SUBJECT: Paul W. Williams, Jr. and Grand Coteau Prescription,

Petitioner,

The Inspector General

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

On July 27, 2001, Paul W. Williams, Jr. (Williams) and Grand Coteau Prescription (GCP) appealed the June 27, 2001 decision of Administrative Law Judge (ALJ) Jose A. Anglada sustaining their ten-year exclusion from Medicare, Medicaid, and all other federal health care programs under sections 1128(a)(1) and 1128(c)(3)(B) of the Social Security Act (Act). Paul W. Williams, Jr. and Grand Coteau Prescription, DAB CR787 (2001) (ALJ Decision).

Background

Based on stipulations agreed to by both parties, the ALJ decided that no material factual issues were disputed. Williams, a pharmacist in Louisiana and owner of the pharmacy GCP, pled no contest to felony theft of Medicaid funds and received a three-year probation. An outside audit found that Williams obtained overpayments of $26,581.67 between June 1, 1992 and December 31, 1994 by submitting false claims for more drugs than he actually purchased. The State Medicaid agency itself conducted an audit covering calendar year 1994 and found an additional $17,210.43 in overpayments for a total loss of $43,792.10. The Inspector General (IG) imposed a ten-year exclusion on Williams and on GCP. Since GCP's exclusion was based on the exclusion of its owner, we do not address it separately below.

Issues on Appeal

Williams and GCP challenged the reasonableness of the additional five years beyond the applicable mandatory minimum exclusion period. First, Williams asserted that, under State law, his conviction may be expunged after successful completion of probation. He argued that an exclusion beyond that point would be punitive. Second, Williams contended that the actual loss to the State Medicaid program was only $17,210.43, whereas he repaid more than the original figure of $43,792,10, so that "in retrospect" the program suffered no net loss, much less the $1,500 required to treat program loss as an aggravating factor.

The possibility that William's conviction may be expunged at some future date is irrelevant to either the basis for or reasonableness of the length of the exclusion imposed. The statute expressly provides that a plea of nolo contendere and entry into a deferred adjudication program constitutes a "conviction," and that, once judgment of conviction has been entered, a derivative exclusion is authorized "regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged." Section 1128(i) of the Act. The minimum period for a mandatory exclusion is five years. Section 1128(c)(3)(B) of the Act. These provisions make plain that Congress did not intend a period of probation or possibility of expungement in the criminal matter to determine the period of exclusion. The distinction is reasonable because the purpose of a criminal sentence is properly punitive, while the purpose of an exclusion is remedial and protective. Narendra M. Patel, M.D., DAB No. 1736, at 11 (2000). Clearly, Congress did not assume that the two purposes would necessarily be served by identical time frames, and we see no reason to assume that they would be here.

The I.G. has discretion to impose an exclusion longer than the mandatory minimum, and has promulgated regulations limiting the aggravating and mitigating factors considered in exercising that discretion. 42 C.F.R. � 1001.102(b) and (c). Neither the term of probation nor the possibility of expungement are listed as mitigating factors. We conclude that the ALJ did not err in finding that no mitigating factor was present.

One aggravating factor is present if the crime "resulted in a financial loss to a government program" of $1,500. 42 C.F.R. � 1001.102(b)(1). Williams admitted obtaining overpayments that greatly exceeded $1,500. Williams asserted before us that the total overpayment amount was only $17,210.43. Before the ALJ, however, he stipulated that the overpayments totaled $43,792,10, and that this amount was recouped by withholding Medicaid payments to him. ALJ Ex. 1, at 1, 3-5; see also I.G. Exs. 7-10. The Board will not hear on appeal any issue that could have been but was not raised before the ALJ. 42 C.F.R. � 1005.21(e). Since Williams gave no reason for failing to assert below this contention that the overpayment amount was only $17,210.43, we will not hear it now.

Williams also raised a legal claim that the recoupment negated the loss. The aggravating factor presupposes that a person who has stolen a significant amount is likely to be less trustworthy than a person who has stolen a small amount. We find no merit to Williams' suggestion that, in effect, the magnitude of the theft becomes irrelevant if the government succeeds in obtaining recovery after discovering its loss. The aggravating factor on its face specifies that the entire amount of the financial loss will be considered "regardless of whether full or partial restitution has been made." 42 C.F.R. � 1001.102(b)(1). No mitigating factor in the regulations addresses recoupment. We conclude that the ALJ did not err in finding this aggravating factor to apply here.

CONCLUSION

For the reasons explained above, we uphold the ALJ Decision in its entirety and affirm and adopt all the FFCLS therein.

Judith A. Ballard

Marc R. Hillson

M. Terry Johnson
Presiding Board Member