Waleed Khan, DAB CR6136 (2022)

DECISION

Petitioner, Waleed Khan, was a medical doctor in Texas.  Petitioner pleaded guilty to conspiring to distribute and dispense controlled substances without a legitimate medical purpose and to aiding and abetting the unlawful distribution and dispensing of a controlled substance.  As a result of his guilty plea, Petitioner was sentenced to 72 months of incarceration followed by three years of supervised release. 

Now, the Inspector General (IG) has excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs for seven years.  The IG relies on section 1128(a)(4) of the Social Security Act (Act),¹ which mandates that individuals convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance be excluded.  Petitioner appeals the exclusion.  For the reasons discussed below, I find that the IG properly excluded Petitioner and that a seven‑year exclusion is not unreasonable.

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I.     Background

Petitioner was a physician licensed to practice medicine in Texas who also maintained a Drug Enforcement Agency (DEA) registration number that authorized him to prescribe controlled substances.  IG Exhibit (Ex.) 2 at 3 (¶ 9).  In a superseding indictment filed April 4, 2019, a federal grand jury in the Southern District of Texas charged Petitioner and a co-defendant with one count of conspiracy to unlawfully distribute and dispense controlled substances in violation of 21 U.S.C. § 846 (Count 1) and three counts of unlawfully distributing and dispensing controlled substances and aiding and abetting that offense in violation of 21 U.S.C. § 841 and 18 U.S.C. § 2 (Counts 2-4).  Id. at 1, 4-7 (¶¶ 12-26). 

Under Count 1 of the superseding indictment, the grand jury charged that Petitioner and his co-defendant conspired with a co-conspirator to enrich themselves by engaging in the following activities:  1) prescribing controlled substances without a legitimate medical purpose and outside the scope of professional practice; 2) generating large profits from the prescriptions they issued; and 3) diverting the proceeds from the prescriptions for their personal use.  Id. at 4-5 (¶ 14).  The grand jury charged that, in furtherance of the conspiracy, Petitioner, who was employed at a medical clinic owned by a co-conspirator, signed patient charts and prescriptions for patients he had not personally evaluated and who he knew had not been evaluated by a licensed medical professional.  Id. at 5-6 (¶¶ 16, 17, 22).  Additionally, the grand jury charged that Petitioner pre-signed blank prescriptions for controlled substances, knowing that, in doing so, he was prescribing controlled substances without a legitimate medical purpose and outside the scope of professional practice.  Id. at 6 (¶ 22).  

Under Counts 2-4 of the superseding indictment, the grand jury charged that Petitioner and his co-defendant knowingly and intentionally distributed and dispensed controlled substances unlawfully and aided and abetted each other in doing so.  Id. at 7 (¶ 26).  The grand jury charged that on specified dates in 2015 and 2016, Petitioner and his co-defendant unlawfully distributed and dispensed the Schedule II controlled substance Hydrocodone (brand name Norco) and the Schedule IV controlled substance Carisoprodol (brand name Soma) to patients identified as M.R. and R.M.  Id.; see also id. at 2 (¶ 4). 

On August 20, 2019, Petitioner, who was represented by counsel, pleaded guilty to Counts 1 through 4 of the superseding indictment.  IG Ex. 4 at 1; see also CMS Ex. 3 at 13-14.  Based on Petitioner’s guilty plea, on January 13, 2021, the U.S. District Court for the Southern District of Texas (federal district court) adjudicated

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Petitioner guilty on all counts and sentenced him to 72 months’ imprisonment followed by three years of supervised release.²  IG Ex. 4 at 1-3. 

By letter dated September 30, 2021 (notice letter), the IG notified Petitioner that he was being excluded from Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(4) of the Act for a period of seven years.  IG Ex. 1 at 1.  Petitioner timely requested a hearing before an administrative law judge and the case was assigned to me.  I held a telephone prehearing conference on February 24, 2022, in which both parties participated.  

On February 28, 2022, I issued an Order and Schedule for Filing Briefs and Documentary Evidence (Briefing Order) in which I established a schedule for the parties to exchange their respective arguments and evidence.  Petitioner objected to the Briefing Order on the grounds that it “failed to consider” his argument that the IG should have taken the effects of the COVID-19 pandemic into account in setting the length of his exclusion.  See Departmental Appeals Board (DAB) Electronic Filing System (E-File), Docket Entry # 9.  I sustained Petitioner’s objection and acknowledged Petitioner’s argument regarding the COVID-19 pandemic.  DAB E-File, Docket Entry # 11. 

The IG timely filed a brief and five exhibits (IG Exs. 1-5) in accordance with the Briefing Order.  The IG did not offer any witness testimony.  Petitioner failed to file his brief and exhibits by the deadline I had set.  Therefore, on May 27, 2022, I ordered Petitioner to show cause why I should not dismiss his case for abandonment (Show Cause Order).  Petitioner responded to the Show Cause Order.  DAB E-File, Docket Entry # 13.  I accepted Petitioner’s response in satisfaction of the Show Cause Order.  DAB E-File, Docket Entry # 14.  After Petitioner submitted his response, the IG filed a reply brief (IG Reply). 

I treat Petitioner’s response to the Show Cause Order as his brief (P. Br.).  In his brief, Petitioner requests to appear at a hearing to present evidence and argument in support of his position that the COVID-19 pandemic renders the length of his exclusion unreasonable.  However, Petitioner did not offer any documentary evidence or witness testimony in support of his position.  As my Briefing Order explained, I will hold a hearing only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony.  Briefing Order ¶ 9.  Because neither party offered the testimony of any witness, a hearing is not necessary.  Further, even if I construed the statements in Petitioner’s various submissions as offers of testimony (despite not being in

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the form of a sworn affidavit or declaration), the IG did not request to cross-examine Petitioner.  I therefore decide this case based on the written record. 

Petitioner did not object to any of the IG’s proposed exhibits.  Therefore, in the absence of objection, I admit IG Exs. 1-5 into the record. 

II.     Discussion

A. Petitioner must be excluded pursuant to section 1128(a)(4) of the Act because he was convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal law.³

The Act requires the Secretary of Health and Human Services (Secretary) to exclude from program participation any individual or entity that has been convicted of a felony offense occurring after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996⁴ and related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal or state law.  Act § 1128(a)(4).  The Secretary has delegated this authority to the IG.  42 C.F.R. § 1001.101(d). 

1. Petitioner was convicted of felony offenses occurring after August 21, 1996.

Petitioner appears to concede that his convictions mandate exclusion.  In his hearing request, Petitioner argues that I should reduce the seven-year exclusion imposed by the IG to five years, the minimum mandatory period of exclusion.  Petitioner’s Request for Hearing (RFH) DAB E‑File, Docket Entry # 1 at 4.⁵  I infer from this argument that Petitioner does not dispute that the IG is required to exclude him pursuant to section 1128(a)(4) of the Act. 

Even if Petitioner did not agree that the IG has a basis to exclude him, however, the IG’s evidence establishes that Petitioner was convicted of felony offenses and that the offenses are related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.  The IG offered a copy of the federal district court’s judgment in

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Petitioner’s criminal case.  IG Ex. 4.  On January 13, 2021, the court adjudicated Petitioner guilty of one count of conspiracy to unlawfully distribute controlled substances and three counts of unlawfully distributing and dispensing controlled substances in violation of 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(C).  IG Ex. 4 at 1.  These offenses are classified as felonies.  18 U.S.C. § 3559.  Accordingly, Petitioner was convicted, as that term is defined in subsections 1128(i)(2) and (3) of the Act, of felony offenses occurring after August 21, 1996. 

2. The felony offenses for which Petitioner was convicted are related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances under federal law. 

Petitioner was convicted of four felonies:  one count of conspiracy to unlawfully distribute controlled substances and three counts of unlawfully distributing and dispensing controlled substances.  IG Exs. 2, 4.  By their terms, Petitioner’s convictions are related to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.  Accordingly, the IG was required to exclude Petitioner from participation Medicare, Medicaid, and all federal health care programs for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a). 

Although Petitioner must be excluded for at least five years, the IG may exclude an individual for a period longer than five years if certain aggravating factors are present.  42 C.F.R. § 1001.102(b).  If the IG imposes an exclusion longer than five years based on the presence of aggravating factors, I may consider whether certain mitigating factors exist that may justify shortening the exclusion to not less than five years.  42 C.F.R. § 1001.102(c).  In the following sections of this decision, I consider whether, in light of any aggravating or mitigating factors, the length of Petitioner’s exclusion falls within a reasonable range. 

B. The seven-year exclusion imposed by the IG falls within a reasonable range. 

If the IG imposes an exclusion longer than five years based on the presence of aggravating factors, I may consider whether certain mitigating factors exist that may justify shortening the exclusion to not less than five years.  42 C.F.R. § 1001.102(b) and (c).  I may not consider evidence that does not pertain to one of the aggravating or mitigating factors listed in the regulations to decide whether an exclusion of a particular length is reasonable. 

1. The IG has established two aggravating factors.

The IG argues that an exclusion of seven years is reasonable based on the presence of two aggravating factors:

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1. Petitioner’s sentence included incarceration; and
2. Petitioner 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 Br. at 4-5; 42 C.F.R. § 1001.102(b)(5) and (b)(9). 

First, the record establishes that the sentence imposed by the federal district court included incarceration.  IG Ex. 4 at 2.  Specifically, the court sentenced Petitioner to 72 months of incarceration, among other penalties.  Id.  Therefore, the record establishes the aggravating factor of incarceration. 

Second, by letter dated April 1, 2021, the Texas Medical Board revoked Petitioner’s license to practice medicine.  IG Ex. 5.  The Medical Board’s letter stated that the revocation was required by section 53.021(b) of the Texas Occupations Code, based on Petitioner’s imprisonment following a felony conviction.  Id.  Accordingly, Petitioner was the subject of an adverse action by the Texas Medical Board. 

Petitioner does not deny that the aggravating factors identified by the IG are present in his case.  In summary, the IG has established two of the aggravating factors set out in 42 C.F.R. § 1001.102(b):  42 C.F.R. § 1001.102(b)(5) and (b)(9). 

2. Petitioner has failed to establish any mitigating factor recognized under 42 C.F.R. § 1001.102(c).

The regulations enumerate the only mitigating factors I may consider when evaluating whether an exclusion of more than five years is reasonable.  42 C.F.R. § 1001.102(c); see also Hussein Awada, M.D.,DAB No. 2788 at 6 (2017).  The burden is on Petitioner to prove that any mitigating factors exist.  42 C.F.R. § 1005.15(c); Briefing Order ¶ 6.c; see also Stacey R. Gale,DAB No. 1941 at 9 (2004) (“[I]t is Petitioner’s responsibility to locate and present evidence to substantiate the existence of any alleged mitigating factor in [Petitioner’s] case.”). 

Based on the record as a whole, I am unable to find that any of the mitigating factors enumerated at 42 C.F.R. § 1001.102(c) are present.  In the notice letter, the IG acknowledged that Petitioner cooperated with federal or state officials.  IG Ex. 1.  The notice letter further stated that the IG considered Petitioner’s cooperation in setting Petitioner’s exclusion at seven years.  Id.  However, neither the IG nor Petitioner presented evidence concerning Petitioner’s cooperation.  Based on the IG’s notice letter, I find it more likely than not that Petitioner cooperated with federal or state officials.  Yet, the record is devoid of details as to the extent and results of Petitioner’s cooperation.  

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Accordingly, I cannot find that Petitioner’s cooperation resulted in others being convicted or excluded from Medicare or Medicaid; or in additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses; or in the imposition against anyone of a civil money penalty or assessment as described in 42 C.F.R. § 1001.102(c)(3). 

Petitioner does not argue that any of the mitigating factors enumerated in 42 C.F.R. § 1001.102(c) are present in his case.  Instead, Petitioner argues that I should reduce the length of his exclusion based on the impact of the COVID-19 pandemic.  RFH; P. Br. However, the COVID-19 pandemic is not among the mitigating factors recognized by 42 C.F.R. § 1001.102(c).  The regulation is explicit on this point:  “Only the following factors may be considered mitigating.”  42 C.F.R. § 1001.102(c).  I have no authority to disregard an applicable regulation.  See Kenneth Schrager, DAB No. 2366 at 6 (2011). 

Moreover, to the extent Petitioner contends that the effects of the COVID-19 pandemic on his case render the imposition of a seven-year exclusion fundamentally unfair, this is essentially an appeal to equity.  However, as the decision in Rita Patel explained, DAB adjudicators are bound by all applicable laws and regulations and may not decline to apply a regulation based on equity alone.  DAB No. 2884 at 7 (2018), appeal dismissed, Patel v. Sec’y United States Dep’t of Health & Human Servs., No. 2:19‑cv-08925 (D.N.J. Mar. 3, 2020); see also 1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“An [administrative law judge] is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground, even a constitutional one.”).  For all these reasons, Petitioner has not established the presence of any mitigating factor that I may consider to reduce the period of exclusion. 

3. Based on the presence of two aggravating factors and no mitigating factors, the seven-year exclusion imposed by the IG falls within a reasonable range. 

The IG has broad discretion in determining the length of an exclusion.  See, e.g., Awada,DAB No. 2788 at 5.  So long as the period of exclusion imposed by the IG is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Joann Fletcher Cash,DAB No. 1725 at 16‑17 (2000) (citing 57 Fed. Reg. 3298, 3321 (1992)); see also Jeremy Robinson,DAB No. 1905 at 5 (2004). 

Based on the record before me, I find that a seven‑year exclusion falls within a reasonable range.  As outlined above, the record establishes the presence of two aggravating factors and does not establish the presence of any mitigating factor defined by the regulations.  See 42 C.F.R. § 1001.102(b)(5), (b)(9), and (c). 

The regulations provide that any sentence including incarceration may be considered an aggravating factor.  42 C.F.R. § 1001.102(b)(5).  Here, Petitioner was sentenced to

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incarceration for a substantial term of 72 months (6 years), pursuant to his guilty plea.  IG Ex. 4 at 2. The length of Petitioner’s sentence reflects the seriousness of Petitioner’s criminal conduct and justifies a substantial increase in the duration of Petitioner’s exclusion.

In addition, the Texas Medical Board revoked Petitioner’s license to practice medicine.  IG Ex. 5.  The revocation of Petitioner’s medical license indicates that the Medical Board found him untrustworthy to practice medicine in Texas, based on his conviction and incarceration.  Id.  Given that the IG has proven two aggravating factors and Petitioner has not proved any cognizable mitigating factor, I cannot conclude that the exclusion imposed by the IG is excessive.  I therefore find that the seven‑year exclusion falls within a reasonable range.

C. Petitioner’s exclusion is effective October 20, 2021, 20 days from the date of the IG’s notice letter.

Petitioner argues that he has been prohibited from practicing medicine since 2016.  RFH at 3.  Petitioner represents that the Texas Medical Board suspended his license on March 11, 2016, and that the terms of his pretrial release also prohibited him from practicing medicine.  Id.  On this basis, Petitioner argues that he “was excluded from participating in all Federal and State health care programs since his arrest over five (5) years ago.”  Id.  Petitioner additionally asserts that the COVID-19 pandemic affected the federal courts and caused delays in processing his criminal case.  Id. 

To the extent Petitioner is arguing that I should make the effective date of his exclusion retroactive to the date of his license suspension, many decisions of the DAB hold that I have no authority to do so.  Shaikh M. Hasan, M.D., DAB No. 2648 at 9 (2015) (citing, inter alia, Kailash C. Singhvi, M.D., DAB No. 2138 (2007), aff’d, Singhvi v. Inspector General, Dept. of Health & Human Servs., No. CV-08-0659 (SJF) (E.D.N.Y. Sept. 21, 2009); Thomas Edward Musial, DAB No. 1991 at 4-5 (2005); Douglas Schram, R.Ph., DAB No. 1372 at 11 (1992) (“Neither the [administrative law judge] nor this Board may change the beginning date of Petitioner’s exclusion.”)). 

Similarly, if Petitioner’s argument concerning the COVID-19 pandemic is meant to suggest that delays in his criminal prosecution had the practical effect of excluding him from participating in federal health care programs for longer than the seven-year period imposed by the IG, this argument is equally unavailing.  The decision in Hasan affirmed the administrative law judge’s rejection of Dr. Hasan’s claim for “credit” for the time he had been excluded from Medicaid before his Medicare exclusion became effective.  DAB No. 2648 at 10.  Thus, circumstances that pre-date the IG’s written notice of exclusion are not a basis to alter the effective date of an exclusion.

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Accordingly, as required by regulation, “[t]he exclusion will be effective 20 days from the date of the notice.”  42 C.F.R. § 1001.2002(b).

III.     Conclusion

For the reasons explained above, I conclude that the IG properly excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs, and I sustain the seven‑year period of exclusion.

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Endnotes

¹  The current version of the Social Security Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm (last visited Aug. 4, 2022).  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.

²  The judgment in Petitioner’s criminal case indicates that the federal district court imposed sentence on January 13, 2021, but the judgment was not entered until January 21, 2021.  IG Ex. 4 at 1.

³  My findings of fact and conclusions of law appear as headings in bold italic type.

⁴  August 21, 1996 is the date of enactment of the Health Insurance Portability and Accountability Act of 1996.  110 Stat. 1936; see also 42 C.F.R. § 1001.101(d).

⁵  I cite to the PDF page number as it appears in the electronic file because the file consists of three separate documents.