Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Chander Kachoria, R. Ph., Petitioner,
- v. -
The Inspector General.
DATE: August 7, 1992
Docket No. C-92-032
Decision No. CR220
DECISION
In this case, governed by section 1128(b)(1) of the Social Security Act (Act),
the Inspector General (I.G.)
of the United States Department of Health and Human Services (DHHS) notified
Petitioner, by letter dated
November 4, 1991, that he was being excluded from participating in the Medicare
and any State health
care program, as defined in section 1128(h) of the Act, for a period of three
years. 1/ The I.G. informed
Petitioner that his exclusion resulted from his conviction of a criminal offense
relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct,
in connection with the
delivery of a health care item or service, within the meaning of section 1128(b)(1)
of the Act.
Petitioner timely requested a hearing before an Administrative Law Judge (ALJ),
and the case was assigned
to me for a hearing and decision. The I.G. moved for partial summary disposition
on the issue of authority
to exclude, and Petitioner opposed the motion. I reserved ruling on the I.G.'s
motion prior to the hearing. I
conducted a hearing in Cleveland, Ohio, on March 3 and 4, 1992.
I have considered the evidence adduced at the hearing, the posthearing briefs
and proposed findings and
conclusions of the parties, and the applicable law. I conclude that the I.G.
had authority to exclude
Petitioner, and that the three year exclusion imposed and directed by the I.G.
is appropriate and reasonable
under the circumstances.
APPLICABLE STATUTE
Section 1128 of the Act is codified at 42 U.S.C. 1320a-7. Section 1128(b)(1)
of the Act permits the I.G.
to exclude from Medicare, Medicaid, and related health care programs:
. . . Any individual or entity that has been convicted, under Federal or State
law, in connection
with the delivery of a health care item or service or with respect to any act
or omission in a program
operated by or financed in whole or in part by any Federal, State, or local
government agency, of a
criminal offense relating to fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial
misconduct.
ISSUES
1. Whether new regulations promulgated and effective on January 29, 1992, are applicable to this case;
2. Whether the I.G. had authority to exclude Petitioner pursuant to section 1128(b)(1) of the Act;
3. Whether a three year exclusion is reasonable under the circumstances of this case.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Having considered the entire record, the arguments, and the submissions of
the parties, and being advised
fully, I make the following Findings of Fact and Conclusions of Law (FFCLs):
2/
1. At all times relevant, Petitioner was a pharmacist licensed by the State
of Ohio and the owner of
Lakewood Pharmacy in Lakewood, Ohio. I.G. Ex. 7/4; Tr. I/201, 203. 3/
2. In September, 1988, Petitioner was indicted by the Grand Jury of the State
of Ohio, within and for the
County of Cuyahoga, on one count of theft and one count of filing a false insurance
claim. I.G. Exs. 2/3-4;
4/36-37.
3. The theft count of the indictment charged that, between May 5, 1988 and
July 6, 1988, Petitioner
knowingly and by deception obtained or exerted control over money with the purpose
to deprive the
owner, Blue Cross-Blue Shield of Ohio (BCBSO), of said property or services,
in violation of Ohio Rev.
Code 2913.02. The indictment recited that the value of the property or services
was $300 or more, but
less than $5000. I.G. Exs. 2/4; 4/37.
4. The other count of the indictment charged that between May 5, 1988 and July
6, 1988, Petitioner
knowingly made or presented, or caused to be made or presented, to a health
care insurer a claim for
payment of a health care benefit for goods or services which Petitioner knew
were not received, in
violation of Ohio Rev. Code 3999.22(A)(1). I.G. Exs. 2/3; 4/36.
5. The evidence which the Cuyahoga County Prosecuting Attorney (prosecutor)
presented to the grand
jury to obtain Petitioner's indictments consisted of reports of field investigations
conducted by BCBSO and
the report of an audit of Lakewood Pharmacy conducted for BCBSO by Heritage
Information Systems,
Inc. Tr. I/25; I.G. Ex. 4.
6. As part of BCBSO's investigation, Richard Rob, Manager of Financial Investigations
for BCBSO, and
several of his employees, conducted undercover shopping at Petitioner's pharmacy,
using assumed names
and subscriber cards issued to a fictitious group. Tr. I/43-44.
7. During the course of their undercover shopping, which occurred between May
5, 1988 and July 6, 1988,
BCBSO investigators presented 47 prescriptions which were filled by Petitioner.
I.G. Exs. 4/4; 13/1.
8. BCBSO concluded that Petitioner dispensed a generic substitute for 33 of
the 47 prescriptions, while
billing BCBSO for the more expensive brand name drug. I.G. Exs. 4/4; 13/1.
9. BCBSO concluded that, as to 5 of the 47 prescriptions, Petitioner dispensed
a smaller quantity than that
prescribed, but billed BCBSO for the full quantity prescribed. I.G. Exs. 4/4;
13/1.
10. At the request of BCBSO investigator Rob, on or about October 5, 1988,
Petitioner signed a statement
in which he acknowledged that, as to some of the undercover prescriptions, he
had substituted generic
drugs, but had billed BCBSO for brand name drugs. Tr. I/57-59; I.G. Ex. 4/33-35.
11. The total value of the undercover prescriptions which were improperly billed
to BCBSO was more
than $300, although the value of each individual prescription was less than
$300. Tr. I/26.
12. On March 22, 1989, Petitioner appeared in the Cuyahoga County Court of
Common Pleas (court) and
pled guilty to the theft count of the indictment. I.G. Ex. 2/2.
13. Petitioner's plea was accepted by the court. I.G. Exs. 2/2; 14/9.
14. The prosecutor recommended nullification of the count of the indictment
charging Petitioner with
submitting false insurance claims and the court nullified that count. I.G. Exs.
2/2; 14/4, 9.
15. Petitioner was convicted of a criminal offense. Act, section 1128(i).
16. Petitioner was convicted of an offense related to fraud, theft, embezzlement,
breach of fiduciary
responsibility, or other financial misconduct, in connection with the delivery
of a health care item or
service. Act, section 1128(b)(1).
17. The Secretary of DHHS delegated to the I.G. the authority to determine,
impose, and direct exclusions
pursuant to section 1128 of the Act. 48 Fed. Reg. 21661 (May 13, 1983).
18. The I.G. had authority to exclude Petitioner from participation in the
Medicare and Medicaid programs
pursuant to section 1128(b)(1) of the Act. FFCLs 15-17.
19. The permissive exclusion provisions of section 1128(b)(1)-(4) of the Act
do not establish minimum or
maximum periods of exclusion.
20. The regulations concerning permissive exclusions pursuant to section 1128(b)
of the Act, promulgated
and effective January 29, 1992, 57 Fed. Reg. 3298, 3330-42 (to be codified at
42 C.F.R. 1001, subpart C),
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.
21. The regulations concerning permissive exclusions pursuant to section 1128(b)
of the Act, promulgated
at 57 Fed. Reg. 3330-42 (to be codified at 42 C.F.R. 1001, subpart C), were
not intended to govern ALJ
review of I.G. exclusion determinations.
22. The major purposes of section 1128 of the Act are: (1) to protect Medicare
beneficiaries and Medicaid
recipients from incompetent practitioners and inappropriate or inadequate care;
(2) to protect the Medicare
and Medicaid programs from fraud and abuse; and (3) to deter individuals from
engaging in conduct which
is detrimental to the Medicare and Medicaid programs and to the respective beneficiaries
and recipients of
those programs.
23. A determination that an exclusion is reasonable turns on the question of a Petitioner's trustworthiness.
24. Evidence bearing on Petitioner's trustworthiness may include the nature
and seriousness of Petitioner's
offense, the circumstances surrounding the offense, and how far the Petitioner
has come toward
rehabilitation.
25. On April 26, 1989, Petitioner was sentenced to serve one and one-half years
in a correctional center
and to pay court costs. The sentence was suspended on condition that Petitioner
serve 30 days in the
county jail, remain on probation for three years, perform 220 hours of community
service, and pay a fine
of $2500 and court costs. I.G. Exs. 2/1; 12/11.
26. The sentence imposed on Petitioner was the maximum sentence for the crime
of which he was
convicted. Tr. I/33.
27. It is evidence of the seriousness of Petitioner's crime that the judge
in Petitioner's criminal case
imposed the maximum sentence.
28. It is evidence of Petitioner's untrustworthiness that his conviction was
based on a pattern of criminal
offenses lasting, at a minimum, for several months.
29. In his testimony before me, Petitioner denied that he intentionally dispensed
generic drugs to
customers while billing BCBSO for brand name drugs. Petitioner asserted that
the misbillings were the
result of computer errors, or that members of his staff had made mistakes. Tr.
II/270-71.
30. Petitioner testified that he sometimes dispensed smaller quantities than
prescribed in cases where he
had insufficient quantities of a drug in stock. In such cases, he testified
that he informed customers of the
discrepancy and offered to deliver the remainder of the prescription to the
customer's home or to provide
the remainder on the customer's next visit. Tr. I/205-07.
31. BCBSO investigator Rob testified that Petitioner was the pharmacist on
duty when the undercover
purchases were made. Tr. I/53-54.
32. BCBSO investigative reports of the undercover shopping at Petitioner's
pharmacy indicate that
Petitioner did not inform investigators on the occasions when he had dispensed
lesser quantities of drugs
than that prescribed. I.G. Ex. 13/5-6, 33, 47, 74-76, 86-87, 88-89, 113-115.
33. Petitioner's testimony, attempting to explain how BCBSO investigators could
have obtained brand
name drugs labeled as generics and prescriptions filled with a lesser quantity
of the prescribed drugs, is not
credible.
34. It is an indication of Petitioner's untrustworthiness that he has failed
to acknowledge his wrongdoing or
take responsibility for his actions.
35. In an order dated January 13, 1992, the Ohio Board of Pharmacy concluded
that Petitioner had
committed acts of dishonesty and unprofessional conduct in the practice of pharmacy.
The Board of
Pharmacy suspended Petitioner's license to practice pharmacy for one year, fined
him $2500, and fined
Lakewood Pharmacy $5000. The Board set aside 10 months of Petitioner's license
suspension. I.G. Ex. 7.
36. It is evidence of Petitioner's untrustworthiness that the Board found that
he had committed acts of
dishonesty in the practice of pharmacy.
37. Petitioner's misconduct establishes that he is an individual who is not
trustworthy to deal with program
funds or with beneficiaries and recipients.
38. It is evidence of Petitioner's rehabilitation that: (1) he promptly complied
with the terms of his
probation, including paying restitution to BCBSO (Tr. II/251, 254); (2) he successfully
completed a
jurisprudence examination required by the Ohio State Board of Pharmacy (Tr.
II/262); and (3) BCBSO
monitored Petitioner's billing practices since his conviction and noted no further
discrepancies (Tr. I/66).
39. The evidence of Petitioner's rehabilitation is not strong enough to overcome
the need for an exclusion
based on the evidence of Petitioner's untrustworthiness.
40. The remedial purposes of section 1128 of the Act will be served in this
case by a three year period of
exclusion.
41. I do not have authority in this case to entertain constitutional challenges to Petitioner's exclusion.
DISCUSSION
1. Regulations published on January 29, 1992, do not establish criteria which
govern my decision in this
case.
On January 29, 1992, new federal regulations applicable to exclusion cases
were published at 57 Fed. Reg.
3298 et seq. (new regulations). The I.G. has argued that, because the new regulations
were effective on
publication, they are now binding in this proceeding. In particular, the I.G.
relies on the regulation found
at 57 Fed. Reg. 3331 (to be codified at 42 C.F.R. 1001.201), which establishes
a "benchmark" exclusion
of three years for individuals who have been convicted of a crime related to
health care fraud. It is the
I.G.'s position that the new regulations require me to uphold the three year
exclusion imposed on Petitioner
in this case.
The I.G.'s position is without merit in light of the decision in Behrooz Bassim,
M.D., DAB 1333 (1992). In
that case, an appellate panel of the DAB held that, as interpreted by the I.G.,
the new regulations effected a
substantive change in the right of a petitioner to a de novo hearing to challenge
his exclusion pursuant to
section 1128(b)(4) of the Act. For that reason, the panel held that retroactive
application of the new
regulations would deprive petitioner of due process. I conclude that application
of the new regulations to
the present case, nothwithstanding the fact that it arises under section 1128(b)(1)
rather than under section
1128(b)(4), would similarly materially alter Petitioner's substantive rights.
Therefore, I conclude that the
new regulations do not apply to this case. 4/
2. The I.G. had authority to exclude Petitioner pursuant to section 1128(b)(1) of the Act.
The I.G. is authorized to exclude an individual pursuant to section 1128(b)(1)
of the Act if that individual
has been convicted, in connection with the delivery of a health care item or
service, of a criminal offense
relating to fraud, theft, embezzlement, breach of fiduciary responsibility,
or other financial misconduct.
Therefore, in order to justify Petitioner's exclusion, the I.G. must prove three
elements: 1) that Petitioner
was "convicted" of a criminal offense; 2) that the offense for which
Petitioner was convicted was a
financial crime of the type described; and 3) that the crime was committed in
connection with the delivery
of a health care item or service. Here, the I.G. has met his burden of proving
that Petitioner's exclusion
was authorized.
Section 1128(i)(3) specifies that an individual is "convicted" when
a plea of guilty or nolo contendere has
been accepted by a court. Petitioner pled guilty to one count of theft. FFCL
12. The court accepted
Petitioner's guilty plea. FFCL 13. Therefore, Petitioner was convicted within
the meaning of section
1128(i) of the Act.
The crime of theft, to which Petitioner pled guilty, is one of the crimes enumerated
in section 1128(b)(1) as
justifying an exclusion. Petitioner's conviction was connected with the delivery
of a health care item or
service. Petitioner pled guilty to a charge that he committed theft against
BCBSO, a third-party payor of
health benefits. FFCLs 3, 12. Petitioner committed the theft for which he was
convicted by dispensing
generic drugs to his customers while billing BCBSO for the more expensive brand
name drugs and by
billing BCBSO for larger quantities than he actually dispensed. FFCLs 8-10.
Previous decisions
construing section 1128(a)(1) of the Act indicate that where a health care program
or payor is the victim of
a crime, the crime is "related to" the delivery of an item or service.
Moreover, those decisions have held
that the precise conduct of dispensing generic drugs while billing for brand
name drugs is related to the
delivery of an item or service.
Napoleon S. Maminta, M.D., DAB 1135 (1990). 5/
The precise conduct which led to Petitioner's conviction has also been held
to be related to the delivery of a
health care item or service. In Larry W. Dabbs, R.Ph., et al., DAB CR151 (1991),
an ALJ held that
pharmacists who pled guilty to mislabeling drugs had been convicted of a criminal
offense "related to" the
delivery of an item or service under Medicaid within the meaning of section
1128(a)(1) of the Act. The
indictments in that case showed that petitioners had dispensed generic drugs
to undercover agents posing as
Medicaid recipients, but had placed labels on the drugs and filed Medicaid claims
indicating that they had
dispensed brand name drugs. The ALJ concluded that this conduct was related
to the delivery of an item or
service under Medicaid because the delivery of a Medicaid item or service was
an element in the chain of
events giving rise to the offense. Id. at 6.
Similarly, in the present case, Petitioner dispensed generic drugs to BCBSO
investigators posing as
subscribers. Petitioner then submitted claims to BCBSO indicating that he had
dispensed brand name
drugs. BCBSO reimbursed Petitioner based on the cost of the more expensive brand
name drugs, rather
than on the cost of the generic drugs actually dispensed. The delivery of health
care items or services --
here, delivery of generic drugs to BCBSO investigators -- was an element in
the chain of events giving rise
to the offense for which Petitioner was convicted.
Therefore, the offense was "related" to the delivery of a health care item or service. 6/
Petitioner points to a number of alleged defects which, he argues, render his
conviction invalid. For
example, he contends that he was entrapped into committing the acts for which
he was convicted and that
he was not given notice of his constitutional rights before he was asked to
fill out and sign an incriminating
statement. Regardless of the merits of these contentions, they are irrelevant
to the present proceedings.
Numerous decisions of the DAB have held that an exclusion is justified by the
fact that a conviction has
occurred. See, e.g., Dewayne Franzen, DAB 1165 at 8 (1990). It is not necessary
or appropriate for me to
look behind that conviction to test its validity. Any legal challenges Petitioner
may have to the validity of
his conviction must be addressed to the court which accepted his guilty plea.
Francis Schaenboen, R. Ph.,
DAB 1249 at 9 (1991).
For these reasons, I conclude that Petitioner was convicted of the criminal
offense of theft in connection
with the delivery of a health care item or service. The I.G. therefore had authority
to exclude Petitioner
pursuant to section 1128(b)(1).
3. The three year exclusion imposed and directed by the I.G. is reasonable.
The remaining issue involves the reasonableness of the period of exclusion
imposed and directed against
Petitioner. An exclusion is reasonable so long as it is not extreme or excessive.
48 Fed. Reg. 3722 (1983).
I conclude that the three year exclusion imposed and directed against Petitioner
in this case is neither
extreme nor excessive, and I uphold it.
As an initial matter, Petitioner argues that his exclusion is unreasonable
because the I.G. may have been
operating under a merit pay system that rewarded decision-makers for excluding
health care providers. P.
Br. at 9-10. With his brief, Petitioner submitted a copy of the decision in
Melashenko v. Bowen, No. CV-
F-87-533 (E.D. Cal., June 19, 1990), which held that the merit pay system then
in effect deprived
practitioners of due process by giving I.G. decision makers a pecuniary interest
in the outcome of their
decisions. Id. Slip op. at 9. Petitioner also submitted documents which purport
to be performance rating
sheets for James F. Patton, the I.G.'s Director of Health Care Administrative
Sanctions, covering the period
1989 through 1991. Petitioner did not list these documents in his exhibit list
prior to the hearing in this
case, nor did he seek to admit them into evidence at the hearing. Moreover,
Petitioner has not argued that
there exists good cause for his failure to introduce them earlier. For this
reason, I decline to admit these
documents into evidence, and I do not consider Petitioner's arguments based
on them. 7/
Petitioner also contends that his exclusion is unreasonable because the I.G.
arbitrarily delayed imposing the
exclusion. P. Br. at 8-9. Petitioner argues that his exclusion should not be
"tacked on" after the period of
probation imposed by the court has been served. Whatever the equities of Petitioner's
argument, it is
unavailing here. It is well-settled that I have no authority to decide when
an exclusion is to begin. Samuel
W. Chang, M.D., DAB 1198 (1990); Mark E. Silver, D.P.M., DAB CR139 (1991).
Section 1128 is a remedial statute. It serves the remedial purposes of protecting
the financial integrity of
federally funded health care programs and protecting program beneficiaries and
respondents from
practitioners who have demonstrated that they are not trustworthy to provide
care to beneficiaries and
recipients. See S. Rep. No. 109, 100th Cong., 1st Sess. 1-2, reprinted in 1987
U.S.C.C.A.N. 682.
Exclusions pursuant to section 1128 also serve the ancillary benefit of deterring
providers from engaging in
conduct which may be harmful to the programs or their beneficiaries and recipients.
See Joyce Faye
Hughey, DAB CR94 at 5 (1990), aff'd DAB 1221 (1991).
Exclusions pursuant to section 1128(b) are permissive; no statutory minimum
period of exclusion is
required. See Eric Kranz, M.D., DAB 1286 at 11 (1991). The I.G. argues, however,
that the new
regulations establish a three year "benchmark" for permissive exclusions
and that unless I find evidence of
specific mitigating factors enumerated in the new regulations, I must affirm
the length of the exclusion as
imposed. I have concluded in point 1, above, that the new regulations are not
applicable to this proceeding.
Therefore, I need not consider whether the new regulations would require me
to uphold a three year
exclusion absent proof of the specified mitigating factors.
The state of the exclusion law prior to promulgation of the new regulations
was that petitioners and
respondents seeking to challenge the I.G.'s determination to impose an exclusion
pursuant to section
1128(b) were entitled to a de novo review of the reasonableness of that determination.
See Bassim, DAB
1333 at 8, 11. Under that standard, the evidence in a given case is examined
with a view to making
findings concerning a petitioner's culpability and other matters relevant to
determining a petitioner's
trustworthiness to participate in the Medicare and Medicaid programs. Id. at
8. Trustworthiness is a term
of art which encompasses various factors bearing on whether or not a petitioner
poses a risk to the
Medicare or Medicaid programs or to their beneficiaries and recipients. Id.
at 13; see also Hanlester
Network, et al., DAB 1347 at 45 (1992).
In prior cases, the DAB has approved use of the factors listed in 42 C.F.R.
1001.125 (1989) as general
guidance as to the types of evidence that may be relevant to a petitioner's
trustworthiness. See, e.g., Kranz,
DAB 1286 at 8; Vincent Baratta, M.D., DAB 1172 at 10-11 (1990). Application
of these factors requires
that a balance be struck between the seriousness of the offense and any factors
that may demonstrate
trustworthiness. Kranz, DAB 1286, at 8.
In the present case, the I.G. has presented evidence of the seriousness of
Petitioner's offense. The I.G. has
presented additional evidence which establishes that Petitioner is not trustworthy
to deal with federally
funded health care programs and their beneficiaries and recipients. Petitioner
has attempted to diminish his
culpability for the crime of which he was convicted. However, I do not find
his explanations credible.
Petitioner presented some evidence of rehabilitation. Nevertheless, I conclude
that the three year period of
exclusion is a reasonable period to require Petitioner to demonstrate that he
is again trustworthy to
participate in the Medicare and Medicaid programs.
Petitioner was indicted and pled guilty to a single felony count of theft.
FFCL 12. The count of the
indictment to which he pled guilty recited that he had knowingly and by deception
obtained or exerted
control over money with the purpose to deprive the owner, BCBSO, of the money.
FFCL 3. Thus, by
pleading guilty, Petitioner admitted that he had knowingly committed acts involving
deception. As an
initial matter, Petitioner's conviction of such a crime is strong evidence that
he poses a risk to federally
funded health care programs.
The conclusion reached by the sentencing court as to the seriousness of Petitioner's
crime and his
culpability is also relevant to the question of Petitioner's trustworthiness.
See e.g., David Cooper, R.Ph.,
DAB CR88 (1990). In the present case, the court that accepted Petitioner's guilty
plea and imposed
sentence on him viewed Petitioner's crime as serious. The court imposed the
maximum sentence, one and
one half years in the correctional center. FFCLs 25-26. The term of incarceration
was suspended on
condition that Petitioner serve 30 days in the county jail, pay a $2500 fine
and court costs, and perform 220
hours of community service. FFCL 25.
The Ohio State Board of Pharmacy similarly concluded that Petitioner had engaged
in dishonesty and
unprofessional conduct in the practice of pharmacy. FFCL 35. As a result of
this finding, the Board of
Pharmacy suspended Petitioner's license to practice pharmacy and imposed substantial
fines. Id. This
finding by the Board of Pharmacy is additional evidence of Petitioner's untrustworthiness.
The I.G. argues that it is evidence of Petitioner's untrustworthiness that
he engaged in wrongful activity for
over one year. I.G. Br. at 20-21. The I.G. points to an audit of Lakewood Pharmacy
conducted as part of
the BCBSO investigation of Petitioner. The audit reached the conclusion that
Petitioner had been
substituting generic drugs for brand name drugs during all of 1987 and part
of 1988. I.G. Ex. 6/9. While
Petitioner apparently paid restitution to BCBSO in an amount based on the audit
results, Tr. I/60-62,
Petitioner argues that the audit was flawed because it failed to account for
inventory on hand at the time he
purchased the pharmacy. P. Br. at 3. I make no finding as to whether Petitioner's
wrongful conduct
extended over more than a year. It is evidence of untrustworthiness, without
more, that the conduct to
which Petitioner pled guilty extended over several months. See Sukumar Roy,
M.D., DAB CR205 at 15.
In arguing that he is trustworthy, Petitioner attempts to minimize his culpability
by arguing that he was
entrapped into committing the offenses, that he was coerced into signing an
incriminating statement, and
that someone else must have been responsible for dispensing the prescriptions
in question. See, e.g., Tr.
I/167-68; II/270-71. Petitioner's contentions are not credible. BCBSO investigator
Rob testified that when
he conducted undercover shopping at Petitioner's pharmacy, he simply presented
prescriptions to be filled,
but did not engage in further conversation. Tr. I/52. Moreover, investigator
Rob testified that when he
visited Lakewood Pharmacy, Petitioner was the pharmacist on duty. Tr. I/53.
Finally, both investigator
Rob and agent Reed of the Ohio State Board of Pharmacy testified that they made
no threats to Petitioner at
the time he filled out and signed the statement admitting he had dispensed generic
drugs while billing for
brand name drugs. Tr. II/325, 358-59, 373-74.
I find it significant that Petitioner, who was represented by counsel throughout
the criminal proceedings
which resulted in his conviction, raises the issues of entrapment and coercion
of his confession for the first
time before me. If the facts were as Petitioner asserts, it seems that his counsel
would have been unlikely
to advise him to plead guilty.
I am also concerned that Petitioner may continue to pose a risk to the Medicare
and Medicaid programs
and their beneficiaries and recipients because he has failed to accept any responsibility
for his wrongful
conduct. In his testimony before me, Petitioner engaged in elaborate rationalizations
as to how his
computer or some employee could have been responsible for the billing "errors"
that resulted in the
overcharges to BCBSO. Even if I were persuaded that Petitioner's explanations
were plausible, which I am
not, I would still expect Petitioner to accept ultimate responsibility for the
misbillings and mislabelings as
the Pharmacist in charge. Petitioner has not done even this.
Petitioner argues that it is evidence of his trustworthiness that an audit
by another third party payor
revealed no discrepancies. P. Br. at 7. However, Petitioner did not introduce
this audit into evidence.
Moreover, the fact that Petitioner did not overcharge another third party payor
does not lessen his
culpability for overcharging BCBSO.
There are some signs that Petitioner may have begun to rehabilitate himself.
For example, Petitioner
promptly complied with the terms of his probation, including paying restitution
to BCBSO. Tr. II/251, 254.
See Roy, DAB CR205 at 17. Petitioner also successfully completed a jurisprudence
examination required
by the Ohio State Board of Pharmacy. Tr. II/262. Additionally, investigator
Rob testified that BCBSO had
monitored Petitioner's billing practices since his conviction and had noted
no further discrepancies. Tr.
I/56. However, this evidence is not sufficient to overcome the strong evidence
of Petitioner's
untrustworthiness. Given the serious nature of Petitioner's crime and the potential
for harm to federally
funded health care programs and their beneficiaries and recipients should Petitioner
again engage in the
type of conduct which led to his conviction, a three year exclusion is reasonable.
CONCLUSION
For the reasons stated, I conclude that the three year exclusion imposed and
directed by the I.G. against
Petitioner is reasonable. I therefore uphold the
exclusion.
___________________________
Charles E. Stratton
Administrative Law Judge
1. Section 1128(h) of the Act defines "State health care program"
to include three types of federally-
assisted programs, including State plans approved under Title XIX of the Act
(Medicaid). I use the term
"Medicaid" hereafter to represent all State health care programs from
which Petitioner was excluded.
2. Some of my statements in the sections preceding these formal findings and
conclusions are also FFCLs.
To the extent they are not repeated here, they were not in controversy.
3. Citations to the record in this case are as follows:
Transcript Tr. [volume]/[page]
Petitioner's Exhibit P. Ex. [number]/[page]
I.G.'s Exhibit I.G. Ex. [number]/[page]
Petitioner's
Posthearing Brief P. Br. [page]
I.G.'s
Posthearing Brief I.G. Br. [page]
Petitioner's
Reply Brief P. R. Br. [page]
I.G.'s Reply Brief I.G. R. Br. [page]
4. In light of the Bassim decision, I do not need to consider the merits of
the I.G.'s position as to the
meaning of the new regulations as applied at the hearing level. I note, however,
that in Sukumar Roy,
M.D., DAB CR205 (1992), I reasoned that the regulation cited by the I.G. establishes
criteria to be used by
the I.G. in making exclusion determinations, but does not establish criteria
binding on an ALJ in
conducting a de novo review of the reasonableness of an exclusion. Id. at 10-11.
See also Charles J.
Barranco, M.D., DAB CR187 (1992); Stephen J. Willig, M.D., DAB CR192 (1992).
5. In Maminta, appellate panel held that a conviction is related to the delivery
of an item or service under
Medicare or Medicaid if either program is the victim of the offense. The petitioner
in the Maminta case
was convicted of converting to his own use a Medicare reimbursement check that
was intended to be paid
to another health care provider. The present case involves a different factual
situation from that of
Maminta. The victim of Petitioner's crime was BCBSO, a private health insurer,
rather than the Medicare
or Medicaid program. Nevertheless, the rationale of the Maminta decision is
equally applicable here.
BCBSO, like Medicare and Medicaid, is a third party payor of health benefits.
Petitioner's theft occurred
in the course of seeking reimbursement from BCBSO for prescription drugs, a
health care benefit.
Therefore, as was true in Maminta, Petitioner's conviction was connected to
the delivery of a health care
item or service because BCBSO was the victim of Petitioner's crime.
6. I have already noted that the Maminta and Dabbs cases arose under section
1128(a)(1) of the Act,
rather than under section 1128(b)(1) as is the case here. The relevant language
of section 1128(a)(1)
mandates the exclusion of individuals or entities convicted of criminal offenses
"related to" the delivery of
an item or service under Medicare or Medicaid. Section 1128(b)(1) permits the
exclusion of individuals or
entities convicted of specified types of criminal offenses "in connection
with the delivery of a health care
item or service." I recognize that the operative language of the two provisions
is not identical. However,
the ordinary meaning of "related to" and "in connection with"
is sufficiently similar to be accorded a
similar interpretation.
7. Even were I to admit Petitioner's exhibits and consider his arguments, these
exhibits do not prove that
I.G. officials had an improper pecuniary interest in the outcome of exclusion
determinations during the
time in question. See Edward J. Petrus, Jr., M.D., et al., Docket No. C-147
(Ruling Denying Motion to
Dismiss, October 9, 1990). The I.G. argues that the proffered documents show
that Director Patton's
performance is judged based on the number of sanctions processed in a year,
rather than the number of
exclusions imposed. Moreover, I would conclude that I do not have the authority
to consider alleged
constitutional defects in the deliberative process of the I.G. in deciding whether
or not to exclude a
provider. See Betsy Chua, M.D., et al., DAB 1204 (1990).