SUBJECT:

Estelita M. Cardoza,

Petitioner,

The Inspector General.

DECISION

This case is before me pursuant to a request for hearing filed on June 29, 2004 by Estelita M. Cardoza (Petitioner).

I. BACKGROUND

By letter dated April 30, 2004, the Inspector General (I.G.) notified Petitioner that she was being excluded from participation in the Medicare, Medicaid, and all other federal health care programs as defined in section 1128B(f) of the Social Security Act (Act) for a period of five years. The I.G. informed Petitioner that her exclusion was imposed pursuant to section 1128(a)(2) of the Act, due to her conviction (as defined in section 1128(i) of the Act), in the District Court of the Third Circuit, Hamakua Division, State of Hawaii, of a criminal offense related to neglect or abuse of patients in connection with the delivery of a health care item or service.

On August 25, 2004, I conducted a telephone conference with the parties in this matter. The I.G. is represented in this case by the Office of Counsel to the Inspector General. Petitioner is represented by Douglas L. Halsted, Esq. The parties agreed that the case could be decided based on written submissions without the need for an in-person hearing. On October 12, 2004, the I.G. submitted his initial brief (I.G. Br.) and proposed exhibits. The I.G. filed four proposed exhibits with his initial brief. These have been identified as I.G. Exhibits (I.G. Exs.) 1 - 4. On October 12, 2004, Petitioner filed her brief (P. Br.). With her brief, Petitioner filed three proposed exhibits. These have been identified as Petitioner Exhibits (P. Exs.) 1 - 3. On November 2, 2004, the I.G. filed a reply brief to Petitioner's brief. (I.G. Reply Br.). There being no objection to the proposed exhibits, I admitted into evidence I.G. Exs. 1 - 4 and P. Exs. 1 - 3.

Based on all the evidence in the record, it is my decision to sustain the determination of the I.G. to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs for a period of five years. I base my decision on the documentary evidence, the applicable law and regulations, and the arguments of the parties. It is my finding that the mandatory exclusion provisions of section 1128(a)(2) do apply in this case because Petitioner was convicted of a program-related crime.

II. ISSUE

The issue in this case is whether the I.G. had a basis upon which to exclude Petitioner from participation in the Medicare, Medicaid, and all other federal health care programs. Since the period of exclusion in this case is five years, the minimum mandatory period, there is no issue of reasonableness of the length of the exclusion before me.

III. APPLICABLE LAW AND REGULATIONS

Section 1128(a)(2) of the Act authorizes the Secretary of Health and Human Services (Secretary) to exclude from participation in any federal health care program [as defined in 1128B(f)], any individual convicted under federal or State law, of a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service.

The exclusion under section 1128(a)(2) of the Act must be for a minimum mandatory period of five years. Act, section 1128 (c)(3)(B); 42 C.F.R. � 1001.102(a).

Pursuant to 42 C.F.R. � 1001.2007, a person excluded under section 1128(a)(2) may file a request for hearing before an Administrative Law Judge (ALJ). When an exclusion is based on the existence of a conviction, the basis for the underlying conviction is not subject to review. 42 C.F.R. � 1001.2007(d). In addition, a petitioner may not collaterally attack the underlying determination, either on substantive or procedural grounds, in his/her appeal. Id.

Section 1128(b) of the Act authorizes the Secretary to exclude individuals from receiving payment for services that would otherwise be reimbursable under Medicare, Medicaid, or other federal health care programs.

Section 1128(i) of the Act (42 U.S.C. � 1230a-7(i)) defines the term "convicted" as used in section 1128(a) as follows:

an individual or entity is considered to have been "convicted" of a criminal offense--

(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 contendere 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.

Act, section 1128(i)

IV. PARTIES' ARGUMENTS

1. I.G.'s Arguments

The I.G. argues that Petitioner was convicted of a criminal offense related to the delivery of an item or service under a federal or state health care program. Therefore, Petitioner is subject to the statutory minimum mandatory period of exclusion of five years.

2. Petitioner's Arguments

Petitioner argues that she was not convicted of any criminal offense but, instead, participated in Hawaii's deferred acceptance program which does not constitute a conviction under Hawaii State law. Petitioner does not dispute that the offense of which she was charged was related to the delivery of an item or service under the Medicaid program.

V. DISCUSSION

I make findings of fact and conclusions of law to support my decision in this case. I set forth each finding, in italics, as a separate heading.

A. Petitioner was convicted of a criminal offense within the meaning of section 1128 of the Act.

The facts of this case are not in dispute. On January 15, 2003, the Attorney General for the State of Hawaii filed a complaint against Petitioner in the District Court of the Third Circuit, Hamakua Division. The complaint charged that Petitioner, with the intent to harass, annoy or alarm another person, did shove, otherwise touch Mary Z, in an offensive manner or subject Mary Z, to offensive physical contact, thereby committing the offense of Harassment in violation of section 711-1106(1)(a) of the Hawaii Revised Statutes. I.G. Ex. 2. The incident giving rise to the criminal complaint occurred while Petitioner was on duty as a certified nurse aid in a long term care facility, and involved a 93-year-old female resident, referred to here as Mary Z. I.G. Ex. 1.

Pursuant to a plea agreement, Petitioner pled nolo contendere and the court granted a deferral of her plea (DANC). The court allowed Petitioner to participate in the deferral program subject to compliance with the following terms and conditions during a six-month period:

� Payment of a $500 contribution fee.

�Attendance at no more than 5 anger management classes.

�No more criminal violations.

�Establish compliance to the satisfaction of the court by 10:00 a.m., October 2, 2003.

I.G. Exs. 3, 4.

Petitioner agreed to these conditions by signing the following statement:

I, the undersigned defendant, acknowledge that the foregoing terms and conditions have been explained to me and I understand that if I violate them, my suspended sentence or probation may be revoked. If proceedings have been deferred under Chapter 853, or Section 712-1255, Hawaii Revised Statutes, violation of the foregoing terms and conditions may result in the court accepting my guilty/no contest plea and sentencing me. I also acknowledge receipt of the written copy of the Mandatory Special Conditions as ordered by the Honorable John Moran.

I.G. Ex. 4.

Based on the above facts, Petitioner argues that no judgment of conviction was entered against her; no finding of guilt was made by the court; there was no guilty plea or nolo contendere that was accepted by the court; and she did not enter a first offender program nor did she receive a deferred adjudication, or other arrangement or program where judgment of conviction has been withheld. Thus, concludes Petitioner, the Hawaii legal framework under which Petitioner was processed, does not meet the federal definition of conviction pursuant to section 1128(i) of the Act. P. Br. at 6 - 7.

Ordinarily, when a defendant enters a plea of nolo contendere, it means that he/she will not contest the charge of a particular crime. When such a plea is entered, the presiding judge will treat it as an admission and proceed to find the defendant guilty as charged. Under Chapter 853 of the Hawaii Revised Statutes (HRS) at section 853-1, in specified situations, a defendant may apply to the court for deferred acceptance of a plea of nolo contendere. It is within the court's discretion to grant or deny the request for deferred acceptance of a plea of nolo contendere or no contest motion (DANC motion). ⁽¹⁾

In the case at bar, the State court granted the motion seeking deferred acceptance of Petitioner's plea of nolo contendere, with specific conditions of compliance by a date certain. Among the conditions established by the court were the order to pay a $500 contribution fee and the requirement to attend anger management classes. Failure to comply with the conditions could have resulted in the entry of a sentence for the charge set forth in the criminal complaint. I find that the State court's granting of the motion for deferred acceptance of the no contest plea, falls within the purview of section 1128(i)(3) of the Act. Additionally, I find that the court's agreement to defer criminal proceedings against Petitioner falls withing the broad language of section 1128(i)(4) of the Act. See Travers v. Shalala, 20 F.3d 993 at 997-8 (9^th Cir. 1994).

It is beyond dispute that the paramount intent of Congress was to protect victims of neglect or abuse by care-givers in connection with the delivery of a heath care item or service. Thus, the focus of section 1128(i) of the Act is on the commission of a criminal offense in connection with the delivery of a health care item or service. Consequently, the federal statute must be read broadly when considering its application to the offenders targeted by the statute. Individuals who neglect or abuse patients or long-term care residents in connection with the delivery of a health care item or service, cannot circumvent the federal exclusion provisions by availing themselves of creative state sentencing procedures.

Petitioner suggests that I ignore the reasoning of Judge Anne Blair in Steven Caplan. That I cannot do. In fact I subscribe to her language in concluding that the Hawaii deferred plea acceptance scheme is not a sanctuary for the offender contemplated in section 1128(i) of the Act. In her decision, Judge Blair states:

Under section 1128(i)(4) of the Act, an individual or entity is considered convicted 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. DAB decisions which have dealt with such deferred adjudications have held that such procedures constitute convictions within the scope of section 1128(i)(4) of the Act. Carlos E. Zamora, M.D., DAB CR22 (1989) aff'd DAB No. 1104 (1989); Benjamin P. Council, M.D., DAB CR391 (1995); Donald J. Purcell, II, M.D., DAB CR572 (1999); Conrad J. Sarnecki, DAB CR722 (2000). Further, whether an individual has been convicted within the meaning of section 1128(i) of the Act is a matter of federal not state law. Id. In addition, Petitioner's entry of a no contest plea and the deferred acceptance of such a plea by the Hawaii Circuit Court of the First Circuit constitutes a conviction under section 1128(i)(3) of the Act. Donald J. Purcell, II, M.D., DAB CR572 (1999).

Steven Caplan, R.Ph., DAB CR1112 (2003) at 6.

B. Petitioner's offense was a criminal offense related to the delivery of an item or service under the Medicaid program.

In view of the above, I find that Petitioner was convicted of a criminal offense within the meaning of section 1128(i) of the Act. Furthermore, Petitioner's conviction of a criminal offense is related to the delivery of an item or service under the Hawaii Medicaid program which justifies her exclusion by the I.G. from participation in the Medicare, Medicaid, and all other federal health care programs.

C. Petitioner's exclusion for a period of five years is the mandatory minimum period as a matter of law.

An exclusion under section 1128(a)(1) of the Act must be for a minimum mandatory period of five years. Act, section 1128(c)(3)(B). When the I.G. imposes an exclusion for the mandatory five-year period, the reasonableness of the length of the exclusion is not an issue. 42 C.F.R. � 1001.2007(a)(2).

VI. CONCLUSION

Sections 1128(a)(1) and 1128(c)(3)(B) of the Act mandate that Petitioner be excluded from Medicare, Medicaid, and all other federal health care programs for a period of at least five years because of her conviction of a criminal offense related to the delivery of an item or service under a federal or state health care program. The five-year exclusion is therefore sustained.

José A. Anglada

Administrative Law Judge

1. A "no contest" plea is usually employed where there has been a plea bargain in which the defendant does not want to accept guilt, but is willing to accept the sentence recommended by the prosecutor in exchange for not contesting the charges (which is generally reduced to a lesser crime). The purpose behind such a plea is to prevent a plaintiff in a civil action, arising out of the same incident giving rise to the criminal complaint, from alleging admission of fault by the defendant. See State v. Manglicmot, Intermediate Court of Appeals, No. 22768 (Hawaii 2001).