Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Caroline Haggard Flores, |
DATE: June 6, 2000 |
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The
Inspector General
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Docket No.C-00-156 Decision No. CR675 |
DECISION | |
I sustain the determination of the Inspector
General (I.G.) to exclude Petitioner, Caroline Haggard Flores, from participating
in Medicare and other federally funded health care programs for a period
of 20 years. I find that Petitioner was convicted, within the meaning of
section 1128(a)(1) of the Social Security Act (Act), of a criminal offense
relating to the delivery of items or services under Medicare. I find additionally
that the I.G.'s determination to exclude Petitioner for a period of 20 years
is reasonable given the aggravating factors that exist in this case and
the absence of any mitigating factors. I. Background On September 30, 1999, the I.G. notified Petitioner that
she was being excluded from participating in Medicare and other federally
funded health care programs for a period of 20 years based on Petitioner's
conviction of a criminal offense as is described in section 1128(a)(1)
of the Act. Petitioner requested a hearing and the case was assigned to
me for a hearing and a decision. On January 28, 2000, I held a pre-hearing conference at
which the parties agreed that the case could be heard and decided based
on their written submissions. Each side has submitted a brief. In addition,
the I.G. submitted three proposed exhibits (I.G. Ex. 1 - I.G. Ex. 3).
I admit into evidence I.G. Ex. 1 - I.G. Ex. 3.
I make findings of fact and conclusions of law (Finding)
to support my decision in this case. I set forth each Finding below as
a separately numbered heading. I discuss each Finding in detail.
On June 8, 1998, the United States District Court for
the Western District of Texas entered a Judgment against Petitioner based
on two federal crimes. I.G. Ex. 3 at 1. Petitioner's guilty plea included
a plea of guilty to Count Nine of an indictment, No. SA-96-CR-108(1),
and Count One of an indictment, No. SA-97-CR-112(4) which had been issued
against her previously in that court. Id.; see I.G. Ex.
1 at 8 - 9. Petitioner entered her plea pursuant to a plea agreement that
she signed on November 5, 1997. I.G. Ex. 2. Petitioner pled guilty to conspiring to defraud the United
States Department of Health and Human Services of approximately $3,000,000.
I.G. Ex. 1 at 8. In pleading guilty, Petitioner acknowledged filing false
Medicare cost reports on behalf of an entity known as Communicare Home
Health Care Agency, Inc. (CHHCA). Petitioner pled guilty to representing
directly, and through the creation of backup documentation, that approximately
$3,000,000 in reimbursable medical supplies had been billed and provided
to CHHCA by a medical supplier known as Amex Medical, when, in truth,
as Petitioner knew, such supplies had not been billed or supplied by Amex
Medical. Id. at 6. Petitioner filed fraudulent cost reports for
the years 1992, 1993, and 1994. Id. at 9. The conspiracy to which
Petitioner pled guilty ran from on or about January 28, 1992 until on
or about May 11, 1994. Id. at 5. Petitioner's crime was a criminal offense that was related
to the delivery of items or services under Medicare. Petitioner was convicted
of conspiring to make false claims against the Medicare program. As a
matter of law, the making of false claims against Medicare is a criminal
offense within the meaning of section 1128(a)(1) of the Act that is related
to the delivery of items or services under that program. See Greene
v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990).
Section 1128(a)(1) of the Act mandates the I.G. to exclude
any individual who is convicted of a criminal offense that is related
to the delivery of an item or service under Medicare or a State Medicaid
program. The minimum term of a mandatory exclusion is five years. Act,
section 1128(c)(3)(B). Here, Petitioner was convicted of criminal offenses that
are related to the delivery of items or services under Medicare. Finding
1. The I.G. was, therefore, required to exclude Petitioner pursuant to
section 1128(a)(1) of the Act for a term of at least five years. Petitioner argues that, despite entering a plea of guilty
to the crime of conspiring to defraud Medicare, she is not in fact guilty
of that offense. Petitioner asserts that:
Petitioner's response to I.G.'s brief at Paragraphs 2
- 21, pages 1 - 4. I am not persuaded by Petitioner's argument. The I.G.'s
authority to exclude Petitioner pursuant to section 1128(a)(1) of the
Act derives from Petitioner's conviction of a program-related
offense. Here, Petitioner undeniably was convicted of such an offense.
Had a court permitted Petitioner to withdraw her guilty plea then the
operative facts of this case would be much different. But, as is evident
from Petitioner's response, that has not happened.
The Secretary has published regulations which govern the
length of exclusions that are imposed pursuant to section 1128 of the
Act. 42 C.F.R. Part 1001. The regulation which establishes criteria to
govern the length of exclusions that are imposed pursuant to section 1128(a)(1)
is 42 C.F.R. � 1001.102. This regulation identifies "aggravating" factors
which may be used, if present in a case, as a basis to lengthen an exclusion
beyond the five year minimum period and "mitigating" factors which may
be used, if present in a case, to offset any aggravating factors that
are established. The regulation makes clear that only those factors
that it identifies as either aggravating or mitigating may be considered
to determine whether an exclusion of more than five years is reasonable
in a case involving section 1128(a)(1) of the Act. The aggravating and
mitigating factors thus operate as rules of evidence in such a case. Evidence
which does not relate to an identified aggravating or mitigating factor
is irrelevant to determining the length of an exclusion and may not be
considered. The regulation does not, however, prescribe the weight
which is to be given to any aggravating or mitigating factor. The regulation
contains no formula prescribing any exclusion length beyond the five year
minimum period based on the presence of aggravating factors or absence
of mitigating factors. Rather, the regulation merely identifies the factors
which may be used to lengthen an exclusion beyond the minimum period. The factors which are identified in 42 C.F.R. � 1001.102
may not be applied arbitrarily to lengthen an exclusion beyond the five
year minimum. The regulation establishes the criteria which may be considered
in determining whether or not to lengthen an exclusion. But, in the absence
of any statement in the regulation as to how much weight must be given
to an aggravating or mitigating factor, one must look to the purpose of
the Act in order to determine what is the reasonable length of an exclusion
where aggravating or mitigating factors are present. Section 1128 of the Act is a remedial statute. Its purpose
is not to punish the excluded individual but to protect federally funded
health care programs and the beneficiaries and recipients of program funds
from an individual whose conduct establishes him or her not to be trustworthy.
In assessing the length of any exclusion that is imposed under section
1128, the ultimate issue that must be addressed is: how long of an exclusion
is reasonably necessary to protect programs, beneficiaries, and recipients
from an untrustworthy individual? The I.G. may not arbitrarily exclude an individual for
any period of more than five years simply because aggravating factors
exist in a given case. The I.G. must weigh the evidence that pertains
to aggravating and mitigating factors in order to establish the degree
of untrustworthiness that is manifested by the excluded individual. An
exclusion that is not based on what the evidence which relates to aggravating
and mitigating factors shows about the trustworthiness of the excluded
individual may be arbitrary and unreasonably punitive.
Any individual who is excluded pursuant to section 1128
of the Act has a right to a hearing before an administrative law judge.
Such a hearing is conducted pursuant to section 205(b) of the Act. That
section has been interpreted on numerous occasions to require a de novo
hearing and an independent decision by the administrative law judge. That is not to suggest that the administrative law judge
is free to ignore entirely the determination that is made by the I.G.
The I.G. has expertise in making exclusion determinations and her determinations
deserve to be respected. The I.G.'s exclusion determination should be
sustained as reasonable if that determination falls within a reasonable
range of possible exclusions. However, the administrative law judge must
evaluate independently the evidence relating to the aggravating and mitigating
factors that are set forth in the regulations. If the administrative law
judge concludes, based on his or her independent and de novo evaluation
of the evidence, that the exclusion imposed by the I.G. departs significantly
from that which the I.G. decides is reasonable, then the administrative
law judge may modify the length of the exclusion to assure that the exclusion
falls within a reasonable range of exclusions.
The I.G. proved the presence of three aggravating factors
in this case. These are as follows:
Petitioner now asserts that she is innocent of the crime
to which she pled guilty. In effect she argues that she did not engage
in the conduct which is the basis for her conviction. There is an issue of fact here which is not relevant to
deciding whether the I.G. has the authority to exclude an individual pursuant
to section 1128(a)(1) based on a conviction of that individual for a program-related
offense. As I discuss above, at Finding 2, the I.G.'s authority to exclude
pursuant to section 1128(a)(1) derives from an individual's conviction
of a program-related offense. Thus, where an individual pleads guilty
to such an offense, the truth of the facts alleged in the charge to which
the individual pleads guilty is not relevant to deciding the issue of
the I.G.'s authority to impose an exclusion. By contrast, the existence of aggravating factors is based
on the underlying facts. Some of the aggravating factors that are described
at 42 C.F.R. � 1001.102(b) do not derive from a conviction but are based
on the facts of a case. It is relevant, for purposes of establishing the
presence or absence of aggravating factors, to determine whether alleged
aggravating factors are supported by the evidence. However, it is reasonable to presume that, where a person
pleads guilty to a criminal charge, the facts are as they are alleged
in that charge. Where allegations of aggravating factors are based on
the facts which underlie a criminal charge to which a party has pled guilty,
that party has, at the least, a very heavy burden to offer affirmative
evidence to support that party's assertions of innocence. Here, Petitioner merely denies her guilt without offering
any evidence to rebut the allegations in the criminal charge to which
she pled guilty. I find Petitioner's bare and unsupported denial to be
unpersuasive. Moreover, Petitioner's present denial of guilt is undercut
by the fact that she admittedly pled guilty when it was in her self-interest
to do so.
Petitioner has not offered any evidence which relates
to any of the mitigating factors that are described at 42 C.F.R. � 1001.102(c).
Petitioner's assertion that, in the discussions that resulted in her plea
of guilty, she was led to believe that she would receive only a five year
exclusion - assuming that assertion to be true - does not relate to or
describe any of the recognized mitigating factors.
A 20-year exclusion is tantamount to a permanent exclusion.
In order to justify imposing an exclusion of such length the evidence
in a case must show that the excluded individual is extremely untrustworthy
and is unlikely ever to become trustworthy. I find such evidence to be present here. The I.G.'s exclusion
determination is reasonable. Petitioner engaged in concerted criminal activity over
a period of more than a year. Her crimes cannot be ascribed to ignorance
of the law's requirements or to inadvertence. Three times in a one-year
period Petitioner consciously and willfully generated false documents
in order to defraud the Medicare program. She committed fraud on a massive
scale. She stole approximately $3,000,000 from the Medicare program. Such
willful criminal activity on the grand scale that Petitioner perpetrated
establishes Petitioner to be a manifestly untrustworthy individual. Petitioner's principal argument in opposing the 20-year exclusion consists of her assertion, which I discuss above, at Finding 5, that she would not have pled guilty to the criminal charge that was filed against her but for her understanding that she would receive only a five-year exclusion. As I discuss above, Petitioner's belief that she would be excluded for only five years is not a mitigating factor. Moreover, her assertion does not in any respect derogate from the evidence which shows Petitioner to be manifestly untrustworthy. |
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JUDGE | |
Steven T. Kessel |
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