Department of Health and Human Services DEPARTMENTAL APPEALS BOARD Civil Remedies Division |
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IN THE CASE OF | |
Susan Malady, R.N., |
DATE: November 6, 2001 |
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The
Inspector General
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Docket No.C-01-739
Decision No. CR835 |
DECISION | |
DECISION I sustain the determination of the Inspector General (I.G.)
to exclude Petitioner, Susan Malady, R.N., from participating in Medicare,
Medicaid, and other federally funded health care programs for a period
of 10 years. I find that the I.G. is authorized to exclude Petitioner
pursuant to section 1128(a)(3) of the Social Security Act (Act), and that
the 10-year exclusion imposed by the I.G. against Petitioner falls within
a reasonable range. I. Background By letter dated May 31, 2001, the I.G. notified Petitioner
that she was being excluded from participation in Medicare, Medicaid,
and all federal health care programs for a period of 10 years. The I.G.
advised Petitioner that she was being excluded pursuant to section 1128(a)(3)
of the Act as a result of Petitioner's conviction in the Superior Court
of New Jersey of a criminal offense related to fraud, theft, embezzlement,
breach of fiduciary responsibility, or other financial misconduct in connection
with the delivery of a health care item or service. By letter dated June
5, 2001, Petitioner requested a hearing and the case was assigned to me. On July 2, 2001, I held a prehearing conference by telephone
at which Petitioner stated that she was not challenging any of the facts
in this case and the parties agreed that the case could be heard and decided
based on written submissions. The I. G. filed six exhibits (I.G. Exs.
1 - 6) as part of her submission, and Petitioner filed four unlabeled
attachments which I have numbered as Petitioner's exhibits 1 - 4 (P. Exs.
1 - 4) to conform to Civil Remedies Division procedures. In the absence
of objection, I receive into evidence I.G. Exs. 1 - 6 and P. Exs. 1 -
4. During the time period relevant to this case, Petitioner
was a registered nurse practicing in New Jersey. I.G. Ex. 6. On May 24,
1999, Petitioner pled guilty, in the Superior Court of New Jersey, to
one count of Theft By Deception in the Second Degree,(1)
a felony offense under New Jersey law. I.G. Ex. 4. Petitioner's conviction,
based on her guilty plea, and the Superior Court of New Jersey's acceptance
of that plea constitutes a conviction under section 1128(i)(3) of the
Act. Petitioner was sentenced to five years of incarceration, ordered
to pay restitution in the amount of $97,400, and ordered to pay a $5,000
fine. I.G. Ex. 4. II. Issue The issues in this case are:
III. Discussion Section 1128(a)(3) of the Act authorizes the Secretary of the HHS (Secretary) to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act):
Section 1128(c)(3)(B) of the Act provides that an exclusion
imposed under section 1128(a)(3) of the Act shall be for a minimum period
of not less than five years. The mandatory minimum period of exclusion may be increased
with the existence of certain aggravating factors that are not offset
by certain mitigating factors. 42 C.F.R. � 1001.102.
The following four factors may serve as a basis for lengthening the period
of exclusion: (1) the acts resulting in the conviction, or similar acts,
resulted in a financial loss to one or more entities of $1,500 or more
(42 C.F.R. � 1001.102(b)(1)); (2) the acts that resulted in the conviction,
or similar acts, were committed over a period of one year or more (42
C.F.R. � 1001.102(b)(2)); (3) the sentence imposed by the court included
incarceration (42 C.F.R. � 1001.102(b)(5)); and (4) the individual has
been the subject of any other adverse action by any federal, State, or
local government agency or board, if the adverse action is based on the
same set of circumstances that serves as the basis for imposition of the
exclusion (42 C.F.R. � 1001.102(b)(9)). The Secretary has delegated to the Inspector General (I.G.) the authority to impose exclusions. 42 C.F.R. � 1001.401(a). So long as the amount of time chosen for the exclusion imposed on Petitioner by the I.G. is within a reasonable range, based on demonstrated criteria, I have no authority to change it. Joann Fletcher Cash, DAB No. 1725 at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (1992).
Petitioner does not challenge any of the facts stated
by the I.G. in its notice letter of May 31, 2001.
See Order dated July 2, 2001. Neither did Petitioner challenge
that she was convicted of theft nor that her conviction fell within the
meaning of section 1128(a)(3) of the Act in either her hearing request,
her brief, or during the prehearing telephone conference. The record reflects that Petitioner was the Director of
Nursing at the Northwest Covenant Medical Center (Northwest) and that
from on or about December 20, 1994 until on or about September 3, 1996,
Petitioner submitted false expense reports to Northwest for reimbursement
which Petitioner knew were not expenses which had been incurred by her,
were not business-related, and were not approved by Petitioner's supervisor.
As a result of this conduct, Petitioner received checks in excess of $97,000
from Northwest. I.G. Exs. 3, 4. On May 24, 1999, Petitioner pled guilty,
in the Superior Court of the State of New Jersey, to one count of Theft
By Deception in the Second Degree, a felony offense under New Jersey law.
I.G. Ex. 4. Petitioner's conviction was for one of the enumerated criminal offenses, i.e., theft, and thus is expressly covered by section 1128(a)(3). In addition, Petitioner's false reimbursement claims were filed in her capacity as the Director of Nursing and were filed against Northwest, an organization in the business of providing health care items or services. Thus, Petitioner's misconduct was related to the delivery of a health care item or service. See Donald R. Kirks, M.D., DAB CR765 (2001); Frank J. Haney, DAB CR81 (1990); Francis Craven, DAB CR143 (1991). Further, Petitioner's conduct occurred, in part, after August 21, 1996, as required under section 1128(a)(3).
Section 1128(a)(3) of the Act mandates that the I.G. exclude any individual or entity convicted of a felony criminal offense in connection with the delivery of a health care item or service relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, which occurred after August 21, 1996, and involved a health care program. Therefore, the I.G. must exclude Petitioner under section 1128(a)(3). The minimum period of exclusion under section 1128(a)(3) is for a period of five years. Section 1128(c)(B)(3) of the Act.
By regulation, the Secretary has established the criteria for determining the length of exclusions imposed pursuant to section 1128 of the Act. The aggravating and mitigating factors applicable to a section 1128(a) exclusion are listed at 42 C.F.R. � 1001.102. The presence of an aggravating factor or factors not offset by any mitigating factor or factors justifies lengthening the mandatory five-year period of exclusion. Evidence that does not pertain to one of the specific aggravating or mitigating factors is not relevant and may not be used to decide whether an exclusion of a particular length is reasonable.
Petitioner does not challenge the existence of this aggravating factor. As established by the court order requiring her to pay $97,400 in restitution, Petitioner's criminal acts resulted in a financial loss to Northwest of significantly more than $1,500. I.G. Exs. 3, 4.
The record reflects that Petitioner pled guilty to criminal acts covering a time period from on or about December 20, 1994, to on or about September 3, 1996, a time period of more than one year. I.G. Ex. 3. Petitioner does not dispute that the acts occurred over more than one year.
As a result of her criminal activity, Petitioner was convicted and sentenced by the Superior Court of New Jersey to five years of incarceration, among other things. I.G. Ex. 4.
On April 10, 2000, Petitioner's license to practice nursing
in New Jersey was revoked by the State of New Jersey Division of Consumer
Affairs Board of Nursing based on Petitioner's conviction. I.G. Ex. 6.
This constitutes adverse action against Petitioner by
a State board based on the same set of circumstances
that served as a basis for her exclusion. I find that a 10-year exclusion in this case is justified. The financial impact of a theft of $97,400 was substantial. Petitioner engaged in deliberate massive theft from Northwest over a period of almost two years. Petitioner's conduct warranted a five-year sentence of incarceration. In addition, Petitioner's conviction was so egregious as to cause her nursing license to be revoked.
Petitioner suggests that additional factors should be
considered in mitigation. She argues that she has been punished enough.
She states that: (1) she has made full restitution and paid all fines;
(2) she will have to carry the stigma of a criminal record for the rest
of her life; (3) following an incarceration of six months she satisfactorily
participated in an Intensive Supervision Program; (4) the New Jersey Board
of Nursing reissued her license on January 5, 2001; (5) the State that
originally issued her nursing license renewed the license after full disclosure;
and that, (6) she has been an effective role model since her conviction
in that she has been functioning as a Chief Nursing Officer and she has
submitted a petition signed by her colleagues to that effect (P. Ex. 4).
None of these are mitigating factors. The only factors which can be considered mitigating are:
(1) Petitioner was convicted of three or fewer misdemeanor offenses and
the resulting financial loss to Medicare and the State health care program
was less than $1,500; (2) the record demonstrates that Petitioner had
a mental, physical, or emotional condition that reduced his culpability;
or (3) Petitioner's cooperation with federal or state officials resulted
in others being convicted or excluded, or additional cases being investigated,
or a civil money penalty being imposed. 42 C.F.R. 1001.102(c). This case
presents none of the regulatory mitigating factors. Petitioner was convicted
of a felony; losses were to an entity, Northwest, and those losses substantially
exceeded $1,500; no evidence suggests any physical, mental, or emotional
conditions; nor did Petitioner's cooperation result in any investigations
or convictions. I therefore find that no mitigating factors justify reducing
the period of exclusion.
Petitioner argues that the statute is unconstitutional
in that the statute violates Articles V, VI, and VIII of the United States
Constitution. She states that not only has she been punished as sentenced,
but she will be stigmatized and possibly lose employment opportunities
and social supports and suffer emotionally. In essence, she feels she
has been punished enough and that punishments should not "accrue over
years of time after the conviction." P. Br. at 2. I have no authority to declare a federal statute unconstitutional.
John A. Crawford, DAB CR160 (1991); Roberta E. Miller, DAB
CR367 (1995), Richard A. Fishman, DAB CR100 (1990). Even if I could
consider these issues, it has been repeatedly held that exclusions imposed
by the I.G. are civil sanctions and are remedial in nature and not punitive
and criminal. Manocchio v. Kusserow, 961 F.2d 1539 (11th
Cir. 1992); Greene v. Sullivan, 731 F.Supp. 838 (E.D. Tenn. 1990);
Joann Fletcher Cash, DAB No. 1725 (2000); Douglas Schram, R.
Ph., DAB No. 1382 (1992); and Janet Wallace, L.P.N., DAB No.
1126 (1992). The statute's purpose is to protect federal health care
programs and the programs' beneficiaries and recipients from untrustworthy
providers. A provider that has been convicted of a crime described in
section 1128(a) is presumed by Congress to be untrustworthy and a threat
to federal health care programs and their beneficiaries and recipients.
The record shows that Petitioner has proven herself to be an untrustworthy
individual and therefore Petitioner's exclusion comports with the remedial
purpose of the Act.
Petitioner requests that the effective date of the exclusion be backdated to May 24, 1999, the date of her conviction. It is well-settled that an administrative law judge is without authority to change the effective date of an exclusion. As a matter of law, an exclusion must become effective 20 days from the date of the I.G.'s notice of exclusion. 42 C.F.R. � 1001.2002. An administrative law judge has no authority to review the timing of the I.G.'s determination to impose an exclusion or to retroactively alter the date of the imposition of the exclusion. Samuel W. Chang, M.D., DAB No. 1198 (1990); Kathleen E. Talbot, DAB CR772 (2001); Tanya A. Chuoke, DAB No. 1721 (2000). IV. Conclusion I find that the I.G. was authorized to exclude Petitioner pursuant to section 1128(a)(3) of the Act. The 10-year exclusion imposed by the I.G. is within a reasonable range. |
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JUDGE | |
Carolyn Cozad Hughes Administrative Law Judge
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FOOTNOTES | |
1. Petitioner was convicted of two other counts in the indictment for similar conduct which occurred prior to August 21, 1996. See I.G. Exs. 3, 4. 2. The Health Insurance Portability and Accountability Act of 1996 was enacted on August 21, 1996. | |