$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Scott Meggison, Petitioner,
- v. -
The Inspector General.
DATE: August 19, 1994
Docket No. C-94-290
Decision No. CR329
DECISION
The above-captioned case has come before me pursuant to the hearing
request filed by Scott Meggison (Petitioner) on February 4, 1994.
Petitioner, a Physician's Assistant licensed in the State of
Michigan, contests his three-year exclusion from participation in
the Medicare, Medicaid, and other federally funded health care
programs specified in section 1128(h) of the Social Security Act
(Act). 1/ Such an exclusion was imposed and directed by the
Inspector General (I.G.) of the Department of Health and Human
Services (HHS) for the reasons stated in the I.G.'s notice letter
dated January 19, 1994.
The I.G. based her actions upon her determination that Petitioner's
conviction (as defined by section 1128(i) of the Act) of a criminal
offense related to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance. Under
section 1128(b)(3) of the Act, the I.G., by delegation from the
Secretary of HHS, is authorized to impose and direct an exclusion
for a conviction of this nature. HHS's implementing regulations
specify an exclusion of three years under section 1128(b)(3) of the
Act, unless the aggravating or mitigating factors specified in the
regulation apply to alter the benchmark period. 42 C.F.R.
1001.401.
During the telephone prehearing conference of March 7, 1994,
Petitioner stipulated that he was convicted of a criminal offense
within the meaning of sections 1128(i) and 1128(b)(3) of the Act.
Petitioner admitted that the only issue in controversy in this case
is the reasonableness of the length of exclusion imposed and
directed by the I.G. Petitioner argued that, under one of the
agency's regulatory criteria, his three-year exclusion should be
reduced because alternative sources of Physician's Assistant
services are not available in the community where he practices.
See 42 C.F.R. 1001.401(c)(3)(ii). Petitioner admitted that the
other portions of the regulation at 42 C.F.R. 1001.401(c) could
not be used to reduce the three-year exclusion. As also summarized
in my March 18, 1994 Order and Schedule for Filing Briefs and
Documentary Evidence, Petitioner requested that the case be decided
on a paper record, and the I.G. had no objection to proceeding in
this manner.
Having considered the parties' cross-motions for disposition on the
documentary evidence and the exhibits they have submitted in
support, 2/ I uphold the three-year exclusion imposed and directed
by the I.G.
ISSUES
1. Whether the length of the three-year exclusion imposed and
directed by the I.G. is unreasonable because "[a]lternative sources
of the type of health care items or services furnished by the
individual or entity are not available," within the meaning of 42
C.F.R. 1001.401(c)(3)(ii).
2. If the three-year exclusion imposed and directed by the I.G. is
unreasonably long under the criterion specified in 42 C.F.R.
1001.401(c)(3)(ii), then the extent to which the exclusion should
be reduced.
FINDINGS OF FACT AND CONCLUSIONS OF LAW (FINDINGS)
1. Petitioner has been working as a licensed Physician's Assistant
in the State of Michigan. P. Br. at 1.
2. Prior to June of 1993, Petitioner was employed at Dr. Kenneth
Pelton's clinics (Pelton Clinics) in Pinconning and Prescott,
Michigan. 3/ P. Br. at 2 - 3; P. Ex. 1 at 1 - 2; I.G. Ex. 1 at 2.
3. In June of 1993, Petitioner pled guilty to two counts of
attempting to prescribe controlled substances outside the scope and
authority of a Physician's Assistant's license. I.G. Ex. 2, 3.
4. By order dated September 13, 1993, the court accepted
Petitioner's guilty plea and entered a judgment of conviction.
I.G. Ex. 3.
5. Petitioner was convicted of a criminal offense related to the
unlawful manufacture, prescription, or dispensing of a controlled
substance, within the meaning of the Act. Sections 1128(b)(3),
1128(i) of the Act; Findings 3, 4.
6. Petitioner was sentenced to serve 30 days in jail and 180 days
of probation, and he was also ordered to pay $650 in fines and
costs. His jail term was held in abeyance. I.G. Ex. 4.
7. By notice letter dated January 19, 1994, the I.G. imposed and
directed a three-year exclusion against Petitioner pursuant to his
conviction. I.G. Ex. 6.
8. The I.G. has been delegated the authority to impose and direct
exclusions on behalf of the Secretary of HHS. 48 Fed. Reg. 21,662
(1983).
9. The exclusion imposed and directed against Petitioner is
authorized under section 1128(b)(3) of the Act. Finding 5; P. Br.
at 1.
10. The regulation requires the I.G. to impose a three-year
exclusion, unless the enumerated factors apply to increase or
decrease the benchmark exclusion period. 42 C.F.R. 1001.401(c).
11. The regulation permits an increase of the three-year benchmark
exclusion period imposed and directed by the I.G. where, as here,
the sentence imposed by the court included incarceration. 42
C.F.R. 1001.401(c)(2)(iii); I.G. Ex. 4.
12. The regulation permits a reduction of the three-year benchmark
exclusion period imposed and directed by the I.G. if alternative
sources of the type of health care item or service furnished by
Petitioner are not available. 42 C.F.R. 1001.401(c)(3)(ii).
13. "Alternative sources ... are not available" means that, due to
the length of the exclusion at issue, either there will be no other
health care provider in the geographical areas reasonably
accessible to the Medicare beneficiaries and Medicaid recipients to
care for them, or a significant portion of Medicare beneficiaries
and Medicaid recipients will be deprived of reasonable access to
health care services comparable to those provided by Petitioner.
See 42 C.F.R. 1001.401(c)(3)(ii); James H. Holmes, M.D., DAB
CR270 at 13 - 14 (1993).
14. Petitioner has the burden of proving by a preponderance of the
evidence that the three-year exclusion imposed and directed by the
I.G. is unreasonable due to the unavailability of alternative
sources of health care services furnished by Petitioner. 42 C.F.R.
1001.2007(c); Holmes, DAB CR270 at 16.
15. During the course of the criminal proceedings against
Petitioner, Dr. Pelton died, and the Pelton Clinics were closed.
P. Br. at 3; P. Ex. 1 at 1.
16. In August of 1993, Petitioner accepted a job as a Physician's
Assistant with the Pinconning Clinic and Prescott Clinic, which are
located respectively in Pinconning and Prescott, Michigan, and are
both managed by William Berner. P. Ex. 1.
17. Pinconning and Prescott are located 25 miles apart in Bay
County and Ogemaw County, respectively. See P. Ex. 5, 8, 11.
18. Pinconning currently has two clinics: the one employing
Petitioner and another one operated by Dr. Smeltzer, who is nearing
retirement. P. Ex. 1, 5 at 2.
19. Prescott has only the one clinic employing Petitioner. P. Ex.
1.
20. The clinics employing Petitioner also employ as health care
providers John Russell (also a Physician's Assistant) and Carlton
Capuson, D.O., who supervises the work of the Physician's
Assistants employed by the clinics. P. Ex. 1, 5.
21. For nearly one year prior to Petitioner's hire in August of
1993, no other Physician's Assistant had accepted the job with the
Pinconning and Prescott Clinics due to the low pay of the position
and the locations of the clinics. P. Ex. 1 at 2.
22. Since Petitioner's exclusion, John Russell has been traveling
40 minutes each day between Pinconning Clinic and Prescott Clinic
in order to see 30 to 40 patients at each site. P. Ex. 5 at 2 - 3.
23. The Medicare and Medicaid caseload at the Pinconning Clinic is
approximately 70 percent, and it is approximately 60 percent at the
Prescott Clinic. February 3, 1994 letter from William Berner to
Petitioner's Counsel (attached to Request for Hearing)(Berner
Letter).
24. Petitioner's evidence does not show that the Pinconning and
Prescott Clinics' current Medicare and Medicaid caseload represents
a significant increase from the time prior to Petitioner's hire,
when John Russell worked as the only Physician's Assistant for the
two clinics. See P. Ex. 1, 5.
25. Petitioner's evidence does not show that he had cared for
Medicare or Medicaid patients prior to August of 1993.
26. The community hospital nearest to Prescott and Pinconning is
the Standish Community Hospital, located in Standish. P. Ex. 1 at
2.
27. Standish Community Hospital also operates on its campus an
emergency room and a walk-in urgent care center. P. Ex. 5 at 1.
28. Standish Hospital is located approximately 15 miles from
Pinconning Clinic and approximately 25 to 30 miles from Prescott
Clinic. P. Ex. 1 at 2.
29. The three towns of Prescott, Standish, and Pinconning are
located more or less in a straight line, with Standish in the
middle at approximately 15 miles south of Prescott and 9 miles
north of Pinconning. P. Ex. 5 at 1 - 2.
30. Dr. Capuson works as the "acting physician on duty" at
Standish Hospital's emergency room and ambulatory urgent care
center. P. Ex. 5 at 1.
31. Dr. Capuson has little time to see patients at the Prescott
and Pinconning Clinics. P. Ex. 5 at 2.
32. Petitioner's evidence does not establish that Dr. Capuson is
the only doctor on the medical staff of Standish Hospital. See P.
Ex. 1, 5.
33. Petitioner's evidence does not establish that no other doctor
or health care professional capable of delivering services
comparable to Petitioner's practices in the Standish area. See,
e.g., P. Ex. 1, 5.
34. Pinconning and Prescott are located within HHS-designated
"primary medical care health manpower shortage areas" or "Health
Professional Shortage Areas." P. Ex. 2 - 4.
35. The "primary medical care health manpower shortage area" and
"Professional Health Shortage Area" designations do not apply to
all portions of Ogemaw County, Bay County, the Sterling/Standish
health care service area, or the Hale/Whittemore/Prescott health
care service area. P. Ex. 2 - 4, 6.
36. In the vicinity of Prescott, Standish, or Pinconning, there
are other cities, towns, or communities, including Bay City,
Midland, Sterling, Hale, and Whittemore. E.g., P. Ex. 7 - 11.
37. Petitioner's evidence does not establish the absence,
unavailability, or inaccessibility of doctors, practitioners, or
hospitals located in the towns, cities, or communities in the
vicinity of Pinconning, Prescott, or Standish. See, e.g., P. Ex.
1, 5; see also Findings 35, 36.
38. At no time was the patient-to-physician ratio for Pinconning
4,246 to 1; nor was the ratio for Prescott ever 7,708 to 1. See P.
Ex. 2 - 4; P. Br. at 2.
39. Since Petitioner's exclusion became effective, Mr. Russell has
been overworked and sees each patient at the Prescott and
Pinconning Clinics for only a few minutes. P. Ex. 5 at 2 - 3.
40. Mr. Berner, the Clinics' manager, may reduce the hours of both
clinics by half or close one of the clinics. P. Ex. 5 at 3.
41. Since his exclusion, Petitioner has been assigned to work as
a manager at the Prescott Clinic, which has a non-Medicare and
non-Medicaid patient caseload of 40 percent that can be cared for
(but is not being cared for) by Petitioner as a Physician's
Assistant. P. Br. at 2; I.G. Ex. 6; Finding 23.
42. Petitioner has failed to establish by a preponderance of the
evidence that his exclusion caused any of the following:
(a) Mr. Russell is overworked;
(b) Mr. Russell spends less time with patients;
(c) The Prescott Clinic or the Pinconning Clinic may be
closed; or
(d) The hours of both clinics may be reduced by 50 percent.
43. Dr. Capuson believes that closing one of the two clinics, or
having Mr. Russell alternate his days at the clinics, may
jeopardize the patients' health by forcing those with potentially
serious conditions to wait one or two days to see a Physician's
Assistant at the Prescott and Pinconning Clinics. P. Ex. 5 at 3.
44. It is not medically advisable for patients to use the Standish
Hospital's emergency room or ambulatory urgent care center when
they should be seeking services from their regular caregiver on a
non-emergency basis. P. Ex. 5 at 3 - 4.
45. Petitioner's evidence does not establish that the Clinics will
be unable to make medically appropriate referrals for their excess
patients. See, e.g., P. Ex. 1, 5.
46. Petitioner's evidence does not establish that patients with
potentially serious conditions will need to wait for days to be
seen by doctors or Physician's Assistants if Prescott and
Pinconning Clinics referred them to a hospital emergency room or to
other practitioners. See, e.g., P. Ex. 1, 5.
47. Petitioner's evidence does not establish that no other
practitioner capable of providing services comparable to
Petitioner's in the geographical areas of Pinconning and Prescott
will accept referrals of the excess patients from Pinconning and
Prescott Clinics.
48. Petitioner's evidence does not establish that a significant
number of Medicare beneficiaries and Medicaid recipients will be
deprived of reasonable access to comparable health care services if
Petitioner is excluded for three years. Findings 15 - 47.
49. Petitioner has failed to prove by a preponderance of the
evidence that the three-year exclusion imposed and directed by the
I.G. is unreasonably long. Findings 1 - 48.
THE PARTIES' POSITIONS
Petitioner's Arguments and Evidence
Petitioner has been employed as a Physician's Assistant at the
Pinconning Medical Care, P.C. (Pinconning Clinic) in Pinconning,
Michigan, and at the Prescott Clinic, P.C. (Prescott Clinic) in
Prescott, Michigan, since August of 1993. P. Br. at 2. Before
August of 1993, Petitioner was employed by the Pelton Clinics, two
different clinics also located in the same area. 4/ P. Br. at
2 - 3; P. Ex. 1 at 1 - 2. After the death of Dr. Pelton, the
physician who owned and operated the Pelton Clinics, these two
clinics closed. P. Ex. 1 at 1. Petitioner then joined the
Prescott Clinic and Pinconning Clinic, both of which are managed by
William Berner of the Prescott Management Company. Id.
Mr. Berner stated that he had been recruiting Physician's
Assistants for nearly a year before he hired Petitioner in August
of 1993. P. Ex. 1 at 2. Mr. Berner attributed the difficulties to
the low pay caused by an "overabundance" of Medicare and Medicaid
patients (as opposed to patients whose care is reimbursed by
private insurers), together with the general reluctance of health
care providers to relocate to remote areas. Id.
Pinconning and Prescott are located in two different counties in
the northern part of Michigan, around Saginaw Bay. Pinconning is
in Bay County. P. Ex. 4 at 1; P. Ex. 8. Prescott is in adjoining
Ogemaw County. P. Ex. 3, 11. Prescott is approximately 25 miles
from Pinconning. P. Ex. 5 at 2. It takes approximately 40 minutes
to drive from the Prescott Clinic to the Pinconning Clinic. P. Ex.
5 at 2 - 3.
According to Petitioner, both the Pinconning Clinic and Prescott
Clinic are located within what HHS has designated as primary care
"Health Professional Shortage Areas" (HPSAs) or "primary medical
care health manpower shortage areas" (HMSAs). P. Br. at 2; P. Ex.
2 - 4. The classifications are based on the ratio of "full-time
equivalent primary care physicians" to the "adjusted population"
of
areas that include, but are not limited to, Pinconning and
Prescott. P. Ex. 2, 3, 6 - 11. In 1990, HHS granted Mr. Berner's
request on behalf of Prescott Clinic to reinstate Richland
Township, which includes Prescott, as a HMSA in the
Hale/Whittemore/Prescott Service Area of Ogemaw County. P. Ex. 3
at 1. In 1991, HHS granted Mr. Berner's request to have Pinconning
township designated a HPSA within the Sterling/Standish Service
Areas of Arenac, Bay and Gladwin Counties. P. Ex. 2. Pinconning
and Prescott continued to have the HPSA designation until at least
January of 1993. 5/ P. Ex. 4.
At present, Pinconning has two medical clinics: the Pinconning
Clinic and another clinic staffed by a physician, Dr. Smeltzer;
Prescott has only the Prescott Clinic. P. Ex. 1, 5. The two
clinics employing Petitioner are staffed by Petitioner, another
Physician's Assistant named John Russell, and Carlton Capuson, D.O.
P. Ex. 1, 5. Dr. Capuson stated that he is the only doctor serving
Prescott and he spends only 10 percent of his workday in Prescott
due to his work commitments elsewhere. P. Ex. 5 at 2. Also due to
his other work commitments, he does not personally see many
patients in the Prescott Clinic or the Pinconning Clinic. Id. He
believes that Dr. Smeltzer in Pinconning is nearing retirement and
is not accepting new patients. Id.
The community hospital nearest to both Pinconning and Prescott is
located in Standish. P. Br. at 2; P. Ex. 1 at 2. Standish
Hospital operates on its campus an emergency room as well as a
walk-in urgent care clinic. P. Ex. 5 at 1. Pinconning and
Prescott are located in a line with Standish. Id. Prescott is
approximately 15 miles north of Standish, and Pinconning is
approximately 9 miles south of Standish. P. Ex. 5 at 1 - 2.
Pinconning Clinic is located 25 to 30 miles from Standish Hospital,
and Prescott Clinic is located 15 miles from Standish Hospital. P.
Ex. 1 at 2.
Dr. Capuson, who supervises the work performed by Petitioner and
John Russell at the Prescott Clinic and Pinconning Clinic, also
works as "the acting physician on duty" at Standish Hospital's
emergency room and walk-in urgent care clinic (Urgent Care). P.
Ex. 5. He notes that hospital treatment is not an adequate or
sensible alternative to treatment by a family doctor or Physician's
Assistant. P. Ex. 5 at 3.
Dr. Capuson believes that the Standish Hospital's emergency room
and Urgent Care center are not "geared" to deal with the same
family practice caseload as the Prescott Clinic and the Pinconning
Clinic. P. Ex. 5 at 3 - 4. If Urgent Care or the emergency room
are forced to take up the patient caseload of those two clinics, he
thinks patients will receive health care which is less well suited
to their needs, and they will have to wait longer for it. P. Ex.
5 at 4. As examples, he states that, at Urgent Care, he and the
staff either tell patients to seek follow-up care with their
regular caregiver or refer them to specialists; if the patients
return to Urgent Care, they would not see the same caregiver, and
the loss of continuity may jeopardize their health. Id.
Since the effective date of Petitioner's exclusion, Petitioner has
been working as a Physician's Assistant on a rotational basis at
the Pinconning Clinic and as a manager at the Prescott Clinic. P.
Br. at 2. In order to see the Medicare and Medicaid patients of
both clinics, John Russell, the other Physician's Assistant
employed by the two clinics, has been travelling the 40 minutes
between the two clinics each day since Petitioner's exclusion to
see 30 to 40 patients at one clinic in the morning, and an equal
number of patients at the other clinic in the afternoon. P. Ex. 5
at 2 - 3.
According to Mr. Berner's letter to Petitioner's counsel,
Our Pinconning Clinic has approximately 42% Medicaid and 28%
Medicare. Our Prescott Clinic has approximately 32% Medicaid and
28% Medicare.
Berner Letter. Prior to his exclusion, Petitioner had a total
caseload of approximately 160 patients per week. Id. According to
Petitioner, if he is excluded from practicing for any substantial
period of time, one of the clinics employing him would be forced to
close, or, alternatively, both clinics would have to reduce their
office hours by nearly one half. Petitioner contends that either
of these alternatives would be detrimental to providing effective
and timely patient care in both communities. P. Br. at 3 - 4.
Petitioner argues that the evidence compels the conclusion that the
mitigating factor identified at 42 C.F.R. 1001.401(c)(3)(ii)
applies. Petitioner contends that his exclusion should be reduced
to the period already served because he "provides a unique and
irreplaceable service to the patients of this underserved area of
Northern Michigan" and his removal "would in fact endanger the
health and safety of the patient population in these communities
contrary to the policies expressed in the regulations themselves."
P. Rep. at 2.
The I.G.'s Arguments and Evidence
The I.G.'s evidence shows that Petitioner was convicted within the
meaning of the Act on June 21, 1993 in Michigan State Court on two
counts of attempting to prescribe controlled substances. I.G. Ex.
2 - 4. Prior to or during August of 1993, Petitioner was sentenced
to serve 30 days in jail, which was held in abeyance, and he was
placed on 180 days of informal probation. I.G. Ex. 4. 6/
Petitioner was also ordered to pay $605.00 in fines and costs. Id.
On September 14, 1993, the I.G. notified Petitioner of his possible
exclusion and solicited comments for her deliberation. I.G. Ex. 5.
On January 19, 1994, the I.G. notified Petitioner of his exclusion,
which would become effective 20 days thereafter. I.G. Ex. 6.
The I.G. argues that Petitioner has made no showing that
alternative sources of the type of health care services he
furnishes are unavailable in his local area. According to the
I.G., the phrase "alternative sources . . . are not available" in
42 C.F.R. 1001.401(c)(3)(ii) is not defined by statute or
regulation. I.G. Br. at 5. The I.G. urges me to adopt a
plain-meaning construction of the term applied by other
administrative law judges. Id. at 5 - 6. The I.G. notes that,
according to Petitioner's evidence, there is another Physician's
Assistant working with him and there is a physician supervising
their activities. Id. at 9. The I.G. also argues that Petitioner
has made no showing that the area hospital is unwilling to absorb
Petitioner's Medicare and Medicaid caseload. Id. at 8. According
to the I.G., Petitioner has failed to prove that patients traveling
from Prescott or Pinconning to the community hospital would be
exposed to undue hardships and barriers of such a magnitude that,
as a practical matter, the patients would be precluded from
obtaining access to alternative sources of health care at the
hospital. Id. at 8 - 9.
With respect to Petitioner's use of the evidence concerning "health
care professional shortage areas," the I.G. argues that Petitioner
was not excluded pursuant to section 1156 of the Act, which permits
health care providers practicing in a "health professional shortage
area" to seek a pre-exclusion ruling by an administrative law judge
on whether they pose a serious risk to patients. I.G. Br. at 7 -
8, n.7 (citing section 1156(b)(1)(B)(5)). The designation of
"health professional shortage area" does not indicate that
alternative sources of health care are unavailable. Id. Nor does
the designation bar the imposition of an exclusion under sections
1128(b)(3) or 1156 of the Act. Id.
ANALYSIS
I. The regulations limit the issues before me.
I begin my analysis by making clear what the parties have
acknowledged implicitly in their delineation of the issues.
Given Petitioner's stipulation that he was convicted within the
meaning of section 1128(b)(3) of the Act, the contents of the
regulation at 42 C.F.R. 1001.401 are binding upon me in deciding
whether the three-year exclusion imposed and directed by the I.G.
is reasonable. 42 C.F.R. 1001.1(b)(1993)(58 Fed. Reg. 5617,
5618 (Jan. 22, 1993)). Under the regulations, three years is the
benchmark period for all exclusions imposed and directed under
section 1128(b)(3) of the Act. 42 C.F.R. 1001.401(c)(1). I may
reduce the three-year benchmark period only if at least one of the
criteria specified in the regulation is applicable. 42 C.F.R.
1001.401(c)(3). However, I cannot set the exclusion at zero where
I find that an individual has committed an act proscribed in
section 1128(b) of the Act. 42 C.F.R. 1005.4(c)(6).
I am also not authorized to review the manner in which the I.G. has
exercised her discretion in deciding whether to exclude an
individual under section 1128(b) of the Act, and the law does not
permit me to readjudicate the facts that have resulted in criminal
convictions. 42 C.F.R. 1001.2007(d), 1005.4(c)(5). I note
that Petitioner has placed before me his arguments concerning the
events that led to his conviction even though Petitioner also
acknowledges that they are not among the mitigating factors
specified by regulation. Because the above cited regulations are
binding on me (42 C.F.R. 1001.1(b)(1993)), I do not give any
legal effect to such arguments.
In addition, even though Petitioner may be the capable,
hard-working, and caring health care provider described by his
witnesses (e.g., P. Ex. 5 at 2), his skills and competency are not
at issue before me. Petitioner's exclusion did not result from any
conviction for the abuse or neglect of patients, or from any
licensure revocation proceeding relating to his professional
skills, for example. See sections 1128(a)(2) and (b)(4) of the
Act. The I.G. had the discretion to weigh factors such as
Petitioner's work history and professional skills when she was
deciding whether or not to impose and direct an exclusion against
Petitioner under section 1128(b)(3) of the Act. However, I cannot
now use the professional competency of Petitioner in lieu of a
mitigating factor specified by regulation. See, e.g., 42 C.F.R.
1005.4(c)(5). Nor can I give any weight to Petitioner's
professional attitude or competency in deciding whether there
exists alternative sources of health care where, as here, there is
not even an allegation that other health care providers are less
caring, less hard-working, or less capable than Petitioner.
Therefore, I do not find material the quality of care he is capable
of rendering were he allowed to participate in the Medicare and
Medicaid programs.
II. Petitioner has failed to prove by a preponderance of the
evidence that alternative sources of the type of health care
services he provides are not available.
Petitioner has the burden of coming forward with evidence and
proving that alternative sources of the type of health care
services he provides are not available. March 18, 1994 Order and
Schedule for Filing Briefs and Documentary Evidence. The standard
of proof in this proceeding is the preponderance of the evidence.
Id.; 42 C.F.R. 1001.2007(c). I find that Petitioner has failed
to establish by a preponderance of the evidence that the mitigating
factor he cites is applicable to his situation.
To define the phrase "alternative sources . . . are not available,"
I adopt the plain-language approach applied by other administrative
law judges. For example, Administrative Law Judge Edward Steinman
defined "alternative" as "affording a choice of two or more things,
propositions, or sources of action," and he defined "available"
as
"suitable or ready for use or service; at hand." James H. Holmes,
M.D., DAB CR270 at 13 (1993). Thus, under this definition, an
alternative source must be a source which offers patients a
comparable alternative to the services furnished by Petitioner, and
obtaining the services of the alternative source must not represent
an unreasonable hardship. Id. at 13 - 14.
Under the regulation, the availability of alternative sources of
health care services is relevant only as it applies to Medicare and
Medicaid beneficiaries and recipients. The exclusion statutes are
intended to safeguard the welfare of Medicare beneficiaries and
Medicaid recipients. By its very terms, an exclusion imposed and
directed against an individual has no impact on his ability to bill
for services to patients who do not receive health care under the
Medicare or Medicaid programs. Therefore, I emphasize that the
regulation permits me to reduce the period of exclusion only if the
exclusion would adversely affect Medicare beneficiaries and
Medicaid recipients. Id. at 14.
The mitigating factor contained in 42 C.F.R. 1001.401(c)(3)(ii)
is established only when Petitioner proves by a preponderance of
the evidence that, if he is excluded for the period imposed and
directed by the I.G., (1) there will be no other health care
provider in the geographical area served by Petitioner reasonably
accessible to Medicare beneficiaries and Medicaid recipients, or
(2) a significant portion of Medicare beneficiaries and Medicaid
recipients will be deprived of reasonable access to comparable
health care services.
To establish this mitigating factor, a provider must prove
significant adverse changes in the previously available services to
program beneficiaries and recipients. If, for example, an
individual had served very few program beneficiaries or recipients
prior to his exclusion, his exclusion may have no real impact on
the access of program beneficiaries or recipients to previously
available health care providers in the same area. In such a
situation, reducing the period of an exclusion is unlikely to be of
any advantage to Medicare beneficiaries or Medicaid recipients.
Moreover, the mitigating factor does not apply where an exclusion
does no more than reduce the number of available health care
providers in a community. Mere diminution of previously available
health care services is insufficient. Clearly, every exclusion of
a health care provider has that potential effect. The three-year
benchmark period specified by the regulation would be rendered
meaningless if the mere diminution of previously available services
were construed to satisfy the mitigating factor identified at 42
C.F.R. 1001.401(c)(3)(ii). Holmes, DAB CR270 at 14.
Petitioner's evidence and arguments are insufficient to establish
that his exclusion for three years will have the requisite impact
on the delivery of health care services to Medicare beneficiaries
or Medicaid recipients. Petitioner has proved that Prescott and
Pinconning need more health care providers, and that his employer
may have a difficult time replacing him. He has not proved that
Medicare and Medicaid beneficiaries and recipients will face
unreasonable hardship in obtaining comparable primary care
services. Indeed, I agree with the I.G. that the evidence offered
by Petitioner itself identifies alternative sources of services to
which Medicare beneficiaries and Medicaid recipients have access.
Petitioner contends that no other providers of Physician's
Assistant services will be available because other Physician's
Assistants will be unwilling to take his place. The relevant
statements by Mr. Berner (P. Ex. 1 at 2) and Dr. Capuson (P. Ex. 5
at 2) constitute some evidence that health care services may become
less available as a result of Petitioner's exclusion. However, I
note that the low pay offered by the Clinics to Physician's
Assistants was a major deterrent cited by Mr. Berner, the Clinics'
business manager, and the low pay was determined by the Clinics for
business reasons unrelated to this proceeding. Moreover, the Act
and regulations permit the I.G. to conclude that persons with
convictions for the unlawful prescription of controlled substances
should be excluded for a period of three years due to the risks
they pose to the interests of the programs and to the safety of
program beneficiaries and recipients. These risks are not
significantly reduced where, as here, an individual is willing to
work for less money.
In addition, Petitioner's contention that no other Physician's
Assistant will replace him overlooks the fact that his colleague
John Russell continues to treat patients at the Pinconning and
Prescott Clinics. Petitioner argues that Mr. Russell cannot care
for the clinics' Medicare and Medicaid patients alone. The
evidence does not support this argument. According to Mr. Berner,
Petitioner had a total caseload of 160 patients per week before the
exclusion. Berner Letter. In the absence of any contrary
information, I assume that Mr. Russell and Petitioner each used to
have 50 percent of the clinics' total caseload before Petitioner's
exclusion took effect; because Petitioner used to see 160 patients
per week before his exclusion, I estimate that the two Physician's
Assistants saw a total of approximately 320 patients each week
prior to Petitioner's exclusion. Petitioner's exclusion should not
have the effect of increasing the total of number of patients
visiting the two clinics.
Since Petitioner's exclusion took effect, Mr. Russell should have
taken over the full Medicare-Medicaid caseload of 60 percent at
Prescott Clinic and 70 percent at Pinconning Clinic. 7/ If Mr.
Russell were to treat only the Medicare and Medicaid patients at
the two clinics, his caseload would increase only 10 to 20 percent
over the 50 percent of patients I assume he was treating before
Petitioner's exclusion. Despite his exclusion, Petitioner can be
utilized for the remaining 30 to 40 percent of the two clinics'
caseload. Even though Mr. Russell now spends 40 minutes a day to
travel between the two clinics, some travel time was no doubt also
expended by the Physician's Assistants before Petitioner's
exclusion took effect because Petitioner and Mr. Russell staffed
both clinics. I therefore conclude that Mr. Russell represents an
alternative source of Physician's Assistant services available to
Medicare and Medicaid patients in Prescott and Pinconning.
Petitioner argues that alternative sources of primary care services
will not be available because his exclusion will force his employer
to close one clinic or reduce each clinic's hours by 50 percent.
I find that the decision to close of one clinic or to reduce the
hours for both clinics turns on factors unrelated to Petitioner's
exclusion from the programs. Since Petitioner is currently working
as a manager at the Prescott Clinic and sharing duties as a
Physician's Assistant with Mr. Russell at the Pinconning Clinic (P.
Br. at 2), I conclude that Petitioner's employer has not assigned
Petitioner the 40 percent non-Medicare and non-Medicaid caseload of
Prescott Clinic; instead, the employer has assigned Mr. Russell
considerably more work than the Medicare and Medicaid cases of the
two clinics that had to be taken away from Petitioner due to his
exclusion. Whereas before his exclusion, Petitioner used to see
160 patients per week (Berner Letter), Mr. Russell now sees 60 to
80 patients a day (P. Ex. 5 at 2 - 3), or 300 to 400 patients each
week. Mr. Russell is now seeing as many or more patients than he
and Petitioner did together before Petitioner's exclusion took
effect. The foregoing factors do not add up to the conclusion
that, due to the additional work and travel time for Mr. Russell
that have resulted from Petitioner's exclusion, one Clinic will
need to be closed down or each clinic will need to reduce its hours
by one half.
In addition to the services provided by Mr. Russell at the
Pinconning and Prescott Clinics, Petitioner has also identified at
least two primary care physicians, Dr. Capuson and Dr. Smeltzer,
who practice in Pinconning and Prescott. Moreover, the presence of
Standish Community hospital implies that there are doctors with
privileges to practice at the hospital who also maintain practices
in the surrounding areas.
Petitioner's evidence establishes that Dr. Capuson is the acting
physician on duty at Standish Hospital's emergency room and walk-in
urgent care center. The evidence does not suggest that he is the
only physician on the medical staff of Standish hospital, that he
is the only health care provider who works in the emergency room
and Urgent Care center, or that the individuals identified in
Petitioner's evidence (Dr. Capuson, Mr. Russell, Dr. Smeltzer, and
Petitioner) are the only ones willing and able to care for the
Medicare beneficiaries and Medicaid recipients who currently
receive services from the Prescott Clinic and the Pinconning
Clinic. Nor is there any evidence showing that, on referrals by
the Prescott or Pinconning Clinics, no other doctor or health care
professional practicing in or around Standish will be willing to
provide appropriate services to the Medicare and Medicaid patients
of the Prescott and Pinconning Clinics.
According to Petitioner, the total driving time between Prescott
Clinic and the Pinconning Clinic is 40 minutes, and the two towns
are located in a line to the north and south of Standish. P. Ex.
5 at 1 - 2. These facts imply that the driving time from each of
the two clinics to Standish would be much less than 40 minutes.
Under these circumstances, it was incumbent upon Petitioner to
prove that those program beneficiaries or recipients traveling to
Pinconning Clinic or Prescott Clinic are unable to travel some
minutes more to Standish, if nowhere else, to obtain alternative
health care services. Petitioner has failed to do so.
A map of the State shows that, in addition to Standish, there are
other communities, towns, and cities (including Bay City) in the
proximity of Prescott or Pinconning. See P. Ex. 7 - 11.
Petitioner's evidence is merely that the community hospital nearest
to both Prescott and Pinconning is located in Standish. P. Ex. 1
at 2. Similarly, Petitioner's evidence is simply that Pinconning
has two clinics and Prescott has one clinic. P. Ex. 1 at 1. There
is no evidence establishing the absence of any other hospitals,
clinics, or like facilities located outside of Standish but close
to Prescott or Pinconning. Nor has Petitioner alleged that no
health care providers are located in area towns or communities
other than Standish, Prescott, or Pinconning to provide comparable
services to some of the program beneficiaries and recipients who
have been cared for by Petitioner at the Prescott Clinic or
Pinconning Clinic.
Petitioner argues that the hospital emergency room and Urgent Care
center cannot be viewed as comparable to the primary care services
of a Physician's Assistant or family doctor. Petitioner relies on
Dr. Capuson's opinions concerning the health risks and lack of
treatment continuity if the Pinconning and Prescott Clinics'
patients seek emergency room care as a substitute for the care they
currently receive from practitioners who are familiar with their
conditions, such as Petitioner. See P. Ex. 5 at 4. The evidence
does not prove that Petitioner's exclusion will inevitably result
in the undesirable situations described by Dr. Capuson.
The undesirable situations described by Dr. Capuson seem the likely
result of the Clinics not referring some of their excess patients
to other practitioners for regular care in the first instance.
There is no proof that continuity of treatment cannot be obtained
anywhere except at Pinconning and Prescott Clinics, or that other
practitioners cannot become as familiar with the patients'
conditions over time as Petitioner. I did not construe the I.G.'s
reference to available health care at Standish Hospital (I.G. Br.
at 8 - 9) as meaning that patients should seek emergency treatment
for non-emergency conditions or that patients should ask the
emergency room staff to satisfy all their health care needs.
Petitioner argues that the ratio of area patient population to
primary care physicians, which resulted in the HPSA designation for
Prescott and Pinconning in 1990 and 1991, supports his contention
that no other practitioners are practicing in Prescott and
Pinconning. Petitioner argues that the current ratios have
probably become worse after Dr. Pelton's death. P. Br. at 2. Such
ratios are relevant to the issue of whether alternative sources of
health care are available within the meaning of the regulations.
However, I find Petitioner's asserted conclusion unpersuasive
because (1) it fails to account for practitioners in neighboring
communities not designated HPSAs; and (2) it relies on unsupported
assumptions about the definitions of provider and patient
populations.
The first problem with Petitioner's arguments concerning the HPSA
designation is that the designation does not apply to communities
near Pinconning and Prescott, where patients could presumably seek
medical care. For example, Petitioner's evidence shows that the
Pinconning Clinic is located in the Sterling/Standish health care
service area of Bay County. While Petitioner has established that
Pinconning Township and Pinconning City have the HPSA designation,
I find that the HPSA designation does not apply to all parts of the
Sterling/Standish Service Area or to all parts of Bay County. P.
Ex. 4 at 1; P. Ex. 6 at 2 - 3. (Only four parts of that service
area have the designation. P. Ex. 4 at 1.) Nor does Petitioner's
evidence show that the HPSA designation applies to the cities of
Standish and Sterling, for example, in the Sterling/Standish
Service Area that includes Pinconning. P. Ex. 4.
Similarly, while Petitioner has established that Prescott Village
has the HPSA designation, I find that the HPSA designation does not
apply to all parts of Ogemaw County or to all parts of the health
care service area to which Prescott Clinic belongs. P. Ex. 6 at 6.
For the portion of the Hale/Whittemore/Prescott Service Area within
Ogemaw County, the HPSA applies only to Logan and Richland
Townships, which include Prescott Village. P. Ex. 3, 4 at 2. In
neighboring Iosco County, but within the same service area as
Prescott, the cities of Hale and Whittemore, for example, do not
have the HPSA designation. P. Ex. 4, 10.
Second, Petitioner fails to define the terms "full-time equivalent
primary care physicians" and "adjusted population" used in the
HPSA
designation. Petitioner has not shown if or to what degree he
should be considered a "full-time equivalent primary care
physician." Nor has he shown that the patient population
statistics used for the HPSA designation coincide with those types
of patients he would be serving through the Prescott and Pinconning
Clinics. For example, it is reasonable to expect the
patient-to-physician ratios generated for the HPSA designation to
include people who have no insurance coverage, who cannot pay for
services, and who either do not visit doctors for those reasons or
receive services without paying for them. Petitioner's statements
and his evidence indicate that the clinics employing him deliver
services to patients who have private insurance, are insured under
the Medicare program, or have Medicaid coverage. P. Br. at 2, n.1;
P. Ex. 1 at 2. There is no evidence that the clinics employing
Petitioner deliver free services or accept patients who have no
means of making payments.
Moreover, contrary to Petitioner's contention, the evidence does
not show the ratio of primary care patients to physicians in
Pinconning to be 4,246 to 1, and the ratio for Prescott shown by
the evidence is not 7,708 to 1. P. Br. at 2. The former ratio
cited by Petitioner accounts for all parts of Arenac County,
specified parts of Bay County (including Pinconning), and specified
parts of Gladwin County in 1991. P. Ex. 2. The latter ratio cited
by Petitioner applies to the specified parts of Iosco County and
Ogemaw County, which includes Prescott, in 1990. P. Ex. 3.
Petitioner has not explained why the 1990 and 1991 statistics
applicable to areas much broader than Pinconning and Prescott
should be construed as the equivalent of the ratios of patients to
primary care physicians for Pinconning and Prescott. There is, for
example, no evidence that Pinconning Clinic draws its patients from
Gladwin and Arenac Counties. Nor did Petitioner offer evidence on
the size of the geographical area from which the Pinconning and
Prescott Clinics draw their Medicare and Medicaid patients, the
distance already traveled by the majority of program beneficiaries
and recipients to these two clinics, or the distance they would
need to travel to other providers outside of Pinconning and
Prescott. The 1990 and 1991 statistics in evidence do not support
Petitioner's conclusion that the ratios of patients to primary care
physicians for Pinconning and Prescott are worse than 4,246 to 1
and 7,708 to 1, respectively.
Petitioner's evidence regarding the HPSA designation is
insufficient to establish the absence of other providers of primary
care services in Prescott and Pinconning. That evidence also fails
to support the contention that Petitioner's exclusion will result
in unreasonable hardship to Medicare and Medicaid patients seeking
care. First of all, the physician-to-patient ratios fail to
specify the number of Medicare beneficiaries and Medicaid
recipients within the relevant patient population. General patient
population data does not persuasively establish that Medicaid
beneficiaries and Medicaid recipients will suffer significant
adverse impact due to Petitioner's exclusion. As I have earlier
discussed, Petitioner's exclusion does not affect his ability to
deliver services to non-Medicare and non-Medicaid patients.
Furthermore, I am unable to conclude that Petitioner's exclusion
will represent an unreasonable hardship to Medicare and Medicaid
patients because Petitioner has offered no evidence that he had
cared for these patients while he was employed by the Pelton
Clinics in the same area prior to August of 1993. At the most,
Petitioner's evidence establishes that he had helped to deliver
health care at the Prescott Clinic and Pinconning Clinic to their
Medicare and Medicaid patients for a period of six months until his
exclusion took effect. There is also no evidence establishing that
the 60 percent Medicare/Medicaid caseload at Prescott Clinic or the
70 percent Medicare/Medicaid patient caseload at the Pinconning
Clinic represent a significant increase from what these two Clinics
used to have before Petitioner began his employment with them in
August of 1993. Mr. Berner's affidavit indicates only a
significant increase in the patient volume at his clinics since the
Pelton Clinics were closed. P. Ex. 1 at 2.
Even assuming that Pinconning and Prescott Clinics will find it
very difficult to maintain their current patient caseload and
clinic hours during Petitioner's exclusion, this does not amount to
proof that the Clinics' Medicare and Medicaid patients will be
deprived of reasonable access to care. As discussed above,
Petitioner has not proved that the Clinics will be unable to refer
some of their Medicare and Medicaid patients to other comparable
providers in the area. 8/ While I appreciate the Clinics'
interest in retaining all the Medicare and Medicaid patients within
their existing caseload and Petitioner's usefulness to the Clinics
towards that end, the issue before me is whether alternative
sources of health care are reasonably available to program
beneficiaries and recipients. The issue is not what difficulties
the employing health care facility will experience in maintaining
the status quo during the term of an exclusion. Petitioner's
evidence is lacking on proof that reducing its current caseload by
referrals would result in unreasonable barriers to care for
Medicare and Medicaid patients. Nor does the evidence prove that
Medicare and Medicaid patients with potentially serious medical
conditions will be forced by Petitioner's exclusion to wait a day
or two to be seen by a Physician's Assistant. As I stated
previously, the evidence shows only that waiting may be possible if
the Prescott and Pinconning Clinics endeavor to retain all their
current patients or if all their current patients choose not to be
treated elsewhere.
In sum, Petitioner has not proved by a preponderance of the
evidence that no alternative sources of the type of service
provided by Petitioner are available within the meaning of the
regulation. Therefore, Petitioner's current exclusion cannot be
reduced due to any legally cognizable mitigating factor.
CONCLUSION
For the foregoing reasons, I uphold the three-year exclusion
directed and imposed by the I.G.
Mimi Hwang Leahy
Administrative Law Judge
1. For the sake of convenience, I will refer to all the
affected health care programs as "Medicare" and "Medicaid."
2. In accordance with the briefing schedule I had established,
Petitioner submitted his Motion for Decision on the Documentary
Evidence and Brief in Support (P. Br.) along with four proposed
exhibits; and the I.G. submitted a Motion for Summary Disposition
with a supporting brief (I.G. Br.) and seven proposed exhibits.
Petitioner then submitted a Memorandum in Response to the I.G.'s
Motion for Summary Disposition (P. Rep.), along with one additional
proposed exhibit.
During a conference call held on June 14, 1994, the I.G. clarified
that she was seeking summary disposition on what she considered to
be controlling issues of law, but that if there existed any
disputed issues of material facts, she had no objection to having
the issues decided on the basis of her documentary submissions.
Neither party wished to offer additional evidence at an in-person
hearing. The I.G. waived the opportunity to cross-examine
Petitioner's witnesses who submitted affidavits. June 21, 1994
letter sent by direction of the Administrative Law Judge (ALJ).
Also during the June 14, 1994 conference, I informed the parties
that, absent any valid objections, I would look at the relative
locations of the towns referenced by the parties on an area map.
The parties had no objection to my so proceeding. Petitioner later
forwarded certain officially published information to clarify the
contents of his earlier submissions. The additional documents from
Petitioner have been marked as Petitioner's Exhibits 5 through 11.
Having ascertained that all the documents submitted by the parties
are relevant to the parties' arguments before me, and having
received no objections as to the authenticity of the documents, I
now admit Petitioner's Exhibits 1 to 11 (P. Ex. 1 to 11) and the
I.G.'s Exhibits 1 to 7 (I.G. Ex. 1 to 7).
3. Petitioner refers to his former employer as Kenneth Pelton.
P. Br. at 2. The criminal complaint against Petitioner refers to
Kevin Pelton. I.G. Ex. 1 at 2. This discrepancy is not material
to any issue before me.
4. The documents relating to Petitioner's criminal proceedings
indicate that the Pelton Clinics were located in Prescott and
Pinconning. I.G. Ex. 1 at 2. Petitioner states that the Pelton
Clinics were located in Pinconning and Skidway Lake. P. Br. at 5,
n.2.
5. Petitioner has not explained the difference, if any, between
the HPSA and the HMSA designation. If there were a difference, it
would not be material to my decision, in any event. Both Prescott
and Pinconning are identified as HPSAs in P. Ex. 4, which is the
most recent in time. That Exhibit makes no mention of the HMSA
designation. For simplicity, I refer in my analysis to Prescott
and Pinconning as HPSAs.
6. Where, as here, the evidence introduced for my de novo
review establishes that the sentence imposed by the court included
incarceration, I have the authority to increase the three-year
benchmark exclusion period. 42 C.F.R. 1001.401(c)(2)(iii),
1005.20(b); section 1128(f) of the Act (incorporating section
405(b) of the Act). However, the I.G. has not argued that
Petitioner's exclusion should be for longer than three years.
Therefore, I will not address the effect of this aggravating factor
of record in this decision.
7. The percentages of Medicare and Medicaid patients at the
clinics are drawn from Mr. Berner's letter dated February 3, 1994.
Mr. Berner's letter was written approximately six months after the
Pelton Clinics closed and Petitioner began working at the Prescott
and Pinconning Clinics. Therefore, I infer that the patient
population figures cited in Mr. Berner's letter would reflect
whatever additional patients had transferred to Prescott or
Pinconning because the Pelton Clinics had closed.
8. I do not imply that, due to Petitioner's exclusion, the
Prescott or Pinconning Clinics are required to refer their Medicare
and Medicaid patients elsewhere. I am merely addressing here
Petitioner's contention that the Clinics have difficulty
maintaining their current patient load. Certainly, the asserted
patient load difficulties may be alleviated also by referring the
privately-insured patients elsewhere if the Clinics wish to retain
their Medicare and Medicaid patients.