SUBJECT: Andrew Anello,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Andrew Anello (Petitioner) appealed a July 5, 2001 decision by Administrative Law Judge (ALJ) Alfonso J. Montano granting summary disposition for the Inspector General (I.G.). Andrew Anello, DAB CR791 (2001) (ALJ Decision).

The ALJ Decision upheld the I.G.'s determination that Petitioner should be excluded from participation in Medicare, Medicaid, Maternal and Child Health Services Block Grant and Block Grants to States for Social Services programs⁽¹⁾ for a five-year period.

The I.G. imposed this exclusion pursuant to section 1128(a)(1) of the Social Security Act (Act) based on a finding that Petitioner's June 14, 1999 conviction in the U.S. District Court, Northern District of Texas, Dallas Division, was for a criminal offense related to the delivery of an item or service under the Medicare program.

The ALJ made 16 Findings of Fact and Conclusions of Law (FFCLs). Most importantly, the ALJ found that Petitioner had been convicted of a criminal offense related to the delivery of an item or service under Medicare. Since the exclusion was for the mandatory minimum period directed by statute (sections 1128(a)(1) and 1128(c)(3)(B) of the Act), the ALJ determined that neither he nor the I.G. could reduce the exclusion's length.

Based on the analysis below, we sustain the ALJ Decision. In doing so, we affirm and adopt each of the FFCLs underlying the ALJ Decision.

Background⁽²⁾

During the period in issue, Petitioner was the Vice President of Finance and Reimbursement at Staff Builders Health Care Services, Inc. (Staff Builders) of New York. Staff Builders is a franchiser of home health care agencies throughout the United States. ALJ Decision at 2. Peter Topham was the owner and operator of the Staff Builders' franchise in Dallas, Texas. Mr. Topham was also the owner and operator of an adult day care facility, Circle of Friends. Mr. Topham submitted payroll time sheets to Staff Builders listing Circle of Friends employees as employees of Staff Builders/Dallas. Consequently, the salaries of the listed adult day care employees were reimbursed by Medicare, although those employees did not provide health care services which would qualify for Medicare reimbursement. I.G. Ex. 1 at 11-12.

Petitioner became aware of these improprieties, signed off on them and did not report them. I.G. Ex. 2 at 1-2.

Subsequently, Mr. Topham, Mary Topham and Petitioner were indicted on federal charges. Mr. Topham was convicted of Mail Fraud. I.G. Ex. 1 at 14. Mary Topham and Petitioner were indicted and convicted of Misprision of a Felony. I.G. Ex. 1 at 27; I.G. Ex. 3 at 1.

The I.G. excluded Petitioner based on a finding that Petitioner had been convicted of a criminal offense related to the delivery of an item or service under Medicare and imposed the minimum mandatory five-year exclusion. Petitioner appealed his exclusion pursuant to 42 C.F.R. Part 1005.

Disputed FFCLs

Petitioner took exception to the following FFCLs:

3. As the Vice President of Finance and Reimbursement, Petitioner was responsible for the accuracy and appropriateness of payroll checks issued to franchise owners and reimbursed by Medicare. P. Ex. A1.

5. In September of 1995, Petitioner became aware of certain Medicare ineligible payroll expenses fraudulently submitted by Peter Topham. I.G. Ex. 2.

6. Despite Petitioner's knowledge of the improper expenses submitted by Topham, Petitioner processed the requested payments and filed for reimbursement from Medicare. I.G. Ex. 2.

7. Petitioner did not report Topham's fraudulent payroll expenses to law enforcement authorities. I.G. Ex. 2.

9. Petitioner was charged with Misprision of a Felony in violation of 18 U.S.C. § 4, for failing to disclose Topham's fraudulent Medicare reimbursement submissions.

14. Petitioner was convicted of a criminal offense related to the delivery of an item or service under a federal health care program and falls within the scope of section 1128(a)(1) of the Act.

15. Because he was convicted of a program related crime, Petitioner's five-year exclusion from participation in the Medicare, Medicaid and all other federal health care programs, is mandatory.

16. The I.G. properly excluded Petitioner for a period of five years as mandated by section 1128(c)(3)(B) of the Act.

ALJ Decision at 3-4.

Petitioner did not except to FFCLs 1, 2, 8 and 10-13. We therefore affirm and adopt these FFCLs without further discussion.

Exceptions⁽³⁾

Petitioner took exception to the FFCLs identified above and otherwise challenged various aspects of the ALJ Decision. Petitioner asserted that:

1. The ALJ did not undertake an appropriate review of the facts and circumstances underlying Petitioner's plea.

2. Mr. Anello's [Petitioner's] plea of misprision did not contemplate knowledge of Peter Topham's fraudulently submitted payroll expenses.

3. Mr. Anello [Petitioner] did not process payments for or file for program reimbursement based upon Topham's fraudulently submitted payroll expenses.

4. Mr. Anello [Petitioner] was not responsible for the accuracy and appropriateness of payroll checks issued to the franchise owner in his capacity as Vice-President of Finance & Reimbursement.

5. Mr. Anello's [Petitioner's] plea was not related to a failure to report "Topham's Fraudulent Payroll Expenses" to the authorities.

6. There are a number of material facts genuinely in dispute.

7. Mr. Anello [Petitioner] has provided the ALJ with significant documentary evidence as to the facts and circumstances surrounding his plea.

8. An appreciation of the facts and circumstances underlying Appellant's [Petitioner's] plea would result in a different outcome.

9. Under the applicable version of § 1128 of the . . .
Act . . ., the permissive exclusion authority is applicable.

10. Appellant [Petitioner] did not plead guilty to a criminal offense related to the delivery of an item or service under a federal health care program and should not fall within the scope of mandatory exclusion pursuant to section 1128(a)(1) of the Act.

11. As the appellant [Petitioner] is subject to permissive exclusion rather than mandatory exclusion, mitigating factors may be considered.

Petitioner Br. at 2, 4, 17, 20, 22, 24, 25, 28, 29, 31 and 50.

Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. 42 C.F.R. § 1005.21(h).

Based on our analysis of the record, we affirm the ALJ's decision that summary disposition for the I.G. was appropriate. We agree with the ALJ that there are no material facts in dispute. While there does appear to be some dispute as to the nature of Petitioner's job duties, those facts are not material since we agree with the ALJ that the Factual Resume and plea agreement establish that Petitioner pled guilty to a criminal offense related to the delivery of an item or service under Medicare. The ALJ correctly found that Petitioner's hearing request failed to raise any issue which could be addressed in a hearing. See 42 C.F.R. § 1005.2(e)(4).

Petitioner briefed his exceptions extensively. Petitioner's case hinges on whether his plea to misprision of a felony constituted a conviction of a criminal offense related to the delivery of an item or service under Medicare. If Petitioner was so convicted, the I.G. and the ALJ must, by law, exclude him for a minimum period of five years. We find that the ALJ properly concluded that Petitioner was convicted of a criminal offense related to the delivery of an item or service under Medicare. Therefore, Petitioner's five-year exclusion from Medicare was mandated by statute.

The essence of Petitioner's case is that he did not plead guilty to a criminal offense related to the delivery of an item or service under Medicare. Rather, throughout his brief, Petitioner argued that his conviction was based on the fact that he had signed-off on a $7,000 bonus which Mr. Topham had arranged for himself. Petitioner contended that his actions did not constitute a program-related crime and at most only violated Staff Builders' corporate guidelines. Petitioner argued that the ALJ failed to look into the facts surrounding his conviction and did not understand the circumstances behind the conviction.

Citing the ALJ decision in Alfredo Rodriguez-Merchado, DAB CR706 (2000), as well as the Appellate decision in Berton Siegel, D.O., DAB No. 1467 (1994), Petitioner contended that the ALJ was required to analyze the facts and circumstances underlying his conviction. Such an analysis, Petitioner contended, would enable the ALJ to determine whether a nexus or common sense connection links the offense for which Petitioner had been convicted to the delivery of a health care item or service under a covered program. Petitioner Br. at 2-3.

Petitioner's reliance on Rodriguez-Merchado and Siegel is misplaced. It is clear that Petitioner has confused our duty to examine the criminal conviction to establish the common sense connection between the conviction and delivery of health care item or service with his desire that we examine the underpinnings of the conviction itself. The decisions in both Rodriguez-Merchado and Siegel dealt with situations where petitioners signed factual statements supporting their guilty pleas. Regardless of subsequent events, both the ALJ and Appellate Panel found the convictions sufficiently related to the delivery of a health care item or service to support exclusion. In neither case did the ALJ or the Appellate Panel hold a hearing or otherwise develop evidence looking into the details of the conviction.

Petitioner's arguments here parallel those in Surabhan Ratanasen, M.D., DAB No. 1138 (1990). There petitioner "disputed that he had stipulated that the offense to which he had pleaded guilty was reasonably related to four counts in his original indictment." Id. at 5. The Ratanasen Appellate Panel found that the "record before the ALJ was replete with admissions that Petitioner's conviction was related to the fraudulent claim counts of his original indictment." Id. at 6.

Here too, in spite of Petitioner's arguments, the nexus or common sense connection between Petitioner's conviction and the delivery of a health care item or service under a covered program is readily evident in the documentation before the ALJ. The I.G.'s Exhibit 1 is the indictment filed in United States District Court naming Peter Topham, Mary Topham and Petitioner. Count 1 of the indictment established the case against Mr. Topham and stated at Paragraph 2 that Mr. Topham:

. . . did wilfully and knowingly devise, and intend to devise, a scheme and artifice to directly and indirectly defraud Medicare of money and property, and to obtain money and property from Medicare by means of false and fraudulent pretenses, representations, and promises, in that Peter Topham caused to be submitted to Staff Builders Inc., time sheets for employees of Circle of Friends Adult Day Care Center, and related financial records, falsely indicating that they were employees of Staff Builders Health Care Services involved in providing home health care services to Medicare beneficiaries, knowing that, based upon these submissions, payroll checks would be issued to these individuals by Staff Builders, Inc., and that the amount of these checks would be submitted to Medicare for reimbursement.

I.G. Ex. 1 at 3.

Mr. Topham pled guilty to this charge. Id. at 7.

Count 3 of the Indictment involved the case against Petitioner. Count 3 incorporated by reference Mr. Topham's Medicare fraud set out in Count 1. Id. at 6. Petitioner pled guilty to the charges set out in Count 3 of the Indictment. Id. at 32.

The case supporting Petitioner's exclusion is plain on the face of the documents underlying his conviction in District Court. Petitioner's Factual Resume (Petitioner Ex. 2), as well as his plea and indictment (Petitioner Ex. 1) unambiguously connect Petitioner to a conviction of an offense related to the delivery of a health care item or service under Medicare. As noted above, Petitioner's plea incorporated by reference the specifics of Mr. Topham's Medicare fraud.

Petitioner's assertion that the $7,000 bonus is the basis for his conviction is wholly unsubstantiated. The Factual Resume as well as the key documents leading to Petitioner's conviction, indictment and plea, make absolutely no mention of the bonus payment to Mr. Topham which Petitioner alleged was the key factor in his conviction. The Factual Resume only states that Petitioner was aware of certain support expenses not eligible for reimbursement from Medicare and did not report them. Not only is the bonus never mentioned in the District Court documents, but Petitioner can only offer his admission in the Statement of Offense, in District Court, that he "became aware of certain ineligible expense" and "almost identical" language in the Factual Resume to prove that he believed the bonus was the basis for his plea. Petitioner Br. at 10. Petitioner's argument here is, at best, a reach. If Petitioner intended to plead to charges involving an inappropriate bonus, he should have made sure that definitive language to that effect was contained in the indictment before he signed his plea. As it stands, the only definitive charge in the plea involves Medicare fraud.

Petitioner clearly pled guilty to a crime related to the delivery of an item or service under Medicare. Pursuant to section 1128(i)(3) of the Act, a guilty plea constitutes a conviction for purposes of section 1128(a) of the Act. The mandatory minimum period of exclusion for such a conviction is five years. Section 1128(c)(3)(B) of the Act.

Conclusion

Based on the preceding analysis, we sustain the ALJ Decision in its entirety. In doing so, we affirm and adopt each of the ALJ's FFCLs.

Donald F. Garrett

M. Terry Johnson

Marc R. Hillson
Presiding Panel Member

1. Hereafter, we refer to these programs generally as "Medicare."

2. This summary of the 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. In reviewing this case, we have considered each and every argument presented by the parties. Although particular issues may not be discussed in detail in this decision, we have nevertheless considered all of the points in the parties' briefs in reaching the conclusions set forth here.