SUBJECT:

Joann Fletcher Cash,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

Joann Fletcher Cash (Petitioner) appealed the November 3, 1999 decision by Administrative Law Judge (ALJ) Joseph K. Riotto. Joann Fletcher Cash, DAB CR624 (1999) (ALJ Decision). In that decision, the ALJ upheld the Inspector General's (I.G.'s) decision to exclude Petitioner for a period of 15 years from participation in Federal health care programs. The I.G. imposed the exclusion pursuant to section 1128(a)(1) of the Social Security Act (Act), based on Petitioner's criminal conviction for Medicaid fraud.

On appeal, Petitioner excepted to two of the ALJ's findings of fact and conclusions of law (FFCLS). First, Petitioner objected that the ALJ erred in finding that her counseling business had provided tutoring and counseling services that were not reimbursable under Medicaid (FFCL 2). Second, Petitioner argued that the ALJ erred in finding that an exclusion of 15 years was reasonable and appropriate (FFCL 14).

For the reasons set forth below, we uphold the proposed exclusion of 15 years. Nevertheless, we strike, as unnecessary, FFCL 2 concerning whether Petitioner provided services that were not reimbursable under Medicaid. Further, we modify the language of FFCL 14 to reflect that an ALJ review of the length of an exclusion concerns whether the length is within a reasonable range rather than whether it is reasonable and appropriate.

I. Standard of Review

In reviewing an ALJ decision, the standard of review on a disputed issue of law is whether the initial decision is erroneous; for a disputed issue of fact, the standard is whether the ALJ decision is supported by substantial evidence on the whole record. 42 C.F.R. § 1005.21(h).

II. Background and Relevant Authority

The ALJ findings to which no exceptions were taken establish the following. Petitioner was indicted for billing the Georgia Medicaid program, through her business, Hand-in-Hand Counseling Services, for psychological therapy and other psychological services which were never provided. FFCL 4. On May 18, 1998, a Judgment was entered in Petitioner's case in accord with the verdict finding her guilty of two counts of Medicaid fraud. FFCL 5. As a result of her conviction, Petitioner was sentenced to five years in prison and five years on probation, and ordered to pay restitution in the amount of $149,315.00 to Medicaid. FFCL 6. Subsequently, the I.G. notified Petitioner that the I.G. was excluding Petitioner from participating in Federal health care programs for 15 years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act. FFCL 7.

Section 1128 of the Act mandates or permits the exclusion of certain individuals from participation in any Federal health care program as defined in section 1128B(f).⁽¹⁾ Petitioner's exclusion is based on section 1128(a)(1), which mandates the exclusion of "[a]ny individual or entity that has been 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." False billing for items or services has been repeatedly held to be an offense related to the delivery of an item or service within the meaning of section 1128(a)(1). Travers v. Shalala, 20 F.3d 993, at 998 (9^th Cir. 1994); Greene v. Sullivan, 731 F.Supp. 835, at 838 (E.D. Tenn. 1990); see also, Manocchio v. Kusserow, 961 F.2d 1539, at 1540 (11^th Cir. 1992); Patel v. Shalala, 17 F.Supp.2d 662, at 664 (W.D. Ky. 1998)); Kahn v. Inspector General of U.S. Dept. of Health and Human Services, 848 F.Supp. 432, at 434 (S.D. N.Y. 1994). Section 1128(c)(3)(B) provides that a section 1128(a)(1) exclusion must be for a minimum of five years.

Section 1001.102(b) of 42 C.F.R. lists the factors which "may be considered to be aggravating and a basis for lengthening the period of exclusion." Section 1001.102(c) lists three factors which may be considered mitigating and a basis for reducing the period of exclusion to no less than five years if any of the aggravating factors would otherwise justify an exclusion longer than five years.

The regulation at 42 C.F.R.§ 1001.102 provides in relevant part:

Length of exclusion.

(a) No exclusion imposed in accordance with §§ 1001.101 will be for less than 5 years.
(b) Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion-
(1) The acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more entities of $1,500 or more. (The entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made);
(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;
(3) The acts that resulted in the conviction, or similar acts, had a significant adverse physical, mental or financial impact on one or more program beneficiaries or other individuals;
(4) In convictions involving patient abuse or neglect, the action that resulted in the conviction was premeditated, was part of a continuing pattern of behavior, or consisted of non-consensual sexual acts;
(5) The sentence imposed by the court included incarceration;
(6) The convicted individual or entity has a prior criminal, civil or administrative sanction record;
(7) The individual or entity has at any time been overpaid a total of $1,500 or more by Medicare, Medicaid or any other Federal health care programs as a result of intentional improper billings;
(8) The individual or entity has previously been convicted of a criminal offense involving the same or similar circumstances; or
(9) Whether the individual or entity was convicted of other offenses besides those which formed the basis for the exclusion, or has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.
(c) Only if any of the aggravating factors set forth in paragraph (b) of this section justifies an exclusion longer than 5 years, may mitigating factors be considered as the basis for reducing the period of exclusion to no less than 5 years. Only the following factors may be considered mitigating--
(1) The individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1,500;
(2) The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability; or
(3) The individual's or entity's cooperation with Federal or State officials resulted in--
(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,
(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or
(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

IV. Conclusion

Based on the preceding analysis, we uphold the proposed exclusion of 15 years. In so doing, we affirm those

FFCLs to which no exceptions were made; we strike FFCL 2 as unnecessary; and we modify FFCL 14 to read as follows:

14. The exclusion of 15 years imposed by the I.G. is within the range of reasonable exclusion periods under the circumstances of this case and is affirmed.

 

 

A. Findings of Fact Concerning Whether Petitioner's Business Provided Services That Were Not Reimbursable by Medicaid

Petitioner excepted to FFCL 2, which provided that "Hand-in-Hand Counseling Services [Petitioner's business] provided tutoring and counseling services that were not reimbursable by the Georgia State Medicaid Program." Petitioner argued: (1) under 42 C.F.R. § 1001.2007(d), the ALJ hearing "is not the appropriate forum [in which] to review the fact finding of the criminal jury," and (2) no direct evidence to support this finding was presented by the I.G. P. App. Br. at 2.

The apparent basis of FFCL 2 is the criminal indictment which states:

JoAnn Fletcher Case recruited children to her business, Hand-in-Hand Counseling Services, a program which provided tutoring and social services which were not reimbursable under the Georgia Medicaid Program. JoAnn Fletcher Cash then caused weekly billings for psychological therapy allegedly given to a total of approximately ninety Glynn County area children, to be submitted to . . . the Georgia Department of Medical Assistance. The billings were submitted under the provider number of [a psychologist] who worked as a consultant in the Atlanta office of Hand-in-Hand Counseling. JoAnn Fletcher Cash accepted weekly payments from the Department of Medical Assistance in the total amount of approximately $145,430 for the alleged psychological therapy and other psychological services, which were in fact not given to the children, contrary to the laws of said State . . . .

I.G. Ex. 7, at 2 (emphasis added).

Petitioner's first point is that, pursuant to 42 C.F.R. § 1001.2007(d), the ALJ hearing on the I.G.'s proposed exclusion is not the appropriate forum in which to review the fact finding of the criminal jury. That regulation provides --

When the exclusion is based on the existence of a conviction . . ., the basis for the underlying [conviction] is not reviewable and the individual . . . may not collaterally attack the underlying [conviction], either on substantive or procedural grounds, in this appeal.

We conclude that Petitioner has misunderstood the import of this regulation. Its purpose is to prevent excluded individuals from relitigating the validity of their convictions. Travers v. Shalala, 20 F.3d 993, at 998 (9th Cir. 1994). Therefore, the ALJ properly accepted and relied on Petitioner's conviction for Medicaid fraud. This conviction is established in the record by I.G. Exhibits 2 and 3 (sentencing documents for Medicaid Fraud) and I.G. Exhibit 7 (an indictment for two counts of Medicaid Fraud).

Petitioner's second point is that no direct evidence to support this finding was presented by the I.G. P. App. Br. at 2. However, we do not reach the question of whether a statement in an indictment constitutes sufficient evidence to support FFCL 2 because FFCL 2 is not necessary to the ALJ's determination that Petitioner was properly excluded pursuant to section 1128(a)(1). An exclusion pursuant to section 1128(a)(1) is based, not on direct evidence of the facts which would establish that an individual has committed a criminal offense, but rather on a conviction for a criminal offense related to the delivery of a health care item or service under Medicare or Medicaid. The evidence underlying FFCLs 3 through 5 establishes that there was such a conviction: Petitioner was indicted for billing Medicaid for services which were never provided and a judgment of guilty was subsequently entered on two counts of Medicaid fraud from that indictment. Indeed, Petitioner did not except to these FFCLs and in her brief before the Board expressly conceded that she "was convicted of two (2) counts of Medicaid fraud and is presently seeking judicial review of the convictions."⁽²⁾ P. App. Br. at 4. Therefore, we strike FFCL 2 as irrelevant.

B. Duration of the Exclusion

Petitioner also excepted to FFCL 14, which provides: "A 15-year exclusion of Petitioner [from participation in Federal health care programs] is reasonable and appropriate." As to this FFCL, Petitioner argued that (1) the five-year mandatory exclusion required by section 1128(c)(3)(B) violated the multiple punishments provision of the Double Jeopardy Clause of the Fifth Amendment of the United States Constitution; (2) the ten-year extension of the mandatory five-year exclusion also violated the Double Jeopardy Clause; and (3) the imposition of the ten-year extension was unreasonable considering aggravating and mitigating factors enumerated in the regulations. Below, we discuss each of these arguments.

(1) The imposition of a mandatory five-year exclusion from participation in Federal health care programs does not violate the Double Jeopardy Clause.

The Double Jeopardy Clause provides that no "person [shall] be subject for the same offense to be twice put in jeopardy of life or limb." U.S. Const. amend. V. The Double Jeopardy Clause protects citizens against three separate abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction, and multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440 (1989); North Carolina v. Pearce, 395 U.S. 711, 717 (1969). Petitioner argued that, since she has already been sentenced to incarceration and fined for Medicaid fraud, her exclusion constitutes a second punishment for the same offense.⁽³⁾

The current leading Supreme Court case on the relationship between the Double Jeopardy Clause and the sanction of exclusion or debarment is Hudson v. United States, 522 U.S. 93 (1997).⁽⁴⁾ As to such sanctions, the Court ruled that the Double Jeopardy Clause does not "prohibit the imposition of any additional sanction that could 'in common parlance,' be described as punishment." Hudson v. United States, 522 U.S. at 98-99 quoting United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943). Rather, it "protects only against the imposition of multiple criminal punishments for the same offense." Hudson v. United States, 522 U.S. at 99 (emphasis added).

The Hudson decision set forth the following test for determining whether a punishment constituted a criminal punishment within the ambit of the Double Jeopardy Clause. "A court must first ask whether the legislature, 'in establishing the penalizing mechanism, indicated either expressly or impliedly a preference for one label or the other.'" Hudson v. United States, 522 U.S. at 99, quoting United States v. Ward, 448 U.S. 242, at 248 (1980). Where the legislature indicated an intention to establish a civil penalty, the court should then look to "whether the statutory scheme was so punitive either in purpose or effect, as to transform what was clearly intended as a civil remedy into a criminal penalty." The Court adopted the factors set out in Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1963), as "guideposts" for making such a determination. We conclude that, under the Hudson test, the exclusion provision at section 1128(a)(1) of the Act does not violate the Double Jeopardy Clause for the following reasons.

As to whether Congress intended to enact a civil or a criminal penalty, we conclude, and Petitioner conceded, that in authorizing exclusion of individuals from Federal health care programs, Congress intended to establish a civil penalty. The current version of the Secretary's exclusion authority was enacted in the Medicare and Medicaid Patient Protection Act of 1987, Public Law No. 100-93 (MMPPA). The purpose of that act was --

to improve the ability of the Secretary and the Inspector General of the Department of Health and Human Services to protect Medicare, Medicaid, Maternal and Child Health Services Block Grant, and Title XX Social Services Block Grant programs from fraud and abuse, and to protect the beneficiaries of those programs from incompetent practitioners and from inappropriate or inadequate care.

S.Rep. No. 109, 100th Cong., 1st Sess. 1-2 (1987), reprinted in 1987 U.S.C.C.A.N. 682.

The MMPPA contained exclusion sanctions, civil monetary penalties and criminal penalties. However, Congress plainly distinguished between these types of penalties and grouped the exclusion sanctions with civil monetary penalties. For example, the exclusions and civil monetary penalties are enforced by the Secretary and her delegate, the I.G., while the criminal penalties are instituted by the Attorney General in court. The fact that Congress vested the authority to impose exclusions in the Secretary is prima facie evidence that Congress intended this to be a civil sanction. Hudson v. United States, 522 U.S. at 103, citing Helvering v. Mitchell, 303 U.S. 391, at 401 (1938); United States v. Spector, 343 U.S. 169, 178 (1952)(Jackson, J., dissenting); and Wong Wing v. United States, 163 U.S. 228, 235 (1896). Further, Congress specifically provided that the Department's administrative hearing processes, which are civil, would be used to review exclusions. Section 1128(f). Similarly, exclusions and civil monetary penalties can be part of the same civil administrative proceeding. Section 1128A(a).

Federal courts and the Board have repeatedly held that a section 1128 exclusion is civil and remedial rather than criminal and punitive. Manocchio v. Sullivan, 961 F.2d 1539, 1541 - 1543 (11th Cir. 1992); Greene v. Sullivan, 731 F.Supp. 838, 839 - 840 (E.D. Tenn. 1990); Carolyn Westin, DAB No. 1381 (1993); Douglas Schram, R.Ph., DAB No. 1382 (1992); and Janet Wallace, L.P.N., DAB No. 1126 (1992). Section 1128 seeks to protect the funds of Federal health care programs and the programs' beneficiaries and recipients from untrustworthy providers. If a provider has been convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid, that provider is presumed by Congress to be untrustworthy and a threat to federal health programs and their beneficiaries and recipients. In Greene, the court noted the "apt comparison between the exclusion remedy and professional license revocations for lawyers, physicians and real estate brokers which have the function of protecting the public and have routinely been held not to violate the double jeopardy clause." 731 F. Supp. at 840. In Manocchio, the court looked at the legislative history of this provision and concluded that its primary goal was to protect present and future beneficiaries of Federal health care programs from abusers of these programs.

The second question involves whether the statutory scheme adopted by Congress is so punitive, either in purpose or effect, as to transform what was clearly intended as a civil remedy into a criminal penalty. To evaluate this question, the Court in Hudson considered the following factors:

(1) whether the sanction has historically been regarded as punishment;
(2) whether it involves an affirmative disability or restraint;
(3) whether it comes into play only on a finding of scienter;
(4) whether the behavior to which it applies is already a crime;
(5) whether an alternative purpose to which it may rationally be connected is assignable for it;
(6) whether its operation will promote the traditional aims of punishment, retribution and deterrence; and
(7) whether it appears excessive in relation to the alternative purpose assigned.

Further, the Court ruled that this evaluation was to be made "in relation to the statute on its face" and that "only the clearest proof will suffice to override legislative intent and transform what has been denominated a civil remedy into a criminal penalty." Hudson v. United States, 522 U.S. at 94.

We conclude that there is little evidence, much less the clear proof required by the Supreme Court, that the I.G.'s exclusion authority is so punitive in form and effect as to render exclusions criminal despite Congress' intent to the contrary. Below, we review the factors set forth in Hudson.

(1) Whether an exclusion has historically been regarded as punishment.

As the Supreme Court observed, "neither money penalties nor debarment have historically been viewed as punishment." Id. at 104. Specifically, "'revocation of a privilege voluntarily granted,' such as debarment, 'is characteristically free of the punitive criminal element.'" Id., quoting Helvering v. Mitchell, 303 U.S. 391 (1938). In fact, section 1128 exclusions are similar to other types of federal exclusions or debarments which have been found to be remedial, rather than punitive, because they sought to protect a particular industry from dishonest individuals. See United States v. Stoller, 78 F.3d 710 (1^st Cir. 1996) (debarment of individual from participating in the affairs of insured depository institutions is remedial); Bai v. Shalala, 44 F.3d 489 (7^th Cir. 1995) (ban of individual from participating in the pharmaceutical industry is remedial); United States v. Reed, 937 F.2d 575 (11^th Cir. 1991)(suspension of a mail carrier after criminal punishment is remedial).

(2) Whether an exclusion involves an affirmative disability or restraint.

In Hudson, the Supreme Court ruled that an exclusion or debarment does "not involve an 'affirmative disability or restraint,' as that term is normally understood." Hudson v. United States, 522 U.S. at 104.

(3) Whether an exclusion comes into play only on a finding of scienter.

While the underlying crime or offense may or may not involve scienter, there is no scienter requirement for an exclusion. See Summit Health Limited, DAB No. 1173 (1990).

(4) Whether the behavior to which it applies is already a crime.

To avoid multiple evidentiary hearings concerning the same behavior, Congress authorized the Secretary to rely on the determinations of other fora to establish that an individual is untrustworthy. Under the MMPPA, those fora may be state or federal criminal courts, state professional licensing authorities, other federal agencies such as the Department of Defense or state agencies. Therefore, while some of the behavior which results in an exclusion may be criminal, criminal conduct is not the only basis for exclusion. The mere fact that a criminal conviction may be one basis for an exclusion does not render the sanction criminally punitive within the ambit of the Double Jeopardy Clause. Hudson v. United States, 522 U.S. at 105.

(5) Whether exclusion has a non-punitive or non-deterrent purpose.

As explained above, the goals of exclusion are clearly remedial and include "protecting beneficiaries, maintaining program integrity, [and] fostering public confidence in the program." Greene, 731 F.Supp. at 840.

(6) Whether an exclusion will promote the traditional aims of punishment, retribution and deterrence.

The prospect of exclusion may obviously deter individuals from engaging in conduct which may lead to an exclusion. Further, Petitioner points to a passage in the legislative history which expressly acknowledged that section 1128(a) should provide a clear and strong deterrent against the commission of criminal acts.

As the Supreme Court has recognized, "all civil penalties have some deterrent effect." Hudson v. United States, 522 U.S. at 102. However, the Court further stated:

the mere presence of this purpose [deterrence] "may serve civil as well as criminal goals." United States v. Usery, 518 U.S. 267, at 269 . . . . [T]he sanctions at issue here [debarment from the banking industry], while intended to deter future wrongdoing, also serve to promote the stability of the banking industry. To hold that the mere presence of a deterrent purpose renders such sanctions "criminal" for double jeopardy purposes would severely undermine the Government's ability to engage in effective regulation of institutions such as banks.

Hudson v. United States, 522 U.S. at 105.

It is clear from the legislative history of section 1128 that exclusion is primarily a mechanism by which Congress sought to enable the I.G. to prevent untrustworthy individuals from abusing Federal health care programs or the beneficiaries or recipients. The fact that exclusions have an ancillary deterrent effect does not render them criminal punishments within the meaning of the Double Jeopardy Clause.

(7) Whether exclusion appears excessive in relation to its remedial purpose.

The exclusion scheme set forth in section 1128 of the Act and the implementing regulations does not appear excessive in relation to its remedial purpose.

Section 1128 identifies four types of offenses (conviction of program related crimes, conviction relating to patient abuse, felony conviction relating to health care fraud, and felony conviction relating to controlled substances) which result in mandatory five-year exclusions. It identifies 15 other types of conduct which may result in permissive exclusions. Additionally, the Secretary has promulgated regulations concerning the factors which should be used in establishing the length of an exclusion, to the extent that discretion is permitted. 42 C.F.R. § 1001.102. These factors go to the seriousness of the offenses and the cooperation of the offending party. They are reasonably related to the goal of determining the degree of untrustworthiness of an individual and the future threat posed by that person to the integrity of Federal health care programs.

The exclusion scheme certainly does not present the same level of disparity as the penalty scheme in Halper. There the court contrasted the amount of the government's loss ($585) with the resulting penalty of $130,000 under the False Claims Act, 31 U.S.C. §§ 3729-3730. The sort of disparity that the court found to implicate the Double Jeopardy Clause in Halper contrasts with the facts here.

For the preceding reasons, we conclude that the five-year exclusion provision of section 1128(a)(1) does not violate the Double Jeopardy Clause.

(2) The imposition of a 10-year extension of the mandatory minimum five-year exclusion from participation in Federal health care programs does not violate the Double Jeopardy Clause.

Petitioner argued that the imposition of a ten-year extension to the mandatory minimum five-year exclusion violated the Double Jeopardy Clause. Petitioner asserted that, under the standard articulated by the Supreme Court in Halper, the exclusion "cannot fairly be said to solely serve a remedial purpose." P. App. Br. at 18.

While we agree with the ALJ that the ten-year extension of Petitioner's exclusion is consistent with the Halper standard, Halper no longer provides the relevant standard. Under the current Hudson standard, a penalty must be evaluated "on its face" rather than in its application. Further, "only the clearest proof" will transform what has been denominated a civil remedy into a criminal penalty.

On its face, the I.G.'s authority to increase the length of an exclusion pursuant to section 1128(a)(1) is not so punitive, either in purpose or effect, as to transform a civil remedy into a criminal penalty. Where a provider has been convicted of a criminal offense relating to the delivery or an item or service under Medicare or Medicaid, Congress considered a minimum exclusion of five years to be required to protect federal programs. However, Congress authorized the I.G. to determine whether a longer exclusion was necessary. The fact that, under some circumstances, the I.G. determines that a longer period is necessary does not make the exclusion punitive. Rather, the additional time is determined by the I.G. to be necessary to ensure that the programs are safe from providers where aggravating factors indicate that five years may not be sufficient. If the length of the exclusion is unreasonable in light of this purpose, it may be modified by the ALJ. Therefore, the purpose of the exclusion remains remedial.

Petitioner asserted that a review of the aggravating and mitigating factors set out at 42 C.F.R. § 1001.102 and used in determining an extension of the minimum five-year exclusion "reveals that there is no remedial intent expressed." Instead, Petitioner argued, the factors focus on "the 'criminal' nature, aspects and severity of the acts." P. App. Br. at 21.

We disagree with Petitioner's characterization of the factors used to determine the length of an exclusion. Factors such as the amount of the financial loss to the government program, the length of time during which the acts were committed, significant adverse impact, premeditated patient abuse or neglect, incarceration, and other wrongdoing, go to assessing the seriousness of the past misdeeds in order to assess the nature of the future threat to the programs or patients. Similarly, the mitigating factors look to traits which would indicate less serious wrongdoing, diminished culpability and cooperativeness. Again, these are considerations one would want to use in evaluating the future trustworthiness of a provider and the nature of any future threat posed by a provider. Therefore, the factors enumerated in 42 C.F.R. § 1001.102 assist in weighing future threats to the programs and patients and are consistent with our conclusion that the function of section 1128 exclusions is remedial.

Finally, Petitioner argued that the standards used by the I.G. to set the length of an exclusion were defective because "there are no corresponding explanations nor delineations which demonstrate the relationship between these factors and the number of years added to the five-year mandatory period." P. App. Br. at 21.

In adopting standards for determining the duration of an exclusion, the I.G. was faced with the difficult task of developing standards for predicting future human behavior, i.e., when a person who had shown herself to be untrustworthy would become trustworthy. The I.G. chose to rely on predominately quantifiable standards, such as incarceration, the amount of the damage, the duration of the conduct, and prior records of wrongdoing. These standards have the advantage of being reasonably comparable from case to case. Given that no one can predict future behavior precisely, we conclude that the factors chosen by the I.G. are reasonably related to the goal of predicting trustworthiness and allow for some measure of uniformity in assessing trustworthiness in different cases. The fact that there is no formula for applying the factors does not render the system unreasonable or convert the purpose from a remedial one to one intended to punish. There is no indication in the legislative history that Congress expected the Secretary to promulgate such a formula. Rather, Congress required a minimum period of five years, granting the Secretary discretion on whether to impose an additional period. Moreover, Congress indicated that, in setting permissive exclusions, the Secretary should "take into consideration such factors as the seriousness of the offense, the impact of both the offense and the exclusion on beneficiaries, and any mitigating circumstances, such as the availability of alternate providers of needed health care services." 109 S.Rep. No. 109, 100th Cong., 1st Sess. 1-2 (1987), reprinted in 1987 U.S.C.C.A.N. 682, 693. The I.G.'s standards conform to this expectation. For example, incarceration reflects the court's evaluation of the seriousness of the offense.

(3)Imposition of a ten-year extension is reasonable considering the proven aggravating and mitigating factors.

Section 1128(f) provides that a person excluded under section 1128 is entitled to a hearing on that exclusion. The Secretary has adopted regulations governing such hearings and the ALJ's scope of review. Section 1001.2007(a)(1) provides:

. . . an individual . . . excluded under this Part may file a request for a hearing before an ALJ only on the issues of whether:
(i) The basis for the imposition of the sanction exists, and
(ii) The length of exclusion is unreasonable.

Further, the preamble to the regulations governing exclusions states:

The OIG's broad discretion [over exclusions] is also reflected in the language of [§ 1001.2007(a)(1)(ii)], restricting the ALJ's authority to review the length of an exclusion imposed by the OIG.⁽⁵⁾ Under that section, the ALJ's authority is limited to reviewing whether the length is unreasonable. So long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule. We believe that the deference [§ 1001.2007(a)(1)(ii)] grants to the OIG is appropriate, given the OIG's vast experience in implementing exclusions under these authorities.

57 Fed. Reg. 3298, 3321 (1992).

We therefore consider here whether the record supports the ALJ's finding that the 15-year exclusion imposed by the I.G. fell within a reasonable range under the circumstances of this case. Gerald A. Snider, M.D., DAB No. 1637 (1997); Frank A. DeLia, D.O., DAB No. 1620 (1997); Barry D. Garfinkel, M.D., DAB No. 1572 (1996).⁽⁶⁾

Petitioner argued that the 10-year extension was unreasonable in light of her prison sentence; her lack of involvement in any other criminal, civil or administrative wrongdoings; her 30 years of training and employment in the social service field; the fact that her sentence precluded her participation in financial management of public funds; and the fact that federal health care funds "permeate the social services field" so that an exclusion could "virtually deny her the opportunity to continue her life's work as a social worker." P. App. Br. at 16.

We reject Petitioner's argument for the following reasons.

Despite Petitioner's assertions of dedication to her profession and an otherwise law-abiding life, she was convicted of fraud against the Medicaid program, sentenced to prison, and ordered to make restitution in the amount of $149,315. In the face of such a conviction, the I.G. is required by law to exclude her as untrustworthy for five years and to evaluate her future trustworthiness pursuant to the factors set forth at 42 C.F.R. § 1001.102.

The facts established by the I.G. trigger three of the aggravating factors set out at 42 C.F.R. § 1001.102(b) - financial loss to a government program of $1,500 or more; acts committed over a period of one year or more; and a sentence including incarceration. Petitioner raised no exceptions to the ALJ's findings regarding these factors.

While Petitioner cited reasons why, in her opinion, she should not be excluded for 15 years, she failed to relate those reasons to the mitigating factors set out at 42 C.F.R. § 1001.102(c). Those factors include a misdemeanor conviction resulting in less that $1,500 loss; diminished capacity reflected in the record of the criminal proceedings, and cooperation in investigations of fraud in health care programs. The ALJ properly concluded that none of the evidence presented by Petitioner would support a finding that any of these mitigating factors was present.

Given the substantial nature of the aggravating factors present here and the absence of any mitigating factor recognized in the regulations, we conclude that the ALJ did not err in finding that an exclusion of 15 years was within a reasonable range of what was required to protect Federal health care programs from Petitioner.

Petitioner's assertion that she will be denied work as social worker because federal health care funds "permeate the social services field" does not support a conclusion that the ALJ erred in making this finding. Petitioner App. Br. at 17. First, there is no evidence in the record to support this representation. Second, the point of the section 1128 exclusion mechanism is to prevent untrustworthy individuals from being involved with these programs. The possibility that this may have a dramatic impact on Petitioner's or other excluded individuals' future employment opportunities is a logical consequence of an exclusion. Petitioner is arguably in no worse position than other excluded individuals whose prior employment was exclusively in health care since federal funding also permeates the health care field. Moreover, even if an exclusion may have a more dramatic impact on Petitioner because her profession puts her in a position to potentially harm more federal programs, this does not undercut a determination about the period of time needed to protect those programs.

Judith A. Ballard

M. Terry Johnson

Donald F. Garrett
Presiding Board Member

1. Section 1128B(f) defines "Federal health care program" as --

(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5, United States Code); or
(2) any State health care program, as defined in section 1128(h).

Section 1128(h) defines "State health care program" as Medicaid, the Maternal and Child Health Services Block Grant, Block Grants to States for Social Services, and the State Children's Health Insurance Program. Unless the context indicates otherwise, we use the term "Medicaid" to refer to all programs listed in section 1128(h).

2. The fact that an individual is seeking appellate review of a conviction has no bearing on an exclusion proceeding. If Petitioner's conviction is reversed or vacated on appeal, she is entitled to retroactive reinstatement in the Medicare program. See 42 C.F.R. § 1001.3005(a)(1).

3. We note that the doctrine of double jeopardy protects individuals only against multiple prosecutions by the same sovereign and therefore is not implicated where the federal government imposes an exclusion based upon a state conviction. The Supreme Court has uniformly held that the states are separate sovereigns with respect to the federal government because each state's power to prosecute is derived from its own "inherent sovereignty," not from the federal government. See Abbate v. United States, 359 U.S. 187, 193-194. Petitioner was convicted and sentenced by the State of Georgia while her exclusion is the result of the action of the federal government. Therefore, the double jeopardy issue in this case could have been resolved under the doctrine of dual sovereigns. See Douglas Schram, R.Ph., DAB No. 1372 (1992).

4. Petitioner and the I.G. originally relied exclusively on United States v. Halper, which has been overruled by Hudson. The Board requested and the parties filed additional briefing on the impact of Hudson.

Halper has been discussed repeatedly in Board decisions involving Double Jeopardy challenges to the mandatory exclusion provisions of section 1128. In Halper, a physician was convicted of defrauding the Medicare program on sixty-five separate occasions, fined, and sentenced to prison. Subsequently, the government brought a civil suit against Dr. Halper under the False Claims Act, 31 U.S.C. §§ 3729-3730, seeking damages plus a penalty of over $130,000 ($2,000 per violation). The court contrasted the amount of the government's loss ($585) with the amount of the penalty sought and concluded that a civil penalty may constitute punishment "when the sanction as applied to the individual case serves the goals of punishment." United States v. Halper, 490 U.S. at 448. "[A] civil sanction that cannot fairly be said solely to serve a remedial purpose, but rather can only be explained as also serving either retributive or deterrent purposes, is punishment, as we have come to understand the term." Id.

Federal courts and the Board have repeatedly ruled that under the Halper test, I.G. exclusions do not violate double jeopardy. Manocchio v. Sullivan, 961 F.2d 1539, 1541 - 1543 (11th Cir. 1992); Greene v. Sullivan, 731 F. Supp. 838, 839 - 840 (E.D. Tenn. 1990); Carolyn Westin, DAB No. 1381 (1993); Douglas Schram, R.Ph., DAB No. 1382 (1992); and Janet Wallace, L.P.N., DAB No. 1126 (1992). However, in Hudson, the Supreme Court expressly disavowed the Halper approach and adopted a review standard which makes a finding of double jeopardy even less likely.

Additionally, Petitioner relied on United States v. Stoller, 78 F.3d 710 (1^st Cir. 1996). That case has also been superseded by Hudson.

5. While the preamble refers to section 1001.2007(a)(2), it is apparent from the text of that section and section 1001.2007(a)(1)(ii), that the preamble was actually discussing the significance of section 1001.2007(a)(1)(ii), which deals with the ALJ's review of the length of the exclusion.

6. We recognize that ALJs have raised questions concerning the standard of review articulated in these decisions. See Narendra M. Patel, M.D., DAB CR631 (1999); Dionisio Lazaro, M.D., DAB CR 603 (1999); Arie Oren, M.D., DAB CR564 (1999); and Howard Schreibstein, D.P.M., DAB CR517 (1998). Specifically, in Schreibstein, the ALJ questioned whether the Board meant to preclude de novo reviews by the ALJs concerning the reasonableness of an exclusion. Schreibstein, DAB CR517, at 1-2.

Our decisions recognize, however, that under the regulatory scheme promulgated by the Secretary, an ALJ conducts a de novo hearing as to the facts relating to the basis for the imposition of an exclusion and the facts relating to the aggravating and mitigating factors for determining the length of the exclusion. The ALJ must determine whether the length of exclusion is unreasonable based on the facts as found by the ALJ. See Garfinkel. As explained by the Secretary in the preamble, that decision entails considering, in light of the facts as found by the ALJ, whether the amount of time chosen by the I.G. is within a reasonable range. The fact that the ALJ might have arrived independently at a different number of years should not change the length of the exclusion from that set by the I.G. unless the ALJ also determines that the length of time set by the I.G. is not within a reasonable range. In context, our reference in Snider to the ALJ's having improperly made a de novo decision regarding the length of the exclusion referred simply to the ALJ's there viewing his role as independently setting the length of the exclusion he thought would best accomplish the statutory goals, rather than limiting the scope of his review to whether the length of the time set by the I.G. fell within a reasonable range, given the facts found by the ALJ.