SUBJECT:

Thomas P. Donahue, U.S.M.,

Petitioner,

The Inspector General

The Inspector General (I.G.) notified Petitioner that he was being excluded from participation in Medicare, Medicaid and all Federal health care programs by letter dated April 30, 2002. The I.G. cited Petitioner's conviction of a program related offense as grounds for mandatory exclusion pursuant to section 1128(a)(1) of the Act. The I.G. also advised Petitioner that the period of exclusion would run for 15 years effective 20 days after the date of the notice or May 20, 2002.

Petitioner requested a hearing in a letter dated June 21, 2002. The case was assigned to me for hearing and decision on July 12, 2002. A telephonic prehearing conference scheduled for August 7, 2002, had to be reset to September 13, 2002, due to a conflict in my calendar. The prehearing conference set for September 13, 2002, was subsequently reset for November 1, 2002, due to the I.G.'s unavailability. A telephonic prehearing conference was convened on November 1, 2002, the substance of which is memorialized in my Order of November 5, 2002. In my Order of January 13, 2003, I denied Petitioner's motion to dismiss this case without prejudice to his subsequent refiling for the reasons stated in that order and I set the briefing schedule for the I.G.'s proposed motion for summary disposition. On February 3, 2003, the I.G. filed its motion for summary disposition with supporting brief and three exhibits, I.G. Exhibits (I.G. Exs. 1 - 3). On March 27, 2003, Petitioner filed a response with one exhibit (P. Ex. A), a collection of 23 letters. On April 17, 2003, the I.G. filed a reply. I.G. Exs. 1 - 3 and P. Ex. A are all admitted as evidence as no objections to their admissibility have been raised.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Findings of fact

The following findings of fact are based upon the uncontested and undisputed assertions of fact in the parties' pleadings and the exhibits admitted.

1. At all relevant times, Petitioner was a licensed physical therapist practicing in Tennessee. I.G. Ex. 1.

2. On February 21, 2001, Petitioner was found guilty after a trial in the United States District Court, Eastern District of Tennessee, of one count of conspiracy to commit extortion and bribery of a government official in violation of 18 U.S.C. �� 371 and 1951; one count of aiding and abetting extortion in violation of 18 U.S.C. �� 1951 and 2; 23 counts of aiding and abetting bribery in violation of 18 U.S.C. �� 666(a)(2) and 2; and one count of bribery in violation of 42 U.S.C. � 1320a-7b(b) (section 1128(b) of the Act) and 18 U.S.C. � 2. I.G. Ex. 2.

3. Petitioner was sentenced in the Federal District Court, Eastern District of Tennessee to be imprisoned for a total of 52 months, followed by 3 years supervised release, and restitution of $862,180. I.G. Ex. 2.

4. Petitioner's criminal conduct occurred over a period greater than one year, from July 27, 1994 through at least March 21, 1997. I.G. Ex. 3.

5. The I.G. notified Petitioner by letter dated April 30, 2002, that he was being excluded from participation in Medicare, Medicaid and all federal health care programs (effective 20 days from the date of letter) for a period of 15-years. I.G. Ex. 1.

6. Petitioner filed a timely request for a hearing.

B. Conclusions of law

1. Summary judgment is appropriate in this case.

2. Petitioner was convicted within the meaning of section 1128(i) of the Act. 42 U.S.C. � 1320a-7(i).

3. Petitioner was convicted of a program related offense within the meaning of section 1128(a)(1) of the Act (42 U.S.C. � 1320a-7(a)(1)).

4. Petitioner's conviction of a program related offense requires that he be excluded from participation in Medicare, Medicaid, and other federal health care programs for a minimum period of five years. Act, sections 1128(a)(1) and 1128(c)(3)(B) (42 U.S.C. � 1320a-7(a)(1) and (c)(3)(B)).

5. Extending Petitioner's period of exclusion by 10 years for a total of 15, is not unreasonable given the presence of two aggravating factors and no mitigating factor.

6. Petitioner failed to establish by a preponderance of the evidence any mitigating factor within the meaning of 42 C.F.R. � 1001.102(c)(2).

7. The I.G. did not consider an aggravating factor that did not exist or fail to consider a mitigating factor.

8. Petitioner's exclusion was effective May 20, 2002, 20 days after the date of the I.G. notice. 42 C.F.R. � 1001.2003.

III. DISCUSSION

A. Issues

Whether there is a basis for Petitioner's exclusion.

Whether the period of exclusion is reasonable.

B. Applicable law

Petitioner's right to a hearing by an Administrative Law Judge (ALJ) and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. � 1230a-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: (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). The standard of proof is a 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 IG 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 and Medicaid programs any individual or entity convicted of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs. Section 1128(i) of the Act (42 U.S.C.�1230a-7(i)) defines the term "convicted" to include entry of a judgment of conviction by any court whether or not an appeal is taken or the record is later expunged; when there has been a finding of guilt against the individual or entity; when a plea of guilty or nolo contendere has been accepted; or when the individual has entered into a first offender, deferred adjudication, or other arrangement or program where a judgment of conviction has been withheld.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R. �� 1001.101 and 102(b) no exclusion pursuant to 1128(a) 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 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).

C. Analysis

Summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party. See e.g., Fed. R. Civ. P. 56(c); Garden City Medical Clinic, DAB No. 1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628, at 2 (1997) (in-person hearing required where non-movant shows there are material facts in dispute that require testimony); see also, New Millennium CMHC, DAB CR672 (2000); New Life Plus Center, DAB CR700 (2000).

Petitioner does not dispute that he was convicted of a program related offense. Petitioner also does not contest the aggravating factors cited by the I.G. Rather, Petitioner argues, based on the letters admitted as P.Ex. A, that he has an excellent reputation which should be considered when determining whether a 15-year exclusion is reasonable in this case. Thus, the only issue here is whether I may consider the letters and, if so, what weight they are to be accorded. Because I conclude as a matter of law that the letters may not be considered in mitigation of the period of exclusion, there are no issues of fact to be resolved in this case. Accordingly, summary judgment is appropriate.

1. It is undisputed that there is a basis for Petitioner's exclusion pursuant to section 1128(a)(1) of the Act.

Petitioner does not dispute that he was convicted of a program related offense for which mandatory exclusion from participation in Medicare, Medicaid and all Federal health care programs is required by section 1128(a)(1) of the Act. In fact, Petitioner admits in his request for hearing dated June 21, 2002, that there is a factual basis for his exclusion.

Petitioner was found guilty after a trial in the United States District Court, Eastern District of Tennessee, of one count of conspiracy to commit extortion and bribery of a government official in violation of 18 U.S.C. �� 371 and 1951; one count of aiding and abetting extortion in violation of 18 U.S.C. �� 1951 and 2; 23 counts of aiding and abetting bribery in violation of 18 U.S.C. �� 666(a)(2) and 2; and one count of bribery in violation of 42 U.S.C. � 1320a-7b(b) (section 1128(b) of the Act) and 18 U.S.C. � 2. I.G. Ex. 2. The conspiracy count provides a good summary of the offenses of which Petitioner was found guilty. Between July 27, 1994 through at least March 21, 1997, Petitioner with two others, engaged in bribery and/or extortion, paying a local government official more than $58,000 in order to receive favorable contracts to provide services, including physical therapy, occupational therapy, accounting and consulting services, to Lafollette Medical Center, some of the services being reimbursable under Medicare or other federal health care programs.

There is no dispute that Petitioner was convicted within the meaning of section 1128(i) of the Act (42 U.S.C. � 1320a-7(i)) and that the offenses of which he was convicted were related to the delivery of an item or service under a federal program within the meaning of section 1128(a)(1) of the Act (42 U.S.C. � 1320a-7(a)(1)). Accordingly, I conclude that there is a basis for Petitioner's exclusion.

2. It is undisputed that there are two aggravating factors which are properly considered in this case pursuant to 42 C.F.R. � 1001.102(b) as grounds for extending the period of exclusion beyond the minimum five years.

Petitioner also does not dispute the presence of two aggravating factors as alleged by the I.G.: (a) the act resulting in the conviction occurred over a period of one year or more; and, (b) the sentence imposed by the court included incarceration.

I have already discussed that the conduct for which Petitioner stands convicted occurred during the period July 27, 1994 through at least March 21, 1997, a period greater than one year. This fact is undisputed. Further, the undisputed evidence is that Petitioner was sentenced in the Federal District Court, Eastern District of Tennessee to be imprisoned for a total of 52 months, followed by 3 years supervised release, and restitution of $862,180. I.G. Ex. 2. Accordingly, I conclude that it has been established by a preponderance of the evidence that there are two aggravating factors which may be grounds for extending the period of exclusion beyond the minimum five years.

3. Petitioner has not proven any mitigating factor.

The Secretary has provided by regulation at 42 C.F.R. � 1001.102(c) that only if any of the aggravating factors justify a period of exclusion longer than five years, may mitigating factors be considered as a basis for reducing the period of the exclusion to no less than five years. The following factors may be considered as mitigating and a basis for reducing the period of exclusion:

(1) [t]he individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1500;

(2) [t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional, or physical condition before or during the commission of the offense that reduced the individual's culpability; or

(3) [t]he individual's or entity's cooperation with Federal or State officials resulted in - (i) [o]thers being convicted or excluded from Medicare, Medicaid, or all other Federal health care programs, (ii) [a]dditional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or (iii) [t]he imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

Evidence which does not relate to an aggravating factor or a mitigating factor specified in the regulation is irrelevant to determining the appropriate length of an exclusion. The burden is upon Petitioner to show the presence of mitigating factors. The I.G. bears the burden of proving the existence of aggravating factors. 42 C.F.R. � 1005.15; John (Juan) Urquijo, DAB No. 1735 (2000).

Petitioner does not argue that any of the listed mitigating factors are present in this case or present evidence that might show their existence. Rather, Petitioner argues that my "analysis is to go beyond the existence or non-existence of any narrowly constrained mitigating factors under 42 C.F.R. � 1001.102(c)." Petitioner's Brief (P. Brief), at 9. Petitioner offers 23 letters in support of the argument that Petitioner is not the inherently untrustworthy person the I.G. characterizes him to be. Petitioner argues based on the letters that he has the respect of his community despite his conviction, that he acknowledged his responsibility at sentencing, and that he is paying his debt to society. Thus, Petitioner reasons, a 15-year exclusion is unreasonable. P. Brief, at 9 - 10.

I have carefully considered prior ALJ decisions cited by Petitioner. I do not find that they support Petitioner's argument that I may depart from the regulations when making a determination regarding the reasonableness of the period of exclusion in this case. Accordingly, I conclude that Petitioner has not shown the existence of any mitigating factor.

4. A 15-year period of exclusion ( 5 year minimum plus 10 additional years) is not unreasonable in light of the aggravating factors properly considered by the I.G.

The Departmental Appeal Board (DAB) has made clear that the role of the ALJ in cases such as this is to conduct a "de novo" review as to the facts related to the basis for the exclusion and the facts related to the existence of aggravating and mitigating factors identified at 42 C.F.R. � 1001.102. See Joann Fletcher Cash, DAB No. 1725 ()www.hhs.gov/dab/decisions/dab1725.html) (2000), n.6 (n 9 in the original decision and Westlaw�), and cases cited therein. The regulation specifies that I must determine whether the length of exclusion imposed is "unreasonable" (42 C.F.R. � 1001.2007(a)(1)). The DAB has explained that in determining whether a period of exclusion is "unreasonable," I am to consider whether such period falls "within a reasonable range." Cash, n.6. The DAB cautions that whether I think the period of exclusion is too long or too short is not the issue. I am not to substitute my judgment for that of the I.G. and may only change the period of exclusion in limited circumstances.

My reading of 42 C.F.R. � 1001.102 is that with a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion of five years. Pursuant to 42 C.F.R. � 1001.102(d) one prior conviction for conduct that would cause mandatory exclusion under section 1128(a) of the Act, increases the minimum period of exclusion to ten years and two prior convictions automatically causes permanent exclusion. The five-year and ten-year minimum exclusions may only be extended if the I.G. can point to evidence that one or more of the aggravating factors specified at 42 C.F.R. � 1001.102(b) are present. The regulations do not limit the additional period of exclusion the I.G. may impose based upon the presence of aggravating factors. The regulations also do not specify how much of an extension is warranted by the existence of an aggravating factor. The DAB has indicated that it is not the number of aggravating factors that is determinative rather, it is the quality of the circumstances, whether aggravating or mitigating, which is controlling in analyzing these factors. Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

Section 1001.102 of 42 C.F.R. provides that when aggravating factors justify an exclusion of more than the mandatory minimum period, then the I.G. may consider any of the three specified mitigating factors if they are shown to exist. In Urquijo, the DAB suggested that the I.G.'s failure to consider a mitigating factor amounts to an abuse of discretion. The DAB also made clear in Urquijo that: if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal; or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum.

Thus, my determination of whether or not the exclusionary period in this case is unreasonable hinges on three-points: (1) whether the period of exclusion is within the reasonable range; (2) whether the I.G. has shown the existence of aggravating factors; and, (3) whether the Petitioner has shown that there is a mitigating factor that the I.G. failed to consider.

In this case, the aggravating factors the I.G. considered are not disputed and I agree those factors are present in this case. Furthermore, it has not been shown by Petitioner that the I.G. failed to consider a mitigating factor. Under the circumstances, there are no grounds for me to reassess the proper period of exclusion for I would simply be substituting my judgment for that of the I.G. I do find, however, that the 15-year exclusion imposed in this case is not unreasonable given the facts of this case. Specifically, I consider the number of charges involved in this case including the fact that the offenses included a conspiracy of long duration which relied upon trickery and deceit that adversely impacted Federal health care. I also note that the court imposed a sentence to confinement of more than four years and a significant amount of restitution. I conclude that a 15-year exclusion is within a reasonable range and is not unreasonable.

IV. CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all other federal health care programs for a period of 15 years, effective May 20, 2002.

Keith W. Sickendick

Administrative Law Judge