner
had submitted 10 documents with her initial hearing request, which I identified
as P. Exs. 1 - 10. I gave the I.G. the opportunity to object to my admitting
P. Exs. 1 - 10 into evidence. Petitioner subsequently submitted the two documents referred
to in her response brief. I identify these documents as P. Exs. 11 - 12.
The I.G. filed a reply in which she did not object to my admitting P.
Exs. 1 - 12 into evidence. In the absence of objection, I admit P. Exs.
1 - 12 into evidence. Based on my review of the record, I have determined that
there are no material and relevant factual issues in dispute and that
the only matters to be decided are the legal implications of the undisputed
facts. Thus, I am able to decide the case on the basis of the parties'
written submissions. I conclude that the I.G. properly excluded Petitioner
under section 1128(b)(14) of the Act from participation in Medicare and
Medicaid for the period February 5, 1997 until February 18, 1997 when
Petitioner satisfied her post-due indebtedness.
APPLICABLE LAW Medicare and Medicaid exclusions imposed by the Secretary
as a result of a health care practitioner's failure to repay a HEAL loan
are governed by sections 1128(b)(14) and 1892 of the Act. In 1987 Congress
enacted section 1128(b)(14) as a part of the Medicare and Medicaid Patient
and Program Protection act of 1987, Pub.L. 100-93 (MMPPPA). MMPPPA recodified
and expanded the Secretary's existing authority to exclude a provider
from participation in Medicare and Medicaid, including "[a]ny individual
who the Secretary determines is in default on repayments of . . . loans
in connection with health professions education made or secured, in whole
or in part, by the Secretary and with respect to whom the Secretary has
taken all reasonable steps available to the Secretary to secure repayment
of such obligations or loans . . ." Section 1128(b)(14) of the Act. Section
1128(b)(14) applies to HEAL loans. Section 1892 of the Act authorizes the Secretary to enter
into an agreement with a health care practitioner who owes "a past-due
obligation to the United States" to deduct from amounts otherwise payable
to the debtor by Medicare "until such past-due obligation (and accrued
interest) have been repaid . . ." If an individual does not generate sufficient
program reimbursement to satisfy the outstanding debt, or if he or she
"refuses to enter into an agreement or breaches any provision of the agreement,"
the Secretary is directed by sections 1892(a)(2)(C)(ii) and 1892(a)(3)(B)
of the Act to exclude the individual from participation in Medicare "until
such time as the entire past-due obligation has been repaid." The Secretary's
exclusion authority under section 1892 of the Act has been delegated to
the I.G.(2)
PETITIONER'S CONTENTIONS Petitioner does not contest that she took out the HEAL
loans in question. Petitioner contends, instead, that the exclusion was
unlawful because the "government did not offer me all reasonable administrative
opportunities to repay the loan." Petitioner Hearing Request at p. 4.
Petitioner asserts that she "was always willing to enter into an agreement
to repay the entire amount of the loan plus some interest." P. Br. at
p. 1. According to Petitioner, the difference between the government's
position and her position concerned only the amount of interest she should
pay. Petitioner maintains that due to job setbacks and personal hardships,
she was unable for many years to repay the amounts which the government
demanded be paid. Petitioner contends that the government's insistence
on requiring repayment at a level which she could not afford was not reasonable.
Petitioner asserts that it was not until after the exclusion was imposed
that the government finally agreed to reasonable repayment terms. Petitioner
states that the governments's lack of good faith is shown by the fact
that the amount of the final settlement was comparable to the amount she
had originally offered. In addition, Petitioner states that the government acted
unreasonably because it did not respond to communications from her representatives
in a timely manner during the 20-day period from the time the exclusion
letter was issued on January 15, 1997 and the time it went into effect
on February 5, 1997. Petitioner argues that the exclusion would not have
ever become effective if the government had acted in a timely manner to
reach a settlement agreement. Petitioner maintains that in view of the
government's unreasonable actions and its unfair treatment of her, the
exclusion should never have been imposed and it should be rescinded.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 1. On February 10, 1982, Petitioner, while studying medicine,
executed a promissary note in which she promised to repay a HEAL loan
in the amount of $14,000 with a variable rate of interest and a repayment
term to commence on the first day of the tenth month after her ceasing
to be a full-time student or an intern or resident in an accredited program.
I.G. Ex. 1. 2. In correspondence dated February 10, 1983, the State of Wisconsin notified Petitioner that, as a result of her ceasing to be a full-time student, scheduled repayment of her HEAL loan was to commence July 1, 1983. I.G. Ex. 2. 3. On December 15, 1983, Petitioner's HEAL loan was declared
in default, and the promissory note was subsequently assigned to the Public
Health Service. I.G. Ex. 4. 4. Commencing in 1984, and continuing through July 1986,
the Public Health Service contacted Petitioner regarding her entering
into a repayment agreement to satisfy her unpaid HEAL loans. I.G. Exs.
4 - 16. 5. By letter dated August 14, 1986, the Public Health
Service notified Petitioner that, due to her financial difficulties, it
was granting her a six-month forbearance on her HEAL loan from September
1, 1986 through March 31, 1987. I.G. Ex. 17. 6. Petitioner's failure to repay her HEAL loan resulted
in a judgment against her on February 16, 1988 in United States District
Court, Central District of California, in the amount of $36,196.71. I.G.
Ex. 19. 7. As of January 15, 1997, Petitioner had not entered
into a repayment agreement or other arrangement to satisfy the outstanding
debt. I.G. Exs. 20 - 22. 8. On January 15, 1997, the I.G. notified Petitioner of
her exclusion under section 1128(b)(14) of the Act from participation
in Medicare and Medicaid, which exclusion would remain in effect until
her HEAL loans were satisfied. I.G. Ex. 23. 9. On February 18, 1997, Petitioner paid $45,000, which
the Public Health Service and the Department of Justice accepted in satisfaction
of Petitioner's HEAL loan debt. I.G. Ex. 24. 10. As a result of her satisfaction of the HEAL loan debt,
the I.G. reinstated Petitioner effective February 18, 1997. I.G. Ex. 25. 11. Petitioner's unpaid HEAL loans were loans within the
scope of section 1128(b)(14) of the Act. 12. Prior to imposing the exclusion, the Secretary had
taken all reasonable steps available to secure repayment of Petitioner's
HEAL loans. 13. The Secretary has delegated to the I.G. the duty to
determine and impose exclusions pursuant to section 1128(b) of the Act. 14. The I.G. properly excluded Petitioner under section
1128(b)(14) of the Act from participation in Medicare and Medicaid for
the period February 5, 1997 until February 18, 1997 when Petitioner satisfied
her past-due indebtedness.
DISCUSSION As an initial matter, the I.G. has moved that I dismiss
Petitioner's request for a hearing for abandonment under 42 C.F.R. � 1005.2(e)(3).
The I.G. asserts that Petitioner requested that the case be stayed so
that she could obtain counsel, but then failed to respond to my April
17, 1997 letter directing her to contact my office when she would be ready
to proceed. While it is true that Petitioner never contacted this office
to reschedule the prehearing conference as directed by my April 17, 1997
letter, the record shows that Petitioner did timely respond to my August
11, 1999 Order to Show Cause. Insofar as Petitioner timely responded to
my Order to Show Cause, I find that she has not abandoned her hearing
request and I shall consider her claims on their merits. It is uncontested that Petitioner was enrolled as a student
at the Medical College of Wisconsin in 1982 and that in 1982 she borrowed
a total of $14,000 from the HEAL program to finance her medical education.
She received and executed a promissory note for the loan. The promissary
note detailed the interest rate, amount borrowed, and the date on which
interest began to accrue. Petitioner acknowledges receiving the loan and
does not dispute that the loan was made "in connection with health professions
education." Section 1128(b)(14) of the Act. See e.g. Mohammad
H. Azarpira, D.D.S., DAB CR372 (1995); James F. Cleary, D.D.S.,
DAB CR252 (1993)(uncontested that debt arose from loans made in connection
with health professions education where petitioners attended dental school
when they applied for HEAL loans). According to the terms of the promissary note, Petitioner
promised to repay the loan in periodic installments beginning the first
day of the tenth month after she either ceased being a full-time student
at a HEAL-recognized school or ceased being an intern or resident in an
accredited program. The amount of money repaid would include an interest
amount based on the terms of the individual promissary note. Repayment
of Petitioner's HEAL loans was to begin in July 1983. The record further
reflects that Petitioner did not repay the sums owed under the terms of
the HEAL loan agreement, and she was found in default on December 15,
1983. Petitioner does not dispute that she defaulted on repayment of her
HEAL debt and that she had not successfully negotiated a compromise payment
with the government at the time that the exclusion was imposed in 1997. Given the undisputed facts in this case, I must find that
the I.G. had authority to exclude Petitioner under section 1128(b)(14)
if I conclude that the Secretary took "all reasonable steps available"
to secure Petitioner's repayment of her HEAL debt. The term "all reasonable
steps available" has been construed to mean all reasonable and legitimate
means of debt collection. In attempting to collect a debt, the Secretary
must be reasonable only in the sense that she should not insist on repayment
arrangements which are "palpably unfair." Cleary, DAB CR252.
The reasonableness standard also does not require the
Secretary to excuse individuals from repayment obligations because of
financial status, or to accept financial arrangements which do not accomplish
the objective of repayment, or enter into relationships that are not in
the public interest. Id. at 13; see also
Majauskas, DAB CR441. The Secretary has also interpreted the phrase
"all reasonable steps available" by regulation. The applicable regulation
provides that "all reasonable administrative steps available to secure
repayment" of a HEAL debt will have been achieved where the debtor has
been offered a Medicare offset arrangement. 42 C.F.R. � 1001.1501(a)(2).
Although an offset agreement is not a necessary element of "all reasonable
administrative steps," it is conclusive proof that all reasonable steps
have been taken by the Secretary. Charles K. Angelo, Jr., DAB CR290,
at 12 (1993). I find that the record establishes that Petitioner was
accorded all reasonable steps to repay her HEAL debt and I reject Petitioner's
claim that she was not provided with such opportunity. The record reflects
that repayment of Petitioner's HEAL loan was to commence in July 1983.
Despite her express promise to repay the loan, Petitioner failed to begin
repayment on the debt as scheduled and was found in to be in default on
December 15, 1983. The Public Health Service sent numerous written inquiries
regarding the loan to Petitioner between 1984 and 1986. These letters
from the Public Health Service are replete with warnings that the failure
to respond could lead to legal action. The letters repeatedly provided
her with opportunities to work out an arrangement to repay her debt. By
letter dated August 14, 1986, the Public Health Service notified Petitioner
that, due to her financial difficulties, it was granting her a six-month
forbearance on her loan from September 1, 1986 through March 31, 1987.
However, Petitioner still failed to work out repayment terms after that,
and a judgment was entered against her on February 16, 1988 in the United
States District Court, Central District of California, for $36,196.71.
By its terms, the judgment was to accrue interest at 6.59% per annum until
paid. Even after judgment was entered against her, Petitioner
did not repay the loan. During 1991 and 1992, Petitioner, through her
husband, Walter Zelman, attempted to negotiate a compromise payment with
the Public Health Service, but was unsuccessful in coming to an agreement.
On July 25, 1996, the Public Health Service sent a letter to Petitioner
offering her the opportunity to enter into a repayment agreement or to
pay the loan back in full within 60 days. The letter gave Petitioner notice
that if she did not negotiate the repayment agreement within 60 days,
or agree to an offset from Medicare and Medicaid reimbursements, the matter
would be referred to the I.G. and Petitioner would be excluded until the
entire debt had been repaid. Petitioner did not repay the loan, enter
into a repayment agreement, or agree to an offset from Medicare and Medicaid
reimbursements. The case was referred to the I.G. and a notice of exclusion
was issued on January 15, 1997. On such facts, I find that the Secretary
has taken all reasonable steps to obtain repayment of Petitioner's HEAL
loan. Petitioner asserts that the Public Health Service did
not afford her ample opportunity to repay a reduced amount of the debt
because she was unable to afford to repay the full amount and also that
the repayment plans offered by the Public Health Service were at amounts
she could not afford. On this basis, Petitioner asserts that the Secretary
did not take all reasonable steps to secure repayment. I find that the
statute and regulations do not require that Petitioner be provided with
the opportunity to repay a reduced amount, only that the Secretary take
all reasonable steps available to secure repayment of the loan. The record
reflects that Petitioner, on numerous occasions, was offered opportunities
to repay her loan under various repayment plans. Such record satisfies
the requirements of the statute. Finally, Petitioner asserts that her exclusion is unfair
because government officials did not timely respond to communications
from her representatives during the 20-day period from the time the exclusion
notice was issued on January 15, 1997 and the time it went into effect
on February 5, 1997. According to Petitioner, the exclusion would never
have gone into effect if the government had acted in a timely manner to
reach a settlement agreement during this period. Petitioner's argument is without merit. The record shows
that attempts were made by Petitioner's representatives to negotiate a
settlement during the 20-day period which might have prevented the exclusion
from taking effect. However, the fact that these attempts to negotiate
a quick settlement of Petitioner's debt were not successful within a matter
of days is not unexpected, and there is no evidence that the government
deliberately delayed discussions in order to ensure that the exclusion
would become effective. Indeed, a settlement agreement was expeditiously
reached, and Petitioner's exclusion lasted less than two weeks. The record
is devoid of evidence that government officials acted unreasonably or
with undue delay in negotiating a settlement agreement after the notice
of exclusion was issued. In view of the foregoing, I conclude that the I.G. had
the authority to exclude Petitioner from participating in Medicare and
Medicaid under section 1128(b)(14) of the Act. See Azarpira,
DAB CR372 (exclusion is reasonable where petitioner failed to respond
to instructions on how to enter into repayment agreement; failed to provide
information necessary to enter into an offset agreement; made his first
payment only after exclusion; and never made payments large enough to
pay even the accruing interest on his HEAL loans). I conclude also that the length of the exclusion is reasonable. The regulations provide that an exclusion remains in effect until the default is cured or the obligations have been resolved to the Public Health Service's satisfaction. 42 C.F.R. � 1001.1501(b). The fact that the Public Health Service referred the matter to the I.G. after giving Petitioner numerous opportunities to resolve the debt indicates that the Public Health Service was not satisfied within the meaning of the regulation. The debt remained unpaid until February 18, 1997. The exclusion from February 5, 1997 until February 18, 1997 therefore was proper. Petitioner also evidently asserts that because the debt is now satisfied, the ALJ should rescind the period of exclusion. As I have found that the I.G. properly excluded Petitioner, I have no authority to retroactively reinstate Petitioner. Mark Baldwin, D.O., DAB CR614 (1999) and cases cited therein. |
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JUDGE | |
Joseph K. Riotto |
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FOOTNOTES | |
1. In this decision, I use the term "Medicaid" to refer to all State health care programs from which Petitioner was excluded. 2. My decision here does not address Petitioner's exclusion under section 1892 of the Act for two reasons. First, I have found Petitioner's exclusion to be authorized under section 1128(b)(14) of the Act and I need not consider whether it is also authorized under section 1892. Second, it is not clear whether I have the authority to review an exclusion imposed by the I.G. under section 1892. See Rikantas (Rik) Majauskas, D.O., DAB CR441 (1996). | |