Lasher v. Dep't of Health & Human Servs., Civil Action No. 17-1746 (ABJ)

• Court: United States District Courts. United States District Court (Columbia)
• Citation: 369 F.Supp.3d 243
• Docket Number: Civil Action No. 17-1746 (ABJ)
• Parties: Lena LASHER, Plaintiff, v. DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.
• Decision Date: 27 March 2019

369 F.Supp.3d 243

Lena LASHER, Plaintiff,
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.

Civil Action No. 17-1746 (ABJ)

United States District Court, District of Columbia.

Signed March 27, 2019

369 F.Supp.3d 244

Lena Lasher, High Bridge, NJ, pro se.

Scott Leeson Sroka, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendant.

MEMORANDUM OPINION

AMY BERMAN JACKSON, United States District Judge

Plaintiff Lena Lasher ("Lasher") has brought this action under 42 U.S.C. § 405(g) challenging the decision of the Secretary of Health and Human Services ("DHHS") to exclude her from participation in federal health care programs for

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a period of 10 years.¹ This matter is before the Court on the Defendants' Motion to Dismiss or, in the Alternative, for Summary Judgment. [Dkt. 14.] For the reasons discussed below, the Court will grant the motion. In light of Lasher's conviction of multiple counts involving fraud in health care related federal programs, the sentence she received, and all of the factors considered by the agency, her exclusion for the ten year period was reasonable, supported by substantial evidence, and consistent with the applicable law. Lasher's efforts to challenge her underlying conviction in this proceeding are misplaced, and none of the constitutional violations she has alleged provide a basis to alter the agency's decision.

I. BACKGROUND

A. Exclusion from Federal Health Care Programs

There are "certain bases upon which individuals ... must[ ] be excluded from participation in Medicare, Medicaid and all other Federal health care programs." 42 C.F.R. § 1001.1(a). One such basis is an individual's conviction of a program-related offense:

The Secretary shall exclude ... from participation in any Federal health care program ... [a]ny individual or entity that has been convicted for an offense which occurred after August 21, 1996, 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.

42 U.S.C. § 1320a-7(a)(3) ; see 42 C.F.R. § 1001.101. An individual is deemed "convicted of a criminal offense ... when a judgment of conviction has been entered against [her] 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." 42 U.S.C. § 1320a-7(i)(1).

This exclusion authority is delegated to DHHS' Inspector General ("IG"). See 48 Fed. Reg. 21662 (May 13, 1983). The IG issues a notice of exclusion which specifies the period of exclusion and its effective date. See 42 U.S.C. § 1320a-7(c), (f)(1).

The mandatory exclusion period lasts a minimum of five years. 42 U.S.C. § 1320a-7(c)(3)(B) ; 42 C.F.R. § 1001.102(a). However, if aggravating factors are found, the IG may extend the mandatory exclusion period. See 42 C.F.R. § 1001.102(b). Aggravating factors include "acts that resulted in conviction ... committed over a period of one year or more," 42 C.F.R. § 1001.102(b)(2), and a sentence including incarceration, 42 C.F.R. § 1001.102(b)(5). If aggravating factors are found to exist, the IG may consider "mitigating factors ... as a basis for reducing the period of exclusion to no less than 5 years." 42 C.F.R. § 1001.102(c). For example, the IG may consider a sentencing court's "determin[ation] that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability," 42 C.F.R. § 1001.102(c)(2), as a mitigating

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factor. An individual who has been excluded may apply for termination of the exclusion. See 42 U.S.C. § 1320a-7(g).

An individual whom the IG has excluded may request a hearing before an administrative law judge ("ALJ") of the Civil Remedies Division ("CRD") of DHHS' Departmental Appeals Board ("DAB"), see 42 U.S.C. § 1320a-7(f)(1) ; 42 C.F.R. § 1005.2(a), "on the issues of whether: (i) [t]he basis for the imposition of the sanction exists, and (ii) [t]he length of exclusion is unreasonable." 42 C.F.R. § 1001.2007(a)(1). The parties to this proceeding are the petitioner and the IG. 42 C.F.R. § 1005.2(b). A hearing request must be submitted to the DAB in writing, 42 C.F.R. § 1005.2(c), and it shall "contain a statement as to the specific issues or findings of fact and conclusions of law in the notice letter with which the petitioner ... disagrees, and the basis for ... her contention that the specific issues or findings and conclusions were incorrect." 42 C.F.R. § 1005.2(d).

Generally, the parties may conduct discovery, enter into stipulations of facts or law, introduce evidence, present and cross-examine witnesses, and make oral arguments to the ALJ. See 42 C.F.R. § 1005.3. In discharging his or her duties to "conduct a fair and impartial hearing, avoid delay, maintain order and assure that a record of the proceeding is made," 42 C.F.R. § 1005.4(a), the ALJ may, among other things, "[r]eceive, rule on, exclude or limit evidence," 42 C.F.R. § 1005.4(b)(10), and "[c]onduct any conference ... or hearing in person or, upon agreement of the parties, by telephone." 42 C.F.R. § 1005.4(b)(13). Ordinarily, witness testimony is given orally. 42 C.F.R. § 1001.16(a). However, the ALJ may admit non-expert testimony "in the form of a written statement." 42 C.F.R. § 1005.16(b).

The ALJ conducts at least one prehearing conference, 42 C.F.R. § 1005.6(a), during which stipulations, witnesses, scheduling, discovery and other matters are discussed. See 42 C.F.R. § 1005.6(b). After the prehearing conference, the ALJ "issue[s] and order containing the matters [the parties have] agreed upon" and any matters the ALJ had ordered during the prehearing conference. 42 C.F.R. § 1005.6(c).

The ALJ may issue a decision based on the written record "if the parties do not identify any proposed witnesses, do not offer the written direct testimony of any witnesses when ordered to do so, or do not request an opportunity to cross-examine a witness whose written direct testimony has been offered." Administrative Record ("A.R.") at 45 (CRD Proc. 19(d) ). "The ALJ will issue an initial decision based only on the record, which will contain findings of fact and conclusions of law." 42 C.F.R. § 1005.20(a).

The petitioner may appeal the ALJ's initial decision to DAB's Appellate Division. 42 C.F.R. § 1005.21(a). Along with the notice of appeal, the petitioner must submit "a written brief specifying exceptions to the initial decision and reasons supporting the exceptions." 42 C.F.R. § 1005.21(c). "DAB will not consider any issue not raised in the parties' briefs, nor any issue in the briefs that could have been raised before the ALJ but was not." 42 C.F.R. § 1005.21(e). Nor may the DAB revisit an underlying criminal conviction:

When the exclusion is based on the existence of a criminal conviction ... by Federal, State or local court, a determination by another Government agency, or any other prior determination where the facts were adjudicated and a final decision was made, the basis for the underlying conviction ... is not reviewable and the individual or entity may not

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collaterally attack it either on substantive or procedural grounds in this appeal.

42 C.F.R. § 1001.2007(d). "The standard of review on a disputed issue of fact is whether the initial decision is supported by substantial evidence on the whole record," and the standard of review on a disputed issue of law is "whether the initial decision is erroneous." 42 C.F.R. § 1005.21(h). DAB issues its decision on appeal to the parties along with a notice "describing the right of any petitioner or respondent who is found liable to seek judicial review." 42 C.F.R. § 1005.21(i) ; see 42 U.S.C. § 1320a-7(f).

B. Lasher's Criminal Convictions²

According to a Superseding Indictment issued on April 2, 2015 by a grand jury in the United States District Court for the Southern District of New York ("SDNY"), Lasher, a pharmacist, participated in an internet drug distribution scheme from 2010 through November 2012. Defs.' Statement of Material Facts To Which There Is No Genuine Dispute ("Defs.' Facts") ¶ 1; A.R. at 712-24. A jury convicted Lasher of five offenses: conspiracy to misbrand prescription drugs, misbranding drugs, conspiracy to commit mail and wire fraud, mail fraud, and wire fraud. Defs.' Facts ¶ 2; A.R. at 726-27. SDNY imposed a three-year prison sentence on each count to be served concurrently. Defs.' Facts ¶ 2; A.R. at 728. The court also ordered a two-year term of supervised release upon Lasher's release from imprisonment. A.R. at 729.

C. Lasher's Proceedings Before DHHS' Departmental Appeals Board

On March 31, 2016, the IG sent Lasher a notice of his decision...