William Frank Elder-Quintana, DAB No. 3082 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

William Frank Elder-Quintana (Petitioner) appeals the September 12, 2022 Administrative Law Judge (ALJ) decision that upheld Petitioner’s exclusion from participating in Medicare, Medicaid, and all other federal health care programs for six years.  William Elder-Quintana, M.D.,DAB CR6152 (2022) (ALJ Decision).  The Inspector General of the Department of Health and Human Services (I.G.) excluded Petitioner under section 1128(b)(1) of the Social Security Act (Act).¹  The ALJ concluded that Petitioner’s 2021 federal misdemeanor conviction provided a basis for the exclusion pursuant to section 1128(b)(1).  The ALJ also concluded that a six-year exclusion is not unreasonable in view of the presence of two aggravating factors and that Petitioner failed to prove any relevant mitigating factor. 

As we explain below, we affirm the ALJ’s conclusions that the I.G. had a basis to exclude Petitioner under section 1128(b)(1) of the Act and that the six-year exclusion is not unreasonable based on the established aggravating factors.  We also affirm the ALJ’s conclusion that Petitioner did not establish the existence of any mitigating factors.  Finally, we conclude that Petitioner is not entitled to consideration of the newly-submitted evidence that was included with the notice of appeal.

Legal Background

Under Section 1128(b)(1) of the Act, the Secretary of Health and Human Services (Secretary) may exclude from participation in any federal health care program an individual or entity that has been “convicted” under federal or state law –

Page 2

(A) of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct –

(i) in connection with the delivery of a health care item or service, or

(ii) with respect to any act or omission in a health care program (other than those specifically described in subsection (a)(1)) operated by or financed in whole or in part by any Federal, State, or local government agency[.]

Act § 1128(b)(1)(A).² 

The Secretary has delegated the exclusion authority in section 1128 to the I.G.  53 Fed. Reg. 12,993 (Apr. 20, 1988); 48 Fed. Reg. 21,662 (May 13, 1983).  The I.G in turn has issued regulations, codified in 42 C.F.R. Part 1001, implementing the delegated exclusion authority.  See 42 C.F.R. § 1001.1.  Those regulations apply to and bind the I.G. in imposing exclusions, and they also apply to and bind ALJs and the Departmental Appeals Board (Board) in reviewing exclusions imposed by the I.G.  Id. § 1001.1(b).

Exclusions imposed under section 1128(b) are referred to as “permissive” exclusions.  An exclusion imposed under section 1128(b)(1) of the Act must be for a period of three years, “unless aggravating or mitigating factors listed in [section 1001.201(b)(2) and (b)(3)] form a basis for lengthening or shortening that period.”  42 C.F.R. § 1001.201(b)(1); see also Act § 1128(c)(3)(D).  The aggravating factors that may be considered a basis for lengthening the period of exclusion include (as relevant here):

(i)    The acts resulting in the conviction, or similar acts, caused or reasonably could have been expected to cause, a financial loss of $50,000 or more to a government agency or program[; or]

*        *        *        *

(iv) The sentence imposed by the court [for the pertinent conviction] included incarceration[.]

Page 3

42 C.F.R. § 1001.201(b)(2)(i), (iv).  Mitigating factors that may be considered a basis for reducing the period of exclusion include (as relevant here):

(iii) The individual’s . . . cooperation with Federal or State officials resulted in –

(A)     Others being convicted or excluded from Medicare, Medicaid or any of the other Federal health care programs, or

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

(C)     The imposition of a civil money penalty against others; or

(iv) Alternative sources of the type of health care items or services furnished by the individual or entity are not available.

Id. § 1001.201(b)(3)(iii)-(iv).

An individual excluded under section 1128(b) of the Act may challenge the exclusion by requesting a hearing before an ALJ.  42 C.F.R. § 1005.2(a).  The only issues the ALJ may address are whether (1) the basis for the imposition of the exclusion exists and (2) the length of exclusion is unreasonable.  Id. § 1001.2007(a)(1).  A party dissatisfied with an ALJ decision may appeal the decision to the Board.  Id. § 1005.21(a). 

Case Background³

From October 2014 through April 2015, Petitioner, a physician, wrote over 16,000 prescriptions for compounded drugs for beneficiaries of TRICARE, the health insurance program for active-duty and retired military service members and their families (and other groups).⁴  ALJ Decision at 6, 7 n.5, 13.  The prescriptions, once submitted as claims to TRICARE, generated approximately $96 million of payments by TRICARE.  Id. at 6.For taking part in writing the prescriptions, Petitioner received compensation in the

Page 4

amount of $323,555 from individuals who used the prescriptions in a scheme to defraud TRICARE.  Id. at 6, 14; see also I.G. Ex. 7, at 5.

In January 2018, Petitioner and 11 others (including a physician named Walter Simmons) were charged in a federal indictment with conspiracy to commit health care fraud and paying or receiving illegal kickbacks.  ALJ Decision at 4, 7.  The indictment alleged that from May 2014 through February 2016, the defendants conspired to defraud TRICARE (using various improper means, including making or receiving illegal kickbacks) in connection with the prescribing of compounded drugs for that program’s beneficiaries.  Id. at 8; I.G. Ex. 7, at 8-9.  Although a jury found one co-defendant guilty of eight charged offenses, the jury acquitted Petitioner of the conspiracy charge and did not reach a verdict on the counts alleging illegal kickbacks.  ALJ Decision at 8; I.G. Ex. 8, at 4.  Thereafter, the United States filed a one-count information charging Petitioner with wrongfully using a unique health identifier in violation of 42 U.S.C. § 1320d-6(a)(1), a misdemeanor.  ALJ Decision at 8-9; I.G. Ex. 2.      

On March 10, 2021, Petitioner agreed to enter a guilty plea to the misdemeanor charge.⁵  ALJ Decision at 8-9; I.G. Ex. 2.  In a “Factual Resume” setting forth the basis for the plea, Petitioner agreed to having knowingly used a person’s unique health identifiers by writing two prescriptions for compounded drugs for that person and sending the prescriptions to an office in Dallas, Texas, and that those prescriptions were “used by other individuals to commit health care fraud and violations of the Anti-Kickback Statute, although this was not known by [Petitioner] at the time.”  I.G. Ex. 4, at 2; ALJ Decision at 9.  In a written plea agreement with the government, Petitioner agreed to pay restitution in the amount of $323,555 to the Defense Health Agency, TRICARE’s administrator.  ALJ Decision at 9; I.G. Ex. 3, at 3.  On July 8, 2021, the United States District Court for the Northern District of Texas, Dallas Division (District Court) adjudicated Petitioner guilty of the misdemeanor charge of wrongful use of a unique health identifier, sentenced Petitioner to four months of incarceration, and ordered Petitioner to pay $323,555 in restitution to the Defense Health Agency.⁶  ALJ Decision at 9; I.G. Ex. 5, at 1, 2, 6.   

In April 2015, prior to the criminal trial and adjudication, the Defense Health Agency suspended Petitioner based on Petitioner’s alleged participation in the scheme involving TRICARE beneficiaries.  I.G. Ex. 6, at 2.  The Defense Health Agency’s suspension of

Page 5

Petitioner, and the allegation that Petitioner wrote a significant number of prescriptions for TRICARE beneficiaries from outside the metropolitan area where Petitioner practiced, prompted the Texas Medical Board to take disciplinary action against Petitioner.  The Texas Medical Board imposed a public reprimand and a fine of $1,000 in August 2016.  ALJ Decision at 10; I.G. Ex. 6, at 5.  It also ordered that Petitioner take and pass a Medical Jurisprudence Examination as well as complete continuing medical education in the subject area of risk management.  ALJ Decision at 10.  Later, in December 2021, the Texas Medical Board and Petitioner entered into a “Waiver Order” which required Petitioner to comply with all of the terms of the criminal conviction.  P. Ex. 13, at 1; ALJ Decision at 11. 

As a result of the disciplinary action by the Texas Medical Board, the New Mexico Medical Board investigated Petitioner for disciplinary action in October 2016.  P. Ex. 4, at 1.  In September 2018, Petitioner entered into an Agreed Order for Reprimand and Stipulation of License with the New Mexico Medical Board, which resulted in a formal reprimand and a $1,000 fine.  P. Ex. 4, at 4; ALJ Decision at 10.   

By letter dated February 28, 2022, the I.G. notified Petitioner of its exclusion of Petitioner for six years from participation in all federal health care programs, pursuant to section 1128(b)(1) of the Act, based on Petitioner’s conviction in the District Court.  ALJ Decision at 1; I.G. Ex. 1, at 1.  The I.G. indicated in its letter that two aggravating factors had been considered in determining the length of the exclusion period:  (1) that acts resulting in Petitioner’s conviction, or similar acts, had caused, or reasonably could have been expected to cause, financial loss to a government agency or program of $50,000 or more; and (2) that the sentence imposed by the District Court included incarceration.  I.G. Ex. 1, at 2; see also 42 C.F.R. § 1001.201(b)(2)(i), (iv).  The I.G. did not state that it considered any mitigating factor in determining the exclusion’s length.  I.G. Ex. 1.

Petitioner timely requested ALJ review, after which the parties submitted evidence and legal argument.  ALJ Decision at 2.  In its brief to the ALJ, the I.G. argued that it had a basis to exclude Petitioner under section 1128(b)(1)(A) of the Act because Petitioner had been convicted of a misdemeanor offense; the offense was related to fraud, breach of fiduciary responsibility, or financial misconduct; and the offense was in connection with the delivery of a health care item or services or with respect to any act or omission in a health care program.  I.G.’s Brief in Support of Exclusion at 5-8.  The I.G. further contended that its evidence established the presence of the two aggravating factors cited in its exclusion notice.  Id. at 8-9.

Petitioner admitted that the conviction was for a misdemeanor offense but disputed that the offense was related to fraud, breach of fiduciary responsibility, or financial misconduct, insisting that the offense was merely “a simple, non-fraudulent process error related to the manner in which protected healthcare information was transmitted.”  Petitioner’s Response to Respondent’s Brief in Support of Exclusion (P. Resp. Br.) at 8-

Page 6

13.  In addition, while not denying the existence of the two aggravating factors identified by the I.G. (loss to a government program of $50,000 or more and a sentence of incarceration), Petitioner argued that it is unreasonable under the circumstances to rely on those factors to increase the exclusion period from three to six years.  Id. at 18-19.  Petitioner further alleged that two mitigating factors exist and render a six-year exclusion unreasonable.  Id. at 19-23.  Relying solely on Petitioner’s Declaration filed with the appeal (P. Ex. 5, at 1‑6) Petitioner claimed that the mitigating factor in section 1001.201(b)(3)(iii) exists because Petitioner “substantively cooperated with law enforcement throughout the entire [criminal] case,” including meeting with prosecutors and providing information that “facilitate[d]” a guilty plea from co-defendant Simmons.  P. Resp. Br. at 19-21 (citing P. Ex. 5).  Petitioner contended that the mitigating factor in section 1001.201(b)(3)(iv) also exists because the exclusion would “deprive the El Paso community of an essential source of care” – namely, Petitioner’s services as a bilingual emergency room physician.  Id. at 21‑23.

The ALJ admitted all of the parties’ evidence except for one of Petitioner’s exhibits.  ALJ Decision at 2-5.  The I.G. did not request to cross-examine Petitioner.  Id. at 5.  After determining that an in-person hearing was unnecessary for the purpose of cross-examination of any witnesses, the ALJ issued a decision on the written record, sustaining the six-year exclusion.  Id.   

The ALJ Decision

In accordance with section 1001.2007(a)(1), the ALJ addressed two main issues:  whether Petitioner’s misdemeanor conviction provided a basis for exclusion under section 1128(b)(1) and, if so, whether the six-year exclusion period was unreasonable.  ALJ Decision at 6.  

Based on the evidence of Petitioner’s prosecution for wrongful use of a unique health identifier, the ALJ determined that Petitioner had been convicted of a misdemeanor offense that was related to fraud and was in connection with the delivery of a health care item or service, and that the I.G. therefore had a basis to exclude Petitioner under section 1128(b)(1)(A)(i) of the Act.  Id. at 13.

Next, the ALJ found that the I.G. established two aggravating factors pursuant to section 1001.201(b)(2)(i), (iv).  Id. at 15.  Specifically, the ALJ found that Petitioner’s acts resulting in conviction, or similar acts, had caused, or reasonably could have been expected to cause, financial loss to a government agency or program of $50,000 or more.  Id. at 15-16.  In support of that finding, the ALJ noted that Petitioner had been ordered to pay $323,555 in restitution to the Defense Health Agency.  Id.  The ALJ also found that Petitioner was sentenced to four months of incarceration.  Id. at 15, 17.

Page 7

The ALJ then considered but rejected Petitioner’s claim that the evidence warranted mitigation of the length of the exclusion under section 1001.201(b)(3)(iii) and held that Petitioner had not met the required burden of proving the existence of that (and any other) mitigating factor.  Id. at 18 (citing 42 C.F.R. § 1005.15(b) and Andrew Louis Barrett, DAB No. 2887, at 8 (2021)).The ALJ observed that the evidence of Petitioner’s alleged cooperation with law enforcement was based on Petitioner’s own testimony but that the testimony was “self-serving” and “lack[ed] the requisite specificity to establish this mitigating factor.”  ALJ Decision at 18, 19 n.16.  The ALJ determined that the testimony did not establish that Petitioner’s cooperation with law enforcement resulted in the conviction of others or in any of the other outcomes specified in section 1001.201(b)(3)(iii).  Id. at 18-19. 

The ALJ also rejected Petitioner’s claim that reduction of the length of exclusion is warranted under section 1001.201(b)(3)(iv) because Petitioner is a bilingual emergency room physician whose exclusion would impact the El Paso community.  Id. at 19-22.  The ALJ rejected that claim in part because the ALJ found that Petitioner “last worked and intends to return to work” in Jacksonville, Texas, not El Paso, Texas.  Id. at 19, 21, 22.  The ALJ also found that Petitioner had not met the burden of establishing that alternative sources of the services Petitioner provides as an emergency medicine physician are unavailable in Jacksonville, Texas.  Id. at 21.  The ALJ noted that any claim that Petitioner worked in a “medically underserved area” would not, even if true, be “dispositive” on the issue.  Id. 

The ALJ concluded that based on the presence of two aggravating factors and the absence of any mitigating factor, the I.G.’s six-year exclusion, effective March 20, 2022, “is not unreasonable and is undoubtedly within a reasonable range.”  Id. at15, 17, 22.  In reaching that conclusion, the ALJ found that both aggravating factors were “significant” and that “prior DAB decisions support that a lengthening of the exclusion by three years is not unreasonable.”  Id. at 17.

Petitioner submitted a timely notice of appeal to the Board.  Notice of Appeal (NA); see 42 C.F.R. § 1005.21(a).  Along with the notice of appeal, Petitioner submitted documentary evidence that had not been presented to the ALJ.  Petitioner identified this additional evidence as “related to” Petitioner’s cooperation with the government and “to my commitment to medically underserved areas.”  NA at 1, 2.

Standard of Review

The Board reviews an ALJ’s decision to determine if a disputed issue of fact is supported by substantial evidence and if a disputed issue of law is free of legal error.  42 C.F.R. § 1005.21(h); see also Guidelines – Appellate Review of Decisions of Administrative Law Judges in Cases to Which Procedures in 42 C.F.R. Part 1005 Apply (Guidelines), “Completion of the Review Process, ¶ c (available at

Page 8

https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/procedures/index.html?language=en).  The Board “will not consider any issue not raised in the parties’ briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.”  42 C.F.R. § 1005.21(e).

Analysis

Petitioner appeals only the ALJ’s conclusion that no mitigating factors are present.  NA at 1, 5 (stating that “the Judge’s decision that no mitigating factors exist is incorrect”).  Petitioner also requests the Board admit the additional documentary evidence submitted with the notice of appeal so that the ALJ may “consider it towards the mitigating factors.”  Id. at 1, 5.  In support of that request, Petitioner asserts that the ALJ “basically disregarded my Declaration” – evidence proffered to prove the factors – as “self-serving”; that the I.G. did not ask to cross-examine Petitioner; and that these two circumstances combined to deprive Petitioner of “the opportunity to speak on my behalf.”  Id. at 1.Petitioner further asserts, “[m]y attorney and I mistakenly understood the attestation would be sufficient” proof of the claimed mitigating factors, and that “[t]he Judge did not have all the evidence . . . necessary to properly consider the mitigating factors.”  Id.  Finally, apart from the additional documentary evidence, Petitioner asks the Board to weigh certain “Additional Considerations” in deciding this appeal.  Id. at 4.

As explained below, we conclude that the ALJ properly determined that Petitioner did not establish the presence of the mitigating factors described in section 1001.201(b)(3)(iii) and (iv).  We also decline to remand the case to the ALJ for consideration of Petitioner’s newly-submitted evidence because Petitioner failed to show that the evidence is relevant and material and that there were reasonable grounds for not presenting it to the ALJ.  Finally, we hold that Petitioner’s additional considerations are not legally allowable grounds for reducing the exclusion.

Page 9

1. The ALJ properly concluded that Petitioner’s cooperation with law enforcement did not qualify as a mitigating factor under 42 C.F.R. § 1001.201(b)(3)(iii).

Section 1001.201(b)(3)(iii) provides that, to qualify as a mitigating factor and a basis for reducing the period of exclusion, an individual’s cooperation with federal or state officials must have “resulted in . . . [o]thers being convicted or excluded from Medicare, Medicaid, or any of the other Federal health care programs” (or in certain other outcomes that are not alleged to have occurred in this case).  42 C.F.R. § 1001.201(b)(3)(iii).  The Board has observed “the demanding requirements” of this regulation.  Hazem Garada, M.D., DAB No. 2027, at 8 (2006).

As noted, the only evidence of cooperation submitted to the ALJ was Petitioner’s Declaration which states that information Petitioner provided to law enforcement was used to detain two co-defendants.  P. Ex. 5, at 4.  Petitioner further asserted that “[i]nformation I provided in [a February 2021] interview assisted prosecutors into entering a plea agreement with Dr. Simmons.”  Id.  As noted, Dr. Simmons was tried with Petitioner for conspiracy to commit health care fraud.  The jury did not reach a verdict on the conspiracy count against Dr. Simmons.  I.G. Ex. 8, at 3.  The materials Petitioner filed with the notice of appeal indicate that Dr. Simmons was later charged with three misdemeanor counts of Wrongful Use of a Unique Healthcare Identifier and pled guilty to those charges.  Attachment A4, at 30.  The District Court accepted the plea and sentenced Dr. Simmons for the misdemeanor offenses on July 8, 2021, the date Petitioner was convicted and sentenced.  Id. at 30-31; I.G. Ex. 5, at 1.  Petitioner asserted, “I was asked to testify for the prosecution at the sentencing hearing for Dr. Simmons.”  P. Ex. 5, at 5.    

The ALJ correctly concluded that Petitioner’s Declaration was insufficient proof that Petitioner’s cooperation met the regulatory criteria to be considered a mitigating factor.  See ALJ Decision at 19.  Section 1001.201(b)(3)(iii) required Petitioner to show “whether and how his cooperation led to . . . convictions or any other significant result for law enforcement recognized in the regulations.”  Hussein Awada, M.D., DAB No. 2788, at 15 (2017); see also Rehabilitation Center at Hollywood Hills, LLC, DAB No. 3001, at 14 n.8 (2020) (discussing the expectation that mitigation efforts extend to “an actual, positive outcome” and that cooperation “is not itself sufficient”).  Although the Declaration alleges a connection between Petitioner’s cooperation and Dr. Simmons’s conviction, the Declaration does not indicate what information was provided to the prosecution and how, if at all, the information helped secure Dr. Simmons’s guilty plea.  In other words, Petitioner failed to allege any facts demonstrating that the purported cooperation “resulted in” the conviction (or exclusion) of Dr. Simmons, as required by the regulation.  In addition, as the ALJ held, helping the government secure pre-trial detention of others does not qualify as a mitigating factor under the regulation.  See ALJ Decision at 18.  Additionally, the ALJ correctly held that Petitioner’s testifying at a co-

Page 10

defendant’s sentencing hearing following conviction does not meet the regulatory criteria, which requires evidence of cooperation resulting in a “conviction.”  Id. at 19. 

2. The ALJ properly concluded that Petitioner did not prove the existence of the mitigating factor specified in 42 C.F.R. § 1001.201(b)(3)(iv).

To prove the existence of the mitigating factor at section 1001.201(b)(3)(iv), the individual subject to exclusion must demonstrate that “[a]lternative sources of the type of health care items or services furnished by the individual . . . are not available.”  42 C.F.R. § 1001.201(b)(3)(iv).  The Board has explained that application of this mitigating factor must focus “on the adverse effect of the exclusion on previously available services.”  Barry D. Garfinkel, M.D., DAB No. 1572, at 13 (1996), aff’d Garfinkel v. Shalala, No. 3-96-604 (D. Minn. June 25, 1997).  An individual does not meet the burden of establishing this mitigating factor by showing that an exclusion “might merely reduce the number of available health care providers[.]”  Id.  In other words, “[m]ere diminution of previously available health care services is insufficient.”  Id. at n.11 (quoting Scott Meggison, DAB CR329 (1994)).  The mitigating factor exists “when, as a result of a provider’s exclusion, either there is no other health care provider in the geographical area reasonably accessible to program patients or a significant number of program patients will be deprived of reasonable access to ‘comparable alternative’ services.”  Id.

Before the ALJ, Petitioner argued that as a bilingual English/Spanish speaking physician, “his exclusion ‘would deprive the El Paso community of an essential source of care.’”  ALJ Decision at 19.  The ALJ concluded that Petitioner did not establish this mitigating factor because, for one, Petitioner was most recently employed in the Jacksonville, Texas area, not the El Paso area.  Id.  The ALJ also cited the implausibility of Petitioner’s claim that Petitioner had to seek work outside of the El Paso area due to the negative publicity of the criminal case.  Id.  The ALJ observed that Petitioner would likely not have had to seek work outside El Paso if bilingual emergency physicians were unavailable to provide services to that community.  Id.

The ALJ determined that not only did Petitioner not “demonstrate[ ] that he practices medicine in El Paso” but that it appeared that “Petitioner has chosen to claim that he practice[s] in El Paso because a portion of the El Paso population falls within a medically underserved area.”  Id. at 20.  The ALJ concluded that the evidencePetitioner submitted did not sufficiently establish that Petitioner was employed as a physician in El Paso, or that “alternative sources of the services he provides as an emergency medicine physician are unavailable in the Jacksonville community, where he last worked and intends to return to work.”  Id. at 21.

We see no basis to disturb that conclusion.  Petitioner does not dispute that Petitioner “last worked professionally in Jacksonville, informed both the I.G. and [the ALJ] that he intends to return to the same position in Jacksonville, and claims he was unable to work

Page 11

in El Paso due to negative publicity following his arrest.”  Id. at 22.  Nor does Petitioner disagree with the ALJ’s finding that the evidence failed to “demonstrate[ ] that alternative sources of bilingual emergency medical services are not available” where Petitioner works.  Id.  The record reflects that, as of September 2021, Petitioner was working as an emergency room physician in UT Health East Texas hospital in Jacksonville, Texas.  See id. at 20 (citing P. Ex. 11, at 5, 33).  Petitioner submitted a letter from the head of the emergency department at that facility who stated that Petitioner’s “unique qualifications include being bilingual in an area that has a large Hispanic presence,” and these qualifications are “extremely helpful and a rare commodity in East Texas.”  P. Ex. 11, at 33.  However, as the ALJ notes, the letter does not indicate that UT Health’s patients, or others in the surrounding community, lacked alternative sources of emergency medicine services, only that the Petitioner’s absence would result in other staff having to work greater-than-normal weekly hours and “tax the already limited physician resources.”  Id.

Petitioner asserts that the ALJ “incorrectly found that my service and commitment to medically underserved areas did not satisfy the regulatory requirement to be considered a mitigating factor.”  NA at 2.  The ALJ held that, even if Petitioner works in a medically underserved area (MUA) or health professional shortage area (HPSA), that fact alone “would not be dispositive” in determining whether the regulatory condition has been met.  ALJ Decision at 21.  That holding is not erroneous.  Section 1001.201(b)(3)(iv) requires more than a showing that the exclusion “might merely reduce” the number of providers or amount of health care services available in some geographic area “since some reduction is likely to result from any exclusion.”  Garfinkel at 13.  As the Board made clear in Garfinkel, the regulation requires proof that, in the community or locale where the excluded individual furnishes services, alternative sources for those (or comparable) services are “not available,” or are unavailable to a significant number of program patients, as a result of the exclusion.  Id. at 13, 18 (emphasizing that the ALJ had improperly disregarded evidence that a provider shortage “was not caused or substantially exacerbated by” the exclusion).  In Garfinkel, the Board considered – in the case of a psychiatrist with a specialty in adolescent suicide, attention deficit disorder, and attention deficit and hyperactivity disorder – whether either “prematurely lifting” or “reducing” the exclusion of the provider was “likely to have any significant impact on alleviating” a state-wide shortage of psychiatrists.  Id. at 7, 18.  The Board held that modifying the exclusion period was unlikely to alleviate the shortage of psychiatrists in the state.  Id. at 18.  Moreover, the Board observed that proof of the mitigating factor must “focus on the impact of the exclusion itself, not on the pre-existing availability or shortage of providers in the field.”  Id. at 17.  There is no evidence in the record showing the significant impact of Petitioner’s exclusion as is required by the regulation. 

Finally, we note that Petitioner failed to establish the relevance of any MUA or HPSA to Petitioner’s particular circumstances.  “Medically underserved areas” (MUAs) “have a shortage of primary care health services within geographic areas.”  U.S. Dept. of Health & Human Servs., Health Resources & Servs. Admin., “What is a Shortage Designation,”

Page 12

https://bhw.hrsa.gov/workforce-shortage-areas/shortage-designation#hpsas (italics added).  A “health professional shortage area” (HPSA) is a geographic area, population group, or health care facility with a shortage of primary care, mental health, or dental health providers.  Id.  Petitioner is not a mental health or dental provider, and although  Petitioner emphasized before the ALJ that El Paso County is an MUA (see P. Resp. Br. at 21-23) – that is, a geographic area with a shortage of primary care services – Petitioner did not, as the ALJ found, establish that Petitioner is practicing medicine in El Paso County or has plans to do so, and does not dispute the ALJ’s finding that Petitioner most recently worked and intends to work elsewhere (in Cherokee County).  Nor did Petitioner furnish evidence to the ALJ that Petitioner practices primary care medicine.

3. The Board will not remand the case to the ALJ for consideration of Petitioner’s newly-submitted evidence.

We turn next to Petitioner’s request that the evidence submitted with the notice of appeal – evidence that was not presented to the ALJ – be considered in determining whether mitigating factors in section 1001.201(c)(3)(iii) and (iv) are present. 

In general, Board review of an ALJ decision is based on the evidentiary record developed before the ALJ.  See 42 C.F.R. § 1005.21(f); Gracia L. Mayard, M.D., DAB No. 2767, at 6-8 (2017).  Section 1005.21(f) of the I.G.’s regulations provides that the Board “may remand the matter to the ALJ for consideration” of evidence newly-submitted on appeal only if the proponent of the evidence demonstrates that:  (1) it is relevant and material; and (2) there were “reasonable grounds” for failing to present it to the ALJ.  42 C.F.R. § 1005.21(f).  The Board’s Guidelines, a copy of which was provided to the parties with the ALJ Decision, informed them of the standard for the Board’s consideration of additional evidence.  Guidelines, “Completion of the Review Process,” ¶ (b). 

Petitioner has not met either of section 1005.21(f)’s conditions for consideration of the newly-submitted evidence.  First, Petitioner has not demonstrated reasonable grounds for not presenting the evidence to the ALJ.  Petitioner does not, for example, claim that the evidence was unavailable, or could not have been obtained with reasonable effort, when the ALJ case was pending.  That Petitioner provided the ALJ with the name and contact information of the lead prosecutor and “essentially called on [the ALJ] to develop the evidentiary record on [Petitioner’s] behalf” suggests that evidence was available and could have been obtained with reasonable effort – but was not.  See ALJ Decision at 18.  Petitioner’s reliance on a mistaken understanding that the Declaration “would be sufficient” proof of mitigation is little more than a request for a second chance to prove Petitioner’s case.  See NA at 1.  Petitioner does not state why it was reasonable to believe that the Declaration sufficed to meet the applicable regulatory criteria.

Petitioner’s claim to “not [being] afforded the opportunity to speak on my behalf” is also not a reasonable ground for failing to present the additional evidence to the ALJ, as

Page 13

Petitioner appears to argue.  NA at 1.  In fact, Petitioner was not denied an “opportunity to speak” because the ALJ permitted Petitioner to submit a Declaration which served as direct testimony.  See Standing Pre-Hearing Order of ALJ at 5, 8; see also Laurels at Forest Glenn, DAB No. 2182, at 9-10 (2008) (holding that the requirement to submit direct testimony in writing did not deny a party a fair hearing).  The argument that the I.G.’s failure to cross-examine Petitioner foreclosed Petitioner’s opportunity to speak on Petitioner’s behalf is unavailing.  The ALJ notified the parties that an oral hearing may be unnecessary and that the ALJ may decide the case on the written record “if the parties do not identify any proposed witnesses . . . or do not request an opportunity to cross-examine a witness whose written direct testimony has been offered.”  Civil Remedies Division Procedures § 19d, at 19; see also Standing Pre-Hearing Order of ALJ § 15, at 8 (“I will not conduct a hearing in this case unless a party files admissible, written direct testimony, and the opposing party asks to cross-examine one or more witnesses.”).  The decision to cross-examine Petitioner rested with the I.G. and cannot form the basis for a claim that Petitioner was denied an opportunity to present evidence.  Additionally, we note that the ALJ considered Petitioner’s written direct testimony.  That the ALJ found Petitioner’s Declaration “self-serving” and that it “lack[ed] the requisite specificity to establish” the mitigating factor does not mean that the ALJ disregarded Petitioner’s testimony, as Petitioner claims.  ALJ Decision at 19 n.16; NA at 1.  The ALJ considered Petitioner’s written direct testimony and, therefore, the Petitioner was not denied an opportunity to be heard.  Petitioner has thus not shown reasonable grounds for the failure to present the additional evidence to the ALJ.  42 C.F.R. § 1005.21(f).

Petitioner has also failed to demonstrate that the additional evidence is relevant and material.  The additional evidence concerning Petitioner’s cooperation with law enforcement consists of five exhibits:  a February 16, 2021 Proffer Agreement between Petitioner and the Assistant United States Attorney for the Northern District of Texas (Attachment A1); a summary of an interview with the United States Attorney’s Office on February 22, 2021, pursuant to the Proffer Agreement (Attachment A2); Dr. Simmons’s Plea Agreement, dated March 10, 2021 (Attachment A3); the judgment evidencing Dr. Simmons’s guilty plea and conviction (Attachment A4); and a screenshot of the I.G.’s Exclusions Search Results webpage showing that Dr. Simmons had been excluded as of March 20, 2022 (Attachment A5).  Petitioner asserts that the information provided during the interview with the United States Attorney’s Office “clearly caused Dr. Walter Simmons’ criminal conviction, restitution, and subsequent exclusion, satisfying the requirements as set out in 42 C.F.R. § 1001.201(b)(3)(iii)(A).”  NA at 2 (italics added).  However, Petitioner did not cite to any of the content of the interview, nor allege that any statement in the interview indicates that Petitioner’s cooperation with authorities resulted in Dr. Simmons’s conviction, as required.  See 42 C.F.R. § 1001.201(b)(3)(iii).  Review of the materials in Attachment A reveals nothing “relevant and material” on that issue such as to warrant remand to the ALJ.  While Petitioner asserts that the interview “brought to light” certain activity by Dr. Simmons during and after April 2015, Petitioner does not explain how that activity could have caused Dr. Simmons’s conviction (and

Page 14

resulting exclusion) given that the conviction was for wrongful use of a unique health identifier during 2014.  NA at 2; Attachment A4, at 30.

The additional evidence offered by Petitioner to establish the presence of the mitigating factor in section 1001.201(b)(3)(iv) is also not relevant or material.  That evidence  consists of six numbered exhibits that include:  documentation of Petitioner’s hospital privileges in El Paso and other communities (Attachment B1); Petitioner’s contracts to perform services as an emergency room physician in El Paso and other communities between 2013 and 2020 (Attachment B2); certificates of medical professional liability insurance (dated 2015 through 2021) for Petitioner’s physician services (Attachment B3); employment contracts that Petitioner purportedly entered into in 2017 and 2018 to perform services in physician clinics in El Paso (Attachment B4); miscellaneous documents evidencing that Petitioner practiced medicine in the El Paso community in 2018 and 2019 (Attachment B5); and data on MUAs (Attachment B6).  Petitioner asserts that this material shows a 20-year “unwavering commitment” to working in emergency room and primary care settings throughout the “medically underserved communities of West Texas and Southern New Mexico.”⁷  NA at 3.  However, as the discussion above indicates, the mere fact that an excluded individual works – or has a history of working – in a medically underserved area does not satisfy the applicable regulatory criteria.  Application of those criteria must “focus on the specific impact of the [provider’s] exclusion” on the availability to federal program beneficiaries of the types of services that the excluded individual performs, as opposed to the pre-existing “general situation” regarding service availability in the relevant community.  Garfinkel at 13.  Moreover, an analysis of whether the mitigating factor is present must be “directed to the objective qualifications and type of services offered by alternative sources and the practical access to those services by program patients.”  Id. at 14-15. Petitioner does not suggest that the additional evidence addresses any of these issues. 

4. Petitioner’s “additional considerations” are not legally permissible grounds to reduce the exclusion.

Petitioner suggests that the Board should consider that during the time the Defense Health Agency paid claims for compounded drugs, the “prescriptions presented under [Petitioner’s] NPI [ ] were submitted without [Petitioner’s] authorization.”  NA at 4.  Petitioner states that “I never submitted any prescription written by me to a private or government insurer for payment” and “never had actual or constructive knowledge” that

Page 15

others were engaging in fraudulent activity.⁸  Id.  Petitioner claims to have been “duped” and that “my mistake was not related to greed or personal gain.”  Id.  Finally, Petitioner asserts that “I have taken responsibility and accountability.”  Id. 

Neither the ALJ nor the Board may consider these alleged circumstances as grounds for mitigation.  The only circumstances that may be considered as bases for reducing the exclusion imposed by the I.G. are the factors specified in section 1001.201(b)(3), which states that “[o]nly the [listed] factors may be considered as mitigating.”  See also Shaun Thaxter, DAB No. 3053, at 35 (2021) (holding that the factors which may be considered mitigating are “limited to those listed in the regulation”).  Section 1001.201(b)(3) does not authorize consideration, as a mitigating factor, of the level of culpability for the acts resulting in a conviction, the motive in committing those acts, the alleged acceptance of responsibility for the misconduct, or any claimed ignorance of wrongdoing by others.

Conclusion

For the reasons stated, we affirm the ALJ’s conclusions that a basis exists to exclude Petitioner from participation in federal healthcare programs under section 1128(b)(1) of the Act, and that a six-year exclusion is not unreasonable.

---

Endnotes

¹  Section 1128(b)(1) of the Act is codified at 42 U.S.C. § 1320a-7.  The current version of the Act can be found at http://www.socialsecurity.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.  Cross-reference tables for the Act and the United States Code can be found at http://uscode.house.gov/table3/1935_531.htm and https://www.ssa.gov/OP_Home/comp2/G-APP-H.html.  

²  Section 1128(b)(1) of the Act requires that the offense that forms the basis of the conviction occur after August 21, 1996, which is the date of enactment of the Health Insurance Portability and Accountability Act of 1996.  Act § 1128(b)(1).  Petitioner’s conviction meets this condition.

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

⁴  Compounded drugs are created through a practice of modifying “ingredients of a drug or multiple drugs to create a drug tailored to the needs of an individual patient.”  I.G. Ex. 7, at 3.  These compounded drugs “are not FDA-approved” but may be prescribed when “an FDA-approved drug does not meet the health needs of a particular patient.”  Id.

⁵  The plea agreement states that “defendant . . . pleads guilty to the offense alleged in Count One of the superseding information, charging a violation of 42 U.S.C. § 1320d-6(a)(1) and (b)(1), that is, Wrongful Use of a Unique Health Identifier.”  I.G. Ex. 3, at 1.  The Superseding Information explains that section 1320d-6(b)(1) is the penalty provision of section 1320d-6(a)(1).  I.G. Ex. 2.

⁶  Petitioner’s sentence included a one-year term of supervised release after Petitioner’s release from imprisonment and a $5,000 fine.  I.G. Ex. 5, at 3, 6.  The District Court also dismissed the counts of the indictment that remained pending against Petitioner due to the jury’s failure to reach a verdict.  ALJ Decision at 9.

⁷  The I.G. correctly points out that Petitioner did not claim to provide primary care services to the El Paso, Texas community when Petitioner argued this mitigating factor before the ALJ.  I.G.’s Response in Opposition at 11.

⁸  Before the ALJ, Petitioner claimed to have lacked “knowledge of the criminal conduct of the other defendants.”  ALJ Decision at 9.  The ALJ rejected Petitioner’s claim of innocence, noting that while Petitioner may have stipulated to being unaware of the fraudulent scheme on January 25, 2015, Petitioner admitted to continuing to prescribe compounded drugs through April 2015.  Id. at n.7.  On appeal, Petitioner does not challenge the ALJ’s finding.