CASE | DECISION | JUDGE

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

John V. Wozniak,

Petitioner,

DATE:November 14, 2003
                                          
             - v -

 

The Inspector General

 

Docket No.C-03-368
Decision No. CR1108
DECISION
...TO TOP

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner from participating in the Medicare, Medicaid, and all other federal health care programs, for a period of seven years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. I find that Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicaid program. Additionally, I find that his seven-year exclusion is not unreasonable.

I. Background

By letter dated January 31, 2003, the I.G. notified Petitioner that he was being excluded from participation in the Medicare, Medicaid, and all other federal health care programs, as defined in section 1128B(f) of the Social Security Act (Act), for a period of seven years. The I.G. informed Petitioner that his exclusion was imposed pursuant to section 1128(a)(1) of the Act, due to his conviction (as defined in section 1128(i) of the Act), in the United States District Court for the District of Connecticut, of a criminal offense related to the delivery of a health care item or service under the Medicaid program. The I.G. advised Petitioner that the exclusion of individuals convicted of such offenses is mandated by section 1128(a)(1) of the Act. Section 1128(c)(3)(B) of the Act requires that an individual convicted of such a criminal offense be excluded for a minimum period of five years. The I.G. alleged that two aggravating factors were present in Petitioner's case. The I.G. relied on those two factors in deciding to increase the period of Petitioner's exclusion from the minimum mandatory five-year period to seven years.

By letter dated March 26, 2003, Petitioner requested a hearing before an administrative law judge (ALJ). The case was assigned to me for a hearing and decision. A telephone pre-hearing conference was held on July 3, 2003. During the telephone conference, the parties agreed that this case could be resolved based on cross-motions for summary judgment, without the need for an in-person hearing.

On August 6, 2003, the I.G. submitted an initial brief (I.G. Brief) and three proposed exhibits. These exhibits have been identified as I.G. Exhibits (I.G. Exs.) 1-3. On September 4, 2003, Petitioner filed his brief in opposition (P. Brief). With his brief, Petitioner filed four proposed exhibits. These have been identified as Petitioner Exhibits (P. Exs.) 4-7. On October 1, 2003, the I.G. submitted a reply brief (I.G. Reply). Petitioner did not request leave to file a sur-reply. Neither party objected to the exhibits proposed by the opposing party. Accordingly, without objection, I admit all proposed exhibits into the record in this case.

II. Issues

A. Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all other federal health care programs; and

B. Whether the seven-year exclusion imposed by the I.G. is unreasonable.

III. Applicable Law and Regulations

Section 1128(a)(1) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual "convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program." 42 U.S.C. § 1320a-7(a)(1).

An exclusion under section 1128(a) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B). Aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. § 1001.102(b). If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

Pursuant to 42 C.F.R. § 1001.2007, a person excluded under section 1128(a)(1) of the Act may file a request for hearing before an ALJ.

IV. Findings and Analysis

I make the following findings of fact and conclusions of law. My findings and conclusions are set forth as numbered headings in bold type. My analysis in reaching each finding and conclusion is set out in the paragraphs which follow each numbered finding.

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(i) of the Act.

On August 30, 2001, Petitioner pled guilty, in the United States District Court for the District of Connecticut, to one count of "Concealing a Material Fact in a Matter within the Jurisdiction of the Executive Branch of the Government of the United States," in violation of 18 U.S.C. § 1001(a)(1). I.G. Ex. 2, at 3; I.G. Ex. 3. The court entered judgment against him. I.G. Ex. 3. Under section 1128(i)(1) of the Act, an individual or entity is considered to have been "convicted" when a judgment of conviction has been entered against the individual or entity by a federal, state, or local court. Under section 1128(i)(3) of the Act, an individual is considered to have been "convicted" when a plea of guilty or nolo contendere by the individual or entity has been accepted by a federal, state, or local court. In this case, Petitioner pled guilty and a judgment of conviction was entered against him in the United States District Court for the District of Connecticut. Therefore, Petitioner was convicted of a criminal offense under federal law.

2. The criminal offense of which Petitioner was convicted was related to the delivery of an item or service under the Medicaid program.

During the period in question, Petitioner was a pharmacist licensed in the State of Connecticut. P. Brief at 11. He was employed as a pharmacist in a Rite Aid Pharmacy in New Haven, Connecticut. Id. The Connecticut Department of Social Services (DSS) administers the Medicaid program in the State of Connecticut. I.G. Ex. 1, at 1-2. DSS uses a program referred to as "prospective drug utilization review" or "PRO-DUR" to ensure optimal patient outcomes and realize cost savings in the pharmacy benefits portion of the Medicaid program. See I.G. Ex. 1, at 1-2; P. Ex. 4. The PRO-DUR program requires all pharmacies participating in Medicaid to use an automated point of sale system under which pharmacists submit prescription drug claims electronically and receive responses in real time. P. Ex. 4. The PRO-DUR program sends the pharmacist an electronic alert if it identifies a potential utilization problem. Id. Among the utilization issues which the PRO-DUR program identifies is over-utilization, i.e., where the client obtains excessive (early) refills. Id. The program interprets as early filling a prescription presented during the coverage period of a previous prescription for the same drug when the prior prescription still has greater than 25 per cent of the days remaining. I.G. Ex. 1, at 2.

The Information to which Petitioner pled guilty charged that, on or about May 22, 1999, Petitioner permitted a Medicaid recipient to pay cash for a prescription for a 16-day supply of Percocet, a controlled substance. I.G. Ex. 1, at 2. According to the Information, Petitioner knew that, by accepting a cash payment, he would prevent the Rite-Aid Pharmacy computer from generating an alert in the event the recipient presented another prescription during the coverage period of the May 22 prescription. Id. The Information charged that, on May 27, 1999, the Medicaid recipient presented another prescription for Percocet. Id. at 3. According to the Information, Medicaid would not have reimbursed the May 27 prescription had the Rite-Aid computer generated an alert for early filling. Id. at 3-4.

A conviction is related to the delivery of a item or service under Medicaid if "a nexus or common sense connection links the offense for which a petitioner has been convicted and the delivery of an health care item or service under a covered program." Donald J. Purcell, II, M.D., DAB CR572, at 7 (1999), citing Berton Siegel, D.O., DAB No. 1467, at 5 (1994). It is sufficient if the delivery of a Medicaid item or service is an element in the chain of events giving rise to the offense. Larry W. Dabbs, R.Ph., et al., DAB CR151 (1991).

The facts alleged in the information establish a common-sense connection between the acts for which Petitioner was convicted and the delivery of an item or service under the Medicaid program. Moreover, it is apparent that the delivery of a Medicaid item or service is an element in the chain of events which gave rise to Petitioner's conviction. Petitioner was convicted of concealing a material fact within the jurisdiction of the executive branch of the United States government. The material fact which Petitioner pled guilty to concealing was that a Medicaid recipient, who presented a prescription for a controlled substance to be paid by Medicaid, had five days earlier presented a prescription for the same controlled substance which was not reported to Medicaid. The information charged that, if Petitioner had not concealed that fact, the Medicaid program would have refused to pay for the prescription. Thus, the offense of which Petitioner was convicted related to the delivery of an item or service under the Medicaid program, within the meaning of section 1128(a)(1) of the Act.

3. Petitioner must be excluded for a minimum of five years.

An individual who is convicted of a criminal offense related to the delivery of an item or service under the Medicaid program is required to be excluded from all federal health care programs for a mandatory minimum period of five years. Act, section 1128(c)(3)(B). Petitioner acknowledges that he is subject to the mandatory minimum five-year exclusion. P. Br. at 1.

4. Petitioner's exclusion for a period of seven years is not unreasonable.

Petitioner admits that the I.G. was required to exclude him, pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the Act, for at least five years. Consequently, the only issue in controversy is whether the seven-year exclusion period imposed against Petitioner is unreasonable.

The I.G. has discretion to impose an exclusion of more than five years in appropriate circumstances. In Petitioner's case, the I.G. added two years to the statutory five-year minimum. The Board has previously pointed out that the preamble to the applicable regulations, 42 C.F.R. Part 1001, "indicates that the regulation contemplates broad discretion for the I.G. in setting the length of an exclusion in a particular case, in light of the I.G.'s 'vast experience in implementing exclusions under these authorities'. . . ." Gerald A. Snider, M.D., DAB No. 1637, at 6 (1997), quoting Barry D. Garfinkel, M.D., DAB No. 1572, at 7 (1996). The Board has therefore held that, as long as the length of exclusion is within a reasonable range, neither the ALJ nor the Board has the authority to alter it. Snider, DAB No. 1637, at 6. Accordingly, my inquiry is limited to whether the length of the exclusion chosen by the I.G. is within a reasonable range.

The Secretary has published regulations which establish the criteria for determining the length of exclusions imposed pursuant to section 1128 of the Act. The regulation which sets forth the applicable criteria for an exclusion imposed pursuant to section 1128(a) is 42 C.F.R. § 1001.102. The applicable criteria are expressed as either aggravating or mitigating factors. The relevant aggravating factors are stated at 42 C.F.R. § 1001.102(b). The relevant mitigating factors are stated at 42 C.F.R. § 1001.102(c). An exclusion may be imposed for a period of more than five years where there exists an aggravating factor or factors not offset by any mitigating factor or factors.

In the instant case, the I.G. contends that two aggravating factors justify extending the period of exclusion from five to seven years:

•The acts resulting in the conviction created a financial loss to a government program or to one or more entities of $5000 or more (42 C.F.R. § 1001.102(b)(1)); and

•The sentence imposed by the court included incarceration (42 C.F.R. § 1001.102(b)(5)).

I conclude that the I.G. has proven the existence of these two aggravating factors.

With respect to the first aggravating factor, the I.G. argues that Petitioner's criminal offense caused a loss to the Medicaid program of over $5000. I.G. Brief at 9. The I.G. points out that Petitioner's sentence required him to make restitution to DSS in the amount of $13,182.51. Id. See also I.G. Ex. 3. It is appropriate to consider the amount ordered for restitution to correspond to the amount of the loss to an entity. Steven Alonso Henry, M.D., DAB CR638 (2000). Thus, the evidence shows that the loss to the Medicaid program involved more than $5,000.

Petitioner correctly argues that the circumstances surrounding the aggravating factors, in addition to their number, must be considered to determine whether the length of exclusion is unreasonable. See P. Brief at 2. The regulations do not specify the weight that is to be given each separate aggravating or mitigating factor. Keith Michael Everman, D.C., DAB No. 1880 (2003). Petitioner contends I should discount the financial loss to the Medicaid program as an aggravating factor because any reimbursements made by Medicaid for the prescriptions at issue would have been made to Petitioner's employer, and not to him. P. Brief at 7. He states that he did not benefit financially from the conduct that led to his conviction. Id. at 8. The I.G. points out, however, that the relevant inquiry under the regulation is not whether Petitioner realized a benefit from his conduct, but whether the Medicaid program suffered a loss. I.G. Reply at 4. I find the I.G.'s argument convincing. As an appellate panel of the Departmental Appeals Board has held, "The relevant question is not the benefit to a petitioner from the offenses of which he was convicted, but the potential harm to the programs or program patients." Garfinkel, DAB No. 1572, at 36.

Additionally, Petitioner argues that, in a proceeding before the State of Connecticut Commission of Pharmacy ("Pharmacy Board"), Petitioner demonstrated that the cost to the Medicaid program was less than $13,182.51. P. Brief at 8. My review of the Pharmacy Board's decision does not reveal any finding addressing the cost incurred by DSS as a result of Petitioner's misconduct. See P. Ex. 6. In any event, even had the Pharmacy Board made such a finding, it would not be binding on me, as this would amount to a collateral attack on Petitioner's conviction. The U.S. District Judge who entered judgment against Petitioner found that Petitioner was obligated to pay restitution in the amount of $13,182.51. I.G. Ex. 3. The regulations specifically prohibit collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(d). Likewise, it is well-settled in decisions of the DAB that a petitioner in this forum may not collaterally attack facts established by his or her conviction. See Peter Edmondson, DAB CR163 (1991), aff'd, DAB No. 1330 (1992); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Valerie Baker, DAB CR815 (2001). For these reasons, I cannot find that, in determining the length of Petitioner's exclusion, the I.G. should have given substantially less weight to the aggravating factor of the financial loss to the Medicaid program.

With respect to the second alleged aggravating factor, 42 C.F.R. § 1001.102(b)(5) provides for enlarging the period of exclusion if "the sentence imposed by the court included incarceration." The regulations define incarceration as follows:

Incarceration means imprisonment or any type of confinement with or without supervised release, including, but not limited to, community confinement, house arrest and home detention.

42 C.F.R. § 1001.2. Petitioner was sentenced to six months' home detention. I.G. Ex. 3. Therefore, I find the I.G. has proven this aggravating factor.

Petitioner argues that I should consider as a mitigating factor the decision of the Connecticut Pharmacy Board reviewing the same set of facts which gave rise to Petitioner's conviction. P. Brief at 8-9. The Pharmacy Board did not suspend or revoke Petitioner's pharmacy license. P. Ex. 6, at 7. Instead, the Board reprimanded Petitioner and placed his license on probation. Id. Petitioner argues that this decision demonstrates that the Pharmacy Board found him to be trustworthy, notwithstanding his conviction. P. Brief at 9.

As section 1001.102(c) makes plain, I may only consider in mitigation the specific factors enumerated in the regulations. The fact that a professional licensing board took no disciplinary action or took less harsh disciplinary action against an individual's license than it might have done is not a mitigating factor recognized by the regulations. On the contrary, an enumerated aggravating factor is present where the individual.

has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.

42 C.F.R § 1001.102(b)(9) (emphasis added). Thus, far from being a mitigating factor, the fact that the Pharmacy Board reprimanded Petitioner and placed his license on probation could have been cited by the I.G. as an additional aggravating factor in Petitioner's case.

Likewise, the exclusive list of mitigating factors in the regulations does not permit me to consider a general argument that Petitioner has learned his lesson and is unlikely to offend again in the future. See P. Brief at 9-10. In sum, I conclude that Petitioner has failed to prove the existence of any mitigating factor recognized by the regulations.

Because the I.G. has proved the existence of at least two aggravating factors under the regulations and Petitioner has failed to prove the existence of any mitigating factors, the I.G. was authorized to impose an exclusion in excess of five years. Given the presence of two aggravating factors, I find that an exclusion of seven years is not unreasonable.

V. Conclusion

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because of his criminal conviction for an offense relating to delivery of a health care item or service under the Medicaid program. Further, the seven-year exclusion is not unreasonable.

JUDGE
...TO TOP

Anne E. Blair

Administrative Law Judge

 

CASE | DECISION | JUDGE