Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Rolland G. Eckley, R.Ph., Petitioner,
- v. -
The Inspector General.
DATE: July 30, 1997
Docket No. C-96-219
Decision No. CR483
DECISION
I conclude that Petitioner, Rolland G. Eckley, is subject to
a three-year period of exclusion from participation in the
Medicare, Medicaid, Maternal and Child Health Services Block
Grant and Block Grants to States for Social Services programs
and, therefore, I affirm the Inspector General's (I.G.)
determination. 1/
I. Procedural History
By letter dated February 23, 1996, the Petitioner herein, was
notified by the I.G., U.S. Department of Health and Human
Services (HHS), that he was to be excluded from the Medicare
and Medicaid programs for three years. The I.G. explained
that such an exclusion is authorized by section 1128(b)(3) of
the Social Security Act (Act), because Petitioner was
convicted, as defined in section 1128(i) of the Act, in the
State of Ohio, Court of Common Pleas, Wood County, of a
criminal offense related to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled
substance.
Petitioner filed a timely request for review of the I.G.'s
action. The parties agreed that this case could be decided
without an in-person hearing as there were no facts of
significance genuinely in dispute and that the only matters
to be decided are the legal implications of the undisputed
facts. Accordingly, I set a schedule for the I.G. to file a
motion for judgment on the record and for Petitioner to
respond.
II. Applicable law
Section 1128(b)(3) of the Act permits the Secretary of HHS
(Secretary) to exclude any individual from participation in
the Medicare program and also to direct that individual's
exclusion from the Medicaid, Maternal and Child Health
Services Block Grant and Block Grants to States for Social
Services programs, if the individual "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." The applicable
regulations provide, in relevant part:
(a) Circumstances for exclusion. The OIG may
exclude an individual or entity convicted
under Federal or State law of a criminal
offense relating to the unlawful manufacture,
distribution, prescription, or dispensing of a
controlled substance, as defined under Federal
or State law.
(b) for purposes of this section, the definition
of "controlled substance" will be the
definition that applies to the law forming the
basis for the conviction.
(c) Length of exclusion. (1) An exclusion
imposed in accordance with this section will
be for a period of 3 years, unless aggravating
or mitigating circumstances listed in
paragraphs (b)(2) and (b)(3) of this section
form a basis for lengthening or shortening
this period.
. . .
(3) Only the following factors may be considered
as mitigating and a basis for shortening the
period of exclusion--
(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 (1995).
III. Rulings on Outstanding Motions
A. Sustaining of Petitioner's Objections to I.G. Exhibits 4
through 9.
During the briefing period, Petitioner filed objections to
the I.G.'s Exhibits 1, 4, 5, 6, 7, 8, and 9, on grounds of
irrelevancy, undue prejudice, hearsay, and lack of
authentication. The I.G. responded to these objections and,
in addition, submitted amended copies of her exhibits 1, 4,
5, 8, and 9, with certifications of authenticity. Having
considered the parties' arguments concerning the disputed
exhibits, I sustain Petitioner's objections except with
respect to the I.G.'s Exhibit 1, as revised.
The objections to the I.G.'s Exhibits 4, 5, 8 and 9 are
sustained on the basis of their irrelevancy and potential for
undue prejudice. Even as amended by the I.G., these
documents pertain to actions taken by the Ohio State Board of
Pharmacy, whereas the sanction imposed by the I.G. was based
on Petitioner's conviction in Ohio State Court. The I.G.'s
other exhibits contain sufficient relevant information
concerning the nature and extent of Petitioner's conviction
for violation of State criminal statutes. In order to
resolve the issues before me, it is not necessary for me to
consider the actions taken also by the State Board of
Pharmacy or its interpretations of Petitioner's criminal
conviction.
I am also sustaining Petitioner's objection to I.G.'s Exhibit
7, which contains an explanation of Tylenol with Codeine as
published in a medical reference work. Petitioner has
correctly noted that, as relevant to this case, a "controlled
substance" is defined by law -- not by medical texts.
Therefore, the I.G.'s Exhibit 7 is irrelevant to this action.
Because the I.G. did not provide any information to
invalidate Petitioner's objection to the I.G.'s Exhibit 6, I
an excluding from the record said document as well. The
document marked as I.G.'s Exhibit 6 consists of a letter
dated September 25, 1995 from the I.G., which seeks to inform
Petitioner of a possible exclusion and to solicit relevant
information from Petitioner. Petitioner objected to its
admission by noting that there is no evidence that the letter
was ever sent by the I.G. The I.G. has not provided any
information to show the actual mailing of the letter. Nor
has the I.G. stated what relevancy a notice of possible
exclusion (even if sent to Petitioner) has to these
proceedings. The exclusion at issue here was imposed by the
I.G. in a later dated letter. The letter by which the I.G.
imposed the exclusion against Petitioner, dated February 23,
1996, was entered into the record for jurisdictional purposes
when this case was docketed.
I have accepted into evidence the I.G.'s Exhibit 1 as
revised, with certification of authenticity, over
Petitioner's objections. This exhibit is a copy of the
Indictment issued against Petitioner. It is necessary for me
to read the Indictment in order to understand the contents of
the I.G.'s Exhibit 2, in which the court summarized the
prosecutor's motion to modify one of the charges against
Petitioner as well as the pleas entered by Petitioner.
Petitioner has filed no objection to the admission of the
I.G.'s Exhibit 2. Given also that the certification of
authenticity provided by the I.G. overcomes the question of
reliability raised by Petitioner, there is no valid basis for
excluding the I.G.'s Exhibit 1, as revised, from evidence.
2/
B. Denial of Petitioner's Motion to Enforce Settlement
Agreement.
After the parties concluded their briefing on the merits of
the case, Petitioner filed a document styled, "Petitioner's
Motion to Enforce Settlement Agreement." In the motion,
Petitioner alleged that a settlement offer had been made by
the I.G. without any apparent deadline for acceptance;
however, when Petitioner's counsel contacted the I.G.'s
counsel several months later to state that Petitioner had
authorized his counsel to accept the I.G.'s offer,
Petitioner's counsel was told that the I.G. was no longer
willing to settle the case. Accordingly, Petitioner's
"Motion to Enforce Settlement Agreement" is premised on
Petitioner's asserted belief that the I.G. did not in fact
withdraw the settlement offer prior to Petitioner's decision
to accept it.
The I.G. objected to the motion on grounds which included her
counsel's contention that she thought Petitioner, by counsel,
had earlier rejected the settlement offer outright. In
addition, the I.G. argued that I lack the authority to rule
upon Petitioner's motion under 42 C.F.R. § 1005.4(b), (c)(3).
I find the I.G.'s reliance upon said regulations to be
inapposite. The regulations preclude administrative law
judges from compelling settlement agreements between the
parties. 42 C.F.R. § 1005.4(c)(3). The regulations do not,
as the I.G. contends, preclude an administrative law judge
from determining whether the parties have already entered
into a settlement agreement and, if so, the consequences of
the agreement. These regulations also do not support the
proposition that an administrative law judge is without the
authority to ascertain whether counsel was acting with or
without authorization from her client during settlement
discussions.
Petitioner herein alleged that when Petitioner's counsel
contacted the I.G.'s counsel on November 14, 1996, the I.G.'s
counsel stated that "`because the [I. G.'s] Brief had been
submitted, it was too late to settle.'" Motion to Enforce
Settlement Agreement, 2. Petitioner noted in his motion that
no order or instructions issued by me indicated that the
filing of any brief would preclude the parties from
discussing or reaching a settlement agreement. Petitioner
alleged also in his motion that the I.G.'s settlement offer
had not been made with any deadline for response.
In this case, Petitioner's summary of the alleged exchange
between counsel does not make appropriate my looking behind
the presumption that an attorney follows her client's wishes
and directives in settlement negotiations. Therefore, I will
not attempt to verify that counsel for the I.G. was in fact
speaking with the authority of her client on November 14,
1996, when Petitioner was informed that settlement was no
longer an option. Nor will I attempt to ascertain why a
settlement offer from the I.G. was withdrawn -- whether it
was due to the filing of a brief by her counsel or for other
reasons.
Petitioner has not proven the existence of any settlement
agreement to be enforced in this case. There is not even any
proof that the parties had reached a meeting of the minds to
resolve the case on specific terms. Accordingly, I deny
Petitioner's Motion to Enforce Settlement Agreement.
IV. Issues, Findings of Fact and Conclusions of Law
A. Issues
The issues in the case are:
a. Whether 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; and
b. Whether the length of Petitioner's exclusion is
reasonable.
B. Findings of Fact and Conclusions of Law
1. On September 16, 1993, a Criminal Indictment was filed by
the Grand Jury charging that pursuant to Count Three,
Petitioner did knowingly sell or offer to sell Tylenol #3
with codeine, a schedule III controlled substance, in an
amount equal to or exceeding the bulk amount but in an amount
less than three times that amount in violation of Ohio
Revised Code Title 29, Section 2925.03(A)(5), a felony of the
third degree. I.G. Ex. 1 Revised.
2. On September 16, 1993, a Criminal Indictment was filed by
the Grand Jury charging that pursuant to Count Four,
Petitioner did knowingly make a false statement in any
prescription, order, report or record required by chapter
3719 of the Revised Code, for a schedule III substance,
Tylenol #3 with codeine, in violation of Ohio Revised Code
Title 29, Section 2925.23(A), a felony of the fourth degree.
I.G. Ex. 1 Revised.
3. On January 19, 1994, Petitioner waived his right to trial
and pled guilty to and was adjudged guilty of the criminal
offenses of illegal processing of drug documents, a felony of
the fourth degree, and of attempted trafficking in drugs, a
misdemeanor of the first degree. I.G. Ex. 2.
4. Pursuant to the Judgment Entry on Plea dated January 19,
1994, Judge Williamson granted the motion to amend Count
Three of Petitioner's Indictment to attempted trafficking in
drugs, which is knowingly or purposely engaging in conduct,
which, if successful, would constitute or result in the
offense of trafficking in drugs, a violation of Ohio Revised
Code Title 29, Sections 2925.03 and 2923.02 and a misdemeanor
of the first degree. I.G. Ex. 2.
5. Petitioner's sentence by the State court to one year
imprisonment for the offense of illegal processing of drug
documents and six months imprisonment for the offense of
attempted trafficking in drugs, was suspended, and he was
placed on probation for two and one-half years provided he
met certain conditions which included, in part, 45 days
detention, evaluation by and appropriate treatment, if
necessary, by a chemical dependency treatment center, 100
hours of community service and a mandatory fine of $1500.
I.G. Ex. 3.
6. Petitioner was convicted of a criminal offense related to
the distribution, prescription or dispensing of a controlled
substance. Findings 2 - 5; Act, section 1128(b)(3).
7. The Secretary delegated to the I.G. the authority to
determine, impose, and direct exclusions pursuant to section
1128 of the Act.
8. The I.G. has authority to impose and direct exclusions
pursuant to section 1128(b)(3) of the Act.
9. Petitioner's conviction is related to the unlawful
distribution, prescription or dispensing of a controlled
substance.
10. 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).
11. Only the mitigating factors set forth in 42 C.F.R. §
1001.401(c)(3) may be considered as a basis for decreasing
the period of exclusion.
12. The record in this case does not support the presence of
any of the mitigating factors.
13. Petitioner was properly excluded for a period of three
years pursuant to regulations promulgated by the Secretary
under the authority of section 1128(b)(3) of the Act.
V. Petitioner's Arguments
Petitioner contends that his exclusion under 1128(b)(3) of
the Act and 42 C.F.R. § 1001.401 is not justified because
there is no evidence that controlled substances were a
necessary element of his convictions for illegal processing
of drug documents, a felony in the fourth degree, and for
attempted drug trafficking, a misdemeanor of the first
degree. Petitioner also contends that the length of his
exclusion is unreasonable because the I.G. waited two years
before implementing the three-year exclusion, effectively
creating a five-year exclusion, because the I.G. exclusion
came immediately after his State Pharmacy license two-year
suspension ended.
VI. Discussion
The statute authorizes the I.G. to exclude the Petitioner
from participation in the Medicare and Medicaid programs for
a period of three years if the Petitioner was convicted under
federal or state law of a criminal offense relating to the
unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance as defined under federal
or state law.
In this instance, Petitioner does not dispute that he pled
guilty to and therefore, was convicted of two drug related
offenses; rather, Petitioner merely contends that neither
offense was "related to the unlawful manufacture,
distribution, prescription, or dispensing of a controlled
substance." Contrary to Petitioner's contentions, I conclude
that the relevant record, taken together, supports a finding
that Petitioner was convicted of a criminal offense relating
to the unlawful manufacture, distribution, prescription, or
dispensing of a controlled substance.
Petitioner does not dispute that he pled guilty to and was
adjudged guilty of attempted trafficking in drugs pursuant to
Count Three of the Criminal Indictment as amended. See I. G.
Exs. 1 Revised, 2, and 3. Moreover, Petitioner does not
dispute that this offense prohibits knowingly or purposely
engaging in conduct which, if successful, would result in the
selling or offering to sell a controlled substance. Ohio
Revised Code Title 29, Sections 2923.02 and 2925.03.
The undisputed facts of this case show that a Criminal
Indictment was filed by the Grand Jury against Petitioner on
six criminal counts. After that, based on a plea agreement,
Petitioner, in lieu of going forward to a hearing on all
these counts, agreed to plead guilty to Count Three, as
amended, and to Count Four, with the State agreeing to drop
the other four counts filed against Petitioner. Petitioner,
however, argues that this indictment is of no effect in these
proceedings and that I am limited to only the Judgment Entry
on Plea and the Judgment Entry on Sentencing to determine the
basis for Petitioner's convictions. 3/ I disagree. In
light of the circumstances here, the Criminal Indictment must
be read together with the Judgments in order to determine the
actual offenses for which Petitioner has pled guilty. It
would lead to ludicrous results if that indictment was not
considered to be incorporated into these Judgments,
especially when Judge Williamson specifically granted the
State's motion to amend Count Three of the Indictment to
Attempted Trafficking in the Judgment Entry on Plea and then
granted the State's motion to dismiss Counts One, Two, Five
and Six of the Indictment in the Judgment Entry on
Sentencing. I.G. Exs. 2 and 3.
Further, Count Three of the Criminal Indictment clearly and
specifically states that the Grand Jury found that on or
about January 1992, Petitioner "did knowingly sell or offer
to sell Tylenol #3 with codeine, a schedule III controlled
substance, in an amount equal to or exceeding the bulk amount
but in an amount less than three times that amount, to-wit:
60 tablets." I.G. Ex. 1 Revised. There is nothing in the
record which would indicate that Judge Williamson's Judgment
Entry on the Plea for Count Three, as amended, was not based
on these same facts.
I find no merit in Petitioner's additional argument that his
conviction for attempted drug trafficking is not an
excludable offense under section 1128(b)(3) of the Act
because he was convicted under an Ohio Statute which did not
require the State to prove the actual existence of any
controlled substance to be trafficked. To have an exclusion
upheld under section 1128(b)(3) of the Act, the I.G. need
only show that the individual has been convicted of a
criminal offense related to the distribution, prescription or
dispensing of a controlled substance. Petitioner's knowing
attempt to sell or offer to sell a controlled substance such
as Tylenol #3, a controlled substance, establishes that his
offense was related to the distribution or dispensing of a
controlled substance. Therefore, it is immaterial whether
Petitioner was selling or offering to sell a supply of
Tylenol #3 actually in existence or in his possession at the
time, or whether he was selling or offering to sell a supply
of Tylenol #3 which was to be manufactured or otherwise
obtained after he had secured the orders for it. For the
foregoing reasons, I conclude that Petitioner's conviction
for attempted trafficking in drugs was an excludable offense
within the meaning of the statute. 4/ Where an individual
is subject to an exclusion under section 1128(b)(3) of the
Act, the regulations prohibit review of the I.G.'s exercise
of her discretion to impose an exclusion permitted by law.
42 C.F.R. § 1005.3(c)(5). Therefore, the only remaining
issue in this case is whether the length of the exclusion
imposed by the I.G. is unreasonable. 42 C.F.R. §
1001.2007(a).
As to the length 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." 5/ The
regulations state that only the factors set forth may be
considered as mitigating and the basis for shortening the
length of the exclusion. The regulation then sets forth two
mitigating factors: (1) the individual's cooperation with
federal or State officials resulted in the conviction,
exclusion of others or imposition of a civil monetary
penalty; or (2) 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) and (ii).
Petitioner has not presented any such mitigating factors.
While Petitioner contends that under the circumstances the
length of the exclusion is unreasonable where the I.G. did
not exclude him until two years after his conviction, this is
not a basis under the regulations for shortening the period
of the exclusion. The three-year period of exclusion is
mandated by regulation where there is an absence of any of
the specified mitigating factors. Whatever events may have
transpired during the years immediately following
Petitioner's conviction, they were not caused by the I.G.'s
decision to impose the three-year exclusion pursuant to
section 1128(b)(3) of the Act. Therefore, in the absence of
any evidence in the record that any mitigating factors exist
here, I am bound by the regulations, and have no authority to
modify the three-year exclusion.
VII. Conclusion
Petitioner was properly excluded for a three-year period
pursuant to section 1128(b)(3) of the Act and the applicable
regulations at 42 C.F.R. § 1001.401.
________________________
Mimi Hwang Leahy
Administrative Law Judge
* * * Footnotes * * *
1. Unless otherwise indicated, hereafter I refer to
all programs from which Petitioner has been excluded other
than Medicare, as "Medicaid."
2. Since Petitioner has offered no exhibits of his
own, the evidence I have admitted into the record consists of
I.G. Exhibits (Exs.) 1 Revised, 2, and 3.
3. Petitioner initially moved against admission of
the Criminal Indictment as an exhibit in this case, arguing
that it was not properly authenticated, that in any event it
is nothing more than a statement of probable cause, and for
other reasons under the Federal Rules of Evidence. The I.G.
resubmitted an authenticated, certified copy of this exhibit
as Ex. 1 Revised. I see no reason to bar this document from
admission into the record, and admitted it and received it as
I.G. Ex. 1 Revised.
4. While Petitioner was also convicted for illegal
processing of drug documents, given my finding that
Petitioner's conviction for attempted trafficking in drugs is
an excludable offense pursuant to section 1128(b)(3) of the
Act, there is no reason to make any further determinations
here.
5. No aggravating factors have been alleged by the
I.G. Therefore, aggravating factors are not an issue here.
(..continued)