CASE | DECISION |JUDGE | FOOTNOTES

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


SUBJECT:

Arthur Carl Haspel, D.P.M.,

Petitioner,

DATE: April 21, 2004
                                          
             - v -

 

The Inspector General

 

Docket No.C-03-653
Decision No. CR1149
DECISION
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AMENDED DECISION

This case is before me pursuant to the request for hearing of Arthur Carl Haspel, D.P.M. (Petitioner), dated August 27, 2003, filed in accordance with 42 C.F.R. § 1001.2007. By letter dated June 30, 2003, the Inspector General (I.G.) notified Petitioner that he was being excluded from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a minimum period of ten years. The I.G. informed Petitioner that the action was taken under section 1128(a)(4) of the Act, due to his felony conviction of a criminal offense, as defined in section 1128(i), related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

At a telephone pre-hearing conference held on October 9, 2003, the I.G. requested that this matter be decided based on written arguments and documentary evidence, asserting that an evidentiary hearing was unnecessary. Petitioner requested that he be allowed to present testimony at an in-person hearing on the issue of his recovery and rehabilitation from his addiction. The parties agreed to submit briefs, with the understanding that I would determine whether there are material facts in dispute which would require an in-person hearing. Each side has made written submissions in support of their respective contentions. The I.G. submitted six proposed exhibits. These have been identified as I.G. Exs. 1-6. Petitioner submitted six proposed exhibits. These have been identified as P.

Exs. 1-6. (1) CMS filed a reply brief on December 30, 2003. In the absence of objection, I have admitted I.G. Exs. 1-6 and P. Exs. 1-5. P. Ex. 6 consists of a copy of provisions from the Florida Administrative Code. As such, it is not evidence. In considering my decision, I have taken judicial notice of the Code provisions. P. Ex. 6 remains a part of the record for reference. Neither party has offered the I.G.'s letter notifying Petitioner of his exclusion. I have, therefore, entered that letter as ALJ Exhibit 1 (ALJ Ex. 1).

It is my decision to sustain the determination of the I.G. to exclude Petitioner, Arthur Carl Haspel, D.P.M., from participating in the Medicare, Medicaid, and all other federal health care programs, for a period of ten years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. It is my finding that Petitioner was convicted of "a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." I further find that there are no material facts in dispute that would require an in-person hearing to resolve.

Issues

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

2. Whether the 10-year exclusion imposed by the I.G. is unreasonable.

Applicable Law and Regulations

Section 1128(a)(4) of the Act requires the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f)), any individual convicted under federal or State law, of a criminal offense consisting of a felony relating to the manufacture, distribution, prescription, or dispensing of a controlled substance.

An exclusion under section 1128(a)(4) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B). However, aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. § 1001.102(b). If an exclusion in excess of five years is imposed based on the presence of aggravating factors, then specific 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)(4) may file a request for hearing before an administrative law judge.

Section 1128(b) of the Act authorizes the Secretary to exclude individuals from receiving payment for services that would otherwise be reimbursable under Medicare, Medicaid, or other federal health care programs.

Findings and Discussion

The findings of fact and conclusions of law noted below in bold and italics are followed by a discussion of each finding.

1. Petitioner, Arthur Carl Haspel, D.P.M., was convicted of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance within the meaning of section 1128(a)(4) of the Act.

Petitioner is a podiatrist who was licensed to practice podiatry in the States of Florida and Georgia. On June 11, 2001, an Information was filed in the United States District Court for the Eastern District of Tennessee, charging Petitioner with two counts of distribution of hydrocodone, a schedule III narcotic controlled substance, in violation of 21 U.S.C. § 841(a)1 and 841(b)(1)(D). I.G. Ex. 1. Petitioner pled guilty to the two-count Information, and the Court entered judgment accordingly. I.G. Ex. 3. The offense to which Petitioner pled guilty is a felony under Title 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(D).

It has been established, and Petitioner does not dispute, that he was convicted of a criminal offense described in section 1128(a)(4) of the Act. P. Brief at 2.

2. The I.G. was authorized to exclude Petitioner from participation in the Medicare, Medicaid, and all other federal health care programs. The exclusion in this case carries a minimum mandatory term of five years as set forth in section 1128(c)(3)(B) of the Act.

On June 30, 2003, the I.G. notified Petitioner that he was being excluded from participating in the Medicare, Medicaid, and all federal health care programs for a minimum period of ten years. ALJ Ex. 1. That action was taken under section 1128(a)(4) of the Act due to his conviction as defined in section 1128(i). A conviction under section 1128(a)(4) carries a mandatory five-year exclusion as set forth in section 1128(c)(3)(B) of the Act:

Subject to subparagraph (G), in the case of an exclusion under subsection (a), the minimum period of exclusion shall not be less than five years . . .

When the Office of the I.G. imposes an exclusion pursuant to subpart B of part 1001 of 42 C.F.R. for the mandatory five-year period, the issue of the length of such exclusion is not considered. 42 C.F.R. § 1001.2007(a)(2). Aggravating factors that justify enlarging the exclusion period may be taken into account, but the five-year term will not be shortened. Petitioner admits that he was convicted of a felony relating to the manufacture, distribution, prescription, or dispensing of a controlled substance. Additionally, Petitioner has not contested the appropriateness of the exclusion, and agrees that the five-year minimum applies. P. Brief at 5. The only issue remaining, therefore, is whether the 10-year exclusion imposed and directed against Petitioner is unreasonable.

3. The existence of aggravating factors justifies lengthening the period of exclusion as provided in 42 C.F.R. § 1001.102(b).

As stated earlier, an exclusion predicated on 42 C.F.R. § 1001.102 due to a conviction of a felony offense relating to the manufacture, distribution, prescription, or dispensing of a controlled substance carries a mandatory exclusion of five years. Although this term may not be shortened, the I.G. has discretion to impose a longer period in appropriate circumstances. In Petitioner's case, the I.G. added five years to the statutory five-year minimum. The aggravating factors that the I.G. may consider in lengthening the period of exclusion are found at 42 C.F.R. § 1001.102(b). In this case the I.G. contends that a basis exists for enlarging the period of exclusion in view of three factors:

1. The sentence imposed by the court included incarceration.

2. The acts that resulted in Petitioner's conviction, or similar acts, were committed over a period of one year or more.

3. The convicted individual was the subject of other adverse action by a State government, agency or board, and the adverse action was based on the same set of circumstances that serves as the basis for the imposition of Petitioner's exclusion.

42 C.F.R. § 1001.102(b)(5) provides for enlarging the period of exclusion if the sentence imposed by the court included incarceration. This factor is present inasmuch as the sentencing court placed Petitioner on home detention for a period of three months. I.G. Ex. 3, at 3. Pursuant to 42 C.F.R. § 1001.2, incarceration encompasses house arrest or home detention. Petitioner does not dispute this aggravating factor. (2)

The second aggravating factor requires a finding that the acts that resulted in Petitioner's conviction, or similar acts, were committed over a period of one year or more. On June 4, 2001, Petitioner entered into a Stipulation of Facts that served as a factual basis for the Plea Agreement executed on December 12, 2001. I.G. Ex. 2. In that stipulation, Petitioner admitted that, from February 1996 up to and including April 15, 1998, he knowingly and intentionally distributed and dispensed more than 1000, but less than 2500, tablets of Schedule III controlled substances to clients, patients, and others in the Eastern District of Tennessee, without authority and without any medical necessity. I.G. Ex. 2, at 6.

Petitioner alleges that he admitted to unlawful distribution of Schedule III controlled substances in the context of the plea agreement, and that the language of the stipulation was drafted by the Assistant United States Attorney. Furthermore, he argues that neither he nor his attorney were cognizant of the repercussions such admission would have in an exclusion action by the I.G. P. Brief at 10-11.

This stipulation was signed by Petitioner on June 4, 2001, and was appended to the Plea Agreement executed on December 12, 2001. I.G. Ex. 2. Thus, Petitioner had a period of six months to cogitate, with the assistance of counsel, on the nature of his admissions and the ramifications that those admissions might have. On the record before me, I have no reason to believe that Petitioner's admissions were made under duress or coercion. In the Stipulation of Facts, Petitioner stated that from February 1996 up to and including April 15, 1998, he would travel from Florida, where he maintained a medical podiatric practice and residence, to Knoxville, in the Eastern District of Tennessee, to perform podiatric and other procedures on the feet of patients, clients or others, and distribute, dispense or sell Schedule III controlled substances directly to them. I.G. Ex. 2, at 6. It was on April 15, 1998, that he sold Schedule III controlled substances to an undercover officer of the Knoxville Police Department in the parking lot of Walgreens Drug Store, located at 4901 N. Broadway in Knoxville, Tennessee. In fact, it is reasonable to infer that the sale of controlled substances to an undercover officer on April 15, 1998, was not Petitioner's initial incursion into the illegal traffic of narcotics. I believe, as he admits, that such ventures go as far back as February 1996. Moreover, Petitioner appears to have benefitted from the Court's largess by admitting to the commission of wrongful acts, and entering a plea of guilty. This is evident from the light sentence he received. He cannot deny such admission now, just because, at this juncture, denial would inure to his benefit.

The third aggravating factor requires that the I.G. show that Petitioner was the subject of other adverse action by a government agency or board, and the adverse action was based on the same set of circumstances that serves as the basis for the imposition of the exclusion. It is clear in this case that Petitioner was the subject of other adverse action by a State government agency or board, and the adverse action was based on the same set of circumstances that serves as the basis for the imposition of the exclusion. The State of Florida Board of Podiatric Medicine suspended Petitioner's license for a period of two years, in response to an Administrative Complaint seeking disciplinary action against his license. I.G. Ex. 5. The Administrative Complaint filed against Petitioner indicates that it was based on Petitioner's arrest in Knoxville, Tennessee, on April 15, 1998, for the sale of hydrocodone to an undercover police officer. These same facts formed the basis for count two of the Information filed against Petitioner, and to which he entered a plea of guilty. I.G. Exs. 1, 2, and 4.

Petitioner's license to practice podiatry was also suspended for a period of two years by the State of Georgia Board of Podiatry examiners. I.G. Ex. 6. The Georgia State Board of Podiatry Examiners issued a Consent Order outlining facts that show that the basis for the Order was Petitioner's sale of hydrocodone to an undercover police officer in Knoxville, Tennessee, on or about April 15, 1998. These are the same facts that served as the basis for one of the two felony counts for which Petitioner was charged and to which he entered a plea of guilty in the United States District Court.

In light of the preceding discussion, I conclude that there are three aggravating factors present in this case. Consequently, I may also consider the existence of any of the mitigating factors permitted by regulation. 42 C.F.R. § 1001.102(c).

4. There are no material facts in dispute that would require an in-person hearing to resolve. The record fails to demonstrate the existence of any mitigating factor recognized under the regulations.

Petitioner has opposed the I.G.'s motion for summary affirmance, arguing that he should be permitted to present testimony at an in-person hearing on the issue of whether the mitigating factor codified at 42 C.F.R. § 1001.102(c)(2) is present in this case. Petitioner argues that the I.G. failed to apply or even recognize the existence of that factor. P. Brief at 7-9. To establish a mitigating factor under this section, a petitioner must show that the record in the criminal proceedings demonstrates that the court determined that the individual had a mental, emotional, or physical condition before or during the commission of the offense that reduced the individual's culpability.

Petitioner asks for the opportunity to present testimonial evidence as to the existence of the mitigating factor. While he does not describe specifically the evidence he wishes to present at hearing, it appears that he seeks to offer testimony that would show that he suffers from an addiction, that his addiction should be viewed as reducing his culpability for the crimes of which he was convicted, and that he is presently in recovery and has been rehabilitated. See P. Brief at 8-9, 11. None of this evidence is material, however, to a determination of whether the factor described at 42 C.F.R. § 1001.102(c)(2) is present in this case. That is because the regulation does not require me to determine whether Petitioner in fact suffered from a mental, emotional, or physical condition that reduced his culpability. Instead, I must determine if the record in Petitioner's criminal case demonstrates that the court determined that Petitioner had such a condition. This inquiry does not require testimony to resolve; examination of the sentencing transcript (P. Ex. 2) is sufficient to resolve the issue.

Consideration of 42 C.F.R. § 1001.102(c)(2) involves a two-pronged analysis: 1) the determination of whether the individual suffered from a mental, emotional, or physical condition before or during the commission of the offenses, and, 2) the determination of whether the court record demonstrates that the court found that the condition reduced his culpability. See Paul G. Klein, D.P.M., DAB CR317 (1994). I find that there is evidence in the record that the presiding judge in Petitioner's criminal case concluded that Petitioner was afflicted with an addiction problem. Nevertheless, the sentencing transcript made available to me does not contain a finding by the court that the addictive condition reduced Petitioner's culpability for the crimes with which he was charged.

During his sentencing hearing, Petitioner testified that he suffered from an addiction. P. Ex. 2, at 18-21. Petitioner also presented the testimony of a physician affiliated with the Physicians Recovery Network, who testified that Petitioner suffered from an addiction and that he was in recovery at the time of sentencing. Id. at 6-11. At the time of sentencing, the presiding judge made the following remarks:

I hope that you are sincere in your remarks to the Court and to all present here. You have got an ongoing battle. You understand that. Addiction is forever. It is just that way. You are a doctor. You know that. We wish you the best. We have given you a break here, I think. We hope you don't make the Court look bad by letting us down and letting yourself down.

Id. at 24. I do not believe it can be disputed that these remarks demonstrate that the judge found that Petitioner suffered from an addiction. I can also infer, as Petitioner argues, that the judge departed downward from the sentencing recommendation at least in part because of Petitioner's addiction. See P. Brief at 8. However, these two elements are insufficient to prove the existence of the mitigating factor codified at 42 C.F.R. § 1001.102(c)(2).

In the case of Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 (2002), an appellate panel of the Departmental Appeals Board held that the plain language of the regulation requires that the sentencing court find that an individual suffered from a mental, emotional, or physical condition at the time the offenses were committed, and that the condition reduced the individual's culpability for the offenses. In the present case, the transcript of the sentencing hearing is silent as to the nexus in time between Petitioner's addiction and the conduct that led to his conviction. Likewise, the transcript contains no finding by the court that the addictive condition reduced Petitioner's culpability for the offenses of which he was convicted. (3) I cannot agree with Petitioner that merely because the court imposed a lesser sentence than the maximum allowed by law, I may infer that the judge considered the mitigating information in the manner required under 42 C.F.R. § 1001.102(c)(2). For these reasons, I cannot conclude that Petitioner has proved the existence of the mitigating factor.

5. The 10-year exclusion imposed by the I.G. is not unreasonable.

An exclusion by the I.G. is not automatically lengthened because of the existence of an aggravating factor nor is it necessarily shortened because of the presence of a mitigating factor. All pertinent factors must be weighed in light of the protected interest at stake. The lengthening of the exclusion imposed in this case is not unfair, as Petitioner suggests in his brief, because of his misfortune to have a sentencing judge who did not articulate for the record that he considered Petitioner's addiction as a mental impairment that reduced his culpability. P. Brief at 11. The fact that the sentencing judge did not set forth in the record, including the sentencing documents, that Petitioner's mental or emotional condition before or during the commission of the offense reduced his culpability, establishes the absence of a mitigating factor under the subsection considered here. After weighing all of the factors present in this case, I find that the remedial sanctions imposed by the I.G. satisfy the statutory purposes of: 1) deterring conduct that jeopardizes the fiscal soundness of federal health care programs, and 2) protecting the beneficiaries of the program from untrustworthy individuals who would put them at risk. Therefore, I find that the five-year additional exclusion imposed by the I.G. is not excessive, and has a legitimate remedial effect consistent with the purpose of section 1128 of the Act.

Conclusion

Sections 1128(a)(4) and 1128(c)(3)(B) mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because he was convicted of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. The I.G. was also justified in enlarging the period of exclusion due to the existence of aggravating factors. The 10-year exclusion is therefore sustained.

JUDGE
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José A. Anglada

Administrative Law Judge

FOOTNOTES
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1. On December 10, 2003 Petitioner filed his Brief in Opposition. With that brief, he filed five exhibits, which were labeled Petitioner's Composite Exhibits A, B, D, E, and F. Because the Civil Remedies Division Procedures require exhibits to be labeled using numbers rather than letters, I re-marked Petitioner's exhibits as P. Ex. 1 through 5. Subsequently, on February 13, 2004, in response to a telephone request from my staff, Petitioner re-submitted his brief and exhibits labeled with numbers. While Petitioner's original submission did not contain an Exhibit C, the re-submission did contain an Exhibit 3. Thus, Petitioner has offered six exhibits.

2. In fact, Petitioner's brief does not address this aggravating factor at all.

3. Petitioner appears to acknowledge that there is nothing in the record of the criminal proceedings (including the sentencing documents) demonstrating that the court determined that it was his addiction that drove him to engage in the illegal traffic of drugs. P. Brief at 8.

CASE | DECISION | JUDGE | FOOTNOTES