SUBJECT:

Gabriel Gbogi,

Petitioner,

The Inspector General.

DECISION

I decide that the ten-year exclusion that the Inspector General (I.G.) imposed against Petitioner, Gabriel Gbogi, is unreasonable. I modify the exclusion to a term of five years.

I. Background

On July 29, 2005, the I.G. notified Petitioner that he was being excluded from participating in Medicare and other federally funded health care programs for a period of ten years. The I.G. advised Petitioner that the exclusion was imposed pursuant to sections 1128(a)(1) and 1128(a)(3) of the Social Security Act (Act). Petitioner requested a hearing and the case was assigned to me for a hearing and a decision.

On December 20, 2005, I held a pre-hearing conference at which I provided the parties with a schedule to submit briefs and proposed exhibits. Order and Schedule for Filing Briefs and Documentary Evidence, December 23, 2005. Additionally, I afforded the parties the opportunity to offer in-person testimony. Id. at 3 - 4. The I.G. submitted a brief, a reply brief, and two proposed exhibits (I.G. Ex. 1 and I.G. Ex. 2). Petitioner, who is pro se, submitted a written statement which he characterized as "The Defense Motion." Petitioner did not designate any proposed exhibits. However, I am designating Petitioner's Defense Motion as P. Ex. 1, inasmuch as it contains Petitioner's written testimony. I am receiving I.G. Ex. 1 and I.G. Ex. 2, along with P. Ex. 1, into evidence. Neither party demanded to present testimony in person.

II. Issues, findings of fact and conclusions of law

A. Issues

As I discuss above, the I.G. excluded Petitioner pursuant to sections 1128(a)(1) and 1128(a)(3) of the Act. Section 1128(a)(1) mandates exclusion of any individual who is convicted of a criminal offense related to the delivery of an item or service under Medicare or a State health care program (a State Medicaid program). Section 1128(a)(3) mandates exclusion of any individual who is convicted of a felony occurring after August 21, 1996, relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program other than Medicare or a Medicaid program that is operated by or financed in part by any federal, State, or local government agency. Petitioner has not disputed the I.G.'s authority to exclude him pursuant to these two sections.

What remains at issue in this case is the reasonableness of the I.G.'s exclusion determination. Petitioner has challenged the I.G.'s determination to exclude him for a period of ten years. He contends that an exclusion of five years is reasonable.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. It is appropriate to decide this case without an in-person hearing.

At the December 20, 2005 pre-hearing conference, I explained to the parties that it is often true that in a case involving an exclusion imposed by the I.G. all relevant evidence is contained in documents. For that reason I gave the parties the opportunity to submit their proposed cases in writing in lieu of having an in-person hearing. However, I also advised the parties that either of them could request that I hear the case in person. I informed them that, if a party requested an in-person hearing, I would decide whether the party had testimony that was relevant which did not duplicate written evidence. Order and Schedule for Filing Briefs and Documentary Evidence, December 23, 2005.

Neither party requested an in-person hearing and, for that reason, it is appropriate that I decide the case based on their written submissions. I note that the I.G. designated his submission as a "motion for summary judgment." That is an incorrect characterization of the process that I established for hearing and deciding this case. Summary judgment is not at issue here. Summary judgment would be appropriate if there were no disputed issues of material fact. In this case facts are disputed. With the consent of the parties, I am deciding this case, and resolving fact disputes, based on the parties' written submissions. I am not entering summary judgment in favor of either party.

2. An exclusion of ten years is unreasonable. Evidence of Petitioner's untrustworthiness justifies no more than the minimum five-year exclusion.

The weight of the evidence in this case establishes a ten-year exclusion to be beyond a reasonable range of exclusions for Petitioner. On balance, the record does not establish Petitioner to be so untrustworthy as to necessitate an exclusion of more than five years. The evidence in this case establishes that Petitioner was a minor participant in a criminal scheme that was devised and implemented by others. There is no evidence to support a finding that Petitioner played any more than a small role in that conspiracy. Furthermore, there is mitigating evidence consisting of his cooperation with prosecuting authorities leading to the successful prosecution of the conspiracy.

The Act mandates that exclusions imposed pursuant to sections 1128(a)(1) or 1128(a)(3) be for a minimum of five years. Act, section 1128(c)(3)(B). Exclusions of more than five years may be imposed. However, inasmuch as the Act is remedial and not punitive, any exclusion that is imposed for more than the five-year minimum period must satisfy the Act's remedial purpose.

The remedial purpose of the Act is to protect federally funded health care programs, and the beneficiaries and recipients of program funds, from individuals or entities who have been shown to be untrustworthy. Ultimately, in assessing the length of any exclusion that is imposed for more than a minimum statutory period one must decide whether the exclusion satisfies the Act's remedial purpose. In other words the question that must be decided is: how long an exclusion is reasonably necessary to protect programs or their beneficiaries and recipients from an untrustworthy individual or entity?

The Secretary has published regulations which establish criteria for answering this question. In the case of an exclusion imposed pursuant to sections 1128(a)(1) or 1128(a)(3), those criteria are contained in 42 C.F.R. �� 1001.102(b) and (c). These subsections describe aggravating and mitigating factors that may be considered in addressing the issue of reasonableness. Evidence that relates to an aggravating factor may be a basis for increasing the length of an exclusion beyond the five-year minimum. Evidence that relates to a mitigating factor may be a basis for reducing the length of an exclusion, although no exclusion may be reduced to less than the five-year minimum.

The aggravating and mitigating factors operate as rules of evidence. Evidence that relates to one or more aggravating or mitigating factors is relevant to the issue of an excluded individual's trustworthiness, and may thus be used to decide the reasonableness of an exclusion. Evidence that does not relate to an aggravating or mitigating factor is irrelevant. Also, like rules of evidence, the regulations that define aggravating or mitigating factors contain no instructions as to the weight that must be assigned to relevant evidence. Rather, they describe only what is relevant, leaving it to the fact finder to assign weight.

The regulations very clearly do not establish a formula for deciding the reasonable length of an exclusion. There is nothing in the regulations, for example, which says that the presence of evidence of aggravation must result in an enhanced exclusion or in an exclusion for any particular length of time. Nor is there anything in the regulations to suggest that evidence of mitigation must cause the reduction of an exclusion.

The evidence in this case establishes that two aggravating factors are present. The evidence supports a conclusion that Petitioner committed crimes over a period of more than one year, an aggravating factor under 42 C.F.R. � 1001.102(b)(2). The evidence also, albeit very weakly, supports a conclusion that Petitioner's crimes or similar acts caused a financial loss to a government program (Medicare) or to one or more entities of $5,000 or more, an aggravating factor under 42 C.F.R. � 1001.102(b)(1). However, although there is a technical basis for me to find the presence of aggravating factors, none of the evidence pertaining to aggravation in this case provides strong support for a finding that Petitioner is so untrustworthy as to merit an exclusion for more than the five-year statutory minimum period.

The evidence also supports a conclusion that a mitigating factor is present consisting of Petitioner's cooperation with prosecuting authorities leading to the conviction of other individuals. 42 C.F.R. � 1001.102(c)(3)(i). As I discuss below, this evidence, like the evidence relating to aggravation, is scant, although it does establish the presence of a mitigating factor. However, the weak evidence that is relevant to a mitigating factor is certainly sufficient to negate the equally weak evidence of aggravation.

The facts of this case are as follows. Petitioner is a physical therapist who is licensed by the State of Michigan. I.G. Ex. 2, at 2. In or about September 2002, Petitioner became employed by an entity known as Aquatic & Physical Therapy Associates (APTA), in Kalamazoo, Michigan. Id. at 1, 15. In or about August 2003, Petitioner's relationship with APTA and its owner apparently changed from an employment relationship to a contractual relationship. Id. at 17. The terms and conditions of that contract are not in evidence.

On October 7, 2004, an indictment was issued in a federal court against Petitioner, other individuals, and an entity known as Medco Claims Processing, Inc. (Medco). I.G. Ex. 2. The first count of the indictment charged Petitioner and the other defendants with conspiracy to defraud Medicare, Blue Cross Blue Shield of Michigan, and other entities. Id. at 4 - 5. Count 1 alleged that Petitioner, along with his co-defendants, conspired with APTA's owner to submit or cause to be submitted to Medicare and other entities claims and bills for physical therapy services that were neither performed nor supervised by a licensed physical therapist. Id. at 5. It charged also that Petitioner and his co-defendants submitted or caused to be submitted claims for services that were never performed at all. Id. It charged Petitioner and his co-defendants with filing double bills with Medicare and other entities for the same service. Id.

As to Petitioner, Count 1 charged that he and his co-defendants submitted claims for services allegedly performed by him that were neither performed nor supervised by a licensed physical therapist. It alleged that Petitioner purportedly provided many of these fraudulent services at times when he was traveling outside the United States. I.G. Ex. 2, at 5 - 6.

Count 1 of the indictment alleged numerous overt acts in support of the conspiracy. Twelve of these overt acts allegedly were perpetrated by or on behalf of Petitioner. Each of them consisted of filing a claim for a service that either was not provided or was not provided as claimed. I.G. Ex. 2, at 15 - 19. The first of these fraudulent claims was filed on or about October 16, 2002 and the last of them was filed on or about November 26, 2003. Id. The first count contains no information as to the specific value of the false claims allegedly submitted by or for Petitioner. However, it alleges that the total loss caused by the conspiracy exceeded $120,000, but was less than $400,000. Id. at 27.

Petitioner was found guilty of Count 1 of the indictment on January 31, 2005, based on a guilty plea entered by him. I.G. Ex. 1. He was sentenced to four years probation for his crime and was ordered to pay restitution totaling $47,303. Id. at 2, 4. The restitution included $21,641.95 being owed to Medicare, with the rest being owed to other entities. Id. at 4.

The twelve false claims submitted by or on behalf of Petitioner were filed over a period of about 13 months. That is sufficient to establish an aggravating factor. However, the evidence pertaining to this pattern of claims is not persuasive evidence of untrustworthiness sufficient to justify an exclusion beyond the five years that is mandated by law. The false claims submitted by Petitioner are few in number and were submitted sporadically. They hardly support a conclusion that Petitioner was a principal in devising and implementing the conspiracy. Rather, they suggest strongly that Petitioner was, at most, a minor actor.

Similarly, the amount of restitution that Petitioner was ordered to pay is not very indicative of a degree of untrustworthiness that requires an exclusion beyond the minimum period. It is unclear from either the indictment or the judgment whether the restitution amount constitutes an actual assessment of the amount of damage caused by Petitioner personally. I am willing to accept that his involvement in the conspiracy was worth $5,000 or more in false claims. But, it requires a leap of faith that I am unwilling to make, based solely on what the I.G. presented, that Petitioner's criminal activity equaled the restitution amount. That is because there is absolutely nothing in the record of the case showing how this amount was calculated. I cannot say from this record whether it is based on the actual false claims that Petitioner submitted or caused to be submitted. ⁽¹⁾ I am thus left to guess whether the restitution is supposed to reflect Petitioner's actual criminal conduct or whether it simply represents some percentage of the overall conspiracy that is attributed to Petitioner as a matter of a plea negotiation. It is not even clear from the judgment whether Petitioner is individually liable for the restitution amount or whether the same restitution amount was imposed jointly and severally on co-defendants who pled or who were found guilty.

The image of Petitioner that emerges from his indictment and the judgment of conviction is that of a bit player in the conspiracy. The indictment alleges that the conspiracy was essentially organized by the owner of APTA, and that her principal co-conspirators were Medco, a claims processing firm, and several individuals other than Petitioner. Petitioner certainly was not an innocent bystander. The indictment makes it plain that he actively contributed to the conspiracy's success by either filing false claims or by allowing them to be filed in his name. But, it is also apparent that Petitioner was neither the brains behind the conspiracy nor was he a principal contributor to its success. Indeed, it is unclear from either the indictment or the judgment - and given the absence of any documentation of the terms of Petitioner's relationship with APTA - whether Petitioner actually profited directly from the conspiracy, or was simply paid a salary or a contractual fee that was determined independently of his criminal acts.

Moreover, Petitioner submitted evidence - consisting of his statement - that he actively aided the prosecution in bringing his co-conspirators to judgment. This is a mitigating factor. In Petitioner's own words:

I was very cooperative with the government agents . . . that investigated the matter . . . [.] [A]s a matter of fact I called them regarding the overpayment and what . . . [APTA's proprietor] was doing and when they came, I told them everything I know about the matter and gave them the documents they requested and I cooperated with [the United States] Attorney's office in solving this case . . . .

P. Ex. 1, at 1. The I.G. argues that I should discount entirely Petitioner's statement because he did not corroborate it with other evidence. However, the regulations do not require proof of mitigation to be corroborated. Petitioner's assertion would be stronger, obviously, had he furnished some corroborating evidence. But, on its face it is credible, and it makes out the elements of a mitigating factor. Furthermore, there is some corroboration for Petitioner's assertion in the fact that Petitioner was sentenced only to a term of probation and not to incarceration for his crime. I.G. Ex. 1, at 2. ⁽²⁾

Petitioner's uncorroborated assertion about the extent of his cooperation is potentially self-serving and I have taken that possibility into consideration in accepting the statement as true. I would find Petitioner's statement to be less credible had, for example, he received incarceration as part of his sentence or had the indictment described his role in the conspiracy as being anything more than minor. I note, however, that I provided the I.G. with the opportunity to offer rebuttal challenging Petitioner's statement and the I.G. did not avail himself of that opportunity. The I.G. did not ask to cross-examine Petitioner as to his statement, nor did the I.G. offer evidence from the United States Attorney's office that contradicted Petitioner's assertions.

As I have discussed, the evidence of aggravation in this case is very weak. Moreover, it is, in my judgment, offset by the evidence of mitigation filed by Petitioner. When all is said and done, the record of this case simply does not establish Petitioner to be so untrustworthy as to necessitate more than the minimum exclusion.

Steven T. Kessel

Administrative Law Judge

1. It might have aided my understanding of the case if the I.G. had filed evidence that provided a more detailed explanation of Petitioner's crimes, such as a copy of his plea agreement or a pre-sentencing report, and the contract that Petitioner entered into with APTA. Documentation like this generally is available to the I.G., and typically, the I.G. offers such documentation as evidence in order to provide as complete a picture as possible of the excluded individual's criminal acts. However, the I.G. did not choose to file such evidence here.

2. Alternatively, the extremely light sentence that Petitioner received is evidence of the minor nature of his involvement in the conspiracy.