Shanti Jain, M.D., DAB No. 1398 (1993)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Appellate Division

In the Case of:

Shanti Jain, M.D.,
Petitioner,
- v. -
The Inspector General.

DATE: March 23, 1993
Docket No. C-92-092
Decision No. 1398

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE
DECISION

Shanti Jain, M.D., (Petitioner) appealed to the Departmental Appeals
Board (Board) the October 20, 1992 decision by Administrative Law Judge
(ALJ) Joseph K. Riotto. See Shanti Jain, M.D., DAB CR237 (1992) (ALJ
Decision). The ALJ affirmed the Inspector General's (I.G.'s) exclusion
of Petitioner from participation in Medicare and any State health care
programs under section 1128(a)(1) of the Social Security Act (Act). 1/
The exclusion was for the mandatory minimum of five years under section
1128(c)(3)(B) of the Act.

The record in this appeal consists of the record before the ALJ, the ALJ
Decision and the parties' briefs to the Board. Based on the following
analysis, we uphold Petitioner's mandatory exclusion of five years. We
affirm and adopt all findings of fact and conclusions of law (FFCLs) in
the ALJ Decision, except FFCLs 8 and 9, which we modify for purposes of
accuracy and clarity.

Background

During the period at issue, Petitioner was a psychiatrist and a licensed
physician in the State of New York. On February 7, 1991, in the New
York Supreme Court, Bronx County, Petitioner pled guilty to, and was
convicted of, two counts of offering a false instrument for filing
(second degree). The State alleged in its indictment that Petitioner
had submitted claims to Medicaid for medical care and treatment of
Medicaid patients when such care and treatment had not been provided.
Petitioner was sentenced to three years' probation plus a $250 fine.
New York had previously suspended Petitioner from participation in the
State Medicaid program effective October 26, 1988 as a result of the
actions which led to her indictment and conviction. 2/

The I.G. advised Petitioner in a letter dated July 29, 1991, that as a
result of her conviction, the Department was required to exclude her
from participating in Medicare and Medicaid for not less than 5 years.
The letter then stated:

The purpose of this letter is to furnish you an opportunity to
provide us with any information that you feel we should consider
as mitigating in nature. If there are any facts you believe we
should consider before we determine the period of exclusion, you
should present them in writing to this office.

* * *

You have 30 days from the date of this letter to submit any
information on your behalf before we make the final
determination and issue the final notice of exclusion.

I.G. Exhibit (Ex.) 4.

Petitioner requested an extension of time in which to reply to the
I.G.'s July 29, 1991 letter, I.G. Ex. 5, and on October 11, 1992
Petitioner submitted her reply. Petitioner argued in her submission
that she should not be excluded at all because her offense "did not
involve any fraud, neglect or abuse, and did not relate to her
participation in the State Medicaid Program." I.G. Ex. 6.

Subsequently on February 13, 1992, the I.G. notified Petitioner of her
exclusion from participation in Medicare and Medicaid.


That notice stated:

Your period of exclusion was arrived at by taking into
consideration the fact that you were convicted of a criminal
offense related to the delivery of a health care item or
service, and the fact that our records do not contain evidence
of any aggravating circumstances. Therefore, as required by
section 1128(c)(3)(B) of the Act, your exclusion period will be
for the statutory 5-year period.

I.G. Ex. 7.

Petitioner subsequently appealed her exclusion to the ALJ, and the ALJ
affirmed the exclusion. The ALJ Decision made nine FFCLs. The first
six were summarized above. The ALJ also found that Petitioner had been
convicted of a criminal offense related to the delivery of an item or
service under Medicaid even if there was no proof of fraudulent intent
on her part. FFCL 7. The ALJ noted that he did not have the authority
to alter the effective date of an exclusion to remedy tardiness or
misfeasance by the I.G. FFCL 8. Finally, the ALJ found that Petitioner
was not entitled to relief based on the fact that the I.G. sent her a
notice of intent to exclude which invited her to state any mitigating
factors she believed to be applicable to her case. FFCL 9. Concluding
that there were no material and relevant factual issues in dispute, the
ALJ granted the I.G.'s motion for summary disposition of Petitioner's
appeal.

Petitioner's Exceptions

Petitioner filed 10 exceptions to the ALJ Decision, several of which are
interrelated. These exceptions raise the following issues:

o whether the I.G.'s letter of July 29, 1991 requesting mitigating
information erroneously delayed imposition of the exclusion and, if
so, whether the ALJ has the authority to change the effective date of
the exclusion based on the July 29, 1991 letter;

o whether it is an element of the offense to which Petitioner pled
guilty that she made false representations "knowingly and
intentionally;"

o whether the ALJ erred in failing to address certain constitutional
issues;

o whether the ALJ erred in granting the I.G.'s motion for summary
disposition of Petitioner's appeal.


We address Petitioner's arguments relating to each of these issues
below.

Analysis

1. The I.G. had the discretion under the statute and regulations to
consider mitigating information in setting the length of an exclusion,
and did not err in requesting mitigating information as part of the
process leading to his exclusion determination.

Petitioner argued on appeal that the ALJ improperly sidestepped the
issue of whether the I.G. erred when he requested mitigating information
before making his exclusion determination. Thus, Petitioner contended
that the ALJ should have modified the effective date of the exclusion to
remedy what Petitioner concluded had been an erroneous notice since the
notice conceivably delayed the exclusion determination by over six
months. We conclude that the I.G. had the discretion to consider
mitigating information as part of his determination of the proper length
of the exclusion and that he therefore did not err in requesting
mitigating information from Petitioner before making his exclusion
determination.

Petitioner's exclusion was based on section 1128(a) of the Act, which is
titled "Mandatory Exclusion." Subsection (a)(1) provides that the
Secretary of the Department of Health and Human Services shall exclude
individuals or entities "convicted of a criminal offense related to the
delivery of an item or service under Title XVIII or any State health
care program." But for exceptions not pertinent here, section
1128(c)(3)(B) requires that the minimum period of exclusion under
1128(a) "shall be not less than five years." Section 1128(c) provides
in pertinent part that an exclusion shall be effective at such time and
upon such reasonable notice "as may be specified in regulations."

Here, although Petitioner raised a subsidiary issue about the mental
state required by the statute under which she was convicted (which we
discuss below), she did not take exception to the ALJ's fundamental
conclusion that she was convicted of a criminal offense which requires
imposition of a mandatory exclusion. One of her arguments instead is
that the five-year exclusion period should be based on the date of the
I.G.'s July 29, 1991 letter requesting mitigating information. However,
the primary purpose of the I.G.'s July 29, 1991 letter was to notify
Petitioner of the opportunity to present mitigating information. It did
not purport to be an actual notice of exclusion. Moreover, the I.G. was
clearly acting within the discretion afforded by statute and regulation
in requesting and considering mitigating information as part of the
process of determining the length of Petitioner's exclusion.

Petitioner's conviction required an exclusion of "not less than five
years." Section 1128(c)(3)(B) of the Act. Thus, the I.G. had the
discretion to consider whether aggravating factors surrounding the
criminal offense and its impact on health care programs might justify a
higher exclusion than the mandatory minimum and whether those
aggravating factors might be offset in whole or in part by mitigating
factors. While the I.G. could have first decided whether this case
presented aggravating factors and then looked at mitigating information
only if aggravating factors had been determined to exist, there was no
requirement for a bifurcated decision-making process in the statute or
in the regulations being applied at the time of the July 29, 1991
notice. 3/ On the contrary, the regulations at 42 C.F.R. . 1001.125(b)
(1991) required the I.G. to consider several factors in setting the
earliest date on which an excluded person could seek reinstatement,
including "[w]hether there are any mitigating circumstances." These
factors might still have applicability to a mandatory exclusion under
section 1128(a)(1) since the I.G. could decide that such an exclusion
should be for a longer period than the minimum of five years. Section
1001.125(b), moreover, required consideration of these factors before
the notice of exclusion because it expressly required the notice of
exclusion to specify the earliest date for reinstatement. See also
section 1001.123(b)(2), which requires the notice to specify the
duration of the exclusion and "the factors considered in setting the
duration."

Petitioner argued that the regulation on the notice of exclusion and the
effective date for exclusions (section 1001.123) precluded the
development of mitigating information that occurred in this case. That
regulation, however, concerned the type of notice that must be provided
after the I.G. had determined that he had conclusive "information" of a
conviction and after the I.G. had considered the factors set out in
section 1001.125. It in no way precluded the development of mitigating
information prior to a notice of exclusion. Accordingly, we conclude
that the I.G.'s efforts to develop mitigating information prior to
issuing the notice of exclusion here were clearly within the I.G.'s
discretion under the statute and the regulations then being applied.

Further, the record does not support a finding, as Petitioner suggested,
that the I.G. had actually determined that no aggravating factors
existed in this case when the I.G. requested mitigating information.
Petitioner seems to imply that such a determination had already been
made because the I.G. ultimately determined on February 13, 1992 that
the I.G.'s "records" did not contain evidence of aggravating factors.
It was entirely a matter of the I.G.'s discretion to determine at what
point in time his records were complete enough to permit him to make a
finding on the existence of the aggravating factors. The primary
evidence of such a finding here is the actual notice of exclusion dated
February 13, 1992. Certainly, the letter of July 29, 1991, in no way
indicates that the I.G. had already found that no aggravating factors
existed here or even that he already had a complete set of records that
would enable him to make a definitive finding on aggravating factors.

In short, we find that the I.G. acted within the discretion afforded him
by statute and regulation in requesting mitigating information before
completing his exclusion determination and issuing the notice of
exclusion. 4/ Since FFCLs 8 and 9 of the ALJ Decision left open the
possibility that the I.G. may have acted in error, we modify them as
follows:

8. An administrative law judge has no authority to alter the
effective date of exclusion designated by the I.G. where the
I.G. acted within the discretion afforded by statute and
regulation in setting the effective date.

9. The I.G. acted within the discretion afforded by statute and
by the regulations then being applied when he requested
mitigating information before completing the exclusion
determination.

2. It was an element of the offense to which Petitioner pled guilty
that she had to make false representations "knowingly."

Petitioner argued that the ALJ mischaracterized the mental state
required by the offense that led to Petitioner's exclusion. The ALJ had
stated in his analysis that an element of Petitioner's offense required
her to make false representations to Medicaid "knowingly and
intentionally." ALJ Decision at 3. Petitioner argued, citing section
175.30 of the New York Penal Code, that her offense as defined by
statute only required her to make false representations "knowingly."
Petitioner's statement of the elements of the offense is correct.
However, the reference to knowingly and "intentionally" in the ALJ's
analysis was clearly harmless. The ALJ correctly concluded that proof
of criminal intent is not required to bring a conviction within the
ambit of section 1128(a)(1). Indeed, section 1128(a)(1) requires only
the conviction of a program-related offense and does not require any
particular mental state. In any event, the offense at issue here did
not hold Petitioner to a standard of strict liability, but rather
required at a minimum that her false representations be "knowing."
Thus, Petitioner in effect admitted through her guilty plea that she
knew the representations were false at the time that they were made.

3. The ALJ did not err in failing to resolve certain constitutional
issues.

Petitioner also argued that the ALJ erred in failing to resolve in her
favor certain constitutional issues she had raised. These issues
generally concerned whether application of the requirements of section
1128 of the Act in this instance would violate due process protections
of the U.S. Constitution. We find that the ALJ could properly determine
he did not have authority to resolve these issues based on the limited
scope of his review as set out in 42 C.F.R. . 1001.2007. See also 42
C.F.R. . 1001.128(a) (1991).

4. The ALJ did not err in granting the I.G.'s motion for summary
disposition of Petitioner's appeal.

Finally, Petitioner argued that the ALJ erred in granting the I.G.'s
motion for summary disposition of Petitioner's appeal and in denying
Petitioner's request for a factual hearing. We conclude that the ALJ
properly granted the I.G.'s motion for summary disposition because
Petitioner's appeal raised no material and relevant issues of disputed
fact. Issues such as the length and effect of Petitioner's suspension
from New York health care programs are simply irrelevant to her
mandatory exclusion under section 1128(a)(1) of the Act.

Conclusion

Based on the foregoing analysis, we affirm the ALJ Decision. We affirm
and adopt each of the FFCLs, except for FFCLs 8 and 9, which we here
modify for accuracy and clarity.


_________________________ Judith
A. Ballard


_________________________ M.
Terry Johnson


_________________________ Donald
F. Garrett Presiding Board
Member

1. "State health care program" is defined in section 1128(h) of the Act
and includes the Medicaid program under title XIX of the Act. Unless
the context indicates otherwise, we use the term "Medicaid" to refer to
all programs listed in section 1128(h).

2. The foregoing background information was derived from FFCLs 1-6 of
the ALJ Decision. Petitioner did not expressly take exception to any of
these FFCLs and we affirm and adopt them without further discussion.

3. The July 29, 1991 notice informed Petitioner that pending the
promulgation of final rules implementing amendments to the Act
concerning exclusions in Public Law 100-93, the provisions of 42 C.F.R.
Part 1001.122 et seq. would be applied to exclusions on an interim basis
to the extent not inconsistent with the statutory amendments, and as
provided in the exclusion notice letter. The final rules implementing
the amendments were subsequently promulgated on January 29, 1992 (57
Fed. Reg. 3298).

4. We also find that Petitioner was not prejudiced by the effective
date of the exclusion, which was actually only about a year after her
conviction. An exclusion under section 1128 of the Act affects an
individual's participation in the Medicare and Medicaid programs as of
the effective date of the exclusion and from that perspective the
six-month delay that occurred here did not prejudice Petitioner since
her participation in either program was not restricted by section 1128
during that time. Even though New York had suspended Petitioner from
participation in state health care programs, including Medicaid,
effective October 26, 1988, her participation in both the Medicaid and
Medicare programs remained unaffected by section 1128 until 20 days
after the February 13, 1992 notice. Moreover, New York's earlier
suspension of Petitioner from state health care programs is irrelevant
under section 1128. The statute and the regulations provide no
authority for any reduction in the mandatory exclusion period based on
prior suspensions or exclusions under state authority in state health
care programs. Moreover, such exclusions or suspensions are
substantively and procedurally different from a section 1128 mandatory
exclusion, since, among other things, they do not specifically cover an
individual's participation in the federally administered Medicare
program.

We also note that Petitioner actually responded to the July 29, 1991
letter by arguing that no action be taken to exclude her. I.G. Ex. 6.
Thus, Petitioner effectively had a briefing opportunity on the legal
merits of her exclusion before receiving her notice of