Ilya Kogan, DAB CR5750 (2020)

DECISION

I sustain the determination by the Inspector General (IG) to exclude Petitioner, Ilya Kogan, from participating in Medicare, state Medicaid programs, and other federally funded health care programs, for a period of at least 15 years.

I. Background

The IG filed a brief (IG Br.) and a reply brief in support of her determination.  The IG’s exchange included exhibits, identified as IG Ex. 1-IG Ex. 13.  Petitioner filed a brief (P. Br.) and two exhibits, identified as P. Ex. 1-P. Ex. 2.

The IG contends that this case should be decided without convening an in-person hearing. Petitioner argues that an in-person hearing is necessary in order to receive Petitioner’s proposed testimony.  I find no basis to convene an in-person hearing.

Petitioner did not offer admissible testimony.  He failed to offer it in compliance with my initial pre-hearing order.  I told the parties that I would receive testimony as evidence only if it was relevant, not duplicative of other evidence, and submitted as an affidavit or

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a sworn declaration.  Order and Schedule for Filing Briefs and Documentary Evidence, July 16, 2020, at 3.  Petitioner did not provide an affidavit or a declaration. 

II. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether an exclusion of at least 15 years is reasonable. 

B. Findings of Fact and Conclusions of Law

Petitioner pled guilty to the federal crimes of health care fraud, conspiracy to commit health care fraud, and mail fraud.  IG Ex. 5 at 2; IG Ex. 6 at 1, 2; IG Ex 8; IG Ex. 9.  Specifically, Petitioner was charged with, and admitted to, conspiring to submit and actually submitting false and fraudulent claims to Medicare and New York’s Medicaid program, as well as private insurers, for physical therapy services when, in fact, Petitioner and his co-conspirator either provided non-covered acupuncture services, or provided no services at all.  IG Ex. 5 at 1. 

Petitioner’s crimes were substantial.  The criminal conspiracy (to defraud health insurers and the allied mail fraud) extended over a period of about six years.  IG Ex. 5 at 2; IG Ex. 7 at 1.  The crimes had substantial financial impact.  Petitioner was sentenced to pay restitution to Medicare, Medicaid, and private insurers totaling more than $1.5 million.  IG Ex. 11 at 1-3, 6.  He was sentenced to serve 50 months in prison.  Id.

Petitioner’s convictions mandate his exclusion from Medicare, Medicaid, and other federally funded health care programs.  Social Security Act (Act) § 1128(a)(1), (3).  His crimes constitute offenses related to the delivery of items or services under Medicare and Medicaid, mandating exclusion as is described at section 1128(a)(1) of the Act.  They also are offenses relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service as is described at section 1128(a)(3) of the Act. 

Petitioner denies neither his convictions nor that the convictions are for crimes that mandate exclusion pursuant to sections 1128(a)(1) and (a)(3) of the Act.  Rather, he challenges the length of his exclusion – at least 15 years.

Exclusions imposed pursuant to sections 1128(a)(1) or (a)(3) must be for a minimum of five years.  Act § 1128(c)(3)(B).  The IG may exclude an individual who has been convicted of a crime pursuant to either of these sections for a period that is longer than the minimum period if certain aggravating factors are present that are not offset by the presence of mitigating factors.  42 C.F.R. § 1001.102(b), (c).

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The IG asserts that three aggravating factors exist here and that evidence relating to these aggravating factors establishes the 15-year minimum exclusion to fall within a reasonable range of exclusion periods.  The aggravating factors cited by the IG are:  (1) The acts resulting in Petitioner’s conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program of $50,000 or more; (2) The acts that resulted in Petitioner’s conviction, or similar acts, were committed over a period of one year or more; and (3) Petitioner was sentenced to a period of incarceration.  42 C.F.R. § 1001.102(b)(1), (2), (5).

Petitioner does not deny the existence of these aggravating factors nor does he dispute the evidence that the IG cites relating to those factors (the amount of restitution that Petitioner was ordered to pay, the duration of his crimes, or his prison sentence).  Rather, he contends that the evidence relating to these aggravating factors must be offset by evidence allegedly relating to a mitigating factor.  Citing 42 C.F.R. § 1001.102(c)(2), Petitioner argues that he suffers from a mental impairment – alcohol abuse – that reduced his culpability for his crimes. 

As I explain below, I do not find that Petitioner offered evidence establishing the presence of a mitigating factor.  Thus, in deciding whether Petitioner’s exclusion period is within a reasonable range, I may consider only the evidence relating to the three aggravating factors cited by the IG.  This evidence provides ample support for an exclusion of at least 15 years.

The regulations defining aggravating and mitigating factors do not define specifically what is a reasonable exclusion.  Rather, they function as rules of evidence.  In deciding whether an exclusion is reasonable, I may consider only evidence that relates to a defined aggravating or mitigating factor.  I must exclude from consideration evidence that does not relate to one of the factors.  In evaluating evidence that relates to an aggravating or a mitigating factor, I must weigh that evidence and decide its significance.  Ultimately, and bearing in mind the remedial nature of exclusions imposed pursuant to the Act, I must decide what the relevant evidence says about the trustworthiness of an excluded individual to provide care to Medicare beneficiaries and Medicaid recipients and to claim reimbursement from these programs.

Here, the evidence relating to the three aggravating factors relied upon by the IG establishes Petitioner to be highly untrustworthy.  In light of that, an exclusion of at least 15 years is eminently reasonable protection for federally funded programs and for their beneficiaries and recipients of program services.  Petitioner has been a determined and deliberate criminal.  He engaged in a concerted and obviously carefully thought out conspiracy extending over a period of several years to defraud Medicare, Medicaid, and private insurers.  That conspiracy had a massive financial impact, causing these programs and private insurers to sustain substantial losses exceeding $1.5 million.  He was sentenced to a prison term of more than four years.

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Mitigation may occur under 42 C.F.R. § 1001.102(c)(2) only if:  “[t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the [excluded] individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual’s culpability.”  Critical to establishing applicability of this subsection is proof that the judge imposing the sentence makes a finding of reduced culpability based on the presence of an impairment.  Proof that an excluded party suffers from a mental impairment is not sufficient by itself to qualify under the mitigating factor.  An excluded party must also prove that the sentencing judge relied on that impairment to make a determination of reduced culpability.  Mohamed Ahmad Bazzi, DAB No. 2917 at 10-11 (2018).

Here, Petitioner offered evidence showing that he suffers from a mental impairment, alcohol abuse.  He did not prove that the judge who sentenced Petitioner determined that Petitioner’s alcohol abuse reduced his culpability. 

The most persuasive evidence of a judge’s determination of reduced culpability obviously would be his or her own words in pronouncing a sentence.  Did the judge cite a mental or other disorder and find that it reduced an excluded individual’s culpability?  Did the judge order that a sentence be less than he or she otherwise would impose because of that individual’s reduced culpability? 

Petitioner identified nothing in the record of his conviction and sentencing to show that the judge who sentenced him found that alcohol abuse reduced Petitioner’s culpability. The sentencing judge imposed a sentence of 50 months incarceration rather than the recommended 60 months, but that reduction was premised on considerations other than Petitioner’s culpability.  He stated:

I’m going to impose the sentence as set forth in the sentencing opinion, but I will reduce the term by ten months in each case, and that’s a consideration based on the needs of the family.

IG Ex. 12 at 10 (emphasis added).  The judge cited no other considerations as a basis for reducing Petitioner’s sentence to 50 months incarceration.

Not only did the sentencing judge not explicitly find reduced culpability, but there is nothing in the record of Petitioner’s sentence and conviction that suggests that I should infer that the judge made such a finding. 

Petitioner argues that I should infer a finding of reduced culpability based on the judge’s order that Petitioner participate in an outpatient treatment program for his alcohol abuse.  P. Br at 5; see IG Ex. 12 at 24-25.  However, while the judge certainly recognized that Petitioner suffered from alcohol abuse, he did not make any finding that this abuse

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reduced Petitioner’s culpability for his crimes.  I do not infer from the judge’s mere recognition of Petitioner’s alcohol abuse that his culpability was reduced.  Bazzi, DAB No. 2917 at 10-11; James Bryan Joyner, M.D., DAB No. 2902 (2018).  Indeed, it is reasonable to infer that the judge did not find reduced culpability given his failure to mention alcohol abuse as a ground for reducing Petitioner’s prison sentence.

In a similar vein, Petitioner asserts that the sentencing judge – a former Deputy Mayor of New York City who has expressed opinions about whether certain controlled substances should be decriminalized – has a unique understanding of the impact of substance and alcohol abuse on individuals and families.  P. Br. at 1-2; see P. Ex. 1.  However, the fact that the sentencing judge may be sensitive to the impact of substance abuse does not lead to an inference that he found reduced culpability in this case as a consequence of Petitioner’s substance abuse.  Once again, the sentencing transcript speaks for itself.  The judge never mentioned substance or alcohol abuse as grounds for reducing Petitioner’s sentence.

Also, Petitioner contends that a presentence investigation report – a document that is not in evidence – recognizes Petitioner’s alcohol abuse.  P. Br. at 2-3, 5-7.  That assertion provides me with no basis to conclude that a recommendation was made in the presentence investigation report to reduce Petitioner’s sentence on account of his alcohol abuse.

In sum, I have no doubt that Petitioner abused alcohol and likely did so while he committed his crimes.  That is, however, irrelevant to deciding whether the 15-year minimum exclusion imposed by the IG falls within a reasonable range, absent proof that the sentencing judge found that Petitioner’s substance abuse diminished his culpability.  No such finding is in the record and, for that reason, no basis exists for me to find mitigation.  The exclusion that the IG determined to impose is reasonable based on the evidence relating to aggravating factors.