Obiageli Ezeanya, DAB CR6541 (2024)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, Obiageli Ezeanya, from participation in Medicare, Medicaid, and all other federal health care programs for seven years pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  For the reasons discussed below, I conclude that the IG has a basis to exclude Petitioner from program participation and that a seven-year exclusion is not unreasonable based on the evidence provided.  The IG’s exclusion determination is affirmed.

I.      Background and Procedural History

By letter dated February 29, 2024, the IG notified Petitioner that she was excluded from participating in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Act for a minimum period of seven years, effective 20 days from the date of the letter.  IG Exhibit (Ex.) 1 at 1.  Petitioner was excluded because she was convicted in the United States District Court for the Eastern District of Michigan of a criminal offense related to the delivery of an item or service under Medicare or a State

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health care program, including the performance of management or administrative services relating to the delivery of such items or services.  IG Ex. 1 at 1.

The IG identified one aggravating factor which resulted in an increased exclusion period:  “The acts that resulted in the conviction, or similar acts, were committed over a period of one-year or more,” occurring from “about September 2015 to about October 2017.”  IG Ex. 1 at 1.

On April 23, 2024, Petitioner timely requested a hearing before an administrative law judge (ALJ) to contest the seven-year exclusion imposed by the IG.  Along with her hearing request, Petitioner filed a restitution order (Docket 1b) and a legal brief (Docket 1c).

On April 30, 2024, the Civil Remedies Division (CRD) issued an Acknowledgement Notice, my Standing Pre-Hearing Order, and the CRD Procedures (Civ. Remedies Div. P.).

On May 27, 2024, Petitioner filed a document entitled “Michigan Workforce Background Check” which references limitations on Petitioner’s ability to work a job that provides direct access or direct services to patients in certain settings.  (Docket 4).

I held a prehearing conference on May 28, 2024, and issued an order summarizing the prehearing conference on May 29, 2024.

The IG filed a brief (IG Br.) along with five exhibits (IG Exs. 1-5) on June 25, 2024.  On August 6, 2024, Petitioner filed an informal brief (P. Br.) along with one document (P. Ex. 1) regarding the early termination of probation.¹

The IG filed a reply to Petitioner’s brief on August 19, 2024.

II.     Issues

The issues in this case are:

1)  Whether the IG is authorized to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs based on section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1));  and

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2)  If so, whether the length of the exclusion the IG imposed is unreasonable.  In this case, the IG imposed a seven-year exclusion.  The minimum statutory period for an exclusion is five years.  42 C.F.R. § 1001.102(a).

III.    Jurisdiction

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

IV.    Admission of Exhibits and Decision on the Written Record

Absent objection, Petitioner’s Ex. 1 and IG Exs. 1-5 are admitted into evidence.

Petitioner indicated that a hearing was necessary to decide this case, but she also indicated that she did not have any testimony that she wished to offer at a hearing.  P. Br. at 5.  Neither Petitioner nor the IG proposed witnesses.  Therefore, a hearing is not necessary, and this matter will be decided on the merits of the written record.  Civ. Remedies Div. P. § 19(d).

V.     Findings of Fact

Petitioner was the sole owner of BloomHealth Home Care Services (“Bloom”), a home health agency operating in Southfield, Michigan.  IG Ex. 2 at 5.  Bloom provided in-home skilled nursing, physical therapy, and other services to homebound patients.  IG Ex. 2 at 5.

On September 14, 2021, Petitioner was charged with Conspiracy to Pay or Receive Kickbacks in violation of 18 U.S.C. § 371 via a criminal information filed in the United States District Court Eastern District of Michigan, Southern Division (District Court).²  Prosecutors alleged that Petitioner paid Individuals 1 and 2 kickbacks of $500 or $600, on a per-patient basis, in exchange for the recruitment and referral of Medicare beneficiaries to Bloom for home health services.  IG Ex. 2 at 8.  Petitioner attempted to disguise these transactions through sham marketing contracts.  IG Ex. 2 at 8.  On several dates in 2017, and one date in 2018, Petitioner wrote checks to Individuals 1 and 2 in exchange for the referrals of several Medicare beneficiaries.  IG Ex. 2 at 9, 10.  As a result of the scheme, Petitioner submitted and caused the submission of false and

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fraudulent claims to Medicare, resulting in approximately $256,515.60 in illegal kickbacks.  IG Ex. 2 at 9.

Petitioner entered into a plea agreement and pleaded guilty to Count 1 of the indictment, Conspiracy to Pay or Receive Healthcare Kickbacks.  Petitioner admitted that she knowingly and voluntarily joined the conspiracy in which two or more persons conspired, or agreed, to commit the crime of offering, paying, soliciting, or receiving health care kickbacks in violation of 18 U.S.C. § 371.  IG Ex. 3.

The District Court accepted Petitioner’s guilty plea to Count 1 of the indictment and entered judgment on January 26, 2023.  IG Ex. 4.  The District Court issued an amended judgment on January 22, 2024.  Petitioner was sentenced to one day of incarceration with credit for time served, in addition to two years of supervised release.  IG Ex. 5 at 2, 3.  Petitioner was granted an early discharge from supervised release on July 19, 2024.  P. Ex. 1.

VI.    Legal Authorities

The Secretary of the U.S. Department of Health and Human Services shall exclude an individual from participation in Medicare, Medicaid, and all other federally funded health care programs if that individual or entity has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or any State health care program.  42 U.S.C. § 1320a-7(a)(1).  The Act requires a minimum exclusion period of five years when the exclusion is mandated under section 1320a-7(a).  42 U.S.C. § 1320a-7(c)(3)(B).  The IG has the discretion to impose an exclusion longer than the minimum period when aggravating factors are present.  42 C.F.R. § 1001.102.  Here, the IG has imposed a seven‑year exclusion.

In exclusion cases, the IG has the burden of proving the basis for the exclusion and the existence of any aggravating factors.  42 C.F.R. § 1001.102(b).  The standard of proof is a preponderance of the evidence, which means a fact is proven if the evidence shows that it is more likely true than not true.  42 C.F.R. §§ 1001.2007(c), 1005.15(d).  In this case, the IG must prove that Petitioner was convicted of an offense related to the delivery of a health care item or service under the Medicare program.

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the IG had a basis for the exclusion and whether an exclusion longer than the required minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a).

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VII.   Analysis and Conclusions of Law

1. Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicare program, which subjects her to a mandatory exclusion from all federal health care programs for a minimum of five years.

The IG has the burden of proving that Petitioner was convicted of a criminal offense that was related to the delivery of a health care item.  Under the Act, an individual is considered to have been convicted of a criminal offense “when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to the criminal record has been expunged.”  Act § 1128(i)(3) (42 U.S.C. § 1320a-7(i)(3)); see also 42 C.F.R. § 1001.2 (paragraph (c) under the definition of “Convicted”).  It is undisputed that Petitioner was found guilty of one count of Conspiracy to Pay or Receive Healthcare Kickbacks.  The District Court entered a judgment of conviction against Petitioner on January 26, 2023, and an amended judgment on January 22, 2024.  IG Exs. 4, 5.  Petitioner does not dispute that she was convicted of a criminal offense that requires an exclusion.  P. Br. at 1, 2.

To prove that Petitioner’s conviction was related to the delivery of a health care item, the IG must show that there is a nexus between the offense and the delivery of a health care item or service.  The Departmental Appeals Board (Board) has repeatedly held that the phrase “related to” within the context of section 1128(a)(1) requires only that a common‑sense nexus exist between the offense and the delivery of a health care item or service under the Act or a state healthcare program.  See Summit S. Shah, M.D., DAB No. 2836 at 6 (2017) (citations omitted).  The evidence shows that Petitioner, as the owner of Bloom, a healthcare company, paid two individuals thousands of dollars for the recruitment and referral of Medicare beneficiaries.  The IG has proven, through documentary evidence, that a common-sense nexus exists between Petitioner’s conviction for Conspiracy to Pay or Receive Healthcare Kickbacks and the delivery of a health care item or service under the Medicare program.  Therefore, the IG has proven, beyond a preponderance of the evidence, that Petitioner was convicted of a criminal offense related to the delivery of an item or service under the Medicare program.  As a result, Petitioner must be excluded pursuant to section 1128(a)(1) of the Act.

2. The IG has identified one aggravating factor that supports an exclusion beyond the five-year minimum.

The IG may increase the mandatory five-year exclusion period based on the application of the aggravating factors listed in 42 C.F.R. § 1001.102(b).  If any of the aggravating factors set forth in 42 C.F.R. § 1001.102(b) justifies a longer exclusion, then the mitigating factors listed at 42 C.F.R. § 1001.102(c) may be considered as a basis for

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reducing the period of exclusion to no less than five years.  The IG bears the burden of persuasion with respect to aggravating factors and Petitioner bears the burden of persuasion with respect to mitigating factors.  42 C.F.R. § 1005.15(c).

In this case, the IG identified one aggravating factor as a basis for imposing a seven-year exclusion against Petitioner:  the acts resulting in Petitioner’s conviction, or similar acts, were committed over a period of one year or more.  IG Ex. 1.  The undisputed evidence shows that the illegal acts that resulted in Petitioner’s conviction took place from September 2015 through October 2017.  IG Ex. 3 at 4.  Petitioner participated in the criminal behavior for approximately two years, which shows that there was not a temporary lapse in judgment, but prolonged engagement in the criminal activity.

Petitioner argues that there are three mitigating factors that should be considered in the length of the exclusion:  she is a first-time offender, there was no financial loss to the Medicaid program, and the District Court determined that there were no injuries to the patients that Petitioner served.  P. Br. at 4.  Despite Petitioner’s arguments, only the three mitigating factors listed in the regulation may be considered in determining whether to reduce a period of exclusion.  42 C.F.R. § 1001.102(c).  One of the mitigating factors that may be considered is if a person has been convicted of three or fewer misdemeanor offenses and the 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.  42 C.F.R. 1001.101(c)(1).  Though Petitioner emphasizes that the Medicare program did not suffer any losses as a result of her actions, she does not meet the remaining criterion required to consider this mitigating factor. Petitioner was convicted of a felony, not a misdemeanor.  IG Ex. 3 at 2; see 18 U.S.C. § 3559(a)(4) (an offense carrying a term of imprisonment less than ten years, but five or more years is a Class D felony).  In this instance, the absence of financial loss to Medicare may not be considered a mitigating factor.  Petitioner has not provided evidence of other mitigating factors that may be considered when determining the length of the exclusion.

3. Based on the one aggravating factor and lack of mitigating factors, I find that the seven-year exclusion imposed by the IG is not unreasonable.

To determine whether the length of exclusion is unreasonable, I must consider whether the length of the exclusion falls into a “reasonable range” based on the evidence before me.  Petitioner engaged in a kickback scheme for two years.  The length of the illegal activity shows that Petitioner did not suffer a temporary lapse in judgment, but she engaged in the illegal activity for approximately two years.

Based on the circumstances and the lack of mitigating factors, I find that a seven-year exclusion is not unreasonable.

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4. Petitioner’s request for equitable relief must be denied.

Petitioner requests that the effective date of the exclusion mirror the date in the disqualification notice issued by the Michigan Department of Licensing and Regulatory Affairs on September 1, 2022.  P. Br. at 3; Docket 4.  Petitioner argues that she is being punished twice for the same offense and again emphasizes that there was no financial loss to the Medicare program.  P. Br. at 3.  However, the disqualification notice issued by the State of Michigan is separate and distinct from the IG’s authority to impose an exclusion.  Additionally, the effective date of the exclusion is set by the regulations, and I do not have the authority to change it.  Per the regulations, an exclusion is effective 20 days from the date of the IG’s Notice of Exclusion.  42 C.F.R. § 1001.2002(b).  It is well established that an ALJ does not have the authority to change the effective date of an exclusion.  Lisa Alice Gantt, DAB No. 2065 at 2-3 (2007).  42 C.F.R. §§ 1001.2002(b) (effective date), 1005.4(c)(1).

Lastly, Petitioner requests mercy and a reduction in the length of her exclusion because she has learned her lesson.  Pet. Req. for Hrg.  To the extent that Petitioner’s arguments may be construed as a request for equitable relief, an ALJ is not empowered to grant such relief.  Matthew J. Girardy, DMD, DAB No. 2987 at 7 (2020).

VIII.  Conclusion

For the foregoing reasons, I find that the IG has proven, by a preponderance of the evidence, that Petitioner was convicted of an offense that requires exclusion under section 1128(a)(1) of the Act.  I also find that a seven-year exclusion from participation in Medicare, Medicaid, and all other federal health care programs, effective March 20, 2024, is not unreasonable based on the circumstances of this case.

Endnotes

¹  Petitioner’s document is not labeled according to the instructions in my standing order.  However, for identification purposes, it will be referred to as Petitioner’s Exhibit 1 (P. Ex. 1).

²  18 U.S.C. § 371 states, “if two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.”