SUBJECT:

Thomas D. Harris,

Petitioner,

The Inspector General

DECISION

The Inspector General (I.G.) notified Thomas D. Harris, (Petitioner) that he was being excluded from participation in Medicare, Medicaid and all other Federal health care programs for a period of 15 years pursuant to sections 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. � 1320a-7(a)). Petitioner's section 1128(a)(1) exclusion was based upon his "conviction" of program-related crimes. Petitioner timely requested review. I find that the I.G. improperly found that two aggravating factors existed to justify a 15-year exclusion. Only one aggravating factor is shown by the evidence. There are no issues of material fact in dispute and summary judgment is appropriate. Accordingly, I have reassessed the period of exclusion and I modify the exclusion to a term of ten years.

The I.G. notified Petitioner of his exclusion by letter dated May 31, 2002. Petitioner requested this appeal by letter dated June 8, 2002. This case was assigned to me for a hearing and a decision on July 11, 2002. I conducted a telephonic prehearing conference on August 28, 2002, the details of which are memorialized in my Order of August 29, 2002. The I.G. filed a Motion for Summary Affirmance and supporting brief (I.G. Br.) with six exhibits (I.G. Ex. 1 - I.G. Ex. 6). Petitioner filed a response brief (P. Br.). The I.G. filed a reply to Petitioner's response (I.G. Reply). Petitioner did not object to the I.G.'s proposed exhibits and they are admitted as evidence. Petitioner does not oppose summary disposition in its brief. Summary judgment is appropriate and no hearing is necessary in this case for a full and fair disposition.

The following findings of fact are based upon the uncontested and undisputed assertions of fact in the Parties' pleadings and the exhibits admitted:

1. Petitioner was, on the date of the I.G. action, the owner of Area Life Care EMS, an ambulance service.

2. Petitioner entered into a plea agreement in which he agreed to plead guilty to knowingly making false Medicare and Medicaid claims with another in an aggregate amount of more than $2500 and sometimes less than $2500 during the period September 1998 through May 1999. I.G. Ex. 3, at 4.

3. On September 21, 2001, in the District Court of Oklahoma County, Oklahoma, Petitioner pled, and was found, guilty pursuant to his pleas of one count of felony Medicaid fraud, one count of misdemeanor Medicaid fraud, and one count of conspiracy to obtain money by false pretenses. I.G. Ex. 3, at 2; I.G. Ex. 4, at 1.

4. On September 21, 2001, Petitioner was sentenced to: pay a fine of $10,000 on September 1, 2006, pay investigative and litigation fees of $5,000 on or before September 1, 2006, and pay full restitution of $141,607.09 on or before September 1, 2006. The Court deferred imposing a sentence of confinement for 5 years subject to Petitioner's compliance with the rules and conditions of probation. I.G. Ex. 4.

5. By letter dated May 31, 2002, the I.G. advised Petitioner that he was being excluded from participation in Medicare, Medicaid and all other Federal health care programs for a period of 15 years, effective 20 days after the date of the letter, based upon Petitioner's conviction as described in Finding 3. Letter dated May 31, 2002, to Thomas D. Harris from M. Joanne Lanahan, attached to the Request for Hearing (I.G. Exclusion Notice).

6. The I.G. found two aggravating factors justified an extended period of exclusion in this case: (a) the acts for which Petitioner was convicted resulted in financial loss to a government program of $5,000 or more; and (b) the acts for which Petitioner was convicted occurred over a period of one year or more from January 1998 to September 2000. I.G. Exclusion Notice.

7. The preponderance of the evidence shows that Petitioner pled guilty to felony and misdemeanor Medicaid fraud during the period September 1998 through May 1999, a period of less than one year. I.G. Ex. 3, at 4.

8. The preponderance of the evidence shows that Petitioner's acts resulted in a loss to the governnent of more than $5,000. Id.

1. Summary judgment is appropriate in this case as there are no material facts in dispute. The I.G. has waived oral hearing and the opportunity to present evidence in support of a longer period of exclusion than determined herein. I.G. Br. at 6.

2. Petitioner was convicted, within the meaning of section 1128(a)(1) of the Act (42 U.S.C. � 1320a-7(a)(1)), of two counts of Medicaid fraud (one felony and one misdemeanor) and one count of conspiracy related to the delivery of an item or service under the Medicaid program.

3. Petitioner must be excluded from participation in any Federal health care program for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act due to his conviction.

4. The I.G. may increase the term of exclusion based on a finding of any of the aggravating factors specified at 42 C.F.R. � 1001.102(b).

5. If the I.G. finds that any of the aggravating factors specified at 42 C.F.R. � 1001.102(b) justify a term of exclusion greater than the statutory minimum exclusion of five years, then the administrative law judge (ALJ) may consider the mitigating factors specified at 42 C.F.R. � 1001.102(c) to reduce the period of exclusion to no less than five years.

6. The range of exclusionary periods contemplated by the Act and the Secretary's regulations extend from a minimum of five years to permanent exclusion, in the case of a mandatory exclusion under section 1128(a). See Act, section 1128(c)(3)(B) and (G); 42 C.F.R. � 1001.102(a) and (d).

7. Only one aggravating factor has been established by the I.G. by a preponderance of the evidence; the acts for which Petitioner was convicted resulted in financial loss to a government program of $5,000 or more.

8. The I.G. did not establish by a preponderance of the evidence that the acts for which Petitioner was convicted occurred over a period of one year or more.

9. Petitioner has not proven the existence of any mitigating factor specified in the regulations.

10. A ten-year exclusion (five-year mandatory and a five-year extension) is within a reasonable range and is not unreasonable.

A. APPLICABLE LAW

Petitioner's right to a hearing by an ALJ and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act. Petitioner's request for a hearing was timely filed and I do have jurisdiction. However, the Secretary has by regulation limited my scope of review to two issues: (1) whether there is a basis for the imposition of the sanction; and, (2) whether the length of the exclusion is unreasonable. 42 C.F.R. � 1001.2007(a)(1). The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. �� 1001.2007(c) and (d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. � 1005.15(b).

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Medicare or Medicaid. Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act shall be for a minimum period of five years, unless specified aggravating or mitigating factors are present which form the basis for lengthening or shortening the period of exclusion. See also, 42 C.F.R. �� 1001.102(a), (b), and (c). Only if the aggravating factors justify an exclusion of longer than five years, may mitigating factors be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. �1001.102(c).

Section 1001.102(b) provides, in relevant part, that the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion:

(1) [t]he acts resulting in the conviction, or similar acts, that caused, or were intended to cause, a financial loss to a Government program . . . of $5,000 or more . . . ; (2) [t]he acts that resulted in the conviction, or similar acts, were committed over a period of one year or more . . .

Section 1001.102(c) provides that only if any of the aggravating factors justify a period of exclusion longer than five years, may mitigating factors be considered as a basis for reducing the period of the exclusion to no less than five years. The following factors may be considered as mitigating and a basis for reducing the period of exclusion:

(1) [t]he individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss . . . to Medicare or any other Federal, State or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $1500; (2) [t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional, or physical condition before or during the commission of the offense that reduced the individual's culpability; or (3) [t]he individual's or entity's cooperation with Federal or State officials resulted in - (i) [o]thers being convicted or excluded from Medicare, Medicaid, or all other Federal health care programs, (ii) [a]dditional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or (iii) [t]he imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

Evidence which does not relate to an aggravating factor or a mitigating factor is irrelevant to determining the length of an exclusion. The burden is upon petitioners to show the presence of mitigating factors. The I.G. bears the burden of proving the existence of aggravating factors. 42 C.F.R. � 1005.15; John (Juan) Urquijo, DAB No. 1735 (2000).

Section 1128(i) of the Act defines the term "convicted" as used in section 1128(a) as follows:

an individual or entity is considered to have been "convicted" of a criminal offense-

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

B. ISSUES

• Whether there is a basis for the exclusion of Petitioner;

  and

• Whether the length of the exclusion imposed by the I.G. was unreasonable.
  

C. ANALYSIS

1. Summary judgment is appropriate.

Summary disposition is appropriate where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary disposition must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed. R. Civ. P. 56(c). There are no issues of material fact in dispute is this case except as to the duration of the Petitioner's conduct. It is well established that section 1128 of the Act is triggered by a conviction, and neither the ALJ nor appellate panels of the DAB can collaterally attack the underlying conviction or relitigate the validity of the conviction. 42 C.F.R. � 1001.2007(d); Travers v. Shalala, 20 F. 3^rd 993, 998 (9^th Cir. 1994). Furthermore, the I.G. has agreed to a decision on the briefs, waiving an oral hearing where evidence might be adduced to establish the existence of facts showing that Petitioner's misconduct occurred over a period of greater than one year. The issues of whether Petitioner was convicted within the meaning of the Act and whether one or more aggravating factors have been shown are appropriately resolved by summary judgment.

2. There is a basis for the exclusion of the Petitioner.

Petitioner does not deny that he pled guilty to Medicaid fraud and conspiracy, criminal offenses related to the delivery of an item or service under Medicare or Medicaid. However, Petitioner argues that he is not subject to mandatory exclusion pursuant to section 1128(a)(1) of the Act because he was not "convicted" of a crime but pled guilty to a deferred sentence. P. Br. at 1 - 2. Petitioner asserts, citing Okla. Stat. Ann. tit. 22, � 991c (West 2002) (section 991c), that under Oklahoma law a judgment of guilty has not been entered against him and if he pays restitution, no judgment will be entered.

I reject Petitioner's arguments for three reasons. First, on September 21, 2001, Judge Donald Deason, District Court of Oklahoma County, State of Oklahoma, entered an "Order Deferring Imposition of Judgement (sic) and Sentence of Plea of Guilty." The order indicates that Petitioner pled guilty and further provides that "it is . . ordered adjudged, and decreed by the Court that the defendant, Thomas D. Harris, is guilty . . ." Therefore, it is clear that Petitioner was found guilty by the court pursuant to his pleas.

Second, section 991c provides that only after the court finds that all conditions of the deferred judgment have been met "the defendant shall be discharged without a court judgment of guilt, and the court shall order the verdict or plea of guilty or plea of nolo contendere to be expunged from the record and the charge shall be dismissed with prejudice to any further action." Thus, the Oklahoma law does not negate the fact that Petitioner was convicted pursuant to his plea on September 21, 2001. Rather, the Oklahoma statute provides that, if Petitioner satisfies all the conditions of the deferred judgment of guilt, the record of the guilty plea will be expunged and the charges will be dismissed. However, until such time as Petitioner fulfills the terms of the deferred judgment, he has a criminal conviction under Oklahoma law.

Third, and most significantly, participation in Medicare, Medicaid and other federal health care programs is controlled by the Social Security Act and Federal regulations. In this case, the Petitioner is being excluded pursuant to section 1128(a)(1) of the Act. Section 1128(i) of the Act defines the term "convicted" as used in section 1128(a) to include a judgment of conviction (even if on appeal), a finding of guilty, acceptance of a plea of guilty, or participation in a deferred adjudication program. The Act specifies that one is "convicted" even if the "criminal conduct has been expunged." The Oklahoma criminal action against Petitioner fits all four definitions, i.e., a judgment of guilt has been entered but is subject to being expunged in the future; there was a finding of guilt; Petitioner's plea of guilty was accepted; and, even if Petitioner's characterization of Oklahoma law is correct, there was a deferred adjudication or the judgment of conviction was withheld. Cf. Travers v. Shalala, 20 F. 3^rd 993 (9^th Cir. 1994).

Accordingly, I conclude, contrary to Petitioner's assertions, that he was "convicted" within the meaning of the Act. Because Petitioner was convicted within the meaning of the Act of a program-related crime, he must be excluded pursuant to section 1128(a)(1) of the Act for a minimum period of five years.

3. A 15-year exclusion of Petitioner is not within a reasonable range and is unreasonable based on the I.G.'s failure to show by a preponderance of the evidence that there are two aggravating factors.

Turning to the issue of whether the period of exclusion for Petitioner was "unreasonable." I note that appellate panels of the Departmental Appeals Board (Board) have made clear that the role of the ALJ in cases such as this is to conduct a "de novo" review as to the facts related to the basis for the exclusion and the facts related to the existence of aggravating and mitigating factors identified at 42 C.F.R. � 1001.102. See Joann Fletcher Cash, DAB No. 1725 (2000), fn. 6, and cases cited therein. The regulation specifies that I must determine whether the length of exclusion imposed is "unreasonable." 42 C.F.R. � 1001.2007(a)(1). The Board has explained that in determining whether a period of exclusion is "unreasonable," I am to consider whether such period falls "within a reasonable range." Cash, fn. 6. The Board cautions that whether I think the period of exclusion too long or too short is not the issue. I am not to substitute my judgment for that of the I.G. and may only change the period of exclusion in limited circumstances.

My reading of 42 C.F.R. � 1001.102 is that with a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion of five years. Pursuant to 42 C.F.R. � 1001.102(d), one prior conviction for conduct that would cause mandatory exclusion under section 1128(a) of the Act increases the minimum period of exclusion to 10 years and two prior convictions automatically causes permanent exclusion.

The five-year and ten-year minimum exclusions may only be extended if the I.G. can point to evidence that one or more of the aggravating factors specified at 42 C.F.R. � 1001.102(b) are present. The regulations do not limit the additional period of exclusion the I.G. may impose based upon the presence of aggravating factors. The regulations also do not specify how much of an extension is warranted by the existence of an aggravating factor. The Board has indicated that it is not the number of aggravating factors that is determinative, rather, it is the quality of the circumstances, whether aggravating or mitigating, which is controlling in analyzing these factors. Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

Section 1001.102 provides that when aggravating factors justify an exclusion of more than the mandatory minimum period, then the I.G. may consider any of the three specified mitigating factors if they are shown to exist. In John (Juan) Urquijo, the Board suggested that the I.G.'s failure to consider a mitigating factor amounts to an abuse of discretion. The Board also made clear in Urquijo that: if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal; or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum.

Thus, my determination of whether or not the exclusionary period in this case is unreasonable hinges on three-points: (1) whether the period of exclusion is within the reasonable range; (2) whether the I.G. has shown the existence of aggravating factors; and, (3) whether the Petitioner has shown that there is a mitigating factor that the I.G. failed to consider.

The I.G. found two aggravating factors existed that justified an extended period of exclusion in this case: (a) the acts for which Petitioner was convicted resulted in financial loss to a government program of $5,000 or more; and (b) the acts for which Petitioner was convicted occurred over a period of one year or more.

a. The I.G. has not shown by a preponderance of the evidence that Petitioner's misconduct continued for a period of more than one year.

The I.G. argues that Petitioner's misconduct occurred over a period of two and one-half years from January 4, 1998 through about September 1, 2000. The I.G. relies upon two exhibits, I.G. Exhibits 2 and 6, to support its argument. I.G. Exhibit 2 is the criminal information filed against Petitioner in the District Court of Oklahoma County Oklahoma. I.G. Exhibit 6 is the unsigned investigator's report detailing the allegations against Petitioner. I.G. Exhibit 5 is an earlier investigator's report. These documents contain unproven allegations and do not, individually or together prove the allegations against Petitioner by a preponderance of the evidence. The I.G. also submitted I.G. Exhibit 1, a document titled as "Affidavit of Probable Cause for Arrest Warrant for Thomas D. Harris and Roger Wadley." The affiant asserts that there is probable cause for Petitioner's arrest, but this document also fails to establish by a preponderance of the evidence that Petitioner's conduct continued for a period of more than one year.

I.G. Exhibit 3, Petitioner's plea agreement in the District Court of Oklahoma County, Oklahoma, and I.G. Exhibit 4, the Order of Judge Deason deferring imposition of judgment and sentence based on Petitioner's pleas of guilty, establish beyond reasonable doubt that Petitioner engaged in Medicaid fraud and conspiracy. Page 4 of I.G. Exhibit 3 establishes that Petitioner pled guilty to misconduct occurring only from September 1998 through May 1999, a period of less than one year.

Based upon the foregoing facts, I find that the I.G. proved that Petitioner's conduct occurred during the period September 1998 through May 1999, but not for more than one year. Accordingly, I conclude that the I.G. has not proved by a preponderance of the evidence that Petitioner's criminal conduct occurred during a period of more than one year.

b. The crimes of which Petitioner was convicted resulted in financial loss to government in excess of $5,000.

Page 4 of I.G. Exhibit 3 shows that Petitioner knowingly submitted false claims to Medicaid and Medicare "in an aggregate amount of more than $2,500 and sometimes less than $2,500." Judge Deason ordered restitution of $141,607.09. I.G. Ex. 4, at 2. I infer from these facts that the loss to the government exceeded $5,000. While Petitioner did not specifically plead guilty to causing a loss to the government in excess of $5,000, I may infer from the amount of the restitution ordered that the loss to the government exceeded $5,000. See, e.g., Thomas P. Whitfield, D.P.M., DAB CR539 (1998); Valerie Baker, DAB CR882 (2002); Natawadee Steinhouse, M.D., DAB CR859 (2002). I also note that Petitioner does not deny in his response brief that the loss to the government was in excess of $5,000; rather he argues that when he pays the restitution there will be no loss to the government.

c. Payment of restitution is not a mitigating factor.

Petitioner argues that if he pays restitution, there will be no loss to the government. However, 42 C.F.R. � 1001.102(b)(1) specifically provides that restitution may not be considered when considering the aggravating factor of a loss of $5,000 or more. Further, restitution is not a mitigating factor listed under 42 C.F.R. � 1001.102(c). See also Stacy Ann Battle, D.D.S., and Stacy Ann Battle, D.D.S., P.C., DAB No. 1843 (2002).

Accordingly, I conclude that Petitioner was convicted of a program related crime within the meaning of the Act and must be excluded from participation in Medicare, Medicaid or other Federal health care programs for a minimum period of five years. The I.G. has proven the aggravating factor that Petitioner's conduct caused loss to the government in excess of $5,000. The I.G. did not prove by a preponderance of the evidence that Petitioner's conduct occurred over a period of more than one year. Because the I.G. failed to prove one aggravating factor, I must reassess the period of exclusion. I conclude that a ten-year exclusion (the mandatory five-year exclusion plus a five-year extension) is within a reasonable range. Petitioner has not proven any mitigating factor authorized under the regulation.

For the foregoing reasons, I conclude that Petitioner shall be excluded from participation in Medicare, Medicaid and all other Federal health care programs for ten years.

Keith W. Sickendick

Administrative Law Judge