Hoi Y. Kam, M.D.; Decision and Order, 62694-62698 [2013-24627]

Download as PDF 62694 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices such drugs and that he be prohibited from prescribing controlled substances to himself or any family member. Further, I recommend that the Respondent be ordered to comply with the terms of his DBC probation and promptly notify the DEA if the DBC takes any action against his dental license. Lastly, I recommend that he maintain and provide quarterly prescription logs for all controlled substances prescriptions he authorizes to the local DEA office for monitoring. I recommend these restrictions apply for three years from the date of the final order so directing this result. In this way, the Respondent may safely continue his return to the full practice of dentistry, and the DEA can assure itself of the Respondent’s compliance with DEA regulations as well as the protection of the public interest. Dated: October 17, 2012. Gail A. Randall, Administrative Law Judge. [FR Doc. 2013–24697 Filed 10–21–13; 8:45 am] BILLING CODE 4410–09–P DEPARTMENT OF JUSTICE Drug Enforcement Administration sroberts on DSK5SPTVN1PROD with FRONT MATTER Hoi Y. Kam, M.D.; Decision and Order On August 29, 2012, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Hoi Y. Kam, M.D. (Respondent), of Fresh Meadows, New York. The Show Cause Order proposed the revocation of Respondent’s DEA Certificate of Registration, which authorizes him to dispense controlled substances as a practitioner, as well as the denial of any pending applications to renew or modify his registration, on the grounds that he: (1) Materially falsified a renewal application, and (2) committed acts which render his registration inconsistent with the public interest. Show Cause Order at 1 (citing 21 U.S.C. 824(a)(1) & (4)). More specifically, the Show Cause Order alleged that Respondent materially falsified his December 1, 2011 renewal application, by falsely answering the application question which asked if he had ‘‘ever surrendered for cause or had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation or is any such action pending?’’ Id. at 2. The Government alleged that Respondent gave a negative answer to this question, notwithstanding that on July 12, 2011, VerDate Mar<15>2010 22:23 Oct 21, 2013 Jkt 232001 the New York State Department of Health, Office of Professional Misconduct and Discipline, had revoked his medical license, based on a finding that he had billed for Medicaid services which he did not perform and ‘‘created false entries in [his patient] charts to conceal that fact.’’ Id. at 1–2. However, the Government then alleged that Respondent’s ‘‘medical license was reinstated on October 27, 2011.’’ Id. at 1. The Government further alleged that between July 21 and October 4, 2011, Respondent violated federal law and regulations by ‘‘issu[ing] at least six (6) prescriptions for controlled substances, despite lacking legal authority to do so.’’ Id. (citing 21 U.S.C. 841(a)(1) & 21 CFR 1306.03). Specifically, the Government alleged that Respondent had issued a July 21, 2011 prescription for 240 dosage units of oxycodone 30mg; a September 16, 2011 prescription for 30 dosage units of alprazolam 2mg; two October 4, 2011 prescriptions for 30 dosage units of zolpidem tartrate 10mg; an October 4, 2011 prescription for 60 dosage units of alprazolam .25mg; and an October 4, 2011 prescription for 90 dosage units of oxycodone/ acetaminophen 7.5/500mg. Id. at 2. On August 31, 2012, a DEA Diversion Investigator (DI) ‘‘attempted to personally serve the Order to Show Cause on Respondent at his registered address.’’ GX 2, at 3. According to the DI, ‘‘[s]ince no one appeared to be at the registered location, I left a copy of the Order to Show Cause in Respondent’s mailbox.’’ Id. Subsequently, on September 10, 2012, Respondent wrote a letter to DEA Counsel in which he denied the allegations of the Show Cause Order. GX 7. Regarding the allegation that he had written six prescriptions between July 10 and October 27, 2011, Respondent denied writing them with the exception of ‘‘the prescription dated July 21, 2011,’’ which it was ‘‘possible’’ he ‘‘predated.’’ Id. Respondent contended that he was ‘‘so sure someone stole my prescription pads without my knowledge’’ and that he was ‘‘the victim of prescription fraud.’’ Id. He also urged the Government to check the handwriting on the prescriptions. Id. As for the material falsification allegation, Respondent wrote that ‘‘I probably did not pay attention to the box. I marked on the wrong box. I apologize for the mistake.’’ Id. And regarding the basis for the action taken by the State against his medical license, Respondent wrote that he ‘‘never billed for the Medicaid services,’’ that ‘‘[t]he Medicaid provider number is not mine,’’ PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 and that he ‘‘did render the services.’’ Id.1 However, while the Show Cause Order notified Respondent that he had a right to request a hearing and the procedure for doing so, Respondent did not request a hearing. Consistent with 21 CFR 1301.43(c), I deem Respondent’s September 10, 2012 letter to be a statement of his ‘‘position on the matters of fact and law’’ asserted by the Show Cause Order. On September 23, 2012, Respondent submitted a further letter to DEA counsel, which he titled as his ‘‘response to’’ a ‘‘phone conversation’’ he had with the DI. GX 8, at 1. Therein, Respondent asserted that the DI ‘‘admitted there are false accusations of the prescriptions written.’’ Id. Respondent also again admitted that he ‘‘predated the prescription for a patient in June,’’ 2 and explained that he ’’could not foresee my license revoked in early July and I had only seventy-two hours [sic] notice.’’ Id. Respondent further wrote that there was ‘‘[n]o way [the] patient was aware of what happened’’ and that the ‘‘patient is willing to testify for me.’’ Id. Respondent included an unsworn letter of the patient (N.I.), who stated that he ‘‘got the prescription on 6/28/12 and I had no time in July 2011,’’ and that he ‘‘requested[ ] Respondent to predate [sic] on July 28, 11.’’ Id. at 2. The patient also wrote that he ‘‘did not know [that] something happened to’’ Respondent. Id. Regarding the prescription, Respondent explained that ‘‘pharmacist should call and verify each controlled substances [sic] prescription’’ but that ‘‘[n]o one called me.’’ Id. at 1. Continuing, Respondent wrote that ‘‘[s]ince July 11, 2011, no pharmacies accepted my prescriptions anymore. Why this pharmacy dispensed the medication without following the routine[?]’’ Id. Respondent then asserted that the name of the drug was misspelled on the prescription, and that he ‘‘had the intention to misspell to make sure the pharmacy . . . call[ed], then I know what happens to the prescriptions. Unfortunately, no pharmacies called regarding to the selling [sic] mistakes.’’ Id. Here again, however, Respondent did not request a hearing and ended the letter by stating 1 Respondent also disputed the findings of the State Board, but then noted that his ‘‘[l]awyer told [him] to forget about it,’’ that ‘‘[t]he appeal will not change,’’ and that he ‘‘refused to beg [the State board] because I believed I did not do anything wrong.’’ GX 7. 2 If the prescription was written in June, it was actually post-dated. E:\FR\FM\22OCN1.SGM 22OCN1 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices that he did not ‘‘think it is necessary to show cause or [sic] hearing 3.’’ Based on Respondent’s failure to request a hearing in either his September 10 or September 23 letter, I find that Respondent has waived his right to a hearing on the allegations of the Show Cause Order. 21 CFR 1301.43(c) & (d). Having reviewed the investigative record submitted by the Government, including Respondent’s letters, I make the following findings of fact. Findings Respondent is the holder of a DEA Certificate of Registration, which authorizes him to dispense controlled substances in schedules II through V as a practitioner. GX 1. On December 1, 2011, Respondent submitted a renewal application, and on April 3, 2012, DEA issued Respondent a new registration, which does not expire until December 31, 2014. Id. Respondent is also the holder of a medical license issued by the New York Department of Health (hereinafter, the Department). On February 10, 2011, the Department’s Bureau of Professional Medical Conduct (hereinafter, BPMC) issued a Statement of Charges to Respondent, which alleged that on or about November 10, 2006, the Department had, following a hearing, ‘‘sustained a decision to exclude Respondent from participation in the Medicaid program for five (5) years’’ based on his violation of several state regulations. GX 3, at 6 (citations omitted). The BPMC alleged that these violations ‘‘would constitute professional misconduct under the laws of New York State.’’ Id. On May 19, 2011, a committee of the BPMC held a hearing, after which it determined that Respondent’s medical license should be revoked. Id. at 3, 9. On July 1, 2011, the BPMC committee issued its decision, which provided that it was effective upon service. Id. at 10. Therein, the BPMC explained that: sroberts on DSK5SPTVN1PROD with FRONT MATTER This is a case about Medicaid fraud for which the Respondent has been excluded from the Medicaid program. The five-year exclusion was sustained by a decision after a hearing in 2006. The panel weighed all the facts and circumstances in this case and recognized that this was primarily a case of greed and dishonesty.4 3 However, I have also deemed this letter to be a written statement of position on the matters of fact and law asserted in the Show Cause Order. 4 As set forth in the Administrative Review Board’s (ARB) discussion of the original exclusion proceeding: The Exclusion found that the Respondent’s records failed to reflect accurately the examinations the Respondent performed on the Investigators. Such conduct amounted to misconduct under [N.Y. VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 Id. at 9. The BPMC further explained that while it had considered lesser sanctions than revocation, it concluded that revocation was appropriate because it ‘‘was troubled and concerned by the Respondent’s patent lack of respect for the truth.’’ Id. On July 5, 2011, the Department served the Determination and Order on Respondent and his attorney in that proceeding, by certified mail. Id. at 1. The letter specifically stated that the order was ‘‘deemed effective upon [its] receipt or seven (7) days after mailing by certified mail.’’ Id. (citation omitted). The letter also explained that a ‘‘[r]equest for review of the . . . determination by the Administrative Review Board stays penalties other than suspension or revocation until final determination by that Board.’’ Id. at 2. Respondent sought review by the State’s Administrative Review Board (ARB). On or about October 14, 2011, the ARB issued its Determination and Order. GX 2, at 2. Therein, the ARB vacated the revocation of Respondent’s medical license, noting, inter alia, ‘‘that the conduct at issue under the Medicaid Exclusion occurred between 2001 and 2004’’ and that the State ‘‘has offered no evidence that [he] has engaged in additional misconduct since and the Respondent has remained in practice during that time.’’ GX 4, at 8. However, the ARB voted unanimously to suspend Respondent’s license for five years, but ‘‘to stay the suspension in full and to place [him] on probation,’’ subject to various terms and conditions. On October 27, 2011, the New York Diversion Program Manager sent a letter to Respondent by certified mail; the letter stated that the Government had been advised that his medical license had been revoked (even though it no longer was).5 GX 5. After quoting the Educ. Law] § 6530(32) as failure to maintain accurate records. The Exclusion also concluded that the Respondent billed Medicaid for services the Respondent never provided. Such conduct amounted to fraud in practice under the misconduct definition at [N.Y. Educ. Law] § 6530(2). The Exclusion also found that the Respondent violated Title 18 NYCRR § 515.2(b)(12) by failing to furnish medical care according to professional recognized standards. The failure, on repeated occasions, to practice according to accepted medical standards amounted to practicing medicine with negligence on more than one occasion, a violation under [N.Y. Educ. Law] § 6530(3). GX 4, at 7–8. It is also noted that among the probationary terms imposed by the ARB was that ‘‘Respondent shall maintain legible and complete medical records, which accurately reflect the evaluation and treatment of patients. The medical records shall contain all information required by State rules and regulations regarding controlled substances.’’ Id. at 15. 5 According to the DI’s affidavit, shortly after the State revoked Respondent’s medical license, she PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 62695 Agency’s authority under section 824(a)(3) to revoke a registration where a registrant ‘‘is no longer authorized by State law’’ to dispense controlled substances, the letter stated that ‘‘[i]n lieu of undergoing an Order to Show Cause proceeding against your DEA registration, we are providing you an opportunity to surrender your DEA registration by signing the enclosed DEA Voluntary Surrender of Controlled Substances Privileges form (DEA Form 104) for cause.’’ Id. Respondent did not, however, claim the letter. GX 2, at 2. As found above, on December 1, 2011, Respondent submitted an application to renew his DEA registration. GX 2, at 3. In completing the application, Respondent was required to answer several questions, including question three, which asked: ‘‘Has the applicant ever surrendered for cause or had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation or is any such action pending?’’ Id.; see also GX 1, at 4. Respondent answered no. GX 1, at 4. On or about April 12, 2012, a DI issued a subpoena to the N.Y. Department of Health, requesting a summary of all controlled substance prescriptions issued by Respondent between July 12 and October 27, 2011. GX 2, at 3. On April 16, 2012, the State provided the DI with a report which listed six prescriptions as having been issued by Respondent during the above period. Id. On September 14, 2012, the DI contacted the pharmacies which had filled the prescriptions listed on the report and obtained copies of the prescriptions. Id. Upon reviewing the prescriptions, the DI determined that only one of the six prescriptions had been issued by Respondent. Id. at 4. This prescription, which was dated July 28, 2011, was for 240 oxycodone 30mg and was issued to N.I. As noted above, in his letter, Respondent denied writing the prescription after his state license was revoked. However, he did admit to presigning the prescription, and submitted an unsworn statement from N.I. which corroborates Respondent’s story. Discussion Under the Controlled Substances Act, ‘‘[a] registration pursuant to section 823 of this title to . . . dispense a controlled contacted Respondent’s attorney and told him that because Respondent’s ‘‘medical license was revoked, he was required to surrender his DEA registration.’’ GX 2, at 2. Several days later, the DI also sent a letter to Respondent’s attorney, which included a Voluntary Surrender form. Id. However, ‘‘[n]o response was received.’’ Id. E:\FR\FM\22OCN1.SGM 22OCN1 62696 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has materially falsified any application filed pursuant to or required by’’ the Act, or ‘‘has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.’’ 21 U.S.C. 824(a)(1) & (4). With respect to the latter provision, the CSA provides that the following factors are to be considered in the case of a practitioner: sroberts on DSK5SPTVN1PROD with FRONT MATTER (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 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. Id. The public interest ‘‘factors are . . . considered in the disjunctive.’’ Robert A. Leslie, 68 FR 15227, 15230 (2003). I may rely on any one or a combination of factors and may give each factor the weight I deem appropriate in determining whether to revoke a registration or to deny an application for a registration. Id. Moreover, I am ‘‘not required to make findings as to all of the factors.’’ Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173–74 (D.C. Cir. 2005). Where the Government has met its prima facie burden of showing that grounds exist to revoke a registration, whether because a registrant (or applicant) materially falsified an application for registration or committed acts which render his registration inconsistent with the public interest, the burden of production shifts to the registrant to ‘‘present sufficient mitigating evidence’’ to show why he can be entrusted with a new registration. Medicine ShoppeJonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 (1988))). ‘‘Moreover, because ‘past performance is the best predictor of future performance,’ ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), [DEA] has repeatedly held that where a registrant has committed acts inconsistent with the public interest, the registrant must accept responsibility for [his] actions and demonstrate that [he] VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 will not engage in future misconduct.’’ Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Cuong Tron Tran, 63 FR 64280, 64283 (1998); Prince George Daniels, 60 FR 62884, 62887 (1995). The Material Falsification Allegation The Government contends that Respondent materially falsified his December 1, 2011 application to renew his registration when he answered ‘‘no’’ to the question of whether he had ‘‘ever surrendered (for cause) or had a state professional license or controlled substance registration revoked, suspended, denied, restricted, or placed on probation, or is any such action pending?’’ Respondent’s answer was clearly false, because his State medical license had not only been revoked for approximately three months (even if the revocation was ultimately vacated), his license was then suspended by the ARB (albeit the suspension was stayed), and he was also placed on probation. However, that Respondent’s answer was false does not end the inquiry, because his answer must also have been material. ‘‘The most common formulation’’ of the concept of materiality is that ‘‘a concealment or misrepresentation is material if it ‘has a natural tendency to influence, or was capable of influencing, the decision of’ the decisionmaking body to which it was addressed.’’ Kungys v. United States, 485 U.S. 759, 770 (1988) (quoting Weinstock v. United States, 231 F.2d 699, 701 (D.C. Cir. 1956) (other citation omitted)) (quoted in Samuel S. Jackson, 72 FR 23848, 23852 (2007)); see also United States v. Wells, 519 U.S. 482, 489 (1997) (quoting Kungys, 485 U.S. at 770). The Supreme Court has further explained that ‘‘[i]t has never been the test of materiality that the misrepresentation or concealment would more likely than not have produced an erroneous decision, or even that it would more likely than not have triggered an investigation.’’ Kungys, 485 U.S. at 771 (emphasis added). Rather, the test is ‘‘whether the misrepresentation or concealment was predictably capable of affecting, i.e., had a natural tendency to affect, the official decision.’’ Id. ‘‘ ‘[T]he ultimate finding of materiality turns on an interpretation of substantive law,’ ’’ id. at 772 (int. quotations and other citation omitted), and must be met ‘‘by evidence that is clear, unequivocal, and convincing.’’ 6 Id. 6 While Kungys involved a denaturalization proceeding, in other civil proceedings, courts have required that a party establish that a falsification is PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 As the above makes clear, the relevant decision for assessing whether a false statement is material is the Agency’s decision as to whether an applicant is entitled to be registered (or in the case of a current registrant, remain registered). In this regard, the Government argues that ‘‘Respondent is not ‘entitled to be registered’ based upon the revocation and subsequent suspension/probation of his medical license, as well as the fact that he issued a prescription for controlled substances during the period where he was not legally authorized to do so.’’ Req. for Final Agency Action, at 7–8. Because possessing authority to dispense controlled substances under the laws of the State in which a physician practices medicine is a requirement for holding a DEA registration, see 21 U.S.C. 802(21) & 823(f), a false answer to the state license question is material where an applicant no longer holds authority to practice medicine (regardless of the reason for the State’s action) or authority to dispense controlled substances, as well as where the state has placed restrictions on a practitioner’s authority to prescribe controlled substances. So too, because in determining whether an application should be granted, Congress directed the Agency to consider the five public interest factors, even where an applicant currently holds unrestricted state authority to dispense controlled substances, the failure to disclose state action against his medical license may be material if the action was based on conduct (or on the status arising from such conduct, i.e., a conviction for a controlled substance offense or mandatory exclusion from federal health care programs) which is actionable under either the public interest factors or the grounds for denial, suspension, and revocation set forth in section 824. See Scott C. Bickman, 76 FR 17694, 17701 (2011). Here, however, the Government’s contention ignores that the BPMC’s revocation order had been vacated prior to Respondent’s filing of the application. Moreover, while the ARB suspended Respondent’s license, the suspension was stayed. Thus, Respondent was ‘‘authorized’’ to dispense controlled substances at the time he submitted the application. DEA therefore could not have revoked his registration and denied his application on the basis that Respondent lacked material by ‘‘clear, unequivocal, and convincing evidence’’ and not simply by a ‘‘preponderance of the evidence.’’ Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed. Cir. 1984). In any event, the Government’s evidence on materiality does not even meet the preponderance standard. E:\FR\FM\22OCN1.SGM 22OCN1 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices sroberts on DSK5SPTVN1PROD with FRONT MATTER state authority. See 21 U.S.C. 823(f); id. § 824(a)(3) (authorizing the suspension or revocation of a registration upon a finding that ‘‘the registrant . . . has had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances’’). In placing Respondent on probation, the ARB also noted the various findings of the order which had excluded him years earlier from the New York Medicaid program. However, because the exclusion order does not fall under the mandatory exclusion authority of 42 U.S.C. 1320a–7(a), but rather, the permissive exclusion authority of 42 U.S.C. 1320a–7(b), by itself, the exclusion does not fall within the Agency’s authority to suspend or revoke a registration. See 21 U.S.C. 824(a)(5); see also Terese, Inc., d/b/a Peach Orchard Drugs, 76 FR 46843, 46848 (2011). Moreover, the Government offers no evidence that Respondent’s Medicaid exclusion was based on findings that he committed acts, or had been convicted of criminal offenses, which provide actionable grounds to revoke his registration under either the public interest standard of sections 823(f) and 824(a)(4) or section 824(a)(2). To be sure, the probationary terms imposed by the ARB included that Respondent maintain medical records that ‘‘contain all information required by State rules and regulations regarding controlled substances.’’ GX 4, at 15. The ARB’s Order did not, however, discuss what evidence supported the imposition of this probationary term. See generally GX 14. And the Government offers no argument, let alone any evidence, that the truthful disclosure of the State’s action against his medical license would have led it to evidence in the exclusion proceeding that Respondent violated any state rules or regulations regarding controlled substances and thus would have supported the denial of his application.7 Indeed, in its Request for 7 On October 27, 2011, more than a month prior to Respondent’s submission of the application, the Government wrote Respondent, seeking the surrender of his registration. GX 5. Therein, the Government noted that on July 15, 2011, it had been informed that the BPMC had revoked his medical license ‘‘pursuant to [his] exclusion from participating in the NYS Medical [sic] Program for five (5) years.’’ Id. However, because the materiality of a statement is assessed based on ‘‘the intrinsic capabilities of the false statement itself, rather than the possibility of the actual attainment of its end as measured by collateral circumstances,’’ United States v. Goldfine, 538 F.2d 815, 820–21 (9th Cir. 1976) (internal quotations and citation omitted), it does not matter that certain employees of the Government already knew that the answer was false. That being said, the Government still bears VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 Final Agency Action, the Government concedes that ‘‘the allegations underlying the disciplinary action did not involve controlled substances.’’ Req. for Final Agency Action, at 8. I therefore conclude that the Government has failed to show that Respondent’s false statement had the capacity to influence the Agency’s decision to grant his application. The Public Interest Allegations The Government also asserts that Respondent has committed acts which render his registration inconsistent with the public interest. More specifically, the Government argues that factors two (Respondent’s experience in dispensing controlled substances) and four (Respondent’s compliance with applicable laws related to controlled substances) support the revocation of his registration.8 Id. at 9. More specifically, the Government contends that ‘‘[i]n order to maintain a registration with DEA, a practitioner must be currently authorized to handle controlled substances in the jurisdiction in which he practices.’’ Id. (citing 21 U.S.C. 802(21); 823(f) (internal quotations omitted)). The Government then maintains that ‘‘[n]otwithstanding having lost his state authority to practice medicine, Respondent did not surrender his DEA’’ registration. Id. While the Government is correct that a practitioner must be currently authorized under the laws of the State in which he practices in order to maintain a DEA registration, it cites no support for the suggestion that a registrant must surrender his registration upon the loss of his state authority. Indeed, as the title of DEA Form 104 makes plain, surrendering one’s registration is a ‘‘voluntary’’ act. See GX 5, at 2 (form entitled: the burden of showing, through evidence which is clear, convincing and unequivocal, that the false statement is material. As for its further contention that Respondent’s false statement was material because ‘‘he issued a prescription for controlled substances during the period where he was not legally authorized to do so,’’ as explained below, the Government’s evidence does not conclusively establish that the prescription was written after his state license was revoked, rather than written (as he maintains) before his license was revoked and postdated. 8 The Government correctly notes that there is no evidence that Respondent has been convicted of an offense under federal or state laws related to the manufacture, distribution, or dispensing of controlled substances. However, there are a number of reasons why even a person who has engaged in misconduct may never have been convicted of an offense under this factor, let alone prosecuted for one. Dewey C. MacKay, 75 FR 49956, 49973 (2010), pet. for rev. denied MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011). The Agency has therefore held that ‘‘the absence of such a conviction is of considerably less consequence in the public interest inquiry’’ and is therefore not dispositive. Id. PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 62697 ‘‘VOLUNTARY SURRENDER OF CONTROLLED SUBSTANCES PRIVILEGES’’); see also id. (first paragraph of form: ‘‘After being fully advised of my rights, and understanding that I am not required to surrender my controlled substance privileges, I freely execute this document and choose to take the actions described herein.’’). Even where a registrant no longer possesses state authority, as long as he does not use that registration to acquire, distribute, or dispense a controlled substance, he neither commits a violation of federal law, nor an act inconsistent with the public interest, when he refuses to voluntarily surrender his registration. Rather, as the Voluntary Surrender form—which was given that title for a reason—makes clear, a registrant is entitled to insist that the Government pursue the revocation of his registration through a proceeding brought under 21 U.S.C. 824(a)(3). On the other hand, where a registrant no longer possesses state authority, he cannot lawfully prescribe a controlled substance. See 21 CFR 1306.03(a) (‘‘A prescription for a controlled substance may be issued only by an individual practitioner who is . . . [a]uthorized to prescribe controlled substances by the jurisdiction in which he is licensed to practice his profession.’’); see also 21 U.S.C. 802(10) (‘‘The term ‘dispense’ means to deliver a controlled substance to an ultimate user . . . by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance. . . .’’). And ‘‘[e]xcept as authorized by this subchapter [i.e., the Controlled Substances Act], it is ‘‘unlawful for any person knowingly or intentionally . . . to distribute or dispense . . . a controlled substance.’’ 21 U.S.C. 841(a)(1). As found above, Respondent disputes the Government’s contention that he violated the CSA by issuing a controlled substance prescription for 240 oxycodone 30mg. on July 28, 2011, after the revocation by the BPMC of his New York medical license. Rather, Respondent maintains that he actually wrote the prescription in June 2011, prior to the BPMC’s issuance of its order. Respondent also submitted an unsworn hearsay statement from the patient who received the prescription, which supports his assertion. However, even accepting Respondent’s explanation that he presigned (and post-dated) the prescription, I conclude that he still violated the CSA. Under DEA’s regulations, ‘‘[a]ll prescriptions for controlled substances shall be dated as of, and signed on, the E:\FR\FM\22OCN1.SGM 22OCN1 62698 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices day when issued.’’ 21 CFR 1306.05(a). DEA has repeatedly held that the act of pre-signing a prescription violates the CSA. See Alvin Darby, 75 FR 26993, 26999 (2010) (collecting cases). Thus, whether I accept the Government’s contention that Respondent issued a prescription when he lacked state authority to do so, or Respondent’s assertion that he simply pre-signed a prescription, he still distributed a controlled substance in violation of 21 U.S.C. 841(a)(1). However, the record contains no evidence that Respondent acted outside of the usual course of professional practice and lacked a legitimate medical purpose in issuing the prescription.9 sroberts on DSK5SPTVN1PROD with FRONT MATTER Sanction The Government argues that it has ‘‘establishe[d] by a preponderance of the evidence that Respondent’s continued registration is inconsistent with the public interest’’ and that Respondent has put on ‘‘no evidence that could support a finding that [he] should be entrusted with a . . . registration.’’ Req. for Final Agency Action, at 9–10 (citing cases). The Government thus seeks the revocation of Respondent’s registration.10 Had the Government proved that Respondent materially falsified his application, I would grant the Government’s request. The Government, however, has proved only that Respondent committed a single act of issuing a prescription in violation of DEA regulations (whether because he lacked state authority or pre-signed/ post-dated the prescription). Moreover, the Government has produced no evidence that the prescription lacked a 9 The Government also argues that factor one—the recommendation of the state licensing board— supports its proposed sanction of revocation. According to the Government, ‘‘[t]hough his medical license is not revoked, and the allegations underlying action did not involve controlled substances, such action still weighs in favor of revocation.’’ Req. for Final Agency Action, at 8 (citing George Mathew, 75 FR 66138, 66145 (2010)). While my decision in Mathew noted that the respondent there had been subject to two disciplinary proceedings by the state board, one of the proceedings (which resulted in a summary suspension) was based on the respondent’s failure to properly treat emergency room patients and did not involve his prescribing of controlled substances. 75 FR at 66,145. However, at the time of this Agency’s proceeding, the State had reinstated Respondent’s medical license. Id. Accordingly, I placed no weight on that proceeding and relied only on the other proceeding, which sanctioned the respondent for prescribing controlled substances to patients he never physically examined. Id. Thus, the Government’s reliance on Mathew is misplaced. 10 The Government also argues that Respondent’s renewal application should be denied. Req. for Final Agency Action, at 1. However, it is too late for that, as the Government renewed Respondent’s registration on April 3, 2012. GX 1. VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 legitimate medical purpose. See Dewey C. MacKay, 75 FR 49956, 49977 (2010) (holding that DEA can revoke a practitioner’s registration based on a single act of intentional diversion), pet. for rev. denied MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011). As I have previously held, in determining the appropriate sanction, DEA considers the egregiousness and the scope of the misconduct which has been proved on the record, as well as the need to deter similar misconduct on the part of others. See Michael S. Moore, 76 FR 45867, 45868 (2011); Terese, Inc., 76 FR at 46848–49; Janet L. Thornton, 73 FR 50354, 50356 (2008). In Thornton, the Government sought the revocation of a physician’s registration, based on her having written two controlled substance prescriptions for former neighbors, when her license to practice in that State had been suspended. 73 FR at 50355. The physician, however, was practicing in another State, where she was licensed. Id. While the then-Deputy Administrator found that the prescriptions violated federal law because the physician engaged in the unlicensed practice of medicine and were thus issued outside of the usual course of professional practice (which the physician admitted in a state board proceeding), she declined to revoke the physician’s registration, noting that there was no evidence that the physician had written the prescriptions ‘‘for other than a legitimate medical purpose.’’ Id. The Deputy Administrator also noted that a provision of state law created an exemption from the State’s licensing requirements for ‘‘occasional consultations or cases’’ where a physician was ‘‘lawfully practicing medicine in another state,’’ and that while the State Board found that the physician violated the State’s Medical Practice Act, the physician’s case appeared to be one of first impression. Id. at 50356. Based on these circumstances, the Deputy Administrator concluded that the physician’s violations did not warrant the revocation or suspension of her registration. Id. Here, while the proven misconduct is limited to a single prescription, I conclude that a period of outright suspension is warranted. In contrast to Thornton, where the state law defining what constituted the unauthorized practice of medicine was arguably unclear, the applicable DEA regulations are clear, whether Respondent issued the prescription after his state license was revoked, see 21 CFR 1306.03(a), or whether he pre-signed (and post-dated) the prescription. Id. 1306.05(a). In either PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 case, the evidence supports a finding that Respondent knowingly dispensed a controlled substance in violation of the Controlled Substances Act. See 21 U.S.C. 841(a)(1). Accordingly, I will order that Respondent’s registration be suspended outright for a period of six months. Order Pursuant to the authority vested in me by 21 U.S.C. 824(a)(4), as well as 28 CFR 0.100(b), I order that the DEA Certificate of Registration issued to Hoi Y. Kam, M.D., be, and it hereby is, suspended for a period of six months. This Order is effective November 21, 2013. Dated: October 9, 2013. Thomas M. Harrigan, Deputy Administrator. [FR Doc. 2013–24627 Filed 10–21–13; 8:45 am] BILLING CODE 4410–09–P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 08–6] Lannett Company, Inc.; Grant of Registration To Import Schedule I Substance On November 15, 2012, I, the Administrator of the Drug Enforcement Administration, issued a Declaratory Order in the above-captioned matter.1 Therein, I held that Lannett Company, Incorporated’s (hereinafter, Lannett) proposed importation of synthetic dronabinol (THC) in finished dosage form, a schedule I controlled substance, for the purpose of conducting stability and bioequivalency studies to support an Abbreviated New Drug Application (ANDA), constitutes ‘‘scientific, analytical, or research uses’’ and is therefore a permissible importation under 21 U.S.C. 952(a)(2)(C). Declaratory Order, at 36. However, I further held that Lannett had not justified that the quantities of the proposed importations (300,000 dosage units) were ‘‘limited quantities’’ as required by section 952(a)(2)(C). Id. at 35–36. I therefore ordered Lannett to provide justification for the quantities it sought to import. Id. at 40. I also held that upon Lannett’s ‘‘providing adequate justification for the quantit[ies] of the [proposed] importation[s],’’ its ‘‘registration would be consistent with 1 All citations to the Declaratory Order are to the slip opinion and not to the Order as published here in the Appendix. E:\FR\FM\22OCN1.SGM 22OCN1

Agencies

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62694-62698]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24627]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Hoi Y. Kam, M.D.; Decision and Order

    On August 29, 2012, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Hoi Y. Kam, M.D. (Respondent), of Fresh Meadows, New 
York. The Show Cause Order proposed the revocation of Respondent's DEA 
Certificate of Registration, which authorizes him to dispense 
controlled substances as a practitioner, as well as the denial of any 
pending applications to renew or modify his registration, on the 
grounds that he: (1) Materially falsified a renewal application, and 
(2) committed acts which render his registration inconsistent with the 
public interest. Show Cause Order at 1 (citing 21 U.S.C. 824(a)(1) & 
(4)).
    More specifically, the Show Cause Order alleged that Respondent 
materially falsified his December 1, 2011 renewal application, by 
falsely answering the application question which asked if he had ``ever 
surrendered for cause or had a state professional license or controlled 
substance registration revoked, suspended, denied, restricted, or 
placed on probation or is any such action pending?'' Id. at 2. The 
Government alleged that Respondent gave a negative answer to this 
question, notwithstanding that on July 12, 2011, the New York State 
Department of Health, Office of Professional Misconduct and Discipline, 
had revoked his medical license, based on a finding that he had billed 
for Medicaid services which he did not perform and ``created false 
entries in [his patient] charts to conceal that fact.'' Id. at 1-2. 
However, the Government then alleged that Respondent's ``medical 
license was reinstated on October 27, 2011.'' Id. at 1.
    The Government further alleged that between July 21 and October 4, 
2011, Respondent violated federal law and regulations by ``issu[ing] at 
least six (6) prescriptions for controlled substances, despite lacking 
legal authority to do so.'' Id. (citing 21 U.S.C. 841(a)(1) & 21 CFR 
1306.03). Specifically, the Government alleged that Respondent had 
issued a July 21, 2011 prescription for 240 dosage units of oxycodone 
30mg; a September 16, 2011 prescription for 30 dosage units of 
alprazolam 2mg; two October 4, 2011 prescriptions for 30 dosage units 
of zolpidem tartrate 10mg; an October 4, 2011 prescription for 60 
dosage units of alprazolam .25mg; and an October 4, 2011 prescription 
for 90 dosage units of oxycodone/acetaminophen 7.5/500mg. Id. at 2.
    On August 31, 2012, a DEA Diversion Investigator (DI) ``attempted 
to personally serve the Order to Show Cause on Respondent at his 
registered address.'' GX 2, at 3. According to the DI, ``[s]ince no one 
appeared to be at the registered location, I left a copy of the Order 
to Show Cause in Respondent's mailbox.'' Id. Subsequently, on September 
10, 2012, Respondent wrote a letter to DEA Counsel in which he denied 
the allegations of the Show Cause Order. GX 7.
    Regarding the allegation that he had written six prescriptions 
between July 10 and October 27, 2011, Respondent denied writing them 
with the exception of ``the prescription dated July 21, 2011,'' which 
it was ``possible'' he ``predated.'' Id. Respondent contended that he 
was ``so sure someone stole my prescription pads without my knowledge'' 
and that he was ``the victim of prescription fraud.'' Id. He also urged 
the Government to check the handwriting on the prescriptions. Id.
    As for the material falsification allegation, Respondent wrote that 
``I probably did not pay attention to the box. I marked on the wrong 
box. I apologize for the mistake.'' Id. And regarding the basis for the 
action taken by the State against his medical license, Respondent wrote 
that he ``never billed for the Medicaid services,'' that ``[t]he 
Medicaid provider number is not mine,'' and that he ``did render the 
services.'' Id.\1\
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    \1\ Respondent also disputed the findings of the State Board, 
but then noted that his ``[l]awyer told [him] to forget about it,'' 
that ``[t]he appeal will not change,'' and that he ``refused to beg 
[the State board] because I believed I did not do anything wrong.'' 
GX 7.
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    However, while the Show Cause Order notified Respondent that he had 
a right to request a hearing and the procedure for doing so, Respondent 
did not request a hearing. Consistent with 21 CFR 1301.43(c), I deem 
Respondent's September 10, 2012 letter to be a statement of his 
``position on the matters of fact and law'' asserted by the Show Cause 
Order.
    On September 23, 2012, Respondent submitted a further letter to DEA 
counsel, which he titled as his ``response to'' a ``phone 
conversation'' he had with the DI. GX 8, at 1. Therein, Respondent 
asserted that the DI ``admitted there are false accusations of the 
prescriptions written.'' Id. Respondent also again admitted that he 
``predated the prescription for a patient in June,'' \2\ and explained 
that he ''could not foresee my license revoked in early July and I had 
only seventy-two hours [sic] notice.'' Id. Respondent further wrote 
that there was ``[n]o way [the] patient was aware of what happened'' 
and that the ``patient is willing to testify for me.'' Id. Respondent 
included an unsworn letter of the patient (N.I.), who stated that he 
``got the prescription on 6/28/12 and I had no time in July 2011,'' and 
that he ``requested[ ] Respondent to predate [sic] on July 28, 11.'' 
Id. at 2. The patient also wrote that he ``did not know [that] 
something happened to'' Respondent. Id.
---------------------------------------------------------------------------

    \2\ If the prescription was written in June, it was actually 
post-dated.
---------------------------------------------------------------------------

    Regarding the prescription, Respondent explained that ``pharmacist 
should call and verify each controlled substances [sic] prescription'' 
but that ``[n]o one called me.'' Id. at 1. Continuing, Respondent wrote 
that ``[s]ince July 11, 2011, no pharmacies accepted my prescriptions 
anymore. Why this pharmacy dispensed the medication without following 
the routine[?]'' Id. Respondent then asserted that the name of the drug 
was misspelled on the prescription, and that he ``had the intention to 
misspell to make sure the pharmacy . . . call[ed], then I know what 
happens to the prescriptions. Unfortunately, no pharmacies called 
regarding to the selling [sic] mistakes.'' Id. Here again, however, 
Respondent did not request a hearing and ended the letter by stating

[[Page 62695]]

that he did not ``think it is necessary to show cause or [sic] hearing 
\3\.''
---------------------------------------------------------------------------

    \3\ However, I have also deemed this letter to be a written 
statement of position on the matters of fact and law asserted in the 
Show Cause Order.
---------------------------------------------------------------------------

    Based on Respondent's failure to request a hearing in either his 
September 10 or September 23 letter, I find that Respondent has waived 
his right to a hearing on the allegations of the Show Cause Order. 21 
CFR 1301.43(c) & (d). Having reviewed the investigative record 
submitted by the Government, including Respondent's letters, I make the 
following findings of fact.

Findings

    Respondent is the holder of a DEA Certificate of Registration, 
which authorizes him to dispense controlled substances in schedules II 
through V as a practitioner. GX 1. On December 1, 2011, Respondent 
submitted a renewal application, and on April 3, 2012, DEA issued 
Respondent a new registration, which does not expire until December 31, 
2014. Id.
    Respondent is also the holder of a medical license issued by the 
New York Department of Health (hereinafter, the Department). On 
February 10, 2011, the Department's Bureau of Professional Medical 
Conduct (hereinafter, BPMC) issued a Statement of Charges to 
Respondent, which alleged that on or about November 10, 2006, the 
Department had, following a hearing, ``sustained a decision to exclude 
Respondent from participation in the Medicaid program for five (5) 
years'' based on his violation of several state regulations. GX 3, at 6 
(citations omitted). The BPMC alleged that these violations ``would 
constitute professional misconduct under the laws of New York State.'' 
Id.
    On May 19, 2011, a committee of the BPMC held a hearing, after 
which it determined that Respondent's medical license should be 
revoked. Id. at 3, 9. On July 1, 2011, the BPMC committee issued its 
decision, which provided that it was effective upon service. Id. at 10. 
Therein, the BPMC explained that:

    This is a case about Medicaid fraud for which the Respondent has 
been excluded from the Medicaid program. The five-year exclusion was 
sustained by a decision after a hearing in 2006. The panel weighed 
all the facts and circumstances in this case and recognized that 
this was primarily a case of greed and dishonesty.\4\
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    \4\ As set forth in the Administrative Review Board's (ARB) 
discussion of the original exclusion proceeding:
    The Exclusion found that the Respondent's records failed to 
reflect accurately the examinations the Respondent performed on the 
Investigators. Such conduct amounted to misconduct under [N.Y. Educ. 
Law] Sec.  6530(32) as failure to maintain accurate records. The 
Exclusion also concluded that the Respondent billed Medicaid for 
services the Respondent never provided. Such conduct amounted to 
fraud in practice under the misconduct definition at [N.Y. Educ. 
Law] Sec.  6530(2). The Exclusion also found that the Respondent 
violated Title 18 NYCRR Sec.  515.2(b)(12) by failing to furnish 
medical care according to professional recognized standards. The 
failure, on repeated occasions, to practice according to accepted 
medical standards amounted to practicing medicine with negligence on 
more than one occasion, a violation under [N.Y. Educ. Law] Sec.  
6530(3).
    GX 4, at 7-8.
    It is also noted that among the probationary terms imposed by 
the ARB was that ``Respondent shall maintain legible and complete 
medical records, which accurately reflect the evaluation and 
treatment of patients. The medical records shall contain all 
information required by State rules and regulations regarding 
controlled substances.'' Id. at 15.

Id. at 9. The BPMC further explained that while it had considered 
lesser sanctions than revocation, it concluded that revocation was 
appropriate because it ``was troubled and concerned by the Respondent's 
patent lack of respect for the truth.'' Id.
    On July 5, 2011, the Department served the Determination and Order 
on Respondent and his attorney in that proceeding, by certified mail. 
Id. at 1. The letter specifically stated that the order was ``deemed 
effective upon [its] receipt or seven (7) days after mailing by 
certified mail.'' Id. (citation omitted). The letter also explained 
that a ``[r]equest for review of the . . . determination by the 
Administrative Review Board stays penalties other than suspension or 
revocation until final determination by that Board.'' Id. at 2.
    Respondent sought review by the State's Administrative Review Board 
(ARB). On or about October 14, 2011, the ARB issued its Determination 
and Order. GX 2, at 2. Therein, the ARB vacated the revocation of 
Respondent's medical license, noting, inter alia, ``that the conduct at 
issue under the Medicaid Exclusion occurred between 2001 and 2004'' and 
that the State ``has offered no evidence that [he] has engaged in 
additional misconduct since and the Respondent has remained in practice 
during that time.'' GX 4, at 8. However, the ARB voted unanimously to 
suspend Respondent's license for five years, but ``to stay the 
suspension in full and to place [him] on probation,'' subject to 
various terms and conditions.
    On October 27, 2011, the New York Diversion Program Manager sent a 
letter to Respondent by certified mail; the letter stated that the 
Government had been advised that his medical license had been revoked 
(even though it no longer was).\5\ GX 5. After quoting the Agency's 
authority under section 824(a)(3) to revoke a registration where a 
registrant ``is no longer authorized by State law'' to dispense 
controlled substances, the letter stated that ``[i]n lieu of undergoing 
an Order to Show Cause proceeding against your DEA registration, we are 
providing you an opportunity to surrender your DEA registration by 
signing the enclosed DEA Voluntary Surrender of Controlled Substances 
Privileges form (DEA Form 104) for cause.'' Id. Respondent did not, 
however, claim the letter. GX 2, at 2.
---------------------------------------------------------------------------

    \5\ According to the DI's affidavit, shortly after the State 
revoked Respondent's medical license, she contacted Respondent's 
attorney and told him that because Respondent's ``medical license 
was revoked, he was required to surrender his DEA registration.'' GX 
2, at 2. Several days later, the DI also sent a letter to 
Respondent's attorney, which included a Voluntary Surrender form. 
Id. However, ``[n]o response was received.'' Id.
---------------------------------------------------------------------------

    As found above, on December 1, 2011, Respondent submitted an 
application to renew his DEA registration. GX 2, at 3. In completing 
the application, Respondent was required to answer several questions, 
including question three, which asked: ``Has the applicant ever 
surrendered for cause or had a state professional license or controlled 
substance registration revoked, suspended, denied, restricted, or 
placed on probation or is any such action pending?'' Id.; see also GX 
1, at 4. Respondent answered no. GX 1, at 4.
    On or about April 12, 2012, a DI issued a subpoena to the N.Y. 
Department of Health, requesting a summary of all controlled substance 
prescriptions issued by Respondent between July 12 and October 27, 
2011. GX 2, at 3. On April 16, 2012, the State provided the DI with a 
report which listed six prescriptions as having been issued by 
Respondent during the above period. Id.
    On September 14, 2012, the DI contacted the pharmacies which had 
filled the prescriptions listed on the report and obtained copies of 
the prescriptions. Id. Upon reviewing the prescriptions, the DI 
determined that only one of the six prescriptions had been issued by 
Respondent. Id. at 4. This prescription, which was dated July 28, 2011, 
was for 240 oxycodone 30mg and was issued to N.I.
    As noted above, in his letter, Respondent denied writing the 
prescription after his state license was revoked. However, he did admit 
to pre-signing the prescription, and submitted an unsworn statement 
from N.I. which corroborates Respondent's story.

Discussion

    Under the Controlled Substances Act, ``[a] registration pursuant to 
section 823 of this title to . . . dispense a controlled

[[Page 62696]]

substance . . . may be suspended or revoked by the Attorney General 
upon a finding that the registrant . . . has materially falsified any 
application filed pursuant to or required by'' the Act, or ``has 
committed such acts as would render his registration under section 823 
of this title inconsistent with the public interest as determined under 
such section.'' 21 U.S.C. 824(a)(1) & (4). With respect to the latter 
provision, the CSA provides that the following factors are to be 
considered in the case of a practitioner:

    (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 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.

Id.
    The public interest ``factors are . . . considered in the 
disjunctive.'' Robert A. Leslie, 68 FR 15227, 15230 (2003). I may rely 
on any one or a combination of factors and may give each factor the 
weight I deem appropriate in determining whether to revoke a 
registration or to deny an application for a registration. Id. 
Moreover, I am ``not required to make findings as to all of the 
factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also 
Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005).
    Where the Government has met its prima facie burden of showing that 
grounds exist to revoke a registration, whether because a registrant 
(or applicant) materially falsified an application for registration or 
committed acts which render his registration inconsistent with the 
public interest, the burden of production shifts to the registrant to 
``present sufficient mitigating evidence'' to show why he can be 
entrusted with a new registration. Medicine Shoppe-Jonesborough, 73 FR 
364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007) 
(quoting Leo R. Miller, 53 FR 21931, 21932 (1988))). ``Moreover, 
because `past performance is the best predictor of future performance,' 
ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), [DEA] has 
repeatedly held that where a registrant has committed acts inconsistent 
with the public interest, the registrant must accept responsibility for 
[his] actions and demonstrate that [he] will not engage in future 
misconduct.'' Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 
23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Cuong Tron Tran, 63 
FR 64280, 64283 (1998); Prince George Daniels, 60 FR 62884, 62887 
(1995).

The Material Falsification Allegation

    The Government contends that Respondent materially falsified his 
December 1, 2011 application to renew his registration when he answered 
``no'' to the question of whether he had ``ever surrendered (for cause) 
or had a state professional license or controlled substance 
registration revoked, suspended, denied, restricted, or placed on 
probation, or is any such action pending?'' Respondent's answer was 
clearly false, because his State medical license had not only been 
revoked for approximately three months (even if the revocation was 
ultimately vacated), his license was then suspended by the ARB (albeit 
the suspension was stayed), and he was also placed on probation. 
However, that Respondent's answer was false does not end the inquiry, 
because his answer must also have been material.
    ``The most common formulation'' of the concept of materiality is 
that ``a concealment or misrepresentation is material if it `has a 
natural tendency to influence, or was capable of influencing, the 
decision of' the decisionmaking body to which it was addressed.'' 
Kungys v. United States, 485 U.S. 759, 770 (1988) (quoting Weinstock v. 
United States, 231 F.2d 699, 701 (D.C. Cir. 1956) (other citation 
omitted)) (quoted in Samuel S. Jackson, 72 FR 23848, 23852 (2007)); see 
also United States v. Wells, 519 U.S. 482, 489 (1997) (quoting Kungys, 
485 U.S. at 770). The Supreme Court has further explained that ``[i]t 
has never been the test of materiality that the misrepresentation or 
concealment would more likely than not have produced an erroneous 
decision, or even that it would more likely than not have triggered an 
investigation.'' Kungys, 485 U.S. at 771 (emphasis added). Rather, the 
test is ``whether the misrepresentation or concealment was predictably 
capable of affecting, i.e., had a natural tendency to affect, the 
official decision.'' Id. `` `[T]he ultimate finding of materiality 
turns on an interpretation of substantive law,' '' id. at 772 (int. 
quotations and other citation omitted), and must be met ``by evidence 
that is clear, unequivocal, and convincing.'' \6\ Id.
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    \6\ While Kungys involved a denaturalization proceeding, in 
other civil proceedings, courts have required that a party establish 
that a falsification is material by ``clear, unequivocal, and 
convincing evidence'' and not simply by a ``preponderance of the 
evidence.'' Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed. Cir. 1984). 
In any event, the Government's evidence on materiality does not even 
meet the preponderance standard.
---------------------------------------------------------------------------

    As the above makes clear, the relevant decision for assessing 
whether a false statement is material is the Agency's decision as to 
whether an applicant is entitled to be registered (or in the case of a 
current registrant, remain registered). In this regard, the Government 
argues that ``Respondent is not `entitled to be registered' based upon 
the revocation and subsequent suspension/probation of his medical 
license, as well as the fact that he issued a prescription for 
controlled substances during the period where he was not legally 
authorized to do so.'' Req. for Final Agency Action, at 7-8.
    Because possessing authority to dispense controlled substances 
under the laws of the State in which a physician practices medicine is 
a requirement for holding a DEA registration, see 21 U.S.C. 802(21) & 
823(f), a false answer to the state license question is material where 
an applicant no longer holds authority to practice medicine (regardless 
of the reason for the State's action) or authority to dispense 
controlled substances, as well as where the state has placed 
restrictions on a practitioner's authority to prescribe controlled 
substances. So too, because in determining whether an application 
should be granted, Congress directed the Agency to consider the five 
public interest factors, even where an applicant currently holds 
unrestricted state authority to dispense controlled substances, the 
failure to disclose state action against his medical license may be 
material if the action was based on conduct (or on the status arising 
from such conduct, i.e., a conviction for a controlled substance 
offense or mandatory exclusion from federal health care programs) which 
is actionable under either the public interest factors or the grounds 
for denial, suspension, and revocation set forth in section 824. See 
Scott C. Bickman, 76 FR 17694, 17701 (2011).
    Here, however, the Government's contention ignores that the BPMC's 
revocation order had been vacated prior to Respondent's filing of the 
application. Moreover, while the ARB suspended Respondent's license, 
the suspension was stayed. Thus, Respondent was ``authorized'' to 
dispense controlled substances at the time he submitted the 
application. DEA therefore could not have revoked his registration and 
denied his application on the basis that Respondent lacked

[[Page 62697]]

state authority. See 21 U.S.C. 823(f); id. Sec.  824(a)(3) (authorizing 
the suspension or revocation of a registration upon a finding that 
``the registrant . . . has had his State license or registration 
suspended, revoked, or denied by competent State authority and is no 
longer authorized by State law to engage in the . . . dispensing of 
controlled substances'').
    In placing Respondent on probation, the ARB also noted the various 
findings of the order which had excluded him years earlier from the New 
York Medicaid program. However, because the exclusion order does not 
fall under the mandatory exclusion authority of 42 U.S.C. 1320a-7(a), 
but rather, the permissive exclusion authority of 42 U.S.C. 1320a-7(b), 
by itself, the exclusion does not fall within the Agency's authority to 
suspend or revoke a registration. See 21 U.S.C. 824(a)(5); see also 
Terese, Inc., d/b/a Peach Orchard Drugs, 76 FR 46843, 46848 (2011). 
Moreover, the Government offers no evidence that Respondent's Medicaid 
exclusion was based on findings that he committed acts, or had been 
convicted of criminal offenses, which provide actionable grounds to 
revoke his registration under either the public interest standard of 
sections 823(f) and 824(a)(4) or section 824(a)(2).
    To be sure, the probationary terms imposed by the ARB included that 
Respondent maintain medical records that ``contain all information 
required by State rules and regulations regarding controlled 
substances.'' GX 4, at 15. The ARB's Order did not, however, discuss 
what evidence supported the imposition of this probationary term. See 
generally GX 14. And the Government offers no argument, let alone any 
evidence, that the truthful disclosure of the State's action against 
his medical license would have led it to evidence in the exclusion 
proceeding that Respondent violated any state rules or regulations 
regarding controlled substances and thus would have supported the 
denial of his application.\7\ Indeed, in its Request for Final Agency 
Action, the Government concedes that ``the allegations underlying the 
disciplinary action did not involve controlled substances.'' Req. for 
Final Agency Action, at 8. I therefore conclude that the Government has 
failed to show that Respondent's false statement had the capacity to 
influence the Agency's decision to grant his application.
---------------------------------------------------------------------------

    \7\ On October 27, 2011, more than a month prior to Respondent's 
submission of the application, the Government wrote Respondent, 
seeking the surrender of his registration. GX 5. Therein, the 
Government noted that on July 15, 2011, it had been informed that 
the BPMC had revoked his medical license ``pursuant to [his] 
exclusion from participating in the NYS Medical [sic] Program for 
five (5) years.'' Id. However, because the materiality of a 
statement is assessed based on ``the intrinsic capabilities of the 
false statement itself, rather than the possibility of the actual 
attainment of its end as measured by collateral circumstances,'' 
United States v. Goldfine, 538 F.2d 815, 820-21 (9th Cir. 1976) 
(internal quotations and citation omitted), it does not matter that 
certain employees of the Government already knew that the answer was 
false. That being said, the Government still bears the burden of 
showing, through evidence which is clear, convincing and 
unequivocal, that the false statement is material. As for its 
further contention that Respondent's false statement was material 
because ``he issued a prescription for controlled substances during 
the period where he was not legally authorized to do so,'' as 
explained below, the Government's evidence does not conclusively 
establish that the prescription was written after his state license 
was revoked, rather than written (as he maintains) before his 
license was revoked and post-dated.
---------------------------------------------------------------------------

The Public Interest Allegations

    The Government also asserts that Respondent has committed acts 
which render his registration inconsistent with the public interest. 
More specifically, the Government argues that factors two (Respondent's 
experience in dispensing controlled substances) and four (Respondent's 
compliance with applicable laws related to controlled substances) 
support the revocation of his registration.\8\ Id. at 9.
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    \8\ The Government correctly notes that there is no evidence 
that Respondent has been convicted of an offense under federal or 
state laws related to the manufacture, distribution, or dispensing 
of controlled substances. However, there are a number of reasons why 
even a person who has engaged in misconduct may never have been 
convicted of an offense under this factor, let alone prosecuted for 
one. Dewey C. MacKay, 75 FR 49956, 49973 (2010), pet. for rev. 
denied MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011). The Agency has 
therefore held that ``the absence of such a conviction is of 
considerably less consequence in the public interest inquiry'' and 
is therefore not dispositive. Id.
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    More specifically, the Government contends that ``[i]n order to 
maintain a registration with DEA, a practitioner must be currently 
authorized to handle controlled substances in the jurisdiction in which 
he practices.'' Id. (citing 21 U.S.C. 802(21); 823(f) (internal 
quotations omitted)). The Government then maintains that 
``[n]otwithstanding having lost his state authority to practice 
medicine, Respondent did not surrender his DEA'' registration. Id.
    While the Government is correct that a practitioner must be 
currently authorized under the laws of the State in which he practices 
in order to maintain a DEA registration, it cites no support for the 
suggestion that a registrant must surrender his registration upon the 
loss of his state authority. Indeed, as the title of DEA Form 104 makes 
plain, surrendering one's registration is a ``voluntary'' act. See GX 
5, at 2 (form entitled: ``VOLUNTARY SURRENDER OF CONTROLLED SUBSTANCES 
PRIVILEGES''); see also id. (first paragraph of form: ``After being 
fully advised of my rights, and understanding that I am not required to 
surrender my controlled substance privileges, I freely execute this 
document and choose to take the actions described herein.''). Even 
where a registrant no longer possesses state authority, as long as he 
does not use that registration to acquire, distribute, or dispense a 
controlled substance, he neither commits a violation of federal law, 
nor an act inconsistent with the public interest, when he refuses to 
voluntarily surrender his registration. Rather, as the Voluntary 
Surrender form--which was given that title for a reason--makes clear, a 
registrant is entitled to insist that the Government pursue the 
revocation of his registration through a proceeding brought under 21 
U.S.C. 824(a)(3).
    On the other hand, where a registrant no longer possesses state 
authority, he cannot lawfully prescribe a controlled substance. See 21 
CFR 1306.03(a) (``A prescription for a controlled substance may be 
issued only by an individual practitioner who is . . . [a]uthorized to 
prescribe controlled substances by the jurisdiction in which he is 
licensed to practice his profession.''); see also 21 U.S.C. 802(10) 
(``The term `dispense' means to deliver a controlled substance to an 
ultimate user . . . by, or pursuant to the lawful order of, a 
practitioner, including the prescribing and administering of a 
controlled substance. . . .''). And ``[e]xcept as authorized by this 
subchapter [i.e., the Controlled Substances Act], it is ``unlawful for 
any person knowingly or intentionally . . . to distribute or dispense . 
. . a controlled substance.'' 21 U.S.C. 841(a)(1).
    As found above, Respondent disputes the Government's contention 
that he violated the CSA by issuing a controlled substance prescription 
for 240 oxycodone 30mg. on July 28, 2011, after the revocation by the 
BPMC of his New York medical license. Rather, Respondent maintains that 
he actually wrote the prescription in June 2011, prior to the BPMC's 
issuance of its order. Respondent also submitted an unsworn hearsay 
statement from the patient who received the prescription, which 
supports his assertion.
    However, even accepting Respondent's explanation that he pre-signed 
(and post-dated) the prescription, I conclude that he still violated 
the CSA. Under DEA's regulations, ``[a]ll prescriptions for controlled 
substances shall be dated as of, and signed on, the

[[Page 62698]]

day when issued.'' 21 CFR 1306.05(a). DEA has repeatedly held that the 
act of pre-signing a prescription violates the CSA. See Alvin Darby, 75 
FR 26993, 26999 (2010) (collecting cases). Thus, whether I accept the 
Government's contention that Respondent issued a prescription when he 
lacked state authority to do so, or Respondent's assertion that he 
simply pre-signed a prescription, he still distributed a controlled 
substance in violation of 21 U.S.C. 841(a)(1). However, the record 
contains no evidence that Respondent acted outside of the usual course 
of professional practice and lacked a legitimate medical purpose in 
issuing the prescription.\9\
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    \9\ The Government also argues that factor one--the 
recommendation of the state licensing board--supports its proposed 
sanction of revocation. According to the Government, ``[t]hough his 
medical license is not revoked, and the allegations underlying 
action did not involve controlled substances, such action still 
weighs in favor of revocation.'' Req. for Final Agency Action, at 8 
(citing George Mathew, 75 FR 66138, 66145 (2010)).
    While my decision in Mathew noted that the respondent there had 
been subject to two disciplinary proceedings by the state board, one 
of the proceedings (which resulted in a summary suspension) was 
based on the respondent's failure to properly treat emergency room 
patients and did not involve his prescribing of controlled 
substances. 75 FR at 66,145. However, at the time of this Agency's 
proceeding, the State had reinstated Respondent's medical license. 
Id. Accordingly, I placed no weight on that proceeding and relied 
only on the other proceeding, which sanctioned the respondent for 
prescribing controlled substances to patients he never physically 
examined. Id. Thus, the Government's reliance on Mathew is 
misplaced.
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Sanction

    The Government argues that it has ``establishe[d] by a 
preponderance of the evidence that Respondent's continued registration 
is inconsistent with the public interest'' and that Respondent has put 
on ``no evidence that could support a finding that [he] should be 
entrusted with a . . . registration.'' Req. for Final Agency Action, at 
9-10 (citing cases). The Government thus seeks the revocation of 
Respondent's registration.\10\
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    \10\ The Government also argues that Respondent's renewal 
application should be denied. Req. for Final Agency Action, at 1. 
However, it is too late for that, as the Government renewed 
Respondent's registration on April 3, 2012. GX 1.
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    Had the Government proved that Respondent materially falsified his 
application, I would grant the Government's request. The Government, 
however, has proved only that Respondent committed a single act of 
issuing a prescription in violation of DEA regulations (whether because 
he lacked state authority or pre-signed/post-dated the prescription). 
Moreover, the Government has produced no evidence that the prescription 
lacked a legitimate medical purpose. See Dewey C. MacKay, 75 FR 49956, 
49977 (2010) (holding that DEA can revoke a practitioner's registration 
based on a single act of intentional diversion), pet. for rev. denied 
MacKay v. DEA, 664 F.3d 808 (10th Cir. 2011).
    As I have previously held, in determining the appropriate sanction, 
DEA considers the egregiousness and the scope of the misconduct which 
has been proved on the record, as well as the need to deter similar 
misconduct on the part of others. See Michael S. Moore, 76 FR 45867, 
45868 (2011); Terese, Inc., 76 FR at 46848-49; Janet L. Thornton, 73 FR 
50354, 50356 (2008).
    In Thornton, the Government sought the revocation of a physician's 
registration, based on her having written two controlled substance 
prescriptions for former neighbors, when her license to practice in 
that State had been suspended. 73 FR at 50355. The physician, however, 
was practicing in another State, where she was licensed. Id. While the 
then-Deputy Administrator found that the prescriptions violated federal 
law because the physician engaged in the unlicensed practice of 
medicine and were thus issued outside of the usual course of 
professional practice (which the physician admitted in a state board 
proceeding), she declined to revoke the physician's registration, 
noting that there was no evidence that the physician had written the 
prescriptions ``for other than a legitimate medical purpose.'' Id. The 
Deputy Administrator also noted that a provision of state law created 
an exemption from the State's licensing requirements for ``occasional 
consultations or cases'' where a physician was ``lawfully practicing 
medicine in another state,'' and that while the State Board found that 
the physician violated the State's Medical Practice Act, the 
physician's case appeared to be one of first impression. Id. at 50356. 
Based on these circumstances, the Deputy Administrator concluded that 
the physician's violations did not warrant the revocation or suspension 
of her registration. Id.
    Here, while the proven misconduct is limited to a single 
prescription, I conclude that a period of outright suspension is 
warranted. In contrast to Thornton, where the state law defining what 
constituted the unauthorized practice of medicine was arguably unclear, 
the applicable DEA regulations are clear, whether Respondent issued the 
prescription after his state license was revoked, see 21 CFR 
1306.03(a), or whether he pre-signed (and post-dated) the prescription. 
Id. 1306.05(a). In either case, the evidence supports a finding that 
Respondent knowingly dispensed a controlled substance in violation of 
the Controlled Substances Act. See 21 U.S.C. 841(a)(1). Accordingly, I 
will order that Respondent's registration be suspended outright for a 
period of six months.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 824(a)(4), as 
well as 28 CFR 0.100(b), I order that the DEA Certificate of 
Registration issued to Hoi Y. Kam, M.D., be, and it hereby is, 
suspended for a period of six months. This Order is effective November 
21, 2013.

    Dated: October 9, 2013.
Thomas M. Harrigan,
Deputy Administrator.
[FR Doc. 2013-24627 Filed 10-21-13; 8:45 am]
BILLING CODE 4410-09-P