Richard G. Philips, D.P.M., DAB No. 1279 (1991)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Appellate Division

In the Case of:
Richard G. Philips, D.P.M.,
Petitioner,
- v. -
The Inspector General.

DATE: November 12, 1991
Docket No. C-347
Decision No. 1279

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE
DECISION

Richard G. Philips, D.P.M. (Petitioner) requested review of a June 7,
1991 decision by Administrative Law Judge (ALJ) Steven T. Kessel. See
Richard G. Philips, D.P.M., DAB CR133 (1991) (ALJ Decision). The ALJ
upheld a determination by the Inspector General (I.G.) excluding
Petitioner from participation in the Medicare program and directing his
exclusion from State health care programs for five years.

The exclusion was based on sections 1128(a)(1) and 1128(c)(3)(B) of the
Social Security Act (Act). Section 1128(a)(1) mandates exclusion from
Medicare and Medicaid of any individual or entity "convicted of a
criminal offense related to the delivery of an item or service under
title XVIII [Medicare] or under any State health care program." 1/
Section 1128(c)(3)(B) establishes that "[i]n the case of an exclusion
under subsection (a), the minimum period of exclusion shall be not less
than five years . . . ." The exclusion here was based on Petitioner's
conviction by the State of New York of a felony charge of filing a false
instrument (admittedly, a false claim for a Medicaid item or service).
At the time of conviction, the State suspended Petitioner from the New
York Medicaid program for two years.

The record in this case consists of the record before the ALJ, the ALJ
Decision, and the parties' briefs to this Panel. Based on the following
analysis, we affirm the ALJ Decision.

Analysis

The ALJ Decision addresses four major issues, concluding that--

1. Petitioner was convicted of a criminal offense within the
meaning of section 1128(a)(1) of the Act.

2. Petitioner may not collaterally challenge his state
conviction in this proceeding.

3. The I.G. is not barred from imposing and directing an
exclusion against Petitioner by a state certificate of relief
from civil disabilities.

4. [The ALJ does] not have authority to change the effective
date of the exclusion.

The ALJ Decision sets out 19 Findings of Fact and Conclusions of Law
(FFCLs). The ALJ found that the material facts were undisputed. The
ALJ's legal analysis is based on the plain wording of the Act and
implementing regulations, as well as clear precedent.

On appeal, Petitioner did not take exception to specific FFCLs, nor did
he allege any specific error in the ALJ's analysis. Petitioner instead
raised two general lines of argument.

First, Petitioner contended that the federal exclusion period here
should be adjusted based on various equitable factors and that the ALJ
had recognized that the I.G. could adjust the federal remedy. The
factors Petitioner pointed to include: 1) the circumstances surrounding
the State action to impose only a two-year suspension from Medicaid and
to exempt Petitioner from certain disabilities normally associated with
a conviction; 2) the I.G.'s delay of 16 months in acting on the State
conviction; 2/ 3) the effects of the exclusion on Petitioner's ability
to support himself and his family.

This argument, however, is premised on Petitioner's erroneous
interpretation of a footnote in the ALJ Decision. The footnote simply
refers to the I.G.'s discretion to reduce an exclusion period when it
exceeds the mandatory five-year period. ALJ Decision at 8, n. 4. This
does not mean that the I.G.--or the ALJ--has discretion to reduce the
five-year period, which is mandated by statute, or to adjust the
effective date of an exclusion, which is set by regulation. To the
contrary, the ALJ clearly and properly concluded that both the exclusion
period and the effective date applied here were mandated. See Chang,
supra; David S. Muransky, D.C., DAB 1227 (1991).

Petitioner also argued that the exclusion here could be waived because
his area of practice (podiatry) was a source of a specialized service in
the community. The I.G. pointed out that this issue was not raised
before the ALJ. In any event, this argument has no merit.

Section 1128 of the Act (42 U.S.C. 1320a-7) refers to specialized
services in the community in two contexts. The first is in subsection
1128(b)(14), which specifies an exception to a provision authorizing
permissive exclusions of individuals who have defaulted on certain
scholarship obligations or loans. This exception is irrelevant to a
mandatory exclusion under subsection 1128(a)(1). The second reference
to specialized services appears in subsection 1128(c)(3)(B). This
provision authorizes the Secretary "upon the request of a State" to
waive an exclusion under subsection 1128(a)(1) "in the case of an
individual or entity that is the sole community physician or sole source
of essential specialized services in a community . . . ." Petitioner's
assertion that podiatry is a source of a specialized service in the
community cannot reasonably be read as tantamount to an assertion that
he is the sole source of essential services. Moreover, while Petitioner
pointed out that New York had imposed only a two-year exclusion (which
he characterized as a waiver of a longer exclusion), Petitioner did not
assert that New York had requested that the Secretary waive the federal
five-year exclusion.

Conclusion

Based on the foregoing analysis, we affirm the ALJ Decision and affirm
and adopt the ALJ's FFCLs.


Donald F. Garrett


Theodore J. Roumel


Judith A. Ballard Presiding
Panel Member

1. "State health care program" is defined by section 1128(h) of the
Act to cover several federally-financed programs including Medicaid. We
use the term "Medicaid" to refer to all State health care programs from
which Petitioner was excluded.

2. For a discussion of various arguments based on a similar delay, see
Samuel W. Chang, M.D., DAB 1198 (1990). In that case, the petitioner
did not receive formal notice that he was excluded until 19 months after
the date he received the notice of conviction, but the exclusion was
upheld and was made effective 15 days from the date on the formal notice
of the exclusion, as required by 42 C.F.R.