Date: January 11, 1999
In the Case of:
Arie Oren, M.D.,
Petitioner,
- v. -
The Inspector General.
Docket No. C-98-246
Decision No. CR564
Petitioner requested a hearing on a December 18, 1996 determination by the Inspector General (I.G.) to exclude him from participation in the Medicare, Medicaid, Maternal and Child Health Services Block Grant and Block Grants to States for Social Services programs(1) for a period of 10 years pursuant to section 1128(b)(1) of the Social Security Act (Act). On August 28, 1997, I issued a decision in which I affirmed the I.G.'s determination to exclude Petitioner from participation in Medicare and Medicaid for a period of 10 years. Arie Oren, M.D., DAB CR490 (1997). I found that the I.G. had the authority to exclude Petitioner under section 1128(b)(1) of the Act because the undisputed material facts established that he was convicted under federal law, in connection with the delivery of a health care item or service, of criminal offenses relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. In addition, I found that the I.G. had proved the presence of three aggravating factors that established Petitioner to be untrustworthy to provide care to beneficiaries and recipients of federally funded health care programs. I further found that Petitioner did not prove the presence of any mitigating factor. Accordingly, I concluded that the 10-year exclusion imposed by the I.G. was reasonable.
Petitioner appealed my decision to an appellate panel of the Departmental Appeals Board (DAB). On appeal, Petitioner argued, inter alia, that the mitigating factor as defined in 42 C.F.R. � 1001.201(b)(3)(iii)(A) existed in his case which justified a reduction in the length of the exclusion, namely, that his "cooperation with Federal or State officials resulted in . . . [o]thers being convicted . . . ." In support of this argument, Petitioner furnished evidence which had not been in the record before me at the time that I issued my August 28, 1997 decision. This new evidence included a copy of the sen10cing transcript in which the Assistant United States Attorney made statements about Petitioner's cooperation with the government. In addition, Petitioner alleged that he persuaded one of his co-defendants, Victor Tsan, to plead guilty, and he submitted the first page of that guilty plea agreement. Petitioner took the position that he had received ineffective counsel in the proceedings before me and that this constituted reasonable grounds for his earlier failure to provide this evidence.
On March 4, 1998, the appellate panel issued its decision. Arie Oren, M.D., DAB No. 1650 (1998). The appellate panel stated that under 42 C.F.R. � 1005.21(f), it is authorized to remand a case to the administrative law judge (ALJ) to consider evidence not presented at the hearing before the ALJ if a party demonstrates that the additional evidence is "relevant and material" and that "there were reasonable grounds for the failure to adduce such evidence" at the hearing before the ALJ.
The appellate panel concluded that the new evidence furnished on appeal to support Petitioner's con10tion that his cooperation with government officials resulted in others being convicted was relevant and material. In addition, the appellate panel concluded that there were reasonable grounds for Petitioner's failure to furnish the new evidence in the earlier proceedings before me. Based on this, the appellate panel admitted the sen10cing transcript and the first page of the guilty plea agreement into the record and remanded the case to me to consider this new evidence. The appellate panel instructed me to determine, based on the new evidence, whether the mitigating factor as defined at 42 C.F.R. � 1001.201(b)(3)(iii)(A) exists and, if so, whether a reduction in the 10-year exclusion is warranted. In addition, the appellate panel pointed out that 42 C.F.R. � 1005.21(f) does not authorize it to remand a case to an ALJ to admit new evidence, but rather this regulation authorizes it to remand a case to an ALJ to consider new evidence which the appellate panel had admitted into evidence on appeal.
For purposes of identification, I have numbered the sen10cing transcript and the first page of Victor Tsan's guilty plea as P. Ex. 14 and P. Ex. 15, respectively. In order to implement the appellate panel's decision, I established a briefing schedule to provide the parties the opportunity to express their arguments on the issues before me on remand. I did not invite the parties to submit evidence in addition to the two documents which had been admitted into evidence by the appellate panel.
Notwithstanding this, Petitioner submitted additional proposed documentary evidence not previously of record with his brief, consisting of pages 2 - 5 of Victor Tsan's guilty plea agreement and a guilty plea agreement of an individual named Alexander Zaverukha. In view of the appellate panel's view that 42 C.F.R. � 1005.21(f) does not authorize an ALJ to admit new evidence, I find that I am prohibited from admitting this new evidence into the record on remand. Moreover, even if I had admitted these documents into evidence, I would not rely on them in reaching my decision. Petitioner's brief does not discuss how these additional documents support Petitioner's case, and I do not see anything in them which would affect the outcome of this case. Petitioner submitted also the first page of an indictment against various individuals including Petitioner, Victor Tsan, and Alexander Zaverukha. Upon reviewing this document, I note that it is already contained in the record as the first page of P. Ex. 1. The I.G. submitted a response brief, and Petitioner declined to file a reply brief.
I have considered the issues before me on remand based on the entire record before me, and I conclude that the evidence establishes that the mitigating factor as defined in 42 C.F.R. � 1001.201(b)(3)(iii)(A) exists in this case. In addition, I find that the 10-year exclusion imposed by the I.G. is unreasonable, and I modify the exclusion to a term of seven years.
My August 28, 1997 decision was based on 22 FFCLs set forth at pages 3 - 6 of the decision. On appeal, Petitioner took exception to FFCL 16, FFCL 20, FFCL 21, and FFCL 22. Since Petitioner did not take exception to the remaining FFCLs, the appellate panel affirmed them without further discussion. Upon considering the parties' arguments pertaining to the FFCLs to which Petitioner excepted, the appellate panel affirmed FFCL 16 and FFCL 21. Accordingly, based on the appellate panel's affirmance of these FFCLs, I incorporate FFCLs 1 - 19 and FFCL 21 into this decision. The appellate panel remanded the case to me to determine whether FFCLs 20 and 22 were correct in light of the new evidence admitted by the appellate panel.
On remand, I amend FFCL 20 to read:
20. Petitioner has proved that the mitigating factor specified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) (his cooperation with federal or State officials resulted in others being convicted) is present in this case.
I amend FFCL 22 to read:
22. In weighing Petitioner's threat to program beneficiaries and recipients arising from the three aggravating factors present in this case and the impact of the mitigating factor present in this case, the evidence establishes that a 10-year exclusion of Petitioner is excessive.
In addition, I add one additional FFCL, numbered 23, as follows:
23. The remedial considerations of the Act will be served in this case by modifying the exclusion to a term of seven years.
I. Background
The undisputed facts establish that at all times relevant to this case, Petitioner was a licensed medical doctor who practiced medicine in the State of Pennsylvania. On March 8, 1996, Petitioner was convicted in the United States District Court for the Eastern District of Pennsylvania of the offenses of racketeering and criminal forfeiture under federal law. These offenses related to a scheme by Petitioner and his co-defendants whereby they staged automobile accidents and reported these accidents to various insurance companies, including health insurers, to collect fees for services that were either not needed or never provided. Petitioner's participation in the unlawful scheme to defraud insurance companies lasted from 1990 through the latter part of 1992. Petitioner's sen10ce for his crimes included a period of incarceration of 24 months. The sen10ce included also an order to pay restitution in the amount of $272,000.
On December 18, 1996, the I.G. advised Petitioner that he was being excluded from participating in Medicare and Medicaid for a period of 10 years. The I.G. advised Petitioner that he was being excluded pursuant to the provisions of section 1128(b)(1) of the Act.
The version of section 1128(b)(1) of the Act under which Petitioner was excluded authorized the Secretary of the United States Department of Health and Human Services (the Secretary), or her delegate, the I.G., to exclude any individual or entity who has been convicted:
under federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a program operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
This version of section 1128(b)(1) did not state a minimum period of exclusion for individuals or entities who are excluded pursuant to the section. Congress revised and amended section 1128 of the Act in July 1996. The revised and amended Act, which became effective in January 1997, now mandates at sections 1128(a)(3) and 1128(c)(3)(B) an exclusion for at least five years of any individual or entity that has been convicted of a felony as previously described under section 1128(b)(1). Neither the I.G. nor Petitioner argues that this case is covered by the revised and amended version of section 1128.
The Secretary has published regulations which establish the standards which are to be used to determine the length of an exclusion imposed pursuant to section 1128 of the Act. The regulatory criteria which govern exclusions imposed pursuant to the pre-1996 version of section 1128(b)(1) under which Petitioner was excluded are set forth at 42 C.F.R. � 1001.201.
The regulation at 42 C.F.R. � 1001.201 provides that an exclusion imposed pursuant to section 1128(b)(1) shall be for a period of three years, unless there exist certain factors identified as either aggravating or mitigating which would serve as a basis to lengthen or shor10 the exclusion period. 42 C.F.R. � 1001.201(b)(1). Factors which may be considered aggravating are identified at 42 C.F.R. � 1001.201(b)(2)(i)-(v). Factors which may be considered as mitigating are identified at 42 C.F.R. � 1001.201(b)(3)(i)-(iii).
Petitioner requested a hearing on the I.G.'s exclusion determination, and in my August 28, 1997 decision, I found that Petitioner was convicted of a criminal offense within the meaning of section 1128(b)(1) of the Act, and that the I.G. is authorized to exclude him.
With regard to the issue of whether an exclusion for a period of 10 years is warranted, I found that the I.G. had proved the presence of the following three aggravating factors:
1) The acts resulting in Petitioner's conviction, or similar acts, resulted in financial loss of $1,500 or more to a government program or to one or more other entities. 42 C.F.R. � 1001.201(b)(2)(i). The financial losses to non-government entities caused by Petitioner's fraud approximated $272,000. I made this conclusion based on his sen10ce that he pay restitution for his crimes in the amount of $272,000.
2) The acts that resulted in Petitioner's conviction, or other similar acts, were committed by Petitioner over a period of one year or more. 42 C.F.R. � 1001.201(b)(2)(ii). Petitioner perpetrated his crimes from 1990 to the latter part of 1992.
3) Petitioner was sen10ced to a period of incarceration as punishment for his crimes. 42 C.F.R. � 1001.201(b)(2)(iv). Petitioner was sen10ced to incarceration for a term of 24 months.
I found that the evidence which relates to the aggravating factors proved by the I.G. establishes that Petitioner is a highly untrustworthy individual.
Furthermore, I found that Petitioner had the burden of proving the presence of a mitigating factor, which is in the nature of an affirmative defense. Although Petitioner con10ded that the mitigating factor specified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) was present in his case, I found that the evidence before me did not support this con10tion.
The mitigating factor at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is defined in relevant part as follows: the individual's "cooperation with [f]ederal or State officials resulted in . . . [o]thers being convicted . . . ." In support of his con10tion that this mitigating factor was present, Petitioner submitted his plea agreement which contained a provision requiring him to cooperate with the government by agreeing to provide truthful information and testimony. Petitioner pointed out that the applicable sen10cing guidelines specify that he be sen10ced to a term of incarceration in the range of 33 to 41 months. He argued that as a result of his cooperation, he was sen10ced to incarceration for a period of only 24 months.
I found that in order to establish the exis10ce of the mitigating factor at 42 C.F.R. � 1001.201(b)(3)(iii)(A), Petitioner must prove: (1) that he cooperated with officials and (2) that his cooperation resulted in the conviction of another individual or individuals. Based on the evidence before me, I determined that, at most, it showed that Petitioner cooperated with prosecuting authorities and that they considered his cooperation to be valuable, but that it did not show that Petitioner's cooperation led to the conviction of others. In the absence of any evidence showing that others were convicted as a result of his cooperation, Petitioner failed to prove the presence of this mitigating factor.
On appeal before the appellate panel, Petitioner did not dispute that the record before me at the time that I issued my August 28, 1997 decision did not support a finding that this mitigating
factor existed. Instead, Petitioner submitted new evidence to support the exis10ce of this mitigating factor.
The appellate panel found that the newly submitted evidence is relevant and material and that there were reasonable grounds for Petitioner's failure to adduce this evidence in the proceedings before me. Pursuant to 42 C.F.R. � 1005.21(f), the appellate panel admitted the evidence into the record, and remanded the case to me to consider it. The appellate panel instructed me to determine first whether this new evidence establishes that Petitioner's cooperation resulted in the conviction of others within the meaning of 42 C.F.R. � 1001.201(b)(3)(iii)(A). In addition, if I determine that this evidence establishes that the mitigating factor at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is present, the appellate panel instructed me to determine whether a reduction in the 10-year exclusion is warranted.
II. Evaluation of Evidence
A. Whether the mitigating factor identified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is present in this case
On appeal, the appellate panel admitted a copy of the sen10cing transcript. In his brief on remand, Petitioner quoted the following portion of the transcript to support his con10tion that the mitigating factor identified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is present in this case:
THE COURT: I understand there is a motion to depart from the sen10cing guideline range.
MR. COSTELLO: That's correct, Your Honor.
MR. COSTELLO: The basis for that motion is, Your Honor, that the defendant appears before Your Honor having been convicted of RICO or pled guilty to two separate RICO offenses. In one of the cases, the one that was before Judge Padova-excuse me-Judge Bartle, he cooperated to the ex10t in that case alone to earn such a motion. He provided information regarding that case. He testified at a trial arising out of that case at which other co-defendants were convicted and provided other information that the Government considered helpful.
In the case that was brought before Your Honor the defendant attempted to cooperate. His cooperation did not quite reach that level. There's also a third investigation that is continuing that is being conducted by the United States Attorney's Office in Pittsburgh. The defendant has provided assistance in that investigation. The Government expects that assistance to continue and has consisted of providing information. He's offered to testify at any grand jury proceedings or any trials that would be necessary. He has agreed to contact other individuals involved and try to convince them to cooperate as well. So for those reasons, Your Honor, the Government considers Dr. Oren's assistance to be substantial and has moved to allow the Court to depart from the guideline range that has just been agreed upon.
THE COURT: All right. The Court grants the motion. You may speak on behalf of your client, Mr. Carroll.
P. Ex. 14 at pages 8-9 (bold and underlining added by Petitioner in his brief and reproduced here).
I find that the sen10cing transcript contains language which establishes the exis10ce of the mitigating factor at issue in this case. In support of his motion to depart from the sen10cing guideline range, the Assistant United States Attorney stated that Petitioner testified at a trial in which other co-defendants were convicted. I find that this statement of the Assistant United States Attorney is sufficient to meet Petitioner's burden of proving that he cooperated with government officials and that his cooperation resulted in the conviction of others.
In her brief before me on remand, the I.G. does not dispute that the sen10cing transcript establishes the presence of the mitigating factor identified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) in this case. However, the appellate panel noted in its decision that on appeal, the I.G. had argued that the sen10cing transcript establishes only that Petitioner testified in a trial after which some individuals were convicted, not that his testimony "led to," i.e., resulted in, the convictions. In response to this argument, the appellate panel pointed out that it would be difficult, if not impossible, to establish precisely what testimony the judge found dispositive. In view of this, I find that evidence showing that Petitioner testified at a trial in which some co-defendants were convicted is sufficient to establish that Petitioner's cooperation resulted in the conviction of others within the meaning of 42 C.F.R. � 1001.201(b)(3)(iii)(A).
Also admitted into evidence by the appellate panel is the first page of the guilty plea agreement of Victor Tsan, a co-defendant with Petitioner. Petitioner alleges that he persuaded this co-defendant to plead guilty. According to Petitioner, this is additional evidence that the mitigating factor identified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is present in this case.
The I.G. takes the position that this evidence is insufficient to establish the exis10ce of a mitigating factor in this case. I agree with the I.G. On its face, the first page of Victor Tsan's guilty plea agreement merely shows that this co-defendant agreed to plead guilty to certain criminal offenses. It does not corroborate Petitioner's statements that Petitioner was instrumental in persuading Victor Tsan into entering into this plea agreement. While the sen10cing transcript states that Petitioner had agreed with government officials to contact other individuals involved in the criminal scheme and try to convince them to cooperate, the sen10cing transcript does not state that Petitioner actually did try to convince others to cooperate or that his efforts to convince others to cooperate resulted in the conviction of Victor Tsan or others. Accordingly, I find that the evidence of record does not corroborate Petitioner's claim that he persuaded Victor Tsan to plead guilty.
Based on the foregoing, I find that Petitioner has met his burden of proving that he cooperated with government officials and that his cooperation qualified as a mitigating factor under 42 C.F.R. � 1001.201(b)(3)(iii)(A). In reaching this conclusion, I rely on the language in the sen10cing transcript stating that Petitioner
testified at a trial at which other co-defendants were convicted. I do not rely on Petitioner's unsubstantiated statement that he persuaded Victor Tsan to plead guilty and I do not rely on the first page of Victor Tsan's plea agreement.
B. Whether a reduction in the 10-year exclusion is warranted due to the presence of a mitigating factor in this case
Having concluded that the mitigating factor identified at 42 C.F.R. � 1001.201(b)(3)(iii)(A) is present in this case, I will now consider the effect this mitigating factor has on the finding that I made in my August 28, 1997 decision that the 10-year exclusion imposed by the I.G. was reasonable. In its decision remanding this case to me, the appellate panel stated that the proper standard for deciding this issue is "whether the 10-year exclusion falls within a reasonable range of possible exclusion periods under the circumstances of this case, not whether the 10-year exclusion was reasonable." In support of this assertion, the appellate panel cited the following three appellate decisions: Gerald A. Snider, DAB No. 1637 (1997); Frank A. DeLia, D.O., DAB No. 1620 (1997); and Barry D. Garfinkel, M.D., DAB No. 1572 (1996).
In the recent and well-reasoned decision of Howard Schreibstein, D.P.M., DAB CR517 (1998), the ALJ discussed the authority and duties of the ALJ in applying the "reasonable range" standard articulated in Snider, DeLia, and Garfinkel. The ALJ points out that on its face, the statement that an exclusion should be upheld if it falls within a "reasonable range" of exclusions does not depart from the standard that has historically been employed to decide whether an exclusion is unreasonable. An I.G. exclusion determination that differs to an inconsequential degree from an independent decision by an ALJ as to what is reasonable may be said to fall within a "reasonable range" of exclusions. The "reasonable range" test could simply be a way of saying that the ALJ should affirm the I.G.'s determination where only slight differences exist as to what is reasonable between the I.G.'s determination and the ALJ's independent decision that is based on a de novo hearing. Saying that an exclusion must be upheld if it falls within a "reasonable range" of exclusions does not automatically preclude the ALJ from holding a de novo hearing and deciding independently whether an exclusion falls within the "reasonable range" of possible exclusions.
However, as Schreibstein points out, a close reading of the appellate panels' decisions in Snider, DeLia, and Garfinkel suggests the possibility that the appellate panels meant to redefine the nature of the administrative hearing in a manner that is contrary to long-settled precedent concerning the scope of hearings under section 205(b) of the Act. The appellate panels in Snider, DeLia, and Garfinkel appear to have rejected the requirement that a hearing be de novo. Additionally, they appear to have found that the ALJ must defer to the experience and acumen of the I.G. in deciding whether an exclusion is reasonable. In effect, they appear to have held that the I.G.'s exclusion determination is presumptively correct and that the purpose of the hearing is merely to review the I.G.'s determination to assure that the I.G. did not abuse her discretion in imposing an exclusion. If the standard apparently enunciated in Snider, DeLia, and Garfinkel is followed, the administrative hearing becomes something in the nature of an appellate review in which the ALJ makes no independent decision as to whether an exclusion is reasonable.
Additionally, the standard which the appellate panels apparently adopted is unworkable because it is not adequately defined. As stated in Schreibstein:
[t]he appellate panels seem to have created a strong presumption that an I.G. exclusion determination is correct, if there exist factors which might arguably support the determination, without stating any mechanism by which that presumption should be tested. Clearly, it appears to be the appellate panels' in10t that the presumption may not be tested in a de novo hearing or by an independent administrative law judge decision. The absence of any mechanism by which the apparent presumption of correctness may be tested is a recipe for accepting an exclusion determination uncritically.
DAB CR517 at 22.
In Schreibstein, the ALJ elected to use alternative approaches to deciding whether the exclusion that the I.G. imposed is unreasonable. He stated that he elected to do this because "the apparent standard of adjudication that the [appellate] panels expressed in Garfinkel, DeLia, and Snider is unclear" and also because the "appellate panels may wish to reconsider the conclusions they reached in Garfinkel, DeLia, and Snider." DAB CR517 at 2. For the same reasons, I will use alternative approaches to deciding this case.
First, I will analyze the evidence as I have done so traditionally. My decision under this approach is based on the evidence of the entire record, including the evidence admitted by the appellate panel. Under this approach, I make my decision independently and I attach no presumption of correctness to the I.G.'s determination.
The I.G. excluded Petitioner for a period of 10 years. On August 28, 1997, I issued a decision in which I affirmed the I.G.'s determination. I found that the evidence as to aggravating factors showed Petitioner to be a highly untrustworthy individual. I concluded that Petitioner's lack of trustworthiness was established by his ongoing involvement in a massive scheme to defraud insurers. I found that his untrustworthiness was evidenced by the fact that he committed his crimes over a long period of time, that his crimes caused non-government entities to incur large losses, and that he was incarcerated for his crimes.
The evidence relating to aggravating factors is, when weighed in isolation, evidence that Petitioner is highly untrustworthy. I had no difficulty sustaining a 10-year exclusion when the evidence before me failed to establish the exis10ce of any mitigating factors which would offset the aggravating factors in this case. But, I now find that based on evidence admitted by the appellate panel, the evidence as to aggravating factors can no longer be considered in isolation. This new evidence establishes the exis10ce of a mitigating factor. Petitioner has proven that his cooperation with prosecuting officials led to the conviction of other individuals.
When all of the evidence is considered, it establishes that a 10-year exclusion of Petitioner is excessive. A 10-year exclusion fails to take into account Petitioner's efforts to be rehabilitated, as evidenced by the cooperation he gave to prosecuting authorities.
Petitioner urges that I modify the exclusion to a term of three years. I do not agree with Petitioner that the evidence of mitigation in this case is such strong proof that Petitioner is
so trustworthy that a modification to a three-year exclusion is reasonable. Petitioner's arguments place too much weight on the evidence which established the presence of a mitigating factor, and his arguments do not give adequate weight to the evidence which established the presence of aggravating factors. Although the evidence of mitigation negates the evidence relating to the aggravating factors to some ex10t, it is not sufficiently compelling to justify a reduction of the exclusion in this case to a period of only three years.
The I.G. argues that the exclusion in this case should not be significantly reduced because the cooperation provided by Petitioner in this case is significantly less than the cooperation provided by the petitioners in DeLia and Schreibstein. The criteria in the 42 C.F.R. Part 1001 regulations do not suggest that the reasonableness of the length of the exclusions ought to be measured on a comparative standard. Each case must be decided on its own particular facts. Notwithstanding this, it is instructive to see what length of exclusion has been imposed in similar cases.
The petitioners in DeLia and Schreibstein were involved in the same type of conspiracy as the one engaged in by Petitioner in this case. The identical three aggravating factors and the one mitigating factor that are established here were present in DeLia and Schreibstein. Furthermore, the evidence pertaining to aggravating factors in DeLia, Schreibstein, and this case are reasonably close. In all three cases, the losses caused by the criminal activities were in the hundreds of thousands of dollars, ranging from about $272,000 to about $400,000. In all three cases, involvement in the criminal scheme lasted over a period of years, ranging from more than two years to about four years. In all three cases, the sen10ces included incarceration for periods ranging from 10 months to 24 months.
All three cases established that the excluded providers' cooperation with prosecuting officials led to the conviction of others. However, the evidence concerning the amount of cooperation provided, and the circumstances under which the cooperation was provided, is far more impressive in both DeLia and Schreibstein than it is in this case. The evidence in both DeLia and Schreibstein showed that the petitioners in those cases went to extraordinary lengths to cooperate with government officials.
In both DeLia and Schreibstein, the petitioners cooperated for a lengthy period of time. The petitioner in DeLia cooperated for about four years and the petitioner in Schreibstein cooperated for nearly five years. In both cases, the cooperation of the petitioners was useful in obtaining convictions of numerous other individuals. In both cases, the petitioners cooperated in spite of substantial po10tial risk to their personal safety.
In contrast, the evidence pertaining to cooperation in this case does not establish that Petitioner immersed himself in an effort to help prosecuting officials to the same degree as the petitioners did in DeLia and Schreibstein. While the evidence in this case shows that the government considered Petitioner's cooperation to be "substantial," it does not establish that the Petitioner went to the same lengths to cooperate with officials as the petitioners in DeLia and Schreibstein.
In DeLia, the I.G. initially excluded the petitioner for a period of 10 years based on the presence of the aggravating factors. A few months later, the I.G. advised the petitioner that she was modifying the exclusion to a period of five years. The I.G.'s modification of the exclusion from 10 years to five years reflected the I.G.'s review of evidence, of which the I.G. had not previously been aware, pertaining to the extraordinary cooperation the petitioner had provided to prosecuting authorities. The appellate panel sustained the five-year exclusion of the petitioner in DeLia. In Schreibstein, the I.G. excluded the petitioner for 10 years. The ALJ modified the 10-year exclusion to a period of five years based on the evidence pertaining to the petitioner's extraordinary cooperation.
In this case, I find that the 10-year exclusion imposed by the I.G. is excessive because it failed to take into account the evidence of mitigation present in this case. A 10-year exclusion fails to credit Petitioner's efforts at rehabilitation, as is evidenced by the cooperation he gave to prosecuting authorities. However, the evidence before me fails to establish that Petitioner provided extraordinary cooperation. The evidence fails to establish that Petitioner cooperated over a period of years, that his cooperation resulted in a large number of convictions, or that he risked his personal safety to assist the government. Thus, while the evidence relating to the mitigating factor shows that Petitioner is less untrustworthy than the evidence relating to the aggravating factors suggests, the mitigating evidence is not sufficiently compelling to justify more than a three-year reduction of the term of the exclusion. I find that, under the circumstances of this case, a seven-year exclusion provides a reasonable safeguard to federally funded programs, beneficiaries, and recipients.
Moreover, even if I were to give Petitioner the benefit of the doubt, and conclude that Victor Tsan's guilty plea established the mitigating factor specified at 42 C.F.R. � 1001.201(b)(3)(iii)(A), this would not affect the outcome of this case. A showing that Petitioner's cooperation led to the conviction of one additional individual does not come close to the quantum of mitigating evidence necessary to modify the exclusion to a term of less than seven years.
Based on the evidence of cooperation established by the sen10cing transcript, I find that the 10-year exclusion which the I.G. imposed is unreasonable. It is unreasonable because it does not account adequately for the evidence of mitigation. My decision to modify the exclusion to seven years is consis10t with a conclusion that the 10-year exclusion does not fall within a "reasonable range" of exclusions, in the sense that there is a significant difference between what I find independently to be reasonable based on my de novo review of relevant evidence, and what the I.G. determined to be reasonable. In weighing Petitioner's threat to program beneficiaries and recipients arising from the three aggravating factors present in this case and the impact of the mitigating factor present in this case, I find that the remedial considerations of the Act will be served by modifying the exclusion to a term of seven years.
I will now do my best to apply the standard of review which appellate panels may want me to apply based on what they said in Garfinkel, DeLia, and Snider. I conclude that evidence of Petitioner's cooperation as shown in the sen10cing transcript which was admitted into the record by the appellate panel overcomes any presumption of reasonableness that attaches to the I.G.'s determination. This evidence of cooperation establishes that a 10-year exclusion is not within a "reasonable range" of exclusions.
There is no reason why, in this case, deference should be given to the I.G.'s exclusion determination. The procedural history of this case makes it clear that the I.G.'s determination did not involve a complete examination of the aggravating and mitigating factors that is contemplated by the regulations. The presumption that the exclusion imposed by the I.G. is reasonable is overcome here by the fact that relevant evidence relating to a mitigating factor was not considered by the I.G. at the time that it made its determination to impose a 10-year exclusion.
As pointed out in Schreibstein, a close reading of Garfinkel, DeLia, and Snider suggests the possibility that the appellate panels in10ded to redefine the entire nature of the administrative hearing. Appellate panels appeared to have declared in these cases that the ALJ should not conduct a de novo review of the I.G.'s determination and should not reach an independent decision as to what is reasonable. However, the appellate panels in Garfinkel, DeLia, and Snider did not address the situation where a petitioner might offer new evidence relevant to a mitigating factor.
As Schreibstein explains in detail, the proposition that the ALJ must defer to the I.G. in reviewing exclusion determinations is legally dubious. This proposition disintegrates completely in cases where a petitioner offers new evidence relevant to a mitigating factor which had not been considered by the I.G.
In this case, the appellate panel admitted evidence which was not considered by the I.G. at the time it made its determination and remanded the case to me for consideration of the newly admitted evidence. Notwithstanding what the appellate panels may have said in Garfinkel, DeLia, and Snider, this case illustrates the need for a de novo review of the evidence and an independent decision by the ALJ charged with the responsibility to consider this new evidence.
In view of the fact that the I.G. did not consider the newly admitted evidence relating to the presence of a mitigating factor in this case, I give no deference to the I.G.'s determination to exclude Petitioner for 10 years. I find that the 10-year exclusion in this case is not within a "reasonable range" of exclusions because it fails to take into consideration the trustworthiness that is established by Petitioner's cooperation. Based on the impact of the mitigating factor established by the evidence in this case, I modify the exclusion to a term of seven years.
Joseph K. Riotto
Administrative Law Judge
1. Unless the context indicates otherwise, I use the term "Medicare and Medicaid" to refer to all of the federal and State health care programs from which Petitioner was excluded.