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                              Jeffrey Dale Hoffman, CR6267 (2023)
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Jeffrey Dale Hoffman, CR6267 (2023)








  
  
    

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





Jeffrey Dale Hoffman,
(OI File No. 4-19-40240-9),
Petitioner

v.

The Inspector General,
Respondent
Docket No. C-23-93Decision No. CR6267April 13, 2023

        
              
    

      DECISION

Respondent, the Inspector General of the United States Department of Health and Human Services (IG), excluded Petitioner, Jeffrey Dale Hoffman, from participation in Medicare, Medicaid, and all other federal health care programs for 12 years pursuant to Section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  Petitioner challenges the exclusion.  For the reasons stated below, I conclude the IG had a basis for excluding him from program participation and find the 12-year exclusion period selected by the IG is not unreasonable.

I.  Procedural History

By letter dated September 30, 2022, the IG notified Petitioner of his exclusion from participation in Medicare, Medicaid, and all federal health programs under section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)) for a minimum period of 12 years.  IG Ex. 1.The IG explained she took this action based on Petitioner’s conviction in the District Court of the United States for the District of South Carolina (District Court), for a criminal offense she alleged to be related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of such items or services.  *Id.*

**Page 2**

Petitioner timely sought review by an administrative law judge (ALJ) and I was designated to hear and decide this case.  I held a pre-hearing telephone conference with the parties on December 15, 2022, the substance of which is summarized in my Dec. 16, 2022 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).  Among other things, I directed the parties to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and exhibits in support thereof.  Summary Order at 5-6.

The IG filed a brief (IG Br.) and six proposed exhibits (IG Exs. 1-6), while Petitioner filed a brief (P. Br.)  The IG subsequently filed a reply brief (IG Reply).

II.  Exhibits and Decision on the Record

In the absence of objections, I admit IG Exhibits 1 through 6.

Neither party proposed witnesses nor indicated an in-person hearing was necessary.  IG Br. at 12; P. Br. at 4.  I therefore decide this case on the written record.  Summary Order at 6; *see* Civ. Remedies Div. Pro. § 19(d).

III.  Issues

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and, if so, whether the 12-year exclusion period selected by the IG is unreasonable.  *See*42 C.F.R. § 1001.2007(a)(1).

IV.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an administrative hearing and judicial review of the final action of the Secretary of Health and Human Services (Secretary).  The right to a hearing before an ALJ is set forth at 42 C.F.R. §§ 1001.2007(a) and 1005.2.  The rights of both the sanctioned party and the IG to participate in a hearing are set forth at 42 C.F.R. § 1005.3.

The Act requires the Secretary to exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program.”  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); *see also*42 C.F.R. § 1001.101(a).

An individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or nolo contendere is accepted by a court; or (4) the individual

**Page 3**

has entered into any arrangement or program where judgment of conviction is withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2.  The statute does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) provides exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years.  The exclusion is effective twenty days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The period of exclusion may be extended based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b)*.*  Mitigating factors are considered as a basis for reducing the period of exclusion only if aggravating factors are applied to impose an exclusion period longer than five years.  42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  Summary Order at 4; 42 C.F.R. § 1005.15(c).

V.  Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis.

**A. I have jurisdiction to hear this case.**

Petitioner timely sought review of the IG’s exclusion action.  I therefore have jurisdiction to hear and decide this case.  *See* 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); *see also* Act § 1128(f)(1) (42 U.S.C. § 1320a-7(f)(1)).

**B. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act.**

Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(1) of the Act where an individual has been convicted, under federal or State law, of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); 42 C.F.R. § 1001.101(a).  As explained herein, the IG has established these elements by a preponderance of the evidence.

**Page 4**

**1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.**

The U.S. Attorney for the District of South Carolina charged Petitioner by information with one count of conspiracy to defraud the United States by violating the Anti-Kickback Statute.  IG Ex. 3 at 1-2.1  The government alleged that between September 2017 and December 2019, Petitioner conspired with others to defraud the United States and the Medicare program by knowingly signing and billing prescriptions for Medicare beneficiaries who were not his patients and receiving payment from his co-conspirators in exchange for the signed prescriptions.  IG Ex. 3 at 1-3.  Petitioner pleaded guilty to the charge against him on November 30, 2020.  IG Ex. 5.  The U.S. District Court for the District of South Carolina (District Court) accepted Petitioner’s guilty plea and entered judgment against him on April 27, 2022.  IG Ex. 2.  Petitioner concedes he was convicted of an offense within the meaning of the Act.  P. Br. at 3.  I therefore find Petitioner was convicted of a criminal offense within the meaning of the Act.  Act § 1128(i)(1), (3) (42 U.S.C. § 1320a-7(i)(1), (3)); 42 C.F.R. § 1001.2.

**2. Petitioner’s****criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.**

The Act requires Petitioner be excluded from participation in federal healthcare programs if they were convicted of an offense relating to the delivery of an item or service under Medicare or a state health care program.  *See* Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)).  In order to be “related to” the delivery of an item or service under Medicare, only a nexus or common sense connection is required.  *See**Quayum v. U.S. Dep’t of*

***Page 5***

*Health & Human Servs.,*34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); *see also Friedman v. Sebelius*, 686 F.3d 813, 820 (D.C. Cir. 2012);*Berton Siegel, D.O.*, DAB No. 1467 (1994) (“[T]he statute requires some ‘nexus’ or ‘common sense connection’ between the offense of which a petitioner was convicted and the delivery of an item or service under a covered program.”).

The conduct to which Petitioner admitted clearly demonstrates he was convicted of a criminal offense related to the delivery of an item or service of healthcare under the Medicare program.  As outlined in the information to which he pleaded guilty, Petitioner “contracted with genetic testing companies to provide signed prescriptions for Medicare beneficiaries.”  IG Ex. 3 at 2.  He received intake questionnaires and often signed prescriptions for beneficiaries with whom he did not have a physician-patient relationship.  *Id.*at 2-3.  The prescriptions that Petitioner signed would be used to bill the  Medicare program for genetic tests without a determination that the genetic tests were medically necessary.  *Id.*at 3.  The genetic testing company paid Petitioner in exchange for the signed prescriptions, resulting in an improper benefit to Petitioner between $150,000 and $250,000 during the life of the conspiracy.  *Id.*at 3-4.

These facts establish to my satisfaction the requisite “common sense” connection between Petitioner’s crime of conviction and the delivery of services—namely, genetic testing, under Medicare, a federal health care program.  As a result of his criminal conduct, Petitioner was ordered to repay the United States for losses incurred by the Medicare program.  Therefore, I find that a basis exists to exclude Petitioner.

**C. Petitioner must be excluded for a minimum of five years.**

Because I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)), he must be excluded for a minimum of five years.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).

**D. The IG has established four aggravating factors which together justify exclusion beyond the five-year statutory minimum.**

**1. The IG established a financial loss to a government program of $50,000 or more, as required by 42 C.F.R. § 1001.102(b)(1).**

Petitioner improperly received between $150,000 to $250,000 because of his criminal conduct.  IG Ex. 3 at 4.  The District Court ordered him to pay $238,150 in restitution to the Medicare program.  IG Ex. 2 at 5.  Restitution may be used to demonstrate program loss.  *Summit S. Shah*, *M.D.,* DAB No. 2836 at 8 (2017).  Petitioner does not dispute the restitution he agreed to pay represents the amount of loss suffered by the Medicare program due to his criminal offense.  The IG has sufficiently established Petitioner was responsible for more than $50,000 in loss to the Medicare program.

**Page 6**

**2. The IG established Petitioner’s conviction arose from acts that lasted for a period of one year or more, as required by 42 C.F.R. § 1001.102(b)(2).**

The information to which Petitioner pleaded guilty states that “for at least in or around September 2017, and continuing up to December 2019 . . . [Petitioner] knowingly and intentionally . . . conspired . . . to . . . knowingly defraud the United States . . . .”  IG Ex. 3 at 1.  Petitioner challenges the IG’s application of this aggravating factor, claiming the FBI characterized his conduct as legal until 2019.  P. Br. at 2.  Petitioner’s argument is without merit.  To resolve the criminal charge against him, Petitioner agreed to waive indictment and arraignment and pleaded guilty to the charges against him set forth in the information.  IG Exs. 3, 4.  His stipulation to all the allegations contained in the information to which he pleaded includes the duration of the conspiracy described in that document.  Petitioner’s effort now to contest the duration of the conduct to which he has already pleaded is a collateral attack on his underlying conviction and therefore impermissible in these proceedings.  42 C.F.R. § 1001.2007(d).  The IG has sufficiently established that Petitioner’s criminal conduct continued for longer than one year.

**3. The IG established that Petitioner’s sentence included a period of incarceration, as required by 42 C.F.R. § 1001.102(b)(5).**

The evidence of record demonstrates the District Court sentenced Petitioner to 12 months and one day of incarceration.  IG Ex. 2 at 1, 3.  The IG has established application of this aggravating factor was appropriate.

**4. The IG established that Petitioner was the subject of another adverse action by another government entity based on the same set of circumstances forming the basis of exclusion, as required by 42 C.F.R. § 1001.102(b)(9).**



The IG properly determined an aggravating circumstance arose as the result of an adverse action taken against Petitioner by another government entity based on the same set of circumstances for which he was excluded.  42 C.F.R. § 1001.102(b)(9).  Here, North Carolina’s Medical Board revoked Petitioner’s medical license because of the felony conviction that resulted in the IG’s exclusion action.  IG Ex. 6.  The IG has established application of this aggravating factor was appropriate.

**5. The IG properly declined to apply a mitigating factor.**

Petitioner has the burden of proving any mitigating factors exist that could be considered as a basis to reduce the exclusion period.  Summary Order at 4; 42 C.F.R. § 1005.15(c).  Petitioner has failed to establish any mitigating factor I am permitted to consider to reduce the period of exclusion.

**Page 7**

Petitioner first explains that at the time he committed this offense, he suffered from Post-Traumatic Stress Disorder related to his daughter’s death, clinical burnout, a failed marriage, and alcohol abuse.  P. Br. at 3.  Petitioner appears to contend the IG should have considered his mental state as a mitigating factor under 42 C.F.R. § 1001.102(c)(2).2  While I am sympathetic to the circumstances described by Petitioner, the evidence of record fails to even suggest the District Court considered Petitioner’s mental, emotional, or physical condition to reduce Petitioner’s culpability.

Petitioner otherwise argues mitigation is appropriate because “this country is facing a shortage of primary care physicians . . . This exclusion functionally ends my primary care career . . . .”  P. Br at 3.  However, the governing regulations do not recognize this claim, even if true, as a basis for mitigation.  *See* 42 C.F.R. § 1001.102(c).  I therefore cannot consider it.   Accordingly, Petitioner has not met his burden of proof to demonstrate a mitigating factor that would warrant reducing the period of exclusion imposed by the IG.

**E. A 12-year exclusion period is not unreasonable.**

I must uphold the IG’s determination as to the length of exclusion if it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  This means that:

[s]o long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule.  We believe that the deference [42 C.F.R.] § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities.

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

In making my determination, the quality of the aggravating (or mitigating) factors is of greater significance than the mere number of the factors 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

**Page 8**

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.



*Id.*at 3314-15.

In assessing the reasonableness of the exclusion period selected by the IG, I must consider both mitigating and aggravating factors.  42 C.F.R. § 1001.102(b), (c).  First, I note Petitioner’s criminal conduct resulted in a substantial loss to the Medicare program – over $238,000.  IG Ex. 2 at 5.  The Board has observed that it is “entirely reasonable” to give significant weight to loss amounts “substantially larger” than the minimum regulatory threshold.  *Laura Leyva*, DAB No. 2704 at 9-10 (2016).  Here, Petitioner’s criminal conduct resulted in a loss to the Medicare program almost five times the already substantial regulatory minimum of $50,000 in program loss required to be considered an aggravating factor.  42 C.F.R. § 1001.102(b)(1).

In addition, the criminal acts that Petitioner participated in lasted for more than two years, from approximately September 2017 through December 2019.  During this time, Petitioner participated in a scheme to receive illegal kickbacks in exchange for the delivery of genetic testing services.  He prescribed these tests without generally bothering to evaluate the Medicare beneficiaries involved or provide follow-up care to them.  This prolonged criminal conduct demonstrates Petitioner’s high level of untrustworthiness.  His involvement was not a one-time error in judgment.  Nor was it a happenstance crime of opportunity.  Petitioner instead participated in a criminal conspiracy designed to systematically defraud the Medicare program.

Petitioner’s sentence of one year and one day of incarceration for his offense reinforces the seriousness of his crime.  IG Ex. 2.  The District Court opted to impose a sentence of incarceration exceeding one year on Petitioner, a white-collar criminal who likely had little if any prior criminal history for over a year, reflecting the gravity of his offense.  *Jeremy Robinson,*DAB No. 1905 (2004) (incarceration for one year and one day “merits weight sufficient, with remaining factors,” to support a 15-year exclusion).

Finally, the North Carolina Medical Board’s revocation of Petitioner’s medical license reinforces the seriousness of his criminal conduct.  The fact that Medical Board believed

**Page 9**

Petitioner’s felony conviction sufficient to automatically preclude him from treating patients serves to confirm the IG’s assessment of Petitioner’s untrustworthiness such that a longer period of exclusion was required.

Petitioner objects to a longer period of exclusion because it amounts to “being punished twice for the same offense.”  P. Br. at 2.  Petitioner’s argument falls short.  Exclusions imposed by the IG are civil sanctions that are remedial in nature and not intended to be punitive.  Because exclusions are remedial sanctions, neither the double jeopardy clause of the U.S. Constitution nor its prohibition against cruel and unusual punishment apply.  *Manocchio v. Kusserow*, 961 F.2d 1539 (11th Cir. 1992); *Greene v. Sullivan*, 731 F. Supp. 838 (E.D. Tenn. 1990); *Joann Fletcher Cash*, DAB No. 1725 (2000); *Douglas Schram*, *R.Ph.,* DAB No. 1372 (1992); *Janet Wallace*, *L.P.N.,*DAB No. 1326 (1992).  Ultimately, under these circumstances, I cannot say excluding Petitioner from participation in Medicare, Medicaid, and all federal health care programs for 12 years is unreasonable.

VI.  Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 12 years starting October 20, 2022, pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)).

Endnotes

1  The electronic filing system caption associated with the amended information submitted by the IG indicates it was filed January 11, 2022.  IG Ex. 3 at 1.  But the IG also submitted an amended plea agreement between Petitioner and the government filed November 30, 2020, IG Ex. 4, as well as a second document confirming he pleaded guilty at his arraignment for this charge on the same date.  IG Ex. 5.  The District Court’s imposition of judgment filed April 27, 2022 also refers to the November 30, 2020 plea agreement.  IG Ex. 2.  But that plea agreement includes no stipulated factual bases for the offense and states only that Petitioner agreed to plead guilty to an information charging him with conspiracy to defraud the United States.  IG Ex. 4 at 1.  In short, the only charging instrument in the record before me appears to have been filed some 18 months *after*Petitioner pleaded guilty.  Despite this chronological inconsistency, I infer the amended information relied upon by the IG is in fact the charging instrument to which Petitioner pleaded guilty.  The District Court saw nothing amiss in accepting his guilty plea or entering judgment against him in April 2022, which presumably would not have been the case if Petitioner’s plea was associated with a different information or indictment.  IG Ex. 2.  Meanwhile, Petitioner did not object to IG Exhibit 3 or argue he did not actually plea to this amended information.  I therefore conclude the amended information submitted by the IG is the charging instrument referenced by Petitioner in his plea agreement and by the District Court in its entry of judgment.  The IG should take better care to explain such obvious discrepancies in documents she opts to submit, particularly as she bears the burden of proof to demonstrate the basis for the application of aggravating factors and where, as here, she cites solely to the charging instrument to meet that burden.

2  This regulation provides mitigation is appropriate where “[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[.]”  42 C.F.R. § 1001.102(c)(2).
  
          /s/
        Bill Thomas

                      Administrative Law Judge Back to top
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