SUBJECT:

Fereydoon Abir, M.D.,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

Fereydoon Abir, M.D. (Petitioner) appealed an August 30, 2000 decision of Administrative Law Judge (ALJ) Joseph K. Riotto. Fereydoon Abir, M.D., DAB CR694 (ALJ Decision). The ALJ affirmed the decision of the Inspector General (I.G.) to exclude Petitioner for 15 years from participation in federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) based on Petitioner's conviction for a criminal offense related to the delivery of an item or service under the Medicaid program. On appeal to the Board, Petitioner argued that the ALJ erred in finding that the New York State Department of Health's exclusion of Petitioner from the Medicaid program for a period of two years was an aggravating factor under 42 C.F.R. § 101.102(b)(6) (1998). Petitioner argued in the alternative that the ALJ's determination that a 15-year exclusion was reasonable was not supported by substantial evidence because the ALJ did not consider the quality of circumstances surrounding this aggravating factor.

For the reasons discussed below, we find that Petitioner's exclusion by New York from the Medicaid program constituted an aggravating factor under 42 C.F.R. § 1001.102(b)(8), and that the ALJ's finding that this constituted an aggravating factor under section 1001.102(b)(6) was harmless error. We further conclude that there is substantial evidence in the record to support the ALJ's determination that a 15-year exclusion was reasonable. We therefore uphold the proposed exclusion of 15 years but modify Finding of Fact and Conclusion of Law (FFCL) 14 to reflect the correct regulatory citation for the aggravating factor in question. Further, we modify the language of FFCL 16 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.

This decision is based on the parties' written submissions to the Board and on the record before the ALJ. We note that, although the ALJ Decision states that it is based on the parties' written submissions (ALJ Decision at 1), there was also an oral argument before the ALJ on June 28, 2000, which was tape recorded. However, Petitioner did not argue that the ALJ failed to consider arguments made in the oral proceedings (nor did our review of the tape show that to be the case).

Applicable Law

Section 1128(a)(1) of the Act mandates 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 as defined in section 1128B(f)."⁽¹⁾ Section 1128(c)(3)(B) of the Act provides generally that the minimum period of an exclusion under section 1128(a) shall be not less than five years. See also 42 C.F.R. § 1001.102(a). The regulations further provide that specified factors may be considered in lengthening the period of an exclusion beyond the five-year minimum for a mandatory exclusion. These aggravating factors include, as relevant to this case:

(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 . . . .

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;

* * * * *

(6) Whether the individual or entity has a documented history of criminal, civil or administrative wrongdoing;

* * * * *

(8) 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.

42 C.F.R. § 1001.102(b) (1998). Sections 1001.102(b)(6) and 1001.102(b)(8), quoted above, replaced section 1001.102(b)(5) of the regulations that were in effect before the I.G.'s December 31, 1998 notice of exclusion. The earlier regulations included as an aggravating factor "[t]he convicted individual or entity has a prior criminal, civil or administrative sanction record." 42 C.F.R. § 1001.102(b)(5) (1992). (The amended regulations included a new aggravating factor as section 1001.102(b)(4), so that former section 1001.102(b)(5) became 1001.102(b)(6).)

Factual Background⁽²⁾

Petitioner was licensed to practice medicine in the State of New York and was enrolled as a provider in the New York Medicaid program. The exclusion was based on Petitioner's December 24, 1997 conviction in the Supreme Court of New York, Kings County, for attempted grand larceny. The indictment to which Petitioner pled guilty alleged that Petitioner submitted numerous claims to the Medicaid program falsely representing that he had performed certain complex surgical repairs. On March 30, 1998, the New York State Department of Health notified Petitioner that he was being excluded from participation in the New York Medicaid program for two years as a result of his conviction. On December 31, 1998, Petitioner was notified by the I.G. that he was being excluded from participation in Medicare, Medicaid and all federal health care programs for a 15-year period pursuant to section 1128(a)(1) and 1128(c)(3)(B) of the Social Security Act. The I.G.'s notice of exclusion identified the three aggravating factors based on which the I.G. had increased the period of exclusion beyond the five-year minimum as follows:

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. It has been determined that the acts resulting in your conviction, or similar acts, resulted in financial loss to the New York State Medicaid program. You were ordered to pay restitution of $30,000.00.

2. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more. Those acts occurred from June 1992 to February 1996.

3. The convicted individual or entity has a prior criminal, civil, or administrative sanction record. The New York State Department of Health excluded you from the Medicaid program.

I.G. Ex. 1, at 1.

The ALJ Decision

The ALJ affirmed the I.G.'s determination to exclude Petitioner for 15 years. As relevant here, the ALJ made the following FFCLs:

12. The I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act.

13. Petitioner did not prove the presence of any mitigating factors.

14. The I.G. established the existence of aggravating factors under 42 C.F.R. § 1001.102(b)(1), (2), and (6).

15. The aggravating factors established by the I.G. prove Petitioner to be untrustworthy.

16. A 15-year exclusion of Petitioner is reasonable.

Elaborating on these findings, the ALJ agreed with Petitioner that, in determining that Petitioner's exclusion from the Medicaid program constituted an aggravating factor, the I.G. improperly applied the regulations in effect until October 2, 1998 rather than the amended regulations in effect when the I.G. gave notice of the exclusion. However, the ALJ determined that this nevertheless constituted an aggravating factor under section 1001.102(b)(6) of the amended regulations. The ALJ reasoned that the aggravating factor at section 1001.102(b)(6) had "substantially the same wording" as former section 1001.102(b)(5), which prior ALJ decisions had interpreted as including "any administrative sanction that is imposed prior to the date of exclusion, even if that action emanates from the same conduct or conviction which is the basis for the I.G.'s exclusion determination." ALJ Decision at 6, citing Dionisio Lazaro, M.D., DAB CR603 (1999), and John M. Thomas, Jr., M.D. and Texoma Orthopedic Associates, DAB CR281 (1993).

The ALJ further found that a 15-year exclusion was reasonable, relying on the absence of mitigating factors and on the three aggravating factors identified above. The ALJ stated in pertinent part:

In this case, the aggravating factors established by the I.G. prove Petitioner to be an untrustworthy individual. Petitioner's lack of trustworthiness is established by his actions in defrauding Medicaid on multiple occasions over a period of years which resulted in a substantial financial loss to that program. His fraud was recurrent and deliberate, involving falsification of patient records. Petitioner contends that his misconduct did not rise to the level, in terms of monetary loss, demonstrated in other cases which resulted in 15-year exclusions and that he was not sentenced to a period of incarceration. I note however that the losses in Petitioner's case were many times the regulatory minimum and that, while he did not receive a prison sentence, the New York State Medicaid authorities believed it necessary to take action against him.

ALJ Decision at 7.

Discussion

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

Below, we discuss Petitioner's two arguments on appeal: that the ALJ erred in finding in FFCL 14 that the I.G. had established the existence of the aggravating factor at 42 C.F.R. § 1001.102(b)(6), and that the ALJ's findings in FFCLs 15 and 16 that the aggravating factors prove that Petitioner is untrustworthy and that a 15-year exclusion is reasonable are not supported by substantial evidence. Since the remaining FFCLs were not excepted to by either party, we affirm and adopt them without discussion.

1. The ALJ properly found that the I.G. established that Petitioner's exclusion from the Medicaid program constituted an aggravating factor.

On appeal, Petitioner argued that the ALJ erred in finding that the I.G. had established the existence of the aggravating factor at 42 C.F.R. § 1001.102(b)(6) (1998). According to Petitioner, the phrase "history of . . . wrongdoing" in this section on its face refers to more than a single event consisting of the very conduct upon which the I.G.'s exclusion is based. While we are not persuaded that this reading is clear on the face of section 1001.102(b)(6), we also question the rationale for the ALJ's reading of the provision as having the same meaning as former section 1001.102(b)(5), as interpreted in other ALJ decisions. Contrary to the ALJ's observation, the wording of section 1001.102(b)(6) (1998)--"Whether the individual or entity has a documented history of criminal, civil or administrative wrongdoing"--is markedly different from the wording of former section 1001.201(b)(5) (1992)--"The convicted individual or entity has a prior criminal, civil or administrative sanction record." These changes were presumably intended to be substantive, since they are not identified in the proposed or final rule as a technical correction. Thus, the more reasonable conclusion would be that section 1001.102(b)(6) (1998) means something different from former section 1001.102(b)(5).⁽³⁾

We conclude, however, that the ALJ's reliance on section 1001.102(b)(6) (1998) was harmless error since Petitioner's exclusion from the Medicaid program constituted an aggravating factor under section 1001.102(b)(8) (1998). In pertinent part, section 1001.102(b)(8) (1998) identifies as an aggravating factor "[w]hether the individual or entity . . . 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." The action of the New York State Department of Health excluding Petitioner from Medicaid based on his 1997 conviction clearly falls within the scope of this provision, which the Board has held contemplates "that the fact of additional adverse action beyond the criminal conviction could be considered as additional evidence of the seriousness of the underlying conduct." Narendra M. Patel, M.D., DAB No. 1736, at 28-29 (2000). Moreover, the history of this provision confirms that the I.G. intended it to be read in this manner. The I.G. proposed section 1001.102(b)(8) as an "additional aggravating factor." 62 Fed. Reg. 47182, 47185 (Sept. 8, 1997). In the preamble to the proposed rule, the I.G. stated that this aggravating factor--

specifically relates to any other adverse action taken by any other Federal, State or local government agency or board based on the same set of circumstances that is serving as the basis for imposition of the exclusion. This additional factor is consistent with ALJ decisions regarding aggravating factors and the length of exclusion.

Id. This explanation presumably refers to the fact, noted by the ALJ in the decision appealed here, that several ALJ decisions had interpreted former section 1001.102(b)(5) to include prior administrative sanctions that were based on the same offense as the I.G.'s exclusion. It appears that the I.G. intended to explicitly provide for such an aggravating factor in the second part of proposed section 1001.102(b)(8) rather than rely on an interpretation of section 1001.102(b)(5) that was not apparent on the face of that provision.

Moreover, this reading is not inconsistent with the I.G.'s statement in the preamble to the final rule that "we do not intend to use the basis of the OIG exclusion more than once as a factor in lengthening an exclusion." 63 Fed. Reg. 46676, 46681 (Sept. 2, 1998). It appears in context that this statement pertains solely to the first part of section 1001.102(b)(8), involving convictions, and not to other adverse actions.⁽⁴⁾ The statement was made at the end of the I.G.'s response to a comment that "since simultaneous convictions may be based on only one course of conduct and represent a prosecutor's decision to charge essentially the same conduct under various offenses, we should not be allowed to increase an exclusion period where an individual is convicted of multiple offenses at the same time he or she is convicted of the offense that forms the basis for the exclusion." Id. at 46680. The I.G. indicated that the existence of multiple convictions would not have a bearing on the individual's or entity's trustworthiness and thus would not be a basis for lengthening the exclusion. In contrast, a determination by a state regulatory body that the conduct in question was not only criminal but was a basis for exclusion from the Medicaid program has a bearing on trustworthiness.

Petitioner argued, however, that the Board could not properly find that the I.G. had established an aggravating factor under section 1001.102(b)(8) (1998) when the ALJ had expressly not considered that issue. The ALJ stated that he did not consider whether Petitioner's Medicaid exclusion was within the scope of section 1001.102(b)(8) (1998) because "the I.G. did not rely on this factor in Petitioner's case . . . ." ALJ Decision at 6, n.5.⁽⁵⁾ However, the ALJ's role as fact-finder is not usurped by our determination that the same facts found by the I.G. (i.e., that Petitioner was excluded by New York from the Medicaid program) constituted an aggravating factor under a different subsection of the regulations than the ALJ relied on. Moreover, Petitioner's argument that it lacked the requisite notice of the factors considered in setting the length of the exclusion has no merit.⁽⁶⁾ As indicated above, while the I.G.'s notice of exclusion quoted the language of former section 1001.102(b)(5), it also stated that "[t]he New York State Department of Health excluded you from the Medicaid program." Thus, Petitioner was on notice that this was a factor considered in setting the length of the exclusion. Moreover, the I.G. clearly took the position both before the ALJ and the Board that it was relying on section 1001.102(b)(8) (1998) as alternative authority for that aggravating factor, so that Petitioner had a full opportunity to brief the applicability of this provision.

Accordingly, we find that the ALJ properly determined that Petitioner's exclusion from the Medicaid program constituted an aggravating factor, but we modify FFCL 14 to read:

The I.G. established the existence of aggravating factors under 42 C.F.R. §§ 1001.102(b)(1), (2), and (8).

2. The ALJ's determination that a 15-year exclusion was reasonable was supported by substantial evidence.

On appeal, Petitioner argued that the ALJ "did not consider the quality of circumstances surrounding" the aggravating factor of Petitioner's exclusion from the New York Medicaid program. Petitioner Br. dated 11/6/00, at 8. Specifically, Petitioner argued that since the state found that a two-year period of exclusion was sufficient to protect Medicaid patients, the ALJ's conclusion that Petitioner is so untrustworthy that he must be excluded from all federal health care programs for 15 years was not supported by substantial evidence.

We disagree. There is nothing in section 1001.102(b)(8) which suggests that the length of the exclusion imposed by the I.G. must be in line with the length of an exclusion from Medicaid imposed by the state on the same basis. Unlike some of the other aggravating factors in section 1001.102(b), section 1001.102(b)(8) has no quantitative element. Rather, the focal point is that another entity has taken an adverse action against the petitioner in addition to the conviction that gave rise to the I.G.'s exclusion. Moreover, Petitioner's argument ignores the two additional aggravating factors found by the ALJ and not contested by Petitioner.⁽⁷⁾ Even if Petitioner's exclusion from Medicaid did not justify lengthening the exclusion imposed by the I.G. to 15 years, that does not mean that a 15-year exclusion was not justified based on all three aggravating factors. Here, not only is section 1001.102(b)(8) applicable, but the acts resulting in the conviction resulted in a financial loss many times the minimum of $1,500 necessary for section 1001.102(b)(1) to apply and these acts were committed over a period of four years, significantly more than the one year necessary for section 1001.102(b)(2) to apply.

Accordingly, we conclude that there was substantial evidence of Petitioner's untrustworthiness which supports the ALJ's determination that a 15-year exclusion was reasonable. We therefore sustain FFCL 15. We note, however, that the Board has previously held that an ALJ review of the length of an exclusion concerns whether the length is within a reasonable range under the circumstances of the case rather than whether it is reasonable. See Joann Fletcher Cash, DAB No. 1725, at 16-18 (2000), and decisions cited therein. Accordingly, we modify the language of FFCL 16 to read:

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.

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 sustain FFCL 15, and we modify FFCL 14 and FFCL 16 to read as follows:

14. The I.G. established the existence of aggravating factors under 42 C.F.R. §§ 1001.102(b)(1), (2), and (8).

16. 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.

Marc R. Hillson

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.

2. This summary of the undisputed facts is intended to provide a general framework for understanding the decision and is not intended to be a substitute for the ALJ's findings.

3. It is difficult to discern the I.G.'s intent in making this change, however, given that there is no explanation of the meaning of the changed language in the preamble to either the proposed or final rule. Moreover, the subsequent history of section 1001.102(b)(6)--which was amended in 1999, also without explanation, to substitute the "prior sanction record" language of former section 1001.102(b)(5) for the "documented history" language adopted in 1998--does not elucidate its meaning. See 63 Fed. Reg. 46736, 46738, 46741 (Sept. 2, 1998) (proposed rule); 64 Fed. Reg. 39420, 39424-39425 (July 22, 1999) (final rule).

4. The preamble states that the I.G. was revising the language of proposed section 1001.102(b)(8), which read "even if the adverse action . . .," to delete the word "even"--

so that the factor will be relevant to the same conduct and circumstances that serves as the basis for the imposition of the OIG exclusion. . . . The intent of the revised language is to allow the OIG to increase the length of exclusion if an individual or entity was convicted of other offenses at the same time as he or she was convicted of the offense that served as the basis for the exclusion. Inclusion of this aggravating factor will permit the OIG to increase a length of exclusion when an individual is convicted of Medicare fraud and any other offense, such as drug distribution or income tax evasion. The aggravating factor will take into consideration separate and different types of convictions that occurred concurrently; we do not intend to use the basis of the OIG exclusion more than once as a factor in lengthening an exclusion.

63 Fed. Reg. 46676, at 46680-46681 (Sept. 2, 1998).

5. The ALJ presumably was referring to the fact that the I.G. did not cite section 1001.102(b)(8) (1998) in its notice of exclusion. The I.G. did argue before the ALJ that Petitioner's Medicaid exclusion constituted an aggravating factor under this provision if the 1997 regulations did not apply. I.G. Br. dated 5/16/00, at 3-4.

6. Section 1001.2002(c)(2) of 42 C.F.R. provides that the notice of exclusion will state "[t]he length of the exclusion and, where applicable, the factors considered in setting the length."

7. Although Petitioner represented in the statement of facts in its appeal brief that the false claims were submitted "in 1992 and 1993" (Petitioner's brief dated 11/6/00, at 2), Petitioner did not take exception to either the ALJ's finding that the I.G. had established the existence of an aggravating factor under section 1001.102(b)(2) or the ALJ's underlying finding that the acts occurred "over a period of years" (ALJ Decision at 7) since the indictment to which Petitioner pled guilty "reflected that the acts occurred from April 1990 through February 1994" (ALJ Decision at 6).