A State Conviction for “Patient Neglect” Will Result in Mandatory Exclusion from Participation in Federal Health Benefit Programs 

The Department of Health and Human Services (HHS), Office of Inspector General (OIG) may be required by law under Section 1128 of the Social Security Act to exclude individuals and entities from participating in Federal health care benefits programs if an individual or entity has been convicted of certain crimes or has engaged in certain conduct.  Depending on the nature of an adverse action, the OIG’s statutory obligation may be to impose a mandatory exclusion or permissive.  This article examines the impact of a State-based conviction for patient neglect or abuse and discusses the OIG’s obligations to exclude an individual when faced with these facts.

I. Case Background:

On January 31, 2017, a New York Licensed Practical Nurse (LPN) pleaded guilty to violating New York Public Health Law §§ 12-b(2) and 2803-d(7), both of which were misdemeanors, as well as to disorderly conduct.  By pleading guilty, LPN admitted that they, “willfully violated a provision of the Public Health Law by subjecting [a nursing home Resident]. . . to an act of negligent [sic] by failing to provide that person with timely, consistent, safe, adequate and appropriate services, treatment and care.”

Under the plea agreement, if the defendant completed a 12-week elder abuse program and agreed not to provide health care to elderly persons for a period of a year she would be eligible to receive a, “conditional discharge on a violation . . . [w]ith a $250 fine.” On January 31, 2018, the New York Supreme Court held a sentencing hearing and found that the defendant had met these two conditions. They therefore vacated the defendant’s guilty plea (except for the disorderly conduct charge, which was reduced to a “violation”). The New York Supreme Court then entered a conditional discharge and imposed a $250 fine.

II. Does a State Misdemeanor Conviction Related to Patient Abuse or Neglect Trigger the Individual’s Exclusion from Federal Health Care Programs?

When analyzing the possible exclusion impact of an adverse event (such as a criminal conviction or a State Medical board disciplinary action), you must first determine whether the event triggers either a mandatory or permissive exclusion of an individual or entity from participation in Medicare, Medicaid and other Federal health benefits programs. 

As a recap, the LPN in this case pleaded guilty to two misdemeanor violations of New York Public Health Law §§ 12-b(2) and 2803-d(7), and to a count of disorderly conduct.  Since the underlying facts were that the LPN neglected a patient under their care, the OIG was obligated to mandatorily exclude the LPN from participation in Federal health programs under 42 U.S.C. §1320a-7(a)(2).

III. Under 42 U.S.C. § 1320a-7(a)(2), Must a “Conviction” be a Federal Offense in Order to Trigger a Mandatory Exclusion Action?

As a plain reading of 42 U.S.C. § 1320a-7(a)(2) reflects, “any individual or entity that has been convicted, under Federal or State law, of a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service…” shall be excluded from participation in any Federal health care program. The LPN’s conviction under New York State law would still trigger their mandatory exclusion from Federal health care programs.

IV. What is Required in Order for a Conviction Under42 U.S.C. § 1320a-7(a)(2) to be “Related to Neglect or Abuse” of Patients in Connection with the Delivery of a Health Care Item or Service:

A mere conviction isn’t enough to trigger a mandatory exclusion action under 42 U.S.C. § 1320a-7(a)(2). It must also be related to the neglect or abuse of patients in connection the delivery of a health care item or service. What is meant by the term “related to neglect or abuse”? As discussed in the Federal Register, it is a:

“legal determination to be made by the Secretary [for Health and Human Services] based on the facts underlying the conviction.  Further, the offense that is the basis for the exclusion need not be couched in terms of patient abuse or neglect . . .  Since a determination as to whether an offense related to patient abuse or neglect is fact-intensive, we feel it is most appropriate for the OIG to exercise its authority to make such determinations on a case-by-case basis.” 

In other words, it really comes down to an assessment of the facts in each case.  As part of their plea agreement, the defendant admitted that they, “willfully violated a provision of the Public Health Law by subjecting [a nursing home Resident]. . . to an act of negligent [sic] by failing to provide that person with timely, consistent, safe, adequate and appropriate services, treatment and care.”  In light of the facts in this case, there is little argument that the defendant’s conviction was not related the neglect or abuse of a patient.

V. Does a “Conviction” Under 42 U.S.C. § 1320a-7(a)(2) Have to be a Felony in Order to Trigger a Mandatory Exclusion Action?

As 42 U.S.C. § 1320a-7(a)(2) reflects, the framers of this statutory provision did not limit mandatory exclusion to only “felony” convictions.  State law misdemeanor convictions relating to neglect or abuse of a patient also require that the offending individual or entity be subjected to mandatory exclusion.

VI. Under42 U.S.C. § 1320a-7(a)(2) Does a Conviction have to be Related to Health Care Services Provided Under Medicare, Medicaid or Another Federal Health Care Program?

42 U.S.C. § 1320a-7(a)(2) is codified in Code of Federal Regulations (C.F.R.) at 42 C.F.R. §1001.101(b).  As this regulation expressly notes, the OIG is required to exclude an individual or entity that has been convicted of a criminal offense under Federal or State law related to the neglect or abuse of a patient “. . . whether or not reimbursed under Medicare, Medicaid or any Federal health care program.”  In summary, a qualified conviction related to the neglect or abuse of a patient, in connection with the delivery of a health care item or service will result in mandatory exclusion, even if the service is covered by a private payor, paid for in cash by a patient or not paid at all.

VII.Is Exclusion Required When a Misdemeanor Conviction is Effectively Discharged by the Court?

In this case, the defendant reportedly satisfied the two conditions established at her sentencing in order to have the misdemeanor discharged by the Court. Under 42 U.S.C. § 1320a-7(i), an individual or entity is considered to be “Convicted” of a criminal offense:

(1) When a judgment of conviction has been entered against the individual or entity 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 or entity by a Federal, State, or local court;

(3) When a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court; or

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld.

Despite the fact that the defendant ultimately satisfied the conditions set out in their plea agreement to have the misdemeanor charges discharged by the New York Supreme Court, the record in this case clearly established that the defendant had, in fact, pleaded guilty to a crime related to the neglect or abuse of a patient.  Therefore, the OIG mandatorily excluded the defendant from participation in Medicare, Medicaid and Federal health care programs for a period of 5 years, based on the requirements set out under 42 U.S.C. § 1320a-7(a)(2).  The defendant appealed the OIG’s exclusion action, arguing that the discharge of the misdemeanor charges did not constitute a conviction under 42 U.S.C. § 1320a-7(i).

On February 5, 2020, the Departmental Appeals Board issued its ruling in this case.  As the opinion reflects, the presiding Administration Law Judge (ALJ) affirmed the OIG’s exclusion of the defendant for a period of 5 years.   As the opinion reflects, the ALJ in this case found that the defendant was convicted for purposes of exclusion.

While the presiding ALJ found that the defendant’s guilty plea to the misdemeanor charges cited was a conviction, it is worth noting that the ALJ further found that even if, for the sake of argument, the discharged misdemeanor charges did not constitute a conviction, the remaining conviction of a “violation” would still trigger the mandatory exclusion obligations of 42 U.S.C. § 1320a-7(a)(2).

VIII.Conclusion:

As the analysis above reflects, there are a number of issues to be considered by a defendant before he or she enters into a plea agreement.  The fact that the ALJ in this case found that a conviction for a mere violation for disorderly conduct (that did not constitute a misdemeanor or a felony) would still trigger a mandatory exclusion action, may very well constitute a dangerous new precedent for exclusion actions by the OIG.

Are you properly screening your employees, contractors, agents and vendors against all available Federal and State exclusion databases each month?  The failure to do so can result in overpayments, Civil Monetary Penalties and can result in violations of the civil False Claims Act.

Need assistance? Give the folks at Exclusion Screening a call at 1 (800) 294-0952 or fill out the form below!

For an in-depth provider’s guide to OIG Exclusions, visit our guide, A Provider’s Guide to OIG Exclusions

For a shorter summary of OIG Exclusions, visit our article What is an OIG Exclusion?