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                              Lisa Beth Goldberg, DAB CR6229 (2023)
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Lisa Beth Goldberg, DAB CR6229 (2023)








  
  
    

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





Lisa Beth Goldberg,
(OI File No.: B-21-41344-9),
Petitioner,

v.

The Inspector General.
Docket No. C-22-701Decision No. CR6229February 10, 2023

        
              
    

      DECISION

The Inspector General of the U.S. Department of Health and Human Services (IG) excluded Lisa Beth Goldberg (Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for 25 years pursuant to Section 1128(a)(3) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)).  Petitioner challenges the length of exclusion.  For the reasons stated below, it is determined that the IG had a basis for excluding Petitioner from program participation and the 25-year exclusion period is not unreasonable.

I.    Background and Procedural History

On May 31, 2022, the IG notified Petitioner of her exclusion from participation in Medicare, Medicaid, and all federal healthcare programs under section 1128(a)(3) of the Act for a minimum of 25 years.  IG Exhibit (Ex.) 1.  The exclusion is due to Petitioner’s felony conviction in the United States District Court, Southern District of Florida, West Palm Beach Division, of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, in connection with the delivery of a healthcare item or service.  IG Ex. 1.

Page 2

On August 3, 2022, Petitioner timely sought a hearing before an administrative law judge (ALJ).  On August 8, 2022, the Civil Remedies Division (CRD) issued an acknowledgement letter setting a date for a prehearing conference, along with the CRD Procedures and a non-discrimination notice.

A prehearing conference was held by telephone on September 12, 2022.  On September 14, 2022, an Order and Schedule for Filing Briefs and Documentary Evidence was issued (Prehearing Order).  In that Order, the substance of the prehearing conference was summarized, and a briefing schedule was set.

On October 13, 2022, the IG submitted an informal brief (IG Br.) and seven proposed exhibits (IG Exs. 1-7).  On December 4, 2022, Petitioner submitted a prehearing exchange, consisting of an informal brief (P. Br.).  The IG submitted a reply brief on December 14, 2022 (IG Reply).

II.    Admission of Exhibits and Decision on the Record

Both parties were asked whether an in-person hearing was necessary to decide this matter.  The IG indicated that an in-person hearing was not necessary.  Petitioner requested an in-person hearing, stating that her testimony would elaborate on her “cooperation” and “how her life has changed for the positive.”  P. Br. at 3.  The IG objects to this request.  IG Reply.

As stated in the Prehearing Order, a hearing will be held only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony and the witness’ proposed testimony is found to be relevant and non-cumulative.  Here, Petitioner has not submitted written direct testimony to which the IG would be able to cross-examine.  Therefore, a hearing is not necessary, and this matter will be decided on the written record.

The IG did not object to Petitioner’s prehearing exchange, so it will be admitted into the record.  Petitioner did not file any objections to the IG’s proposed exhibits.  Therefore, IG Exs. 1-7 will be admitted into the record.

III.    Issues

The issues are whether the IG has a basis to exclude Petitioner from participation in Medicaid, Medicare, and any federal healthcare programs and, if so, whether the 25-year exclusion imposed by the IG is unreasonable.

Page 3

IV.    Jurisdiction

Jurisdiction is provided under 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); *see also* 42 U.S.C. § 1320a-7(f)(1).

V.    Legal Authorities

The Secretary of the U.S. Department of Health and Human Services shall exclude an individual from participation in Medicare, Medicaid, and all other federally funded health care programs if that individual or entity has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or any State health care program.  42 U.S.C. § 1320a-7(a)(1).  The Act requires a minimum exclusion period of five years when the exclusion is mandated under section 1320a-7(a).  42 U.S.C. § 1320a-7(c)(3)(B).  The IG has the discretion to impose an exclusion longer than the minimum period when aggravating factors are present.  42 C.F.R. § 1001.102(b).  Here, the IG has imposed a 25‐year exclusion based on three aggravating factors.

The Act requires the Secretary of Health and Human Services (Secretary) to exclude certain individuals from participation in any federal health care programs, as defined in Section 1128B(f) of the Act.  Act § 1128(a).  Here, the IG excluded Petitioner pursuant to section 1128(a)(3) of the Act.  IG Ex. 1, *see* 42 U.S.C. § 1320a-7(a)(3).  Section 1128(a)(3) mandates exclusion if the following elements are established:  1) an individual or entity has been convicted of a felony offense after August 21, 1996; 2) that offense was related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; and 3) the offense was in connection with the delivery of a health care item or service or with respect to any act or omission in a government health care program (other than Medicare or Medicaid).  The Secretary has delegated this exclusion authority to the IG.  42 C.F.R. § 1001.101(c).  The IG has the burden of proving the basis for the exclusion and the existence of any aggravating factors. 42 C.F.R. §§ 1005.15(b)(2); 1001.102(b). Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors.  42 C.F.R. §§ 1005.15(b)(1); 1001.102(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), 1005.15(d).

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the IG had a basis for the exclusion and whether an exclusion longer than the required minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a).

Page 4

VI.    Findings of Fact

In or about 2013, Petitioner was the owner and operator of several businesses which facilitated a fraud and money laundering scheme by distributing illegal payments to corrupt physicians in exchange for the issuance of prescriptions for compounded medications.  IG Ex. 3 at 4.  In order to perpetrate the fraud, Petitioner and her co-conspirators needed to obtain prescriptions from physicians.  The co-conspirators would solicit doctors and offer them monetary incentives in various forms in exchange for the issuance of the prescriptions, including cash, gift cards, payment of debts, and discounts on medical equipment.  IG Ex. 3 at 2.  The physicians were paid up to $8,000 a month to write prescriptions that were later submitted to insurance companies for reimbursement.  Upon receiving payment from the insurance companies, the conspirators divided the money amongst themselves.  The reimbursement monies were used to further facilitate the fraud by allowing for the purchase of supplies, payroll disbursements, illegal kickbacks to physicians and the personal enrichment of the conspirators.  IG Ex. 3 at 3-4.

On January 19, 2017, Petitioner pleaded guilty to one count of Conspiracy to Commit Money Laundering, pursuant to 18 U.S.C. § 1956(h), in the United States District Court for the Southern District of Florida (District Court).  On May 1, 2017, the Court accepted the plea and sentenced the Petitioner to 46 months’ imprisonment followed by a three-year period of probation.  Additionally, the Court ordered Petitioner to pay restitution in the amount of $15,170,220 and a $100 assessment fee.  IG Exs. 2, 3.

VII.    Analysis and Conclusions of Law

***Petitioner was convicted of a felony that was related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, which subjects her to a mandatory five-year exclusion from all federal health care programs.1***In order to prevail, the IG must prove, by a preponderance of the evidence, that Petitioner was convicted under federal or State law, of a criminal offense that occurred after August 21, 1996, consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct that was committed in connection with the delivery of a health care item or service.  42 U.S.C. § 1320a-7(a)(3); 42 C.F.R. § 1001.101(c)(1).  The evidence shows, and Petitioner does not dispute, that the IG has the authority to exclude her from federal health care programs because she was convicted of Conspiracy to Commit Money Laundering, a felony offense involving financial misconduct, which occurred after August 21, 1996, and was related to the delivery of a

Page 5

health care item or service.  P. Br. at 2.  Based on the evidence, I find that the IG has proven that Petitioner is subject to a mandatory exclusion of at least five years.

***The IG has established three aggravating factors which together justify exclusion beyond the five-year minimum.***Exclusions imposed under section 1128(a)(3) carry a five-year mandatory minimum exclusion period.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).  The IG may extend the five-year exclusion period based on the application of the aggravating factors listed in 42 C.F.R. § 1001.102(b).  If any of the aggravating factors set forth in 42 C.F.R. § 1001.102(b) justifies an exclusion longer than five years, mitigating factors listed at 42 C.F.R. § 1001.102(c) may be considered as a basis for reducing the period of exclusion to no less than five years.  The IG bears the burden of persuasion with respect to aggravating factors and Petitioner bears the burden of persuasion with respect to mitigating factors.  42 C.F.R. § 1005.15(b), (c).

In this case, the IG relies on three aggravating factors to impose a 25-year exclusion:  1) Petitioner’s acts resulted in a financial loss of $50,000 or more; 2) Petitioner was sentenced to a term of incarceration; and 3) Petitioner’s acts were committed over a period of one year of more.  42 C.F.R. § 1001.102(b)(1), (2), (5).  In addition to the aggravating factors, the IG considered Petitioner’s cooperation with authorities as a mitigating factor pursuant to 42 C.F.R. § 1001.102(c)(3).  The aggravating and mitigating factors are discussed in detail below.

***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.***An aggravating factor exists if “acts resulting in the conviction . . . caused, or were intended to cause, a financial loss to a government agency or program or to one or more entities of $50,000 or more.”  42 C.F.R. § 1001.102(b)(1).  Petitioner’s acts resulted in a staggering loss of $15,170,220 to both private insurers and federal health care programs, more than 300 times the $50,000 threshold to establish this aggravating factor.  IG Ex. 4.  Petitioner argues that while the District Court ordered her to pay over $15 million in restitution, she derived a personal benefit of less than $1 million.  P. Br. at 2.  The amount that Petitioner actually profited is not relevant; the question is not how much the petitioner profited, but how much the program lost.  *Christopher George Collins*, DAB CR2515 at 4 (2012).  Despite Petitioner’s argument, the IG has the legal authority to use a financial loss greater than $50,000 to a government agency or program, which may be measured by restitution, as an aggravating factor.  42 C.F.R. § 1001.102(b)(1).  The Board has held that “it is entirely reasonable to consider a program loss amount substantially larger than” the threshold program loss amount to be “an ‘exceptional aggravating factor’ to be accorded significant weight.”  *Laura Leyva*, DAB No. 2704

Page 6

at 9-10 (2016), *aff’d*, *Leyva v. Price,*No. 8:16-CV-1986, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017).  The IG acted within its authority in applying the amount of financial loss, in the form of restitution, as an aggravating factor.

***Petitioner’s sentence included incarceration.***An aggravating factor exists if incarceration is imposed by the court as part of an individual’s sentence.  42 C.F.R. § 1001.102(b)(5).  Under 42 C.F.R. § 1001.2, the definition of incarceration includes, “any type of confinement with or without supervised release, including, but not limited to, community confinement, house arrest and in home detention.”

The District Court sentenced Petitioner to 46 months of incarceration, followed by a term of probation.  *See* IG Ex. 5.  This substantial prison term reflects the seriousness of Petitioner’s offense, justifying a longer period of exclusion.  *See, e.g.,* *Gracia L. Maynard, M.D.*, DAB No. 2767 at 8 (2017) (petitioner’s sentence is “an unmistakable reflection of the . . . Court’s assessment of Petitioner’s untrustworthiness.”); *see also* *Raymond Lamont Shoemaker*, DAB No. 2560 at 8 (2014) (internal quotation marks omitted); *Juan De Leon, Jr.*, DAB No. 2533 at 6 (2013) (noting that “a substantial period of incarceration would, on its own, justify the I.G. in increasing an exclusion significantly in excess” of the mandatory minimum and noting that the Board “once characterized a nine month incarceration, which included a period of work release, as relatively substantial”); *Jason Hollady, M.D.*, DAB No. 1855 at 12 (2002) (the Board characterizing a nine-month incarceration as “relatively substantial”).  The IG has the legal authority to use Petitioner’s incarceration as an aggravating factor.

***The acts that resulted in Petitioner’s conviction were committed over a period of one year or more.***An aggravating factor exists if “the acts that resulted in the conviction . . . were committed over a period of one year or more.”  42 C.F.R. § 1001.102(b)(2).  The acts that formed the basis of Petitioner’s conviction began in 2013 and continued until September 2015, a period of approximately two years, which exceeds the minimum one year required to meet this aggravating factor.  “[T]he 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 . . . .’” *Vinod Chandrashekhar Patwardhan, M.D.*, DAB No. 2454 at 7 (2012) (quoting *Donald A. Burstein, Ph.D.*, DAB No. 1865 at 8 (2003)).  Therefore, the IG has acted within her authority in applying the length of time that the criminal acts were committed as an aggravating factor.

Page 7

***The IG has properly identified one mitigating factor.***Under 42 C.F.R. § 1001.102(c)(3), the IG may reduce an exclusion period when, “[t]he 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, [or] (ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or
weaknesses . . . .”  The IG states that Petitioner’s cooperation with authorities was considered as a mitigating factor when imposing the 25-year exclusion.  IG Br. at 5.  Petitioner argues that her cooperation with the government rose to an “extremely high” level and that the IG did not properly consider the level of cooperation when imposing a 25-year exclusion.  P. Br. at 3.

The record shows that Petitioner cooperated in a federal “pill mill” case in which she provided “dozens of documents and detailed information” about her relationship with a pharmacy that was subject to investigation.  IG Ex. 5 at 36.  The owner of the pharmacy was made aware of this information, and subsequently agreed to plead guilty.  IG Ex. 5 at 36-37.  Furthermore, Petitioner agreed to cooperate in other “pill mill” cases in which she provided “half a dozen” consensual recordings and “relevant documents.”  IG Ex. 5 at 37-38.  Petitioner concedes that she should be excluded for at least five years but argues that 25 years is unreasonable.  However, as further stated below, the Board has ruled that the IG has discretion in determining a reasonable period of exclusion based on the circumstances of the case

Lastly, Petitioner argues that a hearing is necessary in this matter to allow her to testify about her mental health which may be used “as a mitigating factor.”  P. Br. at 3.  It appears that Petitioner is attempting to present a mitigating factor under 42 C.F.R. § 1001.102(c)(2) which provides that “[t]he 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.”  The record shows that Petitioner was diagnosed with bipolar disorder and during sentencing she was ordered to participate in an approved mental health treatment program as a condition of her supervised release.  However, the District Court did not make a finding of any mental or physical condition that reduced Petitioner’s culpability of committing the offense.  *See* IG Ex. 7 at 51, 67.  Therefore, this mitigating factor does not apply.  The evidence shows that the IG properly identified Petitioner’s cooperation with authorities as the only applicable mitigating factor in this case.

Page 8

***Based on the three aggravating factors and one mitigating factor, I find that the 25-year exclusion imposed by the IG is not unreasonable.***In determining whether the length of exclusion is unreasonable, I must determine whether the length of the exclusion falls into a “reasonable range” based on the evidence in the record.  The IG has broad discretion in determining the length of an exclusion, based on the IG’s “vast experience” in implementing exclusions.  *Craig Richard Wilder*, DAB No. 2416 at 8 (2011) (citing 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992)).  The regulations provide that the IG’s proposed exclusion must be upheld as long as the length of exclusion is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  It is important to note that it is the quality of the aggravating (or mitigating) factors that is most important when considering the length of exclusion and not the sheer number of aggravating factors that are present in a given case.  As the Secretary stated in the preamble to the final rule establishing the exclusion regulations:

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case.  For example, in one case many aggravating factors may exist, but the subject’s cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.  Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating.  The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue.

57 Fed. Reg. at 3314-15 (1992).

Based on similarly situated exclusion cases, it appears that the IG properly considered Petitioner’s cooperation with state and federal authorities in determining the period of exclusion.  It is worthy to note that in other cases with a loss amount resulting from program fraud anywhere near the level caused by Petitioner, the IG has imposed a significantly higher period of exclusion, sometimes double the 25-year period imposed here.  *See, e.g., Sushil Aniruddh Sheth, M.D.,*DAB No. 2491 at 7 (2012) (discussing ALJ cases involving 50-year periods of exclusion); *see also* *Christopher George Collins*, DAB CR2515 (2012) (50-year exclusion based on conviction for conspiracy to commit health care fraud, a loss amount of $6,987,500, duration of criminal acts committed over 26-27 months, and the imposition of a 63-month sentence of incarceration); *Marcellus*

Page 9

*Jhekwuoba Anunobi*, DAB CR2480 (2012) (50-year exclusion based on criminal conduct persisting for 14 months, a loss amount of $2,220,019.36, and the imposition of a 20-year period of incarceration).

In *Craig Richard Wilder*, DAB No. 2416 (2011), the Board reviewed the impact the mitigating factor of cooperation should have played on the IG’s selection of a 35-year period of exclusion.  There, petitioner Wilder caused approximately $4,000,000 in program loss from criminal acts lasting over a period of two years, but provided “extraordinary cooperation” which resulted in the conviction of several confederates.  DAB No. 2416 at 10-11.  Considering the aggravating factors and mitigating circumstances, the Board reduced petitioner Wilder’s period of exclusion to 18 years.  *Id.*However, in*Callie Hall Herpin*, DAB CR2333 at 1-2 (2011), the IG imposed a 50-year exclusion based on the petitioner’s conviction of conspiracy to commit health care fraud and a loss of $12,926,680 to the Medicare program.  During the pendency of petitioner Herpin’s appeal before an ALJ, the IG became aware the petitioner cooperated with the government, but only reduced her period of exclusion from 50 to 45 years.  DAB CR2333 at 2, 5.  The smaller reduction in exclusion afforded to petitioner Herpin suggests the IG found her cooperation less extraordinary than petitioner Wilder’s, perhaps in comparison to the far greater loss amount she caused compared to the loss in *Wilder*.

In this case, the IG considered one mitigating factor in determining the length of exclusion and I find no basis to assign that factor a more significant weight.  Petitioner’s substantial cooperation with authorities does not negate that she willingly participated in a complex scheme to defraud both private insurers and federal health care programs out of millions of dollars for an extended period of time.  The severity of the crime, as well as the weight of the three aggravating factors in this case support an increase in length of Petitioner’s exclusion beyond the five-year minimum.  The nature of Petitioner’s crimes was very serious, as noted by the District Court.  *See* IG Ex. 7 at 63 (“[S]o it’s a very, very serious crime.  And I think we can all understand that [the offense is] something that attacks the fabric of our whole health care approach.”).  The nature of Petitioner’s offense is particularly troublesome and calls into question her judgment, trustworthiness, and integrity.  This is precisely the type of behavior that the IG seeks to exclude from federal healthcare programs.  Based on the evidence, I find that the length of exclusion imposed by the IG is not unreasonable.

Page 10

VIII.    Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  The 25-year exclusion is not unreasonable based upon the circumstances of this case.

Endnotes

1 My findings of fact and conclusion of law are set forth in bold and italic text.
  
          /s/
        Tannisha D. Bell

                      Administrative Law Judge Back to top
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