Robin G. Peavler, DAB CR5220 (2018)

DECISION

Petitioner, Robin G. Peavler, was a Kentucky physician who co-owned a chain of substance abuse treatment clinics. He was convicted on 17 felony counts of aiding and abetting health care fraud. Based on this, the Inspector General (IG) has excluded him for five years from participating in Medicare, Medicaid, and all federal health care programs, as authorized by section 1128(a)(3) of the Social Security Act (Act).  Petitioner appeals the exclusion.  For the reasons discussed below, I find that the IG properly excluded Petitioner Peavler and that the statute mandates a minimum five‑year exclusion.

Background

In a letter dated April 30, 2018, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a period of five years because he had been 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 healthcare item or service; or with respect to any act or omission in a healthcare program (other than Medicare or a state health care program)

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operated by, or financed, in whole or in part, by any federal, state, or local government agency.  The letter explained that section 1128(a)(3) of the Act authorizes the exclusion.  IG Ex. 1.

Petitioner timely requested review.

The parties submitted written arguments (IG Br.; P. Br.).  With his argument, the IG submitted four exhibits (IG Exs. 1-4).  With his argument, Petitioner submitted one exhibit (P. Ex. 1).  The IG submitted a reply (IG Reply).

In the absence of any objections, I admit into evidence IG Exs. 1-4 and P. Ex. 1.

The parties agree that an in-person hearing is not necessary.  IG Br. at 5; P. Br. at 2.

Discussion

Petitioner must be excluded from program participation for a minimum of five years because he was convicted of felony fraud in connection with the delivery of health care services.  Act § 1128(a)(3).1

Under section 1128(a)(3) of the Act, the Secretary of Health and Human Services must exclude an individual who has been convicted under federal or state law of felony fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a healthcare item or service.  42 C.F.R. § 1001.101(c)(1).

Petitioner Peavler was a physician who, with another physician, owned a chain of substance abuse treatment clinics, headquartered in Danville, Kentucky.  IG Ex. 2.  With others, he submitted to insurers claims for urine tests that were not medically indicated or necessary, the results of which were not used in directing patient care.  IG Ex. 2 at 4‑6.  He was indicted on multiple felony counts.  IG Ex. 2.  Following a jury trial in U.S. District Court for the Eastern District of Kentucky, he was convicted on 17 felony counts of aiding and abetting health care fraud (18 U.S.C. § 1347) based on claims submitted to the Anthem Health Plans of Kentucky.  IG Exs. 3, 4.

On December 19, 2017, the court entered judgment against Petitioner and sentenced him to 18 months in prison, followed by one year of supervised release.  The court ordered Petitioner to pay $3,378.37 in restitution to Anthem, as well as a $1,700 assessment and a $7,500 fine.  IG Ex. 4.

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Petitioner concedes that he was convicted of a felony and that the felony was 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.  P. Br. at 1‑2.  He points out, however, that his conviction involved false claims to a private insurer, not to Medicare, Medicaid, or any government agency.  But, section 1128(a)(3) does not require a conviction for defrauding a government health care program.  That provision covers a broad range of financial misconduct, including fraud against a private insurer.

Petitioner also minimizes the seriousness of his crimes, pointing out that the court ordered that he and his confederates pay a small amount in restitution and that the vast majority of his lab samples were not “felonious.”  P. Br. at 2.  Of course, crimes that result in prison sentences are generally considered quite serious, but even that is irrelevant here.  So long as Petitioner’s crimes resulted in at least one felony conviction, the IG is required to exclude him from program participation.

Petitioner plainly committed fraud in connection with the delivery of health care services, which subjects him to exclusion under section 1128(a)(3).

An exclusion brought under section 1128(a)(3) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Conclusion

For these reasons, 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.