Health Law Daily Wrap Up, FRAUD AND ABUSE—E.D.N.Y.: Exclusion of physician from federal health care programs was supported by substantial evidence, (Sep 20, 2024)

By: Sara Cracau, J.D.

Physician who pleaded guilty to conspiracy to commit health care fraud was properly excluded from participating in federal health care programs.

A federal district court in New York has affirmed the decision of the HHS Secretary dismissing the request for judicial review of a physician who pleaded guilty to committing conspiracy to commit health care fraud and who was excluded from participating in federal health care programs, finding the decision to be supported by substantial evidence. The Secretary’s reliance on two aggravating factors of financial loss and a sentence, including incarceration, were sufficient to justify an eleven-year exclusion. The court found that, even if the Secretary’s decision was reviewable under the APA, the decision was neither arbitrary or capricious because it was accompanied by an explanation based on substantial evidence in the record and because it was consistent with prior Secretary decisions. The court found that, because the physician could not show that the process he was afforded was insufficient, his due process claim must fail as a matter of law (Hameedi v. Becerra, No. 23-CV-2654 (HG)) (E.D.N.Y. Sept. 19, 2024)).

A cardiologist and physician sought review of a decision of the Secretary of Health and Human Services that excluded his participation from Medicare and Medicaid. He was originally excluded for a period of eleven years but on appeal, the administrative law judge reduced the exclusion to eight years after finding that the Office of the Inspector General had assigned a greater weight than warranted to the financial loss aggravating factor. Both parties cross-appealed and the Departmental Appeals Board (DAB) consolidated the appeals and reversed the administrative law judge’s decision to shorten the exclusion period, finding that it was not supported by substantial evidence. The physician sought judicial review of the DAB’s decision. The physician, who was the president and owner of a medical clinic specializing in cardiology and neurology, allegedly made false representations to insurance providers, including Medicare, about patients’ symptoms, medical histories and test results to secure preauthorization for medical tests and procedures. The judge presiding over the criminal case brought against the physician sentenced him to 20 months imprisonment and ordered him and two other individuals with whom he was jointly and severally liable, to pay restitution in the amount of $554,331.

The Secretary’s decision is supported by substantial evidence. The court found that the OIG properly relied on the total amount of restitution ordered in determining the length of the doctor’s exclusion even though an amended judgment reduced the forfeiture amount by more than 50 percent. The amount of restitution that the physician was ordered to pay constituted substantial evidence of the amount of the financial loss to Medicare and Medicaid. Accordingly, he did not err by considering the full amount of loss which resulted to the federal health care programs in determining an appropriate exclusion based on the financial loss aggravating factor. It was also reasonable for the Secretary to look at the length of the sentence imposed on the physician as substantial evidence of the danger posed to the federal health programs. The Secretary’s reliance on two aggravating factors of financial loss and a sentence, including incarceration, were sufficient to justify an eleven-year exclusion.

The Secretary’s decision was not arbitrary and capricious. The court found that, even if the Secretary’s decision was reviewable under the APA, the decision was neither arbitrary or capricious because it was accompanied by an explanation based on substantial evidence in the record and because it was consistent with prior Secretary decisions. Accordingly, the court concluded that the Secretary’s application of aggravating factors in the relevant regulations, based on substantial evidence of the physician’s restitution order and his incarceration sentence constituted a satisfactory explanation. The court rejected the physician’s citation of specific instances in which the Secretary imposed shorter exclusionary periods under different circumstances.

The Secretary’s decision did not violate the physician’s right to due process. The court found that, because the physician could not show that the process he was afforded was insufficient, his due process claim must fail as a matter of law. Here, the physician did not and could not point to any procedural safeguards that he was denied. He received all the process that he was due because he received reasonable notice and an opportunity to be heard throughout the multi-step administrative process. After reviewing the procedures applied by the Secretary in the case, the court found no basis to reach a different conclusion.

The case is No. 23-CV-2654 (HG).

Judge: Gonzalez, H.

Attorneys: Jarrod Lee Schaeffer (Abell Eskew Landau LLP) for Asim A. Hameedi, M.D. Kathleen Anne Mahoney, U.S. Attorney’s Office, for Xavier Becerra.

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