Diversion Control Division, US Department of Justice, Drug Enforcement Administration

RESOURCES > Federal Register Notices > Registrant Actions - 2011 > Joe C. Fermo, M.D.; Revocation of Registration

Registrant Actions - 2011

[Federal Register Volume 76, Number 160 (Thursday, August 18, 2011)]
[Pages 51412-51415]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-21061]


Drug Enforcement Administration

Joe C. Fermo, M.D.; Revocation of Registration

On September 30, 2009, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Joe C. Fermo, M.D. (Registrant), of Tulsa, Oklahoma. The Show Cause Order proposed the revocation of Registrant's DEA Certificate of Registration, BF7430781, as well as the denial of any pending applications to renew or modify his registration, on the ground that his "continued registration would be inconsistent with the public interest." Show Cause Order at 1 (citing 21 U.S.C. 823(f) and 824(a)(4)).

The Show Cause Order specifically alleged that on February 23, 1990, Registrant was convicted in the District Court for Oklahoma County, State of Oklahoma, of ten counts of submitting false claims to the Oklahoma Department of Human Services in violation of Oklahoma law, and that on June 20, 1990, the United States Department of Health and Human Services excluded him from participating in federal health care programs under 42 U.S.C. 1320a-7(a). Id. at 1-2. The Order further alleged that based on his convictions, on June 21, 1990, the Oklahoma State Board of Medical Licensure placed his medical license on probation and that Registrant materially falsified three separate applications (in 1991, 1994, and 1997) to renew his DEA registration by failing to disclose the state board's action. Id. at 2 (citing 21 U.S.C. 824(a)(1)).\1\


\1\ The Show Cause Order alleged that in March 2001, Registrant and DEA entered into a Memorandum of Agreement (MOA) which settled a Show Cause Proceeding filed in April 2000 based on the allegations described above. Show Cause Order at 2. The Show Cause Order also alleged that under the MOA, Registrant surrendered his registration and was allowed to reapply no earlier than March 2004, and that in October 2004, DEA issued him a new registration. Id.


Finally, the Show Cause Order alleged that on August 27, September 24, and September 26, 2007, an undercover officer had obtained prescriptions from Registrant for alprazolam (at all three visits) and propoxyphene (at the first two visits), both of which are schedule IV controlled substances. Id. The Order further alleged that these prescriptions lacked a legitimate medical purpose and were issued outside of the usual course of professional practice in violation of Federal and State laws. Id. (citing 21 CFR 1306.04 and Okla. Admin. Code 475.30-1-3(a)).

On or about October 5, 2009, the Show Cause Order, which also notified Registrant of his right to either request a hearing on the allegations or to submit a written statement in lieu of a hearing, the procedures for doing so, and the consequence if he failed to do so, was served on Registrant by certified mail addressed to him at the address of his registered location. Id. at 2-3 (citing 21 CFR 1301.43). Since service of the Show Cause Order, more than thirty days have now passed and neither Registrant, nor anyone purporting to represent him, has either requested a hearing or submitted a written statement in lieu of a hearing. See 21 CFR 1301.43(b)-(d). Accordingly, I find that Registrant has waived his rights to a hearing or to submit a written statement. Id. 1301.43(d). I therefore issue this Decision and Final Order without a hearing based on relevant evidence contained in the investigative record submitted by the Government.


Registrant is the holder of DEA Certificate of Registration, BF7430781, which authorizes him to dispense controlled substances in schedules II through V as a practitioner at the registered location of 5970 E. 31 St., Suite O, Tulsa, Oklahoma. While his registration was to expire on September 30, 2010, on August 13, 2010, Registrant filed a renewal application. In accordance with the Administrative Procedure Act and DEA regulations, I find that Registrant's registration remains in effect pending the issuance

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of this Final Order. See 5 U.S.C. 558(c); 21 CFR 1301.36(i). On August 27, 2007, an Agent with the Oklahoma Bureau of Narcotics went to Registrant's office to perform an undercover visit with Merli Fermo, M.D., Registrant's wife, who was also a DEA registrant.\2\ Upon meeting the receptionist, to whom she paid $65, the Agent was told that she would have to wait one hour to see Merli Fermo and was asked if she wanted to see Registrant, who was available immediately. The Agent agreed and was taken to his office.


\2\ Merli Fermo has since passed away.


After the Agent and Registrant discussed the former's having spent some time in Minnesota and why she had returned to Oklahoma, who she lived with, how she was supporting herself, and her address, Registrant asked the Agent: "So what do you want me to put you on?" The Agent replied: "I've been on Xanax. Two milligrams." Registrant then asked the Agent if she had "been on it for a while?" The Agent replied that she had been, that she had "continued it when" she had gone to Minnesota, and had gotten it "from a doctor up there."

Registrant then asked: "You're taking Xanax three times a day?"; the Agent replied "four times a day." Registrant responded: "It says three times a day," to which the Agent said, "I know but it was increased up there." Registrant then told the Agent to "take it two times a day. Two milligrams." The Agent asked: "So I'm only get[ing] it two times a day?" Registrant replied affirmatively and asked, "What else are you taking?" The Agent answered: "I was taking Darvocet too."

Registrant then asked "are you having some pain?" The Agent replied: "Oh, every once in a while." Registrant told the Agent to "[t]ake it two times a day and I'll give you a hundred"; the Agent replied: "Okay. I wish you'd give me the four on this Xanax though." After several comments which were unintelligible, Registrant and the Agent discussed how far the latter had lived from Minneapolis, whether the Agent went there much when she lived in Minnesota, and Registrant's having previously lived in the Minneapolis area. Before the visit ended, Registrant gave the Agent prescriptions for 100 Xanax (alprazolam) 2 mg and 100 Darvocet-N (propoxyphene) 100 mg, both of which are schedule IV controlled substances, see 21 CFR 1308.14(b), (c), as well as Celera, a non-controlled anti-depressant.

On September 24, 2007, the Agent returned to Registrant's office and paid the receptionist $65. While the Agent was scheduled to see Registrant's wife, when informed that the latter was not available, she agreed to see Registrant, and after a short wait, was taken to his office.

Registrant asked the Agent how she was doing; she replied "great." Registrant then asked "what's going on with you?" The Agent answered: "Not a thing. I wonder if I could get a hundred and twenty of the Xanax instead of a hundred?" Registrant asked why she wanted one hundred twenty; the Agent answered: "I ran out." \3\ Registrant then said: "No, not if you take it down * * * the way it is prescribed for you, you wouldn't run out." After the Agent said "I know," Registrant stated--in contrast to his instruction at the previous visit to take the Xanax twice a day--"Just take it three times a day, that's precisely why it's controlled because people have a tendency to (Inaudible) take it more than what's prescribed." Registrant then apparently warned the Agent that she could have seizures if she took more than what he prescribed "and then if you don't take it for some reason or another" and added "it's not good to be doing that."


\3\ Based on the dosing instruction he gave the Agent at the initial visit, the Xanax should have lasted 50 days; the Agent was thus seeking the drug approximately three weeks early.


After telling the Agent that she could take the Xanax "three times a day," Registrant asked her: "Do you still need the Darvocet?"; the Agent answered: "Yes." After a conversation about such subjects as how much social security the Agent was getting, what type of work she had previously done, her shopping habits, and whether she had a boyfriend, Registrant told the Agent to take the Celexa because it is an anti-depressant that works with Xanax and would help her to get going in the morning. After still more conversation about the Agent's social life, Registrant gave her new prescriptions for 100 Xanax 2 mg, 100 Darvocet-N 100 mg, and Celexa. Shortly thereafter, the visit ended.\4\


\4\ The Government also submitted a copy of the Information filed by the State of Oklahoma charging Registrant with ten counts of submitting false claims to the Oklahoma Department of Human Services; a "Deferred Sentence, Plea of Guilty, Summary of Facts" filed in the state court proceedings; a June 20, 1990, letter from the Office of Inspector General, U.S. Department of Health & Human Services, which excluded Registrant "from participation in the Medicare program and any State health program" for a period of fifteen years based on his state court convictions; and a Final Order of the Oklahoma State Board of Medical Licensure and Supervision (issued on June 21, 1990) which placed him on probation for four years and nine months based on his guilty plea in the state criminal proceeding.

The Government did not, however, submit either the MOA, which Registrant entered into with DEA, or any of the applications which it alleged he had materially falsified. Instead, it submitted the MOA that DEA entered into with his wife and an affidavit of an Agency Investigator stating that he had "received information from" an Investigator in another office that Registrant's MOA "was identical" to his wife's. Affidavit of Diversion Investigator, at 1.

Even accepting this would establish that Registrant settled the Show Cause Proceeding on the same terms as his wife did, his wife's MOA merely stated that an April 21, 2000 Order to Show Cause "further alleged that on August 13, 1991, September 22, 1994, and again on August 28, 1997, the Respondent materially falsified her renewal applications by failing to disclose that the Board placed her medical license on probation in June 1990." MOA, at 2. Continuing, the MOA states: "The above matters, if proven at an administrative hearing, constitute grounds for revocation of the Respondent's DEA Certificate of Registration, and denial of her pending application for renewal of that registration." Id. Nowhere in the MOA did Registrant's wife admit to the material falsification allegation. Thus, even if Registrant's MOA imposed the same terms, it is clear that the Government has not proved the allegation that he materially falsified his 1991, 1994, and 1997 applications.



Section 304(a) of the Controlled Substances Act (CSA) provides that "[a] registration pursuant to section 823 of this title to * * * dispense a controlled substance * * * may be suspended or revoked by the Attorney General upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section." 21 U.S.C. 824(a)(4). In making the public interest determination in the case of a practitioner, Congress directed that the following factors be considered:

(1) The recommendation of the appropriate State licensing board or professional disciplinary authority.

(2) The applicant's experience in dispensing * * * 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.

(5) Such other conduct which may threaten the public health and safety. 21 U.S.C. 823(f).

"[T]hese factors are considered in the disjunctive." Robert A. Leslie, 68 FR 15227, 15230 (2003). I may rely on any one or a combination of factors and may give each factor the weight I deem appropriate in determining whether to revoke an existing registration or to deny an application. Id. Moreover, I am "not required to make findings as to all of the factors." Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); (citing Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005)).

[[Page 51414]]

In this matter, while I have considered all of the factors, I conclude that it is not necessary to make findings with respect to factors one (the recommendation of the state licensing board), three (registrant's conviction record) and five (such other conduct which may threaten public health and safety). I find that the Government's evidence with respect to Registrant's experience in dispensing controlled substances (factor two) and his compliance with applicable Federal and State laws related to the distribution and dispensing of controlled substances (factor four) makes out a prima facie case that Registrant has committed acts which render his registration "inconsistent with the public interest." 21 U.S.C. 823(f), 824(a)(4). I will therefore order that his registration be revoked and that his pending application to renew his registration be denied.

Factors Two and Four--Registrant's Experience in Dispensing Controlled Substances and Compliance With Applicable Laws Related to Controlled Substances

Under a longstanding DEA regulation, a prescription for a controlled substance is not "effective" unless it is "issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice." 21 CFR 1306.04(a). This regulation further provides that "an order purporting to be a prescription issued not in the usual course of professional treatment * * * is not a prescription within the meaning and intent of [21 U.S.C. 829] and * * * the person issuing it, shall be subject to the penalties provided for violations of the provisions of law related to controlled substances." Id.; see also 21 U.S.C. 802(10) (defining the term "dispense" as meaning "to deliver a controlled substance to an ultimate user by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance") (emphasis added); Okla. Admin. Code 475:30-1-3(a) ("A prescription for a controlled dangerous substance to be effective must be issued for a legitimate medical purpose by a registered or otherwise authorized individual practitioner acting in the usual course of his/ her professional practice.").

As the Supreme Court recently explained, "the [CSA's] prescription requirement * * * ensures patients use controlled substances under the supervision of a doctor so as to prevent addiction and recreational abuse. As a corollary, [it] also bars doctors from peddling to patients who crave the drugs for those prohibited uses." Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United States v. Moore, 423 U.S. 122, 135, 143 (1975)).

Under the CSA, it is fundamental that a practitioner must establish and maintain a bonafide doctor-patient relationship in order to act "in the usual course of * * * professional practice" and to issue a prescription for a "legitimate medical purpose." Laurence T. McKinney, 73 FR 43260, 43265 n.22 (2008); see also Moore, 423 U.S. at 142-43 (noting that evidence established that physician "exceeded the bounds of 'professional practice,' " when "he gave inadequate physical examinations or none at all," "ignored the results of the tests he did make," and "took no precautions against * * * misuse and diversion"). The CSA generally looks to state law to determine whether a doctor and patient have established a bonafide doctor-patient relationship. See Kamir Garces-Mejias, 72 FR 54931, 54935 (2007); United Prescription Services, Inc., 72 FR 50397, 50407 (2007).\5\


\5\ However, on October 15, 2008, the President signed into law the Ryan Haight Online Pharmacy Consumer Protection Act of 2008, Public Law. 110-425, 122 Stat. 4820 (2008). Section 2 of the Act prohibits the dispensing of a prescription controlled substance "by means of the Internet without a valid prescription," and defines, in relevant part, the "[t]he term 'valid prescription' [to] mean[] a prescription that is issued for a legitimate medical purpose in the usual course of professional practice by * * * a practitioner who has conducted at least 1 in-person medical evaluation of the patient." 122 Stat. 4820 (codified at 21 U.S.C. 829(e)(1) & (2)). Section 2 further defines "[t]he term 'in-person medical evaluation' [to] mean[] a medical evaluation that is conducted with the patient in the physical presence of the practitioner, without regard to whether portions of the evaluation are conducted by other health professionals." Id. (codified at 21 U.S.C. 829(e)(2)(B)). These provisions do not, however, apply to Respondent's conduct.


Under the Oklahoma Board of Medical Licensure and Supervision's rule on the "[u]se of controlled substances for the management of chronic pain," "[a] medical history and physical examination must be obtained, evaluated and documented in the medical record." Okla. Admin. Code 435:10-7-11(1). Moreover, "[t]he medical record should document the nature and intensity of the pain, current and past treatments for pain, underlying or coexisting diseases or conditions, the effect of the pain on physical and psychological function and history of substance abuse." Id. The Oklahoma rule also requires, inter alia, that a "physician should discuss the risk and benefits of the use of controlled substances with the patient." Id. at 435:10-7- 11(3).

As found above, on two occasions, Registrant prescribed Darvocet-N 100 mg., a drug which includes propoxyphene, a schedule IV narcotic controlled substance, as well as Xanax (alprazolam) to an OBN Agent acting in an undercover capacity. Notably, during the first visit, Registrant did not ask the Agent whether she had any medical complaints. Rather, after engaging in small talk and asking for her address, Registrant asked the Agent: "So what do you want me to put you on?" While the Agent stated Xanax 2 mg, and told her she had been getting it from another doctor, Registrant did not even ask her if she had anxiety.

Moreover, Registrant then asked the Agent: "what else are you taking?" After the Agent replied that she "was taking Darvocet too," Registrant asked: "I think, are you having some pain?" While the Agent replied: "[e]very once in a while," Registrant did not ask the Agent any questions regarding "the nature and intensity of the pain," the "effect of the pain on [the Agent's] physical and psychological function," whether the Agent had been previously treated for pain, or whether she had a "history of substance abuse" as required under the Oklahoma rule. See Okla. Admin. Code 435:10-7-11(1). Moreover, while under the Oklahoma rule a physical examination must "be obtained," the transcript of the undercover visit contains no indication that Registrant performed a physical examination and developed a diagnosis. See id. I thus conclude that at the Agent's first visit, Registrant failed to establish a doctor-patient relationship with her. I further conclude that he lacked a legitimate medical purpose and acted outside of the usual course of professional practice in prescribing Xanax and Darvocet-N to her and thus violated Federal law. See 21 CFR 1306.04(a); 21 U.S.C. 841(a)(1).

The Xanax and Darvocet prescriptions Respondent gave the Agent at her second visit also violated Federal law. While at this visit, Registrant, after being told by the Agent (who was seeking an even larger quantity of the drug and was three weeks early in seeking the refill) that she had run out of Xanax, did discuss with her that she should not take more of the drug than he prescribed and explained that the drug is controlled "because people have a tendency to" take more than is prescribed, once again, he did not determine that the Agent had anxiety or another medical condition that might warrant a prescription for the drug.

Likewise, after telling the Agent to only take the Xanax three times per day, he then asked her if she "still need[ed]

[[Page 51415]]

the Darvocet?" The Agent answered "yes," but Registrant did not even ask her if she had pain, let alone ask her any questions regarding the nature and intensity of the pain, whether the Darvocet was helping to alleviate her pain, or how the pain was affecting her physical and psychological function. Accordingly, with respect to the Agent's second visit, I again conclude that Registrant failed to establish a doctor- patient relationship with her. I also conclude that Registrant lacked a legitimate medical purpose and acted outside of the usual course of professional practice in prescribing Xanax and Darvocet-N to her and violated Federal law. See 21 CFR 1306.04(a); 21 U.S.C. 841(a)(1).

As the forgoing demonstrates, Registrant has committed acts which "render his registration * * * inconsistent with the public interest." 21 U.S.C. 824(a)(4). I will therefore order that his registration be revoked and that any pending applications be denied.


Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as by 28 CFR 0.100(b), I hereby order that DEA Certificate of Registration, BF7430781, issued to Joe C. Fermo, M.D., be, and it hereby is, revoked. I further order that any pending application of Joe C. Fermo, M.D., to renew or modify his registration be, and it hereby is, denied. This Order is effective September 19, 2011.

Dated: August 5, 2011.

Michele M. Leonhart,

[FR Doc. 2011-21061 Filed 8-17-11; 8:45 am]


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