On September 30, 2020, DEA published a Final Rule (FR) adopting the Interim Final Rule (IFR) implementing the Ryan Haight Act. The FR made a few technical changes to the regulations and did not substantively change the IFR. What garnered my attention was DEA’s response to comments submitted after publication of the IFR.
DEA Proposes Significant Changes to Administrative Hearings
The Drug Enforcement Administration (DEA), through a Notice of Proposed Rulemaking (NPRM), is seeking to make significant changes to its administrative hearing procedures. The proposed changes include the following, among others:
DEA Decisions: Registrations Not Automatically Revoked by Medicare/Medicaid Exclusions
Jeffrey Stein, M.D.; Decision and Order
Uttam Dhillon, DEA Acting Administrator, issued a final order today in the case of the revocation of a New York doctor’s DEA registration. But its implications go well beyond this doctor’s circumstances.
The Facts
Here are the basics. Dr. Jeffrey Stein was convicted of tax-related crimes in the Southern District of New York in 2015. Specifically, Dr. Stein had provided false receipts and other fabricated documents to his accountant to reduce the amount of taxes he would have to pay and, in turn, to mislead the IRS Auditor into believing that the claimed expenses were legitimate. Dr. Stein pled guilty to these charges. Of particular relevance to today’s order, Dr. Stein had used, among the fabricated materials, “the names of four disabled military veterans (including two former patients whose identities he obtained as a result of his work for the V.A, [and] . . . created bogus invoices in the names of those veterans.”
Does the New Rule on Interlocutory Appeals Undermine the Independence of DEA’s ALJs?
As I have previously written, there is a long list of regulatory changes coming from DEA in the next few years. Rather than publish one or more of the long overdue regulations listed on
DEA’s Regulatory Agenda, on April 30, 2019, the agency will publish a Final Rule creating a “discretionary review” process allowing the Administrator to review an Administrative Law Judge’s (“ALJ’s”) denial of a request for an interlocutory appeal. Note that this is a Final Rule, not a Notice of Proposed Rulemaking. The agency was able to bypass the traditional notice and comment rulemaking process by categorizing this rule as a Rule of Agency, pursuant to the Administrative Procedure Act. As such, the rule is effective immediately.
Requests for interlocutory appeals can take many forms in a DEA administrative proceeding. Often, they are a result of a procedural or evidentiary ruling by an ALJ during the prehearing process. DEA regulations currently give ALJs broad authority to rule on a request to seek an interlocutory appeal. The ALJ’s decision to deny a request for an interlocutory appeal is not reviewable. Until now.
Are DEA Administrative Hearings Fundamentally Unfair to Registrants?
While a great deal of attention is given to DEA Chief Administrative Law Judge Mulrooney’s (“CALJ Mulrooney’s”) opinion regarding the impact of the Ensuring Patient Access and Effective Drug Enforcement Act on DEA enforcement efforts, very little attention has been afforded a shocking and unprecedented attack by a sitting DEA Administrative Law Judge on DEA’s formal administrative hearing process found within the same article.
Hidden in plain sight at the end of CALJ Mulrooney’s and Ms. Katherine Legel’s soon-to-be-published law review article is a thirty page attack on the procedures that govern DEA administrative hearings, substantive decisions in final agency decisions, and the individuals assigned to draft final agency decisions on behalf of the agency.
DEA Prevails Over Masters Pharmaceutical, Inc.
On June 30, 2017, the Court of Appeals for the D.C. Circuit issued an order in Masters Pharmaceutical, Inc. v. Drug Enforcement Administration (No. 15-1335). In sum, the Court denied Masters Pharmaceutical, Inc.’s (“Masters”) Petition for Review seeking to overturn the Drug Enforcement Administration’s (“DEA”) revocation of Masters’ DEA registration. This decision has wide-ranging implications for DEA-registered wholesalers, who are required to detect and report suspicious orders of controlled substances.
DEA Decisions: In the Matter of Wesley Pope, M.D.
An Oklahoma doctor wrote 19 Schedule II controlled substance prescriptions for a patient with low back pain over eight months without thoroughly documenting the patient’s history, confronting the patient over aberrant drug tests, or talking to other doctors who were prescribing the patient controlled substances. The Chief Administrative Law Judge felt the doctor should be granted a new registration, but placed on probation for one year. Acting Administrator Chuck Rosenberg disagreed. He reviewed the case and concluded that DEA proved that the doctor knew the patient was abusing or diverting the drugs and prescribed anyway. Dr. Wesley Pope’s application for a new DEA registration was denied as inconsistent with the public interest.
DEA Decisions: Evidence of “Red Flags” of Drug Diversion
On November 10, 2016, the DEA issued its final decision and order in the case against Jones Total Health Care Pharmacy, L.L.C. (“Jones Pharmacy”) and SND Health Care L.L.C. (“SND”). The
Administrator ordered that the DEA deny Jones Pharmacy’s registration renewal application and also deny SND’s pending registration application. These orders were consistent with the
The Continued Evolution of DEA’s Due Diligence Requirements
On May 11, 2016, the Drug Enforcement Administration filed its brief in Masters Pharmaceutical, Inc. v. Drug Enforcement Administration (Docket No: 15-1335), in the United States Court of Appeals for the District of Columbia. The vast majority of the Government’s brief addresses whether “substantial evidence” (the applicable standard of review) supports Acting Administrator Rosenberg’s decision to revoke Masters’ DEA registration. Curiously, the Government does not dedicate much effort to one of the seminal issues in the case: whether DEA imposed new obligations on registrants in violation of the Administrative Procedure Act.
Rather than attempt to defend the indefensible, the Government invoked a creative reading of the Masters Final Order that is starkly at odds with Administrator Rosenberg’s decision. In its brief, DEA states that Administrator Rosenberg’s decision “did not impose any new duties on distributors.” In defending this position, the Government’s brief goes on to say the following:
Most of the “new duties” that Masters and amici cite in their briefs were obligations that Masters had voluntarily imposed on itself through its own compliance program. [citation omitted] The Administrator cited Masters’ failure to perform many of these duties – such as obtaining utilization reports or asking customers for explanations of unusually large orders – because Masters sought to rely on its compliance program to justify its reporting failures. However, in highlighting Masters’ disregard for its own program’s requirements, the Administrator did not impose those same requirements on all registered distributors.
DEA Decisions: Clarifying a Respondent’s Right to the Presentation of Remedial Evidence and Discovery
On February 18, 2015, the DEA issued its final decision and order in the case against prescriber Hatem M. Ataya (“Ataya”). The Administrator ordered Ataya’s registration to be revoked and his pending applications for additional registrations to be denied on the grounds that Ataya has, since the proceedings began, lost the authority to dispense controlled substances under state law. Still, the Administrator’s decision also details the bases on which he agreed with the Administrative Law Judge’s (ALJ’s) findings that Ataya issued controlled substance prescriptions without a legitimate medical purpose (in violation of 21 CFR § 1306.04(a)) and violated federal and state law when he authorized more than five refills of schedule IV controlled substances, failed to include patients’ addresses on numerous prescriptions, and post-dated a prescription.