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CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Appellate Division
IN THE CASE OF  


SUBJECT: Dr. Frank R. Pennington, M.D.,

Petitioner,

DATE: September 13, 2001

             - v -

 

The Inspector General

 

Civil Remedies CR763
Docket No. A-01-73
Decision No. 1786
DECISION
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FINAL DECISION ON REVIEW OF

ADMINISTRATIVE LAW JUDGE DECISION

On June 25, 2001, Frank R. Pennington, M.D., appealed the April 20, 2001 decision of Administrative Law Judge (ALJ) Joseph K. Riotto concluding that the Inspector General (I.G.) was authorized to exclude Dr. Pennington from Medicare, Medicaid, and all federal health care programs as defined in section 1128B(f) of Social Security Act (Act) for a period of ten years. Frank R. Pennington, M.D., DAB CR763 (2001) (ALJ Decision). The ALJ determined that a 5-year exclusion was mandatory because Dr. Pennington was convicted of possession of cocaine with intent to distribute. The ALJ further determined that the five-year additional period imposed by the I.G. was within a reasonable range given the aggravating circumstances. Dr. Pennington argued that the ALJ Decision should be reversed and the additional period of exclusion set aside or reduced. He contended that the evidence before the ALJ, along with additional material submitted with his appeal, established that he was a drug addict but not a drug dealer. We conclude that the ALJ correctly concluded that Dr. Pennington was subject to a mandatory five-year exclusion and that the additional 5-year period was within a reasonable range. For the reasons explained more fully below, we affirm the ALJ Decision.

Legal Authority and Standard of Review on Appeal

The I.G. excluded Dr. Pennington under the authority of section 1128(a)(4) of the Act, which provides for the mandatory exclusion, from the federal health care programs, of any individual convicted of an offense (after August 21, 1996), "consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." The exclusion imposed under this authority must be for "not less than five years," with a single exception not alleged to be relevant here. Section 1128(c)(3)(A) of the Act.

Our standard of review of the ALJ Decision to uphold the I.G.'s exclusion is set by regulation. We review to determine whether the decision is erroneous as to a disputed issue of law and whether the decision is supported by substantial evidence in the record as a whole as to any disputed issues of fact. 42 C.F.R. § 1005.21(h).

Factual and Procedural Background

The ALJ decided the case on the written record without an in-person hearing after determining that no relevant material facts were in dispute, but rather only the legal significance of the undisputed facts. ALJ Decision at 1.

Dr. Pennington was a licensed physician in Tennessee.(1) On June 9, 1998, he pled guilty in federal court to one count of "unlawfully, willfully, and knowingly possess[ing] with intent to distribute approximately 15.1 grams of cocaine base (crack cocaine), a controlled substance." ALJ Decision at 4, FFCLs 2-4; I.G. Ex. 1.

The I.G. offered six exhibits which were admitted without objection. Dr. Pennington submitted three exhibits (also without objections) to the ALJ. Dr. Pennington's exhibits consisted of the following: a certificate of his completion of a drug abuse program in prison; a summary of his treatment by therapists; and a report from a psychologist who evaluated him and testified at the sentencing hearing. Pennington Exs. 1-3.

Issues on appeal

Regulations governing appeals from ALJ decisions in exclusion cases require submission of "a written brief specifying exceptions to the initial decision and reasons supporting the exceptions." 42 C.F.R. § 1005.21(c). Dr. Pennington's brief was not entirely clear about the parts of the ALJ Decision to which he excepted, but we have construed his assertions liberally. The bulk of Dr. Pennington's brief is directed at proving that he was a drug addict and not a drug dealer. We construe this argument, as did the I.G., as amounting to an exception to FFCL 12, which stated that:

Petitioner's felony conviction is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance within the scope of section 1128(a)(4) of the Act.

ALJ Decision at 5. The I.G. responded that Dr. Pennington could not collaterally attack his criminal conviction in these derivative administrative proceedings by asserting that there was no intent to distribute when intent to distribute was a necessary element of the crime to which he pled.

The only FFCL to which Dr. Pennington expressly excepted was FFCL 15, which stated that:

The aggravating factors established by the I.G. prove Petitioner to be untrustworthy.

Pennington Br. at 7, citing ALJ Decision at 5. Since his brief concluded that his additional period of exclusion beyond the mandatory minimum "should be set aside or drastically reduced," we understand Dr. Pennington to further except to FFCL 16, which stated that:

A ten-year exclusion of Petitioner is within a reasonable range.

Pennington Br. at 9; ALJ Decision at 5. Dr. Pennington argued that the two aggravating factors (which admittedly were present) could not be applied mechanically because they would exist in every felony conviction and, in his case, did not demonstrate a lack of trustworthiness. Pennington Br. at 7-8. He further argued that excluding him for more than the 5-year mandatory period was unfair, because he had not caused harm to any patients or programs and because he alleged the presence of circumstances which he considered as mitigating. The I.G. responded that none of the circumstances asserted by Dr. Pennington were among those permitted to be considered in mitigation under the applicable regulations and that the two aggravating factors were applied appropriately.

Since Dr. Pennington did not except to the remaining FFCLs, i.e., FFCLs 1-11, 13, and 14, we affirm and adopt those FFCLs without further discussion.

ANALYSIS
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1. Dr. Pennington did not establish reasonable grounds on appeal for his later proffer of new evidence.

Along with his appeal brief, Dr. Pennington submitted plea and sentencing transcripts from his criminal case. Under the appeal regulations, the Board may remand to the ALJ for consideration of relevant and material evidence not presented at the ALJ level if "reasonable grounds for the failure to adduce such evidence" below are shown. 42 C.F.R. § 1005.21(f). We must resolve as a preliminary matter whether these transcripts justify remand to the ALJ.

In his brief to the ALJ, Dr. Pennington referred to the existence of a sentencing hearing. He asserted that a review of the transcript of that hearing would support his position that no distribution occurred and stated that the transcript would "be provided as Exhibit D when it becomes available." Pennington Post-Hearing Br. at 3. No further explanation of its unavailability (or notice of the existence of the plea transcript) appears to have been given. The record does not show any request made to the ALJ in regard to the contemplated provision of the transcript.

Before us, Dr. Pennington offered no explanation as to why he failed to offer this evidence before the ALJ. His brief contains no information, for example, as to when or how these transcripts became available to him or his counsel. The guilty plea and sentencing hearings took place in June and November of 1999. Dr. Pennington would obviously have been aware of them at the time, so that he or his counsel should have had sufficient notice to obtain the transcripts for presentation to the ALJ before the decision was issued in April of 2001. Absent some explanation of particular difficulties or delays, we must conclude that Dr. Pennington has not shown any reasonable grounds in the record before us for his failure to adduce this evidence below. He is thus not entitled to have this appeal remanded to the ALJ for purposes of reviewing this evidence.

Generally, it is the role of the ALJ to weigh evidence and make factual determinations in the first instance. In this case, we have decided that Dr. Pennington has no basis to have the matter remanded for such a determination on the additional evidence. Nevertheless, Dr. Pennington's extensive reliance on portions of the transcripts as an integral part of his arguments that he was not a drug dealer and that his incarceration period did not justify the additional exclusion period makes it problematic to understand his appellate brief without some review of the contents of the attached transcripts. Such a review makes clear that, even were any reasonable grounds shown for Dr. Pennington's late proffer of the transcripts, little purpose would have been served by a remand to the ALJ to consider this evidence. We find the transcripts offer nothing material to the issues relevant to the basis and length of Dr. Pennington's exclusion. As we discuss below, we find that reviewing his arguments in the context of the attachments themselves makes clear that the arguments are unavailing.

2. Dr. Pennington's conviction for possession with intent to distribute is a sufficient basis for the exclusion regardless of whether he was a "drug dealer."

Before the ALJ and again on appeal, Dr. Pennington reiterated the assertion that "he IS NOT A DRUG DEALER." Pennington Br. at 1 (emphasis in original). Whether or not Dr. Pennington was or is a drug dealer was never at issue in this case. The issue here is whether his conviction fell within the felony offenses encompassed by section 1128(a)(4) of the Act, which provides for mandatory exclusion of any individual convicted "under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." Dr. Pennington does not dispute that he pled guilty in federal court to felony possession of a controlled substance (crack cocaine) with intent to distribute it. The offense on its face includes all the elements required by section 1128(a)(4).

In an exclusion proceeding based on the existence of a conviction of a kind listed in the Act, "the basis for the underlying [conviction] is not reviewable and the individual or entity may not collaterally attack the underlying determination, either on substantive or procedural grounds . . . ." 42 C.F.R. § 1001.2007(d); see also Paul R. Scollo, D.P.M., DAB No. 1498 (1994). For this reason, the ALJ rejected as irrelevant Dr. Pennington's claims that he was not involved in distribution and that his offense reflected only his impairment by addiction. ALJ Decision at 5-6.

Dr. Pennington stated on appeal that the ALJ misunderstood his argument that he was not a drug dealer as a collateral attack on his conviction, which he denied that it was. Pennington Br. at 1. We find, however, that Dr. Pennington's position nevertheless does amount to a collateral attack. He pressed the same points on appeal, attempting to show that he had no intent to distribute. Since intent to distribute was a necessary element of the offense to which he pled, it is difficult to see how an attempt to disclaim it now could be characterized as anything other than a collateral attack on the conviction.

In his appeal before the Board, Dr. Pennington highlighted a statement from the plea transcript to the effect that he did possess the drugs but "had no intention of distributing it to anyone." Pennington Br. at 2, quoting Guilty Plea Hearing, in U.S. v. Pennington, Crim. No. 98-10023, at 13 (June 17, 1999) (Plea Transcript) (emphasis in original). The distinction Dr. Pennington was trying to make is explained on the next page of the same transcript, where counsel for Dr. Pennington stated his client had not intended to resell the drugs but would have shared them with one or more other persons. Plea Transcript at 14-15. Dr. Pennington told the court that counsel's recitation was accurate. The court then accepted the guilty plea because under the law at issue there "can be a distribution for no money passing hands." Id.

Before us, Dr. Pennington did not point to, and we have not found, any provision of section 1128(a)(4) which requires that controlled substances must be intended for sale, as opposed to simple distribution, in order for the offense to form the basis of an exclusion. We conclude that the ALJ did not err in finding that I.G. had authority to exclude Dr. Pennington.

We therefore affirm the ALJ's conclusion that the I.G. had a basis to impose a mandatory exclusion under section 1128(a)(4) of the Act.

3. The ALJ did not err in concluding that a ten-year exclusion is within a reasonable range.

The regulations specify aggravating and mitigating factors to be considered in determining the period of exclusion to be imposed, if any, beyond the five-year minimum mandatory period under section 1128(a)(4). 42 C.F.R. § 1001.102(b) and (c). The I.G. relied on two aggravating factors, i.e., that the "sentence imposed by the court included incarceration" and that the individual "was the subject of . . . other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serve[d] as the basis for the imposition of the exclusion." 42 C.F.R. § 1001.102(b)(5) and (9).

Dr. Pennington did not dispute that he was sentenced to 47 months of incarceration as part of his sentence. He did not dispute that the Tennessee Board of Medical Examiners (TBME) revoked his license as a result of the same circumstances that led to his conviction and his exclusion. Hence, the facts underpinning the aggravating factors were uncontested.

Dr. Pennington argued that the evidence relating to the aggravating factors did not amount to proof that "Dr. Pennington was not a good doctor who had great concern for his patients." Pennington Br. at 9. He contended that his incarceration did not justify a longer exclusion because he was sentenced to the least amount of time permitted under the sentencing guidelines. Id. He further suggested that the revocation of his license was also without relevance because the decision of when his competency was restored and whether he still posed a medical risk to patients in the future should be left to the expertise of the TBME. Id. These arguments essentially attack the weight that the ALJ gave to the aggravating factors.

The ALJ stated that his conclusion that the 10-year exclusion was warranted was not based only on the presence of a greater number of aggravating than mitigating factors, but rather was based on "the quality of the circumstances," as required by Barry D. Garfinkel, DAB No. 1572, at 31 (1996), upheld in Garfinkel v. Shalala, No. 3-96-604 (D. Minn. Jan. 14, 1997) (denying motion for preliminary injunction), (D. Minn. June 25, 1997) (adopting Magistrate's Report and Recommendation). ALJ Decision at 6-7. He summarized his assessment on the record before him as follows:

The dangers to society of illegal drugs and the illicit use and distribution of controlled substances are well-known. Petitioner was sentenced to a lengthy period of incarceration which indicates both his involvement in such enterprises and the danger he posed to others. The action of the TBME in revoking Petitioner's medical license also underscores the danger he posed to his patients by his illicit involvement with illegal controlled substances. As a physician, Petitioner posed a double harm to others. His admitted use of such substances could impair his medical treatment of his patients. As the crime for which he was involved was an intent to distribute, he engaged in conduct which could directly result in the proliferation of illegal narcotic use.

ALJ Decision at 7.

The ALJ did not err in considering the fact and length of the incarceration as an appropriate measure of the relative severity of the offense. Dr. Pennington's repeated insistence before the ALJ and before us that he was not a drug dealer did not contradict the considerations expressed by the ALJ about a doctor who not only was admittedly addicted to drugs over a long period of time during which he continued to practice medicine and who had pled guilty to misusing and seeking to distribute illegally substances to which he would have access if he returned to practice in the federal programs.(2)

As for the revocation of his medical license, Dr. Pennington appeared to suggest that the I.G. should have deferred to the TBME to determine when Dr. Pennington might be considered competent to practice medicine again. Pennington Br. at 9. Dr. Pennington further argued that his loss of his license was meaningless because such revocation was mandatory upon his felony conviction. Finally, he insisted that he was a "good doctor" whose drug addiction had not affected his professional life and had now been successfully treated. Id.

The federal government's concerns in imposing exclusions focus on the protection of federally-funded health care programs and the beneficiaries and recipients who depend upon them. We have previously stated that "[f]ederal exclusion law is prospective and remedial, aiming at guarding both patients and the federal fisc from criminals whose conduct demonstrates their lack of trustworthiness." Narendra M. Patel, M.D., DAB No. 1736, at 11 (2000). No showing of actual harm to a patient is required to support the I.G. in exercising discretion to impose a period of exclusion greater than the mandatory minimum. Cf. Roy Cosby Stark, DAB No. 1746, at 6 (2000); Narinder Saini, M.D., DAB No. 1371, at 6 (1992).(3) The ALJ did not err in considering the revocation of Dr. Pennington's medical license triggered by his drug conviction as underscoring the existence of a threat to patients from Dr. Pennington's drug involvement. The I.G. is not required to defer to future actions of a state board in weighing the need to protect federal programs and patients from multiple risks. Dr. Pennington has not shown that a 10-year exclusion is an unreasonable or excessive period to serve the purpose of providing that protection given the two aggravating factors.

Dr. Pennington did not prove the presence of any of the mitigating factors set out in the regulations. He asserted that he was addicted to drugs and had an "addictive personality." Pennington Br. at 6-7. Drug addiction, and its treatment, are not in themselves mitigating factors under the applicable regulations. Under 42 C.F.R. § 1001.102(c)(2), the criminal proceedings record must show that the criminal court determined that a mental, emotional or physical condition reduced culpability for the crime before mitigation is found. Before the ALJ, Dr. Pennington offered nothing to establish that the criminal court made such a determination about him.(4)

We conclude that Dr. Pennington failed to establish any mitigating circumstances. We affirm the ALJ's conclusion that a 10-year exclusion was within a reasonable range given all the relevant circumstances.

CONCLUSION

For the reasons explained above, we uphold the ALJ Decision in its entirety and affirm and adopt all the FFCLS therein.

JUDGE
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Cecilia Sparks Ford

M. Terry Johnson

Donald F. Garrett
Presiding Board Member

FOOTNOTES
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1. The summary of facts here is based on the undisputed findings of the ALJ and is not meant to replace the more detailed Findings of Fact and Conclusions of Law in the ALJ Decision.

2. To the extent that Dr. Pennington is arguing that the ALJ gave too much weight to incarceration as an aggravating factor given that the sentence was the minimum permitted, Dr. Pennington should have articulated and supported this argument before the ALJ. Moreover, contrary to his claims that the judge sentenced him to the shortest incarceration possible under the sentencing guidelines, Dr. Pennington's sentencing transcript establishes that the range of sentences applicable to the offense was enhanced because Dr. Pennington had two prior convictions: one in 1994 for obtaining a controlled substance by fraud and deceit and one in 1997 for misdemeanor possession of controlled substances, for which he was still on probation at the time of the instant conviction. Sentencing Tr. at 3. If anything, the incarceration period thus conveyed in shorthand form some relevant and useful information bearing on trustworthiness.

3. These cases involve permissive exclusions but the same principle applies with even more force where the basis of the exclusion is one that Congress made mandatory. Clearly, the I.G. was not expected to await proof of instances of bad medical care by doctors convicted of felonies involving drug distribution in order to exercise discretion to determine what period of exclusion was needed to avert risk to federal programs and their patients.

4. Indeed, the sentencing transcript demonstrates the contrary. The judge expressly determined that no downward departure from the sentencing guidelines was justified by Dr. Pennington's drug addiction or "addictive personality." Id. at 14-26. No finding was thus made of reduced culpability despite the requests of Dr. Pennington's counsel.

 

CASE | DECISION | ANALYSIS | JUDGE | FOOTNOTES