Health Law Daily Wrap Up, CONDITIONS OF PARTICIPATION—DAB DECISIONS: Exclusion of pharmacist incarcerated for drug offenses reduced to eight years, (Aug 18, 2026)

By Rebecca E. Hoffman, J.D.

The ALJ emphasized the “sheer criminality” of the pharmacist’s conduct but found persuasive the showing that his health conditions lowered his culpability.

The HHS Departmental Appeals Board (DAB) modified a New York pharmacist’s minimum period of exclusion from Medicare, Medicaid, and other federal health care programs from nine years to eight years, based on a mitigating factor that did not factor into the Inspector General’s (IG) earlier decision to shorten the period from 11 years to nine (Mongillo v. Inspector General, DAB No. CR6949, Doc. No. C-25-793 (July 28, 2026)).

Drug dealing and trafficking. Police officers pulled the pharmacist over for a traffic violation in January 2021 and found a loaded handgun with its serial number scratched out, a glass pipe, 642 grams of methamphetamine, a scale, and several thousand dollars in cash. He agreed to plead guilty to possession of a controlled substance with intent to distribute and possession of a firearm in furtherance of a drug-trafficking crime. The Northern District of New York sentenced him to 63 months incarceration. He also admitted guilt to the New York Board of Pharmacy’s charge of professional misconduct and surrendered his license to practice.

In May 2025, the HHS Inspector General notified the pharmacist that he was excluded from federal health care programs. Pursuant to Section 1128(a)(4) of the Social Security Act, the pharmacist had to be excluded for a minimum of five years, based on his felony conviction involving the distribution of a controlled substance.

Aggravating and mitigating. The IG applied two aggravating factors to lengthen the period of exclusion to 11 years: 1) the pharmacist’s sentence included incarceration, and 2) the state board also took action against the pharmacist based on these facts. The pharmacist requested a hearing, and as a result, the IG issued an amended notice of exclusion, bringing the minimum period of exclusion down to nine years based on the mitigating factor that the pharmacist cooperated with government officials.

Evidence of cooperation existed but was sealed, the order explained. The IG was able to confirm that the pharmacist’s cooperation had resulted in other investigations. Here, the pharmacist argued he suffers from substance abuse and severe depression, which provides another potential mitigating factor. “Petitioner cites his sentencing memorandum submitted to the District Court to corroborate his claim and points to the Court’s decision to sentence him to a below-Guidelines sentence and its requirement to continue mental health and substance abuse treatment as evidence the court found his culpability reduced because of his mental health or substance abuse condition.”

The IG argued that the pharmacist had not established by a preponderance that the court found his mental condition reduced his criminal culpability, but the ALJ disagreed. The pharmacist would have had trouble getting the sentencing transcript because he was in prison, the ALJ said. “Moreover, the Board has observed that a sentencing court does not need to make an explicit finding of reduced culpability based on a mental or physical condition that existed at the time of an offense; I can instead infer such a finding from the evidence generated at the criminal proceeding.”

The ALJ did make this inference, citing the fact that the duration of the pharmacist’s incarceration was less than the guidelines. A much longer sentence was available, given the amount of meth found, and the fact that the pharmacist could have been made to serve a 60-month consecutive sentence for the gun possession. “His defense attorney highlighted his unusual path to criminality and cited his drug addiction and mental illness as key factors behind his downfall,” the ALJ observed. “Strikingly, she made no mention of Petitioner’s cooperation with the government. Nor did the government indicate cooperation as a basis for a downward departure in the plea agreement.”

The district court recommended—as opposed to required—substance abuse and mental health treatment in prison. However, this distinction is not determinative, because the Bureau of Prisons decides if there is a treatable condition, and thus the court could not have legally required the treatment while the pharmacist was incarcerated.

The court did, however, add special conditions to the pharmacist’s supervised release, requiring him to participate in substance abuse and mental health treatment programs that could include inpatient treatment. “Contrary to the IG’s claim, it is clear the District Court thought Petitioner’s mental health and substance abuse issues were sufficiently significant to require considerable oversight after his release from incarceration,” and thus he did establish by a preponderance that the court found that his conditions reduced his culpability.

Sheer criminality. The significance of the factors varies depending on the circumstances, the ALJ explained, and the pharmacist did commit a serious crime—drug dealers harm the community, and he had been a licensed pharmacist. He was sentenced to over five years in prison and deemed liable for misconduct by the state’s pharmacy board. On the other hand, evidence of cooperation made the two-year reduction reasonable, and the IG had not considered the mental health conditions, so a further reduction is also reasonable.

The ALJ noted that this modification “does not balance out the reckless and dangerous choices Petitioner made.…The sheer criminality of Petitioner’s conduct evidences a lack of judgment and untrustworthiness that cannot be understated.”

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