SUBJECT:

Russell A. Johnson,

Petitioner,

The Inspector General.

DECISION

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary Affirmance of the I.G.'s determination to exclude the Petitioner herein, Russell A. Johnson, from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years. The I.G.'s Motion and determination to exclude Petitioner are based on the terms of section 1128(a)(4) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(a)(4). As I shall set out in detail below, there is a proper basis for exclusion and the undisputed facts in this case require the imposition of the minimum five-year period of exclusion.

I. Procedural Background

In 2003, Russell A. Johnson, Petitioner, was a physician licensed to practice medicine in the Commonwealths of Pennsylvania and Virginia. On October 30, 2003, the Federal Grand Jury sitting for the United States District Court for the Eastern District of Virginia handed up an Indictment naming Dr. Johnson and twelve others as co-defendants, charging them with a variety of crimes related to the unlawful distribution of controlled substances, money laundering, the introduction of misbranded drugs into interstate commerce, and conspiracy.

Petitioner appeared with present counsel in United States District Court on April 19, 2004 and pleaded guilty to Count 1 of the Indictment, a felony. That Count charged that Petitioner had conspired with eleven co-defendants to distribute and dispense Schedule III and Schedule IV controlled substances, and had conspired with them to use an interstate communication facility to cause and facilitate the distribution and dispensing of the substances, in violation of 21 U.S.C. � 846. Petitioner's guilty plea was negotiated in return for the dismissal of 16 additional Counts of the Indictment in which he was named. Final adjudication of Petitioner's guilt and judgment of his conviction were entered, and sentence was imposed, on July 23, 2004: Petitioner was placed on probation for two years, the first six months of which he was required to serve in home confinement with electronic monitoring, and was required to pay a fine and costs totaling $2,100.00.

As he was obliged to do by the terms of section 1128(a) of the Act, the I.G. began the process of excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Section 1128(a)(4) of the Act dictates the mandatory exclusion, for a period of not less than five years, of "[a]ny individual or entity that has been convicted . . . under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." Act, section 1128(c)(3)(B); 42 U.S.C. � 1320a-7(c)(3)(B). On May 31, 2005, the I.G. notified Petitioner that he was to be excluded for the mandatory minimum period of five years.

Acting through counsel, Petitioner timely sought review of the I.G.'s action by letter dated June 16, 2005. On the authority of 42 C.F.R. � 1005.6, I convened a prehearing conference by telephone on August 3, 2005, in order to discuss the issues presented by the case with both parties, and to explore with them the procedures best suited for addressing those issues. The parties agreed that the case could be decided on written submissions, and I established a schedule for the submission of documents and briefs. The results of that conference and my directions to the parties appear in the Order of August 8, 2005. All briefing is now complete.

The proffer of exhibits in this case has been attended by a minor misunderstanding. The parties intended to submit a group of agreed-upon documents as joint exhibits, but differences over them appear to have arisen and the I.G. proffered I.G. Exhibits 1-4 (I.G. Exs. 1-4) separately. Petitioner submitted nine exhibits marked Joint Exhibits 1-9, although agreement had not been completely reached on their status. I have simply redesignated Petitioner's nine proffered exhibits as Petitioner's Exhibits 1-9 (P. Exs. 1-9). Neither side has raised specific objection to any of the exhibits, and they are all admitted as now designated.

II. Issues

The legal issues before me are limited to those enumerated at 42 C.F.R. � 1001.2007(a)(1). In the specific context of this record they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(4) of the Act; and

2. Whether the five-year term of the exclusion is unreasonable.

The controlling statutory, regulatory, and decisional authorities require that both issues be resolved in favor of the I.G.'s position. If I find a basis for Petitioner's exclusion pursuant to section 1128(a)(4) of the Act, then the five-year term of exclusion, the minimum established by section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B), is reasonable as a matter of law.

III. Controlling Statutes and Regulations

Section 1128(a)(4) of the Act, 42 U.S.C. � 1320a-7(a)(4), requires the mandatory exclusion from participation in Medicare, Medicaid, and all other federal health care programs of "[a]ny individual or entity that has been convicted for an offense which occurred . . . [after August 21, 1996] . . . under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." The terms of section 1128(a)(4) are restated somewhat more broadly in regulatory language at 42 C.F.R. � 1001.101(d). Petitioner does not deny that the felony to which he pleaded guilty is comprehended in this statutory language, and that nexus is fully established by the evidence before me.

The Act defines "convicted" as including those circumstances --

(1) when a judgment of conviction has been entered against the individual . . . by a . . . Federal . . . court, regardless of 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 . . . by a . . . Federal . . . court;

(3) when a plea of guilty or nolo contendere by the individual . . . has been accepted by a . . . Federal . . . court; or

(4) when the individual . . . has entered into participation in a . . . deferred adjudication . . . program where judgment of conviction has been withheld.

Act, section 1128(i)(1)-(4), 42 U.S.C. �� 1320a-7(i)(1)-(4). These definitions are repeated at 42 C.F.R. � 1001.2. Petitioner admits that the proceedings against him satisfy the literal terms of the first three definitions, but argues that they should not be applied so as to require his exclusion.

An exclusion based on section 1128(a)(4) is mandatory and the I.G. must impose it for a minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B). The regulatory language of 42 C.F.R. � 1001.102(a) affirms the statutory provision. Although the minimum mandatory period of exclusion is subject to enhancement in some limited circumstances and on proof of carefully-defined aggravating factors set out at 42 C.F.R. � 1001.102(b), in this case, the I.G. has not sought to enhance the five-year mandatory minimum period by offering to prove any of them. For that reason, I may neither consider nor inquire into the existence of any of the specific aggravating or mitigating factors set out at 42 C.F.R. � 1001.102(b) and (c).

IV. Findings and Conclusions

I find and conclude as follows:

1. On April 19, 2004, in United States District Court for Eastern District of Virginia, Petitioner pleaded guilty to one felony charge of conspiracy to distribute and dispense Schedule III and Schedule IV controlled substances, and conspiracy to use an interstate communication facility to cause and facilitate the distribution and dispensing of the substances, in violation of 21 U.S.C. � 846. I.G. Exs. 1, 2, 3, 4; P. Exs. 3, 4, 5, 6, 9.

2. On June 23, 2004, final adjudication of guilt and judgment of conviction were entered against Petitioner, and sentence was imposed upon him, on the basis of his plea as set out in Finding 1. The judgment of conviction recites that Petitioner was convicted of the crime of "Conspiracy to Distribute and Dispense Schedule II and IV Controlled Substances and to Use a Communications Facility in Committing and in Causing and Facilitating the Distribution and Dispensing of Schedule III and IV Controlled Substances in Violation of the Controlled Substances Act (Felony)," in violation of 21 U.S.C. � 846. I.G. Ex. 4; P. Exs. 7, 9.

3. Conspiracy to distribute and dispense controlled substances, as proscribed by 21 U.S.C. � 846, is a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001); Karl Eric Swanson, M.D., DAB CR1002 (2003).

4. The plea, conviction, and sentence described above in Findings 1, 2, and 3 constitute a felony "conviction" within the meanings of sections 1128(a)(4) and 1128(i)(1), (2), and (3) of the Act, and 42 C.F.R. � 1001.2.

5. The conduct which resulted in the Petitioner's conviction described above in Findings 2 and 4 occurred between October 1999 and August 2000, and thus after August 21, 1996. I.G. Exs. 1, 3; P. Exs. 3, 5, 6.

6. By reason of his conviction of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, Petitioner was subject to, and the I.G. was required, to impose a period of exclusion from participation in Medicare, Medicaid, and all other federal health care programs. Act, section 1128(a)(4).

7. On May 31, 2005, the I.G. notified Petitioner that he was to be excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years, based on the authority set out in section 1128(a)(4) of the Act.

8. On June 16, 2005, and acting through counsel, Petitioner perfected his appeal from the I.G.'s action by filing a timely hearing request.

9. The I.G. properly and reasonably set the period of Petitioner's exclusion at five years, the mandatory minimum term provided by law. Act, section 1128(c)(3)(B); 42 C.F.R. �� 1001.102(b), 1001.2007(a)(2).

10. There are no disputed issues of material fact before me and disposition on the written submissions is appropriate in this matter. Carrier Mills Nursing Home, DAB No. 1883 (2003).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(4) of the Act are: (1) the individual to be excluded must have been convicted of a criminal offense; (2) the criminal offense must have been a felony; (3) the felony conviction must have been for conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance; and (4) the felonious conduct must have occurred after August 21, 1996. Thomas Edward Musial, DAB No. 1991 (2005); Gerald A. Levitt, D.D.S., DAB CR1272 (2005); Robert C. Richards, DAB CR1235 (2004); Michael J. O'Brien, D.O., DAB CR1150 (2004); Karl Eric Swanson, M.D., DAB CR1002 (2003); Kathleen E. Talbott, M.D., DAB CR772 (2001); Conrad J. Sarnecki, Jr., D.O., DAB CR722 (2000).

Petitioner makes no effort to deny or refute the factual basis of the I.G.'s position. He admits each of the material steps in the proceedings against him in United States District Court, and concedes that his guilty plea was accepted, that he was adjudged guilty, and that a final judgment of conviction was entered against him. But although these events clearly satisfy three of the definitions of "convicted" at sections 1128(i)(1), (i)(2), and (i)(3) of the Act, Petitioner vigorously asserts that they do not amount to a "conviction" sufficient to invoke the I.G.'s mandatory exclusion authority, and in fact "negate the basis for exclusion." P. Br. at 4. The basis for Petitioner's assertion will be addressed presently; here, it is enough to state simply that the accepted plea, adjudication of guilt, and judgment of conviction supply the first essential element in the I.G.'s case.

The second, third, and fourth essential elements are satisfied by the nature and contents of the charge to which Petitioner pleaded guilty and the written Statement of Facts that Petitioner and his counsel signed in consummation of that plea. I.G. Exs. 1, 3; P. Exs. 3, 5, 6. Conspiracy in violation of 21 U.S.C. � 846 is by definition a felony, and the second element is established thereby. The common-sense reading of the "relating to" language of section 1128(a)(4), approved in Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001) and Karl Eric Swanson, M.D., DAB CR1002 (2003), relates Petitioner's crime to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, and thereby provides the third essential element. The fourth essential element is satisfied by Petitioner's admission that his part in the conspiracy fell during the period from October 1999 through August 2000. I.G. Ex. 3, at 1; P. Ex. 5, at 1.

Against the fully-demonstrated presence of all four essential elements, Petitioner raises this objection:

The issue in this case is whether the Court's findings of fact set out in its order can be considered in determining whether exclusion is required. That is, where the Court finds facts, as it did in this case, facts that were a part of its order of conviction negating the very idea underlying exclusion, does the Court Order prevail or is exclusion still mandatory.

P. Br. at 1-2.

The order to which Petitioner refers is the United States District Court's Notice of Intent to Depart Downward in the sentencing process. P. Ex. 8. That Notice is part of the complex mechanism established by the Sentencing Reform Act of 1984, 18 U.S.C. �� 3551-3583, 28 U.S.C. �� 991-998, and implemented in the United States Sentencing Commission's Guidelines Manual. It is employed pursuant to 18 U.S.C. � 3553(b) and FED. R. CRIM. P. 32(h) solely as a means of notifying prosecution and defense of a sentencing court's potential decision to impose a sentence less severe than the established guidelines might otherwise require, and of setting out the reasons for that potential decision.

In Petitioner's case, the sentencing court believed that several ameliorating factors warranted the imposition of a sentence below the guideline range. P. Ex. 7, at 3-11; P. Ex. 8. The sentencing court was obliged to provide the Notice by the terms of Burns v. United States, 501 U.S. 129 (1991), United States v. Maddox, 48 F.3d 791 (4th. Cir. 1995), and FED. R. CRIM. P. 32(h). The Notice makes no attempt to limit the authority of any other agency of government, and claims no precatory weight or effect outside the sentencing authority of the federal courts. ⁽¹⁾ Its contents would be relevant to this section 1128(a)(4) exclusion proceeding if, and only if, the I.G. had opened a discussion of the aggravating and mitigating factors listed at 42 C.F.R. � 1001.102(b) and (c) by attempting to enhance the mandatory minimum period of exclusion at issue. In such circumstance, the ameliorating factors set out in the Notice would be relevant insofar, but only so far, as they corresponded with a mitigating factor enumerated at 42 C.F.R. � 1001.102(c), or were connected with a listed mitigating or aggravating factor in a manner bearing on the appropriate weight to be given that factor. Keith Michael Everman, D.C., DAB No. 1880 (2003).

Petitioner argues that the Notice demands a waiver of exclusion via 42 C.F.R. � 1001.1801, even though that regulation is properly invoked only on a request for waiver "in writing and from an individual directly responsible for administering (a) State health care program." 42 C.F.R. � 1001.1801(a). Lest the exact nature of Petitioner's theory be misunderstood, it is set out here:

The Court's findings of fact, all of them, control. In essence the Court has found those facts warranting a waiver of exclusion within the meaning of 42 C.F.R.1001.1801. Because those facts have been established by Court decision, they ought to be binding on the Secretary. He ought to be required to treat the Court's findings as a request for a waiver of exclusion. The matter ought to be remanded to the Secretary for reconsideration in light of the Court's findings.

P. Br. at 4.

The I.G. correctly points out that Petitioner's theory is unsupported by any statute, regulation, or reported authority, and that Petitioner's reliance on the District Court's Notice of Intent to Depart Downward simply does not acknowledge the mandatory nature of the duty to exclude imposed on the I.G. by section 1128(a) of the Act. The I.G.'s argument may be blunt, but it is correct: regardless of what ameliorating factors the District Court found and relied on in fashioning a lenient sentence, Petitioner's conviction compels the mandatory minimum exclusion as a matter of law. The answer to the question Petitioner poses is just as blunt: the Notice does nothing to negate the idea underlying exclusion, the Notice does not prevail over section 1128(a) of the Act, and exclusion is mandatory no matter what the Notice says.

In different circumstances, the facts recited in a sentencing court's Notice of Intent to Depart Downward might be material in an exclusion proceeding. The five-year mandatory minimum period of exclusion is subject to enhancement if the I.G. asserts and proves any of the carefully-defined aggravating factors set out at 42 C.F.R. � 1001.102(b). In such cases, but only in such cases, petitioners are permitted to resist the attempted enhancement by asserting and proving some or all of the equally well-defined mitigating factors defined at 42 C.F.R. � 1001.102(c)(1), (2), and (3). In such cases, a Notice of Intent to Depart Downward might very well contain evidence of one or more mitigating factors. But, significantly, unless the I.G. seeks to enhance the period of exclusion by relying on those aggravating factors, a petitioner may not assert and an Administrative Law Judge may not consider any mitigating factors whatsoever. 42 C.F.R. � 1001.102(c). Emma Voloshin, M.D., DAB CR1179 (2004); Diane C. Turner, M.D., DAB CR1176 (2004); Carl Jeffrey Boyette, DAB CR1165 (2004); Karl Eric Swanson, M.D., DAB CR1002 (2003); Diane Amicucci, L.P.N., DAB CR540 (1998); Robert L. Howard, DAB CR459 (1997); Charles Addo Yobo, M.D., DAB CR361 (1995); Doina M. Buzea, M.D., DAB CR310 (1994). In this case, Petitioner may not assert, nor may I consider, the existence of any of those specific mitigating factors, for the I.G. has not attempted to enhance the five-year mandatory minimum period.

VI. Conclusion

For the reasons set out above, the I.G.'s exclusion of Petitioner Russell A. Johnson from participation in Medicare, Medicaid, and all other federal health care programs for a term of five years, pursuant to the terms of section 1128(a)(4) of the Act, is hereby sustained.

Richard J. Smith

Administrative Law Judge

1. The sentencing guidelines in effect at the time of Petitioner's conviction and sentence were 624 pages in length. United States Sentencing Commission, Guidelines Manual, (Nov. 2003). The first 15 of those pages were given over to a section entitled "Authority and General Application Principals." USSG � 1A1.1. There is absolutely no suggestion in that section, or elsewhere in the guidelines, that a Notice of Intent to Depart Downward should have a limiting effect on any action the I.G. might be required to undertake pursuant to section 1128(a) of the Act.