Svetlana Chizhov, DAB CR5386 (2019)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, Svetlana Chizhov, from participation in Medicare, Medicaid, and all other federal health care programs based on Petitioner’s conviction of a criminal offense related to the delivery of a health care item or service under Medicare or a state health care program.  For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner because she was convicted of theft of property based on her receipt of remuneration for referring beneficiaries to a California Medicaid program provider.  An exclusion for the minimum period of five years is mandatory pursuant to section 1128(c)(3)(B) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(c)(3)(B)).   

I. Background

In a letter dated December 31, 2018, the IG excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act (42 U.S.C. § 1320a-7b(f)) for a minimum period of 5 years, effective 20 days from the date of the letter.  IG Exhibit (Ex.) 1 at 1.  The IG stated that Petitioner’s exclusion was based on a “conviction as defined in section 1128(i) (42 U.S.C. [§] 1320a-

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7(i)), in the Superior Court of California, County of Los Angeles, of a criminal offense related to the delivery of an item or service under the 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.”  IG Ex. 1 at 1.  The IG explained that she excluded Petitioner pursuant to section 1128(a)(1) of the Act, which mandates the exclusion of any individual who is convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  42 U.S.C. § 1320a-7(a)(1).  The IG informed Petitioner that the exclusion was for “the minimum statutory period of 5 years.”  IG Ex. 1 at 1; see 42 U.S.C. § 1320a-7(c)(3)(B).     

On March 13, 2019, the Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order).  Following an April 10, 2019 pre-hearing conference, I issued another order on April 11, 2019, in which I memorialized certain matters discussed during the pre-hearing conference.1  Pursuant to the Pre-Hearing Order and the April 11 order, the IG filed a brief (IG. Br.) and three exhibits (IG Exs. 1-3).  Petitioner filed an informal brief (P. Br.) and a single submission containing numerous exhibits.2  The IG thereafter filed a reply brief.  I admit IG Exs. 1-3 and P. Ex. 13 into the evidentiary record. 

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Neither party submitted the written direct testimony of any witnesses.  See Pre-Hearing Order §§ 5, 7 and 8; see, e.g., Lena Lasher, DAB No. 2800 at 4 (2017) (discussing that when neither party submits written direct testimony as directed, “no purpose would be served by holding an in-person hearing.”), aff’d, Lasher v. Dep’t of Health & Human Serv., 369 F. Supp. 3d 243 (2019).  Consequently, it is unnecessary to convene a hearing for the purpose of cross-examination of any witnesses.  See Pre-Hearing Order §§ 8, 9, 11.  The record is closed, and the case is ready for a decision on the merits.

II. Issue

Whether the IG has a basis for exclusion and, if so, whether an exclusion for a minimum period of five years is mandated.  42 C.F.R. § 1001.2007(a)(1)-(2).

III. Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.

IV. Findings of Fact, Conclusions of Law, and Analysis4

1. Petitioner was convicted of an offense related to the delivery of a health care item or service under a state health care program, which is an offense, pursuant to section 1128(a)(1) of the Act, that subjects her to a mandatory exclusion from all federal health care programs for a minimum period of five years.

Section 1128(a)(1) requires a mandatory exclusion from all federal health care programs under certain conditions.5  Section 1128(a)(1) states:

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(a) Mandatory exclusion

The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):

(1) Conviction of program-related crimes-

Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program. 

See 42 U.S.C. § 1320a-7(a)(1).  Likewise, and pursuant to 42 C.F.R. § 1001.101(a), the IG “will exclude” an individual who “[h]as 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.”

The IG argues that she properly excluded Petitioner from all federal health care programs based on Petitioner’s conviction of an offense that was related to the delivery of a health care item or service under Medicare or a state health care program.  IG Br. at 2-5; see IG Exs. 2, 3.  I find that Petitioner was convicted of a criminal offense, for purposes of the Act, that mandates exclusion from all federal health care programs.    

On October 27, 2017, the State of California filed a felony complaint charging that, from on or about July 1, 2010, through on or about April 30, 2013, Petitioner committed the offense of receiving unlawful Medi-Cal remuneration in violation of Cal. Welf. & Inst. Code § 14107.2(b)(1).  IG Ex. 3 at 1-2.  Specifically, the complaint alleged that Petitioner received remuneration in exchange for referring patients.  IG Ex. 3 at 3.  The complaint provided the following additional information regarding the charged offense:

All crimes charged in this complaint were part of a scheme by [Petitioner] to defraud the Medi-Cal program by receiving kickbacks for referring Medi-Cal beneficiaries to another . . . Medi-Cal provider, New Choice Recovery.  The California Department of Health Care Services, which administers the Medi-Cal program, first learned of the fraud after conducting

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an on-site inspection of the defendant’s businesses in November 2014.  On April 22, 2015, the information was forwarded to the Bureau of Medi-Cal Fraud & Elder Abuse of the California Department of Justice, the law enforcement agency responsible for investigating and prosecuting Medi‑Cal fraud. 

It was not until the on-site inspection of November 2014 that any government agency became aware of [Petitioner’s] criminal activity.  Once the Department of Health Care Services alerted the Department of Justice, a thorough investigation was conducted and uncovered the criminal enterprise. . . .  The claims submitted by the defendant were regular on their face, and the unlawful remuneration and referral of clients to another Medi-Cal provider was only detected after interviewing patients, former employees, and reviewing patient records.  

IG Ex. 3 at 2.  On August 8, 2018, a misdemeanor count was added to the complaint which charged Petitioner with theft of property.  At that time, Petitioner, who was represented by counsel, entered a plea of guilty “pursuant to a plea agreement” to the misdemeanor offense of theft of property.  IG Ex. 2 at 4-5.  Petitioner’s sentence included an order that she pay $10,000 in restitution to the victim of her crime, which was identified as the California Healthcare Deposit Fund.6  IG Ex. 2 at 5.  Petitioner has acknowledged that her conviction related to her role as a program director for the Echo Park Adult Healthcare Center and her referral of patients to New Choice Recovery Treatment Center.  P. Ex. 1.  Petitioner has further acknowledged that her plea of guilty was “to a lesser charge” than the felony charge listed in the October 2017 complaint.  P. Br. at 2.

Petitioner’s misdemeanor conviction involved her receipt of remuneration for Medi-Cal referrals, and therefore subjects her to exclusion because her conviction is related to the delivery of an item or service under the California Medicaid program.  Lorna Fay Gardner, DAB No. 1733 (2000) (“Section 1128(a)(1), which pertains to criminal offenses related to the delivery of an item or service under such programs, does not draw a distinction by degree of offense.”).  Petitioner entered a guilty plea to the crime of theft of property, and the victim of her crime was Medi-Cal.  IG Ex. 2 at 4 (Order that restitution is payable to the California Healthcare Deposit Fund); see Cal. Penal Code

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§ 1202.4(a)(1) (“It is the intent of the legislature that a victim of crime who incurs an economic loss as a result of the commission of a crime shall receive restitution directly from a defendant convicted of that crime.”).  Petitioner’s guilty plea therefore resulted in a criminal conviction as defined by 42 U.S.C. § 1320a-7(i)(3).   

Petitioner does not dispute the evidence that her criminal conviction involved theft from the Medi-Cal program, and Petitioner concedes that she was the program director for Echo Park Adult Day Health Center when she committed her criminal offense against the California Medi-Cal program.  P. Br. at 1-2; see P. Ex. 1.  As such, Petitioner committed a program-related crime that involved the performance of management or administrative services relating to the delivery of items or services to that program.  42 U.S.C. § 1320a-7(a)(1); 42 C.F.R. § 1001.101(a).  Congress, through enactment of the Act, determined that an individual who has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program must be excluded from federal health care programs for no less than five years, and it afforded neither the IG nor an ALJ the discretion to impose an exclusion of a shorter duration.  42 U.S.C. § 1320a-7(c)(3)(B).  I cannot shorten the length of the exclusion to a period of less than five years because I do not have authority to “[f]ind invalid or refuse to follow Federal statutes or regulations.”  42 C.F.R. § 1005.4(c)(1).  I therefore agree with the IG that an exclusion for a minimum period of five years is mandated. 

Although Petitioner argues that she did not expect that her guilty plea would result in an exclusion and that she felt that disgruntled employees had initiated the criminal investigation, Petitioner does not present any basis to find that she does not have a conviction pursuant to section 1128(a)(1) that subjects her to a mandatory exclusion for a minimum period of five years.  Likewise, even with consideration of Petitioner’s claims that she has twice been widowed and suffered a stroke in recent years, compassionate factors are not a basis to not impose an exclusion or to impose an exclusion for a duration less than the five-year minimum period mandated by law. 

3. The effective date of Petitioner’s exclusion is January 20, 2019.

The effective date of the exclusion, January 20, 2019, is 20 days after the date of the IG’s December 31, 2018 letter and is established by regulation (42 C.F.R. § 1001.2002(b));  I am bound by that regulation.  42 C.F.R. § 1005.4(c)(1).

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V. Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for a five-year minimum period under 42 U.S.C. § 1320a‑7(a)(1).

• 1. I discussed in my order that Petitioner intended to enroll in DAB E-File following the conference.  Although Petitioner later enrolled in DAB E-File, it appears that she continues to have difficulty accessing that system.  Owing to these difficulties, I have accepted documents received by mail for filing and will furnish a courtesy copy of this decision by mail.
• 2. Petitioner’s submission of a single document containing numerous exhibits is noncompliant with section 7 of the Pre-Hearing Order and section 13 of the Civil Remedies Division Procedures, and the IG objects to the admission of these documents.  In light of the fact that Petitioner has proceeded pro se and has reported that she is unavailable to participate in this case for an extended period of time because of overseas travel, I have not ordered Petitioner to re-submit this evidence so that this decision can be issued without inordinate delay.  Further, the IG is not prejudiced by the admission of these documents into the evidentiary record.
• 3. Petitioner acknowledges that she was convicted of a misdemeanor criminal offense and that this offense requires exclusion.  P. Br. at 1, 4.  Petitioner’s evidentiary submissions similarly do not support any other conclusion, and are largely irrelevant.  For example, Petitioner submitted a letter authored by Larry Garcia, who is the CEO of New Life Community Health Center, in which he states that he would like to hire Petitioner as a consultant and requests that I “provide [Petitioner] a wavier (waiver) to work in any Programs Medicare or Medi-Cal immediately.”  Petitioner also included letters confirming that she had performed community service, as required by the sentencing terms of her conviction, and copies of checks she made for restitution payments to the California Healthcare Deposit Fund.  P. Ex. 1; IG Ex. 2 at 4-5.  Petitioner included other irrelevant documents, such as her resume and various records relating to an investigation of her former employer by the State of California’s Labor Commissioner.
• 4. My findings of fact and conclusions of law are set forth in italics and bold font.
• 5. While there are slight differences in the wording of Section 1128 of the Act and its codification at 42 U.S.C. § 1320a-7, the two authorities are substantively identical and I refer to them interchangeably.  I further note that the Secretary of the Department of Health and Human Services has delegated to the IG the authority “to suspend or exclude certain health care practitioners and providers of health care services from participation in these programs.”  48 Fed. Reg. 21,662 (May 13, 1983); see also 42 C.F.R. § 1005.1.
• 6. Certain “expenditures of state, county and federal funds for health care and administration” for the State of California are made from the Health Care Deposit Fund. Cal. Welf. & Inst. Code § 14157.