Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Thomas Andrew Hunter,
Petitioner,
- v. -
The Inspector General.
DATE: July 3, 1991
Docket No. C-337
DECISION
On December 21, 1990, the Inspector General (I.G.)
notified Petitioner that he was being excluded from
participation in the Medicare program and any State
health care program for a period of five years. 1/ The
I.G. told Petitioner that his exclusion was due to his
conviction of a criminal offense within the meaning of
section 1128(b)(3) of the Social Security Act (Act).
Petitioner timely requested a hearing, and the case was
assigned to me for a hearing and decision. On April 2,
1991, I held a hearing in this case in Charlotte, North
Carolina.
I have considered the evidence, the parties' arguments,
and the applicable laws and regulations. I conclude that
Petitioner has demonstrated by his conduct that he is not
a trustworthy provider of health care and that an
exclusion is merited in this case. I conclude further
that, in light of the evidence, the five-year exclusion
imposed and directed against Petitioner is reasonable.
Therefore, I affirm the exclusion.
ISSUE
The issue in this case is whether the five-year exclusion
which the I.G. imposed and directed against Petitioner is
reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a pharmacist licensed to practice
pharmacy in the State of North Carolina. ALJ Ex. 1; Tr.
at 220. 2/
2. Beginning in 1986, Petitioner was one of the
proprietors of the Monroe Family Pharmacy in Monroe,
North Carolina. Tr. at 221-222.
3. Petitioner was the head pharmacist and sole manager
and supervisor at the Monroe Family Pharmacy. Tr. at 65,
221-222.
4. On October 2, 1989, an indictment was filed against
Petitioner in the United States District Court for the
Western District of North Carolina. ALJ Ex. 1; I.G. Ex.
1/1.
5. Petitioner was charged in the indictment with five
counts of knowingly, willfully, and unlawfully
distributing controlled substances and three counts of
knowingly, willfully, and unlawfully making and causing
to be made false statements and representations of
material facts in a claim made to the North Carolina
Medicaid program. ALJ Ex. 1; I.G. Ex. 1/1-4.
6. On February 27, 1990, the district court accepted
Petitioner's guilty plea to count three of the
indictment. I.G. Ex. 3/1.
7. Petitioner pleaded guilty to knowingly, willfully,
and unlawfully distributing 50 dosage units (2.5
milligrams each) of Diphenatol, a Schedule V narcotic
controlled substance, in violation of 21 U.S.C.
841(a)(1). I.G. Ex. 3/1.
8. Petitioner was sentenced to one year of probation,
payment of a fine of $5,000.00, and payment of
restitution to the State of North Carolina in the amount
of $1,066.00. I.G. Ex. 3/1.
9. Petitioner was additionally sentenced to surrender
his pharmacy license to the North Carolina Pharmacy Board
(Pharmacy Board) for one year and to not practice
pharmacy for a period of one year, beginning with the
date of his sentence. I.G. Ex. 3/1.
10. In October, 1990, the Pharmacy Board conducted a
disciplinary hearing concerning Petitioner, based on
Petitioner's plea of guilty to count three of the federal
criminal indictment. Tr. at 145-148.
11. The Pharmacy Board concluded that Petitioner's
conduct did not constitute a violation of North Carolina
law, nor did it constitute a basis in fact for his guilty
plea. P. Ex. 3/3.
12. A "controlled substance" is a "drug or other
substance or immediate precursor, included in schedule I,
II, III, IV, or V of [21 U.S.C. 812]." 21 U.S.C.
811(a)(1)(A), (C).
13. Drugs or other substances listed in Schedules I
through V have a potential for abuse. See Tr. at 57.
14. The lower the number of the schedule in which a
controlled substance is listed, the less the medical
value of that substance, and the greater the potential
for abuse. Tr. at 57.
15. The drug Diphenatol is also known by its brand name
of Lomotil. I.G. Ex. 1.
16. On October 1, 1987, an individual requested
Petitioner to refill a prescription for Lomotil 2.5
milligram tablets. I.G. Ex. 13/6.
17. Petitioner recognized the prescription as one which
originally had been ordered by a physician, Dr. Eugene F.
Hamer. I.G. Ex. 13/6.
18. Dr. Hamer died on July 26 1987, and Petitioner knew
on October 1 1987, that Dr. Hamer was dead. I.G. Ex.
13/6.
19. Prior to his death, Dr. Hamer conversed with
Petitioner and asked Petitioner to take care of his
patients after he died. I.G. Ex. 13/7.
20. Petitioner knew that there were no refills
authorized for the prescription for Lomotil which Dr.
Hamer's former patient presented to him on October 1,
1987. I.G. Ex. 13/6.
21. Petitioner nonetheless sold Lomotil to the former
patient. I.G. Ex. 13/6.
22. In order to document the sale of Lomotil as a
legitimate prescription, Petitioner created a
prescription, number 4006439, which he recorded as part
of his computerized records. I.G. Ex. 13/6.
23. Petitioner filled other prescriptions after Dr.
Hamer died, as having been ordered by Dr. Hamer. I.G.
Ex. 13/7-8, 17/1-7, 21; Tr. at 257-258.
24. Among the other prescriptions which Petitioner
filled after Dr. Hamer died as having been ordered by Dr.
Hamer was a prescription for Valium. I.G. Ex. 13-7.
25. Valium is a Schedule IV controlled substance. I.G.
Ex. 10/2, 4.
26. Petitioner's assertion that the prescriptions which
he filled as having been ordered by Dr. Hamer had been
specifically ordered by Dr. Hamer by telephone prior to
his death is not credible. I.G. Ex. 13/1, 17/1-5; Tr. at
60-62, 96; See Tr. at 227-228, 251; See 21 C.F.R.
1304.04, 1306.05, 1306.21.
27. On March 21 1988, Petitioner caused to be presented
a Medicaid reimbursement claim for the sale of Chronulac
syrup to James Yarborough, a Medicaid recipient. I.G.
Ex. 11/4.
28. Although Petitioner's records contain a record of a
prescription for Chronulac syrup to James Yarborough
dated November 13, 1987, Chronulac syrup was not
prescribed to James Yarborough on that date or on other
dates when James Yarborough visited a physician. I.G.
Ex. 11/1; Tr. at 170-171.
29. The claim which Petitioner caused to be presented on
March 21, 1988, for Medicaid reimbursement for the sale
of Chronulac syrup to James Yarborough is false in that
it purports to be for a prescription ordered by a
physician. Findings 27 and 28.
30. Petitioner agreed, as a provider of Medicaid items
or services, to be responsible for the accuracy and
truthfulness of all claims for Medicaid reimbursement
which he submitted or caused to be submitted. Tr. at
180, 182.
31. Petitioner is not absolved from his responsibility
for the accuracy and truthfulness of claims for Medicaid
reimbursement which he presented or caused to be
presented by delegating the duty to prepare and present
claims to an employee under his supervision. See Tr. at
180.
32. The I.G. did not prove that Petitioner knew that the
Medicaid claim he caused to be presented on March 21,
1988, for the sale of Chronulac syrup to James
Yarborough, was false. See Findings 27-31.
33. The I.G. proved that Petitioner was negligent in the
presentation, on March 21, 1988, of the false claim for
the sale of Chronulac syrup to James Yarborough.
Findings 27-31.
34. On August 14 1986, Petitioner filled a prescription,
#4001000, for 60 tablets of Tylenol #4 with codeine, for
a customer named Betty Simpson. I.G. Ex. 18/6.
35. The prescription specified that there were to be no
refills. I.G. Ex. 18/6.
36. Petitioner refilled prescription #4001000 on August
23, August 27, and September 3, 1986, despite the
specification that no refills be made. I.G. Ex. 18/39.
37. Tylenol with codeine tablets are a Schedule III
controlled substance. I.G. Ex. 10/47.
38. Codeine can produce drug dependence of the morphine
type, and therefore has the potential for being abused.
Psychic dependence, physical dependence, and tolerance
may develop upon repeated administration of the drug, and
it should be prescribed and administered with the same
degree of caution appropriate to the use of other oral
narcotic-containing medications. I.G. Ex. 10/47.
39. On June 24, 1987, Petitioner recorded prescription
#4005032 for 60 tablets of Tylenol #4 with codeine, for
Betty Simpson. I.G. Ex. 18/53.
40. Petitioner's records stated that prescription
#4005032 was a "dummy," meaning that it was a void
prescription that had not been filled and should not be
refilled. I.G. Ex. 18/54; Tr. at 212-213, 215, 216-217.
41. Despite the fact that prescription #4005032 was a
"dummy," Petitioner filled the prescription and refilled
it on four subsequent occasions. I.G. Ex. 18/55-58; Tr.
at 216-217.
42. Petitioner knew that Betty Simpson was addicted to
codeine. Tr. at 245.
43. The I.G. proved that Petitioner sold Tylenol #4 with
codeine, a Schedule III controlled substance which had
not been prescribed by a physician, to Betty Simpson.
Findings 34-42.
44. Petitioner either knew, had reason to know, or
should have known that his refilling of prescription
#4001000 and his filling and refilling of prescription
#4005032 were not authorized by a physician. Findings
34-43.
45. A Schedule II controlled substance must normally be
sold by a pharmacist only pursuant to a written
prescription, filled out and signed by a physician in
advance of the sale. 21 C.F.R. 1306.11(a).
46. A pharmacist may sell a Schedule II controlled
substance based on the oral prescription of a physician
only in an emergency. I.G. Ex. 23/1; Tr. at 68; 21
C.F.R. 1306.11(d).
47. A pharmacist may sell a Schedule II controlled
substance based on the oral prescription of a physician
only in a quantity limited to an amount adequate to deal
with an emergency. 21 C.F.R. 1306.11(d)(1), (2).
48. A physician who orally prescribes a Schedule II
controlled substance must, within 72 hours of prescribing
it, send a written prescription to the pharmacist who
fills the prescription. I.G. Ex. 23/1; Tr. at 68-69; 21
C.F.R. 1306.11(d)(4).
49. If the pharmacist who fills an oral prescription for
a Schedule II controlled substance does not receive a
written prescription from the prescribing physician
within 72 hours from the time of the prescription, he or
she must notify the Drug Enforcement Administration
(DEA). I.G. Ex. 23/1; Tr. at 68-69; 21 C.F.R.
1306.11(d)(4).
50. Between 1986 and 1988, Monroe Family Pharmacy filled
over 900 oral prescriptions for more than 23,000 dosage
units of Schedule II controlled substances. I.G. Ex.
23/1-2; Tr. at 58, 69.
51. Of these prescriptions, 590 were filled by
Petitioner. I.G. Ex. 23/1.
52. None of these prescriptions were designated as
"emergency" prescriptions. I.G. Ex. 23/1; Tr. at 69.
53. Many of the oral prescriptions for Schedule II
controlled substances which were filled at the Monroe
Family Pharmacy were signed by the prescribing physician
after they had been filled. I.G. Ex. 23/1-2; Tr. at 69,
247.
54. Some of the oral prescriptions for Schedule II
controlled substances which were filled at the Monroe
Family Pharmacy were signed by a physician other than the
physician who ordered the prescriptions. I.G. Ex. 23/2,
23/12-19.
55. Nineteen prescriptions for Schedule II controlled
substances which were filled by Petitioner were never
signed by a physician. I.G. Ex. 23/2,4-11; Tr. at 70,
211-212, 261.
56. The I.G. proved that Petitioner knew or should have
known that he authorized the filling of prescriptions for
Schedule II controlled substances in violation of legal
requirements. Findings 45-55.
57. Petitioner was convicted of a criminal offense
relating to the unlawful distribution, prescription, or
dispensing of a controlled substance, within the meaning
of section 1128(b)(3) of the Act. Social Security Act,
section 1128(b)(3).
58. The Secretary of Health and Human Services
(Secretary) delegated to the I.G. the authority to
determine, impose, and direct exclusions pursuant to
section 1128 of the Act. 48 Fed. Reg. 21662 (May 13,
1983).
59. On December 21, 1990, the I.G. excluded Petitioner
from participating in Medicare and directed that he be
excluded from participating in Medicaid, pursuant to
section 1128(b)(3) of the Act.
60. The exclusion imposed and directed against
Petitioner is for five years.
61. The remedial purpose of section 1128 of the Act is
to protect the integrity of federally-funded health care
programs from individuals and entities who have been
shown to be untrustworthy. Social Security Act, section
1128.
62. Petitioner engaged in a criminal act that
jeopardized the health and safety of an individual.
Findings 7, 12-23.
63. The I.G. proved that, between 1986 and 1988,
Petitioner made unauthorized or unlawful sales of
controlled substances which jeopardized the health and
safety of individuals. Findings 24-26, 34-56; See 42
C.F.R. 1001.125(b)(2).
64. The I.G. proved that Petitioner made unauthorized or
unlawful sales of controlled substances on numerous
occasions over a nearly two-year period. Findings 7, 12-
26, 34-56; See 42 C.F.R. 1001.125(b)(1).
65. The I.G. did not prove that Petitioner willfully
made unauthorized or unlawful sales of controlled
substances for personal gain.
66. The I.G. proved that Petitioner was either negligent
or reckless with respect to the manner in which he made
sales of controlled substances. Findings 44, 56.
67. Petitioner refuses to acknowledge the wrongfulness
of his acts or the adverse impact that his acts may have
had on individuals. See Tr. at 229, 238, 240-242, 245-
246.
68. Petitioner, by his acts and his failure to
comprehend the wrongfulness of his acts or the potential
harm of his acts, has demonstrated that he cannot be
trusted to deal with beneficiaries and recipients of
federally-funded health care programs.
69. An exclusion is needed in this case to protect the
beneficiaries and recipients of federally-funded health
care programs from future harm by Petitioner.
70. The five-year exclusion imposed and directed against
Petitioner by the I.G. is reasonable.
ANALYSIS
The parties do not dispute that Petitioner was convicted
of a criminal offense within the meaning of section
1128(b)(3) of the Act. The I.G. therefore was authorized
by section 1128(b)(3) to impose and direct an exclusion
against Petitioner. The issue which I must decide is the
reasonableness of the five-year exclusion which the I.G.
imposed and directed against Petitioner.
Section 1128 is a civil remedies statute. The remedial
purpose of section 1128 is to enable the Secretary to
protect federally-funded health care programs and their
beneficiaries and recipients from individuals and
entities who have proven by their misconduct that they
are untrustworthy. Exclusions are intended to protect
against future misconduct by providers.
Federally-funded health care programs are no more
obligated to deal with dishonest or untrustworthy
providers than any purchaser of goods or services would
be obligated to deal with a dishonest or untrustworthy
supplier. The exclusion remedy allows the Secretary to
suspend his contractual relationship with those providers
of items or services who are dishonest or untrustworthy.
The remedy enables the Secretary to assure that
federally-funded health care programs will not continue
to be harmed by dishonest or untrustworthy providers of
items or services. The exclusion remedy is closely
analogous to the civil remedy of termination or
suspension of a contract to forestall future damages from
a continuing breach of that contract.
Exclusion may have the ancillary benefit of deterring
providers of items or services from engaging in the same
or similar misconduct as that engaged in by excluded
providers. However, the primary purpose of an exclusion
is the remedial purpose of protecting the trust funds and
beneficiaries and recipients of those funds. Deterrence
cannot be a primary purpose for imposing an exclusion.
Where deterrence becomes the primary purpose, section
1128 no longer accomplishes the civil remedies objectives
intended by Congress. Punishment, rather than remedy,
becomes the end.
[A] civil sanction that cannot fairly be said solely
to serve a remedial purpose, but rather can be
explained only as also serving either retributive or
deterrent purposes, is punishment, as we have come
to understand the term.
United States v. Halper, 490 U.S. 435, 448 (1989).
Therefore, in determining the reasonableness of an
exclusion, the primary consideration must be the degree
to which the exclusion serves the law's remedial
objective of protecting program recipients and
beneficiaries from untrustworthy providers. An exclusion
is not excessive if it reasonably serves these
objectives.
The hearing in an exclusion case is, by law, de novo.
Social Security Act, section 205(b). Evidence which is
relevant to the reasonableness of the length of an
exclusion will be admitted in a hearing on an exclusion
whether or not that evidence was available to the I.G. at
the time the I.G. made his exclusion determination.
Evidence which relates to a petitioner's trustworthiness
or the remedial objectives of the exclusion law is
admissible at an exclusion hearing even if that evidence
is of conduct other than that which establishes statutory
authority to exclude a petitioner. In this case, for
example, Petitioner pleaded guilty to a single count of
unlawful sale of a controlled substance. However, the
I.G. offered evidence as to misconduct by Petitioner
beyond the ambit of that offense, which I received. I
also permitted Petitioner to offer evidence as to his
trustworthiness which did not strictly relate to his plea
of guilty.
The purpose of the hearing is not to determine how
accurately the I.G. applied the law to the facts before
him, but whether, based on all relevant evidence, the
exclusion comports with legislative intent. In this
case, the I.G. offered the testimony of his agent, Marian
Turner, to show what factors she considered in making her
exclusion recommendation to the I.G. See Tr. 21-27.
Petitioner extensively cross-examined Ms. Turner for the
purpose of showing that, in making her recommendation,
she omitted to consider factors which she should have
taken into consideration. See Tr. at 27-44. I consider
Ms. Turner's testimony essentially to be irrelevant.
Because of the de novo nature of the hearing, my duty is
to objectively determine the reasonableness of the
exclusion by considering what the I.G. determined to
impose in light of the statutory purpose and the evidence
which the parties offer and I admit. The I.G.'s thought
processes in arriving at his exclusion determination are
not relevant to my assessment of the reasonableness of
the exclusion.
Furthermore, my purpose in hearing and deciding the issue
of whether an exclusion is reasonable is not to second-
guess the I.G.'s exclusion determination, but to decide
whether the determination was extreme or excessive. 48
Fed. Reg. 3744 (Jan. 27, 1983). Should I determine that
an exclusion is extreme or excessive, I have authority to
modify the exclusion, based on the law and the evidence.
Social Security Act, section 205(b).
The Secretary has adopted regulations to be applied in
exclusion cases. The regulations specifically apply to
exclusion cases for "program-related" offenses
(convictions for criminal offenses relating to Medicare
or Medicaid). The regulations express the Secretary's
policy for evaluating cases where the I.G. has discretion
in determining the length of an exclusion. The
regulations require the I.G. to consider factors related
to the seriousness and program impact of the offense and
to balance those factors against any factors that may
exist demonstrating trustworthiness. 42 C.F.R.
1001.125(b)(1) - (7).
Petitioner engaged in a pattern of misconduct which
demonstrates that he is not a trustworthy provider of
health care. The I.G. proved that, over an approximately
two-year period, Petitioner persistently violated federal
laws and regulations concerning the sale of controlled
substances. 3/ What is more disturbing, however, is
Petitioner's refusal to admit that he committed
violations, even when confronted with overwhelming
evidence to the contrary. Petitioner refuses to
acknowledge even the possibility that his conduct could
have adversely affected the health or safety of his
customers. In light of this refusal, I conclude that
Petitioner is untrustworthy and that a five-year
exclusion is needed to provide reasonable protection to
the well-being of program beneficiaries and recipients.
Petitioner was the owner and manager of a pharmacy.
Beginning in April, 1988, Petitioner was investigated by
agents of the DEA for purposes of determining whether
Petitioner violated federal laws concerning his sale of
controlled substances.
The DEA investigation established numerous and
substantial improprieties by Petitioner in his sale of
controlled substances. Petitioner admitted that he had
sold controlled substances to former patients of Dr.
Hamer, a physician who was deceased, based on a request
by that physician, prior to his death, that Petitioner
take care of his patients. Findings 16-26. Petitioner
eventually pleaded guilty to a criminal charge emanating
from his unauthorized sale of a controlled substance to a
patient of the dead physician. Findings 6-8. It was
also established that Petitioner had sold substantial
amounts of Tylenol with codeine, a potentially addictive
Schedule III controlled substance, to a customer without
having received proper authorization from a physician for
such sales. Findings 34-44. Petitioner knew that this
customer was addicted to codeine. Finding 42.
The DEA investigation also established massive
irregularities in Petitioner's sale of Schedule II
controlled substances. Federal regulations require that,
except in emergencies, Schedule II controlled substances
not be dispensed by a pharmacist without the pharmacist
first having received a written prescription from a
provider. These regulations reflect the potential for
abuse of Schedule II controlled substances and the
potential harm to the well-being of consumers that may
result from misuse of such substances. Regulations
additionally require that in an emergency where a
Schedule II controlled substance is dispensed pursuant to
an oral prescription, the prescribing provider must
subsequently provide the dispensing pharmacist with a
written prescription. If a written prescription is not
made within 72 hours, the dispensing pharmacist is
required to notify the DEA. 21 C.F.R. 1306.11(d);
Findings 45-49.
Petitioner ignored these regulations. Over a two-year
period, Petitioner filled over 900 prescriptions for
Schedule II controlled substances based on "call-in"
(oral) prescriptions. There is no evidence to establish
that even a small percentage of these prescriptions was
ordered and filled in emergencies. Although Petitioner
did obtain after-the-fact written authorizations for most
of these prescriptions, there were instances where no
written provider authorization was obtained. Finding 55.
Petitioner did not notify the DEA in any of these
instances. 4/
Petitioner contends that the North Carolina Pharmacy
Board found that he was not guilty of the criminal
offense to which he pleaded. See Findings 9-11.
Therefore, according to Petitioner, I should attach
little weight to his guilty plea in determining his
trustworthiness as a health care provider.
I have considered both the decision of the Pharmacy Board
and the testimony of Mr. Work, the Pharmacy Board's
Executive Director. I conclude that the Pharmacy Board's
decision is of little weight in assessing Petitioner's
trustworthiness as a health care provider. My obligation
to hear and decide the issue of the reasonableness of the
exclusion imposed and directed against Petitioner is
independent of any obligations assumed and discharged by
the Pharmacy Board. Section 205(b) of the Social
Security Act vests in me the duty to independently assess
the evidence on the issue of trustworthiness. 5/
The Pharmacy Board conducted a disciplinary hearing
concerning Petitioner's pharmacy license in the aftermath
of his pleading guilty to the unlawful sale of a
controlled substance. The Pharmacy Board considered the
narrow question of whether Petitioner's sale of drugs to
former patients of Dr. Hamer was a crime. The Pharmacy
Board did not make extensive findings of fact or
conclusions of law. See P. Ex. 2, 3; I.G. Ex. 6. The
Pharmacy Board evidently chose to discount both
Petitioner's written statements to DEA agents and his
plea of guilty to a criminal offense.
I disagree with the Pharmacy Board's conclusion. My
conclusion is that not only did Petitioner admit his
guilt, but that the I.G. offered evidence which proved
that Petitioner knowingly sold controlled substances to
former patients of Dr. Hamer without prescriptions
required by law. Findings 16-26.
There is a pattern to the manner in which Petitioner sold
controlled substances. The I.G. has not proven that
Petitioner was motivated by venality to make unauthorized
sales or sales which contravened federal regulations.
The I.G. established that Petitioner was indifferent to
his obligations to maintain strict controls over the
manner in which he dispensed controlled substances. I
have no doubt that Petitioner did not consider his acts
to have been wrongful. I accept Petitioner's explanation
that his acts were motivated by good intentions.
However, his acts were illegal, and they were not excused
by whatever benign intentions Petitioner may have had.
Initially, Petitioner told the DEA agents that his
unauthorized sale of drugs after Dr. Hamer's death to
Dr. Hamer's patients as a humanitarian gesture intended
to assure that the patients continued to receive
necessary medications. I accept Petitioner's initial
explanation for his acts. However, Petitioner's
explanation does not suggest that he can now be trusted
to sell controlled substances in compliance with
applicable laws and regulations. To the contrary, it
suggests that Petitioner is capable of placing himself
above the law, when he views the law's requirements as
hindering the performance of what he views as his duties
to his customers. 6/
Petitioner explained his unauthorized sale of Tylenol
with codeine to a customer also as having been motivated
by humanitarian considerations. Tr. at 245-246.
Essentially, Petitioner asserted that he was trying to
help this addicted person by monitoring and controlling
her access to codeine. This explanation is
uncontradicted and I accept it. However, it again
demonstrates that Petitioner is indifferent to the
requirements of law when those requirements conflict with
his concept of his role as a pharmacist.
Finally, Petitioner explained his sale of Schedule II
controlled substances based on call-in prescriptions as
emanating from the close relationship he maintained with
physicians whose offices were adjacent to his pharmacy.
Tr. at 245-246. Petitioner did not deny that he knew
that he was obligated under federal law to obtain advance
written prescriptions for the sale of Schedule II
controlled substances. From Petitioner's standpoint, the
relationship of mutual trust evidently obviated the need
to comply with federal regulations. Petitioner admitted
that he changed the manner in which he sold Schedule II
controlled substances only after he was directed to do so
by DEA agents. As with Petitioner's other explanations
for his conduct, this explanation demonstrates an
indifference to the requirements of law. And although
Petitioner's indifference may have been motivated by what
he considered to be benign and practical considerations,
it nonetheless establishes a propensity in Petitioner to
ignore the requirements of law when he decides that they
are inconvenient.
Federal laws and regulations concerning the sale of
controlled substances reflect a legislative conclusion
that these substances are potentially dangerous to the
health and safety of consumers. Because of the potential
for harm and abuse, Congress has decided that the sale of
controlled substances must be strictly regulated.
Undoubtedly the laws and regulations work at times to
inconvenience providers, pharmacists, and consumers. But
any inconvenience which results to these parties reflects
the legislative determination that strict controls must
be maintained for the public good. No individual has the
right to exempt himself from inconvenient aspects of this
system of controls, regardless of his motivation.
What most disturbs me about this case is that Petitioner
demonstrates no understanding that his contravention of
law and regulations potentially could cause great harm to
those customers who relied on him. Petitioner has not
satisfied me that he would not in the future violate laws
and regulations concerning the sale of controlled
substances in circumstances where he found compliance to
be inconvenient. I draw the inference from Petitioner's
testimony and his demeanor that to this day he does not
accept his responsibility to comply with federal laws and
regulations governing the sale of controlled substances
where to do so might conflict with his perception of his
duty to his customers. He did not acknowledge at any
point in his testimony that he had done something wrong.
Indeed, he rejected even the conclusion that he was
actually guilty of the criminal offense to which he had
entered a guilty plea. Furthermore, Petitioner sees
himself as a victim of government harassment, rather than
as one who repeatedly has failed to comply with his legal
duties as a pharmacist. See Tr. at 254-255. 7/
In reaching this conclusion concerning Petitioner's
propensity to disregard the requirements of law, I have
considered the evidence which Petitioner offered
concerning his trustworthiness and character. Petitioner
offered the testimony of his minister, as well as the
testimony of a former employee at Monroe Family Pharmacy,
and that of a personal friend, to the effect that he was
a highly moral, honest, and trustworthy individual. I
find the testimony of these individuals credible insofar
as it concerns Petitioner's personal honesty. However,
none of this evidence derogates from my conclusion that
Petitioner is an untrustworthy health care provider.
While it is evident that Petitioner is a highly moral
person, it is equally evident that he manifests a certain
contempt for law and regulations which he views as
conflicting with his sense of duty. It is precisely
because Petitioner is capable of contravening the law
when he finds the law to be a hindrance, and because he
does not accept the wrongfulness of such conduct, that I
find Petitioner to be untrustworthy.
I conclude that the five-year exclusion imposed and
directed against Petitioner by the I.G. is not extreme or
excessive, in light of Petitioner's absence of
trustworthiness. Petitioner manifests a propensity to
engage in conduct which could jeopardize the health and
safety of program beneficiaries and recipients. I have
no assurance that Petitioner will not repeat this conduct
if afforded the opportunity to do so.
CONCLUSION
Based on the law and the evidence, I conclude that the
five-year exclusion from participating in Medicare and
Medicaid imposed and directed against Petitioner was
reasonable. Therefore, I sustain the exclusion.
__________________________
Steven T. Kessel
Administrative Law Judge
1.
"State health care program" is defined by section
1128(h) of the Social Security Act to cover three types
of federally-financed health care programs, including
Medicaid. I use the term "Medicaid" hereafter to
represent all State health care programs from which
Petitioner was excluded.
2.
The exhibits and transcript of the hearing will be
referred to as follows:
I.G. Exhibit I.G. Ex. (number)/(page)
Petitioner Exhibit P. Ex. (number)/(page)
ALJ Exhibit ALJ Ex. 1
Transcript Tr. at (page)
3.
Petitioner also negligently presented at least one
false Medicaid claim. Findings 27-33.
4.
The I.G. also asserted, based on the DEA investigation
of Petitioner, that there were numerous other
irregularities in Petitioner's sale of controlled
substances in addition to those which I find to have
occurred. I have not made specific findings concerning
each of these other alleged irregularities, because I
conclude from my review of the evidence that they were
not substantiated. For example, the I.G. alleged that
Petitioner sold controlled substances to a customer,
Esther Hathaway, allegedly based on call-in prescriptions
from a physician, Dr. Harley. See I.G.'s Post-Hearing
Brief at 20-21. According to the I.G., Dr. Harley was
not licensed to practice in North Carolina and denied
having called in prescriptions to the Monroe Family
Pharmacy for Ms. Hathaway. Therefore, according to the
I.G., Petitioner unlawfully sold controlled substances to
Esther Hathaway. The evidence relied on by the I.G. to
substantiate this assertion is a hearsay account of an
interview of Dr. Harley by a DEA agent. No statement by
Dr. Harley was offered by the I.G., either in the form of
live testimony or a sworn affidavit. Absent some
corroboration from Dr. Harley, I conclude that the
account of the interview by the DEA agent is of
insufficient probity to substantiate the I.G.'s
allegation.
5.
By contrast, the doctrine of collateral estoppel would
apply to the decision of a state court or a state
licensing agency in deciding whether the Secretary had
derivative authority to impose an exclusion pursuant to
one of the subsections of section 1128 of the Act. The
Secretary derives his authority to impose and direct
exclusions from actions by state courts and agencies, and
not from the conduct which motivated these courts and
agencies to take action. See Andy E. Bailey, C.T., DAB
Civ. Rem. C-110 (1989), aff'd DAB App. 1131 (1990); John
w. Foderick, M.D., DAB App. 1125 (1990).
6.
At the hearing, Petitioner offered a different
explanation for the sale of drugs to Dr. Hamer's patients
than that which he had given to the DEA agents. He
contended that, in fact, Dr. Hamer had explicitly called
in prescriptions for these drugs, shortly prior to his
death. Therefore, according to Petitioner, he had done
nothing illegal inasmuch as he had merely filled valid
prescriptions. I find that this explanation is not
credible. It directly contradicts statements which
Petitioner signed at the time of the investigation. I.G.
Ex. 13/6-7. It is not supported by any written evidence
of call-in prescriptions from Dr. Hamer. Furthermore, I
find not credible Petitioner's testimony that he did not
understand the meaning of the written statements which he
had given to I.G. agents. The statements were written in
plain English. Petitioner is an educated person. There
is nothing about those statements which suggests that
Petitioner misunderstood what he signed.
7.
This case contrasts with the case of Kenneth Behymer,
M.D., DAB Civ. Rem. C-140 (1990). The petitioner in
Behymer had unlawfully prescribed a controlled substance.
As with the case of Petitioner's conduct herein, Dr.
Behymer's act was motivated by what he considered at the
time to be humanitarian considerations. However, unlike
Petitioner, Dr. Behymer had engaged in an isolated
episode of misconduct. Furthermore, I was persuaded by
the evidence in that case that there was no likelihood
that Dr. Behymer would in the future engage in unlawfully
prescribing controlled substances. Therefore, I found
the exclusion to be excessive and I modified it.