Lasher v. Dep't of Health & Human Servs.
Lasher v. Dep't of Health & Human Servs.
Opinion of the Court
Plaintiff Lena Lasher ("Lasher") has brought this action under
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."
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
This exclusion authority is delegated to DHHS' Inspector General ("IG"). See
The mandatory exclusion period lasts a minimum of five years. 42 U.S.C. § 1320a-7(c)(3)(B) ;
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) ;
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
The ALJ conducts at least one prehearing conference,
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."
The petitioner may appeal the ALJ's initial decision to DAB's Appellate Division.
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 *247collaterally attack it either on substantive or procedural grounds in this appeal.
B. Lasher's Criminal Convictions
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 to exclude her from participating in Medicare, Medicaid, and all other federal health care programs:
This is to notify you that you are being excluded from participation in any capacity in the Medicare, Medicaid, and all Federal health care programs for a minimum period of 10 years .... This exclusion is due to your felony conviction as defined in [ 42 U.S.C. § 1320a-7(i) ] in the United States District Court for the Southern District of New York, of a criminal offense 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, including the performance of management or administrative services relating to the delivery *248of such items or services, or with respect to or any act or omission in a health care program ... operated or financed by any Federal, State, or local Government agency.
A.R. at 18 (emphasis in original); see Defs.' Facts ¶ 3.
The ALJ conducted the prehearing conference by telephone on July 20, 2016, A.R. at 54, and issued her Order and Schedule for Filing Briefs and Documentary Evidence on the following day. See generally A.R. at 54-60. Among other requirements, the ALJ instructed the parties to file short-form briefs, A.R. at 56, preprinted versions of which accompanied her order, see A.R. at 61-65 (petitioner), 66-70 (IG). If the parties were to offer witness testimony, the ALJ ordered them to "do so in the form of written direct testimony." A.R. at 57 (emphasis removed). The ALJ then limited the hearing to the cross-examination of witnesses whose direct testimony had been submitted in writing. A.R. at 57. In addition, the ALJ "strongly caution[ed]" the parties to be "fully cognizant that written direct testimony [would] not be accepted for the purpose of being a collateral attack on any underlying conviction[.]" A.R. at 57.
The IG submitted his informal brief and supporting documents on August 24, 2016. See generally A.R. at 71-81. He argued that Lasher's "role in a substantial internet pharmacy scheme," A.R. at 72, and her subsequent criminal conviction, A.R. at 73, supported his exclusion decision. The IG further argued that Lasher's 10-year exclusion was reasonable based on two aggravating factors: SDNY imposed a three-year term of incarceration and Lasher's conduct occurred over a period of more than one year. See AR at 74-78.
On September 28, 2016, the ALJ granted the motion of Lasher's counsel to withdraw from representation and extended the deadline for Lasher's short-form brief and supporting exhibits to October 28, 2016. A.R. at 92. On October 20, 2016, Lasher submitted her brief and supporting documents. See generally A.R. at 98-112, 548-663. She conceded her conviction of a felony for which exclusion is required, see A.R. at 98, and asserted that the length of her exclusion was unreasonable. See A.R. at 112.
The singular theme of Lasher's submissions was her purported innocence. Her brief began with an assertion that she "was wrongly convicted." A.R. at 98. Generally, Lasher denied any wrongdoing on her part, and she claimed to have complied with all applicable laws and regulations. See, e.g. , A.R. at 98, 102. She blamed her codefendants for all illegal acts, see, e.g. , A.R. at 108, and claimed that their wrongful conduct had been improperly attributed to her. Lasher also faulted the presiding judge's unfavorable rulings on evidentiary questions, see, e.g. , A.R. at 99, 104, and the prosecutors' allegedly misleading statements. See, e.g. , A.R. at 100, 108.
On January 30, 2017, the ALJ issued the decision on behalf of the Civil Remedies Division. See generally A.R. at 1-10. She concluded "that the IG [had] a basis for excluding [Lasher] because she was convicted of five felony offenses, to include conspiracy to commit wire and mail fraud, mail fraud, and wire fraud while engaged as a pharmacist in a scheme to illegally dispense drugs." A.R. at 1. "Being that [Lasher] was found guilty of five offenses related to her role in a scheme to illegally dispense drugs, to include conspiracy to commit fraud and the actual commission of fraud, her convictions [were] undoubtedly related to fraud" and these offenses were " 'in connection with' the delivery of a health care item or service" for purposes of 42 U.S.C. § 1320a-7(a)(3). A.R. at 7. Notwithstanding Lasher's strong belief that she was wrongly convicted, the ALJ had no authority to entertain a collateral attack on her criminal convictions. See A.R. at 8 (citing
Undaunted, in February 2017, Lasher appealed the ALJ's decision to the DAB's Appellate Division. See generally A.R. 221-48. Lasher maintained that she had been wrongly convicted, see A.R. at 221, and she requested a hearing in order to present "expert witness [testimony] to corroborate [her own] testimony and that of the video recordings" which she claimed would show that she did not label, store, destroy or count pills improperly. A.R. at 221; Defs.' Facts ¶ 11. The IG opposed the appeal, arguing that the ALJ's decision was supported by substantial evidence in the record. See A.R. at 249-57; Defs.' Facts ¶ 11. And the IG reiterated that "[n]either the ALJ nor the [BAD] may consider evidence which would only be relevant to a prohibited collateral attack on [Lasher's] underlying conviction." A.R. at 254 (citing
Lasher submitted a second brief to the BAD on April 3, 2017, arguing that the IG violated rights protected under the Fourth, Fifth and Sixth Amendments to the United States Constitution by refusing to allow a collateral attack on her conviction. See A.R. at 276. Further, she argued that she should be allowed to submit evidence of her innocence, that the ALJ wrongfully denied her an in-person hearing, and that her trial counsel was ineffective. See generally A.R. at 276-78, 286, 288. Not surprisingly, the IG noted that Lasher's "arguments and exhibits failed to rebut the substantial evidence and law that support her ten-year exclusion, and instead proposed to raise prohibited collateral attacks." Defs.' Facts ¶ 13; see A.R. at 254, 515.
*250On June 28, 2017, the Appellate Division affirmed the ALJ's decision, see generally A.R. at 537-43, finding that Lasher "has not identified any basis for reversing the ALJ Decision," A.R. at 538. Lasher's "attempts to show that she was wrongly convicted are collateral attacks on the validity of her criminal conviction on which the exclusion was based ... are expressly forbidden by regulation," A.R. at 538, and the ALJ did not err by refusing to consider Lasher's constitutional claims, A.R. at 539.
II. DISCUSSION
Lasher, who describes herself as "an Asian female of Vietnamese descent," Compl. ¶ 5; Objection to Defs.' Mot. to Dismiss or, in the Alternative, for Summ. J. ("Pl.'s Opp'n") at 2 (page numbers designated by ECF, contends that she "was ... excluded because of her race, national origin, and sex," Compl. ¶ 2; and that rights protected under the Fifth and Sixth Amendments to the United States Constitution were violated during both the criminal proceedings and the administrative proceedings regarding her exclusion from federal health care programs. See
"As exclusions from participation in federal health care programs are subject to the same judicial review as decisions regarding social security benefits, see 42 U.S.C. § 1320a-7(f)(1), the standard of review derives from
The application of that standard to this record makes short work of the resolution of Defendants' motion. The fact of Lasher's conviction for crimes related to fraud in connection with the delivery of a health care item or service is undisputed. Notwithstanding Lasher's insistence that she did no wrong, the Court's role "is to review the validity of the exclusion," not the underlying criminal conviction, Travers v. Sullivan ,
Similarly, the record fully supports extension of the exclusion period from five to 10 years. There is no dispute that Lasher's criminal conduct took place over more than one year and that SDNY imposed a prison sentence. These two facts qualify as aggravating factors, see
Lasher is no more successful with respect to her constitutional claims. Lasher cannot credibly claim a violation of procedural due process, "[t]he fundamental requirement" of which "is the opportunity to be heard at a meaningful time and in a meaningful manner." Mathews v. Eldridge ,
Lasher's claims of discrimination and violation of her right to equal protection are unavailing. There is no support in the record for Lasher's assertion that the decisions of the IG, ALJ, or the DAB were based in any way on Lasher's race, gender or national origin. Lasher herself concedes that the IG had a valid basis for excluding her, and her criminal conviction was "the triggering event" for the IG's imposition of a mandatory exclusion. Travers ,
*252III. CONCLUSION
The Court concludes that there is substantial evidence in the record to support defendant's decision to exclude Lasher from participation in federal health care programs for a 10-year period based on her criminal conviction, and that defendant correctly applied the relevant legal standards. Accordingly, will Court grants defendants' motion, and a separate Order will issue.
Because Lasher appeals an administrative decision, this action proceeds against the Secretary of DHHS. See 42 U.S.C. § 1320a-7(f)(1). The Court will dismiss the Departmental Appeals Board, Christopher S. Randolph, Susan S. Yim, Sheila Ann Hegy and U.S. Department of Justice as party defendants.
The Second Circuit, which affirmed Lasher's criminal convictions, described her criminal history as follows:
Defendant-Appellant Lena Lasher was the supervising pharmacist at two Pennsylvania pharmacies that filled thousands of prescriptions for addictive painkillers issued over the Internet by doctors who had never met or consulted with their patients. In filling hundreds of prescriptions daily, Lasher and her employees, among other things, poured pills into vials without counting them, re-dispensed returned medication to new customers without properly inspecting the pills, and altered the instructions on pharmacy labels such that they did not correspond to what any physician had ordered.
On September 10, 2015, following a ten-day trial, Lasher was found guilty by a jury of conspiracy to misbrand drugs held for sale in violation of18 U.S.C. § 371 (Count I); introducing misbranded drugs into interstate commerce in violation of21 U.S.C. §§ 331 (a) and 333(a)(2) and18 U.S.C. § 2 (Count II); conspiracy to commit mail and wire fraud in violation of18 U.S.C. § 1349 (Count III); and mail and wire fraud in violation of18 U.S.C. §§ 1341 , 1343, and 2 (Counts IV and V). She was then sentenced principally to three years' imprisonment.
United States v. Lasher ,
The March 31, 2016 notice stated in error that the underlying acts were committed from about 2000 through November 2012. A.R. at 18. The acts actually were committed from about 2010 through November 2012, and the IG issued an amended notice of exclusion on July 25, 2016. A.R. at 668.
The preprinted Informal Brief of Petitioner asked whether Lasher had been "convicted of a felony that was committed after August 21, 1996." A.R. at 61. Lasher responded, "Yes but I was wrongly convicted." A.R. at 98. Lasher provided the same response, A.R. at 98, when asked whether she had been "convicted of an offense for which exclusion is required," A.R. 62.
Although the Court granted Lasher leave to supplement, ECF No. 22, her opposition to Defendants' motion, ECF No. 19, the Court does not rely on the supplement in reaching its decision, which is based on the complaint, ECF No. 1, the parties' briefs, ECF Nos. 14, 19, and 21, and the Administrative Record, ECF Nos. 24-27.
Reference
- Full Case Name
- Lena LASHER v. DEPARTMENT OF HEALTH AND HUMAN SERVICES
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- 1 case
- Status
- Published