Kami L. Purvis, DAB CR5418 (2019)

DECISION

The Inspector General of the United States Department of Health and Human Services (the IG) excluded Petitioner Kami L. Purvis from participation in Medicare, Medicaid, and all other federal health care programs for five years, based on her criminal conviction for an offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. Petitioner sought review of the exclusion. As explained below, I affirm the IG’s exclusion determination.

I. Procedural History

By letter dated July 31, 2015, the IG notified Petitioner she would be excluded from participating in Medicare, Medicaid, and all federal health care programs under section 1128(a)(4) of the Social Security Act (Act) for a period of five years due to her felony conviction for a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. IG Ex. 1.Document No. 10b in the official case file maintained in the Departmental Appeals Board (DAB) E-File system; for clarity and simplicity, I will cite to the exhibits attached to the parties’ respective briefs by the exhibit numbers or letters therein, not the document numbers assigned by the E-file system.

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Petitioner sought a hearing before an administrative law judge (ALJ) and I was designated to hear and decide this case. On April 17, 2019, I held a pre-hearing telephone conference, the substance of which is summarized in my April 18, 2019 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).

At that conference, IG counsel indicated her intent to seek dismissal of Petitioner’s hearing request, for which I set a briefing schedule. Summary Order at 3. She subsequently indicated by email to my staff attorney that the IG no longer wished to pursue dismissal. DAB E-file Docket No. C-19-603 at Doc. No. 6. Accordingly, on April 26, 2019, I issued an order setting a briefing schedule that directed the parties to file pre-hearing briefs articulating their respective arguments on the merits as well as identifying witnesses and providing documentary evidence in support thereof. Order Setting Schedule for Filing Briefs and Documentary Evidence (Scheduling Order).

The IG filed a brief (IG Br.) and three proposed exhibits (IG Exs. 1-3), while Petitioner filed a brief (P. Br.) and four proposed exhibits (P. Exs. A-D). The IG then submitted a reply brief (IG Reply).

II. Admission of Exhibits and Decision on the Record

Petitioner offered no objections to the IG’s proposed exhibits. The IG similarly offered no objections to Petitioner’s proposed exhibits. I therefore admit IG Exs. 1 through 3 and P. Exs. A through D into the record.

Neither party requested an in-person hearing or identified any witnesses whose testimony it wished to offer. IG Br. at 5; P. Br. at 4. Accordingly, an in-person hearing would serve no purpose, and the matter may be decided on the written record. See Civ. Remedies Div. P. § 19(d).

III. Issues

Whether the IG has a basis to exclude Petitioner from participation in federal health care programs under section 1128(a)(4) of the Act. 42 C.F.R. § 1001.2007.

IV. Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) provides Petitioner with rights to a hearing before an ALJ 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 in 42 C.F.R. §§ 1001.2007(a) and 1005.2, while 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 Secretary must exclude from participation in federal health care programs any individual that has been convicted for a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance as defined under federal or state law. 42 U.S.C. § 1320a-7(a)(4).

Pursuant to section 1128(i) of the Act (42 U.S.C. § 1320a-7(i)), an individual is 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 regardless of 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 no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld. There may be no collateral attack of the conviction that provides the basis of the exclusion. 42 C.F.R. § 1001.2007(d).

Section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)) provides that an exclusion imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)) shall be for a minimum period of five years. The exclusion is effective twenty days from the date of the notice of exclusion. 42 C.F.R. § 1001.2002(b). The period of exclusion may be extended based on the presence of specified aggravating factors. 42 C.F.R. § 1001.102(b). Mitigating factors are considered as a basis for reducing the period of exclusion only if aggravating factors justify an exclusion of longer than five years. 42 C.F.R. § 1001.102(c).

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. § 1005.15(c).

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.

The IG did not contest the timeliness of Petitioner’s request for hearing. I therefore 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).

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1. B. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(4) of the Act.

Section 1128(a)(4) mandates that the Secretary exclude from program participation any individual or entity convicted of a felony criminal offense that occurred after August 21, 1996, “relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.” See 42 C.F.R. § 1001.101(d). As discussed below, the IG has established, by preponderance of the evidence, the elements necessary to exclude Petitioner.

1. 1. Petitioner was convicted under federal or state law of a felony criminal offense that occurred after August 21, 1996.

Petitioner concedes she was convicted of a felony occurring after August 21, 1996. P. Br. at 1; see also IG Ex. 2.

1. 2. Petitioner was convicted of an offense within the meaning of section 1128(a)(4). 

Petitioner denies she was convicted of an offense requiring exclusion under section 1128(a)(4) of the Act, arguing that her conviction for possession of a controlled substance was not a felony related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. P. Br. at 2-3. Petitioner claims the IG improperly relies on allegations found in the criminal complaint against her, which contain only the allegations of a law enforcement official and no admissions by Petitioner, and that the actual offense of conviction to which she pleaded guilty – possession of a controlled substance – does not fall within the meaning of section 1128(a)(4) of the Act. Id. at 3-4.

The IG contends Petitioner’s conviction for criminal possession of a controlled substance indeed relates to such an offense, because Petitioner obtained and used a prescription pad taken from her employer to procure the controlled substances she was convicted of possessing. IG Br. at 4. The IG argues that for purposes of exclusion, she is entitled to rely on the allegations found in the charging instrument by which Petitioner was ultimately convicted and that Petitioner’s arguments amount to a collateral attack on her conviction, which is impermissible in these proceedings. IG Reply at 4-6. 

To trigger mandatory exclusion under section 1128(a)(4) of the Act, Petitioner’s conviction need only be related to the manufacture, distribution, prescription, or dispensing of a controlled substance. 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

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marks omitted); see also Quayum v. U.S. Dep’t of Health and Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).

Here, it is evident that Petitioner’s offense of conviction meets that broad, common sense standard. Contrary to Petitioner’s assertions, in making this assessment I am not bound by the elements of her offense of conviction. See Narendra M. Patel, M.D., DAB No 1736 at 7 (2000), aff’d, Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003) (providing in an analogous exclusion action under section 1128(a)(2) of the Act that “nothing . . . requires that the necessary elements of the criminal offense must mirror the elements of the exclusion authority, nor that all statutory elements required for an exclusion must be contained in the findings or record of the state criminal court.”). The mere fact that Petitioner only pleaded to and was found guilty of a possession offense does not end my analysis. Instead, I look to the particular facts and circumstances of her offense of conviction. 

The only extrinsic facts related to Petitioner’s conviction in the record before me are found in the criminal complaint filed against her that initiated the criminal proceedings resulting in her conviction. IG Ex. 3. In that sworn statement made under penalty of perjury, Investigator Brendan Vallely of the New York State Bureau of Narcotic Enforcement relates that Petitioner obtained the prescription pad belonging to her employer, Dr. Pompa, and on 35 occasions completed prescription sheets and caused them to be filled and paid for under her own Medicaid benefits card. Id. at 2. Investigator Vallely goes on to describe one specific instance where Petitioner completed a prescription sheet and caused it to be filled on July 9, 2009, presumably relying on his own observations. Id. The investigator also indicated that he relied on statements by both Petitioner and Dr. Pompa. Id. 

Petitioner asserts I should not give this criminal complaint any weight because it does not contain her own sworn statements or even describe with any particularity what if any admissions she made; as such she argues the complaint is “proof of nothing.” P. Br. at 4. This argument is without merit. As I have explained, I am not bound by the elements of the offense of conviction, but must look beyond the elements of that offense to determine whether Petitioner’s conviction is related to the manufacture, distribution, prescription, or dispensing of a controlled substance.

The allegations made by Investigator Vallely have probative value in that context, even if they cannot properly be used to demonstrate what admissions Petitioner may have made during her plea negotiations with the state. Certainly, such allegations do not have the same probative value as admissions made in a plea agreement. However, it is incorrect to say they have no value. Short of collaterally attacking her conviction, Petitioner was free to contest the characterization of the facts presented by Investigator Vallely to convince me her offense of conviction did not properly fall under section 1128(a)(4) of the Act. However, she has failed to contest any aspect of the investigator’s sworn statement, or

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otherwise present contradictory evidence to me. As such, these allegations are the only evidence before me of the facts underlying Petitioner’s offense of conviction. There is certainly no reason to find Investigator Vallely’s allegations untruthful or incredible. His statement was made under penalty of perjury and submitted to a court of law. Accordingly, I find the allegations contained in the criminal complaint sworn out by Investigator Vallely to be credible and rely upon them herein.

Doing so, it is not difficult for me to conclude Petitioner’s offense of conviction falls within the meaning of section 1128(a)(4) of the Act. Petitioner stole a prescription pad from her employer, which she fraudulently filled out and took to pharmacies, causing controlled substances to be improperly dispensed to her on no fewer than 35 occasions. IG Ex. 3 at 2. Her criminal acts resulting in her conviction clearly related to both the prescription and dispensing of a controlled substance. As such, I conclude Petitioner’s conviction was related to the manufacture, distribution, prescription, or dispensing of a controlled substance, and that a basis exists to exclude Petitioner under section 1128(a)(4) of the Act.

1. 3. 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)(4), Petitioner 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). The IG has no discretion to impose a lesser period of exclusion, and I may not reduce the period of exclusion below five years.

1. 4. I cannot change the effective date of Petitioner’s exclusion.

Petitioner points out that while her conviction occurred in May 2011, the IG did not exclude her on the basis of that conviction until August 2015, over four years later. P. Br. at 4. As such, she asks that I “credit” the four-year delay to her exclusionary period. Id. at 5. In essence, she requests that the effective date of her exclusion be moved to an earlier date than that selected by the IG. The IG responds that there is no statutory or regulatory requirement to impose exclusion within a specific timeframe following conviction, and that in any case, I have no authority to adjust the effective date of Petitioner’s exclusion. IG Reply at 6-7.

The IG does not attempt to explain the four-year delay in excluding Petitioner. While I am sympathetic to Petitioner’s claim that she has sought treatment for her drug addiction in the intervening period and should not be excluded for what is effectively a nine-year period, the reason for the IG’s delay is irrelevant. The Act and its effectuating regulations do not permit me to modify the effective date of exclusion for any reason. See Thomas Edward Musial, DAB No. 1991 (2005), citing Douglas Schram, R.PH., DAB No. 1372 at 11 (1992) (“[n]either the ALJ nor this Board may change the beginning

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date of Petitioner’s Exclusion.”); David D. DeFries, D.C., DAB No. 1317 at 6 (1992) (“The ALJ can not . . . decide when [the exclusion] is to begin.”); Richard D. Phillips, DAB No. 1279 (1991) (“An ALJ does not have ‘discretion . . . to adjust the effective date of an exclusion, which is set by regulation.’”); Samuel W. Chang, M.D., DAB No. 1198 at 10 (1990) (“The ALJ has no power to change . . . [an exclusion’s] beginning date.”); see also 42 C.F.R. § 1001.2002(b) (“The exclusion will be effective 20 days from the date of the notice.”).

In sum, I am not empowered to provide Petitioner the relief she seeks.

VI. Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for five years pursuant to section 1128(a)(4) of the Act (42 U.S.C. § 1320a-7(a)(4)), effective August 20, 2015.