[Federal Register Volume 59, Number 156 (Monday, August 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19816]


[[Page Unknown]]

[Federal Register: August 15, 1994]


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DEPARTMENT OF JUSTICE
[Docket No. 93-63]

 

Jude R. Hayes, M.D.; Denial of Application

    On June 14, 1993, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Jude R. Hayes, M.D. (Respondent), of 
Porterville, California, proposing to deny his application for 
registration as a practitioner. The Order to Show Cause alleged that 
Respondent's registration would be inconsistent with the public 
interest as that term is used in 21 U.S.C. 823(f).
    Respondent, through counsel, requested a hearing on the issues 
raised by the Order to Show Cause, and the matter was placed on the 
docket of Administrative Law Judge Paul A. Tenney. Following prehearing 
procedures, a hearing was held in Sacramento, California, on December 
8, 1993. On March 3, 1994, in his findings of fact, conclusions of law, 
and recommended ruling, the administrative law judge recommended that 
Respondent's application for DEA registration be granted, but that it 
be qualified by excluding Respondent's ability to write prescriptions 
for Schedule II controlled substances, and that consideration of an 
unqualified registration be given after a one year period.
    On March 21, 1994, the Government filed exceptions to Judge 
Tenney's opinion, and on April 4, 1994, the administrative law judge 
transmitted the record to the Administrator. The Deputy Administrator 
has carefully considered the entire record in this matter and, pursuant 
to 21 CFR 1316.67, hereby issues his final order in this matter based 
upon findings of fact and conclusions of law as hereinafter set forth.
    The administrative law judge found that Respondent is licensed to 
practice medicine in the State of California, and has been approved by 
Medicare, as well as a number of insurance companies, for treating 
patients under their programs. Since 1977, Respondent has also been 
employed by the State of California as Director of Laboratories at the 
Porterville Development Center.
    The administrative law judge found that in the early 1980's, the 
California Bureau of Narcotic Enforcement (BNE), the California Board 
of Medical Quality Assurance (Board), and the DEA conducted an 
investigation of Respondent's prescribing of Schedule II controlled 
substances. The investigation included five visits to Respondent's 
office by an undercover law enforcement officer. On four of those 
occasions, the undercover officer obtained prescriptions for controlled 
substances from the Respondent, despite indicating to the Respondent 
that she felt fine.
    Following the undercover visits, the BNE and the Board consulted 
with a medical consultant regarding Respondent's prescribing practices. 
After examining 75 of Respondent's patient charts, the medical 
consultant found that in most instances, Respondent's prescribing would 
have caused the patients to become addicted to controlled substances.
    Thereafter, a search warrant was issued, and Respondent's patient 
medical files were seized. DEA requested that four physicians review 
some of the medical files. The physicians found that in most cases, the 
quantity and duration of Schedule II controlled substances prescribed 
by Respondent for the conditions presented was inappropriate.
    The administrative law judge found that Respondent was indicted in 
the United States District Court for the Eastern District of 
California, on 640 counts of prescribing Schedule II controlled 
substances not in the usual course of professional practice, in 
violation of 21 U.S.C. 841(a). On July 20, 1984, Respondent was 
convicted on 281 counts, and was sentenced to three years in prison 
with a consecutive three-year term of probation and fined $100,000. The 
convictions were affirmed on appeal to the Ninth Circuit. Respondent 
surrendered his DEA Certificates of Registration, AH9124568, AH2102046, 
and AH1565766 on February 28, 1985. On October 21, 1988, Respondent's 
motion to vacate and set aside the sentence was granted, and he was 
released from custody after serving one year. On December 11, 1991, 
Respondent's probation was terminated.
    Following Respondent's conviction, the Board placed him on 
probation for five years, subject to certain terms and conditions, 
including: Respondent was prohibited from handling controlled 
substances, except for treatment of inpatients in an acute hospital 
setting; and Respondent was required to keep records of all controlled 
substances prescribed, dispensed or administered during the probation 
period. Respondent successfully completed probation, and effective 
April 18, 1990, his medical privileges were fully restored by the 
Board.
    On September 17, 1985, Respondent was notified by the California 
Department of Health Services (Department) that he was suspended as a 
Medi-Cal provider. Medi-Cal is a program administered by the Department 
that provides health coverage for indigent patients. When Respondent 
requested reinstatement into the program, an investigation was 
conducted by the Department in 1991 of Respondent's billing procedures. 
The investigation revealed that: Respondent continued to treat Medi-Cal 
patients by ordering or allowing other physicians to sign prescriptions 
for Respondent's patients when those physicians did not see the 
patients; Respondent used other physicians' presigned prescription 
forms; and Respondent ordered or allowed other physicians to use their 
medical provider numbers to bill Medi-Cal for treatment of Respondent's 
patients when the provider did not see or treat the patients. As a 
result of the Department's findings, Respondent's application for 
reinstatement into the Medi-Cal program was denied, and he remains 
without Medi-Cal privileges.
    During the hearing in this matter, the Government placed into 
evidence transcripts of a medical expert's opinion testimony presented 
at Respondent's criminal trial. The testimony concerned the medical 
expert's review of the medical files for 20 patients mentioned in the 
indictment. The medical expert found that, with the exception of one 
patient, Respondent's prescribing of controlled substances was not for 
a legitimate medical purpose. In response, Respondent testified at the 
hearing that almost all of the patients involved suffered from a 
chronically painful condition.
    At the hearing, Respondent placed into evidence a report prepared 
by a California State medical organization, and an article published in 
a medical journal, both detailing the nature of chronic pain. 
Respondent also placed into evidence a bill enacted in California, 
intended to authorize physicians to better treat patients suffering 
from chronic pain. Respondent testified that the bill provides 
treatment guidelines that did not previously exist.
    Respondent testified that if his application for DEA registration 
is approved, he would prescribe controlled substances in a different 
manner, and would also use non-controlled drugs in the treatment of 
pain. Respondent also testified that he would refer patients to pain 
clinics, which primarily prescribe Schedule II controlled substances.
    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny any 
application for such registration, if he determines that the continued 
registration would be inconsistent with the public interest. In 
determining the public interest, the following factors are considered:
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing controlled substances.
    (3) The applicant's conviction record under Federal or State laws 
relating to the distribution, or dispensing of controlled substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.
    It is well established that these factors are to be considered in 
the disjunctive, i.e., the Deputy Administrator may properly rely on 
any one or a combination of the factors and give each factor the weight 
he deems appropriate. See Henry J. Schwarz, Jr., M.D., Docket No. 88-
42, 54 FR 16422 (1989).
    In considering whether grounds exist to deny Respondent's 
application for DEA registration, the administrative law judge found 
that the Government had made a prima facie case with respect to factors 
one through five. Factor one is applicable in light of evidence 
regarding the stipulation and order entered by the Board in which 
Respondent's medical certificate was placed on probation for five 
years; factors two through five are applicable based upon Respondent's 
conviction on 281 counts of unlawfully prescribing Schedule II 
controlled substances; factor five is also applicable in light of 
Respondent's exclusion from the Medi-Cal program.
    In mitigation of the above, the administrative law judge noted that 
Respondent surrendered his previous DEA registrations in February 1985; 
that he completed probation imposed by the Board in April 1990; that 
probation in Respondent's criminal case was terminated in December 
1991; and that his current Medi-Cal exclusion is based on events that 
occurred in 1986. The administrative law judge also found that while 
Respondent demonstrated no explicit expressions of remorse, Respondent 
has indicated that if given a DEA registration, he will do things 
differently, including referring chronic pain sufferers to pain clinics 
and using non-controlled medication in the treatment of pain.
    The administrative law judge therefore recommended that Respondent 
be granted a qualified DEA registration, excluding Respondent's 
authority to prescribe Schedule II controlled substances. The 
administrative law judge further recommended that consideration be 
given to any application after one year for an unqualified registration 
with the benefit of experience gained during the year.
    The Government filed exceptions to the administrative law judge's 
recommendation that Respondent be granted a qualified registration. The 
Government stressed the egregiousness of Respondent's actions which led 
to his conviction on 281 counts of 21 U.S.C. 841(a)(1), including 
maintaining at least one patient on controlled substances despite 
Respondent's knowledge that the patient had five previous drug 
overdoses and that Respondent did not keep records on the patient.
    Additionally, the Government emphasized that Respondent's 
violations, his earlier state suspension by using other physicians' 
provider numbers and pre-signed prescription forms are indications that 
Respondent cannot be entrusted with a DEA registration. The Government 
further argued that restricting Respondent's Schedule II prescribing 
privileges does not restrict his access to Schedule II controlled 
substances through his ability to dispense or administer these drugs.
    The Deputy Administrator having considered the entire record adopts 
the administrative law judge's findings of fact and conclusions of law, 
however, disagrees with both aspects of the recommended ruling of a 
qualified registration and favorable consideration to an unqualified 
registration after one year. The Deputy Administrator finds that 
Respondent's registration with DEA would be inconsistent with the 
public interest based upon the reprehensible prescribing practices 
which led to his conviction of 281 counts of unlawful distribution of 
controlled substances; the fact that Respondent is still excluded from 
the Medi-Cal program; that Respondent treated Medi-Cal patients without 
authorization and used other physicians' pre-signed prescription forms; 
Respondent's complete lack of remorse; and his total disregard for 
rules and regulations governing the handling of controlled substances.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
823 and 824 and 28 CFR 0.100(b) and 0.104 (59 FR 23637), hereby orders 
that the application for registration, executed by Jude R. Hayes, M.D., 
be, and it hereby is, denied. This order is effective August 15, 1994.

    Dated: August 8, 1994.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 94-19816 Filed 8-12-94; 8:45 am]
BILLING CODE 4410-09-M