SUBJECT:

Brian Bacardi, D.P.M.,

Petitioner,

The Inspector General

Civil Remedies CR644
App. Div. Docket No. A-2000-52
Decision No. 1724

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

Brian Bacardi (Petitioner), a podiatrist, appealed the February 11, 2000 decision of Administrative Law Judge (ALJ) Joseph Riotto in Brian Bacardi, D.P.M., DAB CR644 (2000) (ALJ Decision). The ALJ sustained the February 27, 1998 determination of the Inspector General (I.G.) to exclude Petitioner from participating in Medicare, Medicaid and all federal health care programs until Petitioner obtains or reacquires a license to practice medicine or to provide health care in the state of Tennessee. The ALJ found that the I.G. was authorized to exclude Petitioner under section 1128(b)(4)(A) of the Social Security Act, which permits the I.G. to exclude an individual "whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity."

On appeal, Petitioner maintained that the ALJ erred in finding that he lost his license "for reasons bearing on" his professional competence, professional performance, or financial integrity. Petitioner also argued that the ALJ erred in rejecting his argument that the exclusion was not authorized because he did not receive notice of the I.G.'s intent to exclude him.⁽¹⁾

The Board's standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record. The standard of review on a disputed issue of law is whether the initial decision is erroneous. 42 C.F.R. § 1005.21(h).

For the reasons discussed below, we conclude that the ALJ did not err in either of the respects alleged. Accordingly, we affirm the ALJ Decision, including each and every FFCL.

Background

The following facts concerning the circumstances of Petitioner's exclusion are undisputed. Petitioner held a license to practice podiatry from the State of Tennessee. In December 1993, the Tennessee Department of Health, on behalf of the Tennessee Board of Registration of Podiatry (Tennessee Board), commenced an investigation of Petitioner based on complaints from patients. On February 6, 1993, before any charges were brought against him, Petitioner "retired" his Tennessee license. The Tennessee Board issued a "Notice of Charges" to Petitioner on March 13, 1995, alleging that Petitioner treated medical conditions that were outside the scope of podiatry, charged patients for medical materials he did not supply, performed procedures on patients without consent, and charged for procedures that were not performed. On January 24, 1996, Petitioner and the Tennessee Board entered into an agreement whereby Petitioner agreed never to reactivate his Tennessee license.

The I.G. mailed a notice of intent to exclude to Petitioner dated August 7, 1997 (I.G. Ex. 5), advising Petitioner that the I.G. was considering excluding him pursuant to section 1128(b)(4) of the Act. The I.G. issued a notice of exclusion dated February 27, 1998 (I.G. Ex. 6), stating that Petitioner was being excluded under section 1128(b)(4) of the Act. The notice further stated that the exclusion "is effective 20 days from the date of this letter and will remain in effect as long as your license is revoked, suspended, or otherwise lost." According to the I.G., Petitioner indicated in a letter to the I.G. dated February 11, 1999 that he had recently received the notice of exclusion but alleged that he had never received the notice of intent to exclude. See letter dated April 16, 1999, from Libercci to Jeddeloh. The I.G. responded by giving Petitioner an opportunity to submit any information or material which he believed relevant to the decision to exclude him. See id. Petitioner replied on March 30, 1999, alleging that the notice of intent to exclude was sent to the wrong address and asking that the exclusion be reversed on this basis. Petitioner submitted with his reply documents intended to show that, at the time the notice of intent to exclude was mailed to Petitioner, the Medicare fiscal intermediary was using an address for Petitioner different from the address used by the I.G. The I.G. advised Petitioner by letter dated April 16, 1999 that his March 30, 1999 letter was being forwarded to the Departmental Appeals Board as a request for an ALJ hearing.⁽²⁾

Section 1128(b)(4) of the Act permits the Secretary to exclude any individual or entity:

(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity, or

(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and that proceeding concerned the individual's or entity's professional competence, professional performance, or financial integrity.

The implementing regulations at 42 C.F.R. § 1001.501(a) contain language paralleling the statutory language.⁽³⁾

Conclusion

Based on the foregoing analysis, we affirm the ALJ's determination that the exclusion was authorized under section 1128(b)(4)(A) of the Act and uphold the exclusion.

1. The ALJ did not err in finding that Petitioner lost his license "for reasons bearing on" his professional competence, professional performance, or financial integrity.

The ALJ found that the I.G. was authorized to exclude Petitioner pursuant to section 1128(b)(4)(A) of the Act. Citing William I. Cooper, M.D., DAB No. 1534 (1995), the ALJ stated that the "otherwise lost" language in section 1128(b)(4)(A) encompasses any loss of a license that occurs by a means other than revocation or suspension by a licensing authority.⁽⁴⁾ The ALJ found that Petitioner's agreement never to seek reactivation of his license constituted such a loss. The ALJ also concluded that "Petitioner's loss of his medical license occurred for reasons bearing on his professional competence, professional performance, or financial integrity" within the scope of section 1128(b)(4) of the Act since the charges in the Tennessee Board's Notice of Charges "related to Petitioner's professional competence, professional performance, and financial integrity." ALJ Decision at 6.⁽⁵⁾

Petitioner argued on appeal that he did not lose his license in Tennessee "because of any threat of apprehension of loss of license," but rather "voluntarily resigned from his license" without knowing that a licensure action was imminent. Petitioner's appeal dated 4/14/00, at 2. Petitioner's exception misapprehends the factual basis for the ALJ's finding, however. The ALJ found that section 1128(b)(4)(A) applied based on Petitioner's signing of the 1996 agreement never to seek reactivation of his license. In arguing that Petitioner voluntarily resigned from his license without knowing that a licensure action was imminent, Petitioner was clearly referring instead to his 1993 retirement of his license. While Petitioner may be correct that section 1128(b)(4)(A) would not apply based on his 1993 action, his argument is simply irrelevant.

Petitioner did argue below, however, that he did not sign the 1996 agreement for reasons bearing on his professional competence, professional performance, or financial integrity. Specifically, Petitioner argued that the agreement does not contain any findings that he lacked professional competence, professional performance, or financial integrity, but merely makes reference to a notice of charges against Petitioner. Petitioner's brief dated 8/6/99, at 4. Petitioner also took the position, which is confirmed by the language of the agreement itself, that, in signing the agreement, he did not admit the truth of the charges.⁽⁶⁾

We conclude that these arguments have no merit for the following reasons.⁽⁷⁾ The 1996 agreement specifically refers to the Tennessee Board's March 13, 1995 Notice of Charges. I.G. Ex. 2, at 2. Petitioner did not except to the ALJ's finding that those charges related to Petitioner's professional competence, professional performance, or financial integrity. Clearly, but for the existence of the charges, Petitioner would have had no reason to sign the agreement. Thus, notwithstanding that Petitioner's stated reason for signing the agreement rather than contesting the charges was that he no longer wished to practice in the state, Petitioner signed the agreement (and in so doing, "otherwise lost" his license) "for reasons bearing on" his professional competence, professional performance, or financial integrity. Contrary to Petitioner's argument, this language does not require that findings be made with respect to an individual's professional competence, professional performance, or financial integrity.

2. The ALJ did not err in rejecting Petitioner's argument that the exclusion was not authorized because he did not receive notice of the I.G.'s intent to exclude him.

The ALJ rejected Petitioner's argument that the exclusion is unfair because he did not receive the I.G.'s August 7, 1997 notice of intent to exclude. The ALJ stated that Petitioner had not supported his allegation of non-receipt of this notice, noting that this "evidentiary deficiency" was underscored by "[t]he fact that the notice of intent to exclude was not returned to the I.G. as 'undeliverable'." ALJ Decision at 6. The ALJ also found that Petitioner had not demonstrated that he was prejudiced since, after Petitioner had been excluded, the I.G. informed Petitioner that she would consider any relevant information concerning the matter.

Petitioner argued on appeal that the ALJ erred in presuming Petitioner's receipt of the notice of intent to exclude, reiterating his assertion below that the notice was sent to the wrong address. Petitioner also disputed the ALJ's finding of lack of prejudice, claiming that exclusion based on "faulty notice" was in itself prejudicial and also that he would have taken action sooner to challenge the Tennessee action on which the exclusion is based. Petitioner's Br. dated 4/14/00, at 2.

Petitioner's arguments do not provide a basis for finding that the exclusion was not authorized. Section 1001.2001(a) of 42 C.F.R provides, as relevant here, that --

if the OIG proposes to exclude an individual or entity . . . , it will send written notice of its intent, the basis for the proposed exclusion and the potential effect of an exclusion. Within 30 days of receipt of notice, which will be deemed to be 5 days after the date on the notice, the individual or entity may submit documentary evidence and written argument concerning whether the exclusion is warranted and any related issues.

(Emphasis added.) The regulation does not on its face provide any opportunity for showing that the notice was not in fact received within the specified five days, nor does the regulation indicate that the lack of actual receipt could invalidate a subsequent exclusion. Indeed, the regulation states without qualification that a subsequent notice of exclusion is effective on the date of the notice (section 1001.2001(b)) and requires prompt notice to State agencies, state licensing agencies, beneficiaries, and other affected entities (sections 1001.2004, 1001.2005, and 1001.2006).⁽⁸⁾

In any event, the Petitioner cannot reasonably rely on the asserted lack of actual receipt since the record shows that Petitioner, not the I.G., bore the responsibility for any lack of receipt. In both her brief below and her brief in response to the appeal, the I.G. stated that the notice of intent to exclude was addressed to Petitioner at the Crystal Lake Road, McHenry, Illinois address on file with the State of Illinois Department of Professional Regulation. (The I.G. submitted a notice issued by the Illinois Podiatric Medical Licensing Board dated March 5, 1997 that identifies the Crystal Lake Rd., McHenry, Illinois address as Petitioner's "last known address as registered with the Department [of Professional Regulation]." I.G. Ex. 3, at 1.) The I.G. indicated that she presumed that, since Petitioner was then licensed to practice in Illinois, Petitioner would keep that Department apprised of any address change. I.G. Br. dated 8/7/99, at 15; I.G. Br. dated 4/26/00, at 5. Petitioner did not dispute that he was registered with the Department of Professional Regulation at the Crystal Lake Rd., McHenry, Illinois address when the notice of intent to exclude was sent or argue that he did not have a duty to maintain a current address on file with that Department. Thus, the ALJ's conclusion that the I.G. used a proper address on the notice of intent to exclude is supported by substantial evidence in the record. Since the I.G. acted reasonably in sending the notice of intent to exclude to Petitioner at the address on file with a state agency from whom Petitioner held a current license, it is simply irrelevant that the Medicare fiscal intermediary sent correspondence concerning matters unrelated to the status of Petitioner's license to him at another address.

Donald F. Garrett

Marc R. Hillson

Judith A. Ballard

1. Petitioner did not identify by number the findings of fact or conclusions of law (FFCLs) in the ALJ Decision to which he excepted.

2. It appears that the I.G. used the date of Petitioner's actual receipt of the notice of exclusion in determining that a hearing was timely requested in accordance with 42 C.F.R. § 1005.2(c). The date of receipt of the notice of exclusion is otherwise irrelevant since section 1001.2002(b) provides that "[t]he exclusion will be effective 20 days from the date of the notice" (emphasis added).

3. Under section 1128(c)(3)(E) of the Act, as amended by the Health Insurance Portability and Accountability Act of 1996, the length of an exclusion under section 1128(b)(4)--

shall not be less than the period during which the individual's or entity's license to provide health care is revoked suspended, or surrendered, or the individual or entity is excluded or suspended from a Federal or State health care program.

There is no dispute in this case regarding the length of the exclusion.

4. The Board in Cooper upheld an exclusion under section 1128(b)(4)(B) on facts similar to those in the instant case, but noted that the action could also have been taken under section 1128(b)(4)(A). The ALJ nevertheless found here that the I.G. was not authorized to exclude Petitioner pursuant to section 1128(b)(4)(B) because there had been no showing that the investigation begun in December 1993 rose to the level of a "formal disciplinary proceeding" within the meaning of this section. ALJ Decision at 6. This finding is unnecessary to the decision and no exception was taken to it by the I.G. We note, however, that, although no formal disciplinary proceeding was pending at the time Petitioner retired his license in 1993, the record supports a finding that a formal disciplinary proceeding on the Tennessee Board's Notice of Charges was pending when Petitioner signed the 1996 agreement, an act which can be considered a "surrender" of his license within the meaning of section 1128(b)(4)(B) as well as a loss of his license under section 1128(b)(4)(A). I.G. Exs. 1 and 2.

5. FFCL 13 states in part that "the loss of Petitioner's license to practice podiatry in the State of Tennessee bears on Petitioner's professional competence, professional performance, or financial integrity within the scope of section 1128(b)(4) of the Act." ALJ Decision at 3 (emphasis added). While this does not track the statutory language, the ALJ correctly stated in the text of his decision that Petitioner's loss of his license occurred "for reasons bearing on" his professional competence, professional performance, or financial integrity.

6. The agreement states in pertinent part: "The Respondent does not wish to practice podiatry in Tennessee and has retired his license. He contends that he is innocent of the charges and enters this Agreement as the most expedient and cost effective manner of resolving the charges." P. Ex. 2, at 8.

7. The ALJ Decision states conclusorily that such arguments had been rejected in a prior ALJ decision, citing Maurice Labbe, DAB CR488 (1997). However, that decision, like the one appealed here, fails to point to any nexus between the charges and the individual's loss of his license, instead simply relying on the finding that the charges against the petitioner directly related to his professional competence or performance. (The relevant discussion is at pages 9-10 of that decision, rather than at page 6 as indicated in the decision appealed here.)

8. The notice of intent to exclude thus serves merely to give an individual or entity an initial opportunity to show why the individual or entity should not be excluded. Petitioner did not provide any cogent explanation of why the opportunity to make this showing in the de novo proceedings before the ALJ was not sufficient.