Mrugeshkumar Shah, M.D., DAB No. 3079 (2022)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner Mrugeshkumar Shah, M.D. appeals the July 7, 2022 decision of the Administrative Law Judge (ALJ), DAB CR6114 (ALJ Decision).  The ALJ sustained a determination by the Inspector General (I.G.) to exclude Petitioner from participating in federal health care programs for fifteen years under section 1128(a)(3) of the Social Security Act (Act).  For the reasons explained below, we conclude that the ALJ Decision is supported by substantial evidence and is free of legal error.  We therefore affirm the ALJ Decision.

Legal Background

Section 1128(a) of the Act states that the Secretary of Health & Human Services “shall exclude” an individual from participation in Federal health care programs when certain conditions – specified in paragraphs (a)(1) through (a)(4) – are met.  Section 1128(a) exclusions are known as “mandatory” exclusions.  See 42 C.F.R. § 1001.101 (implementing section 1128(a)).  Section 1128(a)(3) requires the exclusion of an individual if:  (1) he has been “convicted” of a federal or state felony offense¹ “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct”; and (2) that felony offense either (a) was “in connection with the delivery of a health care item or service” or (b) was “with respect to any act or omission in a health care program (other than those specifically described in paragraph (1) [of section 1128(a)]) operated by or financed in whole or in part by any Federal, State, or local government agency.”²

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When an individual or entity has been convicted of an offense that meets the criteria in section 1128(a), the I.G. must, with exceptions irrelevant here, exclude them for a period of “not less than five years[.]”  Act § 1128(c)(3)(B); see also 42 C.F.R. §§ 1001.102(a), 1001.101(a).  The I.G. may increase the exclusion period above the statutory minimum if certain aggravating factors, described in its regulations, are present.  42 C.F.R. § 1001.102(b).  Relevant in this case, the aggravating factors include:

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;

* * *

(5) The sentence imposed by the court included incarceration;

* * *

(9) The individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.

Id.

Only if the I.G. extends the minimum period of exclusion based on the application of any of the regulatory aggravating factors may the I.G. consider any of the mitigating factors specified in section 1001.102(c) to reduce the period of exclusion to no less than the five-year mandatory minimum period.  42 C.F.R. § 1001.102(c).

An excluded individual may request a hearing before an ALJ.  Id. §§ 1001.2007(a), 1005.2(a).  The only issues before the ALJ on review are whether the I.G. had a basis for the exclusion and whether an exclusion longer than the mandatory minimum period is “unreasonable.”  Id. § 1001.2007(a).  In addressing the second issue, “the ALJ’s role is to review the length of the exclusion de novo to determine whether it falls within a reasonable range, given the aggravating and mitigating factors and the circumstances underlying them.”  Roji Esha, DAB No. 3076, at 3 (2022) (internal quotation marks omitted).

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A party dissatisfied with the ALJ’s decision may appeal to the Board.  42 C.F.R.  § 1005.21.

Case Background³

Petitioner was a pain-management doctor, practicing in Texas, who referred patients to Forest Park Medical Center (Forest Park), a physician-owned hospital.  ALJ Decision at 1, 5 (citing I.G. Ex. 2, at 1).  Petitioner participated in a bribe and kickback conspiracy where Forest Park paid remuneration to physicians, including Petitioner, in exchange for referring patients with high-reimbursing, out-of-network private insurance benefits to Forest Park, and referring patients with lower-reimbursing insurance, including Medicare and Medicaid, to other facilities.  Id. at 5 (citing I.G. Ex. 2, at 7, 10).  The scheme also rewarded physicians who referred patients with out-of-network private insurance benefits to Forest Park so that the hospital’s owners and managers could take advantage of the higher out-of-network billing rates that enabled them to collect more money.  Id. (citing I.G. Ex. 2, at 10).  The conspiracy continued from early 2008 through the end of 2012.  Id. (citing I.G. Ex. 2, at 8).

In 2019, a federal grand jury issued a 19-count second superseding indictment charging Petitioner and other participants in the scheme with conspiracy to pay and receive health care bribes and kickbacks, in violation of 18 U.S.C. § 371, and offering or paying and soliciting or receiving illegal remuneration and aiding and abetting, in violation of 42 U.S.C. § 1320a-7b(b)(2) (a provision of the federal anti-kickback statute) and 18 U.S.C. § 2.  Id. (citing I.G. Ex. 2). 

Following a jury trial in the United States District Court for the Northern District of Texas, Petitioner was found guilty on four counts of the superseding indictment, including:  one count of conspiracy to pay and receive health care bribes and kickbacks from early 2008 through the end of 2012; and three counts of receiving illegal remuneration (specifically, “bribes and kickbacks” to induce referrals to Forest Park or referrals to physicians who performed medical procedures there) on February 27, 2012, May 4, 2012, and May 31, 2012.  Id. (citing I.G. Ex. 3, at 3, 4, 6, 9; and I.G. Ex. 2 at 1-10, 12, 25, 30-31); I.G. Ex. 2, at 30-31 (setting out the “[i]llegal [r]emuneration” against Petitioner).  The district court entered judgment against Petitioner and sentenced him to forty-two months in prison, followed by one year of supervised release.  Id. at 6 (citing I.G. Ex. 4, at 1-3). 

On June 27, 2019, the Texas Medical Board held a hearing regarding Petitioner’s medical license.  I.G. Ex. 5.  The Texas Medical Board suspended Petitioner’s license based on its

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finding that Petitioner was convicted of a felony for participation in the conspiracy scheme.  ALJ Decision at 9 (citing I.G. Ex. 5).  On June 3, 2021, the Texas Medical Board notified Petitioner that, because he was convicted of the felony and was imprisoned, his medical license was revoked effective immediately.  Id. (citing I.G. Ex. 6).

On August 31, 2021, the I.G. notified Petitioner that he was being excluded from federal health care programs for fifteen years pursuant to section 1128(a)(3) of the Act.  Id. at 2 (citing I.G. Ex. 1).  The I.G. stated in its exclusion notice that Petitioner was subject to a minimum five-year exclusion (pursuant to section 1128(c)(3)(B) of the Act) but that he was being excluded for ten additional years because of three aggravating factors, which the notice specified as follows:

1. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.  The acts occurred from in or around early 2008 to about the of 2012.

2. The sentence imposed by the court included incarceration.  The court sentenced you to 42 months of incarceration.

3. The individual or entity has been the subject of any other adverse action by any Federal, State or local government agency or board if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.  The Texas Medical Board accepted the voluntary revocation of your license.

I.G. Ex. 1, at 1⁴; see 42 C.F.R. § 1001.102(b)(2), (5), (9).

ALJ Proceedings and Decision

Petitioner filed a timely request for hearing to challenge the exclusion.  ALJ Decision at 1, 2. 

Petitioner submitted eight exhibits (P. Exhibits 1-8), which included briefs filed with the U.S. Court of Appeals for the Fifth Circuit in support of the appeal of his conviction (P. Exs. 2, 3) and the presentence investigation report filed with the district court (P. Ex. 6).⁵ 

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Id. at 2-3.  The I.G. objected to Petitioner’s Exhibits 1 through 6, asserting they were irrelevant or immaterial to the issues before the ALJ, and, as to Petitioner’s Exhibits 1, 2, 3, and 6, that they were offered to collaterally attack the conviction.  Id. at 2-3; I.G.’s Reply Br. to ALJ at 3-5.  Overruling the I.G.’s objections in part, the ALJ admitted Petitioner’s Exhibits 1, 4, 5, and 6, as relevant or “potentially relevant.”  ALJ Decision at 2-3.⁶  The ALJ admitted all six exhibits (I.G. Exhibits 1-6) offered by the I.G., none of which Petitioner objected to.  Id. at 2.

Petitioner requested an in-person hearing.  Id. at 4.  The ALJ determined that an in-person hearing was not necessary because Petitioner did not submit written direct testimony for any of his proposed witnesses as directed by the Scheduling Order and did not elsewhere show that the witnesses intended to give relevant testimony, and because the I.G. – who did not propose to call any witnesses – did not ask to cross-examine any of Petitioner’s witnesses.  Id. at 3-4.  The ALJ therefore proceeded to decision based on the written record.  Id. at 4.

The ALJ determined that the I.G. had a basis to exclude Petitioner under section 1128(a)(3) of the Act because Petitioner was convicted of a criminal offense related to fraud, breach of fiduciary duty, and financial misconduct directly related to the delivery of health care services.  Id. at 4-6.  Accordingly, the ALJ concluded that the I.G. was required to exclude Petitioner for a minimum of five years.  Id.

The ALJ further found that the following three aggravating factors were present and supported an extension of the minimum exclusion period:  the commission of acts resulting in conviction, or similar acts, over a period of one year or more (section 1001.102(b)(2)); imposition of a forty-two-month prison term (section 1001.102(b)(5)), which the ALJ called “substantial”; and “other adverse action” by a governmental body (namely, medical license revocation) based on the circumstances that served as the basis for the exclusion (section 1001.102(b)(9)).  Id. at 6-9. 

In addressing whether the duration of the criminal acts could be considered aggravating under section 1001.102(b)(2), Petitioner urged the ALJ to ignore the conspiracy

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conviction (Count 1 of the indictment) and consider only the three instances for which he was convicted of receiving bribes or kickbacks:  (1) Count 2:  receiving $3,000 on February 27, 2012; (2) Count 4:  receiving $1,000 on May 4, 2012; and (3) Count 7:  receiving $1,000 on May 31, 2012.  ALJ Decision at 7 (citing Petitioner’s Brief to ALJ (P. Br. to ALJ) at 4; and I.G. Ex. 2, at 30, 31).  The ALJ rejected that proposition, finding that she was “not limited to the acts that resulted in the conviction” and could consider “similar acts” under 42 C.F.R. § 1001.102(b)(2).  Id. at 8.  The ALJ further found that Petitioner’s “own evidence” – namely, the presentence investigation report – “confirms that Petitioner . . . was actively involved in the conspiracy from at least November 2010 through May 2012.”  Id.  The ALJ quoted findings in the presentence investigation report that Petitioner’s procedures at Forest Park resulted in $432,447.11 in insurance payments to Forest Park from November 2010 through May 2012, and that “[d]uring this timeframe, [Petitioner] collected $67,000 in bribes and kickbacks from [Forest Park] for performing these procedures in the facility.”  Id. (quoting P. Ex. 6, at 24 (emphasis in original)).  In short, the ALJ determined that Petitioner “actively engaged” in criminal activities for at least 18 months and, “likely, longer,” exceeding the “one-year threshold for aggravation[.]”  Id.

The ALJ found no mitigating factors that offset the “significant aggravating factors present in this case.”  Id. at 9.  The ALJ then considered whether the fifteen-year exclusion “falls within a reasonable range” based on the established aggravating factors.  Id. at 9-10.  The ALJ addressed this issue as follows:

The underlying facts here more than justify a 15-year exclusion.  In order to enrich himself, Petitioner deceived and betrayed his patients, driving up medical costs for them and their insurers.  His illegal activity lasted at least 18 months.  The [district court] sentenced him to substantial prison time and his medical license was revoked.  He has shown a continuing lack of integrity and poses a threat to health care programs.  I therefore conclude that the 15-year exclusion falls within a reasonable range.

Id. at 10. 

Petitioner informed the ALJ that an appeal of the conviction remains pending in the U.S. Court of Appeals for the Fifth Circuit, and that the period of incarceration could be reduced or eliminated by the appeals court.  P. Br. to ALJ at 9-10; ALJ Decision at 9.  Petitioner also suggested that the appeal’s outcome could undermine the finding as to the duration of the criminal conduct.  ALJ Decision at 7 n.3.  The ALJ found these points irrelevant because section 1128(i)(1) of the Act “explicitly provides that Petitioner has been convicted, and is therefore subject to exclusion, ‘regardless of whether there is an appeal pending.’”  Id. (quoting Act § 1128(i)(1)), 9.

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Based on the foregoing findings and analysis, the ALJ concluded that the I.G. had properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs for fifteen years.  Id. at 10.  Petitioner timely requested review of the ALJ Decision by the Board. 

Standard of Review

The Board reviews a disputed issue of fact as to whether the ALJ’s decision “is supported by substantial evidence on the whole record.”  42 C.F.R. § 1005.21(h).  The Board reviews a disputed issue of law as to whether the ALJ’s decision “is erroneous.”  Id.  The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

Analysis

On appeal, Petitioner does not dispute the ALJ’s conclusions that the I.G. had a basis to exclude him under section 1128(a)(3) for a minimum of five years and that no mitigating factors were present.  Petitioner’s Brief (P. Br.) at 1-3.  Nor does Petitioner specifically dispute the ALJ’s finding that the aggravating factors in 42 C.F.R. § 1001.102(b)(5) and (9) were established.  Petitioner does, however, argue that the ALJ lacked substantial evidence to conclude that the duration of criminal conduct satisfied the one-year threshold to be considered aggravating under 42 C.F.R. § 1001.102(b)(2).  P. Br. at 1-2.  Petitioner further argues that the fifteen-year exclusion is excessive compared to exclusions imposed in other cases and that the ALJ erred in not addressing that argument.  Id. at 1.  In addition, Petitioner asserts that because he has appealed his conviction to the U.S. Court of Appeals for the Fifth Circuit, the period of incarceration may change pending the outcome of the appeal and thus the ALJ should have considered that possibility in deciding whether to sustain the exclusion.  Id. at 3.  For the reasons explained below, we reject Petitioner’s arguments and affirm the ALJ’s conclusion that a fifteen-year exclusion “falls within a reasonable range” based on the existence of three aggravating factors (and no mitigating factors). 

A.  The aggravating factor in 42 C.F.R. § 1001.102(b)(2) was established by substantial evidence and weighs in favor of extending the mandatory minimum period of exclusion.

The ALJ concluded that the I.G. established the aggravating factor in 42 C.F.R. § 1001.102(b)(2).  See ALJ Decision at 8 (stating that the evidence “firmly establishes that Petitioner actively engaged in his criminal activities for at least 18 months,” which is “over the one-year threshold for aggravation and justifies a period of exclusion that is longer than the minimum”).  The ALJ did so based on evidence that Petitioner’s association with the bribe and kickback scheme lasted for over a year.  Id. (“The

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sentencing report confirms that Petitioner . . . was actively involved in the conspiracy from at least November 2010 through May 2012; during that period, he was responsible for $432,447.11 in underlying claims collected from various insurers.” (citing P. Ex. 6, at 22, 23)).

Petitioner argues that the ALJ lacked substantial evidence to conclude that the conduct exceeded a period of one year or more.  P. Br. at 1-2.  Petitioner claims that the ALJ “relies upon a ‘similar act’ to those charged in [his] indictment to extend the period of time [he] was involved in a conspiracy from the brief, non-aggravating time period alleged in the indictment.”  Id. at 2.  He asserts that he “could not possibly have been found to be engaged in a criminal conspiracy for the interval of time recited in the pre-sentence investigation report and relied upon by the ALJ; at least not based on the outcome of his trial and sentencing.”  Id.  

To the extent that Petitioner argues that the ALJ erred in considering “similar acts,” we reject that argument.  As the ALJ noted, section 1001.102(b)(2) directs an ALJ to consider “the acts resulting in the conviction, or similar acts” that did not result in conviction, in assessing whether the duration of Petitioner’s criminal activity is an aggravating factor.  See 42 C.F.R. § 1001.102(b)(2) (emphasis added); ALJ Decision at 7, 8. 

Moreover, we find no error in the ALJ’s determination that the acts resulting in Petitioner’s conviction, or similar acts, were committed over a period of at least eighteen months.  See ALJ Decision at 8.  The presentence investigation report states that Petitioner was paid $500 a month plus other incentives to refer patients to Forest Park.  P. Ex. 6, at 20.  As the ALJ noted, the report confirms that Petitioner was “actively involved” in the conspiracy from at least November 2010 through May 2012, an eighteen-month period in which he collected “$67,000 in bribes and kickbacks” from Forest Park.  ALJ Decision at 8 (quoting P. Ex. 6, at 24 (emphasis in original)). Therefore, the ALJ’s determination that Petitioner “actively engaged” in criminal activities for at least eighteen months was based on substantial evidence in the record.  See P. Exs. 1, 6. 

Petitioner asserts that the district court “explicitly overrul[ed] the duration of misconduct conclusion in the pre-sentence investigation report” when it entered the restitution order for $40,339.37.  P. Br. at 2 (citing the district court’s judgment of conviction).  However, the evidence that Petitioner cites to does not the support the claim that the court overruled the findings in the presentence investigation report.  In the judgment of conviction, the district court ordered Petitioner to serve a forty-two-month sentence of incarceration for participation in a conspiracy to pay and receive kickbacks through January 1, 2013 and for receipt of bribes or kickbacks on three instances in 2012.  I.G. Ex. 4, at 1, 6.  In that judgment, the court also ordered Petitioner to pay restitution of $40,339.37 to two insurance companies.  Id. at 9.  However, Petitioner does not explain how the restitution

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order constitutes a rejection of the presentence investigation report’s finding regarding the duration of Petitioner’s illegal conduct.  Furthermore, Petitioner overlooks the district court’s order requiring Petitioner to forfeit $67,850 as “proceeds derived from or property involved in the offense.”  I.G. Ex. 4, at 6, 9.  It appears from that order that the district court accepted the presentence investigation report’s finding about the duration of Petitioner’s illegal conduct because the forfeiture amount is roughly equal to the amount of bribes and kickbacks that the presentence investigation report indicates Petitioner collected from November 2010 through May 2012.  See P. Ex. 6, at 24 ¶ 105 (stating that Petitioner collected $67,000 in bribes and kickbacks from Forest Park during the eighteen-month period).

Petitioner further argues that if the Board affirms the “ALJ’s eighteen month misconduct finding, that [finding] [will] not support a decision affirming the fifteen year exclusion” because the I.G. determined the exclusion’s length “based on a harsher, unsupported five-year long presumptive term of misconduct.”  P. Br. at 2.  According to Petitioner, the I.G. “applies a gradient to set the length of exclusion, with longer periods of misconduct punished more harshly than shorter intervals.”  Id.  Petitioner asserts that the I.G. “punishes lengthier prison sentences and lengthier intervals of misconduct with longer exclusion terms.” ⁷  Id. (citing Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D., DAB No. 2635 (2015)).  Therefore, Petitioner asserts that “the decision to [affirm] the same [fifteen-year] sanction is irrational and contrary to the [I.G.’s] graded approach to exclusion” because “the length of misconduct used to calculate the exclusion term is different from the length of conduct found by the ALJ.”  Id. at 2-3.

We disagree.  To begin with, the ALJ did not affirm Petitioner’s fifteen-year exclusion based solely on the aggravating factor in section 1001.102(b)(2).  Instead, the ALJ sustained the exclusion based on the existence of three aggravating factors (and the absence of any mitigating factor), each one of which the ALJ found to be significant.  ALJ Decision at 6-10.  In analyzing the duration of an exclusion period longer than the five-year statutory minimum, the ALJ’s role is to evaluate whether the exclusion “falls within a reasonable range, given the aggravating and mitigating factors and the circumstances underlying them.”  Rosa Velia Serrano, DAB No. 2923, at 8 (2019) (internal quotation marks omitted); Edwin L. Fuentes, DAB No. 2988, at 8 (2020) (quoting Serrano); see also Craig Richard Wilder, M.D., DAB No. 2416, at 8 (2011) (“[T]he ALJ’s role is limited to considering whether the period of exclusion imposed by the I.G. was within a reasonable range, based on demonstrated criteria.”).  Such an evaluation “does not rest on the specific number of aggravating or mitigating factors or any rigid formula for weighing those factors, but rather on a case-specific determination

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of the weight to be accorded each factor based on a qualitative assessment of the circumstances surrounding the factors in that case.”  Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 5 (2012).  “The I.G. has broad discretion in setting the length of an exclusion in a particular case, based on [the I.G.’s] vast experience implementing exclusions.”  Id. (internal quotations and citations omitted).  “An ALJ may not substitute his or her judgment for that of the I.G. or determine a ‘better’ exclusion period.”  Id. (citation omitted).  In this case, the ALJ, in accordance with Board precedent, evaluated the reasonableness of Petitioner’s fifteen-year exclusion by weighing the three aggravating factors identified by the I.G. and the surrounding circumstances as support for the decision to lengthen Petitioner’s exclusion beyond the mandatory minimum.  ALJ Decision at 6-10. 

With respect to the aggravating factor in section 1001.102(b)(2), the ALJ found that the length of criminal conduct, lasting more than a year, provides support, along with the other two aggravating factors, for the fifteen-year length of exclusion.  Id. at 7-8, 10.  We agree with the ALJ’s conclusion.  Regardless of whether Petitioner’s criminal conduct spanned five years or at least eighteen months, there is no dispute that Petitioner’s unlawful conduct occurred over a period substantially exceeding one year and this more than satisfied the aggravating factor and supports the significant weight given to it.  The Board has held that an ALJ may “reasonably assign significant weight” to illegal conduct that occurred for even slightly longer than the one-year threshold, noting that “simply meeting the threshold . . . is a clear indication of untrustworthiness.”  Hussein Awada, M.D., DAB No. 2788, at 8-10 (2017) (upholding a twenty-three-year exclusion based, in part, on illegal conduct spanning fourteen months); see also Angelo D. Calabrese, M.D., DAB No. 2744, at 4 n.4 (2016) (holding that an inaccurate statement by the ALJ that the I.G. had found the excluded individual’s acts to have occurred over a six-year period “has no effect on [the Board’s] decision” because the “period stated by the I.G. in its notice [of exclusion] is more than double the length of time required to support the aggravating factor”).  The Board has also held that an ALJ is not obligated to reduce an exclusion period imposed by the I.G. based on multiple aggravating factors merely because the circumstances found by the ALJ with respect to one of the factors differ from the circumstances found by the I.G., so long as the circumstances found by the ALJ regarding the factor are – as they are in this case – “sufficient to add significantly to the additional exclusion period called for by the other proven aggravating factors.”  Fuentes at 13-14. 

The aggravating factor in section 1001.102(b)(2) “reflects the Secretary’s recognition that an individual whose lapse in integrity occurs over a period of one or more years poses a far greater threat to federal health care programs and beneficiaries than an individual ‘whose lapse in integrity is short-lived.’”  Awada at 8 (citing Donald A. Burstein, Ph.D., DAB No. 1865, at 8 (2003)).  Even considering the eighteen-month period rather than the five-year period, the substantial evidence in the record demonstrates that Petitioner’s participation in the bribe and kickback scheme was not a brief, minor lapse in judgment. 

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The ALJ found that Petitioner was “actively involved in the conspiracy from at least November 2010 through May 2012,” during which “he was responsible for $432,447.11 in underlying claims collected from various insurers.”  ALJ Decision at 8 (citing P. Ex. 6, at 22-23) (emphasis added).  In addition, the ALJ did not state that Petitioner’s conduct was limited to only eighteen months as Petitioner suggests; rather, the ALJ found that the evidence “firmly establishe[d]” that Petitioner actively engaged in criminal activities for “at least 18 months . . . and, likely, longer.”  Id. at 8. 

It is evident that the ALJ found the duration of Petitioner’s crimes to be significant, noting “[h]is illegal activity lasted at least 18 months,” in assessing the reasonableness of the extended exclusion period.  See id. at 10.  The ALJ also noted that Petitioner “has shown a continuing lack of integrity and poses a threat to health care programs” and, “[i]n order to enrich himself, Petitioner deceived and betrayed his patients, driving up medical costs for them and their insurers.”  Id. at 10.  We agree with the ALJ that the evidence establishing this aggravating factor reflects negatively on Petitioner’s trustworthiness. 

B.  Petitioner did not establish that the fifteen-year exclusion is excessive compared to exclusions of others. 

Petitioner contends that the ALJ erred in failing to address an argument that exclusion for fifteen years is excessive and an unjustified “depart[ure] from [the I.G.’s] own precedents.”  P. Br. at 1.  Petitioner did attempt to present such an argument to the ALJ.  See P. Br. to ALJ at 11-12.  Although the ALJ did not address the argument, that omission was harmless error because the argument does not warrant a reduction in the exclusion period. 

In his brief to the ALJ, Petitioner suggested that the excessiveness of his exclusion is apparent from the fact that his co-defendants were excluded for the same length of time despite their “greater involvement” in the illegal scheme.  See P. Br. to ALJ at 12 (asserting that the I.G. did “not explain[ ] imposing the same exclusion period” on his co-defendants).  However, Petitioner provided no evidence he and his co-defendants were excluded for the same length of time.⁸

Petitioner also contended before the ALJ that his fifteen-year exclusion is “not consistent with the OIG’s precedent for providers with [Petitioner’s] history and characteristics.”  P.

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Br. to ALJ at 12-13.  In support of that contention, Petitioner relied on three Board decisions:  Marcia C. Smith, a/k/a Marcia Ellison Smith, DAB No. 2046 (2006) (upholding a twelve-year exclusion based on program loss of $5,000 or more, five-year criminal conduct, and a 180-day sentence of incarceration); Stacy Ann Battle, D.D.S., and Stacy Ann Battle, D.D.S., P.C., DAB No. 1843 (2002) (upholding ten-year exclusion based on program loss of $85,000, four months of confinement in a half-way house followed by four months of home confinement, and adverse action by state licensing board); and Russell Mark Posner, DAB No. 2033 (2006) (upholding a fourteen-year exclusion based on program loss of $5,000 or more, thirty-seven-months criminal conduct, and incarceration for two terms of sixty months and one term of sixty-three months to be served concurrently, and adverse action by state licensing board).

When determining whether an exclusion period “falls within a reasonable range, the ALJ must weigh the aggravating and mitigating factors” and “must evaluate the quality of the circumstances surrounding these factors.”  Jeremy Robinson, DAB No. 1905, at 11 (2004) (citing Keith Michael Everman, D.C., DAB No. 1880, at 10 (2003)).  As the Board stated in Goldman at 11:

[T]he assessment of aggravating factors (and mitigating factors, if any), is first and foremost case-specific.  Every case involves a complex interaction of diverse circumstances and regulatory factors with varying weights.  For this very reason case comparisons, while sometimes informative for the ALJ’s or the Board’s decision-making in a given case, are of limited value and ultimately are not dispositive on the question of reasonableness of an exclusion period in a given case.

Before the ALJ, Petitioner merely selectively cited the three previously-mentioned Board decisions to support his claim that a fifteen-year exclusion was excessive and a “depart[ure] from . . . precedent[ ].”  See P. Br. to ALJ at 12-13; P. Br. at 2.  He made no attempt to explain how those decisions should inform an assessment of the reasonableness of the lengthened exclusion period imposed by the I.G. given the established aggravating factors.  Petitioner’s approach was insufficient to demonstrate the unreasonableness of the exclusion.⁹  Salman Ali, DPT, et al., DAB No. 3048, at 15

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(2021); Kimberly Jones, DAB No. 3033, at 15-16 (2021) (noting that “superficial comparisons [were] inadequate to show that [petitioner’s] 15-year exclusion [was] unreasonable”).

Consistent with Board precedent, the ALJ appropriately considered and weighed the established aggravating factors in determining that the extended exclusion period fell within a reasonable range.  Petitioner does not identify any flaw in the ALJ’s assessment of the exclusion’s reasonableness, and we agree with that assessment.

C.  The ALJ did not err in determining that Petitioner’s pending appeal to the Fifth Circuit was “irrelevant” in assessing the reasonableness of his fifteen-year exclusion.

The ALJ found that Petitioner was sentenced to forty-two months – “a substantial period of incarceration” – and thus concluded that the I.G. established the existence of the aggravating factor in 42 C.F.R. § 1001.102(b)(5).  ALJ Decision at 8-9.  The ALJ acknowledged Petitioner’s argument that the U.S. Court of Appeals for the Fifth Circuit could reduce or eliminate his period of incarceration if the court were to reverse his conviction under Count 1 (Conspiracy).  Id. at 9.  The ALJ, however, rejected Petitioner’s argument as “irrelevant,” noting that section 1128(i)(1) “explicitly provides that Petitioner has been convicted, and is therefore subject to exclusion, ‘regardless of whether there is an appeal pending.’”  Id. at 7 n.3 (quoting 1128(i)(1)), 9.  The ALJ also did not admit Petitioner’s appeal briefs to the Fifth Circuit into evidence because she found them to be “irrelevant.”  Id. at 3.

Before the Board, Petitioner asserts that the ALJ erred in relying on section 1128(i)(1) to not consider evidence of Petitioner’s pending appeal.  P. Br. at 3.  Although Petitioner “acknowledges and agrees that [s]ection 1128(i)(1) defines a ‘conviction’ as final, regardless of whether an appeal is pending,” Petitioner emphasizes that the “sentence, not the conviction, is the basis for the ‘term of incarceration’ aggravating factor” and that his appeal of the sentence (apart from any challenge to the underlying conviction) could alter the basis for that factor.  Id. (suggesting that the Fifth Circuit could vacate the prison term and impose only a “non-custodial sentence”).  According to Petitioner, “a statutory definition [referring to section 1128(i)(1)] that eliminates consideration of an appeal when weighing the existence of a conviction does not stretch so far as to including the word ‘sentence’ – a word that appears nowhere in Section 1128(i)(1).”  Id.  Therefore, in Petitioner’s view, he had a “right” to have his pending Fifth Circuit appeal considered, and the “ALJ’s refusal to consider evidence of [the] appeal” prejudiced his ability to contest the reasonableness of the exclusion’s length.  Id.

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Petitioner has not pointed to any legal error by the ALJ or anything in his appeal briefs to the Fifth Circuit that the ALJ should have considered.  We find no error in the ALJ’s rejection of Petitioner’s pending appeal as irrelevant because section 1128(i)(1) of the Act “explicitly provides that Petitioner has been convicted, and is therefore subject to exclusion, ‘regardless of whether there is an appeal pending.’”  ALJ Decision at 7 n.3 (quoting Act § 1128(i)(1)), 9.  Indeed, Petitioner’s pending appeal of his conviction that underlies the exclusion does not invalidate the exclusion itself.  James Brian Joyner, M.D., DAB No. 2902, at 8 (2018) (citing section 1128(i) in upholding the ALJ’s denial of petitioner’s motion to stay pending the outcome of his appeal of conviction); Delores L. Knight, Ruling on Req. for Reconsideration of Decision No. 2495, 2019 WL 5892605 (Aug. 8, 2019) (holding that “the fact that [p]etitioner has filed an appeal of the trial court’s judgment has no bearing on her exclusion”); Rosa Velia Serrano, DAB CR5170, at 3 (2018) (holding that the “pendency of an appeal” of a conviction upon which an exclusion is based “does not stay the I.G.’s authority to impose” the exclusion), aff’d, DAB No 2923, at 8 (2019) (affirming the ALJ’s decision to sustain the exclusion despite a pending appeal of the conviction upon which the exclusion was based).  Furthermore, regardless of the status of Petitioner’s appeal, it is undisputed that “[t]he sentence imposed by the court included incarceration.”  42 C.F.R. § 1001.102(b)(5).  And, his sentence is part of the “judgment of conviction” whose entry may serve as the basis for exclusion in spite of a pending appeal of that judgment.  42 U.S.C. § 1320a-7(i)(1); 42 C.F.R. § 1001.2007(d).¹⁰

Conclusion

For the reasons stated above, we affirm the ALJ Decision.

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Endnotes

¹ The offense must have occurred after the enactment of the Health Insurance Portability and Accountability Act of 1996.  Act § 1128(a)(3).  The conviction at issue in this case met that condition.

² The regulation which implements section 1128(a)(3) similarly mandates the exclusion of an individual convicted of a state or federal felony offense “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct . . . (1) [i]n connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or (2) [w]ith respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State or local government agency.”  42 C.F.R. § 1001.101(c).  

³ The factual information in this section is drawn from the ALJ Decision and the record of the ALJ proceedings and is not intended to replace, modify, or supplement the ALJ’s findings of fact.

⁴ Although Petitioner stated that the “Texas Medical Board accepted the voluntary revocation of [his] license,” there is no evidence in the record that the Texas Medical Board allowed him to surrender his medical license.  See P. Br. to ALJ at 11.

⁵ The ALJ declined to admit Petitioner’s Exhibits 7 and 8 (the judgment of conviction and jury verdicts) because they were duplicates of the I.G.’s Exhibits 4 and 5. 

⁶ The I.G. contended that Petitioner’s Exhibit 1 (spreadsheets detailing “surgery revenue” and payments) constituted an impermissible collateral attack on the underlying conviction, but the ALJ nonetheless admitted the exhibit because the spreadsheets included “some information regarding Petitioner’s involvement with Forest Park, which is relevant.”  ALJ Decision at 2-3.  Although acknowledging it as “not directly relevant,” the ALJ admitted Petitioner’s Exhibit 4 (the grand jury’s first superseding indictment) because it “provides potentially relevant background information.”  Id. at 3.  The ALJ admitted Petitioner’s Exhibit 5 (a copy of the U.S. Sentencing Commission Guidelines) because “the factors the sentencing judge considered in determining the length of Petitioner’s sentence may be relevant.”  Id.  The ALJ admitted Petitioner’s Exhibit 6 (the presentence investigation report) as relevant and admissible evidence because “it describes in greater detail Petitioner’s involvement in the conspiracy and contains evidence of ‘similar acts’ other than those for which Petitioner was convicted.”  Id.  

⁷ “The goals of criminal law generally involve punishment and rehabilitation of the offender, possibly deterrence of future misconduct by the same or other persons, and various public policy goals.[]  Exclusions imposed by the I.G., by contrast, are civil sanctions, designed to protect the beneficiaries of health care programs and the federal fisc, and are thus remedial in nature[.]”  Henry L. Gupton, DAB No. 2058, at 7 (2007), aff’d, Gupton v. Leavitt, 575 F.Supp.2d 874 (E.D. Tenn. 2008) (footnote omitted).

⁸ According to the I.G., the individuals Petitioner referenced in his prehearing exchange “were excluded for significantly longer periods of exclusion (e.g., 45 to 75 years) based on different facts and circumstances and different aggravating factors.”  I.G. Response Brief at 8.  The I.G. adds that, regardless, “those cases are not at issue in this proceeding” and, from a legal perspective, “the period of exclusion imposed in this case is within a reasonable range based on substantial evidence.”  Id. at 8.

⁹ Petitioner overlooked other Board decisions that tend to show that his fifteen-year exclusion is not a “departure,” contrary to Petitioner’s claim.  See, e.g., Baldwin Ihenacho, DAB No. 2667 (2015) (upholding a fifteen-year exclusion based on two-year criminal conduct, sixty-three-months of incarceration, and other adverse action); Awada, at 8-13 (affirming a twenty-three-year exclusion based on a duration of criminal conduct of approximately 14 months, a seven-year sentence, adverse action by state licensing board, and financial loss to a government agency); Joann Fletcher Cash, DAB No. 1725 (2000) (upholding a fifteen-year exclusion based on financial loss to the government of $149,315, criminal acts committed over a period of nineteen months, and a sixty-month sentence of incarceration); Stacey R. Gale, DAB No. 1941 (2004) (sustaining a fifteen-year exclusion based on 364-day sentence of incarceration, criminal acts committed over thirteen months, and financial loss to the government of $273,188.04); Robinson, (upholding a fifteen-year exclusion based on a one-year-and-one day term of incarceration, acts resulting in conviction committed over a period of three years, and financial loss of $205,000).  Petitioner did not identify any Board decisions involving the same aggravating circumstances present in his case.

¹⁰ Under section 1128(i)(1), it is a court’s “judgment of conviction” that may provide a basis for exclusion, and a “judgment of conviction” ordinarily “includes both the adjudication of guilt and the sentence.”  Deal v. United States, 508 U.S. 129, 132 (1993); see also Fed. R. Crim. Proc. 32(k)(1) (providing that “[i]n the judgment of conviction, the court must set forth the plea, the jury verdict or court’s findings, the adjudication, and the sentence.”); Ex parte Kopecky, 821 S.W.2d 957, 960 (Tex. Crim. App. 1992) (“Punishment and sentence are incorporated in the judgment. . . . [A]s is true in federal court, sentence is a necessary component of a judgment of conviction.” (internal quotation marks and citation omitted)).