Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
Arnold Jerome Hudson
(O.I File No. H-20-40247-9),
Department of Health and Human Services.
Docket No. C-21-7
Decision No. CR5826
Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(2) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(2)), effective August 20, 2020. Petitioner's exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a‑7(c)(3)(B)). An additional period of exclusion of two years, for a total minimum exclusion of seven years,1 is not unreasonable based upon the presence of one aggravating factor and no mitigating factors.
The Inspector General (IG) notified Petitioner by letter dated July 31, 2020, that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for seven years. The IG cited section 1128(a)(2) of the Act as authority for Petitioner's
exclusion based on his conviction in the State of Michigan, 41B Judicial District Court (state court), of a criminal offense related to neglect or abuse of patients, in connection with the delivery of a health care item or service. The IG cited as an aggravating factor that Petitioner's acts for which he was convicted, or similar acts, had a significant impact on a program beneficiary or other individual because his acts resulted in a patient suffering fractures of the hip and ankle. IG Exhibit (Ex.) 1.
On October 2, 2020, Petitioner timely filed a request for hearing (RFH) before an administrative law judge (ALJ). This case was docketed and assigned to me on October 8, 2020. A prehearing conference was convened on October 28, 2020. The substance of the conference is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated October 29, 2020 (Prehearing Order). During the conference, Petitioner waived an oral hearing and the parties agreed this case may be decided on the briefs and documentary evidence. The IG filed a brief on the merits on December 14, 2020, with IG Exs. 1 through 5. Petitioner filed his brief on the merits (P. Br.) on January 25, 2021, with Petitioner's exhibits (P. Exs.) 1 and 2. The IG filed a reply brief on February 9, 2021. Petitioner has not objected to my consideration of IG Exs. 1 through 5 and they are admitted as evidence. The IG has not specifically objected to my consideration of P. Exs. 1 and 2, and they are admitted as evidence.
A. Applicable Law
Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner's rights to a hearing by an ALJ and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).
Pursuant to section 1128(a)(2) of the Act, the Secretary must exclude from participation in any federal health care program an individual convicted under federal or state law of a criminal offense related to the neglect or abuse of a patient, in connection with the delivery of a health care item or service. 42 C.F.R. § 1001.101(b).
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 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 has been withheld. 42 C.F.R. § 1001.2.
Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for a period of no fewer than five years. 42 C.F.R.
§ 1001.102(a). The Secretary has published regulations that establish aggravating factors the IG may consider as grounds to extend the period of exclusion beyond the mandatory minimum period, as well as mitigating factors that may be considered only if the IG proposes to impose an exclusion longer than five years. 42 C.F.R. § 1001.102(b)-(c).
The standard of proof is a preponderance of the evidence. 42 C.F.R. § 1001.2007(c). Petitioner bears the burden of proof, i.e., the burden of coming forward with the evidence and the burden of persuasion, on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues. 42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4. There may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(d).
The issues in this case are:
Whether there is a basis for exclusion; and
Whether the length of the proposed exclusion is unreasonable.
42 C.F.R. § 1001.2007(a)(1).
C. Findings of Fact, Conclusions of Law, and Analysis
My conclusions of law are set forth in bold followed by the pertinent findings of fact and analysis.
1. Petitioner's request for hearing was timely and I have jurisdiction.
2. The parties waived an oral hearing and decision on the briefs and documentary evidence is appropriate.
There is no dispute that Petitioner's request for hearing was timely and I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005.
During the October 28, 2020 prehearing conference, the parties waived their right to an oral hearing, agreeing to resolve this matter on the merits based upon their pleadings and documentary evidence. 42 C.F.R. § 1005.6(b)(5).
3. There is a basis for Petitioner's exclusion pursuant to section 1128(a)(2) of the Act.
a. Undisputed Facts
On July 3, 2019, Petitioner pleaded guilty to a charge of vulnerable adult abuse in the fourth degree. IG Ex. 2 at 5; IG Ex. 3 at 1, 4-8. The charge alleged that Petitioner was responsible to care for a vulnerable adult and he knowingly or intentionally failed to follow a prescribed plan of care related to transfers from bed to wheelchair which posed an unreasonable risk of harm. IG Ex. 2 at 5. When entering his plea, Petitioner admitted that on about May 13, 2018, he failed to follow the standard of care or practice for a nursing home resident under his care. Petitioner's guilty plea was entered in exchange for a delay in sentencing. The state court delayed the sentence for three to six months and assessed a fine of $500. IG Ex. 2 at 5-6; IG Ex. 3 at 1, 4-8; IG Ex. 5; P. Ex. 1; P. Br. at 1-2. A deferred sentencing proceeding was convened by the state court on March 12, 2020, and the charge to which Petitioner pleaded guilty on July 3, 2019, was dismissed. IG Ex. 4 at 7; IG Ex. 5; P. Ex. 1.
On January 30, 2020, the Michigan Attorney General (AG) forwarded information related to Petitioner's conviction to the IG. The AG provided a summary of the case. Petitioner and a co-defendant were providing care to a nursing home resident referred to as BK. The resident's care plan required a two-person assist for transfers using a Hoyer lift. On May 13, 2018, Petitioner and his co-defendant transferred the resident without the Hoyer lift. The AG states that it is not clear whether Petitioner and his co-defendant did the transfer together or whether Petitioner transferred BK by himself, while his co‑defendant stood by. However, there is no question the Hoyer lift was not used as that was admitted by Petitioner and his co-defendant. The AG states that shortly after the transfer BK complained of pain in her right leg and she was subsequently diagnosed with fractures of her right femur (thigh bone) and left ankle. The AG opined that because the resident was substantially limited physically prior to the transfer, "the injuries did not cause serious impairment." IG Ex. 2 at 1-2. Special Agent (SA) Stratton of the AG's office states in his report that "initial information is . . . [d]uring the transfer the resident received fractures . . . ." IG Ex. 2 at 3. SA Stratton also reports information that he attributes to a surveyor regarding allegations by the resident and the surveyor's interview of Petitioner and his co-defendant. However, SA Stratton does not state that he confirmed the initial information or made a similar finding after reviewing the evidence. In fact, SA Stratton clearly states in his report that he planned to contact the nursing facility to obtain witness names and a copy of the facility's internal report. IG Ex. 2 at 3‑4.
On July 1, 2020, the Michigan Department of Licensing and Regulatory Affairs (Licensing) granted Petitioner's petition to have negative findings of neglect removed from Petitioner's record under the nurse aide registry. P. Ex. 2.
The IG cites section 1128(a)(2) of the Act as authority for Petitioner's mandatory exclusion. The statute provides:
(a) MANDATORY EXCLUSION. — The Secretary shall exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):
* * * *
(2) Conviction relating to patient abuse. — Any individual or entity that has been convicted, under Federal or State law, of a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service.
Act § 1128(a)(2). The plain language of section 1128(a)(2) of the Act requires that the Secretary exclude from participation in Medicare, Medicaid, and all federal health care programs, any individual or entity:
(1) convicted of a criminal offense;
(2) where the offense related to neglect or abuse of patients; and
(3) where the offense is related to the delivery of a health care item or service.
Appellate panels of the Departmental Appeals Board (the Board) have long held that the statutory terms describing an offense do not control whether that offense is "related to" the delivery of a health care item or service under Medicare or a state health care program for purposes of an exclusion pursuant to section 1128(a) of the Act. Rather, an ALJ and the Board must determine whether there is a commonsense connection or nexus between the offense and the delivery of a health care item or service. An ALJ and the Board consider evidence as to the nature of the offense and the facts that were the basis for the conviction. Kimbrell Colburn, DAB No. 2683 at 5 (2016); Scott D. Augustine, DAB No. 2043 at 5-6 (2006); Berton Siegel, D.O., DAB No. 1467 at 6-7 (1994); Dewayne Franzen, DAB No. 1165 (1990). An ALJ may also use extrinsic evidence to "[fill] in the circumstances surrounding the events which formed the basis for the offense of which Petitioner was convicted." Narendra M. Patel, M.D., DAB No. 1736 at 7 (2000). The terms "related to" and "relating to" in 42 U.S.C. § 1320a-7 simply mean that there must be a nexus or commonsense connection. Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase "relating to" 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 quotes omitted); Quayum v. U.S. Dep't of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).
Petitioner concedes that the IG has a basis to exclude him pursuant to section 1128(a)(2) of the Act based on Petitioner's guilty plea. Petitioner concedes that Petitioner's guilty plea satisfies the definition of conviction under section 1128(i)(3) (acceptance of a guilty plea is a conviction) and (4) (conviction includes participation in first offender programs and deferred adjudications). Petitioner concedes that his conviction was related to patient abuse and that it was in connection with the delivery of a health care item or service. P. Br. at 3-4.
Accordingly, I conclude that the elements that trigger mandatory exclusion pursuant to section 1128(a)(2) are satisfied and there is a basis for Petitioner's exclusion.
4. Section 1128(c)(3)(B) of the Act requires a minimum exclusion of five years for any exclusion pursuant to section 1128(a) of the Act.
I have concluded that there is a basis to exclude Petitioner pursuant to section 1128(a)(2) of the Act. Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act. There is no discretion to impose a lesser period. The remaining issue is whether it is unreasonable to extend Petitioner's exclusion by an additional two years for a total period of exclusion of seven years.
5. The aggravating factor established by 42 C.F.R. § 1001.102(b)(3) exists in this case as alleged by the IG.
Although Petitioner concedes the IG had a basis to exclude him pursuant to section 1128(a)(2) of the Act for the minimum of five years, Petitioner challenges extending the period of exclusion to seven years.
The IG notified Petitioner that one aggravating factor is present in this case that justifies an exclusion of two additional years: that Petitioner's acts that resulted in his conviction "had a significant adverse physical, mental or financial impact on one or more program beneficiaries or other individuals." The IG went on to allege that the act for which Petitioner was convicted caused "a patient to suffer fractures to their hip and ankle." IG Ex. 1 at 2.
The IG bears the burden in this proceeding to prove the existence of aggravating factors by a preponderance of the evidence. 42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4 (Petitioner bears the burden for affirmative defenses and mitigating factors and IG bears the burden as to all other issues). Therefore, initially, the issue is whether the IG met her burden as to the aggravating factor cited, i.e., whether BK suffered a significant adverse impact due to the conduct for which Petitioner was convicted. The IG relies upon the
AG's report which states that shortly after being transferred without a Hoyer lift, BK complained of pain in her right leg and was diagnosed with a fracture of her right femur (thigh bone) and her left ankle. IG Reply at 3-4; IG Ex. 2 at 1. Petitioner did not object to my consideration of IG Ex. 2, which includes the AG's letter and the report of SA Stratton. Petitioner does not argue that I should not accord full weight to IG Ex. 2 despite its hearsay nature. Significantly, Petitioner does not deny that BK in fact suffered a broken right leg and left ankle or that the fractures were due to the improper transfer for which Petitioner was convicted. P. Br. at 1-2, 4-5.
Petitioner argues that the IG failed to show by a preponderance of the evidence that the aggravating factor under 42 C.F.R. § 1001.102(b)(3) existed. P. Br. at 5. I conclude however, based on IG Ex. 2 and the absence of a denial by Petitioner that the evidence shows it is more likely than not, that is, a preponderance of the evidence, that BK's right leg and left ankle fractures were caused by the improper transfer of BK for which Petitioner was convicted.
Petitioner also argues that the IG has failed to show by a preponderance of the evidence that BK suffered a "significant adverse physical impact" due to her injuries. P. Br. at 5. Petitioner relies upon the statement of the AG that because BK "was substantially limited in her physical functioning prior to the incident, the injuries did not cause serious impairment." IG Ex. 2 at 1; P. Br. at 5. However, a fair reading of the AG's statement is that because BK was already severely limited in her functioning, the fractured right leg and left ankle did not create further limitation on her functioning. The AG did not state that BK did not suffer fractures and associated pain or opine that the fractures and pain did not constitute adverse physical impact. Indeed, the evidence shows that BK complained of pain in her right leg, and her complaints of pain led to the diagnoses of right leg and left ankle fractures. The fact that BK's functioning may not have been further limited by her fractures is not the issue. The fact that BK suffered the fractures and pain (at least associated with the right leg fracture) establishes that it is more likely than not that BK suffered significant adverse impact within the meaning of 42 C.F.R. § 1001.102(b)(3). The terms "significant," "adverse," and "impact" are not defined in 42 C.F.R. pt. 1001. In the rulemaking promulgating 42 C.F.R. § 1001.102(b)(3), the IG stated in response to comments that "[t]o be an aggravating factor, we agree that the impact must be more than minimal, that is, it must have been significant . . . ." 57 Fed. Reg. 3298, 3315 (Jan. 29, 1992). No other definition was provided by the drafters of the regulation. Therefore, it is appropriate to considerer common meanings of the terms found in the Merriam-Webster Dictionary:2
Significant is defined as "having meaning," "having or likely to have influence or effect : IMPORTANT," or "probably caused by something other than mere chance."
Adverse means "acting against or in a contrary direction : HOSTILE," "opposed to one's interests: UNFAVORABLE," or "causing harm : HARMFUL."
Impact, when used as a noun, is defined as "an impinging or striking especially of one body against another," "a forceful contact or onset," or "the force of impression of one thing on another: a significant or major effect."
I conclude that BK suffered significant adverse physical impact in the form of a broken right leg and left ankle. Broken bones and pain (depending on its severity) must be considered more than minimal, important, harmful, and major effects. I further conclude that the preponderance of the evidence shows it is more likely than not that BK's fractures were due to the improper transfer for which Petitioner was convicted.
Accordingly, I conclude that the IG has established, and Petitioner has not successfully rebutted, that the aggravating factor authorized to be considered by 42 C.F.R. § 1001.102(b)(3) exists in this case.
6. Petitioner has failed to establish that any mitigating factor authorized to be considered by 42 C.F.R. § 1001.102(c) exists in this case.
If any of the aggravating factors authorized by 42 C.F.R. § 1001.102(b) are cited by the IG to justify an exclusion of longer than five years, as in this case, then mitigating factors may be considered as a basis for reducing the period of exclusion to no fewer than five years. 42 C.F.R. § 1001.102(c). The only authorized mitigating factors that I may consider are listed in 42 C.F.R. § 1001.102(c):
(1) In the case of an exclusion under § 1001.101(a), whether the individual or entity was convicted of three or fewer misdemeanor offenses and the entire amount of financial loss (both actual loss and intended loss) to Medicare or any other Federal, State, or local governmental health care program due to the acts that resulted in the conviction, and similar acts, is less than $5,000;
(2) The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability; or
(3) The individual's or entity's cooperation with Federal or State officials resulted in –
(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,
(ii) Additional cases being investigated or reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses, or
(iii) The imposition against anyone of a civil money penalty or assessment under part 1003 of this chapter.
Petitioner has the burden to prove by a preponderance of the evidence that there is a mitigating factor for me to consider. 42 C.F.R. § 1005.15(c); Prehearing Order ¶ 4.
Petitioner argues that exclusion for seven years is unreasonable and unduly burdensome considering the totality of the circumstances. P. Br. at 2. Petitioner argues that there are mitigating factors not considered by the IG:
1) The scope and nature of the . . . Investigative Report of the Michigan Department of Attorney-General Health Care Fraud Division;
2) Reported Findings of the Michigan Department of Licensing and Regulatory Affairs; and
3) The characteristics of Arnold Hudson.
P. Br. at 4. Petitioner notes regarding his first alleged mitigating factor that the AG concluded that BK's fractures did not cause serious impairment in addition to her existing impairments. Petitioner further argues that BK's fractures did not affect the prosecution of Petitioner. Regarding his second mitigating factor, Petitioner argues that Licensing removed negative findings of neglect related to the incident from the nurse aide registry. Petitioner argues that the AG, Licensing, and the IG are all considering the same set of facts and circumstances and the IG should also consider that BK's injuries were not
severe or significant.3 Petitioner argues that a seven-year exclusion effectively renders Petitioner unemployable. Regarding Petitioner's third mitigating factor, he argues he has been employed as a certified nursing aide for seven years, with no prior suspensions, revocations, exclusions, or negative findings. Petitioner always followed the proper standard of care with his patients. His guilty plea shows he takes full responsibility for failure to use a Hoyer lift when transferring BK. However, Petitioner emphasized, without presenting any supporting evidence, that his decision to transfer without a Hoyer lift was made out of necessity as no Hoyer lift was readily available. Petitioner argues that his offense does not show that he is untrustworthy given the circumstances. P. Br. at 4-7.
Even if I found that Petitioner's allegations regarding his alleged mitigating facts are correct, those facts have no impact because they are not facts I am authorized to consider as mitigating factors under 42 C.F.R. § 1001.102(c). I am bound to follow the regulations. 42 C.F.R. § 1005.4(c)(1).
Accordingly, I conclude Petitioner has failed to establish the existence of a mitigating factor I am authorized to consider under 42 C.F.R. § 1001.102(c).
7. Exclusion for seven years is not unreasonable in this case.
The regulation states that the ALJ must determine whether the length of exclusion imposed is "unreasonable." 42 C.F.R. § 1001.2007(a)(1). The Board, however, has made clear that the role of the ALJ in exclusion cases is to conduct a de novo review of the facts related to the basis for the exclusion, and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102, and to determine whether the period of exclusion imposed by the IG falls within a reasonable range. Juan de Leon, Jr., DAB No. 2533 at 4-5 (2013); Craig Richard Wilder, DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000). The Board explained that, in determining whether a period of exclusion is "unreasonable," the ALJ is to consider whether such period falls "within a reasonable range." Cash, DAB No. 1725 at 17 n.6. The Board cautions that whether the ALJ thinks the period of exclusion too long or too short is not the issue. The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.
In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG fails to consider a mitigating factor that is
shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggested that when it is found that an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected, absent some circumstances that indicate no such adjustment is appropriate. Thus, the Board has by these various prior decisions significantly limited my authority under the applicable regulations to judge the reasonableness of the period of exclusion.
The only mitigating factors I am permitted to consider are those established by 42 C.F.R. § 1001.102(c). Petitioner asks me to consider his alleged mitigating factors discussed above. However, I am not permitted to consider any of Petitioner's alleged mitigating factors because none are mitigating factors authorized under 42 C.F.R. § 1001.102(c).
Based on my de novo review, I conclude that a basis for Petitioner's exclusion exists and that the evidence establishes the one aggravating factor that the IG relied on to impose the seven-year exclusion. I conclude that I have no authority to change the period of Petitioner's exclusion. I further conclude that a seven-year exclusion is in a reasonable range and not unreasonable considering the existence of one aggravating factor and no mitigating factors. Accordingly, I conclude that no change in the period of exclusion is necessary or permitted.
Petitioner's argument may be construed to be that the seven-year exclusion affects his ability to pursue his chosen profession in health care and infringes upon his property and liberty interests. P. Br. at 5-6. The federal courts have rejected claims that the Secretary's exclusion procedures amount to a deprivation of due process, finding no property or liberty interests protected by the constitution. Rodabaugh v. Sullivan, 943 F.2d 855 (8th Cir. 1991); Lavapies v. Bowen, 883 F.2d 465 (6th Cir. 1989); Hillman Rehab. Ctr. v. U.S. Dep't of Health & Human Servs., No. 98-3789 (GEB), slip op. at 16, 1999 WL 34813783 at 16 (D.N.J. May 13, 1999); Travers v. Sullivan, 801 F. Supp. 394, 404-05 (E.D. Wash. 1992), aff'd, Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994). Of course, Petitioner's exclusion does not prohibit him from engaging in all employment. Petitioner's exclusion precludes him from participation in Medicare, Medicaid, and all federal health care programs and payment for his services through those programs.
For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for seven years pursuant to section 1128(a)(2) of the Act, effective August 20, 2020.
Keith W. Sickendick Administrative Law Judge
1. Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires. Reinstatement is not automatic upon completion of the minimum period of exclusion. Citations are to the 2019 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.
- back to note 1 2. Merriam-Webster.com (last visited Feb. 17, 2021).
- back to note 2 3. Petitioner recognizes that state and federal agencies operate under different authority or jurisdiction. Petitioner makes no assertion and cites no authority for the proposition that the IG is bound by the AG or Licensing decisions.
- back to note 3