Eva Misra, DAB No. 3207 (2025)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner Eva Misra appeals the decision of an Administrative Law Judge (ALJ), Eva Misra, DAB CR6633 (2025) (ALJ Decision), affirming the determination of the Inspector General (I.G.) to exclude Petitioner from participation in all federal health care programs for the mandatory minimum period of five years under section 1128(a)(3) of the Social Security Act (Act).¹  The ALJ concluded that the I.G. had a lawful basis to exclude Petitioner based on her conviction of a felony offense (i.e., money laundering) relating to fraud or other financial misconduct in connection with the delivery of a health care item or service.  We affirm the ALJ Decision because it is supported by substantial evidence and not legally erroneous.

Legal Background

Section 1128(a) of the Act requires the Secretary of the Department of Health of Human Services to exclude from participation in all federal health care programs individuals with certain types of criminal convictions.  As permitted by the Act, the Secretary delegated to the I.G. the authority to enforce section 1128’s exclusion provisions.  Act § 1128A(j)(2); 48 Fed. Reg. 21,523, 21,662 (May 13, 1983); 53 Fed. Reg. 12,909, 12,993 (Apr. 20, 1988).  The I.G. has issued regulations at 42 C.F.R. Parts 1001 and 1005 implementing the delegated exclusion authority.

As relevant here, section 1128(a)(3) mandates the exclusion of any individual convicted under federal or state law of a felony “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” if the offense was “in connection with the delivery of a health care item or service.”  Act § 1128(a)(3); see also 42 C.F.R. § 1001.101(c) (implementing section 1128(a)(3)).²  Exclusions imposed under section

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1128(a) are referred to as “mandatory” exclusions.  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).

An individual is “convicted” within the meaning of section 1128(a)(3) when, among other things, “a judgment of conviction has been entered against the individual . . . by a Federal, State, or local court” or “when a plea of guilty . . . has been accepted by a Federal, State, or local court.”  Act § 1128(i)(1), (3); see also 42 C.F.R. § 1001.2.  “It is the fact of the conviction which causes the exclusion.”  Peter J. Edmonson, DAB No. 1330, at 4 (1992) (underlining replaced by italics).  The general purpose of section 1128 is to provide “protection for federally funded programs and their beneficiaries and recipients” by excluding “potentially untrustworthy individuals or entities based on criminal convictions.”  Id.

An excluded individual may request a hearing before an ALJ, but only on the issues of:  (i) whether the “basis for” exclusion exists; and (ii) whether “[t]he length of exclusion is unreasonable.”  42 C.F.R. §§ 1001.2007(a)(1), 1005.2(a).  When, as here, the exclusion is mandatory and is imposed for the minimum five-year period, the excluded individual may request a hearing only on the issue of whether the I.G. had a basis for the exclusion. Id. § 1001.2007(a)(1)-(2).  The underlying conviction is not reviewable or subject to collateral attack on substantive or procedural grounds.  Id. § 1001.2007(d).

The ALJ issues an “initial decision” based on the record developed before the ALJ.  Id. § 1005.20(a).  A party dissatisfied with the ALJ’s “initial decision” may appeal that decision to the Board.  Id. § 1005.21(a).  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.”  Id. § 1005.21(e).  A petitioner found liable may seek judicial review of the Board’s decision.  Id. § 1005.21(i), (k).

Case Background³

I.        Petitioner’s criminal conviction and exclusion by the I.G.

Petitioner was a physician who worked at a medical clinic in Tennessee.  I.G. Ex. 2, at 2.  In June 2023, federal prosecutors charged Petitioner in the United States District Court for the Eastern District of Kentucky (Court) with violating 18 U.S.C. § 1957 (money

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laundering).   The information alleged that on or about April 8, 2016, Petitioner, aided and abetted by others, knowingly engaged and attempted to engage in a monetary transaction involving criminally derived property exceeding $10,000, where that amount derived from a conspiracy to defraud health care benefit programs.  I.G. Ex. 3, at 2.  The information included an allegation requiring Petitioner to forfeit all property “involved in the violation of 18 U.S.C. § 1957,” including the forfeiture of $280,000 that the government seized from Petitioner’s bank account.  Id.

Petitioner agreed to plead guilty to money laundering under 18 U.S.C. § 1957.  I.G. Ex. 2.  In her plea agreement, Petitioner admitted to the following facts:

(a)      During the relevant time period, [Petitioner] was a physician licensed to practice only in Tennessee.  Among other places, [Petitioner] practiced at EHC Medical Offices, PLLC (“EHC”).

(b)      Using her status as a medical doctor and registrant with the Drug Enforcement Administration (“DEA”), [Petitioner] issued prescriptions for Medications to EHC patients.  EHC paid [Petitioner] based on the number of patients she saw.  [Petitioner] understood that other doctors practicing at EHC were also issuing prescriptions for medications to EHC patients.  Urine drug testing (UDT) was routinely ordered by EHC in the names of EHC physicians in connection with these same patients, purportedly to test for the presence of prescribed and unprescribed medications related to medication-assisted treatment for opioid addiction.

(c)      [Petitioner] knew that EHC, as structured and operated by the clinic’s owner, administrator, and medical directors, was repeatedly causing the submission of false and fraudulent claims for reimbursement for UDT that were not otherwise reimbursable.  EHC’s orders for non-reimbursable UDT, submitted by EHC’s owner and management, were transmitted via wire and therefore constituted wire fraud, which is a specified unlawful activity.  For example, [Petitioner] knew that UDT orders by other EHC physicians for EHC patients were frequently medically unnecessary because they were not actually used in the course of putative treatment of EHC patients.  She also understood that:  (1) the laboratories performing the UDT ordered by EHC would bill and

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receive payments from health care benefit programs, such as Kentucky Medicaid and TennCare; and (2) that the payment of the UDT services by health care benefit programs allowed EHC patients to pay substantial cash payments to EHC that the patients otherwise could not afford; and (3) uninsured EHC patients did not have to pay for their UDT services.  In this way, the proceeds of the fraudulent UDT billing were shared between the laboratory and EHC.

(d)      [Petitioner] knew that a substantial portion of EHC patients were coming to the clinic from areas in the Eastern District of Kentucky.

(e)      Funds derived from the wire fraud described above were paid to EHC via returning visits from EHC patients.  Those funds were further distributed to EHC physicians, including [Petitioner].

(f)       On April 8, 2016, [Petitioner] received a transfer in the amount of $17,907.00 from EHC’s operating account . . . to her [bank] account . . . .  [Petitioner] agreed to and engaged in this transaction knowing that some of the funds were derived from a scheme engaged in by others to cause false and fraudulent claims for UDT testing to be submitted to health care benefit programs.  More than $10,000 of this transfer constituted proceeds from this fraud scheme.

I.G. Ex. 2, at 2-3.  As part of her plea agreement, Petitioner also agreed to forfeit the $280,000 seized from her bank account because those funds were involved in the money laundering offense to which Petitioner pleaded guilty.  Id. at 5.

In October 2023, the Court accepted Petitioner’s guilty plea and entered judgment against her.  I.G. Ex. 5.  The Court sentenced Petitioner to four months of imprisonment with two subsequent years of supervised release.  Id. at 2-3.  The Court also imposed a $10,000 fine, a $100 special assessment, and ordered the forfeiture of $280,000 as set forth in the forfeiture allegation of the information.  I.G. Ex. 5, at 6-7; I.G. Ex. 3, at 2.

By letter dated July 31, 2024, the I.G. excluded Petitioner from participation in all federal health care programs under section 1128(a)(3) of the Act for the statutory minimum period of five years.  I.G. Ex. 1, at 1.  The I.G. explained that Petitioner’s exclusion was due to her felony conviction of a criminal offense “related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service . . . .”  Id. 

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II.      ALJ Proceedings and Decision

Petitioner challenged her exclusion and timely requested an ALJ hearing.  ALJ Decision at 2.  The I.G. filed a brief and five exhibits (I.G. Exs. 1-5).  Id.  Petitioner filed a brief and two exhibits (P. Exs. 1-2).⁵  Id.  The I.G. filed a reply.  Id.  The ALJ admitted the exhibits proffered by the parties without objection.  Id.  The ALJ issued a decision based on the written record because neither party requested an in‑person hearing or proffered any witnesses.  Id. 

The ALJ determined that the I.G. had a basis to exclude Petitioner under section 1128(a)(3) because (i) Petitioner’s money laundering offense occurred after August 21, 1996; (ii) Petitioner’s offense related to fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct; and (iii) Petitioner’s offense was “in connection with the delivery of a health care item or service.”  ALJ Decision at 5-8.  The ALJ found Petitioner did not dispute that her money laundering offense related to financial misconduct.  Id. at 5-6.  Pointing to Petitioner’s admissions in her plea agreement, the ALJ further found a “clear and common-sense connection” between Petitioner’s money laundering offense and the delivery of a health care item or service.  Id. at 7 (“Petitioner’s criminal offense – receiving a share of the proceeds she knew derived from fraudulent submissions to state health care programs for the delivery [of] unnecessary services – is not merely connected to but could not have occurred without the delivery of health care services.”).  The ALJ further found that “[b]y receiving payouts from EHC that derived from what she knew to be false and fraudulent claims, Petitioner aided in perpetuating the scheme by laundering its proceeds.”  Id.  The ALJ concluded that “Petitioner’s role in knowingly accepting proceeds from” her employer’s fraudulent claim submissions “is sufficient to warrant her exclusion within the meaning of [section 1128(a)(3)].”  Id. (citing Benny R. Bailey, DAB No. 2935, at 8-9 (2019)).  Finally, the ALJ concluded that because the I.G. had a basis to exclude Petitioner under section 1128(a)(3), Petitioner must be excluded for a minimum of five years.  Id. at 8. 

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 to determine whether the ALJ decision “is erroneous.”  Id.  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)).

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Analysis

Before the Board, Petitioner does not challenge the ALJ’s findings that her money laundering offense occurred after August 21, 1996, and is “related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”  ALJ Decision at 5-6.  Rather, Petitioner argues that her criminal offense was not committed in connection with the delivery of a health care item or service.  Notice of Appeal and Brief (NA) at 3-4; Reply at 2-6.⁶  According to Petitioner, she was not directly involved in her employer’s wrongdoing and her “passive receipt” of income is insufficient to establish the requisite connection between her money laundering offense and the delivery of a health care item or service.  NA at 5-7.  For the reasons explained below, we reject Petitioner’s arguments and affirm the ALJ Decision because it is supported by substantial evidence and not legally erroneous. 

I.        The ALJ’s conclusion that the I.G. had a legal basis to exclude Petitioner under section 1128(a)(3) of the Act is supported by substantial evidence and not legally erroneous.

Section 1128(a)(3), as implemented by 42 C.F.R. § 1001.101(c), requires the I.G. to exclude any individual convicted under federal or state law of a felony “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct . . . [i]n connection with the delivery of a health care item or service.”  Here, the I.G. was required to exclude Petitioner under section 1128(a)(3) because Petitioner was convicted of a felony offense (money laundering) relating to fraud or other financial misconduct (her employer’s false and fraudulent claim submissions) in connection with the delivery of a health care item or service (urinary drug testing).  Petitioner does not dispute that her money laundering offense related to fraud or other financial misconduct.  Instead, Petitioner argues that her offense was not committed in connection with the delivery of a health care item or service.  

While acknowledging that the “nexus” required to establish the requisite connection “is a broad one,” Petitioner asserts that “there is no nexus between her regular compensation as a part-time contract physician at EHC and the fraudulent submission of claims by the unrelated laboratories based on unnecessary UDTs performed by other EHC physicians.”  NA at 4-5.  She argues that she “never ordered any unnecessary tests; she did not manage other physicians who did order such tests; she did not supervise or direct other physicians to order such tests; she did not bill for such tests.”  Id.  And, while Petitioner concedes that she was “aware of poor medical care by other EHC physicians,”

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she claims that such knowledge “does not translate into an awareness of—let alone participation in—a fraudulent scheme.”  Id. at 6; see also id. at 10 (“[Petitioner’s] passive receipt of income cannot be considered as providing the nexus or connection required under [section 1128(a)(3)].”).  

We reject Petitioner’s attempt to recast the nature and circumstances of her felony conviction and her strained interpretation of section 1128(a)(3).  Many of the factual assertions made in Petitioner’s brief are entirely unsupported by evidence in the form of exhibits, witness testimony, or otherwise.  See, e.g., NA at 2-3, 5, 10 (asserting that Petitioner’s practice was limited to evaluating disability claimants; that she never “engaged in the traditional practice of medicine”; that she was one of several part-time contract employees at EHC; that she worked only two days per week; that she had no managerial, supervisory, or billing responsibilities; that the single payment forming the basis of her conviction was her “regular compensation as a part-time contract physician”; and that the Tennessee Board of Medical Examiners “fully reviewed” the circumstances of her guilty plea and imposed no restrictions on her license).  These factual assertions are not only unsupported by the record but also immaterial to the focal legal question, which is whether Petitioner was convicted of a felony relating to fraud or other financial misconduct in connection with the delivery of a health care item or service.  We reject Petitioner’s position on that question as contrary to the plain language of section 1128(a)(3), Board precedent, and the record evidence. 

A.       Petitioner was convicted of a felony relating to fraud or other financial misconduct in connection with the delivery of a health care item or service.

Petitioner’s attempts to disclaim awareness of her employer’s fraudulent conduct contradict the admissions in her plea agreement and the factual bases for her conviction.  For example, Petitioner suggests that she was unaware of any “fraudulent scheme” merely because she was aware of “poor medical care” by other EHC physicians and that the only fraudulent submissions were made by unrelated laboratories.  NA at 6.  Yet the very essence of Petitioner’s criminal offense turned on her knowing that her employer was engaged in a fraudulent billing scheme involving urinary drug testing and that she shared in the proceeds of that fraudulent scheme:

• “[Petitioner] knew that EHC, as structured and operated by the clinic’s owner, administrator, and medical directors, was repeatedly causing the submission of false and fraudulent claims for reimbursement for UDT that were not otherwise reimbursable.”  I.G. Ex. 2, at 2-3 (¶ 3.(c)). 

• “[Petitioner] agreed to and engaged in this transaction [receiving a transfer of funds from her employer] knowing that some of the funds were derived from a scheme engaged in by others to cause false and 
   

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  fraudulent claims for UDT testing to be submitted to health care benefit programs.  More than $10,000 of this transfer constituted proceeds from this fraud scheme.”  Id. at 3 (¶ 3.(f)). 

These are the facts that Petitioner admitted and that formed the factual bases for her felony conviction.  I.G. Ex. 2; I.G. Ex. 3.  Petitioner was not convicted, sentenced to four months in prison, and required to forfeit $280,000 due to the mere “passive receipt” of income, as she repeatedly claims.  See NA at 8-9, 11.  Rather, it was Petitioner’s knowing receipt and acceptance of the proceeds of her employer’s fraudulent billing scheme involving urinary drug testing that resulted in her money laundering conviction.  Petitioner’s attempt to recharacterize the facts of her conviction in this forum amounts to an impermissible collateral attack on her conviction.  42 C.F.R. § 1001.2007(d) (“When the exclusion is based on the existence of a criminal conviction . . . the basis for the underlying conviction . . . is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in this appeal.”); see also Laura Leyva, DAB No. 2704, at 7 (2016) (rejecting excluded individual’s assertions about her “personal role” in health care fraud and money laundering conspiracies as an impermissible collateral attack on her conviction).

Moreover, the ALJ did not err in rejecting Petitioner’s argument about her lack of direct involvement in the fraudulent billing of her employer.  ALJ Decision at 6 (“Petitioner cannot evade exclusion simply because she did not directly submit those false claims or cause them to be submitted.”).  “For a crime to be committed ‘in connection with the delivery of a health care item or service,’ the conduct underlying the criminal offense does not necessarily have to involve actual delivery . . . of a health care item or service to the patient or beneficiary.”  Ellen L. Morand, DAB No. 2436, at 9 (2012) (citing Charice D. Curtis, DAB No. 2430, at 5 (2011)).  Instead, “the Board has read the word ‘delivery’ together with the key modifying language in the phrase, ‘in connection with,’ to require a ‘common sense connection’ or ‘nexus’ between the underlying facts and circumstances of the offense and the delivery of health care items or services to individuals for their health care needs.”  W. Scott Harkonen, M.D., DAB No. 2485, at 7 (2012) (citing Morand at 9; Curtis at 5); see also Benny R. Bailey, DAB No. 2935, at 8-9 (2019) (finding common-sense connection between office manager’s money laundering conviction and the delivery of a health care item or service, where office manager admitted to improperly handling “financial transactions” involving proceeds from the unlawful “dispensation of controlled substances by means of illegitimate prescriptions” written by others).⁷

The Board has further explained that the plain language of section 1128(a)(3) “does not require proof of ‘an actual impact or effect’ on the delivery of a health care item or

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service.”  Harkonen at 10 (quoting with approval ALJ’s construction of section 1128(a)(3)).  “In the context of an exclusion provision aimed at financial misconduct, this is particularly appropriate since financial misconduct generally is not part of the actual delivery of the item or service . . . .”  Kenneth M. Behr, DAB No. 1997, at 8-9 (2005).  Accordingly, in the context of a section 1128(a)(3) exclusion, ALJs consider “the circumstances underlying the offense, taking into account, for example, whether the offense ‘related to an item or service that was delivered, that was fraudulently claimed to have been delivered, or that was intended to be delivered.’”  Harkonen at 10 (quoting Behr at 9) (emphasis added).  Here, Petitioner’s offense related to her knowing acceptance of “criminally derived property,” specifically the proceeds of “false and fraudulent claims for reimbursement for UDT that were not otherwise reimbursable.”  I.G. Ex. 2, at 2-3.  As the ALJ found, “Petitioner’s offense of conviction did not occur in isolation from the scheme [her employer] and other physicians enacted to submit false claims to state health care programs.”  ALJ Decision at 7.  We find no error in the ALJ’s conclusion that “Petitioner’s role in knowingly accepting proceeds from that scheme is sufficient to warrant her exclusion within the meaning of [section 1128(a)(3)].”  Id.

Petitioner’s reliance on Hong Lu, A.K.A. Hong Lu Henry, A.K.A. Lu Hong, DAB CR1483 (2006), is misplaced.  NA at 4, 7-10; Reply at 5.  As an initial matter, Hong Lu is an unreviewed ALJ decision, which is “neither precedential nor binding on the Board or other ALJs.”  Kimberly Jones, DAB No. 3033, at 15, n.11 (2021) (quoting Edwin L. Fuentes, DAB No. 2988, at 15 (2020)).  Thus, to whatever extent the ALJ in Hong Lu purported to develop legal parameters for section 1128(a)(3) exclusions, those parameters do not bind the Board or other ALJs.⁸  

Hong Lu is also factually distinguishable.  The petitioner in Hong Lu admitted that she was convicted of money laundering based on bank deposits made with the proceeds of her then-husband’s medical practice; however, the record evidence did not provide any context for those transactions or connect the laundered funds to any health care item or service.  See Hong Lu at 3-4 (“The absence of information makes it impossible for me to conclude what activities led to Petitioner’s criminal money laundering.”).  Notably, in finding the evidence insufficient to infer the requisite connection, the ALJ suggested one type of offense that would support an exclusion under section 1128(a)(3): 

Petitioner might have laundered funds that were the avails of unlawful activities that had to do with providing health care, including funds received from filing false or fraudulent claims. 

Id. (emphasis added).  That is precisely what the evidence shows regarding Petitioner’s money laundering conviction.  I.G. Ex. 2, at 2-3.  Petitioner was convicted of laundering

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funds that were the proceeds of an unlawful scheme to submit false and fraudulent claims for urinary drug testing.  Id.  Thus, unlike Hong Lu, the record evidence plainly establishes the factual bases for Petitioner’s money laundering conviction and a rational, common-sense connection between Petitioner’s felony offense and the delivery of a health care item or service.  ALJ Decision at 7 (“Petitioner’s criminal offense – receiving a share of the proceeds she knew derived from fraudulent submissions to state health care programs for the delivery [of] unnecessary services – is not merely connected to but could not have occurred without the delivery of health care services.”).

B.       Section 1128(a)(3) does not require proof that Petitioner engaged in health care fraud.

Petitioner further contends that the caselaw requires “a more affirmative act” to warrant an exclusion under section 1128(a)(3).  NA at 7-8 (arguing that a “common-sense” connection requires “something more than being caught in the crosshairs of someone else’s unlawful activities”).  While Petitioner concedes that she “pled guilty to money laundering—that is, receiving a payment from funds which were derived in part from ‘specified unlawful activity engaged in by others,’” she asserts that her “receipt” of such income “did not contribute to, facilitate, or encourage health care fraud.”  Id. at 9 (citations omitted); see also Reply at 3, 5-6.  Petitioner asserts that “she was uninvolved in any fraud” and contends that her exclusion is unwarranted because “[n]one of [her] actions led to health care fraud or anything resembling it.”  NA at 9-10. 

We reject Petitioner’s contention that the I.G. must show that she contributed to, facilitated, or encouraged health care fraud to establish a basis for her exclusion.  The plain language of section 1128(a)(3) imposes no such condition or limitation.  See Morand at 8 (“[T]he statutory language in the body of [section 1128(a)(3)] does not even use the phrase ‘health care fraud’ much less require a conviction for health care fraud in order to trigger a mandatory exclusion.”); Curtis at 4 (“Section 1128(a)(3) does not require that the felony conviction be for an offense specified as ‘health care fraud’ under federal or state law.”).  As explained in Curtis, “the plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud and the other types of listed offenses, not just to felonies that constitute fraud or one of the other listed offenses.”  Curtis at 4. 

While a felony conviction involving health care fraud can certainly lead to a mandatory exclusion, section 1128(a)(3) requires only that the individual be convicted of an offense “relating to” fraud or other financial misconduct “in connection with the delivery of a health care item or service.”  Section 1128(a)(3) does not require a showing of health care fraud, and we will not read such a requirement into the plain language of that provision.  Cf. Dr. Timothy Baxter, DAB No. 3074, at 26 (2022) (“The Board has long held that it will not read into the exclusion provisions requirements that are not contained in the literal language of the law.” (citations and internal quotation marks omitted)).  

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For the same reasons, we reject Petitioner’s assertion that some other “affirmative act” – apparently beyond the conduct establishing her felony conviction – is required to uphold her exclusion under section 1128(a)(3).  The caselaw does not require an affirmative act or other conduct beyond the criminal conviction itself.  Here, the conduct resulting in Petitioner’s money laundering conviction was all that is required to establish a basis for her exclusion under section 1128(a)(3). 

C.       Petitioner’s five-year exclusion is mandatory regardless of any determination by the Tennessee Board of Medical Examiners.

Petitioner further posits that the Tennessee Board of Medical Examiners (State Board) “fully reviewed” her guilty plea and did not impose any restrictions on her medical license, thus demonstrating its conclusion about her lack of “involvement” and confidence in her “trustworthiness to continue practicing medicine.”  NA at 3, 9.  As an initial matter, there is no record evidence that the State Board reviewed Petitioner’s guilty plea or conviction and no evidence about any determination made by the State Board concerning Petitioner.  We therefore reject Petitioner’s argument for that reason alone.  See Baldwin Ihenacho, DAB No. 2667, at 10 (2015) (“[O]ur decision is based on record facts and the law, not characterizations in either party’s brief.”). 
Moreover, Petitioner’s assertions about the State Board’s determinations, even if true, provide no basis to reverse the ALJ Decision.  Regardless of what the State Board may have decided about Petitioner’s medical license or her trustworthiness to practice medicine, Petitioner’s exclusion from all federal health care programs is mandatory because her conviction falls within the scope of section 1128(a)(3).  The I.G. does not have discretion to decline to impose a section 1128(a)(3) exclusion merely because the convicted individual was allowed to retain their medical license.  See Behr at 9 (“The introductory language of section 1128(a) provides that the I.G. ‘shall exclude’ individuals who meet the criteria of section 1128(a).”).  Having concluded that there was a basis to exclude Petitioner under section 1128(a)(3), the ALJ was bound to uphold Petitioner’s exclusion.  See Gregory J. Salko, M.D., DAB No. 2437, at 6 (2012) (finding no authority to ignore the requirement of a mandatory exclusion under section 1128(a) based on a different determination made by a different agency under different statutory and regulatory provisions); see also Rita Patel, DAB No. 2884, at 7 (2018) (rejecting equitable considerations as a basis to overturn a mandatory exclusion).

Petitioner further notes that “only those individuals who have behaved in an untrustworthy manner should be excluded from federal health care programs.”  NA at 9.    But, “[a] provider who has been convicted of a crime described in section 1128(a) is presumed by Congress to be untrustworthy and a threat to federal health care programs and their beneficiaries and recipients.”  Harkonen at 22.  Here, the evidence relating to Petitioner’s felony money laundering offense, as discussed above, demonstrates that Petitioner’s behavior was untrustworthy in that she knowingly accepted and shared in the

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proceeds of her employer’s fraudulent billing scheme involving urinary drug testing.  We find that Petitioner’s exclusion comports with the remedial purpose of the Act.

We further affirm Petitioner’s five-year exclusion because the applicable regulations “expressly preclude the ALJ (and hence the Board in its review of the ALJ Decision) from finding ‘invalid or refusing to follow Federal statutes or regulations,’ including the five-year minimum period for a mandatory exclusion.”  Harkonen at 22 (citing 42 C.F.R. § 1005.4(c)(1)).

Conclusion

We affirm the ALJ Decision.

Endnotes

¹  Section 1128 of the Act is codified at 42 U.S.C. § 1320a–7.

²  The offense must also have occurred after August 21, 1996, the date of the enactment of the Health Insurance Portability and Accountability Act of 1996.  Act § 1128(a)(3); see also 42 C.F.R. § 1001.101(c).  There is no dispute Petitioner’s offense met this condition.

³  Background information is drawn from the ALJ Decision and the record before the ALJ and is not intended to substitute for the ALJ’s findings.

⁴  The elements of a violation under 18 U.S.C. § 1957 are as follows:  (a) the defendant knowingly engaged in a monetary transaction; (b) the monetary transaction was in property derived from specified unlawful activity; (c) the property had a value greater than $10,000; (d) the defendant knew that the transaction was in criminally derived property; and (e) the monetary transaction look place within the United States.  I.G. Ex. 2, at 2.

⁵  P. Ex. 1 is a duplicate copy of I.G. Ex. 3.  P. Ex. 2 is substantively the same as I.G. Ex. 2, except P. Ex. 2 bears the signature of the district court judge and was date-stamped and filed in Court on October 3, 2023.

⁶  The Notice of Appeal and Brief are two separate documents filed by Petitioner as one PDF.  We cite to the page numbers in the brief accompanying the notice of appeal.  After the I.G. submitted its response, Petitioner filed a motion requesting leave to submit a reply, along with her reply brief, which repeats many of the same arguments made in Petitioner’s opening brief.  The Board grants Petitioner’s motion to submit a reply and has fully considered all arguments presented by Petitioner.

⁷  Section 1128(a)(3) was added in 1996 to broaden the I.G.’s exclusion authority.  See Kenneth M. Behr, DAB No. 1997, at 7, n.5 (2005).  “There is no legislative history that indicates Congress intended the wording ‘in connection with’ to require something more than a nexus between an offense and the delivery of a health care item or service.”  Harkonen at 9, n.4; see also Behr at 7, n.5.

⁸  The ALJ asserted, for example, that “the crime must have some impact on the delivery of health care in order to be connected to it.”  Hong Lu at 2.  The ALJ cited no authority for that assertion and, in other cases, the Board rejected similarly narrow interpretations.  See, e.g., Harkonen at 6-10.