Kami L. Purvis, DAB No. 2990 (2020)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner Kami L. Purvis appeals the September 13, 2019 decision by an Administrative Law Judge (ALJ) upholding the determination of the Inspector General (I.G.) to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs under section 1128(a)(4) of the Social Security Act (Act)1 for five years, based on her conviction for a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Kami L. Purvis, DAB CR5418 (2019) (ALJ Decision). We affirm the ALJ Decision.

Statutory and Regulatory Background

Any individual or entity that has been convicted, after the enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) on August 21, 1996, of a felony offense relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance shall be excluded from participation in any federal health care program. Act § 1128(a)(4).

An individual is convicted of a criminal offense when: a judgment of conviction has been entered against him or her in a federal, state, or local court regardless of whether an appeal is pending or the record of the conviction has been expunged; there has been a finding of guilt by the court; a plea of guilty or no contest has been accepted by the court; or the individual has entered into any arrangement or program where judgment of conviction has been withheld. Act § 1128(i).

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Five years is the minimum period of an exclusion under section 1128(a)(4). Act § 1128(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). When, as here, the I.G. excludes an individual for the required minimum five years under section 1128(a)(4) of the Act – a mandatory exclusion law – that individual may request a hearing only on whether the basis for imposing the exclusion exists. 42 C.F.R. § 1001.2007(a)(1), (2).

Case Background2

As part of a New York state narcotics enforcement operation, investigators charged Petitioner with, among other offenses, possession of controlled substances in amounts that could be the basis for a felony charge, forgery, and falsifying business records, between April 2009 and December 2010. I.G. Ex. 3. In order to resolve the charges, Petitioner entered a guilty plea, in the Richmond County Supreme Court of the State of New York, to felony Criminal Possession of a Controlled Substance in the 4th Degree, in violation of section 220.09(1) of the New York state penal code. I.G. Ex. 2. The court accepted Petitioner's guilty plea and, on December 4, 2012, sentenced Petitioner to three years of "conditional discharge." Id.; see also Request for Hearing (RFH) at 1 (describing December 4, 2012 sentencing). By letter dated July 31, 2015, the I.G. notified Petitioner of her exclusion from Medicare, Medicaid, and all federal health programs for five years, under section 1128(a)(4) of the Act, due to her New York felony conviction. I.G. Ex. 1. Petitioner requested a hearing before an ALJ.

Petitioner contended, in sum, that the ALJ should overturn her exclusion because her state conviction for possession of a controlled substance did not provide the I.G. a basis to exclude her from federal health programs; she was denied due process when the I.G. notified her of her exclusion in 2015 at an address other than where she lived; and the exclusion prevents her gaining employment and thereby income needed to support family members with disabilities.3 RFH.

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The I.G. asserted that section 1128(a)(4) requires the Secretary to exclude from participation in any federal health care program any individual convicted of a felony offense, which occurred after August 21, 1996, relating to (among other things) the prescription or dispensing of a controlled substance. I.G. Informal Brief at 2. The I.G. also argued that the Board had previously rejected an argument similar to that raised by Petitioner, limiting "section 1128 review to the bare elements of the criminal offense." I.G. Reply at 2 (quoting Benny R. Bailey, DAB No. 2935 (2019), appeal docketed, Bailey v. Azar, No. 1:19-cv-01721 (D.D.C. June 13, 2019)). The I.G. also contended that Petitioner's argument against exclusion based upon her conviction for drug possession was an impermissible collateral attack on the conviction. Id. at 4-5. Further, the I.G. contended that the period of exclusion was reasonable as a matter of law because an exclusion imposed under section 1128(a)(4) of the Act must remain in effect for a minimum five years. Id. The I.G. also submitted three exhibits into the administrative record.

The ALJ issued a decision on the written record affirming the I.G.'s determination to exclude Petitioner. ALJ Decision. The ALJ found a basis for excluding Petitioner under section 1128(a)(4) of the Act because she was convicted of a felony occurring after August 21, 19964 , and she was convicted of an offense within the meaning of section 1128(i) of the Act. Id. at 4. The ALJ also concluded that, where a basis for exclusion under section 1128(a)(4) exists, neither he nor the I.G. had the discretion to shorten the mandatory five-year exclusion period, and that the ALJ had no authority to change the effective date of Petitioner's exclusion. Id. at 1, 6-8. Petitioner sought Board review of the ALJ's decision. Petitioner did not, however, file a brief. A reasonable reading of Petitioner's submission to the Board, however, would be that Petitioner is reprising the arguments she raised before the ALJ.

Standard of Review

The standard of review on a disputed issue of law is whether the ALJ Decision is erroneous. 42 C.F.R. § 1005.21(h). The standard of review on a disputed issue of fact is whether the ALJ Decision is supported by substantial evidence in the record as a whole. Id. Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971), quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).

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Analysis

Petitioner's appeal to the Board comprises a one-page, handwritten letter in which she listed three reasons for appeal, which we restate below verbatim:

1.          My sentence does not meet exclusion criteria
2.          Never notified of exclusion
3.          Sentence and completion of Legal issue of Jan 18 2011 May 26 2011
received certificate Good Conduct
met all stipulations
5 yr exclusion if sentenced May 26 2011 exceed reasonable time for such exclusion.

Petitioner attached to her request a copy of the I.G.'s exclusion notice, but she did not submit a brief and accordingly the Board has before it no specific allegations of error in the ALJ's analysis. The I.G. filed its response brief. Accordingly, we have decided to proceed to decision based on the parties' submissions to date and address all of the arguments that a broad reading of Petitioner's submissions reasonably permits.

We reject Petitioner's arguments and affirm the ALJ's decision. First we explain why substantial evidence in the administrative record supports the ALJ's decision. Next we explain why the ALJ's decision is free from legal error. Finally, we explain why Petitioner's other arguments provide no basis to reverse the ALJ's decision.

1. Substantial evidence in the administrative record supports the ALJ's decision.

Petitioner suggests that evidence in the administrative record does not support the conclusion that her conviction for possession of a controlled substance satisfied the criteria for exclusion under section 1128(a)(4). Request for Appeal ("My sentence does not meet exclusion criteria."). As discussed above and in the ALJ's decision, section 1128(a)(4) mandates exclusion of an individual convicted of a felony "relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance." Act § 1128(a)(4) (emphasis added).

We reject Petitioner's suggestion that the evidence supporting the ALJ's decision was insufficient to uphold the I.G.'s determination to exclude her from all federal health programs. In concluding that the facts and circumstances surrounding Petitioner's conviction proved that her "conviction falls within the meaning of section 1128(a)(4) of the Act," the ALJ credited the sworn complaint (I.G. Ex. 3) of the state narcotics bureau investigator, stating:

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[p]etitioner stole a prescription pad from her employer, which she fraudulently filled out and took to pharmacies, causing controlled substances to be improperly dispensed to her on no fewer than 35 occasions. (Citation omitted). Her criminal acts resulting in her conviction clearly related to both the prescription and dispensing of a controlled substance, and that a basis exists to exclude Petitioner under section 1128(a)(4) of the Act.

ALJ Decision at 6.5 The ALJ also considered other information in the record, including evidence that Petitioner used Dr. D. P.'s prescription sheets on 35 occasions to obtain controlled substances from pharmacies. ALJ Decision at 5 (citing I.G. Ex. 3, at 2). This is more than a mere scintilla of evidence, which Petitioner does not rebut, that Petitioner unlawfully availed herself of the prescription process to obtain the controlled substances which she was convicted for possessing. Therefore, we conclude that substantial evidence in the administrative record supports the ALJ's decision upholding the I.G.'s determination to exclude Petitioner.

2. The ALJ's decision is free from legal error.

The ALJ considered whether Petitioner's conviction subjected her to exclusion under section 1128(a)(4) of the Act and concluded that it did, because her conviction was for a felony "related to the manufacture, distribution, prescription, or dispensing of a controlled substance." ALJ Decision at 6. The ALJ reasoned that he was not limited to considering only the elements of her offense, but that he could "look to the particular facts and circumstances of her offense and conviction." Id. at 4-5. Here, the ALJ correctly concluded that "[Petitioner's] criminal acts resulting in her conviction clearly related to both the prescription and dispensing of a controlled substance." ALJ Decision at 6. In reaching his conclusion, the ALJ applied Board precedent and federal court decisions that established that "related to" "simply means there must be a nexus or common sense connection." Id. at 4-5 (citing Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012); Quayum v. U.S. Dep't of Health and Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y 1998); and Narendra M. Patel, M.D., DAB No. 1736 at 7 (2000), aff'd, Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003)).

The Board has repeatedly held that the labeling or classification of the crime for which an excluded individual was convicted is not determinative for I.G. exclusion purposes. See  Melissa Michelle Phalora, DAB No. 2772 (2017), appeal dismissed, Phalora v. U.S.

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Dep't of Health & Human Servs., No. 2:17-cv-00188 (N.D. Ind. June 15, 2018) (section 1128's references to offenses "relating to" a specified crime such as fraud, theft or patient abuse (or "related to the delivery of" a Medicare item or service) require only a "common sense connection" or "nexus" between the offense and the crimes or actions named in the statute); Bailey, DAB No. 2935 (ALJ review of the I.G.'s exercise of her exclusion authority extends beyond the bare elements of the offense to include an office manager of a pain management clinic convicted of money laundering) (applying the Board's reasoning in Narendra M. Patel, M.D. DAB No. 1736, at 7 (2000), aff'd, Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003), cert. denied, 539 U.S. 959 (2003)).

Further, we note that the regulatory history of 42 C.F.R. § 1001 emphasizes "that the terms used in the statute have been interpreted broadly by the Secretary to carry out the remedial purpose of the law" and "[t]hus, the offenses which will trigger I.G. authority under this provision include 'any offense that the [I.G.] concludes entailed, or resulted in, neglect or abuse of patients.' 42 C.F.R. § 1001.101(b)"). See DAB No. 1736, at 8 n.2. By analogy, the ALJ in this case was correct to extend his review of the facts and circumstances surrounding Petitioner's conviction and not to restrict his review solely to the elements of the offense of possession of controlled substances. Therefore, we find that the ALJ did not err when he concluded that Petitioner's conviction was for a crime relating to the manufacture, distribution, prescription, or dispensing of a controlled substance.

3. Petitioner's other arguments lack merit.

Petitioner asserts that her exclusion in 2015 was unreasonable given that she was sentenced and completed her court-ordered obligations in May 2011.6 This argument provides no basis to reverse the exclusion.

Neither the ALJ nor the Board has the authority to review the timing of the I.G.'s imposition of an exclusion, and nothing in the statute or regulations precludes the I.G. from imposing the exclusion when it did. Bailey at 11 (citing Shaikh M. Hasan, M.D., DAB No. 2648, at 9 (2015) (holding that "the ALJ correctly determined that she had no authority to review the timing of the I.G.'s determination to impose an exclusion or to change the starting date of the exclusion"), aff'd, Hasan v. Sec'y of Health & Human Servs., No. 1-15-CN-04687 (E.D. N.Y. Jul. 12, 2017); Kailash C. Singhvi, M.D., DAB

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No. 2138, at 5-7 (2007) ("[T]he ALJ and this Board do not have the authority to review the I.G.'s decision on when to impose the exclusion (including the decision to exclude Petitioner some eight months after he was sentenced), and may not grant Petitioner the essentially equitable relief he seeks."), aff'd, Kailash C. Singhvi, M.D. v. Inspector General Dep't of Health & Human Servs., No. CV-08-0659 (SJF) (E.D. N.Y. Sept. 21, 2009)). Moreover, there is no governing authority that guarantees prompt notice or prompt action on exclusions. Id., citing Rita Patel, DAB No. 2884, at 7 (2018), appeal docketed, Patel v. Sec'y U.S. Dep't of Health & Human Servs., No. 18-3227 (3d Cir. Oct. 5, 2018), transferred to No. 2:19-cv-08925 (D.N.J. Mar. 27, 2019) (citations omitted). Therefore, the fact that Petitioner pleaded guilty on May 26, 2011 (or that she was sentenced on December 4, 2012), but was not excluded from federal health care programs until August 20, 2015 is not subject to ALJ or Board review. See I.G. Ex. 2; P. Ex. A.

Finally, the mandatory minimum five-year exclusion period imposed on Petitioner is reasonable as a matter of law, and she is only entitled to review of the issue of whether the I.G. had a basis for exclusion under section 1128(a). 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2); Robert C. Hartnett, DAB No. 2740, at 2 (2016). Petitioner's satisfactory completion of the conditions of her sentence imposed by the state court can have no impact on the duration of her exclusion mandated by the Social Security Act. Her successful completion of inpatient and outpatient treatment programs (see P. Exs. C and D) likewise has no bearing on the duration of a mandatory five-year exclusion period. Neither an ALJ nor the Board may overturn a lawful mandatory exclusion, or reduce its required minimum duration, based on alleged mitigating factors. Olandis Moore, DAB No. 2963, at 7 (2019).

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Conclusion

For the reasons discussed above, we affirm the ALJ Decision.

1. The current version of the Social Security Act can be found at https://www.ssa.gov/OP_Home/ssact/ssact-toc.html. Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section. Also, a cross-reference table for the Act and the United States Code can be found at https://www.ssa.gov/OP_Home/comp2/G-APP-H.html.
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2. The background information is from the ALJ Decision and the record before the ALJ and is not intended to substitute for his findings.
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3. In her Request for Hearing, Petitioner stated:



Please also notice that my right to appeal was never granted to me simply because the OIG failed to differentiate between place of arrest from place of residence therefore I was unable to exercise my [C]onstitutional right to [D]ue [P]rocess.

RFH at 2. We note that Petitioner was not denied her right to appeal the exclusion to the ALJ. In fact, an ALJ issued a decision on the merits of Petitioner's appeal. See ALJ Decision. Because the procedural history below as well as the very fact of this appeal to the Board belie Petitioner's claim of denial of her right to full administrative review of the I.G.'s determination to exclude her from federal healthcare programs, we will not address this assertion any further.

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4. Petitioner did not contest the fact of her conviction in 2011. See P. ALJ Brief at 1.
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5. No exhibit in the administrative record expressly states that Petitioner was an employee of Dr. D. P.'s office at the time she accessed Dr. D. P.'s prescription sheets and used them to obtain controlled substances from the two pharmacies named in the complaint. However, Petitioner does not deny this, and whether Petitioner was Dr. D. P.'s employee is immaterial to our analysis and resolution of Petitioner's appeal.
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6. Evidence in the administrative record shows that Petitioner entered her guilty plea on May 26, 2011, and that she was sentenced on December 4, 2012. I.G. Ex. 2. Petitioner's argument suggests a belief that the reasonableness of the I.G.'s exclusion turns on the amount of time that has passed since the precipitating event (either the guilty plea, which occurred earlier, or the date of sentencing, which occurred about a year and a half later). It does not. As we explain, we have no authority over when the I.G. decides to exclude. And the effective date of exclusion is prescribed by regulation. See 42 C.F.R. § 1001.2002(b) (exclusion takes effect 20 days from the date of the exclusion notice).
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