SUBJECT:

Victor Chehebar, M.D.,

Petitioner,

The Inspector General

DECISION

Victor Chehebar, M.D., Petitioner, is excluded from participation in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (the Act) (42 U.S.C. § 1320a-7(a)(1)), effective February 19, 2004, based upon his conviction of health care fraud, a criminal offense related to the delivery of an item or service under Medicare. 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)). Further, extension of the minimum period of exclusion by 15 years, for a total period of 20 years, is not unreasonable given the presence of four aggravating factors.

I. PROCEDURAL HISTORY

The Inspector General (I.G.) notified Petitioner by letter dated January 30, 2004, that he was being excluded from participation in Medicare, Medicaid and all federal health care programs for 20 years pursuant to section 1128(a)(1) of the Act. The I.G. cites as the basis for Petitioner's exclusion his conviction by the United States District Court, Eastern District of New York, of a "criminal offense related to the delivery of an item or service under the Medicare program." I.G. Exhibit (I.G. Ex.) 1.

Petitioner requested a hearing by letter dated February 17, 2004. The request for hearing was assigned to me for hearing and decision on March 12, 2004. On April 15, 2004, I convened a telephonic prehearing conference, the substance of which is recorded in my Order of April 16, 2004. The parties agreed during the conference call that this case may be decided on the written record without the need for an oral hearing. Pursuant to the briefing schedule established during the prehearing conference, the I.G. filed a motion and brief for summary affirmance of Petitioner's exclusion (I.G. Brief) on May 17, 2004, with I.G. exhibits 1 through 4. Petitioner filed a brief in response (P. Brief) on June 16, 2004 with exhibits (P. Ex.) 1 through 6. The I.G. filed a reply brief (I.G. Reply) on July 20, 2004. No objections were made to any of the offered exhibits, and I.G. Exs. 1 through 4 and P. Exs. 1 through 6 are admitted.

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. Citations to the evidence are found in the analysis section of this decision.

1. The I.G. notified Petitioner by letter dated January 30, 2004, that he was being excluded from participation in Medicare, Medicaid and all federal health care programs for 20 years pursuant to section 1128(a)(1) of the Act, due to his conviction of one count of health care fraud.

2. Petitioner requested a hearing by letter dated February 17, 2004.

3. Petitioner was convicted by the United States District Court, Eastern District of New York, of one count of health care fraud in violation of 18 U.S.C. § 287 and sentenced on July 25, 2003 to 18 months incarceration followed by three years of supervised release, to pay restitution of $1.4 million, and to pay miscellaneous costs.

4. The acts for which Petitioner was convicted resulted in financial loss to a government program or one or more entities of $5,000 or more.

5. Petitioner agreed to pay restitution totaling $1.4 million to 42 entities.

6. Petitioner engaged in fraudulent acts over a period of one year or more.

7. Petitioner was sentenced to incarceration.

8. Petitioner's license to practice medicine in the State of New York was suspended based upon his conviction by the U.S. District Court.

9. Petitioner entered a plea agreement in the federal district court waiving his constitutional rights and relieving the government of the burden to prove his misconduct and such matters as the actual amount of loss.

10. Execution of Petitioner's sentence to confinement was stayed pending appeals.

11. Petitioner has letters from many individuals attesting to his dedication, integrity, skill, and generosity.

12. The federal district judge indicated during sentencing proceedings that he did not agree with the federal sentencing guidelines.

B. CONCLUSIONS OF LAW

1. Petitioner timely requested a hearing to challenge the I.G.'s proposed exclusion.

2. The parties have waived oral hearing.

3. Petitioner was convicted of an offense 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)) and there is a basis for Petitioner's exclusion from participation in Medicare, Medicaid, and all federal health care programs.

4. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(1).

5. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(2).

6. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(5).

7. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(9).

8. Deterrence and the protection of federal funds and program beneficiaries from untrustworthy individuals are remedial purposes of the exclusionary provisions of the Act.

9. It is not unreasonable for Petitioner to be excluded from participation in Medicare, Medicaid, and all federal health care programs for the statutory minimum of five years, plus an additional 15 years based on the presence of 4 aggravating factors.

10. The period of exclusion begins to run effective February 19, 2004, the twentieth day after January 30, 2004, the date of the I.G.'s notice of intent to exclude. 42 C.F.R. § 1001.2002.

III. ANALYSIS

A. APPLICABLE LAW

Petitioner's right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of the Department of Health and Human Services (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.

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual convicted of a criminal offense related to the delivery of an item or service under the Medicare or Medicaid program or any state health care program.

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. § 1001.102(b), 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. ISSUES

The Secretary has by regulation limited my scope of review to two issues:

Whether there is a basis for the imposition of the exclusion; and,

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 I.G. bears the burden on all other issues. 42 C.F.R. §1005.15(b) and (c).

C. DISCUSSION

Petitioner's right to a hearing by an 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)). Pursuant to section 1128(f) of the Act, an individual or entity subject to exclusion is entitled to notice and hearing to the same extent as provided by section 205(b) of the Act. An oral hearing is contemplated. See Section 205(b) of the Act; 42 C.F.R. §§ 1005.2(a), 1005.3(a), 1005.4(a) and (b), 1005.9, 1005.15, and 1005.16. However, an oral hearing is not required where the parties agree to submit the case for my decision on a stipulated record or where both parties waive appearance at an oral hearing and submit the case on documentary evidence and written argument. 42 C.F.R. § 1005.6(b)(4) and (5). Further, no hearing is necessary where all issues may be resolved on a motion for summary judgment as authorized by 42 C.F.R. § 1005.4(b)(12). 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, Inc., DAB CR672 (2000); New Life Plus Center, DAB CR700 (2000). In this case, the parties agreed during the April 15, 2004 prehearing conference that this case should be decided on the written record and that there was no need for an oral hearing to receive testimony. Petitioner affirmed in his brief that there are no material facts in dispute, and this matter may be decided on the written submissions. ⁽¹⁾ P. Brief at 2. I conclude that no oral hearing is necessary for the taking of additional evidence, and I decide this case based on the evidence submitted by the parties and the briefs submitted.

1. There is a basis for the I.G.'s exclusion of Petitioner.

It is not disputed that Petitioner was convicted by the United States District Court, Eastern District of New York, of one count of health care fraud in violation of 18 U.S.C. § 287. On July 25, 2003, Petitioner was sentenced to 18 months incarceration followed by three years of supervised release, to pay restitution of $1.4 million, and to pay miscellaneous costs. P. Ex. 1; I.G. Ex. 3. Petitioner concedes that, based on his conviction, he is subject to exclusion from participation in Medicare, Medicaid and all federal health care programs for a minimum period of five years. P. Brief at 3. I conclude based on my review of the evidence that Petitioner was convicted within the meaning of section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)) and that the offense of which he was convicted was 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. Exclusion for a minimum period of five years is mandated by the Act, and extension of the period of exclusion by 15 years is not unreasonable in this case.

As already noted, Petitioner does not contest that he is subject to exclusion. Petitioner does not dispute that the minimum period of his mandatory exclusion is five years pursuant to the Act. Petitioner also does not dispute that there are four aggravating factors as alleged by the I.G. Petitioner argues, however, that the I.G. inappropriately weighed the aggravating factors to extend Petitioner's period of exclusion from five to 20 years. Petitioner contends that the imposition of a 20-year period of exclusion is punitive, that Petitioner presents no "threat to Federally funded programs and that the imposition of the mandatory 5 year period of exclusion will satisfy the remedial purpose of the Act." P. Brief at 3. I disagree.

(a) The aggravating factors.

The I.G. advised Petitioner in his notice of January 30, 2004 that he was being excluded for the minimum statutorily required period of five years plus an additional 15 years based on his conviction and the I.G.'s finding of the following four aggravating factors:

�The acts for which Petitioner was convicted resulted in financial loss to a government program or one or more entities of $5,000 or more. 42 C.F.R. § 1001.102(b)(1).

�Petitioner engaged in fraudulent acts over a period of one year or more. 42 C.F.R. § 1001.102(b)(2).

�Petitioner was sentenced to incarceration. 42 C.F.R. § 1001.102(b)(5).

�Petitioner's license to practice medicine in the State of New York was suspended based upon his conviction by the U.S. District Court. 42 C.F.R. § 1001.102(b)(9).

I.G. Ex. 1.

The I.G. cites as evidence supporting the first aggravating factor that Petitioner was ordered to pay restitution to various entities, including the Medicare program, totaling $1.4 million. P. Ex. 1, at 4-5; I.G. Ex. 3, at 4-5; I.G. Brief at 7; and I.G. Reply at 3-5. Petitioner does not dispute that he agreed as part of his plea bargain to pay restitution of $1.4 million. Rather, Petitioner points out that he agreed to make restitution as part of his plea bargain without requiring the United States to prove the exact amount of money Petitioner received by his criminal conduct. Petitioner represents that the $1.4 million represents the total amount of all bills submitted and "not the amount of double payments received" by Petitioner. P. Brief at 11 (emphasis in original). Petitioner points to no evidence to support his argument. Further, Petitioner cannot collaterally attack his underlying criminal conviction before me. 42 C.F.R. § 1001.2007(d). Even if I accept Petitioner's representation as true and draw all reasonable inferences from that representation in his favor, Petitioner does not deny that the loss to the government exceeded $5,000, the threshold established for the aggravating factor by the regulation. 42 C.F.R. § 1001.102(b)(1). Thus, I conclude that the aggravating factor has been established by the I.G.

Petitioner concedes that his criminal conduct occurred over a period in excess of one year. P. Brief at 10. Thus, I conclude that the second aggravating factor cited by the I.G. under 42 C.F.R. § 1001.102(b)(2) is present.

Petitioner agrees that he was sentenced to 18 months incarceration. Petitioner argues, however, that Judge Platt, who imposed that sentence, indicated on the record that he "'wholly disagreed' with the sentence that he was compelled to hand down under the Federal Sentencing Guidelines." P. Brief at 8, citing P. Ex. 6, at 17-21. My review of Judge Platt's comments during sentencing reveals that he is not pleased that Congress has fettered his discretion via the federal sentencing guidelines. He acknowledged, however, that he had some discretion to grant a downward departure from the guidelines for extraordinary circumstances, but he was unwilling to find such circumstances in Petitioner 's case. P. Ex. 6, at 18-20. Furthermore, Judge Platt never indicated for the record that he would have elected to impose no incarceration if he had the discretion to do so. The aggravating factor recognized by 42 C.F.R. § 1001.102(b)(5) is that incarceration was imposed, and that is clearly established in this case. ⁽²⁾

The fourth aggravating factor cited by the I.G. is under 42 C.F.R. § 1001.102(b)(9). The I.G. incorrectly states in its opening brief that Petitioner's license to practice medicine in New York was revoked due to his criminal conviction. I.G. Brief at 8-9. In fact, as noted by Petitioner in his brief, his New York license was suspended for three years followed by a five-year probationary period and a $20,000 fine, but not revoked. P. Brief at 7; P. Ex. 4; and I.G. Ex. 4. The aggravating factor only requires adverse action by federal, state, or local agency, and Petitioner does not deny that suspension qualifies as the requisite adverse action.

Accordingly, I conclude that the I.G. has established that there are four aggravating factors present in this case as alleged.

(b) Reasonable period of exclusion.

My review of the aggravating factors leads to the conclusion that all four of the aggravating factors alleged by the I.G. have been established by the preponderance of the evidence. Petitioner does not argue that any of the mitigating factors which may be considered pursuant to 42 C.F.R. § 1001.102(c) are present. Rather, Petitioner argues that the I.G. did not properly weigh the aggravating factors when deciding the number of years by which to extend Petitioner's exclusion. Petitioner asserts that because the I.G. did not properly weigh the aggravating factors, the period of exclusion imposed in this case is punitive and not remedial. Petitioner asserts that the I.G. should have concluded after properly weighing the aggravating factors that the remedial purpose of the Act would be satisfied by a five-year exclusion. Petitioner argues that I should consider, and the I.G. should have considered, the following factors to conclude that while the four cited aggravating factors are present, the five-year minimum period of exclusion was appropriate:

�Petitioner entered a plea agreement waiving his constitutional rights and relieving the government of the burden to prove his misconduct and such matters as the actual amount of loss.

�The United States Attorney did not oppose Petitioner's first request for a downward departure of the sentencing guidelines, even though the request was not made pursuant to Petitioner's plea bargain, and the request was granted. P. Ex. 6, at 7.

�Judge Platt indicated by his comments about the federal sentencing guidelines that he might have imposed confinement of less than 18 months.

�Judge Platt stayed execution of the period of incarceration pending Petitioner's appeals.

�Petitioner has letters from many individuals attesting to his dedication, integrity, skill, and generosity. P. Ex. 5.

�In other cases, the I.G. has not imposed such a lengthy period of exclusion, even though the facts were more egregious in those cases.

�Petitioner's New York license was suspended pursuant to a consent agreement and not revoked.

�Petitioner's plea bargain in the federal district court, his willingness to make restitution, and his consent agreement with the New York licensing authority show he has accepted responsibility for his offenses and that he is now a trustworthy individual.

The Departmental Appeals 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 Joan Fletcher Cash, DAB No. 1725 (www.hhs.gov/dab/decisions/dab1725.html) (2000), n.6 (n.9 in the original decision and West Law�), 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 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. In John (Juan) Urquijo, DAB No. 1735 (2000), the DAB made clear 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. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), an appellate panel of the DAB suggests that when it is found that an aggravating factor considered by the I.G. is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate. The Katz panel did not elaborate upon the weight to be given individual aggravating factors, or how my de novo review and assessment of the weight to be given to proven aggravating factors is related to the weight the I.G. assigned those same factors.

Pursuant to the Act and the regulation, where there is a basis for a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion for a minimum period of five years. Act, section 1128(c)(3)(B); 42 C.F.R. § 1001.102(a). 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 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 that may be imposed 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).

In this case, I consider the aggravating factors: (1) that financial loss to the government and other entities ranged from $5,000 to the restitution amount of $1.4 million; (2) that Petitioner's fraudulent acts occurred for more than a year; (3) that Petitioner was sentenced to incarceration; and (4) that Petitioner's license to practice medicine was suspended by the State of New York based on his conviction. It is not for me to review the I.G.'s exercise of discretion and I am not to substitute my judgment for the I.G.'s simply because I disagree with the I.G.'s assessment of the case. However, I find no authority for the proposition that my discretion is limited by the I.G.'s findings regarding the proper period of exclusion, but, rather, I conclude that I have the independent duty to do a de novo review of the facts and determination of the proper period of exclusion and may consider the additional factors cited by Petitioner in his brief. Jeremy Robinson, DAB No. 1905 (2004).

Based on the factors I have articulated, I find that it is simply not unreasonable for Petitioner to be excluded from participation in Medicare, Medicaid, and all federal health care programs for the statutory minimum of five years plus an additional 15 years based on the four aggravating factors I have found and the additional matters Petitioner urges me to consider. Regarding the other cases cited by Petitioner involving lesser periods of exclusion, I note that I do not have before me the record considered by the ALJs in those cases and it is not for me to review their exercise of discretion in any case. Regarding Petitioner's concern that his exclusion is punitive and does not serve a remedial purpose of the Act, I note that one accepted remedial purpose is deterrence, not just of Petitioner, but of others who may be so inclined. As a panel of the Board stated in Jeremy Robinson:

The exclusion remedy serves twin congressional purposes: the protection of federal funds and program beneficiaries from untrustworthy individuals and the deterrence of health care fraud. S. Rep. No. 109, 100^th Cong., 1^st Sess. (1987), reprinted in 1987 U.S.C.C.A.N. 682, 686 ('clear and strong deterrent'); Joann Fletcher Cash, DAB No. 1725, at 18, 15 (2000) (discussing trustworthiness and deterrence). When Congress added section 1128(a)(3) in 1996, it again focused upon the desired deterrent effect: 'greater deterrence was needed to protect the Medicare program from providers who have been convicted of health care fraud felonies . . . .' H.R. Rep. 496(I), 104^th Cong., 2^nd Sess. (1996), reprinted in 1996 U.S.C.C.A.N. 1865, 1886.

Id. at 3-4. I conclude that the remedial purpose of deterrence will be served by Petitioner's 20-year exclusion. I note that the amount of restitution agreed to is roughly 280 times the threshold amount to consider loss to the government aggravating. I also note that Petitioner agreed to make restitution to 42 entities listed in his sentencing documents, all of which were allegedly impacted by his fraudulent activity. P. Ex. 4, at 4-5.

Section 1001.2002 of 42 C.F.R. states that a period of exclusion begins to run 20 days after the date of the I.G.'s exclusion letter. The I.G.'s notice was dated January 30, 2004, and the twentieth day thereafter was February 19, 2004, the effective date of Petitioner's exclusion.

IV. CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all federal health care programs for a period of 20 years effective February 19, 2004.

Keith W. Sickendick

Administrative Law Judge

1. Because the parties waived oral hearing and I accepted that waiver, it is not necessary for me to conclude that there are no material issues of fact in dispute, the summary judgment standard. Rather, I could resolve any factual disputes based on the evidence before me. However, in this case there are no material issues of fact in dispute and I would find summary judgment appropriate even absent waiver of oral hearing.

2. Petitioner states that he has appealed his sentence. P. Brief at 8, n.2. However, the pendency of an appeal has no impact upon an exclusion case such as this. If Petitioner obtains relief on appeal of his criminal conviction, then that may be addressed by a request for reinstatement to the I. G. pursuant to 42 C.F.R. § 1001.3005.