SUBJECT:

Robert Alan Spriggs, R.P.T.,

Petitioner,

The Inspector General

I. Procedural History of This Case

By letter dated February 22, 2000, the I.G. notified Petitioner of the I.G.'s proposal to exclude him from participation in the Medicare, Medicaid, and all other federal health care programs for a period of 10 years. The I.G. imposed this exclusion pursuant to section 1128(b)(7) of the Social Security Act (Act), 42 U.S.C. § 1320a-7, and the implementing regulations at 42 C.F.R. § 1001.901. These provisions authorize the I.G. to exclude from participation in federal health care programs any individual or entity the I.G. determines has committed an act in violation of section 1128A of the Act, 42 U.S.C. § 1320a-7a. Specifically, the I.G. determined that during 1994, Petitioner caused to be presented to an agent of the United States claims for Medicare payment for physical therapy services that Petitioner knew or should have known were not provided as claimed or were false or fraudulent. The I.G. also informed Petitioner of his right to request a hearing and that the request for hearing should be in accordance with 42 C.F.R. § 1001.2003.⁽¹⁾

On March 29, 2000, in his request for a hearing, Petitioner requested review of his 10-year exclusion. In his hearing request, Petitioner indicated he disagreed with the I.G.'s notice because the "factual predicate is the basis of a plea agreement with the state and not the federal government, and therefore not admissible for any purpose in federal proceedings." Petitioner also disagreed with the "legal framework" as denying him due process of law, equal protection of the laws, denial of counsel, and exposure to double jeopardy. Petitioner claimed that the basis for his disagreement with the I.G.'s determination was "entirely legal" as he was not advised that his written agreement with the Physical Therapy Board of California (PTBC) would be turned over to federal authorities for further action; thus, he claims he was denied the right to counsel and the right to remain silent at a critical stage of the proceedings. Petitioner contended that there has been no repeat offense, the probation agreement with the PTBC appears to fulfill the statutory requirements, and that at Petitioner's present age of 50, a 10-year exclusion means he will be unable to work and will have no funds to make reimbursement. Petitioner stated that the defenses relied upon are "administrative res judicata" and "full faith and credit of administrative action." Petitioner indicated that the length of the exclusion period proposed should be modified because: under his agreement with the PTBC, he has had to practice physical therapy under certain probationary conditions and restrictions for five years, of which four years have nearly been completed; that he is current on all the obligations pursuant to that agreement; and that under the provisions of mandatory and permissive exclusions, the Secretary has the authority not to seek exclusion in the first instance, to waive exclusion, or terminate exclusion early where the Secretary has reasonable assurances that the type of action which formed the basis for the original exclusion has not recurred and will not recur.

During the prehearing conference in this matter, the I.G. indicated that she believed there were no material facts in dispute and that the issues involved were legal in nature and capable of being decided on the basis of written briefs with supporting exhibits. Order and Notice dated June 2, 2000. I advised the parties that I would review their submissions and determine whether the issues involved are largely legal in nature and may be resolved on the basis of their submissions without the need for in-person testimony. Both parties moved for summary disposition in their favor. On September 13, 2000, I determined that there were no disputed material facts and that the admitted facts established a violation of section 1128A of the Act and an exclusion under section 1128(b)(7) of the Act. Thus, pursuant to my authority under 42 C.F.R. § 1005.4(b)(12), I ruled that this matter could be decided on the basis of the parties' briefs and submissions without the need for in-person testimony. Ruling on Motions for Summary Disposition, September 13, 2000.

The I.G. submitted a motion for summary disposition, a brief in support of that motion, a reply brief, and 17 proposed exhibits (I.G. Exs. 1 - 17). Petitioner submitted his motion for summary disposition, a brief in opposition to the I.G.'s motion for summary disposition (P. Opp.), his declaration, with five exhibits attached (which I identify as P. Exs. 1- 5), the declaration of Petitioner's counsel, a certified copy of the Decision and Order, Stipulation and Waiver, and Accusation from the PTBC, which I identify as P. Ex. 6, and a sur reply. Petitioner did not object to the admission of the I.G.'s exhibits; Petitioner, however, disputed certain statements contained in I.G. Ex. 6. I accept I.G. Exs. 1 - 17 into evidence and have taken into account Petitioner's statements concerning I.G. Ex. 6 in determining what weight, if any, I will accord that exhibit. I accept P. Exs. 1 - 6 into evidence.

II. Undisputed Material Facts

On September 7, 1976, the PTBC issued a Physical Therapist License to Petitioner. I.G. Ex. 3 at 2; P. Opp. at 3. At all times relevant to this case, Petitioner was licensed as a physical therapist in California. Id. During the period at issue here, February 1994 through December 1994, Petitioner was under contract with Vallejo Convalescent Hospital (Vallejo), a skilled nursing facility, to provide physical therapy services to its residents. I.G. Ex. 3 at 4 and I.G. Ex. 4 at 8; P. Opp. at 4. On December 7, 1994, the Department of Consumer Affairs for the State of California received an anonymous tip from one of Petitioner's co-workers alleging that Petitioner was inflating the number of hours he and his employees provided physical therapy services to Vallejo residents and that he was billing for more hours than he was actually in the facility. I.G. Ex. 5; P. Opp. at 4.

For the period in dispute here, Petitioner submitted fraudulently inflated time sheets to Vallejo which indicated physical therapy services provided by Petitioner and his two physical therapist employees that were not actually performed. I.G. Exs. 4 and 6. Vallejo would subsequently include Petitioner's fraudulent charges on its Medicare cost reports which are submitted to Blue Cross of California, the fiscal intermediary for the Medicare program, for payment. I.G. Exs. 7 and 10. From February through December 1994, these falsely billed payments totaled at least $32,786.30 in improper and excessive payments made to Petitioner. I.G. Ex. 4 at 34.

In 1995, a criminal investigator for the State of California's Department of Consumer Affairs received a referral from the PTBC indicating that Petitioner might be overbilling the Medicare program. I.G. Ex. 6 at 1; P. Opp at 4. The investigator sent a letter to Petitioner explaining that his office was conducting an investigation into his billing practices and asking him to contact the investigator. Id. Petitioner later met with the investigator at the Office of Consumer Affairs to discuss the investigation, showing the investigator copies of physical therapy logs and ledger books. Id. Petitioner also provided a signed written declaration to the investigator, which states it was given voluntarily, in which he "admit[s] to padding salary reimbursement hours of my salaried physical therapists and unlicenced staff from 9/93 through 12/94. The purpose of this was to increase monetary compensation to myself that would equal or come close to equaling the fee-for-service treatment charges myself and my staff incurred upon the delivery of physical therapy services." I.G. Ex. 6 at 4-5.

As a result of the investigation, a formal accusation was filed by the State Attorney General before the Physical Therapy Examining Committee of the Department of Consumer Affairs. I.G. Ex. 4, at 1- 17. On August 12, 1997, Petitioner entered into a Stipulation and Waiver, a settlement agreement, with the PTBC. I.G. Ex. 3; P. Opp. at 8. This agreement was entered into in settlement of the Accusation filed by the PTBC against Petitioner, which was incorporated by reference into the settlement agreement. Id. The agreement further states that Petitioner understands the nature of the charges and allegations set forth in the Accusation and "understands and admits that those charges and allegations if proved would constitute cause for imposing discipline upon [Petitioner's] Physical Therapy License." Id. at 2. The agreement also states that Petitioner is fully aware of his right to a full hearing on the charges and allegations contained in the Accusation, his rights to reconsideration and appeal from such a hearing, his right to retain and be represented by counsel, but that he voluntarily chooses to represent himself. Id. at 3. The agreement provides that in consideration of the Physical Therapy Board's agreement to enter into the Stipulation and Waiver, Petitioner waives his rights to a hearing, to challenge the legal effect of the settlement agreement, and to assert any other legal claims or defenses. The agreement provides that Petitioner "admits that [he] falsely overbilled [Vallejo] and the Medicare program in the amount of $32,786.30 for physical therapy services, and that the allegations and charges set forth in the Accusation regarding such false overbilling are true and correct, and constitute adequate factual and legal basis and cause for the Board to take disciplinary action against [Petitioner's] physical therapist license . . . ." Id. at 4. As a result of this agreement, Petitioner's licence was revoked on the basis of these admissions, but the revocation was stayed and Petitioner was placed on probation for five years subject to certain terms, conditions, requirements, prohibitions, and restrictions of the agreement. Petitioner signed the agreement as well as a separate certification and acceptance indicating that he fully understood the terms, conditions, requirements, restrictions, and prohibitions of the Stipulation and Waiver and the legal significance and consequences of signing the agreement and that he entered into the settlement agreement voluntarily and with full knowledge of its force and effect. Id. at 16.

On October 14, 1999, the I.G. notified Petitioner that it had become aware that he had submitted false or fraudulent claims for Medicare reimbursement and that he could be subject to certain administrative sanctions, including exclusion, by the I.G.. I.G. Ex. 9. Petitioner was offered the opportunity to present any additional information he believed relevant to the matter. Id. On February 22, 2000, the I.G. issued its notice of proposal to exclude Petitioner from participation in all federal health care programs for a period of 10 years.

III. Applicable Law

Section 1128(b)(7) of the Act authorizes the Secretary to exclude any individual or entity from participation in any federal health care program that the Secretary determines has committed an act which is described in section 1128A of the Act.

Section 1128A of the Act provides that the Secretary, in addition to other administrative sanctions, may determine to exclude from participation in federal health care programs and to direct the appropriate State agency to exclude the person from participation in any State health care program --

(a) Any person (including an organization, agency, or other entity . . .) that--

(1) knowingly presents or causes to be presented to an officer, employee, or agent of the Unites States, or of any department or agency thereof . . . a claim . . . that the Secretary determines--

(A) is for a medical or other item or service that the person knows or should know was not provided as claimed, . . .

(B) is for a medical or other item or service and the person knows or should know the claim is false or fraudulent . . . .

Section 1128A(I)(2) of the Act defines "claim" as:

an application for payments for items and services under a Federal health care program.

Section 1128A(I)(3) provides that the term "item of service" includes:

(A) any particular item, device, medical supply, or service claimed to have been provided to a patient and listed in an itemized claim for payment, and

(B) in the case of a claim based on costs, any entry in the cost report, books of account or other documents supporting such claim.

Section 1128A(I)(4) of the Act provides that the term "agency of the United States" includes:

any contractor acting as a fiscal intermediary, carrier, or fiscal agent or any other claims processing agent for a federal health care program.

The Medicare and Medicaid Patient and Program Protection Act of 1987, Public Law No. 100-93, added section 1128(b)(7) of the Act. The legislative history of this section explains that Congress intended to provide the Secretary with authority to exclude a provider or entity who committed an act described in section 1128A of the Act and that the Secretary could exercise this authority to exclude without imposing any civil monetary or criminal penalties. S. Rep. No. 109, 100^th Cong., 1^st Sess. at 9 - 10 (1987).

The implementing regulations at 42 C.F.R. § 1001.901 provide:

(a) Circumstance for exclusion. The OIG [Office of the Inspector General] may exclude any individual or entity that it determines has committed an act described in section 1128A of the Act. The imposition of a civil money penalty or assessment is not a prerequisite for an exclusion under this section.

(b) Length of exclusion. In determining the length of an exclusion imposed in accordance with this section, the OIG will consider the following factors--

(1) The nature and circumstances surrounding the actions that are the basis for liability, including the period of time over which the acts occurred, the number of acts, whether there is evidence of a pattern and the amount claimed;

(2) The degree of culpability;

(3) Whether the individual or entity had a documented history of criminal, civil or administrative wrongdoing (The lack of any prior record is to be considered neutral);

(4) 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; or

(5) Other matters as justice may require.

The regulation at 42 C.F.R. § 1001.901 does not provide for the consideration of specified conditions or acts of Petitioner as mitigating factors in determining the length of the exclusion as the regulations for other circumstances leading to exclusion provide. Compare 42 C.F.R. §1001.901 with 42 C.F.R. § 1001.701(d). The legislative history of the final rule relating to the applicable regulations explains that, generally, aggravating and mitigating factors are applied to situations where there is either a benchmark period of exclusion or some other specific period of time that would otherwise set the exclusion period. See 57 Fed. Reg. 3298, 3307 (1992). The legislative history further explains that no such benchmark period was set forth in the regulations for 42 C.F.R. §§ 1001.901 and 1001.951 so that "it is appropriate to look only at factors that would help determine an appropriate period of exclusion given the particular facts of each case." Moreover, exclusions pursuant to 42 C.F.R. § 1001.901 are considered non-derivative exclusions, meaning the proposed exclusion is based on determinations of misconduct that originate with the I.G. and require the I.G., if challenged, to make a prima facie showing that the improper behavior did occur. 57 Fed. Reg. 3298, 3299 (1992); 55 Fed. Reg. 12,205, 12,206 (1990). For a non-derivative exclusion under 42 C.F.R. § 1001.901, as distinguished from other types of exclusion actions, the I.G. issues a notice of her proposal to exclude and the exclusion is not effective until after I hear the matter and issue a decision affirming the I.G. determination, absent a finding that warrants that the exclusion should go into effect prior to my reaching a decision (health and safety reasons).

IV. Petitioner's Contentions

Petitioner does not dispute that he submitted fraudulently inflated time sheets for his and his employees' physical therapy services for the period February 1994 through December 1994 to Vallejo, a skilled nursing facility, where he was under contract to provide physical therapy services to residents. He further admits he did so to receive extra payment from Medicare to which he was not entitled. Petitioner, however, contends that the I.G.'s proposal to exclude him should be dismissed as a matter of law because (1) the decision of the California Board of Physical Therapy is entitled to res judicata effect; (2) the sole evidence available is the result of a violation of Petitioner's Fifth Amendment rights and, as "fruits of the poisonous tree," cannot be used in these proceedings; (3) the decision of the California Board of Physical Therapy is entitled to full faith and credit, barring further proceedings such as these; or (4) this proceeding constitutes multiple punishment in violation of the double jeopardy clause. P. Opp. at 1.

V. Issues, Findings of Fact and Conclusions of Law

A. The issues in this case are:

1. Whether Petitioner committed an act as described in section 1128A of the Act, namely, did Petitioner knowingly present or cause to be presented to an agent of the United States, a claim for a medical or other item or service that he knew or should have known was not provided as claimed or a claim that is for a medical or other item or service and he knew or should have known that the claim is false or fraudulent.

2. Whether, in determining the length of the exclusion, the I. G. properly considered 42 C.F.R. § 1001.901(b) in arriving at the exclusion period of 10 years.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each finding below in bold italic face as a separately numbered heading. I discuss each Finding in detail.

1. The I.G. proved and Petitioner does not dispute that he knowingly presented or caused to be presented to an agent of the United States, a claim for a medical or other item or service that Petitioner knows or should know was not provided as claimed or knows or should know is false or fraudulent, an act in violation of section 1128A of the Act.

2. Section 1128(b)(7) of the Act authorizes the Secretary, through her delegate, the I. G., to exclude an individual who has committed an act in violation of section 1128A of the Act from all federal health care programs.

The I.G. made a prima facie showing that improper behavior on the part of Petitioner occurred and that Petitioner's actions and behaviors constituted an act in violation of section 1128A of the Act. Consequently, pursuant to section 1128(b) (7) of the Act and the applicable implementing regulations at 42 C.F.R. § 1001.901, the I.G. is authorized to exercise her discretion and exclude an individual who has committed such an act in violation of section 1128A from participation in all federal health care programs. See Section II. Undisputed Material Facts, supra. Petitioner presented no argument or showing of material fact to rebut the I.G.'s prima facie showing. Indeed, Petitioner does not dispute and, in fact, admits the improper behavior. Thus, the preponderance of the evidence shows that Petitioner caused the submission of false or fraudulent claims to Medicare when he purposely and knowingly inflated his hours for physical therapy services for himself and his employees in order to receive higher remuneration, and that he submitted those false time sheets to the facility, which resulted in the submission of claims for payment to Blue Cross of California, the Medicare contractor, for services which Petitioner knows he and his employees did not provide. P. Opp. at 5, 6, and 7. Thus, I find that given the undisputed facts concerning Petitioner's conduct, the I.G.'s permissive exclusion of Petitioner is unquestionably appropriate and legally supportable.

3. The I.G. correctly considered the factors set forth in the applicable regulations at 42 C.F.R. § 1001.901 in determining the length of Petitioner's exclusion pursuant to section 1128(b)(7) of the Act.

4. The I.G.'s determination to exclude Petitioner for a period of 10 years was appropriate and reasonable under the Act and applicable regulations.

The applicable regulations at 42 C.F.R. § 1001.901 provide that if the I.G. proposes to exclude any individual pursuant to section 1128(b)(7) of the Act, the I.G., in determining the length of the exclusion period imposed, will consider certain factors. Petitioner bears the burden of going forward and the burden of persuasion with respect to any affirmative defenses regarding the reasonableness of the length of the exclusion.⁽²⁾ In my review of whether a period of exclusion is reasonable, the regulations proscribe the scope of my review. The applicable regulations at 42 C.F.R. § 1005.4(c)(6) state that if I find that an individual has committed an act described in section 1128(b) of the Act, I am not authorized to reduce the exclusion period proposed by the I.G. to zero. The legislative history explains further--

in every case where the Inspector General has exercised his or her discretion to impose an exclusion, and where the ALJ concurs that violation did occur, some period of exclusion is necessary to remedy the violation.

Although circumstances such as the absence of proof of harm to beneficiaries or the programs may mitigate the length of the exclusion, they do not eliminate the need for some remedial period of exclusion. Inherent in the structure and far-reaching effect of section 1128 is the notion that any violation compromises the integrity of the programs and thereby places the programs and its beneficiaries at risk.

57 Fed. Reg. 3298, 3325 (1992). Moreover, as I explained above, the implementing regulations for exclusions taken pursuant to section 1128(b)(7) of the Act provide no benchmark period of exclusion or some other specific period of time that sets a minimum period of exclusion to which specified aggravating and mitigating factors are applied to lengthen or shorten the period. Rather, the regulations specify that the I.G. in determining the length of an exclusion need consider only the factors as set forth in 42 C.F.R. § 1001.901(b) in determining the length of the exclusion period.

The I.G.'s February 22, 2000 notice of proposal to exclude and its motion for summary disposition explained the specific factors that the I.G. considered in making its determination to exclude Petitioner for 10 years. I.G. Br. at 22-23. The I.G. looked at the nature and circumstances of the Petitioner's acts and found that these acts resulted in improper payments to him of at least $32,786 in Medicare funds for services which were not furnished as claimed. The I.G. also found that the improper activity occurred over a significant period of time based on Petitioner submitting inflated time sheets to Vallejo on a monthly basis from at least February to December 1994. The I.G. also determined that Petitioner's submission to the facility of padded therapy hours created a precarious situation for the Medicare beneficiaries to whom Petitioner allegedly rendered physical therapy services because these falsified records could adversely affect another's professional assessment of a resident's level of care or ability to be discharged. The I.G. considered and determined that Petitioner had a high degree of culpability for the acts described as Petitioner personally was involved in causing the submission of false or fraudulent claims by padding the time sheets for himself and his employees' services to Vallejo, which in turn based its claims to Medicare for services on this information, resulting ultimately in reimbursement to Petitioner for services which were not provided as claimed.⁽³⁾

I have reviewed Petitioner's opposition carefully to try to glean his counsel's intent and to determine what, if any, affirmative defenses or reasons he has presented as to why the proposed length of exclusion should be modified. Counsel's arguments, however, are disjointed, not always following in a logical fashion, and, in many instances, present legal defenses which are clearly wrong or inapplicable to the circumstances at hand. Therefore, I will try to address Petitioner's legal arguments as made although they may not follow in a logical progression because of Petitioner's own presentation of his case.

Petitioner first argues that the PTBC has the power to adjudicate sanctions and exclusions pursuant to section 1128(e) of the Act. P. Opp. at 10. This argument is clearly erroneous and a misreading of the statutory provision. That provision provides that once the Secretary has excluded an individual, she must promptly notify the State or local agency responsible for licensing or certification of that excluded individual of that fact and the circumstances of the individual's exclusion, request that appropriate investigations be made and sanctions invoked in accordance with applicable State law, and request that the State and local agency keep the Secretary and the I. G. fully and currently informed with respect to any actions taken in response to her request.

Petitioner next claims that because the decision of the PTBC (which consists of the Stipulation and Waiver Agreement between Petitioner and the PTBC) is dated October 3, 1997 and effective November 3, 1997, the I.G.'s reliance on statutory and regulatory provisions enacted after that date (which Petitioner claims are more onerous) is erroneous. I note, however, that even if I were to consider counsel for Petitioner's argument, the relevant statutory provisions, set forth in Petitioner's own brief, do not show any revisions occurring after the November 3, 1997 effective date of the decision. P. Opp. at 24 (showing the last revision to section 1128 of the Act occurred on August 5, 1997). Moreover, the Secretary, in making her determination through the I.G., is authorized to apply the law and the regulations in effect at the time she acts. Consequently, in order to determine what law applies, we look at the version of the statute and regulations in effect when the I.G. issued its notice proposing exclusion dated February 22, 2000.

The applicable law, as currently codified, was enacted by the Medicare and Medicaid Patient and Program Protection Act (MMPPPA) in 1987 (Pub. L. 100-93). The implementing regulations were published as a final rule in January 1992. The regulations were amended in part in September 1998. The regulation at 42 C.F.R. § 1001.901 currently in effect differs from the 1992 version in one respect in that it adds an additional factor which the I.G. may consider in making a determination as to the length of the exclusion period. There is, however, no difference in sections 42 C.F.R. § 1001.901(b)(1) and (2), the only two factors referred to by the I.G. in the proposal to exclude, from the previous version published in 1992 and the 1998 amended version. Consequently, as a practical matter, there would be no difference in the result if the I.G. used the 1992 or the 1998 versions of the regulation here. In any event, I conclude that there is no question that the I.G. applied the proper version of the statute and regulations in determining to exclude Petitioner.

Petitioner's counsel also contends as follows:

[the Department's] regulations [at 42 C.F.R. § 1001.901] are only permissive in this case. It may, but is not required to, impose any exclusion. Therefore Board [sic] had the powers to exclude except where the person is under the close supervision of another licensee. This furthers the rehabilitation of the individual, and if successful probably will result in an individual more attuned to the needs of the programs and less likely to reoffend.

P. Opp. at 12. Petitioner apparently is contending that under the terms of the Stipulation and Waiver with the PTBC, for a period of five years, he is required to work under close supervision where he personally does not receive, handle, or initiate program funding or billing. Petitioner claims that this agreement amounts to a five-year exclusion, the period of time set under the federal rules as the minimum for a mandatory exclusion for conviction of a criminal offense, and that this five-year probationary term constitutes an actual exclusion under the Act and that the Stipulation and Waiver agreement should be given res judicata effect, so as to prevent the I.G. from taking further action against Petitioner. Id. Petitioner claims that the Stipulation and Waiver effectuated a settlement of all claims on behalf of the United States and, thus, the PTBC "exercised jurisdiction under a grant of delegation by federal law . . . the decision is entitled to res judicata, and no further discipline can be taken against petitioner." P. Opp. at 12.

Congress provided the Secretary with administrative exclusionary authority to protect the Medicare and Medicaid programs and its beneficiaries from participants in the program whose misconduct and acts threaten the integrity of the programs. Moreover, the ability to participate as a provider in the Medicare and Medicaid programs is not a right, but rather a privilege, which may be revoked under certain conditions. Consequently, the purpose of the sanction, which is to exclude someone from participation, is to remediate against the potential harm that an individual's participation could engender. Numerous cases have upheld this authority as constitutional, finding no violation of the double jeopardy clause. Manocchio v. Kusserow, 961 F.2d 1539 (11 Cir. 1992); Greene v. Sullivan, 731 F. Supp. 838 (E.D. Tenn. 1990). Moreover, the Supreme Court has more recently held that the Double Jeopardy Clause protects only "against the imposition of multiple criminal punishments for the same offense." Hudson v. United States, 522 U.S. 93 (1997). Clearly, the Secretary's authority to take administrative action on behalf of the federal programs entrusted to her authority by Congress and which is entirely regulated by federal law is completely independent and separate from any action taken by the PTBC. Petitioner need not participate in these federal programs if he chooses not to; however, if Petitioner intends to participate in these programs and seek federal reimbursement from Medicare or other federal programs for services provided to beneficiaries of the program, then he must do so in accordance with the Act and the regulations. While Petitioner might argue, as an equitable matter, that the terms of his five-year probation under the agreement with the PTBC should be taken into account as a mitigating factor, the five-year probation has no consequence in these proceedings as the I.G.'s authority to impose exclusion is authorized by federal law and takes precedence here.

Petitioner's arguments concerning res judicata and full faith and credit are of no consequence here either. The doctrine of res judicata binds parties to an action from later relitigating the same claim or cause of action. In this matter, the I.G. was not a party to any of the proceedings before the PTBC and the PTBC does not have the authority to exclude Petitioner from participation in federal health care programs. Moreover, the full faith and credit clause is inapplicable as well. The full faith and credit clause applies to the federal courts and its procedures particularly where a dispute involves a conflict between the laws of two different states. The clause then guarantees that each state will give full faith and credit to every other state's laws, records and judicial proceedings as will a federal court to matters involving State law at issue before it. However, the I.G.'s authority to exclude is a matter of federal administrative law and separate and independent from any action which any state administrative body might take.

Petitioner has argued in defense of this action, that the sole evidence used as the basis for exclusion is the result of a violation of his Fifth Amendment rights and right to counsel under Miranda v. Arizona, 384 U.S. 436 (1966). It is not precisely clear how Petitioner intends this as a defense to a civil administrative proceeding. However, the right to counsel provision in Miranda is generally used by defendants in criminal proceedings to suppress from admission into evidence incriminating statements or confessions made by a defendant while in "custody" without the benefit of counsel. First of all, Petitioner has not shown that Miranda applies in administrative proceedings such as these. At the very least, this is a civil administrative proceeding and the allegedly incriminating statement was given in writing by Petitioner after he voluntarily went to the Department of Consumer Affairs. There is no indication that Petitioner ever was considered to be in custody, let alone criminal custody. In fact, there is no indication from the evidence in the record that criminal proceedings have ever been instituted against Petitioner as a result of these statements. In any event, even if we were to suppress that statement, Petitioner made the same statement later in the Stipulation and Waiver with the PTBC which he attested to as being voluntarily given and in consideration of which the PTBC decided not to pursue further administrative action against Petitioner. Clearly, Miranda is inapplicable here and Petitioner has shown no basis for finding that his Fifth Amendment rights were violated.

After consideration of the undisputed evidence and Petitioner's legal defenses, I conclude that the preponderance of the evidence shows Petitioner is an untrustworthy individual for whom a substantial exclusion is warranted. The nature and extent of Petitioner's deliberate conduct and his personal culpability for that conduct is strong evidence that a substantial exclusion is needed to protect both program beneficiaries and program funds. Thus, I conclude that the I.G. appropriately considered the factors in 42 C.F.R. § 1001.901(b)(1) and (2) in making her determination that the exclusion period necessary for the protection of the program and its beneficiaries given Petitioner's misconduct was 10 years. Moreover, Petitioner has not met its burden of persuasion showing me that there are any affirmative defenses which should alter the length of the exclusion period. Therefore, I find that the I.G.'s determination to exclude Petitioner for 10 years was appropriate and reasonable under the applicable law and regulations.

VI. Conclusion

For the findings and reasons set forth more fully above, I affirm the determination of the I.G. to exclude Petitioner from participation in the Medicare, Medicaid, and all other federal health care programs for a period of 10 years.

Marion T. Silva

Chief Administrative Law Judge

1. The regulatory provision at 42 C.F.R. § 1001.2003 provides that a request for hearing in response to a proposal to exclude must set forth:

(1) The specific issues or statements in the notice with which the individual or entity disagrees;

(2) The basis for that disagreement;

(3) The defenses on which reliance is intended;

(4) Any reasons why the proposed length of exclusion should be modified; and

(5) Reasons why the health or safety of individuals receiving services under Medicare or State health care programs does not warrant the exclusion going into effect prior to the completion of an [Administrative Law Judge proceeding].

2. Although the regulation at 42 C.F.R. § 1005.15 provides that Petitioner here has the burden of persuasion with respect to any affirmative defenses and any "mitigating circumstances," the applicable regulation at 42 C.F.R. § 1001.901, unlike 42 C.F.R. §§ 1001.701 and 1001.951, which are controlled by the same burden of proof, has no mitigating circumstances enunciated which may be considered as a basis for reducing the period of exclusion. Compare 42 C.F.R. § 1001.701(d)(3) and 42 C.F.R. 1001.951(b)(2) with 42 C.F.R. § 1001.901(b).

3. Counsel for the I.G. in its brief also pointed to a third factor under the regulation (adverse action by the Physical Therapy Board of California (PTBC) against Petitioner because of his acts) which applies to Petitioner's conduct and which should be considered in determining the length of the exclusion. 42 C.F.R. § 1001.901 (b)(4). However, that factor was not considered by the I.G. in making its proposal to exclude Petitioner for 10 years and I do not find it appropriate for me to consider that issue here.