Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Joseph V. Amello
(O.I. File No. H-17-42592-9),
The Inspector General,
Department of Health and Human Services.
Docket No. C-18-754
Decision No. CR5209
Petitioner, Joseph V. Amello, is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)), effective March 20, 2018. 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)). Exclusion for an additional three years, a total minimum exclusion of eight years,* is not unreasonable based on the presence of one aggravating factor and the absence of any mitigating factors.
The Inspector General (IG) notified Petitioner by letter dated February 28, 2018, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for eight years. The IG cited section 1128(a)(3) of the Act as the basis for Petitioner's exclusion. The IG stated that the exclusion was based on Petitioner's conviction in the U.S. District Court, District of Massachusetts (district court) of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service. IG Exhibit (Ex.) 1 at 1.
Petitioner timely filed a request for hearing on April 4, 2018 (RFH). I convened a prehearing conference by telephone on April 18, 2018, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated April 23, 2018 (Prehearing Order). The IG filed a motion for summary judgment with supporting brief on June 18, 2018 (IG Br.), with IG Exs. 1 through 7. Petitioner filed a response on July 28, 2018 (P. Br.), with no exhibits. On August 30, 2018, the IG filed a reply brief (IG Reply). Petitioner filed a further reply brief on September 15, 2018 (P. Reply). Petitioner did not object to my consideration of IG Exs. 1 through 7 and they are admitted as evidence.
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner's rights to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).
Pursuant to section 1128(a)(3) of the Act, the Secretary must exclude from participation in any federal health care program:
Any individual or entity that has 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 (other than those specifically described in [section 1128(a)(1)]) 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.
The Secretary has promulgated regulations implementing these provisions of the Act. 42 C.F.R. § 1001.101(c).
Pursuant to section 1128(i) of the Act, an individual is convicted of a criminal offense when: (1) a judgment of conviction has been entered by a federal, state, or local court whether or not an appeal is pending or the record has been expunged; (2) there is a finding of guilt in a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction has been withheld. 42 U.S.C. § 1320a-7(i)(1)-(4); 42 C.F.R. § 1001.2.
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 not less than five years. 42 C.F.R. § 1001.102(a). The Secretary has published regulations that establish aggravating factors the IG may consider to extend the period of exclusion beyond the minimum five-year period, as well as mitigating factors that may be considered only if the IG proposes to impose an exclusion greater than five years. 42 C.F.R. § 1001.102(b), (c).
The standard of proof is a preponderance of the evidence, and there may be no collateral attack of the conviction that provides the basis of the exclusion. 42 C.F.R. § 1001.2007(c), (d). 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).
The Secretary has by regulation limited my scope of review to two issues:
Whether the IG has a basis for excluding Petitioner from participation in Medicare, Medicaid, and all federal health care programs; and
Whether the length of the proposed period of exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1).
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by the pertinent findings of fact and analysis.
1. Petitioner's request for hearing was timely and I have jurisdiction.
2. Summary judgment is appropriate in this case.
Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing. The Secretary has provided by regulation that a sanctioned party has the right to a hearing before an ALJ, and both the sanctioned party and the IG have a right to participate in the hearing. 42 C.F.R. § 1005.2‑.3. Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration. 42 C.F.R. § 1005.6(b)(5). An ALJ may also resolve a case, in whole or in part, by summary judgment. 42 C.F.R. § 1005.4(b)(12).
Summary judgment is appropriate in an exclusion case when there are no disputed issues of material fact and when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law. Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett, DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W. Foderick, M.D., DAB No. 1125 (1990). When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one. Surabhan Ratanasen, M.D., DAB No. 1138 (1990); Foderick, DAB No. 1125. In opposing a properly supported motion for summary judgment, the nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent's prima facie case or that might establish a defense. The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment. To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder. On summary judgment, the judge does not weigh the evidence or attempt to determine the truth. Rather, the judge accepts the nonmovant's evidence as true and draws all permissible inferences in the nonmovant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-57 (1986).
There is no genuine dispute of material fact in this case. Petitioner argues that his period of exclusion should be reduced from eight years to the mandatory five years. However, even accepting Petitioner's assertions of fact as true for purposes of summary judgment, his arguments must be resolved against him as a matter of law. I conclude that summary judgment is appropriate.
3. Petitioner's exclusion is required by section 1128(a)(3) of the Act.
Petitioner was licensed as an EMT (emergency medical technician) Paramedic in Massachusetts. IG Ex. 2. Petitioner was charged by a two-count information dated June 5, 2017. The first count alleged violation of 21 U.S.C. § 843(a)(3) (acquiring a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge) in
that Petitioner diverted to his own use by deception and subterfuge, fentanyl, a controlled substance intended for patients of the ambulance company for which Petitioner worked, between about November 15, 2014, and August 7, 2015. IG Ex. 3 at 1, 4. The second count alleged a violation of 18 U.S.C. § 3559(a)(4) (tampering with a consumer product), in that between about July 1, 2015, and August 7, 2015, Petitioner removed fentanyl from vials and substituted another liquid. IG Ex. 3 at 2, 4.
On June 21, 2017, Petitioner entered a plea agreement with the United States Attorney. IG Ex. 4. Petitioner agreed to waive indictment and plead guilty to both counts of the information in exchange for a limitation on his sentence. IG Ex. 4 at 1-4.
Petitioner pleaded guilty to the two counts of the information and judgment was entered by the district court on November 30, 2017. IG Ex. 5 at 1. Petitioner was sentenced to prison for 30 months, supervised release for 36 months, and an assessment of $200. IG Ex. 5 at 2, 3, 6. Both offenses to which Petitioner pleaded guilty were felonies. 18 U.S.C. § 3559 (offense with maximum sentence of more than one year is a felony); 18 U.S.C. § 1365(a)(4) (maximum imprisonment authorized for tampering with consumer products not more than ten years); 21 U.S.C. § 843(d) (maximum imprisonment for first offense of acquiring controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge is four years).
The IG cites section 1128(a)(3) of the Act as the basis for Petitioner's mandatory exclusion. The statute requires the Secretary to exclude from participation any individual or entity: (1) convicted of an offense under federal or state law; (2) the offense occurred after August 21, 1996 (the date of enactment of the Health Insurance Portability and Accountability Act of 1996); (3) the offense was committed 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 (other than Medicare or Medicaid) operated by or financed in whole or in part by any federal, state, or local government agency; (4) the criminal offense was a felony; and (5) the offense was related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. Act § 1128(a)(3) (42 U.S.C. § 1320a-7(a)(3)); 42 C.F.R. § 1001.101(c).
Petitioner does not deny that he was convicted within the meaning of the Act, pursuant to his pleas of violations of 21 U.S.C. § 843(a)(3) (acquiring a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge) and 18 U.S.C. § 1365(a)(4) (tampering with consumer products). Petitioner does not deny that he committed the offenses of which he was convicted, after August 21, 1996. Petitioner does not deny that his offenses were related to his position as an EMT or that there is an adequate nexus between his offenses and the delivery of health care items or services under Medicare or Medicaid or another health care program. Petitioner does not deny that the offenses of
which he was convicted were both felonies. Petitioner also does not deny that his offenses were related to fraud, theft, embezzlement, or breach of his fiduciary responsibilities related to handling controlled substances in his capacity as an EMT acting for his employer. Accordingly, I conclude that the elements necessary to trigger an exclusion pursuant to section 1128(a)(3) of the Act are satisfied and Petitioner's exclusion is required by the Act.
In his request for hearing, Petitioner implies that he believes his exclusion should be overturned based on his medical history and diagnosed post-traumatic stress disorder (PTSD). RFH at 1. However, when the elements of section 1128(a)(3) of the Act are satisfied, Congress mandates exclusion and the Secretary and I have no discretion not to exclude. Section 1128(a)(3) of the Act permits no consideration of mitigating factors and requires exclusion when a qualifying conviction has occurred. Act § 1128(a)(3).
4. Five years is the minimum authorized period of exclusion pursuant to section 1128(a)(3) of the Act.
5. Petitioner's exclusion for five years is not unreasonable as a matter of law.
Congress established five years as the minimum period of exclusion for exclusions pursuant to section 1128(a) of the Act. Act § 1128(c)(3)(B). I have concluded that there is a basis to exclude Petitioner pursuant to section 1128(a)(3) of the Act. Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act. The IG has no discretion to impose a lesser period and I may not reduce the period of exclusion below five years. Accordingly, I conclude that Petitioner's exclusion for a period of five years is not unreasonable as a matter of law.
6. One aggravating factor recognized under 42 C.F.R. § 1001.102(b) is present that justifies extending the minimum period of exclusion.
The IG notified Petitioner that one aggravating factor was present in this case that justifies an exclusion of more than five years: "[t]he sentence imposed by the court included incarceration." IG Ex. 1 at 2.
Counsel for the IG argues in her post-hearing reply brief that the aggravating factor was Petitioner's conviction on the second count of 18 U.S.C. § 1365(a)(4) (tampering with consumer products). IG Reply at 1-3. However, I find no evidence that the IG notified Petitioner that his conviction on the second count was an aggravating factor. Notice of aggravating factors is required by 42 C.F.R. § 1001.2002(c)(2). Therefore, I conclude that it is not appropriate to consider whether the conviction on the second count may constitute an aggravating factor under 42 C.F.R. § 1001.102(b)(8). Further, counsel for the IG admitted in her post-hearing brief that Petitioner's conviction on the second count
was "based on the same set of facts as the basis for exclusion." IG Br. at 9. Drawing all favorable inferences for Petitioner based on the IG's admission and the information, which is in evidence as IG Ex. 3, it is not possible on summary judgment to determine whether Petitioner's conviction for the second count was actually a conviction for an offense that is factually distinct and separate from the offense alleged under the first count of the information. The IG concession indicates it is not. While the information shows two separate offenses were charged, it is not clear that the charges are not both based on the same acts or conduct or whether they are really just separate charges and, in fact, the same basis for exclusion. If the IG wished to proceed on this alternative theory related to the aggravating factor, the IG would be required to provide Petitioner notice that satisfies 42 C.F.R. § 1001.2002(c)(2), and a trial would be required to determine the facts.
There is no dispute, however, that Petitioner was sentenced to incarceration. RFH, P. Br. at 1, P. Reply. A sentence to incarceration is an aggravating factor pursuant to 42 C.F.R. § 1001.201(b)(5). The IG notified Petitioner that he considered Petitioner's sentence to incarceration an aggravating factor, satisfying the notice requirement of 42 C.F.R. § 1001.2002(c)(2). IG Ex. 1 at 2. No hearing is required related to whether Petitioner was sentenced to incarceration. Accordingly, I conclude that the aggravating factor of incarceration may be considered on summary judgment.
I conclude that the aggravating factor that the IG notice states was considered is established by the undisputed facts. The aggravating factor is a basis for the IG to extend the period of exclusion beyond the minimum exclusion of five years. 42 C.F.R. § 1001.102(b)(5).
7. Petitioner has not proven any of the mitigating factors established by the regulations.
If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) justify an exclusion of longer than five years, 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 those established by 42 C.F.R. § 1001.102(c):
(1) In the case of an exclusion under [42 C.F.R. ]§ 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,
(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.
Petitioner bears the burden of going forward and the burden of persuasion on any mitigating factors. 42 C.F.R. § 1005.15(c); Stacey R. Gale, DAB No. 1941 at 9 (2004); Arthur C. Haspel, D.P.M., DAB No. 1929 at 5 (2004).
Petitioner argues that he suffered from PTSD due to his work as an EMT. He asserts that the district court judge who sentenced him recognized that he suffered from PTSD that was not treated by Petitioner's primary care physician and that the judge had him incarcerated in a federal medical treatment facility due to his PTSD. Petitioner asserts he has been undergoing treatment and offers to produce medical evidence of his treatment. RFH; P. Br. at 1-2; P. Reply. For purposes of summary judgment, I accept Petitioner's assertions as true. I conclude, based on my review of the mitigating factors authorized by 42 C.F.R. § 1001.102(c), that there is no allegation or evidence to raise an issue as to whether the mitigating factors authorized by 42 C.F.R. § 1001.102(c)(1) and (3) may be present in this case and I do not consider them further. Petitioner's assertions do require examination of the mitigating factor established by 42 C.F.R. § 1001.102(c)(2), that is, whether the judge that sentenced Petitioner determined that Petitioner's PTSD lessened Petitioner's culpability for his offenses. Petitioner bears the burden to prove the existence of the mitigating factor by a preponderance of the evidence, that is, that it is more likely true than not. 42 C.F.R. § 1005.15(c), (d).
Pursuant to 42 C.F.R. § 1001.102(c)(2), the determination of whether the court found Petitioner had a mental health condition that lessened his culpability is to be based upon
the record in the criminal proceedings, including sentencing documents. In the judgment of conviction and imposition of the sentence, the court stated:
1) The Court makes a judicial recommendation that the defendant participate in psychological care for his mental health needs. 2) The Court recommends participation in the BOP's [Bureau of Prisons] Residential Drug Abuse Program due to the defendant's substance abuse history and based on an informal pre-screening performed by the Probation Office.
IG Ex. 5 at 2. The court states it is recommending psychological care and participation in a residential drug abuse program. The court does not state that it found Petitioner less culpable for his offenses based upon his PTSD, drug addiction, or other mental, emotional, or physical health problem. Petitioner has offered no transcript from the sentencing proceedings that I can examine to determine whether the court considered Petitioner to be of lessened culpability due to his PTSD, drug addiction, or other mental, emotional, or health problem. The sentence imposed by the court does not, on its face, indicate that the court considered Petitioner to be less culpable. Petitioner does not specifically assert in his request for hearing or his briefs that the court found him to be less culpable due to his PTSD, drug addiction, or other mental, emotional, or physical health problem. Although I accept as true for summary judgment Petitioner's assertions that he suffered PTSD and drug addiction and it is clear the court considered those facts when recommending mental health and drug treatment, Petitioner's allegations and the evidence do not show a genuine dispute of fact that the court considered Petitioner less culpable.
I conclude the evidence does not show any genuine dispute as to whether the court considered Petitioner less culpable and Petitioner cannot carry his burden to establish the mitigating factor under 42 C.F.R. § 1001.102(c)(2).
Petitioner also argues that: he took responsibility for self-medicating when confronted by his employer; he was not arrested; he agreed to plead guilty; he voluntarily stopped working; no patients were affected by his acts; he sought medical treatment but the treatment given was improper, adding to his problem; his narcotic use was related to undiagnosed PTSD; he had a long career as an EMT and suffered both physical injury and emotional trauma on the job; prior to his drug use he was a model citizen and respected employee; PTSD is an increasingly recognized problem for EMTs; and he has obtained treatment. I accept all Petitioner's assertions as true on summary judgment. However, none of Petitioner's assertions constitute a mitigating factor that I am permitted to consider under the Act or regulations.
8. Exclusion for eight years is not unreasonable in this case.
The regulation states that the ALJ must determine whether the length of exclusion imposed is "unreasonable." 42 C.F.R. § 1001.2007(a)(1). The Departmental Appeals Board (the Board), however, has made clear that 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. Juan De Leon, Jr., DAB No. 2533 at 3 (2013); Craig Richard Wilder, M.D., DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000). The Board explained that, in determining whether a period of exclusion is "unreasonable," the ALJ is to consider whether such period falls "within a reasonable range." Cash, DAB No. 1725 at 17 n.6. The Board cautions that whether the ALJ thinks the period of exclusion too long or too short is not the issue. The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.
In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggests that when it is found that an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate. Thus, the Board has by these various prior decisions significantly limited my authority under the applicable regulation to judge the reasonableness of the period of exclusion.
Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes the one aggravating factor that the IG relied on to impose the eight-year exclusion. IG Ex. 1 at 2. Petitioner has not established by a preponderance of the evidence a mitigating factor that the IG failed to consider. I conclude that a period of exclusion of eight years is in a reasonable range and not unreasonable considering the existence of one aggravating factor and the absence of any mitigating factors. No basis exists for me to reassess the period of exclusion.
Exclusion is effective 20 days from the date of the IG's notice of exclusion to the affected individual or entity. 42 C.F.R. § 1001.2002(b).
For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for the minimum statutory period of eight years, effective March 20, 2018.
Keith W. Sickendick Administrative Law Judge
- *. Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires. Reinstatement is not automatic upon completion of the period of exclusion. Regulatory citations are to the 2017 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.