SUBJECT:

Hazem Garada, M.D.,

Petitioner,

The Inspector General

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Hazem Garada, M.D., from participating in Medicare and other federally funded health care programs for a period of at least 15 years.

I. Background

Petitioner is a physician. On March 31, 2005, the I.G. notified Petitioner that he was being excluded from participating in Medicare and other federally funded health care programs for a period of at least 15 years. The I.G.'s rationale for excluding Petitioner was that he had been convicted of criminal offenses subject to the exclusion requirements of sections 1128(a)(1) and 1128(a)(3) of the Social Security Act (Act). Additionally, the I.G. determined that there were aggravating factors that supported the 15-year exclusion term.

Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. I held a pre-hearing conference and subsequently issued a pre-hearing order in which I directed the parties to file exchanges of briefs addressing the merits of the case and any proposed exhibits. I advised the parties that I might decide the case based on their written submissions. However, I left open the possibility that I would schedule an in-person hearing in order to take testimony if either party satisfied me that he had relevant testimony to present that did not duplicate evidence that is present in an exhibit.

The I.G. filed a brief and nine proposed exhibits (I.G. Ex. 1 - I.G. Ex. 9). Petitioner filed a brief, dated November 7, 2005. In addition, Petitioner filed several statements, some of which have documents attached to them. All of Petitioner's statements, including his November 7, 2005 brief, appear to have material in them in the nature of testimony. I am designating each of Petitioner's submissions with an exhibit number in order to assure that the record accurately reflects what he has filed. In chronological order, Petitioner's filings and my exhibit designations are as follows:

� Request to Present Testimony in Person (with attachments), July 4, 2005 - P. Ex. 1;

� Petitioner['s] First Reply to I.G. Motion & Petitioner['s] Proposed Finding to Above Motion (with attachment), July 28, 2005 - P. Ex. 2;

� Undated memorandum addressed to Senior Attorney Maxine Winerman, received August 29, 2005 - P. Ex. 3;

� Notice of Entry of Request of Continu[ance] (with attachments), September 21, 2005 - P. Ex. 4;

� Notice of Request for Extension (with attachments), October 1, 2005 - P. Ex. 5;

� Petitioner's brief (with attachments), October 29, 2005 - P. Ex. 6;

� Petitioner's sur-reply brief (with attachments), December 1, 2005 - P. Ex. 7. ⁽¹⁾

Petitioner did not object to my receiving into evidence the exhibits offered by the I.G. The I.G. did not object to my receiving the exhibits offered by Petitioner. Consequently, I receive into evidence I.G. Ex. 1 - I.G. Ex. 9 and P. Ex. 1 - P. Ex. 7.

II. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. An in-person hearing is necessary in order to receive evidence from Petitioner;

2. Petitioner was convicted of criminal offenses as described in sections 1128(a)(1) and 1128(a)(3) of the Act;

3. An exclusion of at least 15 years is reasonable.

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 separate heading. I discuss each Finding in detail.

1. An in-person hearing is not warranted.

Petitioner demands an in-person hearing in this case. In order to decide whether he should have one I consider each of his arguments as to the merits of the case and decide whether the testimony he proffers in support of it is relevant to either the issues of authority to exclude or to the duration of Petitioner's exclusion. I find no basis to grant Petitioner's request to hear this case in person because I conclude that all of Petitioner's proffered testimony is irrelevant.

The Secretary published regulations at two parts of 42 C.F.R. which implement and govern the I.G.'s authority to impose exclusions pursuant to section 1128 of the Act. At 42 C.F.R. Part 1001 the Secretary published regulations which establish the substantive criteria for imposing exclusions pursuant to section 1128 and for determining the duration of exclusions. At 42 C.F.R. Part 1005 the Secretary published regulations which establish criteria for conducting a hearing in which an excluded person may challenge the I.G.'s determination to exclude.

In a case in which an excluded individual challenges the I.G.'s determination the administrative law judge must:

conduct a hearing on the record in order to determine whether the petitioner or respondent should be held liable under this part.

42 C.F.R. � 1005.15(a). The regulation does not define what is meant by the term "hearing on the record." It does not explain what evidence an administrative law judge must receive in a hearing in which an exclusion determination is challenged nor does it define the circumstances under which a hearing must be held in person.

However, the regulation does not exist in a vacuum. Hearing rights that are conferred by the Part 1005 regulations must be implemented in the context of the exclusion criteria that are set forth in the Act and in the Part 1001 regulations. An administrative law judge's authority and responsibility to conduct a hearing pursuant to the Part 1005 regulations is not plenary nor is it bounded by general considerations of equity. Put simply, an administrative law judge may hold a hearing only as to those issues that are relevant to the I.G.'s authority to exclude and to the reasonableness of an exclusion determination. And, that authority is limited and shaped considerably by the Act and the Part 1001 regulations.

Where a party proffers evidence in an exclusion case, the administrative law judge is obligated to ask, first, whether that evidence is relevant to any of the issues that he or she may hear or decide. If that evidence is relevant then the administrative law judge must look at the form in which it is presented and manage the hearing process accordingly. The Act and the Part 1001 regulations establish factors that may be considered by an administrative law judge in deciding whether an exclusion is authorized or reasonable. The regulation that defines the issues that an administrative law judge may hear and decide in a case involving an exclusion imposed pursuant to sections 1128(a)(1) or 1128(a)(3) is 42 C.F.R. � 1001.102. Evidence that relates to one or more of the factors that are set forth in that section is relevant and must be received. Evidence that does not relate to one or more of those factors - no matter how compelling a party may consider it to be - is irrelevant and may not be received by the administrative law judge.

Petitioner acknowledges that there is no dispute concerning the I.G.'s authority to exclude him pursuant to sections 1128(a)(1) and 1128(a)(3). P. Ex. 2, at 1. All of Petitioner's arguments, and his proffered testimony, address the issue of whether the 15-year length of the exclusion that was imposed against him is reasonable.

In his request to present testimony in person Petitioner requests that various individuals be subpoenaed to testify in order to establish Petitioner's trustworthiness "in the matter of . . . [Petitioner's] exclusion." P. Ex. 1, at 2. This is not a basis for me to grant Petitioner an in-person hearing. Petitioner's trustworthiness to provide care to program beneficiaries and recipients is the issue that, ultimately, I must consider in order to decide whether the I.G.'s exclusion determination is reasonable. But evidence which I may receive as to the issue of trustworthiness consists exclusively of evidence relating to the factors that are set forth at 42 C.F.R. � 1001.102. I cannot receive evidence premised on the general argument that it is relevant to Petitioner's overall trustworthiness if that evidence does not relate to one or more of the regulatory factors that must be considered to decide trustworthiness.

Petitioner also asserts that he wishes to present testimony to address a lawsuit that, apparently, he was a party to in 1995. P. Ex. 1, at 3. Additionally, Petitioner argues that he should be allowed to present testimony pertaining to his dismissal from employment as an emergency room physician in Kentucky in 1995. P. Ex. 1, at 4 - 7. Petitioner also seeks to present testimony concerning a 1996 State action involving his license to practice medicine in Virginia. Id., at 8 - 10. All of this proposed testimony is irrelevant for the reason that it relates to none of the factors that are identified as relating to trustworthiness at 42 C.F.R. � 1001.102.

Petitioner also proffers testimony concerning the events that led to his conviction of the criminal offenses that are the basis for the I.G.'s exclusion determination. P. Ex. 1, at 11 - 13. In effect, Petitioner denies or at least attempts to minimize his guilt. However, Petitioner's allegations of diminished culpability are not relevant to the issue of the length of his exclusion because they do not relate to any of the regulatory factors set forth at 42 C.F.R. � 1001.102.

Finally, Petitioner asserts that he has cooperated with federal law enforcement agencies and seeks to present testimony that addresses his cooperation. P. Ex. 1, at 13 - 16; attachment B1 to P. Ex. 1. He contends that witness testimony will disclose his "cooperation with . . . [the I.G.] during 1994-1995 in revealing foreign health care provider employment problems in exchange for permanent residency immigration [status] . . . ." P. Ex. 1, at 3. Petitioner alleges also that, in 2004, he was debriefed by FBI agents in reference to drug trafficking and immigration suspects who were possibly linked to terrorism. P. Ex. 1, Attachment B1, at 2. He contends that he also was debriefed concerning other health care providers who may have committed fraud. Id., at 2, 3. Petitioner requests that I permit him to testify about this alleged cooperation. Additionally, he demands that I compel the testimony of a federal agent who, allegedly, will corroborate Petitioner's cooperation. P. Ex. 7, at 2 - 3.

The fact that an excluded individual extends cooperation to law enforcement authorities is not, in and of itself, sufficient grounds for reducing the duration of an exclusion. Reduction of an exclusion is justified only where cooperation produces a positive result. 42 C.F.R. � 1001.102(c)(3)(i) - (iii). In order to be mitigating, an excluded individual's cooperation must lead to: others being convicted of crimes or excluded from Medicare, Medicaid and all other federal health care programs; additional cases being investigated or reports being issued by a law enforcement agency identifying program vulnerabilities or weaknesses; or the imposition against anyone of a civil money penalty or assessment. Id.

For purposes of ruling on Petitioner's demand for an in-person hearing I accept as true Petitioner's representations concerning the cooperation he gave to federal law enforcement authorities. However, his proffer is insufficient to justify an in-person hearing at which he would testify or at which I would compel the testimony of the federal agent whom Petitioner names in his request. Although Petitioner asserts that he has cooperated with law enforcement authorities he has not alleged that his cooperation produced any of the positive results that must occur in order to support a reduction of an exclusion. I find no basis to receive testimony absent a proffer by Petitioner that his cooperation led to positive results.

2. Petitioner was convicted of criminal offenses as described in sections 1128(a)(1) and 1128(a)(3) of the Act.

The undisputed evidence in this case establishes that Petitioner was convicted of criminal offenses that are described at sections 1128(a)(1) and 1128(a)(3) of the Act. Consequently, the I.G. is mandated to exclude Petitioner from participating in Medicare and other federally funded health care programs.

On June 4, 2004 Petitioner pled guilty to a federal felony information charging him with having committed health care fraud. I.G. Ex. 1, at 1. Petitioner pled guilty to an allegation that, from about January 2000 to in or about October 2003, he unlawfully, knowingly, and intentionally executed, and attempted to execute, a scheme or artifice to defraud a health care benefit program and to obtain, by means of false and fraudulent pretenses and representations, money or property owned by health care benefit programs in connection with the delivery of or payment of health care benefits, items and services. I.G. Ex. 3, at 1. Specifically, Petitioner pled guilty to the allegation that he knowingly "upcoded" claims for services that he made to the Medicare program and to another health insurer in order to obtain reimbursement for complex items or services when, in fact, he performed either no reimbursable service or performed a less complex service for which he was entitled to less reimbursement than the amount that he claimed. Id., at 2 - 3.

Section 1128(a)(1) of the Act directs the I.G. to exclude an individual who is convicted of a criminal offense that is related to the delivery of an item or service under Medicare or a State health care program (a State Medicaid program). Petitioner's conviction clearly was for an offense that is described at section 1128(a)(1). Petitioner pled guilty to misrepresenting the services he provided to Medicare beneficiaries in order to obtain reimbursement from Medicare which he was not entitled to receive.

Section 1128(a)(3) requires the I.G. to exclude an individual who is convicted of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct which occurred after August 21, 1996, and that was committed in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program other than those described at section 1128(a)(1). Petitioner's conviction was for a felony committed after August 21, 1996 (his crimes transpired between January 2000 and October 2003), was committed in connection with a health care item or service, and consisted of fraud. Consequently, it falls squarely within the purview of section 1128(a)(3).

3. An exclusion of at least 15 years is reasonable.

The Act requires that any exclusion that is imposed pursuant to sections 1128(a)(1) or 1128(a)(3) be for a duration of at least five years. Act, section 1128(c)(3)(B). The I.G. is authorized to impose an exclusion of more than five years in such a case. However, the duration of any exclusion that is for more than the five-year minimum period must be reasonable.

Section 1128 of the Act has a remedial purpose, which is to protect federally funded programs and their recipients and beneficiaries from individuals who are untrustworthy. An exclusion which satisfies this remedial purpose is reasonable.

The regulations which govern the length of exclusions imposed pursuant to section 1128 - in this case, 42 C.F.R. � 1001.102 - establish the criteria by which reasonableness may be measured. The regulatory criteria, set forth as aggravating or mitigating factors, function as rules of evidence in deciding whether an exclusion is reasonable. Evidence that relates to one or more of the aggravating or mitigating factors is relevant and may be considered on the issue of reasonableness. However, as is the case with rules of evidence, the presence of evidence relating to an aggravating or a mitigating factor does not dictate an exclusion of any particular length. The regulations establish what evidence is relevant to deciding whether an exclusion is reasonable. They do not assign weight to evidence. Nor do the regulations require an exclusion of a particular duration based on the presence of a certain number of aggravating or mitigating factors.

Here, the I.G. offered evidence that is relevant to four of the aggravating factors identified at 42 C.F.R. � 1001.102. Petitioner did not rebut that evidence, nor did Petitioner offer evidence that relates to any of the mitigating factors that are identified in the regulation. Specifically, the I.G. proved that:

� The acts resulting in Petitioner's conviction, or similar acts, caused or were intended to cause a financial loss to a government program or to one or more entities in an amount of $5,000 or more. 42 C.F.R. � 1001.102(b)(1). The I.G. proved that Petitioner agreed to pay, and was sentenced to pay, restitution consisting of $101,198 to the Medicare program and $89,783 to a Blue Cross and Blue Shield program. I.G. Ex. 1, at 5; I.G. Ex. 2, at 5.

� The acts resulting in Petitioner's conviction, or similar acts, were committed over a period of one year or more. 42 C.F.R. � 1001.102(b)(2). Petitioner pled guilty to a criminal scheme that began in about January 2000 and continued to about October 2003. I.G. Ex. 3, at 1.

� Petitioner's sentence for his crime included a term of incarceration. 42 C.F.R. � 1001.102(b)(5). Petitioner was sentenced to a term of 18 months' imprisonment. I.G. Ex. 1, at 2.

� Petitioner was subject to an adverse action by a State government agency that was based on the same facts that are the basis for Petitioner's exclusion. 42 C.F.R. � 1001.102(b)(9). On August 12, 2004, the Virginia Department of Health Professions ordered that Petitioner's license to practice medicine in Virginia be suspended based on Petitioner's conviction of a felony charge of health care fraud. I.G. Ex. 6, at 1. ⁽²⁾

As I discuss above and in detail, at Finding 1, Petitioner has offered evidence which he asserts is mitigating and which he contends offsets the aggravating factors established by the I.G. I have explained already why I find this evidence not to be relevant.

Petitioner's principal argument appears to be that his crimes are but a minor element of a busy solo practice. According to Petitioner, his unlawful claims amounted to only 20 percent of his overall billings during his five years of solo practice. P. Ex. 2, at 2. Moreover, according to Petitioner, during this period he rendered a valuable service to residents of his community. Id. Petitioner urges that his unlawful conduct be evaluated in the context of his legitimate practice. At bottom, he contends that he is less culpable than would be suggested by considering only the evidence relating to aggravation, and for that reason his exclusion should be reduced.

I am not persuaded by Petitioner's argument. It does not address any of the permissible mitigating factors and is, strictly speaking, irrelevant. But, even assuming Petitioner's assertions to be true, they do not really detract from the evidence offered by the I.G. which shows Petitioner to be highly untrustworthy.

Taken as a whole, the evidence offered by the I.G. that relates to aggravating factors shows that Petitioner engaged in a concerted plan over a period of several years to defraud Medicare and other health care providers. The extent of Petitioner's criminal activity is made evident by the duration of his crimes but also by the amount of restitution he was sentenced to pay. The fact that Petitioner's unlawful billing may have comprised 20 percent of his total overall claims is not comforting. It underscores the fact that much of Petitioner's claims activities over a period of several years was fraudulent.

I find Petitioner to be a highly untrustworthy individual. The duration of his crimes, the amount of restitution he was sentenced to pay, and other aggravating factors all support this conclusion. In light of that, an exclusion of at least 15 years is reasonable.

Steven T. Kessel

Administrative Law Judge

1. Petitioner filed his sur-reply brief in response to the I.G.'s reply brief. My pre-hearing order did not provide for the filing of a sur-reply by Petitioner but I am accepting it.

2. Petitioner had agreed to surrender permanently his licenses to practice medicine in Virginia and in other jurisdictions as part of his plea agreement. I.G. Ex. 2, at 9. In his brief Petitioner asserts, without explanation, that his license to practice medicine in Virginia "was not accepted to be surrendered by the Board of Medicine." P. Ex. 6, at 4. It appears from that brief that Petitioner is arguing that he had not surrendered his license to practice medicine in Virginia. However, in his sur-reply brief, Petitioner asserts that he surrendered his license on March 4, 2004. P. Ex. 7, at 2. It is not necessary for me to resolve the issue of whether Petitioner surrendered his license versus whether it was suspended because, in either case, the criteria for an aggravating factor are met.