Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Domingos R. Freitas, Petitioner,
- v. -
The Inspector General.
DATE: June 18, 1993
Docket No. C-92-006
Decision No. CR272
DECISION
On July 22, 1991, the Inspector General (I.G.) notified Petitioner, Domingos
R. Freitas, that he was being
excluded from participation in the Medicare program and any State health care
program 1/ for a period of
ten years. The I.G. advised Petitioner that: 1) his exclusion was based on his
conviction for criminal
offenses "relating to the delivery of a health care item or service,"
within the meaning of section 1128(a)(1)
of the Social Security Act; and 2) section 1128(c)(3)(B) of the Act provides
that such exclusions be for a
period of not less than five years. Further, the I.G. informed Petitioner that
he was being excluded for a
period of ten years based on the aggravating circumstances of the case.
Petitioner requested a hearing, and the case was assigned to me. At the November
18, 1991 prehearing
conference, the I.G. contended that Petitioner's request for a hearing was not
timely filed and moved to
dismiss the case. In my Prehearing Order dated November 22, 1991, a briefing
schedule was established.
Subsequent to the filing of his brief, the I.G. withdrew the motion to dismiss.
At the November 18, 1991 prehearing conference, the parties agreed that, in
the event I denied the I.G.'s
motion to dismiss, they would proceed by motions for summary disposition. The
parties agreed that the
issue for summary disposition would be whether the I.G. had the authority to
exclude Petitioner pursuant to
section 1128(a)(1) of the Act. The parties also agreed that, if necessary, there
would be a subsequent in-
person hearing on whether the additional five-year period of exclusion was reasonable.
On April 29, 1992, after the submission of briefs and considering the arguments
contained therein, I issued
a Ruling in which I denied the I.G.'s motion for summary disposition. The basis
for my Ruling was that
there was insufficient undisputed evidence from which I could conclude that
Petitioner's criminal offenses
were program related within the meaning of section 1128(a)(1). The evidence
presented by the I.G. failed
to establish that the pharmaceuticals that formed the basis for Petitioner's
criminal convictions were
actually billed to the Medi-Cal program. 2/ Accordingly, I was unable to conclude,
at that time, that the
I.G. had the authority to exclude Petitioner.
On May 27, 1992, I issued an Order and Notice of Hearing that established the
schedule through which this
case would proceed to an in-person hearing. On September 15, 1992, I conducted
an in-person hearing in
this case in San Francisco, California. The parties have submitted posthearing
briefs.
I have considered the arguments, the evidence, and the applicable law. I conclude
that the I.G. has the
authority to exclude Petitioner pursuant to sections 1128(a)(1) and 1128(c)(3)(B)
of the Act. I further
conclude that the ten-year exclusion imposed and directed by the I.G. is supported
by the record in this
case and thus reasonable.
ISSUES
The issues in this case are whether:
1. Petitioner was convicted of a criminal offense related to the delivery
of a health care item or
service within the meaning of section 1128(a)(1) of the Act;
2. Petitioner's exclusion of ten years is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. At all times relevant to this case, Petitioner was a pharmacist licensed
by the California State Board of
Pharmacy (Board of Pharmacy). I.G. Ex. 3 at 1 - 2; 10. 3/
2. At all times relevant to this case, Petitioner was licensed by the Board
of Pharmacy to do business as
Plaza Pharmacy. I.G. Ex. 3 at 1 - 2; 10.
3. On April 20, 1989, the Board of Pharmacy filed an Accusation against Petitioner
and Plaza Pharmacy,
accusing Petitioner of dispensing drugs without valid prescriptions and refilling
prescriptions without
authorization. I.G. Ex. 4 at 3 - 26.
4. Included in the Accusation was the charge that, commencing in November 1983
Petitioner dispensed
drugs "pursuant to allegedly issued or authorized prescriptions by a Dr.
Thomas Daglish." I.G. Ex. 4 at 3.
5. One of the persons for whom Petitioner filled and refilled prescriptions
without authorization by Dr.
Daglish was patient SV. I.G. Ex. 4 at 5 - 6. 4/
6. Included in the Accusation was the charge that, commencing in September
1984, Petitioner refilled
prescriptions issued by a Dr. C.H. Kleyn for patient GW. The charge alleges
that Dr. Kleyn did not
authorize the refills. I.G. Ex. 4 at 11 - 15.
7. On December 14, 1989, Petitioner signed a Stipulation, Decision, and Order
of the Board of Pharmacy
(Board of Pharmacy Stipulation) in which he admitted that from October 20, 1983
through October 16,
1987, he had, on over 800 occasions, dispensed drugs without valid prescriptions
or refilled prescriptions
without authorization for customers at Plaza Pharmacy. I.G. Ex. 3; FFCL 2.
8. In the December 14, 1989, Board of Pharmacy Stipulation, Petitioner admitted,
among other things, that
he had refilled prescriptions for patients SV and GW without proper authorization.
I.G. Ex. 3 at 2, 4, 5,
and 10 - 14.
9. Among the prescriptions Petitioner admitted refilling without authorization
was one for the drug Inderal
for SV on June 9, 1987 (Prescription # 95212). I.G. Ex. 3 at 5; 7 at 1, 2.
10. Among the prescriptions Petitioner admitted refilling without authorization
was one for the drug
Dyazide for GW on September 14, 1987 (Prescription # 84141). I.G. Ex. 3 at 12;
7 at 6.
11. As a result of Petitioner's admissions, the Board of Pharmacy took disciplinary
action against him,
including revoking his pharmacy license (PU 24514, which was issued to him individually)
and his permit
(AB16487, which was issued to him to do business as Plaza Pharmacy). I.G. Ex.
3 at 24 - 30.
12. The Board of Pharmacy stayed the revocation of Petitioner's pharmacy license
and permit, Petitioner
was suspended from the practice of pharmacy for a period of 45 days, and placed
Petitioner on probation
for three years. I.G. Ex. 3 at 26 - 30.
Petitioner's conviction is program-related. 5/
13. SV and GW were Medi-Cal recipients at all times relevant and material to
this case, specifically during
the period of time from October 10, 1985 through September 30, 1988. I.G. Ex.
1 at 14 - 18; 5 at 1 - 5; 7
at 1 - 8.
14. SV and GW were regular customers of Plaza Pharmacy and routinely had their
Medi-Cal prescriptions
filled and refilled there. I.G. Ex. 5.
15. On January 9, 1990, Petitioner was indicted on 15 felony counts, all involving
either improper
dispensation and prescription of controlled substances or submission of false
or fraudulent Medicaid
claims. I.G. Ex. 1 at 2 - 8.
16. Included in the felony complaint was the charge (Count XIII) that Petitioner
did willfully and
unlawfully, with intent to defraud, present and cause to be presented to the
State of California for
allowance or payment a false and fraudulent Medi-Cal claim, to wit number 7168634255101,
for services
rendered to recipient SV on June 9 and June 22, 1987, in violation of section
14107 of the (California)
Welfare and Institutions Code. I.G. Ex. 1.
17. Count XIII of the felony complaint described one single and continuing
transaction, which began on
June 9, 1987, when Petitioner wrongfully refilled a prescription for Medi-Cal
recipient SV, and which
culminated on June 25, 1987, the date that Medi-Cal issued a check for reimbursement
for the wrongfully
refilled prescription. I.G. Ex. 1, 8 at 2. 6/
18. Included in the felony complaint was the charge (Count XV) that Petitioner
did willfully and
unlawfully, with intent to defraud, present and cause to be presented to the
State of California for
allowance or payment a false and fraudulent Medi-Cal claim, to wit number 7266630595001,
for services
rendered to recipient GW on September 14 and 28, 1987, in violation of section
14107 of the (California)
Welfare and Institutions Code. I.G. Ex. 1, 8 at 2, 3.
19. Count XV of the felony complaint described a single and continuing transaction,
which began on
September 14, 1987, when Petitioner wrongfully refilled a prescription for Medi-Cal
recipient GW, and
which culminated on October 2, 1987, the date Medi-Cal issued a check for reimbursement
for the
wrongfully refilled prescription. I.G. Ex. 1, 8 at 3. 7/
20. On March 21, 1990, pursuant to a negotiated plea agreement, a superseding
Information, No. 28598
(Information), was filed in which the charges against Petitioner were revised
and reduced to three counts.
I.G. Ex. 1, 8.
21. Count I of the Information charged Petitioner with willfully and unlawfully
prescribing, administering,
and dispensing Codeine to an habitual user, a felony. There is no evidence,
nor has the I.G. contended, that
Count I is program-related. I.G. Ex. 1 at 9, 10, and 14 - 18; 8.
22. Count II of the Information charged that on or about
June 22, 1987, Petitioner unlawfully refilled a prescription for a dangerous
drug for SV without
authorization as required under California law, a misdemeanor. I.G. Ex. 1 at
9, 10, and 14 - 18; 8.
23. Count III of the Information charged that on or about September 28, 1991,
Petitioner unlawfully
refilled a prescription for a dangerous drug for GW without authorization as
required under California law,
a misdemeanor. I.G. Ex. 1 at 9, 10, and 14 - 18; 8.
24. Count II of the Information described exactly the same transaction as had
been described in Count XIII
of the felony complaint. However, instead of charging Petitioner with a felony,
the Information charged
him with the misdemeanor offense of refilling a prescription for a dangerous
drug without authorization.
I.G. Ex. 1, 8, 9; Tr. 180 - 201; 210 - 17; FFCL 15 - 16.
25. Count III of the Information described exactly the same transaction as
had been described in Count
XV of the felony complaint. However, instead of charging Petitioner with a felony,
the Information
charged him with the misdemeanor offense of refilling a prescription for a dangerous
drug without
authorization. I.G. Ex. 1, 8, 9; Tr. 210 - 17; FFCL 17 - 18.
26. Counts II and III of the Information do not contain a specific reference
to the Medi-Cal program, at
least in part, because Petitioner's criminal attorney was aware of the possibility
of a subsequent
administrative sanction and did not want Petitioner to plead to charges that
were, on their face, program-
related. Tr. 208, 220 - 22.
27. On April 20, 1990, in a California State court, Petitioner entered a plea
of nolo contendere to the three
counts contained in the Information. The court accepted Petitioner's plea and
judgment was entered on all
three counts. I.G. Ex. 1 at 9 - 13; FFCL 19 - 24.
28. Petitioner was given a suspended sentence of one year in jail for willfully
and unlawfully prescribing,
administering, and dispensing Codeine to an habitual user (Count I of the Information)
and a suspended
sentence of 90 days in jail for each of the two counts of refilling a prescription
for a dangerous drug
without authorization (Counts II and III of the Information). I.G. Ex. 1 at
11, 12.
29. Petitioner was sentenced to pay $2246.27 in restitution to the Medi-Cal
program, a "restitution fine" of
$500, a fine of $5000, and a period of probation for five years. I.G. Ex. 1
at 11, 12, and 15.
30. Only Petitioner's pleas to the two misdemeanor offenses (Counts II and
III of the Information) are
relevant to my determination as to whether the I.G. had the authority to exclude
Petitioner under section
1128(a)(1) of the Act. FFCL 20 - 25.
31. Petitioner's plea to the felony charge (Count I of the Information) is
relevant only to the issue of
Petitioner's trustworthiness and not to the authority of the I.G. to exclude
Petitioner. Section 1128(a)(1) of
the Act; I.G. Ex. 2; FFCL 20 - 21.
32. The June 22, 1987 date contained in Count II of the Information is a date
that falls between the date
Petitioner refilled prescription number 095212 for Medi-Cal recipient SV without
authorization (June 9,
1987) and the date on which Medi-Cal issued a check to reimburse Petitioner
for the unauthorized refill
(June 25, 1987). Tr. 190 - 92, 210 - 17; I.G. Ex. 6, 7 at 1 - 4, 8.
33. The September 28, 1987 date contained in Count III of the Information is
a date that falls between the
date Petitioner refilled prescription number 084141 for Medi-Cal recipient GW
without authorization
(September 14, 1987) and the date on which Medi-Cal issued a check to reimburse
Petitioner for the
unauthorized refill (October 2, 1987). Tr. 190 - 92, 210 - 17; I.G. Ex. 6, 7
at 5 - 8, 8.
34. Medi-Cal paid for the drugs that Petitioner admitted, and was convicted
of, refilling without
authorization for SV and GW. Tr. 214 - 17; I.G. Ex. 1, 3, and 6 - 8; FFCL 13,
14, 16 - 20, 22 - 27.
35. Medi-Cal (Medicaid) is a State health care program as defined by the Social
Security Act (Act). 42
U.S.C. 1320a-7(h).
36. Petitioner was convicted of three criminal offenses, within the meaning
of section 1128(i) of the Act.
FFCL 27.
37. Petitioner was convicted of two criminal offenses related to the delivery
of an item or service under the
Medicaid program, within the meaning of section 1128(a)(1) of the Act. FFCL
13 - 36.
38. Sections 1128(a)(1) and 1128(c)(3)(B) of the Act provide for a minimum
mandatory exclusion of five
years.
Petitioner's exclusion for ten years is reasonable.
39. Petitioner admitted that he dispensed without a valid prescription or refilled
prescriptions without
authorization for the following drugs: Dyazide, Inderal, Naproxen, Kenalog Lotion,
Hydrochlorothiazide,
Hydralazine, Acetaminophen with Codeine, Phenergan with Codeine, Tenormin, Apresoline,
Persantine,
Dipyridamole, Talwin, Potassium HCL, Feldene, Butisol Sodium, Aldactazide, Anusol
HC, Wyanoids HC,
Meprobamate, Tagamet, Septra DS, and Mycostatin suspension. I.G. Ex. 3; Tr.
109 - 59.
40. The drug Dyazide is a diuretic (a drug that eliminates excess water in
the body) that is used in the
treatment of high blood pressure. The possible deleterious side effects from
Dyazide include dizziness,
mental confusion, and the altering of a patient's electrolytes (in this case
potassium), which can lead to
irregular heartbeat. Tr. 109 - 11.
41. Standard practice for the treatment of patients with Dyazide includes laboratory
tests to check the
patient's potassium levels. The laboratory tests should be performed twice weekly
for the first month the
patient is being treated with Dyazide, and then twice a year after that time.
Tr. 110 - 11.
42. The drug Inderal is a medication that causes the heart to beat less rapidly
and less forcefully, thus
causing a reduction in the patient's blood pressure. Inderal is used in the
treatment of high blood pressure.
The possible deleterious side effects from the use of Inderal include fainting,
asthma, cardiac arrest, and
irregular heartbeat. Tr. 111 - 15.
43. Standard practice for the treatment of patients with Inderal includes periodic
monitoring of potassium
levels and kidney function. Tr. 113 - 15.
44. Tenormin is the same type of drug as Inderal, i.e., it acts to decrease
the heart rate and the force of the
contraction of the heart muscle. The possible deleterious side effects from
Tenormin are the same as
Inderal. Tr. 125.
45. Standard practice for the treatment of patients with Tenormin is the same as that for Inderal. Tr. 125.
46. Hydrochlorothiazide is a diuretic that is used to treat high blood pressure.
The possible deleterious
side effects from Hydrochlorothiazide are the same as those from Dyazide. Tr.
119 - 20, 127.
47. Standard practice for patients undergoing treatment with Hydrochlorothiazide
is the same as with
Dyazide. Tr. 120, 127.
48. The combination of Hydrochlorothiazide and Dyazide being simultaneously
administered to one
patient is medically contradictory and potentially dangerous if the patient
is not being medically monitored.
Tr. 129 - 30.
49. Hydralazine is a drug that is used to treat high blood pressure. Hydralazine
lowers a patient's blood
pressure by relaxing the muscles around the veins. The possible deleterious
side effects from Hydralazine
include fainting and increased heart rate (tachycardia). Tr. 120 - 21.
50. Apresoline is the brand name for Hydralazine and has the same pharmacological
effects and side
effects as Hydralazine. Tr. 125 - 26.
51. Standard practice for treating patients with Hydralazine is periodic monitoring
of the patient's blood
pressure and heart rate. Tr. 121.
52. The standard practice for treating patients with Apresoline is the same
as for treating patients with
Hydralazine. FFCL 50 - 51.
53. Aldactazide is a diuretic drug similar to Dyazide, and is used in the treatment
of high blood pressure.
The possible deleterious side effects from Aldactazide are similar to Dyazide.
Tr. 132; see Tr. 109 - 11.
54. Standard practice for the treatment of patients with Aldactazide is similar
to the standard practice for
treating patients with Dyazide. Tr. 132; see Tr. 110 - 11; FFCL 40 - 41, 53.
55. Potassium HCL is a drug which replaces potassium in the body. Tr. 128.
56. A patient receiving Potassium HCL also should receive laboratory blood
testing to establish and
maintain the proper potassium level. Tr. 128.
57. Improper potassium levels in the body can lead to irregular heartbeat. Tr. 119 - 20, 127, 132.
58. Feldene is a drug that is an anti-inflammatory agent and is used primarily
to alleviate the symptoms of
arthritis. The potential deleterious side effects of Feldene are ulceration
of the stomach lining,
gastrointestinal bleeding, and the loss of potassium from the body resulting
from that bleeding. Tr. 130.
59. The drug Naproxen is a non-steroidal anti-inflammatory used primarily in
the treatment of arthritis.
The possible deleterious side effect from the use of Naproxen is the erosion
of the stomach lining leading
to gastrointestinal bleeding. Tr. 117 - 18.
60. Standard practice for treating patients with Naproxen is to alert the patient
to the possibility of having
black stools or other signs indicative of gastrointestinal bleeding, and, if
a patient complained of these
symptoms, to order laboratory testing to monitor the levels of iron and red
blood cells present in the
patient's blood. Tr. 117 - 18.
61. Petitioner dispensed Naproxen to a customer. There is insufficient evidence
in the record to establish
that the customer to whom Petitioner dispensed Naproxen without authorization
was alerted to the signs
indicative of gastrointestinal bleeding or received medical testing, in accordance
with standard practice for
persons being treated with Naproxen. I.G. Ex. 3; FFCL 60.
62. There are five schedules of controlled substances. Schedule I drugs are
totally illegal and have no
medical use. Schedule II drugs have a high abuse potential but have some medical
use. Schedule II
includes morphine and demerol. Schedule III drugs have a medical use and have
less potential for abuse
than drugs classified as Schedule II. Codeine is classified as a Schedule III
drug. Schedule IV drugs have
a medical use and have less abuse potential than Schedule III drugs. Schedule
V drugs have a medical use
and have less abuse potential than Schedule IV drugs. Tr. 122 - 23.
63. Acetaminophen with Codeine is a combination of two drugs, Acetaminophen
and Codeine.
Acetaminophen is the generic name for Tylenol. Codeine is a Schedule III narcotic.
The possible
deleterious side effects of Codeine are nausea, vomiting, drowsiness, dizziness,
and addiction. Tr. 120 -
24.
64. Talwin is a Schedule IV synthetic narcotic (opiate-related drug) that is
used as a painkiller. The
possible deleterious side effects from Talwin are drowsiness, addiction, and
hallucinations. Tr. 133.
65. Talwin is a drug that is so widely abused that physicians are reluctant to prescribe it. Tr. 134.
66. Butisol Sodium is a Schedule III drug that is used to induce sleep or reduce
anxiety symptoms. Butisol
Sodium is a depressant that can cause drowsiness and has a relatively high risk
of addiction. Tr. 131.
67. The medically approved use of Butisol Sodium is limited to two weeks. After
two weeks of use,
Butisol Sodium loses its effectiveness in treating the symptoms that it is supposed
to alleviate and the
patient is at risk of becoming addicted to the drug. Tr. 131 - 32.
68. A person who takes Butisol Sodium for more than two weeks may, upon the
cessation of the use of the
drug, experience withdrawal symptoms for up to two weeks. Tr. 132.
69. Petitioner refilled several prescriptions for Butisol Sodium without authorization
for a customer over
periods of time exceeding two months and in some instances lasting over five
months. I.G. Ex. 3 at 10 -
14.
70. Petitioner refilled prescriptions for a customer without authorization
for the drug Butisol Sodium over
an extended period of time, in contradiction of the approved medical usage of
the drug. I.G. Ex. 3 at 10 -
14; FFCL 66 - 69.
71. Meprobamate is a drug that is a Schedule IV sedative hypnotic, similar
to valium. Meprobamate is
used for the short term alleviation of the symptoms of anxiety disorders. Tr.
141.
72. Petitioner dispensed prescriptions for the drug Meprobamate for a customer
without authorization over
an extended period of time, in contradiction of the drug's medically indicated
usage. Tr. 141; I.G. Ex. 3;
FFCL 62, 71.
73. Petitioner filled and refilled prescriptions without authorization for the
drug Talwin for customer LC
from August 28, 1984 through February 13, 1987. I.G. Ex. 1, 3 at 17 - 19.
74. Petitioner filled and refilled prescriptions without authorization for
the drug Meprobamate for LC from
July 31, 1984 through January 26, 1987. I.G. Ex. 1; 3 at 19 - 20.
75. Petitioner filled and refilled prescriptions without authorization for
the drug Acetaminophen with
Codeine for LC from January 2, 1985 through October 16, 1987. I.G. Ex. 1; 3
at 20 - 22.
76. For over one year, Petitioner simultaneously filled and refilled prescriptions
for Talwin, Meprobamate,
and Acetaminophen with Codeine for LC. Tr. 138 - 144; I.G. Ex. 3 at 17 - 22;
FFCL 73 - 75.
77. With the exception of the treatment of the pain caused by cancer, there
is no legitimate medical
purpose for a person to be receiving the drugs Talwin, Meprobamate, and Acetaminophen
with Codeine
simultaneously. Tr. 143.
78. There is no evidence in the record that LC, the person for whom Petitioner
simultaneously and without
authorization refilled prescriptions for Talwin, Meprobamate, and Acetaminophen
with Codeine, had
cancer.
79. From December 14, 1984 through September 3, 1987, Petitioner dispensed,
without a valid
prescription, and refilled without authorization, 24 prescriptions (120 refills)
of Phenergan with Codeine
for customer M. I.G. Ex. 3 at 22.
80. Phenergan with Codeine is a Schedule V narcotic that is typically prescribed
for a two week period to
treat the symptoms of a cold. Tr. 174.
81. There is no evidence in the record showing that there was a legitimate
medical purpose for Petitioner
to dispense without a valid prescription and refill without authorization 24
prescriptions (120 refills) for
Phenergan with Codeine for M from December 14, 1984 through September 3, 1987.
Tr. 144 - 145; FFCL
62, 79 - 80.
82. From October 20, 1983 through October 16, 1987, Petitioner provided 111
unauthorized refills of the
drug Talwin to customer Cl. I.G. Ex. 3 at 16.
83. There is no evidence in the record from which I can conclude that there
was a legitimate medical
purpose for Petitioner to provide 111 refills of Talwin to Cl. Tr. 137 - 38;
FFCL 82.
84. Petitioner was accommodating Cl's addiction to the drug Talwin. Tr. 137 - 38; FFCL 82 - 83.
85. Withdrawal symptoms for someone who is addicted to one type of drug manifest
themselves as painful
effects that are the opposite of the effect of the drug to which the person
is addicted. For example, upon
withdrawal a person who is addicted to depressants would experience hyperactivity,
nervousness,
insomnia, salivation and increased nerve activity. Tr. 132.
86. A pharmacist has a duty to inform a physician when he sees irregularities
or any potential problems in
the manner in which the physician is prescribing drugs. Tr. 154, 156.
87. A pharmacist has a duty to question a physician regarding any medically
inappropriate medications
prescribed by the physician. Tr. 156.
88. A pharmacist has a duty to warn patients about the risks involved in driving
and similar tasks when he
fills their prescriptions for medication that causes drowsiness or dizziness.
Tr. 124.
89. There is insufficient evidence in the record to establish that Petitioner
warned the persons to whom he
provided, without authorization, prescriptions or refills that caused drowsiness,
about the risks involved in
driving and similar tasks. FFCL 62 - 64, 66, 71 - 76, 79 - 82.
90. A pharmacist may suggest alternative medications for a physician to prescribe,
but the physician has
the authority to reject the pharmacist's suggestions. Tr. 156.
91. A pharmacist has a right not to fill a prescription if he does not think
it is medically appropriate. Tr.
154.
92. A pharmacist may not prescribe medications for or treat patients. Tr. 155.
93. A pharmacist has no right to function as a doctor and prescribe medication,
even if he believes that a
doctor is not adequately treating the patient. Tr. 154 - 55.
94. If a physician does not authorize a prescription medication, that medication
cannot be dispensed by
anyone, including a pharmacist. Tr. 155, 248 - 49.
95. A pharmacist has no authority to order laboratory tests. Tr. 159.
96. Petitioner admitted that he dispensed without a valid prescription, or
refilled prescriptions without
authorization, over 800 prescription medications. I.G. Ex. 3.
97. Petitioner violated his duties as a pharmacist by dispensing more than
800 prescription medications
without authorization from a physician. I.G. Ex. 1, 3; FFCL 39, 92 - 94, 96.
8/
98. Petitioner dispensed without authorization the drugs Hydrochlorothiazide
and Dyazide simultaneously
for the same person. I.G. Ex. 3 at 10 - 12; FFCL 39.
99. There is insufficient evidence in the record to establish that the person
to whom Petitioner dispensed a
combination of Hydrochlorothiazide and Dyazide was being medically monitored
or was receiving any
form of laboratory testing.
100. Petitioner's dispensing the drugs Hydrochlorothiazide and Dyazide simultaneously
for a customer
was a medically contradictory combination of drugs that could have been harmful
to the customer. Tr. 129
- 45; FFCL 39 - 41, and 46 - 48.
101. Petitioner dispensed without authorization medications for customers over
periods of time that were
in excess of the medical usefulness of the drugs. Tr. 131 - 45; I.G. Ex. 3;
FFCL 62, 66 - 72.
102. There is no evidence in the record establishing that any of the customers
to whom Petitioner
dispensed without authorization the drugs Dyazide, Inderal, Hydrochlorothiazide,
Hydralazine
(Apresoline), Tenormin, Potassium HCL, Naproxen and Aldactazide received any
medical or laboratory
testing prior to, or in the period following, the time Petitioner dispensed
the drugs. FFCL 39.
103. Petitioner subjected a number of his customers to deleterious side effects
and dangers to their health
by dispensing without authorization the drugs Dyazide, Inderal, Hydrochlorothiazide,
Hydralazine
(Apresoline), Tenormin, Potassium HCL, Naproxen, and Aldactazide, although these
customers were not
receiving follow-up testing or medical monitoring, in accordance with standard
practice for persons
undergoing treatment with these drugs. Tr. 108 - 42, 247 - 48; I.G. Ex. 3; FFCL
39 - 61.
104. Petitioner subjected a number of his customers to the risk of drug addiction
by dispensing without
authorization the addictive drugs Talwin, Butisol Sodium, Meprobamate, Phenergan
with Codeine, and
Acetaminophen with Codeine. Tr. 108 - 42; I.G. Ex. 3; FFCL 62 - 85.
105. Petitioner violated his duty of care as a pharmacist by dispensing without
authorization addictive
drugs in quantities or intervals that allowed the persons who were receiving
the drugs to abuse the drugs,
become addicted to the drugs, or use the drugs in a manner inconsistent with
their valid medical usage. Tr.
131 - 37, 141 - 50; I.G. Ex. 3; FFCL 39, and 62 - 95.
106. Persantine (Dipyridamole) is an anti-platelet (blood thinning) drug used
to treat angina and prevent
myocardial infarctions. The possible deleterious side effects from the use of
Persantine are an increased
risk of bleeding or bruising, and low blood pressure. Tr. 125 - 27.
107. Persantine and Dipyridamole are the same drug. Persantine is the brand
name and Dipyridamole is
the generic name. Tr. 126.
108. Petitioner dispensed without authorization to customer H Persantine (Dipyridamole)
from August 17,
1984 through October 13, 1987. FFCL 39; I.G. Ex. 3 at 6 - 9.
109. Petitioner subjected customer H to the risk of deleterious side effects
by dispensing without
authorization Persantine (Dipyridamole). FFCL 107 - 08.
110. Tagamet is a stomach medication that reduces the amount of acid released
by the stomach and that is
used for the treatment of ulcers. The possible deleterious side effect from
the use of Tagamet is dizziness.
Tr. 145 - 46.
111. Petitioner dispensed the drug Tagamet 45 times without authorization. I.G. Ex. 3 at 23 - 24.
112. By dispensing Tagamet without authorization 45 times for a customer, Petitioner
subjected that
customer to the detrimental side effect of dizziness from the use of this drug.
FFCL 39 and 110 - 11; Tr.
146.
113. Kenalog lotion is a cortisone-type drug that is applied to the surface
of the skin to treat inflammatory
disorders of the skin like eczema and psoriasis. The possible deleterious side
effects from the long term
use of Kenalog lotion are thinning of the skin and a reduction in the body's
ability to fight infection. Tr.
118 - 19.
114. There is insufficient evidence in the record to establish that the customer
to whom Petitioner
dispensed without authorization Kenalog lotion used this drug over a long period
of time. I.G. Ex. 3; Tr.
118 - 19.
115. There is insufficient evidence in the record to establish that Petitioner,
by dispensing without
authorization Kenalog lotion, caused the person to whom the drug was dispensed
to be subjected to any of
the drug's potential detrimental side effects. I.G. Ex. 3, FFCL 113 - 14.
116. Anusol HC and Wyanoids HC are drugs that are used in the treatment of hemorrhoids. Tr. 133.
117. There is insufficient evidence in the record to establish that there are
any potential detrimental side
effects from the drugs Anusol HC and Wyanoids HC.
118. There is insufficient evidence in the record that Petitioner, by dispensing
without authorization
Anusol HC and Wyanoids HC, caused any of his customers to be subjected to detrimental
side effects from
these drugs. FFCL 116 - 17.
119. Septra DS is an antibiotic that is used in the treatment of urinary tract infections. Tr. 146.
120. There is insufficient evidence in the record to establish that Petitioner,
by dispensing without
authorization Septra DS, caused his customers to be subjected to any detrimental
side effects. FFCL 39;
Tr. 146.
121. Mycostatin suspension is a medication that is used to treat fungal infections
within the mouth. Tr.
146.
122. There is insufficient evidence in the record to establish that Petitioner,
by dispensing without
authorization Mycostatin suspension, caused any of his customers to be subjected
to any detrimental side
effects. FFCL 39; Tr. 146.
123. Petitioner received and read the I.G.'s July 22, 1991 letter informing
him that: 1) he was excluded
from Medicare and any State health care program; 2) such exclusion would commence
as of August 11,
1991; 3) payment would not be made to any entity Petitioner was serving as an
employee or in any
capacity for any services he provided after the effective date of the exclusion;
and 4) if Petitioner submitted
or caused to be submitted claims for items or services after the effective date
of his exclusion, he could be
subject to a civil monetary penalty. Tr. 259 - 62; I. G. Ex. 2 at 3 - 5.
124. Petitioner continued to fill or refill prescriptions for Medi-Cal recipients
after he received and read
the I.G.'s letter informing him of his exclusion and notifying him of the terms
of his exclusion. Tr. 262 -
69.
125. Subsequent to August 11, 1991, Petitioner filled or refilled prescriptions
for Medi-Cal recipients
without ensuring that the programs would not be billed. He acknowledged that
it was possible that the
Medi-Cal program did receive claims for reimbursement for prescription medications
he dispensed after
August 11, 1991. Tr. 250 - 51, 262 - 69.
126. Petitioner's assertions that he did not know or think he was excluded
as of August 11, 1991 and that
he did not know what it means to be excluded are not credible. Tr. 259 - 69;
I.G. Ex. 2.
127. Petitioner has not made a meaningful effort to comply with the terms of
his exclusion. FFCL 123 -
26.
128. That Petitioner has not made a meaningful effort to comply with the terms
of his exclusion is
evidence of his lack of trustworthiness to be a program provider. FFCL 127.
129. The California Department of Health Services suspended Petitioner from
participation in the Medi-
Cal program effective December 4, 1990. I.G. Ex. 2 at 16.
130. I find not credible Petitioner's assertions that he dispensed without
authorization a large quantity of
addictive drugs to LC, an habitual user, because of her chronic back problem
and because he thought she
was allowing her husband to use the drugs for his kidney stones. Tr. 241 - 45;
FFCL 39, 62 - 65, and 73 -
77.
131. There is no evidence in the record that LC's husband had a valid prescription
for any type of
painkilling medication during the time Petitioner was dispensing without authorization
painkilling
medication for LC.
132. I find not credible Petitioner's assertion that LC's husband had a valid
prescription for painkilling
medication at the time that Petitioner was dispensing without authorization
painkilling drugs for LC. Tr.
240 - 43; FFCL 130 - 31.
133. Petitioner's unsubstantiated assertion, even if true, that LC's husband
had a valid prescription for
painkilling medication at the time Petitioner was, without authorization, dispensing
addictive painkilling
medications for LC is an attempt to minimize responsibility for his actions,
and is indicative of his lack of
trustworthiness. FFCL 130 - 32.
134. Petitioner's assertion that he dispensed addictive drugs without authorization
for LC because she and
her husband could not always get to a doctor is not credible. FFCL 73 - 77;
Tr. 241 - 43.
135. Petitioner's unsubstantiated assertion, even if true, that he dispensed
drugs without authorization for
LC because she and her husband could not always get to a doctor is an attempt
to minimize responsibility
for his actions and is indicative of his lack of trustworthiness. FFCL 134.
136. Petitioner violated his duty as a pharmacist when he dispensed prescription
medication to LC
although he knew that she was giving some of the drugs to her husband. Tr. 241
- 43; FFCL 76, 88, 92 -
94, 130 - 32, and 134.
137. Petitioner has demonstrated a consistent pattern of committing unprofessional
acts which are in
derogation of his duties as a pharmacist. FFCL 39, 97 - 105, and 136.
138. Petitioner has demonstrated a consistent pattern of committing acts that
place program recipients and
others at risk of drug addiction. FFCL 39, 62 - 85, 104, and 105.
139. Petitioner has demonstrated a consistent pattern of committing acts that
place program recipients and
others at risk from the detrimental side effects of unauthorized prescription
drugs and from a lack of
appropriate medical monitoring and follow-up care. FFCL 39 - 61.
140. Petitioner has demonstrated a willingness to commit criminal acts which
are harmful to the Medicare
and Medicaid programs. FFCL 13 - 20, 22, 29, 32 - 37.
141. Petitioner's sworn testimony at the administrative hearing is in direct
conflict with an earlier sworn
declaration he made during an investigation by the California Board of Pharmacy.
I.G. Ex. 11 at 24; Tr.
255 - 56.
142. Petitioner's assertion that he dispensed prescription drugs without authorization
because he was being
mindful of the convenience of his customers is an attempt to minimize the seriousness
of his actions and
shows a reluctance to admit wrongdoing. Tr. 238.
143. Petitioner's assertion that his customers would have told him if he was
placing any of them at risk is
an attempt to minimize the seriousness of his actions, and shows a reluctance
to admit wrongdoing. Tr.
247 - 48.
144. Petitioner's demeanor and testimony while under oath on the witness stand
indicates a reluctance for
him to take full responsibility for his actions and a reluctance to admit wrongdoing.
Tr. 237 - 69.
145. Petitioner believes that he helped some of his customers by dispensing
prescription medication
without authorization. I.G. Ex. 12.
146. Petitioner has dispensed prescription medication without authorization
on more occasions than have
been documented by the I.G.'s investigation. Tr. 253 - 54.
147. Petitioner does not fully comprehend or appreciate the seriousness of
his dispensing prescription
medication without authorization. FFCL 123 - 46.
148. The remedial purpose of section 1128 of the Act is to protect federally-funded
health care programs
and their beneficiaries and recipients from providers who have demonstrated
by their conduct that they
cannot be trusted to handle program funds or treat beneficiaries and recipients.
149. Petitioner has demonstrated a consistent pattern over almost four years
of dispensing prescription
medication without authorization. FFCL 39, 96, and 97; I.G. Ex. 3.
150. The financial loss to the Medi-Cal program resulting from Petitioner's
criminal misconduct amounted
to over $2246.27, a significant amount of money. Tr. 215 - 17; I.G. Ex. 1, 3.
151. The serious nature of Petitioner's conviction in State court is reflected
in the fact that he was placed
on probation for five years and ordered to pay fines totaling $5500. FFCL 29.
152. The serious nature of Petitioner's conduct is reflected by the State of
California placing his pharmacy
license on probationary status for a term of three years. FFCL 11 - 12.
153. Petitioner is not a trustworthy health care provider. FFCL 1 - 152.
154. A lengthy exclusion is needed in this case to satisfy the remedial purposes of the Act. FFCL 1 - 153.
155. The Secretary of the Department of Health and Human Services (the Secretary)
delegated to the I.G.
the authority to determine, impose and direct exclusions pursuant to section
1128 of the Act. 48 Fed. Reg.
21662 (1983).
156. The ten-year exclusion imposed and directed against Petitioner by the
I.G. is reasonable. FFCL 1 -
155.
The regulations published on January 29, 1992 do not apply to this case.
157. Regulations published on January 29, 1992 establish criteria to be employed
by the I.G. in
determining to impose and direct exclusions pursuant to sections 1128(a) and
(b) of the Act. 42 C.F.R.
Part 1001 (1992).
158. The regulations published on January 29, 1992 include criteria to be employed
by the I.G. in
determining to impose and direct exclusions pursuant to section 1128(a)(1) of
the Act. 42 C.F.R.
1001.102.
On January 22, 1993, the Secretary published a regulation clarifying that
the criteria to be employed by
the I.G. in determining to impose and direct exclusions pursuant to sections
1128(a) and (b) of the Act are
binding on administrative law judges, appellate panels of the Departmental Appeals
Board, and federal
courts in reviewing the imposition of exclusions by the I.G. 58 Fed. Reg. 5617,
5618 (1993) (to be
codified at 42 C.F.R. 1001.1(b)).
160. The regulations published on January 29, 1992 at 57 Fed. Reg. 3298 et
seq. (42 C.F.R. 1001 et seq.)
and January 22, 1993 at 58 Fed. Reg. 5617 - 5618 are not applicable to this
pending case (the I.G.'s
determination to exclude was dated July 22, 1991), since such application would
strip Petitioner
retroactively of rights vested prior to January 29, 1992. Tajammul H. Bhatti,
DAB 1415, at 12 (1993);
Behrooz Bassim, M.D., DAB 1333, at 5 - 9 (1992); Narinder Saini, M.D., DAB CR217
(1992), aff'd, DAB
1371 (1992); Charles J. Barranco, M.D., DAB CR187 (1992); Bruce G. Livingston,
M.D., DAB CR202
(1992); Syed Hussaini, DAB CR193 (1992).
161. My adjudication of the length of the exclusion in this case is not governed
by the criteria contained in
42 C.F.R. 1001.102. FFCL 157 - 60.
RATIONALE
1. Petitioner was "convicted" within the meaning of section 1128(i) of the Act.
Section 1128(i) provides: "For purposes of subsections (a) and (b) (of
section 1128 the Act), an individual
or entity is considered to have been "convicted" of a criminal offense
... when a plea of nolo contendere by
the individual or entity has been accepted by a Federal, State or local court...
." The record indicates, and
Petitioner does not dispute that, on April 20, 1990, Petitioner pled nolo contendere
to all three counts
contained in Information No. 28598, specifically, two misdemeanor counts of
unlawfully refilling a
prescription for a dangerous drug without authorization, and one felony count
of willfully and unlawfully
prescribing, administering, and dispensing Codeine to an habitual user. The
court accepted Petitioner's
plea. FFCL 27. Petitioner was therefore "convicted" of a criminal
offense as that term is defined in the
Act.
2. Petitioner was convicted of a criminal offense related to the Medicare or Medicaid programs.
Section 1128(a)(1) of the Act mandates the exclusion of individuals who have
been convicted of a criminal
offense related to the delivery of an item or service under the Medicare or
Medicaid programs.
Petitioner contends that the offenses to which he pled nolo contendere were
not related to the delivery of an
item or service under Medicare. On that basis, Petitioner contends that this
case should be governed by the
permissive exclusion provisions of section 1128(b)(3), not the mandatory exclusion
provisions of section
1128(a)(1) of the Act. 9/ Petitioner's argument is that while some of the unauthorized
prescription refills
were paid for by the Medi-Cal program, his conviction on the two misdemeanor
counts was related only to
those prescriptions he refilled on June 22, 1987 and September 28, 1987, and
the I.G. has not been able to
show that Medi-Cal paid for the prescriptions referenced in his conviction.
Petitioner alleges that the
patients themselves, and not the Medi-Cal program, paid for the specific prescriptions
at issue. P. Br. 9 -
15.
Petitioner contends that there is no evidence that establishes that the three
offenses for which he was
convicted relates to the delivery of a Medi-Cal item or service. With respect
to Count I of the Information,
he is correct. There is no evidence in the record from which I can conclude
that Petitioner's plea to the
felony charge of prescribing Codeine to an habitual user is program-related.
However, the I.G. has not
based Petitioner's exclusion on his conviction for prescribing Codeine to an
habitual user. Accordingly, I
can consider Petitioner's conviction for prescribing Codeine to an habitual
user only as it relates to
Petitioner's trustworthiness.
In analyzing whether Counts II and III are program-related, my analysis begins
with the court documents.
The court documents, on their face, do not establish that Petitioner's conviction
is program-related. Where
a conviction is not, on its face, program-related, my determination as to whether
a conviction is program-
related involves consideration of extrinsic evidence of all of the relevant
facts and circumstances
surrounding the conviction. Francis Craven, DAB CR143 (1991); DeWayne Franzen,
DAB 1165 (1990);
Carolyn Westin, DAB 1381, at 11 - 12 (1993).
Accordingly, I must look at all of the facts and circumstances surrounding
Petitioner's conviction to
determine whether it is program-related.
Petitioner's contention that his conviction for Counts II and III of the Information
is not program related is
without merit. Petitioner has not disputed that Medi-Cal recipients SV and GW
received unauthorized
refills from Petitioner on June 9, 1987 and September 14, 1987, respectively.
However, Petitioner has
contended that there is no evidence from which I can conclude that Petitioner
actually refilled prescriptions
on June 22 and September 28, 1987, or that he billed to, or was paid by, the
Medi-Cal program for those
prescriptions.
While the Information specifically mentions the dates of June 22 and September
28, it does so with the
qualifying phrase "on or about." Mr. Temmerman's testimony and the
record as a whole establish that the
actual refills on which the charges in Counts II and III of the Information
were based, and to which
Petitioner pled nolo contendere, occurred not on June 22 and September 28, 1987,
but rather on June 9 and
September 14, 1987. 10/ The June 22 and September 28, 1987 dates appearing in
the Information were
selected because they fall between the date Petitioner unlawfully refilled the
prescription and the date
Medi-Cal program paid the improper claims. These dates could conceivably be
the dates that Medi-Cal
authorized the payment for the unlawful prescriptions; however, there is no
information in the record that
ties either June 22 or September 28, 1987 to a specific event in the chain of
events which culminated with
the payment by Medi-Cal for the unauthorized refills referenced in the Information.
Mr Temmerman testified that when these types of charges are made against a
criminal defendant, the
prosecutor does not always know the date that the defendant submitted the claim
for reimbursement to the
Medi-Cal program. The prosecutor likely knows the date the claim was paid and
the date the pharmacist
dispensed the medication without authorization. Also, as Mr. Temmerman testified,
the prosecutor does
not always know the date that the Medi-Cal program relied on the defendant's
billing or the date that the
Medi-Cal program authorized payment of the claim submitted by the defendant.
Therefore, the prosecutor
customarily uses dates that may fall somewhere between the date the medication
was dispensed and the
date actual payment was made to the defendant by the Medi-Cal program. Tr. 214
- 17.
a. Count XIII of the Felony Complaint became Count II of the Information.
Count XIII of the original felony complaint charged that Petitioner did "willfully
and unlawfully and with
intent to defraud, present and cause to be presented to the State of California
for allowance or payment a
false and fraudulent Medi-Cal claim, to wit, number 716863255101 for services
rendered to beneficiary SV
on June 9 and June 22, 1987." I.G. Ex. 1. As Mr. Temmerman testified, pursuant
to a plea bargain
arrangement with Petitioner and his counsel, Count XIII of the felony complaint
was reduced to a
misdemeanor. I.G. Ex. 8; Tr. 211. As a result, Count XIII of the felony was
re-charged in Count II of the
Information. I.G. Ex. 8; Tr. 211. Count II of the Information states that "on
or about June 22, 1987,
[Petitioner] did refill a prescription for a dangerous drug for SV without authorization
from the original
prescriber." As Mr. Temmerman admitted, it would have been more appropriate
to have the Information
reflect the date that Petitioner actually refilled the prescription without
authorization. I.G. Ex. 8; Tr. 210 -
12. Instead, the person who drafted the Information chose a date that fell somewhere
between the time
Petitioner refilled the prescription without authorization and the time Medi-Cal
paid for the unauthorized
refill. I.G. Ex. 8; Tr. 210 - 14.
b. Count XV of the Felony Complaint became Count III of the Information.
Count XV of the original felony complaint charged that Petitioner did "willfully
and unlawfully with intent
to defraud, present and cause to be presented to the State of California for
allowance or payment a false
and fraudulent Medi-Cal claim, to wit, number 726630595001." I.G. Ex. 1.
Again, pursuant to a plea
bargain arrangement with Petitioner and his counsel, Count XV of the felony
complaint was reduced to a
misdemeanor and recharged as Count III in the Information. I.G. Ex. 8. Count
III of the Information states
that on or about September 28, 1987, Petitioner did refill a prescription for
a dangerous drug for GW,
without authorization from the original prescriber. Here again, Mr. Temmerman
admitted that it would
have been more appropriate had the Information reflected the date that Petitioner
actually refilled the
prescription without authorization. I.G. Ex. 8; Tr. 213 - 14. Again, the person
who drafted the Information
chose a date (September 28, 1987) that fell somewhere between the time Petitioner
refilled the prescription
without authorization and the time Medi-Cal paid for the unauthorized refill.
I.G. Ex. 8; Tr. 213 - 14.
In both instances, Petitioner was charged with a felony offense and subsequently
pled to a misdemeanor
charge based on the same set of underlying facts. However, on their face, the
documents of conviction do
not provide enough information to allow me to decide that Petitioner's convictions
for the two
misdemeanors are program-related. This is due, at least in part, to the fact
that Petitioner's attorney at the
criminal proceedings did not want his client to plead to a charge that, on its
face, was related to the Medi-
Cal program. Tr. 208, 220 - 22. Apparently, to that end, the charges in the
Information do not contain
specific references to the Medi-Cal program, whereas the charges in the Felony
Complaint do make
reference to the Medi-Cal program. I.G. Ex. 1. It is apparent from Mr. Temmerman's
testimony that
Petitioner's criminal attorney at the time of the plea bargain was well aware
of the possibility of a
subsequent administrative sanction and wanted to give his client a chance to
prevail. Tr. 220 - 22. 11/
c. Counts II and III of the Information are program-related.
My examination of the evidence submitted by the I.G. reveals that Petitioner
refilled two prescriptions for
SV on June 9, 1987. 12/ Petitioner was charged in Count XIII of the felony complaint
with submitting a
false claim number 7168634255101 for services rendered to recipient SV. Count
II of the Information
mentions SV, but does not contain any claim number. Mr. Temmerman testified
that he based the charges
contained in Count II in the Information on the same transaction that was documented
in Count XIII of the
felony complaint, namely the submission by Petitioner of Medi-Cal claim number
7168634255101. This
number, minus the last two digits, is the Medi-Cal claim control number that
appears in the pharmacy
services statement (claim for services) that was submitted by Petitioner to
the Medi-Cal program for
reimbursement, and for which Petitioner was ultimately reimbursed. 13/ I.G.
Ex. 7 at 1 - 4; Tr. 214 - 17.
Tracking the Medi-Cal claim number mentioned in Count XIII of the felony complaint,
the unrefuted
documentary evidence submitted by the I.G. shows that Petitioner provided a
prescription refill, number
095212, to SV on June 9, 1987. I.G. Ex. 7; Tr. 215. It establishes also that,
on June 16, 1987, Petitioner
submitted a claim for reimbursement to Medi-Cal for that same refill. I.G. Ex.
7 at 1; Tr. 215. Lastly, it
shows that on June 25, 1987, Medi-Cal authorized a check to be sent to Petitioner
for that same
unauthorized prescription refill and that Petitioner received reimbursement
for the refill of prescription
number 095212. I.G. Ex. 7 at 3 - 4; Tr. 216. 14/ Both at the hearing and in
an affidavit, Mr. Temmerman
specifically identified this documentation as that which he used to charge Petitioner
in Count II of the
Information. I.G. Ex. 8; Tr. 214 - 17.
The Medi-Cal claim control number listed in Count XV of the felony complaint
is 726630595001. Mr.
Temmerman testified that he based the charges contained in Count III in the
Information on the same
transaction that was documented in Count XV of the felony complaint, namely
the submission by
Petitioner of Medi-Cal claim number 726630595001, for the refill of GW's prescription.
This same claim
number (minus the last two digits), in conjunction with this particular Medi-Cal
recipient's name and Medi-
Cal number, appear in the pharmacy services statement (claim for services) that
was submitted by
Petitioner to the Medi-Cal program for reimbursement. 15/ I.G. Ex. 7 at 5; Tr.
214 - 17.
The unrefuted documentary evidence establishes that, on September 14, 1987,
Petitioner provided Medi-
Cal recipient GW with an unauthorized refill of her prescription. I.G. Ex. 1,
7 at 5 - 6. Petitioner
submitted a claim to Medi-Cal for reimbursement for that refill. I.G. Ex. 7
at 5 - 6. Mr. Temmerman
testified that Petitioner's September 14, 1987 unauthorized refill of GW's prescription
(contained in Count
XV of the felony complaint) was the specific transaction for which Petitioner
was charged in Count III of
the Information. I.G. Ex. 8; Tr. 216 - 17. Lastly, the documentary evidence
establishes that, on October 2,
1987, Medi-Cal issued a check to Plaza Pharmacy for the unauthorized refill.
16/ I.G. Ex. 7 at 6 - 8; Tr.
216 - 17.
Petitioner provided unauthorized refills of prescriptions to SV and GW on June
9 and September 14, 1987,
respectively. The I.G. has shown that both SV and GW were Medi-Cal recipients
on June 9, 1987 and
September 14, 1987, respectively. 17/ The I.G. has shown also that both SV and
GW were customers of
Plaza Pharmacy, where they both routinely had their Medi-Cal prescriptions refilled.
I.G. Ex. 5. The I.G.
has established that the Medi-Cal program reimbursed Petitioner for those same
refills by issuing checks to
Plaza Pharmacy. Petitioner has not disputed that he was the owner and operator
of Plaza Pharmacy. 18/
Additionally, the I.G. provided concise and pertinent testimony from the prosecuting
attorney in
Petitioner's criminal case. Moreover, Petitioner was ordered by the sentencing
court to pay restitution to
the Medi-Cal program in the amount of $2246.27. I.G. Ex. 1. This fact lends
additional support to Mr.
Temmerman's testimony that Counts II and III of the Information are program-related.
The record as a
whole provides the necessary link between the charges in Counts II and III of
the Information and the
unauthorized refills documented in I.G. Ex. 7 to establish that the transactions
in Counts II and III for
which Petitioner was convicted were program related.
An appellate panel of the Departmental Appeals Board (DAB) has held that an
offense is related to the
delivery of an item or service where there is a common sense connection between
an offense and the
delivery of an item or service under Medicare and Medicaid. Thelma Walley, DAB
1367, at 9 (1993),
citing Boris Lipovsky, M.D., DAB 1363 (1992). The evidence in this case, like
that in Walley, establishes
a common sense connection between Petitioner's criminal conviction and the delivery
of a Medicare item
or service. Petitioner was convicted of two counts of refilling a prescription
without authorization. The
persons for whom Petitioner refilled the prescriptions were Medi-Cal recipients
at the time. Petitioner
submitted the claims to, and was reimbursed by, the Medi-Cal program for those
same prescriptions.
Under the criteria enunciated in Walley, Petitioner's conviction is program-related.
It has been held also that "the submission of a bill or claim for Medicaid
reimbursement is the necessary
step, following the delivery of the item or service to bring the `item' within
the purview of the program."
Jack W. Greene, DAB 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F. Supp.
835 and 838 (E.D.
Tenn. 1990). In this case, Petitioner was convicted of two counts of refilling
a prescription without
authorization. The evidence establishes that Petitioner refilled prescriptions
for two Medi-Cal recipients
without authorization. Petitioner then submitted claims for reimbursement to
the Medi-Cal program for the
unauthorized refills. Accordingly, under the Greene analysis, Petitioner's criminal
conviction is program-
related.
Lastly, a criminal offense has been found to meet the statutory test where
either the Medicare or the
Medicaid program is the victim of the crime. Napoleon S. Maminta, M.D., DAB
1135 (1990). In this
case, the Medicaid program is one of the victims of Petitioner's crime. Through
Petitioner's criminal
actions, Medicaid (via Medi-Cal) reimbursed for unauthorized refills and Petitioner
received
reimbursement to which he was not entitled. Petitioner's refilling of the two
prescriptions in question
therefore victimized the Medi-Cal program by inducing it to pay for refills
that were unauthorized and
illegal.
The evidence taken in its entirety establishes that the offenses to which Petitioner
pled were related to the
Medi-Cal program. The record establishes that Petitioner submitted two bills
to Medi-Cal for two
unauthorized refills he provided to two Medi-Cal recipients. The two refills
that formed the basis for the
charges to which Petitioner pled guilty have been specifically identified by
the I.G. by reference numbers
on the Medi-Cal billing documentation. The record establishes also that Petitioner
received reimbursement
from the Medi-Cal program for the two unauthorized refills. As shown above,
the record supports that
Petitioner's criminal offense was program-related under any of three relevant
tests. Petitioner was therefore
convicted of a criminal offense within the meaning of section 1128(a)(1) of
the Act.
3. The parol evidence rule is not a bar to Mr. Temmerman's testimony.
Petitioner argues that Mr. Temmerman's testimony is not admissible because
of the parol evidence rule.
According to Petitioner, the parol evidence rule mandates that
extrinsic evidence is not admissible for the purpose of varying or contradicting
judicial or official
records or written instruments that dispose of property or that are contractual
in nature, and that are valid,
complete, unambiguous and unaffected by accident or mistake.
P. Br. at 13.
Petitioner contends that, as parol evidence, the testimony of Mr. Temmerman
is not admissible to explain
or elaborate upon Counts II and III of the Information. Petitioner's analysis
is not correct. First, in order
for the parol evidence rule to apply, the extrinsic evidence must be introduced
for the purpose of varying or
contradicting judicial records that are valid, complete, unambiguous, and unaffected
by accident or
mistake. However, Mr. Temmerman's testimony did not serve to contradict the
documents of conviction, it
merely elaborated upon them. The documents of conviction were, on their face,
somewhat ambiguous
because they contained the phrase "on or about."
Moreover, the conviction documents were "affected by accident or mistake"
because the specific dates
contained in them were not the dates Petitioner actually refilled the prescriptions.
Instead, the date
appearing in the Information were dates chosen that were somewhere between the
date the unauthorized
refill occurred and the date Medi-Cal paid for the drugs. Although the charges
in the Information contain
the phrase "on or about", the relatedness between Petitioner's misconduct
and Medi-Cal would be more
clearly seen if the dates on which Petitioner refilled the prescriptions had
appeared in the two misdemeanor
counts.
Mr. Temmerman's testimony established that the initial felony counts that were
filed against Petitioner
(Counts XIII and XV) contained both the refill and payment dates. When the plea
bargain arrangement
was reached with Petitioner, the refill date was not kept in the document, although,
according to Mr.
Temmerman, it should have been. To the extent that the refill dates should have
been included, the charges
against Petitioner were "affected by accident or mistake." Therefore,
by Petitioner's own definition, Mr.
Temmerman's testimony is not parol evidence because the documents were affected
by the accident or
mistake of inadvertently omitting the refill dates.
Second, Petitioner's objection to Mr. Temmerman's testimony assumes that my
authority in hearing and
deciding exclusion cases is limited solely to a review of the conviction documents.
This assumption is not
correct. Section 205(b) of the Act provides for a de novo hearing, under which
I can consider all relevant
evidence to determine whether a Petitioner should be excluded. In several decisions,
administrative law
judges and appellate panels reviewing those decisions have held that we are
not confined to a mere review
of the conviction documents in determining whether a petitioner's conviction
is program-related. Where a
conviction is not, on its face, program-related, my determination as to whether
a conviction is program-
related involves consideration of extrinsic evidence of all of the relevant
facts and circumstances
surrounding the conviction. Francis Craven, DAB CR143 (1991); DeWayne Franzen,
DAB 1165 (1990);
H. Gene Blankenship, DAB CR42 (1989); Carolyn Westin, DAB 1381, at 11 - 12 (1993).
Petitioner did not object to this evidence when it was offered at the hearing.
From the time he received the
I.G.'s witness list, approximately one month prior to the hearing, Petitioner
was on notice that the I.G.
would call Mr. Temmerman to testify. Petitioner also was on notice of the general
substance and nature of
the testimony the I.G. intended to elicit from Mr. Temmerman.
Third, Petitioner voiced no objection to the proposed testimony of Mr. Temmerman
at any time during the
prehearing process. Nor did Petitioner voice any objection to Mr. Temmerman's
testimony on the basis of
parol evidence at the hearing on September 15 and 16, 1992. Petitioner did not
mention this parol
evidence argument until he filed his post-hearing brief on December 3, 1992.
Therefore, Petitioner's
objection to Mr. Temmerman's testimony on the basis of parol evidence is untimely.
To permit Petitioner
to raise such an eleventh hour objection, where he had ample opportunity to
raise it earlier, would be unfair
and prejudicial to the I.G. in that there would be no opportunity to offer other
evidence in lieu of Mr.
Temmerman's testimony.
Accordingly, I conclude that Petitioner's objection to Mr. Temmerman's testimony
on the basis of parol
evidence is without merit and untimely.
4. The I.G. was required to exclude Petitioner for a minimum period of five years.
Petitioner argues that even if it is determined that he was convicted of a
program related offense, he is
subject to the permissive exclusion provisions of section 1128(b), not to the
mandatory exclusion
provisions of section 1128(a) of the Act. P. Br. 8 - 15. It is arguable that
Petitioner was convicted of a
criminal offense relating to the unlawful manufacture, distribution, prescription,
or dispensing of a
controlled substance, within the meaning of section 1128(b)(3) of the Act. However,
it is well settled that
if an individual or entity is convicted of a program-related offense under section
1128(a), the Secretary
must impose an exclusion under that section. Maminta at 14; Greene, DAB 1078,
at 9 - 11 (1989); Charles
K. Wheeler and Joan K. Todd, DAB 1123, at 6 - 7 (1990).
In Greene and Wheeler, an appellate panel of the DAB specifically found that
the I.G. has no discretion but
to impose an exclusion under the mandatory provisions of section 1128(a), even
where the petitioner's
offense arguably could be classified as a permissive exclusion. Greene at 9
- 11; Wheeler at 6 - 7. The
ALJ in Greene conceded that if the permissive exclusion provisions are read
in isolation, there are
instances in which they would literally encompass the offense for which a petitioner
was convicted. Jack
W. Greene, DAB CR56, at 13 (1989). However, both the ALJ and the appellate panel
interpreted the
presence of the mandatory exclusion provisions of section 1128(a) to mean that
the permissive exclusion
provisions apply only to instances where an individual has not been convicted
of a criminal offense related
to the delivery of a health care item or service under Medicare or Medicaid.
Greene DAB CR56, at 13
(1989); DAB 1078, at 9 - 10 (1989).
As I have determined that Petitioner's conviction is for an offense related
to the delivery of an item or
service under Medicaid, Maminta, Greene, and Wheeler support my holding that
the I.G. had no discretion
but to impose an exclusion of no less than five years upon Petitioner, pursuant
to sections 1128(a)(1) and
1128(c)(3)(B) of the Act.
5. Regulations published by the Secretary on January 29, 1992 are not applicable to this case.
On January 29, 1992, the Secretary published regulations (Parts 1001 - 1007)
(hereafter new regulations)
pertaining to his authority under the Medicare and Medicaid Patient and Program
Protection Act
(MMPPPA), Public Law 100-93, to exclude individuals and entities from reimbursement
for services
rendered in connection with the Medicare and Medicaid programs. 19/ These new
regulations also
included amendments to the civil money penalty authority of the Secretary under
the MMPPPA. For
purposes of this proceeding, the specific regulatory provisions relating to
mandatory exclusions under
section 1128(a)(1) of the Act (section 1001.102) and appeals of such exclusions
(Part 1005) must be
considered in terms of their applicability to this case.
The I.G. argues that the new regulations became effective upon publication on
January 29, 1992.
Petitioner argues that the new regulations should not be applied to this case
because his hearing request
was made prior to the publication of the new regulations. Tr. 143. Prior to
the new regulations, when
determining whether the length of an exclusion imposed and directed against
the party by the I.G. was
reasonable, administrative law judges usually evaluated an excluded party's
"trustworthiness" in order to
gauge the risk that party might pose in terms of the harm Congress sought to
prevent. Appellate panels of
the DAB have approved the use of the term "trustworthiness" as a shorthand
term for those cumulative
factors which govern the assessment of whether a period of exclusion imposed
by the I.G. is reasonable.
See, Hanlester Network, et al., DAB 1347, at 45 - 46 (1992); Bassim at 13.
The new regulations affect procedural and substantive changes with respect
to the imposition of exclusions.
42 C.F.R. Parts 1001 - 1007; 57 Fed. Reg. 3298 - 3358 (1992). For example, the
new regulations mandate
that, with regard to exclusions directed and imposed by the I.G. in accordance
with section 1128(a)(1) in
excess of the mandatory minimum five year period, only the specific factors
enumerated in section
1001.102(b) are to be considered a basis for lengthening the period of exclusion.
42 C.F.R. 1001.102.
Only if one or more of the aggravating factors listed in section 1001.102(b)
justifies an exclusion longer
than five years can the specific mitigating factors listed in section 1001.102(c)
be considered. 42 C.F.R.
1001.102(b). It is undisputed that the new regulations alter the substantive
rights of Petitioner, because
they limit the mitigating factors that can be considered in Petitioner's favor
and would bar Petitioner from
presenting evidence which is relevant to his trustworthiness to provide care.
20/ Such regulations also
affect the procedural rights of Petitioners in light of the limitations on the
authority of the ALJ to reduce to
zero an exclusion mandated by the I.G. See 42 C.F.R. 1005.4(c)(6).
I conclude that my review of the reasonableness of the exclusion imposed and
directed against Petitioner is
not governed by the criteria enumerated in the new regulations. The new regulations
substantially alter the
due process rights of Petitioners to have a full de novo review of the I.G.'s
determination to exclude them.
Bruce G. Livingston, D.O., DAB CR202 (1992) (Livingston); Charles J. Barranco,
M.D., DAB CR187
(1992) (Barranco); Syed Hussaini, DAB CR193 (1992); Steven Herlich, DAB CR197
(1992); Stephen J.
Willig, DAB CR192 (1992); Sukumar Roy, M.D., DAB CR205 (1992); Aloysius Murcko,
M.D., DAB
CR189 (1992); Narinder Saini, M.D., DAB CR217 (1992) (Saini); Tajammul H. Bhatti,
M.D., DAB
CR245 (1992); Anthony Accaputo, Jr., DAB CR249 (1993). An appellate panel of
the Departmental
Appeals Board (DAB) held they do not apply in cases involving exclusion determinations
made prior to the
regulations' publication date. Behrooz Bassim, M.D., DAB 1333, at 5 - 9 (1992).
This view was recently
reaffirmed by an appellate panel of the DAB in the case of Tajammul H. Bhatti,
M.D., DAB 1415, at 12
(1993).
In holding that the new regulations were inconsistent with prior DAB decisions
on the scope of review and
the length of an exclusion and in holding that the new regulations represent
substantive changes in the law,
the appellate panel in Bassim noted the distinction between the effective date
of a new regulation and the
permissible effect of a regulation. Bassim at 6. The panel held that the new
regulations were inconsistent
with prior DAB decisions on the scope of review and the length of an exclusion
and that the new
regulations represent substantive changes in the law. Bassim at 6 - 7. The panel
determined that the
Secretary did not intend to retroactively alter the substantive rights of petitioners
with the new regulations.
Bassim at 8 - 9.
The panel cited several rationales to support its determination that the new
regulations were not to be
applied retroactively to cases where the petitioner had been excluded prior
to January 29, 1992. The panel
noted that the concept of retroactivity is not favored in law and that the agency's
authority to promulgate
rules having a retroactive effect must be granted expressly by Congress. Bassim
at 6. Moreover, the panel
noted also that even with such a statutory grant of authority, the agency's
rules will not be applied
retroactively unless their language clearly requires this result. Bassim at
6.
Congress did not authorize the Secretary to promulgate rules having a retroactive
effect, and there was no
statement by the Secretary that the new regulations were intended to apply retroactively
to achieve
substantive changes. In the panel's view, if the Secretary had intended to effect
substantive changes in
pending cases, this intent would have been expressly stated given the resultant
administrative
complications in the appeals process as well as the potential prejudice to petitioners.
Bassim at 7. The
panel held that parts of the new regulations which affect substantive changes
may be applied only to cases
in which the I.G.'s Notice of Intent to Exclude, Notice of Exclusion, or Notice
of Proposal to Exclude is
dated on or after January 29, 1992. Bassim at 9.
I further conclude that it was not the Secretary's intent to retroactively
apply the new regulations to
unlawfully strip parties, including Petitioner, of previously vested rights.
Therefore, the new Part 1001
regulations were not intended to apply to cases pending as of the date of their
publication (assuming they
establish criteria for administrative review of exclusions). I have previously
addressed this issue in depth
in my decisions in Barranco at 16 - 27 and Livingston at 8 - 10. ALJ Steven
T. Kessel has addressed this
issue in depth in his decision in Saini at 11 - 19. For purposes of this case,
I incorporate the rationale in
Barranco, Livingston, and Saini that Petitioner's de novo hearing rights would
be substantially adversely
affected and it would be manifestly unjust to retroactively apply the January
29, 1992 regulations.
6. A clarification of the new regulations is not applicable to my determination in this case.
On January 22, 1993, the Secretary published a clarification of the January
29, 1992 regulations (hereafter
referred to as clarification) that purported to make the regulations of Part
1001:
applicable and binding on the Office of Inspector General (OIG) in imposing
and proposing
exclusions, as well as Administrative Law Judges (ALJs), the Departmental Appeals
Board (DAB), and
federal courts in reviewing the imposition of exclusions by the OIG (and, where
applicable, in imposing
exclusions proposed by the OIG).
42 C.F.R. 1001.1; 58 Fed. Reg. 5618 (1993).
This clarification was to be applied to "all pending and future cases
under this authority." Id. The
Secretary waived the proposed notice and public comment period specified by
the Administrative
Procedure Act pursuant to the exception for "interpretive rules, general
statements of policy or rules of
agency organization, procedure or practice" at 5 U.S.C. 553(b)(A). Id.
Moreover, the Secretary stated
that this clarification "does not promulgate any substantive changes to
the scope of the January 29, 1992
final rule, but rather seeks only to clarify the text of that rulemaking to
better achieve our original intent."
Id.
At the time he signed the clarification on December 18, 1992, Secretary Sullivan,
or those to whom he
entrusted the drafting of the clarification, must be assumed to have been aware
of the DAB appellate
panel's decision in Bassim, which was issued on May 28, 1992. More importantly,
the DAB is delegated
authority to make final interpretations of law on behalf of the Secretary upon
review of ALJ decisions.
Gideon M. Kioko, M.D., DAB CR256 (1993). Thus, in effect the DAB appellate panel
was speaking for
the Secretary when it concluded that the new regulations were not to apply retroactively
to cases pending
prior to promulgation of the new regulations. It gave its rationale as follows:
In our view, if the Secretary had intended to effect substantive changes in
pending cases, this
intent would have been expressly stated since this effect would create administrative
complications in the
appeals process, as well as potential prejudice for petitioners.
* * * * *
In sum, absent specific instructions in the Act or the preamble to the 1992
Regulations directing that
they apply to pending cases, we conclude that the Secretary did not intend to
alter a petitioner's substantive
rights in such fundamental ways as suggested by the I.G. We also conclude that
portions of the 1992
Regulations which change substantive law may permissibly be applied only to
cases in which the I.G.'s
Notice of Intent to Exclude, Notice of Exclusion, or Notice of Proposal to Exclude
is dated on or after
January 29, 1992.
Bassim at 7 - 9.
Contrary to expressly stating his intent or providing specific instructions
directing that the new regulations
apply retroactively to cases pending prior to January 29, 1992, the Secretary
emphasized that such
regulation did not make "any substantive changes" to the "scope"
of the new regulations. 58 Fed. Reg.
5618. No other conclusion can be reached but that in the clarification the Secretary
did not modify the
appellate panel decision in Bassim, which held that the new regulations do not
apply to cases pending prior
to January 29, 1992. This case was pending as of that date.
At my request, the parties filed supplemental briefs to address the applicability
and impact of the new
regulations on this case. I deemed this especially necessary since the parties
had prepared for this hearing
under the assumption that the case would be heard and decided under the trustworthiness
standard. It was
not until several months after the September 15, 1992 hearing, on January 22,
1993, that the clarification
was published.
The parties were specifically asked whether they wished to submit additional
evidence in light of the
clarification. Both parties declined, but requested that they be given an opportunity
to brief the issue of the
applicability and effect of the new regulations and the clarification on this
case.
Petitioner contends that if I decide this case under the framework enunciated
in the clarification, it would
constitute an unlawful retroactive application of the regulations against him.
Petitioner contends that it
would violate his rights to a de novo hearing, because my determination would
be reduced to little more
than a review of whether the I.G. properly exercised his discretion in deciding
to exclude him. Petitioner
contends also that the clarification is void because it was issued without proper
Secretarial authority.
Petitioner notes that Secretary Louis Sullivan is listed as the approving authority
of the clarification.
Petitioner avers that on January 22, 1993, Dr. Sullivan no longer had the authority
to make and publish
rules and regulations pursuant to 42 U.S.C. 1302.
Petitioner argues also that the I.G. does not have the authority to issue regulations,
because an April 18,
1983 delegation of authority to the I.G. from the Secretary specifically denies
the I.G. the authority to issue
regulations. Petitioner asserts that, although the I.G. contends that the clarification
is merely an
interpretive rule and therefore not subject to the notice and comment provisions
of the Administrative
Procedure Act (5 U.S.C. 552(a)), the clarification alters substantive rights
and as such is not an
interpretive rule. Petitioner contends that interpretive rules cannot substantively
alter rights and
obligations. Lastly, Petitioner contends that the clarification was issued in
direct violation of (Director of
the Office of Management and Budget) Leon Panetta's January 22, 1993 Memorandum
(58 Fed. Reg.
6074-01, January 25, 1993). According to Petitioner, Mr. Panetta's Memorandum
mandated a temporary
moratorium on new regulations. For all the above stated reasons, Petitioner
moves that I strike the
clarification as illegal and invalid. P. S. Br. 2 - 3.
The I.G. contends that I am bound to apply the clarification in my determination
because it specifically
states in the clarification that it applies to all pending cases. The I.G. contends
that this is a pending case
within the plain meaning of the word and accordingly takes the position that
the clarification is controlling
in my determination in this case. The I.G. contends also that the clarification
was properly issued under
the authority of the Secretary because on December 18, 1992, then Secretary
Louis Sullivan approved the
clarification that was subsequently published on January 22, 1993. The I.G.
avers that the clarification was
not in conflict with Director Panetta's January 22, 1993 Memorandum, because
the clarification was filed
for publication in the Federal Register at 8:45 a.m. on January 21, 1993, although
it was not actually
published until January 22, 1993. The Panetta Memorandum was filed for publication
on January 22,
1993, at 12:05 p.m., although it was not actually published until January 25,
1993. Moreover, the I.G.
contends that the Panetta Memorandum creates no right or standing of private
parties to avoid the
application of regulations.
In response to Petitioner's arguments that the clarification was an improper
exercise of authority by the
I.G., the I.G. maintains that I cannot address this issue because I do not have
the authority to invalidate
statutes or regulations.
Petitioner's arguments with regard to the validity and legality of the clarification
in effect are arguments
that, if successful, would require me to find that the clarification is ultra
vires the Act. It is well settled that
I do not have the authority to make such a determination. David S. Muransky,
DAB CR95 (1990), aff'd
DAB 1227 (1991); Hanlester Network, et al., DAB CR181 (1992); Charles J. Barranco,
DAB CR187
(1992).
Accordingly, because I do not have the authority to hold the clarification
ultra vires the Act, I do not admit
the three exhibits that Petitioner submitted in conjunction with his March 23,
1993 supplemental brief,
because these exhibits, if at all relevant, would be relevant only as to the
issue of whether the clarification
was ultra vires.
Since the January 29, 1992 regulations lacked retroactive effect for the reasons
stated in Bassim, they could
not have acquired such effect with subsequent textual clarifications that do
not purport to modify the scope
of the January 29, 1992 regulations and have been published without satisfying
the procedures necessary
under the Administrative Procedure Act for effecting substantive changes. Accordingly,
neither the
January 29, 1992 regulations or the subsequent January 22, 1993 clarification
is controlling upon my
determination in this case, where the notice of exclusion issued on July 22,
1991, well in advance of the
publication of the new regulations on January 29, 1992 or the clarification
on January 22, 1993.
7. A ten year exclusion is appropriate and reasonable.
Since the minimum mandatory exclusion of five years is applicable to Petitioner,
the issue before me is
whether the I.G. is justified in excluding Petitioner for ten years. Resolution
of this issue depends on
analysis of the evidence of record in light of the remedial purposes of the
Act. Lakshmi N. Murty Achalla,
M.D., DAB 1231 (1991); Joel Davids, DAB 1283 (1991); Robert Matesic, R.Ph.,
d/b/a Northway
Pharmacy, DAB 1327 (1992). 21/
Congress enacted the exclusion law to protect the integrity of federally funded
health care programs.
Among other things, the law is designed to protect program beneficiaries and
recipients from individuals
who have demonstrated by their behavior that they threaten the integrity of
federally funded health care
programs or that they could not be entrusted with the well-being and safety
of beneficiaries and recipients.
S. Rep. No. 109, 100th Cong., 1st Sess. 1 (1987), reprinted in 1987 U.S.C.C.A.N.
682, 682.
An exclusion imposed and directed pursuant to section 1128 of the Act advances
this remedial purpose.
The principal purpose is to protect programs and their beneficiaries and recipients
from untrustworthy
providers until the providers demonstrate that they can be trusted to deal with
program funds and to
properly serve beneficiaries and recipients. As an ancillary benefit, the exclusion
deters other providers of
items or services from engaging in conduct which threatens the integrity of
the programs or the well-being
and safety of beneficiaries and recipients. H. R. Rep. No. 393, Part II, 95th
Cong., 1st Sess. 69 (1977),
reprinted in 1977 U.S.C.C.A.N. 3039, 3072.
My purpose in hearing and deciding the issue of whether an exclusion is reasonable
is not to substitute my
judgment for that of the I.G., but to decide whether the length of the exclusion
imposed by the I.G. was
extreme or excessive. 48 Fed. Reg. 3744 (1983); Abelard A. Pelaez, M.D., DAB
CR157, at 14 - 15
(1991); Barranco at 29 - 30.
An exclusion is extreme or excessive to the extent it does not protect the
programs and their beneficiaries
and recipients from untrustworthy providers. An exclusion is also extreme or
excessive when it does not
serve to deter other providers from engaging in conduct that threatens the programs
or the well-being and
safety of program beneficiaries and recipients.
An appellate panel in The Hanlester Network, et al., DAB 1347 (1992) restated
the Departmental Appeals
Board's view of considerations used in evaluating trustworthiness:
- the circumstances of the misconduct and the seriousness of the offense,
in particular the commission
of misconduct in the nature of a program-related crime, see [The Hanlester Network,
et al,] DAB 1275, at
52 [(1991)];
- 'the degree to which a [Petitioner] is willing to place the programs in
jeopardy,' even if no actual harm
is accomplished, id. at 52; [footnote omitted]
- the failure to admit misconduct, or express remorse, or evidence rehabilitation,
see e.g., Olufemi
Okonuren, M.D., DAB 1319, at 13 (1992); Robert Matesic R.Ph. d/b/a Northway
Pharmacy, DAB 1327, at
12 (1992); and
- the `likelihood that the offense or some similar abuse will occur again,' see e.g., Matesic, at 8.
Hanlester DAB 1347, at 46 - 7.
In applying these factors to determine when a provider should be trusted and
allowed to reapply for
participation in the federally-funded health care programs, the totality of
the circumstances of each case
must be evaluated in order to reach a determination regarding the appropriate
length of an exclusion. My
authority as an ALJ in these proceedings includes the authority to review all
of the evidence on the
reasonableness of an exclusion. Robert Matesic, R.Ph., d/b/a/ Northway Pharmacy,
DAB 1327 (1992).
Specifically, since the reasonableness of an exclusion turns on the length of
time necessary to establish that
a provider is not likely to repeat the type of conduct which precipitated the
exclusion, I must evaluate all
factors relevant to that issue. Matesic at 12. These include the following:
the nature of offenses committed by Petitioner, the circumstances surrounding
the offense,
whether and when Petitioner sought help to correct the behavior which led to
the offense, how far the
provider has come toward rehabilitation, and any other factors relating to the
provider's character and
trustworthiness.
Matesic at 12. I have done this with respect to Petitioner and I have reached
the following conclusions
regarding his trustworthiness to be a program provider.
Petitioner's criminal misconduct was serious. He pled nolo contendere to three
separate criminal charges,
two involving the unauthorized refill of prescriptions and one involving dispensing
Codeine to an habitual
user. Petitioner's conviction for the two counts of refilling prescriptions
without authorization are
misdemeanors and Petitioner's conviction for unlawfully dispensing codeine to
an habitual user is a felony.
22/ Petitioner was given a suspended sentence of incarceration for 90 days on
each of the misdemeanor
counts and one year on the felony count. Petitioner was fined a total of $5500
and required to pay
$2246.27 in restitution to the Medi-Cal program. FFCL 29. Although Petitioner's
terms of incarceration
were suspended by the sentencing court, the fact that he was sentenced to incarceration,
even on the
misdemeanor offenses, supports the notion that the sentencing court believed
the offenses for which
Petitioner was convicted were serious. Moreover, Petitioner was required to
pay $7746.27 in fines and
restitution, a significant amount by any standard, and further evidence that
the sentencing court viewed
Petitioner's convictions as serious offenses.
Petitioner admitted to the California Board of Pharmacy that, on more than
800 occasions over a period of
approximately four years, he had dispensed prescription medication without authorization.
FFCL 7. Such
conduct was improper and a violation of Petitioner's professional duties as
a pharmacist. FFCL 92 - 94, 97.
The seriousness of Petitioner's conduct is manifested by the fact that the California
Board of Pharmacy
revoked Petitioner's pharmacy license and permit. FFCL 13. The revocation of
Petitioner's pharmacy
license and permit was suspended, Petitioner was suspended from the practice
of pharmacy for 45 days,
and he was placed on probation for three years. FFCL 12. Under the standards
enunciated in both
Hanlester and Matesic, Petitioner's misconduct is indicative of a lack of trustworthiness.
8. Petitioner, without authorization, dispensed addictive drugs to his customers.
Petitioner's conduct in dispensing addictive prescription medication without
authorization subjected his
customers to numerous serious medical and physiological risks. Petitioner was
convicted of the felony of
dispensing Codeine to an habitual user. This activity, while not related to
the delivery of a Medicare or
Medicaid item or service, was a violation of his duties as a pharmacist and
subjected the customer to the
risks associated with drug addiction. FFCL 21, 27, 31, 62 - 63, 85 - 88, 91
- 94, and 105.
Petitioner, without the appropriate or required authorization, provided drugs
to or refilled prescriptions for
LC for the drug Meprobamate, a Schedule IV sedative, from July 31, 1984 through
January 26, 1987.
FFCL 62, 71, and 74. As a direct result of Petitioner's actions, LC received
the drug Meprobamate, which
is used for the short term alleviation of the symptoms of anxiety disorders,
for a period of almost two and
one-half years. In doing so, he subjected LC unnecessarily to risks of addiction
and deleterious side
effects. FFCL 62, 71 - 72, and 74.
For a period of over one year, Petitioner, without authorization, simultaneously
filled and refilled
prescriptions for the drugs Talwin, Meprobamate and Acetaminophen with Codeine
for LC. FFCL 76. As
the I.G.'s expert testified, there is no legitimate medical reason for a person
to simultaneously to be
receiving these drugs in conjunction with one another, unless the person has
cancer. FFCL 77. There was
no evidence in the record from which I could conclude that LC had or has cancer.
FFCL 78.
In providing (Acetaminophen with) Codeine, Meprobamate, and Talwin to LC, Petitioner
subjected her to
risks from the serious additive depressant effect this combination of drugs
has on the central nervous
system. Tr. 139 - 42. 23/ The testimony of Supervising Inspector Raymond Tom,
who possesses a
doctorate of pharmacy, appearing on behalf of the I.G., indicates that, in providing
three addictive and
potentially dangerous drugs simultaneously to LC, Petitioner was supplying a
person he knew or should
have known was an addict. Tr. 139 - 42.
Also, Dr. Tom testified regarding Petitioner's dispensing the drug Talwin to
LC from August 28, 1984
through February 13, 1987. Dr. Tom's testimony demonstrates that the duration
and manner in which
Petitioner provided Talwin to LC subjected her to risks from addiction. Tr.
139 - 42. Dr. Tom testified
that, based solely on the duration of time over which LC was receiving Talwin
and Meprobamate from
Petitioner, Petitioner should have known that his actions were serving to maintain
her addiction to these
drugs. Tr. 139 - 42. Moreover, Petitioner violated his duties as a pharmacist
by dispensing Codeine,
Meprobamate, and Talwin to LC without authorization. FFCL 76, 92 - 94.
Petitioner subjected Cl to risks also by providing her with 111 unauthorized
refills of the drug Talwin. I.G.
Ex. 3 at 16 - 17. According to Dr. Tom, by providing these unauthorized refills
to Cl, Petitioner was
accommodating a person who was developing an addiction to the drug. Tr. 137
- 38. This interpretation is
further supported by the fact that Talwin is such a widely abused drug that
doctors are reluctant to
prescribe it. Again, this conduct was a violation of Petitioner's duties as
a pharmacist and subjected Cl to
the risks of drug addiction and deleterious side effects from the drug Talwin.
FFCL 62, 64 - 65, 82 - 85,
89, and 92 - 94.
In another instance, Petitioner dispensed the drug Butisol Sodium without authorization.
Again, Petitioner
did so for periods of time that far exceeded the medically approved usage of
the drug. FFCL 66 - 70. In
doing so, he subjected the customer to the risks of addiction and the accompanying
painful withdrawal
symptoms. FFCL 62, 66 - 71, and 85. Also, in dispensing Butisol Sodium without
authorization, he did so
in direct contradiction of his professional duties as a pharmacist. FFCL 89,
92 - 94.
Lastly, Petitioner subjected customer M to the risk of deleterious side effects
and addiction from the drug
Phenergan with Codeine. Tr. 144. According to Dr. Tom, Phenergan with Codeine
is used primarily to
alleviate the symptoms of a cold and is typically prescribed for a two week
period. FFCL 80; Tr. 144 - 45.
The evidence shows that Petitioner provided 120 unauthorized refills of Phenergan
with Codeine to M. Tr.
144 - 145. Phenergan with Codeine is a Schedule V narcotic. 24/ Dr. Tom's testimony
indicated that this
number of refills is an excessive amount and that the excessive number was evidence
that M was abusing
the medication. Dr. Tom testified further that there was no legitimate medical
purpose for Petitioner to
have provided Phenergan with Codeine to this customer in these amounts and over
this length of time.
Petitioner's counsel attempted to get Dr. Tom to admit that a physician would
prescribe Phenergan with
Codeine for an extended period of time for anyone with a chronic cough. However,
while Dr. Tom
acknowledged it was possible this could happen, he stated that it was unlikely,
because anyone prescribing
this medication would take into account the adverse side effects and risk of
addiction associated with the
use of this drug over a long period of time. As a pharmacist, it was Petitioner's
obligation to know and
inform his customers of the adverse side effects of medications. FFCL 86 - 88.
In this instance, the record indicates that Petitioner violated his duties
as a pharmacist by providing 120
unauthorized refills of Phenergan with Codeine to M. 25/ FFCL 79. There is no
evidence from which I
can conclude that Petitioner warned M about the dangers of driving and operating
heavy machinery
associated with the use of Phenergan with Codeine, nor is there any evidence
in the record that there was a
legitimate medical purpose for Petitioner to have provided M with this medication.
FFCL 79 - 81. This is
especially true given the length of time that Petitioner provided this medication
to M. All of these factors
are indicative that, with respect to M, Petitioner violated his duties as a
pharmacist. Additionally,
Petitioner's conduct subjected M to the risks of addiction and adverse side
effects associated with the long
term use of Codeine. FFCL 62, 63, 79 - 81, and 85.
Under both the Hanlester and Matesic analyses, Petitioner's providing addictive
drugs in the manner
described above is indicative of his lack of trustworthiness. Petitioner has
demonstrated that he is more
than willing to place the programs in jeopardy. Petitioner has demonstrated
also that, although he was not
criminally convicted in all of the instances in which he provided addictive
drugs to customers, his conduct
was clearly serious, jeopardized the health of his customers, and subjected
them to the risks of drug
addiction and the accompanying painful withdrawal symptoms.
9. Petitioner, without authorization, dispensed non-addictive drugs to customers.
Petitioner subjected some of his customers to serious risks by dispensing non-addictive
drugs without
authorization. It would be improper and a serious violation of his duty as a
pharmacist for Petitioner to
dispense any prescription medication without a doctor's order. It was an even
more serious violation of
that duty here because Petitioner improperly dispensed medication that exposed
his customers to
potentially harmful side effects.
In one instance, Petitioner dispensed without authorization the contradictory
and the potentially harmful
combination of the drugs Hydrochlorothiazide and Dyazide for the same customer.
FFCL 48, 98 - 100. As
Dr. Tom testified, the drugs Hydrochlorothiazide and Dyazide are both diuretics
that are used in the
treatment of high blood pressure. Using these two drugs in combination is not
logical because Dyazide
contains an ingredient that is supposed to counteract Hydrochlorothiazide. Tr.
129 - 30. Both drugs can
cause the same deleterious side effects of dizziness and mental confusion. These
two drugs also cause the
alteration of potassium levels in the body, which can lead to irregular heartbeat.
FFCL 40, 46. Therefore,
by dispensing Hydrochlorothiazide and Dyazide without authorization simultaneously
to the same
customer, Petitioner did something that was not only medically illogical but
subjected the customer to
dangerous side effects.
In other instances, Petitioner dispensed prescription medication without authorization
in such a manner that
the customers were subjected to danger because they were not receiving appropriate
and necessary medical
monitoring. Petitioner violated standard medical practices and subjected his
customers to potential danger
by providing them with medications that altered their blood chemistry and electrolytes,
knowing that they
were not receiving lab tests that would have established and maintained the
appropriate dosage. FFCL 39 -
57, and 102 - 03.
Moreover, the record indicates that Petitioner subjected his customers to deleterious
side effects by
dispensing non-addictive drugs without authorization. These side effects include
fainting, dizziness,
cardiac arrest, irregular heartbeat, increased heartbeat, mental confusion,
asthma, gastrointestinal bleeding,
low blood pressure, and increased likelihood of bleeding. FFCL 39, 40, 42, 44,
46, 49, 50, 53, 54 - 57. By
dispensing these medications without authorization, Petitioner not only subjected
his customers to these
unpleasant and potentially dangerous side effects, he violated his duties as
a pharmacist. FFCL 39 - 57, 92
- 96.
Dr. Tom testified that, in cases where a patient is receiving Dyazide, Inderal,
Hydrochlorothiazide,
Hydralazine (Apresoline), Tenormin, Potassium HCL, or Aldactazide, standard
practice dictates that the
patient receive periodic laboratory testing to determine, monitor, and maintain
appropriate levels of
essential blood chemicals. FFCL 41, 43, 45, 47, 51, 52, 54, 56. Had these medications
been dispensed
with proper authorization, the standard practices which accompany such authorization
could have afforded
the required protection for Petitioner's customers.
Standard practice with regard to the administration of the drug Dyazide includes
testing of the person's
blood in a laboratory to check the patient's potassium levels. The testing should
be performed twice
weekly for the first month the patient is undergoing treatment with Dyazide,
then twice yearly after that
time. FFCL 41. The same practices apply to patients receiving the drug Hydrochlorothiazide.
FFCL 47.
A patient undergoing treatment with Aldactazide should receive laboratory tests
to check potassium levels.
These tests should be administered twice weekly for the first month, and twice
annually after that. FFCL
41 and 54.
Standard practice for treating patients with Hydralazine (Apresoline) involves
periodic monitoring of the
patient's blood pressure and heart rate. FFCL 50 - 52. For the treatment of
patients with the drugs Inderal
and Tenormin, standard practice includes monitoring of potassium levels and
kidney function. FFCL 43,
45. Patients receiving Hydralazine should receive periodic monitoring of blood
pressure and heart rate.
FFCL 51. Patients receiving Potassium HCL should receive laboratory blood testing
to establish and
maintain the correct potassium level. FFCL 56.
Petitioner, without authorization, dispensed Dyazide, Inderal, Hydrochlorothiazide,
Hydralazine
(Apresoline), Tenormin, Potassium HCL, and Aldactazide. FFCL 39. The appropriate
care for patients
undergoing treatment with these seven drugs involves follow-up medical monitoring
and blood testing.
Petitioner does not challenge Dr. Tom's testimony that only a physician can
order laboratory tests.
Petitioner is not a physician and therefore could not authorize laboratory testing
for any of his customers.
Petitioner took it upon himself to provide customers with these seven drugs
without authorization. Since
no physician authorized Petitioner to fill or refill a prescription for these
seven drugs in the instances
documented, there was no physician to authorize medical follow-up and laboratory
testing for patients
receiving these medications.
Standard practice for patients being treated with Dyazide, Inderal, Hydrochlorothiazide,
Hydralazine
(Apresoline), Tenormin, Potassium HCL, and Aldactazide requires follow-up medical
monitoring and
blood testing. By dispensing these medications without authorization, Petitioner
denied his customers the
protection afforded by the standard practice and subjected them to such risks
as irregular heartbeat,
dizziness, mental confusion, fainting, asthma, cardiac arrest, and tachycardia
(rapid heart rate). FFCL 40,
42, 44, 46, 49, 50, 53, 55, 57. Without laboratory testing, Petitioner had no
way of knowing or establishing
appropriate dosages or appropriate levels of vital chemicals, such as potassium,
in his customers. The
result is that Petitioner's practices not only violated his duties as a pharmacist,
but subjected his customers
to serious risks from deleterious side effects. Additionally, because Petitioner
provided these seven
medications without authorization, he removed any input, advice, or experience
that a physician may have
been able to bring to the treatment of the person receiving the medication.
Also, Petitioner denied his customer the benefit of the standard practice by
dispensing the drug Naproxen
without authorization. As Dr. Tom testified, it is well documented that Naproxen
carries with it a
substantial risk of gastrointestinal bleeding. Standard practice for the treatment
of any patient with
Naproxen includes either instructing the patient to be alert to signs indicative
of gastrointestinal bleeding or
conducting follow-up medical testing to monitor the levels of iron and red blood
cells present in the
patient's blood. FFCL 59 - 60. The record is devoid of evidence that Petitioner
instructed the customer to
be alert to signs indicative of gastrointestinal bleeding. Since Petitioner,
as a pharmacist, does not have the
authority to order medical testing, the customer did not receive any follow-up
testing.
Petitioner subjected his customers also to other risks. For example, in refilling
a prescription for the ulcer
medication Tagamet 45 times without authorization, Petitioner subjected a customer
to the risk of loss of
balance and spatial confusion. FFCL 110 - 11. Lastly, Petitioner subjected a
customer to an increased risk
of bleeding and low blood-pressure by unauthorizedly providing the drug Persantine
(Dipyridamole) for
over three years. FFCL 106.
Petitioner jeopardized the health and safety of his customers by providing
them with non-addictive
medications without authorization. These actions were also a violation of Petitioner's
duties as a
pharmacist. Under Hanlester and Matesic, this conduct is indicative of Petitioner's
lack of trustworthiness
and supports the ten-year exclusion.
10. Petitioner's improper conduct was serious.
Under the Hanlester and Matesic guidelines cited above, Petitioner's criminal
conduct in refilling
prescriptions without authorization was serious and involved a significant amount
of money. The
seriousness of Petitioner's offense is reflected in that Petitioner was compelled
to pay $2246.27 in program
restitution, $5500 in fines, and was sentenced to suspended terms of incarceration,
for 90 days and one
year. Further evidence of the seriousness of Petitioner's criminal conduct is
that one of the offenses for
which he was convicted, i.e. willfully and unlawfully prescribing, administering,
and dispensing Codeine
to an habitual user, was a felony. More importantly, the evidence shows Petitioner's
criminal offenses to
be serious because, in committing these offenses, Petitioner subjected GW and
SV to risks by refilling
prescriptions without the consent and authorization of a physician. Also, Petitioner
subjected LC to the
health risks associated with drug addiction. All three of Petitioner's criminal
convictions involved
violations of his professional duties as a pharmacist.
The California State Board of Pharmacy deemed Petitioner's pattern of conduct
serious enough to suspend
Petitioner from the practice of pharmacy for 45 days and place him on probation
for three years. FFCL 11,
12. Under the Hanlester criteria, these factors are relevant to show both the
circumstances of Petitioner's
misconduct and the degree to which Petitioner is willing to place the programs
in jeopardy. Under
Matesic, Petitioner's pattern of conduct is relevant as part of the circumstances
surrounding the offense and
is a factor relating to Petitioner's overall trustworthiness.
While Petitioner was criminally prosecuted and convicted for only three offenses,
his pattern of conduct
indicates a willingness to place the programs and the health of his customers
in jeopardy. Petitioner
dispensed medication without authorization or refilled a prescription without
authorization over 800 times
for almost a four year period. The record contains insufficient evidence for
me to conclude whether, at the
time of these activities, all of the customers receiving the unauthorized drugs
were program recipients.
However, in at least two instances, the record shows that Petitioner was convicted
of offenses related to the
delivery of an item or service under Medicaid. Thus, I conclude that Petitioner
was indifferent to the
damage to the program caused by his actions. Not all of Petitioner's unauthorized
activities were purposely
directed at the program. However, Petitioner has shown a propensity to commit
serious offenses with little
regard for the safety of his customers or the integrity of the programs. This
is demonstrated by the fact that
in dispensing seven non-addictive drugs without authorization, Petitioner subjected
his customers to
serious risks from the lack of follow-up laboratory testing and medical monitoring.
In one instance,
Petitioner dispensed an irrational combination of drugs. In the other six instances,
Petitioner's actions
deprived his customers of the standard care practices for persons undergoing
treatment with these drugs
and he did not warn them of potential side effects. In each of these seven instances,
Petitioner violated his
duties as a pharmacist.
11. Petitioner failed to admit misconduct, express remorse, evidence rehabilitation,
or seek help to
correct the behavior which led to the offense.
Under the Board's Hanlester analysis, an additional criterion for assessing
Petitioner's trustworthiness is the
failure to admit misconduct, express remorse, or evidence rehabilitation. Under
Matesic, the relevant facts
center on whether and when Petitioner sought help to correct the behavior which
led to the offense. There
is no evidence in the record from which I can conclude that Petitioner received
or sought to obtain
rehabilitation for the conduct that resulted in his misdeeds. Petitioner contends
that the fact he continues to
make restitution payments in accordance with the trial court's sentencing should
be considered in his favor.
However, the fact that Petitioner is complying with the court's order after
he pled no contest to criminal
charges is not evidence that Petitioner has been rehabilitated. In fact, Petitioner
would risk incarceration if
he did not completely satisfy the terms of the restitution that the court imposed
on him.
More relevant to the issue of Petitioner's rehabilitation is that Petitioner
has consistently manifested an
unwillingness to take responsibility for his actions and fully admit wrongdoing.
This is illustrated by the
fact that Petitioner's testimony at the hearing was tinged with reluctance to
admit wrongdoing, even when
he was asked pointed questions by his own counsel. For example, when questioned
by his own counsel as
to why he did not call the doctor's office to confirm a prescription (instead
of filling or refilling it without
authorization), Petitioner stated that a lack of time prevented him from doing
so. Tr. 239.
Additionally, Petitioner attempted to justify his dispensing Codeine without
authorization to an habitual
user by claiming that she had a chronic back problem. Tr. 241 - 42; FFCL 130
- 31. Petitioner stated also
that the large number of Codeine refills he provided to the habitual user was
justified because she in turn
gave some of the medication to her husband for the relief of his kidney stones.
Tr. 242 - 43; FFCL 130.
Lastly, Petitioner refused to admit that dispensing a combination of Dyazide
and Hydrochlorothiazide was
medically irrational and potentially very harmful, despite persuasive and credible
testimony to the contrary.
Tr. 258 - 59.
Petitioner's testimony on this issue is representative of the type of action
that led to his exclusion.
Petitioner attempts to justify his actions with after-the-fact rationalizations.
Both the evidence and
Petitioner's testimony on this issue show that he violated his duties as a pharmacist
by providing
medication to an habitual user without authorization and subjecting that person
to the deleterious side
effects from the extended and unauthorized use of Codeine. It also indicates
that Petitioner was providing
a drug to an habitual user, with full knowledge that she was giving some of
the drug to her husband.
Petitioner's admission that he knew the habitual user was giving some of the
drug to her husband is an
additional instance, not alleged by the I.G., of Petitioner dispensing prescription
medication to an
individual without a physician's authorization, in violation of his duties as
a pharmacist. It is also further
evidence of Petitioner's untrustworthiness.
Petitioner's lack of rehabilitation and his unwillingness to take responsibility
for his actions is further
demonstrated by his refusal to admit that he placed his customers at risk. When
asked by counsel at the
hearing if he placed some customers at risk by filling and refilling prescriptions
without authorization,
Petitioner responded that his customers would have told him if he were placing
them at risk. In making
this statement, Petitioner shows that he fails to grasp the seriousness of his
conduct. As Dr. Tom stated, it
is the pharmacist's obligation, not the obligation of the person receiving the
medication, to identify
potential problems and inform and question the physician when the physician
is prescribing medication
that is irregular or medically inappropriate.
Petitioner saw fit to provide prescription medication without a physician's
authorization, in effect depriving
customers of a physician's medical diagnosis and advice. Petitioner's testimony
shows that after he took it
upon himself to provide medication without appropriate authorization, he inappropriately
believed it was
his customers and not himself that should have been aware of and acted to avoid
potential risks. It was
Petitioner's duty as a pharmacist to warn customers about potential risks. There
is no evidence in the
record from which I can conclude that Petitioner warned any of his customers
about possible side effects
from their prescriptions. Petitioner's attempt to place the burden of knowing
the risks from various
medications on his customers is indicative of his failure to take responsibility
for his actions and of his lack
of trustworthiness.
Petitioner's sworn testimony before me at the hearing is in direct conflict
with an earlier sworn statement he
made to a California Board of Pharmacy inspector and is convincing evidence
of his lack of
trustworthiness. FFCL 141; I.G. Ex. 11; Tr. 255 - 56. In his sworn statement
to the Board of Pharmacy
investigator, Petitioner denied that he had overstepped his authority in dispensing
prescription medication
without authorization. In his sworn statement, Petitioner did not admit to any
wrongdoing, and instead
stated that he did not realize that what he did would be "construed"
as going beyond the limits of his
professional judgment. I.G. Ex. 11 at 24. However, when he signed the Board
of Pharmacy's Stipulation,
Petitioner admitted that, on over 800 occasions, he did dispense medication
without authorization. I.G. Ex.
3.
In his sworn statement to the investigator, Petitioner stated he did what was
best for his customers. I.G. Ex.
11 at 24. However, in his testimony at the hearing, Petitioner reluctantly,
and with vigorous prompting
from his counsel, admitted that he did not have the authority to prescribe drugs
for his customers.
Petitioner attempted to justify his actions by stating that some of the pharmaceuticals
he provided to his
customers without authorization were not modified upon their subsequent visit
to a physician. Tr. 248 - 49.
From this testimony, Petitioner demonstrates that he believes that it was harmless
for him to provide drugs
without authorization if the customer later visited a physician and that physician
did not discontinue the
customer's use of the drug or substitute other medication.
Petitioner's lack of rehabilitation and his failure to admit misconduct is
shown by his failure to recognize
that such conduct is a violation of his duties as a pharmacist, even if a physician
did not make a change in
the medication. Petitioner's testimony demonstrates Petitioner's lack of rehabilitation
also by his failure to
recognize that his conduct endangered customers by subjecting them to potentially
dangerous side effects
both from the drugs themselves and from the lack of follow-up laboratory testing
and medical monitoring.
12. Petitioner has not made a meaningful effort to comply with the terms of his exclusion.
Under Matesic, I may consider any other factors relating to Petitioner's character
in assessing his
trustworthiness. Relevant to this criterion is the fact that Petitioner has
not made a meaningful effort to
comply with the terms of his exclusion.
On July 22, 1991, the I.G. informed Petitioner that, effective August 11, 1991,
he would be excluded from
Medicare and related State health care programs. The I.G.'s letter further informed
Petitioner that the effect
of the exclusion was that no payment would be made to him for any items or services
provided by him
under Medicare and Medicaid, except for emergency items or services. Petitioner
was informed also that if
he submitted or caused to be submitted claims for items or services furnished
after the effective date of the
exclusion, he could be subject to civil monetary penalties.
At the hearing, Petitioner acknowledged that he had received and read the I.G.'s
July 22 letter. Petitioner
stated that he had worked at a pharmacy in November of 1991, after the effective
date of the exclusion, and
that he had filled or refilled prescriptions for Medi-Cal recipients. Tr. 250
- 51; FFCL 123 - 25. Petitioner
admitted that did not tell his employer that he had been excluded. 26/ Id. When
pressed on this issue by
the I.G.'s counsel, Petitioner intimated that he did not know what it means
to be excluded and that, because
he was in the process of contesting his exclusion, he did not think he was forbidden
to submit claims to the
Medicaid program. Tr. 260.
I find that Petitioner, with his level of education and experience, would have
no difficulty understanding
that he was being excluded from seeking reimbursement for items or services
rendered to program
beneficiaries or recipients. When pressed by the I.G.'s counsel, Petitioner
conceded that the meaning of the
letter was clear, but contended that, despite the letter's statement that he
was excluded effective 20 days
from the date of the letter (August 11, 1991), he assumed that he was not excluded
because he had
requested a hearing to contest his exclusion. 27/ Tr. 260 - 62.
Petitioner contended also that he had never had the letter explained to him
until the night before this
administrative hearing. Such an assertion is suspect since he has had legal
counsel throughout the criminal
and administrative proceedings. Moreover, there is some evidence to suggest
that the plea agreement in
the criminal proceeding was based, in part, on an attempt to avoid the resulting
administrative sanctions
associated with conviction of a program-related criminal offense. Mr. Temmerman
testified that Mr.
Wilson, Petitioner's attorney at the criminal proceedings, stated that he did
not want Petitioner to plead to
charges which, on their face, involved Medi-Cal fraud, because he thought that
might impair Petitioner's
argument against a subsequent administrative sanction. Tr. 208 - 09, 220 - 21.
Lastly, Petitioner
contradicted himself when he stated that he understood that filling prescriptions
for Medi-Cal recipients
after the effective date of the exclusion "is a problem." Tr. 259
- 62.
I do not find Petitioner's testimony on this issue to be credible. He admits
receiving and reading the I.G.'s
letter, even though he denies that he knew what it meant or that any of his
attorneys explained it to him
prior to the night before this hearing. I do not find that the I.G.'s July 22
letter is unclear so as to require
any explanation. However, if Petitioner had any doubts as to the meaning of
the I.G.'s letter, he certainly
could have availed himself of the opportunity to inquire of his counsel well
before the night before the
hearing. A person of reasonable prudence who had such doubts would have at least
inquired before
placing himself in a situation in which he could be subject to further penalties.
The suspect credibility of Petitioner's testimony on this issue is further
demonstrated by his admission that
he received another letter informing him that he was excluded by the State of
California from participation
in the Medi-Cal program. Petitioner admitted that he knew it was a problem when
he filled or refilled a
prescription for someone and he did not know whether or not that person was
a Medi-Cal recipient. Tr.
265. This statement indicates that Petitioner has a clear understanding of what
it means to be excluded,
because Petitioner specifically attempted to avoid violating the terms of the
exclusion imposed by the State
of California. Petitioner's testimony indicates he had full comprehension of
his exclusion by the State
because he specifically stated that he tries not to fill prescriptions for Medi-Cal
recipients. Tr. 265. If
Petitioner can understand his exclusion by the State of California, he is capable
also of understanding that
the I.G. excluded him. This is especially true in view of the fact that Petitioner
admitted that he received
and read the I.G.'s July 22, 1991 letter.
Under Matesic, Petitioner's failure to make meaningful efforts to comply with
the terms of his exclusion is
indicative of his lack of trustworthiness. Petitioner's failure to inform his
employer of his exclusion is in
keeping with his unwillingness to accept the consequences of his actions. Petitioner's
attempt to assert that
he did not know what it meant to be excluded is a dubious attempt to extricate
himself from culpability for
violating the terms of his exclusion.
13. Petitioner's conduct will likely recur.
Under the Hanlester criteria for assessing trustworthiness, I may consider
the likelihood that the offense or
some similar abuse will occur again. Based on Petitioner's reluctance to admit
wrongdoing, his lack of
rehabilitation and remorse, and the number and duration of his offenses, I conclude
that there is a
likelihood that Petitioner will continue on a course of conduct that will eventually
lead him to commit these
types of offenses again. This position is supported not only by the evidence
in the record, but by
Petitioner's testimony that establishes that he violated the terms of his exclusion
and his indifference in
doing so. I conclude that Petitioner is likely to provide prescription medication
without authorization in the
future because he does not demonstrate an understanding of either the seriousness
or extent of his conduct
in providing prescription medication without authorization. Petitioner's testimony
at the hearing and the
record as a whole demonstrate that he has not changed his behavior as a result
of the conduct that led to his
exclusion.
14. There is an absence of mitigating factors.
Petitioner argues that there are many factors that weigh in favor of my reducing
the term of the exclusion.
I will address each of them in turn here. The first factor cited by Petitioner
is that he was convicted of only
three counts. While this is true, it ignores the nature of the offenses and
the potential harm to the persons
who received the unauthorized medications. The criminal court recognized the
significance of the offenses
in the sentence that was imposed. It included a term of incarceration, (which
was suspended), a substantial
fine in addition to restitution, and a lengthy probationary period.
Petitioner states that his conduct has not had an adverse impact on the beneficiaries
of the Medi-Cal
program and therefore supports lessening the ten-year exclusion imposed and
directed by the I.G. This
assertion is simply incorrect. As already set forth, Petitioner's conduct placed
the two Medi-Cal recipients
cited in the criminal Information at great medical risk. FFCL 9, 10, 13, 14,
16 - 20, 22 - 25, 40 - 43. Of
equal significance is the State Board of Pharmacy and the Bureau of Medi-Cal
Fraud investigation, which
led to the original criminal felony complaint. That investigation disclosed
program financial loss for
unauthorized prescriptions by Petitioner in the amount of $2246.27. I.G. Ex.
3. The adverse impact in
health consequences that such improper and unprofessional conduct had on Petitioner's
customers does not
need to be restated. FFCL 39 - 112. Moreover, Petitioner admitted at the hearing
that he engaged in
additional acts of refilling prescriptions without authorization that were not
documented in the
investigation. Tr. 253 - 54.
Petitioner contends that the amount of financial damage to the Medicaid program
from his misconduct
should be taken into account in lessening his exclusion. Petitioner contends
also that he is in the process of
paying the full restitution amount imposed by the sentencing court and that
this should be weighed in his
favor. It is arguable that the amount of monetary damage which Petitioner's
actions cost the program
(2246.27) is not excessive. However, it is a significant amount. That Petitioner
is paying restitution is
commendable, but is not mitigating because his criminal sentence mandates that
he do so. Thus, neither of
these factors is a basis for finding the ten-year exclusion to be unreasonable.
Petitioner contends that he fell into his misdeeds because of a desire to help
others and not because of bad
character. Petitioner contends also that, as a doctor of pharmacy, he felt he
was the person best able to
know what drugs to prescribe for his customers. However, these arguments fail
to take into account that
Petitioner's actions were both potentially very harmful to his customers and
a violation of his duties as a
pharmacist. I do not take issue with Petitioner's contention that he wished
to help others. However, in this
case, the help he was offering was in the form of providing medications without
authorization, and was
therefore inappropriate and harmful.
Petitioner contends that the fact he received a suspended sentence of incarceration
should be viewed as a
factor to lessen the term of his exclusion. Petitioner argues that the fact
that both the Pharmacy Board and
the court gave him probation should be viewed also as a factor to lessen his
term of exclusion. Again, I
have considered Petitioner's conduct in its entirety, under the standards in
Hanlester and Matesic, and have
concluded that Petitioner's conduct merits a ten-year exclusion.
Petitioner states that, for the most part, he did not dispense controlled substances
to his customers, and that
this should weigh in his favor. However, there are risks inherent in any type
of drug, even one that is not a
controlled substance. While a particular controlled substance may be considered
more dangerous than a
drug that is not so classified, there are some serious dangers present in providing
non-controlled drugs
without authorization to customers. I have gone into these dangerous side effects
in great detail and will
not repeat them here. Moreover, Petitioner did, on many occasions, provide controlled
substances to
customers without authorization. FFCL 62 - 85. He admitted dispensing without
authorization Talwin,
Phenergan, Meprobamate, Butisol Sodium, and Codeine. Such drugs were often dispensed
in substantial
numbers to the same customer and may have led to an addiction or supplied an
existing addiction. FFCL
62 - 85.
Petitioner asserts that the fact he did not forge any prescriptions should
weigh in his favor. Although
Petitioner was never criminally charged or convicted of forging prescriptions,
the State Board of
Pharmacy's records contain allegations that Petitioner did forge prescriptions.
Petitioner disputes this. I.G.
Ex. 11. However, even accepting Petitioner's protestations of innocence, I am
not persuaded that his
exclusion should be reduced because he was not convicted of forgery. The factors
which support a ten-
year exclusion have been dealt with in detail and are not offset by Petitioner's
alleged innocence of other
wrongdoing.
Petitioner contends that his lack of prior program offenses should be considered
favorably. However, the
offenses he committed in this case are serious and were committed over a lengthy
period of time. The fact
that Petitioner has no previous record of Medicare sanctions is more than outweighed
by the nature and
duration of the offenses he committed here.
Lastly, Petitioner offers that the inspector for the California Board of Pharmacy,
who originally
investigated Petitioner's case (Mr. Doumit), testified that Petitioner has been
excellent in rehabilitation. Tr.
95. Petitioner asserts that this evidences that his past conduct is behind him
and will not be repeated.
However, as stated earlier, Petitioner has shown a reluctance to acknowledge
that he has subjected
customers to risks or to admit that he has engaged in improper conduct. Also,
Petitioner has offered
hollow excuses for his conduct, as in the case where he asserted that he was
providing excessive amounts
of the drug Codeine to LC because she had a chronic back problem and because
she was giving some of
the medication to her husband. Additionally, Petitioner
has admitted that he has not made meaningful efforts to comply with the terms
of his exclusion. FFCL
125. Therefore, while the inspector's testimony regarding Petitioner's rehabilitation
may be valid as it
applies to his awareness of Petitioner's conduct, it is not in accord with the
total picture that emerged from
the evidence at this hearing.
15. Petitioner's character statements do not alter mydetermination that his exclusion is reasonable.
Petitioner has submitted nine exhibits (P. Ex. 1 - 9) that are essentially
character statements that were
offered in connection with Petitioner's criminal trial. The I.G. objected to
the admission of these exhibits
both before and during the hearing. The I.G. argues that since copies of these
same documents were
submitted in conjunction with Petitioner's criminal trial, the statements cannot
be used now for a different
purpose than for that which they were intended. The I.G. contends that different
considerations exist in a
criminal sentencing proceeding than exist in this hearing. Therefore, statements
prepared in conjunction
with the criminal proceeding are not relevant here because they address different
issues and concerns than
those that are before me. Additionally, the I.G. objects to the statements on
the grounds that the persons
making them do not have full knowledge of the extent and nature of Petitioner's
wrongdoing. Petitioner
argues that the I.G.'s objections go to the weight and not the admissibility
of the statements.
I have admitted these nine exhibits, but consider them only to the extent that
they indicate full knowledge
of Petitioner's conduct. Since these exhibits are all dated either March or
April of 1990 (one is undated), I
find that these exhibits do not indicate full knowledge of Petitioner's activities.
The statements are
therefore of very limited value in my determination regarding Petitioner's trustworthiness.
These
statements (P. Ex. 1 - 9) were drafted over two years before this proceeding
and do not reflect any
knowledge of Petitioner's conduct after 1990. 28/ More importantly, the statements
do not reflect that any
of the persons making them knew the extent of Petitioner's misdeeds. The statements
do reflect the
experiences of persons who have had positive experiences with Petitioner on
a personal level. However,
the statements do not reflect that the people making them had any knowledge
that Petitioner had been
convicted of three criminal offenses or that Petitioner had been sanctioned
by the Board of Pharmacy.
Moreover, the statements collectively do not reflect any knowledge of these
proceedings. Lastly, the
statements were not made under oath or pursuant to affidavit and therefore must
be weighed accordingly.
Therefore, the exhibits submitted by Petitioner are insufficient to alter my
determination of the
reasonableness of the exclusion in the face of persuasive evidence to the contrary.
The I.G. objects also to Petitioner's exhibit 10 (a report of a California
Pharmacy Board inspection of
Petitioner's place of work on November 5, 1991). The I.G. contends that this
exhibit is not relevant or even
comprehensible, and Petitioner has offered no explanation as to its relevance.
Regarding the I.G.'s
objections as to P. Ex. 10, I have admitted this exhibit but will accord it
minimal weight. Petitioner states
that P. Ex. 10 is a copy of a November 5, 1991 Board of Pharmacy report that
reflects that no "corrections"
were ordered. Since the exhibit is somewhat illegible, I take Petitioner's statement
about its content to be
true. Petitioner has not offered any testimony as to what a "correction"
is as that term is used in P. Ex. 10.
No evidence was offered by Petitioner regarding the type of inspection the Pharmacy
Board performed.
Even assuming that such document suggests that at the time of the inspection
he was complying with the
standards or practices of the Pharmacy Board and is evidence of rehabilitation,
such a conclusion is
contradicted by more probative evidence on that issue, including Petitioner's
own testimony demonstrating
a lack of understanding of the significance of the unlawfulness of his conduct.
16. The ten year exclusion is reasonable.
A lengthy exclusion is needed to provide Petitioner with an opportunity to
demonstrate that he once again
can be trusted to be a program provider. Petitioner has demonstrated a propensity
to commit willful acts
over long periods of time which place program beneficiaries and others at risk.
Petitioner has
demonstrated his unwillingness also to take responsibility for his past actions.
In light of the record of his
criminal behavior, his admission to over 800 instances of dispensing prescription
medication without
authorization, the sanctions imposed by the Board of Pharmacy and the criminal
court, the evidence of his
untrustworthiness, and the paucity of evidence minimizing his current risk to
the program, I conclude that
the ten year exclusion imposed and directed against Petitioner is not "extreme
or excessive."
17. A ten-year exclusion is reasonable under the newregulations.
I find the ten-year exclusion reasonable even after an alternative evaluation
of the exclusion under the new
regulations. Even though I do not find that the new regulations apply to this
or other cases in which the
I.G. had imposed and directed an exclusion prior to January 29, 1992, I have
analyzed the evidence along
the lines suggested by the I.G. in order to help expedite a final resolution
of all potential issues in this case.
29/ Even if I had concluded that the new regulations apply to my adjudication
of this case, I would have
found reasonable the ten-year exclusion, pursuant to the criteria specified
in 42 C.F.R. 1001.101 and
1001.102.
As I have indicated, the minimum mandatory provisions of the Act require the
imposition of at least a five-
year exclusion in this case. Section 1001.102(a) imposes the same result. The
ten year exclusion is
supported applying the aggravating and mitigating factors set forth in the new
regulations. 42 C.F.R.
1001.102(b) and (c). Below, I will briefly analyze the record in this case applying
these factors.
The first aggravating factor involves acts resulting in the conviction, or
similar acts, that caused financial
loss to the programs of $1500 or more. 42 C.F.R. 1001.102(b)(1). The conviction
documents adequately
support a finding that the loss to the Medi-Cal program amounted to $2246.27,
an amount exceeding
$1500. FFCL 27, 29. This figure was derived by the Board of Pharmacy investigator
for program
payments for the drugs wrongfully dispensed to five Medi-Cal recipients, documented
in the Stipulation
between Petitioner and the Board. I.G. Ex. 3. Moreover, the records from the
investigation done by the
Board of Pharmacy and the Bureau of Medi-Cal Fraud was limited in scope. At
the hearing, Petitioner
admitted to further unauthorized refilling of prescriptions that were not subject
of the investigation. Tr.
253 - 54.
Second, the acts that resulted in the conviction, or similar acts, were committed
over a period of one year
or more. 42 C.F.R. 1001.102(b)(2). The record amply supports that, from 1983
to 1987, Petitioner
engaged in dispensing prescription medications without authorization. FFCL 39,
92 - 94, 96, 97.
Third, the acts that resulted in the conviction, or similar acts, had a significant
adverse physical, mental, or
financial impact on one or more program beneficiaries or other individuals.
42 C.F.R. 1001.102(b)(3).
The record is replete with incidents of the type of harm envisioned by this
factor and has been set out in
detail previously in this decision. FFCL 13 - 20, 22 - 30, 32 - 34, 39 - 112;
and discussion at pages 38 - 48.
Fourth, the sentence imposed by the court included incarceration. 42 C.F.R.
1001.125(b)(4). The
sentence imposed included one year for Count I and 90 days each for Counts II
and III. Incarceration was
subsequently suspended in favor of a five-year probationary period. FFCL 20
- 23, and 27 - 29.
Fifth, Petitioner has a prior criminal, civil or administrative sanction record.
42 C.F.R. 1001.125(b)(5).
Petitioner's license to practice pharmacy was suspended and Petitioner was placed
on probation by the
Board of Pharmacy. FFCL 11, 12.
Sixth, Petitioner has been overpaid more than $1500 by the programs as a result
of improper billings. 42
C.F.R. 1001.125(b)(6). Petitioner was paid $2246 for unauthorized prescriptions
that were improperly
billed to the Medi-Cal program. FFCL 1 - 35.
The first mitigating factor pertains to convictions of three or fewer misdemeanor
offenses and the loss to
the programs from the criminal activities that resulted in the conviction, or
similar acts, of less than $1500.
42 C.F.R. 1001.125(c)(1). This factor does not apply. For purposes of this factor,
Petitioner was
convicted of two misdemeanor offenses (Counts II and III of the Information).
30/ FFCL 13 - 38.
However, the program related financial loss was $2246.27, an amount in excess
of $1500. FFCL 29 - 34.
The second mitigating factor pertains to a determination by the court of the
existence of a mental,
emotional or physical condition before or during the commission of the offense
that reduced the convicted
person's culpability. 42 C.F.R. 1001.125(c)(2). The documentation in the record
pertaining to Petitioner's
conviction fails to disclose that the court determined that any such condition
existed in Petitioner's case.
I.G. Ex. 1.
The third mitigating factor relates to cooperation with federal or State officials
that led to action against
others. 42 C.F.R. 1001.125(c)(3). There is nothing in the record to support
the existence of this factor.
Petitioner addressed the above aggravating factors in his brief on the new
regulations. P. S. Br. 1 - 13. His
analysis was limited to the factors set forth in 42 C.F.R. 1001.401. This section
of the regulations
addresses permissive exclusions under section 1128(b)(3) of the Act pertaining
to convictions related to
controlled substances. As I previously stated, the I.G. in this case was required
to proceed with a
mandatory exclusion under section 1128(a)(1) of the Act, based on the program
relatedness of Petitioner's
conviction. I have previously discussed Petitioner's position on the general
issue of mitigation, which
included consideration of a number of the same aggravating factors listed above.
See discussion at 39 - 55.
I will address his specific arguments as to factors raised by the new regulations
here. However, for the
most part, Petitioner's arguments do not pertain to the specific factors raised
by the new regulations and
are, therefore, not relevant under the new regulations.
Petitioner attempts to reduce the impact of the extended period of time of
his misconduct and the dollar
amount involved by applying a mathematical analysis that breaks down the incidents
and financial damage
to yearly (43 acts, $748) and monthly (3.5 acts, $62) increments. Such an effort
is unpersuasive and does
not reduce the overall harmful impact of his conduct. The consequences of his
dispensing prescription
medications without authorization and its impact on his customers have been
described in detail elsewhere
and need not be repeated. See discussion at 44 - 50. Equally unpersuasive is
Petitioner's attempt to
minimize the aggravating factors by suggesting that he was motivated by "his
desire to help patients" and
stating that the record does not show that he "forged any prescriptions".
P. S. Br. at 11. It is illogical to
suggest that a desire to assist customers negates the harmful effect of his
misconduct.
The records of the State Board of Pharmacy contains allegations, disputed by
Petitioner, that he did forge
prescriptions. The statements by physicians that in many instances they never
authorized the initial
prescription or the refill supports the conclusion that the prescriptions were
essentially forged. It is
irrelevant whether Petitioner actually wrote the name of the physician on a
prescription. The effect is the
same, a prescription was issued and medication was provided to a customer, without
the permission or
authorization of a physician, and without a medically licensed individual determining
the need for such
medication based on the condition of the patient. Also, the physicians had no
motivation to misrepresent
their practices, while the contrary is true for Petitioner. Moreover, Petitioner
concedes that his actions
were motivated by his "ambitious ego telling him he could act as a physician
in the field of pharmacology."
P. S. Br. 11. If anything, such an admission supports a ten-year exclusion rather
than, as Petitioner argues,
an exclusion of shorter duration. The practice of medicine without a license
is in most jurisdictions a
criminal act.
Again, Petitioner fails to recognize the significance of his conduct. Petitioner's
assertion that a physician
was grateful that a patient took medication that was not prescribed strains
credulity and is further evidence
of his attempt to rationalize his conduct. There is nothing in the record to
support Petitioner's assertion that
physicians were aware of the nature or extent of his unauthorized activities
or that the mental health of his
customers was enhanced due to the absence of anxiety about approval of their
prescriptions. Lastly, there
is no support for Petitioner's assertion that physicians would have authorized
the refills since they ordered
the original prescriptions. Such an assertion is inapposite to the findings
of the State Board of Pharmacy
investigation. I.G. Ex. 11.
Thus, in applying the new regulations, I find that all of the six aggravating
factors are present, with no
mitigating factors applicable to this case. There is no precise guidance in
the regulations on how the
factors should be weighed in assessing the length of the exclusion. In the preamble
to the new regulations,
the comments provide the following:
We do not intend for the aggravating and mitigating factor to have specific
values; rather these factors
must be evaluated based on the circumstances of a particular case.
* * * * *
The weight accorded to each mitigating and aggravating factor cannot be established
according to a
rigid formula, but must be determined in the context of the particular case
at issue.
57 Fed. Reg. 3314, 3315 (1992).
In applying the factors of the new regulations in determining the reasonableness
of the ten-year exclusion
mandated against Petitioner, I am still guided by the principles of: 1) whether
the length of the exclusion is
extreme or excessive; and 2) based on the consideration of the aggravating factors
described above, when
in the future Petitioner will no longer pose a threat to program beneficiaries
and recipients.
This record amply demonstrates that, over an extended period of time, Petitioner
engaged in providing both
controlled and non-controlled pharmaceuticals to customers without authorization.
The record also
demonstrates that Petitioner's conduct imposed significant medical risk to his
customers, especially where
Petitioner violated his duties as a pharmacist by supplying controlled substances
to persons who were
addicted to the drugs. Moreover, the stipulated cost to the program ($2246.27)
for his improper billings is
a significant amount of money.
The record as a whole establishes the existence of all the aggravating factors
demonstrating that Petitioner
poses a significant threat to the program. Further, the record is devoid of
any mitigating factors that would
support a finding that the ten-year exclusion is unreasonable. Considering the
applicable aggravating
factors, and the absence of any mitigating factors, Petitioner's ten-year exclusion
is neither extreme nor
excessive, but is reasonable.
CONCLUSION
Based on the law and the evidence, I conclude that the ten-year exclusion imposed
and directed against
Petitioner is reasonable.
________________________
Edward D. Steinman
Administrative Law Judge
1. "State health care program" is defined by section 1128(h) of the
Social Security Act to cover three
types of federally-financed health care programs, including Medicaid. I use
the term "Medicaid" hereafter
to represent all State health care programs from which Petitioner was excluded.
2. Medi-Cal is the California Medicaid program.
3. The parties' exhibits and briefs, the transcript of the hearing and my findings
of fact and conclusions
of law will be cited as follows:
I.G.'s Exhibit I.G. Ex. (number at page)
Petitioner's Exhibit P. Ex. (number at page)
Transcript of Hearing Tr. (page)
I.G's Posthearing Brief I.G. Br. (page)
Petitioner's Posthearing P. Br. (page)
Brief
I.G's Reply Brief I.G. R. Br. (page)
Petitioner's Reply Brief P. R. Br. (page)
I.G's Brief on New I.G. Reg. Br. (page)
Regulations
Petitioner's Supplemental P. S. Br. (page)
Brief
My Findings and Conclusions FFCL
4. Wherever possible, I refer to the persons who received unauthorized prescriptions
or refills from
Petitioner by their first and last initials. In one instance where the record
indicates only the patient's last
name and gender, I refer to her as Cl.
5. I have included headings in my Findings of Fact and Conclusions of Law (FFCL)
solely for the
benefit of the reader. These headings are not FFCL, nor do they alter the meaning
of any of my FFCL.
6. For the sake of simplicity, I use the June 25, 1987 date as the culminating
date of the transaction. One
part of Mr. Temmerman's affidavit (I.G. Ex. 8 at 3) states that June 22, 1987
was the date on which the
unauthorized refill was presented to Medi-Cal for reimbursement. However, it
is apparent, from the
affidavit as a whole and from the supporting documentation, that the final date
in the transaction that began
with Petitioner's unauthorized refill for SV on June 9, 1987 can be characterized
as either June 25, 1987,
the date Medi-Cal wrote the check to reimburse Petitioner for the unauthorized
refill, or June 30, 1987, the
date on which Petitioner, as Plaza Pharmacy, cashed the Medi-Cal check. I.G.
Ex. 7 at 1 - 4, 8. Since there
is no specific documentation in the record to support Mr. Temmerman's assertion
that June 22 was the date
on which the claim for was presented to Medi-Cal for reimbursement, for my purposes
in this Decision I
view this transaction as culminating on June 25, 1987, the date Medi-Cal wrote
the check to reimburse
Petitioner for the unauthorized refill. I.G. Ex. 7 at 1 - 4, 8.
7. For the sake of simplicity, I use the October 2, 1987 date as the culminating
date of the transaction.
One part of Mr. Temmerman's affidavit (I.G. Ex. 8/3) contains the September
28, 1987 date as the date on
which the unauthorized refill was presented to Medi-Cal for reimbursement. However,
it is apparent from
the affidavit as a whole and the supporting documentation, that the final date
in the transaction that began
with Petitioner's unauthorized refill for GW on September 14, 1987 can be characterized
as either October
2, 1987, the date Medi-Cal wrote the check to reimburse Petitioner for the unauthorized
refill, or October
7, 1987, the date on which Petitioner (Plaza Pharmacy) cashed the Medi-Cal check.
I.G. Ex. 7 at 5 - 8; I.G.
Ex. 8. Since there is no specific documentation in the record as to when this
particular claim was actually
presented to Medi-Cal for payment, I view this transaction as culminating on
October 2, 1987, the date
Medi-Cal wrote the check to reimburse Petitioner for the unauthorized refill.
I.G. Ex. 7 at 5 - 8, 8.
8. I use the terms "dispensed without authorization" or "dispensing
without authorization" as a
shorthand method throughout this Decision to refer to any incidents where Petitioner
improperly dispensed
a prescription drug without a valid prescription or refilled a prescription
without authorization. Petitioner
has not disputed that, at any time he dispensed a prescription medication without
authorization, the
customer to whom it was nominally dispensed actually received it.
9. Section 1128(b)(3) of the Act provides for a permissive exclusion for "[A]ny
individual or entity that
is convicted, under Federal or State law, of a criminal offense relating to
the unlawful manufacture,
distribution, prescription, or dispensing of a controlled substance." Under
section 1128(b)(3), there is no
requirement that the conviction be program-related.
10. Mr. Temmerman is the prosecuting attorney who handled Petitioner's criminal
case and subsequent
plea to Counts I - III of the Information.
11. Mr. Temmerman informed Petitioner's criminal attorney that he was indifferent
as to whether
Petitioner pled to Medi-Cal fraud, as long as the charges were representative
of the offenses committed by
Petitioner. Tr. 208. Mr. Temmerman further informed Petitioner's criminal attorney
that Petitioner would
still be subject to an administrative sanction because he was pleading to dispensing
drugs for which the
Medi-Cal program paid. Tr. 221.
12. The evidence indicates that Petitioner refilled two separate prescriptions
for SV on June 9, 1987.
I.G. Ex. 7 at 2. However, only one of these refills has the claim control number
of 7168634255101, which
matches the claim control number stated in Count XIII of the felony complaint.
13. The claim for services submitted by Petitioner reveals that, on June 9,
1987, Petitioner refilled
prescription number 095212 for Medi-Cal recipient 54300086308002. As stated
earlier, Medi-Cal
recipient 54300086308002 is SV. I.G. Ex. 7 at 1.
14. The reimbursement check that Petitioner received in the amount of $623.62
includes payment of
$35.12 for prescription number 095212. I.G. Ex. 7 at 2 - 4.
15. The claim for services submitted by Petitioner reveals that, on June 9,
1987, Petitioner refilled
prescription number 095212 for Medi-Cal recipient 54300086308002. As stated
earlier, Medi-Cal
recipient 54300086308002 is SV. I.G. Ex. 7 at 1.
16. The evidence establishes that the Medi-Cal program issued a check to Petitioner
on October 2, 1987,
that was for payment of a number of his claims for reimbursement for services,
including the specific refill
at issue here. I.G. Ex. 7 at 5 - 8. Plaza Pharmacy cashed this check on October
7, 1987. I.G. Ex. 7 at 7 - 8.
17. During all times relevant to this case, SV's Medi-Cal recipient number
was 54300086308002. I.G.
Ex. 5 at 3; 7 at 1 - 2. GW's Medi-Cal recipient number, during all times relevant
to this case, was
54109568487459. I.G. Ex. 7 at 5.
18. Petitioner has not disputed that, during the relevant time period, he was
the owner and operator of
Plaza Pharmacy. Pharmacy permit number AB16487 was issued to Petitioner to do
business as Plaza
Pharmacy. I.G. Ex. 4 at 27; FFCL 1 - 2.
19. These regulations can be found at 42 C.F.R. 1001 et seq., 57 Fed. Reg. 3298 - 3358 (1992).
20. Moreover, 42 C.F.R. 1001.102 limits my consideration of aggravating factors
to those specifically
mentioned therein, and could, under the appropriate scenario, impair the I.G.'s
ability to demonstrate a
petitioner is deserving of a lengthy exclusion.
21. In making my analysis of the reasonableness of the I.G.'s ten-year exclusion,
I am guided also by the
federal regulations at 42 C.F.R. 1001.125(b). These regulations require the
I.G. to consider factors related
to the serious and program impact of the offense and to balance those factors
against any factors that
demonstrate trustworthiness. Leonard N. Schwartz, DAB CR36 (1989). Appellate
panels of the DAB
have incorporated such an analysis in decisions evaluating the reasonableness
of the length of mandatory
exclusions in excess of five years.
22. I did not consider Petitioner's felony conviction for purposes of whether
he was convicted of a
program-related offense, but I find it appropriate and relevant to consider
it as it relates to Petitioner's
trustworthiness.
23. There is no evidence in this case from which I can conclude that the drug
Acetaminophen has any
deleterious side effects. However, when Acetaminophen is provided in conjunction
with Codeine, the
patient is subjected to the risks of addiction and deleterious side effects
as described in FFCL 62 - 63, and
85. Therefore, to the extent that I find any adverse consequences to Petitioner's
dispensing Acetaminophen
with Codeine without authorization, it is due solely to the presence of the
drug Codeine in conjunction with
the Acetaminophen.
24. The deleterious side effects of the drug Codeine are contained in FFCL
63. Codeine by itself is a
Schedule III controlled substance. FFCL 63. When Codeine is combined with Phenergan,
it is classified
as a Schedule V controlled substance. FFCL 80. Thus, Phenergan with Codeine
has less potential for
abuse than Codeine alone. FFCL 62.
25. Phenergan with Codeine is classified as a Schedule V narcotic. FFCL 78.
As such, the use of this
drug can cause adverse side effects, including addiction. FFCL 60, 61, 78, 83.
26. Petitioner did not violate the terms of his exclusion by not telling his
employer that he was excluded.
However, the fact that he did not tell his employer is relevant to Petitioner's
lack of trustworthiness.
Petitioner's failure to tell his employer he was excluded prevented the employer
from making arrangements
so that Petitioner would not cause to be submitted claims for reimbursement
to the Medi-cal programs, in
violation of the terms of his exclusion. Additionally, since, after August 11,
1991, payment could not be
authorized to an entity in reimbursement for any Medicare or Medicaid prescription
filled or refilled by
Petitioner, Petitioner's employer would have been interested to know that Petitioner
was excluded.
27. The letter states that Petitioner's exclusion was effective 20 days from
the date of the letter. Since
the date of the letter was July 22, 1992, the effective date of Petitioner's
exclusion was August 11, 1992.
28. No date appears on P. Ex. 2. However, because Petitioner's exhibits 1 -
9 are copies of statements
that were submitted in conjunction with Petitioner's criminal sentencing in
1990, I infer that P. Ex. 2 has
approximately the same date as the other exhibits that were submitted by Petitioner
at the sentencing of his
criminal trial.
29. I am taking this extraordinary action in this case due to the length of
time that this case has been
pending at the ALJ hearing level. The notice of exclusion was issued in July
1991 and Petitioner requested
a hearing in October 1991. The case has been pending well over 18 months, having
been delayed twice
due to new regulations and the clarification. Petitioner deserves a final resolution
of the reasonableness of
his exclusion. Should my decision be reversed, this alternative holding may
make it possible to avoid a
time-consuming remand.
30. This mitigating factor does not specifically indicate that the misdemeanor
offenses must be program-
related. Nor does it indicate how a non-program-related felony, as is present
in this case, should be
construed in determining the applicability of this factor.