Charlanski Bates, DAB CR6528 (2024)

DECISION

Respondent, the Inspector General of the United States Department of Health and Human Services (the IG), excluded Petitioner, Charlanski Bates, from participation in Medicare, Medicaid, and all other federal health care programs claiming her nursing license was revoked for reasons bearing on her professional competence, professional performance, or financial integrity.  Petitioner sought review of this action.  For the reasons stated below, I affirm the IG’s exclusion determination.

I. Procedural History

By letter dated December 29, 2023, the IG notified Petitioner of her exclusion from participation in Medicare, Medicaid, and all federal health care programs under section 1128(b)(4) of the Social Security Act (Act), 42 U.S.C. § 1320a-7(b)(4), because her license to provide health care was revoked, suspended, or otherwise lost, or was surrendered while a formal disciplinary proceeding was pending for reasons bearing on her professional competence, professional performance, or financial integrity.  IG Ex. 1 at 1.  The IG advised Petitioner her exclusion would remain in effect until the IG reinstated her, which could only occur if she regained her health care license, obtained a new license in any state, or her period of exclusion exceeded three years.  Id.

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Petitioner timely requested a hearing before an administrative law judge (ALJ) in the Civil Remedies Division, resulting in my designation to hear and decide this case.  I held a pre-hearing conference by telephone with the parties on March 27, 2024, the substance of which is set forth in an order I issued on April 3, 2024 (Summary Order).  See 42 C.F.R. § 1005.6.  Among other things, I directed the parties to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and exhibits in support thereof.  Summary Order ¶ 7.

The IG filed a short-form brief (IG Br.)1 and five proposed exhibits (IG Exs. 1-5).  Petitioner filed a short-form brief (P. Br.) with seven unlabeled and unpaginated documents I take to be proposed exhibits.2  The first document is a search result dated May 5, 2024 confirming Petitioner is actively licensed in Indiana as a Certified Nurse Aide (CNA), a Licensed Practical Nurse (LPN), and a Registered Nurse (RN).  DAB E-file Dkt. No. C-24-284, Doc. No. 6 (hereinafter P. Ex. 1).  The second document is an unofficial transcript of classes taken by Petitioner at Fortis College, dated March 20, 2019, and a transcript evaluation form from Censa International College dated April 25, 2019 assessing Petitioner’s prior coursework and identifying courses she needed to complete to obtain an Associate’s Degree of Nursing.  DAB E-file Dkt. No. C-24-284, Doc. No. 7 (hereinafter P. Ex. 2).

The third document identifies Petitioner on a list of individuals scheduled to appear before an administrative law judge for Indiana’s State Board of Nursing on January 4, 2024.  DAB E-file Dkt. No. C-24-284, Doc. No. 8 (hereinafter P. Ex. 3).  The fourth document contains copies of Petitioner’s nursing diplomas, a certificate confirming her placement on the Dean’s List by the community college she first attended, and a transcript of courses taken for her bachelor’s degree in nursing.  DAB E-file Dkt. No. C-24-284, Doc. No. 9 (hereinafter P. Ex. 4).  The fifth document is a letter dated January 16, 2023 from LaCinda Luke, RN, MSN, a former colleague of Petitioner, applauding her professional competence and performance.  DAB E-file Dkt. No. C-24-284, Doc. No. 10 (hereinafter P. Ex. 5).

The sixth document is Petitioner’s hearing request, which sets forth her educational background and struggles following the suspension of her license, accompanied by duplicates of her degrees and a picture of an award she received for 10 years of service.  DAB E-file Dkt. No. C-24-284, Doc. No. 11 (hereinafter P. Ex. 6).  The seventh document combines Petitioner’s Exhibits 4 and 6.  DAB E-file Dkt. No. C-24-284, Doc. No. 12 (hereinafter P. Ex. 7).

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The IG subsequently filed a reply brief (IG Reply).

II. Admission of Exhibits and Decision on the Record

Neither party objected to the opposing party’s proposed exhibits.  Accordingly, I admit IG Exhibits 1 through 5 and Petitioner Exhibits 1 through 7 into the record.  42 C.F.R. § 1005.8(c); Civ. Remedies Div. P. § 14(e).

I advised the parties I would hold an in-person hearing only if a party submitted written direct testimony from a witness and the opposing party asked to cross-examine that witness.  Summary Order ¶ 9.  The IG does not believe an in-person hearing to be necessary.  IG Br. at 5-6.  Petitioner indicated she did not believe an in-person to be necessary but also stated that if her license could not be reinstated through the exchange of informal briefs, she “would like a hearing to be held on [her] behalf,” naming herself as a witness whose testimony she would like to offer.  P. Br. at 3.  But the IG has not sought to cross‑examine Petitioner.  Summary Order ¶ 9; Civ. Remedies Div. P. §§ 16(b), 19(d).3  Petitioner asserts no other reason I should hold a hearing in this matter and I have given her written testimony due consideration.  I therefore decide this case on the written record before me.

III. Issue

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs under 42 U.S.C. § 1320a-7(b)(4).4  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 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 at

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42 C.F.R. §§ 1001.2007(a) and 1005.2, and the rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3.

The Act permits the Secretary5 to exclude individuals or entities whose license to provide health care has been revoked or suspended:

(b) PERMISSIVE EXCLUSION.—The Secretary [of the Department of  Health and Human Services] may exclude the following individuals and entities from participation in any Federal health care program (as defined in section 1128B(f)):

* * * *

(4) LICENSE REVOCATION OR SUSPENSION.—Any individual or entity—

(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or who otherwise lost such a license or the right to apply for or renew such a license, for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity, or

(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority and the proceeding concerned the individual’s or entity’s professional competence, professional performance, or financial integrity.

Act § 1128(b)(4); see also 42 C.F.R. § 1001.501(a).

The length of an exclusion imposed under section 1001.501 may not be for a period shorter than the period during which the individual’s or entity’s license is revoked, suspended, or otherwise not in effect as a result of, or in connection with, a state licensing agency action.  42 C.F.R. § 1001.501(b).

The standard of proof I apply in this proceeding is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion as to affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  Id. § 1005.15(c).

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V. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold below and followed by pertinent findings of fact and analysis.

A. Petitioner timely requested a hearing, and I have jurisdiction.

Petitioner timely requested a hearing.  See 42 C.F.R. § 1005.2(c).  I have jurisdiction to hear and decide this case.  See id. §§ 1001.2007(a)(1), 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(b)(4) of the Act.

The IG is authorized to exclude an individual from participation in Medicare, Medicaid, and all federal health care programs where:  (1) the individual’s license to provide health care was revoked or suspended by any state licensing authority, or the license was otherwise lost, including the right to apply for or renew such a license, for reasons bearing on the individual’s professional competence, professional performance or financial integrity; or (2) the individual surrendered such a license while a formal disciplinary proceeding concerning the individual’s professional competence, professional performance or financial integrity was pending before a state licensing authority.  Act § 1128(b)(4); 42 C.F.R. § 1001.501(a)(1), (2).

As discussed below, I find the IG established a basis to exclude Petitioner because a state licensing authority suspended her nursing license for a reason bearing on her professional competence or professional performance.

1. Relevant Facts

On May 3, 2021, Petitioner applied to obtain licensure as a Registered Nurse (RN) in Michigan, relying on her previously acquired Indiana RN license.6  IG Ex. 2 at 10.  Michigan’s Board of Nursing issued Petitioner a license to practice as an RN on May 19, 2021.  Id.On December 5, 2022, the Michigan Board’s Disciplinary Subcommittee summarily suspended Petitioner’s license.  Id. at 7.

In support of its action, the Subcommittee observed an Administrative Complaint issued the same day by Amy Gumbrecht, the Director of Michigan’s Bureau of Professional Licensing, setting forth allegations that warranted emergency action to protect public

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health, safety, or welfare.  Id.at 7.  In that complaint, Director Gumbrecht asserted the Palm Beach School of Nursing, where Petitioner received her RN degree, began selling fraudulent nursing diplomas, transcripts, and other credentials to enable individuals to fraudulently obtain nursing licenses after the state of Florida terminated its nursing education license in May 2017.  Id. at 9.  That included “back-dat[ing] the dates on application forms to make it appear that the purchaser graduated while Palm Beach School was licensed and in operation.”  Id. at 10.

The director observed that copies of Petitioner’s transcript from Palm Beach indicated she started there on May 2, 2019, after Florida terminated the school’s license, and that Petitioner obtained her RN license in Indiana on December 1, 2020.  Id. at 9-10.  She also noted Palm Beach School’s president pleaded guilty to federal crimes related to conspiring to fraudulently issue nursing credentials.  Id. at 10.  Relying on these observations, Director Gumbrecht asserted “[a] review of Palm Beach School’s records identifies [Petitioner] as one of the individuals who purchased fraudulent credentials.”  Id.

Director Gumbrecht accused Petitioner of using fraudulently obtained academic credentials to obtain her RN license in Indiana, by which she fraudulently obtained her RN license in Michigan.  Id. at 10-11.  She specified Petitioner’s conduct violated various provisions of Michigan’s Public Health Code and demonstrated her lack of “good moral character,” an inability to serve the public in a “fair, honest and open manner,” and established she failed to meet the educational requirements prescribed by the state’s nursing board.  Id. at 11.

On May 4, 2023, the Michigan Board of Nursing’s Disciplinary Subcommittee issued a Consent Order that found the allegations contained in the Administrative Complaint to be true and that as a result, Petitioner violated provisions of Michigan’s Public Health and Administrative Codes.  Id. at 1-2.  It noted the parties stipulated that Petitioner did not admit the allegations made against her in the Administrative Complaint to be true but agreed the Subcommittee could treat them as true to resolve the matter.  Id. at 4.  Relying on these stipulations, the Subcommittee suspended Petitioner’s RN license for a minimum period of 18 months.  Id. at 2.

2. A state licensing authority suspended Petitioner’s license to provide health care.

There is no dispute Petitioner’s license to provide health care was revoked, suspended, or otherwise lost because of action taken by a state licensing authority.  P. Br. at 2; IG Br. at 2-3; IG Ex. 2 at 1-6.  Michigan law authorizes its Board of Nursing to license nurses and further authorizes its Disciplinary Subcommittee to discipline licensed nurses.  Mich. Comp. Laws §§ 333.16148, 333.16221, 333.16226.  The Board and its Disciplinary

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Subcommittee therefore constitute a state licensing authority within the meaning of the Act.

The Disciplinary Subcommittee investigated allegations made against Petitioner in a formal complaint and then suspended her RN license for 18 months.  IG Ex. 2 at 4.  The IG has established a state licensing authority suspended Petitioner’s license to provide health care.

3. Michigan’s Board of Nursing suspended Petitioner’s nursing license for reasons bearing on her professional competence, professional performance, or financial integrity.

The IG contends the Act authorizes her permissive exclusion action because Petitioner’s nursing license was suspended for reasons bearing on her professional competence or performance, namely failing to obtain “a specific education or experience” necessary for licensure as an RN in Michigan.  IG Br. at 4, citing IG Ex. 2 at 1-2.  Petitioner does not dispute the suspension of her license but argues the Michigan Board of Nursing’s finding does not demonstrate her lack of professional competence or performance, pointing out she remains an actively licensed RN in Indiana.  P. Req. for Hearing at 1-2; P. Br. at 2-3.

Petitioner attempts to rebut the IG’s claim that the Act permits her exclusion by relying on her active licensure in Indiana to demonstrate her professional competence and ability to perform professionally as an RN.  But the Act does not require the IG to prove Petitioner is not professionally competent or incapable of performing as an RN to exclude her; the IG need only show that a state licensing authority suspended Petitioner’s license for reasons bearing on her professional competence or performance.  Act § 1128(b)(4); 42 C.F.R. § 1001.501(a)(1).  There is sufficient evidence for me to conclude the IG has met this burden.

Michigan’s Board of Nursing issued an order on May 4, 2023 suspending Petitioner’s nursing license.  It relied on stipulations she made to resolve the matter, including her agreement that the Board of Nursing could treat as true the allegations made against her in the Administrative Complaint.  IG Ex. 2 at 4.  Those allegations included the claim that Petitioner fraudulently obtained academic credentials to obtain her RN license in Indiana, which allowed her to fraudulently obtain her RN license in Michigan.  Id. at 10‑11.

Taking these allegations to be true, as Petitioner stipulated it could, the Michigan Board of Nursing found Petitioner had violated sections 16221(b), (c), and (h), and 16174(1)(c) of the state’s Public Health Code and section R. 338.10206(2)(a) of the state’s Administrative Code.  Id. at 1-2.  These provisions require individuals seeking licensure to meet educational requirements set by the Board of Nursing.  IG Ex. 2 at 11; Mich. Comp. Laws § 333.16174(1)(c) (requiring license seekers to “[h]ave a specific education

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or experience in the health profession . . . as prescribed by this article or rules of a board necessary to promote safe and competent practice and informed consumer choice”).

In short, Petitioner agreed Michigan’s Board of Nursing could accept as true the claim that she did not meet the educational requirement necessary to be licensed as an RN in that state.  IG Ex. 2 at 4.  Michigan imposed that requirement “to promote safe and competent practice.”  Mich. Comp. Laws § 333.16174(1)(c).  The Board suspended her license.  Given these facts, I must conclude Michigan’s licensing authority for nurses suspended Petitioner’s RN license for reasons bearing on her professional competence.

Petitioner now seeks to rebut the findings made by Michigan’s nursing board, explaining that she did not contest the allegations against her in the suspension proceeding because she lacked the financial means to do so after the loss of her nursing license.  P. Req. for Hearing at 2.  She otherwise asserts she in fact obtained the necessary education to be licensed as a nurse, citing her coursework at Fortis College, an accredited nursing school in Indiana, and her successful passage of the National Council Licensure Examination (NCLEX), the national competency exam to obtain licensure as a nurse.  P. Br. at 2.  Petitioner also cites evidence of her longstanding professional competence and performance, including a service award and a character reference letter from her former supervisor.  P. Ex. 5; P. Ex. 6 at 4; P. Ex. 7 at 4.

I am sympathetic to Petitioner’s claim that she was unable to adequately defend herself in the suspension proceedings because of lack of financial means.  I am also persuaded that whatever the defects in her underlying education, Petitioner appears to have performed her work as an RN professionally and competently.  Unfortunately, as I have explained, the Act does not require the IG to demonstrate Petitioner is professionally incompetent or incapable of performing professionally; it only requires the IG to show a state licensing authority took action against Petitioner’s license for reasons bearing on her professional competence or performance.  Act § 1128(b)(4).  The IG has met this burden.

Petitioner may reasonably believe her license should not have been suspended.  She may also reasonably assert there is no evidence she has not practiced competently and professionally.  But those positions, however reasonable, do not change the fact that Michigan’s Board of Nursing suspended her RN license because it believed she failed to meet the educational requirement necessary to obtain that license, a reason that plainly bears on Petitioner’s professional competence and performance.  The IG has met its burden under section 1128(b(4) of the Act to show a state licensing authority suspended Petitioner’s RN license for reasons bearing on her professional competence or professional performance.

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C. I do not have the authority to reinstate Petitioner.

Petitioner reiterates her disagreement with the basis for the suspension of her RN license in Michigan and contends she should be reinstated because she maintains an active nursing license in Indiana after that state’s nursing board held a hearing and reviewed her case.  P. Br. at 2-3.  The IG acknowledges early reinstatement is possible where a different licensing authority takes no adverse action against a license already held by an individual after the individual fully and accurately discloses the circumstances that formed the basis for exclusion.  IG Reply at 2 (citing 42 C.F.R. § 1001.501(c)(1)).  Nevertheless, the IG contends Petitioner’s submissions “fail to show that Petitioner ‘fully and accurately’ disclosed the circumstances of her Michigan suspension to the Indiana Board.”  Id. at 3.

Whatever the merits of these arguments, I have not considered them as I do not have the authority to reinstate Petitioner.  42 C.F.R. § 1001.3002(f).  Only the IG may do so.  Id. § 1001.3001(a).  Should Petitioner wish to request early reinstatement by the IG, she must follow the instructions set forth at https://oig.hhs.gov/exclusions/reinstatement.asp.

In the event she seeks reinstatement, Petitioner should submit evidence proving she shared the basis for her Michigan license suspension with Indiana’s Board of Nursing and that, based upon this “fully and accurately” disclosed information, the Indiana Board of Nursing took no adverse action against her Indiana RN license.  42 C.F.R. § 1001.501(c)(1).  If she participated in a formal evidentiary hearing upon which the Indiana board’s determination to take no action was based, as Petitioner’s Exhibit 3 suggests, Petitioner should submit documentation of findings made by that board as well.  Petitioner should also carefully review the factors the IG will consider in assessing her request for early reinstatement and address them to the best of her ability.  See 42 C.F.R. §§ 1001.501(c)(1)(i)-(ix), 1001.3002(b).

Petitioner may also wish to highlight to the IG factual discrepancies that undermine the Michigan nursing board’s conclusion that she fraudulently obtained her degree.7  For example, the Board of Nursing noted Palm Beach began selling fraudulent degrees in 2018 after it lost its educational license in 2017.  IG Ex. 2 at 9.  As part of its criminal scheme, the school allegedly back-dated application forms to make it appear individuals graduated while Palm Beach was still licensed and in operation.  Id. at 10.  Relying on the fact that Petitioner’s transcript from Palm Beach confirmed she did not start there until May 2, 2019, the Board of Nursing concluded that “[a] review of Palm Beach School’s

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records identifies [Petitioner] as one of the individuals who purchased fraudulent credentials.”  Id. at 10.

But while this evidence confirms Petitioner did not complete the coursework for her diploma because Palm Beach had lost its educational license by the time she matriculated there, it does not, as the Board of Nursing concluded, establish she “purchased fraudulent credentials.”  Id.  It in fact suggests the contrary, as Palm Beach’s fraudulent practice of forging and back-dating documents for its customers is not evident here.  If Petitioner intended to purchase false documentation of coursework, Palm Beach would have presumably applied its fraudulent business model and provided her a forged transcript showing completion of coursework before Palm Beach lost its educational license, not after.  But Petitioner’s Palm Beach transcript dates her coursework well after the school lost its educational license.  Id.  She in fact completed most of her coursework at an accredited school in Indiana and claims she only sought out Palm Beach to finish the classes necessary to obtain her degree.  P. Req. for Hearing at 2; P. Ex. 4.

It is therefore more logical to infer that Petitioner simply saw an opportunity to complete the courses necessary to obtain her diploma and did not realize Palm Beach was no longer authorized to administer courses or confer degrees in Florida.  The Board of Nursing does not seem to have considered this possibility when it imputed fraudulent intent to Petitioner after reviewing her Palm Beach educational records.

The evidence proffered by the IG to corroborate the Michigan Board of Nursing’s conclusion that Petitioner acted with fraudulent intent is at best equivocal.  See IG Ex. 5 (sworn affidavit of Johanna Napoleon, the operator and president of Palm Beach and three other nursing schools who was subsequently convicted for her central role in a scheme to provide fraudulent documents to individuals seeking a nursing degree).  The IG claims Napoleon “identified Petitioner as a purchaser of fraudulent credentials. . . .”  IG Br. at 3 (citing IG Ex. 5).  This is a mischaracterization.  In an attachment to her affidavit, Napoleon identified 4,989 individuals, among them Petitioner, that she claimed “did not complete the required program hours and clinical training necessary to obtain either a practical nursing diploma and transcript or a nursing associate in science degree and transcript.”  IG Ex. 5 at 2.

Putting aside the fact that she is a convicted felon whose credibility and integrity cannot be underestimated, Napoleon does not explain how she determined which Palm Beach attendees validly obtained their degrees and which did not.  It is unlikely she reviewed the records of nearly 5,000 individuals with any level of detail.  In any case, Napoleon’s description of Petitioner as someone who “did not complete the required program hours and clinical training” at Palm Beach necessary to achieve a nursing degree is consistent with the fact that Petitioner completed most of her coursework at another nursing school.  Id.  Napoleon’s statement does not establish Petitioner acted with fraudulent intent.

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In sum, the evidence of record confirms the IG has demonstrated the elements necessary under the Act to permissively exclude Petitioner.  But it is also reasonable to conclude, on the same evidence, that Petitioner is a victim of circumstance and deserves consideration for reinstatement, assuming she can demonstrate the state of Indiana is aware of the reasons for the suspension of her Michigan nursing license and has taken no action against her license there.

VI. Conclusion

I affirm the IG’s determination to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(b)(4) of the Act (42 U.S.C. § 1320a-7(b)(4)).