SUBJECT: Dr. Darren James, D.P.M.

Petitioner,

- v -

The Inspector General

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION⁽¹⁾

REDACTED VERSION DAB No. 1828 has been redacted for publication because of privacy and confidentiality concerns.

Dr. Darren James, D.P.M. (Petitioner), appealed a January 23, 2002 decision by Administrative Law Judge Alfonso J. Montano. Dr. Darren James, D.P.M., DAB CR860(2001) (ALJ Decision). The ALJ Decision sustained the Inspector General's (I.G.) determination to exclude Petitioner pursuant to section 1128(a)(1) of the Social Security Act (Act) from participating in any Federal health care program, as defined in section 1128B(f), for an eight-year period.

The record below consists of legal arguments and exhibits filed by the parties and the transcript of a telephone hearing conducted on July 26, 2001. The hearing transcript contained the testimony of the former United States Attorney who was the federal prosecutor for Petitioner's mail fraud conviction in the United States District Court for the District of New Jersey.

On appeal, Petitioner raised two arguments. Petitioner argued that the eight-year exclusion was not within a reasonable range in light of the strength of the mitigating factor compared to the aggravating factors presented by his case. Petitioner also asserted that his exclusion violated the Ex Post Facto Clause of the United States Constitution. The I.G., in response to Petitioner's appeal, requested that the ALJ Decision be amended to reflect the presence of an additional aggravating factor.

Based on the analysis below, we reduce the length of Petitioner's exclusion to six years as reasonable in light of the strength of the mitigating factor when compared to the aggravating factors. In doing so, we reject the ALJ's finding that Petitioner failed to prove facts before the ALJ related to his acts of cooperation with federal and state officials under 42 C.F.R. § 1001.102(c)(3) beyond those facts considered by the I.G. in modifying the period of exclusion from ten to eight years. We reject Petitioner's argument that his exclusion is impermissible under the United States Constitution. We grant the I.G.'s request to include the presence of a third aggravating factor.

I. Background

On June 14, 1999, Petitioner pled guilty, in the Superior Court of New Jersey, to one count of Medicaid Fraud, a felony offense under New Jersey law. I.G. Ex. 2. By letter dated March 31, 2000, the I.G. notified Petitioner that he was being excluded from participation in Federal health care programs for a period of 10 years. The I.G. advised Petitioner that he was being excluded pursuant to section 1128(a)(1) of the Act as a result of his conviction for a criminal offense related to the delivery of an item or service under the Medicaid program. I.G. Ex. 1. On May 24, 2000, in response to information submitted to it by Petitioner, the I.G. reduced the period of Petitioner's exclusion to eight years on the grounds that Petitioner's information showing Petitioner's cooperation with federal officials qualified as a mitigating circumstance for purposes of setting the period of exclusion. I.G. Ex. 3.

In his Findings of Fact and Conclusions of Law (FFCLs), the ALJ determined:

1. At all times relevant to this case, Petitioner was licensed to practice podiatry in the State of New Jersey. I.G. Ex. 10, at 2.

2. On June 14, 1999, a criminal Accusation was filed against Petitioner in the New Jersey Superior Court for the County of Mercer, charging one count of Medicaid Fraud in the Third Degree. I.G. Ex. 2, at 1; see also N.J.S.A. 30:4D-17(a).

3. On June 14, 1999, Petitioner pled guilty to one count of Medicaid Fraud in the Third Degree. Id., at 2.

4. On June 14, 1999, Petitioner agreed, in a Consent Order of Exclusion, to a minimum exclusion period of five years from the New Jersey Medicaid program. I.G. Ex. 6.

5. As a result of his conviction, Petitioner was ordered to pay $74,233 in restitution, $200 and $211,867.35 as civil and administrative penalties to the New Jersey Medicaid Program. I.G. Ex. 5.

6. On March 31, 2000, Petitioner was notified by the I.G. that he was being excluded from participation in the Medicare and Medicaid programs for a minimum period of 10 years pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act. I.G. Ex. 1.

7. Under section 1128(a)(1) of the Act, the I.G. is authorized to exclude any individual or entity that has been convicted of a criminal offense related to the delivery of a health care item or service under Medicare or Medicaid. Act, section 1128(c)(3)(B).

8. Where the I.G. determines to exclude an individual pursuant to section 1128(a)(1) of the Act, the term of exclusion will be for a minimum period of five years.

9. A finding of aggravating factors may support an exclusion of more than five years. 42 C.F.R. § 1001.102(b).

10. A finding of mitigating factors may result in a reduction of the exclusion period, but in any case, no less than the minimum period of five years. 42 C.F.R. § 1001.102(c).

11. Petitioner's plea agreement constitutes a "conviction" within the scope of sections 1128(a)(1) and (3) of the Act.

12. The acts that resulted in the conviction, or similar acts, resulted in financial loss to the New Jersey Medicaid Program of more than $1,500. Petitioner agreed to pay restitution in the amount of $74,233. I.G. Exs. 1 and 5, at 1; see also 42 C.F.R. § 1001.102(b)(1).

13. Petitioner was convicted of other offenses besides those which formed the basis for the exclusion, or has been subject of another adverse action by a federal, state, or local government agency or board. Petitioner agreed to be excluded from the New Jersey Medicaid Program. I.G. Ex. 6; see also 42 C.F.R. § 1001.102(b)(9).

14. Petitioner did not prove the presence of any additional mitigating factors apart from those previously presented to the I.G., which resulted in a modification of the period of exclusion from 10 years to eight years.

15. The I.G. established the existence of aggravating factors under 42 C.F.R. §§ 1001.102(b)(1) and (9).

16. The aggravating factors established by the I.G. proved Petitioner to be untrustworthy.

17. I conclude that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act.

18. An eight-year exclusion of Petitioner is reasonable and appropriate.

ALJ Decision at 4-5.

II. Exceptions

Petitioner requested that the exclusion be reversed on the grounds that section 1128B(f) was "applied erroneously ex post facto" or reduced on the grounds that "the mitigation factors were not weighed properly." Notice of Appeal dated February 21, 2002.

Petitioner did not identify the specific FFCLs to which he excepted. Based on his arguments, we conclude that Petitioner excepted to FFCL 14 (that Petitioner did not prove the presence of any additional mitigating factors); FFCL 17 (that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(1) of the Act); and FFCL 18 (that an eight-year exclusion is reasonable and appropriate).

In response to Petitioner's appeal, the I.G. requested that we modify FFCL 15 to include a third aggravating factor: conviction of a criminal offense involving the same or similar circumstances under 42 C.F.R. § 1001.102(b)(8). I.G. Appeal Br. at 13. The I.G. cited to Petitioner's conviction in federal court for mail fraud. I.G. Exs. 9 and 10.

III. Relevant Legal Authority

Section 1128(a) of the Act provides for mandatory exclusion of certain individuals "from participation in any Federal health care program (as defined in section 1128B(f))." Section 1128(a)(1) defines one category of such individuals as "any individual . . . that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII [Medicare] or any State health care program [such as Medicaid]." Section 1128(c)(3)(B) provides that an exclusion under section 1128(a) shall be for a minimum of five years.

The mandatory minimum of five years may be increased with the existence of certain aggravating factors that are not offset by certain mitigating factors. 42 C.F.R. § 1001.102.

Section 1001.102(b) describes the factors that may be considered to be aggravating and a basis for lengthening the period of exclusion. The ALJ Decision found the following two aggravating factors to be applicable in this case:

(1) The acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more 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);⁽²⁾

* * *

(9) Whether the individual or entity was convicted of other offenses besides those which formed the basis for the exclusion, or 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 exclusion.

The regulation at 42 C.F.R. § 1001.102(c) provides that only when aggravating factors justify an exclusion for a period longer than five years, may any mitigating factors be considered as a basis for reducing the period of exclusion to not less than five years. The mitigating factor at issue in this case is set out in section 1001.102(c)(3):

The individual's or entity's cooperation with Federal or State officials resulted in --
(i) Others being convicted or excluded from Medicare, Medicaid, and all other Federal health care programs,
(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or
(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

The Secretary has delegated to the I.G. the authority to impose exclusions. 42 C.F.R. § 1001.401(a). So long as the amount of time chosen for the exclusion imposed on Petitioner by the I.G. is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it. Joann Fletcher Cash, DAB No. 1725, at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992).

Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. 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. 42 C.F.R. § 1005.21(h).

Petitioner challenged the ALJ Decision on the grounds that Petitioner's evidence as to a mitigating factor was not properly evaluated and that his exclusion from programs described in section 1128B(f) constitutes an impermissible ex post facto application of that section. Below we consider each of these arguments in turn.

A. Petitioner proved facts before the ALJ related to his acts of cooperation with federal and state officials under 42 C.F.R. § 1001.102(c)(3) that go beyond those facts considered by the I.G. when the I.G. modified the period of exclusion from ten to eight years.

For the following reasons, we conclude that the ALJ's finding that Petitioner failed "to present any evidence which supports his contention that his continued cooperation has led to the conviction or investigation of others or the imposition of [an exclusion or] a monetary penalty against others as required by 42 C.F.R. § 1001.102(c)(3)(i), (ii), and (iii)" is not supported by substantial evidence in the record as a whole. The ALJ Decision gave no reason for disregarding this evidence and the I.G. did not introduce contradictory evidence.

In upholding the I.G.'s imposition of an eight-year exclusion, the ALJ found there were two aggravating factors (financial loss in excess of $1,500, and another adverse action) and one mitigating factor at issue (cooperation). In the decision, the ALJ wrote as follows as to mitigation:

It is Petitioner's burden to prove any mitigating factors. James H. Holmes, DAB CR270 (1993). Aside from those factors entertained by the I.G., which resulted in the April 28, 2000 modification of the exclusion period, Petitioner has not established the existence of any additional mitigating factors. The record reflects that all due consideration was given to Petitioner's mitigating factor by the I.G. well in advance of Petitioner filing his request for hearing. Mr. Levy's testimony at hearing did not assist Petitioner in establishing that the I.G. did not wholly consider Petitioner's mitigating factors. The only relevant argument Petitioner makes with respect to mitigating factors is that he has . . . fully cooperated with the government. However, despite being given ample opportunity, Petitioner has failed to present any evidence which supports his contention that his continued cooperation has led to the conviction or investigation of others or the imposition of a monetary penalty against others as required by 42 C.F.R. § 1001.102(c)(3)(i), (ii), and (iii). Therefore, I have considered Petitioner's claim, but it is without merit. As Petitioner has the burden concerning mitigating factors, I find that he has not met such burden and conclude that Petitioner has not proven the existence of any additional mitigating factors.

ALJ Decision at 9.

The I.G.'s exclusion notice stated its conclusion as to the appropriate length of the exclusion but did not discuss the documents on which it based this conclusion. However, before the ALJ and in response to Petitioner's appeal, the I.G. took the position that a letter written by United States Attorney to the United States District Court for the District of New Jersey (the 5K letter), fully explained Petitioner's cooperation with federal authorities.⁽³⁾ Tr. at 93; I.G. Appeal Br. at 14-17. The I.G. asserted that it fully considered Petitioner's cooperation since it relied on the 5K letter. The ALJ adopted the I.G.'s position as to the scope of the 5K letter.

Based on the foregoing evidence [the discussion of which has been redacted for publication], we conclude that Petitioner proved that the I.G. failed to consider material information having to do with his cooperation with federal and state authorities in investigations of health care fraud. Therefore, we modify FFCL 14 to provide

14. Petitioner proved facts before the ALJ related to his acts of cooperation with federal and state officials under 42 C.F.R. § 1001.102(c)(3) that go beyond those facts considered by the I.G. when the I.G. modified the period of exclusion from ten to eight years.

B. The ALJ erred in finding that the I.G. had established two rather than three aggravating factors.

In response to Petitioner's appeal, the I.G. argued that there was a third aggravating factor which the ALJ failed to include in his findings: conviction of a criminal offense involving the same or similar circumstances under 42 C.F.R. § 1001.102(b)(8). I.G. Appeal Br. at 13. The I.G. cited to Petitioner's conviction in federal court for mail fraud. I.G. Ex. 9 and 10. The I.G. asked that FFCL 15 be amended to include this additional aggravating factor.

For the reasons explained below, we grant the I.G.'s request.

In a letter dated March 31, 2000, the I.G. informed Petitioner that Petitioner was being excluded from Federal health care programs for 10 years pursuant to section 1128(a)(1) on the basis of three aggravating factors: the amount of financial loss, his voluntary exclusion from New Jersey Medicaid, and his federal court conviction for mail fraud. I.G. Ex. 1.⁽⁴⁾ Subsequently, the I.G. filed its initial brief. In that brief, the I.G. did not specifically argue that the federal conviction constituted an aggravating factor. In his Reply Brief, the I.G. clearly raised this aggravating factor and included in its additional exhibits the federal indictment (I.G. Ex. 10) and the federal conviction (I.G. Ex. 9). I.G. Reply Br. at 6-7.

While the I.G. should have specifically stated its argument as to section 1001.102(b)(8) in its initial brief, we conclude that the failure to do so did not result in unfair surprise or prejudice to Petitioner. Petitioner was allowed to file a surreply to the I.G. Reply Brief and several other submissions arguing against various I.G. assertions. However, Petitioner never contested the I.G.'s contention that the federal conviction constituted an aggravating factor pursuant to section 1001.102(b)(8). Additionally, Petitioner filed a response to the I.G.'s brief on appeal and did not respond to the I.G.'s request for inclusion of the additional aggravating factor or argue that he had been prejudiced or surprised by the I.G.'s position on appeal.

Therefore, we conclude that the ALJ Decision should be amended by adding FFCLs 4A and 13A and by amending FFCL 15.

4A. On December 15, 1998, Petitioner pled guilty in the United States District Court for the District of New Jersey to two counts of mail fraud related to defrauding private health insurance companies by submitting claims for services and procedures he did not perform.

13A. Petitioner has previously been convicted of a criminal offense involving the same or similar circumstances. Petitioner was convicted of mail fraud in the United States District Court for the District of New Jersey. I.G. Ex. 9, 10; see also 42 C.F.R. § 1001.102(b)(8).

15. The I.G. established the existence of aggravating factors under 42 C.F.R. §§ 1001.102(b)(1), (8) and (9).

C. An exclusion of eight years is not within a reasonable range in view of the significance of the mitigating factor when compared to the aggravating factors.

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case. For example, in one case many aggravating factors may exist, but the subject's cooperation . . . may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.

57 Fed. Reg. 3298, at 3314 (January 29, 1992).

We conclude that Petitioner's cooperation, established by uncontradicted evidence in the record below, when weighed against the three aggravating factors, merits reduction of this exclusion to six years. We conclude that six years is within a reasonable range because [discussion redacted.] On the other hand, the mitigating factor does not totally outweigh the aggravating factors, since the amount of the financial loss exceeded $70,000, considerably more than the $1,500 threshold; Petitioner was subject to another criminal conviction for similar acts; and Petitioner was subject to a five-year exclusion from New Jersey Medicaid.

Our adoption of the third aggravating factor does not preclude further reduction of this exclusion. Based on three aggravating factors, the I.G. determined Petitioner should be excluded for eight years. However, as discussed above, in reducing the exclusion to eight years, the I.G. did not consider facts proved before the ALJ relating to Petitioner's acts of cooperation under 42 C.F.R. § 1001.102(c)(3). The presence of these additional mitigating facts, in relation to the three aggravating factors used by the I.G. initially, supports further reduction of the exclusion.

For the preceding reasons, we conclude that the evidence in the record as to the mitigating factor, when weighed against the aggravating factors, merits reduction of Petitioner's exclusion to six years, and we modify FFCL 18 to read:

18. A six-year exclusion of Petitioner is reasonable and appropriate.

D. The exclusion of Petitioner from participation in any Federal health care program as defined in section 1128B(f) does not violate the United States Constitution.

The criminal acts resulting in Petitioner's state court conviction occurred in 1994, prior to the effective date of section 1128B(f). I.G. Ex. 2, at 3. Petitioner argued on appeal that his exclusion, pursuant to section 1128(a)(1), from participation in any Federal health care program as defined in section 1128B(f) was an ex post facto application of section 1128B(f) and therefore violated the Ex Post Facto Clause of the United States Constitution, Article I, Section 9.

Section 1128B(f), which defines the term "Federal health care program," became effective August 5, 1997. Section 1128B(f) provides:

For purposes of this section, the term "Federal health care program" means-

(1) any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government (other than the health insurance program under chapter 89 of title 5, United States Code [the Federal Employees Health Benefits Program]); or

(2) any State health care program, as defined in section 1128(h).

Prior to the amendment of section 1128(a) and the enactment of section 1128B(f), section 1128(a) provided that --

the Secretary shall exclude the following individuals . . . from participation in any program under title XVIII [commonly known as Medicare] and shall direct that the following individuals . . . be excluded from participation in any State health care program (as defined in subsection (h).

Therefore, the 1997 amendment broadened the scope of health care programs from which an individual was excluded pursuant to section 1128(a)(1) from "any program under title XVIII" to "any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government." Had Petitioner been convicted and excluded prior to the 1997 amendment, he would have been excluded from a lesser number of health care programs than he was when he was excluded in 2000.

The Ex Post Facto Clause protects individuals against any statute "which makes more burdensome the punishment for a crime, after its commission . . . ." Beazell v. Ohio, 269 U.S. 167, 169-170 (1925). Petitioner contended that, since he committed his crime in 1994, application of section 1128B(f) in 2000 constituted a punishment which was unconstitutional under the Ex Post Facto Clause.

We reject Petitioner's argument for the following reasons. The Ex Post Facto Clause protects individuals only from retroactive application of punishments or penal statutes. It does not protect against the retroactive application of remedial or civil sanctions. Collins v. Youngblood, 497 U.S. 37, 43 (1990). In regard to exclusions under section 1128, courts and the Board have repeatedly held that the purpose of such exclusions is to protect Medicare, Medicaid, and other government health care programs rather than to punish the excluded individual. Therefore, exclusions imposed by the I.G. pursuant to section 1128 have been determined to be civil sanctions, remedial in nature and not punitive. As remedial sanctions, such exclusions do not violate any of the Constitution's protections against abuse of governmental power to punish such as the Ex Post Facto Clause and the Double Jeopardy Clause. Erickson v. United States ex rel. Dep't of Health and Human Serv, 67 F.3d 858, 864, Fn 2 (9^th Cir. 1995); Manocchio v. Kusserow, 961 F.2d 1539 (11^th Cir. 1992); Kahn v. Inspector General of the U.S. Dep't of Health and Human Serv, 848 F.Supp. 432, 437 (S.D.N.Y. 1994); Crawford v. Sullivan, 1993 WL 122294, *3 (N.D. Ill. 1993); Greene v. Sullivan, 731 F.Supp. 838 (E.D. Tenn. 1990); Cash, DAB No. 1725; Douglas Schram, R. Ph., DAB No. 1382 (1992); and Janet Wallace, L.P.N., DAB No. 1326 (1992).

For example, in Manocchio, at the time of the doctor's criminal act, section 1128(a) made such acts the basis for a mandatory exclusion but did not set a minimum length for the exclusion. After the crime, but before his conviction, section 1128 was amended so that his conviction resulted in a five-year mandatory exclusion. Manocchio argued that it was constitutionally impermissible to mandatorily exclude him for five years since five years was not required at the time he committed the crime. The court rejected his argument. Referring to the legislative history, the court emphasized that the overall purpose of the Medicare and Medicaid Patient and Program Protection Act of 1987 (MMPPPA) was based on the "legitimate nonpunitive goal" of protecting "present and future Medicare beneficiaries from the abusers of these programs," even if the result is "rough remedial justice." Manocchio, 961 F.2d at 1542. The five-year exclusion was upheld as remedial, even though the criminal act involved a false claim of $62.40.

Section 1128(a) was amended after Petitioner's criminal acts but before his conviction and exclusion. The amendment expanded the number of programs from which an individual is to be excluded and defined the programs by reference to another section, section 1128B(f). This exclusion plainly falls within the cases cited above. Just as Manocchio was properly subject to a mandatory five-year exclusion for a crime committed prior to an amendment of section 1128(a), so Petitioner was properly subject to exclusion from additional programs for a crime committed prior to an amendment of section 1128(a).⁽⁵⁾

We reject Petitioner's contention that Congress's decision, to define the term "Federal health care program" by referring in section 1128(a) to section 1128B(f), results in a violation of Ex Post Facto Clause. Petitioner argued that the reference to section 1128B(f) necessarily makes his exclusion penal because section 1128B is a criminal statute. P. Appeal Br. at 3. Petitioner is correct that section 1128B is a criminal law: it is titled "Criminal Penalties for Acts Involving Federal Health Care Programs" and makes certain acts punishable by fine and imprisonment. However, the I.G. is not using section 1128B(f) to prosecute Petitioner; it is using one section of that provision to define the programs from which Petitioner will be excluded pursuant to section 1128(a)(1), a remedial statute. Several provisions of the Act use the definition set forth in section 1128B(f) (such as sections 1128A(a)(7), 1128D(a)(2)(F), 1128E(g)(1)(iv), and 1903(q)(3)). Reference to a definition in one section prevents the Act from needlessly repeating the definition in multiple sections.

Petitioner also argued that if section 1128B(f) were merely a definition, "there would be no need to give it a code number 42 US.C. 1320a-7b(f). Definition[s] are mentioned in the footnotes." P. Appeal Br. at 13. This is not accurate. Congress regularly puts definitions in statutes. For example, section 1128(h) (42 U.S.C. § 1320a-7(h)) defines "state health care program," section 1128(i)(42 U.S.C. § 1320a-7(i)) defines "convicted," and section 1128(j) (42 U.S.C. § 1320a-7(j)) defines "immediate family member and member of household."

Petitioner argued that exclusions constitute a punishment because exclusions have the effect of penalizing providers by causing loss of income. P. Appeal Br. at 15. This line of argument was rejected in Manocchio:

While his exclusion from the Medicare system for five years undoubtedly carries the "sting of punishment," the purpose his exclusion serves is still remedial. The purpose of the exclusionary provision "is to enable the [HHS] inspector general to keep [those who defraud the programs] out of the Medicare and Medicaid Programs. They deprive patients of needed services or supplies, and they divert taxpayer funds from their intended purposes." 133 Cong.Rec. 14,177 (statement of Rep. Waxman, Chairman, House Subcommittee on Health and the Environment).

Manocchio, 961 F.2d at 1542. Section 1128(a) remains remedial even though its application can cause hardship to excluded individuals.

Lastly, Petitioner relied heavily on Florence Peters, D.P.M., DAB No. 1706 (1999). In Peters, the Board reversed an exclusion imposed pursuant to section 1128(b)(1). However, the result in Peters was not related to the Ex Post Facto Clause. The Peters exclusion was reversed because Congress, in its 1996 amendment of 1128(b)(1), had expressly provided that the section would apply only to individuals "convicted for an offense which occurred after [August 21, 1996]" and Peters's crime was committed from 1987 to 1992.⁽⁶⁾ Had Congress not included this limiting language in section 1128(b)(1), Peters, like Manocchio, would have been subject to an exclusion for criminal behavior which predated the amendment of the relevant federal exclusion provision. The Ex Post Facto clause would not have precluded retroactive application in Peters because section 1128 is a remedial, not a punitive, statute.

V. Conclusion

Based on the analysis above, we reduce Petitioner's exclusion to a six-year period. In so doing, we reverse FFCL 14, modify FFCL 15 and FFCL 18, and add FFCLs 4A and 13A. We adopt and affirm the remaining FFCLs.

Judith A. Ballard

Marc R. Hillson

Donald F. Garrett
Presiding Board Member

1. Pursuant to Petitioner's request, which was supported by the United States Attorney's Office, we have redacted from the published version of this decision all details concerning Petitioner's cooperation in investigations of health care fraud because of the risk of retaliation.

2. The ALJ properly relied on the version of section 1001.102(b) that was in effect on the date of Petitioner's exclusion, which is quoted above. Subsequently, this section was amended to require a financial loss of $5,000 or more. This amendment was effective April 17, 2002. 67 Fed. Reg. 11928 (March 18, 2002).

3. A 5K letter is a letter a prosecutor writes when requesting a lesser sentence under section 5K1.1 of the United States Sentencing Guidelines. Tr. at 68.

4. The record does contain some ambiguity on this point because, on April 27, 2000, the I.G. wrote Petitioner a separate letter concerning his conviction for mail fraud. Letter of I.G. Reviewing Official dated April 27, 2000, attached to letter from Petitioner's counsel dated June 6, 2000. The letter stated:

In response to your and Mr. Brown's correspondence regarding the exclusion of Dr. James from the Medicare, Medicaid and other Federal health care programs, please be advised that we agree with your evaluation of the facts and law in this matter, in that Dr. James' conviction for mail fraud on December 11, 1998 in the United States District Court, District of New Jersey, cannot serve as the basis for his exclusion from these programs.

However, this letter spoke in terms of the mail fraud conviction as the "basis for his exclusion," not as an aggravating factor. As to this letter, Petitioner stated that --

It is Dr. James' understanding that after examination of applicable laws that the federal government agreed with his attorneys that any exclusion from federal health care programs would not be based on [the] United States District Court matter. There is a letter between the federal government and Dr. James' attorney memorializing this and same will be provided under separate cover, by way of further support of Dr. James' position.

I.G. Ex. 4, at 4. Therefore, Dr. James never argued before the ALJ or the Board that the I.G. letter dated April 27, 2000 somehow precluded the I.G. from using the mail fraud conviction as an aggravating factor.

5. Petitioner also pointed out that his conviction would have been prior to 1997 if he had not been engaged in helping federal officials investigate health care fraud. However, this assertion does not make the I.G.'s reliance on section 1128B(f) unconstitutional. As explained above, the Ex Post Facto Clause does not apply in these circumstances because section 1128(a), which relies on the definition in section 1128B(f), is a remedial statute.

6. Petitioner argued that "[t]he law states that section 4331(c) of Public Law 105-33 [enacting section 1128B(f)] shall be effective for offense[s] that occurred on or after August 5, 1997." This is not correct. Section 4331(c) was effective August 5, 1997 but, unlike section 1128(b)(1), it did not refer to the date of the offense in relation to its effective date.