Courtney Suzanne Newman, DAB CR6159 (2022)

DECISION

Petitioner, Courtney Suzanne Newman, is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(4)), effective March 20, 2022.  Petitioner’s exclusion for the minimum period of five years is required by section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)).  An additional exclusion of five years, for a total minimum exclusion of 10 years,¹ is not unreasonable based upon the presence of two aggravating factors and no mitigating factor.

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I.  Background

The Inspector General (IG) notified Petitioner by letter dated February 28, 2022, that she was excluded from participation in Medicare, Medicaid, and all federal health care programs for 12 years.  The IG cited section 1128(a)(4) of the Act as the basis for Petitioner’s exclusion based on her conviction in the United States District Court, Knoxville Division, Eastern District of Tennessee (district court), of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance as defined under federal or state law.  The IG further advised Petitioner that the mandatory five-year exclusion was extended to 12 years because Petitioner’s acts that resulted in her conviction were committed over a period of one year or more, her sentence included incarceration, and she was subject to another adverse action by a state or federal agency or board.  IG Exhibit (Ex.) 1.  The IG notified Petitioner on May 25, 2022, that the minimum period of exclusion was reduced to 10 years from 12 years because the IG determined that the first aggravating factor listed in the February 28, 2022 notice did not exist, i.e., the evidence does not show that Petitioner’s criminal acts were committed over a period of one year or more.  IG Ex. 3.

On March 24, 2022, Petitioner timely filed a request for hearing (RFH) in which she asserts that the length of the exclusion is unreasonable.  This case was docketed and assigned to me on March 28, 2022.  A prehearing conference was convened on April 14, 2022.  The substance of the conference is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated April 14, 2022 (Prehearing Order).  During the conference, Petitioner waived an oral hearing and the parties agreed that the case may be decided on the documentary evidence and the briefs.  Prehearing Order at 3 ¶ 5.

The IG filed a brief (IG Br.) on May 31, 2022, with IG Exs. 1 through 7.  On July 15, 2022, Petitioner filed a brief (P. Br.), with P. Exs. 1 and 2.  The IG filed a reply brief on July 29, 2022 (IG Reply).  No objects were made to my consideration of the offered exhibits and IG Exs. 1 through 7 and P. Exs. 1 and 2 are admitted as evidence.

II.  Discussion

A.  Applicable Law

Section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)) establishes Petitioner’s rights to a hearing by an administrative law judge (ALJ) and judicial review of the final action of the Secretary of Health and Human Services (the Secretary).

Pursuant to section 1128(a)(4) of the Act, the Secretary must exclude from participation in the Medicare and Medicaid programs any individual convicted of a felony criminal offense under federal or state law, that occurred after August 21, 1996, related to the

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unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  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.  The Secretary has promulgated regulations implementing these provisions of the Act.  42 C.F.R. § 1001.101(a).²

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for a period of no fewer than five years.  42 C.F.R. § 1001.102(a).  The Secretary has published regulations that establish aggravating factors the IG may consider as a basis to extend the period of exclusion beyond the minimum five-year period, as well as mitigating factors that may be considered only if the IG proposes to impose an exclusion longer than five years.  42 C.F.R. § 1001.102(b), (c).

The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(c), (d).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, and the IG bears the burden on all other issues.  42 C.F.R. § 1005.15(b).

B.  Issues

The Secretary has by regulation limited my scope of review to two issues: 

Whether there is a basis for exclusion; and

Whether the length of exclusion is unreasonable.

42 C.F.R. § 1001.2007(a)(1).

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

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

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1.  Petitioner’s request for hearing was timely and I have jurisdiction.  42 C.F.R. § 1005.2(c).

2.  A decision on the documentary evidence and briefs of the parties is appropriate as an oral hearing was waived.  42 C.F.R. § 1005.6(b)(5).

3.  Section 1128(a)(4) of the Act requires Petitioner’s exclusion from participation in Medicare, Medicaid, and all other federal health care programs.

a.  Facts

On February 13, 2020, a jury found Petitioner guilty of one count of aiding and abetting opening and maintaining a business for the purpose of illegally distributing Schedule II controlled substances, a violation of 21 U.S.C. § 856(a)(1).  IG Ex. 5 at 9.  Judgment was entered by the district court on December 10, 2020.  Petitioner was sentenced to be confined for 40 months followed by supervised release for three years.  IG Ex. 2.  Imprisonment for not more than 20 years is authorized for a violation of 21 U.S.C. § 856(a)(1).  Therefore, Petitioner was convicted of a class C felony.  18 U.S.C. § 3559(a)(3).  According to the Fourth Superseding Indictment, Petitioner’s criminal conduct occurred from in or about October 2018 through on or about March 2014.  IG Ex. 4 at 9 ¶ 23.  Petitioner also states in her request for hearing that evidence at trial showed the period of her involvement was from October 16, 2018 through March 27, 2014, or about 86 days.  RFH at 1.

On February 24, 2021, a consent order was approved by the Tennessee Board of Nursing (Tennessee Board) under which Petitioner voluntarily surrendered her Advanced Practice Registered Nurse (APRN) license and her Registered Nursing (RN) license effective the date of the consent order.  Petitioner agreed in the consent order that surrender of her licenses had the same effect as a revocation of those licenses.  IG Ex. 6 at 5 ¶ 8.  Petitioner also stipulated that she was convicted by the district court and sentenced to 40 months in prison.  IG Ex. 6 at 3 ¶¶ 4-5.

Petitioner’s California RN license was revoked by the California Board of Registered Nursing (California Board) on October 26, 2018, based on the action against Petitioner’s Tennessee ARPN and RN licenses by the Tennessee Board.  IG Ex. 7 at 3, 8-9.

b.  Analysis

Section 1128(a)(4) of the Act requires that the Secretary exclude from participation in Medicare, Medicaid, and all federal health care programs any individual or entity:

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(1) convicted of a felony criminal offense under federal or state law;

(2) where the offense occurred after August 21, 1996 (the date of enactment of the Health Insurance Portability and Accountability Act of 1996); and

(3) the criminal offense is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.

Petitioner admits that she was convicted of a felony offense that occurred after August 21, 1996, and that involved unlawful manufacture, distribution, prescription, or dispensing a controlled substance.  Petitioner admits that the facts in this case trigger mandatory exclusion pursuant to section 1128(a)(4) of the Act.  P. Br. at 1-3; RFH (Petitioner challenged only duration of the period of exclusion).

Petitioner informs me that her conviction was upheld on appeal by the US Circuit Court of Appeals for the Sixth Circuit (United States v. Sylvia Hofstetter; Holli Womack; Cynthia Clemons; Courtney Newman, 31 F.4th 396 (6th Cir. 2022)).  Petitioner also states that she filed a petition for certiorari in the US Supreme Court.  P. Br. at 2 n. 1.  The fact that Petitioner is appealing her conviction has no impact on the decision in this case.  Act § 1128(i)(1) (a person is convicted when judgment is entered even if an appeal is pending, or the record has been expunged).  On September 18, 2022, Petitioner filed a supplemental brief and a copy of a memorandum filed by the Solicitor General of the United States before the US Supreme Court.³  In the memorandum filed before the Supreme Court by the Solicitor General, she recommended that the Court vacate the 6th Circuit decision upholding the convictions of Petitioner and her co-conspirators and remand the cases for further proceedings.  In her supplemental brief Petitioner recommends that I defer action in this case pending action by the Supreme Court and

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possible action by the Sixth Circuit.  Petitioner’s recommendation is not accepted because the regulations already provide adequate relief if Petitioner’s conviction is overturned on appeal in the federal courts.  The IG has provided by regulation that an exclusion will be withdrawn, and the excluded individual reinstated to Medicare, Medicaid, and all federal health care programs retroactive to the date of exclusion if the individual’s conviction is reversed or vacated on appeal.  42 C.F.R. § 1001.3005(a).  I am bound to follow federal statutes and regulations.  42 C.F.R. § 1005.4(c)(1).  The facts that Petitioner has a pending appeal before the Supreme Court and that the Solicitor General agrees that her case should be remanded to the Sixth Circuit do not, at this time, affect her status of having been convicted or justify delaying this decision.  The IG has provided an adequate remedy if her criminal conviction is overturned on appeal.

Petitioner also points out that she was acquitted by the jury of other alleged offenses.  Petitioner asserts that it is not possible to know the factual basis on which the jury decided she was guilty of the one offense, but Petitioner speculates the verdict was not related to prescribing controlled substances.  P. Br. at 1-2.  Petitioner also asserts that any prescriptions she issued were lawful and for legitimate medical purposes.  P. Br. at 3.  The fact that Petitioner concedes that mandatory exclusion is triggered based on her conviction, shows that Petitioner recognizes that in this forum she cannot collaterally attack, and I may not review her conviction.  42 C.F.R. § 1001.207(d).

Accordingly, I conclude that there is a basis for exclusion and Petitioner’s exclusion is mandated by section 1128(a)(4) of the Act.

4.  Section 1128(c)(3)(B) of the Act requires a minimum exclusion of five years for any exclusion pursuant to section 1128(a) of the Act.

I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(4) of the Act.  Therefore, the IG must exclude Petitioner for a minimum period of five years pursuant to section 1128(c)(3)(B) of the Act.  The IG has no discretion to impose a lesser period and I may not reduce the period of exclusion below five years.

The remaining issue is whether it is unreasonable to extend Petitioner’s exclusion by an additional five years.  My determination of whether the exclusionary period in this case is unreasonable turns on whether:  (1) the IG has proven that there are aggravating factors; (2) Petitioner has proven that the IG considered an aggravating factor that does not exist or that there are mitigating factors that the IG failed to consider; and (3) the period of exclusion is within a reasonable range.

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5.  Two aggravating factors are present that justify extending the minimum period of exclusion to 10 years.

The IG originally notified Petitioner on February 28, 2022, that she was being excluded for 12 years based on the existence of three aggravating factors and no mitigating factors.  IG Ex. 1.  However, on May 25, 2022, the IG sent Petitioner a notice amending its February 28, 2022 notice.  The IG changed the minimum period of exclusion from 12 years to 10 years because the IG conceded that the first aggravating factor listed in the February 28, 2022 notice did not exist, i.e., the IG admitted that the evidence does not show that Petitioner was convicted of a criminal offense that occurred over a period of one year or more.⁴  IG Ex. 3.  Accordingly, the IG now relies on two aggravating factors to justify extending the period of Petitioner’s exclusion from the mandatory minimum of five years to 10 years.  The two aggravating factors remaining at issue as alleged by the February 28, 2022 notice are that:  (1) Petitioner was sentenced to incarceration; and (2) Petitioner was subject to adverse action against her APRN and RN licenses by state agencies in Tennessee and California.  IG Ex. 1 at 1; P. Br. at 4.

Petitioner concedes that she was sentenced to 40 months incarceration.  However, Petitioner argues that is only 15 percent of the maximum sentence that could have been imposed and she speculates about the district court’s thinking when imposing just over three years of imprisonment.  P. Br. at 4.  Petitioner also concedes that the Tennessee Board and the California Board took adverse actions against her nursing licenses as shown by IG Exs. 6 and 7.  However, Petitioner argues that neither state action should be given much weight in determining a reasonable period of exclusion.  Thus, while Petitioner admits the existence of both aggravating factors, Petitioner argues that the IG incorrectly weighed the aggravating factors when deciding to extend the period of exclusion by an additional five years.  P. Br. at 4-6.

I conclude that the two aggravating factors that the IG relied upon are established by the evidence before me and they are, in fact, undisputed.  Petitioner’s arguments that the IG incorrectly weighed the aggravating factors are without merit for reasons discussed in the next section.  The two aggravating factors are a basis for the IG to extend the period of exclusion beyond the minimum exclusion of five years.  42 C.F.R. § 1001.102(b)(5), (b)(9).

6.  Exclusion for 10 years is not unreasonable in this case.

The IG reduced the original 12-year exclusion of Petitioner to 10 years conceding, as Petitioner argued in her RFH, that the IG initially considered an aggravating factor that

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was not shown by the evidence, i.e., that Petitioner was convicted of criminal conduct that occurred over a period of one year or more.  IG Exs. 1, 3.

Before me, Petitioner argues that the ten-year exclusion is unreasonable because the IG did not correctly weigh the aggravating factors.  I conclude that Petitioner’s arguments that the IG improperly weighed the two aggravating factors are without merit.  Petitioner argues that the period of exclusion should be no more than the mandatory minimum five years required by the Act.  P. Br. at 3-6.  Petitioner admits she was sentenced to incarceration, the aggravating factor established by 42 C.F.R. § 1001.102(b)(5), but she argues that her sentence to confinement was short compared to the confinement authorized.  She also admits adverse action was taken against her nursing licenses by two state agencies, the aggravating factor established by 42 C.F.R. § 1001.102(b)(9).  However, she argues that the California Board acted based on the Tennessee Board’s action.  P. Br. at 4-6.  The evidence shows that the Tennessee Board’s action was based on Petitioner’s criminal charges and conviction.  IG Ex. 6.  The California Board action, an action not defended by Petitioner, was clearly based on the Tennessee action.  However, contrary to Petitioner’s arguments, it is clear to me that Petitioner’s criminal charges and her conviction are the reasons she lost her nursing licenses in both California and Tennessee.  The Board has concluded that an ALJ has no authority to substitute his or her discretion for the IG in determining the reasonable period of exclusion.  Therefore, I have no authority to reweigh the aggravating factors, even if, I agreed with Petitioner’s arguments.

The regulation states that the ALJ must determine whether the length of exclusion imposed is “unreasonable.”  42 C.F.R. § 1001.2007(a)(1)(ii).  The Board, however, has made clear that the role of the ALJ in exclusion cases is to conduct a de novo review of the facts related to the basis for the exclusion and the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102 and to determine whether the period of exclusion imposed by the IG falls within a reasonable range.  Juan De Leon, Jr., DAB No. 2533 at 3 (2013); Craig Richard Wilder, DAB No. 2416 at 8 (2011); Joann Fletcher Cash, DAB No. 1725 at 17 n.6 (2000).  The Board explained that, in determining whether a period of exclusion is “unreasonable,” the ALJ is to consider whether such period falls “within a reasonable range.”  Cash, DAB No. 1725 at 17 n.6.  Pursuant to 42 C.F.R. § 1005.20(b), an ALJ is authorized to affirm, increase, or reduce the period of exclusion imposed by the IG.  However, the Board cautions that whether the ALJ thinks the period of exclusion is too long or too short is not the issue.  The ALJ may not substitute his or her judgment for that of the IG and may only change the period of exclusion in limited circumstances.

In John (Juan) Urquijo, DAB No. 1735 (2000), the Board made clear that, if the IG considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the IG fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the

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period of exclusion beyond the minimum.  In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the Board suggests that when it is found that an aggravating factor considered by the IG is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate.

The Board has by these various prior decisions narrowly defined my authority under the applicable regulation to judge the reasonableness of the period of exclusion.

Based on my de novo review, I conclude that a basis for exclusion exists and that the undisputed evidence establishes the two aggravating factors that the IG relied on to impose the ten-year exclusion.  Petitioner failed to meet her burden to show that the IG considered an aggravating factor that did not exist or that the IG failed to consider any mitigating factor authorized by 42 C.F.R. § 1001.102(c).  Petitioner points to no authority for me review how the IG weighs the aggravating factors when determining whether to impose an exclusion that is longer than the five-year minimum period of exclusion.  The Board has been clear that whether I think a period of exclusion is too long or too short is not the issue and that I may not substitute my judgment for that of the IG, and I conclude that limit extends to weighing the aggravating factors.  I may reassess the reasonableness of the period of exclusion only when Petitioner shows that the IG considered an aggravating factor that did not exist or failed to consider a mitigating factor that did exist.  Petitioner’s argument that I should reweigh the aggravating factors and reduce the exclusion to the minimum five-years is not possible on the facts of this case and without merit.

I conclude that a period of exclusion of 10 years is in a reasonable range and not unreasonable considering the existence of two aggravating factors and no mitigating factor.  Accordingly, I conclude that no change in the period of exclusion is permissible or appropriate.

III.  Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 10 years pursuant to section 1128(a)(4) of the Act, effective March 20, 2022.

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Endnotes

¹ Pursuant to 42 C.F.R. § 1001.3001, Petitioner may apply for reinstatement only after the period of exclusion expires.  Reinstatement is not automatic upon completion of the minimum period of exclusion.

² References are to the 2021 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated.

³ Pursuant to 42 C.F.R. § 1005.13(a), any application to an ALJ for an order or ruling must be by a motion.  Pursuant to 42 C.F.R. § 1005.13(c), the IG has 10 days (or such time as I allow) to respond to a motion filed by Petitioner.  Petitioner did not follow the usual courtesy of requesting leave to file her supplemental brief, which was not timely under the Prehearing Order ¶ 5(c) related to filing reply briefs.  Therefore, there is no pending motion to which the IG can respond.  I see no need to delay this decision to allow time for the IG to file a motion to strike the pleadings.  Given the importance of addressing the issue raised by Petitioner, I do not sua sponte strike the pleadings and would not likely grant a motion to strike by the IG.  While it is appropriate to briefly address the issue and the recommendation of Petitioner based on the Supreme Court filings, those filings do not affect the decision in this case and addressing those pleadings in this decision causes no prejudice to the IG.

⁴ This was the issue raised by Petitioner in her March 24, 2022 RFH.