Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
(O.I. File No. 4-16-40183-9),
U.S. Department of Health & Human Services.
Docket No. C-18-393
Decision No. CR5122
Petitioner, Amber Reilly, is excluded from participating in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)), effective November 20, 2017. Petitioner’s exclusion for five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). An additional exclusion of 15 years, for a total period of exclusion of 20 years,1 is not unreasonable based upon the four aggravating factors established in this case and the absence of any mitigating factors.
The Inspector General of the Department of Health and Human Services (I.G.) notified Petitioner by letter dated October 31, 2017, that she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of 20 years. The I.G. advised Petitioner that she was being excluded pursuant to section 1128(a)(1) of the Act based on her conviction in the United States District Court for the Eastern District of Tennessee, of a criminal offense related to the delivery of an item or service under the Medicare or a state health care program. The I.G. considered four aggravating factors when deciding to extend the 5-year minimum mandatory period of exclusion to 20 years. I.G. Exhibit (Ex.) 1.
Petitioner timely requested a hearing on December 28, 2017. The case was assigned to me on January 12, 2018 for hearing and decision. On January 26, 2018, I convened a prehearing telephone conference, the substance of which is memorialized in my order dated February 1, 2018. On March 12, 2018, the I.G. filed a motion for summary judgment, a brief in support of summary judgment, and I.G. Exs. 1 through 5. Petitioner filed a brief in opposition (P. Br.) on April 26, 2018, and Petitioner’s exhibits (P. Exs.) 1 through 3. The I.G. filed a reply brief on May 9, 2018. Neither party objected to my consideration of the offered exhibits and I.G. Exs. 1 through 5 and P. Exs. 1 through 3 are admitted as evidence.
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a hearing by an Administrative Law Judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).
Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in any federal health care program any individual convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or a state health care program. The Secretary has promulgated regulations implementing these provisions of the Act. 42 C.F.R. § 1001.101(a).2
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for a period of not less than five years. 42 C.F.R.
§ 1001.102(a). The Secretary has published regulations that establish aggravating factors that the I.G. may consider to extend the period of exclusion beyond the minimum five‑year period, as well as mitigating factors that may be considered only if the minimum five-year period is extended. 42 C.F.R. § 1001.102(b), (c).
The standard of proof is a preponderance of the evidence, and there may be no collateral attack of the conviction that provides the basis of the exclusion. 42 C.F.R. § 1001.2007(c), (d). Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the I.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b).
The Secretary has by regulation limited my scope of review to two issues:
Whether there is a basis for the imposition of the exclusion; and
Whether the length of the exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1).
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by the pertinent findings of fact and analysis.
1. Petitioner’s request for hearing was timely, and I have jurisdiction.
Petitioner’s request for hearing was timely filed and preserved Petitioner’s right to review of justiciable issues. I have jurisdiction.
2. Summary judgment is appropriate in this case.
Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing. The Secretary has provided by regulation that a sanctioned party has the right to hearing before an ALJ and both the sanctioned party and the I.G. have a right to participate in the hearing. 42 C.F.R. §§ 1005.2, 1005.3. Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration. 42 C.F.R. § 1005.6(b)(5). An ALJ may also resolve a case, in whole or in part, by summary judgment. 42 C.F.R. § 1005.4(b)(12).
Summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or the moving party prevails as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. Pro. 56(c); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997) (holding in-person hearing is required where the non-movant shows there are material facts in dispute that require testimony); Thelma Walley, DAB No. 1367 (1992); see also New Millennium CMHC, Inc., DAB CR672 (2000); New Life Plus Ctr., DAB CR700 (2000).
Summary judgment is appropriate in this case. There are no genuine issues of material fact in dispute in this case. The case may be resolved by applying the law to the undisputed facts.
3. Petitioner’s exclusion is required by section 1128(a)(1) of the Act.
The statute provides:
(a) MANDATORY EXCLUSION. – The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):
(1) Conviction of program-related crimes. – Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.
Act § 1128(a)(1). Section 1128(a)(1) of the Act requires that the Secretary exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity: (1) convicted of a criminal offense; (2) where the offense is related to the delivery of an item or service; and (3) the delivery of the item or service was under Medicare or a state health care program.
Petitioner does not dispute that she was convicted and that conviction is a basis for exclusion by the I.G. P. Br. at 3. On June 26, 2017, judgment was entered in the United States District Court, Eastern District of Tennessee, accepting Petitioner’s plea of guilty to one count of aiding and abetting health care fraud in violation of 18 U.S.C §§ 2 and 1347. She was sentenced to confinement for 16 months followed by 3 years of supervision, and to pay restitution to the Tennessee Medicaid program in the amount of $4,398,794. I.G. Exs. 2, 4. Petitioner stipulated as part of her plea agreement that from
October 6, 2014 through on or about April 27, 2016, she falsified documents so that 51 unqualified patients received Tennessee Medicaid coverage for Hepatitis C treatments, resulting in a loss to Tennessee Medicaid of $4,398,794 which would not otherwise have been paid for the patients. I.G. Ex. 4 at 2-7.
Petitioner’s guilty plea was accepted by the court. Therefore, Petitioner was convicted within the meaning of the Act. Act § 1128(i) (42 U.S.C. § 1320a-7(i)). Petitioner does not deny that the crime of which she was convicted was a program-related crime, specifically related to the Tennessee Medicaid program. Petitioner also does not dispute that her crime involved the delivery of a health care item or service. Accordingly, all three elements of section 1128(a)(1) of the Act are met and there is a basis for Petitioner’s exclusion.
4. Pursuant to section 1128(c)(3)(b) of the Act, the minimum period of exclusion under section 1128(a) is five years.
5. Four aggravating factors justify extending the minimum period of exclusion to 20 years.
I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(1) of the Act. Therefore, the I.G. must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act. The I.G. has no discretion to impose a lesser period and I may not reduce the period of exclusion below five years. The remaining issue is whether it is unreasonable to extend the period of exclusion by an additional 15 years.
My determination of whether the period of exclusion in this case is unreasonable turns, as discussed in more detail hereafter, on whether: (1) the I.G. has proven that there are aggravating factors; (2) Petitioner has proven that there are mitigating factors the I.G. failed to consider or that the I.G. considered an aggravating factor that does not exist; and (3) the period of exclusion is within a reasonable range.
Petitioner does not dispute or challenge the presence of the four aggravating factors relied upon by the I.G. to support the imposition of 15 more years of exclusion beyond the mandatory five year period. The aggravating factors authorized by 42 C.F.R. § 1001.102(b) that are present in this case are:
- The acts resulting in conviction, or similar acts, caused or were intended to cause a financial loss to a government program or one or more entities of $50,000 or more. 42 C.F.R. § 1001.102(b)(1). Petitioner does not dispute that she was ordered to pay restitution to the Tennessee Medicaid program of $4,398,794, which is strong and unrebutted evidence that the loss to Medicaid was far more than $50,000. I.G. Ex. 2 at 5.
- The acts that resulted in the conviction were committed over a period of one year or more. 42 C.F.R. § 1001.102(b)(2). Petitioner admitted as part of her plea agreement that her criminal conduct occurred from about October 6, 2014 through on or about April 27, 2016. I.G. Ex. 4 at 4. This fact is not in dispute. Therefore, Petitioner’s offenses occurred over a period of more than one year.
- The sentence imposed by the court included incarceration. 42 C.F.R. § 1001.102(b)(5). It is not disputed that Petitioner was sentenced to 16 months confinement. I.G. Ex. 2 at 2.
- An individual was the subject of adverse action by a state government agency or board, and the adverse action is based on the same set of circumstances that served as the basis for imposition of the I.G.’s exclusion. 42 C.F.R. § 1001.102(b)(9). Petitioner does not deny that she entered a consent agreement voluntarily surrendering her license to practice pharmacy in Tennessee on July 12, 2017, based on the same facts as her conviction and this exclusion. I.G. Ex. 5. The adverse actions by the Tennessee Board of Pharmacy is predicated on the same set of circumstances that supported the I.G.’s exclusion and constitute an aggravating factor that may justify extending the period of exclusion.
I conclude that the I.G. established four aggravating factors, not disputed by Petitioner, that permit extending Petitioner’s exclusion by 15 years beyond the 5-year minimum mandatory period.
6. Petitioner has not shown a genuine dispute as to the existence of any authorized mitigating factors.
If the I.G. imposes a period of exclusion beyond the five-year minimum mandatory period based on the presence of aggravating factors, there are only three mitigating factors established by 42 C.F.R. § 1001.102(c) that may be considered to reduce the extended period of exclusion: (1) whether the individual was convicted of three or fewer misdemeanor offenses coupled with a financial loss of less than $5,000; (2) whether the individual was suffering from a mental, emotional, or physical condition at the time of the offense that reduced his or her culpability; or (3) whether the individual cooperated with federal or state officials resulting in others being convicted or excluded, additional cases investigated or the imposition against anyone of civil money penalties of assessments. 42 C.F.R. § 1001.102(c)(1)-(3).
Petitioner argues that there is a mitigating factor in this case that has not been considered. The mitigating factor Petitioner encourages me to consider is established by 42 C.F.R. § 1001.102(c)(2), which provides:
The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability;
The I.G. did not find that this mitigating factor exists in this case. I.G. Ex. 1. Therefore, if Petitioner is correct, I must consider this mitigating factor and reassess the reasonableness of the period of exclusion. Petitioner has, however, failed to establish a genuine dispute of material fact as to the existence of this mitigating factor.
Petitioner presented a report of an initial psychiatric evaluation conducted by Brian Bonfardin, MD on March 8, 2017. The report indicates it was prepared based on a referral from the judge who presided over Petitioner’s district court proceedings that resulted in her conviction. Dr. Bonfardin states that Petitioner was referred for psychiatric evaluation because the judge was attempting to discern possible causes and reasons for Petitioner’s bizarre criminal behavior. Dr. Bonfardin deferred rendering a diagnosis but made some treatment recommendations. Dr. Bonfardin noted that Petitioner’s psychological issues that motivated her criminal behavior related to grief, anger surrounding her traumatic childhood, and feelings related to her sister’s situation. P. Ex. 3.
I accept as true for purposes of summary judgment that the district court judge ordered the psychiatric evaluation, and subsequently considered it in imposing the sentence. However, that is insufficient as a matter of law to trigger the mitigating factor established by 42 C.F.R. § 1001.102(c)(2). The regulation requires that there be a mental, emotional, or physical condition considered by the court in a criminal proceeding. Additionally, the record of the criminal proceedings must show that the judge in the criminal court determined that the mental, physical, or emotional condition reduced the perpetrator’s culpability. 42 C.F.R. § 1001.102(c)(2); Farzana Begum, M.D., DAB No. 2726 at 8-12 (2016).
In this case, I accept as true for purposes of summary judgment that the district court judge knew that Petitioner has some undiagnosed mental condition that motivated her criminal behavior. However, there is no evidence that the judge considered that Petitioner’s culpability was reduced by her mental condition. The only record of the judge’s action is the judgment he signed on July 10, 2017. The judgment directs the Bureau of Prisons to ensure that Petitioner receive a complete physical and mental evaluation and appropriate treatment while in custody. But the judgment does not suggest that the judge considered Petitioner less culpable due to a mental impairment. I.G. Ex. 2. I have received no transcript of the sentencing proceeding, a presentence report, or other document that might establish a genuine dispute of material fact as to
whether the judge considered Petitioner’s culpability reduced by virtue of mental impairment.
I conclude that Petitioner has not shown there is a genuine dispute of material fact that the district court judge considered Petitioner to be less culpable due to mental illness. Accordingly, I conclude that the mitigating factor established by 42 C.F.R. § 1001.102(c)(2) is unsupported in this case and must be resolved against Petitioner as a matter of law.
7. Exclusion for 20 years is not unreasonable.
Petitioner has not presented evidence sufficient to show a genuine dispute of material fact regarding the existence of the mitigating factor under 42 C.F.R. § 1001.102(c)(2) that the I.G. failed to consider and that would support my reassessing and imposing a shorter period of exclusion.
Petitioner offered as evidence a letter from an individual requesting that Petitioner be given work release in order for Petitioner to provide that individual care. The author of the letter discussed the benefit of having Petitioner provide her care, her trust and confidence in Petitioner, among other things. P. Ex. 2. Petitioner also submitted her own letter in which she discusses her remorse, her understanding of why she committed the crime of which she was convicted, the impact of the conviction and sentence upon her and her family, and the fact she takes responsibility for her crime and her need for rehabilitation. P. Ex. 1. However, these letters do not show the existence of any of the mitigating factors established by 42 C.F.R. § 1001.102(c) that I am authorized to consider.
The Board has made clear that the role of the ALJ in cases such as this is to conduct a de novo review of the facts related to the basis for the exclusion and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period of exclusion imposed by the I.G. falls within a reasonable range. Juan de Leon, Jr., DAB No. 2533 at 3 (2013); Craig Richard Wilder, M.D., DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17, n.9 (2000). The applicable regulation specifies that the ALJ must determine whether the length of exclusion imposed is “unreasonable.” 42 C.F.R. § 1001.2007(a)(1). The Board has explained that, in determining whether a period of exclusion is “unreasonable,” the ALJ is to consider whether such period falls “within a reasonable range.” Cash, DAB No. 1725 at 17, n.9. The Board cautions that whether the ALJ thinks the period of exclusion too long or too short is not the issue. The ALJ may not substitute his or her judgment for that of the I.G. and may only change the period of exclusion in limited circumstances.
In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not
later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggests that, when it is found that an aggravating factor considered by the I.G. is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate.
Based on my de novo review, I conclude that there is a basis for Petitioner’s exclusion and the evidence establishes the four aggravating factors that the I.G. relied on to impose the 20-year exclusion. Petitioner failed to establish the existence of any authorized mitigating factors not considered by the I.G. that would support a reduction of the period of exclusion. No basis exists for me to reassess the period of exclusion. I conclude that a period of exclusion of 20 years is in a reasonable range and not unreasonable considering the four aggravating factors present.
For the foregoing reason, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum of 20 years, effective November 20, 2017.
Keith W. Sickendick Administrative Law Judge
- 1. Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires. Reinstatement is not automatic upon completion of the period of exclusion.
- 2. References are to the 2017 revision of the Code of Federal Regulations (C.F.R.), unless otherwise indicated.