DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of:
Louis Mathews,
Petitioner,
- v. -
The Inspector General.
DATE: January 3, 1997
Docket No. C-96-246
Decision No. CR452
DECISION ON REMAND
This case is before me on remand from the Departmental
Appeals Board.
BACKGROUND
In the case that was initially before me, Petitioner
filed a timely appeal seeking review of the determination
of the Inspector General of the Department of Health and
Human Services (I.G.) to exclude him for a period of
three years pursuant to section 1128(b)(3) of the Social
Security Act (Act).
In that case, inasmuch as there were no facts of
decisional significance genuinely in dispute, I granted
the I.G.'s motion to decide the case on the basis of the
parties' written submissions. The I.G. established that,
during the period relevant to this case, Petitioner was a
Physician Assistant licensed in California. On March 31,
1993, the State of California filed a criminal complaint
against Petitioner, charging him with unlawfully issuing
a prescription for a controlled substance, uttering a
false prescription, and practicing medicine without a
license. On July 5, 1994, Petitioner entered into a plea
agreement, whereby he pled nolo contendere to one
misdemeanor count of "prescribing without a medical
purpose."
I determined that Petitioner's plea constituted a
"conviction" for purposes of the Act, and that the facts
underlying Petitioner's conviction fully comported with
the requirements necessary for an exclusion to be
directed and imposed against Petitioner in accordance
with section 1128(b)(3) of the Act - "Conviction Relating
To Controlled Substance."
Thus, I found no reason to disturb the I.G.'s
determination to exclude Petitioner from participation in
the Medicare and Medicaid programs.
In my Decision of November 24, 1995 (DAB CR403), I found
that the I.G. properly excluded Petitioner from
participation in Medicare and State health care programs
(hereinafter referred to as "Medicaid") for a period of
three years pursuant to section 1128(b)(3) of the Act. I
upheld Petitioner's exclusion based on the evidence
presented which indicated that there were no aggravating
and no mitigating factors.
Petitioner appealed my Decision to the Departmental
Appeals Board (DAB). In a Decision issued on May 8, 1996
(DAB 1574), the DAB upheld the basis for Petitioner's
exclusion, but remanded the case to me for the limited
purpose of determining whether Petitioner could present
additional material evidence to establish the existence
of a mitigating factor under 42 C.F.R. §
1001.401(c)(3)(i)(A). Louis Mathews, DAB 1574, at 1
(1996). Pursuant to the Board's remand, I conducted a
conference call with the parties to obtain any additional
information relevant to Petitioner's cooperation with
authorities, the mitigating factor that the Board
directed me to further consider. During the call,
Petitioner indicated that he wished to proceed with the
case by filing statements or affidavits in support of his
position. Accordingly, in my Order of June 13, 1996, I
established a schedule for Petitioner to submit
additional evidence relevant to the mitigating factor at
42 C.F.R. § 1001.401(c)(3)(i)(A).
Petitioner has filed his additional evidence in
accordance with my June 13 Order. I find that Petitioner
has failed to establish the existence of the mitigating
factor at 42 C.F.R. § 1001.401(c)(3)(i)(A). Accordingly,
I uphold the three-year exclusion directed against and
imposed upon Petitioner by the I.G.
APPLICABLE LAW AND REGULATIONS
This case is controlled by section 1128(b)(3) of the Act,
codified as 42 U.S.C. 1320a-7(b)(3), which provides that:
The Secretary may exclude the following individuals and
entities from participation in any program under title
XVIII and may direct that the following individuals and
entities be excluded from participation in any State
health care program:
(3) CONVICTION RELATING TO CONTROLLED SUBSTANCE. -
Any individual or entity that has been convicted,
under Federal or State law, of a criminal offense
relating to the unlawful manufacture, distribution,
prescription, or dispensing of a controlled
substance.
As to the term of exclusion, the controlling regulation,
42 C.F.R. 1001.401(c) provides that "an exclusion imposed
in accordance with this section will be for a period of 3
years, unless aggravating or mitigating factors listed in
paragraphs (b)(2) and (b)(3) of this section form a basis
for lengthening or shortening that period." 1/
Aggravating factors include circumstances where the acts
that resulted in the conviction were committed over a
period of a year or more; had a significant adverse
impact on program beneficiaries or other individuals or
the Medicare/Medicaid programs; the sentence imposed by
the court included incarceration; or the convicted
individual has a prior criminal, civil or administrative
sanction record. 42 C.F.R. § 1001.401(b)(2); 42 C.F.R. §
1001.401(c)(2)
The mitigating factors at 42 C.F.R. § 1001.201(b)(3) and
42 C.F.R. § 1001.401(c)(3) include the individual's
cooperation with law enforcement officials which resulted
in others being convicted, excluded or subject to a civil
money penalty; or the unavailability of alternative
sources of the type of health care furnished by such
individual.
DISCUSSION
As noted above, Petitioner appealed my Decision. On
review, the DAB affirmed the exclusion but remanded the
case for the limited purpose of determining "whether
Petitioner could present additional material and relevant
evidence which could establish the existence of a
mitigating factor under 42 C.F.R. §
1001.401(c)(3)(i)(A)." Louis Mathews, DAB 1574 (May 8,
1996).
On June 11, 1996, I conducted a prehearing conference
during which time I established a schedule for Petitioner
to file any additional evidence and argument and further
established a deadline for the I.G. to file a response to
Petitioner's submission. On August 24, 1996, in
accordance with my Order requesting Petitioner submit
additional evidence relevant to the mitigating factor at
42 C.F.R. § 1001.401(c)(3(i), Petitioner submitted a
transcript of proceedings in the California Superior
Court, San Bernardino County. 2/ The transcript
indicates that a motion was made pursuant to section
1203.4 of the California Penal Code to have expunged the
conviction upon which Petitioner's exclusion was
predicated. 3/ The State did not oppose the motion and
the motion was granted.
However, Petitioner has presented no additional evidence
relevant to the mitigating factor at 42 C.F.R. §
1001.401(c)(3)(i)(A). Nothing in P. Ex. 1 indicates that
Petitioner's cooperation with federal or State
authorities resulted in the another individual being
convicted or excluded from Medicare. Instead, the I.G.
correctly asserts that section 1203.4 provides that a
criminal defendant that has successfully completed his
probation may be permitted to withdraw his plea and have
the court dismiss the charge or charges against him.
This is plainly what happened in this case. However, the
expungement does not eradicate Petitioner's conviction.
People v. Wiederserg, 44 Cal. App. 3d 550, 553; 118 Cal.
Rptr. 755, 757 (1975); See Meyer v. Board of Medical
Examiners, 34 Cal. 2d 62, 206 P. 2d 1085 (1949). Nor
does such expungement remove the basis for the permissive
three-year exclusion imposed against Petitioner in this
case pursuant to section 1128(b)(3). James F. Allen,
M.D, DAB CR71 (1990); Betsy Chua, M.D., DAB CR76, aff'd
DAB 1104 (1990); Carlos Zamora, M.D., DAB CR22, aff'd DAB
1204 (1989); Benjamin P. Council, M.D., DAB CR391 (1995).
Moreover, the tenor of Petitioner's argument apparently
has changed. Initially, the case was remanded because,
according to the DAB "relevant and material evidence
concerning this factor (42 C.F.R. § 1001.401(c)(3)(i)(A))
was not presented before the ALJ and that there were
reasonable grounds for Petitioner's failure to adduce
this evidence." Louis Mathews, DAB 1574, at 2
(parenthetical added). I have given Petitioner the
opportunity to present evidence relevant to the
mitigating factor at 42 C.F.R. § 1001.401(c)(3)(i)(A) and
have specifically requested that he do so, but Petitioner
has offered nothing relevant.
In his brief, Petitioner has simply argued that his
conviction was expunged "based on a complaint against the
Attorney General and not because Petitioner completed all
of the requirements of probation." P. Response at 1. I
take this to mean that Petitioner's cooperation resulted
in the attorney general in the State of California filing
charges against an unnamed individual. However, this
assertion is itself contradicted by the exhibit
Petitioner himself submitted, which unequivocally states
that it is a motion made pursuant to section 1203.4 of
the California Penal Code, the section which permits the
California court to expunge Petitioner's record based on
his successful completion of probation. P. Ex. 1.
Accordingly, to the extent Petitioner contends that he
cooperated with authorities, the record contains nothing
to support this contention. More importantly, to the
extent Petitioner contends that his alleged cooperation
with authorities resulted in the conviction, exclusion or
the imposition of a civil money penalty in accordance
with 42 C.F.R. § 1001.401(c)(3)(i)(A), such contention is
likewise unsupported.
CONCLUSION
Petitioner has not shown that any of the mitigating
factors enumerated in the statute or regulations are
present in his case. More importantly, Petitioner has
offered no evidence that the mitigating factor at 42
C.F.R. § 1001.401(c)(3)(i)(A) is present. Accordingly, I
find that Petitioner was therefore properly excluded for
a period of three years pursuant to section 1128(b)(3) of
the Act.
Joseph K. Riotto
Administrative Law Judge
* * * Footnotes * * *
1. There exist two different and potentially
relevant regulations regarding aggravating and
mitigating factors. The regulation at 42 C.F.R. §
1001.201(b)(2) and (b)(3) is applicable to permissive
exclusions generally and the regulation at 42 C.F.R.
1001.401(c)(2) and (3) is specifically applicable to
permissive exclusions for convictions relating to
controlled substances. These two regulatory provisions
are not identical, but their dissimilarities are not
relevant given that they both contain the identical
mitigating factor of cooperation with federal, State or
local officials resulting in the conviction, exclusion or
imposition of a civil money penalty against another
individual. Furthermore, the DAB has remanded the case
to me specifically to allow Petitioner to present
additional evidence relevant to the mitigating factor at
42 C.F.R. § 1001.401(c)(3)(i)(A).
2. Petitioner has marked this exhibit as "P.
Ex. 1", and I receive it into evidence.
3. Section 1128(i) of the Act states that
"For purposes of subsections (a) and (b), an individual
or entity is considered to have been convicted of a
criminal offense - (1) when a judgment of conviction has
been entered against the individual or entity by a
Federal, State, or local court, regardless of whether
there is an appeal pending or whether the judgment of
conviction or other record relating to criminal
misconduct has been expunged."