William Richardson, MD, DAB CR5518 (2020)

DECISION

Petitioner, William Richardson, MD, was employed by a company that operated pain clinics in Georgia. Petitioner pleaded guilty to conspiring to distribute and dispense controlled substances without a legitimate medical purpose. As a result of his guilty plea, Petitioner was sentenced to 54 months of incarceration followed by three years of supervised release.

Now, the Inspector General (IG) has excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs for 15 years. The IG relies on section 1128(a)(4) of the Social Security Act (Act),1 which mandates that individuals convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance be excluded. Petitioner appeals the exclusion. For the reasons discussed below, I find that the IG properly excluded Petitioner and that a 15‑year exclusion is not unreasonable.

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I. Background

Petitioner was an internal medicine physician who prescribed controlled substances in the course of his employment with Atlanta Medical & Research Clinic, Inc. (AMARC), a company that operated at least three pain clinics in Georgia. IG Exhibit (Ex.) 3 at 6-7. On September 5, 2013, a federal grand jury in the Northern District of Georgia returned a second superseding indictment against Petitioner for, among other offenses, one count of “drug conspiracy” in violation of 21 U.S.C. §§ 846, 841(a)(1), 841(b)(1)(C), 841(b)(1)(E), and 841(b)(2) (Count 1). IG Ex. 3.

More specifically, the grand jury charged, under Count 1, that from “at least in or about May 2009, and continuing until on or about August 22, 2012,” Petitioner and five co‑conspirators:

[D]id knowingly combine, conspire, confederate, agree, and have a tacit understating with each other and others . . . to knowingly and willfully distribute and dispense, and possess with the intent to distribute and dispense (by prescription and otherwise), mixtures and substances containing a detectable amount of controlled substances, said conspiracy involving Oxycodone (Schedule II), Oxycodone with Acetaminophen (Schedule II), Methadone (Schedule II), Hydromorphone (Schedule II), Hydrocodone with Acetaminophen (Schedule III), Alprazolam (Schedule IV), and Carisoprodol (Schedule IV), not for a legitimate medical purpose and not in the usual course of professional practice[.]

IG Ex. 3 at 1-2.

On February 1, 2017, Petitioner, who was represented by counsel, pleaded guilty to Count 1 as part of a plea agreement. IG Ex. 2 at 1. Based on Petitioner’s guilty plea, on June 13, 2017, the U.S. District Court for the Northern District of Georgia (federal district court) adjudicated Petitioner guilty of one count of conspiracy to distribute controlled substances, and sentenced him to 54 months of incarceration followed by three years of supervised release.2 IG Ex. 4 at 1-3.

In a letter dated April 30, 2019 (notice letter), the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a period of 15 years. IG Ex. 1. The notice letter stated that Petitioner was excluded because he had been convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance as defined under federal

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or state law. Id. The notice letter explained that section 1128(a)(4) of the Act authorized the exclusion. Id.

Petitioner timely requested a hearing before an administrative law judge. I held a telephone prehearing conference on June 25, 2019, in which both parties participated. On July 1, 2019, I issued an Order and Schedule for Filing Briefs and Documentary Evidence (Briefing Order) in which I established a schedule for the parties to exchange their respective arguments and evidence. The Briefing Order required the IG to submit her brief and proposed exhibits on or before August 26, 2019, and contemplated that the IG would file her exchange before Petitioner’s. However, Petitioner filed a brief (P. Br.) and four proposed exhibits (P. Exs. 2-5),3 which my office received on August 13, 2019. Subsequently, the IG timely filed her brief (IG Br.) and four proposed exhibits (IG Exs. 1-4).

Because Petitioner had filed his exchange prior to the IG’s exchange, and thus had not had the opportunity to respond to the IG’s arguments, I permitted Petitioner to file a reply brief (P. Reply). See Docket Entry 8 in DAB E-File. With his reply, Petitioner offered eight additional proposed exhibits (P. Exs. 6-13). Docket Entries 8b-8i in DAB E-File. I also permitted the IG to file a sur-reply brief (IG Reply). Docket Entry 9 in DAB E‑File. Petitioner later filed a letter dated November 25, 2019, which my office received on December 2, 2019. Docket Entry 10 in DAB E-File. Although Petitioner did not request leave to file any additional argument, I accepted the letter as a response (P. Response) to the IG’s sur-reply and, on December 4, 2019, I issued an order closing the record in this case effective December 2, 2019.

The IG objected to P. Exs. 3-5 as not relevant. IG Br. at 6. However, in the interest of affording Petitioner, who is not represented in this proceeding, the fullest opportunity to present his case, I admit all of Petitioner’s proposed exhibits (P. Exs. 2‑13) into the record. I consider the IG’s objections in determining what weight, if any, to give to Petitioner’s exhibits. Petitioner did not object to the IG’s proposed exhibits. Therefore, in the absence of objection, I admit IG Exs. 1-4 into the record.

Petitioner stated that he believes “a phone hearing is necessary.” P. Reply at 3, 4. However, my Briefing Order directed the parties to submit the testimony of any proposed witness as “written direct testimony in the form of an affidavit or declaration.” Briefing Order ¶ 7.c.ii. Neither party identified any witnesses or offered any written direct testimony. Further, even if I construed the statements in Petitioner’s various briefs as offers of testimony (despite not being in the form of a sworn affidavit or declaration), the

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IG did not request to cross-examine Petitioner. As my Briefing Order explained, I will hold a hearing only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony. Briefing Order ¶ 9. Thus, a hearing to receive witness testimony is not necessary (whether conducted by telephone or any other medium). I therefore decide this case based on the written record.

II. Discussion

1. Petitioner must be excluded pursuant to section 1128(a)(4) of the Act because he was convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal law.4

The Act requires the Secretary of Health and Human Services (Secretary) to exclude from program participation any individual or entity that has been convicted of a felony offense occurring after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996 (that is, after August 21, 1996), and related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal or state law. Act § 1128(a)(4). The Secretary has delegated this authority to the IG. 42 C.F.R. § 1001.101(d).

1. Petitioner was convicted of a felony offense occurring after August 21, 1996.

Petitioner concedes that he was convicted of a felony offense occurring after August 21, 1996. P. Br. at 1; P. Reply at 1-2. The IG’s evidence demonstrates that the federal district court adjudicated Petitioner guilty of one felony count of conspiracy to distribute controlled substances in violation of 21 U.S.C. §§ 846, 841(a)(1), 841(b)(1)(C), 841(b)(1)(E), and 841(b)(2). IG Ex. 4 at 1. Accordingly, Petitioner was convicted, as that term is defined in subsections 1128(i)(1), (2), and (3) of the Act, of a felony offense occurring after August 21, 1996.

2. The felony offense for which Petitioner was convicted is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal law.

Petitioner concedes that his conviction is one for which exclusion is required. P. Reply at 1-2; P. Response at 1. The IG’s evidence establishes that Petitioner’s conviction for conspiracy to distribute controlled substances is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under federal law within the meaning of section 1128(a) of the Act. Here, Petitioner was convicted of

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felony conspiracy to distribute controlled substances based on his guilty plea. IG Exs. 2, 3, and 4. Therefore, I conclude that Petitioner’s conviction for conspiracy to distribute controlled substances is, by its terms, related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Accordingly, the IG was required to exclude Petitioner from participation in the Medicare program for a minimum period of five years. Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

Although Petitioner must be excluded for at least five years, the IG may exclude an individual for a period longer than five years if certain aggravating factors are present. 42 C.F.R. § 1001.102(b). If the IG imposes an exclusion longer than five years based on the presence of aggravating factors, I may consider whether certain mitigating factors exist that may justify shortening the exclusion to not less than five years. 42 C.F.R. § 1001.102(c). In the following sections of this decision, I consider whether, in light of any aggravating or mitigating factors, the length of Petitioner’s exclusion falls within a reasonable range.

2. The 15-year exclusion imposed by the IG falls within a reasonable range.

If the IG imposes an exclusion longer than five years based on the presence of aggravating factors, I may consider whether certain mitigating factors exist that may justify shortening the exclusion to not less than five years. 42 C.F.R. § 1001.102(b) and (c). I may not consider evidence that does not pertain to one of the aggravating or mitigating factors listed in the regulations to decide whether an exclusion of a particular length is reasonable.

1. The IG has established two aggravating factors.

The IG argues that an exclusion of 15 years is reasonable based on the presence of two aggravating factors:

1. The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.
2. The sentence imposed by the court included incarceration.

IG Br. at 3; 42 C.F.R. § 1001.102(b)(2) and (b)(5).

The evidence offered by the IG shows that these factors are present. First, the record establishes that the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more. As noted above, Petitioner’s felony conviction was based on his pleading guilty to Count 1 of the second superseding indictment. IG Ex. 4 at 1; IG Ex. 3 at 1-11; IG Ex. 2 at 1-2. Count 1 charged that Petitioner, along with five co-conspirators, engaged in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846, 841(a)(1), 841(b)(1)(C), 841(b)(1)(E), and 841(b)(2), and specified

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that this conspiracy began “at least in or about May 2009, and continu[ed] until on or about August 22, 2012,” a period of more than three years. IG Ex. 3 at 1-2.

Petitioner contends that his participation in the drug conspiracy lasted fewer than three years. More specifically, Petitioner states that “[t]he government may have been investigating the Pain Management Clinic [AMARC], itself, starting in May 2009, while I didn’t start working there until March 2011. . . . I worked part-time in Pain Management from March 2011 to August 2012, about one and one-third years.” P. Response at 2.

In support, Petitioner submitted his own documentation of his work schedules for 2011 and 2012, including his assessments of the number of hours worked at an AMARC clinic, as opposed to the hours he worked at another health facility or his own medical practice. P. Exs. 7, 8, and 12. Based on these assessments, Petitioner contends that the number of hours he worked at the AMARC clinics represented approximately 11.4 percent of the total hours he worked in 2011 and 2012, and was equivalent to “2 to 3 months” if his work at the AMARC clinics had been on a full-time basis. P. Ex. 12 at 1.

However, the record is clear that Petitioner’s conviction was based on his guilty plea to Count 1, which specified that that the underlying conduct (his participation in the drug conspiracy) took place over a period of three years, exceeding the one year threshold in 42 C.F.R. § 1001.102(b)(2). IG Exs. 4 at 1; 3 at 1-2; 2 at 1-2. Notably, Petitioner’s plea agreement states that Petitioner “admits he is pleading guilty because he is in fact guilty of the crimes charged in Count One.” IG Ex. 2 at 2.

Petitioner’s arguments that his conduct actually took place during a timeframe different from that described in the indictment (i.e., less than three years) seek, in essence, to re‑litigate in this appeal the factual basis for his guilty plea and conviction in federal district court. However, the regulations prohibit Petitioner from re-litigating (and me from reviewing) the factual basis for his underlying conviction.5 42 C.F.R. § 1001.2007(d) (“When the exclusion is based on [a] criminal conviction . . . the basis for the underlying conviction . . . is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in this appeal.”).

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Because Petitioner pleaded guilty to, and was convicted of, conduct spanning more than one year, the record establishes the first aggravating factor the IG relied on to extend the exclusion beyond the five-year minimum. 42 C.F.R. § 1001.102(b)(2).

Second, the record establishes that the sentence imposed by the federal district court included incarceration. IG Ex. 4 at 2; P. Br. at 1; P. Reply at 3. Specifically, the court sentenced Petitioner to 54 months of incarceration, among other penalties. IG Ex. 4 at 2. Although Petitioner concedes that the federal district court sentence included incarceration, he states that he “do[es] not believe [his] incarceration should be a factor in this particular appeal.” P. Reply at 3. However, 42 C.F.R. § 1001.102(b)(5) specifically provides that a court sentence including incarceration is an aggravating factor in determining the length of an exclusion under section 1128(a) of the Act, and I have no authority to disregard an applicable regulation. See 1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“An [administrative law judge] is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground, even a constitutional one.”). Therefore, the record establishes the aggravating factor of incarceration. In summary, the IG has established two of the aggravating factors set out in 42 C.F.R. § 1001.102(b): 42 C.F.R. § 1001.102(b)(2) and (b)(5).

2. The record does not establish any mitigating factor.

The regulations enumerate the only mitigating factors I may consider when evaluating whether an exclusion of more than five years is reasonable. 42 C.F.R. § 1001.102(c); see also Hussein Awada, M.D., DAB No. 2788 at 6 (2017). The burden is on Petitioner to prove that any mitigating factors exist. 42 C.F.R. § 1005.15(c); Briefing Order ¶ 6.c; see also Stacey R. Gale, DAB No. 1941 at 9 (2004) (“it is Petitioner’s responsibility to locate and present evidence to substantiate the existence of any alleged mitigating factor in [Petitioner’s] case”).

In this case, there is no evidence that any of the mitigating factors enumerated at 42 C.F.R. § 1001.102(c) are present. Relevant here, there is no indication that the federal district court determined that Petitioner had a mental, emotional or physical condition before or during the commission of the offense that reduced his culpability. See 42 C.F.R. § 1001.102(c)(2). Nor does the record show that Petitioner cooperated with Federal or State officials resulting in additional investigations, reports concerning program vulnerabilities, the conviction or exclusion from federal health programs of another individual or entity, or the imposition of any civil money penalties. See 42 C.F.R. § 1001.102(c)(3). Further, Petitioner concedes that the regulatory factors are not present in this case. P. Reply at 3; P. Br. at 1 (“I understand and acknowledge that those mitigating factors do not apply to me.”). Therefore, Petitioner has not established the presence of any mitigating factor that I may consider to reduce the period of exclusion.

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3. Based on the presence of two aggravating factors and no mitigating factors, the 15-year exclusion imposed by the IG falls within a reasonable range.

Petitioner contends that the IG’s decision to exclude him for 15 years is not reasonable. P. Response at 1. He states, “there were no precise, mathematical or reproducible processes used in tripling the proposed exclusion from five (5) years to fifteen (15) years” and that “there was no logical and consistent formula or method used to calculate the proposed fifteen year exclusion; rather, this was at least partially, an arbitrary decision.” Id. However, the IG has broad discretion in determining the length of an exclusion. See, e.g., Awada, DAB No. 2788 at 5. So long as the period of exclusion imposed by the IG is within a reasonable range, based on demonstrated criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 16‑17 (2000) (citing 57 Fed. Reg. 3298, 3321 (1992)); see also Jeremy Robinson, DAB No. 1905 at 5 (2004).

Based on the record before me, I find that the 15‑year exclusion falls within a reasonable range. As outlined above, the record establishes the presence of two aggravating factors and does not establish the presence of any mitigating factor. See 42 C.F.R. § 1001.102(b)(2), (b)(5), and (c). Furthermore, the duration of Petitioner’s criminal conduct and the period of his incarceration significantly exceed the thresholds for establishing these aggravating factors.

First, the conduct for which Petitioner was convicted spanned more than three years, significantly exceeding the one-year threshold for establishing the aggravating factor set forth in 42 C.F.R. § 1001.102(b)(2). IG Ex. 4 at 1, IG Ex. 2 at 1-2. For the reasons discussed above, I reject Petitioner’s argument that his participation in the conspiracy was on a part-time basis “from March 2011 to August 2012, about one and one-third years.” P. Response at 2. Petitioner was convicted after pleading guilty to participating in a drug conspiracy that began “at least in or about May 2009, and continu[ed] until on or about August 22, 2012.” IG Ex. 3 at 1. The regulations preclude Petitioner from re‑litigating the facts underlying his conviction. 42 C.F.R. § 1001.2007(d). The conduct to which Petitioner admitted, and for which he was convicted, spanned a timeframe well beyond the one-year threshold set forth in 42 C.F.R. § 1001.102(b)(5).

Second, the regulations provide that any sentence including incarceration may be considered an aggravating factor. 42 C.F.R. § 1001.102(b)(5). Here, Petitioner was sentenced to incarceration for a substantial term of 54 months (4 ½ years), pursuant to his plea agreement. IG Ex. 4 at 2-3; see 42 C.F.R. § 1001.102(b)(5).

Petitioner attempts to minimize his culpability, contending that he did not own the AMARC clinics, did not profit from the number of patients seen or prescriptions written, has no desire to work in pain management using controlled substances in the future, and that there “is evidence that [he] ha[s] diligently and successfully served a great many

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people from all walks of life and [has] the potential to help many more.” P. Response at 2-3. However, none of these statements concerns a mitigating factor that I may consider to reduce the period of exclusion. See 42 C.F.R. § 1001.102(c).

Furthermore, as an appellate panel of the DAB explained in Awada, the overarching purpose of the exclusion regulations is to protect federal health care programs and their beneficiaries from untrustworthy individuals and entities. DAB No. 2788 at 5. The aggravating and mitigating factors specified in 42 C.F.R. § 1001.102(b) and (c) are designed to evaluate the threats posed by such individuals and entities. Id. Viewed in that light, even if I were to accept Petitioner’s representation that he is unlikely to work in pain management prescribing controlled substances in the future, I would not be persuaded that Petitioner can be trusted to provide care to beneficiaries of federal health programs absent a lengthy exclusion.

In the present case, excluding Petitioner from participating in federal health care programs for a period of 15 years plainly serves a protective purpose. The conduct to which Petitioner admitted as part of his plea agreement endangered his patients, including any that may have been beneficiaries of Medicare or Medicaid. Here, Petitioner was a medical doctor, charged with treating patients at the AMARC clinics. Instead, as part of a criminal conspiracy—

[Petitioner] prescribed controlled substances after performing inadequate medical evaluations of the customer and would continue to write additional prescriptions for controlled substances without further medical evaluation, or with limited medical evaluation, that would be necessary in order to write medically appropriate prescriptions in the dosages and combinations indicated on the prescriptions.

IG Ex. 3 at 10. In addition, Petitioner, in furtherance of the conspiracy, “would and did fail to give adequate drug screening tests, or allowed customers who failed the drug screening test to nevertheless receive prescriptions for controlled substances, or to return to the AMARC pain clinics and attempt to pass the drug test again.” Id. at 11. This conduct posed an enormous risk of harm to federal health care programs and their beneficiaries. The seriousness of Petitioner’s offense is underscored by the lengthy prison sentence imposed by the federal district court. Under these circumstances, I cannot conclude that the exclusion imposed by the IG is excessive. I therefore find that the 15‑year exclusion falls within a reasonable range.

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III. Conclusion

For the reasons explained above, I conclude that the IG properly excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs, and I sustain the 15‑year period of exclusion.

1. The current version of the Social Security Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm. Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.
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2. The judgment in Petitioner’s criminal case indicates that the federal district court imposed sentence on June 13, 2017, but that the U.S. District Judge signed the judgment on June 14, 2017. IG Ex. 4 at 1.
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3. Petitioner labeled his initial brief “P. Ex. 1.” See Docket Entry 5 in DAB E-File. Because P. Ex. 1 is a brief, and not documentary evidence, I do not enter P. Ex. 1 into the evidentiary record, but I consider the arguments Petitioner makes therein. Note that P. Exs. 2-5 appear as Docket Entries 5a-5d in DAB E-File.
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4. My findings of fact and conclusions of law appear as headings in bold italic type.
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5. Moreover, to the extent Petitioner asserts that the acts resulting in his conviction spanned “about one and one-third years” (P. Response at 2), that timeframe nonetheless exceeds the one-year threshold set forth in 42 C.F.R. § 1001.102(b)(2). If Petitioner’s argument is that the aggravating factor is not present because the total hours he worked at the AMARC clinics equaled less than one year (and that he did not take other acts in furtherance of the conspiracy outside of the time he spent within an AMARC pain clinic), such an argument ignores the plain language of the regulation. Section 1001.102(b)(2) only requires that the acts that resulted in the conviction (or similar acts) were committed over a period of one year or more, not that the sum of actual time involved in committing those acts equaled or exceeded one year.
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