DECISION

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

I.    Case Background and Procedural History

By later dated August 31, 2022, the IG notified Petitioner of her 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 took this action based on Petitioner’s felony conviction of a criminal offense in the United States District Court, Middle District of Florida, Tampa Division (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, or with respect to any act or omission in a health care program (other than Medicare and a State health care program)

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operated by, or financed in whole or in part, by any Federal, State or local government agency.  Id. at 1. 

Petitioner timely sought review of her exclusion before an administrative law judge (ALJ) in the Civil Remedies Division.  Upon my designation to hear and decide this case,  I held a pre-hearing conference by telephone with counsel for both parties on December 1, 2022, the substance of which is summarized in my December 2, 2022 Order Summarizing Pre-hearing Conference (Summary Order).  See 42 C.F.R. § 1005.6.  Among other things, I directed the parties to file pre-hearing briefs articulating their respective arguments as well as identifying witnesses and exhibits in support thereof.  Summary Order at 3-4. 

In accordance with my Summary Order, the IG filed a brief (IG Br.) and six exhibits (IG Exs. 1-6).  Petitioner filed a brief (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 indicated she believed a hearing to be necessary and identified herself as a witness.  P. Br. at 2-3.  She submitted her written direct testimony as a pre-hearing exhibit.  P. Ex. 1.  The IG objected to the inclusion in the record of Petitioner’s written direct testimony regarding her suspension by the U.S. Department of Labor.  IG Reply at 2-3.  I agree Petitioner’s testimony concerning her suspension by another agency has little probative value to whether the IG properly excluded her under 42 U.S.C. § 1320a-7(a)(3).  But it is relevant to her argument that the IG should not have been able to exclude her for a period beginning on a date after she had already been excluded by a different federal agency under a different authority, which I address herein.  Her testimony is relevant for this limited purpose.  I therefore overrule the IG’s objection. 

The IG proposed no witnesses and does not believe a hearing to be necessary.  IG Br. at 7-8.  Neither party has objected to the other party’s remaining exhibits.  I therefore admit all proposed exhibits into the record.  42 C.F.R. § 1005.8(c); Civ. Remedies Div. P. § 14(e). 

I advised the parties 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).  The IG has not sought to cross-examine Petitioner.  IG Reply at 2-3.  Accordingly, there is no need to hold a hearing and I proceed to a decision based on the briefs submitted and the exhibits of record.  Civ. Remedies Div. P. § 19(d). 

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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)(3).  See 42 C.F.R. § 1001.2007(a)(3). 

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 Medicare, Medicaid, and all federal health care programs any individual who 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). 

An individual has been “convicted” of a criminal offense within the meaning of the Act when there has been “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).  The Act does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis for 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 IG may extend the period of exclusion 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 are applied by the IG to extend an exclusion period beyond 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).  The IG bears the burden of proof as to the basis for Petitioner’s exclusion and to any aggravating factors applied to increase the exclusion period, while Petitioner bears the burden of proof as to affirmative defenses or mitigating factors.  42 C.F.R. § 1005.15(b). 

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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. 

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

There is no dispute that Petitioner timely sought appeal of an exclusion action taken against her 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). 

2. 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.

In May 2013, Petitioner established a limited liability company that operated as a medical clinic for individuals who received healthcare benefits through the Department of Labor’s Office of Workers’ Compensation Programs (OWCP).  IG Ex. 4 at 19.  Petitioner was the company’s managing and authorized member and worked as the medical clinic’s on-site nurse practitioner.  Id.  Petitioner enrolled the company in OWCP and retained outside physicians to submit claims for reimbursement for health care services allegedly provided to the program’s beneficiaries.  Id.  Petitioner altered the physicians’ bills or created false or fraudulent bills to receive payment for more extensive healthcare services than were actually provided.  Id. at 19-20.  Petitioner’s fraudulent scheme resulted in approximately $334,874 in payments to her medical clinic by OWCP.  Id. at 20-21. 

The United States charged Petitioner by indictment on December 17, 2019.  P. Ex. 2 at 1.  On February 11, 2020, the government filed a superseding indictment charging her with eleven counts of health care fraud in violation of 18 U.S.C. § 1347 and three counts of aggravated identity theft in violation of 18 U.S.C. § 1028A.  IG Ex. 3 at 1, 7.  The government alleged Petitioner executed her scheme between approximately January 9, 2015, through and including the February 11, 2020 superseding indictment.  Id. at 3.

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Petitioner pleaded guilty to two counts of health care fraud in violation of 18 U.S.C. § 1347 on June 22, 2021.  IG Ex. 4.  The District Court accepted Petitioner’s guilty plea on July 7, 2021 and on December 14, 2021, sentenced Petitioner to probation and restitution.  IG Ex. 5; IG Ex. 6. 

Petitioner does not dispute her conviction for a felony committed after August 21, 1996.  P. Br. at 1.  The IG has established this element by a preponderance of the evidence. 

2. Petitioner’s criminal offense is related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct within the meaning of section 1128(a)(3) of the Act. 

The Act requires Petitioner to be excluded from participation in federal programs if she was convicted of an offense 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). 

Here, Petitioner’s offense of conviction relates to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct on its face.  She pleaded guilty to healthcare fraud in violation of 18 U.S.C. § 1347, admitting she “acted willfully and intended to defraud” when executing or attempting to execute “a scheme or artifice to defraud a health care benefit program, or to obtain money or property owned by, or under the custody or control of, a health care benefit program by means of false or fraudulent pretenses, representations, or promises,” used “false or fraudulent pretenses, representations, or promises related to a material fact,” and did so “in connection with the delivery of or payment for health care benefits, items, or services.”  IG Ex. 4 at 2. Finally, Petitioner does not dispute her conviction for an offense that requires exclusion under the Act.  P. Br. at 2.  I therefore 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 criminal offense was committed in connection with the delivery of a healthcare item or service. 

The Departmental Appeals 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

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at 7 (2012) (citing Ellen L. Morand, DAB No. 2436 at 9 (2012); Charice D. Curtis, DAB No. 2430 at 5 (2011)). 

There is no dispute Petitioner’s criminal conduct occurred in connection with the delivery of a healthcare item or service and that the IG was required to exclude her as a result.  P. Br. at 2.  She pleaded guilty to two counts of healthcare fraud in violation of 18 U.S.C. § 1347.²  IG Ex. 4; IG Ex. 5.  That offense requires criminal conduct occur “in connection with the delivery of or payment for health care benefits, items, or services.”  18 U.S.C. § 1347(a)(2).  Petitioner’s guilty plea contains an admission that her fraudulent activities occurred “in connection with the delivery of or payment for health care benefits, items, or services.”  IG Ex. 4 at 2. 

The specific conduct to which Petitioner pleaded bears out this connection.  Petitioner used her medical clinic to file claims for reimbursement for certain health care services provided to beneficiaries of OWCP.  IG Ex. 3 at 4; IG Ex. 4 at 19-20.  She altered or fabricated physicians’ bills to make false or fraudulent claims to a federal healthcare benefit program.  IG Ex. 3 at 4-6; IG Ex. 4 at 19-21.  Petitioner’s fraudulent scheme yielded approximately $334,874 in payments to her medical clinic by OWCP.  Id.  Petitioner’s fraudulent reimbursement claims have an obvious connection to the delivery of a health care item or service.  I therefore conclude her offense of conviction occurred in connection with the delivery of a healthcare item or service. 

3. 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 a basis exists to exclude Petitioner under 42 U.S.C. § 1320a-7(a)(3), 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. 

4. I have no authority to modify the effective date of Petitioner’s period of exclusion. 

Petitioner argues the IG’s determination to exclude her as of August 31, 2022 is arbitrary and capricious.  P. Br. at 3, 5.  She explains the U.S. Department of Labor suspended her from acting in or receiving benefits from any federal contract or program from January 21, 2020 through January 20, 2023.  Id. at 4.  She claims the IG’s selection of August 31,

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2022 as the effective date of her exclusion results in a total exclusion period of January 21, 2020 through August 31, 2027.  Id. at 6-8.  Petitioner relies on the Department of Labor’s characterization of the suspension and debarment action against her taken under 2 C.F.R. Part 180 as “effective and reciprocal throughout the federal government.”  P. Br. at 4.  In other words, Petitioner contends the Labor Department’s suspension and debarment action precludes the IG from taking a similar action against her under a different authority because that action had effectively already excluded her from participating in federal healthcare programs since January 21, 2020.  Id. at 4-5. 

Petitioner also argues the IG could have sought to exclude her when she was suspended by another federal agency but instead waited to begin the exclusion process until February of 2022 and even then, waited six more months to actually exclude her.  Id. at 7.  For these reasons, Petitioner requests that I modify the duration of her exclusion to run concurrently with the debarment imposed by the Department of Labor on January 21, 2020.  Req. for Hearing at 2-3; P. Br. at 7. 

Petitioner makes no effort to provide statutory or regulatory authority for her claim that the IG should have set the effective date of her exclusion to coincide with her debarment by the Department of Labor.  First, Petitioner’s guilty plea was not accepted until July 7, 2021.  The Act does not authorize the IG to exclude an individual or entity absent the existence of a qualifying conviction.  The IG simply had no basis to seek Petitioner’s exclusion under the Act for the period of time before she actually pleaded to a crime.  42 U.S.C. § 1320a-7(a)(3). 

Second, the Act does not contemplate the possibility of retroactive exclusions, as Petitioner demands.  U.S.C. § 1320a-7(c)(2) (providing “such an exclusion shall be effective with respect to services furnished to an individual on or after the effective date of the exclusion.”) (emphasis added).  In other words, Congress intended exclusion to inhibit the ability of an individual or entity to furnish services going forward from the effective date of exclusion.  It would make little sense for exclusion periods to begin in the past when such exclusion would have no possible effect. 

Finally, the Act does not set forth parameters for the establishment of an effective date but instead allows the government to do so by regulation, so long as it provides reasonable notice to the public and the individual or entity being excluded.  42 U.S.C. § 1320a-7(c)(1).  The regulations implemented under the Act make clear that the exclusion period is triggered by the date of the IG’s notice of exclusion, not the date of conviction or other penalty that may be imposed by another federal or state agency for the same criminal conduct.³ 42 C.F.R. § 1001.2002(b) (“The exclusion will be effective

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20 days from the date of the notice.”).  This stark language makes plain that I have no authority to modify the IG’s selection of an effective date for exclusion.  Thomas Edward Musial, DAB No. 1991 (2005), citing Douglas Schram, R.PH., DAB No. 1372 at 11 (1992) (“Neither the ALJ nor this Board may change the beginning date of Petitioner’s Exclusion.”); David D. DeFries, DAB No. 1317 at 6 (1992) (“The ALJ cannot . . . decide when [the exclusion] is to begin.”); Richard G. Philips, D.P.M.,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)  

I recognize Petitioner makes a somewhat more complex argument than that contemplated by the Act or its implementing regulations – that action taken by one federal agency under a certain authority should estop another federal agency from taking a similar action under a different authority.  But Petitioner has provided no legal basis upon which I could rely to conclude Congress did not intend to permit such an outcome.  It is in fact common for healthcare providers to be subject to actions taken by different governmental entities for the same conduct.  The multitude of ways a healthcare practitioner can be subject to discipline or limitation of the ability to treat patients reflects the significant amount of trust placed in them.  Petitioner’s conduct here has unsurprisingly subjected to her to what can only be described as proportional consequences.  To the extent Petitioner finds her exclusion period unfair, I observe the IG declined, for whatever reason, to apply at least two readily apparent aggravating factors in this case to extend Petitioner’s period of exclusion beyond the statutory minimum period of five years. 

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  18 U.S.C. § 1347 makes it a felony to knowingly and willfully execute, or attempt to execute, a scheme or artifice, “1) to defraud any health care benefit program; or 2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services.”

³  This leaves open the question of how long the IG can reasonably wait to issue a notice of exclusion to an individual or entity upon discovering the existence of an eligible conviction.  Unfortunately, the Act is silent on this issue and I am precluded by regulation from modifying the effective date, even to account for unexplained or unreasonable delays caused by the IG.  I do not reject Petitioner’s contention that the IG’s unfettered ability to issue a notice of exclusion at any time after she becomes aware of a criminal conviction could be exercised arbitrarily and capriciously in a manner that offends the notion of due process.  I am simply unable to adjudicate that claim.