SUBJECT:

Nosratolah Yadegari,

Petitioner,

The Inspector General

Nosratolah Yadegari (Petitioner) is excluded from participation 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)), effective October 20, 2002, based upon his conviction for a program related criminal offense. There is a proper basis for exclusion. Petitioner's exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. � 1320a-7(c)(3)(B)).

1. At all times relevant to this case, Petitioner was the owner and operator of an independent clinical laboratory in the State of New York. I.G. Ex. 3; P. Br. at 2; P. Ex. 1, at 2.

2. Petitioner operated his clinical laboratory under the name Queens Medical Laboratory, Inc. (QML). Id.

3. On July 30, 2001, Petitioner pled guilty in the United States District Court, Southern District of New York, to two counts of a misdemeanor information filed on March 20, 1998, count two of which involved the allegation that Petitioner made or caused to be made a false statement and representation of material fact in violation of 42 U.S.C. � 1320a-7b(a)(2). Judgment was entered on August 2, 2001. I.G. Ex. 3, at 2; I.G. Ex. 4.

4. Specifically, count two of the misdemeanor information accused Petitioner of filing with the Department of Health and Human Services, Health Care Financing Administration (since re-named the Centers for Medicare & Medicaid Services), a form entitled "Clinical Laboratory Financial Relationships with Physicians Carrier Survey" (which was required of all independent clinical laboratories claiming payment under the Medicare program), in which form Petitioner falsely stated that no physicians had direct or indirect compensation/remuneration arrangements with QML. Count two asserted that, in fact, and contrary to Petitioner's statement in this form, Petitioner was making payments from QML, via third parties, for the benefit of a physician, in order to continue the referral of laboratory specimens from that physician to QML. Many of the physician's patients were covered by Medicare. I.G. Ex. 3, at 2.

5. Petitioner was sentenced to a two year period of probation, fined $5,000, and assessed $50. I.G. Ex. 4, at 2, 3.

6. The I.G. notified Petitioner by letter dated September 30, 2002, that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for five years pursuant to section 1128(a)(1) of the Act, effective 20 days from the date of the letter. The I.G. advised that the action was based upon Petitioner's conviction in the United States District Court, Southern District of New York, of a criminal offense related to the delivery of an item or service under the Medicare program.

7. Petitioner timely requested a hearing.

2. Petitioner was convicted of a program related criminal offense within the meaning of section 1128(a)(1) of the Act by knowingly and willfully making a false statement or representation of a material fact for use in determining rights to Medicare benefits or payments.

3. Petitioner's conviction of a program related criminal offense requires that he be excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of five years. Act, sections 1128(a)(1) and 1128(c)(3)(B).

4. Because Petitioner's five-year exclusion is mandated by the Act, I have no authority to consider whether the length of the exclusion is unreasonable, as Petitioner's exclusion is reasonable as a matter of law.

5. Because the Act mandates a five-year exclusion in Petitioner's case, Petitioner's cooperation with the United State's Attorney's Office for the Southern District of New York cannot be considered in mitigation of the length of his exclusion.

Petitioner's right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (Secretary) is provided by section 1128(f) of the Act (42 U.S.C. � 1320a-7(f)). Petitioner's request for a hearing was timely filed, and I do have jurisdiction. However, the Secretary has by regulation limited my scope of review to two issues in cases brought under section 1128: (1) whether there is a basis for the imposition of the sanction; and, (2) whether the length of the exclusion is unreasonable. 42 C.F.R. � 1001.2007(a)(1). Moreover, in a case brought pursuant to section 1128(a)(1) of the Act, where the exclusion imposed by the I.G. is for a five-year period, I may only consider whether there is a basis for the imposition of the sanction because the Act, at section 1128(c)(3)(B), mandates a minimum five-year period of exclusion.

The standard of proof is preponderance of the evidence and there may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. � 1001.2007(c) and (d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. � 1005.15(b) and (c).

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in the Medicare, Medicaid, and all federal health care programs, any individual or entity convicted of a criminal offense related to the delivery of an item or service under the Medicare and/or Medicaid programs. Section 1128(i) of the Act defines the term "convicted" under section 1128(a), in part, as follows: an individual or entity is considered to have been "convicted" of a criminal offense - when a judgment of conviction has been entered against the individual or entity by a federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged; and when a plea of guilty or nolo contendere by the individual has been accepted by a federal, State, or local court. Act, section 1128(i)(1), (3).

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(1) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R. � 1001.102(b), no exclusion pursuant to section 1128(a)(1) may be for less than five years, but the period of exclusion may be extended based on the presence of specified aggravating factors. Only if the aggravating factors justify an exclusion of 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).

B. ISSUE

The only issue in this case is whether there is a basis for Petitioner's exclusion, specifically whether he was convicted of a program-related criminal offense within the meaning of the Act. The five-year exclusion imposed by the I.G. is the minimum authorized for an exclusion pursuant to section 1128(a)(1) of the Act. Thus, if exclusion pursuant to section 1128(a)(1) is required, I am barred by law from considering the reasonableness of the length of exclusion.

C. ANALYSIS

There is no dispute as to the material facts in this case. Petitioner does not deny that on July 30, 2001, he pleaded guilty in the United States District Court, Southern District of New York, to counts one and two of a misdemeanor information filed on March 20, 1998. I.G. Exs. 3, 4. Count two of this misdemeanor information states,

2. On or about September 5, 1991, in the Southern District of New York and elsewhere, NOSRATOLAH YADEGARI, the defendant, unlawfully, willfully and knowingly did make and cause to be made a false statement and representation of material fact for use in determining rights to payments under a Federal health care program, to wit, NOSRATOLAH YADEGARI, the defendant, filed with the Department of Health and Human Services, Health Care Financ[ing] Administration, in New York, New York, a form entitled Clinical Laboratory Financial Relationships with Physicians Carrier Survey, that was required of all independent clinical laboratories claiming payment under the Medicare program, and that falsely stated that no physicians had direct or indirect compensation/remuneration arrangements with Queens Medical Laboratory, Inc. ("QML"), when in truth and in fact, NOSRATOLAH YADEGARI, the defendant, was making payments from QML via third parties for the benefit of a physician for the continued referral to QML of laboratory specimens of that physician's patients, many of whom were covered by Medicare. (Title 42, United States Code, Section 1320a-7b(a)(2)(ii).).

I.G. Ex. 3, at 2.

The statute under which Petitioner was convicted, 42 U.S.C. � 1320a-7b, is captioned "Criminal penalties for acts involving Federal health care programs." The specific section to which Petitioner pleaded guilty, 42 U.S.C. � 1320a-7(b)(a)(2), states that an individual is committing a criminal offense by:

(a) Making or causing to be made false statements or representations

Whoever - - . . . (2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use indetermining rights to such benefit or payment.

Petitioner also does not dispute that he was sentenced to a two year period of probation, ordered to pay a fine of $5,000, and assessed $50.

Instead, Petitioner argues that his exclusion is not supported by law because his conviction is not related to the delivery of an item or service under the Medicare program and that the length of his exclusion is otherwise unreasonable given his cooperation with the United States Attorneys office, as is reflected in P. Ex. 1. Petitioner's arguments are unavailing.

The I.G. had a basis upon which to exclude Petitioner. This is because Petitioner was convicted (pursuant to the definition of a conviction under the Act, section 1128(i)(1), (3)) of a violation under 42 U.S.C. � 1320a-7b, which specifically criminalizes conduct related to federal health care programs such as Medicare and Medicaid. His criminal offense of making a false statement in a form to be submitted to the Health Care Financing Administration, without which he could not make claims for payment under the Medicare program, shows a clear nexus or common sense connection linking his criminal offense with the delivery of an item or service under the Medicare program. See Andrew Anello, DAB No. 1803 (2001); Berton Siegel, D.O., DAB No. 1467 (1994); Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990). Thus, Petitioner was convicted of a criminal offense related to the delivery of an item or service under the Medicare program.

Having found that the I.G. had a basis upon which to exclude Petitioner, I must affirm Petitioner's five-year exclusion. It is the minimum period of exclusion mandated by the Act (Act, section 1128(c)(3)(B)) and I am barred by both statute and regulation from considering Petitioner's cooperation in mitigation of this period of exclusion.

Keith W. Sickendick

Administrative Law Judge