Richard Duane Johns, DAB CR5379 (2019)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, Richard Duane Johns, from participation in Medicare, Medicaid, and all other federal health care programs based on Petitioner’s conviction of a felony related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner because he was convicted of a felony offense related to the unlawful distribution of a controlled substance.  I affirm the 20-year length of the exclusion because the IG proved the existence of three aggravating factors and there are no mitigating factors.  I also affirm that the effective date of Petitioner’s exclusion is October 18, 2018.

I.  Background

In a letter dated September 28, 2018, the IG informed Petitioner that he would be excluded from participation in Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a minimum period of  25 years, effective 20 days from the date of the letter.  IG Exhibit (Ex.) 1 at 1.  The IG

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explained that Petitioner’s exclusion was based on a felony conviction “in the United States District Court, Eastern District of Arkansas, of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance” pursuant to section 1128(a)(4) of the Act, 42 U.S.C. § 1320a-7(a)(4).  IG Ex. 1 at 1.  Section 1128(a)(4) of the Act mandates the exclusion of any individual who is convicted of a felony occurring after August 21, 1996, relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  The IG extended the exclusion to a 25-year period based on the presence of four aggravating factors.  IG Ex. 1 at 2.  In a subsequent, letter, dated December 6, 2018, the IG amended the notice of exclusion, at which time she informed Petitioner that his exclusion would be for a minimum period of 20 years based on the presence of the following three aggravating factors:  the acts that resulted in the conviction, or similar acts, occurred over a period of one year or more from June 2011 through May 2015; the sentence imposed by the court included incarceration, specifically 108 months of incarceration; and Petitioner was subject to another adverse action based on the same circumstances that formed the basis for his exclusion, in that he surrendered his medical license.  IG Exs. 1 at 2; 2 at 1.

Petitioner, who is currently not represented by counsel, submitted a timely request for hearing, dated October 2, 2018, which the Civil Remedies Division docketed on October 16, 2018.  On November 28, 2018, pursuant to 42 C.F.R. § 1005.6, Administrative Law Judge (ALJ) Bill Thomas presided over a pre-hearing conference, and shortly thereafter, on November 29, 2018, Judge Thomas issued an Order and Schedule for Filing Briefs and Documentary Evidence (Order).1

Pursuant to the Order, the IG filed an informal brief (IG Br.) and a reply brief, along with eight exhibits (IG Exs.) 1-8.  Petitioner filed an informal brief2 (P. Br.) and two exhibits3 (P. Exs. 1-2).  The parties agree that an in-person hearing is not necessary.  IG Br. at 7; P. Br. at 3.  In the absence of any objections, I admit the parties’ exhibits into the record.

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II.  Issue

Whether the IG has a basis for exclusion and, if so, whether the length of the exclusion imposed by the IG is unreasonable.  42 C.F.R § 1001.2007(a)(1).

III.  Jurisdiction

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

IV.  Findings of Fact, Conclusions of Law, and Analysis4

1. Petitioner’s federal conviction subjects him to a mandatory exclusion from all federal health care programs.

A mandatory exclusion from all federal health care programs is set forth at 42 U.S.C. § 1320a-7(a)(4), which states:

(a) Mandatory exclusion

The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1320a-7b(f) of this title):

****

(4) Felony conviction relating to controlled substance

Any individual or entity that has been convicted for an offense which occurred after August 21, 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 IG argues that Petitioner was properly excluded from all federal health care programs based on his felony conviction for an offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Br. at 3.  Petitioner concedes in his informal brief that he was convicted of a felony offense relating to the prescription or dispensing of a controlled substance occurring after August 21, 1996.  As explained below, I find that Petitioner was convicted of a criminal offense that mandates exclusion from all federal health care programs pursuant to section 1128(a)(4).

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On or about March 2, 2017, Petitioner pleaded guilty to Count One of a superseding information that charged that he had committed conspiracy to distribute oxycodone in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(c) and 846.  IG Exs. 3, 4, 5.  By entering a guilty plea to Count One, Petitioner admitted the following:  “Beginning in or about June 2011, and continuing through in or about May, 2015, in the Eastern District of Arkansas, [Petitioner] did conspire with others . . . to knowingly and intentionally possess with intent to distribute and to distribute oxycodone, a Schedule II controlled substance, without an effective prescription . . . .”  IG Ex. 5 at 1.  Petitioner also agreed to forfeit “all property constituting or derived from, proceeds obtained directly or indirectly from drug trafficking, including but not limited to the following . . . United States currency in the amount of $155,620 seized on April 7, 2015.”  IG Exs. 3 at 8-10; 5 at 1-2.  Further, Petitioner agreed to forfeit “all property used, in any manner or part, to commit, or to facilitate the commission of the offense,” to include a 2006 Ford F250.  IG Exs. 3 at 8-10; 5 at 2.  A United States District Judge imposed judgment on August 30, 2017, at which time he imposed a sentence that included 108 months of incarceration and forfeiture of the aforementioned assets.  IG Ex. 4 at 2, 7, 8; see IG Ex. 8.

I find that Petitioner’s criminal conviction for conspiracy to distribute a controlled substance mandates exclusion.  An individual is “convicted” of a criminal offense “when a judgment of conviction has been entered against the individual” or when a guilty plea has been accepted by a Federal, State, or local court.  42 U.S.C. § 1320(a)-7(i)(1), (3).  Furthermore, Petitioner pleaded guilty to a felony offense, as evidenced by the 108-month period of incarceration that was imposed.  IG Ex. 4 at 2; see 21 U.S.C. § 802(44) (defining a felony drug offense as an offense that is punishable by imprisonment for more than one year under any law of the United States or of a State).  In pleading guilty to Count One of the superseding indictment, Petitioner admitted that he committed a felony offense under federal law after August 21, 1996, which involved a conspiracy to distribute oxycodone.  IG Exs. 3, 4.  The crime to which Petitioner pleaded guilty falls squarely within the reach of section 1128(a)(4) of the Act.  IG Exs. 3, 4, 5.  The basis for Petitioner’s underlying conviction is not reviewable and is binding on this proceeding.  42 C.F.R. § 1001.2007(d).

2. A 20-year minimum exclusion is warranted based on the presence of three aggravating factors and no mitigating factors.

Petitioner argues that the IG was unreasonable in his determination that an exclusion for a minimum period of 20 years is warranted.  Pursuant to section 1128(a) of the Act, the minimum period of exclusion for a felony conviction involving the unlawful distribution of a controlled substance is five years.  42 U.S.C. § 1320a-7(c)(3)(B).  Owing to the existence of aggravating factors, the IG opted to exclude Petitioner for 20 years, which is longer than the five-year minimum period of exclusion.  The IG has the discretion to impose an exclusion longer than the minimum period when there are aggravating factors present.  See 42 C.F.R. § 1001.102.

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The IG asserts the presence of three aggravating factors.  First, the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.  42 C.F.R. § 1001.102(b)(2); IG Ex. 3 at 1.  Second, the sentence imposed included incarceration, specifically, 108 months of incarceration.  42 C.F.R. § 1001.102(b)(5); IG Ex. 4 at 2.  Third, Petitioner was subject to another adverse action based on the same circumstances that support the exclusion.  42 C.F.R. § 1001.102(b)(9); IG Ex. 7.

Petitioner does not present evidence disputing the length of the acts that resulted in his felony conviction.  Rather, the evidence demonstrates that Petitioner acknowledged in his plea agreement that he engaged in the offense from on or about June 2011 through on or about May 2015.  IG Ex. 3 at 1.  The IG properly considered the length of acts that resulted in Petitioner’s felony conviction to be an aggravating factor in this case.  See, e.g., Laura Leyva,DAB No. 2704 at 10 (2016) (determining that nearly two-and-a-half-year duration of conduct was an aggravating factor).

With regard to Petitioner’s sentence of incarceration, the uncontroverted evidence demonstrates that Petitioner was sentenced to a significant period of incarceration for his crime of conspiracy to distribute oxycodone.  The sentencing judge ordered that Petitioner be committed to the custody of the Bureau of Prisons for a term of 108 months.  IG Ex. 3 at 2.  The IG properly considered the 108-month length of imprisonment to be an aggravating factor in this case.  See Christopher Switlyk, DAB No. 2600 at 4 (2014) (Departmental Appeals Board (DAB) agreeing with an ALJ’s determination that a 108‑month sentence of incarceration was a “very lengthy prison sentence” and upholding a 20-year exclusion on that basis alone).

With respect to the third aggravating factor, Petitioner makes a patently false claim that the Arkansas State Medical Board (Medical Board) accepted his surrender of his medical license and “did not suspend nor revoke [his] license as an adverse action.”  P. Ex. 1 at 4.  Petitioner adds that “[he] alone initiated the surrender.”  P. Ex. 1 at 4.  However, the facts belie Petitioner’s claims.  On June 2, 2015, the Medical Board issued an “Emergency Order of Suspension” at which time it suspended Petitioner’s medical license.5  IG Ex. 7 at 2; see IG Ex. 6 at 17-31.  Subsequently, on October 8, 2015, the Medical Board issued an Amended Emergency Order of Suspension and Notice of Hearing, at which time it further detailed the criminal allegations against Petitioner and found that Petitioner presented “a danger to public health, safety and welfare” and suspended his medical license “on an emergency basis, pending a disciplinary hearing.”  IG Ex. 6 at 14.  On April 6, 2017, shortly after Petitioner entered his guilty plea, the Medical Board “voted unanimously to schedule [Petitioner’s] disciplinary hearing for June 2017, unless he opts to surrender his Arkansas medical license.”  IG Ex. 7 at 2.  And, on June 8, 2017, the

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Medical Board “voted unanimously to accept [Petitioner’s] surrender of his Arkansas medical license due to his felony conviction.”  IG Ex. 7 at 2.  Petitioner’s surrender of his Arkansas medical license in lieu of his appearance for a disciplinary hearing was based on the same facts underlying his conviction and exclusion and is also properly considered an adverse action that is an aggravating factor pursuant to 42 C.F.R. § 1001.102(b)(9).  IG Ex. 7 at 2.

Evidence of aggravation may be offset by evidence of mitigation if it relates to one of the factors set forth at 42 C.F.R. § 1001.102(c).  I am not able to consider evidence of mitigation unless it offsets the lengthening of a period of exclusion due to one or more of the enumerated aggravating factors listed in 42 C.F.R. § 1001.102(b).  42 C.F.R. § 1001.102(c).  While Petitioner argues that mitigating factors should be applied, he has not identified a mitigating factor that is applicable here.  Although Petitioner has submitted an undated treatment summary authored by George K. Simon, Jr., Ph.D., that provides diagnoses of borderline personality disorder, mood disorder not otherwise specified, and “[f]eatures of Post-Traumatic Stress Disorder,” P. Ex. 2 at 2-4, he has not alleged, nor submitted evidence supporting, that the sentencing judge determined that he “had a mental, emotional or physical condition before or during the commission of the offense that reduced [his] culpability.”  42 C.F.R. § 1001.102(c)(2); see IG Ex. 8 (transcript of sentencing hearing which, despite lengthy remarks by the sentencing judge, lacks any determination that a mental, emotional, or physical condition reduced Petitioner’s culpability).  Nor has Petitioner shown, pursuant to 42 C.F.R. § 1001.102(c)(3), that he provided cooperation to federal or state officials.  While Petitioner claims that mitigation is warranted based on his lack of prior criminal history and the absence of financial loss to Medicare or other programs, these are not factors that can warrant mitigation of an exclusion pursuant to 42 C.F.R. § 1001.102(c).

A 20-year exclusion is appropriate, and the DAB has upheld a 20-year exclusion based solely on the imposition of an identical sentence of incarceration of 108 months without any other aggravating factors.  See Christopher Switlyk, DAB No. 2600 at 4.  Petitioner has not demonstrated that any of the three aggravating factor are inappropriate, nor has he shown that any mitigating factor should have been applied.

V.  Effective Date of Exclusion

The effective date of the exclusion, October 18, 2018, is established by regulation, and I am bound by that provision.  42 C.F.R. §§ 1001.2002(b), 1005.4(c)(1).

VI.  Conclusion

For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of 20 years.

• 1. This case was reassigned to me on March 8, 2019.
• 2. After the IG provided notice that her initial mailing of her pre-hearing exchange to Petitioner was returned as undelivered, Judge Thomas offered Petitioner an opportunity to supplement his pre-hearing exchange. After Petitioner reported that he did not receive the IG’s second mailing of her pre-hearing exchange, I directed the IG to serve her exchange again and extended the deadline for Petitioner to supplement his pre-hearing exchange. Petitioner did not submit a supplemental pre-hearing exchange.
• 3. Petitioner included various arguments in his two exhibits that should have been included in his informal brief. P. Exs. 1 at 1-2, 4; 2 at 1. I have considered all arguments raised by Petitioner, regardless of whether they are found in the brief or supporting exhibits.
• 4. My findings of fact and conclusions of law are set forth in italics and bold font.
• 5. Petitioner was arrested on or about May 14, 2015, based on the charge that he engaged in a conspiracy to distribute controlled substances. IG Ex. 6 at 2.