Diane Marie Krupka a/k/a Diane Marie Salak, DAB No. 3020 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner Diane Marie Krupka, also known as Diane Marie Salak, has appealed the May 26, 2020 decision of the Administrative Law Judge (ALJ), DAB CR5621 (ALJ Decision).  The ALJ sustained a determination by the Inspector General (I.G.) to exclude Petitioner from participating in federal health care programs for five years under section 1128(a)(3) of the Social Security Act (Act).  For the reasons discussed below, we affirm the ALJ’s decision.

Legal Background

Section 1128(a) of the Act states that the Secretary of Health & Human Services “shall exclude” an individual from participation in “Federal health care programs” when certain conditions – specified in paragraphs (a)(1) through (a)(4) – are met.  Section 1128(a) exclusions are known as “mandatory” exclusions.  See 42 C.F.R. § 1001.101 (implementing section 1128(a)).  Section 1128(a)(3) requires the exclusion of an individual if:  (1) she has been “convicted” of a federal or state felony offense1 “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct”; and (2) that felony offense either (a) was “in connection with the delivery of a health care item or service” or (b) was “with respect to any act or omission in a health care program (other than those specifically described in paragraph (1) [of section 1128(a)]) operated by or financed in whole or in part by any Federal, State, or local

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government agency.”2

Section 1128(i) of the Act provides that, for purposes of an exclusion based on a criminal offense, an individual “is considered to have been convicted” of the offense when she enters a guilty or nolo contendere plea to the offense and the relevant court accepts the plea (§ 1128(a)(3)), or when she “has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld” (§ 1128(a)(4)).  Accord 42 C.F.R. § 1001.2 (definition of “convicted”); see also Henry L. Gupton, DAB No. 2058, at 8 (2007) (holding that the term “convicted” embraces a “diversion arrangement of some kind [which] permits the person to avoid entry of judgment against them”), aff’d, Gupton v. Leavitt, 575 F. Supp.2d 874 (E.D. Tenn. 2008).  Section 1128(c)(3)(B) of the Act provides that a valid mandatory exclusion must be for a minimum of five years.  Accord 42 C.F.R. § 1001.102(a). 

An individual excluded by the I.G. under section 1128 may request a hearing before an ALJ, but only on the issues of:  (1) whether a “basis for” the exclusion exists; and (2) whether the length of the exclusion is unreasonable.  42 C.F.R. §§ 1001.2007(a)(1)-(2) and 1005.2(a).  If the I.G. has imposed a mandatory minimum five-year exclusion, then the exclusion’s length is reasonable as a matter of law, and the excluded individual may request a hearing only on the issue of whether the I.G. had a basis for exclusion under section 1128(a).  Id. § 1001.2007(a)(2); Robert C. Hartnett, DAB No. 2740, at 2 (2016). A party dissatisfied with an ALJ’s decision concerning an exclusion may appeal that decision to the Departmental Appeals Board (Board).  42 C.F.R. § 1005.21(a).

Case Background

In October 2017, Petitioner, a licensed nurse employed by a home health agency, was charged in the Cuyahoga County (Ohio) Court of Common Pleas with three felonies:  theft (in violation of Ohio Rev. Code § 2913.02(A)(2)); illegal processing of drug documents (in violation of Ohio Rev. Code § 2925.23(A)); and illegal drug possession (in violation of Ohio Rev. Code § 2925.11(A)).  I.G. Ex. 3.  The charges stem from Petitioner’s diversion of 25 Percocet tablets from one of her home health patients, tablets that she planned to use to kill her ex-husband (whom she claimed was abusive).  See id.;I.G. Ex. 4, at 12-17; Pet.’s April 29, 2020 Brief to ALJ (Pet.’s Br. to ALJ) at 2.

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Petitioner pled guilty to all three charges on June 21, 2018.  I.G. Ex. 2.  The court accepted the plea (but made no finding of guilt), placed Petitioner under the supervision of the probation department for one year pursuant to Ohio’s Intervention in Lieu of Conviction program (see Ohio Rev. Code § 2951.041), and ordered Petitioner to comply with certain conditions as part of her probation.  Id.

Based on the outcome of the state criminal proceeding, the I.G. notified Petitioner in August 2019 that she was being excluded from participation in all federal health care programs for five years pursuant to section 1128(a)(3).  I.G. Ex. 1.  Petitioner filed a request for hearing to challenge the exclusion.  The parties then exchanged documentary evidence and written argument. 

In its briefs to the ALJ, the I.G. contended that Petitioner met section 1128(i)’s definition of having been “convicted” of a felony offense because her 2018 guilty plea to three state felony counts had been accepted by the Cuyahoga County (Ohio) criminal court, and because that court had placed her in a deferred adjudication program – namely, Ohio’s Intervention in Lieu of Conviction program – under which judgment of conviction had been withheld. May 15, 2020 I.G. Reply Br. at 2-7.  The I.G. further contended that the felony offenses to which Petitioner pled guilty were related to theft and fraud and were committed in connection with the delivery of a health care item or service.  Jan. 31, 2020 I.G. Short-Form Br. at 3-6.  Based on these contentions, the I.G. asserted that Petitioner was subject to a mandatory exclusion under section 1128(a)(3). 

In her brief to the ALJ, Petitioner suggested that the I.G. lacked authority, or “jurisdiction” (her word), to exclude her under section 1128 because the I.G. proffered no evidence that she was then participating in a federal, state, or local health care program (other than Medicare), or that she had rendered a service under Medicare or any state health care program.  Pet.’s Br. to ALJ at 4.  Petitioner also questioned whether she had been “convicted” of any offense for purposes of the federal exclusion statute.  Id. at 4-5.  In addition, Petitioner contended that the exclusion was invalid because it violated the Fifth Amendment’s prohibition on double jeopardy and the Eighth Amendment’s prohibitions on cruel and unusual punishment and excessive fines.  Id. at 8.  Petitioner also asserted that the federal “exclusion scheme” violated the Tenth Amendment.  Id. at 5-8. 

Finally, Petitioner suggested that in light of all the circumstances surrounding her criminal prosecution, the exclusion should be overturned as an excessive or “draconian” sanction, one that has left her essentially “unemployable.”  See Pet.’s Br. to ALJ at 1-3.  In support of that suggestion, Petitioner emphasized that “[s]he did not consume any unprescribed scheduled or controlled narcotics”; that “[s]he did not have more than evil homicidal thoughts towards her abusive, alcoholic husband” (underlining removed); that “[s]he did not harm any patient . . . [or] deprive any patient of prescribed medication”; that her theft “involved no loss of value to the patient” and was “arguably a good move in

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furtherance of [the patient’s] health and safety”; that there is “nothing in th[e] record to demonstrate that [she] poses any danger or risk to patients, to co-workers or to anyone else”; that the Ohio Board of Nursing rejected a recommendation that her nursing license be permanently revoked (in favor of an indefinite suspension pending possible reinstatement subject to conditions of probation); that it is not in the “public interest during [the] Covid 19 crisis to deprive . . . patients in desperate need of care from the services of a good, competent, experienced nurse”; and that the exclusion “disregard[s]” a March 18, 2020 decision by the Ohio Board of Nursing to reinstate her license.  Id. (emphasis in original).    

The ALJ’s Decision and Petitioner’s Appeal

Because neither party asked to present in-person testimony, the ALJ issued a “decision on the written record.”  ALJ Decision at 2.  The ALJ first considered whether Petitioner’s 2018 criminal prosecution provided a basis to exclude her under section 1128(a)(3).  The ALJ found that Petitioner pled guilty to three felony offenses that were “plainly related to theft in connection with the delivery of a health care item (drugs).”  ALJ Decision at 3 (“She stole the narcotics that her employer had supplied to her home health patient.”).  The ALJ further found that Petitioner had been “convicted” of those offenses within the meaning of section 1128(a) because the Cuyahoga County court had accepted her guilty plea, and because the charges were disposed of as part of a “first offender, deferred adjudication, or other arrangement or program where the judgment of conviction ha[d] been withheld.”  Id. at 5-6 (citing and quoting section 1128(i)(3)-(4) of the Act).  Based on these findings, the ALJ concluded that the circumstances of Petitioner’s criminal prosecution met the criteria for exclusion in section 1128(a)(3) and that the I.G. had lawfully excluded her from participation in federal health care programs for the statutory minimum five years.  Id. at 1, 5.

The ALJ then rejected what she called Petitioner’s “equitable” arguments for overturning the exclusion while noting that she was “bound by the statute and regulations and ha[d] no authority to disregard those authorities in order to grant equitable relief.”  Id.at 3-4.  Next, the ALJ rejected Petitioner’s “jurisdiction” argument, stating that it was “confusing” and “conflated two separate bases for exclusion” (namely, paragraphs (a)(1) and (a)(3) of section 1128).  Id. at 5.  Finally, the ALJ held that she had “no authority to review Petitioner’s Constitutional challenges.”  Id. at 6.

Petitioner filed a timely appeal of the ALJ’s decision.  Her appeal brief focuses on her constitutional claims, which she evidently wants to preserve for judicial review.  See Pet.’s Appeal Br. at 6-10.

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Standard of Review

The I.G.’s regulations govern the standard and scope of Board review.  Those regulations provide that the Board will review an ALJ’s decision to determine if it is supported by substantial evidence and free of legal error.  42 C.F.R. § 1005.21(h).  The regulations also state that the Board “will not consider any issue not raised in the parties’ [appeal] briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.”  Id.§ 1005.21(e).

Analysis

Because the I.G. imposed a statutory minimum five-year exclusion, the only appealable issue in the case is whether a “basis” exists to exclude Petitioner under section 1128(a)(3).  See 42 C.F.R. § 1001.2007(a)(1)(i).  As summarized above, the ALJ resolved that issue in the I.G.’s favor, concluding that the circumstances of Petitioner’s criminal prosecution satisfy section 1128(a)(3)’s criteria for mandatory exclusion.  Petitioner does not contest that conclusion in this appeal:  she does not contend that the ALJ’s conclusion is based on unsupported factual findings, nor does she argue that the ALJ erred in interpreting or applying section 1128(a)(3).   

In the section of her appeal brief laying out the “facts,” Petitioner remarks that her “admissions of guilt to the three felonies in the State Court” were not “convictions” but “conditions precedent” for placing her in Ohio’s Intervention in Lieu of Conviction program.  Pet.’s Appeal Br. at 2-3.  But Petitioner does not then question the ALJ’s holding that she had nonetheless been “convicted” of those felonies within the meaning of the federal exclusion statute.  See Act § 1128(i)(3) & (4); ALJ Decision at 5-6.

Because Petitioner alleges no error by the ALJ in deciding that a basis exists to exclude her pursuant to section 1128(a)(3), we summarily affirm the ALJ’s conclusion that Petitioner is subject to a mandatory five-year exclusion based on her felony convictions relating to theft in connection with the delivery of a health care item or service.  See 42 C.F.R. § 1005.21(e) (providing that the Board “will not consider” an issue not raised by a party in its appeal brief).

Regarding Petitioner’s constitutional challenges, the ALJ committed no error in refusing to address their merits.  The Board has long held that ALJs and the Board have “no authority to decide” the constitutional arguments raised by Petitioner here.  See, e.g., Aiman M. Hamden, M.D., DAB No. 2955, at 9 (2019).  In Funmilola Mary Taiwo, the Board held it had “no authority to decide” whether an exclusion validly imposed under section 1128(a) had violated a nurse’s constitutional rights under the Fifth and Eighth Amendments.  DAB No. 2995, at 10 (2020).  The Board explained that the nurse’s constitutional arguments amounted to attacks on the validity of the exclusion statute and regulations – laws that ALJs and the Board, as agency adjudicators, may not find invalid

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or refuse to follow.  Id. at 9 (citing Board decisions and 42 C.F.R. § 1005.4(c)(1), which states that an “ALJ does not have the authority to . . . [f]ind invalid or refuse to follow Federal statutes or regulations”).  Like the constitutional arguments asserted by the nurse in Taiwo, Petitioner’s arguments based on the Fifth, Eighth, and Tenth Amendments are essentially attacks on the validity of the applicable statute and regulations, and the ALJ therefore properly declined to consider those arguments here.3  We further note, as Taiwo and other decisions have, that federal courts and the Board have repeatedly rejected constitutional challenges to the Secretary’s section 1128 exclusion authority.  See, e.g., Monica Ferguson, DAB No. 3013, at 10-11 (2020) (citing decisions); Taiwo at 10 (citing decisions, including those rejecting Eighth Amendment challenges); Gupton v. Leavitt, 575 F. Supp.2d 874 (E.D. Tenn. 2008) (rejecting Fifth, Eighth, and Tenth Amendment challenges to a section 1128 exclusion).

Finally, Petitioner objects to how the ALJ evaluated the substance of her contention that the five-year exclusion was a “draconian” or unreasonable sanction under the circumstances.  In particular, Petitioner complains that:  

• the ALJ engaged in “inappropriate fact-finding” by “minimiz[ing] [her] ex-husband’s post-divorce continuing abuse,” thereby making the “obviously illicit homicidal thoughts toward her ex-husband appear to be even less ‘justified’ as a motivation for her diversion” of the Percocet pills;
• “put a negative spin on the fact that [she] initially denied the theft” of the Percocet tablets;
• inappropriately commented that the Ohio Board of Nursing’s decision to suspend her license and impose permanent “restrictions” did not “vindicate” her (see ALJ Decision at 4); and
• wrongly implied she should have been charged with more serious crimes. 

Pet.’s Appeal Br. at 3-5.

In resolving this appeal, we must follow the applicable statute and regulations, which mandate a five-year exclusion based on the outcome of Petitioner’s criminal prosecution.  42 C.F.R. § 1005.4(c)(1); Monica Ferguson at 10.  Those laws do not permit an ALJ or the Board to overturn or reduce a lawful mandatory five-year exclusion based on the excluded individual’s motive or degree of culpability for the criminal conduct,

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testimonials concerning the excluded individual’s competence and character, claims that an exclusion will adversely affect the individual’s ability to pursue a chosen profession, or any other allegedly mitigating or “equitable” factor.  42 C.F.R. § 1001.102 (providing that no mandatory exclusion imposed in accordance with regulations implementing section 1128(a) “will be for less than 5 years”); Taiwo at 9.  Consequently, Petitioner’s argument that the exclusion was excessive or unreasonable given the totality of the circumstances surrounding her criminal prosecution is legally irrelevant.  And because the ALJ could have not have overturned or reduced the exclusion based on that argument, her evaluation of the argument’s merit was unnecessary, and any defect in that evaluation is harmless error that the governing regulations require us to disregard.  See 42 C.F.R. § 1005.23 (“The ALJ and the DAB at every stage of the proceeding will disregard any error or defect in the proceeding that does not affect the substantial rights of the parties.”).

Conclusion

For the reasons stated above, we affirm the ALJ’s conclusion that the I.G. had a basis to exclude Petitioner under section 1128(a)(3) of the Act.

• 1. The offense must have occurred after the enactment of the Health Insurance Portability and Accountability Act of 1996.  Act § 1128(a)(3).  The conviction at issue in this case met that condition.
• 2. The regulation which implements section 1128(a)(3) similarly mandates the exclusion of an individual convicted of a state or federal felony offense “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct . . . (1) [i]n connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or (2) [w]ith respect to any act or omission in a health care program (other than Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State or local government agency.”  42 C.F.R. § 1001.101(c).
• 3. Petitioner asserts in her appeal brief that she also has a constitutional “due process” claim but fails to specify the factual basis for it.  See Pet.’s Appeal Br. at 6-10.  Moreover, Petitioner did not assert a due process claim before the ALJ, and so we could not consider it for that reason alone.  42 C.F.R. § 1005.21(e) (barring the Board from considering any issue that “could have been raised before the ALJ but was not”).