Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Ruth Ferguson, |
DATE: December 27, 2000 |
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The
Inspector General
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Docket No.C-00-215 Decision No. CR725 |
DECISION | |
I sustain the determination of the Inspector
General (I.G.) to exclude Petitioner, Ruth Ferguson, from participating
in Medicare, Medicaid, and all federally funded health care programs for
a period of 15 years. I. Background On December 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 period of
15 years. The I.G. advised Petitioner that she was basing her determination
to exclude Petitioner on the fact that Petitioner had been convicted in
the U.S. District Court (District Court), Eastern District of Arkansas,
Western Division, 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 15 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 initially
assigned to administrative law judge Marc R. Hillson for a hearing and
a decision. On March 3, 2000, Judge Hillson conducted a conference call
with the parties and the parties agreed that this case could be decided
on written submissions of exhibits and briefs and that an in-person hearing
was not necessary. On March 9, 2000, Judge Hillson issued and Order and
Schedule (Order) setting out a briefing schedule for the case. The I.G.
timely submitted her brief in support of summary judgment and proposed
exhibits. The I.G. submitted five proposed exhibits. Petitioner did not
object to the I.G.'s exhibits, so I am admitting into evidence I.G. Exs.
1 - 5. Petitioner did not submit a filing based on Judge Hillson's March
9, 2000 Order. On May 3, 2000, this case was reassigned to me. Thus,
on September 18, 2000, I issued an Order to Show Cause as to why Petitioner's
case should not be dismissed for abandonment due to her failure to submit
documents directed in the March 9th Order. Petitioner responded to my
Order to Show Cause on September 26, 2000 by submitting a brief filed
in the Eighth Circuit Court of Appeals, which I have identified as P.
Ex. 1. Petitioner also submitted the decision from the Eight Circuit Court
of Appeals, which I have identified as P. Ex. 2. The I.G. did not object
to Petitioner's exhibits, so I am admitting into evidence P. Exs. 1 and
2. II. Issues, findings of fact and conclusions of law
The issues in this case are:
I make findings of fact and conclusions of law (Findings)
to support my decision in this case.
III. Discussion 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, Petitioner and her co-defendants' crime of
defrauding the Medicare program via the claiming of a portage or transportation
fee on each of the beneficiary's reimbursement claim forms, when American
should have claimed only one prorated portage fee per facility visited
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, at 5 (1996). The evidence in this case unequivocally establishes that
Petitioner was convicted of defrauding the Medicare program. Findings
6 - 11. 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. An administrative law judge is not 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, an administrative
law judge must evaluate independently the evidence relating to the aggravating
and mitigating factors that are set forth in the regulations. If an administrative
law judge concludes, based on an 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
an administrative law judge may modify the length of the exclusion to
assure that the exclusion falls within a reasonable range of exclusions. An exclusion that is imposed pursuant to section 1128(a)(1)
of the Act must be for a minimum period of at least five years. Act, section
1128(c)(3)(B). In this case, the I.G. determined to exclude Petitioner
for a period of 15 years based on her finding that there exist three aggravating
factors as described in 42 C.F.R. � 1001.102(b). In determining whether the length of an exclusion is reasonable,
it is the responsibility of the administrative law judge to consider and
evaluate all of the relevant evidence brought to bear in this case. The
regulation at 42 C.F.R. � 1001.102(b) sets forth the aggravating factors
that may be considered in determining the length of an exclusion. I find
that the I.G. proved the presence of three aggravating factors: (1) the
acts resulting in Petitioner's conviction or similar acts, caused financial
loss of $1500 or more to a governmental program or to one or more entities.
42 C.F.R. � 1001.102(b)(1); (2) the acts that resulted in Petitioner's
conviction, or similar acts, were committed by Petitioner over a period
of one year of more. 42 C.F.R. � 1001.102(b)(2); and (3) the sentence
imposed against Petitioner for her guilty plea included a term of incarceration.
42 C.F.R. � 1001.102(b)(5). First, the acts which resulted in Petitioner's conviction
resulted in losses to the Medicare program which exceeded $1500. Petitioner,
along with co-defendant Michael Falkner, was held jointly and severally
liable for $71,006 of the total financial loss to the Medicare program.
I.G. Ex. 3 at 2. The District Court held.
I.G. Ex. 3 at 2. The total financial impact that Petitioner's crimes had
on Medicare was substantial. The I.G. gave Petitioner notice that she
planned on using the entire amount of financial loss attributable to the
acts that resulted in Petitioner's conviction. I.G. Ex. 1; I.G. Brief
in Support of Summary Disposition (I.G. Br.), at 7, fn.1. Specifically,
in determining the length of Petition's exclusion, the I.G. contends that
the amount of $596,643 was the amount of financial loss to the Medicare
program and this "evidence was given due consideration in calculating
an appropriate period of exclusion." I.G. Br. at 9. Moreover, the I.G.
cites 42 C.F.R. � 1001.102(b)(1) for authority to consider the entire
amount of loss. This section specifically states that "the entire amount
of financial loss to such programs . . . will be considered regardless
of whether full or partial restitution has been made." I.G. Br. at 8.
Although, the I.G. does admit that this particular regulation does not
contemplate joint and several liability orders of restitution, the I.G.
is not precluded from considering the total financial loss as an aggravating
factor. The I.G. is authorized to consider the entire amount of financial
loss to lengthen the period of exclusion where the financial loss is more
than $1500. Here, the amount of financial loss to the Medicare program
was $596,643. I.G. Ex. 1. This evidence was given due consideration by
the I.G. in calculating an appropriate period of exclusion. I find that a fair estimate of the amount of damages caused
by Petitioner may be found in the restitution that Petitioner was sentenced
to pay. Tarvinder Singh, D.D.S., DAB CR697 (2000); Gilbert Ross,
DAB CR478 (1997); see also Steven Alonso Henry, M.D.,
DAB CR638 (2000). As established by the fact that Petitioner was found
to be jointly and severally liable for restitution in the amount of $71,006
with co-defendant Michael Falkner, Petitioner's criminal acts resulted
in substantial loss to the Medicare program. I.G. Ex. 2. I note that the
losses in Petitioner's case were multiple times the regulatory minimum.
Moreover, I find that the financial impact that Petitioner's crimes had
on Medicare was substantial. Petitioner stipulated that the entire loss
to the Medicare program caused by the fraudulent acts of Petitioner and
the other co-conspirators amounted to at least $596,643. Finding 11. I
recognize that the amount that Petitioner paid of $71,006 as jointly and
severally liable may not reflect the actual total damages that Petitioner's
fraud caused the Medicare program. But, her portion certainly reflects
an acknowledgment by Petitioner that the damages that Petitioner perpetrated
through her fraud were large and that they exceeded $7l,006 and that the
total loss to Medicare amounted to $596,643. The I.G. contends that the
amount of $596,643 was the amount of financial loss to the Medicare program
and this "evidence was given due consideration in calculating an appropriate
period of exclusion." I.G. Br. at 9. Second, the fraudulent schemes committed by Petitioner
that resulted in the conviction, or similar acts, were committed over
a period of one year or more. The Indictment charged Petitioner with criminal
acts that occurred from July 8, 1992 through May 13, 1998. I.G. Ex. 5
at 4. Petitioner was found guilty of devising and executing a scheme to
defraud the Medicare program from approximately July 8, 1992 through May
13, 1998. I.G. Ex. 5. Petitioner's fraudulent activities occurred over
a period in excess of five years. Third, the sentence imposed by the District Court included incarceration. The District Court sentenced Petitioner to 37 months of imprisonment. I.G. Ex. 2 at 2. Moreover, on release from prison, Petitioner was subject to supervised release for a term of three years. I find that Petitioner's period of incarceration was substantial. Pursuant to 42 C.F.R. � 1001.102, none of the mitigating factors provided for in these regulations are present in this case.Although 42 C.F.R. � 1001.102 establishes the sole factors
which I may consider 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
whether an exclusion is reasonable 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 15 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 conviction 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. Her criminal acts included filing
claims for services that she never provided. I.G. Ex. 2 at 2. Moreover, in the final analysis, the precise amount of
money that Petitioner helped to steal from Medicare is not so important
as is the fact that she helped to steal a large sum of money over more
than a five-year period. Petitioner is a highly untrustworthy individual
whether she stole $71,006 or $596,643. Petitioner argues that an exclusion of 15 years is too
long. 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 she 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 federal program funds. Conclusion I find that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act. I find that a 15-year exclusion is not unreasonable. |
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JUDGE | |
Marion T. Silva Chief Administrative Law Judge |
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