Martin B. Canter, DAB CR6137 (2022)

DECISION

Petitioner, Martin B. Canter, was apparently a California social worker who, working as a “patient recruiter,” participated in a kickback conspiracy.  In return for kickbacks, Petitioner referred Medicare beneficiaries to a particular hospice clinic.¹  Eventually, he and his co-conspirators were caught.  Petitioner pleaded guilty to one felony count of conspiracy to pay and receive healthcare kickbacks.  The court sentenced him to a year and a day in prison.

Based on his conviction, the Inspector General (IG) has excluded Petitioner for 15 years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(1) of the Social Security Act (Act).

Petitioner appeals.

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For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 15-year exclusion falls within a reasonable range.

Background

In a letter dated November 30, 2021, the IG notified Petitioner that he was excluded from participating in all federal health care programs for a minimum period of 15 years because he had been convicted of a “criminal offense related to the delivery of an item or service under Medicare or a state health care program.”  The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.  IG Ex. 1.

Petitioner timely requested review.

Exhibits.  The IG has submitted a written brief (IG Br.) with five exhibits (IG Exs. 1-5).  In the absence of any objections, I admit into evidence IG Exs. 1-5.

Petitioner’s submissions are confusing and do not comply with my instructions.  Petitioner has submitted a brief (P. Br.) and lists 17 exhibits.  However, it seems that he did not file all of the documents he listed, specifically P. Exs. 9, 12, and 14.  (see Departmental Appeals Board Electronic Filing System (DAB E-file) Dkt. C-22-264, Docs. #18e-#18v).  In the absence of any objections, I admit into evidence P. Exs. 1-8, 10-11, 13, and 15-17.

Hearing on the written record.  I instructed the parties to indicate, in their briefs, whether an in-person (video) hearing would be necessary and, if so, to explain why, identify any proposed witness, and submit, “in the form of an affidavit or a written sworn declaration,” the witness’s direct testimony.  I emphasized I would “only accept witness testimony that is . . . relevant.”  Order and Schedule for Filing Briefs and Documentary Evidence at 4-5 (¶ 7) (April 13, 2022) (emphasis in original).  The IG indicates that an in-person hearing is not necessary.  IG Br. at 9.

Petitioner, however, maintains that an in-person hearing is necessary.  P. Br. at 4 (DAB E-file #18c).  Although he did not submit the required witness list, he submitted a document, dated December 16, 2020, that might be considered his own affidavit, suggesting that he would be a witness.  P. Ex. 11 (DAB E-file #18q-#18r).  The document is not coherent; it seems to refer to a contentious December 16, 2020 meeting he had with a couple of FBI agents.  Elsewhere, Petitioner suggests that he offered the FBI and the IG “inside information” on multiple suppliers engaged in fraud “with minimum results.”  P. Br. at 2 (DAB E-file #18).  He asks that I subpoena the special agents of the FBI, as well as the Justice Department attorney who prosecuted him.  P. Br. at 3 (DAB E-file #18a).  He does not explain the purpose of these witnesses, although he seems to suggest that he

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was the victim of selective prosecution and that his legal representation was “inadequate and very poor.”  See P. Br. at 5 (DAB E-file #18d).

The alluded-to witness testimony seems to be aimed at undermining Petitioner’s criminal conviction.  The regulations preclude such a collateral attack on an underlying conviction: 

When the exclusion is based on the existence of a criminal conviction . . . or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction . . . is not reviewable and the individual or entity may not collaterally attack it, either on substantive or procedural grounds in this appeal.

42 C.F.R. § 1001.2007(d); Yolanda Hamilton, M.D., DAB No. 3061 at 9-10 (2022); Funmilola Mary Taiwo, DAB No. 2995 at 8 (2020); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000).

Because there are no witnesses offering relevant testimony, an in-person hearing would serve no purpose, and this case may be decided based on the written record.

Discussion

1. Petitioner must be excluded from program participation for a minimum of five years because he was convicted of a criminal offense related to the delivery of an item or service under the Medicare and Medicaid programs.  Act § 1128(a)(1).²

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services exclude from program participation an individual who has been convicted, under federal or state law, of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  See 42 C.F.R. § 1001.101(a).

The scheme.  Conspiring with the owner and operators of a hospice clinic, Petitioner found Medicare beneficiaries and referred them to the clinic, for which he was paid illegal kickbacks.  IG Ex. 2 at 2, 5-7.  The conspirators filtered the

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payments through a bank account for one of the hospice owner’s other companies and into the account of a company that Petitioner controlled.  IG Ex. 2 at 6-9.

The scheme itself continued from October 2011 through February 2018, and Petitioner’s part in it lasted for more than three and a half years, from July 2014 through February 2018.  IG Ex. 2 at 5.

The conviction.  On September 11, 2019, the Grand Jury issued a 12-count indictment, charging Petitioner and others with (among other crimes) conspiracy to pay and receive health care bribes and kickbacks, in violation of 18 U.S.C. § 371; illegal remunerations for health care referrals, in violation of 42 U.S.C. § 1320a-7b(b); wire fraud, in violation of 18 U.S.C. § 1343; and aiding and abetting and causing an act to be done, in violation of 18 U.S.C. § 2.  IG Ex. 2.

On June 9, 2020, Petitioner pleaded guilty to Count 1 of the indictment:  conspiracy to pay and receive health care bribes and kickbacks.  IG Ex. 3.

The United States District Court for the Central District of California entered judgment against Petitioner on April 5, 2021.  The court sentenced him to twelve months and a day in prison, followed by two years of supervised release.  IG Ex. 4 at 1-2.  The Court ordered him to pay $365,563 in restitution to the Centers for Medicare & Medicaid Services (CMS), the agency that administers the Medicare program.  IG Ex. 4 at 1; see 18 U.S.C. § 3663A.

The plain language of Count One, to which Petitioner pleaded guilty, leaves no doubt that his crime falls squarely within the parameters of the statute:  he “knowingly and willfully” solicited and received remuneration for referring an individual to a person for the furnishing of a “service for which payment may be made[,] in whole or in part[,] under a [f]ederal health care program.”  IG Ex. 2 at 5-6 (emphasis added).  Because he was convicted under federal law of a criminal offense (receiving illegal kickbacks) related to the delivery of a service – hospice care – under the Medicare program, which suffered $365,563 in losses, Petitioner must be excluded, under section 1128(a)(1), from participating in federal health care programs.

2. Based on the aggravating factors and no mitigating factor, the 15-year exclusion falls within a reasonable range.

An exclusion brought under section 1128(a)(1) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  I now consider whether the length of the exclusion, beyond five years, falls within a reasonable range.  See Edwin L. Fuentes, DAB No. 2988 at 8-9 (2020); Hussein Awada, M.D., DAB No. 2788 at 5-6 (2017).

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Among the factors that may serve as a basis for lengthening the period of exclusion are the four that the IG relies on in this case:  1) the acts resulting in the conviction, or similar acts, caused a government program or another entity financial losses of $50,000 or more; 2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; 3) the sentence imposed by the court included incarceration; and 4) the individual 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 imposing the exclusion.  42 C.F.R. § 1001.102(b).  The presence of an aggravating factor or factors, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.

“Simply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness.”  Awada, DAB No. 2788 at 10.

As the following discussion shows, the IG correctly identified the aggravating factors and correctly determined that there are no mitigating factors.

Program financial loss (42 C.F.R. § 1001.102(b)(1)).  The sentencing court ordered Petitioner to pay CMS $365,563 in restitution, more than seven times the $50,000 threshold for aggravation.  IG Ex. 4 at 1.  Restitution has long been considered a reasonable measure of losses.  Awada, DAB No. 2788 at 7; Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 9 (2011).  The Departmental Appeals Board has characterized amounts substantially greater than the statutory standard as an “exceptionally aggravating factor” that is entitled to significant weight.  Shaun Thaxter, DAB No. 3053 at 31-32 (2021); Robert Kolbusz, M.D., DAB No. 2759 at 6-7 (2017); Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003).  I agree.  The significant financial losses here justify a period of exclusion considerably longer than the five-year minimum.

Duration of criminal conduct (42 C.F.R. § 1001.102(b)(2)).  We consider the length of Petitioner’s participation in the criminal scheme in order to distinguish the individual whose lapse in integrity is short-lived from those who display a lack of integrity over a longer period of time.  “Participation in, or even knowing but silent acquiescence in, a continuing fraudulent scheme that could be expected to cause repeated misrepresentations and repeated harm over a period of time evidences a continuing lack of integrity.”  Burstein, DAB No. 1865 at 8.

The entire criminal enterprise lasted for more than six years, and Petitioner participated in it for more than three and a half years – from July 2014 through February 2018.  IG Ex. 2 at 5.  This is well over the one-year threshold for

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aggravation and also justifies a period of exclusion that is significantly longer than the minimum.

Incarceration (42 C.F.R. § 1001.102(b)(5)).  The court sentenced Petitioner to a year and a day in prison, which is a substantial period of incarceration.  IG Ex. 4 at 1.  While any period of incarceration justifies increasing the period of exclusion, the Board has repeatedly held that longer periods of incarceration are relevant in determining whether a period of exclusion is reasonable.  Eugene Goldman, M.D., DAB No. 2635 at 6 (2015).  Generally, the longer the jail time, the longer the exclusion, because a lengthy sentence evidences a more serious offense.  See Robinson, DAB No. 1905 at 6 (finding that one year and a day of incarceration, with other factors, supports “sufficient” weight);  Jason Hollady, M.D., DAB No. 1855 at 12 (2002) (characterizing a nine-month incarceration as “relatively substantial.”); Stacy Ann Battle, D.D.S., DAB No. 1843 (2002) (finding that four months in a halfway house, followed by four months home confinement, justifies lengthening the period of exclusion); Brenda Mills, M.D., DAB CR1461 (2006), aff’d, DAB No. 2061 (2007) (finding that six months home confinement justifies increasing the length of exclusion).

Petitioner submits a copy of the District Court’s December 2, 2021 order granting him compassionate release.  P. Ex. 2 (DAB E-file #18g-18i).  Citing Petitioner’s deteriorating health, the Court reduced his custodial sentence to time served and ordered him to serve the remainder of his sentence in home confinement, followed by two years of supervised release.  P. Ex. 2 at 3 (DAB E-file #18i).  That he was allowed to serve part of his sentence in home confinement rather than in an actual prison does not change the fact that the sentence imposed included incarceration nor prevent the IG from applying it as an aggravating factor.  See Hamilton, DAB No. 3061 at 15-16 (finding that, even though the sentencing judge delayed Petitioner’s date to report for incarceration until her pending appeal was resolved, so long as “the sentence imposed by the court included incarceration,” the IG appropriately established it as an aggravating factor).  Moreover, home confinement qualifies as incarceration.  Battle, DAB No. 1843 at 7; Mills, DAB CR1461, aff’d, DAB No. 2061.

Other adverse actions (42 C.F.R. § 1001.102(b)(9)).  Effective April 5, 2021, the California Department of Health Care Services indefinitely suspended Petitioner from participating in the state Medicaid program (called Medi-Cal) because he had been convicted of conspiracy to pay and receive illegal remunerations.  IG Ex. 5.  Thus, based on the same set of circumstances that serves as the basis for imposing this exclusion, Petitioner was subject to an additional adverse action by a state agency, and the IG may apply this factor to extend the period of his exclusion.

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No mitigating factors.  The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Characterizing the mitigating factor as “in the nature of an affirmative defense,” the Board has ruled that Petitioner has the burden of proving any mitigating factor by a preponderance of the evidence.  Barry D. Garfinkel, M.D., DAB No. 1572 at 8 (1996).

No mitigating factors offset the significant aggravating factors present in this case.  Petitioner was convicted of a felony.  No evidence suggests that he had a mental, physical, or emotional condition that reduced his culpability.  He did not cooperate with federal officials.  His interactions with them were, in fact, contentious and no evidence suggests that they led to others being sanctioned or investigated.

Based on the four aggravating factors and the absence of any mitigating factor, I must determine whether the exclusion period imposed by the IG falls within a reasonable range.  So long as that period falls within a reasonable range, my role is not to second-guess the IG’s judgment.  Robinson, DAB No. 1905 at 5 (Administrative Law Judge review must reflect the deference accorded to the IG by the Secretary).

A “‘reasonable range’ refers to a range of exclusion periods that is more limited than the full range authorized by the statute [i.e. from a minimum of five years to a maximum of permanent] and that is tied to the circumstances of the individual case.”  Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 at 11 (2002) (citing Gary Alan Katz, R.Ph., DAB No. 1842 at 8 n.4 (2002)).  The goal here is to protect federal health care programs and beneficiaries from potential harm.  Joann Fletcher Cash, DAB No. 1725 (2000).

The underlying facts here more than justify a 15-year exclusion.  For a substantial period of time – more than three and a half years – Petitioner illegally referred patients to a hospice clinic in return for kickbacks.  His illegal conduct caused CMS, a government agency, financial losses of $365,563.  The court sentenced him to prison time, and the State of California indefinitely suspended his participation in the Medi-Cal program.  He has shown a continuing lack of integrity and poses a threat to health care programs.  I therefore conclude that the 15-year exclusion falls within a reasonable range.

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Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Cash, DAB No. 1725 at 7 (citing 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992)).  I find that the 15-year exclusion falls within a reasonable range.

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Endnotes

¹  It seems that Petitioner has used up to five aliases, some variations of his name but others – William Wilder and William Vanderbeek – are completely unrelated.  IG Ex. 4 at 1.

²  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.