Nabil Mohsen Mohsen Al-Subari, DAB CR6513 (2024)

DECISION

The Inspector General of the United States Department of Health and Human Services (IG) excluded Petitioner, Nabil Mohsen Mohsen Al-Subari, from participation in Medicare, Medicaid, and all other federal health care programs for 22 years pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)). Petitioner’s exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). Petitioner challenges only the length of the exclusion. For the reasons stated below, I conclude that the 22-year exclusion period is not unreasonable under the current legal framework. I affirm the IG’s exclusion determination.

I. Procedural History

The IG issued a notice to Petitioner dated November 30, 2023, informing him that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for 22 years. IG Exhibit (Ex.) 1 at 1. The IG cited section 1128(a)(1) of the Act as the basis for Petitioner’s exclusion. The IG stated the exclusion was based on Petitioner’s conviction in the United States District Court, Eastern District of Michigan, Southern

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Division (District Court), of 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 items or services under any such program. The IG extended the mandatory five-year exclusion to 22 years because: 1) the acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more (42 C.F.R. § 1001.102(b)(1)); and 2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more (42 C.F.R. § 1001.102(b)(2)). IG Ex. 1 at 1.

Petitioner timely requested an administrative law judge (ALJ) hearing, and I was designated to hear and decide this case. The Civil Remedies Division issued an Acknowledgment Notice and my Standing Prehearing Order (Prehearing Order).

I conducted a prehearing telephone conference on February 27, 2024, the substance of which I memorialized in my February 28, 2024 Order, including a schedule for submission of arguments and evidence by the parties. The IG submitted a brief (IG Br.) and five exhibits (IG Exs. 1-5), while Petitioner submitted a brief (P. Br.), a supplement to its brief (P. Br. Supp.), and five exhibits (P. Exs. 1-5). The IG also submitted a reply brief (IG Reply), and Petitioner also submitted a surreply (P. Surreply).

II. Exhibits and Decision on the Record

Petitioner did not object to the IG’s proposed exhibits. The IG objected to Petitioner’s Exhibit 4 as irrelevant and immaterial, because the exhibit, an affidavit of a former employee, allegedly constitutes a collateral attack of the facts admitted in Petitioner’s plea. IG Reply at 3-4. I overrule the IG’s objection; the exhibit is relevant because Petitioner contends that the mitigating factor at 42 CFR § 1001.102(c)(2) applies and the affidavit is offered to support Petitioner’s contention that he had a mental or emotional condition before or during the commission of the offense. Therefore, I admit IG Exhibits 1 through 5 and Petitioner’s Exhibits 1 through 5 into evidence.

Because neither Petitioner, nor the IG has proposed any witnesses, an in-person hearing would serve no purpose. See Standing Prehearing Order at § 6. Therefore, I will decide this matter based on the written record before me. See Civ. Remedies Div. P. § 19(d).

III. Issues

The Secretary of Health and Human Services (the Secretary) has by regulation limited my scope of review to two issues: (1) whether the IG has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs; and, if so, (2) whether the length of the exclusion the IG imposed is unreasonable. See 42 C.F.R. § 1001.2007(a)(1).

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Here, Petitioner concedes the IG has a basis to exclude him from participation in federal health care programs for five years under section 1128(a)(1) of the Act. P. Br. at 1. Therefore, the only issue in this case is whether the 22-year period of exclusion imposed by the IG is reasonable.

IV. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right to an ALJ hearing and judicial review of the final action of the Secretary. The right to an ALJ hearing is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, while the rights of both the sanctioned party and the IG to participate in a hearing are specified at 42 C.F.R. § 1005.3.

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)(1)). Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is convicted of a criminal offense when, among other things, a plea of guilty or no contest is accepted by a court. Act § 1128(i)(3). The Secretary has promulgated regulations implementing these provisions of the Act. 42 C.F.R. § 1001.101(a), (c). There may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(d).

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 exceeding five years 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 ¶ 5.

V. Findings of Fact, Conclusions of Law, and Analysis

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

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A. I have jurisdiction to hear this case.

Petitioner timely requested a hearing. I therefore have jurisdiction to hear and decide this case. See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

B. Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicare and Medicaid programs requiring exclusion under 42 U.S.C. § 1320a-7(a)(1).

The IG must exclude an individual from participation in federal health care programs if the individual was convicted of a criminal offense related to the delivery of a health care item or service under Medicare or a state health care program. 42 U.S.C. § 1320a-7(a)(1). Here, the facts pertaining to Petitioner’s conviction clearly establish Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicare and Medicaid programs requiring exclusion under 42 U.S.C. § 1320a-7(a)(1), and Petitioner does not contest the statutory basis for his exclusion. P. Br. at 1. Nevertheless, because the nature and circumstances of his conviction are relevant to the outcome here, I note them for the record.

On May 18, 2022, Petitioner pleaded guilty to one count of Health Care Fraud in violation of 18 U.S.C. § 1347. IG Ex. 3. Petitioner agreed to the following factual basis in the plea agreement and specifically acknowledged that “[f]rom approximately 2012 through in or around April 2019, in Wayne County in the Eastern District of Michigan, and elsewhere, the Defendant knowingly and willfully committed health care fraud in violation of 18 U.S.C. § 1347.” Id. at 3. Petitioner is a pharmacist and was the owner of Dix Family Care Pharmacy (“Dix”) from approximately January 2012 through April 2019. Id. During this time, Petitioner participated in a scheme to submit fraudulent claims to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan for prescription medications that often were not dispensed. Id. Petitioner acknowledged that he was aware of the scheme to submit fraudulent claims, knew the billing for medications that were never dispensed should have been reversed, and did nothing to ensure the reversal of billings. Id. at 3-4. As a result, Petitioner caused a loss to Medicare, Medicaid, and Blue Cross Blue Shield of Michigan of at least $1,033,950. Id. at 4.

The District Court accepted Petitioner’s plea on September 29, 2022, and Petitioner was ordered to pay restitution in the amount of $1,033,950. IG Ex. 4. Accordingly, Petitioner was convicted of a criminal offense as defined in subsections 1128(i)(2) and (3) of the Act (an individual is “convicted” where there has been a finding of guilt against the individual, or where a court has accepted an individual’s guilty plea).

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

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(1), Petitioner must be excluded for a minimum of five years. 42 U.S.C. § 1320a-7(c)(3)(B).

D. The IG has established two aggravating factors which together permit the IG to lengthen the exclusion beyond the five-year statutory minimum.

In relevant part, the following factors may be considered to be aggravating and a basis for lengthening the period of a mandatory exclusion under section 1128(a)(1):

(1) The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more[;]

* * * *

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more[.]

42 C.F.R. § 1001.102(b)(1) and (2).

The IG bears the burden of establishing aggravating factors. 42 C.F.R. § 1005.15(c). The IG has met its burden with respect to the two aggravating factors which together permit the IG to lengthen the exclusion beyond the five-year statutory minimum, as discussed below.

1. The IG established that the acts resulting in Petitioner’s conviction caused a financial loss to a government program of $50,000 or more under 42 C.F.R. § 1001.102(b)(1).

The IG may extend the length of an exclusion if the acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more. 42 C.F.R. § 1001.102(b)(1). Pursuant to Petitioner’s plea agreement, the District Court ordered Petitioner to pay $1,033,950 in restitution to the Medicare Trust Fund. IG Ex. 4 at 6; IG Ex. 5 at 21.

Petitioner does not contest the restitution amount or the IG’s consideration of this aggravating factor, only the weight the IG assigned to it in arriving at a 22-year

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exclusionary period, which I address below. P. Br. at 12. The IG has established the existence of the aggravating factor set forth at 42 C.F.R. § 1001.102(b)(1).

2. The IG established that the acts that resulted in Petitioner’s conviction were committed over a period of one year or more under 42 C.F.R. § 1001.102(b)(2).

Under 42 C.F.R. § 1001.102(b)(2), the IG may extend the length of an exclusion if “the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.” “[T]he purpose of this aggravating factor ‘is to distinguish between petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period.’” Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454 at 7 (2012) (quoting Donald A. Burstein, DAB No. 1865 at 8 (2003)).

Petitioner pleaded that the underlying billing conduct for undispensed medication occurred from 2012-2019 – an approximate seven-year period. IG Ex. 3 at 3. Petitioner does not contest the basis for application of this aggravating factor – only the weight the IG assigned to it in arriving at a 22-year exclusionary period, which I address below. See P. Br. at 11.

3. There are no mitigating factors applicable in this case.

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) apply, 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 only mitigating factors that I may consider under the law 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 –

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(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 ¶ 5.

Petitioner argues that the IG failed to consider an allegedly applicable mitigating factor – that the court determined Petitioner had a mental or emotional condition at the time of his offense that reduced his culpability – in deciding to extend Petitioner’s exclusion to 22 years. P. Br. at 9-10. The IG contests that none of the enumerated mitigating factors apply. IG Br. at 5, 8.

While Petitioner has provided evidence that he suffered great emotional upset from caring for his ill brother and an overwhelming grief after his brother passed away that impacted his ability to attend to his business (P. Exs. 3-4, and IG Ex. 5), the record in the underlying criminal proceedings does not demonstrate that the court determined that Petitioner had a mental, emotional, or physical condition before or during the commission of the offense that reduced the individual’s culpability. IG Ex. 5.

Petitioner points to the following statement from the Judge in the District Court’s sentencing transcript in support of his position:

There are many things that happened in your life during this time period where you were not watchful, and even though you knew you weren’t watchful you were not watchful because there were so many other things going on.

P. Br. at 7; IG Ex. 5 at 18-19. Here, the District Court Judge in the underlying proceedings acknowledged that Petitioner’s lack of watchfulness over his pharmacy, of which Petitioner knew was an issue at the time, was due in part to the circumstances surrounding his brother’s illness and passing. See IG Ex. 5 at 18-19. This sentence falls short of evidencing that the District Court determined Petitioner had an emotional or mental condition that reduced his culpability, and I can find no other support that the District Court made such a determination. See generally, IG Ex. 5. I too acknowledge the difficulty of Petitioner’s life circumstances at the time of the commission of his

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offense and the resulting turmoil he experienced, as well as his remarkable professional achievements, reputation in the community, and the responsibility he shoulders in supporting his immediate and extended family. P. Ex. 3-4, IG Ex. 5. But I am prevented under the law from considering any of these facts and circumstances as mitigating factors.

An ALJ does not have authority to consider any factors as mitigating other than those specified at 42 C.F.R. § 1001.102(c). Waleed Khan, DAB No. 3083 at 9 (2023); Shaun Thaxter, DAB No. 3053 at 35 (2021) (“The mitigating factors that ALJs and the Board may consider are limited to those listed in the regulation.”); Anthony Joseph Moschetto, D.O., DAB No. 3030 at 14 (2021) (emphasizing that “only the mitigating factors in section 1001.102(c) may be considered for possible reduction of an exclusion period longer than the mandatory minimum period.”); Hussein Awada, M.D., DAB No. 2788 at 8 (2017) (“Only the mitigating factors identified in section 1001.102(c) may be considered and applied to reduce a period of exclusion.”).

Petitioner has failed to meet his burden to show the existence of any regulatorily permissible mitigating factor.

E. Given the specific facts pertaining to the applicable aggravating factors, a 22-year exclusion period is not unreasonable.

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 exclusion period imposed by the IG falls within a reasonable range. 42 C.F.R. § 1001.2007(a)(1)(ii); Craig Richard Wilder, DAB No. 2416 at 8; Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000).

While the IG is not compelled to extend the exclusion length for any period beyond five years in the presence of aggravating factors, she may choose to exercise her discretion to do so. 42 C.F.R. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion.”). An ALJ must uphold the IG’s determination as to the length of exclusion unless it is unreasonable, and an ALJ has no authority to change the amount of time chosen by the IG if it is within a reasonable range. 42 C.F.R. § 1001.2007(a)(1)(ii); 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

“[T]he assessment of aggravating and mitigating factors is qualitative, focusing on the circumstances of the case at hand, rather than quantitative or a matter of mathematical formulas. . . .” Sushil Aniruddh Sheth, M.D., DAB No. 2491 at 8 (2012). The ALJ’s evaluation does not rest on the number of aggravating or mitigating factors or any rigid formula for weighing them, but on a case-specific determination of the weight to be

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accorded to each factor based on a qualitative assessment of the circumstances surrounding the factors in the case. Mrugeshkumar Shah, M.D., DAB No. 3079 at 9-10 (2022) (citing Sheth, DAB No. 2491 at 5).

Petitioner argues the 22-year exclusion is unreasonable and a five-year exclusion is a more appropriate sanction in large part due to facts and circumstances involving the turmoil he suffered from his brother’s illness and subsequent death that occurred during a large part of the commission of the underlying offense. P. Br. at 4, 9. As addressed above, I am prevented under the law from considering such as mitigating circumstances, so I must limit my review of the reasonableness of the 22-year exclusionary period to a qualitative assessment of the applicable aggravating factors, and I find the period not unreasonable.

Here, the IG has established two aggravating factors— neither of which Petitioner dispute— and Petitioner has established no mitigating factors. Petitioner pleaded guilty to one count of healthcare fraud, agreeing that he participated in the illegal conduct from 2012 to 2019. IG Ex. 3. The District Court ordered Petitioner pay $1,033,950 to the Medicare Trust Fund in restitution. IG Ex. 4 at 6, IG Ex 5 at 20-1.

Petitioner’s conduct resulted in program losses 20 times the threshold for aggravation, warranting a significant increase in Petitioner’s period of exclusion. Thaxter, DAB No. 3053 at 31-32; Juan de Leon, Jr., DAB No. 2533 at 5 (2013). In instances where the program loss is substantially larger than the regulation’s threshold amount, this factor may be considered “an ‘exceptional aggravating factor’ to be accorded significant weight.” Samirkumar Shah, M.D., DAB No. 3111 at 9 (2023) (citing Leyva, DAB No. 2704 at 10). The restitution amount is one indication of the seriousness of Petitioner’s crime and the threat Petitioner poses to program integrity. Awada, DAB No. 2788 at 7. Accordingly, this factor alone justifies extending the exclusion period by a significant amount.

Petitioner argues that this aggravating factor should not be accorded significant weight, because Petitioner has already paid back more than half the amount. P. Br. at 12. The amount ordered as restitution has long been considered a reasonable measure of program losses. Summit S. Shah, M.D., DAB No. 2836 at 8; Laura Leyva, DAB No. 2704 at 9 (2016), aff’d, Leyva v. Price, No. 8:16-CV-1986, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017); de Leon, Jr., DAB No. 2533 at 5; Wilder, DAB No. 2416 at 9. The regulation focuses on the entire amount of program losses, not the amount that has yet to have been paid back. 42 C.F.R. § 1001.102(b)(1); Leyva, DAB No. 2704 at 9; see Donald A. Burstein, Ph.D., DAB No. 1865 (2003).

Petitioner’s participation in the fraudulent scheme for seven years, from 2012 to 2019, is seven times longer than the one-year threshold required for aggravation. Petitioner’s long-term engagement in illegal conduct raises concerns about his trustworthiness and

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demonstrates that he poses a substantial threat to federal health care programs and beneficiaries. See, e.g., Mrugeshkumar Shah, DAB No. 3079 at 10; Yolanda Hamilton, M.D., DAB No. 3061 at 14 (2022); Awada, DAB No. 2788 at 8. Significant weight may be assigned to illegal conduct that “occurred for even slightly longer than the one-year threshold.” Mrugeshkumar Shah, DAB No. 3079 at 10 (citing Awada, DAB No. 2788 at 8-10). Therefore, this factor also weighs in favor of a longer exclusion period to protect federally funded health care programs from the threat of untrustworthy actors. See Cash, DAB No. 1725 at 15.

Petitioner argues that significant weight should not be accorded this aggravating factor, because it is reasonable to expect that Petitioner would experience great difficulty and struggle to fulfill his duties as a pharmacy owner during the time he spent tending to his brother and during the years following his brother’s death. P. Br. 11. Petitioner’s argument here is akin to his argument for application of a mitigating factor above and, while the IG could have exercised her discretion to apply less weight to this factor when determining the exclusionary period length, I cannot find that the 22-year exclusionary period falls outside of a reasonable range given the lengthy period of time that Petitioner failed to exercise proper oversight knowing that false bills were being submitted and paid to Medicare and Medicaid. The acts that formed the basis of Petitioner’s conviction significantly exceeds the minimum one year required to meet this aggravating factor. The length of Petitioner’s health care fraud scheme and failure to report or correct the fraudulent activity represents more than a short-lived lapse of integrity and reflects negatively on his trustworthiness. Hamilton, DAB No. 3061 at 14 (citing Burstein, DAB No. 1865 at 8).

Considering the two aggravating factors, particularly the extremely long duration of Petitioner’s conduct and the significant program losses resulting therefrom, and the absence of any mitigating factors, I conclude that the IG’s assessment of a 22-year exclusionary period is not unreasonable.

VI. Conclusion

I affirm the IG’s determination to exclude Petitioner for 22 years from participating in Medicare, Medicaid, and all other federal healthcare programs pursuant to 42 U.S.C. § 1320a-7(a)(1), and I find that the length of the exclusion the IG imposed is not unreasonable.