Legal Opinions - U.S. District Court, Maryland: October 14, 2008

Daily Record, The (Baltimore), Oct 14, 2008

Administrative Law

Disqualification from participation in health care programs

BOTTOM LINE: Department of Health and Human Services properly disqualified doctor from participation in federal heath care programs for five years based on his guilty plea relating to the abuse of patients in connection with the delivery of health care.

CASE: Rudman v. Leavitt, USDMD No. AMD 08-1454 (decided Sept. 26, 2008) (Judge Davis).

FACTS: In January 2006, the State of Maryland charged Dr. Michael S. Rudman with three counts of second-degree assault and three counts of sexual offense in the fourth degree. The application for charges alleged that Dr. Rudman engaged in unwanted sexual contact with two patients during medical treatment.

Six months later, in August 2006, Dr. Rudman entered a guilty plea, pursuant to North Carolina v. Alford, 400 U.S. 25, 37 (1980), to a single count of second-degree assault. The State dropped the remaining counts.

In July 2007, the Health and Human Services (HHS) Inspector General notified Dr. Rudman that he was being excluded from participating in federal health care programs for five years based on his guilty plea in the state court. Dr. Rudman appealed that determination and an Administrative Law Judge (ALJ) affirmed.

The ALJ found that Dr. Rudman was convicted based on the statutory definitions of 42 U.S.C. [section]1320a-7(i)(3) and (i)(4); that the conviction was for a criminal offense relating to neglect or abuse of patients in connection with the delivery of a health care item or service; and that the length of the exclusion was reasonable as a matter of law.

Following an unsuccessful appeal to the HHS Departmental Appeals Board, Dr. Rudman sought review in federal district court. The HHS Secretary subsequently filed a motion to dismiss or for summary judgment.

The district court granted that motion and affirmed the order.

LAW: Title 42 U.S.C. [section]1320a-7(a)(2) requires the Secretary of HHS to exclude from federal health care programs any individual who "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." The mandatory minimum period of exclusion for an individual is five years under that provision. 42 U.S.C. [section]1320a-7(c)(3)(B).

Here, the Secretary was required to exclude Dr. Rudman from participating in federal health care programs for five years if Dr. Rudman had a conviction that "related to neglect or abuse of patients in connection with the delivery of a health care item or service." 42 U.S.C. [section]1320a-7(a)(2). Thus, the questions before the court was whether the Secretary correctly applied the law in deciding that Dr. Rudman's actions qualified as a conviction under [section]1320a-7(i)(3) or (i)(4), and whether the Secretary's decision that Dr. Rudman's conviction "related to patient abuse" was supported by substantial evidence.

Manifestly, the Secretary applied the law properly, and did so on the basis of substantial evidence.

The ALJ correctly held that Dr. Rudman was convicted under [section]1320a-7(i)(3) because Dr. Rudman pleaded guilty to one count of second-degree assault, and the court accepted his plea. As Dr. Rudman clearly understood, an Alford plea was a guilty plea; the court personally questioned him while he was under oath and determined that he understood the charges and potential consequences of his plea. The court ensured that his plea was voluntary and informed. Further, the court also established the factual basis for his plea. Accordingly, the court accepted Dr. Rudman's plea as required by [section]1320a-7(i)(3).

The ALJ also correctly applied the law in concluding that Dr. Rudman was convicted under [section]1320a-7(i)(4) because he entered into a deferred adjudication arrangement whereby judgment of conviction was withheld. Section 1320a-7(i)(4) defines conviction to include circumstances in which "the individual or entity has entered into participation in a...program where judgment of conviction has been withheld."

Here, the court granted Dr. Rudman probation before judgment pursuant to CP [section]6-220. Thus, Rudman entered into an arrangement wherein his conviction would be expunged after successful completion of probation. The court warned him that if he violated probation, he could be sentenced to as much as ten years in prison and a fine of $2500.

As the ALJ stated, it was abundantly clear that Dr. Rudman entered into a deferred adjudication arrangement based on the plain language of the statute. Contrary to Dr. Rudman's assertion, the mere fact that, under Maryland law, his record could be expunged after three years if he successfully completed the term of probation did not erase the fact that he entered into a "program where judgment of conviction has been withheld."

The material inquiry was whether [section]1320a-7(i)(4) treated Dr. Rudman's guilty plea as a conviction, not how state law might treat his guilty plea in the future.