SUBJECT:

Fedesminda L. Yabut-Baluyut, M.D.,

Petitioner,

The Inspector General

Petitioner, Fredesminda L. Yabut-Baluyut, M.D., is excluded from participation in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(4) of the Social Security Act (the Act) (42 U.S.C. § 1320a-7(a)(2)), effective August 19, 2004, based upon her conviction a of criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 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)). Extension of the minimum period of exclusion by 10 years, for a total period of 15 years, is not unreasonable, given the presence of four aggravating factors and no mitigating factor.

I. PROCEDURAL HISTORY

Petitioner was notified by the Inspector General (the I.G.) by letter dated July 30, 2004, that she was being excluded from participation in Medicare, Medicaid and all federal health care programs for 15 years. The I.G. advised Petitioner that her exclusion was pursuant to section 1128(a)(4) of the Act, due to her felony conviction of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Petitioner requested a hearing by an administrative law judge (ALJ) by letter dated August 16, 2004.

This case was assigned to me for hearing and decision on September 22, 2004. I convened a telephonic prehearing conference on November 18, 2004, the substance of which is memorialized in my order dated November 29, 2004. Petitioner was advised of her right to be represented by counsel at no expense to the government and she elected to proceed pro se. The parties agreed that this case may be decided upon the written record and a briefing schedule was set. On January 3, 2005, the I.G. filed a motion for summary judgment with a supporting brief (I.G. Brief), and I.G. exhibits (I.G. Exs.) 1 through 7. Petitioner filed a letter in response (P. Response) on February 2, 2005 with no exhibits. The I.G advised me by letter dated March 3, 2005, that no reply brief would be filed. Petitioner made no objection to I.G. exhibits 1 through 7 and they are admitted 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. Citations may be found in the analysis section of this decision if not included here.

1. On October 16, 2001, Petitioner was convicted in the United States District Court for the Central District of California of seven felony offenses involving conspiracy to possess and distribute and possession and distribution of pseudoephedrine, knowing and having reasonable cause to believe that it would be used to manufacture methamphetamine, during the period from about April 1997 through about April 1998. I.G. Exs. 4, 6.

2. Petitioner was sentenced to 97 months in prison followed by 3 years supervised release. I.G. Ex. 6.

3. On August 7, 2002, the Medical Board of the State of California revoked Petitioner's medical license, effective September 6, 2002, based upon her federal conviction. I.G. Ex. 1.

4. Petitioner was notified by the I.G. by letter dated July 30, 2004, that she was being excluded from participation Medicare, Medicaid and all federal health care programs for 15 years pursuant to section 1128(a)(4) of the Act, due to her felony conviction of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

5. Petitioner requested a hearing by an ALJ by letter dated August 16, 2004.

B. CONCLUSIONS OF LAW

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

2. The parties waived oral hearing and disposition based upon the documentary evidence and written submissions of the parties is appropriate in this case.

3. Petitioner was convicted of a felony offense within the meaning of the Act.

4. Petitioner was convicted of a felony offense that was committed after the effective date of the Health Insurance Portability and Accountability Act of 1996.

5. Petitioner was convicted of a felony offense that related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

6. There is a basis for Petitioner's exclusion pursuant to section 1128(a)(4) of the Act.

7. The minimum period of Petitioner's exclusion is five years pursuant to section 1128(c)(3)(B) of the Act.

8. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(2).

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

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

11. Petitioner has not shown the existence of any mitigating factors recognized by 42 C.F.R. § 1001.102(c).

12. It is not unreasonable to extend Petitioner's period of exclusion by 10 years for a total period of exclusion of 15 years.

13. The period of exclusion begins to run on August 19, 2004, the twentieth day after the July 30, 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 (the 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. APPLICABLE LAW

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. § 1230a-7(f)). Petitioner's request for a hearing was timely filed and I do have jurisdiction.

Pursuant to section 1128(a)(4) of the Act, the Secretary must exclude from participation in Medicare and Medicaid programs any individual convicted of a felony criminal offense that occurred after enactment of the Health Insurance Portability and Accountability Act of 1996, related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

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

1. Disposition based upon the documentary evidence and written submissions of the parties is appropriate in this case.

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing. The right to hearing before an ALJ is accorded to a sanctioned party by 42 C.F.R. § 1005.2 and the rights of both the sanctioned party and the I.G. to participate in a hearing are specified in 42 C.F.R. § 1005.3. Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration. 42 C.F.R. § 1005.6(b)(5). The ALJ may also resolve a case, in whole or in part, by summary judgment. 42 C.F.R. § 1005.4(b)(12). Summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party. See e.g., Fed. R. Civ. P. 56(c); Garden City Medical Clinic, DAB No. 1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628, at 3 (1997) (in-person hearing required where non-movant shows there are material facts in dispute that require testimony); see also, New Millennium CMHC, DAB CR672 (2000); New Life Plus Center, DAB CR700 (2000).

In this case, the parties have waived oral hearing and elected to submit documentary evidence and written argument for my consideration. I also conclude, based on the submissions of the parties, that there are no issues of material fact in dispute in this case and summary judgment is also appropriate.

2. There is a basis for Petitioner's exclusion pursuant to section 1128(a)(4) of the Act.

The I.G.'s position is that Petitioner must be excluded from participation in Medicare, Medicaid and all federal health care programs pursuant to section 1128(a)(4) of the Act, due to her felony convictions of criminal offenses related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. I.G. Brief at 8 - 11. Petitioner has never disputed that she was convicted and that she is subject to mandatory exclusion pursuant to section 1128(a)(4).

On October 16, 2001, Petitioner was convicted in the United States District Court for the Central District of California of seven felony offenses and two misdemeanors:

� conspiracy to possess and distribute approximately 395.8 kilograms of pseudoephedrine knowing and having reasonable cause to believe that it would be used to manufacture methamphetamine from about April 1997 through about April 1998 (Count One of the Second Superseding Indictment);

� possession and distribution of pseudoephedrine (May 22, 1997, 41.6 kilograms; September 2, 1997, 36.4 kilograms; November 3, 1997, 120 kilograms; December 15, 1997, 46 kilograms), without legitimate medical purpose and outside the course of her medical practice, knowing and having reasonable cause to believe that it would be used to manufacture methamphetamine (Counts Two, Five, Eight, and Eleven of the Second Superseding Indictment);

� unlawful distribution of pseudoephedrine on or about November 3, 1997 and December 5, 1997, (Counts Nine and Twelve of the Second Superseding Indictment); and

� possession of pseudoephedrine without complying with record keeping and reporting requirements, and, after knowledge of such requirements was acquired she failed to take immediate steps to remedy the violation (Counts Ten and Thirteen of the Second Superseding Indictment - misdemeanors).

I.G. Exs. 4, 6.

Petitioner was sentenced to 97 months in prison followed by 3 years supervised release. I.G. Ex. 6.

There is no question that Petitioner's offenses occurred after August 21, 1996, the effective date of the Health Insurance Portability and Accountability Act of 1996. Petitioner does not dispute that she was convicted within the meaning of section 1128(i) of the Act. Petitioner does not dispute that she was convicted of felony offenses related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Accordingly, I conclude that there is a basis for Petitioner's exclusion pursuant to section 1128(a)(4) of the Act. Pursuant to 42 C.F.R. § 1001.2002, the period of exclusion begins to run on August 19, 2004, 20 days after the July 30, 2004 I.G. notice of exclusion.

3. Pursuant to section 1128(c)(3)(B) of the Act, the minimum period of exclusion under section 1128(a) is five years and extension of the period of exclusion by 10 years is not unreasonable in this case given the presence of three aggravating factors and no mitigating factors.

The I.G. proposes to exclude Petitioner for the minimum period of five years and an additional 10 years based upon the presence of three aggravating factors and no mitigating factors. Petitioner requests that I reduce the period of exclusion to the five-year minimum.

(a) Aggravating factors.

Petitioner does not dispute that the minimum period of exclusion is five years pursuant to section 1128(c)(3)(B) of the Act. The period of exclusion may be extended if there are aggravating factors as defined by 42 C.F.R. § 1001.102(b). Petitioner has not disputed that the following three aggravating factors alleged by the I.G. are present in this case:

� The criminal acts for which she was convicted occurred over the period of more than one year from about April 1997 through about April 1998 (42 C.F.R. § 1001.102(b)(2));

� Petitioner's sentence included incarceration (42 C.F.R. § 1001.102(b)(5)); and,

� Petitioner was the subject of adverse action by the Medical Board of the State of California which revoked her medical license effective September 6, 2002 based upon her federal conviction, which is also the basis for the I.G. exclusion action (42 C.F.R. § 1001.102(b)(9)). I.G. Ex. 1.

(b) 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 (2002).

Petitioner argues in her request for hearing that a 15-year exclusion is excessive given her age and the length of her sentence to confinement. In her February 2, 2005 response to the I.G. motion for summary judgment, Petitioner also requests that I consider her age and the length of her sentence to confinement and approve no more than the minimum five-year period of exclusion.

I am limited to consideration of only the three mitigating factors specified in the regulation. Petitioner has not presented any evidence to show that any of the mitigating factors specified in the regulation are present in this case. Petitioner's age and the length of her sentence are not mitigating factors recognized by the regulation and do not give me a basis for reducing the proposed period of exclusion.

(c) Exclusion for 15 years is not unreasonable.

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, 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 regulation, 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 10 years and two prior convictions automatically causes permanent exclusion. The five-year and 10-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)(4) of the Act. I have also concluded that there are three aggravating factors as alleged by the I.G. and no mitigating factors have been established by Petitioner. Given the facts of this case, I find that exclusion of Petitioner for 15 years is not unreasonable. In deed, given the nature of her offenses and the abuse of her position of trust as a medical doctor to commit those offenses, a far longer period or permanent exclusion would be justifiable.

IV. CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all federal health care programs for a period of 15 years, effective August 19, 2004, 20 days after the July 30, 2004 IG notice of exclusion.

KEITH W. SICKENDICK

Administrative Law Judge