DECISION

This matter is before me on the Inspector General's Motion for Summary Affirmance (I.G.'s Motion) of the I.G.'s determination to exclude Petitioner herein, Deborah Jo Oltman, 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)(4) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(4). As I shall explain below, the undisputed facts in this case require the imposition of a mandatory five-year exclusion. For those reasons, I grant the I.G.'s Motion for Summary Affirmance.

Petitioner practiced as a Licensed Practical Nurse (L.P.N.) in the State of Iowa from the late 1990s until the spring of 2002. On April 3, 2002, local law enforcement officers executed a search warrant at Petitioner's home and found illegal drugs, drug paraphernalia, and a quantity of cash. Several months later, Petitioner was convicted in Iowa District Court for Franklin County on her negotiated plea of guilty to one felony charge of possession of a controlled substance, amphetamine, with intent to deliver, in violation of Iowa Code § 124.401(1)(c).

As required by the terms of section 1128(a) of the Act, the I.G. began the process of excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Section 1128(a)(4) of the Act dictates the mandatory exclusion, for a term of not less than five years, of "(a)ny individual or entity that has been convicted . . . under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." Act, section 1128(c)(3)(B); 42 U.S.C. § 1320a-7(c)(3)(B). On December 31, 2003, the I.G. notified Petitioner that she was to be excluded for the minimum mandatory period of five years. I.G. Ex. 1.

Acting through counsel, Petitioner timely sought review of the I.G.'s action by letter dated February 22, 2004. I convened a telephonic prehearing conference on May 14, 2004 pursuant to 42 C.F.R. § 1005.6. My purpose in doing so was to discuss the issues presented by the case with both parties and explore with them the procedures best suited for addressing those issues. The parties agreed that the case most likely could be decided on written submissions, and I established a schedule for the submission of documents and briefs. All briefing is now complete.

The I.G. has proffered six proposed exhibits (I.G. Exs. 1-6). Petitioner has submitted seven proposed exhibits acting Pro Se (P. Exs. 1-7). Neither party has objected to admission of the other's tendered exhibits, and they are therefore all admitted. Moreover, as will be seen, Petitioner does not contest the fact of her conviction based on Iowa Code § 124.401(1)(c), as noted above. She concedes that if the offense falls within the ambit of section 1128(a)(4) of the Act, it constitutes a sufficient basis for her five-year exclusion under the Act. Petitioner's Brief in Resistance (P. Br.) at 1, 2. Petitioner's appeal rests on one very specific point: she denies that the offense of which she was convicted is a felony relating to the unlawful distribution of a controlled substance and asserts that her offense is not within the reach of section 1128(a)(4) of the Act. The material facts in this case are therefore not in dispute, and summary disposition is appropriate.

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

The controlling statutory, regulatory, and decisional authorities require that both issues be resolved in favor of the I.G.'s position. Section 1128(a)(4) of the Act mandates Petitioner's exclusion since her predicate conviction has been established and is related to the unlawful distribution of a controlled substance. The five-year term of exclusion is the minimum established by section 1128(c)(3)(B) of the Act, 42 U.S.C. § 1320a-7(c)(3)(B), and is therefore ipso jure reasonable.

III. CONTROLLING STATUTES AND REGULATIONS

The Iowa statute at issue in this appeal is Iowa Code § 124.401(1)(c). In relevant part it reads:

Section 1128(i) of the Act defines "conviction" as including those circumstances "when a judgment of conviction has been entered against the individual . . . by a . . . State . . . court," section 1128(i)(1) of the Act; "when there has been a finding of guilt against the individual . . . by a . . . State . . . court," section 1128(i)(2) of the Act; or "when a plea of guilty . . . by the individual . . . has been accepted by a . . . State . . . court," section 1128(i)(3) of the Act. See 42 U.S.C. §§ 1320a-7(i)(1)-(3). These definitions are repeated at 42 C.F.R. § 1001.2. Petitioner agrees that her conviction meets these statutory and regulatory definitions of "conviction," and satisfaction of these definitions is fully established in the record before me.

Section 1128(a)(4) of the Act 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 . . . under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance." The terms of section 1128(a)(4) are restated somewhat more broadly in regulatory language at 42 C.F.R. § 1001.101(d). Petitioner vigorously maintains that the nature of the specific felony offense for which she was convicted is not emcompassed in this statutory language. Her position and the arguments she marshals in support of it are set out more fully below. But stated in its essentials, her position is this: she denies that the offense of which she was convicted--possession of a controlled substance with the intent to deliver it--is a felony relating to the unlawful distribution of a controlled substance.

An exclusion based in section 1128(a)(4) is mandatory and the I.G. must impose it for a minimum term of five years. Act, section 1128(c)(3)(B); 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 minimum mandatory term of exclusion is subject to enlargement in some limited circumstances and on proof of carefully defined factors, in this case the I.G. has not sought to enhance the five-year minimum mandatory term by offering to prove any of them. For that reason, I may not inquire into the existence vel non of any of the specific aggravating or mitigating factors set out at 42 C.F.R. §§ 1001.102(b) and (c). Petitioner admits that if the terms of section 1128(a)(4) of the Act encompass her conviction, the five-year mandatory exclusion is not unreasonable.

The federal Controlled Substances Act, 21 U.S.C. § 801 et seq., is not directly implicated in this appeal, since Petitioner was convicted in an Iowa State court for breaking Iowa State law. But three important decisions in this forum bearing on the issue at hand have been predicated on convictions obtained in federal court for violations of the Controlled Substances Act; because I rely on those decisions in reaching my conclusion here, it will be useful to set out the provisions of the Controlled Substances Act that correspond to the Iowa statute set out above. 21 U.S.C. §§ 841 and 846 provide in relevant part:

The similarity of this statutory language to the Iowa statute should be noted, for it will be discussed below.

IV. FINDINGS OF FACT AND CONCLUSIONS OF LAW

I find and conclude as follows:

1. On October 16, 2002, Petitioner executed a document captioned "Written Plea of Guilty," by which she agreed to a negotiated plea of guilty to the Class C felony charge of "Possession of a Controlled Substance with Intent to Deliver five grams or less, to-wit: methamphetamine," in violation of Iowa Code § 124.401(1)(c). This document was captioned for filing in State v. Oltman, Criminal No. FECR007119, District Court for the State of Iowa, in and for Franklin County. I.G. Ex. 2.

2. On November 4, 2002, in the case of State v. Oltman, Petitioner pleaded guilty to one Class C felony charge of Possession of a Controlled Substance with Intent to Deliver, in violation of Iowa Code § 124.401(1)(c). I.G. Exs. 3, 6 at 18.

3. On December 16, 2002, judgment of conviction was entered against Petitioner on the basis of her plea as set out in Findings 1 and 2 above. The judgment of conviction recites that Petitioner was "convicted of the crime of Possession with Intent to Deliver a Controlled Substance, to-wit: Methamphetamine, in violation of Section 124.401(1)(c), The Code." I.G. Ex. 3.

4. On December 16, 2002, sentence was imposed on Petitioner based on her plea of guilty and conviction as set out in Findings 1, 2, and 3 above. I.G. Ex. 3.

5. Possession of a controlled substance with intent to deliver, as proscribed by Iowa Code § 124.401(1)(c), is a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001).

6. The plea, conviction, and sentence described above in Findings 1, 2, 3, and 4 constitute a "conviction" within the meanings of sections 1128(a)(4) and 1128(i)(1), (2), and (3) of the Act and 42 C.F.R. § 1001.2.

7. By reason of her conviction of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, Petitioner was subject to, and the I.G. was required to impose, a term of exclusion from participation in Medicare, Medicaid, and all other federal health care programs. Act, section 1128(a)(4).

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

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

The essential elements necessary to support an exclusion based on section 1128(a)(4) of the Act are: (1) the individual to be excluded must have been convicted of a criminal offense; (2) the criminal offense must have been a felony; and (3) the felony conviction must have been for conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Steven Michael Cook, M.D., DAB CR1234 (2004); Michael J. O'Brien, D.O., DAB CR1150 (2004); Karl Eric Swanson, M.D., DAB CR1002 (2003); Kathleen E. Talbott, M.D., DAB CR772 (2001); Conrad J. Sarnecki, Jr., D.O., DAB CR722 (2000).

No debate attends the first two essential elements: Petitioner acknowledges that she was convicted of a criminal offense, admits that the offense was a felony, and does not seek to attack or impeach the validity of the conviction itself. P. Response at 1, 2; Petitioner's Sur-Reply at 2. She concedes the first two essential elements with considerable candor and concedes as well that the term "deliver" in the Iowa statute is for instant purposes synonymous with "distribution," the term used in the Act and the regulations. P. Response at 2.

The contest is over the third essential element. Petitioner correctly notes that this record is barren of evidence that she ever actually distributed, sold, or shared amphetamine or any other controlled substance. She accurately asserts that her plea and conviction established only her possession of amphetamine on April 3, 2002, with the intent to deliver it at some future time. Having made those two points, Petitioner couches her challenge to the I.G.'s action thus:

P. Response at 1.

Now, whether the Iowa statute's "possession with intent" prohibition is within the reach of section 1128(a)(4) of the Act may be a question of first impression, but whether the same language in the federal Controlled Substances Act is within its reach is quite certainly not. On the three occasions when the latter question has been raised, the answer has been unequivocal: a federal conviction based on "possession with intent" is, for purposes of section 1128(a)(4) of the Act, a conviction relating to the unlawful distribution of a controlled substance.

A physician's conviction in federal court for the crime of possessing cocaine with intent to distribute it, in violation of 21 U.S.C. § 841(a)(1), was the basis for the I.G.'s proposed exclusion in Frank R. Pennington, M.D., DAB CR763 (2001). There, as here, the I.G. relied on the terms of section 1128(a)(4) of the Act. There, as here, the petitioner argued that the crime of "possession with intent" to distribute was not a crime relating to the unlawful distribution of a controlled substance. The Administrative Law Judge (ALJ) was unconvinced by that argument, and wrote:

The ALJ's conclusion was reviewed and affirmed by an appellate panel of the Departmental Appeals Board (Board) in Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001). Dr. Pennington pursued his appeal Pro Se, and the Board in consequence felt obliged to reorganize his arguments somewhat for him. But having done so, the Board found itself addressing the same question resolved against Dr. Pennington by the ALJ:

Pennington at 5.

The Board's economy of language matched the ALJ's. It is difficult to be sure whether the Board believed that the statutory term "distribution" directly includes possession with the intent to distribute, or whether the Board relied on the statutory language "relating to" as a mechanism for connecting the "offense on its face" to the terms of the Act. Regardless of the analytical approach, however, the Board's decision settled the ultimate question: a federal felony conviction for "possession with intent to distribute" is, for purposes of section 1128(a)(4) of the Act, a felony conviction relating to the unlawful distribution of a controlled substance.

The Board's ruling in Dr. Frank R. Pennington, M.D., supra, was applied to a slightly different predicate conviction in Karl Eric Swanson, M.D., DAB CR1002 (2003). Dr. Swanson was convicted in federal court of conspiracy to possess cocaine and other drugs with intent to distribute them - a felony forbidden by 21 U.S.C. § 846, which incorporates the specific prohibitions of 21 U.S.C. § 841. He maintained that his conviction of "conspiracy to possess with intent to distribute a controlled substance" did not fall within the meaning of section 1128(a)(4) of the Act as a "criminal offense related to the 'unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.'" Swanson at 3. Far short of actually distributing the drugs, and short of possessing the drugs while intending to distribute them, he had admitted and been convicted only of combining, conspiring, confederating, agreeing, and reaching a tacit understanding with other persons unnamed to possess the drugs with the intent to distribute them.

The ALJ described Dr. Swanson's arguments as "facially compelling" and carefully noted the attenuation between a conspiracy, the object of which is "possession with intent" and actual unlawful distribution. Although the ALJ did not explicitly say so, it is elementary that such a conspiracy could have been completed as a matter of fact, and of law, without drugs of any sort ever coming into the possession of any of the conspirators, so long as one overt act was committed by any one of them in furtherance of the conspiracy. But the force of the Board's declaration in crafting the Pennington rule became the decisive factor in the ALJ's eventual rejection of Dr. Swanson's argument:

Swanson at 7.

The ALJ went on to consider explicitly the effect of the Act's inclusion of the term "relating to" and made this telling point:

Id.

The ALJ's reasoning in Karl Eric Swanson, M.D., supra, is not merely unassailable; it reflects the additional virtue of completing what the Board left undone when it announced the Pennington rule: it invokes the "relating to" language of the Act in a useful and common-sense fashion to serve the remedial purposes of the exclusion remedy. Narendra M. Patel, M.D., DAB No. 1736 (2000); Joann Fletcher Cash, DAB No. 1725 (2000); Douglas Schram, R.Ph., DAB No. 1372 (1992).

The only link remaining to be completed between the Pennington/Swanson analysis and the instant case is a comparison of the criminal statutes upon which the predicate convictions are founded. The Iowa and federal statutes appear in relevant part above, and they will be seen to be in all material aspects precisely the same. Petitioner has agreed that the federal term "distribute" is synonymous with the Iowa term "deliver." P. Response at 2. The only other differences are those of format, the most noticeable of which places the Iowa anti-drug-conspiracy provision as part of the general list of prohibited acts. Both statutes use virtually identical language to forbid literally identical conduct, and there is no basis in that language for distinguishing the Pennington/Swanson line of authority from the facts before me in this case.

That line of authority is cogent and apposite. I apply it here, as I hold that Petitioner's conviction of the felony offense of possession of a controlled substance with intent to deliver it is a "felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance" within the meaning of section 1128(a)(4) of the Act. In so holding, I acknowledge and am guided by the ALJ's approach to the matter in Karl Eric Swanson, M.D., supra. I adopt in particular her reliance on the "relating to" language as an expression of Congress' intent that section 1128(a)(4) should be inclusive of felonies other than those strictly defined as the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Once a predicate conviction within the purview of section 1128(a) of the Act has been demonstrated, exclusion is mandatory. Salvacion Lee, M.D., DAB No. 1850 (2002); Lorna Fay Gardner, DAB No. 1733 (2000); David A. Barrett, DAB No. 1461 (1994). Since the five-year term of exclusion proposed in this case is the irreducible minimum required by section 1128(c)(3)(B) of the Act, as a matter of law it is not unreasonable. 42 C.F.R. §§ 1001.2007(a)(1), (a)(2); Neitra Maddox, DAB CR1218 (2004); Thomas A. Oswald, R.Ph., DAB CR1216 (2004); Mary Jo Izzo, DAB CR1136 (2004); Rose Mary Maye, DAB CR1028 (2003); Norman Imperial, DAB CR833 (2001); Kathleen E. Talbott, M.D., supra.

Administrative Law Judge