Iheoma Joann Obi-Azuike, DAB CR6218 (2023)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Iheoma Joann Obi-Azuike (Petitioner), from participation in Medicare, Medicaid, and all other federal health care programs for 13 years pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  For the reasons discussed below, I conclude that the IG has a basis to exclude Petitioner from program participation and the 13-year exclusion is not unreasonable based on the evidence provided.  The IG’s exclusion determination is affirmed. 

I.     Background and Procedural History

By letter dated March 31, 2022, the IG excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Act for a minimum period of 13 years, effective 20 days from the date of the letter.  IG Exhibit (Ex.) 1 at 1.  The IG excluded Petitioner due to her conviction of a criminal offense in the United States District Court, Southern District of Texas, Houston Division (District Court), related to the delivery of an item or service under the Medicare or a State

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health care program, including the performance of management or administrative services relating to the delivery of such items or services, under any such program.  IG Ex. 1 at 1. 

The mandatory minimum exclusion under section 1128(a) of the Act is five years.  However, in this case the IG imposed a greater period of exclusion based on the presence of three aggravating factors:       

1)  The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more entities of $50,000 or more, with approximately $719,800 in court-ordered restitution.

2)  The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more, occurring from January 2013 to November 2016.  

3)  The sentence imposed by the court included incarceration.  The court sentenced Petitioner to 12 months and 1 day of incarceration.

IG Ex. 1 at 1.  The IG identified one mitigating factor that was considered in determining the length of Petitioner’s exclusion, which was Petitioner’s cooperation with federal or state officials which resulted in others being convicted or excluded from federal healthcare programs, additional investigations, or reports being issued by law enforcement agencies pursuant to 42 C.F.R. § 1003.  IG Ex. 1 at 2. 

On April 20, 2022, Petitioner timely requested a hearing before an administrative law judge (ALJ) to contest the 13-year exclusion imposed by the IG.  On May 4, 2022, the Civil Remedies Division (CRD) issued an Acknowledgment Notice, my Standing Pre-Hearing Order, and the CRD Procedures (Civ. Remedies Div. P.). 

A pre-hearing conference was scheduled for June 2, 2022.  However, Petitioner was incarcerated on that date and was unable to appear by telephone.  As a result, the pre-hearing conference was rescheduled for July 14, 2022.  An order summarizing the pre-hearing conference was issued on July 19, 2022. 

On June 8, 2022, prior to the pre-hearing conference, CRD received Petitioner’s informal brief (P. Br).  On August 11, 2022, the IG submitted a brief (IG Br.) along with five exhibits (IG Exs. 1-5).  Petitioner filed a supplemental brief on November 8, 2022 (P. Supp. Br.).  The IG filed a reply on November 21, 2022 (IG Reply Br). 

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Decision on the Written Record

All proposed exhibits are admitted into the record without objection.  42 C.F.R. § 1005.8(c).  

Neither party offered witnesses to testify, and both parties indicated that an evidentiary hearing is unnecessary in this case.  IG Br. at 10; P. Br. at 4.  Therefore, this matter will be decided on the written record.  Standing Pre-Hearing Order ¶ ¶ 11, 16. 

II.    Issues

The issues to be decided in this case are whether there is a basis for Petitioner to be excluded from Medicare, Medicaid, and federal healthcare programs and, if so, whether the length of the exclusion that the IG has imposed is unreasonable.  42 C.F.R. § 1001.2007(a)(1). 

III.   Jurisdiction

This tribunal has jurisdiction to adjudicate this case.  42 C.F.R. §§ 1001.2007(a)(1), 1005.2; see also 42 U.S.C. § 1320a-7(f)(1). 

IV.    Findings of Fact

Petitioner served as the CEO, owner, and operator of Texas HealthSource, a home health care agency located in Houston, Texas.  IG Ex. 2 at 8.  Texas HealthSource was incorporated in October 2006, and the purpose of the business was to provide home health care services to eligible Medicare beneficiaries.  IG Ex. 2 at 8.  From approximately January 1, 2013 through November 18, 2016, Texas HealthSource submitted $719,894.09 in claims to Medicare for reimbursement for providing home health services that included skilled nursing and physical therapy services.  IG Ex. 3 at 3. 

On January 27, 2020, in the United States District Court, Southern District of Texas, Houston Division, Petitioner was charged with one count of Conspiracy to Commit Health Care Fraud.  IG Ex. 3 at 4.  The criminal information alleged that Petitioner paid Medicare beneficiary recruiters unlawful kickbacks in an attempt to solicit Medicare beneficiaries for home health care services regardless of whether the services were medically necessary.  IG Ex. 3 at 5.  The information also alleged that Petitioner paid beneficiaries to receive services and paid physicians to certify patients for home health services when the patients were not under the care of the physician or in need of home health services.  IG Ex. 3 at 5-6.  Based on the claims submitted from January 1, 2013, through November 18, 2016, Medicare paid Texas HealthSource approximately $719,894.09.  IG Ex. 3 at 3.  

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On March 5, 2020, Petitioner pleaded guilty to one count of Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349.  IG. Ex. 4 at 1.  Petitioner was sentenced to 12 months and 1 day of incarceration, two years of supervised release after incarceration, and ordered to pay $719,894.09 in restitution.  IG. Ex. 4. 

Petitioner was released from incarceration after serving five months of the imposed sentence due to good conduct and the First Step Act.  P. Supp. Br. at 1. 

V.     Legal Authorities

The Secretary of the U.S. Department of Health and Human Services shall exclude an individual from participation in Medicare, Medicaid, and all other federally funded health care programs if that individual has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or any State health care program.  42 U.S.C. § 1320a-7(a)(1).  The Act requires a minimum exclusion period of five years when the exclusion is mandated under section 1320a-7(a).  42 U.S.C. § 1320a-7(c)(3)(B).  The IG has the discretion to impose an exclusion longer than the minimum period when aggravating factors are present.  42 C.F.R. § 1001.102.  Here, the IG has imposed a 13‑year exclusion. 

In exclusion cases, the IG has the burden of proving the basis for the exclusion and the existence of any aggravating factors.  42 C.F.R. § 1005.15(c); Standing Pre-Hearing Order ¶ 6.  The standard of proof is a preponderance of the evidence, which means a fact is proven if the evidence shows that it is more likely true than not true.  42 C.F.R. §§ 1001.2007(c), 1005.15(d).  In this case, the IG must prove that Petitioner was convicted of an offense related to the delivery of a health care item or service under the Medicare program. 

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the IG had a basis for the exclusion and whether an exclusion longer than the required minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a). 

VI.    Analysis and Conclusions of Law

1. Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicare program, which subjects her to a mandatory exclusion from all federal health care programs for a minimum of five years. 

In order to prevail, the IG must prove that Petitioner was convicted of a criminal offense that was related to the delivery of a health care item.  Here, Petitioner does not dispute

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that she was “convicted” of a criminal offense within the meaning of the statute.  P. Br. at 1. 

To prove that Petitioner’s conviction was related to the delivery of a health care item or service, the IG must show that there is a nexus between the offense and the delivery of a health care item or service.  The Departmental Appeals Board (Board) has repeatedly held that the phrase “related to” within the context of section 1128(a)(1) requires only that a common‑sense nexus exist between the offense and the delivery of a health care item or service.  Summit S. Shah, M.D., DAB No. 2836 at 6 (2017) (citing cases).  In this case, Petitioner paid Medicare beneficiary recruiters unlawful kickbacks in an attempt to solicit Medicare beneficiaries for home health services, and paid beneficiaries to receive services, regardless of whether the services were medically necessary.  IG Ex. 2 at 9.  The Board has held that the “[t]he filing of a false claim or facilitating the filing of a false claim is considered related to the delivery of an item or service under the program [Medicare].”  Yolanda Hamilton, M.D., DAB No. 3061 at 11 (2022) (citing cases). 

The evidence shows that Petitioner submitted, or caused to be submitted, Medicare claims that were medically unnecessary or not eligible for payment.  IG Ex. 3 at 4-6.  Based on the evidence submitted, it is clear that Petitioner’s conviction was directly related to the delivery of a health care item or service. 

2. The IG has identified three aggravating factors that support an exclusion beyond the five-year minimum.  

Exclusions imposed under section 1128(a)(1) carry a five-year mandatory minimum exclusion period.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).  The IG may extend the five-year exclusion period based on the application of the aggravating factors listed in 42 C.F.R. § 1001.102(b).  If any of the aggravating factors set forth in 42 C.F.R. § 1001.102(b) justifies an exclusion longer than five years, mitigating factors listed at 42 C.F.R. § 1001.102(c) may be considered as a basis for reducing the period of exclusion to no less than five years.  The IG bears the burden of persuasion with respect to aggravating factors, and Petitioner bears the burden of persuasion with respect to mitigating factors.  42 C.F.R. § 1005.15(c); Standing Pre-Hearing Order ¶ 6.  In this case, the IG proposed a 13-year exclusion based on three aggravating factors which are addressed below. 

The IG identified the following three aggravating factors:  the acts resulting in the conviction, or similar acts, caused or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more; the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; and lastly, the sentence imposed by the court included incarceration.  IG Br. at 6.  Each factor is discussed below. 

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1. The District Court ordered that Petitioner pay over $719,000 in restitution due to her criminal actions.  

The sentencing judge ordered Petitioner to pay approximately $719,894.09 in restitution, more than 14 times the $50,000 threshold.  Petitioner argues that the amount of restitution constitutes the total amount billed by Texas HealthSource, not the actual amount that was received.  Req. for Hrg. at 1.  Petitioner also argues that the sentencing court did not consider the expenditures such as salaries, office expenses, and taxes in determining the amount of restitution.  Req. for Hrg. at 1. Petitioner’s arguments on how the monies received by Texas HealthSource were allocated does not negate the District Court’s determination that she owed $719,894.09 in restitution.  Additionally, in the plea agreement, Petitioner agreed that the “loss related to the conduct described in the Factual Basis of this Plea Agreement (paragraph 16) is approximately $719,000.”  IG Ex. 2 at 6. 

I construe Petitioner’s attempt to dispute the restitution amount as a collateral attack on the determination made by the District Court, which is prohibited by the regulations.  42 C.F.R. § 1001.2007(d).  Petitioner notes that she has begun paying restitution and has even made extra payments.  P. Supp. Br. at 1.   Despite Petitioner’s arguments, the IG has the legal authority to use a financial loss to a government agency or program, which may be measured by restitution, greater than $50,000 as an aggravating factor.  42 C.F.R. § 1001.102(b)(1).  The Board has held that “it is entirely reasonable to consider a program loss amount substantially larger than” the threshold program loss amount to be “an ‘exceptional aggravating factor’ to be accorded significant weight.”  Laura Leyva, DAB No. 2704 at 9-10 (2016), aff’d, Leyva v. Price, No. 8:16-CV-1986, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017).  The IG has the legal authority to consider the restitution amount as an aggravating factor.

2. The acts that resulted in Petitioner’s conviction were committed over a three-year period. 

The evidence shows, and Petitioner does not dispute, that the acts that resulted in Petitioner’s criminal conviction took place from approximately January 1, 2013, to November 18, 2016.  Petitioner willingly engaged in this scheme for well over three years, which is far beyond a short-lived lapse in judgement.  “[T]he purpose of this aggravating factor ‘is to distinguish between petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period . . . .’” Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454, at 7 (2012) (quoting Donald A. Burstein, Ph.D., DAB No. 1865,at 8 (2003)).  Therefore, the IG acted within her authority in applying the length of time as an aggravating factor. 

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3. The sentence imposed by the District Court included incarceration.

The regulations provide that incarceration may be used as an aggravating factor if imposed by the sentencing court.  42 C.F.R. § 1001.102(b)(5).  Petitioner was sentenced to 12 months and one day of incarceration. Petitioner argues that, in determining the length of her exclusion, she should receive additional consideration because she received a significantly reduced length of incarceration compared to similar cases and the sentencing judge reduced her period of incarceration based on information included in the pre-sentence investigation and her cooperation with authorities.  Req. for Hrg.; P. Br at 11.  Despite Petitioner’s argument, is important to note that even with Petitioner’s cooperation and considering the information obtained through the pre-sentence investigation, the District Court still found it appropriate to sentence Petitioner to 12 months and one day of incarceration.  Petitioner also states that she received an early release from incarceration due to good behavior and under the First Act program.  Req. for Hrg.  However, being granted early release is irrelevant to determining whether the incarceration may be used as an aggravating factor.  Additionally, the regulations do not identify early release as a mitigating factor. 

3. Based on the three aggravating factors and one mitigating factor, I find that the 13-year exclusion imposed by the IG is not unreasonable. 

The regulations provide a list of mitigating factors that may be applied to reduce an exclusion to no less than five years if aggravating factors are present.  42 C.F.R. § 1001.102(c).  The applicable regulations identify only three mitigating factors that may be considered to reduce a period of exclusion:  (1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; (2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced their culpability; and (3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c). 

Here, the IG identified Petitioner’s cooperation with federal or state officials as a mitigating factor.  IG Ex. 1 at 2.  The IG states that Petitioner provided information to government prosecutors that led to the prosecution of several people involved in home health schemes.  IG Ex. 5 at 2; IG Br. at 6-7.  The government also noted that Petitioner was immediately cooperative with officials, has always been remorseful for her actions, and that she did not make excuses for her criminal acts.  IG Ex. 5 at 2.  The IG argues that Petitioner’s cooperation was considered when determining the 13-year exclusion.  Petitioner argues that a five-year exclusion is sufficient based on the amount of information and the level of cooperation provided to officials.  Petitioner also notes that

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she received a significantly reduced sentence due to her level of cooperation.  P. Br. at 6-7. 

In determining whether the length of exclusion is unreasonable, I must determine whether the length of the exclusion falls into a “reasonable range” based on the evidence before me.  The IG has broad discretion in determining the length of an exclusion, based on the IG’s “vast experience” in implementing exclusions.  Craig Richard Wilder, DAB No. 2416 at 8 (2011) (citing 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992)).  The regulations provide that the IG’s proposed exclusion must be upheld as long as the length of exclusion is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  It is important to note that it is the quality of the aggravating (or mitigating) factors that is most important when considering the length of exclusion and not the sheer number of aggravating factors that are present in a given case.  As the Secretary stated in the preamble to the final rule establishing the exclusion regulations: 

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case.  For example, in one case many aggravating factors may exist, but the subject’s cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating. Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating. The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue.

57 Fed. Reg. at 3314-15. 

In this case, it is undisputed that, for over three years, Petitioner, along with her co-conspirators, paid unlawful kickbacks to recruit beneficiaries, submitted claims to Medicare for unnecessary services, and paid physicians to certify patients who were not under the doctor’s care.  Some of the patients were not even in need of services.  Despite Petitioner’s arguments regarding her cooperation with the government, not having a documented history of criminal activity, and the reduced length of incarceration, the intentional actions that she took to defraud healthcare programs for over $719,000 over a three-year period call into question her integrity and trustworthiness.  The IG considered the mitigating factor in determining the length of exclusion and I find no basis to assign that factor a more significant weight and therefore no basis to conclude that the 13-year period is unreasonable. 

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Petitioner references the case of Farzana Begum, M.D., DAB No 372 (2016), to support her argument that a reduction in the original length of exclusion by six years was appropriate based on the severely reduced sentence in that case.  Pet. Req. Hrg. at 7.  However, in the Begum case, the Board affirmed that the eight-year exclusion period was within a reasonable range based on the two aggravating factors identified.  Perhaps Petitioner intended to argue that an eight-year sentence was more justifiable in her own case.  However, based upon the underlying facts of Petitioner’s case, the existence of three aggravating factors and one mitigating factor, I find that the IG acted within its legal authority to extend the length of Petitioner’s exclusion.

Lastly, Petitioner argues that one crime should not be used to define an individual who can still be useful to the community and that the government should give people second chances.  Req. for Hrg. at 1.  To the extent that Petitioner seeks equitable relief on grounds that her exclusion is unfair, I have no authority to grant such relief.  Matthew J. Girardy, DMD, DAB No. 2987 at 7 (2020).  Based on the evidence submitted, I find that the 13-year exclusion imposed by the IG is not unreasonable.

VII.   Conclusion

For the foregoing reasons, I find that the IG has proven, by a preponderance of the evidence, that Petitioner was convicted of an offense that requires exclusion under section 1128(a)(1) of the Act.  I also find that a 13-year exclusion from participation in Medicare, Medicaid, and all other federal health care programs, effective April 20, 2022, is not unreasonable based on the circumstances of this case.