SUBJECT:

Kim Anita Fifer,

Petitioner,

The Inspector General

I. Background

By letter dated May 31, 2002, 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 because of her conviction in the United States District Court for the Western District of Tennessee of a felony 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. The I.G. asserted that aggravating factors justified imposing a 10-year exclusion. Petitioner filed a timely request for review, and the case was assigned to me.

On September 19, 2002, I held a telephone prehearing conference at which the parties

agreed that this matter could be decided on the written submissions, and that no in-person hearing was necessary. See Order and Schedule for Filing Briefs and Documentary Evidence (September 23, 2002). The I.G. filed a motion for summary disposition, an initial brief in support of that motion (I.G. Br.), a reply brief, and four exhibits (I.G. Exs. 1-4). Petitioner submitted a letter explaining her position (P. Br.) with no exhibits. There being no objection, I.G. Exs. 1-4 are admitted into evidence.

II. Issues

The issues in this case are whether Petitioner's conviction subjects her to exclusion under section 1128(a)(3) of the Act, and, if so, whether a 10-year exclusion falls within a reasonable range.

III. Discussion

Section 1128(a)(3) 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 section 1128B(f) of the Act): ⁽¹⁾

Any individual or entity that has been convicted for an offense which occurred after the date of the enactment of the Health Insurance Portability and Accountability Act of 1996, ⁽²⁾ 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 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.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a)(3) shall be for a minimum period of not less than five years.

The Secretary has delegated to the 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).

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

A. Petitioner was convicted of a felony relating to theft in connection with the delivery of a health care item or service, within the meaning of section 1128(a)(3) of the Act.

Petitioner was a major player in an identity theft scheme, victimizing the residents of the nursing facilities where she worked. She was employed as a nurse's aide at one Tennessee facility, and as a housekeeper at another. From on or before December 1, 1998, she participated in a conspiracy to commit identification fraud. ⁽³⁾ She unlawfully obtained personal information and, using this information, assumed the identity of her victims in order to purchase automobiles. I.G. Ex. 2. She pled guilty in federal district court to one felony count of conspiracy to commit identification fraud. I.G. Ex. 3, at 1. The court sentenced her to 43 months incarceration followed by three years of supervised release, and ordered her to pay $47,556.30 in restitution. I.G. Ex. 3, at 4. She was subsequently placed on the Tennessee Elderly and Vulnerable Abuse Registry, making her ineligible to work in any facility that receives federal health care money; her nurse aide certification was revoked; and she is ineligible for recertification in the State of Tennessee. I.G. Ex. 1.

The statute mandates exclusion of an individual who has been: (1) convicted of a felony; (2) "relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct;" and (3) "in connection with the delivery of a health care item or service." That Petitioner was convicted of a felony involving fraud and financial misconduct is plain. She obtained personal identifying information, such as credit cards and social security numbers, from residents of the nursing homes at which she worked.She and her cohorts then used that information to pose as the victimized residents in fraudulently financing and purchasing cars. I.G. Exs. 2, 3.

I also conclude that her offense was connected to the delivery of a health care item or service. To be "in connection with the delivery of a health care item or service" does not require a direct relationship. The statute applies so long as even an indirect connection exists between the criminal act and the delivery of health care or services. See Donald R. Kirks, M.D., DAB CR765 (2001) ("Criminal acts directed at a health care provider's administration or financial management will necessarily be indirect but, nevertheless, have an effect on the provision of care, thus meeting the requirements of the Act."). A nursing facility must rely on the honesty and integrity of its employees in order to provide necessary nursing care and housekeeping services. Here, because she held positions of trust, Petitioner had access to personal information on nursing home residents. She violated that trust and victimized those individuals that she was supposed to be serving. Her actions are no different than those of any nursing facility employee using his/her position to rob or otherwise exploit vulnerable facility residents. I therefore conclude that her felony conviction related to fraud and financial misconduct in connection with the deliver of health care services, and she is subject to exclusion under section 1128(a)(3).

B. A 10-year exclusion falls within a reasonable range.

1. Aggravating factors justify lengthening the period of exclusion beyond the five-year mandatory minimum.

Specific aggravating factors that are not offset by specified mitigating factors may justify increasing the period of an exclusion beyond the mandatory five years. 42 C.F.R. § 1001.102(a). Here, the I.G. cited two aggravating factors as bases for extending the period of Petitioner's exclusion beyond the five-year minimum: (1) Petitioner's actions caused financial losses in excess of $5,000 (42 C.F.R. § 1001.102(b)(1)); ⁽⁴⁾ and (2) the sentence imposed by the court included incarceration (42 C.F.R. § 1001.102(b)(5)). ⁽⁵⁾ Petitioner does not dispute the existence of either of these factors. Her crimes caused financial losses significantly in excess of $5,000, with the court ordering her to pay $47,556.30 in restitution, and her sentence included a significant period of incarceration (43 months). I.G. Ex. 3.

When I weigh these two aggravating factors, I find Petitioner's 10-year exclusion to be well within a reasonable range, given the egregious nature of Petitioner's conduct.

2. No mitigating factors offset the aggravating factors.

The regulations consider mitigating just three factors: (1) a 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 in the criminal proceedings demonstrates that the court determined that a petitioner had a mental, physical, or emotional condition before or during the commission of the offense, that reduced his/her culpability; and (3) a 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). Characterizing the mitigating factor as "in the nature of an affirmative defense," the Board has ruled that a petitioner has the burden of proving any mitigating factor by a preponderance of the evidence. Barry D. Garfinkel, M.D., DAB No. 1572, at 8 (1996).

This case presents no mitigating factors. Petitioner was convicted of a felony offense; the district court found no medical condition that reduced her culpability; and no evidence suggests that her cooperation with authorities resulted in any investigations or convictions. She raises a number of claims - that she has been punished enough; that following her indictment she told the truth; that she has been rehabilitated; and that she has completed numerous self-help programs. However, under the regulations, none of these factors are considered mitigating.

C. I have no authority to consider Petitioner's constitutional claims.

Petitioner also argues that the Double Jeopardy Clause of the Fifth Amendment precludes the I.G. from imposing the exclusion. P. Br. at 2. I am bound by the federal statute and regulations, and have no authority to declare them unconstitutional. 42 C.F.R. § 1005.4(c)(1). ⁽⁶⁾

IV. Conclusion

For the reasons set forth above, I find that the I.G. was authorized, under section 1128(a)(3) of the Act, to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs. Considering all of the evidence before me, I find that the 10-year exclusion falls within a reasonable range.

Carolyn Cozad Hughes
Administrative Law Judge

1. "Federal health care program" is defined in section 1128B(f) as any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government, or any State health care program. "State health care program" is defined in section 1128(h) of the Act and includes the Medicaid program (Title XIX).

2. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 was enacted on August 21, 1996.

3. From this record I am not able to determine the precise duration of Petitioner's illegal conduct. However, neither party has raised this as an issue.

4. Effective April 17, 2002, 42 C.F.R. § 1001.102(b)(1) was amended to increase, from $1,500 to $5,000, the amount of financial loss necessary to be considered an aggravating factor. 67 Fed. Reg. 11932 (March 18, 2002). The I.G. has apparently decided that the effective date means the date the I.G. issues its exclusion determination, regardless of when the underlying actions or the convictions occurred. In this case, the I.G.'s interpretation of effective date benefits Petitioner and she does not object.

5. At about the same time the I.G. issued her exclusion letter, the State of Tennessee Bureau of Health Licensure and Regulation placed Petitioner on its Elderly and Vulnerable Abuse Registry and revoked her nurse aide certification. I.G. Ex. 1. Had the I.G. been aware of the state agency's action, it might have cited an additional aggravating factor - that she was the subject of an adverse action based on the same set of circumstances that serve as the basis for this exclusion. 42 C.F.R. § 1001.102(b)(9).

6. Although I have no authority to consider constitutional questions, numerous Board decisions discuss the relationship between the I.G.'s exclusion provisions and the Double Jeopardy Clause. See, e.g., Joann Fletcher Cash, DAB No. 1725 (2000); Douglas Schram, R.Ph., DAB No. 1372 (1992).