Merissa Griffin Waddy, CR6303 (2023)

DECISION

Petitioner, Merissa Griffin Waddy, owned and operated an Arkansas business that participated in the Medicaid program, providing in-home personal care and attendant services.  She was charged with felony Medicaid fraud, and the Arkansas Office of the Inspector General suspended her business’s participation in the Medicaid program.  She then set up a second home care business – forging signatures and misappropriating the personal identifying information of third parties – and enrolled that business in the Medicaid program.  She was caught and again charged with felony Medicaid fraud, as well as forgery and identity fraud, both felonies.  

She pleaded guilty to misdemeanor counts of Medicaid fraud, illegal Medicaid participation, and possession of an instrument of crime.  The state court sentenced her to concurrent one-year suspended sentences, with one day of jail credit and ordered her to pay to the Arkansas Medicaid Program Trust Fund $64,746.70 in restitution for the Medicaid fraud conviction and $35,253.30 for the other two convictions.  

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Based on her convictions, the Inspector General (IG) has excluded Petitioner for 14 years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(1) of the Social Security Act (Act). 

Petitioner appeals.  

For the reasons discussed below, I find that the IG properly excluded Petitioner and that the 14-year exclusion falls within a reasonable range. 

Background

In a letter dated February 28, 2023, the IG notified Petitioner that she was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of 14 years because she had been convicted of criminal offenses “related to the delivery of an item or service under Medicare or a State health care program.”  The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.  IG Ex. 1.  

Petitioner timely requested review. 

Exhibits.  The IG has submitted a written brief (IG Br.) with 13 exhibits (IG Exs. 1-13).  Petitioner has submitted a written brief (P. Br.) with seven exhibits (P. Exs. 1-7), plus a copy of the Arkansas State Board of Health Rules for Home Health Agencies.  

In the absence of any objections, I admit into evidence IG Exs. 1-13 and P. Exs. 1-7. 

Hearing on the written record.  The parties agree that an in-person hearing is not necessary, so the case may be decided on the written record.  IG Br. at 10; P. Br. at 7. 

Discussion

1. Petitioner must be excluded from program participation for a minimum of five years because she was convicted of a criminal offense related to the delivery of an item or service under the Arkansas Medicaid program.  Act § 1128(a)(1).¹

Section 1128(a)(1) of the Act mandates that the Secretary of Health and Human Services exclude from program participation an individual who has been convicted, under federal or state law, of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  See 42 C.F.R. § 1001.101(a). 

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The crimes.  Petitioner Waddy (nee Griffin) owned and operated “Angel’s On Duty,” a Medicaid provider, located in Dumas, Arkansas, that offered in-home personal care and attendant care services.  A local clinic complained to the Arkansas IG that she was asking its physicians to sign assessments for clinic patients, authorizing the services she provided, even though the patients had not asked for the services and did not need them. 

The Arkansas IG audited the records of Angel’s on Duty.  The auditors found photocopies of a nurse’s signature on patient assessment forms.  Petitioner claimed that the nurse “felt like it’d be easier” to have her signature on the forms before she did the assessments “to help speed up the process.”  Medicaid rules require that recipients be assessed by a registered nurse prior to being authorized for personal or attendant care services.  IG Ex. 3 at 1-2. 

The auditors also discovered assessments that the nurse purportedly performed in Dumas when, at the time claimed, she was working for different businesses in Little Rock, 85 miles away.  She could not have conducted the claimed assessments.  Some assessments lacked any nurse signature, although services for the recipients were billed to Medicaid.  The auditors found other instances where Petitioner used obviously falsified timesheets to bill Medicaid for personal care and attendant services, and the auditors concluded that Medicaid had paid Petitioner at least $74,456.80 for the fraudulent claims.  Id. 

Petitioner was charged with Medicaid fraud, in violation of Ark. Code Ann. § 5-55-111, a felony.  On January 9, 2019, the Pulaski County Court issued a warrant for her arrest.  IG Ex. 11. 

While the Medicaid fraud charge was pending, the Arkansas Medicaid Agency suspended Petitioner and Angel’s on Duty from participating in the Medicaid program.  IG Ex. 7 at 2. 

Five months into her Medicaid suspension, Petitioner set up another home care business, “Precious Jewels In Home Care,” using the name and personal information of a client from Petitioner’s tax preparation service, without the client’s knowledge or consent.  Petitioner forged the woman’s signature on business documents and enrolled Precious Jewels in the Medicaid program.  From September 5, 2018, through May 31, 2019, Medicaid paid $152,600.07 to Precious Jewels.  IG Ex. 7 at 2-3, 6-7. 

Petitioner was subsequently charged with Medicaid fraud, in violation of Ark. Code Ann. § 5-55-111; forgery, in violation of Ark. Code Ann. § 5-37-201; and identity fraud, in violation of Ark. Code Ann. § 5-37-227.  All are felonies.  On September 10, 2019, the Pulaski County Court issued a second warrant for her arrest.  IG Ex. 12. 

The convictions.  On October 24, 2022, Petitioner pleaded guilty to three misdemeanors:  Medicaid fraud (Ark. Code Ann. § 5-55-103(c)); illegal Medicaid participation (Ark.

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Code Ann. § 5-55-115(b)(1)(A)); and possession of an instrument of crime (Ark. Code Ann. § 5-73-102).  The Court accepted her pleas.  IG Exs. 2, 5, 9, 10; P. Ex. 1 at 10, 11.  Based on the Medicaid fraud conviction, the Court ordered her to pay $64,746.70 in restitution to the Medicaid Program Trust Fund.  IG Ex. 2.  Based on the other two convictions, the Court ordered her to pay $35,253.30 to the Medicaid Program Trust Fund.  IG Ex. 6.  The Court sentenced her to concurrent one-year suspended sentences, with one day of jail credit.  IG Exs. 4, 5, 13; P. Ex. 1 at 10, 12-13. 

In pleading guilty, Petitioner “voluntarily” consented to her “exclusion as a provider from all Arkansas and Federal healthcare programs for a period of twenty (20) years.”  IG Ex. 9 at 2; IG Ex. 10 at 2 (emphasis in original).  

Petitioner’s convictions thus fall squarely within the statutory and regulatory definitions of “conviction,” and her convictions for Medicaid fraud are obviously related to the delivery of services under a state health care program.  She is therefore subject to exclusion. 

Petitioner’s defenses.  Notwithstanding her guilty pleas and her admissions, in open court, that she was, in fact, guilty, Petitioner now claims that she did not commit any crimes.  She argues that she simply made some mistakes, and that “no evidence” proves that she falsified time sheets.  P. Br. at 1-2.  Having pleaded guilty, Petitioner may not use this forum to argue that she did not, in fact, commit the crimes.  The regulations preclude such a collateral attack on an underlying conviction: 

When the exclusion is based on the existence of a criminal conviction . . .  or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction . . . is not reviewable, and the individual or entity may not collaterally attack it, either on substantive or procedural grounds, in this appeal. 

42 C.F.R. § 1001.2007(d); Yolanda Hamilton, M.D., DAB No. 3061 at 9-10 (2022); Funmilola Mary Taiwo, DAB No. 2995 at 8 (2020); Delores L. Knight, DAB No. 2945 at 9 (2019); Marvin L. Gibbs, Jr., M.D., DAB No. 2279 at 8-10 (2009); Roy Cosby Stark, DAB No. 1746 (2000). 

Because she was convicted of a crime related to the delivery of services under a state health care program, Petitioner must be excluded from program participation.  An exclusion brought under section 1128(a)(1) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  I next consider whether the length of the exclusion, beyond five years, falls within a reasonable range.  See Edwin L. Fuentes, DAB No. 2988 at 8-9 (2020); Hussein Awada, M.D., DAB No. 2788 at 5-6 (2017). 

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2. Based on the aggravating factors and no mitigating factor, the 14-year exclusion falls within a reasonable range.

Even though Petitioner openly consented to a 20-year exclusion from the Arkansas Medicaid program and federal health care programs, she now argues that a 14-year exclusion is unreasonable.  Based on the aggravating factors here and no mitigating factor, I find that a 14-year exclusion is reasonable, and perhaps even, as the IG suggests, “generous.”

Among the factors that may serve as a basis for lengthening the period of exclusion are the three that the IG relies on in this case:  1) the acts resulting in the conviction, or similar acts, caused a government program or another entity financial losses of $50,000 or more; 2) the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more; and 3) the individual has been the subject of any other adverse action by any federal, state, or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposing the exclusion.  42 C.F.R. § 1001.102(b).  The presence of an aggravating factor or factors, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.  “[S]imply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness.”  Awada, DAB No. 2788 at 10. 

On this issue, Petitioner mainly reiterates her innocence and complains about the attorney who allowed her to plead guilty.  P. Br. at 6.  I find that the aggravating factors in this case definitively establish that Petitioner is untrustworthy and more than justify a substantial increase in the length of her exclusion beyond the five-year minimum. 

Program financial loss (42 C.F.R. § 1001.102(b)(1)).  The sentencing court ordered Petitioner to pay $100,000 ($64,746.70 + $35,253.30 = $100,000) in restitution to the State Medicaid program.  IG Exs. 2, 6.  Restitution has long been considered a reasonable measure of program losses.  Awada, DAB No. 2788 at 7; Farzana Begum, DAB No. 2726 at 16 n.8 (2016), aff’d, Begum v. Hargan, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 9 (2011). 

As I explained in an earlier case, an exclusion is designed to protect program integrity and program beneficiaries: 

[T]he regulation recognizes [that] the amount of program losses reflects, in part, the seriousness of the individual’s crime and thus the level of threat he poses to program integrity.  While the process is inexact, so long as the IG reasonably translates the aggravating factor into an increase in the period of exclusion, I must affirm [the] determination.  That a corrupt practitioner and the schemes in which he participates can cause health care programs

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substantial losses underscores the importance of excluding the unscrupulous.  Over time, health care programs simply cannot withstand these losses. 

Brandon Michael Coburn, DAB CR5247 at 4 (2019).  

Financial losses of even one dollar over the $50,000 threshold justify extending the length of the period of exclusion.  Fuentes, DAB No. 2988 at 13.  Here, the amount is twice the threshold amount, which justifies increasing the period of exclusion beyond the five-year minimum.  See Shaun Thaxter, DAB No. 3053 at 31-32 (2021); Robert Kolbusz, M.D., DAB No. 2759 at 6-7 (2017); Jeremy Robinson, DAB No. 1905 (2004); Donald A. Burstein, Ph.D., DAB No. 1865 (2003). 

Duration of criminal conduct (42 C.F.R. § 1001.102(b)(2)).  We consider the length of Petitioner’s participation in the criminal scheme in order to distinguish the individual whose lapse in integrity is short-lived from those who display a lack of integrity over a longer period of time.  “Participation in, or even knowing but silent acquiescence in, a continuing fraudulent scheme that could be expected to cause repeated misrepresentations and repeated harm over a period of time evidences a continuing lack of integrity.”  Burstein, DAB No. 1865 at 8.  

I agree with the IG that Petitioner’s criminal scheme to participate illegally in the Medicaid program began on May 23, 2018, when, based on stolen information, she formed Precious Jewels.  It ended on June 3, 2019, more than a year later.  This justifies increasing the period of her exclusion.  IG Ex. 13 at 1.  I find it particularly noteworthy that this second bout of criminal activity followed an earlier period of criminal conduct.  For more than four months – August 1, 2017, to December 8, 2017 – Petitioner engaged in Medicaid fraud.  IG Ex. 5 at 1.  While Medicaid fraud charges were pending, she set up a fraudulent company and illegally participated in the Medicaid program.  She thus engaged in criminal activity for almost a year and a half.  These are the actions of “a singularly untrustworthy individual,” and, by themselves, justify an exclusion period far longer than the five-year minimum.  See Sheila E. Novin, DAB CR1368 (2005). 

Other adverse actions (42 C.F.R. § 1001.102(b)(9)).  Citing her guilty pleas to illegal participation in the Medicaid program and possession of an instrument of crime, the State IG excluded Petitioner and Angel’s on Duty from participating, in any capacity, in the Arkansas Medicaid program for a period of 20 years.  IG Ex. 8.  Thus, based on the same set of circumstances that serves as the basis for imposing this exclusion, Petitioner was subject to an additional adverse action by a state board, and the IG may apply this factor to extend the period of her exclusion. 

No mitigating factors.  The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting

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financial loss to the program was less than $5,000; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  Characterizing the mitigating factor as “in the nature of an affirmative defense,” the Board has ruled that Petitioner has the burden of proving any mitigating factor by a preponderance of the evidence.  Barry D. Garfinkel, M.D., DAB No. 1572 at 8 (1996). 

Petitioner has not claimed any mitigating factor to offset the significant aggravating factors present in this case. 

Based on the three aggravating factors and the absence of any mitigating factor, I must determine whether the exclusion period imposed by the IG falls within a reasonable range.  So long as that period falls within a reasonable range, my role is not to second-guess the IG’s judgment.  Jeremy Robinson, DAB No. 1905 at 5 (ALJ review must reflect the deference accorded to the IG by the Secretary).  A “‘reasonable range’ refers to a range of exclusion periods that is more limited than the full range authorized by the statute [i.e., from a minimum of five years to a maximum of permanent] and that is tied to the circumstances of the individual case.”  Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 at 11 (2002) (citing Gary Alan Katz, R.Ph., DAB No. 1842 at 8 n.4 (2002)).  The goal is to protect federal health care programs and beneficiaries from potential harm.  Joann Fletcher Cash, DAB No. 1725 (2000). 

The underlying facts here more than justify a 14-year exclusion.  Petitioner’s crimes were one of many that erode the financial viability of the Medicaid program.  She engaged in Medicaid fraud for four months, and, when caught, she continued to defraud by setting up a bogus enterprise that illegally participated in the program.  She has been excluded from the state program for twenty years.  Petitioner has shown a remarkable lack of integrity and poses a significant threat to health care programs.  I therefore conclude that the 14-year exclusion falls within a reasonable range.  

Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs. 

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So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Joann Fletcher Cash, DAB No. 1725 at 7 (citing 57 Fed. Reg. 3298, 3321 (1992)).  I find that the 14-year exclusion falls within a reasonable range. 

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Endnotes

¹  My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.