Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—DAB DECISIONS: Exclusion of convicted physician from Medicare affirmed but exclusion period lengthened, (Mar 23, 2023)

By Sara Cracau, J.D.

The Inspector General's decision to exclude physician from Medicare affirmed, although decision to reduce exclusion period reversed.

The Appellate Division of the Departmental Appeals Board (DAB) of HHS has affirmed the decision of the Inspector General (IG) to exclude a physician from the Medicare program based on his conviction of conspiracy to commit fraud finding such exclusion authorized under the Social Security Act. However, it reversed the ALJ's decision that found that his exclusion for 11 years was unreasonable. The ALJ had erroneously concluded that the IG determined the financial loss aggravating factor was based on amounts that far exceeded the restitution amount the physician was required to pay. The IG established two aggravating factors that supported lengthening the exclusion period beyond the five year minimum but found no mitigating factors. The DAB found the IJ's reduction of the exclusion period from eleven years to eight years was not supported by the record and reimposed the 11 year exclusion (Asim A. Hameedi, M.D., Docket Nos. A-23-9, A-23-10, Decision No. 3087, February 6, 2023).

A former Medicare-participating physician pleaded guilty to one count of conspiracy to commit health care fraud and was found guilty of one count of conspiracy to commit health care fraud. He was sentenced to 20 months of imprisonment and ordered to pay restitution in the amount of $554,331 to the victims of the offense he was charged with. Because the physician was convicted 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" the law provided for a mandatory exclusionary period of a minimum of five years. The IG established two aggravating factors which supported lengthening the five year minimum exclusionary period but found that an eleven year exclusion was excessive. The DAB found eleven years to be unreasonable and reduced the exclusion to eight years. Both parties appealed and the appeal was consolidated.

Basis to exclude physician for a minimum of five years. The DAB noted that, as the ALJ had found, and which the physician did not dispute, the IG was authorized to exclude the physician from Medicare based on his felony conviction and affirmed that he had to be excluded for a minimum of five years.

Two aggravating factors existed and no mitigating factors. The physician did not dispute the ALJ's determination that two aggravating factors existed, i.e., the financial loss factor and the incarceration factor. He also did not dispute the ALJ's determination that he did not meet his burden to show the existence of any regulatorily permissible mitigating factors that may be considered in considering reducing the period of exclusion. Among the arguments he asserted, were that he helped in combatting the COVID-19 pandemic.

Financial loss. The DAB found that the IG "appropriately applied the financial loss aggravating factor on the amount of restitution the court imposed, the approximately $554,000 that Petitioner reported to the IG as the amount billed for services not performed," noting that restitution was an appropriate measure of loss to a governmental program. There was no indication that the IG based the financial aggravation factor on the multi-million dollar amounts specified in the initial indictment. Therefore, the DAB concluded that the ALJ's conclusion that the eleven year exclusion period was unreasonable was not supported by substantial evidence.

ALJ’s conclusion reversed. The DAB reversed the ALJ's conclusion that the 11 year exclusionary period imposed by the IG was unreasonable based on its de novo review. Because the ALJ's finding that the I.J. determined the financial loss aggravating factor based on amounts that far exceeded the restitution amount was not based on substantial evidence in the record, the ALJ’s reduction of the exclusion period was similarly not founded on “demonstrated criteria,” as required.

Lengthening of exclusionary period. The physician argued that lengthening the exclusion period by six years was unreasonable. The DAB found that this argument was not supported by the record as the judge had found that the physician had engaged in a scheme to defraud Medicare and Medicaid for about 12 years, part of which amounted to fraud that exceeded $500,000. Furthermore, the judge noted that the physician's billing practice “prevented Medicare and Medicaid from making the judgments as to whether the services should be approved.” This indicated that the practice of falsifying referrals was not limited to approximately $554,300 worth of claims for unperformed services which resulted in millions of dollars f reimbursement. The erroneous billings were not merely an aberration to an "otherwise exemplary professional life of giving and service to others."

Exclusion period. The physician had presented various equitable arguments to support reducing the exclusion period. These included that he “has been a very skilled interventional cardiologist with privileges at prestigious medical centers and with extremely successful results,” and acknowledged “numerous letters” and “video tributes to [Petitioner] from grateful patients.” However, the appellate division of the DAB found these to lack justification because they were not among the mitigating factors which are recognized in the regulations for purposes of reducing an exclusion period. Therefore, the DAB found that the presence of two aggravating factors alone allowed lengthening the exclusion period and based on the seriousness and duration of the physician's conduct, the DAB could not conclude that an eleven year exclusion was unreasonable. Furthermore, the DAB found that the physician's other arguments did not provide grounds to find the exclusion period to be unreasonable or to set an earlier effective date.

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