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                              Thomas Sahs, DAB CR5815 (2021)
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Thomas Sahs, DAB CR5815 (2021)








  
  
    

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





Thomas Sahs
(O.I. File No. M-19-40047-9)
Petitioner,

v.

The Inspector General,
US Department of Health and Human Services.
Docket No. C-20-786Decision No. CR5815February 17, 2021

        
              
    

      DECISION

Petitioner 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 August 20, 2020.  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 10 years, for a total minimum exclusion of 15 years,1
 is not unreasonable based on the presence of two aggravating factors and the absence of any mitigating factors.

**Page 2**

I.  Background

The Inspector General (IG) notified Petitioner by letter dated July 31, 2020, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum of 15 years.  The IG cited section 1128(a)(3) of the Act as the basis for Petitioner’s exclusion.  The IG stated that the exclusion was based on Petitioner’s felony conviction in the United States District Court, Southern District of Florida (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 or service.  IG Exhibit (Ex.) 1 at 1.

Petitioner requested a hearing pursuant to 42 C.F.R. § 1005.2 on September 24, 2020 (RFH).  I convened a prehearing conference by telephone on October 13, 2020, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated October 13, 2020 (Prehearing Order).  The IG filed a motion for summary judgment with supporting brief on November 27, 2020, and IG Exs. 1 through 6.  Petitioner filed a response requesting summary judgment in his favor on January 14, 2021 (P. Br.) and copies of his bank statements, which I treat as if marked Petitioner’s exhibit 1 (P. Ex. 1).  On January 26, 2021, the IG filed a reply brief.  Petitioner filed a sur-reply on February 2, 2021.  Petitioner did not object to my consideration of IG Exs. 1 through 6, and they are admitted as evidence.  Petitioner offers P. Ex. 1 to show the amounts he paid related to forfeiture, restitution, and/or other amounts imposed by the district court.  The IG did not object to my consideration of P. Ex. 1 and it is 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

**Page 3**

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.

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 as a basis 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(b), (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).

**Page 4**

**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.

**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. § 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).

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 of conspiracy to commit health care fraud that occurred after August 21, 1996.  Petitioner only requests that I reduce his period of exclusion from 15 to five years.  RFH; P. Br.  For reasons discussed later in this decision,

**Page 5**

Petitioner’s request must be resolved against him as a matter of law based on the undisputed facts.  Petitioner does not dispute that the mandatory minimum exclusion for participation in Medicare and all federal health care programs is five years.  Petitioner also does not dispute the existence of the aggravating factors that he was sentenced to incarceration and that loss to the government, as reflected by the amount of restitution ordered, was greater than $50,000, as alleged by the IG.  Petitioner does not argue that any of the mitigating factors established by 42 C.F.R. § 1001.102(c) exist in this case.  RFH; P. Br.  I conclude that summary judgment for the IG is appropriate and that Petitioner’s motion for summary judgment in his favor must be denied.

**3.  Petitioner’s exclusion is required by section 1128(a)(3) of the Act.**

**a.  Facts**

Petitioner states that he is not a health care provider, which I construe to mean that he was not enrolled in Medicare as either a provider or supplier.  RFH.  I accept the representation as true for purposes of summary judgment.

A second superseding indictment filed in the district court charged Petitioner and others with one count of conspiracy to commit health care fraud and wire fraud; eight counts of health care fraud; two counts of conspiracy to defraud the United States and to pay and receive health care kickbacks; 14 counts of receipt of kickbacks in connection with a federal health care program; 12 counts of payment of kickbacks in connection with a federal health care program; and two counts of making false statements, from about September 2014 through about July 2015.  IG Ex. 2.

On December 13, 2019, Petitioner agreed to plead guilty to one count of conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349.  Petitioner agreed to plead guilty in exchange for dismissal of all the other charges against him alleged in the second superseding indictment.  IG Ex. 3 at 1-2.  Petitioner agreed that his conduct caused an actual loss to Tricare, a federal health care program, of an amount greater than $1,500,000 and less than $3,500,000.  IG Ex. 3 at 4.  Petitioner also agreed to pay restitution to the United States in the amount of $3,493,512.  IG Ex. 3 at 7.  Petitioner agreed to forfeiture of $298,315.  IG Ex. 3 at 7.  As part of his plea agreement, Petitioner agreed to a factual proffer.  Petitioner admitted in the proffer that beginning in about January 2015, and continuing through about July 2015, he conspired with others to commit health care fraud through submission of false and fraudulent claims to Tricare.  The conspiracy involved the payment and receipt of kickbacks and other acts in furtherance of the conspiracy.  IG Ex. 3 at 12-16; IG Ex. 4.

Petitioner’s guilty plea was accepted by the district court on December 13, 2019.  IG Ex. 5 at 1.  Petitioner was sentenced on February 24, 2020, to 45 months in prison followed

**Page 6**

by three years of supervised release, to pay a fine of $20,000, to pay restitution of $3,493,512, and to forfeit certain property.  IG Ex. 6.

**b.  Analysis**

The IG cites section 1128(a)(3) of the Act as the basis for Petitioner’s mandatory exclusion.  The statute, as applicable in this case, requires the Secretary to exclude from participation any individual or entity:

(l)  Convicted of an offense under federal or state law;

(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;

(4)  The criminal offense was a felony; and

(5)  The offense was related to fraud.

Act § 1128(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.  I conclude that the elements that trigger exclusion are satisfied in this case.

Petitioner does not dispute that he was convicted of conspiracy to commit health care fraud, the offense he admitted he committed in his plea agreement.  Petitioner does not dispute that his offense was a felony federal offense with a maximum prison sentence in excess of one year.  18 U.S.C. § 3559(a)(1)-(5).  Petitioner also does not deny that he was convicted within the meaning of section 1128(i) of the Act because his plea of guilty was accepted, he was found guilty pursuant to his plea, and a judgment of guilt was entered by the district court.

Petitioner states in his request for hearing that he was not a health care provider, which I construe to mean that Petitioner was not enrolled in Medicare as a provider or supplier.  RFH.  Although not specifically asserted by Petitioner, Petitioner’s statement could be construed to mean that he should not be subject to exclusion pursuant to section 1128(a)(3) of the Act.  Section 1128(a)(3) of the Act, however, provides that “[a]ny individual or entity” will be excluded from participation in any federal health care program when the elements for exclusion are satisfied.  Section 1128(a)(3) of the Act is clearly not limited in its application to only those individuals or entities enrolled as

**Page 7**

providers or suppliers in a federal health care program such as Medicare.  Similarly, the Secretary’s regulations implementing the Act do not limit mandatory exclusions to those already enrolled in a federal health care program.  42 C.F.R. §§ 1001.1(a), 1001.101.

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 pursuant to section 1128(c)(3)(B) of the Act.  There is no discretion to impose a lesser period.  The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional 10 years for a total period of exclusion of 15 years.

**5.  It is undisputed that Petitioner’s offense resulted in an actual loss to the United States of $50,000 or more, one of the aggravating factors recognized under 42 C.F.R. § 1001.102(b)(1).**

Petitioner admitted in his plea agreement that his conduct caused an actual loss to the Tricare program of more than $1,500,000.  IG Ex. 3 at 4.  Further, he was sentenced to pay restitution of $3,493,512, which is good evidence of the amount of the loss due to his conduct.  The Board has previously accepted that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program.  *Jeremy Robinson*, DAB No. 1905 at 11 (2004); *Craig Richard**Wilder*, DAB No. 2416 at 9 (2011); *Juan de Leon, Jr.*, DAB No. 2533 at 5 (2013); *Laura Leyva*, DAB No. 2704 at 9 (2016).

The IG may consider as an aggravating factor justifying extending a period of exclusion over five years that the acts for which one is convicted caused, or were intended to cause, a loss to the government agency or program of $50,000 or more.  42 C.F.R. § 1001.102(b)(1).  This aggravating factor is undisputed.  Petitioner was notified by the IG of its consideration in the determination to impose a 15-year exclusion.  IG Ex. 1 at 2.

**6.  It is undisputed that Petitioner was sentenced to be incarcerated, one of the aggravating factors recognized under 42 C.F.R. § 1001.102(b)(5).**

Under 42 C.F.R. § 1001.102(b)(5), the IG may extend the period of exclusion beyond the mandatory minimum five‐year period when the sentence imposed by the court includes incarceration.  On February 24, 2020, the district court sentenced Petitioner to 45 months

**Page 8**

incarceration.  IG Ex. 6 at 2.  The IG notified Petitioner that this aggravating factor is present in this case and was considered to justify an exclusion of more than five years.  IG Ex. 1 at 2.  Petitioner does not dispute the existence of this aggravating factor.  Accordingly, this aggravating factor exists in this case.

**7.  No mitigating factors exist in this case.**

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).

Petitioner does not allege that any of the mitigating factors recognized by 42 C.F.R. § 1001.102(c) exist in this case.  RFH; P. Br.

**8.  Exclusion for 15 years is not unreasonable in this case.**

Petitioner’s only specific request in this case is that I reduce the period of exclusion to five years.  I have no authority to grant Petitioner’s request.

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 as significantly limiting 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 determine whether the period of exclusion imposed by the IG falls within a “reasonable range.”  *Edwin L. Fuentes*, DAB No. 2988 at 7-10 (2020);*de Leon, Jr.*, DAB No. 2533 at 4-5;*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

**Page 9**

exclusion is too long or too 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 did not do so.  The Board engaged in weighing the remaining aggravating factors in *Katz* but did not explain the weighing process in any detail or cite any authority for the process it employed.  *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 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 I.G. 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, determining a reasonable range 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, although that weighing is significantly limited by the language of 42 C.F.R. § 1001.2007(a)(1)(ii) and the Board’s prior

**Page 10**

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 rulemaking; 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 an aggravating factor that did not exist or failed to consider mitigating factors that did exist.  Therefore, I have no discretion to reassess the period of exclusion under current Board decisions.

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 15-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 15 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 15 years, effective August 20, 2020.


          /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 2019 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated. back to note 2 Back to top
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