Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
Niranjana B. Parikh, M.D., Mohammed Akhtar, M.D.,
George Tsakonas, M.D.,
Chandra B. Singh, M.D.,
Petitioners
- v. -
The Inspector General.
DATE: May 28, 1992
Docket Nos. C-414 C-429 C-430 C-449
Decision No. 1334
FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE
DECISION
Petitioners requested review of a January 7, 1992, decision
by
Administrative Law Judge (ALJ) Joseph K. Riotto. See Niranjana
B.
Parikh, M.D., Mohammed Akhtar, M.D., George Tsakonas, M.D., and
Chandra
B. Singh, M.D., DAB CR171 (1992) (ALJ Decision). The ALJ
Decision
granted the Inspector General's (I.G.) motion for summary
disposition of
Petitioners' appeal and affirmed the I.G.'s determination to
exclude
each of the Petitioners from participation in Medicare and
Medicaid
programs for five years. 1/
Petitioners' exclusions were based on section 1128(a) of the
Social
Security Act (Act) (42 U.S.C. .1320a-7). Section 1128(a)(1)
mandates
exclusion from Medicare and Medicaid for any individual or
entity
"convicted of a criminal offense related to the delivery of an item
or
service under title XVIII or under any State health care program."
2/
Any such exclusion must be imposed for at least five years.
Section
1128(c)(3)(B) of the Act.
Based on the following analysis, we affirm the five-year
exclusions
imposed on the Petitioners and adopt each of the ALJ's findings
and
conclusions of law (FFCLs), with one minor technical
modification
indicated below. We also find that Petitioners are not
entitled to a
pre-exclusion hearing under section 1128(f)(2), and that
summary
disposition was appropriate.
BACKGROUND
The parties did not dispute any material facts 3/ and no oral hearing
was
held; the case was decided on the basis of documentary submissions.
The
following FFCLs were not disputed by any party to this appeal, and
we
therefore adopt them for purposes of this decision:
1. At all times relevant here, Petitioners Niranjana B.
Parikh,
Mohammed Akhtar, George Tsakonas, and Chandra B. Singh were
licensed
doctors of medicine in the State of New York, and were Medicare
and
Medicaid providers. Joint stipulation.
2. In 1990, each of these four physicians pled guilty to violating
42
U.S.C. 1320a-7(b)(1)(B) -- codified as section 1128B(b)(1)(B) of the
Act
-- by knowingly and wilfully receiving kickbacks related to the
purchase
of medical supplies that were paid for by Medicaid. Joint
stipulation.
3. The Secretary of Health and Human Services has delegated
the
authority to determine and impose exclusions from the Medicare
and
Medicaid programs, pursuant to section 1128 of the Act, to the
I.G.
Joint stipulation. .4. On July 2 and August 9, 1991, the
I.G. formally
notified Petitioners that they were being excluded from the
Medicare and
Medicaid programs under section 1128(a)(1) of the Act, as a
consequence
of their criminal convictions. Joint stipulation.
ALJ Decision at 3.
Petitioners challenged the following FFCLs:
5. A criminal conviction for accepting kickbacks for authorizing
the
purchase of medical equipment is sufficiently related to the delivery
of
an item or service under Medicare or Medicaid to justify application
of
the mandatory exclusion provisions of section 1128(a)(1).
6. The I.G. is under no obligation to proceed under the
discretionary
or permissive exclusion provisions of section 1128(b)(7)
against a
person who may be suspected of violating the anti-kickback
law. Once
such person has been convicted, though, exclusion is
mandatory.
ANALYSIS
Petitioners argued that the I.G. should have proceeded against them
under
one of the discretionary exclusion provisions of section 1128(b)
of the Act
rather than the mandatory provisions of section 1128(a).
This would have,
they asserted, permitted them the opportunity to show
that a shorter
exclusion period or no exclusion should be imposed.
Petitioners also argued
that they should have been afforded a
pre-exclusion hearing pursuant to
section 1128(f)(2) of the Act, and
that the ALJ erred by denying them a
post-exclusion hearing under 42
C.F.R. . 1001.128(a)(2).
The I.G. responded that Petitioners were properly excluded under
the
mandatory provisions. 4/
1. Petitioners were convicted of criminal offenses within the meaning
of
section 1128(a), and the Secretary was not required to apply
the
discretionary provisions of section 1128(b).
Petitioners conceded that they have each pled guilty and been
convicted
for violations of section 1128B(b)(1)(B) of the Act. They
argued,
however, that the offenses for which they were convicted were
not
related to the delivery of an item or service under the Medicare
or
Medicaid programs as required by section 1128(a)(1).
Petitioners
asserted that they merely prescribed specialized breathing
equipment for
their patients and referred them to the supplier. The
supplier, a
confidential informant, provided the equipment, paid the
kickbacks to
Petitioners, and then billed the Medicaid program. Thus,
Petitioners
concluded that they played no role in the delivery of the items
or
services. They asserted, therefore, that because their convictions
did
not qualify under the mandatory five-year sanctions, the
Secretary
should have proceeded under one of the permissive
exclusionary
provisions of section 1128(b), such as section 1128(b)(7).
5/
We conclude that Petitioners' argument is without merit and affirm
the
ALJ's conclusion that Petitioners' convictions were related to
the
delivery of items or services under the Medicare or Medicaid
programs.
Petitioners' contention that the underlying convictions are not related
to
participation in the Medicare and Medicaid programs is contrary to
the plain
meaning of the applicable statutes. Section 1128B(b)(1)(B),
to which
they pled guilty, makes it a felony to accept or solicit
kickbacks involving
the Medicaid or Medicare programs. The section
reads, in part:
(b)(1) Whoever knowingly and willfully solicits or receives
any
renumeration (including any kickback,. bribe, or
rebate)
directly or indirectly, overtly or covertly, in cash or in
kind
--
(B) in return for purchasing, leasing, ordering,
or
arranging for or recommending purchasing, leasing,
or
ordering any good, facility, service, or item for
which
payment may be made in whole or in part under
title
XVIII or a State health care program,
shall be guilty of a felony . . . .
Section 1128(a)(1), under which Petitioners were excluded,
requires
mandatory exclusion of:
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 any State health care program. (Emphasis
added.)
The ALJ's conclusion that Petitioners' offenses under
section
1128B(b)(1)(B) were related to the delivery of an item or service
under
Medicare or Medicaid was not erroneous. This Board has
consistently
recognized common sense connections between an offense and the
delivery
of an item or service, even if the individual at issue did
not
physically deliver the item or service. 6/ In DAB 1078, we noted
that
offenses other than the actual delivery "are also `related' because
they
concern acts that directly and necessarily follow under the health
care
programs from the delivery of the item or service." Id. at
7. For
example, in DAB 1135, a doctor pled guilty to diversion of a
Medicare
check provided for payment to another physician for delivery of
items or
services under the program. There, we examined the question of
whether
the petitioner had to deliver the item or service and concluded that
the
plain meaning of the statute included circumstances such as those
here
where a covered program was a victim of the crime. Id. at 8.
7/
To argue that there was no fraud on the programs because
Petitioners
"merely" prescribed the necessary equipment and took kickbacks
from the
supplier who actually provided it and billed the program is
specious.
Petitioners signed authorizations to be submitted along with the
claims
for payment to the state Medicaid programs. Their receipt of
the
kickbacks was directly related to the program that paid for
the
equipment which was the subject of the kickbacks. Thus, the ALJ
was
correct in concluding there was a clear link between the convictions
and
the delivery of an item or service under a covered program. 8/
Further, contrary to Petitioners' allegations, the programs
were
victimized and harmed by Petitioners' actions. By choosing a
supplier
to which to refer patients for medical equipment 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. See DAB ll35 at 16. 9/ Further, choice
based primarily on
the receipt of remuneration potentially raises the cost of
the equipment
to the program. 10/
Petitioners also argued on appeal that the ALJ incorrectly failed to
find
that a permissive exclusion under section 1128(b) would have been
appropriate
in lieu of the I.G.'s mandatory exclusion. We have also
considered this
issue in several cases and have concluded that it is
possible that the
actions of an individual or entity might place that
individual or entity
within both the mandatory and permissive
categories. However, the
permissive provisions focus on circumstances
where the individual or entity
has either not been convicted or the
conviction does not relate, within the
meaning of section 1128(a), to
the Medicare or Medicaid programs. Once
the determination is made that
a conviction falls within the meaning of
section 1128(a), the I.G. must
impose the mandatory exclusion. 11/
Thus, once the I.G. determined that Petitioners' convictions were
within
the meaning of section 1128(a), he had no obligation to consider
whether
section 1128(b) was applicable. Similarly, the ALJ did not err
in
affirming the I.G.'s determination that the offenses at issue
--
kickbacks -- were subject to the mandatory exclusion because the
section
1128B(b)(1)(B) convictions met the requirements of section
1128(a). ALJ
Decision at 4. (We do, however, make a minor
technical amendment to the
wording of FFCL No. 6 to clarify that the
conviction must be for an
offense which falls within the meaning of section
1128(a), as the ALJ
indicated in his discussion.)
Lastly, we disagree with Petitioners' argument that Hussaini v.
Inspector
General, Docket No. C-317, is relevant to this proceeding.
There, the I.G.
imposed a five-year permissive exclusion under
1128(b)(1) after an intern
pharmacist was convicted for conspiracy to
commit Medicaid fraud in violation
of 18 U.S.C. . 371. 12/ Petitioners
asserted that, based on the I.G.'s action
there, they should also
receive only permissive exclusions. In the
instant case, however, the
I.G. made the determination that Petitioners'
convictions were governed
by section 1128(a), and, once that determination
was made, he had no
discretion to impose anything but the mandatory
exclusion. In Hussaini,
who was convicted under a different statute
than Petitioners, the I.G.
apparently made the initial determination that the
conviction did not
fall within the parameters of section 1128(a), and thus,
he was free to
determine whether the conviction merited a permissive
exclusion. 13/
Because we conclude that the ALJ did not err in concluding that
the
Petitioners' convictions were "integral parts and directly related
to,
the delivery of items under Medicaid," ALJ Decision at 4, and
therefore
met the elements of section 1128(a), we affirm and adopt FFCL Nos.
5 and
6, as modified.
2. Petitioners were not entitled to a pre-exclusion hearing under
section
1128(f)(2).
Petitioners argued that they have been repeatedly rebuffed in
their
requests for a pre-exclusion hearing under section 1128(f)(2).
This
denial has cost them, they asserted, the opportunity to
present
mitigating circumstances showing that no sanctions, or lesser
sanctions,
would be appropriate.
This contention is related to Petitioners' arguments above regarding
the
applicability of the permissive exclusions and is rejected for the
same
reasons.
Under section 1128(f)(2), any individual or entity excluded under
section
1128(b)(7) is entitled to a pre-exclusion administrative
hearing. This
latter section provides for permissive exclusions when
the I.G. determines
that an individual or entity has committed an act
which is described in
section 1128A or section 1128B. See note 3,
supra. As discussed
above, the I.G. must, in cases where there had been
a conviction, first make
the determination that the mandatory provisions
of 1128(a) do not
apply. As we have determined that the mandatory
exclusions were
properly imposed, we also conclude that Petitioners were
entitled to and
received the post-exclusion administrative procedures
afforded by section
1128(f)(1). Petitioners have no right to a section
1128(f)(2)
pre-exclusion hearing, because that right is limited solely
to those
receiving permissive exclusions under section 1128(b)(7).
Further, as the legislative history of section 1128(f)(2) makes clear,
one
of the primary purposes of a pre-exclusion hearing is to afford the
party to
be excluded an opportunity to present evidence regarding
whether he or she
"knowingly and willfully" committed the acts for which
he or she is to be
excluded. 14/ Thus, the pre-exclusion hearing is a
due process
safeguard. S. Rep. No. 109, 100th Cong. 2nd Sess. 10,
12-13
(1987). In the present case, Petitioners have already admitted in
their
guilty pleas to "knowingly and willfully" violating the law pursuant
to
section 1128B(b)(1)(B). Accordingly, they have neither a right to,
nor
a reason for, a pre-exclusion hearing under section 1128(f)(2). 15/
3. Summary disposition was appropriate in this proceeding.
Petitioners argued that the ALJ's decision to grant the I.G.'s motion
for
summary disposition violated their rights under 42 C.F.R.
.
1001.128(a)(2). Their assertion that oral argument under
this
regulation was necessary to challenge the determination that
the
convictions were related to their participation in the delivery
of
services under Medicaid or Medicare is ill-timed. The I.G. argued,
and
Petitioners did not dispute, that at the pre-hearing
conference
conducted September 3, 1991, Petitioners agreed that the appeals
could
be decided by summary disposition and agreed to submit a motion
for
summary judgement. Petitioners also agreed to the Joint
Stipulations of
Facts which were summarized by the ALJ as FFCL Nos.
1-4. Further,
Petitioners did not raise this issue in response to the
ALJ's September
10, 1991, Prehearing Order and Schedule for Filing
Submissions which
specifically directed the parties to submit any requests
for oral
hearings. 16/ Id. at 3. Based on the above, the ALJ
concluded that
there were no genuine issues of material fact that would
require the
submission of additional evidence. A summary disposition
may be granted
when there exists no genuine issues of material fact which
would justify
an evidentiary hearing. Surabhan Ratanasen, M.D., DAB
1138, at 3
(1990). Petitioners did not challenge any facts presented in
the ALJ
Decision, did not allege that they could have submitted
additional
evidence on the issue of whether their convictions "were related,"
nor
did they present any reasons why they did not raise this issue
earlier.
See Leon Brown, M.D., DAB 1208, at 4 (1990). Thus, summary
disposition
by the ALJ was appropriate.
CONCLUSIONS
We conclude that Petitioners' convictions were within the scope of
the
mandatory exclusion authority of section 1128(a)(1) of the
Act.
Accordingly, for the reasons discussed above, we affirm the ALJ
Decision
on the contested findings FFCL Nos. 5 and 6, as No. 6 is modified
below:
6. The I.G. is under no obligation to proceed under
the
discretionary or permissive exclusion provisions of
section
1128(b)(7) against a person who may be suspected of
violating
the anti-kickback law. Once such person has been
convicted of
an offense which falls within the meaning of section
1128(a),
though, the exclusion is mandatory. .We also conclude
that
Petitioners are not entitled to a pre-exclusion hearing under
section
1128(f)(2), and that summary disposition was appropriate.
__________________________
Cecilia
S. Ford
__________________________
Donald
F. Garrett
__________________________
Judith
A. Ballard
Presiding Board Member
1. As the appeals involved violations of the same criminal
statute,
presented similar legal issues, and were handled by the same
counsel,
Petitioners requested consolidation.
2. "State health care program" is defined by section 1128(h) of the
Act
to include, in part, a State plan approved under Title XIX of the
Act
(Medicaid). The term Medicaid is used here to refer to all state
health
care programs.
3. The parties submitted a Joint Stipulation of Facts to the ALJ.
4. The I.G. also asserted that the exclusions were required under
the
new regulations governing sanctions under section 1128 of the Act
which,
he argued, are now effective for all pending cases. We have
recently
found that, to the extent they make substantive changes, the
new
regulations published January 29, 1992, 57 Fed. Reg. 3298,
are
inapplicable to cases pending before January 29th. Behrooz
Bassim,
M.D., DAB 1333, at 9 (1992). Therefore, we consider the
exceptions to
the ALJ Decision without reference to the new regulations.
5. Section 1128(b)(7), a permissive exclusion, states that
the
Secretary may exclude "Any individual or entity that the
Secretary
determines has committed an act which is described in section 1128A
or
section 1128B." This includes fraud, kickbacks, and certain
other
prohibited activities. Petitioners were convicted of
committing
offenses under section 1128B.
6. See, e.g., Napoleon S. Maminta, M.D., DAB 1135, at 6 (1990);
Charles
W. Wheeler and Joan K. Todd, DAB 1123, at 13 (1990); Jack W. Greene,
DAB
1078, at 6 (1989), aff'd Greene v. Sullivan, 731 F.Supp. 835 and
838
(E.D. Tenn. 1990).
7. DAB 1135 also extensively reviewed the legislative history of
the
statutes and concluded that when Congress amended the exclusion laws
in
1987, it intended to strengthen the mandatory authority and to make
that
exclusion available when the covered programs were victims whether
or
not the offense at issue involved the actual delivery by the
convicted
individual or entity. Id. at 9-13.
8. See also Betsy Chua, M.D., and Betsy Chua, M.D., S.C., DAB 1204,
at
(2) (1990) (petitioners' mandatory exclusions affirmed for
convictions
involving acceptance of kickbacks from a Medicaid provider
laboratory).
9. We note at this juncture, that Petitioners' argument that
the
equipment was medically necessary for the patients for whom it
was
prescribed is completely irrelevant to either the crimes for
which
Petitioners were convicted or to the exclusions.
10. The anti-kickback provisions were enacted, in large part,
to
protect the programs from increased costs caused by
fraudulent
practices, kickbacks, or unnecessary services. See generally
The
Hanlester Network, et al., DAB 1275 (1991) (extensive discussion of
the
legislative history and rationale of the kickback provisions).
11. See, e.g., Leon Brown, M.D., DAB 1208, at 3-4 (1990); Napoleon
S.
Maminta, M.D., DAB 1135, at 14-15 (1990); Charles W. Wheeler and Joan
K.
Todd, DAB 1123, at 6-7 (1990); Jack W. Greene, DAB No 1078, at
9-11
(1989), aff'd 731 F.Supp. 835 and 838 (E.D. Tenn. 1990).
12. Section 1128(b)(1) permits exclusion for convictions relating
to
fraud, theft, embezzlement, breach of fiduciary responsibility
or
financial abuse if the offense was committed either in connection
with
the delivery of health care or with respect to a program financed
at
least partially, by Federal, State, or local government. S. Rep.
No.
109, 100th Cong. 1st Sess. 6 (1987).
13. As Hussaini is currently on appeal, and not before this Board,
we
explicitly make no finding with respect to the exclusion imposed in
that
proceeding.
14. See S. Rep. No. 109, 100th Cong. 2nd Sess. 13
(1987)
("anti-kickback provisions of section 1128B may involve practices
that
require adjudication to determine whether the requisite criminal
intent
existed to `knowingly and willfully' violate the standards"); 133
Cong.
Rec. 20,922 (1987) (pre-exclusion hearing is important
because
"knowingly and willfully" is an element of the
anti-kickback
provisions).
15. While it would have been preferable for the ALJ to address
directly
Petitioners' request for a pre-exclusion hearing, he did make note
of
the argument. ALJ Decision at 2 and 4. Because he concluded
that
Petitioners were subject to the mandatory exclusion provisions --
not
the discretionary ones, by implication the provisions of
section
1128(f)(2) were not available to Petitioners. Thus, any error
was
harmless.
16. Petitioner's Memorandum of Law, submitted in response to the
ALJ's
Order, noted in its introduction that Petitioners had appealed
pursuant
to 42 C.F.R. . 1001.128. However, Petitioners' arguments
were
exclusively directed toward the pre-exclusion hearing request. Nor
did
Petitioners' Reply to Respondent's Memorandum of Law mention a
request
for a post-exclusion oral