William E. Henry, DAB CR5656 (2020)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, William E. Henry, a physician, from participation in Medicare, Medicaid, and all other federal health care programs based on Petitioner's felony conviction for theft of United States government property, which is a criminal offense related to the delivery of a health care item or service under Medicare or a state health care program.  For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner, and an exclusion for the minimum period of five years is mandatory pursuant to section 1128(c)(3)(B) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(c)(3)(B)).

I.  Background

In a letter dated December 31, 2019, the IG excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Act (42 U.S.C. § 1320a-7b(f)) for a minimum period of 5 years, effective 20 days from the date of the letter.  IG Ex. 1 at 1.  The IG explained that Petitioner's exclusion was based on a "conviction as defined in section 1128(i) (42 U.S.C. [§] 1320a-7(i)), in

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the United States District Court, Middle District of Alabama, of a criminal offense related to the delivery of an item or service under the Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program."  IG Ex. 1 at 1.  The IG explained that she had excluded Petitioner pursuant to section 1128(a)(1) of the Act, which mandates the exclusion of an individual who is convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  IG Ex. 1 at 1; see 42 U.S.C. § 1320a-7(a)(1).  The IG informed Petitioner that the exclusion was for "the minimum statutory period of 5 years."  IG Ex.1 at 1; see 42 U.S.C. § 1320a-7(c)(3)(B).

Petitioner, who is represented by the same attorney who represented him in the criminal proceedings, filed a timely request for hearing on March 5, 2020.  On March 10, 2020, the Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order), and on March 25, 2020, pursuant to 42 C.F.R. § 1005.6, I presided over a telephonic pre-hearing conference.  That same day, I issued an order in which I, inter alia, established a schedule for the filing of briefs and documentary evidence.

Pursuant to these orders, the IG filed a brief (IG Br.) and six proposed exhibits (IG Exs. 1-6).  Petitioner, through counsel, filed a brief (P. Br.). Thereafter, the IG filed a reply brief.

Petitioner objects to the admission of IG Exs. 3 and 4, which are copies of a 15-count indictment and an 18-count superseding indictment.  P. Objections at 1-2.  Petitioner argues that the two indictments are inadmissible because those charges were dismissed when he entered a guilty plea to the offense charged in a one-count information.  P. Objections at 1.  Petitioner argues that the IG "is attempting to unduly prejudice this Court by including as proposed exhibits documents which have no relevance to the issue before the Court," and that it is "unfair and unnecessary to include in the record these two proposed exhibits."  P. Objections at 2.  The indictment and superseding indictment are referenced in both the plea agreement (IG. Ex. 2 at 3) and the judgment of conviction (IG Ex. 6 at 1), and include relevant background information regarding the nature of the offense conduct that underlies Petitioner's conviction.  IG Exs. 3 at 1-8; 4 at 1-9.  IG Exs. 3 and 4 are not prejudicial to Petitioner, in that these documents detail the offenses that had been charged by a grand jury.  Petitioner has failed to explain how the indictment and superseding indictment have "no relevance" to Petitioner's exclusion based on his conviction for felony theft of government property (i.e., Medicare funds).  See P. Objections at 2; 42 C.F.R. § 1005.17(c) ("The ALJ must exclude irrelevant or immaterial evidence."); compare IG Exs. 3 at 11-18; 4 at 10-18, with IG Ex. 2 at 6-9.  Because I overrule Petitioner's objections, I admit IG Exs. 1-6 into the evidentiary record.

Neither party has submitted the written testimony of any witnesses, and therefore, a hearing is unnecessary for the purpose of cross-examination of any witnesses.  Pre-

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Hearing Order § 11; see Lena Lasher, DAB No. 2800 at 4 (2017) (discussing that when neither party submits written direct testimony as directed, "no purpose would be served by holding an in-person hearing. . . ."), aff'd, Lasher v. Dep't of Health & Human Servs., 369 F. Supp. 3d 243 (D.D.C. 2019). I will decide this case on the written submissions and documentary evidence.

II.  Issue

Whether there is a basis for exclusion pursuant to 42 U.S.C. § 1320a-7(a)(1).  See 42 C.F.R. § 1001.2007(a)(1)-(2).

III.  Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.

IV.  Findings of Fact, Conclusions of Law, and Analysis1

1. Petitioner was convicted of an offense related to the delivery of a health care item or service under a state health care program, which is an offense, pursuant to section 1128(a)(1) of the Act, that subjects him to a mandatory exclusion from all federal health care programs for a minimum of five years.

Section 1128(a)(1) requires a mandatory exclusion from all federal health care programs under certain conditions.2  Section 1128(a)(1) states:

(a) Mandatory exclusion

The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):

(1) Conviction of program-related crimes--

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Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.

See 42 U.S.C. § 1320a-7(a)(1).

The IG argues that she properly excluded Petitioner from all federal health care programs based on Petitioner's conviction for an offense related to the delivery of a health care item or service under a state health care program.  IG Br. at 2-8.  The evidence demonstrates that Petitioner was convicted of a criminal offense, for purposes of the Act, that mandates exclusion from all federal health care programs.

On or about May 31, 2018, a federal grand jury returned a true bill of indictment charging that Petitioner committed numerous criminal offenses, to include engaging in a conspiracy to pay and receive kickbacks in connection with Medicare, receiving kickbacks, committing health care fraud, and engaging in money laundering.  IG Ex. 3 at 9-32.  Shortly thereafter, a superseding indictment added additional charges.  IG Ex. 4 at 9-48.

On January 10, 2019, the United States Attorney filed a one-count information charging that Petitioner committed the felony offense of theft of government property,3 stating the following:

[Petitioner] aided and abetted by others and aiding and abetting others, embezzled, stole, and knowingly converted to his own use or to someone else's use money or property of a value greater than $1,000 that belonged to the United States, and he knowingly and willfully intended to deprive the United States of the use or benefit of the money or property, all in violation of Title 18, United States Code, Section 641 and Title 18, United States Code, Section 2.

IG Ex. 5 at 1.  On January 16, 2019, Petitioner entered into a plea agreement with the United States Attorney in which he agreed to enter a guilty plea to the single-count information. IG Ex. 2 at 3; see IG Exs. 3-4.  Petitioner agreed, for sentencing purposes, that "the loss involved in [his] offense was more than $150,000 but less than $250,000," and that "the government agrees to recommend that [Petitioner] is not liable for

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restitution . . . as all restitution amounts owed by [Petitioner's] offense are payable by the physicians aided and abetted by [Petitioner]."  IG Ex. 2 at 3.

The plea agreement included a detailed underlying factual basis, which Petitioner acknowledged was "true and correct."  IG Ex. 2 at 6.  Of note, Petitioner agreed that his company, MyPractice24, LLC, provided "chronic care management services . . . to Medicare Part B beneficiaries on behalf of MyPractice24's physician-clients."  IG Ex. 2 at 6.  The plea agreement further detailed that MyPractice24 would provide chronic care management services to patients of three separate medical practices, and the practices would pay MyPractice24 a set monthly rate (reported as ranging from $18 to $22.60 per patient). IG Ex. 2 at 6-8.  The three physicians' practices enrolled their patients in MyPractice24's chronic care management program and "advised patients that they would not incur any personal expenses from chronic care management."  IG Ex. 2 at 6-9.  The plea agreement reported, as fact, that Medicare "reimbursed physicians at a rate of approximately $32 per patient per month for chronic care management services[,]" and that "physicians were required to collect copayments from patients of approximately $8 per patient per month."  IG Ex. 2 at 6.  Petitioner admitted that the physicians each agreed to waive copayment requirements for patients who received chronic care management services from MyPractice24.4   IG Ex. 2 at 7-9.  Petitioner acknowledged that he "facilitated" the three physicians' "waiving of copayment requirements by instructing his employees to advise prospective chronic care management patients that the patients would not owe copayments."  IG Ex. 2 at 7-9.  Based on this scheme, the three physicians collectively received approximately $204,115.24 from the Medicare program, even though they were "not owed this money."  IG Ex. 2 at 7-9.

Petitioner entered a guilty plea to the single-count information on January 16, 2019. IG Ex. 6 at 1.  A federal district judge imposed judgment on May 8, 2019, at which time he dismissed the remaining charges.  IG Ex. 6 at 1.

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Petitioner argues that his conviction is not related to the delivery of a healthcare item or service, and therefore, he should not be excluded from federal healthcare programs.  P. Br. at 2-3.  Petitioner is mistaken; he pleaded guilty to a charge that he, "aided and abetted by others and aiding and abetting others, embezzled, stole, and knowingly converted to his own use or someone else's use" government property in the form of Medicare funds.  IG Ex. 5 at 1.  Petitioner's exclusion is related to the delivery of a healthcare item or service, as shown by the fact that his crime involved his provision of services to Medicare beneficiaries.  IG Ex. 2 at 6-10.  Specifically, Petitioner admitted that he provided chronic care management services to Medicare beneficiaries, and that he had compensated those beneficiaries' physicians at a set monthly rate per patient pursuant to an illegal arrangement in which the physicians did not collect required cost-sharing copayments from the beneficiaries. IG Ex. 2 at 6-10; see 42 U.S.C. § 1320a-7b(b)(1)(B). The three physicians collectively received more than $200,000 from the Medicare program, even though these physicians "[were] not owed this money."  IG Ex. 2 at 7-9.  Petitioner's criminal conduct resulted in a loss to the Medicare program in excess of $200,000, which was unquestionably related to his delivery of health care services to Medicare beneficiaries.  As such, Petitioner's conviction mandates exclusion pursuant to section 1128(a)(1).

Petitioner also argues that exclusion amounts to "double jeopardy."  It is not; it is long settled that the constitutional provision of double jeopardy is inapplicable to a criminally convicted physician's exclusion.  See Manocchio v. Kusserow, 961 F.2d 1539, 1543 (11th Cir. 1992); Shaikh M. Hasan, M.D., DAB No. 2648 at 13-14 (2015); U.S. Const. amend. V (stating "nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb . . . ."); see also 1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) ("An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground, even a constitutional one.").

Petitioner unquestionably committed a criminal offense related to the delivery of a health care item or service under the Medicare program, to include the performance of management or administrative services relating to the delivery of items or services in the Medicare program.  42 U.S.C. § 1320a-7(a)(1).  Congress, through enactment of the Act, determined that an individual who has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program must be excluded from federal health care programs for no less than five years, and it afforded neither the IG nor an administrative law judge the discretion to impose an exclusion of a shorter duration.  42 U.S.C. § 1320a-7(c)(3)(B).  Petitioner argues that he had a "minor role in the felony offense" and that the five-year exclusion "is grossly disproportionate to the nature of [his] offense. . . ."  P. Br. at 5. I cannot shorten the length of the exclusion to a period of less than five years because I do not have authority to "[f]ind invalid or refuse to follow Federal statutes or regulations . . . ."  42 C.F.R. § 1005.4(c)(1).  An exclusion for a minimum period of five years is mandated.

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2. The effective date of Petitioner's exclusion is January 20, 2020.

The effective date of the exclusion, January 20, 2020, is 20 days after the date of the IG's December 31, 2019 letter, and is established by regulation (42 C.F.R. § 1001.2002(b)); I am bound by that regulation.  42 C.F.R. § 1005.4(c)(1).

V.  Conclusion

For the foregoing reasons, I affirm the IG's decision to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of five years, effective January 20, 2020.

1. My findings of fact and conclusions of law are set forth in italics and bold font.
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2. While there are slight differences in the wording of section 1128 of the Act and its codification at 42 U.S.C. § 1320a-7, the two authorities are substantively identical and I refer to them interchangeably.  I further note that the Secretary of the Department of Health and Human Services has delegated to the IG the authority "to suspend or exclude certain health care practitioners and providers of health care services from participation in these programs."  48 Fed. Reg. 21,662 (May 13, 1983); see also 42 C.F.R. § 1005.1.
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3. The value of the loss determines whether a violation of 18 U.S.C. § 641 is a felony or misdemeanor offense.  Because the information charged the felony level of the offense, the offense was punishable by up to 10 years of imprisonment.  See 18 U.S.C. § 3559(a) (classifying felonies as offenses punishable by more than one year of incarceration).
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4. The Anti-Kickback Statute prohibits, among other things, the payment and receipt of remuneration to induce patient referrals.  42 U.S.C. § 1320a-7b(b).  The indictment and superseding indictment cite the IG's longstanding interpretive guidance that the failure of a health care provider to routinely collect co-payments could violate the Anti-Kickback Statute, and that "providers collect copays so as to dis-incentivize beneficiaries from accepting unnecessary services from providers" and that a "systematic waiver of copay obligations could result in the over-utilization of covered services." IG Exs. 3 at 5; 4 at 5-6.  The offense conduct discussed in the plea agreement is substantially similar to the conduct that formed the basis for the charges that Petitioner violated the Anti-Kickback Statute.  See IG Exs. 3 at 27 (Count 8 of indictment) and 4 at 27 (Count 7 of superseding indictment) (counts charging violations of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(1)(A)-(B), stating:  "[t]he remuneration paid was the systemic waiver of copay obligations and other out-of-pocket costs associated with the receipt of chronic care management services.").
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