$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Dr. Abdul Abassi,
Petitioner,
- v. -
The Inspector General.
DATE: August 31, 1995
Docket No. C-93-122
Decision No. CR390
DECISION
In this Decision, I conclude that the 15-year exclusion that the
Inspector General (I.G.) imposed against Petitioner from
participating in Medicare and other federally financed health care
programs is excessive. I modify the exclusion to a term of eight
years.
I. Background
On July 13, 1993, the I.G. notified Petitioner that he was being
excluded from participating, for a period of 15 years, in the
following programs: Medicare, Medicaid, Maternal and Child Health
Services Block Grant, and Block Grants to States for Social
Services. The I.G. told Petitioner that he was being excluded
because he had been convicted of a criminal offense related to the
delivery of an item or service under Medicaid.
Petitioner requested a hearing. The case was assigned originally
to Administrative Law Judge Charles Stratton. At the request of
Petitioner, Judge Stratton stayed the case. The case was
reassigned to me after Judge Stratton's death. In early 1995,
Petitioner requested that the stay be removed and that a hearing be
held. I scheduled an in-person hearing. On May 24, 1995, I held
an in-person hearing in New York City.
I base my Decision in this case on the law, the evidence which I
received at the hearing, and on the arguments which the parties
made in their posthearing briefs.
II. Issue
Petitioner admits that he was convicted of a criminal offense
related to the delivery of an item or service under the New York
Medicaid program. ALJ Ex. 1 at 4. 1/ Petitioner admits also that
the I.G. was required to exclude Petitioner, pursuant to section
1128(a)(1) of the Social Security Act (Act), for at least five
years. See Id. Therefore, the only issue in this case is whether
the 15-year exclusion imposed by the I.G. is reasonable.
In deciding to modify the exclusion to a term of eight years, I
make the following findings of fact and conclusions of law. After
each finding or conclusion, I state the page or pages of this
Decision at which I discuss the finding or conclusion in detail.
1. The Act requires the Secretary, or her lawful delegate,
the I.G., to exclude for at least five years any individual or
entity who is convicted of an offense described in section
1128(a)(1) of the Act. Pages 3 - 4.
2. Regulations provide that an exclusion of more than five
years may be imposed in any case where there exist factors which
the regulations define as aggravating, and that are not offset by
factors which the regulations define as mitigating. Pages 3 - 4.
3. The I.G. proved that there exist two aggravating factors.
Pages 4 - 6.
4. Petitioner did not prove that there exist any mitigating
factors. Pages 6 - 8.
5. The evidence which is relevant to the aggravating factors
does not prove that Petitioner is so untrustworthy as to require a
15-year exclusion.
Pages 8 - 10.
6. The degree of untrustworthiness established in this case
proves that an exclusion of eight years is reasonably necessary to
protect the integrity of federally financed health care programs.
Pages 8 - 10.
III. Discussion
A. Governing law
The I.G. imposed Petitioner's exclusion pursuant to section
1128(a)(1) of the Act. This section mandates the exclusion of any
individual or entity who has been convicted of a criminal offense
related to the delivery of an item or service under Medicare or
under any State health care program, including the New York
Medicaid program. Exclusions imposed under section 1128(a)(1) must
be for a minimum of five years. Act, section 1128(c)(3)(B).
The purpose of the exclusion law is remedial. Congress intended
that the Act, including section 1128(a)(1), be applied to protect
the integrity of federally funded health care programs and the
welfare of program beneficiaries and recipients, from individuals
and entities who have been shown to be untrustworthy. Exclusions
imposed pursuant to section 1128 (including exclusions of more than
five years imposed under section 1128(a)(1)) have been found
reasonable only insofar as they are consistent with the Act's
remedial purpose. Robert Matesic, R.Ph., d/b/a Northway Pharmacy,
DAB 1327, at 7 - 8 (1992); Rosaly Saba Khalil, M.D., DAB CR353, at
9 (1995).
Prior to 1993, there were no regulations governing the
administrative adjudication of exclusions imposed pursuant to
section 1128. In cases decided prior to 1993, appellate panels and
administrative law judges of the DAB held that the criteria used to
evaluate the trustworthiness of excluded parties, and the
reasonableness of exclusions, were derived from the Act itself.
These criteria encompassed any evidence relevant to an excluded
party's trustworthiness to provide care. Matesic, DAB 1327, at 7
- 8.
However, in January 1993, regulations published originally in
January 1992, became binding on administrative adjudicators. 42
C.F.R. Part 1001; 42 C.F.R. 1001.1(b). The regulations
established criteria by which the length of exclusions imposed
pursuant to section 1128 are to be evaluated. These regulations
provide that, in cases involving exclusions imposed pursuant to
section 1128(a) of the Act, the reasonableness of the length of any
exclusion imposed for a period of more than five years will be
decided based on the presence of, and the weight assigned to,
certain aggravating and mitigating factors which the regulations
identify. 42 C.F.R. 1001.102(b)(1) - (6), (c)(1) - (3).
In any case in which the reasonableness of an exclusion is at
issue, I am obligated to decide, using the factors contained in the
regulations, whether an exclusion of a particular length is
reasonably necessary to protect the integrity of federally financed
health care programs and the welfare of the programs' beneficiaries
and recipients. Khalil, DAB CR353, at 10. One consequence of the
regulations is to limit the factors which I may consider as
relevant to an excluded party's trustworthiness to provide care.
I may no longer, for example, consider evidence relating to a
party's remorse for his or her crimes, nor may I consider evidence
relating to a party's rehabilitation, as evidence of that party's
trustworthiness. See Matesic, DAB 1327, at 7 - 8. Such evidence
does not fall within any of the aggravating or mitigating factors
contained in the regulations.
An exclusion must not be punitive. It must comport with the Act's
remedial purpose. The presence of aggravating factors in a case is
not in and of itself a basis to exclude a party for a particular
length of time. In a case involving an exclusion imposed pursuant
to section 1128(a)(1), the presence of an aggravating factor or
factors not offset by the presence of a mitigating factor or
factors, does not automatically justify an exclusion of more than
five years. The regulations contain no formula for assigning
weight to aggravating and mitigating factors once the presence of
any of these factors is established. It is apparent both from the
regulations themselves, and from the Act's remedial purpose that,
I must explore in detail, and assign appropriate weight to, those
factors which are aggravating or mitigating.
B. The program-related crimes committed by Petitioner
Petitioner is a physician. ALJ Ex. 1 at 1; Tr. at 32 - 33. 2/ On
August 7, 1991, Petitioner was indicted in the Supreme Court of the
State of New York, Bronx County, on felony charges related to the
New York Medicaid program. I.G. Ex. 1; ALJ Ex. 1 at 1. On June
19, 1992, after a jury trial, Petitioner was convicted on 18
counts. I.G. Ex. 2 at 1; I.G. Ex. 3; ALJ Ex. 1 at 2.
Petitioner was convicted of one count of grand larceny in the third
degree, and 17 counts of offering a false instrument for filing in
the first degree. I.G. Ex. 3 at 1. The gravamen of these offenses
is that Petitioner submitted or caused to be submitted false
Medicaid claims to a fiscal agent for the New York Medicaid
program. I.G. Ex. 1 at 2.
During a six-month period, from November 1987 to May 1988,
Petitioner engaged in fraud against the New York Medicaid program
totalling $75,000. The exhibits relating to Petitioner's
indictment and conviction do not describe his crimes in detail.
See I.G. Exs. 1 - 4. It is not clear from these exhibits
precisely how Petitioner defrauded the New York Medicaid program.
The exhibits prove that Petitioner engaged in fraud beginning on or
about November 1, 1987 and continuing to about May 1, 1988. I.G.
Ex. 1 at 1 - 20. That fraud consisted of submitting, or causing to
be submitted, false Medicaid reimbursement claims for radiological
services. Id. Petitioner was sentenced to pay restitution in the
amount of $75,000. I.G. Ex. 2; I.G. Ex. 4 at 31.
Petitioner essentially denies committing crimes, notwithstanding
the proof of his indictment and conviction. According to
Petitioner, he was an innocent bystander to a scheme to defraud the
New York Medicaid program that was perpetrated by others. I find
Petitioner's explanation of his conduct to be self-serving and not
credible. 3/
Petitioner testified that, beginning in March 1987, he rented an
office which he sublet to two physicians. Tr. at 40 - 41. He
testified that he closed the office in June 1987, in response to
complaints from neighborhood residents about the patients who were
visiting the office. Tr. at 43.
Petitioner acknowledged that the physicians who rented the office
from him used that office to generate false Medicaid reimbursement
claims for sonograms. Tr. at 42 - 43. However, he denied that he
was aware of this fraud during the time that he sublet the office
to the physicians. Tr. at 44 - 45. Petitioner asserted that he
first became aware that these physicians may have engaged in fraud
in 1991, after being contacted by investigators. Id. Petitioner
acknowledged also receiving a kickback from an individual, Mabbo
Babassi, which, evidently, was in some respects related to a scheme
to defraud Medicare. Tr. at 56, 66 - 67. However, the record of
this case is unclear as to how this payment relates to the crimes
of which Petitioner was convicted. Petitioner denied that he ever
received reimbursement checks from the New York Medicaid program.
Tr. at 56.
C. The presence of aggravating factors
The July 13, 1993 notice of exclusion which the I.G. sent to
Petitioner told him that he was being excluded for a period of 15
years, based on the alleged presence of three aggravating factors.
According to the I.G., the alleged aggravating factors consisted of
the following:
Petitioner's crimes caused financial damage to the New
York Medicaid program of more than $200,000.
Petitioner was sentenced to imprisonment for one year.
Petitioner committed his criminal acts over a two-year
period, from 1986 - 1988.
The evidence in this case establishes the presence of two
aggravating factors. First, the I.G. proved that Petitioner
engaged in crimes resulting in financial loss to the New York
Medicaid program in excess of $1500. 42 C.F.R. 1001.102(b)(1).
As I find above, Petitioner committed fraud against the New York
Medicaid program in the amount of $75,000 (not the more than
$200,000 alleged by the I.G.).
Second, Petitioner was sentenced to incarceration. 42 C.F.R.
1001.102(b)(4). The evidence establishes that Petitioner was
sentenced to a term of one year in prison, as was alleged by the
I.G. I.G. Ex. 4 at 30 - 32.
The I.G. did not prove the presence of a third aggravating factor,
the alleged commission of crimes by Petitioner during a period of
more than one year. See 42 C.F.R. 1001.102(b)(2). As I find
above, Petitioner committed his crimes over a period of six months.
4/
D. The absence of mitigating factors
Petitioner asserts that the two aggravating factors proved by the
I.G. are offset by a mitigating factor. He contends that,
subsequent to his conviction, he cooperated with prosecuting
authorities, resulting in the conviction of other individuals. See
42 C.F.R. 1001.102(c)(3)(i).
Petitioner did not prove that his cooperation with prosecuting
authorities resulted in the conviction of other individuals.
Therefore, I do not find that Petitioner proved the presence of the
mitigating factor described in 42 C.F.R. 1001.102(c)(3)(i).
Petitioner has the burden of proving the presence of a mitigating
factor. His burden here consisted of proving that: (1) he
cooperated with prosecuting authorities; and (2) that his
cooperation resulted in the conviction of another individual or
individuals.
Petitioner proved the first element of his burden. The evidence
establishes that, subsequent to his conviction, Petitioner
cooperated with prosecuting authorities by supplying them with
information concerning the possible criminal activities of other
individuals. I.G. Ex. 13; I.G. Ex. 15 at 2; P. Ex. 1; Tr. at 48 -
55.
However, the evidence does not prove that Petitioner's cooperation
has so far resulted in the conviction of others. The prosecuting
authorities whom Petitioner has communicated with have not stated
or suggested that Petitioner's cooperation has led to or
contributed to the conviction of other individuals. See I.G. Ex.
13; I.G. Ex. 15 at 2; P. Ex. 1. Petitioner did not offer any
meaningful evidence to prove that any individual was convicted as
a result of Petitioner's cooperation. Petitioner testified that
one person pled guilty to criminal charges after Petitioner had
supplied information about that person to prosecuting authorities.
Tr. at 51 - 53. Petitioner averred that he was willing to testify
against that individual had he not pled guilty. Id. However,
Petitioner did not offer any evidence to show that his cooperation
affected that individual's decision to plead guilty.
The I.G. and Petitioner dispute the meaning of the term "resulted
in" as set forth at 42 C.F.R. 1001.102(c)(3)(i). It is not
necessary for me to decide the meaning of that term in order for me
to conclude that Petitioner did not prove that his cooperation
resulted in the conviction of another person. Even the broadest
definition of the term "resulted in" would require evidence of some
causal relationship between the individual's cooperation and the
conviction of another individual in order to prove the presence of
a mitigating factor. Here, there is no evidence of any causal
relationship between Petitioner's cooperation with prosecuting
authorities and the conviction of another individual.
At the hearing, I received evidence from Petitioner concerning his
conduct after his conviction. This evidence established that
Petitioner has pursued his medical studies and that he presently
has a fellowship in cardiology at Columbia University. Tr. at 45.
The evidence includes also Petitioner's testimony that he has paid
$30,000 of the $75,000 restitution that he was ordered to pay. Tr.
at 48. It includes also a letter from Richard S. Harrow, the
prosecutor in the criminal case against Petitioner. I.G. Ex. 13;
P. Ex. 1. In that letter, Mr. Harrow opines that Petitioner is
sincerely remorseful and that Petitioner should be given a second
chance to pursue his medical career. Id.
This evidence would have been relevant to the issue of Petitioner's
trustworthiness to provide care under the criteria for evaluating
trustworthiness established by the Matesic decision. However, it
does not relate to any of the mitigating factors listed in 42
C.F.R. 1001.102(c). Therefore, I cannot consider this evidence
to be relevant, either to the issue of whether mitigating factors
were established by Petitioner, or to the broader issue of
Petitioner's trustworthiness to provide care to Medicare
beneficiaries and Medicaid recipients.
E. Evaluation of the length of exclusion
The presence of two aggravating factors in this case, not offset by
a mitigating factor, means that an exclusion of more than five
years may be reasonable. However, as I hold at Part III.A. of this
Decision, the presence of these factors does not mean that an
exclusion of any particular length in excess of five years is
reasonable. I conclude that an exclusion of eight years is
reasonable in this case. My conclusion is a measure of the
Petitioner's lack of trustworthiness, as established by the
aggravating factors proved by the I.G. and the lack of any
mitigating factor.
The evidence pertaining to the two aggravating factors established
by the I.G. proves that Petitioner committed crimes which had a
serious financial impact on the New York Medicaid program.
Petitioner engaged in a series of fraudulent acts over a six-month
period that defrauded Medicaid of $75,000. The persistence with
which Petitioner engaged in his misconduct, as evidenced by the 18
separate criminal counts of which he was convicted, coupled with
the damages he caused, suggests a high degree of untrustworthiness.
This evidence proves the need for an exclusion of more than five
years to protect the integrity of federally financed health care
programs.
However, the evidence in this case does not prove that Petitioner's
conduct was so egregious as to justify a level of untrustworthiness
meriting a 15-year exclusion. An exclusion of 15 years is so
lengthy that, depending upon the age and particular circumstances
of the individual, it may effectively permanently preclude that
individual from participating as a provider in federally funded
health care programs. Exclusions of 15 years or more should be
imposed only on the most untrustworthy individuals. Such
exclusions are justified in cases where an individual demonstrates
by his or her conduct that he or she is so untrustworthy that it is
possible that he or she may never again become a trustworthy
provider of items or services under federally funded programs.
There are cases in which a provider's conduct, as is demonstrated
by the aggravating factors proved by the I.G., is so egregious as
to justify an exclusion of 15 years. In Khalil, I sustained a
15-year exclusion. In that case, the petitioner had been a willing
and active participant in a massive fraud scheme against the New
York Medicaid program. I found that her conduct caused Medicaid to
be defrauded of more than $1,900,000. Khalil at 11. She was
overpaid more than $135,000 as a direct consequence of her fraud.
Id. at 12. Her crimes were so serious that she was sentenced to 41
months of incarceration. Id.
The evidence in this case does not establish that Petitioner
manifests the level of culpability, or lack of trustworthiness,
that I found the petitioner manifested in Khalil. Petitioner's
crimes, while serious, are of a lesser magnitude than those that
were established to have been committed by the petitioner in
Khalil.
The total damages caused by Petitioner in this case to the New York
Medicaid program are substantially less than were caused by the
Petitioner in Khalil. Perhaps more significant, the record in this
case is practically silent as to the nature of Petitioner's
involvement in the crimes of which he was convicted. By contrast,
the record in Khalil was replete with evidence that proved that the
petitioner in that case was an active and eager participant in a
scheme to defraud the New York Medicaid program. The length of the
sentence imposed on the Petitioner in this case -- one year's
imprisonment -- is additional evidence that Petitioner's crimes are
of a lesser degree than those committed by the petitioner in
Khalil, who was sentenced to 41 months in prison.
IV. Conclusion
I conclude that the I.G. was authorized to exclude Petitioner for
more than five years. The exclusion of 15 years that the I.G.
imposed is excessive, because it is not supported by the evidence
relating to the aggravating factors proved by the I.G. An
eight-year exclusion is reasonable. Therefore, I sustain an
exclusion of Petitioner for a period of eight years.
________________________
Steven T. Kessel
Administrative Law Judge
1. I refer to the exhibits and transcript as follows:Petitioner's
Exhibit - P. Ex. (number at page);
I.G.'s Exhibit - I.G. Ex. (number at page);
Administrative Law Judge Exhibit - ALJ Ex. (number at page);
Transcript - Tr. (page).
2. At the hearing, I admitted the following exhibits into
evidence: ALJ Ex. 1; I.G. Exs. 1 through 15, inclusive; P. Exs. 1
through 12, inclusive. None of the exhibits offered by either
party was rejected.
3. I did not receive Petitioner's testimony as evidence relating
to the issue of whether he committed program-related crimes.
Petitioner conceded that he was convicted of program-related
crimes. Moreover, the evidence establishing his indictment and
conviction of criminal offenses related to the delivery of items or
services under the New York Medicaid program is irrefutable proof
of his conviction of an offense within the meaning of section
1128(a)(1) of the Act. I received Petitioner's testimony as
evidence about the possible presence of aggravating and mitigating
factors.
4. The I.G. did not assert, either at the hearing or in her
posthearing brief, that she had proven the presence of this third
alleged aggravating factor.