William Elder-Quintana, MD, DAB CR6152 (2022)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, William Elder-Quintana, MD, from participation in Medicare, Medicaid, and all other federal health care programs based on his federal conviction that related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of any health care item or service pursuant to section 1128(b)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(b)(1)).  For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner.  An exclusion for a minimum of six years, effective March 20, 2022, is not unreasonable based on the application of two aggravating factors and no mitigating factors. 

I.   Background

In a letter dated February 28, 2022, the IG informed Petitioner that she had imposed an exclusion pursuant to section 1128(b)(1) of the Act, 42 U.S.C. § 1320a-7(b)(1), for a minimum period of six years, effective 20 days from the date of the letter.  IG Ex. 1.  The IG explained that the exclusion was based on “[Petitioner’s] conviction (as defined in section 1128(i) of the Act) in the United States District Court, Northern District of Texas, Dallas Division,” of the following, in pertinent part:

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a misdemeanor offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of any health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or with respect to any act or omission in a health care program, other than Medicare and a State health care program, operated by, or financed in whole or in part by, any Federal, State or local Government agency.¹

IG Ex. 1 at 1, citing 42 U.S.C. § 1320a-7(b)(1), 42 C.F.R. § 1001.201.  The IG informed Petitioner that, based on her application of two aggravating factors and no mitigating factors, she had imposed a six-year exclusion.  IG Ex. 1 at 2; see 42 C.F.R. § 1001.201(b)(2)(i) (“[t]he acts resulting in the conviction, or similar acts, caused or reasonably could have been expected to cause, a financial loss of $50,000 or more to a government agency or program or to one or more other entities that had a significant financial impact on program beneficiaries or other individuals”); 42 C.F.R. § 1001.201(b)(2)(iv) (“[t]he sentence imposed by the court included incarceration”). 

Petitioner, through counsel, submitted a timely request for an administrative law judge (ALJ) hearing on April 28, 2022.  The Civil Remedies Division issued my standing pre-hearing order on April 29, 2022.  On May 16, 2022, I presided over a telephonic pre-hearing conference, and that same day I issued an order summarizing the discussions that took place during the conference. 

The IG filed a brief (IG Br.) and a reply brief (IG Reply), along with 10 proposed exhibits (IG Exs. 1-10).  Petitioner filed an informal brief (P. Br.) and 15 proposed exhibits (P. Exs. 1-15).  Both parties filed evidentiary objections, with Petitioner objecting to IG Exs. 6 and 7, and the IG objecting to P. Exs. 5, 7 and 15.  The IG also “reserve[d] her right to object to” P. Ex. 8.²

Petitioner objects to the admission of IG Ex. 6, which is his June 23, 2016 “Agreed Order” with the Texas Medical Board.  Petitioner argues that “under Texas statutory law, an Agreed Order ‘is a settlement agreement under the Texas Rules of Evidence for purposes of civil litigation,’ and that use of such a settlement agreement ‘is a direct

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violation of the Texas rules governing an Agreed Order.’”  The Texas Rules of Evidence is inapplicable to these proceedings, and I am not bound by the Federal Rules of Evidence, much less the Texas Rules of Evidence.  42 C.F.R. § 1005.17(b).  Rather, I must determine the admissibility of evidence, and whether evidence is irrelevant, immaterial, or privileged.  42 C.F.R. § 1005.17(a), (c), (e).  I must also exclude evidence of a compromise or settlement made in connection with the instant exclusion action.  42 C.F.R. § 1005.17(f). 

Although Petitioner argues that the Agreed Order is an inadmissible settlement agreement pursuant to subsection 164.002(d) of the Texas Occupations Code, he disregards the immediately preceding subsection of the Texas Occupations Code, which states the following: 

An agreed disposition is a disciplinary order for purposes of reporting under this subtitle and of administrative hearings and proceedings by state and federal regulatory agencies regarding the practice of medicine.  An agreed disposition or a remedial plan under Section 164.0015 is public information. 

Texas Occ. Code § 164.002(c); see IG Ex. 6 at 7 (“THIS ORDER IS A PUBLIC RECORD.”) (capitalization in original).  As quoted above, the instant case involves a request for an administrative hearing to challenge a federal regulatory agency’s action that restricts Petitioner’s practice of medicine.  Such an Agreed Order is unquestionably admissible evidence when presented in the context of a disciplinary order addressing the conduct underlying an exclusion imposed by a regulatory agency.  See Request for Hearing at 7 (Petitioner’s claim that his “ability . . . to continue working as an ER physician . . . has been put on hold due to being subject to a permissive exclusion”).  I overrule Petitioner’s objection to the admissibility of the Agreed Order into the evidentiary record for this administrative proceeding.  See IG Ex. 6 at 3 (“Section 164.051(a)(1) of the Act authorizes the Board to take disciplinary action against [Petitioner] based on [his] commission of an act prohibited under Section 164.052 of the Act.”). 

Despite his objection to the admission of the June 2016 Agreed Order, Petitioner quizzically submitted other disciplinary orders as proposed exhibits, specifically an August 2021 “Waiver Order” and a September 2018 “Agreed Order for Reprimand and Stipulation on License.”  P. Exs. 4, 13.  In fact, the latter order included Petitioner’s stipulation that his “unprofessional or dishonorable conduct,” which was based on a finding that he had “prescrib[ed] compounded medications to patients without personally obtaining adequate information to justify the prescriptions,” subjected him to discipline.  P. Ex. 4 at 3.  Petitioner’s submission of other agreed orders undermines his argument that a single disciplinary order is inadmissible evidence.

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With respect to the substance of the August 2016 Agreed Order, Petitioner’s objection states that “the Order states on its face that [Petitioner] ‘neither admits nor denies’ the information in the Order,” and “[t]herefore, it is not a valid source of facts because [Petitioner] does not admit to any of the factual statements or conclusions of law in the Order.”  Petitioner contorts the plain language of the Agreed Order.  On page 3, Petitioner stated he “neither admits nor denies the information given above,” with the information “above” consisting only of “General Findings” (e.g., biographical facts) and “Specific Panel Findings” (factual findings regarding the nature of Petitioner’s conduct).  However, the “information given above” to which Petitioner neither admitted nor denied, did not include the “Conclusions of Law” that followed on pages 3-4 of the Agreed Order.  Those unchallenged conclusions of law included the medical board’s stated bases for taking “disciplinary action” that included “unprofessional or dishonorable conduct that is likely to deceive or defraud the public or injure the public.”  IG Ex. 6 at 3.  Petitioner signed the agreement, acknowledging that the “agreed order contains the entire agreement.”  IG Ex. 6 at 9.  Petitioner has not demonstrated that the Agreed Order is inadmissible, and I overrule Petitioner’s objection. 

Petitioner also objects to the admission of IG Ex. 7, which is the second superseding indictment (herein “the indictment”) that was unsealed on January 9, 2018.  Petitioner does not cite any legal authority in support of his objection.  Rather, Petitioner argues that he was acquitted of the offense charged in Count 1, and the jury did not return a verdict on the remaining counts (31-34).  See IG Ex. 8 at 4.  The Departmental Appeals Board (DAB) has stated that “evidence that is extrinsic to the criminal court process (regardless of whether or not the evidence or its content were presented at the grand jury, trial, plea or sentencing phases) is admissible to show that the conduct underlying the offense met the elements of the exclusion law.”  Narendra M. Patel, M.D., DAB No. 1736 at 14 (2000), aff’d sub nom., Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003), cert. denied, 539 U.S. 959 (2003).  At least one co-conspirator was convicted of Count 1 of the indictment, validating that a fraudulent scheme did, in fact, occur.  See IG Exs. 7 at 8; 8 at 1.  The indictment is relevant and material evidence of the fraud perpetrated through the CMGRX scheme, and Petitioner has admitted that his criminal conduct was a component of that scheme.  IG Exs. 3, 4 (guilty plea for knowingly using unique health identifiers to issue prescriptions for compounded drugs, and acknowledgment that the prescriptions were used in the commission of health care fraud and in violation of federal anti-kickback law).  Finally, the indictment is referenced by other admitted exhibits, further demonstrating its materiality and relevance.  See IG Exs. 3 (Petitioner’s agreement “not to contest, challenge, or appeal” the asset forfeitures outlined in the indictment); 8 (jury verdict); 10 (district court order denying acquittal).  

In the absence of any legal basis to exclude the indictment, I overrule Petitioner’s objection to IG Ex. 7.  

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The IG objects to the written direct testimony submitted by Petitioner.  See P. Exs. 5 at 1-7 (testimony of Petitioner); 15 (testimony of Jose Raul Crespo, MD, ABEM).  The IG’s objections are vague and overly broad, and the IG has not supported its claims that the testimony, in its entirety, is “extraneous,” “unreliable,” “irrelevant,” and “immaterial.”  Although the testimony may have limited, if any, probative value, that does not necessarily mean that the entirety of the testimony is irrelevant and immaterial, and therefore, I overrule these objections.  See Pre-Hearing Order § 14 (allowing for the submission of written direct testimony). 

The IG also objects to the admission of P. Ex. 5 pages 8-10 (COVID-19 vaccine redistribution agreement regarding the transfer of COVID-19 vaccine doses between two entities) and 12-18 (medical director agreement covering the period August 2018 through August 2020).  I address these documents in my discussion of Petitioner’s claims that mitigating factors are present, and I overrule the IG’s objections based on relevance and materiality. 

Finally, the IG “reserve[d] her right to object” to P. Ex. 8, which is a printout of an email message that a Medicare administrative contractor sent to a Gmail account for “Billy Elder” that apparently includes an attached file named “Default.pdf.”  Even assuming, as Petitioner claims, that the “Default.pdf” file is a notice issued by the Centers for Medicare & Medicaid Services (CMS), Petitioner has not shown that communications from CMS or its administrative contractor are relevant and material to the instant exclusion.³  42 C.F.R. § 1005.17(c).  I exclude P. Ex. 8 from the evidentiary record. 

I admit IG Exs. 1-10 and P. Exs. 1-7 and 9-15 into the evidentiary record. 

The IG has not requested an opportunity to cross-examine Petitioner’s witnesses, and therefore, a hearing is unnecessary for the purpose of cross-examination of any witnesses. Pre‑Hearing Order §§ 14-16; see Lena Lasher,DAB No. 2800 at 4 (2017) (discussing that when neither party submits written direct testimony as directed, “no purpose would be served by holding an in-person hearing . . . .”), aff’d, Lasher v. Dep’t of Health & Human Servs., 369 F. Supp.3d 243 (D.D.C. 2019).  I will decide this case on the written submissions and documentary evidence.

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II.  Issues

Whether there is a basis for exclusion, and if so, whether a minimum period of exclusion of six years is unreasonable.  42 C.F.R. § 1001.2007(a)(1). 

III.  Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2. 

  IV. Findings of Fact, Conclusions of Law, and Analysis⁴

1. On or about March 10, 2021, Petitioner pleaded guilty to a misdemeanor information charging that, in violation of 42 U.S.C. § 1320d-6(a)(1) and (b), he wrongfully used a unique health identifier. 
2. Petitioner, a physician, wrote prescriptions for compounded drugs that were used by others to commit health care fraud and in connection with illegal kickbacks. 
3. The evidence indicates that, over the span of approximately seven months from on or about October 2014 through April 2015, Petitioner wrote over 16,000 prescriptions to TRICARE beneficiaries, resulting in payments by TRICARE of approximately $96 million, with Petitioner receiving proceeds totaling $323,555.  
4. Petitioner’s criminal conviction was related to fraud, theft, embezzlement, breach of fiduciary responsibility or other misconduct in connection with the delivery of a health care item or service. 
5. The IG was authorized to impose an exclusion pursuant to section 1128(b)(1) of the Act. 

Section 1128(b)(1)(A) of the Act authorizes the Secretary to permissively exclude an individual or entity from participation in any federal health care program under certain circumstances, to include:

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(1) Conviction relating to fraud

Any individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law—

(A)  of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct--

(i) in connection with the delivery of a health care item or service, or

(ii) with respect to any act of omission in a health care program (other than those specifically described in subsection (a)(1)) operated by or financed in whole or in part by any Federal, State, or local government agency . . . .

42 U.S.C. § 1320a-7(b)(1).  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. § 1001.201(a).  Pursuant to 42 U.S.C. § 1320a-7(c)(3)(D), the exclusion will be for a period of three years, unless the IG determines, in accordance with regulations, that a longer period is appropriate because of aggravating circumstances or a shorter period is appropriate because of mitigating circumstances.  42 C.F.R. § 1001.201(b)(2) and (3). 

On January 9, 2018, the United States unsealed the aforementioned 40-count indictment charging that Petitioner and 11 co-defendants participated in a scheme that resulted in the TRICARE⁵ program paying “more than $102 million for compounded drug prescriptions generated by CMGRX.”⁶  IG Ex. 7 at 4.  The indictment summarized the scheme, as follows: 

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The defendants and the coconspirators devised and executed a scheme to defraud TRICARE by making and receiving payments in connection with the prescription of compounded drugs to TRICARE beneficiaries.  These payments included:  (a) payments to TRICARE beneficiaries in exchange for filling prescriptions for compounded drugs; (b) payments to physicians in exchange for prescribing compounded drugs to TRICARE beneficiaries; and (c) payments to marketers in exchange for referrals of TRICARE beneficiaries and their prescriptions for compounded drugs. 

IG Ex. 7 at 9.  In its background discussion, the indictment discussed that Petitioner “wrote thousands of prescriptions for compounded drugs to TRICARE beneficiaries who he never met in person, and for whom he conducted only a cursory consultation via telephone.”  IG Ex. 7 at 5.  The indictment further reported that “TRICARE paid more than $96 million for compounded drugs prescribed by [Petitioner].”  IG Ex. 7 at 5. 

The indictment charged Petitioner with engaging in a conspiracy to commit health care fraud (Count 1) and receiving illegal kickbacks between on or about October 2014 and on or about June 2015 (Counts 31-34).  IG Ex. 7 at 8, 21.  At the conclusion of the trial of the six co-defendants, including Petitioner, the jury, on December 5, 2019, convicted one defendant of engaging in a conspiracy to commit health care fraud and for paying illegal kickbacks to TRICARE beneficiaries.  IG Ex. 8 at 1.  The jury acquitted Petitioner of the charge that he engaged in a conspiracy to commit health care fraud, and did not reach a verdict on whether he violated the federal anti-kickback law.  IG Ex. 8 at 4.  

Following the jury verdict, Petitioner filed a motion for judgment of acquittal with respect to the four counts for which the jury was unable to reach a verdict.  IG Ex. 10; see IG Ex. 8 at 4.  In her order denying the motion, the presiding judge, Chief United States District Judge Barbara M.G. Lynn, reported that Petitioner “prescribed over 16,000 prescriptions to TRICARE beneficiaries.”  IG Ex. 10 at 4.  The order further explained that “[t]here was evidence at trial, including the testimony of some of those beneficiaries, that [Petitioner] wrote prescriptions without evaluating the patients or after minimal consultations, lasting only a few minutes,” and “the evidence indicates that [Petitioner] was paid based on how many prescriptions he wrote.”  IG Ex. 10 at 4. 

On March 10, 2021, the United States filed a one-count information charging that Petitioner, “knowingly and in violation of Title 42, United States Code, Chapter 7, Subchapter XI, Part C, used and caused to be used a unique health identifier belonging to

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an individual with the initials M.B.,” in violation of 42 U.S.C. § 1320d-6(a)(1).  IG Ex. 2.  In a plea agreement filed that same day, Petitioner, with the benefit of counsel, agreed to enter a guilty plea and “to pay restitution to the Defense Health Agency in the amount of $323,555.00.”  IG Ex. 3 at 3.  An accompanying factual resume jointly executed by Petitioner and the United States stipulated that Petitioner received an email from “W.S.” on January 24, 2015 that contained unique health identifiers for “M.B.,” and the following day, Petitioner wrote two prescriptions for compounded drugs for M.B. and sent them to an office in Dallas.  IG Ex. 4 at 2.  Petitioner acknowledged that these prescriptions were used by others to commit health care fraud and violates the Anti-Kickback Statute, and this “was not known by [him] at the time.”⁷  IG Ex. 4 at 2.  

The district court imposed sentence and judgment on July 8, 2021, at which time it dismissed Counts 31-34 of the indictment and Counts 1-4 of a third superseding indictment.  The court ordered Petitioner to serve four months of incarceration and pay $323,555 in restitution to the Defense Health Agency.  IG Ex. 5 at 2, 5. 

Apart from his criminal conviction, Petitioner has been the subject of disciplinary action by medical boards in both Texas and New Mexico.  IG Ex. 6; P. Exs. 1, 4, 11.  

The Texas Medical Board initially took disciplinary action in August 2016 after it learned that Petitioner had been suspended from participating in and receiving payments from the Defense Health Agency (DHA).  IG Ex. 6 at 1.  The medical board explained that “it was alleged that [Petitioner’s] participation and/or payments for Tricare beneficiaries was suspended by . . . DHA based upon a significant number of prescriptions written by [Petitioner] for Tricare beneficiaries from outside the metropolitan area in which [Petitioner] practiced.”  IG Ex. 6 at 1.  Petitioner neither admitted nor denied the medical board’s findings that he “prescribed compounded medications to patients, including patients from out of state, without personally obtaining adequate information to justify the prescriptions.”  IG Ex. 6 at 2.  The medical board explained that the DHA had issued notice of Petitioner’s “immediate suspension for present and future claims related to a large volume of compound drug prescriptions that [he] had written to Tricare beneficiaries from outside his metropolitan area.”  IG Ex. 6 at 2. 

Although Petitioner explicitly stated that he neither admitted nor denied the medical board’s factual findings, he did not take such a posture with respect to the medical

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board’s conclusions of law.  See IG Ex. 6 at 2.  The medical board explained that pursuant to section 164.052(a)(5) of the Texas Occupations Code,⁸ it was authorized “to take disciplinary action against [Petitioner] based on [his] unprofessional or dishonorable conduct that is likely to deceive or defraud the public or injure the public, as further defined by Board Rules,” specifically, 190.8(2)(J), which involves “providing medically unnecessary services to a patient or submitting a billing statement to a patient or a third party payor that the licensee should have known was improper.”  IG Ex. 6 at 3.  The medical board, defining “improper,” explained that “the billing statement is false, fraudulent, misrepresents services provided, or otherwise does not meet professional standards and 190.9(2)(R), commission of a violation of federal or state laws whether or not there is a complaint, indictment, or conviction.”  IG Ex. 6 at 3. 

The medical board noted that, pursuant to section 164.053(a)(1) of the Texas Occupations Code, it was authorized to take disciplinary action “based on [Petitioner’s] commission of an act that violates a law of this state, that is connected with [his] practice of medicine, specifically § 199.9 of Title 32 of the Code of Federal Regulations.”  Notably, section 164.053 of the Texas Occupations Code states that “unprofessional or dishonorable conduct likely to deceive or defraud the public includes conduct in which a physician . . . commits and act that violates any state or federal law if the act is connected with the physician’s practice of medicine.”  In determining that Petitioner committed such an act that was likely to deceive or defraud the public, the medical board determined that Petitioner violated 32 C.F.R. § 199.9 (“Administrative Remedies for fraud, abuse, and conflict of interest”).⁹

At that time, the medical board imposed a public reprimand and ordered that Petitioner take and pass a Medical Jurisprudence examination, complete four continuing medical education credits in risk management, and pay a $1,000 fine.  IG Ex. 6 at 5.  In a published summary report, the medical board reported that it “found [Petitioner] prescribed compound medications to patient[s], including patients from out of state, without personally obtaining adequate information to justify the prescriptions.”  P. Ex. 3 at 1. 

In September 2018, Petitioner entered into an Agreed Order for Reprimand and Stipulation of License with the New Mexico Medical Board.  P. Ex. 4.  Petitioner

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stipulated that he engaged in “unprofessional or dishonorable conduct,” pursuant to a previous finding that he had “prescrib[ed] compounded medications to patients without personally obtaining adequate information to justify the prescriptions,” and his violation of New Mexico’s Medical Practices Act subjected him to discipline.  P. Ex. 4 at 3; see P. Ex. 3 at 1. 

In December 2021, Petitioner jointly executed a “Waiver Order” with the Texas Medical Board.  P. Ex. 13.  The medical board stated that Petitioner’s criminal conviction “is a violation of Section 164.051(a)(2)” of the Texas Occupations Code, which pertains to “a misdemeanor involving moral turpitude.”  See Texas Occ. Code § 164.051(a)(2)(B) (“The board may . . . take disciplinary action against a person if the person . . . is convicted of . . . a misdemeanor involving moral turpitude.”); see 22 Tex. Admin. Code § 190.8(v) (“Misdemeanors involving moral turpitude, within the meaning of the Act, are those which . . . involve dishonesty, fraud, deceit, misrepresentation, violence . . . or . . . reflect adversely on a licensee’s honesty, trustworthiness, or fitness to practice under the scope of the person’s license”); see also 22 Tex. Admin. Code § 190.8(iv) (“The Medical Practice Act . . . [does] not authorize disciplinary action based on conviction for a misdemeanor that does not involve moral turpitude.”). 

Petitioner submitted written direct testimony in which he claimed that he was merely prescribing medications for a clinical study, had “no idea of the cost of the medications involved,” and was “shocked to find out that the allegations that that [sic] the study was not valid.”  P. Ex. 5 at 2-3.  Petitioner reported that he “ceased any work connected with the clinical trial” in April 2015.  P. Ex. 5 at 3.  Petitioner stated that he offered “to pay back all proceeds [he] received as part of the clinical study as restitution.”  P. Ex. 5 at 3.  Despite his claim that he was “wholly disconnected from the operations of what [he] believed to be a valid clinical trial,” Petitioner has claimed that he cooperated with law enforcement and provided information that “was successfully used to detain two officers of CMG Rx . . . without bail.”  P. Ex. 5 at 4.  Likewise, and again despite his purported disconnection from the scheme, Petitioner also claimed that he “assisted prosecutors into entering a plea agreement” with another co-defendant and testified at that co-defendant’s sentencing hearing.  P. Ex. 5 at 5. 

Petitioner does not dispute that he was convicted of the criminal offense that is the subject of the exclusion notice.  Nor does Petitioner dispute that the federal district court ordered that he serve four months of incarceration and pay $323,555 in restitution to the Defense Health Agency.  P. Br. at 4.  Therefore, the issues I must address are whether the IG was authorized to impose a permissive exclusion based on Petitioner’s criminal conviction, and if so, whether the length of the exclusion is unreasonable. 

Several decades ago, Congress added new exclusion authorities, to include the permissive exclusion authority enumerated at 1128(b)(1), when it passed the Medicare and Medicaid Patient and Program Protection Act of 1987, Pub. L. No. 100-93 (1987).  A stated

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purpose of these amendments was to “protect Medicare, Medicaid . . . programs from fraud and abuse, and to protect the beneficiaries of those programs from incompetent practitioners and from inappropriate or inadequate care.”  S. REP. No. 100-109, 100th Cong., 1st Sess. 1-2 (1987), reprinted in 1987 U.S. Code Cong. & Admin. News 682.  Although an exclusion under section 1128(b)(1) is a permissive exclusion, the legislative history explains that “the bill makes it clear that, if the Secretary found that an exclusion was warranted, these authorities would have to be exercised in a manner that resulted in the exclusion of the individual or entity from all of the Medicare State health programs for which the individual or entity was otherwise eligible to participate.”  Id. at 6.  The legislative history further explained that “[t]he bill includes among the grounds for permissive exclusion convictions relating to fraud (1128(b)(1)),” and “[w]hile the Committee expects that most of these cases will result in exclusion, it wishes to give the Secretary the option to avoid exclusion if, in his judgment, exclusion would jeopardize another investigation.”  Id.  

Addressing the IG’s permissive exclusion authority under section 1128(b)(1), the DAB has held that “section 1128(b)(1) of the Act ‘does not restrict exclusions to only offenses constituting or consisting of fraud, but requires merely that the offense at issue be one ‘relating to fraud.’’’  Richard E. Bohner, DAB No. 2638 at 10 (2015), aff’d, Bohner v. Burwell, Civ. A. No. 15-4088 (E.D. Pa. Dec. 2, 2016), quoting Paul v. Goldenheim, M.D., et al., DAB No. 2268 at 10 (2009).  Thus, I need not determine that Petitioner’s conviction, itself, was for committing fraud; I need only determine that the offense was related to fraud.  The DAB has stated there should be a “common sense connection” between the underlying crime and the delivery of a health care item or service in order to meet the statutory basis for exclusion.  Erik D. DeSimone, R.Ph.,DAB No. 1932 at 5 (2004). 

The U.S. Court of Appeals for the District of Columbia, in addressing an argument that a “strict liability” misdemeanor offense cannot form a basis for exclusion under section 1128(b)(1), remarked that section 1128(b)(1) has a “broad scope” and held that it authorizes the Secretary to exclude from participation in federal health care programs “an individual convicted of a misdemeanor if the conduct underlying that conviction is factually related to fraud.”  Friedman v. Sebelius, 686 F.3d 813 at 820, 824 (D.C. Cir. 2012) (emphasis added).  Notably, the D.C. Circuit rejected the argument that an exclusion under section 1128(b) could yield an “absurd result” when “one ‘who pleads guilty of a strict liability misdemeanor offense that requires no proof of conscious wrongdoing, fraud, or falsehoods is excludable based on misconduct by others that he had no knowledge of.’”  Id. at 823.  The Court explained that, “viewed in context, however, there is no absurdity,” and “a lesser mens rea requirement, or indeed no mens rea requirement at all, is not illogical.”  Id.  The Court further explained that “although exclusion may indeed have serious consequences, we do not think excluding an individual under section 1128(b) on the basis of his conviction for a strict liability offense raises any significant concern with due process.”  Id. at 824.  The Court explicitly held

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that section 1128(b)(1)(A) “authorizes the Secretary to exclude from participation in Federal health care programs an individual convicted of a misdemeanor if the conduct underlying that conviction is factually related to fraud.”  Id. 

Petitioner was among a dozen individuals charged with engaging in a conspiracy to commit health care fraud and violating federal anti-kickback law.  IG Ex. 7.  The available evidence indicates that at least one co-defendant was convicted of engaging in a conspiracy to commit health care fraud and for violating federal anti-kickback law.  IG Ex. 8 at 1-2; see IG Ex. 7 at 1, 8, 19, 22.  The indictment reported that prior to ceasing operations “in mid-2015 shortly after TRICARE announced changes to its coverage of compounded drugs, TRICARE paid more than $102 million for compounded drug prescriptions generated by CMGRX,” with $96 million prescribed by Petitioner.  IG Ex. 7 at 4-5.  Petitioner has not disputed that he prescribed the compounded medications referenced in the indictment, and a federal district judge reported that Petitioner “prescribed over 16,000 prescriptions to Tricare beneficiaries.”  IG Ex. 10 at 4.  Petitioner acknowledged his relationship with CMGRX in his post-trial arguments for acquittal, arguing that he “referred the patients and their prescriptions to CMGRX and not to the pharmacies that filled those prescriptions.”  IG Ex. 10 at 3.  Petitioner also did not dispute that he received the payments from CMGRX, but rather, has disputed the purpose of these payments.  See IG Ex. 10 at 2.  Thus, regardless of Petitioner’s acquittal of Count 1 and the lack of a verdict for the charged violations of federal anti-kickback law, the evidence supports that Petitioner wrote thousands of prescriptions over a relatively short period of time that caused TRICARE to pay many millions of dollars in reimbursements.  A jury found the CMGRX scheme involved both a conspiracy to commit health care fraud and the payment of illegal kickbacks, and Petitioner has stipulated that he committed unprofessional or dishonorable conduct, based on a finding that he had written prescriptions “without personally obtaining adequate information to justify the prescriptions.”  P. Ex. 4 at 3; see P. Ex. 3 at 1.  Petitioner further agreed that these prescriptions were “used by other individuals to commit health care fraud and other violations of the federal Anti-Kickback Statute.”  IG Ex. 4 at 2; P. Ex. 4 at 3.  Petitioner’s conviction undoubtedly relates to fraud.  

I conclude that the IG had a basis to exclude Petitioner pursuant to section 1128(b)(1)(A)(i) of the Act.  Petitioner was convicted within the meaning of 1128(i) of the Act when the District Court accepted his guilty plea to a misdemeanor information, and Petitioner’s criminal conduct occurred well after August 21, 1996.  IG Exs. 3, 4.  Furthermore, Petitioner’s offense was in connection with the delivery of a health care item or service, as evidenced by the fact that Petitioner, in the factual basis for his guilty plea, acknowledged that his crime involved his prescribing compounded drugs.  IG Ex. 4 at 2; see P. Ex. 5 at 2 (Petitioner’s testimony that his involvement with CMGRX “was limited to what [he] love[s] to do:  practice medicine.”).

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Petitioner’s conviction clearly meets the elements set forth in section 1128(b)(1) of the Act.  Petitioner has a federal conviction for knowingly using an individual’s health identifiers by writing two prescriptions for compounded drugs, and that “the use of these identifiers was in violation of Title 42, United States Code, Chapter 7, Subchapter XI, Part C, in that the prescriptions [Petitioner] wrote . . . were used by other individuals to commit health care fraud and violations of the federal Anti-Kickback Statute.”  IG Ex. 4 at 2.  Petitioner’s criminal conviction undoubtedly relates to fraud; but for physicians prescribing compounded medications to CMGRX patients, the fraudulent scheme could not have occurred. 

Petitioner received a largely favorable outcome from the criminal justice system, in that he evaded a lengthy sentence of incarceration and accountability for the actual losses his compounded drug prescriptions caused to the TRICARE program.  Similarly, the discipline imposed by Petitioner’s medical licensing boards was relatively inconsequential.  See IG Ex. 6 at 3 (Texas Medical Board conclusion that Petitioner engaged in “unprofessional or dishonorable conduct that is likely to deceive or defraud the public or injure the public,” yet imposing minimal discipline); P. Exs. 4 at 3 (stipulation in agreed order that Petitioner engaged in “unprofessional or dishonorable conduct,” yet imposing minimal discipline); 13 at 1 (medical board determination, following Petitioner’s conviction, that he committed a misdemeanor crime of “moral turpitude,” yet imposing no new discipline other than requiring compliance with court-ordered conditions).  Petitioner, who has completed his prison sentence, is currently licensed to practice medicine.  Request for Hearing at 7; P. Br. at 1; P. Exs. 1-3.  Petitioner has been spared dire consequences for prescribing thousands of compounded drug prescriptions that resulted in approximately $96 million in losses to TRICARE, the insurer of this nation’s military members, retirees, and their families, for which he received $323,555 as compensation for his mere months of involvement.¹⁰  Inasmuch as Petitioner claims an unawareness of the fraudulent scheme based on a seemingly irrational belief that thousands of prescriptions for compounded drugs he ordered were for a clinical trial or study, such a belief appears possible only through deliberate and willful ignorance.  The massive scheme to defraud the TRICARE program would not have been possible without the involvement of willing physicians, particularly Petitioner, who prescribed staggering amounts of compounded drugs without adequate justification. The instant IG exclusion is a backstop that prevents the continued participation of an untrustworthy physician in federal health care programs, to include the TRICARE program.  See Valentine Okonkwo, DAB No. 2832 at 5 (2017) (discussing that exclusion is “a remedial measure to ‘protect federal health care programs and their beneficiaries

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from individuals who have been shown to be untrustworthy’”); Donald Burstein, Ph.D., DAB No. 1865 at 12 (2003) (“It is well-established that section 1128 exclusions are remedial in nature, rather than punitive, and are intended to protect federally-funded health care programs from untrustworthy individuals.”). The IG had a legitimate basis to exclude Petitioner pursuant to section 1128(b)(1) of the Act because the crime he committed in connection with prescribing compounded drugs was factually related to fraud.  See Friedman v. Sebelius, 686 F.3d at 824.  

6. The length of a permissive exclusion under section 1128(b)(1) is three years, unless a longer period is appropriate based on aggravating factors or a shorter period is appropriate based on mitigating factors. 
7. Pursuant to 42 C.F.R. § 1001.201(b)(2)(i), it is an aggravating factor when the acts resulting in the conviction, or similar acts, caused or reasonably could have been expected to cause, a financial loss of $50,000 or more to a government agency or program. 
8. Petitioner was ordered to pay $323,555 in restitution to the Defense Health Agency, and he has admitted that this sum is the proceeds he received from CMGRX. 
9. The IG properly applied the aggravating factor of loss to a government program. 
10. Pursuant to 42 C.F.R. § 1001.201(b)(2)(iv), it is an aggravating factor when the sentence of a court included incarceration. 
11. Petitioner was ordered to serve four months of incarceration. 
12. The IG properly applied the aggravating factor of incarceration. 
13. Petitioner has not shown the presence of any mitigating factors. 
14. Based on the IG’s application of two aggravating factors and no mitigating factors, a six-year exclusion, effective March 20, 2022, is not unreasonable. 

The period of exclusion under section 1128(b)(1) is three years, unless “the Secretary determined in accordance with published regulations that a shorter period is appropriate because of mitigating circumstances or that a longer period is appropriate because of aggravating circumstances.”  42 U.S.C. § 1320a-7(c)(3)(D); see 42 C.F.R.

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§ 1001.201(b)(2), (3).  An ALJ may consider only the aggravating and mitigating factors enumerated in 42 C.F.R. § 1001.201(b)(2) and (3). 

The IG lengthened the exclusion based on the application of two aggravating factors. First, the IG considered that the district court ordered that Petitioner pay $323,555 in restitution.  IG Ex. 5 at 5; see 42 C.F.R. § 1001.201(b)(2)(i); see P. Ex. 5 at 3 (Petitioner’s testimony stating, “I offered to pay back all proceeds I received as part of the clinical study as restitution.  I made this offer as a show of good faith— I wanted to take accountability for the mistakes I did not know I was making at the time.  I paid back all the money I received from CMS Rx.”); P. Br. at 4 (“[Petitioner] offered to pay back all proceeds he received from CMG Rx.”).  Petitioner argues that “the crime to which [he] plead [sic] guilty, a misdemeanor violation of HIPAA, does not allow the government to collect restitution,” and “[i]n an extreme show of good faith, [Petitioner] voluntarily agreed to disgorge himself of all money he received from CMG Rx.”  P. Br. at 18.  Petitioner is mistaken that he voluntarily returned the proceeds of his crime solely out of good faith; federal law requires that a court, “in imposing sentence on a person convicted of a Federal health care offense, shall order the person to forfeit property, real or person, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.”  18 U.S.C. § 982(a)(7); see IG Ex. 3 at 4-5 (plea agreement reference to the applicability of 18 U.S.C. § 982(a)(7)).  Petitioner did return the $323,555 in proceeds from his criminal activity as a voluntary gesture of good faith.  Rather, Petitioner agreed to pay restitution, and was ordered to do so, because a federal court is precluded from allowing him to keep his ill-gotten spoils from a federal health care offense.  

The district court ordered that Petitioner pay $323,555 in restitution to the Defense Health Agency.  This $323,555 loss is more than six times the threshold amount for consideration as an aggravating factor, and the IG appropriately considered the amount of loss in lengthening the exclusion.¹¹ See Edwin L. Fuentes, DAB No. 2988at 13(2020) (a loss of “about five times the threshold in itself would certainly demand an exclusion period of significantly more than five years, if not by itself the full 15-year period,” and finding that “it deserves some significant weight in extending the mandatory exclusion period given that the regulations reflect that financial losses of even one dollar over $50,000 would justify at least some extension.”). 

In arguing that the IG improperly lengthened his exclusion based on her application of the aggravating factor at 42 C.F.R. § 1001.201(b)(2)(iv), Petitioner argues that his

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sentence of incarceration was “minimal under the circumstances.”  P. Br. at 19.  Based on Petitioner’s repeated minimalization of his criminal offense, it is difficult to reconcile his claim that his sentence of incarceration was “minimal under the circumstances.”  See Request for Hearing at 7 (terming his offense “a highly technical process crime”); P. Br. at 3 (“This charge was related to a process violation in the way [Petitioner] submitted two prescriptions for patient M.B. to a pharmacy in Dallas, Texas on or around January 25, 2015.”); 24 (“Should the court nonetheless conclude that a misdemeanor process violation of HIPAA does permit exclusion . . . ”); P. Ex. 5 at 3 (“I opted to plead guilty to a misdemeanor regulatory offense.”).  Contradicting his claim that his sentence was “minimal under the circumstances,” Petitioner has also argued that he “already received severe and substantial punishment for his actions,” specifically, “4 months in prison” and $323,555 in restitution.  Request for Hearing at 8.  Regardless of whether Petitioner’s sentence was minimal or severe, the fact that he was sentenced to incarceration, in and of itself, is an aggravating factor for purposes of his exclusion, which only requires that an excluded individual be sentenced to incarceration.  42 C.F.R. § 1001.201(b)(2)(iv). 

A six-year period of exclusion, with a lengthening of the standard period of exclusion, is not unreasonable and is undoubtedly within a reasonable range.  The DAB has explained that “[c]omparisons with other cases are not controlled and of limited utility,” and that the length of an exclusion “must be evaluated based on the circumstances of a particular case.”  Robert Hadley Gross, DAB No. 2807 at 6 (2017).  Nonetheless, prior DAB decisions support that a lengthening of the exclusion by three years is not unreasonable.  See, e.g., Brenda Mills, M.D., DAB No. 2061 (2007) (lengthening a mandatory exclusion by five years based on program loss of less than $70,000 and six months of home confinement).  While Petitioner minimizes his offense as merely a process violation, it is apparent that the district court recognized the seriousness of Petitioner’s criminal conduct when it sentenced him to four months of incarceration and ordered that he pay $323,555 in restitution.  The DAB has explained that, in determining the duration of an exclusion, the IG “chose to rely on predominantly quantifiable standards, such as incarceration, the amount of the damage, the duration of the conduct, and prior records of wrongdoing,” and “go to assessing the seriousness of the past misdeeds in order to assess the nature of the future threat to programs or patients.”  Joann Fletcher Cash, DAB No. 1725 (2000).  The federal district court determined that Petitioner had prescribed 16,000 prescriptions to TRICARE beneficiaries, which is simply astounding considering that these prescriptions were ordered over a period of approximately seven months.  See IG Exs. 7 at 12; 10 at 4; P. Ex. 5 at 3.  The IG has only held Petitioner accountable for a $323,555 loss based on his proceeds from his criminal activity, rather than the losses sustained by the TRICARE program.  The sentence of four months of incarceration for a first-time offender is significant, as is the $323,555 loss that is six times more than the threshold for application as an aggravating factor.  Therefore, the IG had a legitimate basis to lengthen Petitioner’s exclusion by three years based on the application of two aggravating factors.

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Petitioner argues that the IG did not adequately consider evidence warranting mitigation of the length of his exclusion.  P. Br. at 19-23.  Petitioner has the burden of proving any mitigating factors.  See 42 C.F.R. § 1005.15(b); Andrew Louis Barnett, DAB No. 2887at 8 (2021), citing Hussein Awada, M.D., DAB No. 2788 at 3 (2017) (“Petitioner had the burden in the ALJ proceeding to prove the existence of any mitigating factor.”); see also Standing Pre-Hearing Order § 7.  Petitioner has not met this burden.  In fact, Petitioner essentially called on me to develop the evidentiary record on his behalf.  Request for Hearing at 6 (explaining there is no documentary evidence to support his claimed cooperation with law enforcement, and providing telephone contact information for the lead prosecutor whom he expected would “confirm” his claimed cooperation). 

Petitioner first argues that mitigation is warranted based on his claimed cooperation with law enforcement.  P. Br. at 20.  Petitioner acknowledged his burden to produce evidence of this mitigating factor, and cites only his own testimony in support of his claimed cooperation.  P. Br. at 20, citing P. Ex. 5 at 4-5.  Petitioner claims that he participated in a conference call with the Federal Bureau of Investigation and prosecutors on an unspecified date, and that information he provided “was successfully used to detain two officers of CMG Rx . . . without bail.”  P. Ex. 5 at 4.  Even accepting this claim as true, for purposes of this discussion, providing evidence in support of pre-trial detention is not an enumerated basis for reducing the length of an exclusion.¹²  See 42 C.F.R. § 1001.201(b)(3)(iii)(A) (requiring, as relevant here, that cooperation results in others being convicted or excluded from Medicare, Medicaid, and other federal health care programs). 

Petitioner also claims he “provided an interview to the Dallas prosecution team in February 2021,” at which time he provided information that “assisted prosecutors into entering a plea agreement with [another co-defendant].”¹³  P. Ex. 5 at 4.  Petitioner also argues that he testified for the prosecution at this co-defendant’s sentencing hearing on July 8, 2021.¹⁴  Petitioner has not provided any evidence that the information he claims to

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have provided to law enforcement “resulted in” the conviction of this co-defendant.  See 42 C.F.R. § 1001.201(b)(2)(iii)(A).  Absent such evidence of cooperation,¹⁵ Petitioner has not met his burden to show that the IG erred in not applying this mitigating factor.¹⁶ 

Petitioner argues that the IG failed to apply another mitigating factor that “[a]lternative sources of the type of health care items or services . . . are not available.”  P. Br. at 21-23.  This argument is also without merit.  Pursuant to 42 C.F.R. § 1001.201(b)(3)(iv), the IG can find a mitigating factor is present if “[a]lternative sources of the type of health care items or services furnished by the individual or entity are not available.” 

The evidence undermines the presence of a mitigating factor pursuant to 42 C.F.R. § 1001.201(b)(3)(iv), for several reasons.  Petitioner alleges that he is “a bilingual emergency room . . . physician” who is “fluent in both English and Spanish,” and argues that his exclusion “would deprive the El Paso community of an essential source of care,” which satisfies the mitigating factor that alternative sources of health care services are not available.  P. Ex. 5 at 1; P. Br. at 21; see 42 C.F.R. § 1001.201(b)(3)(iv).  However, the evidence indicates that Petitioner has not recently been employed as a bilingual emergency medicine physician in the El Paso community, but rather, was most recently employed in Jacksonville (Cherokee County), Texas.  In fact, Petitioner cited the “negative publicity stemming from his arrest” as a reason why he has not recently worked in El Paso.  Request for Hearing at 6-7.  It is simply implausible that if no other bilingual emergency physician was available to provide services in the El Paso area, Petitioner would have been forced to seek work in Cherokee County due to “negative publicity.”  See 42 C.F.R. § 1001.201(b)(3)(iv) (applicability of mitigating factor when “[a]lternative sources of the type of health care items or services . . . are not available.”).

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Furthermore, in Petitioner’s response to the IG’s November 2021 notice informing him of her intent to impose an exclusion, he reported that he “currently works in the underserved area of Cherokee County in the emergency room at UT Health East Texas in Jacksonville, Texas.”  P. Ex. 11 at 5, citing P. Ex. 11 at 33 (letter from Mark C. Shaw, MD, Medical Director of Emergency Room Services, UT Health Jacksonville).  Approximately five months later, Petitioner again explained in his April 2022 request for hearing that he had been employed as a physician in Jacksonville, Texas, prior to his incarceration and intended to return to that position upon his release from custody.  Request for Hearing at 7 (“[Petitioner] maintains hospital privileges at UT Health East Texas with full disclosure.  His intention is to return to Cherokee County and continue providing unwavering commitment as a front-line provider in the emergency room for the underserved community.”).  Again, this undermines Petitioner’s contention that alternative sources of the services he provides as a bilingual physician are not available.  

In fact, Petitioner has not stated with any specificity when he was most recently employed in the El Paso area.  A declaration “in support of Petitioner” submitted by Jose Crespo, MD, reports that he began working with Petitioner as an emergency medicine physician in 2008.  P. Ex. 15.  Dr. Crespo did not address when he most recently worked with Petitioner in El Paso.  Rather, Dr. Crespo reported that “[i]t has been [Petitioner’s] misfortune that while he currently holds active privileges at various hospitals in El Paso, he has been forced to practice medicine outside of his hometown.”  P. Ex. 15 at 2. 

Petitioner has not demonstrated that he practices medicine in El Paso.  Rather, it appears that Petitioner has chosen to claim that he practice in El Paso because a portion of the El Paso population falls within a medically underserved area.  P. Ex. 5 at 1-7; see P. Ex. 14.  I note that Petitioner’s offense conduct took place from on or about October 2014 through April 2015, and there is no indication that he provided consultations for CMGRX in the El Paso area during this timeframe.  See IG Ex. 7 at 21 (indictment citing October 2014 through June 2015 timeframe); IG Ex. 4 at 2 (reporting Petitioner sent prescriptions to a CMGRX office in Dallas); P. Ex. 5 at 3 (Petitioner’s claim that his involvement ceased in April 2015).  In fact, owing to the volume of prescriptions Petitioner wrote for compounded drugs during that timeframe, and the significant compensation he received from CMGRX, it does not appear that Petitioner simultaneously practiced as an emergency medicine provider in El Paso.  IG Ex. 10 at 4 (addressing that Petitioner prescribed over 16,000 prescriptions); see IG Ex. 6 at 2 (reporting that an August 24, 2015 letter from the Defense Health Agency informed Petitioner of his “suspension for present and future claims related to a large volume of compound drug prescriptions that [he] had written to Tricare beneficiaries from outside of his metropolitan area”).  The last reported employment in El Paso reported by Petitioner was in 2016.  P. Ex. 5 at 5 (“From 2008-2016 I assisted in developing three crucial programs at Del Sol Medical Center in El Paso . . . .”).

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Petitioner also reported that he held a volunteer position with the El Paso County Emergency Services District # 2 (ESD # 2), and he referenced his “most recent Medical Director Agreement,” which had expired in August 2020.  P. Ex. 5 at 6; see P. Ex. 5 at 14.  Petitioner also reported that EMS # 2 administered a COVID-19 vaccine program that “was contracted under [his] NPI.”  P. Ex. 5 at 6; see P. Ex. 5 at 8 (August redistribution agreement reporting a one-time transfer of 42 vials of the Pfizer-BioNTech COVID-19 vaccine from “El Paso County ESD 2” to “Dshs Phr 9/10 Hq – El Paso (Re)”).¹⁷  This evidence only supports that Petitioner held a volunteer position with ESD # 2 until August 2020, and that he requested a one-time redistribution of vials of COVID-19 vaccines the following year.  Such evidence does not support that Petitioner was employed as a physician in El Paso or that the IG failed to apply a relevant mitigating factor. 

In addition, Petitioner has not submitted evidence that alternative sources of the services he provides as an emergency medicine physician are unavailable in the Jacksonville community, where he last worked and intends to return to work.  To the extent UT Health reported a physician shortage and difficulty filling an emergency medicine position,¹⁸ it attributed this problem to physicians “being hesitant to work in our facility in lieu of the recent death of one of our ER providers who contracted COVID-19 before the vaccines became available to us.”¹⁹  P. Ex. 11 at 33.  And inasmuch as Dr. Shaw claims that Cherokee County is a medically underserved area, which even if true would not be dispositive of the question of whether alternative sources of health care are available, he does not support this claim.  P. Ex. 11 at 33.  Nor does Petitioner.  To the contrary, the IG cited evidence that Cherokee County is not a designated medically underserved area, but rather, has a shortage of health care professionals in specified fields (primary care, mental health, and dentistry), none of which Petitioner has claimed he intends to practice upon his return to his former position at UT Health.  IG Reply at 6, citing Health Resources

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and Services Administration, MUA Find, https://data.hrsa.gov/tools/shortage-area/mua-find (last visited September 1, 2022). 

Petitioner last worked professionally in Jacksonville, informed both the IG and me that he intends to return to the same position in Jacksonville, and claims he was unable to work in El Paso due to negative publicity following his arrest.  Request for Hearing at 6-7.  Petitioner cannot plausibly claim that his exclusion has resulted in the El Paso community being denied his services as bilingual emergency medicine physician.  Petitioner has not demonstrated that alternative sources of bilingual emergency medical services are not available; this mitigating factor is inapplicable.²⁰  42 C.F.R. § 1001.201(b)(3)(iv). 

Petitioner does not identify any regulatory mitigating factors that were not considered by the IG in determining the length of the exclusion.  I conclude that an exclusion for a minimum period of six years is not unreasonable. 

V.  Conclusion

For the foregoing reasons, I affirm the IG’s exclusion of Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for a period of six years, effective March 20, 2022. 

---

Endnotes

¹  I omit reference to 42 U.S.C. § 1320a-7(b)(1)(B), which was cited by the IG in her February 2022 notice, because it is irrelevant to the instant circumstances.  See IG Ex. 1 at 1 (paraphrasing entire text of 42 U.S.C. § 1320a-7(b))

²  “Reserving” the right to object is not a valid objection.  If a party believes that an evidentiary exhibit, as submitted, is inadmissible, then the party should unambiguously raise an objection.  Because an ALJ is required to exclude irrelevant and immaterial evidence, I sua sponte consider the admissibility of P. Ex. 8.  See 42 C.F.R. § 1005.17(c). 

³  The email message does not list the name of the Medicare provider or supplier that is the subject of the correspondence, nor does it list a National Provider Identifier or Provider Transaction Access Number.  Medicare enrollment matters are governed by 42 C.F.R. §§ 424.530 and 424.535, whereas the instant exclusion is governed by entirely different provisions of law, 42 U.S.C. § 1320a-7(b)(1)(A) and 42 C.F.R. § 1001.201. 

⁴  My findings of fact and conclusions of law are set forth in italics and bold font. 

⁵  TRICARE is a federal health insurance program for eligible Department of Defense beneficiaries, to include active and retired servicemembers, eligible veterans, family members of sponsoring beneficiaries, and survivors.  IG Ex. 7 at 1; see, e.g., 32 C.F.R. § 199.17.  The Defense Health Agency oversees and administers the TRICARE program.  IG Ex. 7 at 1-2. 

⁶  CMGRX is the Compound Marketing Group.  IG Ex. 7 at 3.  The indictment stated that “CMGRX’s principle [sic] marketing tool was a sham medical study, through which individuals were paid monetary compensation in exchange for obtaining compounded drugs with their TRICARE prescription benefits.”  IG Ex. 7 at 3-4.  According to the indictment, CMGRX ceased operations in mid-2015 shortly after TRICARE announced changes to its coverage of compounded drugs.  IG Ex. 7 at 4; see P. Ex. 5 at 3 (Petitioner’s report that he ceased any work connected with CMGRX in April 2015).

⁷  Although Petitioner argues that the statement that he had “no knowledge of the criminal conduct of the other defendants” was a proclamation of his “innocence,” I do not share this interpretation.  See P. Ex. 5 at 3.  The stipulation indicates nothing more than that Petitioner was unaware of the scheme on January 25, 2015.  P. Ex. 4 at 2.  Petitioner admitted that he continued to prescribe compounded drugs to TRICARE beneficiaries through April 2015.  P. Ex. 4 at 2.  

⁸  The medical board references the “Medical Practice Act,” which is Title 3 (Health Professions) of the Texas Occupations Code. 

⁹   Neither party submitted a copy of the April 24, 2015 TRICARE notice of suspension.  See IG Ex. 6 at 2.  The medical board reported that the April 24, 2015 suspension was later rescinded in August 2016 because Petitioner “was not given proper notice in the matter.”  IG Ex. 6 at 2. 

¹⁰  I note that the United States is not necessarily the only victim of fraud committed upon the TRICARE program; most TRICARE beneficiaries, with some exceptions, pay enrollment premiums and make co-payments for covered services, to include prescription drugs.  See 10 U.S.C. § 1071 et seq. 

¹¹  The IG did not address that Petitioner’s conduct resulted in a far greater loss to the TRICARE program, and therefore, I limit discussion to the $323,555 paid as restitution.  See IG Ex. 7 at 5 (reporting that Petitioner prescribed compounded drugs resulting in $96 million in losses to the TRICARE program). 

¹²  To the extent that Petitioner claims he somehow cooperated in the prosecution of a co-defendant in or about May 2015, I note that Petitioner and this co-defendant were tried together on the charge that they engaged in a conspiracy to commit health care fraud.  IG Ex. 8 at 1-2, 4. 

¹³  I reiterate Petitioner’s conflicting claims that he was “shocked to find out that the allegations that that [sic] the study was not valid” and “had no knowledge of the criminal conduct of the other defendants,” yet he was purportedly able to provide information that led to two co-defendants being held in custody pending trial and a third co-defendant being convicted of an unspecified crime.  See P. Ex. 5 at 3-4.

¹⁴  Petitioner was also sentenced on July 8, 2021.  IG Ex. 5 at 1. 

¹⁵  Petitioner was sentenced to four months of incarceration, which is a significant sentence for what he terms a “misdemeanor process violation” (P. Br. at 25), and he has not offered any evidence that purported cooperation resulted in a government motion for a downward departure from sentencing guidelines or for a reduction in his sentence based on substantial assistance.  See Request for Hearing at 6 (acknowledging “there are no public documents that describe” his claimed cooperation).

¹⁶  I note that Petitioner’s statements are largely self-serving and lack the requisite specificity to establish this mitigating factor.  Further, Petitioner’s testimony casts at least some doubt regarding his candor.  See P. Ex. 5 at 3 (testifying that he “ceased any work connected with the clinical trial” and received $323,555 in proceeds “as part of the clinical study,” even though it has been established that the fraudulent scheme was not a valid clinical trial); IG Exs. 6, 8 (conviction of co-conspirator for engaging in a conspiracy to commit health care fraud that involved “disguis[ing] . . . payments to TRICARE beneficiaries by calling them ‘grants’ for participating in a sham medical study”).  

¹⁷  This exhibit does not overtly support Petitioner’s claim that a COVID-19 vaccine program was administered under his NPI.  On its face, the vaccine redistribution agreement indicates that ESD # 2 transferred vaccine inventory to the State of Texas.  P. Ex. 5 at 10. 

¹⁸  UT Health did not report that without Petitioner, it lacked alternative sources of emergency medicine services.  Rather, it reported that when Petitioner was employed at UT Health, its physicians were able to work “normal weekly hours” instead of working “more shifts than normal.”  P. Ex. 11 at 33. 

¹⁹  I add that a hospital’s difficulty or inability to hire a physician may be unrelated to the overall availability of physicians in particular area.  Like any other employer, recruitment can be impacted by any number of other factors.   

²⁰  Dr. Crespo’s letter, which is essentially a character reference letter, does not establish any regulatory mitigating factors.  See P. Ex. 4; 42 C.F.R. § 1001.201(b)(3).  Nor does Dr. Crespo provide a specific date when Petitioner last worked in El Paso, Texas, although it appears this date could be in 2014, which is also the year Petitioner began prescribing compounded drugs for CMGRX.  P. Ex. 15 (reporting that “at [Dr. Crespo’s] request, [Petitioner] joined [Dr. Crespo] at Del Sol Medical Center in 2008,” and served “[f]or over six years as assistant medical director”); see IG Ex. 7 at 5 (reporting that in October 2014, TRICARE began paying for compounded drugs prescribed by Petitioner).