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                              Vincent J. Gamuzza, DAB CR5367 (2019)
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Vincent J. Gamuzza, DAB CR5367 (2019)








  
  
    

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





Vincent J. Gamuzza
(O.I. File No. 3-16-40090-9)
Petitioner,
v.
The Inspector General.
Docket No. C-19-245Decision No. CR5367July 9, 2019

        
              
    

      DECISION
Petitioner, Vincent J. Gamuzza, is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)), effective November 20, 2018. Petitioner’s exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). Exclusion for an additional 5 years, a total minimum exclusion of 10 years,1
 is not unreasonable based on the presence of two aggravating factors and the absence of any mitigating factors.
I. Background
The Inspector General (IG) notified Petitioner by letter dated October 31, 2018, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum of 10 years. The IG cited section 1128(a)(3) of the Act as the
**Page 2**
basis for Petitioner’s exclusion. The IG stated that the exclusion was based on Petitioner’s conviction in the United States District Court, Western District of Pennsylvania (District Court) 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 of service. IG Exhibit (Ex.) 1 at 1.
Petitioner requested a hearing pursuant to 42 C.F.R. § 1005.2 on December 13, 2018 (RFH). I convened a prehearing conference by telephone on January 14, 2019, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated January 14, 2019 (Prehearing Order). The IG filed a motion for summary judgment with supporting brief on February 25, 2019 (IG Br.), and IG Exs. 1 through 5. Petitioner filed a response on May 14, 2019 (P. Br.), with P. Exs. 1 through 6. On May 17, 2019, the IG waived her right to reply. Neither party objected to my consideration of IG Exs. 1 through 5 and P. Exs. 1 through 6 and they are admitted as evidence.
II. Discussion
**A. Applicable Law**
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).
Pursuant to section 1128(a)(3) of the Act, the Secretary must exclude from participation in any federal health care program:
Any individual or entity that has been convicted for an offense which occurred after [August 21, 1996], under Federal or State law, 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 those specifically described in [section 1128(a)(1)]) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
**Page 3**
The Secretary has promulgated regulations implementing those provisions of the Act. 42 C.F.R. § 1001.101(c).2
Pursuant to section 1128(i) of the Act, an individual is convicted of a criminal offense when: (1) 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; (2) there is a finding of guilt in a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction has been withheld. 42 U.S.C. § 1320a-7(i)(1)-(4); 42 C.F.R. § 1001.2.
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for no fewer than five years. 42 C.F.R. § 1001.102(a). The Secretary has published regulations that establish aggravating factors that the IG may consider to extend the period of exclusion beyond the minimum five-year period, as well as mitigating factors that may be considered only if the IG proposes to impose an exclusion greater than five years. 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 provides the basis of 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 IG bears the burden on all other issues. 42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4.
**B. Issues**
The Secretary has by regulation limited my scope of review to two issues:
Whether the IG has a basis for excluding Petitioner from participation in Medicare, Medicaid, and all federal health care programs; and
Whether the length of the proposed period of 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 followed by the pertinent findings of undisputed fact and analysis.
**Page 4**
**1. Petitioner’s request for hearing was timely and I have jurisdiction.**
**2. Summary judgment is appropriate in this case.**
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 IG have a right to participate in the hearing. 42 C.F.R. § 10015.2-.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).
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 nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent’s prima facie case or that might establish a defense. The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment. To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder. On summary judgment, the judge does not weigh the evidence or attempt to determine the truth. Rather, the judge accepts the nonmovant’s evidence as true and draws all permissible inferences in the nonmovant’s favor. *Anderson v. Liberty Lobby, Inc.*, 477 U.S. 242, 247-57 (1986).
There is no genuine dispute of material fact in this case. Petitioner does not dispute that he was convicted of a felony offense that occurred after August 21, 1996, that involved fraud against two health care benefits programs (not Medicare or Medicaid), and that his conviction triggers mandatory exclusion pursuant to section 1128(a)(3) of the Act. P. Br. at 1-3. Petitioner does not dispute that the mandatory minimum exclusion for participation in Medicare and all federal healthcare programs is five years. Petitioner also does not dispute the existence of two aggravating factors in this case. Petitioner concedes that none of the mitigating factors established by 42 C.F.R. § 1001.102(c) exist
**Page 5**
in this case. P. Br. at 4. Petitioner challenges the reasonableness of the 10‐year exclusion arguing that the IG incorrectly weighed the aggravating factors. Petitioner requests that I reduce the period of exclusion to the mandatory minimum five years. P. Br. at 4-7. However, even accepting Petitioner’s assertions of fact as true for purposes of summary judgment, his arguments must be resolved against him as a matter of law. I conclude that summary judgment is appropriate.
**3. Petitioner’s exclusion is required by section 1128(a)(3) of the Act.**
**a. Facts**
It is not disputed that Petitioner was an optometrist licensed to practice in Pennsylvania and New Jersey. IG Ex. 2 at 1; P. Br. at 4. The United States Attorney for the Western District of Pennsylvania filed a criminal indictment against Petitioner in the District Court on October 12, 2016, charging Petitioner with one count of health care fraud in violation of 18 U.S.C. §§ 2 and 1347. The indictment alleged that from in and around December 2015 through July 2016, within the Western District of Pennsylvania and elsewhere, Petitioner knowingly and willfully executed and attempted to execute a scheme to defraud Highmark, Inc. (Highmark) and Davis Vision, both health care benefit programs (other than Medicare or Medicaid), by submitting false and fraudulent claims to them. These claims were false and fraudulent because the procedures in the claims were never actually rendered, or were billed to both Highmark and Davis Vision. IG Ex. 2 at 3-4.
On September 18, 2017, Petitioner entered a plea agreement with the United States Attorney. IG Exs. 3, 4. As part of his plea agreement, Petitioner stipulated that the amount of loss caused by his criminal acts was more than $250,000 but less than $550,000. IG Ex. 3 at 5 ¶ 3; IG Ex. 4 at 16. During the plea inquiry, Petitioner admitted the facts alleged in the indictment. IG Ex. 4 at 26-27. The District Court accepted Petitioner’s guilty plea. IG Ex. 4 at 27-28. The District Court entered a judgment of conviction based on Petitioner’s guilty plea and sentenced Petitioner to 33 months of incarceration on March 26, 2018. The District Court also ordered Petitioner to pay an assessment of $100.00 and a fine of $25,000.00, and to pay restitution totaling $99,000.00 to Highmark and Davis Vision. IG Ex. 5.
**b. Analysis**
The IG cites section 1128(a)(3) of the Act as the basis for Petitioner’s mandatory exclusion. The statute requires the Secretary to exclude from participation any individual or entity:
(l) Convicted of an offense under federal or state law;
**Page 6**
(2) The offense occurred after August 21, 1996 (the date of enactment of the Health Insurance Portability and Accountability Act of 1996);
(3) The offense was committed 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 or Medicaid) operated by or financed in whole or in part by any federal, state, or local government agency;
(4) The criminal offense was a felony; and
(5) The offense was related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
Act § 1128(a)(3) (42 U.S.C. § 1320a-7(a)(3)); 42 C.F.R. § 1001.101(c). When the elements of section 1128(a)(3) of the Act are satisfied, Congress mandates exclusion and the Secretary and I have no discretion not to exclude. Petitioner does not deny that he was convicted within the meaning of the Act, pursuant to his plea of health care fraud in violation of 18 U.S.C. §§ 2 and 1347. The undisputed facts show that the elements of § 1128(a)(3) are satisfied:
(1) Petitioner was convicted within the meaning of the Act of a felony;
(2) Petitioner’s offense occurred after August 21, 1996;
(3) Petitioner’s offense involved the delivery or claimed delivery of vision services and it is undisputed such services are health care services;
(4) Highmark and Davis Vision are health care programs other than Medicare or Medicaid and claims were submitted to those programs; and
(5) Petitioner was convicted of health care fraud under federal law.
P. Br. at 1-2, 4-7. Accordingly, I conclude that the elements necessary to trigger an exclusion pursuant to § 1128(a)(3) of the Act are satisfied and Petitioner’s exclusion is required by the Act.
**4. Section 1128(c)(3)(B) of the Act requires a minimum exclusion of five years for any exclusion pursuant to section 1128(a) of the Act.**
I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(3) of the Act. Therefore, the IG must exclude Petitioner for a minimum period of five years
**Page 7**
pursuant to section 1128(c)(3)(B) of the Act. There is no discretion to impose a lesser period and Petitioner does not dispute that he must be excluded for no fewer than five years. P. Br. at 4. The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional 5 years for a total period of exclusion of 10 years.
**5. It is undisputed that two aggravating factors recognized under 42 C.F.R. § 1001.102(b) are present.**
The IG notified Petitioner that two aggravating factors are present in this case that justify an exclusion of more than five years. IG Ex. 1 at 2. I conclude the aggravating factors alleged by the IG are established by a preponderance of the evidence in this case and are undisputed.
The first aggravating factor considered by the IG under 42 C.F.R. § 1001.102(b)(1), requires that the crime of which Petitioner was convicted, or similar acts, caused, or were intended to cause, a financial loss to a government agency, or program, or to other entities of $50,000 or more. The Departmental Appeals Board (Board) has long held that restitution is good evidence of the amount of financial loss. *See, e.g.*,*Juan de Leon, Jr.*, DAB No. 2533 at 5 (2013); *Craig Richard Wilder*, DAB No. 2416 (2011). The District Court ordered Petitioner to pay $99,000.00 in restitution to both of the health care companies he defrauded. IG Ex. 5. The amount of restitution that the District Court ordered Petitioner to pay exceeds the $50,000 amount established in the regulation and therefore the IG has established this aggravating factor. Petitioner also stipulated as part of his plea agreement that the loss was more than $250,000 but less than $500,000. IG Ex. 3 at 5 ¶ 3; IG Ex. 4 at 16. Petitioner agrees that this aggravating factor exists in this case. P. Br. at 4.
The second aggravating factor considered by the IG is that Petitioner’s sentence included incarceration. IG Ex. 1 at 2. Under 42 C.F.R. § 1001.102(b)(5), the IG may extend the period of exclusion past the mandatory minimum five‐year period when the sentence imposed by the court includes incarceration. The District Court sentenced Petitioner to 33 months incarceration. IG Ex. 5 at 2. Petitioner also does not dispute the existence of this aggravating factor. Accordingly, this aggravating factor exists in this case.
**6. Petitioner concedes he cannot prove by a preponderance of the evidence any mitigating factors established by regulation.**
If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) are cited by the IG to justify an exclusion of longer than five years, as 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 only authorized mitigating factors that I may consider are listed in 42 C.F.R. § 1001.102(c).
**Page 8**
Petitioner concedes that none of the mitigating factors recognized by 42 C.F.R. § 1001.102(c) exist in this case. P. Br. at 4-5.
**7. Exclusion for 10 years is not unreasonable in this case.**
Petitioner concedes the existence of the aggravating factors cited by the IG and the absence of any authorized mitigating factors. Petitioner argues, however, that the IG incorrectly weighed the aggravating factors to justify extending the exclusion from the minimum 5 years to 10 years. P. Br. at 4-5. Petitioner urges me to make a new determination of the reasonable period of exclusion considering several facts, facts that I accept as true for purposes of summary judgment. Petitioner argues that: his crimes were committed over only seven months; he was young and early in his professional career; he exercised poor judgment; he was overextended; and that he quickly accepted responsibility for his misconduct. Petitioner argues that his lapse in integrity was brief and because he quickly accepted responsibility, he was less likely to commit further offenses that posed a threat to health care programs, particularly those federally funded. Petitioner argues that the mandatory 5-year exclusion serves the remedial purpose of the regulations and a 10-year exclusion is unreasonably excessive and punitive. Petitioner contrasts the 10-year exclusion with the brief period of possible license suspension or revocation confronting him in two jurisdictions that issued him licenses. P. Br. at 5-7.
The Secretary requires by regulation that the ALJ determine whether the length of exclusion imposed is “unreasonable,” if a period greater than the minimum period is imposed by the IG. 42 C.F.R. § 1001.2007(a)(1)-(2). The Board has interpreted the regulations to significantly limit the scope of ALJ review. The regulation states that the ALJ must determine whether the length of exclusion imposed is “unreasonable” without definition of what is unreasonable or direction for how to determine whether a period of exclusion is unreasonable. 42 C.F.R. § 1001.2007(a)(1)(ii). The drafters of the regulation explained that the intent of the regulation is to ensure that if the IG’s proposed period of exclusion is “within a reasonable range based on demonstrated criteria, the ALJ has no authority” to change the period of exclusion. 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992). Again, the drafters provided no explanation of what are “demonstrated criteria.” The Board has determined 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 IG falls within a “reasonable range.” *Juan de Leon, Jr.*, DAB No. 2533 at 4-5; *Craig Richard Wilder*, DAB No. 2416 at 8; *Joann Fletcher Cash*, DAB No. 1725 at 17 n.6 (2000). The Board 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. The Board cautions that whether the ALJ thinks the period of exclusion too long or too
**Page 9**
short is not the issue. The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances. In *John (Juan) Urquijo*, DAB No. 1735 (2000), the Board concluded that if the IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG 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 suggested that when it is found that an aggravating factor considered by the IG 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 reasoned that when aggravating factors are considered by the IG as a reason to extend a period of exclusion, some part of the extended period of exclusion should be attributable to each aggravating factor considered. Because in *Katz*, the ALJ found one aggravating factor considered by the IG was not proved before the ALJ, the Board concluded that the period of exclusion imposed by the IG was no longer in the reasonable range and reassessed the period of exclusion. The Board had the opportunity to define the term “reasonable range” and describe how to weigh aggravating and mitigating factors, but failed to do so. The Board did engage in weighing the remaining aggravating factors in *Katz* but did not explain the weighing in any detail or cite any authority for the process it employed in doing the weighing. *Id.* at 4-8. The Board, relying upon a prior Board decision and the preamble to the regulations, stated in a footnote that:
“[A] reasonable range” refers to a range of exclusion periods that is more limited than the full range authorized by the statute [five years to permanent exclusions for exclusion under section 1128(a) of the Act] and that is tied to the circumstances of the individual case. If the ALJ determines that the length of the exclusion imposed by the IG is within this range under the circumstance as found by the ALJ, he may not change it even if he believes that another exclusion period is more reasonable.
*Id*. at 5 n.4. The Board’s decision in *Katz* reflects its determination that it is the aggravating and mitigating factors that the Board and an ALJ consider in determining whether a period of exclusion is unreasonable. The Board’s decision also indicates that the facts and circumstances related to the aggravating factors are what are weighed when determining how each aggravating and mitigating factor affects whether a period of exclusion is unreasonable, i.e., outside the reasonable range. Clearly, it is not a simple process of counting the aggravating and mitigating factors, and considerable discretion remains for the Board and the ALJ to engage in the weighing process to decide what is unreasonable, though that weighing is significantly limited by the language of 42 C.F.R.
**Page 10**
§ 1001.2007(a)(1)(ii) and the Board’s prior decisions on how the regulation is to be implemented. The IG determination of the weight given aggravating and mitigating factors is clearly entitled to receive some deference due to the regulatory standard for review adopted by notice and comment rule making, i.e., by regulation the issue is whether the period of exclusion is unreasonable. 42 C.F.R. § 1001.2007(a)(1)(ii). No further deference is required by the Act or regulations or recognized by the Board. In this case, however, it has not been shown that the IG considered aggravating factors that did not exist or failed to consider mitigating factors that did exist. Therefore, my discretion to reassess the period of exclusion is nil according to the Board.
Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes two aggravating factors and no mitigating factors. The IG, in selecting a 10-year exclusion, did not consider aggravating factors shown not to exist or fail to consider mitigating factors that did exist. IG Ex. 1 at 2. I conclude that a period of exclusion of 10 years is in a reasonable range and 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.
Exclusion is effective 20 days from the date of the IG’s notice of exclusion to Petitioner. 42 C.F.R. § 1001.2002(b).
III. Conclusion
For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 10 years, effective November 20, 2018.


          /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 period of exclusion.  back to note 1
                      2. Citations are to the 2018 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated. back to note 2 Back to top
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