SUBJECT:

Edward R. Bennedy, D.C.,

Petitioner,

The Inspector General

DECISION

This case is before me pursuant to a request for hearing filed on May 7, 2001 by Edward R. Bennedy, D.C. (Petitioner).

I. Background

By letter dated March 30, 2001, the Inspector General (I.G.) notified Petitioner that he was being excluded from participation in the Medicare, Medicaid, and all other federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a minimum period of 10 years. The I.G. informed Petitioner that his exclusion was imposed pursuant to section 1128(a)(4) of the Act, due to his conviction (as defined in section 1128(i) of the Act), in the Cortland County Court of the State of New York, of a criminal offense related to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance.

I conducted a telephone conference on July 12, 2001. The I.G. is represented in this case by the Office of Counsel. Although advised of his right to representation, Petitioner elected to appear on his own behalf. The parties agreed that the case could be decided based on written arguments and documentary evidence, and that an in-person evidentiary hearing was unnecessary. On September 13, 2001, the parties simultaneously submitted their respective initial briefs (P. Br.; I.G. Br.) and proposed exhibits. The I.G. filed six proposed exhibits. These have been identified as I.G. Exhibits (I.G. Exs.) 1-6. Petitioner filed eight proposed exhibits.⁽¹⁾ These have been identified as Petitioner Exhibits (P. Exs.) 1-8. On October 11, 2001, Petitioner submitted his response brief (P. Resp.) and offered three additional exhibits. These have been admitted as P. Exs. 9-11.⁽²⁾ The I.G. did not file a response brief. Neither party objected to the admission of the opposition's proposed exhibits. Therefore, I admit into evidence I.G. Exs. 1-6 and P. Exs. 1-11.

It is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in the Medicare, Medicaid, and all other federal health care programs, for a period of 10 years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. It is my finding that Petitioner was convicted of a criminal offense related to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance. Additionally, I find that his 10-year exclusion is not unreasonable.

II. Issues

• Whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all other health care programs;

and

• Whether the 10-year exclusion imposed by the I.G. is unreasonable.

III. Applicable Law and Regulations

Section 1128(a)(4) of the Act authorizes the Secretary of the U.S. Department of Health and Human Services (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act), any individual convicted under federal or State law, of a criminal offense relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance.

An exclusion under section 1128(a)(4) of the Act must be for a minimum period of five years. Act, section 1128(c)(3)(B). Aggravating factors can serve as a basis for lengthening the period of exclusion. 42 C.F.R. § 1001.102(b). If aggravating factors justify an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

Pursuant to 42 C.F.R. § 1001.2007, a person excluded under section 1128(a)(4) of the Act may file a request for hearing before an administrative law judge (ALJ).

IV. Findings and Discussion

The findings of fact and conclusions of law noted below in italics are followed by a discussion of each finding.

A. Petitioner's conviction of a criminal offense, related to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance justified his exclusion by the I.G. from participation in the Medicare, Medicaid and all other federal health care programs.

Petitioner was a licensed chiropractor in the State of New York. I.G. Ex. 5, at 15-16. On April 5, 1999, he was charged with one count of criminal sale of a controlled substance (cocaine) in the third degree as defined in New York Penal Law section 220.39(1). I.G. Ex. 3. On that same date, Petitioner entered a plea of guilty to the charge of criminal sale of a controlled substance. On May 24, 1999, Petitioner was sentenced to a five to 15-year term of imprisonment and ordered to pay restitution in the sum of $220.00. I.G. Exs. 4, 5.

It has been established, and Petitioner concedes, that he was convicted of a criminal offense related to unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Petitioner argues that the I.G. cannot, at this point in time, use the May, 1999 conviction as an additional basis for exclusion in light of the exclusion imposed on September 30, 1999. By letter dated September 30, 1999, the I.G. advised Petitioner of his exclusion from participation in federal and state health care programs based upon section 1128(b)(4) of the Act, which relates to Petitioner's surrender of his license to practice chiropractic medicine in the State of New York.⁽³⁾ P. Ex. 6. Thus, he posits that the current exclusion action undertaken by the I.G. in March 2001, runs counter to the principles of res judicata and collateral estoppel. P. Br., at 1-3; P. Resp., at 1-2. Petitioner further asserts that the I.G. should have included in the exclusion action, grounded on the revocation of his New York chiropractic license, all issues relative to the May, 1999 conviction. Having passed up that opportunity, Petitioner concludes, the I.G. is now foreclosed from bringing an independent action.

In advancing his novel theory, Petitioner overlooks the fact that the exclusion based on the revocation of his license has a life of its own, and is legally distinct from the exclusion based on his conviction for violation of the controlled substance statute. The former of these exclusions is required by section 1128(b)(4) of the Act, while the latter is mandated by section 1128(a)(4) of the Act. In a situation such as the case before me, the I.G.'s exercise of the Congressional authority can be carried out independently, and the exclusion actions undertaken by the I.G. pursuant to these two sections of the Act are not mutually exclusive. Moreover, the Congressional Act directs the I.G. to impose the exclusions noted above, without reference to the limitations suggested by Petitioner.

B. Petitioner's exclusion for a period of 10 years is not unreasonable.

On March 30, 2001, the I.G. notified Petitioner that he was being excluded from participation in the Medicare, Medicaid, and all federal health care programs for a minimum period of 10 years. I.G. Ex. 1. That action was taken pursuant to section 1128(a)(4) of the Act due to his conviction as defined in section 1128(i). An exclusion under section 1128(a)(4) of the Act must be for a minimum mandatory period of five years as set forth in section 1128(c)(3)(B) of the Act which states:

Subject to subparagraph (G), in the case of an exclusion under subsection (a), the minimum period of exclusion shall not be less than five years . . .

When the I.G. imposes an exclusion for the mandatory five-year period, the issue of the length of such exclusion is not considered. 42 C.F.R. § 1001.2007(a)(2). Aggravating factors which justify extending the exclusion period may be taken into account, but the five-year term will not be shortened. Petitioner admits that he was convicted of a criminal offense related to the manufacturing, distribution, prescription or dispensing of a controlled substance, and that the I.G. was required to exclude him, pursuant to section 1128(a)(4) of the Act for at least five years. Consequently, the only issue in controversy is whether the 10-year exclusion period imposed against Petitioner is unreasonable.

The I.G. has discretion to impose an exclusion of more than five years in appropriate circumstances. In Petitioner's case, the I.G. added five years to the statutory five-year minimum.

1. The I.G. has proven the existence of aggravating factors.

The aggravating factors that the I.G. may consider in lengthening a period of exclusion are found at 42 C.F.R. § 1001.102(b). In the instant case, the I.G. contends that a basis exists for enlarging the period of exclusion in view of these three factors:

• The sentence imposed by the court included incarceration (42 C.F.R. § 1001.102(b)(5));



• Petitioner has a prior criminal record (42 C.F.R. § 1001.102(b)(6)); and



• Petitioner has been the subject of an adverse action by a State agency or board (42 C.F.R. § 1001.102(b)(9)).

With regard to the first factor, 42 C.F.R. § 1001.102(b)(5) provides for enlarging the period of exclusion if "the sentence imposed by the court included incarceration." On May 24, 1999, subsequent to the entry of a guilty plea, Petitioner was sentenced to 5-15 years at the New York State Correctional Facility in Elmira, N.Y. I.G. Exs. 4, 5 at 23.

Further evidence proves that Petitioner has a prior criminal record. According to the sentencing transcript, Petitioner was convicted of criminal sale of a controlled substance in the third degree in 1978, and in 1990 he was convicted of a criminal possession of a controlled substance in the seventh degree. I.G. Ex. 5, at 15.

Finally, since October 20, 1999, Petitioner has been excluded under section 1128(b)(4) of the Act as a result of having surrendered his license to practice chiropractic medicine in the State of New York. I.G. Exs. 1, 5 at 16, and 6.

Petitioner contends that the I.G. cannot use the June 15, 1999 revocation of his New York license as an aggravating factor to increase the exclusion under section 1128(a)(4) because that action occurred after his conviction in May, 1999. As such, he argues, it cannot be considered as a prior sanction. Petitioner relies on the decision in Chris Mark Spierer, DAB CR360 (1995), to support his supposition. P. Br., at 14-15. Petitioner's reliance on the Spierer decision is misplaced because the issue in that case concerned the lengthening of the exclusion period pursuant to 42 C.F.R. § 1001.102(b)(6). In Petitioner's case, the I.G. used the license revocation action as a factor for extending the five-year mandatory exclusion pursuant to 42 C.F.R. § 1001.102(b)(9). This subsection does not refer to "prior criminal, civil, or administrative sanction record." The requirement under 42 C.F.R 1001.102(b)(9) is that the adverse action which serves as a basis for lengthening the exclusion period be "based on the same set of circumstances that serves as the basis for imposition of the exclusion." It cannot be disputed that the revocation of Petitioner's New York chiropractic license was based on the same set of circumstances that led to his controlled substance conviction.⁽⁴⁾

Petitioner also argues that the I.G. cannot use his prior convictions for sale and possession of illicit drugs as an aggravating factor because these circumstances are not based on the same set of circumstances as the more recent conviction as required by 42 C.F.R. § 1001.102(b)(9). P. Br., at 17. Petitioner shows confusion as to the subsection of the regulation upon which the I.G. relies. The I.G. used Petitioner's prior drug convictions to lengthen the exclusion period pursuant to 42 C.F.R. § 1002.102(b)(6) and not the subsection he cites. The portion of the regulation relied on by the I.G. only requires that the excluded individual have a prior criminal record. There is no need for the convictions to be based on the same set of circumstances as the conviction that serves as the basis for the exclusion.

2. Petitioner has failed to demonstrate the existence of any mitigating factors.

Petitioner further suggests that the following three mitigating circumstances, found at 42 C.F.R. § 1001.102(c), are applicable in this case:

• He was convicted of three or fewer misdemeanors, and the entire amount of loss to Medicare and State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1,500 (42 C.F.R. §1001.102(c)(1));
• The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense (42 C.F.R. § 1001.102(c)(2)); and



• The individual's or entity's cooperation with Federal or State officials resulted in --

  - Others being convicted or excluded from Medicare, Medicaid, and all other federal health care programs,
  

  - Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or
  

  - The imposition against anyone of a civil money penalty or assessment. (42 C.F.R. § 1001.102(c)(3))
  

In this case, the exclusion is based on criminal sale of a controlled substance and not on a financial loss to a government program. Therefore, the fact that the offense committed by Petitioner did not represent a loss to state or federal health care programs does nothing to diminish the impact of the aggravating factors. Additionally, Petitioner was not "convicted of three or fewer misdemeanors," but rather a third degree drug felony.

I find specious Petitioner's argument that a mitigating factor exists because he sold cocaine to finance his addiction. A review of the sentencing transcript fails to show that the court made a determination that Petitioner had a mental, emotional or physical condition before or during the commission of the offense that reduced his culpability. Such a finding by the court is crucial. It does not suffice that the court concluded that Petitioner was addicted to drugs.

Petitioner's claim that he attempted many times to cooperate with the District Attorney and the police in the apprehension of other larger drug suppliers and was willing to testify in any cases, is baseless, and has no support in the record.

Obviously, Petitioner's conduct is the type that Congress sought to deter for the protection of the beneficiaries of the Federal and State health care programs. It follows that, since Petitioner poses a risk to the welfare of Medicare and Medicaid recipients, his untrustworthiness makes him unfit to participate in any of these programs.

I must determine whether the length of exclusion is unreasonable based on the facts as found by me. In order to make that determination, I must consider whether the length of the exclusion imposed by the IG is within a reasonable range. Thus, to determine if the IG's length of exclusion is unreasonable, I must consider the parties' evidence as it pertains to the aggravating and mitigating factors delineated at 42 C.F.R. § 1001.102 and, based upon my findings, if the IG's decision is within a reasonable range.

For the reasons previously stated above and in light of my consideration of the regulatory criteria, I find that the 10-year exclusion imposed by the I.G. is within a reasonable range of possible exclusion periods given the circumstances of this case, in which three aggravating factors were present and no mitigating factors. I find that the five-year additional exclusion imposed by the I.G. is not excessive. The 10-year exclusion is a legitimate remedial remedy, and not punitive⁽⁵⁾ as claimed by Petitioner, which is consistent with the purpose of section 1128 of the Act. P. Br., at 11. In essence, the purpose of section 1128 of the Act is to protect federally-funded health care programs and their beneficiaries and recipients from untrustworthy individuals.

V. Conclusion

Sections 1128(a)(4) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because of his criminal conviction for an offense related to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance. The I.G. was also justified in lengthening the period of exclusion due to the existence of aggravating factors. The 10-year exclusion is therefore sustained.

José A. Anglada

Administrative Law Judge

1. Petitioner inadvertently misnumbered his proposed exhibits. In actuality, only seven proposed exhibits were submitted with his initial brief. For the sake of clarity, I will refer to each exhibit by the number assigned to the documents by Petitioner.

2. Petitioner had identified the documents he filed with his response brief as Exhibit A, pp.1-3. I have re-labeled them as Petitioner's Exhibits 9-11 in conformity with Civil Remedies Division procedures.

3. Petitioner's license was, in reality, revoked by the I.G. on October 20, 1999, pursuant to section 1128(b)(4) of the Act, after he filed an application to surrender his license to the State of New York in March, 1999. See P. Ex. 3.

4. I have decided elsewhere that the Spierer decision does not stand for the proposition that aggravating factors pursuant to 42 C.F.R. § 1001.102(b)(6) may only be present if they predate the commission of acts that eventually lead to a conviction. Cheryl Elizabeth Richardson, M.D., DAB CR682 (2000).

5. Petitioner requests that I alter the effective date of the 10-year exclusion to begin on September 30, 1999, contending that it would be punitive to commence the period of exclusion on April 19, 1999. P. Br., at 9. I do not have the authority to change the effective date of an exclusion imposed by the I.G. acting within the scope of discretion delegated by statute. Christino Enriquez, M.D., DAB CR119 (1991).