SUBJECT:

Theresa A. Bass,

Petitioner,

The Inspector General.

DECISION

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary Judgment affirming the I.G.'s determination to exclude the Petitioner herein, Theresa A. Bass, from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years. The I.G.'s Motion and determination to exclude Petitioner are based on the terms of section 1128(a)(3) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(a)(3). There is a proper basis for Petitioner's exclusion and the undisputed facts in this case require the imposition of the minimum five-year period of exclusion.

I. Procedural Background

Theresa A. Bass, Petitioner, was employed at St. Anthony's Medical Center in St. Louis, Missouri in May, 2002. On September 3, 2003, the Grand Jury sitting for the Circuit Court of St. Louis County, State of Missouri, returned an Indictment charging Ms. Bass with 17 counts of stealing a controlled substance from the facility. Each count charged a violation of MO. REV. STAT. � 570.030 (2000), a class C felony.

Petitioner appeared with present counsel in the Circuit Court on November 1, 2004, and pleaded guilty to Counts 1, 2, and 3 of the Indictment. The remaining 14 Counts of the Indictment were dismissed nolle prosequi. The court accepted Petitioner's three guilty pleas, and proceeded to final disposition of the case immediately. The court suspended imposition of sentence pursuant to MO. REV. STAT. �� 557.011 and 610.105 (2000). Petitioner was placed on probation for five years, was ordered to spend 60 days in home confinement, which she was required to serve within the next six months, and was required to make restitution and pay fees and costs totaling $46.00.

Acting on the authority of section 1128(a)(3) of the Act, the I.G. began the process of excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. On May 31, 2005, the I.G. notified Petitioner that she was to be excluded for a period of five years, the mandatory minimum period of exclusion established by section 1128(c)(3)(B) of the Act; 42 U.S.C. � 320a-7(c)(3)(B).

Petitioner timely sought review of the I.G.'s action by counsel's letter of July 29, 2005. On the authority of 42 C.F.R. � 1005.6, I convened a prehearing conference by telephone on October 12, 2005, to discuss the issues presented by the case with both parties, and to discuss the procedures best suited for addressing those issues. The parties agreed that the case could be decided on written submissions, and I established a schedule for the submission of documents and briefs. The results of that conference and my directions to the parties appear in the Order of October 17, 2005. All briefing is now complete.

The proffer of exhibits in this case has been greatly facilitated by the parties' cooperative approach, which I acknowledge with appreciation. The parties have submitted four agreed-upon documents as Joint Exhibits (J. Exs.) 1-4, and they are admitted as designated.

II. Issues

The factual and legal issues before me are limited to those listed at 42 C.F.R. � 1001.2007(a)(1). In the specific context of this record, they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(3) of the Act; and

2. Whether the five-year term of the exclusion is unreasonable.

The controlling authorities require that both issues be resolved in favor of the I.G.'s position. If I find a basis for Petitioner's exclusion pursuant to section 1128(a)(3) of the Act, then the five-year term of exclusion, the minimum established by section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B), is reasonable as a matter of law.

III. Controlling Statutes and Regulations

Section 1128(a)(3) of the Act, 42 U.S.C. � 1320a-7(a)(3), requires the mandatory exclusion from participation in Medicare, Medicaid, and all other federal health care programs of "[a]ny individual or entity that has been convicted for an offense which occurred . . . [after August 21, 1996] . . . under Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program (other than those specifically described in [section 1128(a)(1)]) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct." The terms of section 1128(a)(3) are restated more broadly in regulatory language at 42 C.F.R. � 1001.101(c). Petitioner does not deny that the three felonies to which she pleaded guilty are comprehended in this statutory language, and the evidence before me fully establishes that her crimes are covered by the statute's terms.

The Act defines "convicted" as including those circumstances:

(1) when a judgment of conviction has been entered against the individual . . . by a . . . State . . . court, regardless of whether . . . the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual . . . by a . . . State . . . court;

(3) when a plea of guilty or nolo contendere by the individual . . . has been accepted by a . . . State . . . court; or

(4) when the individual . . . has entered into participation in a . . . deferred adjudication . . . program where judgment of conviction has been withheld.

Act, section 1128(i)(1)-(4), 42 U.S.C. �� 1320a-7(i)(1)-(4). These definitions are repeated at 42 C.F.R. � 1001.2. Petitioner concedes that the proceedings against her satisfy the literal terms of at least two of the four definitions, but argues that they should not be applied so as to require her exclusion. She rests her position on the terms of MO. REV. STAT. � 610.105, a statutory provision by which Missouri state courts dispose of some criminal prosecutions by suspending the imposition of sentence. According to Missouri law, such dispositions are not treated as criminal convictions.

An exclusion based on section 1128(a)(3) is mandatory, and the I.G. must impose it for a minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B). The regulatory language of 42 C.F.R. � 1001.102(a) affirms the statutory provision. Although the mandatory minimum period of exclusion is subject to enhancement in some limited and carefully-defined circumstances set out at 42 C.F.R. � 1001.102(b), the I.G. has not sought to enhance the five-year mandatory minimum period in this case. For that reason, I may not consider any of the specific aggravating or mitigating factors set out at 42 C.F.R. � 1001.102(b) and (c).

IV. Findings and Conclusions

I find and conclude as follows:

1. On November 1, 2004, in the Circuit Court of St. Louis County, State of Missouri, Petitioner Theresa A. Bass pleaded guilty to three felony charges of stealing a controlled substance, in violation of MO. REV. STAT. � 570.030, a class C felony. J. Exs. 2, 3.

2. On November 1, 2004, Petitioner's guilty pleas were accepted and final adjudication of guilt was entered against Petitioner on the basis of the pleas set out in Finding 1. The Sentence and Judgment recited that Petitioner was convicted of the crime of "Stealing a Controlled Substance," a class C felony. The court suspended imposition of sentence and placed Petitioner on probation for five years, required her to spend 60 days in home confinement which she was required to serve within the next six months, and required her to make restitution and to pay certain fees and costs. J. Exs. 3, 4.

3. On May 31, 2005, the I.G. notified Petitioner that she was to be excluded from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years, based on the authority set out in section 1128(a)(3) of the Act. J. Ex. 1.

4. Acting through counsel, Petitioner perfected her appeal from the I.G.'s action by filing a timely hearing request on July 29, 2005.

5. The plea, conviction, and sentence described above in Findings 1 and 2 constitute a felony "conviction" within the meanings of sections 1128(a)(3) and 1128(i)(2) and (3) of the Act, and 42 C.F.R. � 1001.2.

6. The conduct which resulted in Petitioner's conviction described above in Findings 1 and 2 occurred between May 16, 2002 and May 31, 2002, and thus after August 21, 1996. J. Exs. 2, 3, 4.

7. By reason of her conviction of a felony offense which occurred after August 21, 1996, related to theft in connection with the delivery of a health care item or service, Petitioner was subject to, and the I.G. was required to impose, a period of exclusion from participation in Medicare, Medicaid, and all other federal health care programs. Act, section 1128(a)(3).

8. The I.G. properly and reasonably set the period of Petitioner's exclusion at five years, the mandatory minimum term provided by law. Act, section 1128(c)(3)(B); 42 C.F.R. �� 1001.102(a), 1001.2007(a)(2).

9. There are no disputed issues of material fact before me and disposition on the written submissions is appropriate in this matter. Carrier Mills Nursing Home, DAB No. 1883 (2003).

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(3) of the Act are: (1) the individual to be excluded must have been convicted of a felony offense; (2) the felony offense must have been related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct; (3) the felony offense must have been for conduct in connection with the delivery of a health care item or service, or the felony offense must have been with respect to any act or omission in a health care program operated by or financed in whole or in part by any federal, state, or local government agency; and (4) the felonious conduct must have occurred after August 21, 1996. Erik D. DeSimone, R.Ph., DAB No. 1932 (2004); Jeremy Robinson, DAB No. 1905 (2004); Michael Patrick Fryman, DAB CR1261 (2004); Golden G. Higgwe, D.P.M., DAB CR1229 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004); Katherine Marie Nielsen, DAB CR1181 (2004).

None of the facts in this case are contested, and Petitioner concedes that she pleaded guilty to felony-level theft of drugs from a hospital in May, 2002. The second, third, and fourth essential elements are thus established without the need for further discussion. It is the first element, the requirement that a conviction be established, that Petitioner contests.

Petitioner does not deny the factual underpinnings of the I.G.'s position as to that element. She admits each of the material steps in the proceedings against her in the Circuit Court, and concedes that her guilty pleas were accepted, that she was adjudged guilty, and that final Sentence and Judgment was entered against her in the form set out in J. Ex. 4. But although these events clearly satisfy two, and arguably three, of the definitions of "convicted" at sections 1128(i)(1), (i)(2), and (i)(3) of the Act, Petitioner asserts that they do not amount to a "conviction" sufficient to invoke the I.G.'s mandatory exclusion authority. She frankly admits that the law of this forum is contrary to her position, but nevertheless maintains that Missouri's statutory sentencing plan, and settled, well-understood precedent in Missouri courts, require the conclusion that she has not suffered a conviction and is therefore not subject to exclusion.

In criminal cases, the State of Missouri provides a sentencing court with several alternatives for dealing with defendants who may benefit from treatment less onerous than traditional punishment. Two of those alternatives permit the court to suspend a sentence. As one alternative - and the alternative most frequently associated with the term "suspended sentence" - the court may suspend the execution of a sentence and place the defendant on supervised probation after nominally imposing a term of confinement. MO. REV. STAT. � 557.011.2(4). The second alternative is one unique to Missouri and a small number of other states, and it permits the court to suspend the imposition of sentence, with or without placing the defendant on probation. MO. REV. STAT. � 557.011.2(3). The details and the effect of this second alternative are set out in MO. REV. STAT. � 610.105. Petitioner's prosecution concluded under the terms of this second alternative, and it is the basis of her defense to the I.G.'s action.

Petitioner is quite correct that under Missouri law a criminal case concluded by the suspended imposition of sentence does not result in a "conviction." M.A.B. v. Nicely, 909 S.W.2d 669 (Mo. 1995) (en banc); Yale v. City of Independence, 846 S.W.2d 193 (Mo. 1993) (en banc); Missouri ex rel. Light v. Sheffield, 768 S.W.2d 590 (Mo. Ct. App. 1989). The terms of MO. REV. STAT. � 610.105 allow deserving defendants to avoid the civil disabilities, criminal liabilities, and social obloquy of a record as a convicted felon. Without lengthy citation here, it is sufficient to observe that the Missouri courts have rigorously and vigilantly applied their "no-conviction" interpretation to criminal dispositions under MO. REV. STAT. � 610.105 when asked to do so.

But this argument, which might indeed succeed in Missouri's courts, is foreclosed to Petitioner here. For purposes of this exclusion remedy created and authorized by federal statute, federal law defines "conviction." Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994); Carolyn Westin, DAB No. 1381 (1993), aff'd sub nom. Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994). ⁽¹⁾ At least two of the statutory definitions squarely apply: Petitioner's guilty pleas were accepted (J. Ex. 3, at 1) in satisfaction of the definition at section 1128(i)(3) of the Act, and the court found her guilty upon those pleas (J. Ex. 4, at 1) in satisfaction of the definition at section 1128(i)(2) of the Act. Whether a disposition under the Missouri plan falls within the definition of "conviction" set out at section 1128(i)(4) is a question for another day. I need not, and so do not, reach it here.

Petitioner has not mistaken the weight of the authority in this forum contrary to her position. She candidly asks that I reconsider that authority in an attitude of deference to the decisions announced by the courts of Missouri. But the Departmental Appeals Board (Board) has very recently revisited the broad question of state definitions of "conviction" in the context of section 1128(i) of the Act, and has reaffirmed in detailed and studied language the fundamental principle that the Act's definitions apply in these circumstances. Marc Schneider, D.M.D., DAB No. 2007 (2005). The Board's analysis represents the final word in this debate, and it supports the I.G.'s position: Petitioner has been convicted and is subject to exclusion.

The five-year period of exclusion proposed in this case is the irreducible minimum required by section 1128(c)(3)(B) of the Act; it is as a matter of law not unreasonable. 42 C.F.R. � 1001.2007(a)(2). Neither the Board nor I can reduce it. Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002).

VI. Conclusion

For the reasons set out above, the I.G.'s Motion for Summary Judgment should be, and it is, GRANTED. The I.G.'s exclusion of Petitioner Theresa A. Bass from participation in Medicare, Medicaid, and all other federal health care programs for a term of five years, pursuant to the terms of section 1128(a)(3) of the Act, is sustained.

Richard J. Smith

Administrative Law Judge

1. The Eighth Circuit has analyzed MO. REV. STAT. � 610.105 and its effect in the context of federal criminal law, where prior convictions are often essential elements in a new substantive charge, or are essential to an evaluation under the Sentencing Reform Act of 1984, 18 U.S.C. �� 3551-3583, 28 U.S.C. �� 991-998. That Circuit's resolution of the issue of whether a disposition pursuant to MO. REV. STAT. � 610.105 constitutes a "conviction" is the same as the resolution I announce here. United States v. Slicer, 361 F.3d 1085 (8th Cir. 2004); United States v. Franklin, 250 F.3d 653 (8th Cir. 2001); United States v. Ortega, 150 F.3d 937 (8th Cir. 1998).