Janice Cassandra Wrenn, DAB No. 3118 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Janice Cassandra Wrenn (Petitioner) appeals the June 22, 2023 decision of an Administrative Law Judge (ALJ) affirming the Inspector General’s (I.G.’s) exclusion of Petitioner from participation in all federal health care programs for 12 years under section 1128(a)(1) of the Social Security Act (Act) based on Petitioner’s criminal conviction in connection with services billed to Oklahoma’s Medicaid program.  Janice Cassandra Wrenn, DAB CR6305 (2023) (ALJ Decision).  Petitioner chiefly argues that the exclusion and the increase in the exclusion period above the five-year minimum should be reversed because the criminal conviction was incorrect and is under appeal.  As explained below, such collateral attacks on the validity of the criminal conviction underlying the exclusion, and Petitioner’s other arguments, provide no bases to reverse the exclusion or its length, and we affirm the ALJ Decision.

Legal Background

Section 1128(a) of the Act mandates the exclusion of individuals or entities who have been convicted of certain types of criminal offenses from participating in Medicare, Medicaid, and other federal health programs.  As relevant here, section 1128(a)(1), titled “Conviction of program-related crimes,” requires the exclusion of “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII [Medicare] or under any State health care program.”  Act § 1128(a)(1) (42 U.S.C. § 1320a–7(a)(1)); accord 42 C.F.R. § 1001.101(a).¹  The term “State health care program” is defined in section 1128(h)(1) of the Act to include “a State plan approved under title XIX” of the Act, that is, a state’s federally approved Medicaid program.

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For the purpose of section 1128(a), “Convicted means that –”

(a) A judgment of conviction has been entered against an individual or entity by a Federal, State or local court, regardless of whether:

(1) There is a post-trial motion or an appeal pending, or
(2) The judgment of conviction or other record relating to the criminal conduct has been expunged or otherwise removed; . . . .

42 C.F.R. § 1001.2; accord Act § 1128(i), “ Convicted Defined” (individual or entity is considered “convicted” of a criminal offense “when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged” or “when there has been a finding of guilt against the individual or entity by a Federal, State, or local court”). 

The mandatory minimum period of an exclusion imposed under section 1128(a) is five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  The I.G. may extend the exclusion period beyond the statutory minimum in the presence of any of nine aggravating factors provided in the regulations including, as relevant here:

(1) The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more.  (The entire amount of financial loss to such government agencies or programs or to other entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made);

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

42 C.F.R. § 1001.102(b)(1), (2); id.§ 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion.”).  An exclusion period that has been extended beyond the five-year minimum based on aggravating factors may be reduced by application of one or more of three mitigating factors also specified in the regulation, but not to below the five-year minimum.  Id. § 1001.102(c).

If the I.G. determines exclusion is warranted, the I.G. will send written notice to the excluded individual or entity identifying, among other things, the basis for the exclusion, the length of the exclusion, and the factors, if any, that the I.G. considered in determining the length of the exclusion period.  42 C.F.R. § 1001.2002(a), (c).

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An excluded individual may request a hearing before an ALJ, but only on the issues of: (i) whether the I.G. had a basis for the exclusion; and (ii) whether an exclusion longer than the required minimum period is “unreasonable.”  42 C.F.R. §§ 1001.2007(a)(1), 1005.2(a).  When, as here, the exclusion is based on the existence of a criminal conviction (or a civil judgment imposing liability by Federal, State or local court, or “other prior determination where the facts were adjudicated and a final decision was made”), the basis for the conviction, civil judgment, or determination “is not reviewable” and the individual “may not collaterally attack it either on substantive or procedural grounds in this appeal.”  Id. § 1001.2007(d).

In an exclusion case under 42 C.F.R. § 1001.101(a), “the ALJ will allocate the burden of proof as the ALJ deems appropriate,” and “[t]he burden of persuasion will be judged by a preponderance of the evidence.”  Id. § 1005.15(c), (d).

The ALJ issues an “initial decision” based on the record developed before the ALJ.  42 C.F.R. § 1005.20(a).  A party dissatisfied with the ALJ’s “initial decision” may appeal that decision to the Board.  Id. § 1005.21(a).  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.”  Id. § 1005.21(e).

Case Background²

On December 10, 2021, a jury in the District Court of Oklahoma County in the state of Oklahoma found Petitioner guilty of four felony counts (Counts 1, 2, 4, 5) and one misdemeanor count (Count 6) of “Medicaid Fraud” in violation of Oklahoma law.  I.G. Ex. 2 (“Information”); I.G. Ex. 3 (“Judgment and Sentence”).  The counts were from an “Information” the Oklahoma Attorney General filed on June 20, 2016.  I.G. Ex. 2.  The jury did not find Petitioner guilty of one felony count of “Conspiracy to Commit Medicaid Fraud” (Count 3).  Id.; I.G. Ex. 3; see also P. Ex. 1, at 15 (court’s statement at sentencing hearing that “the jury found Ms. Wrenn guilty of Counts 1, 2, 4, 5 and 6”).³

The parties do not dispute the ALJ’s description of the five counts the jury convicted Petitioner of:

Petitioner and her co-defendants willfully and knowingly caused false claims for payment to be submitted to Oklahoma’s Medicaid program from

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April 24 to 30, 2012, December 18 to 26, 2012, and May 2013 to January 2015. [I.G. Ex. 2]at 1.  Petitioner and her co-defendants also willfully and knowingly solicited a pecuniary benefit in connection with services claimed to be payable by the Oklahoma Medicaid program between June 6, 2013 and August 20, 2014, [and] failed to maintain records for six years after having received payment for a service from the Oklahoma Medicaid program from June 10, 2009 to January 30, 2013. . . .  Id. at 1-2.

ALJ Decision at 4; see Petitioner’s Brief (P. Br.) at 3.⁴

The charges concerned Petitioner’s receipt of Medicaid payments for therapy services rendered by her therapy and counseling companies after the Oklahoma Health Care Authority (OHCA), Oklahoma’s state Medicaid agency, had terminated their contracts with OHCA “based on [OHCA’s] finding of [a] ‘credible allegation of fraud’”; payment was made because the services were claimed as having been provided by a company operated by one of Petitioner’s co-defendants.  I.G. Ex. 2; I.G. Ex. 3; P. Ex. 4 (OHCA letter, May 16, 2013); P. Ex. 1, at 15.   

On March 31, 2022, the state court imposed judgment and ordered Petitioner to pay restitution of $393,934 to the Oklahoma Attorney General, and, though not reported in the ALJ Decision, total fines for the five counts of $281,273.  I.G. Ex. 3, at 4; P. Ex. 1, at 4.

The I.G., by letter dated September 30, 2022, notified Petitioner of the exclusion for a minimum of 12 years under section 1128(a)(1) of the Act “due to your conviction (as defined in section 1128(i) of the Act), in the District Court of Oklahoma County, the State of Oklahoma, of a criminal offense related to the delivery of an item or service under Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services under any such program.”  I.G. Ex. 1, at 1.  The I.G. extended the period of exclusion beyond the statutory five-year minimum based on two “aggravating circumstance(s),” that “[t]he acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more . . . [t]he court ordered you to pay approximately $393,900 in restitution” and “were committed over a period of one year or more. . . . from about June 2009 to about January 2015.”  Id. at 1-2; see 42 C.F.R. § 1001.102(b)(1), (2).  Petitioner timely requested an ALJ hearing.  ALJ Decision at 1.

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ALJ Decision

The ALJ admitted all of the parties’ exhibits (P. Exs. 1-12, I.G. Exs. 1-3) into the record, overruling the I.G.’s objections to 10 of the Petitioner’s exhibits as irrelevant or incomplete.  ALJ Decision at 2.  The ALJ decided the case on the written record because “[n]either party submitted the written direct testimony of proposed witnesses the opposing party could seek to cross-examine,” after the ALJ advised the parties that he would hold an in‑person hearing only if a party submitted written direct testimony from a witness and the opposing party asked to cross-examine that witness, or if a party identified an adverse witness and made a valid subpoena request.  Id. (citing Order Summarizing Pre-Hr’g Conference and Setting Briefing Schedule at 5 (Dec. 12, 2022)).

The ALJ first concluded that “[t]here is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act” because “Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act” that “is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1).”  ALJ Decision at 4-5 (bold omitted).  The ALJ found that the jury “found Petitioner guilty of each count in the information against her” and that the jury “found Petitioner guilty of five counts of Medicaid fraud and one count of conspiracy to commit Medicaid fraud.”  Id. at 4, 5.

Petitioner’s offenses were related to the delivery of an item or service under a covered health care program, the ALJ concluded, because the “offenses of conviction on their face demonstrate the nexus between Petitioner’s criminal conduct and a covered healthcare program sufficient to warrant exclusion.”  ALJ Decision at 5 (citing Quayum v. U.S. Dep’t of Health & Human Servs.,34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); Friedman v. Sebelius,686 F.3d 813, 820 (D.C. Cir. 2012); and Berton Siegel, D.O.,DAB No. 1467, at 5 (1994) (holding that the statute “requires some ‘nexus’ or ‘common sense connection’ between the offense of which a petitioner was convicted and the delivery of an item or service under a covered program”)).  The ALJ noted that the conviction was for charges including that “Petitioner ‘willfully and knowingly’ caused false claims to be submitted to the Oklahoma Medicaid program, solicited a pecuniary benefit ‘in connection with services claimed to be payable by the Oklahoma Medicaid Program,’” and “failed to maintain records after receiving payment from the state’s Medicaid program,” which showed “an obvious connection between Petitioner’s offenses of conviction and the delivery of an item or service under a covered program.”  Id. (quoting I.G. Ex. 2, at 1-2).

The ALJ found the “relatedness” between Petitioner’s criminal offenses and the delivery of an item or service under a covered health care program “reinforced by the fact that the State Court ordered her to pay restitution to the Oklahoma Attorney General to recover the losses she caused to the state’s Medicaid program,” because “[p]ayment of restitution to a covered healthcare program for losses incurred because of criminal conduct

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demonstrates the nexus between the offense of conviction and the delivery of an item or service to that program.”  ALJ Decision at 5-6 (citing Summit S. Shah, M.D., DAB No. 2836, at 8-9 (2017) and Siegel at 6-7).

The ALJ next found Petitioner’s arguments and exhibits “in large part irrelevant” because they were precluded by the Act and regulations and sought relief an ALJ cannot provide:  that Petitioner’s conviction was invalid and was being appealed, and that her exclusion was unconstitutional.  ALJ Decision at 5 n.2 (citing Act § 1128; 42 C.F.R. § 1001.2007(d); and US Ultrasound,DAB No. 2302, at 8 (2010)).

Finally, the ALJ held that the I.G. had established the two aggravating factors identified in the exclusion notice – the period of time over which the criminal conduct occurred (“almost four years” for one count of Medicaid fraud), and the $393,934 restitution amount (“nearly $400,000, or over seven times greater than the regulatory minimum of $50,000,” which “may be used to demonstrate program loss”) – while “Petitioner did not identify a mitigating factor recognized by the regulations to reduce it.”  ALJ Decision at 6 (citing Shah at 8), 7-8.  The ALJ thus concluded that “[a] 12-year exclusion period is not unreasonable.”  Id. at 7 (bold omitted).

Petitioner timely appealed the ALJ Decision.

Standard of Review

The Board reviews a disputed issue of fact as to whether the ALJ “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 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)).  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

Most of Petitioner’s arguments against the exclusion and its length comprise claims that the criminal conviction was improper, incorrect, and at odds with the evidence.  Petitioner, for example, “asserts her innocence,” contends that the state’s “allegations [in the criminal information] are untrue and inaccurate,” that “there may have been a flaw or error in the jury’s deliberations,” and “maintains that she did not engage in any wrongdoing and disputes the validity of the allegations leveled against her in the criminal case.”  P. Br. at 5, 6, 9, 11, 12.  Petitioner also notes having appealed the criminal conviction.  Id. at 11.Finally, Petitioner argues that the exclusion should be reversed or its length reduced because the ALJ incorrectly found that Petitioner had been convicted

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of all six counts in the Information, whereas the record shows that the jury convicted her of only the five counts of Medicaid Fraud (Counts 1, 2, 4, 5, 6) but did not convict her of the one count of Conspiracy to Commit Medicaid Fraud (Count 3) presented in the Information.  Id. at 23; ALJ Decision at 4, 6; I.G. Exs. 2, 3.  None of these arguments provide grounds to reverse or lessen the exclusion period of 12 years.

1. The ALJ’s conclusion that there is a basis to exclude Petitioner pursuant to section 1128(a)(1) of the Act is supported by substantial evidence and free of legal error.

Section 1128(a)(1) of the Act requires the exclusion of any individual convicted of an offense “related to the delivery of an item or service under” Medicare or a state health care program.  The Board “has repeatedly held that the phrase ‘related to’ within the context of section 1128(a)(1) requires only that a common-sense nexus exists between the offense and the delivery of a health care item or service under the state healthcare program.”  Shah at 6 (citing James O. Boothe, DAB No. 2530, at 3 (2013); James Randall Benham, DAB No. 2042, at 5 (2006)); see also Scott D. Augustine, DAB No. 2043, at 5-6 (2006) (explaining based on the plain meaning of “related” that an offense is “related to” an item or service under a covered program if there is a common-sense connection between the offense and the delivery of an item or service under the program) (collecting cases); ALJ Decision at 5 (“In order to be ‘related to’ the delivery of an item or service . . . only a nexus or common-sense connection is required.”).  When determining whether the requisite nexus exists, an ALJ may consider “evidence as to the nature of an offense,” including the “facts upon which the conviction was predicated.”  Shah at 7 (citations omitted).  

We agree with the ALJ that “the criminal conduct resulting in [Petitioner’s] conviction clearly evidences the ‘common sense’ connection required by section 1128(a)(1) of the Act.”  ALJ Decision at 5.  A jury convicted Petitioner of five counts of state offenses labeled “Medicaid Fraud.”  Id; I.G. Ex. 2; I.G. Ex. 3.  Those counts describe Petitioner “willfully and knowingly causing to be submitted to the Oklahoma Medicaid Program through its fiscal agent, false claims for payment . . . for Medicaid services falsely claimed” and “knowingly soliciting a pecuniary benefit in connection with services claimed to be payable by the Oklahoma Medicaid Program.”  I.G. Ex. 2, at 1; I.G. Ex. 3, at 1.  Conviction for Medicaid fraud in connection with claims for Medicaid services is reasonably a conviction of a “criminal offense related to the delivery of an item or service under title XVIII [Medicare] or under any State health care program,” justifying an exclusion under section 1128(a)(1) of the Act.  See, e.g., Joann Fletcher Cash, DAB No. 1725 (2000) (upholding exclusion under section 1128(a)(1) based on conviction for Medicaid fraud); Matthew J. Girardy, DMD, DAB No. 2987, at 2, 5 (2020) (“there is an ‘obvious nexus’ between the offense for which Petitioner was convicted and the delivery of an item or service under the New Jersey Medicaid program” where Petitioner “did purposely obtain approximately $385,467.00 from the [Medicaid program] by creating or

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reinforcing the false impression that dental services were provided to Medicaid beneficiaries as or to the extent claimed”) (internal citations omitted).  As the ALJ also found, the connection or relatedness to a covered program is reinforced by the restitution Petitioner was ordered to pay being for the benefit of the state’s Medicaid program.  ALJ Decision at 5-6; see P. Ex. 1, at 15-16 (court’s statements at sentencing that restitution was ordered for the benefit of OHCA).

The ALJ’s conclusions that there is a basis to exclude Petitioner under section 1128(a)(1) of the Act based on Petitioner’s conviction for Medicaid fraud, and that section 1128 requires that Petitioner be excluded for a minimum of five years, are thus supported by substantial evidence and free of legal error.   

2. Petitioner’s arguments identify no grounds to reverse the ALJ’s conclusion that there is a basis to exclude Petitioner pursuant to section 1128(a)(1) of the Act.

As noted, most of Petitioner arguments reflect Petitioner’s conviction that “the allegations made by the State in the criminal case . . . are untrue and inaccurate” and that “she should not have been found guilty of the aforementioned criminal offense[s].”  P. Br. at 4, 5.  Petitioner “asserts her innocence,” “maintains that she did not engage in any wrongdoing,” and “disputes the validity of the allegations leveled against her in the criminal case.”  Id. at 6, 11, 16.  Among other criticisms, Petitioner “contends that the lack of evidence, and questionable investigative practices cast doubt on the veracity and credibility of the case against her” and that the jury’s failure to convict her of the count of Conspiracy to Commit Medicaid Fraud (Count 3) “raises an inconsistency” in the jury’s guilty verdicts on the five counts of Medicaid Fraud (Counts 1, 2, 4, 5, 6).  Id. at 12, 16.⁵

As the ALJ correctly found, the regulations forbid such attacks on the validity of a petitioner’s criminal convictions in the ALJ hearing and Board review.  ALJ Decision at 3, 5 n.2; 42 C.F.R. § 1001.2007(d) (providing that the basis for the conviction underlying the exclusion “is not reviewable,” and the individual being excluded “may not collaterally attack it either on substantive or procedural grounds in this appeal”); see Legal Dictionary, law.com, (last visited Oct. 19, 2023), https://dictionary.law.com/Default.aspx?selected=229 (defining “collateral attack” as “a legal action to challenge a ruling in another case”).  This regulation “prohibit[s] . . . any attempt to defend against the exclusion derived from the conviction by denying or minimizing the crime itself”; its purpose “is to prevent excluded individuals from

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relitigating the validity of their convictions.”  Mohamad Ahmad Bazzi, DAB No. 2917, at 9 (2018); Cash at 6 (citing Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994)).  The regulation “recognizes that it is ‘the fact of the conviction which causes the exclusion.  The law does not permit the Secretary to look behind the conviction.’”  Michael D. Miran, Esta Miran, & Michael D. Miran, Ph.D. Psychologist P.C., DAB No. 2469, at 4 (2012) (quoting Peter J. Edmonson, DAB No. 1330, at 4 (1992)); see also Richard E. Bohner, DAB No. 2638, at 14 (2015) (“Petitioner’s attempts to downplay the underlying factual basis . . . of the indictment amount to a prohibited collateral attack on his conviction.”), aff’d, Bohner v. Burwell, No. 15-4088, 2016 WL 8716339 (E.D. Pa. Dec. 2, 2016).

The Board has thus “held that an ALJ is not required to determine the ‘guilt or innocence’ of a party as to the conduct on which the state action is based before affirming a petitioner’s exclusion by the I.G.”  Henry L. Gupton, DAB No. 2058, at 12 (2007), aff’d, Gupton v. Leavitt, 575 F.Supp.2d 874 (E.D. Tenn. 2008) (quoting Carolyn Westin, DAB No. 1381 (1993), aff’d, Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994) (quoting Behrooz Bassim, M.D., DAB 1333 at 9-10 (1992))).  That conclusion, we have observed, “is consistent with the legislative history and purpose of those sections of the Act authorizing derivative exclusions.  There would be no point in relying on these actions if they could be reopened and relitigated during the exclusion proceedings.”  Id. at 12-13.  We thus held there that “Petitioner’s . . . claim[s] that she is innocent of any wrongdoing unless the I.G[.] proves her guilty, are irrelevant,” as “[i]t is the fact of the conviction which causes the exclusion” and “[t]he law does not permit the Secretary to look behind the conviction.” Id. at 13 (underlining omitted).  “Instead, Congress intended the Secretary to exclude potentially untrustworthy individuals or entities based on criminal convictions.  This provides protection for federally funded programs and their beneficiaries and recipients, without expending program resources to duplicate existing criminal processes.”  Id. (quoting Edmonson at 4).

Petitioner’s arguments that the jury wrongly convicted her, that the evidence does not support the convictions, and that their acquittal of Petitioner on the one conspiracy count “raises an inconsistency in the jury’s verdict,” are all clear examples of collateral attacks on the convictions that the regulation forbids.  P. Br. at 12.  To question or doubt the jury’s decisions is thus an exercise in which the ALJ and the Board may not engage.  Petitioner’s acquittal of the conspiracy count does not affect or diminish the legal import of the conviction on the five counts of Medicaid Fraud, for which section 1128(a)(1) of the Act requires Petitioner’s exclusion.

Petitioner also reports having appealed the criminal convictions underlying the exclusion, and argues “petitioner’s motion to stay restitution and fines at the appellate court was apparently overlooked by the ALJ.”  P. Br. at 13.  The exclusion statute specifies that appeals of criminal convictions do not stay or prevent exclusions.  Act § 1128(i) (“[f]or purposes of subsections (a) and (b) [of section 1128], an individual or entity is considered

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to have been ‘convicted’ of a criminal offense— (1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending”) (emphasis added).⁶  Petitioner also cites no legal authority for the contention that “the presumption of innocence continues to apply until the appeals court reaches a final decision” and that “the petitioner is presumed innocent until proven guilty by the appeals court.”  P. Br. at 11.  We note that the Supreme Court, in finding defendants whose convictions were reversed entitled to refunds of restitution, fees, and costs, stated that that the presumption of their innocence was restored “once those convictions were erased,” which Petitioner has not shown happened here.  Nelson v. Colorado, 581 U.S. 128, 135 (2017).

Thus, the sincerity of Petitioner’s belief that a review of the evidence in the criminal case would indicate that the convictions were in error and should be reversed on appeal does not authorize the ALJ or the Board to decline to follow the law and regulations requiring exclusion for covered criminal convictions regardless of whether they are being appealed, and forbidding collateral attacks on those convictions.  For this reason, we agree with the ALJ that Petitioner’s argument and exhibits “are in large part irrelevant” to the extent they address the merits of the jury’s verdicts.  ALJ Decision at 5 n.2.

Petitioner cites several court cases in support of the notion that the ALJ may, or must, evaluate the evidence in Petitioner’s criminal case.  P. Br. at 9-11, 13.  None of those cases involve section 1128 of the Act or exclusions thereunder, and none hold that an ALJ hearing an appeal of an exclusion under section 1128(a) may ignore the regulation forbidding collateral attacks on the criminal conviction underlying the exclusion, or section 1128’s definition of “convicted” to include convictions being appealed. 

Petitioner’s descriptions of these court cases are also not always accurate.⁷  In United States ex rel. Vavra v. Kellogg Brown & Root Inc.,727 F.3d 343 (5th Cir. 2013), for example, the court of appeals did not “emphasize[] that a mere criminal conviction is not always enough to justify exclusion,” and nothing in that decision indicates that “the OIG

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fails to demonstrate a specific and substantiated basis for [Petitioner’s] exclusion,” as  Petitioner contends.  P. Br. at 9-10.  The court there, in a qui tam suit in which the United States intervened, held that the defendant contractor was vicariously liable under the federal Anti-Kickback Act, 41 U.S.C. §§ 51–58, for the actions of its employee who accepted kickbacks in violation of that law.  Petitioner points to nothing specific in that decision, and we see nothing, that could be construed as suggesting that an ALJ in an exclusion under section 1128 may ignore the fact that the excluded individual has been convicted of an offense requiring exclusion.  Petitioner provided an apparently incorrect and invalid citation for United States ex rel. Singh v. Bradford Regional Medical Center (“671 F. Supp. 2d 756 (W.D. Pa. 2009)”) which, Petitioner claims, holds that “a mere criminal conviction is not always enough to justify exclusion.”  P. Br. at 9.  A 2010 case with that name from the same court is, however, like Vavra, a qui tam action based on kickbacks and false claims in violation of several federal statutes including the criminal false claims provisions of section 1128B of the Act that are not at issue here.  United States ex rel. Singh v. Bradford Reg’l Med. Ctr., 752 F. Supp.2d 602 (W.D. Pa. 2010).  Again, that case does not address or concern the limits that the statute and regulations impose on an ALJ’s authority in reviewing exclusions.

Similarly, court decisions that Petitioner cites as holding that “the sufficiency of the evidence is a matter of law” and “that all relevant evidence, arguments, and legal principles should be considered in determining whether the evidence is sufficient to support the imposed exclusion,” P. Br. at 10, concern the review of evidence by the criminal court that convicted the defendant or by an appellate court hearing defendant’s appeal of the conviction.  See, e.g., Smith v. State, 509 P.2d 1391 (Okla. Crim. App. 1973); Hanes v. State, 973 P.2d 330 (Okla. Crim. App. 1998); Johnson v State, 15 S.W. 647 (Tex. App. 1890).  Accordingly, none of the cases Petitioner cites provides any basis to reverse the ALJ Decision.

Petitioner presents other arguments that, while not necessarily attacks on the validity of her criminal conviction for Medicaid Fraud, provide no basis to reverse the exclusion and essentially ask the Board and the ALJ to ignore the fact of the criminal conviction for Medicaid Fraud.  Petitioner argues that the I.G. “lacks the legal grounds to exclude individuals like the Petitioner who is not a Medicare or Medicaid provider” and “was not a Medicaid provider after May 16, 2013,” but, again, does not cite legal authority for the contention that “[t]he OIG.’s authority to exclude individuals from federal healthcare programs, such as Medicare, is specifically limited to those who qualify as ‘providers’ under the relevant statutes and regulations.”  P. Br. at 8-9, 20.  Section 1128(a) of the Act requires the exclusion from participation in federal health care programs of “[a]ny individual or entity” convicted of the specified offenses, with no limitation to Medicaid or Medicare providers.  Act § 1128(a)(1)-(4).  Nor does non-participation in Medicaid or Medicare preclude a nexus between such an “individual[’s] or entity[’s]” criminal offenses of conviction and “the delivery of healthcare items or services under Medicaid,”

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as Petitioner argues; as discussed above, Petitioner’s convictions for “Medicaid Fraud” involving claims for Medicaid services readily establish the nexus here.  P. Br. at 14.

Finally, Petitioner argues the ALJ denied due process by declining to hold the hearing Petitioner requested.  P. Br. at 21-22.  As the ALJ states, however, the ALJ advised the parties that an in-person hearing would be convened “only if a party submitted written direct testimony from a witness and the opposing party asked to cross-examine that witness, or if a party identified an adverse witness and made a valid subpoena request consistent with the requirements found at 42 C.F.R. § 1005.9,” and “[n]either party submitted the written direct testimony of proposed witnesses the opposing party could seek to cross-examine.”  ALJ Decision at 2 (citing Order Summarizing Pre-Hr’g Conference and Setting Briefing Schedule at 5 (Dec. 12, 2022)); see also Civil Remedies Division (CRD) Procedures (provided with ALJ letter acknowledging receipt of request for ALJ hearing) at 18-19 (“If the ALJ orders written direct testimony, then an oral hearing would be convened only for the purposes of permitting cross-examination and re-direct testimony of the witnesses.”). 

The ALJ accurately described the proceedings below; neither party offered proposed witnesses for examination.  While Petitioner’s first brief to the ALJ stated that Petitioner “wishes to identify four witnesses through a subpoena request whose testimonies and documents will shed more light,” P. Informal Br. to ALJ at 8, and Petitioner filed excerpts of testimony from the criminal proceedings, Petitioner did not identify any witnesses, and did not “move for issuance of a subpoena requiring a witness to appear and testify, as provided by regulation,” as provided in the CRD Procedures.  CRD Procedures at 17 (citing 42 C.F.R. § 1005.9).  The I.G. also did not seek to cross examine any of the individuals whose testimony is contained in the transcript excerpts Petitioner submitted, whom Petitioner did not identify as witnesses and whose testimony was offered in support of Petitioner’s collateral attack on the validity of the criminal convictions and is irrelevant in these proceedings.  Petitioner was thus afforded the opportunity to present witnesses and request subpoenas but did not do so, and was thus not denied due process.  See Nancy L. Clark, DAB No. 2989, at 6 (2020) (citing James Brian Joyner, M.D., DAB No. 2902, at 11 (2018)) (noting that the Board has “held that ‘where neither party seeks to cross-examine any witness for whom the opposing party has submitted written direct testimony, the ALJ’s decision to forego an in-person hearing does not generally pose a due process concern’”).  We find no error in the ALJ’s issuance of a decision based on the written record without holding an in-person hearing after the ALJ provided clear notice that he would do so if a hearing is not necessary.

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3. There are two aggravating factors under section 1001.102(b), and no mitigating factors under section 1001.102(c).

Petitioner does not dispute the presence of the two aggravating factors the I.G. applied in extending the exclusion and that the ALJ affirmed: financial loss to a government agency or program greater than $50,000, and the acts resulting in conviction (or similar acts) being committed over a period of one year or more.  ALJ Decision at 6; 42 C.F.R. § 1001.102(b)(1), (2).

The ALJ did not err in determining that those aggravating factors apply.  The Oklahoma state court ordered Petitioner to pay $393,934 in restitution for Petitioner’s conviction of five counts of Medicaid Fraud and, as the ALJ noted, the Board “has recognized that restitution may be used to demonstrate program loss.”  ALJ Decision at 6 (citing Shah at 8); see, e.g., Craig Richard Wilder, M.D., DAB No. 2416, at 9 (2011) (noting that court-ordered restitution has “long been considered a reasonable measure” of financial loss attributable to a criminal offense); Laura Leyva, DAB No. 2704, at 9 (2016), aff’d, Leyva v. Price, No. 8:16-CV-1986, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017) (sentencing court’s restitution order was proof of program loss equal to or exceeding the threshold for applying the aggravating factor); I.G. Ex. 3, at 4; see also P. Ex. 1, at 15 (court’s remark at sentencing hearing that the OHCA is the victim to which restitution is paid).  Regarding the other aggravating factor, the conduct taking place over at least a year, the Information presenting the counts of Medicaid Fraud on which the jury convicted Petitioner states that the conduct occurred during periods that include May 29, 2013 – January 13, 2015 (Count 1), December 18, 2012 – December 26, 2012 (Count 4), and June 10, 2009 – January 30, 2013 (Count 5).  I.G. Ex. 2.  There was thus no error in the ALJ’s finding that the conduct lasted almost four years.  ALJ Decision at 6, 7.

Petitioner also does not allege the presence of any of the three mitigating factors that the regulations provide may be used to shorten an extended exclusion, nor dispute the ALJ’s finding that Petitioner “did not identify a mitigating factor recognized by the regulations.”  ALJ Decision at 7.⁸  While Petitioner argues that the exclusion’s length “is unreasonable in light of the mitigating factors,” what Petitioner cites as mitigating

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factors, which we mention further in addressing the length of the exclusion, are not among the three mitigating factors the regulations permit and some are the criticisms of the criminal conviction that we discussed above and that the regulations bar as collateral attacks.  P. Br. at 17.

We thus adopt the ALJ’s determinations that there are two aggravating factors and no mitigating factors, justifying the I.G.’s exclusion of Petitioner for a period longer than five years. 

4. The ALJ’s determination that a 12-year exclusion period is not unreasonable is supported by substantial evidence and free of legal error

The regulations afford an excluded individual a hearing on the issue of whether an exclusion longer than the required minimum period “is unreasonable.”  42 C.F.R. § 1001.2007(a)(1), (2); ALJ Decision at 7 (“I must uphold the IG’s determination as to the length of exclusion if it is not unreasonable.”).  In determining whether a period of exclusion is unreasonable, or not within a reasonable range, “the ALJ may not substitute his judgment for that of the I.G. or determine what period of exclusion would be ‘better.’”  Wilder at 8 (quoting Paul D. Goldenheim, M.D., et al., DAB No. 2268, at 21 (2009)).  The preamble to the final rule establishing the exclusion regulations indicates that 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” in implementing exclusions.  57 Fed. Reg. 3,298, 3,321 (Jan. 29, 1992).  The preamble further states, “So long as the amount of the time chosen by the [I.G.] is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it[.]”  Id.  The Board has thus held that “[d]eference to the I.G.’s determination is thus built into the ALJ’s de novo assessment of whether the lengthened exclusion period imposed by the I.G. was not within a reasonable range.”  Roji Esha, DAB No. 3076, at 26 (2022) (internal quotation marks omitted).  We find no error in the ALJ’s conclusion that the 12-year exclusion imposed on Petitioner was within a reasonable range and not unreasonable.

The ALJ correctly stated that “the only question is whether the 12-year period of exclusion selected by the IG is unreasonable,” and concluded “I cannot say it is,” based on the existence of the two aggravating factors and the absence of any of the mitigating factors that the regulations permit the ALJ to consider.  ALJ Decision at 7.  The ALJ addressed the financial loss factor at section 1001.102(b)(l) of the regulations, and found that Petitioner’s “criminal conduct resulted in a substantial loss to the Medicare program – nearly $400,000, or over seven times greater than the regulatory minimum of $50,000 in program loss required to be considered an aggravating factor,” which warranted giving that factor “significant weight” in assessing whether the exclusion period was unreasonable.  Id. at 7-8.  The ALJ’s conclusions are consistent with the record and the principle that “it is entirely reasonable to consider a program loss amount substantially larger than” the minimum regulatory threshold in program loss required to be considered

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an aggravating factor, currently $50,000, and to accord “significant weight” to such substantially larger amounts of program loss.  Leyva at 9-10; ALJ Decision at 7-8.  Regarding the duration factor, the ALJ found that “Count 5 identifies criminal conduct that persisted for almost four years.”  ALJ Decision at 6.

As circumstances that precluded finding the exclusion period unreasonable, the ALJ also cited Petitioner having “conspired with her co-defendants to defraud a State Medicaid program intended to provide a safety net to indigent (and therefore vulnerable) patients” and having “netted . . . a substantial amount in ill-gotten gain,” which shows “willingness to defraud a safety-net program” and “strongly suggests she poses a serious threat to its integrity.”  Id. at 8.

Petitioner argues that the 12-year exclusion period “appears disproportionately severe and potentially unreasonable” and “questions whether the evidence presented justifies such an extended exclusion period and whether there were any mitigating circumstances that should have been considered.”  P. Br. at 18.  Petitioner primarily argues, however, that the 12-year exclusion period is unreasonable because the guilty verdicts were erroneous and have been appealed.  See, e.g., id. at 20-21 (citing alleged aspects and facts of her conduct and the jury’s verdicts that Petitioner says “challenges the premise of her involvement in Medicaid fraud” and “raise doubts about the validity of the remaining charges and the overall case against her,” and arguing that “[t]he fact that the criminal conviction is currently under appeal suggests the likelihood of success in the criminal appeal”).

The circumstances Petitioner alleges – claimed innocence of the charges of conviction supporting the exclusion, possible errors in the criminal trial, and pendency of an appeal – are not among the three mitigating factors we may consider, and they raise collateral attacks on the validity of the conviction that the regulations bar being considered.  The basis for the underlying conviction “is not reviewable” and may not be attacked collaterally either on substantive or procedural grounds “in this appeal,” 42 C.F.R. § 1001.2007(d) (emphasis added), which applies that prohibition to appeals of the length of an exclusion, in addition to barring collateral attacks on a conviction as supporting an exclusion.  The Board has thus held that the prohibition on collaterally attacking the conviction supporting an exclusion under section 1128(a) applies to reviewing whether the exclusion period is unreasonable.  Anthony Joseph Moschetto, D.O., DAB No. 3030, at 11-12 (2021) (citing Leyva 7-8) (“The Board has rejected an excluded individual’s attempt to rely on extraneous facts about the conviction and the underlying criminal proceedings to reduce an exclusion period lengthened by the application of aggravating factors as a collateral attack prohibited by 42 C.F.R. § 1001.2007(d).”).  As before the ALJ, Petitioner does not allege that any of the three mitigating factors that the regulations permit ALJs and the Board to consider are present here.

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Petitioner contends that the exclusion period is unreasonable because the criminal conduct “did not result in any loss to the Medicare program.”  P. Br. at 20-21.  This argument ignores the fact of Petitioner’s convictions for fraud in connection with Oklahoma’s Medicaid program, a state health care program for the purpose of section 1128 of the Act.  See, e.g., Sylvie Wamba, DAB No. 3068, at 10 (2022); Monica Ferguson, DAB No. 3013, at 5 (2020); and Gena C. Randolph, DAB No. 2526, at 8 (2013) (each referring to Medicaid as a state health program for the purpose of the exclusion authority in section 1128 of the Act).  The record including the jury’s verdicts reveals substantial injury to the state Medicaid program as indicated by the amount of restitution the jury ordered Petitioner to pay to the state Medicaid agency for the services falsely claimed as provided by authorized Medicaid providers.

Petitioner also argues “that the IG has treated her differently from other excluded individuals, suggesting potential inconsistency or unfairness in the application of exclusion policies,” P. Br. at 20, but has not provided or cited any evidence, or cited any exclusion decisions, in support of that claim.  In any event, we have recognized that case comparisons “are of limited value.”  See, e.g., Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D., DAB No. 2635, at 11 (2015) (internal citation omitted).

Finally, Petitioner contends that the exclusion’s length is unreasonable because the ALJ “erred in fact when it held that Petitioner conspired with her co-defendants,” whereas the jury acquitted or otherwise did not convict Petitioner of the one count of Conspiracy to Commit Health Care Fraud (Count 3).  P. Br. at 17; see ALJ Decision at 5 (“A jury found Petitioner guilty of five counts of Medicaid fraud and one count of conspiracy to commit Medicaid fraud.”).  We find this error harmless.  The I.G.’s Exclusion Notice, the most probative document in the record regarding the basis for the exclusion and its length, contains no error about the number of convictions and no reason to conclude that the I.G. based the determination of the length of the exclusion on any such error.  See Asim A. Hameedi, M.D., DAB No. 3087, at 11-12 (2023) (finding the I.G.’s Notice of Exclusion the best evidence of the financial loss amount the I.G. considered, instead of higher amounts the I.G. addressed in ALJ brief).  Regarding the exclusion, the Notice states only that it was based on Petitioner’s conviction “of a criminal offense” related to the delivery of an item or service under Medicare or a state health care program.  I.G. Ex. 1, at 1.  Regarding the exclusion length, the Notice states only that it was based on the two aggravating factors, that “[t]he court ordered you to pay approximately $393,900 in restitution” and “[t]he acts that resulted in the conviction . . . occurred from about June 2009 to about January 2015.”  Id.  None of those I.G. statements are incorrect or depend on whether Petitioner was convicted of the one count of Conspiracy to Commit Medicaid Fraud, in addition to the five counts of Medicaid Fraud for which the jury did convict Petitioner and for which the court ordered payment of that amount in restitution.  See 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

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“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”).

We also note that the ALJ, while observing that Count 5 “identifies criminal conduct that persisted for almost four years” and concluding that the I.G. “has sufficiently established that Petitioner’s conviction arose from conduct that continued for longer than one year,”  ALJ Decision at 6, did not also note that the period of conduct was nearly four times the threshold required to be an aggravating factor, and that the Board has considered periods of conduct that so greatly exceed the threshold to be particular indicia of the convicted individual’s lack of trustworthiness warranting a lengthier exclusion.  As the Board stated in Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454, at 7 (2012) (quoting Donald A. Burstein, Ph.D., DAB No. 1865, at 8 (2003)), the purpose of this aggravating factor “is to distinguish between petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period.”  See also, e.g., Leyva at 10 (stating, regarding an exclusion under section 1128(a)(1), that participation in the fraud scheme for over two years “amply demonstrates more than a short-lived lapse in integrity”).  Here, the Notice of Exclusion cited the over-five-year period (June 2009 – January 2015) encompassed by Counts 1 and 5, while the ALJ noted only the nearly four -year period encompassed by Count 5 alone.  Under our prior holdings, either length is substantially greater than the regulatory threshold, authorizing a significant increase in the exclusion period over the five-year minimum.  See, e.g., Rosa Velia Serrano, DAB No. 2923, at 9 (2019) (involvement in Medicaid fraud for more than four years, for which petitioner was excluded under section 1128(a)(1), is “a protracted period” that shows petitioner “is extremely untrustworthy”).

Thus, regardless of the ALJ’s error, the ALJ appropriately considered and weighed the aggravating factors of financial loss, and that factor, combined with the factor for duration of the criminal conduct, do not reflect any error by the ALJ and support the determination that the 12-year total exclusion period is not unreasonable.  We also note that section 1005.23 provides that the Board “will disregard any error or defect in the proceeding that does not affect the substantial rights of the parties.”  42 C.F.R. § 1005.23; see generally Kimberly Jones, DAB No. 3033, at 11 (2021) (“hold[ing] that the ALJ’s erroneous finding concerning the duration of Petitioner's criminal conduct is harmless error, and that his decision to assign substantial weight to the aggravating factor in section 1001.102(b)(2) is amply supported by the undisputed fact that Petitioner’s criminal conduct spanned two-and-a-half years.”).  We agree with the ALJ that, in light of the aggravating factors present and their severity, we cannot conclude that the seven-year increase in the exclusion period that the I.G. imposed is unreasonable.  See Edwin L. Fuentes, DAB No. 2988, at 9 (2020), aff’d, Fuentes v. Becerra, No. 4:20-CV-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021) (quoting 57 Fed. Reg. 3,321 (Jan. 29, 1992)) (“So long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it.”).

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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 12-year period was not unreasonable.  Accordingly, we affirm the ALJ Decision.

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Endnotes:

¹  The current version of the Act can be found at https://www.ssa.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.  Also, a cross-reference table for the Act and the United States Code can be found at https://www.ssa.gov/OP_Home/comp2/G-APP-H.html.

²  Background information is drawn from the ALJ Decision and undisputed facts in the record before the ALJ.

³  The pages of Petitioner’s exhibits do not bear exhibit numbers or exhibit page numbers, so we cite here to the page numbers of the transcript.

⁴  The pages of the brief Petitioner filed with the request for review of the ALJ Decision are not numbered, and we cite to the .pdf document page numbers of the brief.

⁵  Petitioner states that the jury acquitted her of Count 3, Conspiracy to Commit Medicaid Fraud, but the Judgment shows only that the jury did not convict Petitioner on that count and does not disclose the ultimate disposition of that count.  I.G. Exs. 2, 3.  For the purpose of this proceeding we accept Petitioner’s assertion that the jury acquitted her of Count 3.  The reported acquittal of Count 3 does not undermine the legality of the I.G.’s exclusion under section 1128(a)(1) based on Petitioner’s conviction on multiple counts of Medicaid fraud.

⁶  The I.G. did not cite this provision of section 1128(i) in responding to Petitioner’s appeal, but it is binding upon the ALJ and the Board.  42 C.F.R. § 1005.4(c)(1) (providing that “[t]he ALJ does not have authority to . . . [f]ind invalid or refuse to follow Federal statutes”); Ethan Edwin Bickelhaupt, M.D., DAB No. 2480, at 3 (2012), aff’d, Bickelhaupt v. Sebelius, No. 12 C 9598 (N.D. Ill. May 29, 2014) (stating that the “limitations on the ALJ’s authority in section 1005.4(c)(1)” applies to the Board).

⁷  The I.G. did not dispute the descriptions of the court decisions in Petitioner’s brief.  In view of the I.G.’s overall position that Petitioner collaterally attacks the criminal conviction and seeks relief the ALJ and the Board cannot grant, in this instance we do not view the I.G.’s silence as agreement with Petitioner’s claims about the meaning or impact of those court decisions.

⁸  The three mitigating factors the regulations recognize are:  (1) “[W]hether the individual or entity” excluded under section 1128(a) “was convicted of three or fewer misdemeanor offenses and the entire amount of financial loss (both actual loss and intended loss) to Medicare or any other Federal, State, or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $5,000”; (2) “The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability”; and (3) “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.”  42 C.F.R. § 1001.102(c).