Michaela L. Hines, DAB CR6550 (2024)

DECISION

I uphold the determination of the Inspector General (IG) of the United States Department of Health and Human Services to exclude Michaela L. Hines (Petitioner) from participation in all federal health care programs for five years.

I. Case Background and Procedural History

In an April 30, 2024 notice, the IG excluded Petitioner from participation in all federal health care programs under section 1128(a)(1) of the Social Security Act (42 U.S.C. § 1320a-7(a)(1)) for a period of five years due to Petitioner’s conviction, in the Circuit Court for Clark County, Indiana (Circuit Court), of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  The notice stated that the exclusion was effective 20 days from the date on the notice.  IG Ex. 1 at 1.

Petitioner timely requested a hearing to dispute the exclusion.1  The hearing request indicated that Petitioner pleaded guilty to the misdemeanor offense for aiding and abetting money laundering.  However, Petitioner argued that this conviction was not a

Page 2

sufficient basis for imposing a mandatory exclusion.  Petitioner also submitted a copy of a motion that Petitioner filed with the Circuit Court seeking to withdraw Petitioner’s guilty plea.  Finally, Petitioner asserted that a five-year length of exclusion was unreasonable.

On May 22, 2024, the Civil Remedies Division (CRD) acknowledged receipt of the hearing request, informed the parties of a prehearing conference on June 11, 2024, and issued my Standing Order.

On June 11, 2024, I held a prehearing conference by telephone, the substance of which is summarized in my June 13, 2024 Order Following Prehearing Conference and Setting Schedule for Prehearing Submissions.  At the conference, I stated that the only issue I could decide in this case is whether the IG had a legitimate basis to impose an exclusion on Petitioner.  I noted that, should I uphold the exclusion, I could not reduce the length of exclusion below five years because that is the minimum permissible length of exclusion under the statute.  42 U.S.C. § 1320a-7(c)(3)(B).  Finally, at the conference, the parties agreed to a prehearing submission schedule.

On June 26, 2024, the IG timely filed a brief (IG Br.) and five proposed exhibits.  On September 3, 2024, Petitioner timely filed a brief (P. Br.) and three exhibits.  One of Petitioner’s exhibits (P. Ex. 1) is Petitioner’s written direct testimony.  The IG filed a reply brief (IG Reply).

II. Issue

Whether the IG had a basis for excluding Petitioner from participating in all federal health care programs for five years under 42 U.S.C. § 1320a-7(a)(1).

III. Admission of Evidence and Decision on the Written Record

I admit all of the proposed exhibits, without objection.  See Standing Order ¶ 13; 42 C.F.R. § 1005.8(c).

Both the IG and Petitioner indicated that an in-person hearing was unnecessary and that neither had any witness testimony to offer.  IG Br. at 10; P. Br. at 1.  Despite this, Petitioner submitted written direct testimony for herself. 2  P. Ex. 1.

Page 3

I issue this decision based on the written record.  I directed the parties to submit the testimony for witnesses in writing and advised the parties that I would only hold an in-person hearing if the opposing party requested to cross-examine a witness from whom written testimony had been submitted.  Standing Order ¶¶ 11-12, 16; June 13, 2024 Order Following Prehearing Conference and Setting Schedule for Prehearing Submissions at 3; Civil Remedies Division Procedures §§ 16(b), 19(b), (d); see also 42 C.F.R. § 1005.16(b) (authorizing written direct testimony so long as the opposing party may request to cross-examine witnesses).  In this case, the IG did not request to cross-examine Petitioner; therefore, no in-person hearing is necessary.

IV. Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007, 1005.2.

V. Findings of Fact

1. Petitioner’s son, E.H., is a quadriplegic who requires constant care.  P. Ex. 1 at 1.  His physical inabilities stem from cerebral palsy and other health issues, and E.H. requires constant supervision.  IG Ex. 3 ¶ 9.
2. Adaptive Nursing and Healthcare Services (Adaptive) is a provider of home health services.  IG Ex. 3 ¶ 3.
3. Adaptive submits claims for reimbursement of home health aide services to the Medicaid program based on employee generated records/timesheets.  IG Ex. 3 ¶ 6.
4. C.K., who is E.H.’s uncle, wanted to be employed by Adaptive to provide care for E.H.  However, C.K. could not meet Medicaid rules to be reimbursed for services he would provide to E.H. due to C.K.’s criminal history.  IG Ex. 3 ¶¶ 11-12, 28.
5. After Adaptive turned down C.K.’s employment, E.H.’s grandmother, M.D., applied for and was hired by Adaptive as a caregiver/health aide to E.H.  Adaptive hired M.D. in November 2012, and M.D. started to provide care to E.H. in December 2012.  M.D. provided care from either 7:00 a.m. to 4:00 p.m. or 2:00 p.m. to 10:00 p.m. during the work week.  P. Ex. 1 at 1; IG Ex. 3 ¶¶ 9-10, 13, 28.
6. In addition to providing care to E.H., M.D. also worked as a school bus monitor, and M.D.’s bus monitoring duties conflicted with her caregiving duties for E.H.  M.D. worked on the school bus from 6:45 a.m. to 9:00 a.m. and 1:45 p.m. to 4:30 p.m. each day during the work week.  When there was a conflict, C.K. would watch E.H. in M.D.’s absence.  P. Ex. 1 at 1; IG Ex. 3 ¶¶ 13-15, 19, 22, 24, 26.

Page 4

7. Petitioner signed M.D.’s timecards on behalf of E.H. so that M.D. would be paid in full even though M.D. would not provide care for the entire time showing on the timecards.  C.K. or others would care for E.H. during the hours M.D. missed.  P. Ex. 1 at 1; IG Ex. 3 ¶¶ 4, 16, 21.
8. On August 29, 2016, Adaptive informed the Indiana Attorney General (IAG) that it terminated M.D. from her employment with Adaptive after investigating M.D.’s timecards and becoming concerned that fraud had taken place.  The IAG investigated the matter.  IG Ex. 3 ¶¶ 4, 8, 15-29
9. On July 21, 2021, the IAG filed an eight-count Information in the Circuit Court charging Petitioner with the following felonious conduct:  Corrupt Business Influence; Conspiracy to Commit Medicaid Fraud; Medicaid Fraud (Aiding and Abetting); Money Laundering (Aiding and Abetting); and Forgery.  IG Ex. 2.
10. The Information alleged that, on or between July 1, 2014 and August 22, 2016, Petitioner, M.D., and C.K. engaged in a “common scheme to deceive Adaptive and/or defraud the Indiana Medicaid Program.”  IG Ex. 2 at 1.  More specifically, the Information charged Petitioner with forging or submitting documents to Adaptive indicating that M.D. provided home health services to E.H. (a Medicaid recipient) in order to obtain payment from Adaptive when M.D. had not provided those services.  IG Ex. 2.
11. Count V of the Information alleged that Petitioner aided and abetted in money laundering by helping M.D. to perpetrate a fraud on Adaptive, which resulted in M.D. receiving compensation from Adaptive for services M.D. did not render.  IG Ex. 2 at 4.
12. On February 9, 2023, Petitioner signed a Guilty Plea Agreement in which Petitioner agreed to plead guilty to Count V of the Information in exchange for the dismissal of the remaining charges in the Information.  IG Ex. 4 at 1, 3.
13. The February 9, 2023 Guilty Plea Agreement included “Special Agreed Terms” that Petitioner initialed.  The special terms included “pay[ing] restitution to the Indiana Medicaid Program of $6,500.00” and the “[b]alance of any additional amount owed to the Indiana Medicaid Program shall be reduced to a Civil Judgment in favor of the Indiana Medicaid Program in the amount to be determined by the Court at a subsequent hearing, when evidence and arguments will be presented.”  IG Ex. 4 at 2.
14. In the February 9, 2023 Guilty Plea Agreement, Petitioner “acknowledges that this criminal conviction could affect the [Petitioner’s] ability to work for an employer

Page 5

that accepts payment from Federal Healthcare Programs, such as Medicaid, as defined in 42 C.F.R. § 1001.2. . . . ”  IG Ex. 4 at 2.

15. On February 9, 2023, the Circuit Court issued a Judgment of Conviction and Sentencing Order (Judgment of Conviction).  IG Ex. 5.
16. The February 9, 2023 Judgement of Conviction indicates that the Circuit Court accepted Petitioner’s plea agreement, sentenced Petitioner to one year in jail (suspended), ordered Petitioner to pay $6,500 in restitution, and set a “further restitution hearing” for April 4, 2023.  IG Ex. 5.
17. On May 30, 2023, the IAG filed in the Circuit Court a document entitled:  State’s Recalculation of Restitution Pursuant to Court’s Order of 5.22.23.  P. Ex. 2.  The document stated that the amount paid by Medicaid related to the criminal cases of Petitioner, M.D., and C.K was $24,028.30.  P. Ex. 2 at 1.  Because those three defendants had already paid a total of $15,000 in restitution, the document indicated that the Circuit Court should enter judgment against the three defendants in favor of the Indiana Medicaid program in the amount of $9,048.30.  P. Ex. 2 at 2.
18. On June 21, 2023, the Circuit Court issued an Order re-calculating the restitution owed by Petitioner, M.D., and C.K.  The Circuit Court ordered restitution “in the sum of $9,048.30 (with joint and several liability) against each defendant in favor of the Indiana Medicaid Program. . . .”  P. Ex. 3.

VI. Conclusions of Law and Analysis

1. Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicaid program; therefore, exclusion is required under 42 U.S.C. § 1320a‑7(a)(1).

The IG must exclude an individual from participation in any federal health care program if that individual was convicted under federal or state law of a criminal offense related to the delivery of an item or service under title XVIII of the Social Security Act (i.e., Medicare) or a state health care program (i.e., Medicaid).3  42 U.S.C. § 1320a‑7(a)(1).  As explained below, the facts in this case show that Petitioner meets this standard for exclusion.

Page 6

Petitioner was convicted of a criminal offense.  For purposes of exclusion, individuals are deemed “convicted” of an offense if any of the following are met:

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity 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)(1)-(4).

Petitioner does not dispute that she was convicted of a criminal offense.  P. Br. at 1.  The record supports this conclusion because:  Petitioner pleaded guilty to Aiding and Abetting Money Laundering under Ind. Code § 35-45-15-5(a)(1) (Count V of the Information); the Circuit Court accepted the guilty plea; and the Circuit Court entered a Judgment of Conviction.  IG Ex. 4 at 1; IG Ex. 5 at 1; see also IG Ex. 2 at 4.  Therefore, Petitioner was convicted of a criminal offense.  42 U.S.C. § 1320a‑7(i)(1), (3).

Although Petitioner admits to a criminal conviction, Petitioner argues that Petitioner was only convicted of a misdemeanor and that such an offense is an insufficient basis for an exclusion.  P. Br. at 1, 3-4.  However, Petitioner’s argument is incorrect because a misdemeanor conviction may result in an exclusion under 42 U.S.C. § 1320a-7(a)(1).  A review of 42 U.S.C. § 1320a-7(a)-(b) shows that Congress used the phrase “criminal offense consisting of a felony” when it required a felony conviction for exclusion (42 U.S.C. § 1320a-7(a)(3), (4)), the phrase “criminal offense consisting of a misdemeanor” when it required a misdemeanor for exclusion (42 U.S.C. § 1320a-7(b)(1), (3)), and simply “criminal offense” or “convicted” (with no qualifier) when it requires either a felony or misdemeanor.  42 U.S.C. § 1320a-7(a)(1), (2), (b)(2); Craig Richard Wilder, DAB No. 2416 at 6-7 (2011).

Page 7

An exclusion under 42 U.S.C. § 1320a-7(a)(1) also requires that the criminal offense be related to the delivery of a health care item or service under the Medicare or Medicaid programs.  As explained below, I conclude that this element for exclusion is met.

Petitioner denies that her conviction was sufficiently related to the delivery of a healthcare item or service under the Medicare or Medicaid programs.4  Petitioner asserts:

[Petitioner’s] misdemeanor offense was not directly related to the delivery of an item or services within the healthcare services.  [Petitioner] managed her mother’s checking account.  She did help her mother manage money received by her mother and paid to her by Adaptive Home Health Care.  [Petitioner], herself, did not receive any proceeds or interfere with an item or a service within the healthcare program.  Her activity at best would signing off as the patient’s parent/guardian on [M.D.’s] time cards.

P. Br. at 4.

I conclude that Petitioner’s criminal offense for aiding and abetting M.D. in money laundering is “related to” the delivery of a health care item or service under the Medicaid  program.  For purposes of exclusion, the term “related to” simply means that there must be a nexus or common-sense connection.  See Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); see also Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating 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).

The Information alleged the following facts for the charge to which Petitioner pleaded guilty:

On or between September 8, 2015 and August 12, 2016, . . . [Petitioner] knowingly and intentionally aided [M.D.] to receive or possess the proceeds of criminal activity, to wit:

Page 8

[Petitioner] helped [M.D.] perpetuate a fraud on Adaptive Nursing and Healthcare and, as a result, [M.D.] received compensation from Adaptive Nursing and Healthcare for services she did not render.

IG Ex. 2 at 4.  As stated above, Petitioner believes her role in the improperly filed Medicaid claims involving E.H. was limited to falsely signing off on timesheets that M.D. (an individual who was eligible to provide Medicaid reimbursable services) had provided services to E.H. when C.K. (an individual ineligible to provide Medicaid reimbursable services) had in fact done so.  P. Br. at 2, 4; P. Ex. 1 at 1.  However, Petitioner’s guilty plea means that Petitioner knowingly and intentionally signed documents so that Medicaid would pay Adaptive and, in turn, Adaptive would pay M.D., for services that M.D. did not provide.

This provides a sufficient nexus between Petitioner’s criminal offense and the delivery of healthcare services (home health aide services) under the Medicaid program.  Petitioner’s signatures assisted in the submission of improper claims to the Medicaid program.  There is no doubt that a conviction for a crime involving filing false claims with the Medicaid programs is “related” to the delivery of an item or service under Medicare or a state health care program.  See Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994) (conviction for filing false claims with the Medicaid program is “a program‑related offense” and “such financial misconduct is exactly what Congress sought to discourage” through imposing exclusions); Kahn v. Inspector Gen. of the U.S. Dep’t of Health & Human Servs., 848 F. Supp. 432, 434, 436 (S.D.N.Y. 1994) (concluding that a podiatrist’s conviction for attempted grand larceny was program‑related for purposes of an exclusion because it was related to the filing of false Medicaid claims); Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990) (“There is no question that Mr. Greene’s crime [of filing false claims] resulted in a Medicaid overpayment and was a program-related crime triggering the mandatory exclusion under Section 1320a‑7(a).”).

In addition, Petitioner’s agreement to pay restitution to the Indiana Medicaid program (IG Ex. 4 at 2), which was approved and ordered by the Circuit Court (IG Ex. 5 at 2; P. Exs. 2, 3), shows that Petitioner’s criminal offense was related to the delivery of a healthcare item or service under the Medicaid program.  Summit S. Shah, M.D., DAB No. 2836 at 8-10 (2017).

Finally, Petitioner argues that, under Indiana law, the offense of money laundering is not a crime that would result in an inability to be a “provider” in the Indiana Medicaid

Page 9

program.  P. Br. at 3-4.  However, the IG imposed the exclusion in this case under federal law, and federal law supersedes state law.5  U.S. Const. art. VI, cl. 2.

Therefore, I conclude that the IG had a legitimate basis to exclude Petitioner from all federal healthcare programs under 42 U.S.C. § 1320a-7(a)(1).

2. Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a‑7(a)(1), Petitioner must be excluded for a minimum of five years.  42 U.S.C. § 1320a‑7(c)(3)(B).

Petitioner asserts that the equities in this case provide a basis to reverse the exclusion.  P. Br. at 2-3.  However, I am without authority to consider such arguments because an exclusion for five years under 42 U.S.C. § 1320a‑7(a)(1) is mandatory.  As stated by a court of appeals:

Once [the IG] found that the Utah state court’s disposition of the charge amounted to a conviction of a program-related offense, the Inspector General had no choice but to impose the mandatory 5-year exclusion under § 1320a-7(a)(1).

Travers, 20 F.3d at 998.  Equally, the mandatory nature of the exclusion binds me as much as it does the IG.  Therefore, I cannot reverse the exclusion on equitable grounds.

VII. Conclusion

I affirm the IG’s determination to exclude Petitioner for five years from participating in all federal health care programs under 42 U.S.C. § 1320a‑7(a)(1).