$05:Exclusion Case
Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Louis Mathews,
Petitioner,
- v. -
The Inspector General.
DATE: November 24, 1995
Docket No. C-95-104
Decision No. CR403
DECISION
This case is before me on the exclusion of Louis Mathews
(Petitioner) from participation in the Medicare, Maternal and Child
Health Services Block Grant, Block Grants to States for Social
Services programs, and from the State health care programs
described in section 1128(h) of the Social Security Act (Act)
(hereafter, I refer to all programs, other than Medicare, as
"Medicaid") for a period of three years, pursuant to the permissive
exclusion provisions of section 1128(b)(3) of the Act.
In a letter dated February 3, 1995 (Initial Notice), the Inspector
General (I.G.) informed Petitioner that he would be excluded
pursuant to the mandatory exclusion provision of section 1128(a)(1)
of the Act. Petitioner requested a hearing and the case was
assigned to me. I conducted a prehearing conference in this case
on April 21, 1995.
As I noted in my Prehearing Order of April 25, 1995, at the
prehearing conference, counsel for the I.G. informed Petitioner
that the Initial Notice was incorrect and moved to either issue a
new notice letter or amend the Initial Notice to reflect that
Petitioner had been excluded for a period of three years pursuant
to section 1128(b)(3) of the Act. Petitioner consented to the
I.G.'s motion to amend the Initial Notice, stating that there was
no need for the I.G. to issue a new notice letter.
On May 10, 1995, the I.G. issued an amended notice (Amended Notice)
that made clear that Petitioner was being excluded for a period of
three years pursuant to section 1128(b)(3) of the Act based upon
Petitioner's conviction of a criminal offense related to the
unlawful manufacture, distribution, prescription, or dispensing of
a controlled substance. I.G. Ex. 6. The Amended Notice further
stated that Petitioner's three-year exclusion period was arrived at
by taking into account the fact of Petitioner's conviction and the
lack of any aggravating or mitigating factors.
As the parties have agreed that there are no facts of decisional
significance genuinely in dispute in this case, and that the only
matters to be decided are the legal implications of the undisputed
facts, the parties wished to proceed by filing briefs and exhibits
and I have decided this case on the basis of the parties'
submissions. 1/
I find that the record in this case establishes that Petitioner was
properly excluded from participation in the Medicare and Medicaid
programs for a period of three years pursuant to section 1128(b)(3)
of the Act.
APPLICABLE LAW
This case is controlled by section 1128(b)(3) of the Act, which
provides that:
The Secretary may exclude the following individuals and
entities from participation in any program under title XVIII and
may direct that the following individuals and entities be excluded
from participation in any State health care program:
. . . (3) CONVICTION RELATING TO CONTROLLED SUBSTANCE. -
Any individual or entity that has been convicted, under Federal or
State law, of a criminal offense relating to the unlawful
manufacture, distribution, prescription, or dispensing of a
controlled substance. . . .
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. During the period relevant to this case, Petitioner was a
Physician Assistant licensed in the State of California. P. Ex. 3.
2. On March 31, 1993, the State of California filed a criminal
complaint against Petitioner, charging him with four separate
felony counts as follows: 1) knowingly prescribing a controlled
substance (codeine) without any good faith belief that it was for
a medical purpose; 2) unlawful furnishing by prescription; 3)
uttering a forged prescription for codeine; and 4) practicing
medicine without a license. I.G. Ex. 7.
3. On July 5, 1994, Petitioner entered into a plea agreement in
the Superior Court of California, County of San Bernadino, whereby
the court accepted Petitioner's plea of nolo contendere to a
misdemeanor count of prescribing without a medical purpose
(formerly the felony contained in count I of the complaint) and the
court agreed to dismiss the remaining counts against Petitioner.
P. Ex. 5; I.G. Ex. 1, 2, 4.
4. The section of the California law to which Petitioner pled nolo
contendere spells out the legal requirements for prescribing and
dispensing controlled substances, and details the penalty for
knowing violation of these requirements. I.G. Ex. 1 - 4.
5. At the time he entered his plea, Petitioner was explicitly
informed by the State judge presiding over his plea that Petitioner
could be excluded as a provider in the Medicare or Medicaid
programs. P. Ex. 5.
6. Petitioner was made aware that his plea agreement would bar
only the State of California Attorney General's Office taking
further administrative action against him and that his plea
agreement would not preclude a federal entity from excluding him
from Medicare or Medicaid. P. Ex. 5; I.G. Ex. 4.
7. Petitioner was sentenced by the State court to 240 hours of
community service, $1000 restitution, and probation for three
years. I.G. Ex. 2, 4.
8. Petitioner's plea of nolo contendere and the California court's
acceptance of that plea constitutes a "conviction" for purposes of
section 1128(i)(1) and (3) of the Act. Act, section 1128(i)(1) and
(3); Findings of Fact and Conclusions of Law (Findings) 3, 7.
9. The permissive exclusion provisions of section 1128(b)(3) do
not require that a conviction have a nexus to the Medicare or
Medicaid programs, they require only that a conviction be related
to the unlawful manufacture, distribution, prescription or
dispensing of a controlled substance. Act, section 1128(b)(3).
10. Petitioner's conviction is related to the unlawful
prescription or dispensing of a controlled substance. Findings 2
- 4; I.G. Ex. 1 - 4, 7; P. Ex. 5.
11. An exclusion imposed pursuant to section 1128(b)(3) of the Act
will be for a period of three years, unless specified aggravating
or mitigating factors are present. 42 C.F.R. 1001.401(c)(1).
12. An aggravating factor that may be used as a basis for
lengthening a period of exclusion above three years is that the
acts that resulted in the conviction or similar acts were committed
over a period of one year or more. 42 C.F.R. 1001.401(c)(2)(i).
13. An aggravating factor that may be used as a basis for
lengthening a period of exclusion above three years is that the
acts that resulted in conviction or similar acts had a significant
adverse physical, mental, or financial impact on program
beneficiaries or other individuals in the Medicare or State health
care programs. 42 C.F.R. 1001.401(c)(2)(ii).
14. An aggravating factor that may be used as a basis for
lengthening a period of exclusion above three years is that the
sentence imposed by the court included incarceration. 42 C.F.R.
1001.401(c)(2)(iii).
15. An aggravating factor that may be used as a basis for
lengthening a period of exclusion above three years is that the
convicted individual or entity has a prior criminal, civil, or
administrative sanction record. 42 C.F.R. 1001.401(c)(2)(iv).
16. The I.G. has not alleged that any of the aggravating factors
that are specified in the regulations are present in this case.
17. The record in this case does not support the presence of any
of the aggravating factors. I.G. Ex. 1 - 8; P. Ex. 1 - 9.
18. Mitigating factors that may be used as a basis for decreasing
the period of exclusion is that the individual's or entity's
cooperation with federal or State officials resulted in others
being convicted or excluded from Medicare or Medicaid, or the
imposition of a civil monetary penalty against others. 42 C.F.R.
1001.401(c)(3)(i)(A) and (B).
19. A mitigating factor that may be used as a basis for decreasing
the period of exclusion is that 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)(ii).
20. Petitioner has alleged that information he gave to the I.G.
office in San Diego in 1990 led to the arrest and conviction of
another individual.
21. There is nothing in the record other than Petitioner's
assertion to support that Petitioner's cooperation with the I.G.'s
office led to the arrest and conviction of another individual.
22. The record in this case does not support the presence of any
of the mitigating factors. I.G. Ex. 1 - 8; P. Ex. 1 - 9.
23. Petitioner was properly excluded for a period of three years
pursuant to section 1128(b)(3). Findings 1 - 22.
24. There is no basis for either increasing or decreasing
Petitioner's three-year exclusion. Findings 1 - 23.
25. Petitioner's contention that he recommended a treatment plan
only, and did not unlawfully prescribe or dispense a controlled
substance, is a collateral attack on his conviction and is
contradicted by the evidence of record. I.G. Ex. 1 - 8; P. Ex. 1
- 9; Douglas Schram, R.Ph., DAB 1372, at 2 - 3 (1992); Sonia M.
Geourzoung, M.D., DAB CR286 (1993); Peter J. Edmonson, DAB 1330
(1990); Joel Fass, DAB CR349 (1994).
26. Petitioner may not use these proceedings to collaterally
attack his conviction. Peter J. Edmonson, DAB 1330 (1992); Roger
Littge, M.D., DAB CR302 (1994); Joel Fass, DAB CR349 (1994).
27. Petitioner was properly excluded for three years, pursuant to
section 1128(b)(3) of the Act. Findings 1 - 26.
PETITIONER'S ARGUMENTS
Petitioner maintains that he acted in accord with the instructions
and general policies of his supervising physician when he wrote the
prescription in question. Therefore, he believes that he did not
unlawfully distribute a controlled substance as charged by the
State.
Petitioner contends that the mitigating factor at 42 C.F.R.
1001.401(c)(3)(i)(A) is applicable to this case because he
allegedly provided information to the I.G. which resulted in the
conviction of another individual.
Petitioner argues that the State Attorney General made an assurance
to him in the context of his plea bargain that is binding upon the
I.G. and would preclude the I.G. from excluding him. Finally,
Petitioner contends that a three-year suspension is unduly harsh
when compared to the severity of the acts underlying his
conviction.
DISCUSSION
The statute under which the I.G. seeks to exclude Petitioner --
section 1128(b)(3) of the Act -- requires, initially, that
Petitioner have been convicted of a criminal offense.
Section 1128(i) of the Act provides that an individual will be
deemed "convicted" under any of the following circumstances --
(1) when a judgment of conviction has been entered against the
individual or entity by a Federal, State, or local court,
regardless of whether there is an appeal pending or whether the
judgment of conviction or other record relating to criminal conduct
has been expunged;
(2) when there has been a finding of guilt against the
individual or entity by a federal, State, or local court;
(3) when a plea of guilty or nolo contendere by the individual
or entity has been accepted by a federal, State, or local court; or
(4) when the individual or entity has entered into
participation in a first offender, deferred adjudication, or other
arrangement or program where judgement of conviction has been
withheld.
In the case at hand, sections 1128(i)(1) and (3) are applicable.
Petitioner pled nolo contendere and the court accepted such plea
and imposed a sentence. Therefore, Petitioner was convicted within
the meaning of section 1128(i) of the Act.
As to the nature of Petitioner's offense, the record establishes
that the court's acceptance of his plea of nolo contendere was
based on Petitioner violating a California law which prohibits the
prescribing or dispensing of a controlled substance without a
proper medical basis. Findings 2 - 4. The record reveals that
codeine was the controlled substance that Petitioner unlawfully and
knowingly prescribed or dispensed without a proper medical basis.
I.G. Ex. 1 - 4, 7; Findings 2 - 4, 10.
As to the term of Petitioner's exclusion, the controlling
regulation, 42 C.F.R. 1001.401(c) provides that "an exclusion
imposed in accordance with this section will be for a period of 3
years, unless aggravating or mitigating factors listed in
paragraphs (b)(2) and (b)(3) of this section form a basis for
lengthening or shortening that period."
There are four aggravating factors in the regulations. The first
two aggravating factors exist if the acts that resulted in the
conviction, or similar acts, were committed over a period of one
year or more; or had a significant adverse physical, mental, or
financial impact on program beneficiaries or other individuals or
the Medicare/Medicaid programs. 42 C.F.R. 1001.401(b)(2)(i) -
(ii). The final two aggravating factors are present if the
sentence imposed by the court included incarceration, or if the
convicted individual has a prior criminal, civil, or administrative
sanction record. 42 C.F.R. 1001.401(b)(2)(iii) - (iv).
In this case, the I.G. has not alleged the existence of any
aggravating factors, nor is there any evidence of aggravating
factors. Findings 12 - 17.
The regulations set out two mitigating factors. It is a mitigating
factor if the individual's cooperation with federal or State
officials resulted in the conviction, exclusion, or imposition of
a civil monetary penalty. 42 C.F.R. 1001.401(b)(3)(i)(A) and
(B). It is also a mitigating factor if 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)(B).
Petitioner alleged that his cooperation with I.G.'s San Diego
office resulted in the conviction of another individual in 1990,
but did not offer any documentation to support this contention.
The burden is on the Petitioner to establish mitigating factors.
Jose Ramon Castro, M.D., DAB CR259 (1993); James H. Holmes, DAB
CR270 (1993); Joel Fass, DAB CR349 (1994). Petitioner has failed
to meet that burden because he did not offer proof of his
allegation and he failed to establish that his allegation, even if
true, is in any way related to the events in this case. Moreover,
Petitioner alleges that his cooperation happened in 1990 and he was
not charged with his offense until 1993, which casts doubt upon his
assertion. I.G. Ex. 1 - 4, 7. Accordingly, there is no mitigating
factor. Findings 18 - 22.
Petitioner contends that he acted appropriately and that his
conviction was based only on the recommendation of a treatment plan
to a patient. I take Petitioner's contention to mean that he
believes he was wrongfully convicted of an offense which he did not
really commit. However, Petitioner may not use this forum to
collaterally attack his conviction. Peter J. Edmonson, DAB 1330
(1992). The regulations specifically provide that, in
circumstances such as this case, where the exclusion is based on
the fact of conviction, ". . . the basis for the underlying
determination is not reviewable and the individual or entity may
not collaterally attack the underlying determination, either on
substantive or procedural grounds." 42 C.F.R. 1001.2007(d);
Joel Fass, DAB CR349 (1994); Roger O. Littge, M.D., DAB CR302
(1994). Accordingly, I cannot consider Petitioner's contention
that he was wrongly convicted.
Petitioner argues that he should not be subject to an exclusion
because the State Attorney General's Office agreed, as a condition
of Petitioner's plea, not to initiate any adverse administrative
action against him. The record reflects, however, that the State
judge who accepted Petitioner's plea went to great lengths to
ensure that Petitioner was made aware that he could still be
subject to an exclusion based on action taken by federal
authorities, such as the I.G. Findings 5 - 6. Moreover, even if
I were to accept Petitioner's assertion as true, any such assurance
made by a State attorney general would not be binding upon the I.G.
Anthony Accaputo, Jr., DAB CR249 (1993), aff'd DAB 1416 (1993).
Finally, Petitioner contends that a three-year period of exclusion
is unduly harsh. However, the three-year period of exclusion is
mandated by regulation where, as here, there is a lack of
aggravating or mitigating factors. 42 C.F.R. 1001.401(c)(1).
I am bound by the regulations, and I have no authority to modify
the three-year exclusion absent the existence of aggravating or
mitigating factors. Roger O. Littge, M.D., DAB CR302 (1994).
CONCLUSION
Petitioner was properly excluded for a three-year period pursuant
to section 1128(b)(3) of the Act.
________________________
Joseph K. Riotto
Administrative Law Judge
1. I refer to the parties' exhibits as P. Ex. (number) and I.G.
Ex. (number), respectively. Petitioner submitted nine exhibits in
conjunction with his brief. I receive P. Ex. 1 through 9,
inclusive, into evidence. The I.G. submitted eight exhibits in
conjunction with her brief. I receive I.G. Ex. 1 through 8,
inclusive, into evidence.