Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the Case of: Tommy E. Thompson, R.Ph., Petitioner,
v.
The Inspector General.
DATE: May 8, 1997
Docket No. C-96-404
Decision No. CR473
DECISION
I conclude that the 10-year exclusion imposed and
directed against Petitioner, Tommy E. Thompson, R.Ph.,
from participating as a provider in Medicare and other
federally financed health care programs is reasonable.
PROCEDURAL HISTORY
By letter dated June 19, 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 Medicaid program, he was being excluded for 10 years
from participation in the Medicare, Medicaid, Maternal
and Child Health Services Block Grant and Block Grants to
States for Social Services programs. 1/ The I.G.
further advised Petitioner that exclusion is mandated by
section 1128(a)(1) of the Social Security Act (Act), 2/
that a 5-year minimum period of exclusion is required by
section 1128(c)(3)(B) of the Act, and that Petitioner's
10-year period of exclusion took into consideration
certain specified aggravating factors.
By letter dated August 20, 1996, Petitioner filed a
request for hearing, asserting that a 10-year period of
exclusion is excessive and requesting that the period be
reduced to a 5-year exclusion.
The I.G. filed her Motion for Decision Based on
Documentary Evidence, with accompanying brief and 4
exhibits. Petitioner filed his Response, also asking
that the decision be based on the documentary evidence.
P. Br. at 1. 3/ Petitioner agrees with the I.G.'s
Statement of Undisputed Facts. Id. Petitioner does not
object to the admission into evidence of the exhibits
submitted by the I.G., and I admit into evidence I.G.
Exhibits (I.G. Exs.) 1 through 4. Petitioner did not
submit exhibits. No facts of decisional significance are
in dispute, and, consequently, there is no need for an
in-person hearing.
Based on the evidence in the written record, the law, and
the parties' written arguments, I conclude that
Petitioner's 10-year period of exclusion comports with
the remedial purposes of the Act and is reasonable.
Accordingly, I affirm the 10-year exclusion.
ISSUE
The issue is whether the 10-year exclusion which the I.G.
imposed and directed against Petitioner is reasonable.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. Petitioner was a licensed pharmacist and the owner
and operator of the Medicine Shoppe, Inc., a pharmacy in
North Little Rock, Arkansas. I.G. Ex. 2 at 1; I.G. Br.
at 2; P. Br. at 1.
2. The Medicine Shoppe, Inc., was an authorized provider
of prescription drugs under the Arkansas Medicaid
program. I.G. Br. at 2; P. Br. at 1.
3. Petitioner entered guilty pleas to Counts XV and XX
of a superseding indictment filed in the United States
District Court for the Eastern District of Arkansas
(District Court). I.G. Ex. 2, 3.
4. The District Court entered judgment against
Petitioner in February 1996 on Counts XV and XX. The
nature of each offense was wire fraud, a felony in
violation of 18 U.S.C. §§ 1343 and 2. I.G. Ex. 3 at 1.
5. The District Court sentenced Petitioner to 18 months'
incarceration on each count, to run concurrently, and to
pay restitution to Medicaid in the amount of $325,671.63.
I.G. Ex. 3 at 2, 4.
6. Petitioner was convicted of a criminal offense,
within the meaning of section 1128(i) of the Social
Security Act. Findings 3, 4; P. Br. at 2.
7. Petitioner's conviction is related to the delivery of
an item or service under Medicaid, within the meaning of
section 1128(a)(1) of the Act. I.G. Br. at 3 - 4; P. Br.
at 2.
8. 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).
9. The I.G. was required to exclude Petitioner from
participating in Medicare and to direct his exclusion
from participating in Medicaid for at least 5 years.
Act, sections 1128(a)(1), 1128(c)(3)(B).
10. The I.G. proved 4 aggravating factors, any of which
may be considered as a basis for lengthening the period
of exclusion beyond the mandatory 5 years. 42 C.F.R. §
1001.102(b)(1), (2), (4), (6).
11. Petitioner acknowledges that none of the mitigating
factors applies. 42 C.F.R. § 1001.102(c)(1) - (3); P.
Br. at 4.
12. The evidence relevant to the aggravating factors
proves Petitioner to be untrustworthy to the extent that
a 10-year exclusion is reasonably necessary to protect
the integrity of federally financed health care programs,
and to protect program beneficiaries and recipients.
I.G. Ex. 2, 3.
13. The 10-year exclusion imposed and directed against
Petitioner by the I.G. comports with the remedial
purposes of the Act and, consequently, is reasonable.
Findings 1 - 12.
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
Medicaid.
Petitioner acknowledges that an exclusion of at least 5
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. 42 C.F.R. § 1001.102(b)(1), (2), (4), (6).
Petitioner agrees that 4 aggravating factors and no
mitigating factors apply in his case but maintains that
the weight of the aggravating factors does not support a
10-year exclusion. Petitioner requests a decision
adjusting the exclusion from 10 years to 5 years.
A. Aggravating factors
Below, I discuss the weight I have assigned to each of
the 4 aggravating factors, taking the most weighty first.
42 C.F.R. § 1001.102(b)(1), (2), (4), (6).
1. Financial loss to Medicaid
The most weighty aggravating factor in Petitioner's case
is the financial loss to Medicaid [42 C.F.R. §
1001.102(b)(1)], represented by the $325,671.63 in
restitution required of Petitioner. I.G. Ex. 3 at 4.
Petitioner shows that $277,400.12 in restitution had
already been paid when judgment was entered. I.G. Ex. 3
at 4; P. Br. at 3. Petitioner asserts, and for purposes
of this decision I assume his assertion to be true, that
he, in addition, "is currently making [restitution]
payments of $50.00 per month during his period of
incarceration." P. Br. at 3.
Nevertheless, the regulation specifying this aggravating
factor includes the following:
(The entire amount of financial loss to such
programs will be considered, including any
amounts resulting from similar acts not
adjudicated, regardless of whether full or
partial restitution has been made to the
programs);
42 C.F.R. § 1001.102(b)(1).
The $325,671.63 loss to Medicaid is far greater than the
$1,500.00 threshold that triggers this aggravating
factor. 42 C.F.R. § 1001.102(b)(1). Moreover, even if I
were to take into account the partial restitution that
has been made, the remaining loss to Medicaid of somewhat
less than $50,000.00 is still far greater than the
$1,500.00 threshold. The large loss to Medicaid
demonstrates the magnitude of Petitioner's
untrustworthiness and persuades me that Petitioner's
period of exclusion must be lengthened significantly
beyond the mandatory 5 years.
2. Overpayment to Petitioner
The next most weighty aggravating factor is the
overpayment to Petitioner by Medicaid of $1,500.00 or
more as a result of improper billings. 42 C.F.R. §
1001.102(b)(6). Petitioner "agrees that the amount of
overpayments set forth by the counts to which he pled
guilty meets the criteria of this factor." P. Br. at 4.
The 2 counts to which Petitioner pled guilty specify a
combined total overpayment of $43,433.86 ($10,986.90 in
Count XV and $32,446.96 in Count XX). I.G. Ex. 2 at 12,
15. Petitioner's illegal gain in the amount of
$43,433.86, far beyond the $1,500.00 threshold that
triggers this aggravating factor, underscores his
untrustworthiness. Again, I am persuaded that
Petitioner's period of exclusion must be lengthened
significantly beyond the mandatory 5 years.
3. Incarceration included in sentence
Petitioner agrees that the sentence imposed by the court
included incarceration. P. Br. at 4. The sentence of
incarceration for a term of 18 months on each count, to
run concurrently (I.G. Ex. 3 at 2), is a weighty
aggravating factor and an additional indicator of the
extent of Petitioner's untrustworthiness. 42 C.F.R. §
1001.102(b)(4).
4. Acts committed over a period of 1 year or
more
Petitioner "agrees that the acts resulting in conviction,
or similar acts, were committed over a period of 1 year
or more. 42 C.F.R. § 1001.102(b)(2)." P. Br. at 3.
Petitioner asserts, and I agree with Petitioner's
assertion, that the 15-1/2 month period covered by the
superseding indictment "is not excessively beyond the 1
year set forth as an aggravating factor." P. Br. at 3.
The 2 counts to which Petitioner pled guilty occurred
about 1-1/2 months apart, but Petitioner's pattern of
repeated similar acts over the course of more than a year
is a significant indicator of the extent of Petitioner's
untrustworthiness.
B. Mitigating factors
None of the mitigating factors applies. 42 C.F.R. §
1001.102(c)(1) - (3). Finding 11.
C. Consistency with other exclusions
Petitioner argues that in comparison with other
exclusions, his is unreasonable. Petitioner states that
his actions "were less egregious than those set forth" in
Rosaly Saba Khalil, M.D., DAB CR353 (1995), and Gary E.
Wolfe, D.O., DAB CR395 (1995). While this may be true,
in each of those cases, a 15-year exclusion, rather than
a 10-year exclusion, was sustained.
Petitioner cites the case of Dr. Abdul Abassi, DAB CR390
(1995), in which an administrative law judge modified a
15-year exclusion down to 8 years. In that case, the
petitioner was convicted of fraud against Medicaid in the
amount of $75,000.00 and was sentenced to incarceration
for 1 year. An important distinguishing factor appears
to be that in Abassi, the record was practically silent
as to the nature of the petitioner's involvement in the
crimes for which he was convicted. In addition, in
Abassi, only 2 aggravating factors were proven. Here,
the I.G. has proven 4 aggravating factors. The cases are
distinguishable for the additional reason that the amount
of the loss to the Medicaid program was only $75,000 in
Abassi, compared to over $300,000 in this case, and the
length of incarceration was only 1 year in Abassi,
compared to 18 months in this case.
D. Reasonableness of the 10-year exclusion
Petitioner deliberately and systematically defrauded
Medicaid to obtain illegal payments to the pharmacy which
he owned and operated. I.G. Ex. 2. Petitioner billed
Medicaid for reimbursement for drugs supposedly provided
to Medicaid recipients when no such drugs had been
provided. I.G. Ex. 2. Petitioner caused fraudulent
prescriptions to be created, so that there would be
documentation to deceive auditors. I.G. Ex. 2.
Petitioner asserts that a 10-year exclusion from Medicare
and Medicaid is unreasonable and excessive. I disagree.
The 4 aggravating factors that apply in Petitioner's
case convince me that the 10-year period of exclusion
imposed and directed against Petitioner is necessary to
protect Medicare and Medicaid, and the programs'
beneficiaries and recipients, and to allow the I.G.
enough time to be able to determine whether Petitioner
has regained trustworthiness.
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, comports with the remedial purposes of the Act
and is, thus, reasonable. Accordingly, I affirm the 10-
year exclusion.
Jill S. Clifton
Administrative Law Judge
* * * Footnotes * * *
1. Unless otherwise indicated, hereafter I
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.'s Submission Abbreviation
Motion for Decision Based I.G. Br.
on Documentary Evidence
Petitioner's
Submission
Petitioner's Response P. Br.