Andrew Louis Barrett, DAB CR5298 (2019)

DECISION ON REMAND

This case is before me pursuant to remand from the Departmental Appeals Board (Board). Andrew Louis Barrett, DAB No. 2887 (2018) (Remand Decision). My prior decision in this matter, docketed in the Civil Remedies Division under C-17-537 and issued on February 5, 2018,1  * affirmed the decision of the Inspector General (IG) of the U.S. Department of Health and Human Services to exclude Petitioner, Andrew Louis Barrett, from participation in Medicare, Medicaid, and all other federal health care programs for at least 23 years, pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).

Petitioner appealed my decision, relying on evidence concerning the mitigating factor of cooperation which he did not present to me. During the pendency of his appeal, the IG reduced his exclusion period to 20 years. As a result, the Board remanded this matter to me for the limited purpose of considering the reasonableness of the new 20-year

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exclusion period, and to allow Petitioner to present evidence concerning his cooperation to me. Petitioner now challenges the reasonableness of the 20-year exclusion period. For the reasons stated below, I conclude that the IG had a basis for excluding Petitioner from program participation and that the 20-year exclusion period is not unreasonable. I therefore affirm the IG's exclusion determination.

I. Case Background and Procedural History

On February 28, 2017, the IG notified Petitioner of his exclusion from participation in Medicare, Medicaid, and all federal health care programs under 42 U.S.C. § 1320a‑7(a)(1) for a period of at least 23 years. C-17-537, IG Ex. 1.2 The IG based the exclusion on Petitioner's conviction for a criminal offense in the United States District Court for the Eastern District of New York (District Court) related to the delivery of an item or service under Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services under any such program. Id. at 1.

The IG identified three aggravating factors as a basis for increasing the exclusion period from five to 23 years: (1) the criminal acts resulting in Petitioner's conviction caused or were intended to cause financial loss to a government program or other entities of at least $50,000, in this case approximately $2,700,000; (2) the District Court's sentence included a term of incarceration, in this case 43 months; and (3) Petitioner was the subject of another adverse action based on the same set of circumstances, specifically when the New York State Office of Medicaid Inspector General excluded him from participation in the Medicaid program. Id. at 2.

Petitioner requested a hearing before an administrative law judge to dispute the length of the exclusion. This case was originally assigned to Administrative Law Judge Scott Anderson. On May 17, 2017, Judge Anderson held a pre-hearing conference by telephone with counsel for the parties, the substance of which is summarized in his May 22, 2017 Order Summarizing Pre-hearing Conference (Summary Order). At the pre-hearing conference, Petitioner's counsel, Jeffrey Granat, stated that he intended to represent Petitioner in only a limited capacity, which did not include filing a pre-hearing brief on his behalf.  Summary Order at 1. He requested that Judge Anderson stay the proceedings for approximately three years, until Petitioner's release from prison. Judge Anderson determined a stay to be inappropriate and denied Petitioner's request; I concur with his reasoning. Id. at 1-2. Judge Anderson acknowledged Petitioner's state of incarceration and indicated Petitioner could request additional time to submit his pre-hearing exchange if necessary. Id. at 2.

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Following the pre-hearing conference, Mr. Granat withdrew from representation of Petitioner, but requested continued access to the DAB E-file system in order to assist Petitioner and his family if needed; Judge Anderson granted his request, subject to Petitioner's objection. Id. On June 2, 2017, this case was transferred to me to hear and decide.

The IG timely filed its brief on July 10, 2017, with exhibits marked as IG Exhibits 1 through 8. After I granted him additional time, Petitioner, proceeding pro se, filed a brief on October 11, 2017, with exhibits marked as Petitioner's Exhibits 1 through 11. The IG filed a reply brief on November 3, 2017. Petitioner subsequently requested leave to file a sur-reply, which I denied on December 8, 2017.

I issued my decision in C-17-537 on February 5, 2018, affirming the basis for exclusion by the IG as well as the reasonableness of the 23-year period of exclusion selected by the IG. See Andrew Louis Barrett, DAB CR5020 (2018) (Prior Decision), attached hereto as Attachment 1. Petitioner timely appealed my decision to the Board, asserting the period of exclusion was not reasonable and that his cooperation with authorities warranted a shorter exclusion. Remand Decision at 1. Petitioner submitted evidence of his cooperation to the Board for consideration. Id.

Prior to submitting its response to Petitioner's appeal, the IG notified Petitioner it had reviewed the evidence he submitted, determined it to be a mitigating factor under the applicable regulations, and decided to amend the initial notice of exclusion to account for his cooperation by reducing his period of exclusion to 20 years.  IG Br. at 2. As a result, the Board determined it appropriate to remand this matter to me for the limited purpose of considering whether the revised exclusion determination is unreasonable, in light of the previously established aggravating factors and newly established mitigating factor of Petitioner's cooperation. Remand Decision at 1. To that end, the IG filed its brief on November 13, 2018 (IG Br.), accompanied by one exhibit (IG Ex. 1). Petitioner filed a response brief on February 7, 2019, accompanied by four exhibits (P. Exs. 1-4). The IG filed a reply (IG Reply) on February 22, 2019.

II. Decision on the Record

A. Exhibits

On remand, the IG submitted one proposed exhibit, while Petitioner submitted four.  IG Ex. 1; P. Exs. 1-4.  As neither party has objected to any of these exhibits, I admit them into the record. The exhibits admitted in C-17-537 remain part of the record in this case.

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B. Hearing

Neither party has identified witnesses or otherwise requested a hearing in this matter. Accordingly, I will decide this case on the briefs submitted and the exhibits of record, as well as the evidence and arguments proffered in C-17-537.

III. Issues

Whether the length of the exclusion imposed by the IG is unreasonable. See 42 C.F.R. § 1001.2007(a)(1)(ii).

IV. Jurisdiction

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

V. Findings of Fact, Conclusions of Law, and Analysis3

1. The Findings of Fact and Conclusions of Law Numbered 1 through 3(c) of my Prior Decision are hereby restated and adopted.

2. Petitioner has established a mitigating factor under 42 C.F.R. § 1001.102(c).

The governing regulations identify cooperation with government officials as a mitigating factor the IG must consider where such cooperation results in others being convicted or excluded, where it results in the investigation of additional cases or reports being issued, or where a penalty or assessment is imposed as a result. 42 C.F.R. § 1001.102(c)(3). The first two conditions potentially apply here. I say potentially because the evidence of cooperation found in Petitioner's sentencing transcript is in fact quite sparse, consisting of a statement by his defense attorney that Petitioner was approached by an FDA agent and made two controlled purchases, which he believed resulted in a successful prosecution. IG Ex. 1 at 48. Given that it is Petitioner's burden to demonstrate a mitigating factor, it is arguable whether he has in fact done so, since there is no actual evidence of a conviction resulting from Petitioner's cooperation, aside from his defense attorney's say-so. And the investigation by the FDA did not occur as a result of Petitioner's cooperation; it preceded it.

That being said, Petitioner's late-submitted evidence of cooperation formed the basis of the Board's remand in this case, and the IG conceded Petitioner had established cooperation sufficient to be considered as a mitigating factor.  IG Br. at 9. I therefore

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find that Petitioner has established a mitigating factor pursuant to 42 C.F.R. § 1001.102(c)(3).

3. A 20-year exclusion period is not unreasonable.

I previously determined a 23-year exclusion period was not unreasonable, given the quality of the aggravating factors the IG proved, but with no consideration of factors of mitigation. Prior Decision at 8-10. The limited issue now before me is whether a 20-year exclusion period is reasonable, given the same aggravating factors, but also considering the mitigating factor Petitioner has established.

The IG posits that a 3-year reduction resulting in a 20-year exclusion period is not unreasonable, given the egregiousness of the aggravating factors and the minimal nature of Petitioner's cooperation. IG Br. at 10-12. Petitioner objects to the IG's characterization of his cooperation as minimal, and reiterates his belief that the exclusion period should be limited to the terms of the sentence imposed by the U.S. District Court, arguing in essence that the IG is estopped from excluding him any longer than the period determined by the District Court as part of his conditions of supervised release. P. Br. at 2-4.

Petitioner's argument is simply without merit. I have already rejected the notion that any condition imposed by the District Court as part of his criminal sentencing would limit the IG's ability to exclude him under the Social Security Act, explaining that the District Court had a different purpose in setting terms of supervised release that had no relation to the IG's authority to determine a period of exclusion. Prior Decision at 9. The Board similarly rejected this argument as well, explaining that determination of a criminal sentence is subject to factors not present in exclusion determinations, and that the goals of criminal sentencing are quite different from those of the IG in setting exclusion periods (the former is meant to punish, rehabilitate, and deter, while the latter is remedial and designed to protect program beneficiaries). Remand Decision at 6-7. Given that Petitioner has twice made this argument and twice been provided an explanation for why it is incorrect, further discussion on my part is futile and unnecessary.

I am therefore left to consider whether the 20-year exclusion period selected by the IG after Petitioner proffered evidence of mitigation is unreasonable. 42 C.F.R. § 1001.2007(a)(1)(ii). In making my determination, the quality of the aggravating (or mitigating) factors is of greater significance than the mere number of the factors present in a given case. As the Secretary of Health and Human Services stated in the preamble to the final rule establishing the exclusion regulations:

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case. For example,

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in one case many aggravating factors may exist, but the subject's cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating. Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating. The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue.

57 Fed. Reg. 3298, 3314-15 (Jan. 29, 1992)

Petitioner contends the IG's determination was arbitrary and capricious, and insufficiently justified in the IG's briefing. P. Br. at 1-2. The IG asserts that the 3-year reduction was appropriate given the seriousness of the aggravating factors present, and the minimal nature of Petitioner's cooperation. IG Br. at 9. As I have explained, the regulations require me not to determine a reasonable period of exclusion, but to assess whether the IG's determination is unreasonable. 57 Fed. Reg. at 3321 ("So long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule. We believe that the deference § 1001.2007(a) grants to the OIG is appropriate, given the OIG's vast experience in implementing exclusions under these authorities.").

Here, I cannot say the IG's determination is unreasonable. I find the IG's conclusion that Petitioner's cooperation was a minimal mitigating factor, while the aggravating factors were significant, to be consistent with the record before me. As I have already noted, the loss to federal health care programs Petitioner caused was staggering. Prior Decision at 8-9. He participated in a scheme to defraud Medicare and Medicaid that resulted in losses of approximately $2.7 million. C-17-537, IG Ex. 2 at 4. This amount of loss is more than 50 times the $50,000 threshold to be considered aggravating. See 42 C.F.R. § 1001.102(b)(1). Financial loss is an "exceptional aggravating factor" when the loss is "very substantially greater than the statutory standard." Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003). The IG reasonably concluded this aggravating factor was particularly significant in assessing Petitioner's trustworthiness to participate in federal health care programs.

The IG also properly took note of the fact that Petitioner's criminal conduct resulted in a significant sentence of incarceration, in this case, 43 months. IG Br. at 7. A sentence of incarceration of any duration requires consideration by the regulations as an aggravating factor; a longer period demonstrates greater criminal liability and reasonably justifies a longer period of exclusion. I cannot say the IG erred in according Petitioner's 43-month

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sentence of incarceration great significance in evaluating his trustworthiness to participate in federal health care programs.4 Finally, the nature of Petitioner's offense caused the state of New York to exclude him from participation in its Medicaid program, further reinforcing the gravity of Petitioner's offense. C-17-537, IG Exs. 6-7.

In the face of these significant aggravating circumstances, the IG assessed Petitioner's cooperation as a mitigating factor and found it to be minimal. IG Br. at 10. I cannot say this assessment is inaccurate. Petitioner cooperated in an unrelated FDA investigation that appears to have resulted in an arrest and perhaps a conviction, though that it is not clearly documented in the record before me. IG Ex. 1 at 48. The IG also notes the timing of Petitioner's cooperation to be problematic, as it occurred while he was committing the criminal offenses at issue here (suggesting, I presume, a lack of sincerity or remorse by Petitioner that his cooperation might otherwise signal). IG Br. at 10; IG Reply at 3. Finally, the IG points to other cases before the Board where an excluded party's cooperation was deemed significant based on the numbers of convictions or losses recovered. IG Br. at 11 (citations omitted).

I am satisfied the IG gave due consideration to the quality of both aggravating and mitigating factors in assessing the appropriate period of exclusion to impose. It is apparent that the IG did not capriciously or arbitrarily determine to impose a 20-year period of exclusion. Instead, the IG has explained its reasoning in assessing Petitioner's cooperation as minimal and in considering the aggravating factors to be of greater significance. Ultimately, it would not matter if I disagreed with the IG, as I do not have the authority to substitute my own judgment or impose a period of exclusion that seems more reasonable to me. See Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 8 (2011). But in this case, the IG has demonstrated it gave particularized consideration to the quality of both aggravating and mitigating factors here in determining the period of exclusion. Petitioner's criminal conduct had a substantial financial impact on the Medicare and Medicaid programs, and demonstrated his profound untrustworthiness to participate in federal health care programs. The length of exclusion imposed by the IG is not unreasonable.

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VI. Conclusion

For the reasons discussed above, I affirm the IG's determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for a period of 20 years.

1. Because it is the practice of the Civil Remedies Division to assign a new docket number to matters on remand, I hereby incorporate by reference my prior decision, including its findings and analysis concerning the basis for Petitioner's exclusion, which the Board affirmed. That decision is attached as an addendum hereto to allow for publication of one integrated decision.
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*. Attachment 1: Andrew Louis Barrett, DAB CR5020 (2019). When the decision was originally issued, a printed copy of CR5020 was attached to the decision.
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2. Document 9a in the official case file maintained in the DAB E-file system for C-17-537; for clarity and simplicity, I will cite to exhibits by the exhibit numbers assigned by the parties when filed, not the document numbers assigned by DAB.
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3. My findings of fact and conclusions of law appear in bold and italics.
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4. In deciding to impose this lengthy sentence of incarceration, the District Court characterized Petitioner's fraud scheme against the Medicare and Medicaid programs as "lucrative, sophisticated, and difficult to detect." IG Ex. 1 at 87-88.
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