Convicted Pharmacist’s 30 year Exclusion Supported by Aggravating Factors

An enhanced exclusion period of 30 years is reasonsable in the case of a pharmacist who pled guilty to and has been convicted of health care fraud from participation in Medicare, Medicaid, and all other federal health care programs, according to a  Departmental Appeals Board (DAB) administrative law judge (ALJ) decision (see Ayika v. Inspector General, Docket No. C-13-722, Dec. No. CR 3031, December 12, 2013).  According to the ALJ, the Inspector General’s (I.G.) determination to enhance the mandatory minimum five-year exclusion period to 30 years based on aggravating factors was supported by the material facts of the case and the law. The ALJ concluded that the law required the I.G. to inpose a mandatory five year period of exclusion and that the 30 year period of exclusion is within a reasonable range  after finding that the pharmacist’s crimes showed him to be particularly untrustworthy. Because there were no genuine issues of fact, the ALJ granted the I.G.’s motion for summary disposition.

Criminal Activity

The pharmacist, Peter Victor Ayika, who owned and operated a pharmacy in El Paso, Texas, was excluded from participation in the Texas Medicaid Program and other federally funded health care programs on December 1, 2009, by the Texas Health and Human Services Commission, Office of the Inspector General after the Texas State Board of Pharmacy revoked his pharmacist license. On August 11, 2011, the pharmacist was indicted for three-counts of health care fraud in violation of 18 U.S.C. sec. 1347, mail fraud, in violation of 18 U.S.C. sec. 1341, and wire fraud in violation of 18 U.S. C. sec. 1343, charging that he had executed a scheme to defraud the Medicaid program, the Federal Employees Health Benefits Program and other health care insurers by submitting false and fraudulent claims for medications and other pharmaceuticals that were never distributed or dispensed to the insured. The pharmacist entered into a plea agreement agreeing to plead guilty to health care fraud in violation of sec. 1341. Included in the plea agreement was the pharmacists acknowledgement of his scheme to commit health care fraud that began on or about August 1, 2006, and continued until March 11, 2009. He was sentenced to 63 months of incarceration followed by 24 months of supervised release and ordered to pay $2,498,586.86 in restitution.

In a separate proceeding, the pharmacist was found guilty of one count of processing with intent to distribute hydrocodone by a practitioner and one count of distributing a listed chemical with knowledge or reason to know of its wrongful use in violation of 21 U.S.C. sec. 841. He was sentenced to 60 months of incarceration for count one to be served concurrently with 170 months of incarceration for the second count, followed by three years of supervised release.

ALJ’s Findings and Conclusions

Based on the record, the ALJ determined that the pharmacist’s guilty plea and judgment of conviction constitute a “conviction” within the meaning of Social Security Act secs. 1128 (a)(1) and 1128 (i)(1), (2), and (3) and 42 C.F.R. sec. 1001.2 and concluded that the pharmacist’s admission that he submitted false claims for reimbursement from Medicaid and other insurers for prescription drugs and other pharmaceuticals that he never provided to patients or customers satisfied the element that the conviction be related to the delivery of a health care item or service under the Medicare and Medicaid programs. Based on the conviction, the I.G. had the authority under Secs. 1128(a)(1) and (a)(3) to exclude the pharmacist from participation in federal health care programs. The I.G. identified five aggravating factors to support his determination to extend the five-year mandatory period of exclusion to 30 year. First, as required under 42 C.F.R. sec. 1001.102(b)(1), the acts resulting in the pharmacist’s conviction must have caused a financial loss to the government program and other entities of over $5,000; in this case, the pharmacist was ordered to pay restitution of $2,498,586.86 to the Texas Medicaid program and other entities. Second, under 42 C.F.R. sec. 1001.102(b)(2), the acts must have been committed over a period of one year or more and, in this case, although the exact time span is disputed by the evidence, the time span went well beyond the one year required. The third aggravating factor, under 42 C.F.R. sec. 1001.102(b)(5),  is present because the pharmacist was sentenced to prison for 63 months.  The fourth aggravating factor under 42 C.F.R. secs. 1001.102(b)(6) is present because the pharmacist had a prior administrative sanction record in that his license was revoked by the Texas State Board of Pharmacy prior to his conviction for health care fraud. Finally, under 42 C.F.R. sec. 1001.102(b)(9), the pharmacist was found guilty of processing with intent to distribute hydrocodone by a practitioner and distributing a listed chemical with knowledge of its wrongful intended use, which constitutes convictions for other offenses besides those which formed the basis for his exclusion. Furthermore, none of the mitigating factors found at 42 C.F.R. sec. 1001.102(c)(1) –  (3) was present.