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                              2022
                              Mrugeshkumar Shah, DAB CR6114 (2022)
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Mrugeshkumar Shah, DAB CR6114 (2022)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





Mrugeshkumar Shah,
(OI File No. 6-17-40234-9),
Petitioner,

v.

The Inspector General.
Docket No. C-22-68Decision No. CR6114July 7, 2022

        
              
    

      DECISION

Petitioner, Mrugeshkumar Shah, was a pain management doctor, practicing in Texas.  He participated in a massive and multi-faceted bribe and kickback scheme, devised by the owners and managers of Forest Park Medical Center, a physician-owned surgical hospital.  In return for bribes and kickbacks, Petitioner Shah referred patients with generous insurance coverage to Forest Park and its physician co-conspirators.  He steered patients insured by less generous government plans (Medicare and Medicaid) elsewhere.  Eventually, he and his co-conspirators were caught.  Along with others, Petitioner was indicted.  Following a jury trial, he was convicted on four felony counts:  one count of conspiracy to pay and receive healthcare kickbacks and three counts of receiving illegal remuneration.  The court sentenced him to 42 months (three and a half years) in prison.

Based on his conviction, the Inspector General (IG) has excluded Petitioner for 15 years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(3) of the Social Security Act (Act).

Petitioner appeals, challenging both the exclusion itself and its duration.

Page 2

For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 15-year exclusion falls within a reasonable range.

Background

In a letter dated August 31, 2021, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of 15 years because he had been convicted of a "criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, in connection with the delivery of a health care item or service, or with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State, or local government agency."  The letter explained that section 1128(a)(3) of the Act authorizes the exclusion.  IG Ex. 1.

Petitioner timely requested review.

**Exhibits**.  The IG has submitted a written brief (IG Br.), six exhibits (IG Exs. 1-6), and a Reply brief (IG Reply).  In the absence of any objections, **I admit into evidence IG Exs. 1-6**.

Petitioner has submitted his own brief (P. Br.) with eight exhibits (P. Exs. 1-8).  The IG objects to my admitting six of them:

P. Ex. 1 is a list of "surgery revenue generated" and "total payments received" for surgeries completed (presumably, at the Forest Park Medical Center) from August 2010 through October 2012, and a more detailed spreadsheet that lists surgeries performed there from August 2011 through January 2012, and from March through October 2012, with payments received and related information.
	The IG objects to my admitting P. Ex. 1, arguing that it constitutes an impermissible collateral attack on Petitioner's underlying criminal conviction and is irrelevant.  The IG also points out that the document does not establish that these were the only times Petitioner performed surgeries at Forest Park.  IG Reply at 3.
	I must exclude evidence that is irrelevant and immaterial.  42 C.F.R. § 1005.17(c).  I agree that the regulations governing these proceedings preclude a collateral attack on an underlying conviction.  42 C.F.R. § 1001.2007(d).  I also agree that the document is not necessarily comprehensive.  However, it includes some information regardingPage 3

Petitioner's involvement with Forest Park, which is relevant, and for that reason, I will admit it.

P. Exs. 2 and 3 are briefs filed in Petitioner's criminal appeal to the Fifth Circuit Court of Appeals.  Petitioner proffers the documents to establish that he has appealed his conviction.  *See* P. Br. at 3-4.
	The IG objects to my admitting these documents.  The IG argues that, if the documents are proffered to undermine Petitioner's conviction, they are irrelevant because he cannot use this forum to attack his conviction.  42 C.F.R. § 1001.2007(d).  If they are proffered to establish that he has appealed his conviction, they are irrelevant because a pending appeal does not affect the exclusion.  Act § 1128(i)(1); IG Reply at 3-4.  I agree.  The documents are irrelevant, and I will not admit them.
	P. Ex. 4 is the superseding indictment, dated November 16, 2016.  The IG points out that the court dismissed this indictment and Petitioner was convicted based on a second superseding indictment, which the IG submitted as IG Ex. 2.  Although not directly relevant, the document provides potentially relevant background information, and I will admit it.  *See* 42 C.F.R. § 1005.17(g) (providing that evidence of "crimes, wrongs, or acts other than those at issue is admissible").
	P. Ex. 5 is a copy of the U.S. Sentencing Commission guidelines.  The IG asserts that Petitioner may not challenge the sentence imposed.  IG Reply at 4.  I don't disagree; however, the factors the sentencing judge considered in determining the length of Petitioner's sentence may be relevant, so I will admit the exhibit.
	P. Ex. 6 is the presentence investigative report, prepared July 29, 2019.  The IG suggests that Petitioner may be offering this document to attack collaterally his conviction.  IG Reply at 4-5.  Although the document cannot be used for that purpose, it describes in greater detail Petitioner's involvement in the conspiracy and contains evidence of "similar acts" other than those for which Petitioner was convicted.  It is therefore relevant and admissible.For these reasons **I admit into evidence P. Exs. 1, 4, 5, and 6**.  I note that P. Exs. 7 and 8, the judgment of conviction and jury verdicts, duplicate IG Exs. 5 and 4, and I therefore decline to admit them.

**Hearing on the written record**.  I instructed the parties to indicate, in their briefs, whether an in-person (video) hearing would be necessary and, if so, to explain why,

Page 4

identify any proposed witness, and to submit, "in the form of an affidavit or sworn declaration," the witness's direct testimony.  I emphasized I would "**only** accept witness testimony that is . . . *relevant*."  Order and Schedule for Filing Briefs and Documentary Evidence at 4 (¶ 8) (December 13, 2021) (emphasis in original).  The IG indicates that an in-person hearing is not necessary.  IG Br. at 6-7.

Petitioner, however, maintains that an in-person hearing is necessary and lists three witnesses:  himself; Michael Rimlawi, M.D., Petitioner's partner in his medical practice and a co-conspirator; and James Burnham, who was apparently his trial counsel.  P. Br. at 13.  Petitioner offers no written declarations, which, by itself, could preclude him from presenting the witnesses.

More significant, he has not established that any of the witness testimony is relevant.  He maintains that he and co-conspirator Rimlawi would testify as to his limited involvement in the conspiracy.  P. Br. at 13.  Petitioner's involvement in the crime has been established by his conviction and he may not, in this forum, collaterally attack that conviction.

Petitioner indicates that Attorney Burnham would testify about "the lack of any financial consequences to any agency or insurer arising from" Petitioner's criminal conduct and "matters on appeal [that] could undermine facts the [IG] has considered as final and fracture the judgment on which the [IG] has relied by eliminating either the [prison] sentence or a portion of the convictions."  P. Br. at 13.  Again, because the witness testimony would attack Petitioner's conviction, it is irrelevant.  Petitioner also claims that Attorney Burnham would set a foundation for some of Petitioner's (unspecified) exhibits offered as evidence.  I have ruled on the admissibility of Petitioner's evidence, and foundation has not been an issue.

Because there are no witnesses offering relevant testimony, an in-person hearing would serve no purpose, and this case may be decided based on the written record.

Discussion

***Petitioner must be excluded from program participation for a minimum of five years because he was convicted, under federal law, of felony fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.  Act § 1128(a)(3).1***Page 5

Under section 1128(a)(3) of the Act, the Secretary must exclude an individual who has been convicted under federal or state law of felony fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.  42 C.F.R. § 1001.101(c)(1).

**The scheme**.  The scheme was complicated, although Petitioner's participation in it was not.  Forest Park Medical Center was a physician-owned surgical hospital.  IG Ex. 2 at 1.  The hospital was "out-of-network," which means that it had no agreements with insurance plans or programs setting reimbursement rates for services provided to covered patients.  Instead, the hospital set its own rates, and, because insurance plans would not pay the higher charges for out-of-network services, patients referred to the hospital ended up paying more out-of-pocket charges than they'd have paid for the same services at an in-network hospital.  Obviously, if patients were aware of this, they'd be reluctant to obtain services at Forest Park.  So, to attract patients, the hospital's owners and managers bribed physicians and other health care providers for referrals.  IG Ex. 2 at 7; P. Ex. 6 at 13.  Because receiving Medicare and Medicaid reimbursement was not so profitable, the hospital also paid physicians and others to send those programs' beneficiaries elsewhere.  IG Ex. 2 at 10.

Petitioner Shah was one such physician.  He was a pain management doctor who was paid bribes and kickbacks for referring his patients to the hospital and to surgeons who performed medical procedures at the hospital.  IG Ex. 2 at 6, 8, 9; P. Ex. 6 at 12, 20.

To hide their illegal activities, the conspirators funneled payments through shell companies.  IG Ex. 2 at 14-17.  Petitioner Shah participated in the cover-up efforts.  P. Ex. 6 at 20 (¶ 89).

The fraudulent scheme continued for almost five years – from early 2008 through the end of 2012.  IG Ex. 2 at 8.

**The conviction**.  On January 23, 2019, the Grand Jury issued a 19-count second superseding indictment, charging Petitioner (and others) with (among other charges) conspiracy to pay and receive health care bribes and kickbacks, in violation of 18 U.S.C. § 371, and offering or paying and soliciting or receiving illegal remuneration and aiding and abetting, in violation of 42 U.S.C. § 1320a-7b(b) and 18 U.S.C. § 2.  IG Ex. 2.

On April 9, 2019, following trial in the Federal District Court for the Northern District of Texas, a jury convicted Petitioner on one count of conspiracy to pay and receive health care kickbacks and three counts of receiving illegal remuneration.  IG Ex. 3 at 3, 4, 6, 9; *see* IG Ex. 2 at 1-10, 12, 25, 30-31.

Page 6

On April 12, 2021, the Court entered judgment against Petitioner Shah and sentenced him to 42 months in prison, followed by one year of supervised release.  IG Ex. 4 at 1-3.  The court ordered him to pay $40,339.37 in restitution to Blue Cross Blue Shield ($7,058.47) and United Healthcare ($33,280.90), as well as a personal money judgment of $67,850, which represented the "proceeds derived from or property involved in the offense of conviction."  IG Ex. 4 at 6, 9.

Thus, Petitioner was plainly convicted under federal law of felonies related to fraud, breach of his fiduciary duty, and financial misconduct.  He must therefore be excluded for a minimum period of five years under section 1128(a)(3).  *See*, *e.g.*, *Aiman M. Hamdan, M.D.*, DAB No. 2955 (2019) (holding that a physician who accepted bribes in return for referrals is subject to exclusion); *Angelo D. Calabrese, M.D.*, DAB No. 2744 at 3 (2016) (holding that a physician convicted of accepting bribes for referring patient blood specimens is subject to exclusion under section 1128(a)(3)).

**Relationship to the delivery of a health care item or service**.  Petitioner, nevertheless, argues that he is not subject to exclusion because his crimes did not involve any Medicare or state health care program, although he concedes that his criminal activity involved the Workers Compensation Program, which is administered by the United States Department of Labor.  P. Br. at 3-4.  Petitioner's argument fails because the plain language of section 1128(a)(3) does not require government funding for the items or services related to the crime.  *Ellen L. Morand*, DAB No. 2436 at 9 (2012).2

***Based on the aggravating factors and no mitigating factor, the 15-year exclusion falls within a reasonable range.***An exclusion brought under section 1128(a)(3) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  I now consider whether the length of the exclusion, beyond five years, falls within a reasonable range.  *See Edwin L. Fuentes*, DAB No. 2988 at 8-9 (2020); *Hussein Awada, M.D.*, DAB No. 2788 at 5-6 (2017).

Page 7

Among the factors that may serve as a basis for lengthening the period of exclusion are the three that the IG relies on in this case:  1) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; 2) the sentence imposed by the court included incarceration; and 3) the individual 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 imposing the exclusion.  42 C.F.R. § 1001.102(b).  The presence of an aggravating factor or factors, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.

"Simply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness."  *Awada*, DAB No. 2788 at 10.

As the following discussion shows, the IG correctly identified the aggravating factors and correctly determined that there are no mitigating factors.

**Duration of criminal conduct (42 C.F.R. § 1001.102(b)(2))**.  We consider the length of Petitioner's participation in the criminal scheme in order to distinguish the individual whose lapse in integrity is short-lived from those who display a lack of integrity over a longer period of time.  "Participation in, or even knowing but silent acquiescence in, a continuing fraudulent scheme that could be expected to cause repeated misrepresentations and repeated harm over a period of time evidences a continuing lack of integrity."  *Awada*, DAB No. 2788 at 8.

The parties disagree about the duration of Petitioner's criminal conduct.  Pointing to Count 1 of the second superseding indictment, the IG maintains that Petitioner's criminal conduct began in early 2008 and continued through the end of 2012.  IG Ex. 2 at 8.  For his part, Petitioner argues that I should ignore Count 1 and consider only the three discrete instances for which he was convicted of receiving bribes or kickbacks:  1) Count 2:  receiving $3,000 on February 27, 2012; 2) Count 4:  receiving $1,000 on May 4, 2012; and 3) Count 7:  receiving $1,000 on May 31, 2012.  P. Br. at 4; *see* IG Ex. 2 at 30, 31.3

Arguably, because Petitioner was convicted of conspiracy, he is accountable for any overt acts committed in furtherance of the illegal scheme.  So long as one of

Page 8

the conspirators commits an overt act in furtherance of that agreement, all are accountable.  18 U.S.C. § 371.  The Departmental Appeals Board, however, has been reluctant to apply this principle in lengthening a period of exclusion.  *See John (Juan) Urquijo*, DAB No. 1735 (2000).

But I need not rely on the length of the entire conspiracy to decide that Petitioner's involvement lasted for more than one year.  Counts 2, 4, and 7 obviously account for only a small percentage of the bribes paid to Petitioner.  And I am not limited to the acts that resulted in the conviction; I may consider "similar acts."  42 C.F.R. § 1001.102(b)(2).

From its inception, the Forest Park business model relied on fraud.  *See* IG Ex. 2 at 1-2, 6-11; P. Ex. 6 at 12-15.  Petitioner's own evidence establishes that his association with the fraudsters lasted for well over a year.  The sentencing report confirms that Petitioner Shah was actively involved in the conspiracy from at least November 2010 through May 2012; during that period, he was responsible for $432,447.11 in underlying claims collected from various insurers.  P. Ex. 6 at 22, 23.

Shah's procedures conducted at [Forest Park Medical Center] resulted in $432,447.11 claims paid by various insurance providers to [Forest Park] *between November 2010 through May 2012*.  *During this timeframe, Shah collected $67,000 in bribes and kickbacks* from [Forest Park] for performing these procedures in the facility.

P. Ex. 6 at 24 (emphasis added).

The evidence thus firmly establishes that Petitioner actively engaged in his criminal activities for at least 18 months (November 2010 through May 2012) and, likely, longer (*see* P. Ex. 1).  This is over the one-year threshold for aggravation and justifies a period of exclusion that is longer than the minimum.

**Incarceration (42 C.F.R. § 1001.102(b)(5))**.  The court sentenced Petitioner to a substantial period of incarceration – 42 months (three and a half years).  IG Ex. 4 at 2.  While any period of incarceration justifies increasing the period of exclusion, the Board has repeatedly held that longer periods of incarceration are relevant in determining whether a period of exclusion is reasonable.  *Eugene Goldman, M.D.*, DAB No. 2635 at 6 (2015).  Generally, the longer the jail time, the longer the exclusion, because a lengthy sentence evidences a more serious offense.  *See Jeremy Robinson*, DAB No. 1905 at 6 (2004) (characterizing a nine-month incarceration as "relatively substantial."); *Jason Hollady, M.D.*, DAB No. 1855 at 12 (2002); *Stacy Ann Battle, D.D.S.*, DAB No. 1843 (2002) (finding that four

Page 9

months in a halfway house, followed by four months home confinement, justifies lengthening the period of exclusion); *Brenda Mills, M.D*., DAB CR1461, *aff'd*, DAB No. 2061 (2007) (finding that six months home confinement justifies increasing the length of exclusion).

Except to argue that the Fifth Circuit could reduce or eliminate his period of incarceration (which, as discussed above, section § 1128(i)(1) of the Act renders irrelevant), Petitioner does not challenge the IG's determinations as to the length of his prison sentence or that his imprisonment constitutes an aggravating factor.

**Other adverse actions (42 C.F.R. § 1001.102(b)(9))**.  In an order dated June 27, 2019, a disciplinary panel of the Texas Medical Board suspended Petitioner's license to practice medicine, based on his convictions for conspiracy to receive health care bribes and kickbacks and offering or paying and soliciting or receiving illegal remuneration.  IG Ex. 5.

In a letter dated June 3, 2021, the Texas Medical Board advised Petitioner that his medical license was revoked because of his convictions and subsequent imprisonment.  IG Ex. 6.

Thus, based on the same set of circumstances that serves as the basis for imposing this exclusion, Petitioner was subject to an additional adverse action by a state board, and the IG may apply this factor to extend the period of his exclusion.

**No mitigating factors**.  The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner's cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Characterizing the mitigating factor as "in the nature of an affirmative defense," the Board has ruled that Petitioner has the burden of proving any mitigating factor by a preponderance of the evidence.  *Barry D. Garfinkel*, *M.D.*, DAB No. 1572 at 8 (1996).

No mitigating factors offset the significant aggravating factors present in this case.  Petitioner was convicted of felonies.  No evidence suggests that he had a mental, physical, or emotional condition that reduced his culpability.  He did not cooperate with federal officials.

Based on the three aggravating factors and the absence of any mitigating factor, I must determine whether the exclusion period imposed by the IG falls within a

Page 10

reasonable range.  So long as that period falls within a reasonable range, my role is not to second-guess the IG's judgment.  *Robinson*, DAB No. 1905 at 5 (administrative law judge review must reflect the deference accorded to the IG by the Secretary).

A "‘reasonable range' refers to a range of exclusion periods that is more limited than the full range authorized by the statute [i.e., from a minimum of five years to a maximum of permanent] and that is tied to the circumstances of the individual case."  *Joseph M. Rukse, Jr., R.Ph.*, DAB No. 1851 at 11 (2002) (citing*Gary Alan Katz, R.Ph*., DAB No. 1842 at 8 n.4 (2002)).  The goal here is to protect federal health care programs and beneficiaries from potential harm.  *Joann Fletcher Cash*, DAB No. 1725 (2000).

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

Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  *Cash*, DAB No. 1725 at 7 (citing 57 Fed. Reg. 3298, 3321 (1992)).  I find that the 15-year exclusion falls within a reasonable range.

          /s/
        Carolyn Cozad Hughes

                      Administrative Law Judge
      1. My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision. back to note 1
                      2. In any event, because Petitioner conspired to steer Medicare and Medicaid patients away from Forest Park, his crime was likely related to the delivery of a health care item or service under a federal or state health care program.  IG Ex. 2 at 8-9 (charging that, in return for bribes,  Petitioner "knowingly and willfully" referred individuals, insured by the Medicare and Medicaid programs, to other facilities). back to note 2
                      3. Petitioner also argues that, because the IG points to his conviction under Count 1 to establish the length of his involvement in the illegal activity, if the Fifth Circuit were to reverse his conviction under Count 1, the IG would lose duration as an aggravating factor.  P. Br. at 4.  Again, his pending appeal is irrelevant.  The statute explicitly provides that Petitioner has been convicted, and is therefore subject to exclusion, "regardless of whether there is an appeal pending."  Act § 1128(i)(1). back to note 3 Back to top
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