Michael D. Tempel, CR No. 266 (1993)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: Michael D. Tempel, Petitioner,
- v.-
The Inspector General.

DATE: May 24, 1993

Docket No. C-290
Decision No. CR266

DECISION

On August 7, 1990, the Inspector General (I.G.) notified Petitioner that he was being excluded from
participation in the Medicare and State health care programs pursuant to section 1128(b)(4) of the Social
Security Act (Act). 1/ The I.G. advised Petitioner that he was being excluded based on a determination by
the Iowa State Board of Medical Examiners (Iowa licensing authority) to revoke Petitioner's license to
practice medicine in the State of Iowa. The I.G. further advised Petitioner that his exclusion would remain
in effect until he obtains a valid license to practice medicine in the State of Iowa. In a letter dated August
17, 1990, Petitioner challenged the exclusion and requested a hearing.

I have considered the evidence of record, the parties' arguments, and the applicable law. I conclude that
the I.G. had authority to exclude Petitioner pursuant to section 1128(b)(4)(A) of the Act. I conclude also
that regulations at 42 C.F.R. Part 1001, published and effective on January 29, 1992, do not apply
retroactively to establish a standard for adjudicating the length of the exclusion in this case. In addition, I
conclude that the remedial purpose of section 1128 of the Act will be served in this case by the following
exclusion: Petitioner is excluded until any State licensing authority grants him a medical license without
restriction after conducting a full review of all the legal and factual issues which were before the State of
Iowa and after determining that Petitioner's mental disorder has resolved sufficiently to enable him to
practice medicine competently.

In the alternative, if I were to conclude that the criteria of the Part 1001 regulations published on January
29, 1992 apply to establish a standard for adjudicating the length of the exclusion in this case, then I would
find that 42 C.F.R. 1001.501(b) mandates that the exclusion in this case must be coterminous with the
indefinite license revocation imposed by the Iowa licensing authority and I would sustain the exclusion
imposed and directed against Petitioner.


PROCEDURAL BACKGROUND

I convened a prehearing conference in this case on October 19, 1990. During that conference, the I.G.
asserted that there are no disputed issues of material fact and that the case could be resolved by summary
disposition. I established a schedule for the filing of briefs on the I.G.'s motion for summary disposition.

Before the I.G. could file the motion, Petitioner requested a stay of the proceedings in this case pending the
outcome of a case before the United States District Court for the District of Alaska. Petitioner alleged that
the outcome of this case would affect the status of his medical license in the State of Alaska and that this
would, in turn, determine the status of his medical license in the State of Iowa. I granted Petitioner's
request for a stay until January 22, 1991. When that time came and Petitioner did not renew his request, I
ended the stay, although the court case apparently was still pending. On February 20, 1991, the I.G. filed a
written motion for summary disposition and Petitioner filed a responsive brief on March 5, 1991.

At Petitioner's request, I subsequently stayed the proceedings in this case pending the outcome of a hearing
by the Iowa licensing authority on the issue of the reinstatement of Petitioner's medical license in Iowa. By
letter dated December 9, 1991, the I.G. informed me that the Iowa licensing authority had issued a final
decision denying Petitioner's application for reinstatement of his Iowa medical license. The I.G.
subsequently filed his reply brief to Petitioner's March 5, 1991 response to his motion for summary
disposition.

On January 29, 1992, prior to my issuance of a Ruling on the I.G.'s motion for summary disposition, the
Secretary of the Department of Health and Human Services (the Secretary) promulgated new regulations
containing procedural and substantive provisions affecting exclusion cases. I gave the parties an
opportunity to submit written comments on the issue of what, if any, effect these regulations might have on
the outcome of this case.

On April 23, 1992, I issued a Ruling in which I concluded that the I.G. has authority to exclude Petitioner
pursuant to section 1128(b)(4)(A) of the Act, and I granted the I.G.'s motion for summary disposition on
this issue. In addition, I held that the Part 1001 regulations published on January 29, 1992 do not apply
retroactively to establish a standard for adjudicating the length of the exclusion in cases such as this where
the I.G.'s exclusion determination was made prior to January 29, 1992. I concluded that the I.G. had not
established as a matter of law that Petitioner should be excluded until he obtains a valid license to practice
medicine in the State of Iowa. I found that there were genuine issues of material fact concerning the issue
of Petitioner's trustworthiness and I stated that the case would proceed to hearing on the issue of the
reasonableness of the length of the exclusion.

I initially scheduled the hearing to take place on June 25, 1992. That hearing date was continued until
matters related to the parties' prehearing discovery motions and requests for subpoenas were resolved. 2/
On December 10, 1992, I conducted an in-person hearing in San Diego, California. Testimony was
received at this hearing from witnesses who appeared in person at the hearing, and from a witness who
testified by telephone from Palmer, Alaska.

On January 22, 1993, during the period that the posthearing briefing schedule was in progress, the
Secretary published regulations described as a clarification of the exclusion regulations published January
29, 1992. I invited the parties to address the issue of the impact of these clarifying regulations on this case
in their posthearing briefs. I also convened a posthearing conference in which I stated that in view of the
fact that I may decide that the January 22, 1993 clarifying regulations require me to apply the Part 1001
regulations published on January 29, 1992 to this case, I would give the parties the opportunity to submit
additional evidence based on any issue that would arise under these regulations. Both parties indicated that
they did not wish to offer such evidence.


ISSUES

The issues are:

1. Whether the I.G. has the authority to exclude Petitioner pursuant to section 1128(b)(4)(A) of
the Act.

2. Whether, given the circumstances of this case, it is reasonable to exclude Petitioner for a period
of indefinite duration until he obtains a valid license to practice medicine in Iowa.


FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCLs)

1. Petitioner received a medical degree from the University of Iowa in 1978 and he completed a residency
program in radiology at the University of Iowa in 1981. P. Ex. 10 at 13, 14. 3/

2. Petitioner was appointed to the position of graduate fellow in the Radiology Department of the
University of Iowa Hospitals and Clinics for the period July 1, 1981 through June 30, 1982. P. Ex. 5.

3. Petitioner resigned from his graduate fellow position at the University of Iowa Hospitals and Clinic on
August 11, 1981. P. Ex. 5.

4. After resigning from his graduate fellow position at the University of Iowa Hospitals and Clinic in
1981, Petitioner moved to Oregon. I.G. Ex. 12 at 19.

5. Petitioner applied for a medical license in Oregon. After conducting a hearing on Petitioner's
application for a medical license in April 1982, the licensing authority in Oregon denied Petitioner a
medical license. Tr. 163-164, 197-198.

6. In 1982, Petitioner moved to Alaska. He obtained a full license to practice medicine in Alaska, and he
worked for various medical groups as a radiology consultant. I.G. Ex. 12 at 19; Tr. 197-198.

7. After moving to Alaska, Petitioner reported to Alaska State troopers alleged incidents involving assaults
against him which he believed were politically motivated. These incidents allegedly occurred in Iowa in
1981 and over the course of several years after Petitioner moved to Alaska in 1982. Tr. 164-170.

8. On June 11, 1986, Paul E. Turner, Ph.D., a clinical psychologist, filed a Petition for Initiation of
Involuntary Commitment in the Alaska Superior Court. Dr. Turner stated that Petitioner was
demonstrating symptoms of paranoid schizophrenia, that he was delusional, and that he demonstrated loose
associative functioning. Dr. Turner opined that Petitioner was a danger to others. I.G. Ex. 12 at 96-97.

9. Based on Dr. Turner's opinion, the Alaska Superior Court issued an ex parte order on June 11, 1986
finding that there was probable cause to believe that Petitioner is mentally ill and that he presents a
likelihood of causing serious harm to himself or others. The Alaska Superior Court ordered the Alaska
State troopers to take Petitioner into custody and deliver him to the Alaska Psychiatric Institute for
evaluation. I.G. Ex. 12 at 95.

10. Petitioner was admitted to the Alaska Psychiatric Institute on June 11, 1986 with a provisional
diagnosis of schizophrenia, paranoid type, chronic. I.G. Ex. 12 at 5, 17.

11. On June 12, 1986, Harold South, M.D., evaluated Petitioner at the Alaska Psychiatric Institute. This
evaluation revealed extensive evidence that Petitioner suffered from paranoid delusions and that he was
mentally ill. I.G. Ex. 12 at 5, 90-91.

12. On June 12, 1986, Dr. South filed with the Alaska Superior Court a petition for a 30-day commitment.
I.G. Ex. 12 at 90-91.

13. On June 13, 1986, the Alaska Superior Court conducted an in-person evidentiary hearing on
Petitioner's mental condition. Petitioner was present at the hearing and he was represented by counsel.
I.G. Ex. 8.

14. On June 20, 1986, the Alaska Superior Court issued a decision finding that Petitioner was mentally ill,
that he was likely to cause harm to himself or others, and that he was gravely disabled. The Alaska
Superior Court ordered that Petitioner be committed to the Alaska Psychiatric Institute for a period not to
exceed 30 days. I.G. Ex. 8.

15. During his stay at the Alaska Psychiatric Institute, Petitioner expressed paranoid delusions and the
belief that he was a political prisoner. I.G. Ex. 12 at 5-6.

16. On July 9, 1986, William A. Worrall, M.D., petitioned the Alaska court for an additional 90-day
commitment. However, the petition for a 90-day commitment was dropped when Petitioner was
voluntarily transferred on July 10, 1986 to Charter North Hospital, a private psychiatric hospital, for further
treatment. I.G. Ex. 12 at 5-8, 81-82; Tr. 205.

17. Petitioner was discharged from the Alaska Psychiatric Institute with a diagnosis of chronic paranoid
disorder. The discharge report revealed that Petitioner lacked insight into his condition and that the
prognosis for Petitioner's condition was poor. The discharge report recommended that Petitioner be treated
with medication for his condition. I.G. Ex. 12 at 6-8.

18. On August 16, 1986, Petitioner was discharged from Charter North Hospital. I.G. Ex. 9.

19. On October 27, 1986, the State licensing authority in Alaska automatically suspended Petitioner's
license to practice medicine in Alaska based upon the Alaska Superior Court's finding that Petitioner
suffered from a grave mental disability. I.G. Ex. 6 at 2.

20. On October 21, 1987, the State licensing authority in Hawaii revoked Petitioner's license to practice
medicine in Hawaii based on the Alaska court's decision. I.G. Ex. 10 at 2; Tr. 196.

21. On October 1, 1987, the State licensing authority in Iowa initiated a license revocation proceeding
after it became aware of Alaska's decision to suspend Petitioner's license. The Iowa licensing authority
became aware of Alaska's decision in the course of its routine monitoring of disciplinary actions in other
States. I.G. Exs. 2, 6.

22. On January 8, 1988, a three-member panel of the Iowa licensing authority issued a proposed decision
to revoke Petitioner's medical license. Prior to reaching its proposed decision, the three-member panel
conducted a hearing on December 16, 1987. Petitioner was not present at that hearing, but he was notified
of it and he was given the opportunity to appear. I.G. Exs. 2, 6.

23. Petitioner appealed the proposed decision of the three-member panel of the Iowa licensing authority
and on March 3, 1988, a hearing was held before the full membership of the Iowa licensing authority.
Petitioner did not appear at that hearing in person, but he set forth his position in written arguments and
supporting documents. I.G. Exs. 2, 6.

24. On March 14, 1988, the Iowa licensing authority issued a final decision affirming the proposed
decision to revoke Petitioner's license. The Iowa licensing authority found that Petitioner was guilty of
being adjudged mentally incompetent by a court of competent jurisdiction and that he was unable to
practice medicine with reasonable skill and safety due to his mental condition. I.G. Exs. 2, 6, 7.

25. Section 1128(b)(4)(A) of the Act authorizes exclusions from the Medicare and Medicaid programs of
any individual whose license to provide health care has been revoked by a State licensing authority for
reasons bearing on the individual's professional competence, professional performance, or financial
integrity.

26. The Secretary has delegated to the I.G. the authority to determine, impose, and direct exclusions,
pursuant to section 1128 of the Act. 48 Fed. Reg. 21661 (1983).

27. On August 7, 1990, pursuant to section 1128(b)(4)(A) of the Act, the I.G. excluded Petitioner from
participating in the Medicare program and directed that he be excluded from participating in Medicaid,
based on the decision of the licensing authority in Iowa to revoke Petitioner's medical license. The I.G.
determined that Petitioner's exclusion will remain in effect until he obtains a valid license in Iowa.

28. Petitioner's medical license was revoked by a State licensing authority for reasons bearing on his
professional competence and professional performance. FFCL 24.

29. The I.G. had authority to exclude Petitioner pursuant to section 1128(b)(4)(A) of the Act. FFCLs 24-
28.

30. Regulations published on January 29, 1992 do not apply retroactively to establish a standard for
adjudicating the reasonableness of the length of the exclusion in this case. Behrooz Bassim, M.D., DAB
1333 (1992).

31. The remedial purpose of section 1128 of the Act is to protect the integrity of federally-funded health
care programs and the welfare of beneficiaries and recipients of such programs from individuals and
entities who have been shown to be untrustworthy.

32. The Alaska Superior Court's 1986 finding that Petitioner is mentally ill is supported by credible
medical opinion and is persuasive evidence that Petitioner is untrustworthy. FFCLs 8, 11, 15, 17.

33. The decisions of the licensing authorities in the States of Alaska, Hawaii, and Iowa to suspend or
revoke Petitioner's medical licenses based on the findings of the Alaska Superior Court create the
presumption that Petitioner is untrustworthy. FFCLs 19, 20, 24.

34. Petitioner sought to reinstate his medical license in Iowa. On November 21, 1991, the Iowa licensing
authority denied Petitioner's application for reinstatement of his license on the grounds that Petitioner
failed to establish that the basis for the revocation of his license no longer existed. The Iowa licensing
authority reached this decision after conducting a hearing at which Petitioner appeared in person. I.G. Ex.
9.

35. The refusal by the Iowa licensing authority to reinstate Petitioner's medical license in 1991 is evidence
that Petitioner is untrustworthy. FFCL 34.

36. Petitioner has applied for a medical license in California, and, on June 23, 1992, the State of California
petitioned the California licensing authority to deny Petitioner's application on the grounds that his ability
to practice medicine is impaired by mental illness. I.G. Ex. 10.

37. Petitioner is not licensed to practice medicine in any State, and this is evidence of his
untrustworthiness. Tr. 196-199.

38. Petitioner underwent a psychological evaluation of his mental condition at the Veterans Administration
Medical Center in San Diego, California in 1992. This evaluation was conducted by Ann Garland, M.S., a
psychology intern, and Beth Kalal, Ph.D., a supervising clinical psychologist. P. Ex. 12; Tr. 32.

39. Dr. Kalal's and Ms. Garland's evaluation suggests that Petitioner suffers from a paranoid delusional
disorder. The evaluation revealed also that Petitioner is not competent to practice medicine, that Petitioner
does not understand that he has mental problems, and that Petitioner would benefit from treatment
including anti-psychotic medication and psychotherapy. I.G. Ex. 12; Tr. 40, 43-44, 58, 64-66.

40. Petitioner continues to suffer from a mental disorder, and he is not competent to practice medicine
safely. FFCLs 38-39.

41. Most individuals suffering from delusional disorders do not recover. Tr. 42.

42. The prognosis for recovery from delusional disorders is particularly doubtful in cases where the
individual suffering from the disorder does not recognize the existence of the disorder and does not obtain
treatment for it. Tr. 45, 158-159.

43. Petitioner denies that he has ever suffered from a mental disability and he has not sought or received
treatment for his mental condition since he was discharged from Charter North Hospital in 1986. I.G. Ex.
12; Tr. 65, 206.

44. The prognosis for Petitioner's recovery from his condition is poor. FFCLs 41-43.

45. Petitioner's unsubstantiated denial that he has a mental disorder is not sufficient to rebut the
overwhelming evidence showing that he suffers from a mental disorder which renders him untrustworthy
to provide medical care.

46. The record is devoid of any expert opinion by qualified professionals which support Petitioner's
opinion that he does not suffer from a mental disorder.

47. Petitioner's unsubstantiated allegations that he is the victim of a conspiracy involving his political
opponents and his wife to destroy his career and credibility is not sufficient to rebut the findings of the
Alaska Superior Court and the State licensing authorities in Alaska, Hawaii, and Iowa.

48. Petitioner's unsubstantiated attacks on the motives of the health care providers who evaluated him are
not sufficient to rebut the credible expert opinion evidence showing that he is a threat to Medicare and
Medicaid patients.

49. The remedial purpose of section 1128 is satisfied by the following exclusion: Petitioner is excluded
until any State licensing authority grants him a medical license without restriction after conducting a full
review of all the legal and factual issues which were before the State of Iowa and after determining that
Petitioner's mental disorder has resolved sufficiently to enable him to practice medicine competently.

50. In the alternative, were I to conclude that the regulations published on January 29, 1992 apply to
establish a standard for adjudicating the length of the exclusion in this case, then I would find that the I.G.'s
exclusion until Petitioner obtains a medical license in Iowa is mandated by 42 C.F.R. 1001.501(b).


RATIONALE

Petitioner represented himself in this proceeding, and the record contains numerous submissions by
Petitioner in which he sets forth his position. In many instances, Petitioner's contentions were repetitive
and overlapping, and I have attempted to paraphrase and summarize Petitioner's position in this discussion.
Even if not expressly mentioned, I have considered each and every one of the arguments made in the briefs
and attachments and other documents submitted by Petitioner.

I. The I.G. has the authority to exclude Petitioner pursuant to section 1128(b)(4)(A) of the Act.

In my April 23, 1992 Ruling, I entered summary disposition in favor of the I.G. on the issue of the I.G.'s
authority to exclude Petitioner pursuant to section 1128(b)(4)(A) of the Act. Notwithstanding my
disposition of this issue, Petitioner continued to repeat his arguments pertaining to the legal basis for the
exclusion after I issued the April 23, 1992 Ruling. I have considered Petitioner's arguments on this issue. I
reaffirm my April 23, 1992 determination that the I.G. has the authority to exclude Petitioner under section
1128(b)(4)(A) for the reasons set forth in my Ruling, and I reiterate those reasons below.

A. Petitioner's license to provide health care was revoked by a State licensing authority for reasons bearing
on his professional competence and professional performance, within the meaning of section
1128(b)(4)(A) of the Act.

The I.G. excluded Petitioner from participating in Medicare and directed that he be excluded from
participating in Medicaid pursuant to section 1128(b)(4)(A) of the Act. That provision authorizes the
Secretary, or the Secretary's delegate, the I.G., to impose and direct exclusions against any individual or
entity:

whose license to provide health care has been revoked or suspended by any State licensing
authority . . . for reasons bearing on the individual's or entity's professional competence, professional
performance, or financial integrity.

The I.G.'s authority to impose and direct an exclusion under section 1128(b)(4)(A) is based upon
fulfillment of the following statutory criteria: (1) revocation or suspension of a license to provide health
care; (2) by a State licensing authority; (3) for reasons bearing on the individual's or entity's professional
competence, professional performance, or financial integrity. Petitioner does not dispute that these
statutory criteria are met in this case. Based on my review of the record, I conclude that a State licensing
authority revoked Petitioner's medical license for reasons bearing on Petitioner's professional competence
and professional performance, and therefore the I.G. has the authority to exclude Petitioner pursuant to
section 1128(b)(4)(A) of the Act.

The undisputed material facts establish that on June 20, 1986, the Superior Court for the State of Alaska
issued an order involuntarily committing Petitioner to the Alaska Psychiatric Institute. This order was
based on a finding that Petitioner was mentally ill, and that, as a result of his mental illness, he was
"gravely disabled." I.G. Ex. 8. On October 27, 1986, the State licensing authority in Alaska automatically
suspended Petitioner's medical license based upon the Alaska court's finding. FFCL 19.

The licensing authority in the State of Iowa subsequently became aware of the Alaska licensing authority's
decision to suspend Petitioner's medical license. A Complaint and Statement of Charges filed before the
Iowa licensing authority on October 1, 1987 alleged that the Alaska Superior Court's finding that Petitioner
was mentally ill was grounds for automatic suspension of his medical license in the State of Iowa.
Specifically, the complaint alleged that Petitioner was guilty of being "adjudged mentally incompetent by a
court of competent jurisdiction" and that Petitioner was guilty of being unable "to practice medicine . . .
with reasonable skill and safety by reason of a mental or physical impairment." I.G. Ex. 7. On March 14,
1988, the Iowa licensing authority found that there was substantial evidence to support these allegations
and revoked his license. I.G. Ex. 6.

These uncontested facts establish that the State licensing authority in Iowa revoked Petitioner's license to
practice in Iowa. In addition, the reasons expressed by the Iowa licensing authority for revoking
Petitioner's medical license bear on Petitioner's professional competence and performance. The Iowa
licensing authority revoked Petitioner's medical license based on its finding that Petitioner was unfit to
practice medicine by virtue of his mental illness. Although the terms "professional competence" and
"professional performance" are not defined in section 1128(b)(4)(A), the plain meaning of these terms
encompasses the ability to practice a licensed service with reasonable skill and safety. The Iowa licensing
authority found that Petitioner was unable to practice medicine with reasonable skill and safety. Thus, the
basis for the Iowa licensing authority's revocation decision falls squarely within the meaning of section
1128(b)(4)(A).

B. Arguments pertaining to the correctness or fairness of the Iowa licensing authority's revocation decision
are not relevant to the issue of the I.G.'s authority to exclude Petitioner.

Petitioner's central argument is that the Iowa licensing authority's decision to revoke his medical license is
defective because: (1) it was based on false allegations and (2) he was treated unfairly in the Iowa license
revocation hearing as well as in the proceedings in Alaska which led to the Iowa decision to revoke his
medical license. According to Petitioner, the I.G.'s determination to exclude him from participation in the
Medicare and Medicaid program, is not justified because it is based on a defective decision by the Iowa
licensing authority to revoke his medical license.

Throughout this proceeding, Petitioner has consistently maintained that the findings of the Iowa licensing
authority that he is unfit to practice medicine are unfounded and unproven. Petitioner has repeatedly
insisted that the actions taken by the government authorities in the States of Alaska and Iowa are politically
motivated and that he was denied due process in the Iowa license revocation proceeding and in the
proceedings in Alaska which led to Iowa's decision to revoke his medical license.

Petitioner asserts that his difficulties with State licensing authorities emanated from a contractual dispute he
had with the United States Navy more than twelve years ago. Petitioner states that he had agreed to serve
on active naval duty following graduation from medical school and that he had been prevented from doing
so by the United States Navy. Petitioner states that he retained the services of a law firm to arbitrate his
complaint that he had been wrongfully excluded from active naval service and that he scheduled a meeting
with his lawyer to take place on February 20, 1981. According to Petitioner, he was assaulted on February
20, 1981 as part of an effort by his political opponents to obstruct the scheduled meeting with his lawyer.
Petitioner states that he was assaulted again on July 23, 1981. Petitioner contends that these assaults took
the form of the wrongful use of drugs, terrorism, and included an intentionally applied overdose of
radioactive material on July 23, 1981 which resulted in a "near death" experience. Petitioner's Posthearing
Brief at 2-4.

Petitioner contends also that between 1982 and 1986 he was the victim of additional politically motivated
assaults while he was living and practicing medicine in Alaska. Tr. 164-170. Petitioner asserts that
attempts made by him to report these assaults resulted in retaliation by the State of Alaska which
culminated in his involuntary commitment to the Alaska Psychiatric Institute in June of 1986. Petitioner's
Posthearing Brief at 4-6.

Petitioner asserts that a political factor which might have a bearing on this case is that he is a genetic
descendant of the John and Edmund Pendleton family of colonial Virginia and therefore is a relative of
former Presidents James Madison, Zachary Taylor, and George Washington. According to Petitioner, this
is an additional possible cause for political jealousy and for a political assassination. Petitioner's
Posthearing Brief at 25-26. Petitioner states that he has always believed himself to be completely normal
and he maintains that the Iowa licensing authority's finding that he suffers from an incapacitating mental
illness is false. Petitioner's Posthearing Brief at 6, 48.

It is well settled that a provider's arguments concerning the correctness or fairness of a State licensing
board's revocation proceeding are irrelevant to the issue of whether the I.G. has the authority to impose and
direct an exclusion based on the State licensing board's order revoking the provider's license. Bernardo G.
Bilang, M.D., DAB 1295 at 8 (1992). The I.G.'s authority to impose and direct exclusions pursuant to
section 1128(b)(4)(A) emanates from actions taken by State licensing boards, not the underlying facts on
which State boards' decisions may be based. The I.G.'s authority to exclude health care providers under
section 1128(b)(4)(A) is triggered by a State licensing board's revocation or suspension of a provider's
license to provide health care, and a hearing on the I.G.'s authority to exclude may not be used to raise
collateral challenges of State board decisions on the grounds that they are defective. Leonard R. Friedman,
M.D., DAB 1281 (1991).

In this case, the evidence establishes that the Iowa licensing authority revoked Petitioner's medical license
for reasons bearing on his professional competence and professional performance. I recognize that
Petitioner argues vehemently that the Iowa licensing authority's revocation decision was based on
allegations that are patently false and that he has been treated unfairly not only in the Iowa proceeding but
in the proceedings in the State of Alaska which led to the Iowa licensing authority's decision. However the
legal basis for the I.G.'s authority to exclude Petitioner is derived from the fact of the Iowa licensing
authority's decision to revoke Petitioner's license for reasons bearing on his professional competence and
professional performance. Section 1128(b)(4)(A) does not require the I.G. to go behind the State licensing
proceeding to determine whether the revocation decision is valid. I conclude that Petitioner's license to
practice medicine in Iowa was revoked for reasons bearing on his professional competence and
professional performance by the Iowa licensing authority within the meaning of section 1128(b)(4)(A), and
therefore the I.G. had the authority to exclude him.

II. The remedial purpose of section 1128 of the Act is served by the following exclusion: Petitioner is
excluded until any State licensing authority grants him a medical license without restriction after
conducting a full review of all the legal and factual issues which were before the State of Iowa and after
determining that Petitioner's mental disorder has resolved sufficiently to enable him to practice medicine
competently.

A. Trustworthiness is the applicable standard for evaluating the reasonableness of the exclusion in this
case.

On January 29, 1992, the Secretary published regulations (42 C.F.R. Parts 1001-1007) pertaining to the
authority under the Medicare and Medicaid Patient and Program Protection Act (MMPPPA), Public Law
100-93, to exclude individuals and entities from reimbursement for services rendered in connection with
the Medicare and Medicaid programs. 4/ These new regulations also included amendments to the civil
money penalty authority of the Secretary under the MMPPPA. For purposes of this proceeding, the
specific regulatory provisions relating to permissive exclusions under section 1128(b)(4) of the Act (42
C.F.R. 1001.501) and appeals of such exclusions (42 C.F.R. Part 1005) must be considered in terms of
their applicability to this case.

Prior to the January 29, 1992 regulations, when determining whether the length of an exclusion imposed
and directed against a party by the I.G. was reasonable, administrative law judges usually evaluated an
excluded party's "trustworthiness" in order to gauge the risk that party might pose in terms of the harm
Congress sought to prevent. Appellate panels of the Departmental Appeals Board (DAB) have approved
the use of the term "trustworthiness" as a shorthand term for those cumulative factors which govern the
assessment of whether a period of exclusion imposed by the I.G. is reasonable. See, Hanlester Network, et
al., DAB 1347, at 45-46 (1992); Behrooz Bassim, M.D., DAB 1333 (1992).

The January 29, 1992 regulations affect procedural and substantive changes with respect to the imposition
of exclusions. For example, under the criteria contained in 42 C.F.R. 1001.501(b), with the exception of
circumstances enumerated in 42 C.F.R. 1001.501(c), an exclusion will never be for a period of time less
than the period during which an individual's or entity's license is revoked, suspended, or otherwise not in
effect as a result of, or in connection with, a State licensing action. In addition, the new regulations
provide that exclusions imposed pursuant to section 1128(b)(4) are subject to being lengthened based on
the specific "aggravating" factors enumerated in 42 C.F.R. 1001.501(b)(2). Only if one or more of the
aggravating factors listed in section 1001.501(b)(2) justifies a longer exclusion can the specific mitigating
factors listed in 42 C.F.R. 1001.501(b)(3) be considered. It is undisputed that the new regulations alter
the substantive rights of Petitioner, because they limit the mitigating factors that can be considered in
Petitioner's favor and would bar Petitioner from presenting evidence which is relevant to his
trustworthiness to provide care. 5/

Administrative law judges have held consistently that the January 29, 1992 regulations were not intended
by the Secretary to strip parties retroactively of rights vested prior to January 29, 1992 and, therefore, the
regulations do not apply to any cases arising from exclusion determinations made prior to that date. Bruce
G. Livingston, D.O., DAB CR202 (1992) (Livingston); Charles J. Barranco, M.D., DAB CR187 (1992)
(Barranco); Syed Hussaini, DAB CR193 (1992); Steven Herlich, DAB CR197 (1992); Stephen J. Willig,
DAB CR192 (1992); Sukumar Roy, M.D., DAB CR205 (1992); Aloysius Murcko, D.M.D., DAB CR189
(1992); Narinder Saini, M.D., DAB CR217 (1992) (Saini); Tajammul H. Bhatti, M.D., DAB CR245
(1992); Anthony Accaputo, Jr., DAB CR249 (1993). In addition, an appellate panel of the DAB addressed
the applicability of the new regulations to an exclusion the I.G. had imposed under section 1128(b)(4) of
the Act prior to January 29, 1992. The panel held that the January 29, 1992 regulations do not apply
retroactively in cases involving exclusion determinations made prior to the regulations' publication date.
Behrooz Bassim, M.D., DAB 1333, at 5-9 (1992).

The appellate panel in Bassim noted the distinction between the effective date of a new regulation and the
permissible effect of a regulation. Bassim at 6. It held that the January 29, 1992 regulations were
inconsistent with prior DAB decisions on the scope of review and the length of an exclusion, and that the
January 29, 1992 regulations represented substantive changes in the law. Bassim at 6-7. The panel
determined that the Secretary did not intend to alter the substantive rights of petitioners with the January
29, 1992 regulations. Bassim at 8-9.

The panel cited several rationales to support its determination that the new regulations were not to be
applied retroactively to cases where a petitioner had been excluded prior to January 29, 1992. The panel
noted that the concept of retroactivity is not favored in law, and that an agency's authority to promulgate
rules having a retroactive effect must be expressly granted by Congress. Bassim at 6. Moreover, the panel
also noted that even with such a statutory grant of authority, an agency's rules will not be applied
retroactively unless its language clearly requires this result. Bassim at 6.

Congress did not authorize the Secretary to promulgate rules having a retroactive effect, and there was no
statement by the Secretary that the new regulations were intended to apply retroactively to achieve
substantive changes. In the panel's view, if the Secretary had intended to effect substantive changes in
pending cases, this intent would have been expressly stated given the resultant administrative
complications in the appeals process as well as the potential prejudice to petitioners. Bassim at 7. The
panel held that parts of the new regulations which affect substantive changes may be applied only to cases
in which the I.G.'s Notice of Intent to Exclude, Notice of Exclusion, or Notice of Proposal to Exclude is
dated on or after January 29, 1992. Bassim at 9.

I conclude that it was not the Secretary's intent to retroactively apply the new regulations to unlawfully
strip parties, including Petitioner, of previously vested rights. Therefore, the new Part 1001 regulations
were not intended to apply to cases pending as of the date of their publication. I have previously addressed
this issue in depth in my decisions in Barranco at 16-27 and Livingston at 8-10. Administrative Law Judge
Steven T. Kessel has addressed this issue in depth in his decision in Saini at 11-19. For purposes of this
case, I incorporate the rationale in Barranco, Livingston and Saini that Petitioner's de novo hearing rights
would be substantially adversely affected and it would be manifestly unjust to apply the January 29, 1992
regulations.

On January 22, 1993, the Secretary published a clarification of the January 29, 1992 regulations (hereafter
referred to as clarification) that purported to make the regulations of Part 1001:

applicable and binding on the Office of Inspector General (OIG) in imposing and proposing
exclusions, as well as to Administrative Law Judges (ALJs), the Departmental Appeals Board (DAB), and
federal courts in reviewing the imposition of exclusions by the OIG (and, where applicable, in imposing
exclusions proposed by the OIG).

42 C.F.R. 1001.1; 58 Fed. Reg. 5618 (1993).

This clarification was to be applied to "all pending and future cases under this authority." 58 Fed. Reg.
5618 (1993). The Secretary waived the proposed notice and public comment period specified by the
Administrative Procedure Act pursuant to the exception for "interpretive rules, general statements of policy
or rules of agency organization, procedure or practice" at 5 U.S.C. 553(b)(A). Id. Moreover, the Secretary
stated that this clarification "does not promulgate any substantive changes to the scope of the January 29,
1992 final rule, but rather seeks only to clarify the text of that rulemaking to better achieve our original
intent". Id.
At the time of the promulgation of this clarifying regulation on January 22, 1993, the Secretary must be
assumed to have been aware of the DAB appellate panel's decision in Bassim, which was issued on May
28, 1992. More importantly, the DAB is delegated authority to make final interpretations of law on behalf
of the Secretary upon review of administrative law judge decisions. Gideon M. Kioko, M.D., DAB CR256
(1993). Thus, the DAB appellate panel was in effect speaking for the Secretary when it concluded that the
January 29, 1992 regulations were not to apply retroactively to cases pending prior to promulgation of the
new regulations. It gave its rationale as follows:

In our view, if the Secretary had intended to effect substantive changes in pending cases, this
intent would have been expressly stated since this effect would create administrative complications in the
appeals process, as well as potential prejudice for petitioners.

Bassim at 7.

The appellate panel in Bassim went on to say:

In sum, absent specific instructions in the Act or the preamble to the 1992 Regulations directing
that they apply to pending cases, we conclude that the Secretary did not intend to alter a petitioner's
substantive rights in such fundamental ways as suggested by the I.G. We also conclude that portions of the
1992 Regulations which change substantive law may permissibly be applied only to cases in which the
I.G.'s Notice of Intent to Exclude, Notice of Exclusion, or Notice of Proposal to Exclude is dated on or
after January 29, 1992.

Bassim at 8-9.

In this clarification, the Secretary did not expressly state his intent or provide specific instructions directing
that the new regulations apply retroactively to cases pending prior to January 29, 1992. Rather, the
Secretary emphasized that such regulation did not make "any substantive changes" to the "scope" of the
new regulations. 58 Fed. Reg. 5618. No other conclusion can be reached but that in promulgating the
January 22, 1993 clarification, the Secretary did not modify the appellate panel decision in Bassim, which
held that the January 29, 1992 regulations do not apply to cases pending prior to January 29, 1992. This
case was pending as of that date.

The January 22, 1993 clarification was published during the period that the posthearing briefing schedule
was in progress in this case. I specifically invited the parties to address the applicability and impact of the
new regulations on this case in their posthearing briefs. I deemed this especially necessary since the parties
had prepared for this hearing under the assumption that the case would be heard and decided under the
trustworthiness standard. It was not until several weeks after the December 10, 1992 hearing that the
January 22, 1993 clarification was published. Also, I convened a posthearing conference in which I
specifically asked the parties whether they wished to submit additional evidence in light of the clarification.
Both parties declined to offer additional evidence.

In his posthearing brief, the I.G. contends that I am bound to apply the clarification in my determination
because it specifically states in the clarification that it applies to all pending cases. The I.G. contends that
this is a pending case within the plain meaning of the word and accordingly takes the position that the
clarification is controlling in my determination in this case. I.G. Posthearing Brief at 5-6.

Since the January 29, 1992 regulations lacked retroactive effect, for the reasons stated in Bassim, they
could not have acquired such effect with subsequent textual clarifications that do not purport to modify the
scope of the January 29, 1992 regulations and which have been published without satisfying the procedures
necessary under the Administrative Procedure Act for effecting substantive changes. Accordingly, neither
the January 29, 1992 regulations nor the subsequent January 22, 1993 clarification is controlling upon my
determination of the length of the exclusion in this case, where the notice of exclusion was issued on
August 7, 1990, well in advance of the publication of the new regulations on January 29, 1992 or the
clarification on January 22, 1993. Instead, Petitioner's trustworthiness is the applicable standard for
evaluating the reasonableness of the length of the exclusion in this case.

B. The evidence of record establishes that Petitioner is suffering from a mental disorder which renders him
untrustworthy to provide medical care.

I have considered Petitioner's trustworthiness de novo in accordance with the remedial purpose of the
statute and the criteria approved by the DAB. The principal purpose served by an exclusion is to keep out
untrustworthy providers until such time as they can be trusted to deal with program funds and to properly
serve program beneficiaries and recipients. H.R. Rep. No. 393, 95th Cong. 1st Sess., pt. 2, reprinted in
1977 U.S.C.C.A.N. 3072. The evidence in this case persuades me that Petitioner is suffering from a mental
disorder which affects his trustworthiness to provide care. Although Petitioner is not culpable for his
mental disorder, it nevertheless renders him less than fully trustworthy to provide care.

The record shows that Petitioner received his medical degree from the University of Iowa in 1978 and that
he completed a residency program in radiology at the University of Iowa in 1981. FFCL 1. Petitioner was
appointed to the position of graduate fellow in the Radiology Department of the University of Iowa
Hospitals and Clinics for the period July 1, 1981 through June 30, 1982. FFCL 2. Petitioner did not stay
in this position for this entire period of time, but instead resigned from it on August 11, 1981. FFCL 3.
According to Petitioner, he was forced to resign from this position due to a radiation injury to his right
hand and forearm which occurred on July 23, 1981. Petitioner alleges that this radiation injury was an
assault against him perpetrated by his political opponents. P. Ex. 5 at 2-5; Petitioner's Posthearing Brief at
2-4.

Petitioner subsequently moved to Oregon, where he attended Bible school. I.G. Ex. 12 at 19. Petitioner
applied for a medical license in Oregon. The record does not contain any documents pertaining to this
license application. However, Petitioner stated that he informed Oregon licensing authorities that he was
the victim of politically motivated assaults at a hearing on his license application which was conducted in
April of 1982 and that the Oregon licensing authority subsequently denied his application for licensure. Tr.
163-164, 197-198.

In 1982 Petitioner moved to Alaska. He obtained a full license to practice medicine in Alaska, and he
worked for various medical groups as a radiology consultant. FFCL 6. On June 11, 1986, Paul E. Turner,
Ph.D., a clinical psychologist, filed in the Alaska Superior Court a Petition for Initiation of Involuntary
Commitment. Dr. Turner stated that Petitioner was demonstrating symptoms of paranoid schizophrenia,
that he was delusional, and that he demonstrated loose associative functioning. Dr. Turner expressed the
opinion also that Petitioner was a danger to others. FFCL 8.

Based on Dr. Turner's opinion, the Alaska Superior Court issued an ex parte order on June 11, 1986
finding that there was probable cause to believe that Petitioner was mentally ill and that he presented a
likelihood of causing serious harm to himself or others. The Alaska Superior Court ordered Alaska State
troopers to take Petitioner into custody and deliver him to the Alaska Psychiatric Institute for evaluation.
FFCL 9. Pursuant to this order, Petitioner was admitted to the Alaska Psychiatric Institute that same day
with a provisional diagnosis of schizophrenia, paranoid type, chronic. FFCL 10.

On June 12, 1986, Harold South, M.D., evaluated Petitioner. P. Ex. 12 at 5. Based on his evaluation, Dr.
South filed a Petition for 30-day Commitment that same day in which he stated that Petitioner provided
extensive evidence that he suffers from paranoid delusions. Dr. South expressed the view that Petitioner
was mentally ill. FFCLs 11, 12.

On June 13, 1986, the Alaska Superior Court held a hearing to inquire into Petitioner's mental condition.
Petitioner was present at the hearing and he was represented by counsel. FFCL 13. Pursuant to that
hearing, the Alaska Superior Court found that Petitioner was mentally ill, that he was likely to cause harm
to himself or others, and that he was gravely disabled. The court ordered that Petitioner be committed to
the Alaska Psychiatric Institute for a period not to exceed 30 days. FFCL 14.

Petitioner remained at the Alaska Psychiatric Institute until July 10, 1986. According to the Alaska
Psychiatric Institute's discharge summary report, during his stay at this facility Petitioner expressed
paranoid delusions and the belief that he was a political prisoner. FFCL 15. The discharge summary
report reveals that Petitioner's treatment team was concerned about the serious degree of Petitioner's
delusions, the potential that Petitioner's paranoid perception of the world would cause him to act out
violently, and the lack of insight Petitioner displayed about his mental illness. I.G. Ex. 12 at 6. Based on
these concerns, William A. Worrall, M.D., petitioned for a 90-day commitment on July 9, 1986. However,
at Petitioner's request, he was allowed to transfer voluntarily to Charter North Hospital, a private
psychiatric hospital, for further treatment on July 10, 1986, and the petition for a 90 day commitment was
dropped. FFCL 16.

At the time of his discharge from the Alaska Psychiatric Institute, Dr. Worrall opined that Petitioner's
condition did not support the diagnosis of schizophrenia, and he changed the diagnosis of Petitioner's
condition to chronic paranoid disorder. I.G. Ex. 12 at 6. He opined that the prognosis was "poor, in view
of the patient's diagnosis and his lack of insight". I.G. Ex. 12 at 7. Petitioner was not on any medication at
the time of his discharge, but Dr. Worrall recommended that various medications be tried before giving up
on the possibility that medication might help reduce Petitioner's paranoia. I.G. Ex. 12 at 8.

Petitioner was treated at Charter North Hospital until August 16, 1986 when he was discharged. FFCL 18.
Petitioner testified that he has not sought or received any further psychiatric treatment since his release
from Charter North Hospital in 1986. FFCL 43.

On October 27, 1986, the State licensing authority in Alaska automatically suspended Petitioner's license to
practice medicine in Alaska based upon the Alaska Superior Court's finding that Petitioner suffered from a
grave mental disability. FFCL 19. In addition to being licensed to practice medicine in Alaska, Petitioner
was also licensed to practice medicine in Hawaii and Iowa. Tr. 196. On October 21, 1987, the State
licensing authority in Hawaii revoked Petitioner's license to practice medicine in Hawaii based on the
Alaska Superior Court's findings. FFCL 20. In addition, on March 14, 1988, the State licensing authority
in Iowa issued a decision revoking Petitioner's license to practice medicine in Iowa on the same grounds.
The Iowa licensing authority found that Petitioner was unable to practice medicine with reasonable skill
and safety due to his mental illness. FFCL 24.

Petitioner subsequently sought to reinstate his medical license in Iowa. On November 21, 1991, the Iowa
licensing authority denied Petitioner's application for reinstatement of his medical license. The Iowa
licensing authority concluded that Petitioner had failed to establish that the basis for the revocation of his
license no longer existed. FFCL 34. Noting that Petitioner had not had any psychiatric evaluations or
treatment since August 1986, the licensing authority stated that the only evidence which Petitioner
produced concerning his mental condition was his own personal opinion. The licensing authority found
that this was insufficient to establish that it would be in the public interest for Petitioner's license to be
reinstated. I.G. Ex. 9. 6/

Petitioner subsequently obtained an evaluation of his mental condition from the Veterans Administration
Medical Center in San Diego, California. In a report dated October 19, 1992, Ann Garland, M.S., a
psychology intern, and Beth Kalal, Ph.D., a supervising clinical psychologist, described in detail the results
of their evaluation. I.G. Ex. 12; Tr. 32. In addition, Ms. Garland and Dr. Kalal presented extensive
testimony at the December 10, 1992 hearing regarding the results of their evaluation of Petitioner's mental
condition.

Dr. Kalal testified that her evaluation of Petitioner did not reveal any evidence that the Petitioner suffered
from schizophrenia, but that it strongly suggested that Petitioner suffered from a paranoid delusional
disorder and that the delusions were of a persecutory type. Tr. 40, 43-44. Dr. Kalal stated also that
Petitioner's delusional disorder is a psychosis and that a psychosis exists when a person's perception of
reality is not congruent with that reality. Tr. 54.

In addition, Dr. Kalal stated that her diagnosis was a "rule out" diagnosis. She explained that a "rule out"
diagnosis means that the evaluator strongly suspects that the diagnosis is applicable, but that there is not
enough confirming information to justify a firm diagnosis. Tr. 48. Dr. Kalal stated also that the sources of
information that she used in making her assessment of Petitioner's mental condition were the personal
report of Petitioner, his responses to the testing instruments, and observations of him making those
responses. Tr. 37. Dr. Kalal explained that she made a "rule out" diagnosis rather than a firm diagnosis in
this case because she did not have information from sources other than Petitioner to confirm the diagnosis.
She suggested that had she been fully aware of Petitioner's medical history and the findings of the Alaska
Superior Court, she would have made a firm diagnosis of a delusional disorder instead of a "rule out"
diagnosis. Tr. 74.

Dr. Kalal described the results of the psychological tests performed on Petitioner in detail. She stated that,
based on her interpretation of the test results, she did not believe that Petitioner was competent to practice
medicine. Tr. 58, 64. In addition, she opined that Petitioner would benefit from a course of treatment
involving anti-psychotic medication and psychotherapy. Tr. 66.

According to Dr. Kalal, studies show that only a small percentage of people with delusional disorders
recover completely. Tr. 42. Dr. Kalal stated that the prognosis for recovery is poor for an individual
suffering from a delusional disorder who denies the existence of the condition and does not obtain
treatment for it as a result. Tr. 45. Dr. Kalal testified that, based on her assessment of Petitioner, there is
no evidence that Petitioner understands that he has mental problems. Tr. 65.

The evidence in this case establishes that Petitioner is suffering from a mental illness which impairs his
ability to practice highly complex skills which involve interpersonal relationships. Tr. 64. Although
Petitioner is not responsible for his mental condition, the evidence shows that his mental disorder
nonetheless affects his trustworthiness to provide care. Based on my evaluation of the evidence, I conclude
that Petitioner poses a risk to program beneficiaries and recipients as a result of his mental illness.

In assessing Petitioner's trustworthiness to participate in the Medicare and Medicaid programs, I rely on the
Alaska Superior Court's 1986 findings that Petitioner was mentally ill and that, as a result of this mental
illness, he was disabled. The record contains credible medical evidence which supports the Alaska
Superior Court's findings. Dr. South examined Petitioner the day before the hearing. He found that
Petitioner suffered from paranoid delusions and concluded that he was mentally ill. At the time Petitioner
was transferred from the Alaska Psychiatric Institute to Charter North Hospital on July 10, 1986, Dr.
Worrall diagnosed a chronic paranoid disorder and recommended further treatment.

Petitioner's lack of trustworthiness is evidenced also by the fact that he is not licensed to practice medicine
in any State at present. FFCL 37. Based on the Alaska Superior Court's finding that Petitioner was
disabled as a result of his mental illness, the licensing authorities in the States of Alaska, Hawaii, and Iowa
either suspended or revoked Petitioner's licenses to practice medicine in those States. These licensing
authorities uniformly concluded that, for reasons bearing on his professional competence and performance,
Petitioner was not sufficiently trustworthy to be allowed to continue to practice medicine. The findings of
these licensing authorities create the presumption that Petitioner is untrustworthy. An individual who loses
a medical license for reasons bearing on professional competence or performance is presumed to be
untrustworthy and is potentially harmful to program beneficiaries and recipients. That presumption is the
basis for Petitioner's exclusion which is designed to protect program beneficiaries and recipients. Narinder
Saini, M.D., DAB 1371 at 6 (1992).

As recently as November 1991, following review of Petitioner's case, the licensing authority in Iowa
refused to reinstate Petitioner's medical license on the grounds that Petitioner failed to establish that the
basis for the revocation of his license no longer existed. In addition, Petitioner's attempts to obtain
licensure in States other than Alaska, Hawaii, and Iowa have thus far been unsuccessful. Tr. 196-199.

The record is devoid of persuasive evidence showing that Petitioner has recovered from his disabling
mental illness. To the contrary, the record contains convincing affirmative evidence showing that
Petitioner continues to suffer from the delusional paranoid disorder which was diagnosed in 1986.

At the time Petitioner was admitted to the Alaska Psychiatric Institute on June 11, 1986, his condition was
provisionally diagnosed as chronic schizophrenia, paranoid type. However, this diagnosis was
subsequently changed at the time of his transfer to Charter North Hospital on July 10, 1986. Based on
observations of Petitioner over the course of a month, Dr. Worrall determined that Petitioner's delusional
symptoms did not support the diagnosis of schizophrenia, but instead supported a diagnosis of chronic
paranoid disorder.

Petitioner's psychiatric evaluation at the Veterans Administration Medical Center in 1992 resulted in
strikingly similar diagnostic impressions. Dr. Kalal, the clinical psychologist who supervised the 1992
evaluation, stated that her assessment of Petitioner did not support a diagnosis of schizophrenia, but instead
suggested that Petitioner suffered from a paranoid delusional disorder. Dr. Kalal reached her conclusions
without the benefit of being aware of Petitioner's medical history at the Alaska Psychiatric Institute. The
fact that Dr. Kalal independently had a diagnostic impression of Petitioner's condition in 1992 similar to
that formed by Dr. Worrall in 1986 is strong evidence that the diagnosis is correct and that Petitioner
continues to suffer from the diagnosed condition.

None of the medical evidence shows that Petitioner can be trusted to practice medicine safely. To the
contrary, Dr. Kalal stated specifically and unequivocally that Petitioner is not competent to practice
medicine.

The expert evidence shows also that Petitioner's disorder is unlikely to resolve in the near future. Dr. Kalal
testified that studies show most individuals suffering from delusional disorders do not recover. Both Dr.
South and Dr. Kalal testified that the prognosis for recovery is particularly doubtful in cases where the
individual suffering from the disorder does not recognize the existence of the disorder and does not obtain
treatment for it. FFCL 42. Throughout this proceeding, Petitioner has vigorously and consistently denied
that he has ever suffered from a mental disability. Petitioner's lack of insight regarding his mental disorder
was specifically noted by Dr. Worrall and Dr. Kalal. Petitioner has not received any psychiatric treatment
since 1986 when he was discharged from Charter North Hospital, and he has not expressed any intention to
seek treatment in the future. In view of Petitioner's denial of his mental disorder and his refusal to obtain
treatment for it, I find that the medical evidence establishes that the prognosis for Petitioner's recovery
from his condition is poor.

C. Petitioner has not provided any credible evidence to rebut the evidence showing that he is
untrustworthy.

Petitioner has not provided any credible evidence to rebut the overwhelming evidence that he suffers from
a mental disorder which renders him less than fully trustworthy to provide medical care. Petitioner's
principal challenge to the exclusion has consisted principally of unsubstantiated denials that he has a
mental disorder and unsubstantiated allegations that the 1986 commitment hearing, the decision by the
State of Alaska to suspend his medical license, and the decision by the State of Iowa to revoke his medical
license were politically motivated acts of malice which were designed to intentionally destroy his career
and credibility without due process of law. Petitioner's Posthearing Brief at 12. Such unsupported
assertions are not sufficient to overcome the evidence showing that Petitioner is suffering from a mental
disorder which affects his ability to provide trustworthy care.

Petitioner testified that after he moved to Alaska in 1982, his conscience began to bother him because he
did not believe that he had fully discharged his obligation under his Naval oath of office to report incidents
which might represent a threat to his country, such as an attack on a Naval officer. In an attempt to clear
the record, Petitioner stated that he reported to Alaska State troopers two politically motivated assaults
against him which occurred in Iowa in 1981. These incidents included efforts by his political opponents to
prevent him from meeting with his lawyer on February 20, 1981 and the radiation injury which occurred
on July 23, 1981. Petitioner testified that he was the victim of further assaults after he moved to Alaska.
These assaults allegedly occurred in the form of shotgun blasts, vandalism, radiation exposure, and an
incident involving possible poisoning from drinking a can of root beer. Petitioner stated that he
documented these assaults in the form of affidavits and reported them to Alaska State troopers. Tr. 164-
170. Petitioner contends that his involuntary commitment to the Alaska Psychiatric Institute in 1986 was
an effort by his political opponents to cover up the assaults which he reported to the Alaska State troopers.
Tr. 8-9.

Petitioner contends that he was denied his basic legal rights at the time of his involuntary commitment to
the Alaska Psychiatric Institute. Petitioner asserts that he was the victim of police brutality when Alaska
State troopers took custody of him against his will prior to his commitment hearing, that he was denied the
opportunity to call a friend or obtain an attorney when he was taken into custody, that he was denied his
right to a 72-hour evaluation period prior to his commitment, that he was provided with inadequate
representation at the commitment hearing, and that he was drugged with medication to which he claimed
he had previously had an allergic reaction. Petitioner argues that the undue haste of the commitment
proceedings and the denial of his basic due process rights suggest malice on the part of government
authorities and are evidence that his involuntary commitment was motivated by a desire by government
authorities to destroy his testimony regarding the politically motivated assaults against him. Petitioner's
Posthearing Brief at 28-31; Tr. 8-10.

Petitioner points out also that the commitment hearing occurred only a few days after his wife initiated
divorce proceedings, and he speculates that she might have been involved in a conspiracy to deprive him of
his property which was valued at approximately $150,000. Petitioner's Posthearing Brief at 6, 26, 31.

I am not persuaded by Petitioner's argument. The record is devoid of credible evidence to support
Petitioner's claim that his involuntary commitment stemmed from a political conspiracy to damage his
career or that Petitioner's former wife was involved in a conspiracy to deprive him of his property. The
record shows that the Alaska Superior Court made its findings that Petitioner was mentally incompetent
after conducting an evidentiary hearing. Petitioner was present at the hearing and he was represented by
legal counsel. However, even assuming that there is some merit to Petitioner's argument and that there
were in fact some violations of Petitioner's legal rights in the manner in which he was taken into custody by
Alaska State troopers or in the way the commitment hearing was conducted, the fact remains that the
Alaska Superior Court's findings are supported by credible expert medical opinion evidence. Petitioner has
not brought forward any medical evidence to rebut the Alaska Superior Court's findings. Absent such
evidence, I rely on the Alaska Superior Court's findings.

Petitioner attempts to rebut the Alaska Superior Court's findings by submitting documents which he alleges
prove the fact that he was a victim of politically motivated assault, battery, and intimidation by gunfire.
Petitioner's Posthearing Brief at 11; P. Ex. 10. Even if I were to accept that the documents submitted by
Petitioner show that he was the victim of assaults and vandalism to his property in Alaska, there is no
evidence showing that this was part of a political conspiracy or that it was done in retaliation for the fact
that Petitioner attempted to report incidents related to other assaults. Moreover, Dr. South reviewed these
documents and testified at the December 10, 1992 hearing that had he been able to review these documents
at the time he evaluated Petitioner in 1986, they would not have changed his opinion that Petitioner was
suffering from a mental illness. Tr. 126. 7/

Petitioner contends that the State of Iowa's decision to revoke his medical license is defective because he
was denied due process by the Iowa licensing authority. According to Petitioner, the State of Iowa
arranged his license revocation hearing while Petitioner was a resident of Alaska and at a time that it was
impossible for Petitioner to attend the hearing because of legal and economic restraints. Again, Petitioner
alleges that this denial of due process is evidence that the State of Iowa is part of a political conspiracy to
damage him. Petitioner argues that the denial of his right to attend the hearing which formed the basis of
the revocation of Petitioner's medical license in Iowa violates his constitutional rights to equal protection
and due process. October 4, 1990 Response and Notice of Prehearing Conference at 1-2.

Petitioner's argument is without merit. I do not find any evidence showing that the State of Iowa was
involved in a political conspiracy to harm Petitioner. Indeed, the record shows that the Iowa licensing
authority afforded Petitioner ample procedural safeguards in conducting its proceedings.

The Iowa licensing authority initiated the license revocation proceedings after it became aware of the State
of Alaska's decision to suspend Petitioner's license. It became aware of Alaska's decision in the course of
its routine monitoring of disciplinary actions in other States. FFCL 21. On December 16, 1987, a hearing
was held before a three-member panel of the Iowa licensing authority which resulted in a proposed
decision to revoke Petitioner's medical license. While Petitioner was not present at that hearing, he was
notified of it and he was given the opportunity to appear. FFCL 22.

The Iowa licensing authority afforded Petitioner appeal rights, which he exercised. On March 3, 1988, a
hearing was held before the full membership of the Iowa licensing authority. This hearing resulted in a
final decision revoking Petitioner's license. While Petitioner did not appear at that hearing in person, he set
forth his position in written arguments and supporting documents which were considered by the licensing
authority. FFCLs 23-24. Moreover, Petitioner did appear in person at a 1991 hearing on his application to
reinstate his medical license. FFCL 34. Thus, Petitioner was able to fully present his case before the Iowa
licensing authority at that time.

Petitioner attacks the motives of the health care professionals who authored written evaluations about his
mental condition at the time of his involuntary commitment in 1986, and he contends that political malice
motivated them to make detrimental statements about his mental health. Petitioner's Posthearing Brief at
24. In addition, he contends that the report of his condition by Dr. Kalal and Ms. Garland was an attempt
to cover up the errors of the other health care professionals who offered the opinion that he was mentally
ill. He contends that Dr. Kalal's assessment is unreliable because she spent only 45 minutes with him, they
were uncomfortable with each other, and she did not consider factors such as fatigue, insomnia, and his
recent exposure to propane gas in making her findings. He argues also that since Ms. Garland was working
under the direction of Dr. Kalal, she was limited in her ability to make an independent judgment of
Petitioner's condition. Petitioner pointed out that the report submitted by Dr. Kalal and Ms. Garland
contains errors in his name, age, and birthdate, and he argues that this suggests that Dr. Kalal and Ms.
Garland are incompetent. Petitioner asserts also that it is possible that Dr. Kalal may have been motivated
by financial incentives to offer an opinion unfavorable to him. Petitioner's Posthearing Brief at 32-35.

There is no evidence to substantiate Petitioner's assertions that the mental health professionals who
evaluated him were motivated by political malice or financial incentives to express the opinion that
Petitioner has a mental disorder. There is no evidence that Dr. Kalal attempted to cover up the errors of
other mental health professionals as Petitioner suggests, particularly since Dr. Kalal and Ms. Garland
testified that they were not even aware of the evaluations of other professionals at the time that they
examined Petitioner. Tr. 74, 98. In fact, Dr. Kalal expressed the view that Petitioner's accusations that she
was involved in a conspiracy against him gave her cause for concern because it was an example of
psychotic reasoning and a manifestation of his mental disorder. Tr. 65.

I have reviewed the expert evidence and I find it to be credible. In particular, I find the report of Dr. Kalal
and Ms. Garland to be thorough and supported by convincing rationale. While Dr. Kalal met with
Petitioner for 45 minutes, Ms. Garland met with him from one to two hours on five different occasions and
she administered an exhaustive battery of tests. Tr. 92; P. Ex. 12. Dr. Kalal was actively involved in
determining what tests to administer and in the interpretation of the test results. Tr. 36, 108. Ms. Garland
testified that she was aware that Petitioner mentioned that he was a bit tired at times during the evaluation.
However, she stated that she gave him opportunities to take breaks, which he declined. Tr. 100. Ms.
Garland stated that, based on her observations, she did not believe Petitioner's level of fatigue to be
clinically significant. Tr. 94-95. While it is regrettable that Dr. Kalal's and Ms. Garland's report misspelled
Petitioner's name and erroneously reported his age and birthdate, these errors are not serious enough to
undermine the credibility of the report in its entirety.

Petitioner submitted exhibit evidence showing that he graduated from medical school with a "near honors"
in psychiatry. P. Ex. 6. He argues that his opinion that he is not suffering from a mental disorder should
be given weight in light of his medical training. Petitioner's Posthearing Brief at 73; Tr. 67.

It is undisputed that Petitioner is a highly intelligent individual. 8/ It is also undisputed that Petitioner has
earned a medical degree and that he performed well in his course work in the field of psychiatry in medical
school. I recognize Petitioner's intelligence and his professional achievements. However, I give his
opinion regarding his mental health status little weight because Petitioner's personal involvement prevents
him from forming a professionally objective, unbiased opinion about his condition. While Petitioner has
repeatedly expressed the opinion that he does not have a mental disorder, the record is devoid of any expert
opinions by qualified professionals which support Petitioner's opinion. Petitioner's opinion of his own
condition alone, without additional support, is not sufficient to outweigh the credible expert evidence in
this case showing that Petitioner suffers from a mental disorder.

Petitioner argues that he is trustworthy because he is a "Christian humanitarian". He states that he has
sworn to serve humanity as a medical doctor, that he is a former Bible student, and that he has never
threatened or injured anyone in a meaningful way. Petitioner's Posthearing Brief at 23, 24, 82.

Throughout this proceeding, Petitioner has been polite and cooperative. In addition, there is no evidence of
record showing that Petitioner has physically harmed another individual. However, section 1128(b)(4)(A)
of the Act does not require a finding of actual harm to a patient as a precondition to an exclusion. Leonard
R. Friedman, M.D., DAB 1281 at 9-10 (1991). Rather, the essential element is revocation of a provider's
license for reasons bearing on professional competence or performance. An individual or entity losing a
license for reasons bearing on professional competence or performance is presumed to be potentially
harmful to program beneficiaries and recipients. In addition, the medical evidence in this case shows that
Petitioner has a mental disorder which might affect his judgment in a way which would prevent him from
providing competent, adequate, or appropriate care to patients. Exclusions under section 1128(b)(4) of the
Act are intended to protect beneficiaries and recipients from the threat of such substandard care.

D. The remedial purpose of the Act requires me to modify the exclusion in this case.

In this case, the I.G. effectively imposed an indefinite exclusion against Petitioner by excluding him until
he obtains a license to practice medicine in Iowa. The Iowa licensing authority did not specify a date when
Petitioner would be entitled to have his license reinstated. It is conceivable that the Iowa licensing
authority might never determine to reinstate Petitioner's medical license. Moreover, Petitioner no longer
resides in Iowa and, at this point in time, neither Petitioner or the State of Iowa have any interest in
pursuing possible reinstatement of his license, except for the requirements of the I.G.'s exclusion.

In past cases under section 1128(b)(4) of the Act, the I.G. has sought and been upheld by appellate panels
of the DAB in obtaining exclusions of an indefinite duration based on relicensure in a State where the
license was revoked, suspended, or surrendered. See, Leonard R. Friedman, M.D., DAB 1281 (1991) and
John W. Foderick, M.D., DAB 1125 (1990). As the appellate panel concluded in Friedman, such a remedy
is reasonable since that State, in exercising its decision on relicensure, would act in a careful and prudent
manner in the best interest of its citizens. Friedman, DAB 1281, at 7.

In this case, Petitioner does not currently reside in the State of Iowa and he does not have a medical
practice there. Petitioner's May 13, 1992 motion to subpoena witnesses at 1-2. Petitioner asserts that he
has signed up for the National Resident Matching Program with the intent of obtaining additional residency
training in diagnostic radiology. He states that obtaining a license in the State of Iowa does not currently
pertain to his continuing medical education or medical practice plans, and he asks that he be "protected"
from being required to obtain a license in Iowa as a condition for reinstatement into the Medicare and
Medicaid programs. Petitioner's Posthearing Brief at 79-80.

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 Iowa. At present, the State of Iowa has little
interest in Petitioner. Petitioner does not live there, and the citizens of Iowa are not presently his patients.
Petitioner states that he would like the freedom to live and practice in a State other than Iowa for reasons
that are unrelated to his trustworthiness. In light of this, it is unreasonable to require that Petitioner obtain
a medical license in Iowa as a condition for terminating his exclusion period. Walter J. Mikolinski, Jr.,
DAB 1156 (1990). In order for an exclusion so conditioned to be reasonable, the evidence would have to
demonstrate that there is little or no possibility that Petitioner would become trustworthy unless and until
he changed his mind and chose to return to Iowa. The I.G. has presented no such evidence.

On the other hand, an exclusion plainly is warranted by the evidence. A court of competent jurisdiction
has found Petitioner to be mentally disabled. This has resulted in either the suspension or revocation of
Petitioner's license in three States, and Petitioner is not currently licensed in any State. The medical
evidence shows that Petitioner continues to suffer from a mental disability which disqualifies him from
practicing medicine and that this condition is not likely to resolve in the near future. In view of the
indefinite duration of Petitioner's disabling medical condition, I find that an indefinite exclusion is
reasonable. However, I modify the I.G.'s exclusion to excluding Petitioner until any State licensing
authority grants Petitioner a medical license without restriction after conducting a full review of all the
legal and factual issues which were before the State of Iowa and after determining that Petitioner's mental
disorder has resolved sufficiently to enable him to practice medicine competently.

The legislative history shows that, in enacting section 1128(b)(4)(A) of the Act, Congress sought to protect
Medicare and Medicaid patients from the phenomenon of a doctor losing his license in one State and then
using a license in another State to continue or reestablish participation in federally-funded health care
programs. S. Rep. No. 109, 100th Cong., 1st Sess. 1, reprinted in 1987 U.S.C.C.A.N. 684. I.G.
Posthearing Brief at 4. I recognize that modifying the exclusion in this case to make it coterminous with
Petitioner obtaining a medical license from any State raises concerns about forum shopping expressed in
the Act's legislative history.

I have addressed those concerns by fashioning an exclusion which incorporates the requirement that the
State which grants Petitioner a license must conduct a full review of all the issues which were before the
State of Iowa and make an affirmative determination that Petitioner's mental disorder has resolved
sufficiently to enable Petitioner to be a competent medical practitioner. 9/ This requirement assures that
Petitioner will not be entrusted to treat program beneficiaries and recipients until he has established to the
satisfaction of a State licensing authority that he no longer suffers from a mental disorder which interferes
with his ability to be a competent medical practitioner. Thus, the conditions of the modified exclusion
address the same remedial considerations embodied in the Act. 10/

In addition, at the expiration of the exclusion period, Petitioner may apply for, but is not guaranteed,
reinstatement into the Medicare and Medicaid programs pursuant to Subpart F of Part 1001 of the 1992
regulations. At that time, the I.G. will have the opportunity to independently determine whether
Petitioner's mental disorder has resolved sufficiently to allow him to be a trustworthy provider. The length
of the exclusion dictates only when a provider is allowed to apply for reinstatement into the program. The
I.G. is not required to reinstate a provider at the end of the exclusion period. In this case, the fact that the
I.G. is not required to defer to a State licensing authority's determination that Petitioner is trustworthy in
making its reinstatement determination is an additional protection for the Medicare and Medicaid programs
and further dissipates congressional concerns about forum shopping.

III. In the alternative, were I to conclude that the regulations published on January 29, 1992 establish a
standard for adjudicating the length of the exclusion in this case, then I would find that the I.G.'s exclusion
until Petitioner obtains a medical license in Iowa is mandated by 42 C.F.R. 1001.501(b).

The I.G. argues that the new regulations are binding on me as of the effective date, January 29, 1992, and
that they require me to affirm the coterminous exclusion imposed on Petitioner. I.G. Posthearing Brief at
4-7, 10-12.

I do not find that the new regulations apply to this or other cases in which the I.G. had imposed an
exclusion prior to January 29, 1992. However, in order to expedite a final resolution of all potential issues
in this case, I will apply the criteria specified in 42 C.F.R. 1001.501 to the facts of this case. Were I to
conclude that I am required to apply this criteria as standards for adjudicating the length of the exclusion, I
would affirm the I.G.'s exclusion.

The Part 1001 regulations require, at 42 C.F.R. 1001.501(b), that the minimum length of exclusions
imposed and directed by the I.G. pursuant to section 1128(b)(4) of the Act be coterminous with the State
license suspensions or revocations on which those exclusions are based. Exceptions to this requirement are
provided for at 42 C.F.R. 1001.501(c). Under subsection (1) of 42 C.F.R. 1001.501(c), an exclusion
imposed pursuant to section 1128(b)(4) of the Act may be for a period of time less than that prescribed by
42 C.F.R. 1001.501(b) if, prior to the I.G.'s notice of the exclusion, other licensing authorities, having
been apprised of the licensing action upon which the exclusion is based, grant the provider a license or
decide to take no adverse action against a provider's existing license. In addition, subsection (2) of 42
C.F.R. 1001.501(c) provides that the I.G. will consider a request for early reinstatement if an excluded
provider fully and accurately discloses the circumstances surrounding the license revocation to another
State and that State either grants the provider a new license or takes no adverse action against an existing
license.

In this case, Petitioner has neither contended nor proved that he qualifies for the exceptions contained in 42
C.F.R. 1001.501(c). To the contrary, the evidence establishes that Petitioner is not currently licensed in
any State. FFCL 37. Therefore, the regulation mandates that the exclusion in this case at a minimum be
coterminous with the indefinite license revocation imposed by the Iowa licensing authority.

Section 1001.501(b)(2) of the regulations sets forth factors which may be considered as a basis for
lengthening the minimum period of exclusion. In this case, the I.G. is not seeking a longer period of
exclusion than the minimum period of exclusion.

In view of the foregoing, I find that were I to apply the regulatory criteria specified in 42 C.F.R.
1001.501(b) to this case, I would be required to uphold the I.G.'s exclusion.

CONCLUSION

I conclude that the I.G. had authority to impose and direct an exclusion against Petitioner pursuant to
section 1128(b)(4)(A) of the Act. I conclude also that regulations at 42 C.F.R. Part 1001, published on
January 29, 1992, do not apply to this case to establish a standard for adjudicating the length of the
exclusion. In addition, I conclude that the remedial purpose of the Act is satisfied by the following
exclusion: Petitioner is excluded until any State licensing authority grants him a medical license without
restriction after conducting a full review of all the legal and factual issues which were before the State of
Iowa and after determining that Petitioner's mental disorder has resolved sufficiently to enable him to
practice medicine competently. 11/

In the alternative, were I required to apply the regulatory criteria specified in 42 C.F.R. 1001.501(b) to
this case, I would uphold the I.G.'s exclusion.


Edward D. Steinman
Administrative Law Judge

1. "State health care program" is defined by section 1128(h) of the Act to cover three types of federally
assisted programs, including State plans approved under Title XIX (Medicaid) of the Act. Unless the
context indicates otherwise, I use the term "Medicaid" hereafter to represent all State health care programs
from which Petitioner was excluded.

2. My prehearing rulings on the parties' discovery motions and requests for subpoenas are chronicled in
detail in the following documents: July 1, 1992 Ruling, October 15, 1992 Order and Notice of Hearing,
and December 3, 1992 Summary of Prehearing Conferences and Notice of Location of Hearing.

3. The exhibits and the transcript of the hearing will be referred to as follows:

Hearing Transcript Tr. (page)

I.G. Exhibits I.G. Ex. (number at page)

Petitioner Exhibits P. Ex. (number at page)

4. These regulations can be found at 42 C.F.R. 1001 et seq., 57 Fed. Reg. 3298 et seq.

5. Moreover, 42 C.F.R. 1001.501 limits my consideration of aggravating factors to those specifically
mentioned therein, and so could, under the appropriate scenario, impair the I.G.'s ability to demonstrate
that a petitioner is deserving of a lengthy exclusion.

6. The record shows that Petitioner has applied for medical licensure in the State of California. On June
23, 1992, the State of California petitioned the California licensing authority to deny Petitioner's
application on the grounds that his ability to practice medicine is impaired by mental illness. FFCL 36.

7. Petitioner argues also that he is disadvantaged in this proceeding because the affidavits he wrote
documenting the assaults against him prior to his commitment hearing are not part of the evidence of
record before me. While a subpoena was issued for these affidavits in this proceeding, the State of Alaska
was unable to locate them. Petitioner suggests that these documents were intentionally lost or destroyed by
authorities in Alaska in an effort to harm him. Petitioner's Posthearing Brief at 22, 31, 45, 61-62. There is
no evidence that the State of Alaska intentionally refused to make these documents available in this
proceeding in an effort to hurt the presentation of Petitioner's case. Moreover, the Alaska Superior Court
was privy to these documents in 1986 and that tribunal nonetheless found clear and convincing evidence
that Petitioner was mentally disabled.

8. Dr. Kalal reported that the results of a standardized test of intelligence reveal that Petitioner is
functioning in the superior range of intellectual ability. P. Ex. 12 at 6.

9. Any such State action would have to include the review of the findings of the Alaska Superior Court
and current evidence of Petitioner's mental status. It is anticipated that any finding that he has recovered
from his illness first would be predicated on a determination that he recognized the significance of his
mental condition and sought treatment that led to his recovery.

10. The Secretary, at 42 C.F.R. 1001.501(c)(2) of the 1992 regulations pertaining to license revocation
or suspension, provides for the consideration of early reinstatement in circumstances similar to those set
forth in my modification of Petitioner's exclusion. Although I am not bound to apply the criteria of the
Part 1001 regulations as standards for adjudicating the length of the exclusion in this case, it is instructive
that, in enacting these regulations, the Secretary recognized the harshness of a narrow indefinite exclusion
of the type originally directed and imposed against Petitioner and adopted an approach similar to the one I
have taken in modifying the exclusion.


11. Throughout this proceeding, Petitioner has shown strong motivation to continue his medical
profession. There is no doubt that he possesses an exceedingly high intellect. Unfortunately, to date he has
failed to recognize the existence, extent and significance of his mental illness. Furthermore, this record is
replete with Petitioner's continued paranoid ideation. However, other than his mental illness, the record is
devoid of any evidence that would suggest that Petitioner could not carry out his responsibilities as a
physician in a competent and professional manner. Therefore, I strongly urge Petitioner to come to grips
with his illness and seek out treatment in an attempt to regain his competency to practice medicine. I have
crafted the exclusion to provide him with flexibility in pursuing his medical licensure in any State where he
is able to establish, after consideration of his mental illness and license revocation, that he has regained an
ability to practice medicine. There are adequate provisions in the terms for ending the exclusion and in the
reinstatement process to ensure that the Medicare and Medicaid programs will be protected should
Petitioner remain a threat from his mental illness.