Timothy L. Stern, M.D., DAB No. 1314 (1992) Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Appellate Division _________________________ ) In the Case of: ) DATE: March 18, 1992 ) The Inspector General ) Docket Nos. C-119 and ) C-177 - v. - ) Decision No. 1314 ) Timothy L. Stern, M.D., ) ) Respondent. ) _________________________) FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION Both Timothy L. Stern, M.D. (Respondent), and the Inspector General (I.G.) of the Department of Health and Human Services requested review by an Appellate Panel of the Departmental Appeals Board of an October 10, 1991 decision by Administrative Law Judge (ALJ) Charles E. Stratton. See Timothy L. Stern, M.D., DAB CR154 (1991) (ALJ Decision). The ALJ affirmed a determination by the I.G. that Respondent had violated section 1128A of the Social Security Act. The ALJ imposed a civil monetary penalty of $140,000 on Respondent, ordered Respondent to pay an assessment of $45,000, and excluded Respondent from participation in the Medicare and Medicaid programs for a period of seven years. SUMMARY OF OUR DECISION Based on the analysis below, we affirm the ALJ's finding that Respondent submitted claims to Medicare for services which he knew, should have known or had reason to know were not provided as claimed. There is substantial evidence in the record that supports the ALJ's decision that Respondent performed acupuncture treatments on his patients but nevertheless submitted claims for services described generally as local nerve blocks and office visits when Respondent knew, had reason to know or should have known that these services were not provided as claimed. We find that the ALJ, in reaching this decision, was not biased. We, however, remand this case to the ALJ for the sole purpose of reconsidering the sanctions to be imposed. In his re-evaluation the ALJ should substantiate the sanctions in light of the factors identified in the statute and regulations. The ALJ should also clarify whether any of 14 claims should be deleted from the number of claims that would justify sanctions and should take into account our deletions and modifications in the FFCLs concerning mitigating factors. BACKGROUND Statutory and Regulatory Framework 1/ Section 1128A of the Social Security Act (Act), the Civil Monetary Penalties Law (CMPL), authorizes imposition of penalties and assessments on persons who submit false claims to the Medicare program or State health care programs (Medicaid) or who engage in other activities which adversely affect the integrity of the program or the quality of care provided. Section 1128A(a) establishes liability for any person that -- (1) presents or causes to be presented . . . a claim . . . that the Secretary determines -- (A) is for a medical or other item or service that the person knows or should know was not provided as claimed [.] The CMPL provides that such an individual shall be subject to a civil penalty of up to $2,000 for each such item or service, as well as an assessment of up to twice the amount claimed for each item or service in lieu of damages sustained by the United States because of the claim. Section 1128A(a) of the Act; 42 C.F.R. 1003.103 and 1003.104. In addition, the Secretary may exclude the individual from participation in the Medicare and Medicaid programs. Section 1128A(a) and 42 C.F.R. 1003.105. In determining the appropriate amount of penalty and assessment to be imposed and the appropriate period of exclusion, the regulations, reflecting section 1128A(d) of the Act, direct the finder of fact to take into account the following factors: 1) The nature of the claim or request for payment and the circumstances under which it was presented; 2) The degree of culpability of the persons submitting the claim or request for payment; 3) The history of prior offenses of the person submitting the claim or request for payment; 4) The financial condition of the person presenting the claim or request for payment; and 5) Such other matters as justice may require. 42 C.F.R. 1003.106(a). Guidelines for taking into account the above factors, which describe circumstances in connection with those factors which can be mitigating or aggravating, are set forth in 42 C.F.R. 1003.106(b) and (c). The I.G. has the burden of proving by a preponderance of the evidence Respondent's liability under the CMPL. 42 C.F.R. 1003.114(a). Respondent, on the other hand, has the burden of producing and proving by a preponderance of the evidence any circumstances that would justify reducing the amount of the penalty or assessment, or the period of exclusion. 42 C.F.R. 1003.114(d). Case History 2/ Respondent, a medical doctor, received a certification from New York State in 1979 to practice acupuncture. In 1980 Respondent opened, as its sole practitioner, a pain clinic in Rochester, New York, called Rochester Pain Medicine. During the years 1983 through 1986 Respondent submitted 688 claims, involving 31 Medicare beneficiaries, to Medicare for services which the I.G. later determined were not performed as claimed. 3/ These claims represented $35,324 in services Respondent provided at Rochester Pain Medicine and submitted to Medicare for reimbursement. In each patient encounter that resulted in a claim, Respondent performed an acupuncture procedure. 4/ Acupuncture is not a covered service under the Medicare program. On the Medicare claim forms he submitted, Respondent generally described his services performed as either a "local nerve block" or an "office visit." On January 18, 1989, the I.G. proposed to impose against Respondent civil monetary penalties of $425,000, an assessment of $70,648, and an exclusion from participation in the Medicare and Medicaid programs for a 20-year period. Discussing the factors, as specified in 42 C.F.R. 1003.106 and 1003.107, considered in determining these amounts and the duration of the exclusion, the I.G. listed several aggravating factors and no mitigating factors. On March 15, 1989, Respondent requested a hearing before an ALJ. The ALJ held a hearing and issued his decision on October 10, 1991. 5/ Summary of the ALJ's Decision The ALJ Decision was supported by 191 Findings of Fact and Conclusions of Law (FFCLs). Generally, the ALJ determined that for 688 Medicare claims Respondent performed acupuncture services, a non-reimbursable service under the Medicare program. Respondent, however, when filling out Medicare claim forms, listed his services as either "office visits," "local nerve blocks," or "consultations." The ALJ determined that all of the 688 claims were false or improper under the CMPL, and that Respondent had the requisite intent when he filed the false claims. The ALJ found that Respondent knew that a true and accurate description of the services he provided would result in denial of Medicare reimbursement, so that Respondent, with disregard for the Medicare regulations, submitted claims which he knew, had reason to know or should have known, were false or improper as to the types of services provided. The ALJ further found that while the I.G. had proved some significant aggravating circumstances, Respondent also proved some mitigating factors. Additionally, the ALJ determined that there were no constitutional, jurisdictional, or procedural barriers to the I.G.'s bringing of this action against Respondent. The ALJ imposed a civil monetary penalty of $140,000 on Respondent, an additional assessment of $45,000, and excluded Respondent from the Medicare and Medicaid programs for seven years. The Parties' Proposed Exceptions to the ALJ's Decision Respondent petitioned the Panel to review eight exceptions to the ALJ's decision. The I.G. requested that the Panel review three categories of exceptions. The Panel determined to review five exceptions taken by Respondent and described by him as follows: o The ALJ cites "drug addiction" as a mitigating factor in reducing the penalty but does not treat it in the appropriate fashion. o The ALJ contradicts himself in his discussion of "office visits" and he ignores the arguments which make them a legitimate Medicare charge. o The ALJ is confused about Respondent's arguments in favor of charging Medicare for "local infiltration of anesthesia." o The ALJ completely dismisses all of Respondent's major witnesses as not being credible. o The ALJ did not allow "due process" to take place in his decision, since he did not address any of the 695 claims specifically. The Panel determined to review the following exceptions made by the I.G.: o The ALJ erred in finding certain mitigating circumstances -- A. Evidence of Respondent's drug addiction. B. Evidence that "other services" were provided. C. Evidence of impact on beneficiaries. o The ALJ erred by improperly applying established criteria and failing to consider certain evidence in determining the sanctions to be imposed -- A. The purpose of the CMPL is to provide the Secretary a mechanism to deter fraud and abuse and to recover damages sustained as a result of fraud and abuse. B. Established statutory and regulatory criteria dictate how penalties and assessments are to be determined. C. The ALJ has departed from established criteria in determining the appropriate penalties and assessments to be imposed. D. The ALJ has departed from established criteria in determining the length of exclusion to be imposed. ANALYSIS Below we have, where appropriate, consolidated several of the exceptions for our analysis. Thus, where a party's exceptions overlap, or where both parties have taken exception to the same general finding by the ALJ, we have considered those exceptions together. Office Visits and Local Nerve Blocks The central issue before the ALJ was whether Respondent had performed the services for which he submitted claims to the Medicare program. Respondent had submitted claims listing the services performed as either "local nerve block" or "office visit" or "consultation." 6/ None of the claims had the service provided described as acupuncture or electro-acupuncture. Medicare disallowed the claims on the basis that Respondent's services actually were acupuncture treatments, a service not covered under the Medicare program. During a lengthy hearing the ALJ heard the testimony of numerous witnesses, including other doctors, patients, I.G. investigators, employees of the local Medicare carrier, and Respondent himself. The ALJ accepted into evidence numerous medical records concerning the patients whose claims were at issue. From this testimony and evidence the ALJ concluded that Respondent had in fact performed a type of acupuncture, electro-acupuncture, on his patients and had disguised the acupuncture treatments on the Medicare claim forms by describing his treatments as either local nerve blocks or office visits. In support of this determination the ALJ made a number of FFCLs, including: 7/ 17. In each patient encounter that resulted in a claim, Respondent performed either electro-acupuncture or a procedure he called "electrical stimulation," which consisted of inserting 4-16 acupuncture needles into the skin at various areas of the body, attaching the needles to an electric current source using electrodes and wires, and applying electric current to the needles for 10-20 minutes. 8/ 18. During some of the patient encounters resulting in claims at issue, Respondent injected the electrically stimulated area with a small amount of an anesthetic agent called "marcaine," just prior to the electro-acupuncture treatments. 83. Office visits, like all services, must be medically necessary in order to be reimbursed by Medicare. 85. Under Medicare, a doctor is not entitled to reimbursement for an office visit simply based on the amount of time he spent with the patient; there must be some medically necessary service provided, including documentation of that service. 86. As a general rule, Medicare regulations would not provide reimbursement for an office visit if the only purpose of the visit were a non-covered service such as acupuncture; an office visit would be allowed and reimbursed for other medically necessary services rendered in addition to a non-covered service. 97. Respondent's records reflect that he was providing electro-acupuncture to his patients rather than the services claimed. 101. Many of the notations of "marcaine" in Respondent's medical records were added to the records after the original notations that electro-acupuncture had been performed. 127. Respondent added local injections of marcaine to his electro-acupuncture therapy only because he felt the injection of an anesthetic agent would legitimize his claims as nerve blocks. The ALJ stated in his discussion: I conclude that Respondent's patients came to him primarily for the alleviation of pain and that Respondent alleviated their pain by performing some form of electro-acupuncture. His local injection of marcaine or anesthesia was an adjunct to his electro-acupuncture treatments; it was done to assure reimbursement and was not medically necessary, within the meaning of the Medicare rules. ALJ Decision at 31. On appeal Respondent contended that the ALJ was totally confused about the services for which Respondent claimed Medicare reimbursement. While acknowledging that he performed electro-acupuncture on his patients, Respondent denied that he ever sought reimbursement from Medicare for acupuncture treatments. Rather, Respondent maintained that the claims he submitted were for legitimate, Medicare-covered services that he rendered to his patients in addition to acupuncture. Respondent argued that the ALJ's confusion is shown by the fact that the ALJ, while finding as a mitigating factor that Respondent did in fact perform other reimbursable services for his patients (discussed below), nevertheless determined that the questioned claims were contrivances to mask the acupuncture treatments and that all the other medical services provided at the time of the acupuncture treatment were therefore unreimbursable. Respondent contended that even if the reimbursable medical services he provided were combined with unreimbursable procedures, Respondent is entitled to charge Medicare for the reimbursable part of the treatment. Respondent additionally argued that the ALJ misunderstood the issue concerning Respondent's administration of nerve blocks to his patients. Respondent contended that he injected .25 ccs of marcaine into his patients and listed this procedure under the code W3600, local infiltration of anesthesia, in his claims to Medicare. Respondent contended that the ALJ became sidetracked as to the question of whether .25 ccs of marcaine could be considered a nerve block when the real issues were whether Respondent actually administered the marcaine and whether Respondent misrepresented the injections in his records and claims. Our review of the record and of the parties' arguments on appeal convince us that there is substantial evidence to support the ALJ's findings that Respondent did not provide nerve blocks and office visits as claimed. 9/ The ALJ properly emphasized that in order for there to be reimbursement by Medicare the services provided must be medically necessary and supported by appropriate documentation. The ALJ found that Respondent's treatments for which he submitted claims were either not medically necessary or unsupported by documentation. Respondent's attempts to portray his services as reimbursable local nerve blocks or office visits simply do not stand up in light of the numerous factors identified in the FFCLs, including the way Respondent operated his medical practice. Respondent's office activities clearly demonstrate that Respondent contrived with the requisite intent to submit claims to Medicare for services that were not provided as claimed. Respondent knew that the Medicare program did not consider acupuncture treatments to be medically necessary and therefore did not cover acupuncture services. The record shows that Respondent attempted to get around this bar on acupuncture reimbursement by submitting claims for services other than acupuncture. Respondent required his patients to pay him immediately for each treatment. FFCL No. 29. All the patients, in a survey conducted by the United States Probation Office in preparation for Respondent's sentencing for his 1987 conviction, stated that they were told by Respondent or a member of his staff on their initial visit to Rochester Pain Medicine that Medicare would cover a large percentage of the costs of each treatment. I.G. Exhibits (Exs.) 1-31. The patients described the nature of the treatment they received from Respondent as acupuncture or electrical stimulation. Id. Respondent (or his employees) would then complete the Medicare claims form and the patients were told that they would receive reimbursement later from Medicare. Nearly all the patients indicated in the survey that they would not have come to Respondent for treatment if they had known that Medicare would not reimburse them for the acupuncture treatments. Id. It is evident from this survey why Respondent undertook the course of action that led him to submit claims for local nerve blocks and office visits. Respondent would have lost a lucrative part of his practice if his patients were not reimbursed by Medicare for visiting him for treatment. Therefore, Respondent told his patients that Medicare would reimburse them for most of the costs of the treatment they received from Respondent. If the patients did not receive reimbursement from Medicare, they would cease utilizing Respondent's services. Therefore Respondent had to devise a plan to circumvent Medicare's ban on reimbursement of acupuncture treatments. Respondent did this by establishing an office policy on billing procedures. This clear-cut pattern of Respondent's claiming for his services undermines his position that he provided the services he claimed. Respondent's office manager testified that prior to 1984 staff of the local Medicare carrier had instructed her to bill Respondent's services as local nerve blocks under the procedure code 52980. Tr.II at 1096. No claims were submitted during this period as office visits. Id. at 1097. The office manager further testified that during a March 1985 meeting with staff of the local Medicare carrier she and Respondent were informed that Respondent could claim the first six office procedures with a patient as local nerve blocks, under procedure code W3600, with all the remaining treatments claimed as office visits. Id. at 1117. A memorandum prepared a week later after the meeting by an employee of the carrier, however, contradicted the office manager's testimony. The memorandum declares that the criteria for office visits was discussed and that Respondent was informed that: [T]he service must be reasonable and medical necessity must exist for the condition. . . . no less than a blood pressure check, weight, temperature and "hands on" physical examination of area/areas of patient complaint or concern is required. History and physical examination must be documented in patients' records. I.G. Ex. 47, at 1. This memorandum further states that Respondent was informed that Medicare allows two diagnostic nerve blocks a year per patient, and up to six localized infiltrations of anesthesia per year, provided that "the dosage, type of medication, and area injected must be noted in patients' records." Id. The ALJ found that the testimony of the office manager was not objective and that Respondent had failed to prove his assertions about the instructions he received from the carrier. FFCL Nos. 116-122. Respondent admitted that his billing practice for each of his pain patients was to claim the initial visit as a consultation, the next six visits by each patient as local nerve blocks, and each subsequent treatment as an office visit. Tr.II at 1591. Respondent's medical records for his patients, however, do not support Respondent's claim that he administered nerve blocks nor do they describe what occurred during the office visits. The ALJ found that the medical records for most of the patients had been augmented at some later time by the addition of a notation of .25 ccs of marcaine for each visit where a local nerve block was alleged to have been administered. FFCL No. 101; see, e.g., I.G. Ex. 27-4, at 5. Later, when Respondent submitted a claim to Medicare for a local nerve block, Respondent attached a typewritten statement labeled "Operative Report." This statement invariably read that the patient had been administered a superficial nerve block with an injection of marcaine "to interrupt the pain pathway to the central nervous system to decrease any inflammation locally, and to increase blood flow locally." See, e.g., I.G. Ex. 25-1, at 2. There was no information in the medical records, however, apart from the after-the-fact notation of .25 ccs of marcaine, that documents the actual administration of a nerve block. The ALJ noted that medical experts had testified that the proper record of a nerve block should include considerable information: diagnosis; caliber and length of needle used; region of the body injected; type, amount, and concentration of drug used; and what happened after the administration of the block. ALJ Decision at 37. There was nothing in the medical records that reflected the activity described in the Operative Reports submitted by Respondent. Contrary to Respondent's arguments, we find that the ALJ properly examined the question of whether an injection of .25 ccs of marcaine could be considered a nerve block. That issue goes directly to whether Respondent actually intended to perform a nerve block or was merely using the marcaine as justification for the submission of a claim. In the latter case there would be no medical necessity for the injection of the marcaine. Respondent testified that 100 percent of his patients were receiving nerve blocks of .25 ccs or more of marcaine along with their electrical stimulation treatments. Tr.II at 1440-1441. Respondent's patients stated the treatment they received from Respondent was acupuncture or electrical stimulation, not nerve blocks. I.G. Exs 1-31. Respondent was submitting claims, up to six per patient each year, that he was in fact providing such nerve blocks. The ALJ was convinced by the testimony of medical experts at the hearing that such a limited dosage of marcaine could not constitute, medically, a nerve block and that the terms "local" or "superficial nerve block" have no medical meaning. FFCL Nos. 74 and 123. We have no reason to disturb the ALJ's findings on the credibility of these witnesses. It is readily apparent that if Respondent did, in fact, administer marcaine to his patients, the marcaine was not intended to be an independent treatment, but rather to serve as justification for Respondent's claim to Medicare. The fact that notations adding the word "marcaine" were placed in the patients' records at a date later than the purported treatment demonstrates that the marcaine was not the primary treatment administered at the visit and, in fact, further calls into question whether the patients were ever actually administered marcaine. Even if it were true that the patients were administered marcaine, Respondent failed to document that there was any medical necessity for the local infiltration of marcaine, thus rendering any such claim unreimbursable under Medicare policies. Furthermore, although Respondent claimed that he provided other reimbursable services to his patients during the office visits for which he submitted claims to Medicare, it is striking that the claims for these "office visits" began only after a patient exhausted the reimbursable limit of six localized infiltrations of anesthesia. We conclude that the evidence fully supports the ALJ's finding that these "office visits" were nothing more than acupuncture treatments. The patient surveys indicate that for the most part patients came to Respondent for acupuncture treatments only and not for any other services. An official of the local carrier testified that Medicare policy prohibits reimbursement for an office visit if the only purpose of the visit was a non-covered service such as acupuncture. Tr.I at 138-139. At the March 1985 meeting with the local Medicare carrier Respondent was instructed what had to take place for an office visit to be reimbursable under Medicare: "no less than a blood pressure check, weight, temperature and `hands on' physical examination of area/areas of patient complaint or concern." I.G. Ex. 47, at 1. Respondent's records for his patients, however, do not demonstrate that Respondent sought this elementary information. In the claims Respondent submitted to Medicare for these "office visits," he did not mention what specific reimbursable services he provided during the office visits. The clear implication is that Respondent used the generic term "office visit" to mask the acupuncture treatment he actually delivered to his patients. Thus, we conclude that the ALJ did not err in his analysis of the issues of "office visits" and "local nerve blocks." We conclude that the ALJ correctly determined that Respondent used these terms on the Medicare claims he submitted to circumvent the Medicare prohibition on reimbursement for acupuncture treatments. Alleged Bias on the Part of the ALJ In his decision the ALJ made the following FFCL: 166. Respondent is not a credible witness. The ALJ based this FFCL on 17 separate assessments of Respondent's credibility. FFCL Nos. 149-165. The ALJ wrote: I did not find Respondent to be credible, because of his history of deception, the overwhelming evidence contradicting his testimony, and because of his demeanor throughout the hearing. ALJ Decision at 31. Earlier in his decision the ALJ made the following FFCLs: 106. I did not find Ms. Gans' testimony at the hearing to be credible. 116. Charlene Cook's testimony was not an objective, independent version of events and was not credible; Ms. Cook had a long-standing, close affiliation with respondent and, at the time of the hearing, was still employed by him. Respondent argued that the ALJ's findings that all Respondent's major witnesses as well as Respondent himself were "not credible" showed that the ALJ was not impartial and had pre-judged Respondent before the hearing began. To support this charge against the ALJ, Respondent pointed to one FFCL cited by the ALJ in his assessment that Respondent was not credible. 152. In assessing Respondent's credibility, I considered that, in entering into a plea agreement in 1987, Respondent admitted guilt to one count of mail fraud . . . encompassing five false claims for seven services . . . and to one count of distribution of a controlled substance . . . . Respondent vehemently argued that his testimony and the testimony of several of his witnesses showed that Respondent was forced to enter into this plea agreement. Respondent explained that the testimony proved that he never believed himself guilty of the mail fraud charge and that he admitted to that charge only because of the prosecution's threat to send him to prison on the narcotics charge. Respondent maintained that, despite the testimony of the prosecutor, his probation officer, and his psychiatrist, the ALJ totally ignored this testimony in finding that Respondent's prior conviction called into question Respondent's credibility in this proceeding. Respondent also contended that the ALJ summarily dismissed the testimony of Respondent's expert medical witness on the subject of nerve blocks and downplayed or ignored in his decision the testimony of numerous other witnesses Respondent called in his defense. Respondent maintained that this showed an obvious bias on the ALJ's part and asked the panel to investigate the ALJ's lack of impartiality. In Edward J. Petrus, Jr., M.D., and The Eye Center of Austin, DAB 1264 (1991), the Board set forth the standard for disqualifying a judge on a charge of bias: The law has long been well-settled that, in order to disqualify a judge, bias must stem from an extrajudicial source. The Supreme Court has held that: The alleged bias and prejudice to be disqualifying must stem from an extrajudicial source and result in an opinion on the merits on some other basis than what the judge learned from his participation in the case . . . . United States v. Grinnell Corp., 384 U.S. 563, 583 (1966); see also Tynan v. United States, 376 F.2d 761 (D.C. Cir. 1967), cert. denied, 389 U.S. 845 (1967); Duffield v. Charleston Area Medical Center, 503 F.2d 512, 517 (4th Cir. 1974). At 23. Here Respondent did not point to any extra-judicial source as support for his claim that the ALJ was biased. Rather, Respondent only referred to the ALJ's findings where the ALJ found Respondent's witnesses not credible. We find any suggestion that the ALJ was in any way biased against Respondent to be totally baseless. In making this finding we note at the outset that in his appearance before the ALJ, Respondent for the large part acted pro se. Although at times assisted by his brother, an attorney, Respondent examined most of the witnesses and presented most of his evidence himself. Any reading of the transcript of the hearing will show that the ALJ exhibited an inordinate amount of patience and forbearance toward Respondent because of Respondent's unfamiliarity with the legal process in general and the rules of evidence in particular. The ALJ was clearly aware of Respondent's pro se status and made every effort to ensure that Respondent received a full and fair opportunity to present his case. See Petrus at 26. During the hearing the ALJ gave Respondent great leeway in his examination of the witnesses. The ALJ made several rulings favorable to Respondent. For example, over the I.G.'s strenuous objections, the ALJ at Respondent's request bifurcated the hearing. The net effect of this bifurcation was to give Respondent five months to prepare his defense after hearing the I.G.'s presentation. Respondent faults the ALJ for his findings that Respondent and his witnesses were not credible. As to Respondent himself, the ALJ gave 17 separate reasons why he doubted Respondent's credibility. See FFCL Nos. 149-165. As for the other witnesses, the ALJ had the opportunity of observing and evaluating these witnesses, and provided specific reasons why he doubted their credibility. The ALJ clearly weighed the testimony of Respondent's medical expert witness against the I.G.'s two medical experts and found the I.G.'s witnesses' testimony "persuasive." ALJ Decision at 37. Respondent's medical expert had never reviewed Respondent's medical records, while the I.G.'s experts had reviewed the medical records at issue and had concluded that Respondent had not performed nerve blocks. Id. at 36-37. As to the testimony concerning the reasons for Respondent's acceptance of the plea agreement, the transcript does not support Respondent's position that he pleaded guilty to mail fraud only to avoid a prison sentence for the narcotics charge. The prosecuting attorney denied any recollection that in the course of the discussions leading to the plea agreement Respondent indicated that he was not guilty of defrauding the Medicare program. Tr.II at 964. The probation officer and Respondent's psychiatrist testified only to the fact that Respondent told them later that was the reason for his consent to the plea agreement. Tr.II at 988 and 1084. They had no independent knowledge of what transpired during the discussions leading to the plea agreement. The ALJ apparently did not find this testimony persuasive compared with Respondent's sworn statement in the submission of his plea agreement to a federal judge that he was guilty of mail fraud as well as the distribution of narcotics. I.G. Ex. 88.4, at 15. Respondent there stated that he was not being threatened or forced to plead guilty and that he knew the consequences of his guilty plea. Id. at 13-15. As to the testimony of other witnesses the ALJ found not credible, the ALJ gave persuasive reasons for his findings. The ALJ found Ms. Gans to be easily confused and her oral testimony in direct contradiction to written statements she had given the I.G. FFCL Nos. 105 and 107. The ALJ found the testimony of Respondent's long-time employee Charlene Cook not objective because of her status with Respondent. FFCL No. 116. These were reasonable conclusions by the ALJ and indicate no bias on the ALJ's part. Respondent charged that the ALJ "ignored" the testimony of two other of his witnesses, Dr. Wong and Dr. Hung. A reading of the transcript shows that these two witnesses, both acupuncturists, testified to their experiences with the Medicare program. These witnesses did not personally know Respondent nor the circumstances that led the I.G. to bring action against Respondent. Respondent apparently believes that a judge is required to comment on the testimony of all the witnesses that appear before him in a proceeding. The ALJ could have reasonably determined that the testimony of these witnesses was not relevant to the issue before him, which was whether Respondent actually rendered the services he claimed. In conclusion, we find nothing in the ALJ's treatment of Respondent or of Respondent's witnesses to support a claim of bias against Respondent. The Sanctions Imposed by the ALJ Both parties took exception to how the ALJ arrived at his determination of the sanctions to be imposed on Respondent. Respondent claimed that, inasmuch as he was confronted with a possible penalty of $2,000 for each claim and the ALJ found 688 claims to have been falsely submitted, the ALJ should have been required to address separately each claim in question and to rule on the merits why the ALJ considered each claim fraudulent. Respondent asserted that he was denied due process by this incompleteness of the ALJ's decision. Respondent asserted that testimony and evidence presented at the hearing demonstrate at the least that not all of the claims were fraudulent, yet the ALJ issued a decision encompassing all the claims without distinguishing these claims. Respondent requested that each of the claims be reviewed separately and that a decision be rendered on each of the claims. The I.G., on the other hand, argued that the ALJ erred in his method of determining the sanctions to be imposed in this case. The I.G. contended that the ALJ improperly applied the established statutory and regulatory criteria for determining the amount of penalties and assessments, that the ALJ erred by inadequately considering the amount of the government's damages, and that the ALJ's imposition of a seven-year program exclusion reflects the ALJ's inadequate consideration of the aggravating evidence in the record. The I.G. argued that the ALJ's decision did not reflect that any systematic analysis of the government's damages was ever undertaken by the ALJ in determining the amount of penalty and assessment to be imposed upon Respondent. 10/ Accordingly, the I.G. took specific exception to portions of the ALJ's analysis set forth in the decision at pages 53-54 and to the ALJ's order that substantially reduced Respondent's civil monetary penalties, assessment, and exclusion from the Medicare and Medicaid programs. The I.G. requested that the ALJ's order be modified to determine penalties and assessments consistent with the language and intent of the CMPL and implementing regulations, and to determine a length of program exclusion reflecting the circumstances of Respondent's conduct. With respect to Respondent's argument that each claim be reviewed separately, we find that with the possible exception of 14 out of 688 claims, the FFCLs in the decision fully establish for each of the claims that Respondent submitted or caused to be submitted a claim for an item or service which he knew, had reason to know, or should have known were not provided as claimed. Thus, we conclude that it was not necessary for the ALJ to discuss each claim individually. This is clearly not necessary where a combination of reasons as described in the FFCLs apply to hundreds of claims and it is clear that the reasons are sufficient to support the ultimate conclusion for each of the claims. Here, the FFCLs provide numerous detailed and frequently overlapping reasons in support of the ultimate conclusion concerning at least 674 claims. In FFCL Nos. 132 and 181 the ALJ found that 14 claims were for reimbursable services, although "most" of them at a lower level of service than claimed. These claims were specifically identified in the record. Tr.I at 1541-1549. The ALJ also found generally that all of the 688 claims were false or improper and that none of the claims in question were properly described. FFCL Nos. 136 and 137. The finding on the 14 claims, however, leaves open the possibility that a few of these 14 were reimbursable at the level claimed. On remand, the ALJ should clarify whether any of the 14 claims should be deleted from the number of claims that would justify the penalty, assessment, and exclusion, and make appropriate modifications in relevant FFCLs. With respect to the issue of the proper method of determining the sanctions, the ALJ, in FFCL No. 167, specifically recognized that the statute established a maximum amount for the penalty and assessment based on the number of false or improper claims and the total dollar amount falsely or improperly claimed. Moreover, in FFCL Nos. 172 and 173, the ALJ concluded that it was an aggravating factor that there were a substantial number of false or improper claims involved and that the amount claimed for the services at issue was substantial. In lowering the penalty from $425,000 to $140,000, however, the ALJ does not identify the proper penalty per claim or in any way relate the number of false or improper claims to the penalty as a whole as the statute seems to contemplate. In addition to specifying a penalty "of not more than $2,000 for each item or service" (section 1128A(a), emphasis added), the statute requires that in determining the amount of any penalty or assessment, the Secretary shall take into account three separate factors, including "the nature of claims and the circumstances under which they were presented" (section 1128A(d)). Moreover, the statute specifies that the person shall be subject to an assessment of not more than "twice the amount claimed for each item or service" in lieu of damages sustained (section 1128A(a)). The statute further authorizes imposition of program exclusions as a result of the same proceeding leading to a penalty and an assessment. The regulations in effect when this proceeding was initiated reiterate the statutory factors that the Secretary shall take into account in setting the penalty and assessment amounts and the length of any exclusion (42 C.F.R. 1003.106(a)(1) and 1003.102(a)) and provide guidelines for taking into account these factors (42 C.F.R. 1003.102(b)). The guidelines provide the conditions under which either a greater or a lesser penalty and assessment should be considered within the statutory authority to impose a penalty of up to $2,000 per item or service and an assessment of up to twice the amount claimed. Finally, the regulations provide non-binding guidelines for calculating the amount of the penalty and assessment. 42 C.F.R. 1003.106(c). The preamble to the final regulation characterized the purpose of making the guidelines non-binding as "provid[ing] for the exceptional case." 48 Fed. Reg. 38827, at 38832 (August 26, 1983). The preamble also stated that as a general matter, "penalties and assessments should never be less than double the amount of damages." Id. at 38827-38828. While we agree with the ALJ that the statute leaves him considerable discretion in determining the amount of the penalty and assessment, this does not mean that his determination of the amount does not have to be supported by an analysis articulated in the decision. We find that the cumulative effect of the statute and regulations requires that the ALJ relate the penalty, assessment, and the exclusion to the number of false or improper claims that were made and to the factors identified in the statute and regulations that the Secretary must consider. 11/ Furthermore, although the regulations provide certain non-binding guidelines, we find that the ALJ should explain why the guidelines should not be applied if the ALJ chooses not to apply them. We also find that the ALJ should consider whether the penalties and assessment here would be less than double the amount of damages, and, if so, whether the Secretary's concerns as expressed in the regulations and preamble have been fully implemented. We are therefore remanding this case to the ALJ for the sole purpose of reconsidering what sanctions should be imposed upon Respondent and explaining the basis for determining the sanctions to be imposed. In explaining his rationale for the sanctions to be imposed, however, we further direct the ALJ to take into consideration our discussion below concerning mitigating factors and to determine whether any of the 14 claims discussed previously should be excluded from the claims that were not provided as claimed. The ALJ's Findings of Mitigating Factors I. Respondent's Drug Addiction Both parties challenged the ALJ's findings concerning Respondent's drug addiction. The ALJ made the following FFCL: 182. It is a mitigating factor that Respondent was drug addicted during the period of time in which the 688 claims at issue in this proceeding were submitted and that the addiction clouded his judgment. In the initial decision the ALJ wrote: While Respondent's drug addiction does not excuse his behavior or change the fact that he violated the CMPL, it is a mitigating factor in considering the amount of the penalties and assessment that Respondent was drug addicted during the period of time in which the 688 claims at issue in this proceeding were submitted. Had Respondent been drug-free, I doubt that this case would have occurred. While I consider Respondent's drug-impaired judgement to be mitigating for purposes of the penalties and assessment, I must consider it differently for purposes of the length of exclusion. In determining the length of the exclusion, it is important to consider the degree to which Respondent is trustworthy and rehabilitated. As I stated earlier, while there is evidence that Respondent has remained drug-free for several years and has made progress, Respondent still has work to do before he is totally rehabilitated. ALJ Decision at 56-57 (Citations omitted). The I.G. argued that the ALJ erred in considering Respondent's drug addiction as a mitigating factor in reducing the amount of the penalty and assessment and the length of Respondent's exclusion. Respondent, on the other hand, argued that if the ALJ meant what he wrote -- "Had respondent been drug-free, I doubt that this case would have occurred." -- then the ALJ should have treated Respondent's drug addiction as a much more significant item than just a mitigating circumstance. Citing the American Medical Association, Respondent labeled his drug addiction a "disease." 12/ Respondent noted that during the hearing a psychiatrist, in response to the ALJ's questioning, replied in the affirmative that a long-standing drug addiction could result in false claims being submitted. Tr.II at 1088. Respondent contended that on appeal additional experts should testify as to the significance of drug addiction. It is uncontested that Respondent had problems with drug addiction during the period in question. During the hearing Respondent described his drug addiction in great detail. Tr.II at 1323-1333. This testimony indicates the following. Beginning in 1978 Respondent used his position as a physician to obtain such drugs as dilaudid, codeine, stadol, and demerol for his own personal use. Respondent became addicted to these drugs. His addiction resulted in his being dismissed from hospitals in Massachusetts and Michigan and in the loss of his license to practice medicine in those states. In 1987, after being indicted for mail fraud for submitting false claims to Medicare, Respondent was also indicted for the unlawful distribution of narcotics. Respondent pleaded guilty to these offenses, and ultimately lost his license to practice medicine in New York. Over a period of 10 years Respondent entered into four drug treatment programs, with the last program apparently being successfully completed in 1987. Respondent has asserted that he has been free of drugs since the fall of 1987. From the remarks in his decision we conclude that the ALJ considered Respondent's drug addiction to have been a contributing factor in Respondent's submission of false Medicare claims. There in nothing in the record, however, to support this conclusion. Respondent never stated, either in his written submissions or in his testimony at the hearing, that his addiction to drugs specifically led him to file Medicare claims that were later found to be false. Indeed, the thrust of Respondent's whole case has been that all the questioned claims were for reimbursable Medicare services. Respondent steadfastly contended that he committed no wrongdoing in the filing of the questioned claims. Only when arguing in the alternative, that is, if the ALJ should find that fraudulent claims were filed, did Respondent contend, in a general fashion, that drug addiction should be considered a mitigating factor in the imposition of any sanctions. See, e.g., Respondent's Post-Hearing Brief at 178-180; Tr.II at 428-443, 923-925. Respondent has never given any indication that his drug addiction played any role in the submission of the claims. The whole tenor of Respondent's arguments was that all the services he performed were legitimate medical procedures worthy of Medicare reimbursement. In his decision the ALJ appeared to be suggesting that Respondent's drug addiction so clouded his judgment that Respondent was incapable of forming the requisite intent to file fraudulent claims. The only evidence in the record possibly supporting such a conclusion is the testimony of Respondent's psychiatrist in response to questions from the ALJ: ALJ: Well, in your professional expertise would you say it would be more likely for an impaired physician who was addicted to opiate drugs to file false or improper claims? Witness: I wouldn't say so. ALJ: Not anymore likely than a physician who is not impaired? Witness: Well, yeah, I guess you got it there. I think, you know, physicians who are not impaired wouldn't be likely to file inappropriate claims at all, so to the extent that an impaired physician might be doing something deviant, then, I think, there is a possibility. ALJ: Would it also be more likely that an impaired physician, as compared to a physician who is not impaired, would be more likely to make mistakes or engage in grossly negligent behavior? Witness: He'd certainly be more likely to make mistakes, because his ability to concentrate on what he was doing would be impaired, since the prime focus of his existence was the securing for himself of the addicting substance. Tr.II at 1088-1089. At best, this testimony shows only, in general terms, that a physician who takes drugs might make mistakes. It is worth noting that this psychiatrist, cognizant of all the details of Respondent's drug addiction, never claimed that the specific filing of the claims at issue was in any way attributable to Respondent's drug addiction. Tr.II at 1055-1064. In the absence of any evidence to the contrary, the issue of Respondent's drug addiction is irrelevant to the specific offenses with which he was charged. There is simply nothing in the record to indicate that when Respondent filed the claims at issue his judgment was clouded by drugs. There is nothing in the record showing that Respondent was so affected by his addiction that he was unable to form the mens rea or intent to deliberately file fraudulent claims so that he lacked culpability for his offenses. On the contrary, the fact that Respondent used the terms "nerve block" and "office visit" to describe his procedures with his patients, and used "office visit" when the reimbursable number of "nerve blocks" had been reached, shows a clear, purposeful judgment. 13/ The I.G., in contesting the ALJ's finding of drug addiction as a mitigating factor, argued that there have been no cases under the CMPL or the civil False Claims Act, 31 U.S.C. 3729 et seq., where drug addiction has been adjudged to be a mitigating factor. The I.G. noted that, in federal sentencing guidelines, drug or alcohol abuse is not a reason for imposing a sentence below the guidelines. The I.G. advanced the theory that allowing drug addiction to be considered a mitigating factor would frustrate the general deterrent goals of the CMPL. We find much merit in the I.G.'s arguments. An unsubstantiated finding that drug addiction is a mitigating factor (with no specific showing on how it affected culpability) would send the wrong message to the provider community. Providers of Medicare services should not be permitted to explain away fraudulent billings with generalized excuses of drug addiction or other substance abuse. Respondent's position before us that the issue of drug addiction as a disease needs further clarification through the additional testimony of other expert doctors lacks merit. Respondent had the opportunity to explore this area before the ALJ, and Respondent did not substantiate why he should be permitted to present additional evidence on this issue. Moreover, Respondent's position on this subject is further weakened by his failure to elicit from his own psychiatrist any type of affirmation that Respondent's drug addiction specifically caused Respondent to submit fraudulent claims. In conclusion, we find that FFCL No. 182 is not supported by substantial evidence in the record and lacks adequate legal justification. We therefore delete FFCL No. 182 from the decision. II. Respondent's Provision of "Other Services" The ALJ made the following FFCLs: 179. It is a mitigating factor that medical records submitted by the parties showed indications that some other medical services besides electro-acupuncture or injections of marcaine were provided in numerous encounters leading to the claims in question. 180. It is [a] mitigating factor that Respondent provided many medical services to his patients which would have been reimbursable if properly documented. 181. It is a mitigating factor that one of the I.G.'s medical experts identified 14 claims which he considered to be reimbursable, although most of them at a lower level of service than claimed. In regard to these FFCLs the ALJ wrote: The medical records submitted by the parties show that, in a significant number of the claims in question, some other medical services besides electro-acupuncture or injections of marcaine were provided. Those notations in the medical records were corroborated by testimony from Respondent's patients, including those patients testifying on behalf of the I.G. Also, one of the I.G.'s medical experts identified 14 services on claims which he considered to be sufficiently documented to be reimbursable, although most of them at a lower level of service than claimed. Thus, I have mitigated primarily because I believe that Respondent indeed provided many medical services to his patients which would have been reimbursable if properly documented. ALJ Decision at 56 (Citations omitted). The I.G., while conceding the existence of some evidence in the record that Respondent did render "some other medical services," nevertheless argued that, given the record as a whole, the ALJ erred in assigning excessive weight and unwarranted significance to this evidence. The I.G. contended that Respondent's medical records are a questionable reflection of what services were provided because the records were incomplete, illegible, and altered at a later date. The I.G. further argued that, while its own medical expert testified that in 14 instances some level of reimbursement may have been justified, 14 items out of 688 claims is only approximately two percent, a rate too low to support the ALJ's finding, as a mitigating factor, that "other services" were provided by Respondent. The I.G. additionally argued that there is no basis in either the CMPL or its implementing regulations for such a finding of mitigation. In his response to the I.G.'s exceptions, Respondent characterized his practice as a general medical practice, with a specialty in treating pain problems. Respondent argued that when his patients came to him seeking relief from pain he treated them with a variety of modalities at his disposal, including local nerve blocks, prescription of drugs, and electrical stimulation. Additionally, Respondent claimed that he treated his patients for ailments unrelated to easing pain. Respondent contended that he performed minor surgery, ordered numerous diagnostic tests, referred patients to other specialists for treatment, and prescribed drugs to 95 percent of the patients who visited him. We find that, under the circumstances in this appeal, the ALJ's use of "other services" as a mitigating factor was not based on substantial evidence or on an adequate legal rationale. FFCL Nos. 179 and 180 refer only to "indications" from patient testimony and records of other services being provided which "would" have been reimbursable "if properly documented." FFCL No. 181 finds that there were 14 claims that had been sufficiently documented to be considered to be reimbursable, "although most of them at a lower level of service than claimed." 14/ Thus, the record here supports only the finding that other services were in fact provided in 14 claims or approximately two percent of the 688 claims involved. The possibility Respondent provided other reimbursable services in a larger percentage of claims remains unproven and speculative, even though each of the claims was subjected to the scrutiny of the I.G.'s investigatory process and the ALJ hearing review and even though Respondent had the burden of demonstrating the existence of mitigating factors by a preponderance of the evidence and was presumably the custodian of the necessary medical records to document his claims. Ultimately, it was through one of the I.G.'s witnesses, not one of Respondent's, that the 14 claims with other reimbursable services were identified. Moreover, other FFCLs raise substantial questions about the adequacy of Respondent's medical records generally and the credibility of patient testimony in support of Respondent. See, e.g., FFCL Nos. 98, 101, and 106. Thus, we conclude that substantial evidence in the record supports only the finding that other services were provided in two percent of the claims. This percentage is too small in our view to justify the use of other services as a mitigating factor under the facts here. We also conclude that the ALJ provided an insufficient legal rationale for relying upon the provision of other services as a mitigating factor under the circumstances here. The ALJ identified this as one of "other factors as justice may require." It is not self evident why justice would require treating these other services as mitigating here even if the claims were fully documented as reimbursable in a number greater than 14. The ALJ found that the patients involved here came to Respondent for the primary purpose of receiving electro-acupuncture. FFCL Nos. 66 and 111. Any other services that Respondent may have provided were therefore merely incidental to his administration of electro-acupuncture treatments to his patients. These other services were apparently provided because of the happenstance of the patients needing some additional, minor medical attention. We also note that the I.G. has identified other instances where section 1128A permits imposition of the same range of penalty as would apply here even though the physician may have provided some type of reimbursable service in conjunction with a false or fraudulent claim or even though the physician may have provided a service that would have been reimbursable if there had not been an issue relating to the physician's licensure or exclusion. Although we are not prepared to conclude, as the I.G. suggests, that provision of reimbursable services in conjunction with a false or improper claim can never be a mitigating factor, we do conclude that the ALJ did not substantiate the use of such services as a mitigating factor here. Accordingly, we find that the ALJ erred in finding Respondent's provision of other services as a mitigating factor, and we therefore delete FFCL Nos. 179, 180, and 181 from the decision. III. Respondent's Impact on Beneficiaries The ALJ made the following FFCL: 183. It is a mitigating factor that many beneficiaries benefitted from Respondent's services and found him to be a good doctor. In support of this finding, the ALJ wrote: I am also influenced by the fact that many of Respondent's patients found his treatments to be beneficial and were very satisfied with Respondent's services. In addition, I am influenced by what I consider to be Respondent's concern for his patients. Even though I have found that Respondent's injections of marcaine were not medically necessary, it is a mitigating factor that these injections, according to Dr. Gillies' testimony, were beneficial because they increased the blood flow to the area injected. It is also a mitigating factor that Respondent considered his electro-acupuncture and injections of marcaine to be an effective treatment for pain. ALJ Decision at 56. The I.G. contended that this finding by the ALJ was unsupported by the record. The I.G. argued that the ALJ's decision cited several statements of patients to support his finding, but a closer examination of these statements casts doubt on whether any benefit was actually received by the patients. Apart from what the I.G. considered to be the dubious medical efficacy of acupuncture, the I.G. argued that Respondent's patients actually suffered from their dealings with him. We find that FFCL No. 183 is not supported either by substantial evidence or by an adequate legal rationale. Respondent here had the burden of proving any mitigating factors by a preponderance of the evidence. In finding that "many" of the patients benefited from Respondent's services and found him to be a good doctor, the ALJ cited evidence relating to only seven of the 31 patients involved. In survey results from all of the patients, 23 of the 31 patients indicated no or only some benefit (or only temporary benefit) from Respondent's treatments. Moreover, only one of the 31 patients would have gone to Respondent and would have received the treatments, if the patients had known that the treatments were not covered by Medicare. I.G. Ex. 12-27, at 2. Thus, we question whether these is substantial evidence in the record to support the finding that "many" of the patients benefited from the treatment and found Respondent to be a good doctor. We also conclude that there is insufficient legal rationale in support of FFCL No. 183, which the ALJ found to be a matter for mitigation "as justice may require." In FFCL No. 176 the ALJ concluded that Respondent had assured his patients that their treatments would be reimbursed by Medicare, and thereby had induced them to undergo the treatments and pay his fees at the time of treatment. As we discussed above, the patients almost universally indicated that they would not have procured the acupuncture treatments if they had known that the treatments were not reimbursable. We find that these factors strongly undercut the use of patient benefit as a mitigating factor required by justice under the circumstances here. Because of Respondent's conduct, his patients incurred considerable expense for treatments which Medicare did not cover, treatments which the patients stated that they would have refused if they had known that they would have to bear the full cost for them. We fail to see how this could be seen as benefiting the patients in the long run. Indeed, Respondent's misleading conduct may even have deterred these very patients from seeking efficacious treatment elsewhere that would have been reimbursable under the program. We further question whether Respondent's belief that his use of electro-acupuncture and marcaine was an effective treatment of pain should be considered a mitigating factor here, particularly where the Medicare program has explicitly determined that acupuncture is not a covered service and had specifically advised Respondent. Accordingly, we find that FFCL No. 183 is not supported by substantial evidence or by an adequate legal rationale, and we therefore delete FFCL No. 183 from the decision. We have therefore found that all the mitigating factors cited by the ALJ in FFCL Nos. 179-183 were erroneous and unsupported by substantial evidence in the record. Accordingly, we delete those FFCLs. We also modify FFCL No. 184, so that it now reads: 184. The Respondent did not prove any of the mitigating factors he alleged. On remand, the ALJ should, in setting the amount of penalty and assessment to be imposed on Respondent, take into account these deletions and modifications in the FFCLs concerning mitigating factors. Having deleted all of the mitigating factors cited by the ALJ, we do not mean to imply that the ALJ must impose the maximum penalty authorized by statute or even the sanctions initially imposed by the I.G. The I.G., in setting the initial penalty amount of $425,000 (equalling $601.98 per claim) recognized that substantially less than the maximum authorized penalty of $2000 per claim may be appropriate even where only aggravating factors exist. Thus, in the context of this particular case, the ALJ would still have considerable discretion in determining the amount or scope of any penalty, assessment or exclusion. For example, although the ALJ found that the extensive number of false or improper claims filed by Respondent over a lengthy period of time was an aggravating factor, he might also consider whether the penalty amount should be substantially lower than the maximum since these claims affected only 31 patients. Likewise, the ALJ might consider whether Respondent's financial condition would still have some bearing on the penalty amount even though the ALJ had concluded that his financial condition was not proven as a mitigating factor. CONCLUSION Based on the analysis above, we affirm the ALJ's finding that Respondent submitted claims to Medicare for services which he knew, should have known or had reason to know were not provided as claimed. There is substantial evidence in the record that supports the ALJ's decision that Respondent performed acupuncture treatments on his patients but nevertheless submitted claims for services described generally as local nerve blocks and office visits when Respondent knew, had reason to know or should have known that these services were not provided as claimed. We find that the ALJ, in reaching this decision, was not biased. We, however, remand this case to the ALJ for the sole purpose of reconsidering the sanctions to be imposed. In his re-evaluation the ALJ should substantiate the sanctions in light of the factors identified in the statute and regulations. The ALJ should also clarify whether any of 14 claims should be deleted from the number of claims that would justify sanctions and should take into account our deletions and modifications in the FFCLs concerning mitigating factors. _____________________________ Judith A. Ballard _____________________________ Cecilia Sparks Ford _____________________________ Donald F. Garrett Presiding Panel Member 1. A revision of the regulations at 42 C.F.R. Parts 1001, 1002, 1003, 1004, 1005, 1006, and 1007 went into effect January 29, 1992. 57 Fed. Reg. 3298 (January 29, 1992). Neither party argued that these revised regulations applied to this case. The revised regulations were not in effect during the time the ALJ presided over Respondent's case. 2. This summary of the facts is not intended as a substitute for the more detailed factual findings in the ALJ decision. 3. The I.G. originally questioned 706 claims by Respondent. At the hearing before the ALJ, the I.G. dropped 11 claims from its case, leaving 695 claims at issue. The ALJ found that seven of these claims were identical to claims encompassed by Respondent's criminal conviction in 1987 of one count of mail fraud encompassing five false claims for seven services and of one count of distribution of a controlled substance. The ALJ, citing U.S. v. Halper, 490 U.S. 435 (1989), eliminated the seven claims from this action, leaving 688 claims in dispute. 4. Respondent called his procedure "electrical stimulation," which consisted of inserting 4 to 16 acupuncture needles into the skin at various areas of the body, attaching the needles to an electric source using electrodes and wires, and applying electric current to the needles for 10 to 20 minutes. In the ALJ decision, this procedure was termed "electro-acupuncture." 5. At Respondent's request, the ALJ bifurcated the hearing. The first segment of the hearing was held in Rochester, New York, from July 30 through August 3, 1990. References in this decision to the transcript of that portion of the hearing will be cited as Tr.I (page number). The second segment of the hearing, also held in Rochester, occurred January 7 through January 12, 1991. References to the transcript of that segment will be cited as Tr.II (page number). 6. The ALJ called the number of claims described as a "consultation" a "handful" in relation to the much larger number of claims described as a "local nerve block" or "office visit." ALJ decision at 28. For purposes of this decision, we treat the claims submitted as consultations as office visits. 7. We have attempted here to identify only the primary FFCLs relating to office visits and nerve blocks and not all the FFCLs made by the ALJ on these issues. 8. Throughout this decision, we omit the ALJ's citations to the Act, regulations, other FFCLs, or the record before him from our restatement of his FFCLs. 9. Our discussion here does not address the 14 claims which in FFCL No. 181 were found to be reimbursable, although most of them at a lower level of service than claimed. 10. The I.G. argued that, in addition to the overpayments Respondent received due to his false claims which the Medicare program has never recovered, the government incurred extensive damages over the number of years Respondent has had to be monitored, investigated, and prosecuted. The I.G. further estimated that the government incurred, at a minimum, expenses of $165,000 in investigating and prosecuting Respondent. I.G.'s Request for Review of the Decision of the ALJ at 49. 11. Thus, for example, while the ALJ identified specific mitigating and aggravating factors, he did not explain how these factors caused him to select the particular penalty, assessment, and exclusion he imposed. 12. Respondent contended that the regulations state that any disease, physical or mental, constitutes a mitigating factor. Respondent's Reply to I.G.'s Exceptions and Supporting Reasons at 8. None of the regulations in effect at the time of the ALJ Decision, 42 C.F.R. 1003.106 and 1003.107, however, makes provision for disease as a mitigating factor. Revised regulations, effective January 29, 1992, provide that, in cases of exclusions based on convictions of specified offenses, it may be considered a mitigating factor in determining the length of an exclusion if the record in the criminal proceeding demonstrates that the court determined that an individual had a mental, emotional or physical condition, before or during commission of the offense that reduced the individual's culpability. 42 C.F.R. 1001.102, 1001.201, and 1001.301. The preamble to these regulations explains that "such a condition will only be considered if the court reached the conclusion that such a factor existed which reduced the offender's culpability; the mere appearance of such an allegation in the pre-sentencing report would not be enough." 57 Fed. Reg. 3298, at 3315 (January 29, 1992). These regulations make no specific mention of drug addiction as such. As we discuss below, we can find no basis in the record for concluding that Respondent's drug addiction reduced his culpability for his offenses. Thus, even if the revised regulations had been in effect and the rule on "mental condition" were applicable to Respondent's exclusion, it would not have justified the finding that Respondent's drug addiction was a mitigating factor. 13. We note that the ALJ seemed to be implying that when Respondent filled out the Medicare claims forms his judgment might have been impaired by drugs. As another mitigating factor, discussed below, the ALJ found that Respondent performed other valuable medical services to his patients. Apparently the ALJ believed that Respondent, at those times when he performed such services as acupuncture or prescribing drugs, exercised judgment undisturbed by his drug addiction. The inconsistency of these allegedly mitigating factors is striking.