Kenneth Behymer, M.D., CR No. 73 (1990)

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Departmental Appeals Board

Civil Remedies Division

DATE: March 6, 1990
Docket No. C-140


In the Case of:

Kenneth Behymer, M.D.

Petitioner

- v. -

The Inspector General.

DECISION


By letter dated May 18, 1989, the Inspector General (the I.G.) notified Petitioner that he was being
excluded from participation in Medicare and any State Health care program for five years. Petitioner was
advised that he was being excluded because he had been convicted of a criminal offense related to the
unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Petitioner was
advised further that his exclusion was authorized by section 1128(b)(3) of the Social Security Act.

Petitioner timely requested a hearing, and the case was assigned to me for a hearing and a decision. I held
a hearing in Anchorage, Alaska, on November 30, 1989.

I have considered the evidence introduced by both parties at the November 30 hearing. Based on the
evidence and applicable law, I conclude that the five year exclusion imposed against Petitioner is
excessive. I conclude that the remedial considerations of section 1128 of the Social Security Act will be
served in this case by an 18 month exclusion. I modify the exclusion accordingly.


ISSUE

The issue in this case is whether the exclusion imposed and directed against Petitioner by the I.G. is
reasonable.


FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. Petitioner is a physician who has specialized in internal medicine. Tr. at 121.

2. On October 14, 1987, Petitioner was indicted in the United States District Court for the District of
Alaska (the District Court) on seven counts of unlawful distribution of a controlled substance in violation
of 21 U.S.C. 841(a)(1), and on one count of obtaining a controlled substance by fraud in violation of 21
U.S.C. 843(a)(3). I.G. Ex. 1.

3. On March 18, 1988, Petitioner pleaded nolo contendere to Count VII of the indictment, a charge of
unlawful distribution of a controlled substance. I.G. Ex. 2/1.

4. Petitioner was convicted of knowingly distributing or dispensing 72 dosage units of Methadone, a
Schedule II controlled substance, by prescription, to a patient, for other than legitimate medical reasons.
I.G. Ex. 1/4.

5. On March 18, 1988, the District Court dismissed the seven remaining counts of the indictment. I.G. Ex.
2/2.

6. The District Court sentenced Petitioner to probation for two years and to a special assessment of $50.00.
I.G. Ex. 2/1-2.

7. The District Court conditioned Petitioner's probation on the requirement that he adhere to specified
conditions concerning the manner in which he prescribed controlled substances. I.G. Ex. 2/1-3.

8. Petitioner had previously been convicted in 1978 of conspiracy and unlawful distribution of Schedule II
controlled substances, pursuant to 21 U.S.C. 841 and 21 U.S.C. 846. I.G. Ex. 7B.

9. Subsequent to Petitioner's 1988 conviction, an action was brought before the Medical Board of the
Alaska Department of Commerce and Economic Development, Division of Occupational Licensing
(Alaska Medical Board), to revoke, suspend, or impose other sanctions against Petitioner's license to
practice medicine in Alaska. I.G. Ex. 7.

10. Petitioner was charged before the Alaska Medical Board with unlawful or improper prescribing of
controlled substances, gross negligence, and repeated negligent conduct. I.G. Ex. 7/6-7.

11. On May 23, 1989, an administrative hearing officer (hearing officer) issued a proposed decision in
Petitioner's case before the Alaska Medical Board. I.G. Ex. 7.

12. The proposed decision concluded that Petitioner: unlawfully prescribed and dispensed drugs; was
grossly negligent and incompetent in the prescribing of scheduled narcotic drugs; and was addicted to or
severely dependent on Paregoric, a controlled substance. I.G. Ex. 7/54.

13. On May 23, 1989, the Alaska Medical Board adopted the hearing officer's proposed findings and
suspended Petitioner's license to practice medicine for a period of 60 days. I.G. Ex. 7/55-56.

14. The Alaska Medical Board permanently prohibited Petitioner from prescribing Schedule II and
Schedule III controlled substances. I.G. Ex. 7/55-56.

15. Petitioner's 1988 conviction was a consequence of his prescribing Methadone to a pregnant woman
whom Petitioner believed to be addicted to heroin. I.G. Ex. 18; Tr. at 122-124.

16. Petitioner's decision to prescribe Methadone to this individual was motivated by humanitarian
considerations. I.G. Ex. 18; Tr. at 122-124.

17. Petitioner did not profit from the conduct which resulted in his 1988 criminal conviction, nor did his
conduct cause injury to another person. Tr. at 81.

18. The I.G. did not prove that Petitioner committed any crimes other than those of which he was
convicted. See I.G. Ex. 1.

19. Beginning in August 1989, Petitioner received treatment for substance abuse problems. Tr. at 127.

20. Petitioner completed both in- and out-patient therapy programs for substance abuse. Tr. at 127.

21. Petitioner continues to attend meetings of Alcoholics Anonymous. Tr. at 127.

22. Subsequent to Petitioner's 1988 conviction, over 4,000 of Petitioner's prescriptions were monitored by
federal authorities and no improprieties were detected. Tr. at 82.

23. Petitioner has not repeated the conduct which resulted in his 1988 conviction. Finding 22; Tr. at 83.

24. Petitioner was convicted of a criminal offense relating to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance. Findings 2-8.

25. The criminal offense of which Petitioner was convicted is a criminal offense as described in section
1128(b)(3) of the Social Security Act. Social Security Act, section 1128(b)(3).

26. The Secretary of the Department of Health and Human Services (the Secretary) has authority to
impose and direct an exclusion against Petitioner from participating in Medicare and Medicaid, pursuant to
section 1128(b)(3) of the Social Security Act. Social Security Act, section 1128(b)(3).

27. The Secretary delegated to the I.G. the duty to impose and direct exclusions pursuant to section 1128
of the Social Security Act. 48 Fed. Reg. 21662 (May 13, 1983).

28. On May 18, 1989, the I.G. notified Petitioner that he was being excluded from participation in the
Medicare and Medicaid programs as a result of his conviction of a criminal offense relating to the unlawful
manufacture, distribution, prescription, or dispensing of a controlled substance. I.G. Ex. 9.

29. Petitioner was notified that he was being excluded for five years pursuant to section 1128(b)(3) of the
Social Security Act. I.G. Ex. 9.

30. The exclusion provisions of section 1128 of the Social Security Act establish neither minimum nor
maximum exclusion terms in those circumstances where the I.G. has discretion to impose and direct
exclusions. Social Security Act, section 1128(b)(1)-(14).

31. A remedial objective of section 1128 of the Social Security Act is to protect program beneficiaries and
recipients by permitting the Secretary (or his delegate, the I.G.) to impose and direct exclusions from
participation in Medicare and Medicaid of those individuals who demonstrate by their conduct that they
cannot be trusted to provide items or services to program beneficiaries and recipients. Social Security Act,
section 1128.

32. An additional remedial objective of section 1128 of the Social Security Act is to deter individuals from
engaging in conduct which jeopardizes the integrity of federally-funded health care programs. Social
Security Act, section 1128.

33. Petitioner was convicted of a serious criminal offense. Findings 2-8; See 42 C.F.R. 1001.125(b)(1).

34. Petitioner's unlawful conduct did not have an adverse impact on his patients or on program
beneficiaries or recipients. Findings 16-17; See 42 C.F.R. 1001.125(b)(2).

35. Petitioner's unlawful conduct was not intended to cause harm to patients or to the integrity of the
Medicare and Medicaid programs. Findings 16-17; See 42 C.F.R. 1001.125(b)(4).

36. Petitioner's substance abuse disorder and his negligence in prescribing controlled substances
jeopardized the welfare of his patients and posed a threat to the integrity of the Medicare and Medicaid
programs. Findings 12-13; See 42 C.F.R. 1001.125(b)(2), (b)(6).

37. Petitioner's adherence to a treatment program for substance abuse minimizes the possibility that he will
again abuse controlled substances or alcohol. Findings 21-22; See 42 C.F.R. 1001.125(b)(4), (b)(6).

38. The restrictions against Petitioner prescribing controlled substances imposed by the Alaska Medical
Board minimize the possibility that in the future he will negligently prescribe controlled substances to his
patients. Finding 14; See 42 C.F.R. 1001.125(b)(4), (b)(6).

39. Petitioner's prescription practices since his 1988 conviction demonstrate that he is unlikely to
negligently prescribe controlled substances to his patients. Finding 22; See 42 C.F.R. 1001.125(b)(4),
(b)(6).

40. The five year exclusion imposed and directed against Petitioner is excessive. Findings 31-39.

41. The remedial considerations of section 1128 of the Social Security Act will be served in this case by an
18 month exclusion.


ANALYSIS

Petitioner was convicted of unlawful distribution of a controlled substance in violation of 21 U.S.C.
841(a)(1). There is no question that this conviction is related to the unlawful distribution of a controlled
substance within the meaning of section 1128(b)(3) of the Social Security Act. Therefore, the I.G. was
authorized to exclude Petitioner from participating in Medicare and Medicaid. What remains to be decided
is whether the five year exclusion imposed against Petitioner by the I.G. is reasonable.

The exclusion law was enacted by Congress to protect the integrity of federally funded health care
programs. Among other things, the law was designed to protect program recipients and beneficiaries from
individuals who have demonstrated by their behavior that they cannot be entrusted with the well-being and
safety of recipients and beneficiaries.

There are two ways that exclusions imposed and directed pursuant to this law advance the remedial
purpose. First, the law protects recipients and beneficiaries from untrustworthy providers until they can be
trusted to serve program recipients and beneficiaries. Second, exclusions function as examples to deter
providers of items or services from engaging in conduct which threatens the well-being and safety of
recipients and beneficiaries. See House Rep. No. 95-393, Part II, 95th Cong., 1st Sess., reprinted in 1977
U.S. Code Cong. & Admin. News, 3072.

An exclusion imposed and directed pursuant to section 1128 will likely have an adverse financial impact
on the person against whom the exclusion is imposed. However, the law places the well-being and safety
of recipients and beneficiaries ahead of the pecuniary interests of providers. Thus, in determining the
reasonableness of an exclusion, the primary consideration must be the degree to which the exclusion serves
the law's remedial objectives. An exclusion is not punitive if it does reasonably serve these objectives,
even if it has a severe adverse impact on the person against whom it is imposed.

In order to decide whether an exclusion is reasonable in a particular case, I must judge the exclusion in
light of the evidence in the case and the intent of the exclusion law. The purpose of the hearing is not to
determine how accurately the I.G. applied the law to the facts before him, but whether, based on all
relevant evidence, the exclusion comports with the legislative purpose.

The hearing is, by law, de novo. Social Security Act, section 205(b). Evidence which is relevant to the
reasonableness of an exclusion will be admitted in a hearing on an exclusion whether or not that evidence
was available to the I.G. at the time the I.G. made his exclusion determination. Moreover, evidence which
relates to a petitioner's trustworthiness or to the remedial objectives of the exclusion law is admissible at an
exclusion hearing, even if it relates to conduct other than that which triggered the statutory authority to
exclude a petitioner. Thus, I admitted evidence in this case relating to Petitioner's substance abuse
problems and his negligently prescribing controlled substances, even though that evidence was not
evidence pertaining to the criminal conviction which authorized the I.G.'s exclusion of Petitioner.
Similarly, I allowed evidence as to a prior conviction of Petitioner for a criminal offense relating to the
unlawful dispensing of a controlled substance. Also, I admitted evidence pertaining to the Petitioner's
motives for engaging in the conduct which resulted in his 1988 criminal conviction and his post-conviction
efforts at rehabilitation.

The Secretary has adopted regulations to be applied in exclusion cases. The regulations specifically apply
only to exclusions for "program-related" offenses (convictions for criminal offenses relating to Medicare
and Medicaid). However, they do express the Secretary's policy for evaluating cases where permissive
exclusions may be appropriate. Thus, the regulations are instructive as broad guidelines for determining
the appropriate length of exclusions in cases where the Secretary has authority to exclude individuals and
entities. The regulations require the I.G., in determining exclusions, to consider factors related to the
seriousness and program impact of the offense and to balance those factors against any mitigating factors
that may exist. 42 C.F.R. 1001.125(b)(1)-(7).

An exclusion determination will be held to be reasonable where, given the evidence of the case, it is shown
to fairly comport with legislative intent. "The word 'reasonable' conveys the meaning that . . . [the I.G.] is
required at the hearing only to show that the length of the [exclusion] determined . . . was not extreme or
excessive." (Emphasis added.) 48 Fed. Reg. 3744 (Jan. 27, 1983) Should I determine that an exclusion is
unreasonable, I have authority to modify the exclusion, based on the law and the evidence. Social Security
Act, section 205(b).

There is no question that Petitioner engaged in conduct which, were it to continue, would pose a serious
threat to the integrity of the Medicare and Medicaid programs. The evidence establishes that Petitioner not
only abused controlled substances, but that he was negligent in prescribing and dispensing them. His
misconduct was so serious that the Alaska Medical Board suspended his license to practice medicine and
permanently prohibited him from prescribing Schedule II and Schedule III controlled substances. I
conclude that this misconduct, coupled with Petitioner's conviction for unlawful distribution of a controlled
substance, gave the I.G. reasons to conclude that a substantial exclusion was needed to protect the welfare
of program beneficiaries and recipients and the integrity of the Medicare and Medicaid programs. See 42
C.F.R. 1001.125(b)(6).

However, I conclude that the five year exclusion imposed and directed against Petitioner is excessive,
when considered in light of the evidence in this case. A five year exclusion is not needed here to protect
program beneficiaries or recipients or to protect the integrity of federally funded health care programs.
And, although a five-year exclusion arguably would stand as a strong deterrent against other individuals
engaging in the conduct engaged in by Petitioner, an exclusion of that length is unreasonable, given the
mitigating circumstances present here.

The evidence establishes that Petitioner's unlawful conduct which resulted in his 1988 conviction was not
motivated by self-interest, but rather by humanitarian concern for the well-being of a patient and her
unborn child. The evidence establishes that Petitioner was referred a patient who was pregnant and who
told Petitioner that she was a heroin addict. Petitioner unsuccessfully attempted to enroll his patient in a
Methadone maintenance program. Frustrated by what he saw as an unreasonable refusal to admit the
patient, Petitioner unlawfully prescribed Methadone to her. The conduct which resulted in Petitioner's
conviction was therefore not conduct which adversely affected Petitioner's patient or which would have
adversely affected program recipients and beneficiaries. See 42 C.F.R. 1001.125(b)(2).

The record also establishes that Petitioner's criminal conduct was an isolated episode. It was of short
duration. Petitioner was not sentenced to incarceration by the District Court. See 42 C.F.R.
1001.125(b)(5).

There are mitigating circumstances in this case. See 42 C.F.R. 1001.125(b)(4). I am persuaded that there
is little likelihood that Petitioner will again engage in negligent prescribing of controlled substances or
abuse controlled substances. Petitioner's authority to prescribe Schedule II and Schedule III controlled
substances was revoked by the Alaska Medical Board, thereby sharply curtailing, if not totally precluding,
his access to these medications. He has written more than 4,000 prescriptions since his conviction and
these have been scrutinized by federal authorities. These prescriptions have not evidenced any
irregularities of the kind manifested prior to Petitioner's 1988 conviction. Petitioner has, since his 1988
criminal conviction, completed in- and out-patient treatment for substance abuse and is an active
participant in Alcoholics Anonymous.

My conclusion as to Petitioner's trustworthiness relies in large respect on the testimony of Petitioner's
federal probation officer, Mr. Joseph Kolodji. See Tr. at 77-90. Mr. Kolodji's job requires him to make
judgments and recommendations concerning the probity and trustworthiness of individuals. He has
worked closely with, and carefully supervised, Petitioner. He had nothing to gain by testifying in
Petitioner's support. Mr. Kolodji's assessment that there was little likelihood that Petitioner would repeat
his past misconduct must therefore be given considerable credence.

The I.G. notes that Congress mandated a minimum five year exclusion for individuals convicted of
criminal offenses relating to the delivery of an item or service under Medicare or Medicaid or for patient
abuse or neglect. The I.G. contends that the offense upon which Petitioner's exclusion is premised is of
greater seriousness than offenses for which Congress mandated minimum five year exclusions. Therefore,
according to the I.G., an exclusion of Petitioner for any period less than five years will be inconsistent with
Congressional intent.

It is legitimate to compare cases for which exclusions are permitted with those for which the exclusion is
mandated. If a case involves similar conduct to that which mandates at least a five year exclusion, or if the
conduct poses an equal or greater threat to the integrity of federally-funded health care programs than
conduct which mandates at least a five year exclusion, then it would be inconsistent with Congressional
intent to impose an exclusion for less than five years.

On the other hand, the fact that Congress did not mandate a minimum exclusion in those cases where
exclusions are permitted by law, means that Congress did not conclude that any minimum exclusion period
was necessarily required in such cases. Congress intended that each permissive exclusion case be
evaluated based on its facts and that exclusions be tailored to serve the remedial purposes of the law.

I do not agree with the I.G.'s argument that Petitioner's offense was of greater seriousness than those
offenses for which a five year minimum exclusion is mandated. The evidence pertaining to this offense
shows that Petitioner's conduct, while illegal, was motivated by altruism. That cannot generally be said
about offenses related to the delivery of an item or service under Medicare or Medicaid. It certainly cannot
be said about crimes of patient neglect or abuse.

The I.G. also argues that if I apply the reasoning I used to sustain the exclusions imposed in the cases of
Leonard N. Schwartz, R. Ph., DAB Civ. Rem. C-62 (1989), and Bernard Lerner, M.D., DAB Civ. Rem. C-
48 (1989), to the present case, then I must sustain the exclusion imposed here. I disagree.

The petitioner in Schwartz was a pharmacist convicted of failure to maintain records pertaining to the sale,
during a 16 month period, of more than 34,000 tablets of Preludin, a Schedule II controlled substance. He
admitted that he had sold many Preludin tablets without receiving prescriptions for them. As a
consequence of his conviction, he was sentenced to a period of incarceration plus five years probation. I
sustained an eight year exclusion in that case, based in part on the seriousness of the petitioner's criminal
misconduct, but also based on my conclusions that the petitioner's conduct had been motivated by personal
gain and that the petitioner had not proven that he could be trusted to deal with program recipients and
beneficiaries.

The petitioner in Lerner was a physician convicted of 163 counts of knowingly, willfully, and unlawfully
obtaining and possessing controlled substances. The evidence established that the petitioner had for many
years been addicted to Dilauded, a Schedule II controlled substance. In order to obtain Dilauded, the
petitioner issued prescriptions for this medication to patients who turned back some of the drug to the
petitioner. Some of these patients were individuals who had received treatment for drug addiction. One of
these patients was a 15-year old female employed by the petitioner as a receptionist. As a consequence of
his conviction, the petitioner was sentenced to a substantial period of incarceration, plus a lengthy period of
probation.

I sustained a 15 year exclusion in Lerner based in some respects on the seriousness of the petitioner's
criminal misconduct. However, there were other facts in that case upon which I premised my conclusion
that a lengthy exclusion was needed to protect the integrity of federally funded health care programs and
their beneficiaries and recipients. The evidence in Lerner established that the petitioner had ignored
repeated warnings from investigating authorities and had denied misconduct, even when faced with
irrefutable evidence of it. The trial judge in the petitioner's criminal case found that the petitioner had lied
in his testimony. The petitioner had withdrawn from substance abuse treatment programs prior to having
completed them.

Based on this evidence, I concluded that the petitioner in Lerner had not established that he could be
trusted to deal with program recipients and beneficiaries. I found that the risk to recipients and
beneficiaries was so great, should the petitioner relapse, that the lengthy exclusion imposed by the I.G. was
justified.

Schwartz and Lerner are distinguishable from the present case on several grounds. In both Schwartz and
Lerner, the criminal misconduct upon which the exclusions were premised was motivated by
considerations of personal gain. In the present case, Petitioner's unlawful conduct stemmed from his
concern for the welfare of his patient. The criminal misconduct in Schwartz and Lerner was perpetrated
over a protracted period of time. Here, the criminal misconduct involved an episode of brief duration. The
seriousness of the misconduct in both Schwartz and Lerner is in some respects demonstrated by the fact
that in both cases the petitioners were incarcerated. Here, no prison sentence was imposed on Petitioner.

However, the most important distinction between this case and Schwartz and Lerner is that, in this case,
Petitioner offered convincing evidence as to his rehabilitation and trustworthiness to provide services to
program recipients and beneficiaries. I was not persuaded by the evidence offered by the petitioners in
Schwartz and Lerner.

The I.G. also argues that Petitioner's 1988 conviction is Petitioner's second conviction for unlawful
distribution of a controlled substance. The evidence establishes that Petitioner had been convicted in 1978
of unlawful distribution of a controlled substance. I am persuaded by Petitioner's testimony that the
conduct which resulted in that conviction manifested similar altruism to that which led to his 1988
conviction. Tr. at 125-126. The I.G. asserts that the evidence of Petitioner's prior conviction, when
coupled with evidence of his 1988 conviction, is strong evidence of Petitioner's lack of trustworthiness and
establishes that the five year exclusion is reasonable.

Certainly, the fact that Petitioner had previously been convicted of the same type of offense of which he
was convicted in 1988 is a fact which raises serious questions about Petitioner's trustworthiness to treat
program recipients and beneficiaries. However, I conclude that Petitioner offered persuasive evidence that,
notwithstanding what he may have done in the past, he is not likely to repeat that conduct in the future.

The remedial purposes of the exclusion law will be served in this case by an 18 month exclusion. An 18
month exclusion is not a brief exclusion. Petitioner will not be eligible to apply for reinstatement as a
Medicare or Medicaid provider until late in 1990. The 18 month exclusion period will provide a sufficient
period of time to test Petitioner's assurances that he will not abuse controlled substances again. It will also
serve as a deterrent to others without being unreasonably punitive, given the evidence in this case.


CONCLUSION

Based on the law and the evidence in this case, I conclude that the five year exclusion imposed against
Petitioner from participating in the Medicare and Medicaid programs is excessive and unreasonable. I
modify the exclusion to an 18 month exclusion.

_________________________
Steven T. Kessel
Administrative Law Judge