SUBJECT:

Robert C. Richards, M.D.,

Petitioner,

The Inspector General

A. Issues

1. Section 1128(a)(4) of the Act directs the I.G. to exclude Petitioner; and

2. The length of the exclusion, five years in this case, is reasonable.

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 separate heading. I discuss each Finding in detail.

1. Section 1128(a)(4) of the Act directs the I.G. to exclude Petitioner.

[a]ny individual or entity that has been convicted for an offense which occurred after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

The enactment date of the Health Insurance Portability and Accountability Act of 1996, often referred to as "HIPAA," was August 21, 1996. Thus, section 1128(a)(4) of the Act requires an exclusion of anyone who is convicted of a felony that occurred after August 21, 1996, relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

The unchallenged evidence establishes that on March 17, 2003, a criminal information was issued against Petitioner in the Fourth Judicial District Court in and for Utah County, State of Utah. I.G. Ex. 4. The criminal information alleged 18 separate felony counts against Petitioner. Id. The allegations in the complaint included 12 counts in which Petitioner was charged with obtaining a prescription under false pretenses. Id. at 2 - 5. With the exception of counts 13 - 15, which did not allege the dates when crimes were committed, each of these counts alleged that, on occasions between February 25, 1998 through March 19, 1999, Petitioner:

did knowingly and intentionally acquire or obtain possession of, procure or attempt to procure the administration of, obtain a prescription for, prescribe or dispense to any person known to be attempting to acquire or obtain possession of, or procure the administration of any controlled substance by misrepresentation, fraud, forgery, deception, subterfuge, alteration of a prescription or written order for a controlled substance, or the use of a false name or address.

as a person who is licensed under this chapter did manufacture, distribute, or dispense a controlled substance, did manufacture, distribute, or dispense a controlled substance to another licensee or any other authorized person not authorized by this license; or omit, remove, alter, or obliterate a symbol required by this chapter or by a rule issued under this chapter; or refuse or fail to make, keep, or furnish a record notification, order form, statement, invoice, or information required under this chapter.

Id.

On July 3, 2003, Petitioner agreed to plead guilty to all 18 counts of the information. I.G. Ex. 5. In doing so, Petitioner averred explicitly that he pled guilty voluntarily and that he understood the nature and elements of the offenses to which he pled. Id. at 1. As an element of Petitioner's plea agreement, it was agreed that the State of Utah would recommend that Petitioner's guilty plea be held in abeyance for a period of 24 months during which the court would not enter a judgment or impose a sentence against Petitioner. Id. at 2. It was also agreed that, upon successful completion of the abeyance period, the State of Utah may, upon Petitioner's motion, dismiss the criminal charges against Petitioner. Id.

Finally, it was agreed that:

By entering this Plea Agreement, in which the Court will hold my guilty pleas in abeyance, I am knowingly and intelligently waiving my right to a speedy trial and my right to be sentenced not less than two nor more than forty-five days after the Court accepts my guilty pleas.

I.G. Ex. 5, at 4. On July 3, 2003, the court entered an order accepting Petitioner's guilty pleas. Id.

On July 23, 2003, a document entitled "Plea in Abeyance" was formally entered in Petitioner's case. I.G. Ex. 6. The document recited that Petitioner's plea was being held in abeyance and set forth a list of conditions that Petitioner promised to fulfill during his abeyance period. Id. at 2 - 3, 5 - 6.

I find that the evidence of the charges filed against Petitioner, his subsequent plea to those charges, and the court's acceptance of that plea, proves unequivocally that Petitioner was convicted of felonies as are described at section 1128(a)(4) of the Act. As a consequence, the I.G. must exclude Petitioner. In reaching this overall Finding, I make the following conclusions:

a. Petitioner was "convicted" of felonies as is defined by section 1128(i) of the Act.

In his hearing request, Petitioner contends that he was not, in fact, convicted of any criminal offense. I.G. Ex. 2, at 1. He asserts that no criminal conviction was in fact entered against him. Id.

But, notwithstanding these arguments, I decide that Petitioner became "convicted" of felonies as is defined by section 1128(i) of the Act by agreeing to enter a guilty plea in abeyance under Utah law that was accepted by the court before which Petitioner appeared. Section 1128(i) of the Act defines a conviction to include the following circumstances, among others:

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

Act, sections 1128(i)(3), (4). Petitioner's plea in abeyance fits squarely into these definitions of a conviction.

First, Petitioner entered a guilty plea that was accepted by the Utah State court before which he appeared. For purposes of satisfying the definition of a conviction under section 1128(i)(3) of the Act, it does not matter whether final entry of judgment against Petitioner is deferred or whether Petitioner might ultimately move to have the charges against him dismissed if he satisfies the conditions of his plea. Section 1128(i)(3) of the Act requires only that a plea of guilty be "accepted" by a court and that plainly happened in this case. That is apparent from the face of Petitioner's plea agreement, in which he specifically agreed to plead guilty to the 18 counts of the criminal information, and which agreement was accepted by the court before which Petitioner appeared. I.G. Ex. 5.

Second, Petitioner's plea and the court's acceptance of that plea is a deferred adjudication or other arrangement or program where a final judgment of conviction is withheld pursuant to section 1128(i)(4) of the Act. Petitioner entered a provisional plea of guilty to the 18 counts in the criminal information. His bargain with the State of Utah was that, after two years, the counts might be dismissed but only if Petitioner complied with the terms of his plea agreement. I.G. Ex. 5, at 2; I.G. Ex. 6, at 2 - 3, 5 - 6. Implicit in his agreement was that a judgment of conviction could be entered against Petitioner without adjudication of the merits of his case and a sentence could be imposed against him in the event that Petitioner failed to comply with any of the conditions of his plea agreement. This agreement precisely fits into the concept of "deferred adjudication."

For purposes of this decision, I am assuming to be true Petitioner's contention that no "conviction" was entered against him under the laws of the State of Utah. It is evident from the face of Petitioner's plea agreement that the criminal charges to which Petitioner pled guilty could ultimately be dismissed if Petitioner complied with all of the conditions of the agreement. But, the fact that no conviction was entered against Petitioner under Utah law does not mean that Petitioner was not convicted within the meaning of sections 1128(i)(3) and (4) of the Act. Congress enacted sections 1128(i)(3) and (4) of the Act specifically to make certain that the I.G. would exclude persons who entered deferred adjudication programs even if they were not finally convicted of offenses under State laws. Under these sections, a conviction may occur even if a final judgment of conviction is not entered against the party who pleads guilty to an offense. Indeed, the whole concept of deferred adjudication is to avoid the stigma of a docketed conviction of a party who pleads guilty or no contest to criminal charges.

This analysis has been widely accepted in other cases involving similar or identical plea arrangements made pursuant to Utah law. The facts of this case are in critical respects on all fours with those of an earlier decision involving a guilty plea in abeyance made by an excluded party in the State of Utah, James F. Allen, M.D.F.P., DAB CR71 (1990). There, the petitioner also entered a guilty plea to be held in abeyance pursuant to Utah law. He argued before me that the plea had not been accepted by the Utah State court nor was it a deferred adjudication or other arrangement because a final judgment of guilt had not been entered against him. I held in Allen that the petitioner's plea was "accepted" within the meaning of section 1128(i)(3) of the Act and that it was an "other arrangement or program where judgment of conviction has been withheld" within the meaning of section 1128(i)(4) of the Act. It is unnecessary for me to visit in depth in this decision the reasoning that I gave in Allen except to say that I held there, and reiterate here, that a unified federal standard, as expressed in the language of sections 1128(i)(3) and (4) of the Act, controls in deciding whether a plea is "accepted" and whether it constitutes a deferred adjudication or other arrangement or program where judgment of conviction is withheld. The petitioner's plea in Allen and Petitioner's plea here satisfy that federal standard.

A plea arrangement in Utah very similar to that which I consider here was held in Travers v. Shalala, 20 F.3d 993 (9^th Cir. 1994), to constitute a conviction within the meaning of section 1128(i)(4) of the Act. In Travers, the petitioner entered into a deferred adjudication program in the State of Utah in which he pled no contest to a criminal charge subject to possible dismissal if he complied with the terms of his plea agreement. The Ninth Circuit held that this arrangement plainly constituted a conviction under section1128(i)(4) of the Act. It also held that what constitutes a conviction under section 1128 of the Act is an issue of federal statutory application and not one of State law.

Consequently, the evidence and law in this case are unequivocal. Petitioner was "convicted" of felony offenses within the meaning of sections 1128(i)(3) and (4) of the Act.

b. The felonies of which Petitioner was convicted were perpetrated after the enactment date of HIPAA.

The felonies of which Petitioner was convicted all transpired in a time frame that ran from on or about February 25, 1998 through March 19, 1999. I.G. Ex. 4. Thus, all of these felonies took place after August 21, 1996, the enactment date of HIPAA.

c. Petitioner's felony convictions related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

On their face, the felonies of which Petitioner was convicted describe crimes that are related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Indeed, the explicit allegations of the criminal information that was filed against Petitioner assert that Petitioner committed crimes that clearly fall within the purview of section 1128(a)(4) of the Act. Counts 1 - 6 charge, among other things, that Petitioner unlawfully "did manufacture, distribute, or dispense a controlled substance." I.G. Ex. 4, at 1 - 2. Counts 7 - 18 charge, among other things, that Petitioner did unlawfully "prescribe or dispense" a controlled substance. Id. at 2 - 5.

d. Petitioner's exclusion is mandatory.

Section 1128(a)(4) of the Act is a subdivision of section 1128(a). Section 1128(a) of the Act states that the Secretary "shall exclude" individuals who are convicted of any of the crimes that fall within the section's subdivisions (emphasis added), including those persons who are convicted of crimes that are described at section 1128(a)(4). Petitioner was convicted of offenses that are described at section 1128(a)(4). Consequently, the Secretary has no discretion. He must exclude Petitioner.

2. An exclusion of five years is reasonable as a matter of law.

The Act requires that, with an exception that I discuss below at Finding 3, an individual who is excluded pursuant to any of the subsections of section 1128(a) of the Act must be excluded for a minimum period of five years. Act, section 1128(c)(3)(B). The I.G. excluded Petitioner for a period of five years, in other words, for the statutory minimum period. This is reasonable as a matter of law.

3. I have no authority to order the I.G. to grant Petitioner a waiver.

In his hearing request, Petitioner asserted that the I.G. should waive the requirement that Petitioner be excluded due to the nature of Petitioner's practice and the needs of his patients. I have no authority to compel the I.G. or the Secretary to issue a waiver.

The sole possible exception to the minimum mandatory exclusion requirement for an exclusion imposed under section 1128(a) of the Act is that:

upon the request of a State, the Secretary may waive the exclusion under subsection (a)(1) in the case of an individual or entity that is the sole community physician or sole source of essential specialized services in a community. The Secretary's decision whether to waive the exclusion shall not be reviewable.

Act, section 1128(c)(3)(B). This language makes it clear that only the Secretary may decide to grant a waiver request. In light of that, I have no discretion to rule on Petitioner's request.

Moreover, it does not appear that Petitioner would qualify for a waiver in any event. The waiver exception applies only to the case where a party is excluded under section 1128(a)(1) of the Act, which applies to exclusions for offenses related to the delivery of Medicare or State Medicaid items or services. Petitioner is not excluded under section 1128(a)(1), but under section 1128(a)(4) of the Act. Moreover, the waiver request must be made by a State. Petitioner has offered no evidence to show that the State of Utah made a waiver request on his behalf.

Steven T. Kessel

Administrative Law Judge