SUBJECT:

Andrew L. Branch,

Petitioner,

The Inspector General.

DECISION

This matter is before me on the Inspector General's (I.G.'s) Motion for Summary Affirmance of the I.G.'s determination to exclude the Petitioner herein, Andrew L. Branch, from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years. The I.G.'s Motion and determination to exclude Petitioner are based on the terms of section 1128(a)(1) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(a)(1). The facts in this case require the imposition of a mandatory five-year exclusion, and for that reason I grant the I.G.'s Motion for Summary Affirmance.

I. Procedural Background

Andrew L. Branch owned and operated two skilled nursing facilities in the State of Washington for many years prior to 2003. The management of the two homes was done by Branch Management, Inc., which was likewise owned by Mr. Branch. The two skilled nursing facilities were at all material times participants in Washington's Medicaid program.

On June 19, 2003, Mr. Branch was found guilty in the Superior Court of Washington for King County on his guilty plea to the crime of failure to maintain the facilities' residents' trust funds in a separate, designated, trust bank account, in violation of WASH. REV. CODE � 74.09.270, a gross misdemeanor. Judgment of conviction was entered against Mr. Branch on December 19, 2003, but imposition of sentence was deferred, subject to his being placed on probation for a term of 24 months, performing 240 hours of community service, and paying a $500.00 victim assessment fee. Petitioner was represented by counsel at those proceedings.

As required by the terms of section 1128(a) of the Act, 42 U.S.C. � 1320a-7(a), the I.G. began the process of excluding Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Section 1128(a)(1) of the Act mandates the exclusion, for a period of not less than five years, of "[a]ny individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under . . . any State health care program." On December 30, 2004, the I.G. notified Petitioner that he was to be excluded pursuant to the terms of section 1128(a)(1) of the Act for the mandatory minimum period of five years.

Acting pro se, Petitioner timely sought review of the I.G.'s action by letter of February 17, 2005. I convened a telephonic prehearing conference on April 18, 2005, pursuant to 42 C.F.R. � 1005.6, for the purpose of discussing procedural issues with the parties, and of verifying that Petitioner intended to continue acting pro se. The results of that conference are set out in my Order of May 3, 2005. The cycle of briefing established in that Order is now complete and the record before me closed on August 15, 2005. 42 C.F.R. � 1005.20(c).

The I.G. has proffered three proposed exhibits (I.G. Exs. 1-3) and Petitioner has expressed no objection to them; accordingly, I.G. Exs. 1-3 are admitted.

Petitioner has proffered three exhibits to which the I.G. has expressed no objection. It should be noted that although reminded in the Order of May 3, 2005, of the importance of marking his exhibits in conformity with Civil Remedies Division Procedures, Petitioner designated his proposed exhibits by letter, not number, and did not number the pages. Petitioner's proposed Exhibits A and B are copies of portions of the statutes involved here. Since they are not properly to be treated as exhibits, they are not admitted. Petitioner's third proffered exhibit, P. Ex. C, is admitted; I have numbered its pages 1-15.

II. Issues

The legal issues before me are limited to those enumerated at 42 C.F.R. � 1001.2007(a)(1). In the specific context of this record they are:

1. Whether the I.G. has a basis for excluding Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(1) of the Act; and

2. Whether the proposed five-year period of exclusion is unreasonable.

The controlling authorities require that both issues be resolved in favor of the I.G.'s position. Section 1128(a)(1) of the Act mandates Petitioner's exclusion since his predicate conviction has been established. A five-year period of exclusion is the minimum period established by section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B), and is therefore ipso jure reasonable.

III. Controlling Statutes and Regulations

Section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), requires the mandatory exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any "individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Title XVIII or under any State health care program." The terms of section 1128(a)(1) are restated in regulatory language at 42 C.F.R. � 1001.101(a). This statutory provision makes no distinction between felony convictions and misdemeanor convictions as predicates for mandatory exclusion. This is the statutory provision relied on by the I.G., but Petitioner argues that it is not appropriate to the facts of his conviction.

Section 1128(a)(3) of the Act, 42 U.S.C. � 1320a-7(a)(3), requires the mandatory exclusion from participation in Medicare, Medicaid, and all other federal health care programs of any "individual or entity that has been convicted . . . under 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 paragraph (1)) [i.e. covered by section 1128(a)(1)of the Act] 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." The terms of section 1128(a)(3) are restated in somewhat restructured regulatory language at 42 C.F.R. � 1001.101(c). This statutory provision encompasses only felony convictions. Petitioner asserts that this provision is "most appropriate" to the nature of his offense, but denies its specific application because of its limitation to felonies.

The Act defines "conviction" as including those circumstances "when a judgment of conviction has been entered against the individual . . . by a . . . State . . . court, regardless of whether . . . the judgment of conviction or other record relating to criminal conduct has been expunged," section 1128(i)(1) of the Act; "when there has been a finding of guilt against the individual . . . by a . . . State . . . court," section 1128(i)(2) of the Act; "when a plea of guilty . . . by the individual . . . has been accepted by a . . . State . . . court," section 1128(i)(3) of the Act; or "when the individual . . . has entered into participation in a . . . deferred adjudication . . . program where judgment of conviction has been withheld," section 1128(i)(4) of the Act, 42 U.S.C. �� 1320a-7(i)(1)-(4). These definitions are repeated at 42 C.F.R. � 1001.2.

An exclusion based in section 1128(a)(1) is mandatory and the I.G. must impose it for a minimum period of five years. Section 1128(c)(3)(B) of the Act, 42 U.S.C. � 1320a-7(c)(3)(B). The regulatory language of 42 C.F.R. � 1001.102(a) affirms the statutory provision. Although the minimum mandatory period of exclusion is subject to enhancement in some limited circumstances and on proof of carefully-defined aggravating factors set out at 42 C.F.R. � 1001.102(b), in this case, the I.G. has not sought to enhance the five-year mandatory minimum period by offering to prove any of them. For that reason, I may not inquire into the existence vel non of any of the specific aggravating or mitigating factors set out at 42 C.F.R. � 1001.102(b) and (c).

IV. Findings and Conclusions

I find and conclude as follows:

1. On his plea of guilty on June 19, 2003, in the Superior Court of Washington for King County, Petitioner Andrew L. Branch was found guilty of the gross misdemeanor offense of Failure to Maintain Trust Funds in a Separate Account, in violation of WASH. REV. CODE � 74.09.270. I.G. Exs. 1, 2; P. Ex. C.

2. Final judgment of conviction was entered against Petitioner in the Superior Court on December 19, 2003, and imposition of sentence was deferred. I.G. Ex. 1; P. Ex. C.

3. The plea, finding of guilt, judgment of conviction, and deferred sentence described above constitute a "conviction" within the meaning of sections 1128(a)(1) and 1128(i)(1), (2), (3), and (4) of the Act, and 42 C.F.R. � 1001.2.

4. A nexus and a common-sense connection exist between the criminal offense to which Petitioner pleaded guilty and was found guilty, as noted above in Finding 1, and on which plea and finding of guilty the final judgment of conviction was entered and imposition of sentence deferred, as noted in Finding 2, and the delivery of an item or service under a State health care program. I.G. Exs. 1, 2, and 3; Berton Siegel, D.O., DAB No. 1467 (1994).

5. By reason of Petitioner's conviction, a mandatory basis exists for the I.G.'s exercise of authority, pursuant to section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs.

6. By reason of his conviction, Petitioner was subject to, and the I.G. was required to impose, the mandatory minimum five-year period of exclusion from Medicare, Medicaid, and all other federal health care programs. Section 1128(c)(3)(B) of the Act; 42 C.F.R. � 1001.102(a).

7. Because the five-year period of Petitioner's exclusion is the mandatory minimum term provided by law, it is therefore not unreasonable. Section 1128(c)(3)(B) of the Act; 42 C.F.R. �� 1001.102(a) and 1001.2007(a)(2).

8. There are no disputed issues of material fact and summary disposition is therefore appropriate in this matter.

V. Discussion

The essential elements necessary to support an exclusion based on section 1128(a)(1) of the Act are: (1) the individual to be excluded must have been convicted of a criminal offense; and (2) the criminal offense must have been related to the delivery of an item or service under Title XVIII of the Act (Medicare) or any state health care program. Thelma Walley, DAB No. 1367 (1992); Boris Lipovsky, M.D., DAB No. 1363 (1992); Lyle Kai, R.Ph., DAB CR1262 (2004) rev'd on other grounds, DAB No. 1979 (2005). Those two essential elements are fully established in the record before me.

Petitioner's conviction is shown by P. Ex. C, at 1-3 and by I.G. Ex. 1: his guilty plea was tendered and accepted on June 19, 2003, and the trial court found him guilty on that date, in satisfaction of the definitions of "conviction" set out at sections 1128(i)(2) and (3) of the Act. The judgment of conviction entered against him on December 19, 2003, satisfies the definitions of "conviction" set out at sections 1128(i)(1) and (4) of the Act. The I.G. has proved the first essential element.

The relation of the offense of which Petitioner was convicted to "the delivery of an item or service under . . . any state health care program" is apparent in I.G. Exs. 2 and 3, particularly when those documents are read in the light of Roberta E. Miller, DAB CR367 (1995); Gary Gregory, DAB CR274 (1993); Jerry L. Edmonson, DAB CR59 (1989); and when the strict protections established for residents' funds are recalled. Section 1819(c)(6) of the Act, 42 U.S.C. � 1395i-3(c)(6); 42 C.F.R. � 483.10(c). There is a direct and obvious nexus or common-sense connection between Petitioner's crime and the delivery of an item or service under the Medicaid program. Berton Siegel, D.O., DAB No. 1467 (1994). The I. G. has proved the second essential element.

Petitioner does not directly contest the I.G.'s proof on these points, nor does he squarely deny that, if they apply, the terms of section 1128(a)(1) require his exclusion as proposed. What Petitioner does challenge is the fundamental applicability of section 1128(a)(1) to the circumstances proved by I.G. Exs. 1, 2, and 3: he denies that his conviction falls within the reach of section 1128(a)(1), because, he maintains, the nature of his crime places it more properly in the category of offenses described in section 1128(a)(3). He then insists that since his crime was not charged at the felony level, and because he was convicted of only a gross misdemeanor but not of a felony, the mandatory exclusion required when section 1128(a)(3) controls does not apply to him. Petitioner frames his argument in these words:

. . . [I]t appears that Section 1128(a)(3) is more applicable to this case than Section 1128(a)(1) . . . There is no doubt that Andrew L. Branch, the petitioner, probably committed fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct when he diverted patient funds from the patient trust fund bank account without obtaining the consent of the patients prior to using their trust funds monies. Eventhough the evidence in this case most likely could support a different decision other than the one reached by the Inspector General, it is the Petitioner's opinion that the Inspector General improperly concluded that the Petitioner should be excluded . . . pursuant to Section 1128(a)(1) of the Act because he was convicted of a criminal offense related to the delivery of an item or service under the Medicaid program instead of under Section 1128(a)(3).

* * * *

Perhaps the reason that the Inspector General attempts to apply Section 1128(a)(1) to the Petitioner's conviction instead of Section 1128(a)(3), which appears to be the most appropriate Section, is because Section 1128(a)(3) pertains to a Felony Conviction whereas the Petitioner was convicted of a misdemeanor, and Section 1128(a)(3) does not require a five year exclusion . . . for a misdemeanor conviction.

Petitioner's Brief, at 5-7.

Petitioner relies on the putative applicability of section 1128(a)(3) to the nature of his crime, but nimbly seeks to dodge its actual application by pointing out that the section applies only to felonies, and that he was convicted of only a misdemeanor. ⁽¹⁾

This argument depends on Petitioner's implicit assumption that section 1128(a)(3)'s general applicability is exclusive, that section 1128(b)(1) of the Act -- which addresses such misdemeanors of financial misconduct -- simply does not exist, and that crimes and convictions cannot fall within the reach of more than one subsection of section 1128(a) of the Act. That assumption is false, and the argument Petitioner has erected over it is condemned by that falsity.

It may very well be correct for Petitioner to assert, and that assertion will be assumed correct here for the limited purposes of examining Petitioner's argument, that the broad nature of the crime of which Petitioner stands convicted is a "breach of fiduciary responsibility, or other financial misconduct" as contemplated by section 1128(a)(3). But the fact remains: as I have found above, the nature of that crime is also by the established precedent of this forum "related to the delivery of an item or service under . . . a State health care program." Roberta E. Miller, DAB CR367; Gary Gregory, DAB CR274; Jerry L. Edmonson, DAB CR59; section 1819(c)(6) of the Act, 42 U.S.C. � 1395i-3(c)(6); 42 C.F.R. � 483.10(c). It would therefore appear correct to understand that the misconduct forming the crime of failing to maintain Medicaid residents' trust funds in a separate bank account, regardless of degree, must always lie within the reach of section 1128(a)(1), and may lie within the reach of either section 1128(a)(3) or section 1128(b)(1) of the Act, depending on whether the crime is classified as felony or misdemeanor.

But once a conviction is shown to be within the ambit of section 1128(a)(1), the mandatory operation of that section bars any petitioner, including this one, from claiming that other more lenient, more discretionary, or more favorable exclusionary provisions should be applied instead. Even in situations where the underlying conviction could plausibly be argued to fall within both section 1128(a)(1) and one or more of the permissive exclusions or three-year mandatory minimum periods of section 1128(b)(1)-(15), the rule is clear: if section 1128(a)(1) fits, then the mandatory exclusion and mandatory minimum period prescribed by section 1128(a)(1) must be imposed. Neither the I.G. nor the Administrative Law Judge may choose to proceed otherwise. Stacy Ann Battle, D.D.S., et al., DAB No. 1843 (2002); Tarvinder Singh, D.D.S., DAB No. 1752 (2000); Lorna Fay Gardner, DAB No. 1733 (2000); Douglas Schram, R.Ph., DAB No. 1372 (1992); Niranjana B. Parikh, M.D., et al., DAB No. 1334 (1992); David S. Muransky, D.C., DAB No. 1227 (1991); Leon Brown, M.D., DAB No. 1208 (1990); Napoleon S. Maminta, M.D., DAB No. 1135 (1990); Charles W. Wheeler, et al., DAB No. 1123 (1990); Jack W. Greene, DAB No. 1078 (1989), aff'd sub nom. Greene v. Sullivan, 731 F.Supp. 835 (E.D. Tenn. 1990).

In summary, then, the evidence before me satisfies the two elements essential to the application of section 1128(a)(1) of the Act. Once a predicate conviction within the purview of section 1128(a) of the Act has been demonstrated, application of the section and exclusion is mandatory. Mark K. Mileski, DAB No. 1945 (2004); Salvacion Lee, M.D., DAB No. 1850 (2002); Lorna Fay Gardner, DAB No. 1733. Since the five-year period of exclusion proposed in this case is the irreducible minimum required by section 1128(c)(3)(B) of the Act, it is as a matter of law not unreasonable. 42 C.F.R. � 1001.2007(a)(2). Neither I nor the Departmental Appeals Board (Board) may reduce it. Mark K. Mileski, DAB No. 1945; Salvacion Lee, M.D., DAB No. 1850.

Petitioner appears here pro se, and I have searched his pro se pleadings and attached documents for any additional arguments requiring discussion. In doing so, I have been guided by the Board's reminders, both explicit and implicit, that pro se litigants should be offered "some extra measure of consideration" in developing their records and their cases. Mark K. Mileski, DAB No. 1945; Louis Mathews, DAB No. 1574 (1996); Timothy L. Stern, M.D., DAB No. 1314 (1992); Edward J. Petrus, Jr., M.D., et al., DAB No. 1264 (1991). In doing so, I note that P. Ex. C contains, at 4-15, factual assertions tendered to the sentencing court urging mitigation of the potential penalty for his conviction. I also note that some of the statements in Petitioner's August 15, 2005 response, at 4-5, could be understood to suggest that no real fraud, misappropriation of funds, or permanent loss to residents occurred in the course of Petitioner's criminal conduct.

The I.G. has not sought to enhance the five-year mandatory minimum period by offering to prove any of the aggravating factors listed at 42 C.F.R. � 1001.102(b), and for that reason, I cannot assess those factors or the mitigating factors listed at 42 C.F.R. � 1001.102(c). Nevertheless, I have reviewed P. Ex. C with those mitigating factors in mind and have found no assertions of fact that could colorably raise any of them. And insofar as Petitioner himself now seeks to minimize or dilute his admission of criminality, he is bound by the facts established by his guilty plea to Count I of the Information, including the specific admission that he committed his crime ". . . knowing that he was in violation of statute, regulation and agreement . . . ." I.G. Ex. 2, at 1. See Susan Malady, R.N., DAB No. 1816 (2002); Theodore Sabot, M.D., DAB CR1160 (2004); Dirk G. Wood, M.D., DAB CR1068 (2003). Any form of collateral attack on predicate convictions in exclusion proceedings is precluded by regulation at 42 C.F.R. � 1001.2007(d), and that preclusion has been affirmed repeatedly by the Board. Susan Malady, R.N., DAB No. 1816; Dr. Frank R. Pennington, M.D., DAB No. 1786 (2001); Joann Fletcher Cash, DAB No. 1725 (2000); Paul R. Scollo, D.P.M., DAB No. 1498 (1994); Chander Kachoria, R.Ph., DAB No. 1380 (1993).

VI. Conclusion

For the reasons set out above, the I.G.'s Motion for Summary Affirmance should be, and it is, GRANTED. The I.G.'s exclusion of Petitioner Andrew L. Branch from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years, pursuant to the terms of section 1128(a)(1) of the Act, 42 U.S.C. � 1320a-7(a)(1), is thereby sustained.

Richard J. Smith

Administrative Law Judge

1. This argument bears the unmistakable appearance of a strawman erected for the purpose of being dealt a thrashing. While proposing this famous victory, however, Petitioner omits to explain how his escape from the reach of section 1128(a)(3) of the Act does not propel him headlong into the permissive-exclusion provisions of section 1128(b)(1) of the Act, 42 U.S.C. � 1320a-7(b)(1), which address misdemeanors.