Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
William V. McAbee, D.D.S.,
Petitioner,
- v. -
The Inspector General.
DATE: August 1, 1991
Docket No. C-307
DECISION
On September 6, 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 five years. 1/ The I.G. told
Petitioner that he was being excluded as a result of his
conviction in the Fourteenth Judicial Circuit Court,
Walterboro, South Carolina (state court), of a criminal
offense related to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled
substance. Petitioner was advised that exclusion from
participation in Medicare and Medicaid of individuals or
entities convicted of such an offense is authorized by
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. I held an in-
person evidentiary hearing in this case in Atlanta,
Georgia on May 10, 1991. Based on the evidence
introduced at the hearing, and on applicable law, I
conclude that the five-year exclusion imposed and
directed against Petitioner by the I.G. is reasonable.
Therefore, I am entering a decision in this case
sustaining that exclusion. 2/
ISSUES
The issues in this case are whether:
1. the I.G. had authority to exclude Petitioner;
2. the five-year exclusion imposed and directed
against Petitioner by the I.G. is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW 3/
1. Petitioner is a dentist who was licensed to practice
in South Carolina until 1989. I.G. Ex. 4.
2. The Bureau of Drug Control (South Carolina
Department of Health and Environmental Control) and the
South Carolina Law Enforcement Division conducted an
investigation of the prescriptions written by Petitioner
between March 28, 1987 and February 2, 1988. I.G. Ex.
14, 16/1-2.
3. The investigation revealed that Petitioner: 1) wrote
prescriptions in the names of individuals who never heard
of or received the prescriptions; 2) received the
prescriptions for his own use; 3) conspired to unlawfully
dispense controlled substances by writing prescriptions
for controlled substances in an individual's name and
requesting that the individual return some of the
substances to him; and 4) altered a prescription to
obtain a controlled substance. I.G. Ex. 14/1-56, 16/2-3.
4. On November 3, 1988 Petitioner was charged with: 1)
nine counts of conspiracy to unlawfully distribute a
controlled substance; 2) 22 counts of unlawful
distribution of a controlled substance; 3) one count of
failure to make, keep and furnish records and information
on controlled substances; 4) one count of unlawfully
obtaining a controlled substance by fraud by altering the
refills on a prescription; and 5) one count of breach of
trust with fraudulent intent. I.G. Ex. 6/1, 14.
5. On or about March 10, 1989, Petitioner pleaded
guilty in state court to 22 counts of unlawful dispensing
of a controlled substance, eight counts of criminal
conspiracy, one count of obtaining drugs by fraud or
deceit, and one count of failing to make, keep, and
furnish records on controlled substances. I.G. Ex. 7,
8/1-96.
6. As a result of his conviction, Petitioner was
sentenced to five years' imprisonment and a $5,000 fine.
The state court suspended the term of imprisonment and
then placed Petitioner on five years of probation, with
intensive supervision. I.G. Ex. 7/1
7. On August 1, 1989, Petitioner voluntarily
surrendered his controlled substances registration
privileges to the South Carolina Department of Health and
Environmental Control. Petitioner further agreed that
his federal Drug Enforcement Administration number could
be terminated without any other proceedings. I.G. Ex.
15.
8. On January 2, 1989, the Colleton County Sheriff's
Department found Petitioner in his office, very
intoxicated and smoking. Petitioner was transported to
the Colleton County Emergency Room where a doctor signed
a commitment order for Petitioner to be taken to Morris
Village, a substance abuse treatment facility. I.G. Ex.
5/1-2, 4/2.
9. On April 29, 1989, the South Carolina Board of
Dentistry (Dentistry Board) held a disciplinary hearing
concerning Petitioner's license to practice dentistry in
South Carolina. At this hearing, Petitioner told the
Board that he did not dispute any of the charges brought
against him. Petitioner told the Board that he had
received drug counseling and had not taken drugs or
alcohol since his release from Morris Village. I.G. Ex.
4/2.
10. On May 29, 1989, the Dentistry Board revoked
Petitioner's license, citing both Petitioner's criminal
conviction and the incident of January 2, 1989, in which
Petitioner was found to be intoxicated. The Dentistry
Board also stated that Petitioner's problem with alcohol
and drugs was longstanding. I.G. Ex. 4.
11. The Dentistry Board's findings were in part premised
on a 1985 agreement between the Dentistry Board and
Petitioner in which Petitioner voluntarily agreed to be
subject to random, unannounced, blood and urine
screenings for drugs and alcohol conducted by
investigators assigned to the Dentistry Board. I.G. Ex.
4/1-3.
12. The Dentistry Board stated that Petitioner could re-
apply for his license either: 1) at the end of his court
ordered five-year probation; or 2) after waiting two
years and satisfactorily completing the following
requirements. These requirements included: 1)
completion of one year of post-graduate training in
general dentistry (approved by the Dentistry Board); 2) a
showing of exemplary behavior without committing any acts
of misconduct or violations; 3) a showing of regular,
verified attendance and participation in AA meetings; and
4) obtaining a satisfactory psychiatric examination from
a certified Dentistry Board approved psychiatrist. I.G.
Ex. 4/3.
13. During a home visit by Petitioner's probation agent
on March 8, 1990, Petitioner was found to be highly
intoxicated. I.G. Ex. 9/3.
14. On March 9, 1990, Petitioner was arrested for
violating his probation. He was charged with failure to:
1) refrain from excessive use of alcohol; 2) carry out
all instructions given by his probation agent; 3) comply
with special conditions of not consuming alcohol; and 4)
comply with special conditions to follow the advice of
the Colleton County Alcohol & Drug Abuse Commission
(Commission). Petitioner was terminated from the
Commission's program on March 9, 1990 for failure to
comply with the program's conditions. I.G. Ex. 9/1-3.
15. On April 9, 1990, Petitioner's probation was revoked
and he was ordered to serve one year of his original
prison sentence. I.G. Ex. 10.
16. Petitioner was incarcerated from April 1990 to
November 1990. Tr. 25.
17. Petitioner has a history of abusing controlled
substances beginning as early as 1973.
18. On March 9, 1973, Petitioner was found unconscious
in his office due to an overdose of amphetamines and/or
alcohol. During an investigation of Petitioner by the
Narcotic and Drug Control Division (South Carolina
Department of Health and Environmental Control) begun on
March 12, 1973, Petitioner admitted his alcohol problem,
but initially denied abusing amphetamines. Petitioner
subsequently admitted use of amphetamines to a limited
extent and admitted writing two false prescriptions.
I.G. Ex. 11/1-2, 16/2.
19. As a result of this investigation, Petitioner
voluntarily surrendered his federal and state
registration for all prescriptions except for schedule II
and schedule III narcotics, for which he asserted he had
a professional need. I.G. Ex. 11/2, 16/2.
20. On April 2, 1973, Petitioner voluntarily surrendered
his remaining registration for Schedules II and III
narcotics for a period to be determined by the Dentistry
Board, in order to show his good faith in any proceedings
which might be brought by the Dentistry Board. I.G. Ex.
12.
21. On December 13, 1979, the Dentistry Board
recommended that full prescribing privileges be returned
to Petitioner. I.G. Ex. 13/1.
22. On January 14, 1980, the Bureau of Drug Control
(South Carolina Department of Health and Environmental
Control) issued Petitioner a probationary controlled
substance registration, subject to the conditions that:
Petitioner comply with all applicable provisions of the
controlled substances act and regulations and that
Petitioner not possess or dispense any controlled
substance containing amphetamine or its salts,
methamphetamine or its salts, or any other controlled
substance in any schedule which could be used as an
anorectic drug. I.G. Ex. 13.
23. On August 1, 1989, Petitioner voluntarily
surrendered his controlled substances registration number
to the Bureau of Drug Control (South Carolina Department
of Health and Environmental Control). I.G. Ex. 15.
24. Petitioner was "convicted" of a criminal offense
within the meaning of section 1128(i) of the Act.
Finding 5.
25. Petitioner was convicted of a criminal offense
"relating to the unlawful manufacture, distribution,
prescription or dispensing of a controlled substance,"
within the meaning of section 1128(b)(3) of the Act.
26. Pursuant to section 1128(b)(3) of the Act, the
Secretary of DHHS (Secretary) has authority to impose and
direct an exclusion against Petitioner from participating
in Medicare and Medicaid.
27. The Secretary delegated to the I.G. the duty to
impose and direct exclusions pursuant to section 1128 of
the Act. 48 Fed. Reg. 21662 (May 13, 1983).
28. On September 6, 1990, the I.G. advised Petitioner
that he was excluding him from participating in the
Medicare and Medicaid programs for five years, pursuant
to section 1128(b)(3) of the Act.
29. A remedial objective of section 1128(b)(3) of the
Act is to protect beneficiaries and program funds by
excluding individuals or entities who by conduct have
demonstrated as risk that they may engage in fraud,
substandard services, abuse, or unsafe practices in
connection with controlled substances until such time as
those excluded can demonstrate that such risk no longer
exists. Social Security Act, Section 1128; S. Rep. No.
109, 100th Cong. 1st Sess., reprinted in 1987 U.S. Code
Cong & Admin. News 682.
30. Petitioner has pleaded guilty to numerous criminal
violations of State drug laws. See section
1001.125(b)(1); Findings 3-5.
31. Petitioner's actions could have had a severe adverse
impact on the health and safety of his patients. See
section 1001.125(b)(2); Findings 3, 8, 13, 14, 17, 18.
32. Petitioner received a lengthy sentence, which after
his probation violation included incarceration. See
1001.125(b)(5); Findings 6, 15.
33. Petitioner has a history of alcohol and drug abuse
going back at least to 1973. Findings 1-23.
34. Petitioner voluntarily pleaded guilty. Tr. 23;
Finding 5.
35. Petitioner has attempted in the past to treat his
alcohol and drug addiction, but has relapsed. Findings
1-23.
36. Petitioner has not demonstrated that he will not in
the future relapse and again abuse controlled substances.
Tr. 23 - 25, 32; P. Ex. 1.
37. Petitioner is still on probation and meets with his
probation officer and representatives of Colleton
County's drug and alcohol abuse program. Petitioner has
not proven that when he is off probation he will no
longer abuse controlled substances. Tr. 24 - 27.
38. Petitioner has not been sober for a long enough
period of time for me to find that he poses no risk to
the Medicare and Medicaid programs or to program
beneficiaries and recipients. Findings 1-23, 35-37.
39. Petitioner has not proven that an exclusion of five
years is unreasonable.
40. The I.G.'s determination to exclude Petitioner from
participation in the Medicare and Medicaid programs for
five years is reasonable. Findings 1-39; See 42 C.F.R.
1001.125 (b).
ANALYSIS
Petitioner is a dentist with a lengthy history of drug
and alcohol abuse. In 1989, Petitioner was convicted of
numerous offenses relating to unlawful use and dispensing
of controlled substances. Based on this 1989 conviction,
the I.G. excluded Petitioner from participating in
Medicare and directed that he be excluded from
participating in Medicaid, for five years. Petitioner
contests both the basis for his exclusion and the
reasonableness of the length of his exclusion. Based on
the evidence introduced at the hearing and pursuant to
applicable law, I find that the I.G. is authorized to
exclude Petitioner and that the five-year exclusion
imposed and directed against Petitioner by the I.G. is
reasonable.
1. The I.G. had authority to exclude Petitioner
pursuant to section 1128(b)(3).
Section 1128(b)(3) of the Act permits the Secretary to
exclude from the Medicare and Medicaid programs any
"individual or entity that has been convicted, under
Federal or State law, of a criminal offense relating to
the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance." For the purposes
of the Act, Section 1128(i)(3) defines such "conviction"
to mean "when a plea of guilty or nolo contendere by the
individual or entity has been accepted by a Federal,
State or local court." For the I.G. to have the
authority to exclude Petitioner in this case, the I.G.
must first prove that Petitioner: 1) has been convicted
of a criminal offense; and 2) the conviction was for an
offense relating to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled
substance.
Petitioner asserted during the November 13, 1990
prehearing conference that his pleas of nolo contendere
did not amount to a "conviction" for the purposes of the
Act. I disagree. Pleas of nolo contendere, as well as
pleas of guilty, are "convictions" within the plain
meaning of section 1128(i)(3) of the Act. Furthermore,
Petitioner did not plead nolo contendere to the charges
against him, but pleaded guilty. Finding 4. Thus, I
find that Petitioner was "convicted" for the purposes of
the Act.
Petitioner was specifically convicted of 22 counts of
unlawfully dispensing controlled substances. Finding 4.
Petitioner's conviction is for an offense which is within
the plain meaning of section 1128(b)(3) of the Act. Thus
I find that as Petitioner was convicted of a criminal
offense relating to the unlawful dispensing of a
controlled substance, the I.G. had the authority to
exclude Petitioner from participating in the Medicare and
Medicaid programs..
2. The five-year exclusion imposed and directed
against Petitioner by the I.G. is reasonable.
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 does reasonably serve these
objectives.
The hearing in an exclusion case is, by law, de novo.
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.
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. 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 so much as it is
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). In evaluating the reasonableness
of an exclusion, I consider as guidelines the regulatory
factors contained in 42 C.F.R. 1001.125(b).
The evidence establishes that Petitioner is an alcoholic
and drug abuser. Over approximately the last 20 years,
Petitioner has been hospitalized for alcoholism and drug
addiction, has lost his license to practice dentistry and
his state and federal registrations to provide controlled
substances, has been convicted of controlled substances
violations, and has been incarcerated. Petitioner
previously has attempted to rehabilitate his behavior,
but always has relapsed.
I find that the five-year exclusion imposed and directed
against Petitioner is consistent with the exclusion law's
remedial purpose and is reasonable. Petitioner poses a
serious risk to the welfare and safety of program
beneficiaries and recipients as a consequence of his
addiction to and repeated abuse of controlled substances.
I base this conclusion on: 1) the serious crimes
Petitioner committed over a lengthy period of time; 2)
Petitioner's abuse of the high position of trust placed
in him by the state and federal governments when they
allowed him to prescribe drugs; 3) the jeopardy in which
Petitioner placed his patients; and 4) the lack of
assurance that Petitioner will not in the foreseeable
future relapse and again abuse controlled substances.
Petitioner's endangering of his patients' welfare coupled
with the possibility that he might relapse in the future
provides overwhelming justification for the exclusion in
this case. A lengthy exclusion is justified to insure
that program recipients and beneficiaries are protected
from even a slight possibility that they will be exposed
to the dangers presented by Petitioner's substance abuse.
See Bernard Lerner, M.D., DAB Civ. Rem. C-48 at 9
(1989); Michael D. Reiner, R.M.D., DAB Civ. Rem. C-197 at
9-10 (1990). In his capacity as a dentist, Petitioner is
in a position to perpetrate serious harm to patients
should he attempt to treat them while intoxicated with
controlled substances. Moreover, the evidence in this
case establishes that, in the past, Petitioner has
enlisted patients in his schemes to unlawfully obtain
controlled substances, thereby aggravating whatever
problems his patients may have had with medications abuse
and endangering their welfare and safety. See Bernard
Lerner, supra.
Petitioner now asserts that he is a faithful attendee at
A.A. meetings and is not drinking or taking drugs. He
has submitted a letter from a fellow A.A. member to
support his claim. Tr. 23-25, 32; P. Ex. 1. Petitioner
has also stated that he went through a substance abuse
program while incarcerated. Tr. 25. I commend
Petitioner on his efforts to remain sober. However,
Petitioner's newfound sobriety is of short duration,
whereas Petitioner's problems with alcohol and drugs are
of long duration. As recently as April 1990, Petitioner
was incarcerated for violating the terms of his probation
due to his inebriation. Findings 13-16. Petitioner has
only been sober and out of prison since November 1990.
Finding 16. Petitioner is still on probation and is
being monitored by state authorities. Tr. 24-27.
I am not prepared to find that Petitioner's attempts to
rehabilitate himself justify a finding that the five-year
exclusion imposed and directed by the I.G. is
unreasonable. Given Petitioner's history, Petitioner has
not maintained a long enough period of uncontrolled
sobriety for me to be able to say that he has
rehabilitated himself to such an extent that he no longer
presents a threat to program beneficiaries and recipients
or even to himself. Nor am I prepared to say, based on
the record in this case, that Petitioner will in the near
future become trustworthy. Petitioner admitted he does
not know whether he will ever abuse controlled substances
again. Petitioner testified that his only hope for
sobriety is to remain in treatment and that A.A. is his
therapy to stay alcohol and drug free. He acknowledged
that: "I have to stay within those limits. I mean, I am
just one drink away . . ." Tr. 32.
My decision is in part influenced by the fact that
Petitioner has only recently accepted responsibility for
his conduct. In 1973, when questioned about his misuse
of controlled substances, Petitioner initially denied
abusing them, and only admitted to abusing alcohol.
Finding 18. Furthermore, Petitioner continues to attempt
to minimize the gravity of his past misconduct. During
the proceeding before me, Petitioner attempted to assert
that he was not guilty of some counts of the charges to
which he voluntarily pleaded guilty. Finding 34.
Petitioner's failure to accept full responsibility for
his acts and his attempt to minimize the seriousness of
his prior misconduct are additional reasons for me to
doubt his trustworthiness to treat program beneficiaries
and recipients.
A margin of safety must be built into any exclusion
imposed against Petitioner. In this case, the five-year
exclusion imposed and directed against Petitioner does
not appear to be extreme or excessive in view of the
damage Petitioner could cause should he resume his past
conduct. See Reiner, supra., at 10. Therefore, I affirm
it in its entirety.
CONCLUSION
Based on the evidence in this case and the law, I
conclude that the five-year exclusion imposed against
Petitioner from participating in the Medicare and
Medicaid programs is reasonable. I sustain the exclusion
imposed and directed against Petitioner, and I enter a
decision in favor of the I.G..
__________________________
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. On June 5, 1991, I received a letter of May 31,
1991 from A. Cranwell Boensch, Esq., attesting to
Petitioner's faithful attendance at the Walterboro
Alcoholics Anonymous (A.A.) meetings. On June 10, 1991,
I sent the I.G. a letter granting him until June 21, 1991
to file any opposition to my consideration of this
letter. As the I.G. has not objected, I am admitting
this letter into evidence as P. Ex. 1.
3. The parties' exhibits, briefs, and transcript of
the hearing will be referred to as follows:
I.G.'s Exhibits I.G. Ex. (number/page)
I.G. Brief I.G. Br. (page)
Petitioner's Exhibits P. Ex. (number/page)
Transcript Tr. (page)