Jennifer Franklin, M.D., DAB CR5512 (2020)

DECISION

I affirm the ten-year exclusion that the Inspector General (IG) of the United States Department of Health and Human Services imposed on Jennifer Franklin, M.D. (Petitioner).

I. Background

In a June 28, 2019 notice, the IG informed Petitioner that she was being excluded from participation in all federal health care programs under 42 U.S.C. § 1320a-7(a)(4) for a period of ten years based on a felony conviction in the United States District Court for the Eastern District of Michigan (District Court) of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Exhibit (Ex.) 1.  The IG stated that she was imposing a length of exclusion in excess of the minimum statutory five-year period because the following aggravating factors exist in this case:

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1. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.  The acts occurred from about 2013 to about April 2015.

2. The sentence imposed by the court included incarceration.  The court sentenced Petitioner to 33 months of incarceration.

3. Petitioner has been the subject of another action by a Federal, State or local government agency or board based on the same set of circumstances that serves as the basis for the imposition of the exclusion.  The Michigan Bureau of Professional Licensing revoked Petitioner’s license to practice as a medical doctor and the Michigan Department of Health and Human Services terminated Petitioner’s Medicaid provider agreement.    

IG Ex. 1 at 1-2.  The notice stated that the exclusion would be effective 20 days from the date of the notice.  IG Ex. 1 at 1.    

Petitioner timely requested a hearing in which Petitioner did not dispute the imposition of an exclusion, but sought review of the length of exclusion.  Petitioner also disputed the effective date of exclusion because the conviction on which the exclusion is based occurred years earlier.        

I was assigned to hear and decide this case, and on September 18, 2019, the Civil Remedies Division (CRD) issued a letter acknowledging Petitioner’s hearing request along with a copy of my Standing Prehearing Order.  On October 2, 2019, I convened a prehearing conference by telephone, the substance of which is summarized in my October 3, 2019 Order Following Prehearing Conference and Setting Schedule For Prehearing Submissions.  See 42 C.F.R. § 1005.6.  During the conference, Petitioner’s counsel confirmed that Petitioner only disputed the length of exclusion.  Further, I explained that I had no authority to change the effective date of the exclusion.   

Based on the prehearing submission schedule that was agreed upon at the prehearing conference, the IG submitted a brief (IG Br.) together with five proposed exhibits (IG Exs. 1-5), Petitioner submitted a brief (P. Br.), and the IG submitted a reply brief (IG Reply).       

II. Decision on the Record

Petitioner did not object to the IG’s proposed exhibits.  Therefore, I admit IG Exs. 1‑5 into the record.  Standing Prehearing Order ¶ 12; CRD Procedures § 14(e); see also 42 C.F.R. § 1005.8(c).

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Neither party offered written direct testimony for any witnesses, and both parties indicated in their briefs that they did not believe an in-person hearing was necessary in this case.  IG Br. at 8; P. Br. at 2.  Therefore, I decide this case based on the written record.  Standing Prehearing Order ¶¶ 10-11, 16; CRD Procedures §§ 16(b), 19(b), (d). 

III. Issue

In cases involving a mandatory exclusion under 42 U.S.C. § 1320a-7(a), the issues are limited to:  1) whether there is a basis for exclusion, and 2) whether the length of exclusion is unreasonable.  42 C.F.R. § 1001.2007(a)(1). 

In the present case, Petitioner concedes that she was convicted of an offense requiring an exclusion for a minimum of five years.  P. Br. at 1.  Therefore, the sole issue to be decided in this case is whether the ten-year length of exclusion is unreasonable.      

IV. Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2. 

V. Findings of Fact, Conclusions of Law, and Analysis1

A. There are three aggravating factors in this case and no mitigating factors.

Because Petitioner conceded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(4), Petitioner must be excluded for a minimum period of five years.  42 U.S.C. § 1320a-7(c)(3)(B).  While the IG must impose the five-year minimum mandatory term of exclusion, the IG is authorized to lengthen that term if certain aggravating factors exist.  42 C.F.R. § 1001.102.  Those aggravating factors are detailed at 42 C.F.R. § 1001.102(b)(1)-(9).  The IG added five years to Petitioner’s minimum mandatory five-year exclusion based on the alleged presence of three aggravating factors:  § 1001.102(b)(2) (the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; § 1001.102(b)(5) (the sentence imposed by the court in this case included incarceration); and § 1001.102(b)(9) (an adverse action was taken by a State board, based on the same circumstances that serve as the basis for imposing the exclusion.).  I must uphold the IG’s determination as to the length of exclusion so long as it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).

1. Petitioner’s acts that resulted in conviction, or similar acts, were committed for more than one year, i.e., from June 2013 until approximately October 2014. 

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Petitioner was charged in a first superseding indictment with conspiracy to distribute and possess with intent to distribute controlled substances (21 U.S.C. §§ 841(a)(1) and 846).  IG Ex. 2 at 1.  Petitioner pleaded guilty to that charge.  IG Ex. 2 at 1. 

In the plea agreement, Petitioner stipulated to the following facts: 

Between 2013 and April 2015, in the Eastern District of Michigan, the [Petitioner] entered into an agreement with Boris Zigmond and others to prescribe Schedule II controlled substances, outside the scope of legitimate medical practice.  The [Petitioner] personally wrote prescriptions for more than 200,000 dosage units of 30mg oxycodone while employed by Boris Zigmond.  In order to make a conservative estimate of the quantity of illegitimate prescriptions to be ascribed to the [Petitioner] for sentencing purposes, the parties agree that at least 3,500 dosage units of 30 mg oxycodone and 7,000 dosage units of other Schedule III, IV, and V substances, were completely illegitimate.  The [Petitioner], a licensed physician, was aware that the controlled substances she agreed to prescribe were not medically necessary.  The [Petitioner] prescribed the controlled substances outside of the scope of accepted medical practice in the United States, and did not act in good faith in prescribing the controlled substances. 

The [Petitioner] stipulates and agrees that she received $100 per patient from approximately June 2013 until approximately October 2014 for each patient for whom she prescribed oxycodone outside of the scope of legitimate medical practice.  She further acknowledges that she received approximately $200,400 for her participation in the scheme.  The street value of the drugs personally prescribed by the [Petitioner] exceeds $2 million. 

IG Ex. 3 at 2-3.  

Petitioner argues that she only engaged in part-time employment related to the acts that resulted in her conviction.  Petitioner asserts that she was employed full time elsewhere during June 2013 through October 2014, the period during which she concedes she worked at the pain clinic where the illegal conduct occurred, and only worked occasionally at the pain clinic during this time.  P. Br. at 2. 

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The IG responded that Petitioner admitted to engaging in criminal conduct during a 17-month period and that the regulations do not require continuous criminal conduct during that period of time in order to consider it an aggravating factor.  IG Reply at 2. 

I agree with the IG that Petitioner’s admission in the plea agreement is sufficient to show that the criminal acts that formed the basis of her conviction occurred for over a year.  Therefore, the IG proved that the aggravating factor at 42 C.F.R. § 1001.102(b)(2) is present in this case.  

2. The District Court sentenced Petitioner to 33 months of incarceration.

The District Court sentenced Petitioner to 33 months of imprisonment.  IG Ex. 2 at 2.  Petitioner concedes that she was sentenced to serve a period of incarceration.  P. Br. at 2.   Therefore, the IG proved that the aggravating factor at 42 C.F.R. § 1001.102(b)(5) is present in this case. 

3. On August 31, 2018, the Michigan Department of Health and Human Services terminated Petitioner’s Medicaid Provider Agreement, and on January 16, 2019, the Michigan Board of Medicine revoked Petitioner’s medical license.

In a July 31, 2018 notice, the Michigan Department of Health and Human Services’ Inspector General concluded that “action is necessary to protect the State’s interest in medically indigent individuals and the public funds of the medical assistance program” and that Petitioner’s provider agreement in the Medicaid program would be terminated as of August 31, 2018.  IG Ex. 4 at 1.  Specifically, the notice stated that Petitioner’s conviction in the District Court and the suspension of Petitioner’s license to practice medicine in Michigan supported termination of Petitioner’s provider agreement.  IG Ex. 4 at 1. 

On January 16, 2019, a Consent Order revoking Petitioner’s medical license, issued by the Michigan Board of Medicine, became effective.  IG Ex. 5 at 1-3.  The Consent Order expressly stated that the revocation was based on Petitioner’s “conviction of a felony relating to a controlled substance.”  IG Ex. 5 at 2.  The Consent Order also indicated that the Michigan Board of Medicine imposed a $50,000 fine on Petitioner.  IG Ex. 5 at 2.    

Petitioner does not dispute that she was subject to adverse actions by a state agency and state board, and Petitioner admits that “[t]he only actions taken by any agency or board against [Petitioner] has been as a result of this incident,” apparently referring to Petitioner’s conviction.  P. Br. at 2.  Petitioner argues that the adverse actions taken were mandatory under the law and should not be considered aggravating factors.  Petitioner also notes that the Michigan Board of Medicine imposed the minimum mandatory sanction possible.  

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Based on these facts, I conclude that the IG proved that Petitioner was subject to adverse actions by a state agency and board that were based on the same set of circumstances that formed the basis for the IG’s exclusion.  The regulation does not make a distinction between adverse actions taken as a discretionary act or mandated by state law.     Therefore, the aggravating factor of 42 C.F.R. § 1001.102(b)(9) is present in this case.    

4. Petitioner did not prove the existence of any mitigating factors that would justify a reduction in the length of exclusion imposed by the IG. 

Petitioner asserts that “when the authorities approached [Petitioner] about the clinic[,] she worked together with the authorities in their investigation.”  P. Br. at 3.  Petitioner points to the fact that the District Court did not fine Petitioner or order Petitioner to pay restitution to show that the District Court knew that Petitioner was taken advantage of by the clinic’s operator.  P. Br. at 3.   

It is true that an excluded individual’s cooperation with authorities can be considered a mitigating factor.  However, in order for such cooperation to count as a mitigating factor, the cooperation must result in others being convicted or excluded from all federal health care programs, the imposition of civil money penalties under 42 C.F.R. part 1003, or additional cases being investigated.  42 C.F.R. § 1001.102(c)(3).  Petitioner neither produced evidence that Petitioner cooperated with law enforcement nor that such cooperation, if provided, resulted in any law enforcement activity as described by the regulations. 

Therefore, I conclude that there are no mitigating factors in this case cognizable under the regulations.     

B. The ten-year length of Petitioner’s exclusion is not unreasonable.

I must determine if the ten-year length of exclusion is unreasonable.  When considering the length of exclusion, “[t]he evaluation does not rest on the specific number of aggravating or mitigating factors or any rigid formula for weighing those factors, but rather on a case-specific determination of the weight to be accorded each factor based on a qualitative assessment of the circumstances surrounding the factors in that case.”  Farzana Begum, M.D., DAB No. 2726 at 2 (2016) (emphasis added).    

The length of Petitioner’s prison sentence weighs heavily in favor of a lengthy exclusion.  A prison sentence of as little as nine months is considered to be relatively substantial for exclusion purposes.  Jason Hollady, M.D., DAB No. 1855 at 12 (2002).  Petitioner’s 33-month sentence is nearly four times longer than that and represents a substantial period of time, which indicates the seriousness of Petitioner’s offense.

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I also find that the length of Petitioner’s criminal conduct, lasting for more than a year, provides strong support for the ten-year length of exclusion.  Petitioner admitted that she provided prescriptions for over 10,000 dosage units of controlled substances that “were completely illegitimate” and “were not medically necessary.”  IG Ex. 3 at 2-3.  The length of time that Petitioner engaged in this activity shows the negative impact of her actions.  It is well known that this country faces a severe opioid crisis, and Petitioner’s conduct is egregious because of the effect it had, in part, due to the time over which she illegitimately prescribed controlled substances. 

Finally, the adverse actions imposed by a Michigan agency and board support the ten-year exclusion.  Although not as significant as the previous aggravating factors, it is still worthy of mention that two entities imposed sanctions in the form of a license revocation and program termination due to the criminal conviction on which the present exclusion is based.  Further, the Michigan Board of Medicine imposed a $50,000 fine on Petitioner.    

Therefore, I conclude that a ten-year exclusion is not unreasonable. 

C. The effective date of exclusion is July 18, 2019, and I have no authority to modify that effective date. 

Petitioner states that she understands I have no authority to change the effective date of exclusion, but advances that issue in equity.  Petitioner argues that Petitioner’s plea agreement was from August 2017 and the IG took no action for two years to exclude her.  Had the IG acted immediately, Petitioner would have “nearly two (2) years credit towards her exclusion period.”  Therefore, Petitioner requests that this be considered a mitigating factor.  P. Br. at 4. 

Exclusions are effective 20 days after the date of the notice issued by the IG.  42 C.F.R. § 1001.2002(b); see also 42 U.S.C. § 1320a-7(c)(1).  When an exclusion is effective before a decision is issued by an administrative law judge, as it is in this case, that exclusion is “deemed to commence on the date such exclusion originally went into effect.”  42 C.F.R. § 1005.20(b). 

In the present matter, the IG issued the exclusion notice on June 28, 2019.  IG Ex.
1 at 1.  Therefore, Petitioner’s exclusion commenced 20 days later, on July 18, 2019. 
I have no authority to change the effective date.  See 42 C.F.R. § 1005.4(c)(1).  Further, the regulations do not permit me to consider this in mitigation.  42 C.F.R. § 1001.102(c).

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VI. Conclusion

For the foregoing reasons, I affirm the IG’s determination to exclude Petitioner for
ten years from participating in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-7(a)(4). 

• 1. My findings of fact and conclusions of law are set forth in italics and bold font.