Barry D. Garfinkel, M.D., DAB No. 1572 (1996)

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Appellate Division

In the Case of:

Barry D. Garfinkel, M.D.

Petitioner,
- v. -
The Inspector General.

DATE: April 23, 1996
Docket No. C-95-042
Decision No. 1572


FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION


The Inspector General (I.G.) appealed the November 9,
1995 decision of the Administrative Law Judge (ALJ) in
Barry D. Garfinkel, M.D., DAB CR400 (1995) (ALJ
Decision). The ALJ upheld the I.G.'s authority to
exclude Petitioner from Medicare and State health care
programs pursuant to section 1128(b)(1) of the Social
Security Act (Act), finding that Petitioner had been
convicted in connection with the delivery of a health
care item or service. The ALJ, however, did not adopt
the three-year exclusion proposed by the I.G.; instead,
the ALJ reduced the length of the exclusion so it would
end "upon the date of issuance" of the ALJ Decision
(approximately one year after it took effect). The ALJ
found that Petitioner had proved that a mitigating factor
existed, specifically, that alternative sources of the
health care services furnished by Petitioner are not
available. The ALJ further found that the mitigating
factor outweighed the three aggravating factors which the
I.G. had proved.

On appeal, the I.G. objected to the ALJ reducing the
length of the exclusion to less than three years, which
is the benchmark period set out in applicable
regulations. The I.G. argued that the ALJ erred in
finding that Petitioner proved that the mitigating factor
existed and in weighing the aggravating and mitigating
factors. Finally, the I.G. took exception to the ALJ's
determination that Petitioner's conviction was not with
respect to acts or omissions in a program operated or
financed in whole or in part "by a federal agency,"
within the meaning of section 1128(b)(1). 1/

Petitioner did not appeal the ALJ Decision. In his
brief, however, he objected to the acceptance of the
I.G.'s appeal by the Departmental Appeals Board (Board,
DAB). Petitioner argued that the appeal was untimely
under the regulations and that the Board did not have
authority to extend the filing deadline.

In this decision, we first address the preliminary issue
raised by Petitioner and conclude that the I.G.'s appeal
was properly accepted. We next set out the standard
under which we review the ALJ Decision. We then discuss
each of the I.G.'s exceptions to the ALJ Decision. We
conclude that the ALJ's finding that a mitigating factor
was present was not supported by substantial evidence on
the whole record. We also conclude that, even if the
mitigating factor were present, the ALJ's determination
that the circumstances relating to the three aggravating
factors did not justify a three-year period of exclusion
was not supported by substantial evidence on the whole
record. Hence, the ALJ did not have an adequate basis in
the record to conclude that the three-year period of
exclusion imposed by the I.G. was not within a reasonable
range under the circumstances. We therefore reverse the
ALJ Decision as to the reasonableness of the length of
the exclusion and reinstate the exclusion period that the
I.G. originally imposed. Finally, while the I.G. raised
serious questions about whether Petitioner's conviction
was of an offense with respect to acts or omissions in a
program operated "by a federal agency," we decline to
decide that issue, because it is not necessary to the
case.

1. The Board reasonably interpreted its regulations to
toll the period for appeal during government furloughs.

The applicable regulations on appeals of ALJ decisions
provide as follows:

Any party may appeal the initial decision of the ALJ
to the DAB by filing a notice of appeal with the DAB
within 30 days of the date of service of the initial
decision. The DAB may extend the initial 30 day
period for a period of time not to exceed 30 days if
a party files with the DAB a request for an
extension within the initial 30 day period and shows
good cause.

42 C.F.R.  1005.21(a). The ALJ Decision in this case
was issued on November 9, 1995 and received by the I.G.
on November 13, 1995. I.G. Motion for Extension
(December 12, 1995). On December 12, 1995, counsel for
the I.G. filed a timely request for a 30-day extension of
the appeal period, due in part to an intervening six-day
furlough of government workers as well as a period of
annual leave by counsel.

In his brief, Petitioner contended that the extension was
unauthorized because the Board did not issue its written
approval of the extension until January 11, 1996. The
I.G.'s request was received by the Board on December 13,
1995. Because of a second three-week furlough of federal
employees during which Board employees were prohibited
from working, it was impossible to issue approval of the
extension request immediately. Petitioner argued that
the Board then lacked "jurisdictional authority" to grant
the request "because it had not acted within the time for
appeal." P. Br. at 6.

The regulations contain no time limit on Board action;
rather, they impose a time limit on parties to file
requests for extensions. It is uncontested that the
I.G.'s initial request was filed within the required time
frame. (Regulations provide that filing is accomplished
upon the mailing date, rather than on the date of receipt
by the Board. 42 C.F.R.  1005.11(a)(4).) Counsel for
Petitioner advised the Board by telephone on January 11,
1996 that he did not oppose the initial extension.
Consequently, Petitioner's attempt in his brief to attack
the 30-day extension granted to the I.G. is without
merit.

The three-week furlough ended on Friday, January 5, 1996.
On January 9, 1996, the I.G. requested an additional
three weeks in which to file an appeal because of the
intervening furlough. 2/ Petitioner indicated by
telephone that he did not object to the original
extension request but did object to the additional three
weeks. On January 11, 1996, the Board issued a letter
granting both requests.

Petitioner argued that the additional three weeks
resulted in an appeal filed 22 days later than allowed by
the Board's regulations and cited case law establishing
that agencies are bound by their own regulations. We
need not discuss the case law, since the principle that
agencies are bound by their regulations is well-
established and not in dispute here. This argument
misconstrues the action taken by the Board to deal with
the unique and unforeseen circumstances presented by the
government shutdowns. The Board did not ignore the
regulations, but interpreted them in light of their
purpose of providing a 30-day period, subject to a 30-day
extension, during which a party is to prepare its notice
of appeal. The Board recognized that federal parties
whose counsel were prohibited from working did not
"receive the benefit" of the intended filing periods.
See Board letter, dated January 11, 1996. Further, in
order not to disadvantage parties who needed to contact
the Board in order to prepare their submissions and in
the interest of treating all parties before it fairly,
the Board considered that the various filing periods for
parties before it were tolled during the shutdown. The
Board provided the additional time upon request to both
federal and non-federal parties.

It is well within the authority of the Board to interpret
the regulations governing proceedings before it.
Petitioner's challenge to the Board's authority to hear
this appeal on the grounds of untimely filing is
therefore rejected.

2. The Board reviews ALJ decisions to determine if they
are supported by substantial evidence on the record as a
whole as to the facts and if they are erroneous as to the
law.

We have a limited role in reviewing ALJ decisions in
exclusion cases. The applicable standard of review on
disputed issues of law is whether the ALJ Decision is
erroneous. The applicable standard of review on disputed
issues of fact is whether the ALJ Decision is supported
by substantial evidence on the record as a whole.
42 C.F.R.  1005.21(h); see also Wesley Hal Livingston
and Shoals Medical Equipment and Supply Co., Inc., DAB
1406, at 7 (1993); Lakshmi N. Murty Achalla, DAB 1231,
at 7 (1991); Joyce Faye Hughey, DAB 1221, at 11 (1990).

The substantial evidence standard means "such evidence as
a reasonable mind might accept as adequate to support a
conclusion." Universal Camera Corp. v. NLRB, 340 U.S.
474, 477 (1950), quoting Consolidated Edison Co. v. NLRB,
305 U.S. 197, 229 (1938). Substantial evidence on the
whole record means that a decision may not be upheld
based solely on the evidence "which in and of itself
justified it, without taking into account contradictory
evidence or evidence from which conflicting inferences
could be drawn." Universal Camera, 340 U.S. at 487.
Thus, the "substantiality of evidence must take into
account whatever in the record fairly detracts from its
weight." Universal Camera, 340 U.S. at 488. The
reviewer does not retry the case de novo, but rather
reviews the whole record before the initial decision-
maker. See, e.g., Calhoun v. Bailar, 626 F.2d 145, 147
(9th Cir. 1980). Hence, the reviewer may not displace
the initial conclusions merely because a different choice
could justifiably be made, but may set aside the initial
conclusions when "it cannot conscientiously find that the
evidence supporting that decision is substantial, when
viewed in the light that the record in its entirety
furnishes, including the body of evidence opposed to the
[initial decision-maker's] . . . view." Universal
Camera, 340 U.S. at 488.

We generally accord considerable deference to an ALJ's
judgment when it depends on weighing the evidence
presented and assessing the credibility of witnesses,
since the ALJ has the best opportunity to observe the
witnesses. See, e.g., The Hanlester Network, et al., DAB
1275, at 51 (1991). However, the ALJ's judgment must be
supported by reliable, credible evidence in the record
and inferences reasonably drawn from that evidence. The
substantial evidence standard does not require us to
treat every inference an ALJ draws from the evidence as
per se reasonable, nor does it require us to affirm any
finding as to which there is merely some evidence in the
record which might be supportive. Thus, the Board has
held, in reviewing an ALJ decision, that an ALJ need not
"cite to everything in the record which supports" the
findings, but that the "evidence that the ALJ does cite
must support the findings made." Livingston,
Reconsideration of DAB 1406, at 3 (emphasis in original).
"Moreover, if there is evidence in the record which
directly contradicts the evidence cited by the ALJ (or
which might render inferences otherwise drawn from that
evidence unreasonable), the ALJ should not disregard that
evidence without explaining why." Id. at 3-4 (citations
omitted).

The regulation at 42 C.F.R.  1001.201 specifies that
exclusions imposed pursuant to section 1128(b)(1) of the
Act will be for three years, unless certain listed
aggravating or mitigating factors form a basis for
lengthening or shortening that period. The I.G. adopted
the three-year period to be consistent with the period
set for government-wide debarment proceedings. 57 Fed.
Reg. 3298, at 3304 (January 29, 1992).

The preamble indicates that the regulation contemplates
broad discretion for the I.G. in setting the length of an
exclusion in a particular case, in light of the I.G.'s
"vast experience in implementing exclusions under these
authorities." 57 Fed. Reg. at 3321. Consequently, "[s]o
long as the amount of time chosen by the [I.G.] is within
a reasonable range, based on demonstrated criteria," the
ALJ, and hence the Board in reviewing the ALJ's action,
is without authority to alter it. Id. We therefore
consider here not whether the ALJ could find an exclusion
ending on the date of her decision to be a reasonable
length but whether she could properly conclude on the
record before her that the three-year exclusion period
imposed by the I.G. fell outside of a reasonable range of
exclusion periods under the circumstances.

3. In reducing the length of the exclusion, the ALJ did
not apply the proper legal criteria, and her findings are
not supported by substantial evidence on the record as a
whole.

A. Factual background

This brief summary of the facts is based on the parts of
the findings of fact and conclusions of law (FFCLs) and
of the ALJ's discussion of those FFCLs to which neither
party excepted, and provides a background to our
analysis. 3/ Petitioner is a psychiatrist in Minnesota,
with a special interest in adolescent suicide, attention
deficit disorder (ADD), and attention deficit and
hyperactivity disorder (ADHD). While he was employed at
the University of Minnesota, he served as chief
investigator between 1986 and 1989 of a drug study funded
by a pharmaceutical company. The drug studied was
Anafranil, intended for therapy for obsessive-compulsive
disorder. The study was commissioned by the company to
comply with federal Food and Drug Administration (FDA)
regulations in order to obtain FDA approval. The drug
approval procedures require that prior to beginning a
clinical study, the company must provide a detailed
protocol and other information to the FDA and must file
with the FDA data compiled by its investigators. 4/ As
part of the drug study, the investigator was required to
undertake regular patient visits, to conduct physical and
psychiatric evaluations, and to prepare patient report
forms (PRFs) for each visit.

The coordinator of the drug study (who was not a
physician) at Petitioner's site complained that
Petitioner "ordered her to conduct entire study visits,
including the accumulation of psychiatric and medical
data; ordered her to enter false data on PRFs for visits
that never occurred or for patients that did not fit the
protocol requirements; and prescribed prohibited
medications for patients during the study and ordered her
to conceal their use." ALJ Decision at 7; see United
States v. Garfinkel, 29 F.3d at 1253, 1255 (8th Cir.
1994). The criminal charges against Petitioner grew out
of this complaint. He was indicted on 19 counts of
violating the federal False Statements Act, 18 U.S.C.
 1001, prohibiting the intentional making of a false
statement in a matter within the jurisdiction of the
government. He was convicted on three of those counts,
based on falsely representing on PRFs that he personally
conducted three patient visits. In addition, he was
indicted on four counts of mail fraud under 18 U.S.C.
 1341, and convicted on two of these.

Petitioner was sentenced to six months' imprisonment and
three years of supervised release, fined $25,000, and
ordered to pay restitution of $170,394 and other costs
and assessments. The Minnesota Board of Medical Practice
(State Board) agreed to stay suspension of his medical
license on the conditions, among other things, that he
serve 1000 hours of free clinical service at a site
selected by the State Board and that he observe a life-
time bar from acting as a drug study investigator. The
site for his community service would be selected by the
Board and his performance would be reviewed quarterly by
a work quality assessor. I.G. Ex. 4. In order to
facilitate completion of the community service by
Petitioner, the State of Minnesota sought and the I.G.
granted a limited waiver of Petitioner's exclusion for an
eight-county area selected by the State.

B. Parties' arguments

The I.G. took exception to the following four FFCLs in
the ALJ Decision:

5. Petitioner proved the presence of a mitigating
factor, in that, due to his exclusion, no
alternative sources of the type of health care items
or services Petitioner furnishes are available.

7. Petitioner proved that program patients are
likely to suffer substantial and irreparable harm by
being deprived of needed health care as a result of
prolonging Petitioner's exclusion.

12. Weighing the three aggravating factors
established by the I.G. and the one mitigating
factor established by Petitioner, I conclude that
the three-year exclusion imposed against Petitioner
is excessive.

13. The remedial considerations of the Act are
served by modifying the exclusion to end upon the
date of issuance of this Decision.

ALJ Decision at 4-5 (citations omitted). The I.G. argued
that, as a matter of law, the ALJ was bound to find that
alternative sources of care were available once the I.G.
showed that more than 50 board-certified specialists in
the same field as Petitioner resided in the same area.
Alternatively, the I.G. argued that the ALJ misapplied
the standards for analyzing whether alternative sources
were available and that the ALJ's conclusion that they
were not available was not supported by substantial
evidence in the record as a whole. Further, the I.G.
argued that the ALJ improperly weighted this mitigating
factor as opposed to the three aggravating factors proved
by the I.G. in light of the purposes of the exclusion
provisions. 5/

Petitioner argued that substantial evidence in the record
supported the ALJ's determination that the three-year
exclusion imposed by the I.G. is "excessive" and that
"alternative sources of psychiatric care of the type and
quality provided by Dr. Garfinkel are not reasonably
available to [program patients] . . . through other
physicians in Minnesota." P. Br. at 7, 14. 6/
Therefore, Petitioner contended that the Board is bound
to affirm the ALJ Decision.

C. Analysis

i. The legal issue before the ALJ was whether the
three-year exclusion period was outside the range of
reasonable periods.

As discussed above, the ALJ is required to review the
length of a proposed exclusion to ascertain if "the
amount of time chosen by the [I.G.] is within a
reasonable range." 57 Fed. Reg. 3298, at 3321. The ALJ
Decision does not properly apply this standard to the
proposed exclusion in this case (even assuming the
circumstances as found in the decision). Instead, the
ALJ Decision concludes that "the interest of the programs
and their beneficiaries and recipients can be better
served by not prolonging Petitioner's exclusion beyond
the date of issuance of this Decision." ALJ Decision
at 29. 7/ This conclusion misapprehends the question
before the ALJ, since her role was not to determine what
period of exclusion would be "better" but whether the
period imposed by the I.G. was within a reasonable range.

The ALJ found, and Petitioner did not dispute before us,
that the Petitioner's criminal convictions formed a
proper basis for a permissive exclusion. Since the
length of the exclusion imposed by the I.G. did not
exceed the benchmark period of three years set in the
regulations, the ALJ could properly reduce the length of
the exclusion only by finding one or more mitigating
factors to be present and by finding that they
substantially outweigh any aggravating factors so that
three years falls outside of a reasonable range. 8/
Since the ALJ Decision did not assess whether the period
of the exclusion was within a reasonable range, our
analysis necessarily includes reassessment of the
evidence with this goal.

We turn next to the definition of "alternative sources of
services" to determine whether a mitigating factor
existed. We then discuss whether substantial evidence on
the whole record supports a finding that the mitigating
factor is present. Finally, we consider the evidence
relevant to the aggravating factors found by the ALJ and
whether the ALJ properly evaluated the evidence in the
record in determining the relative weight to be accorded
these factors.

ii. The legal criteria governing the mitigating
factor were set out in the ALJ Decision but were not
applied.

In addressing how to determine what alternative sources
of care should be considered to be available as
contemplated by the regulations, the ALJ generally
referenced the correct legal criteria. 9/ However, as
discussed below, she did not apply those criteria to the
facts before her.

The regulation provides that it may be a mitigating
factor and a basis to reduce the period of exclusion
where:

Alternative sources of the type of health care items
or services furnished by the individual or entity
are not available.

42 C.F.R.  1001.201(b)(3)(iv). The ALJ properly stated
that Petitioner had the burden of proving any mitigating
factor by a preponderance of the evidence, since the
mitigating factor is in the nature of an affirmative
defense. ALJ Decision at 15.

Unlike other mitigating factors, the particular one at
issue here does not indicate a lesser seriousness of the
offense on which the exclusion is based (such as a lower
degree of culpability), but recognizes that excluding a
provider may carry risks that must be balanced against
the purpose of the exclusion. The Board has not
previously addressed the interpretation of this factor,
but a number of ALJ decisions have set out legal criteria
which reasonably interpret the mitigating factor, based
in part on the preamble to the regulations establishing
it. See Scott Meggison, DAB CR329 (1994); Dr. John T.
Renick, DAB CR312 (1994); John H. Holmes, M.D., DAB CR270
(1993); 57 Fed. Reg. 3298 (January 29, 1992). Their
interpretation is consistent with the legislative history
of the exclusion provisions. See S. Rep. 109, 100th
Cong., 1st Sess. 12 (1987).

The focus in applying the mitigating factor must be on
the adverse effect of the exclusion on previously
available services. 10/ It is not sufficient that an
exclusion might merely reduce the number of available
health care providers, since some reduction is likely to
result from any exclusion. 11/ However, only those
alternative sources to which program patients have
reasonable access are relevant; providers who accept no
program patients cannot, as a practical matter, be
considered available to them. 57 Fed. Reg. at 3315. The
ALJ correctly stated these criteria. ALJ Decision at 16.

The ALJ also correctly reasoned that the mitigating
factor would apply when, as a result of a provider's
exclusion, either there is no other health care provider
in the geographical area reasonably accessible to program
patients or a significant number of program patients will
be deprived of reasonable access to "comparable
alternative" services. ALJ Decision at 16.

However, the ALJ's analysis applying these legal criteria
to the evidence relating to the mitigating factor did not
focus on the specific impact of the Petitioner's
exclusion, as opposed to the general situation in the
State. In addition, the ALJ did not directly address how
a significant number of program patients would be
deprived of reasonable access to services, as a result of
the exclusion. Her analysis focussed rather on the
potential consequences of delays in receiving services,
without evidence that shortening Petitioner's exclusion
would prevent such delays.

Furthermore, the ALJ disregarded a number of comparable
sources of services. Instead, the ALJ determined that
Petitioner was uniquely competent, flexible or sensitive,
compared to other providers of the same type of services.
The ALJ's emphasis on the "uniqueness" of Petitioner's
practices stretches the concept of comparable services
beyond anything contemplated by the regulations, or by
the prior ALJ decisions discussing the nature of relevant
alternative sources of care. The regulatory language
refers to alternative sources of "the type" of services
furnished by the excluded provider. Certainly, it would
not be reasonable to consider as a relevant alternative a
source which provided services of an entirely different
nature or kind, even if the source might treat similar
problems. For example, physician's assistants or nurse-
midwives might provide care for some problems also
treated by physicians but might not, in some
circumstances, be considered alternative sources of the
same "type" of services. Similarly, it might be
appropriate to disregard, for example, as an alternative
source of the type of services provided by a specialist
in child and adolescent psychiatry a general psychologist
who might also see troubled or even suicidal youth, upon
a showing that such services would not be comparable.
However, nothing in the regulations (or even in the prior
ALJ decisions) contemplated the kind of inquiry into the
relative merits of qualified providers of the same type
of services which the ALJ undertook in this case. We do
not think the regulations contemplated that an ALJ would
attempt to conduct a subjective comparison of the
services of board-certified child and adolescent
psychiatrists as to their personal sensitivity or
rapport, their scheduling practices, or their individual
idiosyncracies. To undertake an inquiry into the
professional practices and abilities of all available
alternative providers of the same type of services in
every case in which the absence of alternative sources is
alleged as a mitigating factor would unnecessarily
prolong hearings and risk inconsistency, absent any
criterion for the comparison. The issue of comparability
of services should be a question directed to the
objective qualifications and type of services offered by
alternative sources and the practical access to those
services by program patients. 12/

As noted in James H. Holmes, M.D., DAB CR270, at 26
(1993), every provider is likely to be unique in some
respects and may well be especially attractive to
specific patients or even some categories of patients.
13/ To rely on such "uniqueness" to reduce a proper
exclusion would be contrary to Congressional intent. The
exclusion provisions represent a determination by
Congress that providers who have been convicted of the
kind of offenses specified represent a risk to the
programs and/or the patients. As the ALJ noted, the
purpose of these provisions is remedial, not to punish
the provider but to protect the program and the patients
from those providers "who have been shown to be
untrustworthy." ALJ Decision at 8, and cases cited
therein. The purpose of the mitigating factor reducing
the length of an otherwise well-founded exclusion where
alternative sources of services do not exist is not to
reward an excluded provider for professional competence
or accomplishments. Instead, the purpose is to avoid the
situation where the effect of protecting the program and
patients from the demonstrated risk of dealing with the
provider is to impose an even greater hardship on
patients who will have, practically speaking, nowhere
else to go to get the care they need as a result of the
exclusion itself. 14/ Hence, so long as program patients
do have reasonable access to alternative sources of
comparable services, it is immaterial that some patients,
or some persons who refer patients, prefer the provider's
services or will find other sources less convenient or
desirable. The issue in regard to the mitigating factor
was not whether Petitioner was a competent, widely-
respected, or even outstanding provider but whether
program patients would suffer a deprivation of reasonable
access that must be weighed against the demonstrated need
to protect program patients from medical harm and the
government programs from financial harm.

We next turn to whether substantial evidence on the
record as a whole supported a conclusion that alternative
sources of services, so understood, were not available.

iii. The finding that no alternative sources of the
type of services provided by Petitioner are
available is not supported by substantial evidence
in the record.

In evaluating the evidence in the record, we do not
disturb the ALJ's finding that Petitioner and his
witnesses gave credible testimony on alternative sources.
ALJ Decision at 17. The ALJ was able to observe the
demeanor of the witnesses and to evaluate them in person,
and we defer to her assessments of witness credibility.
We must nonetheless review the findings made based on
that testimony to determine whether they accurately
reflect the testimony itself, whether conflicting
evidence in the record has been addressed by the ALJ, and
whether the inferences drawn by the ALJ are reasonable
based on the actual testimony. Further, testimony which
is merely anecdotal, without a clear foundation, or which
is hearsay without indicia of reliability has little
probative value. Finally, we must evaluate the evidence
in light of the legal criteria governing the mitigating
factor which the ALJ set out but did not apply.

The ALJ treated the relevant geographical area as the
entire State of Minnesota (including the Twin Cities
area). ALJ Decision at 17. The ALJ found that
Petitioner specialized in ADHD and suicidal ideation in
child and adolescent patients. The record demonstrates,
and the ALJ acknowledged, the availability of at least
six to eight physicians who could treat these problems
and who would accept program patients. Thus, the ALJ
Decision at 26 states:

The evidence establishes that Petitioner is not the
only child and adolescent psychiatrist in the State
of Minnesota, or the only child and adolescent
psychiatrist in the State of Minnesota who accepts
patients with suicide ideation, ADD, or ADHD.

In addition, the record demonstrates, and the ALJ found,
that the University of Minnesota continued to accept
Medicaid patients after Petitioner's departure into
private practice and his exclusion and that the
University constituted a tertiary care center seeing the
most complicated cases.

The ALJ discussed extensively the potential for disaster
for seriously troubled youths who must wait for services
in the face of a general shortage of psychiatrists able
to treat them. The record establishes that the general
shortfall in such services nation-wide and state-wide has
unhappy risks and consequences. Moreover, we do not
suggest here that the nature of the potential harm to
program patients would be irrelevant in evaluating the
weight to be given to the mitigating factor, once proven.
As noted above, however, to establish the mitigating
factor, Petitioner's proof had to focus on the impact of
the exclusion itself, not on the pre-existing
availability or shortage of providers in the field.

The evidence shows that alternatives for program patients
seeking psychiatric care for a seriously troubled child
or adolescent in Minnesota are not ideal and involve
waiting lists and other difficulties. However, the ALJ
did not find, and the record does not support a finding,
that the exclusion of Petitioner caused or substantially
exacerbated this situation or that prematurely lifting
the exclusion imposed on Petitioner is likely to have any
significant impact on alleviating it.

Petitioner offered evidence on the shortage of child and
adolescent psychiatrists, but the ALJ disregarded without
explanation evidence showing that this shortage was not
caused or substantially exacerbated by Petitioner's
exclusion. The testimony of the only psychiatrist,
besides Petitioner, to testify at the hearing was that a
federal study a "few years ago" found continuing
shortages in child and adolescent psychiatrists nation-
wide, which indicates that the problem predated
Petitioner's exclusion. Tr. at 39-40. The same witness
testified that program patients are underserved for
financial reasons, i.e., because of low reimbursement
levels. Tr. at 41-42. 15/ This problem is obviously
unrelated to Petitioner's exclusion.

At least 80% of Petitioner's current patients come from
Minnesota. ALJ Decision at 21. It is therefore
reasonable to infer that Petitioner is already accepting
patients who would otherwise form part of the backlog or
waiting lists at other facilities in Minnesota. To the
extent that these patients are removed from the lists of
those seeking services at facilities, like the University
of Minnesota, that accept Medicaid patients as well,
Medicaid patients have better access to those alternative
sources because of Petitioner's practice regardless of
whether he treats program patients himself.

Also, Petitioner is obligated to provide 16-28 hours per
month of community service over 40 months in an eight-
county area in order to fulfill the conditions under
which his license suspension was stayed (and has
testified that he intends to continue to do so after the
mandatory period ends). See I.G. Ex. 4; Tr. at 100. He
presumably will be available to treat a significant
number of Medicaid-eligible patients in that area. These
mandated services, provided in the area where the State
apparently found the most need, reduce the impact of his
exclusion on the state-wide shortage of child and
adolescent psychiatrists. Petitioner remains free to
provide services to additional patients in those counties
and thereby to further reduce the impact of his
exclusion.

Petitioner also failed to demonstrate that reducing the
exclusion period is likely to alleviate the shortage
significantly. In light of the evidence discussed above,
Petitioner would have to show that, but for the
exclusion, he would accept a significant number of
Medicaid patients outside the eight-county area in
substantially less time than they would otherwise wait
for comparable care. However, most significantly, the
ALJ found that Petitioner already has a full schedule in
his private practice and, in fact, has a waiting list
himself. ALJ Decision at 29. The ALJ stated that she
did not consider waiting for "weeks and months" for a
psychiatrist to constitute an available alternative
source. ALJ Decision at 26. However, the fact that
Petitioner also has a waiting list, even after only a
short period in private practice, means that even sources
with waiting lists must be considered in terms of whether
the acceptance by Petitioner of the number of Medicaid
patients he could accommodate in his practice would make
any practical difference to the undoubtedly unfortunate
delays in obtaining such services.

The evidence in the record does not support an inference
that Petitioner would be available to a significant
number of Medicaid patients of the type for which a
shortfall was found (complex child and adolescent cases)
beyond those in the eight-county area where his exclusion
was waived, even were his exclusion in other areas
lifted. First, the ALJ found that a "large part of
Petitioner's practice" is devoted to adult ADD and
learning disabled patients. ALJ Decision at 21, n.9.
The ALJ made no factual finding about any shortage of
alternative sources of services for the adult group and
did not explain why this group of patients would not
reduce Petitioner's availability to treat the kind of
patients for whom a general shortage of services was
found.

Also, although Petitioner testified that he wished to
continue to treat program patients as a matter of public
service, he stated that part of his reason for going into
private practice was "to pay enormous legal bills, and
fines, and restitution." Tr. at 100. The ALJ referred
to testimony by a psychiatrist from the University of
Minnesota that low reimbursement levels were causing the
increasing difficulty which program patients encountered
in finding child and adolescent psychiatric services in
Minnesota. ALJ Decision at 19. These economic factors
may limit, at least to some extent, the total number of
program patients whom Petitioner would be able to serve.

Petitioner testified that, prior to his exclusion, he had
reduced his Medicaid caseload from 20 in September 1994
16/ (which he said was already a reduction in
anticipation of his exclusion) to 12-15 when he went into
private practice in January 1995. Tr. at 78-79. Of
these, five Medicaid patients remained with Petitioner
and he "found other care" for the remainder. Id. In a
prior case, the ALJ pointed out that where a provider
"had served very few program [patients] . . . prior to
his exclusion, his exclusion may have no real impact on
the access of program [patients] . . . to previously
available health care providers in the same area."
Meggison, DAB CR329, at 16. 17/

Evidence on the relatively few program patients served by
Petitioner prior to his exclusion, his success in finding
new providers for them, his own waiting list, and his
obligation to provide community service should have been
considered in evaluating whether Petitioner proved that
reducing his exclusion would have a significant impact on
the availability of services to program patients.

As mentioned above, the ALJ found that the alternative
sources of care which existed were not comparable to the
services offered by Petitioner. The ALJ based this
finding on the idea that Petitioner is "unique" for four
reasons: (1) he specializes in "diagnosing and treating
only the most complex cases" in which others have failed;
(2) "no other psychiatrist" in Minnesota "will modify
their schedules to provide" crisis services as quickly as
he will; (3) "other psychiatrists will not spend the
amount of time with their patients" that he does; and
(4) he has a "cross-cultural understanding" of Native
American children and families. ALJ Decision at 16.

As discussed above, the focus on Petitioner's unique
characteristics misconstrues the legal criteria for
assessing whether alternative sources of the same type of
services are reasonably available to program patients.
However, even if the characteristics that the ALJ
emphasized in treating Petitioner as unique were relevant
to the alternative source issue, we would not affirm her
finding that alternative sources were not comparable to
Petitioner. Substantial evidence does not exist to
support the findings about those characteristics,
especially since the ALJ did not explain why she
disregarded contrary evidence in the record before her in
discounting other sources of services.

For example, the ALJ discounted the University of
Minnesota as an alternative source, even though it
accepted complex cases and served as a tertiary care
center for those who had not been helped elsewhere. Tr.
at 59. The ALJ relied on testimony that the University
already had a waiting list of two months for outpatients
and speculative testimony that it might stop accepting
Medicaid patients at some point in the future. However,
Petitioner also has a waiting list. Also, the
psychiatrist from the University of Minnesota on whose
testimony the ALJ relied did not state that the
University intended to stop accepting program patients,
but rather that there have been "discussions" about
"restricting the number of patients in that category,"
for example to perhaps 20% of the patient population.
Tr. at 42. At the time of the hearing, the University
was treating "a great number of" program patients,
probably one-third to one-half of its patient population.
Tr. at 59. Therefore, it was unreasonable to infer that
the University of Minnesota was unavailable as an
alternative source of services. 18/

As far as the ability of other psychiatrists to take on
patients in Petitioner's specialty area, we note that
Petitioner offered testimony from only one of the 50
board-certified child and adolescent psychiatrists on a
1995 list. I.G. Ex. 10. No statements were offered from
others on the list to substantiate that they would not be
able to provide comparable services. 19/ In a prior case
before an ALJ, testimony by the psychiatrist petitioner
and another local psychiatrist about the availability and
specialization of other psychiatrists was rejected as
unreliable hearsay. Dr. John T. Renick, DAB CR312, at
20-21 (1994).

Although the ALJ here found, and we have accepted, that
the testimony of Petitioner and his witnesses was
credible, it is not reasonable to draw inferences based
on this testimony that go beyond the limits of what these
witnesses specifically testified to about their knowledge
of the practices of other psychiatrists, in light of the
absence of direct evidence. Unlike in Renick, here
neither Petitioner nor his witnesses attempted to address
the specialization and availability of each of the
individual psychiatrists in the area. Instead, they made
general statements about Petitioner's relative strengths
in combining psychotherapy and psychopharmacology or in
diagnosing hard cases in comparison with most others as a
group. 20/ They also pointed to particular individuals
on the list whom they believed to be unavailable to
program patients for one reason or another (such as
retirement or practicing in a restricted group) and
offered general estimates of the numbers of others who
might be similarly unavailable. See, e.g., Tr. at 36-40,
93-94, 112. 21/

Thus, the psychiatrist from the University of Minnesota
knew about 80% of the doctors named to him (from the 1995
list and other sources) and stated that "most of them are
fully credentialed" child and adolescent psychiatrists.
Tr. at 46. He testified as follows about their
practices:

Q Would they know what to do, let's see--would they
know what attention deficit disorder is?

A Yes, they would.

Q Would they know what suicidal ideation is?

A Yes, they would.

Q Would they have some idea of how to treat these?

A They'd have some idea, yes.

Tr. at 46, 50-1; I.G. Ex. 10. He also testified that
this "excluded other child and adolescent psychiatrists
who I know." Tr. at 50. He concluded that a dozen child
and adolescent psychiatrists able to treat ADHD and
suicide ideation was his "sense of people who I think
could do an adequate job and who I would refer to." Tr.
at 55. Of those, he "thought" six to eight would accept
program patients. Id. Of course, this testimony does
not exclude the possibility of additional qualified,
available providers among the 20% on the list whom he did
not know. Nor was there a foundation laid that the
witness had direct knowledge of the reimbursement sources
accepted even by all the psychiatrists whose names he
recognized.

Petitioner said that he knew about half of the listed
doctors and that about a third were his former students
but that their treatment would not be "comparable" to
what he would provide, because he goes "to all efforts"
for suicidal young people, giving out his home number and
stopping "at no measure to help them." Tr. at 93.
Hence, he asserted generally that "the care I'm providing
is not equaled by my colleagues." Tr. at 94. However,
when asked if there was in fact no psychiatrist on the
list who could safely treat these patients, he said "it's
not that they're not trained to, but maybe practicing"
where they cannot accept program patients or have time
restrictions. Id. It cannot reasonably be inferred from
such generalizations about the possible restrictions on
the practices of or lack of equal dedication by all other
psychiatrists on this list that Petitioner's care was
unique. Petitioner did not even know half of them and
gave no details as to which doctors would not make all-
out efforts for their patients or would be bound by time
or reimbursement restrictions.

A pediatrician with a managed care program also testified
that "there are other psychiatrists that work in teen
suicide." Tr. at 114. He testified that he knew
Petitioner had a "special interest and expertise in that
area," but he was unable to recall ever having referred a
patient to him for that purpose. Id. He also testified
that patients unable to see Petitioner (either because
his calendar was full or due to the exclusion) would
typically go to another psychiatrist. 22/ Tr. at 112-13.
In addition, he testified that he did not know of any
former Medicaid patients of Petitioner who were unable to
find treatment. Tr. at 120. The ALJ did not explain why
she disregarded these statements by the pediatrician that
suggested that other psychiatrists were available "in
town," including ones working in Petitioner's specialty
area of adolescent suicide. See Tr. at 113-14. 23/ The
ALJ did note that the pediatrician acknowledged "that
there are other psychiatrists in the area community; but
to him, the critical issue is which psychiatrists provide
what type of care to patients." ALJ Decision at 20. The
ALJ cited to testimony in which the pediatrician was
asked whether any doctor would have knowledge of whether
former patients of Petitioner were unable to find a
psychiatrist. His response was:

A Well, I mean, not -- I mean, if it was my
patient and they said, we have no psychiatrist that
we can see anywhere, but that's a fairly far fetched
--I mean, there are psychiatrists, but it's an issue
of which psychiatrist, and what kind of care they
get.

Q But, in essence, nobody can really know what's
happened to a patient unless that patient ends up on
your doorstep and says, this is where I've been.

A Right.

Tr. at 120-121. In context, the witness's testimony is
essentially that he believed Petitioner's patients would
be able to find alternative psychiatrists but that he had
no way to know the nature of the care they would receive
without personally interviewing the patients. There is
no basis for inferring from this testimony that
Petitioner's Medicaid patients had been unable to find
comparable care from another psychiatrist or that the
quality of the care would be unacceptable.

Taken as a whole, the testimony was that Petitioner was
especially expert and capable in his field, but that
others were also qualified. The inference drawn by the
ALJ--that Petitioner's ability in his specialty areas was
so great as to place him in a unique category for which
no alternative source of services can be found among the
other child and adolescent psychiatrists in Minnesota--
goes beyond what the record will support.

In addition, the ALJ relied heavily on Petitioner's
"unique" scheduling flexibility as one of the factors
establishing that no other provider was reasonably
accessible to program patients, because a patient might
have to wait weeks or months to see another psychiatrist.
ALJ Decision at 26. Yet the ALJ did not explain why
Petitioner's own waiting list since he went into private
practice would not have the same effect. The evidence
relied on by the ALJ demonstrated that Petitioner has
accepted emergency referrals on short notice. See, e.g.,
Tr. at 146. However, it is unreasonable to infer that
Petitioner accepts every patient immediately into his
practice, given the existence of his waiting list and
other testimony. 24/

The ALJ also cited to testimony by the pediatrician as
showing that "Petitioner is more accommodating and
flexible with his hours than other psychiatrists in the
community." ALJ Decision at 20-21. However, the
transcript cited by the ALJ reflects that the
pediatrician's testimony was much more limited:

I know I had one case recently where the family was
literally falling apart, and the wait to get in, I
know, to our mental health department was going to
[be] pretty long. It was going to be a month or
two. And the family just really didn't feel they
could wait that long because the child was being
kicked out of their day care, and the family was
literally emergency taking off work to figure out
what they were going to do, and Dr. Garfinkel was
able to see the patient after hours because I'd
called him and said this is really an emergency, can
you see them? And I think that he tends to be more
flexible and accommodating than most psychiatrists
that I've worked with.

Tr. at 113 (emphasis added). The witness limited his
assertion about Petitioner's flexibility and
accommodation to a tendency compared to most other
psychiatrists with whom the witness personally had
worked. There is no indication that the pediatrician had
worked with all or even most of the psychiatrists who
practice with children and adolescents in the State of
Minnesota. On the contrary, the same witness stated on
cross-examination that he does not commonly refer to any
place other than the mental health department within his
managed care program, and therefore he stated he would
not know about the availability of outside psychiatrists.
Tr. at 117-19. His program does not accept Medicare or
Medicaid patients. ALJ Decision at 19. Therefore, it
was not reasonable to infer from the testimony of this
witness that most psychiatrists in Minnesota treating
program patients would be less flexible or accommodating
than Petitioner.

The ALJ also relied in this regard on the testimony of a
witness who serves as an advocate and referral source for
Native American and other low-income young people in need
of psychiatric services, mostly outside of the Twin
Cities area. Tr. at 124-25, 147. She testified at
length to the extreme difficulties faced by such young
people and their families in finding services in crisis
situations. She clearly felt strongly about Petitioner's
abilities, having used him as a psychiatrist for her son.
Tr. at 123. She indicated that there were other
psychiatrists available, including county psychiatrists
and consulting psychiatrists who visited rural areas, but
that Petitioner was unique because "if I say I have a kid
that has to be seen immediately, he's the only
psychiatrist that I've worked with that I know of that
would do that." Tr. at 126-27. He would "always come
through" for her even in the middle of the night. Tr. at
146. The witness testified that her work is with
immediate crisis intervention, with 6100 calls per year,
and that she cannot follow the long-term situations of
families. Tr. at 133, 142. This testimony establishes
that Petitioner has been willing to go to considerable
lengths to assist this witness in crisis situations. It
does not establish that program patients not coming as
referrals from an advocate with whom Petitioner has a
longstanding relationship would receive similar
accommodations or that other psychiatrists, with whom the
witness had not worked, do not make efforts to
accommodate referrals from persons with whom they have
ties. 25/

The third basis on which the ALJ found that Petitioner
was unique was in that he spent more time with his
patients than other psychiatrists would. The only basis
for this finding is testimony by Petitioner, who said:

I do not just see people for 15-20 minutes as the
standard practice here, in terms of medication
visits. I spend a full hour with every patient
irrespective of what my reimbursement is. And I
believe each visit has to be combined with
counseling as well as medication.

Tr. at 80.

Petitioner testified that he had worked with other
psychiatrists to develop practice guidelines, but did not
testify specifically that this, or any other experience,
gave him knowledge of the time other psychiatrists in the
area actually spent with their patients. The one other
psychiatrist whom Petitioner presented as a witness did
not testify that he saw patients for only 15-20 minutes
or that such brief visits were standard practice.
Further, Petitioner's testimony is only that standard
practice was to see patients briefly for medication
visits. This leaves open the possibility that others
provide equivalent time overall, since they may provide
counseling and medication during separate visits if they
do not share Petitioner's belief that these services must
be combined in each visit. Thus, this testimony does not
reasonably support an inference that other psychiatrists
were unwilling to spend as much time with their patients
(nor the implication which the ALJ drew that this
unwillingness related to the amount or source of
reimbursement). 26/

The final basis for the finding that Petitioner was
unique was that he has a special sensitivity to Native
Americans. The only witness who testified about his
sensitivity indicated that she felt that Petitioner was
able to overcome cultural difficulties and to establish
rapport with Native American families. Hence, she
testified that she "would not use any other child
psychiatrist than [Petitioner] . . . for some of the
Indian kids" she worked with. Tr. at 127. However, in
evaluating this testimony, we note that, despite her
claim of general familiarity with child psychiatrists in
the State, the witness was not familiar with a
substantial number of those identified on a list of
board-certified child and adolescent psychiatrists. Tr.
at 131, 134-141; I.G. Ex. 10. Her opinion about the
cultural insensitivity of other child psychiatrists
cannot reasonably be assumed to apply to those with whom
she was not familiar. Also, she testified that an
increasing number of child psychiatrists have become
county employees as part of the process of establishing a
"child mental health service continuum in Minnesota."
Tr. at 128-29. She stated that there are psychiatrists
who, "I think, treat cultural communities . . . with
compassion and . . . there are several on this list that,
I think, are quite good at that." Tr. at 140. However,
she stated that "those people tend to be affiliated with
county agencies so their usefulness to me as an advocate
trying to find services is extraordinarily limited." Id.
Since the county psychiatrists do treat program patients,
the limitation is geographical, in that each county will
only treat residents in that county. Tr. at 136. The
ALJ did not explain why such psychiatrists do not provide
a reasonable alternative source of services at least for
program patients in their counties. In addition,
Petitioner is a source of care for a significant number
of Native Americans in the area for which a waiver was
granted. 27/

Finally, the ALJ disregarded the fact that the waiver
requested by the State was limited to the eight-county
area selected by the State Board. The reasonable
inference is that the State, having reviewed Petitioner's
case, did not consider his services so unique as to
create a need for a waiver state-wide. The standards for
a waiver, as noted elsewhere, are not identical to those
involved in the alternative source determination, but
involve considerations similar enough to make the
narrowness of the State's request significant evidence.
The ALJ did not explain why the State's action did not
support an inference that the State believed that
alternative sources of services were available to program
patients elsewhere in the State.

We conclude therefore that the ALJ's conclusion that
Petitioner proved the presence of a mitigating factor, in
that, due to his exclusion, alternative sources of the
same type of services are not available is not supported
by substantial evidence on the record as a whole. For
the reasons explained above, we do not find substantial
evidence in the record as a whole that any substantial
and irreparable harm to program patients from deprivation
of health care is likely to occur as a result of
Petitioner's exclusion.

iv. The ALJ's did not properly evaluate the
aggravating factors.

Even if Petitioner had proven that alternative sources
were not reasonably available, the regulation treats this
as a mitigating factor to be considered in assessing
whether the length of an exclusion is reasonable, not as
an automatic basis for reducing an exclusion period.
Therefore, the impact of this mitigating factor had to be
weighed against the presence of three aggravating
factors. The three aggravating factors proven by the
I.G. (and not challenged by Petitioner on appeal) were:

(1) Petitioner's conviction resulted in financial
loss of $1500 or more as provided in 42 C.F.R. 
1001.201(b)(2)(i). The I.G. proved that the
pharmaceutical company lost $170,394 as a result of
Petitioner's criminal offenses.

(2) Petitioner's crime took place over one year or
more as provided in 42 C.F.R.  1001.201(b)(2)(ii).
The I.G. proved that Petitioner was convicted of
similar acts over more than one year; in fact, the
Court of Appeals affirmed that the Petitioner
engaged in a continuing scheme lasting from 1986
into 1989. United States v. Garfinkel, 29 F.3d
1253, at 1260 (8th Cir. 1994).

(3) Petitioner's sentence included incarceration as
provided in 42 C.F.R.  1001.201(b)(2)(iv). The
I.G. proved that Petitioner received a six-month
term of imprisonment.

See generally ALJ Decision at 25.

The ALJ correctly noted that it is possible in particular
circumstances for one mitigating factor to be so
significant as to outweigh multiple aggravating factors.
ALJ Decision at 27; 57 Fed. Reg. at 3314. In reviewing
the evidence relevant to the aggravating factors here,
the ALJ concluded that it "militates against the
conclusion that only a three-year exclusion" would be
adequate. ALJ Decision at 27. 28/ However, the evidence
discussed by the ALJ and the reasonable inferences which
could be drawn from that evidence do not support giving
these proven factors minimal or no weight, which is the
effect of the ALJ's reduction of the length of the
exclusion below the benchmark period of three years to
the period already completed by the time of her Decision.
Further, the ALJ did not explain why other conflicting
evidence is disregarded. We discuss below the evidence
and considerations on which the ALJ relied in discounting
the aggravating factors.

It is important to recognize the role of the aggravating
factors in this case. The I.G. did not seek to enhance
the length of Petitioner's exclusion beyond the three-
year benchmark period, despite the presence of these
factors. This suggests that the length of exclusion
proposed by the I.G. already reflected a weighing of the
potential utility of Petitioner's services against the
risk to the programs and patients of Petitioner's
demonstrated willingness to commit fraud in connection
with delivering health care and to misrepresent his
actions (including failing to personally conduct patient
visits). Cf. ALJ Decision at 10. 29/ In addition, the
I.G. granted the limited waiver sought by Minnesota to
permit Petitioner to deliver the free services required
by his agreement with the State Board. This suggests
that the I.G. structured the exclusion to reflect a
situation where adequate safeguards protected patients so
that the benefits of Petitioner's services would outweigh
the risks which he presented. (In this regard, it is
noteworthy that the community service was required to be
performed without charge which would obviously reduce the
potential for financial abuse and was also under
conditions which presumably reduced any risk of patient
harm. See I.G. Ex. 4, at 2.) 30/ Thus, we are not
required (nor was the ALJ) to consider whether the
aggravating factors were sufficient to support an
exclusion period beyond the benchmark level but only
whether they were sufficient to offset the mitigating
factor asserted by Petitioner.

The three aggravating factors proven here are each
measures of the seriousness and magnitude of the offense
committed by Petitioner. As to at least two of the
factors, the evidence before the ALJ established that
Petitioner substantially exceeded the minimum to
demonstrate an aggravating factor. Thus, the loss not
only exceeded $1500 but was more than a hundred times
that amount. The crime not only was committed over a
year or more, but over three years, and was not a matter
of sporadic acts but was an ongoing scheme. 31/ The ALJ
did not discuss why these circumstances, which are
relevant to the remedial purpose of protecting the
program from at least financial harm, were disregarded.
Instead, the ALJ referenced evidence which was not
relevant to the considerations which underlie either the
aggravating factors or the exclusion provisions.

As a context for disregarding the seriousness of the
aggravating factors, the ALJ stated that the "witnesses'
testimony establishes that Petitioner has led an
exemplary life," except for the conduct for which he was
convicted during the drug study. The ALJ did not cite to
any specific testimony or other record evidence in
support of this sweeping affirmative statement. The
witnesses testified to Petitioner's professional standing
and to acquaintance with him over periods of 10-14 years.
See, e.g., Tr. at 36-38, 56, 65. None established a
foundation to know whether his entire life was
unblemished but for the fraudulent scheme of which he was
convicted. Not even Petitioner in his testimony made
such a claim beyond referencing his professional
accomplishments.

In discounting the importance of the aggravating factors
in this case, the ALJ referred to the number of counts on
which Petitioner was indicted but not convicted. Thus,
the ALJ wrote that Petitioner was "convicted of only two
counts of mail fraud and acquitted of two other
counts . . . [and] convicted of only three of 19 counts
of making a false statement." ALJ Decision at 27
(emphasis added). The ALJ did not explain why the larger
indictment reduced the significance of the multiple
federal crimes of which Petitioner was convicted. We do
not see why these convictions would be more serious if
Petitioner had initially been indicted on only five or
six counts rather than 23 counts. A single conviction of
an offense of this nature would have been a sufficient
basis to impose an exclusion. If anything, the fact that
Petitioner was convicted of multiple offenses militates
in favor of giving significant weight to the aggravating
factors. Furthermore, the aggravating factors derived
from the crimes of which Petitioner was convicted, and
the fact that he was not proven guilty of additional
charges in no way diminishes the severity of those of
which he was convicted. 32/ We therefore conclude that
the ALJ erred in considering the acquittal on additional
counts as evidence militating against giving weight to
the proven aggravating factors.

The ALJ also relied on several statements made by the
trial judge during the allocution and sentencing hearing
as somehow diminishing the significance of the
aggravating factors. In so doing, the ALJ ignored the
context of those statements. The trial judge was
required to determine whether specific provisions in the
Sentencing Guidelines applied which would oblige him to
enhance the sentence beyond that which he imposed. None
of those specific factors are among the aggravating
factors at issue here. Furthermore, the overall purpose
of the Sentencing Guidelines is to determine proper
punishments for convicted criminals. The Guidelines do
not directly address the remedial purposes of the
exclusion provisions, which, as discussed, are directed
at protecting the integrity of federally-funded programs
and the welfare of program patients.

The ALJ noted that the trial judge rejected the
allegation that Petitioner had defrauded a federal
entity. ALJ Decision at 27. This misstates the trial
judge's actions. In rejecting a government proposal to
increase the sentence because of the multiple victims
involved, the judge simply found that only the
pharmaceutical company lost money and that the interests
of the company were not "distinct" from those of the
University of Minnesota and the FDA; he noted that the
Sentencing Guidelines define "victim" as "the person or
entity from which the funds are to come directly."
P. Ex. 2, at 28. Hence, the judge concluded that it
would not be appropriate for purposes of the Sentencing
Guidelines to increase Petitioner's sentence on the basis
that there were multiple victims. Id. at 28-29.

The trial judge's reasoning can reasonably be understood
to support the conclusion opposite from the ALJ's, i.e.,
that since the FDA had interests not distinct from those
of the company which suffered the financial loss,
Petitioner's actions compromised the FDA's interests as
well. In any case, that the judge did not treat the FDA
as an independent victim for purposes of sentence
enhancement is irrelevant to any of the aggravating
factors before the ALJ. 33/

Furthermore, the false statement charges on which
Petitioner was convicted include as an element that the
statement be made in a matter within the jurisdiction of
the federal government. 18 U.S.C.  1001. Even if the
government were considered not to have suffered actual
harm, since the fraud was discovered before the FDA took
any action in reliance on the results, clearly the
potential existed for harm to the government and to
patients in the future if Anafranil had been approved for
use on the basis of fraudulent data. The nature of the
offense is thus on its face of a kind to call into
question Petitioner's integrity in dealings with the
federal government.

The ALJ also pointed to the trial court's rejection of
the government's proposal to enhance the sentence on the
basis that Petitioner engaged in more than minimal
planning in committing the offenses. ALJ Decision at 27.
The stated basis for the judge's rejection of this upward
adjustment was that, under the Sentencing Guidelines, the
planning involved must go beyond that which is part of
the offense itself. In the case of mail fraud, one of
the elements is "the existence of a scheme to defraud."
P. Ex. 2, at 27. 34/ The judge's conclusion on minimal
planning does not, therefore, imply that the conviction
was based on isolated incidents or unplanned events. On
the contrary, Petitioner engaged in an ongoing scheme and
cover-up lasting approximately three years. See United
States v. Garfinkel, 29 F.3d at 1259-60.

The ALJ also found that there was "no evidence that
Petitioner derived any personal or financial benefit from
his actions." ALJ Decision at 27. The relevant question
is not the benefit to a petitioner from the offenses of
which he was convicted, but the potential harm to the
programs or program patients. The I.G. was not required
to make a showing of benefit to Petitioner, but in any
event, it is reasonable to infer from Petitioner's role
as principal investigator that he derived some indirect
benefits professionally and financially from his
participation in the drug trial in which he committed his
fraud. Moreover, Petitioner sought at the trial court to
reduce his sentence on the basis that he received no
financial benefit from his conduct, and the judge
rejected that argument. P. Ex. 2, at 29-30.

The ALJ's treatment of the trial judge's statements
collectively as somehow decreasing the significance of
aggravating factors completely overlooks the final
conclusion of the trial judge -- that the sentence as
imposed (including not only a term of incarceration, but
also three years of supervised release, fine and costs,
and $170,394 in restitution) was "appropriate in these
circumstances." P. Ex. 2, at 35.

Finally, the ALJ made a conclusory finding that the
"evidence relevant to the aggravating factors shows also
that there has never been any question concerning
Petitioner's care of and dedication to his psychiatric
patients." ALJ Decision at 27-28. The ALJ's conclusion
conflicts with the findings earlier in the decision about
the nature of Petitioner's offense. Specifically, the
ALJ found that the scientific research study was intended
to determine the efficacy and safety of a drug intended
to be marketed to treat patients with mental disorders.
ALJ Decision at 10. Given this finding, Petitioner's
offenses of making false statements regarding data
collected for this purpose at the very least raise
questions about his concern for psychiatric patients
generally, since a foreseeable risk of misrepresenting
the data was to distort or delay the results of the drug
study. 35/ Furthermore, the acts by which he carried out
his scheme included falsely claiming that individual
patients in the study had been seen by him personally for
"physical and psychiatric examination" and that he was
complying with the protocol when in fact he was
prescribing medication in violation of it. 36/
Petitioner's apparent willingness to violate the
protocols developed for the drug study related to the
services which he delivered (or should have delivered) to
patients in the study also raises questions about his
concern for these particular patients.

The evidence cited for the finding that questions "never"
existed regarding Petitioner's patient care is a
statement by the trial judge in the sentencing colloquy
that Petitioner is "a fine physician" and that "a lot of
people" not only believe him to be a "wonderful
physician, but depend . . . [on him] day-to-day," and
that the judge wanted to make sure that the effect of the
sentencing was not "a worse crime." P. Ex. 2, at 40. In
addition, the ALJ said that the State Board decision to
require Petitioner to perform medical services was
consistent with the conclusion that Petitioner "poses no
threat to patients." ALJ Decision at 28. We explain
below why we find that this evidence does not adequately
support the inference that Petitioner presents no risk of
harm to program patients, especially since the ALJ
disregarded the conflicting evidence discussed above.

The trial judge's statement, in effect, that a lot of
people were happy with Petitioner's care does not
demonstrate that the judge concluded that he posed "no
threat to patients," as the ALJ inferred. ALJ Decision
at 28. The statement was made in the context of a
request by Petitioner's counsel at the sentencing hearing
that Petitioner be released pending appeal, because,
among other reasons, that might "have some effect . . .
[on] complications that come with licenses and other
kinds of things." P. Ex. 2, at 39. The trial judge's
concern that his actions not preclude the State Board
from permitting Petitioner to continue to practice does
not support an inference that the judge determined that
no restrictions on Petitioner's future practice would be
appropriate. Furthermore, the judge noted that he had
also received "letters on the other side of the ledger"
which was "unusual." Id. at 19. The judge indicated
that he had taken all these matters into consideration in
imposing the sentence, and that sentence was upheld on
appeal. Id. at 40.

As to the State Board, Petitioner's own exhibits
establish that the State Board stayed its suspension of
Petitioner's license on condition that he comply with all
the terms of the stipulation, including community service
and a ban on serving as a research investigator. See P.
Br. at 11-12; P. Ex. 7; see also ALJ Decision at 8. The
stipulation and order indicate that the State Board
"views [Petitioner's] practices as inappropriate in such
a way as to require Board action . . . [Petitioner] does
not contest that the conduct cited above constitutes a
reasonable basis in law and fact to justify the
disciplinary action." I.G. Ex. 4, at 2. The conditions
placed on Petitioner's community service further support
an inference that the State Board had concerns about
patient care, specifically that the State Board would
select the site, the personnel on site would participate
in developing a plan for the services, and the State
Board would choose "a work quality assessor who shall
provide quarterly reports to the Board regarding
[Petitioner's] overall work performance . . . ." I.G.
Ex. 4, at 3.

As to the State waiver request (and its approval by the
I.G.), rather than implying that the State (or the I.G.)
had no concerns about the quality of patient care by
Petitioner, the fact that request was narrowly confined
to coincide with the area in which Petitioner would be
performing community services under stringent conditions
suggests the reverse.

Collectively, this evidence may support an inference at
best that the trial judge, the State Board, and the State
of Minnesota did not believe that Petitioner presented a
risk of harm to patients outside of research studies so
great that he should necessarily lose his license to
practice medicine entirely. However, this evidence does
not support an inference that the trial judge, the State
Board, and the State all believed that no threat existed
and that no conditions should be imposed on Petitioner's
practice. To the extent that the ALJ's conclusion that a
three-year period of exclusion was excessive was based on
the unsupported inference that no question existed
concerning the nature of patient care provided by
Petitioner or the potential for patient harm, we find
that it was not supported by substantial evidence.

None of the evidence referenced by the ALJ in discounting
the aggravating factors thus supports the conclusion
drawn by the ALJ that she can "find no remedial purpose
in Petitioner's three-year exclusion" in light of the
statutory purpose of protecting the programs and patients
from harm. ALJ Decision at 27. We conclude that the
ALJ's determination that "[w]eighing the three
aggravating factors established by the I.G. and the one
mitigating factor established by Petitioner . . . the
three-year exclusion imposed against Petitioner is
excessive" is not supported by substantial evidence in
the record.

In sum, three years is the benchmark period for a section
1128(b)(1) exclusion. Petitioner did not prove by a
preponderance of the evidence the presence of the
mitigating factor alleged. Moreover, we would find the
three-year exclusion imposed by the I.G. to be within a
reasonable range, even if we were to conclude that
substantial evidence in the record supported a finding
that the mitigating factor is present. The ALJ did not
properly consider the circumstances relevant to the three
aggravating factors proved by the I.G., but, rather,
assigned these factors minimal or no weight based on
findings that are either unsupported or irrelevant. The
I.G. could reasonably accord these factors sufficient
weight to offset the alleged mitigating factor, under the
particular circumstances here.

Accordingly, we conclude that the three-year exclusion
period was within a reasonable range and should be
reinstated.

4. We decline to decide whether Petitioner's conviction
was with respect to an act or omission "in a program
operated by or financed in whole or in part by any
federal . . . government agency".

Section 1128(b)(1) provides as follows (emphasis added):

CONVICTION RELATING TO FRAUD.--Any individual or
entity that has been convicted, 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 program operated by or financed
in whole or in part by any Federal, State, or local
government agency, of a criminal offense relating to
fraud, theft, embezzlement, breach of fiduciary
responsibility, or other financial misconduct.

The ALJ found that the I.G. had the authority to exclude
Petitioner under the first branch of this provision
because Petitioner's conviction was in connection with
delivery of a health care item or service. ALJ Decision
at 11. However, the I.G. contended that the second
branch of this provision also applied in that
Petitioner's conviction for fraud in relation to a drug
study approved by the FDA was a conviction "with respect
to" an act or omission in a program operated by or
financed in whole or in part by a federal agency. The
ALJ rejected this alternative basis for Petitioner's
exclusion.

The I.G. raised substantial questions about the reasoning
on which the ALJ relied to conclude that the acts for
which Petitioner was convicted were not with respect to a
program operated or financed by a federal agency, i.e.,
the FDA. For example, the I.G. pointed out that the ALJ
treated the "program" involved as the Anafranil drug
study, for which the pharmaceutical company merely sought
FDA permission, rather than as the overall drug approval
program of the FDA, in which companies are authorized to
conduct studies generating data on which the FDA relies.
I.G. Br. at 30-31. Also, we note that the elements of
the federal False Statements Act, 18 U.S.C.  1001
(1988), require that the intentional making of a false
statement be in a matter within the jurisdiction of an
federal agency.

However, since Petitioner did not challenge before us the
basis for his exclusion which was upheld by the ALJ, we
do not need to resolve whether the additional basis
asserted by the I.G. would also apply. 37/ We therefore
decline to do so.

Conclusion

In summary, for the reasons explained above, we reverse
FFCLs 5, 7, 12 and 13 and modify the FFCLs to add the
following new FFCLs:

14. Petitioner did not prove by a preponderance of
the evidence the presence of a mitigating factor.

15. Even if Petitioner's evidence were sufficient
to show that alternative sources of the types of
services provided by Petitioner are not reasonably
accessible to program patients, this mitigating
factor would not outweigh the three aggravating
factors proved by the I.G.

16. The exclusion period of three years imposed by
the I.G. is within the range of reasonable periods
under the circumstances and is affirmed.

We decline to review the ALJ's determination regarding an
alternative basis for the exclusion.

___________________________
Donald F. Garrett


___________________________
M. Terry Johnson


___________________________
Judith A. Ballard
Presiding Board Member

1.
The ALJ's determination had no direct effect in this
case, since she nonetheless found a proper basis for
exclusion under section 1128(b)(1). The I.G. appealed
the determination on the grounds that it was erroneous
and could affect future cases. I.G. Br. at 29, n.31.

2.
Petitioner asserted in a footnote in his brief that the
record contains "no evidence" to support the conclusion
that counsel for the I.G. was prohibited from working
during the furlough, because the I.G. did not submit "any
written pleadings or affidavits." P. Br. at 5, n.3. The
initial written extension request stated that the
"attorney responsible for representing the I.G. in this
matter was furloughed from November 14 until November 20,
1995." I.G. Motion for Extension at 2. Counsel for the
I.G. indicated in his telephone request, as Petitioner's
brief recognized, that the basis for the request for
three additional weeks was that the furlough made it
impossible to prepare and file the appeal. Petitioner
did not suggest in his brief any basis to doubt that the
I.G. staff members involved were in fact furloughed
again, and did not raise such a concern when opposing the
granting of the additional three weeks. The Board
accepted the oral representations of both parties as to
the reasons underlying the request for and opposition to
the three weeks for the I.G. to appeal. No additional
written submissions were necessary. Furthermore, the
Board was able to take administrative notice of the legal
prohibitions against HHS employees not in emergency
status performing work during the furlough. There has
been no demonstration or even suggestion by Petitioner
that counsel for the I.G. was deemed an emergency
employee. Petitioner asserted that because counsel for
the I.G. was (presumably) paid for the time he was
furloughed as required by the legislation ending the
furlough, I.G. counsel "had no real disincentive to think
about or even `work' on the notice of appeal." P. Br. at
7. This argument ignores the various legal constraints
on even voluntary work by federal employees during a
furlough, such as the Anti-Deficiency Act and the rule
against augmentation of appropriations.

In any case, the status of counsel for the I.G. is not
the critical point. The Board and all its employees were
on furlough. As discussed in the text, the Board tolled
the deadlines on its cases during the furlough because it
would be unable to provide information which might be
essential to assist parties in completing their filings.
Therefore, in the interests of justice, deadlines were
tolled for non-federal parties, as well as parties
themselves impacted directly by the furlough.

3.
This summary is provided for the convenience of the
reader and is not intended to modify or reverse any
findings or conclusions of the ALJ, unless we expressly
state that we are doing so.

4.
The ALJ Decision provided a detailed description of the
protocols and procedures involved in the Anafranil study.
ALJ Decision at 5-7.

5.
The I.G. also challenged the ALJ's failure to instruct
the Petitioner that her modification of the exclusion
period did not remove the regulatory requirement for
Petitioner to seek reinstatement from the I.G. before he
would be eligible to participate in the Medicare program.
The ALJ had denied the I.G.'s request to clarify her
decision, on the grounds that the issue was not before
her and the regulations were clear. Denial of I.G.
Motion for Modification of Decision (December 14, 1995).
The I.G. sought a ruling from the Board to make the
reinstatement requirement clear to Petitioner. I.G. Br.
at 33. Petitioner asserted that he was not misled and
understood the reinstatement requirement, and had, in
fact, submitted an application for reinstatement. P. Br.
at 3, n.2. The I.G. did not reply to this assertion and
made no showing why a ruling is needed even though
Petitioner acknowledged that the reinstatement
requirement applies. Therefore, we decline to issue the
requested ruling.

6.
We use "program patients" to refer to recipients and
beneficiaries of all the programs from which the I.G.
sought to exclude Petitioner and "Medicaid" to refer to
all the programs other than Medicare.

7.
The ALJ also commented that the I.G.'s evidence
concerning the aggravating factors present in this case
"militates against the conclusion that only a three-year
exclusion will adequately protect the programs . . . ."
ALJ Decision at 27 (emphasis added). The issue before
the ALJ was not whether a three-year exclusion was the
only way to protect the programs but whether it was
within the reasonable range of periods under the
circumstances.

8.
If any mitigating factor simply canceled out any
aggravating factors, the benchmark period would apply.
The mitigating factors must be more important or
significant than the aggravating factors to support
finding that the benchmark period proposed by the I.G. is
beyond the reasonable range under the circumstances.

9.
The I.G. argued that it was "error as a matter of law"
for the ALJ to conclude that alternative sources of care
are unavailable where the I.G. had produced evidence that
"the large majority of more than fifty board-certified
specialists in child and adolescent psychiatry reside in
the same area as Petitioner." I.G. Br. at 10. We
disagree. First, the preamble to the regulations
establishing this mitigating factor stated that the I.G.
would look to "whether there are service providers who
accept Medicare and Medicaid patients, rather than merely
whether services are available generally." 57 Fed. Reg.
3298, at 3315 (January 29, 1992). It follows that the
ALJ could without error find that no alternative source
was available if Petitioner had shown (which he did not)
that none of the 50 specialists would accept Medicare and
Medicaid patients. Furthermore, the relevant
geographical area is not where a provider resides but
where program patients can reasonably access alternative
services (which the ALJ here treated as the entire
State).


10.
Thus, a prior decision stated that to "establish this
mitigating factor, a provider must prove significant
adverse changes in the previously available services" to
program patients. Meggison at 16.

11.
In this regard, the ALJ referenced a prior decision which
stated that the--

mitigating factor does not apply where an exclusion
does no more than reduce the number of available
health care providers in a community. Mere
diminution of previously available health care
services is insufficient. Clearly, every exclusion
of a health care provider has that potential effect.
The three-year benchmark period specified by the
regulation would be rendered meaningless if the mere
diminution of previously available services were
construed to satisfy the mitigating factor . . . .

Meggison at 16; see also Renick at 11-12 (Petitioner must
show that program patients "may no longer obtain care in
a reasonably practicable manner" not merely that services
"will be less available" or that patients will be
"inconvenienced.")

12.
It is instructive to consider the provisions relating to
the potential waiver of an exclusion for a physician who
is the "sole community physician" or the "sole source of
essential specialized services in the community." See 42
C.F.R.  1001.1801(b). While not identical in scope to
the mitigating factor involved here, the considerations
involved are similar in addressing the need for access by
program patients to services. The preamble to the
regulations indicates that the I.G. would look at whether
others are providing the "same services" within a
recognized service area, giving great weight to such
"objective measures" as zip codes, and at whether those
services are available to program patients. 57 Fed. Reg.
at 3302. No reference is made to comparing the merits or
qualities of individual providers. Indeed the preamble
indicates otherwise by stating that where a provider is
not the only source of services, e.g., where there is
more than one cardiologist in the community, but no
others accept program patients, then the waiver
provisions would apply. 57 Fed. Reg. at 3317. This
example suggests that the type of providers to be
considered was expected to be defined by some
recognizable and objective specialty area, such as
cardiology.

13.
Petitioner's position here is similar to that of the
excluded provider in Holmes, as the ALJ there described
it:

What Petitioner is saying, in essence, is that no
medical alternative is sufficient because it is not
his care. It goes without saying that on some level
the medical care provided by every physician is
unique and cannot be exactly duplicated by other
physicians. Certainly, the regulations do not
contemplate that alternative sources of care means
care that is rendered under exactly the same
circumstances as that given by the excluded
provider. Otherwise, the Secretary would not have
used the word "alternative".

Holmes, DAB CR270, at 26-27.

14.
As noted in the preamble, "[t]he purpose of this
mitigating factor is to protect program beneficiaries,
and if services are not reasonably available to them
then, as a practical matter, they are not available."
57 Fed. Reg. at 3315.

15.
In an analogous situation, the ALJ found that where
unavailability of physician's assistants in the community
resulted from low pay, rather than from reasons related
to the exclusion of the particular provider, the provider
had not shown that the absence of alternative sources
results from the exclusion. Meggison at 16.

16.
Of these, only five were bring treated for suicidal
ideation, while the remainder suffered from attention
deficit disorder and learning disabilities. See ALJ
Decision at 22.

17.
In another ALJ decision, the argument that the excluded
provider's patients had difficulty making initial
appointments with new physicians was rejected:

No physician can guarantee that he or she will
always be available to see patients whenever they
call for an appointment. The fact that some of
Petitioner's former patients had to wait to see a
physician is not a basis for finding that they were
unable to establish a treatment relationship with
the physician.

Holmes at 22. Similarly, in this case, there was
evidence that some patients would encounter delays in
receiving care but not that they were unable to establish
treatment relationships eventually.

18.
The record does support a finding that a number of
program patients seek care at the University of Minnesota
but have to be placed on waiting lists. Tr. at 59. One
witness estimated 150 program patients per year that
could have benefitted from Petitioner's services who
could not be immediately accommodated at the University.
Id. However, this does not justify disregarding the
availability of the University as a source of services
for a large number of program patients. Further, as
discussed above, the record does not support an inference
that Petitioner could have accepted a large number of
these patients or that his acceptance of these patients
would not simply displace other patients onto other
waiting lists.

19.
Petitioner himself does not appear on the list, possibly
because he was not board certified, although there was
evidence that he had comparable credentials from Canada.
Tr. at 44, 95. No evidence was presented about how many
other psychiatrists with Canadian credentials might be
available in Minnesota.

20.
For example, one witness testified that about ten
psychiatrists on the list practice "psychoanalytic
psychotherapy without much medication management." Tr.
at 50.

21.
It is not clear from the record that the witnesses had a
foundation for direct knowledge of the facts concerning
the availability of each of the psychiatrists who was
discussed by name. For example, the one board-certified
psychiatrist who testified stated that of those on the
list whom he knew some had moved, some were part-time,
and some were in the Mayo Clinic. Tr. at 50. The record
does not establish that those that had moved had all left
the State entirely; that those practicing part-time would
be unable to accept some share of program patients; or
that all those who were in the Mayo Clinic were
unavailable to accept any program patients. Id. In
addition, some of the names on the list were unfamiliar
to the witnesses. Tr. at 43-54.

22.
This testimony implies both that Petitioner does in fact
turn away patients because of his waiting list and that
they are able to find other care.

23.
The reference to "in town" points to the problem that the
ALJ defined the relevant geographical area as the entire
State, but the witnesses were not always asked to testify
about alternative sources throughout the State or about
what their knowledge of such sources outside their
community was.

24.
In particular, we note the testimony of the pediatrician
cited above that patients turned away because
Petitioner's calendar was full would typically go to
other psychiatrists.

25.
In fact, there is evidence in the record to the contrary.
Hence, the pediatrician testified that: "With suicide
problems -- if I call up my psychiatric department [at
the managed care program] and I say a person is at
imminent risk for suicide then they'll work them in."
Tr. at 114-15.

26.
The ALJ found that the standard practice was "due to the
psychiatrists' unwillingness to treat Medicaid patients
or to the psychiatrists' scheduling restrictions." ALJ
Decision at 22. Petitioner testified that the care of
other psychiatrists might not equal his because they
might practice under "circumstances where they can't take
on a Medical Assistance patient, or because of time
restrictions spend only 20, 15-20 minutes per patient,"
and he felt that little could be "done for someone in 20
minutes." Tr. at 94. Petitioner did not specifically
testify that others impose time restrictions on Medicaid
patients because they are unwilling to treat such
patients. Moreover, as mentioned above, no foundation
was laid to show that Petitioner would know the standard
practice of other psychiatrists with respect to the
amount of time spent with patients, much less that he
would know their motivation, if any, for any time
restrictions they placed on patient visits.

27.
The ALJ found that Petitioner was treating patients from
the White Earth Indian Reservation and other impoverished
patients in rural area under the waiver in compliance
with terms of his settlement with the State licensing
agency and that he would continue to do so "as part of
his desire to perform public service." ALJ Decision at
22.

28.
As discussed above, this language misstates the issue.
The impact of the aggravating factors need not be to
prove that only a three-year exclusion will be adequate
in order to compel the ALJ to affirm the period imposed
by the I.G., but rather she must affirm if the
aggravating factors demonstrate that a three-year period
is within a reasonable range despite the presence of any
mitigating factors found.

29.
The ALJ Decision pointed out that the I.G.'s notice to
the Petitioner only stated the statutory basis for the
exclusion and did not refer to any aggravating or
mitigating factors. ALJ Decision at 15. Since the I.G.
did not impose an exclusion longer than the benchmark, we
see no reason that the notice would necessarily reference
the aggravating factors. Petitioner did not raise any
issue of lack of notice before us and the facts on which
all three aggravating factors were based were contained
in the court records of Petitioner's criminal proceedings
and hence were presumably known to him. The ALJ did not
make any finding that Petitioner was somehow prejudiced
by the timing of the I.G.'s assertion that the three
aggravating factors apply. The timing of the I.G.'s
assertion of the aggravating factors is not relevant to
determining the appropriate weight to be given to them.

30.
The ALJ described the partial waiver as evidencing that
the I.G. "appears to have recognized that Petitioner does
not threaten the health of program patients." ALJ
Decision at 28. This inference is not warranted in light
of the purpose of the waiver request to effectuate the
community services provisions of the State Board
licensing decision, the narrow geographical restrictions
on the waiver, and the conditions the State Board imposed
on the community service (such as assessment of quality
of services and mandated site selection) which provided
assurances of patient protection. I.G. Ex. 4, at 2.

31.
The Court of Appeals considered the duration of
Petitioner's scheme in the context of rejecting an Ex
Post Facto clause challenge to his mail fraud conviction
and determined that it began in 1986 and "continued
through 1989." Garfinkel, 29 F.3d at 1260. The court
noted that although the mailing was an essential element
of his conviction on the challenged count, "nothing ...
implied that the mailing brought the scheme to fruition.
Directly to the contrary, the indictment charged
Garfinkel with devising his scheme `[b]eginning in
approximately September of 1986 and continuing through
1989.' . . . The evidence offered at trial supported the
government's contention in its indictment that the scheme
was ongoing through 1989, as Garfinkel continued to
participate in the Anafranil study, sign PRFs, and
falsely represent that he had complied with the
protocol." Id. at 1259.

32.
It is noteworthy that the I.G. specifically rejected a
proposal that the absence of a prior record of
convictions be treated as a mitigating factor on the
grounds that no one "deserves special credit (in the form
of a reduced period of exclusion) for doing what is
expected, that is, obeying the law." 57 Fed. Reg.
at 3315.

33.
The judge found that "neither the University nor the FDA
supplied any of the funds involved in defendant's
fraudulent conduct. Nor can it be said that the
interests of the FDA and University were distinct from
each other or the interests of [the drug company] . . . .
All three entities were interested in testing Anafranil
to discover whether it was a safe and effective drug.
Thus the court finds that, for purposes of sentencing
guideline 2F1.1, [the drug company] . . . , as the source
from which funds came, is the only victim of defendant's
fraud." P. Ex. 2, at 29.

34.
The trial judge also declined the government's invitation
to find more than minimal planning despite this point, on
the grounds that the other counts of the indictment on
which Petitioner was acquitted would make out a larger
scheme beyond that necessary as an element of the
convictions. P. Ex. 2, at 27-28.

35.
This danger was particularly evident because of the
history of the drug in question. The pharmaceutical
company "originally planned to market the drug as an
antidepressant but did not due to significant concerns
about its safety profile. Although there were safer
drugs approved for use as anti-depressants, there were no
other drugs approved for the treatment of OCD [obsessive-
compulsive disorder]." United States v. Garfinkel,
29 F.3d 1253, 1254 (8th Cir. 1994). The pharmaceutical
company "was particularly concerned about a higher
reported incidence of seizures related to Anafranil use."
Id.

36.
Petitioner asserted in his brief that these persons were
"human subjects" but not "patients for medical treatment"
because his discretion to treat them was limited by the
protocol. Petitioner Br. at 10. This argument was
implicitly rejected by the ALJ in reaching her conclusion
that Petitioner's criminal offense was "in connection
with" health care delivery, and Petitioner did not except
from that conclusion. We therefore decline to revisit
this issue.

37.
The I.G. argued that we should nevertheless decide the
issue so that the outcome of future cases would not be
affected by an erroneous interpretation. In our view,
the issue would be better resolved in a case where the
result depends on the interpretation so that the parties
are most likely to fully develop the record.