Tag Archives: Department of Health and Human Services

Exclusion Law

Exclusion from Medicare and Medicaid (and all Federally funded health programs) is a serious penalty.

The Department of Health and Human Services, Departmental Appeals Board, Civil Remedies Division, publishes its decisions, and from these it is possible to ferret out a few rules of the road.

There is a great variety of cases leading to exclusion.  A surprising number involve fines against convenience stores that sell cigarettes to minors.  Many concern doctors or registered nurses who are excluded from Medicare and Medicaid because of loss or suspension of their license in the state where they work.  A number of cases involve health care providers who argue the number of years for exclusion is too great.

Sadly, there are all too many cases of Skilled Nursing Facilities being fined or shut down because of abuse of their patients, usually helpless elders.  It was a shock to see how many suppliers of medical equipment are kicked out of the program because on the day an inspector showed up, they were not open during their posted hours.

The harshest penalties come from those excluded because of being convicted of a felony.  These include actions such as “unlawful manufacture, distribution, prescription, or dispensing of a controlled substance” Baldwin Ihenacho, DAB CR4002 (2015); five years exclusion for “criminal sale of a prescription for a controlled substance” (the narcotic PercocetShaikh M. Hasan, M.D., DAB CR3663 (2015) or forging prescriptions for narcotics Marcie A. Conlon, DAB CR3338 (2014) or “unlawfully writing multiple prescriptions for Oxycodone in exchange for direct cash payments of $200 per prescription.” Jose C. Menendez Campos, M.D., DAB CR2923 (2013).

From these various cases, it is possible to derive a number of lessons regarding the administrative law and how it is applied to the facts.

Nolo Contendere

A plea and acceptance by the court of nolo contendere to an offense qualifies as “convicted” within the meaning of section 1128 of the Act, thus triggering mandatory exclusion.  Gustavo E. Borjas, DAB CR3334 (2014) (solicitation to purchase cocaine)

“Good Faith” Billing Mistakes or Reliance on Billing Expert

No excuse allowed.  Proof of culpability is not needed to justify revocation under 42 C.F.R. Sec 424.535(a)(8).  Louis J. Gaefke, D.P.M., DAB No. 24554 at 5-6 (2013).  “On its face 42 C.F.R. § 424.535(a)(8) does not distinguish between false claims that are filed accidentally and those that are fraudulent or filed with willful disregard of their truth.”  Access Foot Care, Inc./Robert Metnick, D.P.M., DAB CR4113, at 3, (2015).

Community Service and Character References

Some attempt to get their penalties reduced by showing they are well respected, or service special communities.  No go.  This information is irrelevant.  See George John Schulte, DAB CR3667 at 3, (2015) “The regulations require me to exclude irrelevant or immaterial evidence from the record.  . . .  the only issues I may decide in this case are whether the IG had a basis for excluding Petitioner and, if so, whether the length of exclusion imposed is not unreasonable. . . .  letters concerning Petitioner’s character, are not relevant.” See also Dinesh R. Patel, M.D., DAB CR3355, at 2, (2014) (community service of doctor is not relevant).

Payment of Restitution

Many bring up that they have paid restitution for the problem, and suggest this is a mitigating factor.  No go. “[R]egulations direct me to consider the entire amount of financial loss ‘regardless of whether full or partial restitution has been made.’ 42 C.F.R. § 1001.102(b)(1).”  Donald Kent Blaine, DAB CR3427, at 3, (2014).


Documents containing hearsay may be included in hearings, which are not bound by Federal Rules of Evidence.  There is no automatic hearsay exclusion rule. Karen R. Morgan, DAB CR3331, at 2, (2014).

Mitigating Factors

The wrong-doer has passed away; the company paid restitution; the company needs to continue operating in order to pay off the penalty.   None of these are considered mitigating factors. 42 C.F.R. § 1001.102(c).” Kirpa, LLC, DAB CR3247, at 4, (2014) (emphasis added) 

There are a number of interesting features in the litigation of the Departmental Appeals Board.   This blog post was meant to give you a taste of a few interesting features in this unique environment.

RAC Appeal – The Right to a Fair and Speedy Trial

RAC Under Attack

Saying he fears “no retaliation from anyone,” the CEO of a small California hospital has filed suit in U.S. District Court claiming that $1.1 million in Medicare claims flagged by recovery audit contractors have been in limbo “for years.”

California’s only non-profit independent rehabilitation hospital has filed suit to force the federal government to resolve disputed Medicare billing appeals within its mandated 90-day window.

Felice Loverso, president and CEO of the 68-bed Casa Colina Hospital and Centers for Healthcare in Pomona, says the federal government has “for years, years” been holding about $1.1 million in claims that were flagged by recovery audit contractors. Casa Colina has appealed the claims denials, but, he says, HHS hasn’t come close to providing a hearing in front of an administrative law judge within the 90-day window mandated by Medicare law.

“Chasing a System that Seems to be Broken

Casa Colina generates about $11 million in net revenue each year, Loverso says, so the $1.2 million in deferred claims and the $2.1 million in reserves represent “a big chunk of money.”
“When you run a small hospital and you have to reserve $2.1 million, there is a lot of children with autism who could be treated with that money, there is a lot of free care I could be doing, prostheses I could be putting on people. There are a lot of things I could do with that $2.1 million rather than chasing a system that seems to be broken.”

The article is worth the read. Click on the link below for the whole story…

Rehab Hospital Takes on HHS Over RAC Appeal Delays


Contact  Barraclough for smart strategies


Approximately $77,000,000,000 was paid out to physicians and other health care professionals in 2012.

The Department of Health and Human Services has released a set of data giving details for 880,000 health care providers.   The data covers the Medicare Part B Fee-For-Service program.

To examine more details, visit the physician dataset here.

There is a detailed write-up on the Mintz Levin blog “Health Law & Policy Matters“.