Inspector General, DAB CR5601 (2020)

DECISION

Based on violations of section 1128A(a)(1)(A) and (B) of the Social Security Act (Act) (42 U.S.C. § 1320a‑7a(a)(1)(A) and (B)), there are bases for imposing a civil money penalty (CMP), an assessment in lieu of damages, and exclusion from Medicare, Medicaid, and all federal health care programs upon Respondent, Adel A. Kallini, MD.  A CMP of $1,727,000.00, an assessment in lieu of damages of $3,263,132.07, and exclusion of Respondent from Medicare, Medicaid, and all federal health care programs for 20 years are reasonable sanctions.1

I.  Background

The Inspector General of the United States Department of Health and Human Services (IG) sent Respondent a notice of proposed determination dated November 6, 2017.  The IG advised Respondent in the notice that he intended to impose against Respondent a CMP of $1,727,000.00 and an assessment in lieu of damages of $3,263,132.07, a total of

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$4,990,132.07.  The IG also advised Respondent that he intended to exclude Respondent from participation in Medicare, Medicaid, and all federal health care programs for a minimum of 20 years.2   The IG cited as the bases for the proposed sanctions Respondent’s alleged violations of section 1128A(a)(1)(A) and (B) of the Act.  The IG alleged that between about June 2013 and February 2014, Respondent submitted 1,727 claims for 6,282 items and services totaling $3,133,700.00, and Respondent received reimbursement from Medicare totaling $1,087,710.69.  The IG alleged that Respondent’s conduct amounted to the knowing presentation to Medicare of claims for services that Respondent knew or should have known were either not provided as claimed or were false or fraudulent.  The IG alleged that pursuant to an improper arrangement with third parties, Respondent submitted claims for services that he knew he had not provided or supervised, at an office he had never been to, and for Medicare beneficiaries he had never met.  The IG proposed a CMP of $1,000 for each of the 1,727 claims filed by Respondent.  The IG proposed an assessment in lieu of damages of $3,263,132.07, three times the amount paid by Medicare for the false claims.  IG Exhibit (Ex.) 1.

Respondent timely requested a hearing through counsel on January 3, 2018 (RFH).  On January 16, 2018, the case was assigned to me to hear and decide.  I convened a telephone prehearing conference on February 6, 2018, the substance of which is memorialized in my Prehearing Scheduling Order dated February 7, 2018, as amended by order dated February 15, 2018 (Prehearing Order).

The IG filed a motion for summary judgment and supporting brief on June 22, 2018, with IG Exs. 1 through 22.  Respondent filed a response in opposition to the IG motion for summary judgment and a cross-motion for summary judgment and brief in support thereof on August 6, 2018, with Respondent’s Exhibits (R. Exs.) 1 and 2.  Neither party objected to the opposing party’s exhibits, and IG Exs. 1 through 22 and R. Exs. 1 and 2 were admitted and considered as evidence.

On October 3, 2018, I issued a decision in which I granted the IG’s motion for summary judgment and held that there was a basis for imposing a CMP, an assessment in lieu of damages, and for excluding Respondent from Medicare, Medicaid, and all federal health care programs.  I also held that a CMP of $1,727,000.00, an assessment in lieu of

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damages of $3,263,132.07, and exclusion for 20 years were reasonable sanctions to impose against Petitioner.  Adel A. Kallini, MD, DAB CR5192 (2018).  On May 23, 2019, an appellate panel of the Departmental Appeals Board (Board) remanded the case to me for further proceedings.  Adel A. Kallini, MD, DAB No. 2944 (2019).  A hearing was convened on November 19 and 20, 2019.  A transcript (Tr.) of the hearing was made.  IG Exs. 1 through 23 and Respondent’s Exhibits 1 through 22 were admitted or re-admitted as evidence.  Tr. 29-30, 557; Joint Stipulation (Jt. Stip.) ¶ 1.  The IG called Mark McWilliams, Esq. as a witness.  Respondent testified on his own behalf.

The parties filed post-hearing briefs on January 30, 2020 (IG Br. and R. Br., respectively) and post-hearing reply briefs (IG Reply and R. Reply, respectively) on March 2, 2020.

II.  Discussion

A.  Applicable Law and Jurisdiction

Congress granted the Secretary authority to impose CMPs and assessments in lieu of damages against, and to exclude from Medicare, any person that:

(1)  knowingly presents or causes to be presented to an officer, employee, or agent of the United States, or any department or agency thereof, or of any State agency . . .  a claim . . . that the Secretary determines –

(A)  is for a medical or other item or service that the person knows or should know was not provided as claimed . . . [or]

(B)  is for a medical or other item or service and the person knows or should know the claim is false or fraudulent . . . . 

Act § 1128A(a)(1)(A)-(B) (42 U.S.C. § 1320a-7a(a)(1)(A)-(B)).  Congress authorized the Secretary to delegate to the IG the authority granted by section 1128A(a) of the Act.  Act § 1128A(j)(2).  The Secretary has promulgated regulations implementing section 1128A of the Act at 42 C.F.R. pt. 1003 and delegated to the IG authority to impose sanctions under the Act.  42 C.F.R. §§ 1003.150, 1003.200(a)(1)-(2).

Congress provided that any person who violates section 1128A(a)(1)(A) or (B) of the Act is subject:

to a civil money penalty of not more than $10,000 for each item or service . . . [and] an assessment of not more than 3

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times the amount claimed for each such item or service in lieu of damages sustained by the United States or a State agency because of such claim . . . .  In addition the Secretary may make a determination in the same proceeding to exclude the person from participation in the Federal health care programs . . . and to direct the appropriate State agency to exclude the person from participation in any State health care program.  

Act § 1128A(a); 42 C.F.R. §§ 1003.200(a), 1003.210(a)(1), (b).  In determining the amount of any CMP or assessment and the duration of an exclusion, the Secretary and IG must consider:  (1) the nature of the claims and the circumstances under which they were presented; (2) the degree of culpability, history of prior offenses, and financial condition of the alleged violator; and (3) such other matters as justice may require.  Act § 1128A(d); 42 C.F.R. §§ 1003.140, 1003.220. 

The Secretary and the IG may not make an adverse determination to impose a CMP, assessment, or exclusion under section 1128A(a) of the Act until the alleged violator has been given written notice and an opportunity for a hearing on the record at which the alleged violator may be represented by counsel and has the opportunity to present and cross-examine witnesses.  Act § 1128A(c)(2); 42 C.F.R. §§ 1003.1500-.1540; 42 C.F.R. pt. 1005.  A person subject to a proposed penalty, assessment, and/or exclusion has a right to review by an administrative law judge (ALJ), appeal to the Board, and judicial review.  Act § 1128A(c)(2), (e); 42 C.F.R. §§ 1003.1500(b), 1003.1540; 42 C.F.R. pt. 1005.  Absent a timely request for hearing before an ALJ, a proposed penalty, assessment, or exclusion becomes final and not subject to further review.  42 C.F.R. §§ 1003.1500(c), 1003.1510.

Pursuant to 42 C.F.R. § 1005.15(a), a hearing on the record is required to determine whether an alleged violator, referred to as a respondent, is subject to a sanction, unless both parties waive appearance at an oral hearing and elect to submit only documentary evidence and written argument as authorized by 42 C.F.R. § 1005.6(b)(5).  An ALJ may also decide a case, in whole or in part, by summary judgment if there is no disputed issue of material fact.  42 C.F.R. § 1005.4(b)(12).  In a CMP case under 42 C.F.R. pt. 1003, a respondent bears the burden of going forward and the burden of persuasion with respect to affirmative defenses and any mitigating factors, and the IG bears the burden with respect to all other issues.  42 C.F.R. § 1005.15(b).  Because this case involves both a CMP proposed pursuant to 42 C.F.R. pt. 1003 and an exclusion pursuant to that part, there is no reason to allocate the burdens differently for review of the CMP and the exclusion.  42 C.F.R. § 1005.15(c) (except for exclusions listed in 42 C.F.R. § 1005.15(b), the ALJ determines the allocation of the burden of proof).  A preponderance of the evidence is required to meet the burden of persuasion.  42 C.F.R. § 1005.15(d).

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B.   Issues

Whether there is a basis for the imposition of a CMP;

Whether there is a basis for the imposition of an assessment;

Whether there is a basis for excluding Respondent from participating in Medicare, Medicaid, and all other federal health care programs; and

Whether the sanctions proposed by the IG are reasonable or adjustment of the sanctions is necessary.

C.  Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold followed by the pertinent findings of fact and analysis. 

1.  Respondent’s request for hearing was timely and I have jurisdiction.

There is no dispute that Respondent timely filed his request for hearing and that I have jurisdiction.

2.  From between about June 2013 and January 16, 2014, Respondent knowingly caused to be presented to Medicare 1,727 claims for nerve conduction studies with his National Provider Identifier (NPI) (also referred to as Respondent’s provider number or Medicare number), claims for services that Respondent knew were not provided as claimed because he did not provide or supervise the nerve conduction studies and for which he had no valid reassignment.

3.  From between about June 2013 and January 16, 2014, Respondent knowingly caused to be presented to Medicare 1,727 claims for nerve conduction studies with his NPI, claims Respondent knew were false because he knew he did not provide or supervise the nerve conduction studies for which the claims were filed and for which he had no valid reassignment.

4.  Respondent committed 1,727 violations of section 1128A(a)(1)(A) of the Act, because he knew that each of the 1,727 claims for nerve conduction studies was not provided as claimed because he did not

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provide or supervise the nerve conduction studies or have a valid reassignment.

5.  Respondent committed 1,727 violations of section 1128A(a)(1)(B), because he knew that each of the 1,727 claims was false because he did not provide or supervise the nerve conduction studies or have a valid reassignment, contrary to the representation of the claims filed with his NPI.

This case is before me on remand by an appellate panel of the Board.  The Board agreed with my prior determination that Respondent’s criminal acquittal of charges that arose from the same facts on which the IG seeks to impose sanctions does not preclude “imposition of administrative sanctions which are based on different legal elements and a different burden of proof.”  Kallini, DAB No. 2944 at 1.  However, the Board concluded that my rejection of Petitioner’s advice of counsel defense was “overbroad and requires reconsideration more specifically in the context of this case.”  Id.  The Board recognized that the availability of the advice of counsel defense in a case such as this is a question of first impression for the Board.  Id. at 7.  Based at least in part on the fact that the federal courts have accepted that advice of counsel may be raised as an affirmative defense in actions under the False Claims Act (FCA), the Board determined I erred in concluding that an advice of counsel defense is not available as a matter of law in this case.  The Board did not specifically note the distinction between enforcement actions under the FCA which may only be brought in the federal district courts and for which a jury trial is guaranteed, and an administrative action to impose administrative sanctions as in this case.  Id. at 8-9.  The Board did not specifically state that advice of counsel is an available affirmative defense or that evidence of advice of counsel may be offered to rebut the scienter element of the IG’s prima facie case.  However, the Board stated elements of such a defense and required the taking of evidence on remand as to the existence of the elements.  The Board instructed that on remand I should consider whether “the credible evidence on the record as a whole”3 shows that:  (1) Respondent

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acted reasonably and in good faith in seeking legal advice about whether his conduct was lawful; (2) made full disclosure to his lawyer of all relevant facts; (3) relied reasonably and in good faith on advice of his lawyer; and (4) the lawyer was acting as counsel and not as part of the criminal scheme, unless possibly, Respondent was unaware of his lawyer’s participation in the criminal scheme and Respondent’s reliance on the advice of his lawyer was otherwise reasonable.  Id. at 9-10.  The Board listed several factual issues it felt might be addressed on remand.  Id. at 10.  The Board also directed that on remand I consider the reasonableness of the proposed sanctions, applying the relevant factors specified by the Act and regulations to the facts found on remand.  Id. at 11-14.

a.  Elements of the IG’s Prima Facie Case

The IG initiated this action on November 6, 2017, when the IG gave Respondent notice of the determination to impose a proposed CMP, an assessment, and a 20-year exclusion.  IG Ex. 1.  Notice is required by section 1128A(c)(2) of the Act and 42 C.F.R. § 1003.1500.  Respondent has not challenged the sufficiency of the notice. 

The IG alleges generally that Respondent violated section 1128A(a)(1)(A) and (B) of the Act because he allowed, and thereby caused, his NPI to be used to present 1,727 claims totaling $3,133,700.00 to Medicare for nerve conduction studies that Respondent knew he did not provide or supervise.  The IG theory is that Respondent’s NPI appeared on claims for nerve conduction studies as though Respondent delivered or supervised those studies, but Respondent knew he did not deliver or supervise the studies.  Therefore, the claims with Respondent’s NPI violated section 1128A(a)(1)(A) of the Act because the services for which reimbursement was claimed were not delivered or supervised by Respondent as claimed.  Further, the claims violated section 1128A(a)(1)(B) of the Act because Respondent knew that the representation based on use of his NPI that he delivered or supervised the nerve conduction studies was false.

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Section 1128A(a)(1)(A)-(B) of the Act granted the Secretary authority to impose CMPs and assessments in lieu of damages against, and to exclude from Medicare, any person that:

(1)  knowingly presents or causes to be presented to an officer, employee, or agent of the United States, or any department or agency thereof, or of any State agency . . .  a claim . . . that the Secretary determines –

(A)  is for a medical or other item or service that the person knows or should know was not provided as claimed . . . [or]

(B)  is for a medical or other item or service and the person knows or should know the claim is false or fraudulent . . . . 

Act § 1128A(a)(1)(A)-(B).  Based on the language of the statute, the elements that the IG must prove by a preponderance of the evidence in order for me to find a basis for the sanctions against Respondent under section 1128A(a)(1)(A) are:

(1) Respondent knowingly presented or caused to be presented a claim to an agency of the United States, in this case Medicare, for payment; (2) the claim was for a medical or other item or service; and (3) Respondent knew or should have known the item or service was not provided as claimed. 

The elements that must be proved under section 1128A(a)(1)(B) are:

(1) Respondent knowingly presented or caused to be presented a claim to an agency of the United States, in this case Medicare, for payment; (2) the claim was for a medical item or service; and (3) Respondent knew or should have known that the claim was false or fraudulent.

The parties do not argue that the elements of both section 1128A(a)(1)(A) and (B) must be proved by the IG by a preponderance of the evidence in order for me sustain the sanctions imposed against Respondent.  Based on my reading of the Act, proving the elements of either section 1128A(a)(1)(A) or (B) is a sufficient basis for imposing authorized sanctions.

A “claim” is “an application for payments for items and services” under a federal health care program and includes Medicare, Medicaid, and other health care programs funded in whole or in part by the federal government.  Act § 1128A(i)(2); 42 C.F.R. §§ 402.3, 1003.110.  “Items and services” or an “item or service” includes “any particular item, device, medical supply, or service claimed to have been provided to a patient and listed in an itemized claim for payment.”  Act § 1128A(i)(3); 42 C.F.R. § 1003.110.  An item or

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service is only covered by Medicare if it is “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”  42 C.F.R. § 402.1; Act § 1862(a)(1).

Medicare only pays a supplier4 for covered services if the Medicare beneficiary assigns the claim to the supplier and the supplier accepts the assignment, subject to the conditions specified in the regulation.  42 C.F.R. § 424.55(a)-(b).  Medicare will not pay an amount due to a supplier under an assignment to any other person or entity.  Medicare may pay an amount due to a supplier pursuant to a valid reassignment under the limited circumstance specified by 42 C.F.R. § 424.80(b).  42 C.F.R. § 424.80(a).

Benefits available to a Medicare beneficiary under Medicare Part B pursuant to sections 1832, 1833 through 1835, 1861(qq), 1842(o), 1862, 1865(b), and 1881 of the Act; the conditions for payment and limitations on services; and deductible and copayment amounts are described in 42 C.F.R. pt. 410.  Medicare Part B pays for covered physician services subject to the provisions of 42 C.F.R. § 410.20.  Medicare will pay for services and supplies incident to a physician’s professional services only as provided by 42 C.F.R. § 410.26(b).  Specifically required is that “[s]ervices and supplies must be an integral, though incidental, part of the service of a physician (or other practitioner) in the course of diagnosis or treatment of an injury or illness.”  42 C.F.R. § 410.26(b)(2)

To receive payment for covered Medicare items and services from Medicare for an assigned claim or from a Medicare beneficiary in the case of an unassigned claim, a provider or supplier must be enrolled in Medicare.  Once enrolled the provider or supplier receives billing privileges and is issued a valid billing number.  The National Provider Identifier (NPI) is used as the Medicare billing number.  42 C.F.R. § 424.505.  The NPI is a standard, unique, ten-digit identifier issued to health care providers and suppliers.  45 C.F.R. § 162.406(a).  All providers and suppliers are required to qualify for an NPI

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and to include their NPI on all enrollment applications and all claims for payment.  Act § 1128J(e).  Required and permitted uses for the NPI are set forth in 45 C.F.R. § 162.406(b).  A health care provider or supplier must obtain a unique NPI from the National Provider System and use the NPI as an identifier on all standard transactions that require identification with the NPI.  45 C.F.R. § 162.410(a).  A provider or supplier enrolled in Medicare that “submits a paper or an electronic claim must include its NPI and the NPI(s) of any other provider(s) or supplier(s) identified on the claim.”  42 C.F.R. § 424.506(c)(1).  A Medicare contractor is required to reject a claim filed by a provider or supplier if required NPIs are not reported.  42 C.F.R. § 424.506(c)(3).  Therefore, a claim filed by a supplier or provider with no valid NPI, i.e. an NPI assigned to a provider or supplier that is not suspended, deactivated or revoked, will not be processed by a MAC.  A provider or supplier is prohibited from selling its NPI or billing privileges to any individual or entity, or allowing another individual or entity to use its NPI.  42 C.F.R. § 424.550.  Selling or allowing another individual or entity to use its billing number, except in the case of a valid reassignment of benefits,5 is grounds for revocation of the Medicare enrollment and billing privileges of a provider or supplier.  42 C.F.R. § 424.535(a)(7).

Section 1128A(a)(1) of the Act requires that, to be subject to authorized sanctions, a person knowingly submits or causes to be submitted a claim.  The terms “knowing” or “knowingly” are not defined by the Act.  However, the implementing regulations define the term “knowingly” to mean that a person,

with respect to an act, has actual knowledge of the act, acts in deliberate ignorance of the act, or acts in reckless disregard of the act, and no proof of specific intent to defraud is required. 

42 C.F.R. § 1003.110 (emphasis added).  The language is clear that only one mental state need be proved:  actual knowledge, deliberate ignorance, or reckless disregard.  Whether one acts with actual knowledge, deliberate ignorance, or reckless disregard are, under the statute, clearly fact issues.  Pursuant to section 1128A(i)(7) of the Act:  

The term “should know” means that a person, with respect to information –

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(A) acts in deliberate ignorance of the truth or falsity of the information; or

(B) acts in reckless disregard of the truth or falsity of the information,

and no proof of specific intent to defraud is required.

Act § 1128A(i)(7) (emphasis added).

The term false is not defined under section 1128A.  Black’s Law Dictionary defines false as untrue, deceitful, lying, not genuine, or inauthentic.  Black’s Law Dictionary 635 (8th ed. 2004).  Common meanings for false are (1) not genuine; (2) intentionally untrue, adjusted or made so to deceive, intended or tending to mislead; (3) not true; (4) not faithful or loyal, or lacking naturalness or sincerity; (5) not essential or permanent; (6) inaccurate in pitch; (7) based on mistaken ideas, or inconsistent with the facts; and (8) threateningly sudden or deceptive.  Merriam-Webster, www.m-w.com (last visited Apr. 13, 2020).

Fraud and fraudulent are not defined under either section 1128A of the Act or 42 C.F.R. pt. 1003.  Fraud has several definitions depending upon the context.  A general legal definition for fraud is a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.”  Black’s Law Dictionary 685 (8th ed. 2004).  Fraud may also be a “misrepresentation made recklessly without belief in its truth to induce another person to act.”  Id.  Fraudulent is the adjectival form of the term fraud.

Considering first the elements of section 1128A(a)(1)(A) of the Act:

(1)  Respondent knowingly caused to be presented a claim to Medicare for payment.  The parties stipulated that Medicare is an agency of the United States.  Jt. Stip. ¶ 29.  The parties also stipulated that Respondent agreed that Leonard Austin (Austin) and Gregory Sylvestri (Sylvestri) could use his NPI, and Respondent knew that they would use the NPI to submit claims to Medicare.  Jt. Stip. ¶¶ 20, 21, 27.

(2)  The claim was for a medical or other item or service.  The parties stipulated that the claims Austin and Sylvestri submitted to Medicare using Respondent’s NPI were for a medical service, specifically nerve conduction studies.  Jt. Stip. ¶ 28. 

(3)  Respondent knew or should have known that the item or service was not provided as claimed.  The parties stipulated that Respondent knew that the claims

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Austin and Sylvestri were filing with Medicare using Respondent’s NPI were for services provided by BioScan in the past.  Jt. Stip. ¶¶ 20-21.  The evidence shows, as discussed hereafter, that Respondent did not perform or supervise the nerve conduction studies for which 1,727 claims were filed with Medicare by Austin and Sylvestri using Respondent’s NPI.  Respondent does not allege he had a valid right of reassignment for any of the claims.  Therefore, Respondent knew that the nerve conduction studies were not provided or supervised by him and he had no valid right to reassignment of the claim, i.e., the services were not provided as claimed.

Considering the elements of section 1128A(a)(1)(B) of the Act:

(1)  Respondent knowingly caused to be presented a claim to Medicare for payment.  The parties stipulated that Medicare is an agency of the United States.  Jt. Stip. ¶ 29.  The parties also stipulated that Respondent agreed that Austin and Sylvestri could use his NPI knowing that they would use the NPI to submit claims to Medicare.  Jt. Stip. ¶¶ 20, 21, 27.

(2)  The claim was for a medical or other item or service.  The parties stipulated that the claims Austin and Sylvestri submitted to Medicare using Respondent’s NPI were for a medical service, specifically nerve conduction studies.  Jt. Stip. ¶ 28. 

(3)  Respondent knew or should have known that the item or service was false or fraudulent.  The parties stipulated that Respondent knew that the claims Austin and Sylvestri were filing with Medicare using Respondent’s NPI were for services provided by BioScan in the past.  Jt. Stip. ¶¶ 20-21.  The evidence shows, as discussed hereafter, that Respondent did not perform or supervise the nerve conduction studies for which 1,727 claims were filed with Medicare by Austin and Sylvestri using Respondent’s NPI.  Respondent does not allege he had a valid right of reassignment for any of the claims.  Therefore, Respondent knew 1,727 claims filed by Austin and Sylvestri using his NPI were false.6

Accordingly, I conclude that the stipulated and agreed facts are sufficient to establish the elements of the IG’s prima facie case.  The issue remaining to be decided is whether

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Respondent’s evidence that he relied upon advice of counsel is sufficient to rebut the IG’s prima facie case.  

b.  Facts

(i.)  Stipulated and Otherwise Undisputed Facts

The parties stipulated to the following facts, among others:

Respondent first enrolled in Medicare in the 1970s.  Jt. Stip. ¶ 2.  Respondent testified that he received his NPI in 1971.  Tr. 118.

Respondent agreed not to submit false claims as a requirement of enrolling in Medicare.  Jt. Stip.¶ 3.

Respondent solely owned his practice, Adel A. Kallini MD PA.  Jt. Stip. ¶ 5.

In about 2011, Respondent had accrued a tax debt owed to the IRS of approximately $300,000.  Jt. Stip. ¶ 8.

In about 2011, Respondent hired Mark McWilliams (McWilliams), an attorney, to help him with his tax debt to the IRS.  Jt. Stip. ¶ 9.

After the IRS seized money from Respondent’s bank account in 2013, Respondent began depositing money in McWilliams’ client trust account so that McWilliams could handle the IRS problem.  Jt. Stip. ¶ 11.

Austin and Sylvestri were ultrasound technicians, who bought a diagnostic testing business named BONB LLC a/k/a BioScan (BioScan) in December 2011.  Jt. Stip. ¶ 12.

Austin and Sylvestri learned after purchasing BioScan that BioScan did not have a valid NPI with which to file claims with Medicare.  Jt. Stip. ¶ 14.

Austin and Sylvestri had a significant number of claims for services purportedly performed in 2012.7   Jt. Stip. ¶ 15.

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In order to file claims for nerve conduction studies purportedly performed on Merficorp patients, Austin and Sylvestri searched for a physician who would allow them to use his or her NPI to file claims with Medicare.  Jt. Stip. ¶¶ 15-16.

Austin and Sylvestri met McWilliams through Jay Strauss (Strauss) ostensibly to address tax and bookkeeping issues.  Jt. Stip. ¶ 17.

Austin and Sylvestri asked McWilliams if he knew a physician who would allow them to file claims using the physician’s NPI.  Jt. Stip. ¶ 18.

In June 2013, Austin, Sylvestri, Strauss, McWilliams, and Respondent met at McWilliams’ office.  Jt. Stip. ¶ 19.

During the June 2013 meeting, Austin and Sylvestri explained to Respondent that they had performed procedures and they needed a physician who would allow them to file claims under the physician’s NPI.  Jt. Stip. ¶ 20.

Respondent understood that Austin and Sylvestri wanted to use his NPI on claims submitted to Medicare for services they allegedly performed in the past, in exchange for receiving a percentage of the Medicare payments on those claims.  Jt. Stip. ¶ 21.

Respondent agreed to the arrangement with Austin and Sylvestri and provided his NPI.  Jt. Stip. ¶ 22.

A written agreement was executed (IG Ex. 13), which Respondent did not read, and the parties did not follow the terms of the agreement.8   Jt. Stip. ¶¶ 23-26.

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Austin and Sylvestri used Respondent’s NPI to submit claims to Medicare, an agency of the United States, for nerve conduction studies conducted by BioScan.  Jt. Stip. ¶¶ 27-29.

Between June 2013 and January 2014,9 BioScan used Respondent’s NPI to file 1,727 Medicare claims for 6,282 items or services, specifically nerve conduction studies, with dates of service between July 2012 and December 2012, totaling $3,133,700, of which $1,087,710.69 was paid by Medicare (IG Ex. 15).  Jt. Stip. ¶¶ 27-29.

Respondent received the Medicare payments totaling $1,087,710.69 via direct deposits to his practice bank account.  Jt. Stip. ¶¶ 30-31.

Upon receiving a Medicare payment, Respondent notified Austin and then wrote a check for the amount of paid BioScan claims, which he gave to McWilliams to be placed in the trust account maintained by McWilliams.  Jt. Stip. ¶ 32.

Between July 18, 2013 and November 20, 2013, Respondent wrote 29 checks to McWilliams’ trust account totaling $1,059,975.71, which the parties stipulated are funds related to BioScan claims.  Jt. Stip. ¶ 33.

McWilliams distributed the funds from the BioScan claims pursuant to instructions, 65 percent to Austin and Sylvestri/BioScan, 5 percent to McWilliams’ firm, 5 percent to Magster Enterprises, LLC (Magster) which was

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owned by Strauss’s wife, and the balance remaining in the trust account was to be used for Respondent’s IRS debt or as Respondent directed.  In 2013 and 2014, McWilliams distributed funds as follows:  $707,493.46 to BioScan, $54,422.57 to Magster, and $54,422.59 to his law firm (IG Ex. 22).  Jt. Stip. ¶¶ 34, 36.

In October 2013, a Medicare beneficiary called Respondent and threatened to report him to Medicare because she saw a bill (or more likely an explanation of benefits (EOB)) listing Respondent, but she knew she had never seen Respondent.  Jt. Stip. ¶ 37.

On November 14, 2013, Medicare investigator Olga Llanes (Llanes) called Respondent’s office and left a message.  Respondent first called Austin several times because Respondent believed Llanes wanted to talk about BioScan claims.  Respondent then called McWilliams and asked that he contact Llanes.  Jt. Stip. ¶¶ 38-39.  I note regarding this stipulation that Respondent calling Austin to alert him that he thought Llanes wanted to discuss BioScan claims before calling his attorney is inconsistent with Respondent relying upon his attorney. 

Medicare made its last payment to Respondent for BioScan claims on November 20, 2013.  All claims after November 20, 2013, through January 16, 2014, were denied.  Jt. Stip. ¶ 41.

In December 2013, Safeguard Services (SGS) Medicare investigators Patricia Salgado (Salgado) and Elsa Pena (Pena) appeared at Respondent’s office, but he referred them to McWilliams when he learned they were fraud investigators.  SGS is a Unified Program Integrity Contractor for the Centers for Medicare & Medicaid Services.  On January 9, 2014, Salgado met with Respondent and McWilliams.  Salgado requested by letter dated January 31, 2014, that Respondent provide information about his Hialeah office that was mentioned during the interview (IG Ex. 20).  Jt. Stip. ¶¶ 42-43.

Twice in 2013, Medicare alerted Respondent that someone was attempting to make changes to his Medicare enrollment.  One instance in the fall of 2013, involved someone attempting to change Respondent’s electronic funds transfer information to a bank account over which Respondent had no control.  Respondent suspected Austin and Sylvestri, but he made no report to law enforcement or allegation of fraud or identity theft to Medicare.  Jt. Stip. ¶ 44.  I note that this stipulation is also inconsistent with Respondent’s claims of innocence but consistent with him wanting to avoid drawing attention to his illicit relationship with Austin and Sylvestri.

Respondent did not return $1,087,710.69 that he received as a result of the BioScan scheme.  Jt. Stip. ¶ 45.

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Respondent was indicted by a federal grand jury on May 3, 2015, of one count of conspiracy to commit health care fraud by submitting to Medicare false and fraudulent claims for services not rendered and not legitimately prescribed by a physician.  IG Ex. 2 at 6-7.  Respondent was also charged with one count of falsification of records in a federal investigation by falsely stating or causing to be falsely stated that Medicare beneficiaries on a list provided to him by Medicare were his patients and that he had seen those patients.  IG Ex. 2 at 8.  Respondent was acquitted after a criminal jury trial at which he argued as an affirmative defense that he relied in good faith upon advice of counsel.  Jt. Stip. ¶¶ 47-49; R. Ex. 1.  The parties do not agree that he was acquitted because the jury accepted his defense.  Tr. 713-21. 

The evidence shows that the United States Attorney for the Middle District of Florida declined to bring a civil investigation into Respondent’s billing practices, apparently based on the same conduct that is at issue before me.  R. Ex. 2.  

(ii.)  Evidence Related to Respondent’s Scienter and Findings

Prior to the hearing, the parties agreed that Respondent would testify first.  Tr. 8, 14. 

Respondent testified that in about 2010 or 2011, Respondent retained McWilliams to represent him as an attorney in dealing with a tax debt owed to the IRS.  Tr. 132-33.  During the summer of 2013, McWilliams called Respondent and asked if Respondent knew a physician who might allow McWilliams’ friends to use the physician’s NPI.  When Respondent did not get back to McWilliams with any names, McWilliams asked Respondent if he would be willing to allow the use of his NPI.  Respondent testified that he told McWilliams that if it was legal he was willing.  Respondent testified that he knew that services had been performed for patients but that billing could not be done because whoever had done the service did not have a valid NPI.  Respondent agreed to meet with McWilliams’ friends.  Respondent testified that McWilliams assured him more than once that the arrangement would be legal.  Tr. 135-36. 

Respondent testified he met with Austin, Sylvestri, and a third person at McWilliams’ office on a date he could not recall.  Respondent testified that he believed that McWilliams represented him as his attorney at that time, and McWilliams wrote the contract that established the arrangement among Respondent, Austin, and Sylvestri.  Respondent testified Austin and Sylvestri had provided services to patients and they needed to use Respondent’s NPI to file claims with Medicare.  McWilliams told Respondent the going rate for Respondent would be 25 percent and McWilliams would take 10 percent of the amount of the claims paid.  Respondent testified that McWilliams stated to him during and after the meeting that the arrangement proposed was legal.

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Respondent identified the document in evidence as IG Ex. 13 as the contract prepared by McWilliams that he signed.  Respondent testified that he did not read the contract before signing.  He testified that it was his understanding of the contract that the agreement was that Austin and Sylvestri could use his NPI to collect for work that had been done, and he would receive 35 percent of the amount of the claims paid Medicare.  He testified he could not recall exactly when he signed the contract with Austin and Sylvestri even after he was shown that the date with his signature on the contract was June 19, 2013 (IG Ex. 13 at 3). 

Respondent testified that after he signed the agreement he told his staff that Medicare would be calling to question the jump in his claims, that they should not worry, he would either refer Medicare to his lawyer or speak with the Medicare representative himself.  The fact that Respondent knew Medicare would call about the jump in claims certainly shows that Respondent had knowledge of the Medicare program and that the jump in his claims would provoke action by Medicare.  Respondent testified he received no calls from Medicare and the money kept coming in, so he thought McWilliams must have known what he was talking about.  Tr. 138-49, 292-93.  Respondent agreed in response to my question that he never previously billed for nerve conduction studies at all.  Tr. 293.  Respondent’s testimony that when he received no call from Medicare and the money kept coming he concluded McWilliams must have known what he was talking about, shows that Respondent had doubts about the validity of McWilliams’ alleged opinion that the arrangement with Austin and Sylvestri was legal. 

Respondent testified that subsequently two investigators from SGS visited his office and informed him that they were from the Medicare fraud section and his billing practices were being investigated.  Respondent testified he gave them McWilliams’ telephone number and told them to call him.  He then called McWilliams to alert him.  Tr. 153, 183-84.  On November 13, 2013, Respondent’s office staff received a call from a Medicare fraud investigator asking to speak with Respondent (R. Ex. 3), and he sent the information to McWilliams.  Tr. 153-55.  Respondent also identified a transcript of his telephone call to Austin during which he advised Austin he expected the Medicare fraud investigators to call him again soon and he intended to tell the investigators he did not know any of the patients or anything about them.  The transcript also shows that Respondent asked Austin what he should say to the investigators.  IG Ex. 19, Tr. 154-56.  The fact Respondent contacted Austin to coordinate what he should say to investigators rather than calling McWilliams for legal advice shows it is more likely than not that Respondent was more closely involved with Austin and Sylvestri than he has represented and also shows that he was not relying upon McWilliams for legal advice. 

Respondent testified that when the SGS investigators called again, he intended to tell them that he had not seen the patients Austin and Sylvestri saw and did not provide services to those patients.  He also testified he intended to tell the investigators that his lawyer told him the arrangement was legal and refer them to McWilliams.  Tr. 155-57.

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Respondent and McWilliams met with the SGS investigators at McWilliams’ office, but Respondent could not remember the date.  He testified that he told the investigators he never saw any of the patients Austin and Sylvestri filed claims for with his NPI because the services were done long before he met the two.  Tr. 185-86, 192-94.  Respondent subsequently testified he assumed the SGS investigators knew he never saw the patients because the BioScan deal occurred after the dates the patients received services.  When asked specifically by his counsel whether he had seen the patients or whether he had seen certain patients, Respondent testified he could not recall specifically what the SGS investigators asked.  Tr. 195. 

Respondent denied meeting with McWilliams, Austin, or Sylvestri prior to his interview by the SGS investigators.  Tr. 196.  As discussed later, Sylvestri had a very different recollection of meeting with Respondent and McWilliams prior the SGS interview of Respondent and agreeing upon what should not be discussed.  IG Ex. 3 at 189-90.  The fact that Respondent did not consult with McWilliams prior to the SGS interview is also suspect; it is contrary to reason that Respondent did not speak with his lawyer prior to such an interview.  Respondent denied that McWilliams advised him in January 2014 that his arrangement with Austin and Sylvestri may be questionable.  R. Ex. 14, Tr. 189-92.  Respondent testified that during the interview by SGS investigators he believed that McWilliams was his attorney and had been since approximately 2011.  Tr. 215-16.  He testified that McWilliams never told him that Respondent had potential criminal liability for his arrangement with Austin and Sylvestri.  Tr. 217. 

Respondent testified that he believed he received approximately $1.2 million in payments from Medicare.  Respondent testified his understanding of the contract with Austin and Sylvestri is that they would file claims with Medicare for their patients with his NPI, Medicare paid him, and he was to deliver the money to McWilliams.  The Medicare payments were deposited in his bank account and then he wrote a check for the full amount and delivered it to McWilliams.  McWilliams divided up the money.  Tr. 220-24, 294, 334.  Respondent testified that he believed that all claims filed with Medicare by Austin and Sylvestri were for services actually delivered.  Tr. 226.  Respondent asserted that he never intentionally violated any Medicare law.  Tr. 227.

On cross-examination, Respondent had better recall of the details of the meeting in June 2013 with Austin, Sylvestri, McWilliams, and another person he thought was Strauss.  He recalled that all except possibly McWilliams were already in McWilliams’ conference room when he arrived.  He testified that he wanted the meeting to learn what was going to be billed to Medicare.  Austin and Sylvestri explained that they or their technicians did electromyography (EMG) and nerve conduction studies on referral from physicians.  Respondent agreed that he never did either procedure.  Respondent admitted that he knew that they were going to be billing for procedures performed in the past, prior to June 2013.  Respondent was told that the procedures were done at an office in Hialeah that Respondent never visited.  Respondent agreed that he was not asked to see patients,

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review charts, or supervise procedures.  Respondent recalled that the shares of the Medicare funds received were discussed.  Respondent testified that he could not recall if the potential total of claims were discussed, but he believed that Austin and Sylvestri deserved to be paid for procedures they did but for which they could not file claims with Medicare.  He testified Austin and Sylvestri told him that they correctly did the paperwork for all the claims to be filed.  He agreed that Austin and Sylvestri gave him the names of some referring physicians, but he did not contact them and he never contacted any of the technicians he was told did the work.  He asked why Austin and Sylvestri had no NPI, but he could not recall the reason they said they did not, other than that there was a problem.  Tr. 234-50, 257-62. 

Respondent testified in response to my questioning, that McWilliams told him that he knew about Medicare.  Respondent did not ask for references or check McWilliams’ practice profile.  Tr. 250-51.  He subsequently testified in response to questioning by counsel for the IG that he did not ask McWilliams if he had knowledge of Medicare.  He asked McWilliams whether the deal with Austin and Sylvestri was legal or not.  Tr. 251-52.  I asked Respondent whether he specifically asked McWilliams whether or not it was legal for Austin and Sylvestri to use Respondent’s NPI to submit claims to Medicare and for Respondent to receive payment for claims for patients he never saw or supervised.  Respondent testified that’s what he meant when asking McWilliams whether the deal was legal and when McWilliams said yes, he directed him to write the contract.  Tr. 253-54. 

I asked Respondent if he knew why Austin and Sylvestri did not have an attorney representing them at the meeting in June 2013.  He responded that McWilliams was not representing them, he was their friend.  He agreed that McWilliams called his friends to the meeting to do business with Respondent.  Tr. 287-88.  Respondent agreed that he sued McWilliams for malpractice and they settled.  Tr. 288.   

Respondent presented as being extremely intelligent with an excellent command of the English language.  His alleged ignorance of Medicare participation requirements after more than 40 years of participation is not credible.  He clearly hoped to use McWilliams to shield him from liability, and while that worked in the criminal prosecution, it does not in this proceeding.  Respondent knew he did not see or supervise the treatment of the BioScan patients.  He knew he did not have an office in Hialeah.  Respondent had the opportunity to explain to investigators that he received bad advice from McWilliams and that’s how he got involved, but he did not.  Rather, Respondent allowed the investigators to form an incorrect impression based on his failure to disclose information about the BioScan deal, that he had no office in Hialeah, and that he never saw any of the Medicare beneficiaries for the BioScan claims, and never performed nerve conduction studies. 

Respondent testified in his criminal trial that he was born and raised in Egypt.  He went to medical school in Alexandria, Egypt and came to the United States in his 20’s in 1968 or 1969.  He moved to Florida in 1979.  IG Ex. 3 at 354-57.  He testified that during the

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June 2013 meeting with Austin and Sylvestri, McWilliams told him they wanted to use his Medicare provider number (NPI) to bill for services provided in the past.  He testified he asked McWilliams if that was legal and McWilliams responded that it was.  He testified that McWilliams prepared the contract that he signed, and he believed that McWilliams was his attorney during the transaction.  He testified that after the meeting he again asked McWilliams if the deal was legal, McWilliams responded that it was, and Respondent told McWilliams to prepare the contract.  He testified that he never read the contract.  He testified that he believed it was legal for claims to be filed with Medicare using his provider number for services he did not provide or supervise.  IG Ex. 3 at 364-66. 

Respondent gave a deposition in his civil lawsuit against McWilliams for malpractice on August 15, 2016.  Respondent testified he hired McWilliams to deal with the IRS.  IG Ex. 5 at 17-19.  He testified that prior to the meeting with Austin, Sylvestri, and Strauss, McWilliams told him that Austin and Sylvestri had done certain procedures for which they could not bill because they did not have a provider number (NPI) and they were looking for a physician to let them use his or her number.  Respondent told McWilliams he would look for someone.  A day or two later, McWilliams asked Respondent whether he wanted to let Austin and Sylvestri use his NPI.  IG Ex. 5 at 58-60.  Respondent testified that he responded “[i]f it’s legal, sure.”  IG Ex. 5 at 72. 

He testified that the purpose of the meeting with Austin and Sylvestri was to see if he was comfortable with the deal.  IG Ex. 5 at 73-74.  Respondent understood that Austin and Sylvestri had $1 million to $1.5 million in claims they wanted to file with Medicare using Respondent’s NPI.  IG Ex. 5 at 77.  He understood that he was to receive 35 percent of what Medicare paid on the claims.  IG Ex. 5 at 87.  Respondent admitted that he did not provide or supervise the delivery of items or services for the claims submitted by Austin and Sylvestri using his NPI.  Respondent knew that the claims submitted by Austin and Sylvestri using Respondent’s NPI were for past dates of services for patients Respondent never saw, and for items or services delivered at an office to which Respondent had never been.  Respondent agreed to accept 35 percent of what was paid on the claims for the use of his NPI.  IG Ex. 5 at 89-90, 164. 

Respondent testified that following the meeting he and McWilliams discussed the deal, McWilliams told him it was legal, and McWilliams told him he would take 10 percent of the 35 percent Respondent received.  He testified McWilliams did not tell him he did not know about Medicare law and he did not request a written legal opinion.  He testified that he believed that McWilliams would not have offered the deal to Respondent if it was not legal.  IG Ex. 5 at 100-02, 355.  Respondent testified he told McWilliams to draft the contract with Austin and Sylvestri and he never read it.  IG Ex. 5 at 153-56.  He testified that he gave Austin and Sylvestri his NPI either the day of or after the June 2013 meeting.  IG Ex. 5 at 116-17.

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Respondent testified that he understood that Austin and Sylvestri were filing claims for nerve conduction studies.  Respondent never performed a nerve conduction study himself.  IG Ex. 5 at 126.  In about three weeks, his practice started receiving payments from Medicare.  He told his staff that he was receiving money from Medicare through a deal with another company.  His staff used EOBs to determine which payments were for his patients and which for BioScan claims.  IG Ex. 5 at 134-37.  Respondent testified that his practice received calls from two patients who complained that bills were submitted to Medicare for services by him but they did not know him.  For the first call, he told his receptionist to call BioScan and for the second he called Austin himself.  IG Ex. 5 at 165, 170-72.  The fact Respondent made or directed calls to Austin rather than calling McWilliams also shows that Respondent was not relying upon McWilliams for legal advice. 

Respondent testified that during the initial meeting with Austin and Sylvestri he was concerned about whether or not procedures for which they wanted to bill were actually done.  He accepted their assurances that procedures were done.  IG Ex. 5 at 186-88.  He testified that twice Medicare informed him that someone was trying to do something with his provider number.  He could not recall when the incidents occurred.  However, he suspected Austin and Sylvestri.  IG Ex. 5 at 190-94, 212-18.  He admitted that after the Medicare fraud investigator showed up at his office he started to wonder about whether the arrangement was legal, he started to be suspicious.  However, he testified that his lawyer told him it was legal and nothing was wrong.  Tr. 196-97.  He testified that initially he was concerned that there were no patients or scans being done, but he accepted Austin and Sylvestri’s assurances, and when the two patients called to complain he knew there were patients.  IG Ex. 5 at 198.  Respondent’s testimony shows that he knew that the whole scheme was questionable from the beginning, but he did not report anything to Medicare.  He testified that when he received a payment from Medicare, he called Austin and Sylvestri to let them know he would be writing a check to McWilliams.  IG Ex. 5 at 199. 

He testified that when he learned about the November 13, 2013 telephone call from Medicare fraud investigator Llanes on about November 14, 2013, he sent a copy of a note about the call to McWilliams by facsimile.  He testified that he was sure Llanes’ interest was BioScan.  He testified that he was worried about working with Austin and Sylvestri.  He called McWilliams, who was to call Austin and Sylvestri and tell them no more billing.  He did not follow-up with McWilliams to ensure it was done.  IG Ex. 5 at 224-29.  Respondent did not call Medicare to inform officials that he may have been duped and to stop payment on BioScan billings, and he continued to receive payments from Medicare.  IG Ex. 5 at 230-31.  Respondent testified that when SGS investigators, Salgado and Pena, came to his office on December 19, 2013, he became very concerned about the integrity of Austin and Sylvestri.  IG Ex. 5 at 259-63.  However, Respondent made no effort to inform the investigators or Medicare that he had been duped.  He testified he called McWilliams who said he would call Austin and Sylvestri and tell them

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to stop billing using Respondent’s NPI.  IG Ex. 5 at 265.  Contrary to his testimony before me, Respondent admitted that McWilliams never represented that he knew anything about Medicare.  IG Ex. 5 at 368; Tr. 250-51.

Respondent’s words and actions belie his argument that he relied upon a legal opinion of McWilliams that the BioScan deal was legal.  Certainly, McWilliams brought Austin, Sylvestri, and Respondent together, which allowed them to agree to the BioScan deal.  However, Respondent evinced suspicion about Austin and Sylvestri and the lawfulness of the arrangement from the very beginning.  When, in October or November 2013, it became more apparent that the BioScan deal was likely fraudulent based on the patient complaints and investigator inquiry, Respondent did not act like an innocent.  Rather, Respondent used McWilliams as his shield to avoid making statements to investigators or otherwise addressing what was obviously a questionable arrangement with Austin and Sylvestri.  McWilliams failed to recognize that he needed to take action to extricate himself and possibly Respondent from the criminal enterprise, thereby confirming that McWilliams really knew nothing about the laws governing Medicare and fraud. 

McWilliams was called to testify before me by the IG.  McWilliams testified that his primary law practice involved wills, trusts, taxes, and probate.  He was retained by Respondent to handle Respondent’s personal and payroll tax issues in about 2011.  Tr. 398-402.  He usually communicated with Respondent by telephone or Respondent came to his office.  He testified that Respondent’s payroll tax issue was resolved by paying the IRS in full.  Petitioner’s personal tax issue was being resolved through an agreement with the IRS that established a payment plan with monthly payments.  Initially, Respondent deposited funds in his trust fund with McWilliams’ firm and McWilliams made the payments to the IRS, but eventually Respondent started making payments to the IRS.  Tr. 402-05. 

McWilliams testified that he met Austin and Sylvestri in 2012 because they also had tax problems.  He was introduced to them by Jay Strauss, who referred clients to him.  Strauss brought Austin and Sylvestri to McWilliams’ office.  McWilliams believed they were medical technicians based on the fact they were wearing scrubs.  He testified that he never really did tax work for them because they could not get information to him and ultimately in 2012, he referred them to a bookkeeper.  Subsequently, he thought likely in 2013, Austin and Sylvestri asked him if he knew any doctors that could read charts because they could no longer use the doctor they previously used.  He understood that Austin and Sylvestri would pay for the service of the doctor.  He gave them Respondent’s name and the names of other doctors who were also his clients.  Respondent expressed interest in reading charts.  Tr. 405-13, 596.

McWilliams testified that he called Austin or Strauss to set up a meeting.  The meeting was in June 2013, at his office with Austin, Sylvestri, Strauss, Respondent, and himself attending.  McWilliams testified that he was not present for the entire meeting, viewing

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his role as simply facilitating a business meeting.  He could not recall if specific business arrangements were discussed, but he understood generally that Austin and Sylvestri wanted a doctor to read charts and Respondent had receivables he wanted Austin and Sylvestri to attempt to collect.  He denied any recollection that Austin and Sylvestri wanted to use Respondent’s NPI.  Tr. 413-21, 596-99.  He agreed on cross-examination it was unlikely he told Respondent he was not acting as his attorney for purposes of the meeting or that his representation was limited to Respondent’s tax issues.  Tr. 599-600, 612-13.  He testified that he had no recollection of any agreement being reached during the June 2013 meeting.  He testified that he recalled Austin and Sylvestri subsequently producing an agreement that they said was the same agreement they had with their prior doctor.  His recollection was that Respondent brought the agreement to his office and they reviewed it together and made changes; he specifically recalled adding some paragraphs.  McWilliams identified IG Ex. 13 as a copy of the contract.  He testified that he had the document scanned into an electronic file, and he added paragraphs 17 and 18.  He testified he thought Austin and Sylvestri mentioned during the June 2013 meeting that they had a draft contract because they had worked with a doctor previously.10   He thought the contract provided for Austin and Sylvestri collecting Respondent’s receivables and Respondent getting paid for reading charts.  He testified that he could not recall if Respondent was present when he made changes.  He could not recall when the contract was signed.  He testified that Respondent never asked him whether the business arrangement was legal.  Tr. 424-39, 606-17, 624.  On cross-examination, McWilliams clarified that he understood that Austin and Sylvestri had provided services in the past and they needed Respondent to read the charts so the services could be billed using Respondent’s NPI.  He understood that billing would be done by Lovelace who he believed was Austin and Sylvestri’s billing person.  Tr. 618.  McWilliams also asserted on cross-examination that Respondent had been in practice 45 years and he knows what services he can bill for and which he cannot.  He stated that Respondent did not ask him

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and he could not give advice about whether or not what Austin, Sylvestri, and Respondent planned to do was legal or not because he did not know.  Tr. 620. 

McWilliams testified that he has no experience handling Medicare-related cases, including billing.  He testified he knew nothing about Medicare provider numbers except he understood it was a number used for billing.  He assumed Respondent had a Medicare provider number (NPI).  Tr. 422-24. 

McWilliams could not recall when, but he recalled that Respondent started dropping off checks to be deposited in his trust account.  The checks were written on Respondent’s business account.  McWilliams denied knowing Respondent’s source of funds.  He distributed funds per Respondent’s instructions to the IRS, Austin and Sylvestri, and others.  He testified that his understanding of why Respondent owed Austin and Sylvestri is they were collecting his receivables and he was working for them reading charts and Austin and Sylvestri were billing Medicare for the records Respondent read using his Medicare number (NPI).  Respondent wrote on copies of the checks he brought in how they were to be distributed.  Tr. 444-52, 626-35.

McWilliams testified that he became concerned about what Austin and Sylvestri had been doing when Respondent’s Medicare billing privileges were frozen.  He could not recall when the concern developed but possibly around November 21, 2013.  He testified he became concerned about whether Austin and Sylvestri were filing claims for real patients or people.  He asked that Austin and Sylvestri provide face sheets for patients so he could double check.  Tr. 477-82, 651-52.  McWilliams testified that his concern led to a meeting in December 2013.  The meeting was in his office and Austin, Sylvestri, Strauss, Respondent, and McWilliams were present.  McWilliams called the meeting because Respondent’s Medicare number was frozen and he had lost trust in Austin and Sylvestri.  Respondent was very agitated and worried when he told McWilliams his Medicare number was frozen, but McWilliams denied knowing what that actually meant.  McWilliams testified he asked during the meeting whether there was fraud.  Yelling ensued.  He believed if he could get face sheets for patients for whom claims had been filed, he could verify whether the claims were real or not.  Tr. 453, 481, 496-500, 673-79.   

McWilliams testified that in January 2014, investigators met with him and Respondent at his office.  He recalled the investigators said they wanted to talk about Respondent’s spike in billings.  He recalled no mention of BioScan during the meeting, but he did recall that he had mentioned Austin and Sylvestri and possibly Lovelace, were collecting Respondent’s receivables.  He recalled that the investigators asked Respondent whether he had a Hialeah office, and Respondent indicated he did but could not recall its address or employees’ names, information McWilliams provided the investigators after the meeting (IG Ex. 21).  However, McWilliams knew Respondent did not actually have an office in Hialeah.  McWilliams recalled that the investigators reviewed with Respondent a list of claims during the interview.  Tr. 504-25, 687-89, 691-93.  McWilliams testified

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that he contacted an outside attorney with Medicare expertise for advice around January 22, 2014.  Tr. 530, 679-81. 

McWilliams testified that as an attorney he has issued legal opinions, based on specific facts and clients, and they were always in writing.  He testified that he never provided Respondent, Austin, Sylvestri, or Strauss a written legal opinion regarding any issue.  He never issued a legal opinion regarding the enforceability of the contract among Austin, Sylvestri, and Respondent (IG Ex. 13) or whether it might violate the regulations and statutes that govern Medicare.  Tr. 537-40.  McWilliams’ testimony is consistent with his statement to investigators on February 10, 2016.  R. Ex. 22 at 6-7.  McWilliams also reviewed a document that purports to be a second contract among Austin, Sylvestri, and Respondent (R. Ex. 23).  He testified that he did not recall the document, doubted that he drafted it as it has to do with Medicare and he is not competent in that subject matter, and he rendered no legal opinion related to the contract.  Tr. 557-59. 

The record shows and McWilliams has not denied that he was representing Respondent with regard to Respondent’s taxes before the IRS and related to the Medicare investigation, including meetings and reporting to Medicare beginning in about November 2013.  Tr. 682, 684; R. Exs. 4, 13.  McWilliams’ testimony was credible.  He had nothing to gain by testifying falsely in this proceeding, as Respondent urges me to believe.  Criminal prosecution was unlikely.  R. Ex. 21; Tr. 534, 706.  The malpractice case Respondent initiated against him was settled.  IG Ex. 4; IG Ex. 18; Tr. 288-89, 329-40, 572-73.  His testimony is generally consistent with his February 10, 2016 interview with the IG and Department of Justice.11   R. Ex. 22.  McWilliams could have denied remembering whether he may have said something Respondent misconstrued to be an opinion that the BioScan deal was legal.  However, McWilliams was unequivocal that he had no knowledge of Medicare law and issues, he gave no legal opinion, and if he had it would have been in writing.  Given the litigious nature of our society, it is difficult to accept that even the most incompetent attorney would not document any legal opinion regarding such a business arrangement listing multiple caveats and exceptions as well as limitations on liability.

One of the attorneys representing Respondent in this proceeding was the same counsel who represented Respondent in his criminal trial.  In a side bar discussion with the judge

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during the criminal trial, counsel explained to the judge his theory of defense was that Sylvestri “duped Mark McWilliams, and duped [Respondent], and [Respondent] thought this [deal] was legal.”  IG Ex. 3 at 198.  He also stated:

No lawyer in their right mind would draft that contract [the BioScan deal of June 19, 2013(IG Ex. 13)].  That contract spells out fraud, and that’s my defense that it’s good faith reliance upon advice of his lawyer.

IG Ex. 3 at 200.  Counsel was successful in his attempt to place in evidence for the jury to consider a letter that Lovelace gave to Sylvestri and Sylvestri to McWilliams, that apparently expressed a legal opinion that Respondent argues McWilliams relied upon to conclude that the BioScan deal was legal, causing him to revise the contract that was signed by the parties and to advise Respondent that the deal was legal.  IG Ex. 3 at 199-210.  McWilliams told IG and Department of Justice officials during his February 10, 2016 interview that Austin and Sylvestri had handed out a letter from a lawyer that they represented justified using Respondent’s billing number.  McWilliams told the investigators he accepted the letter represented what Austin and Sylvestri asserted, but he did no legal analysis.  He said he made very clear to Austin, Sylvestri, and Respondent that he knew nothing about Medicare or medical billing.  R. Ex. 22 at 6-7.  The obvious inconsistency is that McWilliams agreed that he added paragraphs 17 and 18 to IG Ex. 13, the contract in question.  The fact McWilliams made any modification to the contract could be misinterpreted by Respondent to have been a tacit approval by McWilliams.  However, Respondent’s testimony, behavior, and the fact the terms of the contract were not actually followed, cause me to conclude that the contract was understood by Respondent and probably Austin and Sylvestri to be nothing more than a guise to cover their unlawful scheme to bilk money from Medicare.

Austin testified at Respondent’s criminal trial that McWilliams did not tell them one way or another at the June 2013 meeting whether what he, Sylvestri, and Respondent planned to do was legal.  IG Ex. 3 at 119, 121.  Sylvestri testified at Respondent’s criminal trial that Respondent was giving McWilliams five percent of the amount paid on BioScan claims to set up the deal correctly.  IG Ex. 3 at 161.  He agreed on cross-examination, that there was no discussion during the June 2013 meeting as to whether the deal was legal or not.  IG Ex. 3 at 197.  Austin and Sylvestri are consistent that there was no discussion during the June 2013 meeting whether the deal proposed was legal.  I accord weight to this testimony.  Sylvestri testified that he and Austin knew that they were going to commit Medicare fraud when they bought BioScan, ergo they knew during the June 2013 meeting with Respondent that they were furthering their scheme.  IG Ex. 3 at 223-35.  Sylvestri testified that he met with McWilliams and Respondent prior to the interview by the SGS investigators, Salgado and Pena, on January 9, 2014.  One of the things they agreed should not be discussed with the investigators was the fact Respondent had not seen any of the patients or provided the claimed services.  IG Ex. 3 at 189-90.  As noted

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earlier, Respondent flatly denied meeting with Austin or Sylvestri prior to his interview by the SGS investigators.  I find Sylvestri’s testimony on this point is more credible than Respondent’s.  Sylvestri’s version is more credible given the circumstances, i.e. all parties knew fraud investigators were there to ask questions about the BioScan claims, which without doubt, was going to lead to questions about Respondent’s actual services to the Medicare beneficiaries involved.  Further, the three agreed not to raise the issue with the investigators rather than lie about it.  Respondent also followed through with this agreement in the interview. 

c.  Analysis

The evidence taken as a whole shows that Respondent engaged in a deal with Austin and Sylvestri to submit claims to Medicare using Respondent’s NPI for services that Respondent did not deliver or supervise and for which Respondent had no valid reassignment.  Without consideration of Respondent’s case in rebuttal, I have no difficulty concluding that Respondent’s conduct was a basis for the IG to impose sanctions pursuant to section 1128A(a)(1)(A) and (B) of the Act.  However, Respondent argues before me, as he did at his criminal trial, that he should not be liable for any violation of section 1128A(a)(1)(A) or (B) of the Act because he acted on advice of his counsel McWilliams who told him the arrangement with Austin and Sylvestri was legal. 

In my first decision I concluded that the so called “advice of counsel defense” was not available in this forum as a matter of law.  I explained in my original decision that Respondent’s argument that he lacked the mental state or scienter required to violate section 1128A(a)(1)(A) and (B) of the Act because he relied upon the alleged advice of his attorney was not a defense.12   Scienter is a “degree of knowledge that makes a person legally responsible for the consequences of his or her act or omission. . . .”  Black’s Law Dictionary 1373.  The scienter required under section 1128A(a) of the Act is simply that Respondent knew or should have known that the claims submitted to Medicare in this case were for items or services not delivered as claimed or that the claims were false and fraudulent.  Act § 1128A(a)(1)(A) and (B).  There is no requirement under section 1128A of the Act or the implementing regulations at 42 C.F.R. pt. 1003 for Respondent to have had the specific intent to defraud Medicare by the submission of the claims at issue in order for sanctions to be imposed under section 1128A(1)(a)(A) and (B).  Indeed, the Act and regulations specifically state that specific intent to defraud is not required.  Act

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§ 1128A(i)(7) (definition of should know); 42 C.F.R. § 1003.110 (definition of knowingly).  Specific intent to defraud Medicare is not required to establish a violation of section 1128A(a)(1)(A) or (B).  All that is required under section 1128A(a)(1)(A) is that Respondent knew claims for services were submitted to Medicare and Respondent knew that the services were not delivered as claimed, i.e., he did not deliver or supervise the services or had no valid right of reassignment.  All that is required under section 1128A(a)(1)(B) is that Respondent knew claims for services were submitted to Medicare that Respondent knew were false because Respondent knew he did not deliver or supervise the services and he knew he had no valid reassignment.  Once Respondent agreed his NPI could be used by Austin and Sylvestri for the BioScan claims and the claims were actually submitted, the minimal scienter requirements of section 1128A(a)(1)(A) and (B) were satisfied.  Respondent has never denied that he knew the facts.  Even if McWilliams opined as Respondent asserts that filing the claims would be legal, an assertion I find not credible, the facts known to Respondent were not changed by that opinion, i.e., Respondent did not deliver or supervise the nerve conduction studies and he had no valid reassignment.  All that is required to satisfy the scienter requirement of section 1128A(a)(1), is the act of submitting the claims with knowledge they were false because the services were not delivered as claimed, i.e., Respondent knew that the claims were submitted, a fact not denied; the services were not delivered as claimed; and the claims were false because the nerve conduction studies were not provided or supervised by Respondent and he had no valid reassignment, facts not denied by Respondent.  The facts and Respondent’s knowledge of those facts cannot be changed by any legal opinion.  Even if Respondent believed that the false claims could be lawfully submitted based on advice of McWilliams, Respondent’s belief is simply not relevant because his knowledge of the facts was unchanged, even though his understanding of the facts may have been affected.  Therefore, an advice of counsel defense simply has no purpose in this case and should not be available as a matter of law. 

The Board, however, rejected the opportunity presented by my first decision to establish as a matter of law and policy on behalf of the Secretary, that the advice of counsel defense is not available in cases under section 1128A(a)(1) of the Act.  Recognition of such a defense is simply not required or necessary in the context of an administrative proceeding under section 1128A(a)(1) of the Act.  The availability of an affirmative defense based on advice of counsel is not necessary to disprove specific intent as no specific intent is required.  The unavailability of a defense of advice of counsel does not deprive a respondent of due process because presentation of evidence to rebut a prima facie showing of the knowledge required to impose sanctions under section 1128A(a)(1) is not precluded.  There is no jury in these administrative proceedings that requires instruction to permit the jury to understand that the absence of specific intent (if that were an element and it is not under section 1128A) is, if believed, a defense to imposition of sanctions under section 1128A(a)(1).

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Inexplicably, the IG seems to accept the availability of the defense despite the absence of any provision of the Act or the Secretary’s regulations that provide that such a defense is available and despite specific language of the Act that no specific intent is required.13   IG Br. at 3-5; IG Reply at 2-3. 

Both the Board and the IG focus on cases under the FCA and that an “advice of counsel defense” is recognized in those cases.  But the Board and the IG fail to recognize the distinction between cases under the Act and FCA cases, specifically these cases are not brought under the FCA and there is no possibility of a jury trial in this administrative forum.  The Act and regulations do not specify what defenses are available in an action by the IG pursuant to section 1128A of the Act, and I have found no authority requiring an advice of counsel defense as a matter of due process in an administrative forum.  Furthermore, if the Secretary and his delegates, the IG and the Board, are obligated by Congress to protect that Medicare Trust Fund, which is oft cited as the reason for many agency actions, then it is incongruous for the IG and the Board to permit a provider or supplier to possibly avoid responsibility for violation of the Act and regulations by asserting reliance upon the act or advice of an agent, in this case counsel.  The Act also specifically provides that “[a] principal is liable for penalties, assessments, and an exclusion under this section for the actions of the principal’s agent acting within the scope of the agency.”  Act § 1128A(l).

Nevertheless, the Board has made the defense available in this case, and I apply the Board’s holding as law of this case.  The Board instructed that on remand I should consider whether “the credible evidence on the record as a whole,” i.e., the preponderance of the credible evidence on the record as a whole, shows that:  (1) Respondent acted reasonably and in good faith in seeking legal advice about whether his conduct was lawful; (2) made full disclosure to his lawyer of all relevant facts; (3) relied reasonably and in good faith on advice of his lawyer; and (4) the lawyer was acting as counsel and not as part of the criminal scheme, unless possibly, Respondent was unaware of his lawyer’s participation in the criminal scheme and Respondent’s reliance on the advice of his lawyer was otherwise reasonable.  Kallini, DAB No. 2944 at 9-10.

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Preliminary to addressing whether the defense is triggered in this case and the elements of the defense, it is important to understand that the Act and regulations impose upon providers and suppliers the requirement to know and comply with the Act and regulations.  When enrolling in Medicare, providers and suppliers specifically agree they know the requirements of the Act and regulations and that they will comply.  42 C.F.R. § 424.510(d)(3).  As a condition of participating in Medicare, Respondent agreed to abide by the rules and regulations of participation in Medicare.  Participation in Medicare imposes obligations upon suppliers such as Respondent.  Suppliers must submit complete, accurate, and truthful responses to all information requested in the enrollment application.  42 C.F.R. § 424.510(d)(2)(i).  Pursuant to 42 C.F.R. §§ 424.502 and 424.510(d)(3), a supplier’s application to enroll in Medicare must be signed by an authorized official, i.e., one with authority to bind the provider or supplier both legally and financially.  The regulation provides that the signature attests to the accuracy of information provided in the application.  The signature also attests to the fact that the provider or supplier is aware of and abides by all applicable statutes, regulations, and program instructions of the Medicare program.  42 C.F.R. § 424.510(d)(3).  The Board has recognized that by enrolling in Medicare, a provider or supplier agrees to be bound by Medicare program instructions.  Proteam Healthcare, Inc., DAB No. 2658 at 11-12 (2015); Realhab, Inc., DAB No. 2542 at 17 (2013).  Furthermore, as a participant in Medicare, Respondent has “a duty to familiarize [him]self with the legal requirements for cost reimbursement.”  Heckler v. Comm. Health Servs., 467 U.S. 51, 64 (1984). 

Respondent had a duty, as a participant in Medicare, to understand Medicare billing requirements.  Id.  Publication of the Medicare regulations in the Federal Register, as those applicable in this case have been, establishes a rebuttable presumption Respondent had knowledge of the requirements of the regulations discussed in this decision and that they were binding upon him.  44 U.S.C. § 1507.  In other words, there is a presumption under the law that Respondent knew he was prohibited from allowing Austin and Sylvestri to use his NPI to bill Medicare for BioScan claims for services Respondent did not deliver or supervise and for which he had no valid reassignment.  It is also presumed Respondent was aware that under the regulations and Act he was subject to sanctions by the IG for allowing Austin and Sylvestri to use his NPI as they did to file claims for services not delivered as claimed and that were also false for that reason.  Respondent’s defense of advice of counsel is an effort to rebut the presumption that he had knowledge based on the argument his counsel told him the deal was legal. 

Although I will address the elements of the defense as defined by the Board, my conclusion is that the defense is not actually triggered by the facts established by the credible evidence in this case.  Based on the credible testimony of McWilliams, I find that McWilliams rendered no legal opinion that the deal among Respondent, Sylvestri, and Austin was legal.  McWilliams was adamant that he rendered no such opinion.  The fact that McWilliams knew he knew little or nothing about Medicare; the fact that no written opinion by McWilliams was issued or placed in evidence; the fact that

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Respondent knew he retained McWilliams for tax issues and McWilliams did not practice in the area of Medicare; the fact that Respondent went directly to Austin with his concern about the Medicare beneficiary who contacted him in October 2013 and threatened to report him to Medicare (Tr. 152); the fact Respondent called Austin when the investigator showed-up at his office on November 14, 2013 (Tr. 155); the fact that Respondent called Austin directly when payments were received; and the fact that Respondent did not immediately report what was going on to Medicare when the beneficiary called to complain in October 2013 or when an investigator first appeared at his office in November 2013, are all consistent with my finding that Respondent knew that allowing Austin and Sylvestri to use his NPI for filing BioScan claims violated the Medicare regulations because allowing another to use an NPI in this manner is clearly prohibited.  Further, Respondent knew that allowing the use of his NPI on the claims rendered them false as Respondent knew he did not deliver or supervise the services for which claims were filed and he had no valid right of reassignment.  No later than the meeting with Austin and Sylvestri in June 2013, the evidence related to Respondent’s conduct shows it was more likely than not that he knew permitting the filing of the BioScan claims with his NPI violated the Medicare regulations and would render the claims false because he did not deliver or supervise the services for which claims were filed and he had no valid right of reassignment.  Respondent had been enrolled in Medicare since 1971, and the limitations on assignments and reassignments and the use of the NPI are fundamental in the system.  Therefore, Respondent’s assertions that he knew nothing about Medicare after nearly 42 years in the Medicare program and his suggestion he knew nothing about the use of the NPI or assignments and reassignments is simply not credible.  Respondent testified and he is clearly very intelligent and dedicated to the practice of medicine, and he ran his own practice.  However, the evidence is also clear that he had a large tax debt that was more likely than not placing pressure on him, his practice, and his family, and he needed to resolve that debt.  Respondent’s testimony shows that he concluded that services reflected by the BioScan claims had been delivered in the past and he saw no harm in helping Austin and Sylvestri get paid by Medicare for those services.  Respondent rationalized that there was no fraud, but he agrees that he did not deliver or supervise the services and he had no valid reassignment, and he cannot rationalize that the claims submitted with his NPI were not false because the services were not delivered as claimed.  Whether or not Respondent determined in June 2013 that using McWilliams as a shield was a possible way to avoid responsibility for his conduct need not be decided.  Clearly by the time of Respondent’s acquittal, he saw the merit of laying blame at McWilliams’ doorstep.  In any case, Respondent knew that permitting the use of his NPI on the BioScan claims violated the regulations and rendered the claims false, and Respondent decided to lay the blame on McWilliams in an effort to negate his knowledge.  Because Respondent knew that permitting the use of his NPI on the BioScan claims violated Medicare regulations and rendered the claims false, whether or not McWilliams said anything that could be construed to be a legal opinion is irrelevant.  In fact, as already noted, I find as fact that McWilliams rendered no such opinion.  Accordingly, I conclude that the advice of counsel defense cannot exist in this case.

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Out of an abundance of caution, assuming the Board might disagree with my credibility assessment and find the defense is triggered, I analyze the elements of the defense specified by the Board.  Considering the specific elements of the defense as identified by the Board, I conclude as follows:

(1)  Respondent did not act reasonably and in good faith in seeking legal advice about whether his conduct was lawful.  Respondent knew McWilliams was retained to help resolve his tax issues.  Respondent had no reason to believe that McWilliams was competent to handle Medicare related issues.  McWilliams should have informed Respondent that he was not competent to render opinions regarding Medicare issues.  However, there is no evidence Respondent ever asked or clarified with McWilliams whether their engagement extended to coverage of non-tax issues.  Furthermore, I am convinced Respondent knew permitting the use of his NPI to file the BioScan claims violated the regulations and would render all the claims false because he did not deliver or supervise the services and had no valid reassignment.  Therefore, if Respondent’s assertion that he requested and received a legal opinion from McWilliams is accepted, the evidence shows it is more likely than not Respondent intended to attempt to legitimize his activity and potentially use McWilliams as a shield against any allegation of submitting false claims.

(2)  Respondent did not make full disclosure to his lawyer of all relevant facts.  It is important to note that Respondent has never asserted that McWilliams told him that the BioScan claims could be lawfully submitted using Respondent’s NPI even though the claims were for services not provided or supervised by Respondent and Respondent had no valid reassignment of the claims.  Respondent has only generally asserted that McWilliams told him the deal with Austin and Sylvestri was legal, an assertion I conclude is not credible for reasons already discussed.  Even if McWilliams did orally express the opinion that the deal was legal, McWilliams’ testimony is credible that he understood that, under the terms of the agreement, which all agree was not followed, Respondent was going to be reviewing charts for Austin and Sylvestri.  The fact Respondent was going to review charts for BioScan claims may have caused McWilliams to think, given his lack of understanding of Medicare, that Respondent’s review was sufficient to permit Respondent to submit the claims under his billing number and seek full

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reimbursement for the claims from Medicare.14   The fact that the agreement was not followed and Respondent reviewed no files should certainly render McWilliams’ ill‑considered legal opinion (assuming, as I do not, that one was given) invalid and no defense for Respondent. 

(3)  Respondent did not rely reasonably and in good faith on advice of his lawyer.  The evidence shows that Respondent did not rely on any advice by McWilliams reasonably and in good faith.  If it is accepted that McWilliams orally told Respondent the deal with Austin and Sylvestri was legal and he drafted the contract (IG Ex. 13), Respondent did not follow the terms of the contract or insist that Austin and Sylvestri do so.15

(4) McWilliams arguably conspired in or aided and abetted the criminal scheme that was formed on about June 13, 2013, because he brought Austin, Sylvestri, and Respondent together and he and his firm received a cut of the ill-gotten Medicare payments.  Respondent was fully aware of his lawyer’s participation in the criminal scheme and his receipt of a cut of the Medicare payments.  Therefore, Respondent’s reliance on the advice of McWilliams was not reasonable.

Based on the foregoing analysis, I conclude that the elements of the defense of advice of counsel are not satisfied in this case, and Respondent has failed to rebut the IG’s prima facie case. 

The Board in the Kallini decision suggested some issues that might need to be addressed on remand.  A summary of each issue and response follow:

Issue:  Whether Respondent was duped into the deal or believed that it was permissible for him to permit his NPI to be used to submit the BioScan claims even though he did not deliver or supervise the nerve conduction studies or have a valid right of reassignment.  Response:  Respondent clearly was not duped.  Respondent was presumed to know that permitting the use of his NPI under the circumstances described violated the regulations he agreed he knew and with

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which he agreed to comply.  After nearly 42 years enrolled in Medicare, it is not credible that Respondent was not aware of such fundamental requirements imposed upon him and other suppliers. 

Issue:  Whether Respondent could rely on McWilliams’ legal opinion that the BioScan deal was permitted under Medicare law.  Response:  No, because the evidence shows more likely than not that McWilliams never rendered such an opinion.  If McWilliams did render an opinion, more likely than not it was based in part on the fact that Respondent would be reading charts for Austin and Sylvestri, but that never occurred, rendering the opinion questionable if not invalid. 

Issue:  Whether Respondent disclosed to government investigators that he did not deliver services to patients at the BioScan Hialeah office.  Response:  Respondent testified that Investigator Salgado asked him about an office in Hialeah.  He agreed that there was an office in Hialeah and procedures were done there.  He testified he assumed they knew he did not do the procedures because he believed they knew that he did not contract with Austin and Sylvestri until June 2013.  Tr. 193-95, 198-200.  Respondent did not inform the investigators he did not perform the nerve conduction studies from the Hialeah office.  Tr. 201-202.  The fact Respondent did not disclose when he had the opportunity, shows that he was still attempting to conceal his involvement.  Not only did Respondent not give the investigators all the facts, he did not inform them that he had received a legal opinion from McWilliams that the use of his NPI by Austin and Sylvestri to submit old BioScan claims to Medicare was permissible.  Respondent’s failure to disclose the facts and to inform the investigators about the purported legal opinion show it is more likely than not, that Respondent realized the conduct was not lawful. 

Issue:  What is the significance of the fact that Austin, Sylvestri, and Respondent did not follow their contract?  Response:  Aside from the fact the contract was drafted, there is no evidence to suggest that the parties ever intended to follow the contract.  McWilliams thought the agreement was for Respondent to read charts.  However, that never happened which, for purposes of the advice of counsel defense, shows McWilliams, if he rendered a legal opinion, did so based on erroneous facts. 

Issue:  Whether McWilliams was acting as Respondent’s attorney in arranging for the meeting with Austin and Sylvestri or whether he was a participant in the criminal scheme.  Response:  There is no dispute that McWilliams was Respondent’s tax attorney in June 2013 when the meeting with Austin and Sylvestri occurred.  McWilliams’ testimony that he merely facilitated an opportunity for Respondent to meet Austin and Sylvestri with the possibility

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Respondent might make some money to pay his taxes, is credible and not inconsistent with McWilliams’ role as Respondent’s tax attorney.  However, McWilliams facilitated the meeting, distributed funds as directed by Respondent, and McWilliams’ firm received a cut of the proceeds of the scheme.  Certainly there is evidence that McWilliams was a participant, but he clearly was not criminally prosecuted or disbarred.

Issue:  The last issue identified by the Board has to do with the aggravating factors and the reasonableness of the sanctions and is discussed in that section of this decision. 

Kallini, DAB No. 2944 at 10-11.

Accordingly, I conclude that the IG has established by a preponderance of the evidence violations of section 1128A(a)(1)(A) and (B) of the Act, which are bases to impose a CMP, an assessment, and exclusion of Respondent from Medicare, Medicaid, and all other federal health care programs.  I further conclude that Respondent has failed to either rebut the prima facie showing by the IG or to establish an affirmative defense.  

6.  A CMP of $1,727,000, an assessment in lieu of damages in the amount of $3,263,132.07, and exclusion of Respondent for a minimum of 20 years are reasonable sanctions. 

I have concluded that there is a basis for the imposition of sanctions against Respondent.  Therefore, it is necessary to determine if the sanctions proposed by the IG are reasonable.  My authority is limited in this review, as the Secretary has provided that I may not review the exercise of discretion by the IG to exclude Respondent or impose a CMP and assessment pursuant to 42 C.F.R. pt. 1003 if I conclude that there is a basis for the imposition of sanctions.  42 C.F.R. § 1005.4(c)(5)-(7). 

Section 1128A(a) of the Act authorizes a CMP of $10,000 for each claim subject to section 1128A(a)(1) of the Act; an assessment in lieu of damages of no more than three times the amount claimed; and exclusion from participation in federal health care programs as defined by section 1128B(f)(1) of the Act.  The Secretary has delegated authority to the IG to impose a CMP, assessments, and exclusions against any person who has violated one or more provisions of section 1128A of the Act or 42 C.F.R. pt. 1003.  42 C.F.R. § 1003.150.

Section 1128A(d) of the Act requires consideration of the following factors in determining the amount of the CMP or assessment and the duration of an exclusion:

1.  Nature of claims and circumstances of their presentation;

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2.  Degree of culpability, history of prior offenses, and financial condition of the person presenting the claims; and

3.  Other matters as justice may require.

In determining the amount of any penalty, assessment, or period of exclusion, the Secretary has required by 42 C.F.R. § 1003.140(a) the consideration of certain factors summarized as follows:

1.  Nature and circumstances of the violations;

2.  Degree of culpability;

3.  History of prior offenses;

4.  Other wrongful conduct; and

5.  Such other matters as justice may require.

The regulation also provides that whether there are substantial or several mitigating or aggravating circumstance should be considered in determining reasonable sanctions.  42 C.F.R. § 1003.140(c)(1)-(3). 

Additional aggravating and mitigating factors specifically related to false or fraudulent claims and similar misconduct, which is what is charged in this case, are established by 42 C.F.R. § 1003.220.  It is mitigating if all claims for items or services or violations were of the same type and occurred within a short period, there were few items or services and violations, and the total amount claimed was less than $5,000.  42 C.F.R. § 1003.220(a).  Pursuant to 42 C.F.R. § 1003.220(b):

(b) Aggravating circumstances include—

(1) The violations were of several types or occurred over a lengthy period of time;

(2) There were many such items or services or violations (or the nature and circumstances indicate a pattern of claims or requests for payment for such items or services or a pattern of violations);

(3) The amount claimed or requested for such items or services, or the amount of the overpayment was $50,000 or more;

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(4) The violation resulted, or could have resulted, in patient harm, premature discharge, or a need for additional services or subsequent hospital admission; or

(5) The amount or type of financial, ownership, or control interest or the degree of responsibility a person has in an entity was substantial with respect to an action brought under § 1003.200(b)(3).

Once the amount of any penalty and assessment is determined, the IG must consider the ability of the person to pay the proposed CMP or assessment if the person provides sufficient financial documentation deemed necessary to determine the person’s ability to pay.  42 C.F.R § 1003.140(b).  Respondent presented no evidence related to his ability to pay and that is not at issue before me.16

The Secretary has determined that unless there are extraordinary mitigating circumstances, the aggregate amount of the CMP and assessment should not be less than double the approximate damages and costs sustained by the federal or any state government as a result of the Respondent’s violations.  42 C.F.R. § 1003.140(c)(3).  The Secretary has also provided that the amount of the CMP and assessment “will not be less than the approximate amount required to fully compensate the United States, or any State, for its damages and costs, tangible and intangible, including, but not limited to, the costs attributable to the investigation, prosecution, and administrative review of the case.”  42 C.F.R. § 1003.140(d)(2).  In this case, the CMP is calculated based on $1,000 per false claim, which is only 6.5 percent of the authorized CMP amount of $15,270 per item or service claimed.  Act § 1128A(a); 42 C.F.R. § 1003.210(a) (n.1); 45 C.F.R. § 102.3 (table).  The IG is proposing an assessment in lieu of damages of triple the amount paid by Medicare for the false claims rather than the minimum double damages.  The IG has not argued that the CMP and assessment in lieu of damages are the minimum necessary to recover the damages and costs to the United States.  Accordingly, whether or not the CMP and assessment are sufficient to recover fully the amount of damages and costs to the United States is not at issue before me.

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The Secretary is very specific that the standards established by the regulations are binding except to the extent that their application would violate the United States Constitution.  42 C.F.R. § 1003.140(d)(1).  The Secretary has provided that if more than one person is responsible for violating section 1128A of the Act, each person may be held liable for the CMP authorized.  Liability for an assessment may be imposed against any one person involved or jointly and severally, if two or more persons were involved, but the aggregate amount of the assessments collected may not exceed the amount that could be imposed if only one person was responsible for the violations that are the bases of the assessment.  42 C.F.R. § 1003.120(a)-(b).  The evidence before me indicates that only Respondent is the target of the IG. 

The IG notified Respondent that the IG intended to impose an assessment in lieu of damages of $3,263,132.07 and a CMP of $1,727,000, and to exclude Respondent from participation in Medicare, Medicaid, and all federal health care programs for 20 years.  IG Ex. 1.  Based on the IG notice and the IG’s pleading, I conclude that the CMP and assessment were calculated as follows:

A CMP of $1,727,000 is $1,000 for each of the 1,727 false claims filed using Respondent’s NPI; and

An assessment in lieu of damages to the United States of $3,263,132.07 is three times the $1,087,710.69 paid by Medicare for the false claims filed using Respondent’s NPI. 

The IG described in the November 6, 2017 notice how the factors required by section 1128A(d) of the Act and 42 C.F.R. §§ 1003.140 and 1003.220 were considered.  The IG considered as aggravating circumstances:  

The false claims totaled $3,133,700, and the amount paid by Medicare on the false claims totaled $1,087,710.69;

Respondent was culpable because he attempted to conceal his conduct from investigators and he used the proceeds of the scheme to pay his federal tax debt; and

Respondent engaged in other wrongful conduct because the contractual arrangement amounted to an unlawful kickback agreement in violation of section 1128B(b)(1) of the Act (42 U.S.C. § 1320a-7b(b)(1)), and the money received by Respondent was an overpayment that he did not return to Medicare.

IG Ex. 1 at 3-4.  The IG did not identify any mitigating factors in his November 6, 2017 notice and thus no mitigating circumstances were considered.  Respondent argues that the

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IG erred by considering no mitigating factors and that the IG erroneously considered facts as aggravating when they should have been considered mitigating.  R. Br. at 18-24; R. Reply at 8-11.  Following is my review of the aggravating and mitigating factors cited by the parties:

Respondent does not dispute that the false BioScan claims totaled $3,133,700 or that Medicare paid $1,087,710.69 on the false claims filed using Respondent’s NPI.  Respondent urges me to consider that Respondent participated in Medicare for over 40 years with no prior allegation of fraud.  R. Br. at 18.  Respondent has never denied that he allowed Austin and Sylvestri to use his NPI for claims filed with Medicare for nerve conduction studies he did not perform or supervise or for which he had a valid reassignment.  I accept that this is the first proven violation of Medicare regulations by Respondent during his 40 years of participation in Medicare.  I consider that this is a first offense, but that fact does little to minimize the magnitude of the misconduct.  Further, 40 years of participation means Respondent should have known better, which certainly does not minimize his culpability. 

Respondent alleges all the claims filed with Medicare were of the same type and the filings all occurred within a brief period, i.e., June 2013 to January 2014.  R. Br. at 18-19.  The evidence shows these facts are true.  Pursuant to 42 C.F.R. § 1003.220(a):

It should be considered a mitigating circumstance if all the items or services or violations included in the action brought under this part were of the same type and occurred within a short period of time, there were few such items or services or violations, and the total amount claimed or requested for such items or services was less than $5,000.

Therefore, this mitigating circumstance does not exist in this case contrary to Respondent’s assertion, because there were 1,727 claims which I conclude are many, and the amount of those claims far exceeded $5,000. 

Respondent argues Respondent was duped by Austin, Sylvestri, and possibly, McWilliams.  R. Br. at 19.  For reasons already discussed, I find it more likely than not that Respondent was not duped but rather became a willing participant in June 2013 in order to obtain money to pay his IRS and other debts.  Respondent also argues that most of the money went to Austin, Sylvestri, McWilliams and his firm, and Strauss.  R. Br. 19-20.  While the evidence shows that Respondent arranged for the disbursement of all but about 25 percent of the ill-gotten gains to others, the fact is that Respondent’s participation made the entire scheme and the entire loss to Medicare possible.  Respondent also argues no further allegation of

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misconduct has been made against Respondent.  I also consider this fact in determining the reasonableness of the proposed sanctions.

Respondent did not report to Medicare or its investigators that he had been solicited to participate in the scheme with Austin and Sylvestri.  In October 2013, Respondent was contacted by a Medicare-beneficiary who threatened to report him to Medicare.  Even though Respondent testified that at the time he felt there was something wrong and he attempted to contact Austin, Respondent did not contact Medicare to report the arrangement with Austin and Sylvestri or instruct McWilliams to do so.  Jt. Stip. ¶ 37; Tr. 150-52; IG Ex. 19.  Respondent did not disclose when contacted by investigators in November 2013 (Jt. Stip. ¶ 38-40) and January 2014 (Jt. Stip. ¶ 42-43), but actively concealed by his responses to investigators that he had given Austin and Sylvestri his NPI to use to submit BioScan claims for nerve conduction studies Respondent did not perform and for which he had no valid reassignment.17   I conclude that Respondent was culpable for not promptly disclosing to Medicare the solicitation by Austin and Sylvestri.  He was also culpable for not reporting to Medicare when he became aware of the complaint by the Medicare beneficiary, which he admits caused him to question the deal he had with Austin and Sylvestri.  I also find Respondent culpable for not honestly disclosing the facts to investigators but rather giving cagey responses clearly intended to mislead the investigators or to obscure the true facts.  To the extent that the advice of counsel defense may be urged to mitigate Respondent’s culpability, I have concluded that Respondent’s assertions that he did not know allowing Austin and Sylvestri to use his NPI violated Medicare regulations are not credible.  I also found credible McWilliams’ testimony that he rendered no opinion that the scheme among Austin, Sylvestri, and Respondent was legal. 

Respondent argues that I should consider that the judgment of acquittal (R. Ex. 1) and decision of the US Attorney not to pursue a civil action against Respondent (R. Ex. 2) show that he had no or minimal culpability for any wrongful conduct.  R. Br. at 22-23.  While I appreciate counsel’s ingenuity in presenting facts in a light most favorable to Respondent, I am aware that in a criminal jury trial the jury is instructed it must find guilt beyond a reasonable doubt.  Therefore, at most

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Respondent can argue that, based on the defense of advice of counsel, the jury could not find Respondent guilty beyond a reasonable doubt, not that he was innocent or not culpable.  There is simply no evidentiary basis in the record to infer that the jury found Respondent was not culpable.  Similarly, the Chief of the Civil Division of the US Attorney’s office in the Middle District of Florida clearly stated that based on the facts known to his office he was “not inclined to invest [the office’s] resources in pursuit of a civil case against this physician.”  IG Ex. 2 at 1.  Fair readings of the letter may be that the value of any possible recovery would not justify the cost of litigation or the odds of any recovery were too great to justify the cost of litigation.  The US Attorney’s declination includes no comment nor even permits an inference regarding the US Attorney’s view of Respondent’s culpability. 

Respondent admits that he spent the money he received from the BioScan claims to pay his debt to the IRS and for business expenses.18   Tr. at 222, 226-27; Jt. Stip. ¶ 34.

Respondent did not return to Medicare any of the $1,084,710.69 Medicare paid him for the BioScan claims.  Jt. Stip. ¶ 45. 

The IG asserts as an aggravating factor that Respondent’s conduct was a kickback arrangement that violated the anti-kickback provisions of section 1128B(b) of the Act (42 USC 1320a-7b).  IG Ex. 1 at 4; IG Br. at 26-27; IG Reply at 11-12.  Respondent disputes that there is other misconduct that the IG can consider.  R. Br. at 23-24; R. Reply at 10-11.  There is no evidence that Respondent was charged in this or any other forum with violation of section 1128B(b) of the Act or that any findings of guilt have been made against him.  Therefore, the burden is upon the IG to establish the violation, and I am required to determine in the first instance whether Respondent’s activities amounted to kickbacks within the meaning of section 1128B(b)(1) or (2).  The two subsections provide:

(b)(1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—

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(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.

(2) Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person—

(A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

(B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program,

shall be guilty of a felony and upon conviction thereof, shall be fined not more than $100,000 or imprisoned for not more than 10 years, or both.

Act § 1128B(b)(1)-(2) (footnotes omitted).  I conclude based on the plain language of the statute that Respondent’s conduct of permitting his NPI to be used by BioScan on claims for nerve conduction studies performed in the past that he did not perform or supervise and for which he had no valid reassignment, is not conduct of the type criminalized by section 1128B(b) of the Act.  Respondent neither received nor paid money or gave value in kind for the reasons prohibited by section 1128B(b)(1) or (2).  Therefore, I conclude that the IG erred by considering this uncharged misconduct as aggravating.  In re-evaluating the appropriate sanctions I do not consider this alleged uncharged misconduct.

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The IG also urges me to consider as aggravating that Respondent failed to repay any of the $1,084,710.69 he received from Medicare on the BioScan claims.  The IG argues that the $1,084,710.69 was an overpayment that Respondent was obligated to report and return to Medicare pursuant to section 1128J(d) (42 U.S.C. § 1320a-7k(d)) which also constituted violations of 42 U.S.C. § 1320a-7a(a)(1) and 31 U.S.C. § 3729 and subjects Respondent to a CMP, assessment, and exclusion pursuant to section 1128A(a)(10) of the Act (42 U.S.C. § 1320a-7a(a)(10)).  IG Ex. 1 at 4; IG Br. at 28-29; IG Reply at 11-12.  There is no evidence there has been any determination or adjudication related to the existence of an overpayment, the failure to pay, or the existence of a collectable debt owed by Respondent to the government.  Therefore, the burden to prove the debt and the failure to repay are upon the IG.  Factually there is no dispute that Respondent received the payments totaling $1,084,710.69 from Medicare.  Respondent does not deny that he received money from this scheme, money from Medicare to which he was not entitled.  Respondent does not deny that he did not return any of the money that he received through the scheme or report the overpayment.  I conclude that he was not entitled to the payments and even though he split the money among many, he remains responsible for the entire amount as he received the payments as the enrolled supplier.  I find on the evidence of record that Respondent failed to report or repay the money.  Section 1128J(d) of the Act requires that one who received an overpayment from Medicare, i.e., a payment to which they are not entitled (42 C.F.R. § 1003.110), must report the overpayment occurred and why and return the overpayment within 60 days.  An overpayment not returned within 60 days is an obligation within the meaning of 31 U.S.C. § 3729(b)(3).  Pursuant to the FCA, one who “has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property” is subject to a CMP and an assessment.  31 U.S.C. § 3729(a)(1)(D).  Even though the evidence does not show that an overpayment action was pursued against Respondent, the fact that he received money from Medicare to which he was not entitled and which he did not report and return, is aggravating conduct.  Respondent was not entitled to the money paid by Medicare on the BioScan claims and he therefore was in receipt of an overpayment that he failed to report or return within 60 days, which subjects him to a CMP and assessment under 31 U.S.C. § 3729(a)(1)(D). 

Respondent argues that Respondent’s failure to report and repay should not be considered an aggravating circumstance because it arises from the same facts as those specific facts on which liability is based.  Respondent cites 42 C.F.R. § 1003.140(a)(4) in support of his argument.  R. Br. at 23-24.  Respondent misconstrues the application of the regulation.  Respondent’s liability arises from permitting Austin and Sylvestri to use his NPI to file claims for nerve conduction

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studies Respondent did not deliver or supervise and for which he had no valid reassignment.  The aggravating circumstance urged by the IG is that Respondent failed to report that he was overpaid $1,084,710.69 and failed to repay Medicare that amount.  I conclude that the aggravating circumstance the IG considered related to the overpayment arises from facts separate from the basis for Respondent’s liability.  Accordingly, I conclude that this factor is properly considered aggravating other misconduct.

I have considered the factors required by section 1128A(d) of the Act and 42 C.F.R. §§ 1003.140 and 1003.220.  I conclude that the CMP, assessment in lieu of damages, and 20-year exclusion are reasonable sanctions.  The IG incorrectly considered in aggravation that Respondent’s conduct was a kickback.  Reassessment of the amount of the CMP and assessments, and the duration of the period of exclusion is thus appropriate. 

Considering Respondent’s conduct, his culpability, the loss to the Medicare program, the fact he had several opportunities to report to Medicare and its investigators when he saw the scheme was in jeopardy, his attempt to lay the blame at the feet of McWilliams, and his persistent attempt to avoid responsibility, in my opinion, permanent exclusion from Medicare and all federal health care programs is warranted.  Respondent has shown he is not trustworthy.  His age has not been shown to be a relevant factor.  However, I consider weighty that the IG determined to impose a 20 year exclusion, which I also conclude is not unreasonable. 

Regarding the CMP and assessment, 42 C.F.R. § 1003.140(c)(2) provides that if there are substantial or several aggravating circumstances, the aggregate amount of the CMP and assessment should be close to the maximum to reflect that fact.  There are several aggravating factors, all of which are substantial.  Further, 42 C.F.R. § 1003.140(c)(4) provides that the presence of any single aggravating circumstance may justify imposing a CMP and assessment near the maximum authorized even if one or more mitigating factors are present.  These requirements are binding upon the IG, the ALJ conducting review, and the Board.  42 C.F.R. § 1003.140(d)(1).  The IG’s proposed CMP of $1,727,000 is significantly less than the allowable maximum CMP.  I conclude that a CMP of $1,727,000 is entirely reasonable based upon Respondent’s culpability and the other aggravating factors discussed, and even considering the mitigating factors, and the IG’s error related to consideration of other misconduct.  The IG’s proposed assessment of three times the amount of the improper claims – $3,263,132.07 – is more than the minimum assessment allowed of double the loss to the government.  However, I conclude that the assessment proposed by the IG is reasonable on the undisputed facts I have already stated related to Respondent’s culpability and the other aggravating factors discussed, and even considering the mitigating factors, and the IG’s error related to consideration of other misconduct. 

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III.  Conclusion

For the foregoing reasons, Respondent is liable for a CMP of $1,727,000, an assessment of $3,263,132.07, and exclusion from Medicare, Medicaid, and all federal health care programs for a minimum of 20 years, all of which are reasonable sanctions.

1. “Sanctions” refers collectively to the penalties involved in this case, including the CMP, assessment, and exclusion.
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2. Pursuant to 42 C.F.R. § 1003.1600, Respondent may apply for reinstatement only after the period of exclusion expires.  Reinstatement is not automatic upon completion of the period of exclusion and any request for reinstatement will be considered in accordance with 42 C.F.R. §§ 1001.3001 through 1001.3004.  42 C.F.R. § 1003.1600.  Citations are to the 2017 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.
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3. To be clear, a preponderance of the evidence is required to meet the burden of persuasion.  42 C.F.R. § 1005.15(d).  The Supreme Court has described the preponderance of the evidence standard, the most common standard, as requiring that the trier-of-fact believe that the existence of a fact is more probable than not before finding in favor of the party that had the burden to persuade the judge of the fact’s existence.  In re Winship, 397 U.S. 358, 371-72 (1970) (Harlan, J., concurring); Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers, 508 U.S. 602, 622 (1993).  If advice of counsel is treated as an affirmative defense, Respondent has the burden of persuasion by a preponderance of the evidence to show each element of the defense.  42 C.F.R. § 1005.15(b).  If evidence of advice of counsel is permitted to rebut the IG evidence that the Respondent had the necessary state of mind, rather than as an affirmative defense, the burden of persuasion does not shift to Respondent.  The Board did not clearly state that Respondent bears the burden, and out of an abundance of caution, I do not treat the issue of advice of counsel as an affirmative defense, but rather consider whether the IG has shown it is more likely than not that Respondent had the requisite scienter despite the evidence and argument Respondent offered that he relied upon advice of counsel.
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4. Respondent, a physician, is a supplier.  An entity that conducts independent diagnostic testing, such as nerve conduction studies, that is not part of a provider, is also a supplier.  A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).
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5. There is no assertion that a valid reassignment of claims occurred in this case.  See 42 C.F.R. pt. 424 subpt. F.
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6. Because the section 1128A(a)(1)(B) provides that the claim may be either false or fraudulent, upon concluding that the claims were false, there is no need to resolve whether they were also fraudulent.
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7. The parties stipulated that the claims were for services performed for patients of MerfiCorp that was shut down in 2013, after its owner was arrested for conspiracy to commit health care fraud and receive kickbacks.  Austin and Sylvestri had access to MerfiCorp patients through an illegal arrangement with MerfiCorp owners and staff, including Brock Lovelace (Lovelace).  The parties stipulated that Respondent was not aware of this information.  Jt. Stip. ¶ 15.  The parties also stipulated that both Austin and Sylvestri were also indicted for federal offenses related to healthcare fraud unrelated to their activity with Respondent and, of which, Respondent had no knowledge.  Jt. Stip. ¶ 13.
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8. Two contracts resulted from the meeting.  One was the contract that is the focus of this case, the contract that allegedly provided for Austin and Sylvestri to use Respondent’s NPI to file claims with Medicare for services Respondent did not provide or supervise.  IG Ex. 13.  The contract stated that Respondent will “help process and submit” all BioScan claims electronically or by paper.”  IG Ex. 13 at 1, 2.  The contract provided that Respondent was to receive 36 percent of the gross amount collected for all claims “as a result of the billing services performed and the use of its [Respondent’s] Medicare number.  IG Ex. 1 at 1.  There is no evidence that Respondent’s practice ever did any billing on behalf of BioScan.  The second contract provided for BioScan to provide services for Respondent’s practice.  IG Ex. 23 at 2.  Respondent’s attorney, McWilliams, told investigators that he believed that the second contract was intended cover Respondent reading charts for Austin and Sylvestri.  R. Ex. 22 at 3.  There is no evidence Respondent ever read charts for Austin and Sylvestri.  R. Ex. 22 at 5. 
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9. IG Ex. 15 shows the first claim was received by Medicare on July 3, 2013, and the last claim was received on January 6, 2014.
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10. Austin testified at Respondent’s criminal trial that the contract template was provided by Lovelace and modified by McWilliams.  IG Ex. 3 at 122-23.  Sylvestri testified at Respondent’s criminal trial that McWilliams prepared the contract.  IG Ex. 3 at 159, 211.  Austin and Sylvestri have significant credibility problems.  The parties stipulated that they were both convicted of health care related crimes and they received sentence reductions in exchange for assisting the government.  Jt. Stip. ¶¶ 13, 46.  Both testified that their cooperation with the prosecutor in Respondent’s case was required by their plea agreement in exchange for a possible reduced sentence in their individual cases or to avoid prosecution for other offenses.  IG Ex. 3 at 83-84, 215-16, 256-69; IG Exs. 11, 12, 16.  However, their credibility problems do not mean that none of their testimony is credible, and their credible testimony is specifically noted hereafter.
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11. In that Report of Interview, it is reported McWilliams says he relied upon Respondent’s statement during the June 13, 2013 meeting that “it was okay for Austin and Sylvestri to bill under his name as if he completed services that he did not, as long as the services were actually done by someone.”  R. Ex. 22 at 3.
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12. If Respondent received bad advice from his attorney, his recourse was a civil action for damages, a course Respondent pursued in this case.  Tr. 288, 331-32, 572-75; IG Exs. 4, 5, 6, 18.
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13. The IG cites to several cases, including to ones from the 11th Circuit where this case arises, for my edification and the Board’s.  IG Br. at 4-5.  I see no need to add additional case authority to the authorities cited in my original decision, as those secondary sources comprehensively review and set forth a summary of the decisions that address advice of counsel either as an affirmative defense or when presented in rebuttal.  The Board also specified in its remand decision the elements of the defense it wants me to consider.
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14. This must not be read to accept that review by Respondent would have been sufficient to allow Respondent to file the claims using his NPI as if he delivered or supervised the services.
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15. To be clear, I do not conclude that the agreement (IG Ex. 3), if it had been followed, would have rendered the conduct of Respondent lawful.
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16. The Board stated in its decision that Respondent complained before the Board that he had no opportunity to submit evidence related to his ability to pay.  Kallini, DAB No. 2944 at 13 n.7.  Respondent clearly has had the opportunity and failed to do so.
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17. I do not consider aggravating that Respondent consulted with McWilliams.  My finding that Respondent actively concealed that he allowed Austin and Sylvestri to use his NPI to file claims for services Respondent did not deliver or supervise and for which he had no valid reassignment, is one of the issues of fact the Board suggested that I address related to the reasonableness of the sanctions.  Kallini, DAB No. 2944 at 11.
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18. My finding that Respondent spent the proceeds of the scheme he received to pay his IRS and other business debt is the second fact issue the Board suggested that I address related to the reasonableness of the sanctions.  Kallini, DAB No. 2944 at 11.
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