SUBJECT:

Dan Anderson,

Petitioner,

The Inspector General.

DECISION

I find that Dan Anderson, Petitioner, is subject to a mandatory minimum period of exclusion of five years from participation in Medicare, Medicaid, and all other federally funded health care programs under section 1128 (a)(1) of the Social Security Act (Act). In addition, I conclude that the Inspector General's (I.G.) determination to exclude Petitioner for a period of 15 years is not unreasonable.

BACKGROUND

At all times relevant to this case, Petitioner was President and Chief Executive Officer of Baptist Medical Center (Baptist), located in Kansas City, Missouri. In July of 1998, Petitioner was indicted by a federal grand jury, charging Petitioner, and others, with conspiracy to commit kickback and bribery violations. The indictment alleged that from approximately the fall of 1985 through January of 1995, Petitioner in his capacity as President and Chief Executive Officer of Baptist, instructed other Baptist employees to offer and pay bribes to Robert C. LaHue, M.D. and Ronald L. LaHue, M.D. (LaHue brothers) in exchange for their referral of Medicare patients to Baptist.

In April of 1999, after a jury trial, Petitioner was convicted of conspiracy (18 United States Code (U.S.C.) § 371) and illegal remuneration and aiding and abetting (42 U.S.C. § 1320 (a) 7(b) (2) (A) and (B) and 18 U.S.C. § 2). In October of 1999, Petitioner was sentenced to 51 months in jail and fined $75,000.

By letter dated January 31, 2000, the Office of the Inspector General for the Department of Health and Human Services (HHS), notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of 15 years. The I.G. imposed this exclusion pursuant to section 1128 (a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1), based on Petitioner's conviction in the U.S. District Court, District of Kansas, of a criminal offense related to the delivery of a health care item or service under the Medicare program.

Petitioner filed a request for hearing to appeal the decision of the I.G. to exclude him. The case was assigned to me for hearing and decision. I held an in-person hearing in Kansas City, Missouri on December 19 - 20, 2000, in which I heard the testimony of various witnesses. Petitioner offered into evidence Petitioner's Exhibits 1 - 43 (P. Exs. 1 - 43). I received into evidence Petitioners exhibits except for P. Exs. 1, 2, 9 - 11, 13 - 18, 22 - 25, 29 - 40, and 42 which were withdrawn and P. Ex. 41 which was not admitted. The I.G. offered into evidence I.G. Exhibits 1 - 19 (I.G. Exs. 1 - 19). I received into evidence I.G. Exs. 1-19, except for I.G. Exs. 12 and 13 which were withdrawn, and I.G. Ex. 17 which was not admitted. A Transcript (Tr.) of the proceeding was made available to both parties. Petitioner submitted a posthearing brief (P. Br.), and a reply brief (P. Rep. Br.). The I.G. also submitted a posthearing brief (I.G. Br.), and a reply brief (I.G. Rep Br.).

ISSUES

The issues in this case are: (1) whether the I.G. had a basis to exclude Petitioner under section 1128(a)(1) of the Act; and (2) whether a 15 year exclusion of Petitioner is unreasonable.

APPLICABLE LAW

Section 1128(a)(1) of the Act authorizes the Secretary of HHS to exclude from participation in any federal health care program (as defined in section 1128B (f) of the Act):

[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII or under any State health care program.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(1) of the Act shall be for a minimum period of not less than five years.

42 Code of Federal Regulations (C.F.R.) § 1001.102(b) list the factors that may be considered to be aggravating and a basis for lengthening the minimum mandatory five-year period of exclusion. In this case the I.G. relies on three of these factors: (1) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; (2) the sentence imposed by the court included incarceration; (3) the acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more entities of $1,500 or more.

If there are aggravating factors present which justify an exclusion longer than five years, certain mitigating factors under 42 C.F.R. § 1001.102(c) may be considered for reducing the period of exclusion. However, the period of exclusion may not be mitigated to less than five years.

PETITIONER'S ARGUMENTS

Petitioner maintains that the I.G. should have imposed his exclusion pursuant to the permissive authority of section 1128(b)(7), rather than the mandatory authority pursuant to section 1128(a)(1). Petitioner also argues that the I.G. failed to establish the presence of aggravating factors which justify the 15-year period of exclusion. Petitioner further contends that he has established the presence of mitigating factors which warrant a reduction of the period of the exclusion.

FINDING OF FACTS 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 separate numbered paragraph. I discuss my findings in the discussion section below.

1. At all times relevant to this case, Petitioner was President and Chief Executive Officer of Baptist Medical Center located in Kansas City, Missouri. I.G. Ex. 5.

2. Petitioner caused Baptist employees to offer and pay bribes to the Lahues brothers in exchange for their referral of Medicare patients to Baptist from approximately 1985 through 1995. I.G. Ex. 5.

3. On April 5, 1999, in the United States District Court, District of Kansas, a jury found Petitioner guilty of violating the Anti-Kickback Statute, 42 U.S.C. §1320a-7b; section 1128B of the Act. I.G. Ex. 7.

4. By letter dated January 31, 2000, Petitioner was notified by the I.G. that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a 15-year period pursuant to section 1128(a)(1) and section 1128(c)(3)(B) of the Act. I.G. Ex. 1.

5. Under section 1128(a)(1) of the Act, the Secretary of the Department of Health and Human Services (Secretary)is required to exclude from participation in Medicare, Medicaid, and all federal health care programs, as defined in section 1128B(f) of the Act, any individual that has been convicted of a criminal offense related to the delivery of a health care item or service under Medicare or under any State health care program. 42 U.S.C. § 1320a-7(a)(1).

6. Petitioner was "convicted" of a criminal offense as is defined in section 1128(i) of the Act.

7. Petitioner's criminal offense is related to the delivery of a health care item or service under the Medicare/Medicaid programs within the meaning of section 1128(a)(1) of the Act.

8. The I.G. must exclude Petitioner under the mandatory exclusion provisions of section 1128(a) of the Act.

9. An exclusion imposed pursuant to 1128(a)(1) of the Act must be for a minimum period of at least five years. See section 1128(c)(3)(B) of the Act; 42 C.F.R. § 1001.102(a).

10. The I.G. may increase the period of exclusion based on the presence of aggravating factors found at 42 C.F.R. § 1001.102(b).

11. A finding of aggravating factors may support an exclusion of more than five years. 42 C.F.R. § 1001.102(b).

12. The I.G. established by a preponderance of evidence three aggravating factors under 42 C.F.R. §§ 1001.102(b)(1), (2), and (5).

13. The acts, or similar acts, that resulted in Petitioner's conviction were committed over a period of one year or more. 42 C.F.R. § 1001.102(b)(2); I.G. Ex. 5.

14. Petitioner was sentenced to 51 months' incarceration. 42 C.F.R. § 1001.102(b)(5); I.G. Ex. 7.

15. The acts, or similar acts, resulting in Petitioner's conviction resulted in a loss to the Medicare program of more than $1,500. 42 C.F.R. § 1001.102(b)(1); I.G. Ex. 11.

16. Petitioner did not prove the existence of mitigating factors.

17. The aggravating factors established by the I.G. proved Petitioner to be untrustworthy.

18. Based on the aggravating factors in this case and the lack of mitigating factors, the I.G.'s exclusion of Petitioner for a period of 15 years is not unreasonable.

DISCUSSION

The I.G. Properly excluded Petitioner under section 1128(a)(1) of the Act.

Petitioner does not dispute that the I.G. has the authority to exclude him from Medicare, Medicaid, and all federal health care programs. However, the Petitioner does dispute the I.G.'s position that Petitioner should be excluded under the mandatory provision of section 1128(a)(1). Petitioner maintains that the underlying criminal conviction is one that is subject to a permissive exclusion pursuant to section 1128(b)(7), under which the I.G. may determine that no exclusion period is necessary, or impose an exclusion of at least three years. Petitioner argues that exclusions for persons convicted of kickback related crimes must be discretionary because section 1128(b)(7) of the Act specifically mentions "kickbacks" as one of the prohibited activities. Petitioner further cites cases to support its argument that the I.G. is obliged to narrowly construe statues and follow directives which are narrowly drawn to implicate particular conduct and actions. P. Rep. Br. at 4. Finally, while Petitioner first admits that the verdict against him constitutes a "conviction" for purposes of program exclusion under the Act, and that the I.G. has the authority to exclude him, he then, advances arguments which collaterally attack certain aspects of the underlying conviction in the case.

Violations of section 1128B of the Act are subject to both criminal and administrative sanctions by the government. The criminal process involves sanctions that are associated with criminal convictions, such as incarceration and probation. Under the administrative process an individual is subject to a permissive or mandatory exclusion. The permissive exclusion authority of section 1128(b)(7) is available where an individual or entity has not been convicted of a crime. However, if an individual is convicted under section 1128(a)(1) an exclusion is mandatory.

The plain wording of section 1128(a)(1) which states that the Secretary shall exclude an individual who has been convicted of a criminal offense unequivocally obligates the Secretary to exclude an individual under the mandatory provision of the Act when a program-related conviction is present.

The I.G. cites a long line of DAB cases which support its proposition that the Secretary must proceed under the Mandatory exclusion authorities of section 1128(a)(1) of the Act if an individual has been convicted of a program related offense. More to the point, the I.G. cites cases in which the DAB has uniformly held that criminal convictions predicated upon violations of the Anti-Kickback Statute justify mandatory exclusion pursuant to section 1128(a)(1) of the Act. See Jitrendra C. Shah, M.D., DAB CR720 (2000); Farhad Mohebban, M.D., DAB CR686 (2000); Muhammad R. Chaudhry, DAB CR 326(1994); Asadolla Amrollahifa, Ph.D, DAB CR238 (1992); Niranjana B. Parikh, M.D. et al. DAB No. 1334(1992); Boris Lipovsky, M.D., DAB CR208 (1992); aff'd, DAB No. 1363 (1992); Arthur V. Brown, M.D., DAB CR226 (1992); John Tolentino, M.D., DAB CR180 (1992).

Petitioner's arguments are not persuasive and lack substantive support in the Act, the legislative history, and the case law. Thus, I find that Petitioner is subject to the mandatory exclusion provision of section 1128(a)(1) of the Act.

The I.G. has established three aggravating factors which justify the exclusion imposed in this case.

The Secretary has published regulations under section 42 C.F.R. Part 1001 which govern the length of exclusions that are imposed pursuant to section 1128 of the Act. The regulations are found at 42 C.F.R. § 1001.102. An exclusion pursuant to section 1128(a)(1) of the act must be for a minimum period of five years. See section 1128 (c)(3)(B) of the Act; 42 C.F.R. §1001.102(a). The I.G. may extend the minimum period of exclusion if it determines that specific aggravating factors are present. See 42 C.F.R. § 1001.102(b). Section 1001.102(b) 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. Section 1001.102(c) provides that mitigating factors may be considered, if present in a case, to offset any aggravating factors that are established.

The I.G. relied on the presence of three aggravating factors to lengthen Petitioner's period of exclusion to 15 years:

(1) The sentence imposed by the court included incarceration.

The I.G. has established that Petitioner's sentence in the criminal case included a period of incarceration. Petitioner was found guilty in Federal Court of conspiracy (Count 1) and violating the Anti-Kickback Statute (Count 3). Petitioner engaged in a conspiracy to solicit, offer, and pay bribes in return for referral of patients. I.G. Ex. 5. The record shows the Petitioner was sentenced to 51 months incarceration. He was also sentenced to three years' supervised probation and ordered to pay a $75,000 fine and a $100 assessment. I.G. Ex. 7. Petitioner's untrustworthiness is demonstrated by the fact that he was sentenced to incarceration. See Leonard S. Dino, R.Ph., DAB CR260(1993).

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.

The evidence presented by the I.G. has established that the acts which resulted in Petitioner's criminal conviction were committed over a period of one year or more. The record shows that Petitioner's unlawful acts spanned a lengthy period of just over ten years. The acts in the two counts of which Petitioner was found guilty occurred from in or about the fall of 1985 to in or about January 1995. I.G. Ex. 5. Furthermore, the evidence shows that Petitioner took steps to prolong the kickback scheme and included other employees and representatives in the scheme. I.G. Ex 8. The weight of the evidence establishes that the I.G. has sustained its burden in proving this aggravating factor.

(3) The acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more entities of $1,500 or more.

The primary and most hotly contested matter in this case relates to the issue of whether or not Petitioner's conduct resulted in a financial loss to the government of $1,500 or more.

The I.G. maintains that "consulting fees" paid by Baptist (at the direction of the Petitioner) to the Lahue brothers were in fact bribes paid for referring patients to Baptist in violation of section 1128B of the Act and 18 U.S.C. § 2. I.G. Ex. 5. The I.G. contends, that these "consulting fees" were improperly included in Baptist's Medicare cost reports and paid by Medicare, thereby resulting in a loss to the government.

Petitioner argues that the I.G. incorrectly determined that Petitioner's unlawful activity caused $65,716 of loss to the Medicare program, because: (1) the I.G. failed to consider benefits and savings to the Medicare program as a result of the Baptist program and (2) the I.G. incorrectly relied on the criminal trial court's loss findings.

At the hearing, the I.G. called as its only witness Jimmie Frisbee. Mr. Frisbee is a Certified Public Accountant and lead accountant in the Division of Health Plans and Providers in the Kansas City Regional Office of the Centers for Medicare and Medicaid Services (CMS). Contrary to Petitioner's assertion, I qualified Mr. Frisbee, at the hearing, as an expert in the areas of Medicare cost report preparation, Medicare audit process, and the process of calculating Medicare over payments and under payments through the fiscal intermediary.

Mr. Frisbee testified regarding the details of his analysis and calculation of the damages to the government in this case, which he described as a "conservative" approach. Tr. 151-152. He testified that the amount of loss to the government was determined by totaling the "consulting fees" claimed by Baptist for Medicare reimbursement, and then multiplying that figure by the average percentage of eligible Medicare reimbursement, for the years 1985 through 1995. I.G. Ex. 15. Mr. Frisbee described the total loss of $65,716, as "inappropriate payments made by Medicare that took funds away from needed services, that a hospital would normally render, and these are costs that Medicare would not recognize." Tr. 153.

In addition, the I.G. argues that Judge Lungstrum, the presiding judge in the Federal criminal trial against the Petitioner, found that "[t]he evidence at trial revealed that the only victim in this case, the federal government, suffered at most $65,716 in losses in connection with the scheme at Baptist." I.G. Ex. 11 at 20. The Court made a specific finding that there was a loss to the government where "the amount of bribes or consulting fees" were included in Baptist's Medicare Cost Reports and where Baptist received reimbursement from Medicare for those bribes. Thus, the Court in the criminal case specifically determined there was a loss to the Medicare program of, at most, $65,716. That determination was based on Mr. Frisbie's testimony at Petitioner's criminal trial. I.G. Ex 11 at 19 - 20; P. Ex. 13 at 6764 - 6779.

Although I ultimately give weight to Judge Lungstrum's findings at the criminal trial regarding loss to the government, I am not bound by the trial courts determination. Petitioner is entitled to a de novo hearing and an independent decision by an administrative law judge. Section 205 (b) of the Act. I make my findings based on a careful and detached review of all the evidence concerning financial loss to the government.

Petitioner correctly points out that because Baptist paid a 17.5 million dollar settlement, Judge Lungstrum ultimately found that no restitution should be paid because, after the offset, the government suffered no harm. It is important to note however, that Judge Lungstrum's finding that the government "suffered no harm" was in the context of making a restitution determination. Judge Lungstrum specifically considered the fact that Baptist had paid a 17.5 million dollar settlement in deciding not to order restitution in the case. Generally, restitution orders require the court to consider any benefits bestowed by the defendants. However, in the context of an administrative civil remedy determination no such consideration is required.

Indeed, 42 C.F.R. § 1001.102 (b)(1) reads in part:

[t]he entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made.

Mr. Frisbee's explanation of the loss to the government of $65,716 is reasonable and fair. Section 1001.102 of 42 C.F.R. does not require the I.G. to make an independent assessment of any potential benefit bestowed on the government by Petitioner when determining the dollar value of the loss to a government program. The regulations merely require the I.G. to make a determination of the loss based on the Petitioner's unlawful activities.

Based on the forgoing, I find that the I.G. has established by a preponderance of the evidence that Petitioner is responsible for more than a $1,500 financial loss to the Medicare program.

Petitioner argues that the mere fact that these factors are present does not justify a 15-year exclusion. Petitioner maintains that the I.G. has failed to provide a breakdown of Petitioner's 15-year exclusion to indicate specifically how much time was added as a result of each aggravating factor.

The purpose of every exclusion under section 1128 is to protect the integrity of federally funded health care programs, and the health and safety of beneficiaries and recipients of those programs from an untrustworthy individual or entity. An exclusion will be found to be reasonable so long as it comports with this remedial purpose. An exclusion will be found to be unreasonably punitive if an individual or entity is excluded for longer than is necessary to satisfy the remedial purpose of protection.

While it is true that the I.G. did not indicate how each factor was weighted in arriving at the 15-year exclusion period, the regulations do not require it to do so. The I.G. has clearly demonstrated that she considered those factors which the regulations specifically authorize her to consider.

Petitioner also argues that the period of time in which Petitioner's acts occurred does not provide the I.G. with a sufficient basis for the imposition of a 15-year exclusion. Through selective citation to certain portions of the Federal Court's Memorandum and Order relative to Petitioner's motion for acquittal, Petitioner maintains that the acts for which he was convicted did not span a period of over ten years. A close and full reading of the cited exhibits does not support Petitioner's assertions but instead bolsters the position of the I.G. While Petitioner argues that Petitioner's illegal acts did not span the lengthy period asserted by the I.G., he does not offer any evidence as to the proper time period the I.G. should have considered to determine a lesser period of exclusion.

It should be noted that Petitioner has advanced arguments which, in effect, are a collateral attack on the criminal conviction in this case. Petitioner admits on the one hand that he has been convicted but then argues that the conviction "does not accurately reflect the facts of his case . . . ." P. Br. at 7. Petitioner argues that while he is not seeking to relitigate the facts of the criminal case, he maintains that I am obligated to take into account all of the facts and circumstances considered by the I.G. in support of the exclusion determination at the time it was made. P. Rep. Br. at 9. Petitioner then argues that the I.G. should have considered how the evidence unfolded at trial. P. Br. at 7. Additionally, Petitioner submitted a copy of the transcript of his testimony at the hearing to advance the argument that he was not responsible for ensuring the legality of the consulting agreements and that he relied heavily on the advice of attorneys because the Medicare law was so uncertain. P. Br. at 18, 19. Petitioner also points out that the two attorneys upon which advice he relied upon were acquitted. Therefore, he argues, his attorneys legal advice should be considered in evaluating his case with respect to the length of time Petitioner engaged in unlawful conduct.

Despite Petitioners assertions to the contrary, he is indeed attempting to relitigate the facts of the criminal case in the proceedings before me. The regulations at 42 C.F.R. § 1001.2007(d) clearly prohibit Petitioner from collaterally attacking the substantive or procedural underlying determinations in his criminal conviction in this forum. Further, the DAB has held that the I.G. and the Administrative Law Judge are not permitted to look beyond the fact of conviction. Rickie Lewis, DAB CR730 (2001); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter J. Edmondson, DAB No. 330 (1992). Thus, it is clear that I am prohibited from considering how the evidence unfolded at trial, or that Petitioner relied upon the advice of counsel who were subsequently acquitted of wrongdoing. The fact remains that Petitioner was convicted of a criminal offense for the purpose of program exclusion under the Act. Petitioner's arguments which collaterally attack the substantive and procedural determinations made in the criminal case are irrelevant and are given no evidentiary weight in this decision.

Mitigating factors

Petitioner contends that he has established the presence of mitigating factors. Petitioner presented evidence regarding what he considers to be valuable services that Baptist and the Lahue brothers provided to the frail elderly nursing home population. Petitioner also maintained that the monetary benefit of these services offset any damages to the Medicare program. Petitioner called as witnesses, Dr. Leonard Hock, Dr. Nevada Lee, Joseph Rosenbaum, and Keith Eugone to support his assertions. The witnesses testified essentially that Baptist developed the premiere geriatric treatment center in Kansas City and that the program reduced patient admissions, which resulted in Medicare cost savings. Dr. Lee testified that the value of the services provided were worth well over one million dollars. Tr. 317. In addition, Petitioner also submitted many letters from colleagues, associates, and friends, attesting to his professional competence and trustworthiness.

The I.G. objected to the presentation of this evidence asserting that such evidence was irrelevant and not within the enumerated factors in the regulations which relate to proving mitigating factors. While I specifically noted at the hearing that I am not authorized to go beyond the enumerated factors to determine if mitigating factors exist, I allowed the evidence to be presented at the hearing and through exhibits during the trial so that I could determine if the evidence was relevant to one or more of the mitigating factors. After a review of all of the evidence in this case, I have determined that the regulations do not allow me to consider such evidence. Mitigating factors in 1128(a)(1) mandatory exclusion cases are defined to include only the following:

(1) The convicted individual or entity was convicted of three or fewer misdemeanor offenses and the entire amount of financial loss to Medicare and the State health care programs due the acts that resulted in the conviction, and similar acts, is less than $1,500;

(2) The record in the convicted individual's criminal proceedings, including sentencing documents, demonstrates that the court which sentenced that individual determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that the individuals culpability; or

(3) The individual's or entity's cooperation with federal or State officials resulted in others being convicted or excluded from Medicare or from a State health care program, or in the imposition against anyone or a civil money penalty or assessment.

42 C.F.R. § 1001.102(c)(1) - (3).

The regulations make it clear that only those factors that it identifies as mitigating may be considered, if present in a case, to offset any aggravating factors that are established. The mitigating factors operate as rules of evidence in such a case. Evidence which does not relate to an identified mitigating factor is irrelevant to determining the length of an exclusion and may not be considered. The excluded party bears the burden of alleging and proving the presence of any mitigating factor.

The evidence that Petitioner has introduced regarding program and financial benefits to patients and the Medicare Program are not mitigating factors under 42 C.F.R. § 1001.102(c)(1) - (3), and therefore I may not consider them.

The I.G.'s exclusion of Petitioner for fifteen years is within a reasonable range.

Although 42 C.F.R § 1001.102 establishes the sole factors which may be considered in deciding whether the length of an exclusion is reasonable, it does not prescribe the weight which is to be given to any factor. The regulation contains no formula prescribing any exclusion length beyond the five-year minimum period based on the presence of aggravating factors or the absence of mitigating factors. 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?

Petitioner argues that the I.G.'s exclusion letter of January 31, 2000, indicates that the I.G.'s decision to exclude the Petitioner for 15 years was based on the I.G.'s assertion that Petitioner's conduct caused a loss to the Medicare program exceeding 1.3 million dollars. I.G. Ex. 1. Petitioner points out that on the eve of the hearing, the I.G. revised its proof of loss to $65,517 and that fact should render the 15-year exclusion period unreasonable because the I.G. did not concomitantly reduce the exclusionary period. Pet. Br. at 41.

There is no prohibition in the regulations which prevent the I.G. from modifying what it intends to prove at a hearing and there is no requirement that a reduction in the alleged amount of financial loss must result in a concomitant reduction in the exclusion period. At the hearing the I.G. chose to prove financial loss to the government of $65,716 rather than 1.3 million dollars it stated in it's January 31, 2000 exclusion letter. The I.G. met its burden and proved by a preponderance of the evidence that there was indeed a financial loss of more than $1,500 in this case. The amount of loss is only one of the aggravating factors that I must consider in determining whether the period of exclusion imposed by the I.G. is within a reasonable range.

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.

The aggravating factors established by the I.G. in this case prove Petitioner to be an untrustworthy individual. Petitioner's lack of trustworthiness is established by the fact that he was a primary participate in a bribery scheme which lasted over ten years, resulting in a loss to the Medicare program of $65,716. His illegal actions were recurrent and deliberate, not random and impulsive. Petitioner was sentenced to 51 months incarceration after a full jury trial, suggesting that the sentencing judge found him to be a highly culpable individual.

I have weighed the evidence and the regulatory factors in this case and find that the I.G. has proven that Petitioner is not a trustworthy individual. The fact that the I.G. made a tactical trial decision to reduce the amount of financial loss it chose to prove in this administrative action does not render Petitioner a more trustworthy individual. All of the aggravating factors, including a financial loss to the government of more than $1,500 and the absence of any mitigating factors lead me to conclude that Petitioner is not a trustworthy individual. Based on the evidence presented in this case I find that the 15-year exclusion that the I.G. has determined to impose in this case is within a reasonable range and is not excessive. I therefore affirm the I.G.'s exclusion of the Petitioner for a period of 15 years.

Alfonso J. Montano

Administrative Law Judge