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

RESOURCES > Federal Register Notices > Registrant Actions - 2018 > Richard Hauser, M.D.; Decision and Order

Registrant Actions - 2018

[Federal Register Volume 83, Number 109 (Wednesday, June 6, 2018)]
[Pages 26308-26310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12138]


Drug Enforcement Administration

Richard Hauser, M.D.; Decision and Order

On September 26, 2017, the Acting Assistant Administrator, Diversion Control Division, Drug Enforcement Administration (DEA), issued an Order to Show Cause to Richard Hauser, M.D. (Registrant), of Clear Lake, Iowa. The Show Cause Order proposed the revocation of Registrant's DEA Certificate of Registration No. BH2140692 "pursuant to 21 U.S.C. 824(a)(5)." Government Exhibit (GX) 2 to Government's Request for Final Agency Action (RFAA), at 1. For the same reason, the Order also proposed the denial of "any pending application to modify or renew such registration." Id.

With respect to the Agency's jurisdiction, the Show Cause Order alleged that Registrant is the holder of Certificate of Registration No. BH2140692, pursuant to which he is authorized to dispense controlled substances as a practitioner in schedules II through V, at the registered address of Hauser Clinic Consultation Services, 308 14th Street, Clear Lake, Iowa. Id.

Regarding the substantive ground for the proceeding, the Show Cause Order alleged that on April 28, 2017, the Office of the Inspector General for the U.S. Department of Health and Human Services (HHS) notified Registrant of his "mandatory exclusion from participation in all Federal health care programs for a minimum period of five years pursuant to 42 U.S.C. 1320a-7(a)" as a result of his guilty plea in the United States District Court for the Southern District of Iowa to two counts of Health Care Fraud in violation of 18 U.S.C. 1347. Id. at 2. As a result, the Order asserted that Registrant's "[m]andatory exclusion from Medicare is an independent ground for revoking a DEA registration pursuant to 21 U.S.C. 824(a)(5)." Id. The Order further contended that, although Registrant's underlying conviction is "unrelated to [Registrant's] handling of controlled substances, DEA has nevertheless found that the underlying conviction forming the basis for a registrant's exclusion from participating in federal health care programs need not involve controlled substances for revocation under 21 U.S.C. 824(a)(5)." Id. (citations omitted).

The Show Cause Order notified Registrant of (1) his right to request a hearing on the allegations or to submit a written statement in lieu of a hearing, (2) the procedure for electing either option, and (3) the consequence for failing to elect either option. Id. at 2-3 (citing 21 CFR 1301.43). The Show Cause Order also notified Applicant of his right to submit a corrective action plan. Id. at 3-4 (citing 21 U.S.C. 824(c)(2)(C)).

The Government states that on October 4, 2017, a DEA Diversion Investigator (DI) served Registrant with a copy of the Show Cause Order. RFAA, at 3 (citing Declaration of DI attached as GX 4). Specifically, a DI assigned to the St. Louis Field Division's Des Moines Resident Office stated in a declaration that he was advised by Registrant's Attorney that Registrant could be served at his residence at 2310 20th Street, SW,

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Mason City, Iowa. GX 4, at 1-2. The DI then stated that he traveled to that location, verified Registrant's identity, and "handed him a copy of the September 26, 2017 Order to Show Cause on October 4, 2017." Id. at 2.

On February 9, 2018, the Government forwarded its Request for Final Agency Action and evidentiary record to my Office. In its Request, the Government represents that Registrant "has not requested a hearing or made any other filings in this matter." RFAA, at 3. Based on the Government's representation and the record, I find that more than 30 days have passed since the Order to Show Cause was served on Registrant, and he has neither requested a hearing nor submitted a written statement in lieu of a hearing. See 21 CFR 1301.43(d). Accordingly, I find that Registrant has waived his right to a hearing or to submit a written statement and issue this Decision and Order based on relevant evidence submitted by the Government. See id. I make the following findings.

Findings of Fact

Registrant is a physician who is registered with the DEA as a practitioner in schedules II-V pursuant to Certificate of Registration BH2140692, at the registered address of Hauser Clinic Consultation Services, 308 14th Street, Clear Lake, Iowa.\1\ Respondent's DEA Certificate of Registration (attached to RFAA as GX 1). Although not alleged in the Show Cause Order, I also find that Registrant is the holder of DATA-Waiver Identification Number XH2140692, see id., which authorizes Registrant to dispense or prescribe schedule III-V narcotic controlled substances which "have been approved by the Food and Drug Administration . . . specifically for use in maintenance or detoxification treatment" for up to 100 patients. 21 CFR 1301.28(a) & (b)(1)(iii). Registrant's DEA registration and DATA-Waiver authority do not expire until October 31, 2019. Id.


\1\ In his January 24, 2018 Declaration, the DI stated that Registrant "indicated that he would surrender his DEA Certificate of Registration, but has thus far failed to do so." GX 4, at 2. Likewise, the Government stated in its RFAA (dated Feb. 8, 2018) that Registrant had not surrendered his DEA registration. RFAA, at 2. Thus, I find that the record reflects that Registrant has not surrendered his DEA registration, despite any prior statement by him of his intention to do so.


On October 19, 2016, Registrant entered a guilty plea in the United States District Court for the Southern District of Iowa to a criminal information charging him with two counts of Health Care Fraud in violation of 18 U.S.C. 1347.\2\ As part of his plea, Registrant entered into a plea agreement in which he admitted to knowingly executing a scheme with the intent to defraud the State of Iowa Medicaid program (hereinafter "Iowa Medicaid") and Wellmark Blue Cross and Blue Shield (hereinafter "Wellmark") into paying him for the delivery of healthcare services that he did not actually perform between November 2011 and December 2012. See GX 3, at 2-6. Specifically, in his role as a board-certified psychiatrist, Registrant "up-coded" his billing to a more expensive (and unperformed) service than the service he actually performed for the purpose of receiving a higher reimbursement from Iowa Medicaid and Wellmark. See id. at 4-6. In his plea agreement, Registrant admitted that Wellmark "over-reimbursed" him "as a result of his [fraudulent] conduct" by a net amount of $25,965.72. Id. at 6. Due to similarly fraudulent conduct, Registrant also admitted that Iowa Medicaid "over-reimbursed" him by $4,913.60. Id. In exchange for his guilty plea, the Government agreed to recommend that Registrant receive credit for acceptance of responsibility pursuant to United States Sentencing Guideline Sec. 3E1.1. Id. at 8.


\2\ See Oct. 19, 2016 Plea Agreement, attached as GX 3 to RFAA, at 1. In its RFAA, the Government states that Registrant "entered a guilty plea" on October 19, 2016, citing "Exhibit 3 (October 19, 2016 Guilty Plea)." However, Exhibit 3 to the RFAA is only the plea agreement, establishing Registrant's agreement to enter into a guilty plea but not when he entered the plea nor when the court accepted it. I have reviewed the publicly available docket for this case, and it states that the plea agreement was accepted on October 19, 2016. Thus, I take official notice that Registrant in fact entered his guilty plea (and that the court accepted the plea) on October 19, 2016.

Under the Administrative Procedure Act (APA), an agency "may take official notice of facts at any stage in a proceeding--even in the final decision." U.S. Dept. of Justice, Attorney General's Manual on the Administrative Procedure Act 80 (1947) (Wm. W. Gaunt & Sons, Inc., Reprint 1979). In accordance with the APA and DEA's regulations, Registrant is "entitled on timely request to an opportunity to show to the contrary." 5 U.S.C. 556(e); see also 21 CFR 1316.59(e). To allow Registrant the opportunity to refute the facts of which I take official notice, Registrant may file a motion for reconsideration within 15 calendar days of service of this order which shall commence on the date this order is mailed.


On February 28, 2017, a federal court entered judgment and sentenced Registrant to a term of imprisonment of two months on each count, but provided that the sentences would "be served concurrently." United States v. Hauser, No. 16-CR-00157, "Judgment in Criminal Case" (S.D. Iowa filed Feb. 28, 2017), at 2.\3\ The sentencing judge also ordered Registrant to make restitution payments in the amounts of $25,965.72 and $4,913.60 to Wellmark and to Iowa Medicaid, respectively, in addition to a $200 assessment. Id. at 5-7. The judge further imposed on Registrant a term of supervised release for three years after the conclusion of his sentence. Id. at 3.


\3\ The Government did not include a copy of the final judgment in Registrant's criminal case. Consequently, I take official notice of the facts set forth in this publicly available final judgment under the authority already set forth supra in footnote 2.


The record also includes an April 28, 2017 letter from HHS notifying Applicant that he was "being excluded from participation in any capacity in the Medicare, Medicaid, and all Federal health care programs as defined in section 1128B(f)" of the SSA "for the minimum statutory period of five years." Attachment to GX 4 (hereinafter HHS Letter or HHS Ltr), at 1 (emphasis in original). The letter explained that Registrant was being excluded "due to [his] conviction . . . in the United States District Court for the Southern District of Iowa, of a criminal offense related to the delivery of an item or service under the Medicare or a State health care program." Id. The letter states that "[t]his action is being taken under section 1128(a)(1) of the [SSA] \4\ and is effective" on May 18, 2017. Id. (citing 42 U.S.C. 1320a-7(a)).\5\


\4\ Section 1128(a)(1) of the SSA is codified at 42 U.S.C. 1320a-7(a)(1).

\5\ In his Declaration, the DI stated that when he took over the investigation, he noticed that "the case file contained an April 28, 2017 letter from" HHS to Registrant. GX 4, at 1. To authenticate the HHS Letter, the DI "verified with the prior case agent that this was a true and correct copy of the exclusion letter that he received" and then attached it to his Declaration. Id. The Declaration in the record reflects no other statements establishing the authenticity or accuracy of the HHS Letter. Nor does the record contain a declaration from the DI who actually received the HHS Letter. However, I have reviewed the official website of HHS, which contains a publicly available verification of mandatory exclusions that reflects the same (1) Registrant name, (2) address, (3) exclusion type ("1128(a)(1)--Program-Related Conviction"), and (4) exclusion date (May 18, 2017) as in the HHS Letter attached to the Declaration. I take official notice of the foregoing facts set forth on the HHS official website regarding Registrant's mandatory exclusion (pursuant to the authority set forth supra in footnote 2), and I find that it sufficiently corroborates the HHS Letter attached to the DI's Declaration for me to accept the HHS Letter into the record as a true and correct copy of the HHS Letter sent to Registrant and as an accurate reflection of the mandatory exclusion that HHS imposed on Registrant.



Pursuant to 21 U.S.C. 824(a)(5), the Attorney General is authorized to suspend or revoke a registration issued under section 823 of Title 21, "upon a finding that the registrant . . . has been excluded . . . from participation in a program pursuant to section 1320a-7(a) of Title 42." Under Sec. 1320a-7(a)(1), HHS is required to exclude from participation

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in any federal health care program any individual who has been convicted of a criminal offense "related to the delivery of an item or service under [42 U.S.C. 1395 et seq.] or under any State health care program." The Agency has long held that the underlying conviction forming the basis for a registrant's mandatory exclusion from participation in federal health care programs need not involve controlled substances for the Agency to revoke a DEA registration pursuant to Sec. 824(a)(5). E.g., Orlando Ortega-Ortiz, M.D., 70 FR 15122, 15123 (2005); Juan Pillot-Costas, M.D., 69 FR 62084, 62085 (2004); Daniel Ortiz-Vargas, M.D., 69 FR 62095, 62095-62096 (2004); KK Pharmacy, 64 FR 49507, 49510 (1999); Stanley Dubin, D.D.S., 61 FR 60727, 60728 (1996); Nelson Ramirez-Gonzalez, M.D., 58 FR 52787, 52788 (1993).

Here, Registrant was convicted of two counts of felony Health Care Fraud related to billing for services that were not rendered. The Agency has previously held that a mandatory exclusion based on a felony fraud conviction for overbilling warranted revocation of a Registrant's registration pursuant to 21 U.S.C. 824(a)(5). E.g., Johnnie Melvin Turner, M.D., 67 FR 71203, 71203-71204 (2002) (revocation where mandatory exclusion was based on guilty plea to one felony count of mail fraud "by billing for services that were not rendered"); Dubin, 61 FR at 60728 (revocation where mandatory exclusion "based upon fraudulent billing"); Ramirez-Gonzalez, 58 FR at 52788 (revocation where mandatory exclusion based on submission of false claims). Moreover, Registrant has failed to come forward with any evidence explaining or mitigating his overbilling conduct or otherwise explaining why his registration should not be revoked, and the record reflects no such evidence. See Joseph M. Piacentile, M.D., 62 FR 35527, 35528 (1997) (revoking DEA registration where Registrant "did not offer any evidence into the record regarding why his registration should not be revoked" pursuant to Sec. 824(a)(5)).

Based on the 2017 HHS letter, I find that the evidence shows that HHS excluded Registrant from participation in any federal health care program based on his federal convictions for health care fraud related to overbilling. Registrant has thus been excluded pursuant to the mandatory exclusion provisions of 42 U.S.C. 1320a-7(a), and I hold that this unchallenged basis for his mandatory exclusion is sufficient to warrant revocation of his DEA registration pursuant to 21 U.S.C. 824(a)(5).

Accordingly, I will order that his registration be revoked and deny any pending applications to renew or to modify his registration, as requested in the Show Cause Order. Order to Show Cause, at 1. Finally, because Registrant's DATA-Waiver authority is contingent on Registrant being a practitioner with a valid DEA registration, see 21 U.S.C. 823(g)(2)(A); 21 CFR 1301.28(a), I will revoke his DATA-Waiver authority as well.


Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as 28 CFR 0.100(b), I order that DEA Certificate of Registration No. BH2140692 and DATA-Waiver Identification Number XH2140692, issued to Richard Hauser, M.D., be, and they hereby are, revoked. I further order that any pending application of Richard Hauser to renew or to modify the above registration, be, and it hereby is, denied. This Order is effective July 6, 2018.

Dated: May 25, 2018.

Robert W. Patterson,
Acting Administrator.

[FR Doc. 2018-12138 Filed 6-5-18; 8:45 am]


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