Bryant Pryor, DAB CR6502 (2024)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Bryant Pryor (Petitioner), from participation in Medicare, Medicaid, and all other federal health care programs for 8 years pursuant to section 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(4)).  The IG’s exclusion is the result of Petitioner’s conviction for Felony Conspiracy to Distribute and Dispense Controlled Substances in violation of 21 U.S.C. § 846.

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.  However, Petitioner also proved the presence of a mitigating factor—his cooperation with federal officials which resulted in others being convicted.  For the reasons stated below, I affirm the IG’s exclusion determination under section 1128(a)(4).  I also find the exclusion’s 8-year duration to be unreasonable and reduce the exclusion period to 7 years.

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I. Background and Procedural History

Petitioner is a physician who was licensed to practice medicine in the state of Texas.  IG Exhibit (Ex.) 3 at 4.  Petitioner was the Medical Director of Priority Wellness, which marketed itself as a pain management clinic in Houston, Texas.  Id.

A Superseding Indictment was filed on June 21, 2018, charging Petitioner with one count of conspiracy to distribute and dispense controlled substances, in violation of 21 U.S.C. § 846,¹ and three counts of aiding and abetting the unlawful distribution and dispensing of controlled substances, in violation of 21 U.S.C. § 841 and 18 U.S.C. § 2.  IG Ex. 3 at 6-9.

From approximately December 2016 to July 2017, Petitioner, along with three individuals (K.D., S.F. and C. W. Thompson), conspired to prescribe controlled substances for illegitimate medical purposes and outside the scope of professional practice.  Id. at 6.  Specifically, Petitioner used his status as a licensed physician and his DEA registration number to knowingly prescribe Schedule II controlled substances, including hydrocodone and oxycodone, outside the course of professional practice and without a legitimate medical purpose.  Id. at 7.  Petitioner also signed blank prescriptions for Schedule II controlled substances and left those blank prescriptions for his co-conspirators to complete as to the amount and type of controlled substances, and as to the patient’s name.  Id. at 7.  Petitioner’s co-conspirators collected approximately $1.1 million in cash payments from those patients who received controlled substances.  Id. at 8.

On October 2, 2018, Petitioner pleaded guilty to the charge of conspiracy to distribute and dispense controlled substances in violation of 21 U.S.C. § 846.  P. RFH; IG Ex. 3 at 6-9; IG Ex. 4.  Then, on November 17, 2022, the court accepted Petitioner’s guilty plea and dismissed the remaining counts.  IG Ex. 5 at 1.  Petitioner was sentenced to 36 months of incarceration, followed by three years of supervised release.  Id. at 2-3.

Petitioner subsequently surrendered his health care license to the Texas Medical Board, and, on June 18, 2019, the Texas Health and Human Services Commission Office of Inspector General excluded Petitioner from the Texas Medicaid program and other federally funded health care programs.  P. RFH; IG Ex. 6 at 1; IG Ex. 7 at 1.

By letter dated September 29, 2023, the IG excluded Petitioner under section 1128(a)(4) of the Act for 10 years because:  1) the sentence imposed by the court included

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incarceration (42 C.F.R. § 1001.102(b)(5)) and; 2) Petitioner has been the subject of another adverse action by a government agency or board based on the same set of circumstances that serves as the basis for the exclusion because the Texas Health and Human Services Commission also excluded Petitioner from participation in the Texas Medicaid program (42 C.F.R. § 1001.102(b)(9)).  IG Ex. 1; IG Ex. 6.  The exclusion notice did not indicate the IG considered any mitigating factors when determining the 10-year period of exclusion.

Petitioner filed a request for hearing (RFH) on November 14, 2023.  I conducted a prehearing telephone conference on December 19, 2023, the substance of which I memorialized in my Order and Schedule issued December 28, 2023.  The IG submitted her prehearing exchange composed of a prehearing brief (IG Br.) and eight exhibits (IG Exs. 1-8), and a Reply (IG Reply).  Petitioner submitted his prehearing exchange composed of a prehearing brief (P. Br.), one exhibit (P. Ex. 1), and Petitioner’s Declaration (P. Dec.).

In his declaration, Petitioner explains that, as part of his guilty plea, he cooperated with federal officials at the United States Attorney’s office for the Southern District of Texas by testifying against his co-conspirator, C. W. Thompson.  P. Dec.  Petitioner’s testimony and his various debriefings with the government enabled the U.S. Attorney’s office to secure a conviction against Thompson.  P. Ex. 1 at 3.  Because Petitioner had provided what the U.S. attorney described as “substantial assistance” that was “integral to the conviction of defendant Thompson,” the United States requested a 35% downward departure in Petitioner’s sentence.  P. Ex. 1 at 2; IG Ex. 5 at 2.

The IG maintained in her Reply that Petitioner’s exclusion must remain in place but agreed that Petitioner had proved the existence of a mitigating factor in his prehearing exchange.  IG Reply at 2.  The IG issued an amended exclusion notice on April 24, 2024 in response to this new evidence, reducing Petitioner’s exclusion from 10 years to eight years.  IG. Ex. 8.  The IG argues that this reduction sufficiently takes Petitioner’s cooperation into consideration and that a further reduction of the exclusion period “would negate the consideration of the two aggravating factors that have been established in this case.”  IG Reply at 3.

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).

III. Issues

The Secretary of Health and Human Services (Secretary) has, by regulation, limited my scope of review to two issues:  (1) whether the IG has a basis for excluding Petitioner

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from participating in Medicare, Medicaid, and all other federal health care programs; and, if so, (2) whether the length of the exclusion imposed by the IG is unreasonable.  42 C.F.R. § 1001.2007(a)(1).

Here, Petitioner does not contest the IG’s decision to exclude him from participation in federal health care programs under section 1128(a)(4) of the Act.  See generally RFH; P. Br.; Order and Schedule at 1.  Petitioner argues instead that a five-year exclusion period is appropriate in light of both the aggravating and mitigating factors in his case.  P. Br. at 3-4.

IV. Exhibits and Decision on the Record

Neither party objected to the other’s proposed exhibits.  I therefore admit IG Exs. 1-8 and P. Ex. 1 and P. Dec. into evidence.

“Although Petitioner has submitted his own written declaration, the testimony in his declaration is undisputed and Petitioner has not proposed any other witnesses.  See Standing Prehearing Order at § 6.  An in-person hearing would serve no purpose, and I therefore proceed to a decision based on the record before me.  See Civ. Remedies Div. P. § 19(d).”

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, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

42 U.S.C. § 1320a-7(a)(4); Act § 1128(a)(4).  The Secretary has promulgated regulations implementing this provision of the Act.  42 C.F.R. § 1001.101(d).  The Secretary has interpreted this statutory provision as applicable “to any individual or entity that is or has ever been a health care practitioner, provider, or supplier.”  42 C.F.R. § 1001.101(d)(1).

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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 less 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(c); Standing Prehearing Order ⁋ 5.

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.

A. The IG established a basis for Petitioner’s exclusion pursuant to section 1128(a)(4) of the Act (42 U.S.C. § 1320a-7(a)(4)).

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

Petitioner does not dispute that the IG has a basis to exclude him from participation in federal health care programs under section 1128(a)(4) of the Act, but requests that the length of the exclusion period be reduced to the five-year minimum.  See generally Order and Schedule at 1; P. RFH; P. Br.  Petitioner admits that he pleaded guilty to and was convicted of conspiring to dispense and distribute controlled substances in violation of 21 U.S.C. 846.  IG Ex. 4; P. RFH; P. Dec.

On November 17, 2022, the United States District Court for the Southern District of Texas entered judgment against Petitioner and sentenced Petitioner to 36 months of incarceration followed by three years of supervised release.  IG Ex. 5 at 2-3.  An individual has been “convicted” within the meaning of the Act when a guilty plea has been accepted by a federal court or a judgement of conviction has been entered against the individual by a federal court, regardless of whether there is an appeal pending.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)).

A criminal offense is a felony if the maximum term of imprisonment authorized is greater than one-year.  See 18 U.S.C. § 3559(a).  Petitioner was convicted of one count of violating 21 U.S.C. § 846, which is punishable by up to 20 years imprisonment and a fine

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of up to $1 million.²  IG Ex. 4 at 1.  Thus, Petitioner was convicted of a felony criminal offense.

I therefore find that Petitioner was convicted of a felony occurring after August 21, 1996.

2. Petitioner was convicted of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Section 1128(a)(4) of the Act requires that the felony offense forming the basis for the exclusion relate to “the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  42 U.S.C. § 1320a-7(a)(4).  Petitioner admits that he pleaded guilty on October 2, 2018 to the charge of conspiracy to dispense and distribute controlled substances.  IG Ex. 4; P. Dec.

Both the statute on its face (21 U.S.C. § 846) as well as the underlying facts outlined above fit squarely within the scope of section 1128(a)(4) of the Act.  I find that Petitioner’s felony conviction clearly relates to the unlawful distribution, prescription, and dispensing of a controlled substance.

B. 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)(4), he must be excluded for a minimum of five years.  42 U.S.C. § 1320a-7(c)(3)(B).

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

In relevant part, the following factors at 42 C.F.R. § 1001.102(b) may be considered aggravating and a basis for lengthening the period of a mandatory exclusion:

(5)  The sentence imposed by the court included incarceration;

* * * *

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(9)  The individual or entity has been the subject of any other adverse action by any Federal, State, or local government agency or board if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.

42 C.F.R. § 1001.102(b)(5) and (9).

The IG bears the burden of establishing aggravating factors.  42 C.F.R. § 1005.15(c); Standing Prehearing Order ⁋ 5.  The IG has met her 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 Petitioner’s sentence included a period of incarceration.

Under 42 C.F.R. § 1001.102(b)(5), the IG may extend the length of an exclusion if “[t]he sentence imposed by the court included incarceration.”

It is undisputed that, after pleading guilty to conspiring to dispense and distribute controlled substances in violation of 21 U.S.C. § 846, Petitioner was sentenced to 36 months of imprisonment plus three years of supervised release.  IG. Ex. 5 at 2-3.  Because Petitioner’s sentence included a period of incarceration, the IG has established the aggravating factor set forth at 42 C.F.R. § 1001.102(b)(5).

2. The IG established that Petitioner has been the subject of another adverse action by a state government agency based on the same set of circumstances that serves as the basis for the imposition of the exclusion.

Under 42 C.F.R. § 1001.102(b)(9), the IG may extend the length of an exclusion if “the individual or entity has been the subject of any other adverse action by any Federal, State, or local government agency or board if the adverse action is based on the same set of circumstances that serves as the basis for the imposition of the exclusion.”

Petitioner concedes that he voluntarily surrendered his practitioner’s license following his guilty plea.  P. RFH.  Petitioner’s decision to surrender his license is directly related to the facts and circumstances forming the basis of the IG’s exclusion.  By letter dated June 18, 2019, the Texas Health and Human Services Commission’s (THHSC) Office of Inspector General informed Petitioner that he was being excluded from the Texas Medicaid program and other federally funded health care programs.  IG Ex. 6 at 1.  The THHSC-IG was “required to exclude [Petitioner] because the Texas Medical Board [had] informed [the office] that [Petitioner’s] health care license . . . was revoked, suspended,

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voluntarily surrendered, or otherwise terminated,” preventing him from legally performing professional medical services.  Id.; IG. Ex. 7 at 1.

The THHSC-IG’s decision to exclude Petitioner from the Texas Medicaid program and all other federally funded health care programs falls within the definition of an adverse action by a state government agency based on the same set of circumstances that serves as the basis for the IG’s exclusion.  Roji Esha, DAB No. 3067 at 15-16 (2022).  Accordingly, the IG established the aggravating factor set forth at 42 C.F.R. § 1001.102(b)(9).

3. Petitioner has established one mitigating factor.

If any of the aggravating factors at 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).

Petitioner has the burden of proving any mitigating factors and affirmative defenses.  42 C.F.R. § 1005.15(c); Standing Prehearing Order ¶ 5.  The only 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,

(ii) Additional cases being investigated or reports being issued by the appropriate law

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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.

As part of his exchange, Petitioner provided the United States’ Motion for a 5K1.1 Downward Departure in his underlying criminal case, which clearly states that Petitioner provided “substantial” assistance to federal officials resulting in his co-conspirator Thompson’s conviction.  P. Ex. 1 at 1-2.  The motion lists the ways that Petitioner assisted, including five debriefing sessions with the Government, providing information regarding Thompson that was helpful to the Government’s investigation, testifying at Thompson’s trial, and providing information regarding K.D. and S.F. in Priority Wellness Clinic’s case.  Id.

Petitioner’s assistance was so valued, the U.S. Attorney’s Office sought to reduce Petitioner’s sentence by 35%.  P. Ex. 1 at 2.  By putting forth evidence that his assistance to the Government resulted in Thompson’s conviction, Petitioner has successfully met his burden to prove a mitigating factor under 42 C.F.R. § 1001.102(c)(3)(i).

D. Given the specific facts pertaining to the applicable mitigating factor, an eight-year exclusion period is unreasonable, and I reduce the length of exclusion to seven years.

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, she may choose to exercise her 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 preamble to 42 C.F.R. Part 1001 indicates that the IG has “broad discretion” in setting the length of an exclusion in a particular case, based on the IG’s “vast experience” in implementing exclusions.  57 Fed. Reg. at 3321.  The preamble further states:

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We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case. For example, in one case many aggravating factors may exist, but the subject’s cooperation . . . may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.

Id. at 3314 (emphasis added).  Thus, “the 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).

Here, the IG has established two aggravating factors, and Petitioner has established one mitigating factor.  Petitioner argues that he should be excluded for five years, rather than the eight years that the IG imposed after considering the mitigating factor Petitioner presented.

Aside from a cursory recitation that there are two aggravating factors and one mitigating factor, the IG provides no justification for her determination that an 8-year exclusionary period is appropriate.  The IG offers scant support for the argument that “[f]urther decreasing the exclusion period would negate the consideration of the two aggravating factors that have been established in this case.”  IG Reply at 3 (citing Salman Ali, DPT and Roohi Ali, DPT, DAB No. 3048 at 10 (2021)).  The only case law the IG cites is for the proposition that, even when a petitioner demonstrates significant cooperation, the Board has not reduced an exclusionary period down to the mandatory minimum of five years.  IG Reply at 3 (citing Salman Ali, DPT and Roohi Ali, DPT, DAB No. 3048 at 10).  But that is not to say the Board is unauthorized to do so or that it is unauthorized to reduce the exclusion period at all.

The Board has granted proportional, and often significant, reductions in a petitioner’s exclusionary period where that petitioner successfully demonstrates having substantially cooperated with federal or state officials resulting in others being convicted or excluded—and even when the IG has already considered the mitigating factor.  In Craig Richard Wilder, the petitioner had been excluded for a period of 35 years based on his guilty plea in connection with his role in a conspiracy to defraud the California Medicaid Program.  DAB No. 2416 at 1.  Petitioner agreed to cooperate with law enforcement officials as part of his plea agreement and his sentencing was delayed for one year while the court evaluated the value of his cooperation.  Id. at 3.  The California court ultimately reduced Petitioner’s felony chargers to misdemeanor offenses and reduced his probation period from five years to three.  Id. at 3, 13. Upon review of the IG’s exclusion, the Board went as far as halving Petitioner’s exclusion from 35 to 18 years based on the

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“extraordinary” nature of the assistance Petitioner provided to state law enforcement officials.  Id. at 11.

As in Wilder, Petitioner here provided “significant and productive” cooperation that led to the conviction of one of his co-conspirators.  The Government representatives had first-hand knowledge of Petitioner’s cooperation as well as the crime from which Petitioner’s exclusion derives yet found it appropriate to request a 35% downward departure from the sentencing guidelines.  The U.S. Attorney’s description of Petitioner’s assistance in the Motion for Downward Departure captures the valuable and indispensable nature of that assistance.

While the underlying criminal action and the present exclusionary proceeding are distinct and serve different purposes (i.e., imposing a punishment for a crime versus protecting the Medicare program and its beneficiaries and acting as a deterrent), the significant downward departure in Petitioner’s sentence is a proxy for the extent to which Petitioner cooperated with the Government and enabled it to secure a conviction against Petitioner’s co-conspirator.  At minimum, Petitioner’s exclusion period can and ought to be reduced by the same proportion that his criminal sentence was reduced to reflect the importance of the assistance that he provided.  Reducing Petitioner’s original 10-year exclusion by 35% would result in an exclusionary period of 6.5 years.

Given the significant cooperation in this case when weighed in conjunction with the weight of the two applicable aggravating factors, I find that an 8-year exclusionary period is unreasonable.  I reduce the exclusionary period to 7 years, which is the outside of the reasonable range given the particular facts and circumstances underlying the two aggravating and one mitigating factor applicable in this case.³

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VII. Conclusion

I affirm the IG’s determination to exclude Petitioner from participating in Medicare, Medicaid, and all other federal healthcare programs pursuant to 42 U.S.C. § 1320a-7(a)(4).  The 8-year exclusion imposed by the IG is not within a reasonable range and is reduced to a period of 7 years.

Endnotes

¹ 21 U.S.C. § 846 provides:  Any person who attempts or conspires to commit any offense defined in this subchapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.

² 21 U.S.C. § 846 prohibits the attempt or conspiracy to commit acts prohibited by 21 U.S.C. § 841 and carries the “same penalties as those prescribed for the offense.”  Petitioner conspired to unlawfully manufacture, distribute, prescribe, and dispense Schedule II controlled substances and therefore was sentenced under 21 U.S.C. § 841(a)(1)(C), which carries a maximum penalty of 20 years and a maximum fine of $1 million if the defendant is an individual.

³ Petitioner’s RFH included a request to amend the effective date of his exclusion to the date of his guilty plea, October 2, 2018.  I have no jurisdiction to consider the effective date of his exclusion, and I am bound by the regulation that sets the effective date as 20 days following the date on the exclusion notice.  42 C.F.R. § 1001.2002(b); see also 42 C.F.R. § 1005.4(c)(1).