SUBJECT:

John P. Moore, III, M.D.,

Petitioner,

Centers for Medicare & Medicaid Services.

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, John P. Moore, III, M.D., from participating in Medicare, Medicaid, and other federally funded health care programs for a period of five years. I find that the I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(3) of the Social Security Act (Act) and that the five-year exclusion is the minimum mandatory period of exclusion pursuant to section 1128(c)(3)(B) of the Act.

I. BACKGROUND

By letter dated December 31, 2005, the I.G. notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of five years. The I.G. advised Petitioner that he was being excluded pursuant to section 1128(a)(3) of the Act as a result of Petitioner's felony conviction, in the United States District Court, Southern District of Ohio at Dayton, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or with respect to an act or omission in a health care program (other than Medicare or a state health care program) operated by, or financed in whole or in part, by any federal, state, or local government agency.

By letter dated February 6, 2005, Petitioner timely requested a hearing and the case was assigned to me for a hearing and a decision. In his hearing request, Petitioner asserted that he should not have been excluded pursuant to section 1128(a)(3). Petitioner admitted that he pleaded guilty to making false statements relating to health care matters, specifically making false statements involving upcoding on certain services while employed by a company named MedFirst. Petitioner asserted, however, that these services were provided to private insurance beneficiaries and no claims were submitted to or funds received from a government entity, nor was his conviction for an offense connected with the delivery of a health care item or service in a health care plan that is operated or financed by a government entity. Further, Petitioner asserted that because he has filed a motion to vacate his guilty plea, any attempt to exclude him is premature. And, Petitioner asserted that, because he provides pain management services to patients in an underserved or health professional shortage area, his exclusion will harm patients and prevent Medicare and Medicaid recipients in his area from receiving intractable pain management services.

On April 19, 2006, I convened a prehearing conference by telephone. During the conference, the parties agreed that the case could be heard based on a written record via an exchange of briefs and documentary evidence and that an in-person hearing, at which I would hear witness testimony, was unnecessary. I then set a briefing schedule.

The I.G. submitted the first brief (I.G. Br.), accompanied by documentary evidence (I.G. exhibits (Exs.) 1-4). The I.G. titled his brief a "Motion for Summary Judgment." The I.G.'s title is not accurate. I am not hearing this case based on summary judgment. I am making a decision based on a written record, as agreed to by the parties during the prehearing conference. See Order and Schedule for Filing Briefs and Documentary Evidence dated April 20, 2006; Petitioner's Brief (P. Br.) at 2. ⁽¹⁾ Petitioner submitted his brief, accompanied by five exhibits (P. Exs. 1-5). In the absence of objection, I am admitting I.G. Exs. 1-4 and P. Exs. 1-5. Where the parties have submitted copies of the same document as an exhibit, I refer, below, to the I.G. exhibit. The I.G. also submitted a reply brief (I.G. Reply), and Petitioner submitted a sur-reply brief (P. Reply).

II. APPLICABLE LAW AND REGULATIONS

Section 1128(a)(3) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128(b)(f) of the Act), any individual convicted of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program operated by or financed in whole or in part by any federal, state, or local government agency.

For convictions pursuant to section 1128(a) of the Act, a "conviction" of a criminal offense is defined as:

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been with-held.

Act, section 1128(i).

An exclusion under section 1128(a)(3) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B). Aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. � 1001.102(b). If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. � 1001.102(c).

Pursuant to 42 C.F.R. � 1001.2007, an individual or entity excluded under section 1128(a)(3) of the Act may file a request for a hearing before an administrative law judge. The only issues an administrative law judge is authorized to hear are whether: 1) a basis exists for the imposition of the remedy; and 2) the length of the exclusion is unreasonable.

III. ISSUES

The only issue in this case is whether the I.G. has a basis upon which to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(3) of the Act. As the I.G. has imposed a five-year exclusion, the minimum pursuant to section 1128(c)(3)(B) of the Act, if a basis exists for the I.G. to exclude Petitioner, there is no issue with regard to whether or not the period of the exclusion is unreasonable. See 42 C.F.R. � 1001.2007(a).

IV. FINDINGS AND DISCUSSION

The findings of fact and conclusions of law noted below, in italics and bold face, are followed by a discussion of each.

1. Petitioner was convicted of a criminal offense consisting of a felony relating to fraud in connection with the delivery of a health care item or service.

On September 25, 2000, Petitioner entered into a plea agreement and pleaded guilty to one count of an Information charging him with False Statements Relating to Health Care Matters, in violation of 18 U.S.C. � 1035. The United States District Court, Southern District of Ohio at Dayton, accepted Petitioner's plea and entered a judgment of conviction to the one felony count on October 7, 2002. I.G. Exs. 3, 4. The charge was based on Petitioner's knowingly making and using false writings and documents in connection with the delivery of and payment for health care benefits, items and services in order to increase reimbursement from insurance programs. Specifically, Petitioner pleaded guilty to "upcoding" - causing a bill to be submitted to an insurer for an office visit requiring medical decision making of a higher complexity than was actually provided. I.G. Ex. 2. Based on his conviction, Petitioner was sentenced to three years probation and 100 hours of community service, and required to pay $67,900 in restitution and an assessment of $100. I.G. Ex. 4.

Based on these facts, I find that the I.G. had a legal basis to exclude Petitioner under section 1128(a)(3) of the Act. Section 1128(a)(3) is written in the disjunctive to cover two different categories of felonies relating to "fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct." Each category has its own distinct requirements for an exclusion. The first category covers an individual convicted of one of the listed felonies "in connection with the delivery of a health care item or service" (see 42 C.F.R. � 1001.101(c)(1)), and it covers as a second category any individual convicted of a listed felony with respect to any act or omission in a health care program operated by or financed in whole or in part by any federal, state, or local government agency. 42 C.F.R. � 1001.101(c)(2). Petitioner's offense falls into the first category, and consists of fraud in connection with the delivery of a health care item or service. See Erik D. DeSimone, R.Ph., DAB No. 1932 (2004).

To prove that Petitioner is subject to mandatory exclusion under section 1128(a)(3), the I.G. must prove four things: (1) that Petitioner was convicted of a felony offense; (2) that the offense took place after August 21, 1996 ⁽²⁾; (3) that the offense was related to fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct; and (4) that the offense was in connection with the delivery of a health care item or service. See Katherine Marie Nielson, DAB CR1181 (2004). The I.G. has proved each element here.

Petitioner was convicted of a felony criminal offense as conviction is defined under sections 1128(i)(1) and (3) of the Act, as Petitioner pleaded guilty to one felony count of making false statements relating to health care matters and the Court accepted Petitioner's plea and entered judgment of conviction against him. I.G. Exs. 2, 3, 4. The conviction was for an offense which took place on February 28, 1998, after the enactment of HIPAA. I.G. Ex. 4. The Information upon which Petitioner's felony conviction for making false statements relating to health care matters is based refers to his causing an upcoded bill to be submitted to a medical insurance program. I.G. Exs. 2, 3, 4. Such a conviction relates to fraud. Petitioner's conviction for fraud was also "in connection with the delivery of a health care item or service." For a conviction to be in connection with the delivery of a health care item or service, section 1128(a)(3) of the act requires that there be a "common sense connection" or "nexus" between the offense of which a petitioner has been convicted and the delivery of a health care item or service. See Kenneth M. Behr, DAB No. 1997, at 8-9 (2005); Katherine Marie Nielsen, DAB No. 1181 (2004). Submitting claims for upcoded office visits is directly connected with the delivery of a health care item or service.

Petitioner argues that his conviction is not in connection with the delivery of a health care item or service because it was related to the payment for services and not the delivery of services. Petitioner asserts that his conviction was based on the incorrect submission of billing sheets, not false statements made in the course of actually delivering health care benefits, items or services. P. Br. at 5-6; P. Reply Br. at 2-3. However, in asserting that section 1128(a)(3) concerns only the actual delivery of services, and not payment for them, Petitioner misapprehends the Act and the regulations. Section 1128(a)(3) and the regulations implementing it provide that an offense occurring in connection with the delivery of a health care item or service includes "the performance of management or administrative services relating to the delivery of such items or services." 42 C.F.R. � 1001.101(c)(1). As the Departmental Appeals Board stated in the Behr decision, "[i]n the context of an exclusion provision aimed at financial misconduct, this is particularly appropriate since financial misconduct generally is not part of the actual delivery of the item or service, but is related, for example, to payment for . . . [a] service that was delivered, that was fraudulently claimed to have been delivered, or that was intended to be delivered." (Emphasis added). The Board continued "[t]hus the Secretary has reasonably interpreted section 1128(a)(3) to include offenses . . . which occur in the context of an individual's participation in the chain of delivery of health care items or services even if the individual's offense does not involve his/her personally delivering an item or service as an element of the offense". Kenneth M. Behr, DAB No. 1997, at 8-9.

Petitioner also argues that excluding him is inconsistent with the legislative purpose of section 1128(a)(3) because he has demonstrated that he is trustworthy and not a threat to federal health care programs. Further, Petitioner asserts that he did not understand the potential for exclusion when he signed his plea agreement. P. Br. at 6-7; P. Reply Br. at 3-5. Petitioner's arguments are unavailing.

Congress determined in enacting section 1128(a)(3) that providers who commit private insurance-related health care fraud felonies are untrustworthy to participate in federal health care programs for a minimum period of five years. See Jeremy Robinson, DAB No. 1905 (2004). Thus, I cannot consider Petitioner's arguments regarding trustworthiness. Moreover, Petitioner's assertions, that he did not know that he could be excluded as a consequence of his guilty plea and that his exclusion is premature because he has filed a motion to vacate his conviction, are not relevant. Petitioner cannot collaterally attack the validity of his guilty plea in this forum.

Finally, in his hearing request, Petitioner argued that he provides unique health care services in an underserved area. Petitioner's argument is not appropriate here as I do not have the authority to grant what is, in essence, Petitioner's request for a waiver of his exclusion. Section 1128(c)(3)(B) of the Act provides that the "Secretary may waive the exclusion . . . in the case of an individual . . . that is the sole community physician or sole source of essential specialized services in a community." The regulations covering waiver are found at 42 C.F.R. � 1001.1801. The decision to grant, deny, or rescind a request for a waiver is not subject to administrative or judicial review. Id.

2. The five-year exclusion imposed by the I.G. is the minimum mandatory period of exclusion under the Act.

In a case where an individual has been convicted of a criminal offense which falls under section 1128(a)(3), that individual must be excluded for a minimum period of five years. Act, section 1128(c)(3)(B). I have no discretion to impose a lesser remedy.

V. CONCLUSION

Petitioner's conviction of a criminal offense pursuant to sections 1128(a)(3) and 1128(c)(3)(B) of the Act mandates that he be excluded from Medicare, Medicaid, and all federal health care programs for a period of at least five years.

Anne E. Blair

Administrative Law Judge

1. I note that, in their submissions, neither party requested an in-person hearing.

2. August 21, 1996 is the date the Health Insurance Portability and Accountability Act (HIPAA) was enacted.