Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Rachel L. Wilson
(OI File No. H-17-40039-9),
The Inspector General
Docket No. C-17-1149
Decision No. CR5031
The Inspector General (IG) of the United States Department of Health and Human Services excluded Rachel L. Wilson, a registered nurse, from participation in Medicare, Medicaid, and all other federal health care programs based on her convictions for three felony offenses that were in connection with the delivery of a health care item or service and related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. Petitioner was convicted of felony offenses in two separate jurisdictions that stemmed from her theft of narcotic medications that were prescribed to patients in the hospitals that employed her. For the reasons discussed below, I conclude that the IG has a basis to exclude Petitioner, and I affirm the five-year exclusion period, which is the minimum period of exclusion that is mandated by law.
By letter dated June 30, 2017, the IG notified Petitioner that, pursuant to section 1128(a)(3) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(a)(3), she was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of five years, effective 20 days from the date of the letter. IG
Exhibit (Ex.) 1 at 1. In the letter, the IG informed Petitioner of the factual basis for her exclusion, explaining:
This exclusion is due to your felony convictions as defined in section 1128(i) (42 U.S.C. 1320a-7(i)), in the State of Indiana, Delaware Circuit Court and Marion County Superior Court of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in 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 with 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.
IG Ex. 1 at 1.
Petitioner timely filed a request for hearing before an administrative law judge on September 5, 2017. On October 16, 2017, I convened a pre-hearing conference by telephone pursuant to 42 C.F.R. § 1005.6, during which I clarified the issues of the case and established a schedule for the submission of pre-hearing briefs and exhibits. My Order and Schedule for Filing Briefs and Documentary Evidence (Order), dated October 17, 2017, memorialized the schedule and summary of the pre-hearing conference.
Pursuant to the Order, the IG filed an Informal Brief (IG Br.) along with nine proposed exhibits (IG Exs. 1-91 ). Petitioner thereafter filed her Informal Brief (P. Br.2 ) and five proposed exhibits (P. Exs. 1-53 ). The IG then filed a reply brief (IG Reply). In the absence of any objections, I admit the parties’ submissions and exhibits into the record. Both parties agree that an in-person hearing is not necessary for me to decide this case. IG Br. at 8; P. Br. Therefore, I am deciding this case on the written submissions and documentary evidence. See Order, § 5.
The issue in this case is whether there is a legal basis under section 1128(a)(3) of the Act for the IG to exclude Petitioner from participation in Medicare, Medicaid, and other Federal health care programs. If I find a legitimate basis for the exclusion, I am required to uphold the mandatory five-year exclusion.
I have jurisdiction to decide this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
IV. Findings of Fact, Conclusions of Law, and Analysis4
1. Petitioner’s three felony convictions for theft and interference with medical services mandate her exclusion from all federal health care programs for a minimum of five years.
The Act requires the exclusion of any individual or entity from participation in all federal health programs based on four types of criminal convictions. 42 U.S.C. § 1320a-7(a). In this case, the IG relied on section 1320a-7(a)(3) as the legal basis to exclude Petitioner, which states:
(a) Mandatory exclusion
The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1320a–7b(f) of this title):
* * *
(3) Felony conviction relating to health care fraud
Any 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 paragraph (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 relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.
Id. § 1320a-7(a)(3).5
The IG argues that Petitioner’s exclusion is required based on her three felony convictions for theft of narcotic medications and the interference with medical services (based on her theft of medications) while she was employed as a hospital nurse. IG Br. at 5-8. The IG contends that these offenses “were based on the theft of drugs from a hospital, drugs to which she had access solely due to her position as a nurse at each hospital.” IG Br. at 7. Additionally, the IG contends that “Petitioner’s convictions arise from her abuse of her position as a nurse to steal drugs prescribed to patients, connecting her convictions to the delivery of health care services as proscribed under section 1128(a)(3).” IG Br. at 8. Petitioner does not dispute that she was “convicted” for purposes of the Act of the felony offenses. P. Br.; 42 U.S.C. § 1320a-7(i)(3). However, Petitioner argues that her felony convictions do not mandate exclusion because she “did not intentionally commit health care fraud.” P. Br. Petitioner argues she “was addicted to pain pills and made poor choices as a result and diverted medication from the hospital.” P. Br. Petitioner also argues her “felony convictions will be reduced to misdemeanors upon successful completion of probation . . . .” P. Br. Petitioner’s arguments are not persuasive, and Petitioner’s felony convictions for theft and interference with medical services require her exclusion.
On May 2, 2016, Petitioner was charged by an information filed in the Marion (Indiana) Superior Criminal Court with two Class D Felony Counts, to include a charge that she knowingly possessed a narcotic drug without a prescription and that she “did knowingly or intentionally exert unauthorized control over the property of [Indiana University (IU)]-Methodist Hospital, to wit: medication, with the intent to deprive IU-Methodist Hospital of any part of the use or value of the property.” IG Ex. 4 at 1. An investigation revealed that on November 16, 2013, Petitioner, who was employed as a registered nurse at the hospital, removed 16 tablets of hydrocodone from a Pyxis machine. IG Ex. 3 at 2. The investigation further revealed that Petitioner reported in hospital records that she had administered these medications to patients, when in reality, she did not administer these
medications, but instead, stole them for herself. IG Ex. 3 at 4-5. The investigation determined that Petitioner was “diverting” medication (IG Ex. 3 at 5), and Petitioner “confessed to taking the medication.” IG Ex. 3 at 3. On November 28, 2016, Petitioner entered a plea of guilty to felony theft, a Class D felony6 , as charged in the second count of the information, and the court dismissed the remaining count. IG Exs. 5 at 1; 6 at 1. Petitioner’s sentence included a suspended 365-day term of imprisonment and a 365-day term of probation. IG Exs. 5 at 1; 6 at 1.
Petitioner’s theft of narcotic medications intended for hospital patients was not limited to her employment at IU Methodist hospital, and she committed similar disturbing criminal conduct at another hospital where she was employed as a registered nurse. A two-count information filed on March 17, 2016, in the Delaware (Indiana) Circuit Court charged that Petitioner committed the felony offenses of theft and interference with medical services between December 9 and 10, 2014, while employed at AMG Specialty Hospital. IG Ex. 7. The information charged, in Count One, that Petitioner, as a licensed health care provider, “did knowingly or intentionally interrupt, obstruct, or alter the delivery or administration of a prescription drug . . . .” IG Ex. 7 at 1. The information also charged, in Count 2, that Petitioner “did knowingly or intentionally exert unauthorized control over the property of AMG Specialty Hospital . . . .” IG Ex. 7 at 2. Petitioner entered a plea of guilty to “Count 1, Interference with Medical Services, a Level 6 Felony, as a lesser included,” and “Count 2, Theft, a Level 6 Felony, as a lesser included . . . .” IG Exs. 8 at 2; 9 at 1. On January 18, 2017, a Circuit Judge sentenced Petitioner to, inter alia, 24 months of incarceration on each count, to be served concurrently, with both terms of imprisonment suspended upon successful completion of a 24-month term of probation. IG Ex. 9 at 1.
Based on the discussion above, and Petitioner’s concession in her brief, Petitioner has been convicted of felony offenses in the Marion Superior Court and Delaware Circuit Court. 42 U.S.C. § 1320a-7(i); 42 C.F.R. § 1001.2; see IG Exs. 5, 6, 8, 9; P. Br. Further, and consistent with the plain language of the statute, Petitioner’s underlying convictions are each for a “felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, ” and therefore are related to health care fraud as defined in section 1128(a)(3). 42 U.S.C. § 1320a-7(a)(3) (emphasis added); see IG Exs. 6, 9. And, Petitioner does not dispute that her convictions were related to her employment as a hospital nurse and involved the services she provided to hospital
patients. 42 U.S.C. § 1320a-7(a)(3). In summary, Petitioner’s three felony convictions were related to theft involving her delivery of health care services as a registered nurse, and pursuant to section 1128(a)(3), exclusion is warranted based on her convictions that are related to health care fraud.
Petitioner makes several arguments, all of which are unpersuasive. Petitioner argues that her nursing license has been reinstated on a probationary basis and that she is “safe to practice in healthcare and am not a threat to society.” P. Br.; see P. Ex. 4 (Recommended Findings of Fact, Conclusions of Law and Order of the Indiana Professional Licensing Agency). However, the reinstatement of Petitioner’s nursing license is not a factor that is relevant for consideration under section 1128(a)(3). Likewise, Petitioner’s expectation that her remaining felony convictions will eventually be reduced to misdemeanors is similarly not for consideration.7 Similarly, Petitioner’s difficulty in obtaining employment as a result of her exclusion is not an appropriate basis for consideration; one would expect that Petitioner, who is a convicted felon based on her criminal conduct while working as a nurse, would encounter difficulty in finding employment in the same field in which she committed her criminal activity. Petitioner also contends that she did not “intentionally” commit health care fraud (P. Br.); however, each one of her three felony offenses contains as an element that she “knowingly or intentionally” committed the offense. IG Exs. 4, 7. The record contradicts Petitioner’s argument that she did not intentionally commit health care fraud.
Petitioner does not provide any meaningful response to the IG’s cogent arguments that exclusion is mandated because Petitioner’s felony convictions arise from her use of her position as a nurse to steal drugs prescribed to patients, and as such, Petitioner’s theft is connected to her delivery of a health care item or service pursuant to section 1128(a)(3). IG Br. at 8. Petitioner was adjudicated guilty of felony offenses relating to her theft of narcotic medications prescribed to patients. IG Exs. 5, 6, 8, 9. There is no doubt that Petitioner’s felony convictions are for crimes that relate to health care fraud, for purposes of section 1128(a)(3), based on Petitioner’s theft of medications that were intended for the very patients for whom she rendered health care services as a nurse. Petitioner put her own drug-seeking behavior ahead of the needs of her patients, and regardless of whether she has an opioid addiction or the State of Indiana has afforded her considerable leniency in her criminal and licensing matters, she committed theft that diminished the
care she provided to her patients. Exclusion from Medicare, Medicaid, and all other federal health care programs is mandated by law. 42 U.S.C. § 1320a-7(a)(3).
Based on the foregoing analysis, I conclude that Petitioner’s criminal convictions for theft and interference with medical services are directly related to criminal conduct in which she admittedly “diverted medication from the hospital.” P. Br. Petitioner’s felony convictions mandate her exclusion from all federal health care programs. 42 U.S.C. § 1320a-7(a)(3). The Act requires a minimum exclusion period of five years when the exclusion is mandated under section 1128(a)(3).8 42 U.S.C. § 1320a-7(c)(3)(B).
V. Effective Date of Exclusion
The effective date of the exclusion, July 20, 2017, is established by regulation, and I am bound by that provision. 42 C.F.R. §§ 1001.2002(b), 1005.4(c)(1)
For the foregoing reasons, I affirm the IG’s decision to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of five years.
Leslie C. Rogall Administrative Law Judge
1. The IG filed two exhibits that it marked as “IG Ex. 9.” However, it appears that the IG intended to mark the January 18, 2017 plea agreement as IG Ex. 8, and not IG Ex. 9. I refer to that document as IG Ex. 8.
- back to note 1 2. Petitioner’s informal brief is not paginated, and therefore, I do not refer to page numbers in Petitioner’s brief.
- back to note 2 3. My Order detailed the process for filing and marking exhibits. Petitioner did not mark or properly number her exhibits. Order, § 5(b). In lieu of rejecting Petitioner’s exhibits (A, B, C, D, and E), I have re-designated Petitioner’s exhibits as P. Exs. 1-5.
- back to note 3 4. My sole finding of fact and conclusion of law is set forth in italics and bold font.
- back to note 4 5. While there are slight differences in the wording of Section 1128 of the Act and its codification at 42 U.S.C. § 1320a-7, the two authorities are substantively identical and I refer to them interchangeably. I further note that the Secretary of the Department of Health and Human Services (Secretary) has delegated to the IG the authority “to suspend or exclude certain health care practitioners and providers of health care services from participation in these programs.” 48 Fed. Reg. 21,662 (May 13, 1983); see also 42 C.F.R. § 1005.1.
- back to note 5 6. A Class D felony committed prior to July 1, 2014, is punishable by up to three years of imprisonment. After June 30, 2014, the State of Indiana reclassified a Class D felony as a Class 6 felony, and the maximum term of imprisonment was modified to two and one-half years. IND. CODE § 35-50-2-7(a)-(b) (2014). Therefore, a Class D felony is a felony for purposes of section 1128(a)(3). IND. CODE § 35-50-2-7(a) (2014); see 18 U.S.C. § 3559 (classifying an offense punishable by less than five years but more than one year of incarceration as a Class E felony).
- back to note 6 7. In an order dated December 27, 2017, the Marion Superior Court reduced Petitioner’s conviction level to a Class A misdemeanor. P. Ex. 2. Even if the Delaware Circuit Court were to similarly reduce the level of Petitioner’s two felony convictions to the misdemeanor level, the reclassification of these convictions would have no bearing on her mandatory exclusion. Under the definition of conviction applied by the Act and regulations, a person is “convicted” when a judgment of conviction has been entered, regardless of whether the judgment is later expunged or otherwise removed. 42 U.S.C. § 1320a-7(i); 42 C.F.R. § 1001.2(a)(2).
- back to note 7 8. I point out that the IG likely would have had a basis to impose a period of exclusion longer than five years, based on the application of several aggravating factors, to include: Petitioner had a prior criminal record at the time she was convicted in the Delaware Circuit Court; Petitioner had previously been convicted of a criminal offense involving the same or similar circumstances at the time of her second conviction; and, Petitioner’s license had been suspended “due to diversion and substance abuse.” 42 C.F.R. § 1001.102(b)(6), (7), and (9); see IG Exs. 5, 6, 8, 9; P. Ex. 4.
- back to note 8