Desiree Natalia Payne, DAB CR6789 (2025)

DECISION

Respondent, the Acting Inspector General for the United States Department of Health and Human Services (the IG), excluded Petitioner, Desiree Natalia Payne, from participation in Medicare, Medicaid, and all other federal health care programs for five years based on her conviction for a criminal offense related to the delivery of an item or service under the Medicare or a state health care program.  Petitioner challenges her exclusion before me.  For the reasons stated below, I affirm the IG’s exclusion action. 

I. Procedural History

By letter dated April 30, 2025, the IG notified Petitioner of her exclusion for five years from participation in Medicare, Medicaid, and all federal health care programs under section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  IG Ex. 2.  The IG explained she took this action based on Petitioner’s conviction in Minnesota state court “of a criminal offense related to the delivery of an item or service under Medicare or a [s]tate health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program.”  Id. at 1.  

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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 June 11, 2025, the substance of which is set forth in my Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order) issued that same day.  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 at 4.  

The IG filed a brief (IG Br.) and six proposed exhibits (IG Exs. 1-6).  Petitioner filed a response brief (P. Br.) with no proposed exhibits.  The IG filed a reply (IG Reply). 

II. Admission of Exhibits and Decision on the Record

Petitioner did not object to the IG’s proposed exhibits.  I therefore enter IG Exhibits 1 through 6 into the record.  Neither party believed an in-person hearing to be necessary.  IG Br. at 4; P. Br. at 2.  Accordingly, I decide this case on the parties’ briefs and the exhibits of record.  Civ. Remedies Div. P. § 19(d). 

III.  Issue

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to 42 U.S.C. § 1320a-7(a)(1).  See 42 C.F.R. § 1001.2007(a)(1).  

If I affirm the basis for exclusion, I must affirm the five-year length of exclusion as that is the minimum exclusion period required by the Act for mandatory exclusions.  42 C.F.R. § 1001.102(a). 

IV. Applicable Law

Section 1128(f) of the Act provides Petitioner with the right to a hearing before an ALJ and judicial review of the final action of the Secretary of Health and Human Services (Secretary).  42 U.S.C. § 1320a-7(f); see also 42 C.F.R. §§ 1001.2007(a) and 1005.2.  The rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3. 

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The Act requires the Secretary to exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under title XVIII [of the Act] or under any State health care program.”  42 U.S.C. § 1320a-7(a)(1); see also 42 C.F.R. § 1001.101(a). 

The Act defines an individual to be 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 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 any arrangement or program where judgment of conviction is withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2.  Exclusion under this provision of the Act is mandatory and does not distinguish between misdemeanor and felony convictions.  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)).  Excluded parties seeking to challenge their exclusion may not collaterally attack the conviction upon which exclusion is based.  42 C.F.R. § 1001.2007(d). 

For exclusions imposed under section 1128(a) of the Act, section 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)) mandates a minimum five-year period of exclusion.  Exclusion is effective 20 days from the date the IG issues the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The IG may elect to extend the period of exclusion based on the presence of certain aggravating factors.  42 C.F.R. § 1001.102(b).  If the IG has applied aggravating factors to increase the exclusion period beyond five years, she must consider the mitigating factors identified by the regulations as a basis for reducing the period of exclusion.  42 C.F.R. § 1001.102(c).  The IG’s determination of the length of exclusion enjoys deference only if it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii). 

The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  42 C.F.R. §§ 1001.2007(e), 1005.15(b).  

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

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

1. A. Petitioner’s request for hearing was timely, and I have jurisdiction.

Petitioner timely requested a hearing.  I have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1). 

1. B. The IG has established a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act.

Section 1128(a)(1) of the Act mandates exclusion from participation in Medicare, Medicaid, and all federal health care programs where an individual has been convicted, under federal or state law, of a criminal offense related to the delivery of an item or 

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service under Medicare or any state health care program.  42 U.S.C. § 1320a-7(a)(1); 42 C.F.R. § 1001.101(a).  The IG has established these elements by a preponderance of the evidence.  

1. 1. Relevant facts

On December 1, 2023, prosecutors filed a criminal complaint in Minnesota state court (state court) accusing Petitioner of committing five felony counts of Theft by False Representation of an amount over $5,000.  IG Ex. 3.  Petitioner worked as a Personal Care Assistant (PCA), employed by PCPO National Home HealthCare, Inc.  Id. at 4-5.  Citing five instances between December 2020 and January 2023, Investigative Auditor Diane Castro accused Petitioner of billing for the provision of personal care services to more than one patient at the same time, resulting in an overpayment to her of $33,239.74.  Id. at 4-7. 

On August 4, 2024, in exchange for a stayed sentence, full restitution, and a minimum fine, Petitioner entered into an agreement to plead guilty to the first two counts of theft against her.  IG Ex. 4.  The state court accepted Petitioner’s plea and entered judgment against her on two counts of Theft By False Representation on October 23, 2024.  IG Ex. 5 at 1, 3.  Consistent with the terms of the plea deal, the state court stayed imposition of judgment, noting Petitioner’s successful completion of probation would result in entry of a misdemeanor conviction against her.  Id.  On December 12, 2024, the state court entered an order of restitution against Petitioner to pay $12,219.92 to National Home HealthCare, Inc., and $35,460.95 to Minnesota’s Department of Human Services.  IG Ex. 6 at 1. 

2. 2. Petitioner was convicted of a criminal offense within the meaning of the Act.

The Act provides an individual or entity is considered “convicted” when a judgment of conviction has been entered by a federal, state, or local court, or, relevant here, if a plea of guilty has been accepted by such a court.  42 U.S.C. § 1320a-7(i)(1), (3).  Here, the state court accepted Petitioner’s guilty plea and deemed her “convicted” of two felony counts of Theft by False Representation.  IG Ex. 4; IG Ex. 5 at 1, 3.  This amounts to a conviction within the meaning of the Act, even if the state court stayed imposition and subsequently converted these offenses to misdemeanor convictions.  Indeed, Petitioner concedes she was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.  P. Br. at 1.  I conclude Petitioner was convicted of a criminal offense within the meaning of the Act.  

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3. 3. Petitioner’s criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act.

The Act requires an individual’s exclusion from participation in federal health care programs if convicted of an offense related to the delivery of an item or service under Medicare or a state health care program.  See 42 U.S.C. § 1320a-7(a)(1).  Petitioner asserts her conviction does not so relate but provides no specific argument to that effect.  P. Br. at 2.  

Petitioner’s offense of conviction need only be “related to” the delivery of an item or service under Medicare or a state health care program.  The term “related to” simply means that there must be a nexus or common-sense connection.  See 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); see also Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).  In determining the relatedness of an offense, I am not bound to the elements of the charged offense.  Berton Siegel, D.O., DAB No. 1467 at 4 (1994) (“[i]t is not the labeling of the offense under the state statute which determines whether the offense is program-related”).  Instead, I examine the nature of the offense, which properly includes the “facts upon which [the] conviction was predicated.”  Id.  

Here, Petitioner pleaded guilty to two counts of “Theft by False Representation.”  IG Ex. 3 at 1-2; IG Ex. 4 at 3.  The criminal offense conduct described in these counts – billing Minnesota’s Medicaid program for the provision of personal care services to more than one patient at the same time – plainly relates to the delivery of an item or service under a state health care program.  Moreover, Petitioner’s criminal conduct resulted in loss to Minnesota’s Medicaid program, as evidenced by the order of restitution against her.  IG Ex. 6 at 1.  Such loss is axiomatically related to the delivery of an item or service under that program.  Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994) (filing improper claims with the Medicaid program is “a program‑related offense” and “such financial misconduct is exactly what Congress sought to discourage” through imposing exclusions.); see also Siegel, DAB No. 1467 at 6-7 (a criminal offense resulting in financial loss to a State Medicaid program was “related to” the delivery of items or services under that program because it resulted “in less funds being available to pay for covered services” delivered to Medicaid patients).  I therefore must conclude Petitioner’s offense of conviction related to the delivery of an item or service under Medicare or a state health care program.  

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1. C. Petitioner must be excluded for a minimum of five years; the period of exclusion is therefore reasonable as a matter of law.

Because I have concluded a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(1), she must be excluded for a minimum period of five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).  Petitioner points out she enjoyed her work in personal care and hopes to return to work she found meaningful.  P. Br. at 3.  I am sympathetic to her claims and acknowledge her passion for helping others.  However, I do not have the authority to impose a lesser period of exclusion than that required by the Act. 

VI. Conclusion

For the foregoing reasons, I affirm the IG’s exclusion action.  Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for five years pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)).  Her exclusion is effective 20 days from the date of the notice of exclusion issued to her by the IG.