SUBJECT:

Robert Mark Armentrout, RPT, RCP,

Petitioner,

The Inspector General

DECISION

The Inspector General (I.G.) of the United States Department of Health and Human Services (DHHS) imposed and directed a three-year period of exclusion against Robert Mark Armentrout (Petitioner) from participating in the Medicare, Medicaid, and all federal health care programs (Medicare and Medicaid). I provide here a brief summary of my decision. First, I find that a Maryland District Court judge (Judge) accepted Petitioner's plea of guilty to one count of unlawfully obtaining a prescription drug by making and uttering a forged prescription (a misdemeanor). The Judge then found Petitioner guilty and imposed a fine of $250.00. The Judge also sentenced Petitioner to 90 days of incarceration, all of which was suspended. Subsequently, Petitioner requested and received a modification of his sentence to probation before judgment. Nevertheless, due to the definitions of "convicted" under the law pertinent to this case, I find that Petitioner was convicted of a misdemeanor criminal offense relating to the unlawful prescription of a controlled substance for the purpose of exclusion. The I.G. consequently may exclude Petitioner for three years, subject to increase or decrease depending upon the presence of aggravating or mitigating factors. I find one aggravating factor. The I.G. in her discretion imposed no additional period of exclusion based on that aggravating factor. Consequently, I decide that Petitioner's three-year period of exclusion is reasonable.

I. Procedural History

On October 31, 2000, the I.G. notified Petitioner that he was being excluded for a period of three years from participating in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act). The I.G. explained that Petitioner's exclusion, under section 1128(b)(3) of the Act, was based on his conviction of a "criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." The I.G.'s letter also explained that the term "convicted" was defined in section 1128(i) of the Act. On December 6, 2000, Petitioner made a timely request for a hearing. I was assigned the case for decision.

I convened a prehearing conference during which the parties agreed that an in-person hearing was not necessary and that I could decide the case based upon written submissions, as provided in 42 C.F.R. § 1005.6(b)(5). The I.G. filed her brief (I.G. Br.) in support of exclusion, accompanied by I.G. Exs. 1 - 6. Petitioner did not object to the I.G.'s exhibits. Petitioner filed his brief (P. Br.) opposing exclusion accompanied by P. Exs. 1 - 6. Petitioner also submitted a letter dated March 19, 2001. I am making that letter P. Ex. 7. The I.G. did not object to Petitioner's exhibits. I admit into evidence I.G. Exs. 1- 6 and P. Exs. 1- 7. Neither party filed a reply brief. I decide the case based on the applicable law, the written record, and the exhibits.

II. Applicable Law

Under section 1128(b)(3) of the Act, the Secretary of DHHS may exclude any individual or entity that has been convicted of a criminal offense consisting of a misdemeanor relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance from participation in Medicare and Medicaid. Section 1128(c)(3)(D) of the Act provides that the exclusion imposed under section 1128(b)(3) of the Act shall be for three years unless the Secretary determines, according to published regulations, that a shorter period is appropriate because of mitigating circumstances or that a longer period is appropriate because of aggravating circumstances. Under the regulations, if certain enumerated mitigating factors are present, the exclusion may be shortened to less than the three-year period. 42 C.F.R. § 1001.401(c)(3). If certain enumerated aggravating factors are present, the exclusion may be extended beyond the three-year period. 42 C.F.R. § 1001.401(c)(2).

Petitioner plead guilty to one count of a misdemeanor criminal offense under Md. Ann. Code art. 27, § 300 ¶ (g-1)(2). Petitioner received probation before judgment under Md. Code Ann. art. 27, § 641. I take judicial notice of both statutory provisions.

III. Issues

A. Whether Petitioner was "convicted" of a criminal offense under section 1128(b)(3) of the Act.

B. Whether the length of Petitioner's exclusion is reasonable.

IV. Findings of Fact and Conclusions of Law

1. At all times relevant to this case, Petitioner was licensed to practice respiratory care therapy in the State of Maryland. I.G. Ex. 6 at 2.

2. At all times relevant to this case, Petitioner was employed as a respiratory therapist at the Memorial Hospital of Cumberland, which is located in Cumberland, Maryland. Id.

3. On or about March 17, 1999, a pharmacist in Cumberland, Maryland, notified the Allegany County Combined Criminal Investigation Narcotic Unit (C3I Narcotics Unit) that Petitioner had filled a prescription for 30 tablets of Endocet, a Schedule II CDS⁽¹⁾. Id.

4. The pharmacist had become suspicious as to whether the prescription was validly prescribed and contacted the physician who allegedly issued the prescription. The physician denied writing the prescription. Id.

5. During the investigation, Petitioner admitted that he had access to prescription pads at Memorial Hospital of Cumberland, his place of employment. Id. He further admitted that he had taken three blank prescription sheets, had forged three prescriptions (each for 30 tablets of Endocet), and had submitted all three prescriptions for dispensing at local pharmacies. Id. at 3.

6. The C3I Narcotics Unit confirmed that Petitioner had submitted three Endocet prescriptions at two different pharmacies in the Cumberland area on March 4, March 11, and March 17, 1999, respectively. Id.

7. On or about April 16, 1999, the Maryland State's attorney charged Petitioner with three counts of possession of a CDS violating Md. Code Ann. art. 27, § 287, and three counts of unlawfully obtaining a prescription drug by making and uttering a forged prescription violating Md. Code Ann. art. 27, § 300. I.G. Exs. 3, 6. Both offenses are misdemeanors. Id.

8. On June 15, 1999, Petitioner plead guilty in the District Court for Allegany County, Maryland, to one count of unlawfully obtaining a prescription drug by making and uttering a forged prescription. I.G. Exs. 4, 6. The State issued a nolle prosequi as to the five remaining outstanding counts. Id.

9. The Judge accepted Petitioner's plea of guilty and imposed a sentence of 90 days, incarceration (all suspended); two years of supervised probation; and a fine of $250. I.G. Exs. 5, 6.

10. On February 8, 2000, following a motion to modify or reduce the Court's sentence, the Judge modified Petitioner's sentence to probation before judgment. Petitioner was to remain on probation for two years. I.G. Ex. 6.

11. On April 27, 2000, as a result of Petitioner's guilty plea and conviction in the District Court for Allegany County, the Maryland State Board of Physician Quality Assurance (Board) issued a Consent Order reprimanding Petitioner; placing him on probation for not less than two years; and requiring him to submit to unannounced urinalyses conducted at the Board's discretion. Id.

12. The I.G. notified Petitioner of his three-year exclusion from participating in Medicare and Medicaid by letter dated October 31, 2000, pursuant to section 1128(b)(3) of the Act. I.G. Ex. 1.

13. To sustain its exclusion pursuant to section 1128(b)(3) of the Act, the I.G. must prove that Petitioner was convicted of a criminal offense consisting of a misdemeanor related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

14. The Judge's acceptance of Petitioner's guilty plea is a "conviction" within the meaning of section 1128(i)(3) of the Act.

15. The Judge's finding of "guilty" after accepting a guilty plea from Petitioner is a "conviction" within the meaning of section 1128(i)(2) of the Act.

16. The Judge's modification of Petitioner's sentence to probation before judgment is a "conviction" within the meaning of section 1128(i)(4) of the Act since it is a disposition involving a deferred adjudication or other arrangement where judgment of conviction has been withheld.

17. Petitioner's conviction of one count of unlawfully obtaining a prescription drug by making or uttering a forged prescription under Md. Code Ann art. 27, § 300 is a criminal offense consisting of a misdemeanor relating to the prescription of a controlled substance under section 1128(b)(3) of the Act.

18. The basis for Petitioner's conviction satisfies all the statutory requirements for a permissive exclusion from Medicare and Medicaid under section 1128(b)(3) of the Act. Findings 1-10.

19. The definition of the term "controlled substance" is the definition that applies to the law which forms the basis for the exclusion. 42 C.F.R. § 1001.401(b); Md. Ann. Code art 27, § 300 ¶ (g-1)(2).

V. Discussion

A. Petitioner was convicted of a criminal offense within the meaning of section 1128(i) of the Act

Petitioner argues that an adjudication of probation before judgment in Maryland is not considered a "conviction" under Maryland law. P. Br. at 3. Petitioner contends that his probation before judgment status does not provide legal justification for the I.G. to exclude him from Medicare and Medicaid. Petitioner also argues that the case relied upon by the I.G., Eulalia Marie Jones, L.P.N., DAB CR593 (1999), is not controlling since, unlike Ms. Jones, Petitioner was not convicted of distributing and possessing with intent to distribute a Schedule II controlled substance. Petitioner argues, in effect, that he did not manufacture, distribute, or possess with the intent to distribute a controlled substance.

The principal set out in Jones relates to the I.G.'s authority to exclude an individual based upon conviction of "a criminal offense consisting of a misdemeanor relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." Section 1128(b)(3) of the Act. In Jones, the individual was convicted of two of the four named subcategories described, namely distributing and possession with the intent to distribute a controlled substance. Upon a finding of guilty to any one of the subcategories of manufacture, distribution, prescription, or dispensing of a controlled substance, the I.G. may exclude a petitioner since the conjunction "or" suggests alternative, rather than combinations, of the subcategories. An individual convicted in a state court of unlawfully issuing a prescription for a controlled substance (one of the four subcategories) is analogous to Petitioner's conviction. See Louis Mathews, DAB CR452 (1997).

The first statutory requirement for the imposition of mandatory exclusion pursuant to section 1128(b)(3) of the Act is that the individual or entity in question is convicted of a criminal offense under federal or State law. I find that this requirement is met in Petitioner's case. The term "convicted" is defined in section 1128(i) of the Act. This section provides that under four alternative definitions of the term "convicted," an individual or entity will be deemed convicted of a criminal offense:

(1) when a judgment of conviction has been entered against the individual or entity by a federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a federal, State, or local court; or (emphasis added)

(4) when the individual or entity has entered into participation in first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

The disposition of an individual's criminal case needs to meet only one of the statutory definitions for that person to be deemed "convicted" within the meaning of section 1128(i) of the Act.

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(3) of the Act.

Petitioner contends that because the Court vacated its previous guilty verdict when it modified its disposition of Petitioner's case to probation before judgment, pursuant to Md. Code Ann. art. 27, § 641, that none of the definitions of "convicted" found in section 1128(i) of the Act may be applied to him. The I.G. contends that Petitioner was convicted within the meaning of section 1128(i)(3). I agree with the I.G.'s position.

In the present case, it is undisputed that Petitioner pled guilty to count one of the Statement of Charges. I.G. Ex. 4 at 1. In count one of the charging documents, Petitioner was charged with "obtain[ing] or attempting to obtain a prescription drug by fraud, deceit, misrepresentation or subterfuge." Md. Code Ann. art. 300, ¶ (g-1)(2). The Judge accepted Petitioner's plea within the meaning of section 1128(b)(3) and 1128(i)(3) of the Act. The Judge entered a check mark next to the letter "G" in the section labeled "Plea" and "Verdict." I.G. Ex. 4 at 1.

Petitioner's Plea of "Guilty" is also shown in the Consent Order signed by Petitioner. I.G. Ex. 6 at 3.

I conclude that Petitioner's plea of guilty to count one of the Statement of Facts and the Judge's acceptance of the plea represents a finding of guilt against Petitioner, within the meaning of section 1128(i)(3).

The only convictions that cannot serve as the basis for exclusion are those that have been reversed or vacated. Nothing in section 1128(i)(2) or (i)(3) states or suggests that judicial actions taken subsequent to acceptance of a guilty plea or a finding of guilt qualifies or limits the definition of "conviction." Douglas L. Reece, D.O., DAB CR305 (1994) .

However, even if I were to find that Petitioner had not been convicted within the meaning of sections 1128(i)(3), I would nevertheless find that Petitioner has been convicted within the meaning of sections 1128(i)(2) and 1128(i)(4) of the Act.

2. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(2) of the Act.

The Judge entered a check mark next to the letter "G" in the column designated as the "Verdict" indicating a "Guilty" verdict on the court's disposition summary to the charge of unlawfully obtaining a prescription drug by making and uttering a forged prescription. I.G. Ex. 4 at 1.

3. Petitioner was convicted of a criminal offense within the meaning of section 1128(i)(4) of the Act.

In the present case, the Judge's subsequent action in striking the guilty verdict he had entered against Petitioner did not amount to a finding that he was not found guilty of the offenses to which he had pled. By the terms of Md. Code Ann. art. 27, § 641, a plea of guilty or a finding of guilt is required before a court may place a person on probation before judgment. Thus, the Judge's original acceptance of Petitioner's guilty plea and his entering of a guilty verdict were not deprived of their force and effect as a "conviction" (within the meaning of sections 1128(i)(2) and 1128(i)(3) of the Act) by the Judge's subsequent action in striking the guilty verdict.

At a subsequent hearing, the Judge granted Petitioner's motion for a modification of sentence and imposed probation before judgment pursuant to Md. Code Ann. art. 27, § 641. See section IV at ¶ 19 above. The statutory provision permits a court to stay entering the judgment, defer further proceedings, and place the offender on probation, after a plea of guilty or finding of guilt. If the offender successfully completes probation, the court will dispose of the matter by discharging the offender from probation, without judgment of conviction (as defined under Maryland Law). This disposition falls squarely within the definition of conviction at section 1128(i)(4), which includes all dispositions involving deferred adjudications and arrangements where a judgment of conviction is withheld. Moreover, if there were any doubt that the language of section 1128(i)(4) encompasses the disposition of Petitioner's case pursuant to Md. Code Ann.art. 27, § 641, examination of the legislative history of section 1128(i) would remove all doubt that Congress intended to cover situations like the present case. The congressional committee charged with drafting the 1986 amendments to the Act stated:

[t]he principal criminal dispositions to which the exclusion remedy [currently] does not apply are the "first offender" or "deferred adjudication" dispositions. It is the Committee's understanding that States are increasingly opting to dispose of criminal cases through such programs, where judgment of conviction is withheld. The Committee is informed that State first offender or deferred adjudication programs typically consist of a procedure whereby an individual pleads guilty or nolo contendere to criminal charges, but the court withholds the actual entry of a judgment of conviction against them and instead imposes certain conditions of probation, such as community service or a given number of months of good behavior. If the individual successfully complies with these terms, the case is dismissed entirely without a judgment of conviction ever being entered.

These criminal dispositions may well represent rational criminal justice policy. The Committee is concerned, however, that individuals who have entered guilty or nolo [contendere] pleas to criminal charges of defrauding the Medicaid program are not subject to exclusion from either Medicare or Medicaid. These individuals have admitted that they engaged in criminal abuse against a Federal health program and, in the view of the Committee, they should be subject to exclusion. If the financial integrity of Medicare and Medicaid is to be protected, the programs must have the prerogative not to do business with those who have pleaded to charges of criminal abuse against them.

H.R. Rep. No. 727, 99th Cong., 2d Sess. 75 (1986), reprinted in 1986 U.S.C.C.A.N. 3607, 3665.

I find that disposition of Petitioner's criminal case pursuant to Md. Code Ann. art. 27, § 641, is a "conviction" under the definition of the first offender and deferred adjudication provisions mentioned in the committee report. Even if Petitioner is ultimately discharged by the Judge without a judgment of conviction under Maryland State law, Congress has made clear that it does not intend for Medicare and Medicaid to do business with him. Therefore, Petitioner was convicted within the meaning of section 1128(i)(4).

B. The length of Petitioner's exclusion is reasonable.

Petitioner argues that the period of exclusion determined by the I.G. was unreasonable. P. Br. at 3. Petitioner did not prove the existence of any mitigating factors allowed under the regulations. The I.G. has not alleged the existence of any aggravating factors. Consequently, the I.G.'s determination to exclude Petitioner for a three-year period is reasonable.

VI. Conclusion

I conclude that the I.G. had a basis to impose an exclusion against Petitioner from participating in Medicare and Medicaid pursuant to section 1128(b)(3) of the Act. I conclude that exclusion for three years was permitted by section 1128(c)(3)(D) of the Act. The three-year period of exclusion imposed and directed against Petitioner by the I.G. is reasonable.

Alfonso J. Montano

Administrative Law Judge

1. The term CDS means "Controlled Dangerous Substance" and is used here as being consistent with the terminology used in the exhibits relating to the Maryland criminal case. The term "controlled substance" used in the section 1128(b)(3) of the Act is less restrictive and includes Controlled Dangerous Substances. See also 42 C.F.R. § 1001.401(b).