Janice Cassandra Wrenn, CR6305 (2023)

DECISION

Respondent, the Inspector General of the U.S. Department of Health and Human Services (the IG), excluded Petitioner, Janice Cassandra Wrenn, from participation in Medicare, Medicaid, and all other federal health care programs for 12 years pursuant to Section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  Petitioner challenges the IG’s exclusion action.  For the reasons stated below, I affirm the IG’s exclusion determination. 

I.  Procedural History

By letter dated September 30, 2022, the IG notified Petitioner of her exclusion from participation in Medicare, Medicaid, and all other federal health programs for a minimum period of 12 years pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)).  The IG explained she took this action based on Petitioner’s conviction in an Oklahoma state court (State Court) for a criminal offense related to the delivery of an item or service under Medicare or a state health care program, including the performance of management or administrative services relating to the delivery of such items or services.  IG Ex. 1 at 1. 

Petitioner timely sought review by an Administrative Law Judge (ALJ) in the Civil Remedies Division and I was designated to hear and decide this case.  I held a pre-

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hearing telephone conference on December 7, 2022, the substance of which is summarized in my December 12, 2022 Order Summarizing Pre-hearing Conference and Setting Briefing Schedule (Summary Order).  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 5-6. 

The IG filed a brief (IG Br.) and three proposed exhibits (IG Exs. 1-3) while Petitioner filed a brief (P. Br.) and 12 proposed exhibits (P. Exs. 1-12).¹ The IG filed a reply on April 3, 2023 (IG Reply).  On April 24, 2023, Petitioner filed a sur-reply, styled as a “response to IG Brief” (P. Sur-reply).  Petitioner did not seek leave to do so.  Because Petitioner is proceeding without counsel and unfamiliar with the conventions of legal practice, I will not strike her unsanctioned filing and have considered it for purposes of this decision.  

II.  Admission of Exhibits and Decision on the Record

In her reply, the IG objected to Petitioner’s Exhibits 1, 2, 3, 4, 6, 7, 8, 9, 10, and 12, claiming them to be irrelevant or incomplete.  While the IG is generally correct as to the probative value of these documents, I overrule her objections.  Petitioner’s exhibits are at least minimally relevant to provide necessary background to consider and reject the substantive arguments she makes before me.  IG Exhibits 1 through 3 and Petitioner’s Exhibits 1 through 12 are admitted into the record.  

I advised the parties I would hold an in-person hearing only if a party submitted written direct testimony from a witness and the opposing party asked to cross-examine that witness, or if a party identified an adverse witness and made a valid subpoena request consistent with the requirements found at 42 C.F.R. § 1005.9.  Summary Order at 5. 

Neither party submitted the written direct testimony of proposed witnesses the opposing party could seek to cross-examine.  I therefore decide this case on the written record before me.  Summary Order at 6; see Civ. Remedies Div. Pro. § 19(d). 

III.  Issues

Whether the IG has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs and, if so, whether the 12-year period of exclusion selected by the IG is unreasonable.  See 42 C.F.R. § 1001.2007(a)(1). 

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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.  The rights of both the sanctioned party and the IG to participate in a hearing are specified by 42 C.F.R. § 1005.3. 

Section 1128(a)(1) of the Act requires the Secretary to exclude from participation in federal health care programs “[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under subchapter XVIII of this chapter or under any State health care program.”  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); see also 42 C.F.R. § 1001.101(a). 

For purposes of exclusion, the Act deems an individual 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 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 nolo contendere is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  Act § 1128(i) (42 U.S.C. § 1320a-7(i)); 42 C.F.R. § 1001.2.  The statute does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis of 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 for a minimum five-year exclusion period when imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)).  Exclusion is effective 20 days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The period of exclusion may be extended based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b).  Mitigating factors identified by regulation may be considered to reduce the period of exclusion only where aggravating factors have first been applied to extend that period more than 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).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors; the IG bears the burden on all other issues.  Summary Order at 4; 42 C.F.R. § 1005.15(c). 

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. 

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1. I have jurisdiction to hear this case.

Petitioner timely requested a hearing.  I therefore have jurisdiction to hear and decide this case.  See 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also Act § 1128(f)(1) (42 U.S.C. § 1320a-7(f)(1)). 

2. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(1) of the Act. 

Exclusion from participation in Medicare, Medicaid, and all federal health care programs is mandated by section 1128(a)(1) of the Act where an individual has been convicted, under Federal or State law, of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)); 42 C.F.R. § 1001.101(a).  Petitioner concedes she was convicted of a criminal offense but claims it was not related to the delivery of an item or service under Medicare or any state health care program.  P. Br. at 2-3.  As explained below, I find the IG has established by a preponderance of the evidence that Petitioner’s offense of conviction warrants exclusion pursuant to section 1128(a)(1) of the Act. 

1. Petitioner was convicted of a criminal offense within the meaning of section 1128(a)(1) of the Act.

On June 20, 2016, Oklahoma’s Attorney General charged Petitioner by information with five counts of Medicaid fraud and one count of conspiracy to commit Medicaid fraud.  IG Ex. 2.  According to that information, Petitioner and her co-defendants willfully and knowingly caused false claims for payment to be submitted to Oklahoma’s Medicaid program from April 24 to 30, 2012, December 18 to 26, 2012, and May 2013 to January 2015.  Id. at 1.  Petitioner and her co-defendants also willfully and knowingly solicited a pecuniary benefit in connection with services claimed to be payable by the Oklahoma Medicaid program between June 6, 2013 and August 20, 2014, failed to maintain records for six years after having received payment for a service from the Oklahoma Medicaid program from June 10, 2009 to January 30, 2013, and conspired to commit Medicaid fraud by submitting false claims for reimbursement from May 16, 2013 to August 20, 2014.  Id. at 1-2.  On December 10, 2021, a jury found Petitioner guilty of each count in the information against her.  IG Ex. 3 at 1.  On March 31, 2022, the State Court imposed judgment against Petitioner and ordered her to pay $393,934 in restitution.  Id. at 1, 4.  I conclude Petitioner was convicted of a criminal offense within the meaning of the Act.  Act § 1128(i)(1), (2) (42 U.S.C. § 1320a-7(i)(1), (2)); 42 C.F.R. § 1001.2. 

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2. Petitioner’s criminal offense is related to the delivery of an item or service under Medicare or a state health care program within the meaning of section 1128(a)(1) of the Act

The Act requires Petitioner be excluded from participation in federal healthcare programs if her offense of conviction is related to the delivery of an item or service under Medicare or a state health care program.  See Act § 1128(a)(1) (42 U.S.C. § 1320a-7(a)(1)).  In order to be “related to” the delivery of an item or service under Medicare, only a nexus or common-sense connection is required.  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); Berton Siegel, D.O., DAB No. 1467 (1994) (“[T]he statute requires some ‘nexus’ or ‘common sense connection’ between the offense of which a petitioner was convicted and the delivery of an item or service under a covered program.”). 

Petitioner disputes the relatedness of her crime to the delivery of an item or service to a covered healthcare program.  P. Br. at 3.²   But the criminal conduct resulting in her conviction clearly evidences the “common sense” connection required by section 1128(a)(1) of the Act.  A jury found Petitioner guilty of five counts of Medicaid fraud and one count of conspiracy to commit Medicaid fraud.  IG Exs. 2, 3.  The offenses of conviction on their face demonstrate the nexus between Petitioner’s criminal conduct and a covered healthcare program sufficient to warrant exclusion.  Petitioner “willfully and knowingly” caused false claims to be submitted to the Oklahoma Medicaid program, solicited a pecuniary benefit “in connection with services clamed to be payable by the Oklahoma Medicaid Program,” conspired to “cheat and defraud the Oklahoma Medicaid Program by submitting false claims for reimbursement,” and failed to maintain records after receiving payment from the state’s Medicaid program.  IG Ex. 2 at 1-2.  There is an obvious connection between Petitioner’s offenses of conviction and the delivery of an item or service under a covered program. 

That relatedness is reinforced by the fact that the State Court ordered her to pay restitution to the Oklahoma Attorney General to recover the losses she caused to the

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state’s Medicaid program.  IG Ex. 3 at 4.  Payment of restitution to a covered healthcare program for losses incurred because of criminal conduct demonstrates the nexus between the offense of conviction and the delivery of an item or service to that program.  Summit S. Shah, M.D., DAB No. 2836 at 8-9 (2017), quoting Siegel, DAB No. 1467 at 6-7 (“[A] criminal offense resulting in financial loss to a State Medicaid program is ‘related to’ the delivery of items or services under that Medicaid program because it results ‘in less funds being available to pay for covered services’ delivered to Medicaid patients.”).  In sum, I have no difficulty concluding Petitioner’s offense of conviction occurred in connection with the delivery of an item or service to the Medicare program. 

3. Petitioner must be excluded for a minimum of five years. 

Because I have concluded that a basis exists to exclude Petitioner pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)), Petitioner must be excluded for a minimum of five years.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a). 

4. The IG has established two aggravating factors to justify a period of exclusion beyond the five-year statutory minimum. 

1. Petitioner’s conviction arose from acts that lasted for a period of one year or more, as required by 42 C.F.R. § 1001.102(b)(2). 

A jury found Petitioner guilty based on six counts charged by the Oklahoma Attorney General against her.  Counts 1 through 3 identify criminal conduct that persisted for over a year.  IG Ex. 2 at 1-2.  Count 5 identifies criminal conduct that persisted for almost four years.  Id. at 2.  The IG has sufficiently established that Petitioner’s conviction arose from conduct that continued for longer than one year. 

2. The IG established financial loss to a government program of $50,000 or more, as required by 42 C.F.R. § 1001.102(b)(1).

On entering judgment against Petitioner, the Oklahoma state court ordered her to pay $393,934 in restitution based on six counts of Medicaid fraud.  IG Ex. 3 at 4.  The Board has recognized that restitution may be used to demonstrate program loss.  See Shah, DAB No. 2836 at 8.  The IG properly applied the aggravating factor found at 42 C.F.R. § 1001.102(b)(1) because Petitioner was responsible for more than $50,000 in loss to the Medicare program. 

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5. A 12-year exclusion period is not unreasonable.

I must uphold the IG’s determination as to the length of exclusion if it is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  This means that: 

[s]o long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule.  We believe that the deference [42 C.F.R.] § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities. 

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992). 

In making my determination, the quality of the aggravating (or mitigating) factors is of greater significance than the mere number of the factors present in a given case.  As the Secretary stated in the preamble to the final rule establishing the exclusion regulations: 

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case.  For example, in one case many aggravating factors may exist, but the subject’s cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.  Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating.  The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue. 

Id. at 3314-15. 

In assessing the reasonableness of the exclusion period selected by the IG, I must consider both mitigating and aggravating factors.  42 C.F.R. § 1001.102(b), (c).  Here, the IG appropriately applied two aggravating factors to extend Petitioner’s period of exclusion.  Petitioner did not identify a mitigating factor recognized by the regulations to reduce it.  Therefore, the only question is whether the 12-year period of exclusion selected by the IG is unreasonable.  I cannot say it is.  Petitioner’s criminal conduct persisted for almost four years.  IG Ex. 2 at 1-2.  Her criminal conduct resulted in a substantial loss to the Medicare program – nearly $400,000, or over seven times greater

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than the regulatory minimum of $50,000 in program loss required to be considered an aggravating factor.  IG Ex. 3 at 4; 42 C.F.R. § 1001.102(b)(1).  It is “entirely reasonable” to give significant weight to loss amounts “substantially larger” than the minimum regulatory threshold.  Laura Leyva, DAB No. 2704 at 9-10 (2016). 

Petitioner conspired with her co-defendants to defraud a State Medicaid program intended to provide a safety net to indigent (and therefore vulnerable) patients.  Her criminal conduct, motivated by nothing more than avarice, netted her a substantial amount in ill-gotten gains.  Petitioner’s willingness to defraud a safety-net program intended for the poor for her own pecuniary benefit strongly suggests she poses a serious threat to its integrity.  Under these circumstances, I cannot say excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for 12 years is unreasonable. 

VI.  Conclusion

For the foregoing reasons, pursuant to section 1128(a)(1) of the Act (42 U.S.C. § 1320a-7(a)(1)), Petitioner is excluded from participation in Medicare, Medicaid, and all federal health care programs for 12 years, effective 20 days after September 30, 2022, the date the IG issued its notice of exclusion to her. 

Endnotes

¹  Petitioner improperly grouped several exhibits together as one submission.  Petitioner’s Exhibits 1 and 2 are so grouped, as are Petitioner’s Exhibits 4 through 8 and 10 through 12.  I required the parties to submit documents as separately labeled and paginated exhibits.  Summary Order at 5.  Again taking into account her pro se status, I accept Petitioner’s documents as submitted.

²  Petitioner’s arguments and exhibits are in large part irrelevant.  She argues her exclusion is improper or premature because her conviction is currently under appeal.  P. Br. at 10, 14.  But the fact that her conviction is not yet final does not preclude exclusion.  42 U.S.C. § 1320a-7(i) (“an individual or entity is considered to have been “convicted” of a criminal offense” when a judgment of conviction has been entered against the individual . . . regardless of whether there is an appeal pending . . . .”) (emphasis added).  Petitioner also claims her exclusion to be unconstitutional.  P. Br. at 15-16.  But I am not empowered to hear this claim.  US Ultrasound, DAB No. 2302 at 8 (2010).  Petitioner’s remaining arguments attack the validity of her conviction, claiming she was not actually a provider to the Medicaid program, disputing the amount of restitution she owes, assigning greater blame to one of her co-defendants, and identifying alleged errors made by the trial court.  P. Br. at 11-14.  These arguments are a collateral attack on her underlying conviction and therefore impermissible in these proceedings.  42 C.F.R. § 1001.2007(d).