Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Chanda L. Hall
(O.I. File No. H-17-40144-9),
The Inspector General,
U.S. Department of Health and Human Services.
Docket No. C-18-646
Decision No. CR5154
Petitioner, Chanda L. Hall, 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 January 18, 2018. There is a proper basis for exclusion. 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 13 years, for a total minimum exclusion of 18 years,1 is not unreasonable based upon the presence of three aggravating factors and the absence of any mitigating factors.
The Inspector General (I.G.) of the United States Department of Health and Human Services (HHS) notified Petitioner by letter dated December 29, 2017, that she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for 18 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 19th Judicial District, Parish of East Baton Rouge, Louisiana (state court), 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. further advised Petitioner that the mandatory five-year exclusion was extended to 18 years because Petitioner's acts that resulted in conviction caused a financial loss to a government agency or program of $50,000 or more, the acts were committed over a period of more than one year, and her sentence included incarceration. I.G. Exhibit (I.G. Ex.) 1.
Petitioner timely requested a hearing on February 27, 2018, by letter dated February 23, 2018 (RFH). The case was assigned to me on March 22, 2018, to hear and decide. I convened a prehearing conference by telephone on April 9, 2018, the substance of which is memorialized in my order issued on April 10, 2018. On May 17, 2018, the I.G. filed a motion for summary judgment, supporting brief, and I.G. Exs. 1 through 6. The I.G. filed an amended brief on May 21, 2018 (I.G. Br.). On June 27, 2018, Petitioner filed her brief (P. Br.) and an unmarked document that I treat as Petitioner's exhibit (P. Ex.) 1. The I.G. filed a reply brief (I.G. Reply) on June 28, 2018. Petitioner did not object to my consideration of I.G. Exs. 1 through 6. The I.G. did not object to my consideration of P. Ex. 1. The offered exhibits are admitted as evidence.
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an administrative law judge (ALJ) hearing and judicial review of the final action of the Secretary of HHS (Secretary). The right to hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, and the rights of both the sanctioned party and the I.G. to participate in a hearing are specified by 42 C.F.R. § 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).
Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual convicted of a criminal offense related to the delivery of an item or service under the Medicare or a State health care program. 42 C.F.R. § 1001.101(a). Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is convicted of a criminal offense when: (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.
Exclusion for a minimum period of five years is mandatory for any individual or entity convicted of a criminal offense for which exclusion is required by section 1128(a) of the Act. Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)). Pursuant to 42 C.F.R. § 1001.102(b), an individual's period of exclusion may be extended based on the presence of specified aggravating factors. Only if the aggravating factors justify an exclusion of longer than five years, however, are mitigating factors considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(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 undisputed fact and analysis.
1. Petitioner's request for hearing was timely and I have jurisdiction.
Petitioner requested a hearing on February 27, 2018, 60 days after the I.G. sent Petitioner the December 29, 2017 notice of exclusion. RFH at 1; I.G. Ex. 1. Therefore, Petitioner's request is timely pursuant to 42 C.F.R. § 1005.2(c).
There is no dispute that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.
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 a 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-.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 in an exclusion case when there are no disputed issues of material fact and when the disputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law. Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett, DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W. Foderick, M.D., DAB No. 1125 (1990). When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one. Surabhan Ratanasen, M.D., DAB No. 1138 (1990); Froderick, DAB No. 1125. In opposing a properly supported motion for summary judgment, the nonmoving party must show that there are material facts that remain in dispute, and that those facts either affect the proponent's prima facie case or might establish a defense. Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 (1997). It is insufficient for the nonmovant to rely upon mere allegations or denials to defeat the motion and proceed to hearing. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).
There are no genuine disputes of material fact in this case. The facts that trigger exclusion under section 1128(a)(1) of the Act are conceded, undisputed, or not subject to dispute. Petitioner argues that the period of exclusion imposed by the I.G. is unreasonable. Petitioner argues that the I.G. incorrectly considered an aggravating factor and, on that basis, I should reassess and reduce the period of exclusion. Petitioner's arguments must be resolved against her as a matter of law. Accordingly, summary judgment is appropriate.
3. Petitioner's exclusion is required by section 1128(a)(1) of the Act.
On June 5, 2014, Petitioner was indicted on six felony criminal counts, including racketeering, filing false public records, fraudulent remuneration, conspiracy to commit racketeering and Medicaid fraud, and Medicaid fraud, all alleged violations of state law. I.G. Ex. 2. On April 4, 2016, Petitioner pleaded guilty to one count of racketeering, in violation of Louisiana Revised Statutes § 15:1353. I.G. Ex. 3; I.G. Ex. 4 at 3-4. The five other counts were dismissed. I.G. Ex. 3; I.G. Ex. 4 at 3. During the plea hearing, Petitioner agreed that from July 2010 to March 2013, she was involved in a Medicaid provider company and stole approximately $1,100,000 from the State of Louisiana
through a pattern of racketeering. I.G. Exs. 2 at 1; 4 at 6. The court accepted Petitioner's guilty plea. I.G. Ex. 4 at 8. On August 9, 2016, the state court sentenced Petitioner to five years incarceration and stated that she owed $1,200,000 in restitution. I.G. Ex. 4 at 8; I.G. Ex. 5.
The I.G. cites section 1128(a)(1) of the Act as the basis for Petitioner's mandatory exclusion. 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 A PROGRAM-RELATED CRIME.–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). The statute 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 under Title XVIII or a State health care program.
There is no dispute that Petitioner was convicted of a criminal offense and that conviction is related to the delivery of health care services. Petitioner pleaded guilty, her guilty plea was accepted, and a judgment of conviction was entered. The facts Petitioner admitted to during her plea inquiry by the state court establishes a nexus between her criminal conduct and the state Medicaid program. Petitioner does not deny that she was convicted or that her criminal conduct was related to the delivery of a health care item or service under the state Medicaid program. P. Br., RFH. Accordingly, I conclude that the elements of section 1128(a)(1) of the Act are satisfied and there is a basis for exclusion.
4. Pursuant to section 1128(c)(3)(B) of the Act, a five-year period of exclusion is mandatory.
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 Petitioner's exclusion by an additional 13 years. My determination of whether the exclusionary period in this case is unreasonable turns on whether: (1) the I.G. has proven that there are aggravating factors; (2) Petitioner has proven that the I.G. considered an aggravating factor that does not exist or that there are mitigating factors that the I.G. failed to consider; and (3) the period of exclusion is within a reasonable range.
5. Three aggravating factors are present that justify extending the minimum period of exclusion to 18 years.
6. Petitioner has not presented evidence of any mitigating factors and does not allege the existence of any mitigating factors.
The I.G. notified Petitioner that three aggravating factors are present in this case that justify an exclusion of more than five years:
(1) Petitioner's acts that resulted in her conviction caused or were intended to cause financial loss to a government agency or program of $50,000 or more;
(2) Petitioner's acts that resulted in her conviction were committed over a period of one year or more; and
(3) The sentence imposed by the court included incarceration.
I.G. Ex. 1 at 2.
Petitioner disputes that the state court ordered her to pay restitution of $1.2 million to the state and argues that the I.G. improperly considered that the first aggravating factor, loss to the state of $50,000 or more, exists in this case. P.Br.; RFH. The Departmental Appeals Board (Board) has previously accepted that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program. Laura Leyva, DAB No. 2704 at 9 (2016); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, MD, DAB No. 2416 at 9 (2011). However, in this case the extract of the state court minutes does not specifically state that the court ordered Petitioner to pay restitution. I.G. Ex. 5. I accept as true for purposes of summary judgment Petitioner's assertion that restitution was not ordered and draw the inference in favor of Petitioner that it was not based on the unclear language of I.G. Ex. 5. Nevertheless, Petitioner specifically admitted during the plea inquiry in the state court that she stole $1.1 million from the State of Louisiana. Petitioner's admission is undisputed and more than
sufficient to establish that her acts that resulted in conviction resulted in a loss to the state of $50,000 or more.
The undisputed facts also establish the existence of the second aggravating factor considered by the I.G. Petitioner does not dispute that the acts for which she was convicted lasted for a period of almost three years, from July 2010 to March 2013. I.G. Ex. 2 at 1; I.G. Ex. 6 at 2. Finally, it is undisputed that Petitioner was sentenced to five years incarceration, which establishes the existence of the third aggravating factor considered by the I.G. I.G. Ex. 5.
I conclude that the aggravating factors that the I.G. considered are established by the undisputed facts. The aggravating factors are a basis for the I.G. to extend the period of exclusion beyond the minimum exclusion of five years. 42 C.F.R. § 1001.102(b)(5), (b)(9).
7. Exclusion for 18 years is not unreasonable in this case.
The regulation states that the ALJ must determine whether the length of exclusion imposed is "unreasonable." 42 C.F.R. § 1001.2007(a)(1). The Board, however, has made clear that the role of the ALJ in exclusion cases 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. de Leon, DAB No. 2533 at 3; Wilder, DAB No. 2416 at 8; Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000). The Board 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.6. 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. Thus, the Board has by these various prior decisions significantly limited my authority under the applicable regulation to judge the reasonableness of the period of exclusion.
Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes the three aggravating factors that the I.G. relied on to impose the 18-year exclusion. Petitioner has not presented any evidence that would establish that the I.G. failed to consider any mitigating factor or considered an aggravating factor that did not exist. I conclude that a period of exclusion of 18 years is in a reasonable range and not unreasonable considering the existence of three aggravating factors and the absence of any mitigating factors. No basis exists for me to reassess the period of exclusion.
For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of 18 years, effective January 18, 2018.
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 minimum period of exclusion.