Ill. District Court Recommends Reversal of HHS Federal Healthcare Program Exclusion Decision

May 11, 2007

On April 30, 2007, the District Court for the Southern District of Illinois issued its opinion in Connell v. Secretary of Health and Human Servs., No. 05-cv-4122-JPG, 2007 WL 1266575 (S.D. Ill. Apr. 30, 2007) concerning a final decision by the Secretary of the Department of Health and Human Services (“HHS”) excluding an individual, Mr. Jeffrey Connell, from participating in federal healthcare programs, including Medicare and Medicaid, for a period of five years.  The court adopted the report of a magistrate judge recommending the reversal of the HHS decision.  The court’s decision was based on the fact that there was a delay of 35 months between Mr. Connell’s criminal convictions forming the basis for his exclusion (i.e., causing a false statement to be made to a Medicaid program and misbranding prescription drugs with incorrect lot numbers or expiration dates) and notification that he had been excluded.

According to the court, the Secretary did not evaluate evidence or make administrative findings regarding the reasonableness of the 35-month delay in administrative proceedings.  In finding that the appropriate decision was to remand the case to the Secretary for further proceedings, the Court provided the following analysis.  Although the Secretary, acting through the Inspector General, is required to provide reasonable notice of an exclusion, the timing is otherwise left to the Inspector General’s discretion.  Because there is no statute or regulation setting a deadline for exclusion determinations, the Court cannot impose a judicial deadline.  However, the Court would be able to fashion an appropriate remedy in an individual case involving unreasonable administrative delay.  In this case, however, the administrative record did not contain any discussion of the delay and its reasonableness or unreasonableness.  Accordingly, the Court decided that it was necessary to remand the case to the Secretary for further proceedings and a new decision in which the Secretary “shall evaluate the reasonableness of the 35-month delay between Connell’s criminal conviction in March 2001 and his exclusion in February 2004.  In deciding whether the delay was reasonable, the Secretary should consider the relevant circumstances, including the complexity of the issues considered, the volume of materials reviewed, any justification for delay, and the adverse impact on Connell.”  Id. at *2.  The Court, despite sympathy for Connell’s argument “that the wheels of justice turn too slowly,” declined to make a factual finding that the 35-month delay was unreasonable because it is not “empowered to weigh evidence itself and make factual findings” under these circumstances.  Id.

By Michele L. Butler

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