Waleed Khan, DAB No. 3083 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Waleed Khan (Petitioner) appeals the August 10, 2022 decision of an Administrative Law Judge (ALJ), captioned Waleed Khan, DAB CR6136 (ALJ Decision).  The ALJ Decision upheld the determination of the Inspector General (I.G.) to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs for seven years under section 1128(a)(4) of the Social Security Act (Act).  We affirm the ALJ Decision, and decline to consider Petitioner’s newly submitted evidence, for the reasons stated below.

Legal Background

Section 1128(a) of the Act requires the Secretary of the Department of Health and Human Services to exclude an individual from participation in all federal health care programs under specified circumstances.  The Secretary has delegated to the I.G. the authority to enforce the exclusion provisions of section 1128 of the Act.  53 Fed. Reg. 12,993 (Apr. 20, 1988); 48 Fed. Reg. 21,662 (May 13, 1983).  The I.G.’s implementing regulations are codified in 42 C.F.R. Parts 1001 and 1005.  See 57 Fed. Reg. 3,298(Jan. 29, 1992).  “The primary purpose of an exclusionary sanction is remedial, not punitive.”  Id. at 3,300.

Under section 1128(a)(4), exclusion is mandatory for any individual who “has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Act § 1128(a)(4); see also 42 C.F.R. § 1001.101(d) (implementing regulation).   

An exclusion imposed under section 1128(a)(4) of the Act must be for at least five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  The I.G. may impose an exclusion under section 1128(a) that exceeds five years if any of nine specified aggravating factors are present.  42 C.F.R. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion . . . .”).  Two such factors are relevant here:

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• The sentence imposed by the court included incarceration; and
• 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. § 1001.102(b)(5), (9).  If the I.G. determines that one or more aggravating factors justify an exclusion longer than five years, the I.G. may consider only certain specified mitigating factors as a basis for reducing the period of exclusion to no less than five years.  See id. § 1001.102(c) (specifying three mitigating factors).  One such mitigating factor relates to cooperation with government officials:

The individual’s or entity’s cooperation with Federal or State officials resulted in—

(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

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

(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

Id. § 1001.102(c)(3).

In exclusion cases such as this, an excluded individual may request a hearing before an ALJ.  Id. § 1005.2(a); see also id. § 1005.1 (defining “exclusion cases”).  However, the ALJ may address only two issues, namely whether:  (i) the I.G. had a basis for imposing the exclusion; and (ii) an exclusion longer than the required minimum period is unreasonable.  Id. § 1001.2007(a)(1). 

A party dissatisfied with the ALJ’s decision may appeal it to the Board.  Id. § 1005.21(a).  If any party demonstrates to the Board’s satisfaction that additional evidence not presented at the ALJ hearing is relevant and material, and that reasonable grounds existed for failing to present such evidence at that hearing, then the Board may remand the matter to the ALJ for consideration of such evidence.  Id. § 1005.21(f).

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Case Background¹

Petitioner was a medical doctor licensed to practice in Texas.  ALJ Decision at 1; I.G. Ex. 5, at 1.  The Texas Medical Board suspended Petitioner’s medical license on March 11, 2016.  Req. for Hearing (RFH)² at 3; ALJ Decision at 8.

On June 29, 2017, Petitioner was indicted in the United States District Court for the Southern District of Texas on four criminal counts, and on April 4, 2019, a superseding indictment was filed against Petitioner and an alleged co-conspirator.  ALJ Decision at 2; I.G. Ex. 2; I.G. Ex. 3, at 1-2, 4, 10.  On August 20, 2019, Petitioner pleaded guilty to one count of Conspiracy to Unlawfully Distribute and Dispense Controlled Substances under 21 U.S.C. § 846, and three counts of Unlawfully Distributing and Dispensing Controlled Substances and Aiding and Abetting under 18 U.S.C. § 2 and 21 U.S.C. § 841.  ALJ Decision at 2; I.G. Ex. 3, at 1-2, 13-14; I.G. Ex. 4, at 1.  The nature of Petitioner’s offense was unlawfully distributing and dispensing Hydrocodone and Carisoprodol, not for legitimate purposes and outside the course of professional practice, individually and in conspiracy with others.  ALJ Decision at 2; I.G. Ex. 5, at 1.

In January 2021, the court entered a judgment, accepting Petitioner’s guilty plea and imposing a sentence of 72 months in prison with a subsequent three-year term of supervised release.  ALJ Decision at 2-3 and 3 n.3; I.G. Ex. 4, at 1-3.  Petitioner was incarcerated in March 2021.  I.G. Ex. 3, at 17; I.G. Ex. 5, at 1.  On April 1, 2021, the Texas Medical Board revoked Petitioner’s medical license pursuant to Texas Occupations Code, section 53.021(b), under which “a license holder’s license shall be revoked on the license holder’s imprisonment following a felony conviction.”  I.G. Ex. 5, at 2.

By letter dated September 30, 2021 (the Notice Letter), the I.G. gave notice of Petitioner’s exclusion for seven years (beginning 20 days from the letter’s date) from participation in all federal health care programs pursuant to section 1128(a)(4) of the Act.  ALJ Decision at 3; I.G. Ex. 1, at 1.  The I.G. explained the exclusion was due to Petitioner’s felony conviction of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, and identified two aggravating factors relating to Petitioner’s 72-month incarceration and the revocation of Petitioner’s state medical license.  I.G. Ex. 1, at 1.  The I.G. also stated that it had considered one “mitigating circumstance” when assessing Petitioner’s exclusion period:

The individual’s or entity’s cooperation with Federal or State officials

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resulted in others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs, additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or the imposition against anyone of a civil money penalty or assessment under 42 CFR part 1003.  You cooperated with Federal and/or State Officials.

Id. at 2.

Petitioner timely requested an ALJ hearing to contest the length of the exclusion.  ALJ Decision at 3; RFH at 1-3.  Petitioner’s sole asserted basis for reducing the exclusion period was that the I.G. did not consider the COVID-19 pandemic’s prolongation of Petitioner’s criminal case.  RFH at 1-3.  Petitioner raised no arguments concerning cooperation with government officials as a mitigating factor.  Petitioner’s hearing request referenced two exhibits, consisting of a set of filings from the criminal case concerning continuance of the sentencing hearing due to the pandemic, and the Texas Medical Board’s March 11, 2016 medical license suspension order.  Exs. 1, 2 to RFH.

The ALJ issued a pre-hearing Order and Schedule for Filing Briefs and Documentary Evidence (Briefing Order).  ALJ Decision at 3.  The Briefing Order apprised all parties that with their briefs they “should provide the documentary evidence, if any, that supports their arguments,” marked as exhibits, and submit any necessary witness testimony in affidavit or declaration form, also marked as exhibits.  Briefing Order at 7.  The Briefing Order informed the parties that the I.G. bore the burden of proving the basis for exclusion and the existence of aggravating factors, and Petitioner bore the burden of proving affirmative defenses including mitigating factors.  Id. at 5-6; see also 42 C.F.R. § 1005.15(c) (providing “the ALJ will allocate the burden of proof as the ALJ deems appropriate” in exclusion cases arising under 42 C.F.R. § 1001.101).

Petitioner subsequently filed a written objection that the Briefing Order had ignored Petitioner’s argument “that the Inspector General failed to consider the Covid-19 pandemic” when excluding Petitioner.  P. Obj. to ALJ’s Order at 1.  The ALJ issued a corrective Order recognizing Petitioner’s contention concerning the pandemic, yet also cautioning that the I.G. and ALJ lawfully could consider “only specified mitigating factors as a basis to reduce the period of exclusion to no less than five years,” and listing the specified factors.  Order Sustaining P. Obj. at 2.

The I.G. filed a brief stating that the requirements for Petitioner’s exclusion under section 1128(a)(4) of the Act were met, and also filed five supporting exhibits.  ALJ Decision at 3; I.G. Br. to ALJ (Mar. 30, 2022) at 2.  The I.G. acknowledged Petitioner’s arguments that COVID-19 prolonged the criminal proceedings and that Petitioner had been “effectively” excluded since Petitioner’s arrest and subsequent state license suspension, yet explained that those circumstances are not among the permitted regulatory mitigating

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factors.  I.G. Br. to ALJ at 5.  The I.G. argued that “because Petitioner has not raised any of the regulatory mitigating factors, no mitigating factors should be considered.”  Id. at 5-6.  The I.G. maintained that Petitioner’s seven-year exclusion period fell well within a reasonable range, given the presence of two aggravating factors.  Id. at 6-7.  The I.G. proffered no witness testimony and considered a hearing unnecessary.  Id. at 7-8.

Petitioner failed to file a brief and exhibits by the ordered deadline; therefore, the ALJ ordered Petitioner to show cause why the case should not be dismissed.  ALJ Decision at 3.  Petitioner timely responded to the show cause order, and the ALJ accepted that response as Petitioner’s brief.  Id.  Petitioner requested a hearing because this case purportedly presented an issue of first impression, “which relates to the Covid-19 pandemic that delayed the final disposition” of the criminal case, but offered no documentary evidence (beyond the two exhibits to Petitioner’s original hearing request) or witness testimony to support that position.  ALJ Decision at 3; P. Resp. to Show Cause Order at 1.  The I.G. filed a reply brief maintaining that no hearing was required, because “the delays in Petitioner’s criminal case do not fall within the regulatory factors regarding length of exclusion,” and therefore in-person witness testimony could not supply relevant additional information.  ALJ Decision at 3; I.G. Reply at 2.

On August 10, 2022, the ALJ issued a written decision, deeming a hearing unnecessary and deciding the case on the written record because neither party had offered witness testimony or requested cross-examination.  ALJ Decisionat 3-4.  The ALJ admitted all of the I.G.’s exhibits into the record without objection from Petitioner.  Id. at 4.  The ALJ held that the I.G. properly excluded Petitioner under section 1128(a)(4) of the Act because Petitioner was convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal law.  Id. at 1, 4-5.  The ALJ also concluded that the seven-year exclusion that the I.G. imposed was “not unreasonable,” and fell within a reasonable range given the undisputed existence of two aggravating factors and Petitioner’s failure to establish – or even argue – the existence of any mitigating factor recognized under 42 C.F.R. § 1001.102(c).  Id. at 1, 5-8.  The ALJ determined that the effects of the COVID-19 pandemic are not among the three exclusive mitigating factors listed in 42 C.F.R. § 1001.102(c), and Petitioner’s arguments concerning COVID-19’s effects were “essentially an appeal to equity” that the ALJ and Board cannot consider.  Id. at 7.Finally, the ALJ stated that, “[t]o the extent Petitioner is arguing that I should make the effective date of his exclusion retroactive to the date of his license suspension, many decisions of the DAB hold that I have no authority to do so.”³  Id. at 8.

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Petitioner timely appealed the ALJ’s Decision to the Board by means of a “Notice of Appeal” and an “Appellate Brief” with two exhibits that serves as Petitioner’s request for review (RR).  Petitioner renews the argument that the delays in Petitioner’s criminal case resulting from the COVID-19 pandemic should serve as a mitigating factor to reduce the exclusion period.  See ALJ Decision at 6-9; RR at 2.  Petitioner also newly asserts an argument, not raised before the ALJ, that Petitioner’s cooperation with government officials within the scope of 42 C.F.R. § 1001.102(c)(3) renders the seven-year exclusion period excessive.  RR at 1-2.  Petitioner “concedes that, by law, he carries the burden of presenting evidence of mitigating factors,” and newly proffers “evidence as proof of mitigating factors.”  Id.  Petitioner’s new evidence consists of two affidavits from Petitioner’s former criminal defense attorneys and a transcript of the January 13, 2021 sentencing hearing in Petitioner’s criminal case.  See Exs. A & B to RR.  Petitioner asserts that, “as he has shown mitigating factors in accordance with 42 C.F.R. § 1001.102(c)(3),” the period of exclusion should be reduced from seven years to five years.  RR at 2.

Standard of Review

The Board has “a limited role in reviewing ALJ decisions in exclusion cases.”  Barry D. Garfinkel, M.D., DAB No. 1572, at 4 (1996), aff’d sub nom. Garfinkel v. Shalala, No. 3-96-604 (D. Minn. June 25, 1997).  “Our standard of review of an ALJ decision to uphold the I.G.’s exclusion is set by regulation.”  Singhvi at 3.  “The standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record.”  42 C.F.R. § 1005.21(h).  “The standard of review on a disputed issue of law is whether the initial decision is erroneous.”  Id.; 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 https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/procedures/index.html.

Analysis

Petitioner does not challenge most of the ALJ’s findings and conclusions.  Petitioner raises no objection to the ALJ’s decision to decide the case upon the written record.  Petitioner does not dispute that Petitioner’s conviction requires a mandatory exclusion period of at least five years under section 1128(a)(4) of the Act and 42 C.F.R. § 1001.101(d).  Petitioner also does not dispute that the two aggravating factors in section 1001.102(b)(5) and (b)(9) are established.  Still further, Petitioner does not contest the ALJ’s determination that Petitioner’s exclusion took effect on October 20, 2021 (20 days after the date of the Notice Letter).  Those determinations are free of error in any event, for the reasons the ALJ stated, and we therefore summarily affirm them without further discussion.

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Petitioner challenges only the ALJ’s conclusions concerning mitigating factors and the length of the exclusion period.  Petitioner asserts that a seven-year exclusion period is unreasonable, given the alleged existence of two mitigating factors:  delays in Petitioner’s criminal case resulting from the COVID-19 pandemic; and Petitioner’s cooperation with government officials.  RR at 1-2.  Petitioner accordingly asks that the period of exclusion be “reduced from seven (7) years to five (5),” the mandatory minimum.  Id. at 2.

We conclude that the ALJ Decision rests upon substantial evidence and no legal error.  We address Petitioner’s arguments below, along with Petitioner’s submission of evidence not submitted to the ALJ.

1. The ALJ’s determination that Petitioner’s seven-year exclusion period is not unreasonable is supported by substantial evidence and free of legal error.
   1. Petitioner’s sentence, which included 72 months of incarceration, weighs in favor of extending the mandatory period of exclusion.

The ALJ found Petitioner’s exclusion period “not unreasonable” in light of, among other things, Petitioner’s “incarceration for a substantial term of 72 months (6 years),” which “reflects the seriousness of Petitioner’s criminal conduct.”  ALJ Decision at 1, 7-8 (analyzing the aggravating factor under 42 C.F.R. § 1001.102(b)(5)).

Petitioner identifies no error in the ALJ’s assessment that a six-year incarceration period is significant, and we hold the ALJ’s assessment to be consistent with Board precedent.  “[T]he Board has repeatedly pointed to long periods of incarceration as relevant to determining the reasonableness of an exclusion period.”  Eugene Goldman, M.D., DAB No. 2635, at 6 (2015) (citing cases).  A multi-year prison term, such as Petitioner’s, is a lengthy period of incarceration to which an ALJ may assign substantial weight.  See, e.g., Gracia L. Mayard, M.D., DAB No. 2767, at 1, 4, 8 (2017) (characterizing 54-month prison term as a “substantial” one that “justifies an exclusion considerably longer than the statutory minimum”); Goldman at 1, 3, 4, 5 (concurring with ALJ determination that 51-month incarceration period is “substantial”);Raymond Lamont Shoemaker, DAB No. 2560, at 8 (2014) (concurring with ALJ determination that 55-month imprisonment is “substantial”). 

We therefore determine that the ALJ did not err in concluding that Petitioner’s sentence, which included 72 months of incarceration, justifies a “substantial increase” in the duration of the mandatory exclusion period.  ALJ Decision at 8.

2. The revocation of Petitioner’s license to practice medicine weighs in favor of extending the mandatory period of exclusion.

The ALJ also found Petitioner’s exclusion period “not unreasonable” based, in part, on

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the undisputed adverse action by the Texas Medical Board, which revoked Petitioner’s medical license based on the same set of circumstances that served as the basis for the I.G.’s imposition of the exclusion.  ALJ Decision at 1, 7-8 (analyzing aggravating factor under 42 C.F.R. § 1001.102(b)(9)).   The ALJ noted that the license revocation indicates the Medical Board found Petitioner “untrustworthy to practice medicine in Texas, based on his conviction and incarceration.”  Id. at 8.

Petitioner points to no error in the ALJ’s assessment of the significance of the license revocation, and we perceive no error, as the ALJ’s assessment is consistent with Board precedent.  See Hussein Awada, M.D., DAB No. 2788, at 13 (2017) (stating that “the revocation of Petitioner’s license to practice medicine was itself a severe sanction” and, together with other aggravating factors, “warranted a very substantial extension of the minimum five-year period of exclusion”); see also Mayard at 3, 9 (holding that surrender of petitioner’s medical license was an adverse action constituting “additional evidence of [p]etitioner’s untrustworthiness and the seriousness of his criminal offense”).

We therefore determine that the ALJ did not err in concluding that revocation of Petitioner’s license to practice medicine weighs in favor of extending the mandatory period of exclusion.

3. Petitioner established no cognizable mitigating factor before the ALJ.

Before the ALJ, Petitioner did not argue that “any of the mitigating factors enumerated in 42 C.F.R. § 1001.102(c)” were present, and instead raised only “the impact of the COVID-19 pandemic” as the basis for reducing the length of the exclusion.  ALJ Decision at 7; see also RFH at 3 (contending only that the I.G. failed to consider the pandemic’s effects on Petitioner’s criminal case); P. Resp. to Show Cause Order at 1 (arguing in mitigation only pandemic-caused litigation delays).  The ALJ did not consider effects of the COVID-19 pandemic as a mitigating factor because “[t]he regulations enumerate the only mitigating factors” that may be considered “when evaluating whether an exclusion of more than five years is reasonable.”  Id. at 6.  The ALJ explained that “the COVID-19 pandemic is not among the mitigating factors recognized by 42 C.F.R. § 1001.102(c).”  Id. at 7.  The ALJ further acknowledged having “no authority” to disregard the applicable regulation.  Id.

Petitioner identifies no error in these determinations by the ALJ, and we perceive no error in them.  Petitioner implicitly confirmed that litigation delays due to COVID-19 are not a recognized mitigating factor by describing this case as one of “first impression” and admitting that “no case law, precedent, or statute can be cited to support Petitioner’s argument.”  P. Resp. to Show Cause Order at 2.  As the ALJ correctly recognized, 42 C.F.R. § 1001.102(c) lists the only factors that may be considered mitigating.  See Shaun Thaxter, DAB No. 3053, at 35 (2021) (“The mitigating factors that ALJs and the Board may consider are limited to those listed in the regulation . . . .”); Anthony Joseph

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Moschetto, D.O., DAB No. 3030, at 14 (2021) (emphasizing that “only the mitigating factors in section 1001.102(c) may be considered for possible reduction of an exclusion period longer than the mandatory minimum period”); Awada at 8 (“Only the mitigating factors identified in section 1001.102(c) may be considered and applied to reduce a period of exclusion.”). 

The ALJ correctly acknowledged having “no authority” to consider any factors as mitigating other than those that 42 C.F.R. § 1001.102(c) specifies.  ALJ Decision at 7.  The regulations in 42 C.F.R. Part 1001, including the exclusive mitigating factors in section 1001.102(c), “are applicable to and binding on” the I.G. in imposing exclusions and on the ALJ and this Board in their reviewing roles.  42 C.F.R. § 1001.1(b); see also 42C.F.R. § 1005.4(c)(1) (“The ALJ does not have the authority to . . . [f]ind invalid or refuse to follow Federal statutes or regulations . . . .”); Mayard at 9 (“In deciding whether to reduce an exclusion period exceeding the statutory minimum, we are precluded by the I.G.’s regulations from considering any circumstances other [than] the mitigating factors specified in those regulations.”).

We conclude that the ALJ did not err in deciding that litigation delay resulting from the COVID-19 pandemic is not a recognized mitigating factor for purposes of reducing the length of Petitioner’s exclusion.

4. Petitioner’s new argument concerning the mitigating factor under section 1001.102(c)(3) is not preserved for Board review.

The ALJ concluded both that Petitioner failed to argue the mitigating factor in 42 C.F.R. § 1001.102(c)(3), and that the record evidence did not establish that factor in any event.  The ALJ advised Petitioner by Order that “[t]he regulations permit the IG and the administrative law judge to consider only specified mitigating factors,” and listed them, including section 1001.102(c)(3).  Order Sustaining P. Obj. at 2.  Petitioner’s subsequent briefing nevertheless remained silent as to the cooperation factor and focused solely on the allegedly mitigating circumstance that Petitioner’s criminal case “was delayed by the pandemic.”  P. Resp. to Show Cause Order at 1, 2.  As the ALJ aptly summarized, Petitioner asserted only “that the COVID-19 pandemic renders the length of his exclusion unreasonable” and “did not offer any documentary evidence or witness testimony in support of his position.”  ALJ Decision at 3.  The I.G.’s exhibits included the Notice Letter, which stated generally that Petitioner “cooperated with Federal and/or State Officials.”  I.G. Ex. 1, at 1.  However, the ALJ assessed the Notice Letter to be “devoid of details as to the extent and results of Petitioner’s cooperation,” as it did not specify whether Petitioner’s cooperation produced any convictions, exclusions, investigations, reports, civil money penalties, or assessments to bring it within the scope of section 1001.102(c)(3)(i)-(iii).  I.G. Ex. 1, at 2; ALJ Decision at 6-7.  Furthermore, the I.G. argued to the ALJ that, “because Petitioner has not raised any of the regulatory mitigating factors, no mitigating factors should be considered.”  I.G. Br. to ALJ at 5-6. 

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Accordingly, and based upon the record as a whole, the ALJ was “unable to find that any of the mitigating factors enumerated at 42 C.F.R. § 1001.102(c) are present,” including the mitigating factor concerning fruitful cooperation as specified in section 1001.102(c)(3).  ALJ Decision at 6-7.

Petitioner now argues before the Board that “exclusion of more than five (5) years is unreasonable” because Petitioner’s cooperation constitutes a mitigating factor under 42 C.F.R. § 1001.102(c)(3), RR at 2; however, consistent with governing regulations and the Board’s Guidelines and precedents, we decline to consider Petitioner’s newly raised argument.  “The [Board] will not consider . . . any issue in the briefs that could have been raised before the ALJ but was not.”  42 C.F.R. § 1005.21(e); accord Guidelines, “Completion of the Review Process,” ¶ (a); see also Salman Ali, DPT & Roohi Ali, DPT, DAB No. 3048, at 13 (2021) (rejecting new argument not raised before ALJ, citing section 1005.21(e)), aff’dsub nom. Ali v. U.S. Dep’t of Health & Hum. Servs., No. 21-CV-12365, 2022 WL 3130227 (E.D. Mich. Aug. 4, 2022); Dike H. Ajiri, DAB No. 2821, at 6 (2017) (stating that petitioner’s failure to introduce an issue before the ALJ “precludes him from now arguing the issue before the Board”); Lisa Alice Gantt, DAB No. 2065, at 3 (2007) (“We are not required to review [newly raised] issues since they were not raised before the ALJ, and Petitioner has not shown any reason why they could not have been raised.”). 

Even if Petitioner had raised this issue before the ALJ and thus preserved it for Board review, we would perceive no reversible error in the ALJ’s conclusion that the record evidence did not establish the mitigating factor in 42 C.F.R. § 1001.102(c)(3).  The Notice Letter provided no details confirming whether Petitioner’s cooperation produced any convictions or other results within the scope of section 1001.102(c)(3)(i)-(iii).  “To be a mitigating factor, cooperation with law enforcement must have one of the results listed in the regulation, such as others being convicted or excluded.”  Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 11 (2012), appeal dismissed in part & summarily affirmed in part sub nom. Sheth v. Sebelius, No. 13-cv-0448, 2014 WL 11813597 (D.D.C. Jan. 10, 2014), appeal dismissed sub nom. Sheth v. Burwell, No. 14-5179, 2015 WL 3372286 (D.C. Cir. May 7, 2015) (per curiam).  The Notice Letter also lacked any other details potentially relevant to assessing the weight of this mitigating factor, such as how long Petitioner cooperated, whether Petitioner “put himself at risk,” and whether Petitioner “had come forward voluntarily.”  See Donald A. Burstein, Ph.D., DAB No. 1865, at 8 (2003) (discussing how those facts affected weight of mitigating factor).  Mere proof of some level of cooperation, with unspecified results, is insufficient, for “[i]f the regulation had intended that the act of cooperating with a state or federal official, by itself, would suffice to establish the mitigating factor, the regulation would merely have required cooperation and nothing more.”  Stacey R. Gale, DAB No. 1941, at 7 (2004); see also Rehab. Ctr. at Hollywood Hills, LLC, DAB No. 3001, at 14 n.8 (2020) (discussing Final Rule amending regulations including section 1001.102(c)(3), at 63 Fed. Reg. 46,676 (Sept. 2, 1998), and summarizing, “The I.G. has indicated that mitigation based

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on cooperation contemplates an actual, positive outcome; the act of ‘cooperating’ is not itself sufficient.”). 

We also emphasize that the burden of proof and persuasion concerning any mitigating factors was Petitioner’s, as Petitioner concedes, see RR at 1, yet Petitioner failed to meet that burden regarding the mitigating factor in 42 C.F.R. § 1001.102(c)(3) despite repeated notice and opportunities to do so.  “There are compelling reasons in support of placing the burden on the individual being excluded.”  Gale at 12.  “That individual, not the I.G., has the personal knowledge of the full extent of the cooperation that took place, including the substance of the information and evidence provided, the names and positions of officials who received the information, the dates and times of the contacts, and the content of any agreements of cooperation with prosecutors.”  Id.  Petitioner failed without excuse to argue the applicability of section 1001.102(c)(3) before the ALJ and, therefore, may not raise that issue for the first time before the Board.

5. Petitioner’s period of exclusion is not unreasonable.

The ALJ determined that a seven-year exclusion period is “not unreasonable,” based on the entire administrative record the parties developed, which “establishes the presence of two aggravating factors and does not establish the presence of any mitigating factor defined by the regulations.”  ALJ Decision at 1, 7.  Petitioner disagrees and requests a five-year exclusion period, while identifying no error in the ALJ Decision and conceding that Petitioner alone bore the burden of presenting evidence of any mitigating factors.  RR at 1-2.

We perceive no legal error in the ALJ’s conclusion, based on the record as a whole, that Petitioner’s seven-year period of exclusion is not unreasonable.  The ALJ’s analysis and conclusions were consistent with the ALJ’s role in conducting a de novo review, which the Board has described as follows:

[T]he ALJ is to review the record before [them] to determine what the evidence establishes as to the “demonstrated criteria,” i.e., the aggravating and mitigating factors, rather than review the record as it was when the I.G. issued the exclusion.  The factual determination is thus de novo, in that the appellant has the opportunity to show that the facts are not as they appeared before the I.G.  Moreover, the ALJ does not conduct an appellate-type inquiry into how the I.G. arrived at the particular length but determines whether the evidence presented before the ALJ by the I.G. and Appellant shows that that length is not unreasonable.

Edwin L. Fuentes, DAB No. 2988, at 9 (2020) (emphasis added), aff’d sub nom. Fuentes v. Becerra, No. 4:20-cv-00026, 2021 WL 4341115, at *9 (W.D. Va. Sept. 23, 2021).  The ALJ’s assessment of the reasonableness of Petitioner’s seven-year exclusion period, by

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weighing the aggravating factors and (absence of) mitigating factors, is entirely consistent with Board precedent. 

The recent decision of the Board in Roji Esha, DAB No. 3076 (2022), further illustrates why the seven-year exclusion period in Petitioner’s case is not unreasonable.  Esha, like this case, concerned the I.G.’s imposition of a seven-year exclusion period “based on two proven aggravating factors, in the absence of any cognizable mitigating factor,” and we reinstated the seven-year period as “reasonable” after an ALJ erroneously reduced it.  Id. at 13.  In Esha, as in this case, the two proven aggravating factors were those in 42 C.F.R. § 1001.102(b)(5) and (b)(9).  Id. at 2.  The criminal sentence in Esha that made section 1001.102(b)(5) applicable was for 90 days of incarceration, which was much less severe than Petitioner’s six-year prison sentence in the present case.  See id. at 5.  The underlying adverse action in Esha that made section 1001.102(b)(9) applicable was suspension from participation in a state Medicaid program, which was a lesser adverse action than the revocation of Petitioner’s medical license in the present case.  See id. at 15-16.  On those facts, “and in absence of any mitigating factors,” we held that “the seven-year exclusion period represents a modest increase of two years above the mandatory minimum that is justified by the facts and circumstances . . . and lies within a reasonable range.”  Id. at 28.  A two-year increase to the mandatory minimum exclusion period of five years is far more modest in the present case, in which more egregious facts support the same aggravating factors that were at issue in Esha.  If anything, Esha demonstrates that the length of Petitioner’s exclusion is on the very low end of what is reasonable given the weight of the aggravating factors in Petitioner’s case.

We take notice of the I.G.’s statement in briefing that the I.G. did consider “two aggravating factors and one mitigating factor in determining Appellant’s seven-year period of exclusion.”  I.G. Br. at 4 (emphasis added).  Specifically, the I.G. represents that it “also considered and applied the mitigating factor of cooperation at 42 C.F.R. § 1001.102(c)(3) based on Appellant’s cooperation with State officials in his underlying criminal matter.”  Id. at 5.  Those representations seem a departure from the I.G.’s position before the ALJ that “no mitigating factors should be considered,” see I.G. Br. to ALJ at 5-6, but are consistent with the contents of the Notice Letter in evidence, and we previously have given such representations in briefing some analytical weight.  See Singhvi at 9-10 (recognizing and discussing I.G.’s assertion “in its brief” that the I.G. “considered the mitigating factor of [p]etitioner’s cooperation” when setting the exclusion period, where ALJ had not ruled on existence of mitigating factors).  One could conclude from the I.G.’s representations that the seven-year exclusion period does in fact reflect Petitioner’s cooperation within the scope of section 1001.102(c)(3), even though Petitioner did not prove or even argue that mitigating factor before the ALJ.⁴

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Even assuming that Petitioner’s cooperation resulted in a co-defendant’s conviction or otherwise satisfied the requirements of 42 C.F.R. § 1001.102(c)(3), we would not conclude that this one mitigating factor entirely negates the two established aggravating factors in section 1001.102(b)(5) and (b)(9).  Those aggravating factors still strongly support extending the exclusion period beyond the five-year mandatory minimum.  See, e.g., John (Juan) Urquijo, DAB No. 1735, at 6-7 (2000)(upholding seven-year exclusion in light of two aggravating factors and one mitigating factor, even when incarceration consisted of only one month of imprisonment and 11 months of home detention).  Thus, the one mitigating factor of cooperation (assuming it were established) would not outweigh or entirely offset the two aggravating factors such that a seven-year exclusion period would be unreasonable.

“[T]he overarching issue in determining whether the length of an exclusion is reasonable is whether it is consistent with the statutory purpose of protecting federal health care programs and their beneficiaries.”  Sheth at 11.  Both Petitioner’s substantial criminal sentence and medical license revocation demonstrate Petitioner’s untrustworthiness and support exclusion for a significant period.  See Shoemaker at 8 (“In light of the high degree of untrustworthiness reflected in the length of Petitioner’s [55-month] term of incarceration, a five year extension of the mandatory minimum five-year exclusion based on this factor alone would not be unreasonable.”); see also Awada at 13 (recognizing that “the revocation of [p]etitioner’s license to practice medicine was itself a severe sanction demonstrating, among other things, that [p]etitioner was not trustworthy” and helped to justify “a very substantial extension of the minimum five-year period of exclusion”).  

In our assessment, seven years is not an unreasonable exclusion period even if Petitioner had established the mitigating factor of cooperation under section 1001.102(c)(3).  It is consistent with the need to protect federal health care programs and their beneficiaries by excluding a health care practitioner who admittedly dispensed controlled substances unlawfully, conspired with others to do so, and consequently received a multi-year prison sentence and medical license revocation.  Thus, under the particular facts of this case, we conclude that a seven-year exclusion period is not unreasonable.

6. Neither the ALJ nor the Board can grant Petitioner equitable relief.

The ALJ determined that, “to the extent Petitioner contends that the effects of the COVID-19 pandemic on his case render the imposition of a seven-year exclusion

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fundamentally unfair, this is essentially an appeal to equity.”  ALJ Decision at 7.  The ALJ reasoned that neither ALJs nor the Board can address such an equitable argument because those “adjudicators are bound by all applicable laws and regulations and may not decline to apply a regulation based on equity alone.”  Id.  Petitioner maintains “that Covid-19 should be considered as a factor to reduce his suspension from seven (7) years to five (5) years as Covid-19 affected Petitioner’s case,” but does not otherwise challenge the ALJ’s ruling concerning equitable relief.  RR at 1-2. 

We agree with the ALJ that Petitioner’s argument for a shorter exclusion period, due to the effects of the COVID-19 pandemic, falls within the familiar realm of equity and that ALJs and the Board have no authority to grant equitable relief.  See Yolanda Hamilton, M.D., DAB No. 3061, at 25 (2022) (“To the extent [petitioner’s] statements may be construed as an appeal for the reduction of the exclusion period based on equity reasons, we have no authority to give Petitioner equitable relief.”); Matthew J. Girardy, DMD, DAB No. 2987, at 7 (2020) (“To the extent Petitioner’s request for reduction of the exclusion period may be construed as a request for equitable relief, the Board is bound to follow the exclusion authorities and cannot sit in equity.”).  In resolving this appeal, “we must follow the applicable statute and regulations.”  See Diane Marie Krupka, DAB No. 3020, at 6 (2020).  The Board cannot decline to apply the relevant exclusion authorities based on equity.  See Hamilton at 25; Girardy at 7.

2. Petitioner is not entitled to consideration of the newly submitted evidence.

The ALJ summarized that “Petitioner did not offer any documentary evidence or witness testimony in support of his position” before the ALJ.  ALJ Decision at 3.  The Briefing Order explained how to submit evidence for the ALJ’s consideration, but Petitioner submitted neither documentary exhibits nor written testimony that complied.  See Briefing Order at 7; ALJ Decision at 3-4.

Petitioner now presents to the Board two new exhibits.  The first is the sentencing hearing transcript from Petitioner’s criminal case.  See Ex. A to RR.  The second is a pair of affidavits from attorneys who represented Petitioner in that case.  See Ex. B to RR. 

“The Board has the option under 42 C.F.R. § 1005.21(g) of issuing a decision or remanding a case to the ALJ.”  Gary Alan Katz, R. Ph., DAB No. 1842, at 1 n.1 (2002).  The Board may remand a matter to the ALJ for consideration of evidence newly submitted on appeal only if the party proffering the evidence satisfactorily demonstrates that it “is relevant and material and that there were reasonable grounds for the failure to adduce such evidence at [the ALJ] hearing.”  42 C.F.R. § 1005.21(f).  If a petitioner fails to make that required showing when proffering new exhibits on appeal, the Board may appropriately deem that evidence inadmissible and decline to remand the case.  See, e.g., Mayard at 6-8.

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Petitioner does not demonstrate that the newly proffered evidence is either relevant or material so as to warrant a remand.  To the extent the proffered evidence concerns the delaying effects of the COVID-19 pandemic on Petitioner’s criminal case, the proffered evidence is not relevant or material because, as previously discussed, pandemic-related litigation delays are not a cognizable mitigating factor.  To the extent Petitioner’s proffered evidence concerns the mitigating factor in 42 C.F.R. § 1001.102(c)(3), the evidence has no relevance because, as previously discussed, Petitioner failed without justification to preserve that issue for review.  We recognize that, if timely presented to the ALJ, Petitioner’s newly proffered evidence would have been relevant to establishing the mitigating factor under section 1001.102(c)(3).  See, e.g.,Ex. A to RR at 14, 17 (noting that Petitioner’s cooperation “allowed for the successful prosecution of others involved in this crime” and that Petitioner “did, in fact, cooperate with the government in bringing this conspiracy, these crimes to light and allow for successful prosecution”).  “Ultimately, however, it is Petitioner’s responsibility to present [Petitioner’s] own argument and evidence as to the existence of any mitigating factors established by the regulation,” Gale at 13, and Petitioner failed to do so.

Petitioner also demonstrates no reasonable grounds (in fact, no grounds at all) for failing to present the newly proffered evidence when this case was before the ALJ.  Our own review of the record reveals no such grounds and confirms instead that Petitioner had ample notice to submit relevant evidence for the ALJ’s consideration.  The official letter acknowledging Petitioner’s request for hearing enclosed the Civil Remedies Division Procedures (CRDP), which in bold typeface directed the parties to “become familiar with them and follow them,” and informed the parties in clear detail how and when to submit evidence.  See CRDP at 13-17 (eff. Mar. 28, 2016).  The ALJ’s Briefing Order again plainly directed Petitioner how and when to submit evidence.  ALJ Decision at 3; Briefing Order at 7.  Nevertheless, as the I.G. accurately states, “In his Appeal, [Petitioner] provides evidence for the first time regarding the application of the mitigating factor of cooperation.”  I.G. Br. at 5-6 (emphasis added).

Petitioner was on notice to explain to the Board the reason for not producing the evidence in question before the ALJ.  The Board’s Guidelines, sent to Petitioner along with the ALJ Decision, state the applicable standard concerning evidence not presented to the ALJ.  See Guidelines, “Completion of the Review Process,” at ¶ (b).  The Board’s October 18, 2022 acknowledgment letter also advised Petitioner, “If you submit additional evidence, you should . . . explain why the evidence was not produced in the proceeding before the ALJ.”  Yet Petitioner offers no explanation for not producing this evidence before the ALJ.  See ALJ Decision at 3; Briefing Order at 7.  Petitioner does not complain of unsuccessful attempts to obtain the evidence before the applicable briefing deadline, to extend the deadline, or to request the I.G.’s consent or the ALJ’s permission to file the evidence post-deadline.  No apparent obstacle prevented Petitioner from obtaining and timely filing the evidence, which consists of the transcript of Petitioner’s own January 13, 2021 sentencing hearing and affidavits from Petitioner’s own former

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legal counsel.  Under such circumstances, the Board need not consider the new evidence or remand the case to the ALJ.  See Mayard at 6-8; see also Fuentes at 16 (affirming ALJ decision and declining to consider newly raised argument and newly submitted evidence that petitioner could have presented to ALJ but without explanation did not).  Accordingly, Petitioner’s proposed new exhibits are retained in the administrative record but are not admitted into the record for decision. 

Conclusion

For the reasons stated above, we conclude that the ALJ Decision is supported by substantial evidence and free from legal error.  The ALJ properly determined that Petitioner’s exclusion from all federal healthcare programs for a seven-year period was not unreasonable.  We further conclude that no basis exists for remanding this case to the ALJ for consideration of Petitioner’s newly submitted evidence.  Accordingly, we affirm the ALJ Decision.

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Endnotes

¹ We draw the factual information in this section from the ALJ Decision and the record before the ALJ.  Nothing in this section is intended to replace, modify, or supplement the ALJ’s findings.

² Petitioner’s Request for Hearing consisted of a one-page “Notice of Appeal” and a second, separately paginated document entitled “Appeal,” which contained Petitioner’s substantive argument and conclusion.  This Decision cites to the “Appeal” document, using its pagination, as Petitioner’s Request for Hearing.

³ The Board decisions that the ALJ cited were:  Shaikh M. Hasan, M.D., DAB No. 2648 (2015), aff’d sub nom. Hasan v. Secretary of the Dep’t of Health & Hum. Servs., No. 1:15-CV-4687, ECF No. 27 (E.D.N.Y. July 10, 2017); Kailash C. Singhvi, M.D., DAB No. 2138 (2007), aff’d sub nom. Singhvi v. Inspector Gen., Dep’t of Health & Hum. Servs., No. CV-08-0659 (E.D.N.Y. Sept. 21, 2009); Thomas Edward Musial, DAB No. 1991 (2005); and Douglas Schram, R.Ph., DAB No. 1372 (1992).

⁴ We question whether the I.G. might have been better served by acknowledging before the ALJ the mitigating factor in 42 C.F.R. § 1001.102(c)(3), which the I.G. admittedly considered when establishing Petitioner’s seven-year exclusion.  We recognize that Petitioner bore the burden of proving any mitigating factors, but Petitioner’s exclusion period is not unreasonable even assuming the existence of the section 1001.102(c)(3) mitigating factor, as further discussed below.  Indeed, absent this mitigating factor, we do not find the seven-year exclusion imposed here to be representative of other exclusion cases involving the same or similar aggravating factors.  A significantly longer exclusion period could be upheld in other cases having similar facts supporting the two aggravating factors established here (and no mitigating factors).  See Goldman at 11 (“The Board has made it clear that the 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.”).