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# Nicholas John Capos, Jr., MD, DAB CR5255 (2019)

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## Department of Health and Human Services     DEPARTMENTAL APPEALS BOARD          Civil Remedies Division        

## Nicholas John Capos, Jr., MD,	(OI File No. H-18-40339-9),	Petitioner,	v.	The Inspector General

### Docket No. C-18-1181Decision No. CR5255February 25, 2019

### DECISION

Petitioner, Nicholas John Capos, Jr., was a physician, licensed in the State of California, who specialized in cardiology.  He prescribed controlled substances, including oxycodone, hydrocodone, OxyContin, and methadone to individuals who were willing to pay him $100 per prescription.  He was indicted and pled guilty to five felony counts of distribution and dispensation of oxycodone.  Based on this conviction, the Inspector General (IG) has excluded him for 13 years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(4) of the Social Security Act (Act).  Petitioner concedes that he must be excluded for a minimum period of five years but challenges the length of the exclusion beyond the five years.  For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 13-year exclusion falls within a reasonable range.

### Background

By letter dated May 31, 2018, the IG notified Petitioner Capos that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a period of 15 years, because he had been convicted of a criminal offense related to the unlawful

**Page 2**

manufacture, distribution, prescription, or dispensing of a controlled substance.  The letter explained that section 1128(a)(4) of the Act authorizes the exclusion.  IG Exhibit (Ex.) 1.

Petitioner appealed.  While this appeal was pending, the IG lowered his period of exclusion to 13 years and so informed Petitioner in a letter dated November 15, 2018.  IG Ex. 8.

Petitioner concedes that he was convicted and is subject to exclusion.  *See* Order and Schedule for Filing Briefs and Documentary Evidence at 3 (October 4, 2018).

Each party submitted a written argument (IG Br.; P. Br.).  The IG also submitted eight exhibits.  In the absence of any other objections, I admit into evidence IG Exs. 1-8.

I instructed the parties to indicate in their briefs whether an in-person hearing would be necessary and, if so, to explain why, identify any proposed witness, and “submit witness testimony in the form of an affidavit or a written sworn declaration.”  Order and Schedule at 4 (¶ 7).  The IG indicates that an in-person hearing is not necessary.  IG Br. at 8.  Petitioner did not respond.  In any event, neither party has listed any witnesses, so an in-person hearing would serve no purpose.  This matter can therefore be resolved on the written record.

### Issue

Because the parties agree that the IG has a basis upon which to exclude Petitioner from program participation, the sole issue before me is whether the length of the exclusion (13 years) is reasonable.  42 C.F.R. § 1001.2007.

### Discussion

Section 1128(a)(4) mandates that the Secretary exclude from program participation any individual or entity convicted of a felony “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”  *See* 42 C.F.R. § 1001.101(d).

Petitioner Capos was a physician, licensed in California, who specialized in cardiology (not pain management).  Yet he often prescribed controlled substances to patients, charging them $100 per prescription.  IG Ex. 3 at 11.  The prescriptions served no legitimate medical purpose.  Petitioner did not properly examine these patients; he ignored obvious indications that they were abusing or selling the drugs; he prescribed quantities in excess of human tolerance; and he accepted payments on a per-prescription basis.  IG Ex. 3 at 12.

**Page 3**

He was arrested and, on January 30, 2014, charged with multiple felony counts of conspiracy to distribute, dispense, and possess oxycodone and distribution and dispensing of oxycodone.  IG Ex. 2.  On May 5, 2016, he pled guilty to five felony counts of distribution and dispensing of oxycodone.  IG Ex. 3.  On February 22, 2018, the district court for the Eastern District of California accepted his plea and entered judgment against him.  IG Ex. 4.  The court sentenced Petitioner Capos to 52 months in prison, followed by 36 months of supervised release, and ordered him to pay a fine of $12,500 plus a $500 assessment.  IG Ex. 4 at 2, 3, 6.

Petitioner was thus convicted of a felony relating to the unlawful distribution, prescription, or dispensing of a controlled substance and is subject to exclusion under section 1128(a)(4).

***Based on three aggravating factors and no mitigating factors, the 13-year exclusion is reasonable.1***

I now consider whether the length of the exclusion, beyond five years, falls within a reasonable range.

An exclusion under section 1128(a)(4) must be for a minimum period of five years.  Act, § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).  Federal regulations set forth criteria for lengthening exclusions beyond the five-year minimum.  42 C.F.R. § 1001.102(b).  Evidence that does not pertain to one of the aggravating or mitigating factors (42 C.F.R. § 1001.102(c)) listed in the regulations may not be used to decide whether an exclusion of a particular length is reasonable.

Among the factors that may serve as bases for lengthening the period of exclusion are the three that the IG relies on in this case:  1) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; 2) the sentence imposed by the court included incarceration; and 3) the convicted individual has been the subject of any other adverse action by any federal, state, or local government or board, if the adverse action is based on the same set of circumstances that serves as the basis for the exclusion.  42 C.F.R. § 1001.102(b).  The presence of an aggravating factor or factors, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.

**Length of criminal conduct (42 C.F.R. § 1001.102(b)(2))**.  Petitioner admitted that he began unlawfully prescribing controlled substances as early as December 10, 2010, when he prescribed 80 milligrams (240 pills) of OxyContin, and that he continued with the illegal conduct through September 7, 2012, when he prescribed 300 pills at 30 milligrams

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of oxycodone each to two patients.  IG Ex. 3 at 11-12.  December 10, 2010 through September 7, 2012, is almost two years, and the IG appropriately applied this aggravating factor when he increased the period of exclusion.

**Incarceration (42 C.F.R. § 1001.102(b)(5))**.  The criminal court sentenced Petitioner to a substantial period of incarceration – 52 months (four years and four months).  IG Ex. 4 at 2.  While any period of incarceration justifies increasing the period of exclusion, the Departmental Appeals Board has repeatedly held that longer periods of incarceration are relevant in determining whether a period of exclusion is reasonable.  *Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D.*, DAB No. 2635 at 6 (2015).  Generally, the longer the jail time, the longer the exclusion, because a lengthy sentence evidences a more serious offense.  *See Jeremy Robinson*, DAB No. 1905 (2004) (characterizing a nine-month incarceration as “relatively substantial”); *Jason Hollady, M.D.*, DAB No. 1855 at 12 (2002); *Stacy Ann Battle, D.D.S.*, DAB No. 1843 (2002) (finding that four months in a halfway house, followed by four months home confinement justifies lengthening the period of exclusion); *Brenda Mills, M.D*., DAB CR1461, *aff’d*, DAB No. 2061 (2007) (finding that six months home confinement justifies increase in length of exclusion).  That the court here sentenced Petitioner to such a long period of incarceration underscores the seriousness of his crimes and justifies significantly increasing his period of exclusion beyond the minimum five years.

**Other adverse actions (42 C.F.R. § 1001.102(b)(9))**.  In charges that paralleled those brought against Petitioner in the criminal proceeding, the Executive Director of the Medical Board of California accused Petitioner of gross negligence and unprofessional conduct – specifically, that, without medical justification, he wrote prescriptions for excessive amounts of controlled substances.  The Executive Director asked the Medical Board to revoke or suspend Petitioner’s medical license.  IG Ex. 7 at 8-42.  In a Stipulation and Order dated March 4, 2016, Petitioner responded to the charges by surrendering his medical license.  IG Ex. 7 at 1-6.

Based on the loss of his medical license, the California Department of Health Care Services suspended Petitioner’s participation in the State Medicaid program (Medi-Cal).  IG Ex. 6.

**Mitigating factor**.  The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $1,500; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Petitioner bears the burden of proving any mitigating factor by a preponderance of the evidence.  42 C.F.R. § 1005.15(c); Order

**Page 5**

and Schedule for Filing Briefs and Documentary Evidence at 3; *Barry D. Garfinkel, M.D.*, DAB No. 1572 at 8 (1996).

Petitioner claims that he cooperated with law enforcement, although he concedes that the other elements necessary to establish mitigation are not satisfied:  his cooperation did not result in others being convicted or excluded; it did not lead to additional investigations or civil money penalties.  P. Br.

Thus, Petitioner has not met his burden of establishing a mitigating factor.

Petitioner was convicted of serious felonies.  His criminal conduct lasted for well over a year and warranted a lengthy prison sentence.  He lost his medical license, and, as a result, was excluded from participating in the California Medicaid program.  I find that his criminal behavior and the period of his incarceration demonstrate that he is untrustworthy and justify the 13‐year exclusion.

### Conclusion

The IG properly excluded Petitioner Capos from participating in Medicare, Medicaid, and other federal health care programs.  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  *Joann Fletcher Cash*, DAB No. 1725 at 7 (2000), *citing* 57 Fed. Reg. 3298, 3321 (1992).  I find that the 13‐year exclusion falls within a reasonable range.

Carolyn Cozad HughesAdministrative Law Judge

                                              1. I make this one finding of fact/conclusion of law. 
                            - back to note 1