UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ETHAN E. BICKELHAUPT, M.D.,
Plaintiff,
V.
KATHLEEN SEBELIUS, in her official
capacity as SECRETARY OF THE
UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES,
200 Independence Ave., S.W.
Washington D.C. 20201,
And
DANIEL R. LEVINSON, in his official
Capacity as INSPECTOR GENERAL
OF THE UNITED STATES DEPARTMENT
OF HEALTH AND HUMAN SERVICES,
300 Independence Ave., S.W.
Washington D.C. 20201
Defendants.
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No. 12-CV-
COMPLAINT FOR DECLARATORY JUDGMENT, INJUNCTIVE AND OTHER RELIEF
Plaintiff, Ethan E. Bickelhaupt, M.D. (“Bickelhaupt”), by and through his attorneys,
Kerry M. Hultquist and Robert Pickrell, files this Complaint and states as follows:
INTRODUCTION
1.
This is an action for declaratory judgment, injunctive and other relief brought
by Plaintiff, Ethan E. Bickelhaupt, against Defendant, Kathleen Sebelius, in her official
capacity as Secretary of the United States Department of Health and Human Services
Page | 1
(“Secretary”) and against Defendant, Michael R. Levinson, in his official capacity as
Inspector General (“IG”) of the United States Department of Health and Human Services.
2.
In this action, plaintiff seeks (i) a declaratory judgment declaring that the
final order issued by the Secretary and/or the I.G. excluding plaintiff from participation in
all federal health care programs for a period of five (5) years:
(i)
violates the Double Jeopardy and Equal Protection Clauses of the 5th
Amendment to the U.S. Constitution;
(ii)
violates the Equal Protection Clause of the 5th Amendment of the U.S.
Constitution;
3.
(iii)
violates the Administrative Procedures Act, 5 U.S.C. § 706 (“APA”);
(iv)
violates the Rehabilitation Act, 29 U.S.C. § 709; and
(v)
is contrary to law, arbitrary and capricious and an abuse of discretion.
As a result of the violations specified above, Plaintiff seeks:
(i)
an order vacating and permanently enjoining the exclusion;
(ii)
an order requiring the Secretary and/or the Inspector General to
remove Plaintiff’s name from the List of Excluded Individuals and
Entities;
(iii)
an order declaring that plaintiff’s exclusion, pursuant to section
1128(a)(4) of the Social Security Act, violates the Double Jeopardy
Clause of the 5th Amendment of the U.S. Constitution;
(iv)
an order declaring that plaintiff’s exclusion, pursuant to section
1128(a)(4) of the Social Security Act, violates the Equal Protection
Clause of the 5th Amendment of the U.S. Constitution;
Page | 2
(v)
an order declaring that plaintiff’s exclusion, pursuant to section
1128(a)(4) of the Social Security Act, violates the Rehabilitation Act;
(vi)
a permanent injunction barring the Secretary and/or the Inspector
General from sending the “bulletin” that accompanies Notice of
Exclusion letters which impermissibly modifies the definition and the
scope and effect of an exclusion;
(vii)
a permanent injunction prohibiting the Secretary and/or the
Inspector General from implementing actions or policies which utilize
the impermissible definition and scope and effect of an exclusion; and
(viii) an order awarding plaintiff costs and reasonable attorneys’ fees.
BACKGROUND
4.
The Social Security Act, codified at 42 U.S.C. § 1320a-7, sets forth the
circumstances in which the Secretary may exclude individuals convicted of crimes from
participating in Medicare, Medicaid, and all other federal health care programs. The
Secretary has delegated this exclusion authority to the I.G.
5.
By letter dated August 31, 2011, the IG notified plaintiff that he was being
excluded from participation in Medicare, Medicaid, and all other federal health care
programs for a period of five (5) years.
6.
The defendants premised plaintiff’s exclusion pursuant to 42 U.S.C. § 1320a-
7(a)(4), due to plaintiff’s conviction “of a criminal offense related to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance as defined
under Federal or State law.”
Page | 3
7.
Plaintiff timely sought review by an Administrative Law Judge who upheld
the exclusion. By order dated October 2, 2012, the Departmental Appeals Board (“DAB”)
also affirmed the exclusion. Pursuant to statute, the October 2, 2012, order from the DAB
constituted the Secretary’s final decision in the matter.
PARTIES
8.
Plaintiff, Ethan E. Bickelhaupt, M.D., is a licensed physician and currently
resides in Chicago, Illinois.
9.
Defendant, Kathleen Sebelius, is the Secretary of the United States
Department of Health and Human Services (“HHS”) and is being sued in her official capacity
only.
10.
Defendant, Daniel R. Levinson, is the Inspector General of HHS, and is being
sued in his official capacity only.
JURISDICTION AND VENUE
11.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331
because this action arises under the Constitution and laws of the United States.
12.
Additionally, this Court has jurisdiction over this matter pursuant to sections
1128(f)(1) and 205(g) of the Social Security Act and 42 C.F.R. § 1005.21(k)(1) because the
Plaintiff is seeking judicial review of a final decision issued by the Secretary of HHS.
13.
The Complaint seeks declaratory relief pursuant to the Declaratory Judgment
Act, 28 U.S.C. §§ 2101 and 2102.
14.
Venue is proper in this District pursuant to 42 U.S.C. § 405(g) because
plaintiff resides in this District.
Page | 4
FACTUAL BACKGROUND AND REGULATORY SCHEME
15.
Plaintiff, Ethan E. Bickelhaupt,
M.D., is a
addictionologist, and pain management specialist.
background.
physician,
psychiatrist,
He also has a family medicine
He has board certifications in psychiatry, geriatric psychiatry, forensic
medicine, pain medicine, electroconvulsive therapy and addiction medicine. In 2010, Dr.
Bickelhaupt earned a Masters in Medical Management (MMM) from the University of
Southern California and graduated on the Dean’s List. The MMM is a master of business
degree specifically designed for physicians who want to do some work in administration,
program design or research.
16.
During the years 2005 through 2008, plaintiff was employed as a physician at
the Veteran’s Administration hospital in Topeka, KS where he specialized in general and
geriatric psychiatry, pain medicine, and academic medicine. During this same time period,
he was also employed as a Clinical Assistant Professor of Psychiatry at the Universities of
Kansas and Missouri Schools of Medicine in Kansas City, Missouri. From 1982 through
2006, Dr. Bickelhaupt maintained a relatively small private medical practice in the cities of
Perry and Topeka, Kansas.
17.
At no time in Dr. Bickelhaupt’s life has he ever abused any patient nor any
beneficiary of Medicare, Medicaid or any other Federal health care program.
There has
never even been any allegation of patient abuse in Dr. Bickelhaupt’s over thirty (30) year
career of practicing medicine. He has never committed health care fraud of any kind and he
has never defrauded Medicare, Medicaid or any other Federal or state health care program,
nor has there ever even been an allegation of such. There has never been an allegation that
Dr. Bickelhaupt was incompetent or ever provided inappropriate or inadequate care.
18.
In September of 2007, Petitioner voluntarily sought treatment for drug and
alcohol addiction at Resurrection Behavioral Health’s (“RBH”) Professionals Program1 in
Chicago, Illinois.
1
On September 10, 2007, Daniel Angres, M.D., Medical Director of
At that time, the Professionals Program was affiliated with Rush University Medical Center and not Resurrection.
Page | 5
Resurrection Behavioral Health – Addiction Services,
diagnosed plaintiff with
polysubstance dependence, a form of addiction.
19.
The medical disease of addiction, as defined by the American Society of
Addiction Medicine (“ASAM”)2, is characterized by the continued use and abuse of addictive
substances despite adverse consequences. These manifestations can occur compulsively or
impulsively, as a reflection of impaired control. Addiction is not solely a function of choice.
It is a neurochemical disease process. It is not a desired condition but a brain disease that
appears to be present in a percentage of the population who have, primarily genetically, a
predisposition to the addictive process.
20.
With respect to the disease of addiction, there is a well-documented
disconnect between that part of the brain which can make good decisions and that part of
the brain that is more emotional, including even unconscious or driven behaviors. As
delineated in the ASAM discussion of the Criteria for Addiction, behaviors such as
dishonesty, violation of one’s values or the values of others, and criminal acts, can be a
component of the disease of addiction. This is because “drugs and alcohol have a direct
toxic effect on the central nervous system causing all sorts of aberrant behaviors and the
continuing need for the substance despite adverse consequences.” These complications
result from, rather than contribute to, the disease of addiction. Chemical dependency
(addiction) is a familial, genetic medical disease from which recovery is predictable, as long
as certain actions are continued.
21.
Following Dr. Angres’ diagnosis of polysubstance abuse, Dr. Bickelhaupt
underwent ten (10) weeks of active treatment for addiction at RBH, including Partial
Hospitalization and Independent Outpatient treatment.
He then participated in the
Professionals Program’s Advanced Independent Living Program (AIL), which is a
component of the RBH After Care Program. Plaintiff was successfully discharged from the
Professionals Program in its entirety sometime in early 2009.
ASAM is a professional society representing approximately 3,000 physicians dedicated to increasing access
and improving quality of addiction treatment, educating physicians and the public, supporting research and
prevention, and promoting the appropriate role of physicians in the care of patients with addictions.
2
Page | 6
22.
Following Dr. Bickelhaupt’s treatment, because he had been particularly
helpful in things that Dr. Angres thought were beneficial to his recovery, to the community
attending the Professionals Program and the community at large, Dr. Angres requested Dr.
Bickelhaupt to stay with the Professionals Program as a part time Program Specialist. In
more than twenty five (25) years of treating addicts, and in particular, approximately three
hundred (300) addicted physicians, Dr. Bickelhaupt is the only patient that has ever been
asked to become an employee of the Professionals Program.
23.
In March 2011, based largely upon Dr. Angres’ confidence in his recovery and
his desire to expand and incorporate Dr. Bickelhaupt’s unique professional skills into the
RBH treatment process, his employment was converted from part-time to full-time. During
his employment, Dr. Bickelhaupt’s specific duties evolved and expanded.
24.
On September 2, 2010, pursuant to a plea agreement, Judge Richard D.
Rogers of the United States District Court for the District of Kansas, found Plaintiff guilty of:
1) One count of distributing a controlled substance outside the scope of his professional
practice in violation of 21 U.S.C. §§ 841(a)(1); and 2) One count of acquiring a controlled
substance by misrepresentation, fraud, forgery, deception or subterfuge in violation of 21
U.S.C. §§ 843(a)(3) and (d). The acts which led to the convictions occurred in 2006 or
earlier.
25.
On September 2, 2011, Dr. Bickelhaupt was sentenced by Judge Rogers of the
U.S. District Court for the District of Kansas. Dr. Angres appeared at the sentencing hearing
to testify on Dr. Bickelhaupt’s behalf. As Dr. Angres explained to the Court, the only reason
Dr. Bickelhaupt committed the crimes for which he pled guilty was to acquire more drugs,
due to his then active addiction process. Dr. Angres requested that Dr. Bickelhaupt receive
a sentence of probation because of his great need at the Professionals Program. Dr. Angres
also agreed to make himself responsible to the court and agreed to truthfully and
accurately inform the court if any problems with Dr. Bickelhaupt occurred.
26.
In reaching the decision to sentence Dr. Bickelhaupt to: (i) three (3) years of
probation; (ii) three hundred (300) hours of community service; and (iii) a prohibition
Page | 7
from engaging in the private practice of medicine for a period of three (3) years, rather
than imposing a term of imprisonment, Judge Rogers specifically found:
a.
that, due to Dr. Bickelhaupt’s very high level of education and training,
and the fact that this was Dr. Bickelhaupt’s first offense, he was not likely to
re-offend;
b.
that Dr. Bickelhaupt’s offenses were “directly related to his substance
abuse problems;”
c.
that Dr. Bickelhaupt was a recreational drug user and, therefore, Dr.
Bickelhaupt’s problem was less serious [when compared to drug traffickers]
because it did not involve the collection and disposal of large sums of money
which could lead to violence;
d.
that Dr. Bickelhaupt’s risk of recidivism was low because the offenses
Dr. Bickelhaupt committed were not committed to economically support him
or his family;
e.
that “[t]here are professional limitations which can be placed upon
[Dr. Bickelhaupt’s] access to prescription drugs which would limit his ability
to re-offend;
f.
that Society has benefitted from Dr. Bickelhaupt’s work;
g.
that society would lose the potential to gain from Dr. Bickelhaupt’s
talents if he were sentenced to prison;
h.
that an extraordinary number of letters from intelligent, accomplished
persons demonstrated that Dr. Bickelhaupt is a kind and compassionate
professional who had often sacrificed to help others in need of mental help or
counseling services;
Page | 8
i.
that Dr. Bickelhaupt had little to gain from rehabilitation programs
offered by the Bureau of Prisons because they were inferior to the program
Dr. Bickelhaupt was already attending;
j.
that, while attending a treatment program, Dr. Bickelhaupt furthered
his education;
k.
that “[most] impressively, Dr. Bickelhaupt has contributed to the
treatment of others so significantly that he was offered an employment
relationship with the [Professionals] program;”
l.
that interrupting Dr. Bickelhaupt’s connection with the program could
negatively affect his treatment, the treatment of other persons in the
program and interfere with his opportunity for successful employment in a
field where he has had success;
m.
that Dr. Bickelhaupt had suffered financially, professionally and
emotionally from his crimes;
n.
that since his offense Dr. Bickelhaupt “has gained and maintained
sobriety and the letters of support indicate that this is an individual with a lot
of compassion in his work who made a terrible mistake” as verified by his
“nonexistent criminal history”; and
o.
that, with Dr. Bickelhaupt’s previous support of the community, his
extensive education and life experience and his community service, he would
be of service to others.
27.
Almost a year after he was sentenced, by letter dated August 31, 2011, the IG
notified plaintiff that he was being excluded from participation in Medicare, Medicaid, and
all other federal health care programs for a period of five (5) years.
28.
This Notice of Exclusion letter informed plaintiff that he was being excluded
pursuant to 42 U.S.C. § 1320a-7(a)(4), due to his conviction “of a criminal offense related to
Page | 9
the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance as defined under Federal or State law.” However, it failed to specify which act
for which plaintiff was convicted served as the basis of his exclusion.
29.
Accompanying the Notice of Exclusion letter referenced in the preceding
paragraph, was a bulletin from the Office of the Inspector General. The bulletin stated, inter
alia, that the exclusion “significantly limits [plaintiff’s] ability to work in any capacity in the
health care field in the United States.” It also provided that:
You are prohibited from submitting or causing claims to be submitted to
Federal health care programs for items or services which you provide, and
you are also prohibited from being employed to provide items or services
which are billed to a Federal health care program. Such items or services
could include administrative, clerical, and other activities that do not directly
involve patient care or the provision of any health care related services.
An excluded person cannot be employed by a provider to perform functions
paid for, in whole or in part, by any Federal health care program. Generally
speaking, with rare exceptions, you may not be employed by a hospital,
nursing home, or any other institutional provider that participates in Federal
health care programs.
30.
The bulletin provided no reference to statutory authority or to authority
provided by any applicable Code of Federal Regulations regarding the purported scope and
effect of plaintiff’s exclusion.
31.
On the effective date of plaintiff’s exclusion, he was employed by
Resurrection Behavioral Health – Professionals Program as a Program Specialist.
32.
On or about October 2, 2011, administrative personnel and/or attorneys of
Resurrection Health Care informed Dr. Angres that Dr. Bickelhaupt had been included in
the U.S. Department of Health and Human Services, Office of the Inspector General’s List of
Excluded Individuals and Entities. Apparently fearing that plaintiff’s employment could
potentially subject RBH and/or its parent, Resurrection Health Care, to civil monetary
penalties or other potential adverse action by the Secretary and/or the I.G., against his
wishes, Dr. Angres was directed to immediately terminate the employment relationship
between Dr. Bickelhaupt and the Professionals Program. Had Dr. Angres not been directed
Page | 10
by Resurrection personnel to terminate Dr. Bickelhaupt, his employment with the
Professionals Program would have continued and his role and responsibilities would have
greatly expanded.
33.
Plaintiff timely appealed his exclusion to an Administrative Law Judge , who
ultimately sustained plaintiff’s exclusion.
34.
Plaintiff then sought review of his exclusion by the Departmental Appeals
Board (“DAB”).
On October 2, 2012, the DAB issued an order sustaining plaintiff’s
exclusion. Pursuant to statute, the DAB’s order became the Secretary’s final decision
regarding the matter.
35.
As a result of the foregoing, plaintiff initiated the present action.
COUNT I
PLAINTIFF’S EXCLUSION UNDER SECTION 1128(A)(4) OF THE SOCIAL
SECURITY ACT VIOLATES THE DOUBLE JEOPARDY CLAUSE OF THE
5TH AMENDMENT OF THE UNITED STATES CONSTITUTION
Paragraphs one (1) through thirty-three (33) are incorporated by reference herein.
36.
Plaintiff’s exclusion, purportedly premised upon section 1128(a)(4) of the
Social Security Act, 42 U.S.C. § 1320a-7(a)(4), constitutes a second, impermissible criminal
punishment in violation of the Fifth Amendment to the U.S. Constitution’s Double Jeopardy
Clause.
37.
A review of the Congressional record reveals that Congress intended section
1128(a)(4) to serve as a criminal punishment. As such, plaintiff’s exclusion thereunder
constitutes a violation of the 5th Amendment’s Double Jeopardy Clause.
38.
Assuming for the sake of argument that the Court finds that Congress did not
intend plaintiff’s exclusion under section 1128(a)(4) to serve as a criminal punishment, an
examination of the effect of plaintiff’s exclusion reveals that it does indeed constitute a
second and impermissible criminal punishment in violation of the 5th Amendment’s Double
Jeopardy Clause.
Page | 11
39.
In addition, plaintiff’s exclusion under section 1128(a)(4) does not advance
the purported remedial purposes of protecting the integrity of federal health care
programs and protecting their beneficiaries from fraud and abuse. Accordingly, it serves as
a second and impermissible criminal punishment in violation of the 5th Amendment’s
Double Jeopardy Clause.
40.
This fact, and the fact that the plaintiff was diagnosed as suffering from
polysubstance abuse, a form of addiction, is verified by the affidavit of Dr. Daniel Angres
(“Angres”) which was offered as an exhibit during the administrative appeal of plaintiff’s
exclusion.
41.
As Angres’ affidavit further established, the commission of criminal acts
perpetrated in order to secure drugs is caused by the medical disease of addiction.
42.
Angres’ affidavit also established that, at the time of plaintiff’s exclusion, he
had maintained an excellent record of sobriety for over three (3) years. This included
significant involvement in twelve (12) step programs and plaintiff’s employment as a
“Program Specialist” at Resurrection Behavioral Health’s, Professionals Program, a
nationally recognized drug and alcohol treatment center tailored to assist high
responsibility individuals with drug and/or alcohol addiction.
43.
Finally, Angres’ affidavit confirmed, inter alia, that having removed plaintiff’s
once-active addictive process, the need for the plaintiff to commit crimes in order to obtain
drugs had been removed.
44.
Accordingly, his exclusion from participation in Medicare, Medicaid, and all
other federal health care programs serves no remedial purpose. Specifically, because the
once-active disease process has been arrested, plaintiff’s exclusion does nothing to further
Page | 12
the alleged remedial goals of exclusion, i.e., to protect the integrity of the federal health care
programs and protect said programs and their beneficiaries from fraud, abuse and neglect.
45.
Defendants’ implementation of their decision to exclude plaintiff from
participation in federal health care programs is causing, and will continue to cause,
substantial, imminent, and irreparable injury to plaintiff.
COUNT II
PLAINTIFF’S EXCLUSION UNDER SECTION 1128(a)(4) OF
THE SOCIAL SECURITY ACT VIOLATES THE EQUAL PROTECTION
CLAUSE OF THE FIFTH AMENDMENT OF THE U.S. CONSTITUTION
Paragraphs one (1) through forty-five (45) are incorporated by reference herein.
46.
Under the Fourteenth Amendment to the U.S. Constitution, the States are
required to afford all people equal protection under the laws. By its explicit terms, the
Fourteenth Amendment only applies to the States. However, the Fifth Amendment's due
process guaranty, beginning with Bolling v. Sharpe, 347 U.S. 497 (1954), has been
interpreted as imposing some of the same restrictions on the federal government: "Though
the Fifth Amendment does not contain an equal protection clause, as does the Fourteenth
Amendment which applies only to the States, the concepts of equal protection and due
process are not mutually exclusive." Id. at 499. Fifth Amendment equal protection claims
are treated precisely the same as equal protection claims under the Fourteenth
Amendment.” Weinberger v. Wiesenfeld, 420 U.S. 636, 638, n. 2 (1975).
47.
The Supreme court has consistently required that legislation classify the
persons it affects in a manner rationally related to legitimate governmental objectives, Id.;
Dandridge v. Williams, 397 U.S. 471 (1970); Matthews v. DeCastro, 429 U.S. 181 (1976).
Page | 13
48.
As explained above, the alleged purpose of section 1128(a)(4) is to protect
Medicare, Medicaid and all other Federal health care programs, and its beneficiaries from
fraud and abuse.
49.
Section 1128(a)(4) excludes those who have been convicted, after August
1996, of a felony “relating to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.”
42 U.S.C. § 1320a-7(a)(4).
Unlike the other
mandatory exclusions found in section 1128, for an exclusion to be imposed under section
1128(a)(4), there is no requirement that said conviction “relate to,” nor result in, “neglect
or abuse of patients in connection with the delivery of a health care item or service.” See §
1128(a)(2). It does not require that said conviction be “in connection with the delivery of a
health care item or service or with respect to any act or omission in a health care
program… consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct.” See § 1128(a)(3).
50.
Section 1128(a)(4) is the only mandatory exclusion subsection that does not
require some stronger nexus between an excluded person’s actions and the legitimate
governmental goal of the statute.
As was the case with this plaintiff, the crimes he
committed had absolutely no connection, direct or otherwise, with any federal health care
program. He impermissibly wrote prescriptions out of his home where he maintained a
small private practice. The fact that he was, contemporaneously therewith, employed at
the V.A. in Topeka, Kansas is of no consequence. His criminal acts were far removed from
his federal workplace.
51.
Because those individuals and/or entities that are convicted of felonies,
occurring after August 1996, relating to the manufacture, distribution, or prescription of
Page | 14
controlled substances, are not, in all case, members of a suspect class, the court employs a
rational basis test to determine whether their classification furthers a legitimate
governmental purpose. Wilson, 450 U.S. at 230. To determine whether the statute passes
the aforementioned rational basis test, the analysis is, for all intents and purposes, identical
to the analysis under the sixth Kennedy v. Mendoza-Martinez factor.
52.
Under this test, the classification inherent in section 1128(a)(4) fails and
mandates a ruling that it is unconstitutional in violation of the Equal Protection Clause of
the Fifth Amendment. This is the case because the classification is over inclusive and does
not advance the governmental purpose of protecting Medicare, Medicaid, and all other
federal health care programs, and their beneficiaries, from fraud and abuse. Further, the
government has not demonstrated that those individuals and/or entities, convicted of
crimes which serve as a basis for imposition of an exclusion under section 1128(a)(4), are
more likely to abuse or defraud federal health care programs or its beneficiaries. This is
particularly the case with respect to those persons, like the plaintiff, whose offenses were
far removed from all federal health care programs and who have no history of fraud or
abuse of said programs. There are many less restrictive means and classifications the
government could employ to protect the federal health care programs and their
beneficiaries.
53.
In addition, the Defendants’ exclusion of the plaintiff violates the Equal
Protection Clause of the 5th Amendment to the U.S. Constitution because excluding those
individuals convicted of criminal offenses “related to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance as defined under Federal
or State law” serves no rational basis.
Page | 15
54.
Defendants’ implementation of its decision to exclude plaintiff from
participation in Medicare, Medicaid, and all other federal health care programs is causing,
and will continue to cause, substantial, imminent, and irreparable injury to the plaintiff.
COUNT III
THE DEFENDANTS HAVE PROMULGATED REGULATIONS DEFINING THE
SCOPE AND EFFECT OF AN EXCLUSION IN VIOLATION OF THE PROCEDURAL
REQUIREMENTS OF THE ADMINISTRATIVE PROCEDURES ACT
Paragraphs one (1) through fifty-four (54) are incorporated by reference herein.
55.
As stated, supra, by letter dated August 31, 2011, the IG notified plaintiff that
he was being excluded from participation in Medicare, Medicaid, and all other federal
health care programs for a period of five (5) years.
56.
Accompanying the Notice of Exclusion letter, referenced above, was a
bulletin from the Office of the Inspector General. The bulletin stated, inter alia, that the
exclusion “significantly limits [plaintiff’s] ability to work in any capacity in the health care
field in the United States.” It also provided that:
You are prohibited from submitting or causing claims to be submitted to
Federal health care programs for items or services which you provide, and
you are also prohibited from being employed to provide items or services
which are billed to a Federal health care program. Such items or services
could include administrative, clerical, and other activities that do not directly
involve patient care or the provision of any health care related services.
An excluded person cannot be employed by a provider to perform functions
paid for, in whole or in part, by any Federal health care program. Generally
speaking, with rare exceptions, you may not be employed by a hospital,
nursing home, or any other institutional provider that participates in Federal
health care programs.
Page | 16
57.
The bulletin contained no reference to statutory authority or to any authority
contained in the Code of Federal Regulations regarding the quoted excerpts in the
preceding paragraphs.
58.
The Administrative Procedures Act (“APA”) requires the Secretary to publish
regulations relating to the implementation of 42 U.S.C. § 1320a-7, as well as any
amendments to the regulations pertaining to that section. 5 U.S.C. § 552.
59.
The APA also prohibits the Defendants from enforcing the Social Security Act
in a manner that is contrary to law or arbitrary and capricious. 5 U.S.C. § 706.
60.
The APA specifically provides that “a person may not in any manner be
required to resort to, or be adversely affected by, a matter required to be published in the
Federal Register and not so published. 5 U.S.C. § 552(a)(1)(E).
61.
The Code of Federal Regulations does, in fact, specifically define “exclusion,”
its scope and effect, and a number of related terms, as follows:
Exclusion means that items or services furnished, ordered or prescribed by a
specific individual or entity will not be reimbursed under Medicare, Medicaid
and all other Federal health care programs until the individual or entity is
reinstated by the OIG. 42 C.F.R. § 1001.2.
62.
In addition, paragraph (b) of 42 C.F.R. § 1001.1901provides, in pertinent
part:
(b) Effect of exclusion on excluded individuals and entities.
(1) Unless and until an individual or entity is reinstated into the
Medicare, Medicaid and other Federal health care programs in
accordance with subpart F of this part, no payment will be made
by Medicare, Medicaid or any other Federal health care programs
for any item or service furnished, on or after the effective date
specified in the notice period, by an excluded individual or entity,
or at the medical direction or on the prescription of a physician or
other authorized individual who is excluded when the person
Page | 17
furnishing such item or service knew or had reason to know of
the exclusion. This section applies regardless of whether an
individual or entity has obtained a program provider number or
equivalent, either as an individual or as a member of a group,
prior to being reinstated.
*****
(2) An excluded individual or entity that submits, or causes to be
submitted, claims for items or services furnished during the
exclusion period is subject to civil monetary penalty liability
under section 1128A(a)(1)(D) of the Act, and criminal liability
under section 1128B(a)(3) of the Act and other provisions. In
addition, submitting claims, or causing claims to be submitted or
payments to be made for items or services furnished, ordered or
prescribed, including administrative and management services or
salary, may serve as a basis for denying reinstatement to the
programs. 42 C.F.R. § 1001.1901(b)(1) and (3).
63.
The bulletin that accompanied plaintiff’s Notice of Exclusion letter contains
definitions respecting the scope and effect of an exclusion not found in the Code of Federal
Regulations. The Secretary never properly promulgated regulations that expanded upon,
nor altered, the definition of “exclusion,” nor its scope and effect, beyond those definitions
found in the applicable sections of 42 C.F.R., cited above.
64.
Accordingly, because “a person may not in any manner be required to resort
to, or be adversely affected by, a matter required to be published in the Federal Register
and not so published, ” 5 U.S.C. § 552(a)(1)(E), the Secretary’s attempt to expand upon the
definition as well as its scope and effect, as illustrated by the language contained in the
bulletin, cited above, is void ab initio and cannot adversely affect the plaintiff.
65.
Furthermore, the Defendants’ have exceeded their statutory authority by
enforcing plaintiff’s exclusion by utilizing a definition of exclusion and an expansion of the
scope and effect of an exclusion, not contained in the applicable Code of Federal
Regulations in violation of the Social Security Act and the APA.
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66.
As a direct and proximate result of the Secretary’s above-cited violation(s) of
the A.P.A. and the Social Security Act, the plaintiff’s employment was wrongfully terminated
because plaintiff’s employer, based upon the language contained in the bulletin, feared that
his continued employment could possibly subject it to possible civil monetary penalties
and/or other adverse action by the Department of Health and Human Services, its
Secretary and/or its Inspector General.
67.
Said violations of the A.P.A. and the Social Security Act have caused, are
causing, and will continue to cause, substantial, imminent, and irreparable injury to the
plaintiff, as well as others who have been or who will be, recipients of the aforementioned
bulletin which accompanies Notices of Exclusion letters sent by the Inspector General.
COUNT IV
PLAINTIFF’S EXCLUSION, PURSUANT TO SECTION 1128(a)(4) OF THE SOCIAL
SECURITY ACT, VIOLATES THE REHABILITATION ACT OF 1973
Paragraphs one (1) through sixty-seven (67) are incorporated by reference herein.
68.
Under The Rehabilitation Act (“Act”) the term “disability” means:
(A) except as otherwise provided in subparagraph (B), a
physical or mental impairment that constitutes or results in a
substantial impediment to employment; or
(B) for purposes of sections 2, 14, and 15, and titles II, IV, V,
and VII, a physical or mental impairment that substantially
limits one or more major life activities.
Rehabilitation Act, Section 7(9)(A), (B).
69.
The Act further provides:
(10) Drug and illegal use of drugs
(A) Drug
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The term "drug" means a controlled substance, as defined in
schedules I through V of section 202 of the Controlled
Substances Act (21 U.S.C. 812).
(B) Illegal use of drugs
The term "illegal use of drugs" means the use of drugs, the
possession or distribution of which is unlawful under the
Controlled Substances Act. Such term does not include the use
of a drug taken under supervision by a licensed health care
professional, or other uses authorized by the Controlled
Substances Act or other provisions of Federal law.
(ii) Exception for individuals no longer engaging in drug
use
Nothing in clause (i) shall be construed to exclude as an
individual with a disability an individual who-(I) has successfully completed a supervised drug rehabilitation
program and is no longer engaging in the illegal use of drugs,
or has otherwise been rehabilitated successfully and is no
longer engaging in such use;
(II) is participating in a supervised rehabilitation program and
is no longer engaging in such use; or
(III) is erroneously regarded as engaging in such use, but is not
engaging in such use; except that it shall not be a violation of
this Act for a covered entity to adopt or administer reasonable
policies or procedures, including but not limited to drug
testing, designed to ensure that an individual described in subclause (I) or (II) is no longer engaging in the illegal use of
drugs.
Id. at Section 7(A), (B).
70.
Section 504 of the Act, states in pertinent part:
Nondiscrimination Under Federal Grants and Programs
Sec. 504. (a) No otherwise qualified individual with a
disability in the United States, as defined in section 7(20), shall,
solely by reason of her or his disability, be excluded from the
participation in, be denied the benefits of, or be subjected to
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discrimination under any program or activity receiving Federal
financial assistance or under any program or activity
conducted by any Executive agency or by the United States
Postal Service. The head of each such agency shall promulgate
such regulations as may be necessary to carry out the
amendments to this section made by the Rehabilitation,
Comprehensive Services, and Developmental Disabilities Act of
1978. Copies of any proposed regulation shall be submitted to
appropriate authorizing committees of Congress, and such
regulations may take effect no earlier than the thirtieth day
after the date on which such regulation is so submitted to such
committees.
Id. at Section 504(a), codified at 29 U.S.C. § 794.
71.
Distilled to its essence, The Rehabilitation Act, in relevant part, provides that
no otherwise qualified individual with a disability . . . shall, solely by reason of her or his
disability, be excluded from the participation in, be denied the benefits of, or be subjected
to discrimination under, any program or activity receiving Federal financial assistance.
72.
The basic purpose of § 504 "is to ensure that handicapped individuals are not
denied jobs or other benefits because of the prejudiced attitudes or the ignorance of
others.” School Bd. of Nassau County v. Arline, 480 U.S. 273, 284 (1987).
73.
As described in Section 7(10)(B)(ii)(I) of the Act, under the heading
“Exception for individuals no longer engaging in drug use,” at the time of plaintiff’s
exclusion from participation in Medicare, Medicaid and all other federal health care
programs, he had “successfully completed a supervised drug rehabilitation program and
[was] no longer engaging in the illegal use of drugs, or [had] otherwise been rehabilitated
successfully and [was] no longer engaging in such use.”
74.
As such, plaintiff’s exclusion constitutes a violation of the Rehabilitation Act
because it impermissibly excluded him from participation in a federal program, i.e.,
Medicare, Medicaid and all other federal health care programs, based solely upon his
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diagnosed, then-active disease of drug addiction, despite the fact that he was “an otherwise
qualified individual” who had “successfully completed a supervised drug rehabilitation
program and [was] no longer engaging in the illegal use of drugs, or [had] otherwise been
rehabilitated successfully and [was] no longer engaging in such use.”
75.
Said violation of the Rehabilitation Act has caused, is causing, and will
continue to cause, substantial, imminent, and irreparable injury to the plaintiff.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff respectfully prays for the following relief:
A. A declaratory judgment declaring that:

The Plaintiff’s exclusion violates the Double Jeopardy Clause of the 5th
Amendment of the U.S. Constitution;

The Plaintiff’s exclusion violates the Equal Protection Clause of the 5th
Amendment of the U.S. Constitution;

The Plaintiff’s exclusion violates the Rehabilitation Act;

The Defendants’ promulgation of rules respecting the definition and
the scope and effect of an exclusion, under Section 1128 of the Social
Security Act, violates the Administrative Procedures Act; and

The Plaintiff’s exclusion is contrary to law, arbitrary and capricious,
an abuse of discretion and unsupported by supported by substantial
evidence.
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B. Permanent injunctive relief:

Enjoining the Defendants from further implementation of plaintiff’s
exclusion from Medicare, Medicaid and all other federal health care
programs;

Requiring the Defendants to remove Plaintiff from the List of
Excluded Individuals and Entities; and

Enjoining the Defendants from use or implementation of rules or
policies regarding exclusions under Section 1128 of the Social
Security Act, codified at 42 U.S.C. § 1320a-7, that use expanded
and/or modified definitions of the term “exclusion” and the scope and
effect of an exclusion, such as those used in the “bulletin” which
accompanied Plaintiff’s Notice of Exclusion letter.
C.
An order awarding plaintiff’s costs and attorneys’ fees pursuant to 28 U.S.C. §
2412; and
D.
Such other and further relief as the Court deems just and proper.
Dated: December 3, 2012
Respectfully submitted,
________________________________________
Kerry M. Hultquist
The Hultquist Law Firm
13332 Redding Drive
Fort Wayne, IN 46814
Phone: (260) 672-3338
Fax: (260) 424-5311
KMH@TheHultquistLawFirm.com
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