Alan Ira Newman, MD, DAB CR5788 (2020)

DECISION

Petitioner, Alan Ira Newman, MD, is excluded from participating in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)), effective December 20, 2018.  There is a basis for exclusion.  Petitioner's exclusion for a minimum of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).  An additional exclusion of five years, for a total minimum exclusion of 10 years,1 is not unreasonable based on consideration of four aggravating factors and one mitigating factor.

I.  Background

The Inspector General (IG) of the U.S. Department of Health and Human Services notified Petitioner by letter dated November 30, 2018, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for 10 years.

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The IG cited section 1128(a)(1) of the Act as the basis for Petitioner's exclusion.  The IG stated that the exclusion was based on Petitioner's conviction in the United States District Court, Northern District of Illinois (district court), of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  The IG extended the mandatory five-year exclusion to 10 years because Petitioner's acts that resulted in a conviction caused a financial loss to a government agency or program of $50,000 or more; the acts were committed over a period of more than one year; the sentence included incarceration; and Petitioner was the subject of an adverse action by a federal, state, or local government agency based on the same set of circumstances that are the basis for the imposition of this exclusion.  The IG considered Petitioner's cooperation with federal officials as a mitigating factor.  IG Exhibit (Ex.) 1 at 1-2.

Petitioner timely requested a hearing on April 2, 2020 (RFH).  On June 19, 2020, the case was assigned to me to hear and decide.  I convened a telephone prehearing conference on July 14, 2020, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence issued on July 15, 2020 (Prehearing Order).  On September 17, 2020, the IG filed a motion for summary judgment and supporting brief (IG Br.).  On October 13, 2020, Petitioner filed a response brief (P. Br.).  The IG waived filing a further reply on November 3, 2020.  The IG offered IG Exs. 1 through 8.  Petitioner did not file any exhibits.  Petitioner has not objected to my consideration of IG Exs. 1 through 8, which are relevant, and they are admitted as evidence.

II.  Discussion

A.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner's right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(a) of the Act, the Secretary must exclude from participation in any federal health care program any individual convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  Act § 1128(a)(1).  Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where a judgment of conviction

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is withheld.  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. § 1001.101(a), (c).2

Exclusion for a minimum period of five years is mandatory for any individual or entity convicted of a criminal offense for which exclusion is required by section 1128(a) of the Act.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)).  Pursuant to 42 C.F.R. § 1001.102(b), an individual's period of exclusion may be extended based on the presence of specified aggravating factors.  Only if the aggravating factors justify an exclusion of longer than five years, however, are mitigating factors considered as a basis for reducing the period of exclusion to no less than five years.  42 C.F.R. § 1001.102(c).

In this proceeding, the standard of proof is a preponderance of the evidence, and there may be no collateral attack of the conviction that is the basis for the exclusion.  42 C.F.R. § 1001.2007(c), (d).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(b), (c); Prehearing Order ¶ 4.

B.  Issues

The Secretary has by regulation limited my scope of review to two issues:

Whether the IG has a basis for excluding an individual or entity from participating in Medicare, Medicaid, and all other federal health care programs; and

Whether the length of the exclusion is unreasonable.

42 C.F.R. § 1001.2007(a)(1).

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

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

1.  Petitioner timely filed his request for hearing, and I have jurisdiction.

The IG's notice of exclusion is dated November 30, 2018.  Petitioner did not file a request for hearing until April 2, 2020.  Therefore, the IG moved to dismiss this case

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because the request for hearing was not timely filed.  On August 18, 2020, I denied the IG's motion to dismiss for untimely filing.  Ruling Denying Motion to Dismiss and Schedule for Filing for Summary Judgment, Briefs, and Documentary Evidence dated August 18, 2020.  I conclude that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.

2.  Summary judgment is appropriate.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing.  The Secretary has provided by regulation that a sanctioned party has the right to a hearing before an ALJ, and both the sanctioned party and the IG have a right to participate in the hearing.  42 C.F.R. §§ 1005.2‑.3.  Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration.  42 C.F.R. § 1005.6(b)(5).  An ALJ may also resolve a case, in whole or in part, by summary judgment.  42 C.F.R. § 1005.4(b)(12).

Summary judgment is appropriate in an exclusion case when there are no disputed issues of material fact and when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law.  Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett, DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W. Foderick, M.D., DAB No. 1125 (1990).  When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one.  Surabhan Ratanasen, M.D., DAB No. 1138 (1990); Foderick, DAB No. 1125.  In opposing a properly supported motion for summary judgment, the nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent's prima facie case or that might establish a defense.  The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment.  To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder.  On summary judgment, the judge does not weigh the evidence or attempt to determine the truth.  Rather, the judge accepts the nonmovant's evidence as true and draws all permissible inferences in the nonmovant's favor.  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-57 (1986).

There are no genuine issues of material fact in dispute in this case.  Petitioner admits that he pleaded guilty to and was convicted of a charge of health care fraud.  Petitioner does not dispute the aggravating factors cited by the IG -- that the acts that are the basis of his conviction were committed for over a year; that his actions caused a $2,600,000.00 loss to the federal government; that he was sentenced to a period of incarceration; and that he was also subject to an adverse state action based on his conviction.  Petitioner does not

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dispute that the IG considered Petitioner's cooperation with authorities when determining to extend the period of exclusion.  Petitioner argues that he pleaded guilty in order to avoid a federal investigation and that had he requested a jury trial he would have been acquitted.  He argues that he committed no fraudulent acts and had no knowledge of such acts being committed by the company for which he worked.  Petitioner also advances several arguments about the quality of care he provided his patients, his personal mental health issues, his charitable nature, and similar arguments.  RFH; P. Br.  All of Petitioner's arguments must be resolved against him as matters of law, even if I accept his assertions of fact as true for purposes of summary judgment.  There is no dispute as to the material facts that trigger mandatory exclusion pursuant to section 1128(a)(1) of the Act for a minimum period of five years.  There also is no dispute as to the material facts that permitted the IG to extend the mandatory five-year exclusion period to 10 years.  Accordingly, I conclude that summary judgment is appropriate.

3.  Section 1128(a)(1) of the Act requires Petitioner's exclusion from participation in Medicare, Medicaid, and all other federal health care programs.

a.  Facts

The material facts are undisputed.

Petitioner was a licensed physician in the State of Illinois.  RFH; IG Ex. 6 at 3. 

Petitioner was indicted with a co-defendant by a grand jury on February 25, 2015, of multiple counts of health care fraud and acts in furtherance thereof.  IG Ex. 5.

On March 31, 2016, Petitioner signed a plea agreement in which he agreed to plead guilty, in exchange for a sentence limitation, to health care fraud as alleged by Count 12 of the multi-count indictment of February 25, 2015.  IG Ex. 6 at 1, 11-13.  Petitioner admitted in his plea agreement and by his guilty plea that he was involved in the fraud scheme from approximately February 2013 through July 2014.  He also admitted that the purpose of the fraud was to obtain money from the federal Medicare program.  IG Ex. 6 at 2-3; IG Ex. 5 at 2-6, 17.  Petitioner admitted that the total amount of loss to Medicare due to the fraud scheme and the amount of restitution owed was $2,600,000.  IG Ex. 6 at 5, 12.

On July 24, 2018, the district court accepted Petitioner's guilty plea and entered a judgment of guilty of one count of health care fraud.  Petitioner was sentenced to one year and one day in prison and to pay restitution of $2,600,000 to the Centers for Medicare & Medicaid Services (CMS) of the U.S. Department of Health and Human Services.  IG Ex. 2.

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On May 21, 2016, Petitioner agreed to a Consent Order with the Department of Financial and Professional Regulation, Division of Professional Regulation of the State of Illinois (Medical Board) that suspended his medical license indefinitely based upon the same facts and circumstances to which Petitioner pleaded guilty in the district court resulting in the conviction that is the basis for the IG's exclusion of Petitioner.  IG Ex. 7 at 1-4.  

b.  Analysis

The IG cites section 1128(a)(1) of the Act as the basis for Petitioner's mandatory exclusion.  The statute provides in relevant part:

(a) MANDATORY EXCLUSION. – The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):

(1) CONVICTION OF PROGRAM-RELATED CRIMES. – Any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.

Act § 1128(a)(1).  Congress has, by the plain language of section 1128(a)(1) of the Act, required the Secretary to exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity:  (1) convicted of a criminal offense, whether a misdemeanor or felony; (2) where the offense is related to the delivery of an item or service; and (3) the delivery of the item or service was under Medicare or a state health care program.

Petitioner does not dispute that he was convicted or that the offense of which he was convicted was related to the delivery of an item or service under Medicare.  The district court accepted Petitioner's guilty plea to health care fraud and entered a judgment of conviction.  IG Ex. 2.  Accordingly, Petitioner was convicted within the meaning of the Act.  Act § 1128(i)(3).

Petitioner does not dispute that the offense of which he was convicted was related to the delivery of an item or service under Medicare.  I conclude, based on the facts, that there is a common-sense connection or nexus between Petitioner's health care fraud against Medicare and the delivery of an item or service under Medicare.  Saadite Green, DAB No 2940 at 6-7 (2019) (and cases cited therein).  Petitioner's plea agreement (IG Ex. 6) and Count 12 of the indictment to which he pleaded guilty and of which he was convicted show Petitioner was involved in a scheme to falsely certify individuals as entitled to home health treatment in order to gain payment for such services from Medicare.

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Accordingly, I conclude that all elements that trigger a mandatory exclusion pursuant to section 1128(a)(1) of the Act are satisfied and the IG has a basis to exclude Petitioner.

Petitioner argues that he only pleaded guilty to eliminate the pressure of being under investigation by the federal government with all its resources.  He asserts he had no knowledge of the fraud that was occurring at his employer and if he had not pleaded guilty but requested a jury trial he would have been acquitted.  P. Br.  Petitioner cannot collaterally attack his conviction in this proceeding.  42 C.F.R. § 1001.2007(d).  Petitioner is bound by his plea agreement and the judgment of the district court, and I have no authority to look behind either.

Petitioner argues that he had mental health issues; he was responsible for his father's medical care; he is a dedicated, caring, and competent physician whose services were much in demand; he is considerate, compassionate, selfless, and honest; he is a man of integrity and against any illegal activity; he did not live excessively and investigators found no financial irregularities; he pays his debts; and he has lost his retirement savings.  P. Br. at 3-4.  These facts are not material to the issues of whether there is a basis for Petitioner's exclusion or the duration of the period of exclusion due to the limit on the issues I may consider.  Therefore, even if I accept Petitioner's allegations as true for purposes of summary judgment, they do not affect the outcome in this case.

Because I have found that there is a basis for Petitioner's exclusion pursuant to section 1128(a)(1) of the Act, Congress has mandated his exclusion.  Neither the IG nor I have any discretion not to exclude Petitioner in this case.  I am bound to follow the federal statutes and regulations.  42 C.F.R. § 1005.4(c)(1).

4.  Pursuant to section 1128(c)(3)(B) of the Act, a five-year period of exclusion is mandatory.

I have concluded that there is a basis to exclude Petitioner pursuant to section 1128(a)(1) of the Act.  Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act.  The IG has no discretion to impose a lesser period, and I may not reduce the period of exclusion below five years.

The remaining issue is whether it is unreasonable to extend Petitioner's exclusion by an additional five years.  My determination of whether the period of exclusion in this case is unreasonable turns on whether:  (1) the IG has proven that there are aggravating factors; (2) Petitioner has proven that the IG considered an aggravating factor that does not exist or that there are mitigating factors that the IG failed to consider; and (3) the period of exclusion is within a reasonable range.

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5.  Petitioner has not presented evidence of any mitigating factors, other than that considered by the IG, and does not allege the existence of any mitigating factors recognized by 42 C.F.R. § 1001.102(c) in addition to the mitigating factor considered by the IG.

6.  Four aggravating factors authorized by 42 C.F.R. § 1001.102(b) and one mitigating factor authorized by 42 C.F.R. § 1001.102(c) are present that justify extending the minimum period of exclusion to 10 years.

The IG notified Petitioner that four aggravating factors are present in this case that justify an exclusion of more than five years:

(1)  Petitioner's acts that resulted in his conviction, or similar acts, caused or were intended to cause financial loss to a government agency or program or one or more entities of $50,000 or more;

(2)  Petitioner's acts that resulted in his conviction, or similar acts, were committed over a period of one year or more;

(3)  Petitioner was sentenced to incarceration; and

(4)  Petitioner was subject to an adverse action by the state and the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.

IG Ex. 1 at 2.

It is undisputed that as a condition of Petitioner's sentence, the District Court ordered Petitioner to pay restitution in the amount of $2,600,000 to CMS.  IG Ex. 6 at 12; IG Ex. 2 at 7.  The Board has previously accepted that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program.  Jeremy Robinson, DAB No. 1905 at 11 (2004); Craig Richard Wilder, DAB No. 2416 at 9 (2011); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Laura Leyva, DAB No. 2704 at 9 (2016).  Here, the financial loss to CMS caused by Petitioner's actions is greater than the regulatory minimum required loss of $50,000.  Petitioner does not dispute the amount of the loss and agreed as part of his pretrial agreement to the restitution amount.  IG Ex. 6 at 5, 8, 12.  These undisputed facts establish the existence of the first aggravating factor considered by the IG because Petitioner's acts that resulted in his conviction caused a loss to Medicare of far more than $50,000.  42 C.F.R. § 1001.102(b)(1).

It is undisputed that Petitioner agreed in his plea agreement that the acts resulting in his conviction, and similar acts, were committed for over a year, from 2013 through July 2014.  IG Ex. 6 at 2.  Petitioner does not now dispute that the acts were committed for

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over a year.  P. Br. at 2-3.  The Board has previously discussed the purpose of the aggravating factor under 42 C.F.R. § 1001.102(b)(2), saying that it reflects "the Secretary's recognition that an individual whose lapse in integrity occurs over a period of one or more years poses a far greater threat to federal health care programs and beneficiaries than an individual 'whose lapse in integrity is short-lived.'"  Hussein Awada, DAB No. 2788 (2017) (quoting Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003)).  Petitioner's acts were not short-lived and were committed for more than a year.  The undisputed facts establish the existence of the second aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(2).

It is also undisputed that the district court sentenced Petitioner to prison for one year and one day, which establishes the existence of the third aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(5).  IG Ex. 2 at 2.

Finally, it is undisputed that the Illinois Medical Board indefinitely suspended Petitioner's license to practice medicine.  IG Ex. 7.  The basis for the state action was the same as the basis for Petitioner's conviction which is the basis for Petitioner's exclusion by the IG.  These facts establish the existence of the fourth aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(9).

I conclude that the aggravating factors that the IG considered are established by the undisputed facts.  The aggravating factors are a basis for the IG to extend the period of exclusion beyond the minimum exclusion of five years.  42 C.F.R. § 1001.102(b).

Pursuant to 42 C.F.R. § 1001.102(c), if the IG considers aggravating factors to extend the mandatory period of exclusion beyond five years, specified mitigating factors may be considered.  The IG identified Petitioner's cooperation with federal officials as one mitigating factor.  IG Ex. 1 at 2; IG Ex. 8 at 1.  Petitioner cooperated with federal investigators and was available to testify against a co-defendant in the underlying criminal case.  IG Ex. 8 at 3.  I conclude that Petitioner's cooperation was a mitigating factor under 42 C.F.R. § 1001.102(c)(3)(i).  The mitigating factor was considered by the IG in determining to extend the period of exclusion to 10 years.  IG Ex. 1 at 2.

Petitioner does not dispute that the IG correctly identified one mitigating factor.  Petitioner does not argue that the IG considered an aggravating factor that does not exist or that there are mitigating factors that the IG failed to consider.  P. Br. at 2-3.  Petitioner filed with his request for hearing his curriculum vitae, highlighting his accomplishments and qualifications as a physician.  Petitioner's assertions previously discussed, and his curriculum vitae do not establish any mitigating factor authorized to be considered by 42 C.F.R. § 1001.102(c).  Although Petitioner asserts that he had mental health issues during his prosecution (P. Br. at 3), there is no evidence that the district court determined that Petitioner's mental health reduced his culpability, a mitigating factor recognized by 42 C.F.R. § 1001.102(c)(2).

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I conclude that Petitioner has not shown a genuine dispute as to the existence of any aggravating or mitigating factors under 42 C.F.R. § 1001.102(b) and (c), even if I accepted his allegations as true for purposes of summary judgment.

7.  Exclusion for 10 years is not unreasonable in this case.

The regulation states that the ALJ must determine whether the length of exclusion imposed is "unreasonable."  42 C.F.R. § 1001.2007(a)(1).  The Board, however, has made clear that the role of the ALJ in exclusion cases is to conduct a de novo review of the facts related to the basis for the exclusion and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period of exclusion imposed by the IG falls within a reasonable range.  Juan de Leon, Jr., DAB No. 2533 at 4-5; Craig Richard Wilder, DAB No. 2416 at 8; Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000).  The Board has explained that, in determining whether a period of exclusion is "unreasonable," the ALJ is to consider whether such period falls "within a reasonable range."  Cash, DAB No. 1725 at 17 n.6.  The Board cautions that whether the ALJ thinks the period of exclusion is too long or too short is not the issue.  The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum.  In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggested that when it is found that an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate.  Thus, the Board has by these various prior decisions significantly limited my authority under the applicable regulation to judge the reasonableness of the period of exclusion.

Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes the four aggravating factors and one mitigating factor that the IG considered in determining to impose the 10-year exclusion.  Petitioner has not presented any evidence that shows a genuine dispute that the IG failed to consider any mitigating factor or considered an aggravating factor that did not exist.  I conclude that a period of exclusion of 10 years is in a reasonable range and not unreasonable considering the existence of four aggravating factors and one mitigating factor.  No basis exists for me to reassess the period of exclusion.

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III.  Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all other federal health care programs for a minimum of 10 years, effective December 20, 2018.

1. Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires.  Reinstatement is not automatic upon completion of the minimum period of exclusion.
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2. Citations are to the 2018 revision of the Code of Federal Regulations, unless otherwise stated.
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