Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

John Hartman, D.O.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1076

Date: January 15, 2014

ORDER

On January 6, 2014, I issued Decision No. CR3056 in this matter. By this Order, I
correct the typographical error in that decision that listed the year of issuance as 2013
rather than 2014. Therefore, January 6, 2013 is replaced with January 6, 2014. There are
no other changes.

IT IS SO ORDERED.

/s/
Scott Anderson
Administrative Law Judge

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

John Hartman, D.O.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1076
Decision No. CR3056

Date: January 6, 2013

DECISION

Wisconsin Physicians Service Insurance Corporation (WPS), an administrative contractor
acting on behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the
Medicare enrollment and billing privileges of Petitioner, John Hartman, D.O., effective
June 21, 2012, for noncompliance with enrollment requirements, conviction of a felony
offense, and failure to report an adverse legal action. Petitioner appealed. For the
reasons stated below, I affirm WPS’s determination.

I. Background and Procedural History

Petitioner was enrolled as a supplier in the Medicare program and granted Medicare bill
privileges under Provider Transaction Number (PTAN) 001012050. On June 21, 2012,
Petitioner entered a guilty plea to Assault 2"! Degree-Operate Vehicle While Intoxicated
Resulting in Injury pursuant to Missouri Statute § 565.060, a class C felony. Specifically,
Petitioner “was driving a car which collided with another car causing injuries.

[Petitioner] was intoxicated at the time of this occurrence.” P. Ex. 1, at 3.

On March 6, 2013, WPS informed Petitioner it discovered that Petitioner pled guilty to a
felony and that his license to practice in Missouri had been revoked as a result on
February 25, 2013, by the State Board of Registration for the Healing Arts (State Board).
CMS Ex. 1; CMS Ex. 2. Thus, WPS informed Petitioner that it was revoking his
Medicare billing privileges effective June 21, 2012. WPS also found that Petitioner
failed to report his June 21, 2012 conviction, an adverse legal action, to WPS within 30
days of its occurrence. The letter informed Petitioner of his right to request
reconsideration within 60 calendar days of the postmark date.

On March 21, 2013, Petitioner filed a timely request for reconsideration of WPS’s
revocation. CMS Ex. 3. Petitioner contended that while his license was revoked on
February 25, 2013, it was reinstated that same day (albeit subject to a ten-year probation
under the terms set forth in the settlement agreement between Petitioner and the State
Board). P. Ex. 1. Further, Petitioner contended that while he pleaded guilty on June 21,
2012 to a felony, Assault 2"! Degree — Operate Vehicle While Intoxicated Resulting In
Injury, he received a suspended sentence. Petitioner asserts that under Missouri law a
suspended sentence does not constitute a “conviction,” and that he was placed on
probation and expects that the offense will be removed from his record upon successful
completion of his probation. CMS Ex. 3, at 2.

On May 28, 2013, WPS’s reconsidered determination upheld the revocation of
Petitioner’s Medicare enrollment and billing privileges based on his guilty plea and also
for his failure to report any adverse legal action to WPS. CMS Ex. 4. The letter notified
Petitioner that he may request final review by an administrative law judge. CMS Ex. 4.

On July 19, 2013, Petitioner filed a timely request for a hearing (RFH). In response to
my July 29, 2013 Acknowledgment and Pre-Hearing Order (Order), CMS filed a Pre-
Hearing Brief and Motion for Summary Judgment together with four exhibits (CMS Exs.
1-4). Petitioner filed a brief (P. Br.) together with three exhibits (P. Exs. 1-3).

IL. Decision on the Record
I admit without objection all of the parties’ exhibits into the record.

CMS did not submit a list of proposed witnesses or written direct testimony for any
witnesses. Petitioner submitted written statements from a number of individuals who
provided character references for Petitioner; however, CMS did not seek to cross-
examine these individuals. P. Ex. 2. Therefore, an in-person hearing is not necessary and
I decide this case based on the written record. Order, fj 8-10.

II. Issue

Whether CMS had a legitimate basis for revoking Petitioner’s Medicare billing privileges
under 42 C.F.R. §§ 424.535(a)(3) (conviction of a felony that is detrimental to the
Medicare program and its beneficiaries) and 424.535(a)(9) (failure to comply with
reporting requirements). I have jurisdiction to decide this issue. 42 C.F.R.
§§ 498.3(b)(17), 498.5(1)(2); see also 42 U.S.C. § 1395cc(j)(8).

IV. Findings of Fact, Conclusions of Law, and Analysis!

As a physician, Petitioner is a supplier for purposes of the Medicare program. See

42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of Supplier), 410.20(b)(1). In
order to participate in the Medicare program as a supplier, individuals must meet certain
criteria to enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS
may revoke enrollment and billing privileges for any reason stated in 42 C.F.R.

§ 424.535.

I. Petitioner pled guilty to the felony charge of assault in the second
degree and the court entered a judgment finding Petitioner guilty of
that offense, and Petitioner did not inform CMS of the plea or
judgment.

The following facts are undisputed. Petitioner pled guilty to the felony charge of assault
in the second degree and did not inform CMS or WPS of this plea. Specifically,
Petitioner “was driving a car which collided with another car causing injuries.
[Petitioner] was intoxicated at the time of this occurrence.” P. Ex. 1, at 3. Petitioner was
charged under Missouri Statute § 565.060, a class C felony. CMS Ex. 2, at 2. On or
about June 21, 2012, Petitioner entered a guilty plea in the 20" Judicial Circuit, Franklin
County, Missouri, Case No. 10AB-CR02038 to the charge of Assault 2? Degree —
Operate Vehicle While Intoxicated Resulting in Injury.” CMS Ex. 2, at 2. On or about
September 7, 2012, the court entered a judgment finding Petitioner guilty of the charged
offense. CMS Ex. 2, at 2.

2. There is a legal basis for WPS to revoke Petitioner’s Medicare billing
privileges based on Petitioner’s felony conviction for assault, which is
detrimental per se to the Medicare program and its beneficiaries
under 42 C.F.R. § 424.535(a)(3).

Petitioner contends that his crime is not one contemplated to be detrimental to the best
interests of the Medicare program and its beneficiaries. RFH at 2; P. Br. at 4. Petitioner
also argues that he was not “convicted” under Missouri law because he received a
suspended sentence, probation, and will eventually have the offense removed from his
record if he successfully completes probation. RFH at 2; P. Br. at 1-2. Petitioner’s
arguments fail.

' My numbered findings of fact and conclusions of law are set forth in italics and bold

font.
The applicable regulations contemplate this situation and provide that a guilty plea to a
felony crime of assault is a sufficient basis for revoking a currently enrolled supplier’s
Medicare billing privileges. 42 C.F.R. § 424.535(a)(3)(i)(A). That regulation provides:

(3) Felonies. The provider, supplier, or any owner of the provider or supplier,
within the 10 years preceding enrollment or revalidation of enrollment, was
convicted of a Federal or State felony offense that CMS has determined to be
detrimental to the best interests of the program and its beneficiaries.

(i) Offenses include—

A. Felony crimes against persons, such as murder, rape, assault, and other similar
crimes for which the individual was convicted, including guilty pleas and
adjudicated pretrial diversions.

42 CFR. § 424.535(a)(3).

This regulation expressly deems a felony conviction for assault as detrimental per se to
the Medicare program and its beneficiaries. See Letantia Bussell, M.D., DAB No. 2196,
at 9 (2008).” Therefore, I am precluded from further inquiry as to whether Petitioner’s
offense is detrimental to Medicare program and it beneficiaries.

Further, the regulation expressly deems that a guilty plea to felony assault is a conviction,
regardless as to whether the guilty plea is considered to be a conviction under applicable
state law. See Lorrie Laurel, PT, DAB No. 2524, at 4 (2012). Petitioner admits he pled
guilty to assault in the second degree.

Finally, Petitioner does not dispute that his conviction occurred within ten years of his
enrollment or revalidation of enrollment.

> Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.

> Even if the regulations did not direct me to conclude that Petitioner’s assault offense is
detrimental per se to the Medicare program and its beneficiaries, I would independently
make this conclusion based on the facts of this case. Driving a motor vehicle when
intoxicated is a threat to public safety and Petitioner’s conduct resulted in injury to
another person. The State Board concluded that Petitioner’s offense was a crime
involving moral turpitude. CMS Ex. 2, at 2; P. Ex. 1, at3. Lagree. Medicare program
beneficiaries deserve to receive care from physicians who exercise good judgment, both
professionally and personally.
Based on the evidence of record, I conclude that Petitioner has been convicted of a
felony, within 10 years preceding his enrollment or revalidation of his enrollment, which
is detrimental per se to the best interests of the Medicare program. Therefore, CMS had a
legitimate basis to revoke Petitioner’s Medicare billing privileges.

3. There is a legitimate basis for WPS to revoke Petitioner’s Medicare
billing privileges based on Petitioner’s failure to timely notify CMS or
WPS of his guilty plea to felony assault charges.

The regulations at 42 C.F.R. § 424.516(d)(1)(ii) require that physicians report, within 30
days, any adverse legal action to their Medicare contractor. Failure to timely report
subjects a physician to revocation of Medicare billing privileges. 42 C.F.R.

§ 424.535(a)(9).

Petitioner does not dispute that he did not inform WPS of his guilty plea to the assault
charge.’ Petitioner asserts that he did not know of the reporting requirement. RFH at 2.
Further, Petitioner argues that even if he did know of the requirement, he would not have
believed he needed to report his guilty plea to assault charges because under state law, he
was not actually convicted of the crime. RFH at 2.

Petitioner cannot escape responsibility for his failure to report his guilty plea, and the
state court’s judgment following that plea, to WPS by arguing that he did not know that
he needed to report that action. Petitioner is responsible for knowing the rules pertaining
to Medicare suppliers. As stated in another case, “Petitioner’s pleas of ignorance [to the
reporting requirement] are no defense. The regulation places the burden upon the
Medicare participant to report ‘[a]ny adverse legal action.’ 42 C.F.R. § 424.516(d)(1)(ii).
There are no exceptions to the requirement to report.” Phyllis Barson, M.D., DAB
CR2510, at 7 (2012).

Further, as I concluded above, the regulations deem a plea of guilty to certain felony
offenses as convictions. 42 C.F.R. § 424.535(a)(3)(i)(A),(B). Even if Petitioner is
eligible at some time in the future to have his record cleared of the assault offense to
which he pled guilty, his guilty plea and the court’s judgment of guilt against Petitioner to
the charges of assault in the second degree certainly represent a legal action that was
adverse to him. Section 424.516(d)(1)(ii) requires him to report any adverse legal action,
even if it is not a final adverse action. Akram A. Ismail, DAB No. 2429, at 10-11 (2011).
Therefore, I conclude that Petitioner failed to notify WPS of an adverse legal action
within 30 days as required, and that this failure serves as a legitimate basis to revoke his
Medicare billing privileges.

+ WPS notified Petitioner on March 6, 2013 that it was revoking his billing privileges

because it “discovered” that he “pled guilty to a felony on 06/12/2012.” CMS Ex. 1.
4. The applicable regulations control the effective date of the
revocation.

The regulation at 42 C.F.R. § 424.535(g) states that when a revocation is based on a
felony conviction, the revocation of the supplier’s billing privileges is effective as of the
date of the felony conviction. Since Petitioner’s guilty plea is considered a conviction
under the regulations, his revocation became effective on June 21, 2012, the date of his
guilty plea.

V. Conclusion

For the reasons explained above, I affirm CMS’s determination to revoke Petitioner’s
enrollment as a supplier in the Medicare program.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Patrick McGriff, D.O.,
Petitioner,
v.
Centers for Medicare & Medicaid Services,
Respondent.
Docket No. C-16-32
ALJ Ruling No. 2016-6

Date: December 31, 2015

DISMISSAL

The Centers for Medicare & Medicaid Services (CMS), through its administrative
contractor, CGS Administrators, LLC (CGS), revoked the Medicare enrollment and
billing privileges of Patrick McGriff, D.O. (Dr. McGriff or Petitioner). Dr. McGriff
requested reconsideration of the revocation. However, CGS rejected Petitioner’s
reconsideration request as untimely and did not issue a reconsidered determination. Dr.
McGriff then requested a hearing before an Administrative Law Judge (ALJ). Because
ALJs only have jurisdiction to review reconsidered determinations involving the
revocation of a Medicare provider or supplier, a provider or supplier has no right to ALJ
review when CMS or a CMS administrative contractor has not issued a reconsidered
determination. Therefore, in the absence of a reconsidered determination, I dismiss
Petitioner’s request for hearing.

I. Case Background and Procedural History

Dr. McGriff is a physician licensed to practice in Ohio. Ina July 14, 2014 initial
determination, CGS informed Dr. McGriff that it was revoking his Medicare enrollment
and billing privileges, effective August 13, 2014. As the grounds for revocation, CGS
cited 42 C.F.R. § 424.535(a)(12) and stated that the Ohio Department of Job and Family
Services had terminated Petitioner’s Medicaid provider agreement effective March 24,
2011. The letter informed Petitioner of his right to request reconsideration within 60
calendar days of the postmark date. Request for Hearing, Additional Document A.

On July 24, 2015, Petitioner, through his attorney, requested reconsideration of CGS’s
initial determination. Petitioner acknowledged that the notice of revocation was
postmarked on July 14, 2014, but alleged that he did not receive the notice until July 22,
2015, and that “[i]t likely failed to reach him because it was not properly

addressed.” Petitioner claimed that the post office box to which the letter was sent was
an incorrect address since neither he nor his employer maintained an address at that
location. Request for Hearing, Additional Document B.

On August 26, 2015, CGS sent a letter to Petitioner titled “Returned Reconsideration
Request.” CGS informed Petitioner that his request for reconsideration was received on
July 24, 2015. CGS stated that it could not process Petitioner’s reconsideration request
because more than 60 days had passed since the date of the original determination.
Request for Hearing, Additional Document C.

Petitioner requested a hearing on October 15, 2015. Petitioner sought review of CGS’s
actions and asserted that CGS disregarded the regulations at 42 C.F.R. §§ 424.545 and
498.22. Specifically, Petitioner noted that CGS incorrectly counted Dr. McGriff’s 60-day
period to file a reconsideration request from the date of the revocation notice rather than
from the date Dr. McGriff received the revocation notice. Petitioner indicated that the
regulations establish a presumption that the revocation notice was received five days after
the date on the notice, unless there is showing that it was received later than that.’

On October 22, 2015, I issued an Acknowledgment and Order to Show Cause (Order).
My Order noted that CGS rejected Petitioner’s reconsideration request as untimely.

' [agree with Petitioner that CGS incorrectly stated the regulatory standard for timely
filing a reconsideration request. Petitioner had 60 days to file the reconsideration request
following receipt of the initial determination. 42 C.F.R. § 498.22(b)(3). However, as
Petitioner noted, the regulations also establish a presumption of receipt of the initial
determination five days after the date on the notice and that Petitioner filed the
reconsideration request a year after CGS issued the initial determination. Although
Petitioner asserted to CGS that he received the initial determination late because it was
sent to an incorrect address (Request for Hearing, Additional Document B), CGS
apparently did not consider this a sufficient showing under section 498.22(b)(3) to
overcome the presumption of receipt within five days of the date of the initial
determination. CGS did not actually discuss this issue in the notice rejecting the
reconsideration request. See Request for Hearing, Additional Document C. As explained
below, because I do not have authority to review the rejection of a reconsideration
request due to untimeliness, the deficiencies that may exist in CGS’s notice rejecting the
reconsideration request are not before me.
Citing Karthik Ramaswamy, DAB No. 2563 (2014) (en banc), aff'd, Ramaswamy v.
Burwell, 83 F. Supp. 3d 846 (E.D. MO 2015), I ordered Petitioner to show cause why I
should not dismiss his hearing request on the grounds that he was not entitled to ALJ
review of a CMS contractor’s decision to dismiss or reject an untimely reconsideration
request.

In accordance with the deadlines established in my Order, Petitioner filed a response in
which he argued that his reconsideration request was timely filed. CMS replied that
Petitioner has no right to an ALJ hearing in the absence of a reconsidered determination;
CMS urged dismissal of Petitioner’s hearing request. CMS also addressed the merits of
Petitioner’s argument related to service of the initial determination, arguing that CGS
properly mailed it to the address of Dr. McGriff’s employer.

IL. Discussion

Certain cases adjudicated under the procedural regulations in 42 C.F.R. part 498 include a
request for reconsideration as the first step in the appeal process. See 42 C.F.R. § 498.5.
When the regulations require this additional level of appeal, the provider or supplier must
file a reconsideration request within 60 days from receipt of the notice of initial
determination, unless CMS or a CMS administrative contractor determines there is “good
cause” for extending the deadline. 42 C.F.R. §§ 498.5(1)(1); 498.22. If CMS (or its
contractor) receives a properly-filed request for reconsideration, it issues a “reconsidered
determination, affirming or modifying the initial determination and the findings on which
it was based.” 42 C.F.R. § 498.24(c). If an initial determination is not reconsidered, then
the initial determination is “binding.” 42 C.F.R. § 498.20(b)(1). It is only after a
provider or supplier has received a reconsidered determination from CMS that the
provider or supplier is entitled to a hearing before an ALJ. Karthik Ramaswamy, M.D.,
DAB No. 2563, at 7 (2014).

In response to my Order, Petitioner argues that Ramaswamy incorrectly stated that ALJs
do not have jurisdiction to review a CMS contractor’s dismissal of a reconsideration
request. Further, Petitioner asserts that this holding was dictum. Petitioner also argues
that, as noted by the dissent in Ramaswamy, the part 498 regulations do not explicitly
authorize CMS or its contractor to dismiss a request for reconsideration, particularly in a
situation where the wrong standard was applied to determine timeliness and the request
was filed timely.

CMS replied that Ramaswamy did in fact hold that ALJs only have jurisdiction to review
reconsidered determinations when the regulations require reconsideration as the first level
of appeal.

lagree with CMS that Ramaswamy did address an ALJ’s jurisdiction when CMS or a

CMS contractor rejects a reconsideration request as untimely. Ramaswamy, consistent
with previous administrative decisions (Better Health Ambulance, DAB No. 2475 at 4
(2012); Denise A. Hardy, D.P.M., DAB No. 2464 at 4 (2012); Hiva Vakil, M.D., DAB
No. 2460 at 5 (2012)), held that ALJs only have jurisdiction to review reconsidered
determinations, and the rejection of an untimely reconsideration request is not a
reconsidered determination. Further, a federal district court affirmed the final agency
decision in Ramaswamy. See Ramaswamy v. Burwell, 83 F. Supp.3d 846, 854 (E.D. Mo.
2015). The district court provided a lengthy analysis related to an ALJ’s jurisdiction.
The federal district court stated the following:

As explained in the preceding paragraphs, the [Department of
Health and Human Services] regulations create a system of
appellate rights and procedures regarding enrollment
determinations. These procedures, as interpreted by the ALJ
and DAB, require a reconsidered determination before any
review of a[] [CMS] contractor’s initial determination can
occur. Both the ALJ and DAB found that [the CMS
contractor] did not issue a reconsidered determination; instead
it dismissed Ramaswamy’s request as untimely.

According to Ramaswamy, the ALJ’s and DAB’s
interpretation is improper. Specifically, Ramaswamy
contends that “[a] supplier has a ‘right to reconsideration’ to
the extent that he ‘files a written request . . . /w/ithin 60 days
from receipt of the notice of initial determination... .
Because [the CMS contractor] failed to address the merits of
[Ramaswamy’s] request for reconsideration in its response,
[the CMS contractor] effectively denied [Ramaswamy’s]
right to reconsideration as explicitly required by 42 C.F.R.
§ 498.22.” Further, by interpreting the regulations as
depriving them of the authority to review [the CMS
contractor’s] actions absent a reconsidered determination, the
ALJ and DAB effectively made a nullity of the right to
reconsideration established under the regulations.

Ramaswamy fails to show that the ALJ’s and DAB’s
interpretation of the applicable regulations is not entitled to
deference. The regulations establish a detailed set of
procedures for enrollment, which includes procedures to be
followed for exercising appeal rights. The ALJ and DAB
found that this detailed scheme is exclusive—that if the
regulations do not explicitly establish a right to appeal in a
particular situation, no right to appeal exists in that situation.
While this may not be the only possible interpretation of the
regulations and while it may in certain situations be unfair, it
is not plainly erroneous or inconsistent with the regulations.

Ramaswamy v. Burwell, 83 F. Supp.3d 846, 854 (E.D. Mo. 2015) (emphasis in original)
(internal citations omitted).

In the present matter, there is no dispute that CGS issued an initial determination to Dr.
McGriff on July 14, 2014, revoking his Medicare enrollment and billing privileges.
Petitioner acknowledges receipt of the initial determination, “which was postmarked July
14, 2014, but not in fact received until later — July 22, 2015.” Request for Hearing,
Additional Document B at 1. The parties further agree that CGS rejected the
reconsideration request as untimely and never issued a reconsidered determination.
Request for Hearing, Additional Document C.

A request for reconsideration that a CMS contractor rejects or dismisses does not
constitute a “reconsidered determination” that entitles the affected party to request an
ALJ hearing. See 42 C.F.R. §§ 498.24, 498.5(1)(2); see also Ramaswamy, DAB No. 2563
at 7. Because there is no reconsidered determination in this case, Petitioner has no right
to an ALJ hearing. Further, in the absence of a reconsidered determination, the initial
revocation determination became binding and, therefore, administratively final. See

42 CFR. § 498.20(b).

III. Conclusion

Because CMS rejected Petitioner’s request for reconsideration for untimeliness and did
not issue a reconsidered determination in this case, Petitioner has no right to hearing
before an ALJ. Therefore, I dismiss Petitioner’s request for hearing. 42 C.F.R.

§ 498.70(b).

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Pravin Rajakumar,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-4189
Decision No. CR4498

Date: December 31, 2015

DECISION

I sustain the determination of a Medicare contractor, acting on behalf of the
Centers for Medicare & Medicaid Services, to revoke the Medicare billing
privileges of Petitioner, Pravin Rajakumar, a podiatrist, effective August 7, 2014.

I. Background

CMS offered 17 exhibits, identified as CMS Ex. 1-CMS Ex. 17, in support of its
arguments. Petitioner offered six exhibits, identified as P. Ex. 1-P. Ex.6, in
opposition. CMS objected to my receiving three of Petitioner’s proposed exhibits,
P. Ex. 4-P. Ex. 6, into the record. It objected to P. Ex. 4 and P. Ex. 6 on the
grounds that these were documents that Petitioner had not submitted at
reconsideration and that Petitioner had not shown good cause for offering them
now. It objected to P. Ex. 5, which contains the written direct testimony of Mr.
Pyong Yun, on the ground that it is irrelevant.

I receive CMS Ex. 1-CMS Ex. 17 into the record. I also receive P. Ex. 1-P. Ex. 3,
and P. Ex. 5. I sustain CMS’s objections to my receiving P. Ex. 4 and P. Ex. 6.
Petitioner offered these exhibits for the first time at this hearing and has made no
showing of good cause for his failure to submit them at reconsideration. 42 C.F.R.
§ 498.56(e). I overrule CMS’s objection to my receiving Mr. Yun’s testimony (P.
Ex. 5). I find Mr. Yun’s testimony to be relevant. However, and for reasons that I
explain below, his testimony does not support an outcome that is favorable to
Petitioner.

On October 31, 2014, National Government Services, a Medicare contractor,
notified Petitioner that his Medicare billing privileges were being revoked
effective August 7, 2014. The basis for the revocation was that Petitioner was “no
longer operational” to provide covered Medicare services at several practice
locations that he had listed on his application for Medicare participation.

42 C.F.R. § 424.535(a)(5). The revocation notice provided additional information
to Petitioner, citing on-site visits that inspectors had made between August 7 and
August 14, 2014 to several of Petitioner’s purported practice locations and noting
that Petitioner did not maintain a practice at any of these addresses. CMS Ex. 4 at
1-2.

Petitioner filed a request for reconsideration on July 1, 2015.' CMS Ex. 2. In his
request Petitioner acknowledged that he was no longer operational at four of the
five practice sites that had been cited in the initial determination to revoke his
Medicare billing privileges. He contended that at a fifth location, 136-69 41
Avenue, Flushing, NY, 11355, he was fully operational but that he only worked
there on a part-time basis consisting of one or two days a week. These days, he
alleged, were Wednesdays and some Fridays. He also contended that he practiced
at an additional location not named in the initial determination. Jd.

On July 31, 2015, the contractor issued a reconsidered determination. CMS Ex. 1.
The reconsidered determination affirmed the initial determination, stating that
Petitioner “had not provided evidence to show full compliance with the standard”
for which he was revoked, without citing the specific regulation which was the
basis for the initial or reconsidered determination. Jd.” Petitioner filed his hearing
request to challenge the findings of the reconsidered determination.

' The Medicare contractor accepted this request as timely and CMS has not
argued that the request was invalid due to untimely filing.

> Inexplicably, the contractor issued a separate document on May 10, 2015, which
purports to be an initial determination. CMS Ex. 3. That document states,
erroneously, that Petitioner’s application for Medicare participation was denied
because Petitioner had been excluded or debarred from participating in Medicare.
Petitioner has not appealed that determination and it is not at issue before me. I
note, however, that CMS is not relying on it as grounds for revoking Petitioner’s
Medicare billing privileges.
II. Issues, Findings of Fact and Conclusions of Law
A. Issues

The issues are whether: Petitioner received adequate notice of the reasons for
CMS’s reconsidered determination; and CMS is authorized to revoke Petitioner’s
Medicare billing privileges.

B. Findings of Fact and Conclusions of Law

I note, preliminarily, that CMS styled its submission as a motion for summary
judgment. I do not need to decide whether the criteria for summary judgment are
met here, i.e., that there are no disputed issues of material fact. That is because
CMS offered no witness testimony that would give Petitioner a right to cross-
examination and because CMS asserts that the testimony of Petitioner’s one
witness, Mr. Yun, is irrelevant. I infer from CMS’s assertion about Mr. Yun’s
testimony that it has no desire to cross-examine him. Given that, the parties have
effectively submitted their cases in writing. That means that there is no need for
an in-person hearing.

As a threshold issue CMS has raised the question of whether Petitioner received
adequate notice from the Medicare contractor of the reasons for denying his
request for reconsideration. I note that Petitioner has made no assertion that the
notice was inadequate.

CMS asserts that the reconsidered determination — although it did not cite the
specific regulatory ground for revoking Petitioner’s billing privileges — provided
him with adequate notice of the reasons for doing so. Alternatively, it argues that
I have the authority to set forth the regulatory basis for revoking Petitioner’s
billing privileges as an element of my authority to conduct a de novo hearing.

I need not address CMS’s alternate argument. The reconsidered determination
plainly informed Petitioner of the basis for the revocation. As I recite above, the
determination explicitly told Petitioner that he was not in compliance with the
standard for which his billing privileges were revoked. CMS Ex. 1. That
statement incorporated by reference the grounds stated in the initial determination,
which not only cited the regulatory criterion for revocation — 42 C.F.R.

§ 424.535(a)(5) — but which recited in detail the findings of the inspectors who
visited the various sites that Petitioner had listed as his practice locations in his
Medicare enrollment application.
As to the merits of this case the evidence establishes that, as of August 7, 2014,
Petitioner was no longer operational at the sites that he had listed as his practice
locations. Therefore, the contractor and CMS were authorized to revoke
Petitioner’s Medicare billing privileges.

An “operational” practice location is one in which the supplier:

has a qualified physical practice location, is open to the public for
the purpose of providing health care related services, is prepared to
submit valid Medicare claims, and is properly staffed, equipped, and
stocked . . . to furnish these items or services.

42 C.F.R. § 424.502. The sites that Petitioner listed as his practice locations were
not operational within this regulation’s plain meaning because none of them were
“open to the public for the purpose of providing health care related services.” The
contractor’s investigators visited the five locations that Petitioner had alleged as
being active practice sites in his application for Medicare participation. Four of
them were not offices at which Petitioner was employed. The fifth location
revealed no evidence that Petitioner actually maintained a practice there. CMS
Ex. 9; CMS Ex. 11-15; CMS Ex. 17.

Petitioner does not dispute any of these findings, with the exception of one
location, 136-69 41" Avenue., Flushing, NY, 11355 (the fifth location visited by
the inspectors). The inspectors visited this location on August 14, 2014, and found
it to be closed. They found no indication of a podiatrist’s office at that location.
The facility’s awning stated that the business at that location was a pharmacy, but
the interior was an out of business shoe store. CMS Ex. 2; CMS Ex. 15.

Petitioner argues that he maintained an office suite at the back of the building and
that he had an active practice at that location. However, he concedes that there
was no sign on the exterior of the facility showing that he practiced there. He
contends that there was a sign on the outside of his office with the days and hours
of operation of that office. Petitioner’s brief at 2. Petitioner also contends that
this site was a part-time location at which he worked only on Wednesdays and on
certain Fridays. CMS Ex. 2 at 4.

Petitioner offered no evidence in his request for reconsideration that supports any
of his contentions that he actually maintained a practice at 136-69 41“ Avenue,
Flushing. He provided no proof that he rented space there, that he actually worked
there, or that he posted signage that accurately stated his hours of operation in a
way that would inform the general public of when he would be open for business.
I cannot accept his representations as being true in the absence of some evidence
to support them. Simply asserting a fact does not establish it to be so absent proof.
As I discuss above, Petitioner had the opportunity to present evidence in his
reconsideration request that showed that he actually maintained a practice
location. His failure to do so there disqualifies him from now attempting to raise
that issue.

However, even if I accepted Petitioner’s representations, they are inadequate to
establish that he was “operational” at 136-69 41% Avenue, Flushing, within the
meaning of 42 C.F.R. § 424.502. By his own admission there was no sign on the
exterior of the site that showed that he worked at that location and nothing that
would indicate to a member of the public that he maintained a practice there.
Having his name and hours of operation on his office door in the interior of a
building, where there was nothing on the building’s exterior that would indicate
the presence of a podiatrist’s office is simply not enough to inform the public of
Petitioner’s practice location. I note also that Petitioner does not deny that there
was nothing in the hallway of the building that would inform the public that he
maintained a practice at that location. Petitioner also does not deny that the
signage on the building’s exterior was for a pharmacy that no longer existed. To
say the least that sign and the closed pharmacy, without any additional information
provided by Petitioner, would be misleading to the general public.

Petitioner argues also that he was rendering services at an additional location —
one not visited by the inspectors — at the time of the August inspection of his other
purported practice locations. Petitioner’s brief at 3. He contends that he had an
active practice at 136-39 37" Avenue, Flushing, where he rented space from Mr.
Yun. However, Petitioner did not offer evidence in his reconsideration request to
prove that assertion. His documentary support — P. Ex. 4 and P. Ex. 6 — consists of
evidence that he did not offer at reconsideration and which I have excluded for
that reason. Petitioner has offered no explanation for why he did not offer these
exhibits at reconsideration. He certainly was aware of their potential relevance
because in his reconsideration request he asserted that he maintained an additional
practice location at 136-39 37" Avenue, Flushing. But, that assertion
notwithstanding, he offered no corroborating evidence.

I have considered Mr. Yun’s testimony. P. Ex. 5. At most, it proves that
Petitioner leased space at 136-39 37" Avenue, Flushing. It does not prove that he
maintained an actual practice there. I do not find that this evidence is sufficient to
prove that Petitioner maintained an operational practice at 136-39 37" Avenue,
Flushing.

Moreover, even if I were to accept Petitioner’s representations as true I would not
find that he had informed CMS that he maintained an operational practice as of
August 7, 2014. Petitioner did not submit evidence of his practice at 136-39 37"
Avenue, Flushing, until August 21, 2014, weeks after the inspections of his other
purported practice locations and two weeks after his billing privileges were
revoked. P. Ex. 3; CMS Ex. 2 at 4. Even if he operated a practice at that location
he did not supply evidence of that operation until after the date of the revocation
of his billing privileges. None of the practice locations in his Medicare enrollment
application were operational as of August 7. Having another location — of which
CMS was not informed until after the effective date of revocation — does not
gainsay that fact.

Petitioner argues that he actually opened his practice location at 136-39 37"
Avenue, Flushing, on July 23, 2014. He provided no documentary support at
reconsideration for that assertion and as I have stated, Mr. Yun’s testimony would
not constitute credible evidence that this is so because it only establishes that
Petitioner leased space without showing the purpose of that rental.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Shandirhia S. Webster a.k.a Shandirhia S. Winsley,
(O.I File No. H-15-40822-9),

Petitioner,
v.

The Inspector General,
Department of Health and Human Services.

Docket No. C-15-3880
Decision No. CR4497

Date: December 30, 2015

DECISION

I sustain the determination of the Inspector General (1.G.) to exclude Petitioner,
Shandirhia S. Webster a/k/a Shandirhia S. Winsley, from participating in
Medicare, State Medicaid programs and other federally funded health care
programs until her exclusion from the Nebraska Medical Assistance Program
(Nebraska Medicaid) ends. Exclusion is authorized in this case by section
1128(b)(5) of the Social Security Act (Act).

I. Background

Petitioner requested a hearing to challenge the I.G.’s exclusion determination. The
1G. filed a brief in support of its determination and filed four supporting exhibits
that are identified as I.G. Ex. 1 — .G. Ex. 4. Petitioner filed a brief replying to the
1.G.’s brief. Petitioner filed no exhibits. The LG. filed a reply brief. I receive I.G.
Ex. 1 —1.G. Ex. 4 into the record.

II. Issues, Findings of Fact and Conclusions of Law

A. Issues
The issues are whether the I.G. has authority under section 1128(b)(5) of the Act
to exclude Petitioner, and whether the exclusion imposed by the I.G. —
coterminous with Petitioner’s exclusion by Nebraska Medicaid — is authorized.

B. Findings of Fact and Conclusions of Law

As a preliminary matter I note that the IG. styled his brief as a motion for
summary judgment. It is unnecessary for me to decide whether summary
judgment is appropriate in this case — i.e., whether all issues of material fact are
undisputed. The LG. offered no witness testimony. Petitioner proffered the
testimony of three individuals who, she contends, “wrote statements that were
never reviewed.” Petitioner’s Informal Brief at 2. However, Petitioner offered no
explanation as to what these witnesses might say at an in-person hearing that
would be relevant.

The thrust of Petitioner’s argument appears to be that the State proceeding that
resulted in revocation of her Medicaid provider status was unfair in that there was
possibly exculpatory evidence that was either ignored or not received. In short,
Petitioner seeks to re-litigate her State Medicaid revocation before me. The
testimony that she seeks to present would seem to address the merits of the
revocation determination and Petitioner apparently would offer it in order to prove
that the revocation determination was unfair.

I have no authority to consider these arguments. The I.G.’s authority to exclude
Petitioner in this case derives from the final action taken by the State of Nebraska
to revoke Petitioner’s Medicaid participation. Section 1128(b)(5) of the Act
authorizes the exclusion of any individual who has been excluded by a State health
care program (any State Medicaid program) for reasons bearing on that
individual’s professional competence, professional performance, or financial
integrity. Act, section 1128(b)(5)(B). In this case my review is limited to
determining: whether Petitioner’s provider status was revoked or suspended in
Nebraska; and whether the reasons for that revocation, if revocation occurred,
relate to the criteria expressed in section 1128(b)(5)(B).

Petitioner’s proffered testimony is irrelevant. She may not re-litigate the
revocation of her provider status before me. 42 C.F.R. § 1001.2007(d).
Therefore, there is no basis for me to convene an in-person hearing inasmuch as
there are no witnesses who would provide relevant testimony. I am deciding this
case based on the parties’ written exchanges. I do not need to decide whether the
criteria for summary judgment are met here because there is no evidence, beyond
that which has been proffered in writing that I might receive at an in-person
hearing.
Evidence introduced by the L.G. plainly establishes that Nebraska Medicaid
excluded Petitioner for reasons bearing on her financial integrity. Thus, the I.G.
may exclude Petitioner.

On January 6, 2015, Nebraska Medicaid notified Petitioner that it was terminating
her Medicaid provider agreement effective immediately. I.G. Ex. 2 at 1.
Nebraska Medicaid stated that the reasons for this action were that Petitioner:

(1) presented or caused to be presented false or fraudulent claims for Medicaid
goods or services; (2) breached the terms of her provider agreement by making a
false or fraudulent application for participation in Medicaid; (3) was convicted of a
felony or misdemeanor robbery (bank robbery) or burglary within the previous 10
years; and (4) failed to disclose her conviction on her application for participation
in Medicaid. Jd. Petitioner appealed this determination but limited her appeal to
the finding that her conviction for bank robbery was sufficient grounds to
terminate her participation. I.G. Ex. 3 at 2. Nebraska’s Director of its Division of
Medicaid & Long-Term Care affirmed the initial determination on May 19, 2015.
Id. at 3. Petitioner appealed this affirmation and her appeal subsequently was
dismissed. I.G. Ex. 4 at 1.

Any of the grounds that Nebraska Medicaid recited for revoking Petitioner’s
participation is a reason bearing on her financial integrity. Indeed, revocation
based on her filing of false and fraudulent claims — a finding that Petitioner did not
appeal — is a “financial integrity” basis in and of itself that establishes the I.G.’s
authority to exclude. So, of course, does revocation based on Petitioner’s
conviction for bank robbery establish the I.G.’s authority to exclude, as does also
revocation based on her concealing that conviction in her application for provider
status.

As I have discussed, Petitioner’s arguments are essentially that the State
proceeding that resulted in revocation of her provider status was unfair and,
somehow, incomplete. These arguments are arguments that address the merits of
the State’s action against Petitioner and that I have no authority to hear and decide.
42 C.F.R. § 1001.2007(a)(1).

The exclusion imposed by the I.G. is for a period that is coterminous with
Petitioner’s loss of Medicaid provider status. That is the exclusion term that is
required by the Act and by the implementing regulations. Act § 1128(c)(3)(E);
42 C.F.R. § 1001.601(b)(1). Ihave no authority to reduce or otherwise modify
this exclusion term.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Charles Okoye, M.D.,
(OI File No. L-10-40617-9),

Petitioner,
v.
The Inspector General.
Docket No. C-15-3180
Decision No. CR4495
Date: December 21, 2015
DECISION

Petitioner, Charles Okoye, M.D., appeals the determination of the Inspector General for
the U.S. Department of Health and Human Services (I.G.) to exclude him from
participating in Medicare, Medicaid, and all federal health care programs pursuant to
section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)) for 13
years. For the reasons explained below, I find that there is a legitimate basis for the LG.
to exclude Petitioner and that an exclusion period of 13 years is reasonable based on four
aggravating factors and the absence of any mitigating factors.

I. Case Background

The following facts are undisputed unless otherwise noted. Petitioner was a licensed
physician in the State of California who operated his own clinic, Charlton Main Medical
Clinic. Petitioner’s Brief (P. Br.) at 3; LG. Exhibit (Ex.) 3 at 7. In February 2013, a
grand jury returned a Second Superseding Indictment charging Petitioner, along with five
co-defendants, with one count of Conspiracy to Commit Health Care Fraud; 17 counts of
Health Care Fraud and Aiding and Abetting; and three counts of Illegal Remunerations
for Health Care Referrals, in violation of 18 U.S.C. §§ 1349, 1347, 2(b), and 42 U.S.C.
1320a-7b(b)(2). LG. Ex. 2. Petitioner entered into a plea agreement with the U.S.
Attorney’s Office for the Central District of California, which he signed on July 28,
2014.' LG. Ex. 3. Based on the plea agreement, Petitioner pled guilty to one count of
the Second Superseding Indictment for Conspiracy to Commit Health Care Fraud in
violation of 18 U.S.C. § 1349. Id. at 1-2. Petitioner’s guilty plea was accepted and
adjudicated. I.G. Ex. 4.

The Indictment to which Petitioner pled guilty states that:

[In or about November 2008 and in or about November 2011 [Petitioner] a
licensed physician and enrolled Medicare provider, referred more than 200
Medicare beneficiaries to Adelco [Adelco Medical Distributors, Inc. was a
durable medical equipment (DME) supplier enrolled in the Medicare
program] for DME, primarily power wheelchairs (“PWCs”), from his
medical clinic . . . [Petitioner] also billed Medicare for services he allegedly
provided to approximately 150 of those beneficiaries.

1.G. Ex. 2 at 2-3. The Indictment states further that Petitioner created:

fraudulent patient files that included PWC prescriptions and false
statements in face-to-face examination forms . . . purporting to support the
medical need for the DME, even though [Petitioner] knew the beneficiaries
did not medically need PWCs and even though [Petitioner] never even
examined some of the beneficiaries . . . . [Petitioner] would direct the
patients to Adelco to fill the prescriptions, knowing that Adelco would bill
Medicare for the provision of that DME.

1G. Ex. 2 at 6-7; see also I.G. Ex. 3 at 8.

The plea agreement outlines the conduct that formed the basis of Petitioner’s guilty plea
and his subsequent conviction. I.G. Ex. 3. As part of his plea agreement Petitioner
admitted that he was involved in a conspiracy to commit health care fraud. Jd. at 4-5.
Petitioner admitted that he referred approximately 204 Medicare beneficiaries to Adelco
for power wheelchairs for which claims for services were billed to Medicare. Id. at 8.
Petitioner admitted that Adelco billed Medicare for DME claims for the Medicare
beneficiaries whom he referred to Adelco, and Medicare paid Adelco approximately
$824,566 for those claims. Id. at 9.

The plea agreement shows that Petitioner was also involved in other fraudulent DME
referrals. Specifically, Petitioner admitted that at the same time he was referring
Medicare beneficiaries to Adelco, he also was prescribing medically unnecessary DME,

' On August 20, 2014, the parties amended paragraph 4.b. of the agreement. However,
that amendment relates to the date Petitioner may petition for reinstatement of his
medical license and does not otherwise change other parts of the agreement.
such as power wheelchairs for another DME supply company, Esteem Medical Supply.
Id. Petitioner admitted that during the time period at issue he referred 21 Medicare
beneficiaries to Esteem for DME, and in turn, Esteem billed Medicare and Medicare paid
about $76,625 on those claims. /d. at 9. The terms of the plea agreement included
Petitioner paying the ordered restitution for the loss to the Medicare program. Jd. at 5.

On December 8, 2014, Petitioner entered his guilty plea, and on the same day the U.S.
District Court for the Central District of California accepted it and entered judgment of
conviction against him. I.G. Ex. 4. The court sentenced Petitioner to 24 months of
incarceration; three years of supervised release following his term in prison; payment of a
$100 special assessment; and restitution in the amount of $931,118.96 to the Centers for
Medicare & Medicaid Services (CMS), the federal agency that operates the Medicare
program. /d. at 1-2. Petitioner was held jointly and severally liable with Petitioner’s co-
defendant for the restitution to the extent that his co-defendant was subsequently
determined liable for the same victim losses. Jd. at 4.

The LG. notified Petitioner by letter dated April 30, 2015, that he was being excluded,
pursuant to section 1128(a)(1) of the Act, from participating in Medicare, Medicaid, and
all federal health care programs for a period of 13 years. The I.G. advised Petitioner that
the exclusion was based on his conviction in the U.S. District Court, Central District of
California, of a criminal offense related to the delivery of an item or service under
Medicare or a state health care program. The L.G. based the length of Petitioner’s
exclusion (eight years above the statutory five-year minimum exclusion period for
mandatory exclusion) on four aggravating factors: (1) the acts resulting in his conviction
caused, or were intended to cause, a financial loss to a government program of $5,000 or
more; (2) the acts resulting in his conviction were committed over a period of one year or
more; (3) the court’s sentence included incarceration; and (4) Petitioner had been the
subject of other adverse action by a state government agency and the adverse action was
based on the same set of circumstances that served as the basis for imposition of the
exclusion. I.G. Ex. 1.

Petitioner timely filed a request for hearing. I convened a prehearing conference with the
parties, which I summarized in my August 18, 2015 Order and Schedule for Filing Briefs
and Documentary Evidence (Scheduling Order). Pursuant to that Scheduling Order, I
asked the parties to answer the questions on the short-form briefs sent to them, together
with any additional arguments and supporting documents they wished to present. The
LG. filed his short-form brief (I.G. Br.) together with five exhibits (I.G. Exs. 1-5).
Petitioner filed a short-form brief together with one exhibit (P. Ex. 1). The I.G. filed a
reply (I.G. Reply). Neither party objected to the exhibits the opposing party filed, and I
admit I.G. Exs. 1-5 and P. Ex. | into the record.

In my Scheduling Order, I directed the parties to indicate in their briefs whether a hearing
would be necessary and, if so, to describe the testimony the parties wished to present, the
names of the witnesses they would call, and a summary of each witness’s proposed
testimony. Neither party indicated a hearing is necessary, and neither party offered any
witness testimony. I therefore decide this case based on the written record.

IL. Discussion

A. Issue

Petitioner did not challenge the I.G.’s basis for exclusion. Therefore, the only issue
before me is whether, pursuant to subsection 1128(a) of the Act and implementing
regulations, the I.G.’s exclusion of Petitioner from Medicare, Medicaid, and all federal
health care programs for 13 years is reasonable based on the prescribed aggravating and
mitigating factors.

B. Findings of Fact and Conclusions of Law

I. The parties do not dispute that the I.G. had a legitimate basis to
exclude Petitioner under section 1128(a)(1) of the Act.

The I.G. must exclude an individual where an individual has been convicted of a criminal
offense, and the criminal offense is related to the delivery of an item or service under
Medicare or a state health care program. Act § 1128(a)(1); see also 42 C.F.R.

§ 1001.101(a).

Here, on December 8, 2014, Petitioner pled guilty before the U.S. District Court, Central
District of California, to one count of Conspiracy to Commit Health Care Fraud in
violation of 18 U.S.C. § 1349. I.G. Exs. 3, 4. The court accepted Petitioner’s guilty plea
and entered judgment against him. I.G. Ex. 4. The finding of guilt and judgment of
conviction based upon Petitioner’s accepted guilty plea constitutes a conviction. See Act
§ 1128(i). Further, a conviction is related to the delivery of an item or service under
Medicare or Medicaid if there is a common sense connection or nexus between the
offense and the delivery of an item or service under Medicare or Medicaid. Berton
Siegel, D.O., DAB No. 1467 (1994). Petitioner does not dispute that the criminal offense
for which he was convicted, involving the billing of unnecessary medical equipment to
the Medicare program, related to the delivery of health care items under Medicare. P. Br.
at 1.

2. The I.G. must exclude Petitioner for a minimum of five years.

Five years is the minimum authorized period for a mandatory exclusion pursuant to
Section 1128(a). Act § 1128(c)(3)(B)(42 U.S.C. § 1320a-7(c)(3)(B)). Because there is
no dispute that a basis exists to exclude Petitioner pursuant to sections 1128(a)(1) of the
Act (42 U.S.C. § 1320a-7(a)(1)), Petitioner must be excluded for a minimum period of
five years. Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)).
3. The I.G. proved that four aggravating factors exist in this case that
justify lengthening the period of exclusion beyond the five-year statutory
minimum.

The regulations establish aggravating factors that the I.G. may consider to lengthen the
period of exclusion beyond the five-year minimum for a mandatory exclusion. 42 C.F.R.
§ 1001.102(b). Only if an aggravating factor justifies an exclusion longer than five years
may mitigating factors be considered as a basis for reducing the period of exclusion to no
less than five years. 42 C.F.R. § 1001.102(c). In this case, the I.G. established the
presence of four aggravating factors. I address these four aggravating factors below.

a. The acts resulting in Petitioner’s conviction caused a loss to a
government program of $5,000 or more.

The I.G. may increase the length of an exclusion if the acts resulting in the underlying
conviction caused, or were intended to cause, a loss to a government program or to one or
more entities of $5,000 or more. 42 C.F.R. § 1001.102(b)(1). The amount of any
restitution made will not be used to offset the amount of financial loss used in
considering this aggravating factor. Robert Seung-Bok Lee, DAB No. 2614, at 5 (2015).
The U.S. District Court for the Central District of California ordered Petitioner to pay
$931,118.96 in restitution to CMS based on the loss to the Medicare program that
resulted from Petitioner’s criminal conduct. I.G. Ex. 4 at 1.

Petitioner does not deny that he was ordered to pay restitution and that he agreed to
reimburse CMS in the amount of $931,118.96. P. Br. at 2. However, Petitioner argues
that the amount he agreed to pay is “grossly overstated” because it represents not just the
fraudulent claims billed to Medicare but all claims he billed to the program in the three-
year period at issue here. /d. at 2. Petitioner relies on the sentencing memorandum he
provided to the court prior to sentencing to support an assertion that the restitution
amount he was ordered to pay also represents claims that were legally submitted to
Medicare, and therefore, the total amount of restitution should not be considered as an
aggravating factor in increasing his period of program exclusion. P. Br. at 2; P. Ex. 1. A
review of Petitioner’s sentencing memorandum shows that Petitioner admitted that he
“was and is willing to accept responsibility for his conduct, including the obligation to
repay restitution in the amount of $931,118.” P. Ex. 1 at 5 (emphasis in original). In the
memorandum Petitioner states that he “has agreed to pay full restitution in the amount of
$931,118.06, even though this amount represents an inflated loss calculation.” Jd. at 7
4/4; 8-9. The Petitioner has not come forward, however, with his calculation of the actual
loss involving the fraudulent claims. The U.S. District Court received Petitioner’s
memorandum prior to deciding Petitioner’s sentence, and the presiding judge ordered
Petitioner to pay CMS the full restitution of $931,118.96. IG. Ex. 4 at 1.

Petitioner’s underlying conviction is not reviewable or subject to collateral attack before
me, whether on substantive or procedural grounds. 42 C.F.R. § 1001.2007(d). The
Departmental Appeals Board (Board) has affirmed that an attempt to contest the
restitution figure is an impermissible collateral attack under 42 C.F.R. § 1001.2007(d)
because a plea agreement is a final disposition of the matter. Michael D. Miran, DAB
No. 2469, at 4 (2012); see also Lyle Kai, R.Ph., DAB No. 1979, at 8(2005) (“Excluding
individuals based on criminal convictions ‘provides protection for federally funded
programs and their beneficiaries and recipients, without expending program resources to
duplicate existing criminal processes.’” (internal cite omitted)). Thus, I may not consider
Petitioner’s arguments attacking his predicate conviction, including the restitution
amount to which he agreed.

It is well established that restitution is a recognized measure of program loss. See, e.g.,
Craig Richard Wilder, DAB No. 2416, at 9 (2011). Additionally, governmental loss is an
“exceptional aggravating factor” when, as here, the loss is “very substantially greater than
the statutory minimum.” Jeremy Robinson, DAB No. 1905, at 11(2004); Donald A.
Burstein, Ph.D., DAB No. 1865, at 12 (2003). The restitution here, approximately 187
times greater than the $5,000 minimum needed to support an increase to the exclusion
period, must be afforded substantial weight in support of a significant increase to the
mandatory minimum period of exclusion.

b. The acts resulting in Petitioner’s conviction occurred over a
period of one year or more.

The I.G. may increase the length of an exclusion if the acts resulting in the underlying
conviction occurred 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 November 2008 and
continued through November 2011, a period significantly exceeding the minimum one-
year period required to trigger this aggravating factor. LG. Exs. 3, at 6; 2, at 2-3.

The 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....” Donald A. Burstein, Ph.d., DAB No. 1865, at 8 (2003). In Burstein, the
Board accorded enough weight to sustain a 15-year exclusion to the fact that the
underlying criminal conduct was committed for “slightly more” than one year. Burnstein
at 12. The record before me shows that Petitioner knowingly caused the submission of
fraudulent claims for services to the Medicare program for approximately three years.
1.G. Ex. 3 at 4-5. Petitioner also admitted that during that three-year period he was also
knowingly engaged in the same conduct with another DME company, Esteem Medical
Supply; he received illegal remunerations for the referrals from the owner of that
company; and Esteem billed Medicare $128,221 for DME claims that were related to 21
Medicare beneficiaries Petitioner referred to Esteem. I.G. Ex. 3 at 9. Here, the length of
Petitioner’s conduct shows prolonged lack of integrity that supports the I.G.’s decision to
increase the exclusion period to more than the minimum five years.

Petitioner requests that I consider that for over 12 years, prior to November 2008, he
practiced medicine without engaging in illegal conduct, and prior to his participation in
the kickback scheme, he operated his own clinic for 9 years providing medical services to
poor and underinsured patients in an “ethnically diverse area” in Los Angeles. P. Br. at
3. Petitioner submitted nine letters attesting to his character for my consideration. P. Ex.
1 at 19-30. However, I simply do not have the authority to reduce the LG.’s period of
exclusion based upon equitable considerations, such as for a person’s good conduct or
good character. See Donna Rogers, DAB No. 2381, at 6 (2011).

c. The court’s sentence of Petitioner included incarceration.

The I.G. may increase the length of an exclusion if the court’s sentence includes a period
of incarceration. 42 C.F.R. § 1001.102(b)(5). Incarceration is defined as “imprisonment
or any type of confinement with or without supervised release, including, but not limited
to, community confinement, house arrest and home detention.” 42 C.F.R. § 1001.2.
Here, the U.S. District Court for the Central District of California sentenced Petitioner to
24 months in prison and a three-year period of supervised release to follow based on his
conviction for conspiracy to commit health care fraud. LG. Exs. 3, 4.

The L.G. has established the presence of this aggravating factor. A sentence of two years
for a crime demonstrates the severity of Petitioner’s conviction. Petitioner does not
challenge the I.G.’s reliance on this aggravating factor to lengthen his period of
exclusion. P. Br. at 2-4. Accordingly, this aggravating factor also supports the I.G.’s
decision of an increase beyond the five-year minimum exclusion period.

d. Petitioner was the subject of other adverse action by a State
agency which was based on the same circumstances that resulted
in Petitioner’s conviction.

The I.G. may increase the length of an exclusion if the individual has been the subject of
any other adverse action by any State government agency, if the adverse action is based
on the same set of circumstances that serves as the basis for imposition of the exclusion.
42 C.F.R. § 1001.201(a)(9). Here, the California Department of Health Care Services,
which administers the Medi-Cal program (the California Medicaid program), also
suspended Petitioner based on Petitioner’s conviction for conspiracy to commit health
care fraud on December 8, 2014, in the U,S, District Court for the Central District of
California. 1.G. Ex. 5 at 1. Therefore, Petitioner was the subject of an adverse action of a
state government agency that was based on the same set of circumstances that forms the
basis for imposing the exclusion. I.G. Ex. 4. This state action was a legitimate basis
upon which the I.G. may lengthen Petitioner’s exclusion beyond the mandatory minimum
of five years. Petitioner does not challenge the I.G.’s reliance on this aggravating factor
to lengthen his period of exclusion. P. Br. at 2-4.

e. No mitigating factors justify reducing the period of exclusion.

Petitioner has conceded that none of the authorized mitigating factors under 42 C.F.R.

§ 1001.102(c) are present in his case. P. Br. at 4. Nevertheless, he argues that although
he deserves to be punished for his crime, a 13-year exclusion is unreasonable. P. Br. at
4. Petitioner asserts that: he did not realize his conduct was illegal; once he realized his
conduct was illegal he voluntarily ceased his participation in the wrongful conduct three
years before he was arrested; he accepted responsibility for his actions and signed the
plea agreement; after he stopped his involvement in the conspiracy he continued to
provide medical services to patients without making false claims; and he has already
served time in prison and agreed to surrender his license. P. Br. at 3-4. Petitioner wants
to be allowed to apply for reinstatement after the five-year minimum period. Id. at 4.
However, the regulations specifically outline what factors may be considered mitigating,
and none of Petitioner’s arguments relates to any of those mitigating factors. See 42
C.F.R. § 1001.102(c).

4. Based on the four aggravating factors in this case, and the absence of
any mitigating factors, an exclusion of 13 years is within a reasonable
range.

To determine whether an exclusion period is within a reasonable range, an ALJ must
weigh any aggravating and mitigating factors in the case and evaluate the quality of the
circumstances surrounding the factors. Vinod Chandrashekhar Patwardhan, M.D., DAB
No. 2454, at 6 (2012) (citing Jeremy Robinson, DAB No. 1905, at 11 (2004)). There is
no “rigid formula” for the I.G. or an ALJ to determine an exact exclusion period when
weighing and evaluating aggravating and mitigating factors. Jd. at 6. Rather, the ALJ
must review the factors de novo to determine whether the exclusion imposed is within a
“reasonable range” of exclusion periods. Jospeh M. Rukse, Jr., R.Ph., DAB No. 1851, at
11, (citing Gary Alan Katz, R.Ph., DAB No. 1842, at 8 n.4 (2002)). A “reasonable
range” is “a range of exclusion periods that is more limited than the full range authorized
by the statute and that is tied to the circumstances of the individual cases.” Robinson,
DAB No. 1705, at 5 (quoting Rukse, DAB No. 1851, at 11).

Petitioner’s crimes resulted in significant financial losses to the Medicare program. As I
discussed above, the U.S. District Court ordered Petitioner to pay $931,118.96 in
restitution to CMS. 1.G. Ex. 4 at 1. The Board has characterized program loss amounts
substantially greater than the $5,000 statutory threshold “as an ‘exceptional aggravating
factor’ entitled to significant weight.” Sushil Anniruddh Sheth, M.D., DAB No. 2491, at
7 (2012), citing Robinson, at 12; Donald A. Burstein, Ph.D., DAB No. 1865, at 12 (2003).
The financial losses here alone support the significant increase to the minimum period of
exclusion that the I.G. imposed.

Petitioner’s criminal conduct also took place over a three-year period. Previously, the
Board has accorded enough weight to sustain a 15-year exclusion to the fact that
underlying criminal conduct was committed for “slightly more” than one year. Burstein,
DAB No. 1865 at 12. Here, as in Burstein, the length of Petitioner’s criminal conduct
shows prolonged lack of integrity that was more than just “short-lived” and, as I have
noted above, supports an increase from the five-year minimum exclusion period to 13
years.

Another proven aggravating factor relates to Petitioner’s prison sentence of 24 months for
his crimes. Petitioner’s sentence represents substantial jail time which indicates the
severity of the scheme in which Petitioner was involved. The Board once determined
that a nine-month period of incarceration was “relatively substantial,” and supported an
eight-year exclusion period. Jason Hollady, M.D., DAB No. 1855, at 12 (2002). Here,
the length of Petitioner’s incarceration was almost three times that imposed in Hollady.
Accordingly, this aggravating factor bears substantial weight and supports an increase
beyond the five-year minimum exclusion period to 13 years.

As noted above, Petitioner was the subject of another adverse action of the California
Department of Health Care Services when it suspended Petitioner’s program participation
in the Medi-Cal program. I.G. Ex. 4. The stage agency based the program suspension

on the same set of circumstances that serve as the basis for imposition of the federal
exclusion. This aggravating factor also supports an increase beyond the five-year
minimum exclusion period to 13 years.

Accordingly, I find that the severity of the four aggravating factors and the absence of
any mitigating factors support an increase in the length of Petitioner’s exclusion period
beyond the five-year minimum. A 13-year exclusion period is within a reasonable range
based upon the aggravating factors. Petitioner’s exclusion became effective on May 20,
2015, which is 20 days from the date of the I.G.’s notice of exclusion. See 42 C.F.R.

§ 1001.2002(b).

II. Conclusion
For the foregoing reasons, the I.G. has a basis to exclude Petitioner from participating in

Medicare, Medicaid, and all federal health care programs. After considering all four
aggravating factors and the absence of any mitigating factors, an exclusion of 13 years is
10

within a reasonable range. Therefore, I sustain the I.G.’s exclusion of Petitioner for 13
years, effective May 20, 2015.

/s/
Joseph Grow
Administrative Law Judge