Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
David Yedidsion, M.D., |
DATE: November 15, 2000 |
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The
Inspector General
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Docket No.C-00-444 Decision No. CR715 |
DECISION | |
I sustain the determination of the Inspector General (I.G.)
to exclude Petitioner, David Yedidsion, M.D., from participating in Medicare,
Medicaid, and all federally funded health care programs for a period of
at least 20 years. I. Background Petitioner is a physician. On June 30, 1999, the I.G.
notified Petitioner that she had determined to exclude Petitioner from
participating in Medicare, Medicaid, and all federally funded health care
programs for a minimum period of 20 years. The I.G. advised Petitioner
that she was basing her determination to exclude Petitioner on her conclusion
that Petitioner had been convicted of a criminal offense related to the
delivery of an item or service under the Medicare program as is described
at section 1128(a)(1) of the Social Security Act (Act). The I.G. advised
Petitioner further that she was basing her determination to exclude Petitioner
for at least 20 years on her conclusion that there existed aggravating
factors in Petitioner's case which justified an exclusion of more than
the minimum five-year period that is required by law in a case where an
exclusion is imposed pursuant to section 1128(a)(1). Petitioner requested a hearing and the case was assigned
to me for a hearing and a decision. Each party advised me that an in-person
hearing was unnecessary and that the case could be heard and decided based
on their written submissions of exhibits and briefs. The parties then
submitted briefs and proposed exhibits. The I.G. submitted 10 proposed
exhibits which I am admitting into evidence as I.G. Ex. 1 - I.G. Ex. 10.
Petitioner submitted seven proposed exhibits which I am admitting into
evidence as P. Ex. 1 - P. Ex. 7. I gave the parties until August 22, 2000
to file reply briefs. The I.G. filed a reply brief and Petitioner did
not. II. Issues, findings of fact and conclusions of
law
The issues in this case are whether:
I make findings of fact and conclusions of law (Findings)
to support my decision in this case. I set forth each Finding below, as
a separately numbered heading.
Section 1128(a)(1) of the Act mandates the exclusion of
any individual who is convicted of a criminal offense related to the delivery
of an item or service under Medicare or a federally funded health care
program. As a matter of law, the crime of defrauding the Medicare program
via the filing of a false claim for a fictitious service is a program-related
crime within the meaning of section 1128(a)(1) of the Act. See
Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990); Alan
J. Chernick, D.D.S., DAB CR434 (1996) at 5. The evidence in this case unequivocally establishes that
Petitioner was convicted of defrauding the Medicare program. Petitioner
was convicted of filing numerous false claims for fictitious Medicare
services. On February 4, 1998, a 20-count indictment was filed against
Petitioner in the United States District Court for the Central District
of California. I.G. Ex. 2. On November 9, 1998, Petitioner entered a plea
of guilty to counts 1 - 10 of the indictment. I.G. Ex. 7. Petitioner pled guilty to knowingly devising, executing,
and carrying out a scheme to defraud and to obtain money from Medicare
by means of materially false and fraudulent pretenses, representations,
and promises. I.G. Ex. 2 at 2 - 3. Petitioner executed his scheme by causing
false and fraudulent bills to be submitted to Transamerica Corporation,
a private contractor that administered the Medicare program in Southern
California on behalf of the United States Department of Health and Human
Services. Id at 3. In pleading guilty, Petitioner admitted to 10 separate
instances in which he used the United States mails to perpetrate fraud
against Medicare. I.G. Ex. 2 at 4 - 7. The practices to which Petitioner
pled guilty as elements of his fraud included submitting reimbursement
claims on behalf of persons who were: dead on the dates of the claimed
services; residents of nursing homes and board and care facilities that
had barred Petitioner from treating their residents on the dates of the
claimed services; living in states or other areas that were remote from
Petitioner on the dates of the claimed services; incarcerated in State
correctional hospitals on the dates of the claimed services; and, already
receiving necessary medical care at hospitals which had no affiliation
with Petitioner on the dates of the claimed services. Id. at 3
- 4.
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. The minimum term
of a mandatory exclusion is five years. Act, section 1128(c)(3)(B). Here, Petitioner was convicted of criminal offenses related
to the delivery of items or services under Medicare. Finding 1. The I.G.
is, therefore, required to exclude Petitioner for a term of at least five
years.
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 regulations 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 it 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.
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 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 administrative law judge 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 aggravating factors that the I.G. proved are as follows:
The acts which resulted in Petitioner's conviction resulted
in losses to the Medicare program which exceeded $1,500. The 10 counts
of the indictment to which Petitioner entered a guilty plea charged Petitioner
with having received reimbursement from Medicare based on fraudulent claims
in amounts which exceeded $100,000. I.G. Ex. 2 at 4 - 5. Petitioner was
sentenced to pay restitution for his false claims in the amount of $311,000.
I.G. Ex. 7 at 1.
The 10 counts of the indictment to which Petitioner pled
guilty involve crimes that cover a period which began on or about July
12, 1993 and which continued through September 23, 1994. I.G. Ex. 2 at
4 - 5. That is a period of criminal activity which is more than a year's
duration.
Petitioner was sentenced to a term of 24-months' imprisonment
as a consequence of his plea of guilty to the first 10 counts of the indictment.
I.G. Ex. 7 at 1.
Petitioner was convicted of other crimes besides those
which involve fraud against Medicare. On May 12, 1998, Petitioner was
indicted in the United States District Court for the Central District
of California on two counts of making false statements within the jurisdiction
of a government agency. I.G. Ex. 3. Specifically, Petitioner was charged
with submitting two false statements in connection with his application
for a disaster loan from the Small Business Administration. Id.
On November 9, 1998, Petitioner entered a plea of guilty to both counts
of this indictment. I.G. Ex. 8. The I.G. also asserts as a basis for establishing an aggravating
factor under 42 C.F.R. � 1001.102(b)(9) that Petitioner settled a civil
lawsuit brought against Petitioner by the United States government pursuant
to the False Claims Act which was based on the fraud that resulted in
Petitioner's conviction. I.G. Ex. 9. The I.G. argues that this lawsuit
and the settlement comprise an "other adverse" action within the meaning
of the regulation. I have considered the question of whether the lawsuit
and its settlement actually constitutes an "adverse" action within the
meaning of the regulation. I conclude that, in the context of this case,
they do. The regulation does not define the term "adverse action." However,
it is apparent from the context of the regulation that the term means
a civil, criminal, or administrative action taken against an individual
or entity which produces an unfavorable result. Using that meaning, the
action taken against Petitioner by the United States, consisting of the
suit and the settlement agreement, plainly was "adverse." Here, Petitioner
admitted his liability in the settlement agreement. His acceptance of
the agreement effectively constituted an admission by him that he would
have been found to be liable had the case been tried. Petitioner settled
the lawsuit "[i]n order to avoid the delay, uncertainty, inconvenience
and expense of protracted litigation . . . " I. G. Ex. 9 at 2. In doing
so, he admitted to "everything admitted in the plea agreement and other
proceedings" in the criminal cases that had been filed against him. Id. The I.G. asserts additionally that Petitioner's license
to practice medicine in California was revoked based on charges that were
filed against him by the Medical Board of California. I.G. Exs. 4 and
10. The I.G. argues that these facts constitute an additional basis for
finding the presence of an aggravating factor under 42 C.F.R. � 1001.102(b)(9)
in that the license revocation action is an "other adverse action" against
Petitioner which arises from the same set of circumstances - Petitioner's
conviction of fraud involving Medicare - which serves as the basis for
the imposition of an exclusion against Petitioner. I am not relying on the evidence pertaining to Petitioner's
license revocation as additional evidence of an aggravating factor. I
do not do so because the I.G. did not give Petitioner adequate notice
of her intent to rely on this evidence. I agree with the I.G. that the
facts pertaining to Petitioner's license revocation could serve as an
additional reason for finding an aggravating factor under 42 C.F.R. �
1001.102(b)(9). However, the I.G. concedes that she did not tell Petitioner
in her notice of exclusion of her intent to rely on these facts as evidence
of the presence of an aggravating factor. Nor did the I.G. seek at any
time subsequent to sending the original notice of exclusion to Petitioner
to amend her notice by alleging the license revocation as an additional
ground for establishing an aggravating factor.
Petitioner alleges the presence of a mitigating factor
in this case. He asserts that the United States District Court judge who
accepted his guilty plea to the charges of fraud involving Medicare determined
that Petitioner had a mental, emotional, or physical condition before
or during the commission of his crimes that reduced his culpability. Petitioner's
opening brief at 14; 42 C.F.R. � 1001.102(c)(2). I am not persuaded by this argument. Petitioner argued
strenuously before the United Sates District Court trial judge that emotional
problems and substance abuse diminished his capacity to make judgments
and reduced his culpability for his crimes. P. Ex. 4. The sentencing judge
recognized that Petitioner suffered from a substance abuse disorder and
emotional problems. It may well be that Petitioner's substance abuse disorder
and emotional problems motivated him to commit crimes. However, the evidence
does not suggest that the judge concluded that Petitioner's culpability
for his crimes was diminished by his substance abuse disorder or emotional
problems. There is nothing in the sentencing order that states or indicates
that the judge found Petitioner's culpability to have been reduced. I.G.
Ex. 7. Petitioner has not introduced a transcript of Petitioner's sentencing
hearing. The sentence that was imposed against Petitioner included,
as conditions for his supervised release after serving a term of incarceration,
that he: participate in outpatient substance abuse treatment and submit
to drug and alcohol testing; and participate in a psychological/psychiatric
counseling or treatment program. I.G. Ex. 7 at 1 - 2. But, these conditions
for release do not evidence any diminution of Petitioner's culpability
as a consequence of his substance abuse disorder or emotional problems.
Rather, all that they suggest is that the substance abuse disorder and
emotional problems were areas of concern to the trial judge that precluded
an unconditional release of Petitioner at the completion of his incarceration.
Although 42 C.F.R. � 1001.102 establishes the sole factors
which may be considered in deciding whether an exclusion is reasonable,
it does not prescribe the weight which is to be given to any 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, 42 C.F.R. � 1001.102 merely
identifies the factors which may be used to lengthen an exclusion beyond
the minimum period. 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 in the absence of any statement in the regulation
as to how much weight must be given to an aggravating or mitigating factor.
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. I have examined closely the evidence which relates to
the aggravating factors that the I.G. established in this case. The evidence
establishes Petitioner to be an extraordinarily untrustworthy individual.
I find that an exclusion of at least 20 years is reasonable in this case
because of the extremely high degree of untrustworthiness displayed by
Petitioner. The evidence in this case proves that, for a lengthy period,
Petitioner committed numerous criminal acts to defraud the Medicare program.
Petitioner made many false claims against the program. It is evident from
both the indictment and Petitioner's guilty plea that Petitioner's crimes
were not isolated or spur of the moment events. The criminal acts that
Petitioner engaged in comprise a pattern of crimes committed over a lengthy
period of time. Petitioner invented fictitious treatments and claims in
order to extract money from Medicare. His criminal acts included filing
claims for services that he never provided. I.G. Ex. 2 at 2. They included
filing claims which inflated the value of the services that he provided.
Id. They included filing claims on behalf of individuals who were
dead at the time that Petitioner alleged to have provided treatments to
these individuals. Id. They included filing claims on behalf of
individuals who were in facilities that barred Petitioner from providing
care. Id. Petitioner's pattern of crimes extended to other areas
beyond the Medicare program. Medicare was not the only government program
defrauded by Petitioner. Additional evidence of Petitioner's lack of trustworthiness
is evident from the fraud that Petitioner committed against the Small
Business Administration. The financial impact that Petitioner's crimes had on Medicare
was substantial. The counts to which Petitioner pled guilty describe crimes
which netted Petitioner more than $100,000. However, the evidence in this
case - while it does not precisely establish the impact of Petitioner's
crimes - shows that Petitioner stole a great deal more than $100,000 from
the Medicare program. Petitioner was sentenced to pay restitution in the
amount of $311,000. I.G. Ex. 7 at 1. He settled the False Claims Act lawsuit
against him by agreeing to pay a total of $1,500,000. I recognize that
the amount that Petitioner paid as settlement of the lawsuit may not reflect
the actual damages that Petitioner's fraud caused the Medicare program.
But, it certainly reflects an acknowledgment by Petitioner that the damages
that Petitioner perpetrated through his fraud were large and that they
exceeded $100,000. Petitioner argues that an exclusion of 20 years is tantamount
to a permanent exclusion given the length of the exclusion and Petitioner's
age. He asserts that an essentially permanent exclusion is unreasonable
because it is punitive. I agree that the effect of the exclusion in this
case may be to preclude Petitioner permanently from participating in federally
funded health care programs. However, I do not find the exclusion to be
punitive and unreasonable given the level of untrustworthiness demonstrated
by Petitioner. What concerns me particularly about this case is the pattern
of crimes engaged in by Petitioner. Petitioner's crimes consisted of multiple
criminal acts which he perpetrated many times over a lengthy period of
time. I infer from the intensity and duration of Petitioner's criminal
misconduct that Petitioner simply is an individual who cannot be trusted
to deal with program funds. Petitioner argues also that he has accepted responsibility
for his wrongdoing. He asserts that he has expressed shame and remorse
for his conduct. He argues that his assumption of responsibility is consistent
with the conduct of one who can be trusted in the future even though he
committed wrongdoing in the past. I do not accept this argument for two reasons. First, remorse for misconduct and acceptance of responsibility are not among the mitigating factors that I may consider in deciding whether an exclusion is reasonable. See 42 C.F.R. � 1001.102(c). Petitioner's assertions are therefore irrelevant. Second, Petitioner's remorse may be heartfelt, but it does not satisfy me that he no longer manifests the propensity to engage in criminal conduct. The unrebutted evidence in this case shows that Petitioner manifests a mental condition which might motivate him to commit crimes. P. Ex. 4. There is no evidence that Petitioner has been cured of that condition and, therefore, there is nothing to suggest that he does not continue to manifest the propensity to commit crimes, notwithstanding his remorse. |
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JUDGE | |
Steven T. Kessel Administrative Law Judge
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