Iftikhar Ali, M.D., DAB CR6498 (2024)

DECISION

Respondent, the Inspector General of the United States Department of Health and Human Services (the IG), excluded Petitioner, Iftikhar Ali, M.D., from participation in Medicare, Medicaid, and all other federal health care programs for seven years pursuant to sections 1128(a)(1) and (a)(4) of the Social Security Act (Act) (42 U.S.C. §§ 1320a-7(a)(1), (a)(4)).  Petitioner challenges this action before me.  For the reasons stated below, I affirm the IG’s exclusion determination.

I. Procedural History

On November 30, 2023, the IG notified Petitioner of his exclusion from participation in all federal health care programs for a minimum period of seven years pursuant to sections 1128(a)(1) and (a)(4) of the Act (42 U.S.C. §§ 1320a-7(a)(1), (a)(4)).  IG Ex. 1.  The IG explained she took this action based on Petitioner’s conviction in the U.S. District Court for the Western District of Missouri (District Court) for a criminal offense related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of such items or services, and because Petitioner’s offense of conviction “related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Id. at 1.

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Petitioner timely sought review by an Administrative Law Judge in the Civil Remedies Division, resulting in my designation to hear and decide this case.  I held a pre-hearing telephone conference on February 28, 2024, the substance of which is summarized in my February 29, 2024 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).  Among other things, I directed the parties to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and documentary evidence in support thereof.  Summary Order at 4-5.

The IG filed a brief (IG Br.) and seven proposed exhibits (IG Exs. 1-7).  Petitioner filed a brief (P. Br.) with one proposed exhibit (P. Ex. 1).  The IG subsequently filed a reply (IG Reply).

II. Admission of Exhibits and Decision on the Record

In the absence of objections, I admit IG Exhibits 1 through 7 and P. Exhibit 1 into the record.

I advised the parties I would hold an in-person hearing only if a party submitted written direct testimony from a witness and the opposing party asked to cross-examine that witness.  Summary Order at 6.

The IG does not believe an in-person hearing to be necessary.  IG Br. at 10.  Petitioner “would prefer to have a hearing,” citing the sworn testimony he provided as Petitioner Exhibit 1.  P. Br. at 3.  But there is no reason to hold a hearing as the IG has not sought to cross‑examine Petitioner.  Summary Order at 6; Civ. Remedies Div. P. §§ 16(b), 19(d).  Petitioner’s testimony is already part of the record; he need not restate it at a hearing.  Petitioner has not otherwise explained why I should hold a hearing in this matter.  I therefore decide this case on the written record before me.  Id.

III.  Issues

Whether the IG had a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and, if so, whether the seven-year period of exclusion selected by the IG is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1).

IV.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an administrative hearing and judicial review of the final action of the Secretary of Health and Human Services (Secretary).  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2.  The rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3.

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Section 1128(a)(1) of the Act requires the Secretary to exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII or under any State health care program.”  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); see also 42 C.F.R. § 1001.101(a).

Section 1128(a)(4) of the Act requires the Secretary to exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Act § 1128(a)(4) (42 U.S.C. § 1320a-7(a)(4)); see also 42 C.F.R. § 1001.101(d).

For purposes of exclusion, the Act deems an individual convicted of a criminal offense when:  (1) a judgment of conviction has been entered against the individual in a federal, state, or local court, regardless of 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 nolo contendere is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2.  The statute does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) provides an exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years.  Exclusion is effective 20 days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The period of exclusion may be extended based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b).  Mitigating factors identified by regulation may be considered to reduce the period of exclusion where aggravating factors have first been applied to extend that period more than five years.  42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burdens of proof and persuasion on any affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  Summary Order at 4; 42 C.F.R. § 1005.15(c).

V.  Discussion

My findings of fact and conclusions of law are set forth in bold and followed by pertinent analysis.

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A. I have jurisdiction to hear this case.

Petitioner timely requested a hearing concerning an exclusion action taken against him by the IG.  I therefore have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1), 1005.2(a); see also Act § 1128(f)(1) (42 U.S.C. § 1320a-7(f)(1)).

B. Findings of Fact.

On May 5, 2022, the U.S. Attorney for the Western District of Missouri charged Petitioner via information with one count of Health Care Fraud in violation of 18 U.S.C. § 1347 and one count of Use of a Registration Number Issued to Another Person in Connection with Distribution of a Controlled Substance, in violation of 21 U.S.C. § 843(a)(2).  IG Ex. 2.  The government accused Petitioner of knowingly and willfully executing a scheme to defraud the Medicare program in connection with the delivery of and payment for health care benefits, items, and services by pre-signing prescriptions and scheduling in-office visits in his absence with patients for whom an employee in his office would issue and sometimes fill out prescriptions.  Id. at 9-11.  Petitioner also submitted claims for patient services even though he was absent on the actual dates of service.  Id. at 10.

That same day, Petitioner executed an agreement to plead guilty to the criminal offenses described in the information filed against him by the government.  IG Ex. 4.  Petitioner stipulated that from in or around January 2017 to in or around August 2019, he scheduled office visits with patients while traveling, pre-signed prescriptions to be filled out and issued by his employees in his absence, and fraudulently submitted claims to the Medicare program representing he had provided services when he had not.  Id. at3.

Petitioner stipulated to fraudulently claiming to see one particular patient on August 1, 2019, for whom his office submitted claims to the Medicare program.  Id. at 3-4.  Petitioner also admitted this patient obtained a prescription for hydrocodone, a Schedule II controlled substance, by means of a pre-filled prescription Petitioner provided to be issued in his absence.  Id. at 3.  As such, Petitioner conceded he knowingly and intentionally caused another individual to use his own DEA registration number to dispense or distribute a Schedule II controlled substance.  Id.  Petitioner stipulated that his criminal conduct during this time period induced the Medicare program to pay $18,516.92 in improper claims based on his fraudulent representations.  Id. at 4.

The District Court accepted Petitioner’s plea and on February 9, 2023, imposed judgment of conviction against him.  IG Ex. 5.  The District Court sentenced Petitioner to five years’ probation and imposed an order of forfeiture against Petitioner in the amount of $19,261.74.  Id. at 2, 5.  The District Court separately ordered Petitioner to pay that amount as restitution to the Medicare program.  IG Ex. 6.

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C. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act.

Section 1128(a)(1) of the Act mandates exclusion from participation in Medicare, Medicaid, and all federal health care programs of an individual convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  Act § 1128(a)(1) (42 U.S.C. § 1320a‑7(a)(1)); 42 C.F.R. § 1001.101(a).  Petitioner does not contest either the fact of his conviction or its relatedness to the delivery of an item or service under Medicare or a state health care program.  P. Br. at 1.  Nevertheless, I have independently reviewed the record before me and find the IG has established by a preponderance of the evidence that Petitioner’s offense of conviction warrants exclusion pursuant to section 1128(a)(1) of the Act.

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.

Petitioner pleaded guilty to a two-count information filed against him by the U.S. Attorney for the Western District of Missouri.  IG Exs. 2, 4.  The District Court accepted Petitioner’s guilty plea and entered judgment against him.  IG Ex. 5.  I find the IG has established Petitioner was convicted of a criminal offense within the meaning of the Act.  Act § 1128(i)(1), (3) (42 U.S.C. § 1320a-7(i)(1), (3)); 42 C.F.R. § 1001.2.

2. Petitioner’s criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.

Petitioner’s conviction related to the delivery of an item or service under the Medicare program.  Petitioner, a physician, pleaded guilty to one count of Health Care Fraud in violation of 18 U.S.C. § 1347.  IG Exs. 2, 4.  On its face, his conviction for “Health Care Fraud” demonstrates the nexus between Petitioner’s criminal conduct and a covered healthcare program necessary to warrant exclusion.  His actual offense conduct confirms that connection; Petitioner stipulated in his plea agreement that he “knowingly and willfully executed” a scheme to defraud the Medicare program by billing it for fraudulent office visits resulting in the prescription of drugs to patients he had not actually seen.  IG Ex. 2 at 9-11; IG Ex. 4 at 3-4.  Petitioner’s offense of conviction and the stipulations he made to resolve the criminal case against him make clear his offense of conviction occurred in connection with the delivery of an item or service to the Medicare program.

The relatedness of Petitioner’s criminal offense to the delivery of an item or service to a covered healthcare program is further reinforced by the fact that the District Court ordered him to pay restitution to the Medicare program.  IG Ex. 6.  Payment of restitution to a covered healthcare program for losses incurred as a result of criminal conduct

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demonstrates the nexus between the offense of conviction and the delivery of an item or service to that program.  Summit S. Shah, M.D., DAB No. 2836 at 8-9 (2017) (quoting Berton Siegel, D.O., DAB No. 1467 at 6-7 (1994) (“[A] criminal offense resulting in financial loss to a State Medicaid program is ‘related to’ the delivery of items or services under that Medicaid program because it results ‘in less funds being available to pay for covered services’ delivered to Medicaid patients.”)).  These facts establish the requisite “common sense” connection between Petitioner’s offense of conviction and the delivery of services to the Medicare program.

D. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(4) of the Act.

Section 1128(a)(4) of the Act requires the IG to exclude any individual convicted of a felony offense occurring after August 21, 1996 related to the “unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Petitioner again concedes his exclusion is warranted under section 1128(a)(4) of the Act.  P. Br. at 1-2.  Having independently reviewed the evidence of record, I find the IG in fact had a basis to exclude Petitioner.

The District Court entered judgment against Petitioner in February 2023 after Petitioner pleaded guilty to two felony counts filed against him by the United States.  IG Exs. 2, 4, 5, 6.  Petitioner was therefore convicted of a felony offense occurring after August 21, 1996.  Both counts to which Petitioner pleaded guilty related to unlawful distribution, prescription, or dispensing of a controlled substance.  Petitioner admitted to pre-signing prescriptions that his staff unlawfully issued in his absence.  IG Ex. 4 at 3-4.  Petitioner thus engaged in the unlawful distribution and dispensing of a Schedule II controlled substance.  Id.  The IG has demonstrated a basis to exclude Petitioner pursuant to section 1128(a)(4) of the Act.

E. Petitioner must be excluded for a minimum of five years.

Because I have concluded a basis exists to exclude Petitioner pursuant to sections 1128(a)(1) and (a)(4) of the Act, Petitioner must be excluded for a minimum of five years.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).

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F. The IG has established an aggravating factor to justify extending Petitioner’s exclusion period beyond the five-year statutory minimum.

1. The IG established Petitioner’s conviction arose from acts that lasted for a period of one year or more, as required by 42 C.F.R. § 1001.102(b)(2).

Petitioner does not dispute the application of the aggravating factor identified by the IG to extend his period of exclusion.  P. Br. at 2.  Because the IG bears the burden of establishing aggravating factors, I have nevertheless scrutinized the record.  Here, the IG asserts she was entitled to apply an aggravating factor because Petitioner’s conviction arose from acts that lasted for a period of one year or more.  IG Br. at 7; 42 C.F.R. § 1001.102(b)(2).

The record confirms the IG appropriately applied this aggravating factor.  Petitioner conceded in his plea agreement that the acts he committed which resulted in his conviction occurred from approximately January 2017 to August 2019.  IG Ex. 2 at 10-13; IG Ex. 4 at 3-4.  The IG has established Petitioner’s offense of conviction arose from acts that occurred for one year or more.

G. Petitioner has not demonstrated the existence of a mitigating factor recognized by the Secretary’s regulations.

Petitioner urges me to consider the fact that he has repaid the Medicare program as a mitigating factor.  P. Br. at 3.  He contends he did not act out of greed or self-interest but rather to benefit his patients and never intended to permit the prescription of controlled substances in his absence.  P. Br. at 2-3; P. Ex. 1 at 1.  He points out that he never fraudulently obtained controlled substances for his own use.  P. Ex. 1 at 1.  Petitioner also acknowledges his wrongdoing, expresses regret for his past actions, and emphasizes he will never pre-sign prescriptions again.  Id. at 2.  Finally, Petitioner highlights his efforts to be a good and productive member of his local community, citing his volunteering and charitable work and his hope to someday return to helping others through the practice of medicine.  Id.

I acknowledge and credit Petitioner’s efforts to remain a productive and helpful member of his community.  However, I am not empowered to disregard the regulations that govern these proceedings, which specify only three circumstances I may consider as factors in mitigation:  (1) where the exclusion is premised on three or fewer misdemeanor offenses and the financial loss is less than $5,000; (2) where records from the underlying criminal proceeding establish a mental, emotional, or physical condition that a court determined reduced an individual’s culpability; or (3) where the record reflects cooperation with federal or state officials that results in others being convicted or excluded, other cases being investigated or reports being issued to identify program

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vulnerabilities, or others being subject to a civil money penalty or assessment.  42 C.F.R. § 1001.102(c).  The bases for mitigation identified by Petitioner, however laudable, do not meet any of these criteria.  He has not met his burden to establish mitigating factors I could consider to reduce his period of exclusion.

H. A seven-year exclusion period is not unreasonable.

I must uphold the IG’s determination as to the length of exclusion if it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  This means that:

[s]o long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule.  We believe that the deference [42 C.F.R.] § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities.

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

In making my determination, the quality of the aggravating (or mitigating) factors is of greater significance than the mere number of the factors present in a given case.  As the Secretary stated in the preamble to the final rule establishing the exclusion regulations:

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case.  For example, in one case many aggravating factors may exist, but the subject’s cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.  Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating.  The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue.

Id. at 3314-15.

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In assessing the reasonableness of the exclusion period selected by the IG, I must consider both mitigating and aggravating factors.  42 C.F.R. § 1001.102(b), (c).  Here, the IG established the existence of one aggravating factor to extend Petitioner’s period of exclusion.  Petitioner has identified no mitigating factor recognized by the regulations I could apply to reduce it.  Therefore, the only question is whether the seven-year period of exclusion selected by the IG is nevertheless unreasonable.  I cannot say it is.

Petitioner admitted to fraudulently billing the Medicare program for visits with patients he never examined and pre-signing prescriptions his unlicensed staff could provide patients based on these illusory visits.  While he now claims he did not intend for his staff to issue prescriptions for controlled substances like hydrocodone, Petitioner’s willingness to provide pre-signed blank forms made such outcomes possible, if not likely.  He allowed unqualified members of his staff to exercise the medical judgment reserved solely to him to provide potentially life-threatening medications to patients simply to enhance his ability to travel.  Petitioner then submitted false claims to the Medicare program to be reimbursed for these illusory visits.

Petitioner moreover engaged in this criminal and medically irresponsible conduct for well over two years.  IG Ex. 2 at 10-13; IG Ex. 4 at 3-4.  The persistence of his conduct reflects a sustained lack of integrity, not a momentary lapse of judgment.  Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003) (“The purpose of the aggravating factor is to distinguish . . . petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period . . . .”).

In sum, Petitioner allowed his unqualified staff to provide pre-signed prescriptions to his patients in his absence for over two years.  He then billed the Medicare program for seeing those patients.  His conduct was illegal, medically unsound, and in some instances posed a risk of harm to his patients.  It also served to defraud the safety net health care program for this nation’s elderly and disabled populations.  I cannot say the IG’s decision to exclude him for seven years instead of five is unreasonable.

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VI. Conclusion

For the foregoing reasons, I affirm Petitioner’s exclusion from participation in Medicare, Medicaid, and all federal health care programs for seven years, pursuant to sections 1128(a)(1) and (a)(4) of the Act (42 U.S.C. §§ 1320a-7(a)(1), (a)(4)).