Claudia Haro, DAB CR6727 (2025)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Claudia Haro (Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of 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, it is determined that the IG had a basis to exclude Petitioner from program participation, and a mandatory exclusion must be imposed.  Based on the facts and evidence presented in this case, I find that a seven-year exclusion is not unreasonable based on the presence of one aggravating factor and no mitigating factors.

I.     Background and Procedural History

By notice letter dated November 29, 2024, the IG informed Petitioner that she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of seven years pursuant to section 1128(a)(1) of the Act.  The exclusion was imposed due to Petitioner’s conviction, in the United States District Court for the Southern District of Texas, Holding Session in McAllen (District Court), “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 items or services[,] under such programs.”  IG Exhibit (Ex.) 1 at 1.  The IG identified one aggravating factor to justify extending the exclusion period beyond the five-year mandatory minimum.  Id.

The Civil Remedies Division (CRD) received Petitioner’s request for a hearing on February 3, 2025.

On February 10, 2025, the CRD issued my Standing Pre-Hearing Order (Standing Order) and a letter, at my direction, acknowledging receipt of Petitioner’s hearing request.  The letter notified the parties that a telephone prehearing conference was scheduled for March 6, 2025, at 11:00 a.m. EST.  Petitioner filed a Motion for Discovery on March 3, 2025.

On the date of the prehearing conference, both parties appeared and agreed to a briefing schedule.  An Order Following Prehearing Conference and Setting Briefing Schedule was issued on March 7, 2025 (March 7, 2025 Order), which memorialized the matters discussed at the conference.

On March 31, 2025, the IG filed a brief (IG Br.) along with four exhibits (IG Exs. 1-4).  The IG also filed a Response to Petitioner’s Motion for Discovery.  On April 28, 2025, I issued an Order Denying Petitioner’s Request for Discovery.  On May 23, 2025, Petitioner filed a brief (P. Br.).  The IG filed a reply brief (IG Reply Br.) on June 4, 2025.

II.     Admission of Exhibits and Decision on the Written Record

The IG indicated that an in-person hearing is not necessary to resolve this matter.  IG Br. at 5.  Petitioner requests an in-person hearing but did not provide written direct testimony.  P. Br at 3.

A hearing will be held only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony and the witness’s proposed testimony is found to be relevant and non-cumulative.  March 7, 2025 Order at 5; Civil Remedies Division Procedures § 19(d).  Here, there is no written direct testimony, nor are there any proposed witnesses.  Therefore, a hearing is not necessary, and this matter will be decided on the written record.

Absent objection, IG Exs. 1-4 are admitted into evidence.  All evidence will be given the proper weight and consideration.

III.     Issues

The issues to be decided are:

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Whether the IG had a basis to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs under section 1128(a)(1) of the Act.  42 C.F.R. § 1001.2007(a)(1)(i).

Whether the seven-year exclusion imposed by the IG is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).

IV.     Jurisdiction

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

V.     Findings of Fact

1. An individual referred to as “E.P.” owned and operated several entities enrolled in the Medicare and Medicaid programs.  These entities were collectively referred to as “E.P. Entities.”  The E.P. Entities did business in Hidalgo County, Texas, providing healthcare related services and products including home health care, durable medical equipment, and adult day care facilities, primarily directed to Medicare and Medicaid beneficiaries.  IG Ex. 3 at 2.
2. Petitioner was an employee of one or more E.P. Entities from approximately 2010 to 2017.  Id.
3. On October 9, 2019, Petitioner was indicated by a Grand Jury of Conspiracy to Offer or Pay Illegal Remunerations in violation of 18 U.S.C. § 371 and 42 U.S.C. § 1320a-7b(b)(2) (Count 1) and False Statement in violation of 18 U.S.C. § 1001(a)(2) (Count 2).  IG Ex. 3.
4. It was alleged that Petitioner and her co-conspirators offered and paid kickbacks and bribes in exchange for the referral of Medicare and Medicaid beneficiaries that E.P. Entities submitted Medicare and Medicaid claims for.  Id. at 3.  From approximately January 2011 to August 2013, Dr. E.M. was provided with access to patients at adult day care facilities in exchange for certifying Medicare and Medicaid beneficiaries for services and supplies through one or more of the E.P. Entities.  Id. at 4.  Specifically, Petitioner facilitated the certification of Medicare and Medicaid beneficiaries by Dr. E.M. for the provision of services and supplies through one or more of the E.P. Entities.  Petitioner also delivered cash payments to Physician P.G. in return for the physician’s signature on documents certifying Medicare and Medicaid beneficiaries for services and supplies through one or more of the E.P. Entities.  Id. at 5.

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5. On July 30, 2021, Petitioner entered into a plea agreement pleading guilty to Count 1 of the Indictment.  IG Ex. 2.  Count 1 states in pertinent part:

From in or about 2011 through in or about September 2016, the exact dates being unknown to the Grand Jury, within the Southern District of Texas and elsewhere, [Petitioner] . . . did knowingly and willfully combine, conspire, confederate and agree with others . . . to commit certain offenses against the United States . . . by knowingly and willfully offering and paying remuneration, specifically, kickbacks and bribes . . . in return for referring individuals for the furnishing and arranging for the furnishing of any item and service for which payment may be made in whole or in part by a Federal health care program . . . .

          IG Ex. 3 at 2.

6. The District Court accepted Petitioner’s guilty plea and imposed judgment on May 14, 2024.  IG Ex. 4.  Count 2 of the Indictment was dismissed, and Petitioner was sentenced to three years of probation.  Id. at 2.

VI.     Legal Authorities

The Secretary of the United States Department of Health and Human Services (Secretary) shall exclude an individual from participation in Medicare, Medicaid, and all other federal health care programs if that individual has been convicted of a criminal offense related to the delivery of an item or service under Medicare 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).

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. § 1005.15(c); Standing Order ¶ 6.  Petitioner has the burden of proving any affirmative defenses or factors to mitigate the length of the exclusion if aggravating factors have been established.  42 C.F.R. § 1001.102(c); Standing Order ¶ 6.  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 an item or service under Medicare or a state health care program.

An excluded individual may request a hearing before an administrative law judge (ALJ), but only on the issues of whether the IG had a basis for the exclusion and whether an

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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).

VII.     Analysis and Conclusions of Law

1. Petitioner was convicted of a criminal offense related to the delivery of an 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.

To prevail, the IG must prove that Petitioner was convicted 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) (42 U.S.C. § 1320a-7(a)(1)).  Under the Act, an individual is considered to have been convicted of a criminal offense when “a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court.”  Act § 1128(i)(1), (3) (42 U.S.C. § 1320a-7(i)(1), (3)); see also 42 C.F.R. § 1001.2 (paragraphs (a) and (c) under the definition of “Convicted”).  It is undisputed that the District Court accepted Petitioner’s guilty plea and imposed judgment on May 14, 2024.  IG Ex. 4.  Petitioner does not dispute that she was convicted of a criminal offense.  P. Br. at 2.

Next, to prove that Petitioner’s conviction was related to the delivery of an item or service under Medicare, the IG must show a nexus between the offense and the delivery of an item or service under Medicare.  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 an item or service under Medicare.  Summit S. Shah, M.D., DAB No. 2836 at 6 (2017) (citing cases).  Petitioner argues that there is no nexus between the criminal conduct and the delivery of an item or service under Medicare because she did not evaluate patients or make clinical or managerial decisions.  P. Br. at 2.

In determining whether Petitioner’s conviction is related to the delivery of a health care item or service, I must look beyond the label and definition of the criminal statute that Petitioner was convicted of and analyze the facts and circumstances of the underlying conviction.  The Board has long held that, when determining whether an exclusion is warranted, an ALJ may look at “evidence as to the nature of an offense” such as “facts upon which the conviction was predicated.” Id.; Michael S. Rudman, M.D., DAB No. 2171 at 9 (2008).

In this case, the evidence shows that Petitioner admitted to “knowingly and willingly” participating in a kickback scheme that involved paying physicians for the referral of Medicare and Medicaid beneficiaries.  Contrary to Petitioner’s arguments, there is no requirement that her role involve the evaluation of patients or making clinical or

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managerial decisions.  P. Br. at 2.  Even by serving as a clerical and logistical assistant and delivering cash, as Petitioner admits to, Petitioner played a role in the kickback scheme.  The underlying facts and circumstances surrounding Petitioner’s conviction proves that there is a nexus to the delivery of a health care item or service.  I find that the IG has proven that Petitioner’s conviction is related to the delivery of an item or service under Medicare and Medicaid.  Therefore, the IG had a legal basis to impose an exclusion against Petitioner.

2. The IG has established one aggravating factor to justify an exclusion beyond the five-year minimum.

Exclusions imposed under section 1128(a)(1) carry a five-year mandatory minimum exclusion period.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).  The IG may extend the five-year exclusion period based on the presence 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) justify an exclusion longer than five years, mitigating factors listed at 42 C.F.R. § 1001.102(c) may be considered as a basis for 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 to support a seven-year exclusion:  the acts that resulted in Petitioner’s conviction were committed over a period of one year or more.  42 C.F.R. § 1001.102(b)(2); IG Ex. 1.  “[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, Ph.D., DAB No. 1865 at 8 (2003)).  Petitioner admitted to participating in the kickback scheme from in or about 2011 through September 2016, which significantly exceeds the minimum one year required to meet this aggravating factor.  IG Ex. 3 at 2.  Therefore, the IG has acted within her authority in applying the length of time that the criminal acts were committed as an aggravating factor.

3. Petitioner has failed to establish any mitigating factors recognized under 42 C.F.R. § 1001.102(c).

The regulations provide a list of mitigating factors that may be applied to reduce an exclusion to no less than five years if aggravating factors are present.  42 C.F.R. § 1001.102(c).  The applicable regulations identify only three mitigating factors that may be considered to reduce a period of exclusion:  (1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; (2) the record in the criminal proceedings demonstrates that the court determined that a petitioner had a mental, physical, or emotional condition that reduced their

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culpability; and (3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Petitioner argues that mitigation is warranted because she did not receive a role enhancement, has no prior convictions, and she fully complied with pretrial services.  P. Br. at 3.  However, none of these factors may be considered as mitigating factors per the regulations.

4. Based on the one aggravating factor and no mitigating factors, I find that the seven-year exclusion imposed by the IG is not unreasonable.

In determining whether the length of exclusion is unreasonable, I must determine whether the exclusion falls into a “reasonable range” based on the evidence submitted.  The regulations provide that the IG’s proposed exclusion must be upheld as long as the length of exclusion is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  It is important to note that it is the quality of the aggravating (or mitigating) factors that is most important when considering the length of exclusion and not the sheer number of aggravating factors that are present in each case.  57 Fed. Reg. 3298, 3314-15 (Jan. 29, 1992).

Petitioner argues that a seven-year exclusion serves no remedial purpose, compared to her non-custodial sentence.  P. Br. at 3.  However, “‘[e]xclusions imposed by the [IG] . . . are civil sanctions, designed to protect the beneficiaries of health care programs and the federal fisc, and are thus remedial in nature rather than primarily punitive or deterrent.’”  Andrew Louis Barrett, DAB No. 2887 at 6 (2018) (quoting Henry L. Gupton, DAB No. 2058 at 7 (2007)), aff’d, Henry L. Gupton v. Leavitt, 575 F.Supp.2d 874 (E.D. Ill. 2008); see also Gracia L. Mayard, M.D., DAB No. 2767 at 9 (2017) (noting that “criminal justice policy is irrelevant” in the exclusion context).

Petitioner also argues that she should be subject to a permissive exclusion instead of a mandatory exclusion.  P. Br. at 2, 4.  While it is true that some criminal offenses meet the criteria under both the permissive and mandatory exclusion provisions, the IG does not have the discretion to choose which exclusion authority to apply.  The Act requires the IG to exclude an individual convicted of a crime subject to mandatory exclusion.  See Gregory J. Salko, M.D., DAB No. 2437 at 4 (2012) (quoting Timothy Wayne Hensley, DAB No. 2044 at 16 (2006) (“As the Board has observed, if an offense falls under the mandatory exclusion statute, ‘courts have repeatedly held that the I.G. is then required to impose a mandatory exclusion even if an individual’s conduct also falls within the scope of a permissive exclusion provision.’”).  Because the IG determined that Petitioner was convicted of a crime related to the delivery of a health care item or service under Medicare or a state health care program, a mandatory exclusion under section 1128(a)(1) must be imposed.  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)) (stating that “[a]ny individual . . . that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII [Medicare] or under any State health care program” shall be excluded from participation in federal health care programs).

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Though Petitioner argues that she had a limited role, it does not change the fact that she was convicted for her role in the kickback scheme.  IG Ex. 3 at 2.  Additionally, Petitioner participated in the kickback scheme for over five years, which shows deliberate behavior and not merely a temporary lapse in judgment.  The length of Petitioner’s health care fraud scheme represents more than a short-lived lapse of integrity and reflects negatively on her trustworthiness.  Yolanda Hamilton, M.D., DAB No. 3061 at 14 (citing Burstein, DAB No. 1865 at 8).  Based on the facts and circumstances surrounding Petitioner’s conviction and the length of participation in the criminal scheme, I find that a seven-year exclusion is not unreasonable and falls within a reasonable range.

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 20 days from November 29, 2024, is not unreasonable based on the circumstances of this case.