SUBJECT:

Mark L. Beck, D.D.S.,

Petitioner,

The Inspector General.

DECISION

Mark L. Beck, D.D.S., is excluded from participation in Medicare, Medicaid, and all other federal health care programs, pursuant to section 1128(a)(3) of the Social Security Act (the Act) (42 U.S.C. § 1320a-7(a)(3)), effective March 18, 2004, based upon his conviction of a criminal offense related to fraud in connection with the delivery of a health care item or service, as discussed more fully hereafter. There is a proper basis for exclusion. Petitioner's exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). Further, extension of the minimum period of exclusion by five years, for a total period of ten years, is not unreasonable, given the presence of four aggravating factors and no mitigating factor.

I. PROCEDURAL HISTORY

The Inspector General (I.G.) notified Petitioner by letter dated February 27, 2004, that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of ten years. The I.G. advised Petitioner that he was being excluded pursuant to section 1128(a)(3) of the Act for his conviction of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or any act or omission in a health care program operated or financed, in whole or part, by a governmental agency.

Petitioner requested a hearing in an undated letter which was received by my office on April 23, 2004. The case was assigned to me for hearing and decision on May 5, 2004. On June 15, 2004, I convened a telephone prehearing conference, the substance of which is memorialized in my order of June 24, 2004. The parties agreed to the submission of this case on the written record without the need for an oral hearing. On July 30, 2004, the I.G. filed a motion for summary affirmance with supporting brief (I.G. Brief) and I.G. exhibits (I.G. Exs.) 1 through 5. Petitioner filed a response on September 15, 2004 (P. Brief), with three attachments that I treat as Petitioner's exhibits (P. Exs.) 1 through 3. On September 27, 2004, Petitioner filed a supplementary exhibit that I treat as P. Ex. 4. The I.G. filed a reply brief on September 30, 2004 (I.G. Reply) with I.G. Ex. 6. Neither party objected to the exhibits offered by the opponent and all exhibits are received as evidence.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. FINDINGS OF FACT

The following findings of fact are based upon the uncontested and undisputed assertions of fact in the pleadings and the exhibits admitted.

1. On February 19, 2002, in the United States District Court for the District of Columbia, Petitioner pled guilty to one count of health care fraud and one count of practicing medicine without a license and the court adjudged him guilty of those offenses. I.G. Ex. 4, at 1.

2. The offense of health care fraud, as charged in count one of the indictment, and to which Petitioner pled guilty, occurred on or about January 18, 2000, and involved Petitioner claiming reimbursement from Blue Cross and Blue Shield of the National Capital Area for providing dental services at a time when his license to practice dentistry was suspended. I.G. Ex. 5, at 1-6.

3. The offense of health care fraud, as charged in count one of the indictment, is a felony under federal law. 18 U.S.C. §§ 1, 1347.

4. Petitioner was sentenced to 16 months imprisonment for the health care fraud count and was ordered to pay restitution in the amount of $65,501.48. I.G. Ex. 4, at 2, 5.

5. The I.G. notified Petitioner by letter dated February 27, 2004, that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of ten years, pursuant to section 1128(a)(3) of the Act, for his conviction of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service or any act or omission in a health care program operated or financed, in whole or part, by a governmental agency.

6. Petitioner requested a hearing by letter received on April 23, 2004.

B. CONCLUSIONS OF LAW

1. Petitioner's request for hearing was timely and I have jurisdiction.

2. Petitioner was convicted, in federal district court, of a felony criminal offense that occurred after August 21, 1996, that involved fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program operated or financed by a government entity.

3. Petitioner's exclusion is mandated by section 1128(a)(3) of the Act.

4. The mandatory minimum period of exclusion under section 1128(c)(3)(B) of the Act is five years.

5. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(1).

6. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(5).

7. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(6).

8. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(9).

9. No mitigating factors have been proven.

10. It is not unreasonable to extend Petitioner's period of exclusion by five years for a total period of exclusion of ten years.

11. The period of exclusion begins to run on March 18, 2004, the twentieth day after the February 27, 2004 I.G. notice of exclusion. 42 C.F.R. § 1001.2002.

III. ANALYSIS

A. ISSUES

The Secretary of the Department of Health and Human Services (Secretary) has by regulation limited my scope of review to two issues:

Whether there is a basis for the imposition of the exclusion; and,

Whether the length of the exclusion is unreasonable.

42 C.F.R. § 1001.2007(a)(1). The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c) and (d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b) and (c).

B. LAW APPLICABLE

Petitioner's right to a hearing by an administrative law judge (ALJ), and judicial review of the final action of the Secretary, is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Petitioner's request for a hearing was timely filed and I do have jurisdiction.

Pursuant to section 1128(a)(3) of the Act, the Secretary must exclude from participation in Medicare, Medicaid, and all federal health care programs, any individual or entity that has been convicted of a felony offense of fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, related to the delivery of a health care item or service or with respect to any act or omission in a health care program, operated by or financed in whole or part by any governmental agency. Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R. § 1001.102(b), the period of exclusion may be extended based on the presence of specified aggravating factors. Only if the aggravating factors justify an exclusion of longer than five years may mitigating factors be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

C. DISCUSSION

Petitioner's right to a hearing by an ALJ and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Pursuant to section 1128(f) of the Act, an individual or entity subject to exclusion is entitled to notice and hearing to the same extent as provided by section 205(b) of the Act. An oral hearing is contemplated. See section 205(b) of the Act; 42 C.F.R. §§ 1005.2(a), 1005.3(a), 1005.4(a) and (b), 1005.9, 1005.15, and 1005.16. However, an oral hearing is not required where the parties agree to submit the case for my decision on a stipulated record or where both parties waive appearance at an oral hearing and submit the case on documentary evidence and written argument. 42 C.F.R. § 1005.6(b)(4) and (5). The parties agreed during the prehearing conference that no oral hearing is necessary in this case and that it can be decided on the documentary evidence and briefs of the parties.

a. There is a basis for the I.G.'s exclusion of Petitioner.

Petitioner was convicted, pursuant to his guilty plea, in the United States District Court for the District of Columbia, of one count of health care fraud and one count of practicing medicine without a license. I.G. Ex. 4, at 1. The conduct underlying Petitioner's conviction for health care fraud, as alleged in count one of the indictment, and to which Petitioner pled guilty, occurred on or about January 18, 2000. Petitioner claimed reimbursement from a health care insurer for providing dental services at a time when his license to practice dentistry was suspended. I.G. Ex. 5, at 1-6.

Petitioner does not dispute that he was convicted within the meaning of the Act. Petitioner also does not dispute that, due to his conviction, he is subject to mandatory exclusion from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3). P. Brief at 6. Accordingly, I find that there is a basis for Petitioner's mandatory exclusion.

b. Exclusion for a minimum period of five years is mandated by the Act and extension of the period of exclusion by five years is not unreasonable in this case.

1. The aggravating factors

Petitioner concedes that the minimum period of exclusion is five years pursuant to section 1128(c)(3)(B) of the Act. The period may be extended if there are aggravating factors. Petitioner concedes that the following four aggravating factors are present in his case. P. Br. at 6.

�Petitioner's criminal acts resulted in financial loss to private insurers in excess of $5,000, which is consistent with Petitioner being sentenced to pay $65,501.48 in restitution. 42 C.F.R. § 1001.102(b)(1).

�Petitioner was sentenced to 16 months incarceration based upon the fraud conviction. 42 C.F.R. § 1001.102(b)(5).

�Petitioner had a prior civil, criminal, or administrative sanction record. Petitioner had been convicted of cocaine possession in 1996. In addition, the District of Columbia Board of Dentistry suspended his license to practice dentistry for failing to comply with a consent order requiring him to enroll in a drug treatment program and submit monthly urine screens to the Board. 42 C.F.R. § 1001.102(b)(6).

�Petitioner was convicted of another criminal offense arising out of the same circumstances as the conviction giving rise to his exclusion. 42 C.F.R. § 1001.102(b)(9).

2. The mitigating factors

Section 1001.102(c) of 42 C.F.R. provides that if any of the aggravating factors justify a period of exclusion longer than five years, then mitigating factors may be considered as a basis for reducing the period of the exclusion to no less than five years. The following factors may be considered as mitigating and a basis for reducing the period of exclusion:

(1) the individual or entity being excluded was convicted of three or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and/or the state health care programs due to the criminal acts is less than $1500;

(2) the record of the criminal proceedings shows that the court determined that the individual to be excluded had a mental, emotional, or physical condition before or during the commission of the offense that reduced his or her culpability; or

(3) the individual or entity to be excluded cooperated with Federal or State officials with the result that:

(i) others were convicted or excluded from Medicare, Medicaid, or other federal health care programs,

(ii) additional cases were investigated or reports issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) a civil money penalty or assessment was imposed under part 1003 of this chapter.

Evidence which does not relate to an aggravating factor or a mitigating factor is irrelevant to determining the length of an exclusion. The burden is upon Petitioner to show the presence of mitigating factors. 42 C.F.R. § 1005.15; Darren James, D.P.M., DAB No. 1828, at 4 (2002).

Petitioner argues that the mitigating factor described at 42 C.F.R. § 1001.102(c)(2) is present in this case and should be considered in assessing the reasonableness of the period of exclusion. An examination of the language of 42 C.F.R. § 1001.102(c)(2) reveals that three elements must be present in the sentencing record to invoke the mitigating factor: 1) a finding that the individual suffered from a mental, emotional, or physical condition; 2) a finding that the individual suffered from the condition before or during the commission of the offenses; and 3) a finding that the condition reduced the individual's culpability. See Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 (2002); Paul G. Klein, D.P.M., DAB CR317 (1994). In Arthur C. Haspel, D.P.M., DAB No. 1929 (2004), an appellate panel clarified that the regulation does not require that the sentencing court make explicit findings as to these elements, but that "it is sufficient to review the sentencing record as a whole and determine whether it would be reasonable to infer from the entire record that the presiding judge had made the determinations required by the regulation as part of the sentencing process." Haspel, DAB No. 1929, at 4.

In the present case, I cannot infer from the sentencing record that the judge who sentenced Petitioner made the required findings. In contrast to the Haspel case, in which the evidence before the ALJ included a transcript of the sentencing hearing, the only evidence in the present record that reflects the court's findings on sentencing Petitioner consists of the judgment of conviction itself. See I.G. Ex. 4. Petitioner points to the fact that the court included, as a special condition of Petitioner's probation, that he be required to participate in a program of drug testing and treatment, which could include in-patient treatment. P. Br. at 11; see I.G. Ex. 4, at 3. According to Petitioner, the imposition of this condition shows that the court made a finding that he suffered from drug addiction. Petitioner also offered, as P. Ex. 4, a copy of his treatment record from Talbott Recovery Campus, where he underwent inpatient treatment for chemical dependency. I conclude that the evidence offered by Petitioner is sufficient to prove that the court, in imposing the special condition of probation, found that Petitioner suffered from drug addiction, a mental, emotional, or physical condition contemplated by the regulation. That finding alone, however, is insufficient to support a finding that the mitigating factor is present.

The court must also have concluded that the addiction was present before or during the commission of the offenses, and that the addiction reduced Petitioner's culpability, in order for the mitigating factor to apply. Moreover, the regulation is clear that evidence supporting such findings must be found in the record of the criminal case. The Haspel decision likewise emphasizes that any inferences drawn regarding the mitigating factor must be based on "the sentencing record as a whole." In the present case, the judgment of conviction is silent as to the nexus in time between Petitioner's addiction and the conduct that led to his conviction. Nor is there a finding by the court that the addictive condition reduced Petitioner's culpability for the offense of which he was convicted.

In his brief, Petitioner argues that his failure to abstain from drug use, as required by the consent order placing his dentistry license on probation, as well as carrying on "business as usual" in spite of the revocation of his license, demonstrates that his judgment was clouded and that he was in denial. P. Br. at 9. It is possible to draw such a conclusion from Petitioner's behavior. Nevertheless, there is no indication in the record of Petitioner's criminal case that the presiding judge drew such a conclusion. Petitioner argues further that I should infer that the presiding judge determined that his addiction reduced his culpability because he was sentenced to 16 months incarceration rather than 10 years, which is the maximum sentence under the statute. P. Br. at 11. As the I.G. correctly points out, however, under federal sentencing guidelines, the range of incarceration applicable to Petitioner's conviction was 10 to 16 months. See I.G. Reply at 6-7; I.G. Ex. 4, at 6; I.G. Ex. 6, at 8. Therefore, rather than granting Petitioner a reduced sentence, the judge sentenced him to serve the maximum term under the relevant guideline. Accordingly, the record does not support an inference that the sentencing judge determined that Petitioner's addiction reduced his culpability for the crime of which he was convicted. For all these reasons, I conclude that Petitioner has failed to prove, by a preponderance of the evidence, the existence of the mitigating factor recognized by 42 C.F.R. § 1001.102(c)(2).

3. Reasonable period of exclusion

The Departmental Appeals Board (DAB) has made clear that the role of the ALJ in cases such as this is to conduct a "de novo" review as to the facts related to the basis for the exclusion and the facts related to the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102. See Joann Fletcher Cash, DAB No. 1725 (www.hhs.gov/dab/decisions/dab1725.html) (2000), n.6 (n.9 in the original decision and West Law�), and cases cited therein. The regulation specifies that I must determine whether the length of exclusion imposed is "unreasonable" (42 C.F.R. § 1001.2007(a)(1)). The DAB has explained that in determining whether a period of exclusion is "unreasonable," I am to consider whether such period falls "within a reasonable range." Cash, DAB No. 1725, n.6. The DAB cautions that, whether I think the period of exclusion too long or too short is not the issue. I am not to substitute my judgment for that of the I.G. and may only change the period of exclusion in limited circumstances. In John (Juan) Urquijo, DAB No. 1735 (2000), the DAB made clear that if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), an appellate panel of the DAB suggests that, when it is found that an aggravating factor considered by the I.G. is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate. The Katz panel did not elaborate upon the weight to be given individual aggravating factors, or how my de novo review and assessment of the weight to be given to proven aggravating factors is related to the weight the I.G. assigned those same factors.

Pursuant to the Act and the regulations, where there is a basis for a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion for a minimum period of five years. Act, section 1128(c)(3)(B); 42 C.F.R. § 1001.102(a). Pursuant to 42 C.F.R. § 1001.102(d) one prior conviction for conduct that would cause mandatory exclusion under section 1128(a) of the Act increases the minimum period of exclusion to ten years, and two prior convictions automatically causes permanent exclusion. The five-year and ten-year minimum exclusions may only be extended if one or more of the aggravating factors specified at 42 C.F.R. § 1001.102(b) are present. The regulations do not limit the additional period of exclusion that may imposed based upon the presence of aggravating factors. The regulations also do not specify how much of an extension is warranted by the existence of an aggravating factor. The DAB has indicated that it is not the number of aggravating factors that is determinative, rather, it is the quality of the circumstances, whether aggravating or mitigating, which is controlling in analyzing these factors. Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

In this case, I have found that there is a basis for mandatory exclusion pursuant to section 1128(a). The minimum period of exclusion is five years. It is undisputed that there exist four aggravating factors:

�Petitioner's criminal act resulted in financial loss to private health care insurers in excess of $5,000, which is consistent with Petitioner being sentenced to pay $65,501.48 in restitution. 42 C.F.R. § 1001.102(b)(1).

�Petitioner was sentenced to 16 months incarceration based on his fraud conviction. 42 C.F.R. § 1001.102(b)(5).

�Petitioner had a prior civil, criminal, or administrative sanction record. Petitioner had been convicted of cocaine possession in 1996. In addition, the District of Columbia Board of Dentistry suspended his license to practice dentistry for failing to comply with a consent order requiring him to enroll in a drug treatment program and submit monthly urine screens to the Board. 42 C.F.R. § 1001.102(b)(6).

�Petitioner was convicted of another criminal offense arising out of the same circumstances as the conviction giving rise to his exclusion. 42 C.F.R. § 1001.102(b)(9).

I have found that no mitigating factors recognized by the regulations have been shown. Given the evidence before me, I do not find that extension of Petitioner's period of exclusion by five years, for a total of ten years, is unreasonable.

IV. CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all federal health care programs for a period of ten years, effective March 18, 2004.

KEITH W. SICKENDICK

Administrative Law Judge