Kathleen Ann Braddon-Walker, DAB CR6433 (2024)

DECISION

The Inspector General (IG) of the U.S. Department of Health and Human Services excluded Petitioner, Kathleen Ann Braddon-Walker, from participation in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(4) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(3)).  Petitioner challenges the exclusion.  For the reasons stated below, I find that the IG had a basis for excluding Petitioner from program participation, and that the five-year mandatory exclusion period must be imposed.  The IG’s exclusion determination is affirmed. 

I.     Background and Procedural History

By letter dated June 30, 2023, the IG informed Petitioner that she was being excluded from participating in Medicare, Medicaid, and all Federal health care programs pursuant to section 1128(a)(4) of the Act, effective 20 days from the date of the letter.  IG Ex. 1.  Petitioner was subject to exclusion due to a felony conviction in the Superior Court of California, Alameda County related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  IG Ex. 1.  The IG imposed a five-year exclusion.  IG Ex. 1. 

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On August 21, 2023, the Civil Remedies Division (CRD) received Petitioner’s timely request for hearing before an administrative law judge (ALJ) to contest the exclusion imposed by the IG.  CRD issued an Acknowledgment Notice, my Standing Pre-Hearing Order, and the CRD Procedures on August 25, 2023.

A pre-hearing conference was held on September 14, 2023.  An order summarizing the pre-hearing conference was issued on the same date. 

On October 16, 2023, the IG filed a brief (IG Br.) in addition to five exhibits (IG Exs. 1-5).  On November 30, 2023, Petitioner filed a brief (P. Br.) and on December 6, 2023, Petitioner filed six exhibits (P. Exs. 1-6).  The IG filed a reply brief on December 15, 2023. 

II.     Admission of Exhibits and Decision on the Record

Absent objection, IG Exs. 1-5 and P. Exs. 1-6 are admitted into evidence.  

Both parties indicated that an in-person hearing was not necessary to resolve this matter.  IG Br. at 6; P. Br. at 6.  Neither party identified witnesses to provide testimony.  As stated in the Pre-Hearing Order, a hearing will be held only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony and the witness’ proposed testimony is found to be relevant and non-cumulative.  Therefore, a hearing is not necessary, and this matter will be decided on the written record. 

III.     Issues

Whether the IG had a basis to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs under section 1128(a)(4) of the Act.  42 C.F.R. § 1001.2007(a)(1)(i), (2). 

IV.     Jurisdiction

This tribunal has jurisdiction to hear this case pursuant to 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a); see also 42 U.S.C. § 1320a-7(f)(1). 

V.     Legal Authorities

The Secretary of the U.S. Department of Health and Human Services shall exclude an individual from participation in Medicare, Medicaid, and all other federally funded health care programs if that individual or entity has been convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  42 U.S.C. § 1320a-7(a)(4).  The Act requires a minimum exclusion period of

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five years when the exclusion is mandated under section 1320a-7(a).  42 U.S.C. § 1320a-7(c)(3)(B). 

In exclusion cases, the IG has the burden of proving the basis for the exclusion and the existence of any aggravating factors.  42 C.F.R. §§ 1001.102(b); 1005.15(b).  The standard of proof is a preponderance of the evidence, which means a fact is proven if the evidence shows that it is more likely true than not true.  42 C.F.R. §§ 1001.2007(c), 1005.15(d).  In this case, the IG must prove that Petitioner was convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance under state law. 

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); 1001.2007(c).  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d). 

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the IG had a basis for the exclusion and whether an exclusion longer than the required minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a). 

VI.     Findings of Fact

1. Petitioner was an employee of Tri-Valley Orthopedics in Pleasanton, California.  IG Ex. 2 at 6. 
2. On March 5, 2020, Petitioner was charged by felony complaint with one count of Uttering Forged, Fictious, and Altered Prescription for Narcotic Drugs; one count of Health Insurance Fraud, two counts of Unauthorized Use of Personal Identifying Information; and one count of Forgery of a Prescription.  IG Ex. 3. 
3. On March 1, 2022, as part of a plea bargain, Petitioner pleaded no contest to count three of the criminal information, felony Unauthorized Use of Personal Identifying Information, for using the personal identifying information of a physician, without consent to unlawfully obtain hydrocodone.  IG Ex. 2 at 2; IG Ex. 3 at 2.  Petitioner entered into an agreement which required completion of a drug rehabilitation program.  In exchange for Petitioner’s successful completion of the program within six months, the government offered to return to court to submit a rule 17(b) motion ¹ to allow Petitioner to plead guilty to a misdemeanor, in lieu of the felony, for one year probation and credit for time served in jail.  IG Ex. 2 at 2. 

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4. Petitioner successfully completed the outpatient drug rehabilitation program.  IG Ex. 4 at 2.  On September 1, 2022, six months after the initial plea, the parties returned to court and Petitioner entered a no contest plea to a misdemeanor.  IG Ex. 4.  Petitioner was given a suspended sentence of 180 days in the Alameda County Jail with credit for time served in jail.  P. Ex. 3; IG. Exs. 2 at 2; 4 at 2; 5 at 1. 

VII.     Analysis and Conclusions of Law

A. Petitioner was convicted of a felony offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, which subjects her to a mandatory exclusion from all federal health care programs for a minimum of five years.

In order to prevail, the IG must prove that Petitioner was convicted of a felony offense, which occurred after August 21, 1996, under Federal or State law, relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  42 U.S.C. § 1320a-7(a)(4). 

Section 1128(a) of the Act, defines the term convicted as follows:  

1. when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;
2. when there has been a finding of guilt against the individual or entity by a Federal, State, or local court;
3. when a plea of guilty or nolo contendre by the individual or entity has been accepted by a Federal, State, or local court; or
4. when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld. 

42 U.S.C. § 1320a-7(i).  See also 42 C.F.R. § 1001.2. 

Petitioner argues that she was convicted of a misdemeanor and is therefore not subject to an exclusion.  Without authority, Petitioner argues that subpart (1) of Section 1128(i) should predominate over the “alternate definitions” of conviction and control the outcome of this matter.  P. Br. at 3.  The “alternate definitions” that Petitioner refers to are subparts 2 - 4 of Section 1128(a).  Using this rationale, Petitioner argues that her

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conviction did not occur until September 1, 2022 when the trial court judge accepted her no contest plea to a misdemeanor.  P. Br. at 4.  However, Petitioner’s argument lacks merit.  Contrary to Petitioner’s assertion, subparts 2 - 4 are not “alternate definitions,” but provide clear definitions of what is considered a “conviction” under the Act.  A person is considered convicted if they meet any of the conditions of the subsections in Section 1128(1) of the Act, as the subsections are disjunctive, as noted by the “or” between the subparts.  Satisfying one subsection is sufficient to impose an exclusion.  Petitioner has not provided any evidence that Congress intended to give subpart (1) more consideration than the other subparts. 

Because the Act clearly defines what constitutes a conviction, it is unnecessary to address Petitioner’s arguments regarding statutory construction.  Those who participate in “deferred adjudication[] or other arrangement or program where judgment of conviction has been withheld” are considered “convicted” within the meaning of the statute.  Act § 1128(i)(4); 42 C.F.R. § 1001.2(d).  Additionally, the Departmental Appeals Board (Board) has established that a “conviction” includes “diverted, deferred and expunged convictions regardless of whether state law treats such actions as a conviction[.]”  Henry L. Gupton, DAB No. 2058 at 8 (2007), aff’d sub nom. Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Tenn. 2008).  The record shows that Petitioner entered a no contest plea to a felony count of Unauthorized Use of Personal Identifying Information on March 1, 2022.  IG Ex. 2 at 6, 7.  Petitioner entered into an agreement which allowed the trial court judge to delay sentencing and to reduce the conviction to a misdemeanor after Petitioner completed a six-month drug treatment program.  Petitioner’s initial no contest plea to felony Unauthorized Use of Personal Identifying Information constitutes a felony conviction under Section 1128(a)(4) of the Act. 

To prove that Petitioner’s conviction is related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, the IG must show that there is a nexus between the offense and the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  The terms “related to” and “relating to” in section 1128(a) of the Act simply require a nexus or common-sense connection.  Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” 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 quotations omitted); Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998).  The IG argues that Petitioner admitted to unlawfully obtaining and using the personal identifying information of a physician to forge prescriptions and obtain hydrocodone, a controlled substance.  IG Br. at 5.  Additionally, Petitioner does not dispute that her conviction was related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  P. Br. at 6.  The IG has proven that Petitioner’s conviction was related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

B. Because it has been determined that Petitioner was convicted of a criminal offense related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance, a five-year exclusion must be imposed.

In appeals of mandatory exclusions, ALJs are restricted to considering whether there is a basis for the exclusion, as described above, and whether the period of exclusion is reasonable.  42 C.F.R. § 1001.2007(a)(1).  However, where the IG imposes the mandatory minimum exclusion of five years, “the exclusion’s length is reasonable as a matter of law, and the excluded individual may request a hearing only on the issue” of whether there is a basis for exclusion.  Diane Marie Krupka, a/k/a Diane Marie Salak, DAB No. 3020 at 2 (2020); 42 C.F.R. § 1001.2007(a)(2).  Here, the IG imposed an exclusion for the mandatory minimum period of five years.  Therefore, I am not permitted to change the length of the exclusion.  Because I have determined that there is a basis for Petitioner’s exclusion, the five-year exclusion must be upheld. 

VII.     Conclusion

The IG has proven by a preponderance of the evidence that Petitioner was 1) convicted of a criminal offense; and 2) the offense was related to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance.  Therefore, Petitioner shall be excluded from participating in Medicare, Medicaid, and other federal health care programs for the mandatory five-year period.  The five-year exclusion imposed by the IG is AFFIRMED.  

Endnotes

¹  The State of California Penal Code § 17(b) allows the sentencing court to reduce a felony conviction to a misdemeanor.