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CASE | DECISION | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
IN THE CASE OF  


SUBJECT: Mark K. Mileski,

Petitioner,

DATE: September 21, 2004
             - v -
 

Inspector General

 

Docket No. A-04-127
Civil Remedies CR1174
Decision No. 1945
DECISION
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FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE D
ECISION

Mark K. Mileski (Petitioner) appealed a decision by Administrative Law Judge (ALJ) Richard J. Smith dated May 11, 2004 dismissing Petitioner's request for hearing as untimely filed. Mark K. Mileski, DAB CR1174 (2004) (ALJ Decision). Petitioner had requested a hearing on the proposal of the Inspector General (I.G.) to exclude him from participation in Medicare, Medicaid, and all other federal health care programs, for a period of five years beginning January 20, 2003. The exclusion was imposed pursuant to section 1128(a)(4) of the Social Security Act based on Petitioner's felony conviction of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

The ALJ found that Petitioner's request for hearing was filed 41 weeks past the deadline established by 42 C.F.R. 1001.2007(b) and 1005.2(c) of 60 days from receipt of notice of exclusion. Petitioner had argued that he did not receive the original of the I.G.'s notice of exclusion and that his hearing request was timely since it was filed within 60 days of his receipt of a copy of the notice of exclusion. The ALJ rejected this argument on the ground that there was "a strong presumption" that the I.G.'s notice letter was received "in due course, and in the absence of any evidence to support a reasonable showing to the contrary." ALJ Decision at 2-3. Section 1005.2(c) of 42 C.F.R. states that "the date of receipt of the notice letter will be presumed to be 5 days after the date of such notice unless there is a reasonable showing to the contrary."

The only evidence submitted by Petitioner in the proceeding before the ALJ was an unsupported declaration stating that he did not receive the I.G.'s December 31, 2002 notice letter until it was mailed to him on December 9, 2003. (1) (Petitioner stated that he received the notice letter on December 15, 2003. Request for Hearing dated 12/19/03, at 1.) However, Petitioner submitted additional documents with his appeal which he maintained supported his declaration. Petitioner indicated that he did not offer these documents to the ALJ because he assumed that the ALJ had access to all relevant documents. (2)

Section 1005.21(f) of 42 C.F.R. provides for the consideration of additional evidence "[i]f any party demonstrates to the satisfaction of the DAB that additional evidence not presented at such hearing is relevant and material and that there were reasonable grounds for the failure to adduce such evidence at such hearing . . . ." As explained below, we find that there are reasonable grounds for Petitioner's failure to adduce the additional documents in the proceeding before the ALJ and that these documents are relevant and material. However, we do not remand the case to the ALJ to determine whether the additional documents establish that Petitioner's hearing request was timely since we can fully and expeditiously resolve the case based on the record before us.

We conclude that Petitioner's hearing request was timely but that the only argument on the merits that Petitioner advanced in his hearing request is unavailing. We therefore uphold the I.G.'s determination to exclude Petitioner.

1. The additional documents submitted by Petitioner are admissible pursuant to 42 C.F.R. 1005.21(f).

The record supports Petitioner's assertion, noted above, that he did not provide the additional documents in the proceeding before the ALJ because he assumed that the ALJ had access to all relevant documents. Petitioner's response to the I.G.'s motion to dismiss stated in part:

It is also clear that Ms. Jessica Bowman, senior Counsel for the IG, has not . . . checked any of [Petitioner's] file[s] at the DHHS, regarding the incomplete process claimed by the petitioner regarding the DHHS's December 2002 notification and appeal details. Again, a complete outline of the petitioner's requests and responses should be on file with the IG through the DHHS file, which keeps records of both verbal and written communications with the petitioner. It should be clear from DHHS files that the petitioner did not receive proper notification and rights dictated by the regulations . . . .

There is no indication in the record that the I.G. or the ALJ explained to Petitioner, who was appearing pro se at the time he filed this submission, that in an administrative proceeding under 42 C.F.R. Part 1005, the record generally consists only of documents submitted by the parties and admitted by the ALJ and that the ALJ could not take judicial notice of records of correspondence and other contacts between Petitioner and the I.G.

Thus, we conclude that there are reasonable grounds for Petitioner's failure to adduce the additional documents before the ALJ. Moreover, the documents are relevant and material to Petitioner's assertion that his hearing request was timely. Accordingly, we admit the six documents in question into the record.

2. Petitioner's hearing request was timely.

As noted above, Petitioner contended that he did not receive the original of the I.G.'s December 31, 2002 notice letter, and that he first received a copy of the notice letter on December 15, 2003, following which he timely appealed. Based on the record, including the additional documents submitted by Petitioner which we review de novo, we conclude that Petitioner made a "reasonable showing" that he did not receive the I.G.'s notice letter until December 15, 2003. Below, we describe the salient events leading to Petitioner's receipt of this notice.

In October 2002, Petitioner received a letter from the I.G. dated October 9, 2002, advising him of the I.G.'s intent to exclude him. The letter stated that the I.G. was required to exclude Petitioner for a minimum of five years and gave Petitioner 30 days to submit "any information you want the OIG to consider before a final determination regarding the length of your program exclusion is made." P-1 (letter from Conatser to Mileski dated 10/9/02). Petitioner responded by letter dated October 30, 2002. P-2 (letter from Mileski to Conatser). The I.G. subsequently made a final determination to impose the exclusion. Petitioner asserted in his declaration that he did not receive the original notice letter imposing the exclusion, dated December 31, 2002.

In February 2003, Petitioner received a letter from the Office of Personnel Management (OPM) regarding his proposed debarment from participation in the Federal Employees Health Benefits Program. The letter states that the debarment was based on Petitioner's January 20, 2003 exclusion by the Department of Health and Human Services. P-4 (letter from Cope to Mileski dated 2/6/03). Petitioner subsequently received a second letter from OPM debarring him. This letter also indicated that Petitioner could direct any questions about his exclusion to the Director, Health Care Administrative Sanctions, Office of the Inspector General, DHHS. P-5 (letter from Cope to Mileski dated 3/24/03).

At some point after he received the second OPM letter, Petitioner called the Department of Health and Human Services "for details" regarding his exclusion. According to Petitioner--

no details of the exclusion or the missed appeal deadlines were given. The operator or secretary simply confirmed that the petitioner was excluded and informed the petitioner that he could lookup information about the exclusion online at oig.hhs.gov. It should be noted that none of the details regarding actions taken by DHHS, or the appeals process were available online for the petitioner to review.

Notice of appeal at 3. The I.G. did not dispute this allegation.

In September 2003, Petitioner wrote to the I.G. at the address provided by OPM requesting reinstatement into "Medicare/Medicaid" on the ground that his pharmacist license had been reinstated to active status by the state board. P-6 (letter from Mileski to Director, Health Care Administrative Sanctions, Office of the Inspector General). (3) Petitioner apparently believed that the loss of his state license was the basis for the exclusion imposed by the I.G. to which the OPM letters referred as well as the basis for his exclusion from state-administered programs. (4) Petitioner alleged that on or around October 1, 2003, he spoke to Joann Francis in the Office of the Inspector General (at the same address) regarding his request for reinstatement and "was informed that the letter was rejected and that he had missed the deadline for an appeal . . . ." Notice of appeal at 4. The I.G. did not dispute this allegation.

Petitioner had a further conversation with Ms. Francis, to whom he then wrote on November 21, 2003, stating:

Please send me a copy of all letters and documents in my file, as we discussed on the phone on November 19th. I know I received an initial letter from DHHS, but do not show receiving any additional correspondence regarding action taken by DHHS in my files. I have been told that I should have received a letter stating the action taken, and how I can file for an appeal. I believe you said the letter was dated December 31, 2002. I did not receive this letter, but I have been told I am past the appeal period. I would like a copy of this letter, along with any other documents in my file pertaining to my exclusion; so that I can proceed with an appeal, if possible.

P-7 (letter from Mileski to Francis).

We conclude that, under the circumstances here, this is adequate as a "reasonable showing" that Petitioner did not receive the I.G.'s notice of exclusion until December 15, 2003. The I.G. argued that we should apply the presumption of receipt within 5 days, asserting that the notice letter was sent first class mail to the correct address and was not returned as undeliverable. However, the I.G. did not counter Petitioner's showing by providing an affidavit regarding its normal mailing procedures or any particulars about the mailing of the notice letter, much less any other proof of mailing or receipt.

Moreover, while Petitioner knew much earlier that the I.G. intended to exclude him and then, from other sources, that an exclusion had been imposed, those facts are not material. The applicable regulations provide that the time for appeal of this type of exclusion runs from "receipt" of "the notice provided in accordance with 1001.2002." 42 C.F.R. 1005.2(c). Nothing in this language suggests that constructive notice is sufficient or that the doctrine of laches applies. Moreover, actual receipt of the notice of exclusion rather than mere knowledge of the fact that a petitioner has been excluded is logically required in order for the right to a hearing to be meaningful since the notice provides an explanation of a petitioner's appeal rights.

Accordingly, we conclude that Petitioner's hearing request was timely filed.

3. The I.G. properly excluded Petitioner pursuant to section 1128(a)(4) of the Social Security Act.

Petitioner's request for hearing addresses the issue of whether Petitioner was properly excluded as follows:

The [I.G.'s exclusion] letter stated a conviction, which I did not accept as a conviction, nor was it stated as a conviction by my attorneys or judge. My understanding is that I accepted a deferred adjudication, which could be removed from my record in a shorter period than the agency had proposed as a penalty for exclusion. I believe the action taken by the Department of Health and Human Services was excessive, with relationship to my alleged offense.

Request for hearing dated 12/19/03, at 1. This raises two issues, both of which we must resolve against Petitioner. The first issue is whether a deferred adjudication constitutes a conviction within the meaning of section 1128(a)(4) of the Act. That section provides for exclusion of "[a]ny individual or entity that has been convicted . . . of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." The Act defines the term "conviction" for purposes of section 1128 to include "when an individual . . . has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld." Section 1128(i)(4) of the Act. The Board has held that "that definition is binding on us." Carolyn Westin, DAB No. 1381, at 6 (1993); aff'd, Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994). The Board further stated in Westin that-

it is clear from the legislative history of this provision that Congress adopted such broad definitions to ensure that exclusions from federally funded health programs would not hinge on state criminal justice policies. The Committee Report recommending adoption of this definition expressly discussed first offender and deferred adjudication programs stating -

These criminal dispositions may well represent rational criminal justice policy. The Committee is concerned, however, that individuals who have entered guilty or nolo pleas to criminal charges of defrauding the Medicaid program are not subject to the exclusion from either Medicare or Medicaid. These individuals have admitted that they engaged in criminal abuse against a Federal health program and, in the view of the Committee, they should be subject to exclusion.

H.R.Rep. No. 727, 99th Cong., 2d Sess. 75, reprinted in 1986 U.S.C.C.A.N. 3607, 3665.

Westin at 6. Thus, Petitioner's argument that his deferred adjudication did not constitute a conviction has no merit.

The second issue raised by Petitioner is whether a five-year exclusion is excessive under the circumstances of this case. Other than to argue that a deferred adjudication is not a conviction, Petitioner did not dispute that he was convicted "of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." Section 1128(a) is captioned "Mandatory Exclusion" and states that the Secretary "shall" exclude individuals and entities under the circumstances identified in that section. The implementing regulations provide that "[n]o exclusion . . . will be for less than 5 years." The I.G. may lengthen the exclusion period beyond five years if specific aggravating factors are present; however, once an aggravating factor has been established, the exclusion may not be reduced to a period of less than five years based on mitigating factors. 42 C.F.R. 1001.102(b) and (c). Accordingly, Petitioner may not challenge the length of his exclusion as unreasonable.

Conclusion

Accordingly, we vacate the ALJ's Findings of Fact and Conclusions of Law (FFCLs) and substitute the following new FFCLS: (5)

1. Petitioner made a reasonable showing that he did not receive the I.G.'s notice of exclusion dated December 31, 2002 until December 15, 2003.

2. Petitioner's Request for Hearing dated December 19, 2003 was timely filed pursuant to 42 C.F.R. 1001.2007(b) and 1005.2(c).

3. The I.G. properly excluded Petitioner for a period of five years beginning January 20, 2003 pursuant to section 1128(a)(4) of the Social Security Act.

a. Petitioner's deferred adjudication constitutes a conviction within the meaning of section 1128(a)(4) of the Act.

b. We may not review the reasonableness of the five-year exclusion imposed by the I.G. since section 1128(a)(4) of the Act mandates an exclusion of no less than five years.

JUDGE
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Cecilia Sparks Ford

Donald F. Garrett

Judith A. Ballard
Presiding Board Member

FOOTNOTES
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1. The I.G. described the declaration as "an unsigned, non-notarized, and undated statement." I.G.'s Brief in Opposition to Appellant's Appeal, dated 9/2/04 (I.G. Br.) at 7. The declaration is not notarized or dated, but it is signed. Although the ALJ found the content of the declaration insufficient to establish Petitioner's non-receipt of the I.G.'s notice letter, he accorded the declaration "the same weight to which it would be entitled had it been submitted in true affidavit form." ALJ Decision at 8.

2. Petitioner submitted eight documents, which he identified as P-1 through P-8 in Appellate Docket No. A-04-127. Two of these documents are part of the record before the ALJ: Petitioner's hearing request (P-8) and the I.G.'s notice of intent to exclude Petitioner (P-1). The I.G. did not oppose the admission of any of the documents submitted with Petitioner's notice of appeal, but contended that P-2 through P-7 are irrelevant. I.G. Br. at 2, n.1.

3. Petitioner asserted that he wrote to the I.G. "[o]n or around September 28, 2003." Notice of appeal at 4. The letter itself is undated.

4. The Texas Health and Human Services Commission advised Petitioner on December 13, 2002 of his exclusion from participation in the Title XIX (Medicaid) and Title XX programs effective September 6, 2002 based on the suspension of his license on that date. P-3 (letter from Thompson to Mileski).

5. The ALJ's FFCL 1 (which states Petitioner's mailing address) is not incorrect; however, it is not necessary to our decision.

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