Harold Lee Peltan, DAB CR6539 (2024)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Harold Lee Peltan (Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for five years pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  The IG’s exclusion of Petitioner is the result of Petitioner’s conviction, as defined in 42 U.S.C. § 1320a-7(i)(4), of one count of Medicaid fraud in violation of Miss. Code Ann. § 43-13-213.  I affirm the IG’s exclusion determination under section 1128(a)(1).  Petitioner’s exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) and therefore is not reviewable.

I.      Background and Procedural History

Petitioner is an ophthalmologist in Cleveland, Mississippi.  On September 27, 2017, Petitioner was indicted in the Circuit Court for Bolivar County, Mississippi (Circuit Court) on seventeen counts alleging that he had committed Medicaid Fraud.  IG Ex. 2.  On May 5, 2023, Petitioner entered a plea of guilty to Count III.  IG Ex. 3.  Count III specifically alleged that Petitioner unlawfully presented false claims for Medicaid benefits in violation of Miss. Code Ann. § 43-13-213, because he represented that he

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provided medical care to a beneficiary under CPT codes 67228 and 67210 with modifier 79 while knowing that the billing was false since the medical care was not for an unrelated procedure during the post-operative period, as required by the modifier.  IG Ex. 2 at 2.

In entering his plea of guilty to Count III, Petitioner stated: “[b]etween January 20, 2011 and February 12, 2013, in Count III, I provided medical care, billed the Division of Medicaid accordingly, but it is disputed whether the billing was proper within the 90-day global [post-operative] period.”  IG Ex. 3 at 1. Petitioner also requested non-adjudication under Miss. Code Ann. § 99-15-26.  Id.

On May 10, 2023, the Circuit Court entered a non-adjudication order, pursuant to Miss. Code Ann. § 99-15-26, recognizing that Petitioner tendered a plea of guilty to Count III, and the Court withheld acceptance of the plea, adjudication of guilt, and sentencing on the plea pending Petitioner’s successful completion of the conditions imposed in the order.  IG Ex. 4.  Specifically, the Court ordered Petitioner to be placed on unsupervised probation for a three-year period, commit no offenses, and pay all costs and fees.  Id. at 1-2.  If Petitioner failed to fully comply with the terms and conditions imposed, the Court would immediately accept Petitioner’s plea of guilty and proceed to sentencing.  Id. at 2.

By letter dated January 31, 2024, the IG notified Petitioner that he was excluded under section 1128(a)(1) of the Act for five years based on this Circuit Court conviction.

Petitioner filed a request for hearing (RFH) on April 5, 2024.  I conducted a prehearing telephone conference on May 8, 2024, the substance of which I memorialized in my Order issued on the same day, including a schedule for submission of arguments and evidence by the parties.  The IG submitted her prehearing exchange composed of a prehearing brief (IG Br.) and four exhibits (IG Exs. 1-4).  Petitioner submitted his prehearing exchange composed of a prehearing brief (P. Br.) and two exhibits (P. Exs. 1-2).  The IG then submitted a reply brief (Reply).

II.     Jurisdiction

Petitioner timely requested a hearing, and I have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

III.    Issues

The Secretary of Health and Human Services (Secretary) has, by regulation, limited my scope of review to two issues:  Whether the IG has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and, if so, whether the length of the exclusion is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1)-(2).

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Here, if I affirm the basis for exclusion, I must affirm the five-year length of exclusion as that is the minimum exclusion period required by the Act for mandatory exclusions.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).

IV.    Exhibits and Decision on the Record

Neither party objected to the other’s proposed exhibits.  I therefore admit IG Exs. 1-4 and P. Exs. 1-2 into evidence.

Petitioner indicated in his prehearing exchange that he requests an oral hearing so as to make himself available to answer any further questions I may have regarding the advice he received from his criminal defense attorney in the Circuit Court proceedings.  P. Br. at 2.  Given the documentary evidence in the record and the statutory constraints on my jurisdiction here, I find that an oral hearing would provide no additional benefit to either party in this matter and would not aid in rendering my decision.  I therefore proceed to a decision based on the written record before me.  See Civ. Remedies Div. Proc. § 19(d).

V.     Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary.  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, while the rights of both the sanctioned party and the IG to participate in a hearing are specified at 42 C.F.R. § 1005.3.

The Secretary shall exclude from participation in Medicare, Medicaid, and all other federally funded health care programs “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII or under any State health care program.”  42 U.S.C. § 1320a-7(a)(1); see also 42 C.F.R. § 1001.101(a).

An individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  42 U.S.C. § 1320a-7(i).  The Act does not distinguish between misdemeanor and felony convictions.  Id.  An excluded party may not collaterally attack the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years.

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Pursuant to 42 C.F.R. § 1001.102(b), an individual’s period of exclusion may be extended based on the presence of specified aggravating factors.  Only if the aggravating factors justify an exclusion of longer than five years, however, are mitigating factors considered as a basis for reducing the period of exclusion to no less than five years.  42 C.F.R. § 1001.102(c).  Exclusion is effective 20 days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(b), (c).

VI.    Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and are followed by pertinent findings of fact and analysis.

1. The IG established a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)).

Section 1128(a)(1) of the Act requires exclusion from participation in Medicare, Medicaid, and all federal health care programs where an individual has been 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); 42 C.F.R. § 1001.101(a).  The IG has established these elements by a preponderance of the evidence.

1. Petitioner was convicted of a criminal offense within the meaning of the Act.

“Convicted,” for purposes of mandatory exclusions under the Act, is defined at 42 U.S.C. § 1320a-7(i)(1)-(4).  Of relevance here, “convicted” includes “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 withheld.”  42 U.S.C. § 1320a-7(i)(4).  The Circuit Court’s non-adjudication order falls within this definition: the Circuit Court withheld acceptance of Petitioner’s plea, conviction, and sentencing pending Petitioner’s ability to successfully meet a three-year unsupervised probation period.  IG Ex. 4.  If Petitioner failed to meet his probationary condition, the Circuit Court “shall, with or without notice to the [Petitioner], immediately accept [Petitioner’s] plea of guilty and proceed to sentencing in this cause.”  Id. at 2.

Petitioner does not dispute that the Circuit Court entered a non-adjudication order, nor does Petitioner contest that the Circuit Court’s non-adjudication order falls outside the

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definition of conviction for purposes of section 1128(a)(1) of the Act.  P. Br. at 1-2.  Rather, Petitioner argues that his “Plea and resulting Non-Adjudication Order should be vacated for failure of his attorney to advise [Petitioner] of the collateral consequences of the Plea.”  Id. at 2.

At times, the definition of “convicted” for purposes of the Act is broader than the analog found in the laws of certain states, as appears to be the case here.  See Miss. Code Ann. § 99-15-26.  This can lead to outcomes where a Petitioner unwittingly pleaded guilty to a criminal offense under a state’s deferred adjudication program, or something similar where judgement is withheld pending the fulfillment of certain conditions set by the state court, believing that their plea will not impact their ability to receive payment for treating federal healthcare beneficiaries.  And had they known that their plea would qualify as “convicted” for purposes of OIG exclusions, they may have opted to go to trial as the Petitioner here credibly asserts.  I, however, do not have the authority to vacate Petitioner’s plea and the resulting Non-Adjudication Order regardless of how compelling the circumstances.

Petitioner also points to the text of his plea, where he specifically stated that the propriety of his billing (the use of modifier 79 appended to certain procedures that occurred within 90 days of another procedure provided to a particular Medicaid beneficiary) is disputed: “[b]etween January 20, 2011 and February 12, 2013, in Count III, I provided medical care, billed the Division of Medicaid accordingly, but it is disputed whether the billing was proper within the 90 day global [post-operative] period.”  IG Ex. 3 at 1; P. Br at 2.  While I find that this statement is not itself an admission of guilt (and operates quite to the contrary), the Petitioner offered this statement in a document that the Petitioner intended for the Circuit Court to treat as an unequivocal guilty plea.  And the Circuit Court treated it as such, because it was required to under Mississippi law for the Circuit Court to properly issue a Non-Adjudication Order.  Miss. Code Ann. § 99-15-26(1)(a) (“In all criminal cases, felony and misdemeanor, . . . the circuit or county court shall be empowered, upon the entry of a plea of guilty by a criminal defendant made on or after July 1, 2014, to withhold acceptance of the plea and sentence thereon pending successful completion of such conditions as may be imposed by the court pursuant to subsection (2) of this section.” (Emphasis added)).  To wit, Petitioner’s statement above is contained within a document titled “Petition to Enter Plea of Guilty.”  IG Ex. 3.  Given that the Circuit Court treated Petitioner’s plea as a plea of “guilty,” I cannot now find that Petitioner’s plea ought to be construed otherwise in this tribunal.

Lastly, Petitioner essentially argues in his RFH that the underlying Medicaid Fraud charge from which this proceeding derives was meritless for a number of reasons: Mississippi did not have a local coverage determination governing the use of the CPT codes at issue during the relevant time period and there were no relevant Medicaid requirements at the time (RFH at 2, 3); as such, Petitioner did not and could not have had knowledge that his claims were false (id.); the same issue was highlighted during a zone

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program integrity contractor (ZPIC) audit of Medicare claims and was determined to be a billing error as opposed to fraud and Petitioner paid back the associated funds (id.); the American Medical Association guidance at the time provided, with respect to the CPT code at issue, that the treatment or global period is determined by the “physician and varies depending on the patient, diagnosis and often the area to be treated” (id.); prior to Petitioner’s indictment, CMS recognized that the procedure at issue could appropriately be billed within a 90-day period (id. at 2-3); and the total overpayment at issue in Count III was $18,104.70 and has been repaid (id. at 1, 2, and 3).

Once again, despite that the facts underlying Petitioner’s conviction appear on the current record to amount to nothing more than a billing error at best, I am constrained by Petitioner’s plea in Circuit Court and the current regulations:

When the exclusion is based on the existence of a criminal conviction or a civil judgment imposing liability by Federal, State or local court, a determination by another Government agency, or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction, civil judgment or determination is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in this appeal.

42 C.F.R. § 1001.2007(d).

Therefore, I regrettably must find that Petitioner was convicted of a criminal offense within the meaning of the Act.

2. Petitioner’s criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.

The Act requires an individual’s exclusion from participation in federal health care programs if convicted of an offense related to the delivery of an item or service under Medicare or a state health care program.  See 42 U.S.C. § 1320a-7(a)(1).  For the IG to exclude Petitioner under section 1128(a)(1), the criminal offense that was the basis of Petitioner’s conviction must have been “related to the delivery of an item or service under subchapter XVIII or under any State health care program.”  42 U.S.C. § 1320a-7(a)(1).  A conviction is related to the delivery of an item or service under a covered program when there is a “common-sense connection” between the offense and the delivery of an item or service under a covered program.  James Randall Benham, DAB No. 2042 at 5 (2006) (citations omitted); see also Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012).

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Petitioner’s offense pertained to the modifier used to obtain reimbursement for certain medical procedures Petitioner performed on a Medicaid beneficiary.  As such, the offense is unquestionably related to the delivery of an item or service under a state health care program.  Petitioner also does not dispute this.  See generally, P. Br.  Therefore, I find the IG has also met this element.

2. Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(1), Petitioner must be excluded for a minimum of five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).  I do not have the discretion to impose a lesser period of exclusion.1

VII.   Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for five years pursuant to 42 U.S.C. § 1320a-7(a)(1).  Petitioner’s exclusion is effective 20 days from the date of the IG’s notice of exclusion.