Judge: Curtis A. Kin, Case: 22STCP02072, Date: 2023-10-26 Tentative Ruling

Case Number: 22STCP02072    Hearing Date: October 26, 2023    Dept: 82

            Petitioner Timothy Hunt, M.D. seeks a writ of mandate directing respondent Medical Board of California, Department of Consumer Affairs, State of California to reverse the revocation of his license to practice medicine.  

I.       Factual Background

             Petitioner Timothy Hunt, M.D. is a physician and orthopedic surgeon. (AR 5.) On November 22, 1995, respondent Medical Board of California (“Board”) issued to petitioner a license to practice medicine. (AR 2.)

            Between 2008 and 2013, petitioner and other physicians were part of a scheme to refer patients to Pacific Hospital for spinal and other surgeries and other medical services in exchange for kickbacks. (AR 4.) The parties to the conspiracy hid the receipt of illegal compensation through various written agreements and transactions, including a loan, a sublease that was substantially below market value, an option agreement, and a pharmacy dispensing agreement. (AR 4.) By January 2009, petitioner and other conspirators entered into an option contract whereby petitioner was paid $30,000 per month for referring patients to Pacific Hospital. (AR 4.)

            On August 24, 2018, in the federal case, United States of America v. Timothy James Hunt (No. CR 17-742-JLS-1), petitioner pled guilty to one felony count of conspiracy to commit (1) honest services mail and wire fraud, (2) interstate travel in aid of bribery, and (3) payment or receipt of kickbacks in connection with a federal healthcare program. (AR 3, 155-57.) Petitioner agreed to forfeit $3 million which petitioner admitted having obtained as part of the conspiracy. (AR 148-49.) Petitioner also agreed and admitted to a statement of facts in support of the guilty plead. (AR 159, 171-76.) The statement of facts was “not meant to indicate that petitioner provided any patients with substandard medical care or that any treatment he provided or prescribed was not medically necessary.” (AR 176.)

            On September 27, 2019, petitioner was sentenced to 24 months in prison and three years of supervised release. (AR 177.) After having served seven and a half months in federal prison and 13 months of home confinement, the balance of petitioner’ s sentence was reduced for good behavior. (AR 4.) Petitioner remains on supervised release, which is scheduled to end in July 2024. (AR 4.)

            Pursuant to Business and Professions Code § 2236.1, the Board suspended petitioner’s medical license effective November 12, 2019. (AR 59.) The Board filed an accusation against petitioner, which sought the revocation of his medical license based on his acceptance of kickbacks for patient referrals in violation of Business and Professions Code § 650, his engagement in dishonest and corrupt acts, and his conviction of a crime “substantially related to the qualifications, functions, or duties of a physician and surgeon.” (AR 46.)

            The administrative hearing took place before Administrative Law Judge (“ALJ”) Joseph D. Montoya on August 23, 2021. (AR 1.) Petitioner admitted he was in the wrong and expressed remorse. (AR 6.) Petitioner presented three physicians and a pastor as character witnesses who testified to his remorse and acceptance of full responsibility for his crime. (AR 6-8.) The three physicians testified about petitioner’s competence and their willingness to refer patients to petitioner, despite the conviction. (AR 6-8.)

            On September 22, 2021, the ALJ found cause to impose license discipline for petitioner’s conviction of a crime substantially related to the duties, qualifications, and functions of a physician and surgeon, his receipt for payment for patient referrals in violation of Business and Professions Code § 650, and his dishonest and corrupt acts. (AR 25.) In deciding the appropriate discipline based on the disciplinary guidelines of the Board, the ALJ found the following:

On balance, it is concluded that [petitioner] is not beyond redemption, and that he can be rehabilitated in a manner that will not endanger the public. He has been on the road to rehabilitation since he approached the authorities to resolve the criminal matter, and to enter a guilty plea. He has shown to his colleagues, and during the hearing that he has made progress in attaining the state of mind expected of one who has been rehabilitated. [Petitioner] has already paid a heavy price for his wrongdoing, and the weight of the evidence leads to the conclusion that he will never engage in such dishonesty again. At the same time, his skills as a physician can be salvaged by a disciplinary order that imposes less than outright revocation.

(AR 27.)

            The ALJ revoked petitioner’s license but stayed the revocation and placed him on probation for five years. (AR 27.) Petitioner’s license was suspended another six months “to send a clear message…that his misconduct is not countenanced by the Board.” (AR 27-28.) Petitioner was prohibited from engaging in the solo practice of medicine and from supervising physician assistants and advanced practice nurses. (AR 31, 33.) The ALJ ordered the appointment of a monitor to determine whether petitioner is billing appropriately. (AR 29-30.) Petitioner was ordered to take an ethics course and to complete 100 hours of community service within the first two years of probation. (AR 28, 32.) Petitioner was ordered to submit the accusation and the ALJ’s decision to any facility where he practices medicine. (AR 32.)

            On November 23, 2021, the Board issued an order declining to adopt the decision of the ALJ. (AR 13.) On February 9, 2022, the Board held a hearing regarding whether the proposed penalty should be modified. (AR 4.) On March 7, 2022, the Board entered its Decision after Non-Adoption, finding cause to revoke his license:

Here, [petitioner] was an active participant in a sophisticated conspiracy to defraud Medicare over a period of many years. Through his deceit for self-gain, he hid his crimes from his colleagues, who held him in high esteem and were shocked by his behavior. Moreover, he hid his illegal conduct from his patients and Medicare until he recognized that the conspiracy had been discovered by law enforcement. Despite knowing that what he was doing was wrong, he only came forward once he saw in the news that a co-conspirator had agreed to plead guilty to federal corruption charges.

[Petitioner] abused his position of trust as a physician to enrich himself and obtain over a million and a half dollars in illegal referral fees. While [petitioner] has taken steps to demonstrate he is on the road to rehabilitation, his conviction in September 2019 is relatively recent. [Petitioner] is still on parole, and he has not started making payments toward the forfeiture of three million dollars. In light of the above, the

Board has determined that [petitioner] has not demonstrated that financial strain would not prompt him to abuse his position of trust as a physician again. Consequently, his license must be revoked to protect the public.

(AR 1, 11-12.)

Due to the forfeiture order, petitioner lost his house. (AR 4.) Petitioner has not paid back the three million dollars. (AR 4-5.) Petitioner now works in the shipping and receiving department of a bakery. (AR 6.)

II.      Procedural History

             On June 2, 2022, petitioner filed a Verified Petition for Writ of Administrative Mandamus. On September 12, 2022, respondent filed a Return by Way of Answer to Petition for Writ of Mandamus. On June 20, 2023, petitioner filed an opening brief. On July 18, 2023, respondent filed an opposition. On August 2, 2023, petitioner filed a reply. The Court has received a hard copy of the administrative record.

III.     Standard of Review

CCP § 1094.5 is the administrative mandamus provision providing the procedure for judicial review of adjudicatory decisions rendered by administrative agencies. Under CCP § 1094.5(b), the pertinent issues are whether the respondent has proceeded without jurisdiction, whether there was a fair trial, and whether there was a prejudicial abuse of discretion. An abuse of discretion is established if the agency has not proceeded in the manner required by law, the decision is not supported by the findings, or the findings are not supported by the evidence. (CCP § 1094.5(b).)

            In the opening brief, petitioner discusses two standards of review that may be applicable to a § 1094.5 proceeding: independent judgment and abuse of discretion. (OB at 7:18-10:3.)

“Where the decision of a statewide administrative tribunal lacking constitutional authority to exercise judicial functions substantially affects fundamental rights, particularly the right to practice one's profession or trade, courts must exercise their independent judgment in determining whether the administrative findings are supported by the weight of the evidence. [Citations.]” (Cadilla v. Board of Medical Examiners (1972) 26 Cal.App.3d 961, 966.)

“However, the propriety of a penalty imposed by an administrative agency is a matter vested in the discretion of the agency and its decision may not be disturbed unless there has been a manifest abuse of discretion. [Citations.]” (Ibid.; see also Williamson v. Board of Medical Quality Assurance (1990) 217 Cal.App.3d 1343, 1347.) If reasonable minds can differ about the propriety of the disciplinary action, there is no abuse of discretion. (County of Los Angeles v. Civil Service Commission (1995) 39 Cal.App.4th 620, 634.)

Here, there is no dispute about the administrative findings. At the outset of the hearing before the Board, petitioner stipulated to the truth of paragraphs 11 through 18 in the First Amended Accusation against petitioner. (AR 3.) Paragraph 14, the truth to which petitioner stipulated, alleged that petitioner made the following admissions in connection with his guilty plea in the federal criminal case:

Beginning in or around June 2008, through at least February 2013, [petitioner] and his co-conspirators agreed to participate and did, in fact, participate in an illegal arrangement to pay and receive kickbacks in exchange for referring surgeries and other patient-related services [to co-conspirator owned healthcare entities]. As part of the arrangement, [petitioner] agreed with [his co-conspirators] to receive proceeds of the kickback scheme, and subsequently participate in financial transactions over $10,000 involving proceeds from the kickback scheme….

Between 2008 and February 2013, [petitioner] referred patients for surgeries and services that resulted in approximately $16 million dollars billed to state and/or federal health care programs. Co-conspirators paid [petitioner] approximately $3.4 million dollars during this period, a substantial portion of which constitute illegal kickbacks.

(AR 45.) The Board made factual findings regarding petitioner’s conviction that were consistent with petitioner’s stipulation. (AR 4.) Based on petitioner’s stipulation and the Board’s findings, the Board found cause to discipline petitioner’s license based on the charges set forth in the First Amended Accusation. (AR 9-10, 46.)

Whether petitioner is subject to discipline is not in dispute here. (OB at 7:8-9 [“In this case, Dr. Hunt does not dispute that cause existed to discipline his medical license based on his 2018 felony conviction for conspiracy to pay and receive kickbacks for patient referrals”].) The parties dispute the propriety of revocation of petitioner’s medical license. Accordingly, the Court reviews the revocation for manifest abuse of discretion.

IV.     Analysis

            In assessing the propriety of a penalty, the “overriding consideration … is the extent to which the employee's conduct resulted in, or if repeated is likely to result in, ‘[h]arm to the public service.’ [Citations.] Other relevant factors include the circumstances surrounding the misconduct and the likelihood of its recurrence.” (Skelly v. State Personnel Bd. (1975) 15 Cal.3d 194, 218.) “The revocation or suspension of a license is not penal, but rather, the Legislature has provided for such to protect the life, health and welfare of the people at large ….” (Furnish v. Board of Medical Examiners (1957) 149 Cal.App.2d 326, 331.)

            It is undisputed that the Board was entitled to find that the ALJ’s recommended discipline was insufficient. (See Gov. Code § 11517(c)(2)(E) [allowing agency to reject proposed decision of administrative law judge]; Alford v. Department of Motor Vehicles (2000) 79 Cal.App.4th 560, 566 [same].) However, the Board’s decision to do so must be supported by the findings. (CCP § 1094.5(b).)

            Here, the Board found that petitioner entered into an arrangement with physicians and others to receive payments in exchange for referring patients to receive medical services at Pacific Hospital. (AR 4.) Prior to entering into the scheme, petitioner was under financial strain after being unable to afford the price of his father’s medical practice. (AR 5.) When a part owner of Pacific Hospital offered petitioner a loan and a place to see patients, petitioner viewed the offer as a “life raft.” (AR 5.) When petitioner did not receive a portion of the loan, the majority owner got involved. (AR 5.) Even though petitioner did not completely trust the majority owner and knew that “something was not right,” petitioner “let his desperation drive his decision-making” and entered into the arrangement. (AR 5-6.) Respondent approached prosecutors to work out a plea only after a co-conspirator was arrested. (AR 3.)

            Due to the forfeiture order in the federal criminal case, petitioner lost his house, resulting in his wife and him living in a mother-in-law apartment. (AR 4.) Petitioner has not paid back the $3 million owed under the forfeiture order entered in the federal criminal case. (AR 4-5.) Petitioner now works in the shipping and receiving department of a bakery. (AR 6.)

            Based on these facts, the Board had grounds to find that petitioner defrauded Medicare over many years. (AR 11.) The Board was also entitled to conclude that, if petitioner were allowed to keep his medical license, petitioner’s financial troubles could again prompt him to abuse his position as a physician. (See AR 11.)

“Protection of the public shall be the highest priority for the Medical Board of California in exercising its licensing, regulatory, and disciplinary functions. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount.” (Bus. & Prof. Code § 2001.1.) A reasonable person could find that, in order to protect the public, the Board was entitled to revoke petitioner’s license. (See Yazdi v. Dental Board of California (2020) 57 Cal.App.5th 25, 34 [“The fact that reasonable minds might differ as to the propriety of the penalty imposed fortifies the conclusion that the administrative body acted within its discretion”].)

Although petitioner expressed remorse, the genuineness of which was corroborated by character witnesses and which respondent does not appear to dispute (AR 6-8), “[r]emorse does not demonstrate rehabilitation.” (In re Conflenti (1981) 29 Cal.3d 120, 124.) “[A] truer indication of rehabilitation will be presented if petitioner can demonstrate by his sustained conduct over an extended period of time….” (Ibid.) Although petitioner is complying with the terms of his supervised release, which is scheduled to end in July 2024 (AR 4-5), such good behavior while under supervision is entitled to less weight. (AR 4; In re Gossage (2000) 23 Cal.4th 1080, 1099.)

Petitioner contends that the Board’s decision violates Topanga. (OB 11:23-12:8.) In Topanga Assn. for a Scenic Community v. County of Los Angeles (1974) 11 Cal.3d 506, the Supreme Court held that “implicit in [Code of Civil Procedure] section 1094.5 is a requirement that the agency which renders the challenged decision must set forth findings to bridge the analytic gap between the raw evidence and ultimate decision or order.” (Topanga, 11 Cal.3d at 515.) The Topanga Court explained that “among other functions, … findings enable the reviewing court to trace and examine the agency's mode of analysis.” (Id. at 516.)

“Administrative agency findings are generally permitted considerable latitude with regard to their precision, formality, and matters reasonably implied therein.” (Southern Pacific Transportation Co. v. State Bd. of Equalization (1987) 191 Cal.App.3d 938, 954; see also Oduyale v. Cal. State Bd. of Pharmacy (2019) 41 Cal.App.5th 101, 113 [Topanga “does not require the Board to outline all the reasons it opted not to impose a lesser form of discipline. It is only required to justify the penalty imposed, including ‘a statement of the factual and legal basis of the decision’”].)

Petitioner contends that the Board did not establish that the $3 million owed under the forfeiture order could cause petitioner to use his license to commit further financial crimes “absent any evidence of how and when he would be required to pay the forfeiture sum to the government, whether through installments based on his income or otherwise.” (OB 12:13-19.) Petitioner also contends that the Board failed to explain why his supervised release status would not reduce the risk that he would commit further financial crimes or why the restrictions on practice proposed by the ALJ were not sufficient to address the Board’s concerns of recidivism. (OB at 13:4-12.)

The Court disagrees. In its detailed, 11-page decision, the Board sufficiently explained its cause for concern regarding petitioner’s motivation to commit financial crimes. The Board set forth the financial difficulties petitioner was experiencing before entering into the arrangement to accept payments in exchange for referrals and petitioner’s current financial difficulties which could encourage him to use his license to commit financial crimes yet again. While the monitoring and restrictions recommended by the ALJ or petitioner’s current supervised release status may render it more difficult for respondent to abuse his license, the Board was not required to address why alternative forms of discipline were not appropriate. The Board was only obligated to justify the revocation of petitioner’s license. Based on petitioner’s current failure to pay any portion of the forfeiture order, the Board was entitled to revoke his license to ensure that petitioner would not be placed in a position where he might again be tempted to abuse a position of trust and act upon that temptation to the public’s detriment.  The decision complies with Topanga.

V.      Conclusion

            The petition is DENIED. Pursuant to Local Rule 3.231(n), respondent shall prepare, serve, and ultimately file a proposed judgment.