SUBJECT:

Gregory X. Boehm. M.D.,

Petitioner,

The Inspector General

DECISION

I find to be unreasonable the 15-year exclusion that the Inspector General (I.G.) determined to impose against Petitioner, Gregory X. Boehm, M.D. I modify the exclusion to a term of seven years.

I. Background

Petitioner is a psychiatrist who practiced in the State of Ohio. On August 31, 2001, the I.G. notified Petitioner that he was being excluded from participating in Medicare and all federally funded health care programs for a period of 15 years. The I.G. told Petitioner that she was required to exclude him because Petitioner had been convicted of a criminal offense related to the delivery of an item or service under Medicare or a State health care program as is described in section 1128(a)(1) of the Social Security Act (Act). The I.G. notified Petitioner that the 15-year period of the exclusion was based on the presence of five aggravating factors. The I.G. cited no mitigating factors which might offset the aggravating factors.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I held a pre-hearing conference at which the parties agreed that the case could be heard and decided based on their written submissions. The I.G. filed a brief and a reply brief. The I.G. also submitted nine proposed exhibits (I.G. Ex.1 - I.G. Ex. 9). Petitioner submitted a brief and three proposed exhibits (P. Ex. A - P. Ex. C) which I have renamed P. Ex. 1 - P. Ex. 3 to conform to Civil Remedies procedures. Neither party objected to my admitting any of the proposed exhibits into evidence. Therefore, I admit into evidence I.G. Ex. 1 - I.G. Ex. 9 and P. Ex. 1 - P. Ex. 3.

II. Issue, findings of fact and conclusions of law

A. Issue

Petitioner has not denied the I.G.'s authority to exclude him pursuant to section 1128(a)(1) of the Act. Nor has Petitioner denied that the Act mandates an exclusion for at least five years of an individual who is convicted of an offense as is described in section 1128(a)(1). See Act, section 1128(c)(3)(B). The sole issue raised by Petitioner is whether the 15-year exclusion that the I.G. determined to impose is unreasonable. Petitioner contends that it is unreasonable and that an exclusion of no more than the five year mandatory minimum period is reasonable in this case.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision to modify the exclusion in this case to a period of seven years. I set forth each Finding below as a separate 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 this Department 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 material facts of this case are not disputed by the parties although they draw very different conclusions from these undisputed facts. The facts establish the presence of five aggravating factors.

Petitioner was indicted in the United States District Court for the Northern District of Ohio, Eastern Division. I.G. Ex. 3. Count 2 of this indictment charged that, from in or about January 1997 through in or about July 1998, Petitioner knowingly and wilfully executed and attempted to execute a scheme and artifice to defraud Medicare and the State of Ohio's Medicaid program (Ohio Medicaid) to obtain money and property owned by these programs. Id., at 12. Specifically, Count 2 charged that Petitioner caused numerous billing claims to be submitted to the two programs which sought payment for medical services he had not actually provided. Id.

On January 6, 2001, Petitioner signed a plea agreement in which he agreed to plead guilty to Count 2 of the indictment. I.G. Ex. 5. In pleading guilty Petitioner admitted that he had operated a medical practice under the name Psychiatric Professional Group, Inc. (PPG). Id., at 4. He agreed that he and PPG entered into various agreements with several nursing homes located throughout northeast Ohio. Pursuant to these agreements, Petitioner treated nursing home residents who were eligible to receive benefits from Medicare and Ohio Medicaid. Id.

Petitioner acknowledged that he had knowingly engaged in "up-coding" of reimbursement claims for services that were provided to these nursing home residents. Id., at 5 - 6. Specifically, Petitioner falsely claimed that services that were provided by him or on his behalf by a nurse, and which consisted of pharmacologic management services were, in fact, psychotherapy services. Id., at 4 - 6. Petitioner up-coded his claims for pharmacologic management services to claims for psychotherapy services, knowing that Medicare and Ohio Medicaid reimbursed at higher rates for psychotherapy services than for pharmacologic management services. Id.

Petitioner admitted that, from October 1995 through about July 1998 he was overpaid by Medicare and Ohio Medicaid in an amount of more than $70,000. Id., at 6. He admitted that this amount represented overpayments resulting from claims that were submitted on Petitioner's behalf for psychotherapy services. Id.

On April 9, 2001, Petitioner pled guilty to Count 2 of the indictment. I.G. Ex. 6. Count 1 was dismissed pursuant to his plea agreement. Petitioner was sentenced to a two years' probation. Id., at 2. The terms of his probation included the requirement that he participate in a home confinement program with electronic monitoring. Id., at 3. He was required to remain in his residence during this six month period unless given permission in advance by his probation officer to be elsewhere. Id. He was required to wear an electronic monitoring device. Id. Additionally, Petitioner was sentenced to pay restitution in the amount of $71,370.24. Id.

On July 11, 2001, the Medical Board of the State of Ohio (Ohio Medical Board) issued an order suspending Petitioner's license to practice medicine in Ohio for a period of one year. I.G. Ex. 8. The charges that were made before the Ohio Medical Board and which were the basis for its determination essentially duplicate those that were made in Petitioner's indictment. P. Ex. 1.

The five aggravating factors that are established by these undisputed facts are as follows:

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

Petitioner admitted that he was overpaid by Medicare and Ohio Medicaid in an amount of more than $70,000. He was sentenced to pay restitution of more than $71,000. These sums are not a precise measure of the damages that Petitioner caused Medicare and Ohio Medicaid to experience. But, it is more than reasonable to infer from the size of these sums that Petitioner's conduct had an impact on the programs of $1,500 or more.

b. Petitioner committed the acts which resulted in his conviction over a period of a year or longer (42 C.F.R. § 1001.102(b)(2)).

Petitioner pled guilty to a crime which transpired during a period that began in or about January 1997 and which continued through about July 1998. This is a period of more than one year.

c. The sentence that was imposed against Petitioner included a period of incarceration (42 C.F.R. § 1001.102(b)(5)).

Petitioner's sentence included a period of home confinement with electronic monitoring. Under applicable regulations, "incarceration" is defined to mean home detention. 42 C.F.R. § 1001.2. Thus, Petitioner's sentence included a period of incarceration.

d. Petitioner was overpaid more than $1,500 by Medicare and Ohio Medicaid as a result of his intentional improper billings (42 C.F.R. § 1001.102(b)(7).

Petitioner admitted that he was overpaid more than $70,000 by Medicare and/or Ohio Medicaid. He now argues that he made this admission as part of a plea agreement and in an effort to settle the criminal case against him. He suggests, therefore, that the sum of $70,000 may not accurately reflect the true amount of his overpayments. However, he has not denied that his criminal activities resulted in a substantial overpayment in excess of $1,500.

e. Petitioner was the subject of other adverse action by a State agency or board which was based on the same circumstances that resulted in Petitioner's conviction (42 C.F.R. § 1001.102(b)(9)).

Petitioner's license to practice medicine in Ohio was suspended for one year by the Ohio Medical Board. This action grew out of the conduct that resulted in Petitioner's indictment and conviction.

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

Petitioner alleged that there are two mitigating factors present in this case. I find that Petitioner failed to prove the presence of these alleged factors.

a. Petitioner did not establish that the sentencing court determined that he had a mental, emotional, or physical condition, before or during the commission of his crime that reduced his culpability (see 42 C.F.R. § 1001.102(c)(2)).

Petitioner argues that the sentencing court found that his culpability for his crimes was diminished by a substance disorder and by an attention deficit disorder. At the sentencing hearing, Petitioner's counsel and Petitioner brought to the court's attention his substance abuse and attention deficit disorders. I.G. Ex. 7, at 3 - 5. The court acknowledged the existence of the problems in that the sentence it imposed on Petitioner required, as a condition of Petitioner's probation, that he participate in an outpatient mental health program. Id., at 6. However, the court did not find that his culpability was reduced in any respect by these problems. Consequently, Petitioner has not established an essential element of the mitigating factor that is stated at 42 C.F.R. § 1001.102(c)(2).

b. Petitioner did not establish that his cooperation with prosecuting authorities led to: the conviction of other individuals; additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses; or the imposition against anyone of a civil money penalty or assessment (see 42 C.F.R. § 1001.102(c)(3)(i) - (iii)).

At Petitioner's sentencing hearing the Assistant United States Attorney who was in charge of Petitioner's case advised the court that Petitioner had provided the United States Attorney with cooperation which, at a minimum, "saved the government some vast resources in not going down some nonproductive areas." I.G. Ex. 7, at 4. Additionally, Petitioner was credited with having given investigators names and information which confirmed information that they had received. Id. Petitioner argues that this evidence establishes the presence of a mitigating factor. I am not persuaded by Petitioner's argument. The regulation establishes a very strict standard. In order for a mitigating factor to be present, the individual must not only cooperate with authorities but a specified outcome must be obtained. Here, there was cooperation, but none of the outcomes identified at 42 C.F.R. § 1001.102(c)(3)(i) - (iii) was obtained.

Petitioner asserts that establishing that his cooperation led to one of the outcomes described in the regulation is not possible given the pace with which the I.G. moved to exclude him. I am not unsympathetic with Petitioner's concern. However, I must apply the regulation as it is written.

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.

The evidence that relates to aggravating factors fails to support the extraordinarily lengthy exclusion that the I.G. determined to impose against Petitioner. I am not minimizing the seriousness of Petitioner's crime. But, the evidence simply does not show that Petitioner is so untrustworthy as to require what is tantamount to a lifetime exclusion from participating in federally funded health care programs.

Petitioner committed his crimes over a period that barely exceeds the one-year minimum period for establishing an aggravating factor based on duration. The amount of money that he obtained as a consequence of his crimes - in the vicinity of $70,000 - is substantial. But, it is far less than what in the past has been used by the I.G. to justify exclusions of shorter duration than the I.G. imposed here. 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 excluded individual had defrauded a State Medicaid program for a period of two years and had committed fraud totaling about $600,000. It is difficult to reconcile the exclusion that the I.G. imposed here with that which the I.G. imposed in Neese where the amount of Petitioner's fraud was about 12 percent of that which occurred in Neese and where the criminal activity occupied only about one-half the period of time that was involved in Neese.

The evidence relating to the other aggravating factors that the I.G. established is not impressive evidence of a lack of trustworthiness. It is true that Petitioner was sentenced to incarceration. However, his term of incarceration was lenient. It involved no imprisonment. The evidence relating to Petitioner's overpayment by Medicare and Ohio Medicaid and the aggravating factor established pursuant to 42 C.F.R. § 1001.102(b)(7) is the identical evidence as relates to the money he obtained via fraud and the aggravating factor established pursuant to 42 C.F.R. § 1001.102(b)(1). The fact that the identical evidence establishes two, and not just one, aggravating factors does not make Petitioner more untrustworthy. Similarly, the Ohio Medical Board's action against Petitioner's license is based on the identical conduct as led to his conviction and shows no additional proof of untrustworthiness. Indeed, it may be inferred from the short suspension that Petitioner received that the Ohio Medical Board found Petitioner to be relatively trustworthy.

Thus, I find that Petitioner's exclusion falls outside of a reasonable range of exclusions that would be justified based on the evidence in this case. An exclusion in the range of from five to 10 years is justified based on this evidence. Consequently, I modify the exclusion to a term of seven years.

Steven T. Kessel

Administrative Law Judge