Luis Ramos, DAB CR6384 (2023)

DECISION

The Inspector General (IG) of the Department of Health and Human Services excluded Petitioner, Luis Ramos, from participating in all federal health care programs for five years under 42 U.S.C. § 1320a‑7(a)(1).  Petitioner requested a hearing before an administrative law judge to dispute the exclusion.  For the reasons explained below, I conclude that the IG had a basis for excluding Petitioner for five-years.

I.    Case Background and Procedural History

In a May 31, 2023 notice, the IG stated that Petitioner was being excluded from participation in all federal health care programs under section 1128(a)(1) of the Social Security Act (42 U.S.C. § 1320a-7(a)(1)) for a period of 5 years due to Petitioner’s conviction in the United States District Court, Northern District of Illinois (District Court) of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  IG Ex. 1 at 1.

Petitioner timely filed documents that the Civil Remedies Division (CRD) interpreted as a request for a hearing to dispute an exclusion.  Electronic Filing System (E-File) Document No. 1.  On June 14, 2023, CRD acknowledged receipt of the hearing request,

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and issued my Standing Order and an Informal Brief (i.e., short-form brief) for Petitioner to complete as part of Petitioner’s prehearing exchange.

On June 23, 2023, CRD received from Petitioner in the mail a completed Informal Brief (P. Br.) along with multiple documents related to Petitioner’s criminal case before the District Court.¹  E-File Document No. 6.

On July 11, 2023, I held a prehearing conference by telephone, the substance of which is summarized in my July 18, 2023 Order Following Prehearing Conference and Setting Schedule for Prehearing Submissions (Prehearing Conference Order).  At the conference, I stated that Petitioner’s filings thus far indicated that Petitioner conceded he was convicted of a criminal offense but asserted that the criminal offense is not one that requires exclusion.  I noted that the IG imposed the minimum length of exclusion that could be imposed on Petitioner for an exclusion required under 42 U.S.C. § 1320a-7(a)(1).  Therefore, I stated that the only issue I would decide in this case is whether the IG had a factual and legal basis to impose an exclusion under 42 U.S.C. § 1320a-7(a)(1).  Prehearing Conference Order at 2.  Also at the conference, the parties agreed to a prehearing submission schedule.  Prehearing Conference Order at 3.

In conformance with the Standing Order and the Prehearing Conference Order, the IG filed a brief (IG Br.) and four exhibits.  Petitioner filed a supplement to the Informal Brief (P. Supp. Br.).  The IG filed a reply brief.

II.    Issue

Whether the IG had a basis for excluding Petitioner from participating in all federal health care programs for five years under 42 U.S.C. § 1320a-7(a)(1).

III.    Admission of Evidence and Decision on the Written Record

I admit IG Exhibits 1 through 4 into the record because Petitioner did not object to them.  See Standing Order ¶ 13; 42 C.F.R. § 1005.8(c).  I also admit the substantive documents that Petitioner submitted with the Informal Brief that were not otherwise duplicative of the IG’s exhibits.  E-File Document No. 6 at 4-31, 52.

Neither party has witnesses to testify in this case and neither believes that an in-person hearing is necessary.  IG Br. at 5; P. Supp. Br. at 2-3.  Therefore, I issue this decision based on the written record.  Standing Order ¶ 16; see also 42 C.F.R. § 1005.16(b).

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IV.    Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007, 1005.2.

V.    Findings of Fact

1. On September 26, 2019, a Superseding Indictment charging Petitioner and several other individuals was filed in the District Court.  IG Ex. 2.
2. The Superseding Indictment alleged that Petitioner was the secretary for an entity called Central Connections and was co-manager for three home health agencies.  IG Ex. 2 at 4.
3. Counts 34 and 35 of the Superseding Indictment charged Petitioner with violating 18 U.S.C. § 1957.  IG Ex. 2 at 26.
4. On January 20, 2021, Petitioner signed a Plea Agreement in which Petitioner “agree[d] to enter a voluntary plea of guilty to . . . Count Thirty-Four [of the Superseding Indictment], which charges [Petitioner] with engaging in a monetary transaction in property derived from specified unlawful activity, in violation of Title 18, United States Code, Section 1957.”  IG Ex. 3 at 2, 19.
5. In the Plea Agreement, Petitioner admitted the following facts:
   1. In or about October 2017, Petitioner commenced a managerial position with an entity called Central Connections Inc.  IG Ex. 3 at 2
   2. From October 2017 through December 2018, Petitioner, at the direction of his supervisors, facilitated the purchase of multiple home healthcare agencies.  IG Ex. 3 at 2-3.
   3. Petitioner became the sole signatory on the bank accounts for each of the home health agencies that were acquired.  Petitioner would write checks from the accounts of the home health agencies to individuals and entities designated by executives at Central Connections Inc.  IG Ex. 3 at 3.
   4. Petitioner was directed to facilitate the sale of Central Connections Inc. and the previously acquired home health care agencies; however, at the direction of one of the executives at Central Connections Inc., Petitioner remained the sole signatory on the bank accounts of the home health agencies.  IG Ex. 3 at 3.

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5. By no later than October 2018, Petitioner had observed that the bank accounts for two of the home health agencies “were receiving large payments from Medicare.”  Further, Petitioner had received information from multiple sources indicating that the large Medicare payments were the result of submissions of fraudulent claims for services that were never rendered.”  IG Ex. 3 at 3.
6. In October 2018, Petitioner was informed by a Central Connections Inc. executive that the individuals who acquired the home health agencies “were using one or more of those agencies to submit fraudulent claims to Medicare.  IG Ex. 3 at 4.
7. On or about November 2, 2018, Petitioner was instructed to purchase a cashier’s check in the amount of $2,429,648 from one of the home health agency’s accounts and mail it to the address of the new owner’s representative.  “At the time, as a result of information received from multiple sources, [Petitioner] knew that the funds used to purchase the cashier’s check consisted of the proceeds of fraudulent claims that [one of the home health agencies] had submitted to Medicare for home health services that had not been rendered.”  IG Ex. 3 at 4.
8. On or about November 1, 2018, Petitioner also purchased a cashier’s check in the amount of $1,437,675 with funds that Petitioner knew to be the proceeds of fraudulent claims that one of the home health agencies submitted to Medicare for services that had not yet been rendered.  Petitioner sent the check to the address for the new owner’s representative.  IG Ex. 3 at 5.

6. On January 31, 2023, the District Court issued a Judgement in a Criminal Case acknowledging Petitioner’s guilty plea to Count 34 of the Superseding Indictment and stating that Petitioner was adjudged guilty of violating 18 U.S.C. §§ 1957 and 1957(b)(1) (Engaging in Monetary Transactions in Property Derived from Specific Unlawful Activity.).  IG Ex. 4 at 1.
7. The District Court sentenced Petitioner to one year of probation.  IG Ex. 4 at 2.

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VI.    Conclusions of Law and Analysis

1.    Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicare program; therefore, exclusion is required under 42 U.S.C. § 1320a‑7(a)(1).

The IG must exclude an individual from participation in any federal health care program if that individual was 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.  42 U.S.C. § 1320a‑7(a)(1).  The facts in this case show that Petitioner meets this standard for exclusion.

Petitioner was convicted of a criminal offense.  For purposes of exclusion, individuals are deemed “convicted” of an offense if any of the following are met:

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

42 U.S.C. § 1320a‑7(i)(1)-(4).  In the present case, Petitioner pleaded guilty to a crime, the District Court acknowledged that plea, the District Court adjudged Petitioner guilty of the crime, and the District Court issued a judgment of conviction.  Therefore, Petitioner is considered “convicted” of a criminal offense under three of the four definitions for the term “convicted” in the statute.

Further, Petitioner’s criminal offense was “related to” the delivery of a health care item or service under the Medicare program.  For purposes of exclusion, the term “related to” simply means that there must be a nexus or common-sense connection.  See Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); see also

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Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” in another part of section 1320a-7 as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one,” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotation marks omitted).

There is no doubt that a conviction for a crime involving filing false claims with the Medicare and Medicaid programs is “related” to the delivery of an item or service under Medicare or a state health care program.  See Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994) (conviction for filing false claims with the Medicaid program is “a program‑related offense” and “such financial misconduct is exactly what Congress sought to discourage” through imposing exclusions); Kahn v. Inspector Gen. of the U.S. Dep’t of Health & Human Servs., 848 F. Supp. 432, 434, 436 (S.D.N.Y. 1994) (concluding that a podiatrist’s conviction for attempted grand larceny was program‑related for purposes of an exclusion because it was related to the filing of false Medicaid claims); Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990) (“There is no question that Mr. Greene’s crime [of filing false claims] resulted in a Medicaid overpayment and was a program-related crime triggering the mandatory exclusion under Section 1320a‑7(a).”).

Petitioner, however, argues that the federal prosecutor acknowledged that Petitioner did not commit the underlying offense of health care fraud.  P. Br. at 2 (“I never billed, never was unethical with any government program.”); see also P. Supp. Br. at 2.  Rather, Petitioner asserts that the only criminal charges against Petitioner involved money laundering.  Further, Petitioner points out the significant cooperation he provided to law enforcement.  P. Supp. Br. at 4.

Petitioner is correct that the federal prosecutor acknowledged that “[Petitioner] did not commit the underlying offense of health care fraud . . . .”  E-File Document No. 6 at 9.  It is also true that Petitioner was not indicted for the crimes directly involving Medicare fraud.  See IG Ex. 2 at 1-23.  However, the federal prosecutor also stated that, while it had taken some time for Petitioner to learn of the crimes being perpetrated by his employers, “[r]ather than alert the authorities, [Petitioner] chose to provide assistance to individuals he believed to be orchestrating a massive fraud scheme.  Given the volume of the laundered funds involved, [Petitioner’s] offense conduct is serious and militates in favor of a significant punishment.”  E-File Document No. 6 at 11.  It must be remembered that Petitioner’s criminal conduct involved laundering approximately $4 million when, “[a]t the time, as a result of information received from multiple sources, [Petitioner] knew that the funds used to purchase the cashier’s check consisted of the proceeds of fraudulent claims that [one of the home health agencies] had submitted to Medicare for home health services that had not been rendered.”  IG Ex. 3 at 4.

Based on the documents in the record, there is no reason to believe that Petitioner directly committed Medicare fraud.  However, after he came to know that his employer had

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committed millions of dollars in fraud on the Medicare program, he decided to assist in laundering fraudulently obtained Medicare Trust Fund monies.  As a result, his conduct became related to the furtherance of the Medicare fraud committed by his employer.  That is a sufficient connection or nexus to Medicare fraud to evoke a mandatory exclusion under 42 U.S.C. § 1320a-7(a)(1).

2.    Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a‑7(a)(1), Petitioner must be excluded for a minimum of five years.  42 U.S.C. § 1320a‑7(c)(3)(B); 42 C.F.R. § 1001.102(a).  Therefore, I have no authority to review or alter the length of the exclusion imposed on Petitioner.  See 42 C.F.R. § 1001.2007(a)(2).  As stated by a court of appeals:

1.    Once [the IG] found that the Utah state court’s disposition of the charge amounted to a conviction of a program-related offense, the Inspector General had no choice but to impose the mandatory 5-year exclusion under § 1320a-7(a)(1).

Travers, 20 F.3d at 998.

Finally, Petitioner states that he cooperated with law enforcement.  P. Supp. Br. at 4.  There is no doubt that Petitioner provided “substantial assistance” to the federal prosecutor.  E-File Document No. 6 at 11-12.  While it appears that Petitioner cooperated with federal law enforcement and Petitioner’s cooperation may constitute a mitigating circumstance under the regulations, (see 42 C.F.R. § 1001.102(c)(3)), a mitigating factor can only reduce the length of an exclusion that exceeds five years and cannot reduce it below the mandatory minimum five-year period.  See 42 C.F.R. § 1001.102(c).  Therefore, Petitioner must be excluded for five years despite his cooperation.

VII.     Conclusion

I affirm the IG’s determination to exclude Petitioner for five years from participating in all federal health care programs under 42 U.S.C. § 1320a‑7(a)(1).

Endnotes

¹  CRD scanned these documents into a single PDF document and uploaded it to E-File on June 30, 2023.  I cite to these documents using the PDF counter number.