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

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