Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Gerald A. Snider, M.D., Petitioner,
v.
The Inspector General.
DATE: August 1, 1997
Docket No. C-97-185
Decision No. CR484
DECISION
I conclude that the 10-year exclusion imposed and
directed against Petitioner, Gerald A. Snider, M.D., from
participating in Medicare and other federally financed
health care programs is excessive and not reasonable. I
further conclude that Petitioner should be, and is
hereby, excluded from participation in those programs for
a period of eight years.
PROCEDURAL HISTORY
By letter dated December 10, 1996, the Inspector General
(I.G.) of the United States Department of Health and
Human Services (DHHS) notified Petitioner that, as a
result of his conviction of a criminal offense related to
the delivery of an item or service under the Medicare
program, he was being excluded from participation in the
Medicare, Medicaid, Maternal and Child Health Services
Block Grant and Block Grants to States for Social
Services programs for a minimum period of 10 years. 1/
The I.G. further advised Petitioner that exclusion is
mandated by section 1128(a)(1) of the Social Security Act
(Act) 2/, that section 1128(c)(3)(B) of the Act
requires that the minimum period of exclusion shall be
not less than five years, and that an additional five-
year period of exclusion was being imposed upon a finding
of certain specified aggravating factors.
By letter dated February 6, 1997, Petitioner filed a
request for hearing, asserting that the 10-year period of
exclusion imposed by the I.G. was unreasonable and
excessive, and requesting that the exclusion be reduced
to the minimum five-year period required by the Act.
During a March 14, 1997 telephone conference, the parties
agreed that the only issue present in this appeal is
whether Petitioner should be excluded from participation
in the Medicare and Medicaid programs for 10 years --
five years in addition to the mandatory five-year
exclusion. In addition, the parties agreed that this
case should be decided on the basis of written
submissions, waiving the right to an in-person hearing.
Pursuant to a briefing schedule agreed upon by the
parties hereto, the parties have submitted, and I have
admitted into evidence and/or made a part of the record
in this case, the following documents:
a). Petitioner's initial brief with attached
Appendix; (I hereby direct that the Appendix be
marked and admitted into evidence as Petitioner's
Exhibit 1).
b). I.G.'s initial brief with attached exhibits 1
through 5;
c). Petitioner's reply brief;
d). I.G.'s reply brief;
e). I.G.'s Motion to Supplement the Record with
attached exhibit dated August 26, 1993 - Corrected
Final Order issued by the Oklahoma State Board of
Medical Licensure and Supervision. (This document
as submitted was incorrectly marked as I.G. Exhibit
1. I hereby direct that said document be remarked
as I.G. Exhibit 6);
f). Petitioner's Objection and Response to the
I.G.'s Motion to Supplement the Record;
g). Petitioner's Notice of Resolution of his
Criminal Appeal with attached Order and Judgment of
the United States Court of Appeals for the Tenth
Circuit, dated May 13, 1997. (I hereby direct that
this document be marked as Petitioner's Exhibit 2);
3/
h). Petitioner's Correction of Typographical Error;
i). I.G.'s Motion to Close the Record;
j). Petitioner's Response to I.G.'s Motion to Close
the Record;
k). I.G.'s Reply to Petitioner's Response to the
Motion to Supplement the Record. 4/
By Order dated June 23, 1997, I advised the parties that
I had received all of the above, was closing the record,
and would proceed to render a decision.
ISSUE
The issue before me is whether Petitioner should be
excluded from participation in the Medicare and Medicaid
programs for a period in excess of the five years
mandated by statute, and, if so, for what additional
period.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. At all times relevant hereto, Petitioner was a
medical doctor licensed by the State of Oklahoma to
provide medical services to patients. At the time of the
acts leading to his conviction, Petitioner was a salaried
physician employed at Muskogee Family Medical Services,
Inc. and the medical director of the Azalea Park, Tower
Hill, Heritage, Broadway Manor, York, and Pleasant Valley
Nursing Homes ("Nursing homes"), all located in Muskogee,
Oklahoma. I.G. Ex. 3.
2. On August 3, 1995, a federal grand jury, sitting in
the United States District Court for the Northern
District of Oklahoma (the Court), returned an indictment
against Petitioner charging him with one count of
conspiracy to commit Medicare fraud, in violation of 18
U.S.C. § 371. I.G. Ex. 3.
3. On December 1, 1995, Petitioner was found guilty on
the one count described in the indictment after a trial
by jury in the Court. I.G. Ex. 4.
4. On May 22, 1996, the Court entered judgment finding
Petitioner guilty of Conspiracy to Commit Medicare Fraud,
a violation of 18 U.S.C. § 371 (a felony) and ordered
that Petitioner be imprisoned for a term of twelve months
and one day, and ordered Petitioner to make restitution
of $190,000 to the Health Care Financing Administration
of the Department of Health and Human Services. I.G. Ex.
4; P. Ex. 1 at 93.
5. From January 1991 to August 1992, in return for
remuneration received and in anticipation of further
remuneration, Petitioner referred approximately 70
patients to another provider (Moore), all of whom were
Medicare beneficiaries. P. Ex. 1 at 86.
6. Petitioner's criminal conviction for Conspiracy to
Commit Medicare Fraud relates to the delivery of a
Medicare item or service within the meaning of section
1128(a)(1) of the Act. I.G. Ex. 4.
7. On December 23, 1996, the Court entered an Amended
Judgment against Petitioner, reaffirming the original
sentence of imprisonment but correcting the amount of
restitution he was ordered to make from $190,000 to
$119,532. P. Ex. 1 at 102-106.
8. After entry of the Court's judgment, Petitioner
initiated an appeal to the United States Court of Appeals
for the Tenth Circuit. In that appeal, Petitioner did
not contest the validity of his conviction but contended
that the Court should have sentenced him to probation
rather than incarceration, and that the restitution order
should have been just $5,698. P. Br. at 1.
9. On May 13, 1997, the Tenth Circuit Court of Appeals
entered an Order and Judgment denying relief as to the
sentence and agreeing that the amount of restitution
should be $119,532. P. Ex. 2.
10. The Secretary of DHHS (Secretary) has delegated to
the I.G. the authority to exclude individuals from
participation in Medicare and to direct their exclusion
from participation in Medicaid. 48 Fed. Reg. 21,662
(1983); 53 Fed. Reg. 12,993 (1988).
11. The I.G. was required to exclude Petitioner from
participating in Medicare and to direct his exclusion
from participation in Medicaid for at least five years.
Act, sections 1128(a)(1), 1128(c)(3)(B).
12. The I.G. proved four aggravating factors, three of
which may be considered in this case as a basis for
lengthening the period of exclusion beyond the mandatory
five years. 42 C.F.R. §§ 1001.102(b)(1), (2), and (4).
13. None of the mitigating factors set forth in 42
C.F.R. § 1001.102(c) applies in this case.
14. Although the I.G. has proven the existence of four
aggravating factors, Petitioner has proven by a
preponderance of the evidence that reduced weight should
be assigned to those factors when considering the length
of exclusion.
15. The evidence relevant to the aggravating factors
proves Petitioner to be untrustworthy to the extent that
an eight-year exclusion is reasonably necessary to
protect the integrity of federally financed health care
programs and to protect program beneficiaries and
recipients.
16. The 10-year exclusion imposed and directed against
Petitioner by the I.G. does not comport with the remedial
purposes of the Act, is excessive, and consequently is
not reasonable.
17. An eight-year exclusion is supported by the facts.
An eight-year exclusion comports with the remedial
purposes of the Act and is reasonable given the totality
of the evidence.
DISCUSSION
The I.G. excluded Petitioner from participating in
Medicare and directed that he be excluded from
participating in Medicaid, pursuant to section 1128(a)(1)
of the Act. The I.G. proved and Petitioner does not
contest: (1) that Petitioner was convicted of a criminal
offense under federal law and (2) that the conviction
related to the delivery of an item or service under
Medicare.
Petitioner acknowledges that an exclusion of at least
five years is required as a matter of law and that
aggravating factors specified in the regulations may be
considered to be a basis for lengthening the period of
exclusion. P. Br. at 11. 5/
A. Aggravating Factors.
Below, I discuss the evidence relating to the
establishment of the aggravating factors alleged by the
I.G. in this case and the weight I have assigned to each
of those factors in reaching my decision as to the length
of time Petitioner should be excluded from participation
in the Medicare and Medicaid programs.
1. Financial loss to Medicare.
42 C.F.R. § 1001.102(b)(1) provides that if the acts
resulting in the conviction, or similar acts, resulted in
a loss to Medicare of $1500 or more, that fact will be
considered an aggravating factor in determining the
length of exclusion. The regulation further provides
that the entire amount of the loss to the program will be
considered, including amounts from similar acts not
adjudicated, and regardless of whether full or partial
restitution has been made.
When imposing its original exclusion of 10 years, the I.G
relied upon the Court's initial judgment that Petitioner
make restitution to HCFA in the amount of $190,000. I.G.
Br. at 5; I.G. Ex. 1. The Court later amended that
judgment to correct a clerical error, and ordered the
Petitioner to make restitution in the amount of $119,532.
P. Ex. 1 at 102-106. There is no evidence that the I.G.
relied upon any evidence other than the amount of
restitution Petitioner was ordered to pay in computing
the amount of loss sustained by Medicare. Indeed, the
I.G. argues that "[t]he restitution amount of $190,000
6/ should be deemed the amount of damages sustained by
Medicare as a result of the acts resulting in
Petitioner's conviction." I.G. Br. at 5. In support of
its position, the I.G. cites a number of prior Civil
Remedies Division decisions where the administrative law
judge (ALJ) explicitly used the restitution order amount
to determine the presence of this aggravating factor.
I.G. R. Br. at 10, 11, citing Scott Gladstone, M.D., DAB
CR331 (1994); Martin Weissman, et al., DAB CR116 (1991);
and Arthur D. Freiberg, D.P.M., DAB CR63 (1990). Further,
the I.G. notes it is especially reasonable to rely upon
the order of restitution in this case inasmuch as the
Court considered and relied upon a Presentence
Investigation Report (PIR) which found in pertinent part
as follows:
In some cases referred by Snider pursuant to
the remuneration agreement, Moore or Crossland
actually performed psychological testing or
limited treatment, although Crossland was not
an approved Medicare Provider and further, was
not qualified to conduct the tests. Medicare's
review of patients' files, moreover, revealed
that in many cases the listed services were
simply not performed. Moore submitted . . .
and Medicare reimbursed Moore a total of
$241,952 for those claims, resulting in a loss
of $241,952 to Medicare. The portion of that
loss that was both reasonably foreseeable by
Snider and within the scope of his agreement
with Moore is not less than $119,532, which is
the total paid by Medicare for psychological
testing billed by Moore. Therefore, the
improper benefit conferred in this case which
can be attributed to Snider is $119,532.
See P. Ex. 1 at 86; P. Br. at 9; I.G. R. Br. at 9.
While the undersigned would agree that the Court's
restitution figure contained in the initial judgment is
clearly evidence which must be considered in determining
the amount of loss to Medicare, the cases cited by the
I.G. also indicate clearly that it is not the only
evidence which the ALJ may consider. In Gladstone, for
example, the ALJ considered evidence of unadjudicated
felony counts and photocopies of Medicaid reimbursement
checks in addition to the restitution order.
Here, Petitioner asks the undersigned to consider the
fact that, despite the order of restitution, the exact
amount of loss to the Medicare program has not been
determined. This, he asserts, is because, as indicated
in the PIR above, some of the patients he referred (under
what the Court and jury determined to be an illegal
kickback scheme) actually did receive psychological
testing and limited treatment. He asserts "Medicare
suffered no 'losses' to the extent" that services,
subsequently billed to Medicare, were actually performed.
P. Br. at 12.
Further, Petitioner asks the undersigned to consider the
fact that even if the order of restitution were
considered to be dispositive of the issue of loss to the
Medicare program, the amended order substantially reduces
the amount of loss from $190,000 to $119,532 and that
reduction should accordingly reduce the weight given to
this aggravating factor in determining the length of
Petitioner's exclusion. P. Br. at 12-13.
In considering the arguments of the parties with respect
to this issue, the undersigned has reviewed the record as
a whole. It is important to have an understanding of the
background of this case in making a decision both as to
whether the criteria for this aggravating factor have
been met and the weight to give to this factor when
considering the period of exclusion.
The PIR states that Petitioner entered into an agreement
on January 23, 1991 with two psychologists, Thomas M.
Crossland and James O. Moore, whereby Petitioner would
refer patients to them, and in return the psychologists
would perform services, bill Medicare for same, and then
reimburse 12 percent of the Medicare allowable fee to
Petitioner as a consulting fee. P. Ex. 1 at 10.
At the time of the agreement and subsequent thereto,
Petitioner was the medical director for four different
nursing homes, and in that capacity, and subsequent to
his agreement with Moore and Crossland, he ordered
psychological testing "for the majority of his nursing
home and home bound patients." P. Ex. 1 at 84. From
January 1991 to August 1992, in return for remuneration
received and in anticipation of further remuneration,
Petitioner referred approximately 70 patients to Moore,
all of whom were Medicare beneficiaries. Moore submitted
approximately $478,000 in claims to Medicare as a result
of referrals from Petitioner, and Medicare reimbursed
Moore a total of $241,952. Petitioner only received
$5,697.92 from Moore in reimbursement. Id. at 84, 86.
7/
Petitioner was ultimately indicted and convicted, after
trial by jury, of Conspiracy to Commit Medicare Fraud by
knowingly and willfully soliciting and receiving
remuneration, including kickbacks and bribes, in exchange
for the referral of patients for services paid by
Medicare, in violation of 42 U.S.C. § 1320a-7b(b)(1).
I.G. Ex. 4; P. Ex. 1 at 95-99, 103-106; P. Br. at 8.
The PIR noted that Petitioner's role in the overall
conspiracy was minor in comparison to that of Moore. It
was Moore who recruited Petitioner; there was no evidence
that the referral agreement contemplated extensive
fraudulent billings for services that were never
provided; and Petitioner lacked knowledge of the overall
conduct of Moore. Moore received almost all of the
proceeds of the offense. P. Ex. 1 at 88.
The PIR further noted, however, that in his capacity as
medical director for the several nursing homes,
Petitioner occupied a position of both public and private
trust. He had exclusive authority to determine whether
referrals for psychological services were appropriate and
necessary, and patients were reliant on Petitioner to
make appropriate decisions regarding their medical care.
He abused his discretion and significantly facilitated
the commission of the offense by making inappropriate
referrals. P. Ex. 1 at 87.
In determining the amount of restitution which the Court
required of Petitioner, it considered the statements of
the PIR. According to the PIR, the total loss to
Medicare was $241,952, the amount paid to Moore. The
evidence further indicates that the Court attributed
$119,532 of that amount to Petitioner as being
"reasonably foreseeable," being the total paid by
Medicare for psychological testing billed by Moore. P.
Ex. 1 at 86-87.
Inasmuch as the evidence indicates that Petitioner
referred a majority of his nursing home and home bound
patients to Moore, regardless of indicators for such
referrals, and inasmuch as Petitioner was aware, by
virtue of his agreement with Moore that at least some
testing would be done, and inasmuch as Moore would not
have been able to submit any of his fraudulent billings
to Medicare but for the inappropriate and illegal
referrals from Petitioner, the evidence supports a
conclusion that Petitioner's illegal kickback agreement
with Moore actually resulted in a financial loss to
Medicare in the amount of $241,952, taking into account
the entire loss to the Medicare program. This is true
regardless of whether the psychological services for
which Medicare was billed were actually performed. In
light of the fact that all referrals to Moore were done
under an illegal agreement, Moore could not lawfully
perform the services for which he billed, and had
Medicare known of the agreement, it could not have paid
for those services.
Accordingly, I conclude that Petitioner's arguments to
the effect that (1) the order of restitution reflects a
sum greater than Medicare's loss and (2) that the weight
given to this aggravating factor should be reduced
because the order of restitution was later corrected, to
be without merit. I further conclude that as a result of
Petitioner's acts resulting in his conviction, that is,
the illegal kickback agreement with Moore, Medicare
sustained a loss in the amount of $241,952, for none of
Moore's fraudulent activities could have occurred without
there first being a referral from Petitioner.
In considering the weight to be given to this factor, I
would, if it were the only aggravating factor to be
considered, impose an exclusion of one additional year,
over the five years mandated by the Act. I assign this
weight taking into consideration the fact that although
the Medicare program sustained a substantial loss due to
Petitioner's act, he himself benefitted hardly at all.
It is clear from the evidence that Moore was the
principal perpetrator of the fraud evidenced here and
clearly is the one whose direct fraudulent activity had
the greater bearing on the loss sustained by Medicare.
2. Acts committed over a period of one year or
more.
42 C.F.R. § 1001.102(b)(2) provides that if the acts that
resulted in the conviction, or similar acts, were
committed over a period of one year or more, that factor
may be considered to be aggravating and a basis for
lengthening the period of exclusion.
Both the Petitioner and the I.G. agree that the acts
which formed the basis of the conviction were committed
over a period of one year or more. Petitioner contends
that the duration in question begins March 1, 1991 and
continued until June 13, 1992. P. Br. at 13; P. Ex. 1 at
7, 8. These dates coincide with the first and last
payments from Moore to Petitioner under their agreement.
The I.G. argues that Petitioner was found guilty of count
one of the indictment, and that the indictment charges
Petitioner with committing illegal acts beginning on or
about January 1991 and continuing through about August
27, 1992. I.G. Br. at 6; I.G. R. Br. at 11; I.G. Ex. 3
at 4.
The PIR which Petitioner offered into evidence indicates
that Petitioner referred patients to Moore under their
agreement during the period from January 1991 to August
1992, in return for and in anticipation of remuneration;
and on or about August 27, 1992, Petitioner sent a letter
to Moore demanding payment of an additional $10,840
representing sums owed by Moore to Petitioner under their
agreement. P. Ex. 1 at 86.
I conclude that the acts which formed the basis of
Petitioner's conviction were committed over a period of
20 months, beginning in January 1991 and concluding in
August 1992. Accordingly, the duration of the acts
resulting in Petitioner's conviction was in excess of one
year and may be considered an aggravating factor in
determining the length of Petitioner's exclusion.
The fact that the referral activity lasted for a period
of 20 months is disturbing. As the medical director for
four nursing homes and thus responsible for patient care,
Petitioner should have been aware, after talking to
patients, that there was reason to question whether all
of the tests which Moore reported performing were
actually being performed. The government did not charge
him with such knowledge, and thus at the very least one
is left with the impression that Petitioner showed little
concern for his patients. The evidence indicates that he
did not stop referring patients to Moore until several
months after Moore stopped paying for the referrals.
Petitioner's failure to take an interest in his patients,
after referring them to Moore, and continuing this
process for a period of 20 months, enabled Moore to
significantly expand his opportunity to make fraudulent
claims to the government. The purpose of the exclusion
provision is remedial, not punishment. Here, remedial
action is clearly necessary. Directors and
administrators of nursing homes have a high degree of
responsibility to their patients. Petitioner, as noted
in the PIR, breached both the public and private trust
placed in him, and it must be emphasized that such
conduct cannot be tolerated.
In considering the weight which should be attributed to
this factor, I would exclude Petitioner for an additional
period of one and one-half years beyond the five year
mandatory exclusion period, were it the only factor
considered aggravating under the regulation.
3. Incarceration included in sentence.
42 C.F.R. § 1001.102(b)(4) provides that if incarceration
is included in the sentence, that factor may be
considered aggravating and a basis for lengthening the
period of exclusion.
Both parties agree, and the record reflects, that
Petitioner was sentenced to one year and one day of
incarceration. P. Br. at 14; I.G. R. Br. at 14; P. Ex. 1
at 96. Accordingly, a third aggravating factor has been
established.
The fact that the Court chose to incarcerate Petitioner
reflects its view of the gravamen of the offense.
However, it must also be noted that the maximum sentence
which could have been imposed for this offense was for a
term of five years, and using the court's sentencing
guidelines, as indicated in its Order and Judgment, the
Court stated the suggested range was for a term of 12 to
18 months. I.G. Ex. 4 at 5; P. Ex. 1 at 93, 99. The
evidence shows that the Court chose to impose the minimum
sentence of 12 months and added one day in order to make
the Petitioner eligible for "good time" and early
release. P. Ex. 1 at 101.
Given the fact that incarceration is an aggravating
factor, the Court's decision to impose only the minimum
sentence and its action, further, to facilitate
Petitioner's early release, significantly diminishes the
weight I assign to this factor.
If this were the only aggravating factor present in this
case, I would exclude Petitioner for a period of one-half
year over and above the mandatory five year exclusion.
4. Prior record of administrative sanction.
42 C.F.R. § 1001.102(b)(5) provides that if the convicted
individual has a prior criminal, civil, or administrative
sanction record, that factor may be considered
aggravating and a basis for lengthening the period of
exclusion.
Ruling on Objection to I.G.'s Motion to Supplement
the Record
On May 14, 1997, the I.G. filed a motion to supplement
the record on the basis of newly discovered evidence, to
wit: a Corrected Final Order issued by the Oklahoma State
Board of Medical Licensure and Supervision (Oklahoma
State Board) to Petitioner on August 26, 1993. This was
offered as I.G. Ex. 6. Petitioner does not challenge the
admission of this newly discovered evidence, but argues
that what has been marked as I.G. Ex. 6 may not be
considered as an aggravating factor when considering the
reasonableness of the exclusion period. Both parties
agree that pursuant to 42 C.F.R. § 1001.102(b)(5), one
aggravating factor which may be considered is whether
Petitioner has a "prior criminal, civil or administrative
sanction record." The parties disagree, however, as to
the meaning of the word "prior." Petitioner argues that
the intent of this regulation, similar to criminal
sentencing guidelines, is to allow the courts to increase
punishment for those who have previously broken the law,
been punished, but have chosen to nevertheless break the
law again. Based on my discussion below, I admit I.G.
Ex. 6.
Petitioner cites a number of State court decisions for
the proposition that:
[t]he regulation sets forth a prior sanction
record as an aggravating factor because a prior
sanction record shows an unwillingness to
comply with the law. 57 Fed. Reg. 3316 (1992).
The words "prior sanction," together with the
administratively noticed fact of an
unwillingness to comply with the law, mean that
sanctions should have been imposed at different
times, which would have given the individual an
opportunity to comply with the law.
Petitioner's Objection and Response to the Inspector
General's Motion to Supplement the Record, at 2 (quoting
Shyam S. Mahajan, M.D., DAB CR402 (1995) (emphasis in
Petitioner's brief)).
The facts of this case show that the criminal acts which
resulted in Petitioner's exclusion occurred between
January 1991 and August 27, 1992, while the reprimand
from the Oklahoma State Board was issued on August 26,
1993, after the events which are the subject of the
present action. Accordingly, Petitioner argues that the
Oklahoma State Board reprimand is not a prior sanction as
contemplated by the regulation.
I am not persuaded by the argument of Petitioner's
counsel. First, it must be noted here that the words
"prior sanction" are not used in this regulatory context
together with the words "unwillingness to comply with the
law." In some types of cases, where there has been an
offense, a sanction, and then a repeated offense of the
same or a similar nature, willingness to comply with the
law may be a critical factor in imposing a penalty. That
language is not included in the regulation set forth at
42 C.F.R. § 1001.102(b)(5), however. It is further noted
that the purpose of an exclusion under any of the parts
of section 1128 of the Act is remedial, and not punitive.
This singularly important fact differentiates this case
from those State cases cited by Petitioner wherein the
issue was the length of criminal sentence to impose.
Here, the I.G. is not seeking to punish Petitioner, but
rather is seeking "to protect federally-funded health
care programs and the beneficiaries and recipients of
those programs from an individual who has demonstrated by
his or her conduct that he or she is not trustworthy to
provide care under those programs." David E. Scheiner,
D.P.M., DAB CR471 (1997). The governing statute and
implementing regulations here do not turn on an
individual's "willingness to comply with the law".
Rather, they focus on the individual's trustworthiness to
participate in a voluntary program wherein he is called
upon to provide critical medical care and to handle large
sums of federal money to provide that care.
To the extent that both the Act and its implementing
regulations seek to determine an individual's
trustworthiness, the examination of that individual's
entire record, up to and including the day upon which a
decision on that trustworthiness is rendered, is in
keeping with both the spirit and the plain language of
the law.
It is my ruling that Petitioner's objection should be and
is hereby overruled.
42 C.F.R. § 1001.102(b)(5) provides that if the convicted
individual or entity has "a prior criminal, civil or
administrative sanction record" that fact may be
considered to be aggravating and a basis for lengthening
the period of exclusion. The language of the regulation
clearly indicates that at the time the decisionmaker is
determining the length of the exclusion he may look to
see if the convicted individual has a prior record. With
respect to this regulation, at least, the word "prior"
refers to a time period before the decisionmaker
determines the length of the exclusion. It does not mean
that the offense from whence the record comes must have
occurred prior to the offense for which the individual
was convicted. 8/
Petitioner also argues that even if I.G. Ex. 6 is
admissible, it should be accorded little weight as it has
little bearing on the issue of Petitioner's
trustworthiness. As noted above, the I.G. has submitted
additional evidence showing that on August 26, 1993,
Petitioner was formally reprimanded, by the Oklahoma
State Board, for his "excessive prescribing of controlled
dangerous substances without documentation of medical
need." I.G. Ex. 6 at 2.
I have previously ruled herein that I.G. Ex. 6 is
admissible evidence of a prior record of administrative
sanction and accordingly the evidence does establish a
fourth aggravating factor in this case. However, I have
not yet ruled on the weight to be assigned to the new
evidence as a basis for lengthening the period of
exclusion.
The I.G. correctly points out that "part of the ALJ's
function is to examine the evidence surrounding
aggravating factors for indicia of untrustworthiness . .
. that poses a risk to program funds and beneficiaries."
The I.G. argues that the record of a prior
administrative sanction shows that Petitioner "over-
medicated nursing home patients with 'controlled
dangerous substances' on a daily basis over lengthy
periods of time," and concludes that "[i]f this does not
evince untrustworthiness and a potential risk to program
beneficiaries, then it is hard to imagine what would."
9/
Petitioner states that the sanction involved three
patients who were apparently addicted to various
narcotics before they came under Petitioner's care and he
was working with these patients in an attempt to help
them overcome their drug addiction while at the same time
managing their pain. He attempted to do so by gradually
reducing the amount of narcotics and switching them to
alternative medications. The I.G. objects to this
argument as being unsubstantiated by the evidence.
However, the I.G. introduced the record of a prior
sanction into evidence and cannot now object when
Petitioner attempts to explain the circumstances
surrounding it. Further, Petitioner notes that a close
reading of the document indicates that: (1) Petitioner
would not have been reprimanded if he had documented each
patient's medical need; (2) that a follow-up prescription
survey was to be conducted, and there was no evidence of
any further administrative, civil, or criminal sanction;
(3) the reprimand is not based on intentional fraudulent
conduct or conduct motivated by financial gain; and (4)
that the level of sanction, formal reprimand, is
modest. 10/
The record of administrative sanction suggests that
Petitioner's explanation of the circumstances surrounding
that sanction is true. I note that as part of its order,
the Oklahoma State Board "urged," but did not order,
Petitioner to obtain independent consultation with a
qualified addictionologist for any patient requiring
controlled dangerous substances over a long period of
time. I.G. Ex. 6 at 2. The fact that the Oklahoma State
Board only urged Petitioner to obtain independent
consultation, and did not order him to do so, indicates
that the Oklahoma State Board felt Petitioner was
trustworthy enough to continue to prescribe narcotic
medications for his patients. The fact that he was only
reprimanded, when indeed much more serious sanctions were
available, is also indicia that the Oklahoma State Board,
at least, felt Petitioner was trustworthy enough to
return to his medical practice.
While I have found that I.G. Ex. 6 is admissible to the
extent that it can be considered as an aggravating
factor, and I have in fact considered it, I do not find
that this record, standing alone, raises the level of
Petitioner's untrustworthiness or requires any additional
remedial action in the way of extended exclusion. I
attribute no additional weight to this evidence and
impose no further exclusion resulting from it.
B. Mitigating factors.
Petitioner has asked that I take into consideration the
circumstances surrounding his conviction as mitigating
factors in reducing the amount of time he is excluded
from participating in Medicare. Chiefly among these he
argues that his motivation for entering into the
agreement with Moore was to ensure that his patients were
not unwisely "evicted" from the nursing homes because of
government required Preadmission Screenings and Annual
Resident Reviews (PASARR Exams). He also argues that he
entered into the agreement with Moore only on the advice
of his legal counsel assuring him that he was not
violating the law. P. Br. at 2-5, 15.
The I.G. argues, and I agree, that Petitioner has
attempted to mount a collateral attack on the underlying
conviction. Petitioner's opportunity to raise these
arguments with the Court has come and gone, apparently
without success. I.G. R. Br. at 3. As the I.G. further
notes, the regulations prohibit any collateral attack on
the underlying determination, either on substantive or
procedural grounds. Id.; 42 C.F.R. § 1001.2007(d).
Accordingly, I am not permitted to consider Petitioner's
arguments relating to the circumstances surrounding his
conviction in reaching my decision herein.
The term "mitigating factors," for purposes of this
proceeding, has a precisely defined meaning under the
regulations. 42 C.F.R. § 1001.102(c) provides that only
the following factors may be considered: (1) three or
fewer misdemeanor offenses and loss to the program of
less than $1500; (2) a mental, physical, or emotional
condition reducing culpability; or (3) cooperation with
the government resulting in others being convicted or
excluded or the imposition of a civil money penalty or
assessment by the I.G.
None of the mitigating factors listed above applies in
this case.
With respect to the first mitigating factor listed above,
Petitioner stipulates that he was convicted of a felony.
P. Br. at 15.
Petitioner argues that based upon the advice of counsel,
he believed that the arrangement which led to his
conviction was lawful and that this factor should be
considered in determining the length of suspension.
Reliance on bad legal advice does not equate with a
mental, physical, or emotional condition reducing
culpability and is not a mitigating factor under the
regulations. There is no evidence of a mental, physical,
or emotional condition reducing culpability.
Petitioner admits that he did not cooperate with the
government in the prosecution of others for the reason
that "once Moore had made a deal with the government,
there was no one left to prosecute other than Dr.
Snider." P. Br. at 16.
C. Reasonableness of the exclusion.
The I.G. argues that a 10-year exclusion is reasonable
when three aggravating factors are met, and cites a prior
ALJ decision upholding a 10-year exclusion in a case with
three aggravating factors. I.G. Br. at 7. Further, the
I.G. argues that because there are four aggravating
factors in this case, the ALJ should increase the
exclusionary period beyond the 10 years originally
imposed. I.G. R. Br. at 16.
I do not find the I.G.'s argument to be persuasive. As
Petitioner correctly points out, the issue is not the
number of aggravating factors that have been proven in a
given case; instead, the issue is what the evidence
relating to any of the factors says about Petitioner's
trustworthiness. P. R. Br. at 1. The I.G. seems to also
recognize this in principle, citing Mahajan, DAB CR402,
at 22 (1995) for the proposition that
[p]rior to the implementation of regulations
containing aggravating and mitigating factors,
administrative law judges relied on the concept of
"trustworthiness" to determine the amount of risk
that a party might pose in relationship to the harm
Congress has sought to prevent. Thus, the term
"trustworthiness" reflects the extent of the needed
remedial action. . . . The fundamental concept of
"trustworthiness" continues to apply since the
implementation of regulations such as 42 C.F.R. §
1001.102, although it is now applied to the
inferences that may be drawn from evidence relevant
to the aggravating and mitigating factors specified
by regulations.
Inspector General's Reply to the Petitioner's Response to
the Motion to Supplement the Record, at 4, 5 (emphasis in
the I.G.'s brief).
Here, I do not find that the evidence suggests Petitioner
to be as untrustworthy as the I.G. contends, nor do I
find Petitioner to be as exemplary and without risk as he
would contend. The evidence, taken as a whole, supports
a finding that a reasonable exclusion lies somewhere in
between the minimum five years sought by Petitioner and
the ten or more years sought by the I.G.
CONCLUSION
The I.G.'s determination to exclude Petitioner for 10
years from participating in Medicare, and to direct that
he be excluded for 10 years from participating in
Medicaid does not comport in its entirety with the
remedial purposes of the Act, and is not wholly
reasonable. Having considered the trustworthiness of
Petitioner and the inferences from the evidence relevant
to the aggravating factors in this case, I find that
Petitioner should be, and is, hereby excluded from
participating in the Medicare program for a period of
eight years, being three years in addition to the
mandatory five-year exclusion required by law. Further,
the I.G. shall direct that Petitioner be excluded from
participating in Medicaid for a similar eight-year
period.
________________________
Stephen Jon Ahlgren
Administrative Law Judge
* * * Footnotes * * *
1. Unless otherwise indicated, I hereafter
refer to all programs from which Petitioner has been
excluded, other than Medicare, as "Medicaid."
2. Those parts of the Act discussed herein are
codified in 42 U.S.C. § 1320a-7.
3. In this Decision, I refer to the parties'
submissions as follows:
I.G. Initial Brief - I.G. Br.
I.G. Reply Brief - I.G. R. Br.
Petitioner's Initial Brief - P. Br.
Petitioner's Reply Brief - P. R. Br.
I.G.'s Exhibits - I.G. Ex. -
Petitioner's Exhibits - P. Ex. -
References to other submissions in the text of this
decision are made using the complete title of the
submission.
4. The I.G. objects to Petitioner's Response
to the Motion to Supplement the Record for the reason
that Petitioner's Response was untimely. The I.G.
attached two proposed exhibits to its brief showing that
Petitioner's Response was filed two days late. While I
am not pleased with Petitioner's tardiness, I have
elected to waive the filing deadline in this case and to
receive Petitioner's Response into the record in the
interests of having a full and complete record before me
prior to adjudicating this case. Accordingly, I hereby
overrule the objection of the I.G. and admit Petitioner's
Response to the I.G.'s Motion to Supplement the Record.
Further, having so ruled, the attached two I.G. exhibits,
which have been remarked as I.G. Proposed Exhibits 7 and
8, are immaterial and are not admitted into evidence.
5. It is noted that Petitioner erroneously
refers to 42 C.F.R. § 1001.201, rather than § 1001.102,
which is applicable in this case. However, the
aggravating factors listed in both sections are not
materially different for purposes of this case.
6. The I.G. Brief was prepared prior to the
time it was aware that the Court had amended the amount
of restitution.
7. According to the PIR, Moore submitted a
number of bills to Medicare, seeking and receiving
reimbursement for services which were not performed. P.
Ex. 1 at 85, 86. Moore did not stand trial, but instead
entered a plea, and was sentenced to five years'
probation and ordered to pay restitution of $48,945. P.
Ex. 1 at 84; P. Br. at 7.
8. It is acknowledged that this ruling may be
contrary to that in Mahajan, although the facts in that
case were dissimilar to those before me here. To the
extent there is conflict, prior ALJ decisions, while
useful as a guide, are not legally binding precedent.
9. See Inspector General's Reply to
Petitioner's Response to the Motion to Supplement the
record, dated June 13, 1997 at 5.
10. See Petitioner's Objection and Response
to the Inspector General's Motion to Supplement the
Record, dated May 29, 1997 at 4, 5.