Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
In the Case of:
The Inspector General
- v. -
Edward J. Petrus, Jr., M.D., and
The Eye Center of Austin,
Respondents.
DATE: July 5, 1991
Docket No. C-147
Decision No. 1264
FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE ECISION
Dr. Edward J. Petrus, Jr. and The Eye Center of Austin
(Respondents)
requested review by the Appellate Panel of an October 10, 1990
decision
by Administrative Law Judge (ALJ) Steven T. Kessel. See The
Inspector
General v. Edward J. Petrus, Jr., M.D., and The Eye Center of
Austin,
DAB Civ. Rem. C-147 (1990) (hereafter, the ALJ's Decision). The
ALJ's
Decision affirmed a determination by the Inspector General (I.G.)
that
the Respondents had violated section 1128A of the Social Security
Act
(Act). The ALJ imposed $180,000 in penalties and assessments
against
the Respondents, jointly and severally.
SUMMARY OF OUR DECISION
Section 1128A of the Act, referred to as the Civil Monetary Penalties
Law
(CMPL), authorizes imposition of penalties and assessments on
persons who
submit false claims to the Medicare program or State health
care programs
(Medicaid) or who engage in other activities which
adversely affect the
integrity of the program or the quality of care
provided. Section
1128A(a) establishes liability for any person that--
(1) presents or causes to be presented . . . a
claim . . . that
the Secretary determines--
(A) is for a medical or
other item or service that the
person
knows or should know
was not provided as claimed,
* * *
or,
(D) is for a medical or
other item or service furnished
during
a period in which the
person was excluded from the program
under which the claim was made . .
. . 1/
The ALJ found the Respondents liable with respect to 271 items or
services
(counts) under paragraph (D) and, alternatively, liable for 174
of those
counts under paragraph (A). The crux of the ALJ's decision
was
that--
o The Respondents presented or caused to be
presented claims for
Medicare or Medicaid payments
for 271 items or services furnished
by Dr. Petrus during a period when he was
excluded from participating in
those programs; and
o The Respondents presented or caused to be
presented claims for
Medicare or Medicaid payments
for 174 items or services which
identified other physicians as the provider
even though they were in
fact furnished by Dr. Petrus, and that the
Respondents knew, had reason
to know, or should have known that these items
or services were not
provided as claimed.
.The ALJ found that the evidence supporting liability was credible
and
uncontradicted, and his decision contains a careful examination of
his
reasons for rejecting the Respondents' allegations. ALJ's Decision
at
34-43. In determining the amount of the penalties and assessments,
the
ALJ considered certain aggravating factors and determined that there
was
no evidence of any mitigating factor. The most compelling
aggravating
factor was that the Respondents had deliberately schemed to
circumvent
the effects of the suspension (for example, by instructing
employees to
resubmit claims for items or services furnished by Dr. Petrus as
though
they had been provided by another physician).
On appeal to us, the Respondents submitted a lengthy brief,
challenging
the ALJ's resolution of various legal issues, the ALJ's rulings
on
evidentiary matters, and the ALJ's impartiality. The Respondent
took
exception to numerous specific Findings of Fact and Conclusions of
Law
(FFCLs) set out in the ALJ's Decision.
For the reasons summarized here and explained in detail below, we
affirm
the ALJ's Decision (although we make a few technical modifications
to
the FFCLs). In affirming and adopting the FFCLs, as modified,
we
conclude that the ALJ's factual findings are supported by
substantial
evidence in the record and that the ALJ reasonably determined
that,
where required, the I.G. met his burden of proving facts by
a
preponderance of the evidence.
The Respondents' arguments represent, for the most part, collateral
or
procedural attacks on the ALJ's Decision and are based on a
convoluted
and erroneous analysis of the law or on statements of fact
supported
only by the Respondents' assertions and not by any evidence
properly in
the record. We address these arguments below and state in
detail our
reasons for rejecting them. In particular, we note here that
there is
no evidence that the ALJ was biased or that he failed to provide
the
Respondents a fair hearing. To the contrary, the record amply
supports
a conclusion that the ALJ afforded the Respondents extra leeway
in
presenting their case (since they appeared pro se) and imposed
penalties
and assessments less than what might have been warranted under
the
circumstances.
We emphasize here, moreover, that relatively few of the
Respondents'
arguments on appeal address the key issues of their liability
under the
CMPL. Their major arguments which did relate to liability,
and our
reasons .for rejecting those arguments, may be summarized as
follows:
o The Respondents argued that they were liable only if the items
or
services were "not provided" and that there was no finding here that
the
items or services were not provided to the program recipients.
We
conclude that 174 items or services were "not provided as
claimed"
within the plain meaning of section 1128A(a)(1)(A) since the
physician
was misrepresented on the claim form. We further conclude
that the
Respondents would, in any event, be liable under section
1128A(a)(1)(D)
for all 271 items or services. 2/
o The Respondents argued that the ALJ failed to recognize that The
Eye
Center of Austin (Eye Center) was not suspended from participating
in
the programs. This fact is irrelevant, however. The effect of
Dr.
Petrus' suspension was that no payment could be made under Medicare
or
Medicaid for services furnished by him and strict liability
attached
under section 1128A(a)(1)(D) to any person (including an entity like
the
Eye Center) who presented or caused to be presented claims for
services
furnished by him during the period of suspension.
o The Respondents asserted that Dr. Petrus did not know before
June
1983 that his suspension became effective May 12, 1983. The
testimony
(by an employee of the Eye Center) which the Respondents cited
shows
only when that employee learned of the suspension and is
therefore
irrelevant. It is reasonable to infer from the documentary
evidence
cited by the ALJ that Dr. Petrus knew the effective date at least by
the
time the claims at issue here were presented. The Respondents cited
to
nothing which would indicate that the precise date Dr. Petrus knew
had
to be established as a prerequisite to liability under either
paragraph
(A) or (D) of section 1128A(a)(1).
o The Respondents attacked the ALJ's finding that Dr. Petrus
had
instructed his office staff to falsify claims. This attack
misconstrues
certain testimony by taking it out of context or
mischaracterizes as
testimony questions asked by Dr. Petrus at the
hearing.
o The Respondents challenged the bases for the ALJ's findings to
the
effect that Dr. Petrus, rather than other physicians who worked for
the
Eye Center, had provided certain items and services. The ALJ's
findings
were based on his evaluation of the credibility of witnesses;
the
transcript citations relied on by the Respondents are either misread
by
them or are irrelevant.
Below, we first provide background information necessary to enable
the
reader to understand our decision. In Part I of our analysis,
we
address general issues raised by the Respondents, and in Part II
we
address their exceptions to specific FFCLs. In Part III, we
address
certain technical revisions and corrections to the FFCLs proposed by
the
I.G. (which resulted in the modified FFCLs which we include as
an
Appendix to our decision).
BACKGROUND
Case History 3/
Dr. Petrus, an ophthalmologist who practiced in Austin, Texas, was
the
sole owner and operator of the Eye Center, a professional
corporation,
during the period May 12, 1983 through January 21, 1984.
On December 21, 1979 Dr. Petrus was convicted of a criminal
offense
related to his participation in the Texas Medicaid program. On
June 10,
1982, the I.G. notified Dr. Petrus that he would be suspended
from
participating in Medicare and Medicaid pursuant to section 1128(a)
of
the Act, based on the 1979 conviction. The notice of
suspension
informed Dr. Petrus that after the suspension became effective,
no
payments would be made for items or services he furnished
either
directly, or as an employee of a provider of services. Dr.
Petrus
obtained a temporary restraining order and preliminary
injunction
prohibiting the suspension from going into effect.
Dr. Petrus and the Department of Health and Human Services
eventually
entered into a settlement agreement. Under the terms of the
agreement,
Dr. Petrus would be suspended from Medicaid and Medicare for six
months.
The suspension would become effective seven days after the date a
court
order was signed and entered dissolving the preliminary
injunction. The
preliminary injunction was dissolved on May 5,
1983. Dr. Petrus'
suspension became effective May 12, 1983.
The implementing regulations then in effect provided that
the
reinstatement of a party suspended from Medicare was not
automatic.
Rather, a suspended party was required to apply, and satisfy
certain
criteria, for reinstatement to Medicare and Medicaid. See 42
C.F.R.
420.112, 420.120, and 455.212(e) (1982); 42 C.F.R. 420.130, 420.132,
and
455.230-455.234 (1983). 4/ On August 12, 1983, Dr. Petrus
requested
reinstatement after his six-month suspension. In November
1983 he was
informed that his request was under review. At that time
Dr. Petrus and
the Eye Center were the subject of another investigation by
the I.G.
The I.G. eventually denied Dr. Petrus' request for
reinstatement.
From June through October 1983, Dr. Paul Malsky worked at the
Eye
Center. From November 1983 through January 1984, Dr. Gregory
Baer
worked at the Eye Center. Both doctors were assigned Medicare
and
Medicaid identification (provider) numbers. At the time they were
hired,
neither doctor was aware of Dr. Petrus' suspension from Medicare
and
Medicaid. During their individual terms of employment, Doctors
Malsky
and Baer were the only physicians, other than Dr. Petrus, working at
the
Eye Center.
In 1984, a federal grand jury began an investigation of Medicare
and
Medicaid claims submitted by Dr. Petrus and the Eye Center after May
12,
1983 (the effective date of his suspension). On October 19, 1984,
Dr.
Petrus was indicted in federal court on charges of Medicare and
Medicaid
fraud and obstruction of justice.
On May 2, 1985, Dr. Petrus pled guilty to one count of Medicare
fraud
involving two items or services and one count of Medicaid
fraud
involving four items or services. Additionally, Dr. Petrus pled
guilty
to one count of obstruction of justice relating to his efforts to
impede
the grand jury investigation.
As a result of this second conviction, Dr. Petrus was suspended
from
participation in Medicare and Medicaid for 25 years. The Eye
Center was
also suspended for 25 years.
On June 7, 1989, the I.G. notified the Respondents of his intention
to
impose against them, jointly and severally, a civil monetary penalty
of
$293,500 and an assessment of $80,810 (for a total of $374,310).
The
I.G. alleged that the Respondents had presented, or caused to
be
presented, to the contractors responsible for processing Texas'
Medicare
claims and the State's Medicaid agency, claims for 275 items or
services
in violation of the CMPL. 5/
Specifically, the I.G. charged that the Respondents had presented
or
caused to be presented claims for items and services provided by
Dr.
Petrus during his suspension from Medicare and Medicaid.
Additionally,
the I.G. charged that the Respondents had presented, or caused
to be
presented, claims for items or services which identified as the
provider
a physician other than Dr. Petrus (i.e., either Dr. Malsky or Dr.
Baer)
but which were, in fact, provided by Dr. Petrus.
The I.G. proposed $374,310 in penalties and assessments, against
the
Respondents. Discussing the factors considered in determining
this
amount, the I.G. indicated that there were no mitigating factors
that
would work in the Respondents' favor. However, the I.G. noted
that,
since the Respondents had already been suspended from participation
in
Medicare and Medicaid for 25 years as a result of Dr. Petrus' 1985
plea
agreement, the I.G. had decided not to seek any additional period
of
exclusion.
On August 8, 1989, the Respondents requested a hearing before an ALJ.
The
ALJ held a hearing and issued his decision on October 10, 1990.
Summary of the ALJ's Decision
The ALJ's Decision was supported by 230 FFCLs. The ALJ identified
the
principal issues as whether:
1. The six-year statute of limitations
provided in section
1128A(c)(1) of the Act applies
to the claims for items or services
at issue.
2. Assuming the six-year statute of
limitations applies, the I.G.
initiated a proceeding
against Respondents not later than six years
after the claims at issue were
presented.
3. Rulings on the admissibility of evidence in
this case violated
Respondents' due process
rights.
4. Denial of Respondents' motion to postpone
the hearing was
unfair to Respondents.
5. Respondents presented or caused to be
presented claims for
items or services in violation
of section 1128A of the Act.
6. Assessments and penalties should be imposed
against Respondents
and, if so, in what amounts.
7. The penalties and assessment imposed in
this case violate
Respondents' rights not to be
placed in double jeopardy.
ALJ's Decision at 1-2.
Generally, the ALJ determined that the six-year statute of limitations
in
section 1128A of the Act applied to the claims for items or services
in issue
and that the I.G. had initiated an action against the
Respondents not later
than six years after those claims were presented.
The ALJ also determined
that his rulings on the admissibility of
evidence did not violate the
Respondents' due process rights, and that
his denial of the Respondents'
motion to postpone the hearing was not
unfair to them. The ALJ found
that the Respondents presented or caused
to be presented claims for 271 items
or services in violation of section
1128A of the Act and, therefore,
penalties and assessments were
appropriate. Finally, the ALJ rejected
the Respondents' argument that
the penalties and assessments imposed in this
case violated their rights
not to be placed in double jeopardy.
.The ALJ imposed penalties ($100,000) and assessments ($80,000)
jointly
and severally against the Respondents. However, the penalties
and
assessments were in amounts lower than those originally sought by
the
I.G.
The Respondents' Exceptions
The Respondents timely filed exceptions to the ALJ's Decision on
November
2, 1990. Generally, the Respondents challenged the ALJ's
determinations
relative to each of the seven issues addressed by the
ALJ. By doing so,
the Respondents implicitly attacked certain FFCLs
which served as the bases
for his analysis of those issues.
Additionally, the Respondents (referring to
themselves as Petitioners)
enumerated specific exceptions, prefacing their
exceptions with the
following statement:
The Petitioners, without waiving the objections
tendered by
Petitioner Petrus at the hearing, or
admitting any of the
allegations or findings made by the IG and/or ALJ,
respectfully tender
several alternative arguments. Petitioners contend
that: (1) the ALJ
erred because his decisions are contrary to the plain
language of the
Act; (2) the ALJ did not take into consideration the
mitigating factors
introduced into evidence at the hearing; (3) the ALJ made
findings of
fact that were not based upon substantial evidence; (4) the ALJ
did not
apply the correct standard of liability to each Petitioner.
These
exceptions are addressed to the most outrageous findings of fact
and
conclusions of law, and the decision not to address all of the
findings
does not signify that the Petitioners accept them, but their
inaccuracy
is addressed in other documents . . . .
Respondents' Brief 6/ (Br.) at 41.
The Respondents took specific exception to 161 of the 230 FFCLs.
In
some instances, the Respondents' arguments regarding
specific
exceptions repeated arguments previously made relative to the
broader
issues.
The I.G.'s Proposed Exceptions
On December 5, 1990, the I.G. filed "The Inspector General's Response
to
Respondents' Exceptions." Aside from answering the
Respondents'
exceptions, this document also contained proposed exceptions, as
well as
proposed revisions and corrections to the ALJ's FFCLs.
On December 12, 1990, the ALJ issued a "Decision Dismissing
Inspector
General's Proposed Exceptions to Administrative Law Judge's
Decision."
There, the ALJ ruled that while the I.G.'s responses to the
Respondents'
exceptions were timely filed, the I.G.'s exceptions were
not.
Consequently, the ALJ dismissed the I.G.'s exceptions.
Regarding the I.G.'s proposed revisions and corrections, the
ALJ
determined that they did not rise to the level of exceptions. Thus,
he
did not dismiss them as exceptions filed out of time. Id. at 3.
In our Determination to Accept Review (December 20, 1990), we found
that
the I.G.'s exceptions were untimely under the requirements of 42
C.F.R.
1003.125(d) and properly dismissed by the ALJ. Thus, our
analysis does
not consider the I.G.'s proposed exceptions. However, as
noted below,
we do address the I.G.'s proposed revisions and corrections.
ANALYSIS
I. The Respondents' General Exceptions
1. The ALJ correctly determined that the six-year statute
of
limitations provided in section 1128A(c)(1) of the Act applies to
the
claims for items or services at issue.
At issue here is FFCL No. 35, which provides--
35. The I.G. may initiate an action under
section 1128A of the
Social Security Act within six
years of the date that a claim at
issue was presented.
ALJ's Decision at 6. 7/
The Respondents asserted that the I.G. lacked the jurisdiction to file
a
complaint against them in 1989. The Respondents' position is based
on
their assertions that the CMPL had a five-year statute of
limitations
for claims submitted prior to 1987, that the claims at issue
were
submitted between May 12, 1983 and January 21, 1984, and that the
I.G.'s
action was not initiated until June 1989, more than five years after
the
latest submission of the claims.
On February 6, 1990, the ALJ ruled that the six-year statute
of
limitations applies in this case. The ALJ noted that on August
18,
1987, the CMPL had been amended to include a six-year statute
of
limitations pursuant to section 3(b) of the Medicare and
Medicaid
Patient and Program Protection Act (MMPPPA). 8/ Section 15(a)
of the
MMPPPA provided that all its amendments to the CMPL, except for
those
specifically given prospective application, "shall become effective
at
the end of the fourteen day period [September 1, 1987] after
enactment"
and "shall not apply to administrative proceedings commenced
before the
end of such period." This statute of limitations was
subsequently
incorporated into a revision of the CMPL regulations at 42
C.F.R.
1003.132. See 52 Fed. Reg. 49412 (December 31, 1987); see also
ALJ's
Ruling on Respondents' Motions (February 6, 1990) at 2-3.
The ALJ's Decision affirmed his February 6th ruling on the period
of
limitations to be applied. He noted that, prior to August 18,
1987,
section 1128A of the Act did not contain a statute of
limitations.
Rather, the version of 42 C.F.R. 1003.132 then in effect
provided a
five-year period of limitations for section 1128A cases.
Thus, the ALJ
concluded, the "statute of limitations" cited by the
Respondents was a
regulatory creation which was superseded by the MMPPPA
statutory
provision.
In their exceptions, the Respondents reiterated their contention that
the
CMPL, as applied to their situation, is governed by a five-year
"statute of
limitations." The Respondents asserted generally that
administrative
rules were not intended to have retroactive application
and that the Medicare
Act specifically prohibited retroactive rules.
Further, the Respondents
argued that application of the six-year statute
of limitations violated the
ex post facto clause of the Constitution,
and that the deterrence envisioned
by the CMPL mandates prospective,
rather than retrospective, application of
the six-year statute of
limitations. Respondents' Br. at 2-11.
The ALJ's determination that the Respondents' case is not governed by
the
five-year limitation is correct. In Bernstein v. Sullivan, 914
F.2d
1395 (10th Cir. 1990), issued after the ALJ's Decision here, the
court
reached a similar result. 9/
Bernstein involved facts which, if anything, were more favorable to
the
plaintiff than the facts here. There, the regulatory five-year
period
of limitations had lapsed, without any action by the I.G., by June
27,
1987. The amendments creating the six-year limitation for CMPL
became
effective on September 1, 1987. Approximately five months later
the
I.G. brought a CMPL action against Dr. Bernstein. The ALJ upheld
the
I.G.'s action and Dr. Bernstein took exception based on the statute
of
limitations set out at 42 C.F.R. 1003.132.
In its analysis, the court recognized that prior to 1987 Congress had
not
established a specific statute of limitations within which the
Secretary
could initiate an action under the CMPL. Rather, the
Secretary applied
the regulatory five-year period. Bernstein at 1397.
The court
interpreted the amendment to section 1128A(c)(1) as
"authorizing the
Secretary to initiate an action with respect to any
claim or request for
payment at any time up to six years after the claim
for reimbursement was
presented or a request for payment was made." The
court said that the
language of the 1987 amendment, prohibiting its
application to proceedings
commenced before the amendments' September 1,
1987 effective date, "strongly"
suggested that the six-year limitation
was intended to apply to proceedings
initiated after that date. Id. at
1399. The court indicated that
in applying the six-year statute of
limitations the Secretary was following
the "plain meaning" of the 1987
amendment.
The court also determined that application of the six-year statute
of
limitation did not violate Dr. Bernstein's constitutional rights.
The
court placed primary reliance on Campbell v. Holt, 115 U.S. 620
(1885),
where the Supreme Court stated that it did "not understand that a
right
to defeat a just debt by the statute of limitations is a vested right
.
. . [rather,] no right is destroyed when the law restores a remedy
which
had been lost." Id. at 628; see Bernstein at 1400.
The court also distinguished an earlier CMPL case, Griffon v. U.S.
Dept.
of Health and Human Services, 802 F.2d. 146 (5th Cir. 1986), relied
on
by the Respondents here for the proposition that the CMPL could not
be
applied retroactively. As the Bernstein court noted, Griffon
involved
the substantive CMPL provisions rather than the statute of
limitations.
Bernstein at 1402-1403. Therefore, Griffon does not
support the
Respondents' arguments on this issue. Similarly, the
Supreme Court
decision in Bowen v. Georgetown University Hospital, 488 U.S.
204
(1988), is distinguishable because it involved retroactive
application
of a Medicare regulation which changed the plaintiff's
substantive
rights. Here, not only was there no right or expectation
destroyed, but
the I.G. had never lost its remedy; before five years had
expired, the
six-year statute had been enacted and the regulation had been
amended to
provide a six-year period for the I.G. to initiate an action.
The Respondents, relying on United States v. Halper, 490 U.S. 435
(1989),
also characterized the CMPL as a quasi-criminal statute for the
purpose of
asserting that the six-year statute of limitations, as
applied, violated the
ex post facto clause at Article I, Section 10 of
the Constitution.
We consider the Halper decision more fully later in this analysis.
For
our purposes here, it is sufficient to note that in Halper the
Supreme
Court announced "a rule for the rare case . . . where a
fixed-penalty
provision subjects a prolific but small-gauge offender to a
sanction
overwhelmingly disproportionate to the damages . . . caused."
Id. at
449. The Court recognized that a civil sanction which
serves the goal
of punishment, rather than merely making the Government
whole, could
constitute "punishment" for purposes of invoking
constitutional
protection. Id. at 450-451.
The Respondents' reliance on Halper is premised on an overbroad reading
of
that decision. Halper was a narrowly drawn decision which clearly
did
not have the effect of transforming the CMPL into a criminal
statute.
10/ Moreover, this Board has previously .considered and
rejected the
argument that application of the 1987 MMPPPA amendments to
acts occurring
before the effective date of the amendments violated the
ex post facto
clause. See Betsy Chua, M.D. and Betsy Chua. M.D., S.C.,
DAB No. 1204
(1990). 11/
Finally, we reject the Respondents' argument that applying the
six-year
statute of limitations to this action is inconsistent with the
purpose
of the CMPL provisions to deter fraud. To the contrary, it
would
frustrate the deterrent effect of the CMPL to excuse individuals
like
the Respondents, who have engaged in fraudulent activities,
merely
because they may have thought an I.G. action would be barred after
five
years.
Accordingly, we conclude that the ALJ properly applied the
six-year
statute of limitations to this case. 12/
Consequently, we affirm and adopt the ALJ's FFCL No. 35.
2. The I.G. initiated an action against the Respondents not later
than
six years after the claims at issue were presented.
Although the Respondents did not take specific exception to the
FFCLs
relative to this issue, the FFCLs which we must consider as part of
our
analysis are--
25. On June 7, 1989, the I.G. sent a notice to
the Respondents
alleging that they had presented or
caused to be presented claims
for 275 items or services in violation of the
Civil Monetary Penalties
Law, section 1128A of the Social Security Act.
* * *
34. The earliest date when any of the items or
services at issue
were received for processing by
Blue Cross or by NHIC was June 8,
1983.
* * *
36. For purposes of determining whether an
action was initiated
within the six-year statute of
limitations, the term "presented"
refers to the date on which a claim was
received by an agent acting on
behalf of the United States or a state.
37. All of the 271 claims at issue were
presented within six years
of the date of the notice
letter.
38. For each of the 271 claims at issue, the
I.G. initiated his
action against the Respondents
within the six-year statute of
limitations.
ALJ's Decision at 4, 6.
Simply put, the issue is when the action against the Respondents
was
initiated within the meaning of section 1128A(c)(1).
The Respondents asserted that this determination should be governed
by
Rule 3 of the Federal Rules of Civil Procedure, which provides:
"A
civil action is commenced by filing a complaint with the
court."
Applying Rule 3, the Respondents argued by analogy that this cause
of
action began on August 17, 1989 when this case was docketed (with
the
Board's Civil Remedies Division) .and assigned to the ALJ.
Respondents'
Br. at 11. The Respondents maintained that the I.G.'s June
7, 1989
letter was merely a proposal to impose a penalty and did not serve
the
same purpose as actual service of a summons as required by Rule 4 of
the
Federal Rules. The Respondents asserted that if the statute was
silent
on the point, the absence of a standard and the desire for
uniformity
would make Rule 3 the test for commencement. Thus, the
Respondents
asserted that the I.G. should have filed a complaint against them
(Rule
3), followed by a summons (Rule 4). The Respondents then
contended that
since they had never received a summons, this case should be
dismissed.
13/ Id. at 13.
Upon consideration of the Respondents' arguments, we conclude that the
ALJ
correctly determined that this action was initiated on June 7, 1989.
Thus,
the claims here (since they were presented by the Respondents
after June 7,
1983) are within the six-year statute of limitations
(which we have found
applicable).
There is no substance to the Respondents' contention that Rule 3
should
apply to determine the start of the action. As the ALJ
recognized, the
Respondents' arguments on this issue in general completely
ignore the
plain language of section 1128A(c)(1) of the Act, which permits
the
Secretary to "initiate action under this section by serving notice
of
the action in any manner authorized by Rule 4 of the Federal Rules
of
Civil Procedure." The ALJ noted that Rule 4 governs the service
of
documents and authorizes service by mail. He concluded, based on
the
context and legislative history of section 1128A(c)(1), that the
action
here was initiated on the date of mailing of the notice. ALJ's
Decision
at 28-30. The Respondents provided no persuasive reason why we
should
conclude that the ALJ erred in determining that Rule 3 is irrelevant
to
a CMPL proceeding. In fact, application of Rule 3 would not make
sense
since it is not the I.G. who requests a hearing before an
ALJ. See 42
C.F.R. 1003.111.
Further, the preamble to the CMPL regulations states:
The notice is the functional equivalent of a
complaint and summons
in a civil proceeding, which a
defendant is required to answer to
avoid entry of a default judgment against
him.
48 Fed. Reg. 38827, 38833 (August 26, 1983); see I.G.'s Br. at 38.
Thus,
contrary to the Respondents' assertion, the I.G.'s June 7, 1989
letter did
more than merely propose a penalty. The notice is a
"proposal" only
because the Respondents had a right to request a
pre-sanction hearing.
However, absent a request for a hearing, the
penalty would become effective
upon expiration of the 30-day period set
out in the letter, similar to a
default judgment. See 42 C.F.R.
1003.110.
Accordingly, we affirm and adopt FFCL Nos. 25, 34, and 36-38.
3. The ALJ's Rulings on the admissibility of evidence in this case
did
not violate Respondents' due process rights.
The Respondents argued that the ALJ violated their due process rights
by
admitting grand jury materials (which the I.G. had submitted
after
obtaining a court order releasing the materials for use in this
CMPL
proceeding). 14/ The Respondents argued that release of the
materials
for use in an administrative hearing was not in accordance with the
law
and represented an abuse of discretion, and that all grand
jury
materials should be stricken from the record.
The ALJ rejected various challenges by the Respondents to use of
the
materials, holding that (1) there was nothing in the record to
suggest
that the I.G. had engaged in misconduct with respect to the grand
jury
process or acted improperly with respect to release of the
.materials,
and (2) there was no basis to conclude that admitting the
materials was
unfair to the Respondents. The ALJ noted that the grand
jury materials
were either photocopies of records obtained from the
Respondents
originally or transcripts of testimony of witnesses who were
available
for cross-examination at the hearing and whose prior statements
the
Respondents had ample opportunity to review. ALJ's Decision at
31-32.
We conclude that the ALJ did not err in admitting the grand
jury
materials. 15/
On appeal, the Respondents raised three points. First, the
Respondents
argued it was unfair that certain grand jury materials released
to the
I.G. were withheld from the Respondents. The Respondents said
that the
I.G. had withheld materials favorable to them. In support of
their
position, the Respondents cited to testimony by an I.G.
investigator,
which the Respondents said showed that she had selected from
the
released materials only those favorable to the I.G. Respondents'
Br. at
15, citing Tr. at 1309-10, 1319, 1406, 1509-10. An examination
of the
investigator's testimony as a whole, however, indicates that she
was
selective only so far as she selected from the documents before
the
grand jury only those related to the claims at issue in this
proceeding.
There is no basis in the cited testimony for concluding that she
did not
select relevant documents favorable to the Respondents. Her
testimony
is thus consistent with the I.G.'s assertion that the I.G. had
furnished
to the Respondents all of the material released pursuant to the
court
order. I.G.'s Br. at 19, 55. Therefore, we reject the
Respondents'
argument that released materials were unfairly withheld from
the
Respondents.
The Respondents also argued that release of grand jury materials to
the
I.G. violated Rule 6(e) of the Federal Rules of Criminal Procedure
and
the due process clause of the Fifth Amendment. Although the
Respondents
cited numerous cases on the appropriate standard for release of
grand
jury materials to federal government attorneys, none of the
cases
specifically require an ALJ to examine independently whether a court
has
properly ordered release and to exclude such documents if
improperly
released. 16/ The only sanction specified by Rule 6(e) for
improper
release is contempt of court for a knowing violation.
Moreover, the cited cases stand primarily for the proposition
that
government attorneys seeking to use grand jury materials in a
civil
proceeding must obtain a court order under Rule 6(e)(3)(C)(i), based
on
a showing of a particularized need. See United States v.
Sells
Engineering, Inc., 463 U.S. 418 (1983); Douglas Oil Co. v. Petrol
Stops
Northwest, 441 U.S. 211 (1979). Here, the I.G. (through an
Assistant
U.S. Attorney) did obtain a court order based on a showing the
District
Court found satisfactory. See Respondents' Motion to Suppress
Grand
Jury Materials (August 7, 1990), Exhibits (Exs.) A and B; see also
ALJ's
Ruling Denying Respondents' Motion to Suppress Grand Jury
Materials
(August 15, 1990). 17/ While the Respondents are correct that
release
for use in an administrative hearing under Rule 6(e)(3)(C)(i)
is
conditioned on that hearing being "preliminarily to or in
connection
with a judicial proceeding," none of the cited cases directly
addresses
the circumstances here. The district court could reasonably
have
determined that this proceeding met the basic test set out in
those
cases.
The Respondents' view that grand jury testimony may present a
one-sided
and incorrect picture since the witnesses are not subject
to
confrontation and cross-examination is supported by citation to
United
States v. Young, 494 F. Supp. 57, 64 (E.D. Tex. 1980). The court's
point
in Young, however, was that this lack of fairness in the grand
jury
process is a reason for protecting the grand jury process from
abuse.
As the ALJ found, there is no evidence of abuse of process by the
I.G.
here. Moreover, the witnesses whose testimony was released were
all
present at the ALJ hearing and subject to confrontation
and
cross-examination, so any possible unfairness to the Respondents in
the
grand jury process was remedied. Thus, we reject the
Respondents'
argument that use of the grand jury materials violated due
process.
The Respondents also challenged use of the grand jury materials
as
contrary to agency policy, relying on a statement in a Health
Care
Financing Administration (HCFA) 18/ Regional Office Manual on
using
grand jury materials as a basis for administrative action.
See
Respondents' Br. at 19, citing Regional Office Manual of HCFA, Part
2
Medicare, HCFA Publication 23-2, section 4290. This reliance
is
misplaced. Assuming the manual applies to the I.G. (which is
not
clear), the manual simply states a general policy intended to avoid
any
action which might "prejudice any subsequent criminal
prosecution
activity and violate Rule 6." The manual appears to
recognize an
exception where a separate, secondary investigation is
impossible. In
any event, the prosecution activity was completed here,
and the I.G.
took steps to comply with Rule 6 by obtaining a court order for
release
of the materials.
In sum, we conclude that the ALJ did not err in admitting the grand
jury
materials. We note, moreover, that even if the grand jury
materials
were stricken from the record, we would still uphold the penalty
here.
The grand jury materials were cited for findings on relatively few
of
the 271 counts at issue here and, for the most part, are
simply
cumulative of other evidence in the record supporting the
findings.
4. The ALJ's denial of Respondents' motion to postpone the hearing
was
not unfair to the Respondents.
The issues raised by the Respondents here are whether the ALJ's refusal
to
postpone the hearing to accommodate Dr. Petrus' alleged poor health
was
unfair, and whether the ALJ was biased against the Respondents.
A. Dr. Petrus' physical condition
On March 14, 1990, the Respondents asked that the hearing before the
ALJ,
scheduled to start on March 19th, be postponed indefinitely, among
other
reasons, "to allow the Respondent time for his aggravated medical
disability
to subside." Accompanying the Respondents' Motion was a
letter from a
Dr. Ross who indicated that Dr. Petrus was suffering
complications from a
back injury. Dr. Ross requested that the hearing
be postponed for at
least two weeks. See Respondents' March 14, 1990
Motion.
On March 15, 1990, the ALJ denied the Respondents' Motion,
without
prejudice, ruling that there was not sufficient information available
to
him to assess the merits of the Motion. The ALJ directed Dr. Petrus
to
produce Dr. Ross, or the physician of his choice, at the start of
the
hearing to testify under oath and be cross-examined concerning
Dr.
Petrus' condition. Additionally, the ALJ directed Dr. Petrus to
produce
treatment records relevant to his condition at that time. The
ALJ also
gave the I.G. the option to have Dr. Petrus examined by a
physician
after notice to Dr. Petrus. The ALJ determined that the
I.G.'s
physician would also be subject to cross-examination. The ALJ
notified
Dr. Petrus that failure to comply with the guidelines established by
his
Ruling would result in the ALJ refusing to entertain a request
to
postpone the hearing. See ALJ's March 15, 1990 Ruling.
On the first day of the hearing (March 19th) the Respondents renewed
their
Motion, but did not produce Dr. Ross, or any physician, to
testify.
Instead, the Respondents asserted that Dr. Ross "could appear
later."
Tr. at 16. In anticipation of Dr. Ross' testimony, Dr. Petrus
was
examined by the I.G.'s physician, Dr. Turpin. At the start of
the
hearing's second day Dr. Petrus notified the ALJ that he would
not
produce Dr. Ross to testify. At that point, the ALJ denied
the
Respondents' Motion and ordered the hearing to continue. ALJ's
Decision
at 33.
.The Respondents argued that they were prejudiced by the ALJ's
"callous
disregard" of Dr. Petrus' physical limitations. They contended
that Dr.
Petrus had "documented disabilities" which hindered his ability
to
function effectively during the hearing. The Respondents alleged
that
the ALJ placed "excessive demands on Dr. Petrus and criticized
him
throughout the hearing for not maintaining the same pace as the
I.G.
staff." The Respondents noted that Dr. Petrus appeared pro se
and
alleged that they were "always" overruled by the ALJ, while the
ALJ
"catered to" the I.G. The Respondents maintained that the ALJ
acted
unfairly in refusing to compel the I.G. to provide them with a copy
of
Dr. Turpin's report on Dr. Petrus since, they alleged, that
report
recommended frequent rest for Dr. Petrus during the
hearing.
Respondents' Br. at 20-21.
There is no merit to the Respondents' argument that the ALJ abused
Dr.
Petrus' physical limitations. The ALJ established clear and
reasonable
guidelines under which he would consider the Respondents' Motion
to
Postpone. Rather than acting in a manner which would demonstrate to
the
ALJ that there was substance to the Motion, Dr. Petrus acted in a
manner
indicating just the opposite. The Respondents' contentions
before this
Panel are no more credible.
The Respondents claimed that their case was somehow damaged by
their
inability to obtain Dr. Turpin's report (which they nevertheless
managed
to cite as support for their position that the ALJ abused Dr.
Petrus'
physical limitations). This assertion is baseless. The
Respondents made
an unsupported Motion regarding Dr. Petrus' condition.
The ALJ
reasonably refused to issue a final ruling on the Motion absent
relevant
medical testimony. The sole purpose for Dr. Turpin's
examination and
report on Dr. Petrus' condition was to provide a basis for
the I.G.'s
response to an issue (Dr. Petrus' health) raised by the
Respondents.
The ALJ did not need to consider this issue further when it
became clear
that the Respondents would not attempt to substantiate the
allegations
serving as the basis of the Motion. Dr. Petrus' refusal to
comply with
the ALJ's guidelines resulted in dismissal of the Motion to
Postpone
before consideration of any medical opinion as to his condition
was
necessary. Thus, the ALJ reasonably denied the Respondents access
to
Dr. Turpin's medical report.
.Moreover, Dr. Petrus' actions during the hearing further undercut
the
credibility of his arguments regarding his physical condition.
Both
before and again on the first day of the hearing, Dr. Petrus moved for
a
postponement based on his alleged physical impairments. However, at
the
close of that first day's proceedings, Dr. Petrus informed the ALJ
that
he would "not be able to be here tomorrow morning." Tr. at
172. Dr.
Petrus then informed the ALJ that he was scheduled to be in
county court
to answer interrogatories in a civil action. Id. at
172-177. On the
second day of the hearing, when pressed by the ALJ to
explain his
actions, Dr. Petrus indicated that he had been aware of the
impending
court date for some two and one-half months, but had simply
forgotten
about it. Id. at 185-188.
We find no support for the Respondents' assertion that the ALJ
conducted
the hearing at a pace ill-suited for Dr. Petrus' condition.
Dr. Petrus
failed to substantiate his allegation of a medical disability so
there
is no basis for finding that his physical condition hindered
his
performance at the hearing. We find the ALJ's general description
of
the hearing schedule as not unduly taxing to be accurate. See
ALJ's
Decision at 33, n.5. Further, even assuming that the Respondents
were
correct that the ALJ "always" overruled them (which the transcript
shows
was not so), the mere overruling of a party does not constitute an
abuse
of medical disability, nor (as we discuss next) is it sufficient
to
support a claim of bias.
B. The Respondents' allegation of bias
The Respondents' allegation that the ALJ was biased also lacks merit.
The law has long been well-settled that, in order to disqualify a
judge,
bias must stem from an extrajudicial source. The Supreme Court
has held
that:
The alleged bias and prejudice to be disqualifying
must stem from
an extrajudicial source and result in
an opinion on the merits on
some basis other than what the judge learned from
his participation in
the case . . . .
United States v. Grinnell Corp., 384 U.S. 563, 583 (1966); see also
Tynan
v. United States, 376 F. 2d 761 (D.C. Cir. 1967), cert. denied,
389 U.S. 845
(1967); Duffield v. Charleston Area Medical Center, 503
F.2d 512, 517
(4th Cir. 1974).
In their exceptions, the Respondents simply stated that they had moved
on
two occasions for the ALJ to recuse himself from the hearing "due to
his
demeanor and obvious lack of objectivity." The Respondents
asserted
that their request "was supported by the comments made by the ALJ
in
notes passed between himself and his assistant." Respondents' Br.
at
21. The Respondents never even contended that the ALJ was
biased
against them because of some extrajudicial source. In fact,
the
Respondents, except for the notes to be discussed, did not make
specific
reference to the circumstances in which their motions were made,
or
otherwise set out a particular basis for their claim.
In his decision, the ALJ did address the circumstances of the
Respondents'
motions for recusal. He noted that the motions were based
on rulings
concerning admission of evidence and motions that the ALJ
postpone the
hearing. ALJ's Decision at 32-34. 19/
Neither ruling by the ALJ meets the requirement of an extrajudicial
source
for showing bias. See Ex parte American Steel Barrel Co. and
Seaman,
230 U.S. 35 (1913); In Re International Business Machine Corp.,
618 F.2d 923,
929 (2d Cir. 1980); see also Annotation, Disqualification
of Federal Judge, 2
A.L.R. Fed. 917 at 927 (1969), noting: "It has been
uniformly held or
recognized in civil proceedings that adverse rulings
made by the judge in the
case or proceeding itself do not constitute a
sufficient basis for his
disqualification under the statute [pertaining
to disqualifications of
federal judges]."
However, the Respondents did, as part of their bias exceptions,
submit
certain notes generated during the hearing by the ALJ and his
assistant.
See Respondents' Ex. D (accompanying their exceptions). The
ALJ elected
to treat the Respondents' assertion of bias, in their exceptions,
as a
motion that he disqualify himself and rescind his decision. See
ALJ's
Ruling Denying Respondents' Motion That I Disqualify Myself
(November
8, 1990). The notes in question were written by the ALJ and
.his
assistant during the hearing. Dr. Petrus retrieved the notes from
a
wastebasket on the judge's dais and reconstructed them. Id. at 2.
In spite of the fact that Dr. Petrus retrieved the notes from the
trash
during the hearing, he did not use them as the basis for an
objection
during that proceeding (although the Respondents' exceptions
imply
otherwise). As the ALJ indicated, the Respondents first mentioned
the
notes in their exceptions. Even then, the Respondents held back
some of
the notes, choosing to submit them with a reply to the ALJ's November
8,
1990 Ruling. 20/
It is hardly necessary to say that the writing of these notes, which
in
some ways are critical of Dr. Petrus, was unwise. But to find bias
and
to upset an extensive hearing on their basis is an entirely
different
matter. As was said of certain allegedly intemperate and
derisive
remarks directed at counsel by an ALJ in NLRB v. Honaker Mills,
Division
of Top Form Mills, Inc., 789 F.2d 262, 266 (4th Cir. 1986), the
notes
were "at least innocuous, and at most injudicious. They do not
rise to
the level necessary to support the serious charge of judicial bias .
. .
."
The most that can be said of these notes is that they expressed a sense
of
frustration by the ALJ with the progress of the hearing. In
his
decision the ALJ, referring to the Respondents' motions for
recusal,
repeats his basis for denying the motions. He stated that it
was
apparent to him at the hearing that many of the Respondents'
motions
were frivolous and dilatory. He noted that the Respondents'
tactics
included repetitive filing of essentially the same motions.
However, he
asserted that his opinions as to Dr. Petrus' conduct of the
case or his
demeanor at the hearing had no bearing on his assessment of the
evidence
or his decision as to the remedy. See ALJ's Decision at 34,
n.6.
A reading of the record suggests that Dr. Petrus' actions before
and
during the hearing may have contributed to the ALJ's sense
of
frustration. Regardless, it is clear that the note-writing
episodes
were not the result of anything outside the hearing which could
possibly
support a finding that the ALJ was biased against the
Respondents.
Nothing in the notes can reasonably be said to show that
.any
extrajudicial source, something outside of the proceeding itself,
was
having the effect on the ALJ of biasing him against the
Respondents.
Nowhere in the exceptions is there even any implication of an
allegation
by the Respondents that an extrajudicial source caused the ALJ to
be
biased against them.
In the regulatory provisions pertaining to the authority of the ALJ,
the
only reference to an ALJ's conduct provides that the ALJ "will conduct
a
fair hearing." 42 C.F.R. 1OO3.115(a). The
Respondents' allegations
do not show that the hearing was unfair in any
way. Rather, a careful
examination of the hearing transcript, as well
as the entire record
before the ALJ, shows that the ALJ was fully cognizant
of Dr. Petrus'
pro se status and made every effort to ensure that the
Respondents
received a full and fair opportunity to present their case.
Moreover, the ALJ made several major rulings which went in
the
Respondents' favor. The penalties and assessments imposed by the
ALJ
($180,000) were far less than the amount ($374,310) originally sought
by
the I.G. The ALJ issued a ruling denying the I.G.'s request to
this
Board's Civil Remedies Division for data relative to the costs
incurred
in bringing this case to a hearing and an estimate of costs incurred
in
rendering an initial decision. See ALJ's Ruling (June 21,
1990).
Additionally, the ALJ refused to allow the I.G. to supplement the
record
with specific information regarding the I.G.'s costs in prosecuting
this
case. ALJ's Decision at 45, n.15. The ALJ also dismissed the
I.G.'s
exceptions as untimely filed. These rulings undercut the
Respondents'
allegation of bias.
There is nothing in the record of this case which can reasonably be
found
to support the Respondents' allegation that the ALJ was biased
against
them.
5. Respondents presented or caused to be presented claims for items
or
services in violation of section 1128A of the Act.
The two principal FFCLs at issue here are--
29. Respondent Eye Center presented all 271 of
the claims at
issue.
30. Respondent Petrus caused all 271 of the
claims at issue to be
presented.
ALJ's Decision at 5.
This case involved Medicare and/or Medicaid claims for services
provided
between May 12, 1983 and January 21, 1984. The ALJ determined
that the
claims sought reimbursement for 271 items or services (counts)
provided
by Dr. Petrus or at his direction during a period when he was
suspended
from Medicare or Medicaid. The ALJ also found that 174 of the
271
counts falsely represented the name of the physician who provided
or
directed provision of the items or services claimed. ALJ's Decision
at
34. The substance of the ALJ's analysis on this issue is set out
below.
The ALJ found that the Respondents' actions relative to the 271
counts
were aimed at circumventing the effects of Dr. Petrus'
suspension. As
part of the Respondents' scheme, the ALJ found, Dr.
Petrus employed two
ophthalmologists (Drs. Malsky and Baer) between June 1983
and January
1984 but did not inform either doctor that he was suspended
from
Medicare and Medicaid. Upon gaining access to Dr.
Malsky's
Medicare/Medicaid provider number, the Eye Center resubmitted
previously
rejected claims for services Dr. Petrus had provided while
suspended but
prior to Dr. Malsky's employment. The resubmitted claims
identified Dr.
Malsky as the provider of the service. Dr. Petrus
instructed his
employees to submit claims for services which he provided,
identifying
either Dr. Malsky or Dr. Baer as the provider. Id. at
35-36.
The ALJ rejected the Respondents' contentions that the "false claims"
were
the result of negligence or clerical errors by the Eye Center
staff.
Rather, the ALJ found that the evidence overwhelmingly supported
a finding
that these claims were submitted as part of the Respondents'
scheme to
defraud Medicare and Medicaid. Additionally, the ALJ found
that Dr.
Petrus' 1985 guilty plea constituted an admission to the I.G.'s
charges that
the Respondents defrauded Medicare and Medicaid. Id. at
37-38.
In addressing specific aspects of the Act, the ALJ found that
section
1128A(a)(1)(D) makes it unlawful for a party to present or cause to
be
presented claims for items or services furnished during a period when
a
person is excluded from participation in Medicare or Medicaid. 21/
The
ALJ interpreted this section to embody a standard of strict
liability
regarding violations. The ALJ found the evidence supported
a
determination that Dr. Petrus, by directing the Eye Center to
present
these claims, caused the claims to be presented. Id. at
39-40.
The ALJ noted that section 1128A(a)(1)(A) makes it unlawful for a party
to
present or cause to be presented claims for items or services where a
party
knows or should know that the items or services were not provided
as claimed.
22/ Under the "knows" standard of liability the ALJ
indicated that it
was not necessary for Dr. Petrus to personally submit
a false claim.
Addressing the 174 claims which falsely represented that
either Dr. Malsky or
Dr. Baer provided items or services for which
reimbursement was claimed, the
ALJ found that Dr. Petrus instructed the
Eye Center staff to attribute items
or services to the other doctors in
circumstances where he knew that those
physicians could not have
provided them. The ALJ noted that the Eye
Center was as culpable as Dr.
Petrus in that the Eye Center was entirely
owned and directed by him.
Id. at 40-41.
The ALJ indicated that the "reason to know" standard contained in the
Act
prior to December 22, 1987 imposed a duty on a provider to prevent
submission
of false claims .where: (1) the provider had sufficient
information to
place him on notice that the claims were for items or
services not provided
as claimed, or (2) there were pre-existing duties
requiring a provider to
verify the truth, accuracy and completeness of
claims. The ALJ found that
Respondents knew that Dr. Petrus'
instructions to the Eye Center staff would
inevitably lead to the
presentation of false claims. Thus, the ALJ
concluded, the Respondents
had information placing them, as medical
providers, on notice that 174
items or services were not provided as
claimed. Id. at 42.
The ALJ identified "should know" as the broadest standard of
liability
under the Act. The ALJ determined that this standard subsumed a
reckless
disregard for the consequences of a person's acts. It
includes
situations where a respondent has reason to know that the items
or
services were not provided as claimed, as well as negligence
in
preparing and submitting claims or directing their preparation
and
submission. The ALJ determined that since the Respondents had
reason to
know the claims were false, they also should have known they were
false.
Finally, the ALJ concluded that even if the evidence were viewed in
a
light most favorable to the Respondents, their "cavalier indifference
to
the truthfulness of their claims" exceeded ordinary negligence.
Id.
The Respondents offered a wide variety of arguments to show that the
ALJ's
findings on this issue were in error. Generally, the
Respondents
asserted: (A) that the items or services in issue were
provided as
claimed; (B) that the Eye Center was not suspended (this argument
was
further delineated into several sub-arguments where the
Respondents
attacked Dr. Petrus' 1983 suspension, alleged that his 1984
indictment
was vindictive, and maintained that there had been no violation of
the
Medicare/Medicaid Fraud Statutes), and that all the claims which
it
submitted were thus eligible for federal reimbursement; and (C) that
the
I.G. failed to prove liability under the CMPL.
A. Respondents' assertion that claims for items or services
were
provided as claimed
The focus of this aspect of the Respondents' argument was on the fact
that
the services for which Medicare and/or Medicaid reimbursement was
sought were
actually provided to the patients. The Respondents noted
the I.G.'s
concession, before the ALJ, that there was no .evidence
suggesting that the
Respondents billed for services not in fact
provided. The Respondents
argued that, absent a statutory or regulatory
definition of the term, "not
provided" must be given its ordinary
meaning, i.e., not furnished or
supplied. The Respondents asserted that
misrepresentations have
significance in reference to CMPL violations
only when the item or service
was not provided. Thus, the Respondents
sought to distinguish their
situation from earlier cases relied upon by
the ALJ involving situations
where less expensive items or services were
provided while reimbursement
claims for costlier items or services were
submitted. 23/ Respondents'
Br. at 22-24.
We first note that, even if the Respondents' analysis were correct
(which
it is not), it would not provide a basis for reversing the
ALJ's
Decision. That decision found the Respondents liable both under
section
1128A(a)(1)(D) and, with respect to some of the counts, under
section
1128A(a)(1)(A). The Respondents' arguments pertain only to the
language
of the latter section. Those arguments lack merit for the
following
reasons.
The I.G. proved by a preponderance of the evidence that the claims
falsely
stated which physician provided the services in order to obtain
payment for
services in fact provided by an individual suspended from
Medicare and
Medicaid participation. Dr. Petrus' suspension precluded
any payment
for services furnished by him. See section 1862(e) of the
Act; 42
C.F.R. Part 420, subparts A and B (1982); 42 C.F.R.
455.212(d)(1)
(1982). Thus, by misrepresenting who had provided the
services, the
Respondents were misrepresenting a fact material to
determining the validity
of the claims.
If a service is not, in fact, provided by the physician identified on
the
claim form as the provider of the service, then the service is "not
provided
as claimed" within the plain meaning of section 1128A(a)(1)(A).
The
Respondents' arguments focus solely on the wording "not provided"
and ignore
the qualifying language "as claimed." The Respondents'
reading makes no
sense in the context of the Medicare and Medicaid
programs, which .authorize
payment only for particular services meeting
specified requirements,
including that the provider of services is an
eligible provider and is not
suspended from participating in the
programs. Since identification of
the provider is integral to a claim,
the ALJ correctly concluded that the 174
items or services which
misidentified the provider were "not provided as
claimed."
B. Respondents' assertion that the Eye Center of Austin was
never
suspended
The Respondents asserted that since the Eye Center was never
suspended,
any claims submitted by it during the period of suspension were
valid.
The Respondents sought to support this argument by attacking Dr.
Petrus'
1983 suspension from Medicare and Medicaid on double jeopardy
grounds,
by arguing that Dr. Petrus' 1984 indictment for Medicare and
Medicaid
fraud was vindictive, and by alleging that there were, in fact,
no
violations of the Medicare/Medicaid Fraud Statutes. Respondents' Br.
at
24-31. As explained more fully below, these arguments are
largely
irrelevant and, in some instances, completely outside the scope of
our
review authority.
Dr. Petrus stipulated that, for the period in issue here, he was the
sole
owner and operator of the Eye Center and the sole member of the
professional
association known as the Eye Center. Tr. at 453. The June
10,
1982 notice of suspension notified Dr. Petrus that no federal
payment
would be made for any item or service provided by him directly
or as an
employee of a provider. I.G. Ex. 100 at 2. The Medicare
statute
and the Medicare and Medicaid regulations in effect at that time
also gave
notice that the effect of a suspension was that no payment
would be made for
services furnished by Dr. Petrus. Section 1862(e) of
the Act; 42
C.F.R. 420.112(b), 455.212(d) (1982); 42 C.F.R. 420.2 (1982)
(definition of
"furnished" as meaning provided directly by or under the
direct supervision
of); 42 C.F.R. 420.126, 455.213 (1983). Thus, it is
irrelevant that the
Eye Center was not named in the suspension notice as
payment for services
furnished by Dr. Petrus was barred, irrespective of
whether the claims were
presented by him or by the Eye Center.
We also conclude that the ALJ did not err in ruling that Dr. Petrus
could
not properly challenge his 1983 suspension as part of this
proceeding.
Dr. Petrus challenged that suspension before the ALJ.
Rejecting .Dr. Petrus'
arguments, the ALJ noted that section 1128 of the
Act contained "specific
procedures for appealing a suspension and
Respondents' only potential route
of administrative relief from the 1983
suspension would have been pursuant to
those procedures." See Ruling on
Respondents' Motions (February 6,
1990). Moreover, it is worthwhile to
note that the agreement
implementing that suspension was negotiated, in
part, by counsel for Dr.
Petrus and was intended as a "full . . . and
final settlement of all . . .
causes of action . . ." emanating from
those facts on which the suspension
was based. See I.G. Ex. 102 at 9.
The Respondents' assertion that Dr. Petrus' 1984 indictment on
federal
Medicare/Medicaid fraud and obstruction of justice charges
was
vindictive, baseless, and constituted a violation of due process
is
based on allegations about the I.G.'s investigators' activities
which
are unsupported by the cited testimony, when that testimony
is
considered in context, or which are insufficient to call the
indictment
into question. See Respondents' Br. at 28-30. Even if
the 1984
indictment was flawed as the Respondents alleged, however, that
would
make no difference here since there is independent evidence in
the
record to support the ALJ's findings on all 271 claims at issue and
on
the activities underlying the obstruction of justice charge. See
ALJ's
Decision at 40, n.12; FFCLs No. 181-193. 24/
.C. Respondents' assertion that the I.G. failed to prove
liability
under the CMPL
The Respondents argued that the I.G. failed to demonstrate that
the
Respondents knew that an employee of the Eye Center was
submitting
claims for services with the wrong provider number. The
Respondents
maintained that the Act expressly limited Dr. Petrus'
liability, as the
principal, to those instances where he could be found to
have known or
to have had reason to know that the claims were improper.
They
contended that the CMPL precludes application of the doctrine
of
vicarious liability but, rather, required proof of malfeasance
or
misfeasance by Dr. Petrus. Respondents' Br. at 32.
The Respondents asserted that the claims in question were submitted,
or
resubmitted with a new provider number after having been rejected
for
payment under Dr. Petrus' provider number, without Dr. Petrus'
knowledge
and, therefore, liability could not be imposed against him.
Rather, the
Respondents contended, it was Dr. Malsky and Dr. Baer who
had "reason
to know" if any claims for services were not provided as claimed.
The
Respondents also alleged that the I.G.'s investigator knew that
Dr.
Petrus had not been informed of his suspension until June 1983
and
consequently tailored her investigation to portray him in the
worst
possible light to enhance his criminal prosecution. In support of
their
assertions, the Respondents listed alleged facts which, they said,
were
established by the hearing testimony. Id. at 32-33.
We first note that, even if the I.G. had failed to prove that
the
Respondents "knew" that claims with the wrong provider number were
being
submitted, we would not reverse the ALJ's Decision. That decision
was
also based on two alternative grounds: (1) that the Respondents
were
liable under section 1128A(a)(1)(D) of the Act (under a standard
of
strict liability, not requiring knowledge); and (2) that the
Respondents
were liable under section 1128A(a)(1)(A) under both the "reason
to know"
and "should know" standards.
In any event, we reject the Respondents' argument that the I.G. failed
to
prove by a preponderance of the evidence that the Respondents knew
that 174
of the claims were submitted with the wrong provider number.
The ALJ, in
determining that the I.G. had met its burden of proof to
show that the
Respondents knew, carefully considered the evidence
presented by the I.G. and
found it to be credible and uncontradicted.
ALJ's Decision at
40-41. The Respondents did not provide any specific
citation .to
the hearing transcript in support of their various
allegations on this
issue. Moreover, most of these allegations are
simply irrelevant to the
issue or treat as "facts" assertions
specifically rejected by the ALJ.
For example, the Respondents alleged that they were not notified of
the
effective date of Dr. Petrus' suspension until June 1983.
See
Respondents' Br. at 32. The Respondents have presented this
argument,
generally without supporting evidence, since the onset of this
case
before the ALJ. 25/ See Respondents' Motion to Dismiss for Lack
of
Jurisdiction (November 1, 1989) at 9; Respondents' Motion
for
Declaratory Order (November 1, 1989) at 6. However, Dr.
Petrus'
knowledge of the effective date of the suspension is irrelevant to
the
finding that he knew 174 claims were submitted with the wrong
provider
number. Moreover, the ALJ found only that "Respondent Petrus
knew that
the suspension became effective May 12, 1983." FFCL No.
196. This
finding was based on the May 31, 1983 Order of Dismissal by
the ALJ who
had been assigned to the suspension hearing and on a March 29,
1983
letter from Dr. Petrus' lawyer after he had reviewed the ALJ's
proposed
order, without objection. I.G. Ex. 105 at 1, 4. It can
reasonably be
inferred from these documents that Dr. Petrus knew the
effective date at
least by June 8, 1983, the earliest date on which any of
the claims at
issue was presented. In any event, the Respondents did
not cite to any
authority which requires the I.G. to have established exactly
when Dr.
Petrus became aware of the effective date of his suspension in order
to
prove liability under either section 1128A(a)(1)(A), or
section
1128A(a)(1)(D) of the Act.
Accordingly, we reject the Respondents' argument that the I.G. failed
to
prove liability.
6. The assessments and penalties imposed in this case do not
violate
due process.
The Act and implementing regulations provide that a penalty of up
to
$2,000 for each item or service presented in violation of the Act and
an
assessment of not more than twice the amount claimed may be imposed on
a
respondent. See section 1128A(a) of the Act; 42 C.F.R. 1003.103
and
1003.104. Thus, based upon 271 claims for $40,000, the
Respondents
faced maximum penalties of $542,000 and assessments of
$80,000.
The ALJ imposed $100,000 in penalties and $80,000 in assessments, to
which
the Respondents took exception. 26/ Generally, the Respondents
asserted
that no remedial purpose was served by the penalties and
assessments imposed
against them. They contended that there was no
financial loss to the
government since the patients received the
services for which payment was
made, that there were no costs of
investigation proven by the I.G., and that
any question of deterrence is
academic since they have been suspended for 25
years. Respondents' Br.
at 33.
The Respondents then broke down their general arguments into
several
sub-arguments which we address below in the order in which they
were
presented.
A. Respondents' assertion that the I.G. has a "bounty system"
which
violates due process
The question of whether the I.G. employed an alleged bounty system
and
thereby violated the Respondents' due process rights was first
raised
before the ALJ in a Motion by the Respondents dated October 3,
1990.
The ALJ considered and rejected the Respondents' arguments. See
Ruling
Denying Respondents' Motion to Dismiss for Due Process
Violation
(October 9, 1990) (hereafter ALJ's Ruling (October 9, 1990)) at
1-2.
Respondents' current argument is a reiteration of that Motion.
The Respondents' position was based on Melashenko v. Bowen,
No.
CV-F-87-533 (E.D. Cal. June 19, 1990). There the court found
that,
since one of the decision-makers .in Melashenko's pre-exclusion
hearing
before the I.G. had a pecuniary interest in the matter (he was
eligible
to receive merit pay bonuses based on the number of sanctions
he
imposed), Melashenko's due process rights had been violated.
This
allegation was addressed by the ALJ, who distinguished Malashenko
based
on the facts and on differences between the exclusion process at
issue
there and the CMPL process here. The ALJ noted that in a CMPL case
where
a hearing is requested, the administrative law judge is
the
decisionmaker and that an administrative law judge is not
compensated
pursuant to a merit pay system and does not receive additional
pay based
on performance. ALJ's Ruling (October 9, 1990) at 2-3.
The Respondents
did not point to an error in the ALJ's analysis.
Additionally, the Respondents argued that the Secretary's delegation
of
authority to the I.G. to investigate and prosecute a case was
an
unlawful delegation of program operating authority. The ALJ noted
that
the Respondents' argument was identical to that presented and
rejected
in Anesthesiologists, supra. The ALJ recognized that the
Respondents
were asking him to adjudicate the lawfulness of the
Secretary's
delegation of authority to the I.G. As the ALJ correctly
noted, such
adjudication would directly contravene the proscription at 42
C.F.R.
1003.115(c) against administrative law judges deciding on the
validity
of federal regulations. ALJ's Ruling (October 9, 1990) at
1-2.
The Respondents did not present any argument which would cause us
to
reconsider the ALJ's Ruling. Accordingly, we reject the
Respondents'
argument on this point and, in doing so, affirm the ALJ's Ruling
on this
issue.
B. Respondents' assertion that since no damages were established by
the
I.G., the assessment against them was inappropriate
The Respondents asserted here, and before the ALJ, that no damages
were
established by the I.G. and, therefore, the assessment against them
was
inappropriate.
The statutory maximum for an assessment is "in lieu of damages."
Section
1128A(a) of the Act. As the preamble to the CMPL regulations
published
in 1983 stated, Congress clearly intended to obviate the need
for the
Government to prove the amount of damages in order to make
an
assessment. 48 Fed. Reg. 38830 (August 26, 1983). The
Secretary,
however, has the discretion to .consider the amount of actual
damages,
where they can be readily calculated, in arriving at a
proper
assessment. Id.
The ALJ found that the Respondents unlawfully claimed more than
$40,000
from Medicare and Medicaid. While noting that the I.G. did not
prove
the exact amounts actually paid as the result of these claims, the
ALJ
found that the Respondents nevertheless obtained
substantial
reimbursement to which they were not entitled. The ALJ
considered the
most egregious aspect of the Respondents' actions to be the
"utter
contempt" which they evidenced for the integrity of the Medicare
and
Medicaid programs. ALJ's Decision at 44-45.
The Respondents' position that there were no damages to the Medicare
or
Medicaid programs is based on the erroneous assumption that,
since
services were actually provided, neither program was harmed.
This
ignores the fact, however, that neither Medicare nor Medicaid had
an
obligation to pay for services provided by Dr. Petrus while he
was
suspended. Moreover, we agree with the ALJ that the
Respondents'
misconduct caused "inchoate" damage to the programs. The
Respondents
schemed to neutralize mechanisms established to protect
program
integrity and manifested utter contempt for these mechanisms and for
the
individuals charged with administering and enforcing them.
Accordingly, we sustain the assessments of $80,000, jointly and
severally,
against the Respondents.
C. Respondents' assertion that the penalties imposed against them
were
improper
The Respondents argued that since Dr. Petrus had already been punished
for
any alleged violation, the additional penalty imposed by the ALJ
violated the
Double Jeopardy Clause of the Fifth Amendment. 27/ The
Respondents also
contended that the Eye Center was a corporation with a
separate identity and
that none of the disputed claims were submitted in
Dr. Petrus' name.
Thus, they reasoned, since the I.G. never presented
or proved an "alter ego"
basis for liability, the ALJ incorrectly
imposed joint and several liability
against them. Additionally, the
.Respondents attacked the ALJ's Order
(February 6, 1990) granting
partial summary judgment against Dr. Petrus with
regard to six claims
for items or services. The Order was based on Dr.
Petrus' 1985 guilty
plea to Medicare and Medicaid fraud charges and the
doctrine of
collateral estoppel. The Respondents argued that the ALJ's
Order was
erroneous since only Dr. Petrus pled guilty to those charges and
this
action involved both Dr. Petrus and the Eye Center. Respondents'
Br. at
35-36.
There is no merit to the Respondents' assertion that joint and
several
liability was improper. The Respondents' argument completely
ignores
the fact that the Respondents had stipulated that Dr. Petrus was
the
sole owner and operator of the Eye Center during the period covered
by
the claims at issue. Tr. at 453. Thus, there was no need for
the I.G.
to assert or prove an alter ego basis for liability. Moreover,
even if
the Eye Center was not an alter ego of Dr. Petrus, the ALJ found,
and
the Respondents did not specifically deny, that Dr. Petrus "caused"
the
claims to be presented within the meaning of section 1128A(a).
The Respondents' attack on the ALJ's decision to grant partial
summary
judgment based on collateral estoppel is equally unconvincing.
The
doctrine of collateral estoppel provides that once an issue is
actually
and necessarily determined by a court of competent jurisdiction,
that
determination is conclusive in subsequent suits based on a
different
cause of action involving a party to the prior litigation.
Montana v.
United States, 440 U.S. 147, 153 (1979). The Court noted
that,
precluding "parties from contesting matters that they have had a
full
and fair opportunity to litigate protects their adversaries from the .
.
. vexation attending multiple lawsuits, . . . and fosters reliance
on
judicial action . . . ." The Court found that these interests
were
similarly implicated when nonparties assume control over litigation
in
which they have a direct financial interest and then seek to
relitigate
issues previously resolved. Id. at 153-154.
Thus, contrary to the Respondents' assertion, collateral estoppel does
not
necessarily require a prior judgment between the same parties.
Rather, the
critical focus is on the identity of the issues involved.
See Ashe v.
Swenson, 397 U.S. 436 (1970). Moreover, the regulation
relied on by the
ALJ in his Order directly addresses .these
circumstances. Specifically,
42 C.F.R. 1003.114(c) provides:
Where a final determination that the respondent
presented or caused
to be presented a claim or
request falling within the scope of [42
C.F.R.] 1003.102 has been rendered in
any proceeding in which the
respondent was a party and had an opportunity to
be heard, the
respondent shall be bound by such determination in any
proceeding under
this part. 28/
Obviously, Dr. Petrus was a party to both proceedings. In fact, on
the
basis of his stipulation, it would be fair to say that there is
no
practical difference between Dr. Petrus and the Eye Center for
purposes
of this proceeding. In light of the applicable statutory,
regulatory,
and case law, we conclude that the ALJ did not err in his
February 6,
1990 Order entering partial summary disposition against Dr.
Petrus.
Moreover, even if we reversed that Order, we would not reverse the
ALJ's
Decision since it contains independent findings on the six
counts
covered by the Order.
In sum, the Respondents' arguments do not persuade us that the
ALJ's
imposition of joint and several liability against them was wrong.
We
note that the $100,000 penalties imposed against the
Respondents
represented a reduction of $193,500 from the amount originally
sought by
the I.G. In arriving at a final figure, the I.G. noted the
Respondents'
contempt for the Medicare and Medicaid programs. The ALJ
concluded that
Dr. Petrus' actions during the hearing and the content of
the
Respondents' post-hearing brief evidenced that the Respondents'
contempt
remained unabated.
However, while recognizing that the Respondents' conduct would, in
his
opinion, justify imposition of the maximum available penalties, the
ALJ
also considered the Act's remedial purpose. The ALJ noted that
Dr.
Petrus had been sentenced to prison based on his criminal
fraud
conviction related to certain claims at issue in this
case.
Additionally, Dr. Petrus was suspended from participation in
Medicare
and Medicaid for 25 years. In view of these facts, the ALJ
determined
that penalties totalling $100,000 were reasonable.
Accordingly, we reject the Respondents' arguments and affirm imposition
of
$100,000 in penalties jointly and severally against the Respondents.
7. The CMPL action against Dr. Petrus does not violate the
Double
Jeopardy Clause of the Fifth Amendment.
The Respondents asserted that application of this civil penalty
(which
they characterize as punitive), after a criminal conviction based
upon
the same conduct, violates the Double Jeopardy Clause of the
Fifth
Amendment under the Supreme Court's holding in Halper, supra.
In
support of this position, the Respondents argued that Dr. Petrus'
1985
plea agreement covered all claims upon which the I.G. relied in
this
case, and thus precluded this CMPL action. The Respondents
also
reiterated their claim that the Medicare and Medicaid programs
suffered
no damages since the services were provided as claimed.
See
Respondents' Br. at 36-41. As explained below, we conclude that the
ALJ
properly rejected the Respondents' reliance on Halper in this case.
Halper was convicted in federal court of submitting 65 false
Medicare
claims resulting in an overclaim of $585. Halper was sentenced
to two
years in prison and fined $5,000. Relying on the same facts,
the
Government then obtained judgment against Halper in district court
under
the civil False Claims Act, 31 U.S.C. 3729 et seq. While noting
that
the False Claims Act provided a civil remedy, the district court
found
that a potential recovery of more than $130,000 ($2,000 liability x
65
claims) bore no rational relation to the Government's actual loss
and
costs. The court found that, as applied to Halper, the
penalty
provision of the False Claims Act violated the constitutional
protection
against double jeopardy. Halper at 437-440.
On review, the Supreme Court indicated that the determination whether
a
civil sanction constitutes punishment requires a
particularized
assessment of the penalty imposed and the purpose which that
penalty
could fairly be said to serve. The Court announced "a rule for
the rare
case" where a fixed-penalty provision subjected a "small-gauge
offender"
to a sanction overwhelmingly disproportionate to the damages
sustained.
Specifically, the Court ruled that the Government could not impose
a
criminal penalty against a defendant, then bring a separate civil
action
based on the same conduct and receive a judgment not rationally
related
to the goal of making the government whole. Id. at 447-451.
However,
.the Court did acknowledge that "even remedial sanctions carry the
sting
of punishment." Id. at 447, n.7.
In Halper, the Court recognized the Government's entitlement "to
rough
remedial justice . . . according to somewhat imprecise formulas . .
.
without being deemed to have imposed a second punishment for purposes
of
a double jeopardy analysis." Id. at 446. Moreover, the Court
clearly
supported the Government's need to combat fraud when it stated:
Nothing in today's ruling precludes the Government
from seeking the
full civil penalty against a
defendant who previously has not been
punished for the same conduct, even if
the civil sanction imposed is
punitive. In such a case, Double Jeopardy
simply is not implicated.
Id. at 450.
As the ALJ noted in distinguishing Halper, Dr. Petrus was the only one
of
the two Respondents subject to a prior criminal action.
Additionally, the
conviction which applied to Dr. Petrus involved only
six of the 271 items or
services at issue here. Thus, contrary to the
Respondents' position,
before both the ALJ and this Panel, there was no
prior adjudication and
jeopardy concerning anything other than those six
items or services (and the
related obstruction of justice charge).
Further, in regard to the six claims
to which Dr. Petrus pled guilty,
the ALJ demonstrated a reasonable
relationship between the amount
involved there ($1,425) and the proportionate
share of penalties and
assessments attributable to those claims. ALJ's
Decision at 50.
Additionally, we note that the penalties and assessments
imposed by the
ALJ totalled less than one-half the amount originally sought
by the I.G.
Accordingly, we reject the Respondents' assertion that the
penalties
imposed against them were improper.
II. The Respondents' Itemized Exceptions to the FFCLs
Below, we address the Respondents' enumerated exceptions to the
ALJ's
Findings of Fact and Conclusions of Law.
As we indicated above, the Respondents took specific exception to
a
majority of the FFCLs with the caveat that "the decision not to
address
all of the findings does not signify that the . . . [Respondents]
accept
them, but .their inaccuracy is addressed in other
documents."
Respondents' Br. at 41.
The regulation addressing administrative review of an ALJ's
decision
specifically provides:
The initial decision of the ALJ becomes final and
binding on the
parties within 30 days after notice
thereof is received by the
respondent, unless on or before that 30th day a
party files with the ALJ
written exception to the initial decision and
supporting reasons for the
exceptions.
42 C.F.R. 1003.125(d).
This regulation clearly places the onus on the parties to identify
timely
any exceptions they wish to take relative to an ALJ's decision.
See ALJ's
Decision Dismissing Inspector General's Proposed Exceptions to
Administrative
Law Judge's Decision (December 12, 1990) (I.G.'s
exceptions dismissed as
untimely filed).
Consequently, we do not view the Respondents' catch-all language
as
constituting an "exception" to each and every FFCL. Where
the
Respondents identified specific exceptions to FFCLs or any other
final
determination by the ALJ, we will, to the extent we have not
already,
address them. However, absent some reasonable indication that
the
Respondents are taking a specific exception, we will not
otherwise
engage in the abstract exercise of attempting to guess and address
the
Respondents' unstated positions.
Thus, any FFCL not specifically addressed in this decision is sustained
by
virtue of the Respondents' failure to take specific exception to it
and to
provide supporting reasons.
Below, we discuss the specific exceptions raised by the Respondents.
Where
the Respondents challenged a group of related FFCLs, we have
paraphrased and
shortened them, solely for ease of discussion, and
indicate this by
brackets. Our analysis here focuses on the arguments
made by the
Respondents on appeal and our reasons for rejecting those
arguments. In
affirming and adopting the FFCLs, however, we are
concluding that they are
based on substantial evidence in the record and
that the ALJ reasonably
determined that, where necessary, the I.G.
proved the material facts by a
preponderance of the evidence.
FFCL No. 30. Respondent Petrus caused all 271 of the claims at issue
to
be presented. ALJ's Decision at 5.
Generally, the Respondents asserted that Dr. Petrus "did not know, had
no
reason to know, or should have known that the claims for items or
services
were not . . . provided as claimed or for which payment could
not be
made." Respondents' Br. at 42.
We have addressed this exception in Part I, section 5 of our
analysis.
Based on that analysis we affirm and adopt FFCL No. 30.
FFCL No. 35. The I.G. may initiate an action under section 1128A of
the
Social Security Act within six years of the date that a claim at
issue
was presented. ALJ's Decision at 6.
The Respondents asserted that the I.G. was limited to a five-year
statute
of limitations. Respondents' Br. at 43.
We considered this issue in Part I, section 1 of our analysis. Based
on
that analysis, we affirm and adopt FFCL No. 35.
FFCL No. 44. Dr. Malsky routinely made treatment notes of the
patients
he treated. ALJ's Decision at 7.
The Respondents asserted that, based on the testimony of two
witnesses
that Dr. Malsky frequently left medical charts incomplete,
the ALJ
could not credibly arrive at this finding. Respondent's Br. at
43.
While the Respondents referred to the testimony of two witnesses
in
support of their position, their brief cited only to the testimony
of
one witness. The ALJ addressed this testimony and noted that
the
witness, while stating that Dr. Malsky sometimes failed to
complete
patient charts, could not state the frequency of this
occurrence. ALJ's
Decision at 39, n.10. Moreover, the excerpted
testimony on which the
Respondents relied is directed as much at Dr. Malsky's
handling of
"superbills" as treatment records. As the ALJ noted, these
are two
different documents. The ALJ specified that his finding was
based on
Dr. Malsky's testimony concerning treatment records, not the
superbills.
Id.
Thus, the question here goes to the probative value of the testimony.
The
role of the ALJ is to weigh sometimes conflicting testimony and to
reach a
decision .rationally supported by the evidence. Here, the ALJ
found Dr.
Malsky's testimony and the physical evidence related to his
performance to be
credible and unrefuted by the testimony of the Eye
Center employee, and we
defer to that finding since the ALJ had the
opportunity to observe the
witnesses.
Accordingly, we affirm and adopt FFCL No. 44.
FFCL No. 51. Dr. Baer always recorded the procedures he performed
at
Respondent Eye Center. ALJ's Decision at 7.
The Respondents asserted that this finding was too broad. However,
they
pointed to no evidence in the record which refutes the finding.
The
excerpts from the hearing transcript upon which they relied are
either
taken out of context or of no value in attacking the credibility of
Dr.
Baer's testimony as relied on by the ALJ. See Respondents' Br.
at
43-44.
Accordingly, we affirm and adopt FFCL No. 51.
FFCL No. 54-156. [The essence of these FFCLs is captured in FFCL
No.
156 which provides: "All 271 claims at issue in this case are
Medicare
or Medicaid claims for items or services which, to the extent they
were
provided, were provided by or incident to the services of
Respondent
Petrus during a period when he was suspended from participation
in
Medicare and Medicaid."] ALJ's Decision at 7-18.
The Respondents maintained that the ALJ based his findings on the
fact
that Dr. Petrus' handwriting appears on the patients' charts.
The
Respondents asserted that Dr. Petrus' handwriting appears there
because
Dr. Malsky and Dr. Baer left the charts incomplete. To the extent
that
the ALJ found that the services in question were not performed on
days
when either Dr. Malsky or Dr. Baer were present, the Respondents
alleged
clerical errors in recording the dates of service.
Additionally, the
Respondents reasoned that since Dr. Petrus never left a
chart
incomplete, those charts that were incomplete could be attributed to
Dr.
Malsky or Dr. Baer and would naturally show some handwriting by
Dr.
Petrus reflecting his attempts to fill in the omitted
information.
Respondents' Br. at 44.
The ALJ's findings are fully supported by the evidence in the record.
In
general that evidence relied on by the ALJ shows that the items or
services
in issue were either .furnished by Dr. Petrus and claimed using
his provider
number, or provided by Dr. Petrus, directly or otherwise,
and then
claimed for reimbursement using the other physicians' provider
numbers.
See ALJ's Decision at 7-18.
The Respondents' assertions on appeal are essentially testimony in
the
guise of argument. The Respondents did not previously present
any
credible evidence, nor elicit testimony during the hearing, which
could
be interpreted as even marginally refuting the I.G.'s charges.
The
I.G.'s evidence was overwhelmingly damning to the
Respondents'
assertions of innocence. Moreover, as the ALJ noted, in
spite of the
"massive evidence of . . . fraud and dishonesty" offered by the
I.G.,
Dr. Petrus elected not to testify in his own behalf. The ALJ
reasonably
drew a negative inference from that fact. ALJ's Decision at
38.
Accordingly, we affirm and adopt FFCL Nos. 54-156.
FFCL No. 157. All 271 claims at issue in this case are Medicare
or
Medicaid claims for which payment may not be made, because they
were
claims for items or services which, to the extent they were
provided,
were provided by or incident to the services of Respondent Petrus
during
a period when he was suspended from participation in Medicare
or
Medicaid. ALJ's Decision at 18.
The Respondents' arguments here are based on their earlier exceptions
to
FFCL Nos. 30, 44, 51, and 54-156. Respondents' Br. at 45.
Having considered and rejected those arguments earlier in this part,
we
need not consider them again. We affirm and adopt FFCL No. 157.
FFCL No. 158. The items or services stated in the claims enumerated
in
counts . . . [specific enumeration of counts omitted] were not
provided
as claimed because the claims falsely represented the identity of
the
physician who was claimed to have provided the items or services.
ALJ's
Decision at 18.
The Respondents' exception is based on their position that since the
items
or services claimed were actually provided to the patients, there
is no basis
for a CMPL violation. This is a reiteration of arguments
which we have
already considered and rejected. Supra at Part I, section
5.A.
Accordingly, we affirm and adopt FFCL No. 158.
FFCL No. 161. Respondent Petrus instructed his office staff that,
once
a new physician was hired, the retained claims were to then be
filed,
using the new physician's provider number to identify the provider
of
items or services. ALJ's Decision at 19.
The Respondents denied the substance of this finding. Rather,
they
asserted, Dr. Petrus instructed his staff to wait until they
had
obtained a provider number for Dr. Malsky before submitting claims
for
patients seen by him. The Respondents alleged that the testimony
upon
which the ALJ relied for this finding was taken out of context
and
supported by another witness who, they alleged, had embezzled from
the
Eye Center. The Respondents characterized the substance of this
finding
as a "myth" which was ultimately disproved at the hearing.
Respondents'
Br. at 46-47.
The Respondents' version of the facts was presented through
argument
rather than testimony. The testimony relied on by the ALJ in
arriving
at this finding shows that in late May or early June 1983 Dr.
Petrus
instructed the Eye Center employee then responsible for
generating
Medicare and Medicaid claims to withhold all claims until a new
doctor
(Dr. Malsky) arrived and his provider number could be used. Tr.
at
792-793. The claims to which this testimony refers were for
services
provided prior to the date Dr. Malsky began work at the Eye
Center.
Contrary to what the Respondents asserted, nothing in the context
of
this testimony undercuts the conclusion reached by the ALJ.
Moreover,
the Respondents' version of the facts-- that Dr. Petrus was
only
instructing the Eye Center staff to hold claims generated between
the
time Dr. Malsky started seeing patients and the date on which Dr.
Malsky
obtained a provider number--is not consistent with the timing
and
circumstances of Dr. Petrus' instructions. The ALJ found the
witnesses'
testimony on this point to be credible. The Respondents'
allegation
that one witness offering this testimony had embezzled funds is
an
attempt to characterize as testimony a question which Dr. Petrus
posed
to a witness at the hearing. Tr. at 1589-1592.
Accordingly, we affirm and adopt FFCL No. 161.
FFCL No. 164-176. [Generally, these FFCLs state that Dr.
Petrus
instructed his staff to change provider numbers on claim forms (from
his
to Dr. Malsky's) to make it appear that Dr. Malsky had provided
services
when, in fact, Dr. Petrus had provided them.] ALJ's Decision at
19-20.
29/
In attacking these FFCLs, the Respondents relied, virtually
exclusively,
on the one-word of testimony by the Eye Center employee
responsible for
generating Medicare and Medicaid claims. The
Respondents noted that
when asked if Dr. Petrus gave her specific
instructions as to how to
resubmit claims using Dr. Malsky's provider number,
she replied "No."
Respondents' Br. at 47, citing Tr. at 1164.
The Respondents ignore the fact that, just prior to the testimony
they
cite, this employee testified that when she alerted Dr. Petrus to
the
fact that claims by him had been rejected because he was no longer
a
certified provider, he specifically instructed her to resubmit
them
using Dr. Malsky's provider number. Tr. at 1162-1164. The
Respondents
did not refute this testimony. The testimony they cited
refers to the
actual method of resubmitting the claims, not to whether
the
resubmission was directed by Dr. Petrus.
Accordingly, we affirm and adopt FFCL Nos. 164-176.
FFCL No. 177-178. [These FFCLs find that Dr. Petrus did not
instruct
his staff to stop identifying Dr. Malsky as the provider of services
on
certain Medicare and Medicaid claims by the Eye Center after Dr.
Malsky
brought evidence of incorrect claims to Dr. Petrus'
attention.
Additionally, even after notice by Dr. Malsky, the Eye Center did
not
cease filing claims incorrectly identifying Dr. Malsky as a provider
of
services.] ALJ's Decision at 20-21.
The Respondents denied that Dr. Petrus told his staff to resubmit
claims,
previously listing him as the provider, by altering the claims
to show Dr.
Malsky as the provider. The Respondents attacked the logic
of .these FFCLs,
noting that Dr. Malsky did not start at the Eye Center
until mid-June
1983. The Respondents (based on their assertion that Dr.
Petrus was not
informed of his suspension until June 1983) contended
that Dr. Petrus had
told the employee responsible for generating the
claims that those between
May 12th and June 15th would not be reimbursed
due to his suspension.
The Respondents alleged that, contrary to the
ALJ's findings, the
resubmission of the claims, including alteration of
the provider number, was
carried out by an employee acting on her own
volition. Respondents'
Br. at 47-48.
The record does not support the Respondents' arguments. As we
have
noted elsewhere, Dr. Petrus cannot credibly deny that he knew that
his
suspension from Medicare and Medicaid was effective on May 12,
1983.
The Respondents' citation to pages 826-827 of the hearing transcript
in
support of their argument on notice is bootstrapping. The
alleged
support there consists of Dr. Petrus cross-examining a witness
and
interjecting his version of the supposed date of notice. The
witness,
not having been a party to the 1983 suspension, testified only,
and
generally, as to when she learned of the suspension. Similarly,
the
testimony cited for the proposition that Dr. Petrus informed
his
employee that the May 12 - June 15 claims would not be paid due to
his
suspension (Tr. at 1203) does not support the Respondents'
assertions.
Basically, that testimony consists of Dr. Petrus suggesting a
sequence
of events to a witness who cannot recall or remember the "facts" as
set
out by Dr. Petrus during his cross-examination. 30/ So far as
the
Respondents' assertion that an Eye Center employee resubmitted claims
on
her own, the testimony makes it clear that, while the manner in
which
she physically altered those documents may have been her own,
she
.altered and resubmitted the claims at the direction of Dr. Petrus.
Accordingly, we affirm and adopt FFCL Nos. 177-178.
FFCL No. 188-191. [These FFCLs state that Dr. Petrus asked Dr. Baer
to
lie to the grand jury regarding his relationship with Dr. Petrus and
the
Eye Center. FFCL Nos. 188-190. Additionally, FFCL No.
191 states that
Dr. Petrus asked Dr. Baer to lie to Dr. Petrus'
attorney.] ALJ's
Decision at 22.
The Respondents characterized these FFCLs as "fiction," unsupported by
the
record. The Respondents alleged that, when faced with Dr.
Baer's
apparent inability to consistently recall facts, Dr. Petrus
merely
advised Dr. Baer to tell the grand jury, when he was uncertain about
the
facts, that he did not remember. The Respondents also alleged that
Dr.
Baer had, in fact, lied to the grand jury. Respondents' Br. at
48-49.
The FFCLs are based on the transcripts of the conversations between
Drs.
Petrus and Baer. Concerning the allegation that Dr. Baer lied to
the
grand jury, the Respondents again relied on an interpretation of
the
hearing testimony taken out of context. The testimony relied on by
the
Respondents does not show that Dr. Baer presented false grand
jury
testimony. See Tr. at 382 and 385. Rather, it demonstrates
an effort
by Dr. Petrus to testify by interpreting documents while
questioning a
witness about them. 31/
Accordingly, we affirm and adopt FFCL Nos. 188-191.
FFCL No. 193. Respondent Petrus altered records of surgeries that
had
been created by employees at Bailey Square (sic) in order to make
it
appear that Dr. Malsky had performed surgical procedures which, in
fact,
he had not performed. ALJ's Decision at 22.
The Respondents correctly noted, and the I.G. agreed, that Dr.
Malsky
never performed surgery at the Bailey Square Ambulatory Surgical
Center
(an outpatient .facility). Rather, he operated at St. David's
Hospital.
The ALJ's references to the record show that in reaching this
finding he
was aware of this fact. We view the ALJ's error in referring
to Bailey
Square rather than St. David's as a harmless editorial error.
We
nonetheless modify the finding to accurately reflect the record.
See
Part III below.
The Respondents cited the testimony of a St. David's operating room
nurse
for the proposition that there were errors in the St. David's
records in
issue. The Respondents asserted that Dr. Petrus and Dr.
Malsky were
co-surgeons for the claims at issue and that any changes to
the hospital
records were made to reflect that fact. Respondents' Br.
at 49.
The testimony of the St. David's nurse, relied on by the Respondents,
is
general in nature and addresses the manner in which operating
room
records are filled out. See Tr. at 151-152, 155-156, 162-163, and
170.
It does not specifically rebut the testimony of Dr. Malsky on this
issue
and the documentary evidence cited by the ALJ. See I.G.
Exs. 145, 146;
Tr. at 495, 739-740.
Accordingly, we affirm and adopt FFCL No. 193, as modified in
the
Appendix.
FFCL No. 196. Respondent Petrus knew that the suspension
became
effective May 12, 1983. ALJ's Decision at 22.
The Respondents again asserted that their only notice of suspension
was
contained in the May 31, 1983 Order of Dismissal of the
administrative
proceeding involving Dr. Petrus, i.e., his 1982
suspension. The
Respondents contended that this established that they
were not notified
of the suspension until some time in June 1983 so that all
Medicare and
Medicaid claims made until "the early part of June" were
valid.
We have already considered and rejected the Respondents' arguments on
this
issue. Supra at Part I, section 5.C. We note moreover that,
although
they have asserted repeatedly that they were not notified of
the suspension
until June 1983, the Respondents offered no evidence of
notice on a specific
date in June 1983 to support their claim.
We therefore affirm and adopt FFCL No. 196.
.FFCL No. 197. Respondent Petrus knew that he could apply
for
reinstatement upon completion of his suspension but that he would
not
automatically be reinstated. ALJ's Decision at 22.
The Respondents argued that Dr. Petrus' 1983 suspension was a violation
of
due process. The Respondents alleged that HCFA assured Dr. Petrus
that
he would be reinstated in six months, on November 12, 1983.
Generally, the
Respondents maintained that since the Government violated
this contract, Dr.
Petrus' suspension was invalid. The Respondents also
raised some of the
other challenges to his suspension (Respondents' Br.
at 49-50) which we have
previously addressed in this decision. Supra at
Part I, section 5.
There is absolutely no merit to these arguments. The agreement
leading
to Dr. Petrus' May 12, 1983 suspension provides:
4. Dr. Petrus may petition for reinstatement
in the Medicare
program up to ninety (90) days
before the end of the six month
period . . . Dr. Petrus will be reinstated
barring any obstacle. Health
Care Financing Administration represents
it does not know of any pending
investigation or regulatory obstacle at this
time.
I.G. Ex. 102 at 4.
The agreement did not, as the Respondents asserted, provide
that
reinstatement would be automatic. Rather, the agreement clearly
put Dr.
Petrus on notice that an investigation could be an obstacle to
his
reinstatement. See 42 C.F.R. 420.112, 420.120 (1982). At the time
of
the agreement, there were no ongoing investigations concerning
Dr.
Petrus. However, the record shows that, as early as August 1983,
the
I.G. was once again investigating Dr. Petrus' activities. Tr.
at
1280-1288. Thus, there was an obstacle present to Dr. Petrus'
request
for reinstatement in November 1983.
Accordingly, we affirm and adopt FFCL No. 197.
FFCL No. 201. Respondent Petrus admitted that he had willfully
and
knowingly made false statements in representation of material facts
for
use in determining his rights to Medicare and Medicaid benefits.
ALJ's
Decision at 23.
The Respondents contended that Dr. Petrus had stated in court that
he
never knowingly or willfully submitted any false claim forms to
the
Government. They argued that this fact alone nullified the
acceptance
of any guilty plea. The Respondents reasserted that the
problems with
these claims arose due to "solitary" activities of an Eye
Center
employee. They again contended that the claims are valid since
the
services were actually provided.
The Respondents' arguments have no merit. This FFCL is based on
Dr.
Petrus' admission as set out in his re-arraignment transcript. I.G.
Ex.
109. In the portion of the transcript cited by the ALJ, Dr.
Petrus
plainly admits that he had willfully and knowingly made false
statements
in representation of material facts for use in determining his
rights to
Medicare and Medicaid benefits. Id. at 25-27. The
transcript shows a
clear admission of guilt to three counts of the
indictment. The portion
of the transcript upon which the Respondents
relied involves a
discussion, between Dr. Petrus and the judge, relative to
Count 15 of
the indictment, to which no plea was entered. Id. at 16-17.
Thus, the
statement offered by the Respondents in their exceptions is
completely
irrelevant to the factual basis for FFCL No. 201.
Regarding the six claims involved in the counts to which Dr. Petrus
pled
and the other 265 claims, we have considered and rejected
the
Respondents' assertion that the claims were valid since the
services
were provided. Moreover, we have sustained the ALJ's findings
and
conclusions regarding Dr. Petrus' liability. Supra Part I, section
5.
Accordingly, we affirm and adopt FFCL No. 201.
FFCL No. 202-203. [These FFCLs state that Dr. Petrus directed the
Eye
Center and its employees to falsely claim reimbursement for items
or
services (as enumerated in FFCL No. 202), and that Dr. Petrus knew
that
the Eye Center employees were executing his instructions to
falsify
claims.] ALJ's Decision at 23.
The Respondents asserted generally that the findings and counts upon
which
these FFCLs are based are, in fact, unrelated to them and that the
hearing
testimony fails to support them as well. Rather, the
Respondents
alleged, two Eye Center employees determined who treated
each patient,
without any input from Dr. Petrus. Respondents' Br. at
52.
The Respondents offered no support or cogent explanation for their
general
assertions regarding the basis of these FFCLs. The ALJ
reasonably found
that these FFCLs were proven by a preponderance of the
evidence.
Conversely, there is simply no basis in the record to support
the
Respondents' repeated assertions that the trouble they encountered
was the
fault of negligent or irresponsible employees of the Eye Center
(other than
Dr. Petrus).
We affirm and adopt FFCL Nos. 202 and 203.
FFCL No. 204-211. [In general, these FFCLs state that the
Respondents
"knew," "had reason to know," and "should have known," that the
items
and services enumerated in these FFCLs were not provided as
claimed.]
ALJ's Decision at 23-25.
The Respondents indicated that these exceptions were reiterations of
their
earlier arguments that their actions did not violate the CMPL.
We considered and rejected the Respondents' arguments in Part I, section
5
of this analysis. We incorporate that analysis here and reject
these
specific exceptions.
Consequently, we affirm and adopt FFCL Nos. 204-211.
FFCL No. 212. The Respondents presented or caused to be presented
all
271 claims at issue in this case in violation of the Act.
ALJ's
Decision at 25.
The Respondents insisted that the ALJ erred by not establishing
liability
for each Respondent. The Respondents again argued that the
ALJ's
decision was wrong because: the Eye Center was never suspended;
Dr. Petrus
never signed any claim forms; the services claimed were
provided to each
patient; and a specific dollar amount of liability for
each Respondent was
not established. Respondents' Br. at 52.
We have considered and rejected these arguments elsewhere in
this
analysis. Supra at Part I, section 5. We incorporate the
pertinent
aspects of that analysis here and reject this specific
exception.
We affirm and adopt FFCL No. 212.
FFCL No. 213. The amount claimed by the Respondents in the 271
claims
at issue exceeded $40,000. ALJ's Decision at 25.
The Respondents argued that the I.G. was "unsure" of the amount of
money
involved. The Respondents asserted that, based on the statement of
an
I.G. witness and the I.G.'s brief, the amount of money involved
is
closer to $22,000. The Respondents claimed that the Government has
been
unjustly enriched since the services were provided and the
doctors
(Malsky and Baer) were paid, while money has been withheld from
the
Respondents. Given these claims and their assertion that the
damages
awarded by the ALJ (totalling $180,000) are more than eight
times
greater than the money involved, the Respondents argued that the
Double
Jeopardy Clause of the Fifth Amendment has been violated.
Respondents'
Br. at 52-53.
The Respondents' arguments are not persuasive. The testimony upon
which
the Respondents relied comes from an employee of Blue Cross/Blue
Shield
of Texas who testified that she was unsure of the amount of
funds
"withheld" from the Eye Center. Tr. at 1081. This is not
necessarily
the same as the amount that was improperly claimed. 32/ The
Act does
not require the I.G. to prove a specific overpayment prior
to
establishing a violation. See Frazier at 27, citing section 1128A(a)
of
the Act. Moreover, we have considered and rejected the
Respondents'
double jeopardy arguments and nothing here would cause us to
reconsider
that analysis.
Accordingly, we affirm and adopt FFCL No. 213.
FFCL No. 214-222. [These FFCLs cite the ALJ's authority to
impose
penalties and assessments after considering any mitigating
or
aggravating circumstances. They also cite a respondent's burden
of
proof to establish mitigating factors. They state that the
Respondents
were participating in a scheme to defraud Medicare and Medicaid,
that
the dollar amount at issue here is substantial, and that the
Respondents
showed contempt for both programs, as well as the beneficiaries
and
recipients of those programs, so the Respondents had a high degree
of
culpability for their actions.] ALJ's Decision at 25-26.
The Respondents offered no substantive argument, but merely alleged
that
the ALJ "regularly supported the position of his employer . . .
."
Respondents' Br. at 53.
Presumably, the Respondents were implying that the ALJ was employed by
the
I.G. They provided no support for this implication (and we are
personally
aware that it is incorrect because the ALJs are
organizationally separate
from the I.G. and are not employed by the
I.G.). The mere fact that the
ALJ's findings are consistent with the
I.G.'s position is no reason for
overturning those findings.
We affirm and adopt FFCL Nos. 214-222.
FFCL No. 223-227. [These FFCLs state that Dr. Petrus was convicted
in
1979 of a Medicaid-related criminal offense, the claims in
issue
represent his second documented offense of fraudulent conduct
relative
to a federal health care program, the Government incurred
substantial
expenses, the Respondents fraudulently obtained substantial
money, and
the Respondents attempted to coverup their conduct.] ALJ's
Decision at
26.
The Respondents asserted that Dr. Petrus' 1979 plea was withdrawn
and
cannot be considered a conviction here. They alleged that the
current
action is not a second case, but a continuing action against Dr.
Petrus.
They also denied that they attempted to coverup their
activities.
Respondents' Br. at 53-54.
As the I.G. noted, the question of the effect of Dr. Petrus' withdrawal
of
his 1979 nolo contendere plea was considered by an ALJ in the
administrative
proceedings relative to Dr. Petrus' 1983 suspension. The
ALJ ruled in
the Government's favor. See I.G.'s Br. at 89; see also
I.G. Exs. 101
and 102. The Respondents are bound by that ALJ's ruling
since they
accepted a settlement agreement in that case rather than
appealing.
Moreover, the Respondents' mere denial of an attempt to
coverup Dr. Petrus'
activities is not a basis on which we would reverse
the ALJ's FFCLs.
We affirm and adopt FFCL Nos. 223-227.
FFCL No. 228. It is not a mitigating factor that the false claims
in
this case were filed over a relatively short period of time.
ALJ's
Decision at 26.
The Respondents argued that the fact that the false claims were filed
over
a short period of time was a mitigating factor. Additionally,
the
Respondents asserted that the ALJ's failure to consider this fact as
a
mitigating factor was further evidence of his bias. Respondents' Br.
at
54.
The Act and implementing regulations require an ALJ to
consider
aggravating and mitigating factors in determining the amount
of
penalties and assessments to impose. See section 1128A(d) and 42
C.F.R.
1003.106. The Act does not specifically list the length of time
over
which claims are made as a factor to be considered. The
regulations
refer to "a short period of time" in the guidelines for
determining the
amount of the penalty or assessment, under "Nature and
circumstances of
the claim." Specifically, section 1003.106(b)(1) states:
It should be considered a mitigating circumstance if
all the items
or services . . . were of the
same type and occurred within a
short period of time, there were few such
items or services, and the
total amount claimed . . . was less than
$1,000.
(Emphasis added.) This is only a guideline, however, and, in any
event,
does not indicate that the period of time by itself is a
mitigating
factor. While the false claims here were all submitted
within a period
of about seven months, there were 271 items or services
claimed, and the
amount claimed was considerably more than $1,000.
Both the Act and regulations also specifically permit an ALJ to
consider,
in addition to listed factors, "other matters as justice may
require."
Here, the ALJ could reasonably determine that the period was
not so short
that justice required it to be considered a mitigating
factor. This is
especially evident since the Respondents provided no
evidence that they
stopped submitting false claims for any reason other
than the fact that they
were under investigation by the I.G. Further,
as the ALJ noted, no
sooner was Dr. Petrus suspended than he initiated
his efforts to
circumvent the suspension.
Since the ALJ was reasonable in not considering the period of time
by
itself to be a mitigating factor, his finding that there were
no
mitigating factors is not evidence of bias on his part.
Accordingly, we affirm and adopt FFCL No. 228.
FFCL No. 229. The Respondents have not established that
imposition
against them, jointly and severally, of assessments of $80,000
and
penalties of $100,000, will jeopardize their ability to continue
as
health care providers. ALJ's Decision at 26.
Citing Dr. Petrus' alleged permanent disability and his recent
release
from prison, the Respondents asserted that the ALJ's finding "flies
in
the face of reason." Respondents' Br. at 54.
In imposing $80,000 in assessments, the ALJ stated that the
"Respondents
offered no evidence as to their financial condition."
ALJ's Decision at
46. The Respondents did not assert here that they had
provided such
evidence. Dr. Petrus' alleged disability or imprisonment
may have
jeopardized his ability to continue as a provider, but that
is
irrelevant to the question presented under the statute: whether
the
imposition of an assessment and penalty will jeopardize their ability
to
continue.
Accordingly, we affirm and adopt FFCL No. 229.
III. The I.G.'s Proposed Technical Corrections
The I.G. proposed that we make certain revisions and corrections to
the
ALJ's decision. The I.G. labeled these proposed revisions
and
corrections as merely "technical." Specifically, the I.G. proposed
that
we modify FFCL Nos. 15, 54, 55, 59-64, 101, 126-128, 157, and 193
"to
conform them to the evidentiary record." I.G.'s Br. at 75-76. The
I.G.
also identified editorial errors related to FFCL Nos. 152, 213, and
224.
33/
In his ruling dismissing the I.G.'s exceptions as untimely, the
ALJ
stated:
[The proposed] revisions and corrections . . . [do
not] rise to the
level of exceptions. They do
not affect the outcome or the
substance of my decision . . . . Perhaps my
decision would be more
accurate and complete with these corrections and
revisions, and for that
reason I note that I have no basis to disagree with
them.
Decision Dismissing Inspector General's Proposed Exceptions
to
Administrative Law Judge's Decision (December 12, 1990) at 3. 34/
We gave the Respondents an opportunity to comment on the I.G.'s
proposed
revisions and corrections. The Respondents commented
that--
it would be inappropriate to reply to the I.G.'s
corrections and
revisions of the ALJ's findings of
fact, since that was the basis
on which the ALJ relied in formulating his
decision. If the ALJ's
findings of fact are in error, it seems only
logical that the decision
is also in error.
Respondents' Letter of January 25, 1991.
Contrary to what the Respondents said, the errors identified by the
I.G.
as "technical" are not errors in finding the facts; as the ALJ
stated,
they do not affect the outcome or the substance of his
decision. These
errors are merely typographical or editorial errors,
primarily made in
listing the counts at issue or in citing to all of the
related exhibits.
We note that the ALJ's Decision contains 230 detailed FFCLs
and that the
number of counts at issue (271) would make it extremely
difficult to
avoid making any error of this type. Our conclusion that
the errors in
listing counts were inadvertent and not substantive is
consistent with
the ALJ's overall findings on the total number of counts
(174) for items
or services provided by a physician other than Dr. Petrus and
with a
review of the supporting evidence.
Moreover, the ALJ's failure to accurately list certain counts in
the
pertinent FFCLs at most affects material findings on eight of the
271
counts at issue. We would uphold the penalties and assessments
here
even if they were based on 263 counts, rather than 271 counts,
since
there is uncontradicted and credible evidence that the
Respondents
schemed to defraud the Medicare and Medicaid programs and to
circumvent
the requirements enacted to protect the integrity of those
programs.
Accordingly, we modify the FFCLs as indicated in the Appendix to
this
decision. We note that we do not adopt the language proposed by
the
I.G. for FFCL No. 15, but instead change the second sentence to
reflect
more accurately the wording of the applicable statutory and
regulatory
provisions regarding the effect of a suspension. Also, we decline
to add
findings related to counts 206-209, instead modifying FFCLs No.
150-152
to reflect what we find was an inadvertent omission of those counts
from
those findings. 35/
CONCLUSION
Based on the above analysis, we affirm the decision of the ALJ
imposing
$100,000 in penalties and $80,000 in assessments against
the
Respondents, Dr. Edward J. Petrus, Jr. and The Eye Center of
Austin,
jointly and severally. In doing so we affirm and adopt the 230
Findings
of Fact and Conclusions of Law relied upon by the ALJ in reaching
his
decision, with the editorial modifications set out in the Appendix
to
this decision. Conversely, we reject each and every exception to
those
Findings and Conclusions taken by the Respondents.
_____________________________ Donald
F.
Garrett
_____________________________ Alexander
G.
Teitz
_____________________________ Judith
A.
Ballard Presiding Panel Member.APPENDIX
The FFCLs modified by the Appellate Panel are:
15. Respondent Petrus' suspension from participating in Medicare
and
Medicaid became effective beginning May 12, 1983. The effect of
the
suspension was to bar payment for any Medicare or Medicaid item
or
service furnished by Dr. Petrus during the period of his
suspension.
I.G. Ex. 102/5; 105/2; Social Security Act, section 1862(e); 42
C.F.R.
420.112(b), 455.212(d) (1982); 42 C.F.R. 420.2 (1982) (definition
of
"furnished"); 42 C.F.R. 420.126, 455.213 (1983).
16. A party who is suspended or excluded from participating in
Medicare
and Medicaid pursuant to section 1128(a) of the Social Security Act
is
not automatically entitled to reinstatement. Tr. at 1270; see 42
C.F.R.
420.112, 420.120, and 455.212(e) (1982); 42 C.F.R. 420.130, 420.132,
and
455.230-455.234 (1983).
17. A suspended or excluded party must request that he or she
be
reinstated in order to be reinstated. See 42 C.F.R. 420.120 (1982);
42
C.F.R. 420.130 (1983).
18. A party's reinstatement request will not be approved unless it
is
reasonably certain that that party will not repeat the violations
that
led to his or her suspension or exclusion. See 42 C.F.R.
420.120(b)
(1982); 42 C.F.R. 420.132 (1983).
* * *
54. Of the 271 items or services at issue, 97 items or
services,
enumerated at counts 4, 5, 11-13, 16, 17, 29, 36-41, 51-57,
59-61,
65-72, 87-90, 93, 94, 97-102, 104, 107, 117, 133-138, 144, 145,
148,
151, 154, 155, 157, 158, 161, 162, 171, 177, 184, 188-191, 196,
205,
213-216, 221, 223-228, 235, 246, 247, 249, 258-263, 268, 269, 271,
and
272, are for items or services claimed as having been provided
by
Respondent Petrus. I.G. Ex. 2, 5, 7.1, 7.2, 11, 14.1, 16, 17.1,
18.2,
18.5, 20.1, 20.2, 22, 24-26, 28, 30, 34, 38, 39.1, 41, 43, 46.2, 47,
49,
50, 52, 55, 58, 62.1, 64, 65.1, 67, 70, 73, 74.1, 74.2, 76, 78, 79,
80,
83, 87.1, 88, 91, 93, 94, 95; Tr. at 1035, 1103.
55. With the exception of the items or services stated in the
claims
enumerated at counts 87-90, all of the 97 items or services claimed
as
having been provided by Respondent Petrus were claimed to have
been
provided on dates when Respondent Petrus was the only physician
working
at Respondent Eye Center. I.G. Ex. 2, 5, 7.1, 7.2, 11, 14.1,
16, 17.1,
18.4, 18.5, 20.1, 20.2, 22, 24-26, 28, 30, 34, 38, 39.1, 41, 43,
46.2,
47, 49, 50, 52, 55, 58, 62.1, 64, 65.1, 67, 70, 73, 74.1, 74.2, 76,
78,
79, 80, 83, 87.1, 88, 91, 93, 94, 95; Findings 41-43, 47-50, 52, 54.
* * *
59. Of the 271 items or services at issue, 174 items or
services,
enumerated at counts 1-3, 6-10, 14, 15, 18, 19, 22-28, 30-35,
42-47, 50,
58, 62-64, 73-86, 91, 92, 95, 96, 103, 105, 106, 108-116,
118-132,
139-143, 146, 147, 149, 150, 152, 153, 156, 159, 160, 163-170,
172-176,
178-183, 185-187, 192-195, 197-204, 206-212, 217-220, 222,
229-234,
236-245, 248, 250-257, 264-267, 270, and 273-275, are for items
or
services claimed to have been provided either by Dr. Malsky or by
Dr.
Baer. I.G. Ex. 1, 2b, 3, 4, 6, 7.3, 8-13, 14.2, 15.2, 17.2, 18.4,
18.7,
19, 20.4, 20.5, 20.6, 21, 23, 24, 27, 29, 30, 31, 32, 33.1, 35,
36,
37.1, 37.2, 39.2, 39b.3, 40, 42, 44, 45, 46.1, 46.4, 48, 51, 53, 54,
56,
57, 59-61, 62.2, 63, 65.2, 66, 68, 69.1, 69.2, 71, 72.1, 75.1,
75.2,
77.1, 80-82, 84.1, 84.2, 85, 86.1, 87.2, 89.1, 89.2, 90.1, 92, 93,
96;
Tr. at 1035-1036, 1102, 1103.
60. The items or services stated in the claims enumerated at
counts
1-3, 6, 7, 26-28, 30, 31, 32-35, 42-47, 58, 62-64, 73-80, 91-92,
95-96,
113-115, 118-124, 139-143, 146, 147, 152, 153, 156, 159, 160,
165-170,
175, 176, 178-180, 182-183, 186, 187, 192, 193-195, 203-204,
210-212,
229-234, 239-243, 250-253, 256, 257, 264-267, 270, and 273-275,
were
claimed as having been provided by Dr. Malsky. I.G. Ex. 1, 2b,
10-13,
14.2, 17.2, 18.4, 18.7, 19, 20.4, 20.5, 20.6, 23, 24, 31, 32, 35,
36,
39.2, 39b.3, 40, 42, 46.1, 46.4, 48, 51, 54, 57, 59-61, 63, 65.2,
66,
69.2, 72.1, 80-82, 85, 86.1, 89.1, 90.1, 92, 93, 96; Tr. at
1035-1036,
1102, 1103.
61. To the extent that they were provided, the items or services
stated
in the claims enumerated at counts 1-3, 6, 7, 26-28, 30, 31,
32-35,
36-47, 51-56, 58, 62-64, 73-80, 91-96, 113-115, 118-124, 139-143,
146,
147, 152, 153, 156, 159, 160, 165-170, 175, 176, 178-180, 182-183,
186,
187, 192, 193-195, 203-204, 210-212, 229-234, 239-243, 250-253,
256,
257, 264-267, 270, and 273-275, were provided on dates when Dr.
Malsky
did not work for Respondent Petrus, either at Respondent Eye Center,
or
elsewhere. Findings 41-43.
62. Dr. Malsky did not provide the items or services stated in
the
claims enumerated at counts 1-3, 6, 7, 26-28, 30, 31, 32-35,
36-47,
51-56, 58, 62-64, 73-80, 91-96, 113-115, 118-124, 139-143, 146,
147,
152, 153, 156, 159, 160, 165-170, 175, 176, 178-180, 182-183, 186,
187,
192, 193-195, 203-204, 210-212, 229-234, 239-243, 250-253, 256,
257,
264-267, 270, and 273-275. Findings 60-61.
63. Dr. Malsky was the only physician working for Respondent Petrus
on
the dates when the items or services stated in the claims enumerated
at
counts 1-3, 6, 7, 26-28, 30, 31, 32-35, 36-47, 51-56, 58, 62-64,
73-80,
91-96, 113-115, 118-124, 139-143, 146, 147, 152, 153, 156, 159,
160,
165-170, 175, 176, 178-180, 182-183, 186, 187, 192, 193-195,
203-204,
210-212, 229-234, 239-243, 250-253, 256, 257, 264-267, 270, and
273-275,
were claimed to have been provided. Findings 40-43.
64. To the extent that items or services were provided in the
claims
enumerated at counts 1-3, 6, 7, 26-28, 30, 31, 32-35, 36-47, 51-56,
58,
62-64, 73-80, 91-96, 113-115, 118-124, 139-143, 146, 147, 152, 153,
156,
159, 160, 165-170, 175, 176, 178-180, 183, 186, 187, 192,
193-195,
203-204, 210-212, 229-234, 239-243, 250-253, 256, 257, 264-267, 270,
and
273-275, Respondent Petrus provided them, or they were provided
incident
to his services. Findings 62-63.
* * *
101. The items or services stated in the claims contained at
counts
8-10, 14, 15, 18, 19, 83-86, 103, 105, 106, 108-110, 112, 125-132,
149,
150, 163, 164, 172-174, 185, 197-202, 206-209, 254, and 255,
were
claimed as having been provided by Dr. Baer. I.G. Ex. 3, 4, 6, 7.3,
8,
21, 27, 29, 30, 37.1, 37.2, 44, 45, 53, 56, 62.2, 68, 69.1, 71, 89.2.
* * *
126. Dr. Baer did not provide the items or services stated in
the
claims enumerated at counts 108, 109, 110, and 112. Tr. at 278-279;
see
I.G. Ex. 30d/3, /7, /12; 164/171.
127. Dr. Baer was the only physician working for Respondent Petrus
on
the date when the items or services stated in the claims enumerated
at
counts 108, 109, 110, and 112 were claimed to have been
provided.
Findings 46-50, 52, 54.
128. To the extent items or services stated in the claims enumerated
at
counts 108, 109, 110, and 112 were provided, they were provided
by
Respondent Petrus. Findings 126, 127.
* * *
150. Dr. Baer did not provide the items or services stated in
the
claims enumerated at counts 200-202 and 206-209. Tr. at 292, 308,
309.
151. Dr. Baer was the only physician working for Respondent Petrus
on
the date when the items or services stated in the claims enumerated
at
counts 200-202 and 206-209 were claimed to have been provided.
Findings
46-50, 52, 54.
152. To the extent items or services stated in the claims enumerated
at
counts 200-202 and 206-209 were provided, they were provided
by
Respondent Petrus. Findings 150, 151.
* * *
157. All 271 claims at issue in this case are Medicare or
Medicaid
claims for which payment may not be made, because they were claims
for
items or services which, to the extent they were provided, were
provided
by or incident to the services of Respondent Petrus during a period
when
he was suspended from participation in Medicare and Medicaid.
Finding
156; Social Security Act, section 1128A(a)(1)(D).
* * *
193. Respondent Petrus altered records of surgeries that had
been
created by employees at St. David's Hospital in order to make it
appear
that Dr. Malsky had performed surgical procedures which, in fact, he
had
not performed. I.G. Ex. 145, 146; Tr. at 495, 739-740.
* * *
213. The amount claimed by Respondents in the 271 claims at
issue
exceeded $40,000.00. I.G. Ex. 1, 2, 2b, 3-6, 7.1, 7.2, 7.3, 8-13,
14.1,
14.2, 15.2, 16, 17.1, 17.2, 18.2, 18.4, 18.5, 18.6, 18.7, 19, 19b,
20.1,
20.2, 20.4, 20.5, 20.6, 21, 22-32, 33.1, 34-36, 37.1, 37.2, 38,
39.1,
39.2, 39b.3, 40, 41-45, 46.1, 46.2, 46.4, 47-61, 62.1, 62.2, 63,
64,
65.1, 65.2, 66-68, 69.1, 69.2, 70, 71, 72.1, 73, 74.1, 74.2, 75.1,
75.2,
76, 77.1, 78-83, 84.1, 84.2, 85, 86.1, 87.1, 87.2, 88, 89.1, 89.2,
90.1,
91-96.
* * *
224. The false claims in this case constitute Dr. Petrus'
second
documented episode of fraudulent conduct with respect to a
federally
funded health care program. Finding 223; 42 C.F.R.
1003.106(b)(3)..
1. As the ALJ noted, the provision now at paragraph D appeared
at
paragraph B prior to amendments made in 1987, which did not change
the
intent or scope of the law in any way relevant here. ALJ's Decision
at
39, n.11. We also note that the Act previously used the
term
"suspension," rather than "exclusion," when a person was barred
from
participating in a program because convicted of a program-related
crime.
2. We note that, in summarizing his conclusion on page 1 of
his
decision, the ALJ appeared to be saying that liability for all
271
counts was under paragraph (A). An examination of his numbered
FFCLs
and his discussion of the issues, however, shows that he found
liability
for 174 counts under paragraph (A) and for all 271 counts
under
paragraph (D). See ALJ's Decision at 18, 23-25, 39-43.
3. This summary of the facts is not intended as a substitute for
the
more detailed factual statements in the FFCLs.
4. The ALJ cited the 1986 version of the regulations, which
is
substantially the same as the versions in effect during the
relevant
time period. ALJ's Decision at 4; FFCL Nos. 16, 17, and
18, citing 42
C.F.R. 1001.130, 1001.132. We modify FFCL Nos. 16, 17,
and 18 to
reflect the appropriate citations, as indicated in the Appendix to
this
decision.
5. The I.G. ultimately withdrew its allegation with respect to
four
counts.
6. We use the generic term "brief" in reference to both
the
Respondents' exceptions and the I.G.'s response to them.
7. Throughout this decision, we omit the ALJ's citations to the
Act,
regulations, other FFCLs, or the record before him from our
restatement
of his FFCLs.
8. Pub. L. 100-93, 101 Stat. 680 (1987).
9. See Donald O. Bernstein, DAB Civ. Rem. C-40 (1989), DAB App.
Rev.
denied, (1989).
10. The Bernstein court identified the CMPL, in general, as "a
civil
proceeding, not a criminal or quasi-criminal proceeding." Id. at
1397;
in accord, Mayers v. U.S. Dept. of Health and Human Services, 806
F.2d
995 (11th Cir. 1986), cert. denied, 484 U.S. 822 (1987).
11. Although Chua involved a mandatory exclusion under section 1128
of
the Act, our rationale as to the prospective application of
the
amendments applies equally here.
12. In attacking the ALJ's Ruling on the applicability of a
six-year
statute of limitations, the Respondents asserted --
that anemic ruling offered . . . only his
interpretation of the
statutes and regulations,
which he later affirms he is without
authority to render (p. 48). Since
the ALJ lacks authority to render a
decision regarding these crucial
jurisdictional issues, . . . the
decision . . . must be vacated . . .
.
Respondents' Br. at 2.
The ALJ did not state that he was without authority to
decide
jurisdictional issues. Rather, the ALJ indicated that while he
was
"without the authority to decide the validity of statutes
or
regulations," he did "have authority to . . . interpret
laws,
regulations, and court decisions." ALJ's Decision at 48.
The ALJ's
Ruling was merely his interpretation of the applicable law and
was
clearly within his authority.
13. As part of this general argument, the Respondents also
asserted
that since the Eye Center was not excluded from Medicare or Medicaid
in
1983, it could not be charged with a CMPL violation. The
Respondents
then alleged that the 1983 suspension of Dr. Petrus
violated the Fifth
Amendment. Respondents' Br. at 14. We address
these arguments at Part
I, section 5.B. of this analysis.
14. The Respondents also alleged, without supporting reasons, that
the
ALJ violated their due process rights by denying admission of
the
Respondents' evidence during the hearing. That ruling, however,
was
clearly within the ALJ's authority under section 1128A(c)(4) of the
Act
and was reasonably related to the Respondents' willful failure to
comply
with the ALJ's orders regarding submission of exhibits. See
Hearing
Transcript (Tr.) at 1230-1252.
15. The I.G. would have us apply an abuse of discretion standard
to
this issue and to other related questions. We do not here decide
the
appropriate standard for our review of an ALJ's evidentiary
rulings
since we would uphold the ALJ's rulings here under any standard.
16. The Respondents did not cite to any rule of evidence as a basis
for
excluding grand jury materials, and, in any event, under the
regulations
governing CMPL proceedings, the technical rules of evidence do
not apply
"except that when reasonably necessary, the ALJ must apply rules
or
principles designed to assure production of the most credible
evidence
available and to subject testimony to test by
cross-examination." 42
C.F.R. 1003.118(c).
17. Under Sells, the exception in Rule 6(e)(3)(A)(i)
allowing
disclosure to government attorneys would not apply here, contrary
to
what the ALJ implied in his March 1, 1990 Order. The basis for
the
ALJ's ruling, however, was that Rule 6(e) was irrelevant and that
the
Respondents had not established that they would be prejudiced
by
admission of the material in question there. Thus, the ALJ's error
in
discussing Rule 6(e) was merely dicta and was harmless in any
event,
since the Respondents did not establish that release was improper
under
the standard set out in Sells for issuing a Rule 6(e)(3)(C)(i)
order.
18. HCFA is the component within the Department of Health and
Human
Services charged with administering the Medicare and Medicaid
programs.
19. The first motion was made following the ALJ's refusal to grant
the
Respondents' motion for postponement on the grounds of medical
hardship.
Tr. at 755-756. The second motion occurred following the
ALJ's ruling
on the admission of certain evidence by the Respondents during
the
hearing. Tr. at 1238.
20. The Respondents' reply was undated, but was received by the
Civil
Remedies Division on November 26, 1990.
21. Prior to 1987 the earlier version of this law, at
section
1128A(a)(1)(B), proscribed presenting or causing to be presented a
claim
for items or services, "payment for which may not be made under
the
program under which such claim was made . . . ." The 1987 amendment
did
not change the intent or scope of the law, except to include within
the
proscription claims by beneficiaries or recipients made at the
direction
of an excluded party. See H.R. Rep. No. 85, 100th Cong., 1st
Sess., pt.
2, 14-15 (1987).
22. The ALJ recognized that, prior to December 22, 1987, this
section's
standard of liability for a party who filed a false claim was
whether
the party knew or had reason to know the item or service was
not
provided as claimed. On December 22, 1987, Congress
retroactively
substituted the "should know" standard for the "reason to
know"
standard. The ALJ noted that the validity of Congress'
retroactive
application of the "should know" standard to claims for items
or
services presented prior to December 22, 1987 had not been tested
in
Court. Consequently he applied the "knows" and "should know"
standards
of the 1987 revision, as well as the pre-revision "has reason to
know"
standard, in deciding the Respondents' liability under
section
1128A(a)(l)(A). See ALJ's Decision at 40, n.13.
23. Thuong Vo, M.D. and Nga Thieu Du, DAB Civ. Rem. C-45
(1989);
Anesthesiologists Affiliated, et al. and James E. Sykes, D.O., et
al.,
DAB Civ. Rem. C-99 and C-100 (1990), DAB App. Rev. denied, (1990);
Tommy
G. Frazier and Praeter Drugs, Inc., DAB Civ. Rem. C-127 (1990), DAB
App.
Rev. denied, (1990).
24. The ALJ's Ruling of February 6, 1990 (entering partial
summary
disposition against Respondent Petrus with respect to the six
claims
covered by the two criminal counts) was based on 42 C.F.R.
1003.114(c).
That section makes binding in a CMPL proceeding a final
determination
that a respondent presented or caused to be presented a claim
or request
within the scope of section 1003.102. Section 1128A(c)(3) of
the Act,
as amended by Public Law 99-509, section 9317, also contains a
provision
estopping a person who has been convicted (including upon a guilty
plea)
of a federal crime charging fraud or false statement and involving
the
same transaction from denying the essential elements of the
criminal
offense in a CMPL proceeding. This section was effective
October 21,
1986, without regard to when the conviction was obtained (except
for
conviction on a plea of nolo contendere).
25. Ultimately, the Respondents did attempt to offer "evidence"
to
support this argument. See Respondents' Br. at 42, containing
citation
to Tr. at 826-827 and Respondents' Exs. 11, 13, 17, and 18.
This
"evidence" does not support their position. The reference to the
hearing
shows only when an Eye Center employee learned of the
suspension.
Further, the "exhibits" cited by the Respondents were excluded
from
evidence by the ALJ, based on Dr. Petrus' willful refusal to comply
with
the ALJ's prehearing orders concerning submission of exhibits. Tr.
at
1230-1252.
26. The I.G. also took exception to the amount of penalties the
ALJ
imposed, arguing that it was too low. See I.G.'s Br. at
90-116. The
ALJ rejected the I.G. exceptions as untimely filed and we
affirmed that
action.
27. The Respondents also raised the question of double jeopardy as
a
distinct argument within their brief. Thus, we consider that
issue
separately in Part I, section 7 of our analysis below.
28. See note 24 above.
29. The I.G. suggested that we modify FFCL No. 164 on the basis
that
Dr. Petrus did not instruct his employee to "change" the provider
number
on any claim. I.G.'s Br. at 69. We do not find it
necessary to make
this modification. The ALJ reasonably inferred that
the instruction Dr.
Petrus gave, in effect, was an instruction to change the
provider number
since the claims had already been submitted with Dr. Petrus'
number and
he instructed his employee to resubmit them using a different
provider
number.
30. The Respondents treated as "facts" Dr. Petrus' questions, asked
in
his capacity as his own lawyer. Because Dr. Petrus appeared pro se,
the
ALJ gave him considerably more leeway in presenting his case than
might
be afforded a member of the bar. This extended to his questioning
and
cross-examination of witnesses. While leading questions are
permitted
on cross-examination, it is apparent from the transcript that
Dr.
Petrus was attempting to testify through his exchanges with
various
witnesses, both his own and the I.G.'s. In effect, Dr. Petrus
sought to
interject his version of the facts into the record without
subjecting
himself to the test of cross-examination.
31. Additionally, the Respondents' argument ignores the fact that,
in
1985, Dr. Petrus pled guilty to one count of obstruction of
justice
based on his efforts to convince Dr. Baer to lie to the grand
jury.
See I.G. Exs. 106 and 107.
32. The I.G. explained that since the Eye Center was not
suspended,
checks for services identified as being performed by a physician
other
than Dr. Petrus would not have been retained by the fiscal
agents
processing the checks. I.G.'s Post-Hearing Br. at 179-180,
n.28.
33. The I.G.'s proposed addition of FFCL No. 44a arguably goes
beyond
making a merely technical correction, and, in any event, we find
it
unnecessary to add such a finding.
34. The ALJ apparently thought that, because exceptions to his
decision
had been filed, he did not have the authority to make the revisions
and
corrections himself. Ordinarily, a judge has inherent authority
to
correct clerical mistakes in his written decision at any point. In
our
view, the absence of any explicit limitation on the ALJ's
authority
meant that he had the authority to make such changes here, and
should
have done so.
35. The I.G. also asked us to strike from the record the exhibits
the
Respondents submitted with their exceptions. These exhibits
included
the notes between the ALJ and his assistant, the Malashenko decision
and
some related documents, and documents related to the 25-year
suspensions
of the Respondents. Since these exhibits were not submitted
as evidence
on disputed material facts, we see no need to
strike