healthlaw reference

- October 2005 -

Revoking A Physician’s DEA Certificate Of Registration

By Michael A. Cassidy, Esq.

The United States Controlled Substances Act imposes regulatory requirements upon physicians’ authority to prescribe controlled substances, provides investigative and enforcement authority to the Drug Enforcement Administration (DEA), and provides procedural safeguards to physicians.  A recent federal circuit court decision, vacating a DEA certificate revocation, illustrates these procedural protections.

Under the Controlled Substances Act, 21 U.S.C.S. §822(a)(2), individuals who dispense controlled substances are required to obtain a certificate of registration from the Attorney General.  Several other statutory and regulatory requirements govern the dispensing of controlled substances.  Among them are the requirements to:

• Maintain inventories and other records (21 U.S.C.S. §827(a)(1)),

• Hold a DEA registration at any location where controlled substances are dispensed (21 C.F.R. §1301.12 (2004)), and

• Store controlled substances in a securely locked, substantially constructed cabinet (21 C.F.R. §1301.75 (2004)).

Additionally, if a physician dispenses controlled substances directly to patients, he must also:

• Maintain written records of such dispensing for a minimum of two years (21 C.F.R. §1304.03(b) (2004)),

• Take an initial inventory of all controlled substances on hand and biennial inventories thereafter (21 C.F.R. §1304.04 (2004)), and

• Maintain records of receipts, dispensings, and transfers of controlled substances (21 C.F.R. §§1304.11, 1304.21 (2004)).

Along with granting the authority to issue the certificate of registration, the Controlled Substances Act also authorizes the Drug Enforcement Administration (DEA) to suspend or revoke the certificate if the registrant’s actions are deemed to be inconsistent with the public interest.  In Morall v. Drug Enforcement Administration, D.C. Cir., No. 04 -1367, the DEA revoked a physician’s certificate of registration to dispense controlled substances.  Upon review, a federal appeals court vacated the DEA’s order, finding it arbitrary and capricious.

Morall involved a Colorado psychiatrist who allegedly failed to maintain complete and accurate records of controlled substances being dispensed to her patients.  As part of Dr. Morall’s practice focusing on weight loss, she prescribed “phen-fen”, a combination of phentermine and Pondimin.  When Dr. Morall relocated her practice to an office in her home,  she called DEA to change her registered address from her previous office location to her home address, as required by 21 C.F.R. §1301.12 (2004).  This change prompted the DEA investigation, which revealed several alleged violations, including improper storage of controlled substances and poor record-keeping, as well as suggestions of drug abuse.

Following its investigation, the DEA proposed revocation of Dr. Morall’s certificate of registration. After a hearing at Dr. Morall’s request, an Administrative Law Judge (ALJ) recommended against revocation.  The DEA’s delay, however, in its confirmation of the ALJ’s decision, formore than one year, effectively acted as a suspension of Dr. Morall’s certificate.  When challenged, the DEA ultimately issued a final order revoking Dr. Morall’s certificate, declining to adopt the ALJ’s decision. 

In its review of the DEA’s factfinding, the Court of Appeals for the District of Columbia Circuit emphasized the importance that the record as a whole provide ‘substantial evidence’ to support the DEA’s decision to revoke.  The court concluded that this standard was not met, finding that the agency actually ignored relevant evidence.  The court also criticized the DEA’s failure to take into account the ALJ’s findings regarding Dr. Morall’s credibility.  Finally, the court took exception to the agency’s suggestion of Dr. Morall’s drug abuse, despite the absence of evidence to support such a theory, calling the suggestion “irresponsible and appalling”, and “dangerously arbitrary and entirely unsupported.”

As to the severity of the penalty, the revocation of Dr. Morall’s certificate, the court found it to be “unwarranted by law”, noting that comparable or even more egregious infractions by other physicians did not result in revocation.  The agency’s decision constituted such “arbitrary decision-making that it cannot withstand the most deferential of judicial review.”  Accordingly, the court vacated the revocation of Dr. Morall’s registration, holding that the “agency’s findings…do not survive substantial evidence review and the decision is arbitrary and capricious.”

Adhering to the requirements of the Controlled Substances Act will ensure proper record-keeping, storing, and dispensing of controlled substances.  Furthermore, retaining adequate documentation of such compliance will prove to be helpful in the event of a DEA investigation.  

Michael A. Cassidy is Chair of the firm’s Health Care Practice Group. Mike was named a 2005 Pennsylvania Super Lawyer in the Health Care Law category. For more information on this topic, please contact Mike at 412.594.5515 or via e-mail at mcassidy@tuckerlaw.com.

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Use Of Criminal Background Checks

By Scott R. Leah, Esq.

In order to protect their business, employees and customers, many employers conduct criminal background checks on job applicants.  However, employers are often unaware that Pennsylvania law limits the use of criminal history information in making hiring decisions.

Under Pennsylvania law there are two major limitations on when an employer can use criminal history record information to decide whether or not to hire an applicant.  First, only records of felony and misdemeanor convictions can be considered.  This means that anything other than a conviction cannot be considered (such as being charged but not convicted of an offense).  Also, because only felony and misdemeanor convictions can be considered, convictions for summary offenses cannot be considered at all in making employment decisions.

Second, an employer can only consider  an applicant’s criminal history to the extent that the particular convictions relate to the applicant’s suitability for employment in the position for which he or she has applied.  In other words, must be some relationship between the crime committed and the job applied for.  For example, a criminal history of theft might be related to the job of a bookkeeper or cashier entrusted with company funds.  However,  a criminal history of molesting children would not be related to those jobs, but might be related to the job of working in a day care facility or as a teacher. 

Of course, some employers are required by law to do criminal background checks on employees.  Those laws typically delineate the specific criminal convictions that would make one ineligible for such employment.  Those particular convictions would obviously be deemed to meet the “relate to” requirement of this law.

Finally, an employer that makes a decision not to hire an applicant based in whole or in part on the applicant’s criminal history record information must notify the applicant in writing.

Scott R. Leah is an attorney in the firm’s Health Care Practice Group. For more information, please contact Scott at 412.594.5551 or via e-mail at sleah@tuckerlaw.com.

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Third Circuit Reaffirms HCQIA Immunity

For Professional Review Actions

By Michael A. Cassidy, Esq.

In Gordon v. Lewiston Hospital, (September 12, 2005), the United States Court of Appeals for the Third Circuit reaffirmed that the Healthcare Quality Improvement Act of 1986 (HCQIA) grants immunity to the participants in adverse professional review actions when those actions meet the HCQIA standards.

Dr. Gordon’s clinical privileges and Medical Staff Membership at Lewiston Hospital were suspended by the Hospital because disruptive conduct.  The Court found a long history of incidents primarily relating to Dr. Gordon’s disparagement of a competing physician and the solicitation of his patients.  Dr. Gordon attempted to circumvent the immunity provisions by asserting that his conduct was not professional conduct, so that any actions based on his conduct could not be professional review actions.

Congress enacted HCQIA to improve the quality of medical care by restricting the ability of physicians with histories of medical malpractice payments or adverse peer review decisions from moving state to state, because of the reporting requirements of HCQIA.  To insure the reporting of adverse professional review actions and medical malpractice payments, Congress provided immunity to the persons participating in the professional review activities.

Professional review actions are defined as actions or recommendations of a professional review body which are taken or made in the conduct of a professional review activity and are based on the competence or professional conduct of an individual physician, which conduct either adversely affects or could adversely affect the health and welfare of a patient.

In order to qualify for immunity under HCQIA, a professional review action must be taken:

1. In a reasonable belief that the action was in the furtherance of quality healthcare;

2. After a reasonable effort to obtain the facts of the matter;

3. After adequate notice and hearing procedures are afforded to the physician involved or after such other procedures as are fair to the physician under the circumstances; and

4. The reasonable belief that the action was warranted by the facts known after such reasonable effort to obtain facts and after satisfying the due process requirements of paragraph 3 above.

Furthermore, the professional review action will be presumed to have met the immunity standards unless the presumption is rebutted by preponderance of the evidence.  A professional review action will be presumed to satisfy those standards and the participants will have presumptive immunity if the action was made “in the reasonable belief that the action was in furtherance of quality healthcare.”  42 U.S.C. § 11112(a).  The Court stated that “this test will be satisfied if the reviewers, with the information available to them at the time of the professional review action, would reasonably have concluded that their action would restrict incompetent behavior or would protect patients,” quoting the Congressional Record.

Dr. Gordon’s position was that his professional conduct did not adversely affect the health or welfare of the patients,  and that, therefore, there could be not professional review action, and that, therefore, the immunity protection would not apply.  Dr. Gordon argued that his professional competence was never in dispute and that he was expelled from the hospital for violating the supervisory and probationary conditions imposed.  The Pennsylvania Medical Society filed an amicus brief suggesting that the nexus between the physician conduct and the adverse affect on patient welfare be judged by a standard of “concrete harm” or a realistic projection of it, but the Court rejected the PMS interpretation of the statute.  The Court stated:

“Such unprofessional conduct on the part of a physician is within the purview of a professional review action under the HCQIA.  The plain language of the statute indicates the breath of conduct encompassed within the definition of professional review action by the inclusion of a conduct that could adversely affect the health or welfare of a patient. …”  The statute contemplates not only potential harm through use of the term could, but it also affords protection to actions taken against physician conduct that either impacts or potentially impacts patient welfare adversely, meeting patient “well being in any respect; prosperity.”

The Court also cited the legislative history to support this construction, quoting from the Congressional Record, it stated:

“Competence and professional conduct should be interpreted in a way that is sufficiently broad to protect legitimate actions based on matters that raise concerns for patients or patient care.”

The Court concluded its analysis of HCQIA immunity by stating, “Gordon simply cannot escape the ramifications of his conduct by relying on a tortured construction of the statute that ignores the fact that, at all levels of the process, his conduct was found to adversely impact patient health or welfare … nor will this   Court substitute its judgment for that of healthcare professionals in the governing body of the hospital as to whether Gordon’s conduct either did or could have an adverse impact on patient health or welfare.”

The Court deference to the professional judgments of the hospital in its staff members involved in the peer review process is typical.  This deference is granted unless the physicians challenging the peer review actions can show by a preponderance of the evidence that the action was motivated by some other purpose.  The Gordon Court concluded the record established that the 1997 revocation of Dr. Gordon’s privileges resulted from concerns about patient welfare.     

For more information on this topic, please contact Mike at 412.594.5515 or via e-mail at mcassidy@tuckerlaw.com.

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Patient Safety And Quality Improvement Act Of 2005

By Michael A. Cassidy, Esq.

President Bush signed the Patient Safety and Quality Improvement Act of 2005 on July 29, 2005, describing the legislation as “a critical step towards our goals insuring top quality, patient-driven healthcare for all Americans.”

The Patient Safety Act is intended to create a system for voluntary reporting of medical errors by healthcare providers to a National Patient Safety Database, which information then can be used to advance quality assurance initiatives.

The Patient Safety Act is intended to create a system that will establish a repository for the receipt of the medical reports, provide security to maintain the confidentiality of that information, encourage the use of that information to improve healthcare quality, and protect the reporters of the information.

MECHANISM

The mechanisms for the receipt of this information are Patient Safety Organizations and a National Patient Safety Database.  A Patient Safety Organization is defined as a public or private organization, or component thereof, that is certified, through a process to be developed by the Department of Health and Human Services, to perform each of the following activities:

1. Conduct, as the organization or component’s primary activity, efforts to improve patient safety and the quality of healthcare delivery;

2.  Collect and analyze patient safety work product that is submitted by providers;

3.  Develop and disseminate evidence-based information to providers with respect to improving patient safety, such as recommendations, protocols, or information regarding best practices;

4.  Utilize patient safety work product to carry out activities limited to those described under this paragraph and for the purposes of encouraging a culture of safety and of providing direct feedback and assistance to providers to effectively minimize patient risk;

5.  Maintain confidentiality with respect to identifiable information;

6.  Provide appropriate security measures with respect to patient safety work product; and

7.  Submit non-identifiable information to   the Agency consistent with standards established by the Secretary under Section 923(b) for any National Patient Safety Database.

The National Patient Safety Database is intended to work similarly to the National Practitioners Data Bank.  HHS is directed to provide for the establishment and maintenance of a database to receive relevant non-identifiable patient safety work product. This information shall be used to analyze national and regional statistics, including trends and patterns of healthcare errors.

CONFIDENTIALITY

The information provided by the Patient Safety Organizations and collected in the National Patient Database is referred to as “Patient Safety Work Product.”  This Patient Safety Work Product shall not be subject to civil or administrative subpoena, subject to discovery in connection with a civil or administrative proceeding, subject to disclosure under the Freedom of Information Act or any other similar federal or state law, required to be admitted as evidence or otherwise disclosed in any state or federal civil or administrative proceeding.  The reports on  information may not be used by any national accreditation organizations or licensing survey teams with respect to the licensing or accreditation of the provider who submitted the report.

PROTECTION FOR REPORTING PROVIDERS

In addition to protecting the provider’s licensing, the Act also provides that a provider may not use against any individual in an adverse employment action the fact that the individual reported this information in good faith either to the provider or to a patient safety organization.  Adverse employment action is defined to include a failure to promote an individual or provide any other employment related benefit, an adverse evaluation or decision made in relation to accreditation, certification, credentialing or licensing of the individual, and any personnel action that is adverse to the individual concerned.

The Patient Safety Organizations are also defined by statute as business associates for purposes of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

For more information on this topic, please contact Mike at 412.594.5515 or via e-mail at mcassidy@tuckerlaw.com.

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