[Federal Register Volume 83, Number 109 (Wednesday, June 6, 2018)]
[Notices]
[Pages 26308-26310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12138]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Richard Hauser, M.D.; Decision and Order
On September 26, 2017, the Acting Assistant Administrator,
Diversion Control Division, Drug Enforcement Administration (DEA),
issued an Order to Show Cause to Richard Hauser, M.D. (Registrant), of
Clear Lake, Iowa. The Show Cause Order proposed the revocation of
Registrant's DEA Certificate of Registration No. BH2140692 ``pursuant
to 21 U.S.C. 824(a)(5).'' Government Exhibit (GX) 2 to Government's
Request for Final Agency Action (RFAA), at 1. For the same reason, the
Order also proposed the denial of ``any pending application to modify
or renew such registration.'' Id.
With respect to the Agency's jurisdiction, the Show Cause Order
alleged that Registrant is the holder of Certificate of Registration
No. BH2140692, pursuant to which he is authorized to dispense
controlled substances as a practitioner in schedules II through V, at
the registered address of Hauser Clinic Consultation Services, 308 14th
Street, Clear Lake, Iowa. Id.
Regarding the substantive ground for the proceeding, the Show Cause
Order alleged that on April 28, 2017, the Office of the Inspector
General for the U.S. Department of Health and Human Services (HHS)
notified Registrant of his ``mandatory exclusion from participation in
all Federal health care programs for a minimum period of five years
pursuant to 42 U.S.C. 1320a-7(a)'' as a result of his guilty plea in
the United States District Court for the Southern District of Iowa to
two counts of Health Care Fraud in violation of 18 U.S.C. 1347. Id. at
2. As a result, the Order asserted that Registrant's ``[m]andatory
exclusion from Medicare is an independent ground for revoking a DEA
registration pursuant to 21 U.S.C. 824(a)(5).'' Id. The Order further
contended that, although Registrant's underlying conviction is
``unrelated to [Registrant's] handling of controlled substances, DEA
has nevertheless found that the underlying conviction forming the basis
for a registrant's exclusion from participating in federal health care
programs need not involve controlled substances for revocation under 21
U.S.C. 824(a)(5).'' Id. (citations omitted).
The Show Cause Order notified Registrant of (1) his right to
request a hearing on the allegations or to submit a written statement
in lieu of a hearing, (2) the procedure for electing either option, and
(3) the consequence for failing to elect either option. Id. at 2-3
(citing 21 CFR 1301.43). The Show Cause Order also notified Applicant
of his right to submit a corrective action plan. Id. at 3-4 (citing 21
U.S.C. 824(c)(2)(C)).
The Government states that on October 4, 2017, a DEA Diversion
Investigator (DI) served Registrant with a copy of the Show Cause
Order. RFAA, at 3 (citing Declaration of DI attached as GX 4).
Specifically, a DI assigned to the St. Louis Field Division's Des
Moines Resident Office stated in a declaration that he was advised by
Registrant's Attorney that Registrant could be served at his residence
at 2310 20th Street, SW,
[[Page 26309]]
Mason City, Iowa. GX 4, at 1-2. The DI then stated that he traveled to
that location, verified Registrant's identity, and ``handed him a copy
of the September 26, 2017 Order to Show Cause on October 4, 2017.'' Id.
at 2.
On February 9, 2018, the Government forwarded its Request for Final
Agency Action and evidentiary record to my Office. In its Request, the
Government represents that Registrant ``has not requested a hearing or
made any other filings in this matter.'' RFAA, at 3. Based on the
Government's representation and the record, I find that more than 30
days have passed since the Order to Show Cause was served on
Registrant, and he has neither requested a hearing nor submitted a
written statement in lieu of a hearing. See 21 CFR 1301.43(d).
Accordingly, I find that Registrant has waived his right to a hearing
or to submit a written statement and issue this Decision and Order
based on relevant evidence submitted by the Government. See id. I make
the following findings.
Findings of Fact
Registrant is a physician who is registered with the DEA as a
practitioner in schedules II-V pursuant to Certificate of Registration
BH2140692, at the registered address of Hauser Clinic Consultation
Services, 308 14th Street, Clear Lake, Iowa.\1\ Respondent's DEA
Certificate of Registration (attached to RFAA as GX 1). Although not
alleged in the Show Cause Order, I also find that Registrant is the
holder of DATA-Waiver Identification Number XH2140692, see id., which
authorizes Registrant to dispense or prescribe schedule III-V narcotic
controlled substances which ``have been approved by the Food and Drug
Administration . . . specifically for use in maintenance or
detoxification treatment'' for up to 100 patients. 21 CFR 1301.28(a) &
(b)(1)(iii). Registrant's DEA registration and DATA-Waiver authority do
not expire until October 31, 2019. Id.
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\1\ In his January 24, 2018 Declaration, the DI stated that
Registrant ``indicated that he would surrender his DEA Certificate
of Registration, but has thus far failed to do so.'' GX 4, at 2.
Likewise, the Government stated in its RFAA (dated Feb. 8, 2018)
that Registrant had not surrendered his DEA registration. RFAA, at
2. Thus, I find that the record reflects that Registrant has not
surrendered his DEA registration, despite any prior statement by him
of his intention to do so.
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On October 19, 2016, Registrant entered a guilty plea in the United
States District Court for the Southern District of Iowa to a criminal
information charging him with two counts of Health Care Fraud in
violation of 18 U.S.C. 1347.\2\ As part of his plea, Registrant entered
into a plea agreement in which he admitted to knowingly executing a
scheme with the intent to defraud the State of Iowa Medicaid program
(hereinafter ``Iowa Medicaid'') and Wellmark Blue Cross and Blue Shield
(hereinafter ``Wellmark'') into paying him for the delivery of
healthcare services that he did not actually perform between November
2011 and December 2012. See GX 3, at 2-6. Specifically, in his role as
a board-certified psychiatrist, Registrant ``up-coded'' his billing to
a more expensive (and unperformed) service than the service he actually
performed for the purpose of receiving a higher reimbursement from Iowa
Medicaid and Wellmark. See id. at 4-6. In his plea agreement,
Registrant admitted that Wellmark ``over-reimbursed'' him ``as a result
of his [fraudulent] conduct'' by a net amount of $25,965.72. Id. at 6.
Due to similarly fraudulent conduct, Registrant also admitted that Iowa
Medicaid ``over-reimbursed'' him by $4,913.60. Id. In exchange for his
guilty plea, the Government agreed to recommend that Registrant receive
credit for acceptance of responsibility pursuant to United States
Sentencing Guideline Sec. 3E1.1. Id. at 8.
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\2\ See Oct. 19, 2016 Plea Agreement, attached as GX 3 to RFAA,
at 1. In its RFAA, the Government states that Registrant ``entered a
guilty plea'' on October 19, 2016, citing ``Exhibit 3 (October 19,
2016 Guilty Plea).'' However, Exhibit 3 to the RFAA is only the plea
agreement, establishing Registrant's agreement to enter into a
guilty plea but not when he entered the plea nor when the court
accepted it. I have reviewed the publicly available docket for this
case, and it states that the plea agreement was accepted on October
19, 2016. Thus, I take official notice that Registrant in fact
entered his guilty plea (and that the court accepted the plea) on
October 19, 2016.
Under the Administrative Procedure Act (APA), an agency ``may
take official notice of facts at any stage in a proceeding--even in
the final decision.'' U.S. Dept. of Justice, Attorney General's
Manual on the Administrative Procedure Act 80 (1947) (Wm. W. Gaunt &
Sons, Inc., Reprint 1979). In accordance with the APA and DEA's
regulations, Registrant is ``entitled on timely request to an
opportunity to show to the contrary.'' 5 U.S.C. 556(e); see also 21
CFR 1316.59(e). To allow Registrant the opportunity to refute the
facts of which I take official notice, Registrant may file a motion
for reconsideration within 15 calendar days of service of this order
which shall commence on the date this order is mailed.
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On February 28, 2017, a federal court entered judgment and
sentenced Registrant to a term of imprisonment of two months on each
count, but provided that the sentences would ``be served
concurrently.'' United States v. Hauser, No. 16-CR-00157, ``Judgment in
Criminal Case'' (S.D. Iowa filed Feb. 28, 2017), at 2.\3\ The
sentencing judge also ordered Registrant to make restitution payments
in the amounts of $25,965.72 and $4,913.60 to Wellmark and to Iowa
Medicaid, respectively, in addition to a $200 assessment. Id. at 5-7.
The judge further imposed on Registrant a term of supervised release
for three years after the conclusion of his sentence. Id. at 3.
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\3\ The Government did not include a copy of the final judgment
in Registrant's criminal case. Consequently, I take official notice
of the facts set forth in this publicly available final judgment
under the authority already set forth supra in footnote 2.
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The record also includes an April 28, 2017 letter from HHS
notifying Applicant that he was ``being excluded from participation in
any capacity in the Medicare, Medicaid, and all Federal health care
programs as defined in section 1128B(f)'' of the SSA ``for the minimum
statutory period of five years.'' Attachment to GX 4 (hereinafter HHS
Letter or HHS Ltr), at 1 (emphasis in original). The letter explained
that Registrant was being excluded ``due to [his] conviction . . . in
the United States District Court for the Southern District of Iowa, of
a criminal offense related to the delivery of an item or service under
the Medicare or a State health care program.'' Id. The letter states
that ``[t]his action is being taken under section 1128(a)(1) of the
[SSA] \4\ and is effective'' on May 18, 2017. Id. (citing 42 U.S.C.
1320a-7(a)).\5\
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\4\ Section 1128(a)(1) of the SSA is codified at 42 U.S.C.
1320a-7(a)(1).
\5\ In his Declaration, the DI stated that when he took over the
investigation, he noticed that ``the case file contained an April
28, 2017 letter from'' HHS to Registrant. GX 4, at 1. To
authenticate the HHS Letter, the DI ``verified with the prior case
agent that this was a true and correct copy of the exclusion letter
that he received'' and then attached it to his Declaration. Id. The
Declaration in the record reflects no other statements establishing
the authenticity or accuracy of the HHS Letter. Nor does the record
contain a declaration from the DI who actually received the HHS
Letter. However, I have reviewed the official website of HHS, which
contains a publicly available verification of mandatory exclusions
that reflects the same (1) Registrant name, (2) address, (3)
exclusion type (``1128(a)(1)--Program-Related Conviction''), and (4)
exclusion date (May 18, 2017) as in the HHS Letter attached to the
Declaration. I take official notice of the foregoing facts set forth
on the HHS official website regarding Registrant's mandatory
exclusion (pursuant to the authority set forth supra in footnote 2),
and I find that it sufficiently corroborates the HHS Letter attached
to the DI's Declaration for me to accept the HHS Letter into the
record as a true and correct copy of the HHS Letter sent to
Registrant and as an accurate reflection of the mandatory exclusion
that HHS imposed on Registrant.
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Discussion
Pursuant to 21 U.S.C. 824(a)(5), the Attorney General is authorized
to suspend or revoke a registration issued under section 823 of Title
21, ``upon a finding that the registrant . . . has been excluded . . .
from participation in a program pursuant to section 1320a-7(a) of Title
42.'' Under Sec. 1320a-7(a)(1), HHS is required to exclude from
participation
[[Page 26310]]
in any federal health care program any individual who has been
convicted of a criminal offense ``related to the delivery of an item or
service under [42 U.S.C. 1395 et seq.] or under any State health care
program.'' The Agency has long held that the underlying conviction
forming the basis for a registrant's mandatory exclusion from
participation in federal health care programs need not involve
controlled substances for the Agency to revoke a DEA registration
pursuant to Sec. 824(a)(5). E.g., Orlando Ortega-Ortiz, M.D., 70 FR
15122, 15123 (2005); Juan Pillot-Costas, M.D., 69 FR 62084, 62085
(2004); Daniel Ortiz-Vargas, M.D., 69 FR 62095, 62095-62096 (2004); KK
Pharmacy, 64 FR 49507, 49510 (1999); Stanley Dubin, D.D.S., 61 FR
60727, 60728 (1996); Nelson Ramirez-Gonzalez, M.D., 58 FR 52787, 52788
(1993).
Here, Registrant was convicted of two counts of felony Health Care
Fraud related to billing for services that were not rendered. The
Agency has previously held that a mandatory exclusion based on a felony
fraud conviction for overbilling warranted revocation of a Registrant's
registration pursuant to 21 U.S.C. 824(a)(5). E.g., Johnnie Melvin
Turner, M.D., 67 FR 71203, 71203-71204 (2002) (revocation where
mandatory exclusion was based on guilty plea to one felony count of
mail fraud ``by billing for services that were not rendered''); Dubin,
61 FR at 60728 (revocation where mandatory exclusion ``based upon
fraudulent billing''); Ramirez-Gonzalez, 58 FR at 52788 (revocation
where mandatory exclusion based on submission of false claims).
Moreover, Registrant has failed to come forward with any evidence
explaining or mitigating his overbilling conduct or otherwise
explaining why his registration should not be revoked, and the record
reflects no such evidence. See Joseph M. Piacentile, M.D., 62 FR 35527,
35528 (1997) (revoking DEA registration where Registrant ``did not
offer any evidence into the record regarding why his registration
should not be revoked'' pursuant to Sec. 824(a)(5)).
Based on the 2017 HHS letter, I find that the evidence shows that
HHS excluded Registrant from participation in any federal health care
program based on his federal convictions for health care fraud related
to overbilling. Registrant has thus been excluded pursuant to the
mandatory exclusion provisions of 42 U.S.C. 1320a-7(a), and I hold that
this unchallenged basis for his mandatory exclusion is sufficient to
warrant revocation of his DEA registration pursuant to 21 U.S.C.
824(a)(5).
Accordingly, I will order that his registration be revoked and deny
any pending applications to renew or to modify his registration, as
requested in the Show Cause Order. Order to Show Cause, at 1. Finally,
because Registrant's DATA-Waiver authority is contingent on Registrant
being a practitioner with a valid DEA registration, see 21 U.S.C.
823(g)(2)(A); 21 CFR 1301.28(a), I will revoke his DATA-Waiver
authority as well.
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) and
824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of
Registration No. BH2140692 and DATA-Waiver Identification Number
XH2140692, issued to Richard Hauser, M.D., be, and they hereby are,
revoked. I further order that any pending application of Richard Hauser
to renew or to modify the above registration, be, and it hereby is,
denied. This Order is effective July 6, 2018.
Dated: May 25, 2018.
Robert W. Patterson,
Acting Administrator.
[FR Doc. 2018-12138 Filed 6-5-18; 8:45 am]
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