Linh Cao Nguyen, MD, DAB CR6858 (2026)

DECISION

Petitioner, Linh Cao Nguyen, MD, is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)), effective August 20, 2025.  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)).  Exclusion for an additional nine years for a total minimum exclusion of 14 years1  is not unreasonable based on the existence of three aggravating factors and no mitigating factor. 

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I.  Background

The Inspector General (IG) notified Petitioner by letter dated July 31, 2025, that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum of 14 years.  The IG cited section 1128(a)(1) of the Act as the authority for Petitioner’s exclusion based on his felony conviction in the United States District Court, District of Arizona (district court) of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  The IG extended the five-year minimum period of exclusion to 14 years citing the existence of three aggravating factors and no mitigating factor.  IG Exhibit (Ex.) 1 at 1.  

Petitioner requested a hearing pursuant to 42 C.F.R. § 1005.2 on October 4, 2025 (RFH).  I convened a prehearing conference by telephone on October 28, 2025, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated October 29, 2025 (Prehearing Order). 

On December 5, 2025, the IG filed a motion for summary judgment (IG Br.) with IG Exs. 1 through 5.  On January 26, 2026, Petitioner filed a response in opposition to the IG motion for summary judgment (P. Br.) with Petitioner’s Exhibits (P. Exs.) 1 through 9.  The IG filed a reply (IG Reply) on February 10, 2026.  

Petitioner did not object to my consideration of IG Exs. 1 through 5, and they are admitted as evidence.  The IG did not object to my consideration of P. Exs. 1 through 9, and they are admitted as evidence. 

II.  Discussion

A.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(a)(1) of the Act, 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.  A state health care program includes a state Medicaid program.  Act § 1128(h) (42 U.S.C. § 1320a-7(h)).  The plain language of section 1128(a)(1) shows that Congress required that the Secretary exclude an individual or entity convicted of any criminal offense related to the delivery of an item or service under Medicare or a state health care program. 

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Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court 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 no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. § 1001.101(a), (c).  

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 of longer than five years, however, are mitigating factors considered as a basis for reducing the period of exclusion to no fewer 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 ¶ 4.  There may be no collateral attack of the conviction that is the basis for the exclusion.  42 C.F.R. § 1001.2007(d). 

B.  Issues

The Secretary has by regulation limited my scope of review to two issues: 

Whether the IG has a basis for excluding Petitioner from participation in Medicare, Medicaid, and all federal health care programs; and

Whether the length of the proposed period of exclusion is unreasonable. 

42 C.F.R. § 1001.2007(a)(1). 

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

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

1.  Petitioner’s request for hearing was timely, and I have jurisdiction. 

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There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005. 

2.  Summary judgment is appropriate in this case. 

Pursuant to section 1128(f) of the Act, a person subject to exclusion has the right to reasonable notice and an opportunity for a hearing.  The Secretary has provided by regulation that a sanctioned party has the right to a hearing before an ALJ, and both the sanctioned party and the IG have a right to participate in the hearing.  42 C.F.R. § 1005.2‑.3.  Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration.  42 C.F.R. § 1005.6(b)(5).  An ALJ may also resolve a case, in whole or in part, by summary judgment.  42 C.F.R. § 1005.4(b)(12). 

Summary judgment is appropriate in an exclusion case when there are no disputed issues of material fact and when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law.  Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett, DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W. Foderick, M.D., DAB No. 1125 (1990).  When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one.  Surabhan Ratanasen, M.D., DAB No. 1138 (1990); Foderick, DAB No. 1125.  In opposing a properly supported motion for summary judgment, the nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent’s prima facie case or that might establish a defense.  The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment.  To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder.  On summary judgment, the judge does not weigh the evidence or attempt to determine the truth.  Rather, the judge accepts the nonmovant’s evidence as true and draws all permissible inferences in the nonmovant’s favor.  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-57 (1986). 

The IG moved for summary judgment.  Petitioner opposes summary judgment.  Petitioner’s argument is that the IG failed to consider a mitigating factor when deciding to extend the period of exclusion to 14 years.  Petitioner wants me to deny summary judgment for the IG and convene an oral hearing for the taking of testimony regarding the existence of the mitigating factor.  Petitioner argues that if the mitigating factor is found to exist that the IG failed to consider, I may reassess the period of exclusion and determine a reasonable period of exclusion.  But even accepting Petitioner’s factual assertions as true for purposes of summary judgment, I can draw no favorable inference

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for Petitioner that the mitigating factor exists and, as a matter of law, I have no discretion to grant the relief Petitioner requests.  Accordingly, summary judgment is appropriate for the IG. 

3.  Section 1128(a)(1) of the Act requires Petitioner’s exclusion from participation in Medicare, Medicaid, and all other federal health care programs. 

a.  Undisputed Facts

The parties were advised by my Prehearing Order ¶ 8 that on summary judgment a fact alleged and not specifically denied may be accepted as true and all evidence will be considered admissible and true absent specific objection to admissibility or accuracy.  The following material facts are undisputed.  All reasonable factual inferences are drawn in Petitioner’s favor on summary judgment. 

On October 20, 2021, a grand jury indictment was filed in the district court charging Petitioner with one count of health care fraud in violation of 18 U.S.C. § 1347, 43 counts of false statements related to health care matters in violation of 18 U.S.C. § 1035, and six counts of aggravated identity theft in violation of 18 U.S.C. § 1028A.  IG Ex. 2.

On March 15, 2024, Petitioner signed a plea agreement.  Petitioner agreed to plead guilty to Count 1 of the Indictment charging him with health care fraud in violation of 18 U.S.C. § 1347, a class C felony.  Pursuant to the plea agreement the remaining counts of the indictment were to be dismissed at sentencing.  Petitioner agreed to a sentence limitation of incarceration for 30 months.  Petitioner agreed as part of the plea agreement that the government could prove that from at least 2016 through 2021, he knowingly and willfully executed a scheme to defraud health care benefit programs including Medicare, Tricare, Arizona Medicaid administered by the Arizona Health Care Cost Containment System, and some private insurers, knowing that some were government health benefit programs.  He admitted that he knowingly, willfully, and fraudulently caused thousands of false billing claims to be submitted that contained material false statements to receive payments to which he was not entitled.  He agreed that the total actual loss due to his scheme was at least $3,746,288.16.  He agreed he owed restitution of $1,149,623.46 to the private health care benefit programs and $2,596,664.70 by a civil settlement to the United States for losses to Medicare, Tricare, and Arizona Medicaid.  IG Ex. 3 at 1-3, 13-15; P. Ex. 9 at 1-3, 13-15. 

The district court entered judgment and imposed sentence on October 16, 2024.  IG Ex. 4; P. Exs. 2, 4.  Petitioner’s guilty plea entered on March 19, 2024, was accepted by the district court and Petitioner was adjudged guilty of one count of health care fraud in violation of 18 U.S.C. § 1347, a Class C felony and the remaining charges of the

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indictment were dismissed.  Petitioner was sentenced to 24 months in prison followed by 12 months of supervised release.  He was ordered to pay restitution of $1,149,623.46 to private health benefits programs and to execute a civil settlement of $2,596,664.70 to Medicare, Tricare, and Arizona Medicaid.  IG Ex. 4 at 1-2; P. Ex. 2 at 1-2; P. Ex. 4.  The civil settlement was placed in evidence by the IG as IG Ex. 5. 

On October 16, 2024, the district court completed a “Statement of Reasons” for a downward departure from the federal sentencing guidelines.  The court adopted the presentence investigation report without change.  P. Ex. 3 at 1.  The district court selected the factors affecting the downward departure, specifically Petitioner’s community ties, family ties and responsibilities, employment record, military service, presentence rehabilitation, remorse, and that the sentence imposed was adequate for deterrence.  But the district court did not select the factors listed on the form, specifically diminished capacity, drug or alcohol dependence, or mental or emotional condition.  P. Ex. 3 at 3. 

Petitioner placed in evidence the transcript of Petitioner’s sentencing proceeding.  The district court accepted the presentence report without change and made it part of the record.  P. Ex. 4 at 5.  The district court commented that Petitioner’s crime was very serious, involving willful conduct occurring over a long period of time, and involving millions of dollars.  The district court noted that the sentencing guideline range for imprisonment was 57 to 71 months.  But he accepted the plea agreement cap of 30 months and determined to impose incarceration of 24 months.  The district court listed five reasons for agreeing to the downward departure:  (1) Petitioner’s service in the Air Force; (2) Petitioner’s good conduct during pretrial release; (3) community and family support of Petitioner; (4) Petitioner’s family ties; and (5) Petitioner’s sincere remorse.  P. Ex. 4 at 36-38.  In closing comments, the district court stated to Petitioner “[f]rom my perspective, your conduct in this case was brazen; I think it was more than just blind; and that’s why I imposed the prison sentence that I did, primarily.”  P. Ex. 4 at 46-47. 

Petitioner placed in evidence the presentence investigation report filed with the district court.  P. Ex. 1.  Petitioner’s mental and emotional health and substance abuse were addressed in the report.  The report reflects a history of depression, an adjustment disorder with depressed mood and anxiety, thoughts of suicide with no intent or plan, and alcohol dependence.  P. Ex. 1 at 12 ¶¶ 56-60.  The US Probation Officer recommended confinement of 24 months.  P. Ex. 1 at 20, 22.  The report lists as mitigating factors Petitioner’s lack of violent criminal history, health issues, commendable military service, education, and pretrial adjustment.  P. Ex. 1 at 21.  The presentence report recommended a mental health evaluation and necessary treatment, abstinence from alcohol consumption, substance abuse counseling, and substance testing.  P. Ex. 1 at 21, 24-25. 

Petitioner filed a sentencing memorandum in the district court on August 8, 2024.  Petitioner requested a sentence to incarceration of fewer than the 24 months

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recommended in the presentence investigation report (P. Ex. 1).  Petitioner asked the district court “to consider his life history, character, and motivation.”  P. Ex. 5 at 1, 7-9.  In discussing his crime, Petitioner characterized it as “knowing and regrettable.”  P. Ex. 5 at 6.  Petitioner stated that he made the “decision to commit Medicare fraud to keep his business afloat.”  P. Ex. 5 at 7.  Petitioner stated that he had become concerned about his drinking habits, agreed to have an alcohol prohibition added to his conditions of release, he joined an outpatient substance abuse treatment program, and he had a sustained period of abstinence.  P. Ex. 5 at 11.  

Petitioner placed in evidence before me 427 pages of his medical records.  The records indicate that Petitioner had concerns about and/or treatment for depression, post-traumatic stress disorder, headaches, and alcohol use disorder in addition to multiple physical problems.  P. Ex. 6. 

On July 31, 2025, the IG notified Petitioner he was excluded for 14 years pursuant to section 1128(a)(1) of the Act based on his conviction.  The IG cited three aggravating factors:  Petitioner’s acts that resulted in his conviction caused or were intended to cause loss of $50,000 or more; the acts were committed over a period of one year or more; and the sentence included incarceration.  IG Ex. 1 at 1. 

b.  Analysis

The IG cites section 1128(a)(1) of the Act as the basis for Petitioner’s mandatory exclusion.  The statute provides in relevant part: 

(a)  MANDATORY EXCLUSION. – The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)): 

(1)  CONVICTION OF PROGRAM-RELATED CRIMES. – Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.  

Act § 1128(a)(1). 

Congress has, by the plain language of section 1128(a)(1) of the Act, required the Secretary to exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity:  (1) convicted of a criminal offense, whether a misdemeanor or felony; (2) where the offense is related to the delivery of an item or

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service; and (3) the delivery of the item or service was under Medicare or a state health care program.  The elements that trigger an exclusion under section 1128(a)(1) of the Act are triggered in this case. 

Petitioner concedes that he was convicted of health care fraud by the district court.  Petitioner also concedes that his exclusion from participation in Medicare, Medicaid and all federal care programs is mandated for a minimum of five years pursuant to section 1128(a)(1) of the Act.  P. Br. at 1-2. 

Petitioner’s concessions are supported by the undisputed facts.  Specifically, he entered a plea of guilty in the district court, the guilty plea was accepted, and judgment was entered by the district court that he was guilty of healthcare fraud.  IG Ex. 4; P. Exs. 2, 4.  Accordingly, I conclude that Petitioner was convicted within the meaning of 1128(i) of the Act.  Act § 1128(i)(1) (judgment of conviction was entered), (2) (finding of guilt by a court); and (3) (Petitioner’s guilty plea accepted by a court). 

The second and third elements for mandatory exclusion under section 1128(a)(1) of the Act require consideration of the circumstances underlying the offense to determine whether the offense of which Petitioner was convicted was committed in connection with the delivery of a health care item or service and whether the delivery of the health care item or service was under Medicare or a state health care program. 

The Departmental Appeals Board (Board) has long held that the statutory terms describing an offense do not control whether that offense is “related to” the delivery of a health care item or service under Medicare or a state health care program for purposes of exclusion pursuant to section 1128(a) of the Act.  E.g., Dewayne Franzen, DAB No. 1165 (1990) (inquiry is whether conviction is related to Medicaid fraud, not whether the petitioner was convicted of Medicaid fraud).  Rather, an ALJ must examine whether there is a “common sense connection or nexus between the offense and the delivery of an item or service under the program.”  Scott D. Augustine, DAB No. 2043 at 5-6 (2006) (citations omitted); Dr. Timothy Baxter, DAB No. 3074 at 15 (2022); Summit S. Shah, M.D., DAB No. 2836 at 6 (2017).  The terms “related to” and “relating to” in 42 U.S.C. § 1320a-7 simply mean that there must be a nexus or common-sense connection.  Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one,” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotes omitted); Quayum v. U.S. Dep’t of Health & Human Servs., 34 F.Supp.2d 141, 143 (E.D.N.Y. 1998). 

To determine whether there is a nexus or common-sense connection, “evidence as to the nature of an offense” may be considered, such as the “facts upon which a conviction was predicated.”  Robert C. Hartnett, DAB No. 2740 at 7 (2016) (quoting Berton Siegel,

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D.O., DAB No. 1467 at 6-7 (1994)).  The bar to a petitioner collaterally attacking the conviction underlying an exclusion does not preclude review of the facts and circumstances on which the conviction was based.  An ALJ may consider extrinsic evidence to determine the events which formed the basis for the offense.  Narendra M. Patel, M.D., DAB No. 1736 (2000). 

The undisputed facts establish the required connection, rational link, or nexus between Petitioner’s criminal offense and the delivery of a health care item or service under Medicare or a state health care program.  My decision is guided by the Board decision in W. Scott Harkonen, M.D., DAB No. 2485 (2012), aff’d, Harkonen v. Sebelius, No. C13-0071 PJH, 2013 WL 5734918 (N.D. Cal. Oct. 22, 2013). 

In Harkonen, an appellate panel of the Board discussed in detail the elements of section 1128(a)(3) of the Act, which also requires that the offense of which one is convicted have been committed in connection with the delivery of a health care item or service.  The Board discussed that in prior cases, it had interpreted the language “in connection with” to require a common-sense connection or nexus, also characterized as a “rational link,” between the criminal offense and the delivery of a health care item or service.  Harkonen, DAB No. 2485 at 7.  The Board noted that in Erik D. DeSimone, R.Ph., DAB No. 1932 (2004), it found the required nexus in a case where a pharmacist, in the guise of performing his professional duties, took controlled substances for his own use.  Harkonen, DAB No. 2485 at 7.  In Kenneth M. Behr, DAB No. 1997 (2005), the Board found the nexus where a pharmacist who had access to drugs due to his position attempted to embezzle those drugs, rejecting the argument that the underlying criminal offense must involve actual delivery of a health care item or service.  Harkonen, DAB No. 2485 at 7-8.  In Ellen L. Morand, DAB No. 2436 (2012), the Board concluded that the Petitioner’s theft from the evening deposit of the pharmacy that employed her had the requisite nexus considering that the evening deposit included revenue from the sale of health care items and that the Petitioner diverted those funds to her use.  Harkonen, DAB No. 2485 at 8.  The Board summarized its prior holdings to be that “frauds or thefts that are linked in a rational way to the delivery of a health care item or service do fall within the ambit” of section 1128(a)(3).  Harkonen, DAB No. 2485 at 8.  The Board further noted that its interpretation is consistent with the interpretation of similar language found in section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)).  Harkonen, DAB No. 2485 at 9.  The Board pointed out that its interpretations of the language of section 1128(a) “effectuates the twin purposes of section 1128(a):  (1) to protect federal health care programs and their beneficiaries from individuals who have been shown to be untrustworthy; and (2) to deter health care fraud.”  Harkonen, DAB No. 2485 at 9 (citations omitted).  In Harkonen, the Board stated that section 1128(a)(3) does not require proof of an actual impact or effect upon the delivery of a health care item or service, rather the ALJ must consider all the evidence of circumstances underlying the criminal offense, including evidence extrinsic to the criminal proceedings if reliable and

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credible, to find the rational link between the criminal offense and the delivery of a health care item or service.  Harkonen, DAB No. 2485 at 10. 

The rational link or nexus between Petitioner’s conviction of healthcare fraud is more obvious in this case than the nexus found in Harkonen and the cases discussed in that decision by the Board.  Petitioner agreed as part of the plea agreement that the government could prove that from at least 2016 through 2021, he knowingly and willfully executed a scheme to defraud health care benefit programs including Medicare, Tricare, Arizona Medicaid, and some private insurers, knowing that some were government health benefit programs.  He admitted that he knowingly, willfully, and fraudulently caused thousands of false billing claims to be submitted that contained material false statements to receive payments to which he was not entitled.  He agreed that the total actual loss due to his scheme was at least $3,746,288.16.  He agreed he owed restitution of $1,149,623.46 to the private health care benefit programs and $2,596,664.70 by civil settlement to the United States for losses to Medicare and Tricare.  IG Ex. 3 at 1-3, 13-15; P. Ex. 9 at 1-3, 13-15.  The fact that Petitioner agreed to a civil settlement pursuant to which he paid Medicare, Tricare, and Arizona Medicaid $2,596,665.70 is further evidence of the nexus.  IG Ex. 5. 

I conclude that the second and third elements necessary to trigger mandatory exclusion under section 1128(a)(1) of the Act are satisfied, i.e., Petitioner’s offense was related to the delivery of a health care item or service under Medicare or a state health care program.  Accordingly, I conclude that the elements necessary to trigger an exclusion pursuant to § 1128(a)(1) of the Act are satisfied by the undisputed facts, and Petitioner’s exclusion is required by section 1128(a)(1) of the Act. 

4.  Section 1128(c)(3)(B) of the Act requires a minimum exclusion of five years for any exclusion pursuant to section 1128(a) of the Act. 

I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(1) of the Act.  Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act.  There is no discretion to impose a lesser period.  The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional nine years for a total exclusion of 14 years. 

5.  Three aggravating factors established by 42 C.F.R. § 1001.102(b) exist in this case that were considered by the IG as a basis to extend the period of exclusion beyond five years. 

The IG cited three aggravating factors and no mitigating factor in extending Petitioner’s period of exclusion from the mandatory minimum five-year exclusion to 14 years.  The aggravating factors cited by the IG are: 

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a.  The acts for which Petitioner was convicted caused or were intended to cause a financial loss of $50,000 or more;

b.  The acts for which Petitioner was convicted occurred over a period of one year or more; and

c.  The sentence imposed on Petitioner included incarceration. 

IG Ex. 1.  The existence of the three aggravating factors is not disputed by Petitioner.  P. Br. at 1-2.  Petitioner admitted in his plea agreement that: 

The total actual loss due to his fraudulent healthcare claims was at least $3,746,288.16 – $1,149,623.46 loss to private health care programs and $2,596.664.70 loss to Medicare and Medicaid programs; and

His criminal activity continued from 2016 through 2021. 

IG Ex. 3 at 13-15; P. Ex. 9 at 13-15; P. Br. at 4.  The evidence not subject to dispute shows that the district court sentenced Petitioner to 24 months in prison.  IG Ex. 4 at 1; P. Ex. 2 at 1; P. Ex. 4 at 38.  

I conclude that the aggravating factors established by 42 C.F.R. § 1001.102(b)(1), (2), and (5) exist in this case. 

6.  Drawing all reasonable favorable inferences for Petitioner without weighing the evidence, Petitioner has not shown there is a genuine dispute that a mitigating factor established by 42 C.F.R. § 1001.102(c) exists that the IG failed to consider in determining the period of exclusion. 

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) are cited by the IG to justify an exclusion of longer than five years, as in this case, then mitigating factors may be considered as a basis for reducing the period of exclusion to no fewer than five years.  42 C.F.R. § 1001.102(c).  The IG did not list in the notice of exclusion and therefore did not consider any mitigating factors in deciding to extend Petitioner’s exclusion to 14 years.  IG Ex. 1. 

The only authorized mitigating factors that the IG or I may consider are listed in 42 C.F.R. § 1001.102(c): 

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(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 –

(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(b), (c); Prehearing Order ¶ 4; Stacey R. Gale, DAB No. 1941 at 9 (2004); Arthur C. Haspel, D.P.M., DAB No. 1929 at 5 (2004).  On summary judgment, Petitioner must show at least a genuine dispute of material fact regarding the existence of a mitigating factor and mere allegations are insufficient. 

Petitioner argues that there is a genuine dispute of material fact that the district court considered at sentencing that Petitioner had a mental or emotional condition before or during the commission of the offense that reduced Petitioner’s culpability for his crimes. 

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P. Br. at 5-8.  Petitioner admits the district court made no specific finding of reduced culpability.  P. Br. at 6. 

If the district court considered Petitioner was of diminished culpability for his crimes due to a mental or emotional condition before or during the commission of his crimes, that is a mitigating factor recognized by 42 C.F.R. § 1001.102(c)(2).  If the mitigating factor existed in this case and the IG failed to consider the mitigating factor in extending the period of exclusion, then I have discretion to conclude the period of exclusion imposed by the IG was unreasonable and substitute a reasonable period of exclusion of my determination.  P. Br. at 1-8.  Petitioner cannot point to evidence that the district court specifically stated it found Petitioner had reduced culpability.  Therefore, Petitioner asks that I infer that fact from all the evidence. 

When considering summary judgment, I am to view the record in a light most favorable to the nonmovant, in this case Petitioner.  Petitioner gets the benefit of all reasonable inferences that may be drawn based on the evidence or record.  However, I cannot draw unreasonable inferences in Petitioner’s favor.  Wax David Flowers, Ph.D., DAB No. 3039 at 8 (2021).  The inference Petitioner requests is not reasonable in this case.  The evidence before me does not support a favorable inference for Petitioner, even though the evidence is viewed in a light most favorable to Petitioner.  The evidence does not show the existence of a genuine dispute of material fact that would make it more likely than not that the district court judge found that Petitioner had a mental condition that reduced Petitioner’s culpability for his crimes.  42 C.F.R. § 1001.102(c)(2). 

I accept as true for purposes of summary judgment that Petitioner, prior to or during the commission of his offenses, suffered from depression, post-traumatic stress disorder, an alcohol use disorder/dependence, an adjustment disorder with anxiety and depressed mood, and a history of thoughts of suicide with no intent or plan.  P. Ex. 1 at 12 ¶¶ 56-60; P. Ex. 5 at 11; P. Ex. 6. 

I accept as true that the district court was aware of Petitioner’s mental and emotional problems based on the presentence report.  P. Ex. 1.  The district court stated during sentencing that he accepted the presentence report without change and made it part of the record.  P. Ex. 4 at 5. 

Four things make Petitioner’s requested inference unreasonable: 

1.  When the district court completed the statement of reasons for the downward departure in Petitioner’s sentence to confinement the judge checked boxes next to community ties, family ties and responsibilities, employment record, military service, presentence rehabilitation, remorse, and the sentence imposed was

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adequate deterrence.  The judge did not check boxes next to diminished capacity, drug or alcohol dependence, or mental or emotional condition.  P. Ex. 3 at 3. 

2.  In Petitioner’s sentencing memorandum, Petitioner stated that he had become concerned about his drinking habits, agreed to have an alcohol prohibition added to his conditions of release, he joined an outpatient substance abuse treatment program, and he had a sustained period of abstinence.  P. Ex. 5 at 11.  But it is not argued in the memorandum that Petitioner should be treated as being less culpable for his crimes.  Petitioner asked the district court to consider his life history, character, and motivation, but not that he was less culpable due to mental health problems.  P. Ex. 5 at 1, 7-9.  Petitioner also admitted that he intentionally committed healthcare fraud to keep his business afloat.  P. Ex. 5 at 7. 

3.  The district court judge was very specific during sentencing about why he imposed a sentence of only 24 months’ incarceration.  During sentencing, the district court stated Petitioner’s crime was very serious, involving willful conduct that occurred over a long time, and involved millions of dollars.  The district court listed five reasons for the downward departure orally on the record during sentencing:  (1) Petitioner’s military service; (2) his good conduct during pretrial release; (3) community and family support for Petitioner; (4) Petitioner’s family ties; and (5) Petitioner’s sincere remorse.  P. Ex. 4 at 36-38. 

4.  In closing comments the district court told Petitioner that he considered his conduct brazen.  P. Ex. 4 at 46-47. 

The district court’s statement of reasons form, the judge’s comments on the record, as well as Petitioner’s admissions that his conduct was willful are inconsistent with a reasonable inference that the district court considered Petitioner less culpable for his crimes.  Absent the inference, Petitioner fails to show a genuine dispute of material fact that defeats summary judgment by showing it more likely than not that there was the mitigating factor that the judge considered Petitioner less culpable due to Petitioner’s mental or emotional problems. 

I conclude that the evidence does not permit a reasonable inference for Petitioner that the district court determined Petitioner had a mental and/or emotional condition before or during the commission of his offense that reduced Petitioner’s culpability, and such a diminution is required to trigger the mitigating factor established by 42 C.F.R. § 1001.102(c)(2).  Accordingly, I conclude that Petitioner has not established the mitigating factor under 42 C.F.R. § 1001.102(c)(2).  

Petitioner argues that the evidence shows he was granted a downward departure in sentencing due in part to his presentence rehabilitation.  P. Br. at 5-6.  The district court

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judge explained the five reasons for the downward departure in the sentence to incarceration.  The judge explained his second reason related to Petitioner’s potential for rehabilitation: 

The second reason [for the downward variance] is [Petitioner’s] performance on pretrial services release.  It’s been exemplary.  Everything that has been asked of him he has done.  And he has been on pretrial services release for three years now.  So he’s demonstrated that he can – he’s a very good candidate for rehabilitation.  He can work through this.  He can be a productive member of society. 

P. Ex. 4 at 37.  Petitioner argues that the district court may have been referring to rehabilitation related to Petitioner’s mental health.  P. Br. at 6.  Petitioner also argues that the lack of clarity in the district court’s statements about presentence rehabilitation creates a genuine dispute of material fact that makes summary judgment inappropriate.  P. Br. at 7-8.  But I find that the judge’s explanation is clear, and it clearly does not support Petitioner’s desired interpretation.  Even if the district court was alluding to Petitioner’s mental health condition when referring to presentence rehabilitation, that does not support an inference that the district court judge found Petitioner’s culpability was lessened by mental health problems that existed before or during the commission of his crimes.  I also note that a court finding that Petitioner experienced some rehabilitation before he was sentenced is not a mitigating factor established by 42 C.F.R. § 1001.102(c). 

I conclude that Petitioner has failed to establish any mitigating factor that may be considered under 42 C.F.R. § 1001.102(c).  Accordingly, this case presents no mitigating factors the I.G. failed to consider that may have justified reducing the period of Petitioner’s exclusion. 

7.  Exclusion for 14 years is not unreasonable in this case. 

The Secretary requires by regulation that the ALJ determine whether the period of the exclusion imposed is “unreasonable,” if a period greater than the minimum period is imposed by the IG.  42 C.F.R. § 1001.2007(a)(1)-(2).  The Board has interpreted the regulations as significantly limiting the scope of ALJ review.  The regulation states that the ALJ must determine whether the length of exclusion imposed is “unreasonable,” without definition of what is unreasonable or direction for how to determine whether a period of exclusion is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  The drafters of the regulation explained that the intent of the regulation is to ensure that if the IG’s proposed period of exclusion is “within a reasonable range, based on demonstrated criteria, the

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ALJ has no authority” to change the period of exclusion.  57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).  The drafters provided no explanation of what are “demonstrated criteria.” 

The Board has determined that 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 determine whether the period of exclusion imposed by the IG falls within a “reasonable range.”  Edwin L. Fuentes, DAB No. 2988 at 7-10 (2020); Juan de Leon, Jr., DAB No. 2533 at 4-5 (2013); Craig Richard Wilder, DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000).  The Board explained that, in determining whether a period of exclusion is “unreasonable,” the ALJ is to consider whether such period falls “within a reasonable range.”  Cash, DAB No. 1725 at 17 n.6.  The Board cautions that whether the ALJ thinks the period of exclusion is too long or too short is not the issue. 

The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.  In John (Juan) Urquijo, DAB No. 1735 (2000), the Board concluded that 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 the appropriate extension of the period of exclusion beyond the minimum. 

In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggested that when it is found that an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate.  The Board reasoned that when aggravating factors are considered by the IG as a reason to extend a period of exclusion, some part of the extended period of exclusion should be attributable to each aggravating factor considered.  Because in Katz, the ALJ found one aggravating factor considered by the IG was not proved before the ALJ, the Board concluded that the period of exclusion imposed by the IG was no longer in the reasonable range and reassessed the period of exclusion.  The Board had the opportunity to define the term “reasonable range” and describe how to weigh aggravating and mitigating factors but did not do so.  The Board engaged in weighing the remaining aggravating factors in Katz but did not explain the weighing process in any detail or cite any authority for the process it employed.  Id. at 4-8.  The Board, relying upon a prior Board decision and the preamble to the regulations, stated in a footnote that:  

[A] “reasonable range” refers to a range of exclusion periods that is more limited than the full range authorized by the statute [five years to permanent exclusion under section 1128(a) of the Act] and that is tied to the circumstances of the individual case.  If the ALJ determines that the length of the

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exclusion imposed by the I.G. is within this range under the circumstance as found by the ALJ, he may not change it even if he believes that another exclusion period is more reasonable. 

Id. at 5 n.4.  The Board’s decision in Katz reflects its determination that it is the aggravating and mitigating factors that the Board and an ALJ consider in determining whether a period of exclusion is unreasonable.  The Board’s decision also indicates that the facts and circumstances related to the aggravating factors are what are weighed when determining how each aggravating and mitigating factor affects whether a period of exclusion is unreasonable, i.e., outside the reasonable range.  Clearly, determining a reasonable range is not a simple process of counting the aggravating and mitigating factors, and considerable discretion remains for the Board and the ALJ to engage in the weighing process to decide what is unreasonable, although that weighing is significantly limited by the language of 42 C.F.R. § 1001.2007(a)(1)(ii) and the Board’s prior decisions on how the regulation is to be implemented. 

Petitioner complains in his request for hearing that the IG notice of exclusion (IG Ex. 1) does not explain how the IG weighed the aggravating factors when deciding to extend Petitioner’s exclusion to 14 years.  RFH at 1.  But there is no requirement for the IG to explain how it weighs aggravating and mitigating factors.  The IG determination of the weight given aggravating and mitigating factors is entitled to deference due to the regulatory standard for review adopted by notice and comment rulemaking; by regulation, the issue is whether the period of exclusion is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  Based on this standard, how the IG weighed aggravating and mitigating factors is of no real relevance.  In this case, it has not been shown that the IG considered an aggravating factor that did not exist or failed to consider a mitigating factor that did exist.  Therefore, I have no discretion to decide the period of exclusion was unreasonable or to engage in reassessing the period of exclusion under current Board decisions. 

Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes three aggravating factors and no mitigating factor.  The IG in selecting a 14-year exclusion, did not consider an aggravating factor that did not exist or fail to consider a mitigating factor that did exist based on the undisputed evidence.  IG Ex. 1.  No basis exists for me to reassess the period of exclusion in this case.  I conclude that a period of exclusion of 14 years is within a reasonable range and not unreasonable considering the existence of the three aggravating factors and no mitigating factor. 

Petitioner argues that extending Petitioner’s exclusion beyond five years is an unconstitutional overreach into a state’s power to regulate the practice of medicine.  P.

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Br. at 8-13.  Constitutional challenges are always interesting but virtually never for an ALJ to pass upon.  Petitioner’s argument challenges, on Constitutional grounds, the regulations the Secretary promulgated to carry out Congress’ mandate in section 1128(a) of the Act and possibly the Act itself.  But the law is clear that I have no authority as an ALJ to find invalid or refuse to follow federal statutes or regulations.  42 C.F.R. § 1005.4(c)(1). 

Exclusion is effective 20 days from the date of the IG’s notice of exclusion to Petitioner.  42 C.F.R. § 1001.2002(b). 

III.  Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 14 years effective August 20, 2025.