Wilton Clinton Meeks, III, DAB CR6356 (2023)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Wilton Clinton Meeks, III (Petitioner), from participation in Medicare, Medicaid, and all other federal health care programs for seven years pursuant to sections 1128(a)(3) and 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)-(4)).¹  The IG’s exclusion of Petitioner is the result of Petitioner’s conviction of one felony count of Acquiring a Controlled Substance by Misrepresentation, Deception, or Subterfuge in violation of 21 U.S.C. § 843(a)(3).  Petitioner’s exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).  The IG proved the presence of two aggravating factors and is therefore permitted to extend the minimum exclusion period of five years, by an additional two years, for a total minimum exclusion period of seven years.  Petitioner did not prove the presence of any mitigating factors.  For the reasons stated below, I affirm the IG’s exclusion determination under section 1128(a)(3) and find the seven-year duration of the exclusion is not unreasonable. 

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I.      Background and Procedural History

On August 1, 2018, Petitioner voluntarily surrendered his pharmacist license to the Georgia State Board of Pharmacy.  IG Ex. 5.  On August 2, 2018, Petitioner voluntarily surrendered his DEA Certificate of Registration for cause.  P. Ex. 3.  On February 5, 2019, the United States Attorney filed an Information in the Southern District of Georgia, Augusta Division, charging Petitioner with Acquiring a Controlled Substance by Misrepresentation, Deception, or Subterfuge in violation of 21 U.S.C. § 843(a)(3)².  IG Ex. 3. 

On March 19, 2019, Petitioner entered a guilty plea to one felony count of Acquiring a Controlled Substance by Misrepresentation, Deception, or Subterfuge in violation of 21 U.S.C. § 843(a)(3).  IG Ex. 6.  Petitioner’s guilty plea was accepted and on September 4³, 2019, he was sentenced to probation.  IG Ex. 7.  Petitioner pled guilty to the contents of the Information, which charged that, from January 1, 2017 through July 1, 2018, Petitioner “knowingly and intentionally acquired Oxycodone, a Schedule II controlled substance, by misrepresentation, deception, or subterfuge, to wit, that [he] acquired Oxycodone that [he] knew had not been prescribed to [him] from a pharmacy under [his] control for [his] personal use.”  IG Ex. 3. 

On November 27, 2019, Petitioner and his pharmacy entered into a settlement agreement with the DEA, which resulted in Petitioner and his pharmacy paying $150,000 to the United States.  P. Ex. 6. 

By letter dated April 29, 2022, the IG excluded Petitioner under sections 1128(a)(3) and (a)(4) of the Act for eight years because:  1) the criminal conduct occurred for a period greater than one year (42 C.F.R. § 1001.102(b)(2)); 2) Petitioner had a prior record of an

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administrative sanction because the Georgia Board of Pharmacy accepted Petitioner’s voluntary license surrender (42 C.F.R. § 1001.102(b)(6)); and 3) Petitioner has been the subject of any other adverse action by any government agency or board based on the same set of circumstances that serves as the basis for the exclusion, because the Georgia Board of Pharmacy reinstated Petitioner’s license to practice with conditions of probation (42 C.F.R. § 1001.102(b)(9)).  IG Ex. 1.  On August 15, 2023, the IG amended the initial Notice of Exclusion revising the exclusionary period to seven years and removing the last aggravating factor from the initial notice of exclusion due to the inapplicability of 42 C.F.R. § 1001.102(b)(9) to the facts of this case.  IG Ex. 11.  

Petitioner filed a request for hearing (RFH) on May 6, 2022.  I conducted a prehearing telephone conference on June 1, 2022, the substance of which I memorialized in my Order issued June 3, 2022, including a schedule for submission of arguments and evidence by the parties.  The IG submitted her prehearing exchange composed of a prehearing brief (IG Br.) and 10 exhibits (IG Exs. 1-10).  Petitioner submitted his prehearing exchange composed of a prehearing brief (P. Br.) and 18 exhibits (P. Exs. 1-18).  Petitioner proposed four witnesses and indicated in his prehearing exchange that he believed an in-person hearing was necessary to decide his case.  The IG did not believe an in-person hearing was necessary to decide the case but reserved the right to provide a witness list and offer testimony if I set an in-person hearing for this case.  The IG waived filing a further reply to Petitioner’s prehearing exchange.  

Upon review of the record, I issued an order setting a prehearing conference for November 1, 2022 at 3:00 p.m. EST.  During the prehearing conference, Petitioner’s counsel affirmed that Petitioner would like to proceed to an oral hearing.  Counsel for the IG indicated that she did not believe the matter needed to be set for an oral hearing.  Because Petitioner requested an oral hearing, proposed at least two witnesses that would provide testimony relevant to whether “theft” or unlawful “distribution” or “dispensing” of a controlled substance was involved, I set this matter for a hearing for February 1, 2023. 

I held a hearing on February 1, 2023.  On March 21, 2023, I issued a notice of receipt of transcript, including a schedule for submission of post-hearing arguments by the parties.  The IG submitted her post-hearing brief (IG Post-hrg. Br.) and IG Exhibit 11.  Petitioner submitted his post-hearing brief (P. Post-hrg. Br.). 

II.     Jurisdiction

Petitioner timely requested a hearing, and I have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

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III.    Issues

The Secretary of Health and Human Services (Secretary) has, by regulation, limited my scope of review to two issues:  Whether the IG has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and, if so, whether the length of the exclusion imposed by the IG is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1).  Here, Petitioner contests the IG’s decision to exclude him from participation in federal health care programs under sections 1128(a)(3) and 1128(a)(4) of the Act and the seven-year duration of the exclusion.  See generally RFH; P. Br.; P. Post-hrg. Br. 

IV.     Exhibits

Neither party objected to the other’s proposed exhibits.  In my Notice of Hearing issued December 15, 2022, I admitted IG Exhibits 1 through 10 and Petitioner Exhibits 1 through 18 into evidence.  Petitioner did not object to IG Exhibit 11, and I therefore enter IG Exhibit 11 into evidence as well. 

V.      Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s right to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary.  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, while the rights of both the sanctioned party and the IG to participate in a hearing are specified at 42 C.F.R. § 1005.3.  

The Secretary shall exclude an individual from participation in Medicare, Medicaid, and all other federally funded health care programs if that individual:  

[H]as been convicted for an offense which occurred after August 21, 1996, under Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program . . . operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.  

42 U.S.C. § 1320a-7(a)(3); Act § 1128(a)(3).  The Secretary has promulgated regulations implementing this provision of the Act.  42 C.F.R. § 1001.101(c).  The Secretary has interpreted this statutory provision to include “the performance of management or

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administrative services relating to the delivery of such items or services” as sufficient to mandate exclusion.  42 C.F.R. § 1001.101(c)(1).  

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for a period of no fewer than five years.  Pursuant to 42 C.F.R. § 1001.102(b), an individual’s period of exclusion may be extended based on the presence of specified aggravating factors.  Only if the aggravating factors justify an exclusion of longer than five years, however, are mitigating factors considered as a basis for reducing the period of exclusion to no less than five years.  42 C.F.R. § 1001.102(c). The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(b), (c). 

VI.     Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and are followed by pertinent findings of fact and analysis. 

1. The IG established a basis for Petitioner’s exclusion pursuant to section 1128(a)(3) of the Act (42 U.S.C. § 1320a-7(a)(3)). 
   1. Petitioner was convicted of a felony occurring after August 21, 1996.

Petitioner does not dispute that he was convicted of acquiring a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge in violation of 21 U.S.C. § 843(a)(3).  Transcript (Tr.) at 28; P. Br. at 2; P. Post-hrg. Br. at 3, 8. 

On September 4, 2019, the United States District Court for the Southern District of Georgia entered judgment against Petitioner and sentenced Petitioner to probation.  IG Ex. 7.  I therefore find that Petitioner was convicted of a felony occurring after August 21, 1996. 

2. Petitioner was convicted of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct that was committed in connection with the delivery of a health care item or service.

1. Petitioner’s felony offense is related to fraud.

Section 1128(a)(3) of the Act requires that the felony offense forming the basis for the exclusion relate to “fraud, theft, embezzlement, breach of fiduciary responsibility, or

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other financial misconduct.”  42 U.S.C. § 1320a-7(a)(3).  Petitioner disputes that his conviction relates to fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct.  P. Br. at 3-4; P. Post-hrg. Br. at 4-7. 

In this case, Petitioner entered a guilty plea to Count One of the Information, which charged him with Acquiring a Controlled Substance by Misrepresentation, Deception, or Subterfuge in violation of 21 U.S.C. § 843(a)(3).  P. Ex. 4.  The Information makes no mention of fraud or theft.  See id.  However, Petitioner’s plea agreement includes a recitation of the elements and a following factual basis for Count One as follows: 

The elements necessary to prove the offense charged in Count One are (1) that [Petitioner] acquired or obtained possession of a controlled substance[;] (2) that [Petitioner] did so by misrepresentation, fraud, deception, or subterfuge; and (3) that [Petitioner] did so knowingly and intentionally. 

[Petitioner] agrees that he is, in fact, guilty of this offense.  He agrees to the accuracy of the following facts, which satisfy each of the offense’s required elements: 

Beginning at least as early as January 1, 2017 and continuing until on or about July 1, 2018, in the Southern District of Georgia, [Petitioner] knowingly and intentionally acquired Oxycodone, a Schedule II controlled substance, by misrepresentation, deception, or subterfuge, to wit, that [Petitioner] acquired Oxycodone that [Petitioner] knew had not been prescribed to [Petitioner] from a pharmacy under [Petitioner’s] control for [Petitioner’s] personal use, in violation of Title 21 United States Code, Section 843(a)(3), and that [Petitioner’s] guilty plea constitutes proof as to that Count. 

P. Ex. 4 at 1-2 (emphasis supplied).  Petitioner acknowledged, accepted, and voluntarily agreed to each provision of the Plea Agreement.  P. Ex. 4 at 12. 

While Petitioner’s plea agreement and the information do not specifically state that Petitioner intentionally acquired Oxycodone via fraud but rather by “misrepresentation, deception, or subterfuge,” Petitioner’s conviction and the underlying circumstances leading thereto nonetheless “relate to” fraud as required by section 1128(a)(3).  The Board has observed that “the plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud and other types of listed offenses, not just to felonies that constitute fraud or one of the other listed offenses.”  Charice D. Curtis, DAB No. 2430 at 4 (2011)); see also Breton Lee Morgan, M.D., DAB No. 2264 at 5-6 (2009) (finding that

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Petitioner’s “narrow interpretation of section 1128(a)(3)” that would have, “in effect, change[d] the commonly accepted meaning of ‘fraud’ to be limited only to those criminal offenses where the individual has a corrupt motive to effectuate a substantial pecuniary gain,” was “not compatible with the structure and context of the statutory language as a whole” and “not consistent with the statutory purposes”), appeal dismissed, No. 3:09–1059, 2010 WL 3702608 (S.D.W. Va. Sept. 15, 2010) (holding that “the Final Decision of the Secretary is supported by substantial evidence and is in accordance with the appropriate legal standards”), aff’d, 694 F.3d 535 (4th Cir. 2012). 

Friedman v. Sebelius, 686 F.3d 813 (D.C. Cir. 2012) and Quayum v. United States Dep’t of Health & Human Servs., 34 F.Supp.2d 141 (E.D.N.Y. 1998) are instructive to this case as well.  In Friedman, the D.C. Circuit examined the question of whether the phrase “misdemeanor relating to fraud” in section 1128(b)(1)(A) of the Act “refers to a generic criminal offense or to the facts underlying the particular defendant’s conviction.”  686 F.3d at 818-19, rev’d on other grounds, 755 F.Supp.2d 98 (D.D.C. 2010), aff’d, Paul D. Goldenheim, M.D., et al., DAB No. 2268 (2009).  The D.C. Circuit, 686 F.3d at 820, cited Morales v. Trans World Airlines, Inc. as stating that the “ordinary meaning of [relating to] is a broad one – ‘to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with’ . . . .”  Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992) (quoting Black’s Law Dictionary 1158 (5th ed. 1979)).  The D.C. Circuit further described the phrase “relating to” as “deliberately expansive” and a phrase that is not subject to a “crabbed and formalistic interpretation.”  686 F.3d at 820 (internal quotation marks and citations omitted).  In Quayum, the Eastern District of New York held, “[t]he term ‘related to’ simply means that there must be a nexus or common-sense connection.”  34 F.Supp.2d at 143, dismissing appeal from DAB CR408 (1995). 

Given the Board’s and other Courts’ expansive interpretation of the phrase, I find that Petitioner’s  felony conviction “relates to” fraud.  See also Yohannes Tinsae, DAB No. 3084 (2023) (Board upheld an ALJ’s decision that Petitioner’s conviction under 21 U.S.C. § 843(a)(3) due to misrepresentation was related to fraud for purposes of section 1128(a)(3) of the Act).  This forum has defined fraud as “a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.”  See Morgan, DAB CR1913 at 5-6 (citing Black’s Law Dictionary) (emphasis added); see also Adel A. Kallini, M.D., DAB CR5192 (2018) (same); Mohammed Siddique, M.D., et al., DAB CR4692 (2016) (same); Heather A. Panek, DAB CR4668 (2016) (same); Shannon Lee Irons a/k/a Shannon Le Debroeke, DAB CR3760 (2015) (same); Mohammed A. Adad, M.D., DAB CR1202 (2004) (same).  There is a nexus or common-sense connection between fraud and Petitioner’s felony conviction under 21 U.S.C. § 843(a)(3): the structure of the statute itself acknowledges the relatedness between fraud and misrepresentation, deception, and subterfuge as any one of these is sufficient to satisfy the second required element of the statute.  Moreover, the underlying facts distill to at least a knowing, implied misrepresentation/concealment of a material

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fact (the controlled substances will be for the use of the pharmacy and not for personal use without a prescription) to induce another to act (supply the controlled substance or the government to permit possession of the controlled substance).  The only missing element is that the induced action was not to the detriment of the actor (the supplier or the government) and is thus not fraud, but there is clear nexus with fraud. 

Petitioner argues he did not practice any deception in connection with dispensing drugs.  Tr. at 20.  This testimony is inconsistent with the facts giving rise to his conviction:  Petitioner knowingly and intentionally took controlled substances for his own personal use that he knew he did not have a prescription for, and he hid these actions for at least eighteen months⁴.  P. Ex. 4 at 1-2.  As detailed in the guilty plea, Petitioner used his status as the pharmacist and owner of his pharmacy to gain access to a controlled substance when he knew he did not have an active prescription.  Petitioner’s acquiring and possessing controlled substances for his pharmacy was only possible based on the representation—whether explicitly or implicitly— that the controlled substances will be distributed, dispensed, or administered in accordance with the law and not be used for personal consumption without a prescription.  Therefore, similar to fraud, Petitioner used his status and representation as an owner of a pharmacy and a pharmacist to obtain controlled substances he otherwise would not have been able to legally obtain without a prescription.  Furthermore, failing to account for the controlled substances he took for personal use in the records required by the Drug Enforcement Agency—material information required to control access to and to account for the whereabouts of a substance or drug—is also a misrepresentation or deception.  P. Post-hrg. Br. at 4. 

Petitioner mischaracterizes the scope of the IG’s exclusion authority and statutory mandate as narrower than it has in fact been interpreted.  While it is true that the record contains no evidence that Petitioner’s actions caused or would cause any loss to any government program (or harm any beneficiaries), illicit pecuniary gain or loss to a Federal or State program is not required under current law to find that a conviction is related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.  Although Petitioner is correct that there are no allegations that he took any action to induce another person to act to their detriment, as commonly conceived in fraud cases, his misrepresentation did induce another to supply him with controlled substances that would not have been provided to him had he informed the supplier of his intended personal use.  As such, I find that Petitioner’s felony conviction is related to fraud. 

2. Petitioner’s felony offense was committed in connection with the delivery of a health care item or service.

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In order for the IG to exclude Petitioner under section 1128(a)(3), the felony offense that was the basis of Petitioner’s conviction must have been committed “in connection with the delivery of a health care item or service.”  42 U.S.C. § 1320a-7(a)(3).  Petitioner also disputes that his conviction for Acquiring a Controlled Substance by Misrepresentation, Deception, or Subterfuge in violation of 21 U.S.C. § 843(a)(3) occurred in connection with the delivery of a health care item or service.  P. Br. at 3; P. Post-hrg. Br. at 7-8. 

The term “relating to” means that there must be a nexus or common-sense connection between the offense and the delivery of a health care item or service.  Erik D. DeSimone, R.Ph., DAB No. 1932 at 5 (2004); see also Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” with regard to a permissive exclusion related to fraud as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotation marks omitted).  The “exclusion authority under section 1128 is not limited ‘to the bare elements of the offense on which the individual was convicted.’”  Aiman M. Hamdan, M.D., DAB No. 2955 at 7 (2019) (quoting with approval the ALJ’s decision (DAB CR5270 at 4 (2019))); see also Kami L. Purvis, DAB No. 2990 at 5-6 (2020).  An ALJ is “not limited to considering the bare elements or labels of the criminal statutes under which the individual was convicted.”  Funmilola Mary Taiwo, DAB No. 2995 at 8 (2020).  The ALJ may look at “‘evidence as to the nature of an offense,’ such as the ‘facts upon which a conviction was predicated.’”  Id. (quoting Berton Siegel, D.O., DAB No. 1467 at 4 (1994)). 

There is a basis for exclusion even if the individual’s involvement is limited to “the performance of management or administrative services relating to the delivery of such items or services.”  42 C.F.R. § 1001.101(c)(1).  This includes offenses which could not have been committed without the individual’s position in the chain of delivery.  See Erik D. DeSimone, R.Ph., DAB No. 1932 (2004).  In DeSimone, the ALJ upheld an exclusion under section 1128(a)(3) of a pharmacist who stole drugs from his employer pharmacy for his personal use.  The ALJ reasoned that because a retail drug store obtains controlled substances for the purpose of delivering them to individuals in order to meet their physical, mental, or emotional needs, the petitioner’s interference with that delivery by taking those controlled substances for his own use was sufficient to establish a common- sense connection between the crime of stealing controlled substances from the pharmacy and the delivery of a health care item.  Erik D. DeSimone, R.Ph., DAB CR1163 (2004).  The ALJ found, and the Board agreed, that the drug the petitioner was convicted of stealing from his employer pharmacy would have been otherwise delivered to the general public as part of his responsibilities at the pharmacy: 

Indeed, Petitioner was able to steal this drug because he had access to it while he was in the process of performing his professional responsibilities of delivering health care items or

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services to the general public.  Petitioner’s theft of the drug while under the guise of performing his professional responsibilities is clearly the requisite common sense “connection” to health care delivery that section 1128(a)(3) requires.  Moreover, as the ALJ specifically found, his theft of this particular drug unquestionably had the effect of subverting the delivery by him and his employer of the very same drug to the general public. 

DeSimone, DAB No. 1932 at 5. 

Petitioner’s arguments that as the sole owner of his pharmacy the drugs belonged to him and that because he did not seek reimbursement from the Medicare or Medicaid program, there was no relation to health care, are unavailing: 

As a matter of logic and fact, the nature or monetary value of a stolen health care item has no bearing on whether the offense has occurred in connection with the item’s “delivery.”  As in DeSimone, the required connection exists in this case because Petitioner, while performing his duties of dispensing drugs to the general public, stole one of these drugs. 

To the extent that Petitioner contends that section 1128(a)’s applicability depends, as a matter of law, on the value or regulatory status of the stolen “health care item,” that position is not supported by the statute’s text.  Nothing in section 1128(a)(3) or the corresponding regulation requires that the health care item have “significant” or “substantial” monetary value.  There is also no requirement that the excluded person reap a profit from the misconduct.  In addition, the statute and regulation contain no exceptions for felony offenses involving small or de minimis quantities of drugs, drugs that are not controlled substances, or drugs that are taken for purposes other than resale or abuse by the defendant.  The statute simply requires that the offense of which the individual was convicted have some connection with the delivery of a health care item. If the offense meets that criterion – as it does in this case – it is covered by section 1128(a)(3) and a basis for mandatory exclusion. 

Andrew D. Goddard, DAB No. 2032 at 5-6 (2006).

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Petitioner’s conviction for acquiring a controlled substance by misrepresentation, deception, or subterfuge, is related to the delivery of health care items or services in the same way as the conviction described in DeSimone is.  Petitioner worked as a pharmacist in a pharmacy he owned and operated.  P. Ex. 4 at 2; P. Post-hrg. Br. at 1-2.  As the owner of the pharmacy and the pharmacist, Petitioner performed both management and administrative services with respect to drugs (a health care item).  While he was working at the pharmacy, Petitioner took the drugs he had access to as the pharmacist for his own personal use without a prescription.  P. Post-hrg. Br. at 2.  Petitioner hid the fact that he was ingesting the medications in the pharmacy instead of returning to his physician to get his prescription refilled.  P. Post-hrg. Br. at 4; see also P. Ex. 4 at 2 (“. . . [Petitioner] acquired Oxycodone that [Petitioner] knew had not been prescribed to [Petitioner] from a pharmacy under [Petitioner’s] control for [Petitioner’s] personal use . . .”). 

Petitioner’s “self-medication” or “utilizing the medications” do not change the facts:  Petitioner took health care items in the form of controlled substances for personal use that were only in Petitioner’s possession for purposes of delivering the health care items to patients with the appropriate prescription.  He had access to controlled substances while he was in the process of performing his professional responsibilities of delivering health care items or services to the public.  As a pharmacist, Petitioner’s professional service lies in his qualification to perform a health care service in the chain of delivery, in part, through dispensing a health care item—controlled substances—to the public.  Petitioner’s actions resulting in the conviction for acquiring a controlled substance by misrepresentation, deception, or subterfuge have a clear connection to the delivery of a health care item or service. 

2. Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(3), he must be excluded for a minimum of five years.  42 U.S.C. § 1320a-7(c)(3)(B). 

3. Because I have concluded that a basis exists to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(3), I need not decide whether a basis exists to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(4). 

As discussed above, exclusion was authorized under section 1128(a)(3) (42 U.S.C. § 1320a-7(a)(3)).  Exclusion under section 1128(a)(3) is mandatory, therefore the possible existence of a second basis for exclusion has no impact on the requirement to exclude Petitioner in this case, and I need not decide whether mandatory exclusion pursuant to 42 U.S.C. § 1320a-7(a)(4) of the Act applies in this case. 

4. The IG has established two aggravating factors which together permit the IG to lengthen the exclusion beyond the five-year statutory minimum.

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In relevant part, the following factors may be considered to be aggravating and a basis for lengthening the period of a mandatory exclusion under section 1128(a)(3): 

(2)  The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more;

* * * *

(6)  The convicted individual or entity has a prior criminal, civil or administrative sanction record;

42 C.F.R. § 1001.102(b)(2) and (6). 

The IG bears the burden of establishing aggravating factors.  42 C.F.R. § 1005.15(c).  The IG has met its burden with respect to the two aggravating factors which together permit the IG to lengthen the exclusion beyond the five-year statutory minimum, as discussed below. 

1. The IG established that the acts that resulted in Petitioner’s conviction were committed over a period of one year or more. 

Under 42 C.F.R. § 1001.102(b)(2), the IG may extend the length of an exclusion if “the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.” 

Petitioner’s guilty plea includes a factual basis for his conviction that supports each element of the offense for which he was convicted.  P. Ex. 4 at 1-2.  Petitioner agreed that he knowingly and intentionally obtained possession of a controlled substance by misrepresentation, deception, or subterfuge “[b]eginning at least as early as January 1, 2017 and continuing until on or about July 1, 2018 . . .”.  P. Ex. 4 at 2. 

Petitioner does not dispute the accuracy of the recitation of facts in the guilty plea.  P. RFH; P. Br.; P. Post-hrg. Br.  The acts that resulted in Petitioner’s conviction were committed between January 1, 2017 and until on or about July 1, 2018 – a period of over one year.  Accordingly, the IG established a basis for application of the aggravating factor set forth at 42 C.F.R. § 1001.102(b)(2). 

2. The IG established that Petitioner has a prior criminal, civil or administrative sanction record. 

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Under 42 C.F.R. § 1001.102(b)(6), the IG may extend the length of an exclusion if “the convicted individual or entity has a prior criminal, civil or administrative sanction record.”

On August 6, 2018, Petitioner voluntarily surrendered his license to practice as a pharmacist in the State of Georgia.  IG Ex. 5 at 1.  The voluntary surrender clearly states that it will have the same effect as a license revocation and will be considered a public record of a disciplinary action taken by the Georgia State Board of Pharmacy against Petitioner’s license with his consent.  IG Ex. 5 at 1-2. 

The August 6, 2018 administrative sanction occurred prior to Petitioner’s April 29, 2022 exclusion.  Accordingly, the IG established a basis for application of the aggravating factor set forth at 42 C.F.R. § 1001.102(b)(6). 

3. There are no mitigating factors applicable in this case. 

If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) that permit the IG to impose an exclusion of longer than five years apply, as they do in this case, then mitigating factors may be considered as a basis for reducing the period of exclusion to no less than five years.  42 C.F.R. § 1001.102(c).  The only authorized mitigating factors that I may consider are listed in 42 C.F.R. § 1001.102(c): 

(1) In the case of an exclusion under § 1001.101(a), whether the individual or entity was convicted of three or fewer misdemeanor offenses and the entire amount of financial loss (both actual loss and intended loss) to Medicare or any other Federal, State, or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $5,000;

(2) The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual’s culpability; or

(3) The individual’s or entity’s cooperation with Federal or State officials resulted in –

(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

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(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or

(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.  

The IG inquired as to the possibility of a mitigating factor under 42 C.F.R. § 1001.102(c)(3) when investigating the basis for Petitioner’s exclusion.  See IG Ex. 10 (email from IG counsel requesting clarification on Petitioner’s potential cooperation in government investigations).  However, the IG determined none existed, and therefore the IG was unable to consider any mitigating factors in deciding to extend the duration of Petitioner’s exclusion to eight years.  In response to Petitioner’s argument that certain mitigating factors should reduce the length of exclusion, the IG argues there is no evidence of any mitigating factors under 42 C.F.R. § 1001.102(c) to support the reduction of Petitioner’s exclusion to the mandatory minimum of five years.  IG Br. at 12-15.  

Petitioner has the burden of proving any mitigating factors and affirmative defenses.  42 C.F.R. § 1005.15(c); Standing Prehearing Order ¶ 5.  Petitioner urges me to consider the following to be essentially mitigating factors that justify reducing the period of his exclusion:  

• Petitioner became addicted to opioids before the United States Food and Drug Administration became aware of the effects of opioid addiction;
• Petitioner had no previous criminal record;
• The Georgia State Board of Pharmacy has reinstated his license on a probationary basis;
• The United States District Court for the Southern District of Georgia terminated Petitioner’s probation early;
• Other IG cases had an economic loss to a government program and those petitioners were incarcerated, neither of which occurred here; and
• Petitioner’s addiction was not his fault. 

P. Br. at 7-8.

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Petitioner’s arguments regarding his addiction—that he became addicted to opioids through no fault of his own and prior to the United States government becoming aware of the effects of opioid addiction—may be viewed as an attempt to argue that he had a mental, emotional or physical condition before or during the commission of the offense that reduced his culpability.  This mitigating factor, however, requires that the record in the criminal proceedings “demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual’s culpability.”  42 C.F.R. § 1001.102(c)(2).  Petitioner has provided no such evidence in this proceeding, and in his guilty plea, Petitioner acknowledges that his actions were committed knowingly and intentionally.  See P. Ex. 4 at 1-2.  As a result, I find that Petitioner has failed to prove the existence of the mitigating factor under 42 C.F.R. § 1001.102(c)(2). 

Petitioner contends that the petitioners in the comparable cases were incarcerated and caused economic loss to a government program, ⁵ but omits any acknowledgment that although incarceration is a separate aggravating factor that does not apply here, there are two other aggravating factors that the IG instead cites in support of the seven-year exclusion duration in his own case.  P. Br. at 7-8.  Neither case Petitioner cites rebuts the IG’s own citation of them demonstrates that Petitioner’s seven-year exclusion falls outside a reasonable range:  “[T]he assessment of aggravating and mitigating factors is qualitative, focusing on the circumstances of the case at hand, rather than quantitative or a matter of mathematical formulas . . . .”  Sushil Aniruddh Sheth, M.D., DAB No. 2491 at 8 (2012).  In reviewing whether an exclusion duration in excess of the statutory minimum is unreasonable, “[c]omparisons with other cases are not controlling and of limited utility” because aggravating and mitigating factors “must be evaluated based on the circumstances of a particular case . . . which can vary widely.”  Robert Hadley Gross, DAB No. 2807 at 2, 6 (2017) (internal quotation marks omitted); see also Edwin L. Fuentes, DAB No. 2988 at 15 (2020), aff’d, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021) (“The Board has repeatedly explained that comparing exclusion periods is not generally helpful in assessing reasonableness, due in part to the varying mix of factors and wide range of relevant circumstances that may need to be considered in individual cases.”). 

While Petitioner’s situation and the circumstances surrounding his addiction are sympathetic, unfortunately, Petitioner does not offer evidence of any of the mitigating factors authorized by 42 C.F.R. § 1001.102(c).  That the circumstances resulting in the imposition of the exclusion did not cost or take from any government program and that there was no patient harm or evidence of safety concerns are not presently enumerated mitigating factors.  That Petitioner has demonstrated he has successfully completed a

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rehabilitation program and has not had an incident with controlled substances during his probationary period is not presently an enumerated mitigating factor. And that the licensing board specifically charged with determining the fitness of pharmacists to practice has reinstated Petitioner’s license is also not presently an enumerated mitigating factor.  Accordingly, Petitioner has not established any of the mitigating factors currently recognized under the law for reducing the period of exclusion. 

5. Given the specific facts pertaining to the applicable aggravating factors, a seven-year exclusion period is not unreasonable.

The role of the ALJ in exclusion cases is to conduct a de novo review of the facts related to the basis for the exclusion and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period of exclusion imposed by the IG falls within a reasonable range.  42 C.F.R. § 1001.2007(a)(1)(ii); Craig Richard Wilder, DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000). 

While the IG is not compelled to extend the length of exclusion for any period beyond five years in the presence of aggravating factors, it may choose to exercise its discretion to do so.  42 C.F.R. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion.” (emphasis supplied)).  An ALJ must uphold the IG’s determination as to the length of exclusion unless it is unreasonable, and an ALJ has no authority to change the amount of time chosen by the IG if it is within a reasonable range.  42 C.F.R. § 1001.2007(a)(1)(ii); 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992). 

The IG has established two aggravating factors which Petitioner does not dispute, and Petitioner has established no mitigating factors.  Furthermore, Petitioner does not dispute the weight the IG assigned to the aggravating factors in determining the length of the exclusion period.  In light of the facts supporting the two aggravating factors and no mitigating factors, I therefore conclude that the IG’s assessment of a seven-year exclusionary period is not unreasonable.  Though it would have been reasonable under the circumstances of this particular case for the IG not to have extended the five-year mandatory exclusion period (or extended it for a shorter period of time), the IG’s addition of two years to the exclusionary period as a result of these two aggravating factors still falls within a reasonable range.  Petitioner used his status as a pharmacist and the owner of a pharmacy to obtain access to opioids that he knew he did not have a lawful prescription to take, and he took them for his own personal use.  Despite being motivated by the desire or need to fuel his addiction, Petitioner still obtained a controlled substance by means related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct and committed the conduct in connection with the delivery of a health care item or service.  I therefore must conclude that the length of the exclusion imposed by the IG is not unreasonable. 

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VII.    Conclusion

I affirm the IG’s determination to exclude Petitioner for seven years from participating in Medicare, Medicaid, and all other federal healthcare programs pursuant to 42 U.S.C. § 1320a-7(3), and I find that the length of the exclusion imposed by the IG is not unreasonable. 

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Endnotes

¹  The initial Notice of Exclusion was amended to remove an aggravating factor and to correspondingly reduce the exclusionary period from eight to seven years.  IG Ex. 11.

²  The elements of 21 U.S.C. § 843(a)(3) are as follows:  

(a)  Unlawful Acts:  It shall be unlawful for any person knowingly or intentionally --

* * * *

(3)  to acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.

³  In the Judgment in a Criminal Case, September 4, 2019 is noted as the Date of Imposition of Judgment.  The Chief Judge of the United States District Court for the Southern District of Georgia signed the Judgment in a Criminal Case on September 6, 2019, and the judgment was filed on the same date.  IG Ex. 7.

⁴  Petitioner’s refusal or negligent failure to keep proper records related to controlled substances may have begun as early as May 1, 2015.  See P. Ex. 6 at 1-2.

⁵  Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 (2002); Donald A. Burstein, Ph.D., DAB No. 1865 (2003).