SUBJECT:

Sharon E. Dulude, R.N.,

Petitioner,

The Inspector General

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Sharon E. Dulude, R.N., from participating in Medicare, Medicaid, and all federal health care programs for a period of five years. I find the I.G. is authorized to exclude Petitioner pursuant to section 1128(a)(4) of the Social Security Act (Act) and that the five year exclusion imposed by the I.G. is the minimum mandatory period of exclusion under the Act. Act, section 1128(c)(3)(B).

I. Background

By letter dated October 28, 2004, Petitioner requested a hearing. In this request, Petitioner stated that she had received notification of her exclusion from participation in the Medicare, Medicaid, and all federal health care programs based on a felony conviction. Petitioner asserted that she was not convicted of a felony, but that she had two felony charges dropped and deferred while she was on probation.

I convened a prehearing conference, by telephone, on January 7, 2005. I informed Petitioner of her right to counsel (at her expense), but Petitioner indicated that she intended to represent herself.

The I.G. informed me during the conference (as Petitioner had not appended a copy of the I.G.'s notice letter with her hearing request) that the I.G. was excluding Petitioner, pursuant to section 1128(a)(4) of the Act, for the minimum mandatory period of five years, based on two felony convictions for obtaining a regulated drug by deceit, in violation of Vermont law. Petitioner admitted that charges were filed against her based on her drug addiction, but stated that she pled guilty to two misdemeanor offenses only and that her sentencing had been deferred. Thus, she asserted that she has not been convicted of a criminal offense under the Act.

I informed the parties that I am authorized to hear only two issues. One is whether the I.G. has a basis to exclude a petitioner. The second is whether the length of an exclusion is unreasonable. I further informed the parties that as the I.G. has imposed the minimum mandatory period of exclusion in this case, the only issue in the case is whether the I.G. has a basis to exclude Petitioner under section 1128(a)(4) of the Act. I stated my belief that, given the positions of the parties as identified in Petitioner's hearing request and during the prehearing conference, the case appears amenable to decision based on an exchange of written briefs and documentary evidence. I then set a briefing schedule as memorialized in my "Order and Schedule for Filing Briefs and Documentary Evidence" dated January 10, 2005. I also gave Petitioner the option of requesting in-person testimony if, after considering the I.G.'s brief, she believed material facts were in dispute.

The I.G. timely submitted a motion for summary affirmance, accompanied by I.G. Exhibits (I.G. Exs.) 1-7. Based on my January 10, 2005 order, Petitioner had 30 days from receipt of the I.G.'s brief to submit a response. Petitioner did not submit a response. Thus, on March 31, 2005, I issued an order to show cause stating that Petitioner's failure to comply with my January 10, 2005 order suggested that she might have abandoned her request for a hearing. I directed Petitioner to show cause why I should not dismiss the case for abandonment. By letter dated April 29, 2005, Petitioner submitted a response to the I.G.'s brief. Petitioner did not append any attachments or exhibits, did not request an in-person hearing, and did not object to the exhibits submitted by the I.G. Further, she did not explain why she did not timely respond to the I.G.'s brief, and I find her letter is not responsive to my order to show cause. Because Petitioner is pro se, however, I am accepting her response to the I.G.'s motion and deciding the case on the record before me instead of dismissing the case for abandonment. By letter dated May 13, 2005, the I.G. submitted a letter stating that he would not be submitting a reply to Petitioner's April 29, 2005 submission. I received the I.G.'s letter on May 16, 2005 and closed the record of the case on that date. In the absence of objection, I am accepting I.G. Exs. 1-7 into evidence.

II. Applicable Law

Section 1128(a)(4) of the Act mandates exclusion of an individual convicted, under federal or state law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance (which offense occurred after the date of the enactment of the Health Insurance Portability and Accountability Act (HIPAA)). A "conviction" is defined under section 1128(i) of the Act to include: (1) when a judgment of conviction has been entered against an individual 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 by a federal, state or local court; (3) when a plea of guilty or nolo contendere by the individual has been accepted by a federal, state, or local court; or (4) when the individual has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been with-held. The Act mandates that an exclusion imposed under section 1128(a)(4) be for a minimum period of five years. Act, section 1128(c)(3)(B).

III. Issue

The only issue in this case is whether the I.G. had a basis upon which to exclude Petitioner. As the I.G. imposed the minimum mandatory period of exclusion, five years, there is no issue as to whether the exclusion is unreasonable. Act, section 1128(c)(3)(B).

IV. Findings and Discussions

The findings of fact and conclusions of law noted below, in italics and bold face, are followed by a discussion of each.

1. The I.G. had a basis upon which to exclude Petitioner, because she was convicted of criminal offenses consisting of felonies relating to the unlawful prescription or dispensing of a controlled substance which occurred after the date of enactment of HIPAA.

During the relevant period, Petitioner was a registered nurse in the State of Vermont. I.G. Ex. 2, at 4-5. On March 5, 2004, a criminal Information was filed against Petitioner in the State of Vermont District Court, Chittenden Circuit, charging Petitioner with four felony counts of "Obtaining a Regulated Drug by Deceit." I.G. Ex. 2. On May 26, 2004, a "First Amended Information by Attorney General" was filed against Petitioner, in which she was charged with two felony counts of "Obtaining a Regulated Drug by Deceit" and two misdemeanor counts ("Possession of Narcotic Drugs" and "Exploitation of a Vulnerable Adult"). Count I of the First Amended Information charged that on December 13, 2002, January 17, 2003, and March, 11, 2003, Petitioner obtained a regulated drug by deceit by presenting a prescription to be filled at a pharmacy in Williston, Vermont, in the name of a resident of the residential care facility where Petitioner was employed. Count I further charged that Petitioner took the drug Roxicet (a regulated drug) for her own use and not that of the resident, a violation of 18 Vermont Statutes Annotated � 4223(a)(1). Count II of the First Amended Information charged that on or about December 13, 2002, January 30, 2003, February 13, 2003, March 14, 2003, and June 16, 2003, Petitioner obtained a regulated drug by deceit by presenting a prescription in the name of another resident of the residential care facility where she was employed to be filled at the same Williston, Vermont pharmacy. I.G. Ex. 3. Petitioner took the Roxicet, Roxicodone, or Oxycodone (regulated drugs) for her own use and not for the use of the resident, a violation of 18 Vermont Statutes Annotated � 4223(a)(1).

On or about May 26, 2004, Petitioner entered into a plea agreement with the State of Vermont. Under the terms of the plea agreement, Petitioner pled guilty to Counts I and II of the First Amended Information and the plea was accepted by the State of Vermont District Court, Chittenden Circuit (the presiding judge accepting the plea and finding it to be voluntary and made with knowledge and understanding of the consequences and after a knowing waiver of Petitioner's constitutional rights). Petitioner also pled guilty to misdemeanor Counts III and IV of the First Amended Information, and was sentenced under Counts III and IV (to probation, community service and substance abuse treatment, among other conditions). Petitioner, however, received a deferred sentence regarding felony Counts I and II, subject to successful completion of the probation to which she was sentenced under Counts III and IV. I.G. Exs. 4, 5. Specifically, under the terms of a May 26, 2004 "Deferred Sentence Agreement & Probation Warrant," if Petitioner fulfills the terms of her deferred sentence the Court will strike the adjudication of guilt related to the felony Counts I and II and discharge Petitioner pursuant to Vermont State law. The Deferred Sentence Agreement and Warrant also provides that if Petitioner fails to complete the terms of her probation the "Court shall impose sentence." Petitioner will not complete her term of probation until May 26, 2008. I.G. Ex. 6.

Petitioner asserted in her hearing request that she was not convicted of a felony, but that, instead, her two felony charges were dropped and deferred while she was on probation. Petitioner asserted further that because the felony charges had been dropped she was not convicted of an offense for which she could be excluded. In her response to the I.G.'s brief, Petitioner admits that she did enter a guilty plea. However, Petitioner argues that because her "charges" have been deferred, and at the end of her probation her "record will be cleared of these charges," this cannot constitute a conviction. Further, Petitioner asserts that her criminal offense is not related to the unlawful manufacture, distribution, prescribing, or dispensing of a controlled substance. Specifically, she asserts she did not manufacture a controlled substance, give a controlled substance to anyone, dispense it (by preparing, checking, or delivering it), or prescribe it as a remedy. Instead, Petitioner asserts she obtained these controlled substances for self use under the influence of her disease of addiction. Moreover, she believes the wording of the Act with regard to "related" is "open to interpretation." Her argument is that the "level of activity" of her crime, "obtaining," is "less involved" in criminal activity than the "'manufacture, distributing, prescribing or dispensing' and therefore do[es] not qualify for exclusion" as related to those activities. I disagree.

The elements necessary to support an individual's exclusion under section 1128(a)(4) are that: 1) the individual must have been convicted of a criminal offense; 2) the criminal offense must have been a felony; 3) the offense must have occurred after the enactment of HIPAA; and 4) the felony conviction must have been for conduct relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. I find all four elements to have been met in this case.

First, Petitioner was convicted of a criminal offense under the Act. The I.G.'s authority to exclude individuals from participation in federal health care programs is based on federal, not state law, and the issue of whether an individual has been convicted of an offense within the meaning of section 1128(i) is governed by federal law. Roger L. Wadley, DAB CR1074 (2003), citing Travers v. Shalala, 20 F.3d 993, 996-97 (9^th Cir. 1994). As an appellate panel of the Departmental Appeals Board (Board) stated in the case of Carolyn Westin, DAB No. 1381, at 6 (1993), Congress broadly defined the term "conviction" in order "to ensure that exclusions from federally funded health programs would not hinge on state criminal justice policies." Thus, the fact that a court's adjudication may not be a "conviction" under state law is not controlling.

Here, Petitioner's guilty plea to Counts I and II of the First Amended Information, and the Court's acceptance of that plea, demonstrate that she was, in fact, "convicted" within the meaning of section 1128(i)(3) of the Act. Moreover, contrary to Petitioner's assertion that the "charges" against her were dropped, the court merely deferred her sentence on Counts I and II. I.G. Ex. 5, at 2. Such a deferred sentence standing alone also constitutes a conviction under section 1128(i)(4) of the Act, which defines as a conviction an instance where an individual has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld. In this case the court did not defer prosecution and initiation of charges against Petitioner, it merely deferred sentencing, and her deferred sentence based upon her guilty plea constitutes a deferred adjudication under section 1128(i)(4) of the Act. See Roger L. Wadley, DAB CR1074; Katherine Marie Nielsen, DAB CR1181 (2004).

Second, the criminal offenses for which Petitioner was convicted, Counts I and II of the First Amended Information, are felonies under applicable state law. I.G. Ex. 5.

Third, Petitioner's criminal offenses took place after the effective date of HIPAA (which was August 21, 1996), as the criminal offenses underlying Counts I and II of the First Amended Information to which Petitioner pled guilty took place between December 13, 2002 and June 16, 2003. I.G. Ex. 3, at 1.

Finally, fourth, Petitioner's felony conviction relates to the unlawful prescription or dispensing of a controlled substance. Petitioner's felony convictions under 18 Vermont Statutes Annotated � 4223(a)(1) were for obtaining regulated drugs by deceit. Petitioner, an employee of a residential care facility, filled prescriptions in the names of two facility residents and took the drugs obtained for her own use. I.G. Ex. 3. Petitioner attempts to distinguish her conduct of obtaining these drugs for her own use from a relationship to the unlawful prescription or dispensing of a controlled substance. Specifically, in her response, Petitioner asserts:

The charges I had-Obtaining a Regulated Drug by Deceipt [sic], do not fit the wording to qualify. I feel these words are used specifically for a reason. I did not do any of these actions related to controlled substances. I obtained them for self use under the influence of my disease of addiction. I did not manufacture, distribute, dispense, or prescribe. Doing these actions involve[s] further activity beyond just obtaining the medication. I feel the wording "related to" is open to interpretation. The level of activity which occurred is the basis of this argument. Obtaining vs. distribution, manufacturing, prescribing, or dispensing. That is the difference, related vs not related. The level of activity of the crime, obtaining[,] is less involved in criminal activity than the other charges. I feel the charges I had are less involved in criminal behavior than the Act's wording of "manufacture, distributing, prescribing or dispensing" and therefore do[es] not qualify for exclusion.

Petitioner misapprehends the nature of section 1128(a)(4) of the Act. The section does not require that an individual be convicted of manufacturing, distributing, dispensing or prescribing and does not refer to the "level" or seriousness of the criminal activity.

Instead, all the statute requires is that a petitioner's criminal offense be "related" to those actions in a "useful and common-sense fashion to serve the remedial purposes of the exclusion remedy." Deborah Joe Oltman, R.N., DAB No. CR1254, at 10 (2004).

Furthermore, I find convincing the I.G.'s argument that the conduct upon which Petitioner was convicted relates to both the unlawful "prescription" and unlawful "dispensing" of controlled substances within the meaning of section 1128(a)(4) of the Act. Petitioner's convictions on their face relate to the prescription and dispensing of a controlled substance. Petitioner obtained a regulated drug (controlled substances Roxicet, Roxicodone, or Oxycodone) by unlawfully presenting prescriptions for the drugs that were intended for another individual. See Robert C. Richards, M.D., DAB CR1235 (2004) (obtaining a prescription under false pretenses falls within the category of an unlawful "prescription" under section 1128(a)(4) of the Act); Dirk G. Wood, M.D., DAB CR1068 (2003) (Petitioner's exclusion upheld under section 1128(a)(4) where the conviction involved conduct to obtain controlled substances through false pretenses).

Petitioner's act of presenting the false prescription caused a pharmacist to unlawfully dispense the drugs to her for her own use and not the use of the patients indicated in the prescriptions. By diverting the pain medication intended for another person, Petitioner essentially engaged in the act of dispensing controlled substances to herself. See Michael J. O'Brien, D.O., DAB CR1150 (2004) (criminal offense for self-dispensing of pharmaceuticals is related to the unlawful dispensing of controlled substances within the meaning of section 1128(a)(4) of the Act); Sean M. Maguire, M.D., DAB CR837 (2001) (exclusion upheld as an unlawful "dispensing" under section 1128(a)(4) of the Act based on Petitioner's conviction of three felony counts of obtaining a controlled substance by fraud where petitioner diverted the controlled substance for his personal use).

Based on the evidence before me, I find that the I.G. has established that Petitioner's felony convictions were "related to" the unlawful prescription and dispensing of a controlled substance within the meaning of section 1128(a)(4) of the Act.

2. I cannot consider Petitioner's other arguments in mitigation of the length of her exclusion, as Petitioner has been excluded for the minimum mandatory period.

Petitioner asserts in her response that she has been drug free for one and a half years. Further, she asserts that her Vermont license to practice nursing has been reinstated and that she has been deemed safe and trustworthy by the Vermont nursing board. Petitioner indicates that she is struggling financially, that her passion is nursing, and that she needs to return to nursing. I cannot consider these assertions, however, and change the length of Petitioner's period of exclusion. Once an individual has been convicted of a criminal offense within the meaning of section 1128(a)(4), exclusion from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of five years is mandatory and cannot be shortened. Act, section 1128(c)(3)(B).

V. Conclusion

For the foregoing reasons, I sustain Petitioner's exclusion from participation in Medicare, Medicaid, and all federal health care programs for a period of five years.

Alfonso J. Montano

Administrative Law Judge