SUBJECT:

Valerie Baker,

Petitioner,

The Inspector General

DECISION

On September 4, 2001, I partially granted the Inspector General's (I.G.'s) motion for summary judgment in this matter, thereby sustaining the exclusion of Petitioner Valerie Baker from Medicare, Medicaid, and all federal health programs for the mandatory minimum period of five years, pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Social Security Act (Act), 42 U.S.C. §§ 1320a-7(a)(1) and 1320a-7(c)(3)(B). My Decision (Valerie Baker, DAB CR815 (2001)) reserved for later resolution the issue of the reasonableness of the I.G.'s enlargement of the exclusionary period to 10 years; this unusual procedural step was based on my then-perceived need to verify the authenticity of a crucial exhibit, previously admitted to this record as I.G. Ex. 2. ⁽¹⁾ There now remains no material question of the authenticity or completeness of that exhibit, and I am prepared to rule on the remaining issue.

I grant summary judgment on the remaining portion of the I.G.'s motion and sustain as reasonable the enlargement of the exclusionary period to 10 years pursuant to the terms of 42 C.F.R. § 1001.102(b)(1), (2), and (5). In doing so, I explicitly adopt as if fully set forth herein each Finding of Fact and Conclusion of Law announced in my Decision of September 4, 2001, and incorporate fully herein the analysis and discussion on which I based those Findings and Conclusions.

ISSUES

The issue I address in this decision is whether aggravating factors are present which operate to make the I.G.'s enlargement of Petitioner's exclusion to 10 years reasonable.

CONTROLLING STATUTES AND REGULATIONS

Section 1128(a)(1) of the Act requires the exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any individual or entity convicted of a criminal offense related to the delivery of an item or service under Title XVIII of the Act (the Medicare program) or under any State health care program. This exclusion is mandatory, and must be imposed for a minimum of five years. Act, section 1128(c)(3)(B).

My Decision of September 4, 2001 determined that Petitioner had been convicted of a criminal offense within the terms of section 1128(a)(1) and was subject to the five-year mandatory minimum period of exclusion established by section 1128(c)(3)(B).

The minimum mandatory five-year exclusion is subject to enlargement: 42 C.F.R.§ 1001.102 allows the I.G. to extend the five-year period if certain aggravating factors are demonstrated. If the I.G. proposes to rely on any of the specified aggravating factors to seek an enlargement of the exclusionary period, then the subject of the proposed exclusion is permitted to assert the existence of certain mitigating factors and thereby seek to limit the exclusion to the five-year mandatory minimum. Those aggravating and mitigating factors are set out in detail at 42 C.F.R. § 1001.102(b)(1)-(9) and (c)(1)-(3).

The aggravating factors relied on by the I.G. in this care are:

(1) The acts resulting in the conviction . . . resulted in financial loss to a government program of $1,500 or more (42 C.F.R. § 1001.102(b)(1));

(2)The acts that resulted in the conviction . . . were committed over a period of one year or more (42 C.F.R. § 1001.102(b)(2)); and

(3) The sentence imposed by the court included incarceration (42 C.F.R. § 1001.102(b)(5)).

The I.G.'s invoking of these three aggravating factors permits Petitioner to respond by asserting the presence of any or all of the specified mitigating factors set out at 42 C.F.R. § 1001.102(c)(1)-(3). They appear here in relevant part:

(1) The individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss . . . is less than $1,500 (42 C.F.R. § 1001.102(c)(1));

(2) The record in the criminal proceedings . . . 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 (42 C.F.R. § 1001.102(c)(2)); and

(3) The individual's . . . cooperation with Federal or State officials resulted in others being convicted or excluded from Medicare, Medicaid, and all other Federal healthcare programs, (ii) Additional cases being investigated or reports being issued . . . identifying program vulnerabilities or weaknesses, or (iii) The imposition against anyone of a civil money penalty . . . . (42 C.F.R. § 1001.102(c)(3)).

These factors are set out with specificity, and they are the only factors I may consider in mitigation. None of them has been cited by Petitioner. Instead, Petitioner rests her claim to mitigation in a general assertion that she received little or no direct financial gain from the scheme, and that a 10-year exclusion is unduly harsh. Although her arguments are not tightly structured, they can be best understood in these terms (P. Brief, at 1) ⁽²⁾:

This is the primary reason why I am proposing a consideration for removal of the aggravating factors. The time and money given and what was received has not been a match. The benefit entailed being able to arrange my business at that time in order to meet the standards for accreditation.

Another important factor was that the first area in the building was renovated with a church in mind. The intention of the heart is what matters. It was not and never has been my intention to defraud the government or anyone else.

and in this language (P. Reply Brief, at 2):

My issues include (1) other mitigating factors, no job, 2 children to support. My probation period will be over in several months. Ten year exclusion from an industry I worked in for over ten years is unfair.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I find and conclude as follows:

1. Petitioner, Valerie Baker, was convicted of a criminal offense relating to the delivery of an item or service under Title XVIII of the Act or under a State health program, within the meaning of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1). I.G. Ex. 2; see also Baker, DAB CR815.

2. By reason of her conviction, Petitioner was subject to, and the I.G. was authorized to impose, a period of exclusion from the Medicare, Medicaid, and all other federal health care programs of not less than five years. Act, section 1128(c)(3)(B); 42 U.S.C. § 1320a-7(c)(3)(B); see also Baker, DAB CR815.

3. As part of her sentence in the criminal proceedings, Petitioner was ordered to pay restitution in the sum of $120,000, which sum represents the loss to the Medicaid program directly caused by Petitioner's criminal conduct. I.G. Exs. 2, 3.

4. Because this loss to the Medicaid program was in excess of $1,500, the aggravating factor set out in 42 C.F.R. § 1001.102(b)(1) is present.

5. The term of the conspiracy to which Petitioner pleaded guilty was from approximately January 1989 until approximately June 1998. I.G. Exs.2-4.

6. Because the conspiracy to which Petitioner pleaded guilty was committed over a period of one year or more, the aggravating factor set out in 42 C.F.R. § 1001.102(b)(2) is present.

7. As part of her sentence in the criminal proceedings, Petitioner was ordered to serve a six-month term of home confinement, which sentence is defined as a sentence of "incarceration" by 42 C.F.R. § 1001.2. I.G. Ex. 2.

8. Because Petitioner was sentenced to a term of incarceration, the aggravating factor set out in 42 C.F.R. § 1001.102(b)(5) is present.

9. None of the mitigating factors set out in 42 C.F.R. § 1001.102(c)(1)-(3) is present.

10. The I.G.'s exclusion of Petitioner for a period of 10 years is supported by fact and law and is reasonable as a matter of law. I.G. Exs. 1-4; Findings and Conclusions 1-9, supra; Baker, DAB CR815.

11. There are no remaining disputed issues of material fact and summary judgment is therefore appropriate in this matter.

DISCUSSION

As I pointed out in my Decision of September 4, 2001, the fact of Petitioner's conviction is now beyond debate or challenge, and the I.G.'s five-year exclusion of Petitioner based on that conviction has been sustained. Thus, it remains here only to determine whether the undisputed facts surrounding that conviction reflect the aggravating factors invoked by the I.G. Without exception, the official court documents reflecting Petitioner's conviction do reflect those factors.

Petitioner was convicted upon her guilty plea, and the Plea Agreement by which the guilty plea was negotiated, offered, and accepted is before me (I.G. Ex. 3). On its face, it reveals that Petitioner was represented by counsel when she signed the document on March 17, 1999 (I.G. Ex. 3, at 5), and that the sentencing guidelines calculation set the "Amount of Loss" at "Over $120,000" with the added specific language "[t]he defendant agrees to this Guideline calculation" (I.G. Ex. 3, at 2, ¶ 2). This explicit assessment of the amount of loss is repeated in the Judgment and Sentence entered on February 14, 2000 (I.G. Ex. 2), which, inter alia, ordered that Petitioner pay restitution in the same amount to the Director of Fiscal Operations, Home Care Services, New York City Human Resources Administration (I.G. Ex. 2, at 3). The I.G.'s proof of this first aggravating factor goes well beyond the prima facie reliance on the amount of restitution as a measure of the loss to a protected program approved in Thomas P. Whitfield,

D.P.M., DAB CR539 (1998); it establishes the amount at $120,000 without contradiction of any sort whatsoever, and establishes it at a level well in excess of the $1,500 threshold of material dispute. The I.G. has established the presence of the aggravating factor defined at 42 C.F.R. § 1001.102(b)(1).

The same Plea Agreement (I.G. Ex. 3) establishes the link to the criminal conspiracy charged against and admitted by Petitioner: the Agreement requires Petitioner to plead guilty to "count one of the above-captioned indictment, charging violation of 18 U.S.C. § 286" (I.G. Ex 3, at1, ¶ 1). That indictment, U.S. v. Valerie Baker et al., Cr. No.99-877 (E.D.N.Y.) is before me (I.G. Ex. 4), and its first count (I.G. Ex. 4, at 1, 2) charges that "[i]n or about and between January 1989 and June 1998, both dates being approximate and inclusive . . . VALERIE BAKER . . . together with others, did knowingly and intentionally enter into an agreement, combination and conspiracy to defraud . . . by obtaining and aiding to obtain the payment of false, fictitious and fraudulent claims for Medicaid reimbursement. (Title 18, U.S.C. §§ 286 and 3551 et seq.)." The judgment and sentence entered on February 14, 2000 (I.G. Ex. 2, at 1) reflects on its first page an entry for "Date Offense Concluded" of "01/89 & 06/98," which precisely coincides with the dates charged as the term of the conspiracy in the indictment. There is no evidence or argument before me that might suggest a flaw in these dates or in their application to the present discussion, or that might warrant treating Petitioner's conviction as anything other than a conviction for conspiring, over a term of nine and one-half years, to defraud the United States. The I.G. has established the presence of the aggravating factor defined at 42 C.F.R. § 1001.102(b)(2).

Petitioner was placed on probation, and that term of probation may well be nearly complete, but as part of that probation she was also required to serve a period of modified home confinement. Again, the Judgment and Sentence is plain (I.G. Ex. 2, at 2): "[t]he defendant Valerie Baker shall serve (6) Six Months Home Confinement, which shall be under direct Supervision of the Probation Department, while on Home Confinement the defendant may continue to go to work, and may leave for medical emergency and to continue to practice her religion, and may visit her attorney at any time." Such restrictions and requirements may not be as onerous as a commitment to the custody of the Attorney General for confinement in a prison, but any term of home confinement is defined by regulation as "incarceration" at 42 C.F.R. § 1001.2:

Incarceration means imprisonment or any type of confinement with or without supervised release, including, but not limited to, community confinement, house arrest and home detention.

There is no evidence to suggest that the term of home detention imposed in the judgment and sentence was modified, eliminated, amended, or set aside before it was completed. Neither does Petitioner here assert that it was not, in fact, imposed and served. The I.G. has established the presence of the aggravating factor defined at 42 C.F.R. § 1001.102(b)(5).

It has been held that in the context of exclusions and 42 C.F.R. § 1001.102, "Petitioner had the burden of proving any mitigating factor by a preponderance of the evidence, since the mitigating factor is in the nature of an affirmative defense." Barry D. Garfinkel, DAB No. 1572 (1996); see also Andrew H. Lewis, DAB CR625 (1999); James H. Holmes, DAB CR270 (1993). And it is well-settled in this forum that evidence of factors not specifically enumerated by regulation cannot be considered in mitigation of an exclusion. Narendra M. Patel, M.D., DAB CR631 (1999).

Thus, Petitioner's assertions that she did not profit personally, that she intended the scheme to have a socially beneficial goal over the long term, and that she intended no harm to government programs, are of no help to her in this discussion. Her assertions that she is raising two children and unemployed while subject to exclusion, and that her term of probation is nearly complete, are similarly outside my purview. I simply cannot bring them within the ambit of the regulation, and must for that reason disregard them. Her guilty plea and her conviction on that plea foreclose entirely her present denial of criminal intent to defraud, and she cannot now be heard to say that the term of the conspiracy was less than one year.

Though I intend no relaxation whatsoever of the burden imposed on Petitioner by Garfinkel, supra, I have reviewed the record for any facts that might colorably entitle Petitioner to claim any of the three mitigating factors. That review has disclosed nothing of potential aid to Petitioner. First, since the conviction was on a felony charge, 42 C.F.R. § 1001.102(c)(1) is explicitly unavailable. Next, because there is no evidence in the court records before me of a "mental, emotional or physical condition" that could be argued to have reduced Petitioner's culpability, the terms of 42 C.F.R. § 1001.102(c)(2) cannot be invoked. And third, because the record is utterly silent about Petitioner's "cooperation with Federal or State officials" in detecting or preventing program abuse, 42 C.F.R. § 1001.102(c)(3) cannot provide Petitioner with a claim in mitigation. Petitioner has not shown, and I have not discovered, any basis on which she may assert any of the three mitigating factors set out in the regulation, and I must find that she has established the existence of none of them.

CONCLUSION

For the reasons set forth above, I grant summary judgment in favor of the I.G. on the issues remaining before me in this case, and thereby sustain as reasonable the I.G.'s exclusion of Petitioner Valerie Baker from participation in Medicare, Medicaid, and all other federal health care programs for a period of 10 years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. § 1320a-7(a)(1).

Richard S. Smith

Administrative Law Judge

1. On July , 2001, the I.G. resubmitted a certified copy of I.G. Ex. 2. The certified copy of I.G. Ex. 2 replaces the previous exhibit, which was not certified. On February 1, 2002, I gave the parties the opportunity to simultaneously respond to this document by February 20, 2002. The I.G. submitted not a response. Petitioner did not submit a response.

2. I am using the same record that was before me when I made my initial Decision. Baker, DAB CR815 (2001).