Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Wax David Flowers, Ph.D.
(OI File No. H-19-42482-9),
The Inspector General,
U.S. Department of Health and Human Services.
Docket No. C-20-767
Decision No. CR5822
Petitioner 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 August 20, 2020. There is a basis for exclusion. Petitioner’s exclusion for a minimum of 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 three years, for a total minimum exclusion of eight years,1 is not unreasonable based on consideration of three aggravating factors and no mitigating factors.
The Inspector General (IG) of the U.S. Department of Health and Human Services notified Petitioner by letter dated July 31, 2020, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for eight years. The IG cited
section 1128(a)(1) of the Act as the basis for Petitioner’s exclusion. The IG stated that the exclusion was based on Petitioner’s conviction in the Superior Court of Dekalb County, Georgia (state court), of a criminal offense related to the delivery of an item or service under Medicare or a state health care program. The IG extended the mandatory five-year exclusion to eight years because Petitioner’s acts that resulted in a conviction caused, or were intended to cause, 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 Petitioner’s sentence included incarceration. IG Exhibit (Ex.) 1 at 1-2.
Petitioner timely requested a hearing on September 13, 2020 (RFH). On September 16, 2020, the case was assigned to me to hear and decide. I convened a telephone prehearing conference on October 6, 2020, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence issued on October 8, 2020 (Prehearing Order). On November 19, 2020, the IG filed a motion for summary judgment and supporting brief (IG Br.) with IG Exs. 1 through 3. On January 15, 2021, Petitioner filed a response brief (P. Br.) requesting waiver of the exclusion and oral argument, with Petitioner’s exhibits (P. Exs.) 1 through 8.2 The IG filed a reply brief on January 27, 2021. Petitioner filed a further reply on February 14, 2021. The parties have not objected to my consideration of the offered exhibits and all are admitted as evidence.
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right 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) 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. Act § 1128(a)(1). A state health care program includes a state Medicaid program. Act § 1128(h)(1) (42 U.S.C. § 1320a-7(h)(i)). 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. The Secretary has promulgated regulations implementing these provisions of the Act. 42 C.F.R. § 1001.101(a), (c).3
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).
In this proceeding, the standard of proof is a preponderance of the evidence. 42 C.F.R. § 1001.2007(c). Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues. 42 C.F.R. § 1005.15(b), (c); Prehearing Order ¶ 4. There may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(d).
The Secretary has by regulation limited my scope of review to two issues:
Whether the IG has a basis for excluding an individual or entity from participating in Medicare, Medicaid, and all other federal health care programs; 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 text followed by my findings of fact and analysis.
1. Petitioner timely filed his request for hearing, and I have jurisdiction.
Petitioner timely filed his request for hearing. I conclude that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.
2. Summary judgment is appropriate.
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 IG 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 undisputed 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); Foderick, DAB No. 1125. In opposing a properly supported motion for summary judgment, the nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent’s prima facie case or that might establish a defense. The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment. To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder. On summary judgment, the judge does not weigh the evidence or attempt to determine the truth. Rather, the judge accepts the nonmovant’s evidence as true and draws all permissible inferences in the nonmovant’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-57 (1986).
There are no genuine issues of material fact in dispute in this case. Petitioner does not dispute that he pleaded guilty to and was convicted of Medicaid fraud. Petitioner does not dispute the aggravating factors cited by the IG – that the acts that are the basis of his conviction were committed for over a year; that his actions caused or were intended to cause a financial loss to the government of $50,000 or more; and that he was sentenced to incarceration. IG Exs. 2, 3; P. Ex. 8. Petitioner argues that there are genuine disputes of material fact as to mitigating factors that should be considered in determining the duration of the exclusion. P. Br. However, even if I accept Petitioner’s assertions of fact as true for purposes of summary judgment, Petitioner does not aver facts that establish a mitigating factor I am authorized to consider under the regulations discussed hereafter. Accordingly, I conclude that summary judgment is appropriate. Petitioner requested oral
argument. However, the documentary evidence and briefing by the parties are sufficient, oral argument would not be beneficial, and the request for oral argument is denied.
3. Section 1128(a)(1) of the Act requires Petitioner’s exclusion from participation in Medicare, Medicaid, and all other federal health care programs.
The material facts are undisputed.
Petitioner was charged by a bill of indictment filed in the state court on April 25, 2019, with two counts of Medicaid fraud and five counts of forgery. IG Ex. 2. Petitioner pleaded guilty to Count 1 on November 12, 2019. IG Exs. 2 at 1, 3 at 1. Count 1 of the indictment alleged that Petitioner, who participated in Georgia Medicaid as a licensed clinical social worker:
Committed Medicaid fraud from on or about May 11, 2016 through on or about May 16, 2018;
By engaging in a fraudulent scheme and device using his business to file claims with Amerigroup Community Care (Amerigroup), a managed care program reimbursed by Georgia Medicaid, for therapy services Petitioner did not provide;
Thereby, obtaining and retaining payments from Amerigroup to which Petitioner was not entitled and in amounts greater than that to which he was entitled; and
Amerigroup paid Petitioner approximately $57,700.53 based on his fraudulent claims.
IG Ex. 2 at 3-4.
The state court accepted Petitioner’s guilty plea to Count 1 of the indictment and judgment was entered. The state elected not to proceed on the remaining counts of the indictment. Petitioner was sentenced on November 12, 2019, to 10 years with six months in confinement and the remainder on probation. Petitioner was ordered not to participate or contract with any entity doing business with Georgia Medicaid. Petitioner was also ordered to pay restitution of $118,281.53. IG Ex. 3.
The IG cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory exclusion. The statute provides in relevant part:
(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). Congress has, by the plain language of section 1128(a)(1) of the Act, required the Secretary to exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity: (1) convicted of a criminal offense, whether a misdemeanor or felony; (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 he was convicted. The state court accepted Petitioner’s guilty plea to Medicaid fraud and entered a judgment of conviction. IG Exs. 2, 3; P. Exs. 3, 4. Accordingly, Petitioner was convicted within the meaning of the Act. Act § 1128(i)(3). Petitioner cannot collaterally attack his conviction in this proceeding. 42 C.F.R. § 1001.2007(d). Petitioner is bound by his plea and the judgment of the state court, and I have no authority to look behind either.
Petitioner does not dispute that the offense of which he was convicted was related to the delivery of an item or service under Georgia Medicaid. There is no dispute that Georgia Medicaid is a state health care program under section 1128(h)(1) of the Act. Petitioner admitted by his guilty plea the facts alleged in Count 1 that he filed claims for therapy services that he did not provide. I conclude, based on the facts, that there is a common-sense connection or nexus between Petitioner’s Medicaid fraud and the delivery of an item or service under Medicaid, a state health care program. Saadite Green, DAB No. 2940 at 6-7 (2019) (and cases cited therein).
Accordingly, I conclude that all elements that trigger a mandatory exclusion pursuant to section 1128(a)(1) of the Act are satisfied and the IG has a basis to exclude Petitioner. Because I have found that there is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act, Congress has mandated his exclusion. Neither the IG nor I have any discretion not to exclude Petitioner in this case. I am bound to follow the federal statutes and regulations. 42 C.F.R. § 1005.4(c)(1).
Petitioner requests that his exclusion be waived. P. Br. at 3-7. Pursuant to 42 C.F.R. § 1001.2007(a)(1), my authority is limited to reviewing whether the IG has a basis to exclude an individual and whether the period of exclusion is reasonable. I have no authority to grant a waiver of an exclusion under section 1128 of the Act. Only the Secretary and the IG have the authority to grant a waiver, and then only in limited circumstances that do not appear to be applicable in this case. Act § 1128(c)(3)(B) and (d)(3)(B); 42 C.F.R. § 1001.1801; Delores L. Knight, DAB No. 2945at 12-13 (2019) (waiver request must be from individual administering federal program, Secretary or IG have authority to grant, and there is no right to review the waiver decision).
4. Pursuant to section 1128(c)(3)(B) of the Act a five-year period of exclusion is mandatory.
I have concluded that there is a basis to exclude Petitioner pursuant to section 1128(a)(1) of the Act. Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act. The IG 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 three years. My determination of whether the period of exclusion in this case is unreasonable turns on whether: (1) the IG has proven that there are aggravating factors; (2) Petitioner has proven that the IG considered an aggravating factor that does not exist or that there are mitigating factors that the IG failed to consider; and (3) the period of exclusion is within a reasonable range.
5. Three aggravating factors authorized by 42 C.F.R. § 1001.102(b) are present that justify extending the minimum period of exclusion to eight years.
6. Petitioner has not presented evidence of any mitigating factors authorized by 42 C.F.R. § 1001.102(c).
The IG 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 his conviction, or similar acts, caused or were intended to cause financial loss to a state or federal government agency or program or one or more entities of $50,000 or more;
(2) Petitioner’s acts that resulted in his conviction, or similar acts, were committed over a period of one year or more; and
(3) Petitioner was sentenced to incarceration.
IG Ex. 1 at 2. I conclude that each aggravating factor is established by undisputed facts.
Count 1 of the indictment charged that Petitioner’s conduct caused Petitioner to receive $57,700.53 from Amerigroup which was funded in part by Georgia Medicaid. Petitioner pleaded guilty to the charge thereby admitting the allegation, his guilty plea was accepted, and a judgment of guilt was entered. Petitioner may not challenge, and I may not review his conviction or sentence in this proceeding. 42 C.F.R. § 1001.2007(d). The state court’s record of the sentence imposed on Petitioner clearly shows that the state court ordered that Petitioner pay restitution of $118,281.53. IG Ex. 3 at 3. The Board has held that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program. Jeremy Robinson, DAB No. 1905 at 11 (2004); Craig Richard Wilder, DAB No. 2416 at 9 (2011); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Laura Leyva, DAB No. 2704 at 9 (2016). Petitioner argues that the restitution amount should only be $57,700.53 as alleged by Count 1, the count to which he pleaded guilty. P. Br. at 7-8, 10-11. However, Petitioner cannot attack the judgment in this forum. Furthermore, even if I accept as true for purposes of summary judgment that the loss to Georgia Medicaid was $57,700.53, that amount nevertheless exceeds the $50,000 loss that triggers the aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(1).
Count 1 of the indictment charged that Petitioner’s conduct occurred from on or about May 9, 2016 through on or about May 16, 2018. IG Ex. 2 at 3-4. Petitioner pleaded guilty to the charge, admitting the allegation by pleading guilty, his guilty plea was accepted, and judgment of guilt entered. Petitioner may not challenge, and I may not review his conviction or sentence in this proceeding. 42 C.F.R. § 1001.2007(d). Petitioner does not dispute in this case that his acts that led to his conviction were committed for over a year. P. Br.; RFH. The Board has previously discussed the purpose of the aggravating factor under 42 C.F.R. § 1001.102(b)(2), saying that it reflects “the Secretary’s recognition that an individual whose lapse in integrity occurs over a period of one or more years poses a far greater threat to federal health care programs and beneficiaries than an individual ‘whose lapse in integrity is short-lived.’” Hussein Awada, DAB No. 2788 at 8 (2017) (quoting Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003)). Petitioner’s acts were not short-lived and were committed for more than a year. The undisputed facts establish the existence of the second aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(2).
It is also undisputed that the state court sentenced Petitioner to be confined for six months, which establishes the existence of the third aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(5). IG Ex. 3 at 1.
If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an exclusion of longer than five years, as they do in this case, then mitigating factors may
be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c). The IG did not list, and therefore did not consider, any mitigating factors in deciding to extend Petitioner’s exclusion to eight years. IG Ex. 1 at 2. The only authorized mitigating factors that I may consider are listed in 42 C.F.R. § 1001.102(c):
(1) In the case of an exclusion under § 1001.101(a), whether the individual or entity was convicted of three or fewer misdemeanor offenses and the entire amount of financial loss (both actual loss and intended loss) to Medicare or any other Federal, State, or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $5,000;
(2) 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; or
(3) The individual’s or entity’s cooperation with Federal or State officials resulted in –
(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,
(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or
(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.
Petitioner has the burden to prove by a preponderance of the evidence that there is a mitigating factor for me to consider. 42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4.
Petitioner urges me to consider the following to be mitigating factors that justify reducing the period of his exclusion:
- His age;
- 34 years of practice with no complaints;
- Licensed in three states;
- Services have been effective and successful;
- No prior convictions;
- Prominent member of his community;
- Pro bono and volunteer work;
- Loves helping people;
- Has been recognized for his work;
- Author of two books;
- Offense was based on an error in charting and he has taken corrective action;
- Willing to enter a corporate integrity agreement, be subject to monitoring, and post a bond;
- Only African American licensed clinical social worker in his community; and
- His background check that shows no prior felony convictions.
RFH; P. Br.; P. Exs. 5, 6, 8. I accept Petitioner’s assertions and representations as true for purposes of summary judgment. However, not one of Petitioner’s asserted mitigating factors is a mitigating factor that I am authorized to consider by 42 C.F.R. § 1001.102(c) to reduce the period of exclusion imposed by the IG. Therefore, Petitioner has failed to meet his burden to show the existence of a mitigating factor.
I conclude that Petitioner has not shown a genuine dispute as to the existence of any aggravating or mitigating factors under 42 C.F.R. § 1001.102(b) and (c), even if I accepted his allegations as true for purposes of summary judgment.
7. Exclusion for eight 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 IG falls within a reasonable range. Juan de Leon, Jr., DAB No. 2533 at 4-5; Craig Richard Wilder, DAB No. 2416 at 8; Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000). 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.6. The Board cautions that whether the ALJ thinks the period of exclusion is too long or too short is not the issue. The ALJ may not substitute his or her judgment for that of the IG 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 IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG 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 suggested that when it is found that an aggravating factor considered by the IG 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 the IG considered in determining to impose the eight-year exclusion. Petitioner has not presented any evidence that shows a genuine dispute that the IG failed to consider any mitigating factor authorized by 42 C.F.R. § 1001.102(c) or considered an aggravating factor that did not exist. I conclude that a period of exclusion of eight years is in a reasonable range and not unreasonable considering the existence of three aggravating factors and no 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 of eight years, effective August 20, 2020.
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.
- back to note 1 2. P. Exs. 3 and 4 are duplicates of IG Exs. 2 and 3.
- back to note 2 3. Citations are to the 2019 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.
- back to note 3