Darla Byus, DAB CR6898 (2026)

DECISION

Respondent, the Inspector General for the U.S. Department of Health and Human Services (the IG), excluded Petitioner, Darla Byus, from participation in Medicare, Medicaid, and all other federal health care programs for 20 years pursuant to section 1128(a)(1) of the Social Security Act (Act).  42 U.S.C. § 1320a-7(a)(1).  Petitioner challenges the length of her exclusion before me.  For the reasons stated below, I affirm the IG’s exclusion action and find the 20-year exclusion period selected by the IG not unreasonable.

I.  Case Background and Procedural History

On April 30, 2025, the IG notified Petitioner of her exclusion, effective in 20 days, from participation in Medicare, Medicaid, and all federal health programs under section 1128(a)(1) of the Act for at least 20 years.  IG Ex. 1 at 1.  The IG explained he took this action based on Petitioner’s conviction in the U.S. District Court for District of Oregon (District Court) for a criminal offense related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or

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administrative services relating to the delivery of such items or services.  Id.  The IG cited four aggravating factors to justify extending Petitioner’s exclusion period beyond the minimum period of five years:

(1) the acts that resulted in the conviction, or similar acts, caused or were intended to cause, a financial loss of $50,000 or more;
(2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;
(3) the sentence imposed included incarceration; and
(4) the individual was convicted for other offenses besides those that formed the basis for exclusion.

Id. 

Petitioner timely sought review by an administrative law judge (ALJ) in the Civil Remedies Division, resulting in the designation of the Honorable Jacinta Alves to hear and decide this case.  On July 18, 2025, the Civil Remedies Division acknowledged receipt of Petitioner’s hearing request and provided her copies of Judge Alves’s Standing Order and the Civil Remedies Division Procedures.  On September 30, 2025, Judge Alves held a pre-hearing conference by telephone with the parties, the substance of which is set forth in her Order and Schedule for Filing Briefs and Documentary Evidence (Summary Order), issued on October 7, 2025.

Judge Alves directed the parties to file pre-hearing briefs and identify witnesses and exhibits in support of their arguments in a manner consistent with her Standing Order.  Summary Order at 2-3; Standing Order at 3-5.  Owing to Petitioner’s incarcerated state, Judge Alves waived her obligation to use the DAB E-file system and set forth parameters for her to submit her pre-hearing exchange in writing and for written service to Petitioner by the IG.  Summary Order at 3.  The IG filed a brief (IG Br.) and nine proposed exhibits (IG Exs. 1-9), while Petitioner filed a brief (P. Br.) that incorporates two proposed exhibits (P. Exs. 1-2).  After the parties submitted their pre-hearing exchanges, I was designated to hear and decide this case due to Judge Alves’s unavailability.

II.  Admission of Exhibits and Decision on the Record

Neither party objected to the opposing party’s proposed exhibits.  I therefore enter IG Exhibits 1 through 9 and Petitioner Exhibits 1 and 2 into the record.  Neither party requested an in-person hearing.  IG Br. at 10; P. Br.  Accordingly, I decide this case on the parties’ briefs and the exhibits of record.  Civ. Remedies Div. P. § 19(d).

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III.  Issues

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and if so, whether the 20-year exclusion period selected by the IG is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1).

IV.  Jurisdiction

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

V.  Applicable Law

The Secretary of Health and Human Services must exclude1 from participation in Medicare, Medicaid, and all other federal health care programs “[a]ny 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.”  42 U.S.C. § 1320a-7(a)(1); 42 C.F.R. § 1001.101(a).

An individual has been “convicted” of a criminal offense within the meaning of the Act 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.  42 U.S.C. § 1320a-7(i).  The Act does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

The Act requires a minimum exclusion period of five years for exclusions imposed under section 1128(a) of the Act.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).2  Exclusion is effective 20 days from the date of the notice of exclusion.  42 U.S.C. § 1320a-7(c)(1); 42 C.F.R. § 1001.2002(b).  The IG extends the period of exclusion

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based on the presence of specified aggravating factors.3  42 C.F.R. § 1001.102(b).  If the IG applies aggravating factors to extend an exclusion period beyond five years, the regulations identify specific mitigating factors he considers to reduce the period of exclusion.  42 C.F.R. § 1001.102(c).

The Act provides excluded individuals the right to an administrative hearing and then judicial review of the Secretary’s final action.  42 U.S.C. § 1320a-7(f)(1), incorporating by reference 42 U.S.C. § 405(b)(1), (g).  The Secretary’s regulations implement the right to a hearing before an ALJ at 42 C.F.R. §§ 1001.2007(a) and 1005.2.  The rights of both the sanctioned party and the IG to participate in a hearing are set forth at 42 C.F.R. § 1005.3.  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 as to affirmative defenses or mitigating factors, while the IG bears the burden on all other issues.  42 C.F.R. §§ 1001.2007(c), 1005.15(b), (c).

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, while the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(b).

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

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

A.  The IG has established a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act.

Section 1128(a)(1) of the Act mandates exclusion from participation in Medicare, Medicaid, and all federal health care programs where an individual has been convicted, under federal or State law, 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); 42 C.F.R. § 1001.101(a).  Petitioner does not challenge the propriety of her exclusion but disputes its length as unreasonable.  P. Ex. 1 at 1, 4.  Nevertheless, to provide necessary

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context for my analysis, I address the factual bases for exclusion the IG must establish by a preponderance of the evidence.

1.  Relevant Facts

Petitioner was a certified addiction counselor who operated Choices Recovery Services.  IG Ex. 2 at 1.  On May 13, 2024, the U.S. Attorney for the District of Oregon charged Petitioner with one count of Health Care Fraud, one count of Aggravated Identity Theft, and one count of Making and Subscribing a False Tax Return.  IG Ex. 3 at 5-6.  On June 12, 2024, Petitioner executed a written agreement with the government pleading guilty to those charges.  IG Ex. 7.

Petitioner stipulated to certain facts in her plea agreement.  She admitted that from approximately January 2, 2019 to August 31, 2021, she used her business to fraudulently bill Oregon’s Medicaid program (OHA) for at least $1,582,877 in services never rendered.  Id. at 3.  Petitioner admitted she stole the identities of at least 45 individuals to make fraudulent healthcare related claims to OHA.  Id.  She identified individuals recently arrested for drug- or alcohol-related offenses and used OHA’s online system to determine whether they were Medicaid recipients.  Id.  Petitioner then submitted fraudulent back-dated claims to OHA for counseling services she or her company never provided to those individuals.  Id.  Petitioner estimated she submitted at least $3,000,000 in fraudulent claims to OHA for services never provided.  Id. at 4.  Petitioner also admitted that from 2016 to 2020, she underreported her income by at least $1,300,000, filed false tax returns in 2016 and 2017, and filed no tax returns at all from 2018 to 2020.  Id. at 5.  Petitioner agreed to repay $1,582,877 in restitution to OHA and $450,438 to the Internal Revenue Service (IRS).  Id. at 8.

The District Court entered an order accepting Petitioner’s guilty plea to the three-count information against her on June 20, 2024.  IG Ex. 5 at 16.  On September 26, 2024, the District Court entered judgment against Petitioner.  IG Ex. 8 at 1.  The District Court sentenced Petitioner to 48 months’ incarceration and ordered her to pay $1,582,877 in restitution to OHA and $450,438 to the IRS.  Id. at 2, 7.

2.  Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.

Petitioner appears to concede her conviction of a criminal offense within the meaning of the Act.  P. Ex. 1 at 1.  The evidence of record confirms Petitioner executed a plea agreement with the United States to resolve the criminal charges against her.  IG Exs. 3, 7.  The District Court accepted Petitioner’s guilty plea and entered judgment of conviction against her.  IG Exs. 5, 8.  The IG has established Petitioner was convicted of a criminal offense within the meaning of the Act.  42 U.S.C. § 1320a-7(i)(1); 42 C.F.R. § 1001.2.

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3.  Petitioner’s criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.

Petitioner does not specifically contest the relatedness of her offense of conviction to the delivery of an item or service under Medicare or a state health care program; the record confirms doing so would be futile.  Petitioner pleaded guilty to one count of Health Care Fraud.  IG Ex. 3 at 5; IG Ex. 5 at 10-11; IG Ex. 7 at 3-4.  The primary victim of her fraud scheme was Oregon’s Medicaid program.  IG Ex. 7 at 3-4, 8; IG Ex. 8 at 7.  On its face, Petitioner’s conviction for submitting fraudulent claims for addiction counseling to a state Medicaid program for services never rendered to that program’s beneficiaries amply demonstrates the nexus between Petitioner’s criminal offense conduct and a covered healthcare program necessary to warrant exclusion.

That connection is reinforced by the District Court’s order requiring Petitioner to pay restitution to OHA, a state Medicaid program.  IG Ex. 8 at 7.  Payment of restitution to a covered healthcare program for losses resulting from criminal conduct demonstrates the nexus between the offense of conviction and the delivery of an item or service to that program.  Summit S. Shah, M.D., DAB No. 2836 at 8-9 (2017) (quoting Berton Siegel, D.O., DAB No. 1467 at 6-7 (1994) (“[A] criminal offense resulting in financial loss to a State Medicaid program is ‘related to’ the delivery of items or services under that Medicaid program because it results ‘in less funds being available to pay for covered services’ delivered to Medicaid patients.”).  These facts establish the requisite “common sense” connection between Petitioner’s offense of conviction and the delivery of services to a state Medicaid program.

B.  Petitioner must be excluded for a minimum period of five years.

Because I have concluded a basis exists to exclude Petitioner pursuant to section 1128(a)(1) of the Act, she must be excluded for at least five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).

C.  The IG has established four aggravating factors to increase Petitioner’s exclusion period beyond the five-year statutory minimum.

The regulations establish aggravating factors the IG considers to increase the exclusion period beyond five years.  42 C.F.R. § 1001.102(b).  In this case, the IG identified four aggravating factors to warrant increasing Petitioner’s exclusion to at least 20 years.  IG Ex. 1 at 1.  The IG has established a valid basis to apply these aggravating factors to increase Petitioner’s period of exclusion.

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1.  The IG established financial loss to a government program of $50,000 or more, as required by 42 C.F.R. § 1001.102(b)(1).

In the plea agreement she executed to resolve the criminal action against her, Petitioner admitted she received at least $1,582,877 for the fraudulent claims she made to OHA.  IG Ex. 5 at 11; IG Ex. 7 at 8.  The District Court ordered her to pay restitution in this amount to OHA, a state Medicaid program.  IG Ex. 8 at 8.  Restitution is an appropriate measure to demonstrate program loss.  See Shah, DAB No. 2836 at 8.  The IG has established Petitioner was responsible for considerably more than $50,000 in loss to a state Medicaid program.

2.  The IG established that Petitioner’s conviction arose from acts that lasted for a period of one year or more, as required by 42 C.F.R. § 1001.102(b)(2).

In her plea agreement with the government, Petitioner admitted she submitted fraudulent claims to OHA from approximately January 2, 2019 to August 31, 2021.  IG Ex. 5 at 11; IG Ex. 7 at 3.  Before me, Petitioner asserts this timeframe is incorrect because it refers to the period the services she never provided allegedly occurred, not the period during which she submitted fraudulent claims.  P. Ex. 1 at 2.  But Petitioner goes on to admit she fraudulently billed OHA from October or November 2019 to August 2021.  Id.  Even if Petitioner were permitted to attack the underlying facts that establish her conviction, she still admits her acts resulting in conviction lasted for a period of one year or more.  The IG has established a basis to apply this aggravating factor.

3.  The IG established Petitioner was incarcerated as part of her sentence as required by 42 C.F.R. § 1001.102(b)(5).

The District Court imposed a sentence of 48 months’ incarceration for Petitioner’s admitted criminal conduct.  IG Ex. 8 at 2.  The IG has established this aggravating factor.

4.  The IG established Petitioner was convicted for other offenses besides those that formed the basis for exclusion as required by 42 C.F.R. § 1001.102(b)(8).

The District Court imposed judgment of conviction on all three counts of the information to which Petitioner pleaded.  IG Ex. 8 at 1; see IG Ex. 3 at 5-6; IG Ex. 7 at 3-4.  The second offense to which Petitioner pleaded is Aggravated Identity Theft.  See id.  Although the conduct underlying this offense was necessary to the commission of the offense of exclusion, Health Care Fraud, the IG did not cite Petitioner’s identity theft conviction as a basis to exclude Petitioner.  See IG Ex. 1 at 1.  The IG has established this aggravating factor.

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D.  Petitioner has not demonstrated the existence of a mitigating factor recognized by the Secretary’s regulations.

The IG did not apply one of the three mitigating factors recognized by the Secretary’s regulations in this case.  See 42 C.F.R. § 1001.102(c).  Petitioner does not appear to assert such a mitigating factor is present to warrant reduction of her exclusion period.  P. Br.; P. Ex. 1.  Petitioner has not established a mitigating factor recognized by the Secretary’s regulations the IG could have applied here.

E.  I cannot say a 20-year exclusion period is not reasonable.

Under the Act’s implementing regulations, an excluded individual may seek a hearing before an ALJ to determine whether the length of an exclusion period increased by the IG beyond five years is “unreasonable.”  42 C.F.R. § 1001.2007(a)(1)(ii).  The drafters of this regulation explained:

[s]o long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule.  We believe that the deference § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities. 

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

The Board similarly stated ALJs may not substitute their own judgment for that of the IG in determining a reasonable exclusion period.  Richard E. Bohner, DAB No. 2638 at 2 (2015) (citations omitted), aff’d, Bohner v. Burwell, No. 15-cv-4088, 2016 WL 8716339 (E.D. Pa. Dec. 2, 2016).  The Board reasoned it appropriate to defer to the IG’s selection owing to his extensive experience in exclusion and because exclusion actions are, according to the Board, remedial and non-punitive in nature.  Id. at 9.  ALJs should therefore only review “whether the facts as proven show the resulting period to be not unreasonable.”  Edwin L. Fuentes, DAB No. 2988 at 9 (2020); see also Craig Richard Wilder, DAB No. 2416 at 8 (2011).

To do so, I consider both aggravating and mitigating factors, if any.  42 C.F.R. § 1001.102(b), (c).  The quality of the aggravating or mitigating factors is of greater significance than the mere number of the factors present in a given case.  The preamble to the final rule publishing the exclusion regulations provides:

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must

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

57 Fed. Reg. at 3314-15.

In qualitatively assessing the IG’s application of aggravating and mitigating factors, I may not consider how the IG weighed those factors in other exclusion actions.  Eugene Goldman, M.D., DAB No. 2635 at 11 (2015) (characterizing the selection of an exclusion period to be so uniquely case-specific that even comparing the IG’s selection in other similarly situated cases is “of limited value” and “not dispositive on the question of reasonableness of an exclusion period in a given case.”).  Moreover, the IG has no obligation to articulate his reasoning for the period of exclusion he does select.  The Board has instead held ALJs may not “intrude on the [IG’s] internal decision-making process” in selecting a proposed exclusion period.  Fuentes, DAB No. 2988 at 10-11.

In sum, the Act’s implementing regulations permit an excluded individual to challenge whether the IG’s selection of an exclusion period beyond five years is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  But the IG need not articulate the method, if any, by which he selected the prolonged period.  He need not explain the weight he gave to aggravating or mitigating factors to increase or reduce the prolonged period.  Neither I nor the excluded party may inquire into how the IG arrived at the period of increased exclusion.  Nor may I consider similar exclusion actions.  I must instead defer to the IG’s “vast experience” in excluding individuals.  57 Fed. Reg. at 3321.

It is difficult to imagine a circumstance where, if the IG correctly identifies applicable aggravating and mitigating factors, any ALJ could find any exclusion period selected by the IG in any exclusion action anything but “not unreasonable.”4  This interpretation of

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the regulations is arguably inconsistent with the Act, which affords excluded individuals the same right to a determination articulating the reasons for an adverse outcome enjoyed by Social Security disability claimants.  42 U.S.C. § 1320a-7(f)(1), incorporating by reference 42 U.S.C. § 405(b)(1) (requiring any wholly or partially unfavorable determination include “the reason or reasons upon which it is based.”).

This cramped reading of what evidence or explanation the IG must provide to justify an increased exclusion period stunts my ability to provide meaningful review or explain why, beyond a broad qualitative sense, an exclusion period is or is not unreasonable.  This approach may vitiate the right to impartial adjudication Congress intends ALJs to provide under the auspices of the Administrative Procedures Act.  See 5 U.S.C. § 557(c)(3)(A) (requiring ALJ decisions to include “findings and conclusions, and the reasons or basis therefor, on all material issues of fact, law, or discretion presented on the record[.]”) (emphasis added).

As such, it is possible a reviewing court could find a regulatory regime that allows the IG essentially unfettered authority to extend periods of exclusion without meaningful explanation arbitrary and capricious, either on its face or in application.  Until that time, however, I apply the regulations and applicable Board case law to assess, as best I can, the exclusion period selected by the IG.  Doing so, I am unable to find the 20-year period of exclusion selected by the IG unreasonable.

Petitioner’s criminal conduct resulted in a remarkable loss to Oregon’s Medicaid program – over $1.5 million.  IG Ex. 8 at 8.  The Board has observed it “entirely reasonable” to give significant weight to loss amounts substantially larger than the minimum regulatory threshold.  Laura Leyva, DAB No. 2704 at 9-10 (2016) (citations omitted).  The loss Petitioner caused is approximately 30 times the regulatory minimum of $50,000 for program loss to be considered an aggravating factor.  42 C.F.R. § 1001.102(b)(1).  Petitioner’s capacity to bilk a safety net program to this extent reflects a profound level of untrustworthiness to participate as a biller to that program.  Hussein Awada, M.D., DAB No. 2788 at 7 (2017) (“[t]he millions of dollars in losses that Petitioner’s actions caused . . . merits a substantial increase in the length of his exclusion beyond the minimum period”).

The duration of Petitioner’s criminal offense conduct does not suggest the 20-year exclusion period selected by the IG to be unreasonable.  Petitioner intentionally defrauded Oregon’s Medicaid program for approximately two years.  IG Ex. 7 at 3; P. Ex. 1 at 2.  Petitioner identified potential beneficiaries with drug or alcohol addiction issues and submitted fraudulent claims on their behalf to receive payments for services she never rendered.  Her criminal persistence reflects a sustained lack of integrity, not a

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momentary lapse of judgment.  Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003) (“The purpose of the aggravating factor is to distinguish . . . petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period . . . .”).  The IG properly gave this aggravating factor significant weight in determining Petitioner’s period of exclusion.

The seriousness of Petitioner’s offense is reflected by the District Court’s determination to subject Petitioner, an addiction counselor who pleaded guilty to a non-violent offense, to 48 months of incarceration.  IG Ex. 8 at 2.  A sentence of incarceration is a “reasonable proxy . . . for untrustworthiness in the context of deciding how much weight to give the aggravating factor for incarceration.”  Eugene Goldman, M.D., DAB No. 2635 at 5 (2015).  The IG appropriately determined that the sentence of incarceration imposed here reflected a level of untrustworthiness demanding a significant period of exclusion.

In response, Petitioner attacks the constitutionality of the IG’s exclusion action, asserting the Secretary’s regulations impermissibly provide the IG broader authority to increase periods of exclusion than authorized by the Act.  P. Br. at 1, citing Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).  I have no authority to overturn regulations and thus cannot address this claim.  However, Petitioner’s constitutional argument is preserved for review by a court of competent jurisdiction if she chooses to continue her appeal.

Petitioner otherwise contends a 20-year exclusion is unreasonable because her criminal conduct did not cause harm to patients or cause them personal financial loss.  P. Ex. 1 at 1-2.  She characterizes the tax return fraud charge against her as trumped up and improper.  Id. at 2-3.  Petitioner states she has no wish to bill the Medicaid program as a provider but seeks only the limited means to secure compensation to act as a caregiver for her disabled son.  Id. at 6.

I am sympathetic to Petitioner’s desire to provide necessary caregiving services for her disabled child upon her release and fully credit her good intentions in that regard.  But in that capacity, contrary to her claim, she would be a biller to the Medicaid program.  And the IG has amply demonstrated why she cannot be trusted to do so.  Petitioner conspired to submit false and fraudulent claims for counseling services to her state’s safety-net program for the impoverished.  She caused over $1.5 million in loss to that program in only two years.  Petitioner claims the individuals she targeted for use in her scheme suffered no personal harm or financial loss but does not appear to recognize the generalized harm siphoning over a million dollars out of Oregon’s Medicaid program might cause to that program or its beneficiaries.

Petitioner’s scheme was predicated to at least some degree on identifying arrested drug and alcohol offenders for whom she could plausibly submit back-dated claims for services she never rendered or intended to provide.  It is difficult to characterize this as

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anything but cynical.  I cannot say excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for 20 years is unreasonable.

VII.  Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for a period of at least 20 years.