$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Roniel Rodriguez, III, M.D., Petitioner,
- v. -
The Inspector General.
DATE: March 18, 1994
Docket No. C-93-124
Decision No. CR307
DECISION
On August 26, 1993, the Inspector General (I.G.) notified
Petitioner that he was being excluded from participation in the
Medicare, Medicaid, Maternal and Child Health Services Block Grant,
and Block Grants to States for Social Services 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 for
a hearing and a decision. On October 7, 1993, I held a prehearing
conference by telephone. At that conference, the parties agreed to
stay the hearing in this case. The parties agreed also that the
issues in this case are, in substance, identical to the issues in
Jose Ramon Castro, M.D., DAB CR259 (1993), which had been appealed
to United States District Court. Petitioner acknowledged that the
decision by the District Court in Castro might control the outcome
of this case. Therefore, Petitioner requested that the hearing be
stayed until Castro was decided, and the I.G. agreed with
Petitioner's request. On October 13, 1993, I issued an order
staying the hearing of this case pending the District Court's
review of Castro.
On February 23, 1994, I conducted a status conference with the
parties by telephone. At that conference, the I.G. stated that an
agreement in principle had been reached to settle Castro and that
it was unlikely that the District Court would issue a decision in
the case. Petitioner expressed an interest in obtaining a decision
in this case based on stipulated facts and conclusions of law. On
February 25, 1994, I issued an order containing a summary of the
stipulations arrived at between the parties during the February 23,
1994 conference. That February 25, 1994 order recited the parties'
agreement that, given their stipulations, there was no need to
brief the issues in this case. Instead, the parties requested that
I issue a decision based on their stipulations. I gave the parties
ten days from their receipt of my February 25, 1994 order to object
to the summary of their stipulations. I advised them also that, at
the conclusion of the ten-day period, I would close the record and
proceed to issue a decision.
Neither Petitioner nor the I.G. has objected to my February 25,
1994 order. I have carefully considered the parties' stipulations
and the applicable law. Based on these, I conclude that the I.G.
was authorized to exclude Petitioner under section 1128(b)(3) of
the Act. I conclude further that regulations require that I
sustain the three-year exclusion imposed and directed against
Petitioner by the I.G.
ISSUES
The issues in this case are whether:
1. The I.G. was authorized to impose and direct an exclusion
against Petitioner by section 1128(b)(3) of the Act; and
2. Regulations require that I sustain the three-year
exclusion which the I.G. imposed and directed against Petitioner.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. 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. Stipulation, Par. 1; Act, section 1128(b)(3). 2/
2. The Secretary of the United States Department of Health and
Human Services (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).
3. The I.G. had authority to impose and direct an exclusion
against Petitioner pursuant to section 1128(b)(3) of the Act.
Findings 1, 2.
4. Regulations published on January 29, 1992 establish 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. 42
C.F.R. Part 1001.
5. 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.
6. 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 (Board), 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).
7. My adjudication of the length of the exclusion in this case is
governed by the criteria contained in 42 C.F.R. 1001.401.
Finding 6.
8. An exclusion imposed pursuant to section 1128(b)(3) of the Act
must be for a period of three years, unless aggravating or
mitigating factors form a basis for lengthening or shortening the
period. 42 C.F.R. 1001.401(c)(1).
9. In this case, the I.G. did not impose an exclusion of more than
three years based on the presence of aggravating factors. See 42
C.F.R. 1001.401(c)(2)(i) - (iv).
10. There exist no mitigating factors in this case which could be
a basis for my finding that the three-year exclusion imposed and
directed by the I.G. against Petitioner is unreasonable.
Stipulation, Par. 2; see 42 C.F.R. 1001.401(c)(3)(i) - (ii).
11. In the absence of aggravating or mitigating factors,
regulations require that the three-year exclusion imposed and
directed by the I.G. against Petitioner be sustained. Findings 1
- 10; 42 C.F.R. 1001.401(c).
RATIONALE
There are no disputed issues of material fact in this case.
Petitioner acknowledges that he was convicted of a criminal offense
within the meaning of section 1128(b)(3) of the Act. Petitioner
does not assert the presence of any of the mitigating factors which
I may consider under 42 C.F.R. 1001.401(c)(3) as a possible
basis for reducing his exclusion below the three-year benchmark
required by 42 C.F.R. 1001.401(c)(1).
The issues in this case are essentially identical to those I
considered in my Castro decision. 3/ Stipulation, Par. 3. I will
not repeat verbatim what I said in that decision. However, in
order to provide a complete decision here, I reiterate my principal
conclusions in Castro.
Board appellate panels and administrative law judges delegated to
hear cases under section 1128 of the Act have held consistently
that section 1128 is a remedial statute. Prior to January 22,
1993, administrative law judges and Board appellate panels held
that exclusions imposed pursuant to section 1128 were reasonable
only insofar as they were consistent with the Act's remedial
purpose. Robert Matesic, R.Ph., d/b/a Northway Pharmacy, DAB 1327,
at 7 - 8 (1992). The Act's remedial purpose was identified as
being to protect program beneficiaries and recipients from
providers who are not trustworthy to provide care. Id.
In Matesic, a Board appellate panel discussed the kinds of evidence
which should be considered by administrative law judges in hearings
as to the reasonableness of exclusions. That evidence included
evidence which related to:
the nature of the offenses committed by the provider, the
circumstances surrounding the offense, whether and when the
provider sought help to correct the behavior which led to the
offense, how far the provider has come toward rehabilitation, and
any other factors relating to the provider's character and
trustworthiness.
Id. at 12.
Administrative law judges and Board appellate panels found that
excluded parties' rights under section 205(b) of the Act to de novo
hearings regarding the reasonableness of their exclusions meant
that those parties had the right to present at hearings any
evidence which was relevant to their trustworthiness to provide
care and which comported with the factors identified in Matesic.
Bernardo G. Bilang, M.D., DAB 1295 (1992); Eric Kranz, M.D., DAB
1286 (1991). This meant that excluded parties were permitted to
offer evidence at hearings which related to their trustworthiness
to provide care, even if that evidence had not been considered by
the I.G. in making her exclusion determination. These standards
for adjudication of the reasonableness of exclusions were found to
apply in all cases where exclusions had been imposed and directed
pursuant to section 1128(b) of the Act.
On January 29, 1992, the Secretary published regulations which, at
42 C.F.R. Part 1001, established criteria for the I.G. to apply in
determining to impose and direct exclusions pursuant to section
1128 of the Act. In decisions issued subsequent to the publication
of these regulations, administrative law judges held consistently
that the regulations did not establish criteria to be used by them
in adjudicating the reasonableness of exclusions. Castro, DAB
CR259, at 9 (see decisions cited therein). In Bertha K.
Krickenbarger, R.Ph., DAB CR250 (1993), I held specifically that 42
C.F.R. 1001.401, which governs the I.G.'s exclusion
determinations under section 1128(b)(3) of the Act, did not apply
in administrative hearings concerning such exclusions.
The administrative law judges' decisions which considered the
applicability of these regulations to administrative hearings
concluded further that, if the Part 1001 regulations were found to
govern administrative hearings, then the regulations would conflict
with the Act in the following respects:
They would direct that minimum exclusions be sustained
in some cases without permitting consideration of the remedial
criteria for determining exclusions found to be implicit in the Act
in Matesic. Castro, DAB CR259, at 11.
They would strip parties of their statutory right to a
de novo review of evidence as to their trustworthiness to provide
care. Id.
However, these administrative law judges' decisions concluded that
the Part 1001 regulations were not intended to govern
administrative hearings. The decisions concluded further that the
Secretary did not intend to apply regulations in a way which
conflicted with the Act's requirements. Support for this
conclusion was found in the following:
The Part 1001 regulations neither stated nor suggested
that they governed administrative hearings. Id. at 12.
There was nothing in the Part 1001 regulations or the
commentary to those regulations which either stated or suggested
that the Secretary intended to overrule the Board's interpretations
of the Act, including the Board's decision in Matesic. The Board
is delegated to make final interpretations of law on behalf of the
Secretary. Had the Secretary intended to supersede the Board's
previous appellate decisions, then the Secretary would have said so
explicitly. Id.
If the Part 1001 regulations were found to govern
administrative hearings, they would conflict with or render
meaningless other regulations adopted by the Secretary on January
29, 1992, contained in 42 C.F.R. Part 1005, which govern
administrative hearings held to adjudicate the reasonableness of
exclusions imposed pursuant to section 1128 of the Act. Id. at 12
- 13.
The Part 1001 regulations could be construed reasonably
as codifying I.G. policy without governing administrative
adjudications. Id. at 13.
However, on January 22, 1993, the Secretary published new
regulations. These regulations direct explicitly that the criteria
contained in 42 C.F.R. Part 1001 govern all adjudications of the
reasonableness of the length of an exclusion, including hearings
before administrative law judges, reviews by Board appellate
panels, and appeals to federal courts. 42 C.F.R. 1001.1(b).
The regulations now require that, in the case of an exclusion
imposed pursuant to section 1128(b)(3) of the Act, a minimum
exclusion of three years must be sustained, absent the presence of
some mitigating circumstance which might serve as a basis for
reducing the length of the exclusion. 42 C.F.R. 1001.401(c)(1),
(3). 4/ Mitigating circumstances may consist only of those factors
identified specifically by 42 C.F.R. 1001.401(c)(3)(i) - (ii).
Evidence which does not fall within one of the identified
mitigating factors may not be considered to be mitigating, even if
it conforms to the statutory criteria identified in Matesic. 5/
Petitioner concedes that he has no evidence to offer in this case
which conforms to the mitigating factors identified in 42 C.F.R.
1001.401(c)(3)(i) - (ii). I am precluded from receiving evidence
which Petitioner might seek to offer concerning his trustworthiness
to provide care which does not conform to these mitigating factors.
Therefore, I must sustain the three-year exclusion imposed and
directed against Petitioner by the I.G.
CONCLUSION
I conclude that the I.G. is authorized to exclude Petitioner, based
on Petitioner's conviction of a criminal offense within the meaning
of section 1128(b)(3) of the Act. I conclude further that the
three-year exclusion which the I.G. imposed and directed against
Petitioner is mandated by 42 C.F.R. 1001.401.
___________________________
Steven T. Kessel
Administrative Law Judge
1. I use the term "Medicaid" hereafter to represent all
programs other than Medicare from which Petitioner was excluded.
2. Any fact findings which I make in this case are based
entirely on the parties' stipulations, which are contained in my
February 25, 1994 order. I refer in this decision to the
stipulations as "Stipulation, Par. (paragraph number)" and these
references correspond to the stipulation paragraphs as they appear
in my February 25, 1994 order. No exhibits were admitted into
evidence in this case.
3. A difference between this case and Castro is that the
petitioner in Castro alleged the presence of a mitigating factor
identified in the regulations. I found that the petitioner had not
met his burden of proof to establish the presence of the alleged
mitigating factor. Castro, DAB CR259, at 16 - 19.
4. This regulation permits an exclusion to exceed three years
if any of several specified aggravating factors are found to exist.
42 C.F.R. 1001.401(c)(2).
5. The only factors which may be considered to be mitigating
under 42 C.F.R. 1001.401(c)(3) are the following: (i) the
excluded party's cooperation with federal or State officials
resulted in others being convicted or excluded from Medicare or
Medicaid or led to 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 excluded party are not
available.