Janae Nichole Harper, DAB CR6144 (2022)

DECISION

Petitioner, Janae Nichole Harper, is a nurse practitioner, licensed in the State of Montana, who participated in a massive conspiracy to defraud the Medicare program by ordering orthotic devices for Medicare beneficiaries, regardless of medical necessity and without examining or sometimes even speaking to the beneficiary.  Eventually, she was caught and indicted.  She pleaded guilty to one felony count of conspiracy to commit healthcare fraud.  The federal court sentenced her to a year and a day in prison followed by three years of supervised release. 

Based on her conviction, the Inspector General (IG) has excluded Petitioner for 20 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.  

For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 20-year exclusion falls within a reasonable range.

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Background

In a letter dated February 28, 2022, the IG notified Petitioner that she was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of 20 years because she 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 seven exhibits (IG Exs. 1‑7).  Petitioner has submitted a written brief (P. Br.) with ten exhibits (P. Exs. 1-10). 

In the absence of any objections, I admit into evidence IG Exs. 1-7 and P. Exs. 1-10. 

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 sworn declaration,” the witness’s direct testimony.  Order and Schedule for Filing Briefs and Documentary Evidence at 4-5 (¶ 7) (April 28, 2022).  The IG indicates that an in-person hearing is not necessary.  IG Br. at 11. 

Petitioner did not indicate that an in-person hearing would be necessary, and she lists no witnesses and submits no witness declarations. 

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 she was convicted of a criminal offense related to the delivery of an item or service under the Medicare program.  Act § 1128(a)(1).¹

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).

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The scheme.  Petitioner Harper was a nurse practitioner working for Integrated Support Network, a group of telemedicine companies.  IG Ex. 4 at 2, 8, 9.  Because she was authorized to order durable medical equipment (DME), she was a lynchpin in a complicated – and lucrative – scheme to defraud the Medicare program.  See IG Ex. 4 at 4-5.  

The scheme worked like this:  certain suppliers of DME bought orthotic devices (such as rigid and semi-rigid braces for the knee, back, shoulder, and wrist).²  IG Ex. 4 at 7.  The DME suppliers then paid kickbacks to telemarketing companies (whom prosecutors refer to as “patient recruiters”) in exchange for completed brace prescriptions, which included orders and documents needed for Medicare reimbursement.³  To get those orders, the telemarketing companies paid kickbacks to the telemedicine companies, including Integrated Support Network, to recruit and pay medical professionals who would order DME for the patients recruited by the marketers.  IG Ex. 4 at 7; P. Ex. 1 at 35-36. 

Petitioner was one of those medical professionals.  For her part, she signed brace prescriptions without seeing – and frequently without talking to – Medicare beneficiaries and without determining whether the braces she prescribed were medically necessary.   IG Ex. 4 at 8-10. 

Between November 28, 2017, and July 16, 2019, the conspirators submitted to Medicare approximately $8,259,849 in false and fraudulent claims for the braces that Petitioner prescribed.  Those braces were not medically necessary, not eligible for reimbursement, and not provided as represented.  Medicare paid approximately $4,307,934 for them.  IG Ex. 4 at 11-12. 

The conviction.  On September 3, 2020, a federal grand jury issued a nine-count indictment, charging Petitioner with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349, and eight counts of health care fraud, in violation of 18 U.S.C. §§ 1347, 2(b).  IG Ex. 3.  The grand jury issued a superseding indictment on April 8, 2021.  This superseding indictment included the charges of the original indictment and added eight counts of making false statements relating to health care matters, in violation of 18 U.S.C. §§ 1035(a)(2), 2.  IG Ex. 4. 

Petitioner signed a plea agreement on April 19, 2021.  By its terms, she agreed to plead guilty to health care fraud.  She acknowledged that she was a member of a conspiracy; that she knew its object “and intend[ed] to help accomplish it.”  IG Ex. 5 at 3.  She

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acknowledged that she “knowingly and willfully executed a scheme or plan to defraud a health care benefit program;” that she acted with the intent to defraud, that is, “the intent to deceive and cheat”; and that the scheme was executed “in connection with the delivery of or payment for health care benefits, items, or services.”  IG Ex. 5 at 4. 

Petitioner also acknowledged that, because of her guilty plea, she would be excluded from participating in Medicare, Medicaid, and all federal health care programs, although the exclusion would not affect her rights to apply for and receive benefits as a beneficiary.  IG Ex. 5 at 7.  

On July 29, 2021, the federal district court for the District of Montana accepted Petitioner’s plea and entered judgment against her.  The court sentenced her to twelve months and a day in prison, followed by three years of supervised release.  IG Ex. 2 at 1‑3.  The Court ordered Petitioner to pay $4,307,934.58 in restitution to the Centers for Medicare and Medicaid Services (CMS), the agency that administers the Medicare program.  IG Ex. 2 at 6; see 18 U.S.C. § 3663A. 

The plain language of Petitioner’s plea agreement leaves no doubt that her crime falls squarely within the parameters of the statute:  she “knowingly and willfully” executed a scheme to defraud a health care benefit program “in connection with the delivery of or payment for health care benefits, items, or services.”  IG Ex. 5 at 4.  She was thus convicted under federal law of a criminal offense related to the delivery of health care items – braces – under the Medicare program, which suffered $4,307,934.58 in losses.  As Petitioner acknowledges, she must therefore be excluded, under section 1128(a)(1), from participating in federal health care programs.  IG Ex. 5 at 7; see P. Br. at 5.

2. Based on the aggravating factors and no mitigating factor, the 20-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, DAB No. 2788 at 5-6 (2017). 

Among the factors that may serve as a basis for lengthening the period of exclusion are the three 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; and 3) the sentence imposed by the court included incarceration.  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.

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“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 $4,307,934.58 in restitution – more than 86 times the $50,000 threshold for aggravation.  IG Ex. 2 at 6.  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 massive financial losses here justify a period of exclusion considerably longer than the five-year minimum. 

Petitioner points out that she was, in fact, paid relatively poorly for her contributions to the scheme.  From the beginning of her employment (September 2017) until its end (April 2019), she was paid “just over $94,000 for her telemedicine work.”  P. Br. at 5-6.⁴  The regulation directs me to consider “the entire amount of the [the program’s] financial losses,” not the benefits paid an individual conspirator.  42 C.F.R. § 1001.102(b)(1); Laura Leyva, DAB No. 2704 at 9 (2016), aff’d, Leyva v. Price, 2017 WL 2868407 (M.D. Fla.); see Burstein, DAB No. 1865 (2003) (emphasizing that section 1001.102(b)(1) focuses on financial loss to the program, not on the benefit to the petitioner.) 

Moreover, an exclusion is supposed to protect program integrity and program beneficiaries.  As the regulation recognizes, the amount of program losses reflects, in part, the seriousness of the individual’s crimes and thus the level of threat she poses to program integrity.  While the process is inexact, so long as the IG reasonably translates the aggravating factor into an increase in the period of exclusion, I must affirm the determination.  That a corrupt scheme can cause such substantial losses underscores the importance of excluding those who willingly participate in them.  Over time, health care programs simply cannot sustain these losses.

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

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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.

Although she apparently began working for Integrated Support Network in September 2017, the parties agree that Petitioner participated in health care fraud from November 28, 2017, until July 16, 2019, longer than the one-year threshold establishing an aggravating factor.  IG Ex. 4 at 9; P. Br. at 5.  That she participated in defrauding the Medicare program for more than a year and a half justifies lengthening her period of exclusion.  

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. a/k/a Yevgeniy 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). 

Petitioner points to the sentencing transcript and suggests that her sentence and the judge’s comments reflect her “minor role” in the scheme.⁵  P. Br. at 6.  In fact, the sentencing judge recognized Petitioner’s pivotal role in the scheme.  The prosecutor explained: 

So her value [to the scheme] was not, as [defense counsel] said, for her hard work.  Her value to these individuals was simply she could unlock thousands of dollars per brace for

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[the scheme] in fraudulent proceeds . . . .  By the time the indictments of Willie McNeal and [others] in these cases, in April of 2019, Ms. Harper and other medical professionals were not speaking to the beneficiaries.  And yet, they were swearing to Medicare that they had spoken to the individuals, creating false and fraudulent documentation numbering thousands, costing Medicare millions. 

P. Ex. 1 at 25-26.  “She really was the key to this scheme.  No money would have left the Medicare trust fund without Ms. Harper and other individuals.”  P. Ex. 1 at 27. 

The judge understood the significance of Petitioner’s role.  In sentencing her to prison, he explained why he found it necessary to punish her: 

If you said no, you and other people would have all said no to Mr. McNeal and his cohorts and [they’d] have [had] a great idea and nowhere to take it.  So your role was important.

*****

You, unfortunately, made some bad decisions . . . , in selling your integrity and selling your license to do this kind of work. 

P. Ex. 1 at 45. 

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 her 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 that cost the program millions of dollars.  No evidence suggests that she had a mental, physical, or emotional condition that reduced her culpability.  She did not cooperate with federal officials.  

Based on the three aggravating factors and the absence of any mitigating factor, I must determine whether the exclusion period imposed by the IG falls within a reasonable

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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 (ALJ 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 20-year exclusion.  For about 20 months, Petitioner was an essential player in a massive scheme to defraud the Medicare program.  Her involvement lasted for well over a year and cost the program a whopping $4,307,934.58.  The court sentenced her to significant prison time, noting the critical role she played in the scheme.  She has shown a lack of integrity and poses a threat to health care programs.  I therefore conclude that the 20-year exclusion falls within a reasonable range.  

Finally, I reject Petitioner’s claim that her period of exclusion should be reduced because she did not know that she was part of a fraudulent scheme.  Her guilty plea establishes otherwise.  As noted above, she acknowledged that she knew the object of the conspiracy and intended to help accomplish it; she “knowingly and willfully” executed the scheme; and she acted with the intent to defraud.  IG Ex. 5 at 4.  Having pleaded guilty to conspiring to defraud the Medicare program and having explicitly admitted that she was fully aware of what she was doing, Petitioner may not now claim that she was unaware of the fraud.  The regulations preclude such a collateral attack on an underlying conviction:  

When the exclusion is based on the existence of a criminal conviction . . . by Federal, State, or local court . . . 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); Leyva, DAB No. 2704 at 7-8 (rejecting, as a collateral attack on her conviction, Petitioner’s claim that her personal role in conspiracies to commit health care fraud and money laundering was minor); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000).

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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 20-year exclusion falls within a reasonable range.

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Endnotes

¹  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.

²  It seems that they bought the devices primarily from manufacturers in China, at “incredibly low [prices] compared to the [Medicare] reimbursement.”  P. Ex. 1 at 34.

³  The recruiters ran ads on cable television encouraging viewers to call in to (usually overseas) call centers in order to obtain “free braces.”  P. Ex. 1 at 35.

⁴  In fact, she was earning roughly $60,000 a year in this, her second job, which she performed in the evenings.  She earned from $90,000 to $120,000 in her primary job.  P. Ex. 1 at 12.

⁵  Willie McNeal was founder, owner, and president of Integrated Support Plus, one of the Integrated Support Network Companies and a key player in the conspiracy.  IG Ex. 4 at 1, 9-11.  Petitioner suggests that the judge “recognized the inequity of Willie McNeal’s treatment by the federal government versus that of Harper’s.”  While the judge complained generally about inequities in sentencing, he could not have opined about disparate treatment in this case because Willie McNeal had not yet been sentenced.  P. Ex. 1 at 38-39.  Moreover, it is hard to argue that Willie McNeal received a disproportionately lighter sentence inasmuch as he stipulated in a plea agreement to accept sentencing guidelines of 18 to 20 years in prison.  P. Ex. 1 at 39.