[Federal Register Volume 77, Number 113 (Tuesday, June 12, 2012)]
[Notices]
[Pages 35021-35027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14319]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 11-44]
Kwan Bo Jin, M.D.; Decision and Order
On October 13, 2011, an agency Administrative Law Judge issued the
attached recommended decision. Neither party filed exceptions to the
decision.
Having reviewed the entire record, I have decided to adopt the
ALJ's findings of fact and conclusions of law, except for his
discussion of the role of community impact evidence in agency
proceedings, see ALJ, at 14-16; \1\ which is contrary to agency
precedent.\2\ See Linda Sue Cheek, 76 FR 66972, 66973 (2011); Mark De
La Lama, 76 FR 20011, 20020 n.20 (2011); Bienvenido Tan, 76 FR 17673,
17694 n.58 (2011); Gregory D. Owens, 74 FR 36571, 36757 & n.22 (2009).
Nonetheless, my rejection of the ALJ's discussion of this issue has no
effect on the outcome of this matter.
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\1\ All citations to the ALJ's Recommended Decision are to the
slip opinion as originally issued.
\2\ I also do not adopt the ALJ's statement at page 7 of the
slip opinion stating his conclusion ``that the reference in Section
823(f)(5) to `other conduct which may threaten the public health and
safety' would as a matter of statutory interpretation logically
encompass the factors listed in Section 824(a).'' ALJ at 7 (citing
Kuen H. Chen, M.D., 58 FR 65401, 65402 (1993)).
To be sure, the Agency decision in Chen stated that ``[t]he
administrative law judge has concluded here that the reference in 21
U.S.C. 823(f)(5) to `other conduct which may threaten the public
health and safety' would as a matter of statutory interpretation
logically encompass the bases listed in 21 U.S.C. 824(a).'' 58 FR at
65402. However, whether this constitutes a holding or merely dictum,
Chen is totally devoid of any indication that the traditional tools
of statutory construction (i.e, text, structure, statutory purpose,
and legislative history) were employed in reaching this conclusion.
Indeed, while factor five focuses on ``other conduct,'' several of
the grounds for revocation are based on a registrant's status and do
not require inquiry into the nature of the underlying conduct. See
21 U.S.C. 824(a)(3) (authorizing revocation where registrant ``has
had his State license or registration suspended, revoked, or denied
by competent State authority and is no longer authorized'' to engage
in controlled substance activities or such sanction has been
recommended by competent state authority); id. 824(a)(5)
(authorizing revocation where registrant has been excluded or is
subject to exclusion from participating in federal healthcare
programs under mandatory exclusion provisions). In addition,
construing factor five in this manner renders superfluous factor
one, which authorizes the Agency to consider the recommendation of
the state licensing board or disciplinary authority, as well as the
provision of section 823(f) stating that the ``[t]he Attorney
General shall register practitioners . . . if the applicant is
authorized to dispense . . . controlled substances under the laws of
the State in which he practices.''
Finally, it should be noted that since shortly after the CSA's
enactment and years before section 823(f) was amended to include the
public interest factors, DEA ``has consistently held that where a
registration can be revoked under section 824, it can, a fortiori,
be denied under section 823 since the law would not require an
agency to indulge in the useless act of granting a license on one
day only to withdraw it on the next.'' Serling Drug Co. v. Detroit
Prescription Wholesaler, Inc., 40 FR 11918, 11919 (1975). See also
John R. Amato, 40 FR 22852 (1975) (Denying application where
practitioner's state license had been revoked, holding that section
823(f) ``must logically give the Administrator the authority to deny
a registration if the practitioner is not authorized by the State to
dispense controlled substances . . . . To hold otherwise would mean
that all applications would have to be granted only to be revoked
the next day under 21 U.S.C. 824(a)(3). This [A]gency has
consistently held that where a registration can be revoked under
section 824, it can, a fortiori, be denied under section 823.'').
Indeed, no court has ever questioned the Agency's longstanding
and consistent interpretation that it has authority to deny an
application on any of the grounds set forth in section 824(a). Cf.
National Muffler Dealers Assn., Inc., v. United States, 440 U.S.
472, 477 (2011) (``A regulation may have particular force if it is a
substantially contemporaneous construction of the statute by those
presumed to have been aware of congressional intent.''); EEOC v.
Associated Dry Goods Corp., 449 U.S. 590, 600 n.17 (1981) (``a
contemporaneous construction deserves special deference when it has
remained consistent over a long period of time'').
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Here, the sole ground for revocation proven on this record was
Respondent's having been mandatorily excluded from participating in
federal health care programs pursuant to 42 U.S.C. 1320a-7(a).
Respondent, however, has credibly accepted responsibility for the
misconduct which led to his conviction for health care fraud, see 18
U.S.C. 1347, complied with the terms of his sentence, and also
demonstrated that he has undertaken remedial measures. Accordingly, I
have decided to adopt the ALJ's conclusion that his continued
registration would be ``consistent with the public interest.'' ALJ at
20. Therefore, the Order to Show Cause will be dismissed.
Order
Pursuant to the authority vested in me by 21 U.S.C. 824(a), as well
as 28 CFR 0.100(b), I order that the Order to Show Cause issued to Kwan
Bo Jin, M.D., be, and it hereby is, dismissed. This Order is effective
immediately.
Dated: June 4, 2012.
Michele M. Leonhart,
Administrator.
D. Linden Barber, Esq., and Jonathan P. Novak, Esq., for the Government
Glen D. Crick, Esq., and Lillian Walanka, Esq., for the Respondent.
Recommended Ruling, Findings of Fact, Conclusions of Law and Decision
of the Administrative Law Judge
Introduction
This proceeding is an adjudication pursuant to the Administrative
Procedure Act, 5 U.S.C. 551 et seq., to determine whether the Drug
Enforcement Administration (``DEA'' or ``Government'') should revoke a
practitioner's Certificate of Registration (``COR''), and deny any
pending applications for renewal or modification. Without this
registration, the practitioner, Kwan Bo Jin, M.D. (``Respondent''), of
Palatine, Illinois, would be unable to lawfully possess, prescribe,
dispense or otherwise handle controlled substances in the course of his
practice.
On March 29, 2011, the Deputy Assistant Administrator, Office of
Diversion Control, DEA, issued an Order to Show Cause (``OSC'') to
Respondent, giving Respondent notice of an opportunity to show cause
why the DEA should not revoke Respondent's DEA COR BJ1801580, pursuant
to 21 U.S.C. 823 and 824, and deny Respondent's pending application as
a practitioner for registration in Schedules II through V, alleging
that Respondent has been excluded from participation in all federal
health care programs as defined in 21 U.S.C. 824(a)(5). (ALJ Ex. 1, at
1.) The OSC alleged in substance: (a) Respondent is currently
registered with DEA as a practitioner in Schedules II through V under
DEA registration number BJ1801580, at 950 West Carolyn Drive, Palatine,
Illinois; (b) Respondent's registration expired on December 31, 2009,
and Respondent ``submitted a timely renewal on November 6, 2010;'' \1\
(c) the United States Department of Health and Human Services (``HHS'')
by letter dated April 30, 2010, notified Respondent of his exclusion
from participation in all federal health programs based on his October
21, 2009 federal conviction for health care fraud pursuant to 18 U.S.C.
1347; and (d) the exclusion was effective on May 20, 2010, and remains
in place until at least May 19, 2015.\2\ (Id.)
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\1\ Upon inquiry at hearing, the Government indicated that the
date in the OSC was in error and should reflect November 6, 2009.
\2\ At hearing, the Government raised an additional issue
involving Respondent's prescribing of the Schedule II controlled
substance Ritalin to a patient over a two to three month time period
in or about 1996.
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Respondent, through counsel, timely requested a hearing, (ALJ Ex.
2), which
[[Page 35022]]
was held in Chicago, Illinois on August 2, 2011. Both parties called
one witness to testify and introduced documentary evidence. After the
hearing, both parties filed proposed findings of fact, conclusions of
law and argument. All of the evidence and post-hearing submissions have
been considered, and to the extent the parties' proposed findings of
fact have been adopted, they are substantively incorporated into those
set forth below.
Issue
Whether the record establishes that Respondent's DEA COR BJ1801580
should be revoked pursuant to 21 U.S.C. 824(a)(5) and any pending
applications for renewal or modification of that registration should be
denied on the grounds that Respondent has been excluded from
participation in a program pursuant to 42 U.S.C. 1320a-7(a).
Evidence and Incorporated Findings of Fact \3\
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\3\ In addition to the evidence discussed in this Section,
additional evidence and findings of fact are discussed in later
sections of this Recommended Decision.
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I find, by a preponderance of the evidence, the following facts:
I. Background
Respondent graduated from medical school in Korea and completed his
residency in psychiatry at the University of Illinois, prior to
becoming licensed in Illinois in or about 1984. (Tr. 49-50.) Respondent
is not licensed in any other states. Respondent's DEA registration has
never been disciplined. (Tr. 53.) Respondent's medical license has been
the subject of disciplinary action in or about 1996 \4\ and in 2009.
(Tr. 50, 53.) Respondent has specialized training and experience in
internal medicine and psychiatry. (Tr. 53.) Respondent is not Board
certified in psychiatry but is Board eligible. (Id.) Prior to September
2009, Respondent's practice focused mainly on a geriatric patient
population, to include covering twelve nursing homes. (Tr. 54.) On
September 28, 2009, Respondent pled guilty to ``one count of Health
Care Fraud in violation of 18 U.S.C. 1347, in the United States
District Court for the Northern District of Illinois, . . . .'' (Resp't
Ex. B, at 1.) Respondent has not actively practiced medicine since his
September 2009 conviction. (Tr. 55, 63-64.)
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\4\ See infra note 18.
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II. The Government's Evidence
In support of the allegations contained in the OSC, the Government
presented at hearing the testimony of one witness: DEA Diversion
Investigator John Pacella (``DI Pacella''). DI Pacella credibly
testified that he has been a diversion investigator for twenty-two
years, and was assigned to investigate Respondent in November 2009,
following receipt of information from the State of Illinois ``regarding
[Respondent's] conviction for Medicaid fraud back in September of
2008.'' \5\ (Tr. 21.)
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\5\ The evidence of record reflects that Respondent signed a
plea agreement with the United States dated December 9, 2008, and
entered a plea of guilty on September 28, 2009. (Compare Gov't Ex.
2, with Gov't Ex. 3.)
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DI Pacella next testified that Respondent's registration is
currently active to handle controlled substances in Schedules II
through V ``[o]n a day to day basis.'' (Tr. 21-22; Gov't Ex. 1.) DI
Pacella further testified that he received a copy of the judgment in
Respondent's criminal case from the U.S. Attorney's office. (Tr. 24-25;
Gov't Exs. 2, 3.) DI Pacella did not consult with the prosecuting
attorney in Respondent's case at any time and his investigation was
limited to a review of the records in the case, to include a letter
dated April 30, 2010, from the HHS notifying Respondent that he was
excluded from participation in federal health care programs for a five-
year period. (Tr. 27-28; 33; 42; Gov't Ex. 4.)
During questioning by Respondent's counsel, DI Pacella testified
that he was aware that Respondent had been reprimanded by the State of
Illinois for not keeping records for the Schedule II controlled
substance Ritalin for a particular patient, and overprescribing to that
patient, resulting in one year of probation. (Tr. 33-34.) \6\
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\6\ Respondent's counsel did not object to the testimony or
raise any issue with regard to lack of notice during hearing, but
instead elicited further explanation of the issue from Respondent
during Respondent's direct examination.
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DI Pacella's testimony also included a general explanation of
diversion, to include Congress' intent to create ``basically a closed
system of distribution.'' (Tr. 28-29.) DI Pacella further explained
that a ``small percentage [of doctors] . . . do end up diverting drugs
for[] monetary benefits . . . or even self addiction . . .'' and
concluded that ``doctors and/or pharmacies . . . make fraudulent
documents to cover up diversion.'' (Tr. 30, 31.) DI Pacella
acknowledged that his testimony regarding what a doctor may do with
regard to diversion is just speculation insofar as Respondent is
concerned, since he did not review any of Respondent's prescribing
information and does not know what Respondent is doing. (Tr. 36-37.)
III. Respondent's Evidence
Respondent testified at hearing that in 1996, his Illinois medical
license was reprimanded as a result of his over prescribing Ritalin to
a patient. (Tr. 50-51.) Respondent explained that the patient had
tricked him into prescribing a little more than he intended, but
admitted that he prescribed more than he intended and should have been
more attentive. (Tr. 51-52.) Respondent further explained that
initially his license was revoked because he did not attend the
scheduled hearing due to lack of notice, but the revocation was
vacated, and following a hearing with Respondent present, his license
was reprimanded. (Id.)
Respondent next testified that his medical license in Illinois had
recently been subject to discipline due to his September 28, 2009,
federal health care fraud conviction, and that his medical license was
currently under probation. (Tr. 53, 55.) Respondent testified that with
regard to the discipline of his medical license, he has completed a
four-month suspension, paid a $1,000 fine, and completed a continuing
medical education requirement. (Tr. 60-61.) Respondent is in compliance
with the terms of his medical license probation. (Tr. 61.)
Respondent testified that he pled guilty to health care fraud
``[b]ecause I did wrong.'' (Tr. 56.) Respondent further explained the
nature of the misconduct,\7\ stating ``that's what I pled guilty for
and I feel very bad about it.'' (Tr. 57.) Since his conviction,
Respondent explained that he has paid a fine of $10,000, a $100
assessment, and restitution of $28,349. (Tr. 57-58.) Respondent also
successfully completed a four month period of work release at the
Salvation Army, along with 250 hours of community service. (Tr. 58-59.)
Respondent testified that he has completed all of the terms of his
federal probation and sentencing, and his probation was terminated on
January 29, 2011, approximately eight months earlier than scheduled.
(Tr. 59.)
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\7\ Respondent testified that the offense conduct for which he
pled guilty related to charging Medicare for patients that he had
not seen, to include on occasion deceased patients. (Tr. 56-57.)
There is no evidence of record to indicate that the offense conduct
related to controlled substances.
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Discussion and Conclusions
I. The Applicable Statutory and Regulatory Provisions
The Controlled Substances Act (``CSA'') specifies in 21 U.S.C.
824(a) five factors that the Administrator may consider when suspending
or revoking
[[Page 35023]]
a DEA registration.\8\ Despite the lack of an explicit provision
applying these factors to a denial of an application
\8\ That subsection provides that a DEA registration may be
revoked upon a finding that the registrant: (1) has materially
falsified an application for DEA registration; (2) has been
convicted of a felony under the CSA or any other federal or state
law relating to any controlled substance; (3) has had a state
license or registration suspended, revoked or denied and is no
longer authorized by state law to handle controlled substances; (4)
has committed such acts as would render registration inconsistent
with the public interest; or (5) has been excluded from
participation in a program pursuant to 42 U.S.C. 1320a-7(a). It
should also be noted that Section 824(a) contains a reciprocal
reference incorporating the public interest factors from Section
823(f). See 21 U.S.C. 824(a)(4).
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[t]he agency has consistently held that the Administrator may also
apply these bases to the denial of a registration, since the law would
not require an agency to indulge in the useless act of granting a
license on one day only to withdraw it on the next.\9\
\9\ Kuen H. Chen, M.D., 58 FR 65,401, 65,402 (DEA 1993) (citing
Serling Drug Co. & Detroit Prescription Wholesaler, Inc., 40 FR
11918, 11,919 (DEA 1975)); accord Scott J. Loman, D.D.S., 50 FR
18,941 (DEA 1985); Roger Lee Palmer, D.M.D., 49 FR 950 (DEA 1984).
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In addition, I conclude that the reference in Section 823(f)(5) to
``other conduct which may threaten the public health and safety'' would
as a matter of statutory interpretation logically encompass the factors
listed in Section 824(a).\10\
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\10\ See Chen, 58 FR at 65,402.
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In an action to revoke a DEA COR, the Government has the burden of
proving that the requirements for such revocation are satisfied.\11\
Similarly, in an action to deny an application for registration, the
Government bears the burden of proving that the requirements for
granting such registration are not satisfied.\12\ The burden of proof
shifts to the respondent once the Government has made its prima facie
case.\13\
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\11\ 21 CFR 1301.44(e) (2011).
\12\ 21 CFR 1301.44(d) (2011).
\13\ Medicine Shoppe--Jonesborough, 73 FR 364, 380 (DEA 2008);
see also Thomas Johnston, 45 FR 72,311, 72,311 (DEA 1980).
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The CSA, 21 U.S.C. 824(a)(5), provides, insofar as pertinent to
this proceeding, that the Administrator may revoke or deny a
registration if an applicant has been excluded from participation in a
program pursuant to 42 U.S.C. 1320a-7(a).
Under Section 1320a-7(a), the Secretary of the HHS is required to
exclude from participation in any federal health care program any
individual convicted of a criminal offense ``related to the delivery of
an item or service under [42 U.S.C. 1395 et. seq.] or under any State
health care program,'' 1320a-7(a)(1), as well as any individual
convicted ``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
. . . of a criminal offense consisting of a felony relating to fraud,
theft, embezzlement, breach of fiduciary responsibility, or other
financial misconduct,'' 1320a-7(a)(3).
I find that Respondent's 2009 health care fraud conviction and
subsequent exclusion from all federal health care programs are
supported by substantial evidence. The evidence at hearing includes a
plea agreement and judgment pertaining to Respondent's conviction for
health care fraud, pursuant to 18 U.S.C. 1347. (Gov't Exs. 2, 3.)
Additionally, the evidence includes a letter from the HHS dated April
30, 2010, excluding Respondent from all federal health care programs
for the minimum statutory period of five years. (Gov't Ex. 4.)
Consequently, exclusion from participation in any federal health care
programs pursuant to 42 U.S.C. 1320a-7(a) is an independent ground for
denying or revoking Respondent's DEA registration. See Johnnie Melvin
Turner, M.D., 67 FR 71,203, 71,204 (DEA 2002).
Respondent does not dispute the evidence of conviction or
exclusion, but argues, correctly, that revocation of a COR and denial
of a pending application for renewal of registration on this ground is
a matter of discretion. See Dinorah Drug Store, Inc., 61 FR 15,972,
15,973 (DEA 1996) (denial of registration under Section 824(a)(5)
discretionary so long as granting registration not inconsistent with
public interest).
Accordingly, on these facts, the Government has met its burden of
proving its Section 824(a)(5) claim, see 21 CFR 1301.44(d) and (e),
placing the burden on Respondent to show that despite his conviction,
granting him a COR would not be contrary to the public interest. See
Medicine Shoppe--Jonesborough, 73 FR at 380 (burden of proof shifts to
the respondent once the Government puts on prima facie case); see also
Thomas Johnston, 45 FR at 72,311 (same).
II. The Public Interest Standard
Pursuant to 21 U.S.C. 823(f), the Administrator may deny an
application for a DEA registration if she determines that such
registration would be inconsistent with the public interest. In
determining the public interest, the Administrator is required to
consider the following factors:
(1) The recommendation of the appropriate state licensing board or
professional disciplinary authority.
(2) The applicant's experience in dispensing or conducting research
with respect to controlled substances.
(3) The applicant's conviction record under federal or state laws
relating to the manufacture, 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.
As a threshold matter, the factors specified in Section 823(f) are
to be considered in the disjunctive: the Administrator may properly
rely on any one or a combination of those factors, and give each factor
the weight she deems appropriate, in determining whether a registration
should be revoked or an application for registration denied. See David
H. Gillis, M.D., 58 FR 37,507, 37,508 (DEA 1993); see also D & S Sales,
71 FR 37,607, 37,610 (DEA 2006); Joy's Ideas, 70 FR 33,195, 33,197 (DEA
2005); Henry J. Schwarz, Jr., M.D., 54 FR 16,422, 16,424 (DEA 1989).
III. The Factors to Be Considered
Factors 1 and 3: The Recommendation of the Appropriate State Licensing
Board or Professional Disciplinary Authority and Conviction Record
under Federal or State Laws Relating to the Manufacture, Distribution
or Dispensing of Controlled Substances
As described in the Evidence and Incorporated Findings of Fact
Section of this Recommended Decision, Respondent holds a valid state
medical license in the State of Illinois, but Respondent's state
medical license has been the subject of discipline in the past. In or
about 1996, Respondent's medical license was reprimanded for conduct
related to prescribing Ritalin, a Schedule II controlled substance.\14\
Additionally, as a result of Respondent's September 28, 2009 federal
conviction for health care fraud, and pursuant to state law,\15\ the
State of Illinois suspended Respondent's medical license for a period
of four months,\16\ imposed a fine of $1,000, and placed Respondent on
conditional probation
[[Page 35024]]
for an indefinite period of not less than two years. (Resp't Ex. B.)
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\14\ See discussion infra.
\15\ Disciplinary action against an Illinois licensee may be
imposed upon: ``(3) The conviction of a felony in this or any other
jurisdiction . . . . (5) Engaging in dishonorable, unethical or
unprofessional conduct of a character likely to deceive, defraud or
harm the public.'' 225 Ill. Comp. Stat. 60//222(A)(3), (5).
\16\ Respondent's medical license was suspended for four
continuous months beginning on December 3, 2009.
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The most recent action by the State of Illinois reflects a
determination that Respondent, notwithstanding findings of
unprofessional conduct, can be entrusted with a medical license subject
to probationary terms and conditions. While not dispositive,\17\ this
action by the State of Illinois does weigh against a finding that
Respondent's continued registration would be inconsistent with the
public interest under Factor One. Cf. Robert A. Leslie, M.D., 68 FR
15,227, 15,230 (DEA 2003) (under Factor One, prior suspension of
respondent's state medical license held not dispositive where state
license currently under no restrictions).
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\17\ Mortimer B. Levin, D.O., 55 FR 8,209, 8,210 (DEA 1990)
(finding DEA maintains separate oversight responsibility and
statutory obligation to make independent determination whether to
grant registration).
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Regarding Factor Three, there is no evidence that Respondent has
ever been convicted under any federal or state law relating to the
manufacture, distribution or dispensing of controlled substances. I
therefore find that this factor, although not dispositive, see Leslie,
68 FR at 15,230, weighs against a finding that Respondent's
registration would be inconsistent with the public interest.
Factors 2, 4 and 5: Respondent's Experience in Dispensing Controlled
Substances; Compliance with Applicable State, Federal or Local Laws
Relating to Controlled Substances; and Such Other Conduct Which May
Threaten the Public Health and Safety
In this case, there is evidence that Respondent has committed acts
inconsistent with the public interest by prescribing a Schedule II
controlled substance, Ritalin, to one patient over a two to three month
time period in or about 1996.\18\ As an initial matter, the issue of
Respondent's prescribing was not specifically noticed by the Government
in the OSC or prehearing statement, nor was it referenced in any
Government exhibits prior to hearing. The issue was first introduced
during Respondent's cross-examination of DI Pacella, without objection,
and further explained by Respondent during his direct and cross
examination. (Tr. 50-53, 68-72.)
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\18\ Respondent recalls 1996 or 1997, which was consistent with
DI Pacella's limited testimony on the issue. (Compare Tr. 33-34,
with Tr. 68.)
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To comport with due process requirements, the DEA must ``provide a
Respondent with notice of those acts which the Agency intends to rely
on in seeking the revocation of [his] registration so as to provide a
full and fair opportunity to challenge the factual and legal basis for
the Agency's action.'' CBS Wholesale Distribs., 74 FR 36,746, 36,749
(DEA 2009) (citing NLRB v. I.W.G., Inc., 144 F.3d 685, 688-89 (10th
Cir. 1998); Pergament United Sales, Inc., v. NLRB, 920 F.2d 130, 134
(2d Cir. 1990)). An issue cannot be the basis for a sanction when the
Government has failed to ``disclose `in its prehearing statements or
indicate at any time prior to the hearing' that an issue will be
litigated.'' Id. at 36,750 (citing Darrell Risner, D.M.D., 61 FR 728,
730 (DEA 1996)). The DEA has also previously found, however, that a
respondent may waive objection to the admission of evidence not noticed
by the Government prior to the hearing when the respondent does not
timely object and when the respondent also raises the issue. Gregory D.
Owens, D.D.S., 74 FR 36,751, 36,755 (DEA 2009).
In accordance with agency precedent, I find in this case that the
issue of Respondent's 1996 prescribing of Ritalin to one patient may
properly be considered under factors one, two, four, and five, as well
as on the issue of sanction, notwithstanding the lack of prehearing
notice. Respondent's lack of timely objection to the evidence of the
1996 incident and introduction of additional testimony on the subject
effectively waived any notice issue.
The Government did not substantively address the lack of notice in
its post-hearing brief, but argues that ``Respondent's version of his
prescribing of a schedule II controlled substance to a nurse is similar
to the facts that the Supreme Court recounted in . . . '' United States
v. Moore, 423 U.S. 122 (1975). (Gov't Br., at 5 (emphasis added)). The
issue before the Court in Moore involved whether a registered physician
can be prosecuted under the CSA when the physician's activities fall
outside the usual course of professional practice, which was answered
in the affirmative. Moore, 423 U.S. at 124. Notably, the facts in Moore
involved a practitioner's issuance of 11,169 prescriptions for ``some
800,000 methadone tablets,'' which were acknowledged by the
practitioner to have been issued without observing ``generally accepted
medical practices.'' Id. at 126. I find the Government's argument that
Respondent's prescribing conduct was similar to Moore to be glaringly
at odds with the facts.
Additionally, the Government's argument that there ``was no
evidence that a physical examination was performed . . . '' by
Respondent, to include lack of diagnostic tests or records kept, (Gov't
Br., at 6), is wholly unpersuasive. As an initial matter, in an action
to revoke a registrant's COR, the DEA has the burden of proving that
the requirements for revocation are satisfied.\19\ The Government's
sole witness first introduced the 1996 issue of Respondent's record-
keeping and prescribing misconduct, arguably in response to a question
posed by Respondent's counsel, clearly demonstrating the Government was
aware of the issue in advance of hearing. Once raised at hearing, the
Government did not offer any other relevant evidence, to include such
things as the findings of a state regulatory authority or patient
records, nor did the Government pursue the matter with DI Pacella or
Respondent in any meaningful way. (Tr. 42-47, 70-71.) In fact,
Respondent's limited testimony on the topic was consistent with him
seeing the patient and making chart entries. ``[O]nce I write the
prescription in my chart, you know, on such day that I, I prescribe
this, those and this amount and then she comes in after three, four
days that oh, I had a problem at home[,]'' further explaining how the
patient had misled him to issue another prescription. (Tr. 71.) The
only evidence in the record of misconduct due to record-keeping is DI
Pacella's testimony that ``[w]e did receive information that back in
1997, 96-97, he was actually reprimanded from the State of Illinois for
not keeping records for Schedule II Ritalin for a particular patient, .
. . .'' (Tr. 33-34.) The record is otherwise devoid of any information
about Respondent's physical examination of the patient, diagnostic
tests, or lack thereof.
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\19\ 21 CFR 1301.44(e) (2011).
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In Calhoun v. Bailar, 626 F.2d 145 (9th Cir. 1980), the court found
that to constitute substantial evidence, the probative value and
reliability of hearsay evidence may be analyzed using many factors,
such as: a consideration regarding the independence or possible bias of
the declarant; the type of hearsay material presented; whether the
statements are signed and sworn or anonymous, oral or unsworn; whether
the statements are contradicted by direct testimony; whether the
declarant is available to testify and, if so, whether the objecting
party subpoenas the declarant or whether the declarant is unavailable
and no other evidence is available; the credibility of the witness
testifying to the hearsay; and whether or not the hearsay is
corroborated. Id. at 149; see also Richardson v. Perales, 402 U.S. 389,
402-06 (1971). The evidence offered by DI Pacella regarding ``not
keeping records for Schedule II Ritalin for a particular patient'' is
so lacking in
[[Page 35025]]
factual basis, that it simply cannot constitute substantial evidence.
Accordingly, I do not find the Government's cited authority to be
similar in any material respect to the instant case, nor has the
Government sustained its burden with regard to the issue of
Respondent's lack of physical examination, diagnostic tests, or record-
keeping.
In addition to the foregoing, the Government also elicited opinion
testimony, without objection, from DI Pacella to the effect that a
small percentage of practitioners divert drugs for monetary gain or
self use, to include fraudulent documentation. (Tr. 31.) DI Pacella
acknowledged that the foregoing testimony was only speculation insofar
as Respondent's past or future prescribing conduct was concerned, since
he had no independent evidence of such conduct by Respondent. (Tr. 36-
37.) ``Speculation is, of course, no substitute for evidence, and a
decision based on speculation is not supported by substantial
evidence.'' White ex rel. Smith v. Apfel, 167 F.3d 369, 375 (7th Cir.
1999) (citing Erhardt v. Sec'y, DHS, 969 F.2d 534, 538 (7th Cir.
1992)). Accordingly, I give absolutely no weight to DI Pacella's
opinion testimony pertaining to diversion of controlled substances for
monetary gain or related document fraud, since at best it is mere
speculation as to what Respondent may or may not do in the future.
While I have carefully considered Respondent's admitted prior
conduct with regard to prescribing Ritalin to one patient in or about
1996, I do not find that this single incident, which occurred
approximately fifteen years ago, and Respondent's otherwise unblemished
prescribing record both before and after, to weigh appreciably against
Respondent under any public interest factor. Respondent was fully
credible and candid in his explanation of this event and there is no
evidence of record to indicate any similar conduct before or after.
Moreover, Respondent admitted his misconduct at the time of the
incident, explaining that ``I admitted that, you know, I prescribed
more than I intended for her.'' (Tr. 51.) In reaching a negotiated
reprimand, Respondent further testified that he acknowledged he had
done something wrong. ``I should be more attentive . . . I admit, at
that time, that I prescribed more than I intended for that particular
patient.'' (Tr. 52-53.). The lack of any recurrence for the past
fifteen years amply demonstrates that Respondent will not engage in
similar misconduct in the future. Patrick W. Stodola, M.D., 74 FR
20,727 (DEA 2009).
Accordingly, I find that Respondent's past experience in dispensing
controlled substances, compliance with applicable laws relating to
controlled substances and absence of any other conduct relating to
controlled substances\20\ that may threaten the public interest weighs
heavily in favor of finding that Respondent's registration would be
fully consistent with the public interest.
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\20\ See Terese, Inc., D/B/A Peach Orchard Drugs, Admonition of
Registrant, 76 FR 46,843, 46,848 n.11 (DEA 2011) (with respect to
factor five, DEA's case law has generally recognized that misconduct
must relate to controlled substances).
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IV. Community Impact Evidence
Respondent testified consistent with his prehearing statement, and
without objection or rebuttal, that to his knowledge he is the only
Korean speaking psychiatrist in the Chicago, Illinois area at this
time. (Tr. 55.) Respondent further testified that prior to his
conviction in September 2009, his practice focused on twelve nursing
homes, six of which were ``small nursing homes'' with geriatric Korean
populations. (Tr. 54.) Respondent argues that his plan ``to return to
work as a psychiatrist for the underserved geriatric Korean community
in the Chicago area'' weighs in favor of registration. (Resp't Br., at
13.)
As a threshold matter, there is some question as to whether this
issue is relevant at all in a DEA administrative proceeding regarding
the registration of a practitioner. Agency precedent has found
community impact testimony and evidence relevant with regard to
pharmacies but has also rejected community impact evidence altogether
in more recent cases. For example, the Agency has considered and
credited a respondent's argument that loss of registration would
severely and adversely impact the local community by eliminating one of
two pharmacies serving the poor. Pettigrew Rexall Drugs, 64 FR 8855,
8859-60 (DEA 1999). In recent cases, the Agency held that ``DEA has
never applied [the Pettigrew] rule in a subsequent case . . . it would
be ill-advised to extend it to the case of a prescribing
practitioner.'' Gregory Owens, D.D.S., 74 FR 36,751, 36,757 (DEA 2009);
see also Steven M. Abbadessa, D.O., 74 FR 10,077, 10,078 (DEA 2009)
(rejecting community impact evidence).
Although not discussed in Owens, there are cases since Pettigrew
that have considered and given weight to community impact evidence,
without specifically citing Pettigrew. For example, in a 2004 decision
the Deputy Administrator explained that ``regardless of any demographic
showing as to what proportion of Louisiana's population is medically
underserved[,] such information does not detract from the fact that
Respondent provides needed medical services to such an area . . .
[W]hile this provides some support for maintaining registration under
the facts of this case, it also has a negative implication for
continued registration.'' Imran I. Chaudry, M.D., 69 FR 62,081, 62,083-
84 (DEA 2004).
There are also cases prior to Pettigrew that have considered
community impact evidence on facts similar to the instant case. For
example, the Agency specifically considered community impact in a 1996
decision finding that ``given the needs of the community in which he
practices and the action already taken by the [state and HHS] . . .
revocation of [respondent's] DEA registration is not appropriate.''
Anibal P. Herrera, M.D., 61 FR 65,075, 65,078 (DEA 1996); see also
Marta I. Blesa, M.D., 60 FR 53,434, 53,436 (DEA 1995) (finding relevant
to continuing registration practitioner's ``continued contributions to
that community'' and community impact). In light of this precedent, I
find that community impact evidence as a threshold matter is not an
entirely irrelevant evidentiary consideration, to include on the issue
of sanction.
Respondent testified that he has not actively practiced medicine
since his conviction, explaining that his decision to return to
practice will depend on the outcome of the DEA registration decision.
(Tr. 63-64.) Respondent further testified that although he is not
prohibited from practicing medicine in Illinois, and generally does not
prescribe controlled substances, a DEA registration, as a practical
matter, is necessary in order to ``work with a hospital or a
pharmacy.'' (Tr. 64.) Respondent explained: ``My Illinois license is
active and Illinois substance license is also active. So, I can
practice if I want, but because of the DEA situation that I cannot
maintain the relationship with the hospital that I've been working with
before and the pharmacies.'' (Tr. 78.)
Respondent's testimony regarding his future intentions was
equivocal, initially testifying that he intends to return to work with
six nursing homes he has experience with that currently have a lot of
geriatric Korean patients who are not being served now ``because
there's no psychiatrist dealing with their mental difficulties.'' (Tr.
65.) On cross-examination, Respondent equivocated on whether he
actually intends to return to practice, regardless of the outcome of
his DEA registration hearing. (Tr. 74-
[[Page 35026]]
75.) On re-direct, Respondent clarified, stating that if the DEA
situation can be cleared up, ``I'd like to go back to work. . . . I
consider myself as a resource for my community in Chicago, Korean
community. And I'd like to do the work no matter whether it's being
compensated or not.'' (Tr. 78.)
In light of Respondent's equivocation on future intentions, I give
the evidence related to potential community impact little if any weight
for purposes of this recommended decision, other than to find that it
is not inconsistent with the public interest.
V. Sanction
I find the Government has established by substantial evidence a
prima facie case in support of revoking Respondent's DEA COR and
denying any pending applications for renewal or modification for
registration pursuant to 21 U.S.C. 824(a)(5), which forms the sole
basis for the Government's request for revocation of Respondent's
registration and denial of any pending applications for renewal. While
mandatory exclusion can provide an independent basis for
revocation,\21\ DEA has often reserved that sanction to cases where
``there were serious questions as to the integrity of the registrant.''
Anibal P. Herrera, M.D., 61 FR 65,075, 65,078 (DEA 1996) (continuation
of registration with restriction where respondent fully accepts
responsibility and has paid restitution).
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\21\ ``[M]andatory exclusion from participation in the Medicare
program constitutes an independent ground for revocation pursuant to
21 U.S.C. [ ]824(a)(5).'' Gilbert L. Franklin, D.D.S., 57 FR 3,441,
3,441 (DEA 1992).
---------------------------------------------------------------------------
The Government cites several cases in its post-hearing brief in
support of revocation,\22\ although each case is significantly
distinguishable from the facts presented in the instant case. Orlando
Ortega-Ortiz, M.D., 70 FR 15,122 (DEA 2005) (respondent waived
hearing); Daniel Ortiz-Vargas, M.D., 69 FR 62,095 (DEA 2004)
(respondent waived hearing); \23\ Johnnie-Melvin Turner, M.D., 67 FR
71,203 (DEA 2002) (respondent waived hearing and offense conduct
involved fraudulent claims in excess of $100,000 and order to pay
restitution of $106,132); KK Pharmacy, 64 FR 49,507, 49,510 (DEA 1999)
(respondent waived hearing and ``[n]o evidence of explanation or
mitigating circumstances was offered'' by interested party on
revocation grounds under 21 U.S.C 824(a)(1), (4), and (5)); Stanley
Dubin, D.D.S., 61 FR 60,727, 60,728 (DEA 1996) (respondent's testimony
at hearing not credited in part and respondent found to have directly
violated termination letter, casting substantial doubt on respondent's
integrity).
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\22\ Gov't Br., at 6.
\23\ The Government's citation to this case is incorrect.
---------------------------------------------------------------------------
There is other Agency precedent, in addition to Herrara, 61 FR at
65,078, refraining from imposing a revocation sanction on facts similar
to the instant case where the respondent has fully accepted
responsibility, demonstrated remorse, among other positive factors, and
in the absence of other evidence that continued registration would be
contrary to the public interest. For example, in Melvin N. Seglin,
M.D., 63 FR 70,431 (DEA 1998), the respondent's COR was renewed and
continued based on a finding that respondent had accepted
responsibility for his misconduct which was not likely to recur. Id. at
70,433.
Turning to the evidence in this case, the Government's evidence
essentially consists of the court records relating to Respondent's
federal health care fraud conviction, to include an exclusion letter
from HHS. DI Pacella testified that his investigation was limited
essentially to a review of those records.\24\ (Tr. 33.)
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\24\ Contrary to the Government's prehearing statement, DI
Pacella offered no testimony factually related to Respondent's
criminal conduct, to include an allegation that he ``delivered
apparently fictitious medical records in response to a grand jury
subpoena.'' (ALJ Ex. 4, at 2.) In fact, DI Pacella's testimony made
clear that his investigation was limited solely to a review of court
records offered at hearing. (Tr. 32-33.) DI Pacella testified that
he did not review or request any of Respondent's state or federal
prescribing practice records . (Tr. 35-36.) Nor did he interview
Respondent about the details of his criminal conviction. (Tr. 38.)
DI Pacella also testified that he did not participate in or consult
with the prosecutor at any time during the criminal case, apparently
having no role or independent knowledge of Respondent's criminal
case. (Tr. 42-44.) Not surprisingly, DI Pacella credibly
acknowledged during cross-examination that all of his testimony
pertaining to whether a practitioner might improperly profit from
prescribing controlled substances was pure speculation, as he had no
knowledge of any such conduct by Respondent. (Tr. 37, 41-42.)
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Respondent's evidence included two Consent Orders from the Illinois
Department of Financial and Professional Regulation, the most recent
bearing an effective date of July 2, 2010, placing Respondent on
indefinite probation for a minimum period of two years, effective April
3, 2010, with various conditions of probation. (Resp't Ex. C.)
Additionally, Respondent's evidence included a completion certificate
documenting his participation in an ``educational activity titled
Intensive Course in Medical Ethics, Boundaries & Professionalism . . .
on 9/2/2010-9/3/2010 . . . .'' (Resp't Ex. D.)
Respondent also credibly testified at length during hearing,
explaining his educational and professional background, along with the
circumstances surrounding the allegations in the OSC. Respondent's
manner throughout his testimony was serious and deliberate. Respondent
testified without reference to notes or other written material, unless
specifically directed by counsel, and he was accurately able to recall
events with a reasonable level of certainty. Respondent did not display
hostility during testimony or other visible mannerisms that adversely
impacted his credibility, and unhesitatingly acknowledged and admitted
past instances of misconduct. I find Respondent's testimony to be fully
credible in that it was internally consistent and consistent with other
objective evidence of record.
Standing alone, Respondent's criminal conviction for a federal
health care fraud offense, and mandatory exclusion from participation
in the Medicare program pursuant to 42 U.S.C. 1320a-7(a) could
certainly support a revocation sanction. But that is not the case here.
Respondent' s testimony at hearing, which I find to be sincere and
credible, demonstrates that revocation is not an appropriate sanction
given Respondent's full acceptance of responsibility for past
misconduct, demonstration of remorse, and tangible efforts at
rehabilitation following conviction. The un-rebutted evidence of record
reflects that Respondent timely admitted full responsibility for his
criminal conduct,\25\ pursuant to a plea agreement, for which he was
sentenced to two years' probation, with the first four months ``to be
served in [a] work release program with the Salvation Army.'' (Gov't
Ex. 2, at 2.) Respondent testified that he pled guilty because he knew
he was wrong and expressed remorse for his misconduct. (Tr. 56-57.)
Respondent has also met all of the terms and conditions of his
sentence, to include payment of a $10,000 fine, a $100 assessment, and
restitution of $28,349. (Tr. 57-58; Gov't Ex. 3.) Additionally,
Respondent has completed his four-month period of work release with the
Salvation Army, along with 250 hours of community service. (Tr. 58-59.)
Of significance, Respondent's fully successful completion of the terms
of his federal probation resulted in early termination
[[Page 35027]]
on January 29, 2011, eight months earlier than scheduled. (Tr. 41, 59.)
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\25\ ``Defendant has clearly demonstrated a recognition and
affirmative acceptance of personal responsibility for his criminal
conduct.'' (Gov't Ex. 3 at 7.)
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In addition to the foregoing, there is no other credible evidence
of record that Respondent's registration would be inconsistent with the
public interest, to include issues with his prescribing practices,
making unnecessary any recommendation that the registration be subject
to conditions. The Government's argument that ``Respondent cannot be
trusted to tell the truth'' because of his fraud conviction, (Gov't
Br., at 6), is inconsistent with the evidence of record. Such an
argument might be persuasive in a case where a respondent does not
testify at all or testifies untruthfully, but Respondent did credibly
testify at length. There is also no evidence that Respondent impeded
the criminal investigation or was untruthful at any stage of the
sentencing process, which was required by Respondent's plea agreement
with the United States. (Gov't Ex. 3 at 10-11.) This is not to minimize
the seriousness of Respondent's criminal misconduct, but the
Government's argument that Respondent cannot be trusted to tell the
truth based solely on his fraud conviction ignores the significant
recent positive evidence to the contrary. I find by substantial
evidence of record that Respondent's post-offense conduct and testimony
at hearing demonstrate that he has been truthful, and can continue to
be entrusted to tell the truth.
Respondent has also fulfilled the requirements of discipline
related to his Illinois medical license, to include serving a four-
month suspension, payment of a $1,000 fine, and completion of a
continuing medical education requirement. (Tr. 60-61; Resp't Ex. D.)
Respondent is also in compliance with the terms of his medical license
probation. (Tr. 61.) In light of the foregoing, and consistent with DEA
precedent, I find that revocation of Respondent's registration is not
an appropriate sanction in this case.
Conclusion And Recommendation
I recommend continuation of Respondent's DEA COR and approval of
any pending applications for renewal or modification on the grounds
that Respondent's continued registration would be fully consistent with
the public interest as that term is used in 21 U.S.C. 823(f).
Dated: October 13, 2011.
Timothy D. Wing
Administrative Law Judge
[FR Doc. 2012-14319 Filed 6-11-12; 8:45 am]
BILLING CODE 4410-09-P