SUBJECT: Michael D. Lawton, M.D.,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

Michael D. Lawton, M.D. (Petitioner), appealed a May 3, 2001 decision by Administrative Law Judge (ALJ) Joseph K. Riotto. Michael D. Lawton, M.D., DAB No. CR771 (2001) (ALJ Decision). The ALJ sustained the determination by the Inspector General (I.G.), United States Department of Health and Human Services (DHHS), to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(b)(14) of the Social Security Act (Act) because Petitioner failed to repay student loans borrowed through the Health Education Assistance Loan (HEAL) program. Petitioner had argued that he had no HEAL liability, contending primarily that his 1994 bankruptcy discharged his obligation to repay loans he received under the HEAL program.

For the reasons discussed below, we find that the ALJ did not err in finding that Petitioner's HEAL obligations were not discharged by his bankruptcy because the bankruptcy judge failed to make a specific finding on the dischargeability of Petitioner's HEAL debt as required by law. We find that the ALJ properly allowed certain material in the record, while denying Petitioner's requests for an in-person hearing and the production of documents. We also find that there was no misconduct in this case by the I.G., and that the ALJ decision was not contradictory. We further agree that Petitioner did not show that the ALJ suffered from a mental disability that made him incapable of rendering a sound decision, and that the ALJ was not required to find the amount of Petitioner's outstanding HEAL debt. Accordingly, we sustain the ALJ Decision that Petitioner be excluded from participation in federal health care programs until the satisfaction of his HEAL obligations.

The record for our decision includes the record before the ALJ and the parties' submissions on appeal. Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. 42 C.F.R. § 1005.21(h). Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. Id.

Statutory Background

Exclusions from participation in the Medicare and Medicaid programs imposed by the Secretary as a result of a health care practitioner's failure to repay a HEAL loan are governed by sections 1128(b)(14) and 1892 of the Act.⁽¹⁾ Congress enacted section 1128(b)(14) as part of the Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. No. 100-93 (MMPPPA). The MMPPPA recodified and expanded the Secretary's authority to exclude a health care provider from participation in Medicare, Medicaid, and other State health care programs to include:

Any individual who the Secretary determines is in default on repayments of scholarship obligations or loans in connection with health professions education made or secured, in whole or in part, by the Secretary and with respect to whom the Secretary has taken all reasonable steps available to the Secretary to secure repayment of such obligations or loans . . . .

Section 1128(b)(14) of the Act.

The discharge in bankruptcy of HEAL obligations is governed by section 707(g) of the Public Health Service Act, 42 U.S.C. § 292f(g), which provides -

Notwithstanding any other provision of Federal or State law, a debt that is a loan insured under the authority of this subpart may be released by a discharge in bankruptcy under any chapter of Title 11, only if such discharge is granted -

(1) after the expiration of the seven-year period beginning on the first date when repayment of such loan is required, exclusive of any period after such date in which the obligation to pay installments on the loan is suspended;
(2) upon a finding by the Bankruptcy Court that the nondischarge of such debt would be unconscionable; and
(3) upon the condition that the Secretary shall not have waived the Secretary's rights to apply subsection (f) of this section to the borrower and the discharged debt.

Factual Background

The following background information is drawn from the ALJ Decision and the record before him.

From 1979 through 1982, Petitioner received three loans totaling $27,130 from the HEAL program to finance his medical education at the University of Iowa Medical School. I.G. Exs. 1 - 3; FFCLs 2 - 4. Under the terms of the promissory notes signed by Petitioner, he was required to repay the loans, including interest, beginning the first day of the tenth month after he either ceased being a full-time student at a HEAL-recognized school or ceased being an intern or resident in an accredited program. I.G. Exs. 4 - 6.

The I.G. conceded that between April 7, 1989 and April 4, 1991, Petitioner made 28 payments towards his HEAL debt, totaling $14,933.69. I.G. Ex. 28. Petitioner, however, failed to complete repayment of the HEAL obligation in conformance with the terms of the promissory notes he signed.⁽²⁾ As a result, on June 15, 1992, a California state court issued a default judgment in favor of the Student Loan Marketing Association (SLMA) in the amount of $57,467.03, representing the unpaid principal of the three loans plus accrued interest. I.G. Ex. 8; FFCL 6. On November 5, 1992, SLMA assigned the judgment to the United States. I.G. Ex. 26, at 3. The United States, through the Public Health Service (PHS), then began writing to Petitioner requesting repayment of the loans. I.G. Exs. 16 and 17.

On April 14, 1994, Petitioner filed for Chapter 13 bankruptcy, converting it to a Chapter 7 bankruptcy action on July 6, 1994. I.G. Exs. 10 and 11. On December 22, 1994, the United States Bankruptcy Court for the Central District of California issued a general discharge order. I.G. Ex. 12; FFCL 10. Among the creditors whose debts were discharged by the order was the "Dept of Health & Human Sv" with a claim in the amount of $57,085. I.G. Ex. 12, at 2.

In the following years PHS sent numerous letters to Petitioner informing Petitioner of his continued debt from his HEAL obligation and warning him that his indebtedness would be referred to the Internal Revenue Service for an offset action (I.G. Exs. 19, 20) or to the Department of Justice for enforced collection action (I.G. Exs. 21 and 22). Following a Department of Justice request for a second original assignment so that the judgment could be registered in state and federal court, SLMA, on February 24, 1999, again assigned the June 15, 1992 judgment to the United States. I.G. Exs. 27 and 9; FFCL 7. On April 30, 1999, PHS informed Petitioner that his failure to respond would lead to the referral of his case to the United States Attorney for enforced collection action. I.G. Ex. 7. At that time, Petitioner's HEAL obligation, including interest, totaled $93,988.33. Id. On September 20, 1999, a registration of the June 15, 1992 judgment was filed in the United States District Court for the Central District of California. I.G. Ex. 9, at 2.

On September 30, 1999, the I.G. notified Petitioner that he was being excluded from participation in federal health programs pursuant to sections 1128(b)(14) and 1892 of the Act. I.G. Ex. 24.

Discussion

The ALJ reached his decision on the written record before him. The ALJ denied Petitioner's request for an-person hearing, determining that such a hearing was not necessary to decide the issue of whether the I.G. had a basis to exclude Petitioner. November 17, 2000 Ruling Denying Petitioner's Request for a Change of Venue. The ALJ found that Petitioner's HEAL obligations were not discharged by his bankruptcy. Specifically, the ALJ found that, as the dischargeability of a HEAL debt is governed by 42 U.S.C. § 292f(g), Petitioner needed to file an inquiry with the bankruptcy judge for a determination as to whether the non-discharge of the debt would be unconscionable as required by the statute. ALJ Decision at 7. The ALJ found that if an individual seeking discharge of a HEAL debt fails to obtain a special finding by the bankruptcy judge that non-discharge would be unconscionable, the HEAL debt is unaffected by the general discharge and the individual will remain liable for the HEAL debt. Id. The ALJ further rejected as being without merit Petitioner's other arguments that the I.G. has no jurisdiction to exclude him unless he is actively practicing his profession, that he had already repaid most or all of the loans, and that the loans were not valid and enforceable because SLMA failed to make the insurance payments for the loans required by statute.

In reaching his decision, the ALJ made 17 numbered findings of fact and conclusions of law (FFCLs).⁽³⁾

On appeal, Petitioner advanced numerous arguments challenging the ALJ Decision. Petitioner first and foremost argued that his case is subject to the jurisdiction of the Bankruptcy Court proceedings and that the ALJ Decision violated bankruptcy laws. Petitioner also argued that the ALJ Decision was improperly based on an I.G. submission with accompanying attachments that were introduced after briefing in the case was concluded. Petitioner further alleged that his due process rights had been violated in several respects, including not being allowed to call witnesses in his behalf or to compel the production of documents, and by a conflict of interest by the I.G. Petitioner further alleged that the findings in the ALJ Decision were contradictory. Petitioner also maintained that the ALJ was mentally incapacitated, thereby denying Petitioner of his right to a competent fact finder. Finally, Petitioner alleged that the ALJ Decision was deficient in its failure to state the amount of the HEAL obligation owed by Petitioner.

We discuss each of these arguments in turn.

I. The ALJ did not err in finding that Petitioner's bankruptcy did not discharge his HEAL obligations.

Petitioner argued that he no longer had any liability for his HEAL debts, as his 1994 bankruptcy specifically discharged those loan debts. Petitioner maintained that the ALJ Decision itself recognized this fact, pointing to FFCL 10:

On December 22, 1994, the United States Bankruptcy Court, Central District of California issued a Discharge of Debts order which listed Petitioner's debt to DHHS in the amount of $57,085 for his defaulted HEAL loans as "fixed and liquidated." I.G. Ex. 12.

Petitioner asserted that the action of the bankruptcy judge in discharging his debts was res judicata on the question of the status of his HEAL debts, and he questioned how the Secretary could exclude him for nonpayment of his HEAL debts when the bankruptcy order unequivocally extinguished all his repayment obligations. According to Petitioner, the discharge of his debts under the bankruptcy code acted as an injunction to prevent collection of his debts.

Petitioner further offered as new evidence a May 14, 2001 order reopening his bankruptcy case, maintaining that the order had the effect of renewing the automatic stay that attaches to bankruptcy proceedings, thereby requiring all efforts to collect debts or impose sanctions, such as his exclusion, to cease.

Petitioner's arguments are not persuasive. As the ALJ Decision made clear, 42 U.S.C. § 292f(g) created an exception to bankruptcy law provisions for the discharge of debts. HEAL obligations are subject to discharge in bankruptcy only if the three conditions set forth in section 292f(g) are met. United States v. Wood, 925 F.2d 1580 (7^th Cir. 1991). The court in Wood, where like here a bankruptcy judge issued a general discharge of the borrower's debts but made no special findings regarding the HEAL obligation, held that the HEAL debts were not discharged. Petitioner has not provided any evidence, or even contended, that there was a finding by the bankruptcy judge that the nondischarge of his HEAL debt would have been unconscionable. Without such a finding, there was no basis in law for the ALJ not to uphold Petitioner's exclusion. Moreover, it was Petitioner's responsibility to raise the issue of his HEAL debt before the bankruptcy judge. "[T]he burden of initiating an inquiry into the dischargeability of a HEAL loan under section 294f(g) falls upon the debtor, not the creditor." Wood at 1583; see also Rice v. United States, 78 F.3d 1144 (6^th Cir. 1996). Petitioner cannot now assail the reasoning in the ALJ Decision because of his own failure to seek the proper redress in his bankruptcy proceedings.

Petitioner's attempts to distinguish Wood as irrelevant to his case are unavailing. Petitioner argued that the holding in Wood had been rendered invalid by the issuance of what Petitioner referred to as "C.F.R. § 60.53." Petitioner asserted that this regulation, amended eight months after Wood, requires the holder of a debt to file a written objection with the bankruptcy court or face the loss of any rights to collect following a general discharge. We infer from this argument that Petitioner was suggesting that it was the holder of the HEAL notes, rather than Petitioner, who had the responsibility to seek a special order from the bankruptcy judge.

Part 60 of 42 C.F.R. sets forth regulations for the HEAL program.

We conclude that Petitioner intended to refer to 42 C.F.R. § 60.35(g), which deals with collection of HEAL debts under Chapter 7 bankruptcies, rather than the cited § 60.53, which concerns notification of changes in a student's enrollment status. Section 60.35 provides that a lender or holder must exercise due diligence in the collection of a HEAL debt, and in regard to bankruptcies specifically provides:

If a borrower files for bankruptcy under chapter 7 of the Bankruptcy Act and does not file a complaint to determine the dischargeability of the HEAL loan, the lender or holder is responsible for monitoring the bankruptcy case in order to pursue collection of the loan after the bankruptcy proceedings have been completed.

42 C.F.R. § 60.35(g)(1). Contrary to Petitioner's argument, the language of the regulation is consistent with the holding in Wood that it is the borrower's responsibility to seek discharge of a HEAL debt.

Nor does the recent re-opening of Petitioner's case by the bankruptcy judge have any effect on the Secretary's authority under the Act to exclude Petitioner from participation in federal health programs. Nothing in the order re-opening the case imposes an automatic stay on other proceedings, including the Secretary's authority to exclude Petitioner.

II. The ALJ Decision properly included consideration of a letter submitted by the I.G. refuting an allegation by Petitioner.

Petitioner argued that the ALJ Decision was based in large part on documents that were never introduced into evidence before the ALJ, so that they were "not available to [Petitioner] to defend." Petitioner appeal ¶20. Petitioner pointed to a January 9, 2001 letter and three attachments submitted by the I.G. to the ALJ. The attachments were: a November 24, 1992 memo from the Acting Chief of the HEAL Branch, PHS, stating that Petitioner's loan was in default and directing that a check be issued to SLMA; a November 5, 1992 Lender's Application for Insurance Claim for Petitioner's HEAL debt; and the third page of I.G. Exhibit 9. The I.G.'s January 9th letter responded to a December 27, 2000 Application for Order Compelling Production of Documents filed by Petitioner, in which Petitioner alleged that I.G. Exhibit 9 was a "fake" and requested the production of numerous documents. I.G. Exhibit 9 is a Registration of Judgment filed in the United States District Court for the Central District of California, dated September 20, 1999, in the matter of United States of America v. Michael D. Lawton. The I.G.'s January 9^th letter maintained that Exhibit 9 was not false and offered an explanation of the assignment process whereby SLMA assigned its interest in Petitioner's HEAL obligations to the Secretary. The ALJ discussed the January 9^th letter in his decision and found I.G. Exhibit 9 to be "true and accurate." ALJ Decision at 2. In its appeal, Petitioner disputed this finding by the ALJ, offering a document (Appellant's Ex. 2) which Petitioner claimed showed that the assignment of his HEAL debt occurred in 1992, thus demonstrating the falsity of I.G. Exhibit 9.⁽⁴⁾

We find that the ALJ properly considered the contents of the January 9^th letter. The January 9^th letter was prompted by Petitioner's assertion that an exhibit proffered by the I.G. was fraudulent. It was proper for the ALJ to admit into the record a defense by the I.G. to the serious allegation that it had introduced a fraudulent document. If Petitioner had wanted to make further arguments to the ALJ about his allegation, including challenging inclusion of these attachments into the record, he should have sought permission from the ALJ to do so. In fact, the closing paragraph of the I.G.'s January 9^th letter specifically noted the possibility that additional briefing might be requested. January 9, 2001 letter at 3. Moreover, Petitioner has had the opportunity to raise such arguments in this proceeding.

As the ALJ did, we find the explanation of the assignment process in the January 9^th letter to be convincing and credible. That explanation established that I.G. Exhibit 9 was not false and was not contradicted by Appellant's Exhibit 2. Accordingly, we find no merit in Petitioner's arguments in this regard.

III. The ALJ's denial of Petitioner's requests to call witnesses and to compel the production of documents did not deprive Petitioner of due process.

Petitioner contended that the ALJ's determination to decide Petitioner's appeal of his exclusion on the parties' written submissions because there were no factual issues in dispute was incorrect. Petitioner asserted that there were numerous factual issues in dispute, specifically citing the authenticity of I.G. Exhibit 9, and that these disputes could have been resolved if the ALJ had allowed him the documents he sought.

As discussed above, the ALJ in his decision specifically found I.G. Exhibit 9 to be genuine. We find no basis to question the ALJ's judgment in regard to this exhibit.

Moreover, in his February 28, 2000 Order and Schedule for Filing Briefs and Documentary Evidence, the ALJ framed the issue before him: "Whether the I.G. had a basis upon which to exclude Petitioner?" As to this question, there is no factual issue in dispute as Petitioner's HEAL obligations have not been repaid. No matter how many witnesses called, no matter how many documents produced, Petitioner could not have altered the dispositive fact that he had not repaid all his HEAL obligations. We therefore find that the ALJ did not deprive Petitioner of due process by denying him a hearing or access to documents.

IV. There was no misconduct on the part of the I.G. in this case.

Petitioner maintained that numerous conflicts of interest required the I.G. to withdraw from this case, but instead the I.G. engaged in misconduct by offering a false document as evidence before the ALJ. Petitioner asserted that he had initiated a criminal investigation with the Department of Justice, which improperly turned the investigation and material over to I.G. counsel. Petitioner alleged that the I.G. then intentionally suppressed a document which conflicted with I.G. Exhibit 9. Petitioner argued that the only proper action for the I.G. to have taken was to withdraw Exhibit 9, withdraw its attorneys, and turn the investigation over to another branch of government.

We have already discussed the authenticity of I.G. Exhibit 9, and Petitioner has provided no evidence how any alleged criminal investigation by the Department of Justice bears any relevance to the issue of whether Petitioner has repaid his HEAL obligations. We therefore find no merit whatsoever in this argument.

V. The findings in the ALJ Decision are not contradictory.

Petitioner argued that FFCLs 7 and 8 contradict themselves. FFCL 7 states:

SLMA formally assigned the June 15, 1992 judgment against Petitioner to DHHS, Debt Management Branch on February 24, 1999. I.G. Ex. 9.

FFCL 8 reads:

Commencing in 1993 and continuing until at least 1998, DHHS contacted Petitioner to request he enter into a repayment agreement or offset agreement to satisfy his unpaid HEAL loans. I.G. Exs. 17, 22.

Petitioner contended that since DHHS did not own the debt until February 24, 1999 (FFCL 7), DHHS could not have lawfully requested any payments prior to that time (FFCL 8). Petitioner reasoned that the only way DHHS could have requested payment on a HEAL debt prior to February 1999 would have been if I.G. Exhibit 9 were a fake and an assignment of judgment had occurred prior to 1993. According to Petitioner, since DHHS could not have taken any lawful attempts to offset any payments prior to the reassignment in 1999, the Secretary's action to exclude was illegal because the Act (section 1128(B)(14)) requires the Secretary to take all reasonable steps to secure repayment of a HEAL obligation before excluding an individual from participation in federal health programs.

As I.G. Exhibit 27 explains, SLMA first assigned Petitioner's debt to DHHS on November 5, 1992 (I.G. Ex. 26, at 3), with the debt reassigned again in February 1999 (I.G. Ex. 9). The second original reassignment was required in order to have the judgment against Petitioner registered in both state and federal court. I.G. Ex. 27. While the ALJ could conceivably have expressed the sequence of events more clearly in his findings, we find that the ALJ findings were not contradictory. Petitioner's debt was assigned to DHHS first in 1992, so that the Secretary could lawfully take reasonable steps to secure repayment of the HEAL obligation, as the Secretary indeed did. I.G. Exs. 18 - 22. The fact that it was DHHS, and not SLMA, which held Petitioner's obligations is evidenced by Petitioner's own Chapter 7 bankruptcy discharge which lists DHHS as a creditor and not SLMA. I.G. Ex. 12, at 2. We therefore find Petitioner's argument without merit.

VI. Petitioner's due process rights were not prejudiced by the alleged incapacity of the ALJ.

Petitioner contended that the mental incapacity of the ALJ deprived him of his due process rights to have his case heard by a competent hearing officer. Petitioner offered his own declaration that the ALJ was incompetent because the ALJ suffered mental and physical incapacities. Petitioner asserted that in a January 6, 2000 telephone conference the ALJ was unable to comprehend the parties' presentations. Declaration ¶ 52. Petitioner stated that the I.G. counsel at the time informed him that the ALJ suffered from Parkinson's disease, with the ALJ having "good days and bad days". Id. ¶¶ 54 and 55. Petitioner asserted, based on his experience from the conference and his experience as a physician dealing with Parkinson patients, that the ALJ "was too mentally incapacitated to rationally consider the legal and factual issues in this case." Id. ¶ 56. Petitioner cited a passage from Harrison's Principles of Internal Medicine, 11^th Edition, "Although intellectual deterioration is not a consistent feature of early Parkinson's disease, dementia has been increasingly recognized to be a feature of advanced Parkinson's Disease." Id. ¶ 57. Petitioner maintained that he was entitled to a competent hearing officer and that the ALJ's denial of his dementia arising from Parkinson's disease denied Petitioner his due process rights to a competent hearing officer. Id. ¶¶ 58 and 59.

The I.G. responded that the law and the evidence in the case supported the ALJ's findings and that Petitioner's assertions were without merit. I.G. Br. at 24, n.14.

In his request for an in-person hearing, Petitioner raised the question of the ALJ's competence. August 17, 2000 Response to Order Requesting Further Statements at 2. This prompted the ALJ to issue the following:

Petitioner also averred that an in-person hearing was required based on an illness which he asserted has rendered me mentally incapacitated and that the in-person hearing would avail Petitioner the ability to monitor my behavior and demeanor. The illness Petitioner has referred to is Parkinson's Disease. As a physician, Petitioner should be well aware that Parkinson's does not diminish a person's mental capabilities. It does, however, encumber a person's ability to travel and it effects (sic) the speech process. Contrary to Petitioner's contentions, I am quite capable of rendering a comprehensive and cohesive ruling on this matter. Therefore, Petitioner's argument in this regard is without merit.

November 17, 2000 Ruling Denying Petitioner's Request for a Change of Venue at 4.

As we have discussed above, the dispositive issue is this case is whether Petitioner's HEAL obligations are still owing. We have determined that the ALJ correctly found that, under 42 U.S.C. § 292f(g), Petitioner's HEAL debt was not discharged. There were outstanding state and federal court judgments that Petitioner was in default of his HEAL obligations. While Petitioner may continue to argue otherwise, we find that before the ALJ there was no other relevant legal or factual issue in dispute. The issues in this case are not complex, and there has been no error established that would affect the result. Furthermore, Petitioner presented no evidence, other than his own conclusions based solely on a single telephone conversation, that the ALJ lacked the capacity to decide this case. A medical reference book citation on the effects of advanced Parkinson's disease is not evidence that the ALJ lacked the mental capacity to decide this case. Therefore, irrespective of what medical condition or illness the ALJ might have, we find that it had no bearing on the proper result of this case. Accordingly, we find no merit in Petitioner's argument that his due process rights were denied by having this ALJ preside over the appeal of the I.G.'s proposed exclusion.

VII. The ALJ Decision was not required to make a finding as to the current amount of Petitioner's HEAL obligation.

Petitioner contended that the ALJ Decision's conclusion that Petitioner is subject to exclusion "until his HEAL debt has been satisfied" was deficient in its failure to state the amount of the debt. Petitioner asserted that the ALJ Decision failed to state the amount due on the HEAL debt because the I.G. never provided an honest accounting and repeatedly changed the amount Petitioner had already paid on the obligation.

We find Petitioner's argument irrelevant to the issue at hand. Petitioner has not asserted that he has paid back all of his HEAL obligations, only that the I.G. has not credited him with all that he has repaid. While it may be difficult to reconcile what the I.G. claimed Petitioner had paid on his HEAL obligations (I.G. Ex. 28) and what additional amounts Petitioner asserted he had repaid (Petitioner's Ex. 1), it was not the responsibility of the ALJ to determine the amount of Petitioner's liability for his HEAL obligations. Furthermore, as interest was continually accruing on the principal of the HEAL obligation, it would have been difficult, and perhaps misleading to Petitioner, for the ALJ to attempt to put an exact dollar figure on the amount of the HEAL obligations that existed on the date of the decision as that figure would rise as more interest accrued.

Moreover, the calculation of Petitioner's repayment of his HEAL obligation, insofar as the issue of that obligation was before the ALJ, was determined with the 1992 judgment against him. I.G. Ex. 8. Petitioner did not allege that he made any further repayments subsequent to that judgment. Consequently, the proper forum for Petitioner to have contested the calculation of the amount of his HEAL repayments was the California state court when SLMA brought its 1992 action against Petitioner.

Conclusion

For the reasons discussed above, we sustain the ALJ Decision excluding Petitioner from participation in federal health programs until his HEAL obligations are satisfied. In doing so, we affirm and adopt all the FFCLs made by the ALJ.

Donald F. Garrett

Marc R. Hillson

M. Terry Johnson
Presiding Board Member

1. While the I.G. sought to exclude Petitioner under both sections 1128(b)(14) and 1892 of the Act, the ALJ Decision did not address Petitioner's exclusion under section 1892. Because the ALJ found that Petitioner's exclusion was authorized under section 1128(b)(14), he concluded that consideration of Petitioner's exclusion under section 1892 was unnecessary. ALJ Decision at 3, n.4. The ALJ also stated that he was unsure of his authority to review exclusions imposed under section 1892. Id. Briefly stated, section 1892 provides a procedure for the collection of past-due obligations arising from breaches of scholarship and loan contracts such as HEAL obligations through an offset of amounts otherwise payable to the individual for services rendered under Medicare, with the individual being excluded from participation in the Medicare program if the individual fails to generate sufficient program reimbursement to satisfy the outstanding debt or refuses to enter into an agreement or breaches a provision of an agreement to repay the obligation.

2. Petitioner contended before us that he also made earlier payments in 1987 and 1988 that the I.G. failed to take into account in its calculation of the amount of Petitioner's repayment of his HEAL obligations. Petitioner's Ex. 1. However, any dispute about the amounts paid on the HEAL debt prior to the 1992 default judgment, so long as Petitioner did not allege full repayment, did not remove the basis for the I.G.'s proposed exclusion.

3. The ALJ stated in his decision that he accepted into evidence 26 exhibits offered by the I.G. and two exhibits offered by Petitioner. It appears, however, that the I.G. actually offered 28 exhibits into evidence, with Exhibits 27 and 28 being offered with the I.G.'s February 7, 2001 Motion in Opposition to Petitioner's Motion to Dismiss. Since the ALJ Decision does not mention the latter two exhibits, we cannot tell whether the ALJ considered them. We nevertheless find that this was harmless error because the ultimate result would not have changed regardless of whether the ALJ did or did not consider these exhibits. Exhibit 27 was a January 10, 2001 letter from SLMA to Petitioner, explaining how SLMA transferred its interest in Petitioner's loans to DHHS. Exhibit 28 was a list of Petitioner's HEAL repayments by date and amount, totaling $14,933.69. Other exhibits in the record showed SLMA's assignment of Petitioner's HEAL debt to DHHS. I.G. Exs. 9 and 26, at 3. The amount of Petitioner's repayments of his loans, if not in full, was not relevant to the issue before the ALJ.

4. Appellant's Ex. 2 is a duplicate of the third page of I.G. Ex. 26.