Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Gary Alan Katz, R.Ph., |
DATE: April 24, 2002 |
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The
Inspector General
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Docket No.C-01-684 Decision No. CR896 |
DECISION | |
DECISION Gary Alan Katz,
R.Ph. (Petitioner) is excluded from participation in Medicare, Medicaid,
and all other Federal health care programs for a period of ten years pursuant
to section 1128(a)(4) of the Social Security Act (Act), effective April
19, 2001, based upon his felony conviction for the manufacture of marijuana.
There is a proper basis for exclusion and a ten-year exclusion is reasonable. PROCEDURAL
HISTORY Petitioner
was notified of his exclusion by letter dated March 30, 2001. The Inspector
General (I.G.) cited section 1128(a)(4) of the Act (42 U.S.C. � 1320a-7(a)(4))
as the basis for Petitioner's exclusion. Petitioner appeals the I.G.'s
action by letter dated May 14, 2001. Petitioner advances several arguments
in support of his appeal which challenges both the basis for the exclusion
and the reasonableness of the length of the period of exclusion. On June 5,
2001, the case was assigned to Administrative Law Judge (ALJ) Carolyn
C. Hughes for hearing and decision. On September 14, 2001, Judge Hughes
conducted a telephonic prehearing conference, the substance of which is
memorialized in her order of September 21, 2001 and her amended order
of September 25, 2001. The parties agreed during the conference that no
oral hearing is necessary and that the matter may be resolved on briefs.
Judge Hughes denied Petitioner's request for stay but she granted an extended
briefing schedule. The I.G. filed her brief on November 15, 2001, with
attached exhibits 1 through 7 (I.G. Ex.). Petitioner filed his response
on January 16, 2002, with exhibits 1 through 5 (P. Ex.). The I.G. elected
to waive filing a reply brief which was due not later than February 26,
2002. The case was assigned to me for decision on October 11, 2001. The offered
exhibits are admitted. The only inconsistency in the facts alleged by
the parties relates to the duration of Petitioner's misconduct. The factual
inconsistency is resolved in favor of Petitioner for purposes of this
motion. The parties have identified no other material issues of fact in
dispute. The parties have waived an oral hearing. Furthermore, summary
judgment is appropriate and no hearing is necessary in this case for a
full and fair disposition of the issues presented. FINDINGS OF FACT The following
findings of fact are based upon the uncontested and undisputed assertions
of fact in the parties pleadings and the exhibits admitted. 1. Petitioner
was, on the date of the I.G. action, a pharmacist licensed by the State
of Michigan and authorized to participate in Medicare, Medicaid or other
Federal health care programs, although Petitioner was not working as a
pharmacist at that time. 2. On November
24, 1999, judgment was entered in case number 99-011039-FH by Judge Daniel
A. Burress, 44th Circuit Court, State of Michigan, finding
Petitioner guilty of the following felony offense: on or about May 5,
1998, in Genoa Township, Livingston County, Michigan, manufacture of five
kilos or more but less than 45 kilos of marijuana or a mixture containing
marijuana and 20 marijuana plants or more but less than 200 plants, contrary
to the statutes of the State of Michigan (I.G. Ex. 3; P. Ex. 5). 3. Petitioner was sentenced to: serve a minimum of one year confinement up to a maximum of seven years confinement with credit for one day served, to pay a $150.00 forensic laboratory fee, to pay a $60 Victim's Rights Fund fee as a condition of parole, and a six month driver's license suspension. (I.G. Ex. 3; P. Ex. 5). 4. By letter
dated March 30, 2001, the I.G. advised Petitioner that he was being excluded
from further participation in Medicare, Medicaid or other Federal health
care programs for a period of 10 years, effective 20 days after the date
of the letter, based upon Petitioner's conviction as described in Finding
2. 5. The I.G.
found three aggravating factors that justify an extended period of exclusion
in this case: (a) the acts for which Petitioner was convicted occurred
over a period of one year or more from 1995 through May 5, 1998; (b) Petitioner's
sentence included incarceration; and (c) the Petitioner has a prior conviction
or was subject to adverse action by a Federal, State or local government
agency or board, specifically, the State of Michigan, Board of Pharmacy
suspended Petitioner's pharmacist's license for a minimum period of three
years effective October 7, 2000. I.G. Ex. 1. 6. Two aggravating
factors exist: (a) Petitioner's sentence included incarceration, and (b)
Petitioner was subject to adverse action by the Michigan Board of Pharmacy
which suspended his pharmacist's license for a minimum period of three
years. 7. Petitioner
was not convicted for acts that occurred over a period of one year or
more. CONCLUSIONS
OF LAW 1. Summary
judgment is appropriate in this case as there are no material facts in
dispute. 2. Petitioner's
conviction was for a felony criminal offense involving the manufacture
of a controlled substance within the meaning of the Act, section 1128(a)(4)
(42 U.S.C. 1320a-7(a)(4)). 3. Petitioner
must be excluded from participation in any Federal health care program
for a minimum period of five years pursuant to section 1128(c)(3)(B) of
the Act (42 U.S.C. � 1320a-7(c)(3)(B)) due to his conviction. 4. The I.G.
may increase the term of exclusion based on a finding of any of the aggravating
factors specified at 42 C.F.R. � 1001.102(b). 5. If the I.G.
finds that any of the aggravating factors specified at 42 C.F.R. � 1001.102(b)
justify a term of exclusion greater than the statutory minimum exclusion
of five years, then the I.G. may consider the mitigating factors specified
at 42 C.F.R. � 1001.102(c) to reduce the period of exclusion to no less
than five years. 6. The range
of exclusionary periods contemplated by the Act and the Secretary's regulations
extend from a minimum of five years to permanent exclusion, in the case
of a mandatory exclusion under section 1128(a). See
Act, � 1128(c)(3)(B) and (G) (42 U.S.C. � 1230a-7(c)(3)(B) and (G)); 42
C.F.R. � 1001.102(a) and (d). 7. Two aggravating
factors have been established by the I.G. by a preponderance of evidence:
(a) Petitioner's sentence included incarceration, and (b) Petitioner was
subject to adverse action by the Michigan Board of Pharmacy which suspended
his pharmacist's license for a minimum period of three years. 8. The I.G.
has not established by the preponderance of the evidence that Petitioner
was convicted for acts that occurred over a period of one year or more. 9. None of
the mitigating factors specified at 42 C.F.R. � 1001.102(c) have been
proven by Petitioner, who bears the burden to make such showing. 42 C.F.R.
� 1005.15(b) and (c). 10. A 10-year exclusion (5 years mandatory and a 5 year extension) is within a reasonable range and is not unreasonable. DISCUSSION A.
APPLICABLE LAW Petitioner's
right to a hearing by an ALJ and judicial review of the final action of
the Secretary is provided by section 1128(f) of the Act (42 U.S.C. � 1230a-7(f)).
Petitioner's request for a hearing was timely filed and I do have jurisdiction.
However, the Secretary has by regulation limited my scope of review to
two issues: (1) whether there is a basis for the imposition of the sanction;
and, (2) whether the length of the exclusion is unreasonable. 42 C.F.R.
� 1001.2007(a)(1). The standard of proof is a preponderance of the evidence
and there may be no collateral attack of the conviction that is the basis
for the exclusion. 42 C.F.R. � 1001.2007(c) and (d). Petitioner bears
the burden of proof and persuasion on any affirmative defenses or mitigating
factors and the I.G. bears the burden on all other issues. 42 C.F.R. �
1005.15(b) and (c). Pursuant to
section 1128(a)(4) of the Act, the Secretary must exclude from participation
in the Medicare and Medicaid programs any individual or entity that has
been convicted of a felony criminal offense related to the unlawful manufacture
of a controlled substance. Section 1128(c)(3)(B) of the Act provides that
an exclusion imposed under section 1128(a)(4) of the Act shall be for
a minimum period of five years, unless specified aggravating or mitigating
factors are present which form the basis for lengthening or shortening
the period of exclusion. See
also 42 C.F.R. � 1001.102(a),
(b), and (c). Only if the aggravating factors justify an exclusion of
longer than five years, may mitigating factors be considered as a basis
for reducing the period of exclusion to no less than five years. 42 C.F.R.
�1001.102(c). Section 1001.102(b)
of 42 C.F.R. provides, in relevant part, that the following factors may
be considered to be aggravating and a basis for lengthening the period
of exclusion:
Section 1001.102(c) of 42 C.F.R. provides that only if any of the aggravating factors justify a period of exclusion longer than five years, may mitigating factors be considered as a basis for reducing the period of the exclusion to no less than five years. The following factors may be considered as mitigating and a basis for reducing the period of exclusion:
Evidence which
does not relate to an aggravating factor or a mitigating factor is irrelevant
to determining the length of an exclusion. The burden is upon petitioners
to show the presence of mitigating factors. The I.G. bears the burden
of proving the existence of aggravating factors. 42 C.F.R. � 1005.15;
John (Juan) Urquijo, DAB
No. 1735 (2000). B.
ISSUES
C. ANALYSIS
Summary disposition is appropriate where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary disposition must allege facts which, if true, would refute the facts relied upon by the moving party. See, e.g., Fed.R.Civ.P. 56(c). The only issue of material fact in dispute relates to the duration of Petitioner's misconduct and, for purposes of this motion, I resolve that issue in favor of Petitioner. Because I find no other inconsistencies in the facts alleged by the parties and no other specific factual disputes have been identified by the parties, I conclude there are no disputed issues of material facts. The issues may thus be decided by application of the law to the undisputed facts and summary judgment is appropriate.
The preponderance
of the evidence shows that Petitioner was convicted of a felony offense
of manufacture of marijuana. The fact that it was a felony conviction
is indicated by the sentence to confinement of one year or more. Petitioner
does not dispute that he was convicted and sentenced. In fact, Petitioner
provided the transcript of the criminal proceeding at P.Ex. 5, which confirms
both the conviction and sentence. Petitioner concedes that a minimum exclusion of five years is mandatory if Petitioner is considered to have committed a felony related to the manufacture of marijuana. Petitioner argues however, that the I.G. could have elected to exclude Petitioner under the permissive exclusion provisions of the Act (� 1128(b)(3) (42 U.S.C. � 1320a-7(b)(3)) as implemented by 42 C.F.R. � 1001.401) which would have allowed the I.G. to impose less than a five-year exclusion. Petitioner's argument is in error as � 1128(b)(3) of the Act and 42 C.F.R. � 1001.401 by their plain language only apply to a misdemeanor conviction for the unlawful manufacture, distribution, prescription or dispensing of a controlled substance. Petitioner was convicted by a Michigan court and sentenced to a year or more confinement which clearly constitutes a felony conviction and that conviction and sentence are not subject to collateral attack in this forum. 42 C.F.R. � 1001.2007(d). The felony conviction of manufacture of a controlled substance triggers the mandatory exclusion provided by � 1128(a)(4) of the Act and neither the I.G. nor the Secretary are granted discretion not to exclude or to characterize the conviction so to avoid mandatory exclusion. Petitioner cites no authority to the contrary.
I note that
the regulations strictly limit my jurisdiction in cases such as this.
I may decide whether or not the I.G. had a proper basis for the exclusion
of Petitioner and whether the period of exclusion for Petitioner was "unreasonable."
The Departmental Appeals Board (DAB) has made clear that the role of the
ALJ in cases such as this is to conduct a "de novo" review as
to the facts related to the basis for the exclusion and the facts related
to the existence of aggravating and mitigating factors identified at 42
C.F.R. � 1001.102. See
Joann Fletcher Cash, DAB
No. 1725 (2000), fn. 6, and cases cited therein. The regulation specifies
that I must determine whether the length of exclusion imposed is "unreasonable"
(42 C.F.R. � 1001.2007(a)(1)). The DAB has explained that in determining
whether a period of exclusion is "unreasonable," I am to consider whether
such period falls "within a reasonable range." Cash,
fn. 6. The DAB cautions that whether I think the period of exclusion too
long or too short is not the issue. I am not to substitute my judgment
for that of the I.G. and may only change the period of exclusion in limited
circumstances. Despite a thorough
search of prior DAB decisions and Federal precedent, I have found no clear
statement of what constitutes the "reasonable range" referred to by the
DAB. My review of the statute and regulations shows that the range of
possible exclusions provided for in the case of mandatory exclusions range
from the minimum of 5 years to a maximum of permanent exclusion. 42 U.S.C.
� 1320a-7(c)(3)(B) and (G), 42 C.F.R. � 1001.102(a) and (d). This is the
only range I have found specified in the law and it seems to be "reasonable." My reading
of 42 C.F.R. � 1001.102 is that with a mandatory exclusion under section
1128(a) of the Act, there is an automatic exclusion of five years. Pursuant
to 42 C.F.R. � 1001.102(d) one prior conviction for conduct that would
cause mandatory exclusion under section 1128(a) of the Act, increases
the minimum period of exclusion to 10 years and two prior convictions
automatically causes permanent exclusion. The five-year
and ten-year minimum exclusions may only be extended if the I.G. can point
to evidence that one or more of the aggravating factors specified at 42
C.F.R. � 1001.102(b) are present. The regulations do not limit the additional
period of exclusion the I.G. may impose based upon the presence of aggravating
factors. The regulations also do not specify how much of an extension
is warranted by the existence of an aggravating factor. The DAB has indicated
that it is not the number of aggravating factors that is determinative
rather, it is the quality of the circumstances, whether aggravating or
mitigating, which is controlling in analyzing these factors. Barry
D. Garfinkel, M.D., DAB No. 1572 (1996). Section 1001.102
of 42 C.F.R. provides that when aggravating factors justify an exclusion
of more than the mandatory minimum period, then the I.G. may consider
any of the three specified mitigating factors if they are shown to exist.
In Urquijo, the DAB suggested
that the I.G.'s failure to consider a mitigating factor amounts to an
abuse of discretion. The DAB also made clear in Urquijo
that: if the I.G. considers an aggravating factor to extend the period
of exclusion and that factor is not later shown to exist on appeal; or
if the I.G. fails to consider a mitigating factor that is shown to exist,
then the ALJ may make a decision as to the appropriate extension of the
period of exclusion beyond the minimum. Thus, my determination
of whether or not the exclusionary period in this case is unreasonable
hinges on three-points: (1) whether the period of exclusion is within
the reasonable range; (2) whether the I.G. has shown the existence of
aggravating factors; and, (3) whether the Petitioner has shown that there
are mitigating factors that the I.G. failed to consider. The 10-year
exclusion ordered in this case is more than the minimum 5-year exclusion,
but less than permanent exclusion. The 10-year exclusion is within the
range established by the regulations, and it is reasonable. The I.G. found
three aggravating factors existed that justified an extended period of
exclusion in this case: (a) the acts for which Petitioner was convicted
occurred over a period of one year or more from 1995 through May 5, 1998;
(b) Petitioner's sentence included incarceration; and (c) the Petitioner
has a prior conviction or was subject to adverse action by a Federal,
State or local government agency or board, specifically, the State of
Michigan, Board of Pharmacy suspended Petitioner's pharmacist's license
for a minimum period of three years effective October 7, 2000. I.G. Ex.
1. The I.G. has shown by a preponderance of the evidence that Petitioner's
sentence included incarceration and that Petitioner's pharmacist license
was suspended for three years. Petitioner does not argue to the contrary. However, upon
review of P.Ex. 5, pp. 37-38, I agree with Petitioner that he was not
convicted of an offense that occurred over a period of one year or more.
Judge Burress only found that the conduct occurred on or about May 5,
1998. Certainly, one may infer that growing 20 or more marijuana plants
occurred over a period of more than one day, but certainly not one year.
The I.G. incorrectly relies upon the felony complaint for the conclusion
that the conduct occurred over the course of a year or more. I.G. Ex.
3, I.G. Brief, p. 4. I find that the conviction controls and that the
I.G. has thus failed to prove this aggravating factor. The I.G. has shown the existence of two aggravating factors. The existence of two aggravating factors justifies extending the period of exclusion beyond the minimum period of five years. The existence of the aggravating factors also triggers the requirement to consider any mitigating factors under 42 C.F.R. � 1001.102(c). But, the regulation is clear that only the three listed mitigating factors may be considered and none of those mitigating factors have been shown by Petitioner to be present in this case. Instead, Petitioner seeks to excuse his unlawful conduct arguing that: the manufacture of marijuana was for Petitioner's own use; Petitioner had not practiced as a pharmacist for more than two years prior to his arrest; he never used marijuana while working as a pharmacist; the attorney who represented him in the license revocation proceeding did a poor job and gave poor advice regarding challenging the I.G. action; Petitioner was addicted to marijuana; and there is no evidence that the use of marijuana adversely affected Petitioner's performance as a pharmacist. I accept none of these arguments as they are not recognized as mitigating factors under the regulation. Petitioner was convicted of a felony and not misdemeanor offenses involving loss to the Medicare/Medicaid Program, hence the first mitigating factor is not present. There is no evidence of record that Judge Buress found Petitioner suffered any mental disease or defect that contributed to or caused his criminal conduct and the second mitigating factor is not present. Regarding the third permissible mitigating factor, there is no evidence that Petitioner aided authorities in excluding others for program fraud or other misconduct. Petitioner
also argues that lesser periods of exclusion were ordered in other cases
on more egregious facts. However, Petitioner cites no authority for why
I should consider this argument. The I.G. erroneously
relied upon three aggravating factors when it determined to extend the
period of exclusion in this case from the minimum of five years to ten
years. The I.G.'s error places the burden upon me to reassess the appropriateness
of imposing more than the minimum period of exclusion given the existence
of two aggravating factors. I have carefully considered the two aggravating
factors in this case and find that a 10-year exclusion is very reasonable.
Although Petitioner was sentenced to serve a minimum of one-year confinement,
the maximum to which he was subject was seven years. The maximum authorized
confinement indicates the seriousness of the offense. Further, as Petitioner
points out, the suspension of Petitioner's pharmacist license was for
much longer than the minimum, also an indication of the seriousness of
the offense. Petitioner's Response, pp. 9-10. Petitioner's attempts to
minimize or excuse his conduct do not militate against extending the minimum
period of exclusion by five years as his excuses do not constitute mitigating
factors under the regulations. The effective date of Petitioner's exclusion is April 19, 2001, 20 days after the March 30, 2001, I.G. notice of exclusion. 42 C.F.R. � 1005.20(b). CONCLUSION For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all other Federal health care programs for a period of ten years effective April 19, 2001. |
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JUDGE | |
Keith W. Sickendick Administrative Law Judge
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