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                              Michael W. Lawrence, DPM, DAB No. 2983 (2020)
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Michael W. Lawrence, DPM, DAB No. 2983 (2020)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Appellate Division





Michael W. Lawrence, DPM
Docket No. A-20-4Decision No. 2983January 6, 2020

        
              
    

      FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION
Petitioner Michael W. Lawrence, DPM appeals a decision by an Administrative Law Judge (ALJ) affirming the determination of the Inspector General (I.G.) to exclude him from participation in all federal health care programs for a statutory minimum five-year period under section 1128(a)(4) of the Social Security Act (Act).1
 *Michael W. Lawrence, DPM*, DAB CR5420 (2019) (ALJ Decision).  The Board affirms the ALJ Decision.
Legal Background
Section 1128(a)(4) of the Act provides that the Secretary of Health and Human Services “shall exclude” from participation in federal health care programs (as defined in section 1128B(f) of the Act) an individual who “has been convicted for an offense which occurred after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.”
An individual is “convicted” of a criminal offense “when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged[.]”  Act § 1128(i)(1).  An individual is also “convicted” “when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court[.]”  *Id.* § 1128(i)(3).  The mandatory minimum period of an exclusion imposed under section 1128(a) is five years.  *Id.* § 1128(c)(3)(B).
Page 2
An excluded individual may request a hearing before an ALJ, but only on the issues of whether the I.G. had a basis for the exclusion and whether an exclusion longer than the mandatory minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a).  A party dissatisfied with the ALJ’s decision may appeal it to the Board.  *Id*. § 1005.21.
Case Background
The factual background in this section is drawn from the ALJ Decision and the record of the ALJ proceedings.  We make no new factual findings.
Petitioner is a podiatrist in Tennessee.  I.G. Ex. 10, at 2.  In April 2011, a federal grand jury issued a 13-count indictment in the United States District Court for the Eastern District of Tennessee charging Petitioner with “knowingly and intentionally omitt[ing] material information from reports, records and documents required to be made and kept under [21 U.S.C. § 827 and 21 C.F.R. Part 1304], *i.e.* [Petitioner,] while a registrant under the Controlled Substances Act, did not maintain records of” Hydrocodone, a controlled substance, “which were received, delivered, and otherwise disposed of by” Petitioner, in violation of 21 U.S.C. §§ 827(a)(3) and 843(a)(4)(A), on each of 13 dates during the period from May 2006 through May 2008.  I.G. Ex. 7, at 1-2.
Petitioner pleaded guilty to count 13 (a violation of 21 U.S.C. §§ 827(a)(3) and 843(a)(4)(A) on May 12, 2008), stipulating to certain facts to “satisfy” two “offense elements”:  “a) That records were required by law to be kept of the events in question (i.e. receipt of controlled substances); and b) that [Petitioner] intentionally omitted material information from such reports or failed to make a report at all.”  I.G. Ex. 8, at 1-2.  The stipulated facts are as follows:
a) In June of 2009, the Drug Enforcement Administration (DEA) began an investigation of Michael W. Lawrence, D.P.M. predicated upon his excessive purchases of Hydrocodone, a Schedule 3 controlled substance, ascertained from DEA records.  On June 24, 2009, Dr. Lawrence admitted that he had purchased and distributed the Hydrocodone to unidentified recipients who were neither patients nor DEA registrants.  An inspection of Dr. Lawrence’s office on June 24, 2009, revealed that he had neither the drugs nor any accountability records of their distributions as required by law.
b) On September 18, 2009, a representative of Moore Medical in Farmington, Connecticut, revealed that their records reflected that Dr. Lawrence had represented to them that he purchased the Hydrocodone to donate it to “medical missions.”  During the time period of the indictment, Dr. Lawrence purchased considerable dosage units of
Page 3
Hydrocodone from Moore Medical according to their records. DEA’s records revealed that during this period Dr. Lawrence purchased Hydrocodone from other sources as well. One such instance is that charged in Count 13 of the Indictment, where Hydrocodone was ordered and received by Dr. Lawrence, and no record of same was made of this material fact by Dr. Lawrence as required by law.
*Id.* at 2-3.  In consideration of the guilty plea, the government agreed to move to dismiss the remaining counts.  *Id.* at 1.
On January 26, 2012, the district court accepted the guilty plea, entered a judgment of conviction on count 13, and dismissed the remaining counts.  I.G. Ex. 9, at 1.  The district court placed Petitioner on probation for three years and, as “special conditions of supervision,” placed him on home detention for three months and ordered him to perform 1,000 hours of community service.  *Id.* at 2-3.
On January 30, 2015, the I.G. issued a notice of exclusion stating that, based on the 2012 felony conviction, Petitioner was being excluded from Medicare, Medicaid, and all federal health care programs for five years under section 1128(a)(4) of the Act, effective 20 days from the date of the notice.  I.G. Ex. 5, at 1.  That notice also stated that an appeal of the I.G.’s determination had to be filed within 60 days of the date of receipt of the notice, which would be presumed to be five days after the date of the notice unless there was a reasonable showing to the contrary.  *Id.* at 4; 42 C.F.R. § 1005.2(c).
ALJ Proceedings and Decision
The ALJ proceedings began with Petitioner’s April 23, 2019 request for a hearing to challenge the I.G.’s January 30, 2015 notice of exclusion.  The ALJ held a telephone prehearing conference, in part, to address the issue of whether the 2019 appeal of the 2015 notice of exclusion had been timely filed.  After the conference, the ALJ dismissed the request for hearing as untimely filed.  May 23, 2019 order (citing 42 C.F.R. § 1005.2(e)(1)).  Later, with the ALJ’s permission, Petitioner requested reconsideration of the dismissal.  The parties submitted argument and evidence on the reconsideration request.  By order issued July 15, 2019, the ALJ vacated his May 23, 2019 order, concluding that Petitioner “made a reasonable showing that he did not receive the January 30, 2015 exclusion notice until April 2019” (ALJ Decision at 3) and permitting the appeal to proceed to its merits.2
Page 4
Petitioner then moved for summary judgment, asserting that the I.G. had “no material facts that support an exclusion” and that the I.G.’s “numerous . . . errors and mistakes” “prevented [him] from having due process” and, accordingly, that “all mention and record of exclusion” should be “stricken and the record expunged.”  Petitioner’s motion at 1.  The I.G. opposed the motion, stating, in part, that section 1128(a) of the Act “requires the I.G. to exclude individuals convicted of certain crimes” and that the I.G. “has no discretion” not to exclude under section 1128(a)(4) “an individual [who] is convicted of a felony related to the unlawful distribution or dispensing of a controlled substance.”  I.G.’s informal brief at 9.  The I.G. also argued that Petitioner has been afforded due process under the exclusion regulations.  *Id.* at 9-10.
The ALJ denied Petitioner’s motion, stating that he had no authority to disregard 42 C.F.R. § 1001.2002(b) under which an exclusion takes effect 20 days from the date of the exclusion notice.  ALJ Decision at 6 (citing 42 C.F.R. § 1005.4(c)(1)).3
 Petitioner, the ALJ stated, “is receiving his opportunity for a hearing in this proceeding.”  *Id.* at 7.  The ALJ then affirmed the I.G.’s determination to exclude Petitioner, based on the written record, without holding a hearing, since neither party had any witness testimony to offer and both indicated that an in-person hearing was not necessary.  *Id.* (citing I.G. Br. at 8; P. Br. at 2).  The ALJ set out the following “five essential elements necessary to support” an exclusion pursuant to section 1128(a)(4) and 42 C.F.R. § 1001.101(d)(1):
(1) the individual to be excluded must have been convicted of a criminal offense; (2) the criminal offense must have been a felony; (3) the felony conviction must have been for conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance; (4) the felonious conduct must have occurred after August 21, 1996; and (5) the individual to be excluded is or was a health care practitioner.
*Id.* at 7-8.  The ALJ then determined that each element was established, making the following findings of fact and conclusions of law:
Page 5
Petitioner pleaded guilty . . . to failing to maintain records according to the Controlled Substance[s] Act in violation of 21 U.S.C. §§ 827(a)(3) and 843(a)(4)(A), and the District Court entered a Judgment in a Criminal Case adjudging Petitioner guilty and sentencing him to home detention for three months.
	Petitioner was convicted of a criminal offense under [section 1128(a)(4)] because he pleaded guilty to violating 21 U.S.C. §§ 827(a)(3) and 843(a)(4)(A), and the District Court accepted that plea and entered judgment against him.
	Petitioner was convicted of a felony.
	Petitioner was convicted of a felony criminal offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
	The conduct for which Petitioner was convicted occurred after August 21, 1996.
	Petitioner is or has been a health care practitioner.
	Under [section 1128(a)(4)], Petitioner must be excluded from participation in all federal health care programs for five years under [section 1128(c)(3)(B)].*Id.* at 8, 9, 11 (bolding and italics in ALJ’s findings and conclusions removed).
Standard of Review
Our standard of review of an ALJ initial decision in an exclusion case is established by regulation.  We review a disputed issue of fact as to “whether the initial decision is supported by substantial evidence on the whole record.”  42 C.F.R. § 1005.21(h).  We review a disputed issue of law as to “whether the initial decision is erroneous.”  *Id*.
Analysis
Petitioner appears pro se before the Board4
 as he did before the ALJ.  In his notice of appeal (NA), he does not dispute the material facts found by the ALJ – that Petitioner, who was or is a health care practitioner, was convicted of a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance that occurred after August 21, 1996 – on which the ALJ affirmed the I.G.’s determination to exclude Petitioner for a mandatory minimum five years under section 1128(a)(4) of the Act.  Petitioner instead asserts that the ALJ’s decision is invalid because he was not afforded the full extent of process to which he was entitled.  As we explain below, the ALJ’s decision is correct and, accordingly, we affirm that decision.
Page 6
We first briefly discuss the I.G.’s notices to Petitioner as necessary to address Petitioner’s arguments about those notices.  By letter dated May 28, 2014, the I.G. notified Petitioner of its intent to exclude Petitioner under section 1128(**b**)(4) of the Act, based on adverse action taken by the state of Tennessee on Petitioner’s license to practice podiatric medicine.  I.G. Ex. 1, at 1.  That notice gave Petitioner 30 days to provide the I.G. any information Petitioner wanted the I.G. to consider before the I.G. determined whether to exclude Petitioner.  *Id.* at 2.  Petitioner received that notice and responded to it by letter dated June 22, 2014.  I.G. Ex. 2.
On July 23, 2014, the I.G. mailed Petitioner a notice “supersed[ing]” the May 28, 2014 notice, to the address to which the I.G. mailed the May 28, 2014 notice.  I.G. Ex. 3, at 1.  The July 23, 2014 notice stated that the I.G. was “required to exclude” Petitioner under section 1128(**a**) of the Act based on his conviction in the district court, that section 1128(c)(3)(B) of the Act requires a minimum exclusion period of five years, and that Petitioner could submit within 30 days any information and documentation he wanted the I.G. to consider before the I.G. made a final determination on exclusion.  *Id.* at 1-2.  The U.S. Postal Service returned the July 23, 2014 letter to the I.G. with the following information stamped on the envelope:  Return to Sender, Not Deliverable as Addressed, Unable to Forward.  I.G. Ex. 4; ALJ Decision at 4.  The I.G. mailed the January 30, 2015 exclusion notice to Petitioner at the same address.  I.G. Ex. 5; ALJ Decision at 4.
Petitioner received the July 23, 2014 notice and the January 30, 2015 notice of exclusion in April 2019, only after he filed a Freedom of Information Act request to the I.G. for a complete copy of his exclusion file in March 2019.  ALJ Decision at 4.  Petitioner then filed a request for hearing in April 2019.
Petitioner states that it was “an understandable error” for the I.G. to send the July 2014 notice to an “old” address.  NA at 2.  “What was not understandable,” Petitioner says, is that the I.G. did not identify an updated address for Petitioner when the letter was returned undelivered and sent the January 2015 notice of exclusion to the same address when the I.G. well knew that the address was no longer valid.  *Id.* at 2, 3.  Petitioner also states that the I.G. never considered his June 2014 response to the initial (May 2014) notice, which he says provided “information on why the exclusion should not be carried out.”  *Id.* at 1-2.  He also takes issue with the determination to exclude him because he was not given 30 days to respond to the second (July 2014) notice, which he did not receive until 2019.  He asserts that the deprivation of that opportunity “destroys” the I.G.’s argument that the exclusion was “mandatory.”  *Id.* at 2.  He maintains that the deprivation of the full extent of process due him, including the “reasonable notice and opportunity for a hearing” to which the ALJ stated Petitioner was entitled (ALJ Decision at 1), “invalidate[s]” the ALJ’s decision.  NA at 1.
Page 7
The I.G.’s May 2014 notice was a notice of intent to exclude Petitioner under a *permissive* exclusion statute, section 1128(**b**)(4), based on a state licensing authority’s action on Petitioner’s license to practice podiatric medicine.5
  *See* 42 C.F.R. § 1001.501 (exclusion based on revocation, suspension, loss, or surrender of license to provide health care).  The I.G. later determined, however, that it was required to exclude Petitioner under the *mandatory* exclusion statute, section 1128(**a**)(4), based on the 2012 felony conviction and accordingly issued its superseding July 2014 notice.  By its January 30, 2015 notice of exclusion, the I.G. again stated that section 1128(a)(4) required the I.G. to exclude Petitioner because he had been convicted of a qualifying felony offense and added that it was imposing an exclusion for the mandatory minimum five years.  Because the law mandated exclusion and the I.G. excluded Petitioner under that law, whether or not the I.G. considered Petitioner’s June 2014 response to the superseded May 2014 notice of intent to exclude under a permissive exclusion statute is not material to the section 1128(a)(4) exclusion.  Furthermore, because the I.G. determined to exclude Petitioner for the mandatory minimum five years, the I.G. was not required to send a notice that included language of the type in the July 2014 notice inviting a response to the exclusion.6
In the notice of appeal, Petitioner asserts that the I.G.’s failure to properly serve him with the notice of mandatory exclusion deprived him of the opportunity to “wage[] a vigorous defense” and is a basis to “expunge” the exclusion.  NA at 2, 3.  As the ALJ correctly explained, the redress afforded under the Act and regulations for the I.G.’s procedural actions was for the ALJ to give Petitioner a full opportunity to present his case on the section 1128(a)(4) exclusion and for the ALJ to review the merits of the appeal.  The result of that review is a factually and legally sound decision that correctly affirmed the section 1128(a)(4) exclusion and correctly stated that an ALJ must follow section 1001.2002(b), which states that an exclusion takes effect 20 days after the date of the exclusion notice.  As for the argument about the denial of reasonable notice and opportunity for a hearing under section 1128(f)(1) of the Act, Petitioner was given, and took, the opportunity to present his case to the ALJ, in writing, waiving his right to a hearing on the only issue remaining after the ALJ vacated his dismissal – whether a legal basis for exclusion exists.  *See*ALJ Decision at 7 (citing P. Br. at 2 (Petitioner’s informal brief, indicating “No” responses to “Do you believe that an in-person hearing is necessary to decide your case?” and “Do you have any testimony that you wish to offer at an in-
Page 8
person hearing?”)).  An ALJ may decide the case on the written submissions alone where, as here, the party who requested a hearing waives his right to a hearing.  42 C.F.R. § 1005.6(b)(5); *Olandis Moore*, DAB No. 2963, at 7 (2019).
Petitioner also asserts that his “violation” was merely a failure to maintain records on drugs to be used for medical missions.  NA at 2-3.  We construe this argument as a collateral attack on the conviction, which is prohibited by 42 C.F.R. § 1001.2007(d).  *See Delores L. Knight*, DAB No. 2945, at 9 (2019) (quoting *Peter J. Edmonson*, DAB No. 1330, at 4 (1992), and stating that “the regulation’s prohibition on collateral attacks recognizes that it is ‘the fact of the conviction which causes the exclusion’” and that “‘[t]he law does not permit the Secretary to look behind the conviction’”); *Moore* at 6 (and cited cases).
Conclusion
The ALJ and the Board must follow the federal exclusion laws and regulations.  42 C.F.R. § 1005.4(c)(1).  In accordance with those authorities, a mandatory minimum five-year exclusion *must*be imposed where, as here, an individual who is or has been a health care practitioner has been convicted of a felony offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance that occurred after August 21, 1996.  Act § 1128(a)(4); 42 C.F.R. § 1001.101(d).  Because the ALJ correctly affirmed the I.G.’s determination to exclude Petitioner, we affirm his decision.


          /s/
        Christopher S. Randolph

                      Board Member
          /s/
        Constance B. Tobias

                      Board Member
          /s/
        Susan S. Yim

                      Presiding Board Member
      1. The current version of the Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.htm. Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section. Also, a cross-reference table for the Act and the United States Code can be found at https://www.ssa.gov/OP_Home/comp2/G-APP-H.html. back to note 1
                      2. Petitioner’s arguments before the Board chiefly concern the I.G.’s notices to Petitioner pre-dating the 2015 notice of exclusion and when Petitioner learned about the 2015 determination to exclude him. The ALJ’s decision (pages 2-6) and July 15, 2019 order discussed these matters in some detail. We need not recite the case history here, but will address it later as appropriate to respond to Petitioner’s arguments on appeal. back to note 2
                      3. The ALJ noted that “[t]here is statutory support for the proposition that the exclusion was not effective until Petitioner received the exclusion notice” but that “such a conclusion would be at odds with the regulations” he was required to follow. ALJ Decision at 6 n.2 (citing Act § 1128(c)(1)). In any case, the ALJ continued, Petitioner did not “identify any harm he has suffered by the substantial delay in learning about the exclusion.” Id. The ALJ further noted that “the consequence of concluding that the five-year exclusion was not effective until Petitioner received a copy of the exclusion notice in April 2019, is that Petitioner would not be eligible for reinstatement until 2024,” a result that “would cause Petitioner significant harm, in that he would be banned from participating in health care programs at a time when he now seeks employment requiring him to be able to so participate.” Id. at 6-7 n.2. back to note 3
                      4. Petitioner appended documents to his notice of appeal. The first item is the first page of the ALJ Decision. The rest are copies of items of record as I.G.’s exhibits 1, 3, and 4 and Petitioner’s exhibit 5, page 1 (submitted with Petitioner’s August 2019 response brief). In general, the Board decides appeals of ALJ decisions on I.G. exclusions based on the record developed during the ALJ proceedings. See Rosa Velia Serrano, DAB No. 2923, at 5-6 (2019), recon. denied, Ruling No. 2019-2 (Apr. 25, 2019); 42 C.F.R. § 1005.21(f). Records duplicating items admitted into the record by the ALJ need not be submitted to the Board. back to note 4
                      5. Nothing in this decision should be construed as a comment or opinion on the validity of or merit to the I.G.’s initial determination to consider excluding Petitioner under section 1128(b)(4). We discuss the I.G.’s May 2014 notice only as necessary to address Petitioner’s arguments, and the only question before us is whether the ALJ’s decision affirming the I.G.’s exclusion of Petitioner under section 1128(a)(4) is sound. It is. back to note 5
                      6. The I.G. is required to send a notice of intent to exclude only for an exclusion to be in effect for longer than the required minimum period. ALJ Decision at 6-7 (citing 42 C.F.R. § 1001.2001(a)). Because the I.G. determined to exclude Petitioner for the minimum five years as required under section 1128(a)(4), the I.G. was not required to send a notice that included language of the type in the July 2014 notice inviting a response. back to note 6 Back to top
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