[Federal Register Volume 87, Number 14 (Friday, January 21, 2022)]
[Notices]
[Pages 3340-3343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01112]


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

DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Daniel R. Nevarre, M.D.; Decision and Order

    On June 7, 2021, a former Assistant Administrator, Diversion 
Control Division, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Daniel R. Nevarre, M.D., 
(hereinafter, Applicant), of South Jordan, Utah. Order to Show Cause 
(hereinafter, OSC), at 1. The OSC proposed the denial of Applicant's 
application No. H21079595C for a DEA Certificate of Registration, 
because the United States Department of Health and Human Services, 
Office of Inspector General (hereinafter, HHS/OIG) mandatorily excluded 
Applicant from participation in Medicare, Medicaid, and all Federal 
health care programs for a minimum period of 10 years pursuant to 42 
U.S.C. 1320a-7(a); and such exclusion ``warrants denial of 
[Applicant's] application for DEA registration pursuant to 21 U.S.C. 
824(a)(5).'' Id. at 2. The OSC also alleged that Applicant's 
application ``contains material false statements'' and thus forms an 
independent ground for denial. Id. at 2 (citing 21 U.S.C. 824(a)(1)).
    The OSC alleged that on May 25, 2018, Applicant ``pled guilty to 
one count of medical assistance fraud in violation of 62 P.S. Sec.  
1407(a)(1), and to one count of insurance fraud, in violation of 18 
Pa.C.S. Sec.  4117(a)(2).'' Id. at 1-2 (citing Commonwealth of Pa. v. 
Daniel Raymond Nevarre, No. CP-11-CR-0000717-2018 (Pa. Ct. Comm. Pl. 
May 25, 2018)). The OSC further alleged that, based on such conviction, 
HHS/OIG ``mandatorily excluded [Applicant] from participation in 
Medicare, Medicaid, and all Federal health care programs'' for a 
minimum period of 10 years pursuant to 42 U.S.C. 1320a-7(a), effective 
November 20, 2018. Id. The OSC therefore proposed denial of Applicant's 
application based on 21 U.S.C. 824(a)(5).

[[Page 3341]]

    The OSC also proposed denial of Applicant's application based on 21 
U.S.C. 824(a)(1), because Applicant responded ``no'' to Liability 
Question 1 on his DEA application, which asks whether Applicant has 
ever been excluded from participation in a medicare program. Id. The 
OSC therefore proposed denial of Applicant's application because his 
``failure to disclose [his] exclusion from Medicare constitutes 
material falsification of [his] application for a DEA [registration].'' 
Id.
    The Show Cause Order notified Applicant of the right to request a 
hearing on the allegations or to submit a written statement, while 
waiving the right to a hearing, the procedures for electing each 
option, and the consequences for failing to elect either option. Id. at 
2-3 (citing 21 CFR 1301.43). The OSC also notified Applicant of the 
opportunity to submit a corrective action plan. OSC, at 3 (citing 21 
U.S.C. 824(c)(2)(C)).

Adequacy of Service

    In a signed and sworn Declaration, a Diversion Investigator 
(hereinafter, DI 2) assigned to the Pittsburg District Office, 
Philadelphia Field Division, stated that, on June 21, 2021, after 
receiving a request from the Salt Lake City District Office to assist 
with service of the OSC, he and a Narcotics Agent from the Pennsylvania 
Office of the Attorney General traveled to Applicant's residential 
address in Johnstown, Pennsylvania, where he ``personally served [the 
Applicant] with a copy of the [OSC].'' Request for Final Agency Action, 
dated November 9, 2021 (hereinafter, RFAA), Exhibit (hereinafter, 
RFAAX) 3 (DI 2 Declaration), at 1-2.
    The Government forwarded its RFAA, along with the evidentiary 
record, to this office on November 9, 2021. In its RFAA, the Government 
represents that ``neither [Applicant] nor any attorney representing 
[Applicant] has requested a hearing'' or filed a written statement. 
RFAA, at 2; see also RFAAX 3, at 2 & RFAAX 1, at 4. The Government 
requests ``Final Agency Action denying the Application on the grounds 
that [Applicant] materially falsified his Application and has been 
excluded from participation in Medicare, Medicaid, and all Federal 
health care programs pursuant to 42 U.S.C. 1320a-7(a).'' Id.
    Based on the DI's Declaration, the Government's written 
representations, and my review of the record, I find that the 
Government accomplished service of the OSC on Applicant on June 21, 
2021. I also find that more than thirty days have now passed since the 
Government accomplished service of the OSC. Further, based on the 
Government's written representations, I find that neither Applicant, 
nor anyone purporting to represent the Applicant, requested a hearing, 
submitted a written statement while waiving Applicant's right to a 
hearing, or submitted a corrective action plan. Accordingly, I find 
that Applicant has waived the right to a hearing and the right to 
submit a written statement and corrective action plan. 21 CFR 
1301.43(d) and 21 U.S.C. 824(c)(2)(C). I, therefore, issue this 
Decision and Order based on the record submitted by the Government, 
which constitutes the entire record before me. 21 CFR 1301.43(e).

A. Findings of Fact

1. Applicant's DEA Application and Former Registrations
    On February 1, 2021, DEA received an application from Applicant for 
a DEA Certificate of Registration as a practitioner in Schedules IIN 
\1\ through V with a proposed registered address of 881 Baxter Drive, 
Suite 100, South Jordan, Utah 84095. RFAAX 1 (DI 1 Declaration) 
(Appendix, hereinafter, App.) 1 (Applicant's Application). Applicant's 
application was assigned Control No. H21079595C. RFAAX 1, at 1.
---------------------------------------------------------------------------

    \1\ Applicant only applied for schedule II non-narcotic (IIN).
---------------------------------------------------------------------------

    DI 1 submitted a Declaration, dated September 13, 2021, which 
stated that Applicant had previously surrendered for cause DEA 
Certificates of Registration numbered FN7029487 and BN5130290 on 
September 5, 2018, and October 15, 2018, respectively, after losing his 
state authority to practice medicine in Pennsylvania. RFAAX 1 (DI 1 
Declaration) at 2. DI 1 further stated that Applicant's third previous 
DEA Certificate of Registration numbered FN5716420 in New York expired 
on October 31, 2018. Id. at 2-3.
2. Applicant's Exclusion (21 U.S.C. 824(a)(5))
    The Government's uncontroverted evidence demonstrates that 
Applicant pled guilty to false information/claims and insurance fraud 
on or about May 25, 2018, in the Court of County Pleas in Cambria 
County, Pennsylvania. RFAAX 1, at App. C (Applicant's Guilty plea). In 
a letter from the HHS/OIG, dated October 31, 2018, HHS excluded 
Applicant from Medicare, Medicaid, and all federal health care programs 
under 42 U.S.C. 1320a-7(a) for a minimum period 10 years based on 
Applicant's conviction. RFAAX 1, App. E (hereinafter, HHS Exclusion), 
at 1. The HHS Exclusion stated that the exclusion would become 
effective twenty days from the date of the letter. Id. at 1.
    Accordingly, I find clear, unequivocal, and convincing record 
evidence that HHS excluded Applicant from Medicare, Medicaid, and all 
federal health care programs under 42 U.S.C. 1320a-7(a) for a minimum 
of 10 years, effective November 20, 2018.
3. Material Falsification of Applicant's Application (21 U.S.C. 
824(a)(1))
    I find clear, unequivocal, and convincing record evidence that 
Applicant answered ``N'' to the first Liability question on the 
registration renewal application that was received by DEA on or about 
February 1, 2021. RFAAX 1, App. 1, at 2. I find clear, unequivocal, and 
convincing record evidence that the text of the first Liability 
question on the registration renewal application that Applicant 
submitted on or about February 1, 2021, asked whether Applicant had 
``ever been . . . excluded or directed to be excluded from 
participation in a medicare or state health care program, or is any 
such action pending.'' \2\ Id. Accordingly, I find clear, unequivocal, 
and convincing record evidence that Applicant's ``N'' response to the 
first Liability question on his application that he submitted on or 
about February 1, 2021, was false, because the record evidence clearly 
establishes that on October 31, 2018, Applicant was excluded from 
Medicare, Medicaid and all federal healthcare programs by HHS. See 
RFAAX 1, App. E.
---------------------------------------------------------------------------

    \2\ Although Applicant submitted evidence in his application 
related to his conviction and the circumstances of his surrender for 
cause of his previous DEA registrations, he did not include any 
discernable information on the HHS/OIG exclusion. RFAAX 1, App. 1 
(Application).
---------------------------------------------------------------------------

B. Discussion

    In its OSC, the Government relied upon grounds Congress provided to 
support revocation/suspension, not denial of an application. Prior 
Agency decisions have addressed whether it is appropriate to consider a 
provision of 21 U.S.C. 824(a) when determining whether or not to grant 
a practitioner registration application. For over forty-five years, 
Agency decisions have concluded that it is. Robert Wayne Locklear, 
M.D., 86 FR 33,738 33,744-45 (2021) (collecting cases); see also, 
William Ralph Kincaid, M.D., 86 FR 40,636, 40,641 (2021). A provision 
of section 824 may be the basis for the denial of a practitioner 
registration application and allegations related to section 823 remain 
relevant to the adjudication of a practitioner

[[Page 3342]]

registration application when a provision of section 824 is involved. 
See Robert Wayne Locklear, M.D., 86 FR at 33,744-45.
    Accordingly, when considering an application for a registration, I 
will consider any actionable allegations related to the grounds for 
denial of an application under 823 and will also consider any 
allegations that the applicant meets one or more of the five grounds 
for revocation or suspension of a registration under section 824. Id. 
See also Dinorah Drug Store, Inc., 61 FR 15,972, 15,973-74 (1996).
1. 21 U.S.C. 823(f): The Five Public Interest Factors
    Pursuant to section 303(f) of the Controlled Substances Act 
(hereinafter, the CSA), ``[t]he Attorney General shall register 
practitioners . . . to dispense . . . controlled substances . . . if 
the applicant is authorized to dispense . . . controlled substances 
under the laws of the State in which he practices.'' 21 U.S.C. 823(f). 
Section 303(f) further provides that an application for a 
practitioner's registration may be denied upon a determination that 
``the issuance of such registration . . . would be inconsistent with 
the public interest.'' Id.
    In this case, there is no indication that Applicant does not hold a 
valid state medical license or is not authorized to dispense controlled 
substances in the State of Utah, where he has applied for a 
registration.
    Because the Government has not alleged that Applicant's 
registration is inconsistent with the public interest under section 
823, and although I have considered 823, I will not analyze Applicant's 
application under the public interest factors. Therefore, in accordance 
with prior agency decisions, I will move to assess whether the 
Government has proven by substantial evidence that a ground for 
revocation exists under 21 U.S.C. 824(a). Supra B.
2. 21 U.S.C. 824(a)(5): Mandatory Exclusion From Federal Health Care 
Programs Pursuant to 42 U.S.C. 1320a-7(a)
    Under Section 824(a) of the CSA, a registration ``may be suspended 
or revoked'' upon a finding of one or more of five grounds. 21 U.S.C. 
824. The ground in 21 U.S.C. 824(a)(5) requires that the registrant 
``has been excluded (or directed to be excluded) from participation in 
a program pursuant to section 1320a-7(a) of Title 42.'' Id. Here, the 
undisputed record evidence demonstrates that HHS mandatorily excluded 
Applicant from federal health care programs. RFAAX 6. Accordingly, I 
will sustain the Government's allegation that Applicant has been 
excluded from participation in a program pursuant to section 1320a-7(a) 
of Title 42 and find that the Government has established that a ground 
for revocation exists pursuant to 21 U.S.C. 824(a)(5).\3\ Although the 
language of 21 U.S.C. 824(a)(5) discusses suspension and revocation of 
a registration, for the reasons discussed above, it may also serve as 
the basis for the denial of a DEA registration application. See Dinorah 
Drug Store, Inc., 61 FR at 15,973 (interpreting 21 U.S.C. 824(a)(5) to 
serve as a basis for the denial of an application for registration 
because it ``makes little sense . . . to grant the application for 
registration, only to possibly turn around and propose to revoke or 
suspend that registration based on the registrant's exclusion from a 
Medicare program''). Applicant's exclusion from participation in a 
program under 42 U.S.C. 1320a-7(a), therefore, serves as an independent 
basis for denying his application for DEA registration.
---------------------------------------------------------------------------

    \3\ It is noted that this Agency has concluded repeatedly that 
the underlying crime requiring exclusion from federal health care 
programs under Section 1320a-7(a) of Title 42 does not require a 
nexus to controlled substances in order to be used as a ground for 
revocation or suspension of a registration or denial of an 
application. Narciso Reyes, M.D., 83 FR 61,678, 61,681 (2018); KK 
Pharmacy, 64 FR at 49,510 (collecting cases); Melvin N. Seglin, 
M.D., 63 Red. Reg. 70,431, 70,433 (1998); Stanley Dubin, D.D.S., 61 
FR 60,727, 60,728 (1996). In this case, the HHS ALJ applied 
aggravating factors to extend Applicant's exclusion period due to 
circumstances such as, the amount of restitution ($288,900) and the 
length of the criminal activity, which continued over a period of 
approximately seven years. RFAAX 1, App. E, at 3. Applicant's 
extensive unlawful activity over the course of seven years and his 
falsification on his application demonstrate a serious lack of 
honesty such that I cannot entrust him with a controlled substances 
registration.
---------------------------------------------------------------------------

3. 21 U.S.C. 824(a)(1): Material Falsification
    As already discussed, I find clear, unequivocal, and convincing 
evidence that Applicant submitted a registration application containing 
a false answer to the first Liability question. Supra section A.3. 
Applicant's false submission implicated Applicant's ``exclu[sion] . . . 
from participation in a program pursuant to section 1320a-7(a) of Title 
42.'' 21 U.S.C. 824(a)(5). As a result, Applicant's false response to 
the first Liability question directly implicated my analysis related to 
the CSA's statutory grounds for revocation of a controlled substances 
registration, which as explained in supra B.1 and B.2, the agency has 
consistently interpreted to be equally relevant to its assessment of an 
application for a controlled substances registration. See Robert Wayne 
Locklear, M.D., 86 FR at 33,744-45 (collecting cases). Therefore, 
Applicant's false submission affected my decision by depriving me of 
legally relevant facts when I evaluated Applicant's registration 
application. RFAAX 2, at 1; see also Frank Joseph Stirlacci, M.D., 85 
FR 45,229, 45,235 (2020). Accordingly, I find, based on the CSA, agency 
decisions, and the analysis underlying multiple Supreme Court decisions 
explaining ``materiality,'' that the falsity Applicant submitted was 
material. Frank Joseph Stirlacci, M.D., 85 FR at 45,235.
    I find that there is clear, convincing, and unequivocal evidence in 
the record supporting denial of Applicant's application based on his 
having ``materially falsified any application filed pursuant to or 
required by this subchapter or subchapter II.'' 21 U.S.C. 824(a)(1).\4\
---------------------------------------------------------------------------

    \4\ See supra B.1 finding that a ground for revocation can serve 
as a basis for denial of an application.
---------------------------------------------------------------------------

4. Summary of Government's Prima Facie Case
    Where, in section 824(a)(5) cases, the applicant offers no 
mitigating evidence upon which the Administrator can analyze the facts, 
the agency has consistently held that revocation/suspension/denial is 
warranted. See, e.g., Sassan Bassiri, D.D.S., 82 FR 32,200, 32,201 
(2017); Richard Hauser, M.D., 83 FR 26,308, 26,310 (2018) (revocation 
was sought under Section 824(a)(5) and the registrant's certificate of 
registration was revoked ``based on the unchallenged basis for his 
mandatory exclusion''). Additionally, in this case, there is evidence 
on the record that Applicant materially falsified his application. When 
the basis for revocation/suspension/denial is clear and the registrant/
applicant has had notice and the opportunity to present evidence, 
whether in a hearing or a written statement in accordance with 21 CFR 
1301.43, but has chosen not to present any such evidence that could 
inform the Administrator's decision, it is reasonable that the 
Administrator should revoke or suspend, or deny. See KK Pharmacy, 64 FR 
49,507, 49,510 (1999); Orlando Ortega-Ortiz, M.D. 70 FR 15,122 (2005); 
Lazaro Guerra, 68 FR 15,266 (2003) (basis for revocation was both 
(a)(3) and (a)(5)).
    Accordingly, I find that there is clear, convincing, and 
unequivocal evidence in the record supporting denial of Applicant's 
application based on his exclusion from federal health care programs. 
21 U.S.C. 824(a)(5). I further

[[Page 3343]]

find that there is clear, convincing, and unequivocal evidence in the 
record supporting denial of Applicant's application based on his 
material falsification of his application. 21 U.S.C. 824(a)(1).

C. Sanction

    Here, there is no dispute in the record that Applicant is 
mandatorily excluded pursuant to Section 1320a-7(a) of Title 42, and, 
further that Applicant materially falsified his application for a 
controlled substance registration, and therefore, that grounds for the 
denial of Applicant's application exist. Where, as here, the Government 
has met its prima facie burden of showing that grounds for denial 
exist, the burden shifts to the Applicant to show why he can be 
entrusted with a registration. Garrett Howard Smith, M.D., 83 FR 
18,882, 18,910 (2018) (collecting cases).
    In this case, Applicant failed to respond to the Government's Order 
to Show Cause and did not avail himself of the opportunity to refute 
the Government's case. See RFAA, at 2. Therefore, Applicant has not 
provided any remorse or assurances that he would implement remedial 
measures to ensure such conduct is not repeated. Such silence weighs 
against the Applicant's registration. Zvi H. Perper, M.D., 77 FR at 
64,142, citing Medicine Shoppe, 73 FR at 387; see also Samuel S. 
Jackson, 72 FR at 23,853. Further, due to the lack of a statement or 
testimony from Applicant, it is unclear whether Applicant can be 
entrusted with a DEA registration; and therefore, I find that sanction 
is appropriate to protect the public from a recurrence of Applicant's 
unlawful actions in the context of his CSA registration. See Leo R. 
Miller, M.D., 53 FR 21,931, 21,932 (1988).
    Consequently, I find that the factors weigh in favor of sanction 
and I shall order the sanctions the Government requested, as contained 
in the Order below.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 823(f) and 21 U.S.C. 824(a), I hereby deny the pending 
application for a Certificate of Registration, Control Number 
H21079595C, submitted by Daniel R. Nevarre, M.D., as well as any other 
pending application of Daniel R. Nevarre, M.D. for additional 
registration in Utah. This Order is effective [insert Date Thirty Days 
From the Date of Publication in the Federal Register].

Anne Milgram,
Administrator.
[FR Doc. 2022-01112 Filed 1-20-22; 8:45 am]
BILLING CODE 4410-09-P