Brendon Cox, DAB CR6388 (2023)

DECISION

Petitioner, Brendon Cox, worked as an occupational therapist in a rehabilitation facility in Spanish Fork, Utah.  In submitting a claim for a wheelchair to the state Medicaid program, he made numerous false statements.  The Medicaid program paid for the wheelchair.  Petitioner was caught, however, and charged with a felony:  “False Claims for Medical Benefits.”  He ultimately pleaded guilty to one misdemeanor count of theft.

The Inspector General (IG) considered his guilty plea a conviction and has excluded Petitioner for five years from participating in Medicare, Medicaid, and all federal health care programs, as authorized by section 1128(a)(1) of the Social Security Act (Act).  Petitioner appeals the exclusion.  For the reasons discussed below, I find that the IG properly excluded him.  Because the statute mandates a minimum five-year exclusion, the length of his exclusion is, by law, reasonable.

Background

In a letter dated June 30, 2023, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a period of five years because he had been convicted of a criminal offense related to the delivery of

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an item or service under Medicare or a state health care program.  The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.  IG Ex. 1.

Petitioner timely requested review, and the case has been assigned to me.

The IG submitted a written argument (IG Br.) and six exhibits (IG Exs. 1-6).  Petitioner responded (P. Br.).  In the absence of any objections, I admit into evidence IG Exs. 1-6.

Neither party claims that an in-person hearing is necessary, and, in any event, neither presents any witnesses.  IG Br. at 8; See P. Br.; Order and Schedule for Filing Briefs and Documentary Evidence at 3-4.  I will therefore decide the case based on the written record.

Discussion

1.    Petitioner must be excluded from program participation for a minimum of five years because he was convicted of a criminal offense related to the delivery of an item or service under a state health care program.  Act § 1128(a)(1).1

Under section 1128(a)(1) of the Act, the Secretary of Health and Human Services must exclude an individual who has been convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  42 C.F.R. § 1001.101(a).

The conviction.  In an information dated January 13, 2022, Petitioner was charged with one felony count of making false claims for medical benefits, in violation of (then) Utah Code § 26-20-7(1).2  The information charged that, on August 24, 2018, Petitioner “intentionally, knowingly, or recklessly” submitted to a state employee or officer a claim for benefits “that was wholly or partially” false or was for items that the person knew were not medically necessary.   The value of the benefits was greater than $1,500 but less than $5,000.  IG Ex. 2.

The information then described the underlying facts.  Petitioner was working as an occupational therapist at a rehabilitation facility.  Purportedly on behalf of a patient, he submitted a request for a wheelchair.  In the accompanying evaluation, he made numerous false statements, including that the patient was totally dependent on a,

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wheelchair and that the patient was in a facility-issued manual wheelchair that no longer met his needs.  In fact, the patient had never used a wheelchair, and the facility had not issued him one.  When questioned by a special agent, Petitioner claimed that the wheelchair was intended for the resident’s use when he left the facility for doctor visits or other activities.  In fact, the patient’s wife had signed a waiver, expressly declining to use a wheelchair during those excursions.  IG Ex. 2 at 2; see IG Ex. 3 at 8.

Petitioner’s false claim cost the Medicaid program $3,120.78.  IG Ex. 2 at 2.

On December 19, 2022, Petitioner pleaded guilty to a misdemeanor charge of theft.  The court accepted the plea, which was held “in abeyance,” and ordered Petitioner to pay $3,120.78 in restitution.  IG Ex. 5.  On May 31, 2023, the court found that Petitioner had completed the conditions imposed and dismissed the charge “pursuant to the Plea in Abeyance Agreement.”  IG Ex. 6.

Petitioner’s crime was thus unquestionably related to the delivery of an item or service under a state health-care program.  He submitted a false claim to the state Medicaid program.

Petitioner’s defense: no conviction.  Petitioner argues that he was not convicted because he entered a “plea in abeyance,” and the charges against him were ultimately dismissed.

The statute and regulations provide that a person is “convicted” when:  1) “a judgment of conviction has been entered” regardless of whether that judgment has been (or could be) expunged; 2) there has been a finding of guilt; 3) a plea of guilty or nolo contendere has been accepted by the court; or 4) the individual has entered into participation in a first offender, deferred adjudication, or other arrangement or program where the judgment of conviction has been withheld.  Act § 1128(i); 42 C.F.R. § 1001.2.

The Departmental Appeals Board characterizes as “well established” the principle that a “conviction” includes “diverted, deferred and expunged convictions regardless of whether state law treats such actions as a conviction.”  Henry L. Gupton, DAB No. 2058 at 8 (2007), aff’d sub nom. Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008).  For sound reasons, Congress deliberately defined “conviction” broadly to assure that exclusions would not hinge on state criminal justice policies.  Funmilola Mary Taiwo, DAB No. 2995 at 6 (2020); Gupton, DAB No. 2058 at 7-8.

The rationale for the different meanings of “conviction” for state criminal law versus federal exclusion purposes follows from the distinct goals involved.  The goals of criminal law generally involve punishment and rehabilitation of the offender, possibly deterrence of future misconduct by the same or other persons, and various public policy goals.

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[footnote omitted].  Exclusions imposed by the I.G., by contrast, are civil sanctions, designed to protect the beneficiaries of health care programs and the federal fisc, and   are thus remedial in nature rather than primarily punitive or deterrent . . . . In the effort to protect both beneficiaries and funds, Congress could logically conclude that it was better to exclude providers whose involvement in the criminal system raised serious concerns about their integrity and trustworthiness, even if they were not subjected to criminal sanctions for reasons of state policy.

Gupton, DAB No. 2058 at 7-8; see H.R. Rep. No. 99-727, 99th Cong., 2d Sess. 75 (1986), reprinted in 1986 U.S.C.C.A.N. 3607, 3665 (“These individuals [who have entered into deferred adjudication programs] have admitted that they engaged in criminal abuse against a Federal health program[,] and, in the view of the Committee, they should be subject to exclusion.  If the financial integrity of Medicare and Medicaid is to be protected, the programs must have the prerogative not to do business with those who have pleaded to charges of criminal abuse against them.”); Travers v. Sullivan, 801 F. Supp. 394, 402 (E.D. Wash. 1992), aff’d sub nom. Travers v. Shalala, 20 F.3d 993, 997 (9th Cir. 1994).

Here, Petitioner pleaded guilty to misdemeanor theft (of Medicaid funds), and the court accepted his plea.  IG Ex. 5 at 1 (“After hearing a factual basis[,] the court accepts defendant’s guilty plea”).  The court ordered him to pay restitution.  IG Ex. 5 at 2.  Had he failed to comply with that condition, the court was authorized to find him guilty and “impose sentence against [him] for the offense to which the original plea was entered.”  Utah Code § 77-2a-3.  He was thus convicted within the meaning of the statute and regulations.  Act § 1128(i)(3), (4); 42 C.F.R. § 1001.2(c), (d).

Petitioner’s defense:  his innocence.  Although, in responding to the IG’s arguments, Petitioner has not pursued the issue, in his hearing request, he insists that he is “innocent of all charges brought against [him].”

Having pleaded guilty, Petitioner may not use this forum to argue that he did not, in fact, commit the crime.  The regulations preclude such a collateral attack on an underlying conviction:

When the exclusion is based on the existence of a criminal conviction . . . or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction . . . is not reviewable[,] and the individual or entity may not collaterally attack it[,] either on substantive or procedural grounds[,] in this appeal.

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42 C.F.R. § 1001.2007(d); Janice Cassandra Wrenn, DAB No. 3118 at 8-11 (2023); Delores L. Knight, DAB No. 2945 at 9 (2019); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000).

Petitioner was thus convicted of a program-related crime and must be excluded.  An exclusion brought under section 1128(a)(1) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.2007(a)(2).

Conclusion

For these reasons, I conclude that the IG properly excluded Petitioner from participation in Medicare, Medicaid, and all federal health care programs, and I sustain the five-year exclusion.