Stephanie Dawn Beveridge, DAB CR6791 (2025)

DECISION

Petitioner, Stephanie Dawn Beveridge, was a nurse, licensed to practice in Iowa, who worked in a long-term-care facility.  She pilfered hydrocodone tablets, which had been prescribed for facility residents, ingested the drug, and then attempted to work (unsuccessfully) under its influence.  She was caught and charged with two drug-related felonies and two misdemeanors.  She subsequently pleaded guilty in an Iowa State District Court to one misdemeanor count of possession of a controlled substance and one misdemeanor count of unlawful possession of a prescription drug. 

Based on these convictions, the Inspector General (IG) has excluded her for three years from participating in Medicare, Medicaid, and all federal health care programs, as authorized by section 1128(b)(3) of the Social Security Act (Act). 

Petitioner has appealed. 

For the reasons discussed below, I find that the IG is authorized to exclude Petitioner under section 1128(b)(3) and that no mitigating factor justifies lowering the length of the exclusion. 

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Background

In a letter dated May 30, 2025, the IG advised Petitioner Beveridge that, because she had been convicted of a criminal offense relating to the unlawful manufacture, distribution, prescription or dispensing of a controlled substance, the IG was excluding her from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of three years. 

Petitioner appealed. 

Following a prehearing conference, I issued an order, dated August 28, 2025, directing the parties to submit briefs and documentary evidence.  Order Following Prehearing Conference (e-file # 4).  Pursuant to my order, on September 19, 2025, the IG submitted her prehearing exchange – a written brief (IG Br.) and 11 exhibits (IG Exs. 1-11). 

Petitioner did not submit a prehearing exchange, as ordered.  However, her hearing request included her written argument and three supporting documents:  the Iowa court’s sentencing order, dated March 13, 2025 (in the record as IG Ex. 11); the Iowa State Nursing Board’s Settlement Agreement and Final Order, dated October 10, 2024 (in the record as IG Ex. 2); and pages from a state court brief, which, she submits, is evidence that “I have appealed my [criminal] case.”  (e-file # 1b).  I do not question that she has appealed her convictions. 

Although Petitioner failed to submit her prehearing exchange, she has not indicated that she has abandoned her appeal.  I therefore decide this case based on the record before me.  Because neither party proposes any witnesses, an in-person hearing would serve no purpose.  I therefore close the record and issue this decision based on the parties’ written submissions.  Order Following Prehearing Conference at 3-4 (¶ 7).  See Anil Hanuman, D.O., DAB No. 3080 at 11-12 (2022); Emery County Care and Rehab. Ctr., DAB No. 3006 at 5-8 (2020); James Brian Joyner, M.D., DAB No. 2902 at 12 (2018); see CRD Procedures ¶ 16(b). 

In the absence of any objections, I admit into evidence IG Exs. 1-11. 

Issues

The issues before me are: 

• Did the IG have a basis for excluding Petitioner from program participation; and
• if so, is the length of the exclusion (three years) reasonable? 

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Discussion

1. Because Petitioner was convicted of misdemeanor criminal offenses relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, the IG may exclude her from participating in all federal health care programs.1 

Section 1128(b)(3) of the Act allows the Secretary of Health and Human Services to exclude from participating in all federal health care programs an individual who has been convicted, under federal or state law, of a misdemeanor criminal offense relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  42 C.F.R. § 1001.401.  Among others who are subject to exclusion under section 1128(b)(3) is any individual who is, or has ever been, a health care practitioner or has ever been employed in any capacity in the health care industry.  42 C.F.R. § 1001.401(a). 

Petitioner was a nurse, licensed in the State of Iowa, who, from December 5, 2018 through December 11, 2023, was working in a long-term-care facility.  During the night of December 7, 2023, she exhibited signs of being under the influence of drugs.  Her speech was slurred; unable to maintain her balance, she was falling to the floor; she was falling asleep; and she was twitching.  IG Ex. 2 at 1-2, 12-13.  Law enforcement found a narcotic tablet inside her pocket and another one on the floor by the medication cart.  She could not account for four additional pills that she’d had control over.  IG Ex. 2 at 2. 

Instead of dispensing the drugs to the facility residents for whom they were prescribed, Petitioner kept them for herself, attempting to work while under their influence.  She subsequently tested positive for opiates, which was consistent with one of the missing pills.  She also tested positive for cannabinoids.  She did not a have a prescription for any of these drugs.  IG Ex. 2 at 2; IG Ex. 9. 

On January 22, 2024, Petitioner was charged with:  two felony counts of obtaining or attempting to obtain a drug by fraud, deceit, misrepresentation, or subterfuge; one misdemeanor count of obtaining or attempting to obtain a drug by fraud, deceit, misrepresentation, or subterfuge; and one misdemeanor count of dependent adult abuse.  IG Exs. 3-7. 

Petitioner ultimately pleaded guilty to one misdemeanor count of possession of a controlled substance (hydrocodone) and one misdemeanor count of unlawful possession of a prescription drug (hydrocodone).  IG Ex. 10; see IG Ex. 9.  In entering her plea, she

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admitted that on December 7, 2023, she knowingly possessed a controlled substance (hydrocodone) and knowingly possessed hydrocodone without a valid prescription.  IG Ex. 10 at 5. 

On March 13, 2025, the court entered judgment against her and ordered her to pay a fine of $430 per count.  She was also sentenced to 365 days in jail, which was suspended, and was placed on probation for one year.  She was ordered to complete a substance abuse evaluation.  IG Ex. 11 at 1-2.  

Petitioner admits that she was convicted of the misdemeanor criminal offenses.  She does not deny that her offenses were related to the unlawful prescription or dispensing of a controlled substance – which they plainly were.  She complains, however, about the quality of her legal representation in that her attorneys did not inform her about the possibility of an exclusion and its repercussions.  Had she known, she maintains, she would not have pleaded guilty.  She has appealed the conviction. 

Petitioner may not use this forum to challenge the validity of her conviction.  The regulations preclude such a collateral attack: 

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 . . . determination . . . is not reviewable and the individual or entity may not collaterally attack it[,] either on substantive or procedural grounds[,] in this appeal. 

42 C.F.R. § 1001.2007(d); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000). 

Further, that Petitioner has an appeal pending has no bearing on whether Petitioner’s exclusion was legally permissible.  The Act authorizes an exclusion when a conviction has been entered “regardless of whether there is an appeal pending. . . .”  Act § 1128(i)(1); 42 C.F.R. § 1001.2 (defining “convicted”).  I have no authority to determine whether the IG should have exercised her authority to exclude.  Igor Mitreski, M.D., DAB No. 2665 at 4 (2015).  If her appeal is successful, the IG will either withdraw the exclusion or reinstate her program participation, retroactive to the effective date of the exclusion.  42 C.F.R. § 1001.3005(a)(1).  

The criteria for imposing an exclusion under section 1128(b)(3) have been met in this case.  Petitioner was a health care practitioner, employed in the health care industry, who was convicted of misdemeanors related to the unlawful distribution, prescription or

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dispensing of a controlled substance.  The IG was therefore authorized to exclude her from program participation.  

2. No mitigating circumstance justifies shortening the length of Petitioner’s three-year exclusion. 

A permissive exclusion based on section 1128(b)(3) is for three years unless the Secretary determines, in accordance with published regulations, that a shorter period is appropriate because of mitigating circumstances or that a longer period is appropriate because of aggravating circumstances.  Act § 1128(c)(3)(D); 42 C.F.R. § 1001.401(c)(1).  One of the factors that may serve as a basis for lengthening the period of exclusion is that the convicted individual has been the subject of any other adverse action by any federal, state, or local government or board, if the adverse action is based on the same set of circumstances that serves as the basis for the exclusion.  42 C.F.R. § 1001.401(c)(2)(vi). 

Here, the Iowa Nursing Board suspended Petitioner’s nursing license for 90 days, and imposed 24 months of probation based on the same set of circumstances that serves as a basis for the exclusion.  IG Ex. 2.  Based on this aggravating factor, the IG might have increased the period of exclusion; however, the IG has not done so.  Act § 1128(c)(3)(D); 42 C.F.R. § 1001.401(c)(2)(vi). 

The regulations list as mitigating just one circumstance:  that the individual’s cooperation with federal or state officials resulted in others being convicted or excluded; other cases being investigated; reports being issued by the appropriate law enforcement agency identifying program vulnerabilities or weaknesses; or civil money penalties being imposed against others.  42 C.F.R. § 1001.401(c)(3).  Petitioner does not claim to have cooperated with law enforcement.  Thus, no mitigating factor justifies decreasing the length of the exclusion. 

Conclusion

The IG was authorized to exclude Petitioner from participating in Medicare, Medicaid, and other federal health care programs, and no mitigating circumstance justifies shortening the length of the three-year exclusion.