Bryant Pryor, DAB No. 3165 (2024)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

The Inspector General (I.G.) appeals the July 10, 2024 decision by an Administrative Law Judge (ALJ).  Bryant Pryor, DAB CR6502 (2024) (ALJ Decision).  The ALJ affirmed the I.G.’s determination to exclude Bryant Pryor (Petitioner) from participation in all federal health care programs pursuant to section 1128(a)(4) of the Social Security Act (Act).  The ALJ also found that the I.G. had established the presence of two aggravating factors in the implementing regulations and that Petitioner had established one mitigating factor.  The ALJ then determined that excluding Petitioner for eight years was unreasonable and reduced the exclusion period to seven years.

For the reasons discussed below, we affirm the ALJ’s decision in part and reverse in part.  We affirm the ALJ’s conclusion that the I.G. had a lawful basis to exclude Petitioner under section 1128(a)(4) of the Act.  We also affirm the ALJ’s conclusions that the I.G. established the two aggravating factors in 42 C.F.R. § 1001.102(b)(5) and (b)(9) and that Petitioner established the mitigating factor in 42 C.F.R. § 1001.102(c)(3).  However, we reverse as legally erroneous the ALJ’s analysis concerning the mitigating factor in 42 C.F.R. § 1001.102(c)(3) and the ALJ’s resulting determination to reduce the length of Petitioner’s exclusion from eight years to seven years.  We determine that an eight-year exclusion period is reasonable and reinstate that period as imposed by the I.G.

Legal Background

Section 1128(a) of the Act mandates the exclusion of individuals who have been convicted of certain types of criminal offenses from participating in all federal health care programs.  Act § 1128(a)(1)-(4).  As relevant here, section 1128(a)(4) mandates the exclusion of an individual who has been convicted of a felony offense “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Act § 1128(a)(4) (42 U.S.C. § 1320a-7(a)(4)); see also 42 C.F.R. § 1001.101(d).¹  The

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term “convicted” includes, among other things, when a court accepts an individual’s guilty plea or enters a judgment of conviction.  42 C.F.R. § 1001.2 (defining “Convicted”).

The mandatory minimum period of an exclusion imposed under section 1128(a) is five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  The I.G. may extend the exclusion period beyond the statutory minimum if any of the aggravating factors provided in the regulations apply, including, as relevant here:

(5) The sentence imposed by the court included incarceration;

*        *        *        *

(9) The individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.

42 C.F.R. § 1001.102(b)(5), (9); id. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion[.]”).  An exclusion period that has been extended beyond the five-year minimum based on aggravating factors may be reduced by application of one or more of three mitigating factors also specified in the regulation, but not to below five years.  Id. § 1001.102(c).  Relevant here, the exclusion period may be reduced if an individual’s cooperation with federal or state officials resulted in “others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs[.]”  Id. § 1001.102(c)(3).

If the I.G. determines exclusion is warranted, the I.G. will send written notice to the excluded individual or entity identifying, among other things, the basis for the exclusion, the length of the exclusion, and the factors, if any, that the I.G. considered in determining the length of the exclusion period.  Id. § 1001.2002(a), (c).

An excluded individual may request a hearing before an ALJ, but only on the issues of: (i) whether the I.G. had a basis for the exclusion; and (ii) whether an exclusion longer than the required minimum period is “unreasonable.”  Id. §§ 1001.2007(a)(1), 1005.2(a).

The ALJ issues an “initial decision” based on the record developed before the ALJ.  Id. § 1005.20(a).  A party dissatisfied with an ALJ decision may appeal the decision to the

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Board.  Id. § 1005.21(a).  The Board may, among other actions, affirm, reverse, or remand any exclusion determined by the ALJ.  Id. § 1005.21(g).

Case Background ²

Petitioner is a physician who was licensed to practice medicine in Texas.  I.G. Ex. 3, at 4 (Superseding Indictment).  Petitioner was the Medical Director of a pain management clinic in Houston, Texas.  Id.

On October 2, 2018, Petitioner pleaded guilty to one felony count of Conspiracy to Distribute and Dispense Controlled Substances in violation of 21 U.S.C. § 846.  I.G. Ex. 4, at 1 (Plea Agreement).  Petitioner pleaded guilty to Count One of a Superseding Indictment charging that from around December 2016, through around July 2017, Petitioner and other co-defendants:

[D]id knowingly and intentionally combine, conspire, confederate, and agree with each other and with others known and unknown to . . . unlawfully distribute and dispense, mixtures and substances containing a detectable amount of Schedule II controlled substances, including hydrocodone and oxycodone, not for a legitimate medical purpose and outside the scope of professional practice.

I.G. Ex. 3, at 6.  The Superseding Indictment alleged that Petitioner and three co-conspirators used Petitioner’s status as a licensed physician, his Drug Enforcement Administration registration number, and his medical practice to knowingly prescribe hydrocodone and oxycodone outside the course of professional practice and not for a legitimate medical purpose.  Id. at 7.  Petitioner signed blank prescriptions for Schedule II controlled substances and left the prescriptions at his medical practice for his co-conspirators to complete with patient names and the amount and type of controlled substances.  Id.  Petitioner’s co-conspirators then purported to treat Petitioner’s patients and recommend that the patients receive the controlled substances, knowing that Petitioner would use these purported treatments and recommendations to justify the prescription of controlled substances outside the course of professional practice and not for a legitimate medical purpose.  Id. at 8.  Petitioner and his co-conspirators received approximately $1.1 million dollars from the conspiracy.  Id.

On October 19, 2018, Petitioner voluntarily surrendered his medical license in lieu of further disciplinary proceedings before the Texas Health and Human Services Commission (THHSC) Office of Inspector General.  P. ALJ Br. at 2; I.G. Ex. 6, at 1

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(Texas Health and Human Services Commission Exclusion Notice); I.G. Ex. 7, at 1 (Texas Medical Board Order).  By letter dated June 18, 2019, the THHSC Office of Inspector General excluded Petitioner from the Texas Medicaid program and other federally funded health care programs in Texas.  I.G. Ex. 6, at 1.

The United States District Court for the Southern District of Texas accepted Petitioner’s guilty plea to Conspiracy to Distribute and Dispense Controlled Substances on November 17, 2022.  I.G. Ex. 5, at 1 (Judgment).  The District Court sentenced Petitioner to 36 months of imprisonment and three years of supervised release upon release from imprisonment.  Id. at 2, 3.  The District Court also ordered Petitioner to pay a $30,000 fine and a $100 assessment.  Id. at 5.

On September 29, 2023, the I.G. notified Petitioner of the exclusion from participation in Medicare, Medicaid, and all federal health care programs for 10 years under section 1128(a)(4) of the Act, based on Petitioner’s felony conviction.  I.G. Ex. 1, at 1 (Notice Letter).  The I.G. extended the period of exclusion beyond the statutory five-year minimum based on two aggravating factors:  the District Court sentenced Petitioner to 36 months of incarceration; and the THHSC Office of Inspector General excluded Petitioner when he surrendered his medical license in lieu of further disciplinary proceedings after pleading guilty to Conspiracy to Distribute and Dispense Controlled Substances.  Id.; see 42 C.F.R. § 1001.102(b)(5), (9).

ALJ Proceedings and Decision

Petitioner timely requested an ALJ hearing.  ALJ Decision at 3.  After a pre-hearing conference, the parties exchanged pre-hearing briefs and exhibits.  Id.  Petitioner did not dispute that the I.G. had a basis to exclude him under section 1128(a)(4).  P. ALJ Br. at 1-2.  Rather, Petitioner argued that the 10-year exclusion period was unreasonable and should be shortened based on the existence of a mitigating factor.  Id. at 2.  Petitioner explained that as part of his plea agreement, he “agreed to help the Government secure a conviction against [a co-conspirator]” and that as a result, the United States Attorney had filed a Motion for a 5K1.1 Downward Departure requesting a 35 percent reduction of Petitioner’s sentence.³  Id. at 3; P. Ex. 1.  Petitioner asserted that given the applicable aggravating and mitigating factors, a five-year exclusion period is appropriate.  P. ALJ Br. at 3.

On April 24, 2024, the I.G. issued an amended exclusion notice reducing the length of Petitioner’s exclusion from 10 years to eight years.  I.G. Ex. 8 (Amended Notice Letter).  The I.G. reduced the exclusion length because the I.G. applied the mitigating factor at

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42 C.F.R. § 1001.102(c)(3) to account for Petitioner’s cooperation with federal officials.  Id.

Neither party objected to the other’s proposed exhibits, and the ALJ admitted the parties’ exhibits (I.G. Exs. 1-8, P. Ex. 1, and P. Declaration (Decl.)) into evidence.  ALJ Decision at 4.  The ALJ decided the case on the written record because Petitioner’s testimony in his written declaration – the only testimonial evidence submitted to the ALJ – is undisputed, and Petitioner had not proposed any other witnesses.  Id. (citing Civ. Remedies Div. P. § 19(d)).

The ALJ affirmed the exclusion and the presence of two aggravating factors and one mitigating factor but determined that the eight-year exclusion is unreasonable and “reduce[d] the exclusionary period to 7 years.”  ALJ Decision at 5-11.  The ALJ concluded that the I.G. established a basis for Petitioner’s exclusion under section 1128(a)(4) of the Act because Petitioner was convicted of a felony criminal offense related to the unlawful distribution, prescription, and dispensing of a controlled substance.  Id. at 5-6 (citing I.G. Exs. 4-5; P. Decl.).  The ALJ further concluded that because a basis existed to exclude Petitioner under section 1128(a)(4), “he must be excluded for a minimum of five years.”  Id. at 6.

The ALJ next concluded that the I.G. established two aggravating factors permitting an increase of the exclusion period beyond the five-year statutory minimum:  “Petitioner’s sentence included a period of incarceration” and “Petitioner has been the subject of another adverse action by a state government agency based on the same set of circumstances that serves as the basis for the imposition of the exclusion.”  Id. at 7-8.  The ALJ noted the District Court sentenced Petitioner to 36 months of incarceration and three years of supervised release.  Id. at 7 (citing I.G. Ex. 5, at 2-3).  The ALJ also noted that the THHSC’s decision to exclude Petitioner from the Texas Medicaid program and all other federally funded Texas health care programs falls within the definition of an adverse action by a state government agency based on the same set of circumstances that serves as the basis for the I.G.’s exclusion.  Id. at 7-8 (citing I.G. Ex. 6, at 1; I.G. Ex. 7, at 1).

The ALJ also found that Petitioner established the mitigating factor at 42 C.F.R. § 1001.102(c)(3) because Petitioner put forth evidence that his assistance to the government resulted in a co-conspirator’s conviction.  Id. at 8-9.  The ALJ pointed to the United States’ Motion for a 5K1.1 Downward Departure, which stated that Petitioner provided “substantial” assistance to federal officials resulting in a co-defendant’s conviction.  Id. at 9 (citing P. Ex. 1, at 2-4).

The ALJ further concluded, however, that “given the specific facts pertaining to the applicable mitigating factor, an eight-year exclusion period is unreasonable. . . .”  Id.  The ALJ explained that “aside from a cursory recitation that there are two aggravating factors

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and one mitigating factor, the IG provides no justification for her determination that an 8-year exclusionary period is appropriate.”  Id.  The ALJ stated that the Board has granted proportional, and often significant, reductions in exclusion periods to petitioners who successfully demonstrate that their substantial cooperation with federal or state officials resulted in others being convicted or excluded, even when the I.G. has already considered the mitigating factor of cooperation.  Id.  The ALJ cited only Craig Richard Wilder, where the Board reduced the petitioner’s exclusion from 35 to 18 years based on the “extraordinary” nature of the assistance petitioner provided to state law enforcement officials.  Id. at 10-11 (citing Craig Richard Wilder, DAB No. 2416, at 1 (2011)).  The ALJ, finding that Petitioner provided “significant cooperation” in this case, reduced the exclusionary period from eight to seven years.  Id. at 11.

The ALJ also noted that ALJs do not have the authority to amend the effective date of Petitioner’s exclusion and are bound by the regulation that sets the effective date as 20 days from the date of the exclusion notice.  Id. at 11 n.3 (citing 42 C.F.R. §§ 1001.2002(b), 1005.4(c)(1)).

The I.G. timely requested Board review of the ALJ Decision.

Board Proceedings and the Parties’ Arguments

On August 9, 2024, the I.G. filed a notice of appeal and accompanying brief.⁴  The I.G. argues that the ALJ’s finding, that the reduction in Petitioner’s sentence due to his cooperation warrants a proportional reduction in his exclusion period, is “inconsistent with the applicable regulations and longstanding Board precedent.”  I.G. Br. at 6-7.  The I.G. further asserts that where, as here, the I.G. determined that eight years was an appropriate exclusion period based on a qualitative assessment of the case-specific circumstances surrounding the two aggravating factors and one mitigating factor, the ALJ had no authority to change that period based on a belief that “a seven-year term of exclusion would have been ‘better.’”  Id. at 9-10 (citing Wilder at 8).  The I.G. thus argues that the ALJ erred in holding that the eight-year exclusion period is unreasonable and asks the Board to reverse the ALJ’s decision to reduce the exclusion period to seven years.  Id. at 15.

The Board’s acknowledgment letter directed that within 30 days after receipt of the I.G.’s notice of appeal, Petitioner may submit a response brief.  Petitioner did not submit a response to the I.G.’s notice of appeal, by the deadline, September 16, 2024.  On October 8, 2024, the Board issued an Order to Show Cause directing Petitioner to show cause why the Board should not close the record and proceed to decision.  The Order to Show Cause also stated that if Petitioner wished to file a response brief, Petitioner must submit a

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response brief and an explanation for why he did not timely file the brief.  Petitioner did not respond to the Order to Show Cause or file a response brief.⁵

Standard of Review

The Board reviews a disputed issue of fact as to whether the ALJ “decision is supported by substantial evidence on the whole record.”  42 C.F.R. § 1005.21(h).  The Board reviews a disputed issue of law as to whether the ALJ decision “is erroneous.”  Id.; see also Guidelines – Appellate Review of Decisions of Administrative Law Judges in Cases to Which Procedures in 42 C.F.R. Part 1005 Apply (Guidelines), “Completion of the Review Process, ¶ c (available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/procedures/index.html?language=en).  The governing regulations provide that the Board “will not consider any issue not raised in the parties’ briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.”  42 C.F.R. § 1005.21(e).  The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

Analysis

I. The ALJ’s conclusion that there is a basis to exclude Petitioner pursuant to section 1128(a)(4) of the Act, for a statutory minimum of five years, is supported by substantial evidence and free of legal error.

Before the ALJ, Petitioner did not dispute that the I.G. was authorized to exclude him under section 1128(a)(4) of the Act.  ALJ Decision at 5 (citing Request for Hearing (RFH); P. ALJ Br.).  Petitioner admitted that on October 2, 2018, he pleaded guilty to Conspiracy to Distribute and Dispense Controlled Substances in violation of 21 U.S.C. § 846.  RFH; P. Decl.  The District Court accepted Petitioner’s guilty plea on November 17, 2022.  I.G. Ex. 5, at 1.  Petitioner was convicted of violating 21 U.S.C. § 846, which is punishable by up to 20 years of imprisonment and is thus a Class C felony.  I.G. Ex. 4, at 1; I.G. Ex. 5, at 1; see 18 U.S.C. § 3559(a)(3).  Therefore, the record establishes that Petitioner was convicted of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

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Because there is a basis to exclude Petitioner pursuant to section 1128(a)(4), the ALJ correctly concluded that Petitioner must be excluded for a minimum period of five years.  See ALJ Decision at 6; Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

We therefore affirm the ALJ’s determination that, in accordance with sections 1128(a)(4) and 1128(c)(3)(B) of the Act, the I.G. must exclude Petitioner for a minimum of five years based on Petitioner’s conviction of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

II. The I.G. established two aggravating factors under 42 C.F.R. § 1001.102(b)(5) and (b)(9), authorizing the I.G. to extend the exclusion period to greater than the five-year statutory minimum.

Section 1001.102(a) provides that “[n]o exclusion imposed in accordance with [section] 1001.101 will be for less than 5 years.”  See also Act § 1128(c)(3)(B).  Further, the I.G. may extend the mandatory minimum period of exclusion if it establishes and applies any of the aggravating factors specified in section 1001.102(b), which states that “[a]ny of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion[.]”  Here, the I.G. established two aggravating factors at 42 C.F.R. § 1001.102(b)(5) and (b)(9).

Before the ALJ, Petitioner did not dispute the I.G.’s application of the two aggravating factors at 42 C.F.R. § 1001.102(b)(5) and (b)(9).  RFH; P. ALJ Br. at 1-2.  The ALJ did not err in determining that those aggravating factors were established.  Regarding the incarceration aggravating factor, the ALJ correctly determined that the District Court sentenced Petitioner to 36 months of incarceration and three years of supervised release, and thus correctly concluded that the I.G. established that Petitioner’s sentence included a period of incarceration.  ALJ Decision at 7 (citing I.G. Ex. 5, at 2-3).

Regarding the aggravating factor of other adverse actions, the ALJ correctly found that Petitioner was the subject of another “adverse action” by a state agency based on the same set of circumstances that serves as the basis for the imposition of the I.G.’s exclusion.  The record shows Petitioner voluntarily surrendered his medical license after being indicted for and pleading guilty to Conspiracy to Distribute and Dispense Controlled Substances and, as a result, the THHSC Office of Inspector General excluded Petitioner from the Texas Medicaid program and other federally funded health care programs in Texas.  ALJ Decision at 7-8 (citing RFH; I.G. Ex. 6, at 1; I.G. Ex. 7, at 10).  Moreover, the ALJ correctly concluded that because the I.G. established the presence of two aggravating factors, the I.G. was permitted to lengthen Petitioner’s exclusion beyond the five-year statutory minimum.  ALJ Decision at 7; see also Roji Esha, DAB No. 3076, at 16 (2022) (“simply by establishing the two aggravating factors at issue – or either of the two – the I.G. was authorized to lengthen Petitioner’s exclusion period beyond five years”).  By establishing the two aggravating factors at issue – or either of the two – the

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I.G. was authorized to lengthen Petitioner’s exclusion beyond the mandatory five-year period.

III. Petitioner established the mitigating factor at 42 C.F.R. § 1001.102(c)(3).

The ALJ’s finding that Petitioner established the mitigating factor of cooperation at 42 C.F.R. § 1001.102(c)(3) is supported by substantial evidence and free of legal error.  In his brief to the ALJ, Petitioner argued that in May 2022, he “testified on behalf of the United States” and “agreed to help the Government secure a conviction against [a co-conspirator].”  P. ALJ Br. at 3.  Petitioner also submitted a copy of the United States’ Motion for 5K1.1 Downward Departure, which recommended a “thirty-five (35) percent reduction of [Petitioner’s] sentence in consideration of the substantial assistance he provided,” that was “integral to the conviction” of a co-conspirator.  P. Ex. 1, at 2-3.  Based on Petitioner’s submissions to the ALJ, the I.G. agreed that this mitigating factor applied and reduced the exclusion period from ten years to eight years.  I.G. Ex. 8.  Therefore, the ALJ correctly determined that Petitioner established the mitigating factor at section 1001.102(c)(3) because his cooperation with the federal government resulted in one of his co-conspirators being convicted.

IV. The ALJ’s conclusion that an eight-year exclusion period was unreasonable was based on a legally erroneous interpretation and application of 42 C.F.R. § 1001.102(c)(3).

The I.G. argues that the ALJ erred in holding that Petitioner’s eight-year exclusion period is unreasonable.  I.G. Br. at 5.  The I.G. asserts that the ALJ’s application of the percentage the District Court used to reduce Petitioner’s criminal sentence to decrease Petitioner’s exclusion period is inconsistent with applicable regulations and longstanding Board precedent.  Id. at 7.  The I.G. also argues that tying the weight of Petitioner’s cooperation to the District Court’s downward departure “takes away the I.G.’s ‘broad discretion’ in determining the weight to give cooperation under [] a case-specific analysis.”  Id.  The I.G. further argues that the ALJ impermissibly based the reduction of the exclusion period on the ALJ’s belief that seven years “would have been ‘better[,]’” whereas the I.G. determined that eight years was an appropriate exclusion period based on a qualitative assessment of the case-specific circumstances surrounding the two aggravating factors and one mitigating factor.  Id. at 9.  For the reasons discussed below, we agree that the ALJ’s further reduction of the exclusion period was legal error.

When analyzing the duration of an exclusion period longer than the five-year statutory minimum, the ALJ’s role is to “review[] the length of an exclusion de novo to determine whether it falls within a reasonable range, given the aggravating and mitigating factors and the circumstances underlying them.”  Rosa Velia Serrano, DAB No. 2923, at 8 (2019) (quoting Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 5 (2012)).  “Such an evaluation ‘does not rest on the specific number of aggravating or mitigating factors or

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any rigid formula for weighing those factors, but rather on a case-specific determination of the weight to be accorded each factor based on a qualitative assessment of the circumstances surrounding the factors in that case.’”  Kimberly Jones, DAB No. 3033, at 7 (2021) (quoting Sheth at 5).  An ALJ, or the Board, “may not substitute [its] judgment for that of the I.G. or determine a ‘better’ exclusion period.”  Chaim Charles Steg, DAB No. 3115, at 17 (2023) (quoting Sheth at 5).  An ALJ’s “‘role is limited to considering whether the period of exclusion imposed by the I.G. was within a reasonable range, based on demonstrated criteria.’”  Shaun Thaxter, DAB No. 3053, at 26 (2022) (quoting Wilder at 8) (citation omitted).  Other than the question of whether there was a valid basis for the decision to exclude, “the ALJ’s review of exclusion appeals is limited to deciding whether the exclusion period imposed by the I.G. beyond the five-year minimum is ‘unreasonable[.]’”  Esha at 26 (An excluded individual may request a hearing before an ALJ, but “only on the issues of:  (i) whether the I.G. had a basis for the exclusion; and (ii) whether the length of the exclusion is unreasonable.”); see 42 C.F.R. § 1001.2007(a)(1).

“Deference to the I.G.’s determination is thus built into [an] ALJ’s de novo assessment of whether the lengthened exclusion period imposed by the I.G. was ‘not within a reasonable range[.]’”  Esha at 26; see 57 Fed. Reg. 3,298, 3,321 (Jan. 29, 1992) (noting that the I.G.’s “broad discretion” is “reflected in the language of § 1001.2007(a)(2), restricting the ALJ’s authority to review the length of an exclusion imposed” by the I.G.).  The Board explained that “[t]he I.G. comes to the initial selection of an exclusion period with extensive experience reflecting a much wider base of excluded individual[s] and entities and of diverse facts and circumstances than those that could ever come before an ALJ (or the Board) in the appeals process.”  Edwin L. Fuentes, DAB No. 2988, at 9 (2020), aff’d, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021).  Further, because the I.G. is charged with protecting the integrity of federal health care programs, “the assessment of what period is necessary to achieve that purpose is appropriately assigned to the I.G. in the first instance, with the ALJ review focused on whether the facts as proven show the resulting period to be not unreasonable.”  Id.  Thus, “deference to [the] I.G.’s ‘broad discretion’ in setting the length of an exclusion ‘is appropriate, given the [I.G.’s] vast experience in implementing exclusions.’”  Serrano at 9 (quoting 57 Fed. Reg. at 3,321); see also Fuentes at 7-9.  However, “[t]hat degree of deference is not owed to adjudicators such as ALJs who hear appeals of exclusions.”  Asim A. Hameedi, M.D., DAB No. 3087, at 16 (2023), aff’d, No. 23-CV-2654 (HG), 2024 WL 4212061 (E.D.N.Y. Sept. 17, 2024).  The Board has thus determined that an ALJ’s de novo review authority “is not thus an unconstrained mandate to select any period of exclusion that may appear reasonable to the ALJ” given the delegated discretion of the I.G. in implementing exclusions provided for in section 1001.2007(a).  Esha at 27 (quoting Fuentes at 9).  An ALJ does not have the authority to “conduct an appellate-type inquiry into how the I.G. arrived at the particular length but determines whether the evidence presented before the ALJ by the I.G. and [petitioner] shows that [the] length” the I.G. selected “is not unreasonable.”  Fuentes at 9.

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In Frank A. DeLia, D.O., DAB No. 1620 (1997), the Board thus rejected the ALJ’s determination that “[t]he Secretary has given discretion to the adjudicator to weigh, on a case-by-case basis, the evidence which relates to aggravating and/or mitigating factors, and to decide, based on that evidence, whether an exclusion is reasonable,” and noted that “the regulations, promulgated by the Secretary, vested discretion in the I.G. to determine the length of an exclusion as long as it was within a reasonable range.”  Id. at 6 (emphasis omitted) (citing Barry D. Garfinkel M.D., DAB No. 1572 (1996), aff’d, No. 3:96-CV-00604 (D. Minn. June 25, 1997)).  By regulation, the Board’s role is to consider whether the ALJ’s determination that the I.G. imposed an unreasonable exclusion period is supported by substantial evidence in the record and is free of legal error.  For the reasons explained below, it is not.

The ALJ agreed with the I.G. that Petitioner successfully established that his cooperation resulted in the conviction of his co-conspirator.  ALJ Decision at 9.  The ALJ also acknowledged the limited role in reviewing the exclusionary period the I.G. imposes, recognizing that “[a]n ALJ must uphold the [I.G.]’s determination as to the length of an exclusion unless it is unreasonable and an ALJ has no authority to change the amount of time chosen by the [I.G.] if it is within a reasonable range.”  Id. (citing 42 C.F.R. § 1001.2007(a)(1)(ii); 57 Fed. Reg. at 3,321).  However, as discussed below, the ALJ then improperly substituted her judgment for that of the I.G. and determined a “better” exclusion period.  See Sheth at 5 (quoting Wilder at 8; Paul D. Goldenheim, M.D., et al., DAB No. 2268, at 21 (2009)).

A. The ALJ erred by failing to conduct a case-specific analysis to determine that Petitioner’s exclusion period was unreasonable and warranted a reduction.

As noted earlier, the ALJ compared this case to a single Board decision, Wilder, and then concluded that Petitioner’s exclusion period should be reduced just as the Board reduced the exclusion period there.  While the Board has held that case comparisons can “inform whether an exclusion falls within a reasonable range,” they are not helpful to the Board’s decision-making unless supported by an analysis that accounts for the unique circumstances of each case and the relative seriousness of applicable aggravating and mitigating factors.  Steg at 17 (citing Sheth at 6).  “Comparisons with other cases are not controlling and of limited utility” because aggravating and mitigating factors do not have specific values and “must be evaluated based on the circumstances of a particular case . . . which can vary widely.”  Robert Hadley Gross, DAB No. 2807, at 6 (2017) (quoting Goldenheim at 29), aff’d, No. 1:17-cv-01801, 2023 WL 5094912 (D.D.C. Aug. 9, 2023); see also Fuentes at 15 (“The Board has repeatedly explained that comparing exclusion periods is not generally helpful in assessing reasonableness, due in part to the varying mix of factors and wide range of relevant circumstances that may need to be considered in individual cases.”).  Here, the ALJ did not consider that in Wilder, the petitioner,

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Dr. Wilder, provided significant cooperation to the government that involved extraordinary circumstances that were not present in this case.

The ALJ stated that contrary to the I.G.’s argument (citing Salman Ali, DPT and Roohi Ali, DPT, DAB No. 3048, at 10 (2021)), aff’d, Ali v. U.S. Dep’t of Health & Hum. Servs., No. 21-cv-12365, 2022 WL 3130227 (E.D. Mich. Aug. 4, 2022), that the Board has not reduced an exclusionary period down to the mandatory minimum of five years, “[t]he Board has granted proportional, and often significant, reductions in a petitioner’s exclusionary period where that petitioner successfully demonstrates having substantially cooperated with federal or state officials resulting in others being convicted or excluded—and even when the IG has already considered the mitigating factor.”  ALJ Decision at 10.  The ALJ noted that in Wilder, the Board reduced Dr. Wilder’s exclusion from 35 to 18 years “based on the ‘extraordinary’ nature of the assistance Dr. Wilder provided to state law enforcement officials.”  Id. at 10-11 (citing Wilder at 11).  The ALJ determined that like Dr. Wilder, Petitioner “provided ‘significant and productive’ cooperation that led to the conviction of one of his co-conspirators.”  Id. at 11.

As the I.G. points out (I.G. Br. at 13), the circumstances in Wilder are distinguishable from this case.  In Wilder, the Board found the 35-year period of exclusion unreasonable and reduced it to 18 years because of Dr. Wilder’s “extraordinary cooperation” with government officials.⁶  Wilder at 4, 13; see also Hussein Awada, M.D., DAB No. 2788, at 14 (2017) (distinguishing the cooperation in Wilder in declining to further reduce the exclusion period).  Dr. Wilder participated in a scheme to defraud the Medicare and Medi-Cal programs for a period of about two years.  Wilder at 2.  As part of his plea agreement, Dr. Wilder agreed to fully cooperate with law enforcement officials in their investigation and prosecution of health care fraud, unlawful remuneration, and any other criminal activities he had knowledge of.  Id. at 10-11.  The record showed that Dr. Wilder’s cooperation was “so important” that the sentencing court reduced all his offenses from felonies to misdemeanors and reduced his summary probation period from five years to three.  Wilder at 13.  Indeed, the elements of Dr. Wilder’s cooperation were “the primary reasons” the California Deputy Attorney General was able to stop the Medi-Cal and Medicare fraud and obtain significant reimbursements for the State of California and the federal government.  Id.  Specifically, Dr. Wilder’s cooperation resulted in felony convictions of seven other participants in the conspiracy to defraud Medicare and Medi-Cal.  Id.  Further, Dr. Wilder’s past and ongoing cooperation also led to the recovery of more than 30 million dollars in multiple cases involving other individuals who participated in the fraudulent scheme, which was more than seven times the loss caused by Dr. Wilder’s criminal involvement.  Id.

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Based on these undisputed facts, the Board found that Dr. Wilder’s cooperation was “extensive” and he “engaged in some cooperative acts which put him at risk.”  Id.; see also Donald A. Burstein, Ph.D., DAB No. 1865, at 13 (2003) (discussing that petitioner’s “extensive” cooperation and engagement in “cooperative acts in which he put himself at risk” had a bearing on his general trustworthiness and thus the exclusion length necessary to achieve the Act’s remedial purpose).  The Board determined that the nature and extent of Dr. Wilder’s extensive cooperation showed that he was “not so untrustworthy such that the three aggravating factors present in this case establish that a 35-year exclusion is reasonable” to satisfy the Act’s remedial purpose of federally-funded health care programs from untrustworthy individuals.  Wilder at 13.  Thus, the Board concluded that the “depth and breadth of [Dr. Wilder’s] cooperation with law enforcement officials” resulting in the arrest and/or conviction of seven participants and the recovery of a large amount of program funds, when weighed against three aggravating factors, merited a reduction of Dr. Wilder’s exclusion to 18 years.  Id.

Here, the ALJ stated that like Dr. Wilder, “Petitioner here provided ‘significant and productive’ cooperation that led to the conviction of one of his co-conspirators.”  ALJ Decision at 11.  However, Petitioner’s cooperation in this case did not rise to the level of cooperation found in Wilder.  According to the Motion for a 5K1.1 Downward Departure, Petitioner provided “substantial assistance” from 2018 through 2022.  P. Ex. 1, at 3.  He debriefed the government approximately five times and provided helpful information about his co-conspirators.  Id.  He testified credibly at the trial for one of his co-conspirators, which was “integral to the conviction” of that co-conspirator.  Id.; P. Decl.  While Petitioner did substantially cooperate with the government, his cooperation in one trial resulted in the conviction of only one co-conspirator, even though there were three other co-conspirators.  Unlike in Wilder, Petitioner’s cooperation did not lead to “a comparable number of convictions or any other significant result for law enforcement recognized in the regulations.”  See Awada at 15.

The ALJ failed to consider the significant differences and results between the cooperation Dr. Wilder provided and the cooperation Petitioner provided.  Despite acknowledging the deference given to the I.G. to set exclusions, the ALJ improperly substituted her own judgment for that of the I.G. and determined that Petitioner’s cooperation was significant enough to warrant further reduction, even after the I.G. already reduced Petitioner’s exclusion by two years.  Moreover, while the preamble contemplates that significant cooperation may result in giving one mitigating factor more weight than all the aggravating factors, the weight accorded to each aggravating and mitigating factor must be determined on a case-by-case basis.  See Fuentes at 11-12 (citing 57 Fed. Reg. at 3,314-15).  While the ALJ recognized the presence of the two aggravating factors, in comparing this case to Wilder, the ALJ addressed only the mitigating factor of cooperation to reduce Petitioner’s exclusion period and did not discuss the two applicable aggravating factors, contravening Board precedent that case comparisons are “unhelpful to the Board’s decision-making unless supported by analysis that accounts for the unique

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circumstances of each case and the relative seriousness of any applicable aggravating and mitigating factors.”  Thaxter at 33 (citing Sheth at 6) (emphasis added).

B. The ALJ also erred by applying a rigid mathematical formula, rather than conducting a case-specific analysis, to reduce the exclusion period the I.G. imposed on Petitioner.

The ALJ also erred by applying the same 35 percent reduction the United States Attorney sought in the Motion for a 5K1.1 Downward Departure to also reduce Petitioner’s exclusion.  The ALJ pointed out that the United States Attorney “found it appropriate to request a 35% downward departure from sentencing guidelines” and the “Motion for Downward Departure captures the valuable and indispensable nature of [Petitioner’s] assistance.”  ALJ Decision at 11.  The ALJ acknowledged that although the criminal proceedings are distinct from I.G. exclusion proceedings and serve different purposes, the “significant downward departure in Petitioner’s sentence is a proxy for the extent to which Petitioner cooperated with the Government and enabled it to secure a conviction against Petitioner’s co-conspirator.”  Id.  The ALJ reasoned that “Petitioner’s exclusion period can and ought to be reduced by the same proportion that his criminal sentence was reduced to reflect the importance of the assistance that he provided” and calculated that a 35 percent reduction of Petitioner’s original 10-year exclusion would result in a six-and-a-half-year exclusionary period.  Id.  Based on that calculation, the ALJ reduced the exclusionary period to seven years.  Id.

It is “settled law . . . that the assessment of aggravating and mitigating factors is qualitative, focusing on the circumstances of the case at hand, rather than quantitative or a matter of mathematical formulas.”  Sheth at 8 (emphasis added).  The “regulations do not contemplate mathematical precision in weighing the infinite variety of factual scenarios that may arise from evidence as to one or more aggravating (and potentially mitigating) factors.”  Fuentes at 11.  The Board’s “longstanding approach” requires that in the absence of a mechanical or formulaic system, case-by-case judgments must be made based on individual circumstances shown on the record as to each factor.  Id. at 12; see also 57 Fed. Reg. at 3,314-15 (“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.”).  Here, the ALJ improperly took a quantitative approach and applied a mathematical formula to reduce Petitioner’s exclusion period by 35 percent.  Further, by applying the sentencing formula from the 5K1.1 Motion, the ALJ failed to perform a qualitative case-by-case analysis of the applicable aggravating factors in conjunction with Petitioner’s cooperation.  See Awada at 15 (“the aggravating factors (one of which is incarceration) and the mitigating factors (one of which is cooperation) are separate considerations, and the mitigating factors are considered only after the aggravating factors have been weighed”).  By reducing Petitioner’s exclusion period by using the same formula the United States Attorney recommended to reduce Petitioner’s criminal sentence, the ALJ failed to acknowledge the

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I.G.’s broad discretion in determining the weight to give Petitioner’s cooperation under a case-specific analysis.  See Esha at 9.

Additionally, the ALJ provided no authority for the notion that “Petitioner’s exclusion period can and ought to be reduced by the same proportion that his criminal sentence was reduced” (ALJ Decision at 11), especially given the different purposes of criminal and exclusion proceedings.  The preamble distinguishes between the punitive nature of criminal sentencing and the remedial nature of exclusions.  See 57 Fed. Reg. at 3,300 (“The primary purpose of an exclusionary sanction is remedial, not punitive.”).  Further, the Board has long held that “[e]xclusion proceedings are distinguishable from criminal proceedings in that the exclusion is not intended to punish the excluded individual for committing a crime, but to protect federal health care programs from untrustworthy providers and suppliers.”  Yolanda Hamilton, M.D., DAB No. 3061, at 24 (2022).  The I.G. determines the length of an exclusion on a qualitative assessment of the circumstances of the case consistent with exclusion law and does not rely on the same considerations a sentencing judge would rely on to determine an appropriate incarceration term.  Id.  The ALJ acknowledged the different purposes, yet still applied a mathematical formula used in a criminal proceeding to this exclusion proceeding.  Given the differing policies underlying criminal prosecutions and exclusion proceedings, factors influencing a criminal sentence are different than those considered when determining exclusion periods.  See Ali at 16 (concluding that criminal proceedings do not “determine the duration of the time [p]etitioners are excluded from participation in federal health care programs in accordance with exclusion law and regulations”); Garfinkel at 34 (explaining that sentencing guidelines do not directly address the remedial purposes of exclusion provisions).

The ALJ’s analysis of the mitigating factor at section 1001.102(c)(3) is thus legally erroneous, as is the conclusion that the mitigating factor at section 1001.102(c)(3) warranted a further reduction of the eight-year exclusion period, which contravenes the regulations and Board precedent.  The regulations and Board precedent afford the I.G. broad deference in setting exclusions, recognizing the I.G.’s experience in implementing exclusions.  Fuentes at 7-9; 57 Fed. Reg. at 3,321.  Because of the I.G.’s expertise in determining exclusion periods, an ALJ may not improperly substitute their judgment for that of the I.G. or choose an exclusion period that they prefer over that set by the I.G., which the ALJ did here by reducing the exclusion period from eight to seven years based on the cooperation mitigating factor.  Hamilton at 12; see Stacey R. Gale, DAB No. 1941, at 12 (2004) (quoting 57 Fed. Reg. at 3,315) (“We believe that the significance of cooperation is more properly evaluated by those in a position to utilize the information, rather than by an ALJ . . . .”).  The ALJ improperly conducted a case comparison and applied a rigid mathematical formula based only on the cooperation mitigating factor rather than performing a case-specific qualitative evaluation of the cooperation mitigating factor and the applicable aggravating factors.  We therefore reverse that part of the ALJ’s decision discussing section 1001.102(c)(3) and the determination to reduce the I.G.’s

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exclusion period to seven years based on that error.  We explain below our rationale for reinstating the eight-year exclusion period imposed by the I.G.

V. We reverse the ALJ’s conclusion that the eight-year exclusion the I.G. imposed was unreasonable and reinstate the eight-year exclusion period because it is within a reasonable range.

As discussed above, in reviewing a length of exclusion longer than the mandatory minimum, an ALJ reviews the record de novo “to determine what the evidence establishes as to the ‘demonstrated criteria,’ i.e., the aggravating and mitigating factors” applied to extend the exclusion.  Fuentes at 9 (citing Serrano at 8-9); see 57 Fed. Reg. at 3,321 (“So 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. . . .”).  We evaluate the I.G.’s three-year lengthening of Petitioner’s exclusion period to eight years by weighing the two aggravating factors and the mitigating factor to assess whether, based on the proven facts and circumstances, the exclusion period the I.G. imposed was outside of a reasonable range.

The ALJ found that “[a]side from a cursory recitation that there are two aggravating factors and one mitigating factor, the [I.G.] provides no justification for her determination that an 8-year exclusionary period is appropriate.”  ALJ Decision at 10.  The I.G., however, had no obligation to provide such an explanation.  See Andrew Louis Barrett, DAB No. 2887, at 7 (2018) (rejecting argument that I.G. was required to show how exclusion term was “calculated”).  Indeed, “the role of the Board and its ALJs is not to review the adequacy of the [I.G.]’s analytical or decision-making process.”  Id.  The I.G.’s obligation in this case, which the ALJ found it met, was to “prove the legal elements of the exclusion, including any aggravating factors upon which it relied to determine the exclusion’s duration.”  Id.

The ALJ’s role was “to determine whether the exclusion fell ‘within a reasonable range’ given the evidence . . . concerning the relevant aggravating and mitigating factors.”  Id. (emphasis added).  While the ALJ concluded that the I.G. established the aggravating factors in sections 1001.102(b)(5) and 1001.102(b)(9) and Petitioner established the mitigating factor in 1001.102(c)(3), the ALJ considered only the mitigating factor of Petitioner’s cooperation to conclude that the eight-year exclusion was unreasonable, and reduced it by one year solely because of Petitioner’s “significant cooperation” without weighing the two aggravating factors before considering the cooperation mitigating factor.  ALJ Decision at 11; see Awada at 15.  The ALJ Decision provides no qualitative analysis of the reasonableness of the exclusion period the I.G. imposed based on the evidence concerning the relevant aggravating and mitigating factors.  As discussed below, we find that given the evidence concerning the two applicable aggravating factors and one mitigating factor, the eight-year exclusion the I.G. imposed upon consideration of those three factors was not unreasonable.

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A. Petitioner’s sentence of 36 months of incarceration and three years of supervised release weighs in favor of extending the mandatory exclusion period by three years.

The District Court sentenced Petitioner to 36 months of incarceration followed by three years of supervised release.  I.G. Ex. 5, at 2-3.  The ALJ correctly concluded that Petitioner’s sentence included a period of incarceration (ALJ Decision at 7) and we affirm this part of the ALJ’s decision, including that establishing this aggravating factor permitted the I.G. to lengthen the period of exclusion.  See 42 C.F.R. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion . . . .”).

Petitioner’s 36-month incarceration and three-year supervised release, which also qualifies as incarceration under the regulation, constitute an “independently, weighty factor” that weighs heavily in favor of extending the mandatory period of exclusion.  See Devon Rambert-Hairston, DAB No. 3069, at 13 (2022); 42 C.F.R. § 1001.2 (“Incarceration means imprisonment or any type of confinement with or without supervised release . . . .”).  “[T]he Board has repeatedly pointed to long periods of incarceration as relevant to determining the reasonableness of an exclusion period.”  Waleed Khan, DAB No. 3083, at 7 (2023) (quoting Eugene Goldman, M.D., DAB No. 2635, at 6 (2015)).  Moreover, the Board has concluded that periods of incarceration shorter, or in some case even significantly shorter, than that imposed on Petitioner were substantial and supported lengthening the exclusion period.  See, e.g., Thaxter at 36 (holding that a six-month prison sentence warranted “significant weight”); Fuentes at 12 (24-month period of incarceration was “a substantial term to be considered under section 1001.102(b)(5)”); Gracia L. Mayard, M.D., DAB No. 2767, at 8 (2017) (describing a 54-month incarceration term as “substantial”); Angelo D. Calabrese, M.D., DAB No. 2744, at 8 (2016) (explaining that a 37-month incarceration term was a “substantial amount of time considering that incarceration of any length would constitute an aggravating factor under section 1001.102(b)(5)”); Raymond Lamont Shoemaker, DAB No. 2560, at 8 (2014) (agreeing with the ALJ that a 55-month prison term is substantial); Farzana Begum, M.D., DAB No. 2726, at 16 (2016) (noting that petitioner’s sentence of incarceration, “even reduced to nine and a half months . . . was relatively substantial”) (citation omitted), aff’d, No. 16-cv-9624, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017); Jeremy Robinson, DAB No. 1905, at 12 (2004) (finding that a one year and one day period of incarceration in concert with other factors supports “sufficient” weight); Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855, at 12 (2002) (characterizing a nine-month sentence of incarceration that included a period of work release as “more than a token incarceration and, in that sense, relatively substantial”).

Petitioner’s multi-year prison term followed by three years of supervised release is thus a lengthy period of incarceration to which the I.G. may assign substantial weight.  Khan

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at 8.  The conditions of Petitioner’s supervised release imposed a type of confinement in that Petitioner was, among other things, precluded from leaving the judicial district without permission, required to live at a place approved by the probation officer, and precluded from working in certain occupations.  CMS Ex. 5, at 3-4.  That Petitioner’s sentence included a term of incarceration “alone serves as evidence of additional untrustworthiness.”  Esha at 29; see also Hamilton at 17 (quoting Goldman at 5) (“The Board has recognized that an incarceration term may be viewed as a “reasonable proxy . . . for untrustworthiness in the context of deciding how much weight to give the aggravating factor for incarceration.”).  Therefore, Petitioner’s sentence supports the I.G.’s lengthening of the required minimum exclusion period.

B. Petitioner’s exclusion from the Texas Medicaid program and other federally funded health care programs in Texas as a result of his conviction for Conspiracy to Distribute and Dispense Controlled Substances further supports lengthening the exclusion period by three years.

Petitioner voluntarily surrendered his medical license after pleading guilty to Conspiracy to Distribute and Dispense Controlled Substances and as a result, the THHSC Office of Inspector General excluded Petitioner from the Texas Medicaid program and other federally funded health care programs in Texas.  I.G. Ex. 6, at 1; I.G. Ex. 7, at 10.  Accordingly, the ALJ correctly found that Petitioner was the subject of an “adverse action” by a state agency based on the same set of circumstances that serves as the basis for the imposition of the I.G.’s exclusion.  ALJ Decisionat 8.

Petitioner’s exclusion from the Texas Medicaid program supports extending the mandatory period of exclusion.  The Board has made clear that the “aggravating and mitigating factors specified in the regulations reflect the degree or level of the . . . untrustworthiness” of the excluded individual or entity.  Robinson, DAB No. 1905, at 11 (citing Cash at 18; see Sheth at 16 (stating that “[t]he aggravating and mitigating factors . . . were designed to evaluate” the “threat [a p]etitioner poses to the Medicare program and its beneficiaries”)).  Further, the Board explained that this aggravating factor “merits substantial weight” because this factor reflects the I.G.’s determination that an adverse action that is based on the same set of circumstances is an independent measure of the excluded individual’s untrustworthiness beyond the fact of the conviction.  See Esha at 28-29 (finding that a petitioner’s exclusion from Medi-Cal is “additional evidence of [the petitioner’s] untrustworthiness and weighs in support of the I.G.’s increase of [the] exclusion period”); Mayard at 3, 9 (holding that surrender of petitioner’s medical license was an adverse action constituting “additional evidence of [p]etitioner’s untrustworthiness and the seriousness of his criminal offense”); Narendra M. Patel, M.D., DAB No. 1736, at 29 (2000), aff’d, 319 F.3d 1317 (11th Cir. 2003) (explaining that an “additional adverse action beyond the criminal conviction” may be “additional evidence of the seriousness” of the criminal offense supporting the exclusion); Fereydoon Abir, M.D., DAB No. 1764, at 8 (2001) (“[A] determination by a

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state regulatory body that the conduct in question was not only criminal but was a basis for exclusion from [Medicaid] has a bearing on trustworthiness.”).

Given the seriousness of the conduct for which Petitioner was convicted, and the rationale underlying the enactment of this aggravating factor, Petitioner’s exclusion from the Texas Medicaid program is additional evidence of his untrustworthiness and weighs in support of the I.G.’s increase of the exclusion period.  Cf. Mayard at 8-9 (upholding 13-year exclusion under section 1128(a)(4) where physician was convicted of felony conspiracy to distribute oxycodone, sentenced to 54-months of incarceration, excluded from the state Medicaid program, and surrendered his medical license).

C. Petitioner established the mitigating factor of cooperation, which supports a reduction of his exclusion period.

The I.G., recognizing that Petitioner’s cooperation with law enforcement resulted in the conviction of a co-conspirator, applied the mitigating factor at section 1001.102(c)(3) and reduced Petitioner’s exclusion by two years, from ten years to eight years.  See I.G. Ex. 8; P. Ex. 1.  Affording the appropriate deference to the I.G.’s authority to set exclusions and the I.G.’s vast experience in implementing exclusions, we find that eight years is not an unreasonable exclusion period given the two aggravating factors and one mitigating factor.  See Esha at 26; Fuentes at 9; Serrano at 9.

While Petitioner’s cooperation resulted in a co-defendant’s conviction, the aggravating factors still strongly support extending the exclusion period beyond the five-year mandatory minimum.  Khan at 13 (“Even assuming that Petitioner’s cooperation resulted in a co-defendant’s conviction . . . we would not conclude that this one mitigating factor entirely negates the two established aggravating factors in section 1001.102(b)(5) and (b)(9).”).  The lengthy duration of incarceration imposed on Petitioner was a significant aggravating factor that weighs heavily in favor of extending the mandatory period of exclusion.  See Ali at 10.  Additionally, Petitioner’s exclusion from the Texas Medicaid program warrants an increase of the exclusion period.  See Esha at 29.  Based on a case-specific weighing and assessment of the two aggravating factors and one mitigating factor, Petitioner’s cooperation, although substantial, “does not outweigh the gravity and magnitude of the aggravating factors, which together reflect [Petitioner’s] lack of trustworthiness.”  Ali at 12.

As in other cases, the I.G.’s determination of Petitioner’s exclusion period, including the reduction by two years to account for Petitioner’s cooperation, involved consideration of “a complex interaction of diverse circumstances and regulatory factors with varying weights.”  Awada at 15 (quoting Goldman at 11).  Considering the mitigating factor of Petitioner’s level of cooperation relative to the two aggravating factors is “precisely the type of ‘qualitative assessment’ that should underlie an evaluation of whether an exclusion period falls into a reasonable range.”  Id. at 15.  As discussed above, the ALJ

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erred in concluding that Petitioner’s cooperation was so significant that it warranted a further reduction of the exclusion period, in applying a mathematical formula based on the sentence reduction, and in not considering that factor in light of the two aggravating factors.  The I.G. appropriately considered the circumstances of Petitioner’s cooperation along with the two aggravating factors when revising Petitioner’s exclusion period from ten years to eight years.

We conclude that the three-year extension of the exclusion period, based on two proven aggravating factors and one mitigating factor, was not unreasonable.  Given the undisputed facts establishing the two aggravating factors in sections 1001.102(b)(5) and 1001.102(b)(9), and the mitigating factor in section 1001.102(c)(3), the eight-year exclusion period represents a modest increase of three years above the mandatory minimum that is justified by the facts and circumstances of Petitioner’s case and lies within a reasonable range.  Therefore, we reinstate the eight-year exclusion period the I.G. imposed.

Conclusion

We affirm the ALJ’s conclusion that the I.G. had a legal basis to exclude Petitioner under section 1128(a)(4) of the Act and to extend the exclusion period beyond the five-year minimum based on the presence of two aggravating factors and one mitigating factor.  We reverse as legally erroneous the ALJ’s analysis concerning the mitigating factor in 42 C.F.R. § 1001.102(c)(3) and the ALJ’s determination to reduce the length of Petitioner’s exclusion from eight years to seven years.  We conclude that the eight-year exclusion period the I.G. imposed is not unreasonable.

Endnotes

¹ Section 1128 of the Act is codified at 42 U.S.C. § 1320a–7.  The current version of the Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.  Cross-reference tables for the Act and the United States Code can be found at https://www.ssa.gov/OP_Home/comp2/G-APP-H.html.

² Background information is drawn from the ALJ Decision and undisputed facts in the record before the ALJ.

³ “5K1.1 Downward Departure” refers to section 5K.1.1 of the United States Sentencing Commission’s Guidelines (available at https://www.ussc.gov/), pursuant to which a court may depart from the guidelines in sentencing a defendant upon the government’s motion showing that the defendant provided substantial assistance in the investigation or prosecution of another individual who committed an offense.  See 18 U.S.C. § 3553(e), (f).

⁴ According to the certificate of service, the I.G. mailed the notice of appeal and accompanying brief to Petitioner at his last known address at that time.

⁵ On October 8, 2024, the Bureau of Prisons online inmate search showed that Petitioner was no longer imprisoned and was assigned to a Residential Reentry Management (RRM) field office.  The Board mailed one copy of the Order to Show Cause via certified mail to the facility where Petitioner had been imprisoned and one copy via certified mail to the RRM field office.  Tracking information shows that the United States Postal Service delivered the Order to Show Cause to the RRM field office on October 15, 2024.  Board E-File Docket Entry No. 6.  The copy mailed to the prison was returned to the Board on October 30, 2024.

⁶ The Board also questioned, based on prior cases, the implication that the I.G. would have imposed an exclusion period longer than 35 years if not for the cooperation mitigating factor.  See Wilder at 12 (“[W]e find it difficult to see, in light of the range of past exclusion periods, how an exclusion of substantially more than 35 years could be justified as within a reasonable range” based on the program loss).