Mery Frances Gooden, DAB CR5762 (2020)

DECISION

Respondent, the Inspector General of the U.S. Department of Health and Human Services (the IG) excluded Petitioner, Mery Frances Gooden, from participation in Medicare, Medicaid, and all other federal health care programs for five years based on her conviction for a criminal offense related to the delivery of an item or service under the Medicare or a state health care program.  Petitioner sought review of the exclusion.  For the reasons stated below, I affirm the IG's exclusion determination.

I.  Procedural History

By letter dated February 28, 2020, the IG notified Petitioner she was being excluded, effective twenty days from the date of the letter, from participation in Medicare, Medicaid, and all federal health programs under section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)) for the minimum statutory period of five years.  IG

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Exhibit (Ex.) 1.1   The IG explained that the exclusion was based on Petitioner's conviction, as defined in section 1128(i) (42 U.S.C. § 1320a-7(i)), in the New York County Supreme Court of the State of New York (state court), of a criminal offense related to the delivery of an item or service under the Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program.  Id. at 1.

Petitioner timely requested a hearing before an administrative law judge in the Civil Remedies Division, and I was designated to hear and decide this case.  I held a pre-hearing telephone conference with the parties on May 21, 2020, the substance of which is summarized in the May 21, 2020 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).  See 42 C.F.R. § 1005.6.  Among other things, I directed the parties to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and exhibits in support thereof.  Summary Order at 4-5.

The IG filed a brief (IG Br.) and six exhibits (IG Exs. 1-6).  Petitioner filed a response brief (P. Br.) and two exhibits (P. Exs. 1-2).2   The IG filed a reply brief (IG Reply).

II.  Admission of Exhibits and Decision on the Record

Neither party objected to the opposing party's proposed exhibits.  I therefore enter IG Exs. 1 through 6 and P. Exs. 1 and 2 into the record.  The IG did not believe an in-person hearing to be necessary, while Petitioner requested one.  IG Br. at 6; P. Br. at 5.  However, neither party identified witnesses or provided written direct testimony.  Accordingly, I will decide this case on the briefs submitted and the exhibits of record.  Civ. Remedies Div. P. § 19(d).

III.  Issue

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for five years under 42 U.S.C. § 1320a-7(a)(1).  See 42 C.F.R. § 1001.2007(a)(1).

V.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an administrative hearing and judicial review of the final action of the Secretary of Health

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and Human Services (Secretary).  The right to a hearing before an ALJ is set forth in 42 C.F.R. §§ 1001.2007(a) and 1005.2, and the rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3.

The Secretary must exclude from participation in federal health care programs "[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program."  42 U.S.C. § 1320a-7(a)(1); see also 42 C.F.R. § 1001.101(a).

An individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  42 U.S.C. § 1320a-7(i).  The statute does not distinguish between misdemeanor and felony convictions.  Id.  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) provides that an exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years.  The exclusion is effective twenty days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The period of exclusion may be extended based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b).  Mitigating factors are considered as a basis for reducing the period of exclusion only if aggravating factors justify an exclusion of longer than five years.  42 C.F.R. § 1001.102(c).

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  I have determined Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, while the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(c); Summary Order at 3-4.

VI.  Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis.

A. Petitioner's request for hearing was timely, and I have jurisdiction.

Petitioner timely requested a hearing.  I have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1).

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B. There is a basis for Petitioner's exclusion pursuant to section 1128(a)(1) of the Act.

Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(1) of the Act where an individual has been convicted, under Federal or State law, of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  42 U.S.C. § 1320a-7(a)(1); 42 C.F.R. § 1001.101(a).  The IG has established these elements by a preponderance of the evidence.

1. Petitioner was convicted of a criminal offense within the meaning of the Act.

Petitioner, a licensed pharmacist, was an employee of NYC Pharmacy, Inc. (NYC Pharmacy) accused of stealing property from Amida Care, a health plan funded by New York State Medical Assistance Program.  IG Ex. 2 at 3-4.  On November 17, 2017, New York County charged her with three counts of Grand Larceny, one count of Scheme to Defraud, and one count of Medical Assistance Provider; Prohibited Practices.  IG Ex. 3 at 9-11, 15, 31.

On February 22, 2019, Petitioner pleaded guilty to Count Six of the indictment, which the state reduced to the lesser included offense of Grand Larceny in the fourth degree.  IG Ex. 2 at 3; IG Ex. 4 at 6.  She admitted in her written plea agreement that "she stole property from Amida Care, a health plan funded by the New York State Medicaid Assistance Program ("Medicaid"), and the value of said property exceeded one thousand dollars ($1,000.00)."  IG Ex. 2 at 3-4.  Petitioner further admitted she had participated in an unlawful kickback scheme where she and other criminal actors "paid Medicaid recipients to fill their high priced prescription medications at NYC Pharmacy."  Id. at 4.  The state court accepted Petitioner's guilty plea that same day, IG Ex. 4, and on May 3, 2019, sentenced Petitioner to four years of probation.  IG Ex. 5 at 3.  The court ordered Petitioner to pay restitution in the amount of $2,088.28.  Id.

There is no dispute that Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.  The Act provides an individual or entity is considered "convicted" when a judgment of conviction has been entered by a federal, state, or local court, or a plea of guilty or no contest has been accepted in a federal, state, or local court.  42 U.S.C. § 1320a-7(i)(1), (3).  Here, the grand jury indictment, the plea agreement, and the state court's entry of judgment and imposition of sentence all confirm Petitioner was in fact convicted of such an offense.  IG Exs. 2, 3, 5.

Petitioner acknowledges that she was convicted of a criminal offense, P. Br. at 4, but nevertheless articulates various equitable bases to minimize her criminal liability, which

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she appears to believe would permit me to disregard her conviction.3   She explains that her criminal culpability was minimal and undeserving of exclusion, citing her minimal involvement in the criminal acts resulting in her conviction and the relatively small amount of restitution she was required to repay.  Id. at 2-5.  Petitioner states she was a mere employee of NYC Pharmacy, had no financial interest in the business, and played no role in the submission of claims to Medicare, Medicaid, or any other governmental agency.  Id. at 3.  Petitioner asserts she merely processed and filled prescriptions for the pharmacy's patients, and that her criminal culpability was the result of conscious avoidance, not direct or specific knowledge she had of the fraudulent billing scheme or the circumstances surrounding it.  Id. at 3-4.

Whatever their merit, Petitioner's claims concerning the degree of her culpability are altogether irrelevant to my determination of whether the IG had a valid basis to exclude her.  I am not afforded the authority to examine or reassess Petitioner's guilt.  Instead, the Secretary's regulations explicitly prohibit Petitioner from collaterally attacking her conviction before me.  42 C.F.R. § 1001.2007(d) ("When the exclusion is based on the existence of a criminal conviction . . . the basis of the underlying conviction . . . is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in this appeal.").

Petitioner does not contest she was convicted of a criminal offense, a fact otherwise readily apparent in the record before me.  I therefore conclude that Petitioner was convicted of a criminal offense within the meaning of the Act.

2. Petitioner's criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.

The Act requires Petitioner be excluded from participation in federal programs if she was convicted of an offense relating to the delivery of an item or service under Medicare or a state health care program.  See 42 U.S.C. § 1320a-7(a)(1).  The term "related to" simply means that there must be a nexus or common sense connection.  See Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase "related to" in another part of section 1320a-7 as "deliberately expansive words," "the ordinary meaning of [which] is a broad one," and one that is not subject to "crabbed and formalistic

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interpretation") (internal quotation marks omitted); see also Quayum v. U.S. Dep't of Health and Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).

In determining the relatedness of an offense, I am not bound to the elements of the charged offense.  Berton Siegel, D.O., DAB No. 1467 at 4 (1994) ("[i]t is not the labeling of the offense under the state statute which determines whether the offense is program-related").  Instead, I assess the nature of the offense, which properly includes considering "facts upon which the conviction was predicated."  Id.  Doing so here, I conclude Petitioner's offense of conviction is related to the delivery of an item or service under Medicare or a state health care program.

Petitioner's admitted criminal conduct satisfies the relatedness requirement.  She admitted that "she stole property from Amida Care, a health plan funded by the New York State Medicaid Assistance Program ("Medicaid"). . ."  IG Ex. 2 at 3-4.  Relatedness of a criminal offense to the delivery of an item or service under Medicare or a state health care program is plainly evident where that offense involves the theft of funds from a state health care program.  Siegel, DAB No. 1467 at 6-7 (providing a criminal offense resulting in financial loss to a State Medicaid program was "related to" the delivery of items or services under that program because it resulted "in less funds being available to pay for covered services" delivered to Medicaid patients).  The fact that Petitioner was required by the state court to pay restitution to Amida Care serves to reinforce that connection.  Id.

Petitioner also admitted to participating in an unlawful kickback scheme from January 1, 2014 to July 31, 2017 where she and other criminal actors "paid Medicaid recipients to fill their high priced prescription medications at NYC Pharmacy."  IG Ex. 2 at 4.  Petitioner concedes she processed and filled those prescriptions, P. Br. at 3, meaning claims for the dispensing of these medications were submitted to the state Medicaid program.

The Board has reasoned that kickbacks are criminalized to "ensure that decisions by physicians about what medical items or treatments to prescribe, furnish, or arrange (and hence "deliver") under federal health care programs are not tainted by improper financial considerations."  Kimbrell Colburn, DAB No. 2683 at 6 (2016) (citations omitted).  Here, Petitioner illegally induced Medicare recipients to utilize her company to fill their prescriptions, which presumably would have led to an increased number of claims filed for reimbursement.  IG Ex. 2 at 4.  Her criminal conduct plainly related to the delivery of an item or service under Medicare or a state health care program.

Petitioner attempts to attenuate that connection by arguing she received no financial compensation for her actions beyond her normal salary and had no role in the submission of claims to a federal or state health care program.  P. Br. at 3.  Petitioner's claim that she did not receive additional compensation from her criminal conduct is irrelevant.  I need

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not find she personally profited from her criminal conduct in order to find relatedness.  And the Board has rejected, as a means to contest relatedness, the argument that a medical professional merely acted within the scope of his or her professional duties and did not directly submit claims.  See Colburn, DAB No. 2683 at 7, quoting Jack W. Greene, DAB No. 1078 at 7 (1989), aff'd, Greene v. Sullivan, 731 F. Supp. 835 (E.D. Tenn. 1990) (holding that petitioner's provision of clinical certification of medical need so her company could submit claims for bone growth stimulators was "related to the delivery of an item or service precisely because 'the submission of a bill or claim for Medicaid [or Medicare] reimbursement is the necessary step, following the delivery of the item or service, to bring the 'item' within the purview of the program.'").

I therefore conclude that Petitioner was convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program as contemplated by 42 U.S.C. § 1320a-7(a)(1).

C. Petitioner must be excluded for a minimum of five years; the period of exclusion is therefore reasonable as a matter of law.

Because I have concluded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(1), Petitioner must be excluded for a minimum period of five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).  The IG has no discretion to impose a lesser period of exclusion, and I may not reduce the period of exclusion below five years.

D. I have no authority to alter the scope of Petitioner's exclusion.

Petitioner alternatively requests that if I affirm the IG's exclusion determination, I should limit the scope of her exclusion to apply "only to the provision of items and services, billed to a Federal health care program, which include administrative, clerical and other activities, and which do not directly involve patient care or the provision of any health care services" because she has recently obtained a nursing degree, and seeks employment at a time when her services are urgently needed.  P. Br. at 6; P. Ex. 2.

I am unable to consider Petitioner's request.  The regulations expressly deny me the authority to modify the scope of an exclusion.  42 C.F.R. § 1005.4(c)(5) ("The ALJ does not have the authority to . . . determine the scope or effect of the exclusion.").  My role is limited to determining whether the IG has a basis to exclude Petitioner.  42 C.F.R. § 1001.2007(a)(1).

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VII. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for five years pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)), effective March 19, 2020.

1. Document No. 5b in the official case file maintained in the DAB E-File system; for clarity and simplicity, whenever possible I will cite to the exhibits attached to the parties' respective briefs by the exhibit numbers therein, not the document numbers assigned by the E-file system.
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2. Petitioner filed these exhibits as one combined document, rather than two separate proposed exhibits.  DAB E-file Dkt. C-20-468, Doc. No. 11.  However, they are correctly labeled and paginated.
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3. It is worth noting that as part of the bargain she struck to resolve the criminal case against her, Petitioner expressly agreed "to not contest any exclusion proceedings brought against her by . . . [HHS's] Office of the Inspector General."  IG Ex. 2 at 3.  The IG does not argue Petitioner was estopped from bringing the instant appeal on this basis, and thereby has waived that claim.  In any event, it is unclear to me that a criminal defendant in a state court proceeding could waive the right, separately provided by federal law and regulation, to appeal an exclusion action.  Petitioner's appeal does appear to violate the terms of her plea agreement, but that issue is not before me.
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