SUBJECT:

Robert J. Herbst,

Petitioner,

The Inspector General.

DECISION

I sustain the Inspector General's (I.G.) determination to exclude Robert J. Herbst, D.P.M., Petitioner, from participation in Medicare, Medicaid, and all federal health care programs for a period of 12 years. I find that the I.G. is authorized to exclude Petitioner under section 1128(a)(1) of the Social Security Act (Act), and that the 12-year exclusion falls within a reasonable range.

I. BACKGROUND

By letter dated December 31, 2003, the I.G. notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of 12 years. I.G. Exhibit (Ex.) 1. In that letter the I.G. explained that he is authorized to exclude Petitioner under section 1128(a)(1) of the Act based on his conviction in the United States District Court for the District of Ohio of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs.

Petitioner thereafter requested a hearing. I held a prehearing conference on May 4, 2004, during which Petitioner, through counsel, conceded the appropriateness of exclusion, but challenged the length of the exclusion beyond five years. Order and Schedule for Filing Briefs and Documentary Evidence (May 6, 2004). Both parties have submitted briefs, accompanied by documentary evidence. The I.G. filed eight exhibits (I.G. Exs. 1 - 8) as part of his submission, and Petitioner filed four exhibits (Petitioner (P). Exs. 1 - 4). In the absence of objection, I receive into evidence I.G. Exs. 1 - 5 and P. Exs. 1 - 4. The I.G. also submitted a reply brief.

The basic facts of this case are not in dispute. P. Brief at 1. Petitioner was a podiatrist, licensed in the State of Ohio. I.G. Ex. 3, at 1. He pled guilty to two counts of Making False Statements Relating to Health Care Fraud Matters, in violation 18 U.S.C. �� 1035 and 2, and the Court imposed its judgment against him on June 19, 2003. I.G. Ex. 6. Specifically, Petitioner admitted that between February 1998 and June 6, 2001, he devised and engaged in a scheme to bill government health care programs for podiatric services that were never provided. I.G. Ex. 5. He was sentenced to six months home confinement, to be served as part of a three year probation, ordered to pay a $2,000 fine, and $63,002.12 in restitution ($42,946.72 payable to the Medicare program, and $20,055.40 payable to the state Medicaid program). I.G. Ex. 6. ⁽¹⁾ He agreed to surrender permanently his Ohio podiatrist license, and promised not to reapply for a license at any time, nor to hold any interest or have any duties associated with the practice of podiatry in the State of Ohio. I.G. Ex. 4, at 5 - 6. In a document dated June 25, 2003, he surrendered his license, and, on August 13, 2003, the State Medical Board of Ohio issued an order revoking his license to practice podiatric medicine. I.G. Exs. 7, 8.

II. ISSUE

Petitioner concedes that he was convicted of a criminal offense related to the delivery of an item or service under the Medicare/Medicaid programs, and acknowledges the mandatory imposition of a five-year exclusion. P. Brief at 1. The sole issue before me is whether the length of the exclusion in excess of the five-year mandatory minimum is reasonable. 42 C.F.R. � 1001.2007.

III. DISCUSSION

Section 1128(a)(1) requires that the Secretary of Health and Human Services (Secretary) exclude an individual who has been convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or a state health care program. ⁽²⁾ 42 C.F.R. � 1001.101. Individuals excluded under section 1128(a)(1) of the Act must be excluded for a period of not less than five years. Act, section 1128(c)(3)(B).

The Secretary has delegated to the I.G. the authority to impose exclusions. 42 C.F.R. � 1001.401(a). So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725, at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992).

1. The 12-year exclusion falls within a reasonable range. 42 C.F.R. � 1001.102(b)(2). ⁽³⁾

a. Aggravating factors justify lengthening the period of exclusion beyond the five-year mandatory minimum.

By regulation, the Secretary established the criteria for determining the length of exclusions imposed pursuant to section 1128 of the Act. 42 C.F.R. � 1001.102. Evidence that does not pertain to one of the aggravating or mitigating factors specified in the regulation is not relevant and may not be used to decide whether an exclusion of a particular length is reasonable.

The following factors, among others, may serve as bases for lengthening the period of exclusion: (1) the acts resulting in the conviction, or similar acts, resulted in a financial loss to Medicare and the state health care programs of $5,000 or more; (2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; (3) the sentence imposed by the court included incarceration; and (4) the convicted individual or entity has been the subject of any other adverse action by any federal, state or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion. 42 C.F.R. � 1001.102(b). The presence of an aggravating factor or factors not offset by any mitigating factor or factors justifies lengthening the mandatory five-year period of exclusion.

Here, the I.G. cited four factors as bases for extending the period of Petitioner's exclusion beyond the mandatory five-year minimum: (1) Petitioner's actions resulted in a program financial loss in excess of $5,000; (2) his actions were committed over a period of more than one year; (3) the sentence imposed by the court included incarceration; and (4) based on the circumstances that serve as the basis for imposing this exclusion, a state agency took an action adverse to Petitioner.

Petitioner does not challenge the existence of any of these factors. His crimes resulted in a program financial loss well in excess of $5,000. The sentencing court found that the amount of loss to the program totaled $63,002.12, and ordered Petitioner to pay that amount in restitution. I.G. Ex. 6, at 4. The acts that resulted in his conviction occurred over a period of more than three years - from about February 1998 until June 2001 - well over the one year required for aggravation. I.G. Ex. 6. Nor does Petitioner dispute the I.G.'s contention that the sentence imposed by the court included incarceration, as that term is defined in the regulations, 42 C.F.R. � 1001.2 ("Incarceration means imprisonment or any type of confinement with or without supervised release, including, but not limited to, community confinement, house arrest and home detention.") P. Brief at 2. Nor does he dispute that on August 13, 1993, the State Medical Board ordered his medical license revoked, an adverse action "based on the same set of circumstances that serves as the basis for the imposition of the exclusion." Id.

Petitioner knowingly and intentionally engaged in illegal conduct for more than three years. He stole a lot of money from the Medicare and Medicaid programs, more than 12 times an amount sufficient to justify increasing the mandatory minimum period of exclusion. The sentencing judge found Petitioner's conduct serious enough to require some form of incarceration. Based on these factors, I am unable to find a 12-year exclusion outside the reasonable range. I next consider whether any mitigating factors justify reducing the 12-year exclusion.

b. No mitigating factors offset the aggravating factors.

Although Petitioner does not challenge the presence of these aggravating factors, he argues that three additional factors auger in favor of a reduced period of exclusion: (1) his level of cooperation with authorities; (2) the community's need for caring doctors like himself; and (3) he has been adequately punished.

The regulations consider mitigating just three factors: (1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $1,500; (2) the record demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and (3) a petitioner's cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed. 42 C.F.R. � 1001.102(c). Characterizing the mitigating factor as "in the nature of an affirmative defense," the Board has ruled that a petitioner has the burden of proving any mitigating factor by a preponderance of the evidence. Barry D. Garfinkel, M.D., DAB No. 1572, at 8 (1996).

Obviously, because Petitioner's conviction involved financial losses to the program significantly greater than $1,500, the first factor does not apply here. Nor does Petitioner claim that a medical condition reduced his culpability. With respect to his cooperation with officials, he offers no evidence that his actions resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed, as required by the regulations. In fact, he concedes that he is "unaware as to whether his cooperation with authorities has lead (sic) to any new investigations or arrests." P. Brief at 3. I may not, therefore, consider this a mitigating factor.

The final two factors Petitioner raises - community need for his services and the adequacy of his punishment - are not considered mitigating under the regulation, and therefore cannot be applied to offset the impact of the aggravating factors. ⁽⁴⁾ Since this case presents none of the three mitigating factors set forth in the regulation, I find that no mitigating factors justify reducing the period of exclusion.

IV. CONCLUSION

Based on the aggravating factors, and in the absence of any mitigating factors, I am unable to find unreasonable a 12-year exclusion. The length of time over which Petitioner's criminal conduct occurred, as well as the amount of restitution, suggest significant risk to program integrity. I therefore conclude that the I.G. was authorized, under section 1128(a)(1), to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs. Considering the totality of the evidence, I find the 12-year exclusion within a reasonable range.

Carolyn Cozad Hughes

Administrative Law Judge

1. Some minor discrepancies appear among the Amended Plea Agreement (I.G. Ex. 4), the Information (I.G. Ex. 5), and Judgment (I.G. Ex. 6), as to the exact duration of the criminal activity and the financial loss to the government programs, but these discrepancies are not significant and do not affect the reasonableness of the length of the exclusion.

2. The term "state health care program" includes a state's Medicaid program. Act, section 1128(h)(1); 42 U.S.C. � 1320a-7(h)(1).

3. I make findings of fact and conclusions of law to support my decision in this case. I set forth each finding, in italics, as a separate hearing.

4. While his exclusion undoubtedly adversely affects Petitioner, its purpose is remedial and protective, not punitive. Narendra M. Patel, M.D., DAB No. 1736, at 11 (2000).