SUBJECT:

Brenda Mills, M.D., a/k/a Brenda Kluttz,

Petitioner,

The Inspector General.

DECISION

Petitioner, Brenda Mills, M.D., appeals the decision of the Inspector General (I.G.), made pursuant to section 1128(a)(3) of the Social Security Act (Act), to exclude her from participation in Medicare, Medicaid, and all federal health care programs for a period of 10 years. For the reasons discussed below, I find that the I.G. is authorized to exclude Petitioner, and that the 10-year exclusion falls within a reasonable range.

I. Background

By letter dated September 30, 2005, the I.G. notified Petitioner that she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of 10 years. I.G. Ex. 1. In that letter the I.G. explained that he is authorized to exclude Petitioner under section 1128(a) of the Act based on her conviction in the United States District Court for the Eastern District of Missouri of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.

Petitioner thereafter requested a hearing, and the case has been assigned to me for decision.

I held a prehearing telephone conference on March 8, 2006. At that time, Petitioner acknowledged her conviction, and the parties agreed that the matter could be decided based on written submissions. Both parties have submitted briefs. ⁽¹⁾ The I.G. filed seven exhibits (I.G. Exs. 1-7) as part of his submission. ⁽²⁾ Petitioner filed no exhibits. In the absence of objection, I receive into evidence I.G. Exs. 1-7. The I.G. also submitted a reply brief.

II. Issue

Petitioner concedes that she was convicted of a felony related to fraud or other financial misconduct in connection with the delivery of a health care item or service, and acknowledges the mandatory imposition of a five-year exclusion. P. Brief (Br.) at 2, 3. 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

I make findings of fact and conclusions of law to support my decision in this case. I set forth each finding below, in italics, as a separate numbered or lettered heading.

A. Because Petitioner was convicted of a felony relating to fraud in connection with the delivery of a health care item or service, the Act requires that she be excluded from participation in federal health care programs for a minimum of five years.

The basic facts of this case are not in dispute, and are set forth in a plea agreement with stipulations that Petitioner signed on November 6, 2004. I.G. Ex. 3. Petitioner was a physician, licensed in the State of Missouri. In the course of her medical practice, she submitted to third party payers (i.e., insurers) bills and statements of services, seeking payment for medical services. I.G. Ex. 3, at 7-8. From June 2002 through September 2003, she submitted to the Department of Labor claim forms detailing treatment she purportedly provided to Patient CC, a postal employee. These forms included billings for physical therapy (PT) services. On or about September 30, 2002, Petitioner met with a nurse sent by the Department of Labor to evaluate the services billed. She falsely told the nurse that one of her employees was a physical therapist, inducing the Department of Labor to continue payments for PT services. The financial loss to the department was more than $30,000 but less than $70,000. I.G. Ex. 3, at 8.

Petitioner also submitted false claims to private insurance companies, costing those entities up to $120,000. I.G. Ex. 3, at 8.

On November 8, 2004, Petitioner pled guilty to making a false statement to the Department of Labor, in violation of 18 U.S.C. � 1001, and, on March 4, 2005, the United States District Court for the Eastern District of Missouri entered judgment against her. I.G. Ex. 7, at 1. She was sentenced to six months of in-home confinement (I.G. Ex. 7, at 3), followed by three years probation (I.G. Ex. 7, at 2), and ordered to pay $84,112.26 in restitution (I.G. Ex. 7, at 4).

Section 1128(a)(3) of the Act requires that the Secretary of Health and Human Services (Secretary) exclude an individual who has been convicted under federal or state law of a felony 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 operated by, or financed, in whole or in part, by any federal, state, or local government agency. 42 C.F.R. � 1001.101. Petitioner concedes that she was convicted of a felony within the meaning of section 1128(a)(3) and is thus subject to exclusion. She nevertheless points out that another individual contributed to the "billing irregularities." P. Br. at 2. I accept that Petitioner may not have been acting alone, but find that irrelevant to the issue of whether the I.G. has a basis for imposing an exclusion. Petitioner's felony conviction provides that basis.

B. The 10-year exclusion falls within a reasonable range.

Having found a basis for the exclusion, I next consider whether the 10-year exclusion imposed falls within a reasonable range.

The statute mandates a five-year minimum exclusion. Act, section 1128(c)(3)(B); 42 C.F.R. � 1001.2007(a)(2). Specific aggravating factors that are not offset by specified mitigating factors may justify increasing the period of exclusion beyond the five-year minimum. 42 C.F.R. � 1001.102. Here, the I.G. cites two of the nine aggravating factors listed in the regulations as bases for lengthening Petitioner's period of exclusion: (1) Petitioner's actions resulted in a program financial loss in excess of $5,000; and (2) the sentence imposed by the court included incarceration. 42 C.F.R. �� 1001.102(b)(1), (b)(5).  

Petitioner does not challenge the existence of either of these factors. The record establishes that her crimes resulted in a program financial loss well in excess of $5,000, with her stipulation that the losses to the Department of Labor alone amounted to more than $30,000, and the court ordering her to pay over $84,000 in restitution. I.G. Ex. 3, at 8. She was sentenced to six months of home confinement with electronic monitoring. I.G. Ex. 7, at 3. Incarceration includes "any type of confinement . . . including, but not limited to, community confinement, house arrest and home detention." 42 C.F.R. � 1001.2. Unless offset by one or more mitigating factors, these factors justify a significant increase in the length of Petitioner's exclusion.

Petitioner suggests mitigating factors to justify a minimal period of exclusion: she is not a persistent offender, does not have a history of billing improprieties, and is remorseful. P. Br. at 2-3. However, 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 a mitigating factor as "in the nature of an affirmative defense," the Departmental Appeals 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 felony conviction involved financial losses to the program significantly greater than $1,500, the first factor does not apply here. She does not claim that any medical condition reduced her culpability, nor argue any cooperation with government officials. Therefore, this case presents no mitigating factors to justify reducing the period of exclusion.

The Secretary has delegated to the I.G. the authority to impose exclusions for convictions relating to health care fraud. 42 C.F.R. � 1001.201(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). In this case, Petitioner's misconduct demonstrates that she presents a significant risk to the financial integrity of federal health care programs. The financial loss she caused greatly exceeded the regulatory threshold for aggravation. Her crime was serious enough to merit some form of incarceration. See Gerald A. Snider, M.D., DAB No. 1637, at 8 (1997) ("[T]he focus of this aggravating factor . . . is the fact that the sentence included incarceration."). Based on these factors, I am unable to find a 10-year exclusion outside a reasonable range.

IV. Conclusion

For the reasons set forth above, I conclude that the I.G. was authorized, under section 1128(a)(3) of the Act, to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Considering the totality of the evidence, I find the 10-year exclusion is within a reasonable range.

Carolyn Cozad Hughes

Administrative Law Judge

1. Petitioner failed to number the pages of her brief as required by Civil Remedies Division procedures. Because the document is short (three pages), and, to avoid unnecessary delay, we have numbered them for her.

2. In his initial submission, the I.G. misnumbered the final exhibit, which is the district court judgment. He re-submitted the exhibits with his reply brief with the exhibit numbered correctly.