Donald Willems, DAB CR5963 (2021)

DECISION

Respondent, the Inspector General (IG) of the United States Department of Health and Human Services, excluded Donald Willems, D.O. (Petitioner), for 20 years from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act).

Petitioner does not contest the basis of the IG’s exclusion action against him but does dispute the length of the period of exclusion selected by the IG.  As explained below, I find the IG has proven the aggravating factors identified in the exclusion notice to Petitioner, Petitioner has presented no mitigating factors, and the 20-year exclusion period selected by the IG is not unreasonable.  I therefore affirm the IG’s determination.

I. Case Background and Procedural History

On December 31, 2020, the IG notified Petitioner of his exclusion from participation in Medicare, Medicaid, and all federal health care programs under 42 U.S.C. § 1320a-

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7(a)(3) for a period of 20 years.  IG Exhibit (Ex.) 1.1   The IG based the exclusion on Petitioner’s felony conviction of a criminal offense in the U.S. District Court for the Southern District of Florida (District Court) related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, including the performance of management or administrative services related to the delivery of such items or services, or with respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State or local government agency.  Id. 

The IG identified three aggravating factors as a basis for increasing the exclusion period from five to 20 years:  (1) the acts resulting in the conviction, or similar acts, caused more than $50,000 in damages to government agencies, programs or other entities; (2) the District Court’s sentence included a term of incarceration; and (3) Petitioner was the subject of other adverse actions based on the same set of circumstances.  Id. at 2.

Petitioner timely requested a hearing before an administrative law judge in the Civil Remedies Division and I was designated to hear and decide this case.  On May 19, 2021, I held a pre-hearing conference by telephone with Petitioner and counsel for the IG, the substance of which is summarized in my May 24, 2021 Order Summarizing Pre-hearing Conference (Summary Order).  Before the pre-hearing conference, Petitioner asked to continue these proceedings to allow the District Court to consider his pending motion to vacate or modify his sentence.  Id.  I denied Petitioner’s motion because a pending motion for relief in his criminal case did not alter the fact of his conviction or his exclusion.  Id.  I explained that he could notify me and the IG of any change in circumstance concerning his conviction or sentence that might warrant rescinding or modifying his exclusion at any time during or after this appeal.  Id.

The IG timely filed a brief (IG Br.) with proposed exhibits marked as IG Exhibits 1 through 6.  Petitioner filed a brief (P. Br.) with what appear to be unspecified excerpts of a filing in his criminal case and no proposed exhibits.  The IG then filed a reply brief (IG Reply).

II. Admission of Exhibits and Decision on the Record

Absent any objection from Petitioner, I admit IG Exhibits 1 through 6 into the record.  42 C.F.R. § 1005.8(c); Civ. Remedies Div. P. § 14(e).

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Because neither party identified proposed witnesses, I decide this case on the briefs submitted and the exhibits of record.  Civ. Remedies. Div. P. § 19(d); Summary Order ¶ 7.

III. Jurisdiction

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

IV. Issue

The only issue before me is whether the 20-year duration of the exclusion period selected by the IG is unreasonable.

V. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an administrative hearing 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, and 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 of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program.”  42 U.S.C. § 1320a-7(a)(1); see also 42 C.F.R. § 1001.101(a).

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 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).  The statute does not distinguish between misdemeanor and felony convictions.  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 20 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

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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, while the IG bears the burden on all other issues.  42 C.F.R. §§ 1001.2007(c); 1005.15(b), (c).

VI. Findings of Fact, Conclusions of Law, and Analysis2

1. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(3) of the Act.

Section 1128(a)(3) of the Act mandates exclusion from participation in Medicare, Medicaid, and all federal health care programs where an individual has been convicted, under Federal or State law, of a criminal offense that occurred after August 21, 1996, consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct that was committed in connection with the delivery of a health care item or service.  42 U.S.C. § 1320a-7(a)(3); 42 C.F.R. § 1001.101(c).  The IG has established these elements by a preponderance of the evidence.

The District Court entered judgment against Petitioner on July 18, 2017.  IG Ex. 5 at 1.  That conviction resulted from Petitioner’s agreement to plead guilty to one felony count of conspiracy to commit healthcare fraud.  IG Ex. 3 at 1; Ex. 5 at 1.  The underlying acts committed by Petitioner as part of that conspiracy include, but are not limited to:  ordering drug testing for drug treatment center patients, regardless of the medical necessity for such testing or whether the testing was ever conducted; falsely certifying that he reviewed the aforementioned drug testing results; prescribing opioid medications for drug treatment patients suffering from opioid addiction; preparing and signing fraudulent insurance claims; billing insurance plans under procedure codes that reflected lengthier and more complex examinations than he actually performed; and fraudulently prescribing opioid under other physicians’ DEA numbers because Petitioner did not have to proper certifications to prescribe such medications.  IG Ex. 2 at 10-17.  

Such conduct plainly constitutes a criminal offense related to fraud or other financial misconduct committed in connection with the delivery of a health care item or service, and thus requiring exclusion by the Act.  Indeed, Petitioner concedes his conviction falls within the meaning of section 1128(a)(3) of the Act.  P. Br. at 2; Order ¶ 1.  The IG has therefore proven a factual and legal basis for Petitioner’s exclusion.

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

Because I have concluded that a basis exists to exclude Petitioner under section 1128(a)(3) of the Act, 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), 1001.2007(a)(2).  The IG has no discretion to impose a lesser period of exclusion, and I may not reduce the period of exclusion below five years.

3. The IG has proven three aggravating factors exist to support an exclusion period beyond the five-year statutory minimum.

The regulations establish aggravating factors that the IG may consider to increase the period of exclusion beyond the five-year minimum period required for a mandatory exclusion.  42 C.F.R. § 1001.102(b).  In this case, the IG identified three aggravating factors to justify excluding Petitioner for more than five years.  IG Ex. 1 at 2; 42 C.F.R. §§ 1001.102 (b)(1), (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, I find the IG’s determination not unreasonable.

1. The IG established the aggravating factor stated in 42 C.F.R. § 1001.102(b)(1) – the acts resulting in the conviction caused financial loss of $50,000 or more.

The IG asserts Petitioner’s acts resulting in conviction caused financial loss to a government agency or program or one or more entities of $50,000 or more.  IG Br. at 8.  In support of her argument, the IG points out the Amended Judgment issued by the District Court ordered Petitioner to pay a total of $3,041,476.32 in restitution to 23 separate defrauded parties, an amount to which Petitioner stipulated in his plea agreement with the government.  IG Ex. 5; IG Ex. 7.  Petitioner does not dispute the IG’s application of this aggravating factor.  P. Br. at 3.  The evidence before me demonstrates Petitioner’s acts resulting in conviction caused more than 60 times the financial loss required to establish this aggravating factor.

2. The IG established the aggravating factor stated in 42 C.F.R. § 1001.102(b)(5) – the sentence imposed against Petitioner included a period of incarceration.

The IG contends Petitioner’s criminal conviction resulted in a sentence of incarceration.  IG Br. at 8.  The record shows that the District Court sentenced Petitioner to 120 months of incarceration.  IG Ex. 5.  Petitioner does not dispute the application of this aggravating factor.  P. Br. at 3.  The IG has established this aggravating factor.

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3. The IG established the aggravating factor stated in 42 C.F.R. § 1001.102(b)(9) –Petitioner was subject to an adverse action by a State agency based on the same set of circumstances that serves as the basis for imposition of the exclusion.

The IG asserts Petitioner was subject to an adverse action from a state board based on the same set of circumstances that serve as the basis for the imposition of the exclusion.  IG Br. at 8.  The record confirms the Florida Board of Osteopathic Medicine (Medical Board) accepted Petitioner’s voluntary surrender of his medical license as a result of the Petitioner’s conviction for conspiracy to commit healthcare fraud.  IG Ex. 6 at 1.  The Florida Medical Board’s Final Order memorializes Petitioner’s agreement to “never again apply for licensure as an osteopathic physician in the State of Florida.”  Id.  Petitioner does not dispute the application of this regulatory factor.  P. Br. at 3.  The IG has established this aggravating factor. 

4. No mitigating factors exist in this case to reduce the exclusion period.

The IG identifies no mitigating factors she considered in determining the length of Petitioner’s exclusion.  IG Br. at 8-9; IG Ex. 1.  Petitioner, in turn, asserts none. P. Br. at 4.  Accordingly, there are no mitigating factors for me to consider in this case.

5. A 20-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).  This means that:  

[s]o 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)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities.

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

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

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based on the circumstances of a particular case.  For example, 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. at 3314-15 (1992).  In determining whether the period of exclusion selected by the IG is not unreasonable, I may not substitute my own judgment for that of the IG.  Richard E. Bohner, DAB No. 2638 at 2 (2015) (citations omitted), aff’d, Bohner v. Burwell, No. 15-cv-4088, 2016 WL 8716339 (E.D. Pa. Dec. 2, 2016).  Instead, I look to see “whether the period of exclusion imposed by the I.G. was within a reasonable range, based on demonstrated criteria.”  Craig Richard Wilder, DAB No. 2416 at 8 (2011). 

Here, the three aggravating factors identified by the IG serve to support the IG’s determination to impose a longer period of exclusion.  First, Petitioner’s criminal conduct resulted in a staggering loss to the Medicare program; the criminal conspiracy in which he participated caused losses that resulted in over $3 million in restitution ordered to 23 separate defrauded entities.  IG. Ex. 7.  That amount is over 60 times the regulatory minimum of $50,000 for program loss to be considered an aggravating factor.  42 C.F.R. § 1001.102(b)(1); Laura Leyva, DAB No. 2704 at 9-10 (2016) (observing it is “entirely reasonable” to give significant weight to loss amounts substantially larger than the minimum regulatory threshold.); 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”).

The District Court’s imposition of a 120-month sentence of incarceration confirms the seriousness and significance of Petitioner’s criminal conduct.  IG Ex. 3 at 2.  A sentence of incarceration is a “reasonable proxy . . . for untrustworthiness in the context of deciding how much weight to give the aggravating factor for incarceration.”  Eugene Goldman, M.D., DAB No. 2635 at 5 (2015).  The imposition of a 10-year sentence of incarceration for a non-violent financial crime reflects the profound severity of Petitioner’s criminal offense.  Gracia L. Mayard, DAB No. 2767 at 7 (2017) (characterizing a 54-month sentence of incarceration as a “substantial prison term”); Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855 at 8 (2002) (characterizing even a sentence of nine months as “relatively substantial”).  The IG appropriately determined that the sentence of incarceration the District Court imposed

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against Petitioner reflected a level of untrustworthiness that demanded a significant period of exclusion.

Finally, the fact that the Florida Medical Board found Petitioner’s criminal conduct serious enough to warrant surrender of Petitioner’s medical license serves to confirm the IG’s judgment that a longer period of exclusion was required.  Indeed, the Medical Board not only rescinded Petitioner’s medical license; it also precluded him from ever applying to practice osteopathic medicine in Florida again.  IG Ex. 6 at 1.  This lifetime ban from reapplying to practice medicine indicates the Medical Board did not believe Petitioner’s unfitness to treat patients could ever be ameliorated.

Petitioner does not dispute the basis for his exclusion or the application of the three aggravating factors identified by the IG to increase his period of exclusion.  P. Br. at 2.  He instead asserts his period of exclusion should be reduced because he only participated as a part of the criminal conspiracy for which he was convicted for eight months, and thus presumably not as responsible for the harm and loss caused by the remaining co-conspirators.  P. Br. at 3 (“They were doing the fraud for 6 months after I left, and for years before I worked there. . . I was not employed there for a majority of the time.  The three-million dollar loss is from the duration of time Reflection was committing their crime.  I only worked there for a fraction of that time.”). 

Petitioner’s belief that he bears less responsibility because of his allegedly limited role in the conspiracy is without merit.  In a criminal conspiracy, each co-conspirator is held equally liable for all criminal conduct regardless of which particular acts he or she conducted in furtherance of the conspiracy.  See Smith v. United States, 133 S. Ct. 714, 719 (2013) (“. . . a defendant who has joined a conspiracy . . . becomes responsible for the acts of his co-conspirators in pursuit of their common plot . . .”) (citations omitted). 

Thus, it is irrelevant that Petitioner only participated for eight months in the conspiracy to commit health care fraud that resulted in his conviction.  He is equally liable with his co-conspirators for all acts committed as part of the entire criminal scheme.  And, as the IG correctly observes, Petitioner agreed as part of the plea agreement he made to resolve his criminal case that the $3,041,476.32 in losses occurred “during the period that the [Petitioner] was involved in the charged conspiracy…and that those losses were reasonably foreseeable to the [Petitioner] due to his participation in the conspiracy.”  IG Reply at 4, quoting IG Ex. 7 at 2.  Petitioner’s present attempt to minimize the nature of his participation in his offense of conviction in order to demonstrate the IG’s selection of a 20-year period of exclusion to be unreasonable is therefore unpersuasive.  

In sum, I cannot find the IG’s selection of a 20-year period of exclusion to be unreasonable.  Petitioner admitted to participating in a criminal conspiracy that took advantage of drug addicts, a vulnerable population, to defraud their insurance companies while furnishing no drug counseling treatment whatsoever.  IG Ex. 2. 

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Petitioner prescribed opioid medications to opioid-addicted individuals to keep them complacent in furtherance of the conspiracy and ensure he could keep billing their insurance companies; to do so, he fraudulently used other physicians’ DEA numbers because he did not have the proper licensure to prescribe opiates.  Id.  Motivated by desire for pecuniary gain, Petitioner undoubtedly contributed to the abuse of controlled substances in his local community.  I therefore conclude the length of exclusion imposed by the IG is reasonable and warranted.

VII. Conclusion

I affirm the IG’s determination to exclude Petitioner for 20 years from participating in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-7(a)(3).

1. Document 9 in the official case file maintained in the DAB E-file system; for clarity and simplicity, I will cite to the exhibits attached by the parties to their respective briefs by the exhibit numbers indicated by the parties, not the document numbers assigned by DAB E-file.
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2. My findings of fact and conclusions of law appear in bold and italics.
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