SUBJECT:

Frederick Nahas, M.D.,

Petitioner,

The Inspector General

AMENDED DECISION

PARTIAL SUMMARY JUDGMENT

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary Affirmance, and arises from the I.G.'s determination to exclude Frederick Nahas, M.D. (Petitioner), for a period of four years, from participation in Medicare, Medicaid, and all other federally-funded health care programs under the authority set out in section 1128(b)(2) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(b)(2).

The parties have submitted briefs and exhibits in support of their positions, and I have considered them all carefully. Having done so, I find no material facts in dispute as to several issues. As to those issues in which no material facts are in dispute, I conclude that the I.G.'s position is correct as a matter of law: a basis for Petitioner's exclusion under section 1128(b)(2) does exist; the I.G. has demonstrated the aggravating factor of incarceration set out in 42 C.F.R. � 1001.301(b)(2)(iv); and Petitioner has failed to demonstrate the mitigating factor of reduced culpability set out in 42 C.F.R. � 1001.301(b)(3)(i). There remains, however, a genuine and material factual dispute as to whether Petitioner's exclusion would leave "alternative sources of the type of health care items or services furnished by [Petitioner]" unavailable, a mitigating factor set out in 42 C.F.R. � 1001.301(b)(3)(iii).

Thus, the I.G.'s determination to exclude Petitioner must be upheld, but the reasonableness of the term of that exclusion remains to be evaluated once the factual question of the availability of "alternative sources" has been resolved in an evidentiary hearing.

I. PROCEDURAL BACKGROUND

Petitioner is a physician who specializes in general and vascular surgery, with particular emphasis in bariatric surgery and gastric bypass procedures. During most of the 1990s and the early 2000s, he practiced in New Jersey. From 1996 until 1999, Petitioner's practice was the subject of an I.G. investigation into possible misconduct in connection with billings for Medicare and Medicaid patients. The extended course of this investigation eventually led, in 2001, to the issuance and execution of a search warrant and the seizure of a substantial volume of Petitioner's office records.

On June 5, 2002, Petitioner appeared in United States District Court for the District of New Jersey. Acting with counsel, and in conformity with a plea agreement executed by himself, his attorney, and the United States Attorney, Petitioner waived grand jury indictment and pleaded guilty to a single-count felony charge of preventing, obstructing, misleading, and delaying the communication of information and records relating to a health care investigation, in violation of 18 U.S.C. �� 1518 and 2. Administrative Law Judge Exhibit (ALJ Ex.) 1; I.G. Ex. 3; Petitioner's (P.) Ex. 64.

Following a September 9, 2002 hearing on his motion for a downward departure from sentencing guidelines, Petitioner appeared for sentencing on January 2, 2003. ALJ Ex. 2. At that proceeding he was committed to the custody of the United States Bureau of Prisons for a one-month term of imprisonment, was ordered to serve a three-month term of home detention, and was required to report to and reside in a community corrections facility on weekends for a period of two months. Petitioner was also ordered to perform 100 hours of community service, to pay a fine of $20,000 and fees, and to serve an additional term of three years supervised probation. P. Ex. 71. Although a Judgment of Conviction reciting these details was signed on January 7, 2003, and filed on January 13, an Amended Judgment of Conviction that correctly reflected the sentencing judge's actual intentions was signed on January 21, 2003, and filed on January 24, 2003. I.G. Ex. 4; P. Ex. 65, at 6-10 and 11-15.

On January 24, 2003, the I.G. wrote to Petitioner informing him that she was considering whether to invoke the permissive exclusion process authorized by section 1128(b) of the Act, 42 U.S.C. � 1320a-7(b), and soliciting from him any information he might wish the I.G. to consider in determining whether to proceed with the exclusion. P. Ex. 65, at 16. Petitioner responded through counsel on April 16, 2003, with an untimely but detailed statement arguing against exclusion, and the I.G. acknowledged receipt of Petitioner's response. P. Ex. 65, at 17-21 and 22.

On July 31, 2003, the I.G. notified Petitioner that his response had been considered, but that the I.G. had determined permissively to exclude Petitioner, and that the exclusion would be for a term of 10 years based on three aggravating circumstances. P. Ex. 65, at 23-25. Those aggravating circumstances were alleged to be the significant investigative costs made necessary by Petitioner's misconduct, 42 C.F.R. � 1001.301(b)(2)(i); the alleged state disciplinary action against Petitioner based on his misconduct, 42 C.F.R. � 1001.301(b)(2)(vi); and the fact that Petitioner's sentence included incarceration, 42 C.F.R. � 1001.301(b)(2)(iv). The I. G. has twice revised downward the term of Petitioner's exclusion, as will be noted later. Petitioner timely perfected this appeal by filing his Request for Hearing dated August 19, 2003. Request for Hearing; P. Ex. 65, at 26-28.

Soon after filing his Request for Hearing in this matter, Petitioner on September 16, 2003 sought injunctive relief against the exclusion in United States District Court for the District of New Jersey. P. Exs. 65, at 1-5; 70. After hearing and briefing, that effort proved unsuccessful: the District Court's order denying injunctive relief was filed on October 22, 2003. I.G. Ex.7.

I have convened two telephonic prehearing conferences in this case. The first was held on September 30, 2003, and it dealt with how this case should proceed during the District Court litigation. Its results are summarized in my Order of October 3, 2003. The second conference was held on October 29, 2003, and it addressed in detail a number of procedural and substantive issues, including a schedule by which the I.G.'s effort to win summary affirmation could be addressed. The results of this second conference are summarized in my Order of November 3, 2003.

The briefing schedule established in my Order of November 3, 2003 has been modified somewhat at the parties' request, but the cycle of briefing is now complete. Each party has submitted exhibits with its pleadings, and, there being no objections, I here admit them to the record on which I base this decision: I.G. Exs. 1-9 are admitted, and P. Exs. 1-71 are admitted.

In order to be certain that all relevant District Court documents were available to me, my October 3, 2003 Order requested that the parties obtain, exchange, and submit to me documents that I suggested might be helpful. The parties graciously did so, and my Order of November 3, 2003, identifies their submissions. All but two of the documents described are now admitted as I.G. Exs. or P. Exs. The remaining two documents are identified and admitted as follows: a five-page letter dated February 5, 2003, captioned "Plea Agreement with Frederick J. Nahas" is identified and admitted on my motion as ALJ Ex. 1; a 14-page "Transcript of Motion for Downward Departure" dated September 9, 2002, in United States v. Nahas, No. 02-CR-0459, (D.N.J.), is identified and admitted on my motion as ALJ Ex. 2.

During the course of briefing set out in my Order of November 3, 2003, the I.G. has twice revised downward the term of Petitioner's proposed exclusion. The first revision was announced in the I.G.'s November 20, 2003 letter to Petitioner, in which the I.G. abandoned reliance on the aggravating factor based on alleged state disciplinary action, and recalculated to a lesser amount the alleged investigative costs. I.G. Ex. 1. These changes in the I.G.'s position led to the revision of the proposed term of exclusion from 10 years to seven. The second revision was announced in the I.G.'s letter to Petitioner of February 6, 2004. I.G. Ex. 6. In this second revision, the I.G. abandoned entirely any reliance on investigative costs as an aggravating factor, and revised the proposed term of exclusion downward from seven years to four. This second revision explicitly relies on the single aggravating factor of Petitioner's incarceration as the basis for the I.G.'s determination to enhance the proposed term of exclusion from the "benchmark" three years to four years.

II. ISSUES

The issues before me in this appeal are limited by 42 C.F.R. � 1001.2007(a)(1). Those issues are:

1. Whether a basis exists for the imposition of the proposed exclusion pursuant to section 1128(b)(2) of the Act; and, if so,

2. Whether the length of the proposed four-year term of exclusion is reasonable?

This decision resolves the first issue in the I.G.'s favor because Petitioner's conviction satisfies the predicate for permissive exclusion pursuant to section 1128(b)(2) of the Act, and the I.G.'s exercise of discretion to impose a term of exclusion is not subject to review in this forum. The second issue remains unresolved, since there is a genuine issue of material fact as to the mitigating factor specified in 42 C.F.R. � 1001.301(b)(3)(iii). Since I am obliged to evaluate the reasonableness of the term of exclusion in light of all proven mitigating or aggravating factors, I must conduct a hearing and receive additional evidence on this limited point before attempting final evaluation of the term's reasonableness.

III. CONTROLLING STATUTES AND REGULATIONS

Section 1128(b)(2) of the Act, 42 U.S.C. � 1320a-7(b)(2), authorizes the exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any individual or entity convicted in connection with the interference with or obstruction of any investigation into the criminal offenses listed in sections 1128(a) or 1128(b)(1) of the Act. Those specified offenses include, at section 1128(a)(1) of the Act, crimes related to "the delivery of an item or service under title XVIII or under any State health care program."

The Office of Inspector General (OIG) is charged with effecting exclusions based on section 1128(b)(2) of the Act. See 42 C.F.R. � 1001.301. If the I.G. determines that a conviction constitutes a valid predicate for the exclusion, and exercises her discretion to proceed with the sanction, she must send notice of her intent to exclude the affected individual or entity; the affected party is then permitted to respond to this notice of intent with documentary evidence and written argument concerning whether the exclusion is warranted and any related issues. 42 C.F.R. � 1001.2001.

If the I.G. remains convinced that exclusion is warranted, she must send written notice of her final decision to exclude to the affected individual or entity, and must in that notice provide detailed information on a number of points, including the appeal rights of the excluded party. 42 C.F.R. � 1001.2002. See also Act, section 1128(c), 42 U.S.C. � 1320a-7(c).

The exclusion is to be imposed for a period of three years, unless the I.G. determines that certain aggravating or mitigating factors, established by regulation, support an enhancement or a reduction of the three-year term. Act, section 1128(c)(3)(D), 42 U.S.C. � 1320a-7(c)(3)(D). Those aggravating and mitigating factors are found at 42 C.F.R. � 1001.301(b). The specific factors outlined in the regulations which are relevant to the discussion below are these:

42 C.F.R. � 1001.301(b)(2)(iv) provides that an aggravating factor is present if "[t]he sentence imposed by the court included incarceration."

42 C.F.R. � 1001.301(b)(3)(i) provides that it is a mitigating factor if the record of 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."

42 C.F.R. � 1001.301(b)(3)(iii) provides that a mitigating factor is established when "[a]lternative sources of the type of health care items or services furnished by the individual or entity are not available."

The individual or entity to be excluded may appeal the exclusion by filing a request for hearing before an ALJ. 42 C.F.R. � 1001.2007. That regulation sets limits on the issues that may be considered on appeal. The regulation at 42 C.F.R. � 1001.2007(a)(1) provides that, except for certain exceptions not relevant here, a petitioner may seek review of an exclusion determination only on the questions of whether a basis exists for the exclusion, and whether the length of the exclusion is unreasonable.

The criminal statute to which Petitioner pleaded guilty provides in relevant part:

(a) Whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, obstruct, mislead, or delay the communication of information or records relating to a violation of a Federal health care offense to a criminal investigator shall be fined under this title or imprisoned not more than 5 years, or both.

18 U.S.C. � 1518.

IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW

I find and conclude as follows:

1. As to the Findings recited below in Findings 2-10, there are no material facts in genuine dispute and summary disposition is therefore appropriate as to them.

2. At all material times, Petitioner Frederick J. Nahas, M.D., was a physician and surgeon licensed to practice medicine in the State of New Jersey. I. G. Exs. 2, 3; P. Ex. 65, at 17-24.

3. On June 5, 2002, in United States District Court for the District of New Jersey, Petitioner pleaded guilty to the felony charge of preventing, obstructing, misleading, and delaying the communication of information and records relating to a health care investigation of his dealings with the Medicare program, in violation of 18 U.S.C. �� 1518 and 2. United States v. Nahas, No. 02-CR-0459 (D. N. J.); I.G. Ex. 3; P. Ex. 64; ALJ Ex. 1.

4. An Amended Judgment of Conviction sentencing Petitioner on his plea was signed on January 21, 2003, and entered against Petitioner on January 24, 2003. P. Ex. 65, at 11-15.

5. As a consequence of his conviction for violating 18 U.S.C. � 1518, Petitioner was sentenced to a one-month term of imprisonment, followed by a three-month term of home confinement, and by a term of two months' weekend residence at a community corrections facility. P. Ex. 65, at 13.

6. Petitioner's plea of guilty, as described above in Finding 3, and the entry of Judgment of Conviction on that plea, as described above in Finding 4, constitute a "conviction" within the terms of sections 1128(i)(1) and (3) of the Act, 42 U.S.C. � 1320a-7(i)(1) and (3). See 42 C.F.R. � 1001.2.

7. A nexus and a common-sense connection exists between the criminal offense of which Petitioner was convicted and the delivery of an item or service under the Medicare program. Berton Siegel, D.O., DAB No. 1467 (1994).

8. A basis exists for the I.G.'s exercise of discretionary authority, pursuant to section 1128(b)(2) of the Act, 42 U.S.C. 1320a-7(b)(2), to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs.

9. Because the sentence imposed on Petitioner as the result of his conviction included incarceration, the aggravating factor set out in 42 C.F.R. � 1001.301(b)(2)(iv) is present.

10. Because the record of the criminal proceedings described above in Findings 3, 4, and 5, does not demonstrate that the District Court determined that Petitioner had a mental, emotional, or physical condition, before or during the commission of the offense, that reduced Petitioner's culpability for the offense, the mitigating factor set out in 42 C.F.R. � 1001.301(b)(3)(i) is not present.

11. There remain genuine disputes of material fact as to the existence of the mitigating factor set out in 42 C.F.R. � 1001.301(b)(3)(iii), and summary disposition is therefore not appropriate as to that issue. An evidentiary hearing will be required.

V. DISCUSSION

There is no serious dispute that Petitioner's plea of guilty to violating 18 U.S.C. � 1518, and his conviction on that plea, form the predicate for an exclusion based on the permissive authority of section 1128(b)(2) of the Act. This case does not center on a debate over the nature of definition of "conviction," nor does it require that I analyze the nexus between the offense of which Petitioner was convicted and the delivery of a service under the Medicare and Medicaid programs. At page 20 of his Memorandum in Opposition to Summary Affirmance, Petitioner concedes:

There can be no dispute that Dr. Nahas has a conviction for interfering with a health care investigation. He signed a plea agreement, he allocated a sufficient factual basis (albeit different than the one the OIG suggests), and a Judgment of Conviction has been entered against him. Dr. Nahas admits that this fact triggers the OIG's authority to permissively exclude him under 42 U.S.C. 1320a-7(b) (emphasis in original).

In any case, the record establishes the predicate for permissive exclusion beyond cavil. The hearing on Petitioner's guilty plea appears in toto at P. Ex. 65, and it shows that Petitioner's plea was accepted. P. Ex. 65, at 20. The acceptance of a guilty plea satisfies one of the statutory and regulatory definitions of "conviction." Act, section 1128(i)(3), 42 U.S.C. � 1320a-7(i)(3); 42 C.F.R. � 1001.2. The Amended Judgment of Conviction entered on January 24, 2003, satisfies an alternate definition of "conviction." Act, section 1128(i)(1), 42 U.S.C. � 1320a-7(i)(1); 42 C.F.R. � 1001.2. The colloquy among the United States District Judge, Petitioner, and the Assistant United States Attorney undertaken at the time of the plea, fully explored the nature and history of Petitioner's conduct. P. Ex. 65, at 1-20. That colloquy is consistent in every material way with the Information to which Petitioner pleaded guilty. I.G. Ex. 3. Either the plea colloquy or the Information would in itself suffice to establish the nexus between the criminal offense defined in 18 U.S.C. � 1518, and admitted by Petitioner, and the delivery of an item or service under the Medicare program; taken together, they move the issue beyond the need for further discussion. Salvacion Lee, M.D., DAB No. 1850 (2002); Berton Seigel, D.O., supra.

Petitioner may have conceded that the I.G. possesses the discretionary authority to exclude him, but he vigorously contests here, as he did in United States District Court, the manner in which the I.G. has exercised that discretion, and the absence of an avenue by which that exercise of discretion is subject to judicial or quasi-judicial review. At pages 7-9 of his Memorandum in Opposition to Summary Affirmance, Petitioner frames the focus of his argument thus:

Noticeably absent from the regulation, and crucial to Dr. Nahas' instant challenge, is any standard under which either the OIG or the Secretary may determine whether permissive exclusion is, or is not, warranted. Stated otherwise, the regulation itself provides that the OIG may exclude an individual for a conviction of obstruction, but it does not articulate any standards by which such decisions are to be made. Aggravating and mitigating factors are listed to guide the OIG in determining the length of the exclusion once it is imposed, but the Secretary failed to promulgate ground rules to guide the OIG in determining whether to impose a permissive exclusion (emphases in original).

* * *

Although permissively excluded individuals are entitled to an administrative hearing, the Secretary's regulations deny them any right to a review of the exclusion decision itself. In other words, the regulations prohibit the administrative law judge from examining the decision to permissively exclude an individual (emphasis in original).

Petitioner argues that unless the I.G. is required to articulate a justification for choosing to exercise the authority to exclude, the mere fact of the predicate conviction and the consequent vesting of discretionary authority to exclude is not enough: without an articulated standard and an explicit application of that standard to Petitioner's circumstances, "the imposition of the permissive exclusion is arbitrary, capricious and unreasonable in that the OIG is required to articulate a justification, beyond the conviction itself, for permissive exclusion." Petitioner's Memorandum in Opposition to Summary Affirmance, at 19.

This argument failed in the United States District Court, and it must fail here. See I.G. Ex 7, at 12-14. The controlling authorities in this forum are clear: an ALJ is without jurisdiction to review the I.G.'s exercise of discretion in permissive exclusions, once a predicate conviction authorizing the exclusion has been established pursuant to section 1128(b) of the Act. Explicit language to that effect may be found in the regulations establishing the jurisdiction of this forum:

c) The ALJ does not have the authority to--

(5) Review the exercise of discretion by the OIG to exclude an individual or entity under section 1128(b) of the Act, or determine the scope and effect of the exclusion.

42 C.F.R. � 1005.4(c)(5).

Appellate panels of the Departmental Appeals Board (Board) have endorsed the regulation and affirmed its language in vigorous terms, and the rule thus derived binds me to its application in this case. Once I have found that there is a nexus of fact and law by which Petitioner became liable to exclusion, I am without jurisdiction to evaluate the propriety of the I.G.'s exercise of discretion in determining to proceed to imposition of the exclusion. Keith Michael Everman, D.C., DAB No. 1880 (2003); Tracy Gates, R.N., DAB No. 1768 (2001); Wayne E. Imber, M.D., DAB No. 1740 (2000); see also George E. Smith, M.D., M.Ed., DAB CR885 (2002). These decisions appear to be in every way consistent with Webster v. Doe, 486 U.S. 592 (1988) and Heckler v. Chaney, 470 U.S. 821 (1985), and with the District Court's treatment of the issue in the specific factual context of this case, Nahas v. Thompson, et al., No. 03-4358 (D.N.J., Oct. 22, 2003). Moreover, the Board in Imber noted that the I.G.'s solicitation and review of the petitioner's comments prior to a final decision on exclusion demonstrated an exercise of discretion. The record in the case before me contained particularly convincing evidence of that process. Wayne E. Imber, M.D., DAB No. 1749 at 2; P. Ex. 65, at 16-25.

I can discern no conflict between the regulation discussed above and section 205(b) of the Act, 42 U.S.C. � 405(b). Petitioner's argument that such a conflict exists, that the statute permits me to review the I.G.'s exercise of discretionary authority under section 1128(b), and that I should apply the statute and ignore the regulation, is based on a flawed reading of the statute itself. Section 205(b) of the Act applies in a context entirely different from the one before me, and has nothing whatsoever to do with situations in which an exercise of discretionary authority is involved. Nor may I consider Petitioner's arguments derived from constitutional and equitable theories, since they are by settled precedent beyond my jurisdiction and authority. While such issues and arguments may be suitable for discussion and debate in other forums, they are not legitimate subjects for litigation in this one. Wisteria Care Center, DAB No. 1892 (2003); Salvacion Lee, M.D., supra; Hermina Traeye Memorial Nursing Home, DAB No. 1810 (2002); Sentinel Medical Laboratories, Inc., DAB No. 1762 (2001).

There is a basis for the I.G.'s exercise of authority under the terms of section 1128(b)(2) of the Act. The material facts supporting that basis are established without genuine dispute. Accordingly, the I.G. is entitled to summary affirmance on that issue.

Before addressing the specific aggravating and mitigating factors alleged or claimed in this case, it may be helpful to discuss very briefly the approach I shall eventually take in weighing them. The first principle is this: no matter which aggravating or mitigating factors may eventually be established, in assessing the term of exclusion I must not go further than the question of reasonableness, and my review must reflect the deference accorded to the I.G. by the Secretary's regulation. So long as the length of the exclusion is within a reasonable range and is based on demonstrated criteria, I must not alter it. Jeremy Robinson, DAB No. 1905 (2004); JoAnn Fletcher Cash, DAB No. 1725 (2000).

Other than the "benchmark" three-year period, neither the Act nor implementing regulations direct that an exclusion of any particular length be imposed based on the presence of any particular aggravating factors or the absence of any particular mitigating factors. The factors identified at 42 C.F.R. � 1001.301(b)(2) and (3) function in a sense as rules of evidence: they establish which facts may be 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, at 4, supra; Keith Michael Everman, D.C., supra, and cases cited therein. The circumstances of each case "drive the weight that a decisionmaker can give the aggravating and mitigating factors." Jeremy Robinson, at 4, supra. The presence of aggravating factors not offset by mitigating factors is not an automatic basis for deciding that an exclusion of any particular length is reasonable. Nor is the number of aggravating factors present in a case a particularly significant indicator of whether the length of an exclusion's term is reasonable. As to all but one of the potential mitigating and aggravating factors to be evaluated here, it is the "quality of the circumstances" assayed according to what they reveal about a petitioner's trustworthiness, itself to be understood in the context of the goals of the exclusion remedy, that I must consider. The mitigating factor described in 42 C.F.R. � 1001.301(b)(3)(iii) requires a different analysis, as I shall discuss below. Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

Evidence relating to an aggravating factor or factors set out at 42 C.F.R. � 1001.301 (b)(2)(i), (ii), (iii), (iv), (v), and (vi), may be countered by evidence relating to any of the mitigating factors set forth at 42 C.F.R. � 1001.301(b)(3)(i), (ii), and (iii). Those mitigating factors appear immediately following the regulation's emphatic expression that "Only the following factors may be considered as mitigating and a basis for reducing the period of exclusion . . . " 42 C.F.R. � 1001.301(b)(3). As to each of the mitigating factors: ". . . Petitioner ha[s] the burden of proving any mitigating factor by a preponderance of the evidence, since the mitigating factor is in the nature of an affirmative defense." Barry D. Garfinkel, M.D., supra, at 12; Lloyd G. Bayme, M.D., DAB CR876 (2002). In assessing Petitioner's evidence in support of his claims in mitigation, I shall apply that standard.

The sole aggravating factor now relied on by the I.G. is specified at 42 C.F.R. � 1001.301(b)(2)(iv): the I.G. alleges that Petitioner's sentence included incarceration. The Amended Judgment in Petitioner's criminal prosecution committed him to the custody of the United States Bureau of Prisons for a term of one month, followed by a three-month term of home confinement and two months of weekend confinement at a community corrections center, a kind of facility frequently referred to as a "halfway house." P. Ex. 65, at 11-15. Although Petitioner vigorously maintains that this sentence was of minimal severity, each of its components individually and separately satisfies the definition of "incarceration" to be applied in this case. 42 C.F.R. � 1001.2, at "Incarceration." There is no genuine issue of material fact as to the terms of the sentence:; thus, the I.G. has established this aggravating factor.

Whether the nature of the sentence can fairly be characterized as minimal, or whether it is better seen as " 'relatively substantial' and more than 'token' incarceration," Jeremy Robinson; supra; Jason Hollady, M.D., DAB No. 1855 (2002), is best understood in the words of the sentencing judge. At the hearing on Petitioner's Motion for Downward Departure the judge made these observations:

. . . I do not think he meets the standard for diminished capacity as set forth under the guidelines and in the relevant caselaw, nor does he meet the criteria for aberrant behavior. We have here a pattern of obstruction of justice that, portend, will cover a period of time.

Moreover, even if he did meet the guideline standards, together or either one of these, I would not exercise my discretion here, given the nature of the offense and the conduct here. It's in my discretion. I decline to grant the motion for downward departure.

ALJ Ex. 2, at 6.

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. . . I can impose everything from probation with a halfway house or even home confinement to twelve months in prison.

From the volume of letters that I have received, it appears that the Doctor's patients and colleagues have the highest regard for him. But, on the other hand, it appears that the people who are on the wrong side of the Doctor, whether those who seek to investigate him or those that seek to break off relationships with him, may indeed have something to fear.

ALJ Ex. 2, at 8.

At the final sentencing hearing, Petitioner again argued for a downward departure from federal sentencing guidelines. The sentencing judge's comments at various points in the hearing are instructive:

All right. Well, for the reasons previously stated, I will decline to do so. While I have the discretion to downwardly depart on those grounds, I do not think it's appropriate, but I will consider the submissions in fashioning an appropriate sentence.

P. Ex. 71, at 3.

* * *

I've given this a lot of thought. There cannot be one rule for the defendant, and one rule for everyone else. Indeed, when you look at what the defendant did, as I said, this was a very serious offense -- repeated acts of obstruction of justice. To turn a blind eye on this, to impose home confinement, say stay home and continue doing everything else in your life, breeds cynicism, a feeling that this Court grants special privileges to the wealthy and powerful, allows them to get away with it. That is not and cannot be the role of any court of justice.

P. Ex. 71, at 13.

The import of these observations is impossible to misapprehend. The sentencing judge regarded Petitioner's offense as a series of repeated, serious obstructions of justice, and expressly declined to fashion a sentence that would minimize the gravity of Petitioner's conviction. The fundamental nature of the offense itself is crimen falsi: the willful subversion of a truthseeking process. The process was and is intended to protect the integrity of the Medicare program. To the extent that the truthseeking process is frustrated and obstructed, the program is jeopardized. The intrinsic nature of such conduct has obvious implications in any analysis of Petitioner's truthfulness. In declining to minimize Petitioner's offense, the sentencing judge made clear that I must evaluate the sentence as a significant impeachment of Petitioner's trustworthiness. I shall do so when all potential mitigating factors have been addressed.

One of those potential mitigating factors can be addressed now. At page 36 of his Memorandum in Opposition to Summary Affirmance, Petitioner asserts that the sentencing judge "considered Dr. Nahas' emotional and mental state in sentencing him to the minimum period. . . ." Whether a sentencing judge "considers" such factors is not the question: to satisfy the regulation's language the mitigating factor established in 42 C.F.R. � 1001.301(b)(3)(i) requires that the sentencing court "determine" that such a condition existed "before or during the commission of the offense," and that the condition "reduced the individual's culpability." Although explicit findings in ipsissima verba are not required to satisfy the regulation, some such general findings, sufficient to establish an operant link between condition, diminished responsibility, and offense must appear at some point in the criminal record. Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 (2002); Frank R. Pennington, M.D., DAB No. 1786 (2001). In light of the sentencing judge's explicit rejection of any notion of diminished culpability at the two hearings related to sentencing, and in the absence of any other suggestion in the court records of a causal and temporal link between condition and crime, Petitioner's reliance on the "reduced culpability" factor described in 42 C.F.R. � 1001.301(b)(3)(i) is misplaced and the mitigating factor has not been established.

Nor has Petitioner's belated mention of his offer to assist investigators in other probes fairly raised the possible presence of another mitigating factor. At page 9 of Petitioner's Sur-Reply Brief, this statement appears:

. . .Second, is a new issue. After Dr. Nahas pleaded guilty, he offered to assist the OIG in the investigation of Medicare fraud by physicians in the South Jersey area. This offer was rejected.

This oblique reference to the invocation of 42 C.F.R. � 1001.301(b)(3)(ii) appears in no further detail, and at no point before or after its hinted-at application as set out above. Taken on its face, the cited language does not properly plead the factor, but since the regulation defining that mitigating factor demands proof of both active cooperation and objective results, the factor, even if arguendo pleaded, is not established prima facie, and requires no further explication.

One mitigating factor remains to be discussed, and it has been quite adequately raised. Petitioner asserts that his exclusion would result in a situation in which "[a]lternative sources of the type of health care items or services furnished by the individual or entity are not available." 42 C.F.R. � 1001.301(b)(3)(iii). Petitioner has submitted affidavits from a physician who is also a hospital executive, and three former patients, in support of his reliance on the "alternative sources" mitigating factor. P. Ex. 66; P. Exs. 67-69. In general, those affidavits assert that Petitioner's exclusion will leave morbidly obese patients in the "South Jersey" area unserved in his specialty. The I.G. has countered these affidavits with two affidavits from physicians who perform surgical procedures on obese patients similar to those performed by Petitioner, and who practice in southern New Jersey. I.G. Exs. 8, 9. These affidavits are, obviously, contradictory. They create a situation in which material issues of fact must be resolved, and such a situation is inappropriate for summary disposition. A hearing on that limited issue is necessary.

The task of factfinding in the particular context of the "alternative source" factor is complex and subtle, and somewhat more focused than the parties' affidavits and arguments thus far might suggest. Its operation, and the elements of proof the parties will be required to address, can be observed in the definitive treatment undertaken by the Board in Barry D. Garfinkel, M.D., supra. I call the parties' particular attention to the importance of discussing two points not fully addressed in their affidavits: the area in which "alternative sources" might be "not available," and the distinction emphasized in Garfinkel between the general population of potential patients and the specific population of Medicare and Medicaid program patients. The Board has also spoken at considerable length on how this "alternative source" factor should be weighed if it is established as a fact. Unlike other mitigating factors, proof of this one does not suggest that the offense on which the exclusion is based is less serious or the perpetrator more trustworthy, but instead recognizes that excluding a provider may carry risks that must be balanced against the purpose of the exclusion. Id. at 8. The focus in evaluating the "alternative source" factor must be on the adverse effect of the exclusion on previously available services. However, it is not sufficient that an exclusion might reduce the number of available health care providers, since some reduction is likely to result from any exclusion. To establish this mitigating factor, a provider must prove significant adverse changes in the previously available services to program patients. Randall L. Snook, M.D., DAB CR761 (2001).

VI. CONCLUSION

For the reason set forth above, I grant the I.G.'s Motion for Summary Affirmance as to the existence of a basis for Petitioner's exclusion: such a basis does exist under section 1128(b)(2) of the Act, and the I.G.'s determination to exclude Petitioner is sustained. I sustain the I.G.'s determination that the aggravating factor based on incarceration, as set out in 42 C.F.R. � 1001.301(b)(2)(iv), is present in Petitioner's case, and I sustain the I.G.'s determination that the mitigating factor based on reduced culpability, as set out in 42 C.F.R. � 1001.301(b)(3)(i), is not present in Petitioner's case.

There remains a genuine issue of material fact as to the existence of the mitigating factor based on "alternative sources" of the specific type of health care items provided to program patients by Petitioner, as set out in 42 C.F.R. � 1001.301(b)(3)(iii). As to that factor, the I. G.'s Motion is denied. A hearing for the taking of evidence on that point will be scheduled as soon as practical, and the parties are advised to expect an inquiry from this Office concerning possible dates and locations.

Richard J. Smith

Administrative Law Judge