Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Jeanette Nichole Oberlink
(OI File No. H-17-40991-9),
The Inspector General
Docket No. C-17-1217
Decision No. CR5072
The Inspector General of the United States Department of Health and Human Services (the I.G.) excluded Jeanette Nichole Oberlink (Ms. Oberlink or Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for five years based on her criminal conviction for an 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. Petitioner sought review of the exclusion. For the reasons stated below, I affirm the I.G.’s exclusion determination.
I. Background and Procedural History
By letter dated July 31, 2017, the I.G. notified Ms. Oberlink that she was being excluded, effective 20 days from the date of the letter, from participation in Medicare, Medicaid, and all federal health programs under section 1128(a)(3) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)) for the minimum statutory period of five years. The I.G. explained he took this action based on Ms. Oberlink’s conviction in an Illinois court for 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. I.G. Exhibit (Ex.) 1 at 1.1
On September 25, 2017, Petitioner timely requested a hearing before an administrative law judge (Request for Hearing). Petitioner asserts the I.G. improperly excluded her because she was not in fact convicted of a felony requiring exclusion, having instead entered into a first offender agreement. Request for Hearing at 1.
On October 25, 2017, I held a pre-hearing telephone conference, the substance of which is summarized in my November 2, 2017 Order and Schedule for Filing Briefs and Documentary Evidence (Summary Order). See 42 C.F.R. § 1005.8. Among other things, I directed the parties to file pre-hearing submissions articulating their respective arguments and identifying witnesses and documentary evidence in support thereof. Summary Order ¶ 5.b.
The I.G. filed a brief (I.G. Br.) and five exhibits (I.G. Exs. 1-5), while Petitioner filed a brief (P. Br.) and four documents titled as exhibits. The first document, which I will refer to as Petitioner’s exhibit (P. Ex.) 1, appears to be evidence pertaining to the case, while the latter three documents appear to be three pages of a single document containing a section of the Illinois Compiled Statutes, which I will collectively refer to as Ex. 2. The I.G. subsequently filed a reply brief (I.G. Reply).
II. Admission of Exhibits and Decision on the Record
In the absence of objections from either party, I admit I.G. Exs. 1 through 5 and P. Exs. 1 and 2 into the record.
The I.G. asserted an in-person hearing is not necessary to decide this case. I.G. Br. at 7. Petitioner indicated she believes an in-person hearing is necessary to allow her to present her own testimony “as to the issues related to her plea agreement and how they differ from the [I.G.’s] facts.” P. Br. at 2. Contrary to section 7 of my Summary Order, however, Petitioner did not submit her testimony in advance as an affidavit or sworn declaration; on this basis alone, a decision on the record would be appropriate. Civ. Remedies Div. Pro. § 19(d) (providing an oral hearing unnecessary and a decision on the written record appropriate where a party fails to offer written direct testimony of a witness where directed to do so).
In any event, Petitioner’s description of her proposed testimony makes clear that her testimony would serve no permissible purpose. Petitioner’s testimony, as she describes
it, would serve only to attack the basis for her plea agreement. See P. Br. at 2 (“The Petitioner shall testify as to the issues related to her plea and how they differ from the OIG facts.”). However, the governing regulations forbid an individual excluded based on a criminal conviction,2 like Petitioner, from collaterally attacking the basis for the conviction before me on either substantive or procedural grounds. 42 C.F.R. § 1001.2007(d). Therefore, I conclude that Petitioner’s testimony, even if it had been properly proffered, would be irrelevant.
As neither party offered relevant witness testimony nor requested cross-examination, an in-person hearing is unnecessary, and I issue this decision on the basis of the record before me.
Whether the I.G. had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for the minimum period of five years under 42 U.S.C. § 1320a-7(a)(3). See 42 C.F.R. § 1001.2007(a)(1).
IV. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to an Administrative Law Judge (ALJ) hearing and judicial review of the final action of the Secretary of Health 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 I.G. to participate in a hearing are specified by 42 C.F.R. § 1005.3. The parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration. See 42 C.F.R. § 1005.6(b)(5).
The Secretary must exclude from participation in federal health care programs “[a]ny 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 . . . of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.” 42 U.S.C. § 1320a-7(a)(3).3
Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), 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, regardless of whether an appeal is pending or
whether 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. The statute does not distinguish between misdemeanor and felony convictions. 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). Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors; the I.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b).
V. 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.
There is no dispute that Petitioner timely requested a hearing. I therefore 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).
B. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(3) of the Act.
Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(3) of the Act where an individual has been convicted, under Federal or State law, of a criminal offense that occurred after August 21, 1996, consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct that was committed in connection with the delivery of a health care item or service. 42 U.S.C. § 1320a-7(a)(3); 42 C.F.R. § 1001.101(c)(1). The I.G. has established these elements by a preponderance of the evidence.
1. Petitioner was convicted under federal or state law of a criminal offense that occurred after August 21, 1996, within the meaning of section 1128(a)(3).
Petitioner was charged by information before an Illinois state court with one count of unlawful possession of a controlled substance and one count of unlawful acquisition of a controlled substance, both felony offenses. I.G. Ex. 5 at 1-2; see 720 Ill. Comp. Stat. 570/402(c), 570/406(b)(3) (2017). The information alleged that both offenses were committed on or about January 10, 2016. I.G. Ex. 5 at 1-2. On May 2, 2017, pursuant to an agreement with the state prosecutor, Petitioner pleaded guilty to the count of unlawful possession of a controlled substance. I.G. Ex. 2 at 2-3; I.G. Ex. 3 at 6-7. As a result, the state court dismissed the remaining count of unlawful acquisition of a controlled substance, and sentenced Petitioner to first offender controlled substance probation for 24 months with certain conditions. I.G. Ex. 2 at 2; I.G. Ex. 4.
Petitioner contends that she was not convicted of a crime because she “plead [sic] to a First Offender Probation pursuant to 730 [Ill. Comp. Stat.] 5/5-6-3.3 that in Illinois is not considered a conviction but a withheld no judgment adjudication.” P. Br. at 1. Petitioner is correct in her understanding that under Illinois state law, she was not convicted of a crime. In this proceeding, however, I must determine under applicable federal law, not state law, whether Petitioner was convicted for purposes of exclusion from federal health care programs.4
Dispositive to that point, the Act provides an individual has been “convicted” of a criminal offense “when the individual . . . has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.” 42 U.S.C. § 1320a-7(i)(4); see also 42 C.F.R. § 1001.2. Petitioner concedes that she is participating in a first offender program where judgment of conviction has been withheld by the state court. P. Br. at 1. In addition, she does not contest that the offense to which she pleaded guilty occurred on or about January 10, 2016, as charged in the information (I.G. Ex. 5 at 1).
I therefore conclude that Petitioner was convicted of a criminal offense that occurred after August 21, 1996, as contemplated by 42 U.S.C. § 1320a-7(a)(3).
2. Petitioner’s conviction was for a felony relating to theft that was committed in connection with the delivery of a healthcare item or service.
The I.G. asserts that Petitioner’s felony conviction related to theft because she improperly withdrew controlled substances from her employing hospital’s pharmacy system without a doctor’s order. I.G. Br. at 5. Petitioner argues that her conviction was not related to theft because the state court in her criminal case dismissed the second count against her, for unlawful acquisition of a controlled substance, and only accepted her guilty plea as to Count One, the felony possession offense. P. Br. at 2.
While true, Petitioner’s contention is irrelevant. In determining whether Petitioner’s felony conviction is related to theft, I am not limited to considering the actual charge to which she pleaded guilty. Instead, Section 1128(a)(3) of the Act identifies felonies “relating to fraud, theft, embezzlement” to merit exclusion; it does not require conviction for a felony with fraud, theft, or embezzlement as an element of the crime. 42 U.S.C. § 1320a-7(a)(3) (emphasis added). I am “free to look beyond the narrow constructs of a state’s criminal statutes” in determining whether Petitioner was convicted of a felony that relates to fraud or theft. Summit S. Shah, M.D., DAB No. 2836 at 7 (2017); see also Charice D. Curtis, DAB No. 2430 at 4 (2011) (“[T]he plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud and the other types of listed offenses, not just to felonies that constitute fraud or one of the other listed offenses.”).
Here, there is ample evidence from Petitioner’s plea colloquy to demonstrate her offense conduct was related to theft. At the colloquy, the prosecutor offered as a factual basis for Petitioner’s guilty plea the following:
The defendant, Jeanette Oberlink, AKA Jeanette Johnson worked as an RN in the emergency department at St. Mary’s Hospital here in Macon County in early January 2016. On approximately January 10, 2016, the defendant withdrew ten milligrams of morphine from the St. Mary’s Pyxis system for a patient with no order from the doctor. The amount of morphine that the defendant withdrew raised red flags and kicked off an investigation. The defendant was ordered to provide a sample for drug testing. The sample returned positive for morphine. When interviewed by Illinois State Police agents Vince Fisher and Sgt. Joe Gurski, the defendant confessed to diverting the morphine on January 10. During the interview, the defendant also provided a written statement corroborating what she told the Illinois State Police.
I.G. Ex. 3 at 8. Petitioner offered no objection at the time of the entry of her plea to this summary of her offense conduct. Based on this summary of Petitioner’s offense, the state court found a factual basis for her guilty plea. I.G. Ex. 3 at 9; I.G. Ex. 2 at 2. Petitioner cannot now retract or undermine these statements, which formed the basis of her agreement with the state of Illinois to resolve the criminal charges against her. See 42 C.F.R. § 1001.2007(d). Regardless of the charge to which she actually pleaded, her plea colloquy makes it clear Petitioner acted in her capacity as a nurse to withdraw, without authorization, an amount of morphine from her employer’s pharmacy. Petitioner admitted to “diverting” the morphine after taking it. I.G. Ex. 3 at 8. This unauthorized taking and diversion, regardless of the charge to which she ultimately pleaded, is sufficient to show her conviction was related to theft, as contemplated by the Act.
Petitioner also argues the offense to which she pleaded was not in connection with the delivery of a healthcare item or service. P. Br. at 2. The government observes, correctly, that “[w]hen an individual steals drugs from her employing hospital’s drug inventory, the offense occurs in connection with the delivery of a health care item or service.” I.G. Br. at 5, citing Lora Jean Murray aka Lora Jean Baker, DAB CR2200 at 3 (2010). In response, Petitioner appears to claim that because it was possible she obtained opiates for her personal use from “various individuals not affiliated with her employment,” the mere fact that she possessed and was confirmed to be using opiates is insufficient to connect her offense to the delivery of a health care item or service. P. Br. at 2.
Petitioner again misunderstands the degree to which I can consider evidence beyond the mere elements of the charge to which she pleaded. In fact, her plea colloquy firmly establishes that Petitioner, a nurse, took and diverted, without authorization, an amount of morphine from the stores of her employer, a hospital. It is irrelevant whether she used that particular morphine herself, sold it, or disposed of it. It is irrelevant whether she was charged for possessing this particular supply of morphine, or an altogether different one. For my purposes, it is sufficient to note that Petitioner admitted to exploiting her status as a hospital employee to steal an amount of a controlled substance from her employing hospital. Drugs like morphine are health care items that are intended solely for delivery to individuals for health care purposes. Petitioner had access to the morphine and was able to divert it from its proper use “by virtue of . . . her professional responsibilities in connection with delivering health care items to the public.” Kevin J. Bowers, DAB No. 2143 at 3-4 (2008). Therefore, I must conclude that the offense for which Petitioner was convicted was in fact intimately connected to the delivery of a healthcare item or service.
For the foregoing reasons, I conclude that Petitioner was convicted of a felony relating to theft that was committed in connection with the delivery of a healthcare item or service as contemplated by 42 U.S.C. § 1320a-7(a)(3).
3. 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 the I.G. had a reasonable basis to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(3), 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 I.G. has no discretion to impose a lesser period of exclusion, and I may not reduce the period of exclusion below five years.
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)(3) of the Act (42 U.S.C. § 1320a-7(a)(3)), effective August 20, 2017.
Bill Thomas Administrative Law Judge
1. Document 6b in the official case file maintained in the Departmental Appeal Board’s E-File (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 DAB E-file.
- back to note 1 2. I explain in greater detail below why Petitioner’s guilty plea and participation in a first offender diversion program amount to a conviction within the meaning of the Act.
- back to note 2 3. The Secretary has promulgated regulations implementing these provisions of the Act at 42 C.F.R. § 1001.101(a).
- back to note 3 4. For the same reason, it is irrelevant that the state court “mistakenly docketed [Petitioner’s] disposition as a ‘conviction’ but changed it in its system after the Petitioner requested a change.” P. Br. at 1.
- back to note 4