George Appiah, PharmD, DAB CR6154 (2022)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, George Appiah, PharmD, from participation in Medicare, Medicaid, and all other federal health care programs based on his conviction of a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.  For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner because he was convicted of a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of controlled substances.  I affirm the nine-year length of the exclusion because the IG proved the existence of three aggravating factors and there are no mitigating factors.  I also affirm the March 20, 2022 effective date of Petitioner’s exclusion.

I.  Background

In a letter dated February 28, 2022, 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), effective 20 days from the date of the letter.  IG Ex. 1 at 1.  The IG explained that Petitioner’s exclusion was based on a felony conviction “in the United States District Court, Eastern District of Virginia, of a

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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 lengthened the exclusion beyond the mandatory minimum of five years based on the presence of the following three aggravating factors:  1) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more from “about November 2016 to about July 2018”; 2) Petitioner’s sentence included incarceration, specifically 24 months of incarceration; and 3) Petitioner was subject to another adverse action by a federal, state, or local government agency, the suspension of his license to practice pharmacy in the Commonwealth of Virginia, based on the same circumstances that formed the basis of his exclusion.  IG Ex. 1 at 1; see 42 C.F.R. § 1001.102(b)(2), (5), (9).

Petitioner submitted a timely request for an administrative law judge (ALJ) hearing that the Civil Remedies Division received on April 25, 2022.  On April 29, 2022, the Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order), and on June 7, 2022, pursuant to 42 C.F.R. § 1005.6, I presided over a telephonic pre-hearing conference.  Shortly thereafter, I issued an order in which I, inter alia, established a schedule for the filing of briefs and documentary evidence.  Pursuant to these orders, the IG filed a brief (IG Br.) and reply brief, along with six proposed exhibits (IG Exs. 1-6).  Petitioner filed a brief (P. Br.) and one proposed exhibit, P. Ex. 1, which is a collection of character reference letters addressed to the federal district judge who presided over his sentencing hearing.  Although the IG did not object to P. Ex. 1, I must, even in the absence of an objection, exclude irrelevant and immaterial evidence.  42 C.F.R. § 1005.17(c).  Inasmuch as the character reference letters in P. Ex. 1 are irrelevant and immaterial to the issues presented (e.g., whether an exclusion is mandated, and if so, whether the IG properly applied three aggravating and no mitigating factors), I exclude this evidence from the evidentiary record pursuant to 42 C.F.R. § 1005.17(c).  In the absence of any objections by Petitioner, I admit IG Exs. 1-6 into the evidentiary record.

Neither party has submitted the written testimony of any witnesses, and therefore, a hearing is unnecessary for the purpose of cross-examination of any witnesses.  Pre-Hearing Order § 11; see Lena Lasher, DAB No. 2800 at 4 (2017) (discussing that when neither party submits written direct testimony as directed, “no purpose would be served by holding an in-person hearing”), aff’d sub nom. Lasher v. Dep’t of Health & Human Servs., 369 F. Supp. 3d 243 (D.D.C. 2019). I will decide this case on the written submissions and documentary evidence.

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II.  Issues

Whether the IG has a basis for exclusion and, if so, whether the nine-year exclusion imposed by the IG is unreasonable.  42 C.F.R § 1001.2007(a)(1)-(2).

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 Analysis¹

1. Petitioner’s felony conviction for engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. § 846, 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),² 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): 

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(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.

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The IG argues that she properly excluded Petitioner from all federal health care programs based on his felony conviction relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Br.³  Petitioner does not dispute that he was convicted of a felony offense occurring after August 21, 1996, relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  P. Br.⁴  Therefore, exclusion from all federal health care programs is mandated pursuant to section 1128(a)(4).

Contemporaneous with Petitioner’s waiver of indictment and agreement to enter a guilty plea (IG Ex. 4 at 1), the United States filed a one-count information on June 26, 2020, charging that Petitioner engaged in a conspiracy to violate 21 U.S.C. § 841(a)(1) by knowingly and intentionally distributing and dispensing various controlled substances, in violation of 21 U.S.C. § 846.  IG Ex. 2.  An accompanying statement of facts in support of Petitioner’s plea agreement reported that “[f]rom at least in and around November 2016 continuing thereafter up to and including July 2018,” Petitioner “did knowingly, intentionally, and unlawfully combine, conspire, confederate, and agree with others to distribute prescription drugs,” to include oxycodone, dextroamphetamine-amphetamine, oxymorphone, alprazolam, tramadol, and promethazine.⁵  IG Ex. 3 at 1. The statement of facts reported that Petitioner “knowingly filled at least 128 prescriptions that he knew were fake or fraudulent,” and “knowingly filled the fraudulent prescriptions for cash.”  IG Ex. 3 at 2-3.  Petitioner also provided co-conspirators “with the names and medical credentials of at least five unwitting doctors for use in creating fraudulent prescriptions,” along with “templates of the five victim doctors’ prescription pads so that [the co-conspirators] could ‘photoshop’ the image and make the fraudulent prescriptions appear legitimate.”  IG Ex. 3 at 3.  Petitioner, with the benefit of counsel, executed the plea agreement on June 24, 2020.  IG Ex. 4 at 10.  Following Petitioner’s guilty plea to the offense charged by information, a federal district judge imposed a sentence that included 24 months of incarceration.  IG Ex. 5 at 1, 2.

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Petitioner does not dispute that he has a criminal conviction that mandates an exclusion.  P. Br. (“I am asking the ALJ to reduce my period of exclusion to 5 years . . . . ”).  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. § 1320a-7(i)(1), (3).  Petitioner has undoubtedly been convicted of a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Exs. 2-4; see IG Ex. 5 at 1-2 (sentence of 24 months of incarceration); see 18 U.S.C. § 3559(a) (federal criminal code classifying a crime as a felony if the offense is punishable by more than one year of incarceration).  Therefore, Petitioner’s felony conviction for engaging in a conspiracy to dispense controlled substances and the unlawful dispensing of controlled substances mandates exclusion pursuant to section 1128(a)(4) of the Act.  IG Ex. 5 at 1.

2. A nine-year minimum exclusion is not unreasonable based on the presence of three aggravating factors and no mitigating factors.

Pursuant to 42 U.S.C. § 1320a-7(c)(3)(B), the minimum period of exclusion based on a section 1128(a)(4) felony conviction relating to a controlled substance is five years.    Owing to the existence of aggravating factors, the IG imposed a nine-year exclusion, which is four years longer than the mandatory five-year minimum period of exclusion.  The IG has the discretion to impose an exclusion longer than the minimum period when aggravating factors are present.  See 42 C.F.R. § 1001.102.  Petitioner argues that an exclusion for a minimum period of nine years is not warranted and that the minimum five-year period of exclusion is appropriate.  P. Br.  However, Petitioner has not demonstrated that any of the aggravating factors considered by the IG are inapplicable, nor does Petitioner demonstrate that the IG failed to consider any regulatory mitigating factors.

As previously discussed, the IG asserts the presence of three aggravating factors.  IG Ex. 1 at 2; IG Br.  First, and as agreed to by Petitioner at the time of his guilty plea, the acts that resulted in his conviction, or similar acts, were committed over a period of one year or more from “around November 2016 and continuing thereafter up to and including July 2018.”  IG Exs. 2 at 1 (criminal information); 3 at 1 (statement of facts in support of plea agreement); see 42 C.F.R. § 1001.102(b)(2).  Second, the sentence imposed included incarceration.  IG Ex. 5 at 2; see 42 C.F.R. § 1001.102(b)(5).  And finally, Petitioner was subject to another adverse action, the suspension of his license to practice pharmacy, based on the same circumstances that support the exclusion.  IG Ex. 6; see 42 C.F.R. § 1001.102(b)(9).

Petitioner argues in his brief that the length of the acts that resulted in his felony conviction was only four months, and that the plea agreement, through its accompanying statement of facts, erroneously reports that he participated in a conspiracy to distribute controlled substances from November 2016 until at least July 2018.  P. Br. (“While the

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plea did designate the period of unlawful activity from 2016-2018, the actual facts of the case only included prescriptions uncovered during the Board’s 2018 inspection, and even those covered a short period of 4 months during 2018.”).  The information to which Petitioner entered a guilty plea charged that he engaged in a conspiracy to distribute controlled substances from “in and around November 2016 and continuing thereafter up to and including July 2018,” and Petitioner pleaded guilty to the offense charged by information.  See IG Ex. 5 at 1.  Additionally, Petitioner, through his plea agreement, “admit[ted] the facts set forth in the statement of facts filed with this plea agreement,” which reported that he engaged in the conspiracy from “in and around November 2016 continuing thereafter up to and including July 2018.”  IG Exs. 3 at 1; 4 at 2.  Petitioner admitted the 20-month duration of his criminal conduct when he pleaded guilty, and the IG properly relied on this admission as fact when she considered it to be an aggravating factor.  IG Ex. 3 at 1; see Anthony Joseph Moschetto, D.O., DAB No. 3030 at 12 (2021) (“The [DAB] has rejected an excluded individual’s attempt to rely on extraneous facts about the conviction and the underlying criminal proceedings to reduce an exclusion period lengthened by the application of aggravating factors as a collateral attack prohibited by 42 C.F.R. § 1001.2007(d).”).  The IG had a reasonable basis to lengthen the exclusion based on the 20-month duration of the criminal conduct.  42 C.F.R. § 1001.102(b)(2); see Kimberly Jones, DAB No. 3033 at 11 (2021) (unlawful conduct that “occurred over a period far exceeding a year . . . more than satisfies the aggravating factor and supports the significant weight give to it”).

With regard to Petitioner’s sentence of incarceration, Petitioner was sentenced to a significant period of incarceration of 24 months.  IG Exs. 1 at 1; 5 at 2; 42 C.F.R. § 1001.102(b)(5).  The IG correctly considered the sentence of incarceration of 24 months to be an aggravating factor.  Jason Hollady, M.D., DAB No. 1855 at 12 (2002) (determining that a nine-month period of incarceration was “relatively substantial”); Gary Alan Katz, R.Ph., DAB No. 1842 at 8 (2002) (stating that “a sentence of a minimum of one year of incarceration is still very serious”).

Finally, Petitioner was subject to another adverse action based on his felony conviction, the indefinite suspension of his license to practice pharmacy in the Commonwealth of Virginia.  IG Ex. 6; see 42 C.F.R. § 1001.102(b)(9).  Because Petitioner’s license suspension was based on the same facts underlying his conviction and exclusion, the IG properly considered the suspension of his pharmacy license to be an adverse action that is an aggravating factor pursuant to 42 C.F.R. § 1001.102(b)(9).  See Robert Kolbusz, M.D.,DAB No. 2759 at 7-8 (2017) (determining that an ALJ properly applied this aggravating factor when a licensing board allowed a physician to re-apply for a medical license after he completed his criminal sentence).

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 cannot consider evidence of mitigation unless it offsets the lengthening of a period of exclusion due to one or more of the

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enumerated aggravating factors listed in 42 C.F.R. § 1001.102(b).  42 C.F.R. § 1001.102(c).  Petitioner requests that his exclusion be reduced to five years, but he has not identified a factor, pursuant to 42 C.F.R. § 1001.102(c), that warrants mitigation.  In fact, I provided Petitioner a template brief in which I listed each of the regulatory mitigating factors, and Petitioner answered “No” in response to my question asking whether the period of exclusion should be “reduced (or further reduced) based on the presence of one or more of the mitigating factors” I had listed for him.  P. Br.  Petitioner has not claimed that the IG failed to apply a regulatory mitigating factor, nor has he submitted evidence that such a mitigating factor was overlooked by the IG.

A minimum period of exclusion of nine years is appropriate based on the presence of three aggravating and no mitigating factors; the additional four years of exclusion is not unreasonable.  See, e.g., Gary Katz, R.Ph.,DAB No. 1842 at 11 (DAB’s determination that an eight-year period of exclusion is not unreasonable based on twoaggravating factors of a minimum period of incarceration of one year and a license suspension); Laura Leyva, DAB No. 2704 at 12 (2016) (upholding a 10-year exclusion based on three aggravating factors of a program loss, a 28-month duration of the crime, and a sentence that included eight months of home confinement).

V.  Effective Date of Exclusion

The effective date of the exclusion, March 20, 2022, 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 nine years.

Endnotes

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

² While there are slight differences in the wording of section 1128 of the Act and its codification at 42 U.S.C. § 1320a-7, the two authorities are substantively identical and I refer to them interchangeably.  I further note that the Secretary of the Department of Health and Human Services has delegated to the IG the authority “to suspend or exclude certain health care practitioners and providers of health care services from participation in these programs.”  48 Fed. Reg. 21,662 (May 13, 1983); see also 42 C.F.R. § 1005.1.

³ I do not provide pinpoint citations to the IG’s brief because the IG did not submit a paginated brief.  The IG, who is represented by counsel, should take care to comply with orders and procedures.  See Pre-Hearing Order § 10 (“Briefs must be paginated.”).

⁴ Petitioner completed and submitted the paginated template brief I provided to him, and appended a memorandum to his brief.  I do not provide pinpoint citations to Petitioner’s brief.

⁵ Pursuant to the plea agreement, Petitioner “admit[ted] the facts set forth in the statement of facts . . . and agree[d] that those facts establish guilt of the offense charged beyond a reasonable doubt.”  IG Ex. 4 at 2.  The plea agreement explained that the statement of facts was “incorporated into [the] plea agreement” and “constitutes a stipulation of facts for purposes of Section 1B1.2(c) of the Sentencing Guidelines.”  IG Ex. 4 at 2.