Yohannes Tinsae, DAB CR6153 (2022)

DECISION

Respondent, the Inspector General of the United States Department of Health and Human Services (IG), excluded Petitioner, Yohannes Tinsae (Petitioner), for five years from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act).  As explained below, I affirm both the IG’s exclusion determination and the length of Petitioner’s exclusion.

I.   Case Background and Procedural History

On January 31, 2022, the IG notified Petitioner of his exclusion from participation in Medicare, Medicaid, and all federal health care programs under 42 U.S.C. § 1320a‑7(a)(3) for a period of five years.  IG Exhibit (Ex.) 1.¹  The IG based her exclusion action on Petitioner’s felony conviction of a criminal offense in the United States District Court for the Southern District of Ohio (District Court) 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

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of management or administrative services related to the delivery of such items or services, or with respect to any act or omission in a health care program (other than 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. 

Petitioner timely sought review of his exclusion by an Administrative Law Judge (ALJ) in the Civil Remedies Division and I was designated to hear and decide this case.  On April 26, 2022, I held a pre-hearing conference by telephone with Petitioner’s counsel and counsel for the IG, the substance of which is summarized in my April 27, 2022 Order Summarizing Pre-hearing Conference (Summary Order). 

In accordance with my Summary Order, the IG filed a brief (IG Br.) with six proposed exhibits (IG Exs. 1-6).  Petitioner filed a brief (P. Br.) with nine proposed exhibits (P. Exs. 1-9).  The IG subsequently filed a reply brief (IG Reply Br.). 

II.   Admission of Exhibits and Decision on the Record

Neither party has objected to the other party’s exhibits.  I therefore admit all proposed exhibits into the record.  42 C.F.R. § 1005.8(c); Civ. Remedies Div. P. § 14(e). 

The IG proposed no witnesses and indicated she did not believe a hearing to be necessary.  IG Br. at 9.  Petitioner indicated he believed a hearing to be necessary and identified himself as a witness.  P. Br. at 9-10.  He submitted his written direct testimony as a pre-hearing exhibit.  P. Ex. 9. 

I advised the parties in my Summary Order that I would only hold a hearing if a party requested to cross-examine a witness for whom the opposing party provided written direct testimony.  Summary Order at 5; Civ. Remedies Div. P. § 19(d).  In this case, the IG has neither sought to cross-examine Petitioner as to his written direct testimony nor objected to its inclusion in the record.  Accordingly, there is no need to hold a hearing and I proceed to a decision based on the record before me.  Civ. Remedies Div. P. § 19(d).  

III.   Issue

Whether the IG properly excluded Petitioner under 42 U.S.C. § 1320a‑7(a)(3). 

IV.   Jurisdiction

There is no dispute that Petitioner timely sought appeal of an exclusion action taken against him by the IG.  I therefore have jurisdiction to hear and decide this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a).

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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. 

A. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(3) of the Act.

Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(3) of the Act where an individual has been convicted, under Federal or State law, of a criminal offense that occurred after August 21, 1996, consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct that was committed in connection with the delivery of a health care item or service.  42 U.S.C. § 1320a‑7(a)(3); 42 C.F.R. § 1001.101(c)(1).  The IG has established these elements by a preponderance of the evidence. 

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

The Act provides an individual has been “convicted” if subject to “a finding of guilt . . . [or] when a plea of guilty or nolo contendere by the individual . . . has been accepted by a Federal, State, or local court.”  42 U.S.C. § 1320a-7(i)(2)-(3).  Here, Petitioner was charged via indictment on April 9, 2019 with one count of felony conspiracy to obtain controlled substances by misrepresentation, fraud, forgery, deception, or subterfuge, in violation of 21 U.S.C. §§ 846 and 843(a)(3).  IG Ex. 2 at 10.  The government alleged Petitioner participated in the conspiracy between approximately 2010 and 2015.  Id. at 11. 

On January 30, 2020, the government filed a superseding information against Petitioner charging him with one count of knowingly or intentionally acquiring controlled substances by misrepresentation, fraud, forgery, or subterfuge, in violation of 21 U.S.C. § 843(a)(3).  IG Ex. 3.  Petitioner pleaded guilty to this charge on February 10, 2020.  IG Ex. 6; see also P. Ex. 1.²  A criminal conviction within the meaning of the Act includes a guilty plea accepted by a federal, state, or local court.  42 U.S.C. § 1320a-7(i)(3); 42 C.F.R. § 1001.2.  Petitioner does not dispute he was convicted of a felony committed after August 21, 1996.  P. Br. at 1.  I conclude the IG has established this element by a preponderance of the evidence.

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2. Petitioner’s offenses of conviction were felonies related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. 

Section 1128(a)(3) of the Act requires the exclusion of individuals subject to felony convictions related to “fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”  42 U.S.C. § 1320a‑7(a)(3).  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 “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).  

Petitioner asserts the IG’s exclusion action was improper because the “underlying actions that led to his conviction were based on a misrepresentation made by Petitioner in signing a pharmaceutical supplier form without being aware that his employer had withheld information from him.”  P. Br. at 2.  Petitioner contends his conviction does not fall within the meaning of section 1128(a)(3) of the Act because he engaged in misrepresentation, not fraud, offenses he claims are materially different as demonstrated by their treatment in the common law and by their disjunctive inclusion in the criminal statute under which he was convicted.³  Id. at 4-8.  Petitioner further contends that section 1128(a)(3) identifies fraud as a basis for exclusion but not misrepresentation, presumably meaning Congress did not intend to exclude individuals who were not explicitly convicted of “fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct.”  42 U.S.C. § 1320a‑7(a)(3). 

Petitioner’s extraordinarily crabbed reading of both the criminal statutes and the exclusion statute are without merit.  21 U.S.C. § 843(a)(3) treats misrepresentation and fraud as equally criminal so long as the requisite level of intent is present.  Petitioner now claims he was duped into unintentionally making the misrepresentations that resulted in his conviction.  P. Br. at 7 (“[As] Petitioner . . . lacked the fraudulent intent to make the false statement, his acts were therefore bereft of fraudulent intent and do not rise to a mandatory five-year exclusion under Section 1128(a)(3) of the Act.”).  But Petitioner pleaded guilty to “knowingly or intentionally acquir[ing] controlled substances by misrepresentation, fraud, forgery, or subterfuge.”  IG Ex. 3 (emphasis added); IG Ex. 5; IG Ex. 6.  Because collateral attacks on an underlying conviction are not permitted in these proceedings, Petitioner cannot now claim his misrepresentations were less than knowing or intentional.  42 C.F.R. § 1001.2007(d).  Petitioner’s effort to distinguish

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between misrepresentation and fraud in the context of assessing relatedness for purposes of exclusion is irrelevant.

Petitioner’s understanding of the scope of the exclusion authority provided by the Act is equally erroneous.  As the Board observed, “the plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud and other types of listed offenses, not just to felonies that constitute fraud or one of the other listed offenses.”  Charice D. Curtis, DAB No. 2430 at 4 (2011).  Petitioner’s rigid reading of section 1128(a)(3) otherwise fails to explain the Act’s inclusion of “other financial misconduct” as a basis for exclusion beyond the named offenses.  Id. (“by including ‘other financial misconduct’ . . . Congress clearly intended to broadly encompass financially-related offenses.”). 

In short, Petitioner’s offense of conviction need not be explicitly listed in section 1128(a)(3) of the Act to merit exclusion.  It need only relate to the offenses identified therein.  Here, I have no difficulty concluding Petitioner’s offense of conviction relates to fraud and constitutes “other financial misconduct” within the meaning of section 1128(a)(3) of the Act.  As the head pharmacist of Dayton Pharmacy, Petitioner made material misrepresentations to a pharmaceutical supplier to induce that supplier to continue supplying controlled substances after the pharmacy’s initial supplier refused to continue dispensing them to a “high-risk” pharmacy.  IG Ex. 4 at 2-4; P. Ex. 1 at 8 (“During a site inspection with Supplier B in August of 2014, [Petitioner] reaffirmed the false declaration that Dayton Pharmacy had not been blocked by any prior distributors.  [Petitioner] assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B by misrepresenting material information regarding the operations of Dayton Pharmacy.”). 

Petitioner made material misrepresentations to convince a supplier of controlled substances to furnish them to his employer, Dayton Pharmacy.  This in turn allowed Petitioner’s physician co-defendant to continue prescribing such substances at an alarming rate (and to allow Petitioner’s employer to reap substantial financial benefits in doing so).  In short, Petitioner’s criminal conduct, however it might be described at common law, falls well within the meaning of fraud and financial misconduct.  Accordingly, I have no difficulty concluding Petitioner’s offense of conviction related to “fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct,” as that phrase is contemplated in 42 U.S.C. § 1320a-7(a)(3). 

3. Petitioner’s offense of conviction related to fraud committed in connection with the delivery of a healthcare item or service. 

Petitioner asserts his conviction does not trigger exclusion under section 1128(a)(3) of the Act because his offense had no connection to the delivery of a healthcare item or service as it “solely related to an alleged misrepresentation on a supplier form used in the administration of Dayton Pharmacy and the supplier’s relationship.”  P. Br. at 9.  The IG

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responds that Petitioner’s offense of conviction was committed in connection with the delivery of a healthcare item or service because he acted in his capacity as head pharmacist to induce pharmaceutical suppliers to supply controlled substances to Dayton Pharmacy.  IG Reply Br. at 5-6. 

Petitioner’s passive description of his criminal offense cannot obscure its clear connection to the delivery of a healthcare item or service.  Section 1128(a)(3) of the Act requires exclusion of an individual who has been “convicted for an offense which occurred . . . in connection with the delivery of a health care item or service . . . .”  42 U.S.C. § 1320a-7(a)(3).  The Board has interpreted the phrase “in connection with” to require only a “common sense connection” between the circumstances of the offense and the delivery of a health care item or service.  W. Scott Harkonen, M.D.,DAB No. 2485 at 7 (2012) (citing Ellen L. Morand, DAB No. 2436 at 9 (2012); Charice D. Curtis, DAB No. 2430 at 5). 

I need not search deeply for such a connection.  Petitioner, the head pharmacist for Dayton Pharmacy during his criminal offense, admitted he “reaffirmed” a false statement and “misrepresent[ed] material information” regarding the pharmacy’s operations to ensure Dayton Pharmacy continued to receive controlled substances.  P. Ex. 1 at 8.  Petitioner’s misrepresentations allowed his co-defendants to obtain and possess controlled substances which were, in whole or in part, dispensed to patients under Petitioner’s watch.  Petitioner’s offense of conviction has an obvious connection to the delivery of a health care item or service.

4. Prior determinations by state agencies have no effect on the IG’s obligation under the Act to impose exclusion.  

Petitioner relies on a finding by the Ohio Department of Medicaid (ODM) that his offense of conviction did not warrant mandatory exclusion to claim the IG improperly excluded him on that basis.  P. Br. at 8-9.  This claim is without merit.  Petitioner correctly observes that the Secretary’s regulations permit state agencies to exclude an individual or entity from participating in the Medicaid program for any reason HHS could exclude that person or entity.  Id. at 8, citing 42 C.F.R. § 1002.3.  But this regulation merely permits state agencies to take parallel action to protect their respective Medicaid programs.⁴  Nothing in this or any other regulation or the Act itself even suggests that a state agency’s judgment as to the propriety or length of exclusion can supersede or extinguish the IG’s unique obligation imposed by Congress to mandatorily exclude individuals or entities under certain conditions.  42 U.S.C. § 1320a-7(a) (“The

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Secretary shall exclude the following individuals and entities from participation in any Federal health care program . . . .”); see also 42 C.F.R. § 1001.101.  

5. 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 the IG had a valid basis to exclude Petitioner pursuant to 42 U.S.C. § 1320a-7(a)(3), Petitioner must be excluded for the five-year minimum period required by the Act.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2).  The Act neither permits the IG to impose a lesser period of exclusion nor me to reduce it. 

VI.   Conclusion

For the foregoing reasons, I affirm the IG’s determination to exclude Petitioner for five years from participating in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-7(a)(3).

Endnotes

¹  Document 6b in the official case file maintained in the DAB E-file system; for clarity and simplicity, I cite to the exhibits attached by the parties to their respective briefs by the exhibit numbers indicated by the parties, not the document numbers assigned by DAB E-file.

²  Petitioner and his attorneys executed a signed plea agreement with prosecutors on January 26, 2020.  P. Ex. 1.

³  21 U.S.C. § 843(a)(3) makes it crime to “acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge.” (emphasis added).

⁴  As the IG observes, the fact that ODM imposed a three-year period of exclusion on a permissive basis has no effect on the IG’s obligation under the Act to impose mandatory exclusion if warranted.  IG Reply Br. at 7-8, quoting Gregory J. Salko, M.D.,DAB No. 2437 at 4 (2012) (“courts have repeatedly held that the I.G. is . . . required to impose a mandatory exclusion even if an individual’s conduct also falls within the scope of a permissive exclusion provision.”).