Salman Ali, DPT and Roohi Ali, DPT, DAB No. 3048 (2021)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioners Salman Ali and Roohi Ali appeal decisions by an Administrative Law Judge (ALJ) affirming the determinations of the Inspector General (I.G.) to exclude Petitioners from participation in all federal health care programs pursuant to section 1128(a)(1) of the Social Security Act (Act) based on their convictions for conspiracy to commit health care fraud.  Salman Ali, DPT, DAB CR5846 (2021) (S. Ali ALJ Decision); Roohi Ali, DPT, DAB CR5845 (2021) (R. Ali ALJ Decision).  The ALJ further concluded that excluding S. Ali for 20 years and R. Ali for 10 years was not unreasonable based on the existence of three aggravating factors and one mitigating factor in both cases.

For the reasons explained below, we conclude that the ALJ Decisions are supported by substantial evidence and are free of legal error.  Therefore, we affirm the ALJ Decisions in this consolidated decision for both Petitioners.

Legal Background

Section 1128(a)(1) of the Act provides that the Secretary of Health and Human Services “shall exclude” from participation in federal health care programs an individual who “has been convicted of a criminal offense related to the delivery of an item or service under title XVIII” of the Act (Medicare).

The mandatory minimum period for an exclusion imposed under section 1128(a) is five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).1  The I.G. may extend the mandatory minimum period of exclusion based on the application of the aggravating factors found at 42 C.F.R. § 1001.102(b).  As relevant here, those factors include:

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(1) The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more.  (The entire amount of financial loss to such government agencies or programs or to other entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made);

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; [and]

* * *

(5) The sentence imposed by the court included incarceration[.]

42 C.F.R. § 1001.102(b). 

If the I.G. extends an exclusion period based on the application of one or more aggravating factors in 42 C.F.R. § 1001.102(b), the I.G. may then apply any mitigating factor specified in section 1001.102(c) (and only those specified in this regulation) to reduce the length of the exclusion period to no less than the mandatory minimum five years.  As relevant here, the mitigating factors include:

The individual’s or entity’s cooperation with Federal or State officials resulted in—

(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

42 C.F.R. § 1001.102(c)(3).

An individual is “convicted” of a criminal offense “when a judgment of conviction has been entered against the individual . . . by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged” or “when a plea of guilty or nolo

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contendere by the individual . . . has been accepted by a Federal, State, or local court[.]”  Act § 1128(i)(1), (i)(3); see also 42 C.F.R. § 1001.2 (similarly defining “Convicted”). 

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the I.G. had a basis for the exclusion and whether an exclusion longer than the mandatory minimum period is unreasonable in light of any of the applicable aggravating and mitigating factors specified in the regulations.  42 C.F.R. §§ 1001.2007(a), 1005.2(a).  A party dissatisfied with the ALJ’s decision may appeal it to the Board.  Id. § 1005.21(a).

Case Background2

Petitioners S. Ali and R. Ali, husband and wife and licensed physical therapists, controlled and operated Universal Homecare, Inc., Abacus Home Health Care, Inc., and Orchard Home Health Care, Inc. (collectively, “Ali Companies”), which were home health agencies that purported to provide home health services to Medicare beneficiaries.  I.G. Ex. 4, at 3-4; I.G. Ex. 5, at 3-4. 

On May 14, 2013, the U.S. government filed a criminal information in the U.S. District Court for the Eastern District of Michigan (court) charging Petitioners with one count of health care fraud conspiracy in violation of 18 U.S.C. § 1349.  I.G. Ex. 3.  The information states that, from approximately October 2005 through March 2013, Petitioners conspired with others to defraud Medicare by, among other things, submitting false claims for Medicare payment using valid Medicare provider numbers for the Ali Companies and diverting approximately $15.1 million in fraudulent proceeds for the personal use and benefit of Petitioners and their co-conspirators.  See id.  Petitioners pleaded guilty to that charge, conceding they billed Medicare for home health visits that never occurred; offered and provided kickbacks and bribes to beneficiary recruiters and to secure physician referrals; and billed and were paid by Medicare for services not rendered and/or medically unnecessary services.  See I.G. Ex. 4, at 3-5; I.G. Ex. 5, at 3-5.  Of the $15.1 million in fraudulent proceeds, S. Ali admitted to causing Medicare to pay $12,089,078.28 for false and fraudulent claims (I.G. Ex. 5, at 5) and R. Ali admitted to causing Medicare to pay $5,771,010.10 for false and fraudulent claims (I.G. Ex. 4, at 5). 

On January 16, 2020, the court accepted Petitioners’ plea agreements.  The court ordered S. Ali to pay $12,089,078.28 in restitution and sentenced him to 32 months of incarceration and ordered R. Ali to pay $5,771,010.10 in restitution and sentenced her to 18 months of incarceration.  I.G. Ex. 6, at 1-2, 6; I.G. Ex. 7, at 1-2, 6.  After the court’s

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entry of a Preliminary Order of Forfeiture, however, Petitioners and the government agreed during sentencing to remove joint and several liability and reduce S. Ali’s forfeiture money judgment to $6,318,068.18 to account for the money judgment amount attributed to R. Ali.  I.G. Ex. 6, at 9 (reducing the original judgment amount ($12,089,078.28) by the judgment amount attributed to R. Ali ($5,771,010.10)); I.G. Ex. 9, at 8-9 (same).  The government further agreed to credit both Petitioners for the value of certain assets previously forfeited to the government.  I.G. Ex. 6, at 9; I.G. Ex. 7, at 9; I.G. Ex. 8, at 8-9; I.G. Ex. 9, at 8-9.  The sentencing judge thus entered forfeiture money judgments against S. Ali in the amount of $5,391,436.18 and against R. Ali in the amount of $4,844,378.10.  I.G. Ex. 6, at 9; I.G. Ex. 7, at 9; I.G. Ex. 8, at 8-9; I.G. Ex. 9, at 8-9.

By separate letters dated July 31, 2020, the I.G. notified Petitioners that she was excluding S. Ali for 20 years and R. Ali for 10 years from participation in Medicare, Medicaid, and all federal health care programs, pursuant to section 1128(a)(1) of the Act, based on their convictions for a criminal offense related to the delivery of an item or service under Medicare.  The I.G. informed Petitioners that their exclusions would take effect 20 days from the date of the exclusion notices.  The I.G. also explained that she was extending the minimum exclusion period of five years required under section 1128(c)(3)(B) for both Petitioners based on the application of three aggravating factors:

(1) financial loss to a government program of $50,000 or more (stating the court ordered S. Ali and R. Ali to pay approximately $12,089,000 and $5,771,000, respectively, in restitution);

(2) the acts resulting in Petitioners’ convictions being committed over a period of one year or more (stating the acts were committed from about October 2005 to March 2013); and

(3) Petitioners’ sentences included incarceration (stating the court sentenced S. Ali to 32 months and R. Ali to 18 months of incarceration).

See I.G. Exs. 1, at 1-2; 2, at 1-2.  The I.G. further stated that she considered one mitigating circumstance – Petitioners’ cooperation with federal or state officials.  See I.G. Exs. 1, at 2; 2, at 2.    

ALJ Proceedings and Decisions

Petitioners filed separate but substantially similar appeals, seeking to have their exclusion periods reduced.  Petitioners asserted that the I.G. “either neglected or refused to consider” their cooperation with federal authorities, which was “truly extraordinary, and far beyond what almost all cooperators provided the government in such cases.”  Requests for hearing (RFHs) at 1.  Petitioners maintained that they “assisted the federal government for an unprecedented 7 years” before their sentencing, which included “very

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proactive cooperation . . . without seeking any quid pro quo in return,” but the I.G. did not consider the full extent of their cooperation and assistance.  RFHs at 2-4.  Petitioners also maintained that because the court ordered them not to participate in Medicare and all other federal health care programs, Petitioners effectively had been excluded from participation in Medicare for years even before the I.G. excluded them from participation.  S. Ali RFH at 2; R. Ali RFH at 3.

In its single brief submitted for both appeals, the I.G. contended that the lengths of Petitioners’ exclusions were reasonable based on the application of three aggravating factors and one mitigating factor.  Specifically, the I.G. maintained, the amount of restitution ordered by the court “significantly exceed[ed] the $50,000 regulatory threshold”; Petitioners’ criminal conduct “significantly exceed[ed] the one-year regulatory threshold”; and “Petitioners[’] sentences included periods of incarceration.”  I.G. Informal Br. at 4-9.  The I.G. also asserted that she “expressly considered” Petitioners’ cooperation with federal authorities as a mitigating factor, but that “the presence of the sole mitigating factor does not ‘counterbalance’ or ‘entirely negate’ the three aggravating factors.”  Id. at 9-10.  Finally, the I.G. argued that Petitioners’ exclusion periods were “supported by previous Board decisions where the I.G. considered the presence of three aggravating factors and one mitigating factor.”  Id. at 10 (citing Mohamad Ahmad Bazzi, DAB No. 2917 (2018) and Juan de Leon, Jr., DAB No. 2533 (2013)).  

The ALJ proceeded to decision based on the written record, noting that neither the I.G. nor Petitioners indicated a hearing was necessary.  The ALJ issued two separate decisions, affirming the I.G.’s determinations to exclude S. Ali for 20 years and R. Ali for 10 years from all federal health care programs.  ALJ Decisions at 2, 10.

The ALJ found that Petitioners were convicted of an offense related to the delivery of a health care item or service under Medicare and thus must be excluded under section 1128(a)(1) of the Act.  S. Ali ALJ Decision at 2-3; R. Ali ALJ Decision at 3-4.  The ALJ further found that the I.G. had established three aggravating factors that justified exclusion periods longer than the required minimum five years and correctly applied one mitigating factor.  S. Ali ALJ Decision at 3-5; R. Ali ALJ Decision at 4-5. 

The ALJ noted that in their plea agreements, S. Ali and R. Ali admitted that their criminal conduct caused Medicare to lose $12,089,078.28 and $5,771,010.10, respectively, and that the court ordered Petitioners to pay restitution in those amounts to the Medicare Trust Fund.  The ALJ noted that the Board “has recognized that restitution is an appropriate measure to demonstrate program loss.”  ALJ Decisions at 4 (citing Summit S. Shah, M.D., DAB No. 2836, at 8 (2017)).  The ALJ thus determined that the I.G. established that Petitioners’ criminal conduct resulted in “considerably more than $50,000 in loss to the Medicare program,” the threshold amount needed to establish the aggravating factor in 42 C.F.R. § 1001.102(b)(1).  ALJ Decisions at 4.  The ALJ also

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noted that the I.G. established that Petitioners’ criminal conduct “lasted from approximately October 2005 to March 2013” and, thus, “occurred for over one year,” establishing the aggravating factor in 42 C.F.R. § 1001.102(b)(2).  ALJ Decisions at 4.  The ALJ stated:

[Petitioners’] persistent criminal conduct reflects a sustained lack of integrity, not a momentary lapse of judgment.  Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003) (observing that ‘the purpose of this aggravating factor ‘is to distinguish . . . petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period . . . .’’).

ALJ Decisions at 6-7.  The ALJ further determined that the I.G. established that S. Ali and R. Ali were sentenced to 32 months and 18 months of incarceration, respectively, establishing the aggravating factor in 42 C.F.R. § 1001.102(b)(5).  ALJ Decisions at 4.

The ALJ noted that the I.G. “concede[d] the presence” of the mitigating factor in 42 C.F.R. § 1001.102(c)(3) (ALJ Decisions at 5), that is, Petitioners’ cooperation with the government.  The ALJ also noted that, in consideration of Petitioners’ “substantial and profound cooperation,” the I.G. “provided an equally substantial and profound reduction” of Petitioners’ exclusion periods.  ALJ Decisions at 10.  Nevertheless, after considering the full circumstances of Petitioners’ cases, which included three significant aggravating factors, and other comparable cases in which exclusions for periods significantly longer than those imposed on Petitioners were upheld (see ALJ Decisions at 10), the ALJ concluded that the lengthened exclusion periods in Petitioners’ cases were within a reasonable range.  The ALJ wrote in each decision:   

Petitioner’s cooperation was indeed significant, and I do not understate the impact it had in delivering numerous individuals to justice.  However, I cannot ignore the fact that [Petitioner’s] cooperation occurred after more than seven long years of criminal conduct that caused . . . [millions of dollars] in loss to the Medicare program, and warranted, in the view of the [court], a significant sentence of incarceration despite that cooperation.  Nor can I set aside the fact that Petitioner made no effort to cease [the] criminal conduct or assist the government until [Petitioner] came to believe the government was in the process of investigating [Petitioner]. [Petitioner’s] cooperation thereafter, however notable, more likely reflects a vigorous sense of self-preservation, not a sudden affliction of integrity.

ALJ Decisions at 7.

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Standard of Review

The Board reviews a disputed issue of fact as to whether the ALJ’s decision “is supported by substantial evidence on the whole record.”  42 C.F.R. § 1005.21(h).  The Board reviews a disputed issue of law as to whether the ALJ’s decision “is erroneous.”  Id.

Analysis

Before the Board, Petitioners do not dispute the fact of their convictions for conspiracy to commit health care fraud, thus establishing a legal basis for exclusion under section 1128(a)(1) of the Act.  Nor do they challenge the applicability of the three aggravating factors the I.G. considered to lengthen the mandatory minimum exclusion periods, or that the mitigating factor in 42 C.F.R. § 1001.102(c)(3) applies to their cases.  They do not assert that the other mitigating factors (42 C.F.R. § 1001.102(c)(1), (c)(2)) apply. 

Petitioners’ chief assertion is that their exclusions are unreasonably long, for two reasons.  Request for review (RR)3 at 5.  First, according to Petitioners, the ALJ did not give sufficient weight to the mitigating factor in section 1001.102(c)(3), that is, their cooperation with the government, to offset the effect of the aggravating factors.  Id. at 13-17.  Second, they assert – for the first time on appeal – that the amount of the program loss was not correctly calculated for purposes of the aggravating factor in 42 C.F.R. § 1001.102(b)(1).  They maintain that the court determined they were responsible for financial loss in amounts lower than those the I.G. considered as restitution amounts, which reasonably could be understood as an assertion that the aggravating factor in section 1001.102(b)(1) should thus carry less weight.  See id. at 8-12.  Petitioners also assert that they should receive “credit” for “time [already] serve[d]” because they complied with the court’s order not to participate in any federal health care program.  Id. at 18.  Put differently, Petitioners are asserting that they effectively were excluded from participation from federal health care programs for some time before the I.G. determined to exclude them for 20 years (S. Ali) and 10 years (R. Ali).  We discuss Petitioners’ arguments in more detail below and explain why we affirm the ALJ Decisions.

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1.  The ALJ’s conclusion that extending S. Ali’s exclusion to 20 years and R. Ali’s exclusion to 10 years based on three significant aggravating factors and one mitigating factor is not unreasonable, is supported by substantial evidence, and is free of legal error.

a.   The ALJ appropriately afforded substantial weight to the aggravating factor of program loss (42 C.F.R. § 1001.102(b)(1)).

Petitioners admitted in their plea agreements that:

Between approximately October 2005 and approximately March 2013, [Petitioners] at the Ali Companies submitted claims to and received from the Medicare program over $15 million for the cost of physical therapy and other services. 

I.G. Exs. 5, at 5; 4, at 5.  S. Ali admitted that, “[o]f that amount” (over $15 million), he “caused to be paid $12,089,078.28 in false and fraudulent claims” and R. Ali admitted that she “caused to be paid $5,771,010.10 in false and fraudulent claims.”  I.G. Exs. 5, at 5; 4, at 5.  As the ALJ stated, and we agree, Petitioners’ criminal conduct resulted in a “staggering loss to the Medicare program” that justified extending the required minimum exclusion periods.  See ALJ Decisions at 6.  The Board has held that “it is entirely reasonable to consider a program loss amount substantially larger than” the threshold program loss amount to be “an ‘exceptional aggravating factor’ to be accorded significant weight.”  See Laura Leyva, DAB No. 2704, at 9-10 (2016), aff’d, Leyva v. Price, No. 8:16-CV-1986, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017).  Based on these loss amounts, S. Ali’s and R. Ali’s criminal conduct caused Medicare to lose amounts 240 times and 115 times the aggravating factor’s $50,000 threshold amount, respectively.  Accordingly, the record evidence supports the ALJ’s determination to afford significant weight to the aggravating factor.   

b.   The ALJ appropriately afforded substantial weight to the aggravating factor of commission of criminal acts for one year or more (42 C.F.R. § 1001.102(b)(2)).

Petitioners do not dispute that their criminal conduct “lasted from approximately October 2005 to March 2013.”  ALJ Decisions at 3-4; see RR at 5; see also I.G. Ex. 4, at 2-5, I.G. Ex. 5, at 2-5.  The duration of Petitioners’ scheme, therefore, was over seven times the amount of time (one year) required for the aggravating factor in section 1001.102(b)(2) to apply. 

“[T]he purpose of this aggravating factor ‘is to distinguish between petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period . . . .’”  Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454, at 7 (2012) (quoting Donald A. Burstein, Ph.D., DAB No. 1865,at 8 (2003)).  The Board has

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found, for example, that a three-year scheme, less than half the duration of Petitioners’ conduct, demonstrates an “ongoing lack of integrity.”  Patwardhan, DAB No. 2454, at 7.  Moreover, as the ALJ noted, the Board has also found that criminal conduct lasting more than four years is “a protracted period” that shows the individual “is extremely untrustworthy.”  S. Ali ALJ Decision at 6 (quoting Rosa Velia Serrano, DAB No. 2923, at 9 (2019)).  Substantial evidence in the record therefore amply supports the ALJ’s finding that “[t]he IG properly gave this aggravating factor significant weight in determining” to extend Petitioners’ exclusions given their seven-year criminal conspiracy.  ALJ Decisions at 7.     

c.   The ALJ appropriately afforded substantial weight to the aggravating factor of incarceration (42 C.F.R. § 1001.102(b)(5)).

Petitioners do not challenge the ALJ’s finding that, as a result of their plea agreements, the court sentenced S. Ali to 32 months and R. Ali to 18 months of incarceration.  ALJ Decisions at 4; I.G. Ex. 8, at 2; I.G. Ex. 9, at 2.  The ALJ found that the extended duration of their incarceration “demanded a significant period of exclusion.”  ALJ Decisions at 7.  Indeed, both Petitioners were sentenced to incarceration for periods longer than nine months, which the Board has previously characterized as “relatively substantial.”  Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855, at 12 (2002).  Moreover, S. Ali was sentenced to incarceration for a period significantly longer than 24 months, a period the Board has described in another case as “a substantial term to be considered under section 1001.102(b)(5).”  Edwin L. Fuentes, DAB No. 2988, at 12 (2020), appeal docketed, Fuentes v. Azar, No. 4:20-cv-00026 (W.D. Va. May 4, 2020).  Accordingly, the record evidence supports the ALJ’s finding that the lengthy duration of incarceration imposed on Petitioners was a significant aggravating factor.

d. The ALJ appropriately evaluated the mitigating factor of cooperation with federal authorities against the weight of three significant aggravating factors.

Petitioners assert that the single mitigating factor of cooperation ought to be assigned greater weight to offset the effect of the aggravating factors and to reduce the extended exclusion periods.  RR at 13-17.  Petitioners assert that their voluntary cooperation was “extraordinary,” spanning almost eight years and the tenure of at least nine federal prosecutors.  Id. at 13-15.  Petitioners also allege that “they exposed (and helped convict) not just a few, but rather scores of health care professionals and others including ‘marketers’” and further advised the U.S. government about other “bad actors in the

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health care fraud profession of whom the government had not by then even been aware.”4   Id. at 14.  As support for their argument, Petitioners submitted to the Board the transcript of their January 16, 2020 sentencing hearing before the court, which indicates that the government acknowledged the extent of Petitioners’ cooperation.  RR Exhibit 4.  Petitioners point to the transcript as evidence of significant cooperation with the government.  RR at 16-17. 

The records of the ALJ proceedings do not show that the transcript of the sentencing hearing was submitted to the ALJ.  The regulations provide that the Board “will not consider any issue not raised in the parties’ briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.”  42 C.F.R. § 1005.21(e).  Also, “[i]f any party demonstrates to the satisfaction of the [Board] that additional evidence not presented” earlier, to the ALJ, “is relevant and material and that there were reasonable grounds for the failure to adduce such evidence at such hearing, the [Board] may remand the matter to the ALJ for consideration of such additional evidence.”  Id. § 1005.21(f).5   Petitioners do not ask the Board to remand these cases to the ALJ for consideration of the transcript, which appears to have been filed in the court’s docket on January 11, 2021 and thus available for submission to the ALJ in late January 2021, when Petitioners submitted their exhibits to the ALJ.   Petitioners have not explained why they did not submit, or could not have submitted, the transcript earlier.  For this reason alone, we decline to remand the cases to the ALJ to consider this new evidence.  Even if Petitioners had “reasonable grounds” for failing to submit this evidence to the ALJ, as we explain below, we see no need to remand the cases to the ALJ for consideration of the transcript.  See id.    

As a general matter, the transcript is relevant to Petitioners’ argument concerning the mitigating factor of cooperation with the government.  However, ultimately, the transcript is not material.  It does not add anything more meaningful or impactful to what the record of the ALJ proceedings and the ALJ’s decisions already show – that the I.G. acknowledged Petitioners’ significant cooperation and considered it when determining a reasonable period of exclusion longer than the mandatory minimum.  On his de novo review, the ALJ fully acknowledged Petitioners’ “substantial and profound” cooperation,

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assigning it significant weight, but nevertheless found that the cooperation did not entirely offset or negate the effect of three significant aggravating factors in each Petitioner’s case.  ALJ Decisions at 10.  Nothing in the transcript is inconsistent with the ALJ’s assessment of the aggravating factors and the mitigating factor.  For these reasons, the transcript, submitted late and without an explanation of why it was submitted late, does little to aid Petitioners’ cause.  We see no need to remand these cases to the ALJ to consider the transcript.6

“The duration of a mandatory exclusion beyond five years is determined by evaluating the aggravating factors and mitigating factors set forth at 42 C.F.R. §§ 1001.102(b) and (c).”  See Craig Richard Wilder, M.D., DAB No. 2416, at 11 (2017).  An ALJ must review the duration of an exclusion de novo and engage in a “case-specific determination of the weight to be accorded each factor, based on a qualitative assessment of the circumstances surrounding the factors in each case.”  Anthony Joseph Moschetto, D.O., DAB No. 3030, at 8 (2021); Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D., DAB No. 2635, at 8 (2015).  Although the ALJ reviews an exclusion period longer than the mandatory minimum de novo, “the ALJ may not substitute his judgment for that of the I.G. or determine what period of exclusion would be ‘better.’”  Paul D. Goldenheim, M.D., et al., DAB No. 2268, at 21 (2009), aff’d sub nom., Friedman v. Sebelius, 755 F.Supp.2d 98 (D.D.C. 2010).  The preamble to 42 C.F.R. Part 1001 explains that the limitation on the ALJ’s authority to review the length of an exclusion is appropriate given the I.G.’s “vast experience in implementing exclusions under these authorities.”  57 Fed. Reg. 3298, 3321 (Jan. 29, 1992). 

The ALJ noted the I.G. had applied the mitigating factor of cooperation and stated he “[did] not understate the impact [Petitioners’ cooperation] had in delivering numerous individuals to justice.”  ALJ Decisions at 7.  However, in determining that the circumstances of Petitioners’ cases, which presented three significant aggravating factors, justified increasing the exclusion periods for both Petitioners, the ALJ observed in each decision:

That Petitioner could participate in a conspiracy targeting the Medicare program and bilk the country’s health insurance safety net of [millions of dollars] reflects a profound level of untrustworthiness to participate as a biller to that program.  Hussein Awada, M.D., DAB No. 2788 at 7 (2017) (“[t]he millions of dollars in losses that Petitioner’s actions caused . . . merits a substantial increase in the length of his exclusion beyond the minimum period”).

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ALJ Decisions at 6.  The ALJ also stated he could not disregard the fact that Petitioners’ “cooperation occurred after more than seven long years of criminal conduct” and that the court imposed on Petitioners “a significant sentence of incarceration despite that cooperation.”  ALJ Decisions at 7.  Accordingly, the ALJ found that Petitioners’ cooperation, “however notable, more likely reflects a vigorous sense of self-preservation, not the sudden affliction of integrity.”  ALJ Decisions at 7.7

Petitioners together conspired to steal millions of dollars from the Medicare program.  They engaged in their illegal scheme for over seven long years.  The nature and duration of their criminal activity raise grave concerns about their trustworthiness to be permitted to participate in federal health care programs.  See Burstein, DAB No. 1865, at 12 (“It is well-established that section 1128 exclusions are remedial in nature, rather than punitive, and are intended to protect federally-funded health care programs from untrustworthy individuals.”).  Moreover, both Petitioners were sentenced to substantial terms of incarceration.  The Board has recognized that an incarceration term may be viewed as a “reasonable proxy . . . for untrustworthiness in the context of deciding how much weight to give the aggravating factor for incarceration.”  Goldman, DAB No. 2635, at 5.  Any one of the three aggravating factors applied in these cases “may be considered an exceptional aggravating factor that could have supported” a significant extension of the mandatory minimum exclusion periods.  See Leyva, DAB No. 2704, at 11 (internal citation omitted). 

Petitioners argue at length that their cooperation was extraordinary and that the I.G. and ALJ failed to give their cooperation proper weight.  But they disregard the ALJ’s qualitative, case-specific weighing and assessment of three significant aggravating factors, along with a significant mitigating factor.  The substantial program loss Petitioners caused, individually and together, the long duration of their criminal activity, and substantial incarceration terms collectively support the extended exclusion periods imposed by the I.G. and upheld by the ALJ.  Petitioners’ cooperation, although significant, does not outweigh the gravity and magnitude of the aggravating factors, which together reflect Petitioners’ lack of trustworthiness.  We disagree that “[t]he ALJ[] went out of his way to negate the Petitioner[s’] contributions.”  RR at 7.  Rather, the ALJ acknowledged “Petitioners’ substantial and profound cooperation,” which resulted in “an equally substantial and profound reduction” in the exclusion periods that would have otherwise been warranted absent the mitigating factor.  ALJ Decisions at 10.  We find no reason to disturb the ALJ’s conclusion that the lengths of Petitioners’ exclusion periods fall within a reasonable range.

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2. Petitioners have identified no error regarding the ALJ’s determination that the I.G. established financial loss to a government program of $50,000 or more, as required by 42 C.F.R. § 1001.102(b)(1).

 Petitioners argue that “the IG and ALJ used the wrong numbers to calculate Salman Ali’s term of exclusion.”  RR at 5.  Specifically, Petitioners contend the ALJ erred by finding that the court ordered S. Ali to pay restitution in the amount of $12,089,078.28.  RR at 8-9.  They further explain that the court reduced the amount of S. Ali’s forfeiture money judgment pursuant to an agreement among Petitioners and the government “to remove joint and several liability” in consideration of Honeycutt v. United States, 137 S. Ct. 1626 (2017).8   See id. at 6 n.3, 8 n.4.  Had the I.G. relied on his amended judgment, S. Ali contends, the I.G. “would have determined that the [c]ourt ordered that [his] restitution amount was $5,391,436.18.”  Id. at 9.  Petitioners state that the ALJ erred in “[u]pholding a term of exclusion based on a wrongly applied restitution amount.”  Id. at 11. 

This is a new argument that was not raised before the ALJ.  “The [Board] will not consider . . . any issue in the briefs that could have been raised before the ALJ but was not.”  42 C.F.R. § 1005.21(e); see also Dike H. Ajiri, DAB No. 2821, at 6 (2017) (stating that petitioner’s failure to introduce an issue before the ALJ “precludes him from now arguing the issue before the Board”).  Petitioners make no attempt to explain why they did not raise and could not have raised the argument below.  For this reason alone, we reject Petitioners’ contention that the ALJ erred in his consideration of the aggravating factor under section 1001.102(b)(1). 

Nevertheless, were we to now consider the argument, we would find no error as to the application of the aggravating factor in section 1001.102(b)(1).  In Honeycutt, the Supreme Court explained that under the doctrine of joint and several liability, each co-conspirator would be held liable for the entire forfeiture judgment “based not only on the property that [one defendant] used in or acquired because of the crime, but also on property obtained by his co-conspirator.”  137 S. Ct. at 1631.  The Supreme Court concluded that applying the doctrine of joint and several liability to two brothers and co-conspirators (where only one retained the property derived from a drug crime) directly contradicted the language of the forfeiture statute, which expressly limits forfeiture to “property flowing from . . . or used in . . . the crime itself” and to property personally “obtained” by a defendant, not by a co-conspirator who did not obtain the property.  Id. at 1632.  Petitioners do not explain why Honeycutt – which arose from a criminal proceeding, not an I.G. exclusion, and which involved issues unrelated to I.G. exclusion

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law and regulations – should govern our analysis of the application of 42 C.F.R. § 1001.102(b)(1) in I.G. exclusion cases.   

Section 1001.102(b)(1) provides that “[t]he entire amount of financial loss to such government agencies or programs . . . will be considered regardless of whether full or partial restitution has been made.”  In his criminal case, S. Ali conceded that he and his co-conspirators “submitted claims to and received from the Medicare program over $15 million,” and of that amount, S. Ali “caused to be paid $12,089,078.28 in false and fraudulent claims.”  I.G. Ex. 5, at 5.  Consequently, the court ordered S. Ali to pay restitution in the amount of $12,089,078.28 to the Medicare program, representing the amount of financial loss he caused to the program.  I.G. Exs. 6, at 6; 9, at 6.  Thus, notwithstanding the fact that S. Ali’s forfeiture amount was reduced to remove joint and several liability (and to credit S. Ali for amounts already forfeited), S. Ali’s plea agreement makes clear that his conduct resulted in a financial loss to Medicare in the amount of $12,089,078.28.  Accordingly, neither the I.G. nor the ALJ erred in relying on that amount for purposes of weighing the aggravating factor at section 1001.102(b)(1) and in determining S. Ali’s 20-year exclusion term.9

Petitioners raise another argument concerning the aggravating factor in section 1001.102(b)(1).  Relying on a number of Board decisions on I.G. exclusions involving what Petitioners believe are significant restitution amounts as exemplars, Petitioners contend that the exclusion periods imposed on them are unreasonably long as compared to the exclusion periods imposed on others in the cited Board cases.  RR at 11-12.  “In those cases,” Petitioners state, “the IG imposed exclusions ranging from the mandatory minimum of five (5) years up to fifteen (15) years, but nothing close to the twenty (20) year exclusion imposed here on Salman Ali.”  Id.

When determining whether an exclusion period “falls within a reasonable range, the ALJ must weigh the aggravating and mitigating factors” and “must evaluate the quality of the circumstances surrounding these factors.”  Jeremy Robinson, D.C., DAB No. 1905, at 11 (2004) (citing Keith Michael Everman, D.C., DAB No. 1880, at 10 (2003)).  No rigid formula applies to determine how the aggravating factors should be weighed.  Rather, a case-specific determination of the weight to be accorded each factor, based on a qualitative assessment of the circumstances surrounding the factors in each case, is made.  Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 5 (2012), appeal dismissed, in part,

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summarily affirmed, in part, Sheth v. Sebelius, No. 13-cv-0448, 2014 WL 11813597 (D.D.C. Jan. 10, 2014), appeal dismissed, Sheth v. Burwell, No. 14–5179, 2015 WL 3372286 (D.C. Cir. May 7, 2015).  As the Board stated in Goldman, DAB No. 2635, at 11, “the assessment of aggravating factors (and mitigating factors, if any), is first and foremost case-specific.  Every case involves a complex interaction of diverse circumstances and regulatory factors with varying weights.  For this very reason case comparisons, while sometimes informative for the ALJ’s or the Board’s decision-making in a given case, are of limited value and ultimately are not dispositive on the question of reasonableness of an exclusion period in a given case.” 

Petitioners do little more than selectively cite a few Board cases without attempting to meaningfully explain how those cases should inform an assessment of the reasonableness of the lengthened exclusion periods imposed on Petitioners.  Here, the ALJ appropriately considered three aggravating factors that are significant individually and collectively and which show that Petitioners are not trustworthy, weighed those factors against the single mitigating factor of cooperation, and determined that the extended exclusion periods were reasonable.  We agree with the ALJ’s assessment.10

3. Exclusion periods may not be reduced based on non-participation in federal health care programs in compliance with the court’s order that preceded the I.G.’s determination to exclude Petitioners.

Petitioners state that they did not participate in any federal health care program for seven years between the time they pleaded guilty and their sentencing in compliance with the court’s order.  They maintain that they should receive “credit” for that period.  RR at 1811 ; I.G. Ex. 4, at 10 & I.G. Ex. 5, at 10 (both stating, pursuant to their plea agreements with the government, Petitioners agreed to “be excluded from Medicare, Medicaid, and all Federal health care programs”); see also P. Ex. 1, at 3, 7.

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If, as here, the I.G. extends an exclusion period based on the application of one or more aggravating factors, the I.G. may consider any of the three mitigating factors in section 1001.102(c) – but only those three mitigating factors – to reduce the length of the exclusion period to no less than the mandatory minimum five years.  42 C.F.R. § 1001.102(c).  Compliance with the court’s order not to participate in federal health care programs, imposed before the I.G. proceeded with her exclusion determinations, is not a cognizable mitigating factor and therefore cannot be the basis for reducing the extended exclusion periods.  Furthermore, although the criminal proceedings in these cases are related to the I.G.’s exclusions because the exclusions are based on the convictions for conspiracy to commit health care fraud, that does not mean that the criminal proceedings determine the duration of the time Petitioners are excluded from participation in federal health care programs in accordance with exclusion law and regulations.

Petitioners’ request for “credit” for time they did not participate in federal health care programs in compliance with the court’s order implicates authorities governing the effective date of an I.G. exclusion.  The Board has repeatedly stated that the effective date of an I.G. exclusion “is determined by regulation and may not be adjusted at the discretion of an ALJ or the Board.”  See Moschetto, DAB No. 3030, at 13 (and cited authorities).  In accordance with 42 C.F.R § 1001.2002(b), which provides that “[t]he exclusion will be effective 20 days from the date of the notice,” Petitioners’ exclusions took effect 20 days from July 31, 2020, the date of the I.G.’s exclusion notices.  See I.G. Exs. 1, 2. 

Conclusion

The Board affirms the ALJ Decisions.

1. We apply the regulations that were in effect when the I.G. issued her determinations to exclude Petitioners.  See Ishtiaq A. Malik, M.D., DAB No. 2962, at 1 n.2 (2019), appeal docketed, Malik v. United States Dep’t of Health & Human Servs., No. 1:20-CV-00091 (E.D. Va. Jan. 28, 2020).
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2. The factual information in this section is drawn from the ALJ Decisions and the record of the ALJ proceedings in S. Ali’s and R. Ali’s cases and is not intended to replace, modify, or supplement the ALJ’s findings of fact.  Since the record in R. Ali’s case is substantially similar to that in S. Ali’s case, we cite to the exhibits in the record in S. Ali’s case (Docket No. C-21-8) unless specified otherwise.
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3. Petitioners filed a single request for review.  The Board consolidated the appeals in the absence of any objection from the parties and directed the parties to file single submissions for both appeals under lead docket number A-21-59.  See Notice of Consolidation, Docket No. A-21-59.  Also, Petitioners submitted documents with their request for review.  The documents marked as Exhibits 1, 2 and 3 duplicate the materials in the record of the ALJ proceedings.  The document marked Exhibit 4 is the transcript of the court’s January 16, 2020 sentencing hearing and is new evidence not submitted to the ALJ.  We will further discuss Exhibit 4 later.
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4. Petitioners describe their cooperative efforts as follows:  “having to remember and preparing details of the illicit activities of others, then preparing with federal agents for their numerous planned undercover activities; taking those meetings with concealed audio and/or video equipment; debriefing with the agents and often federal prosecutors afterward; meeting with agents and federal prosecutors to prepare for the expectation of testifying at every trial that was anticipated.”  RR at 14-15.
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5. The Board’s guidelines for appealing an ALJ decision on an I.G. exclusion, which were uploaded to DAB E-File (electronic filing system) with the ALJ Decisions, include language similar to that in the aforementioned regulations.  See Guidelines – Appellate Review of Decisions of Administrative Law Judges in Cases to Which Procedures in 42 C.F.R. Part 1005 Apply (available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/procedures/index.html), “Completion of the Review Process” ¶¶ (a), (b).
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6. To be clear, we are not suggesting that the extent of Petitioners’ cooperation with the federal government is not material.  Rather, the transcript is not material because it would not affect the outcome of this case for the reasons explained herein.
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7. Petitioners complain about this finding by the ALJ (RR at 16), but there is no dispute that Petitioners did not begin cooperating with the government until they learned they were being investigated.  The sentencing hearing transcript belatedly submitted by Petitioners does not contradict this finding, but supports it.  RR Exhibit 4, at 14 (“But as soon as I was told by some patient that agents had visited them and asked about me, I have tried to do everything I could to fully cooperate with the government.”).
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8. In Honeycutt, the Supreme Court considered the question of whether a defendant may be held jointly and severally liable for property that a co-conspirator derived from a crime but that the defendant himself did not acquire, under a federal statute, 21 U.S.C. § 853, which mandates forfeiture of any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as the result of certain drug crimes.  Honeycutt v. United States, 137 S. Ct. at 1630.
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9. Petitioners also state that R. Ali’s “sentencing document was not reviewed either and the IG [erroneously] relied on” her plea agreement and that the I.G. “should have relied on the Amended Judgment.”  RR at 10.  To the extent that Petitioners contend the I.G. should have considered the amended judgment amount rather than the amount of Medicare losses R. Ali admitted to causing in her plea agreement, we reject that argument.  Section 1001.102(b)(1) provides that “[t]he entire amount of financial loss . . . will be considered regardless of whether full or partial restitution has been made.”  Emphasis added.  Thus, regardless of the credit R. Ali received in her forfeiture money judgment for the value of property already forfeited to the government, her plea agreement makes clear that her conduct resulted in a financial loss to Medicare in the amount of $5,771,010.10.  Neither the I.G. nor the ALJ erred in relying on that amount for purposes of considering the aggravating factor in section 1001.102(b)(1).
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10. While case comparisons are of limited value, the exclusion periods imposed here are consistent with prior I.G. determinations involving similar aggravating and mitigating circumstances.  See, e.g., Mohamad Ahmad Bazzi, DAB No. 2917 (2018) (upholding 18-year exclusion based on criminal conduct lasting five years, approximately $3.5 million in program loss, 32 months of incarceration, and one mitigating factor of cooperation).  The prior Board decisions cited by Petitioners (RR at 12) are inapposite because they involved no incarceration, lesser amounts of program loss, and/or criminal conduct of shorter duration.  Petitioners have not identified any Board decision involving the same aggravating and mitigating circumstances present in their respective cases that required shorter periods of exclusion than those imposed here.
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11. Early in their brief, however, Petitioners stated that they did not participate in federal health care programs from the date of their arraignment to the date of their exclusion by the I.G., a period “close to” seven years.  RR at 5.
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