Anthony Gregory Conrardy, M.D., DAB CR5204 (2018)

DECISION

Petitioner, Anthony Gregory Conrardy, M.D., was a physician, licensed in the State of Michigan and elsewhere, who worked at a purported "pain management clinic."  In cahoots with the clinic owner and others, and in return for cash, he prescribed controlled substances that served no legitimate medical purpose. Following a jury trial, he was convicted on five felony counts of unlawful distribution of controlled substances. Based on this conviction, the Inspector General (IG) has excluded him for ten years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(4) of the Social Security Act (Act). Petitioner concedes that he must be excluded for a minimum period of five years but challenges the length of the exclusion beyond the five years. For the reasons discussed below, I find that the IG properly excluded Petitioner and that the ten-year exclusion falls within a reasonable range.

Background

By letter dated April 30, 2018, the IG notified Petitioner Conrardy that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a period of ten years, because he had been convicted of criminal offenses related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  The letter explained that section 1128(a)(4) of the Act authorizes the exclusion. IG Ex. 1.

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Petitioner appeals. He concedes that he was convicted and is subject to exclusion. P. Brief at 2.

Each party submitted a written argument (IG Br.; P. Br.). The IG also submitted four exhibits (IG Exs. 1-4) and a reply brief.  Petitioner submitted five exhibits (P. Exs. 1-5). In the absence of any objections, I admit into evidence IG Exs. 1-4 and P. Exs. 1-5.

I instructed the parties to indicate in their briefs whether an in-person hearing would be necessary and, if so, to explain why, identify any proposed witness, and "submit the witness testimony in the form of an affidavit or sworn declaration." Order and Schedule for Filing Briefs and Documentary Evidence at 3-4 (¶ 7). The IG indicates that an in-person hearing is not necessary. IG Br. at 5.

Petitioner, however, asks to present his own testimony and that of family members and colleagues.  They will explain the "compelling circumstances giving rise to his conviction," discuss his strong moral character, and the impact his practice has had on the medical community.  P. Br. at 7-8.  He submits no written declarations, although his exhibits include unsworn statements from his potential witnesses.  P. Ex. 1 at 16-28, 44-54, 85-91; P. Ex. 2 at 3-6; P. Ex. 5.

The IG objects to my convening an in-person hearing for the purpose of obtaining the proposed testimony because it is irrelevant.  I agree.  Because Petitioner may not collaterally attack his conviction, evidence undermining the court's findings is irrelevant. 42 C.F.R. § 1001.2007(d).  The testimony regarding Petitioner's character is also irrelevant because it does not address any of the factors that I may consider in mitigation.  42 C.F.R. § 1001.102(c).  I must exclude irrelevant or immaterial evidence.  42 C.F.R. §§ 1005.17(c), 1001.2007(d); Janet R. Constantino, DAB No. 2666 at 7-8 (2015); Roy Cosby Stark, DAB No. 1746 (2000); George Iturralde, M.D., DAB No. 1374 (1992).  Thus, an in-person hearing would serve no purpose, and I decide this case on the written record.

Issue

Because the parties agree that the IG has a basis upon which to exclude Petitioner from program participation, the sole issue before me is whether the length of the exclusion (ten years) is reasonable.  42 C.F.R. § 1001.2007.

Discussion

Section 1128(a)(4) mandates that the Secretary exclude from program participation any individual or entity convicted of a felony "relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance."  See 42 C.F.R. § 1001.101(d).

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Petitioner was a physician practicing at what purported to be a pain management clinic in Ypsilanti, Michigan.  IG Ex. 2 at 1, 2. In fact, the so-called clinic sold controlled substances (oxycodone, hydrocodone, alprazolam, promethazine hydrochloride, codeine phosphate) for cash. IG Ex. 2 at 3. As his part of the scheme, Petitioner Conrardy prescribed the drugs to patients "outside the scope of professional medical practice and for no legitimate purpose." He was paid for doing so. IG Ex. 2 at 5-6, 12.

The conspirators were eventually caught, arrested, and charged with multiple felony counts of conspiracy to distribute controlled substances, conspiracy to pay and receive healthcare kickbacks, unlawful distribution of controlled substances, aiding and abetting the unlawful distribution of controlled substances, and money laundering.  IG Ex. 2. On March 21, 2017, a federal jury convicted Petitioner Conrardy on five counts of unlawful distribution of controlled substances (21 U.S.C. § 841(a)(1)). IG Ex. 3 at 3-4. On August 25, 2017, the district court for the Eastern District of Michigan entered judgment against him on the five felony counts.  IG Ex. 4 at 1. The court sentenced Petitioner Conrardy to 30 months in prison, followed by 36 months of supervised release, and ordered him to pay a $500 assessment.  IG Ex. 4 at 3, 4.

Based on one aggravating factor and no mitigating factors, the ten-year exclusion is reasonable.*

I now consider whether the length of the exclusion, beyond five years, falls within a reasonable range.

Aggravating factor. An exclusion under section 1128(a)(4) must be for a minimum period of five years. Act, § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). Federal regulations set forth criteria for lengthening exclusions beyond the five-year minimum. 42 C.F.R. § 1001.102(b). Evidence that does not pertain to one of the aggravating or mitigating factors (42 C.F.R. § 1001.102(c)) listed in the regulations may not be used to decide whether an exclusion of a particular length is reasonable.

Among the factors that may serve as bases for lengthening the period of exclusion is the one that the IG cites to justify the period of exclusion in this case: the sentence imposed by the court included incarceration. 42 C.F.R. § 1001.102(b)(5).

The criminal court sentenced Petitioner to a very substantial period of incarceration – 30 months, or two and a half years. IG Ex. 4 at 2. While any period of incarceration justifies increasing the period of exclusion, the Departmental Appeals Board has repeatedly held that long periods of incarceration are relevant in determining whether a period of exclusion is reasonable. Eugene Goldman, M.D., DAB No. 2635 at 6 (2015). Generally, the longer the jail time, the longer the exclusion, because a lengthy sentence

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evidences a more serious offense. See Jeremy Robinson, DAB No. 1905 (2004) (characterizing a nine-month incarceration as "relatively substantial."); Jason Hollady, M.D., DAB No. 1855 at 12 (2002); Stacy Ann Battle, DDS, DAB No. 1843 at 7 (2002) (finding that four months in a halfway house, followed by four months home confinement justifies lengthening the period of exclusion); Brenda Mills, M.D., DAB CR1461, aff'd DAB No. 2061 (2007) (finding that six months home confinement justifies increasing the length of the exclusion).

Petitioner argues that his relatively lengthy sentence was mandated by the jury verdict and that the sentencing judge declined to impose the much lengthier term requested by the prosecutors. I acknowledge that Petitioner's prison sentence was at the low end of the range for his crimes. It is nevertheless substantial and, by law, reflects the seriousness of his crimes, and justifies increasing his period of exclusion by at least five years.

Mitigating factor. The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $1,500; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner's cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed. 42 C.F.R. § 1001.102(c).

Petitioner concedes that none of these factors apply. P. Br. at 7. He points out, however, that his crimes did not cause financial losses to any federal, state, or private healthcare programs because his patients paid cash for their illicitly-gained drugs. I find this unpersuasive. Section 1128(a)(4) does not require program losses. Moreover, patients were required to pay cash for their drugs so that the conspirators could conceal the proceeds. IG Ex. 2 at 6. Petitioner should not benefit from his cohort's efforts to hide their criminal scheme and their ill-gotten gains.

Petitioner also argues that his was not a "crime of dishonesty." P. Br. at 6. Although narcotics violations may not be crimes of dishonesty or false statement per se, Petitioner's crimes here were. He is a physician who prescribed dangerous drugs to his ostensible patients, falsely representing that they were medically necessary and justified. I consider such behavior dishonest conduct.

Finally, Petitioner's claims of good character and an otherwise flawless professional life do not alter the facts underlying his convictions. My authority is limited by the regulations, and I may not review the IG's decision to exclude an individual "on the ground that [he] is a good person or well-thought of in the profession . . . ."  Donna Rogers, DAB No. 2381 at 6 (2011).

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Petitioner was convicted on five felony counts. His conduct warranted a significant prison sentence. I find that his criminal behavior and the period of incarceration demonstrate Petitioner's untrustworthiness, and justify the ten-year exclusion.

Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid and other federal health care programs. So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992). I find that the ten-year exclusion falls within a reasonable range.

*. I make this one finding of fact/conclusion of law.
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