B-152676, NOV. 18, 1963
Highlights
D.O.: REFERENCE IS MADE TO YOUR INFORMAL INQUIRIES TO THE CLAIMS DIVISION OF THIS OFFICE CONCERNING ALLEGEDLY UNPAID AMOUNTS DUE YOU AND OTHERS. CONTRACTS COVERING THE ADMINISTRATION OF THE MEDICAL CARE PROGRAM WITHIN THE STATE OF CALIFORNIA WERE ENTERED INTO BY THE DEPARTMENT OF THE ARMY WITH THE BLUE CROSS ASSOCIATION AND THE CALIFORNIA MEDICAL ASSOCIATION. UNDERSTAND THAT THE PRINCIPALS INVOLVED WERE CONVICTED ON VARIOUS CHARGES AND THAT THE DEFENDANTS HAVE APPEALED FROM THE ACTION TAKEN BY THE TRIAL COURT. WE ARE NOT ADVISED AS TO THE OUTCOME OF THE APPEALS BUT IT IS CLEAR THAT THE FINAL DISPOSITION OF A CRIMINAL PROCEEDING IS NOT DETERMINATIVE OF AND DOES NOT SATISFY CIVIL LIABILITY FOR FRAUD PRACTICED AGAINST THE UNITED STATES.
B-152676, NOV. 18, 1963
TO JEROME REHMAN, D.O.:
REFERENCE IS MADE TO YOUR INFORMAL INQUIRIES TO THE CLAIMS DIVISION OF THIS OFFICE CONCERNING ALLEGEDLY UNPAID AMOUNTS DUE YOU AND OTHERS, INCLUDING THE BIXBY KNOLLS COMMUNITY HOSPITAL, LONG BEACH, CALIFORNIA, FOR MEDICAL SERVICES FURNISHED TO DEPENDENTS OF CERTAIN MEMBERS AND FORMER MEMBERS OF THE ARMED FORCES ENTITLED THERETO UNDER THE PROVISIONS OF THE DEPENDENTS' MEDICAL CARE ACT, PUBLIC LAW 84-569, AS AMENDED AND RE- ENACTED, 10 U.S.C. 1071-1085. PURSUANT TO 10 U.S.C. 1079, CONTRACTS COVERING THE ADMINISTRATION OF THE MEDICAL CARE PROGRAM WITHIN THE STATE OF CALIFORNIA WERE ENTERED INTO BY THE DEPARTMENT OF THE ARMY WITH THE BLUE CROSS ASSOCIATION AND THE CALIFORNIA MEDICAL ASSOCIATION.
THE RECORD SHOWS THAT, AS THE RESULT OF AN INVESTIGATION WHICH DISCLOSED CERTAIN IRREGULARITIES AND POSSIBLE FRAUD IN CONNECTION WITH THE OPERATIONS OF THE HOSPITAL AND THE SERVICES FURNISHED BY YOU AND YOUR ASSOCIATES, THE DEPARTMENT OF THE ARMY CAUSED THE DESIGNATED CONTRACTORS TO SUSPEND PAYMENT ON THE CLAIMS OF THE HOSPITAL AND OF CERTAIN PHYSICIANS ASSOCIATED WITH THE HOSPITAL. ALSO, AN INVESTIGATION BY STATE AUTHORITIES RESULTED IN AN INDICTMENT AGAINST YOU AND SIX OF YOUR ASSOCIATES. UNDERSTAND THAT THE PRINCIPALS INVOLVED WERE CONVICTED ON VARIOUS CHARGES AND THAT THE DEFENDANTS HAVE APPEALED FROM THE ACTION TAKEN BY THE TRIAL COURT. WE ARE NOT ADVISED AS TO THE OUTCOME OF THE APPEALS BUT IT IS CLEAR THAT THE FINAL DISPOSITION OF A CRIMINAL PROCEEDING IS NOT DETERMINATIVE OF AND DOES NOT SATISFY CIVIL LIABILITY FOR FRAUD PRACTICED AGAINST THE UNITED STATES. UNITED STATES EX REL MARCUS V. HESS, 317 U.S. 537, 548 549; HELVERING V. MITCHELL, 303 U.S. 391.
ON THE PRESENT RECORD, THE MATTER APPEARS TO BE ENTIRELY TOO DOUBTFUL TO WARRANT ALLOWANCE BY THIS OFFICE OF ANY PORTIONS OF THE AMOUNTS SUSPENDED FROM PAYMENT TO THE BIXBY KNOLLS COMMUNITY HOSPITAL AND TO THE PHYSICIANS ASSOCIATED WITH THAT HOSPITAL FOR SERVICES RENDERED IN CONNECTION WITH THE ADMINISTRATION OF THE PROGRAM AUTHORIZED BY THE DEPENDENTS' MEDICAL CARE ACT. SEE LONGWILL V. UNITED STATES, 17 CT.CL. 288, 291; AND CHARLES V. UNITED STATES, 19 ID. 316, 319.