SUBJECT:

Stacy Ann Battle, D.D.S., P.C.,

Petitioner,

The Inspector General

DECISION

I affirm the determinations of the Inspector General (I.G.) to exclude Stacy Ann Battle, D.D.S., and Stacy A. Battle, D.D.S., P.C. (Petitioners), from participation in Medicare, Medicaid, and all other federal health care programs for a period of 10 years. I find that the I.G.'s determinations have a proper basis and that the 10-year exclusions are not unreasonable.

PROCEDURAL HISTORY

Petitioners were notified of their respective exclusions by separate letters dated July 31, 2001. The I.G. cited section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)) as the basis for Petitioner Stacy Ann Battle, D.D.S.'s exclusion. Petitioner, Stacy A. Battle, D.D.S., P.C. (the corporate Petitioner), was excluded pursuant to section 1128(b)(8) of the Act (42 U.S.C. § 1320a-7(b)) due to its association with Stacy Ann Battle, D.D.S. Petitioners jointly appealed from the I.G.'s actions, through their single counsel, by letter dated September 14, 2001.

On October 1, 2001, the case was assigned to administrative law judge (ALJ) Alfonso J. Montano for hearing and decision. On October 18, 2001, the case was reassigned to me. On November 13, 2001, I convened a telephone prehearing conference, the substance of which is memorialized in my order of the same date. The parties agreed during the conference that this matter may be decided on briefs and a hearing is not necessary.

The I.G. filed its motion for summary affirmance and its supporting brief with attached exhibits 1 through 9 (I.G. Ex.) on December 21, 2001 (I.G. Brief). Petitioners filed their brief in opposition with exhibits 1 and 2 (P. Ex.) on February 11, 2002 (P. Brief). The I.G. filed its reply brief on March 13, 2002 (I.G. Reply). No objections have been made to the admissibility of the offered exhibits and I.G. Exs. 1 through 9 and P. Exs. 1 and 2 are admitted.

The parties have identified no material issues of fact in dispute. Thus, I determine that summary judgment is appropriate and no hearing is necessary in this case for a full and fair disposition of the issues presented.

FINDINGS OF FACT

The following findings of fact are based upon the uncontested and undisputed assertions of fact in the parties pleadings and the exhibits admitted.

1. Petitioner, Stacy Ann Battle, D.D.S., was, on the date of the I.G. action, a dentist licensed by the State of Missouri and authorized to participate in Medicare, Medicaid or other federal health care programs. I.G. Ex. 3, at 12; I.G. Ex. 8; I.G. Brief at 5; P. Brief at 2.

2. Petitioner, Stacy A. Battle, D.D.S., P.C., was, on the date of the I.G. action, a professional corporation located in the State of Missouri and authorized to participate in Medicare, Medicaid or other federal health care programs. I.G. Ex. 3, at 12; I.G. Ex. 8; I.G. Brief at 5; P. Brief at 2.

3. Petitioner Stacy Ann Battle, D.D.S., was, at the time of the I.G. action, an owner or principal stockholder of Petitioner Stacy A. Battle, D.D.S., P.C., with a direct or indirect ownership or control interest of five percent or more. I.G. Ex. 4; P. Brief at 2.

4. On October 19, 1999, Judge Gary A. Fenner, U.S. District Court, Western District of Missouri, found Stacy Ann Battle, D.D.S. guilty, pursuant to her pleas, of a misdemeanor offense of conversion of government money by "making a false entry on a patient record containing a material fact supporting an application for a payment under a federal health care program" after June 20, 1997 but before December 31, 1997. I.G. Exs. 3, 5, 6, and 7.

5. On February 4, 2000, Petitioner Stacy Ann Battle, D.D.S., was sentenced to four months confinement followed by one year of supervised release and to pay a fine of $10,000. I.G. Exs. 3 and 7.

6. By letters dated July 31, 2001, the I.G. advised Petitioners that they were being excluded from further participation in Medicare, Medicaid or other federal health care programs for a period of 10 years, effective 20 days after the date of the letters. I.G. Exs. 1 and 2.

7. The I.G.'s decisions to exclude were based upon Petitioner Stacy Ann Battle, D.D.S.'s conviction, as described in Finding 4, and the corporate Petitioner's association with Petitioner Stacy Ann Battle, D.D.S., as described in Finding 3. I.G. Exs. 1 and 2.

8. Three aggravating factors exist that justify an extended period of exclusion in this case: (a) the financial loss to the government exceeded $1,500; (b) the sentence imposed included incarceration; and (c) Petitioner Stacy Ann Battle, D.D.S. was subject to adverse action by the State of Missouri, which terminated her participation in the State Medicaid program based on her conviction. I.G. Exs. 1 and 2.

CONCLUSIONS OF LAW

1. Summary judgment is appropriate in this case as there are no material facts in dispute.

2. Petitioner Stacy Ann Battle, D.D.S.'s conviction was a criminal offense related to the delivery of a health care item or service under the Medicaid Program within the meaning of the Act, section 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1).

3. Petitioner Stacy Ann Battle, D.D.S. must be excluded from participation in any federal health care program pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)) for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) due to her conviction.

4. The corporate Petitioner, Stacy A. Battle, D.D.S., P.C., may be excluded from participation in any federal health care program pursuant to section 1128(b)(8)(A) of the Act (42 U.S.C. § 1320a-7(b)(8)(A)), for a period equivalent to that imposed upon Petitioner Stacy Ann Battle, D.D.S. (42 C.F.R. § 1001.1001(b)) due to her conviction and ownership, control and/or management and control of the corporate Petitioner.

5. The I.G. may increase the term of exclusion based on a finding of any of the aggravating factors specified at 42 C.F.R. § 1001.102(b).

6. If the I.G. finds that any of the aggravating factors specified at 42 C.F.R. § 1001.102(b) justify a term of exclusion greater than the statutory minimum exclusion of five years, then the I.G. may consider the mitigating factors specified at 42 C.F.R. § 1001.102(c) to reduce the period of exclusion to no less than five years.

7. The range of exclusionary periods contemplated by the Act and the Secretary's regulations extend from a minimum of five years to permanent exclusion, in the case of a mandatory exclusion under section 1128(a). See Act, § 1128(c)(3)(B) and (G) (42 U.S.C. § 1320a-7(c)(3)(B) and (G); 42 C.F.R. §§ 1001.102(a) and (d).

8. Three aggravating factors have been established by the I.G. by a preponderance of evidence: (a) Petitioner Battle's criminal acts resulted in a loss to the government of $1500 or more; (b) the sentence imposed by the court included a period of incarceration; and (c) Petitioner Stacy Ann Battle, D.D.S. was subject to adverse action by the State of Missouri which terminated her participation in the State Medicaid program based on her conviction.

9. None of the mitigating factors specified at 42 C.F.R. § 1001.102(c) have been proven by Petitioners, who bear the burden to make such showing.

10. The 10-year exclusion (five years mandatory and a five-year extension) ordered by the I.G. is within a reasonable range and is not unreasonable.

DISCUSSION

A. Applicable Law

Petitioners' right to a hearing by an ALJ and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Petitioner's joint request for a hearing was timely filed and I do have jurisdiction. However, the Secretary has by regulation limited my scope of review to two issues: (1) whether there is a basis for the imposition of the sanction; and, (2) whether the length of the exclusion is unreasonable. 42 C.F.R. § 1001.2007(a)(1). The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction which is the basis for the exclusion. 42 C.F.R. § 1001.2007(c) and (d). Pursuant to 42 C.F.R. § 1005.4(c)(5), I have no authority to review the I.G.'s discretionary decision to actually exclude the corporate Petitioner, Stacy A. Battle, D.D.S., P.C., pursuant to section 1128(b) of the Act. Pursuant to 42 C.F.R. § 1001.1001(b) the length of exclusion of the corporate Petitioner is automatically the same length as that for Petitioner Stacy Ann Battle, D.D.S.

Pursuant to section 1128(a)(1) of the Act, the Secretary may exclude from participation in the Medicare and Medicaid programs any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Title XVIII or under any State health care program. Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(1) of the Act shall be for a minimum period of five years, unless specified aggravating or mitigating factors are present which form the basis for lengthening or shortening the period of exclusion. See also 42 C.F.R. § 1001.102(a), (b), and (c). Only if the aggravating factors justify an exclusion of longer than five years may mitigating factors be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

Section 1001.102(b) of 42 C.F.R. provides, in relevant part, that the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion:

(1) [t]he acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more other entities of $1500 or more. (The entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made) . . .; (5) [t]he sentence imposed by the court included incarceration . . .; and, (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 imposition of the exclusion.

42 C.F.R. § 1001.102(b)

Section 1001.102(c) of 42 C.F.R. provides that only if any of the aggravating factors justify a period of exclusion longer than five years, may mitigating factors be considered as a basis for reducing the period of the exclusion to no less than five years. The following factors may be considered as mitigating and a basis for reducing the period of exclusion:

(1) [t]he individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1500; (2) [t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional, or physical condition before or during the commission of the offense that reduced the individual's culpability; or (3) [t]he individual's or entity's cooperation with Federal or State officials resulted in - (i) [o]thers being convicted or excluded from Medicare, Medicaid, or all other Federal health care programs, (ii) [a]dditional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or (iii) [t]he imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

42 C.F.R. § 1001.102(c).

Evidence which does not relate to an aggravating factor or a mitigating factor is irrelevant to determining the length of an exclusion. The burden is upon Petitioners to show the presence of mitigating factors. The I.G. bears the burden of proving the existence of aggravating factors. 42 C.F.R. § 1005.15; John (Juan) Urquijo, DAB No. 1735 (2000).

B. Issues

1. Whether there is an appropriate basis for the exclusion of Petitioner Stacy Ann Battle, D.D.S.

2. Whether there is an appropriate basis for the exclusion of Petitioner Stacy A. Battle, D.D.S., P.C.

3. Whether the length of exclusion imposed upon Petitioners was unreasonable.

C. Analysis

1. Summary judgment is appropriate.

Summary disposition is appropriate where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary disposition must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c).

I find no objection by the parties to any of the exhibits. Furthermore, I find no objections by either party to the factual assertions contained in the briefs of opposing parties and any or all asserted facts may be accepted as true. Because I find no inconsistencies in the facts alleged by the parties and no specific factual disputes have been identified by the parties, I conclude there are no disputed issues of material fact. The issues may thus be decided by application of the law to the undisputed facts and summary judgment is appropriate.

2. There was an appropriate basis for the exclusion of Petitioner Stacy Ann Battle, D.D.S.

Petitioners do not dispute that Petitioner Stacy Ann Battle, D.D.S. was convicted of a misdemeanor charge of conversion of government funds. Petitioners also do not dispute that the conviction is an appropriate basis for the exclusion of Petitioners. Rather, Petitioners argue two distinct theories: (1) the I.G. is estopped from imposing an exclusion based upon a letter from a member of the I.G.'s staff that indicates no exclusion will be imposed; or, (2) the exclusion should be pursuant to the permissive exclusion provisions of section 1128(b)(1)(A)(i) of the Act (42 U.S.C. § 1320a-7(b)(1)(A)(i)) with a lesser period of exclusion rather than pursuant to the mandatory exclusion provisions of section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)) with its mandatory minimum exclusion of five years.

a. Estoppel does not bar the exclusions in this case.

Petitioners argue that no exclusion should be permitted because, by letter dated February 9, 2001, signed by Calvin Anderson, Jr., Director of Health Care Administrative Sanctions, Office of Investigations, they were advised that an investigation had been completed and no exclusion would be imposed. Petitioners' Brief at 2-3; P. Ex. 1. The I.G. does not deny that the letter is authentic and that it was sent to Petitioners. Rather, the I.G. attempts to recast the letter as "a conditional letter informing her [Petitioner Stacy A. Battle, D.D.S.] that the I.G. was contemplating subsequent action against her," that a proposal to exclude was pending before the I.G., and that no final decision had been made. The I.G.'s tortured interpretation of the letter strains credibility. ⁽¹⁾ The February 9, 2001 letter is simple in its content and intent; clearly stating that Petitioner Stacy A. Battle, D.D.S. was previously "advised" that an exclusion action was being proposed based upon her conviction, but that the file had been reviewed and no exclusion action would be "implemented," and that the file was closed and no further action was anticipated. Petitioners argue that in light of the February 9, 2001 letter, it is unfair to allow the I.G. to proceed on the exclusions of July 31, 2001, and Petitioners assert the equitable doctrine of estoppel as a bar to the I.G. action.

One generally accepted limitation upon my jurisdiction is that I do not have the authority to hear and decide claims of estoppel against the Secretary. GranCare Home Health Service & Hospice, DAB CR464 (1997); The Rivers Health Care Resources, Inc., DAB CR446 (1996); SRA, Inc. D/B/A St. Mary Parish Dialysis Center, DAB CR341 (1994); T.L.C. Mental Health Center, DAB CR636 (1999); Therapeutic Rehabilitation Centers, Inc., DAB CR531 (1998). Hence, Petitioner will only be able to seek a binding judgment on its estoppel argument in the Federal District or higher court. Although I may not have authority to finally resolve the Petitioner's estoppel argument, I may nevertheless refer the parties to the decisions of the United States Supreme Court in Office of Personnel Management v. Richmond, 496 U.S. 414, 110 S.Ct. 2465, 110 L.Ed.2d 387 (1990) and Heckler v. Community Health Services of Crawford County, Inc., 467 U.S. 51, 104 S.Ct. 2218, 81 L.Ed.2d 42, 5 Soc.Sec.Rep.Ser. 29 (1984). While the Supreme Court has not ruled that estoppel will never lie against the government, the decisions in OPM v. Richmond and Heckler v. Community Health Services, make clear that estoppel will not lie against the government in cases involving benefits to be paid from the Treasury, particularly in the complicated area of Medicare. It seems to me that the application of the estoppel doctrine would be particularly inappropriate in a case such as this, where there is a clear need to protect the public fisc from fraudulent activity and to deter such misconduct in the future. ⁽²⁾

Furthermore, under the mandatory exclusion provisions of the Act, the Secretary and the I.G. have little choice but to exclude for the mandatory minimum period when facts are presented showing that the conditions specified by section 1128(a) are met. Thus, even though the I.G. may decide not to proceed with an exclusion at one point in time, as apparently happened in this case, the I.G.'s receipt of additional evidence showing that the conditions for mandatory exclusion pursuant to section 1128(a) have been met requires that exclusion occur. Congress has directed the exclusion under these circumstances and the Secretary and the I.G. have no discretion except to impose an exclusion for a minimum of five years.

Accordingly, I conclude that the exclusions, which for the reasons discussed hereafter are mandatory, are not barred.

b. The exclusions in these cases are appropriately characterized as mandatory pursuant to section 1128(a) of the Act, rather than permissive under section 1128(b) of the Act.

Petitioners do not contest the I.G.'s "definition of conviction or the fact that she [Dr. Battle] was convicted of a criminal misdemeanor charge . . . ." P. Brief at 3. Petitioner argues, however, that the I.G. incorrectly characterized the conviction as "related to the delivery of an item or service under the Medicaid program" which triggers the mandatory exclusion of Petitioner Battle pursuant to section 1128(a)(1). Petitioner argues that Dr. Battle's conviction would be more appropriately characterized as a "misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service" which would cause her conduct to be considered under the permissive exclusions of section 1128(b) of the Act giving the Secretary and the I.G. the discretion not to exclude or to impose a shorter period of exclusion.

I cannot accept the Petitioners' argument. A similar argument was considered and definitively rejected by the Departmental Appeals Board (DAB) in Lorna Fay Gardner, DAB No. 1733 (2000). Petitioner Gardner raised an argument similar to that raised in this case - that her offense could be characterized as falling under either the mandatory or permissive exclusion provisions of section 1128. Petitioner Gardner, as Petitioner Battle in this case, was convicted of a misdemeanor, and she argued that her misdemeanor was more appropriately handled under the permissive rather than the mandatory exclusion provisions. The DAB, relying upon the plain language of section 1128, the legislative history of the Act, and a prior DAB decision which was upheld on appeal to the Federal District Court, held that the distinction recognized by section 1128 of the Act is whether an offense is program-related rather than non-program-related and not whether an offense is a felony or misdemeanor.

The issue, then, is whether Petitioner Battle's offense was program-related. Petitioner's counsel does not argue that the conviction in this case was not program-related. Indeed, Petitioner Battle was specifically convicted of "making a false entry on a patient record containing a material fact supporting an application for a payment under a federal health care program" after June 20, 1997 but before December 31, 1997. I.G. Exs. 3, 5, 6, and 7 (emphasis added). Because the conviction is clearly program-related, the Secretary and the I.G. have no choice but to exclude pursuant to section 1128(a) of the Act.

Accordingly, I conclude that there is an appropriate basis for the mandatory exclusion of Petitioner Stacy Ann Battle, D.D.S. due to her conviction for a program-related misdemeanor offense.

3. There was an appropriate basis for the exclusion of Petitioner Stacy A. Battle, D.D.S., P.C.. ⁽³⁾

Petitioners do not contend that Petitioner Stacy Ann Battle, D.D.S.'s conviction was not an appropriate basis for exclusion of the corporate Petitioner based upon Petitioner Battle's association. It is not disputed that the individual Petitioner, Stacy Ann Battle, D.D.S., owned, controlled or managed the corporate Petitioner. Petitioners have not alleged that the I.G. abused her discretion by ordering the corporate Petitioner's exclusion from federal health care programs. I am satisfied that none of these facts are in dispute and the corporate Petitioner is properly subject to a permissive exclusion under section 1128(b)(8) of the Act due to the conviction of Petitioner Stacy Ann Battle, D.D.S.

4. The 10-year exclusion of Petitioners was within a reasonable range and not unreasonable.

Petitioners argue that the 10-year exclusion ordered by the I.G. is unreasonably long. Petitioners argue that when determining what is reasonable, I should consider that Petitioner Battle has no prior criminal, civil, or administrative record; that her alleged acts did not have any adverse physical, mental, or financial impact on her patients; that the quality of her care has not been questioned; that she served only a brief period of incarceration in a half-way house, the minimum the judge could order; that Petitioner Battle did 100 hours of community service; that Petitioner Battle paid $85,000 as part of the settlement of a civil fraud suit filed against her by the United States related to the acts for which she was criminally convicted; that her exclusion from the Missouri Medicaid Dental Program was for a minimal period; and that, in other cases involving more egregious conduct, the I.G. ordered shorter periods of exclusion.

I note that the regulations strictly limit my jurisdiction in cases such as this. I may decide whether or not the I.G. had a proper basis for the exclusion of the individual Petitioner, but not the corporate Petitioner. I may decide whether the period of exclusion for the individual Petitioner was "unreasonable," but the period of exclusion for the corporate Petitioner is fixed by regulation. The DAB has made clear that the role of the ALJ in cases such as this is to conduct a "de novo" review as to the facts related to the basis for the exclusion and the facts related to the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102. See Joann Fletcher Cash, DAB No. 1725 (2000), n.6, and cases cited therein. The regulation specifies that I must determine whether the length of exclusion imposed is "unreasonable" (42 C.F.R. § 1001.2007(a)(1)). The DAB has explained that in determining whether a period of exclusion is "unreasonable," I am to consider whether such period falls "within a reasonable range." Cash, fn. 6. The DAB cautions that whether I think the period of exclusion too long or too short is not the issue. I am not to substitute my judgment for that of the I.G. and may only change the period of exclusion in limited circumstances.

Despite a thorough search of prior DAB decisions and federal precedent, I have found no clear statement of what constitutes the "reasonable range" referred to by the DAB. I do note that the DAB has approved many 10-year exclusions. My review of the statute and regulations shows that the range of possible exclusions provided for in the case of mandatory exclusions range from the minimum of 5 years to a maximum of permanent exclusion. 42 U.S.C. § 1320a-7(c)(3)(B) and (G); 42 C.F.R. § 1001.102(a) and (d). This is the only range I have found specified in the law and it seems to be "reasonable."

My reading of 42 C.F.R. § 1001.102 is that with a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion of five years. Pursuant to 42 C.F.R. § 1001.102(d) one prior conviction for conduct that would cause mandatory exclusion under section 1128(a) of the Act, increases the minimum period of exclusion to 10 years and two prior convictions automatically causes permanent exclusion.

The five-year and 10-year minimum exclusions may only be extended if the I.G. can point to evidence that one or more of the aggravating factors specified at 42 C.F.R. § 1001.102(b) are present. The regulations do not limit the additional period of exclusion the I.G. may impose based upon the presence of aggravating factors. The regulations also do not specify how much of an extension is warranted by the existence of an aggravating factor. The DAB has indicated that it is not the number of aggravating factors that is determinative, rather, it is the quality of the circumstances, whether aggravating or mitigating, which is controlling in analyzing these factors. Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

Section 1001.102 of 42 C.F.R. provides that when aggravating factors justify an exclusion of more than the mandatory minimum period, then the I.G. may consider any of the three specified mitigating factors if they are shown to exist. In Urquijo, the DAB suggested that the I.G.'s failure to consider a mitigating factor amounts to an abuse of discretion. The DAB also made clear in Urquijo that: if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum.

Thus, my determination of whether or not the exclusionary period in this case is unreasonable hinges upon on three-points: (1) whether the period of exclusion is within the reasonable range; (2) whether the I.G. has shown the existence of aggravating factors; and, (3) whether the Petitioners have shown that there are mitigating factors that the I.G. failed to consider.

The 10-year exclusion ordered in this case is more than the minimum five-year exclusion, but less than permanent exclusion. The 10-year exclusion is within the range recognized by the regulations, and it is reasonable.

The presence of three aggravating factors has never been disputed in this case. The IG has established the presence of three aggravating factors in this case by a preponderance of evidence: (a) Petitioner Battle's criminal acts resulted in a loss to the government of $1500 or more; (b) the sentence imposed by the court included a period of incarceration; and (c) Petitioner Stacy Ann Battle, D.D.S. was subject to adverse action by the State of Missouri which terminated her participation in the State Medicaid program based on her conviction. The Petitioners do not dispute the existence of any of these aggravating factors. These three factors are among the aggravating factors the I.G. is permitted to consider under 42 C.F.R. § 1001.102(b). Considering the admissions of the parties in their pleadings and the exhibits admitted, a preponderance of the evidence supports finding that each of the three aggravating factors exist in this case. The existence of the three aggravating factors justifies extending the period of exclusion beyond the minimum of five years.

The existence of the aggravating factors also triggers the requirement to consider any mitigating factors under 42 C.F.R. § 1001.102(c). However, the regulation is clear that only the three listed mitigating factors may be considered. Petitioner argues several reasons for why the 10-year exclusion is excessive, but none of the cited reasons are those provided for by the regulation. Petitioners argue in mitigation in this case that Petitioner made a large civil settlement, essentially restitution. However, 42 C.F.R. § 1001.102(b)(1) specifically provides that restitution may not be considered when considering the aggravating factor of a loss of $1,500 or more. Further, restitution is not a mitigating factor listed under 42 C.F.R. § 1001.102(c). Petitioners also argue that I should consider that the period of incarceration ordered in this case was brief and in a half-way house rather than a more restrictive prison environment. However, the aggravating factor under the regulation is that incarceration was ordered, length is not the issue under 42 C.F.R. § 1001.102(b)(5). The regulation also specifically provides that the term "incarceration" as used in the Act and regulations includes community confinement, house arrest and house detention. 42 C.F.R. § 1001.2. The brevity of the incarceration is also not a mitigating factor under 42 C.F.R. § 1001.102(c). Petitioners argue that lesser periods of exclusion were ordered in other cases on more egregious facts. However, Petitioners cite no authority for why I should consider this argument. In fact, none of the factors Petitioners cite in mitigation are listed as mitigating factors by the regulation and they are simply irrelevant to the determination of the appropriate length of exclusion.

Petitioners have proven none of the mitigating factors specified by the regulation. Petitioners concede that the individual Petitioner was convicted of a criminal offense with a loss to the government of $1,500 or more. There is no evidence that the judge found any evidence of diminished mental, emotional, or physical condition that limited Petitioner Battle's culpability. There is no evidence that Petitioner Battle cooperated with federal or State authorities with the effect specified by the regulation. Therefore, I conclude that none of the mitigating factors specified by 42 C.F.R. § 1001.102(c) exist to justify reduction of the 10-year exclusions ordered by the I.G.

CONCLUSION

For the foregoing reasons, the 10-year exclusions of Petitioners are affirmed.

Keith W. Sickendick

Administrative Law Judge

1. Most attorneys have found themselves confronted by an unfavorable document of their client's making. Most attorneys, when so confronted, instinctively seek ways to deny the content, meaning or intent of the unfavorable document. I encourage counsel to honestly evaluate the circumstances and forthrightly deal with the issues rather than place their own credibility at risk, particularly when counsel is entrusted with protecting the interests of the United States.

2. I also note that Petitioner does not present evidence or argument that would satisfy the elements required to prove a defense of estoppel.

3. Pursuant to 42 C.F.R. § 1005.4(c)(5), I have no authority to review the I.G.'s decision to actually exclude the corporate Petitioner pursuant to section 1128(b) of the Act. My review extends only to the issue of whether or not the association between Petitioners existed.