Conservatory of Hope Treatment Services LLC d/b/a Conservatory of Hope Treatment Homes, ALJ Ruling 2026-14 (HHS CRD March 26, 2026)

RULING DISMISSING PETITIONERS' HEARING REQUEST FOR LACK OF JURISDICTION

The Inspector General of the United States Department of Health and Human Services (IG) excluded Petitioners, Amber Galbraith and Conservatory of Hope Treatment Services LLC d/b/a Conservatory of Hope Treatment Homes, from participation in Medicare, Medicaid, and all other federal health care programs for thirty-five years.  Petitioners challenge the imposition of the exclusion, which was memorialized in a written agreement between the parties1 prior to Petitioners' request for hearing.  The IG argues that I do not have jurisdiction to hear Petitioners' appeal since the IG did not issue

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a notice of exclusion, or in the alternative, that Petitioners knowingly and voluntarily waived their right to appeal the exclusion before an ALJ in this forum.  For the reasons discussed below, I find that I lack the jurisdiction to address this matter and dismiss the hearing request.

I.  Background and Procedural History

Effective December 17, 2024, Petitioners signed an agreement whereby Petitioners agreed to a 35-year exclusion (the Exclusion Agreement) pursuant to section 1128(b)(7) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(b)(7)).  Exclusion Agreement at 1 ("In compromise and settlement of the rights of OIG to exclude the [Petitioners] pursuant to 42 U.S.C. § 1320a-7(b)(7) for the conduct described in Paragraph 2, the [Petitioners] agree[] to be excluded under this statutory provision from Medicare, Medicaid, and all other Federal health care programs, as defined in 42 U.S.C. § 1320a-7b(f), for 35 years.").  The Exclusion Agreement includes in a recital that the IG contends Petitioners engaged in conduct that subjects them to exclusion pursuant to this provision.  Id.  The Petitioners do not admit to any liability in the Exclusion Agreement.  See IG Br. at 5; P. Br. at 2-3.

The Exclusion Agreement states that the intention of the parties is to "effect settlement" to avoid the uncertainty and expense of litigation.  Exclusion Agreement at 1.  The Exclusion Agreement additionally includes the following waiver of rights:

The [Petitioners] shall not contest, in any manner, the terms or provisions of this Agreement, nor shall the [Petitioners] seek any remedy or relief for any matter, cause of action, or claim arising from implementation of this [Exclusion] Agreement.  The [Petitioners] expressly waive[] all procedural rights granted under the OIG's exclusion authority and regulations, section 1128 of the Act, 42 U.S.C. § 1320a-7, and 42 C.F.R. Parts 1001 and 1005, including, but not limited to notice, hearing, and appeal with respect to their exclusion.

Id. at ¶ 7.

The Exclusion Agreement also includes in a separate paragraph an additional waiver:  "[Petitioners] waive any further notice of the exclusion and agree not to contest such exclusion either administratively or in any state or federal court."  Id. at ¶ 4.

On January 10, 2025, within 60 days of signing the Exclusion Agreement and Petitioners' exclusion, Petitioners requested a hearing, and Administrative Law Judge (ALJ) Jacinta Alves was designated to hear and decide this case.  The Civil Remedies Division issued

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her Standing Order on January 14, 2025, as well as an acknowledgment letter notifying the parties that a telephonic pre-hearing conference had been scheduled in this matter.

ALJ Alves conducted the pre-hearing telephone conference on February 26, 2025, the substance of which is memorialized in a February 28, 2025 Order (Summary Order), including a schedule for submission of initial arguments and evidence by the parties as to the impact of the Exclusion Agreement, if any, on my jurisdiction to conduct a hearing in this case.  The IG submitted a brief (IG Br.) and Petitioners submitted a brief (P. Br.) addressing this threshold issue.

This case was transferred to me on January 21, 2026 as a result of ALJ Alves's departure from the agency.

II.  Issues

The hearing request raises the following two issues:  (1) whether I have jurisdiction to hear Petitioners' challenge where the IG excluded Petitioners without issuing a notice of exclusion2, and, if so, (2) whether Petitioners effectively waived my jurisdiction by entering into the Exclusion Agreement with the IG which states that Petitioners waived, e.g., all procedural rights granted under 42 U.S.C. § 1320a-7 and 42 C.F.R. Parts 1001 and 1005 including notice, hearing, and appeal.

III.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioners' right to a hearing by an ALJ and judicial review of the final action of the Secretary:  "any individual or entity that is excluded (or directed to be excluded) from participation under this section is entitled to reasonable notice and opportunity for a hearing. . . ."  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2.

Pursuant to section 1128(b)(7) of the Act, the Secretary may exclude from participation in any federal health care program any individual or entity that the Secretary determines has committed an act which is described in section 1128A, 1128B, or 1129.  See also 42 C.F.R. §§ 1001.901, 1001.951.  Specific to exclusions pursuant to section 1128(b)(7) of the Act, the excluded individual or entity "shall be entitled to a hearing by an [ALJ] on the determination under subsection (b)(7) before any exclusion based upon the

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determination takes effect," unless "the Secretary determines that the health or safety of individuals receiving services warrants the exclusion taking effect earlier."  42 U.S.C. § 1320a-7(f)(2).

Except as provided in 42 C.F.R. § 1001.2003, the Secretary of Health and Human Services (the Secretary) has by regulation limited my scope of review to two issues in exclusion matters:  (1) whether the IG has a basis for excluding Petitioners from participating in Medicare, Medicaid, and all other federal health care programs; and, if so, (2) whether the length of the exclusion the IG imposed is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1).

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

1. I do not have jurisdiction to review the terms of the exclusion because Petitioners explicitly waived their right to appeal.

The authority of an ALJ hearing exclusion challenges is limited by regulation to specifically enumerated issues.  See 42 C.F.R. §§ 1001.2007(a)(1) and 2003.  I have the authority to decide whether the IG has a basis for excluding Petitioners from participating in Medicare, Medicaid, and all other federal health care programs; and, if so, whether the length of the exclusion the IG imposed is unreasonable.

The IG argues that "this Court [ ] lack[s] jurisdiction to hear Petitioners' appeal because Petitioners knowingly and voluntarily waived their right to appeal the negotiated exclusion in paragraphs four and seven of the [Exclusion] Agreement."  IG Br. at 5; see also IG Br. at 6-7.

Petitioners, on the other hand, attack the validity of the exclusion agreement itself arguing that despite any language contained therein to the contrary, they did not sign the agreement "voluntarily or knowingly, due to coercion, intimidation, and material omission of due process rights by the Office of Inspector General (OIG)."  P. Br. at 1-2.  The settlement agreement lays out the requirements of a notice of exclusion consistent with 42 C.F.R. § 1001.2002.  The settlement agreement also clearly states the terms of the exclusion, the parties' agreements, and explains that Petitioners were giving up their appeal rights.  Further, Petitioners did not submit any evidence to support their allegations that the settlement agreement was entered into involuntarily or under duress.

As a result, I find that Petitioners executed a settlement agreement that unambiguously laid out the terms of the exclusion and the waiver of their appeal rights.  I further find that I have no jurisdiction or authority to address the exclusion because Petitioners waived their right to appeal the exclusion.

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Because Petitioners waived their appeal rights, I find that I lack the jurisdiction to address this matter and dismiss the hearing request.  See 42 C.F.R. § 1005.2(e)(3).