Cesar Sturla, M.D., DAB CR6734 (2025)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Cesar Sturla, M.D. (Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of 16 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 16-year exclusion is not unreasonable based on the presence of three aggravating factors and no mitigating factors.  

I.    Background and Procedural History

By notice letter dated September 30, 2024, the IG informed Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of 17 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, Eastern District of Michigan (District Court), “of a criminal offense related to the

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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.”  IG Exhibit (Ex.) 1.  The IG initially identified four aggravating factors that supported extending Petitioner’s exclusion beyond the five-year mandatory minimum.

The Civil Remedies Division (CRD) received Petitioner’s request for a hearing on December 2, 2024.

On December 5, 2024, the CRD issued my Standing Pre-Hearing Order (Standing Order) and an Acknowledgement Letter, acknowledging receipt of Petitioner’s hearing request.  The letter notified the parties that a telephone prehearing conference was scheduled for January 16, 2025, at 11:00 a.m. EST.  Due to a scheduling conflict, the prehearing conference was rescheduled for February 4, 2025, at 11:00 a.m. EST.  On the date of the prehearing conference, attorney representatives appeared on behalf of Petitioner and the IG.  The parties agreed to a briefing schedule.  On February 13, 2025, an Order Following Prehearing Conference and Setting Briefing Schedule (February 13, 2025 Order) was issued.

On February 19, 2025, the IG filed a brief (IG Br.) along with five exhibits (IG Exs. 1-5).

Petitioner filed an informal brief (P. Informal Br.), along with a second brief (P. Br.) and three exhibits (P. Exs. 1-3) on April 8, 2025.

On April 24, 2025, the IG filed a reply brief (IG Reply Br.), along with an additional exhibit identified as IG Ex. 6.  IG Ex. 6 is a notice amending the September 30, 2024 Notice of Exclusion and reducing Petitioner’s exclusion to 16 years.

On June 3, 2025, I issued an Order providing Petitioner with the opportunity to respond to the IG’s amended notice.

Petitioner filed a sur-reply (P. Sur-Reply Br.) on June 13, 2025.

II.     Admission of Exhibits and Decision on the Written Record

Absent objection, IG Exs. 1-6 and P. Exs. 1-3 are admitted into evidence.  All evidence will be given the proper weight and consideration.

Petitioner indicated that an in-person hearing is not necessary to resolve this matter.  P. Informal Br. at 3.  The IG did not indicate whether an in-person hearing is necessary, however, as stated in the February 13, 2025 Order, 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’ proposed testimony is found to be relevant and non-

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cumulative.  February 13, 2025 Order at 4-5; Civil Remedies Division Procedures § 19(d).  Neither party identified witnesses for cross-examination.  Therefore, a hearing is not necessary, and this matter will be decided on the written record.

III.   Issues

The issues to be decided are:

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 16-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. Petitioner has been a medical doctor for over 35 years and was licensed to practice in the State of Michigan.  IG Ex. 2 at 5; P. Br. at 1-2.
2. Petitioner worked as an independent contractor for Company 1, a telemedicine company doing business in Florida.  IG Ex. 2 at 5-6.
3. On October 27, 2021, a Criminal Information was filed against Petitioner, alleging that beginning in or around October 2017, he engaged in a scheme to defraud Medicare by submitting, and causing the submission of, false and fraudulent claims to Medicare that were medically unnecessary; not eligible for Medicare reimbursement; and the services were not provided as represented.  IG Ex. 2.
4. Specifically, it was alleged that Petitioner agreed with others at Company 1 to electronically sign pre-filled unsigned prescriptions for durable medical equipment (DME) for Medicare beneficiaries in exchange for approximately $25 - $30 per patient.  IG Ex. 2 at 7-9.  Petitioner ordered DME without having a pre-existing doctor-patient relationship, without conducting a physical exam, and without communicating with the Medicare beneficiary.  IG Ex. 2 at 8.  Company 1 used the orders signed by Petitioner to fraudulently bill the Medicare program.  IG Ex. 3 at 4.

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5. On October 26, 2021, Petitioner entered into a Plea Agreement in which he pleaded guilty to one count of Health Care Fraud in violation of 18 U.S.C. § 1347.  Petitioner agreed that he “knowingly devised a scheme or artifice to defraud a health care benefit program in connection with the delivery of or payment for health care benefits, items, or services; [Petitioner] executed or attempted to execute this scheme or artifice to defraud; and [Petitioner] acted with the intent to defraud.”  IG Ex. 3 at 2.
6. The District Court accepted Petitioner’s guilty plea and adjudicated him guilty effective April 23, 2024.  IG Ex. 4 at 1.  Petitioner was sentenced to 20 months of incarceration, and one year of supervised release following his incarceration.  IG Ex. 4 at 2, 3.  The District Court ordered Petitioner to pay $922,006.31 in restitution to the Medicare Trust Fund.  IG Ex. 4 at 6.
7. On May 13, 2024, the State of Michigan Board of Medicine (Michigan Board) issued an Order of Summary Suspension, notifying Petitioner that his license to practice as a medical doctor was suspended in the State of Michigan.  IG Ex. 5.  In support of the suspension, the Michigan Board cites two instances in which Petitioner falsely documented examining and treating two patients, ordered medically unnecessary DME, and caused Medicare to be billed for the items that were ordered.  IG Ex. 5 at 13, 16.  Petitioner’s suspension was based on the same conduct that gave rise to Petitioner’s criminal conviction.  IG Ex. 5 at 16.

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.  Additionally, the IG has the burden of proving the existence of three aggravating factors as identified in the notice letters.

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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 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 him to a mandatory exclusion from all federal healthcare programs.1

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.  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 . . . 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” or 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 adjudicated him guilty effective April 23, 2024.

Next, the IG must show that the offense was related to the delivery of an item or service under a federal or a state health care program.  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 does not dispute that he was convicted of an offense related to the delivery of an item or service under Medicare or a State health care program that requires exclusion.  P. Informal Br. at 2.  In addition, the evidence shows that Petitioner admitted to accepting kickbacks and prescribing medically unnecessary durable medical equipment for patients that he had not treated or examined.  IG Exs. 3 at 3; 5 at 16.  Because Petitioner has been convicted of a criminal offense related to the delivery of an item or service under a state or federal healthcare program, he must be excluded from all federal healthcare programs for a mandatory minimum period of five years.

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2. The IG identified three aggravating factors that support an exclusion beyond the five-year minimum.2

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 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 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.  In this case, the IG has proposed a 16-year exclusion based on three aggravating factors.

As previously noted, the IG initially identified four aggravating factors and imposed a 17-year exclusion.  However, following the submission of both parties’ prehearing exchanges, the IG issued an amended exclusion conceding that it could not prove one of the aggravating factors and changing the length of the exclusion to 16 years.  IG Reply Br. at 1-2; IG Ex. 6.  The regulations provide that the IG may amend the length of exclusion “[n]o later than 15 days prior to the final exhibit exchanges required under [42 C.F.R.] § 1005.8.”  42 C.F.R. § 1001.2002(e).  Because the parties had already completed their prehearing exchanges, as authorized under § 1005.8, prior to the IG issuing the amended exclusion notice, the amendment is untimely.  I accept the IG’s concession regarding one aggravating factor involving the length of Petitioner’s involvement in the fraudulent scheme.  However, I interpret the IG’s attempt to amend the exclusion notice as a request for a reduced length of exclusion.  See 42 C.F.R. § 1005.20(b).  This decision is based on the three remaining aggravating factors.  

The IG identified the following aggravating factors as a basis for imposing a 16-year exclusion against Petitioner:  (1) loss to a government program or other entities as a result of Petitioner’s criminal conduct was greater than $50,000; (2) the sentence imposed by the trial court included incarceration; and (3) Petitioner was subject to an adverse action by an agency or state board based on the same set of circumstances giving rise to Petitioner’s conviction.  IG Ex. 1; 42 C.F.R. § 1001.102(b)(1), (5), (9).  Each factor is discussed below.

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1. The acts resulting in Petitioner’s conviction, or similar acts, caused, or were intended to cause, a financial loss to a government program of $50,000 or more.

If the acts resulting in the excluded individual’s conviction, or similar acts, caused, or were intended to cause, a financial loss of $50,000 or more to a government agency, government program, or one or more other entities, the IG may consider the entire amount of financial loss as an aggravating factor.  42 C.F.R. § 1001.102(b)(1).

It is undisputed that the District Court ordered Petitioner to pay $922,006.31 in restitution to the Medicare Trust Fund.  IG Ex. 4 at 6; 42 C.F.R. § 1001.102(b)(1).  Petitioner argues that he only gained $58,000 from his acts.  P. Br. at 4.  However, it is well-established that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program.  Yolanda Hamilton, M.D., DAB No. 3061 at 12-14 (2022).  Additionally, the Board has stated that the regulation does not say that an individual or entity has to benefit from the program loss, only that the offense “caused” or “intended to cause” the loss.  Craig Richard Wilder, M.D., DAB No. 2416 at 9 (2011) (quoting 42 C.F.R. § 1001.102(b)(1)).  The total loss incurred is well above the $50,000 threshold.  Therefore, the IG has established Petitioner’s restitution amount as an aggravating factor.

2. The sentence imposed by the District Court included incarceration.

When an excluded individual’s sentence for his or her criminal conviction includes incarceration, the IG may consider that as an aggravating factor.  42 C.F.R. § 1001.102(b)(5).

It is undisputed that the District Court sentenced Petitioner to 20 months of incarceration, and one year of supervised release following his incarceration.  IG Ex. 4 at 2-3; P. Br. at 6; 42 C.F.R. § 1001.102(b)(5).  This substantial prison term reflects the seriousness of Petitioner’s offense, justifying a longer period of exclusion.  See, e.g., Gracia L. Mayard, M.D., DAB No. 2767 at 8 (2017) (quoting Raymond Lamont Shoemaker, DAB No. 2560 at 8 (2014) (petitioner’s sentence is “an unmistakable reflection of the . . . Court’s assessment of Petitioner’s untrustworthiness.”)); see also Juan de Leon, Jr., DAB No. 2533 at 6 (2013) (noting that “a substantial period of incarceration would, on its own, justify the I.G. in increasing an exclusion significantly in excess” of the mandatory minimum and noting that the Board “once characterized a nine-month incarceration, which included a period of work release, as relatively substantial”); Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855 at 12 (2002) (the Board characterizing a nine-month incarceration as “relatively substantial”).  Therefore, the IG has established Petitioner’s incarceration as a second aggravating factor.

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3. Petitioner was subject to an adverse action by a state board based on the same set of circumstances that serve as the basis of the imposition of the exclusion.

If the circumstances that serve as the basis of the exclusion also resulted in an adverse action by any Federal, State, or local government agency or board, the IG may consider that as an aggravating factor.  42 C.F.R. § 1001.102(b)(9).

Petitioner does not dispute that his medical license was suspended by the Michigan Board.  P. Br. at 6.  The evidence shows that the license revocation was based on the same circumstances that serve as the basis of the imposition of this exclusion.  IG Ex. 5 at 16.  Therefore, the IG has established Petitioner’s medical license suspension as a third aggravating factor.

3. Petitioner has not identified any mitigating factors.

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 culpability; and (3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded from federal or state health care programs, additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).

Petitioner has the burden of proving, by a preponderance of the evidence, the existence of any mitigating factors.  42 C.F.R. § 1005.15(b)(1).  Mitigation pursuant to section 1001.102(c)(3) not only requires cooperation, but it also requires that the cooperation produce a specific result, namely other convictions, exclusions, investigations, reports being issued that identify program vulnerabilities and/or civil monetary penalties or assessments.  Begum v. Hargan, No. 16 CV 9624, 2017 WL5624388, at *8 (N.D. Ill. Nov. 21, 2017) (“The text of 42 C.F.R. § 1001.102(c)(3) raises a high standard. . . .  Mere cooperation is not enough to establish the mitigating factor; the cooperation must result in an investigation, conviction, or report.”).

Though Petitioner argues that he aided the government in prosecuting others who participated in the scheme, he admits that the cooperation does not rise to the level necessary to be considered a mitigating factor.  P. Br. at 6-7.  Nor has Petitioner provided any evidence of the results of his cooperation.  As such, Petitioner has failed to meet his burden to establish any mitigating factors under 42 C.F.R. § 1001.102(c).  Therefore, the

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record supports the IG’s finding of three aggravating factors and provides no evidence of mitigating factors.

4. Based on the three aggravating factors and no mitigating factors, I find that the 16-year exclusion recommended by the IG is not unreasonable.

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).  An ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.  An ALJ may not substitute his or her judgment for that of the IG or determine what period might be “better.”  Friedman v. Sebelius, 755 F.Supp.2d 98, 117 (D.D.C. 2010).  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 decide as to the appropriate extension of the period of exclusion beyond the minimum.  John (Juan) Urquijo, DAB No. 1735 (2000).  Alternatively, the Board suggested that when an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of exclusionary period should be expected absent some circumstances that indicate no such adjustment is appropriate.  Gary Alan Katz, R.Ph., DAB No. 1842 (2002).

In determining whether the length of exclusion is unreasonable, I must determine whether the length of 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.  The Secretary stated in the preamble to the final rule establishing the exclusion regulations that: 

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

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cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue. 

57 Fed. Reg. 3298, 3314-15 (Jan. 29, 1992).  

Here, the three aggravating factors hold significant weight.  Petitioner engaged in health care fraud that resulted in over $922,000 in loss to the Medicaid program.  IG Ex. 4.  This is a significant amount of fraud, particularly for a program designed to provide healthcare to some of this country’s most vulnerable populations.  Additionally, the Board has held that “it is entirely reasonable to consider a program loss amount substantially larger than” the threshold program loss amount to be “an ‘exceptional aggravating factor’ to be accorded significant weight.”  Laura Leyva, DAB No. 2704 at 9-10 (2016).

Despite Petitioner’s lack of criminal history, being a highly regarded member of the community, and showing remorse, the District Court still sentenced Petitioner to a significant period of incarceration, in addition to a year of supervised release.  P. Ex. 3 at 2.  This weighs heavily in favor of an increased period of exclusion.  The length of the incarceration is a direct reflection of the magnitude of the fraud committed by Petitioner.

Lastly, the suspension of Petitioner’s medical license carries considerable weight.  The State Board noted that “[Petitioner’s] conduct demonstrates a lack of good moral character.”  IG Ex. 5 at 17.

Petitioner argues that a shorter exclusion is warranted and cites several cases in which shorter exclusions were given.  However, the analysis of circumstances and evidence is case specific.  The Board has noted that “[e]very case involves a complex interaction of diverse circumstances and regulatory factors with varying weights.  For this very reason case comparisons, while sometimes informative for the ALJ’s or the Board’s decision-making in a given case, are of limited value and ultimately are not dispositive on the question of reasonableness of an exclusion period in a given case.”  Yolanda Hamilton, M.D., DAB No. 3061 at 21 (2022), (citing Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D., DAB No. 2635 at 11 (2015)). 

Petitioner argues that a 16-year exclusion is unreasonable and that the IG’s removal of one year for failing to meet an aggravating factor is unreasonable and an attempt to “circumvent the power given to the ALJ in these proceedings.”  P. Sur-Reply Br. at 5.  While I agree with Petitioner’s arguments regarding the IG’s handling of the amended exclusion notice, it is important to note that in Petitioner’s request for hearing (RFH) he conceded that “the acts did occur over a period of one year or more.”  RFH at 6 (emphasis supplied); see also RFH at 9 (“Dr. Sturla’s acts lasted for a period of one year, from October 2017 to October 2018.”).

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Even with the IG’s concession of one aggravating factor, the other three aggravating factors are quite consequential.  I cannot overlook the weight and significance of Petitioner’s fraudulent actions.  “Fraud not only threatens the fiscal integrity of the Medicare and Medicaid programs; it harms beneficiaries of the Medicare and Medicaid programs by wasting resources that could otherwise be used to provide them with needed services.”  Robert Hadley Gross, DAB No. 2807 at 8 (2017).  Petitioner’s participation in this level of fraud calls into question his integrity and trustworthiness and is the exact type of behavior that the regulations seek to exclude.  For these reasons, I accept the IG’s recommendation and find that a 16-year exclusion is not unreasonable based on the facts and circumstances of this case.

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 16-year exclusion from participation in Medicare, Medicaid, and all other federal health care programs, effective October 20, 2024, is not unreasonable based on the circumstances of this case.