SUBJECT:

Thomas P. Floyd, D.O.,

Petitioner,

The Inspector General

DECISION

It is my decision to sustain the determination of the Inspector General (I.G.) to exclude Thomas P. Floyd, D.O. (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 relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Additionally, I find that his 10-year exclusion is not unreasonable.

I. Background

This case is before me pursuant to a request for hearing filed by Petitioner on November 21, 2001.

By letter dated September 28, 2001, the 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 (42 United States Code (U.S.C.) § 1320a-7(a)). The exclusion imposed was due to Petitioner's conviction, as defined in section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), in the State of Michigan, 8^th Judicial District Court, of a criminal offense which occurred after August 21, 1996, and constituted a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

I conducted a prehearing telephone conference on February 11, 2002. The I.G. is represented in this case by the Office of Counsel. Petitioner is represented by counsel. During the conference, Petitioner admitted that the I.G. had a basis to exclude him, in that Petitioner admitted that he had been convicted of a criminal offense under section 1128(a)(4) of the Act. February 12, 2002 Order and Schedule for Filing Briefs and Documentary Evidence at 1. 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. Neither party has since requested that I hear in-person testimony, and I find no material facts in dispute which preclude me from deciding this case on the record.

The parties timely submitted their briefs and documentary evidence. The I.G. filed an initial brief (I.G. Br.) and seven proposed exhibits (I.G. Exs. 1 - 7). Petitioner filed a response brief (P. Br.) and six proposed exhibits, identified as attachments 1 - 6. I am re-marking Petitioner's attachments as Petitioner's exhibits (P. Exs.) 1 - 6. The I.G. filed a reply brief. Petitioner was offered the opportunity to request to file a sur-reply, but did not do so. I closed the record in this case five days after the date Petitioner could have submitted its request to file a sur-reply (to allow for receipt by mail), May 21, 2002. The parties did not object to each other's exhibits. Therefore, I admit into evidence I.G. Exs. 1 - 7 and P. Exs. 1 - 6.

II. Issues

• Whether the length of the exclusion imposed and directed against Petitioner is unreasonable?

• Whether the effective date of the exclusion can be changed from 20 days after September 28, 2001, to May 24, 2000? ⁽¹⁾

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 of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

An exclusion under section 1128(a) 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. The Parties' Arguments

A. The I.G.'s Arguments

The I.G. argues that Petitioner was convicted of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Therefore, Petitioner is subject to the mandatory minimum period of exclusion, that is, five years.

The I.G. also asserts that, due to the following aggravating factors, and the absence of mitigating factors, Petitioner's period of exclusion was reasonably lengthened to 10 years:

• The sentence imposed by the court included incarceration; and

• Petitioner was the subject of an adverse action by a State board.

42 C.F.R. §§ 1001.102(b)(5) and (9).

B. Petitioner's Arguments

As stated above, Petitioner does not dispute the basis for his exclusion and recognizes that he is subject to a five-year exclusion. Petitioner's hearing request at 2; Order and Schedule for Filing Briefs and Documentary Evidence at 1; P. Br. at 1, 2, 5. Instead, Petitioner disputes both the effective date of his exclusion and the length of his exclusion, which he asserts is unreasonable.

In his hearing request, Petitioner asserts specifically that:

• The sentence imposed by the court in his case was only 90 days, not six months, as the court suspended the second 90-day period of jail time.

• The Michigan Board of Osteopathic Medicine and Surgery's (Michigan Board) suspension of Petitioner's medical license was entered on December 7, 2000, but his license was reinstated on June 19, 2001, subject to certain terms and conditions.

• Petitioner's criminal misconduct was a direct result of the disease of chemical dependency, for which he is in treatment. Petitioner has not practiced medicine since December 6, 1999, when he entered long-term treatment. The events which led to his conviction pre-date this treatment.

• Both the Michigan Board suspension and the court's sentence are appropriately weighted sanctions under the circumstances. The I.G.'s exclusion, doubling the five-year minimum mandatory exclusion to 10 years, based on a 64-day jail sentence and a temporary suspension of Petitioner's license, is unreasonable.

• The 10-year exclusion is unreasonable because it is not based on Petitioner's misconduct, but on the independent sanctions of other authorities, both of which have now been served or modified.

In his brief, Petitioner asserts that:

• Petitioner's exclusion should begin on May 24, 2000. Fundamental fairness requires that the 16-month delay in imposing the exclusion be recognized and considered in mitigation of the length of the exclusion.

• Petitioner's mental and physical condition before and during the commission of his offense should be considered as a mitigating factor under 42 C.F.R. § 1001.102(c). Petitioner's problems originated from his disease of chemical dependency and his misconduct was a direct result of this disease, for which he has sought treatment and is in sustained recovery.

• The Michigan Board granted reinstatement of Petitioner's license, with limitations, to allow Petitioner to begin a residency program to achieve board certification. However, Petitioner could not continue with the residency due to his pending exclusion from the Medicare and Medicaid programs.

• Petitioner's exclusion is inconsistent with the legislative purpose of protecting federally-funded health care programs, because Petitioner never harmed a federal program and the Michigan Board has found that Petitioner does not pose a risk to the public and has reinstated his license.

V. Findings and Discussion

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

1. Petitioner's 10-year exclusion is not unreasonable, as it falls within a reasonable range of possible exclusions.

An exclusion under section 1128(a)(4) of the Act must be for a mandatory minimum 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 felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Specifically, Petitioner pled nolo contendere to "on or about 10/20 & 11/20/99 ATTEMPTED CONTROLLED SUBSTANCE-DELIVERY/MANUFACTURE (SCHEDULES 1, 2 AND 3 EXCEPT MARIHUANA AND COCAINE." I.G. Ex. 4. 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. Appellate panels of the Departmental Appeals Board (Board) have previously pointed out that the preamble to the regulations at 42 C.F.R. Part 1001, "indicates that the regulation contemplates broad discretion for the I.G. in setting the length of an exclusion in a particular case, in light of the I.G.'s 'vast experience in implementing exclusions under these authorities'. . . ." Gerald A. Snider, M.D., DAB No. 1637, at 6 (1997). And, the Board has also held that as long as the length of exclusion in within a reasonable range, neither an administrative law judge nor the Board has the authority to alter it. Id. My inquiry is limited to whether the I.G.'s determined length of exclusion is within a reasonable range.

The Secretary has published regulations which establish the criteria for determining the length of exclusions imposed pursuant to section 1128 of the Act. The regulation which sets forth the applicable criteria for an exclusion imposed pursuant to section 1128(a) is 42 C.F.R. § 1001.102. The applicable criteria are expressed as either aggravating or mitigating factors. The relevant aggravating factors are stated at 42 C.F.R. § 1001.102(b). The relevant mitigating factors are stated at 42 C.F.R. § 1001.102(c). An exclusion may be imposed for a period of more than five years where there exists an aggravating factor or factors not offset by any mitigating factor or factors.

The aggravating and mitigating factors that are set forth in the regulations function as rules of evidence for deciding the length of exclusions. Evidence which does not pertain to one of the specific aggravating or mitigating factors is not relevant and may not be used to decide whether an exclusion of a particular length is reasonable.

The regulations do not prescribe the weight that is to be given to evidence that relates to an aggravating or a mitigating factor. While the regulation tells the decision maker what criteria may be used to determine the length of an exclusion, it does not tell the decision maker how to weigh relevant evidence to arrive at an exclusion that is reasonable in a given case.

However, there is an overall statutory purpose to which the regulations must adhere. An exclusion is not intended to be punishment. The purpose of any exclusion that is imposed under section 1128 of the Act is to protect federally-funded health care programs and beneficiaries and recipients of those programs from an individual who has been shown not to be trustworthy. Therefore, in deciding the length of an exclusion that is imposed pursuant to section 1128 of the Act, the question that must be considered is: what is reasonably necessary to protect the programs and their beneficiaries and recipients from an untrustworthy individual? In a case involving an exclusion that is imposed pursuant to section 1128(a)(4), the factors that are contained in 42 C.F.R. § 1001.102(b) and (c) state the criteria which may be used to answer this question.

A. 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 two factors:

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

• Petitioner was the subject of an adverse action by a State 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 June 23, 2000, subsequent to entering a plea of nolo contendere, a judge of the State of Michigan, 8^th Judicial District Court, sentenced Petitioner to six months in prison. I.G. Ex. 4. While I note Petitioner's argument that Petitioner actually served only 65 days of his sentence (P. Br. at 1), Petitioner's sentence did include a period of incarceration. Therefore, I find the I.G. has proven this aggravating factor.

With regard to the second factor, 42 C.F.R. § 1001.102(b)(9) provides for enlarging the period of exclusion if ". . . the individual . . . has been the subject of any other adverse action by any . . . State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion." In this case, on December 7, 2000 (following an order of summary suspension on January 3, 2000 (I.G. Ex. 6)), the Michigan Board suspended Petitioner's license to practice osteopathic medicine based in part on the same misconduct for which he was convicted. I.G. Ex. 5, at 10; I.G. Ex. 7. Petitioner argues that his license has now been reinstated (by a Final Order Granting Reinstatement dated June 19, 2001), although his license reinstatement is an educational limited license for a period of two years subject to reclassification as an unlimited license following a two-year period of probation. I.G. Ex. 2. However, it is undisputed that Petitioner's license was, in fact, suspended. Therefore, I find that the I.G. has proven this aggravating factor.

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

Petitioner has asserted a mitigating factor under 42 C.F.R. § 1001.102(c)(2), arguing that his disease of chemical dependence was a cause of the conduct which led to his criminal conviction, reducing Petitioner's culpability for the offense. However, the regulation limits application of this mitigating factor to situations where "[t]he 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 that reduced the individual's culpability . . . " The record in this proceeding, including Petitioner's sentencing documents, is devoid of a determination by the court that Petitioner's disease of chemical dependency was a cause of the conduct leading to his conviction. Such evidence is necessary because neither the fact that Petitioner went into a rehabilitation program, nor that he has tested as clean and sober thus far, directly addresses whether his mental, emotional, or physical condition was so debilitated by drug dependency as to reduce his culpability for the crime he committed. Thus, Petitioner has failed to demonstrate the existence of this mitigating factor.

None of Petitioner's other arguments is related to any mitigating factor I am allowed to consider under the regulations. See 42 C.F.R. § § 1001.102(c)(1) and (3).

C. Petitioner's 10-year exclusion is within a reasonable range of possible exclusions.

Obviously, Petitioner's conduct, justifying exclusion under section 1128(a)(4) of the Act, is the type that Congress sought to deter for the protection of the beneficiaries of the federal and State health care programs. Since Petitioner's conduct thus poses a risk to the welfare of Medicare beneficiaries and Medicaid recipients, Congress has deemed him by statute to be untrustworthy to participate in the programs for at least five years.

However, a question remains as to whether the 10-year exclusion directed and imposed against Petitioner is unreasonable. To make this determination, I must decide 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 I.G. is within a reasonable range. To determine if the I.G.'s length of exclusion is within a reasonable range, I must consider the parties' evidence as it pertains to the aggravating and mitigating factors delineated at 42 C.F.R. § 1001.102.

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 two aggravating and no mitigating factors are present. I find that the five-year additional exclusion imposed by the I.G. is not excessive. The ten-year exclusion is a legitimate remedial remedy, which is consistent with the purpose of section 1128 of the Act. 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.

2. I am without authority to change the effective date of Petitioner's exclusion.

In his brief, Petitioner asked that the effective date of his exclusion be changed to coincide with the date of his conviction, making an equitable argument that the delay in the exclusion from the date of his conviction is unfair. The regulations require the I.G. to set the effective date for a petitioner's exclusion at 20 days from the date of the notice of exclusion letter. 42 C.F.R. § 1001.2002(b). The Board has noted that "equitable arguments based on the I.G.'s delay in imposing an exclusion after the conviction on which it is based are irrelevant, where the period of the exclusion and the effective starting date are mandated." Tanya A. Chuoke, DAB No. 1721, at 14 (2000). Further, the regulations governing this case do not give me the authority or the discretion to alter the effective date of an exclusion period imposed by the I.G. See Samuel W. Chang, M.D., DAB No. 1198 (1990).

VI. 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 a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, which occurred after August 21, 1996. 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.

Anne E. Blair

Administrative Law Judge

1. In Petitioner's hearing request, Petitioner argues that the effective date of his exclusion should be December 6, 1999, the date he stopped practicing medicine and entered long-term care treatment for his illness of chemical dependency. Petitioner's hearing request at 2. However, Petitioner amended this argument in his brief and requests an effective date for his exclusion of May 24, 2000, the date of his criminal conviction. P. Br. at 2.