Health Law Daily Wrap Up, CONDITIONS OF PARTICIPATION—DAB DECISIONS: Appellate division affirms 12-year Medicare exclusion for Missouri physician who billed for unsupervised assistant physicians, (Sep 14, 2026)

By Wendy Biddle, J.D.

The exclusion from federal health care programs for the conviction of conspiring to submit false claims to Medicare and Medicaid was deemed free of legal error.

A Missouri physician who spent five years billing Medicare and Medicaid for services performed by unsupervised, unqualified assistant physicians lost his appeal before the HHS Departmental Appeals Board (DAB). The Board affirmed both the legal basis of his exclusion from federal health care programs and the 12-year duration of the exclusion (Saggar, DAB No. 3240, Doc. No. A-26-53 (Aug. 21, 2026)).

Background. A physician was licensed to practice medicine in Missouri and Illinois and had been enrolled as a Medicare supplier since at least 2009. He operated several health care businesses in Missouri, including St. Louis General Hospital, an urgent care and primary care clinic where he served as president and a member of the board of directors.

Scheme. From July 2018 through July 2023, the physician ran a billing scheme through the clinic that exploited Missouri's assistant physician framework. Under Missouri law, an assistant physician (a medical school graduate who has not completed a residency) may provide medical services only under a collaborative practice agreement with a supervising physician, who bears responsibility for oversight of the assistant physician's activities. The physician employed numerous assistant physicians but systematically failed to ensure the required supervision and training were in place, then billed their services to Medicare and Medicaid as if he had personally performed them.

The scheme was multifaceted. The physician recruited physicians to serve as nominal collaborating physicians and had them sign blank, undated verification forms. As a result, assistant physicians frequently saw patients without a collaborating physician present and had never received the required 120 hours of joint clinical time with a supervising physician. The physician also caused claims to be submitted listing himself as the rendering provider when he was out of town. Further, he caused claims to be submitted on behalf of a co-conspirator who was under federal criminal indictment at the time and whose services were therefore not reimbursable by Medicare or Medicaid, deliberately concealing that individual's involvement by substituting the physician’s own name as the rendering provider.

Guilty plea. In July 2023, the physician and his office manager were charged in a nine-count federal indictment in the Eastern District of Missouri. In August 2024, they physician pleaded guilty to one count of conspiracy to make false statements relating to health care matters, in violation of 18 U.S.C. §§ 371 and 1035. The district court accepted the plea in February 2025 and sentenced the physician to 35 months of incarceration and three years of supervised release. The court ordered restitution of $642,942.70 to Medicare and $99,585.37 to Missouri Medicaid. The Illinois Department of Financial and Professional Regulation subsequently issued an order indefinitely suspending his Illinois medical license based on the conviction.

Exclusion. In September 2025, the HHS Inspector General excluded the physician from participation in all federal health care programs for 12 years under section 1128(a)(1) of the Social Security Act, adding seven years to the five-year statutory minimum based on four aggravating factors: financial loss to government programs exceeding $50,000, criminal conduct spanning more than one year, a sentence that included incarceration, and an adverse action by another government agency arising from the same circumstances.

Appeal. The physician appealed the exclusion, challenging both the basis of the exclusion as well as the duration. The Board focused on three areas: the statutory basis for mandatory exclusion, the reasonableness of the exclusion's length, and the physician's constitutional and procedural objections.

On the threshold question of whether the offense was "related to" the delivery of items or services under Medicare or a state health care program, as required for mandatory exclusion under section 1128(a)(1), the Board applied its long-standing "common-sense nexus" standard. The physician argued that his offense was only indirectly related to health care delivery because it involved administrative billing paperwork rather than clinical acts, and that claim submissions are legally distinct from the act of delivering care. The Board rejected that framing, citing a line of precedent holding that submitting a false claim for reimbursement is itself a representation that a covered item or service was delivered to a program beneficiary, making the billing and the delivery inextricably intertwined. The Board further rejected the argument that the exclusion required a finding of clinical danger to beneficiaries, reasoning that Congress, by mandating exclusion for offenses related to the delivery of items or services, implicitly determined that such convictions render an individual too untrustworthy to participate in federal health care programs for at least the statutory minimum period.

The physician next argued that the Supreme Court decision in Loper BrightEnters v. Raimondo, 603 U.S. 369 (2024), overruled Chevron and required the Board to undertake fresh, independent statutory interpretation of section 1128(a)(1) and that such interpretation would not reach his offense. The Board identified three flaws in the argument, however. First, it has consistently found no ambiguity in the phrase "related to" in section 1128(a)(1), meaning there is no occasion for any interpretive framework, deferential or otherwise, to operate. Second, Loper Bright addressed the obligations of federal courts reviewing agency action and does not directly govern the Board's adjudicatory role. Third, the Loper Bright decision expressly preserved prior holdings under the Chevron framework as a matter of statutory stare decisis, meaning prior decisions interpreting section 1128(a)(1) remain valid regardless of any shift in interpretive methodology.

The doctor next argued that the length of the exclusion was unreasonable. The Board applied the governing standard requiring a qualitative, case-specific assessment of the weight of aggravating and mitigating factors. The physician conceded he had established none of the three regulatory mitigating factors and instead urged the Board to consider a range of other circumstances: his lack of personal financial enrichment, the absence of patient harm, his clinical record, his conduct during incarceration, his age, and the absence of court-imposed clinical restrictions. The Board declined to consider any of these, explaining that the regulations permit only the enumerated mitigating factors to reduce an exclusion beyond the statutory minimum and that personal or professional attributes of the excluded individual are not cognizable. The Board also specifically rejected age as a consideration, reaffirming prior decisions holding that the possibility of career-ending consequences does not factor into the exclusion length analysis.

As to the four aggravating factors the ALJ concluded warranted additional exclusion time, the Board found each well-supported. The total program loss of more than $742,000 was over 14 times the regulatory $50,000 threshold and was treated as an exceptional aggravating factor warranting significant weight. The five-year duration of the conspiracy, which far exceeded the one-year threshold, demonstrated sustained untrustworthiness rather than a momentary lapse. The 35-month prison sentence was characterized as a substantial term that served as a reasonable proxy for the seriousness of the offense. And the indefinite suspension of the physician's Illinois medical license, though triggered automatically by statute upon conviction, was held to constitute a meaningful adverse action providing additional evidence of the gravity of the underlying conduct, not merely a redundant consequence of the conviction.

The Board also rejected the physician’s due process argument that the ALJ failed to provide a genuine, individualized assessment of his case. It found that the physician received adequate notice of the factual and legal bases for the exclusion, had a full opportunity to brief and argue all issues before the ALJ, and that the ALJ in fact conducted the qualitative, factor-by-factor assessment the regulations require. Finally, the Board declined to consider a range of arguments raised for the first time in the appellate reply brief, holding that the regulations bar consideration of any argument that could have been raised before the ALJ but was not.

The DAB therefore affirmed the ALJ's decision upholding the exclusion in its entirety, concluding it was supported by substantial evidence and free of legal error.

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