Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
DATE: August 8, 1990
Docket No. C-197
In the Case of:
Michael D. Reiner, R.M.D.,
Petitioner,
- v. -
The Inspector General.
DECISION
By letter dated November 9, 1989, the Inspector General (the I.G.) notified
Petitioner that he was being
excluded from participation in the Medicare and any State health care program
for four years. Petitioner
was advised that his exclusion resulted from his conviction of a criminal offense
related to fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct.
Petitioner was further
advised that his exclusion was authorized by section 1128(b)(1) of the Social
Security Act.
Petitioner timely requested a hearing, and the case was assigned to me for
a hearing and decision. I held a
hearing in Denver, Colorado on April 17 - 18, 1990.
I have considered the evidence introduced by both parties at the hearing, as
well as applicable law. I
conclude that the four year exclusion imposed and directed against Petitioner
by the I.G. is reasonable.
Therefore, I sustain the exclusion, except that for reasons stated herein, I
modify the exclusion so that
Petitioner will be eligible to apply for reinstatement on September 11, 1993.
ISSUE
The issue in this case is whether the four year 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 received a license to practice medicine in Colorado in 1984. Tr. at 174.
2. In March, 1986, Petitioner contracted to provide services at the South Routt
Medical Center at Oak
Creek, Colorado. Tr. at 175.
3. South Routt Medical Center was owned by Kremmling Memorial Hospital. Tr. at 176.
4. Petitioner's oral contract to provide services at South Routt Medical Center
provided that all
reimbursement received for Petitioner's services would be remitted to Kremmling
Memorial Hospital. Tr.
at 42.
5. Petitioner's contract further provided that Kremmling Memorial Hospital
would pay Petitioner for his
services based on a percentage of the dollar amount of the reimbursement claims
made for his services. Tr.
at 42, 177 - 178.
6. Between the summer of 1986 and January 1987, Petitioner diverted to his
own use reimbursement
monies for services provided at the South Routt Medical Center. These monies
should have been remitted
to Kremmling Memorial Hospital. Tr. at 43 - 44, 181 - 182.
7. Petitioner diverted money on several occasions by depositing reimbursement
checks to his own account.
These checks should have been turned over to Kremmling Memorial Hospital. Tr.
at 182.
8. The amount of money which Petitioner diverted to his own use in 1986 exceeded
$10,000.00. Tr. 60 -
61, 98, 113; I.G. Ex. 9, 10.
9. Petitioner was addicted to and abused medications in 1986. Tr. at 180.
10. During 1986, Petitioner took medications from South Routt Medical Center,
including Demerol,
Percocet, and cocaine, and substituted other substances for these drugs. Tr.
at 50 - 52, 186.
11. During 1986, Petitioner wrote prescriptions for narcotic medications which
he diverted to his own use.
Tr. at 54, 186.
12. The prescriptions written by Petitioner included prescriptions written
for individuals who kept some of
the narcotic medications they obtained pursuant to the prescriptions and returned
some of the narcotic
medications to Petitioner. Tr. at 55.
13. Petitioner was required by law to maintain a log of narcotic medications
dispensed at South Routt
Medical Center. Tr. at 46.
14. Petitioner failed to maintain the narcotic medications log. Tr. at 55, 307.
15. Petitioner attempted to conceal his failure to maintain the narcotic medications
log from law
enforcement authorities by falsifying entries to the log. Tr. at 47 - 48.
16. Petitioner's diversions of reimbursement monies and medications were discovered
by officers of
Kremmling Memorial Hospital and by law enforcement authorities in January, 1987.
Tr. at 41.
17. Petitioner first sought treatment for his addiction to medications in early
1987, after an investigation
into his conduct had been initiated by law enforcement authorities. Tr. at 188.
18. On May 18, 1987, a criminal complaint and information issued against Petitioner
from a Colorado
state court, charging him with 17 criminal offenses. I.G. Ex. 1.
19. On September 11, 1987, Petitioner pleaded guilty to two criminal offenses,
and entered into an
agreement whereby judgment of conviction was deferred with respect to two additional
criminal offenses.
I.G. Ex. 2, 3..
20. The offenses to which Petitioner entered into a deferred adjudication arrangement
included: Count I of
the complaint and information, as amended, which charged Petitioner with unlawfully
and knowingly
using money in excess of $300.00 which belonged to Kremmling Memorial Hospital;
and Count II of the
complaint and information, which charged Petitioner with unlawfully and knowingly
obtaining Percocet, a
Schedule II controlled substance, by means of a false prescription. I.G. Ex.
1, 2, 3.
21. The offenses to which Petitioner pleaded guilty included: Count XV of the
complaint and information,
which charged Petitioner with unlawfully and knowingly failing to maintain an
accurate record and
inventory of narcotics and controlled substances dispensed and controlled by
him; and Count XVII of the
complaint and information, which charged Petitioner with unlawfully and knowingly
stealing drugs,
narcotics and controlled substances worth more than $50.00 from the South Routt
Medical Center and
Kremmling Memorial Hospital District. I.G. Ex. 1, 3.
22. The sentence imposed against Petitioner included a suspended sentence of
one year in prison, as well
as a term of probation. I.G. Ex. 4.
23. As part of his plea arrangement, Petitioner paid restitution totalling $10,800.00. I.G. Ex. 4, Tr. at 199.
24. Petitioner paid additional restitution to Kremmling Memorial Hospital in
an amount between
$2,000.00 and $2,500.00. Tr. at 200.
25. Petitioner's initial treatment for substance abuse consisted of outpatient
treatment, which included
weekly counseling and urine screening three times weekly. P. Ex. 2.
26. In early 1988, Petitioner twice used controlled substances in violation
of the terms of his substance
abuse treatment. Tr. at 226.
27. One of these episodes consisted of unauthorized use of cocaine by Petitioner. Tr. at 202, 210.
28. These episodes of controlled substance misuse were detected through urine screenings. Tr. at 202.
29. As a consequence of these episodes, Petitioner was hospitalized for treatment
for one month beginning
in March, 1988. Tr. at 211.
30. During the course of his inpatient treatment, Petitioner accepted the fact
that he was a narcotics addict.
Tr. at 233.
31. Petitioner has faithfully adhered to prescribed treatment since his discharge
from the hospital. Tr. at
237.
32. Petitioner has been regularly subject to urine tests since his discharge
from the hospital, with all tests
being negative. Tr. at 238.
33. Petitioner has been employed as a physician since his conviction, without
further allegations of
improper conduct having been made against him. Tr. at 257.
34. Petitioner has not abused a controlled substance since March, 1988. Finding 32.
35. The prognosis for Petitioner to remain free from substance abuse is good,
provided that he adheres to
the plan of treatment prescribed for him. Tr. at 215.
36. It cannot be determined with assurance at this point in time that Petitioner
will not relapse. See Tr. at
215 - 216.
37. Petitioner was convicted of a criminal offense relating to fraud, theft,
embezzlement, breach of
fiduciary responsibility, or other financial misconduct in connection with the
delivery of a health care item
or service. Findings 6 - 8, 19 - 21; Social Security Act, section 1128(b)(1).
38. Pursuant to section 1128(b)(1) of the Social Security Act, 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. Social Security Act, section 1128(b)(1).
39. 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).
40. On November 9, 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 fraud, theft,
embezzlement, breach of fiduciary responsibility, or other financial misconduct
in connection with the
delivery of a health care item or service.
41. Petitioner was notified that he was being excluded for four years, pursuant
to section 1128(b)(1) of the
Social Security Act.
42. 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).
43. A remedial objective of section 1128 of the Social Security Act is to protect
the integrity of federally-
funded health care programs. Social Security Act, section 1128.
44. An additional remedial objective of section 1128 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.
45. An additional remedial objective of section 1128 is to deter individuals
from engaging in conduct
which jeopardizes the integrity of federally-funded health care programs, or
which threatens the well-being
of beneficiaries and recipients of those programs. Social Security Act, section
1128.
46. Petitioner committed serious criminal offenses. Findings 6 - 15, 19 - 21;
See 42 C.F.R.
1001.125(b)(1).
47. Petitioner's substance abuse disorder jeopardized the welfare of his patients
and posed a threat to the
integrity of the Medicare and Medicaid programs. Findings 9 - 15; See 42 C.F.R.
1001.125(b)(2), (b)(6).
48. Petitioner's unlawful use of reimbursement funds damaged the integrity
of a health care provider and
that of health care insurers. Findings 6 - 8; See 42 C.F.R. 1001.125(b)(2),
(b)(6).
49. Petitioner has not shown that there is no likelihood that he will again
abuse controlled substances. See
Finding 36.
50. The four year exclusion imposed and directed against Petitioner is reasonable.
ANALYSIS
There is no dispute that Petitioner was convicted of a criminal offense within
the meaning of section
1128(b)(1) of the Social Security Act. By virtue of this conviction, the I.G.
had authority to impose and
direct an exclusion against Petitioner from participating in the Medicare and
Medicaid programs.
Therefore, the only issue to be resolved in this case is whether the four year
exclusion is reasonable.
Resolution of that issue depends on analysis of the evidence in light of the
exclusion law's remedial
purpose.
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 had demonstrated by their behavior that they threatened the
integrity of federally funded
health care programs, or that they could not be entrusted with the well-being
and safety of beneficiaries and
recipients.
There are two ways that an exclusion imposed and directed pursuant to the law
advances this remedial
purpose. First, an exclusion protects programs and their beneficiaries and recipients
from an untrustworthy
provider until that provider demonstrates that he or she can be trusted to deal
with program funds and to
serve beneficiaries and recipients. Second, an exclusion deters providers of
items or services from
engaging in conduct which threatens the integrity of programs or the well-being
and safety of beneficiaries
and recipients. 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
program integrity and the
well-being of beneficiaries and recipients ahead of the pecuniary interests
of providers. An exclusion is not
punitive if it reasonably serves the law's remedial objectives, even if the
exclusion has a severe adverse
financial impact on the person against whom it is imposed.
The hearing is, by law, de novo. Social Security Act, section 205(b). Evidence
which is relevant to the
reasonableness of an exclusion is admissible 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 that evidence is of conduct other than that which
establishes statutory authority
to exclude a petitioner. 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.
In this case, I admitted evidence from Petitioner relating to his: (1) history
of substance abuse problems;
(2) motives for engaging in the conduct which resulted in his 1987 criminal
conviction; and (3) pre- and
post-conviction efforts at rehabilitation. I admitted evidence from the I.G.
concerning Petitioner's
substance abuse and conversion of reimbursement checks even though that evidence
in part pertained to
conduct beyond the narrow scope of conduct for which Petitioner was convicted.
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 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 discretion
to impose and direct
exclusions. The regulations require the I.G. 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
in 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). However,
based on the law and the
evidence, should I determine that an exclusion is unreasonable, I have authority
to modify the exclusion.
Social Security Act, section 205(b).
I conclude that the four year exclusion imposed and directed against Petitioner
is neither extreme nor
excessive. The exclusion in this case is justified given the seriousness of
the misconduct engaged in by
Petitioner, the absence of assurances that he will not at some point in the
near future resume that
misconduct, and the potential for harm should he resume that misconduct.
The evidence establishes that Petitioner is addicted to narcotic drugs, including
cocaine. In order to satisfy
the needs of his addiction, Petitioner stole narcotics from the medical facility
at which he worked and
issued false prescriptions for narcotics, which he then diverted to his own
use. He also enlisted the
assistance of some of his patients to kick back to him some of the narcotics
which he had prescribed.
Finding 12.
By Petitioner's own admission, his addiction clouded his judgment and caused
him to engage in reckless
and unlawful conduct. The evidence does not establish that Petitioner converted
reimbursement checks in
order to support his narcotics addiction. Nevertheless, he converted checks
at a time when he was actively
abusing narcotics, and it is reasonable for me to infer that this theft was
in some respects prompted by or
made easier for the Petitioner to rationalize by the effects that narcotics
were having on him.
By any measure, the crimes and misconduct committed by Petitioner were extremely
serious. Not only did
Petitioner jeopardize the financial integrity of the institution with which
he contracted, he endangered the
welfare of the patients whom he was sworn to protect and treat. The evidence
establishes that Petitioner
was capable of placing his own need for gratification above that of individuals
who placed their welfare
and indeed, their lives, in Petitioner's hands.
I conclude that given this history, there is a strong likelihood that individuals
in addition to Petitioner
would be seriously harmed, should Petitioner suffer a relapse. A margin of safety
should therefore be built
into any exclusion imposed against Petitioner. The exclusion imposed and directed
in this case does not
appear to be extreme or excessive in view of the damage Petitioner could cause
should he resume his past
conduct.
Petitioner testified at length at the hearing of this case concerning his insight
into his condition and the
efforts he has made to rehabilitate himself. I am convinced that Petitioner
was sincere, and that he has
made substantial and commendable progress towards recovery. Petitioner's sincerity
is underscored by
evidence that he has abstained from abusing drugs since March 1988.
However, I cannot find the exclusion in this case to be unreasonable if there
is even a slight possibility that
Petitioner might relapse, given the seriousness of the offenses committed by
Petitioner. No witness to this
proceeding, including Petitioner, could state with assurance that Petitioner
will not suffer a relapse.
Furthermore, the evidence established that Petitioner is a person whose addiction
is triggered by emotional
stress. In March, 1988, Petitioner did suffer a relapse, brought on by personal
pressures and stress.
There are some similarities between this case and others in which I have found
exclusions to be excessive.
In James E. Keil, M.D., DAB Civ. Rem. C-154 (1990), and Kenneth Behymer, M.D.,
DAB Civ. Rem. C-
140 (1990), I modified exclusions imposed and directed against physicians who
had been convicted of
criminal offenses related to their abuse of controlled substances. In each case,
I found the exclusion to be
excessive and I modified it because I was convinced that the petitioner had
rehabilitated himself and posed
little threat to the integrity of federally funded health care programs and
to beneficiaries and recipients of
these programs.
The level of rehabilitation attained by Petitioner in this case is similar
to that attained by the petitioners in
Keil and Behymer. However, there is a significant difference here which distinguishes
this case from those
two cases.
In both Keil and Behymer, the petitioners' pattern of substance abuse consisted
almost entirely of self-
destructive conduct. Neither petitioner had enlisted the aid of others to assist
him in illegally obtaining
drugs. Neither petitioner had, either in conjunction with his addiction, or
independently, engaged in
financial misconduct. By contrast, Petitioner in this case did involve others
in his efforts to obtain drugs,
did engage in financial misconduct, and at first sought to conceal his unlawful
conduct from investigating
authorities. In short, the misconduct engaged in by Petitioner posed a much
more serious threat to program
integrity and to the welfare of beneficiaries and recipients than that engaged
in by the petitioners in Keil
and Behymer. The threat posed to programs and to beneficiaries and recipients
by a repetition of unlawful
conduct therefore is greater in this case than was the case in Keil and Behymer.
And, consequently, I was
more willing to give the petitioners in those cases the benefit of the doubt
than I am here.
Petitioner notes that when he was originally excluded by the I.G. pursuant
to section 1128(a)(1), the term
of the exclusion was for five years. His exclusion had been effective for more
than a year when an
administrative law judge found the exclusion to be unauthorized by law. Petitioner
asserts that when the
term of the present exclusion, four years, is added to the period which predated
the previous administrative
law judge decision, the total exclusion imposed against him exceeds five years.
Petitioner asserts that he
has in effect been punished for pursuing his rights with respect to the original
exclusion. Had Petitioner
done nothing, he would have been eligible to apply for reinstatement as a participating
provider in
Medicare and Medicaid at an earlier date than will be the case under the present
exclusion.
The I.G. responds to this argument by asserting that the current exclusion
in effect gives Petitioner credit
for the period he was excluded prior to the previous administrative law judge
decision. The I.G. notes that
the original exclusion commenced on September 11, 1988, and was in effect until
the administrative law
judge's decision, on September 22, 1989. The present exclusion became effective
20 days from the
November 9, 1989 notice letter to Petitioner, and is for a period of four years.
Thus, according to the I.G.,
the total period for which the Petitioner will be excluded is for a few days
more than five years.
It appears from the record of this case that the current exclusion, when aggregated
with the period for
which Petitioner was previously excluded, will result in a total period of exclusion
of about five years, two
months, and 10 days. I base my conclusion on the facts that the I.G. would have
had 60 days to request
review of the September 22, 1989 decision and the current exclusion became effective
within the 60 day
period.
Although I find that the total period of exclusion imposed by the I.G. is not
unreasonable, I am sensitive to
Petitioner's argument that he has, in effect, been penalized for exercising
his rights. Therefore, I order that
the enclusion be modified so that Petitioner will be eligible to apply for reinstatement
as of the date he
would have been eligible under the terms of the original five year exclusion
-- September 11, 1993.
CONCLUSION
Based on the evidence in this case and the law, I conclude that the four year
exclusion imposed against
Petitioner from participating in the Medicare and Medicaid programs is reasonable.
I sustain the exclusion
imposed against Petitioner, and I enter a decision in favor of the I.G., except
that I modify the exclusion so
that Petitioner will be eligible to apply for reinstatement on September 11,
1993.
____________________________
Steven T. Kessel
Administrative Law Judge