Cesar Sturla, DAB No. 3217 (2025)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Cesar Sturla (Petitioner) appeals the July 18, 2025 decision of an Administrative Law Judge (ALJ) captioned Cesar Sturla, M.D., DAB CR6734 (2025) (ALJ Decision).  The ALJ Decision upheld the determination of the Inspector General (I.G.) to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs for 16 years under section 1128(a)(1) of the Social Security Act (Act).  We affirm the ALJ Decision for the reasons stated below.

Legal Background 

The Secretary of the Department of Health and Human Services must exclude from participation in all federal health care programs any individual who “has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.”  Act § 1128(a)(1); accord 42 C.F.R. § 1001.101(a).

For an exclusion under section 1128(a)(1) of the Act, “the minimum period of exclusion shall be not less than five years,” and may exceed five years if any regulation-specified aggravating factor is present.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a)-(b).  Three such aggravating factors are relevant here.  The first is that “[t]he acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more.”  42 C.F.R. § 1001.102(b)(1).  The second is that “[t]he sentence imposed by the court included incarceration.”  Id. § 1001.102(b)(5).  The third is that “[t]he 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.”  Id. § 1001.102(b)(9).

If the I.G. determines that one or more aggravating factors justify an exclusion longer than five years, the I.G. may consider only three specified mitigating factors as a basis for reducing the exclusion period to no less than five years.  See id. § 1001.102(c).

Page 2

An excluded individual may request a hearing before an ALJ on the issues of whether the I.G. had a basis for imposing the exclusion and whether an exclusion longer than the required minimum period is unreasonable.  Id. §§ 1005.2(a), 1001.2007(a)(1).  A party dissatisfied with the ALJ’s decision may appeal it to the Board.  Id. § 1005.21(a).

Case Background1

Petitioner was a physician in Michigan who had been licensed to practice medicine for over 35 years.  ALJ Decision at 3; I.G. Ex. 2, at 5; P. Br. to ALJ at 1-2.

In October 2021, the United States Department of Justice charged Petitioner by Criminal Information in the United States District Court for the Eastern District of Michigan (Federal Court).  I.G. Ex. 2.  The Information charged Petitioner with one count of Health Care Fraud under 18 U.S.C. §§ 1347 and 2.  Id. at 6-10.  The Petitioner allegedly “ordered braces that were medically unnecessary, for patients with whom he lacked a pre-existing doctor-patient relationship, without a physical examination, without communicating with the Medicare beneficiary, and frequently without reviewing the patient information that was provided to him.”  Id. at 8.  The Petitioner also allegedly “falsely represented” that he had performed particular diagnostic tests and “concealed the fact that he never saw the beneficiaries face-to-face, and never had any telephone conversations with the beneficiaries” for whom he fraudulently submitted Durable Medical Equipment [DME] orders.  Id.

Petitioner agreed to plead guilty to one count of Health Care Fraud in violation of 18 U.S.C. § 1347.  I.G. Ex. 3.  In connection with the plea, Petitioner acknowledged that he “accepted kickbacks in exchange for signing doctors’ orders that were provided to him electronically . . . for medically unnecessary DME, including wrist, back, and shoulder braces.”  Id. at 3.  Petitioner admitted that the orders he signed “were used to fraudulently bill Medicare at least $1,817,004.69 for medically unnecessary DME.”  Id. at 4.  Petitioner acknowledged that as a result of his guilty plea he would “be excluded from Medicare, Medicaid, and all Federal health care programs.”  Id. at 9.

On April 23, 2024, the Federal Court accepted Petitioner’s guilty plea and entered a criminal judgment that Petitioner was guilty of one count of health care fraud under 18 U.S.C. § 1347.  I.G. Ex. 4, at 1.  The Federal Court imposed a $922,006.31 restitution obligation, named the Centers for Medicare & Medicaid Services as the victim, and sentenced Petitioner to 20 months of imprisonment with one subsequent year of supervised release.  Id. at 2, 6.

Page 3

In May 2024, the State of Michigan Board of Medicine (Michigan Board) suspended Petitioner’s license to practice as a medical doctor in that state.  I.G. Ex. 5, at 2.  The Michigan Board stated that the suspension was “compel[led] . . . if a licensee is convicted of a felony.”  Id. at 3.  The Michigan Board explained that “[b]ased on [Petitioner’s] conviction . . . the [Michigan Board’s Disciplinary Subcommittee] concludes that the public health, safety, and welfare requires emergency action” in issuing the suspension order.  Id. 

The I.G. notified Petitioner by letter dated September 30, 2024 that he was excluded for 17 years (beginning 20 days from the letter’s date) from participation in all federal health care programs pursuant to section 1128(a)(1) of the Act.  ALJ Decision at 1; I.G. Ex. 1, at 1.  The Notice of Exclusion explained that the exclusion was due to Petitioner’s conviction “of a criminal offense related to the delivery of an item or service under Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items of services under any such program.”  ALJ Decision at 1-2; I.G. Ex. 1, at 1.  The I.G. cited four aggravating factors.  I.G. Ex. 1, at 1-2 (stating factual bases for applying aggravating factors in 42 C.F.R. § 1001.102(b)(1), (2), (5), and (9)).

Petitioner requested an ALJ hearing, “conced[ing] that the [I.G.] has a basis for imposition of an exclusion” but arguing that the exclusion period be reduced to five years.  Request for Hearing at 5-10.  The I.G. filed a brief and five exhibits, arguing that the requirements for excluding Petitioner under section 1128(a)(1) of the Act were met and the evidence established four aggravating factors and no mitigating factors.  ALJ Decision at 2; I.G. Br. to ALJ; I.G. Exs. 1-5.  The I.G. argued that the original 17-year exclusion term was “reasonable” in light of the four originally cited aggravating factors.  I.G. Br. to ALJ at 6-11.  The I.G. argued that case comparisons Petitioner cited were “of limited value because the consideration of aggravating factors is an inherently case-specific analysis.”  Id. at 9.  Petitioner then filed an informal brief, second brief, and three exhibits.  ALJ Decision at 2; P. Informal Br. to ALJ; P. Br. to ALJ; P. Exs. 1-3.

On April 24, 2025, the I.G. filed a notice amending the original Notice of Exclusion, and reducing Petitioner’s exclusion term to 16 years (Amended Notice).  I.G. Ex. 6.  The reduction was based on the “reevaluation of the aggravating circumstances,” and the removal of the aggravating factor at 42 C.F.R. § 1001.102(b)(2), which is applicable when “[t]he acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.”  42 C.F.R. § 1001.102(b)(2).

Following the filing of the Amended Notice, the ALJ issued an Order “providing Petitioner with the opportunity to respond to the [I.G.’s] [A]mended [N]otice.”  ALJ Decision at 2; ALJ Order Permitting Sur-Reply.  Petitioner filed a sur-reply on June 13, 2025.  ALJ Decision at 2.

Page 4

On July 18, 2025, the ALJ issued a decision on the written record because neither party had requested an in‑person hearing.  ALJ Decision at 2-3.  Id.  The ALJ held that the I.G. properly excluded Petitioner under section 1128(a)(1) of the Act because Petitioner was convicted of a felony offense related to the delivery of an item or service under Medicare or a state health care program, which Petitioner did not dispute.  Id. at 5.  The ALJ concluded that the 16-year exclusion the I.G. imposed “is not unreasonable based on the facts and circumstances of this case,” applying the three aggravating factors (and no mitigating factors) that remained after the I.G.’s Amended Notice.  Id. at 11.

Petitioner timely appealed the ALJ’s Decision to the Board.  Notice of Appeal (NA).  The I.G. submitted a brief in response.  I.G.’s Resp. (I.G. Br.).  The record now is closed.

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” and reviews a disputed issue of law as to whether the ALJ decision “is erroneous.”  42 C.F.R. § 1005.21(h).

Analysis

Before the Board, Petitioner “concede[s] that the I.G. had a basis for imposition of an exclusion in this case” and that “the only issue is whether the length of [Petitioner’s] exclusion is unreasonable.”  NA at 4.  Accordingly, Petitioner raises two primary arguments before the Board.  First, Petitioner argues that the ALJ improperly admitted the Amended Notice – which held that one of the four originally-cited aggravating factors did not apply – and therefore “reset the proceedings.”  Id. at 5-7; I.G. Ex. 6.  Second, Petitioner alleges that the ALJ “was incorrect to ignore comparisons to other cases” in determining that the 16-year exclusion was not unreasonable and that the elimination of one aggravating factor in the Amended Notice should have resulted in a larger decrease in the exclusion term.  Id. at 7-8.

The I.G. asks the Board to affirm the ALJ Decision, arguing that Petitioner has not “provide[d] any evidence to show that the 16-year exclusion was unreasonable.”  I.G. Br. at 5-6.  The I.G. states that issuance of the Amended Notice caused “no harm” to Petitioner, who filed a sur-reply before the ALJ after receiving the Amended Notice.  Id. at 3-4.  Finally, the I.G. states that Petitioner “appears to argue that there are mitigating factors present in this case” but “none of these arguments pertain to any of the three regulatory mitigating factors that may be considered to decrease a period of exclusion.”   Id. at 5.

We affirm the ALJ Decision for reasons explained below.

Page 5

1. Petitioner has established no prejudicial error resulting from the issuance of the Amended Notice.

We first reject Petitioner’s claim that “the I.G. attempted to circumvent the power given to an ALJ” by issuing an amended exclusion notice to Petitioner during proceedings before the ALJ.  See NA at 6.  The ALJ addressed Petitioner’s concerns by issuing an order on June 3, 2025 allowing Petitioner to “file a sur-reply . . . on the limited issue of the revised exclusion duration.”  ALJ Order Permitting Sur-Reply.  Petitioner opted to file a sur-reply to the Amended Notice, doing so on June 13, 2025.  P. Sur-Reply Br.

Petitioner has shown no prejudice from the Amended Notice.  Though Petitioner contends that the Amended Notice improperly “reset the proceedings,” we have held that “[a]bsent a showing of actual prejudice, the Board will not find that a party has been denied due process based on improper notice of a federal agency’s adverse determination.”  ALJ Decision at 6; Norman Johnson, M.D., DAB No. 2779, at 16 (2017).  We have rejected arguments, like Petitioner’s, that the I.G.’s supposed failure to properly serve a notice of exclusion deprived the excluded individual of due process and the opportunity to defend himself.  Michael W. Lawrence, DPM, DAB No. 2983, at 7 (2020).  We have explained that “the redress afforded under the Act and regulations for the I.G.’s procedural actions was for the ALJ to give Petitioner a full opportunity to present his case on the . . . exclusion and for the ALJ to review the merits of the appeal,” as occurred in this case.  Id.  In Lawrence, as here, “[t]he result of that review is a factually and legally sound decision that correctly affirmed the . . . exclusion.”  Id. 

The Board previously has found no error when, as here, an ALJ considered an amended notice of exclusion that reduced the original exclusion period while the case was pending before the ALJ.  Phong Hung Tran, M.D., DAB No. 3120 (2023).  In Tran, the I.G. “issued an amended exclusion notice that reduced the exclusion” during the ALJ proceedings, but on appeal to the Board the petitioner presented new mitigating evidence that prompted the I.G. to issue a second amended notice further reducing the exclusion period.  Id. at 1 & n.1, 4-9.  That development, the Board held, warranted a remand to the ALJ, but emphasized that the ALJ Decision was otherwise “free of legal error.”  Id. at 1; see also id. at 15 (stressing that ALJ’s determination was “consistent with the record that was before the ALJ” and “[w]e are not stating that the ALJ’s decision was erroneous”).  In short, the Board found remand appropriate only because the I.G.’s “second amended exclusion notice,” issued after the ALJ’s decision, had raised an issue that the ALJ had “not had an opportunity to consider.’  Id.  That is not the case here, where the ALJ reasonably considered the Amended Notice and gave Petitioner an opportunity to address it before issuing the ALJ Decision.  Therefore, Petitioner has shown no basis for remand or reversal of the ALJ Decision.

Page 6

2. The I.G. lawfully excluded Petitioner from all federal health care programs for a minimum of five years pursuant to section 1128(a)(1) of the Act.

Petitioner does not seek reversal of the ALJ’s determination that the I.G. had a legal basis to exclude Petitioner under section 1128(a)(1) of the Act for at least the statutory minimum of five years.  See ALJ Decision at 5; NA at 4.  Therefore, we proceed to address Petitioner’s arguments concerning the reasonableness of the 16-year term of exclusion.

3. The evidence established three aggravating factors under section 1001.102(b) and no cognizable mitigating factors under section 1001.102(c).

The ALJ found that the I.G. proved the applicability of three aggravating factors at 42 C.F.R. § 1001.102(b)(1), (5), and (9), and Petitioner “has conceded the existence of three of the four aggravating factors in his case.” ALJ Decision at 6-8; NA at 5.

The ALJ determined that the record “provides no evidence of mitigating factors,” ALJ Decision at 8-9, and we perceive no error in that determination.  Though stating that he “has pled guilty and taken responsibility for his actions” and “has a wife and two children who rely on him for support,” Petitioner does not specifically contest the ALJ’s findings that none of the three permissible mitigating factors applies.  NA at 3.  To the extent Petitioner argues that the exclusion period should be reduced in consideration of the circumstances he describes, the regulations bar consideration of any mitigating factors other than the specified three.  42 C.F.R. § 1001.102(c) (prefacing the three mitigating factors with, “[o]nly the following factors may be considered mitigating”); Erik X. Alonso, DAB No. 3186, at 8 (2025) (citing Waleed Khan, DAB No. 3083, at 2 (2023)) (“[T]he ALJ and Board may consider only the three mitigating factors specified in 42 C.F.R. § 1001.102(c)).”  Therefore, we find no error in the ALJ’s determination that the record establishes three aggravating factors and no mitigating factors.

4. Petitioner’s period of exclusion fell within a reasonable range.

“An ALJ reviews the length of an [I.G.] exclusion de novo to determine whether it falls within a reasonable range,” considering all applicable aggravating and mitigating factors.  Hussein Awada, M.D., DAB No. 2788, at 5 (2017).  By design, the I.G. has “broad discretion” in determining an exclusion’s length, and so long as the I.G. chooses an amount of time “within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it.”  57 Fed. Reg. 3,298, 3,321 (Jan. 29, 1992).  This deference by the ALJ is appropriate, given the I.G.’s “vast experience in implementing exclusions under these authorities.”  Id.; see Edwin L. Fuentes, DAB No. 2988, at 9 (2020) (“The 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

Page 7

appeals process.”), aff’d, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021).

Concerning the governmental loss aggravating factor at 42 C.F.R. § 1001.102(b)(1), the ALJ summarized that Petitioner was ordered to pay $922,006.31 in restitution to Medicare.  ALJ Decision at 7.  Concerning the section 1001.102(b)(5) factor of incarceration, the ALJ found that Petitioner’s 20-month incarceration “reflects the seriousness of Petitioner’s offense, justifying a longer period of exclusion.”  Id.  The ALJ stated that the I.G. established the section 1001.102(b)(9) factor of “adverse action by any . . . board” by virtue of Petitioner’s medical license suspension for the same circumstances that caused the exclusion to be imposed.  Id. at 8.  As for mitigation, the ALJ summarized that the Petitioner had not established any mitigating factors.  Id. at 8-9.

The ALJ did not err in determining that the 42 C.F.R. § 1001.102(b)(1) factor supports an exclusion period longer than the minimum.  Petitioner attempts to minimize the financial impact of his crime to the Medicare program by asserting that he “only personally gained $58,470” from the criminal scheme to which he pled guilty.  NA at 3.  The Federal Court ordered Petitioner to pay $922,006.31 in restitution and, as the ALJ properly recognized, “it is well-established that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program.”  I.G. Ex. 4, at 6; ALJ Decision at 7; see Craig Richard Wilder, DAB No. 2416, at 9 (2011) (“The ALJ correctly concluded that restitution has long been considered a reasonable measure of program loss. . . .”); accord Michael D. Miran, Esta Miran, & Michael D. Miran, Ph.D. Psychologist P.C., DAB No. 2469, at 5 (2012).  Accordingly, the restitution amount ordered by the Federal Court supports the reasonableness of the exclusion term.

Likewise, the ALJ did not err in determining that the I.G. properly considered the 42 C.F.R. § 1001.102(b)(5) factor in imposing an exclusion period longer than the minimum.  The Board has “held that any incarceration period, however short, justifies increasing an exclusion and even eight months of incarceration is a relatively substantial period.”  Alonso at 11 (citing Richard E. Bohner, DAB No. 2638, at 18 (2015), aff’d, No. 15-4088, 2016 WL 8716339 (E.D. Pa. Dec. 2, 2016)).  Petitioner was sentenced to 20 months of incarceration in addition to a year of supervised release, and we see no error by the ALJ in holding that “[t]his substantial prison term reflects the seriousness of Petitioner’s offense.”  I.G. Ex. 4, at 2-3; ALJ Decision at 7.

Regarding the 42 C.F.R. § 1001.102(b)(9) factor, the ALJ also did not err in concluding that Petitioner’s license suspension supports the length of the exclusion.  ALJ Decision at 8; see Kimberly Jones, DAB No. 3033, at 13-14 (2021) (holding “[t]he ALJ committed no legal or factual error in assigning independent weight to the aggravating factor in section 1001.102(b)(9) as required by the regulations” for the excluded individual’s professional license suspension, or in treating it as one of “three aggravating factors, all of which warrant significant weight”); see also Roji Esha, DAB No. 3076, at 18 (2022)

Page 8

(holding that the ALJ erred in concluding this factor “warranted no additional lengthening of” exclusion, and stating that “[t]o be clear, the bare fact of establishing the aggravating factor at section 1001.102(b)(9) permitted the I.G. to extend the exclusion period by some amount.”).

Petitioner argues that the I.G. should have reduced Petitioner’s exclusion period by more than only one year after removing an aggravating factor because “simple division outputs three years per factor [and] eliminating one aggravating factor, and then reducing the exclusion period by only one year is improper.”  NA at 7.  However, as Petitioner concedes, “it cannot be assumed that each aggravating factor is given the exact same weight.”  Id.  In fact, an evaluation of an exclusion term “does not rest on the specific number of aggravating or mitigating factors or 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.”  Esha at 26 (citing Jones at 7) (internal quotation marks omitted).  Therefore, we find no evidence that the removal of a single aggravating factor necessitates the subtraction of further time from the exclusion term, beyond that which the Amended Notice already granted and that the ALJ found reasonable, for the reasons discussed above.

We further reject Petitioner’s assertion that “[p]revious decisions regarding the length of exclusions continue to support [Petitioner’s] assertion that his exclusion is unreasonable.”  NA at 7.  The Board has previously held that when “reviewing whether the length of an exclusion exceeding the statutory minimum is unreasonable, 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.”  Chaim Charles Steg, DAB No. 3115, at 17 (2023) (quoting Robert Hadley Gross, DAB No. 2807, at 6 (2017), aff’d, No. 1:17-cv-01801, 2023 WL 5094912 (D.D.C. Aug. 9, 2023)) (cleaned up and internal quotation marks omitted.)  A term of exclusion is justified by the individual circumstances presented in each case.  In this case, Petitioner pled guilty to health care fraud, the consequences of which – paying more than $900,000 in restitution, receiving a sentence that included a significant amount of incarceration, and having his medical license suspended – indicate that Petitioner has caused a significant harm to the Medicare program, justifying a significant period of exclusion for the protection of the Medicare program.

We thus see no error in the ALJ’s conclusion that the 16-year exclusion “is not unreasonable based on the circumstances of this case.”  ALJ Decision at 11.  The ALJ’s upholding of Petitioner’s 16-year exclusion period appropriately addresses “the overarching issue in determining whether the length of an exclusion is reasonable,” which “is whether it is consistent with the statutory purpose of protecting federal health care programs and their beneficiaries.”  See Sushil Aniruddh Sheth, M.D., DAB No. 2491,

Page 9

at 11 (2012), appeal dismissed in part & summarily affirmed in part, No. 13-cv-0448, 2014 WL 11813597 (D.D.C. Jan. 10, 2014), appeal dismissed per curiam, No. 14-5179, 2015 WL 3372286 (D.C. Cir. May 7, 2015).  A scheme to submit false and fraudulent claims – such as the one to which Petitioner pled guilty – “not only threatens the fiscal integrity of the Medicare . . . program[]; it harms beneficiaries” of Medicare “by wasting resources that could otherwise be used to provide them with needed services.”  Alonso at 12 (quoting Gross at 8).  Thus, in our assessment as in the ALJ’s, 16 years is not an unreasonable exclusion period here.

Conclusion

We affirm the ALJ Decision.