[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65075-65079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31252]


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DEPARTMENT OF JUSTICE
[Docket No. 94-41]


Anibal P. Herrera, M.D.; Continuation of Registration with 
Restriction

    On August 31, 1994, the Deputy Assistant Administration, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Anibal P. Herrera, M.D. (Respondent) of 
Middletown, New York, notifying him of an opportunity to show cause as 
to why DEA should not revoke his DEA Certificate of Registration, 
AH3517298, under 21 U.S.C. 824(a)(5), and deny any pending applications 
for renewal of such registration as a practitioner, under 21 U.S.C. 
823(f), for reason that he has been excluded from participation in a 
program pursuant to 42 U.S.C. 1320a-7(a).
    By letter dated September 19, 1994, the Respondent, acting pro se, 
filed a timely request for a hearing, and following prehearing 
procedures, a hearing was held in New York, New York on April 27, 1995, 
before Administrative Law Judge Mary Ellen Bittner. At the hearing, 
both parties called witnesses and introduced documentary evidence. 
After the hearing, Government counsel submitted proposed findings of 
fact, conclusions of law and argument. On July 13, 1995, an attorney 
entered a notice of appearance

[[Page 65076]]

as counsel for Respondent, and submitted proposed findings of fact, 
conclusions of law, and argument. In addition, the Administrative Law 
Judge considered as post-hearing filings letters submitted by 
Respondent dated May 29 and June 30, 1995, and the Government's 
response dated June 12, 1995. On March 12, 1996, Judge Bittner issued 
her Opinion and Recommended Ruling, Findings of Fact, Conclusions of 
Law and Decision, recommending that Respondent's DEA Certificate of 
Registration be restricted to require the submission of a log of his 
controlled substance handling on a quarterly basis for three years. On 
April 1, 1996, Government counsel filed exceptions to Judge Bittner's 
Opinion and Recommended Ruling, and on April 17, 1996, the record of 
these proceedings was transmitted to the Deputy Administrator. 
Subsequently, on April 22, 1996, Respondent's counsel requested an 
extension of time to file a response to the Government's exceptions, 
which was granted on April 29, 1996. Respondent then filed his response 
to the Government's exceptions on May 8, 1996.
    The Acting Deputy Administrator has considered the record in its 
entirety, including the Government's exceptions and Respondent's 
response thereto, and pursuant to 21 CFR 1316.67, hereby issues his 
final order based upon findings of fact and conclusions of law as 
hereinafter set forth. The Acting Deputy Administrator adopts, with one 
noted exception, the Opinion and Recommended Ruling, Findings of Facts, 
and Conclusions of Law and Decision of the Administrative Law Judge. 
His adoption is in no manner diminished by any recitation of facts, 
issues and conclusions herein, or of any failure to mention a matter of 
fact or law.
    The Acting Deputy Administrator finds that Respondent is a 
physician specializing in psychiatry. He graduated from the University 
of Buenos Aires Medical Center in 1955 and came to the United States in 
1958, receiving his license to practice medicine in New York in 1965. 
He held various positions at local psychiatric centers and a local 
hospital, including staff psychiatrist, supervisor, unit chief, and 
director of psychiatric service at the hospital, until he retired in 
1989. Since his retirement, Respondent has had a part-time psychiatric 
practice in Orange County, New York which has a Spanish speaking 
population of about 20,000. Respondent testified at the hearing before 
Judge Bittner that he was the only Spanish speaking physician in the 
county that would prescribe medication and provide counseling when 
needed.
    In 1991, the New York Deputy Attorney General for Medicaid Fraud 
initiated an investigation of Respondent because his Medicaid billing 
was high for psychiatrists in his geographic area. A provider profile 
of Respondent's Medicaid billings for 1988 through 1992, revealed that 
almost all of the claims specified the code 90844 with the modifier 
``WA''. During the time period covered by the investigation, the code 
90844 represented psychiatric service of approximately 45-50 minutes 
with a minimum of 37 minutes, and provides for a $25.00 fee. The ``WA'' 
indicated that the service was rendered in an office setting and allows 
the provider to bill an additional $5.00. Other codes were available 
for other types and lengths of services. Prior to 1988, a different 
code was used for services similar to those covered by code 90844. 
Providers are furnished a manual with billing guidelines. Revisions to 
the code are made periodically and providers are sent code changes in 
their specialty field.
    As part of the investigation of Respondent, an undercover 
investigator went to Respondent's office on approximately 15 occasions 
between May 1991 and June 1992. The undercover investigator presented 
legitimate medical reasons for the visits and was prescribed Xanax, a 
controlled substance. The Acting Deputy Administrator concludes that 
Respondent's proper prescribing of controlled substances to the 
undercover investigator is not an issue in these proceedings. The 
purpose of these visits was to determine whether Respondent was 
properly billing Medicaid based upon the amount of time spent with his 
Medicaid patients.
    The first two undercover visits were for 24 and 20 minutes 
respectively, and Respondent billed Medicaid using the code 90844. An 
investigator that testified at the hearing before Judge Bittner stated 
that although these visits were shorter than the required 37 minutes, 
they were long enough that investigators ``didn't make anything out of 
that.'' The third visit lasted 14 minutes and the remaining visits 
ranged from between 4 and 10 minutes. The investigator testified that 
Respondent billed Medicaid using the Code 90844 for all of these visits 
despite their duration. The Administrative Law Judge found, and the 
Acting Deputy Administrator concurs that the record is not clear as to 
whether Respondent in fact billed Medicaid for two of these visits.
    Before the last undercover visit on June 11, 1992, two 
investigators went to Respondent's office in their official capacity to 
discuss his billing practices. Respondent told the investigators that 
he had been participating in the Medicaid system since the 1960's and 
had always been reimbursed $30.00 for an office visit. Respondent 
stated that he had received the Medicaid manuals and updates and even 
showed them to the investigators. Respondent told the investigators 
that Medicaid patients accounted for 50% of his practice and that his 
secretary handles the office billing. Respondent initially told the 
investigators that he spent 30 to 35 minutes or longer with his 
Medicaid patients depending on their needs. Respondent was then asked 
whether he ever gave his patients less time and he stated that he 
sometimes only spent 20 to 30 with those patients. When the 
investigators revealed that they had conducted surveillance of his 
office, Respondent admitted that he had not spent the required amount 
of time with his Medicaid patients. Respondent stated however, that he 
did not look at his watch, but gave each patient as much time as 
needed. During this interview, Respondent never stated that he was 
purposely overbilling the Medicaid system, but he accepted 
responsibility for the billing.
    Later on June 11, 1992, the undercover investigator made her last 
visit to Respondent's office. During this visit, the undercover 
investigator told Respondent that she had received a letter from the 
Department of Social Services questioning how much time she spent in 
her sessions with Respondent. The Government asserts that the tape 
recording of this visit indicates that Respondent told the undercover 
investigator to lie about the amount of time spent with Respondent. 
Respondent submitted a certified transcript of the recording which 
indicates that Respondent said, ``[y]ou cannot lie.'' The Acting Deputy 
Administrator concurs with Judge Bittner's finding that Respondent told 
the investigator, ``[y]ou cannot lie.''
    On several occasions, while waiting to see Respondent, the 
undercover investigator timed other patients, and observed that they 
spent between 6 and 20 minutes with Respondent. The Acting Deputy 
Administrator agrees with Judge Bittner however, that there is no 
evidence in the record that these were Medicaid patients, and therefore 
does not find that these observations are relevant to this proceeding.
    As part of the investigation, approximately 25 of Respondent's 
Medicaid patients filled out

[[Page 65077]]

questionnaires indicating the amount of time spent with Respondent. The 
questionnaires are not in evidence; however, the investigator testified 
that the answers varied, ``but the majority was like about 15 minutes 
or so.''
    As a result of the investigation, Respondent was convicted on 
December 3, 1992, in the City Court of Middletown, County of Orange, 
State of New York, following this guilty plea of filing a false 
instrument in the second degree, a misdemeanor, in violation of section 
175.30 of the Penal Law of the State of New York. Respondent was 
ordered to pay a fine and restitution of $22,000, which was the 
estimated amount of Respondent's overbilling to Medicaid. Respondent 
paid both the fine and the restitution amount.
    An element of the offense for which Respondent was convicted is 
``knowing that a written instrument contains a false statement or false 
information.'' N.Y. Penal Law section 175.30 (emphasis added). 
Respondent testified at the hearing before Judge Bittner that he did 
not know that the claims were false when he submitted them to Medicaid, 
but pled guilty because he accepted responsibility for improperly 
billing. He further testified that his plea resulted from bad legal 
advice and a desire to put the episode behind him. Respondent testified 
before Judge Bittner, and argues in his post-hearing filing, that he 
entered an Alford plea to the charge against him, whereby he admitted 
the facts, but not the criminal intent. See, North Carolina versus 
Alford, 91 S.Ct. 160 (1970). Other than Respondent's testimony, there 
is no other evidence in the record regarding the circumstances 
surrounding Respondent's guilty plea and its acceptance by the court.
    Respondent explained that he had always billed Medicaid $30.00 for 
each session. According to Respondent, in the 1970's, if there was an 
approved treatment plan on file for a patient, a doctor could bill 
Medicaid $30.00 for each session regardless of the duration of the 
session. In 1985, the system changed and treatment plans were no longer 
required, and billing codes were established based upon the type and 
duration of service. Respondent claims that he was not aware of the 
time requirements. He testified that he told his part-time secretary 
who handles his billing to bill Medicaid $30.00 for each Medicaid 
patient he saw. The secretary looked for the appropriate billing code 
that reimbursed for $30.00, which was 90844.
    As a result of his conviction, the United States Department of 
Health and Human Services excluded Respondent from participation in the 
Medicare, Medicaid, Maternal and Child Health Services Block Grant, and 
Block Grants to States for Social Services programs for a period of 5 
years effective 20 days after June 21, 1993. This is a mandatory 
exclusion pursuant to 42 U.S.C. 1320a-7(a).
    On March 27, 1995, the State Board for Professional Medical Conduct 
for the State of New York suspended Respondent's license to practice 
medicine for three years, but stayed the suspension and placed his 
license on probation, during which time his billing records will be 
closely monitored.
    Respondent testified that there have never been any complaints 
about his treatment of patients, and there have never been any 
malpractice suits or civil actions brought against him. He introduced 
80 letters of support from patients and other doctors. All of the 
patients stated that they were very happy with Respondent's services, 
and many emphasized that Respondent gave them the time that they 
needed. Respondent testified before Judge Bittner that revocation of 
his DEA Certificate of Registration would impair his ability to 
properly treat his patients.
    The Deputy Administrator may revoke or suspend a DEA Certificate of 
Registration under 21 U.S.C. 824(a), upon a finding that the 
registrant:

    (1) Has materially falsified any application filed pursuant to 
or required by this subchapter or subchapter II of this chapter;
    (2) Has been convicted of a felony under this subchapter or 
subchapter II of this chapter or any other law of the United States, 
or of any State relating to any substance defined in this subchapter 
as a controlled substance;
    (3) Has had his State license or registration suspended, 
revoked, or denied by competent State authority and is no longer 
authorized by State law to engage in the manufacturing, 
distribution, or dispensing of controlled substances or has had the 
suspension, revocation, or denial of his registration recommended by 
competent State authority;
    (4) Has committed such acts as would render his registration 
under section 823 of this title inconsistent with the public 
interest as determined under such section; or
    (5) Has been excluded (or directed to be excluded) from 
participation in a program pursuant to section 1320a-7(a) of Title 
42.

    It is undisputed that subsection (5) of 21 U.S.C. 824(a) provides 
the sole basis for the revocation of Respondent's DEA Certificate of 
Registration. Pursuant to 42 U.S.C. 1320a-7(a), Respondent has been 
excluded from participation in the Medicare, Medicaid, Maternal and 
Child Health Services Block Grants to States for Social Services 
programs for a five-year period until approximately mid-July 1998. The 
issue remaining is whether the Acting Deputy Administrator, in 
exercising his discretion, should revoke or suspend Respondent's DEA 
Certificate of Registration.
    The Government contends that Respondent's registration should be 
revoked since he continues to deny that he intentionally overbilled 
Medicaid and therefore has shown no remorse for his actions. Respondent 
does not deny that he overbilled Medicaid and that he was convicted of 
filing a false instrument. Respondent contends, however, that he did 
not overbill Medicaid intentionally, and that he did not admit intent 
when he pled guilty, but did so to accept responsibility for the 
improper billing and to put the matter behind him. Respondent also 
argues that his DEA registration should not be revoked because there 
has never been a complaint about his practice of medicine and his 
services are badly needed in the community in which he practices.
    The Administrative Law Judge recommended that Respondent's 
registration not be revoked, but that he be required to submit a log of 
his controlled substance handling on a quarterly basis for three years. 
Judge Bittner found that Respondent has admitted that he overbilled 
Medicare for some or all of the undercover visits, and for most of his 
other patients, and that his explanation for the overbilling is 
plausible. In her opinion, Judge Bittner addressed the Government's 
contention that Respondent's assertion of lack of knowledge of the 
proper Medicaid billing codes is not credible. The Government, in its 
brief as well as its exceptions, points to the investigator's testimony 
that Respondent changed his story as to the amount of time spent with 
Medicaid patients after learning that his office had been under 
surveillance; admitted to reading the Medicaid manuals; stated that he 
believed that the Medicaid system lent itself to wrongdoing; and told 
the undercover investigator to lie about the amount of time spent with 
Respondent. However, as Judge Bittner notes in her opinion, the 
Respondent testified that he told the investigator that he accepted 
responsibility for the overbilling; that he did not tell the 
investigator that he read the Medicaid manual; that he did not recall 
stating that the Medicaid system lent itself to dishonesty; and that 
the tape recording of the last visit of the undercover officer did not 
indicate that Respondent told the investigator to lie, but on the 
contrary stated that ``[y]ou cannot lie.'' Judge Bittner then concluded 
that she could not find that the investigator's recollection of the

[[Page 65078]]

interview was more accurate than Respondent's, and therefore could not 
find that Respondent was lying in his explanation of his billing 
practices.
    The Acting Deputy Administrator agrees with Judge Bittner's 
conclusion. The Government continues to argue in its exceptions that it 
is significant that Respondent changed his story during his interview 
on June 11, 1992, regarding the amount of time spent with his Medicaid 
patients. The Acting Deputy Administrator does not find this troubling, 
since Respondent also stated during the interview that he was not one 
to look at his watch.
    The Administrative Law Judge found that even though Respondent was 
convicted for filing a false instrument, he was not estopped from 
denying that he knew that his billing was wrong since ``the doctrine of 
issue preclusion applies only to issues actually litigated in an 
earlier proceeding.'' Judge Bittner went on to conclude that since 
Respondent pled guilty, the element of his knowledge was not actually 
litigated.
    The Government filed an exception to this conclusion arguing that 
``it is axiomatic that one who pleas [sic] guilty admits to all 
essential elements of the offense * * * '' and that ``DEA has 
consistently over a long period of time construed a guilty plea as an 
admission of the elements of that offense.'' The Government expressed 
concern that to adopt the Administrative Law Judge's conclusion, ``DEA 
would now allow registrants and applicants to collaterally attack 
convictions based upon guilty pleas in administrative revocation 
proceedings.'' In its response to the Government's exceptions, 
Respondent's counsel argues that Respondent entered an Alford plea to 
the misdemeanor of filing a false record in a court that is not a court 
``of record'' and therefore there is no record surrounding Respondent's 
plea. Respondent maintain that all of the cases cited by the Government 
for the proposition that DEA should not ``go behind'' guilty please 
involved pleas to felony offenses which required an allocution in a 
court of record. Respondent further argues that by entering an Alford 
plea, Respondent ``pled to the underlying facts without acknowledging 
fraudulent intent in positioning those admitted acts.'' ``He did not 
admit to the offense, he admitted to the facts set forth in the 
indictment * * * (and t)here is no allocution on which to base a 
contrary finding inasmuch as he was allowed to plea in an arraignment 
court * * * .''
    The Acting Deputy Administrator cannot concur with the 
Administrative Law Judge's conclusion that if a registrant or 
applicant's conviction is the result of a guilty plea, he/she is not 
precluded from arguing in the administrative proceedings any issues 
relating to the conviction since they were not actually litigated in an 
earlier proceeding. As the Government points out in its exceptions, DEA 
has consistently construed a guilty plea as an admission of the 
elements of the offense. In Pearce v. United States Department of 
Justice, 867 F.2d 253 (6th Cir. 1988), a physician's revocation was 
affirmed where the physician argued that even though he pled nolo 
contendere to a drug related felony, he was not really guilty of the 
charges since the prescriptions in question were issued for a 
legitimate medical purpose. In rejecting the physician's argument, the 
United States Court of Appeals stated that:

    The statute, however, does not require the government to prove 
the substance of the criminal violation at the administrative 
hearing. The purpose of the hearing is not to give the petitioner a 
chance to go behind or to set aside a guilty plea, or the equivalent 
of a guilty plea, in this case. Id. at 255.

    However, the Acting Deputy Administrator is uncomfortable in this 
case with precluding Respondent from arguing that he did not intend to 
file false Medicaid claims. Respondent argues that he entered an Alford 
plea to the misdemeanor charge of filing a false instrument whereby he 
admitted the facts in the indictment, but not the elements of the 
offense. Respondent does not argue that there was no conviction, but 
argues that his plea was entered and accepted by a state arraignment 
court where there was no allocution surrounding the plea. Given the 
confusion over what exactly Respondent admitted, and without more 
evidence in the record regarding the exact circumstances surrounding 
Respondent's plea, the Acting Deputy Administrator is unable to 
determine if he's precluded from exploring Respondent's intent when 
filing the false claims. Consequently, the Acting Deputy Administrator 
has considered Respondent's explanation regarding his overbilling of 
Medicaid.
    The Acting Deputy Administrator finds that the Drug Enforcement 
Administration has previously held that misconduct, like that at issue 
in this proceeding, which does not involve controlled substances may 
constitute grounds under 21 U.S.C. 824(a)(5) for the revocation of a 
DEA Certificate of Registration. See Gilbert L. Franklin, D.D.S., 57 FR 
3441 (1992); George D. Osafo, M.D., 58 FR 37508 (1993); Nelson Ramirez-
Gonzalez, M.D., 58 FR 52787 (1993). However, in those cases, there were 
serious questions as to the integrity of the registrant.
    The Acting Deputy Administrator finds that in this case, Respondent 
advanced a plausible explanation for his overbilling, yet never denied 
that he did in fact overbill the Medicaid system. He has accepted full 
responsibility for the filing of the claims and has paid restitution to 
the State of New York. In addition, given the needs of the community in 
which he practices and the action already taken by the Department of 
Health and Human Services regarding his Medicaid privileges and by the 
State of New York regarding his license to practice medicine, the 
Acting Deputy Administrator agrees with Judge Bittner that revocation 
of Respondent's DEA registration is not appropriate.
    The Administrative Law Judge recommended that in light of 
Respondent's failure to comply with laws related to his medical 
practice, it is appropriate for DEA to monitor Respondent's handling of 
controlled substances. Judge Bittner therefore recommended that for 
three years following issuance of the final order, the following 
restriction be placed on Respondent's DEA registration:

    At the end of every calendar quarter, Respondent must submit a 
log of all controlled substances he has prescribed, administered, or 
otherwise dispensed during the previous quarter to the Special Agent 
in Charge of the nearest DEA office or his designee. The log shall 
include each patient's name, address, date of prescription or other 
dispensing, and the name and quantity of the controlled substance. 
The log shall be prepared by and signed by Respondent personally, 
except that he may ask an employee to verify its accuracy.

    The Government filed an exception to this recommended disposition, 
contending that since there are no allegations that Respondent 
improperly handled controlled substances, maintenance of a log would be 
unnecessary. The Acting Deputy Administrator disagrees with the 
Government and agrees with Judge Bittner ``that some controls are 
necessary to ensure that he complies with laws relating to his 
dispensing and prescribing controlled substances.''
    Accordingly, the Acting Deputy Administrator of the Drug 
Enforcement Administration, pursuant to the authority vested in him by 
21 U.S.C. 823 and 824, and 28 U.S.C. 0.100(b) and 0.104, hereby orders 
that DEA Certificate of Registration AH3517298, issued to Anibal P. 
Herrera, M.D., be continued, and any pending applications be granted, 
subject to the

[[Page 65079]]

above restriction. This order is effective December 10, 1996.

    Dated: December 2, 1996.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 96-31252 Filed 12-9-96; 8:45 am]
BILLING CODE 4410-09-M