Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of:
Barry D. Garfinkel, M.D., Date: November 9, 1995
Petitioner,

Docket No. C-95-042
Decision No. CR400

-v-

The Inspector General.

DECISION

On October 19, 1994, the Inspector General (I.G.)
notified Petitioner, Barry D. Garfinkel, M.D., that he
was being excluded from participating in the Medicare,
Medicaid, Maternal and Child Health Services Block Grant
and Block Grants to States for Social Services programs
for three years.' The I.G. told Petitioner that he was
being excluded under section 1128(b)(1) of the Social
Security Act (Act) based on his conviction of a criminal
offense related to fraud, theft, embezzlement, breach of
fiduciary responsibility, or other financial misconduct.

Petitioner requested a hearing. Initially, the case was
assigned to Administrative Law Judge Joseph K. Riotto for
a hearing and a decision. On January 17, 1995, the case
was reassigned to me. I held a telephone prehearing
conference on January 19, 1995. During the conference, I
set a hearing date of April 4, 1995. On March 31, 1995,
the parties requested that I cancel the hearing to give
them time to work out a settlement. I granted the
parties’ request.

During a telephone prehearing conference on May 2, 1995,
the parties informed me that, although the I.G. had

1 Unless the context indicates otherwise, in this
decision I use the term "Medicaid" to represent all
programs other than Medicare from which Petitioner was
excluded, one of which is the Medicaid program in the
State of Minnesota. See Transcript at (Tr.) 52.
2

waived Petitioner's exclusion as to certain northern
Minnesota counties, the I.G.'s waiver had not
accomplished a settlement of the case.’ Therefore, on
July 24, 1995, I held a hearing in this case in St. Paul,
Minnesota. Following the hearing, both parties submitted
posthearing briefs and responses.

I have considered the evidence’, applicable law and
regulations, and the parties' arguments. I conclude that
the I.G. had authority to exclude Petitioner pursuant to

2? In response to a request made by the State of
Minnesota, the I.G. waived Petitioner's exclusion in the
Minnesota counties of Mahnomen, Becker, Clearwater,
Norman, Polk, Marshall, Red Lake and Kittson.
Petitioner's Brief (P. Br.) at 5.

3 Petitioner argues that I should not have
admitted I.G. Ex. 2, the indictment in Petitioner's
criminal case, as an exhibit in this case. P. Br. at 22
- 23. Specifically, Petitioner argues that he was
convicted of only five of the 25 counts brought against
him, that the jury returned general verdicts, that there
is no way to determine which allegations in the
indictment the jury found to be true, that Petitioner
never agreed to the accuracy of the indictment or the
allegations in it, and that Petitioner could have argued
on appeal that the jury verdict was inconsistent with the
indictment. Petitioner's arguments do not convince me
that I should have rejected I.G. Ex. 2. What Petitioner
might have argued on appeal is irrelevant in this
proceeding. Extrinsic evidence is admitted routinely in
administrative adjudication at the Departmental Appeals
Board to explain the facts surrounding a conviction.

Bruce Lindberg, D.C., DAB 1280 (1993); Norman C. Barber,
D.D.S., DAB CR123 (1991); Gene Blankenship, DAB CR42

(1989). Here, Petitioner was convicted of five counts of
an indictment, each of which incorporates by reference
the underlying facts set forth in the 46-paragraph
introduction to all counts of Petitioner's indictment,
which information is included also in published decisions
regarding Petitioner's case. See I.G. Ex. 2; United
States v. Garfinkel, 29 F.3d 451 (8th Cir. 1994); United

States v. Garfinkel, 29 F.3d 1253 (8th Cir. 1994); See

also United States v. Garfinkel, 822 F. Supp. 1457 (D.
Minn. 1993). As I assured the parties I would do (Tr.
7), I have analyzed I.G. Ex. 2 in conjunction with
Petitioner's convictions, as well as with the other
evidence. I have disregarded matters that were not
proven at trial or were not relevant to the issues before
me.
3

section 1128(b)(1) of the Act. However, I conclude also
that Petitioner has proved a mitigating factor, in that,
as a result of his exclusion, no alternative sources of
the type of health care items or services furnished by
Petitioner are available. Based on the evidence relevant
to this mitigating factor, I conclude that the three-year
exclusion the I.G. imposed against Petitioner is
excessive. Finally, I conclude that the remedial
considerations of the Act will best be served in this
case by modifying the exclusion to end upon the date of
issuance of this Decision.

I. indings \d_conc ions of W

Petitioner does not dispute that he was convicted of a
criminal offense. However, Petitioner does dispute that
his conviction falls within the ambit of section
1128(b)(1) of the Act. Specifically, he argues that he
was not convicted of a criminal offense in connection
with the delivery of a health care item or service.‘
Further, Petitioner asserts that the three-year exclusion
the I.G. imposed against him is unreasonable in light of
the presence of the mitigating factor in his case.
Finally, Petitioner requests that, if I find a basis for
his exclusion, the exclusion should be reduced to the
length of time he has been excluded already.

The issues in this case are thus: 1) whether the I.G.
had a basis upon which to exclude Petitioner; 2) whether,
due to Petitioner's exclusion, alternative sources of the
type of health care items or services furnished by
Petitioner are not available; and 3) whether the length
of the exclusion the I.G. imposed against Petitioner is
reasonable.

In deciding to modify Petitioner's exclusion to end as of
the date of issuance of this Decision, I make the
following findings of fact and conclusions of law. In my
findings and conclusions, I cite to relevant parts of the
Discussion in which I discuss my findings and conclusions
in detail.

1. Petitioner was convicted of criminal offenses
relating to fraud. Pages 5 - 8.

4 petitioner asserts also that the Double
Jeopardy clause of the United States Constitution
prohibits the I.G. from excluding him. See infra at 13.
4

2. Petitioner's conviction of criminal offenses
relating to fraud was in connection with the delivery of
a health care item or service. Pages 9 - 11.

3. The I.G. was authorized to exclude Petitioner.
Pages 8 - 11.

4. An individual who is excluded pursuant to
section 1128(b)(1) of the Act should be excluded for
three years, unless the enumerated aggravating or
mitigating factors exist and warrant lengthening or
shortening the exclusion. Pages 8 - 9.

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. Pages 14 - 25.

6. In evaluating the reasonableness of a three-year
exclusion, I must balance the government's interest in
protecting Medicare and Medicaid and the programs'
beneficiaries and recipients from untrustworthy
providers, against the competing government interest of
ensuring that beneficiaries and recipients will not be
deprived of needed health care as a result of a
provider's exclusion. Pages 8 - 9.

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. Pages 14 - 29.

8. The I.G. may offset the impact of a mitigating
factor by proving the presence of aggravating factors.
Pages 8 - 9.

9. The I.G. proved the presence of an aggravating
factor, in that the acts resulting in Petitioner's
conviction, or similar acts, resulted in a financial loss
of $1500 or more. Page 25.

10. The I.G. proved the presence of a second
aggravating factor, in that the acts resulting in
Petitioner's conviction, or similar acts, were committed
over a period of one year or more. Page 25.

11. The I.G. proved the presence of a third
aggravating factor, in that the sentence imposed by the
court included incarceration. Page 25.

12. Weighing the three aggravating factors
established by the I.G. and the one mitigating factor
5

established by Petitioner, I conclude that the three-year
exclusion imposed against Petitioner is excessive. Pages
26 ~ 30.

13. The remedial considerations of the Act are
served by modifying the exclusion to end upon the date of
issuance of this Decision. Pages 26 - 30.

II. Discussion
A. Petitior 's imi nse

On June 8, 1993, Petitioner was convicted of three counts
of making false statements in violation of 18 U.S.C. §
1001 and two counts of mail fraud in violation of 18
U.S.C. § 1341. I.G. Exhibit (Ex.) 1; Petitioner's Brief
(P. Br.) at 1, 3 - 4. At the time he committed these
criminal offenses, Petitioner, a psychiatrist, was the
Director of the Division of Child and Adolescent
Psychiatry at the University of Minnesota. P. Ex. 1 at

United States v. Garfinkel, 29 F.3d 1253, 1254 (8th
cir 1994). In this position, Petitioner was responsible
for teaching, research, and patient care. Transcript at
(Tr.) 71. Petitioner's convictions were based on
criminal offenses he committed as the chief investigator
of a drug study funded by the pharmaceutical company
CIBAGETCY rece (CIBA-GEIGY). I.G. Exs. 1, 2;

Garfinkel, 29 F.3d at 1254.

CIBA-GEIGY commissioned the drug study to comply with
Food and Drug Administration (FDA) regulations. FDA must
approve the safety and effectiveness of new drugs before
they are made available to the general public. To obtain
FDA approval, pharmaceutical companies such as CIBA-GEIGY
are required to submit an investigational new drug
application with FDA. Prior to commencing a clinical
study of an experimental drug, a pharmaceutical company
must provide FDA with information on the proposed
investigation, including a detailed study "protocol."
Research investigators then compile, through procedures
mandated by the protocols, the data a pharmaceutical
company must file with FDA in order for FDA to determine
whether a drug is safe and effective. I.G. Ex. 2;
Garfinkel, 29 F.3rd at 1253 - 1255.

CIBA-GEIGY proposed to FDA to study the drug Anafranil as
a potential therapy for patients suffering from
obsessive-compulsive disorder (OCD). I.G. Ex. 2;
Garfinkel, 29 F.3d at 1254. In 1986, FDA granted CIBA-
GEIGY permission to conduct a clinical study of the
safety and effectiveness of Anafranil for the treatment
6

of children and adolescents with OCD. The study was
designated as Protocol 64. I.G. Ex. 2 at 4. The first
part of Protocol 64 was a double-blind study, in which
neither the investigator nor the patient knew whether the
patient was receiving Anafranil or a placebo. I.G. Ex. 2
at 5. This part of the study lasted 10 or 11 weeks.

I.G. Ex. 2 at 5; Garfinkel, 29 F.3rd at 1254. Data
intended to indicate the safety and effectiveness of
Anafranil were to be collected through weekly patient
visits which included the completion of psychiatric
rating scales and physical examinations. This part of
the study was followed by a year long extension protocol,
during which certain patients were permitted to receive
Anafranil on an open-label basis, in which both the
investigator and the patient knew Anafranil was being
administered. The extension protocol required also
regular patient visits with the investigator, as well as
that the investigator conduct the physical and
psychiatric evaluations required by Protocol 64. I.G.
Ex. 2 at 5 - 6, Garfinkel, 29 F.3d at 1255.

Investigators were required to keep detailed records of
patient visits and were given patient report forms (PRFs)
to fill out for each visit. The PRFs tracked the tests
required by the protocol for each visit and detailed the
information the investigators were to provide concerning
physical and psychiatric observations. At the bottom of
each page was a signature line for the investigator
making the observation or conducting the test. The
investigator was to submit the completed PRF forms to
CIBA-GEIGY at the end of the study, and CIBA-GEIGY was
required to compile the data and to submit the compiled
data to the FDA. I.G. Ex. 2 at 5 - 7.

In approximately June 1987, FDA granted CIBA-GEIGY
permission to conduct a larger open-label study of
Anafranil, designated Protocol 62, to provide CIBA-GEIGY
with a broader base of information regarding the safety
of the drug and to make Anafranil available to more OCD
patients. I.G. Ex. 2 at 8 - 9; Garfinkel, 29 F.3rd at
1255. Protocol 62 set a schedule of study visits,
including a statement of the physical and psychiatric
evaluations which were to take place at each visit and
the requirement that investigators complete PRFs for each
visit. I.G. Ex. 2 at 9.

Between 1986 and 1989, Petitioner was retained by CIBA-
GEIGY as the chief investigator of the Anafranil study at
the University of Minnesota.’ Prior to beginning the
Anafranil study, CIBA-GEIGY held a training session for
investigators. Garfinkel, 29 F.3d at 1255. There,
Anafranil investigators such as Petitioner received
instruction regarding the study protocol and required
methodology, and training in the specific psychiatric
review techniques required by the protocol. The
investigators received also specific instructions
regarding completion of PRFs. Using the PRFs, each
investigator specifically was made aware what data must
be collected during each patient visit. I.G. Ex. 2;
Garfinkel, 29 F.3d at 1255.

In February 1989, the study coordinator at the University
of Minnesota filed a complaint with the University
against Petitioner. This complaint led to investigations
by CIBA-GEIGY and the FDA which, eventually, led to
Petitioner's indictment. The study coordinator
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. Garfinkel, 29 F.3d at
1255; I.G. Ex. 2.

Petitioner was indicted on 19 counts of violating the
False Statements Act, 18 U.S.C. § 1001, which prohibits
the intentional making of a false statement in a matter
within the jurisdiction of the government. Specifically,
following a jury trial, Petitioner was found guilty of
counts 5, 21, and 23 of the Indictment, which counts
charged Petitioner with falsely representing, through his
signatures on PRFs, that he had personally conducted
patient visits on January 29, 1988, September 6, 1988,
and September 20, 1988. Garfinkel, 29 F.3d at 1255 -
1256; I.G. Ex. 1 at 1, 2 at 16. Petitioner was indicted
also on four counts of mail fraud, 18 U.S.C. § 1341, and
convicted on two, Counts 2 and 3 of the Indictment.
Garfinkel, 29 F.3d at 1258; I.G. Ex. 1 at 1. These two
counts involved November 18, 1988 and March 29, 1989
mailings. I.G. Ex. 2 at 15. One count was based upon a
letter to CIBA-GEIGY in which Petitioner admitted to
prescribing concomitant medications in violation of
protocol, but falsely represented that one of the
prohibited medications had been approved by a CIBA-GEIGY

5 CIBA-GEIGY was conducting research into
Anafranil at four other sites also. I.G. Ex. 2 at 7;
Garfinkel, 29 F.3d at 1254 n.3.
8

official. Garfinkel, 29 F.3d at 1260. Based on this
conviction, Petitioner was: sentenced to six months’
imprisonment (with work release privileges), and three
years of supervised release; fined $25,000; assessed $250
and the costs of his imprisonment and supervision; and
ordered to make restitution to CIBA-GEIGY in the amount
of $170,394. I.G. Ex. 1.

As a result of Petitioner's conviction, Petitioner and
the Minnesota Board of Medical Practice (Minnesota Board)
stipulated that the Minnesota Board would stay suspension
of Petitioner's medical license if Petitioner, among
other things: served 1000 hours of clinical service at a
site selected by the Minnesota Board; and observed a
life-time prohibition from participating as an
investigator in a drug research project. I.G. Ex. 4.

B. overni we

The I.G. imposed an exclusion against Petitioner pursuant
to section 1128(b)(1) of the Act. This section permits
the exclusion from Medicare and Medicaid of individuals
who have been convicted, 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. Act,
section 1128(b) (1).

Section 1128 of the Act is a remedial statute. Congress
intended that the Act be applied to protect both the
integrity of federally-funded health care programs and
the welfare of the programs' beneficiaries and
recipients, from individuals and entities who have been
shown to be untrustworthy. Exclusions imposed pursuant
to section 1128 have been found reasonable only if they
are consistent with the Act's remedial purpose. Robert
Matesic, R.Ph, d/b/a Northway Pharmacy, DAB 1327 at 7 - 8
(1992); Bali $. Reddy, DAB CR394 at 3 (1995); Dr. Abdul
Abassi, DAB CR390 at 3 (1995); Gary E. Wolfe, D.O., DAB
CR395 at 5 (1995).

Regulations published originally in January 1992 (42
C.F.R. Part 1001) implement the I.G.'s authority to
exclude an individual for reasons which include his
conviction of a criminal offense relating to fraud,
theft, embezzlement, breach of fiduciary responsibility,
or.other financial misconduct committed in connection
with the delivery of a health care item or service. 42
C.F.R. § 1001.201(a). The regulation codified at 42
9

c.F.R. § 1001.201 establishes also the criteria by which
the length of exclusions imposed pursuant to section 1128
are to be evaluated. It states that, in the absence of
certain enumerated aggravating or mitigating factors, the
length of the individual's exclusion should be set at
three years. 42 C.F.R. § 1001.201(b); Reddy, DAB CR394
at 4. As a consequence, I am authorized to use only the
criteria of the three-year benchmark period and those
aggravating and mitigating factors specified in the
regulation in deciding whether a given period of
exclusion is reasonably necessary to protect the
integrity of federally-financed health care programs and
the welfare of the programs' beneficiaries and
recipients.

An exclusion must not be punitive. It must comport with
the Act's remedial purpose. The presence of aggravating
or mitigating factors in a case does not alone establish
the reasonableness of any particular exclusion period.
The regulations contain no formula for assigning weight
to aggravating or mitigating factors once their presence
is established. Therefore, in deciding the
reasonableness of a particular period of exclusion, I
must analyze the evidence relevant to those mitigating or
aggravating factors present in the case and assign weight
to such evidence in accordance with the remedial purpose
of the Act.

Cc. Basis for Exclusion

1. tioner's convicti or fraud e

connected to a health care item or service.

As a basis for the Petitioner's exclusion in this case,
section 1128(b) (1) requires only that Petitioner: a) be
convicted; b) in connection with the delivery of a health
care item or service; c) of a criminal offense relating
to fraud. The implementing regulation adds that "[ij]n
connection with the delivery of any health care item or
service" includes the performance of management or
administrative services relating to the delivery of such
items or services. 42 C.F.R. § 1001.201(a).

Petitioner admits that he was convicted of criminal
offenses and that they relate to fraud. P. Br. at 1 -
4. However, Petitioner asserts that his convictions were
not in connection with the delivery of a health care item
or service and that the I.G. thus lacks authority to
exclude him. P. Br. at 8. Specifically, Petitioner
argues that his fraud convictions relate to his
10

scientific research, not to his practice of medicine. P.
Br. at 8 - 9; Petitioner's Reply Brief (P. R. Br.) at 2 -
3.

In making his assertion, Petitioner has taken an overly
narrow view of what is "in connection with the delivery
of a health care item or service." Effectively,
Petitioner is maintaining that the I.G. could exclude him
only if his criminal offenses had occurred within the
ambit of his direct provision of psychiatric services to
his patients, not within the ambit of his scientific
research. I disagree. A provider's conviction need only
be "in connection with" health care delivery. See
Chander Kachoria, R.Ph., DAB 1380 at 4 (1993). Neither
the Act nor the regulation requires a physician/patient
relationship, and the individual need not have been
indicted or convicted under a statute which refers
specifically to health care.

Here, the very nature of the scientific research
Petitioner undertook was connected to the delivery of a
health care item or service. The entire purpose of the
Anafranil study was to determine the efficacy and safety
of a drug which CIBA-GEIGY wished to market as a
medication to treat a mental disorder or illness. CIBA-
GEIGY was investigating Anafranil as a treatment for OCD,
and CIBA-GEIGY was utilizing Petitioner to test
Anafranil's safety and effectiveness on individuals
suffering from OCD. The protocol Petitioner utilized
necessarily involved the provision of Anafranil’ to
individuals suffering from the mental disorder or illness
of OCD. The protocol required Petitioner and other
investigators to conduct physical and psychiatric
examinations of individuals (health care services) in
order to ascertain the effect of Anafranil on their OCD.

In addition, Petitioner's failure to personally conduct
certain patient visits in order to report his physical
and psychological observations of patients was a material
element of his convictions under Counts 5, 21, and 23 of
the indictment. Garfinkel, 29 F.3d at 1255 - 1256; I.G.
Ex. 2 at 5 - 7. The fact that Petitioner had prescribed
concomitant medications (also a health care item) to
patients in the Anafranil study was also a material

6 only in Protocol 64 would a placebo have been
used.
11

element of his conviction on Count 3 of the indictment.”
Garfinkel, 29 F.3d at 1259 - 1260. In the context of
this case, it is immaterial whether, in providing or
failing to provide these health care items or services,
Petitioner used his special skills as a psychiatrist, or
whether Petitioner had the medical discretion to provide
alternative health care services to the test patients, or
whether Petitioner was required to follow a set protocol.
P. Br. at 8 - 12; P. R. Br. at 2 - 3.

Accordingly, I conclude that Petitioner's conviction was
in connection with the delivery of a health care item or
service.

2. Petitioner was not convicted of fraud with
es) to issi in a
operat. or financed in wi or_in

State vernme e .

The I.G. asserts as an alternative basis for excluding
Petitioner that his convictions were with respect to acts
and omissions in a program operated by FDA, a federal
government agency. Specifically, the I.G. argues that:
FDA regulates the testing of new drugs; FDA approved
CIBA-GEIGY's proposed Anafranil testing and Protocol 64,
the extended protocol, and Protocol 62; FDA's regulations
governed Petitioner's participation in the testing; and
Petitioner's convictions resulted from his acts and
omissions in the Anafranil study, which was carried out
under FDA auspices for regulating the testing of
investigational new drugs. I.G. Brief (Br.) at 10 - 11.
I am not persuaded by the I.G.'s argument.

In order to conclude that Petitioner's conviction was

with respect to acts and omissions in a program operated
by the FDA, I would need to find that every research

project in the country which is evaluating the safety and
effectiveness of a new drug for FDA approval is a program
operated by the federal government simply because the FDA
regulates the process. This conclusion is over-broad and
would require a distorted reading of the FDA regulations

7 The I.G. argues that Petitioner's actions
“demonstrate that he was capable of prescribing
prohibited medications ...." I.G. Reply Brief at 5. The
term "prohibited medications" used by the I.G. is
misleading. There is no evidence that Petitioner was
prohibited from prescribing such medications as a
physician. Instead, it is the research protocol that did
not provide for the prescription of these medications.
12

cited by the I.G.. Moreover, in ordinary usage, the word
"operate" means to have control. I find inadequate
evidence of control by the FDA in this case to support
the I.G.'s argument that the FDA operated the Anafranil
study.

CIBA-GEIGY is a private company that manufactures
pharmaceutical products. I.G. Ex. 2 at 1. The FDA isa
federal regulatory agency with the authority to approve
or disapprove the safety and effectiveness of new drugs
before they are made available to the general public.
I.G. Ex. 2 at 2. Thus, in order to market Anafranil,
CIBA-GEIGY had to prove to the FDA that Anafranil was
safe and effective. The FDA did not suggest, plan,
initiate, or require the study of Anafranil. The FDA did
not prepare the investigation plan or protocol for
studying Anafranil's safety and effectiveness. Nor did
the FDA seek out CIBA-GEIGY or any other entity to
conduct the study. CIBA-GEIGY, a private company,
contracted with the University of Minnesota, employing
Petitioner as the chief investigator, to carry out a
study on the safety and effectiveness of Anafranil. I.G.
Ex. 2 at 8. There is no evidence that the involvement of
the University of Minnesota, or Petitioner, in the
Anafranil study was at the FDA's suggestion or
insistence. CIBA-GEIGY, not the FDA or any other
federal, State, or local agency, paid for the study. As
held by the judge during Petitioner's sentencing
proceedings, CIBA-GEIGY was the only victim of
Petitioner's fraud. P. Ex. 2 at 29. Even though the FDA
could object to a proposed study outlined in a study
protocol and could refuse to allow a study outlined ina
protocol to go forward (I.G. Ex. 2 at 3), the FDA is
without the authority to require that a company (CIBA-
GEIGY in this case) fund or proceed with any approved
study if the company decides not to do so after having
obtained the FDA's approval on the protocol. Thus, what
the FDA gave to the Anafranil study in this case was the
FDA's permission for the study to be conducted in
accordance with the protocol submitted by CIBA-GEIGY.
See I.G. Ex. 2 at 4, 8.

Accordingly, I find that the I.G. did not prove that the
program which was the victim of his fraud was operated by
or financed in whole or in part by a government agency.
13
3. t

Petitioner asserts that the Double Jeopardy Clause of the
Fifth Amendment prohibits his exclusion. Petitioner
argues that his exclusion is punitive, not remedial, and
that, under the decision in United States v. Halper, 490
U.S. 435 (1989), an individual punished in a criminal
proceeding can be sanctioned in a subsequent civil
proceeding only if the sanction is solely remedial.
Petitioner argues further that no remedial purpose is to
be served by his exclusion and that his is one of the
rare cases in which the exclusion sanction is punitive
and a violation of the Double Jeopardy clause. P. Br. at
12 - 14.

In support of his argument, Petitioner specifically
asserts that he did not defraud the programs, did not
harm a program beneficiary or recipient, did not abuse
government funds or attempt to defraud a government
agency, and that the only victim in this case was a
private corporation. Petitioner asserts also that
neither the judge who sentenced him nor the Minnesota
Board found that he was a threat to patients, and that
both the judge and the Minnesota Board made efforts to
ensure his ability to continue his medical practice.
Petitioner believes that his exclusion imposes a
financial punishment upon him, in that it bars him from
receiving payment for treating program patients.
Further, Petitioner asserts that the I.G.'s action is
designed to deter his future misconduct, which Halper
deems to be punishment for purposes of Double Jeopardy.

As an administrative law judge, my delegation of
authority to hear and decide cases brought pursuant to
section 1128 does not include the authority to rule on
the constitutionality of either federal statutes or the
I.G.'s actions. Thus, I have no authority to rule on the
constitutionality of Petitioner's exclusion. See 42
C.F.R. § 1005.4.

I note, however, that federal courts, and Departmental
Appeals Board administrative law judges and appellate

panels, have held consistently that exclusions imposed
pursuant to section 1128 are remedial in nature. See,

e.g., Manocchio v. Sullivan, 961 F.2d 1539, 1541 - 1543

(11th Cir. 1992); Greene v. Sullivan, “731 F. Supp. 838,
839 - 840 (E.D. Tenn. 1990); Francis Shaenboen, R.Ph.,

DAB CR97 (1990), aff'd DAB 1249 (1991). The purpose of
section 1128 is not to punish, but to protect Medicare
14

and Medicaid funds and the programs' beneficiaries and
recipients from untrustworthy providers. If a provider
has been convicted of a criminal offense covered by the
Act, that provider is presumed by Congress to be
untrustworthy and a potential threat to the programs and
their beneficiaries and recipients. Such exclusion will
likely have an adverse financial and personal impact on
the provider against whom the exclusion is imposed, and
it may appear to that provider to constitute a
punishment. The law, however, places program integrity
and the well-being of beneficiaries and recipients ahead
of the financial and personal interests of providers.
Syed Hussaini, DAB CR193 (1992); Halper, 490 U.S. at 447
n.7; See also Manocchio, 961 F.2d at 1542.

In this case, I have concluded that Petitioner's
conviction falls within the ambit of section 1128(b) (1),
authorizing the I.G. to take an exclusion action.
Petitioner was convicted of serious criminal offenses.
The I.G. may conclude from the nature of Petitioner's
offenses that remedial action is appropriate to protect
Medicare and Medicaid and the programs' beneficiaries and
recipients. I am without the authority to set aside the
I.G.'s exercise of discretion to exclude Petitioner under
section 1128(b)(1) of the Act. See 42 C.F.R. §

1005.4(c) (5).

D. e Si of A ati and Mitigati:
Factors

The controlling regulation at 42 C.F.R. § 1001.201
requires that, in cases of exclusions imposed pursuant to
section 1128(b)(1) of the Act, the exclusion imposed will
be for three years, unless specified aggravating or
mitigating factors form a basis for lengthening or
shortening the period of exclusion. 42 C.F.R. §
1001.201(b). The regulations state specifically the
factors which may be classified as aggravating or
mitigating. Under the regulations, evidence which
relates to factors not among those specified as
aggravating or mitigating is not relevant to my
examination of the reasonableness of the length of an
exclusion.

The I.G. imposed the three-year exclusion against
Petitioner on October 19, 1994. October 19, 1994 Notice
Letter (Notice). Since the inception of this case,
Petitioner has consistently asserted that the three-year
exclusion should be shortened because a mitigating factor
exists. Specifically, Petitioner asserts that no
alternative sources of the type of health care items or
services he furnishes are available due to his exclusion.
15

42 C.F.R. § 1001.201(b) (3) (iv); Petitioner's December 9,
1994 Hearing Request; P. Br. at 14. Over the course of
the proceedings before me, the I.G. has decided to raise
certain aggravating factors to defend against the
possibility that Petitioner may succeed in proving the
existence and effect of the alleged mitigating factor.

I conclude that, on October 19, 1994, the I.G. imposed
the three-year benchmark exclusion period specified by 42
C.F.R. § 1001.201(b) (1), because she did not refer to any
aggravating or mitigating factor in her Notice. The
I.G.'s Notice informed Petitioner only that he was being
excluded for three years based on his conviction of a
criminal offense relating to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial
misconduct.

During my initial prehearing conference with the parties,
the I.G. agreed to provide notice prior to hearing if she
wished to allege any aggravating factor or concede the
existence of any mitigating factor. January 20, 1995
Order and Notice of Hearing. Thereafter, the I.G.
informed me that she was not conceding to any mitigating
factor; however, she informed me also that two
aggravating factors (those at 42 C.F.R. §
1001.201(b) (2) (i) and (ii)) “appear to apply" and that
she was reserving "the right to raise such factors during
or after the hearing ...." Letter from I.G.'s Counsel to
me dated March 17, 1995. The I.G. is asserting now that
three aggravating factors exist. I.G. Br. at 18. The
I.G. does not argue, however, that these factors should
be applied to increase the length of Petitioner's
exclusion beyond three years. The I:G. argues, instead,
that if I conclude that a mitigating factor exists, I
should consider the presence of the three aggravating
factors alleged by the I.G. to sustain the three-year
exclusion the I.G. imposed. I.G. Br. at 12 n.18.

1. Petitioner has provided credible and

persuasive evidence proving that the mitigating
factor at 42 C.F.R. § 1001.201(b) (3) (iv) has
been met and that alternative sources of the
type of health care he provides are not
available to program beneficiaries and

Petitioner has the burden of coming forward with evidence
and proving that alternative sources of the type of
health care items or services he provides are not
available due to his exclusion. The standard of proof in
this proceeding is preponderance of the evidence.

January 20, 1995 Order and Notice of Hearing; 42 C.F.R. §
16

1001.2007(c). In this case, I find that Petitioner has
established by a preponderance of the evidence that the
mitigating factor at 42 C.F.R. § 1001.201(b) (3) (iv)
applies.

An “alternative source" is a source which offers program
beneficiaries and recipients a comparable alternative to
the items or services furnished by a health care
provider. Program beneficiaries and recipients must have
access to this source without unreasonable hardship.
Scott Meggison, DAB CR329 at 15 (1994); John H. Holmes,
M.D., DAB CR270 at 13 - 14 (1993). Under the
regulations, the availability of alternative sources of
health care items or services is relevant only as it
applies to Medicare and Medicaid beneficiaries and
recipients. Exclusion from Medicare and Medicaid is
intended to safeguard the welfare of program
beneficiaries and recipients. An exclusion imposed
against a caregiver does not prevent the caregiver from
billing for services to patients who do not seek
reimbursement from Medicare or Medicaid. Thus, the
regulations permit me to reduce the period of exclusion
only if the lack of an alternative source would adversely
affect program beneficiaries and recipients. Meggison,
DAB CR329 at 15 - 16.

The mitigating factor contained in 42 C.F.R. §
1001.201(b) (3) (iv) is established when a provider proves
by a preponderance of the evidence that, during the
period he or she is excluded from participating in the
programs: 1) there will be no other health care provider
in the geographical area served by that provider
reasonably accessible to program beneficiaries and
recipients; or 2) a significant number of beneficiaries
and recipients will be deprived of reasonable access to
comparable health care services. To establish this
mitigating factor, a provider must prove significant
adverse changes in the services previously available to
program beneficiaries and recipients. Moreover, 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.
Meggison, DAB CR329 at 16. There is, however, no
requirement that the individual prove that he was or is
the sole source of a given type of service. Under this
mitigating factor, the focus is on reasonable access by
program beneficiaries or recipients -- not on whether an
alterative source exists at all.

At the hearing, Petitioner testified and offered the
testimony of four witnesses to prove that this mitigating
17

factor was met. Three of Petitioner's witnesses were
physicians (one a psychiatrist, one an internist, and one
a pediatrician) who had worked or consulted with
Petitioner over a ten year period. Tr. 35 - 36, 62 - 64,
109. The fourth witness was the coordinator of a project
for the parents of children with emotional and behavioral
disorders at a Minnesota-wide parent information and
resource center for families of children with
disabilities. The project coordinator has known
Petitioner for more than 10 years also. Tr. 122 - 123.

I found the testimony of both Petitioner and his
witnesses to be credible and persuasive.

Based on the record before me, I find that Petitioner has
satisfied his burden of proof and proved by a
preponderance of the evidence that no alternative source
exists for the type of health care services he has
provided to program patients.

The testimony of Petitioner and his witnesses (which I
will discuss below) establishes that Petitioner is unique
in that: 1) Petitioner is a specialist in diagnosing and
treating only the most complex cases, cases in which
other child and adolescent psychiatrists have failed; 2)
no other psychiatrist in Petitioner's geographical area
(the State of Minnesota, including Minneapolis and St.
Paul) will modify their schedules to provide the services
to children and adolescents in crisis situations as
quickly as Petitioner does; 3) other psychiatrists will
not spend the amount of time with their patients, without
regard to the source or the amount’ of remuneration, that
Petitioner does; and 4) Petitioner has a cross-cultural
understanding which enables him to make correct diagnoses
for Native American children and to secure the trust of
their families. This trust is necessary in order to
provide effective treatment for these children.

Petitioner and his physician witnesses testified that
Petitioner is a nationally and internationally known
expert in the field of child and adolescent psychiatry,
specifically in the areas of suicide and attention
deficit disorder (ADD) or attention deficit hyperactivity
disorder (ADHD). Tr. 36, 65, 75; See also P. Exs. 1, 3.
They testified that Petitioner is an expert also in the
field of psychopharmacology (the use of drugs to treat
psychiatric disorders) and that Petitioner has an
expertise in diagnosing and treating difficult
psychiatric conditions and in understanding and providing
treatment for psychopharmacological conditions. Tr. 36 -
37, 55, 65 - 66; P. Ex. 1.
18

One of the physicians who testified on Petitioner's
behalf, Dr. Jonathan Jensen, is a psychiatrist and
Director of the University of Minnesota's program for
training child and adolescent psychiatrists. Tr. 35 -
36, 40. In the latter capacity, he teaches pharmacology
to residents. Tr. 56. He has known Petitioner for over
10 years and has worked with him at the University for
three or four hours per week. Tr. 36, 56. For at least
10 years prior to his beginning private practice on
January 3, 1995, Petitioner was Division Chair at the
University and also provided patient care. Tr. 36, 71 -
72.

Dr. Jensen called Petitioner the premier child and
adolescent psychiatrist in Minnesota. Tr. 38. He
testified also that there are very few
psychopharmacologists, and there are too few child and
adolescent psychiatrists in Minnesota and elsewhere in
the nation. Tr. 37, 40.* At the University of
Minnesota, as well as in private physician practices,
individuals in need of treatment must wait months in
order to see a qualified child and adolescent
psychiatrist. Tr. 38. (For example, at the University
of Minnesota, a new patient has a wait of two or three
months from the time he or she requests an evaluation to
the evaluation itself. JId..) During the waiting period,
a patient with suicidal ideation will persist in his
depression, stop eating, fail in school, and lose
friends. Tr. 39. Some may actually commit suicide.
Id.. Children with untreated ADHD may develop juvenile
delinquency problems, get in trouble with the law, drop
out of school, or become physically or verbally
aggressive with others. Id.. Recovery becomes more
difficult as the patients' conditions worsen during the
waiting period caused by the shortage of specialists
available to treat these disorders. Id..

In Dr. Jensen's opinion, even though there are
approximately 12 physicians in Minnesota who could begin
to treat ADHD and suicide ideation, only six to eight of
these doctors would accept patients receiving
governmental medical assistance, and none has
Petitioner's expertise and background in diagnosing
complicated cases. Tr. 37 - 38, 41 - 42, 55. The
University of Minnesota still accepts Medicaid payments,
but may find it necessary to limit the number of Medicaid

8 According to a federal report, three times the
current number of child and adolescent psychiatrists are
needed in the United States. Tr. 40.
19

patients it will accept. Tr. 41 - 42. Two area
hospitals have stopped accepting Medicaid patients. Tr.
41. Many of the psychiatrists Dr. Jensen considers to be
good are working under group health plans and cannot see
Medicare or Medicaid patients as a result. Tr. 57. Due
to the low reimbursement levels of the program, Medicaid
recipients are finding it increasingly difficult to
obtain treatment from the already small pool of child and
adolescent psychiatrists in the State. Tr. 41 - 42.

Dr. Jensen testified further that the University of
Minnesota is a tertiary care center, where only the most
complicated cases (those patients who have failed care
elsewhere) are treated. Of 10 new patients a week who
seek treatment at the University, one-third to one-half
of them are probably Medicaid patients. In Dr. Jensen's
opinion, approximately three Medicaid patients a week, or
at least 150 Medicaid patients a year, from the
University's waiting list could benefit a great deal from
Petitioner's services. Tr. 38 - 39, 59. Currently,
there is a wait of two months for the University's
outpatient services. Tr. 59.

Dr. David Abelson, an internist in private practice,
called Petitioner a "last resort" for children who have
failed other programs, and he cited as an example a case
of a child he had referred to Petitioner who had failed
other treatment but who was successfully diagnosed and
treated by Petitioner. Tr. 63 - 67. In Dr. Abelson's
opinion, Petitioner is unique in Minnesota in that he is
the only psychiatrist who can combine psychotherapy and
psychopharmacology and excel at both. Tr. 66. Dr.
Abelson testified that most psychiatrists in the city do
either psychopharmacology or psychotherapy well -- but
not both. Id..

Dr. Abelson works for the Park Nicollett Medical Center,
a managed care program, which has psychiatrists Dr.
Abelson considers to be "excellent." Tr. 63 - 64, 67.
Depending on which physicians the patients may see under
their insurance plans, Dr. Abelson has made referrals to
the psychiatrists at Park Nicollett. Tr. 64. However,
if a patient has no limitations under his insurance plan,
Dr. Abelson's number one referral choice is Petitioner.
Id.. In the cases of "very difficult" children who have
limited insurance options but have failed treatment in
other programs and under other psychiatrists, Dr. Abelson
often refers such children to Petitioner. Id.. Park
Nicollett and its physicians do not accept Medicare or
Medicaid patients. Tr. 68.
20

The third physician witness called by Petitioner was Dr.
Robert Karasov, a pediatrician with the Park Nicollett
Medical Center, who has known and worked with Petitioner
for several years. Tr. 108 - 109. Dr. Karasov has
referred to Petitioner the most complicated cases, the
patients who have been to several other psychiatrists or
developmental pediatricians without having obtained good
success. Tr. 110 - 111. In the typical complex cases,
the children have problems with impulse control, act very
wildly and frequently destructively with uncontrollable
temper tantrums, behave obsessively (such as needing to
wash their hands or refusing to touch other people) to
the point where their behavior interferes with their
activities of daily living. Tr. 115. In these typical
complex cases, parents and teachers do not known how to
control the behavior. Tr. 111. The longer these
conditions go untreated, the greater the stress becomes
for the family, the further the children will fall behind
in school, the more ostracized the children will become
socially, and the greater their sense of helplessness and
hopelessness. Tr. 116. There exists a statistical
correlation between the foregoing types of behavior in
children and criminal behavior during adulthood. Id..

Dr. Karasov testified that Petitioner's diagnostic
ability and psychopharmacological knowledge, plus his
rapport with his patients and their families, make him
unique. Tr. 111 - 113. Dr. Karasov explained that the
same medications are available for every physician to
prescribe, but it is frequently difficult to find the
right medications that will control the child's behavior
with the least amount of side effects. Tr. 111. The
difficulty is caused by the complexity of the underlying
causation of the behavior problems, such as ADD,
depression, compulsions, obsessions, and the combinations
or permutations of these disorders. Id.. In Dr.
Karasov's opinion, Petitioner has the unique skill of
finding the right medications in the right combinations,
and in the right dosages, with the least amount of side
effects, to treat the most severe cases. Tr. 111 - 112.

In Dr. Karasov's opinion, Petitioner is also more
uniquely effective in the psychiatric community because
the families of patients trust him and he makes himself
very available to them. Tr. 112 ~ 113. Dr. Karasov
acknowledges 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. Tr.
120.

Dr. Karasov testified also that Petitioner is more
accommodating and flexible with his hours than other
21

psychiatrists in the community. Tr. 113. He cited the
example of a young patient who was being dismissed from a
day care center, whose family was "falling apart," and
who could not afford the time to wait for treatment. Tr.
113. (The waiting time for obtaining psychiatric
treatment for children at Park Nicollett, for example, is
six to eight weeks. Tr. 114, 117.) Dr. Karasov called
Petitioner and explained that the case was an emergency.
Petitioner then saw the child after hours within the
following week. Tr. 113, 120. Dr. Karasov testified
also concerning a Medicaid patient he referred to
Petitioner after the exclusion took effect. Tr. 116.
That Medicaid patient paid for Petitioner's services out
of private funds. Tr. 117.

With regard to his practice, Petitioner testified that he
applies current information from both a
psychopharmacological and psychotherapeutic perspective.
Petitioner testified further that he takes only the most
severe cases, patients who have failed other treatment at
least once (and most often two or three times), or who
have failed other medications and require a complex
approach to treatment, such as mixing two or three
different medications. Tr. 80 - 81. Having been in
private practice for only six months prior to the date of
hearing, Petitioner has already accrued a waiting list of
patients. Id.. He does not accept patients whose care
can be provided by other doctors. He takes on only those
he considers "treatment failures." Id..

In response to my questions, Petitioner acknowledged that
there are only nine or 10 individuals with his specialty
in the nation: for example, there are two in New York,
one in Salt Lake City, and one in Boston. Tr. 101.
There are too few child psychiatrists for the number of
persons in need of their services. Id.. Currently, 80
percent of his patients come to him from the seven
counties of the Twin Cities area. Of the remaining 20
percent, one out of five patients comes from Wisconsin,
Iowa, or the Dakotas. Tr. 102. Also, he has patients
who fly in from Chicago and New York.’ Tr. 102.

° Petitioner testified that only about 30
percent of children outgrow ADD and learning
disabilities, learn to cope with them, or learn to cover
them up. Tr. 77 - 78. A large part of Petitioner's
practice includes this adult ADD and learning disabled
group. Tr. 77.
22

Since obtaining a waiver to treat program patients in the
northern counties, Petitioner has been treating patients
on the White Earth Indian Reservation and other
impoverished patients in the remaining rural areas
covered by the waiver. Tr. 100. He plans to continue
treating these people in the northern regions as part of
his desire to perform public service. Id..

With regard to the numbers of program patients Petitioner
was treating prior to his exclusion, Petitioner testified
that, in September 1994, he was treating approximately 20
Medicaid patients, five for suicidal ideation and the
rest for ADD and learning disabilities. Tr. 87 - 88, 92.
By September of 1994, he knew that an exclusion was
forthcoming, and he had been reducing his Medicare and
Medicaid patient load. Tr. 87. When he left the
University of Minnesota to begin private practice in
January 1995, Petitioner had 12 to 15 Medicare or
Medicaid patients in active treatment. Tr. 78 - 79, 92.
He explained to them that he was no longer able to bill
the program for their care and that they would need to
pay on their own, albeit at a reduced fee, if they wished
to continue their treatment with him. Tr. 79. Five of
these patients have remained with Petitioner; the others
could not afford even a modest fee sufficient only to
cover Petitioner's overhead. Tr. 79.

To Petitioner, the biggest problem for the Medicaid
patients he has continued to treat on a private pay basis
is that the program cannot be billed for the medications
prescribed by him. Tr. 79. It is his opinion that these
Medicaid patients are not able to afford the cost of the
medications out of their own funds, and, consequently,
they do not take the medications prescribed by Petitioner
for their treatment. Id.. He concludes that these
patients are getting only a half measure of their
treatment because their treatment is 50 percent
medication. Tr. 80. These patients are not progressing
as they might otherwise. Id..

Petitioner testified that he would "go to all efforts" to
help adolescents with suicidal ideation, giving them his
home number and making himself available for 24-hour-a-
day calls. Petitioner testified that he has never
treated a young patient who later committed suicide. fTr.
93 - 94. He sees all his patients for a full hour, even
if he is not being reimbursed for all of that time.
Standard practice is for a psychiatrist to see a patient
for 15 to 20 minutes, due to the psychiatrists'
unwillingness to treat Medicaid patients or to the
psychiatrists' scheduling restrictions. However, in
Petitioner's opinion, there is very little that can be
23

accomplished with a suicidal young person during 15 to 20
minutes, for example. Tr. 94.

Dixie Jordan, the coordinator of the project for children
with emotional and behavioral disabilities, testified
that she works primarily with children from poor
Hispanic, Native American, and culturally diverse
families, many of whom are Medicaid eligible. Tr. 122 -
124, 147. One of her primary responsibilities is to help
the families of children with emotional and behavioral
disabilities locate and gain access to available
resources. Tr. 122. During the previous year, for
example, her office received 6100 telephone calls for
help. Tr. 133. Families call her generally only when
there is an acute crisis in the family, such as when a
child is having an acute psychotic episode, perhaps
threatening to kill himself or his family, and the family
needs to talk to a psychiatrist immediately. Tr. 125,
132.

Ms. Jordan testified that Petitioner is the only
psychiatrist she has worked with who will see a child
immediately. She testified that he has always come
through for her, even in the middle of the night. Tr.
125 - 127, 145 - 146. She testified further that, in her
experience, no one provides what Petitioner provides to
the communities she works with. Tr. 128.

Ms. Jordan described what she typically encounters when
she attempts to secure help for children in crisis from
providers other than Petitioner. Tr. 143 - 144. When
she calls the hospitals where the doctors practice and
asks them to admit children who have attempted suicide at
school or at home, she would be told that the facilities
are full. The attending psychiatrists would fail to
return her calls, and when she reaches them, they would
typically respond that the families should watch the
children carefully over the weekend and that the doctors
would try to fit these children in as soon as possible.
If the acute episode dissipates over the weekend, the
children would then wait for two or three months at a
time before they are seen by the doctors. Id.. Due to
the absence of psychiatrists able or willing to see these
children in crisis, Ms. Jordan has had to resort to
telling parents to have their children throw rocks
through a hospital's window in order to establish that
the children are in crisis and thereby gain admission to
the hospital for treatment. Tr. 143.

Ms. Jordan testified that, even in the Twin Cities area,
finding immediate care for a Medicaid-eligible child is
extraordinarily difficult. Tr. 148 - 149. In the rural
24

areas of Minnesota especially, when a child is
experiencing an emotional crisis due to a mental illness,
Ms. Jordan has found that, in most instances, there is no
one except Petitioner to whom she can send that child.
Tr. 126. The number of doctors who will accept Medicaid
patients has been declining due to the low reimbursement
rate. Id.. Some consulting psychiatrists fly into the
rural parts of the State once a month, but they do not
take advance appointments. Tr. 145. In addition, Ms.
Jordan has found that children in acute episodic crisis
do not respond well to physicians specializing in adult
psychiatry; these physicians have made misdiagnoses or no
diagnoses of children in crisis. Tr. 126.

Ms. Jordan testified also that Petitioner is the only
psychiatrist she will use for certain Native American
children, because Native American families trust him and
trust him not to misdiagnose their childrens' conditions.
Tr. 125 - 127. She testified that she has used
Petitioner especially as a referral source for culturally
diverse parents from around the State. Tr. 123 - 124.
She testified that it is very easy for a doctor to miss
the cultural representations that children of the Native
American community experience. Tr. 127.

She testified further that while a Native American child
may not have his or her health jeopardized by another
physician's treatment, the family may not accept the
treatment prescribed by another physician. Tr. 135.
When Ms. Jordan made referrals to other doctors, there
have been Native American parents who said that they
would not take their children to those doctors. Tr. 135
- 136. Ms. Jordan believes that, in the 87 counties of
Minnesota, and, with the exception of those counties for
which Petitioner has obtained a waiver, there is
"practically" no psychiatrist other than Petitioner whom
the families would feel was competent to address their
cultural needs. Tr. 129.

Ms. Jordan testified also that Medicaid patients may not
be able to receive prompt treatment because of
Petitioner's exclusion. These children tend to wind up
in residential treatment or in the criminal justice
system. Tr. 129 - 130. She testified further that, in
the period since Petitioner was excluded, at least one
child has committed suicide. Tr. 144. When she fails to
get results through other avenues and with other
psychiatrists, she calls Petitioner's office and always
has been able to get his prompt assistance for those in
need. Tr. 146.
25

Ms. Jordan testified that, prior to Petitioner's
exclusion, she referred approximately three or four dozen
Medicaid patients to Petitioner a year. Tr. 146. In
some Native American tribes, suicide is the second
leading cause of death for children. Tr. 127. She knows
of a number of children living on reservations who
urgently need services. Because Petitioner is not
available to see them on the reservations, she has to
bring them to the city to find help for them. Tr. 147.
Even though Petitioner is currently providing services to
program patients on the White Earth Reservation in the
northern part of the State, more than half of the tribe's
enrolled members live in urban areas, primarily in
Minneapolis and St. Paul. Tr. 128. Ms. Jordan testified
that the Twin Cities have the third largest Native
American population in the nation. JId.. Ms. Jordan
testified also that, outside of the northern counties
where Petitioner is authorized to provide services under
the programs and outside of the Twin Cities area, there
are many Medicaid patients in need of services. Tr. 147.
She pointed out that there is the eastern side of the
State to consider as well. Tr. 148.

2. Evidence submitted by the I.G. proves the
i th: atin .

The I.G. presented no testimony or statements of
witnesses.

To rebut the effect of the above-described mitigating
factor, the I.G. asserted the existence of three
aggravating factors. I.G. Br. at 12 n.18.

The I.G. has proved the existence of the three
aggravating factors. Specifically, the I.G. proved the
presence of the aggravating factors set forth at 42
C.F.R. § 1001.201(b) (2) (i), (ii), and (iv). Section
1001.201(b) (2) (i) states that it is an aggravating factor
if the acts resulting in a provider's conviction result
in financial loss to an entity of $1500 or more. Here,
CIBA-GEIGY sustained a loss of $170,394 which was
ascribed to Petitioner's criminal offenses. I.G. Ex. 1
at 5. Section 1001.201(b) (2) (ii) states that it is an
aggravating factor if the acts resulting in a provider's
conviction were committed over a period of one year or
more. The facts before me establish that Petitioner was
convicted of similar acts occurring for a period of over
one year. I.G. Ex. 2 at 15 - 16; I.G. Ex. 1. Section
1001.201(b) (2) (iv) states that it is an aggravating
factor if the sentence imposed by the court included
incarceration. Here, Petitioner received a six month
term of imprisonment. I.G. Ex. 1 at 2.
26

3. We in itigatin
ved i nable
t a’ iti ' c. e date
a rt Decision.

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. I.G. Ex. 10; Tr. 55, 78
- 79, 85, 93 - 94, 112 - 115, 119 - 120. The I.G. argues
that the mitigating factor is not met because there are
other child and adolescent psychiatrists who, according
to one witness, could provide adequate treatment in the
same specialty areas as Petitioner. I.G. Reply Brief
(1.G. R. Br.) at 9. However, the credible testimony of
Petitioner and his witnesses establishes that no other
health care provider with Petitioner's medical
specializations, understanding of Native American
culture, and scheduling flexibility is reasonably
accessible to program patients. All of the witnesses
testified to the weeks and months of waiting a patient
must undergo in order to see a psychiatrist who is
willing and able to accept Medicaid payments. I do not
consider weeks and months of waiting for an appointment
to constitute an available alternative source, especially
given the evidence of the harm that has and could result
to program beneficiaries and recipients due to such a
waiting period. Even though Petitioner discharged all
but a handful of his program patients when his exclusion
began, the evidence shows that Petitioner's services are
still needed by program beneficiaries and recipients.
Witnesses testified to the onset of suicidal ideation or
the crisis phases of mental illness in children not
previously Petitioner's patients. Such types of cases,
plus the fact that Petitioner specializes in and treats
only patients who have failed under the care of other
psychiatrists, indicates that there are and will continue
to be other Medicare or Medicaid patients who need his
services as the physician of last resort. In sum, I am
persuaded that Petitioner has proved the mitigating
factor by a preponderance of the evidence.

The I.G. proved the existence of three aggravating
factors, as discussed above. However, the I.G. has never
argued or attempted to prove the manner in which the
three aggravating factors make the three-year exclusion
period reasonable, or the weight each factor should have.
Instead, the I.G. concludes only: "Given these three
separate aggravating factors, Petitioner's three-year
exclusion should be upheld, even if the mitigating factor
27

alleged by Petitioner is found to exist." I.G. Br. at
19.

As explained in the preamble to the relevant regulations,
none of the enumerated aggravating and mitigating factors
has been assigned a specific value by the regulation,
because each factor should be evaluated based on the
circumstances of each case. 57 Fed. Reg. 3314. The
preamble gives the example of a case where many
aggravating factors exist, but the single mitigating
factor was so significant that it is appropriate to give
that single mitigating factor more weight than all the
aggravating factors. [d.. This is such a case. When I
weigh the evidence relevant to the aggravating and
mitigating factors in light of the Act's intent to
protect the programs and their beneficiaries and
recipients, I can find no remedial purpose in
Petitioner's three-year exclusion.

The evidence relevant to the aggravating factors proved
by the I.G. militates against the conclusion that only a
three-year exclusion will adequately protect the programs
and their beneficiaries and recipients. For example, the
$170,394 loss suffered by CIBA-GEIGY was calculated based
on the amount of money paid to the University of
Minnesota for the part of the Anafranil study that was
compromised by Petitioner's conduct. P. Ex. 2 at 24 -
25. There is no evidence that Petitioner derived any
personal or financial benefit from his actions. Even
though the government alleged that Petitioner had
defrauded a federal entity, the FDA, the court rejected
that allegation during the sentencing proceedings. P.
Ex. 2 at 28 - 29. The court noted during the sentencing
proceedings that, even though the government accused
Petitioner of having filed hundreds of false claims and
alleged that Petitioner had engaged in more than the
minimal planning that is typical for commission of the
offense in a simple form, Petitioner was convicted of
only two counts of mail fraud and acquitted of two other
counts of mail fraud. Further, Petitioner was convicted
of only three of 19 counts of making a false statement.
The government failed also to prove the existence of more
than the minimal planning necessary for committing the
offenses for which Petitioner was convicted. I.G. Ex. 2
at 26 - 29. The witnesses' testimony establishes that
Petitioner has led an exemplary life, with the exception
of his conduct during the Anafranil study. The I.G. does
not allege otherwise.

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
28

patients. U.S. District Judge Doty, who imposed sentence
upon Petitioner, recognized that Petitioner is a fine
physician. Judge Doty structured Petitioner's
imprisonment to allow him to continue to treat patients.
P. EX. 2 at 26, 40. I agree with the following thoughts
expressed by Judge Doty during Petitioner's sentencing:

Something is very, very clear to this court,
Doctor Garfinkel, and that is that you are a
fine physician ...

The one thing that concerned me the most about
all of this from the beginning, and still
concerns me, is that there are a lot of people
who not only think you are a wonderful
physician, but depend on you day-to-day --
today, tomorrow. And I want to make sure that,
by doing what we're doing here, that we're not
committing a worse crime ....

P. EX. 2 at 40.

The court's recognition that Petitioner poses no threat
to patients is consistent with the Stipulation and Order
of the Minnesota Board, which required Petitioner to
perform medical services at a site selected by the
Minnesota Board. I.G. Ex. 4. By waiving Petitioner's
exclusion in the eight northern Minnesota counties, the
I.G. herself appears to have recognized that Petitioner
does not threaten the health of program patients.

The evidence relevant to the mitigating factor proven by
Petitioner shows that, rather than safeguarding the
health of program patients, continuing Petitioner's
exclusion is likely to harm many program patients,
especially those of the Native American population, who
need Petitioner's prompt and specialized services. As
discussed above, the testimony of Ms. Jordan, who works
primarily with poor Medicaid-eligible children of diverse
cultural backgrounds, establishes that at least one child
has come to actual harm since Petitioner's exclusion.
Other children in similar situations are likely to injure
themselves or others during acute, crisis phases of their
illnesses, because other physicians are not willing to
provide immediate treatment, lack the expertise to treat
complex cases or to treat cases where patients have
failed treatment by other providers, or who cannot secure
the cooperation of the families in following prescribed
treatment. Already some Medicaid patients have paid from
their own funds in order to continue their treatment with
Petitioner. However, it is unlikely that these Medicaid
patients benefitted fully from Petitioner's treatment,
29

because it is not likely that they were able to afford
the cost of the medications prescribed by Petitioner
during his exclusion.

In addition, the mental disorders or conditions described
by the witnesses at hearing require proper diagnosis and
ongoing treatment, even when there is no acute, crisis
episode. Petitioner testified that he does not accept
patients who can be treated successfully by other
doctors. Petitioner's colleagues justifiably consider
him the psychiatrist of last resort for children and
adolescents who have failed one or more treatments
elsewhere.

During Petitioner's exclusion, patients under private
insurance plans or with private funds to pay for his
services are coming to him for treatment from as far away
as Iowa, Wisconsin, the Dakotas, Chicago, and New York.
These people are able to benefit from Petitioner's
services during his exclusion. Thus, Petitioner's
exclusion impacts adversely only upon program
beneficiaries and recipients who lack adequate financial
resources and live in the Twin Cities area or in parts of
Minnesota not covered by the I.G.'s eight-county waiver.

Petitioner testified that he wants to treat program
patients because he has spent his life in the public
sector, and he has entered private: practice only
reluctantly, in order to pay legal bills, fines, and
restitution. Tr. 100 - 101. I believe that he is
sincere in wishing to provide care wherever and whenever
he is needed, as evidenced by the witnesses' accounts of
his continued willingness to see patients in crisis after
hours and immediately as needed. Petitioner's private
practice since his exclusion is no doubt successful, as
he already has a waiting list of patients not on Medicare
or Medicaid. Despite the low level of Medicaid
reimbursement that has prompted other providers to stop
accepting Medicaid patients, and despite Petitioner's
waiting list of patients who can pay more for his
services, Petitioner wants to treat program patients.

I conclude, based on the record as a whole and the
relative weight of the evidence relevant to the
mitigating and aggravating factors proven by the parties,
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.
30

III. Conclusion

Based on Petitioner's conviction, it was reasonable for
the I.G. to impose an exclusion against Petitioner.
However, it is unreasonable for the I.G. to have excluded
Petitioner for three years. The remedial purposes of the
Act are not being served by such an exclusion.
Accordingly, I modify Petitioner's exclusion to end upon

the date of issuance of this Decision.

/s/
Mimi Hwang Leahy

Administrative Law Judge