SUBJECT:

American Healthcare Management,

Petitioner,

The Inspector General.

DECISION

This matter is before me on American Healthcare Management's (Petitioner's) motion for summary judgement and the Inspector General's (I.G.'s) Motion for Summary Affirmance of the I.G.'s determination to exclude the Petitioner from participation in Medicare, Medicaid, and all other federal health care programs for a period of five years. The I.G.'s determination to exclude Petitioner is based on the terms of section 1128(a)(2) of the Social Security Act (Act), 42 U.S.C. � 1320a-7(a)(2). As I explain below, I conclude there is a basis for the I.G. to exclude Petitoner because the I.G. has proven that Petitioner was convicted of a criminal offense relating to abuse of a patient in connection with the delivery of a health care item or service. For this reason, I grant the I.G.'s Motion for Summary Affirmance, and I uphold the I.G.'s determination to exclude Petitioner for a period of five years.

BACKGROUND

The relevant facts in this case are undisputed. During the relevant period in 1999-2000, Petitioner, a corporation in Missouri, managed Claywest Skilled Care (Claywest), a nursing facility in Missouri. I.G. exhibit (Ex.) 3. On March 27, 2000, an indictment filed in the Circuit Court of St. Charles County, Missouri, charged Petitioner with a misdemeanor count of failure to report elder abuse, in violation of sections 565.188 and 562.056 of the Revised Missouri Statutes. Id. The charge was based on Petitioner's agent, Charles B. Kaiser, III (Petitioner's President), having " . . . knowingly failed to immediately report to the Missouri Department of Social Services that . . . [a resident of Claywest] . . . had been abused." ⁽¹⁾ I.G. Ex. 1, at 2. Petitioner was convicted of failure to report elder abuse after a trial by jury was held in the Circuit Court of St. Charles County, Missouri. I.G. Ex. 4.

Section 1128(a)(2) of the Act, 42 U.S.C. � 1320a-7(a)(2), requires the exclusion from participation in Medicare, Medicaid, and all other federal health care programs, for a minimum period of five years, of "[a]ny individual or entity that has been convicted, under Federal or State law, of a criminal offense relating to the neglect or abuse of patients in connection with the delivery of a health care item or service." Section 1128(a)(2) of the Act; 42 U.S.C. � 1320a-7(a)(2). On May 28, 2004, the I.G. notified Petitioner that it was being excluded from participation in Medicare, Medicaid, and all federal health care programs, as defined in section 1128B(f) of the act, for a period of five years.

By written request dated July 23, 2004, Petitioner timely sought review of the I.G.'s action. I convened a prehearing conference by telephone on September 10, 2004, pursuant to 42 C.F.R. � 1005.6. At the conference, the parties agreed that this case could likely be decided based on written submissions without an in-person hearing. Subsequently, Petitioner confirmed in its brief that it is appropriate for me to decide this matter based on the parties' written submissions without an in-person hearing. See Petitioner's Brief in Support of Motion for Summary Judgement to Overturn Exclusion (Petitioner's brief) at 3. By order dated September 24, 2004, I established a schedule for the submission of briefs and documentary evidence. The briefing is complete. The I.G. has proffered three proposed exhibits (I.G. Exs. 1-3). They are admitted. Petitioner has proffered three proposed exhibits also (P. Exs. 1-3). They are admitted.

ISSUE

The legal issue before me is:

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)(2) of the Act.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I find and conclude as follows:

1. On March 27, 2000, Petitioner was indicted in the Circuit Court of St. Charles County, Missouri, for committing the class A misdemeanor of failure to report elder abuse in violation of sections 565.188 and 562.056 of the Missouri Revised Statutes. On November 19, 2002, Petitioner was found guilty in the Circuit Court of St. Charles County, Missouri, after a trial by jury, of failure to immediately report elder abuse. A judgment of conviction was entered by the Circuit Court on November 21, 2002. Petitioner was sentenced to pay a fine of $5,000. I.G. Exs. 1, 2, 3.

2. The conviction described above in Finding 1 constitutes a "conviction" within the meaning of sections 1128(a)(2) and 1128(i) of the Act, and 42 C.F.R. � 1001.2.

3. A preponderance of the evidence demonstrates that Petitioner's conviction was for a criminal offense relating to the abuse of a patient in connection with the delivery of a health care item or service.

4. There is an appropriate basis for the I.G. to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs pursuant to section 1128(a)(2) of the Act.

5. The five-year period of exclusion imposed by the I.G. is the mandatory minimum period of exclusion for an exclusion based on a conviction, pursuant section 1128(a)(2) of the Act. Section 1128(c)(3)(B) of the Act; 42 U.S.C. � 1320a-7(c)(3)(B).

DISCUSSION

Petitioner does not dispute that it was convicted within the meaning of sections 1128(a)(2) and 1128(i) of the Act, and 42 C.F.R. � 1001.2 (see Petitioner's brief at 11), but Petitioner argues that the conviction does not relate to the neglect or abuse of patients in connection with the delivery of a health care item or service. Petitioner's arguments, discussed in detail below, are unavailing. Petitioner's conviction was related to abuse of a nursing facility resident, and it was in connection with the delivery of a health care item or service. ⁽²⁾

In distinguishing what offenses are in connection with a health care item or service from those that are not in connection with the delivery of a health care item or service, the analysis in Eric D. DeSimone, R.Ph., DAB No. 1932 (2004) is instructive. In that case, an appellate panel of the Departmental Appeals Board (Board) held that the language in section 1128(a)(3) of the Act concerning whether a conviction is connected to the delivery of a health care item or service "requires a common sense analysis of whether the offense had a 'connection' with the delivery of a health care item or service." DeSimone, DAB No. 1932, at 4. Although the Board was considering the language in section 1128(a)(3), which section concerns exclusions based on felony convictions relating to health care fraud, not convictions based on neglect or abuse as in the instant matter, the relevant language describing the connection between a conviction and the delivery of a health care item or service is similar.

Furthermore, the overarching purpose of section 1128 is the designation of certain individuals and entities to be excluded from participation in federal and state health care programs. The purpose of excluding these entities is, in turn, a part of Congress' effort to protect federal health care programs from fraud and abuse, and to protect the beneficiaries of those programs from incompetent practitioners and from inappropriate or inadequate care. See S. Rep. No. 100-109, at 2 (1987), reprinted in 1987 U.S.C.C.A.N. 682. Thus, both subsections concern the same general legislative purpose, and I conclude, therefore, that the common sense analysis propounded by the Board is equally applicable to analysis of both sections 1128(a)(3) and 1128(a)(2).

In light of the Board's discussion in DeSimone, I conclude that to give effect to the plain language of section 1128(a)(2), which requires a connection between the offense and the delivery of a health care item or service, I must judge whether there is a common sense connection between Petitioner's offense and the delivery of a health care item or service. Moreover, considered in the context of Congress' aim to protect beneficiaries from, among other things, abuse, my deliberation is aided by considering whether the nature of the common sense connection indicates that the convict, if allowed to continue to participate in federal health care programs, threatens the beneficiaries of those programs.

I conclude also that it is logical and appropriate to extend the common sense analysis concept to the analysis of whether a conviction is related to neglect or abuse. It is logical because the same rationale employed by the Board in DeSimone, i.e. furtherance of Congress' intent to protect federal health care programs from fraud and abuse, applies both to a conviction connected to the delivery of a health care item or service and to a relationship between a conviction and neglect or abuse. It is appropriate also because to give effect to the plain meaning of the statute, I must rationally consider whether the offense was relating, using the ordinary meaning of the word, to neglect or abuse of a patient.

Petitioner denies its conviction related to neglect or abuse of patients. See Petitioner's brief at 3, 11. Essentially, Petitioner asserts that, although Petitioner was convicted of failure to immediately report elder abuse, Petitioner's role as a management company, as distinguished from a facility directly responsible for the care of residents, means that Petitioner's conviction does not relate to neglect or abuse within the meaning of section 1128(a)(2) of the Act. It was Claywest, Petitioner argues, not Petitioner, which was responsible for providing direct care to its residents. Thus, Petitioner asserts, the conviction was based on Petitioner being " . . . an accessory to the administrator's failure to immediately report elder abuse." Petitioner's argument is that this indirect responsibility for the failure to report elder abuse, and the fact that Petitioner had no direct responsibility for care of residents, shows that the conviction is not related to neglect or abuse of a patient. Petitioner's brief at 11-14.

Petitioner's argument is unpersuasive. The facts concerning Petitioner's offense are not disputed. The indictment levying the charge against Petitioner reads in pertinent part:

. . . on or about August 12, 1999, in the County of St. Charles, State of Missouri, Charles B. Kaiser III,^{[ (3)]} the president of defendant [Petitioner], who was an agent of the corporation [Petitioner] and who was acting within the scope of his employment and in behalf of the corporation, which corporation was the manager of the skilled nursing facility [Claywest] responsible for the care of . . . [the resident] . . . , a person of sixty years of age or older, knowingly failed to immediately report to the Missouri Department of Social Services that . . . [the resident] . . . had been abused.

I.G. Ex. 1, at 1-2. Thus, the conviction was plainly related to a failure to report abuse. And it is not disputed that the alleged abuse concerned a nursing home resident. Section 1128(a)(2) requires that a conviction be related to abuse. It is common sense that a conviction for failure to report elder abuse is related to abuse. Petitioner has cited no rule or precedent which persuades me that it is appropriate to apply any analysis other than the common sense analysis because Petitioner is a management entity without direct responsibility for patient care. The Act does not require that the convicted person or entity have had direct responsibility for providing care to patients. The Act merely requires that the conviction be related to neglect or abuse. Petitioner has failed to demonstrate how its conviction can be reasonably viewed as unrelated to abuse or neglect.

Secondly, Petitioner argues that its conviction was not in connection with the delivery of a health care item or service. See Petitioner's brief at 4. Petitioner argues that

[a] prosecution under � 565.188 [of the Missouri Revised Statutes] does not relate to the delivery of a health care item or service and cannot be the basis for an exclusion, particularly of an entity that provides only management oversight and is not even a health care provider.

Petitioner's brief at 16-17. Petitioner bases this argument on the existence of two different Missouri statutes addressing the failure to report abuse. Petitioner was convicted of failing to report elder abuse in violation of Mo.Rev. Stat. � 565.188. There is, however, another similar Missouri statute, Mo.Rev. Stat. � 198.070, which imposes criminal liability for failure to report abuse or neglect in connection with the delivery of health care services to a resident of a skilled nursing facility. Petitioner argues that because Missouri chose to prosecute Petitioner under section 565.188, rather than section 198.070, which explicitly imposes a duty to report neglect and abuse in a nursing facility context, Petitioner's conviction is not in connection with the delivery of a health care item or service. Petitioner's brief at 15-16. Petitioner alleges that the Missouri prosecutors chose to bring a charge against Petitioner under the more general elder abuse reporting statute (Mo.Rev. Stat. � 565.188), instead of the statute directed specifically towards reporting elder abuse in nursing facilities (Mo.Rev. Stat. � 198.070), because section 565.188 requires that reports of neglect or abuse be "immediate." Additionally, Petitioner asserts, prosecutors did not wish to have to prove whether Petitioner was a "mandated reporter" pursuant to section 198.070. Petitioner's brief at 19.

Petitioner's argument is inapposite because even assuming, arguendo, that Petitioner is correct about Missouri's prosecutorial strategy the decision to charge Petitioner under section 565.188 rather than section 198.070 is irrelevant to my analysis in this case. Petitioner's contention that there is no connection between its conviction and a health care item or service simply because one section of the statute addresses reporting elder abuse in a nursing facility context, and the one Petitioner was convicted under requires reporting elder abuse in other contexts-contexts which could include reporting scenarios not connected to health care-is unconvincing. A common sense analysis of the evidence shows there is a connection. Petitioner was convicted of failure to report elder abuse. The elder whose alleged abuse had not been immediately reported was a resident in Claywest, the nursing facility that Petitioner managed. Given these undisputed facts, the connection between the conviction and the delivery of a health care item or service is patent. The conviction concerned abuse of a resident in a nursing facility. A nursing facility is a facility that provides healthcare. Whether residents are being abused or not in a nursing facility is intimately connected to the health care services they are receiving. Regardless of the plurality of Missouri statutes applicable to the different circumstances under which the failure to report elder abuse can occur, a conviction falls under section 1128(a)(2) of the Act when common sense informs that it is connected to the delivery of a health care item or service. Applying this analysis to the instant matter, it does not matter that there is a Missouri statute concerning the reporting of elder abuse in nursing homes which Petitioner was not prosecuted under. If Petitioner had been convicted under the statute concerning failure to report elder abuse at a nursing facility, I would have found it was connected (all other facts being the same as in this case) to the delivery of a health care item or service. However, that the conviction fell under a different statute does not change the underlying facts. It is the conduct giving rise to the conviction that is the crucial part of this analysis, not the wording of the State statute.

CONCLUSION

For the reasons set out above, the I.G.'s Motion for Summary Affirmance should be, and it is, GRANTED. For the reasons set out above, Petitioner's Motion for Summary Judgement Overturning Exclusion should be, and it is, DENIED. The I.G. has proved by a preponderance of the evidence that Petitioner was convicted of a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service. The I.G.'s exclusion of Petitioner 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)(2) of the Act, 42 U.S.C. � 1320a-7(a)(2), is therefore UPHELD.

Alfonso J. Montano

Administrative Law Judge

1. The resident alleged to have been abused was a 78-year old man. On August 5, 1999, he was discovered by staff at Claywest to be "unresponsive," and he was subsequently transported to the hospital where he died on August 7, 1999. Allegations that the resident may have been abused (possibly struck by an employee or employees of Claywest) prior to his death are the circumstances underlying Petitioner's conviction. Petitioner's brief at 4-5.

2. I use nursing facility resident and patient interchangeably in this decision because a resident of a nursing facility is also, by virtue of his or her presence at the nursing facility to receive nursing care, a patient of the nursing facility.

3. Charles Kaiser was excluded by the I.G. and appealed his exclusion. See Charles Kaiser, DAB CR1209 (2004).