SUBJECT:

Victor Lee Johnson,

Petitioner,

The Inspector General

DECISION

I deny the motion of the Inspector General (I.G.) to dismiss the hearing request filed by Petitioner, Victor Lee Johnson. I grant the I.G.'s motion for summary disposition and sustain the 10-year exclusion that the I.G. imposed against Petitioner pursuant to section 1128(a)(1) of the Social Security Act (Act).

I. Background

On October 31, 2000, the I.G. sent a notice to Petitioner advising him that he was being excluded pursuant to section 1128(a)(1) of the Act from participating in Medicare and other federally funded health care programs for a period of 10 years. Petitioner requested a hearing and the case was assigned to me for a hearing and a decision. The I.G. moved to dismiss Petitioner's hearing request on the ground that he had not filed it timely. The I.G. moved, alternatively, for summary disposition in the case. At Part II of this decision I rule on the I.G.'s motion to dismiss. At Part III, I rule on the I.G.'s motion for summary disposition.

The I.G. submitted her brief in support of her motion to dismiss and motion for summary disposition (I.G. Br.), which included four proposed exhibits in support of the motions. I.G. Exs. 1- 4. Petitioner submitted his response to the I.G.'s motions (P. Resp.), which included six proposed exhibits. P. Exs. 1-6. The I.G. submitted a reply brief (I.G. Reply). I am receiving all of the parties' proposed exhibits into evidence.

II. The I.G.'s motion to dismiss Petitioner's hearing request.

The I.G. moved to dismiss Petitioner's hearing request on the ground that Petitioner filed it untimely. However, the I.G. now concedes that Petitioner filed his hearing request timely. I.G. Reply. I deny the I.G.'s motion to dismiss in light of that and in view of evidence offered by Petitioner which shows that he filed his request timely. The evidence submitted by Petitioner, which the I.G. does not contest, establishes that Petitioner was incarcerated at a federal prison facility at the time that the I.G. mailed her exclusion notice. P. Ex. 2. The I.G. mailed her notice to a facility that had a name that was similar to that of the facility at which Petitioner was incarcerated. The notice was not forwarded to Petitioner, however. Thus, Petitioner did not become aware of the I.G.'s exclusion determination until February 15, 2001, six days prior to filing his hearing request. Id.

III. Issues, findings of fact and conclusions of law

A. Issues

The issues in this case are whether:

1. A basis exists to exclude Petitioner;

and

2. A 10-year exclusion is reasonable.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separate heading. I discuss each Finding in detail.

1. Summary disposition is appropriate in this case.

Petitioner opposes the I.G.'s motion for summary disposition by arguing that there are disputed issues of material fact that may be resolved only at an in-person hearing. I find that there are no disputed issues of material fact and, consequently, summary disposition is appropriate.

Petitioner does not take issue with any of the facts that the I.G. asserts to be the basis for her exclusion determination. As I discuss below, Petitioner concedes that he was convicted of a criminal offense which is described by section 1128(a)(1) of the Act. He does not dispute that there are facts which establish the aggravating factors that the I.G. relies on to justify the length of the exclusion that the I.G. imposed.

Petitioner argues that there are additional facts which support his contention that the exclusion is unreasonable and which Petitioner should be given the opportunity to prove at an in-person hearing. P. Resp. at 8. However, as I discuss below, at Finding 3.b., none of these alleged facts are relevant to the issue of length of exclusion. Consequently, no basis exists for me to give Petitioner a hearing as to these alleged facts.

2. A basis exists to impose an exclusion against Petitioner.

The undisputed material facts of this case establish that, on May 16, 2000, Petitioner pled guilty to the federal crime of health care fraud. I.G. Ex. 3, at 1. The particulars of his crime are spelled out in a one-count criminal indictment that was filed against Petitioner in the United States District Court for the Southern District of Georgia, Augusta Division, on February 14, 2000. I.G. Ex. 2. Petitioner, a pharmacist, knowingly and willfully executed a scheme to defraud the State of Georgia Department of Medical Assistance (Georgia Medicaid program) and various private insurers . Id. at 1. Petitioner's criminal scheme included submitting false and fraudulent claims to the Georgia Medicaid program's fiscal intermediary for the dispensing of prescription drugs which, in fact, Petitioner did not provide. Id. at 3.

Under section 1128(a)(1) of the Act, the I.G. is required to exclude any individual who is convicted of a crime related to the delivery of an item or service under a federally funded health care program. There is no dispute in this case that Petitioner's crime is such a crime and, therefore, a basis exists to exclude Petitioner.

3. An exclusion of 10 years is reasonable.

The I.G. is required to exclude, for at least five years, any individual who is excluded pursuant to section 1128(a)(1) of the Act. Act, section 1128(c)(3)(B). The I.G. may exclude an individual for more than five years where there exists evidence that establishes the individual to be so untrustworthy as to necessitate an exclusion of more than five years.

There are specific factors which must be considered in determining the length of any exclusion of more than five years that is imposed pursuant to section 1128(a)(1). These factors are set forth at 42 C.F.R. § 1001.102. The regulation defines "aggravating" factors which may justify an exclusion for more than five years. 42 C.F.R. § 1001.102(b). The regulation also defines "mitigating" factors which, if present, may serve to offset any established aggravating factors. 42 C.F.R. § 1001.102(c). The regulation functions as rules of evidence governing the length of exclusions. Only evidence that relates to one of the specified aggravating or mitigating factors may be considered in deciding the length of an exclusion. Evidence which does not relate to one of the factors is not relevant and may not be considered.

The I.G.'s exclusion determination will be upheld as reasonable if it is based on evidence relating to aggravating or mitigating factors and if it establishes a period of exclusion that falls within a range of reasonable possible exclusions. However, I may modify an exclusion determination if I find that it does not fall within a reasonable range of possible exclusions.

At Part a. of this Finding, I conclude that the I.G. established the presence of three aggravating factors. At Part b. I find that Petitioner failed to establish the presence of any mitigating factors. At Part c. I conclude that the 10-year exclusion imposed by the I.G. is not unreasonable.

a. The I.G. established the presence of three aggravating factors.

The I.G. established the presence of three aggravating factors in this case. They are as follows:

1. The acts resulting in Petitioner's conviction resulted in a loss to the Georgia Medicaid program of $1,500 or more. 42 C.F.R. § 1001.102(b)(1). The I.G. has not offered any accounting of the theft that Petitioner perpetrated against the Georgia Medicaid program. However, I infer from the fact that he was sentenced to pay restitution to the Georgia Medicaid program in the amount of $21,658.06 that Petitioner's theft from that program exceeded $1,500. I.G. Ex. 3, at 5.

2. The acts that resulted in Petitioner's conviction were committed over a period of a year or more. 42 C.F.R. § 1001.102(b)(2). Petitioner pled guilty to a criminal scheme that had its inception on or about January 1, 1997 and which continued into November, 1998. I.G. Ex. 2, at 1.

3. The sentence that Petitioner received for his crime included a period of incarceration. 42 C.F.R. § 1001.102(b)(5). Petitioner was sentenced to a term of five months' imprisonment. I.G. Ex. 3, at 2.

b. Petitioner did not establish the presence of any mitigating factors.

Petitioner alleges a number of factors which he contends demonstrate that a 10-year exclusion is not reasonable. These include the following:

• The Georgia State Board of Pharmacy decided to reinstate Petitioner's pharmacist's license albeit under strict probationary rules which will be in place for a period of five years.

• The offense to which Petitioner pled guilty did not involve the abuse or unauthorized use of drugs or narcotics by Petitioner.

• Petitioner did not inappropriately dispense excessive doses of drugs to Medicare beneficiaries or Medicaid recipients.

• Prior to his conviction, Petitioner had never been charged with engaging in similar criminal activities.

• Prior to his incarceration, Petitioner paid the entire amount of restitution that had been ordered in his case.

• Petitioner has a history of being actively involved with the Georgia Board of Pharmacy. At one point Petitioner served as an officer of that organization.

• Petitioner has complied fully with the terms of his sentence.

• Petitioner has suffered personal and professional hardship as a consequence of his exclusion.

P. Resp. at 8. However, assuming the truth of these contentions, none of them comprise any of the mitigating factors that are identified at 42 C.F.R. § 1001.102(c). Therefore, these contentions are not relevant to the issue of whether the length of the exclusion is unreasonable and I may not consider them in evaluating the reasonableness of the I.G.'s exclusion determination.

c. A 10-year exclusion is not unreasonable.

The ultimate question that I must decide in any case where the length of an exclusion is at issue is whether the exclusion is reasonably designed to protect federally funded health care programs and the beneficiaries and recipients of those programs from an individual who has demonstrated by his conduct that he is untrustworthy. I find that, in this case, the exclusion is not unreasonable. The three aggravating factors proved by the I.G. show that Petitioner is a highly untrustworthy individual. He engaged in protracted criminal activity directed against the Georgia Medicaid program, a federally funded health care program. The impact of Petitioner's criminal activity was substantial as is measured by the amount of restitution he was ordered to pay. He stole a substantial amount of funds that had been dedicated by the program to pay for the health care of needy Georgia residents.

Steven T. Kessel

Administrative Law Judge