Kendrick Eugene Duldulao, MD, DAB CR6217 (2023)

DECISION

Petitioner, Kendrick Eugene Duldulao, MD, is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(4)), effective May 19, 2022.  Petitioner’s exclusion for the minimum period 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 seven years, for a total minimum exclusion of 12 years,¹  is not unreasonable based upon the presence of three aggravating factors and no mitigating factor. 

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I. Background

The Inspector General (IG) notified Petitioner by letter dated April 29, 2022, that he²  was excluded from participation in Medicare, Medicaid, and all federal health care programs for 12 years.  The IG cited section 1128(a)(4) of the Act as the basis for Petitioner’s exclusion based on his conviction in the United States District Court, Middle District of Florida, Tampa Division (district court), of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance as defined under federal or state law.  The IG further advised Petitioner that the mandatory five-year exclusion was extended to 12 years because Petitioner’s acts that resulted in his conviction were committed over a period of one year or more, his sentence included incarceration, and he was subject to another adverse action by a state or federal agency or board based on the same circumstances that are the basis for exclusion.  IG Exhibit (Ex.) 1. 

On June 30, 2022, Petitioner timely filed a request for hearing (RFH).  This case was docketed and assigned to me on July 6, 2022.  A prehearing conference was convened on July 19, 2022.  The substance of the conference is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated July 20, 2022 (Prehearing Order).  

The IG filed a motion for summary judgment and supporting brief (IG Br.) on September 19, 2022, with IG Exs. 1 through 7.  Petitioner filed a response in opposition to the IG motion for summary judgment (P. Br.) on November 18, 2022, with Petitioner’s exhibits (P. Exs.) A through L.³   The IG waived filing a reply brief on December 1, 2022.  No objections were made to my consideration of the offered exhibits and IG Exs. 1 through 7 and P. Exs. A through L are admitted into evidence.

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II.     Discussion

A.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights 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)(4) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual convicted of a felony criminal offense under federal or state law, that occurred after August 21, 1996, related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  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 regardless of 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 judgment of conviction is withheld.  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. § 1001.101(d). ⁴   

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for a period of no fewer than five years.  42 C.F.R. § 1001.102(a).  The Secretary has published regulations that establish aggravating factors the IG may consider to extend the period of exclusion beyond the minimum five-year period, as well as mitigating factors that may be considered only if the IG proposes to impose an exclusion longer than five years.  42 C.F.R. § 1001.102(b), (c). 

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  There may be no collateral attack of the conviction that is the basis for the exclusion.  42 C.F.R. § 1001.2007(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(c); Prehearing Order ¶ 4. 

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B.  Issues

The issues in this case are: 

Whether summary judgment is appropriate;

Whether there is a basis for exclusion; and

Whether the length of 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 followed by the pertinent findings of fact and analysis. 

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

2.  Summary judgment is appropriate. 

There is no dispute that Petitioner’s request for hearing was timely, and I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005. 

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 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, and no hearing is required where either:  there are no genuine disputes of material fact and the only questions that must be decided involve application of law to the undisputed facts; or the moving party prevails as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made.  A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party.  See, e.g., Fed. R. Civ. P. 56(c); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997) (holding in-person hearing is required where the non-movant shows there are material facts in dispute that require testimony); Thelma Walley, DAB No. 1367 (1992).

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Petitioner does not dispute that he was convicted in the district court of one count of conspiracy to distribute and dispense and cause the distribution and dispensing of controlled substances.  RFH at 1-3; P. Br. at 1-3.  Petitioner does not dispute that his Florida medical license was revoked based on his conviction.  RFH at 3; P. Br. at 7.  Petitioner does not deny that his conviction is a basis for exclusion pursuant to section 1128(a)(4) of the Act.  However, Petitioner argues that his substantive due process rights have been violated and that the period of exclusion imposed by the IG is unreasonable.  Petitioner argues that the IG improperly weighed and applied aggravating factors and failed to properly weigh and apply a mitigating factor, and for these reasons I should reassess and reduce the period of exclusion.  RFH at 3-7; P. Br. at 8-21.  Petitioner’s argument that the conspiracy of which he was convicted did not occur over one year or more does not show that there is a material fact in dispute and must be resolved against him as a matter of law.  Petitioner’s arguments that the IG incorrectly weighed aggravating factors and failed to consider a mitigating factor also do not show that there is a genuine dispute of material fact and must be resolved against Petitioner as a matter of law.  There are no genuine disputes of material fact in this case.  Petitioner’s arguments must be resolved against him as a matter of law, and the case can be resolved by applying the law to the undisputed facts.  Accordingly, summary judgment is appropriate. 

3.  There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(4) of the Act. 

a.  Undisputed Facts

On January 10, 2019, a grand jury issued a second superseding indictment charging Petitioner with one count of conspiring with another during the period June 2011 through on about October 28, 2016, to distribute and dispense and cause the distribution and dispensing of Schedule II controlled substances, specifically oxycodone, hydromorphone, morphine, methadone, and hydrocodone, and the Schedule I controlled substance alprazolam, not for a legitimate medical purpose or in the usual course of professional practice.  IG Ex. 3 at 2; P. Ex. C (DAB E-File # 19 at 19).  Petitioner was also charged with three counts of distributing and dispensing and causing the distribution of oxycodone and methadone not for a legitimate medical purpose and not in the usual course of professional practice.  IG Ex. 3 at 3-4; P. Ex. C (DAB E-File # 19 at 20-21). 

On May 23, 2019, a jury found Petitioner guilty of the count of conspiracy alleged by the second superseding indictment.  P. Ex. E (DAB E-File # 19 at 59).  On September 17, 2020, the district court imposed judgment in Petitioner’s criminal case.  The judgment shows that Petitioner was found guilty by a jury of the first count of the second superseding indictment that alleged conspiracy to distribute and dispense and cause to be distributed and dispensed oxycodone, hydrocodone, morphine, methadone, hydrocodone, and alprazolam, not for legitimate medical purpose and not in the usual course of professional practice.  Petitioner was acquitted of two counts of the superseding

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indictment and found not guilty by the jury of one count.  The judgment reflects that Petitioner was sentenced to incarceration for 12 months and one day.  The district court recommended incarceration at the federal medical center in Lexington, Kentucky due to Petitioner’s medical condition.  Petitioner was also subject to three years of supervision upon release from prison.  IG Ex. 5; P. Ex. J (DAB E-File # 19 at 211-17). 

On June 11, 2021, the Florida Board of Medicine (Florida Board) revoked Petitioner’s license to practice medicine based on his conviction in the district court.  IG Ex. 6 at 1-2, 7. 

On December 16, 2020, the Pennsylvania State Board of Medicine (Pennsylvania Board) accepted Petitioner’s consent agreement and suspended Petitioner’s Pennsylvania license to practice medicine based on Petitioner’s conviction.  P. Ex. K (DAB E-File # 19 at 222-37, 254).  On December 22, 2021, the Pennsylvania Board reinstated Petitioner to probationary status from active suspension.  P. Ex. K (DAB E-File # 19 at 219). 

b.  Analysis

Section 1128(a)(4) of the Act requires that the Secretary exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity: 

(1) convicted of a felony criminal offense under federal or state law;

(2) where the offense occurred after August 21, 1996 (the date of enactment of the Health Insurance Portability and Accountability Act of 1996); and

(3) the criminal offense is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

Petitioner does not dispute that he was convicted of a felony offense that occurred after August 21, 1996.  Petitioner admits that he “was convicted of a conspiracy to distribute and dispense and to cause the distribution and dispensing of Schedule II and IV controlled substances in violations of 21 U.S.C. §§ 846, 841(b)(1)(C), and 841(b)(2).”  P. Br. at 13.  Petitioner admits that he could have been sentenced to up to 20 years in prison making his offense a felony under 18 U.S.C. § 3559(a)(3).  P. Br. at 13.  Petitioner does not deny that there is a basis for his exclusion pursuant to section 1128(a)(4) of the Act.  P. Br.; RFH. 

I conclude that the elements of section 1128(a)(4) of the Act are satisfied by the undisputed facts, and Petitioner’s exclusion is required by the Act.

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4.  Pursuant to section 1128(c)(3)(B) of the Act, exclusion for five years is mandatory. 

I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(4) of the Act.  Therefore, Congress requires that the IG exclude Petitioner for a minimum period of five years.  Act § 1128(c)(3)(B).  The IG has no discretion to impose a lesser period and I may not reduce the period of exclusion below five years. 

5.  Three aggravating factors are present in this case that justify extending the minimum period of exclusion. 

The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional seven years, for a total period of exclusion of 12 years.  My determination of whether the exclusionary period 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. 

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

(1) Petitioner’s acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;

(2) The sentence imposed by the court included incarceration; and

(3) Petitioner was subject to an adverse action by a federal, state, or local government agency or board, and the adverse action was based on the same set of circumstances that served as the basis for the imposition of the exclusion. 

IG Ex. 1 at 1. 

Petitioner argues that his substantive due process rights have been violated and that the period of exclusion imposed by the IG is unreasonable.  Petitioner argues that the IG improperly weighed and applied aggravating factors and failed to properly weigh and apply a mitigating factor.  Petitioner asserts that the period of exclusion should be reduced.  RFH at 3-7; P. Br. at 8-21. 

I conclude based on de novo review that the aggravating factors cited by the IG exist in this case.  I further conclude that Petitioner’s arguments are without merit and must be rejected.

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a.  The acts that resulted in Petitioner’s conviction were committed over a period of one year or more.  42 C.F.R. § 1001.102(b)(2). 

Petitioner argues that summary judgment should be denied because there is a genuine issue of material fact as to whether the acts that led to Petitioner’s conviction occurred over a period of one year or more.  P. Br. at 9-11.  Petitioner makes various assertions about proceedings in the district court related to his conviction and sentencing in an attempt to show that his involvement in the criminal conspiracy did not last a year or more.  Petitioner’s efforts are meritless because his arguments are barred as matter of law. 

Pursuant to 42 C.F.R. § 1001.2007(d): 

When the exclusion is based on the existence of a criminal conviction or a civil judgment imposing liability by Federal, State or local court, a determination by another Government agency, or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction, civil judgment or determination is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in this appeal. 

Petitioner was convicted of count one of the second superseding indictment which alleged: 

Beginning on an unknown date, but not later than in or about June 2011, and continuing through on or about October 28, 2016, in the Middle District of Florida, and elsewhere, the defendants, [Petitioner and a co-conspirator], did knowingly, willfully, and intentionally conspire with each other and other persons . . . to distribute and dispense, and cause the distribution and dispensing of, . . . Schedule II controlled substances, and . . . a Schedule IV controlled substance, not for a legitimate medical purpose and not in the usual course of professional practice. 

IG Ex. 3 at 2; P. Ex. C (DAB E-File # 19 at 19).  The charge alleges that the conspiracy of which Petitioner was convicted began in or about June 2011 and continued through on or about October 28, 2016, a period of more than five years.  The verdict form Petitioner placed in evidence shows that the jury found Petitioner guilty of count one of the second superseding indictment.  P. Ex. E (DAB E-File # 19 at 59).  The jury verdict is weighty evidence that the jury found beyond a reasonable doubt that Petitioner was guilty of the

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criminal conduct alleged by count one of the second superseding indictment during the period June 2011 through October 28, 2016.  Petitioner speculates that because the verdict form did not specifically state the period of the conspiracy, the jury made no finding in that regard.  P. Br. at 2.  However, the verdict form on which “Guilty” is checked by the jury, clearly refers to count one of the second superseding indictment, which does state that the duration of the conspiracy was June 2011 through October 28, 2016.  P. Ex. E (DAB E-File # 19 at 59).  Furthermore, Petitioner’s argument is a collateral attack on his underlying conviction of count one of the superseding indictment.  Petitioner cites the verdict form encouraging second guessing of the jury verdict and the judgment and sentence entered by the district court⁵ based on that jury verdict.  Any lack of clarity in the jury instruction or the verdict should have been raised by Petitioner at his criminal trial.  The jury has been discharged and Petitioner’s case has long been closed on the docket of the district court.  P. Ex. D (DAB E-File # 19 at 29-57).  I have no authority under the regulations to review Petitioner’s conviction and he has no right to such review in this forum.  I conclude that there is no genuine dispute of material fact that Petitioner was convicted of a conspiracy that occurred from June 2011 through about October 28, 2016, a period of more than five years.  The fact was established by a jury verdict that was the basis for the judgment of conviction and sentence entered by the district court.  The fact finding in the district court is not subject to my review and is not subject to collateral attack in this forum. 

Accordingly, I conclude that the aggravating factor established by 42 C.F.R. § 1001.102(b)(2), i.e., that the criminal conspiracy of which Petitioner was convicted occurred over a period of one year or more, is established in this case.

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b.  Petitioner was sentenced to be incarcerated.  42 C.F.R. § 1001.102(b)(5). 

The IG considered the aggravating factor authorized by 42 C.F.R. § 1001.102(b)(5) that Petitioner’s sentence included incarceration. 

Petitioner does not dispute that the district court sentenced him to 12 months and one day of incarceration.  RFH; P. Br. at 13; IG Ex. 5 at 3; P. Ex. J (DAB E-File # 19 at 211). 

I conclude that the aggravating factor of incarceration is established by the evidence before me, and is, in fact, undisputed. 

Petitioner argues that the IG improperly weighed this aggravating factor by not considering that the maximum sentence that could have been imposed was 20 years in prison.  P. Br. at 13.  However, how the IG weighed any aggravating factor is not subject to my review in this case for reasons discussed hereafter. 

c.  Petitioner was subject to an adverse action by a federal, state, or local government agency or board, and the adverse action was based on the same set of circumstances that served as the basis for the imposition of the exclusion.  42 C.F.R. § 1001.102(b)(9). 

The IG considered the aggravating factor authorized by 42 C.F.R. § 1001.102(b)(9) that Petitioner was subject to an adverse action by a federal, state, or local government agency or board, and the adverse action was based on the same set of circumstances that served as the basis for imposition of the IG’s exclusion. 

Petitioner does not dispute that on June 11, 2021, the Florida Board revoked his license to practice medicine based on his conviction in the district court.  RFH at 3; P. Br. at 12; IG Ex. 6 at 1-2, 7. 

Petitioner also does not dispute that on December 16, 2020, the Pennsylvania Board accepted Petitioner’s consent agreement and suspended Petitioner’s Pennsylvania license to practice medicine based on Petitioner’s conviction.  RFH at 3; P. Br. at 12; P. Ex. K (DAB E-File # 19 at 222-37, 254). 

Therefore, both the Florida Board and Pennsylvania Board took adverse action against Petitioner’s license to practice medicine in those states.  Accordingly, I conclude that there is no genuine dispute of material fact that the aggravating factor established by 42 C.F.R. § 1001.102(b)(9) is present in this case. 

Petitioner’s argument is that the IG incorrectly weighed the factor because the IG did not consider that on December 22, 2021, the Pennsylvania Board reinstated Petitioner to

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probationary status from active suspension.  RFH at 3, 6-7; P. Br. at 12; P. Ex. K (DAB E-File # 19 at 219).  However, how the IG weighed any aggravating factor is not subject to my review in this case for reasons discussed hereafter. 

6.  Petitioner has not shown that there is any genuine dispute of material fact as to the existence of a mitigating factor that could be proved by a preponderance of the evidence. 

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an exclusion of longer than five years, then mitigating factors may be considered as a basis for reducing the period of exclusion to no fewer than five years.  42 C.F.R. § 1001.102(c).  The only authorized mitigating factors that I may consider are established by 42 C.F.R. § 1001.102(c):  

(1)  In the case of an exclusion under § 1001.101(a), whether the individual or entity was convicted of three or fewer misdemeanor offenses, and the entire amount of financial loss (both actual loss and intended loss) to Medicare or any other Federal, State or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $5,000;

(2)  The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual’s culpability; or

(3)  The individual’s or entity’s cooperation with Federal or State officials resulted in –

(i)  Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

(ii)  Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii)  The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.  

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Petitioner has the burden to prove by a preponderance of the evidence that there is a mitigating factor for me to consider.  42 C.F.R. § 1005.15(b)(1). 

Petitioner was convicted of a felony offense, not misdemeanors, therefore the mitigating factor authorized by 42 C.F.R. § 1001.102(c)(1) does not apply. 

Petitioner makes no allegation and there is no evidence that he cooperated with federal or state officials in a manner that triggered the mitigating factor established by 42 C.F.R. § 1002.102(c)(3).  RFH; P. Br.  

Petitioner urges me to find that the IG failed to consider the mitigating factor established by 42 C.F.R. § 1001.102(c)(2).  Specifically, Petitioner contends that his medical condition as a paraplegic was considered by the district court during sentencing as evidence of reduced culpability.  Petitioner argues that the district court considered his medical condition and found that it warranted a reduced sentence.  P. Br. at 6, 20-21.  Petitioner also notes that the IG’s notice did not mention that his medical condition “necessitated special placement within the United States Bureau of Prisons system.”  RFH at 6. 

The regulation is clear that for the mitigating factor authorized by 42 C.F.R. § 1001.102(c)(2) to exist, the record in the district court criminal proceedings, including sentencing documents, must show that the district court determined that Petitioner had a mental, emotional, or physical condition that reduced Petitioner’s culpability for the offense of which he was convicted. 

There is no dispute that the district court judge considered Petitioner’s physical impairment during the sentencing hearing.  The judge specifically directed an expanded discussion of Petitioner’s physical impairment in the sentencing report.  P. Ex. G (DAB E-File # 19 at 161); P. Br. at 6.  The judge also asked whether Petitioner requested placement in a federal medical center and gave Petitioner’s counsel in the criminal case time to investigate.  P. Ex. G (DAB E-File # 19 at 170-71).  The district court judge ultimately recommended confinement in the federal medical center in Lexington, Kentucky.  IG Ex. 5 at 3; P. Ex. J (DAB E-File # 19 at 213). 

However, the transcript of Petitioner’s sentencing proceedings and other records related to Petitioner’s conviction permit no inference that the district court judge considered Petitioner to be less culpable for his criminal conduct based on his physical impairments.  In fact, even a cursory reading of the sentencing proceeding transcript reveals that the judge considered Petitioner’s role in the conspiracy significant.  The judge described Petitioner’s criminal conduct as follows: 

When [Petitioner] is conspiring to distribute without a legitimate medical purpose, he’s no longer acting like a

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doctor, and in that context he is using his status as a doctor to further the conspiracy, and that is a position of trust that he enjoys and indeed enjoyed, because it’s been taken away from him for the very reason that it was used to further this conspiracy. 

P. Ex. G (DAB E-File #19 at 145-46).  Further, after sentencing Petitioner to a term of 12 months and a day, the judge explained: 

Having considered the advisory sentencing guidelines and all of the factors identified therein, the Court finds that the sentence is sufficient but not greater than necessary to comply with the statutory purposes of sentencing.  To the extent that the sentence reflects an upward variance from the guidelines, it is so to take into account the length of this conspiracy, the significance of the conduct of [Petitioner] in connection with the conduct that the jury convicted of here, and the understatement of the guidelines with respect to the nature and the offense convicted in this case. 

P. Ex. G (DAB E-File # 19 at 169-70). 

Clearly the judge did consider Petitioner’s physical impairment.  However, the district court’s consideration of Petitioner’s impairment was related to determining his most appropriate placement in the federal prison system. 

Petitioner has not shown there is a genuine dispute of material fact related to whether the district court considered Petitioner’s physical impairment as reducing his culpability.  Accordingly, I conclude that there is no triable issue of whether the mitigating factor established by 42 C.F.R. § 1001.102(c)(2) exists in this case and Petitioner’s argument is resolved against him as a matter of law. 

7.  Exclusion for 12 years is not unreasonable in this case. 

Petitioner argues that his substantive due process rights are violated by the IG in this case.  More specifically, Petitioner argues that the 12-year exclusion is unreasonable because the IG did not correctly weigh the aggravating factors.  P. Br. at 12-13.  Petitioner also argues that the IG improperly considered the aggravating factor that his criminal conduct occurred over a period of one year or more and that his period of exclusion should be reduced by at least two years for that reason.  P. Br. at 15.  Petitioner’s arguments are without merit.  Based on Board decisions discussed hereafter, my limited authority to reassess the reasonable period of exclusion is not triggered in this case.  I have no authority to review how the IG weighed aggravating factors.  I also have

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no authority to find invalid or to refuse to follow a federal statue or regulation.  42 C.F.R. § 1005.4(c)(1). 

According to the regulations an ALJ must determine whether the length of exclusion imposed is “unreasonable.”  42 C.F.R. § 1001.2007(a)(1)(ii).  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 3 (2013); Craig Richard Wilder, DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000).  The Board 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.  Pursuant to 42 C.F.R. § 1005.20(b), an ALJ is authorized to affirm, increase, or reduce the period of exclusion imposed by the IG.  However, 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.  

The Board has by its decisions narrowly defined my authority under the applicable regulation to judge the reasonableness of the period of exclusion. 

Based on my de novo review, I conclude that exclusion pursuant to section 1128(a)(4) of the Act is required.  The undisputed evidence establishes the three aggravating factors that the IG relied on to impose the 12-year exclusion.  Petitioner has shown no genuine dispute of material fact or presented evidence that triggers an inference in his favor that the IG considered an aggravating factor that did not exist or that the IG failed to consider any mitigating factor authorized by 42 C.F.R. § 1001.102(c).  Accordingly, I have no authority to reassess the period of exclusion imposed in this case.  Furthermore, a period of exclusion of 12 years is in a reasonable range and not unreasonable considering the existence of three aggravating factors and no mitigating factor.  Accordingly, I conclude that no change in the period of exclusion is permissible or appropriate.  

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Petitioner contends that the IG regulations and their application in this case deprive him of his “substantive due process rights.”  P. Br. at 17-19.  I recognize that Petitioner’s goal is to preserve these issues for further appeal as I am bound to follow the Act and regulations and have no delegated authority to rule either is invalid or unenforceable.⁶    42 C.F.R. § 1005.4(c)(1). 

III. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 12 years pursuant to section 1128(a)(4) of the Act, effective May 19, 2022. 

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Endnotes

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. 

²   The personal pronouns “he,” “him,” and “his” are used in this decision as Petitioner expressed no preference. 

³   Petitioner did not properly mark or file his exhibits in the manner required by the Civil Remedies Division Procedures, a copy of which was provided to him when his request for hearing was acknowledged.  Petitioner’s exhibit list and exhibits were uploaded as a single document to the Departmental Appeals Board’s Electronic Filing System (DAB E-File) # 19.  The uploaded document includes a document page counter.  All references to the pages of Petitioner’s exhibits are to the document page counter.  Petitioner’s exhibit list is found at pages 1 through 3 of DAB E-File # 19, and P. Exs. A through L are found at pages 4 through 262. 

⁴   References are to the 2021 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated. 

⁵  In explaining her sentencing decision, the district court judge stated: 

Having considered the advisory sentencing guidelines and all of the factors identified therein, the Court finds that the sentence is sufficient but not greater than necessary to comply with the statutory purposes of sentencing.  To the extent that the sentence reflects an upward variance from the guidelines, it is so to take into account the length of this conspiracy, the significance of the conduct of [Petitioner] in connection with the conduct that the jury convicted of here. 

P. Ex. G (DAB E-File # 19 at 169-70) (emphasis added). 

⁶  Many federal courts have rejected claims that the Secretary’s exclusion procedures amount to a deprivation of substantive due process because those courts found no constitutionally protected property or liberty interests in participation in Medicare.  Rodabaugh v. Sullivan, 943 F.2d 855 (8th Cir. 1991); Lavapies v. Bowen, 883 F.2d 465 (6th Cir. 1989); Hillman Rehab. Ctr. v. U.S. Dep’t. of Health & Human Servs., No. 98-3789 (GEB), slip op. at 16, 1999 WL 34813783, at 16 (D.N.J. May 13, 1999); Travers v. Sullivan, 801 F. Supp. 394, 404‑05 (E.D. Wash. 1992), aff’d, Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994).