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                              Igor Ishchuk, DAB CR5142 (2018)
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Igor Ishchuk, DAB CR5142 (2018)








  
  
    

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





Igor Ishchuk
	(OI File No. 2-11-40423-9),
	Petitioner,
v.
Inspector General,
	U.S. Department of Health & Human Services.
Docket No. C-17-550Decision No. CR5142July 25, 2018

        
              
    

      DECISION
Petitioner, Igor Ishchuk, is excluded from participating in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)), effective February 20, 2017.  Petitioner’s exclusion for five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).  An additional period of exclusion of five years, a total minimum exclusion of ten years,1
 is not unreasonable based upon the existence of the two aggravating factors established in this case and the absence of any mitigating factors.
I.  Background
The Inspector General (I.G.) of the U.S. Department of Health and Human Services notified Petitioner by letter dated January 31, 2017 that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for ten years.
Page 2
The I.G. cited section 1128(a)(1) of the Act as the basis for Petitioner’s exclusion and stated that the exclusion was based upon Petitioner’s conviction in the United States District Court, Eastern District of New York, of a criminal offense related to the delivery of an item or service under the Medicare or a state health care program.  I.G. Exhibit (Ex.) 1.
Petitioner timely requested a hearing in a letter postmarked March 21, 2017 (RFH).  On April 18, 2017, the case was assigned to me to hear and decide.  A prehearing conference was scheduled for May 18, 2017.  At the request of Petitioner and in the absence of objections from the I.G., I postponed the prehearing conference and issued a Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence (Prehearing Order) on May 8, 2017.  On June 21, 2017, the I.G. filed his brief and I.G. Exs. 1 through 5.
On December 12, 2017, I issued a Prehearing Conference Summary Order and Schedule for Filing Briefs and Documentary Evidence (Summary Order), which memorialized the substance of a December 7, 2017 prehearing conference during which I denied Petitioner’s request for stay of proceedings.  On February 6, 2018, the I.G. filed a motion for summary judgment.  Petitioner filed a brief in opposition to summary judgment (P. Br.) on May 15, 2018.  The I.G. filed a reply brief on May 30, 2018. 
	Petitioner did not object to my consideration of I.G. Exs. 1 through 5 and they are admitted as evidence.  Petitioner submitted no documentary evidence for my consideration.
II.  Discussion
**A.  Applicable Law**
Pursuant to section 1128(a) of the Act, the Secretary of Health and Human Services (Secretary) must exclude from participation in any federal health care program any individual convicted under federal or state law of, among other things:  a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  Act § 1128(a)(1).  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. §§ 1001.101(a), (c).2
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under Section 1128(a) of the Act will be for a period of not less than five years.  42 C.F.R. § 1001.102(a).  The Secretary has published regulations that establish aggravating factors that the I.G. may consider to extend the period of exclusion beyond the minimum five-
Page 3
year period, as well as mitigating factors that may be considered only if the minimum five-year period is extended.  42 C.F.R. §§ 1001.102(b), (c).
The standard of proof is a preponderance of the evidence, and there may be no collateral attack of the conviction that is the basis for the exclusion.  42 C.F.R. §§ 1001.2007(c), (d).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the I.G. bears the burden on all other issues.  42 C.F.R. § 1005.15(b).
**B.  Issues**
The Secretary has by regulation limited my scope of review to two issues:
Whether the I.G. has a basis for excluding an individual or entity from participating in Medicare, Medicaid, and all other federal health care programs; and
Whether the length of the exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1).
**C.  Findings of Fact, Conclusions of Law, and Analysis**
My conclusions of law are set forth in bold text followed by my findings of fact and analysis.
**1.  Petitioner timely filed his request for hearing, and I have jurisdiction**
There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.
**2.  Summary judgment is appropriate.**
Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing.  The Secretary has provided by regulation that a sanctioned party has the right to a hearing before an ALJ, and both the sanctioned party and the I.G. have a right to participate in the hearing.  42 C.F.R. § 1005.2-.3.  Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration.  42 C.F.R. § 1005.6(b)(5).  An ALJ may also resolve a case, in whole or in part, by summary judgment.  42 C.F.R. § 1005.4(b)(12).
Page 4
Summary judgment is appropriate in an exclusion case when there are no disputed issues of material fact and when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law.  *Tanya A. Chuoke, R.N.*, DAB No. 1721 (2000); *David A. Barrett*, DAB No. 1461 (1994); *Robert C. Greenwood*, DAB No. 1423 (1993); *Thelma Walley*, DAB No. 1367 (1992); *Catherine L. Dodd*, R.N., DAB No. 1345 (1992); *John W. Foderick, M.D.*, DAB No. 1125 (1990).  When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one.  *Surabhan Ratanasen, M.D.*, DAB No. 1138 (1990); *Foderick*, DAB No. 1125.  In opposing a properly supported motion for summary judgment, the nonmoving party must show that there are material facts that remain in dispute, and that those facts either affect the movant’s prima facie case or might establish a defense.  *Garden City Med. Clinic*, DAB No. 1763 (2001); *Everett Rehab. & Med. Ctr.*, DAB No. 1628 (1997).  It is insufficient for the non-movant to rely upon mere allegations or denials to defeat the motion and proceed to hearing.  *See Anderson v. Liberty Lobby, Inc.*, 477 U.S. 242, 247 (1986).
There are no genuine issues of material fact in dispute in this case.  Petitioner does not dispute that he was convicted or that his conviction is a basis for mandatory exclusion under section 1128(a)(1) of the Act.  Petitioner does not dispute that the offense for which he was convicted was committed over a period of one year or more and that he was sentenced to incarceration.  I accept as true for purposes of summary judgment Petitioner’s assertions that mitigating factors were presented during the sentencing phase of his criminal case and that his role in the kickback conspiracy was not as significant as others.  But the regulations limit me to considering only specified mitigating factors and I must conclude as a matter of law that Petitioner has failed to assert or present evidence as to any mitigating factor I am authorized to consider.  The issues in this case that require resolution are issues of law related to the interpretation and application of the regulations that govern exclusion from federal health programs to the undisputed facts in the record.  Accordingly, summary judgment is appropriate.
**3.  Petitioner’s exclusion is required by Section 1128(a)(1) of the Act.**
Section 1128(a)(1) of the Act requires that the Secretary exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity:  (1) convicted of a criminal offense; (2) where the offense is related to the delivery of an item or service; and (3) the delivery of the item or service was under Medicare or a state health care program.
Petitioner does not dispute that he was convicted of a criminal offense as defined in the Act.  P. Br.  Pursuant to section 1128(i) of the Act, an individual is “convicted” of a criminal offense when a judgment of conviction has been entered by a federal, state, or local court whether or not an appeal is pending or the record has been expunged; or when
Page 5
there has been a finding of guilt in a federal, state, or local court; or when a plea of guilty or no contest has been accepted in a federal, state, or local court; or when an accused individual enters a first offender program, deferred adjudication program, or other arrangement where a judgment of conviction has been withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2.  Petitioner entered a plea agreement and pleaded guilty to one felony count of conspiracy to receive and/or pay health care kickbacks in violation of 42 U.S.C. §§ 1320a-7b(1-2) and 18 U.S.C. § 371 (conspiracy).  I.G. Ex. 2 at 8-10; I.G. Ex. 3 at 1.  Petitioner’s guilty plea was accepted and a judgment was entered against him by a judge of the U.S. District Court for the Eastern District of New York on May 19, 2016.  I.G. Ex. 4 at 1-4.  Accordingly, I conclude that Petitioner was convicted within the meaning of the Act.
I also conclude that the other two elements necessary to trigger exclusion pursuant to section 1128(a)(1) are satisfied in this case, i.e., Petitioner’s crime was related to the delivery of an item or service under Medicare or Medicaid.  Petitioner states that “[t]he nexus is not as clear cut as the government asserts it to be,” arguing that he was not in a decision-making role at the practice that employed him and because he is not a medical doctor that could give orders.  P. Br. at 1.  The two issues I must resolve are whether the offense of which Petitioner was convicted was related to the delivery of a health care item or service and whether delivery was under Medicare or a state health care program.  Generally examined is the nexus or common sense connection between the conduct for which a person is convicted to determine whether, as required by section 1128(a)(1) of the Act, the conduct was related to the delivery of a health care item or service under Medicare or a state a health program.  *Summit S. Shah, M.D.*, DAB No. 2836 at 6 (2017) (“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 [federal or] state healthcare program”).
Petitioner pleaded guilty to Count 2 of the Indictment.  Count 2 clearly alleges that Petitioner participated in a conspiracy to solicit and receive kickbacks in return for referring Medicare and Medicaid beneficiaries for health care items or services that would be paid by Medicare or Medicaid.  Count 2 also alleges conspiracy to offer and pay kickbacks to persons who referred Medicare and Medicaid beneficiaries for health care items or services that would be paid by Medicare or Medicaid.  I.G. Ex. 2 at 8-9.  Petitioner pleaded guilty to the allegations of Count 2 of the Indictment thereby admitting to the alleged misconduct.  I.G. Ex. 3 at 1-2.  Based upon Petitioner’s admitted crime as detailed in Count 2 of the Indictment (I.G. Ex. 2 at 8-9), I have no trouble finding the required nexus and concluding that Petitioner’s criminal conduct was related to the delivery of a health care item or service under Medicare or a state health care program.
Even if I accept as true for purposes of summary judgment that Petitioner’s had a smaller role in the conspiracy compared to the doctors and decision-makers who employed him, that fact is not material to the nexus determination.  Petitioner’s crime involved
Page 6
conspiracy to solicit and receive or to offer and pay kickbacks directly related to the delivery of health care items or service to Medicare or Medicaid beneficiaries with payment to be made by Medicare and Medicaid – that is all the nexus or common sense connection required to trigger mandatory exclusion under section 1128(a)(1) of the Act.
**4.  Section 1128(c)(3)(B) of the Act requires a minimum period of exclusion of five years in this case.**
I have concluded that there is a basis to exclude Petitioner pursuant to section 1128(a)(1) of the Act.  Therefore, Petitioner must be excluded for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act.  The I.G. has no discretion to impose a lesser period and I may not reduce the period of exclusion below five years.  The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional five years for a total minimum period of exclusion of ten years.
**5.  Two aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify extending the minimum period of exclusion to ten years.**
**6.  Petitioner has not shown that there is a genuine dispute of material fact related to the existence of any mitigating factors established by the regulations.**
The regulations establish nine aggravating factors the I.G. can consider as a basis for extending the period of exclusion beyond the five-year mandatory minimum.  42 C.F.R. § 1001.102(b).  It is undisputed that the evidence establishes two of the authorized aggravating factors in this case.  It is undisputed that Petitioner pleaded guilty to Count 2 of the Indictment and admitted the allegation that his crime occurred between about November 2009 and October 2012, a period of more than a year.  I.G. Exs. 2 at 8, 3 at 1.  Conviction of criminal conduct subject to section 1128(a)(1) that occurred during a period of one year or more is an authorized aggravating factor.  42 C.F.R. § 1001.102(b)(2).  There is also no dispute that Petitioner was sentenced to incarceration.  I.G. Ex. 4.  A sentence that includes incarceration for a crime that triggers section 1128(a)(1) of the Act is the second aggravating factor in this case.  42 C.F.R. § 1001.102(b)(5).
If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an exclusion of longer than five years, as they do in this case, then mitigating factors may be considered as a basis for reducing the period of exclusion to no fewer than five years.  42 C.F.R. § 1001.102(c).  The regulation provides:
(c) Only if any of the aggravating factors set forth in paragraph (b) of this section justifies an exclusion longer than 5 years, may mitigating factors be considered as a basis for
Page 7
reducing the period of exclusion to no less than 5 years. Only the following factors may be considered mitigating—
(1) The individual or entity was convicted of 3 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 $1,500;
(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; or
(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)
Petitioner does not specifically identify any of the mitigating factors established by 42 C.F.R. § 1001.102(c) that he wants me to consider.  Petitioner has the burden to prove by a preponderance of the evidence that there is a mitigating factor authorized under the regulation for me to consider that was not considered by the I.G.  42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4; *Stacey R. Gale*, DAB No. 1941 at 9 (2004); *Arthur C. Haspel, D.P.M.*, DAB No. 1929 at 5 (2004).  Petitioner argues that a memorandum detailing mitigating factors was submitted by his attorney during his criminal sentencing proceedings.  P. Br. at 1.  I accept for purposes of summary judgment that Petitioner’s criminal attorney did submit a memorandum detailing certain mitigating factors during Petitioner’s sentencing.  However, Petitioner does not allege what those mitigating factors were or offer a copy of the memorandum or any other evidence of mitigating
Page 8
factors.  In order for me to determine whether there is a genuine dispute as to a material fact related to mitigating factors that would require a trial, Petitioner needed to submit some evidence or at least allege facts that revealed that there was a genuine issue of fact related to the existence of mitigating fact.  Prehearing Order ¶ 8; Summary Order ¶ 2(e), 6.
Petitioner emphasizes in his brief that he had a lesser role in the conspiracy than others.  I accept this fact as true for purposes of summary judgment.  However, Petitioner’s lesser role in the criminal enterprise is not one of the mitigating factors I am authorized to consider under 42 C.F.R. § 1001.102(c).  Petitioner argues in his request for hearing that he has accepted responsibility for his crime and he is currently paying the price for that crime.  He argues that the exclusion will impair his ability to work upon release from confinement and he hopes to use his training and education in health care to become a productive member of society.  I also accept as true for summary judgment that Petitioner has accepted responsibility and that the exclusion is going to negatively impact him.  However, these are not mitigating factors I am authorized to consider.  I conclude that Petitioner has not shown the existence of a genuine dispute as to a material issue of fact that would establish any authorized mitigating factor under 42 C.F.R. § 1001.102(c).
**7.  Exclusion for ten years is not unreasonable.**
Petitioner argues that the mandatory exclusion of five years should not be extended to ten years, but should at most be the 73-month term of his sentence.  RFH at 2.
Based on my review of the entire record, I conclude, Petitioner has failed to establish any genuine dispute as to the existence of facts material to establish the existence of a mitigating factor that I am permitted to consider under 42 C.F.R. § 1001.102(c) to reduce the period of his exclusion as imposed by the I.G..  Accordingly, I conclude that this case presents no mitigating factors the I.G. failed to consider that may have justified reducing the period of Petitioner’s exclusion.
The regulation requires that the ALJ determine whether the length of exclusion imposed by the I.G. is “unreasonable.”  42 C.F.R. § 1001.2007(a)(1).  The Board, however, has made clear that the role of the ALJ in exclusion cases is to conduct a de novo review of the facts related to the basis for the exclusion and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period of exclusion imposed by the I.G. falls within a reasonable range.  *Juan de Leon, Jr.*, DAB No. 2533 at 3 (2013); *Craig Richard Wilder, M.D.*, DAB No. 2416 at 8 (2011); *Joann Fletcher Cash*, DAB No. 1725 at 17 n.6 (2000).  The Board has explained that, in determining whether a period of exclusion is “unreasonable,” the ALJ is to consider whether such period falls “within a reasonable range.”  *Cash*, DAB No. 1725 at 17 n.6.
Page 9
The Board cautions that whether the ALJ thinks the period of exclusion too long or too short is not the issue.  The ALJ may not substitute his or her judgment for that of the I.G. and may only change the period of exclusion in the limited circumstances identified by the Board.
In *John (Juan) Urquijo*, DAB No. 1735 (2000), the Board made clear that, if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum.  In *Gary Alan Katz, R.Ph.*, DAB No. 1842 (2002), the Board suggests that, when it is found that an aggravating factor considered by the I.G. is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate.  The Board has by its prior decisions effectively limited the scope of my authority under the regulations to judging the reasonableness of the period of exclusion by determining whether or not aggravating and mitigating factors are proven.  If the aggravating factors cited by the I.G. are proved and Petitioner fails to prove that the I.G. failed to consider a mitigating factor, the Board’s interpretation of the regulations is that I have no discretion to change the period of exclusion.  Neither the regulations nor the Board’s interpretation of those regulations allows an ALJ to consider whether equitable factors may be a basis for concluding that the period of exclusion imposed by the I.G. is unreasonable and should be reduced.
In this case, after de novo review, I have concluded that a basis for exclusion exists and that the evidence establishes the two aggravating factors that the I.G. relied on to impose the ten-year exclusion.  Petitioner has not met his burden to show a genuine dispute of material fact that would tend to show that the I.G. failed to consider any mitigating factor or considered an aggravating factor that did not exist.  I conclude that the ten-year exclusion falls within a reasonable range and is not unreasonable considering the existence of two aggravating factors and the absence of any mitigating factors.  No basis exists for me to reassess the period of exclusion in this case.
Exclusion is effective 20 days from the date of the I.G.’s written notice of exclusion to the affected individual or entity.  42 C.F.R. § 1001.2002(b).  The I.G.’s notice to Petitioner is dated January 31, 2017.  Therefore, the effective date of Petitioner’s exclusion is February 20, 2017.
Page 10
III.  Conclusion
For all of the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all other federal health care programs for a minimum of ten years, effective February 20, 2017.


          /s/
        Keith W. Sickendick

                      Administrative Law Judge
      1. Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires.  Reinstatement is not automatic upon completion of the minimum period of exclusion. back to note 1
                      2. Citations are to the 2016 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated. back to note 2 Back to top
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