Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Paul W. Williams, Jr. and Grand Coteau Prescription, |
DATE: June 27, 2001 |
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The
Inspector General
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Docket No.C-00-739 and C-01-085 |
DECISION | |
DECISION This case is before me pursuant to requests for hearing
filed on July 27, 2000, by Paul W. Williams, Jr. (Docket No. C-00-739),
and on October 9, 2000, by Grand Coteau Prescription (Docket No. C-01-085).(1) By letter dated May 31, 2000, the Inspector General (I.G.) notified Petitioner Paul W. Williams, Jr., that he was being 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. The I.G. informed Petitioner that his exclusion was imposed under section 1128(a)(1) of the Act, due to his conviction of a criminal offense (as defined in section 1128(i) of the Act) related to the delivery of an item or service under the Medicaid program. Petitioner Williams was also informed that his exclusion was for a period greater than the minimum period of five years under section 1128(c)(3)(B) of the Act because of the following circumstances:
On September 29, 2000, the I.G. notified Petitioner Grand
Coteau Prescription that it was being excluded under section 1128(b)(8)
of the Act for a period of 10 years because Petitioner Williams had ownership
or managerial control over this entity. I held a telephone prehearing conference in Docket No.
C-00-739 on September 27, 2000. At that time, I established a briefing
schedule under which the I.G. would file a motion for summary judgment.
In the event unresolved issues remained after I issued a ruling on the
summary judgment motion, I scheduled a hearing to take place in Baton
Rouge, Louisiana, on July 10 - 11, 2001. Subsequently, by Order dated
March 19, 2001, I stated that I would not grant Petitioners' motion for
an extension unless the parties submitted a stipulation stating that there
were no material facts in controversy and the only issues to be decided
were legal issues. My Order stated further that if the parties were not
able to agree on such a stipulation, I would cancel the briefing schedule
and set prehearing deadlines. In response, the parties submitted a Stipulation dated
April 5, 2001, agreeing to all but the following Proposed Findings of
Fact and Conclusions of Law attached to the I.G.'s brief dated January
8, 2001: 3, 24, 25, 27, 30, 33, 35 and 36.(2)
In view of that Stipulation, I concluded that no factual issues remained
in controversy and that an evidentiary in-person hearing was unnecessary.
I therefore canceled the hearing scheduled for July 10 - 11, 2001, in
Baton Rouge, Louisiana (See letter order dated May 3, 2001), and have
issued this decision as dispositive of all pending matters in the consolidated
cases. Each party submitted written briefs in support of their
respective contentions. The I.G. submitted 10 exhibits with its January
8, 2001 brief in support of its motion for summary affirmance. These have
been identified as I.G. Exhibits (I.G. Exs.) 1 - 10. Petitioner offered
one exhibit consisting of the court record of his entry of a no contest
plea of guilty. I have not admitted that document into the record because
it is a duplicate of I.G. Ex. 6. Petitioner did not object to the I.G.'s
proposed exhibits. Therefore, I admit into evidence
I.G. Exs. 1 - 10. I have designated the parties' Stipulation as ALJ Ex.
1 and admitted it into the record. On May 3, 2001, I granted the I.G.'s
motion for leave to file a reply to Petitioners' brief dated April 5,
2001. The I.G. filed its reply brief concurrently with its motion. It is my decision to sustain the determination of the
I.G. to exclude Petitioners Paul W. Williams, Jr. and Grand Coteau Prescription
from participating in the Medicare, Medicaid, and all federal health care
programs, for a period of 10 years. I base my decision on the documentary
evidence, the applicable law and regulations, and the arguments of the
parties. It is my finding that Petitioner Williams was convicted of a
criminal offense related to the delivery of an item or service under the
Medicaid program. Furthermore, I find that by reason of the conviction
and exclusion of Petitioner Williams, and because of his ownership of
Grand Coteau Prescription, the I.G. is authorized to exclude Petitioner
Grand Coteau Prescription from Medicare, Medicaid, and all federal health
care programs pursuant to section 1128(b)(8) of the Act. See Paul
S. Barrentine, R.Ph., DAB CR174 (1992). Additionally, I find that
the 10-year exclusions imposed on Petitioners are not unreasonable.
ISSUES 2. Whether the 10-year exclusion imposed by the I.G. upon
Petitioner Williams is unreasonable.
APPLICABLE LAW AND REGULATIONS Section 1128(a)(1) of the Act authorizes the Secretary
of the U.S. Department of Health and Human Services (Secretary) to exclude
from participation in any federal health care program (as defined in section
1128B(f) of the Act), any individual convicted of a criminal offense relating
to the delivery of a health care item or service.
An exclusion under section 1128(a)(1) of the Act must
be for a minimum period of five years. Section 1128(c)(3)(B) of the Act.
Aggravating factors can serve as a basis for lengthening the period of
exclusion. 42 C.F.R. � 1001.102(b). If aggravating factors justify an
exclusion longer than five years, mitigating factors may be considered
as a basis for reducing the period of exclusion to no less than five years.
42 C.F.R. � 1001.102(c). Section 1128(b)(8) of the Act authorizes the Secretary
to exclude from participation in Medicare, Medicaid, and all federal health
care programs any entity that is owned, controlled, or managed by any
person who has been convicted of any offense described in section 1128(a)
of the Act or who has been excluded from a federal or State health care
program. Exclusions under section 1128(b) of the Act are permissive, and
entities excluded under � 1128(b)(8) generally must be excluded for the
same length of time as the individual whose relationship with the entity
is the basis for the exclusion, if the individual
has been or is being excluded. 42 C.F.R. � 1001.1001(b)(1). Pursuant to 42 C.F.R. � 1001.2007, an individual or entity
excluded under sections 1128(a)(1) or 1128(b)(8)
of the Act may file a request for a hearing before an administrative law
judge.
FINDINGS AND DISCUSSION The findings of fact and conclusions of law noted below in bold face are followed by a discussion of each finding.
Petitioner Williams was a registered pharmacist and the
owner of Grand Coteau Prescription in Grand Coteau, Louisiana. I.G. Ex.
7, at 1; ALJ Ex. 1, at 3 (Numbered � 1). On September 15, 1998, a Bill of Information was filed in the 19th Judicial District Court, Parish of East Baton Rouge, Louisiana, charging Petitioner Williams with one count of felony theft, specifically that between June 1, 1992 and December 31, 1994, Petitioner Williams, d/b/a Grand Coteau Prescription Shoppe, misappropriated monies having an aggregate value in excess of $500 from the State of Louisiana's Medicaid program, by means of fraudulent conduct, practices, or representations. I.G. Ex. 5; see ALJ Ex. 1, at 3 (Numbered � 2). Petitioner Williams' felony theft of Medicaid funds was
committed through his fraudulent submission of claims for reimbursement
to the Louisiana Medicaid program, from June 1, 1992 through December
31, 1994, for greater quantities of drugs than he had purchased and could
account for in his pharmacy's inventory. I.G. Exs. 7 - 9; ALJ Ex. 1, at
3 (Numbered � 6). Based on the submission of those false claims to the
Louisiana Medicaid program, Petitioner Williams received a total overpayment
of $43,792.10. I.G. Exs. 7 - 9; ALJ Ex. 1, at 3 (Numbered � 7). On February 16, 2000, Petitioner Williams pleaded guilty
to one count of felony theft. After accepting Petitioner Williams' guilty
plea, the court deferred the imposition of a sentence for a period of
three years and placed him on active, supervised probation for that period.
I.G. Exs. 6, 7. Petitioner Williams' conviction was related to the delivery of an item or service under the Medicaid program. ALJ Ex. 1, at 5 (Numbered � 26).
An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years as set forth in section 1128(c)(3)(B) of the Act:
When the I.G. imposes an exclusion for the mandatory five-year
period, the reasonableness of the length of the exclusion is not an issue.
42 C.F.R. � 1001.2007(a)(2). Aggravating factors
that justify lengthening the exclusion period may be taken into account,
but the five-year term will not be shortened. Petitioner Williams entered
a no contest plea of guilty as charged to one count of felony theft perpetrated
against the State of Louisiana's Medicaid program. He does not dispute
his conviction of a criminal offense related to the delivery of an item
or service under the Louisiana Medicaid program. See ALJ Ex. 1.
As a result of Petitioner's program-related conviction, the I.G. was therefore
required to exclude him pursuant to section 1128(a)(1) of the Act for
at least five years. Petitioner Grand Coteau Prescription's exclusion is derivative
of Petitioner Williams' mandatory exclusion pursuant to � 1128(b)(8) of
the Act. Consequently, the only issue in controversy regarding Petitioner
Grand Coteau Prescription is whether the 10-year exclusion imposed and
directed against it is unreasonable. The I.G. has discretion to impose an exclusion of more
than five years in appropriate circumstances. In Petitioner Williams'
case, the I.G. added five years to the statutory five-year minimum period. The aggravating factors that the I.G. may consider as a basis for lengthening a period of exclusion are found at 42 C.F.R. � 1001.102(b). In the case at hand, the I.G. alleges the existence of two aggravating factors, which justify the 10 year exclusion period imposed against Petitioner Williams:
Petitioners concede by way of stipulation that both of these two aggravating factors are present in this case. Specifically, they stipulated to the following proposed FFCLs attached to the I.G.'s brief:
ALJ Ex. 1, at 3, 5, and 6 (Numbered � 7, 21, 28 - 29).
Petitioner Williams asserts that Article 893 of the Louisiana Code of Criminal Procedure, pursuant to which he entered his plea, provides that, in the event a probationary period is served satisfactorily, the court may set aside the conviction and enter a dismissal. Such dismissal, he states, is deemed to have the same effect as an acquittal. Inasmuch as Petitioner Williams was placed on supervised probation for a period of three years, he may qualify for the benefits of the legislative largess made available to him under Article 893 of the Louisiana Code of Criminal Procedure. Under these circumstances, he argues, the I.G.'s 10-year exclusion is excessive because it goes far beyond the three-year probationary period resulting from his conviction, and because of the possibility that his criminal record may be cleansed by the Court at the end of his probationary term. 42 C.F.R. � 1001.102(c) provides that if any of the aggravating factors set forth in paragraph (b) of that section justifies an exclusion longer than five years, mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years. This regulation states that only the following factors may be considered mitigating:
42 C.F.R. � 1001.102(c). Two conclusions are obvious from the language of 42 C.F.R.
� 1001.102(c). First, it is clear that only the mitigating factors set
forth in that section may be considered for purposes of reducing the term
of exclusion when the I.G. exercises the discretion to go beyond the five-year
mandatory minimum period. Secondly, the possibility that, at the termination
of Petitioner Williams' three-year probationary period, the court may
exercise its discretion to expunge his criminal conviction, is not listed
as a mitigating factor. Moreover, for purposes of subsections (a) and
(b) of section 1128 of the Act, an individual or entity is considered
to have been "convicted" of a criminal offense 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 conduct
has been expunged. Act, section 1128(i). In view of the foregoing, I find that Petitioners have
not come forward with evidence of any mitigating factor. To determine
if the I.G.'s length of exclusion is unreasonable, I must consider evidence
submitted by the parties pertaining to the aggravating and mitigating
factors contained in 42 C.F.R. � 1001.102, and if the I.G.'s decision
is within a reasonable range, given my findings. I conclude that the I.G.
has established the existence of two aggravating factors, and Petitioners
have failed to point to even one mitigating factor.
In fact, the evidence before me points to the seriousness of Petitioner
Williams' deliberate conduct over an extended period of time, impairing
the fiscal soundness of federal and State health care programs and the
public confidence in those programs. This is clear evidence of Petitioners'
untrustworthiness. For the reasons stated above, and in light of my consideration
of the current statutory and regulatory criteria, I find that the 10-year
exclusion imposed by the I.G. was within a reasonable range of possible
exclusion periods given the circumstances of Petitioner Williams' case,
in which two aggravating factors were present and no mitigating factors
were established. The 10-year exclusion is a legitimate
remedy consistent with the purpose of section 1128 of the Act. That purpose
is to protect federally funded health care programs and their beneficiaries
and recipients from untrustworthy individuals and entities. See
Joann Fletcher Cash, DAB No. 1725 (2000). CONCLUSION Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner Paul W. Williams, Jr. be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because he was convicted of a criminal offense related to the delivery of an item or service under Medicare or any State health care program. The I.G. was also justified in lengthening the period of exclusion due to the existence of aggravating factors. The 10-year exclusion is therefore sustained. 42 C.F.R. � 1001.1001(b)(1) requires that Petitioner Grand Coteau Prescription be excluded for the same 10 year period of time and therefore, the entity's exclusion is not unreasonable in this case. |
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JUDGE | |
Jose A. Anglada Administrative Law Judge
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FOOTNOTES | |
1. In the absence of objection, I consolidated Docket Nos. C-00-739 and C-01-085 by Order dated December 26, 2000, and the case was thereafter designated as "C-00-739." 2. The I.G. proposed 36 Findings of Fact and Conclusions of Law (FFCL). In their Stipulation, the parties listed the numbered FFCLs as to which they agreed. However, here, I am listing those FFCLs as to which they did not agree, since they are fewer in number. | |