Shakeel A. Kahn, M.D., DAB CR6091 (2022)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Shakeel Kahn, M.D. (Dr. Kahn or Petitioner) from participating in Medicare, Medicaid, and all other federal health care programs for a minimum period of 45 years under § 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(4)).  Dr. Kahn requested a hearing before an administrative law judge to dispute the exclusion.  For the reasons stated below, I affirm the IG’s exclusion of Dr. Kahn from program participation for 45 years.

I.      Background and Procedural History

By letter dated June 30, 2021, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs under section 1128(a)(4) of the Act for a period of 45 years due to his conviction for a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Exhibit (Ex.) 1.  The IG relied on four aggravating factors to extend the term of Petitioner’s exclusion to 45 years.  Id.  Petitioner timely requested a

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hearing before an administrative law judge (ALJ), and Judge Bill Thomas was designated to hear and decide this case.1

Judge Thomas held a pre-hearing telephone conference on November 2, 2021, the substance of which is summarized in the November 5, 2021 Order Summarizing Pre-Hearing Conference and Setting Briefing Schedule (Summary Order).  Among other things, the parties were directed to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and exhibits in support thereof.  Summary Order at 5-6.

The IG filed a brief (IG Br.) and five proposed exhibits (Exs.) 1-5 on December 9, 2021. On December 20, 2021, Petitioner filed a Motion to Adjourn or Otherwise Stay Proceedings Pending Supreme Court Review.  The IG filed a Response, opposing the motion.  Judge Thomas issued on Order dated January 13, 2022, denying Petitioner’s request to adjourn or stay the proceedings.

On February 14, 2022, Petitioner filed a Motion to Extend Petitioner’s Deadline to File Informal Brief, citing COVID quarantines and prison lock-downs with resulting lack of access to legal materials and communication limitations as the basis for the motion.  On the same date, he filed a Motion Challenging The Jurisdiction Of The Inspector General (Jur. Motion), asserting that he is not subject to the jurisdiction of the Act or the Inspector General because he was not enrolled in Medicare, Medicaid, or any state health care program at the time of his alleged conviction or at any time after 2012.  On February 25, 2022, Judge Thomas issued an Order extending the exchange deadline but deferred ruling on the jurisdictional challenge until the IG filed a reply brief.  Petitioner filed a brief (P. Br.) on March 25, 2022.  The IG then submitted a reply brief (IG Reply).

II.      Admission of Exhibits and Decision on the Record

In the absence of any objection, IG Exs. 1-5 are admitted into evidence.  Neither party indicated a hearing was necessary or identified proposed witnesses.  As a result, an in-person hearing would serve no purpose and the matter may be decided on the written record.  See Civ. Remedies Div. P. 19(d).

III.     Issues

Whether the IG has a basis to exclude Petitioner from participation in federal health care programs under section 1128(a)(4) of the Act, and if so, whether the length of the exclusion, 45 years, is reasonable.  42 C.F.R. § 1001.2007.

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IV.     Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to a hearing before an ALJ and judicial review of the final action of the Secretary of Health and Human Services (Secretary).  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, while the rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3.

The Secretary must exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted for an offense which occurred after August 21, 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  42 U.S.C. § 1320a-7(a)(4); see also 42 C.F.R. § 1001.101(d).

An individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court, regardless of whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  42 U.S.C. § 1320a-7(i).  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) provides that an exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years.  The exclusion is effective twenty days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The period of exclusion may be extended based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b).  Mitigating factors are considered as a basis for reducing the period of exclusion only if aggravating factors justify an exclusion of longer than five years.  42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(c); Summary Order at 4-5.

V.      Jurisdiction

Because Petitioner timely requested a hearing, I have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

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As noted above, Petitioner filed a motion challenging the jurisdiction of the IG to exclude him on the basis that he is not subject to the jurisdiction of the Act or the IG because he was not enrolled in Medicare, Medicaid, or any state health care program at the time of his alleged conviction or at any time after 2012.  Jur. Motion.  Petitioner argues that, because he could not be excluded under section 1128(a)(1) as a threshold matter (i.e., there was no delivery of a health care item or service “under Medicare or a state health care program”), he cannot be excluded under section 1128(a)(4).  Jur. Motion at 2.  I find Petitioner’s argument unpersuasive.  The two subsections provide independent authority for exclusion, and exclusion under subsection (a)(4) does not depend on whether the individual meets the requirements for exclusion under subsection (a)(1).  Further, the IG seeks to exclude Petitioner under the provisions of section 1128(a)(4) of the Act, which does not require enrollment in Medicare, Medicaid, or any state health care program to be applicable and instead mandates exclusion based upon a conviction of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  As a result, there is no basis to find that the IG was not authorized to bring an exclusion action and this motion is denied. 

VI.     Findings of Fact, Conclusions of Law, and Analysis

My findings of fact and conclusions of law are set forth below in bold and italics. 

A.  There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(4) of the Act. 

Section 1128(a)(4) of the Act mandates that the Secretary exclude from program participation any individual or entity convicted of a felony criminal offense “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  See 42 C.F.R. § 1001.101(d).  As discussed below, the IG has established, by preponderance of the evidence, the elements necessary to exclude Petitioner.  

1.  Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(4) of the Act for which exclusion was required. 

On August 19, 2019, the United States District Court for the District of Wyoming entered an amended Judgment, finding Petitioner guilty of multiple offenses, including the following: 

• Conspiracy to Dispense and Distribute Oxycodone, Alprazolam, Hydromorphone, and Carisoprodol, Resulting in Death, in violation of 21 U.S.C.§ 841(a)(1), (b)(1)(C) and (b)(2);
• Possession of Firearms in Furtherance of a Federal Drug Trafficking Crime, in violation of 18 U.S.C. § 924(c)(1);
• Dispensing of Oxycodone, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C);

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• Possession with Intent to Distribute Oxycodone and Aid and Abet, in violation of 21 U.S.C § 841(a)(1) and (b)(1)(C) and 18 U.S.C. § 2;
• Unlawful Use of a Communications Facility, in violation of 21 U.S.C. § 843(b);
• Dispensing of Oxycodone and Aid and Abet, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C);
• Continuing Criminal Enterprise, in violation of 21 U.S.C. § 848(a), (b) and (c); and
• Engaging in Monetary Transactions Derived from Specified Unlawful Activity, in violation of 18 U.S.C. § 1957. 

IG Ex. 4; see also IG Ex. 2.  As a result of these convictions, the District Court sentenced Petitioner to 300 months of imprisonment.  IG Ex. 4 at 4.  

Multiple offenses above, by their own descriptions, constitute felony criminal offenses “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  Moreover, according to a third superseding indictment, all of the above offenses were based on Petitioner’s prescribing large amounts of Oxycodone and other controlled substances to his patients outside the usual course of professional practice and to patients without a legitimate medical need.  See, e.g., IG Ex. 2 at 3. 

However, Petitioner initially argues that he was not convicted of a felony.  P. Br. at 1-2.  He asserts that his conviction and sentence are under appeal at the United States Supreme Court, and oral arguments were held in his case on March 1, 2022.  He states that the conviction and sentence will be overturned and “[h]ence the conviction cannot be said to be final.”  P. Br. at 2.  He then disagreed with the assertion of the IG that his conviction was related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  P. Br. at 3.  The rationale he provided for this argument is that for a prescription to be valid, it must have been issued for a legitimate medical purpose in the usual course of professional practice.  He asserted that because the prescriptions in question were filled by independent pharmacists after determining that the prescriptions were issued for a “legitimate medical purpose and in the usual course of professional practice,” there was no unlawful prescription or dispensing of a controlled substance.  P. Br. at 2. 

The essence of Petitioner’s position is that he was not, in fact, “convicted” of an offense for which exclusion is required.  Considering first his argument that there is no “final” conviction, I note that the statute does not require an individual to have exhausted all possible appeals, before that individual is considered “convicted.”  To the contrary, under 42 U.S.C. § 1320a-7(i), an individual is “convicted” of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court, regardless of whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or nolo contendere is accepted by a court; or (4) the individual has entered into a first offender program,

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deferred adjudication program, or other arrangement where a judgment of conviction is withheld.  As noted, the District Court found Petitioner guilty of multiple offenses.  So, the fact that Petitioner apparently has an appeal pending at the United States Supreme Court is not relevant.  He has been “convicted” under the statutory definition. 

Similarly, his argument that there were no unlawful prescriptions because a pharmacist filled them only after determining they were issued for a legitimate medical purpose and in the usual course of professional practice is another attempt to challenge the underlying convictions.  However, the relevant regulations are quite clear that Petitioner does not have a right to a hearing on this issue.  42 C.F.R. § 1001.2007(d) provides that Petitioner may not attack, and I may not review the underlying conviction where the facts were determined and a final decision was made.  The underlying convictions are not reviewable and Petitioner may not collaterally attack them either on substantive or procedural grounds in this appeal.  42 C.F.R. § 1001.2007(d). 

Given this, I find that Petitioner has been convicted of multiple felony criminal offenses “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  

B.  Petitioner must be excluded for a minimum of five years. 

Because I have concluded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(4), Petitioner must be excluded for a minimum period of five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).  The IG has no discretion to impose a lesser period of exclusion, and I may not reduce the period of exclusion below five years. 

C.  The IG has proven four aggravating factors to support an exclusion period beyond the five-year statutory minimum. 

The regulations establish aggravating factors that the IG may consider to lengthen the period of exclusion beyond the five-year minimum for a mandatory exclusion.  42 C.F.R. § 1001.102(b).  In this case, the IG applied four aggravating factors to impose a 45-year term of exclusion:  (1) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; (2) the acts that resulted in the conviction, or similar acts, had a significant adverse physical, mental or financial impact on one or more program beneficiaries or other individuals; (3) the sentence imposed by the court included incarceration; and (4) the 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 the imposition of the exclusion.  IG Ex. 1 at 2; 42 C.F.R. § 1001.102(b)(2)-(3), (5), (9).  I must uphold the IG’s determination as to the length of exclusion so long as it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  As outlined below, the IG’s determination is reasonable.  

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1.  The acts that resulted in the conviction were committed over a period of one year or more. 

The IG found justification for a period of exclusion greater than five years, in part, because the acts that resulted in the conviction were committed over a period of one year or more.  IG Ex. 2.  According to the Amended Judgment dated August 19, 2019, the United States District Court for the District of Wyoming adjudicated Petitioner guilty of specified offenses that were committed during the period from June 9, 2014, through November 30, 2016.  IG Ex. 4 at 1-2.  Petitioner offers no evidence to the contrary on this factor.  The purpose of the aggravating factor found at 42 C.F.R. § 1001.102(b)(2) “is to distinguish . . . petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period of time.”  Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003).  Because the acts that resulted in Petitioner’s conviction were committed over a period of over two years, an enhancement to the mandatory minimum five-year period of exclusion is justified.  

2.  The acts that resulted in the conviction had a significant adverse physical, mental, or financial impact on one or more program beneficiaries or other individuals. 

The IG found an aggravating factor at 42 C.F.R. § 1001.102(b)(3) in the fact that Petitioner issued prescriptions for controlled substances to an individual who then obtained the controlled substances from those prescriptions and used those controlled substances, which resulted in the individual’s death.  IG Ex. 1 at 2.  Petitioner adamantly disagreed with this finding, in essence arguing that he was not responsible for the death of a patient.  He first stated that the official cause of death for the patient in question was “accidental misuse of her medication.”  P. Br. at 3.  In addition, he argued that he was not charged criminally with negligent homicide, murder, or any variation of those charges and he was not civilly liable for her death.  Id.  Rather, he asserted that the individual in question “did not follow proper directions for her medicine, instead choosing to crush and snort her oxycodone and xanax.”  Id.  However, the IG is not required to show that Petitioner’s acts legally caused the patient’s death.  The regulation simply requires the acts to have “had a significant adverse physical . . . impact” on an individual.  Petitioner issued prescriptions for controlled substances that were used by an individual and resulted in her death, and the United States District Court for the District of Wyoming found Petitioner guilty of the offense of Conspiracy to Dispense and Distribute Oxycodone, Alprazolam, Hydromorphone, and Carisoprodol, Resulting in Death.  IG Ex. 4 at 1;IG Ex. 2 at 6-7 (“[Individual J.B.] caused to be filled prescriptions issued by [Petitioner] for controlled substances including Oxycodone, Carisoprodol and Alprazolam.  [J.B.]  used the controlled substances obtained via these prescriptions . . . which resulted in her death on March 19, 2015 . . . .”).  The District Court’s judgment of guilt on this charge establishes that Petitioner’s acts did, in fact, contribute to the death of

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a patient, the most significant adverse physical impact.  As a result, I find that the IG reasonably applied this aggravating factor in determining Petitioner’s period of exclusion.  

3.  The IG established the sentence imposed against Petitioner included a period of incarceration. 

The IG determined the aggravating factor found at 42 C.F.R. § 1001.102(b)(5) is applicable because Petitioner’s criminal conviction resulted in a sentence of incarceration.2   IG Ex. 1 at 2.  There is no dispute that the District Court sentenced Petitioner to a 300-month term of incarceration for the convictions upon which the IG’s exclusion is based.  IG Ex. 4 at 4.  This is, unquestionably, a substantial sentence.  Gracia L. Mayard, M.D., DAB No. 2767 at 7 (2017) (characterizing a 54-month sentence of incarceration as a “substantial prison term”); Jason Hollady, M.D., DAB No. 1855 at 8 (2002) (characterizing even a sentence of nine months as “relatively substantial”).  The extensive period of incarceration imposed by the District Court demonstrates the severity of Petitioner’s offense, as well as his level of untrustworthiness.  Eugene Goldman, M.D.,DAB No. 2635 at 5 (2015).  Petitioner offers no evidence to the contrary relating to this factor.  Therefore, I conclude the IG reasonably applied this aggravating factor in determining Petitioner’s period of exclusion.  

4.  Petitioner had been the subject of other adverse action by a Federal, State, or local government agency or board based on the same set of circumstances that served as the basis for the imposition of the exclusion. 

The IG applied the provisions of 42 C.F.R. § 1001.102(b)(9), finding that the suspension of Petitioner’s license to practice as a medical doctor by the Arizona State Board of Medicine was an additional aggravating factor.  IG Ex. 1 at 2.  The IG submitted an August 5, 2016 Order from the Arizona Medical Board that suspended Petitioner’s license.  In the order, the Board reviewed Petitioner’s treatment of multiple patients between December 2011 and June 2016 and found that there were “significant deviations from the standard of care relating to [his] prescribing of opioid medications.”  IG Ex. 5 at 1.  Petitioner does not argue that the adverse action by the Arizona Medical Board was not based on the same set of circumstances that served as the basis for the imposition for the exclusion.  Rather, he disputes the IG’s application of this factor, arguing that his Arizona license to practice medicine was only summarily suspended and he remains

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entitled to a formal hearing on the matter.  P. Br. at 3.  Petitioner is correct that, in fact, the Order for Summary Suspension of License from the Arizona Medical Board dated August 5, 2016, states that the “Interim Findings of Fact and Conclusions of Law constitute written notice to [Petitioner] of the charges of unprofessional conduct made by the Board against him” and that “[Petitioner] is entitled to a formal hearing to defend these charges.”  IG Ex. 5 at 5.  However, in the same Order, the Board clearly states that “[Petitioner] is prohibited from practicing medicine in the State of Arizona and is prohibited from prescribing any form of treatment including prescription medications or injections of any kind until receiving permission from the Board to do so.”  Id.  The fact that he may have a right to a hearing on the issue of the suspension does not negate the fact that his license was suspended by the Board and presumably continues to be suspended.  The above regulation does not require that the action taken by a Federal, state or local government agency or board be “final,” only that it was an adverse action and was based on the same set of circumstances that serves as the basis for the imposition of the exclusion.  As a result, I find that the IG reasonably applied this aggravating factor in determining Petitioner’s period of exclusion. 

D.  No mitigating factors exist in this case upon which I may rely to reduce the exclusion period. 

The IG considered no mitigating factors in determining the length of Petitioner’s exclusion.  IG Ex. 1; IG Br. at 8.  Petitioner cites as a mitigating factor the consideration of his case and the future overturning of his conviction by the United States Supreme Court.  P. Br. at 4.  However, the applicable regulations identify only three mitigating factors I may consider to reduce a period of exclusion:  (1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; (2) the record in the criminal proceedings 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).  Because Petitioner has not cited any of the regulatory mitigating factors, I am unable to reduce the period of exclusion on that basis. 

E.  A 45-year exclusion period is not unreasonable. 

I must uphold the IG’s determination as to the length of exclusion unless it is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  It is important to note that it is the quality of the aggravating (or mitigating) factors that is most important when considering the length of exclusion, and not the sheer number of aggravating factors that are present in a given case.  I cannot say the IG’s decision to impose a 45-year period of exclusion is unreasonable.  Petitioner was convicted of multiple crimes that involved a large, sophisticated conspiracy to distribute controlled substances to individuals from all over the United States.  The severe nature of Petitioner’s offenses resulted in the imposition of

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an extraordinary 300-month sentence of incarceration by the United States District Court.  IG Ex. 4 at 4.  The fact that the United States District Court thought it appropriate to impose such a lengthy sentence of incarceration reflects the serious nature of Petitioner’s criminal offense and reinforces the reasonableness of the period of exclusion selected by the IG.  Dr. Frank R. Pennington, M.D., DAB No. 1786 at 8 (2001) (“The ALJ did not err in considering the fact and length of the incarceration as an appropriate measure of the relative severity of the offense.”).  

Both the severity and duration of Petitioner’s offenses lend credence to the IG’s judgment that Petitioner lacks the trustworthiness necessary to participate in federal health care programs and should therefore be excluded from doing so for a significant period of time.  The period of exclusion imposed by the IG is not unreasonable. 

VII.    Conclusion

For the foregoing reasons, I conclude the IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs, and find that the 45-year period of exclusion selected by the IG is not unreasonable.  

1. The case was re-assigned to me on May 11, 2022.
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2. The IG stated in the Exclusion notice that the “court sentenced you to 300 months of incarceration.”  IG Ex. 1 at 2.  The total number of months of incarceration to which Petitioner was sentenced is significantly higher than this but some of the sentences are served concurrently.  IG Ex. 4 at 4.  This decision will use the 300 months of incarceration, given that this represents only the consecutive months to be served.
• back to note 2