Tammy Mae Bortz, DAB CR5933 (2021)

DECISION

Respondent, the Inspector General of the United States Department of Health and Human Services (the IG), excluded Petitioner, Tammy Mae Bortz, 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 Medicare or a state health care program.  Petitioner sought review of the exclusion.  For the reasons stated below, I affirm the IG’s exclusion determination.

I.  Procedural History 

By letter dated December 31, 2020, the IG notified Petitioner she intended to exclude Petitioner from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act) for a period of five years.  IG Ex. 1.  The IG advised Petitioner that the exclusion action resulted from her “felony conviction as defined in section 1128(i) (42 U.S.C. 1320a-7(i)), in the Magistrate Court of Ohio County, West Virginia, of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, including the performance of management or administrative services relating to the delivery of such items or services, or with respect to any act or omission in a health care program (other than

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Medicare and a State health care program) operated by, or financed in whole or in part, by any Federal, State or local Government agency.”  Id.

On February 16, 2021, Petitioner mailed a request for hearing received by the Civil Remedies Division on March 1, 2021.  I was designated to hear and decide this case.  On March 8, 2021, I issued an Acknowledgment Letter requiring the parties to appear by telephone at a pre-hearing conference.  See 42 C.F.R. § 1005.6(a).  At the pre-hearing conference held on April 8, 2021, IG counsel advised me that the IG now believed Petitioner’s exclusion to be appropriate under section 1128(a)(1) of the Act, not section 1128(a)(3), and had issued an amended notice of exclusion to Petitioner that same day. 

On April 12, 2021, I issued an Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order), which summarized the substance of the pre-hearing conference and memorialized the IG’s notice that she had amended the basis for Petitioner’s exclusion.  Summary Order at 2; see 42 C.F.R. § 1005.6(c).  I also directed the parties to file pre-hearing briefs articulating their respective arguments and identifying witnesses and exhibits in support thereof.  Summary Order at 3-5.

The IG filed a short-form brief (IG Br.) and six exhibits (IG Exs. 1-6).  The IG filed the original December 31, 2020 notice of exclusion under section 1128(a)(3) as IG Ex. 1 and the April 8, 2021 amended notice of exclusion under section 1128(a)(1) as IG Ex. 2.  The April 8, 2021 amended notice describes that the IG excluded Petitioner for five years based on the IG’s finding that Petitioner’s “conviction in the Magistrate Court of Ohio County, West Virginia is for a criminal offense related to the delivery of an item or service under the Medicare or a State health care program, including the performance of management or administrative services relating to the delivery of items or services, under any such program.”  IG Ex. 2.  The amended notice also specifies that “[e]xcept for this amendment to the basis for your exclusion, the December 31, 2020 notice of exclusion remains in effect.”  Id. at 1. 

Petitioner filed a short-form brief accompanied by a one-page narrative response (together, P. Br.) and six exhibits (P. Exs. 1-6).  The IG subsequently filed a reply brief (IG Reply).

II.  Admission of Exhibits and Decision on the Record

Petitioner requested that I exclude IG Exhibits 3, 5, and 6, stating that the documents “do not relate to this appeal and I have already been convicted of the crime through the West Virginia court system.”  P. Br. at 1.Petitioner’s narrative response and short-form brief were not individually paginated but instead filed as one Adobe Acrobat document, or PDF.  See DAB E-file Dkt. C-21-531, Doc. No. 13.  I therefore cite to the PDF pagination for the collectively filed document when referring to either Petitioner’s short-form brief or narrative response.  The IG made no effort to respond to Petitioner’s

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objections.  Nevertheless, I overrule Petitioner’s objections for the reasons outlined below.

Petitioner’s claim that IG Exhibit 3 is irrelevant to these proceedings is without merit.  IG Ex. 3 includes the criminal complaint filed against Petitioner in the West Virginia state court by the state’s Attorney General and the warrant subsequently issued for Petitioner’s arrest.  IG Ex. 3 at 1-4.  The criminal complaint and arrest warrant that resulted in the conviction which now forms the basis for the IG’s exclusion action are relevant to an issue I must decide in this appeal – whether 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. 

To do so, I must consider all relevant facts relating to the offense of conviction that resulted in Petitioner’s exclusion.  This includes extrinsic evidence beyond that contained in charging instruments or related court filings.   Narendra M. Patel, M.D., DAB No. 1736 at 11 (2000) (“[T]he Board has repeatedly held that the basis for the federal exclusion authority need not appear in the charges or associated court documents, but may be demonstrated by extrinsic evidence of the underlying facts and circumstances of the offense.”) (citations omitted), aff’d sub nom. Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003).  The documents contained in IG Exhibit 3 are highly relevant to determining the nature of Petitioner’s offense of conviction.  IG Exhibit 3 is therefore admitted into the record.  

I overrule Petitioner’s objection to the admission of IG Exhibit 5.  IG Exhibit 5 is a declaration made under oath by Michael Malone, Director of the West Virginia Medicaid Fraud Control Unit (MFCU).  In his declaration, Mr. Malone describes the course of the MFCU’s investigation of Petitioner, her subsequent arrest, and her guilty plea, and also authenticates a May 3, 2019 Report of Investigation, signed by Mr. Malone and authored by the same MFCU investigator who filed the criminal complaint against Petitioner.  IG Ex. 3 at 2; IG Ex. 5 at ¶¶ 1-6; IG Ex. 6.  Petitioner’s objection to IG Exhibit 5 as irrelevant is without merit and overruled.  As with IG Exhibit 3, Mr. Malone’s description of the criminal investigation which led to Petitioner’s conviction is plainly relevant to my consideration of the nature of Petitioner’s offense of conviction for purposes of determining whether exclusion under section 1128(a)(1) of the Act is appropriate. IG Exhibit 5 is therefore admitted into the record. 

However, because the IG improperly submitted IG Exhibit 5, I limit the purposes for which I will consider this exhibit in this case.  The IG included Mr. Malone’s written declaration in her pre-hearing exchange despite indicating in her short-form brief that she did not intend to offer witness testimony.  IG Br. at 7-8.  My Summary Order plainly set forth the requirements for either party to submit direct witness testimony, including the requirement that a party wishing to submit direct witness testimony had to identify that

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witness in a witness list.  Summary Order at 4, ¶ 7(a).  The IG failed to identify Mr. Malone as a witness.

Mr. Malone’s sworn statements amount to witness testimony but were not properly offered as such.  I therefore decline to ascribe evidentiary weight to those statements and have not considered them in rendering this decision.  I have instead considered IG Exhibit 5 only for the limited purpose of authenticating IG Exhibit 6, a report produced by Mr. Malone’s office and signed by him.  IG Ex. 5 at ¶ 6; IG Ex. 6 at 1. 

Petitioner’s objection to IG Exhibit 6 is overruled.  The MFCU’s investigative report that led to Petitioner’s conviction is clearly relevant here.  The report contains evidence of the nature of the charges against Petitioner that led to her conviction and is therefore relevant to whether her conviction is related to the delivery of an item or service under Medicare or a state health care program.  In assessing relatedness, I may consider evidence extrinsic to the charging instruments or other associated court documents.  Patel, DAB No. 1736 at 11.  I therefore enter IG Exhibit 6 into the record. 

The IG did not object to any of Petitioner’s exhibits.  Accordingly, I enter P. Exhibits 1 through 6 and IG Exhibits 1 through 6 into the record.  Neither party requested an in-person hearing or requested cross-examination of an opposing party’s witness.  IG Br. at 7-8; P. Br. at 3-4.  Accordingly, I decide this case on the briefs submitted and the exhibits of record.  Civ. Remedies Div. P. § 19(d); Summary Order at 5, ¶ 8.

III.  Issue

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for five years under 42 U.S.C. § 1320a-7(a)(1).  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 in 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 Secretary must 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 subchapter XVIII of this chapter or under any State health care program.”  42 U.S.C. § 1320a-7(a)(1); see also 42 C.F.R. § 1001.101(a).

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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 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.  42 U.S.C. § 1320a-7(i).  The statute does not distinguish between misdemeanor and felony convictions.  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 20 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, while the IG bears the burden on all other issues.  42 C.F.R. §§ 1001.2007(c); 1005.15(b), (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. 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).

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

Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(1) of the Act where an individual has been convicted, under Federal or State law, of a criminal offense related to the delivery of an item or 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.

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

Petitioner was employed as the Director of Finance at a skilled nursing facility enrolled in the West Virginia Medicaid program.  IG Ex. 3 at 3-4; IG Ex. 6 at 5-6.  Following an audit by the facility’s corporate owner and an investigation by the West Virginia MFCU, the MFCU determined that Petitioner had financially exploited physically or mentally incapacitated residents in the facility by misappropriating $7,562.81 in funds from those residents.  IG Ex. 6 at 6-8.  Specifically, the MFCU found that from December 31, 2014 to July 28, 2016, Petitioner made withdrawals totaling $7,562.81 from the trust fund the facility maintained on behalf of its residents and kept that money for her own personal gain.  IG Ex. 3 at 3-4; IG Ex. 6 at 6-8. 

On August 15, 2019, the West Virginia AG’s office filed a criminal complaint against Petitioner and charged her with four felony counts of financial exploitation of an elderly person, protected person, or incapacitated adult in the amount of $1,000 or more, in violation of West Virginia Code (W. Va. Code) § 61-2-29b(b); four felony counts of obtaining money, property and services by false pretenses in violation of W. Va. Code § 61-3-24(a); and one felony of count of a fraudulent scheme in violation of W. Va. Code § 61-3-24d.  IG Ex. 3 at 2-4.

On August 18, 2020, Petitioner pleaded guilty to one misdemeanor count of financial exploitation of an elderly person or protected person, or an incapacitated adult, in violation of W. Va. Code § 61-2-29b(a).  IG Ex. 4; P. Exs. 3, 4, 5.  The Court accepted Petitioner’s guilty plea and sentenced her to serve 90 days in jail followed by six months of probation.  IG Ex. 4.  The court also ordered her to pay $176.95 in court costs and a mandatory civil penalty of $5,672.11 to the West Virginia MFCU.  Id. 

Petitioner was convicted of a criminal offense for exclusion purposes under section 1128(a)(1) 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 a plea of guilty or no contest has been accepted in a federal, state, or local court.  42 U.S.C. § 1320a-7(i)(1), (3).  Here, the criminal complaint, the plea agreement, and the entry of judgment by the Court all make readily apparent that Petitioner was in fact convicted of such an offense.  IG Exs. 3, 4; P. Exs. 3, 4, 5. 

Petitioner also concedes she was convicted of a criminal offense.  P. Br. at 1-3; IG Ex. 4.  I therefore conclude Petitioner was convicted of a criminal offense within the meaning of 42 U.S.C. § 1320a-7(a)(1).

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2. 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 Petitioner be excluded from participation in federal programs if she was convicted of an offense relating 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).  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 and Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).

Petitioner concedes her conviction is related to the delivery of an item or service under a state health care program.  P. Br. at 3.  The record clearly demonstrates a nexus between the criminal offense for which Petitioner was convicted and the delivery of an item or service under a state health care program.  In her capacity as Director of Finance for a skilled nursing facility, Petitioner had access to the financial information of residents at the facility.  IG Ex. 6 at 8-9.  Between December 31, 2014 and July 28, 2016, Petitioner knowingly misappropriated $7,562.81 from the accounts of several residents.  Id. at 6-9.

After being arrested and charged with nine felony counts, Petitioner pleaded guilty to one misdemeanor count of financial exploitation of an elderly or protected person, or an incapacitated adult, in violation of W. Va. Code § 61-2-29b(a).  IG Exs. 3, 4.  The conduct to which Petitioner admitted by virtue of her guilty plea, and which forms the factual basis of her criminal conviction, is clearly related to the delivery of an item or service as contemplated by section 1128(a)(1) of the Act.  Moreover, court-ordered restitution to a State Medicaid program is evidence of a nexus between the offense and the delivery of items or services under that Medicaid program.  Berton Siegel, D.O., DAB No. 1467 at 6-7 (1994).  Here, the sentencing court ordered Petitioner to pay $5,672.11 in restitution to the West Virginia MFCU, the entity within the West Virginia AG’s office tasked with investigating fraud pertaining to the state’s Medicaid program.  IG Ex. 4. 

I therefore conclude that Petitioner was convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program as contemplated by 42 U.S.C. § 1320a-7(a)(1).

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3. The IG was required to exclude Petitioner under the Act’s mandatory exclusion authority.

Although Petitioner does not contest the relatedness of her offense of conviction to the delivery of an item or service under Medicare or a state health care program, she asserts her exclusion under the mandatory exclusion authority in section 1128(a)(1) of the Act was improper because she was convicted of a misdemeanor offense, which in her view, only triggered the IG’s permissive exclusion authority under section 1128(b)(1)(A) of the Act.  P. Br. at 1, 3, 4. 

This argument is without merit.  As the IG correctly observed, section 1128(a)(1) of the Act does not distinguish between misdemeanor and felony offenses.  IG Reply at 2.  It only requires the IG to exclude an individual convicted of a “criminal offense” related to the delivery of an item or service under Medicare or a state health care program.  42 U.S.C. § 1320a-7(a)(1). 

It is true that some criminal offenses could fall under both permissive and mandatory exclusion authorities.  But in that circumstance, the IG has no discretion to determine which exclusion authority to apply; instead, the IG must exclude an individual who is convicted of a crime subject to the mandatory exclusion authority.  See Gregory J. Salko, M.D., DAB No. 2437 at 4 (2012), quoting Timothy Wayne Hensley, DAB No. 2044 at 15 (2006) (“As the Board has observed, if an offense falls under the mandatory exclusion statute, ‘courts have repeatedly held that the I.G. is then required to impose a mandatory exclusion even if an individual’s conduct also falls within the scope of a permissive exclusion provision.’”).  The mere fact that Petitioner’s criminal offense resulted in a misdemeanor conviction does not preclude the possibility of mandatory exclusion, and as I have explained, Petitioner’s offense of conviction requires exclusion under section 1128(a)(1) of the Act. 

4. 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 that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(1), 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.

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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)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)), effective January 20, 2021.