Steven C. Adamczyk, DO, CR6285 (2023)

DECISION

Petitioner, Steven C. Adamczyk, DO, is a physician, licensed in the State of Michigan, who participated in a “shots-for-pills” conspiracy to defraud the Medicare program by, among other irregularities, offering opioids to patients who agreed to undergo an unnecessary and invasive medical procedure.  He and his cohorts were caught and indicted.  He pleaded guilty to one felony count of conspiracy to commit healthcare fraud.  The federal court sentenced him to 40 months imprisonment, followed by three years of supervised release, and ordered him (and his cohorts) to pay $1,237,570.97 in restitution. 

Based on his conviction, the Inspector General (IG) has excluded Petitioner for 16 years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(1) of the Social Security Act (Act). 

Petitioner appeals, challenging the length of his exclusion.  

For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 16-year exclusion falls within a reasonable range. 

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Background

In a letter dated December 30, 2022, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of 16 years because he had been convicted of a “criminal offense related to the delivery of an item or service under Medicare or a State health care program.”  The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.  IG Ex. 1.  

Petitioner timely requested review. 

Exhibits.  The IG has submitted a written brief (IG Br.) with four exhibits (IG Exs. 1-4).  Petitioner has submitted a written brief (P. Br.) with one exhibit (P. Ex. 1).  The IG filed a reply (IG Reply). 

In the absence of any objections, I admit into evidence IG Exs. 1-4 and P. Ex. 1. 

Hearing on the written record.  The parties agree that an in-person hearing is not necessary, so the case may be decided on the written record.  IG Br. at 10; P. Br. at 9. 

Discussion

1. Petitioner must be excluded from program participation for a minimum of five years because he was convicted of a criminal offense related to the delivery of an item or service under the Medicare program. Act § 1128(a)(1).¹

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services exclude from program participation an individual who has been convicted, under federal or state law, of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  See 42 C.F.R. § 1001.101(a). 

The scheme.  Petitioner Adamczyk is a Michigan physician who went to work for medical practices called Tri-County Physician Group, P.C. and Tri-State Physician Group, P.C.  IG Ex. 3 at 3.  As part of a complicated – and lucrative – scheme, he and his colleagues conspired to defraud the Medicare program.  They: 

• submitted or caused to be submitted to the Medicare program false and fraudulent claims that were based on kickbacks and bribes;

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• submitted or caused to be submitted to the Medicare program false and fraudulent claims for services that were: (i) medically unnecessary; (ii) not eligible for Medicare reimbursement; and/or (iii) not provided as represented;
• concealed their having submitted the false and fraudulent claims to Medicare and their receiving and transferring the proceeds from the fraud; and
• diverted proceeds of the fraud for their personal use and benefit.

IG Ex. 3 at 3.  

As his part of the conspiracy, Petitioner Adamczyk administered often-painful injections to patients who did not need them and did not want them.  He then billed the Medicare program for facet joint injections, knowing that his co-conspirators would benefit financially from the claims submitted to Medicare for the procedure.  IG Ex. 3 at 3-4.  But the injections were not even facet joint injections; Petitioner injected Marcaine, an anesthetic intended for diagnostic purposes only that provided limited, if any, therapeutic relief.  The practice nevertheless billed for facet joint injections because Medicare paid more for them.  P. Ex. 1 at 4.² 

Some of the practice’s patients were addicted to opioids.  Petitioner and his co-conspirators would require them to submit to the medically-unnecessary injections in return for prescription opioids and other controlled substances.  IG Ex. 2 at 12; P. Ex. 1 at 4. 

Petitioner also referred Medicare beneficiaries to specific home health agencies, laboratories, and other diagnostic providers, even though the referrals and testing ordered were medically unnecessary.  Co-conspirator Mashiyat Rashid paid Petitioner illegal kickbacks and bribes for each patient he referred for ultrasound testing.  IG Ex. 2 at 12-13; IG Ex. 3 at 4. 

The conviction.  In a superseding information, dated July 20, 2018, Petitioner was charged with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349.  IG Ex. 2. 

Petitioner entered into a plea agreement on August 8, 2018.  By its terms, he agreed to plead guilty to health care fraud.  He acknowledged his participation in the conspiracy, agreed that the U.S. Department of Health and Human Services was the victim of the conspiracy and that the full amount of restitution was $3,453,678.53.  IG Ex. 3 at 2-4, 7. 

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He also acknowledged that he would be excluded from Medicare, Medicaid, and all federal health care programs.  IG Ex. 3 at 11. 

On February 9, 2022, the United States District Court for the Eastern District of Michigan accepted Petitioner’s plea and entered judgment against him.  The court sentenced him to 40 months (3 years and 4 months) in prison, followed by three years of supervised release.  IG Ex. 4 at 1-3.  The Court ordered Petitioner to pay $1,237,570.97 in restitution to the Medicare Trust Fund c/o the Centers for Medicare and Medicaid Services (CMS), the agency that administers the Medicare program.  IG Ex. 4 at 6; see 18 U.S.C. § 3663A. 

Petitioner concedes that he was convicted of a criminal offense for which an exclusion is required.  P. Br. at 2. 

2. Based on three aggravating factors and one mitigating factor, the 16-year exclusion falls within a reasonable range.

An exclusion brought under section 1128(a)(1) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a).  I next consider whether the length of the exclusion, beyond five years, falls within a reasonable range.  See Edwin L. Fuentes, DAB No. 2988 at 8-9 (2020); Hussein Awada, DAB No. 2788 at 5-6 (2017). 

Among the factors that may serve as a basis for lengthening the period of exclusion are the three that the IG relies on in this case:  1) the acts resulting in the conviction, or similar acts, caused a government program or another entity financial losses of $50,000 or more; 2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; and 3) the sentence imposed by the court included incarceration.  42 C.F.R. § 1001.102(b).  The presence of an aggravating factor or factors, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.  “Simply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness.”  Awada, DAB No. 2788 at 10. 

The IG also found one mitigating factor – that Petitioner cooperated with federal officials. 

Petitioner acknowledges the three aggravating factors but argues that the severity of the aggravating factors offset by the mitigating factor warrant a shorter period of exclusion.  P. Br. at 3.  I disagree.  I find that the aggravating factors in this case definitively establish that Petitioner is untrustworthy and more than justify a substantial increase in the length of his exclusion well beyond the five-year minimum.  The one mitigating factor – for which the IG gave Petitioner full credit – is insufficient to justify any further reduction. 

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Program financial loss (42 C.F.R. § 1001.102(b)(1)).  The sentencing court ordered Petitioner to pay $1,237,570.97 in restitution.  IG Ex. 4 at 6.  Restitution has long been considered a reasonable measure of losses.  Awada, DAB No 2788 at 7; Farzana Begum, M.D., DAB No. 2726 at 16 n.8 (2016), aff’d Begum v. Hargan, No. 16 CV 9624, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 9 (2011). 

Financial losses of even one dollar over the $50,000 threshold justify extending the length of the period of exclusion.  Edwin L. Fuentes, DAB No. 2088 at 13 (2020).  Here, the amount was almost 25 times the threshold amount.  The Departmental Appeals Board has characterized amounts substantially greater than the statutory standard as “an exceptional aggravating factor” that is entitled to significant weight.  Shaun Thaxter, DAB No. 3053 at 31-32 (2021); Robert Kolbusz, M.D., DAB No. 2759 at 6-7 (2017); Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003).  I agree.  The massive financial losses here justify a period of exclusion considerably longer than the five-year minimum. 

Petitioner argues that he should not be accountable for the amount of the program losses because others were also responsible for them.  P. Br. at 3-4.  In fact, he suggests that he is less responsible than his co-conspirators because he came to the conspiracy late, worked only part-time, and, initially, did not even know about the illegal activities.  P. Br. at 4.  But Petitioner’s culpability is firmly established by his criminal conviction, and he may not use this forum to attack that underlying conviction.  42 C.F.R. § 1001.2007(d); Yolanda Hamilton, M.D., DAB No. 3061 at 9-10 (2022); Funmilola Mary Taiwo, DAB No. 2995 at 8 (2020); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000). 

Moreover, the regulation directs me to consider “the entire amount of the [the program’s] financial loss”; it does not allow for reductions based on others’ joint or several liability.  42 C.F.R. § 1001.102(b)(1); Laura Leyva, DAB No. 2704 at 9 (2016), aff’d Leyva v. Price, No. 8:16-CV-1986-JDW-AEP, 2017 WL 2868407 (M.D. Fla. Mar. 29, 2017), report and recommendation adopted, No. 8:16-CV-1986-T-27AEP, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017); see Burstein, DAB No. 1865 (2003) (emphasizing that section 1001.102(b)(1) focusses on financial loss to the program, not on the benefit to the petitioner.) 

As I explained in an earlier case, an exclusion is designed to protect program integrity and program beneficiaries: 

[T]he regulation recognizes [that] the amount of program losses reflects, in part, the seriousness of the individual’s crime and thus the level of threat he poses to program integrity.  While the process is inexact, so long as the IG reasonably translates the aggravating

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factor into an increase in the period of exclusion, I must affirm [the] determination.  That a corrupt practitioner and the schemes in which he participates can cause health care programs substantial losses underscores the importance of excluding the unscrupulous.  Over time, health care programs simply cannot withstand these losses. 

Brandon Michael Coburn, DAB CR5247 at 4 (2019).³ 

Petitioner also complains that the IG has imposed shorter periods of exclusion on those whose crimes cost healthcare programs far greater losses.  Specifically, Petitioner points to the ALJ decision in Roohi Ali, DPT, DAB CR5845 at 3-4 (2021), in which the petitioner was excluded for only ten years, even though her crime caused far greater losses to healthcare programs than Petitioner Adamczyk’s.  In attempting to spin off this one aggravating factor and compare it to that single factor from another IG exclusion, Petitioner illustrates the folly of case comparisons, which I discuss in more detail below. 

Roohi Ali was one of two related cases that were appealed to and decided by the Board.  Salman Ali, DPT and Roohi Ali, DPT, DAB No. 3048 (2021), aff’d Ali v. U.S. Dep’t of Health & Human Servs., No. 21-CV-12365, 2022 WL 3130227 (E.D. Mich., Aug. 4, 2022).  The Petitioners – husband and wife owners of home health agencies – were convicted of conspiracy to defraud the Medicare program.  The IG excluded them from program participation.  Finding three aggravating factors, including program financial losses, the IG excluded Salman Ali for twenty years and Roohi Ali for ten.⁴  The program financial losses were substantial ($12,089,000 and $5,771,000, respectively), far greater than the $1,237,570.97 loss in this case.  By themselves, such financial losses would have justified decades-long periods of exclusion.  See, e.g. Yolanda Hamilton, DAB No. 3061 (35-year exclusion; $9.5 million in program losses); Robert Kolbusz, M.D., DAB No. 2759 (2017) (30-year exclusion; $3,764,381.69 in program losses); Spyros N. Panos, M.D., DAB No. 2709 (2016) (25-year exclusion; $2,658,544.11 in program losses); Zahid Imran, M.D., DAB No. 2680 (2016) (48-year exclusion; $23,817,779 in program losses); Sushil Aniruddh Sheth, M.D., DAB No. 2491 (2012) (95-year exclusion reduced to 60 years; $12,376,310.47 in program losses).  But, as discussed below, the period of exclusion is tied to the circumstances of the individual case.  In the Ali case, the

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mitigating factor – cooperation with law enforcement – was “substantial and profound,” resulting in an “equally substantial and profound reduction” in Petitioners’ exclusion periods.  Ali, DAB No. 3048 at 6, 12.⁵ 

Duration of criminal conduct (42 C.F.R. § 1001.102(b)(2)).  We consider the length of Petitioner’s participation in the criminal scheme in order to distinguish the individual whose lapse in integrity is short-lived from those who display a lack of integrity over a longer period of time.  “Participation in, or even knowing but silent acquiescence in, a continuing fraudulent scheme that could be expected to cause repeated misrepresentations and repeated harm over a period of time evidences a continuing lack of integrity.”  Burstein, DAB No. 1865.  

Petitioner’s knowing and willful participation in the criminal conspiracy began in 2015 and continued through July 2017, which means that it lasted well over a year (at least 19 months and as many as 30 months).  IG Ex. 2 at 10; IG Ex. 3 at 2.  Petitioner, however, complains that the IG “failed to establish the precise duration of Petitioner’s involvement in the criminal conduct” and suggests that the IG “calculated an unjustified extension of the exclusionary period.”  P. Br. at 5.  Petitioner does not explain the logic behind his assertion, although, in support of his argument, he cites to the ALJ decision, Dennis D. Tedford, M.D., DAB CR5916 (2021).  That decision, which was not appealed, may be questionable, inasmuch as it appears to disregard the plain language of the regulation (“the acts that resulted in the conviction, or similar acts”) and considers only the specific act described in the conviction.  In any event, I am not bound by another ALJ decision.  Shaun Thaxter, DAB No. 3053 at 34 (noting that “an unreviewed individual ALJ decision” is “neither precedential nor binding on the Board or other ALJs.”).  Moreover, as the IG points out here, Petitioner’s conviction, on its face, establishes that his participation in the scheme well exceeded the one-year threshold. 

That the IG doesn’t know precisely when Petitioner’s participation began obviously does not invalidate my finding that duration is an aggravating factor.  So long as the criminal conduct lasted more than one year, the threshold for aggravation has been met.  That he participated in defrauding the Medicare program for more than a year-and-a-half shows that this was not a “short-lived” lapse and justifies further lengthening his period of exclusion.  

Incarceration (42 C.F.R. § 1001.102(b)(5)).  The court sentenced Petitioner to 40 months (3 years and 4 months) in prison, which is a substantial period of incarceration. 

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IG Ex. 4 at 2.  While any period of incarceration justifies increasing the period of exclusion, the Board has repeatedly held that longer periods of incarceration are relevant in determining whether a period of exclusion is reasonable.  Eugene Goldman, M.D. a/k/a Yevgeniy Goldman, M.D., DAB No. 2635 at 6 (2015).  Generally, the longer the jail time, the longer the exclusion, because a lengthy sentence evidences a more serious offense.  See Jeremy Robinson, DAB No. 1905 at 6 (characterizing a nine-month incarceration as “relatively substantial.”); Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855 at 12 (2002); Stacy Ann Battle, D.D.S., and Stacy Ann Battle, D.D.S., P.C., DAB No. 1843 (2002) (finding that four months in a halfway house, followed by four months home confinement justifies lengthening the period of exclusion). 

Petitioner concedes, as he must, that he was sentenced to a substantial period of incarceration but points out that, because he cooperated with law enforcement, his prison sentence was reduced.  P. Br. at 7.  I consider Petitioner’s level of cooperation separately, as a mitigating factor.  That the court considered his cooperation when it imposed his sentence does not further lessen the significance of his lengthy period of incarceration.  In fact, it has the opposite effect.  It shows how serious his crime was.  As the U.S. Attorney pointed out in opposing a non-custodial sentence, “[t]his is one of the most egregious health care fraud and opioid abuse schemes in United States history.”  P. Ex. 1 at 2.  

Not only did Petitioner alone submit $3.4 million in false billings, he “exploited some of the most vulnerable members of society in Detroit.  [Petitioner] . . . required addicted beneficiaries to receive medically unnecessary and painful . . . injections in order to obtain their opioids.”⁶  P. Ex. 1 at 2, 9 (“Just punishment is particularly important here because this offense involved not only the theft of substantial sums of money, but also the distribution of opioids to fuel patients’ addiction and the administration of injections that resulted in physical harm.”). 

One mitigating factor.  If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years.  42 C.F.R. § 1001.102(c). 

The regulations consider mitigating just three factors:  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

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had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Characterizing the mitigating factor as “in the nature of an affirmative defense,” the Board has ruled that Petitioner has the burden of proving any mitigating factor by a preponderance of the evidence.  Barry D. Garfinkel, M.D., DAB No. 1572 at 8 (1996); see 42 C.F.R. § 1005.15(b)(1), (d). 

Here, the IG found one mitigating factor:  that Petitioner cooperated with federal officials, and his cooperation provided information that was of use to the government in prosecuting several of the defendants.  P. Ex. 1 at 5.  However, his level of cooperation, though “substantial,” was not so extraordinary as to nullify significantly the compelling aggravating factors here.  As the U.S. Attorney pointed out, Petitioner was neither the first physician, nor one of the first defendants, to plead guilty.  By the time he came forward, 12 defendants, including five physicians, had already pleaded guilty; two of them did so nearly a year before Petitioner.  Moreover, Petitioner’s “cooperation unfortunately was less fruitful that it would have been if defendant had accepted responsibility earlier.”  P. Ex. 1 at 3. 

Thus, as with his sentencing, even considering Petitioner’s level of cooperation with law enforcement, which calls for some reduction, Petitioner’s egregious conduct justifies a significant period of exclusion. 

Petitioner’s unhelpful comparisons to other exclusions.  Petitioner also argues that, compared to other convicted felons, he has been treated more harshly.  In doing so, he selectively points to one aspect of a case and compares it to that aspect of his own situation, as illustrated by his effort to compare himself to one of the Ali petitioners, without considering the Alis’ extraordinary levels of cooperation that garnered them significantly shorter periods of incarceration.  

As the Board has explained, comparing exclusion periods “is not generally helpful in assessing reasonableness, due in part to the varying mix of factors and wide range of relevant circumstances that may need to be considered in individual cases.”  Edwin L. Fuentes, DAB No. 2988 at 15, citing  Karim Maghareh, Ph.D. and BestCare Laboratory Services, DAB No. 2919 at 28-29 (2018), remanded Maghareh v. Azar, Civil Action No. 4:19-CV-00238 (S.D. Tex. Apr. 8, 2020), on remand Karim Maghareh, Ph.D. and BestCare Laboratory Services, LLC, DAB CR5797 (2021); Michael D. Dinkel, DAB No. 2445 at 22 (2012) (such comparisons “are not controlling and of limited utility”), aff’d Dinkel v. Sec’y, United States Dep’t. of Health & Human Servs., No. 6:12-cv-00748 (M.D. Fla. Dec. 13, 2013). 

The Board’s criticism of the petitioner’s approach in Fuentes applies here as well. 

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Appellant’s cherry-picked list of ten-year exclusions demonstrates this general observation.  He fails to recognize that some appellants successfully showed a mitigating factor that was considered to reduce the range of exclusion periods that might otherwise have been reasonable.  He does not identify whether the appellants in the listed cases even challenged the reasonableness of the length of the exclusions imposed and, if they did, what arguments or evidence they offered relating to the factors.  In these and other ways, the facts of the cases Appellant cites as similarly situated do not actually demonstrate much comparability (and, as noted, similarities among cases are of limited utility). 

Fuentes, DAB No. 2988 at 15. 

My role here is to “review the length of an exclusion de novo to determine whether it falls within a reasonable range, given the aggravating and mitigating factors and the circumstances underlying them.”  Shaun Thaxter, DAB No. 3053 at 26 (2021), quoting Rosa Velia Serrano, DAB No. 2923 at 8 (2019) and Sushil Aniruddh Sheth, M.D., DAB No. 2491 at 5 (2012).  Such an evaluation does not rest on the specific number of aggravating or mitigating factors or any rigid formula for weighing those factors; I make a case-specific determination of the weight to be accorded each factor based on a qualitative assessment of the circumstances surrounding the relevant factors.  Yolanda Hamilton, DAB No. 3061 at 12 (2022); Thaxter at 26; Kimberly Jones, DAB No. 3033 at 7 (2021); Sheth at 5.  So long as that period falls within a reasonable range, my role is not to second-guess the IG’s judgment.  Jeremy Robinson, DAB No. 1905 at 5 (ALJ review must reflect the deference accorded to the IG by the Secretary). 

A “‘reasonable range’ refers to a range of exclusion periods that is more limited than the full range authorized by the statute [i.e. from a minimum of five years to a maximum of permanent] and that is tied to the circumstances of the individual case.”  Joseph M. Rukse, Jr. R.Ph., DAB No. 1851 at 11 (2002), citing Gary Alan Katz, R.Ph., DAB No. 1842 at 8 n.4 (2002).  The goal here is to protect federal health care programs and beneficiaries from potential harm.  Joann Fletcher Cash, DAB No. 1725 (2000). 

Petitioner’s crime was one of many that erode the financial viability of the Medicare program.  Petitioner engaged in truly egregious conduct for more than a year-and-a-half that cost the Medicare program substantial amounts of money.  His crime was serious enough to merit 40 months of incarceration, even after the court reduced his sentence based on his level of cooperation.  Petitioner has shown a lack of integrity and poses a threat to health care programs.  I therefore conclude that the 16-year exclusion falls within a reasonable range.  

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Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Joann Fletcher Cash, DAB No. 1725 at 7, citing 57 Fed. Reg. 3298, 3321 (1992). 

I find that the 16-year exclusion falls within a reasonable range.  

Endnotes

¹  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.  

²  Some patients suffered medical harm as a result of the injections.  P. Ex. 1 at 5, 6. 

³   The National Health Care Anti-fraud Association, an organization composed of both public and private health insurers and regulators, conservatively estimates that three percent of all health care spending in the United States is lost due to fraud, which is “a particular plague in the Eastern District of Michigan.”  P. Ex. 1 at 8-9. 

⁴  The other aggravating factors were the duration of the criminal conduct (also much longer than length of Petitioner’s in this case) and that the Ali petitioners were sentenced to prison (for shorter periods than Petitioner). 

⁵  In Ali, the petitioners alleged that their cooperation spanned almost eight years and that they exposed and helped convict scores of health care professionals and others.  DAB No. 3048 at 9-10.  Petitioner Adamczyk’s level of cooperation came nowhere near that “substantial and profound” level (discussed below). 

⁶  An additional aggravating factor is that “the acts that resulted in the conviction, or similar acts, had a significant adverse physical, mental, or financial impact on one or more program beneficiaries or other individuals.”  42 C.F.R. § 1001.102(b)(3).  It seems that requiring an opioid-addicted patient to submit to an unnecessary and potentially painful procedure in order to feed the patient’s addiction meets this definition.  However, the IG did not cite it as an aggravating factor.