By letter dated November 30, 1998, the I.G. notified Petitioner that it was being excluded from participating in Medicare and Medicaid. The I.G. explained that Petitioner's exclusion was authorized under section 1128(b)(4) of the Act because Petitioner's "license to practice medicine or provide health care in the State of Ohio was revoked, suspended, or otherwise lost or was surrendered while a formal disciplinary proceeding was pending before the State licensing authority for reasons bearing on [Petitioner's] professional competence, professional performance, or financial integrity." Additionally, the I.G. advised Petitioner that its exclusion would remain in effect until Petitioner obtained a valid license to provide health care in the State of Ohio.

Petitioner requested a hearing and the case was assigned to me for decision. The parties agreed that the case could be decided based on written submissions, and that an in-person hearing was not necessary. The parties have each submitted written arguments and proposed exhibits.

On April 19, 1999, I issued an order setting forth a schedule for the parties to submit briefs and supporting evidence. In response to my order, the I.G. submitted a brief and six proposed exhibits (I.G. Ex. 1-6). Petitioner did not object to these exhibits. Petitioner submitted a brief and a reply brief with supporting documentation, which I have numbered P. Ex. 1-21⁽²⁾. The I.G. did not object to these exhibits. Thus, in the absence of objection, I am admitting I.G. Ex. 1-6 and P. Ex. 1-21. I base my decision in this case on these exhibits, the applicable law, and the argument of the parties.

Pursuant to section 1128(b)(4) of the Act, the I.G. may exclude "[a]ny individual or entity - (A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity, or (B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and the proceeding concerned the individual's or entity's professional competence, professional performance, or financial integrity."

Pursuant to section 1128(c)(3)(E) of the Act, as amended by section 212 of the Health Insurance Portability and Accountability Act of 1996 (Pub.L.104-191), the length of an exclusion under section 1128(b)(4) "shall not be less than the period during which the individual's or entity's license to provide health care is revoked, suspended, or surrendered, or the individual or entity is excluded or suspended from a Federal or State health care program." Prior to 1996, the Act provided no criteria for establishing the length of exclusions for individuals or entities excluded pursuant section 1128(b)(4). The 1996 amendments require, at section 1128(c)(3)(E), that an individual or entity who is excluded under section 1128(b)(4) be excluded for not less than the period during which the individual's or entity's license to provide health care is revoked, suspended, or surrendered. Under the 1996 amendments, no issue of reasonableness as to the length of the exclusion exists where the exclusion imposed by the I.G. is coterminous with the revocation, suspension, or surrender of a State license. A coterminous exclusion, as in Petitioner's case, is the mandated minimum required by law.

1. Thomas J. Hutton, M.D., R. Ph., was licensed as a pharmacist in the State of Ohio. I.G. Ex. 3.

2. Petitioner was a pharmacy doing business in the State of Ohio with terminal distributor license number 02-0080700 issued by the State of Ohio. I.G. Ex. 3 and 4.

3. Thomas J. Hutton was Petitioner's responsible pharmacist. I.G. Ex. 4.

4. On March 13, 1997, Thomas J. Hutton's pharmacist license was revoked by the State of Ohio Board of Pharmacy (Board) based on the Board's finding that he "was guilty of dishonesty and unprofessional conduct in the practice of pharmacy as provided in Division (A)(2) of Section 4729.16 of the Ohio Revised Code." I.G. Ex. 3.

5. On March 13, 1997, Petitioner's distributor license was revoked based upon findings of fact by the Board that Petitioner had violated Federal and State laws including those involving the dispensing of narcotic and controlled substances. I.G. Ex. 4.

6. The March 13, 1997 Order of the Board made factual findings, inter alia, that Petitioner sold more than one preparation of exempt narcotic cough syrup within a forty-eight month period to multiple customers without a legitimate medical purpose, sold Schedule II controlled substances without prescriptions, and knowingly possessed false or forged prescriptions. I.G. Ex. 4.

7. On June 11, 1997, Petitioner's appeal of its license revocation was dismissed by the Court of Common Pleas of Lucas County, Ohio. I.G. Ex. 5; P. Ex. 20.

8. Petitioner's complaint filed with the Ohio Inspector General's Office challenging the Board's March 13, 1997 Order was dismissed on August 6, 1997, when the Ohio Inspector General concluded that the Board committed no wrongful acts. I.G. Ex. 5.

9. Petitioner's State of Ohio terminal distributor license has not been reinstated.

10. On November 30, 1998, the I.G. notified Petitioner of its exclusion from participation in Medicare and Medicaid.

11. Section 1128(b)(4)(A) of the Act authorizes the I.G. to exclude an individual or entity whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual's or entity's professional competence, professional performance, or financial integrity.

12. Petitioner possessed a license to provide health care within the scope of section 1128(b)(4) of the Act.

13. The Board's March 13, 1997 Order resulted in the revocation of Petitioner's terminal distributor license within the scope of section 1128(b)(4).

14. The revocation of Petitioner's terminal distributor license in the State of Ohio was for reasons bearing Petitioner's professional competence, professional performance, or financial integrity within the scope of section 1128(b)(4) of the Act.

15. The I.G. was authorized to exclude Petitioner pursuant to section 1128(b)(4) of the Act.

16. Where an exclusion is imposed pursuant to section 1128(b)(4) of the Act, the period of exclusion shall not be less than the period during which the individual's license to provide health care is revoked, suspended, or surrendered. Section 1128(c)(3)(E) of the Act.

17. When an exclusion is imposed pursuant to section 1128(b)(4) of the Act and the period of exclusion is coterminous with the loss, revocation, suspension, or surrender of a State license, then no issue of reasonableness concerning the length of the exclusion exists.

18. The exclusion imposed by the I.G. against Petitioner is for the minimum period mandated by section 1128(c)(3)(B) of the Act.

Petitioner does not dispute that its terminal distributor license was "revoked" (as that term is used in section 1128(b)(4)(A) of the Act) by the State licensing authority for reasons bearing on its professional competence or professional performance as those terms are used in section 1128(a)(4) of the Act. Rather, Petitioner raises a number of challenges concerning the fairness of the procedure and propriety of the charges involved in its license revocation. Petitioner asserts that its license revocation in Ohio was impermissibly motivated by racial concerns. Further, Petitioner asserts that it was denied due process in the proceedings before the Board. Additionally, Petitioner alleges that the Board had no jurisdiction to make the factual findings it did concerning Petitioner's alleged violations of Ohio statutes, especially those relating to criminal provisions. Finally, Petitioner asserts that the Board's Order was improperly served and failed to notify Petitioner of the time period allowed for the filing of an appeal, which made it impossible for Petitioner to timely appeal the Board's Order.

DISCUSSION

In my review of the record, I find that the evidence supports the conclusion that Petitioner's terminal distributor license was revoked by the State of Ohio licensing authority for reasons bearing on its professional competence and professional performance. The record reflects that Petitioner's license was revoked in a formal proceeding following findings by the Board that Petitioner sold controlled substances without a medical purpose and knowingly possessed false or forged prescriptions. I.G. Ex. 4. The Board's findings regarding the revocation of Petitioner's license became final on June 11, 1997, when Petitioner's appeal of the Board's Order was dismissed in the Court of Common Pleas of Lucas County, Ohio. P. Ex. 20.

Prior Departmental Appeals Board (DAB) decisions support Petitioner's exclusion. Petitioner's license was revoked pursuant to findings that it violated Federal and State laws regarding the sale of controlled substances. Board Order, I.G. Ex. 4. Prior DAB decisions have upheld exclusions where licenses have been revoked on similar grounds. In Roosevelt A. Striggles, CR114 (1991), the administrative law judge (ALJ) upheld the exclusion. Specifically, the ALJ stated:

An essential part of Petitioner's professional performance of his pharmacist's duties was to dispense controlled substances in compliance with the law and in a manner that would not endanger the health and safety of his customers. The Pharmacy Board unequivocally found that he had wilfully violated this obligation. This finding falls squarely within that which is covered by section 1128(b)(4)(A). Id. at 5.

This analysis is applicable whether the Petitioner is an individual or an entity. Under this analysis, the revocation of Petitioner's license was clearly for reasons related to its professional competence and professional performance under section 1128(b)(4)(A) of the Act.

On appeal, Petitioner also contends that the license revocation proceedings in its case were unfair and improper and Petitioner raises a number of challenges in this regard. All of Petitioner's contentions on this issue constitute a collateral attack on the actions of the State licensing authority and to the County Court decision upholding the Board's Order and are not relevant to the issue of the I.G.'s authority to exclude Petitioner. The I.G.'s authority to exclude an individual or an entity derives from the State proceeding and its outcome and not from the evidence on which the proceeding is based. DAB decisions have held that such collateral attack on the actions of the State licensing authority and the appellate process are not permitted in the context of an exclusion proceeding under section 1128(b)(4) of the Act. See Cherlyn J. Parrish, M.D., DAB CR560 (1999); Jagdish Mangla, M.D., DAB CR470 (1997); John W. Foderick, M.D., DAB CR43 (1990) aff'd DAB No.1125 (1990).

I therefore conclude that the I.G. was authorized to exclude Petitioner pursuant to section 1128(b)(4) of the Act. I conclude also that the period of exclusion imposed by the I.G. is the minimum mandatory period mandated by section 1128(c)(3)(E) of the Act. Accordingly, I sustain the exclusion.

1. In this decision, I refer to all programs from which Petitioner has been excluded, other than Medicare, as "Medicaid."

2. I have numbered exhibits filed with Petitioner's initial brief P. Ex. 1-19 and exhibits filed with his reply brief P. Ex. 20 and 21.