Arkansas Court Affirms Revocation of Pharmacy License in Pain Cream Cases

A divided division of the Arkansas Court of Appeals has affirmed a decision by the state’s Board of Pharmacy that revoked the permit and license of a pharmacy and an individual pharmacist where evidence before the Board showed that representatives of the pharmacy had cold called workers’ compensation claimants indicating that the claimants qualified for pain cream prescriptions that would be covered by workers’ compensation, then followed up with the claimants’ physicians to obtain their signatures on prescription forms [Curis Pharmacy (Sentrix Pharmacy & Disc., LLC) v. Arkansas State Bd. of Pharm., 2021 Ark. App. 500, 2021 Ark. App. LEXIS 528 (Dec. 8, 2021)]. In each instance, the pharmacy then billed the workers’ compensation carrier as much as $950 per tube of cream, although the carrier refused to pay, claiming the creams were medically unnecessary.

Background

In 2018, the Board received information from the Arkansas Insurance Department (AID) regarding an investigation it was conducting into the business practices of Sentrix and Kenneth Zielinski. Zielinski was the pharmacist in charge. Of specific concern to AID was the practice of representatives from Sentrix cold calling people who were recipients of workers’-compensation benefits, taking their information, contacting their doctors, filling prescriptions for them, and then billing the workers’ compensation carrier thousands of dollars for what was later deemed medically unnecessary medication.

AID provided the Board with the findings from three administrative review orders investigating the appellants’ conduct with three separate patients. The story was mostly the same for each one. All three patients suffered different work-related injuries: dehydration, shoulder/knee injury, and thumb injury. Sentrix contacted them and led them to believe that the pharmacy was affiliated with their workers compensation carrier. After collecting their information, Sentrix prepared “Patient Request” forms for each of the patients. The forms had language such as “Your patient is requesting a prescription for a Topical Pain Cream ….” One form also stated, “ATTN: PATIENT REALLY WANTS CREAM FOR PAIN PATIENT WILL CALL TODAY.”

These forms were sent to the patients’ doctors for their signatures. Two of the doctors signed the forms and returned them to Sentrix. Despite his signature being on the form, the third doctor denied ever signing the form or prescribing any pain cream. Sentrix prepared a compound topical pain cream for all three patients. The same cream was sent to all patients, even though each suffered from different work-related injuries.

Typically, Sentrix billed the carrier more than $900 a tube. After the carrier had consulted with the University of Arkansas Medical Sciences College of Pharmacy Evidence Based Prescription Drug Program (UAMS), the carrier informed Sentrix that the cream was excluded from coverage because it was not reasonable or necessary for any of the patients’ work injuries. Despite this notice, Sentrix continued to send refills of the cream to the patients and continued to bill the carrier.

Board Revokes Licenses

After a hearing, the Board found in relevant part that the appellants had committed (1) fraud, deceit, or misrepresentation in the practice of pharmacy and (2) unprofessional or dishonorable conduct in violation of Arkansas Code Annotated section 17-92-311(a)(1) and (a)(7) (Supp. 2021), respectively. The appellants’ licenses were revoked, and they appealed under the Arkansas Administrative Procedure Act. The circuit court affirmed and the appellants appealed to the Arkansas Court of Appeals.

Appellate Court Decision

Initially, the majority of the Court noted that it accorded great deference to the administrative agency’s expertise and gave the evidence its strongest probative force in favor of the agency’s findings. It reviewed the findings related to each patient and addressed the appellants’ argument that much of the “evidence” before the Board had been “hearsay upon hearsay.” The Court stressed, however, that in administrative hearings, the rules of evidence and procedure were relaxed. Indeed, said the court, hearsay is normally admissible in administrative proceedings if it is reliable and probative.

The majority said it was without question that the information in the administrative review orders was probative. It was also reliable, especially when compared against the script that the appellants admit using when soliciting patients. That script said that the claimants were “qualified for a non-narcotic topical pain cream which is covered 100% by workman’s compensation.” The majority concluded that it was not erroneous for the Board to review the administrative review orders, which were stipulated exhibits made part of the record, and reach a conclusion. The majority also stressed that the Court’s review was simple. If there was substantial evidence to support the agency’s decision, it must affirm the agency’s decision. The majority said that giving the evidence here its strongest probative force in favor of the agency’s ruling, which the Court was required to do, the Board’s findings and conclusions are supported. Accordingly, it was not erroneous to revoke Sentrix’s pharmacy permit and Zielinski’s pharmacy license.

Dissent

Judge Barrett, joined by Judge Vaught, dissented. Based upon what she said was a lack of evidence presented by the Board at the hearing, she would hold that substantial evidence failed to support the Board’s finding that Sentrix and Zielinski—by nature of his being the pharmacist in charge—misrepresented themselves as the claimants workers’-compensation carrier and that they filled a prescription that was not signed by the claimant’s treating physician.