Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Joseph Weintraub, M.D., Petitioner,
- v. -
The Inspector General.
DATE: February 14, 1994
Docket No. C-93-029
Decision No. CR303
DECISION
On October 15, 1992, the Inspector General (I.G.) notified Petitioner that
he was being excluded from
participation in the Medicare and State health care programs for three years.
1/ The I.G. told Petitioner that
he was being excluded under section 1128(b)(3) of the Social Security Act (Act),
based on Petitioner's
conviction of a criminal offense related to the unlawful manufacture, distribution,
prescription, or
dispensing of a controlled substance.
Petitioner requested a hearing and the case was assigned to me. I conducted
a prehearing conference by
telephone on January 12, 1993. During that conference, I established a schedule
for discovery and
prehearing exchanges and scheduled an in-person hearing to begin on March 11,
1993.
On January 22, 1993, during the prehearing phase of the proceedings, the Secretary
published regulations
containing provisions described as a clarification of the exclusion regulations
published January 29, 1992.
By letter dated February 3, 1993, I invited the parties to file prehearing briefs
on the question of the impact
of these clarifying regulations on this case.
Petitioner's counsel subsequently requested that the March 11, 1993 hearing
be rescheduled in order to
provide additional time for him to prepare Petitioner's case. In the absence
of objection from the I.G., I
canceled the March 11, 1993 hearing.
I held a hearing in this matter in San Francisco, California on August 31,
1993 and in Santa Cruz,
California on September 1, 1993. Prior to the hearing, Petitioner's counsel
informed me that he was
withdrawing from this case, and Petitioner appeared at the hearing pro se. The
parties subsequently filed
posthearing briefs and reply briefs.
I have considered the evidence of record, the parties' arguments, and the applicable
law and regulations. I
conclude that the I.G.'s determination to exclude Petitioner for three years
is excessive, and that Petitioner's
period of exclusion should end upon the effective date of this decision. 2/
Such period of exclusion is
reasonable under the circumstances of this case.
ADMISSION
Petitioner does not dispute that he was convicted of a criminal offense within
the meaning of section
1128(b)(3) of the Act. He admits that the I.G. has the authority to exclude
him from participating in the
Medicare and Medicaid programs pursuant to section 1128(b)(3) of the Act. May
13, 1993 Order and
Notice of Hearing at 2; Tr. 6 - 7. 3/
ISSUE
The issue in this case is whether it is reasonable to exclude Petitioner for a period of three years.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner is a physician who specializes in psychiatry. Tr. 235 - 236.
2. On June 15, 1987, a pharmacy manager told an investigator with the California
Attorney General's
Office that she knew of six of Petitioner's patients who brought in prescriptions
for medications to be filled
on a regular basis and that these six individuals appeared to be substance abusers.
I.G. Ex. 1 at 1.
3. Three of the six individuals mentioned by the pharmacy manager had a history
of drug or narcotics
violations. I.G. Ex. 1 at 2.
4. The California Attorney General's Office commenced an undercover investigation
of Petitioner's
prescribing practices on November 13, 1987. I.G. Ex. 1 at 2 - 3.
5. Petitioner issued prescriptions for codeine or vicodin to five different
undercover operators, who posed
as patients, on eleven different occasions during the period from February 16,
1988 through April 19,
1990. In some of these instances, the codeine was combined with tylenol. In
some of these instances, the
operator posed as a Medicaid patient. I.G. Ex. 1.
6. Codeine and vicodin are controlled substances. I.G. Ex. 3.
7. Codeine and vicodin are analgesic narcotics which are used for the treatment of pain. Tr. 50, 55.
8. The undercover operators did not complain of pain or give any physical symptoms
in any of their visits
with Petitioner for medical treatment. I.G. Ex. 1.
9. Some of the undercover operators advised Petitioner that the drugs he prescribed
were used or would be
used by other individuals for non-medical purposes. I.G. Ex. 1.
10. On July 18, 1990, a felony complaint was filed in the Santa Cruz County
Municipal Court by the
California Attorney General's Office against Petitioner. I.G. Ex. 2.
11. The complaint charged Petitioner with six counts of knowingly, willfully
and unlawfully prescribing a
controlled substance, codeine or vicodin, to an undercover operator, who was
not under his treatment for a
pathology or condition other than addiction to a controlled substance, in violation
of section 11154 of the
California Health and Safety Code. I.G. Ex. 2.
12. On July 19, 1990, Petitioner was arrested for prescribing controlled substances
without medical
necessity. I.G. Ex. 1 at 30.
13. Petitioner was bound over as charged in the Superior Court for the County
of Santa Cruz. On October
3, 1990, the California Attorney General's Office filed an Information in the
Santa Cruz County Superior
Court
containing the same charges as the felony complaint. Tr. 204; I.G. Ex. 4.
14. On August 27, 1991, pursuant to a plea bargain, Petitioner pled nolo contendere
to count two of the
Information. As part of the plea bargain, this count was reduced to a misdemeanor
and the remaining five
counts were dismissed. I.G. Ex. 5; Tr. 204 - 205.
15. The court accepted the plea, and sentenced Petitioner to two years of unsupervised
probation and
ordered Petitioner to pay a fine of $1000 and costs of $1330. I.G. Ex. 5.
16. Petitioner was convicted of a criminal offense related to the unlawful
manufacture, distribution,
prescription, or dispensing of a controlled substance within the meaning of
section 1128(b)(3) of the Act.
Findings 10 - 15; May 13, 1993 Order and Notice of Hearing at 2; Tr. 6 - 7.
17. The Secretary delegated to the I.G. the authority to determine, impose,
and direct exclusions pursuant
to section 1128 of the Act. 48 Fed. Reg. 21,662 (1983).
18. By letter dated October 15, 1992, the I.G. excluded Petitioner pursuant
to section 1128(b)(3) of the Act
for a period of three years.
19. The I.G. has authority to impose and direct an exclusion against Petitioner
pursuant to section
1128(b)(3) of the Act. Findings 16 - 17.
20. Regulations published on January 29, 1992 establish criteria to be employed
by the I.G. in determining
to impose and direct exclusions pursuant to section 1128(a) and (b) of the Act.
42 C.F.R. Part 1001.
21. The regulations published on January 29, 1992 include criteria to be employed
by the I.G. in
determining to impose and direct exclusions pursuant to section 1128(b)(3) of
the Act. 42 C.F.R.
1001.401.
22. On January 22, 1993, the Secretary published a regulation which directs
that the criteria to be
employed by the I.G. in determining to impose and direct exclusions pursuant
to sections 1128(a) and (b)
of the Act are binding also upon administrative law judges, appellate panels
of the Departmental Appeals
Board (DAB), and federal courts in reviewing the imposition of exclusions by
the I.G.. 42 C.F.R.
1001.1(b); 58 Fed. Reg. 5617, 5618 (1993).
23. My adjudication of the length of the exclusion in this case is governed
by the criteria contained in 42
C.F.R. 1001.401. Findings 20 - 22.
24. An exclusion imposed pursuant to section 1128(b)(3) of the Act must be
for a minimum period of
three years, unless aggravating or mitigating factors specified in the regulations
form a basis for
lengthening or shortening that period. 42 C.F.R. 1001.401(c)(1).
25. The I.G. has the burden of proving that aggravating factors exist which
justify increasing an exclusion
imposed pursuant to section 1128(b)(3) of the Act beyond the three-year benchmark
established by
regulation. 42 C.F.R. 1001.401(c)(2)(i) - (iv); 42 C.F.R. 1005.15(c).
26. The I.G. did not allege that aggravating factors are present in this case
which justify increasing the
exclusion imposed pursuant to section 1128(b)(3) of the Act beyond the three
year benchmark established
by regulation.
27. Petitioner has the burden of proving that mitigating factors exist which
justify reducing an exclusion
below the three year benchmark established by regulation. 42 C.F.R. 1001.401(c)(3)(i)
- (ii); 42 C.F.R.
1005.15(c).
28. Petitioner alleged that, as a result of his exclusion, alternative sources
of the type of health care items
or service that he furnishes are not available within the meaning of 42 C.F.R.
1001.401(c)(3)(ii).
29. In order to qualify as an alternative source within the meaning of the
regulations, the alternative source
must be able to substitute for the items or services furnished by the excluded
provider without jeopardizing
the health of the recipients of those items or services. James H. Holmes, M.D.,
DAB CR270 (1993); Sam
Williams, Jr., M.D., DAB CR287 (1993).
30. An alternative source of health care is not available within the meaning
of the regulations in
circumstances where Medicare and Medicaid beneficiaries and recipients are not
able to reasonably obtain
the type of health care items or services furnished by the excluded provider
in a practicable manner
consistent with the Secretary's objective to protect beneficiaries and recipients
from being deprived of
needed health care as a result of the provider's exclusion. James H. Holmes,
M.D., DAB CR270 (1993);
Sam Williams, Jr., M.D., DAB CR287 (1993).
31. Health care items or services furnished by a provider are not available
to Medicare and Medicaid
beneficiaries and recipients if the provider is not actively accepting Medicare
and Medicaid beneficiaries
and recipients as patients. 57 Fed. Reg. 3316 (1992).
32. Petitioner has been engaged in the private practice of psychiatry in downtown
Santa Cruz, California,
since 1974. Tr. 236, 272 - 273.
33. The parties agree that the geographical area within which the availability
of alternative sources should
be considered is Santa Cruz County. Tr. 9 - 10.
34. Petitioner provides outpatient psychiatric services, including individual
psychotherapy counseling and
prescribing medications. Tr. 13 - 14, 237, 419.
35. Petitioner treats a variety of psychiatric conditions, including panic
disorders, anxiety disorders,
depression, personality disorders, and schizophrenia. Tr. 237 - 238.
36. Within the context of providing psychiatric care to patients, Petitioner
has treated common physical
complaints such as colds, coughs, cramps, and diarrhea. Tr. 273, 292.
37. The types of psychiatric conditions treated by the Santa Cruz County Community
Mental Health
Program (County Mental Health Program) are limited to serious psychiatric conditions,
including
schizophrenia, manic depressive illness, severe depression, recurrent suicide
attempts, and other conditions
which cause an individual to be dangerous, non-functional, or at risk for psychiatric
hospitalization. Tr.
319 - 320, 322, 338 - 339, 345 - 346.
38. The types of psychiatric conditions which meet the strict criteria for
treatment by the County Mental
Health Program are a small percentage of all psychiatric conditions. Tr. 360
- 361.
39. The County Mental Health Program does not provide alternative health care
services for treatment of
the more common, less serious psychiatric conditions which Petitioner treats
such as panic disorders,
anxiety disorders, most depressions, and personality disorders. Findings 35,
37 - 38.
40. The County Mental Health Program has almost eliminated individual psychotherapy
services, a type of
health care service which is routinely provided by Petitioner. Tr. 324 - 325,
328; Finding 34.
41. Inpatient psychiatric care is available to patients admitted to hospitals
and institutions in Santa Cruz
County, including Dominican Santa Cruz Hospital (Dominican Hospital), Watsonville
Community
Hospital, and Harbor Hills Institute for Mental Diseases (Harbor Hills). Harbor
Hills is a locked
psychiatric skilled nursing facility. Tr. 353 - 356, 366, 368.
42. Inpatient psychiatric services furnished at hospitals and institutions
in Santa Cruz County are not
available to the outpatient population served by Petitioner. Findings 34, 41.
43. Fifteen psychiatrists are enrolled in the Medicare program or the Medicaid
program or both programs
in Santa Cruz County: Dr. Berman, Dr. Luther, Dr. Anderson, Dr. Koenig, Dr.
Gillette, Dr. Aron, Dr.
Crockett, Dr. Chagi, Dr. O'Connor, Dr. Nash, Dr. Vanderveer, Dr. Corby, Dr.
Davies, Dr. Holland, and Dr.
Cramer. I.G. Ex. 12, I.G. Ex. 13.
44. While Dr. Berman has a few Medicaid patients in his outpatient private
practice whom he has treated
for a number of years, he does not accept new Medicaid patients. Tr. 417 - 418,
430.
45. Dr. Luther treats Medicare and Medicaid patients only in the context of
providing inpatient treatment
at Dominican Hospital and at Harbor Hills. Tr. 366, 430.
46. Dr. Anderson is unavailable to provide psychiatric care to Medicare and
Medicaid patients because he
is retired. Tr. 366, 410, 430.
47. Dr. Koenig does not accept Medicaid patients in the context of an outpatient
private practice. Tr. 366 -
367, 410, 431.
48. Dr. Gillette has two Medicaid patients and four Medicare and Medicaid crossover
patients in his
outpatient private practice. One of the two Medicaid patients had been Petitioner's
patient prior to
Petitioner's exclusion. Tr. 326.
49. Dr. Gillette is willing to accept new Medicare patients, but he is not
willing to accept new Medicaid
patients. Tr. 346.
50. Dr. Aron does not accept Medicaid patients in the context of an outpatient
private practice. Tr. 367,
411, 431.
51. Dr. Crockett has three or four Medicaid patients whom he has treated for
10 to 15 years, but he does
not accept new Medicaid patients. Tr. 367, 432.
52. Dr. Chagi does not accept Medicaid patients in the context of an outpatient
private practice. Tr. 367 -
368, 411, 432, 476. He is willing to accept Medicare patients on a limited basis.
Tr. 367 - 368, 411, 432,
476.
53. Dr. O'Connor is a former employee of Harbor Hills and now he is a State
employee in the California
penal system. He does not treat Medicare and Medicaid patients in an outpatient,
private setting. Tr. 368 -
369, 488.
54. Dr. Nash may have some old Medicaid patients in his private practice, but
he does not accept any new
Medicaid patients. Dr. Nash is willing to accept new Medicare patients. Tr.
369, 411, 431 - 432, 476.
55. Dr. Vanderveer is employed three-quarters time by the children's program
within the County Mental
Health Program. He does not accept Medicaid patients in an outpatient, private
practice. Tr. 369.
56. Dr. Corby will on occasion accept a Medicaid patient, but he refuses to
have more than five percent of
his practice consist of Medicaid patients. Tr. 369, 411.
57. Dr. Davies does not accept Medicaid patients in the context of an outpatient,
private setting. Tr. 370,
411, 432.
58. Dr. Holland works at Harbor Hills and at a university. He does not accept
Medicaid patients in his
small, private practice. Tr. 370, 432.
59. Dr. Cramer is unavailable to provide psychiatric care to Medicare and Medicaid
patients in the Santa
Cruz area because he has moved away. Tr. 370 - 371.
60. There is evidence that three psychiatrists in Santa Cruz County are available
to provide outpatient
psychiatric care to Medicare patients in Santa Cruz County: Dr. Gillette, Dr.
Nash, and Dr. Chagi.
Findings 49, 52, 54.
61. As a result of Petitioner being excluded, there are no psychiatrists, except
on rare occasions, available
to provide outpatient psychiatric care to Medicaid patients in Santa Cruz County
who suffer from common,
non-severe psychiatric disorders. Tr. 326, 332, 394 - 395, 404 - 405, 417 -
418, 425 - 426, 433.
62. Psychiatrists engaged in the private, outpatient practice of psychiatry
are reluctant to accept Medicaid
patients because the reimbursement rate for Medicaid patients is low, the Medicaid
forms are time-
consuming to complete, and Medicaid patients are unreliable in keeping their
appointments. Tr. 329 - 330.
63. Approximately five psychologists are available to treat Medicaid patients
in Santa Cruz County. Tr.
342.
64. Psychologists are not qualified to prescribe medications and they do not
have the background to
distinguish when a condition should properly be diagnosed as a physical condition
or as a psychiatric
condition. Tr. 361, 399, 427.
65. The level of care offered by psychologists to psychiatrically disturbed
individuals is not equivalent to
the level of care offered by psychiatrists. Finding 64.
66. Health care for psychiatric conditions furnished by psychologists is not
an alternative source of the
type of health care furnished by Petitioner. Findings 64 - 65.
67. Three physicians in a primary medical group are available to treat Medicaid
patients in Santa Cruz
County who need medication to treat their psychiatric conditions. Tr. 340 -
341.
68. Primary care physicians are legally qualified to prescribe medications
for psychiatric conditions. Tr.
361.
69. Primary care physicians are more likely than psychiatrists to misdiagnose
psychiatric conditions and to
use the wrong medications in the wrong amounts to treat psychiatric conditions.
Tr. 361 - 362.
70. It is possible for a primary care physician to provide psychiatric health
care which is comparable in
quality to that provided by psychiatrists in limited circumstances, such as
where a psychiatric disorder is
very mild or where a patient has an established medication profile and his condition
remains stable. Tr.
395, 403, 408.
71. In most instances, a psychiatrist, by virtue of his specialized training,
is better equipped than a primary
care physician to diagnose psychiatric conditions correctly and to treat psychiatric
conditions effectively.
Tr. 361 - 362.
72. In most instances, health care for psychiatric conditions furnished by
primary care physicians who are
not psychiatrists is not an alternative source of the type of health care furnished
by Petitioner. Findings 69,
71.
73. In most instances, health care for psychiatric conditions furnished by
both primary care physicians and
psychologists in combination is not an alternative source of the type of health
care furnished by Petitioner.
Finding 66, 72.
74. Other mental health care providers, such as licensed clinical social workers
and marriage and family
counselors, are not permitted to prescribe medication. Tr. 399.
75. The level of care offered by licensed clinical social workers and marriage
and family counselors to
psychiatrically disturbed individuals is not equivalent to the level of care
offered by psychiatrists. Finding
74.
76. Health care for psychiatric conditions furnished by licensed clinical social
workers and marriage and
family counselors is not an alternative source of the type of health care furnished
by Petitioner. Findings
74 - 75.
77. Petitioner has met his burden of proving that the mitigating factor specified
at 42 C.F.R.
1001.401(c)(3)(ii), alternative sources of the type of health care items or
services furnished by him are not
available, is present in this case. Findings 29 - 76.
78. The regulations do not mandate a reduction in the three year benchmark
period solely on the basis of
the presence of any single mitigating factor. 42 C.F.R. 1001.401(c)(3).
79. In evaluating the reasonableness of the three year exclusion, it is necessary
to weigh the evidence
relevant to the aggravating and mitigating factors enumerated in the regulations
in a manner that is
consistent with the goals of the Act. Act, section 1102.
80. A 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.
81. Pursuant to 42 C.F.R. 1001.401(c)(3)(ii), it is necessary to consider the
need to protect program
beneficiaries and recipients from being deprived of needed health care as a
result of a provider's exclusion.
82. In evaluating the reasonableness of the three year exclusion, it is necessary
to balance the government
interest in ensuring that Medicare and Medicaid programs and their beneficiaries
and recipients will be
protected against untrustworthy providers against the competing government interest
in ensuring that
Medicare and Medicaid beneficiaries and recipients will not be deprived of needed
health care as a result of
a provider's exclusion. Findings 80 - 81.
83. The evidence relevant to the mitigating factor specified at 42 C.F.R. 1001.401(c)(3)(ii)
establishes
that Medicaid recipients will be deprived of needed health care as a result
of Petitioner's exclusion.
Finding 77.
84. When Petitioner has met his burden of establishing the mitigating factor
at 42 C.F.R.
1001.401(c)(3)(ii), the I.G. may offset or diminish the impact of such factor
on the three year benchmark
exclusion by relying on any of the aggravating factors set forth in 42 C.F.R.
1001.401(c)(2).
85. The I.G. has the burden of proving that there are aggravating factors which
offset or diminish the
weight of any mitigating factors which are present. 42 C.F.R. 1001.401(c)(2)(i)
- (iv); 42 C.F.R.
1005.15(c).
86. The aggravating factors at 42 C.F.R. 1001.401(c)(2)(i) and 42 C.F.R. 1001.401(c)(2)(ii)
are,
respectively:
1) the acts that resulted in Petitioner's conviction or similar acts were
committed over a
period of one year or more; [and]
2) the acts that resulted in the conviction or similar acts had a significant
adverse
physical, mental or financial impact on program beneficiaries or other individuals
or the Medicare or State
health care programs.
87. Petitioner improperly issued prescriptions for controlled substances to
undercover operators on eleven
different occasions occurring over a 26 month period from February 16, 1988
through April 19, 1990, a
period of more than one year. Findings 5 - 9.
88. The aggravating factor specified at 42 C.F.R. 1001.401(c)(2)(i) is present in this case. Finding 87.
89. Petitioner treated hundreds of patients during the 26 month period from
February 16, 1988 through
April 19, 1990. Tr. 290.
90. The record is devoid of evidence establishing that Petitioner unlawfully
prescribed controlled
substances to his hundreds of patients who were not undercover agents during
the 26 month period from
February 16, 1988 through April 19, 1990.
91. Prior to the commencement of the undercover operation, Petitioner prescribed
codeine to three patients
who had a history of narcotics violations. I.G. Ex. 1 at 1 - 2.
92. There is no evidence showing that the prescriptions for codeine to the
three individuals who had a
history of narcotics violations were medically inappropriate.
93. The evidence is insufficient to establish that Petitioner engaged in improper
prescribing practices prior
to February 16, 1988. Finding 92.
94. There is no evidence that Petitioner engaged in improper prescribing practices after April 19, 1990.
95. Codeine and vicodin are physically and psychologically addictive. Tr. 57 - 63.
96. Providing codeine and vicodin to patients for no legitimate medical purpose
endangers the health and
safety of those patients. Tr. 50, 54 - 63.
97. The aggravating factor specified at 42 C.F.R. 1001.401(c)(2)(ii) is present
in this case. Findings 95 -
96.
98. Petitioner prescribed controlled substances to the undercover operators
in an effort to induce them to
enter into psychotherapy. Tr. 267 - 268, 287 - 289, 295, 297; I.G. Ex. 1; P.
Ex. 1.
99. The practice of prescribing controlled substances to persons who may be
substance abusers for the
purpose of inducing them into medical treatment is not in accordance with recognized
standards of care.
Tr. 374 - 375.
100. During the period of time that Petitioner prescribed controlled substances
to the undercover
operators, he had become disconnected and isolated from the mainstream of psychiatrists
located in his
local community. Tr. 299 - 300; P. Ex. 1.
101. Petitioner's inappropriate prescribing practices were motivated by humanitarian
concerns. Finding
98.
102. There is no evidence that Petitioner engaged in the unlawful prescribing
practices for pecuniary gain
or to engage in substance abuse.
103. Petitioner took steps to limit the exposure of the undercover operators
to the dangers of controlled
substances. Tr. 276 - 277, 285, 287, 295; I.G. Ex. 1 at 6, 10, 25.
104. Since his conviction, Petitioner has taken continuing education courses
related to chemical
dependency and drug use and he has passed the written portion of the American
Board of Psychiatry exam.
Tr. 259 - 260.
105. Since his conviction, Petitioner has become more integrated into the medical
community. Tr. 253,
300.
106. Petitioner now realizes that it is inappropriate to induce patients to
enter into psychotherapy by
prescribing controlled substances and he is cautious in his prescribing practices.
P. Ex. 3, P. Ex. 4; Tr. 266,
298; Findings 104 - 105.
107. There is little likelihood that Petitioner will again engage in inappropriate
prescribing practices in the
future.
108. In weighing Petitioner's threat to program beneficiaries and recipients
arising from the two
aggravating factors specified at 42 C.F.R. 1001.401(c)(2)(i) - (ii) and the
impact of the mitigating factor
at 42 C.F.R. 1001.401(c)(3)(ii), the weight of the evidence demonstrates that
the three year benchmark
exclusion set forth in 42 C.F.R. 1001.401(c)(1) imposed and directed against
Petitioner is excessive.
109. The remedial considerations of the Act will be served in this case by
modifying the exclusion to end
upon the effective date of this decision.
RATIONALE
Petitioner does not dispute that he was convicted of a criminal offense within
the meaning of section
1128(b)(3) of the Act and that the I.G. has authority to exclude him from participating
in the Medicare and
Medicaid programs. What is at issue here is whether it is reasonable to exclude
Petitioner for a period of
three years, the benchmark period of exclusion mandated by the regulations.
I. This case is governed by regulations published on January 29, 1992 and January 22, 1993.
During an April 26, 1993 prehearing conference, I expressed the view that the
factors which I may
consider in determining the appropriate length of the exclusion are limited
to the factors set forth in the
Secretary's implementing regulations that were initially published on January
29, 1992 and subsequently
clarified on January 22, 1993. May 13, 1993 Order and Notice of Hearing at 2
- 3. The parties have not
argued that this interpretation is in error.
The I.G. contends that a three year exclusion is reasonable pursuant to the
criteria for determining the
length of exclusions contained in regulations adopted by the Secretary on January
29, 1992 and clarified on
January 22, 1993. Petitioner contends the three year exclusion which the I.G.
imposed is excessive under
the regulations relied on by the I.G.. In resolving this issue, I find it instructive
to discuss the history of the
applicable regulations and the standards for adjudication which they contain.
The standard of adjudication concerning the reasonableness of an exclusion
in effect prior to the adoption
of the January 29, 1992 regulations allowed parties to address fully the excluded
party's trustworthiness to
provide care. Appellate panels of the DAB and administrative law judges delegated
to hear cases under
section 1128 of the Act have held consistently that section 1128 is a remedial
statute. Exclusions imposed
pursuant to section 1128 have been found to be reasonable only insofar as they
are consistent with the Act's
remedial purpose, which is to protect federally-financed health care programs
and their beneficiaries and
recipients from providers who are not trustworthy to provide care. Robert Matesic,
R.Ph., d/b/a Northway
Pharmacy, DAB 1327, at 7 - 8 (1992).
In Matesic, an appellate panel of the DAB discussed the kinds of evidence which
should be considered by
administrative law judges in hearings as to the reasonableness of the length
of exclusions. The appellate
panel concluded that any evidence which related to an excluded party's trustworthiness
to provide care was
relevant to the issue of reasonableness. Matesic, DAB 1327, at 12.
On January 29, 1992, the Secretary published regulations which, at 42 C.F.R.
Part 1001, create substantive
changes in the law with respect to the imposition of exclusions. For example,
the January 29, 1992
regulations establish a benchmark of three years for all exclusions imposed
pursuant to section 1128(b)(3)
of the Act. 42 C.F.R. 1001.401(c)(1). In addition, the regulations specifically
preclude consideration of
factors for either lengthening or shortening an exclusion imposed pursuant to
section 1128(b)(3) which are
not identified by the regulation as either "mitigating" or "aggravating".
42 C.F.R. 1001.401(c)(2), (c)(3).
It is undisputed that the January 29, 1992 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 trustworthiness to provide care. 4/
Subsequent to the publication of the January 29, 1992 regulations, administrative
law judges issued a series
of decisions, all of which held that the Secretary did not intend these regulations
to govern administrative
law judge decisions as to the reasonableness of exclusion determinations. Bertha
K. Krickenbarger, R.Ph.,
DAB CR250 (1993); Charles J. Barranco, M.D., DAB CR187 (1992); Narinder Saini,
M.D., DAB CR217
(1992). The Krickenbarger decision held specifically that section 1001.401 of
the regulations, governing
the I.G.'s exclusion determinations under section 1128(b)(3) of the Act (which
is at issue here also), did not
apply in administrative hearings concerning such exclusions. 5/
The reasons for finding that the Secretary did not intend the Part 1001 regulations
to establish criteria for
administrative hearings as to the length of exclusions are stated in detail
in the decisions cited above. It is
unnecessary to restate those reasons here, except to note that, among other
things, the decisions concluded
that the Part 1001 regulations, if applied as standards for adjudication at
the administrative hearing level,
would serve to bar parties from presenting evidence which addresses fully the
excluded party's
trustworthiness to provide care.
During the first prehearing conference held in this case on January 12, 1993,
I ruled that the factors which I
may consider in a de novo hearing with regard to the issue of the reasonableness
of the length of the
exclusion are not limited to the factors set forth in the regulations. January
15, 1993 Order and Notice of
Hearing at 2. This ruling was based on the body of decisions of administrative
law judges which
interpreted the regulations. As of the time that I held the January 12, 1993
prehearing conference, these
decisions holding that the regulations did not apply as criteria for review
of exclusions at the administrative
hearing level constituted the Secretary's final interpretation of the regulations.
On January 22, 1993, ten days after I held the first prehearing conference
in this case, the Secretary
published regulations containing provisions which are described as a clarification
of the scope and purpose
of the exclusion regulations published January 29, 1992. These regulations state
unequivocally that the
exclusion determination criteria contained in 42 C.F.R. Part 1001 must be applied
by administrative law
judges in evaluating the length of exclusions imposed by the I.G.. 58 Fed. Reg.
5617, 5618 (1993).
The clarification was made applicable to cases which were pending on January
22, 1993, the clarification's
publication date. It is undisputed that the present case was pending on January
22, 1993.
I must now apply to this case the criteria for determining the length of exclusions
set forth in 42 C.F.R.
1001.401. The controlling regulations at 42 C.F.R. 1001.401 mandate that, in
cases of exclusions
imposed pursuant to section 1128(b)(3) of the Act, the exclusion imposed will
be for three years unless
specified aggravating or mitigating factors form a basis for lengthening or
shortening the exclusion. The
standard for adjudication contained in 42 C.F.R. 1001.401 provides that, in
appropriate cases, exclusions
imposed pursuant to section 1128(b)(3) may be for more than three years where
there exist aggravating
factors (identified by 42 C.F.R. 1001.401(c)(2)) that support a lengthening
of the exclusion despite the
existence of any mitigating factors (identified by 42 C.F.R. 1001.401(c)(3)).
Similarly, an exclusion
imposed pursuant to section 1128(b)(3) may be for a period for less than three
years where there exist
mitigating factors which warrant a reduction in the length of the exclusion
even with consideration of any
of the aggravating factors.
The regulation specifically states those factors which may be classified as
aggravating and those factors
which may be classified as mitigating. Under the regulatory scheme, evidence
which relates to factors
which are not among those specified as aggravating and mitigating is not relevant
to adjudicating the
length of an exclusion and cannot be considered.
In this case, the I.G. imposed the three year benchmark exclusion. The I.G.
does not contend that there are
aggravating factors present in this case which are sufficiently serious to justify
lengthening the exclusion
beyond the three year benchmark period. Thus, the only disputed issue before
me is whether the length of
Petitioner's exclusion should be shortened below the three year benchmark period
pursuant to the criteria
established by the applicable regulations.
The regulations specifically preclude consideration of any factors to shorten
the benchmark period if they
are not listed as mitigating at 42 C.F.R. 1001.401(c)(3). The possible mitigating
factors which can be
considered as a basis for shortening the three year benchmark exclusion are
very limited. The applicable
regulation provides that only the following factors may be considered as mitigating:
(i) The individual's or entity's cooperation with Federal or State officials
resulted in -
(A) Others being convicted or excluded from Medicare or any of the State
health care programs, or
(B) The imposition of a civil money penalty against others; or
(ii) Alternative sources of the type of health care items or services furnished
by the
individual or entity are not available.
42 C.F.R. 1001.401(c)(3)(i) - (ii).
Citing the mitigating circumstance identified at 42 C.F.R. 1001.401(c)(3)(ii),
Petitioner asserts that the
exclusion is unreasonable because alternative sources of the type of health
care items or services he
furnishes are not available. The I.G. contends that the evidence fails to establish
that this mitigating factor
is present. The I.G. contends also that even if I were to find that this factor
is present, the evidence of
record shows that there are aggravating factors which offset any mitigation
arising from the presence of
this factor and therefore, the three year benchmark exclusion should be upheld.
In analyzing the evidence in this case, my task is to first determine whether
the mitigating factor cited by
Petitioner is present. If I determine that this factor is not present, then
my inquiry ends. Under these
circumstances, there would not be any basis to shorten the three year exclusion
pursuant to the criteria
established by the regulations. If I determine that this factor is present,
my task is to evaluate the
reasonableness of the three year exclusion by determining the relative weight
of this mitigating factor in
the context of the aggravating factors which the I.G. asserts are present. Accordingly,
I will now consider
the threshold question of whether the mitigating factor cited by Petitioner,
that alternative sources of the
type of health care items or services he furnishes are not available, is present
in this case.
II. The evidence establishes that the mitigating factor identified at 42 C.F.R. 1001.401(c)(3)(ii) is present.
A. Petitioner has the burden of proving mitigating circumstances, including
the burden of proving that
alternative sources of health care items or service of the type he provides
are not available.
The regulations at 42 C.F.R. 1001.401 do not allocate specifically the parties'
respective burdens of proof
in establishing the existence of aggravating and mitigating factors. Instead,
section 1005.15(c) of the
regulations expressly reserves the duty of allocating the burden of proof in
certain exclusion cases, such as
those governed by 42 C.F.R. 1001.401, to administrative law judges. I conclude
that it is logical and
consistent with the language and structure of the regulations to place the burden
of proving mitigating
circumstances on Petitioner, including the burden of proving alternative sources
of the type of health care
he furnishes are not available.
It is plain from the language and structure of 42 C.F.R. 1001.401(c) that the
Secretary intended the
mitigating circumstances identified in those regulations to be in the nature
of affirmative defenses to the
imposition of a three year exclusion that would otherwise be mandated by the
regulations. Logically, the
burden should fall on excluded parties to prove the existence of affirmative
reasons for imposing less than
regulation-mandated minimum exclusions. It does not make practical sense to
require the I.G. to prove a
negative -- the absence of mitigating circumstances -- in cases where the I.G.
has imposed the regulation-
mandated minimum exclusion.
Furthermore, my decision to place on Petitioner the burden of proof for establishing
the presence of
mitigating circumstances is consistent with the burdens which have been established
in exclusions imposed
under section 1128 of the Act prior to the promulgation of the regulations.
An appellate panel of the DAB
held in such a case that there is a "general principle that a petitioner
has the burden of proving factors
which would tend to reduce the exclusion period." Bernardo G. Bilang, M.D.,
DAB 1295, at 10 (1992). In
addition, placing the burden on Petitioner to establish the presence of mitigating
circumstances is
consistent with the burdens that have been established in other kinds of cases
in which exclusion is the
remedy. For example, in certain other kinds of cases brought under the Act,
the non-federal party has the
burden of proving the presence of mitigating circumstances which would justify
reduction of a penalty, an
assessment, or an exclusion. 42 C.F.R. 1005.15(b).
B. For the mitigating factor at 42 C.F.R. 1001.401(c)(3)(ii) to apply, Petitioner
must prove that his
exclusion will result in a reduction in health care services to the point that
obtaining comparable sources of
health care imposes an unreasonable hardship on Medicare and Medicaid beneficiaries
and recipients.
The mitigating factor identified at 42 C.F.R. 1001.401(c)(3)(ii), that alternative
sources of the type of
health care items or services furnished by the individual or entity are not
available, is not defined by
statute. In the absence of a regulatory definition of this factor, the words
describing this mitigating factor
should be given their common and ordinary meaning. The word "alternative"
is defined in the Random
House Dictionary of the English Language, 2d Edition (1987), as "affording
a choice of two or more
things, propositions, or courses of action." "Available" is defined
as "suitable or ready for use or service; at
hand." I conclude from these common definitions that, in order for the
mitigating circumstance in 42
C.F.R. 1001.401(c)(3)(ii) to apply, the evidence must show that alternative
sources (sources that can be
chosen instead) of the type of health care furnished by an excluded provider
are not available (suitable or
ready for use or service). James H. Holmes, M.D., DAB CR270, at 13 (1993). 6/
Looking at the phrase "alternative sources" in this context, it is
evident that the Secretary contemplated that
the alternative sources would take the place or be a substitute for the type
of health care provided by the
excluded provider. In Holmes, I concluded from this that in order to qualify
as an "alternative source"
within the meaning of the regulations, the alternative source must provide health
care items or services that
are comparable or equivalent in quality to the type of items or services provided
by the excluded provider.
The alternative source must be able to substitute for the items or services
furnished by the excluded
provider without jeopardizing the health of the recipients of those items or
services. Holmes, DAB CR270,
at 13.
The alternative source must also be "available." In Holmes, I found
that alternative sources are not
available within the meaning of the regulation if such sources are not reasonably
available. This standard
contemplates that an alternative source is not available in circumstances where
Medicare and Medicaid
patients are not able to reasonably obtain the type of medical services provided
by the excluded provider in
a practicable manner consistent with the Secretary's objective to protect program
beneficiaries and
recipients from being deprived of needed health care as a result of the provider's
exclusion. For example,
an alternative source of health care might be identified as being present to
provide the type of health care
provided by the excluded provider. However, that alternative source would not
be "available" within the
meaning of the regulations if it is located at such a great distance in miles
from an excluded provider's
former Medicare and Medicaid patients that obtaining the alternative health
care would result in an
unreasonable hardship to those patients.
On the other hand, as I observed in Holmes, merely showing that the consequence
of an exclusion is a
reduction in the availability of health care services is not tantamount to showing
that those services are not
available. Certainly, any provider could show that health care services to program
beneficiaries and
recipients are less available because the provider is excluded. However, in
order for the mitigating factor
at 42 C.F.R. 1001.401(c)(3)(ii) to apply, there must be a showing that a consequence
of an exclusion is a
reduction in health care services to the point that obtaining alternative sources
of health care is so
impractical that it imposes an unreasonable hardship on Medicare and Medicaid
beneficiaries and
recipients. This is a far more stringent test to meet than showing merely a
reduction in the availability of
health care. Holmes, DAB CR270, at 14.
In addition, language in the preamble to the January 29, 1992 regulations indicates
that reasonable
availability of alternative sources of health care must be viewed in the context
of the Medicare and
Medicaid programs. The preamble to the regulations states that, in evaluating
the availability of alternative
sources of health care pursuant to 42 C.F.R. 1001.401(c)(3)(ii), the Secretary
contemplates that the
factfinder "will look to whether there are service providers who accept
Medicare and Medicaid patients,
rather than merely whether services are available generally." 57 Fed. Reg.
3316. This language is
consistent with the Secretary's interest in protecting program beneficiaries
and recipients from being
deprived of needed health care as a result of a provider's exclusion. Under
this standard, alternative
sources of health care of the type furnished by an excluded provider are not
reasonably available within the
meaning of the regulations if program beneficiaries and recipients cannot use
that source, such as in the
situation where the alternative health care provider does not participate in
the Medicare or Medicaid
programs.
C. Petitioner has met his burden of proving that, by virtue of his exclusion,
alternative sources of the type
of health care items or services that he furnishes are not available.
Based on my review of the evidence of record, I conclude that Petitioner has
sustained his burden of
proving that as a result of his exclusion, alternative sources of the type of
health care he provides are not
available, within the meaning of 42 C.F.R. 1001.401(c)(3)(ii).
1. As a result of Petitioner being excluded, there are no psychiatrists in
Santa Cruz
County, except on rare occasions, available to provide outpatient psychiatric
care to Medicaid patients who
are not severely impaired.
Petitioner is a psychiatrist who provides outpatient psychiatric services.
Tr. 235 - 237, 419. The
psychiatric services furnished by Petitioner include individual psychotherapy
counseling and prescribing
medications. Tr. 13 - 14. Petitioner treats a variety of psychiatric conditions,
including panic disorders,
anxiety disorders, depression, personality disorders, and schizophrenia. Tr.
237 - 238. Within the context
of providing psychiatric care to patients, Petitioner also has treated common
physical complaints such as
colds, coughs, cramps, and diarrhea. Tr. 273, 292. Petitioner has been engaged
in the private practice of
psychiatry in downtown Santa Cruz, California, since 1974. Tr. 236, 272 - 273.
Petitioner has included
among his patients individuals with very limited financial resources and has
accepted patients who are
Medicaid recipients. Tr. 237, 250, 264; P. Ex. 5 - 6. Petitioner is only one
of two psychiatrists practicing in
Santa Cruz County who is able to speak Spanish. Tr. 237. 7/
The parties agree that the type of health care services provided by Petitioner
are psychiatric services. Tr. 8
- 9. The parties agree also that the geographical area within which I should
consider whether alternative
health care services are available is Santa Cruz County, California, the location
of Petitioner's practice. Tr.
10. In addition, it is not disputed that the regulations contemplate that the
availability of alternative sources
of health care must be viewed in the context of availability to Medicare and
Medicaid beneficiaries and
recipients.
Throughout this proceeding, Petitioner has consistently asserted that, as a
result of his exclusion,
alternative sources of the type of psychiatric services furnished by him are
no longer available in Santa
Cruz County, California. The I.G. has attempted to rebut this assertion by submitting
computer printouts,
obtained from the California Department of Health Services (CDHS), which identifies
physicians who are
"Medicare/Medi-Cal Providers" in Santa Cruz County. I.G. Ex. 12. 8/
In addition to other information
contained in the printouts, such as their addresses and phone numbers, the providers
are identified on the
printout by physician specialty codes which are listed in another I.G. exhibit.
I.G. Ex. 13. The I.G. asserts
that this evidence shows that there are "at least 15 Medicare/Medi-Cal
providers currently listed with
[CDHS] who have identified themselves as practicing psychiatry in Santa Cruz
County." I.G. posthearing
brief at 37. The I.G. contends that this is conclusive affirmative evidence
showing that there are many
alternative sources of psychiatric health care available to Medicare and Medicaid
patients in Santa Cruz
County. According to the I.G., this evidence is sufficient to rebut Petitioner's
assertion that alternative
psychiatric health care is not available to program beneficiaries and recipients
in Santa Cruz County. I.G.
posthearing brief at 32.
Petitioner contends that the Medicare and Medicaid enrollment statistics produced
by the I.G. have limited
significance because enrollment statistics show only that a provider is eligible
to treat Medicare or
Medicaid patients. Such statistics do not show whether a provider is actively
treating Medicare or
Medicaid patients or whether he is willing to accept new Medicare or Medicaid
patients. Petitioner
posthearing reply brief at 1.
I agree with Petitioner that Medicare and Medicaid provider enrollment statistics
alone do not conclusively
establish that the enrolled providers are "available" to Medicare
and Medicaid patients, within the meaning
of the regulations. It is undisputed that a provider must be enrolled in the
Medicare or Medicaid programs
as a necessary prerequisite to making the enrolled provider's health care services
available to Medicare
beneficiaries or Medicaid recipients. While enrollment in the Medicare or Medicaid
programs is a
necessary precondition to making health care services available to beneficiaries
or recipients, it is not
sufficient to show that such services will, in fact, be available to beneficiaries
and recipients or in what
setting such services will be provided.
In order for health care services to be available to Medicare beneficiaries
or Medicaid recipients, a health
care provider must not only be enrolled as a participant in the Medicare or
Medicaid programs, but the
provider also must be actively accepting Medicare beneficiaries or Medicaid
recipients as patients.
Alternative sources of health care are not available if Medicare beneficiaries
or Medicaid recipients cannot
avail themselves of the alternative sources of health care. It does little good
for persons to go to a health
care provider who is enrolled in the Medicare or Medicaid programs if the provider
refuses to accept new
Medicare or Medicaid patients.
At most, the enrollment statistics provided by the I.G. establish that there
are 15 psychiatrists in Santa Cruz
County who are eligible to treat patients under the Medicare program or under
the Medicaid program or
under both programs. The statistics do not establish that such physicians were
willing to actually treat
these patients. If Petitioner is able to show that a provider identified by
the I.G. as being enrolled in the
Medicare or Medicaid programs is not willing to accept new Medicare or Medicaid
patients, then, as a
practical matter, the services of that provider are not available to Medicare
or Medicaid patients.
Moreover, the enrollment statistics do not distinguish between those physicians
who provide medical care
to Medicare beneficiaries only and those who serve Medicaid recipients. 9/
Petitioner argues that the enrollment statistics produced by the I.G. have
limited significance for the
additional reason that the enrollment statistics list the eligible Medicare
or Medicaid providers of
psychiatric services in Santa Cruz County without describing the type of psychiatric
services furnished by
these providers. Of particular importance is whether the psychiatric service
is provided in an outpatient or
inpatient setting. Petitioner contends that the treatment rendered by some of
the psychiatrists on the list
provided by the I.G. is not comparable to the type of psychiatric services he
provides to his patients, which
are primarily outpatient services. Petitioner posthearing reply brief at 1 -
2. Petitioner points out also that
mental health services provided by Santa Cruz County are available to treat
only the most severe mental
conditions, and that treatment provided by the County is not an available alternative
for the more common,
less severe mental conditions which he treats. Petitioner posthearing brief
at 1.
The regulations contemplate that alternative sources would take the place of
or be a substitute for the type
of health care provided by the excluded provider. If Petitioner is able to show
that a psychiatrist identified
by the I.G. as being enrolled in the Medicare or Medicaid programs does not
furnish psychiatric services
which are comparable to the psychiatric services furnished by Petitioner, then
the services of that
psychiatrist are not an alternative source of health care.
Framing this inquiry in the manner urged by Petitioner, I received evidence
at the hearing pertaining to the
issues of whether the psychiatrists in Santa Cruz County who are enrolled in
the Medicare or Medicaid
programs are willing to accept Medicare or Medicaid patients and whether those
psychiatrists furnish
psychiatric services which are comparable to the outpatient psychiatric services
furnished by Petitioner.
John R. Gillette, M.D., a psychiatrist who is board-certified by the American
Board of Psychiatry and
Neurology, provided extensive testimony regarding these issues at the hearing.
Tr. 320.
Dr. Gillette has been the Director of Psychiatric Services for the County Mental
Health Program for 14 to
15 years. He is also chairman of the Mental Health Committee of the Santa Cruz
County Medical Society.
In addition, he is engaged in the private practice of psychiatry approximately
10 to 12 hours a week. Tr.
320, 330, 335, 348. Dr. Gillette testified that, during the past 15 years, and
in the past five years in
particular, the County Mental Health Program has been decreasing its services.
Such services are limited
to treating only those individuals who suffer from serious mental illness. The
serious mental illnesses
treated by the County include schizophrenia, manic depressive illness, severe
depression, recurrent suicide
attempts, and other conditions which causes an individual to be dangerous, non-functional,
or at risk for
psychiatric hospitalization. Tr. 322, 338 - 339, 345 - 346.
Even for individuals who meet the strict criteria for obtaining treatment from
the County Mental Health
Program, there are limited opportunities for obtaining outpatient psychotherapy
services. Dr. Gillette
testified that the County Mental Health Program has almost eliminated individual
psychotherapy services.
The only individual psychotherapy services furnished by the County Mental Health
Program include a
limited number of psychotherapy sessions for a select few patients who are in
crisis. Tr. 324 - 325, 328.
Dr. Gillette testified that the types of psychiatric conditions which meet
the strict criteria for treatment by
the County Mental Health Program are a small percentage of all psychiatric conditions.
Tr. 360 - 361. The
more common, less severe psychiatric conditions, such as panic disorders, anxiety
disorders, most
depressions, personality disorders, and organic brain disorders, are not treated
by the County Mental Health
Program. Tr. 327, 338 - 340. Dr. Gillette testified that patients with less
severe psychiatric conditions such
as these must seek treatment in the private sector. Tr. 340 - 341.
Unfortunately, according to Dr. Gillette, at the same time that the County
Mental Health Program has been
decreasing its services in recent years, fewer and fewer psychiatrists in private
practice have been willing to
accept new Medicaid patients. Dr. Gillette testified that, at present, he does
not know of any psychiatrist
engaged in private practice in Santa Cruz County who has openly expressed a
willingness to routinely
accept new Medicaid patients. Dr. Gillette noted that while some psychiatrists
might have a few Medicaid
patients whom they have been seeing for a long period of time, none of these
psychiatrists has expressed a
willingness to accept new Medicaid patients. Tr. 323, 325, 328. Dr. Gillette
stated that, as a result of this
situation, there are a large number of individuals who do not have access to
psychiatric services in Santa
Cruz County. Tr. 325.
Dr. Gillette testified that there are several reasons that private psychiatrists
refuse to accept new Medicaid
patients. According to Dr. Gillette, the reimbursement rates for Medicaid patients
are low, the Medicaid
forms are difficult and time-consuming to complete, and Medicaid patients tend
to be unreliable in keeping
their appointments. If a provider does not bill patients for missed appointments,
he will have up to one
hour during which he is not generating any income. Tr. 329 - 330. Dr. Gillette
stated that the Mental
Health Committee of the Santa Cruz Medical Society, which he chairs, has not
been able to do anything to
solve the problem of the lack of availability of psychiatric care for Medicaid
patients who do not meet the
criteria for receiving care through the County Mental Health Program. Tr. 348.
He expressed the view
that "nothing will change unless the reimbursement rates go [up] or several
new psychiatrists . . . come into
town and they're hungry." Tr. 350.
Dr. Gillette testified that, prior to his exclusion, Petitioner was the only
psychiatrist engaged in private
practice to whom the County Mental Health Program could refer Medicaid patients.
The only other private
psychiatrist who accepted Medicaid patients was an individual who "got
into [Medicaid] fraud issues 12
years ago," and stopped treating Medicaid patients. Tr. 332. Dr. Gillette
stated also that Petitioner
primarily provided psychotherapy services, and that he generally saw patients
for hour long appointments,
rather than half-hour appointments. Tr. 331 - 332. Dr. Gillette described Petitioner
as a psychiatrist who
"was able and willing to see people, and to work with many that others
didn't want to." Tr. 333.
During his testimony, Dr. Gillette discussed specifically the availability
of alternative psychiatric care from
each of the 15 psychiatrists identified by the I.G. as "Medicare/Medi-Cal
Providers" in Santa Cruz County.
He indicated that while he had not necessarily communicated with each and every
one of these providers as
recently as the last year, he is familiar with their medical practices and believes
that he is able to provide
accurate information about them. Tr. 375 -376. Dr. Gillette testified that only
one of the 15 psychiatrists
identified as Medicare/Medi-Cal providers, Dr. Corby, would, on occasion, accept
new Medicaid patients
on an outpatient basis. 10/ However, Dr. Gillette testified that Dr. Corby refuses
to have more than five
percent of his practice consist of Medicaid patients. Findings 43 - 60.
Dr. Gillette's testimony regarding the availability of alternative psychiatric
care to Medicare and Medicaid
patients is corroborated the testimony of Dr. Berman, a Board-certified psychiatrist
who has engaged in the
private practice of psychiatry in Santa Cruz since 1972. Tr. 416, 423. Dr. Berman
stated that he has
mostly an office-based outpatient practice. He provides outpatient psychotherapy
with the use of
medication. In addition, he is on the staff of Dominican Hospital and is called
upon to be a consulting
psychiatrist for inpatients at that hospital. Dr. Berman stated that, although
he is on the list of Medicare or
Medicaid providers produced by the I.G., he does not accept new Medicaid patients.
He indicated that he
has a few Medicaid patients in his practice with whom he has had a relationship
for 15 years. However, he
feels that accepting new Medicaid patients is a "great burden" because
the Medicaid payment bureaucracy
is so slow and cumbersome. Tr. 417 - 418, 430.
Dr. Berman stated that, prior to Petitioner's exclusion, Petitioner had a reputation
for accepting Medicaid
patients in his private, outpatient psychiatric practice. Tr. 419. Dr. Berman
testified that he does not now
know of any psychiatrist in Santa Cruz County who is willing to accept Medicaid
patients for treatment.
He indicated that, although individuals who are severely psychiatrically impaired
can be referred to the
County supported crisis team, he does not know of any psychiatrist to whom he
can refer Medicaid patients
with less serious conditions. Tr. 417 - 418, 425 - 426, 433. Dr. Berman indicated
that he based his
testimony regarding the unavailability of psychiatric services on the knowledge
he gained from working in
the community over the years and on the fact that his efforts to refer Medicaid
patients to other
psychiatrists have been unsuccessful.
The testimony of Dr. Halpern, a family practitioner who has practiced in Santa
Cruz County for 14 years,
further corroborates Dr. Gillette's and Dr. Berman's testimony. Tr. 392 - 393.
Dr. Halpern stated that he
and his partner are the only family doctors in Santa Cruz who accept Medicaid
and Medicare patients on a
regular basis. Tr. 393. Dr. Halpern indicated that, in the course of his practice,
he has attempted to refer
his patients to private psychiatrists for treatment. While psychiatric care
is available from the County
Mental Health Program in a limited manner to patients in crisis, there are no
private psychiatrists to whom
Dr. Halpern can refer patients in need of ongoing outpatient psychiatric care.
Tr.394 - 395, 404 - 405. He
stated also that, prior to Petitioner's exclusion, Petitioner was the only psychiatrist
in Santa Cruz County
who would see Medicaid patients on a regular basis. Tr. 394. Dr. Halpern testified
regarding the
availability of the psychiatrists on the list of enrolled providers supplied
by the I.G., and this testimony was
consistent with that provided by Dr. Gillette and Dr. Berman. Tr. 409 - 413.
The testimony of Dr. Gillette, Dr. Berman, and Dr. Halpern regarding the availability
of psychiatrists in
Santa Cruz County was borne out by the testimony provided three former Medicaid
patients. All three
patients testified that, after Petitioner was excluded, they made serious efforts
to find another psychiatrist
who would provide them with outpatient psychiatric care. All three of these
individuals testified that they
personally called some psychiatrists in an effort to make an appointment. In
addition, they tried to obtain
referrals from either other physicians or the County Mental Health Program.
In spite of their best efforts to
find a psychiatrist to replace Petitioner, these individuals were unable to
do so. Tr. 436 - 437, 440, 445 -
446, 449, 456.
The I.G. attempted to rebut Petitioner's evidence with the testimony of John
Ponta, an investigator with the
California Attorney General's Office. Tr. 155 - 156. Investigator Ponta testified
that he called some of the
offices of the 15 psychiatrists (identified by the I.G. as being enrolled as
"Medicare/Medi-Cal Providers" in
Santa Cruz County) to determine if they accepted new Medicare or Medicaid patients.
Investigator Ponta
indicated that, in the course of making these telephone calls, he identified
himself as a Medicaid recipient
or he used an alias. Tr. 469, 476. As a result of his telephone survey, Investigator
Ponta stated that he was
told that Dr. O'Connor, who is listed as a psychiatrist with an address of 1171
7th Street in Santa Cruz, took
new Medicare and Medicaid patients. Tr. 470. Investigator Ponta testified also
that he was told that Dr.
Nash and Dr. Chagi accepted new Medicare patients, but not new Medicaid patients.
Tr. 471, 476.
In addition, Investigator Ponta testified that he determined, again through
telephoning, that the County of
Santa Cruz Health Center at 1060 Emeline Avenue 11/ took new Medicare and Medicaid
patients.
According to Investigator Ponta, the clinic informed him that they had four
psychiatrists on staff. The
clinic did not mention that there were any restrictions on new Medicare or Medicaid
patients seeing
psychiatrists on the staff of the clinic, such as having to have life threatening
or severe mental disorders.
Tr. 471 - 474.
The I.G. contends that the evidence relating to the availability of psychiatric
health care services in Santa
Cruz County establishes that "psychiatric care is indeed available in the
Santa Cruz County area from a
substantial number of individual psychiatrists and institutional providers."
I.G. posthearing brief at 42.
I agree with the I.G. that psychiatric care is available to Medicare and Medicaid
patients in Santa Cruz
County in a variety of institutional settings. However, I find that the psychiatric
care provided in these
institutional settings is not available to the outpatient population served
by Petitioner who do not suffer
from severe psychiatric conditions.
The County Mental Health Program provides psychiatric care to patients with
serious or life-threatening
psychiatric disorders in various settings, including clinics and a halfway house
with a sub-acute residential
day treatment program. Tr. 319, 324, 336, 471 - 472. The County rarely provides
individual
psychotherapy services on an outpatient basis. On the other hand, Petitioner
primarily provides
psychotherapy services, and he often sees patients for up to an hour for psychotherapy
sessions. Thus, a
type of health care service which is routinely provided by Petitioner, outpatient
psychotherapy, is not
reasonably available through the County.
As pointed out by the I.G., psychiatric care is available to Medicare and Medicaid
patients in hospital
facilities in Santa Cruz County. The record shows that Dominican Hospital has
a Psychiatric Department
staffed by inpatient staff psychiatrists who treat inpatients. In addition,
psychiatrists provide consultation
on a rotation basis to other patients in the hospital. Watsonville Community
Hospital accepts Medicaid
patients, and it has three psychiatrists on its staff. Tr. 353 - 356. In addition
to these two hospitals,
psychiatrists treat Medicaid patients at a psychiatric skilled nursing facility
known as Harbor Hills. Tr.
368. Petitioner's practice of psychiatry is not hospital-based. It is office-based.
He provides outpatient
psychiatric services to patients who are not admitted to a hospital or other
psychiatric facility. Since the
psychiatric care provided at the hospitals and the psychiatric skilled nursing
facility is inpatient care, this
type of psychiatric care is not an available alternative for the outpatient
population served by Petitioner.
The I.G. contends that there are "at least five individual psychiatrists"
who are willing to "accept new
Medicare and/or Medi-Cal patients" in a non-institutional setting. I.G.
posthearing brief at 42. The five
psychiatrists cited by the I.G. are Dr. Gillette, Dr. Nash, Dr. Chagi, Dr. Corby,
and Dr. O'Connor.
The I.G. points to evidence to show that three of these psychiatrists are willing
to accept new Medicare
patients. Dr. Gillette testified that he would accept new Medicare patients
in his private, outpatient
practice. Investigator Ponta testified that his telephone survey revealed that
Dr. Nash and Dr. Chagi accept
new Medicare patients. At best, this evidence supports the conclusion that these
three psychiatrists are
available to treat Medicare patients. However, even if I were to find that these
psychiatrists are available to
provide outpatient psychiatric treatment to Medicare patients, none of them
are available to provide such
care to Medicaid patients. While Dr. Gillette acknowledged that he accepted
one of Petitioner's former
patients as a new Medicaid patient, he stated unequivocally that he is not willing
to treat any additional
Medicaid patients. Similarly, Investigator Ponta testified unequivocally that
his telephone survey revealed
that Dr. Nash and Dr. Corby are not willing to treat Medicaid patients.
The I.G. notes also Dr. Gillette's testimony that Dr. Corby will on occasion
accept a Medicaid patient. I
note that Dr. Gillette stated also that Dr. Corby refuses to have more than
five percent of his practice be
Medicaid patients. It appears from this evidence that while Dr. Corby might
be available to treat Medicaid
patients on occasion, he would be available to absorb only a small percentage
of Petitioner's former
Medicaid practice.
In addition, the I.G. points to Investigator Ponta's testimony that he determined
through a telephone survey
that Dr. O'Connor takes new Medicare and Medicaid patients. I assign little
probative value to Investigator
Ponta's testimony regarding Dr. O'Connor's availability to treat Medicare and
Medicaid patients because
the source of this information cannot be discerned from the record. Investigator
Ponta testified that he did
not speak to Dr. O'Connor personally, but that he spoke with someone whom he
did not identify in Dr.
O'Connor's office. Tr. 475 - 476. It is not even clear from the record what
telephone number Investigator
Ponta called to get this information. Investigator Ponta stated that, in the
course of conducting his
telephone survey, he initially used the telephone numbers found on the enrollment
statistics supplied by the
I.G.. However, in some instances, the numbers listed were incorrect and he ended
up calling a different
number. Investigator Ponta stated that he is not sure whether he obtained this
information from an
individual at Dr. O'Connor's listed number or another number. Tr. 469, 474 -
475.
The record shows that the address and telephone number listed for Dr. O'Connor
on I.G. Ex. 12 are the
address and telephone number for Harbor Hills, the locked psychiatric nursing
facility. Tr. 368, 480 - 481,
487 - 488. Thus, it is possible that Investigator Ponta received this information
from an individual
employed by Harbor Hills. While an employee at Harbor Hills might provide reliable
information about
Dr. O'Connor's professional activities at Harbor Hills, information provided
from an employee at Harbor
Hills regarding Dr. O'Connor's professional activities outside of his work at
Harbor Hills would be
significantly less reliable.
In fact, the other evidence of record suggests that Dr. O'Connor does not even
have a private, outpatient
practice. Dr. Gillette testified that, to the best of his knowledge, Dr. O'Connor
used to be employed by
Harbor Hills, but that he is now employed by the State prison system. This testimony
was corroborated by
Petitioner. Petitioner indicated that an individual at Harbor Hills told him
that Dr. O'Connor no longer
works there. Petitioner stated also that he had the opportunity to speak with
Dr. O'Connor in the course of
his work, and that Dr. O'Connor works for the Probation Department of the penal
system. Tr. 488.
It is significant that none of the psychiatrists who appeared as witnesses
in this proceeding had any
information to suggest that Dr. O'Connor is accepting Medicare or Medicaid patients
in a private,
outpatient practice. Dr. Gillette affirmatively stated that Dr. O'Connor did
not treat Medicaid or Medicare
patients in the context of a private, outpatient practice. While Petitioner
was aware of Dr. O'Connor's
employment by the penal system, he knew nothing to suggest that Dr. O'Connor
was engaged in private
practice in Santa Cruz County. Dr. Berman and Dr. Halpern both testified that
they did not even know Dr.
O'Connor. Dr. Gillette, Dr. Berman, Dr. Halpern, and Petitioner have each practiced
medicine in Santa
Cruz County for at least 14 years, and all four physicians have firsthand knowledge
of the mental health
delivery system in Santa Cruz County. I find the testimony of these individuals
to be credible and reliable.
On the other hand, the information regarding Dr. O'Connor's availability to
Medicare or Medicaid patients
from Investigator Ponta's telephone survey is unreliable because the source
of this information is unknown.
Thus, I find that the evidence showing that Dr. O'Connor does not treat Medicare
or Medicaid patients in a
private, outpatient setting far outweighs the evidence showing that he is available
to provide this type of
health care.
The evidence shows that psychiatrists are available in Santa Cruz County to
provide psychiatric health care
services to severely psychiatrically impaired Medicare or Medicaid patients
in the context of the County
Mental Health Program. In addition, psychiatrists are available in Santa Cruz
County to provide inpatient
psychiatric services to Medicare or Medicaid patients who are admitted to hospitals
and a locked
psychiatric nursing facility. A few psychiatrists are available in Santa Cruz
County to provide outpatient
psychiatric care to Medicare patients who are not severely psychiatrically impaired.
However, since
Petitioner was excluded, there are no psychiatrists in Santa Cruz County, except
on rare occasions,
available to provide outpatient psychiatric care to Medicaid patients who are
not severely impaired.
2. Health care providers other than psychiatrists in Santa Cruz County do
not have the
expertise and qualifications to provide psychiatric care which is equivalent
to the level of care provided by
Petitioner.
The I.G. contends that the record shows that there are providers other than
psychiatrists in Santa Cruz
County who provide mental health services to Medicare and Medicaid patients
which are comparable to the
services provided by Petitioner. Petitioner contends that the level of mental
health care furnished by
providers who are not psychiatrists is not comparable to the level of care furnished
by psychiatrists.
The I.G. points out that Dr. Gillette testified that the County Mental Health
Program refers patients who do
not meet its criteria for care to other Medicare and Medicaid providers, including
psychologists, primary
care physicians, clinical social workers, and family counselors. The I.G. contends
that the mental health
care furnished by these providers is comparable to the care furnished by Petitioner.
I.G. posthearing brief
at 39 - 41. I.G. posthearing reply brief at 5. I disagree.
While Dr. Gillette testified that the County Mental Health Program refers patients
who are not severely
psychiatrically impaired to other providers, he made it abundantly clear that
this course was taken only
because there are not a sufficient number of private psychiatrists available
to treat Medicaid and Medicare
patients.
Dr. Gillette testified that the County Mental Health Program has a list of
four to five psychologists who
accept Medicaid patients, and from that list the County Mental Health Program
makes referrals to Medicaid
patients whom it turns away. Tr. 342. The record shows that the level of care
offered by psychologists is
not equivalent to the level of care offered by psychiatrists. Dr. Berman, Dr.
Halpern and Dr. Gillette
testified regarding these differences. Dr. Berman stated that psychologists
are qualified to administer
psychological tests. They are not qualified to prescribe medications. In addition,
psychologists do not
have the background to distinguish between physical and psychiatric conditions.
Tr. 427. Dr. Halpern
noted also that psychologists cannot prescribe medicines. He testified that
psychologists cannot handle
patients who are truly psychiatrically disturbed. Tr. 399. Dr. Gillette testified
that, in psychiatric
conditions such as depression, most studies suggest that the best treatment
is a combination of medications
and psychotherapy. Tr. 342. He stated also that a psychologist cannot prescribe
medication. Tr. 361.
The psychiatric services furnished by Petitioner include individual psychotherapeutic
counseling and
prescribing medications. Given that the use of psychotherapy and medications
together is the most
effective treatment for some psychiatric conditions, then a psychologist is
handicapped in providing the
best possible care for those psychiatric conditions because he is unable to
prescribe medication. This
handicap would jeopardize the health of a patient who is in need of medications
for his psychiatric
condition. In addition, a psychologist is not trained to diagnose certain medical
conditions. The health of a
patient in need of treatment for a medical condition would be jeopardized if
the condition is undiagnosed
or misdiagnosed because the patient is under the care of a psychologist who
is not trained to make an
appropriate medical diagnosis. In view of the substantial differences in the
qualifications of psychiatrists
and psychologists, I find that the health care treatment rendered by psychologists
to psychiatrically
disturbed patients is not equivalent to the treatment rendered by psychiatrists.
I conclude that health care
for psychiatric conditions furnished by psychologists is not an alternative
source of the type of health care
furnished by Petitioner, within the meaning of the regulations.
I conclude also that health care for psychiatric conditions furnished by medical
doctors who are not
psychiatrists and who specialize in providing primary care is not an alternative
source of the type of health
care furnished by Petitioner. Dr. Gillette testified that, in addition to making
referrals to psychologists for
Medicaid patients that the County Mental Health Program turns away, the County
Mental Health Program
might also tell these patients about the primary medical group in Santa Cruz
that does see new Medicaid
patients, i.e., Drs. Halpern, Kazel, and Robsen. When asked whether this group
of doctors provides
psychiatric treatment, Dr. Gillette stated that this practice prescribes medication
for disorders such as
depression and anxiety. Tr. 340 - 341.
Dr. Gillette testified regarding the differences between a psychiatrist who
prescribes psychiatric medication
and a medical doctor who is not a psychiatrist who prescribes psychiatric medication.
Dr. Gillette stated
that while both kinds of practitioners are legally qualified to prescribe psychiatric
medications, a
psychiatrist is better equipped to prescribe these medications effectively.
Dr. Gillette stated that primary
care physicians are more likely than psychiatrists to misdiagnose psychiatric
conditions and to use the
wrong medications in the wrong amounts to treat psychiatric conditions. For
example, he stated that
studies show that depression is "heavily underrecognized" by primary
care physicians and that, when it is
recognized, it is rarely treated adequately. He stated that he knows of instances
where patients have
suffered from strokes or other toxic side effects from psychiatric medications
which were incorrectly
prescribed by a primary care physician. Tr. 361 - 362.
Dr. Halpern, one of the primary care physicians who treats Medicaid patients
in Santa Cruz County, gave
testimony which was consistent with Dr. Gillette's testimony. Dr. Halpern testified
that, in the context of
his primary care practice, he treats patients with depression, panic disorders,
and personality disorders. Tr.
403. He stated that he has treated some of Petitioner's former patients and
that he is willing to prescribe
psychiatric medications if the patients come to him with an established psychiatric
medication profile. Dr.
Halpern indicated that he does not feel qualified to begin a patient on psychiatric
medications very often,
but that he can continue a patient on psychiatric medications once that profile
has been established by a
psychiatrist. Tr. 395. There is no indication in the record that this group
of doctors provides
psychotherapy services. Tr. 341, 395.
Dr. Halpern stated that the only situation in which he is comfortable being
the primary prescriber of
psychiatric medications is when a patient has a mild illness, such as a mild
depression. He indicated that,
for more serious conditions, he is increasingly uncomfortable prescribing psychiatric
medications and that
he is very uncomfortable when a patient is deeply disturbed. He stated that:
What I'm having to do nowadays, unfortunately, is I'm having to move into
my
discomfort zone more often than I like, in that I can't get psychiatric consultation
done as I would like to on
these patients.
Tr. 408.
This evidence shows that while technically both psychiatrists and primary care
physicians are allowed to
prescribe psychiatric medications, a psychiatrist, by virtue of his specialized
knowledge, has greater
expertise than a primary care physician in the area of diagnosing and treating
psychiatric disorders. This
evidence suggests that it might be possible for a primary care physician to
provide comparable psychiatric
care in very limited circumstances, such as where a psychiatric disorder is
very mild or where a patient has
an established medication profile and his condition remains stable. However,
this evidence shows that, in
most instances, treatment of psychiatric conditions by a primary care physician
is less than optimal care
and that such treatment might jeopardize the health of the patient. Since primary
care physicians do not
have the same level of expertise in treating psychiatric conditions as psychiatrists,
I find that primary care
physicians do not provide psychiatric health care which is equivalent to the
level of care provided by
psychiatrists. Therefore, I conclude that psychiatric health care provided by
primary care physicians is not
an alternative source of psychiatric health care contemplated by the regulations.
12/
Due to the lack of availability of outpatient psychiatric services in Santa
Cruz County, primary care
physicians are essentially being required to provide a greater amount of care
to such patients than they feel
they are capable of providing. The record supports the conclusion that such
care is far from optimal and at
times may compromise the health of the patient. Similarly, combining the psychotherapy
provided by
psychologists with the medical care provided by primary care physicians, while
an improvement in the
level of care, cannot be substituted for the greater expertise and experience
possessed by practicing
psychiatrists. The deficiencies in care afforded by psychologists and primary
care physicians still exist
when they combine their care. As patients' conditions change over time, warranting
modification in
medications, neither of these providers is equipped by training or experience
to properly recognize and
treat such conditions. While the record suggests that they may be forced to
treat such situations, this "make
do" care which is caused by the absence of outpatient psychiatric services
cannot be considered alternative
care, since it is not equivalent or comparable to the level of care provided
by Petitioner.
Dr. Gillette testified that, in some instances, the County Mental Health Program
refers psychiatric patients
to other mental health care providers, such as licensed clinical social workers,
or to marriage and family
counselors. Tr. 343 - 344. The record shows, however, that these mental health
care providers, like
psychologists, are not allowed to prescribe medication. Tr. 399. Therefore,
these mental health care
providers do not provide psychiatric health care which is equivalent in quality
to that provided by
psychiatrists and these providers are not an alternative source of psychiatric
health care contemplated by
the regulations. The record shows also that, even if these providers were an
alternative source of health
care, they are not permitted to be Medicaid providers. Tr. 426. 13/
In view of the foregoing, I find that, in most instances, the level of health
care provided by health care
providers who are not psychiatrists to individuals with psychiatric disorders
is not equivalent to the level of
care provided by Petitioner, and such care is not an alternative source of health
care within the meaning of
the regulations. I conclude that the evidence establishes that the mitigating
factor specified at 42 C.F.R.
1001.401(c)(3)(ii) is present in this case.
III. In evaluating the reasonableness of the three year exclusion, I must weigh
the evidence relevant to the
aggravating and mitigating factors enumerated in the regulations in light of
the goals of the Act.
Under the regulatory scheme set forth in 42 C.F.R. 1001.401, the three year
benchmark exclusion
imposed by the I.G. cannot be shortened below three years unless Petitioner
shows that one or more of the
mitigating factors specified in the regulations exists. In this case, Petitioner
has met his burden of proving
that one of the specified mitigating factors is present. Petitioner has shown
that, by virtue of his exclusion,
alternative sources of the type of health care items or services furnished by
him are not available, within
the meaning of 42 C.F.R. 1001.401(c)(3)(ii).
Since Petitioner has proven that this mitigating factor is present, it is possible
to shorten the three year
benchmark period of exclusion in this case. While the presence of this factor
makes it possible to shorten
the three year exclusion, it does not entitle Petitioner to an automatic reduction
of the three year exclusion
period. The regulation uses the word "may" to indicate the permissive,
discretionary use of this mitigating
factor as a basis for shortening the exclusion period. 42 C.F.R. 1001.401(c)(3).
The regulations do not
mandate a reduction in the exclusion period solely on the basis of any single
mitigating factor. Rather,
what controls the exclusion period is the relative weight of the material evidence
of such factor in the
context of the total record.
The regulations which govern this case contain no formula for assigning weight
to mitigating and
aggravating factors once such factors are established by the parties. 42 C.F.R.
1001.401. In the preamble
to the regulations, the comments include the following:
We do not intend for the aggravating and mitigating factors to have specific
values;
rather, these factors must be evaluated based on the circumstances of a particular
case.
* * * * *
The weight accorded to each mitigating and aggravating factor cannot be established
according to a rigid formula, but must be determined in the context of the particular
case at issue.
57 Fed. Reg. 3314, 3315.
Thus, in evaluating the reasonableness of an exclusion, I am required to explore
in detail, and assign
appropriate weight to, those regulatory factors which are aggravating or mitigating.
While the regulations
limit the specific factors which I may consider in evaluating the reasonableness
of an exclusion, I am still
guided by the goals of the Act in assigning weight to the factors which are
specified in the regulations. The
regulations promulgated by the Secretary cannot do more than interpret and implement
the Act itself.
Section 1102 of the Act authorizes the Secretary to publish only those rules
and regulations "not
inconsistent with this Act, as may be necessary to the efficient administration
of the functions with which
[she] is charged under this Act." Thus, the regulations should be applied
to produce a result which is
consistent with that required by the underlying statute. In evaluating the reasonableness
of an exclusion, I
must weigh those factors which the regulation directs me to consider in a manner
that is consistent with the
purposes of the Act.
Section 1128 of the Act is a civil statute and Congress intended it to be remedial
in application. The
remedial purpose of the exclusion law is to protect the integrity of federally-financed
health care programs
and the welfare of the programs' beneficiaries and recipients. The exclusion
law is intended to protect
program funds and beneficiaries and recipients from providers who have demonstrated
by their conduct
that they pose a threat to the integrity of such funds, or to the well-being
and safety of beneficiaries and
recipients. See S. Rep. No. 109, 100th Cong., 1st Sess. 1 (1987), reprinted
in 1987 U.S.C.C.A.N. 682.
The legislative history of the Act shows that, in setting the period of exclusion,
Congress intends that the
factfinder will consider such factors as the seriousness of the offense, the
impact of both the offense and
exclusion on beneficiaries, and the availability of alternative providers of
needed health care services. S.
Rep. No. 109, 100th Cong., 1st Sess. 12 (1987), reprinted in 1987 U.S.C.C.A.N.
693. Congress' intention
that the availability of alternate providers be considered in setting the duration
of the length of exclusions is
embodied in the regulations at 42 C.F.R. 1001.401(c)(3)(ii). Thus, this regulation
implements Congress'
intent that the factfinder consider the need to protect program beneficiaries
and recipients from being
deprived of needed health care as a result of a provider's exclusion.
In view of the fact that the purpose of the exclusion law is to protect federally-financed
health care
programs and the beneficiaries and recipients of those programs from health
care providers who pose a
threat to the integrity of those programs and to the welfare of the programs'
beneficiaries and recipients, the
regulations at 42 C.F.R. 1001.401 contemplate that the factfinder, in determining
the appropriate duration
of an exclusion, will balance two competing government interests. Under the
regulations, I must balance
the government interest in ensuring that Medicare and Medicaid programs and
their beneficiaries and
recipients will be protected against untrustworthy providers against the competing
government interest in
ensuring that Medicare and Medicaid beneficiaries and recipients will not be
deprived of needed health
care as a result of a provider's exclusion.
My authority in hearing and deciding cases pursuant to section 1128 of the
Act remains de novo authority.
See section 205(b) of the Act as incorporated by section 1128(f) of the Act;
42 C.F.R. 1005.20. I am not
charged with an appellate review of the I.G.'s actions, nor am I directed to
conduct an inquiry as to whether
the I.G.'s agent has discharged his or her duty competently in a particular
case. The purpose of my inquiry
is not to determine how accurately the I.G. applied the law to the evidence
which was before the I.G..
Instead, the purpose of my inquiry is to evaluate the reasonableness of the
exclusion de novo.
A de novo evaluation does not mean that I have unbridled discretion to modify
an exclusion. I must
sustain the exclusion if, based on an independent review, I conclude it comports
with the regulations'
criteria and the remedial purpose of the Act. I must modify the exclusion if,
based on an independent
review, I conclude that it does not comport with the criteria contained in the
regulations and with the
remedial purpose of the Act.
Consistent with the requirement to evaluate the reasonableness of an exclusion
de novo, I may consider
evidence which explains and develops an aggravating or mitigating factor. The
presence of an aggravating
or mitigating factor in a case may permit inferences about the reasonableness
of an exclusion. But far more
may be revealed by evidence which explains and develops an aggravating or mitigating
factor. Thus, I am
not limited to considering evidence which was before the I.G. at the time the
I.G. made the exclusion
determination. Nor am I limited to considering evidence which relates to conduct
which triggered the
statutory authority to exclude a provider. As long as evidence is relevant to
a regulatory factor, I must
evaluate that evidence to determine whether an exclusion is in accord with the
goals of the Act. Depending
on the circumstances of the case, such an analysis can work to the benefit of
the I.G. or Petitioner.
I will not construe the regulations in a manner which will prevent me from
evaluating fully the impact of
an aggravating or mitigating factor, either individually or collectively, on
a provider's fitness to participate
in the programs or to treat program beneficiaries and recipients. Applying the
clarifying regulations of
January 22, 1993 may reduce the scope of my inquiry somewhat from that set forth
Matesic, DAB 1327.
However, I construe the regulations to require that, once either the I.G. or
Petitioner proves the existence of
an aggravating or mitigating factor enumerated in 42 C.F.R. 1001.401(c)(2) or
(3), I must evaluate fully
the significance of that factor as it relates to the reasonableness of the Petitioner's
exclusion. This inquiry
is limited to the factors set forth in the regulations.
The decision in John M. Thomas, Jr., M.D., et al., DAB CR281 (1993), provides
support for my conclusion
that the regulations permit me to admit evidence which develops an aggravating
or mitigating factor as
long as the evidence relates to the factor under consideration and it sheds
light on the ultimate issue of
whether an exclusion is reasonably necessary to meet the Act's remedial goals.
In Thomas, which involved
an exclusion of more than five years imposed pursuant to section 1128(a)(1)
of the Act and 42 C.F.R.
1001.102, the administrative law judge held that parties should be permitted
to develop evidence which
explains and develops aggravating and mitigating factors.
The specific mitigating factor under consideration in Thomas was:
The record in the criminal proceedings, including sentencing documents, demonstrates
that the court determined that the individual had a mental, emotional or physical
condition before or during
the commission of the offense that reduced the individual's culpability; . .
.
42 C.F.R. 1001.102(c)(2). The administrative law judge in Thomas found support
for his conclusion in
the preamble to the regulations, which states:
this factor will not be considered as mitigating if there is an ongoing problem
that has not
been resolved, such that the program(s) and their beneficiaries continue to
be at risk.
57 Fed. Reg. 3315. The comment shows that the adjudicator is not limited to
considering evidence which
shows only that the sentencing judge found that the provider's culpability was
diminished by his mental
condition. Instead, assuming that the evidence shows that the threshold conditions
identified by this
regulation are present, the regulations contemplate a full explication of evidence
concerning an excluded
provider's mental condition in order to determine whether the provider's mental
condition affects his or her
trustworthiness to provide care. No part of 42 C.F.R. 1001.102 expressly authorizes
an administrative
law judge to consider a provider's recovery from a mental condition described
in subpart (c)(2) of the
regulation; nor does it expressly authorize an administrative law judge to analyze
the related issue of
whether a provider is likely to commit the same or similar offenses in the future.
Nevertheless, the
comments to this regulation indicate that these matters are logical corollaries
to the question of how much
weight this factor should be given in determining an appropriate exclusion.
In contrast to Thomas, the present case does not involve 42 C.F.R. 1001.102.
However, a similar analysis
can be applied to the factors enumerated in 42 C.F.R. 1001.401. For example,
in the present case,
Petitioner contends that one of the enumerated mitigating factors justifies
shortening the exclusion below
the three year benchmark period; the I.G. relies on aggravating factors to offset
or reduce the impact of
such mitigation. In such circumstances, Petitioner may offer any evidence which
is relevant to the
aggravating factors to rebut the implications of untrustworthiness arising from
the I.G.'s evidence of
aggravation. Evidence as to Petitioner's state of mind and rehabilitation, which
would not otherwise be
admissible, would be relevant to rebut the implications of untrustworthiness
arising from a specified
aggravating factor. 14/ However, general character evidence disigned to show
that Petitioner is "honest" or
a "good person" which is offered without regard to a specific aggravating
factor cannot be considered
under the regulations.
IV. The three year exclusion which the I.G. imposed against Petitioner is excessive.
Since Petitioner was excluded, there are no psychiatrists, except on rare occasions,
available to provide
outpatient psychiatric care to Medicaid patients who are not severely psychiatrically
impaired. Petitioner's
exclusion has created a substantial void in the mental health care delivery
system in Santa Cruz County,
and other health care providers such as psychologists, primary care physicians,
licensed clinical social
workers, and marriage counselors do not have the expertise or qualifications
to fill this void by providing
comparable services. I am obligated, pursuant to 42 C.F.R. 1001.401(c)(3)(ii),
to consider the
government interest in protecting Medicare and Medicaid patients from being
deprived of necessary health
care services. I find that this mitigating factor -- alternative sources of
the type of health care provided by
Petitioner are not available -- has substantial weight. In the absence of any
offsetting aggravating factor,
this mitigating factor has sufficient independent weight to warrant decreasing
the three-year exclusion
already imposed.
The I.G. argues that there are two aggravating factors present in this case
which have sufficient weight to
offset this mitigating factor. The I.G. contends that: 1) the acts that resulted
in Petitioner's conviction, or
similar acts, were committed over a period of one year or more; and 2) the acts
that resulted in the
conviction, or similar acts, had a significant adverse physical, mental, or
financial impact on program
beneficiaries or other individuals. I must now determine if these aggravating
factors are present in this case
and, if so, I must assign weight to them in accordance with the government interest
in protecting the
Medicare and Medicaid programs and their beneficiaries and recipients from being
exposed to
untrustworthy providers. I must then determine the appropriate duration of the
exclusion by balancing the
government interest in ensuring that program beneficiaries and recipients are
not deprived of needed health
care against the competing government interest in ensuring that they are protected
from untrustworthy
providers.
A. The acts that resulted in Petitioner's conviction or similar acts were committed
over a period of one
year or more.
The I.G. contends that there are two aggravating factors present in this case
which offset the mitigating
factor that alternative sources of health care are not available. The first
aggravating factor cited by the I.G.
is that the acts that resulted in Petitioner's conviction or similar acts were
committed over a period of one
year or more. 42 C.F.R. 1001.401(c)(2)(i). I conclude that the I.G. has established
this aggravating
factor.
The record shows that, on June 15, 1987, Mr. Earl Door, an investigator with
the California Attorney
General's Office, asked the manager of a pharmacy if she knew any doctors in
the area who stood out as
high prescribers of drugs or narcotics in relation to other doctors in the community.
The pharmacy
manager told Investigator Door that she knew of six of Petitioner's patients
who brought in prescriptions to
be filled on a regular basis and that these six individuals appeared to be addicts.
Upon further
investigation, Investigator Door discovered that all six of these patients were
Medicaid recipients and that
three of them had drug or narcotic violations which ranged from being under
the influence of a drug or
narcotic to sales of narcotics. As a result of this information, Investigator
Door commenced an undercover
criminal investigation of Petitioner. I.G. Ex. 1 at 1 - 2.
The first undercover operation involving Petitioner occurred on November 13,
1987. The undercover
operator visited Petitioner's office posing as a potential patient. He told
Petitioner that he was under stress
and that he wanted some codeine. Petitioner did not give the operator a prescription
on that occasion. I.G.
Ex. 1 at 2 - 3.
Five additional undercover operations were conducted on February 16, 1988,
July 13, 1988, August 4,
1988, August 23, 1988, and October 11, 1988 by three different operators posing
as patients. In each
instance, Petitioner issued prescriptions for codeine. Codeine is a controlled
substance. Codeine is an
analgesic narcotic which is used to treat pain. The undercover operators did
not complain of pain or give
any physical symptoms in any of these operations. I.G. Ex. 1 at 5 - 18, I.G.
Ex. 3; Tr. 50.
Dr. David H. Schneider, an employee of CDHS, reviewed the reports of the five
1988 undercover
operations to provide an independent professional opinion regarding the appropriateness
of Petitioner's
prescriptions for codeine during the course of these undercover operations.
Dr. Schneider concluded that
there was no medical justification for prescribing codeine in all of these operations.
I.G. Ex. 1 at 19.
After a lull of approximately 14 months, the undercover operations were resumed.
Six additional
undercover operations were conducted on December 15, 1989, March 13, 1990, March
29, 1990, April 3,
1990, April 13, 1990, and April 19, 1990 by three operators posing as patients.
One of these operators had
posed as a patient in one of the previous five operations. For each operation,
the operator was instructed to
ask Petitioner for a prescription without presenting any psychiatric or medical
complaints. Petitioner
issued prescriptions for codeine in five of the operations and a prescription
for vicodin in one of the
operations. Vicodin is a controlled substance. It is also an analgesic narcotic
which is used for the
treatment of pain. I.G. Ex. 1 at 20 - 29, I.G. Ex. 3; Tr. 55.
Dr. Anthony Atwell, a psychiatrist, reviewed the reports of the six 1990 operations.
He concluded that the
prescriptions issued by Petitioner in the course of these six operations had
"no psychiatric or
psychopharmacologic basis" and that they were issued without evidence of
"any medical or psychiatric
pathology or legitimate medical purpose." I.G. Ex. 3.
Based on the foregoing, on July 18, 1990, a felony complaint was filed in Santa
Cruz County Municipal
Court by the California Attorney General's Office, charging Petitioner with
six felony counts of knowingly,
willfully and unlawfully prescribing a controlled substance without medical
necessity, to wit: vicodin or
codeine, to an undercover operator, who was not under Petitioner's treatment
for a pathology or condition
other than addiction to a controlled substance, in violation of section 11154
of the California Health and
Safety Code. I.G. Ex. 2. On July 19, 1990, Investigator Ponta executed an arrest
warrant on Petitioner "for
prescribing controlled substances without medical necessity." I.G. Ex.
1 at 30. Petitioner was bound over
as charged in the Superior Court for the County of Santa Cruz. On October 3,
1990, the California
Attorney General's Office filed an Information in the Santa Cruz County Superior
Court containing the
same charges as the Felony
Complaint. Tr. 204; I.G. Ex. 4.
Pursuant to a plea bargain, on August 27, 1991, Petitioner pled nolo contendere
to count two of the
Information. As part of the plea bargain, this count was reduced to a misdemeanor
and the remaining five
felony counts were dismissed. The court accepted the plea, and sentenced Petitioner
to two years of
unsupervised probation and ordered Petitioner to pay a fine of $1000 and costs
of $1330. I.G. Ex. 5; Tr.
204 - 205.
The uncontroverted evidence of record shows that the aggravating circumstance
at 42 C.F.R.
1001.401(c)(2)(i), the acts that resulted in the conviction or similar acts
were committed over a period of
one year or more, is present in this case. Petitioner was convicted of knowingly
and willfully prescribing a
controlled substance for no legitimate medical purpose during the course of
an undercover operation which
took place on March 13, 1990. The record shows that this was not an isolated
instance of this type of
misconduct. The evidence adduced by the I.G., and not controverted by Petitioner,
establishes that
Petitioner engaged in inappropriate and illegal drug prescribing practices on
ten other occasions. These
undercover operations occurred over a period of more than one year, spanning
a 26 month period from
February 16, 1988 to April 19, 1990.
This evidence shows that Petitioner demonstrated a pattern of engaging in inappropriate
and illegal drug
prescribing practices. I infer from this evidence that, at least at the time
of Petitioner's arrest in 1990,
Petitioner demonstrated a propensity to engage in illegal drug prescribing practices
in the future.
In weighing this factor I observe that the record is devoid of evidence establishing
that Petitioner
unlawfully prescribed controlled substances to patients who were not undercover
agents. 15/ Petitioner
testified that he treated hundreds of patients during the 26 month period in
question. Tr. 290. There is no
evidence of record establishing that Petitioner illegally prescribed controlled
substances to any of these
hundreds of other patients. When viewed in this broader context, the significance
of this factor is
diminished. I would have assigned more weight to this factor if the I.G. had
shown that Petitioner
routinely engaged in improper prescribing practices with his other patients
over the 26 month period. The
I.G. made no such showing. On the contrary, there is affirmative evidence showing
that Petitioner did not
have the reputation among his professional colleagues as being an individual
who was operating a "drug
mill." P. Ex. 1 at 2.
The I.G. contends that the evidence "strongly suggests" that Petitioner
misprescribed medication to several
patients who were not undercover agents prior to the commencement of the investigation.
I.G. posthearing
reply brief at 13. Petitioner contends that there is insufficient evidence to
establish that he engaged in
misprescribing practices prior to the investigation. Petitioner posthearing
brief at 3.
The record shows that the undercover investigation into Petitioner's prescribing
practices was initiated after
the manager of a pharmacy told him that six of Petitioner's patients who appeared
to be addicts had been
coming in with prescriptions from Petitioner on a regular basis. Petitioner
produced the prescription
profiles of these six patients, and he indicated that he obtained them from
the California Attorney General's
office. Tr. 85, 90; P. Ex. 11; I.G. Ex. 1 at 1 - 2. Petitioner testified that
he had never even met two of the
six individuals identified by the pharmacy manager. Tr. 91, 239. The prescription
profiles of these two
patients do not list Petitioner as a prescribing physician. The prescription
profiles of the remaining four
individuals show that Petitioner prescribed drugs to them. P. Ex. 11. Three
of these four individuals had a
history of narcotics violations. I.G. Ex. 1 at 1 - 2.
This evidence shows that, with respect to at least three of Petitioner's patients,
Petitioner prescribed drugs
to individuals who had a history of narcotic violations. While this evidence
was sufficient for the purpose
of commencing a criminal investigation, it is not sufficient to establish that
the medications prescribed by
Petitioner to these individuals was, in fact, illegal. 16/ Petitioner testified
that he provided primary care in
the context of providing psychiatric care, and that, as a result, he prescribed
medicine for physical
conditions. While Petitioner did not state the specific physical conditions
for which he prescribed drugs in
each of the instances shown on the prescribing profiles, he indicated that he
prescribed codeine to one of
the patients for migraine headaches and that he prescribed codeine to another
patient for alcoholic
peripheral neuropathy, a painful condition. Tr. 239. In the absence of definitive
evidence establishing that
the prescriptions appearing on the prescription profiles were medically inappropriate,
I do not conclude
that Petitioner engaged in improper prescribing practices to patients prior
to February 16, 1988.
B. The acts that resulted in the conviction or similar acts had a significant
adverse physical, mental or
financial impact on program beneficiaries or other individuals or the Medicare
or State health care
programs.
The second aggravating factor cited by the I.G. is that the acts that resulted
in the conviction or similar acts
had a significant adverse physical, mental or financial impact on program beneficiaries
or other individuals
or the Medicare or State health care programs. 42 C.F.R. 1001.401(c)(2)(ii).
I conclude that the I.G. has
established this aggravating factor.
Petitioner was convicted of violating section 11154 of the California Health
and Safety Code, which
prohibits physicians from knowingly prescribing a controlled substance to individuals
unless there is a
legitimate medical need to do so. I.G. Ex. 9. This State law regulating the
prescription of controlled
substances reflects a legislative conclusion that these substances are potentially
dangerous to the health and
safety of consumers. Abelard A. Pelaez, M.D., DAB CR157 (1991). Because of the
potential for harm
and abuse, the California State government has determined that these substances
must be strictly regulated
for the public good.
The record contains ample evidence of the dangers of the inappropriate use
of codeine and vicodin, the
controlled substances Petitioner improperly prescribed in the course of the
undercover investigation.
Based on his extensive training in drugs and narcotics, Investigator Door testified
that codeine and vicodin
are analgesic narcotics used to treat pain, and that they should not be prescribed
unless a physician
performs a medical examination. Investigator Door testified that if a physician
prescribes these narcotics
without performing a medical examination and the patient has a serious illness,
the narcotic can mask the
patient's pain symptoms and he may not seek the medical attention he needs.
Tr. 39, 50, 54 - 57.
In addition, Investigator Door testified that if narcotic analgesics are used
inappropriately they can be both
physically and psychologically addictive. He indicated that if an individual
takes one prescription of
codeine consisting of 30 tablets, that individual will experience some withdrawal
symptoms, such as a
simple headache, when he finishes taking all 30 tablets. If an individual continues
to use this narcotic over
a period of weeks or months, he will become addicted to it. Investigator Door
stated also that codeine is
often abused by mixing it with other drugs or alcohol to give a euphoric effect.
Tr. 57 - 61. According to
Investigator Door, addicted individuals may become "doctor shoppers"
and go to many different doctors to
get their prescriptions because they have built up a tolerance to the drug.
Tr. 62 - 63. In addition, heroin
addicts might use codeine when heroin is unavailable, to minimize their withdrawal
symptoms. Tr. 55.
I find that the credible evidence of record shows that the aggravating circumstance
at 42 C.F.R.
1001.401(c)(2)(ii), the acts that resulted in the conviction or similar acts
had a significant adverse physical,
mental, or financial impact on program beneficiaries or other individuals or
the Medicare or State health
care program, is present in this case. The evidence establishes that providing
patients with controlled
substances for no legitimate medical purpose endangers the health and well-being
of those patients.
Petitioner, through his position as a medical doctor, was allowed access to
these controlled substances and
was entrusted with the responsibility to prescribe these controlled substances
in an appropriate, safe
manner. Petitioner abused that trust, and his misconduct shows that he is capable
of engaging in illegal
prescribing practices which have potentially serious consequences for his patients.
The fact that
Petitioner's improper prescribing practices involved undercover operators who
posed as patients does not
derogate from my conclusion that this factor is present in this case. Had Petitioner
engaged in similar
inappropriate prescribing practices with patients who were not impostors, the
evidence shows that the
health and safety of those patients would be threatened.
The I.G. contends that this factor, coupled with the other aggravating factor
at 42 C.F.R.
1001.401(c)(2)(i), has sufficient weight to offset any mitigation resulting
from the lack of availability of
alternative sources of health care. Petitioner offered evidence at the hearing
in an effort to rebut the I.G.'s
contention.
C. Petitioner demonstrated that he does not continue to pose a threat to the
Medicare and Medicaid
programs or to their beneficiaries and recipients.
Petitioner testified that his inappropriate prescribing practices were not
motivated by self-interest, but
rather by a humanitarian concern for the well-being of his patients. Petitioner
testified that the reason he
prescribed the controlled substances to the undercover operators is that he
was trying to induce them to
enter into a "therapeutic alliance" with him. Petitioner indicated
that he was willing to prescribe small
amounts of medication for a limited period of time to these individuals in an
effort "to link with them and
to get them to come in to engage in psychotherapy." Tr. 267 - 268, 287
- 289, 295, 297; Petitioner's
posthearing brief at 3.
Petitioner explained that, because he was the only psychiatrist who routinely
treated indigent patients in the
context of a private outpatient practice, he became over-involved with his patients
and he lost contact with
other members of the medical community. As a result, he was out of touch with
acceptable standards of
medical care. According to Petitioner, his isolation in the medical community
was compounded by the fact
that he had voluntarily resigned from serving on the staff at Dominican Hospital
several years earlier and
the fact that he was not a member of any psychiatric societies. Petitioner indicated
that, due to his
professional isolation and his lack of communication with other psychiatrists,
he was more likely to engage
in inappropriate medical practices. Petitioner stated also that his treatment
practices were outmoded
because he had been lax in taking continuing education courses related to controlled
substances. Tr. 258,
277, 279, 297 - 300.
The I.G. characterized Petitioner's testimony explaining his reasons for engaging
in the illegal prescribing
activity as "extraordinary" and contended that it was totally unsupported
by any corroborating evidence.
I.G. posthearing brief at 51. I disagree.
Petitioner's testimony is supported by other evidence of record. The reports
of the undercover operations
are replete with statements showing that Petitioner repeatedly invited the undercover
operators to enter into
psychotherapy. In fact, Petitioner did not provide codeine to the undercover
operator who requested it to
treat stress during the first operation which occurred on November 13, 1987.
Instead, he indicated that
codeine was a "band-aid approach" and he invited the operator to work
with him to achieve a more
permanent solution to his problems. I.G. Ex. 1 at 2. In a subsequent contact
with the same operator on
February 16, 1988, Petitioner did prescribe some codeine, but he warned the
operator that he could not be
relied upon to continue to provide prescriptions for stress because of his belief
that there are better ways to
handle stress. Petitioner again invited the operator to come back if the operator
wished to explore other
ways to handle stress. I.G. Ex. 1 at 6. Petitioner repeatedly made similar statements
in other operations.
I.G. Ex. 1 at 13, 15, 27.
In addition, Petitioner's medical colleagues agreed with Petitioner's assessment
of the reasons why he
engaged in the inappropriate prescribing practices. In a letter dated December
31, 1990, they noted
Petitioner's professional isolation and stated that this isolation "resulted
in [Petitioner's] increasing reliance
on his own judgment and methods with decreasing reference to the standards of
his peers in our
community." P. Ex. 1 at 3. Petitioner's colleagues expressed the view that
Petitioner did not suffer from
chemical dependency or mental illness and that he was not motivated to inappropriately
prescribe
medication by personal financial gain. Instead, they stated that Petitioner
could be faulted for "clinical
naivete and perhaps an over-involvement in sense of mission toward those in
various states of need and
psychological pain." P. Ex. 1 at 3.
The I.G. asserts that, even if it is true that Petitioner was motivated by
humanitarian concern for his
patients, this would not minimize the seriousness of his misconduct. The I.G.
points out that testimony by
Petitioner's own witness, Dr. Gillette, establishes that prescribing controlled
substances in order to entice an
individual into psychotherapy is not within the standard of care. I.G. posthearing
brief at 51.
I agree with the I.G. that Petitioner was convicted of a serious criminal offense.
Petitioner's inappropriate
prescribing practices demonstrate that he has displayed exceedingly poor judgment.
Prescribing controlled
substances without a legitimate medical need is dangerous, and such misconduct,
were it to continue,
would pose a grave threat to the integrity of the federally-financed health
care programs served by
Petitioner and to the welfare of program beneficiaries and recipients. Nevertheless,
Petitioner's motivation
for his misconduct sheds light on the degree of potential harm resulting from
his misconduct. In addition,
Petitioner's motivation sheds light on the likelihood that Petitioner will continue
to engage in the same
misconduct in the future.
The record shows that Petitioner's prescribing practices were motivated by
a concern for his patients and
that he actively took precautions to limit the potential for harming his patients.
Petitioner testified that he
made every effort not to give narcotics to individuals who were acutely addicted.
Tr. 276 - 277, 287. The
investigative reports support this claim. They show that Petitioner repeatedly
tried to determine if the
operators were acutely dependent on drugs before he prescribed medications to
them. In some instances,
he attempted to determine this by interviewing the operators, and, in other
instances, he inspected the
operators' arms to determine if they had telltale needle marks. I.G. Ex. 1 at
6, 10, 25. Petitioner stated that
he was aware that controlled substances are potentially addictive, and he expressed
the view that the
relatively small amounts he prescribed to the undercover operators would have
had a minimal adverse
impact. Tr. 285. Petitioner stated also that he was willing to continue to prescribe
controlled substances
for only a limited period of time. Tr. 295. This evidence suggests that Petitioner
was aware of the dangers
of controlled substances and that he took steps to limit the exposure of his
patients to these dangers.
I accept Petitioner's explanations that his misconduct was motivated by good
intentions. Petitioner's benign
intentions do not excuse his criminal misconduct. However, the fact that Petitioner
has shown that he was
not motivated by venality suggests that he will not, in the future, be likely
to engage in illegal drug
transactions based solely on greed or a malevolent intent. Moreover, there is
credible evidence showing
that the circumstances which led to Petitioner's wrongdoing no longer are present.
Based on this evidence,
I am persuaded that there is little likelihood that Petitioner will again engage
in inappropriate prescribing
practices in the future.
Petitioner has satisfied me by his testimony and his demeanor that he now realizes
that it is inappropriate to
induce patients to begin psychotherapy by prescribing controlled substances.
Petitioner testified that he
was "traumatized" by his criminal conviction, and that this caused
him to take steps to correct the
circumstances that led to his misconduct. Tr. 253. Petitioner stated that since
his conviction he has had
123 hours of continuing medical education and that 23 of these hours have been
on the subject of chemical
dependency and drug use. In addition, he has passed the written part of the
American Board of Psychiatry
exam. Tr. 259 - 260. Petitioner stated that as a result of his continuing education
courses, he realizes that
he made a mistake and that he is now more cautious in his prescribing practices.
Tr. 266, 298. Petitioner
stated that since his conviction, he has become less isolated professionally.
He joined the staff of Natividad
Medical Center in an attempt to integrate himself into the medical community.
Tr. 253, 300.
The record contains letters from Petitioner's professional colleagues which
support his claim that he can
now be trusted to prescribe controlled substances appropriately. In a letter
dated September 14, 1991,
Walter J. Wilcox, M.D., Petitioner's immediate supervisor at Natividad Medical
Center, stated that
Petitioner's "use of medications can best be described, I believe, as conservative
and cautious." P. Ex. 4 at
2. Anthony Sforza, M.D., Medical Director at Natividad Medical Center, stated
in an August 1, 1991 letter
that he has closely monitored Petitioner's work and that his "prescribing
practices are excellent." P. Ex. 3.
D. The interest in providing access to outpatient psychiatric care outweighs
the interest in program
protection in this case, and justifies shortening the exclusion.
Both of the aggravating factors cited by the I.G. are present in this case.
However, when I consider the
evidence relevant to these factors in light of the remedial purpose of the Act
to protect program
beneficiaries and recipients from untrustworthy providers, I find that these
factors do not have sufficient
weight to justify a lengthy exclusion in this case and they do not completely
offset the impact of the
mitigating factor specified at 42 C.F.R. 1001.401(c)(3)(ii). Balancing the need
to protect program
beneficiaries and recipients from being deprived of needed health care against
the need to protect them
from untrustworthy providers, I find that the three year benchmark exclusion
is excessive in this case.
The evidence demonstrates that the absence of psychiatric services provided
by Petitioner and the lack of
available alternative sources of psychiatric care deprive Medicaid patients
in Santa Cruz of needed health
care. This mitigating factor justifies shortening the exclusion significantly
below the three year benchmark
period. On the other hand, the existence of the criminal conviction and the
two aggravating factors
specified at 42 C.F.R. 1001.401(c)(2)(i) - (ii) support an exclusion of some
length in this case. Petitioner
improperly prescribed controlled substances to undercover operators on eleven
different occasions over a
26 month period, a period of more than a year. Moreover, Petitioner's improper
prescribing practices could
have endangered the health and well-being of his patients. Therefore, at least
at the time of his arrest in
1990, Petitioner had demonstrated that he was untrustworthy to provide care
to Medicare and Medicaid and
their beneficiaries and recipients.
In balancing the competing interests in access to health care and program protection,
I assign some weight
to the fact that Petitioner improperly prescribed controlled substances to undercover
operators over a
period of more than one year. However, the impact of this factor is diminished
by the fact that the record
is devoid of evidence establishing that Petitioner improperly prescribed controlled
substances to his
hundreds of patients who were not undercover operators during the 26 month period
in question. The
weight to be accorded the duration of Petitioner's conduct is also diminished
because there was a 14 month
hiatus in the undercover investigation, and there is no evidence that Petitioner
illegally prescribed
controlled substances during this 14 month period.
Similarly, I assign some weight to the fact that Petitioner's conduct had the
potential to cause harm to his
patients. The impact of this factor is diminished by the evidence showing that
Petitioner's inappropriate
prescribing practices were motivated by a humanitarian concern for his patients
and that he consciously
took steps to limit the potential harm to his patients. The evidence shows that
at the time he engaged in his
improper prescribing practices, Petitioner was isolated from the professional
community and that as a
result, he was out of touch with acceptable standards of care regarding prescribing
medications.
The weight of both aggravating factors is diminished by the evidence showing
that the circumstances
which led to Petitioner's wrongdoing have been sufficiently altered so that
Petitioner no longer poses a
threat to program beneficiaries and recipients. There is no evidence that Petitioner
continued to engage in
improper prescribing practices after his arrest in 1990. To the contrary, the
evidence shows that Petitioner
has actively taken steps to educate himself about proper drug prescribing practices
and that he has
integrated himself into the professional psychiatric community. Since his conviction,
Petitioner has
worked in Natividad Medical Center, and his prescribing practices have conformed
with acceptable
standards of care. Based on the totality of the evidence, I conclude that modifying
the exclusion to end
upon the effective date of this decision comports with the remedial objectives
of the Act.
CONCLUSION
I conclude that the three year exclusion which the I.G. imposed against Petitioner
is excessive. The
exclusion is modified to end upon the effective date of this
decision.
____________________________
Edward D. Steinman
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three
types of federally financed health care programs, including Medicaid. Unless
the context indicates
otherwise, I use the term "Medicaid" hereafter to represent all State
health care programs from which
Petitioner was excluded.
2. I define the effective date of the decision to be the date the decision
becomes "final and binding on the
parties" pursuant to 42 C.F.R. 1005.20.
3. The transcript of the hearing and the exhibits admitted into evidence at
the hearing will be referred to
as follows:
Hearing Transcript Tr. (page)
Petitioner Exhibits P. Ex. (number) at (page)
I.G. Exhibits I.G. Ex. (number) at (page)
4. Moreover, 42 C.F.R. 1001.401 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.
5. In addition, an appellate panel of the DAB held that the January 29, 1992
regulations do not
retroactively apply in cases involving exclusion determinations made prior to
the regulations' publication
date. Behrooz Bassim, M.D., DAB 1333 (1992). The present case does not involve
an issue of retroactive
application of regulations because the exclusion determination is dated October
15, 1992, which is
subsequent to the publication of the January 29, 1992 regulations.
6. In Holmes, I set forth the legal standard which I am following in this case.
Both Dr. Holmes and the
Petitioner here were excluded for three years pursuant to section 1128(b)(3)
of the Act. Both Dr. Holmes
and the Petitioner here were excluded after January 29, 1992 and both argued
that the mitigating factor at
42 C.F.R. 1001.401(c)(3)(ii) is a basis for reducing their three year exclusions.
7. A substantial portion of the population of Santa Cruz County consists of
Hispanic farm laborers. Tr.
237. Although Petitioner indicated there were only two Spanish speaking psychiatrists
in Santa Cruz
County, the record does not permit me to make a finding on the issue of whether
speaking Spanish to
Hispanic patients is an essential element of the treatment which cannot be provided
by a monolingual
English speaking psychiatrist. Such evidence could be relevant to the determination
whether alternative
sources of medical care equivalent to that provided by Petitioner currently
exist in Santa Cruz County.
8. The computer printout referred to "Medicare/Medi-Cal Providers."
I read this to mean that the
computer printout listed providers who are enrolled in the Medicare program
or the California State
Medicaid program or both programs. In addition, the computer program contained
provider enrollment
information in the counties of Monterey, Santa Clara, and Santa Cruz. Since
the parties agreed that Santa
Cruz County is the relevant geographical area for determining the availability
of alternative health care for
the purposes of this case, I did not consider provider enrollment information
in the counties of Monterey
and Santa Clara.
9. Evidence was adduced at the hearing as to whether the physicians practicing
in Santa Cruz County
named in the printout were willing to accept new Medicare or Medicaid patients.
As will be discussed later
in this decision, only on rare occasions do psychiatrists in Santa Cruz County
provide outpatient care to
Medicaid recipients. This reluctance is based on the reimbursement rates and
paperwork requirements
imposed by Medicaid. Tr. 329, 417 -418.
10. Dr. Gillette indicated that he believed Dr. Berman also might accept Medicaid
patients on rare
occasions. However, Dr. Berman himself testified that he does not accept new
Medicaid patients.
11. The County of Santa Cruz Health Center at 1060 Emeline Avenue is known
also as Santa Cruz
County Community Mental Health Services and it is part of the County Mental
Health Program. Tr. 319,
471 -472.
12. The I.G. points out that Petitioner testified that he provided primary
care in the course of his
psychiatric practice. Based on this, the I.G. argues that primary care physicians
should be considered an
alternative source of the type of health care provided by Petitioner. I accept
that, in the context of
providing psychiatric care to patients, Petitioner may have treated some common
physical complaints.
However, the record is clear that the focus of Petitioner's practice is the
provision of psychiatric health
care. Therefore, the focus of this inquiry is whether other sources of health
care are an available alternative
to the psychiatric care, rather than to the primary care, provided by Petitioner.
13. Dr. Gillette testified that licensed clinical social workers are permitted
to be Medicare providers. Tr.
343.
14. Evidence of remorse or rehabilitation relating to an aggravating factor
also could be admitted to
prove the unreasonableness of an exclusion in a case where the I.G. has relied
on that aggravating factor to
impose an exclusion in excess of three years. However, in such a case, the exclusion
could not be reduced
below the three year benchmark absent proof of a mitigating factor specified
in 42 C.F.R. 1001.401(c)(3).
15. Since the I.G. relies only on incidents involving undercover operators
in establishing the presence of
the aggravating factor at 42 C.F.R. 1001.401(c)(2(i), then the length of the
period over which the
misconduct occurred is directly related to the length of the undercover investigation.
The I.G. asserts that
there is no indication that Petitioner's unlawful prescriptions for controlled
substances would have stopped
when they did, were it not for the fact that Petitioner was arrested on July
19, 1990. While this may be
true, the converse to this statement is also true. Had the investigation stopped
sooner, the length of the
period of time in which Petitioner engaged in illegal activities would have
been shorter. In this regard, I
note that there was a 14 month hiatus in the undercover investigation during
the period from October 11,
1988 to December 15, 1989. There is no evidence that Petitioner illegally prescribed
controlled substances
during this 14 month period.
16. Even Investigator Door testified that the prescription profiles of the
individuals mentioned by the
pharmacy manager "were just an indicator that there was a problem"
and that his office "didn't focus on
these profiles for the prosecution." Tr. 100.