Begum v. Hargan, 16 CV 9624

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
PartiesFARZANA BEGUM, M.D., Plaintiff, v. ERIC D. HARGAN, in his official capacity as the Acting Secretary of the U.S. Department of Health and Human Services, Defendant.
Docket NumberNo. 16 CV 9624,16 CV 9624
Decision Date21 November 2017

FARZANA BEGUM, M.D., Plaintiff,
ERIC D. HARGAN,1 in his official capacity as the Acting Secretary of the
U.S. Department of Health and Human Services, Defendant.

No. 16 CV 9624


November 21, 2017

Hon. Amy J. St. Eve


AMY J. ST. EVE, District Court Judge:

Plaintiff Farzana Begum, M.D., ("Plaintiff" or "Begum") brings this action against Defendant Eric D. Hargan as the Acting Secretary of the U.S. Department of Health and Human Services ("Defendant" or "Secretary") ("HHS" in reference to the agency) challenging the Secretary's final decision to exclude Plaintiff from participation in all federal health care programs for a period of three years in addition to a mandatory five-year exclusion for her criminal conviction. (R. 1.) The parties cross moved for summary judgment. (R. 15; R. 18.) For the following reasons, the Court grants Defendant's motion for summary judgment and denies Plaintiff's motion for summary judgment.


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The Court has reviewed the administrative record for this matter. On December 2, 2013, Plaintiff Begum, a licensed Illinois physician, pled "guilty to one count of conspiracy to solicit and receive kickbacks" in violation of 18 U.S.C. § 371 and 42 U.S.C. § 1320a-7b(b)(l)(A). (Admin. R. at 5, 20, 272-73.)3 Begum admitted in her plea that she participated in a kickback scheme from 2005 to 2011 in which she received money for referring Medicare patients to Grand Home Health Care, Inc. (Id. at 5, 20, 272-73.) The advisory U.S. Sentencing Guidelines range for Plaintiff's offense was 30 to 37 months in prison. (Id. at 273-74.) The court accepted Begum's plea and entered judgment against her, sentencing her to twelve months and one day of incarceration in March 2014. (Id. at 5, 20, 273-74.)

The court later reduced Begum's sentence. In January 2015 the federal prosecutor filed a motion to have Plaintiff's sentence reduced because of her "'substantial assistance in investigating or prosecuting another person,' pursuant to Fed. R. Crim. Proc. 35(b)(1)." (Id. at 6, 21, 275, 501.) According to the government's motion, the basis for the sentence reduction request was that Begum "provided information to the government about kickback payments she received from Gene Schloss [("Schloss")], a defendant in another criminal case" in the Northern District of Illinois (14 CR 188).4 (Id. at 6, 21, 275, 500.)

In February 2015 the court granted the government's motion and reduced Begum's sentence to nine months and fifteen days. (Id. at 6, 21, 275, 500-502.) "By this sentence reduction of two months and 16 days, Petitioner lost the opportunity to receive good time credit,

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which is only available for sentences greater than one year and which, if granted, could have potentially reduced her incarceration time under the original sentence to 10½ months." (Id. at 275.) The new sentence "effectively reduce[d] the defendant's sentence by 30 days, when factoring in the loss of good time credit." (Id. at 501.)

By letter dated July 31, 2014, the Inspector General ("IG") of HHS notified Begum that as a result of her criminal conviction and the presence of two aggravating factors, HHS was excluding her "from participation in Medicare, Medicaid, and all other Federal health care programs" effective August 20, 2014, for a period of eight years pursuant to Section 1128(a)(1) of the Social Security Act ("SSA"), citing 42 U.S.C. 1320a-7(a)(1). (Id. at 2, 20-21, 274, 476.) The letter explained that the mandatory minimum period of five years was extended by three additional years based on evidence of two aggravating factors: 1) under 42 C.F.R. § 1001.102(b)(2), the acts resulting in the conviction occurred over a period of one year or more; and 2) under 42 C.F.R. § 1001.102(b)(5), the sentence included incarceration. (Id. at 274, 476.) The letter did not discuss mitigating factors. (Id. at 274, 476-477.)

Begum timely requested a hearing on her exclusion before an administrative law judge ("ALJ") in HHS's Civil Remedies Division of the Departmental Appeals Board ("DAB") in November 2014. (Id. at 2, 4, 21, 274-75.) Plaintiff and her son Syed Lateef ("Lateef") testified during her hearing. (R. 16 at 5.) HHS conducted no cross-examination of either witness and did not call any witnesses. (Id.) Before the ALJ, Plaintiff disputed only the extension of the exclusion period by three years for a total of eight years. She conceded that she was convicted, that she had to be excluded for at least five years pursuant to Section 1128(a)(1), and that two aggravating factors existed. (Admin. R. at 6, 7, 21, 22, 23-24, 273-75, 321, 336.) Begum instead argued that the period of her exclusion was unreasonable on the grounds that two mitigating

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factors (mental condition and federal cooperation) existed and that the IG gave improper weight to the fact that she was incarcerated (since her sentence was later reduced). (Id. at 1, 21, 94, 277, 290, 321, 323, 381-82.)

Begum argued that the mitigating factor at 42 C.F.R. § 1001.102(c)(2) existed, claiming that the underlying criminal record demonstrated that the court determined that she had a mental condition before or during the commission of her offense that reduced her culpability. (Id. at 8, 22, 106-08, 298-300, 326-30, 382-87.) Specifically, licensed clinical psychologist Dale Gody diagnosed Begum with Narcissistic Personality Disorder. (Id. at 272, 480-489, 490-492.) Plaintiff also suffers from anxiety, depression, and an inability to manage emotions. (Id.) While the parties stipulated that Begum had a mental condition before or during the commission of her offense, the stipulation did not include agreement on whether the mental condition reduced her culpability. (Id. at 9, 26, 273.)

Begum also argued that the mitigating factor at 42 C.F.R. § 1001.102(c)(3) existed, because her cooperation with federal officials resulted in others being convicted, additional cases being investigated, or reports identifying program weaknesses being issued. (Id. at 8, 22, 106, 108-10, 298, 300-02, 326, 330-36, 382, 387-90.) The parties, however, only stipulated that Begum cooperated with federal officials. (Id. at 12, 30, 275.)

After briefing and a hearing, the ALJ upheld the IG's decision in April 2016. (Id. at 1, 18.) The ALJ found that a basis for Begum's exclusion existed under Section 1128(a)(1) of the SSA, 42 U.S.C. § 1320a-7(a)(1), because she pled guilty to one count of conspiracy to solicit and receive kickbacks. (Id. at 5-6, 21.) The ALJ then found the existence of two aggravating factors under 42 C.F.R. §§ 1001.102(b)(2) and (b)(5): Begum admitted that her criminal conduct occurred for over a year and that her sentence included incarceration. (Id. at 7, 22.)

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The ALJ then considered whether Begum had met her burden of showing any mitigating factors. (Id. at 7-15, 22.) The ALJ did not find the existence of the mental health mitigating factor because Begum failed to prove that the sentencing court had determined that her mental condition reduced her culpability. (Id. at 9-11; see also 25-29 for appellate discussion of same.) The ALJ also did not find the existence of the cooperation mitigating factor because Begum failed to prove that her cooperation resulted in others being convicted, or an additional investigation or report being issued. (Id. at 12-15; see also 30-32 for appellate discussion of same.) Based upon these findings, the ALJ held that the period of Begum's exclusion was thus not unreasonable and that the existence of the two aggravating factors justified the period of exclusion. (Id. at 7-17, 22.)

Begum then appealed the ALJ's decision to the Appellate Division of the Departmental Appeals Board ("Appellate DAB"). (Id. at 18, 410.) Again, Begum argued that the ALJ erred in finding no mitigating factors and in finding that the period of her exclusion was not unreasonable, but did not dispute the basis of her exclusion or the presence of the two aggravating factors. (Id. at 22-23, 428-449.) Appellate DAB upheld HHS's decision, finding that the ALJ's determinations were supported by substantial evidence and free of legal error. (Id. at 24-32, 36.) Appellate DAB further affirmed the ALJ's findings that aggravating factors existed and that Begum did not prove any mitigating factors, and it held that Begum's eight-year exclusion fell within a reasonable range. (Id. at 18-36.) Throughout the opinion, Appellate DAB reiterated that the ALJ properly applied the preponderance of the evidence standard in finding that Begum had failed to prove the existence of mitigating factors. (Id. at 22, 24-25, 30.)

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Begum appeals Appellate DAB's decision, which is a final agency action that terminates proceedings before HHS and exhausts the administrative remedies available to Plaintiff. 42 C.F.R. § 1005.21(j). Before the Court are the parties' cross motions for summary judgment.


I. Summary Judgment

"Summary judgment is proper when 'the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Curtis v. Costco Wholesale Corp., 807 F.3d 215, 220 (7th Cir. 2015) (citing Fed. R. Civ. P. 56(a)); see also Smith v. Hope School, 560 F.3d 694, 699 (7th Cir. 2009) (Summary judgment is appropriate when the record, viewed in the light most favorable to the non-moving party, reveals that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.) A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Insolia v. Philip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000) ("The existence of a mere scintilla of evidence supporting a plaintiff's position is insufficient; there must be evidence on...

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