[Federal Register Volume 62, Number 26 (Friday, February 7, 1997)]
[Notices]
[Pages 5845-5849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3084]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE
[Docket No. 95-20]


Jospeh S. Hayes, M.D.; Grant of Restricted Registration

    On January 25, 1995, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA) issued an 
Order to Show Cause to Joseph S. Hayes, M.D. (Respondent) of Bristol, 
Tennessee, notifying him of an opportunity to show

[[Page 5846]]

cause as to why DEA should not deny his application for registration as 
a practitioner under 21 U.S.C. 823(f), for reason that such 
registration would be inconsistent with the public interest.
    By letter dated February 10, 1995, the Respondent, acting pro se, 
timely filed a request for a hearing, and following prehearing 
procedures, a hearing was held in Nashville, Tennessee on July 12, 
1995, before Administrative Law Judge Mary Ellen Bittner. At the 
hearing, both parties called witnesses to testify and introduced 
documentary evidence. After the hearing, both sides submitted proposed 
findings of fact, conclusions of law and argument. After the filing of 
the posthearing findings of fact and conclusions of law, Respondent 
submitted three letters requesting favorable consideration of his 
application for DEA registration, two from himself dated January 8 and 
March 15, 1996, and one from another doctor dated March 18, 1996. Judge 
Bittner did not consider these letters in rendering her decisions since 
they were submitted after the hearing record was closed and after the 
period for filing proposed findings of fact and conclusions of law had 
expired. On May 1, 1996, Judge Bittner issued her Opinion and 
Recommended Ruling, Finding of Fact, Conclusions of Law and Decision, 
recommending that the Respondent's application for a DEA Certificate of 
Registration should be granted subject to various restrictions. On May 
15, 1996, Government counsel filed exceptions to the Recommended Ruling 
of the Administrative Law Judge, and on June 14, 1996, Judge Bittner 
transmitted the record of these proceedings, including the three 
letters not considered by her, to the Deputy Administrator.
    The Acting Deputy Administrator concurs with Judge Bittner's 
decision not to consider the three letters submitted after the time for 
filing proposed findings of fact and conclusions of law. The Acting 
Deputy Administrator has considered the remainder of the record in its 
entirety, and pursuant to 21 C.F.R. 1316.67, hereby issues his final 
order based upon findings of fact and conclusions of law as hereinafter 
set forth. The Acting Deputy Administrator adopts, in full, the Opinion 
and Recommended Ruling, Findings of fact, Conclusions of Law and 
Decision of the Administrative Law Judge, and his adoption is in no 
manner diminished by any recitation of facts, issues and conclusions 
herein, or of any failure to mention a matter of fact or law.
    The Acting Deputy Administrator finds that Respondent graduated 
from the University of South Carolina medical school and is board 
certified in family practice. Since 1977, he practiced emergency 
medicine in various states, including Tennessee, without incident until 
1988, when he began using drugs. Respondents testified that he began 
using controlled substance samples of Xanax and Halcion, Schedule IV 
controlled substances, to help him sleep after his then-wife was 
charged with Medicare and Medicaid fraud for forging his signature to 
claims without his knowledge. According to Respondent, he gradually 
increased his dosage to up to eight tablets a night, without realizing 
how addictive the drugs were or how they changed his personality and 
behavior.
    In May 1988, the Tennessee Health Related Boards Division 
(Division) received an anonymous complaint that Respondent was 
prescribing and dispensing controlled substances not in the course of 
professional practice. As a result of this information, the Division 
surveyed area pharmacies and found that of 826 prescriptions issued by 
Respondent, 602 were for Percocet, a Schedule II controlled substance. 
Subsequently, in December 1988, a Division Investigator met with 
Respondent to discuss his prescribing of controlled substances to four 
individuals. Respondent indicated that three of the individuals had 
medical problems that required the use of controlled substances. 
Respondent however, could not justify prescribing and administering a 
number of different drugs to one individual over an approximately three 
year period, indicating that he thought that the individual was abusing 
drugs, but that he did not know what to do with the individual.
    As a result of this investigation, on September 7, 1989, the 
Division issued a Notice of Charges against Respondent alleging, in 
substance, that Respondent maintained numerous patients on highly 
addictive and abusable narcotics over extended periods of time, that he 
prescribed Schedule II narcotics to himself and his wife, that he 
prescribed various controlled substances to a patient he knew was 
abusing drugs, and that he had not kept adequate records of the 
dispensing of drugs at his office.
    In January 1991, the Fourth Judicial Drug Task Force (Task Force) 
initiated an investigation of Respondent after receiving information 
from several sources that Respondent was overprescribing controlled 
substances to his patients and would provide them with whatever drugs 
they wanted. On two occasions in early 1991, a cooperating individual 
who was a patient of Respondent received 100 Xanax tablets, after a 
very cursory physical examination, however Respondent did talk to the 
individual about the individual's anxiety attacks. The Task Force did 
not pursue the investigation of Respondent at that time.
    On April 10, 1991, as a result of continued investigation, the 
Division issued an Order of Summary Suspension of Respondent's license 
to practice medicine in the State of Tennessee. The Order asserted that 
Respondent was found guilty of assaulting a patient who had done to his 
office seeking medical treatment, slapped a waitress in a restaurant 
across the face during a dispute over the bill, held a gun to his 
wife's head during an argument at his medical office, was found in 
contempt of court for not complying with a court order in his divorce 
proceeding, was arrested for resisting arrest and unlawful possession 
of a deadly weapon, prescribed phentermine, a Schedule IV controlled 
substance, for non-legitimate purposes, and prescribed hydrocodone, a 
Schedule III controlled substance, to an individual complaining of 
headaches after only a cursory examination causing the individual to 
become chemically dependent. The Order further found that in January 
1991, Respondent issued prescriptions for various controlled substances 
to an individual. After consuming some of these drugs the individual 
returned to Respondent's office and was injected with Demerol, a 
Schedule II controlled substance, and Phenergan, a non-controlled 
prescription substance, even though Respondent was aware that the 
individual had consumed alcohol and some of the prescribed controlled 
substance prior to the injections. After leaving Respondent's office, 
the individual collapsed, causing an automobile accident. Subsequently, 
the individual required emergency medical assistance for drug overdose 
and respiratory arrest.
    On April 12, 1991, Respondent was personally served with a copy of 
the Order of Summary Suspension by a Division Investigator who told 
Respondent on two occasion that in light of the Order, he was to cease 
practicing medicine in the State of Tennessee. Also on April 12, 1991, 
Respondent surrendered his DEA Certificate of Registration and was told 
by a DEA Investigator that as a result of this surrender he could no 
longer handle controlled substance in Tennessee.
    It was subsequently discovered that Respondent issued at least 10 
controlled substance prescriptions and continued

[[Page 5847]]

to practice medicine after April 12, 1991, when he was no longer 
authorized to do either. Thereafter, on May 10, 1991, an undercover 
Task Force Agent visited Respondent's office complaining of elbow pain. 
Respondent performed a very cursory physical examination and squeezed 
the agent's elbow asking if it hurt, but did not perform any other sort 
of examination or take any x-rays. The agent asked for Valium, to which 
Respondent replied that he was waiting for a shipment. Respondent then 
gave the agent some non-controlled prescription drug tablets, and 
charged him $30.00 for the visit. The undercover agent returned to 
Respondent's office on May 13, 1991, telling Respondent that his elbow 
still hurt. Respondent did not examine the agent on this occasion, but 
gave him 22 tablets of propoxyphene, a Schedule IV controlled 
substance. The agent paid Respondent $10.00 for the visit and received 
a receipt marked ``immunization''.
    On July 23, 1991, DEA received a telephone call from a pharmacist 
advising that on July 20, 1991, he had filled prescriptions for a Mr. 
Steven Hayes, issued by a Dr. George Mills. The pharmacist indicated 
that he later compared the signature on the prescriptions with 
prescriptions that had been issued by Respondent and realized that the 
signatures matched. The pharmacist then called Dr. Mills, who stated 
that he had not written any prescriptions for a Steven Hayes.
    Further investigation revealed that Respondent had been placing 
orders for controlled substances with a Connecticut drug distributor 
using his surrendered DEA registration number. Respondent placed an 
order for controlled substances on July 16, 1991, and on July 20, 1991, 
a DEA agent, posing as a United Parcel Service employee, delivered the 
order to Respondent's residence. After Respondent signed for the 
package, search warrants were executed at Respondent's residence and 
office. The search of Respondent's residence revealed approximately 
17,400 dosage units of various controlled substances, as well as 
syringes and other drug paraphernalia.
    Consequently, on May 10, 1991, the Division issued a Supplemental 
Notice of Charges to Respondent regarding his license to practice 
medicine, and on July 23, 1991, the Board of Medical Examiners (Board) 
issued a Final Order revoking Respondent's license to practice 
medicine, retroactive to April 10, 1991, the date of the summary 
suspension of his license. The Board also prohibited Respondent from 
applying for reinstatement of his medical license for a year from April 
10, 1991, and directed him to participate in the Tennessee Medical 
Association's Overprescribing and Substance Abuse Program, cooperate in 
further aftercare, take and pass the Special Purpose Examination, and 
obtain the advocacy of the Tennessee Medical Association's Impaired 
Physicians Program.
    On June 18, 1991, as a result of Respondent's dispensing of drugs 
to the undercover agent, Respondent was arrested and charged with the 
sale and delivery of a Schedule IV controlled substance and the sale 
and delivery of a legend drug. Thereafter, following the search of his 
residence in July 1991, Respondent was arrested, and eventually 
indicted in the State of Tennessee on several counts of unlawful 
possession with intent to deliver or sell controlled substances. On 
January 16, 1992, Respondent pled guilty to one misdemeanor count of 
delivery of a legend drug, one misdemeanor count of delivery of a 
Schedule IV controlled substance, and one felony count of unlawful 
possession of a Schedule IV controlled substance with intent to 
deliver. Respondent was sentenced to four years imprisonment, which was 
stayed in favor of 90 days imprisonment, four years supervised 
probation, and a fine.
    According to Respondent, the conduct which led to his convictions 
and revocation of his medical license was caused by his abuse of 
controlled substances on a daily basis from 1988 until he entered 
treatment in 1991. Respondent further testified that during that period 
he was ``totally in a panic and [his] mind was completely blurred due 
to the effects of benzodiazepines,'' and that he had ``lost all sense 
of feeling, and [his]sense of honesty and ethics were gone, because of 
the effects of drugs.'' In addition, Respondent testified that after he 
recognized that he needed treatment for his drug abuse, he attempted to 
stop the order for controlled substances that was ultimately delivered 
on July 29, 1991, but was informed that the order had already been 
processed.
    Beginning in late July 1991, under the direction of the Tennessee 
Medical Foundation's Impaired Physicians Program, Respondent spent four 
months at an inpatient treatment facility. He then moved to a halfway 
house to continue his recovery. In January 1992, he began serving his 
90 day criminal sentence during which he continued his recovery 
efforts. After his release from jail, he voluntarily re-entered a 
halfway house. Respondent testified that he has continued attending 
group therapy and meetings of Alcoholics Anonymous and Caduceus, a 
recovery program for medical professionals. In addition, in compliance 
with the conditions for reinstatement of his medical license, he passed 
the competency examination and participated in the Tennessee Medical 
Association's Overprescribing and Substance Abuse Program.
    On February 23, 1993, Respondent appeared before the Board seeking 
reinstatement of his medical license. The Board found that Respondent 
had complied with the requirements of its July 1991 Order and restored 
Respondent's medical license without restrictions, finding that he was 
no longer a threat to the health and safety of the citizens of 
Tennessee. On November 17, 1993, Respondent was granted permission by 
the Board to reapply for a DEA Certificate of Registration.
    Respondent had been subject to random drug screens for the two and 
one-half years preceding the hearing. A representative sampling of the 
results were introduced into evidence, all of which were negative. 
Respondent also introduced into evidence at the hearing a letter dated 
July 10, 1995, from the Medical Director of the Tennessee Medical 
Foundation's Impaired Physicians Program which documented Respondent's 
rehabilitative efforts, and stated that ``we are pleased to present Dr. 
Hayes to you as a repaired physician.''
    Respondent testified that he has learned mechanisms to avoid and 
manage stress, such as discussions with Caduceus group members and his 
friends, attending Alcoholics Anonymous meetings, and writing in a 
journal. He also testified that he has seen the consequences of drug 
abuse and knows that he will lose everything he has worked to regain 
should he relapse.
    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny an 
application for a DEA Certificate of Registration if he determines that 
such registration would be inconsistent with the public interest. In 
determining the public interest, the following factors are considered:

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to 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.

[[Page 5848]]

    (5) Such other conduct which may threaten the public health and 
safety.

    These factors are to be considered in the disjunctive; the Deputy 
Administrator may rely on any one or a combination of factors and may 
give each factor the weight he deems appropriate in determining whether 
a registration should be revoked or an application for registration be 
denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-42, FR 16,422 
(1989).
    As to factor one, the recommendation of the appropriate state 
licensing board, it is undisputed that in April 1991, Respondent's 
license to practice medicine in the State of Tennessee was summarily 
suspended and was revoked effective April 10, 1991. It is also 
undisputed that on February 23, 1993, the Board of Medical Examiners 
for the State of Tennessee reinstated Respondent's medical license 
without restrictions and on November 17, 1993, granted Respondent 
permission to apply for a DEA Certificate of Registration. The Acting 
Deputy Administrator agrees with Judge Bittner's conclusion that the 
finding of the Board that Respondent is no longer a threat to the 
health and safety of the citizens of Tennessee and that there is no 
reason to believe that he would again abuse his DEA registration 
privileges, weighs in favor of finding that Respondent's registration 
would not be inconsistent with the public interest.
    As to factor two, the evidence presented clearly indicates that 
Respondent's experience in dispensing controlled substances from 1988 
to mid-1991 was abysmal. Respondent dispensed controlled substances to 
himself, causing him to become addicted to the drugs. He exhibited 
extremely poor judgment in dispensing controlled substances to his 
patients as evidenced by his continued prescribing of drugs to an 
individual he knew to be addicted, and his injecting a patient with 
Demerol knowing that she had already taken some other controlled 
substances and had consumed alcohol. In addition, he continued to 
dispense and prescribe controlled substances after his license to 
practice medicine was suspended and he had surrendered his DEA 
registration. However, as Judge Bittner noted, Respondent testified 
that his behavior was caused by his drug addiction. Since 1991, 
Respondent has taken numerous steps towards recovery and has remained 
drug-free. Accordingly, the Acting Deputy Administrator concurs with 
Judge Bittner that ``Respondent's past practices were reprehensible,'' 
however, ``his efforts at recovery weigh in his favor.''
    Regarding factor three, it is undisputed that Respondent pled 
guilty and was convicted of one felony count of possession of a 
Schedule IV controlled substance with intent to deliver and one 
misdemeanor count of delivery of a Schedule IV controlled substance. 
However, as discussed above, Respondent's actions, which resulted in 
these convictions, were caused by his abuse of controlled substances. 
There is no evidence that Respondent has engaged in such behavior since 
1991, and as Judge Bittner states, ``Respondent appears to have made 
substantial progress in his efforts at recovery.''
    As to factor four, the record is replete with instances of 
Respondent's violation of Federal and state laws and regulations 
relating to controlled substances. On numerous occasions, he prescribed 
controlled substances for non-legitimate medical purposes in violation 
of 21 U.S.C. 841(a)(1) 21 C.F.R. 1306.04(a), a Tenn. Code Ann. 63-6-
214(b)(12). He continued to practice medicine after his license was 
summarily suspended, and continued to use his surrendered DEA 
registration to prescribe, dispense and order controlled substances in 
violation of 21 U.S.C. 841(a)(1) and 21 C.F.R. 1306.03. Finally, he 
forged another doctor's signature on a prescription in violation of 21 
U.S.C. 843(a)(3). The Acting Deputy Administrator finds that violations 
such as these, clearly raise questions as to Respondent's fitness to 
possess a DEA Certificate of Registration. Again, however, the record 
supports a finding that Respondent committed these violations of the 
law because of his addiction to drugs, and he has been in extensive 
successful treatment for this addiction since 1991.
    Finally, regarding factor five, Respondent's acts of physical 
violence, including assaulting a waitress at a restaurant, a patient in 
his office, and his wife at the medical office, as well as, his arrest 
for unlawful possession of a weapon and resisting arrest, are of 
tremendous concern to the Acting Deputy Administrator. However, there 
is no evidence in the record that Respondent has engaged in similar 
behavior since beginning treatment for his drug addiction in 1991.
    Judge Bittner recognized that Respondent has exhibited in the past 
a disregard for the laws and regulations regarding the proper handling 
of controlled substances. However, he has not abused controlled 
substances since July 1991, and has undertaken considerable steps 
towards rehabilitation. Judge Bittner found that ``Respondent appears 
to accept responsibility for his drug addiction and actions resulting 
from it, and has testified that he knows the consequences of relapse.'' 
Consequently, Judge Bittner found that it would not be inconsistent 
with the public interest to issue Respondent a DEA registration subject 
to the following conditions for a period of three years after issuance 
of the Certificate of Registration: (1) Respondent is not to order or 
dispense controlled substances except in a medical clinic or hospital 
environment; (2) Respondent is to continue his association with the 
Tennessee Medical Foundation's Impaired Physicians Program, continue 
attending Caduceus group meetings, and continue attending Alcoholics 
Anonymous or a similar program; (3) Respondent is to continue random 
drug screening at this own expense; and (4) Respondent shall maintain a 
log of all prescriptions for controlled substances he issues, and is to 
submit that log for review to the Nashville DEA office at the end of 
each calendar quarter.
    Government counsel filed exceptions to Judge Bittner's 
recommendations arguing that ``Respondent's egregious conduct evidenced 
a lack of regard for the responsibilities inherent in a DEA 
registration; therefore, such conduct constitutes the basis for the 
denial of his application for DEA registration.'' In support of its 
position, the Government cited two previous cases where an application 
for DEA registration was denied. The Government argued that in the case 
of James W. Shore, M.D., 61 FR 6262 (1996), an application for DEA 
registration was denied even though ``it was found that the applicant's 
misconduct occurred nearly ten years prior; that the applicant was 
found to have taken responsibility for past unlawful actions; 
successfully completed criminal probation; and, taken a course on 
prescribing practices * * *.'' The Government argued that this denial 
was based, in part, ``upon the applicant's demonstrated `cavalier 
attitude' toward controlled substances.''
    The Acting Deputy Administrator finds that the Shore case is 
distinguishable from this case since in Shore, it was found that the 
applicant was manipulated by patients and there was no explanation as 
to how he would avoid being manipulated in the future. In addition, in 
that case, it was found that the applicant exhibited a ``cavalier 
attitude'' at the hearing. In this case, Respondent's actions were 
caused by his self-abuse of controlled substances over more than five 
years ago. He has taken numerous steps towards continued recover and he 
provided

[[Page 5849]]

assurances at the hearing as to how he would avoid a relapse. It is 
without question that Respondent exhibited a cavalier attitude towards 
controlled substances from 1988 to mid-1991, but the evidence in the 
record supports a finding that Respondent has been diligent in his 
efforts to correct and control his problem and understands the severity 
of the consequences should he begin abusing controlled substances 
again.
    In its exceptions, the Government also cites to David W. Bradway, 
M.D., 59 FR 6297 (1994), arguing that in that case the application was 
denied even though the applicant presented evidence regarding his 
rehabilitation from drug abuse, his ability to responsibly handle 
controlled substances, and the unlikelihood of his relapse into drug 
abuse. However, the Acting Deputy Administrator concludes that in that 
case, the underlying circumstances of the applicant's self-abuse were 
far more serious than the circumstances surrounding Respondent's abuse 
of controlled substances. In addition, in Bradway, it was determined 
that the applicant had ``not demonstrated either ethical conduct nor 
trustworthy behavior to warrant the granting of a DEA Certificate of 
Registration.'' The Acting Deputy Administrator concludes that 
Respondent has shown, through this continued rehabilitative efforts 
even though no longer required by the State of Tennessee, that he can 
be trusted to responsibly handle controlled substances subject to the 
restrictions recommended by Judge Bittner.
    The Government further argues in its exceptions that the Acting 
Deputy Administrator should not credit Respondent's explanation that 
his use of controlled substances caused him to exercise poor judgment. 
The Government contends that ``[t]he granting of a DEA registration 
under such circumstances would open the door for future litigants to 
misuse the substance abuse defense in rationalizing flagrant violations 
of controlled substances laws and regulations.'' If the Acting Deputy 
Administrator accepted the Government's argument, no applicant who had 
abuse controlled substances in the past would ever be granted a DEA 
registration regardless of any rehabilitative efforts. Instead, the 
Acting Deputy Administrator is charged with evaluating the facts and 
circumstances surrounding each application to determine whether 
registration would be inconsistent with the public interest. In this 
case, the Acting Deputy Administrator concludes that the record 
supports a finding that Respondent's behavior was caused by his abuse 
of controlled substances, and there is no evidence of any wrongdoing by 
Respondent since he entered treatment in 1991.
    The Government alternatively argues in its exceptions that should a 
registration be issued to Respondent it should be restricted to 
schedules IV and V for a three year period, thereby allowing Respondent 
to demonstrate that he can ``properly handle controlled substances in 
schedules with the least potential for addiction * * *.'' Given 
Respondent's past behavior, the Acting Deputy Administrator appreciates 
the Government's argument. However, the Acting Deputy Administrator 
does not believe that restricting Respondent's registration to 
Schedules IV and V would better protect the public interest, since the 
drugs that Respondents abused himself were in Schedule IV. The Acting 
Deputy Administrator concludes that the restrictions recommended by 
Judge Bittner are sufficient at this time to monitor Respondent's 
handling of controlled substances and to protect the public interest. 
Therefore, the Acting Deputy Administrator finds that it would not be 
inconsistent with the public interest at this time to grant 
Respondent's application for registration, provided that for three 
years after Respondent is granted a DEA registration: (1) Respondent is 
not to order or dispense controlled substances except in a medical 
clinic or hospital environment; (2) Respondent is to continue his 
association with the Tennessee Medical Foundation's Impaired Physicians 
Program, continue attending Caduceus group meetings, and continue 
attending Alcoholics Anonymous or a similar program; (3) Respondent is 
to continue random drug screening at his own expense; and (4) 
Respondent shall maintain a log of all prescriptions for controlled 
substances he issues, and is to submit that log for review to the 
Nashville DEA office at the end of each calendar quarter. The log shall 
include at a minimum, the name of the patient, the date the 
prescription is issued, and the name, dosage and quantity of the drug 
prescribed.
    Accordingly, the Acting Deputy Administrator of the Drug 
Enforcement Administration, pursuant to the authority vested in him by 
21 U.S.C. 823 and 28 CFR 0.100(b) and 0.104, hereby orders that the 
application, submitted by Joseph S. Hayes, M.D., for a DEA Certificate 
of Registration in Schedules II through V, be and it hereby is granted 
subject to the above described restrictions. This order is effective 
March 10, 1997.

    Dated: January 31, 1997.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 97-3084 Filed 2-6-97; 8:45 am]
BILLING CODE 4410-09-M