Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054 Page: 46,848
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Federal Register/Vol. 76, No. 149/Wednesday, August 3, 2011 /Notices
significantly abused their authority to
dispense controlled substances.
Clearly, the overly limited bases in current
law for denial or revocation of a
practitioner's registration do not operate in
the public interest.
Id. Accordingly, Congress amended
section 824(a) "to add to the current
bases for * * * revocation[] or
suspension of registration a finding that
registration would be inconsistent with
the public interest on the grounds
specified in 21 U.S.C. 823." Id. at 3449
(emphasis added).
The House Report thus makes clear
that Congress's primary purpose in
authorizing revocation based on the
public interest was to provide an
additional means for the Attorney
General to address diversion by
practitioners. This is also made clear by
Congress's command that the public
interest be "determined under" the
factors set forth in 21 U.S.C. 823, most
of which-in the case of a practitioner-
require a nexus to controlled
substances. See 21 U.S.C. 823(f)
(directing the Attorney General to
consider, inter alia, a registrant's
"experience in dispensing * * *
controlled substances," its "conviction
record under * * * laws relating to the
* * * dispensing of controlled
substances," and its "[c]ompliance with
applicable * * * laws relating to
controlled substances").11
It was not until three years later
when, as part of the Medicare and
Medicaid Patient and Program
Protection of 1987, Congress amended
subsection 824(a) to grant the Attorney
General authority to revoke a
registration of any individual or entity
subject to mandatory exclusion from
Medicare and Medicaid (as well as other
Federally funded health care programs).
See Public Law 100-93, 8(j), 101 Stat.
680, 695 (1987). See also S. Rep. No.
100-109, at 2, 1987 U.S.C.C.A.N. at
682-83 ("The Committee bill has four
main elements. * * * First, the bill
mandates the exclusion from Medicare
and Medicaid of individuals convicted
of program-related crimes or patient
abuse or neglect. It also broadens the
grounds for the discretionary exclusion
of health care providers from Medicare
11 With respect to factor five-"other conduct
which may threaten public health and safety"-
DEA's case law has generally recognized that the
misconduct must be related to controlled
substances. David E. Trawick, 53 FR 5326, 5327
(1988). While there may be other acts, which do not
directly involve controlled substances, but which
threaten public health and safety and create reason
to conclude that a person will not faithfully adhere
to her responsibilities under the CSA, in light of
Congress's clear statutory text and the history of theCSA, this case presents no occasion to consider the
scope of actionable conduct under this factor.and Medicaid. * * * The Attorney
General is authorized to deny, revoke, or
suspend the controlled substances
registration of any individual or entity
subject to mandatory exclusion from
Medicare.) 12 (emphasis added).
Were the Government's interpretation
correct that the Attorney General's
authority under the public interest
standard encompasses the allegations
against Respondent, then Congress had
no need to enact subparagraph (a)(5).
Statutes, however, are not to be
construed in a manner that renders their
texts superfluous. See Bloate, 130 S.Ct.
at 1355 (quoting Duncan v. Walker, 533
U.S. 167, 174 (2001) ("[A] statute ought,
upon the whole, to be so construed that,
if it can be prevented, no clause,
sentence, or word shall be superfluous,
void, or insignificant.")). I therefore
hold that the allegations that
Respondent is the alter ego of Duncan
Drugs, which has been convicted of
health care fraud, as well as that
Respondent materially falsified its state
Medicaid application and did not
disclose ownership information to the
State, do not constitute "such other
conduct which may threaten public
health and safety." 21 U.S.C. 823(f).
Accordingly, the allegations that
Respondent is the alter ego of Duncan
Drugs, which was convicted of health
care fraud; that Respondent materially
falsified its application to enroll in the
Georgia Medicaid program; and that it
failed to provide information requested
by the DCH do not implicate any of the
five public interest factors set forth in 21
U.S.C. 823(f), and thus do not provide
a basis to conclude that Respondent has
committed acts which render its
registration "inconsistent with the
public interest." 21 U.S.C. 824(a)(4).
Whether these allegations are grounds
for the revocation of Respondent's DEA
registration must be assessed under the
legal standard which Congress
specifically adopted in subparagraph
(a)(5).13
12 It acknowledged that in discussing Section 8 of
the Medicare and Medicaid Patient and Program
Protection Act, the Senate Report states that "[t]he
bill would amend the Controlled Substances Act to
add exclusion from Medicare or a State health care
program as a basis for the denial, revocation, or
suspension of registration to manufacture,
distribute or dispense a controlled substance." S.
Rep. at 22, 1987 U.S.C.C.A.N. at 702. While this
discussion is arguably read as indicating that
Section 8 applied to both mandatory and
permissive exclusions, legislative history cannot
override a clear and unambiguous statutory text.
See United States v. Gonzales, 520 U.S. 1, 6 (1997).
("Given the straightforward statutory command,
there is no reason to resort to legislative history.")
(citation omitted).
13 To make clear, where an allegation bothimplicates a public interest factor (or another of the
Agency's revocation authorities), and also triggersUnder this standard, however, even if
DCH had proved the allegations,
Respondent would not have been
subject to "mandatory exclusion" by the
Secretary pursuant to her authority
under 42 U.S.C. 1320a-7(a), but rather
only "permissive exclusion" pursuant
to her authority under 42 U.S.C. 1320a-
7(b). Accordingly, even if the DCH
proceeding had resulted in
Respondent's exclusion by the
Secretary, because subparagraph (a)(5)
unambiguously limits the Agency's
revocation authority to where a
registrant is subject to mandatory
exclusion, the fact of permissive
exclusion would not, by itself, provide
a basis to revoke its DEA registration.
Indeed, the only substantial evidence
in this record that Respondent (or for
that matter, Duncan Drugs) "has
committed such acts as would render
[its] registration under section 823
* * * inconsistent with the public
interest," 21 U.S.C. 824(a)(4), is that
pertaining to the three recordkeeping
violations found during the May 2006
inspection. As found above, during the
inspection, the DI found that
Respondent did not have an initial
inventory, see 21 CFR 1304.11(b), had
not executed a power of attorney form
to indicate who was authorized to order
schedule II drugs on its behalf, Id.
1305.05(a), and had not been
completing the DEA Forms 222 to
indicate the dates on which it had
received certain drugs. 21 CFR
1305.13(e).
Mr. Scharff, Respondent's Pharmacist-
In-Charge, took responsibility for these
deficiencies and was found by the ALJ
to have credibly testified that they were
corrected as soon as the DI brought them
to his attention. ALJ at 23. Moreover, in
its brief, the Government does not even
cite these violations.
I thereore conclude that the
Government has not proved that
Respondent has committed acts which
render its continued registration
"inconsistent with the public interest"
as that term has been defined by
Congress for purposes of the CSA.14 21
the Secretary's permissive exclusion authority, DEA
retains the authority to revoke under the applicable
authority of 21 U.S.C. 824. Thus, while a
misdemeanor conviction relating to controlled
substances falls within the Secretary's permissive
exclusion authority, see 42 U.S.C. 1320a-7(b)(3),
DEA can still consider this conduct under the
public interest standard. See 21 U.S.C. 823(f).
Likewise, while the revocation or suspension of a
physician's state medical license also falls within
the Secretary's permissive exclusion authority, DEA
can revoke the practitioner's registration under 21
U.S.C. 824(a)(3).
14 The ALJ recommended, however, that
Respondent's registration be "subject to the
condition that Mr. Fordham shall have noinvolvement with Respondent in any capacity,
46848
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United States. Office of the Federal Register. Federal Register, Volume 76, Number 149, August 3, 2011, Pages 46595-47054, periodical, August 3, 2011; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc52326/m1/262/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.