SUBJECT:

Ralph J. Sharow, D.M.D.,

Petitioner,

The Inspector General.

DECISION

I uphold the exclusion of Petitioner, Ralph J. Sharow, D.M.D., from participation in Medicare, Medicaid, and all federal health care programs for 20 years. I find a basis for the exclusion, and I conclude that the 20-year length of the exclusion is reasonable.

I. Background

Petitioner was convicted of fraudulently claiming payment for health care service to beneficiaries of health benefit programs including TRICARE ⁽¹⁾ and private insurers - a felony. Inspector General's exhibit (I.G. Ex.) 2, at 7. Section 1128(a)(3) of the Social Security Act (Act) requires the Secretary of Health and Human Services to exclude from federal health care programs any person convicted of a felony offense related to the delivery of an item or service under any health care program financed in whole or in part by any federal, state or local government agency. The exclusion must be for a minimum period of five years. 42 C.F.R. § 1001.102(a). The Inspector General may extend the period of exclusion beyond the five-year minimum period when the conviction is accompanied by aggravating factors specified in the regulations. 42 C.F.R. § 1001.102(b). In this case, the Inspector General alleges Petitioner's conviction is accompanied by four aggravating factors which justify extending Petitioner's exclusion for 15 years. Inspector General's brief at 3-4.

Petitioner neither disputes that he was convicted as alleged nor that his conviction provides the basis for his exclusion from federal health programs. See Petitioner's response brief at 2. Petitioner concedes also that aggravating factors are present, but Petitioner avers, the length of the exclusion period is unreasonable because the Inspector General failed to consider mitigating factors which Petitioner feels are applicable to his case. Petitioner's response brief at 4.

Petitioner's request for a hearing is dated July 13, 2003. It stems from the Inspector General's letter, dated June 30, 2003, notifying Petitioner of the exclusion. Because Petitioner, who was incarcerated at the time, indicated that he was unable to participate in a prehearing telephone conference, I required the parties to confer through the mail and to file written reports indicating the manner in which they wished me to hear and decide this case. The Inspector General indicated in her Hearing Report filed November 25, 2003, that it is appropriate for me to decide this matter based on the parties' written submissions and supporting documents, without an oral hearing. Petitioner assented to my establishment of a briefing schedule for resolving this case, albeit with reservations concerning his lack of resources, preference for utilizing the alternative dispute resolution, and some procedural concerns. See, Petitioner's letter dated December 20, 2003; Petitioner's Hearing Report dated December 9, 2003. I addressed Petitioner's concerns in my Order Scheduling Motions and Briefs dated December 15, 2003 and my ruling issued January 9, 2004. Despite the opportunity to do so, however, Petitioner did not object to proceeding without an oral hearing, nor did he offer any rationale why an oral hearing would be necessary.

In accordance with my schedule for filing briefs, on January 13, 2004 I received The Inspector General's Brief in Support of Motion for Summary Affirmance (Inspector General's brief), accompanied by four marked exhibits (I.G. Exs. 1-4). I received Petitioner's Response to the Inspector General's Brief in Support of Motion for Summary Affirmance (Petitioner's response brief) on February 17, 2004. I received The Inspector General's Reply to Petitioner's Response (Inspector General's reply brief) on April 13, 2004. Petitioner filed Petitioner's Response to the Inspector General's Reply (Petitioner's sur-reply brief) which I received May 4, 2004. Petitioner did not object to the Inspector General's exhibits, so I admit I.G. Exs. 1-4.

II. Issues

Whether there is a basis for the Inspector General to exclude Petitioner from federal health care programs, and whether the length of the period of exclusion is reasonable.

III. Discussion

A. Petitioner's conviction of fraudulently claiming payment for providing health care services to beneficiaries of federally funded health benefit programs is an appropriate basis for his exclusion from federal health care programs.

Petitioner was convicted of fraudulently claiming payment for providing health care services to beneficiaries of health benefit programs including TRICARE and private insurers - a felony. I.G. Exs. 2, 3. Section 1128(a)(1) of the Act requires the Secretary of Health and Human Services to exclude from participation in any federal health care program, as defined in section 1128B(f) of the Act, any individual convicted of a criminal offense relating to the delivery of a health care item or service. Moreover, Petitioner does not dispute that he was convicted and that the conviction provides the basis for his exclusion from federal health programs. Petitioner's response brief at 2. I conclude, therefore, that there is a basis for the Inspector General to exclude Petitioner from participation in federal health care programs.

B. The length of the period of Petitioner's exclusion from federal health care programs, 20 years, is reasonable.

As I discussed above, the Inspector General lengthened the mandatory five-year exclusion period by 15 years, citing four aggravating factors. The aggravating factors that can serve as a basis for lengthening the period of exclusion are specified at 42 C.F.R. § 1001.102(b). The regulations provide also that only if any of those aggravating factors justifying an exclusion longer than five years are present may certain 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).

1. There are four aggravating factors which provide a basis for the Inspector General to extend the period of exclusion beyond the five-year minimum period.

The Inspector General asserts that there are four aggravating factors that justify the extension of Petitioner's exclusion:

(1) Petitioner's fraud resulted in financial loss to a government program of more than $5,000-Petitioner defrauded TRICARE and private insurers of approximately $200,000 (I.G. Exs. 2, 3);

(2) The fraud was committed over a period longer than one year-Petitioner's fraudulent conduct occurred from at least January 1, 1994 to approximately April 1997 (I.G. Ex. 2, at 4);

(3) The sentence imposed by the court included incarceration-Petitioner was sentenced to 27 months incarceration (I.G. Ex. 3); and

(4) Petitioner was convicted of another offense and a related adverse action-At the time of his conviction for health care fraud Petitioner was convicted also of income tax evasion (I.G. Ex. 3), and as a result of his convictions the New Jersey State Board of Dentistry revoked Petitioner's license to practice dentistry (I.G. Ex. 4).

Moreover, Petitioner does not challenge that any of the forgoing aggravating facts are present, and Petitioner has conceded that there are "several aggravating circumstances in petitioner's case." Petitioner's response brief at 4. I conclude, therefore, that there are four aggravating circumstances present in this case which permit the Inspector General to extend the period of exclusion beyond the five-year minimum exclusion.

2. There are no mitigating factors present that may be considered as a basis for reducing the period of exclusion.

The entirety of Petitioner's argument is that the Inspector General failed to consider mitigating factors that Petitioner contends justify a shorter period of exclusion. The mitigating factors which may be considered are specified at 42 C.F.R. § 1001.102(c), and the regulation restricts consideration to "only" the factors listed therein. The only factor provided in section 1001.102(c) that Petitioner asserts is present in his case is consideration of a court's determination that a mental, emotional or physical condition reduced a petitioner's culpability. Petitioner was unable, however, to demonstrate that the court in his case made any such determination. Petitioner asserts that the requirement in the court's Judgement of Conviction (I.G. Ex. 3, at 3) that Petitioner participate in a mental health program if directed to by the U.S. Probation Office is evidence that the court determined Petitioner had reduced culpability. It is obvious, however, that the court's prospective condition that Petitioner cooperate in a mental health program is general in nature, and it cannot reasonablely be interpreted to be the court's determination that Petitioner had a mental condition that reduced his culpability. Similarly unavailing is Petitioner's contention that the court and the U.S. Probation Office "observed [during the case] that the defendant [Petitioner] was under severe strain as a result of a demanding wife, who was a partner with defendant in his dental practice, and who coerced him into the criminal acts for which he pled guilty," and Petitioner's claim that the court noted "from the bench . . . 'Dr. Sharo, I know what you went through with your spouse and I am sorry it occurred.'" Petitioner's response brief at 3. As sympathetic as the court and Probation Office may have been to Petitioner having been under the "domination and control" of his wife (Id.), such sympathy does not constitute a determination that the strain Petitioner's wife caused him was a mental condition that reduced his culpability.

Petitioner argues also that his cooperation with authorities in liquidating his assets to pay restitution to his fraud victims; paying overdue taxes with interest without negotiation; voluntarily submitting his dental license to the New Jersey State Board of Dentistry; seeking and receiving mental health counseling; and attempting to atone for his crimes and prepare himself to participate in society again as an active professional should be considered in mitigation. Petitioner's response at 4. Petitioner asserts that he should have been given credit for these corrective activities and that the Inspector General has attacked them. Petitioner's sur-reply brief at 2-3.

While I agree with Petitioner that he is to be commended for and supported in his corrective and rehabilitative efforts, that spirit cannot override the unambiguous limitation of what may be considered mitigating factors as provided in section 1001.102(c). None of the actions of a corrective and rehabilitative nature that Petitioner mentions in his briefs may be considered as mitigating factors; therefore, I must conclude that there are no mitigating factors to be considered in this case.

3. The 20-year period of exclusion imposed by the Inspector General falls within a reasonable range.

To review the reasonableness of the length of the exclusion, I consider, de novo, the facts forming the basis for the exclusion and the facts supporting the aggravating and mitigating factors. See Joan Fletcher Cash, DAB No. 1725, at n.6 (2000). As provided by 42 C.F.R. 1001.2007(a)(1), I am required to determine whether the length of the exclusion is "unreasonable." An appellate panel of the Departmental Appeals Board (Board) has interpreted this to mean that an administrative law judge must consider whether the period imposed by the Inspector General falls "within a reasonable range." Cash, at n. 6. The Board has indicated also that the number of aggravating factors is not determinative, but the quality of the facts-aggravating or mitigating-is paramount in analyzing the factors. See Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

My assessment of the nature of the aggravating factors in this case is that they are serious enough to support a departure from the mandatory five-year exclusion period. The amount of the financial loss to the government program was high, and the total amount Petitioner falsely claimed, when the loss to the private insurers defrauded is added, is very high. The fact Petitioner's fraud was committed over approximately three years exhibits a high degree of untrustworthiness. The seriousness of Petitioner's crimes are highlighted by the significant prison sentence imposed by the court and the ancillary revocation by New Jersey State Board of Dentistry of Petitioner's license to practice dentistry. I conclude that these factors justify a lengthy period of exclusion from federal health care programs, and I find no basis for concluding that the 15-year extension of the mandatory period is outside of the reasonable range of exclusion periods.

IV. Conclusion

For the reasons discussed above, I conclude that the Inspector General properly excluded Petitioner from participation in all federal health care programs, and the length of the period of the exclusion, 20 years, is reasonable.

Alfonso J. Montano

Administrative Law Judge

1. TRICARE is the Department of Defense's health care program; it is primarily for active duty members of the United States armed forces and their families.