SUBJECT:

Jan A. Mayer, M.D.,

Petitioner,

The Inspector General

DECISION

I sustain the Inspector General's (I.G.) determination to exclude Jan A. Mayer, M.D., Petitioner, from participation in Medicare, Medicaid, and all other federal health care programs for a period of 15 years. I find that the I.G. is authorized to exclude Petitioner under section 1128(a)(1) of the Social Security Act (Act), and that the 15-year exclusion imposed by the I.G. against Petitioner falls within a reasonable range.

I. Background

By letter dated August 31, 2001, the I.G. notified Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of 15 years. In that letter the I.G. explained that she is authorized to exclude him under section 1128(a) of the Act based on his conviction, in the United States District Court for the Middle District of Tennessee, of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs. Petitioner thereafter requested a hearing, arguing that his period of exclusion should be reduced to five years. I held a prehearing conference on January 4, 2002. At that time, the parties agreed that an in-person hearing was not necessary, and that the matter could be resolved on the written record. Petitioner, through counsel, conceded the appropriateness of exclusion, but challenged the length of the exclusion beyond five years.

Both parties submitted briefs, accompanied by documentary evidence. The I.G. filed seven exhibits (I.G. Exs. 1 - 7) as part of her submission, and Petitioner filed one exhibit (P. Ex. 1). In the absence of objection, I receive into evidence I.G. Exs. 1 - 7 and P. Ex. 1.

The basic facts of this case are not in dispute. Petitioner was a physician, specializing in psychiatry, who was licensed to practice in the States of Tennessee and Arizona. I.G. Exs. 1, 2. In addition to other professional commitments, he and another psychiatrist equally owned a psychiatric practice, Associates in Psychiatry, located in Lebanon, Tennessee. I.G. Ex. 3. On September 30, 1999, Petitioner was indicted and charged with 23 counts of mail fraud, in violation of 18 U.S.C. § 1341, and six counts of money-laundering, in violation of 18 U.S.C. § 1956. I.G. Ex. 3. On November 17, 2000, Petitioner entered a guilty plea to 13 counts of mail fraud. I.G. Ex. 4. He admitted to devising a billing scheme that defrauded government health care programs, managed care organizations, private health insurance plans, and individual patients. Using a variety of artifices, he submitted bills in excess of the services provided: for example, he submitted bills for services he had not provided on the billed date, submitted bills for individual psychotherapy sessions of 35 minutes or longer where his services had included little or no individual therapy time, and submitted bills for a first hospital inpatient encounter when the service provided was for subsequent hospital care, reimbursable at a lower rate. As part of the scheme, he fabricated documentation for patient medical records. I.G. Exs. 3, 4.

Petitioner's guilty plea and judgment of conviction constitutes a conviction under section 1128(i)(3) of the Act. He was sentenced to 36 months in prison on each count, sentences to run concurrently, followed by three years supervised release. He was ordered to pay a $650 assessment, to participate in a substance abuse program, and to pay restitution in the amounts of $268,348 and $130,485.34, to Medicare Part B Carrier, Cigna Corporation, and to managed care organization, Blue Cross/Blue Shield of Tennessee, respectively. I.G. Ex. 4. As a condition for his subsequent supervised release, Petitioner was not permitted, during the period of his supervised release, to be self-employed or employed by any other entity "in any business or enterprise associated with health care agencies or programs which receive funds from Medicare or other health care programs regulated by the U.S. Department of Health and Human Services." I.G. Ex. 4 at 5.

II. Issue

Petitioner concedes that he was convicted under federal law of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs, and acknowledges that he is subject to the mandatory imposition of a five-year exclusion. P. Hearing Request; see Order dated December 21, 2000. The sole issue before me is whether the length of the exclusion in excess of the five-year mandatory minimum is reasonable. 42 C.F.R. § 1001.2007.

III. Discussion

Section 1128(a)(1) requires that the Secretary of Health and Human Services (Secretary) exclude an individual who has been convicted under federal or State law of a criminal offense related to the delivery of an item or service under Medicare or a State health care program. ⁽¹⁾ 42 C.F.R. § 1001.101. Individuals excluded under section 1128(a)(1) of the Act must be excluded for a period of not less than five years. Section 1128(c)(3)(B). The regulations authorize increasing the mandatory minimum period of exclusion based on the existence of any of the nine specified aggravating factors that are not offset by specified mitigating factors. 42 C.F.R. § 1001.102. For example, any of the following factors may serve as a basis for lengthening the period of exclusion: (1) the acts resulting in the conviction, or similar acts, resulted in a financial loss to Medicare and the State health care programs of $1,500 or more (42 C.F.R. § 1001.102(b)(1)); (2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more (42 C.F.R. § 1001.102(b)(2)); (3) the sentence imposed by the court included incarceration (42 C.F.R. § 1001.102(b)(5)); and (4) the convicted individual or entity 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 serves as the basis for imposition of the exclusion (42 C.F.R. § 1001.102(b)(9)).

The Secretary has delegated to the I.G. the authority to impose exclusions. 42 C.F.R. § 1001.401(a). So long as the amount of time chosen for the exclusion imposed on Petitioner by the I.G. is within a reasonable range, based on demonstrated criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992).

1. The 15-year exclusion falls within a reasonable range. 42 C.F.R. § 1001.102(b)(2).

a. Three aggravating factors justify lengthening the period of exclusion beyond the five-year mandatory minimum.

By regulation, the Secretary established the criteria for determining the length of exclusions imposed pursuant to section 1128 of the Act. 42 C.F.R. § 1001.102 lists the aggravating and mitigating factors applicable to a section 1128(a) exclusion. The presence of any aggravating factor or factors not offset by any mitigating factor or factors justifies lengthening the mandatory five-year period of exclusion. Evidence that does not pertain to one of the specific aggravating or mitigating factors is not relevant and may not be used to decide whether an exclusion of a particular length is reasonable.

Here, the I.G. cited four factors as the bases for extending the period of Petitioner's exclusion beyond the mandatory five-year minimum: (1) Petitioner's actions resulted in a program financial loss in excess of $1,500; (2) his actions were committed over a period of more than one year; (3) the sentence imposed by the court included incarceration; and (4) as a result of the indictment and conviction, Petitioner agreed to surrender his medical licenses in both Tennessee and Arizona.

Petitioner does not dispute three of the four cited aggravating factors. His crimes resulted in program financial loss well in excess of $1,500, with the court ordering him to pay more than $398,000.00 in restitution. He acknowledges that the sentence imposed by the court included incarceration, and, in fact, at 36 months, Petitioner served a relatively lengthy prison sentence. Nor does Petitioner dispute that he agreed to surrender his medical licenses as a result of his indictment and conviction.

Petitioner challenges the I.G.'s claim that his actions were committed over a period of more than one year. According to the indictment, his scheme began on or about November 24, 1993, and continued until on or about April 15, 1995. I.G. Ex. 3 at 4. However, as Petitioner accurately points out, he pled guilty to only 13 counts of mail fraud. On the earliest count to which he pled, the "date offense concluded" is March 23, 1994; on the latest, the "date offense concluded" is September 16, 1994, just six months later. Id. at 5 - 6. Even accepting that the acts began as a "scheme" on November 24, 1993, an allegation incorporated into the mail fraud counts to which he pled guilty, his actions still did not exceed a one-year time span since the offenses to which he pled were concluded within a year.

The I.G. points out that the regulation does not limit itself to the acts that resulted in the conviction, but includes "similar acts." 42 C.F.R. § 1001.102(b)(2). I recognize the I.G.'s responsibility to consider all factors surrounding a case to determine the reasonable length of exclusion, an approach similar to sentencing by a criminal judge, who, in setting the appropriate sentence, is not limited to considering the actions that formed the basis for conviction. Here, however, aside from the indictment, the I.G. offers no evidence of "similar acts," and I am not convinced that an indictment alone is sufficient to establish that those acts occurred. However, I need not reach this issue. As discussed below, the I.G. has, by regulation, set forth factors "reasonably related to the goal of determining the degree of untrustworthiness of an individual and the future threat posed by that person to the integrity of Federal health care programs." Joann Fletcher Cash, DAB No. 1725 (2000). Based on these three factors, I do not find unreasonable a 15-year exclusion. The amount of restitution ordered, as well as the length of Petitioner's prison sentence, evidences crimes of considerable magnitude, establishing him to be a significant risk to program integrity.

b. No mitigating factors offset the aggravating factors.

This case presents no mitigating factors to offset the aggravating factors. The regulations consider mitigating just three factors: (1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $1,500; (2) the record demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and (3) a petitioner's cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed. 42 C.F.R. § 1001.102(c). Characterizing the mitigating factor as "in the nature of an affirmative defense," the Board has ruled that a petitioner has the burden of proving any mitigating factor by a preponderance of the evidence. Barry D. Garfinkel, M.D., DAB No. 1572 at 8 (1996).

Obviously, because of Petitioner's felony convictions involving significant financial losses to the program, the first factor does not apply here. And no evidence suggests Petitioner cooperated with government officials leading to the imposition of sanctions against others. With respect to a medical condition reducing his culpability, the sentencing court recommended to the Bureau of Prisons that Petitioner participate in an intensive substance abuse treatment program (I.G. Ex. 4), and Petitioner points out that he has completed treatment for substance abuse problems. However, although he cites this completion of substance abuse treatment as evidence that he does not pose a realistic threat of becoming a repeat offender, Petitioner does not claim, and the record does not suggest, that his substance abuse problem reduced his culpability.

I therefore find that no mitigating factors justify reducing the period of exclusion.

2. The regulations presume that increasing the period of exclusion based on the presence of the listed aggravating factors furthers the remedial purposes of the statute, and I have no authority to look behind that underlying premise.

Petitioner advances a fundamental challenge to the premises underlying the regulations, arguing that the I.G. has not demonstrated how the presence of its delineated aggravating factors argues in favor of extending the period of exclusion. Petitioner states:

[i]t is incumbent upon the Inspector General to articulate why the presence of aggravating factors compels the conclusion that extending the period of exclusion furthers those remedial purposes.

P. Brief at 3. He points out that he has accepted responsibility for his actions, and suggests that at least two of the so-called aggravating factors, his voluntary surrender of his medical licenses, and his obligation to pay restitution to the victims of his offenses, demonstrate his desire to accept responsibility and make amends for his criminal behavior.

The regulations presume that past conduct creates reasonable inferences as to the degree of risk an individual poses to the programs or program beneficiaries. According to the drafters of those regulations, the presence of an aggravating factor means that the impact on the program or program beneficiaries was more than minimal, and indicates more significant risk to the program. 57 Fed. Reg. 3298, 3315 (1992). The Board has expressed its agreement:

[t]hese factors go to the seriousness of the offenses and the cooperation of the offending party. They are reasonably related to the goal of determining the degree of untrustworthiness of an individual and the future threat posed by that person to the integrity of Federal health care programs.

Joann Fletcher Cash, DAB No. 1725 (2000). The presumption of remedial purpose is incorporated into the regulations themselves. I am bound by those regulations and have no authority to second-guess their underlying soundness. 42 C.F.R. § 1005.4(c)(1).

IV. Conclusion

For the reasons set forth above, I conclude that the I.G. was authorized, under section 1128(a)(1), to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Considering the totality of the evidence, I find the 15-year exclusion to be within a reasonable range.

Carolyn Cozad Hughes

Administrative Law Judge

1. The term "State health care program" includes a State's Medicaid program. Section 1128(h)(1) of the Act; 42 U.S.C. § 1320a-7(h)(1).