Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Rudra Sabaratnam, M.D, and )
Robert I. Bourseau, ) Date: September 25, 2007
)
Petitioners, )
)
-V.- ) Docket Nos: C-05-520
) C-05-521
The Inspector General. ) Decision No. CR1660
)
DECISION

In these proceedings, based on section 1128(b)(7) of the Social Security Act (Act), 42
U.S.C. § 1320a-7(b)(7), [ sustain the determination of the Inspector General (I.G.) to
exclude Petitioners Rudra Sabaratnam, M.D. and Robert |. Bourseau from participating in
Medicare, Medicaid, and all federal health care programs. | sustain as reasonable the
I.G.'s determination to set the period of Petitioner Bourseau’s exclusion at 15 years.
Because | find and conclude that the 15-year period of exclusion the [.G. proposes for
Petitioner Sabaratnam is not reasonable, I here reduce that period of exclusion to 10
years.

1. Procedural History

This case is before me pursuant to Petitioner Sabaratnam’s Request for Hearing dated
August 13, 2005 (docketed as C-05-520) and Petitioner Bourseau’s Request for Hearing
dated August 13, 2005 (docketed as C-05-521). By their Requests for Hearing,
Petitioners seek relief from the 1.G.’s determination to exclude each of them from
participation in Medicare, Medicaid, and all other Federal health care programs for a
period of 15 years. The [.G.’s determination invokes the authority set out in section
2

1128(b)(7) of the Act, 42 U.S.C. § 1320a-7(b)(7), and 42 C.F.R. § 1001.901, and is based
on Petitioners’ alleged conduct contrary to the terms of sections 1128A(a)(1)(A) and (B)
of the Act, 42 U.S.C. §§ 1320a-7a(a)(1)(A) and (B). See I.G. June 14, 2005 exclusion
notices.

In May 2003, a civil action arising from the same conduct that forms the basis of the
exclusion actions now before me was commenced in the United States District Court for
the Southern District of California, designated as No. 03-cv-907-BEN (WMC). The
United States Department of Justice (DOJ) elected to pursue that suit on behalf of the
United States against Bourseau and Sabaratnam, and in it relied principally on the False
Claims Act (FCA), 32 U.S.C. § 3729 et seq. Most of the factual assertions relied on by
the United States in that case are in all material respects identical to the factual assertions
relied on by the I.G. in this case. The I.G. was aware of the pending FCA lawsuit when
he sent notice on June 14, 2005 of his intention to exclude Petitioners.

At the suggestion of the parties in this case, | decided to wait in proceeding with this
exclusion matter pending the results of a conference undertaken by the parties in the FCA
litigation to discuss settling their civil action. However, as the parties were not able to
reach agreement, the FCA lawsuit did not settle, and thus I scheduled a prehearing
conference in this matter. That conference was held with the parties in this case on
January 13, 2006, and an order establishing filing procedures was issued on January 19,
2006. On February 22, 2006, Petitioners filed a notice informing me of their substitution
of attorney of record. Subsequently, by ruling issued April 4, 2006, the two hearing
requests were consolidated under Docket No. C-05-520. The parties completed their
prehearing exchanges,' and October 30, 2006 was established as the hearing date in this
case by Notice of July 17, 2006. Hearing subpoenas were issued on September 18, 2006.

On September 29, 2006, Findings of Fact and Conclusions of Law (Findings and
Conclusions) were filed by the United States District Judge in the parallel FCA civil case,
No. 03-cv-907-BEN (WMC). Those Findings and Conclusions were reached by the
District Judge after a six-day bench trial held in July, 2006.° Pursuant to Federal Rule of

' The 1G. filed proposed exhibits (1.G. Exs.) 1-229.

° United States District Judge Roger T. Benitez, United States District Court for
the Southern District of California, issued a decision finding that Petitioners Bourseau
and Sabaratnam had violated the civil False Claims Act by causing Bayview to submit
false or fraudulent costs to Medicare for payment in Bayview’s Medicare cost reports for
1997-1999. A judgment was entered against Petitioners in the amount of $23,776,332 for
treble damages and $31,000 in civil penalties. The Court found that damages to the
3

Civil Procedure 59(e), both sides in No. 03-cv-907-BEN (WMC) filed motions to alter or
amend the United States District Court’s Findings and Conclusions. On October 17,
2006, proceedings in this matter were stayed pending the United States District Court’s
ruling on the parties’ Rule 59(e) motions, and, for obvious reasons, the hearing in this
case scheduled to begin on October 30, 2006 was vacated. On December 1, 2006, by
agreement of the parties to the FCA action, the United States District Judge reduced the
damages and judgment against Bourseau and Sabaratnam by approximately one-third.*

With the conclusion of the litigation in the United States District Court, | determined that
this case should no longer remain stayed. Subsequently, after discussions with the parties,
by Order issued February 6, 2007 I directed the parties to file their cross motions for
summary judgment and briefs in support of their motions. Petitioners filed their motions
and brief on April 19, 2007, accompanied by two documents which I have designated as
P. Ex. 7 and P. Ex. 8. The LG. filed his motion and brief on April 20, 2007. With his
motion the [.G. filed a 1,258-page hearing transcript of the six-day bench trial in the FCA
civil case. It has been marked Administrative Law Judge (ALJ) Ex. | and is admitted to
the evidentiary record of this case with that designation. The parties then filed answer
briefs: Petitioners’ were filed on May 21, 2007, and the I.G’s on May 22, 2007.
Attached to his Motion for Summary Judgment, the I.G. submitted three additional
exhibits, LG. Exs. 230-232.

Medicare program were $7,925,444; that Petitioners had engaged in a pattern of conduct;
and that they acted with a high degree of culpability by engaging in a conspiracy to
defraud the Medicare program. United States v. Bourseau, et al. No. 03-cv-907-BEN
(WMC), 2006 WL 2961105 (S.D. Cal. Sept. 29, 2006).

* Damages were reduced from $7,925,444 to $5,219,195, and the total judgment
from $23,776,332 to $15,657,585. The $31,000 in civil penalties remained the same. See
Order Granting Plaintiff's and Defendants’ Rule 59(e) Motions to Alter or Amend the
Judgment, No. 03-cv-907-BEN, 2006 WL 3949169 (S.D. Cal. Dec. 1, 2006).
4

The result in the FCA litigation has been appealed to the United States Court of Appeals
for the Ninth Circuit, where it is pending as Nos. 06-56741 and 06-56743. With his May
22, 2007 reply brief, the 1.G. submitted the United States’ brief to the Ninth Circuit in that
pending appeal.* Petitioners subsequently submitted copies of their briefs to the Ninth
Circuit in that appeal.”

Oral argument was held in this matter on August 9, 2007,° and the record in this matter
was closed for purposes of 42 C.F.R. § 1005.20(c) on that date by Order of August 14,
2007.

I admit the following exhibits into evidence: 1.G. Exs; 1-232; P. Exs. 1-8; and ALJ Exs.
1-3. The United States District Court’s September 29, 2006 Findings of Fact and
Conclusions of Law and Judgment appear in this record as ALJ Ex. 2, and its December
1, 2006 Order amending the Findings of Fact and Conclusions of Law and Judgment
appears as ALJ Ex. 3.

II. Issues

The issues before me are limited to those noted at 42 C.F.R. § 1001.2007(a)(1). In the
specific context of this record, they are:

* See DOJ’s Brief for the Appellee in Response to the Opening Brief of
Defendants/Appellants Robert I. Bourseau and RIB Medical Management Services, Inc.,
and of Defendants/Appellants Rudra Sabaratnam and Navatkuda, Inc. United States v.
Rober I. Bourseau, et al, No. 06-56741 (9" Cir. 2006), and United States v. Rudra
Sabaratnam, et al., No. 06-56743, (9" Cir. 2006).

> See Opening Brief of Defendants/Appellants Rudra Sabartnam, M.D. and
Navatkuda, Inc; and Reply Brief of Defendants/Appellants Rudra Sabartnam, M.D. and
Navatkuda, Inc.; see also, Opening Brief of Defendants/Appellants Robert [ Bourseau
and RIB Medical Management Services, Inc.; Reply Brief of Defendants/Appellants
Robert I. Bourseau and RIB Medical Management Services, Inc. United States v. Robert
7. Bourseau, etal., No. 06-56741 (9" Cir. 2006), and United States v. Rudra
Sabaratnam, et al., No. 06-56743, (9" Cir. 2006).

° A transcript of the oral argument was provided by the court reporting service
from whom the parties had opportunity to order a copy.
5

1. Whether the I.G. has a basis for excluding Petitioners from participating
in Medicare, Medicaid, and all other federal health care programs pursuant
to section 1128(b)(7) of the Act; and

2. Whether the length of the exclusion proposed as to cach Petitioner is
unreasonable.

With the sole exception of the reasonableness of the period of exclusion proposed in the
case of Petitioner Sabaratnam, | resolve these issues in favor of the 1.G.’s position, as I
shall explain in detail in the following discussion.

III. Controlling Statutes and Regulations

Section 1128A of the Act, 42 U.S.C. § 1320a-7a, authorizes the Secretary of Health and
Human Services (Secretary) to exclude any person who knowingly presents or causes to
be presented, to an officer, employee or agent of the United States, or of any State agency,
a claim for items or services under Medicaid and Medicare which that person knows or
should know was not provided as claimed, including any person who engages in a pattern
or practice of presenting or causing to be presented a claim for an item or service that is
based on a code that the person knows or should know will result in a greater payment to
the person than the code the person who knows or should know is applicable to the item
or service actually provided. Section 1128A of the Act establishes penalties for, among
other things, the filing of false and fraudulent claims in connection with items or services
provided under the Medicare and Medicaid programs.

The Medicare and Medicaid Patient and Program Protection Act of 1987 (MMPPA), Pub.
L. No. 100-93, added section 1128(b)(7) to the Act. The legislative history of this section
explains that Congress intended to provide the Secretary with authority to exclude a
provider or entity that committed an act described in section 1128A of the Act, and that
the Secretary could exercise this authority to exclude without imposing any civil monetary
or criminal penalties. S. Rep. No. 109, 100th Cong., Ist Sess. at 9-10 (1987). The LG. is
under no obligation to proceed under the permissive exclusion provisions of section
1128(b)(7) of the Act against a person who might have committed fraud. However, once
such a person has been convicted of a program-related offense, exclusion is

mandatory under section 1128(a).’

’ T emphasize, for purposes of clarity, that in the case before me the LG. is seeking
to exclude Petitioners under its permissive exclusion authority based on section
1128(b)(7) and not the mandatory exclusion provisions of section 1128(a).
6

The terms of 42 C.F.R. § 1001.2007(d) provide that in exclusion appeals in this forum:

When the exclusion is based on the existence of a criminal conviction or a
civil judgment imposing liability by Federal, State or local court, a
determination by another Government agency, or any other prior
determination where the facts were adjudicated and a final decision was
made, the basis for the underlying conviction, civil judgment or
determination is not reviewable and the individual or entity may not
collaterally attack it either on substantive or procedural grounds in this
appeal.

There are statutory and regulatory standards that guide the determination of the length of
any period of exclusion imposed pursuant to section 1128(b)(7) of the Act. The terms of
section 1128A(d) of the Act, 42 U.S.C. § 1320a07a(d), require that the Secretary (and his
delegate, the I.G.) “shall take into account ~”

(1) the nature of claims and the circumstances under which they
were presented,

(2) the degree of culpability, history of prior offenses, and financial
condition of the person presenting the claims, and

(3) such other matters as justice may require.

This somewhat general, but nevertheless mandatory, statutory language is restated with
more precision in the implementing regulations at 42 C.F.R. § 1001.901 which provide:

(a) Circumstance for exclusion. The OIG [Office of the Inspector General]
may exclude any individual or entity that it determines has committed an act
described in section 1128A of the Act. The imposition of a civil money
penalty or assessment is not a prerequisite for an exclusion under this
section.

(b) Length of exclusion. In determining the length of an exclusion imposed
in accordance with this section, the OIG will consider the following
factors—
(1) The nature and circumstances surrounding the actions that are the basis
for liability, including the period of time over which the acts occurred, the
number of acts, whether there is evidence of a pattern and the amount
claimed;

(2) The degree of culpability

(3) Whether the individual or entity has a documented history of criminal,
civil or administrative wrongdoing (The lack of any prior record is to be
considered neutral);

(4) The individual or entity has been the subject of any other adverse action
by any Federal, State or local government agency or board, if the adverse
action is based on the same set of circumstances that serves as the basis for
the imposition of the exclusion; or

(5) Other matters as justice may require.

The regulation at 42 C.F.R. § 1001.901, does not provide for the consideration of
specified conditions or acts of Petitioner as mitigating factors in determining the length of
the exclusion, unlike the regulations for other circumstances leading to exclusion, which
do so provide. Compare 42 C.F.R. § 1001.901(b) and 42 C.F.R. § 1001.701(d). The
legislative history of the final rule relating to the applicable regulations explains that,
generally, aggravating and mitigating factors are applied to situations where there is either
a benchmark period of exclusion or some other specific period of time that would
otherwise set the exclusion period. 57 Fed. Reg. 3298, 3307 (1992). The legislative
history further explains that no such benchmark period was set forth in the regulation for
section 1001.901, so that “it is appropriate to look only at factors that would help
determine an appropriate period of exclusion given the particular facts of each case.”
Moreover, exclusions pursuant to section 1001.901 are considered non-derivative
exclusions, meaning the proposed exclusion is based on determinations of misconduct
that originate with the I.G. and require the I.G., if challenged, to make a prima facie
showing that the improper behavior did occur. 57 Fed. Reg. 3298, 3299 (1992); 55 Fed.
Reg. 12,205, 12,206 (1990).

For a non-derivative exclusion under section 1001.901, as distinguished from other types
of exclusion actions, the I.G. issues a notice of his proposal to exclude, but the exclusion
is not effective until the ALJ hears the matter and issues a decision affirming the [.G.’s
8

determination to exclude. The sole legal mechanism by which an exclusion can be made
effective before the ALJ issues a decision requires the [.G. to reach an explicit
determination “that the health or safety of individuals receiving services under Medicare
or any of the State health care programs warrants the exclusion taking place prior to the
completion of an ALJ proceeding ....” 42 C.F.R. § 1001.2003(b)(2) and (c). The I.G.
made no such determination here.

IV. Findings of Fact and Conclusions of Law

Having considered the entire record, the arguments and submissions of the parties, and
being advised fully herein, I find and conclude as follows:

A. General Findings and Conclusions.

1. I reaffirm each and every ruling regarding the admission of transcribed testimony,"
exhibits, and documents entered into the record, and all rulings on substantive and
procedural matters made or announced during the entire course of these proceedings.

2. For purposes of these proceedings, I have taken official notice of the statutes and
regulations of the United States and the State of California; the regulations of the
Secretary; and the regulations of the California Medicare program known as MediCal as
they existed at the time of the cause of action in this matter.

3. The Act authorizes the Secretary to delegate authority granted under section 1128A of
the Act to the L.G. to initiate exclusion actions. Act, §§ 1128AQ)(1) and (2), 42 U.S.C.
§§ 1320a-7a(j)(1) and (2); see also 59 Fed. Reg. 52,967 (1994).

4. The Act defines “agency of the United States” to include any contractor acting as a
fiscal intermediary, carrier, or fiscal agency for a Federal health care program. Act,
§ 1128A(i)(4).

* This specifically includes, but of course is not limited to, transcripts from the
civil FCA trial in United States v. Bourseau, et al., No. 03-CV-907-BEN (WMC), 2006
WL 2961105 (S.D. Cal. Sept. 29, 2006), and the August 9, 2007 Oral Argument in this
case.
9

5. The Act and implementing regulation define “claim” to mean an application for
payments for items and services under a Federal health care program. For claims based
on costs, the Act defines “item or service” to include any entry in the cost report, books of
account or other documents supporting such claim. Act, § 1128A(i)(2)and (3), 42 U.S.C.
§§ 1320a-7a(i)(2) and (3); 42 C.F.R. § 1003.101.

6. The Act and implementing regulations contain slightly different language with
identical meaning. Under section 1128A(a)(1) of the Act, the so-called Civil Monetary
Penalty Law (CMPL), liability for sanctions attach when a person “knowingly presents or
causes to be presented” a claim that the person “knows or should know” is false. Under
section 42 C.F.R. § 1003.102(a)(1)-(4), liability attaches when a person “has knowingly
presented or caused to be presented” a claim that the person “knows or should have
known” to be false.

7. The liability standard encompassed by the FCA, the CMPL, and the regulations are in
all material respects identical, and encompass actual knowledge, deliberate ignorance, or
reckless disregard. Wesley J. Hammer, et al., DAB No. 1693, n.2 (1999).

8. The actions that form the basis of the I.G.’s exclusion against both Petitioners in this
case were presented or caused to be presented after Congress’ 1987 enactment of the
Omnibus Budget Reconciliation Act (OBRA); therefore, the standard of knowledge of the
truthfulness or falsity of all claims at issue in this case is “knows or should know” and
“knew or should have known.” Pub. L. 100-203, section 41 18(e) (1987); Thomas M.
Horras and Christine Richards, DAB CR1300 (2005), aff"d DAB No. 2015 (2006); aff'd
Thomas M. Horras and Christine Richards v. Leavitt, Nos. 06-2115 and 06-2124 (8th Cir.
Aug. 7, 2007).

9. In proccedings brought pursuant to section 1 128A of the Act and 42 C.F.R.

§ 1001.901, a petitioner bears the burden of going forward and the burden of persuasion
with respect to any affirmative defenses and any mitigating factors; and the .G. bears the
burden of going forward and the burden of persuasion with respect to all other issues. 42
C.F.R. §§ 1005.15(b)(1) and (2).

10.° In these proceedings brought pursuant to section 1128A of the Act and 42 C.F.R.

§ 1001.901, the I.G. has the burden of proving, by a preponderance of the evidence, that
each petitioner knowingly presented or caused to be presented, to an agency of the United
States, claims for items or services which the petitioner knew or should have known were
not provided as claimed or were false or fraudulent. 42 C.F.R. § 1005.15(b)(2) and (d).
i)

11. For the proposed specific exclusions to be sustained in this case, the I.G. must prove
by a preponderance of the evidence that: (1) each Petitioner (a “person”), (2) “presented
or caused to be presented,” (3) the Medicare and Medicaid “claims” in issue, (4) to the
Medicare and/or Medicaid program (“agency”), (5) for medical “items or services” when,
in fact, (6) these items and services were “not provided as claimed” or were false and
fraudulent, and (7) the Petitioner “knew or should have known” that the claims were not
provided as claimed or were false or fraudulent. Thomas M. Horras and Christine
Richards, DAB CR1300, aff'd DAB No. 2015; aff'd Thomas M. Horras and Christine
Richards v. Leavitt, Nos. 06-2115 and 06-2124.

12. On September 29, 2006, the United States District Court for the Southern District of
California entered findings of fact and conclusions of law in United States v. Bourseau, et
al., No. 03-cv-907-BEN (WMC). In that FCA litigation, the legal and factual issues
before me now are identical to those alleged and proven in the United States District
Court; those issues were litigated in the United States District Court action by the parties
against whom preclusion is asserted here, Petitioners Sabaratnam and Bourseau; the FCA
issues have been determined or resolved by a valid and final judgment in the United
States District Court; and the determination of the FCA issues in the FCA litigation was a
critical and necessary part of the judgment in the FCA action. Because the United States
District Court reached its final, full determination of identical issues after they had been
fully litigated, and because its resolution of all those issues was essential to the United
States District Court’s valid final judgment, its resolution of those issues precludes
Petitioners from relitigating those issues here. United States v. Bourseau, et al., 2006 WL
2961105.

13. [adopt as my own each of the separate findings of fact and conclusions of law recited
by the United States District Court in United States v. Bourseau, et al., No. 03-cv-907-
BEN (WMC), insofar as each may be relevant and material to the issues before me in this
case. 42 C.F.R. § 1001.2007(d). I have adopted, and I shall, for purposes of clarity,
repeat some of those findings and conclusions below as they apply specifically to each
Petitioner, but [ emphasize that to whatever extent each separate finding of fact and
conclusion of law announced by the United States District Court in United States v.
Bourseau, et al., No. 03-cv-907-BEN (WMC) is relevant and material to the issues before
me, it is adopted and announced here in this paragraph.

B. Findings and Conclusions Applicable to Petitioner Sabaratnam.

1. On June 14, 2005, the I.G. notified Petitioner Sabaratnam that he was to be excluded
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15S years, based on the authority set out in section 1128(b)(7) of the Act.
Il

2. Petitioner Sabaratnam perfected his appeal from the I.G.’s action by filing a hearing
request on August 13, 2005. His appeal was docketed as C-05-520.

3. By my Order of April 4, 2006, the appeals of Petitioner Sabaratnam, C-05-520, and
Petitioner Bourseau, C-05-521, were consolidated as C-05-520.

+. On the basis of each of the separate findings of fact and conclusions of law recited by
the United States District Court in United States v. Bourseau, et al., No. 03-cv-907-BEN
(WMC), as amended by its Order of December 1, 2006, and as adopted by me for
purposes of these proceedings as set out in Finding 13 above, I find and conclude that
there is a basis for the [.G.’s proposed exclusion of Petitioner Sabaratnam from
participation in Medicare, Medicaid, and all other federal health care programs, pursuant
to section 1128(b)(7) of the Act.

5. [have reviewed the length of the proposed period of exclusion of Petitioner
Sabaratnam in terms of the factors set out in section 1128A(d) of the Act, 42 U.S.C.

§ 1320a-7a(d), and the applicable regulations at 42 C.F.R. § 1001.901. On the basis of
each of the separate findings of fact and conclusions of law recited by the United States
District Court in United States v. Bourseau, et al., No. 03-cv-907-BEN (WMC), as
amended by its Order of December 1, 2006, and as adopted by me for purposes of these
proceedings as set out in Finding 13 above, I find and conclude that the proposed period
of 15 years is not reasonable. | find and conclude that a period of exclusion of 10 years is
reasonable.

C. Findings and Conclusions Applicable to Petitioner Bourseau.

1. On June 14, 2005, the I.G. notified Petitioner Bourseau that he was to be excluded
from participation in Medicare, Medicaid, and all other federal health care programs for a
period of 15 years, based on the authority set out in section 1128(b)(7) of the Act.

2. Petitioner Bourseau perfected his appeal from the I.G.’s action by filing a hearing
request on August 13, 2005. His appeal was docketed as C-05-521.

3. By my Order of April 4, 2006, the appeals of Petitioner Sabaratnam, C-05-520, and
Petitioner Bourseau, C-05-521, were consolidated as C-05-520.

4. On the basis of each of the separate findings of fact and conclusions of law recited by
the United States District Court in United States v. Bourseau, et al., No. 03-cv-907-BEN
(WMC), as amended by its Order of December 1, 2006, and as adopted by me for
purposes of these proceedings as set out in Finding 13 above, I find and conclude that
12

there is a basis for the I.G.’s proposed exclusion of Petitioner Bourseau from participation
in Medicare, Medicaid, and all other federal health care programs, pursuant to section
1128(b)(7) of the Act.

5. [have reviewed the length of the proposed period of exclusion of Petitioner Bourseau
in terms of the factors set out in section 1128A(d) of the Act, 42 U.S.C.

§ 1320a-7a(d), and the applicable regulations at 42 C.F.R. § 1001.901. On the basis of
each of the separate findings of fact and conclusions of law recited by the United States
District Court in United States v. Bourseau, et al., No. 03-cv-907-BEN (WMC), as
amended by its Order of December 1, 2006, and as adopted by me for purposes of these
proceedings as set out in Finding 13 above, I find and conclude that the proposed period
of 15 years is reasonable.

V. Discussion
A. There is a basis for the I.G.’s exclusion of Petitioners.

The facts in the record before me leave no room for doubt or further debate, and little
need for extended discussion ~ there is a legal and factual basis for the I.G.’s exclusion of
each Petitioner. Two distinct approaches to that record require that result: one approach
invokes a doctrine well-understood in this forum and in courts generally; and the other
relies on regulatory language that I believe was intended by the Secretary specifically to
govern cases of this nature. Both approaches ultimately depend upon the United States
District Court’s determinations in the FCA action: the United States District Court’s
September 29, 2006 Findings of Fact and Conclusions of Law and Judgment appear in
this record as ALJ Ex. 2, and its December 1, 2006 Order amending the Findings of Fact
and Conclusions of Law and Judgment appears as ALJ Ex. 3.’

” Because a federal court adjudicated the FCA case, then federal law controls the
collateral estoppel analysis. McQuillion v. Schwarzenegger, 369 F.3d 1091, 1096 (9th
Cir. 2004); Trevino v. Gates, 99 F.3d 911, 923 (9th Cir. 1996). That is simply to say that
the federal court’s view of what the federal FCA means is perfectly binding in this federal
administrative law forum.
13

1. The doctrine of issue preclusion or collateral estoppel bars either
Petitioner from challenging the basis for the exclusion.

| must first consider the broad question of whether a form of collateral estoppel or issue
preclusion applies to this case. Recent usage favors the term “issue preclusion” over the
more traditional term “collateral estoppel.” See Baker, et al. v. General Motors Corp.,
522 U.S. 22, 233 (1998); Migra v. Warren City School District Board of Education, 465
U.S. 75, 77 (1984). The term “issue preclusion” is the term favored in this forum, as I
shall explain in more detail presently. But by either term, this fundamental question is
raised: does the comprehensive treatment of the material facts in this case by the United
States District Court in the context of the FCA litigation, and the District Court’s
comprehensive resolution of all the material factual disputes in that case, establish
conclusively the basis for the imposition of the exclusion sanction in this case? For the
reasons that follow, I conclude that it does.

In general, the doctrine of collateral estoppel or issue preclusion provides that once an
issue of law or fact is actually and necessarily decided by a court, that determination is
conclusive in subsequent lawsuits based on a different cause of action involving a party to
the prior lawsuit. See Montana v. United States, 440 U.S. 147, 154 (1979). If the
doctrine of collateral estoppel or issue preclusion applies, then it has powerful
implications for this litigation. Summary judgment is appropriate if — and when — the
doctrine of issue preclusion or collateral estoppel resolves all triable issues of fact raised
by the pleadings and supporting documents, because it leaves for resolution no disputed
issues of material fact. If — and when — the undisputed facts are clear and not subject to
conflicting interpretation, then one party is entitled to judgment as a matter of law.
Michael J. Rosen, M.D., DAB No. 2096 (2007); Thelma Walley, DAB No. 1367 (1992).
Summary disposition is explicitly authorized by the terms of 42 C.F.R. § 1005.4(b)(12),
and this forum looks to Federal Rule of Civil Procedure 56 for guidance in applying that
regulation. Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No.
1367; John W. Foderick, M.D., DAB No. 1125 (1990). When the undisputed material
facts of a case support summary disposition, there is no right to a full evidentiary hearing.
Surabhan Ratanasen, M.D., DAB No. 1138 (1990); John W. Foderick, M.D., DAB No.
1125.

The doctrine of issue preclusion has a long history in the jurisprudence of this forum.

The Departmental Appeals Board (Board) has recognized that the doctrine is applicable to
its adjudicatory process, and has applied it where the underlying disposition so warranted.
Edward J. Petrus, Jr., M.D., DAB No. 1264 (1991). The Board has summarily affirmed
an ALJ decision in which the doctrine’s operation was at the heart of that ALJ decision
and formed the necessary and sufficient basis for the ALJ’s award of summary judgment.
14

Stephen H. Winters, DAB No. 1986 (2005). In other cases, the Board has acknowledged
that the doctrine might be applied if the underlying disposition in state or federal court
warranted doing so, but declined to apply the doctrine when the underlying disposition
did not support its application. Southern Indian Health Council, DAB No. 1687 (1999);
Louisiana Department of Health and Hospitals, DAB No. 1176 (1990); Virgin Islands
Department of Human Services, DAB No. 980 (1988); New York State Department of
Social Services, DAB No. 828 (1987). When the Board has been obliged to assess the
applicability of the underlying court disposition, it has done so using the four-part test set
out in Haize v. Hanover Insurance Co., 536 F.2d 576 (3d Cir. 1976). The elements of
that test are: first, the issue or issues sought to be precluded must be the same as the issue
or issues addressed in the prior litigation; second, the issue or issues must have been
actually litigated, and not simply conceded or stipulated; third, the issue or issues must
have been determined or resolved by a valid and final judgment; and fourth, the
determination or resolution of the issue or issues must have been essential to the
judgment.

The ALJs of this forum have relied on or considered the doctrine when reviewing the
I.G.’s exercise of the exclusion sanction. Berney R. Kezler, M.D., et al., DAB CR107
(1990); Thuong Vo, M.D. and Nga Thieu Du, DAB CR38 (1989); Neville Anthony, M.D.,
DAB CRIS, n.4 (1988).

The most insightful exploration in this forum of the doctrine of issue preclusion, however,
is found in a crucial prehearing ruling by ALJ Alfonso J. Montafio in Stephen H. Winters,
DAB CR1246 (2004). The case was a section 1128(b)(7) non-derivative exclusion
proceeding, and both sides had moved for summary judgment on certain issues. One
issue was whether the [.G. was entitled to summary judgment and a ruling that there was a
basis for petitioner Winters’ exclusion. The I.G. argued that a federal-court verdict and
judgment in an FCA lawsuit against Winters, in which the verdict and judgment
established that he had knowingly presented a claim for Medicare reimbursement that he
knew or should have known was false or fraudulent, precluded Winters from relitigating
that point in the non-derivative exclusion case.

ALJ Montajio ruled in the I.G.’s favor on that point and, on April 7, 2003, set out his
rationale in a closely-reasoned and articulate discussion that made up part of his
“Amended Order Denying Petitioner's Motion for Summary Judgment and Granting the
Inspector General’s Motion for Summary Judgment as to Her Authority to Exclude
Petitioner, and a Notice of a Prehearing Telephone Conference.” The complete text of
15

ALJ Montafio’s Amended Order of April 7, 2003 [hereinafter the Winters Order] was
made available to the parties in this action by my Order of October 26, 2006; since the
Winters Order may not be readily available, | have attached a copy of it to this Decision
as Appendix A.

The ALJ’s discussion in the Winters Order began by comparing the issues sought to be
precluded in the CMPL action before him, brought under section 1128A(a)(1)(B) of the
Act, and the issues litigated in the federal-court FCA action brought under 42 U.S.C.

§ 3729(a)(7). He identified those issues as (1) whether the items submitted on the cost
report were false or fraudulent, and (2) whether the entity that submitted them knew or
should have known that the items were false or fraudulent. Those two issues are the ones
presented to me in this action as part of the broader issue of whether there is a basis for
the exclusion of Petitioners Bourseau and Sabaratnam, and they were the exact issues
presented to the United States District Court and resolved as shown in ALJ Exs. 2 and 3.
The ALJ’s discussion examined the language in the two statutes with reference to its
precise standard for liability and found them the same: “Therefore, both statutes require
falsity and knowledge. . . . Additionally, both statutes define knowledge the same way.”
Winters Order, at 17. 1 have made the same comparison and have reached the same
conclusion in the matter before me. Thus, just as ALJ Montafio found that the first part of
the Haize test had been satisfied in the matter before him, so do I find that it has been
satisfied in this case.

ALJ Montajfio next enquired whether the issues of falsity and knowledge had actually
been litigated in the FCA action. The method by which he conducted his enquiry was a
review of the “transcript of the FCA proceeding” and the “documents from the FCA
proceeding.” Winters Order, at 18. | have reviewed the corresponding material in this
case: the trial transcript from the instant FCA action is before me as ALJ. Ex. 1, and the
parties here have submitted copies of most of the pleadings and exhibits from that
proceeding. See ALJ Exs, 2-3, I.G. Exs. 230-232. | have, additionally, the benefit of the
parties’ appellate briefing in the United States Court of Appeals for the Ninth Circuit.
ALJ Montafio’s review supported his conclusion that the issues of falsity and knowledge
had actually been litigated; my review of the corresponding material and the parties
appeallate briefing leads me to the same conclusion: the issues of falsity and knowledge
were vigorously litigated in the instant FCA action. And so, in the manner that ALJ
Montafio found that the second part of the Haize test had been satisfied in the matter
before him, so too do I find that it has been satisfied in the case at hand.

The third part of the Haize test requires that the issues sought to be precluded must have
been determined by a valid judgment. The ALJ in Winters had before him a special
verdict form read by the jury foreperson, and that verdict form explicitly affirmed that
16

Winters had knowingly made a false statement; the court later entered its final judgme.
“in accordance with the jury’s verdict.” That was enough to satisfy the ALJ, who wrot
simply that “the issues of falsity and knowledge were determined by a valid judgment.”
Winters Order, at 18. Here, | have a good deal more: instead of a special form of verdic
{ have a highly-detailed set of Findings of Fact and Conclusions of Law in which the
issues of falsity and knowledge are reduced to judgment against these Petitioners under
the FCA. The amendment of that judgment on December 1, 2006 went only to the
amounts of actual damages and trebled damages, and affected nothing else whatsoever.
Here I have a record much-expanded beyond what informed ALJ Montafio when he found
that the third part of the Haize test had been satisfied in the matter before him. So
informed, I find that it has been satisfied here.

The fourth part of the Haize test requires that the determination or resolution of issues to
be precluded here must have been essential to the valid judgment demanded by the third
part of the test. This fourth part, like the first part of the test, is best understood as a legal
question. The first part of the test asks whether the legal issues are the same; this part of
the test asks whether the essential elements required to be proven are the same. The ALJ
resolved the question in the Winters Order by looking at the instructions given to the jury
in the civil trial and concluding that “a determination as to falsity and knowledge was
essential to the FCA judgment because both are elements of an offense under 31 U.S.C. §
3729(a)(7).” Winters Order, at 19. In the instant FCA case, the United States District
Court’s Conclusions of Law are congruent, and leave no doubt that its determinations of
the knowledge and falsity questions were essential to its judgment. ALJ Ex. 2, at 16-17.
The fourth part of the Haize test is satisfied in the record before me now.

But there is considerably more in the Winters Order than a guide to applying the Haize
test, and the circumstances of this case make it worthwhile to set out and explicitly adopt
here what the ALJ had to say there about the operation of the doctrine of issue preclusion
in a non-derivative exclusion proceeding:

Petitioner argues that allowing the I.G. to rely on the FCA judgment
improperly converts what is a non-derivative exclusion into a derivative
exclusion. .. . Petitioner is correct that his exclusion pursuant to section
1128(b)(7) is a non-derivative exclusion rather than a derivative exclusion.
A derivative exclusion is an exclusion which is “based on an action
previously taken by a court, licensing board or other agency.” 55 F.R.
12,205, 12,206 (1990). In a derivative exclusion, the basis for the exclusion
is the action of the court, board or other agency and the 1.G. is not required
to “re-establish the factual or legal basis for such underlying sanction”. /d.
Thus, for example, in a section 1128(a)(1) exclusion, the basis for the
17

exclusion is the fact of a conviction, not the conduct which resulted in the
conviction. Consequently, all that is required of the LG. under section
1128(a)(1) is that she show that there was a conviction related to the
delivery of an item or service under title XVII or any State health care
program. In contrast, a section 1128(b)(7) non-derivative exclusion is
based on factual determinations initially made by the I.G. that a provider
committed an act described in section 1128, 1128A or 1128B. /d. at 2,208.
Thus, in a non-derivative exclusion proceeding, the I.G. must prove the
conduct which is the basis of the exclusion, e.g., the knowing filing of a
false claim.

I reject Petitioner’s argument because it confuses the question of the basis
of an exclusion with the question of the proof needed to establish the
elements of an exclusion. In applying the doctrine of issue preclusion, | am
not basing Petitioner’s exclusion on the FCA judgment. Rather, [am
relying on the FCA judgment to preclude Petitioner's relitigating in this
forum the question of whether the deferred compensation accrual was
knowingly false. The basis of this exclusion is still Petitioner’s conduct of
knowingly presenting a false claim, not the FCA judgment. The fact that
the FCA judgment assists the I.G. in prevailing in this case does not convert
Petitioner’s exclusion into a derivative exclusion.

Winters Order, at 19-20.

It may be worth repeating: the ALJ employed the Winters Order and its application of the
doctrine of issue preclusion as the foundation of his decision in Stephen H. Winters, DAB
CR1246, and that decision was summarily affirmed by the Board in Stephen H. Winters,
DAB No. 1986. The Winters Order has guided my approach to the question of issue
preclusion or collateral estoppel, and the result I reach in so doing relies on it.

Having analyzed this record in terms of collateral estoppel or issue preclusion, and having
in my analysis considered the four Haize factors, I find and conclude these four things.
First, the legal and factual issues before me now are identical to those alleged and proven
in the FCA litigation in the United States District Court. Next, those issues were actually,
and very vigorously, litigated in the United States District Court action by the parties
against whom preclusion is asserted here, Petitioners Sabaratnam and Bourseau. Third,
the FCA issues were determined or resolved by a valid and final judgment. And fourth,
the determination of the FCA issues in the FCA litigation was a critical and necessary part
18

of the judgment in the FCA action. Because the District Court reached its final, full
determination of identical issues after they had been fully litigated, and because its
resolution of all those issues was essential to the District Court’s valid final judgment, its
resolution of those issues precludes Petitioners from relitigating those issues here.

2. A valid and apposite regulation bars either Petitioner from
challenging the basis for the exclusion.

Perhaps more importantly, and certainly more specifically, the terms of 42 C.F.R.
§ 1001.2007(d) provide that in exclusion appeals before the ALJs of this forum:

When the exclusion is based on the existence of a criminal conviction or a
civil judgment imposing liability by Federal, State or local court, a
determination by another Government agency, or any other prior
determination where the facts were adjudicated and a final decision was
made, the basis for the underlying conviction, civil judgment or
determination is not reviewable and the individual or entity may not
collaterally attack it either on substantive or procedural grounds in this
appeal.

Now, it is true that the Board has denied, in dicta, the application of this regulation to
proceedings based on section 1128(b)(7) of the Act, and it is true that the ALJ in the
Winters Order expressed agreement with that view. But there are cogent reasons for
suggesting that such a view may not still prevail, and it may be worthwhile to set those
reasons out here.

When the Board addressed the applicability of 42 C.F.R. § 1001.2007(d) to exclusions
based on section 1128(b)(7), it did so gratuitously. The question of the regulation’s
application was unnecessary to the resolution of the case. What the Board did in Wesley
J. Hammer, et al., DAB No. 1693 invalidated an exclusion and reversed the ALJ decision
sustaining it because the I.G. had brought the action after the six-year period for doing so
had expired. The Board’s language referred in passing to “several regulatory provisions
that were not intended to apply to non-derivative exclusions, such as 42 C.F.R.

§ 1001.2007(d)....” But the Board had before it the ALJ’s decision in that appeal, and
in it appeared these crucial words:
19

The regulations are clear that, where the I.G.'s exclusion action is derived
from a conviction or determination by another governmental entity, the
basis for the underlying determination is not reviewable, and the underlying
determination cannot be collaterally attacked on either substantive or
procedural grounds. 42 C.F.R. § 1001.2007(d).

Wesley J. Hammer, et al., DAB CR565, at 18 (1999).

There are three critical misapprehensions in that passage. First, the ALJ clearly believed
that she was deciding a derivative exclusion, not deciding a non-derivative proceeding.
Because of that, she did not explain or elucidate the four-part test from Haize v. Hanover
Insurance. Had she done so, she would surely have noted that the precise issue involved,
that of Hammer’s joint and several liability, had not been fully litigated in United States
District Court, but rather merely conceded there, leaving the second part of the Haize test
unfulfilled. Thus the ALJ appeared to have misunderstood the United States District
Court’s final judgment as the predicate per se for a derivative exclusion, rather than as the
conduit or vehicle of its findings and conclusions on the issues, implicit and explicit,
which it necessarily had to resolve in reaching its judgment.

It may be noted that the Board also wrote its dictum in Hammer nearly three years before
the language of 42 C.F.R. § 1001.2007(d) was revised to take its present form. The
authors of the revised regulation were explicitly aware of the Board’s decision in
Hammer. 67 Fed. Reg. 11,928 (2002). The new language made no attempt to limit itself
to derivative actions, and the Secretary’s gloss on the language proposed to be engrafted
on the regulation sedulously avoided any such limitation:

We propose to clarify in this section that a civil judgment rendered by a
Federal, State, or local court is an additional type of prior determination that
may be given collateral estoppel effect, and may not be relitigated in the
exclusion proceeding

62 Fed. Reg. 11,930 (2002).

The HWinters litigation in this forum involved Medicare billing and reporting activity
completed in the mid-1990s. The Winters FCA action was filed in 1997, and the jury
verdict against the petitioner in that case was reduced to a judgment entered on September
21, 2001. The ALJ in explaining his view of the unrevised regulation in the Winters
Order, and the Board in explaining its views of the same unrevised regulation in
20

Hammer, were simply writing dicta. It is important to note that both the ALJ in Winters
and the Board did not have the benefit of the preamble to the revised version of the
regulation. Clearly, the revised version of the regulation removes any expressed
impediment to the application of the regulation to proceedings under section 1128(b)(7).

It is on that understanding that I differ most respectfully from the ALJ’s view in the
Winters Order and the Board’s in Hammer. | do not assert that they were mistaken at the
time, or in the circumstances, that their opinions were expressed. But I do suggest that
the 2002 revision of the regulation in light of the Board’s discussion of it in Hammer, the
ALJ's misapprehensions of the nature of the exclusion proceedings in Hammer, and the
fact that Winters was decided in the context of the unrevised regulation, invite a critical
revisit of the question.

My justification for the revisit has required more discussion than | shall undertake in
setting out the results of that revisit. In my view, there is simply nothing in the present
text of 42 C.F.R. § 1001.2007(d) to limit it to derivative exclusion proceedings. Indeed,
once the precise language employed by the ALJ in the Winters Order is recalled, the
application of the regulation to non-derivative exclusion proceedings seems not only
permitted, but procedurally-salubrious and logically-required:

In applying the doctrine of issue preclusion, I am not basing Petitioner’s
exclusion on the FCA judgment. Rather, I am relying on the FCA judgment
to preclude Petitioner’s litigating in this forum the question of whether the
deferred compensation accrual was knowingly false. The basis of this
exclusion is still Petitioner’s conduct of knowingly presenting a false claim,
not the FCA judgment. The fact that the FCA judgment assists the I.G. in
prevailing in this case does not convert Petitioner’s exclusion into a
derivative exclusion.

Winters Order, at 20.

I thus conclude that the terms of 42 C.F.R. § 1001.2007(d) apply to derivative exclusion
proceedings brought pursuant to section 1128(b)(7) of the Act. I conclude that the
Secretary’s explanation of the revisions to that regulation manifests the Secretary’s
intention that it be so applied. | cannot find a rational path to the contrary conclusion,
which would engraft a frustrating, wasteful and illogical exception on the Secretary’s
otherwise-plain rule, and would invite relitigation ~ with results potentially embarrassing
to the Secretary and this forum — of matters previously adjudicated and settled by a
tribunal eminently authorized and competent to do so, and under rules of evidence and
procedure every bit as fair and rigorous as those in effect here.
21

I therefore conclude that the terms of 42 C.F.R. § 1001.2007(d) bar these Petitioners from
relitigating any of the findings or conclusions announced by the United States District
Court. Those findings and conclusions establish a factual and legal basis for the I.G.’s
exclusion of both Petitioners.

B. Sanctions

Once a basis for exclusion is proven by a preponderance of the evidence, as it has been
proven against each Petitioner in this case, the ALJ must determine whether the I.G. has
set the period of exclusion at a reasonable length. Congress crafted the exclusion
sanction as a measure protective of federal healthcare programs and a deterrent to those
who would abuse those programs, rather than as a penalty in the form of retribution or
punishment to be visited on those proven to have done so. The measure’s ultimate goal is
the protection of the Medicare and Medicaid programs and their recipients from
untrustworthy or unscrupulous participants, and it “serves twin congressional purposes:
the protection of federal funds and program beneficiaries from untrustworthy individuals
and the deterrence of health care fraud.” Jeremy Robinson, DAB No. 1905, at 2 (2004);
see also Susan Malady, R.N., DAB No. 1816 (2002); Narendra M. Patel, DAB No. 1736
(2000); Joann Fletcher Cash, DAB No. 1725 (2000). That understanding of the nature of
the exclusion sanction informs and guides my analysis in the following pages, as I
evaluate the reasonableness of the periods of exclusion that the I.G. has proposed. In
doing so, the factors outlined in the regulations generally require that I weigh the gravity
of the wrongs done by these Petitioners, and consider what period of exclusion would be
necessary to prevent the wrong from being committed again by each Petitioner and, in the
future, by others. Taking these notions into consideration, the periods of exclusion I
deem reasonable in this case are meant to be proportionate to the improper acts
committed by Petitioner Bourseau and Petitioner Sabaratnam, respectively, as reflected in
the entire record of this case, and are meant to deter and prevent abuse of the protected
programs rather than to punish.

In determining a reasonable period of exclusion for each Petitioner, the CMPL provisions
of the Act and 42 C.F.R. § 1001.901(b)(1) require me to examine: (a) the nature and
circumstances surrounding the acts that establish the basis for excluding each Petitioner;
(b) each Petitioner’s culpability for his conduct; (c) each Petitioner’s individual criminal,
civil, or administrative disciplinary record; (d) evidence of other adverse actions that arise
from the same circumstances that establish the basis for excluding these Petitioners; and
(e) such other matters as justice may require. If, as I believe, the factors set out at 42
C.F.R. § 1001.901(b) are to be evaluated in a manner similar to the well-understood
aggravating and mitigating factors listed at 42 C.F.R. §§ 1001.102(b) and (c), then they
may be usefully compared with rules of evidence: they establish which factors may be
22

considered in deciding whether an exclusion is reasonable, but do not impose a rigid
formula of weight or persuasiveness to be afforded any specific item of that evidence.
Jeremy Robinson, DAB No. 1905, at 4; Keith Michael Everman, D.C., DAB No. 1880, at
7 (2003); and cases cited therein. The weight to be given any particular listed factor
when it has been proven is determined by the factual matrix of the record as a whole: the
circumstances of each case "drive the weight that a decisionmaker can give the
aggravating and mitigating factors." Jeremy Robinson, DAB No. 1905, at 4. It is in that
factual matrix that [ conduct the following analysis.

And I note here that I do so in deference to the views reached by the I.G. in setting the
proposed periods of exclusion. The I.G.’s discretion in weighing the importance of
aggravating and mitigating factors in, for example, exclusion cases brought under section
1 128(a) of the Act and 42 C.F.R. §§ 1001.102(b) and (c), commands great deference
when reviewed by ALJs. The source of this doctrine is the belief of the regulations’
authors that the I.G. is invested with “vast experience in implementing exclusions . . . .”
57 Fed. Reg. 3298-3321 (Jan. 29, 1992). This rule evolved in such Board decisions as
Barry D. Garfinkel, M.D., DAB No. 1572; Frank A. DeLia, D.O., DAB No. 1620 (1997);
and Gerald A. Snider, M.D., DAB No. 1637 (1997). With the Board’s decisions in Joann
Fletcher Cash, DAB No. 1725 (2000); Stacy Ann Battle, D.D.S., et al., DAB No. 1843
(2002); Keith Michael Everman, D.C., DAB No. 1880 (2003); and Jeremy Robinson,
DAB No. 1905; the rule took its present form. The rationale that nurtured the rule in
those cases seems to me perfectly applicable in this one.

In the present context, the rule forbids that I substitute my own views of what period of
exclusion might appear “best” in each Petitioner’s case for the view of the I.G. on the
same evidence. In general, the Board has insisted that ALJs may reduce an exclusionary
period only when they discover some meaningful evidentiary failing in the aggravating
factors upon which the I.G. relied, or when they discover evidence reliably establishing a
mitigating factor not considered by the LG. in setting the enhanced period. Jeremy
Robinson, DAB No. 1905. But just as significantly, the Board has explicitly sustained an
ALJ’s reduction of the LG.’s proposed exclusion when “the ALJ did not accept the I.G.’s
view of the evidence” relating to a person otherwise manifestly subject to exclusion,
Thomas M. Horras and Christine Richards, DAB No. 2015, at 59, and did so implicitly in
Stephen H. Winters, DAB No. 1986, when it summarily affirmed the ALJ’s reduction of
an exclusion period from 10 years to four years in Stephen Winters, DAB CR1246. See
also Roderick Spencer, D.P.M., DAB CR721 (2000).
23

1. The L.G.’s determination to exclude Petitioner Bourseau for a period
of 15 years was not unreasonable under the Act and applicable
regulations.

The I.G.’s June 14, 2005 notice of proposal to exclude and his Motion for Summary
Judgment explained the specific factors that the I.G. considered in making his
determination to exclude Petitioner Bourseau for 15 years. The I.G. assayed the nature
and circumstances of Bourseau’s acts and found that these acts resulted in Boureau’s
causing to be submitted cost reports to the Medicare program for Bayview that he knew
or should have known included false or fraudulent claims for medical or other items or
services. See I.G. June 14, 2005 exclusion letters. The false or fraudulent claims were
submitted on Bayview’s 1998 Cost Report and 1999 Cost Report, altogether totaling
$5,219,195 in Medicare funds. See Order Granting Plaintiffs and Defendants’ Rule
59(e) Motions to Alter or Amend the Judgment, No. 03-cv-907-BEN, 2006 WL 3949169
(S.D. Cal. Dee. 1, 2006).

a. The nature and circumstances surrounding the acts that are
the basis for excluding Petitioner Bourseau.

Here, Petitioner Bourseau billed for substantial sums and the period over which he billed
for them was lengthy. The expenses billed for were of several types and a pattern was
proven. Petitioner Bourseau caused to be presented cost reports by Bayview over a three-
year period. Bayview’s cost reports for 1998-1999 included several types of false costs
associated with a fictitious lease, hospital space rarely used for patients, management fees
for work not done, costs for interest never paid, and costs of services to other providers.
Petitioner Bourseau also participated in the cost report preparation process for Bayview’s
fiscal year 1997cost report.

b. Petitioner Bourseau’s culpability for his conduct.

One of the most complex of the factors to be considered by an ALJ in determining the
amount of the penalty is the “degree of culpability.” The guidelines in the regulations
indicate that this factor relates to the degree of a petitioner's knowledge and intent. As
stated earlier, it is a prerequisite that a respondent “knew or should have known” that the
claims were false or improper in order for liability to attach. The determination of the
degree of culpability in this case involves an inquiry into the degree of Petitioner
Bourseau’s knowledge. 48 Fed. Reg. 38,827 (1983).
24

It has been established that Petitioner Bourseau had actual knowledge that the claims
were false and improper. Petitioner Bourseau was fully engaged in a discussion of those
claims at a meeting with Paul Fayollat, Bayview’s consultant on Medicare issues with
over 30 years experience preparing cost reports. Mr. Fayollat advised Petitioner Bourseau
that each of the costs at issue was not allowable. In spite of that expert advice, Petitioner
Bourseau disregarded his consultant’s warnings and directed Mr. Fayollat to include the
false costs in the cost reports. In a deposition taken February 10, 2005, Mr. Fayollat
stated that “part of the role that he wanted and that | wanted to play in that was to give
him my consultation as to the reasons not to do things if that were the case and to make
sure that he and everybody understood the implications that you've got to be able to
support theses expenses. . . . [b]ut ultimately the determination on major things. Major
matters of that report. It was his determination as to what was going to be done.” 1.G.
Ex. 219, at 15 (306).

As to the role Petitioner Bourseau played in preparing and deciding what would be
included in the cost reports, Mr. Fayollat stated during his deposition that Petitioner
Bourseau “has as good or even more technical knowledge of cost reports than anybody
else over the 30 years that I have been doing these.” I.G. Ex. 219, at 15 (305). He further
testified “[a]nd he was quite a stickler. We would go th[rJough line by line all of the
pieces.” /d. (306).

This is powerful evidence. It starkly illuminates the attitude and intentions of Petitioner
Bourseau, and it demonstrates his very high degree of culpability in the context of full
knowledge that what he was doing was unlawful. And as will appear below, it is the
principal point of difference between the degree of culpability displayed by the two
Petitioners in this case, and in my view of the relative reasonableness of the proposed
periods of their exclusion.

¢. Petitioner Bourseau’s disciplinary record.

The next factor I address is Petitioner Bourseau’s prior disciplinary record. Such a record
could include any history of criminal, civil or administrative wrong-doing on his part not
related to the instant circumstances involving Bayview. The record is silent in this area,
and reveals nothing. In light of that, | conclude that there is nothing in Petitioner
Bourseau’s record which would suggest a higher degree of untrustworthiness than is
indicated by the other evidence of record in this case. However, the regulation at 42
C.F.R. § 1001.90 1(b)(3) states that “the lack of any prior record is to be considered
neutral.”
25

d. Evidence as to other adverse actions that arise from the same
circumstances that are the basis for excluding Petitioner
Bourseau.

Before “other adverse actions” may be weighed against a petitioner, the petitioner must
have been “held liable” and subjected to actual sanctions for committing the acts with
which he or she is charged in the “other adverse actions.” The preamble to the regulation
makes clear that prior offenses are not an aggravating circumstance, unless there has been
a final agency determination or a final adjudication in a court. 48 Fed. Reg. 38,832
(1983).

The evidence presented here demonstrates that Petitioner Bourseau knowingly presented
or caused to be presented unallowable costs in Bayview’s 1998 and 1999 cost reports, and
has been “held liable” for doing so. Here, the “other adverse action” is the FCA action in
United States District Court.

In the FCA action, United States District Judge Benitez entered judgment finding that
Petitioners Bourseau and Sabaratnam had violated the FCA by causing Bayview to submit
false or fraudulent costs to Medicare for payment in Bayview’s Medicare cost reports for
1997-1999. That judgment was entered against Petitioners in the amount of $23,776,332.
United States v. Bourseau, 2006 WL 3949169 (S.D. Cal. Dec. 1, 2006) amended Order
Granting Plaintiff's and Defendants’ Rule 59(e) Motions to Alter or Amend the
Judgment, No. 03-cv-907-BEN, 2006 WL 3949169 (S.D. Cal. Dec. 1, 2006). Judge
Benitez found that damages to the Medicare program were $5,219,195, that Petitioners
had engaged in a pattern of conduct, and that they acted with a high degree of culpability
by engaging in a conspiracy to defraud the Medicare program.

e. Other matters as justice may require.

The CMPL at section 1128A(d)(3) and the regulations at 42 C.F.R. § 1001.901(b)(5) also
contain a notably elastic factor, “other matters as justice may require.” The CMPL and
the regulation do not provide further detail in defining what those “other matters” might
be, and the Departmental Appeals Board has characterized the factor as “open-ended” in
Thomas M. Horras and Christine Richards, DAB No. 2015. Inasmuch as the purpose of
an exclusion is deterrence and protection of the Medicare and Medicaid programs rather
than retribution or punishment, | must assume that those “other matters” were intended to
represent additional factors that would tend to reflect on a petitioner’s trustworthiness.
Jeremy Robinson, DAB No. 1905.
26

lhe violations established in this case were deliberate and fraudulent. [ am not persuaded
by Petitioner Bourseau's arguments to the contrary. The record before me reveals
Petitioner Bourseau’s conduct to have been calculated to mislead and defraud the
protected programs, and to have been crafted to that purpose with a relatively-high level
of sophistication. Conduct of that sort is, in the abstract, strongly suggestive of a
tendency toward untrustworthiness; when seen against the background of this case and
the FCA litigation, it acquires an aura of greed and predation and takes on a stance
threatening to the protected programs. Wherever the open end of the “other matters”
factor may lie, the protection of the programs from deliberate and very substantial abuse
must surely lie well within it. It adds support for the I.G.’s determination to exclude
Petitioner Bourseau for 15 years.

The 15-year exclusion is amply justified by the record before me, and by the factors
which I have enumerated. Thus, I conclude that the I.G. appropriately considered factors
in 42 C.F.R. § 1001.901(b)(1) and (2) in making his determination that the exclusion
period necessary for the protection of the program given Petitioner Bourseau’s
misconduct was 15 years. Moreover, Petitioner Bourseau has not met its burden of
persuasion showing me that there are any affirmative defenses to the reasonableness of
the length of the exclusion period. Therefore, I find that the 1.G.’s determination to
exclude Petitioner Bourseau for 15 years was not unreasonable under the applicable law
and regulations.

2. The I.G.’s determination to exclude Petitioner Sabaratnam for a
period of 15 years was unreasonable under the Act and applicable
regulations. Exclusion of Petitioner Sabaratnam for a period of 10
years is not unreasonable.

The I.G.’s June 14, 2005 notice of proposal to exclude and his Motion for Summary
Judgment explained the specific factors that the I.G. considered in making his
determination to exclude Sabaratnam for 15 years. The I.G. examined the nature and
circumstances of Petitioner’s acts and found that these acts resulted in Sabaratnam
causing to be submitted cost reports to the Medicare program for Bayview that he knew
or should have known included false or fraudulent claims for medical or other items or
services. The false or fraudulent claims were submitted on cost reports for Bayview’s
1998 Cost Report and 1999 Cost Report totaling $5,219,195 in Medicare funds.

After weighing all of the evidence in this case, and after evaluating the reasonableness of
that period in light of the implications of Petitioner Sabaratnum’s culpability under the
“knew or should have known” standard, | reduce the sanctions imposed against Petitioner
Sabaratnam as set out immediately below.
27

a. The nature and circumstances surrounding the acts that are
the basis for excluding Petitioner Sabaratnam.

The evidence pertaining to the acts that form the basis for excluding Petitioner
Sabaratnam manifests a high level of untrustworthiness on his part. As Chief Executive
Officer (CEO) of Bayview, Petitioner Sabaratnam concurred with the submission of
unallowable and fraudulent claims to the Medicare program for substantial sums of
money and, as established during the FCA trial, did so over a three year period (1997-
1999). The improper expenses billed in Bayview’s 1998-1999 cost reports were of
several types and included false costs associated with a fictitious lease, hospital space
rarely used for patients, management fees for work not done, costs for interest never paid,
and costs of services to other providers.

b. Petitioner Sabaratnam’s culpability for his conduct.

Although it was Petitioner Bourseau who personally directed the inclusion of the costs at
issue which he knew to be unallowable, this does not absolve Petitioner Sabaratnam of
substantial culpability in the affair. The evidence establishes that Petitioner Sabaratnam
was a willing participant. As to Petitioner Sabaratnam’s involvement in the submission
of the costs at issue here, Bayview’s consultant, Paul Fayollat stated in a February 10,
2005 deposition: “| can’t really recall any objections or any arguments between the
parties as to the matters.” [.G. Ex. 219, at 9. Petitioner Sabaratnam was present at the
meeting when the costs were discussed and, as the record evinces, agreed to the inclusion
of these false costs in Bayview’s Medicare cost reports. Transcript (Tr.) at 871-72, 874,
914-15, 1128; 1.G. Ex. 219, at 9.

After a six-day bench trial, the District Court Judge in United States v. Bourseau, et al.,
No. 03-cv-907-BEN (WMC) ultimately concluded that both Petitioners, Bourseau and
Sabaratnam, caused the presentation of the cost reports; that Sabaratnam “agreed with
Bourseau’s direction to include the costs in CPSM/Bayview Hospitals’ cost reports.”
ALJ Ex. 2, at 17. However, the record of that trial does show that Petitioner
Sabaratnam’s pattern of conduct was not as aggressive, or as dominant, as that of
Petitioner Bourseau. In his deposition, Paul Fayollat stated that Petitioner Sabaratnam
may have been present during two meetings at which particular items that were to be
included in Bayview’s 1998 and 1999 cost reports were discussed. However, according
to Mr. Fayollat who himself was present at both those meetings, Sabaratnam never
directed him to include any particular item in any Baview cost report for submission to
Medicare. 1.G. Ex. 219, at 19. Additionally, Fayollot stated that Petitioner Sabaratnam
gave him no cost report instructions and that it was Bourseau, and not Sabaratnam, who
had knowledge and responsibility regarding Medicare reimbursement at Bavview. Tr. at
28

425, 501-502. Additionally, Sabaratnam was not copied on any letter prepared by
Fayollat’s company transmitting Bayview’s cost reports to the fiscal intermediary. 1.G.
Exs. 2, 8,42. Sabaratnam testified that his knowledge of Medicare regulations pertained
to compliance with quality and licensure issues, not cost reporting. Tr. at 923, 929-930.

Petitioner Sabaratnam urges me to believe that there must be some degree of participation
in the claims process for liability to attach to him, and that there must be more than mere
knowledge of the submission before liability can attach. However, in his role as CEO,
Petitioner Sabaratnam had a duty to ensure that Bayview’s cost reports reflected accurate
reporting of expenditures and were reflective of legitimate client-related costs. Here, he
chose to agree with Petitioner Bourseau in the submission of the cost reports which he
knew, or certainly should have known, included fraudulent claims.

The I.G. has argued that Petitioner Sabaratnam either deliberately defrauded the Medicare
program or was indifferent to program requirements. The distinction between fraudulent
and reckless conduct by a provider is irrelevant for purposes of establishing a basis for
imposing an exclusion. A provider who presents or causes to be presented claims that are
cither willfully false or that are false and are made in reckless disregard for their accuracy
has committed conduct that is described under section 1128A of the Act and may be
excluded pursuant to section 1128(b)(7) of the regulations.

However, the distinction between deliberately-fraudulent conduct on the one hand and
reckless conduct on the other may be significant for purposes of determining the length of
an exclusion. A person who engages in deliberate fraud manifests a higher level of
culpability than does a person who is reckless. The level of culpability that is involved in
a case of deliberate fraud is in many ways comparable to criminal culpability. A person
may engage in indifferent or reckless conduct and not be criminally culpable, but yet he
may be culpable indeed at some other level.

Congress has recognized that an individual who commits a program related crime is a
highly untrustworthy individual and the Act requires that such an individual be excluded.
Congress has not found that an individual whose conduct is reckless is necessarily as
untrustworthy as a person who has committed criminal fraud against Medicare. There is
no identified mandatory minimum exclusion for such an individual under section 1 128A
of the Act or the applicable regulations at 42 C.F.R. § 1128(b)(7).

Here, the evidence establishes that Petitioner Sabaratnam was indifferent and reckless
concerning the cost reports. It may suggest, but does not conclusively establish, that he
knowingly, willfully, and intentionally defrauded the Medicare program. That raises the
29

obvious question of whether Petitioner Sabaratnam’s culpability is tantamount to that of
an individual who has engaged in intentional criminal fraud. I need not answer that
question to find that Petitioner Sabaratnam’s culpability is not as great as Petitioner
Bourseau’s.

I find that Petitioner Sabaratnam’s untrustworthiness is reduced somewhat from the L.G.’s
estimate by my assessment of his reduced culpability. This is not to suggest that I find
Petitioner Sabaratnam to be trustworthy. Far from it: he fully deserves to be excluded
from the protected programs because of his demonstrated indifference to the abuse of the
programs. Those programs fully deserve to be protected from him. However, I do find
that the conduct and attitude of Petitioner Sabaratnam does not manifest the level of
culpability and untrustworthiness manifested by the conduct and attitude of Petitioner
Bourseau, and on that point I differ with the I.G.’s depiction of it. The preponderance of
the evidence shows that Petitioner Sabaratnam did not submit the cost reports to the
Medicare program with the specific intent of swindling the government. Rather, the
evidence shows that he was recklessly indifferent to program reimbursement
requirements, a somewhat lower level of culpability than is associated with intentional
fraud. | am reducing the exclusion of Petitioner Sabaratnam from 15 years to 10 years
essentially because Petitioner Sabaratnam’s culpability for his conduct is less than the IG.
determined it to be.

c. Petitioner Sabaratnam’s disciplinary record.

There is no evidence that Petitioner Sabaratnam has a prior record of criminal, civil, or
administrative misconduct. In light of that, I conclude that there is nothing in Petitioner
Sabaratnam's record which would suggest a higher degree of untrustworthiness than is
indicated by the other evidence of record in this case. However, the regulation at 42
C.F.R. §1001.901(b)(3) states that the lack of any prior record is to be considered neutral.

d. Evidence as to other adverse actions that arise from the same
circumstances that are the basis for excluding Petitioner
Sabaratnam.

The evidence presented here demonstrates that Petitioner Sabaratnam knowingly
presented or caused to be presented unallowable costs in Bayview’s 1998 and 1999 cost
reports, and has been “held liable” for doing so. In this matter, the “other adverse action”
is the FCA action in United States District Court.
30

In the FCA action, United States District Judge Benitez entered his judgment finding that
Petitioners Bourseau and Sabaratnam had violated the FCA by causing Bayview to submit
false or fraudulent costs to Medicare for payment in Bayview’s Medicare cost reports for
1997-1999, That judgment was entered against Petitioners in the amount of $23,776, 332
in treble damages and $31,000 in civil penalties. Judge Benitez found that damages to the
Medicare program were $5,219,195, that Petitioners had engaged in a pattern of conduct,
and that they acted with a high degree of culpability by engaging in a conspiracy to
defraud the Medicare program. See United States v. Bourseau, 2006 WL 3949169 (S.D.
Cal. Dec. 1, 2006).

e. Other matters as justice may require.

I have noted above the “open-ended” nature of this factor, and that in determining to
impose an exclusion, the primary consideration must be the degree to which the exclusion
serves the Act's remedial objectives with the excluded party’s trustworthiness the
touchstone. An exclusion is remedial if it does reasonably serve these objectives: there is
a legitimate remedial purpose for exclusions in cases where respondents are
untrustworthy providers. And trustworthiness is not an absolute quality: there must
surely be a quantitative aspect to it that would allow a period of exclusion to be shaped by
the degree of a petitioner’s untrustworthiness, as demonstrated by the nature of his
wrongdoing in terms of calculation, repetition, flagrance, and damage inflicted, among
others.

The Act does not mandate a uniform exclusion of every individual or entity who has
engaged in conduct which authorized the Secretary to impose and direct an exclusion
under the Act. | have set out above my view of the findings and conclusions upon which
the United States District Court judgment was based. Though both Petitioners were held
jointly liable for substantial penalties and assessments, | have nevertheless pointed out
some differences in their activity. This Petitioner’s activity was serious and fraudulent,
and in no fashion whatsoever is minimized by anything I now write. But it seems clear
that he was a passive — although certainly knowing — wrongdoer when his co-actor was
aggressively scheming to abuse the programs. As I have noted above, the federally-
funded health care programs and their beneficiaries and recipients need protection from
future conduct by Petitioner Bourseau for 15 years. | do not find a remedial need under
the Act to exclude Sabaratnam for 15 years. The programs need protection from him, too,
but for a lesser period, and I believe that the reasonable and necessary period is 10 years.
31

V1. Conclusion

For all of the reasons set forth above, and relying on the authority set out in section
1128(b)(7) of the Act, 42 U.S.C. § 1320a-7(b)(7), [ sustain the determination of the I.G.
to exclude Petitioner Robert I. Bourseau from participation in the Medicare, Medicaid,
and all other federal health care programs for a period of 15 years.

For all of the reasons set forth above, and relying on the authority set out in section
1128(b)(7) of the Act, 42 U.S.C. § 1320a-7(b)(7), [ sustain the determination of the LG.
to exclude Petitioner Rudra Sabaratnam from participation in the Medicare, Medicaid,
and all other federal health care programs, but I reduce the period of Petitioner
Sabaratnam’s exclusion to a period of 10 years.

/s/ Richard J. Smith
Administrative Law Judge


Department of Health And Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: )
)
Paul Harris, a/k/a Harish )
Prafulchandra Patel, ) Date: September 25, 2007
)
Petitioner, )
) Docket No. C-07-169
“Vee ) Decision No. CR1659
)
The Inspector General. )
)
DECISION

I sustain the decision of the Inspector General (I.G.) to exclude Petitioner, Paul Harris,
a/k/a Harish Prafulchandra Patel, from participating in Medicare and other federally
financed health care programs, including State Medicaid programs, for a minimum period
of 15 years.

I. Background

On October 31, 2006 the I.G. notified Petitioner that he was being excluded from
participating in Medicare and other federally financed health care programs for a period
of at least 15 years. The I.G. told Petitioner that he was being excluded as a consequence
of his conviction of a criminal offense, as is defined at section 1128(a)(1) of the Social
Security Act (Act), and due to the presence of evidence relating to several aggravating
factors. Petitioner requested a hearing and the case was assigned to me for a hearing and
a decision.

I held a pre-hearing conference in the case and instructed the parties to file briefs and
proposed exhibits addressing their respective arguments. The I.G. filed a brief along with
nine proposed exhibits which he designated as I.G. Ex. 1 - 1.G. Ex. 9. Petitioner did not
file anything in response. I sent an order to show cause to Petitioner instructing him to
explain his failure to file a response to the I.G.’s submission. Petitioner did not respond
to the order to show cause.
2

Petitioner’s failure to file a brief and exhibits and a response to my order to show cause
would be a basis for me to dismiss his request for hearing. However, I am electing to
decide the merits of this case in view of the extensive submission made by the I.G. In
doing so I consider those arguments that Petitioner made in his hearing request. For
purposes of establishing a record I receive into evidence I.G. Ex. 1 - .G. Ex. 9.

II. Issues, findings of fact and conclusions of law
A. Issues
The issues in this case are whether:
1. The I.G. is required to exclude Petitioner; and
2. The minimum 15-year exclusion imposed by the I.G. is reasonable.
B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this
case. I set forth each Finding below as a separate heading. I discuss each Finding in
detail.

1. The I.G. was required to exclude Petitioner because Petitioner was
convicted of a criminal offense related to the delivery of items or services
under the Texas Medicaid program, a State health care program.

Section 1128(a)(1) of the Act mandates the exclusion of any individual who is convicted
of a criminal offense that is related to the delivery of an item or service under Medicare or
a State health care program (a State Medicaid program). The unrebutted evidence offered
by the I.G. proves that Petitioner was convicted of crimes that included fraud against the
Texas Medicaid program (Medicaid). Consequently, the I.G. must exclude him.

On October 15, 2003 a superseding indictment was issued against Petitioner in the United
States District Court for the Western District of Texas. 1.G. Ex. 3. It charged that
Petitioner, a physician, had devised a scheme and artifice to defraud Medicaid. /d. at 2-3.
Specifically, it charged that Petitioner:

+ Examined patients receiving Medicaid and entered or caused to be entered false
records and notations in the patients’ medical records which supported fraudulent
medical claims filed with Medicaid;
3

+ Purchased and caused his employees to purchase a contraceptive drug at discount
prices in Mexico which was smuggled into the United States, administered by
Petitioner to his Medicaid patients, and billed Medicaid for the drug as if it had
been obtained at the full price;

+ Purchased or caused to be purchased a compounded form of the contraceptive
drug at a discount pharmacy in Arkansas and submitted claims to Medicaid for the
drug as if it was the full cost, commercially manufactured version of the drug;

+ Submitted false Medicaid claims for performing trans-vaginal
sonograms/echography that Petitioner had not, in fact, performed;

+ Billed Medicaid fraudulently for the full cost of performing certain examinations
when, in fact, the examinations were not complete;

+ Billed Medicaid fraudulently for office visits that were made to appear to be
separate from the aforesaid examinations when, in fact, they were not separable for
billing purposes;

+ Prepared and caused to be prepared medical claims forms that he submitted to
Medicaid which contained false and fraudulent statements; and

* Caused via his fraud approximately $304,798 to be paid to him by Medicaid.

Id. at 4-5. These allegations were incorporated, along with other allegations, into Count 1
of the indictment, which charged Petitioner with engaging in conspiracy to defraud
Medicaid. Jd. at 7-9.

On August 3, 2004, Petitioner agreed to plead guilty to Count 1. I.G. Ex. 4. As part of
his plea he agreed to pay restitution of $304,798. On January 19, 2006, a judgment of
guilty was entered against Petitioner in United States District Court. His sentence
included 13 months’ incarceration plus the requirement that he pay restitution as he
agreed to in his plea agreement. I.G. Ex. 5.

Crimes consisting of filing, or conspiring to file, false and fraudulent reimbursement
claims for medical services against a State health care program are obviously crimes that
relate to a delivery of items or services under that program and fall within the mandatory
exclusion language of section 1128(a)(1). Petitioner’s plea and conviction in this case, in
the absence of any contradictory evidence, establish plainly that Petitioner was convicted
of such a crime.
4
2. The 15-year exclusion is reasonable.

Section 1128 is a remedial statute. Its purpose is not to impose punishment on an
excluded individual beyond that which he or she receives as a sentence for his or

er

crime. Rather, its purpose is to protect federally financed programs such as Medicare and
State Medicaid programs and the beneficiaries and recipients of program funds from

someone who is demonstrably untrustworthy.

The Secretary of the United States Department of Health and Human Services pu
regulations establishing factors to be used in deciding whether an exclusion impos
pursuant to section 1128(a)(1) is reasonable. These factors, known as aggravating
mitigating factors, are published at 42 C.F.R. §§ 1001.102(b) and (c). The factors

lished
ed

and
operate

as rules of evidence for determining the reasonableness of an exclusion.'! Only evidence

which relates to an aggravating or a mitigating factor is relevant to deciding whet
exclusion is reasonable. And, like rules of evidence, although the factors establis

eran
what

is and what is not relevant to deciding reasonableness, they do not mandate the weight
that must be assigned to relevant evidence. The factors establish no formula for deciding

the length of an exclusion.

In this case the I.G. offered persuasive and unrebutted evidence relating to four
aggravating factors. Petitioner did not offer any evidence relating to mitigating fa
The L.G. proved the following:

+ Petitioner’s criminal activity caused Medicaid to suffer a financial loss in

ctors.

excess

of $5,000. 42 C.F.R. § 1001.102(b)(1). The evidence offered by the IG. proved

that Petitioner pled guilty to defrauding Medicaid of $304,798.

+ Petitioner perpetrated his crime over a period of more than a year. 42 C.F.R.
§ 1001.102(b)(2). Petitioner pled guilty to engaging in Medicaid fraud during a
period that began on September 19, 1997 and which continued until July 25, 2000.

LG. Ex. 5, at 1.

+ Petitioner was incarcerated for his crime. 42 C.F.R. § 1001.102(b)(5).

Petitioner’s sentence included a period of 13 months’ imprisonment. /d. at 2.

' Any exclusion imposed pursuant to section 1128(a)(1) must be for a min
five years. Act, section 1128(c)(3)(B). Thus, the aggravating and mitigating fact
relate only to evidence which may be used to adjudicate the reasonableness of an
exclusion for a period of more than five years.

imum of
ors
5

+ Petitioner was subject to adverse administrative actions based on the same facts
that are the basis for excluding him. 42 C.F.R. § 1001.102(b)(9). These actions
include Petitioner’s voluntary surrender of his license to practice Medicine in the
States of Texas and New York on April 7 and August 17, 2006, respectively. I.G.
Ex. 6; I.G. Ex. 7; 1.G. Ex. 8.

In his hearing request Petitioner argues that the actual loss suffered by Medicaid from his
actions was at most $30,000 and possibly as low as $10,000. He seems to say that he
admitted defrauding Medicaid of more than $304,000 only as a way of negotiating a plea.
However, Petitioner offers no evidence to support this contention and, moreover, it is
highly self-serving. I find it not to be credible. Petitioner also seems to assert that his
crimes were more a consequence of problems at the hospital at which he practiced than
any criminal intent on his part. This assertion is also self-serving and not supported by
any evidence.

The evidence relating to aggravating factors offered by the I.G. shows that Petitioner
engaged in serious and concerted crime against Medicaid for a period of about three years
and that his crime defrauded Medicaid of a very substantial sum, more than $300,000.
What is evident from the charge to which Petitioner pleaded was that his criminal activity
involved a great deal of planning and thought on Petitioner’s part. His scheme was
complex and it required Petitioner to enlist not only the support of others but to engage in
relatively sophisticated transactions (as in importing drugs from Mexico and generating
false medical treatment records). Such complexity and sophistication is the hallmark of
untrustworthiness. Given that, the 15-year exclusion imposed by the I.G. is merited.

/s/
Steven T. Kessel
Administrative Law Judge