SUBJECT: Dinkar N. Patel, M.D.,

Petitioner,

Inspector General

FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

The Inspector General (I.G.) appealed an October 12, 2001 decision by Administrative Law Judge (ALJ) Richard J. Smith Dinkar N. Patel, M.D., DAB CR823 (2001) (ALJ Decision). The ALJ Decision modified the I.G.'s determination that Dr. Dinkar N. Patel (Petitioner) should be excluded from participation in Medicaid and all Federal Health Care Programs for a twelve-year period. Instead, the ALJ determined that Petitioner should be excluded for the statutory minimum period, three years.

The I.G. excluded Petitioner pursuant to section 1128(b)(3) of the Social Security Act (Act). The basis for the exclusion was Petitioner's January 21, 2000 conviction, in the United States District Court for the Western District of Virginia, of a criminal offense related to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance.

The ALJ Decision was based on three findings of fact and conclusions of law (FFCLs).

1. Petitioner was convicted in the State [sic] of Virginia, of a criminal offense as described in section 1128(b)(3) of the Act.

2. The I.G. failed to prove the existence of aggravating factors.

a. The I.G. has not established the aggravating factor set forth at 42 C.F.R. � 1001.401(c)(2)(ii).

b. The I.G. has not established the aggravating factor set forth at 42 C.F.R. � 1001.401(c)(2)(v).

3. A 12-year exclusion is unreasonable in light of the absence of any aggravating factors. An exclusion of three years is reasonable.

Following the I.G.'s appeal, but before Petitioner briefed the issues, the parties engaged in discussions concerning the ALJ Decision. As a result of those discussions, the parties produced a Proposed Consent Order and requested that we substitute their Order for the ALJ Decision. In the Proposed Consent Order the parties agreed that -

1. the ALJ erred generally when he concluded that the I.G. had not proved the presence of aggravating factors and specifically in reference to the aggravating factor at 42 C.F.R. � 001.401(c)(2)(v);

2. the ALJ erred by reducing the proposed exclusion to three years;

3. there are no mitigating factors present in this case.

The parties asked that we affirm FFCLs 1 and 2a and reverse FFCLs 2, 2b and 3 consistent with their Proposed Consent Order.

In relevant part, the program regulations provide that unless appealed to the Board, an ALJ's decision becomes final 30 days after service of the decision upon the parties. 42 C.F.R. � 1005.20(d). On appeal of an ALJ's decision, this Board -

may decline to review the case, or may affirm, increase, reduce, reverse or remand any penalty, assessment or exclusion determined by the ALJ.

42 C.F.R. � 1005.21(g).

While we agree with the parties' proposed findings and conclusions, we must explain the basis for reversing any part of an ALJ decision. Thus, based on the following analysis, we reverse FFCLs 2, 2b and 3. Since the I.G. did not dispute FFCLs 1 and 2a, we affirm those FFCLs without further discussion.

Background

The regulation at 42 C.F.R. � 1001.401 addresses exclusions based on a conviction related to a controlled substance. An exclusion under this section shall be for a period of three years unless aggravating or mitigating factors exist which would form a basis for lengthening or shortening the exclusion. 42 C.F.R. � 1001.401(c)(1).

The regulation at 42 C.F.R. � 1001.401(c)(2)(v) provides that, among others, an aggravating factor could be -

Whether 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 other 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 the imposition of the exclusion.

The ALJ Decision and the I.G.'s Exceptions

The I.G. took exception to FFCL Nos. 2, 2b and 3.⁽¹⁾

2. The I.G. failed to prove the existence of aggravating factors.

b. The I.G. has not established the aggravating factor set forth at 42 C.F.R. � 1001.401(c)(2)(v).

Before the ALJ, the I.G. argued that there was an aggravating factor under 42 C.F.R. � 1001.401(c)(2)(v), pointing to a May 24, 2000 Order issued by the Virginia Board of Medicine (Board Order) which placed Petitioner's license on indefinite probation, subject to certain terms and conditions. The ALJ rejected the I.G.'s argument that the Board Order constituted "adverse action" under this regulation. Noting that it was undisputed that the Board Order placed Petitioner's medical license in probationary status, the ALJ nevertheless determined that -

the Order placed no other restrictions on Petitioner's practice of medicine beyond the terms of his federal probation. In the absence of any additional significant Board penalties against Petitioner's ability to practice medicine, the I.G. has not satisfied me that the aggravating factor at 42 C.F.R. � 1001.401(c)(2)(v) has been met.

ALJ Decision at 7.

The ALJ reasoned that a finding that the Board Order constituted "adverse action" against Petitioner would require "a broader reading" of section 1001.401(c)(2)(v) than he was "inclined to give it." ALJ Decision at 8.

On appeal, the I.G. asserted that FFCLs 2 and 2b were not supported by substantial evidence in the record as a whole and were erroneous as a matter of law. The I.G. argued that the ALJ disregarded or misinterpreted clear evidence of an aggravating factor.

The I.G. noted that, as provided in the regulation, the Board Order was based on the same set of circumstances upon which the I.G. based Petitioner's exclusion. The I.G. argued that the ALJ's reasoning, that he would have found an aggravating factor only if the Board Order placed additional significant restrictions on Petitioner, is not supported by the wording of the regulation and ignores the actual effect the Board Order had upon Petitioner's license. I.G. Br. at 8-9.

The I.G. acknowledged that the restrictions set out in the Board Order were initially incorporated into the terms of Petitioner's federal probation. The I.G. asserted, however, that by adopting the terms of his federal probation into its Order, the Board of Medicine did indeed take adverse actions against Petitioner. The I.G. pointed to the preamble to section 1001.401(c)(2)(v) which explained that the regulation related to any other adverse action taken by any other federal, state or local government. The I.G. argued that the regulation was purposefully broad and did not exclude from the meaning of adverse action an authority's adoption of the same sanctions set out in a federal probation order. Id. at 10-11.

Petitioner initially sought a stay of his obligation to file a brief responding to the I.G.'s appeal and eventually submitted the jointly sponsored Proposed Consent Order in lieu of that response.

Our analysis is based on the ALJ Decision, the record before the ALJ, the I.G.'s brief on appeal and the parties' Proposed Consent Order.

Our standard of review on a disputed conclusion of law is whether the ALJ Decision is erroneous. Our standard of review on a disputed finding of fact is whether the ALJ Decision is supported by substantial evidence on the record as a whole. 42 C.F.R. � 1005.21(h).

We conclude that the ALJ erred in finding that the I.G. failed to prove the existence of an aggravating factor pursuant to 42 C.F.R. � 1001.401(c)(2)(v).

In reaching this conclusion, the ALJ ignored the plain language of the regulation at section 1001.401(c)(2)(v). There is no question that the action taken by the Virginia Board of Medicine against Petitioner's medical license impacted adversely Petitioner's right to practice medicine in the Commonwealth. Further, the regulation specifically provides that any other adverse action taken by a federal, state or local government agency or board may constitute an aggravating factor, if based on the same set of circumstances that serves as the basis for the exclusion. Contrary to the ALJ's reasoning (see ALJ Decision at 7), the language of the regulation is not reasonably read as requiring additional restrictions on an individual's medical license in order to establish this aggravating factor.

The I.G.'s evidence plainly demonstrated that Petitioner's license had been subject to adverse action by a "State board" within the meaning of 42 C.F.R. � 1001.401(c)(2)(v). The ALJ erred in not considering that evidence as establishing the existence of an aggravating factor.

We further conclude that the ALJ erred in reducing the term of exclusion to three years. FFCL 3 was based on the ALJ's erroneous determination that there were no aggravating factors present. Thus, he imposed the minimum three-year exclusion mandated by section 1128(c)(3)(D) of the Act. See ALJ Decision at 8. Since there was an aggravating factor present in this case and no mitigating factors⁽²⁾, the I.G. reasonably determined that an exclusion greater than the statutory minimum was warranted.

In their Proposed Consent Order, the parties agreed that a three-year and four-month exclusion was appropriate. We find the parties' agreed to exclusion to be reasonable.

Based on the preceding analysis, we renumber the ALJ's FFCLs as follows, substituting new FFCLs to replace those we have reversed, and modifying FFCL 1 to correct a technical error as follows:

1. Petitioner was convicted in the Commonwealth of Virginia of a criminal offense as described in section 1128(b)(3) of the Act.

2. The I.G. has not established the aggravating factor set forth at 42 C.F.R. � 1001.401(c)(2)(ii).

3. The I.G. established the aggravating factor set forth at 42 C.F.R. � 1001.401(c)(2)(v).

4. An exclusion of three years and four months is reasonable.

Donald F. Garrett

Marc R. Hillson

M. Terry Johnson
Presiding Panel Member

1. In its brief, the I.G. identified the FFCLs to which it excepted as Nos. 1 and 2. I.G. Br. at 7. However, it is clear from the I.G.'s subsequent argument and the Proposed Consent Order that FFCLs 2, 2b and 3 are in issue.

2. On appeal, the I.G. noted that, before the ALJ, neither party had argued the presence of mitigating factors. Nevertheless, the ALJ noted that if he were to read 42 C.F.R. � 1001.401(c)(2)(v) "so broadly" as to find an aggravating factor under that section, he "would then be inclined to read the 'mitigating factor' provision found at 42 C.F.R. � 1001.401(c)(3)(i)(B) just as broadly." Consequently, the ALJ indicated he would then be prepared to view Petitioner's $600,000 payment to the Virginia Department of Health Professions as satisfying the requirements of section 1001.401(c)(3)(i)(B). ALJ Decision at 8. While we disagree with the ALJ's discussion on this point, we consider it dicta and irrelevant here.