Circumstance-Specific Exclusion Under 42 U.S.C. § 1320a-7(a)(1): Baxter v. Kennedy

Introduction

In Timothy Baxter v. Robert F. Kennedy Jr., 4th Cir. No. 24-1203 (Apr. 29, 2025), the United States Court of Appeals for the Fourth Circuit addressed the proper interpretive framework for the mandatory-exclusion provision of the Social Security Act, 42 U.S.C. § 1320a-7(a)(1). Dr. Timothy Baxter, formerly Global Medical Director at Indivior, pleaded guilty to a misdemeanor drug misbranding offense under 21 U.S.C. § 331(a) for distributing misleading pediatric-exposure data to Massachusetts’s Medicaid program (MassHealth). After his conviction, the Secretary of Health and Human Services imposed a five-year ban on Baxter’s participation in federal healthcare programs, citing § 1320a-7(a)(1). Baxter challenged that exclusion as arbitrary and legally unfounded. The Fourth Circuit affirmed, holding that § 1320a-7(a)(1) requires a “circumstance-specific” rather than a “categorical” approach and that Baxter’s actual conduct easily triggered mandatory exclusion.

Summary of the Judgment

The Fourth Circuit’s opinion, authored by Judge Richardson and joined by Judges Agee and Berner, reached four principal conclusions:

1. Statutory Interpretation Framework: An additional-consequence statute like § 1320a-7(a)(1) demands a three-step matching exercise:
   • Define the statute’s comparator terms (here, “delivery of an item or service under … any State health care program”).
   • Determine whether the statute looks to the offender’s actual conduct (circumstance-specific approach) or to the abstract elements of the prior statutory offense (categorical approach).
   • Check whether the actual conduct or the statutory elements satisfy the comparator terms in the way the provision requires.
2. Circumstance-Specific Rather Than Categorical: Section 1320a-7(a)(1) refers to specific acts of “delivery” under a state program, contains no “element”- or “nature”-as-an-element language, and would be rendered nearly meaningless if read categorically (few state crimes require delivery under Medicaid). Thus, Baxter’s actual conduct—in distributing misbranded data that led MassHealth to cover Suboxone Film—was the relevant touchstone.
3. Relationship Satisfied: Under the “expansive” test for “related to,” Baxter’s misbranding conduct plainly related to the delivery of a product under MassHealth. The Secretary was therefore obliged to exclude him for five years.
4. Rejection of Counterarguments:
   • No requirement of a scienter element or categorical narrowing arises from § 1320a-7(a)(1).
   • Due-process concerns are met by the statute’s built-in notice and hearing procedures under the Administrative Procedure Act.

Analysis

Precedents Cited

• Taylor v. United States, 495 U.S. 575 (1990): Established the three-step matching exercise for “generic” comparator crimes under recidivism provisions such as the Armed Career Criminal Act.
• Shular v. United States, 589 U.S. 154 (2020): Clarified how to distinguish “generic crimes” from specific act descriptions in comparator definitions.
• United States v. Simms, 914 F.3d 229 (4th Cir. 2019, en banc): Emphasized that highly detailed comparators are unlikely to be generic elements and counsel against a categorical approach.
• United States v. Hayes, 555 U.S. 415 (2009): Demonstrated bifurcation within a single additional-consequence statute, applying a categorical approach to the “force” element but a circumstance-specific approach to the familial-relationship qualifier.
• Moncrieffe v. Holder, 569 U.S. 184 (2013): Articulated the presumption that a categorical inquiry must “rest upon nothing more than the least of the acts criminalized.”
• Nijhawan v. Holder, 557 U.S. 29 (2009): Embraced a broad “related to” test under a circumstance-specific approach for immigration consequences.

Legal Reasoning

The court’s logic proceeded in three clear steps:

1. Comparator-Term Definition
Section 1320a-7(a)(1) speaks of “delivery of an item or service under … any State health care program.” Those words refer to specific conduct, not a “generic crime” label. This distinguishes § 1320a-7(a)(1) from provisions listing generic offenses like “burglary” or requiring comparator terms “as an element.”

2. Prior-Offense Aspect
Because § 1320a-7(a)(1) lacks any “element”- or “nature”-based language, mentions neither “elements” nor “by its nature,” and addresses specific delivery conduct, the statute looks to Baxter’s actual conduct (circumstance-specific approach). The Fourth Circuit stressed that the categorical approach is “not a default” and arises only with textual signals—none of which appear in § 1320a-7(a)(1).

3. Relationship Test
§ 1320a-7(a)(1) requires that the prior offense be “related to” the comparator acts. Under ordinary usage, “related to” demands only a loose nexus. Baxter’s admitted scheme—misrepresenting pediatric-exposure data to induce MassHealth to cover Suboxone Film—plainly qualifies. Thus, his misdemeanor misbranding conviction sufficed to trigger the five-year exclusion.

Impact

Baxter v. Kennedy cements the circumstance-specific approach as the default for additional-consequence statutes absent clear textual signals to the contrary. Its structured three-step framework provides litigants and agencies with a predictable roadmap for disputes over mandatory exclusions, sentencing enhancements, civil penalties and immigration consequences that hinge on prior offenses. Future courts evaluating similar provisions will look first for words like “element,” “by its nature,” or lists of generic crimes—and, finding none in § 1320a-7(a)(1), will follow Baxter’s path. The decision also clarifies that “related to” is an expansive hook, giving agencies broad leeway to impose collateral measures when the offender’s actual misconduct intersects a federal program.

Moreover, Baxter underlines that civil collateral consequences—exclusion from federal healthcare programs—need not mirror criminal law’s scienter requirements. And it reaffirms that constitutionally mandated process (notice and a hearing) suffices to satisfy due-process even when security of federal program participation is at stake.

Complex Concepts Simplified

• Additional-Consequence Statute: A law that attaches a new penalty or status change (e.g., exclusion from Medicaid) once someone has a qualifying conviction.
• Circumstance-Specific Approach: Courts look at what the person actually did when committing the prior crime, not just the crime’s generic legal definition.
• Categorical Approach: Courts compare statutory elements of the prior offense to the elements of the new penalty provision, ignoring the offender’s real-world conduct.
• Three-Step Matching Exercise:
  1. Define the new-penalty provision’s comparator terms (delivery under a state program).
  2. Decide whether the statute looks to actual conduct or to statutory elements.
  3. Check whether conduct or elements meet the new-penalty requirements (here, “related to” delivery).
• “Related to” Test: A broad requirement that only a loose but meaningful connection exist between the prior wrongdoing and the activities covered by the new consequence.

Conclusion

Baxter v. Kennedy stands as a landmark ruling on how courts should interpret collateral-consequence provisions within the Social Security Act and beyond. By endorsing a circumstance-specific analysis absent clear textual prompts for categorization, the Fourth Circuit provides clarity and predictability to agencies imposing post-conviction sanctions, to attorneys advising clients with past convictions, and to courts navigating the interplay of federal programs and criminal history. The decision’s three-step framework and its rejection of an unwarranted scienter or generic-crime approach will shape future disputes over exclusions, enhanced penalties, and civil fines tied to criminal convictions.