Paul Thomas Biddle, M.D., DAB CR5722 (2020)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Petitioner, Paul Thomas Biddle, M.D., a physician, from participation in Medicare, Medicaid, and all other federal health care programs based on Petitioner’s conviction of a felony 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. For the reasons discussed below, I conclude that the IG has a basis for excluding Petitioner, and an exclusion for the minimum period of five years is mandatory pursuant to section 1128(c)(3)(B) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(c)(3)(B)).

I. Background

In a letter dated August 30, 2019 (herein referred to as the “Exclusion Notice”),Although the IG did not submit the Exclusion Notice as an exhibit, Petitioner submitted a copy of the notice with its request for hearing. See DAB E-File Docket Entry No. 1a. the IG excluded Petitioner from participation in Medicare, Medicaid, and all federal health care

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programs as defined in section 1128B(f) of the Act (42 U.S.C. § 1320a-7b(f)) for a minimum period of 5 years, effective 20 days from the date of the letter. Exclusion Notice at 1. The IG explained that Petitioner’s exclusion was based on a “conviction as defined in section 1128(i) (42 U.S.C. [§] 1320a-7(i)), in the United States District Court for the Western District of New York, 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, including the performance of management or administrative services relating to the delivery of such items or services . . . .” Exclusion Notice at 1. The IG explained that she had excluded Petitioner pursuant to section 1128(a)(3) of the Act, which mandates the exclusion of an individual who is convicted under federal or state law of a criminal offense relating to the delivery of an item or service under Medicare or any state health care program. Exclusion Notice at 1; see 42 U.S.C. § 1320a-7(a)(3). The IG informed Petitioner that the exclusion was for “the minimum statutory period of 5 years.” Exclusion Notice at 1; see 42 U.S.C. § 1320a-7(c)(3)(B).

Petitioner, who is represented by counsel, filed a request for hearing on April 21, 2020.Petitioner filed the request for hearing more than 60 days after the presumed date of receipt of the August 30, 2019 notice of exclusion. In response to a motion to dismiss filed by the IG, Petitioner made a reasonable showing that he did not receive the notice of exclusion until March 23, 2020. In an order dated June 9, 2020, I denied the IG’s motion to dismiss. On June 9, 2020, the Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order), and on June 24, 2020, pursuant to 42 C.F.R. § 1005.6, I presided over a telephonic pre-hearing conference. That same day, 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 five proposed exhibitsAlthough the IG’s exhibit list includes IG Exs. 1 (“Notice of Appeal”) and 2 (copy of an envelope), the IG did not file either exhibit. The IG’s brief does not substantively address either exhibit. In fact, although the IG described IG Ex. 1 as a “Notice of Appeal” in its exhibit list, it appears that the IG intended IG Ex. 1 to be the Exclusion Notice. IG Br. at 1. (IG Exs. 3-7). Petitioner, through counsel, filed a brief (P. Br.). In the absence of any objections, I admit IG Exs. 3-7 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, Lasher v. Dep’t of Health & Human

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Servs., 369 F. Supp. 3d 243 (D.D.C. 2019). I will decide this case on the written submissions and documentary evidence.

II. Issue

Whether there is a basis for exclusion pursuant to 42 U.S.C. § 1320a-7(a)(3). See 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 AnalysisMy findings of fact and conclusions of law are set forth in italics and bold font.

1. Petitioner was convicted of two counts of felony identity theft pursuant to 18 U.S.C. § 1028(a)(7).

2. Pursuant to 18 U.S.C. § 1028, the federal offense of identity theft is an offense of “fraud and related activity.”

3. Petitioner used his position as a physician and the relationship he had established with two patients, S.B. and N.W., to illegally procure controlled substances for his own use.

4. Petitioner’s convictions for identify theft are related to his delivery of health care items or services to S.B. and N.W.

5. Pursuant to section 1128(a)(3) of the Act, Petitioner’s felony convictions mandate exclusion from all federal health care programs for a minimum of five years.

The Act requires the exclusion of any individual or entity from participation in Medicare, Medicaid, and all federal health programs based on four types of criminal convictions.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.

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42 U.S.C. § 1320a-7(a). In this case, the IG relied on section 1320a-7(a)(3) as the legal basis to exclude Petitioner, 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):

* * *

(3) Felony conviction relating to health care fraud

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 paragraph (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.

42 U.S.C. § 1320a-7(a)(3).

The IG argues that she properly excluded Petitioner from all federal health care programs based on Petitioner’s convictions for offenses related to the delivery of a health care item or service. IG Br. at 6-12. As discussed below, the evidence demonstrates that Petitioner was convicted of criminal offenses, for purposes of the Act, that mandate exclusion from all federal health care programs.

Petitioner is an anesthesiologist and pain management doctor who had also operated a medical marijuana practice. IG Ex. 3 at 3. In November 2017, a Drug Enforcement Administration special agent filed a two-count criminal complaint in the United States District Court for the Western District of New York charging that, between November 11, 2013, and October 16, 2017, Petitioner had prescribed 888 controlled substance prescriptions for 23 patients, and that he had directed a pharmacy to send the prescriptions directly to his home or office. IG Ex. 3 at 1, 4. The criminal complaint charged that Petitioner, who had been S.B.’s physician prior to S.B.’s admission to a nursing home, had prescribed 10 prescriptions for hydromorphone HCI, a schedule II

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controlled substance, to S.B., even though S.B. was deceased.The criminal complaint redacted the names of Petitioner’s patients. I refer to the patients by their initials. IG Ex. 3 at 5. Likewise, the complaint charged that Petitioner had prescribed 23 prescriptions for hydromorphone HCI to another patient, N.W., after his death in February 2015. IG Ex. 3 at 6.

On January 28, 2019, the United States Attorney filed an information charging Petitioner with two counts of felony identity theft with the intent to violate 21 U.S.C. § 844(a), in violation of 18 U.S.C. §§  1028(a)(7) and (b)(2)(B), with Count 1 pertaining to S.B. and Count 2 pertaining to N.W.The offense charged in Counts 1 and 2 is captioned, “[f]raud and related activity in connection with identification documents, authentication features, and information.” 18 U.S.C. § 1028. Counts 1 and 2 are felony offenses, as evidenced by the maximum period of incarceration of five years. 18 U.S.C. § 1028(a)(7), (b)(2)(B); see IG Ex. 5 at 1 (statement in the plea agreement that “the maximum possible sentence for each count is a term of imprisonment of 5 years”); 18 U.S.C. § 3559(a) (classifying felonies as offenses punishable by more than one year of incarceration). Counts 1 and 2 charged the following, in pertinent part:

[Petitioner], in and affecting interstate commerce, did knowingly possess and use, without lawful authority, a means of identification of another person, that is, the name of [S.B. or N.W.] . . . knowing that the means of identification belonged to another actual person, with the intent to commit, to aid or abet, and in connection with, unlawful activity that constitutes a violation of Federal law. . . .

IG Ex. 4 at 1-2. Count 3 of the information charged Petitioner with misdemeanor drug possession, in violation of 21 U.S.C. § 844(a). IG Ex. 4 at 2.

On the same day that the United States Attorney filed the information, Petitioner, with the benefit of counsel, executed a plea agreement. IG Ex. 5. Petitioner acknowledged the following, in part, as the factual basis for his guilty plea:

[Petitioner] was prescribing controlled substances for deceased patients: S.B. and N.W. [Petitioner] knew these patients were deceased. He used their names and dates of birth knowingly and without lawful authority to obtain controlled substances. After S.B.’s death, [Petitioner] wrote 10 prescriptions using S.B.’s name and date of birth between November 21, 2016 and October 16, 2017. All of these prescriptions were filled by a pharmacy in Tampa, FL, and

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shipped directly to [Petitioner’s] home or office. After N.W.’s death, [Petitioner] wrote 23 prescriptions using N.W.’s name and date of birth between February 9, 2015 and August 7, 2017. All of these prescriptions were filled by a pharmacy in Tampa, FL, and shipped directly to [Petitioner’s] home or office. [Petitioner] was obtaining these prescriptions and using them himself.

IG Ex. 5 at 3.

Petitioner, through counsel, submitted a sentencing memorandum in April 2019 in which he acknowledged that he “used the identification of two deceased patients to obtain hydromorphone for his own use, because he was addicted.” IG Ex. 6 at 2. Petitioner requested a sentence of probation rather than incarceration, explaining that he “has paid a heavy price” as a result of the offenses, stating:

He is no longer a practicing/licensed physician, and it is not clear whether he will ever practice any form of medicine again or under what circumstances. In addition to the status of his license itself, he faces years of exclusion from federal reimbursement programs. He certainly faces a long and difficult road several years long, before he might ever have the opportunity to practice again.

IG Ex. 6 at 9.

A United States District Judge imposed judgment of conviction for the three offenses on May 13, 2019, at which time she ordered, inter alia, Petitioner to serve two years of probation (with no incarceration). IG Ex. 7 at 1-2. The District Judge also ordered Petitioner to forfeit $203,445 pursuant to the forfeiture provisions outlined in the plea agreement. IG Ex. 7 at 6; see IG Ex. 5 at 8.

Petitioner does not dispute he has felony convictions relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. P. Br. at 2-3. I conclude that the evidence supports that Petitioner has felony convictions, and that Petitioner’s crimes of identity theft are for fraud, or at a minimum, relate to fraud. IG Ex. 7 at 1; see 18 U.S.C. § 1028 (addressing crimes of “fraud and related activity,” to include identity theft); Charice D. Curtis, DAB No. 2430 at 4 (2011) (“[T]he plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud . . . not just to felonies that constitute fraud or one of the other listed offenses.”). Despite Petitioner’s previous acknowledgement that he “faces years of exclusion,” he now argues that his felony offenses do not mandate exclusion. P. Br. at 3-4. Specifically, Petitioner argues that

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exclusion is not mandated pursuant to section 1128(a)(3) because his convictions were not in connection with the delivery of a health care item or service. P. Br. at 3-4.

Petitioner claims that the facts underlying his convictions “do not support the third element” of section 1128(a)(3) of a connection to the delivery of a health care item or service. P. Br. at 2-4; see 42 U.S.C. § 1320a-7(a)(3). Petitioner argues that “there was no intent to prescribe or administer to a patient” and the prescriptions to his deceased patients were “always intended for [his] own use.” P. Br. at 4. I disagree, and I find that Petitioner committed the offenses of identity theft in connection with the delivery of a health care item or service.

An exclusion is mandated when the conviction is for an offense “in connection with” the delivery of a health care item or service, meaning that a criminal offense warranting exclusion is not limited only to the actual delivery or provision of such an item or service. 42 U.S.C. § 1320a-7(a)(3). The Departmental Appeals Board (DAB) has explained that an ALJ does not need to limit review to the elements of an offense, but may consider the extrinsic evidence surrounding the conviction to determine whether it is “relating to” fraud and done “in connection with” the delivery of a health care item or service. See Narendra M. Patel, M.D., DAB No. 1736 at 6 (2000), aff’d, Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003). The DAB has also explained that there should be a “common sense connection” between the underlying crime and the delivery of a health care item or service in order to meet the statutory basis for exclusion. Erik D. DeSimone, R.Ph., DAB No. 1932 at 5 (2004).

When applying a common sense analysis to the underlying facts of this case, I conclude that Petitioner’s theft of his own patients’ identities as a means to illegally procure controlled substances was “in connection with” the delivery of health care items or services. While illicit drug users may presumably have to resort to difficult or even personally dangerous means to procure drugs, Petitioner took advantage of his position as a licensed physician and his access to his own patients’ identifying information to arrange for pharmacy-filled controlled substances to be mailed directly to his home and office; had Petitioner obtained controlled substances without using his access to patient information and privileges as a physician, he would not have faced a mandatory five-year exclusion based upon the drug possession offense for which he was charged and convicted. See IG Ex. 4 at 2 (misdemeanor drug possession charge); 42 U.S.C. § 1320a-7(a)(4) (mandating exclusion for felony drug offenses). Petitioner used his access to the personal identifying information of S.B. and N.W., which he had obtained through the doctor-patient relationship he had established by providing health care items or service to these patients, in order to obtain controlled substance prescriptions for himself. Petitioner’s criminal convictions for identify theft are unquestionably related to the health care items or services he had provided to S.B. and N.W. when they had been his patients.

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Based on the foregoing analysis, I conclude that Petitioner’s felony criminal convictions mandate his exclusion from all federal health care programs. 42 U.S.C. § 1320a-7(a)(3). Congress, through enactment of the Act, determined that an individual who has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program must be excluded from federal health care programs for no less than five years, and it afforded neither the IG nor an administrative law judge the discretion to impose an exclusion of a shorter duration. 42 U.S.C. § 1320a 7(c)(3)(B). I cannot shorten the length of the exclusion to a period of less than five years because I do not have authority to “[f]ind invalid or refuse to follow Federal statutes or regulations . . . .” 42 C.F.R. § 1005.4(c)(1). An exclusion for a minimum period of five years is mandated.

6. The effective date of Petitioner’s exclusion is September 19, 2019.

The effective date of the exclusion, September 19, 2019, is 20 days after the date of the IG’s August 30, 2019 letter, and is established by regulation (42 C.F.R. § 1001.2002(b)); I am bound by that regulation. 42 C.F.R. § 1005.4(c)(1).

V. Conclusion

For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of five years, effective September 19, 2019.