Elmer Nielsen Jr., CR6273 (2023)

DECISION

Petitioner, Elmer Nielsen Jr., is excluded from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)), effective November 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)).¹ 

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I.    Background

The Inspector General (IG) notified Petitioner by letter dated October 31, 2022, that he²  was excluded from participation in Medicare, Medicaid, and all federal health care programs for five years.  The IG cited section 1128(a)(3) of the Act as the authority for Petitioner’s exclusion based on his felony conviction in the Circuit Court of Warren County, Mississippi (state court), 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.  The IG excluded Petitioner for the minimum statutory period of five years.  IG Exhibit (Ex.) 1. 

Petitioner filed a request for hearing on November 16, 2022 (RFH).  I convened a prehearing conference by telephone on December 2, 2022, the substance of which is memorialized in my Prehearing Conference Order and Schedule for Filing Briefs and Documentary Evidence dated December 2, 2022 (Prehearing Order). 

The IG filed a motion for summary judgment and supporting brief on January 17, 2023, with IG Exs. 1 through 5.  Petitioner filed a response in opposition to the IG’s motion on March 6, 2023 (P. Br.), with Petitioner’s exhibits (P. Exs.) 1 and 2.  The IG filed a reply brief on March 17, 2023.  

Petitioner has not objected to my consideration of IG Exs. 1 through 5, and they are admitted as evidence.  The IG did not object to my consideration of P. Exs. 1 and 2, and they 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)(3) of the Act, the Secretary must exclude from participation in any federal health care program: 

Any individual or entity that has been convicted for an offense which occurred after [August 21, 1996], under

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Federal or State law, in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program (other than those specifically described in [section 1128(a)(1)]) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct. 

Act § 1128(a)(3); 42 C.F.R. § 1001.101(c).  

Pursuant to section 1128(i) of the Act, an individual is convicted of a criminal offense when:  (1) a judgment of conviction has been entered by a federal, state, or local court whether or not an appeal is pending or the record has been expunged; (2) there is a finding of guilt in 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 has been withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2. 

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act will be for no fewer than five years.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).  

The standard of proof is a preponderance of the evidence.  42 C.F.R. §§ 1001.2007(c), 1005.15(d).  There may be no collateral attack of the conviction that is the basis for the exclusion on either substantive or procedural grounds.  42 C.F.R. § 1001.2007(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), (c); Prehearing Order ¶ 4. 

B.  Issues

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

Whether the IG has a basis for excluding Petitioner from participation in Medicare, Medicaid, and all federal health care programs; and

Whether the length of the proposed period of exclusion is unreasonable. 

42 C.F.R. § 1001.2007(a)(1). 

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When, as in this case, the IG imposes the minimum authorized five-year exclusion under section 1128(a) of the Act, there is no issue as to whether the period of exclusion is unreasonable.  42 C.F.R. § 1001.2007(a)(2). 

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

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

1.  Petitioner’s request for hearing was timely and I have jurisdiction. 

There is no dispute that Petitioner timely requested a hearing and that I have jurisdiction pursuant to section 1128(f) of the Act and 42 C.F.R. pt. 1005. 

2.  Summary judgment is appropriate in this case. 

Pursuant to section 1128(f) of the Act, a person subject to exclusion has a right to reasonable notice and an opportunity for a hearing.  The Secretary has provided by regulation that a sanctioned party has the right to a hearing before an ALJ, and both the sanctioned party and the IG have a right to participate in the hearing.  42 C.F.R. §§ 1005.2, -.3.  Either or both parties may choose to waive appearance at an oral hearing and to submit only documentary evidence and written argument for my consideration.  42 C.F.R. § 1005.6(b)(5).  An ALJ may also resolve a case, in whole or in part, by summary judgment.  42 C.F.R. § 1005.4(b)(12). 

Summary judgment is appropriate in an exclusion case when there are no disputed issues of material fact and when the undisputed facts, clear and not subject to conflicting interpretation, demonstrate that one party is entitled to judgment as a matter of law.  Tanya A. Chuoke, R.N., DAB No. 1721 (2000); David A. Barrett, DAB No. 1461 (1994); Robert C. Greenwood, DAB No. 1423 (1993); Thelma Walley, DAB No. 1367 (1992); Catherine L. Dodd, R.N., DAB No. 1345 (1992); John W. Foderick, M.D., DAB No. 1125 (1990).  When the undisputed material facts of a case support summary judgment, there is no need for a full evidentiary hearing, and neither party has the right to one.  Surabhan Ratanasen, M.D., DAB No. 1138 (1990); Foderick, DAB No. 1125.  In opposing a properly supported motion for summary judgment, the nonmovant must allege facts that show there is a genuine dispute of material fact that affects the proponent’s prima facie case or that might establish a defense.  The nonmovant may not rely upon mere allegations or denials to defeat a properly supported motion for summary judgment.  To defeat a properly supported motion for summary judgment and proceed to a trial, the nonmovant must show there is a genuine dispute as to a material fact that requires determination by the fact finder.  On summary judgment, the judge does not weigh the evidence or attempt to determine the truth.  Rather, the judge accepts the nonmovant’s

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evidence as true and draws all permissible inferences in the nonmovant’s favor.  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-57 (1986). 

The IG has moved for summary judgment.  There are no genuine disputes of material fact in this case.  All issues must be resolved against Petitioner as matters of law.  Accordingly, I conclude that summary judgment for the IG is appropriate. 

3.  Petitioner’s exclusion from participation in Medicare, Medicaid, and all other federal health care programs is required by section 1128(a)(3) of the Act. 

a.  Undisputed Facts

The following facts are undisputed.  All factual inferences are drawn in Petitioner’s favor on summary judgment. 

On August 25, 2020, a grand jury indictment of Petitioner was filed in the state court charging Petitioner with five counts of obtaining or attempting to obtain a controlled substance.  The indictment alleged that on five occasions in September and October 2018, Petitioner obtained or attempted to obtain the controlled substance hydromorphone by larceny, embezzlement, misrepresentation, fraud, forgery, deception, or subterfuge, in violation of Section 41-29-114(1) of the Mississippi Code of 1972.  IG Ex. 2 at 1-2. 

Petitioner admits in his prehearing brief that in October 2018, he was a nurse practitioner in Mississippi.  He tested positive for hydromorphone and was terminated by his employer.  Petitioner admits that he diverted narcotic medications, specifically Dilaudid® (hydromorphone) for his personal use by taking the narcotic leftover in vials after patient administration and by obtaining the narcotic for patients with no order for the narcotic keeping the full amount of the drug for himself.  He admits to obtaining Dilaudid® 19 times without medical orders and then practicing while impaired on multiple occasions from July through October 2018.  P. Br. at 1-2; IG Ex. 5 at 2-3. 

On July 20, 2021, the state court issued an order discharging Petitioner from supervision and dismissed the charge of obtaining a controlled substance by fraud.  The order stated that Petitioner “was sentenced under section 99-15-26” and placed on probation for five years on December 4, 2020.  P. Ex. 1.  The section of the Mississippi code cited by the state court granted the state court, in limited types of cases, authority to withhold acceptance of a guilty plea and sentence based on that plea pending successful completion of conditions imposed by the state court.  The Mississippi statute further provided that upon completion of the conditions imposed by the court, the court would direct that the case be dismissed and closed with additional provision for expunging the record.  Miss. Code Ann. § 99-15-26(1)(a), (4)-(5). 

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On August 11, 2021, the state court issued an “Amended Judgment on a Non-adjudicated Guilty Plea” (Amended Judgment).  The Amended Judgment states that Petitioner appeared before the state court and pleaded guilty to one count of obtaining a controlled substance by fraud – count 1 of the indictment.  The court states that Petitioner filed a written application to allow him to enter a non-adjudicated plea of guilty, and after interrogating Petitioner, the state court decided to defer acceptance of the guilty plea and sentencing subject to Petitioner successfully completing the conditions of his “non-adjudicated probation.”  IG Ex. 3 at 1.  The Amended Judgment states that Petitioner “is hereby sentenced to a term of Five (5) years under the direction, supervision, custody and control of the Mississippi Department of Corrections with said Five (5) years suspended, and to be placed on Five (5) years supervised non-adjudicated probation with the Mississippi Department of Corrections.”  IG Ex. 3 at 1-2.  The state court retained jurisdiction to resentence Petitioner if he violated his probation.  IG Ex. 3 at 2.  The remaining counts of the indictment were dismissed.  IG Ex. 3 at 3. 

b.  Analysis

The IG cites section 1128(a)(3) of the Act as the basis for Petitioner’s mandatory exclusion.  The statute requires the Secretary to exclude from participation in any federal health care program any individual or entity: 

1. Convicted of a criminal offense under federal or state law;
2. The criminal offense occurred after August 21, 1996 (the date of enactment of the Health Insurance Portability and Accountability Act of 1996);
3. The criminal offense was committed
   1.  in connection with the delivery of a health care item or service, or
   2. with respect to any act or omission in a health care program other than Medicare or Medicaid, that is operated or financed by the federal, state, or a local government;
4. The criminal offense was a felony; and
5. The criminal offense was related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

Act § 1128(a)(3); 42 C.F.R. § 1001.101(c).  When the elements of section 1128(a)(3) of the Act are satisfied, Congress mandates exclusion and the Secretary and I have no discretion not to exclude.  I conclude that the elements that trigger mandatory exclusion under section 1128(a)(3) of the Act are satisfied in this case. 

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There is no dispute that the offense to which Petitioner pleaded guilty occurred after August 21, 1996.  Petitioner does not dispute that his offense involved the theft of drugs from his employer or that he diverted the drugs to his personal use.  Petitioner does not dispute that the theft was in connection with the delivery of a health care item or service under a health care program other than Medicare or Medicaid operated or financed by a federal, state, or local government agency.  I conclude that the undisputed facts establish the required connection, rational link, or nexus between Petitioner’s criminal offense and the delivery of a health care item or service, in a health care program other than Medicare or Medicaid.  W. Scott Harkonen, MD, DAB No. 2485 (2012), aff’d, Harkonen v. Sebelius, No. C 13-0071 PJH, 2013 WL 5734918 (N.D. Cal. Oct. 22, 2013). 

Petitioner argues, however, that mandatory exclusion pursuant to section 1128(a)(3) of the Act is not triggered because he was not convicted of any offense because the state court deferred acceptance of his guilty plea and sentencing based on that plea and subsequently dismissed the charge after he successfully completed the court-ordered probation.  RFH; P. Br. at 1, 3, 5-6. 

Petitioner’s argument that he was not convicted of the criminal offense must be resolved against him as a matter of law.  Pursuant to section 1128(i) of the Act, an individual is convicted of a criminal offense when: 

1. a judgment of conviction has been entered by a federal, state, or local court whether or not an appeal is pending or the record has been 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 a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.  

42 U.S.C. § 1320a-7(i)(1)-(4); 42 C.F.R. § 1001.2.  There is no dispute that the state court deferred acceptance of Petitioner’s guilty plea and sentencing on that plea as permitted by Mississippi law (Miss. Code Ann. § 99-15-26(1)(a)).  There is also no dispute that the state court lifted Petitioner’s probation and dismissed the charge against Petitioner without accepting his guilty plea to the offense or entering a judgment of conviction.  Petitioner cites no authority that supports a conclusion that his deferred adjudication did not amount to a conviction under section 1128(i)(4) of the Act.  Section 1128(i) of the Act specifically provides that one is convicted upon a deferred adjudication.  The Board has consistently rejected arguments like Petitioner’s concluding that it is the definition of

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conviction in the Act that controls, even if, under state law one might not be convicted based on entering a deferred adjudication or similar arrangement.  Henry L. Gupton, DAB No. 2058 at 3-6 (2007).  Accordingly, I conclude Petitioner was convicted within the meaning of the Act. 

Accordingly, I conclude that the elements necessary to trigger an exclusion pursuant to section 1128(a)(3) of the Act are satisfied, and Petitioner’s exclusion is required by the Act. 

Petitioner argues that the IG’s exclusion of Petitioner is arbitrary and capricious as it serves no purpose in this case.  P. Br. at 5.  However, Congress mandates exclusion under section 1128(a)(3) of the Act when that provision is triggered as it is in this case because all the elements are satisfied.  Congress granted no discretion to the IG or the Secretary not to exclude in a case such as this.  Therefore, the IG exercised no discretion, and the exclusion action cannot be arbitrary or capricious if the elements of section 1128(a)(3) of the Act are satisfied as they are in this case. 

4.  Section 1128(a)(3) 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)(3) 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.  There is no review of the reasonableness of the five-year period of exclusion or any discretion to impose a lesser period.  42 C.F.R. §§ 1001.102(a), 1001.2007(a)(2). 

5.  Petitioner’s exclusion is effective 20 days after the IG’s notice of exclusion. 

Petitioner points out that the IG exclusion occurred four years after the conduct for which Petitioner was charged and convicted.  P. Br. at 2-3.  Petitioner does not specifically argue that this may be grounds for some relief or cite any authority to support an argument that there should be some relief due to delayed action by the IG.  The evidence shows that the grand jury indictment was not filed until August 25, 2020 (IG Ex. 2), and the Amended Judgment was not entered by the state court until August 11, 2021 (CMS Ex. 3).  There is no dispute that the IG did not notify Petitioner of his exclusion until October 31, 2022.  However, the regulation is clear that the effective date of Petitioner’s exclusion is 20 days after the date of the IG’s notice of exclusion, and the IG, the Board, and I have no discretion to change the effective date.  42 C.F.R. § 1001.2002(b); Shaikh M. Hasan, M.D., DAB No. 2648 at 9 (2015) aff’d Hasan v. HHS, No. 1-15-cv-4687, ECF No. 27 (E.D.N.Y. July 10, 2017). 

6.  No equitable relief is available in this forum. 

Petitioner argues that he had rehabilitated himself prior to the exclusion by the IG, he took full responsibility for his acts, he completed probation ordered by the state court, he completed monitoring directed by the Mississippi and Arkansas nurse licensing authority, he has an unencumbered nursing license, he was terminated from his good job as a result of the exclusion, he has the reputation of being an excellent nurse, and he is unemployable in health care due to his exclusion.  P. Br. at 1, 3-5.  Petitioner argues that these are mitigating factors.  However, as already noted, the reasonableness of the period of exclusion is not at issue in this case.  Mitigating factors are not relevant because exclusion under section 1128(a)(3) of the Act is mandated by Congress when the elements are met.  Mitigating factors established by 42 C.F.R. § 1001.102(c), none of which are alleged by Petitioner, may only be considered if the IG cites aggravating factors to extend the period of exclusion beyond five years.  42 C.F.R. § 1001.102(c). 

Petitioner’s arguments may be construed as a request for equitable relief, but I have no authority to grant such relief.  Matthew J. Girardy, DMD, DAB No. 2987 at 7 (2020).  Congress required Petitioner’s exclusion pursuant to section 1128(a)(3) and that requirement is binding upon the Secretary and me.  I am bound to follow the Act and the Secretary’s regulations.  42 C.F.R. § 1005.4(c)(1). 

III.    Conclusion

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for five years effective November 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.  Citations are to the 2022 revision of the Code of Federal Regulations (C.F.R.), unless otherwise stated. 

²   The pronouns he, his, and him are used in this decision as Petitioner indicated no other preference.