Michele Martinho, M.D., DAB CR5264 (2019)

DECISION

Petitioner, Michele Martinho, M.D., received bribes for referring Medicare beneficiaries (among other patients) to a particular laboratory for blood tests.  She was convicted of using the mail or other facility in interstate commerce to carry on an unlawful activity in violation of 18 U.S.C. § 1952(a)(3).  Now, pursuant to sections 1128(a)(1) and 1128(a)(3) of the Social Security Act (Act),1 the Inspector General (IG) has excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs for a period of five years.  Petitioner appeals the exclusion.  For the reasons discussed below, I find that the IG properly excluded Petitioner.  Because the five-year exclusion is the minimum period required by statute, it is reasonable as a matter of law.

I. Background

On or about May 14, 2014, Petitioner and the United States Attorney for the District of New Jersey entered into a plea agreement.  IG Exhibit (Ex.) 3.  As part of that agreement,

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Petitioner agreed to plead guilty to an information charging her with the acceptance of bribes, contrary to N.J.S.A. Section 2C:21-10, in violation of 18 U.S.C. § 1952(a)(3).  Id. at 1.  The information to which Petitioner pleaded guilty described her criminal conduct as follows:

From in or about September 2010 through in or about April 2013, [Biodiagnostic Laboratory Services, LLC, a New Jersey clinical laboratory (BLS)] through [an agent], paid defendant MICHELE MARTINHO bribes that, in the aggregate, were approximately $155,000.  In return, defendant MICHELE MARTINHO referred patient blood specimens to BLS that BLS used to submit claims to Medicare and [other insurers] and collect from those payers at least in or about $350,000.  The claims BLS submitted for blood testing and other services to Medicare and the [other insurers] included charges for tests on blood specimens referred to BLS by defendant MICHELE MARTINHO in return for bribe payments.

IG Ex. 2 at 3-4.  On June 14, 2017, the United States District Court for the District of New Jersey (federal district court) accepted Petitioner’s guilty plea and adjudicated her guilty of violating 18 U.S.C. § 1952(a)(3).  IG Ex. 4 at 1.  The federal district court sentenced Petitioner to two years’ probation and to forfeit $155,000, in accordance with her plea agreement.  Id. at 2, 6; see also IG Ex. 3 at 4.

By letter dated July 31, 2018, the IG notified Petitioner that she was being excluded from Medicare, Medicaid, and all federal health care programs for a period of five years.  IG Ex. 1.  The notice letter stated that Petitioner was excluded pursuant to section 1128(a)(1) of the Act because she had been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of items or services under any such program.  Id.  The notice letter further explained that Petitioner was excluded pursuant to section 1128(a)(3) of the Act because of her felony conviction of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any federal, state or local government agency.  Id.  Petitioner timely requested review and the case was assigned to me for a hearing and decision.

I convened a telephone prehearing conference and issued an Order and Schedule for Filing Briefs and Documentary Evidence (Briefing Order).  Pursuant to my Briefing Order, the IG submitted a written argument (IG Br.), a reply brief (IG Reply) and four proposed exhibits (IG Exs. 1-4).  Petitioner filed her informal brief (P. Br.) along with

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fifteen proposed exhibits (P. Exs. 1-15).  Neither Petitioner nor the IG objected to the exhibits offered by the opposing party.  Therefore, in the absence of objection, I admit into evidence IG Exs. 1-4 and P. Exs. 1-15.

I directed the parties to indicate in their briefs whether an in-person hearing would be necessary and, if so, to submit the testimony of any proposed witness as “written direct testimony in the form of an affidavit or declaration.”  Briefing Order ¶ 7.c.ii.  Neither party offered the written direct testimony of any witness.  Further, the parties agree that an in-person hearing is not necessary.  IG Br. at 7; P. Br. at 7.  I therefore decide this case based on the written record.

II. Discussion

A. Petitioner must be excluded pursuant to section 1128(a)(1) of the Act because she was convicted of a criminal offense related to the delivery of an item or service under the Medicare program.2

The Act requires the Secretary of Health and Human Services (Secretary) to exclude from program participation any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  Act § 1128(a)(1).  The Secretary has delegated this authority to the IG.  42 C.F.R. § 1001.101(a).

1. Petitioner was convicted of a criminal offense.

Petitioner concedes that she was convicted of a criminal offense.  P. Br. at 1.  The IG’s evidence demonstrates that, on June 14, 2017, the federal district court entered judgment, finding Petitioner guilty of violating 18 U.S.C. § 1952(a)(3), pursuant to her guilty plea.  IG Ex. 4; see also IG Ex. 3.  Accordingly, Petitioner was convicted of a criminal offense as that term is defined in subsections 1128(i)(1), (2), and (3) of the Act.

2. The criminal offense of which Petitioner was convicted is related to the delivery of an item or service under Medicare.

The IG argues that Petitioner’s conviction for using an instrumentality of interstate commerce to receive bribes for referring laboratory tests for which Medicare would be billed is related to the delivery of items or services under Medicare within the meaning of section 1128(a)(1) of the Act.  IG Br. at 4‑5.  Petitioner argues that her conviction is not program related.  P. Br. at 3-6.  Petitioner argues that she was not charged with, nor convicted of, health care fraud or violating the federal anti-kickback statute.  Petitioner additionally argues that her criminal conduct was not program-related because the blood

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tests she referred to BLS were medically necessary and would have been paid for by Medicare even if Petitioner had not been bribed by BLS to refer the tests.  See id.  Petitioner’s arguments are unavailing.

First of all, section 1128(a)(1) does not require that an individual be convicted of health care fraud or of an offense that specifically references Medicare or Medicaid.  Rather, all that is required is that the criminal conduct be “related to the delivery of an item or service” under a protected program.  The term “related to” simply means that there must be a nexus or common sense connection between the underlying offense and the program.  See Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); see also Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” in another part of section 1128(a) as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotation marks omitted).  The conduct charged in the information to which Petitioner pleaded guilty establishes:  1) that Petitioner received payments from BLS for referring Medicare beneficiaries, among other patients, to BLS for blood tests; 2) that BLS submitted claims to Medicare for reimbursement of the blood tests furnished to the beneficiaries Petitioner referred; and 3) that Medicare paid BLS based on those claims.  See IG Ex. 2 at 3-4.  These facts are more than sufficient to establish a common-sense connection or nexus between Petitioner’s criminal conduct and the delivery of items or services under Medicare, which is all that is required to support an exclusion pursuant to section 1128(a)(1).

Second, the medical necessity (or not) of an item or service has no bearing on whether a particular criminal act is program‑related within the meaning of section 1128(a)(1).  As an appellate panel of the Departmental Appeals Board (DAB) has noted, the argument that the item or service “was medically necessary for the patients for whom it was prescribed is completely irrelevant . . . to the exclusions.”  Niranjana B. Parikh, M.D., et al., DAB No. 1334 at 6 n.9 (1992).  In Parikh, the panel explained that referrals based on improper remuneration, such as bribes and kickbacks, harm federal health care programs and, thus, have an impact on the delivery of health care items or services:

By choosing a supplier to which to refer patients for [items or services] based on the availability of kickbacks from that supplier, Petitioners have undercut the public's perception of the honesty and integrity of other program providers.  Further, choice based primarily on the receipt of remuneration potentially raises the cost . . . to the program.

Id. at 6 (internal footnotes and citations omitted).  Therefore, for the reasons explained in Parikh, the fact that the blood tests Petitioner referred to BLS may have been medically necessary does not compel a conclusion that her conviction is unrelated to the delivery of items or services under Medicare.

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Accordingly, because her conviction was related to the delivery of items or services under the Medicare program, the IG was required to exclude Petitioner from participation in the Medicare program for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

B. Petitioner must be excluded pursuant to section 1128(a)(3) of the Act because she was convicted of a felony offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.

Because I have already concluded that Petitioner is required to be excluded for a minimum of five years pursuant to section 1128(a)(1) of the Act, it is not necessary for me to decide whether section 1128(a)(3) of the Act also requires her exclusion.  Nevertheless, both parties have offered arguments on this point.  Therefore, I explain why I conclude that the IG has established an alternative basis for Petitioner’s five-year exclusion pursuant to section 1128(a)(3) of the Act.

1. Petitioner was convicted of a felony offense after August 21, 1996.

For the same reasons discussed in section A.1 of this decision, above, Petitioner was convicted, within the meaning of subsections 1128(i)(1), (2), and (3) of the Act, of violating 18 U.S.C. § 1952(a)(3).  Violation of 18 U.S.C. § 1952(a)(3) is a felony offense.  18 U.S.C. § 3559(a)(3).  Petitioner’s conviction occurred on June 14, 2017.  IG Ex. 4 at 1.

2. The felony offense of which Petitioner was convicted is related to financial misconduct in connection with the delivery of a health care item or service.

Petitioner does not dispute that her conviction is related to financial misconduct.  Rather, Petitioner argues that her conviction for violating 18 U.S.C. § 1952(a)(3) is “sufficiently attenuated from the delivery of a health care item or service” such that section 1128(a)(3) does not apply.  P. Br. at 6.  Petitioner essentially incorporates by reference her arguments as to why an exclusion pursuant to section 1128(a)(1) is not justified.  Id.  The arguments are equally unavailing in the context of section 1128(a)(3).  Appellate panels of the DAB have held that the phrase “in connection with the delivery of a health care item or service” in section 1128(a)(3) is broad and requires the same common sense nexus which is required for an offense to be “related to the delivery of an item or service” under section 1128(a)(1) of the Act.  Kenneth M. Behr, DAB No. 1997 at 7 n.5 (2005).  Such a connection is present when the offense occurs “in the context of an individual’s participation in the chain of delivery of health care items or services.”  Id. at 9.  Petitioner’s conduct (i.e. referring patients to BLS for blood testing) clearly occurred as

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part of her “participation in the chain of delivery of health care items or services” as described in the Behr case.  Thus, her offense was related to the delivery of items or services within the meaning of section 1128(a)(3) of the Act.  Accordingly, the IG was required to exclude Petitioner from participation in the Medicare program for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

C.  Petitioner’s equitable arguments cannot be a basis to shorten the length of her exclusion, which is already set at the minimum period required by statute.

The Act requires that Petitioner’s period of exclusion “shall not be less than five years. . . .”  Act § 1128(c)(3)(B); see also 42 C.F.R. § 1001.102.  Thus, I am required to uphold the length of Petitioner’s exclusion.  Once I have concluded that Petitioner is subject to exclusion, I may not reduce Petitioner’s exclusion to zero, nor may I direct the IG to reinstate Petitioner to program participation.  See 42 C.F.R. § 1005.4(c)(6); see also 42 C.F.R. § 1001.3002(f).

Petitioner has offered evidence and argument that she is remorseful for her criminal conduct, that she has accepted responsibility, and that she has undertaken to educate other physicians so that they will not engage in the sort of conduct that led to Petitioner’s conviction.  P. Br. at 10-15 (and exhibits there cited).  For purposes of this decision, I accept that Petitioner is sincerely remorseful and that she is unlikely to reoffend.  However, these contentions are essentially equitable in nature.  Equitable considerations are not a basis to overturn or reduce Petitioner’s exclusion.  I may not review the IG’s decision to impose an exclusion “on the ground that the excluded person is a good person or well-thought of in the profession or suffering from the loss of his/her vocation.”  Donna Rogers, DAB No. 2381 at 6 (2011); see also Stefan Murza, D.C., DAB No. 2848 at 4 (2018).  To the extent Petitioner may be arguing that there are mitigating factors that weigh against her exclusion, I may not consider mitigating factors in this case because the IG has imposed the minimum period of exclusion required by law.  42 C.F.R. §§ 1001.2007(a)(2), 1001.102(a), (c).

D. Petitioner’s exclusion is effective August 20, 2018, 20 days from the date of the IG’s notice of exclusion.

Petitioner argues that the effective date of her exclusion should be made retroactive to June 14, 2017, the date of her conviction.  P. Br. at 8-10.  Petitioner argues that, because her Medicare billing privileges were revoked in 2014, and various private pharmacy benefit administrators have suspended her prescribing privileges, she was effectively excluded as of the date of her conviction.  Id.

Appellate panels of the DAB have long rejected arguments such as Petitioner’s.  Where, as here, the IG imposes an exclusion for the mandatory minimum period of five years pursuant

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to section 1128(a) of the Act, my review is strictly limited to the issue of whether there is a basis for exclusion.  42 C.F.R. § 1001.2007(a)(1)‑(2).  For that reason, in interpreting section 1001.2002(b), DAB appellate panels have held that neither they nor administrative law judges of the Civil Remedies Division have authority to change the effective date of an exclusion imposed by the IG.  See, e.g., Shaikh M. Hasan, M.D., DAB No. 2648 at 7-13 (2015) (and cases cited therein).

Accordingly, as required by regulation, “[t]he exclusion will be effective 20 days from the date of the notice.”  42 C.F.R. § 1001.2002(b).

III. Conclusion

For the reasons explained above, I conclude that the IG properly excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs and I sustain the five-year exclusion, effective August 20, 2018.

• 1. The current version of the Social Security Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.
• 2. My findings of fact and conclusions of law appear as headings in bold italic type.