CASE | DECISION | JUDGE

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Isaac Aaron Sultan,

Petitioner,

DATE: November 28, 2001
                                          
             - v -

 

The Inspector General

 

Docket No.C-00-003
Decision No. CR839
DECISION
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DECISION

I modify the length of the exclusion that the Inspector General (I.G.) imposed against Petitioner, Isaac Aaron Sultan, M.D., from a term of 15 years to a term of seven years.

I. Background

Petitioner is a neurologist who practiced medicine in Rancho Mirage, California. On July 8, 1999, the I.G. sent a notice to Petitioner in which she advised him that he was being excluded from participating in Medicare and other federally funded health care programs, including State Medicaid programs. The I.G. advised Petitioner that he was being excluded pursuant to section 1128(a)(1) of the Social Security Act (Act), for a term of 15 years, based on Petitioner's conviction of a criminal offense related to the delivery of an item or service under Medicare and State Medicaid programs.

Petitioner requested a hearing in order to challenge the length of the exclusion. The case originally was assigned to another administrative law judge for a hearing and a decision. It was reassigned to me recently due to that judge's illness. The I.G. moved for a decision based on her written submission. Petitioner opposed the motion. Neither party requested that I conduct a hearing in person.

The I.G. submitted proposed exhibits in support of her motion, which are identified as I.G. Exhibits (I.G. Exs.) 1-8. Petitioner submitted proposed exhibits with his response to the I.G.'s motion which are identified as Petitioner's Exhibits (P. Exs.) A-S. Petitioner offered P. Ex. T as a subsequent submission. In the absence of objections from either party, I am receiving these exhibits into evidence.

Certain basic facts of this case are not in dispute. On February 4, 1997, Petitioner pled guilty to four counts of mail fraud related to his medical practice. I.G. Exs. 4, 6. The mail fraud was an element of a scheme by Petitioner to defraud Medicare and MediCal, the California Medicaid program. Petitioner's scheme consisted of systematically claiming reimbursement for patients' brief office visits as if they involved more complicated procedures that were entitled to a higher level of remuneration than were the office visits. I.G. Ex. 4, at 3-4. The scheme occurred from approximately 1991 through 1996. Id., at 2.

No specific proof was offered in Petitioner's criminal case of the dollar amount of Petitioner's fraud against Medicare and MediCal. Petitioner agreed to pay restitution in the amount of $118,749. I.G. Ex. 6, at 1. In his plea agreement, Petitioner agreed that, for sentencing purposes, an appropriate estimate of the loss caused by Petitioner was $120,000. I.G. Ex. 3, at 2. The United States Attorney agreed that a loss in excess of that amount was not readily provable. Id.

Petitioner's sentence included - in addition to paying restitution - a period of six months in a home detention program and a three year period of supervised release. I.G. Ex. 6, at 1. Petitioner was required to be monitored electronically during his home detention. Id. His sentence also included the requirement that he perform 3,000 hours of community service and that, during the period of his supervised release, he not provide medical services to any Medicare beneficiary, MediCal recipient, or any participant of any insurance program that receives federal funding. P. Ex. R, at 1.

On December 1, 1997, the Medical Board of California filed an accusation against Petitioner in which it charged him with unprofessional conduct. I.G. Ex. 7. The causes for disciplinary action that were recited in the accusation included Petitioner's February 4, 1997 guilty plea to charges of mail fraud. Id., at 4. Additional causes were drawn from the criminal information that had been filed against Petitioner and which led to his guilty plea. Id., at 5-8. On February 18, 1999, Petitioner entered into a stipulation in which he agreed to surrender his license to practice medicine in California. I.G. Ex. 8. The stipulation resolved the disciplinary proceeding that had been brought against Petitioner. Id. Petitioner did not admit that he was liable for the charges that had been made against him. Id., at 3.

II. Issue, findings of fact and conclusions of law

A. Issue

Petitioner has not denied that he was convicted of a criminal offense related to the delivery of items or services under Medicare or a State Medicaid program within the meaning of section 1128(a)(1) of the Act, or that a basis exists to exclude him pursuant to that section. Nor does Petitioner contest that the I.G. must exclude him for at least five years. See Act, section 1128(c)(3)(B). He argues only that the length of the exclusion - 15 years - is unreasonable.

The issue that remains in this case is whether the 15-year exclusion that the I.G. imposed is unreasonable.

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 separately numbered heading. I discuss each Finding in detail.

1. An exclusion for more than five years may be reasonable, pursuant to section 1128(a)(1) of the Act, in a case where there are aggravating factors that are not offset by mitigating factors.

The Secretary of the U.S. Department of Health and Human Services (Secretary) has published regulations which govern the length of exclusions that are imposed pursuant to section 1128 of the Act. 42 C.F.R. Part 1001. The regulation which establishes criteria to govern the length of an exclusion that is imposed under section 1128(a)(1) is 42 C.F.R. § 1001.102. This regulation identifies "aggravating" factors which may be used, if present in a case, as a basis to lengthen an exclusion beyond the five-year minimum period and "mitigating" factors which may be used, if present in a case, to offset any aggravating factors that are established. 42 C.F.R. § 1001.102(b), (c).

The regulation makes it clear that only those factors that it identifies as either aggravating or mitigating may be considered to determine whether an exclusion of more than five years is reasonable in a case involving section 1128(a)(1). The aggravating and mitigating factors operate as rules of evidence in such a case. Evidence which does not relate to an identified aggravating or mitigating factor is irrelevant to determining the length of an exclusion and may not be considered.

2. An excluded individual has a right to a de novo hearing.

An individual who is excluded has a right to a hearing before an administrative law judge. Such a hearing is conducted pursuant to section 205(b) of the Act. That section has been interpreted on numerous occasions to afford a party who is entitled to a hearing a de novo hearing and an independent decision by an administrative law judge.

That is not to suggest that the administrative law judge is free to ignore entirely the determination that is made by the I.G. The I.G. has expertise in making exclusion determinations and her determinations deserve to be respected. The I.G.'s determination should be sustained as reasonable if that determination falls within a reasonable range of possible exclusions given the evidence that is presented. However, the administrative law judge must evaluate independently the evidence relating to the aggravating and mitigating factors that are set forth in the regulations. If the administrative law judge concludes, based on his or her independent and de novo evaluation of the evidence, that the exclusion imposed by the I.G. departs significantly from that which the administrative law judge decides is reasonable, then the administrative law judge may modify the length of the exclusion to assure that the exclusion falls within a reasonable range of exclusions.

3. The I.G. established the presence of five aggravating factors.

The I.G. established the presence of five aggravating factors in this case. They are as follows:

a. The acts resulting in Petitioner's conviction resulted in a loss of more than $1,500 to a government program.

It is an aggravating factor if the acts that resulted in an excluded individual's conviction, or similar acts, resulted in a financial loss of $1,500 or more to a government program. 42 C.F.R. § 1001.102(b)(1). Petitioner's crimes resulted in losses being incurred by Medicare and/or MediCal that exceeded $1,500. Losses in excess of $1,500 may be inferred from Petitioner's admission in his guilty plea of having caused federal programs to lose about $120,000. I.G. Ex. 3, at 2. Losses in excess of $1,500 may also be inferred from the fact that Petitioner was sentenced to pay restitution of $118,749. I.G. Ex. 6, at 1.

b. The acts resulting in Petitioner's conviction took place over a period of more than one year.

An aggravating factor is present if the acts that result in a conviction or similar acts occur over a period of a year or more. 42 C.F.R. § 1001.102(b)(2). In this case, Petitioner admitted to engaging in criminal conduct over a period of more than one year. Petitioner pled guilty to a criminal scheme that took place from about 1991 through about 1996. I.G. Ex. 4, at 2.

c. Petitioner's sentence included a period of incarceration.

It is an aggravating factor if an excluded individual's sentence for his crime includes a period of incarceration. 42 C.F.R. § 1001.102(b)(5). The term "incarceration" is defined under the regulations that implement section 1128 of the Act as being any type of confinement with or without supervised release, including community confinement, house arrest, and home detention. 42 C.F.R. § 1001.2(d). Petitioner was incarcerated inasmuch as his sentence included a six-month period of home detention. I.G. Ex. 6, at 1.

d. Petitioner was overpaid $1,500 or more by Medicare and MediCal as the result of improper billings.

An aggravating factor is present if an excluded individual has been overpaid in the amount of $1,500 or more by Medicare or a State Medicaid program as a result of that individual's intentional improper billings. 42 C.F.R. § 1001.102(b)(7). The evidence in this case does not establish precisely how much Petitioner was overpaid as a result of the false reimbursement claims that he made. It is reasonable to infer, however, that he was overpaid more than $1,500 by the fact that he agreed to pay restitution in the amount of $118,749. I.G. Ex. 6, at 1.

e. Petitioner was subject to other adverse administrative action.

It is an aggravating factor if an excluded individual has been the subject of any other adverse action by any federal, State, or local government agency or board, if the adverse action is based on the same set of circumstances that are the basis for the imposition of that individual's exclusion. 42 C.F.R. § 1001.102(b)(9). In this case, Petitioner was the subject of other adverse State action that arose from the same facts that led to his conviction. That consisted of the disciplinary proceeding that was brought against him by the Medical Board of California. I.G. Ex. 7.

Petitioner argues that he surrendered his license to practice medicine in California voluntarily in order to settle the State administrative action against him. He asserts that the State proceeding was not an adverse action within the meaning of 42 C.F.R. § 1001.102(b)(9) because the Medical Board of California made no findings of culpability.

The term "adverse action" is not defined by 42 C.F.R. § 1001.102(b)(9). If the regulation is considered in isolation, it might be logical to read it as requiring a finding of culpability in order for there to be an adverse action against an individual. However, the regulation is not an isolated regulation. It is part of a broader set of regulations which implement the subparts of section 1128 of the Act. The Act and regulations make it clear, in contexts other than exclusions imposed pursuant to section 1128(a)(1) of the Act, that settling an administrative proceeding by surrendering a license to provide health care should have the same significance and consequences as does a finding of culpability and a mandated loss of license. For example, a separate basis for exclusion exists under section 1128(b)(4) of the Act where an individual loses his or her license to provide health care for reasons related to that individual's professional competence, professional performance, or financial integrity. The Act provides, at section 1128(b)(4)(B), that a surrender of a license in order to settle an administrative proceeding is a basis for an exclusion. Under section 1128(b)(5) of the Act, an individual may be excluded if that individual is excluded or suspended from a State health care program as a consequence of a State administrative proceeding. Regulations make it plain that exclusion or suspension includes voluntary withdrawal from a State health care program in the face of an adverse administrative proceeding. 42 C.F.R. § 1001.501(a)(2).

It would make no sense to read 42 C.F.R. § 1001.102(b)(9) as distinguishing a settled proceeding that results in a loss of license from a loss of license resulting from a finding of culpability when all other parts of the Act and regulations which address such circumstances do not make that distinction. For that reason, I conclude that an adverse action under 42 C.F.R. § 1001.102(b)(9) includes the circumstance where an excluded individual surrenders his or her license to provide care as a way of settling an administrative proceeding that is based on the facts that resulted in that individual's conviction of an offense covered by section 1128(a)(1) of the Act.

4. Petitioner did not establish the presence of any mitigating factor.

Petitioner offered no evidence which establishes any of the mitigating factors that are identified at 42 C.F.R. § 1001.102(c). Petitioner has offered numerous statements from professional associates and others attesting to his skill as a physician and his dedication to his profession, his patients, and his community. See P. Exs. B-J, N, O. I admitted these statements in order to complete the evidentiary record of this case. However, they are irrelevant to my decision in that none of them contain evidence that relates to any mitigating factor. Petitioner also has offered evidence to show that he has resumed practicing medicine in New York with the approval of New York State authorities. Such evidence also is irrelevant inasmuch as it does not relate to a mitigating factor. Petitioner also has offered evidence concerning the personal hardship he has experienced since his conviction, including his diagnosis of cancer. This evidence also is not relevant.

Petitioner also argues that he has cooperated with prosecuting authorities. That may be true, but that cooperation does not establish a mitigating factor. A mitigating factor may be established pursuant to 42 C.F.R. § 1001.102(c)(3)(i),(ii), or (iii) where an individual's cooperation results in: others being convicted or excluded from federally financed health care programs; additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses; or, imposition of civil money penalties or assessments. Petitioner established that none of these consequences flowed from his cooperation.

5. An exclusion of 15 years is unreasonable. An exclusion of seven years is reasonable.

Although 42 C.F.R. § 1001.102(b) and (c) establish the sole factors which may be considered in deciding whether an exclusion of more than five years is reasonable, these subsections do not prescribe the weight which is to be given to any factor. The regulation contains no formula prescribing any exclusion length based on the presence of aggravating factors or on the absence of mitigating factors beyond the five-year minimum period that is required by the Act itself. The regulation merely identifies the factors which may be used to lengthen an exclusion beyond the minimum period.

I must look to the purpose of the Act in order to decide what is the reasonable length of an exclusion where aggravating or mitigating factors are present, in the absence of any statement in the regulation as to how much weight must be given to an aggravating or mitigating factor. Section 1128 of the Act is remedial. Its purpose is not to punish the excluded individual, but to protect federally funded health care programs and the beneficiaries and recipients of program funds from an individual whose conduct establishes him or her not to be trustworthy. In assessing the length of any exclusion that is imposed under section 1128, the ultimate issue that must be addressed is: how long of an exclusion is reasonably necessary to protect programs and their beneficiaries and recipients from an untrustworthy individual?

An individual may not be excluded arbitrarily for a period of more than five years simply because aggravating factors are present. The evidence that pertains to those factors must be weighed in order to establish the degree of untrustworthiness that is manifested by the excluded individual. An exclusion that is not based on what the evidence shows about the trustworthiness of the excluded individual may be arbitrary and unreasonably punitive.

In this case, the record does not establish a basis for the extraordinarily long exclusion that the I.G. determined to impose. The I.G. has imposed what is tantamount to a lifetime exclusion against Petitioner. Yet, the evidence relating to aggravating factors does not suggest that Petitioner is so untrustworthy as to merit so lengthy an exclusion.

The evidence pertaining to aggravating factors shows that Petitioner's crimes were relatively less serious than crimes which have supported much shorter exclusion periods in other cases. The amount of money that Petitioner converted to his use - while substantial - was substantially less than amounts that have been used to determine shorter exclusions in other cases. The relatively less serious nature of Petitioner's crime is reflected in the sentence which Petitioner received which, while including incarceration, did not include a prison term.

I am not suggesting that the evidence in this case shows Petitioner to be trustworthy. Indeed, the evidence which relates to aggravating factors establishes that Petitioner perpetrated a serious crime over a long period of time. That justifies an exclusion of more than five years. But, I find that the exclusion that the I.G. imposed is beyond a reasonable range of exclusions in light of all of the evidence that relates to aggravating factors and I modify the exclusion accordingly.

The I.G. argues that Petitioner's criminal scheme unfolded over a long period of time and asserts that this is evidence of a high degree of untrustworthiness. I agree with the I.G. that the length of time over which Petitioner engaged in fraud is evidence of lack of trustworthiness. In this case, Petitioner committed acts of fraud for nearly five years.

However, other evidence that the I.G. relies on as evidence of untrustworthiness is not impressive. Although it is true that Petitioner was incarcerated, his sentence was neither lengthy nor severe. Home confinement may be incarceration under the applicable regulation, but it does not suggest the same level of untrustworthiness as a prison sentence. Moreover, in this case, Petitioner's home confinement was for a brief period of six months.

Most significantly, while the amount of Petitioner's fraud was substantial it does not rise to the level that I have seen in many cases in which the I.G. determined to impose substantially shorter periods of exclusion. For example, in William D. Neese, M.D., DAB CR467 (1997), the I.G. excluded a physician for a period of 10 years. In that case, the petitioner had defrauded a State Medicaid program for two years and had committed fraud totaling about $600,000. It is hard to reconcile the exclusion that the I.G. imposed in Neese with the much lengthier exclusion that the I.G. imposed here, where the amount of Petitioner's fraud was only about 1/5 as great as occurred in that case.

Furthermore, some of the aggravating factors which exist in this case do not, when examined closely, add anything substantive to the evidence of lack of trustworthiness. The fact that Petitioner may have been overpaid more than $1,500 merely is a restatement of the fact that he perpetrated fraud in excess of $1,500. And, the adverse administrative action that was brought against Petitioner by the State of California was based on the identical facts that supported the criminal charges against Petitioner. Thus, the action does not suggest a higher degree of untrustworthiness so much as it shows that the State of California was concerned that Petitioner was untrustworthy based on the same evidence as was the basis for the criminal charge.

I note that the federal district court judge who sentenced Petitioner recommended that he be excluded only for five years provided he pay the full restitution that was imposed. P. Ex. T. I do not rely on this recommendation for the decision that I have made in this case. The recommendation is not evidence of a mitigating factor. Moreover, it is a conditional recommendation, premised on Petitioner paying the full restitution that was ordered by the judge. Petitioner has not yet paid that restitution.

III. Conclusion

I conclude that an exclusion of 15 years is outside of a reasonable range of exclusions given the evidence that relates to aggravating factors. The evidence suggests that an exclusion in the range of from five to ten years is reasonable. Therefore, I modify Petitioner's exclusion to a term of seven years.

JUDGE
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Steven T. Kessel

Administrative Law Judge

 

CASE | DECISION | JUDGE