CASE | DECISION | JUDGE

Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
IN THE CASE OF  


SUBJECT:

Brandon Ray Neaveth,

Petitioner,

DATE: September 13, 2000
                                          
             - v -

 

The Inspector General

 

Docket No.C-00-319
Decision No. CR699
DECISION
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By letter dated December 30, 1999, the Inspector General ("I.G."), U.S. Department of Health and Human Services, notified Brandon Neaveth ("Petitioner") that he would be excluded from participation in Medicare, Medicaid, and all federal health care programs for a period of three years. The I.G. imposed this exclusion pursuant to section 1128(b)(1) of the Social Security Act, 42 U.S.C. § 1320a-7(b)(1), based on Petitioner's conviction, in the Second Judicial District Court, City and County of Denver, Colorado, of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.

Petitioner requested review of his three-year exclusion by letter to this office dated March 3, 2000. The I.G. moved for summary disposition. Because I have determined that there are no facts of decisional significance genuinely in dispute, and that the only matters to be decided are the legal implications of the undisputed facts, I have decided the case on the basis of the parties' written submissions. The I.G. submitted a brief, a reply brief, and six proposed exhibits (I.G. Exs. 1- 6). Petitioner objected to the introduction into evidence of proposed I.G. Exhibit 6. I find that such exhibit is relevant and material and I note that the content of such affidavit is confirmed by Petitioner's Exhibit 2. On such basis, I accept I.G. Exhibit 6 into evidence. Petitioner submitted a brief and five proposed exhibits (P. Exs. 1- 5). The I.G. did not object to these exhibits and I accept P. Exs. 1-5 into evidence.

I conclude that Petitioner is subject to a three-year period of exclusion from participation in the Medicare, Medicaid, and all federal health care programs and I therefore affirm the I.G.'s determination.

PETITIONER'S CONTENTIONS

Petitioner contends that the I.G. has not met its burden of demonstrating that Petitioner's criminal offense was "in connection with the delivery of health care item or service." Specifically, Petitioner maintains that the I.G. has not produced competent evidence that his conviction for falsifying the background check concerning the nurse aide his employment agency recommended met the statutory requirement. He maintains that the I.G. has not shown that the nurse aide was in fact employed at a nursing home as a result of his action. In this regard, he asserts that the affidavit supplied by the I.G. (I.G. Ex. 6) from the director of the employment agency to which his company recommended the nurse aide is not based on personal knowledge.

Petitioner also asserts that, even considering such affidavit, the I.G. has still failed to show that Petitioner's conviction was "in connection with the delivery of a health care item or service." Petitioner asserts that his agency and the other temporary staffing agency to which he recommended the nurse aide are not businesses involved in the delivery of a health care item or service to patients. Further, he contends that it has not been shown that the nursing facility that used the services of the nurse aide relied upon the forged background check. Petitioner also maintains in this regard that the services of his employment agency and that of the agency to which he recommended the nurse aide are too removed from the actual delivery of health care services under the facts of this case.

Finally, Petitioner contends that it is anomalous for the I.G. to exclude Petitioner when the criminal record of the nurse aide, who had a theft conviction, would not evidently disqualify her from working in a nursing home.

APPLICABLE LAW

Section 1128(b)(1)(A)(i) of the Act provides for exclusion from participation in Medicare and Medicaid any individual or entity that has been convicted of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service. Such exclusion shall be for a period of three years unless specified aggravating or mitigating factors are present which form the basis for lengthening or shortening the period of exclusion.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. During the period relevant to this case, Petitioner was the owner and manager of a temporary health care staffing agency called Medical Staffing of Metro Denver, Inc. also known as American Medical Management, Inc. located In Denver, Colorado. I.G. Exs. 3 and 6.

2. On June 19, 1998, in the Second Judicial District Court for the City and County of Denver, Colorado, Petitioner was charged in a Complaint/Information of 31 counts of forgery, criminal possession of a forged instrument, second degree forgery, and criminal possession of a second degree forged instrument, in violation of Colorado Revised Statutes 18-5-102,18-5-103,18-5-104.5, 18-5-105, and 18-5-107. I.G. Ex. 3.

3. Specifically, Count 3 of that Information charged Petitioner with second degree forgery and alleged that Petitioner, with intent to defraud Lifelines Care, Inc. did unlawfully and falsely make, complete, alter and utter a written instrument which was and which was purported to be and was calculated to become and to represent if completed, a written instrument, to wit: a criminal background check of Awilda Panek prepared by Loffert Background Services, L.L.C., and dated September 16, 1997, in violation of Colorado Revised Statutes 18-5-104. I.G. Ex. 3.

4. Awilda Panek is a nurse aide who was hired to provide health care services to patients relying, in part, on the falsified background check.

5. On July 30, 1999, Petitioner pleaded nolo contendere to Count 3 of the June 19, 1998 complaint/information, a violation of Colorado Revised Statutes 18-5-104, as amended. I.G. Exs. 4 and 5.

6. On July 30, 1999, the Second Judicial District Court for the City and County of Denver accepted Petitioner's plea. I.G. Exs. 4 and 5.

7. As a result of his conviction Petitioner was ordered to pay restitution in the amount of $25,000; was sentenced to 2 years probation; and was ordered to perform 100 hours of public service. I.G. Exs. 4 and 5.

8. On December 30, 1999, the I.G. notified Petitioner that, as a result of his criminal conviction, he was being excluded for three years from participation in the Medicare, Medicaid, and all Federal health care programs under section 1128(b)(1)(A)(i) of the Act. I.G. Ex. 1.

9. Under section 1128(b)(1)(A)(i) of the Act, the I.G. is authorized to exclude any individual or entity that has been convicted under federal or State law of a misdemeanor relating to fraud, theft embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.

10. Where the I.G. determines to exclude an individual pursuant to section 1128(b)(1)(A) of the Act, the term of exclusion will be for a period of three years, in the absence of aggravating or mitigating factors that would support an exclusion of more or less than three years.

11. In a case involving an exclusion under section 1128(b)(1)(A)(i) of the Act, an exclusion of more than three years may be justified where there exist aggravating factors that are not offset by mitigating factors.

12. Petitioner's criminal conviction constitutes a conviction within the meaning of section 1128(i)(3). of the Act.

13. Petitioner was convicted under state law of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service.

14. The I.G. is authorized to exclude Petitioner pursuant to section 1128(b)(1) of the Act.

15. The I.G. did not cite the presence of any aggravating factor in imposing a three year exclusion.

16. Petitioner did not prove the presence of any mitigating factor.

17. A three-year exclusion of Petitioner is reasonable.

DISCUSSION

Petitioner does not dispute that he has been convicted under state law and I so find. Petitioner pleaded nolo contendere and the court accepted his plea. Such procedure constitutes a conviction within the scope of section 1128(i)(3) of the Act. In pleading nolo contendere to Count 3 of the Information, Petitioner chose not to contest the allegation that he acted with intent to defraud. Accordingly, I find Petitioner's conviction for second degree forgery was for a criminal offense relating to fraud.

The remaining issue concerns whether Petitioner's criminal conviction is one in connection with the delivery of a health care item or service. I find that the facts of Petitioner's case demonstrate that it is one "in connection with the delivery of a health care item or service" within the scope of the Act. Petitioner was the owner and manager of a temporary staffing agency that provided registered nurses, licensed practical nurses, and certified nurse aides to health care facilities in the metropolitan Denver area. Awilda Panek was a nurse aide who was employed by Petitioner to provide temporary nurse aide services to health care facilities. Petitioner forged the criminal background check report of Awilda Panek by altering the dates of the report, the number of the report, the date of Ms. Panek's birth and, most importantly, by removing the information on her report which showed Ms. Panek's felony criminal record and making the report indicate that she had no criminal record. I.G. Exs. 3 and 6.

Petitioner subsequently provided this forged background check report of Awilda Panek to Lifelines Care, Inc., another temporary staffing agency that subcontracted with Petitioner's company, Medical Staffing of Metro Denver, to provide temporary nurses and nurse aides. P. Ex. 2. Petitioner provided the forged background check in response to Lifelines Care, Inc.'s request that Medical Staffing of Metro Denver provide them with a nurse aide to fill a temporary staffing position at Solomon Health Care Facility. Id. Lifelines Care, Inc. relied on the representation of Petitioner that Ms. Panek had no criminal record and was qualified to serve as a nurse aide. Id. In fact, Ms. Panek was hired by Solomon Health Care Facility and delivered health care services to patients at that facility as a nurse aide. I.G. Ex. 6; P. Ex. 2.

Petitioner's forgery of Ms. Panek's criminal background check with intent to defraud Lifelines Care, Inc. constitutes fraud "in connection with the delivery of a health care item or service." The object of Petitioner's fraud was to defraud Lifelines Care, Inc., who clearly sought to recommend Ms. Panek to its clients in her capacity as a nurse aide. In fact, Lifelines Care, Inc. recommended to Solomon Health Care Facility where she was employed as a nurse aide. Clearly, Petitioner was in the business of recommending health care professionals for work in that field and recommended in this instance a nurse aide to another temporary health care staffing agency. This is a sufficient nexus to find that Petitioner is properly excluded under section 1128(b)(1)(A) of the Act. In fact, Ms. Panek was employed as a nurse aide by Solomon Health Care Facility as Petitioner's own evidence reflects. P. Ex. 2. On these facts, it is clear that, but for Petitioner's falsification of Ms. Panek's felony record, Lifelines Care, Inc. would not have referred this nurse aide to any of its clients, including Solomon Health Care Facility. These facts demonstrate a nexus or common sense connection between the criminal offense for which Petitioner was convicted and the delivery of a health care item or service. See Elsbeth Barnes, DAB CR340 (1994); Berton Siegel, D.O., DAB No. 1467 (1994).

Petitioner maintains that there is no competent proof that Ms. Panek was in fact employed in a health care facility as a nurse aide. The affidavit submitted by the I.G. shows this to be so. I.G. Ex. 6. Moreover, even Petitioner's own evidence concedes this fact. P. Ex. 2. Additionally, such evidence is not necessary. Proof of the actual delivery of health care services is not necessary for an individual to be excluded under section 1128(b)(1)(A). Petitioner's argument that such proof is required is contrary to a plain reading of the statute and prior administrative law judge decisions which establish that a petitioner's crime need not involve the direct or immediate manipulation of items or services. See Joel Fass, DAB CR349 (1994); Chander Kachoria, DAB CR220 (1993). It is sufficient under the Act that Petitioner's offense need only be "in connection with the delivery of a health care item or service" not that the fraud involve the direct delivery of a health care item or service.

The facts in this case establish that Petitioner was in the business of recommending qualified health care professionals to other health care staffing agencies and to health care facilities and that the fraud concerned the qualifications of a recommended health care provider. On such facts, I find that Petitioner's fraud was "in connection with the delivery of a health care item or service." Petitioner asserts that it is anomalous to exclude him when it is not evident that Ms. Panek would herself would have been excluded under the Act from providing health care services as a result of her own criminal record. I find, however, that Petitioner's case meets the criteria of the statute. It is irrelevant whether or not Ms. Panek's criminal record would authorize her exclusion.

In the present case, the I.G. has not alleged or established any aggravating factors and Petitioner has not alleged or established any mitigating factors. Therefore, no basis exists to lengthen or shorten the statutory exclusion period of three years.

CONCLUSION

I conclude that the I.G. was authorized to exclude Petitioner, pursuant to section 1128(b)(1)(A)(i) of the Act. I find that the three year exclusion is reasonable and I sustain it.

JUDGE
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Joseph K. Riotto

Administrative Law Judge

 

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