SUBJECT:

Dustin Wade Thomasson,

Petitioner,

The Inspector General

DECISION

I find to be excessive the determination of the Inspector General (I.G.) to exclude Petitioner, Dustin Wade Thomasson, L.P.N., from participating in Medicare and other federally funded health care programs for a period of 10 years. I modify the exclusion to a term of six years.

I. Background

Petitioner is a nurse. On December 29, 2000, the I.G. excluded Petitioner from participating in Medicare and other federally funded health care programs for a period of 10 years. The I.G. determined that Petitioner had been convicted of a felony related to the unlawful distribution of a controlled substance as is described by section 1128(a)(4) of the Social Security Act (Act). The I.G. determined further that two aggravating factors existed in Petitioner's case which supported a 10-year exclusion.

Petitioner opposes the I.G.'s determination. Petitioner does not deny that a basis exists for excluding him pursuant to section 1128(a)(4). He argues that the length of the exclusion is excessive. He asserts that the evidence justifies an exclusion of only five years. He contends, furthermore, that the exclusion should begin to run on May 5, 1999, the date when his incarceration began and he was "taken out of the health care delivery system." Petitioner's brief at 8. He also contends that his failure to receive the I.G.'s preliminary notice is a basis for invalidating his period of exclusion.

I held a prehearing conference in this case at which I directed the parties to file written submissions. The I.G. filed a brief and nine proposed exhibits (I.G. Ex. 1 - I.G. Ex. 9). Petitioner filed a brief and eight proposed exhibits (P. Ex. 1 - P. Ex. 8). Additionally, Petitioner moved for an in-person hearing in the event that I excluded from evidence any of Petitioner's proposed exhibits. In the absence of objection, I am receiving into evidence I.G. Ex. 1 - I.G. Ex 9 and P. Ex. 1 - P. Ex. 8. I find no reason to convene an in-person hearing inasmuch as I am receiving into evidence all of the parties' proposed exhibits.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether a 10-year exclusion of Petitioner is unreasonable.

Section 1128(a)(4) of the Act mandates the exclusion of an individual who is convicted of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. There is no issue in this case as to whether a basis exists to exclude Petitioner pursuant to section 1128(a)(4). Petitioner does not deny that he was convicted of such an offense. Furthermore, the I.G. offered evidence to prove that, on April 14, 1999, Petitioner was convicted in the State of Oklahoma of the felony of unlawful distribution of a controlled substance. I.G. Ex. 4 at 1. The facts which underlie Petitioner's conviction are that, in return for a payment of $500, he agreed to transport 10 pounds of marijuana to another individual who was, in fact, an undercover police officer.

B. Findings of fact and conclusions of law

I make findings of fact and conclusions of law (Findings) to support my decision in this case. I set forth each Finding below as a separately numbered heading. I explain each Finding in detail.

1. I must sustain an exclusion of at least five years.

The minimum exclusion that I must sustain in this case is for a period of five years. The Act requires that an exclusion imposed pursuant to any part of section 1128(a), including section 1128(a)(4), be for a minimum period of five years. Act, section 1128(c)(3)(B).

2. An exclusion for more than five years may be reasonable, pursuant to section 1128(a)(4) of the Act, in a case where there are aggravating factors that are not offset by mitigating factors.

The Secretary of this Department has published regulations which govern the length of exclusions that are imposed pursuant to section 1128 of the Act. 42 C.F.R. Part 1001. The regulation which establishes criteria to govern the length of an exclusion that is imposed under section 1128(a)(4) is 42 C.F.R. � 1001.102. This regulation identifies "aggravating" factors which may be used, if present in a case, as a basis to lengthen an exclusion beyond the five-year minimum period and "mitigating" factors which may be used, if present in a case, to offset any aggravating factors that are established.

The regulation makes it clear that only those factors that it identifies as either aggravating or mitigating may be considered to determine whether an exclusion of more than five years is reasonable in a case involving section 1128(a)(4). The aggravating and mitigating factors operate as rules of evidence in such a case. Evidence which does not relate to an identified aggravating or mitigating factor is irrelevant to determining the length of an exclusion and may not be considered.

3. An excluded individual has a right to a de novo hearing.

Any individual who is excluded has a right to a hearing before an administrative law judge. Such a hearing is conducted pursuant to section 205(b) of the Act. That section has been interpreted on numerous occasions to afford a party who is entitled to a hearing a de novo hearing and an independent decision by an administrative law judge.

That is not to suggest that the administrative law judge is free to ignore entirely the determination that is made by the I.G. The I.G. has expertise in making exclusion determinations and her determinations deserve to be respected. The I.G.'s determination should be sustained as reasonable if that determination falls within a reasonable range of possible exclusions given the evidence that is presented. However, the administrative law judge must evaluate independently the evidence relating to the aggravating and mitigating factors that are set forth in the regulations. If the administrative law judge concludes, based on his or her independent and de novo evaluation of the evidence, that the exclusion imposed by the I.G. departs significantly from that which the administrative law judge decides is reasonable, then the administrative law judge may modify the length of the exclusion to assure that the exclusion falls within a reasonable range of exclusions.

4. The I.G. established the presence of two aggravating factors.

The aggravating factors that the I.G. proved are as follows:

a. Petitioner was sentenced to incarceration (42 C.F.R. � 1001.102(b)(5)).

Petitioner was sentenced to a term of 15 years' incarceration (of which five years was suspended) in return for his agreement to plead guilty to the felony charge of unlawful distribution of a controlled substance. I.G. Ex. 4 at 1 - 2. Petitioner's sentence to a term of incarceration comprises an aggravating factor under 42 C.F.R. � 1001.102(b)(5).

b. Petitioner was the subject of an adverse action by a State agency that was based on the same set of circumstances that are the basis for imposition of an exclusion of Petitioner (42 C.F.R. � 1001.102(b)(9)).

On May 24, 2000 Petitioner entered into a consent order with the Oklahoma Board of Nursing to surrender his license to practice licensed practical nursing in Oklahoma. I.G. Ex. 7. He entered into that order in response to a complaint before the Oklahoma Board of Nursing that emanated from his conviction of unlawful distribution of a controlled substance. I.G. Ex. 6; see I.G. Ex. 4 at 1. The adverse State action against Petitioner is based on the same facts as the basis for Petitioner's conviction and thus comprises an aggravating factor under 42 C.F.R. � 1001.102(b)(9).

I note that the I.G. incorrectly averred that Petitioner's license surrender was an aggravating factor under 42 C.F.R. � 1001.102(b)(8). I.G.'s brief at 5, 12, 13. However, the I.G.'s intent to identify an aggravating factor under subsection (b)(9) of the regulation is clear and I find no prejudice to Petitioner in the I.G.'s misidentification of the section of the regulation which describes the appropriate aggravating factor.

5. Petitioner did not establish the presence of any mitigating factor.

Petitioner argues that a mitigating factor exists in this case arising out of the assistance that he provided to prosecuting authorities. He asserts that the assistance he gave led to the conviction of another individual.

A mitigating factor exists in a case if the excluded individual's cooperation with federal or State authorities resulted in others being convicted or excluded from participating in Medicare, Medicaid, and all other federally funded health care programs. 42 C.F.R. � 1001.102(c)(3)(i). The regulation requires as a prerequisite to establishing a mitigating factor that the cooperation that an excluded individual gives to prosecuting authorities results in the conviction or exclusion of others. Proof of cooperation will not qualify as a mitigating factor in the absence of evidence that the cooperation resulted in conviction or exclusion of others.

Petitioner did not prove that he met the criteria for a mitigating factor under 42 C.F.R. � 1001.102(c)(3)(i). Petitioner provided to his then-counsel a handwritten list of other individuals who Petitioner alleged engaged in unlawful conduct regarding controlled substances. Petitioner's then-counsel turned the list over to prosecuting authorities. P. Ex. 2 at 1 - 2. Subsequently, one of the individuals on the list was convicted of a controlled substance-related offense. Although this evidence establishes a degree of cooperation by Petitioner with prosecuting authorities, it does not prove that his cooperation resulted in anyone's conviction. Petitioner has offered no evidence that prosecuting authorities used his list to investigate, prosecute, or convict any other individual.

Petitioner argues that additional evidence should serve to mitigate the length of the exclusion that was imposed against him. Among other things he cites his cooperative behavior with authorities, his participation in a voluntary treatment program for substance abuse, and the support of his parole officer, his former employer and other individuals. This evidence is not relevant to deciding whether the exclusion imposed against Petitioner is unreasonable. I may not consider it because it does not relate to any of the mitigating factors delineated under 42 C.F.R. � 1001.102(c).

6. An exclusion of 10 years is unreasonable. An exclusion of six years is reasonable.

Although 42 C.F.R. � 1001.102 establishes the sole factors which may be considered in deciding whether an exclusion is reasonable, it does not prescribe the weight which is to be given to any factor. The regulation contains no formula prescribing any exclusion length beyond the five-year minimum period based on the presence of aggravating factors or the absence of mitigating factors. The regulation merely identifies the factors which may be used to lengthen an exclusion beyond the minimum period.

I must look to the purpose of the Act in order to decide what is the reasonable length of an exclusion where aggravating or mitigating factors are present in the absence of any statement in the regulation as to how much weight must be given to an aggravating or mitigating factor. Section 1128 of the Act is remedial. Its purpose is not to punish the excluded individual but to protect federally funded health care programs, and the beneficiaries and recipients of program funds, from an individual whose conduct establishes him or her not to be trustworthy. In assessing the length of any exclusion that is imposed under section 1128, the ultimate issue that must be addressed is: how long of an exclusion is reasonably necessary to protect programs and their beneficiaries and recipients from an untrustworthy individual?

An individual may not be excluded arbitrarily for a period of more than five years simply because aggravating factors are present. The evidence that pertains to those factors must be weighed in order to establish the degree of untrustworthiness that is manifested by the excluded individual. An exclusion that is not based on what the evidence shows about the trustworthiness of the excluded individual may be arbitrary and unreasonably punitive.

In this case the record does not show that the I.G. weighed the evidence carefully. The I.G. has not advanced any argument - aside from merely citing the presence of aggravating factors - to justify the 10-year exclusion that she imposed against Petitioner. I.G.'s brief at 12 - 14; I.G.'s reply brief at 7 - 9.

At first blush the evidence which pertains to the aggravating factors suggests that Petitioner is a highly untrustworthy individual who should be excluded for a lengthy period. Petitioner was sentenced to 15 years' incarceration as a response to his guilty plea (five years of this sentence were suspended), suggesting that the sentencing judge found him to be a highly culpable individual. I.G. Ex. 4 at 1; I.G. 5 at 3. Petitioner surrendered his license to practice nursing rather than face a hearing into allegations relating to his conviction. I.G. Ex. 7.

However, there is more to this case than at first meets the eye. While it is true that Petitioner received a lengthy sentence for his crime, his actual period of incarceration was rather brief. Petitioner was paroled after only 17 months' incarceration. P. Ex. 3 at 1; see Petitioner's brief at 2. On November 16, 2000, the Oklahoma Board of Nursing reinstated Petitioner's license as a practical nurse subject to conditions which included his participation in a peer assistance program for nurses who have alcohol or substance abuse problems. P. Ex. 5; see P. Ex. 6. Thus, Petitioner's license to practice nursing in Oklahoma was surrendered only for a period of approximately six months.

This evidence, which relates to the two aggravating factors established in this case, shows Petitioner to be far less untrustworthy than is indicated by the mere facts of his original sentence and his license surrender. Obviously, officials in Oklahoma have placed sufficient trust in Petitioner to release him from custody and to restore his license.

Establishing the length of an exclusion is not a task that lends itself to precise guidelines. Here, however, the evidence shows that the 10-year exclusion that the I.G. determined to impose is beyond a reasonable range and is excessive. An exclusion of 10 years would be reasonable only if the evidence showed that Petitioner manifests a very high degree of untrustworthiness. The fact that authorities in Oklahoma have found Petitioner to be worthy of their trust - albeit limited and carefully conditioned - demonstrates that Petitioner is not so untrustworthy.

I modify the exclusion to a term of six years. A six-year exclusion takes into account the nature of Petitioner's crime and the risks that are posed by permitting an individual who has abused controlled substances to treat program beneficiaries and recipients. But, it also takes into account the evidence in this case which shows that Petitioner has worked to regain the trust of Oklahoma authorities.

7. I do not have authority to change the beginning date of Petitioner's exclusion so as to make it retroactive to the date his incarceration began.

Petitioner requests that I modify the exclusion so that it begins to run on May 5, 1999, the date his incarceration began and he was taken out of the health care delivery system. I do not have the authority to change the beginning date of an exclusion as Petitioner requests. Therefore, I deny his request

8. Petitioner's failure to receive the I.G.'s preliminary notice is not a basis for invalidating the I.G.'s exclusion determination.

Petitioner asserts that because he failed to receive the I.G.'s preliminary notice the I.G.'s exclusion determination should be invalidated. Even assuming that Petitioner failed to receive the I.G.'s preliminary notice, such failure does not constitute a basis for invalidating the exclusion decision made in his case. I have afforded Petitioner the opportunity to offer de novo any evidence that might be relevant to his case. And, I have made an independent decision as to whether the exclusion that the I.G. determined to impose is unreasonable. Petitioner's assertion that he has been denied the opportunity to present relevant evidence to the I.G. is moot, because Petitioner has had the opportunity to present the identical evidence in this proceeding.

Steven T. Kessel

Administrative Law Judge