Joseph L. Fink, BSPharm, JD

A pharmacist who does not attend his revocation hearing later appeals the decision against him.

When a board of pharmacy has commenced proceedings to revoke a pharmacist’s license to practice in the state, and the pharmacist declines to attend the hearing on the matter, may the board proceed with the revocation and will that administrative action withstand judicial review?

The Department of Health in a state in the Northwest launched an investigation regarding prescription dispensing and billing practices at a pharmacy and one of the pharmacists practicing there voluntarily contacted the agency to provide information. He met with officials from both the state agency and the US Department of Health and Human Services (HHS), describing the fraudulent practices and medications involved. However, he did not implicate himself in the scheme.

During further investigation it came to light that this pharmacist was potentially involved in the prescription fraud schemes. This information was referred to the board of pharmacy and the board approved an investigation of his activities. Later, he agreed to meet with agency and HHS investigators again, and during this session he was presented with information that implicated him in the scheme. The agency’s investigator presented the pharmacist with a packet explaining the investigation, informing him of his rights, and pointing out that any written statement he made could be used in disciplinary proceedings. The pharmacist signed a document entitled “Respondent’s Written Statement Notice” informing him that:

“You may consult with an attorney, at your expense, prior to providing a written statement. Your statement may be used in a hearing if disciplinary action is deemed necessary regarding this matter.”

Five days later the pharmacist again met with the investigators where he reviewed an 11-page summary of his oral statement. He reviewed and modified that document, signed the statement at the end, and initialed on each page this statement: “I have received no threats, promises or coercion in preparing this statement. I declare under penalty of perjury under the law of (this state) that the foregoing is true and correct and I will so testify.”

The pharmacist was charged with unprofessional conduct. He denied the charges and requested a hearing. During the prehearing discovery process, he refused to appear at a deposition session despite having been served with a subpoena, claiming that federal prosecutors had granted him immunity. However, he was unable to produce any evidence supporting the existence of the immunity agreement. He subsequently made a motion to suppress all oral and written statements he had made to the investigators. That motion was denied.

There were a variety of other hearingrelated motions and activities, with the pharmacist prevailing on none of them. The board held a hearing and the pharmacist refused to attend and participate. Six weeks later, the board ordered revocation of his license to practice in the state, appending an order that he could not apply for reinstatement for 20 years.

Additionally, the pharmacist was told that if he wished to ask the board to vacate the order he must do so within 7 days. Two weeks later, he filed an action in the local state court requesting that his case go directly to the court of appeals for judicial review. The local court denied that request and subsequently affirmed the decision of the board.

The pharmacist filed an appeal with the state court of appeals, seeking review of the lower court’s decision as well as the action of the board.

The decisions of the board of pharmacy and the lower court were upheld on appeal.

The court began by emphasizing 2 dual purposes of disciplinary proceedings— to protect the public and to protect the standing of professions in the eyes of the public. It also emphasized that the burden of challenging the decisions rested fully with the pharmacist.

The board did have authority under state law to enter a default judgment against the pharmacist when he failed to appear at the hearing and participate. Once such a judgment was entered he had to move to vacate it within 7 days, which he did not do. Therefore, he did not exhaust all administrative remedies available to him, a prerequisite for judicial review. Accordingly, the court ruled in favor of the agency and upheld the ruling of the lower court. The appellate court also concluded that the board, in fact, did have clear and convincing evidence to support the allegation that the pharmacist engaged in unprofessional conduct when pursuing the prescription fraud scheme.

As a final note, the pharmacist asked the US Supreme Court to review his case, and the nation’s highest court declined to do so.

Dr. Fink is professor of pharmacy law and policy and Kentucky Pharmacists Association Endowed Professor of Leadership at the University of Kentucky College of Pharmacy, Lexington.

Articles

Revocation of Pharmacist's License Reviewed by Appellate Court

A nurse being investigated for prescription fraud objects to the release of her medication records.

	When a pharmacy releases the prescription medication records of a patient covering a 10-year period of time to a local law enforcement officer, does that violate the Health Insurance Portability and Accountability Act (HIPAA) or a fiduciary duty that the pharmacy has to maintain such records as confidential? Further, should the pharmacy be held liable for intentional infliction of emotional distress in conjunction with the release of patient-specific information?

	This case arose in a Southwestern state where the patient was licensed as a registered nurse. She had experienced a variety of health challenges and been prescribed various federal legend medications for disorders. One legitimate prescription for Soma was issued by a physician with whom she was having a romantic affair, which she subsequently ended. Later, when she sought a refill of the prescription, the pharmacist called the physician to verify only to be told that he had no knowledge of the prescription or the patient.

	This was reported to the local police department and a police officer was assigned to investigate the matter. As part of the investigation, the officer requested the patient’s medication records from the location of the national pharmacy chain where the refill had been requested. Those records were released to him.

	The officer confronted the patient and interrogated her about possible prescription fraud. His investigatory activities led to the patient being terminated from her position as a nurse. The officer engaged in a variety of improprieties as part of pursuing the investigation and he ultimately was removed from the case. In fact, the police department issued a “To Whom It May Concern” letter stating that the “original allegations of prescription fraud…are unfounded.” It continued by stating that the “officer made some errors of judgment and incorrectly disclosed information during his investigation....”

	Suffering a variety of consequences such as “loss of her employment, damage to her reputation, and emotional distress resulting in loss of sleep, weight loss, loss of appetite, nightmares, anxiety, and depression,” she filed a lawsuit in federal court against a variety of parties, including the pharmacy chain. With regard to the pharmacy, 3 legal theories were advanced on which the plaintiff hoped to recover—violation of the federal HIPAA statute, breach of a fiduciary duty owed to patients to hold their medication-related information confidential and protect their privacy, and intentional infliction of emotional distress.

	The defendant pharmacy chain moved to have the claims dismissed.

	All claims against the pharmacy chain were dismissed by the court.

	Turning first to the HIPAA-based allegation, although the plaintiff alleged that she had an “absolute right to have her medical records and prescription history protected and never disclosed” to any third party, the court pointed to several relevant provisions in the federal regulations implementing the statute. One regulation specified that “A covered entity may disclose protected health information for a law enforcement purpose to a law enforcement official. . . .” Another regulation directed that “A covered entity may disclose to a law enforcement official protected health information that the covered entity believes in good faith constitutes evidence of criminal conduct that occurred on the premises of the covered entity.” Based on those provisions, the first allegation was dismissed.

	With regard to the allegation that the pharmacy had a “fiduciary duty to protect the privacy and confidential medical records” of patients at the pharmacy, the court first pointed to a provision in state statutes directing that a pharmacy keep prescription records “open for inspection at all times by... officers of the law in performance of their duties.” A slightly different statutory provision requires that health care providers disclose medical records “without the patient’s written authorization as otherwise required by law….” A final statute provides immunity for disclosure of medical records in good faith and establishes a presumption of good faith. The court found that the staff at the pharmacy chain acted in good faith so this second claim was dismissed.

	The last claim was for intentional infliction of emotional distress. To support such a claim, the plaintiff must allege that the defendant intentionally caused severe emotional distress by extreme and outrageous conduct. An earlier court opinion had stated that “The element of extreme and outrageous conduct requires that the plaintiff prove defendant’s conduct exceeded all bounds usually tolerated by decent society and caused mental distress of a very serious kind.” This court did not find the action of the staff in the pharmacy to rise to that level, so the third argument was also dismissed.

Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.

HIPAA-Protected Patient Information Disclosure to Law Enforcement

When a pharmacist is terminated, the nature of her employment contract comes into question.

	When a pharmacist receives an offer of employment in a letter from a prospective employer that outlines a variety of terms of employment, does that constitute a contract of employment negating the traditional rule applicable in that state that most employment relationships are employment-at-will?

	A physician in a Southwestern state sent a letter to a pharmacist who had been discussing the possibility of employment at a community clinic. The letter had several relevant provisions. First, it said “on behalf of (the family practice) we look forward to having you join us. You will be a welcomed addition to the clinic and the community. This offer is pending final contract review and approval.” Second, it stated “this letter will act as a binding agreement between (the family practice) and (the pharmacist) until final contract negotiations are complete. By signing this letter you acknowledge acceptance of the opportunity as well as recognize all recruiting efforts for this position will be terminated and no other pharmacists will be considered. Please sign below and immediately fax to…” The pharmacist did countersign this letter and transmitted the document back to the family practice. For purposes of this legal action both parties agreed that the document was authentic.

	About 11 months after starting employment, the pharmacist filed suit against the family practice clinic for terminating her, alleging breach of the employment agreement and seeking contract-based damages plus an award equal to the value of services provided and damages for “detrimental reliance,” ie, an order from the court that the other party perform its obligations under the contract.

	The pharmacist moved for summary judgment, asking the judge to rule that there was no material fact at issue that indicated a need for a jury trial. Often a motion for summary judgment is motivated by a desire to avoid the time and expense of a trial when one is not necessary. In response to that motion by the pharmacist, the clinic argued that the pharmacist was an at-will employee and, as a result, could be terminated at any time for any reason or even for no stated reason.

	The trial court granted the plaintiff pharmacist’s motion for summary judgment on the issue of liability. That was followed 18 months later by a trial without a jury on the issue of the amount of damages owed. The judgment was that the clinic owed the pharmacist $16,000 for post-employment lost wages, $4000 for relocation expenses, $6000 for attorney’s fees, and $5000 in attorney’s fees for appeal—a total of $31,000.

	The employer clinic filed an appeal with a state appellate court seeking review of the summary judgment decision of the trial court.

	The appellate court ruled that the written agreement exchanged by the parties in the letter did not overcome the presumption in state law that the employment relationship was an employment-at-will relationship. As a result, either party could terminate the relationship at any time for any reason without liability for lost wages. The court did allow the pharmacist to recover the relocation expenses, but disallowed the award of attorney’s fees, sending the case back for a new trial on that issue within the case.

	The law of the state in the area of employment contains a strong presumption of employment-at-will relationships. This presumption can only be overcome by the employer unequivocally indicating “a definite intent to be bound not to terminate the employee except under clearly specified circumstances.” While the pharmacist contended that the employer intended to “make a binding contract of employment…for no less than a year,” the court pointed out that “absent a specific agreement to the contrary, employment may be terminated by the employer or the employee for good cause, bad cause, or no cause at all.”

	Citing prior cases, the court pointed to this language as not overcoming the employment-at-will presumption: As long as you’re doing your job you will not be terminated unless there is “good reason or good cause to fire you.” Past annual renewals of the employment relationship were not an unequivocal indication of the employer’s intent to be bound for a certain period of time. In this case, the pharmacist pointed to this wording—“$ 100,000 annual salary” plus “1 week paid vacation 1st year, 2 weeks the 2nd”&mdash;as indicating that the employment relationship was to run for at least 2 years. The court disagreed, ruling that the terms included in the letter were “insufficient to overcome the presumption” that it was an at-will employment relationship.

	Adding to the significance of this case discussion is the fact that 43 of the 50 states follow the employment-at-will doctrine. While interpretations may vary slightly from jurisdiction to jurisdiction, a familiarity with this important concept is important.