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                              Stuart Alan Rockwell, D.D.S., DAB No. 3022 (2020)
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Stuart Alan Rockwell, D.D.S., DAB No. 3022 (2020)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Appellate Division





Stuart Alan Rockwell, D.D.S.
Docket No. A-20-89Decision No. 3022November 3, 2020

        
              
    

      FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Stuart Alan Rockwell, D.D.S. (Petitioner) appealed the June 12, 2020 decision of an Administrative Law Judge (ALJ), affirming the determination of the Inspector General (I.G.) to exclude Petitioner from participating in all federal health care programs for a mandatory minimum period of five years under section 1128(a)(1) of the Social Security Act (Act).1
  *Stuart Alan Rockwell, D.D.S.*, DAB CR5633 (ALJ Decision).  The ALJ concluded that the I.G. had a lawful basis to exclude Petitioner based on his conviction of a criminal offense related to the delivery of a health care item or service under a state health care program.  We affirm the ALJ Decision because it comports with the law and is supported by substantial evidence.

Legal Background

Section 1128(a)(1) of the Act requires the Secretary of Health and Human Services (the Secretary) to exclude an individual from participation in all federal health care programs if that individual has been convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  Act § 1128(a)(1); *see also*42 C.F.R. § 1001.101(a).2

**Page 2**

For purposes of exclusion, an individual is considered "convicted" of a criminal offense based on any of the following circumstances:

(1)  when a judgment of conviction has been entered against the 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 withheld.

Act § 1128(i) (emphasis added); *see also* 42 C.F.R. § 1001.2 (defining "*Convicted*").  Five years is the minimum period of exclusion for any mandatory exclusion under sections 1128(a)(1) – (a)(4).  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).

An excluded individual may request a hearing before an ALJ, but only on the issues of (i) whether the I.G. had a basis for the exclusion, and (ii) whether the length of any exclusion longer than the mandatory minimum is unreasonable.  42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a).  The underlying conviction is not reviewable or subject to collateral attack on substantive or procedural grounds.  *Id*. § 1001.2007(d).

Any party dissatisfied with the ALJ's decision may appeal the decision to the Board.  42 C.F.R. § 1005.21(a).  The Board "will not consider any issue not raised in the parties' briefs [or] any issue in the briefs that could have been raised before the ALJ but was not."  *Id*. § 1005.21(e).  Board review of an ALJ decision is, in general, based on the evidentiary record developed before the ALJ.  *See* *id*. § 1005.21(f); *Gracia L. Mayard,* *M.D.*, DAB No. 2767, at 6 (2017).

**Page 3**

Case Background3

Petitioner is a licensed dentist and owned a dental practice.  P. Ex. 1 ¶¶ 2-3.  In November 2018, the Arkansas Medicaid Fraud Control Unit (MFCU) received a report that Petitioner submitted claims for reimbursement to the Arkansas Medicaid program for dental services that were not provided as claimed.  I.G. Ex. 3, at 2.  Following an investigation, the MFCU investigator determined Petitioner provided false information to the Arkansas Medicaid program in order to bill and receive payment for services provided to T.N., who was not a Medicaid recipient.  *Id*.  Petitioner concedes his office incorrectly billed the Arkansas Medicaid program and received payment for services Petitioner provided to T.N. under the Medicaid recipient identification number of a different patient.  P. Ex. 1 ¶¶ 4-5.

On or about April 18, 2019, the MFCU investigator filed an Affidavit for Warrant of Arrest in the District Court of Pulaski County of Arkansas, attesting that she had reason to believe that Petitioner committed the offense of "Medicaid fraud," as prohibited by Arkansas Code § 5-55-111.  I.G. Ex. 3, at 1.  The investigator described the offense as "unlawfully, feloniously and purposely making or causing to be made false statements or representations of material facts in applications for any benefit or payment under the Arkansas Medicaid Program."  *Id*.  The investigator alleged that the aggregate amount of payments illegally claimed by Petitioner was less than $2,500 but more than $200, and the offense constitutes a Class "C" felony.  *Id*.  A bench warrant was issued for Petitioner's arrest.  *Id*. at 3; P. Ex. 1 ¶ 10.

On June 3, 2019, the day before Petitioner's arraignment, the Arkansas Assistant Attorney General (AAG) wrote to Petitioner's defense counsel (who represents Petitioner in this case), to formally extend a plea offer.  I.G. Ex. 5, at 1.  The AAG confirmed that Petitioner "is charged with one count of Class C felony Medicaid fraud."  *Id*.  The written plea offer stated that Petitioner billed the Arkansas Medicaid program for dental services he provided to T.N., who is not a Medicaid beneficiary, by using the Medicaid identification number of a different patient.  *Id*. at 2.  The AAG offered to reduce the charge to a Class A misdemeanor for Medicaid fraud if Petitioner agreed to plead guilty, and pay restitution in the amount of $1,025.05 to the Arkansas Medicaid Program Trust Fund prior to the entry of the guilty plea.  *Id*.  The plea offer further specified that the AAG's recommended sentence would be limited to:  (1) entry of judgement of conviction; (2) the restitution payment; (3) a mandatory fine of $600 as required by Ark. Code Ann. § 5-55-107(a)(2)(A) (3 times the maximum misdemeanor amount of $200); and (4) court costs including a booking fee (usually $140 payable to the court).  *Id*. at 2.  The AAG also made clear that if the plea offer were rejected, then the State would file

**Page 4**

felony charges against Petitioner in the Circuit Court of Pulaski County.  *Id*. at 3 (the case had been pending in the District Court of Pulaski County).

The following morning, on June 4, 2019, Petitioner's counsel responded to the plea offer, asking whether the AAG would agree to add a 12-month "pass-to-dismiss" clause to the terms of the plea offer because he would like the "opportunity to get this 'conviction' off of [Petitioner's] record."  I.G. Ex. 5, at 5.  The AAG rejected Petitioner's proposal, explaining that "Dr. Rockwell has to plead guilty."  *Id*.  The AAG offered, however, to modify the plea offer to recommend that the court "reserve judgment for a year, which means it is dismissed if he does not get other charges."  *Id*.  Petitioner's counsel responded:  "Understood.  We will accept the reserved judgment for a year and he will pay the restitution and fines today."  *Id*. at 4.

Later that day, the parties appeared before the Pulaski County District Court and presented the matter to the court.  I.G. Ex. 4, at 1.  "Based upon the pleadings of record, the agreement of the parties, and other matters and proof," the court entered an Order setting out the following findings and orders:

[Petitioner] entered a negotiated plea of guilty to the charge of Medicaid fraud, which is a Class A misdemeanor;
	The Arkansas Medicaid program lost a total of $1,025.05 as the result of [Petitioner's] acts;
	[Petitioner] was ordered to pay $1,025.05 in restitution as part of his sentence.  Restitution has been paid in full.
	[Petitioner] is ordered to pay a mandatory fine in the amount of $600; court costs; a booking fee; and any other fees or costs authorized by statute. . . .
	The court reserves judgment for one year.
	Pursuant to Ark. Code Ann. § 5-55-107(a)(2)(B), any monies collected from [Petitioner] as payment of the fine of $600 shall be payable to the Office of the Arkansas Attorney General. . . .**Page 5**

*Id*.  The Order was signed by the court on June 4, 2019, and "approved as to form" by the AAG and Petitioner's counsel.  *Id*. at 2.4

By letter dated November 29, 2019, the I.G. notified Petitioner that, based on his criminal conviction in the District Court of Pulaski County, he was being excluded under section 1128(a)(1) of the Act from participation in Medicare, Medicaid, and all federal health care programs for the minimum statutory period of five years.  ALJ Decision at 1-2 (citing I.G. Ex. 2).

Petitioner timely requested an ALJ hearing.  The ALJ entered her Standing Pre-Hearing Order for Inspector General Exclusion Cases, acknowledging that the "standard of proof in this proceeding is a preponderance of the evidence," and stating that the I.G. "will bear the burden of proof as to the basis for exclusion."  Standing Order § 4.5
  The Standing Order also required each party to file a pre-hearing exchange, including a brief, supporting exhibits, exhibit list, witness list, and the written direct testimony of each witness (other than experts).  *Id*. § 5.  The Standing Order further advised that "[t]he overwhelming majority of IG exclusion cases are decided without a live hearing."  *Id*. § 11.  The ALJ explained she will not conduct a live hearing, "unless a party files admissible, written direct testimony, and the opposing party asks to cross-examine one or more witnesses."  *Id*. § 9.

The I.G. submitted an informal brief along with four proposed exhibits.  Petitioner submitted a brief in response, evidentiary objections, and four proposed exhibits, including Petitioner's written direct testimony in affidavit form.  The I.G. submitted a reply brief with evidentiary objections, and one additional proposed exhibit.  Petitioner submitted, with permission, a sur-reply.  The I.G. declined to cross-examine Petitioner.  The ALJ, therefore, found a hearing for purposes of cross-examination unnecessary and decided the case based on the written submissions and documentary evidence.6
  ALJ Decision at 5.

**Page 6**

The ALJ concluded the I.G. had a basis for excluding Petitioner under section 1128(a)(1) of the Act because (i) Petitioner was convicted of a criminal offense (*i.e.*, Medicaid fraud), and (ii) that offense related to the delivery of a health care item or service under the Arkansas Medicaid program.  ALJ Decision at 6-8, 11.  The ALJ found Petitioner was "convicted" of a criminal offense for purposes of the Act because the District Court of Pulaski County (Arkansas court) accepted his guilty plea to the charge of Medicaid fraud.  ALJ Decision at 7 ("[T]here is no doubt that the District Judge accepted Petitioner's guilty plea.") (citing Act § 1128(i)(3)), 8 ("It is plainly apparent that the District Judge accepted the guilty plea . . . ."), 11 ("Petitioner . . . entered a guilty plea to the charge of Medicaid fraud that was accepted by the District Judge (I.G. Ex. 4 at 1) . . . .").7
  This appeal followed.

Standard of Review

The standard of review on a disputed issue of law is whether the ALJ's decision is erroneous.  42 C.F.R. § 1005.21(h).  The standard of review on a disputed issue of fact is whether the ALJ's decision is supported by substantial evidence on the record as a whole. *Id*.; *see also* Guidelines - Appellate Review of Decisions of Administrative Law Judges in Cases to Which Procedures in 42 C.F.R. Part 1005 Apply (Guidelines).8
  Substantial evidence is "more than a mere scintilla of evidence."  *Ellen L. Morand*, DAB No. 2436, at 3 (2012).  "It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."  *Id*. (quoting *Richardson v. Perales*, 402 U.S. 389, 401 (1971) (quoting *Consolidated Edison Co. v. NLRB*, 305 U.S. 197, 229 (1938))).

Analysis

The only issue before the ALJ was whether the I.G. had a basis to exclude Petitioner under section 1128(a)(1) of the Act.  *See* 42 C.F.R. § 1001.2007(a)(1).9
  Two conditions must exist to support a mandatory exclusion based on section 1128(a)(1).  *See Delores L. Knight*, DAB No. 2945, at 9 (2019).  "First, the individual must have 'been convicted of a criminal offense.'"  *Id*. (quoting Act § 1128(a)(1)).  "Second, the offense must relate to the delivery of an item or service under Medicare or under any state health care

**Page 7**

program."  *Id*.10
  Petitioner does not contend that the offense of Medicaid fraud is not related to the delivery of an item or service under a state health care program; rather, Petitioner claims he was never "convicted" as that term is defined in the Act.  Petitioner's Brief in Support of Notice of Appeal (P. Br.) at 2.  According to Petitioner, there was no basis for his exclusion because the I.G. failed to prove (i) that the Arkansas court "accepted" his guilty plea, and (ii) that his negotiated plea agreement was not a "deferred prosecution" agreement.  *Id*. at 13.  We reject Petitioner's arguments and affirm the ALJ's decision for the reasons explained below.

***1.  The ALJ's determination that Petitioner was convicted within the meaning of section 1128(i)(3) of the Act is supported by substantial evidence and is free from legal error.***

Notwithstanding the Order implementing the terms of Petitioner's negotiated plea deal, which was signed by the District Judge, the AAG, and Petitioner's counsel (I.G. Ex. 4), Petitioner argues that the I.G. failed to offer "any evidence or legal authority" that his guilty plea was accepted by the court.  P. Br. at 8.  Petitioner further argues that the ALJ erroneously "assumed that the entry of a plea automatically equates to acceptance of a plea."  *Id*.

The evidence produced by the I.G. belies Petitioner's argument.  The I.G. presented correspondence between the AAG and Petitioner's counsel, described in detail above, demonstrating that the parties negotiated a plea agreement to resolve the felony charge against Petitioner, contingent upon him pleading guilty to a lesser offense and paying restitution, a fine, and court costs.  I.G. Ex. 5.  After reaching that agreement, the Order produced by the I.G. shows, the parties presented the plea agreement and sentencing recommendations to the court.  I.G. Ex. 4.  The District Judge, having been "well and sufficiently advised," then proceeded to implement each and every element of Petitioner's plea agreement, and entered an Order:  (i) finding that Petitioner entered a negotiated plea of guilty to a misdemeanor charge of Medicaid fraud; (ii) establishing the amount of loss to the Arkansas Medicaid program; (iii) ordering Petitioner to pay restitution for that loss "as part of his sentence"; (iv) ordering Petitioner to pay additional fines and costs in accordance with Arkansas law; and (v) reserving judgment for one year.  I.G. Ex. 4.

Contrary to Petitioner's assertion, the ALJ's decision was not premised on a misunderstanding of Arkansas criminal law or an assumption that entry of a guilty plea "equates" to acceptance of the plea.  Rather, the ALJ carefully analyzed whether the

**Page 8**

evidence established that the Arkansas court accepted Petitioner's guilty plea within the meaning of section 1128(i)(3) of the Act.  ALJ Decision at 7-8, 11.  The ALJ found, among other things, that the court's acceptance of the guilty plea was evidenced by the imposition of Petitioner's sentence, which included payment of restitution, a mandatory fine, court costs, and a booking fee.  *Id*. at 7 ("It is simply illogical that the District Judge would 'sentence' Petitioner to pay restitution and impose a 'mandatory' fine and other costs, even though the District Judge purportedly, according to Petitioner, did not accept Petitioner's guilty plea.").  The ALJ further noted that under Arkansas law, ordering a defendant to pay restitution, a fine, and other costs is consistent with the acceptance of a guilty plea.  *Id.* (citing Ark. Code Ann. § 16-10-305(a) (2018) ("There shall be levied and collected the following court costs from each defendant upon each conviction, each plea of guilty or nolo contendere, or each forfeiture of bond . . . .");11
 Ark. Code Ann. § 12-41-505(b)(1), (2)(B) (2018) ("A person convicted of a felony or a Class A misdemeanor shall be assessed a booking and administration fee . . . .  If a court suspends imposition of sentence on a defendant or places him or her on probation and does not enter a judgment of conviction, the court shall impose the booking and administration fee as a cost."); Ark. Code Ann. § 5-55-108(a)(2) (2018) ("Any person who is found guilty of or who pleads guilty or nolo contendere to Medicaid fraud . . . shall pay . . . a fine of an amount not less than the amount of the monetary loss to the Arkansas Medicaid Program and not more than three (3) times the amount of the monetary loss to the Arkansas Medicaid program.")).  The ALJ further noted that the Arkansas court imposed, as recommended in the plea agreement, a mandatory fine of $600 pursuant to Arkansas Code Ann. § 5-55-107(a)(2) (2016), requiring any person found guilty of Medicaid fraud to make full restitution and pay a mandatory fine to be credited to the general revenues of the State of Arkansas.  ALJ Decision at 7 (citing I.G. Ex. 5, at 2); *see also* I.G. Ex. 4, at 1 ¶¶ 5, 7.

Furthermore, Petitioner presented no evidence to rebut the I.G.'s evidence showing that the Arkansas court accepted his guilty plea.12
  Petitioner did not assert in his written direct testimony that the Arkansas court did not accept his guilty plea.  ALJ Decision at 7

**Page 9**

n.7 (citing P. Ex. 1).  Petitioner presented no transcript of any court proceedings to show the Arkansas court did not accept his guilty plea.  He pointed to no provision in the Order (I.G. Ex. 4) indicating that his guilty plea was not accepted.  ALJ Decision at 8.  Petitioner, moreover, failed to identify any condition precedent in the plea agreement (I.G. Ex. 5) that would have precluded the Arkansas court from accepting his guilty plea at the time of his arraignment.  Although he argues he had the right to withdraw his guilty plea (before acceptance by the court), Petitioner presented no evidence that his guilty plea was ever withdrawn, rejected, or taken under advisement by the court.

Instead, Petitioner acknowledged in his written direct testimony that he negotiated a plea to reduce the charge against him to a misdemeanor.  P. Ex. 1 ¶ 11.  Petitioner, however, never offered any affidavit or written direct testimony explaining why, if not for the court's acceptance of his guilty plea, the court reduced the felony charge against him to a misdemeanor, imposed a sentence consistent with his guilty plea, and reserved judgment consistent with his plea agreement.  Petitioner essentially argues that the court accepted all of the elements of his plea agreement, except for the guilty plea on which the entire agreement was based.  We reject Petitioner's argument and find there was substantial evidence supporting the ALJ's conclusion that the Arkansas court accepted Petitioner's guilty plea.

We further reject Petitioner's contention that the Order (I.G. Ex. 4) did not show his guilty plea was accepted because it did not contain "a single variation of the word 'accept.'"  P. Br. at 8.  Petitioner presented no legal authority, and we are aware of none, requiring that the word "accept" (or some variation) appear in any order accepting a defendant's guilty plea.  In an effort to support his contention, Petitioner asserts that in *Travers v. Sullivan*, 791 F. Supp. 1471, 1477 (E.D. Wash. 1992), the district court "stated that the Utah court did not accept petitioner's plea because it only used the word 'accept' one time."  P. Br. at 7.  This is inaccurate and misleading.  The district court in *Travers* was not concerned about how many times the word "accept" appeared in the Utah court order, but the context in which it was used.

Indeed, Petitioner's reliance on *Travers v. Sullivan* is misplaced.  *Travers* involved a no- contest plea by a physician before a Utah court on a charge of knowingly filing a false Medicaid claim.  791 F. Supp. at 1473.  In his plea agreement, the physician agreed to pay restitution, investigation costs, and a civil penalty.  *Id*.  The plea agreement further provided that if the physician failed to make the agreed payments within 60 days, the Utah court would "accept" his no-contest plea and proceed to sentencing.  *Id*.  The plea agreement further provided that if the physician complied with the terms of the agreement, the court would allow him to withdraw his no-contest plea and dismiss the charge against him.  *Id*.  The Utah court entered an order approving the plea agreement "as a 1st offender disposition of the case," and took the physician's plea of "no contest" under advisement.  *Id*.  Later, the physician made the required payments, and the Utah court subsequently entered an order allowing the physician to withdraw his plea and

**Page 10**

dismissed the criminal charges.  *Id*.

The issue before the district court in *Travers* was whether the Utah court accepted the physician's no-contest plea within the meaning of section 1128(i)(3) of the Act, thus establishing a conviction for purposes of exclusion under section 1128(a)(1).  *See* 791 F. Supp. at 1476.  The district court found that a plea is "accepted" when a court "consents to receive it as an element of an arrangement to dispose of a pending criminal complaint."  *Id*. (adopting definition of "accept" applied by the ALJ).  In applying this definition, the district court found the physician's plea was never accepted.  *Id*. at 1477 ("The Utah court expressly took the [physician's] plea under advisement as part of a first-offender program.  This directly contradicts the [Secretary's] claim that the Utah court 'accepted' the [physician's] plea.").  The Utah court stated it would only "accept" the physician's no-contest plea and proceed to sentencing if he failed to satisfy the conditions of his plea agreement.  *Id*.  Based on the specific language in the Utah court order and the plea agreement itself, the district court concluded "substantial evidence did not exist ... to find that the Utah court accepted the [physician's] plea of no contest."  *Id*.13

Here, there is no evidence the Arkansas court took Petitioner's guilty plea under advisement or stated that it would only accept his guilty plea and proceed to sentencing if Petitioner failed to satisfy certain conditions of his plea agreement.  To the contrary, the Arkansas court received the plea and proceeded to implement each and every element of the plea agreement, including sentencing.  I.G. Ex. 4.  Although the Arkansas court agreed to reserve judgment for one year, reserving judgment was a negotiated term of the plea agreement, which the court plainly accepted.  Nothing in the record suggests the Arkansas court did not accept Petitioner's guilty plea or that the acceptance of his plea was conditioned on some future event.

As Petitioner recognized in his briefing, a judgment would be entered, if at all, after the court's acceptance of a plea.  P. Br. at 6 (describing "three phases" of a criminal plea under Ark. R. Crim. P. 26.1).  Acceptance of a plea, however, does not require the entry of judgment.  *See* Ark. R. Crim. P. 26.1(a) ("A defendant may withdraw his or her plea of guilty ... as a matter of right before it has been accepted by the court.  A defendant may not withdraw his or her plea of guilty ... as a matter of right after it has been accepted by the court; however, before entry of judgment, the court in its discretion may allow the defendant to withdraw his or her plea to correct a manifest injustice . . . .  A plea of guilty . . . may not be withdrawn under this rule after entry of judgment.").  In other words, acceptance of a plea by the court and the subsequent entry of judgment are different events with different legal consequences.  As the ALJ recognized, a court need not enter

**Page 11**

judgment in order to accept a plea.  ALJ Decision at 8.

Petitioner argues that "more than a year has passed" since his arraignment "and the Arkansas court has not prosecuted any charges against [him]."  P. Br. at 9.14
  Indeed, nothing in the record suggests Petitioner was prosecuted for Medicaid fraud after his arraignment; however, that fact, if true, is entirely consistent with the Arkansas court having accepted his guilty plea.  I.G. Ex. 4.  There is more than substantial evidence that the Arkansas court consented to receive Petitioner's guilty plea as an element of an arrangement to dispose of his pending criminal complaint, which disposition included an agreement to reserve judgment for one year.

For all of these reasons, we find the ALJ's conclusion that Petitioner's guilty plea was accepted by the court within the meaning of section 1128(i)(3) of the Act is supported by substantial evidence and contains no legal error.

***2.  The ALJ properly rejected Petitioner's "deferred prosecution" argument.***

Petitioner further argues that the ALJ erred by not requiring the I.G. to prove his plea agreement was *not* a deferred prosecution agreement.  P. Br. at 13.  The I.G. had no burden to disprove Petitioner's defenses; however, we interpret Petitioner as arguing that the I.G. did not carry its burden of proving that Petitioner was convicted within the meaning of section 1128(i)(4).  As further explained below, this argument is irrelevant and immaterial because the ALJ did not find Petitioner was convicted within the meaning of section 1128(i)(4).

Petitioner argued, and the I.G. does not dispute, that there is a legal distinction between a "deferred adjudication" and a "deferred prosecution," as recognized in *Travers v. Shalala*, 20 F.3d 993, 997 (9th Cir. 1994) ("[A] deferred adjudication is a conviction under [section 1128(i)(4)], a deferred prosecution is not.").  Petitioner's argument concerning this legal distinction is premised on the unfounded assumption that the ALJ concluded he was convicted within the meaning of section 1128(i)(4).  P. Br. at 10-11.  The ALJ, however, made no such determination.  The ALJ recognized an individual is "convicted" within the meaning of section 1128(i)(4) if that individual enters into "a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld"; however, the ALJ did not reach the question of whether Petitioner was convicted within the meaning of section 1128(i)(4).  ALJ Decision at 7 n.6, 8.

**Page 12**

We decline to review an issue that was not decided by the ALJ and is not necessary to resolve this appeal.  The I.G. acknowledged in its brief that because the ALJ made no determination regarding section 1128(i)(4), the Board need not address the issue.  I.G. Brief in Opposition to Appellant's Appeal at 16.  Because the ALJ's conclusion that Petitioner was "convicted" within the meaning of section 1128(i)(3) is supported by substantial evidence and free of legal error, we need not decide whether there was substantial evidence supporting a conviction within the meaning of section 1128(i)(4).  *See* *Leon Brown, M.D.*, DAB No. 1208, at 2 (1990) ("[A]n individual need only be 'convicted' under one of the four definitions in section 1128(i).").15

Even if the ALJ had concluded that Petitioner was convicted within the meaning of section 1128(i)(4), Petitioner's contention that he had a "deferred prosecution" agreement has no merit.  P. Br. at 9-11.  Petitioner contends he had a deferred prosecution agreement because he was "free" to withdraw his plea since it was purportedly not accepted by the Arkansas court.  P. Br. at 9-11 (citing Ark. R. Crim. P. 26.1 and *Travers*, 20 F.3d at 997).  This argument fails for the reasons already discussed:  there is substantial evidence supporting the ALJ's determination that the Arkansas court accepted Petitioner's guilty plea.  *See supra* at 7-10.

Still further, *Travers* did not hold that the existence of a deferred prosecution agreement hinges on whether a criminal defendant can withdraw his plea.  *See* 20 F.3d at 997.  As the Board has previously explained, a "deferred prosecution" as described in *Travers* requires two elements:

(1)  the deferral of the initiation of criminal charges, and

(2)  the ability of the accused to enter or persist in a plea of not guilty and demand a trial if the agreement with the prosecutor is voided.

*Morand*, DAB No. 2436, at 6.  The evidence in the record does not support a deferred prosecution agreement because the initiation of criminal charges was not deferred.  *See* I.G. Ex. 5, at 1 ("[Petitioner] is charged with one count of Class C felony Medicaid fraud."); *id.* at 2 ("[I]n exchange for a guilty plea, the charge will be reduced to a Class A misdemeanor."); I.G. Ex. 4, at 1 ("[Petitioner] entered a negotiated plea of guilty to the charge of Medicaid fraud, which is a Class A misdemeanor.").  Still further, Petitioner failed to present evidence of any agreement with the AAG to defer the initiation of

**Page 13**

criminal charges.16
  We find no error in the ALJ's conclusion that Petitioner had no "deferred prosecution" agreement.  ALJ Decision at  9 ("Not only has Petitioner failed to acknowledge that he does not meet the first element of the *Travers* analysis, but he has not factually demonstrated that he entered into a deferred prosecution agreement that would render 1128(i) inapplicable for purposes of exclusion.").

***3.  Petitioner's offense related to the delivery of a health care item or service.***

Turning to the second element that must be met to support an exclusion under section 1128(a)(1), the ALJ found that "Petitioner's Medicaid fraud is unquestionably a criminal offense *related* to the delivery of a health care item or service under . . . a state health care program, to include the performance of *management or administrative services* relating to the delivery of items or services in a state Medicaid program."  ALJ Decision at 11 (emphasis in original) (citing 42 U.S.C. § 1320a-7(a)(1)); *see also* 42 C.F.R. § 1001.101(a).  The Board has previously held that the offense of Medicaid fraud under Arkansas law satisfies the related-to-the-delivery element of section 1128(a)(1).  *See* *Olandis Moore*, DAB No. 2963, at 5 (2019) (collecting cases).  Petitioner does not contest this element of the ALJ's decision, and we find it is legally correct and supported by substantial evidence.

**Page 14**

Conclusion

The ALJ concluded the I.G. had a lawful basis to exclude Petitioner for the minimum period of five years based on his conviction of a criminal offense related to the delivery of an item or service under the Arkansas Medicaid program.  We affirm the ALJ's decision to sustain the I.G.'s five-year exclusion of Petitioner from federal health programs pursuant to section 1128(a)(1) of the Act because it is supported by substantial evidence and free of legal error.


          /s/
        Constance B. Tobias

                      Board Member
          /s/
        Susan S. Yim

                      Board Member
          /s/
        Michael Cunningham

                      Presiding Board Member
      1. Section 1128 of the Act is codified at 42 U.S.C. § 1320a–7.  The current version of the Act can be found at http://www.socialsecurity.gov/OP_Home/ssact/ssact-toc.htm.  Each section of the Act on that website contains a reference to the corresponding United States Code chapter and section.  Cross-reference tables for the Act and the United States Code can be found at http://uscode.house.gov/table3/1935_531.htm and https://www.ssa.gov/OP_Home/comp2/G-APP-H.html. back to note 1
                      2. The Secretary has delegated to the I.G. the authority "to suspend or exclude certain health care practitioners and providers of health care services from participation in these programs."  48 Fed. Reg. 21,662 (May 13, 1983).  The I.G., therefore, enforces the mandatory exclusion provisions in the Act on behalf of the Secretary.  See 42 C.F.R. §§ 1001.101, 1005.1. back to note 2
                      3. Background information is drawn from the ALJ Decision and the record before the ALJ and is not intended to substitute for the ALJ's findings. back to note 3
                      4. Petitioner acknowledges he negotiated a plea deal to reduce the charge against him to a misdemeanor.  P. Ex. 1 ¶ 11 ("I negotiated a plea to pay restitution, fine, and court costs in exchange of reducing the claim to a misdemeanor that will be dismissed on June 4, 2020.").  No evidence was presented as to whether judgment was subsequently entered against Petitioner, or whether his criminal case was eventually dismissed. back to note 4
                      5. The preponderance of the evidence standard "simply requires the trier of fact to believe that the existence of a fact is more probable than its nonexistence before [she] may find in favor of the party who has the burden to persuade the [judge] of the fact's existence."  Concrete Pipe & Prods., Inc. v. Constr. Laborers Pension Tr., 508 U.S. 602, 622 (1993) (internal quotation marks omitted). back to note 5
                      6. With one exception, the ALJ admitted all of the documentary exhibits submitted by the parties.  ALJ Decision at 2-5.  The ALJ excluded as immaterial and irrelevant Petitioner's Exhibit 4, which related to a criminal complaint Petitioner initiated against a former employee.  Id. at 5.  Petitioner did not challenge the ALJ's evidentiary rulings in this appeal. back to note 6
                      7. Although the ALJ noted an individual is considered "convicted" under section 1128(i)(4) of the Act if the individual "entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld," see ALJ Decision at 7 n.6 (quoting 42 U.S.C. § 1320a-7(i)(4)), the ALJ did not determine whether Petitioner was "convicted" within the meaning of section 1128(i)(4). back to note 7
                      8. The Guidelines are available at http://www.hhs.gov/dab/divisions/appellate/guidelines/procedures.html. back to note 8
                      9. The length of the exclusion was not reviewable because five years is the statutory minimum under section 1128(c)(3)(B).  See 42 C.F.R. § 1001.2007(a)(2); see also ALJ Decision at 11-12. back to note 9
                      10. Section 1128(h) defines the term "State health care program" to include "a State plan approved under title XIX" of the Social Security Act – that is, a state's federally approved Medicaid program.  Tamara Brown, DAB No. 2195, at 6-7 (2008). back to note 10
                      11. Section 16-10-305(b)(1) of the Arkansas Code specifically states that "[t]he costs set forth in this section shall be imposed at the conclusion of any criminal case ... that does not end in an acquittal, dismissal, or ... an order nolle prosequi."  The fact that the Arkansas court imposed court costs in its June 4, 2019 Order further indicates that the criminal case against Petitioner was concluded based on the acceptance of his guilty plea. back to note 11
                      12. Petitioner mistakenly asserts that the I.G. had "to prove beyond a preponderance of the evidence that Petitioner was convicted as defined by the Social Security Act."  P. Br. at 3 (emphasis added).  Petitioner also complains that the ALJ Decision does not reference the I.G.'s burden of proof or whether the I.G. met that burden; however, the ALJ recognized from the outset of this case that the "standard of proof in this proceeding is a preponderance of the evidence," and ordered that the I.G. "will bear the burden of proof as to the basis for exclusion."  Standing Order § 4; see 42 C.F.R. § 1005.15(c) (providing "the ALJ will allocate the burden of proof as the ALJ deems appropriate" in exclusion cases based on 42 C.F.R. § 1001.101), (d) (stating that the "burden of persuasion will judged by a preponderance of the evidence").  Based on the record and the decision itself, we are satisfied the ALJ applied the appropriate burden of proof and standard of proof, consistent with her Standing Order and applicable regulations. back to note 12
                      13. The district court nevertheless upheld the exclusion of the physician finding no genuine dispute of fact that the physician participated in Utah's first-offender program and, therefore, was "convicted" within the meaning of section 1128(i)(4) of the Act.  See 791 F. Supp. at 1480, aff'd, Travers v. Shalala, 20 F.3d 993 (9th Cir. 1994). back to note 13
                      14. No evidence was presented that a judgment was entered against Petitioner, or that his criminal case was dismissed after one year.  See supra n.4.  Even if his case was subsequently dismissed, that would not change the outcome here because the Arkansas court accepted his guilty plea at the time of his arraignment.  I.G. Ex. 4. back to note 14
                      15. The I.G. presented evidence and argument from which the ALJ could have concluded Petitioner was "convicted" within the meaning of section 1128(i)(4); however, since the ALJ did not reach the issue and the I.G. did not ask the Board to review it, we will not consider the issue here.  See 42 C.F.R. § 1005.21(e). back to note 15
                      16. In the order permitting Petitioner to file a sur-reply, the ALJ directed Petitioner to submit, as a proposed exhibit, "any evidence in his possession" of a deferred prosecution agreement.  ALJ Order (5/19/2020).  Petitioner presented no such evidence supporting the existence of a deferred prosecution agreement. back to note 16 Back to top
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