10-000824PL Department Of Health, Board Of Medicine vs. Carlos S. Contreras, M.D. Status: Closed Recommended Order on Thursday, April 22, 2010.

Summary: Respondent violated 458.331(1)(c) when he was adjudicated guilty of conspiracy to commit health care fraud.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF HEALTH, BOARD OF )

MEDICINE, )

)

Petitioner, )

)

vs. ) Case No. 10-0824PL

)

CARLOS S. CONTRERAS, M.D., )

)

Respondent. )

)

RECOMMENDED ORDER

This case came before Larry J. Sartin, an Administrative

Law Judge of the Division of Administrative Hearings, on

March 19, 2010, by video teleconference between Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: Ephraim D. Livingston

Assistant General Counsel

Department of Health

4052 Bald Cypress Way, Bin C-65

Tallahassee, Florida 32399-3265

For Respondent: Craig A. Brand, Esquire

2816 East Robinson Street

Orlando, Florida 32083

STATEMENT OF THE ISSUES

The issues in this case are whether Respondent, Carlos S.

Contreras, M.D., violated Section 458.331(1)(c), Florida

Statutes (2008), as alleged in the Administrative Complaint,

filed with Petitioner, the Department of Health, on August 31,

2009, in DOH Case Number 2008-14221, and, if so, what

disciplinary action should be taken against his license to

practice medicine in the State of Florida.

PRELIMINARY STATEMENT

On or about August 31, 2009, the Department of Health filed

a one-count Administrative Complaint against Carlos S.

Contreras, M.D., an individual licensed to practice medicine in

Florida, before the Board of Medicine, in which it alleged that

Dr. Contreras had violated Section 458.331(1)(c), Florida

Statutes (2008). Dr. Contreras executed an undated Election of

Rights form in which he disputed the allegations of fact

contained in the Administrative Complaint and requested a formal

administrative hearing pursuant to Section 120.569(2)(a),

Florida Statutes. On or about September 28, 2009, Respondent

filed a Response to Administrative Complaint.

On February 16, 2010, the matter was filed with the

Division of Administrative Hearings with a request that an

administrative law judge be assigned the case to conduct

proceedings pursuant to Section 120.57(1), Florida Statutes

(2009). The matter was designated DOAH Case Number 10-0824PL

and was assigned to the undersigned.

On February 23, 2010, a Notice of Hearing was entered

scheduling the final hearing to be held in Miami, Florida, on

March 19, 2010. On March 12, 2010, an Amended Notice of Hearing

by Video Teleconference was entered. The Amended Notice

modified the Notice of Hearing by scheduling the hearing to be

conducted by video teleconference between sites in Miami and

Tallahassee.

On March 17, 2010, the parties filed a Joint Pre-Hearing

Stipulation which contains “facts which are admitted.” Those

facts have been included in this Recommended Order.

At the final hearing, Petitioner had three exhibits

admitted. Respondent presented the testimony of Joseph

Rosenbaum, Esquire, counsel for Dr. Contreras in the criminal

proceedings at issue in this case.

On April 6, 2010, a Notice of Filing Transcript was entered

informing the parties that the Transcript had been filed and

that their proposed recommended orders were to be filed on or by

April 12, 2010. Petitioner filed Petitioner’s Proposed

Recommended Order timely. Respondent filed Respondent’s

Proposed Recommended Order the morning of April 13, 2010. It

does not appear that the late filing of Respondent’s Proposed

Recommended Order prejudiced Petitioner. Therefore, the post-

hearing proposals of both parties have been fully considered in

rendering this Recommended Order.

All references to Florida Statutes in this Recommended

Order are to the 2008 version, unless otherwise indicated.

FINDINGS OF FACT

A. The Parties .

1. Petitioner, the Department of Health (hereinafter

referred to as the "Department"), is the agency of the State of

Florida charged with the responsibility for the investigation

and prosecution of complaints involving physicians licensed to

practice medicine in Florida. § 20.43 and Chs. 456 and 458,

Fla. Stat.

2. Respondent, Carlos S. Contreras, M.D., is, and was at

all times material to this matter, a physician licensed to

practice medicine in Florida pursuant to Chapter 458, Florida

Statutes, having been issued license number 43908, on or about

May 19, 1984.

B. Indictment and Conviction of Dr. Contreras .

3. On or about June 2, 2008, Dr. Contreras was indicted in

United States of America v. Carlos Contreras and Ramon Pichardo ,

United States District Court, Southern District of Florida, Case

No. 08-20443 CR - Moreno (hereinafter referred to as the

"Indictment").

4. Generally, the Indictment alleges that Dr. Contreras

was involved in a conspiracy to submit fraudulent claims to

Medicare for purported Human Immunodeficiency Virus infusion

therapy.

5. As it relates to Dr. Contreras, the Indictment was

predicated, in part, upon the following “General Allegation”:

6. C.N.C. Medical Corp. (“CNC

Medical”) was a Florida corporation,

purportedly doing business at 1393 S.W.

1 st Avenue, Suite #320, Miami, Florida.

. . . CNC Medical was a medical clinic

that purported to specialize in treating

patients with HIV by providing infusion

therapy. From in and around November

2002 through in or around April 2004,

approximately $6.8 million in claims

were submitted to the Medicare program

for HIV infusion services allegedly

rendered at CNC Medical.

7. Defendant CONTRARES , a resident of

Miami-Dade County, was a medical doctor

who purported to order and provide HIV

infusion services to Medicare

beneficiaries at CNC Medical. CONTRERAS

was also the president, director, and

registered agent of CNC Medical.

6. Relevant to this matter, Count 2 of the 12-Count

Indictment charged Dr. Contreras with conspiracy to commit

health care fraud in violation of 18 U.S.C. § 1349

7. On or about September 11, 2008, Dr. Contreras entered

into a Plea Agreement in which he pled guilty to Count 2 of the

Indictment, thereby admitting that he was guilty of “knowingly

and willfully conspiring with others to execute a scheme and

artifice to defraud and to obtain by means of materially false

and fraudulent pretenses, representations, and promises money

owned by, and under the custody and control of a health care

benefits program (as defined as [sic] in Title 18, United States

Code, Section 24(b)), in violation of Title 18, United States

Code, Section 1347.”

8. On the same date that the Plea Agreement was executed,

Dr. Contreras, along with his legal representative, executed and

acknowledged the following “Agreed Factual Basis for Guilty

Plea”:

Beginning in approximately November 2002,

and continuing through approximately April

2004, the defendant, Dr. Carlos Contreras

(“Contreras”), willfully conspired with his

co-defendants, Ramon Pichardo, Carlos

Benitez, Luis Benitez, Thomas McKenzie, and

others to commit health care fraud, in

violation of 18 U.S.C. § 1349. Medicare is

a “health care benefit program” of the

United States, as defined in 18 U.S.C. § 24.

Furthermore, Medicare is a health care

benefit program affecting commerce.

Contreras was a medical doctor and owned a

medical clinic named CNC Medical Corp.

(“CNC”). At CNC, Contreras also employed

Dr. Ramon Pichardo. CNC purported to

specialize in treating patients with Human

Immunodeficiency Virus (“HIV”). From

approximately November 2002 through

approximately April 2004, Contreras approved

approximately $6.8 million worth of

fraudulent medical bills, signed documents

containing false information about

treatments purportedly provided to HIV

patients, and approved medically unnecessary

treatments. As a result of Contreras’

conduct, the Medicare Program (“Medicare”)

paid approximately $4.2 million worth of

fraudulent bills to CNC and Contreras.

CNC was a Florida corporation purportedly

doing business at 1393 S.W. 1 st Street, Suite

#320, Miami, Florida. Corporate records

display a business address of 1383 S.W. 1 st

Street, Suite #320, Miami, Florida. From

approximately November 2002 through

approximately April 2004, CNC billed the

Medicare Program approximately $6.8 million

under Contreras’ Medicare provider number,

and actually received approximately $4.2

million in payments. Contreras signed

checks drawn on CNC bank accounts and would

use these checks to transfer funds to

various corporate entities owned and

controlled by Carlos and Luis Benitez, and

others. In total, Contreras transferred

approximately $1.7 million dollars [sic] to

the Benitez brothers.

In or about November 2002, Contreras

agreed with his co-conspirators, including

Dr. Ramon Pichardo, Carlos Benitez, Luis

Benitez, and Thomas McKenzie, to accept HIV

patients at CNC and to allow fraudulent

bills to be submitted to the Medicare

Program under his provided number. Co-

conspirators Carlos Benitez and Luis Benitez

agreed to provide the staff necessary to

operate CNC as an HIV infusion clinic, the

Medicare patients that CNC would utilize to

bill to the Medicare program, and the

transportation for the HIV patients, in

return for a share of CNC’s profits. At

that time, Contreras knew that CNC would

need to pay kickbacks to the patients who

visited the clinics, and that the CNC would

bill Medicare for HIV infusion services

three times a week, for up to three months,

for each patient.

Contreras’s primary job at the CNC was to

see patients, sign medical records, and

approve expensive and medically unnecessary

HIV infusion treatments. Prior to

purportedly treating HIV patients at CNC,

Contreras worked at one other Benitez

controlled HIV infusion therapy clinic,

named AH Medical Office, Inc. At th[is

clinic], he learned from the Benitez

brothers and McKenzie how to make medical

records appear legitimate and how to

authorize treatments and sign medical

analysis and diagnosis forms for HIV

patients, without regard to medical

necessity or the patients’ particular

ailments. Contreras authorized and approved

the use of the drug WinRho (also known as

Rho D), along with a mix of various vitamin

supplements for most HIV patients he was

seeing, knowing that the HIV patients did

not need WinRho.

. . . .

9. The Agreed Factual Basis for Guilty Plea executed by

Dr. Contreras contained the following acknowledgement just above

his signature:

The preceding statement is a summary, made

for the purpose of providing the Court with

a factual basis for my guilty plea to the

charges against me. It does not include all

of the facts known to me concerning criminal

activity in which I and others engaged. I

make this statement knowingly and

voluntarily and because I am in fact guilty

of the crimes charged.

10. On or about November 20, 2008, Dr. Contreras entered a

plea of “guilty” to Count 2 of the Indictment. The court

adjudicated him guilty, dismissed the other charges, and

sentenced Dr. Contreras consistent with the Plea Agreement. At

the time of the final hearing of this matter, Dr. Contreras was

in the custody of the United States Bureau of Prisons serving a

37-month sentence.

11. Based upon the admissions contained in the Agreed

Factual Basis for Guilty Plea quoted in Finding of Fact 8, it is

clear that the crime for which Dr. Contreras’ was adjudicated

guilty involved a conspiracy in which he actually engaged in

health care fraud, and not just a plan to do so.

C. The Relationship of Dr. Contreras’ Convictions to the

Practice of Medicine .

12. In light of Dr. Contreras’ guilty plea to Count 2 of

the Indictment and his acknowledgement of the Agreed Factual

Basis for Guilty Plea, there is no doubt that Dr. Contreras

engaged in the activities outlined in the Agreed Factual Basis

for Guilty Plea. It is also clear that all of those activities

related to the practice of medicine.

13. As the Department points out in Petitioner’s Proposed

Recommended Order, “[b]ut for Respondent’s license to practice

medicine in the state of Florida, he would not have been able to

commit the crimes [sic] for which he pled guilty. It was his

license to practice medicine that allowed him to work as a

physician at CNC Medical Corp., to obtain a [Medicare] provider

number, to see patients, to sign medical records, to approve

expensive and medically unnecessary HIV infusion treatments and

to fully participate in the Medicare program. The foregoing

activities were made possible and were a direct result of his

status as a licensed Florida physician.” Without his license to

practice medicine, there could have been no conspiracy to commit

health care fraud.

14. Dr. Contreras relies upon a number of “facts” in

support of his argument that the crime for which he pled guilty

does not relate directly to the practice of medicine:

a. First, Dr. Contreras argues that the crime involved

“conspiracy” to commit health care fraud rather than the actual

act of health care fraud. Even if technically correct, the

Agreed Factual Basis for Guilty Plea clearly outlines activities

involving medical care necessary for the conspiracy to exist.

Additionally, but for his license to practice medicine, there

would have been no conspiracy;

b. Secondly, Dr. Contreras points out that no restrictions

were placed on his practice of medicine or his involvement in

the Medicare Program or the Medicaid Program in the Plea

Agreement. While correct, the emphasis of the criminal matter

was on Dr. Contreras’ activities relating to defrauding the

United States government of millions of dollars, rather than his

activities as a physician. The government’s interest was a

financial one and, therefore, it correctly left his actual

practice of medicine to the governmental agencies charged with

the responsibility of regulating the practice of medicine;

c. Thirdly, Dr. Contreras points out that the Plea

Agreement makes no mention of any breach of the physician-

patient relationship. Again, the emphasis of the criminal

rather than the quality or lack thereof of his medical care; and

d. Finally, Dr. Contreras relies upon the testimony of

Joseph S. Rosenbaum, Esquire, who represented Dr. Contreras in

the criminal matter. According to Dr. Contreras,

Mr. Rosenbaum’s testimony was presented in order to “explain the

meaning of the documents and background (facts) of the

underlying criminal case.” According to Mr. Rosenbaum,

businessmen more clever and ruthless then the Respondent.”

Mr. Rosenbaum’s testimony, for which little in the way of

predicate was offered, is rejected as contrary to the facts

stipulated to by Dr. Contreras quoted in Finding of Fact 8.

15. The crime for which Dr. Contreras was convicted is a

crime that “directly relates to the practice of medicine.”

CONCLUSIONS OF LAW

A. Jurisdiction .

16. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569, 120.57(1), and

456.073(5), Florida Statutes (2009).

B. The Charges of the Administrative Complaint .

17. Section 458.331(1), Florida Statutes, authorizes the

Board of Medicine (hereinafter referred to as the "Board"), to

impose penalties ranging from the issuance of a letter of

concern to revocation of a physician's license to practice

medicine in Florida if a physician commits one or more acts

specified therein.

18. In its Administrative Complaint, the Department has

alleged that Dr. Contreras has committed the act described in

Section 458.331(1)(c), Florida Statutes.

C. The Burden and Standard of Proof .

19. The Department seeks to impose penalties against

Dr. Contreras, through the Administrative Complaint, that

include suspension or revocation of his license and/or the

imposition of an administrative fine. Therefore, the Department

has the burden of proving the specific allegations of fact that

support its charge that Dr. Contreras violated Section

458.331(1)(c), Florida Statutes, by clear and convincing

evidence. Department of Banking and Finance, Division of

Securities and Investor Protection v. Osborne Stern and Co. , 670

So. 2d 932 (Fla. 1996); Ferris v. Turlington , 510 So. 2d 292

(Fla. 1987); Pou v. Department of Insurance and Treasurer , 707

So. 2d 941 (Fla. 3d DCA 1998); and Section 120.57(1)(j), Florida

Statutes (2009)("Findings of fact shall be based on a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute.").

20. What constitutes "clear and convincing" evidence was

described by the court in Evans Packing Co. v. Department of

Agriculture and Consumer Services , 550 So. 2d 112, 116, n. 5

(Fla. 1st DCA 1989), as follows:

. . . [C]lear and convincing evidence

requires that the evidence must be found to

be credible; the facts to which the

witnesses testify must be distinctly

remembered; the evidence must be precise and

explicit and the witnesses must be lacking

in confusion as to the facts in issue. The

evidence must be of such weight that it

produces in the mind of the trier of fact

the firm belief or conviction, without

hesitancy, as to the truth of the

allegations sought to be established.

Slomowitz v. Walker , 429 So. 2d 797, 800

(Fla. 4th DCA 1983).

See also In re Graziano , 696 So. 2d 744 (Fla. 1997); In re

Davey , 645 So. 2d 398 (Fla. 1994); and Walker v. Florida

Department of Business and Professional Regulation , 705 So. 2d

652 (Fla. 5th DCA 1998)(Sharp, J., dissenting).

D. Section 458.331(1)(c), Florida Statutes .

21. Section 458.331(1)(c), Florida Statutes, defines the

following disciplinable offense:

(c) Being convicted or found guilty of,

or entering a plea of nolo contendere to,

regardless of adjudication, a crime in any

jurisdiction which directly relates to the

practice of medicine or to the ability to

practice medicine.

In the Administrative Complaint, the Department alleges that

Dr. Contreras violated Section 458.331(1)(c), Florida Statutes,

when he was adjudicated guilty of conspiracy to commit health

care fraud.

22. The evidence has clearly and convincingly proven that

Dr. Contreras has been convicted of a crime that relates to his

practice of medicine as alleged in the Administrative Complaint

and described in the Findings of Fact. Dr. Contreras’ license

to practice medicine constituted the foundation of his

adjudication of guilt for conspiracy to commit health care

fraud. It was his license to practice medicine that allowed him

to work as a physician at CNC Medical Corp., to obtain a

Medicare provider number, to see patients, to sign medical

records, to approve expensive and medically unnecessary HIV

infusion treatments and to fully participate in the Medicare

program. Without his license to practice medicine, there could

have been no conspiracy to commit health care fraud. These were

the facts that formed the bases for Dr. Contreras’ guilty plea

and adjudication of guilt, and they clearly related to his

practice of medicine.

23. The evidence proved clearly and convincingly that

Dr. Contreras violated Section 458.331(1)(c), Florida Statutes.

E. The Appropriate Penalty .

24. In determining the appropriate punitive action to

recommend to the Board in this case, it is necessary to consult

the Board's "disciplinary guidelines," which impose restrictions

and limitations on the exercise of the Board's disciplinary

authority under Section 458.331, Florida Statutes. See Parrot

Heads, Inc. v. Department of Business and Professional

Regulation , 741 So. 2d 1231 (Fla. 5th DCA 1999).

25. The Board's guidelines for a violation of Section

458.331, Florida Statutes, are set out in Florida Administrative

Code Rule 64B8-8.001. As it relates to Dr. Contreras’ violation

of Section 458.331(1)(c), Florida Statutes, Florida

Administrative Code Rule 64B8-8.001(2)(c) provides the following

penalty range for a first time violation:

From probation to revocation or denial of

the license, an administrative fine ranging

from $1,000.00 to $10,000.00, and 50 to 100

hours of community service.

For a crime related to health care fraud in dollar amounts in

excess of $5,000.00, the penalty range provided in Florida

Administrative Code Rule 64B8-8.001(2)(c)1. is “[r]evocation or

in the case of application for licensure, denial of licensure

and a fine of $10,000.00.”

26. Florida Administrative Code Rule 64B8-8.001(3)

provides that, in applying the penalty guidelines, the following

aggravating and mitigating circumstances are to be taken into

account:

(a) Exposure of patient or public to

injury or potential injury, physical or

otherwise: none, slight, severe, or death;

(b) Legal status at the time of the

offense: no restraints, or legal

constraints;

(c) The number of counts or separate

offenses established;

(d) The number of times the same offense

or offenses have previously been committed

by the licensee or applicant;

(e) The disciplinary history of the

applicant or licensee in any jurisdiction

and the length of practice;

(f) Pecuniary benefit or self-gain

inuring to the applicant or licensee;

(g) The involvement in any violation of

Section 458.331, F.S., of the provision of

controlled substances for trade, barter or

sale, by a licensee. In such cases, the

Board will deviate from the penalties

recommended above and impose suspension or

revocation of licensure.

(h) Where a licensee has been charged

with violating the standard of care pursuant

to Section 458.331(1)(t), F.S., but the

licensee, who is also the records owner

pursuant to Section 456.057(1), F.S., fails

to keep and/or produce the medical records.

(i) Any other relevant mitigating

factors.

27. Taking into consideration the foregoing aggravating

and mitigating circumstances, the Department’s requested penalty

is consistent with the Board’s penalty guidelines.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the a final order be entered by the Board

of Medicine finding that Carlos S. Contreras, M.D., has violated

Section 458.331(1)(c), Florida Statutes, as described in this

Recommended Order, permanently revoking his license to practice

medicine in Florida, and imposing a fine of $10,000.00.

DONE AND ENTERED this 22nd day of April, 2010, in

Tallahassee, Leon County, Florida.

___________________________________

LARRY J. SARTIN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of April, 2010.

COPIES FURNISHED:

Ephraim D. Livingston, Esquire

Department of Health

4052 Bald Cypress Way, Bin C65

Tallahassee, Florida 32399-3265

Craig Brand, Esquire

Brand Law Firm, P.A.

2816 East Robinson Street, Second Floor

Orlando, Florida 32802

Larry McPherson, Executive Director

Board of Medicine

Department of Health

4052 Bald Cypress Way

Tallahassee, Florida 32399-3265

Dr. Ana M. Viamonte Ros, Secretary

Department of Health

4052 Bald Cypress Way, Bin A00

Tallahassee, Florida 32399-1701

Josefina M. Tamayo, General Counsel

Department of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399-1701

R. S. Power, Agency Clerk

Department of Health

4052 Bald Cypress Way, Bin A02

Tallahassee, Florida 32399-1701

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in these cases.