Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Stephen J. Willig, M.D.,
Petitioner,
- v. -
The Inspector General.
DATE: April 30, 1992
Docket No. C-362
Docket No. C-362
DECISION
On March 22 1991, the Inspector General (I.G.) notified Petitioner that he
was excluding him from
participating in Medicare and directing that he be excluded from participating
in State health care
programs, pursuant to section 1128(b)(4) of the Social Security Act (Act). Petitioner
timely requested a
hearing. The I.G. moved for partial summary disposition on the issue of whether
he had authority to
exclude Petitioner pursuant to section 1128(b)(4)(B) of the Act. Petitioner
opposed the motion and cross-
moved for summary disposition on the issue of authority to exclude. Petitioner
also requested oral
argument. I conducted oral argument by telephone on August 2, 1991. I reserved
judgment on the parties'
motions, however, because of new evidence which Petitioner sought to introduce
immediately prior to the
oral argument.
I conducted a hearing on September 4, 1991, in St. Louis, Missouri. I took
supplemental testimony from
Petitioner by telephone on December 5, 1991. The parties filed post-hearing
briefs in which they
addressed both the disputed issues of fact and the question of whether new regulations
promulgated by the
Secretary on January 29, 1992 should be applied in this case. I have carefully
considered the evidence
adduced at the hearing and in the supplemental telephone proceedings, as well
as the applicable law. I
have also considered the parties' arguments expressed in their motions for summary
disposition and post-
hearing briefs. I conclude that the I.G. had authority to exclude Petitioner
pursuant to section
1128(b)(4)(B) of the Act. I further conclude that the Secretary did not intend
for the new regulations to
establish criteria to govern administrative review of exclusions imposed pursuant
to section 1128(b) of the
Act, and did not intend the new regulations to be applied retroactively in cases
such as this one. I conclude
that an indefinite exclusion of Petitioner until he regains his license to practice
medicine in Missouri is not
reasonable in this case.
ISSUES
The issues in this case are:
1. Whether the I.G. had authority to exclude Petitioner pursuant to section 1128(b)(4)(B) of the Act;
2. Whether new regulations promulgated on January 29, 1992 are applicable to this case;
3. Whether the indefinite exclusion imposed by the I.G. is required by regulation
or, if not, whether an
indefinite exclusion until Petitioner regains his license to practice medicine
in Missouri is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a physician who was licensed to practice medicine in Missouri. P. Ex. 5. 1/
2. Petitioner resided at 1402 Barger Place, St. Louis, Missouri from about
July of 1984 until about July of
1987. Tr. I/143.
3. Petitioner is also licensed to practice medicine in Illinois, where he has
resided since July 1987. Tr.
I/96, 143.
4. During the period September 1987 through May 1989, Petitioner was attending
law school at
Washington University School of Law in St. Louis, Missouri. Tr. I/96.
5. During the period September 1987 through January 1989, Petitioner worked
part-time as an emergency
room physician at St. Louis Regional Medical Center in St. Louis, Missouri.
Tr. I/138-39.
6. During the period September 1987 through February 1989, Petitioner worked
on a temporary basis at
other hospitals and health care facilities in Missouri as an employee of Healthline,
a firm which supplies
physicians to hospitals on a contract basis. Tr. I/56.
7. To prescribe controlled substances in Missouri, a physician must be licensed
by the State Board of
Healing Arts and registered with the State Bureau of Narcotics and Dangerous
Drugs and with the United
States Drug Enforcement Agency. Tr. I/48-49.
8. To obtain registration with the Missouri Bureau of Narcotics and Dangerous
Drugs, a physician must
provide that agency with a Missouri practicing address. Tr. I/49.
9. Petitioner's registered address on file with the Missouri Bureau of Narcotics
and Dangerous Drugs was
3663 Lindell Boulevard, St. Louis, Missouri, the corporate address of Healthline,
the agency for which
Petitioner worked on an intermittent basis. P. Ex. 5.
10. Beginning in about March 1989, investigators of the Missouri State Board
of Registration in the
Healing Arts and the Missouri State Bureau of Narcotics and Dangerous Drugs
began investigating
Petitioner's prescription of controlled substances for his wife. Tr. I/50, 55.
11. The investigators found that on fourteen occasions between September 1987
and February 1989,
Petitioner had written prescriptions for Schedule II controlled substances for
his wife which either failed to
recite a registered address for Petitioner or recited a false registered address.
I.G. Ex. 5; Tr. I/60.
12. The prescriptions in question listed Petitioner's former residence address,
1402 Barger Place, St. Louis
Missouri, as his registered address.
13. In an interview with investigators, Petitioner acknowledged that he had
used a false Missouri
registered address on the prescriptions, and thus had obtained controlled substances
by fraud, a felony.
I.G. Ex. 5; Tr. I/60-61.
14. On May 9 1989, the Missouri Bureau of Narcotics and Dangerous Drugs terminated
Petitioner's
Missouri Controlled Substances Registration based on Petitioner's failure to
notify that agency of a change
in his professional status and address and for writing prescriptions for controlled
substances which
contained incorrect information. P. Ex. 1.
15. On October 20 1989, the Missouri State Board of Registration for the Healing
Arts (Missouri Board of
Healing Arts) issued an administrative complaint against Petitioner which was
based on the investigation
and on the termination of Petitioner's controlled substances registration by
the Bureau of Narcotics and
Dangerous Drugs. P. Ex. 2.
16. The complaint charged that Petitioner's acts or omissions fell within sections
of Missouri law which
provided for disciplinary actions against physicians who had violated Missouri
drug laws or rules or
regulations, or whose controlled substance authority had been subject to revocation,
suspension, limitation,
or restriction of any kind. P. Ex. 2; Mo. Rev. Stat. 334.100.2(13), (23) (Supp.
1988).
17. On January 8 1990, Petitioner and the Missouri Board of Healing Arts entered
into an agreement to
resolve the administrative complaint against Petitioner concerning his Missouri
license to practice
medicine. I.G. Ex. 2.
18. The agreement recited that Petitioner signed prescriptions for controlled
substances which either did
not recite a registered address for Petitioner, or which recited an address
which was not Petitioner's
registered address, in violation of Missouri law. The agreement also recited
that cause existed for
discipline against Petitioner's license to practice medicine. I.G. Ex. 2.
19. Under the terms of the agreement, Petitioner must wait until January 8,
1992 to apply for reinstatement
of his license to practice medicine in Missouri. I.G. Ex. 2.
20. The conduct which gave rise to the investigation and administrative complaint
does not represent a
mere technical violation by Petitioner.
21. Petitioner surrendered his license to practice medicine while a formal
disciplinary proceeding was
pending before a State licensing authority which concerned Petitioner's professional
competence,
professional performance, or financial integrity, within the meaning of section
1128(b)(4)(B) of the Act.
22. The Secretary of the Department of Health and Human Services (Secretary)
has authority to impose
and direct an exclusion against Petitioner from participating in Medicare and
Medicaid, pursuant to section
1128(b)(4)(B) of the Act.
23. The 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).
24. By letter dated March 22, 1991, the I.G. excluded Petitioner from participating
in Medicare and
directed that he be excluded from participating in Medicaid, pursuant to section
1128 of the Act, effective
20 days from the date of the letter.
25. The I.G. excluded Petitioner from participating in Medicare and directed
that he be excluded from
participating in Medicaid until Petitioner obtained a valid license to practice
medicine in Missouri.
26. Section 1128(b)(4)(B) of the Act does not establish a minimum or maximum term of exclusion.
27. The regulations concerning permissive exclusions pursuant to section 1128(b),
to be codified at 42
C.F.R. 1001, subpart C, promulgated at 57 Fed. Reg. 3298, 3330-42 (January 29,
1992), were not
intended to govern administrative review of I.G. exclusion determinations.
28. The regulations concerning permissive exclusions pursuant to section 1128(b),
to be codified at 42
C.F.R. 1001, subpart C, promulgated at 57 Fed. Reg. 3298, 3330-42 (January 29,
1992), were not
intended to apply retroactively to appeals of I.G. exclusion determinations
that were pending before ALJs
at the time the regulations were promulgated.
29. During the period September 1987 to February 1989, Petitioner's wife suffered
pain due to extensive
dental problems and following a caesarean section. Tr. I/110-112.
30. During the period September 1987 to February 1989, Petitioner treated his
wife's pain by prescribing
controlled substances for her. Tr. I/110.
31. Petitioner did not maintain medical records documenting his physician-patient
relationship with his
wife. Tr. I/59-60.
32. During the period September 1987 to February 1989, Petitioner overprescribed
controlled substances
for his wife. Tr. II/242.
33. Petitioner now recognizes that his wife has a substance abuse problem and
that he enabled her to abuse
drugs by writing the prescriptions at issue in the Missouri proceedings. Tr.
II/227, 233.
34. Under Illinois law, prescriptions for controlled substances must be prepared
on triplicate forms. Tr.
I/114, 150.
35. Petitioner wrote the prescriptions for controlled substances for his wife
in Missouri because he
believed he would be unable to obtain the triplicate forms required by Illinois
law, since Petitioner did not
maintain a practice in Illinois. Tr. I/114.
36. Petitioner used a false registered address on the prescriptions because
he knew that he was prescribing
improperly. Tr. II/230-31.
37. Petitioner has demonstrated a number of instances of poor medical judgment
and dishonesty by
overprescribing controlled substances for his wife and by obtaining those controlled
substances by using a
false registered address on the prescription. This conduct demonstrates that
Petitioner is not a trustworthy
provider of medical care.
38. Petitioner has recognized that he acted improperly and has sought support
from Alanon in dealing with
his wife's substance abuse problem. Tr. II/230, 233.
39. Petitioner has recommended to his wife that she seek treatment for her
substance abuse problem. Tr.
II/229.
40. Petitioner testified that, in the future, he will not prescribe controlled
substances for his wife or any
other family members. Tr. II/233, 245.
41. Petitioner agreed to surrender his license to practice medicine in Missouri
because he no longer resided
in Missouri and no longer wished to practice there. Tr. I/136, II/249.
42. The I.G. has not shown that an exclusion until Petitioner regains his license
to practice medicine in the
State of Missouri is reasonably necessary to satisfy the remedial purpose of
section 1128 of the Act.
43. The remedial purpose of the section 1128 of the Act will be satisfied in
this case by modifying the
exclusion imposed and directed against Petitioner to the shorter of either:
1) a two-year exclusion; or 2) an
exclusion until such time as a State licensing agency reviews all the factual
and legal issues that were
before the State of Missouri when Petitioner surrendered his license, and based
on the result of that review,
either a) grants Petitioner a license, or b) if such a review is undertaken
by the Illinois agency, that agency
takes no significant adverse action against Petitioner's existing license.
ANALYSIS
1. The I.G. had authority to exclude Petitioner pursuant to section 1128(b)(4) of the Act.
The I.G. excluded Petitioner pursuant to section 1128(b)(4)(B) of the Act.
This section provides that the
Secretary of the Department of Health and Human Services has the authority to
exclude an individual or
entity:
who surrendered . . . a license [to provide health care] while a formal disciplinary
proceeding was
pending before . . . [a State licensing] authority and the proceeding concerned
the individual's or entity's
professional competence, professional performance, or financial integrity.
There is no dispute that the Missouri Board of Healing Arts is a "State
licensing authority" within the
meaning of this section. Nor do the parties dispute that a formal disciplinary
proceeding was pending
before the Missouri Board of Healing Arts concerning Petitioner's license to
provide health care. The
parties do not dispute that Petitioner "surrendered" his license to
practice medicine while the formal
disciplinary hearing was pending.
What is disputed is whether the disciplinary proceeding against Petitioner
was a proceeding which
concerned Petitioner's professional competence or performance. 2/ Petitioner
argues that the proceeding
was based entirely on the recision of Petitioner's Missouri controlled substances
registration. This action
was in turn, according to Petitioner, based solely on Petitioner's failure to
maintain a Missouri office or
residential address which he could identify as a registered location, as is
required by Missouri controlled
substance laws and regulations. Thus, according to Petitioner, the Missouri
disciplinary proceeding was an
action based entirely on the "technical" failure of Petitioner to
comply with Missouri law and not on
anything having to do with his professional competence or performance.
I disagree with Petitioner's characterization of the basis of the Missouri
disciplinary proceeding concerning
Petitioner's license to practice medicine in that State. I conclude that the
disciplinary proceeding concerned
Petitioner's professional competence or performance. Therefore, the I.G. had
authority to exclude
Petitioner pursuant to section 1128(b)(4)(B).
The terms "professional competence" and "professional performance"
are not defined in section 1128(b)(4)
of the Act. 3/ The plain meaning of these terms encompasses the ability or willingness
of a provider to
practice a licensed service with reasonable skill and safety consistent with
the requirements of State law
and regulations. Bernardo G. Bilang, M.D., DAB CR141 (1991), aff'd DAB 1295
(1992) (Bilang); see
also Richard L. Pflepsen, D.C., DAB CR132 (1991).
It is apparent from review of the administrative complaint filed against Petitioner
by the Missouri Board of
Healing Arts and the investigative report incorporated by reference in that
complaint that the disciplinary
proceeding against Petitioner related to his ability to practice medicine in
Missouri with reasonable skill
and safety consistent with the requirements of Missouri law. The investigative
report referred to by the
complaint recites that:
Preliminary investigation revealed various technical violations on the part
of . . . [Petitioner] which, if
viewed collectively and from a strict legal point of view, could be construed
as having obtained controlled
substances by fraud and deceit, a felony.
I.G. Ex. 5. The investigators found that Petitioner had written prescriptions
for controlled substances
(including Percodan, Percocet, Valium, Tylox, and Demerol) for his wife over
a period of more than one
year, which either failed to recite Petitioner's registered address, or which
recited a registered address at
which Petitioner neither worked nor resided. Id.
Thus, while the administrative complaint against Petitioner may state as cause
for disciplinary action the
revocation of his Missouri controlled substance registration, the allegations
of misconduct which underlay
both the revocation and the administrative complaint pertained to fraudulent
and deceitful prescription of
controlled substances. Such allegations bear directly on the question of whether
Petitioner performed his
profession with reasonable skill and safety and in compliance with law. Therefore,
the proceeding
concerning Petitioner's license to practice medicine brought against Petitioner
by the Missouri Board of
Healing Arts related to his professional competence or performance.
Petitioner contends that the allegations against Petitioner which the Missouri
Board of Healing Arts
investigated were not the basis of the administrative complaint against Petitioner.
It is apparent from the
investigative report which was referred to in the administrative complaint that
some allegations were made
against Petitioner that were not pursued to the point of being made the basis
for an administrative
complaint. For example, it appears from the investigative report that some allegations
had been made
concerning the quality of services provided by Petitioner. It can also be inferred
from the report that the
investigators at least considered the possibility that Petitioner and/or his
wife had abused controlled
substances and that Petitioner had facilitated such abuse. Such allegations
were not stated as the basis for
disciplinary action by the Missouri Board of Healing Arts. However, the allegations
stated in the
administrative complaint, which I have described above, and which were described
in more detail in the
investigative report, are in and of themselves related to Petitioner's professional
competence or
performance. Therefore, the I.G. had authority to exclude Petitioner, notwithstanding
the fact that other
more serious allegations were not used as a basis for a State disciplinary proceeding
against Petitioner.
Petitioner argues that the surrender of his Missouri license to practice medicine
is "not of a type that the
[Act] was intended to encompass." Petitioner's Brief in Response to the
I.G.'s Motion for Partial Summary
Disposition at 15. Petitioner seems to argue that I should infer from the settlement
agreement between
Petitioner and the Missouri Board of Healing Arts that the disciplinary proceeding
against Petitioner did
not concern his professional competence or performance. Id. I have examined
the settlement agreement. I
find nothing in that document which suggests that Petitioner and the Missouri
Board of Healing Arts
agreed that the disciplinary proceeding did not pertain to Petitioner's professional
competence or
performance. The administrative complaint against Petitioner unambiguously recites
allegations which fall
within the purview of section 1128(b)(4)(B). The parties did not agree that
those allegations were incorrect
or that they were improperly filed. Rather, they agreed to settle the case against
Petitioner. That is
precisely the type of agreement which Congress intended to be covered by section
1128(b)(4)((B).
Petitioner appears to argue that the revocation of his Missouri controlled
substance registration falls within
the scope of conduct which Congress did not intend to be a basis for exclusion
under section
1128(b)(4)(B). Essentially, Petitioner argues that his alleged misconduct is
of such a minor or technical
nature as to be exempted from the exclusion authority conferred by the Act.
I disagree with this argument.
Congress plainly concluded that any State license disciplinary proceeding which
related to a provider's
professional competence or performance could provide the jurisdictional authority
for the Secretary to
impose or direct an exclusion. Congress did not suggest that some behavior relating
to professional
conduct or performance was too insignificant to pass the threshold of authority
to exclude. 4/
Legislative history to section 1128(b)(4) does suggest that the Secretary should
use his discretion to not
exclude those parties disciplined by State professional boards for minor infractions
not related to quality of
care, such as failure to pay licensing fees or violation of strict advertising
requirements. S. Rep. No. 109,
100th Cong., 1st Sess. 1-2, reprinted in 1987 U.S. Code Cong. & Admin. News
682, 688. However, the
Secretary has discretion to impose and direct exclusions where, as here, the
basis for the disciplinary
proceeding against a provider relates to that provider's professional competence
or performance. That
discretion exists regardless of how "minor" the infraction may be
upon which the disciplinary complaint is
based, so long as it relates to the provider's professional competence or performance.
Moreover, it is
apparent that the revocation of Petitioner's controlled substance registration
was not based on any of the
minor grounds alluded to by Congress in the legislative history of the Act.
2. Regulations published on January 29, 1992 do not establish criteria which
govern my decision in this
case.
Having concluded that the I.G. has authority to exclude Petitioner, I must
next consider whether
regulations published by the Secretary on January 29, 1992 establish criteria
to be employed by
administrative law judges to decide the reasonableness of exclusion determinations
made by the I.G.
pursuant to section 1128(b)(4) of the Act. The new regulations contain sections
which govern the I.G.'s
determination of exclusions under section 1128 of the Act. 42 C.F.R. Part 1001,
57 Fed Reg. 3298, 3330-
42 (January 29, 1992). The I.G. contends that these regulations mandate the
indefinite exclusion imposed
and directed by the I.G. He asserts that evidence concerning Petitioner's trustworthiness
is irrelevant under
the new regulations and must be disregarded by me in deciding whether the I.G.'s
exclusion determination
is reasonable.
The I.G. contends that 42 C.F.R 1001.501, 57 Fed. Reg. 3332, establishes criteria
which govern not only
the I.G.'s determination of exclusions imposed pursuant to section 1128(b)(4)
of the Act, but also govern
my review of those exclusions. He asserts that I must affirm the exclusion at
issue here, because it is
coterminous with the license revocation imposed against Petitioner by the State
of Missouri, and because
there exist no factors which would qualify under 42 C.F.R. 1001.501(b) or (c)
to reduce the exclusion to a
term which is less than coterminous with the State license revocation. The I.G.
also argues that the
Secretary intended the new regulations to apply to cases which were pending
at the date of the regulations'
publication. Application of the regulations to this case, according to the I.G.,
is a lawful prospective
application intended by the Secretary.
Petitioner argues that the regulations do not establish criteria which administrative
law judges must use in
deciding as to the reasonableness of exclusions. He contends also that the new
regulations were not
intended to apply retroactively to exclusion determinations made prior to the
regulations' date of
publication.
Section 1001.501 of the new regulations establishes criteria to be employed
by the I.G. (identified in the
regulations as "the OIG") to determine the length of exclusions to
be imposed and directed pursuant to
section 1128(b)(4) of the Act. This regulation requires that, in most cases
involving license suspension or
revocation by State authorities, any exclusion imposed by the I.G. be of a duration
which is at least as long
as the term of the State license revocation or suspension. 42 C.F.R. 1001.501(b)(1)-(3).
The regulation
permits the I.G. to impose an exclusion for less than the duration of a State
suspension or revocation only
in the limited circumstance where a second State authority, being fully apprised
of the action by a State
authority, grants a license to a party or elects not to take significant adverse
action against that party's
license in the second State. 42 C.F.R. 1001.501(c). 5/
a. The Part 1001 regulations do not establish criteria which govern review of
the reasonableness
of exclusions.
If I accept the I.G.'s interpretation of 42 C.F.R. 1001.501, I would sustain
the exclusion imposed against
Petitioner solely because its duration is coterminous with the indefinite duration
of his surrender of his
license to practice medicine in Missouri. I would have no choice but to reject
evidence offered by
Petitioner as to his culpability and his motivation for engaging in the misconduct
which resulted in his
license surrender. 6/ In short, application to this case of 42 C.F.R. 1001.501
would mandate an indefinite
exclusion of Petitioner -- possibly, under the I.G's interpretation, for a period
which is longer than the five-
year minimum period mandated for program-related crimes under section 1128(a)(1)
of the Act -- even if
Petitioner could prove that the indefinite exclusion is not remedially necessary.
The I.G.'s asserted interpretation of the regulation plainly conflicts with
the Departmental Appeals Board's
(the Board) and administrative law judges' decisions as to the meaning of sections
205(b) and 1128(b) of
the Act. If I find that this regulation establishes the criteria by which I
must review the I.G.'s exclusion
determinations under section 1128(b)(4) I would have no choice but to sustain
exclusions which could, in
light of Board decisions interpreting section 1128(b)(4), be considered to be
punitive, and not remedial.
Under the I.G.'s advocated interpretation, the new regulation would strip excluded
parties of review rights
which the Board and administrative law judges have found to be guaranteed by
the Act.
The Board and its administrative law judges long have held that section 1128
is a remedial statute.
Exclusions imposed under section 1128(b) cannot be imposed for other than remedial
reasons. See United
States v. Halper, 490 U.S. 435, 448 (1990) (Halper).
The Halper case decided the question of whether a punitive sanction imposed
under the False Claims Act
in addition to a criminal punishment for the same offense constituted a "second
punishment" which
violated the Double Jeopardy Clause of the United States Constitution. The Supreme
Court's decision
subsumes the broader questions of what constitutes a civil remedy and what constitutes
a punishment. The
Supreme Court observed in Halper that the aims of retribution and deterrence
are not legitimate
nonpunitive government objectives. It concluded that:
a civil sanction that cannot be fairly 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.
490 U.S. at 448.
Civil remedy statutes cannot be applied constitutionally to produce punitive
results in the absence of
traditional constitutional guarantees, such as the right to counsel, the right
to a trial by jury, or the right
against self-incrimination. Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69
(1963). Labelling a
statute as a "civil remedies" statute will not serve to insulate acts
taken pursuant to that statute from
analysis as to whether they are remedial or punitive. Id.
The legitimate remedial purpose for any exclusion imposed pursuant to section
1128(b) of the Act is to
protect federally-funded health care programs and their beneficiaries and recipients
from parties who are
not trustworthy to provide care. Hanlester Network, et al. DAB CR181 at 37-38
(1992) (Hanlester).
Section 205(b) of the Act guarantees parties who are excluded pursuant to section
1128(b), and who
request hearings, full administrative review of the reasonableness of the length
of the exclusions imposed
against them, measured by the remedial criteria implicit in section 1128(b).
Bilang, DAB 1295 at 9; Eric
Kranz, M.D., DAB 1286 at 7-8 (1991) (Kranz); Hanlester at 39-43.
Section 1128(b) does not require the I.G. to impose an exclusion in every case
in which he finds that an
individual has engaged in conduct that would authorize an exclusion. Bilang
at 8; Kranz at 9; Hanlester at
36-37. Whether or not an exclusion should be imposed in a particular case depends
on the facts of that
case in light of the Act's remedial purpose. Moreover, in circumstances where
section 1128(b) authorizes
the I.G. to impose an exclusion and where an exclusion is determined remedially
to be necessary, section
1128(b) does not set a minimum length of exclusion. As with the question of
whether to impose a
permissive exclusion at all, the issue of the length of any exclusion that is
imposed turns on the remedial
basis for the exclusion and the evidence which is unique to each case.
Section 205(b) of the Act guarantees an excluded party the right to a de novo
hearing as to the
reasonableness of the length of an exclusion imposed under section 1128(b).
Bilang at 9; Kranz at 7-8;
Hanlester at 39-43. The de novo hearing granted by section 205(b) contemplates
a full administrative
review of whether an exclusion comports with the Act's remedial purpose. As
the appellate panels
affirmed in Bilang and Kranz, an administrative law judge who conducts a hearing
as to the reasonableness
of an exclusion may consider all evidence which is relevant to the issue of
reasonableness. Kranz at 8; See
Joel Davids, DAB 1283 (1991) at 7; Vincent Baratta, M.D., DAB 1172 at 11 (1990)
(Baratta).
These general considerations have been invoked by the Board's appellate panels
and administrative law
judges to preclude findings that exclusions are per se reasonable where they
are coterminous with State-
imposed license suspensions or revocations. In Bilang, an appellate panel held
that:
The scheme Congress established in section 1128 permits the Secretary to conserve
program resources
by relying where possible on other federal or state court or administrative
findings. However, Congress
did not require imposition of an exclusion [under section 1128(b)(4)] on all
providers who surrendered
their licenses, nor mandate any particular period of exclusion in such circumstances.
This grant of
discretion to the Secretary is inconsistent with the I.G.'s apparent position
that the surrender of a license
creates a presumption of culpability which cannot be rebutted for any purpose.
Bilang at 8. The appellate panel held further that "(i)f Congress had
intended the state action to be
determinative for federal purposes, Congress would not have made the exclusion
permissive, nor have
provided for de novo review." Id. at 9.
If I were to interpret 42 C.F.R. 1001.501 as advocated by the I.G., I would
be establishing a rule that in
most cases an exclusion which is coterminous with a State license revocation
or suspension is per se
reasonable. That would conflict squarely with the appellate panel's decision
in Bilang and with the
rationale for that decision. In Bilang, the appellate panel held that the I.G.
could rely on the decision of a
State licensing authority to revoke or suspend a party, both as proof of authority
to exclude under section
1128(b)(4) and as evidence of the sanctioned party's culpability. The State
authority's decision thus serves
as evidence to support the I.G.'s determination that an exclusion of a particular
length is remedially
necessary. However, the appellate panel found that the State authority's decision
was not conclusive proof
that an exclusion for a given term was justified. Rather, it was evidence from
which reasonableness could
be inferred, but which could be rebutted by an excluded party, at a hearing
before an administrative law
judge. Bilang at 7-9, 12; see also Christino Enriquez, M.D., DAB CR119 (1991).
In Kranz, an appellate panel likened an exclusion imposed pursuant to section
1128(b)(4) to an action
debarring a contractor from receiving federal contracts. Kranz at 9. The appellate
panel affirmed an
administrative law judge's decision that, based on the evidence adduced in that
case, an exclusion which
was coterminous with a State license revocation would be unreasonable. It held:
Like an action debarring a contractor from receiving any federal contracts,
an exclusion is generally to
be a time-related remedy. The absence of a rational relationship between the
indefinite period of exclusion
the I.G. proposed here and the remedial purpose of the Act is all the more apparent
when one considers that
this period might exceed the five-year period mandated for a person convicted
of a program-related crime
under section 1128(a).
Kranz at 9 (emphasis added).
I do not have authority to declare regulations to be ultra vires the Act. 42
C.F.R. 1005.4(c)(1); 57 Fed.
Reg. 3351; See Jack W. Greene, DAB 1078 at 18 (1989), aff'd 731 F. Supp. 835
(Greene) at 18. 7/ If the
new regulations are explicit in their instructions to me, I must apply the plain
meaning of the regulations,
even though they may conflict with the letter of the Act, Congress' intent,
or the Board's interpretations of
the Act. Therefore, I make no findings here as to whether these regulations
are ultra vires the Act.
On the other hand, I am required, where possible, to interpret regulations
so that they are consistent with
the letter and spirit of the Act and the Board's decisions, to the extent that
I do not contravene the
regulations' plain meaning. If it is reasonably possible for me to read these
regulations in a way which
avoids a clash between the regulations and congressional intent, I must do so.
As the appellate panel held
in Greene:
In order to consider the "issues" as stated by the regulation [the
version of 42 C.F.R. 1001.125 which
predates the January 29, 1992 publication] the A.L.J. must apply the underlying
statutory provisions that
the issues were designed to address. The A.L.J. must consider the meaning of
the pertinent statutory
provision as well as related provisions, relevant legislative history, the effective
date of the statute, case law
interpretations, and implementing regulations and policy issuances. It would
literally be impossible to
apply the issue identified by the regulation in a legally correct manner without
considering these factors as
appropriate.
Greene at 17 (emphasis added). Therefore, in interpreting the regulations,
I must read them consistent with
the Act and the Board's decisions interpreting the Act. Furthermore, to the
extent that the regulations are
unclear or ambiguous, I must look to the Act and case law interpreting the Act
as a controlling statement of
intent. Kickapoo Tribe of Oklahoma, DAB CR170 at 14 (1991).
The regulation at issue here plainly would conflict with the letter and intent
of the Act and the Board's
decisions, if applied as is advocated by the I.G. However, the new regulations
do not mandate the
interpretation advocated by the I.G. It is possible to read these regulations
in a manner which is consistent
with the Act and with the Board's interpretations of the Act's purpose and intent.
I conclude that the
regulations contained in Part 1001 (42 C.F.R. 1001.501 in particular) were not
intended by the Secretary
to establish criteria for the review of exclusion determinations at administrative
hearings conducted
pursuant to section 205(b) of the Act. While the regulations establish criteria
to be employed by the I.G. in
making exclusion determinations, they do not establish criteria for administrative
review of the
reasonableness of the I.G.'s determinations. The criteria which must be used
by administrative law judges
to evaluate the reasonableness of exclusions continue to be those criteria established
by the Board's
appellate panels. In so holding, I agree with Administrative Law Judge Steinman's
rationale in Charles J.
Barranco, M.D., DAB CR187 (1992), for finding this regulation to be inapplicable
at the level of the
administrative hearing. 8/
There is not even a suggestion in these regulations that they are intended
to establish criteria for
administrative review of the reasonableness of exclusions. The plain meaning
of the regulations contained
in Part 1001 is to establish criteria for the I.G. to use in making exclusion
determinations. Neither the
regulations nor the interpretive comments to the regulations state that the
criteria for I.G. exclusion
determinations contained in Part 1001 supersede the Board's decisions as to
the meaning of the Act.
The letter of these regulations only establishes criteria to be employed by
the I.G in making exclusion
determinations. Each subpart of Part 1001 refers only to "the OIG."
"OIG" is defined by 42 C.F.R.
1001.2 to mean "Office of Inspector General of the Department of Health
and Human Services." 57 Fed.
Reg. 3330. The comments to Part 1001 of the Regulations provide that "[t]he
basic structure of the
proposed regulations in this part set forth for each type of exclusion the basis
or activity that would justify
the exclusion, and the considerations the OIG would use in determining the period
of exclusion." 57 Fed.
Reg. 3299 (emphasis added).
The Part 1001 regulations are part of a broader enactment which includes regulations
governing hearings
held by administrative law judges to review exclusions imposed pursuant to section
1128 of the Act. These
regulations are found at Part 1005. 42 C.F.R. Part 1005; 57 Fed. Reg. 3350-54.
The Part 1005 regulations
neither state nor suggest that the criteria for determining exclusions in Part
1001 are to be followed by
administrative law judges in deciding as to the reasonableness of exclusions.
9/ The regulations provide
that an administrative law judge shall, based on the evidentiary record of the
hearing, affirm, reverse,
increase, or reduce an exclusion imposed by the I.G. 42 C.F.R. 1005.20(a) and
(b). Neither this
regulation nor the interpretive comments to the regulations provide that the
standard for review to be
employed by administrative law judges in evaluating exclusions shall be that
used by the I.G. to make
exclusion determinations.
I do not infer from these regulations' silence as to the standard of review
to be employed by administrative
law judges in section 1128 cases that the Secretary intended that administrative
law judges be free to invent
a standard to be employed in such cases. As of the date of the regulations'
publication, the Secretary had
adopted a standard of review. That standard is expressed in Bilang, Kranz, and
other Board appellate panel
decisions. They are the Secretary's interpretation of the Act. I infer from
the regulations' silence as to a
standard of review that the Secretary intended that the standard adopted by
the Board not be overruled or
superseded by the new regulations.
In interpreting the Act, the Board serves as the Secretary's delegate and acts
for the Secretary. The Board
appellate panel decisions which I have cited here as establishing criteria for
evaluating the reasonableness
of exclusions all predate the publication date of the new regulations. Had the
Secretary intended to
overrule his prior interpretations of the Act by publishing the new regulations,
he would have explicitly
said so. By not saying so, and by not anywhere stating that the Part 1001 regulations
are intended to
establish criteria to govern administrative reviews of exclusions, the Secretary
made it evident that he did
not intend to overrule his decisions interpreting the Act.
The I.G. contends that "(p)rior to the promulgation of the new regulations,
. . . [administrative law judges]
arguably had some discretion to apply their own interpretations, to the extent
particular issues were not
specifically addressed in the statute, and to substitute their judgment for
that of the Secretary." The
Inspector General's Response to Petitioner's Post-Hearing Reply Brief at 7.
This argument suggests that
administrative law judge and appellate panel decisions which predate the regulations'
publication did not
express the Secretary's judgment as to the Act's meaning. Implicit in this argument
is the contention that
the new regulations constitute the first expression of judgment by the Secretary
as to the meaning and
application of sections 205(b) and 1128 of the Act.
This assertion betrays a misconception of the roles of administrative law judges
and of the Board's
appellate panels. Just as the Secretary has delegated authority to the I.G.
to make exclusion determinations,
he has delegated authority to administrative law judges and the Board's appellate
panels to decide the
reasonableness of exclusion determinations. The authority vested by the Secretary
in the Board includes
the authority to act on behalf of the Secretary in interpreting regulations
and the Act. Greene at 17.
Administrative law judges and the Board's appellate panels do not "substitute
their judgment" for the
Secretary's judgment. Rather, they exercise their delegated authority to speak
for the Secretary. The fact
that the new regulations neither expressly nor impliedly overrule previous administrative
law judge and
appellate panel decisions is significant in that it demonstrates that the Secretary
has opted not to rescind his
interpretations of the Act.
Furthermore, the Secretary's decision not to overrule or supersede Board interpretations
of the Act
establishing the standard for review of section 1128 exclusions stands in contrast
to specific instances
where he has, through the new regulations, explicitly established standards
of review of I.G. determinations
which are binding on administrative law judges and the Board's appellate panels.
For example, the new
regulations containing criteria for determining civil money penalties, assessments,
and exclusions apply to
"the Department" and not just to the I.G. 42 C.F.R. 1003.106, 1003.107.
10/
The Part 1005 regulations contain many sections which would be meaningless
if the standard for
determining exclusions contained in Part 1001 were construed to be a standard
for reviewing the
reasonableness of exclusion determinations. The Part 1001 regulations all but
mandate exclusions of
predetermined length in most cases where exclusions are imposed under section
1128(b). By contrast, the
Part 1005 regulations envision adversary hearings where the review of exclusions
is not rigidly bound by
the criteria and evidence employed by the I.G. to make exclusion determinations.
I am not prepared to
conclude that the new regulations create only hollow rights to administrative
hearings. The criteria
established by the regulations for the conduct of hearings under section 1128
make sense if administrative
law judges adhere to the criteria for evaluating the reasonableness of exclusions
established by the Board in
Bilang and Kranz. The appellate panel decisions in those cases envision hearings
where both the I.G. and
petitioners are afforded a full opportunity to present evidence as to the reasonableness
of exclusions
consistent with the Act's remedial purpose. However, the broad evidentiary standards
and comprehensive
procedural safeguards which the regulations establish for hearings under section
1128 would be pointless if
the criteria for evaluating the reasonableness of exclusions obviated the need
for hearings.
For example, the regulations provide that evidence which may be considered
by an administrative law
judge in reviewing an exclusion determination shall not be limited to that on
which the I.G. relies in his
notice of exclusion. 57 Fed. Reg. 3353 (to be codified at 42 C.F.R. 1005.15(f)(1)).
This section plainly
envisions administrative hearings at which parties are free to offer evidence
which relates to the
reasonableness of exclusions. 11/ However, if the Part 1001 regulations were
construed to establish criteria
for the review of exclusion determinations, there would be few, if any hearings,
where an excluded party
could offer relevant evidence. For example, in a case such as the present case,
if 42 C.F.R. 1001.501
were read to establish review criteria, the I.G.'s entire presentation would
be limited to showing that the
exclusion was coterminous with the State license suspension or revocation. The
petitioner's presentation
would be limited to evidence (assuming any existed) showing that the exclusion
was not coterminous. The
regulation would make irrelevant all evidence as to the petitioner's trustworthiness.
I suspect that, as a
consequence, most "hearings" under section 1128(b)(4) would be decided
on motions for summary
disposition, assuming 42 C.F.R. 1001.501 were to establish the standard for
review. And, equally likely,
most "hearings" under the other subparts of section 1128(b) would
be decided on motions for summary
disposition.
The Part 1005 regulations also establish comprehensive procedural safeguards
for the conduct of adversary
hearings pursuant to section 1128 of the Act, which would become meaningless
if the Part 1001 regulations
were construed to establish standards for review of exclusion determinations.
For example, discovery of
documents is provided for by 42 C.F.R. 1005.3, 1005.7. The regulations mandate
prehearing exchanges
of lists of witnesses, as well as witness statements and exhibits. 42 C.F.R.
1005.8. The regulations
provide a mechanism to subpoena witnesses to testify at hearings. 42 C.F.R.
1005.9. They provide for
on-the-record hearings which may include the testimony of witnesses and the
cross-examination of
witnesses. 42 C.F.R. 1005.15, 1005.16. They contain standards governing the
admission of evidence at
hearings. 42 C.F.R. 1005.17. They provide for recorded and transcribed hearings.
42 C.F.R. 1005.18.
None of these regulations would be needed if, in fact, nearly all section 1128(b)
cases could be decided on
motion for summary disposition. However, as I hold above, that would be the
consequence in most cases if
Part 1001, and 42 C.F.R. 1001.501 in particular, were held to establish criteria
for the administrative
review of exclusions imposed and directed under section 1128(b)(4). 12/
As Judge Steinman observed in Barranco, the new regulations codify the I.G.'s
own internal policy which
he has up to now employed to govern his exclusion determinations. There has
never been a particular
nexus between the criteria employed by the I.G. to make exclusion determinations
and criteria employed
by administrative law judges or the Board's appellate panels to evaluate the
reasonableness of such
determinations. For example, the I.G.'s agents have testified routinely in cases
involving section
1128(b)(4) exclusions that the I.G.'s policy is to make exclusions coterminous
with license suspensions or
revocations imposed by State licensing authorities. However, the Board's appellate
panels and
administrative law judges have held that the purpose of the administrative hearing
is to objectively
adjudicate the reasonableness of the I.G.'s exclusion determinations pursuant
to the remedial criteria
contained in the Act and not to second-guess the I.G. or his agents. Kranz at
7. 13/ The I.G.'s internal
policies and his adherence to them have not been standards by which the reasonableness
of exclusions has
been adjudicated. 14/
The new regulations therefore can be read to make explicit a previously inchoate
policy governing the
I.G.'s internal operations. However, neither administrative law judges nor the
Board's appellate panels
have ever concluded that it was the Secretary's intent to direct them to apply
the law in a manner consistent
with that policy. The fact that these regulations codify policy which is applicable
to the I.G. cannot be read
as a directive to administrative law judges and the Board in the absence of
any expression of intent by the
Secretary to make that policy applicable at the level of the administrative
hearing.
b. The Part 1001 regulations do not apply retroactively to pending cases.
If, in fact, the new regulations do establish criteria to be employed at the
level of administrative hearings
for evaluation of the reasonableness of exclusions imposed under section 1128
of the Act, they are not
applicable to cases which were pending as of the date of their publication.
To apply these regulations to
such cases as is advocated by the I.G. would strip excluded parties of previously
vested rights and operate
to create manifest injustice. Such an application would be an unlawful retroactive
application of the new
regulations which was not intended by the Secretary. Barranco at 23-24; see
also Hanlester at 43-48.
The rationale which I gave in Hanlester for concluding that 42 C.F.R. 1005.4(c)(5)
and (6) were not
applicable there applies equally to the question of whether 42 C.F.R. 1001.501
is applicable here.
Procedurally, this case is in the same posture as was Hanlester as of the date
of the regulations' publication.
In both this case and Hanlester, the exclusion determination and the hearing
predated the regulations'
publication date. 15/ The only procedural difference between Hanlester and this
case is that, in Hanlester,
the exclusions determined by the I.G. pursuant to section 1128(b)(7) of the
Act did not become effective
until my decision. By contrast, the exclusion which the I.G. imposed against
Petitioner in this case became
effective shortly after transmittal by the I.G. to Petitioner of the notice
of exclusion. That is not a
meaningful procedural difference, however. As I held in Hanlester, the "decision
of the Secretary" which
comprises the basis for a petitioner's hearing rights under sections 205(b)
and 1128 of the Act is the I.G.'s
exclusion determination. Hanlester at 48.
Both Hanlester and the present case involve the question of whether regulations
which, as interpreted by
the I.G., profoundly alter parties' substantive rights, govern administrative
review of exclusion
determinations which were made at a date prior to the date of the regulations'
publication. At issue in
Hanlester were regulations which limit an administrative law judge's authority
to reduce an exclusion or to
review exercises of discretion by the I.G. 42 C.F.R. 1005.4(c)(5), (c)(6). At
issue here are regulations
which the I.G. contends establish substantive criteria for review of the reasonableness
of the I.G.'s
exclusion determinations. I held in Hanlester that the regulations at issue
there affected excluded parties'
substantive rights to a full review of their exclusions under sections 1128(b)
and 205(b) of the Act. That is
equally true here, assuming the I.G.'s interpretation of 42 C.F.R. 1001.501
is correct.
Essentially, the I.G. is contending here, as he did in Hanlester, that the
new Part 1001 regulations merely
codify law previously in effect. Thus, according to the I.G., the new regulations
do not serve to strip
parties of previously vested substantive rights, inasmuch as those asserted
rights had never inured to
excluded parties in the first place. I do not agree with the I.G.'s contention
concerning the Part 1001
regulations in general, and 42 C.F.R. 1001.501 in particular, for the same reason
that I disagreed in
Hanlester with the I.G.'s assertion that 42 C.F.R. 1005.4(c)(5) and (c)(6) merely
codified preexisting law.
As I held in Hanlester, sections 1128(b) and 205(b) of the Act confer on excluded
parties the right to a full
administrative review of the reasonableness of their exclusions. Hanlester at
35-43. Regulations which, if
applicable at the level of the administrative hearing, restrict those rights
conferred by the Act constitute
substantive and not merely procedural changes.
Both Hanlester and the present case involve the question of whether regulations
which, as interpreted by
the I.G., profoundly alter parties' substantive rights, govern administrative
review of exclusion
determinations which were made at a date prior to the date of the regulations'
publication. At issue in
Hanlester were regulations which limit an administrative law judge's authority
to reduce an exclusion or to
review exercises of discretion by the I.G. 42 C.F.R. 1005.4(c)(5), (c)(6). At
issue here are regulations
which the I.G. contends establish substantive criteria for review of the reasonableness
of the I.G.'s
exclusion determinations. As I hold above, 42 C.F.R. 1001.501 would dramatically
affect parties' rights
to a full review of exclusions imposed pursuant to section 1128(b)(4) if applied
to govern administrative
review of such exclusions. Thus, this regulation would constitute a substantive
change in parties' rights if
given the effect urged by the I.G.
As a general matter, administrative rules should not be applied retroactively
unless their language
specifically requires retroactive application. Bowen v. Georgetown University
Hospital et al., 488 U.S.
204, 208 (1988); United States v. Murphy, 937 F. 2d 1032 (6th Cir. 1991). 16/
Application of a regulation
to strip a party of a previously vested right would be an unlawful retroactive
application of the regulation.
United States v. Murphy; see also Griffon v. United States Department of Health
and Human Services, 802
F. 2d 146 (5th Cir. 1986). Absent a specific instruction to me by the Secretary,
I would not infer that he
had intended that regulations be applied retroactively to strip parties of previously
vested rights.
The I.G. attempts to distinguish this case from Bowen v. Georgetown University
Hospital by asserting that,
in Bowen, the regulations at issue were promulgated with the specific purpose
that they apply retroactively,
whereas, in this case, the Part 1001 regulations are intended to apply prospectively.
Obviously, that
contention stands or falls on the I.G.'s characterization of his asserted application
of the Part 1001
regulations as "prospective." The accuracy of that characterization
in turn depends on whether the new
regulations strip parties of previously vested rights. Inasmuch as they would
do precisely that, assuming
the I.G.'s assertion that the regulations govern administrative review of exclusions
to be correct, they
cannot legitimately be characterized as "prospective." As I hold above,
these regulations do not codify
preexisting law, they profoundly alter it, assuming that they govern administrative
reviews of exclusion
determinations.
Application of 42 C.F.R. 1001.501 in this case to strip Petitioner of his previously
vested right to a full
review of the reasonableness the I.G.'s exclusion determination would contravene
the standards announced
in Bowen v. Georgetown University Hospital and United States v. Murphy. There
is nothing in the
regulations which can be interpreted as a directive to apply them in a way which
would produce such a
consequence. Therefore, I conclude that to apply 42 C.F.R. 1001.501 here as
is advocated by the I.G.
would constitute an unlawful retroactive application of the regulation. Barranco
at 23-24.
3. An indefinite exclusion until Petitioner obtains a valid license to practice
medicine in Missouri is not
reasonable under the circumstances of this case.
I conclude that the I.G. has failed to show a meaningful remedial basis for
an indefinite exclusion until
Petitioner regains a valid license to practice medicine in Missouri. Petitioner
is currently licensed to
practice medicine in Illinois. 17/ Petitioner testified that he relinquished
his Missouri license because he
concluded that he no longer needed it and he has expressed no intent to apply
for reinstatement nor to
resume practice in Missouri. In light of Petitioner's intention not to resume
the practice of medicine in
Missouri, there is no rational basis to condition reinstatement on his obtaining
a Missouri license. The
terms of the exclusion imposed by the I.G. would require Petitioner, as a condition
for reinstatement, to
engage in acts which are wholly unrelated to his practice of medicine. For this
reason, an exclusion until
Petitioner obtains a valid license to practice Medicine in Missouri could amount
to a permanent exclusion.
In order for a permanent exclusion to be reasonable, the evidence would have
to demonstrate that there is
little or no possibility that Petitioner would ever become trustworthy. See
Bilang, DAB CR141 at 11 n.6
(1991). The I.G. has presented no such evidence.
On the other hand, an exclusion plainly is warranted by the evidence. Section
1128(b)(4)(B) authorizes the
exclusion of providers who surrender their health care licenses during the pendency
of disciplinary
proceedings before State licensing authorities. The legislative history of section
1128(b)(4)(B) suggests
congressional recognition of the probability that providers who resign their
licenses in the face of
disciplinary charges ordinarily do so to avoid the stigma of an adverse finding.
See S. Rep. No 109, 100th
Cong., 1st Sess. 3, reprinted in 1987 U.S. Code Cong. & Admin. News 682,
688. This amounts to a
legislative finding that an inference of untrustworthiness ought to attach to
providers who surrender their
licenses in such circumstances.
As I concluded in part 1 of this decision, Petitioner surrendered his Missouri
medical license while a
disciplinary proceeding was pending before Missouri licensing authorities. As
part of the settlement
agreement pursuant to which Petitioner surrendered his license, he admitted
that he had written
prescriptions for controlled substances which contained false or misleading
information. Therefore, the
circumstances under which Petitioner surrendered his license, without more,
justify an inference that
Petitioner has engaged in conduct which indicates untrustworthiness.
There is additional evidence in this case which justifies an exclusion. In
the course of his hearing before
me, Petitioner admitted that he had enabled his wife to abuse controlled substances
by prescribing amounts
of the substances beyond his wife's legitimate medical needs. Petitioner enabled
his wife to abuse
controlled substances by prescribing them at more frequent intervals than was
medically necessary. He
continued to engage in this behavior over a period of at least a year and a
half. At some level, Petitioner
was aware at the time he wrote the prescriptions that he was doing something
wrong. However, due to his
personal relationship with his wife and his desire to save his marriage, he
rationalized his conduct.
Petitioner allowed his medical judgment to be clouded by his personal relationship
with his wife.
Petitioner's lapses of judgment, first in entering into a doctor-patient relationship
with his wife, and second
in enabling her to abuse controlled substances, indicate a lack of trustworthiness.
Moreover, to facilitate his wife's drug abuse, Petitioner wrote prescriptions
in Missouri listing an address at
which he neither practiced nor resided. Petitioner admitted to investigators
that this conduct amounted to
obtaining controlled substances by fraud, a felony. This conduct demonstrates
that Petitioner was willing
to resort to dishonesty to obtain controlled substances for his wife. Such dishonesty
also indicates a lack of
trustworthiness.
Petitioner effectively abetted his wife's abuse of controlled substances. This
lapse of judgment by
Petitioner could have endangered his wife's health. It demonstrates that Petitioner
lacks the capacity to
distinguish between what he construes as his obligations to his close family
and his duties as a physician.
Petitioner's conduct shows a propensity to engage in acts or practices which
could endanger the health or
safety of program beneficiaries or recipients and also demonstrates a dishonest
effort to conceal such acts
or practices. Based on this evidence, I find Petitioner to be an untrustworthy
provider of care.
However, Petitioner's conduct since he surrendered his license, and his testimony
before me, convince me
that he understands the wrongfulness of his conduct and has taken steps to ensure
that such conduct will
not be repeated in the future. Petitioner has now, perhaps somewhat belatedly,
come to the realization that
his wife has a substance abuse problem. He has encouraged her to seek treatment.
He has informed her
that he will not again prescribe controlled substances for her, nor treat her
for any other medical condition.
He himself has sought support through Alanon, a program for family members of
persons with substance
abuse problems.
Petitioner now recognizes that it is inappropriate for him to treat members
of his family. He states credibly
that he will not do so again. From the evidence before me, it appears that Petitioner's
lapses in medical
judgment and acts of dishonesty arose out of his inappropriate physician-patient
relationship with his wife.
There is no evidence before me that would establish that Petitioner has engaged
in untrustworthy behavior
in his treatment of patients other than his wife. 18/ For these reasons, I conclude
that it is unlikely that
Petitioner will again prescribe controlled substances for his wife or engage
in other dishonest conduct in
prescribing controlled substances.
Based on the seriousness of the actions to which Petitioner has admitted, I
conclude that an exclusion is
warranted. However, I conclude that an indefinite exclusion is not necessary
to serve the remedial
purposes of section 1128. Based on Petitioner's recognition of his improper
conduct and his credible
testimony that he will not repeat such conduct in the future, I conclude that
an exclusion of two years will
be adequate for Petitioner to demonstrate his trustworthiness to provide services
to beneficiaries and
recipients of the Medicare and Medicaid programs. 19/ Alternatively, Petitioner's
exclusion could be for
less than two years if a State licensing agency reviews all of the factual and
legal issues which were before
the State of Missouri when Petitioner surrendered his license and, based on
the result of that review, either:
1) grants Petitioner a license; or 2) in the case of the Illinois State licensing
agency, takes no significant
adverse action against Petitioner's license. At the end of two years, or when
a State licensing agency takes
the actions described above, whichever is sooner, Petitioner will be eligible
to apply for readmission to the
programs.
The exclusion, as modified by my decision, will provide Petitioner with a reasonable
period of time within
which to reaffirm his trustworthiness as a program provider. Because Petitioner
has indicated no interest in
returning to Missouri to practice medicine, it would be unreasonable to insist
that Petitioner and the State
of Missouri expend their resources to reinstate Petitioner's Missouri license
simply to enable Petitioner to
treat Medicare and Medicaid beneficiaries in another State. See Barranco at
36. On the present facts, the
State of Missouri has no further interest in Petitioner--he does not practice
there and does not treat Missouri
citizens. Id. at 38. It bears no relationship to Petitioner's trustworthiness
to impose an indefinite exclusion
based on relicensure in Missouri. Therefore, in the absence of a thorough review
of the circumstances of
Petitioner's surrender of his Missouri license by another State licensing agency,
Petitioner would be
excluded for two years. Alternatively, the exclusion could be shorter if such
a review is undertaken by a
State which has an interest in whether Petitioner is licensed to treat its citizens
and in which Petitioner has
an interest in proving his competence and integrity to practice.
CONCLUSION
Based on the law and the evidence, I conclude that an indefinite exclusion
until Petitioner obtains a valid
license to practice medicine in Missouri is extreme and excessive. I therefore
modify the period of
exclusion imposed and directed by the I.G. to the earlier of: 1) a two year
exclusion; or 2) an exclusion
until such time as a State licensing agency reviews all of the factual and legal
issues that were before the
State of Missouri when Petitioner surrendered his license and, based on the
result of that review either a)
grants Petitioner a license, or b) if the review is by the Illinois licensing
agency, takes no significant
adverse action against Petitioner's existing license.
_________________________
Steven T. Kessel
Administrative Law Judge
1. Citations to the record in this case are noted as follows:
Petitioner's Exhibit P. Ex. (number)
I.G. Exhibit I.G. Ex. (number)
Transcript Volume I Tr. I/(page)
Transcript Volume II Tr. II/(page)
2. The I.G. does not assert that the disciplinary proceeding concerned Petitioner's financial integrity.
3. Section 1128(b)(4) has two subparts. Subpart (A) applies to circumstances
where a party's license to
provide health care is revoked or suspended by a State licensing authority,
or where such license is
otherwise lost. Subpart (B) applies to circumstances where a party surrenders
a license to provide health
care while a formal disciplinary hearing is pending. Both subparts require that
the disciplinary action
concerning the party's license to provide health care concern the party's professional
competence,
professional performance, or financial integrity. Social Security Act, section
1128(b)(4)(A),(B).
4. On the other hand, it is appropriate to evaluate the scope and effect of
provider misconduct in order to
assess the reasonableness of the length of any exclusion. The fact that the
Secretary may have authority to
impose and direct an exclusion under section 1128(b)(4) does not by itself suggest
that an exclusion of any
particular length is reasonable. Bilang, DAB 1295 at 8; Eric Kranz, M.D., DAB
1286 at 11 (1991).
5. This section does not appear to permit the I.G. to impose an exclusion which
is less than coterminous
with a State license revocation or suspension in the circumstance where a State
authority reviews all of the
circumstances of a case and decides not to revoke or suspend a license and another
State authority
subsequently decides to revoke or suspend the party's license to provide health
care in that State based on
identical evidence.
6. Indeed, in future cases under section 1128(b)(4), assuming that 42 C.F.R.
1001.501 establishes
criteria for reviewing the I.G.'s exclusion determinations, I would be required
to reject as irrelevant
evidence offered by a petitioner concerning his or her trustworthiness, unless
the I.G. determined that
"aggravating" factors existed justifying imposition of an exclusion
of longer duration than the State license
suspension or revocation on which the exclusion was premised. Thus, notwithstanding
the I.G.'s
contention that I would continue to have authority to conduct de novo review
of exclusions'
reasonableness, there would be nothing for me to review in many cases, assuming
I accepted the I.G.'s
interpretation of the new regulations. See The Inspector General's Response
to Petitioner's Post-Hearing
Reply Brief at 6 - 7.
7. I also do not have the authority to overrule decisions by the Board's appellate panels.
8. In Barranco, Judge Steinman first considered whether application of the
criteria in 42 C.F.R.
1001.501 as a standard for review of the reasonableness of an exclusion would
be an unlawful retroactive
application in that case. He concluded that such an application would be unlawful
and that it was not
intended by the Secretary. He then considered, as an alternative basis for his
decision, whether the
Secretary had intended 42 C.F.R. 1001.501 to establish criteria for evaluating
the reasonableness of
exclusions imposed under section 1128(b)(4) of the Act, at the level of the
administrative hearing. He
concluded that the Secretary did not intend the regulation to be applicable
to the administrative review. I
agree with Judge Steinman's analysis. However, here I conclude, as a first point
of analysis, that the
Secretary did not intend the regulation to establish criteria for administrative
review of a section 1128(b)(4)
exclusion. My rationale for considering this issue first is that if the Secretary
did not intend the regulation
to govern administrative hearings, there would be no issue as to its retroactive
application at the hearing
level. My conclusions as to retroactivity are thus alternative findings.
9. The I.G. seems to argue that this directive is implicit in 42 C.F.R. 1005.4(c)(5),
which forbids
administrative law judges from reviewing the I.G.'s exercise of discretion to
exclude a party under section
1128(b) of the Act or to determine the scope or effect of the exclusion. This
regulation does not define the
term "exercise of discretion." However, it plainly does not vest authority
in the I.G. to interpret and apply
regulations as "exercises of discretion" which are immune from review
by administrative law judges and
the Board's appellate panels.
10. Arguably, civil money penalty (CMP) hearings under section 1128A of the
Act are different from
exclusion hearings under section 1128(b), in that in CMP hearings the I.G.'s
penalty, assessment, and
exclusion determinations do not become effective until reviewed and sustained
or modified by an
administrative law judge. However, hearings in both CMP and exclusion cases
derive from I.G.
determinations, and, in both types of cases, the hearings are de novo reviews
of those determinations.
11. The evidence which I admitted in this case concerning Petitioner's trustworthiness
would not be
relevant to the length of the exclusion under any of the criteria contained
in 42 C.F.R. 1001.501.
12. Although the other regulations contained in Part 1001 are not at issue
here, it is evident from a
reading of these regulations that they would also eliminate the need for hearings
in most cases as to the
reasonableness of exclusions imposed under section 1128(b) of the Act, were
they found to establish
criteria for administrative review of the reasonableness of exclusions. See
Aloysius Murcko, D.M.D.,
DAB CR189 at 11 (1992).
13. In decisions issued prior to publication of the new regulations, administrative
law judges frequently
made note of exclusion criteria contained in regulations which have now been
superseded. See 42 C.F.R.
1001.125 (1989). These regulations were always considered to be relevant, albeit
nonbinding, guidelines
as to some of the criteria used to judge the reasonableness of exclusions. However,
neither administrative
law judges nor the Board's appellate panels ever found these regulations to
establish binding standards for
administrative review of exclusions.
14. In Hanlester, I noted that the I.G. frequently called his agents to testify
at exclusion hearings as to
whether they had followed the I.G.'s criteria for making exclusion determinations.
I observed there that I
often had counseled parties to exclusion cases that this evidence is irrelevant
because it has nothing to do
with the issue of whether the exclusion, as measured against the evidence and
the Act's remedial purpose,
is reasonable. Hanlester at 41 n.31.
15. The I.G. contended in Hanlester that the Part 1001 regulations did not
govern the administrative
review in that case, whereas he asserts that they do apply here. He offers no
explanation as to why
application of those regulations in Hanlester would have been an unlawful retroactive
application there,
whereas application of the same regulations in this case allegedly would be
a lawful prospective
application of the regulations.
16. Administrative Law Judge Steinman's decision in Barranco provides a thorough
analysis of the
Supreme Court's decision in Bowen v. Georgetown University Hospital and related
cases. Barranco at 22.
17. The Illinois licensing authorities have apparently initiated an investigation
of the circumstances
under which Petitioner surrendered his license to practice medicine in Missouri.
Tr. II/226, 249, 252.
18. The investigative report contains some hearsay statements that could call
into question Petitioner's
general competence as a physician. However, the Missouri authorities did not
pursue disciplinary action
against Petitioner based on these allegations, and the I.G. does not contend
here that Petitioner should be
excluded based on these allegations.
19. A two-year exclusion will make Petitioner eligible for reinstatement at
about the same time that he
would be eligible to apply to Missouri for reinstatement of his physician's
license.