SUBJECT:

Frank R. Pennington, M.D.,

Petitioner,

The Inspector General

DECISION

By letter dated June 30, 2000, the Inspector General (I.G.), United States Department of Health and Human Services (DHHS), notified Frank R. Pennington, M.D. (Petitioner) that he would be excluded from participation in the Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act), for a period of 10 years.⁽¹⁾ The I.G. imposed this exclusion, pursuant to sections 1128(a)(4) and 1128(c)(3)(B) of the Act, because Petitioner had been convicted in the United States District Court for the Western District of Tennessee, Eastern Division, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Petitioner filed a request for review of the I.G.'s action. The I.G. moved for summary disposition. Because I have determined that there are no material and relevant factual issues in dispute (the only matter to be decided is the legal significance of the undisputed facts), I have decided the case on the basis of the parties' written submissions in lieu of an in-person hearing. The I.G. submitted a brief (I.G. Br.) accompanied by six proposed exhibits (I.G. Exs. 1-6). Petitioner did not object to my receiving into evidence the I.G.'s proposed exhibits, and I receive into evidence I.G. Exs. 1-6. Petitioner submitted a response brief (P. Br.) and three proposed exhibits (P. Exs. A-C). The I.G. did not object to my receiving into evidence Petitioner's proposed exhibits and I accept into evidence P. Exs. A-C.

I affirm the I.G.'s determination to exclude Petitioner from participating in Medicare, Medicaid, and all federal health care programs for a period of 10 years.

Under section 1128(a)(4) of the Act, it is mandatory that the Secretary exclude from participation in the federal health care programs any individual who has been convicted of a felony criminal offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(4) of the Act shall be for a period of five years, unless specified aggravating or mitigating factors are present which form the basis for lengthening or shortening the period of exclusion. See also 42 C.F.R. �1001.102(a).

Section 1001.102(b) of the Act provides that the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion:

(1) [t]he acts resulting in the conviction, or similar acts, resulted in financial loss to a government program or to one or more entities of $1,500 or more. (The entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made);

(2) [t]he acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;

(3) [t]he 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;

(4) [i]n convictions involving patient abuse or neglect, the action that resulted in the conviction was premeditated, was part of a continuing pattern of behavior, or consisted of non-consensual sexual acts;

(5) [t]he sentence imposed by the court included incarceration;

(6) [t]he convicted individual or entity has a prior criminal, civil or administrative sanction record;

(7) [t]he individual or entity has at any time been overpaid a total of $1,500 or more by Medicare, Medicaid or any other Federal health care programs as a result of intentional (original emphasis) improper billings;

(8) [t]he individual or entity has previously been convicted of a criminal offense involving the same or similar circumstances; or

(9) [w]hether the individual or entity was convicted of other offenses besides those which formed the basis for the exclusion, or has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.

42 C.F.R. �1001.102(b).

Section 1001.102(c) of the Act provides that only the following factors may be considered as mitigating and a basis for reducing the period of exclusion:

(1) [t]he individual or entity was convicted of 3 or fewer misdemeanor offenses, and the entire amount of financial loss to Medicare and the State health care programs due to the acts that resulted in the conviction, and similar acts, is less than $1,500;

(2) [t]he record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability; or

(3) [t]he individual's or entity's cooperation with Federal or State officials resulted in --

(i) [o]thers being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

(ii) [a]dditional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) [t]he imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.

42 C.F.R. � 1001.102(c).

Petitioner contends that he was a drug addict, not a dealer, and that his offense was not related to the distribution of a controlled substance but merely involved possession. He also asserts that his conduct never resulted in harm to program beneficiaries or loss to the federal health care programs. He also cites other factors which he construes as mitigating. He notes that he pled guilty, saving the government the expense of a trial. He asserts also that he cooperated with the United States Attorney in this matter. He maintains that he is an addict and that he has now received treatment for his addiction. Finally, he alleges that his addiction impaired his judgment resulting in his criminal conviction.

1. During the period of time relevant to this case, Petitioner was licensed as a physician in the State of Tennessee. I.G. Exs. 4, 5.

2. On June 9, 1998, Petitioner was indicted in the United States District Court for the Western District of Tennessee, Eastern Division, on one count of "unlawfully, wilfully, and knowingly possess[ing] with intent to distribute approximately 15.1 grams of cocaine base (crack cocaine), a controlled substance," in violation of Title 21, United States Code (U.S.C.), � 841(a)(1). I.G. Ex. 1.

3. The activity referred to in the June 9,1998 indictment occurred on or about June 4, 1998. Id.

4. On June 17, 1999, Petitioner entered a guilty plea in the United States District Court for the Western District of Tennessee, Eastern Division, to possession of less than five grams of cocaine base with intent to distribute, a felony, in violation of 21 U.S.C. � 841(a)(1), a lesser included offense of Count One of the indictment. I.G. Ex. 2.

5. As a result of his conviction, on November 18, 1999, Petitioner was sentenced to a term of imprisonment of 47 months, supervised release for a term of three years, ordered to pay a fine in the amount of $7,500, and an assessment of $100. I.G. Ex. 3.

6. Based on Petitioner's felony conviction, the Tennessee Board of Medical Examiners (TBME) revoked Petitioner's license to practice medicine on November 9, 1999. I.G. Ex. 5.

7. On June 30, 2000, Petitioner was notified by the I.G. that he was being excluded from participation in the federal health care programs for a 10-year period pursuant to sections 1128(a)(4) and 1128(c)(3)(B) of the Act. I.G. Ex. 6.

8. Section 1128(a)(4) of the Act provides for the mandatory exclusion, from the federal health care programs, of an individual who has been convicted of a offense which occurred after August 21, 1996, consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

9. The minimum length of exclusion for a person excluded under section 1128(a)(4) is five years. Act, section 1128(c)(3)(B).

10. An exclusion under section 1128(a)(4) may be for a longer period than the minimum if aggravating circumstances are present. 42 C.F.R. � 1001.102(b).

11. The entering of Petitioner's guilty plea constitutes a "conviction" within the scope of section 1128(i)(3) of the Act.

12. Petitioner's felony conviction is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance within the scope of section 1128(a)(4) of the Act.

13. The I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(4) of the Act.

14. The I.G. established the existence of aggravating factors under 42 C.F.R. �� 1001.102(b)(5) and (9).

15. The aggravating factors established by the I.G. prove Petitioner to be untrustworthy.

16. A ten-year exclusion of Petitioner is within a reasonable range.

I find that the I.G. has demonstrated that Petitioner is subject to exclusion under section 1128(a)(4) of the Act. Petitioner pled guilty to possession of less than five grams of cocaine base with intent to distribute, a felony, in violation of 21 U.S.C. � 841(a)(1). The court accepted Petitioner's plea and sentenced him. Such procedure constitutes a "conviction" within the meaning of section 1128(i)(3) of the Act. Maximo Levin, M.D., DAB CR343 (1994); Lila M. Nevrekar, DAB CR319 (1994).

Next it is required under section 1128(a)(4) of the Act that the crime at issue be a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. The record establishes that these elements exist in Petitioner's case. Petitioner does not dispute that the drug in question, cocaine base, was a controlled substance. He does dispute that he was involved in distribution. He alleges that he was merely in possession of it for his own use. The record establishes that Petitioner's offense was possession with intent to distribute. I.G. Ex. 2. Insofar as distribution is clearly an element of such offense, the statutory requirement is satisfied. To the extent that Petitioner, by his allegations that he was not involved in distribution and that his judgment was impaired by his addiction, seeks to collaterally attack his conviction, such claim is not permitted in the context of an exclusion appeal. An Administrative Law Judge (ALJ) is not permitted to look beyond the fact of conviction. Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Ernest Valle, DAB CR309 (1994); Peter Edmondson, DAB No. 1330 (1992).

Petitioner has argued in his brief that his 10-year exclusion should be reduced. It is Petitioner's burden to prove the existence of mitigating factors. James H. Holmes, DAB CR270 (1993). Petitioner has not established any of the mitigating factors prescribed at 42 C.F.R. �1001.102(c). He asserts that he did not, by his conduct, harm the federal health care programs or their beneficiaries, that his judgment was impaired by his addiction, and that he saved the government expense by pleading guilty and cooperating with the prosecution. P. Br. at 3. Such claims are not within the scope of the regulations. As Petitioner has the burden of proving mitigating factors by a preponderance of the evidence, I find that he has not met such burden and conclude that Petitioner has not proved the existence of any mitigating factors.

In determining whether the length of an exclusion is reasonable, it is the responsibility of the ALJ to consider and evaluate all of the relevant evidence brought to bear in this case. The regulations at 42 C.F.R. �1001.102(b) sets forth the aggravating factors which may be considered in determining the length of an exclusion. I find that the I.G. proved the presence of two aggravating factors. The two aggravating factors consist of the following:

� Petitioner's sentence included a period of incarceration. Under 42 C.F.R. � 1001.102(b)(5), it is an aggravating factor if Petitioner's sentence imposed by the court included incarceration. In this case, Petitioner was sentenced to 47 months imprisonment. I.G. Ex. 3.

� Petitioner has been the subject of other adverse action by a federal, State or local government agency or board, and the adverse action was based on the same set of circumstances that served as the basis for exclusion as required by 42 C.F.R. � 1001.102(b)(9). Based on Petitioner's felony drug conviction, the TBME revoked Petitioner's license to practice medicine on November 9, 1999. Id.

Considering Petitioner's failure to prove any mitigating factors permitted under the regulations and the I.G.'s evidence of aggravating factors, I find that the aggravating factors in Petitioner's case make the imposition of a 10-year exclusion reasonable. I note that in evaluating these factors, it is not the mere presence of a greater number of aggravating factors which forms the basis for my decision. As an Appellate panel of the Departmental Appeals Board has previously held in Barry D. Garfinkel, M.D., DAB No. 1572 (1996), it is the quality of the circumstances, whether aggravating or mitigating, which is to be dispositive in analyzing evidence of these factors. Garfinkel at 31.

In this case, the aggravating factors established by the I.G. prove Petitioner to be an individual who cannot presently be trusted to properly consider the integrity of the federal health care programs or the well-being of their beneficiaries. The dangers to society of illegal drugs and the illicit use and distribution of controlled substances are well-known. Petitioner was sentenced to a lengthy period of incarceration which indicates both his involvement in such enterprises and the danger he posed to others. The action of the TBME in revoking Petitioner's medical license also underscores the danger he posed to patients by his illicit involvement with illegal controlled substances. As a physician, Petitioner posed a double harm to others. His admitted use of such substances could impair his medical treatment of his patients. As the crime for which he was involved was an intent to distribute, he engaged in conduct which could directly result in the proliferation of illegal narcotic use.

I conclude that the I.G. was authorized to exclude Petitioner pursuant to sections 1128(a)(4) and 1128(c)(3)(B) of the Act. I find that a 10-year exclusion is within a reasonable range.

Joseph K. Riotto

Administrative Law Judge

1. In this decision, I use the term "Medicaid" to include any State health care program which receives federal funds, as defined by section 1128(h) of the Act.