Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Michael Flood, D.P.M.
(OI File No. H-20-40397-9),
The Inspector General.
Docket No. C-20-750
Decision No. CR5803
I affirm the determination of the Inspector General (IG) of the United States Department of Health and Human Services to exclude Michael Flood, D.P.M. (Petitioner) from participation in all federal health care programs for five years under 42 U.S.C. § 1320a‑7(a)(4).
I. Background and Procedural History
In a July 31, 2020 notice, the IG informed Petitioner that he was being excluded from participation in all federal health care programs under 42 U.S.C. § 1320a-7(a)(4) for a period of five years. The notice stated that the exclusion would be effective 20 days from the date of the notice. IG Ex. 1.
Petitioner requested a hearing to dispute the exclusion on September 4, 2020. In response, the Civil Remedies Division issued my Standing Prehearing Order and notified the parties that I would hold a prehearing conference. On October 1, 2020, I held the prehearing conference by telephone, the substance of which was summarized in my
October 1, 2020 Order Following Prehearing Conference and Setting Schedule for Prehearing Submissions.
In accordance with the submission schedule: the IG filed a prehearing exchange consisting of a motion for summary judgment, supporting brief (IG Br.) and five exhibits (IG Exs. 1-5); Petitioner filed a response to the IG’s summary judgment motion (P. Response), a short-form brief (P. Br.) and one exhibit (P. Ex.1); and the IG filed a reply brief (IG Reply).
II. Decision on the Record
Neither party objected to any of the proposed exhibits; therefore, I admit them all into the record. See 42 C.F.R. § 1005.8(c); Standing Prehearing Order ¶ 12.
Petitioner indicated that he had no witness testimony to offer and that an in-person hearing was unnecessary to decide this case. P. Br. at 2. I interpret this as Petitioner’s waiver of his right to an oral hearing and as a request for a decision based on the written record. See 42 C.F.R. § 1005.6(b)(5). Because the IG did not offer any witnesses in this case, there is no need for me to hold a hearing, and I issue this decision based on the written record. Standing Prehearing Order ¶¶ 10, 11, 16.
Whether the IG had a basis to exclude Petitioner for five years from participation in all federal healthcare programs. 42 U.S.C. § 1320a-7(a)(4); 42 C.F.R. § 1001.2007(a)(1)-(2).
I have jurisdiction to adjudicate this case. 42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. § 1005.2.
V. Findings of Fact
- Petitioner is a doctor of podiatric medicine and had been licensed to practice podiatry in Illinois since August 29, 1994. See Hearing Request.
- On February 8, 2017, a felony complaint was filed in the Circuit Court of the Eighteenth Judicial Circuit, DuPage County, Illnois (Circuit Court) charging Petitioner with one count of Unlawful Acquisition of Controlled Substance in violation of 720 Ill. Comp. Stat. 570/406(b)(3), and one count of Unlawful Possession of Controlled Substance in violation of 720 Ill. Comp. Stat. 570/406(c) IG Ex. 2.
- Count One of the felony complaint alleged that Petitioner “on or about the 19th day of December, 2014 . . . knowingly acquired possession of a substance containing Hydrocodone, a controlled substance, by fraud, in that he, being a physician, issued an official prescription form dated 12/19/2014 to . . . a patient for the purpose of . . . filling the prescription and returning the Hydrocodone pills back to him.” IG Ex. 2 at 1.
- Count Two of the felony complaint alleged that Petitioner “on or about the 19th day of December, 2014 . . . knowingly and unlawfully had in his possession less than 15 grams of a substance containing Hydrocodone, a controlled substance other than as authorized in the Controlled Substances Act.” IG Ex. 2 at 1.
- Petitioner signed a Jury Waiver Form on January 9, 2018, in which he indicated that he was pleading guilty. IG Ex. 3.
- Also on January 9, 2018, the Circuit Court acknowledged Petitioner’s guilty plea, found Petitioner guilty of the class four felony of Unlawful Possession of Controlled Substance in violation of 720 Ill. Comp. Stat. 570/402(c), and sentenced Petitioner to an agreed sentence to “410 First Offender Controlled Substance Probation” (410 First Offender program) for a term of two years. The Circuit Court advised that if Petitioner successfully completed all 24 conditions of his probation, the criminal proceeding will be dismissed against him. IG Ex. 4 at 1-2.
- On January 7, 2020, the Circuit Court ordered the following (IG Ex. 5):
Upon [Petitioner’s] successful completion of the terms and conditions of his first offender probation, the court hereby discharges said [Petitioner] from probation. [Petitioner’s] probation is satisfactorily terminated. Any conviction having entered is hereby vacated. Case closed.”
- On August 5, 2020, by way of defense motion, the Circuit Court dismissed the proceedings against Petitioner nunc pro tunc to January 7, 2020. P. Ex. 1.
VI. Conclusions of Law and Analysis
The Secretary of Health and Human Services (Secretary) must exclude an individual from participation in Medicare, Medicaid, and all other federally-funded health care programs if that individual:
[H]as been convicted for an offense which occurred after August 21, 1996, 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.
42 U.S.C. § 1320a-7(a)(4). Further, the regulations implementing this statute state that this exclusion provision applies to, among others, health care practitioners. 42 C.F.R. § 1001.101(d)(1).
In the present case, the record supports the conclusion that all of these elements for a mandatory exclusion are met.
1. Petitioner was convicted of a criminal offense for purposes of 42 U.S.C. § 1320a-7(i)(2)-(4) because his guilty plea was accepted by the Circuit Court, there was a finding of guilt against him, and he entered into a first offender program, deferred adjudication program or other arrangement where the judgment of conviction was withheld.
Under 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 the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or nolo contendere is accepted by a court; or (4) the individual has entered into a first offender program, deferred adjudication program, or other arrangement where a judgment of conviction is withheld.
In this case, the record shows that Petitioner pleaded guilty, and the Circuit Court accepted Petitioner’s guilty plea and entered a finding of guilt on January 9, 2018. IG. Exs. 3-4; P. Response at 3. Therefore, I conclude that Petitioner meets the statutory definition of “convicted” of a criminal offense for purposes of exclusion under 42 U.S.C. § 1320a-7(i)(2)-(3).
This matter also fits squarely into the definition of “convicted” under 42 U.S.C. § 1320a‑7(i)(4), as the Circuit Court sentenced Petitioner to complete two years in the 410 First Offender program on January 9, 2018. IG Ex. 4 at 1. The state of Illinois established the 410 First Offender program by statute for:
“any person who has not previously been convicted of any felony offense under this Act . . . pleads guilty . . . under subsection (c) of Section 402 . . . the court, without entering a judgment and with the consent of such person, may sentence him or her to probation.”
720 Ill. Comp. Stat. 570/410(a).
That statute further states that “[u]pon violation of a term or condition of probation, the court may enter a judgment on its original finding of guilt and proceed as otherwise provided.” 720 Ill. Comp. Stat. 570/410(e). In addition, “[u]pon fulfillment of the terms and conditions of probation, the court shall discharge the person and dismiss the proceedings against him or her.” 720 Ill. Comp. Stat. 570/410(f). Lastly, “[a] disposition of probation is considered to be a conviction . . . however, discharge and dismissal under this Section is not a conviction for purposes of this Act or for purposes of disqualifications or disabilities imposed by law upon conviction of a crime.” 720 Ill. Comp. Stat. 570/410(g).
The description of the 410 First Offender program in the state of Illinois is a deferred adjudication program as described in Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994). That opinion indicated that “[i]n a deferred adjudication . . . if the defendant does not live up to the terms of his agreement, he is not free to set aside his plea or proceed to trial—the court may simply enter a judgment of conviction. Under those circumstances, the entry of a judgment is a mere formality because the defendant has irrevocably committed himself to a plea of guilty or no contest which cannot be unilaterally withdrawn.” Travers, 20 F.3d at 997; see Rudman v. Leavitt, 578 F. Supp. 2d 812, 815 (D. Md. 2008); Gupton v. Leavitt, 575 F. Supp. 2d 874, 880-81 (E.D. Tenn. 2008).
As part of the agreed sentence in this case, the Circuit Court promised to dismiss the proceedings against Petitioner if he successfully complied with all conditions within the designated two-year period. IG Ex. 4. If Petitioner had violated a condition of his probation, per 720 Ill. Comp. Stat. 570/410(e), the Circuit Court could have entered judgment against Petitioner. Petitioner, however, did not violate any terms of his probation and successfully completed the program on January 7, 2020. IG Ex. 4; P. Response at 1. The Circuit Court had withheld judgment until that day, but then vacated “any conviction having entered.” IG Ex. 5. Later the Circuit Court expressly stated that a conviction did not enter against Petitioner under 720 Ill. Comp. Stat. 570/410(a), and instead dismissed criminal proceedings against Petitioner, under 720 Ill. Comp. Stat. 570/410(f), nunc pro tunc to January 7, 2020. P. Ex. 1.
Based on the language of 720 Ill. Comp. Stat. 570/410 and the Circuit Court’s actions, it is evident that Petitioner entered into a first offender’s program/deferred adjudication program, and/or a program that withholds a judgment of conviction. I therefore conclude that Petitioner is “convicted” as that term is defined in 42 U.S.C. § 1320a-7(i)(4).
Petitioner insists that although the Circuit Court accepted his guilty plea, the conviction was later vacated, rendering it canceled or rescinded. Petitioner argues the Circuit Court did not withhold judgment against him and instead entered a guilty finding. P. Response 3-4. Petitioner asserts that “when the Court determined that Petitioner successfully completed that [First Offender] program and discharged him from the proceedings, the
Court did not merely dismiss the charges; the Court took the additional measure of vacating the conviction (and thereby the finding of guilt) altogether.” P. Response at 4.
Actually, the Circuit Court did exactly the opposite of what Petitioner suggests. The Circuit Court at first vacated Petitioner’s conviction (IG Ex. 5), but then later rectified that mistake, indicating that Petitioner was never convicted and that it was in fact dismissing criminal proceedings pursuant to 720 Ill. Comp. Stat. 570/410(f) (i.e., the 410 First Offender program). However, even if it were the case that the Circuit Court vacated Petitioner’s conviction, such an action by the Circuit Court is still encompassed by the definition of “convicted” in 42 U.S.C. § 1320a-7(i). Esohe Agbonkpolor, DAB No. 3002 at 5 (2020); see also 42 C.F.R. § 1001.2 (defining “convicted” to include “criminal conduct [that] has been expunged or otherwise removed.”) (emphasis added). Congress is not bound to follow state laws and has chosen to define convictions more broadly for purposes of excluding parties from participation in federal programs. See Travers, 20 F.3d 993 at 996 (“What constitutes a “conviction” under the Medicaid Act, however, is determined by federal law, not state law.”).
2. Petitioner was convicted of a felony.
There is no dispute that the offense Petitioner pleaded guilty to was a felony. P. Response at 1, 3; IG Exs. 2, 4; 720 Ill. Comp. Stat. 570/402(c).
3. Petitioner was convicted of a felony criminal offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.
In order for a felony conviction to serve as a basis to exclude under 42 U.S.C. § 1320a‑7(a)(4), that conviction must have been for conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. The terms “related to” and “relating to” in 42 U.S.C. § 1320a-7(a) simply mean that there must be a nexus or common sense connection. See James Randall Benham, DAB No. 2042 at 5 (2006) (internal citations omitted); see also 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 interpretation.”) (internal quotation marks omitted). Such a nexus exists between Petitioner’s criminal offense and the manufacture, distribution, prescription or dispensing of a controlled substance.
Under 720 Ill. Comp. Stat. 570/402, it is unlawful for any person knowingly to possess a controlled or counterfeit substance. Under subsection (c), a person found in violation of this section is guilty of a class four felony and is subject to a fine of no more than $25,000. 720 Ill. Comp. Stat. 570/402(c). The complaint provided the relevant facts of the incident. IG Ex. 2. Petitioner fraudulently acquired less than 15 grams of Hydrocodone by signing an official prescription for a patient on December 19, 2014.
Petitioner signed the prescription with the intent of the patient returning the Hydrocodone pills back to Petitioner. Although Petitioner ultimately pleaded guilty only to the Unlawful Possession of Controlled Substance count, it is appropriate to look to the facts alleged in a verified complaint to determine if the offense for which Petitioner was convicted has a sufficient nexus to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance under 42 U.S.C. § 1320a‑7(a)(4). Kami L. Purvis, DAB No. 2990 at 4-6 (2020). Pertitioner does not dispute that such a nexus exists and I conclude that it does.
4. The conduct for which Petitioner was convicted occurred after August 21, 1996.
The complaint charged Petitioner with committing the offense of Unlawful Possession of Controlled Substance on or about December 19, 2014. IG Ex. 2 at 1. Therefore, Petitioner’s criminal conduct occurred after August 21, 1996.
5. Petitioner is or has been a health care practitioner.
Petitioner has been licensed to practice podiatry since August 29, 1994. Hearing Request at 2. Additionally, the complaint charged that Petitioner committed his criminal conduct “being a physician, issu[ing] an official prescription form.” IG Ex. 2 at 1. Therefore, Petitioner is or has been a health care practitioner. See 42 C.F.R. § 1001.101(d)(1).
6. Under 42 U.S.C. § 1320a-7(a)(4), Petitioner must be excluded from participation in all federal health care programs for five years under 42 U.S.C. § 1320a‑7(c)(3)(B).
As indicated above, the record conclusively shows that Petitioner was convicted, as that term is defined in 42 U.S.C. § 1320a-7(i), and that conviction meets all of the elements under 42 U.S.C. § 1320a-7(a)(4) for a mandatory exclusion. Therefore, Petitioner is subject to a five-year exclusion under 42 U.S.C. § 1320a-7(c)(3)(B).
I affirm the IG’s determination that Petitioner must be excluded from participation in all federal health care programs for five years under 42 U.S.C. § 1320a‑7(a)(4).
Scott Anderson Administrative Law Judge