Opinion
DOCKET NO. A-3273-12T4
09-05-2014
MARYAM JAFARI, M.D., Petitioner-Appellant, v. DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES and MEDICAID FRAUD DIVISION, Respondent-Respondent.
Thomas P. Kelly, attorney for appellant. John J. Hoffman, Acting Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Kay R. Ehrenkrantz, Deputy Attorney General, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Hayden and Leone. On appeal from Department of Human Services, Division of Medical Assistance and Health Services. Thomas P. Kelly, attorney for appellant. John J. Hoffman, Acting Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Kay R. Ehrenkrantz, Deputy Attorney General, on the brief). PER CURIAM
Petitioner Maryam Jafari, M.D., appeals from the October 10, 2012 final decision of the New Jersey Department of Human Services, Division of Medical Assistance and Health Services (DMAHS) temporarily suspending her from participating in the New Jersey Medicaid provider program pending the outcome of her criminal charges. For the reasons that follow, we affirm.
We derive the following facts from the record. Petitioner was a physician licensed in New Jersey, practicing internal medicine from her office in Newark. On December 12, 2011, a criminal complaint was filed against her in the District Court of New Jersey, alleging she knowingly and willingly solicited and received monetary kickbacks from Orange Community MRI for referring patients to that facility for services to be paid for by Medicaid in violation of 42 U.S.C.A. § 1320a-7b(b)(1)(A) (the anti-kickback statute). Petitioner was arrested pursuant to a warrant on December 13, 2011.
On July 13, 2012, a federal grand jury indicted petitioner this charge.
As a result, on December 21, 2011, the New Jersey Office of the State Comptroller, Medicaid Fraud Division (MFD), informed petitioner that it was temporarily suspending all Medicaid payments owed to her. On February 10, 2012, the Attorney General gave approval to the MFD to suspend petitioner from the Medicaid provider program in accordance with N.J.A.C. 10:49-11.1(j)(1). Accordingly, on February 22, 2012, the MFD issued an amended notice of suspension advising petitioner that effective immediately she was suspended from the Medicaid program pursuant to N.J.S.A. 30:4D-17.1(a). The MFD also released the withheld Medicaid payments to petitioner. The amended notice provided that petitioner could request a hearing with the Office of Administrative Law (OAL), and that if the underlying charges were resolved, she could apply for reinstatement. Petitioner requested a hearing, and the DMAHS transmitted the matter to the OAL.
On June 1, 2012, the MFD filed a motion for summary decision with the OAL pursuant to N.J.A.C. 1:1-12.5. Petitioner filed an opposition, arguing that summary decision would deprive her of her constitutional right to the presumption of innocence, and her right to not be punished unless and until the criminal allegations had been proven beyond a reasonable doubt.
The parties also filed with the OAL a joint stipulation of undisputed facts. Therein the parties agreed that: (1) an arrest warrant was signed, which stemmed from a criminal complaint against petitioner for violating the anti-kickback statute; (2) petitioner's alleged conduct included knowingly and willingly soliciting and receiving kickbacks from Orange Community MRI; (3) the MFD sent petitioner a notice of suspension of payments; (4) petitioner did not appeal the suspension of payments; (5) the MFD thereafter received approval from the Attorney General to suspend petitioner from the Medicaid program; (6) the MFD then released the suspended payments to petitioner and amended the notice of suspension of payments to a notice of suspension temporarily prohibiting her from participating in the Medicaid program pending the outcome of her criminal case; and (7) petitioner requested a fair hearing before the OAL.
On September 17, 2012, the Administrative Law Judge (ALJ) issued an initial decision. The ALJ determined that summary decision was appropriate as there were no genuine issues of material fact in dispute that would have required an evidentiary hearing.
The ALJ concluded that the DMAHS and the MFD properly exercised their discretion in temporarily suspending DMAHS's contract relationship with petitioner who had been charged with a crime. The ALJ explained
the legality of [petitioner's] suspension [was] not in doubt. . . . Violation of [the anti-kickback statute] is specifically listed under N.J.A.C. 10:49-11.1(d)(3) as "good cause for exclusion" from the Medicaid program. . . . "Suspension shall not be based upon unsupported accusation, but upon . . . evidence adequate to create a reasonable suspicion that cause exists." [N. J.A.C. 10:49-11.1(j)(3)]. Reasonable suspicion can be "established by a grand jury indictment, accusation, arrest, or by evidence that such violations of . . . criminal law did in fact occur." N.J.A.C. 10:49-11.1(j)(5) (emphasis added). Therefore, even though [petitioner] [had]
not yet been convicted of any crime, the fact that she has been arrested for allegedly violating [the anti-kickback statute] provides "good cause" for her suspension from the Medicaid program. See N.J.A.C. 10:49-11.1(j)(3).
The ALJ further concluded that petitioner was afforded due process of law at the OAL, noting that under Ensslin v. Twp. of N. Bergen, 275 N.J. Super. 352, 371 (App. Div. 1994), certify denied, 142 N.J. 446 (1995), "'[t]he procedural due process afforded by the [OAL] and the caliber of its hearing officers place those proceedings on a par with plenary judicial proceedings.'" The ALJ emphasized that petitioner was not permanently deprived of the opportunity to serve as a Medicaid provider, as she would be eligible for reinstatement if cleared of any wrong doing. Neither party filed exceptions.
On October 10, 2012, the DMAHS Director issued a final decision adopting the ALJ's initial decision. The Director determined that the suspension was in accordance with the law, and summary decision was appropriate as petitioner "failed to raise any genuine issue of material fact that would require a hearing in this matter." This appeal followed.
We begin by considering our standard of review. Our role in reviewing an agency decision is limited. In re Stallworth, 208 N.J. 182, 194 (2011) (citing Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)). We will "intervene only in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or other state policy." In re Musick, 143 N.J. 206, 216 (1996). The reviewing court "should not disturb an administrative agency's determinations or findings unless there is a clear showing that (1) the agency did not follow the law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the decision was not supported by substantial evidence." In re Virtua-West Jersey Hosp. Voorhees, 194 N.J. 413, 422 (2008) (citing In re Herrmann, 192 N.J. 19, 28 (2007)). Furthermore, an agency's interpretation of its own regulations "is entitled to great weight . . . since [it] is in the best position to understand what was meant by the regulation when it was promulgated." In re Hosps.' Petitions, 383 N.J. Super. 219, 239 (App. Div.) (internal citation omitted), certif. denied, 187 N.J. 81 (2006).
Petitioner first argues that the ALJ's decision to grant summary decision unfairly prevented her from presenting evidence supporting her innocence in the federal charge, and evidence of mitigating circumstances, such as the harm the suspension brought to her practice, her family, and her patients. Petitioner argues that if merely being arrested automatically provides "good cause" for a suspension as a matter of law, no individual in petitioner's circumstances would ever be entitled to a hearing under N.J.A.C. 10:49-10.3. We disagree.
The federal Medicaid Act, under Title XIX of the Social Security Act, 42 U.S.C.A. §§ 1396-1396u, mandates a joint federal-state program to provide financial assistance to individuals whose income and resources are insufficient to meet the costs of necessary medical services. 42 U.S.C.A. § 1396a. Once a state joins the program it must comply with the Medicaid statute and federal regulations in order to receive Medicaid funds. See Harris v. McRae, 448 U.S. 297, 308, 100 S. Ct. 2671, 2683-84, 65 L. Ed. 2d 784, 799 (1980). New Jersey's participation in the federal Medicaid program was authorized by the enactment of the New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5.
The DMAHS is the agency within the state Department of Human Services that administers the Medicaid program. N.J.S.A. 30:4D-7. The legislature has granted the DMAHS the authority to promulgate the rules, regulations, and administrative orders necessary to administer the Medicaid program. N.J.S.A. 30:4D-17.1(c). This statute also gives the DMAHS the power to "suspend, debar or disqualify for good cause any provider presently participating . . . in the program[.]" N.J.S.A. 30:4D-17.1(a).
The decision to suspend is made at the discretion of the Director of the DMAHS and the Attorney General. N.J.A.C. 10:49-11.1(j)(2). Suspension is not permanent, but rather it is "an exclusion from State contracting for a temporary period of time, pending the completion of an investigation or legal proceedings." N.J.A.C. 10:49-11.1(c). The purpose of a temporary suspension from participation in the Medicaid program is not punitive, but to protect the integrity of the program. N.J.A.C. 10:49-11.1(b). Furthermore, the suspension only affects the doctor's participation in the Medicaid program, but does not prevent the doctor from practicing medicine. See Greenspan v. Klein, 442 F. Supp. 860, 862 (D.N.J. 1977).
The regulations provide twenty-seven criteria that establish "good cause for exclusion of a person by a Medicaid agent or DMAHS." N.J.A.C. 10:49-11.1(d). These criteria include: a reasonable suspicion of an "offense indicating a lack of business integrity or honesty;" a violation of the federal anti-kickback statute; and actions which "may be determined by the Medicaid Agent or DMAHS to warrant exclusion . . . even if such conduct has not been or may not be prosecuted as violation of . . . laws[.]" N.J.A.C. 10:49-11.1(d)(2),(3), and (23).
Once an administrative dispute is deemed a contested case before the OAL, any party may "move for summary decision upon all or any of the substantive issues therein." N.J.A.C. 1:1-12.5(a). Such a motion will be granted
if the papers and discovery which have been filed, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to prevail as a matter of law. When a motion for summary decision is made and supported, an adverse party in order to prevail must by responding affidavit set forth specific facts showing that there is a genuine issue which can only be determined in an evidentiary proceeding. . . . If the adverse party does not so respond, a summary decision, if appropriate, shall be entered.
[N. J.A.C. 1:1-12.5(b).]
We agree with the DMAHS and the Director that the ALJ's decision to grant summary decision was appropriate in this matter. We are satisfied that petitioner did not present any genuine issue of material fact that would necessitate an evidentiary hearing. Petitioner argues that a mere indictment or arrest should not establish "good cause" for the suspension. However, N.J.A.C. 10:49-11.1(j)(3) provides that the DMAHS may suspend a provider "upon evidence adequate to create a reasonable suspicion that cause exists." (emphasis added). Furthermore, such reasonable suspicion may be established by an indictment, accusation, or arrest. N.J.A.C. 10:49-11.1(j)(5). The fact that petitioner may have a valid defense to her underlying criminal case does not negate the fact that she was arrested for allegedly violating the anti-kickback statute, which provides reasonable suspicion of good cause for her temporary suspension. See N.J.A.C. 10:49-11.1(j)(3), (5). Thus, there were no genuine issues of material fact, and summary decision was appropriate. The final decision of the DMAHS was consistent with the law, the decision was neither arbitrary, unreasonable nor capricious, and was supported by substantial evidence. See Herrmann, supra, 192 N.J. at 28. Consequently, we decline to disturb the decision.
Petitioner next argues that the ALJ's use of summary decision deprived her of an evidentiary hearing, which violated her substantive and procedural due process rights. We disagree.
"The principle of substantive due process, founded in the federal Constitution, U.S. Const. amend XIV, § 1, and our State Constitution, N.J. Const. art. I, § 1, protects individuals from the 'arbitrary exercise of the powers of government' and 'governmental power [. . .] being used for [the] purposes of oppression.'" Filgueiras v. Newark Pub. Schs., 426 N.J. Super. 449, 469 (App. Div.) (quoting Felicioni v. Admin. Office of the Courts, 404 N.J. Super. 382, 392 (App. Div. 2008), certif. denied, 203 N.J. 440 (2010)), certif. denied, 212 N.J. 460 (2012). "'To establish a substantive due process claim, a plaintiff must prove the particular interest at issue is protected by the substantive due process clause and the government's deprivation of that protected interest shocks the conscience.'" Filgueiras, supra, 426 N.J. Super. at 469 (quoting Chainey v. Street, 523 F.3d 200, 219 (3d Cir. 2008)).
Procedural due process, on the other hand, addresses whether there are sufficient procedural safeguards in place when the government deprives an individual of a particular interest. Rivkin v. Dover Twp. Rent Leveling Bd., 143 N.J. 352, 363-64 (1996) (citation omitted), cert. denied, 519 U.S. 911, 117 S. Ct. 275, 136 L. Ed. 2d 198 (1996). "The minimum requirements of due process . . . are notice and the opportunity to be heard." Jamgochian v. N.J. State Parole Bd., 196 N.J. 222, 240 (2008) (citation omitted). When determining if procedural due process has been met in an administrative action, the court must balance three factors:
[F]irst, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
[Ibid. (quoting Matthews v. Eldridge, 424 U.S. 319, 355, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18, 33 (1976)).]
The Supreme Court has recognized that "agencies must retain the ability to provide various informal, flexible procedures for determining certain issues or taking certain actions." In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 384 (2013) (citing High Horizons Dev. Co. v. N.J. Dep't of Transp., 120 N.J. 40, 52-53 (1990)). "In all instances, fundamental due process requirements of notice and opportunity to be heard must be satisfied, even though the contours of their satisfaction may vary." Id. At 384-85 (citing High Horizons Dev. Co., supra, 120 N.J. at 51-54). Indeed, only the presence of disputed facts "'requires the protection of formal trial procedure.'" Contini v. Bd. of Educ. of Newark, 286 N.J. Super. 106, 121 (App. Div. 1995) (quoting High Horizons Dev. Co., supra, 120 N.J. at 53), certif. denied, 145 N.J. 372 (1996).
We are satisfied that petitioner's substantive and procedural due process rights were not violated. Petitioner may have a protected property interest in future Medicaid payments, see Greenspan, supra, 442 F. Supp. at 861, but we need not decide that issue here. If such a property interest were found, it could not be permanently denied without a meaningful hearing, where petitioner would be able to challenge the evidence against her and to introduce evidence of her own. Ibid. Here, however, as the ALJ properly pointed out, petitioner's suspension from the program was temporary pending the resolution of criminal charges against her.
Of greater importance, the temporary suspension did not prevent petitioner from practicing medicine. Because the State has a substantial interest in the strict enforcement and proper administration of the Medicaid program in order to provide adequate medical treatment to the poor, the temporary suspension does not "shock the conscience," and the ALJ's summary decision did not deprive petitioner of her substantive due process rights. See Filgueiras, supra, 426 N.J. Super. at 469.
We also find that the procedural protections afforded petitioner were constitutionally sound. See N.J.A.C. 49-11.1. Petitioner received adequate notice of every action taken against her. Petitioner was also afforded the opportunity for a hearing, which was granted at her request. Petitioner had the opportunity to oppose the MFD's summary decision motion, and to raise a genuine issue of material fact as to whether the statute and regulations applied. As the DMAHS appropriately points out, she was unable to do so, as there was no disagreement that she had been arrested for an offense covered by the regulation, N.J.A.C. 10:49-11.1(d)(3). Indeed, petitioner entered into a joint stipulation of undisputed facts, which were dispositive in this matter. Accordingly, as there were no issues of disputed fact as to whether petitioner could be suspended from the program under the regulations, we decline to hold that a trial-type hearing was required in this matter. See High Horizons Dev. Co., supra, 120 N.J. at 51-54.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION