Judge Curtis A. Kin, Case Number: 22STCP02635, Date: 2024-02-13 Tentative Ruling

Petitioners Po Long Lew, D.O. and Wellcare Comprehensive Medical Group, A Medical Professional Corporation petition for a writ of mandate directing respondent Michelle Baass, as Director of the California Department of Health Care Services (“DHCS” or “Department”) to set aside and vacate orders of the Department dated May 11, 2022 and March 30, 2023 related to petitioners’ suspension from participation in the Medi-Cal program.

Petitioner Po Long Lew, D.O., owns and operates petitioner Wellcare Comprehensive Medical Group (“Wellcare”), a family medicine practice in Rosemead, California. (AR 46, 51.) Dr. Lew also works as a physician in the practice and provides regular medical services to patients. In addition to his medical license, Dr. Lew has maintained a separate pharmacy license in California since 1980. (AR 50.) As a result, Dr. Lew could prescribe medications and have those prescriptions filled on-site at Wellcare for patients. (See AR 4-19.) Wellcare regularly provided services to patients who received health insurance coverage through Medi-Cal. (AR 55.) Although Wellcare employed several other doctors in addition to Dr. Lew, only Dr. Lew was registered to submit claims for Medi-Cal services to the Department. Wellcare itself was not registered to submit claims for Medi-Cal services, though it was eligible to do so. (AR 138.)

In 2018, the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse opened an investigation into Dr. Lew and Wellcare. Between December 2018 and October 2019, two Special Agents posed as patients seeking services at Wellcare for a total of ten visits. (AR 4-19.) At each visit, Dr. Lew spoke to the Special Agents, but only conducted at most a cursory physical examination. (Ibid.) The Special Agents variously requested and received prescriptions or refills for Ativan, Xanax, and Soma. (AR 4-19.) At some of the visits, the Special Agents claimed to have a history of anxiety; at others, they simply stated that the medications made them “feel good.” (AR 4-19.) Despite asserting that a combination of Ativan and Soma caused excessive drowsiness, Dr. Lew prescribed them together anyway. (AR 9-10.) One Special Agent explicitly disclosed to Wellcare staff that she was only taking Soma because it “helped her relax,” and did not indicate any medical purpose. (AR 12.) During this visit, Dr. Lew refilled the medications requested and gave the special agent an additional refill of each so that she would have a sufficient supply while she was purportedly traveling. (AR 12-13.) During at least one visit, Dr. Lew instructed the Special Agent to go to multiple pharmacies to fill the medications that he prescribed. (AR 8, 14, 17.) When the prescriptions were filled at Wellcare, the dosages on pill bottles were sometimes left blank or the prescribing doctor was not indicated. (AR 6, 16.) Dr. Lew issued prescriptions for medications that the agents explicitly said they had acquired from a family member or a friend. (AR 9, 11.)

On November 2, 2020, the Division of Medi-Cal Fraud and Elder Abuse issued a felony complaint charging Dr. Lew with ten counts of knowingly prescribing a controlled substance for other than a legitimate purpose, a violation of Health and Safety Code section 11153. (AR 32-39.) The California Department of Justice concurrently filed a declaration from Special Agent Fernando Espinoza detailing the investigation into Dr. Lew and Wellcare between 2018 and 2020. (AR 1-30.) Special Agent Espinoza’s declaration details the discrepancies between Dr. Lew’s medical notes and the video and audio evidence collected from the special agents posing as patients. (AR 27-29.) Special Agent Espinoza additionally opined that Dr. Lew’s insistence on filling prescriptions at multiple pharmacies was “to avoid detection and scrutiny from pharmacists who would likely question [the] prescriptions and notify authorities.” (AR 17-18.)

At his arraignment on December 2, 2020, Dr. Lew pled not guilty to all ten counts listed in the felony complaint. (AR 97.) On April 30, 2021, the parties stipulated that Dr. Lew was not to use his pharmacy license while criminal proceedings were still pending. (AR 98.) On October 13, 2021, the parties appeared in court before the Honorable Judge Kevin P. Stennis for Dr. Lew to enter a plea. (AR 86-87.) The parties had reached an agreement whereby Dr. Lew would plead either guilty or no contest to a felony charge of aiding and abetting the unlicensed practice of medicine, a violation of Business and Professions Code section 2052, subdivision (b). (AR 88.) As part of his plea agreement, Dr. Lew agreed to surrender both his DEA Certification of Registration to prescribe medicine and his state pharmacy license. (AR 88, 91, 100.) Dr. Lew also agreed to complete 200 hours of community service. (AR 88, 100.) Sentencing was to be continued for two years to allow Dr. Lew time to complete his community service and surrender his licenses. (Ibid.) If he did so, his sentence would be reduced from a felony to a misdemeanor, and he would be sentenced to one year of probation. (AR 88, 100.) Deputy Attorney General Vincent Bonotto moved to amend the Complaint to the charge of aiding and abetting the unlicensed practice of medicine. (AR 87, 92, 99.) The Court granted the motion, and Dr. Lew pled no contest to new, agreed-upon charge. (AR 92, 100.)

At the plea hearing, Dr. Lew indicated he understood the court “will treat a plea of no contest the same as a guilty plea for all purposes including sentencing.” (AR 92.) After finding the Dr. Lew freely and voluntarily entered his plea, the court “accept[ed] the plea and found [petitioner] guilty” of aiding and abetting in the unlicensed practice of medicine. (AR 93.) After the Court accepted his plea and found him guilty, Dr. Lew’s conviction was entered as the disposition of the Court. (AR 100 [“THE COURT FINDS THE DEFENDANT GUILTY”].) The Court continued sentencing to October 13, 2023, to allow petitioner to complete the additional terms of his plea agreement. (AR 93, 100.)

On May 11, 2022, the Department sent a letter to Dr. Lew informing him that he was “prohibited from billing for or receiving payment from the Medi-Cal program for an indefinite period of time,” effective October 13, 2021. (AR 44.) As a result, Dr. Lew could not submit claims to the Medi-Cal program for any services provided to patients, and he could not be involved, either directly or indirectly, in any claims submitted to the Medi-Cal program for payment. (AR 44.) The Department also informed Dr. Lew that he would be eligible to petition the Department for reinstatement one year after the effective suspension date. (AR 45.)

The same day, the Department sent a letter to Wellcare informing the organization that it had also been indefinitely suspended from billing to or receiving payment from the Medi-Cal program. (AR 46.) In the letter, the Department noted that it was required to suspend Wellcare pursuant to Welfare and Institutions Code section 14123, subdivision (a)(2), because its owner, petitioner, had been convicted of a violation of Business and Professions Code section 2052. (AR 46.) Wellcare’s suspension was also effective October 13, 2021, and it was also eligible to petition for reinstatement one year after the effective suspension date. (AR 46-47.)

On May 20, 2022, counsel for petitioners sent a letter to the Department requesting either that petitioners’ suspension be rescinded, or, in the alternative, that the Department hold an informal hearing regarding the suspension pursuant to Section 14123, subdivision (a)(3). (AR 56.) On August 8, 2022, the Department issued a revised suspension letter to Dr. Lew. (AR 133.) In the revised letter, the Department indicated that the effective date of the suspension was not October 13, 2021, but April 19, 2021, the day that Dr. Lew surrendered his DEA Certification of Registration for cause. (AR 133.) The Department additionally noted that Dr. Lew surrendered his pharmacy license, which expired on May 31, 2022. (AR 133.) The Department stated that the surrender of his licenses was grounds for automatic suspension under Welfare and Institutions Code section 14043.6, independent of grounds pursuant to section 14123. (AR 133-34.)

After Dr. Lew was placed on the Medi-Cal Suspended and Ineligible Provider List, the Board of Pharmacy issued an Accusation against Dr. Lew based on his underlying criminal conviction that sought to suspend or revoke his California pharmacy license. (AR 268-72.) In March 2023, the Board of Pharmacy and Dr. Lew stipulated that Dr. Lew would surrender his pharmacy license pursuant to the conditions of his plea agreement. (AR 264-66.)

On August 15, 2022, counsel for petitioners submitted a Petition of Po Lew, D.O. and Wellcare Comprehensive Medical Group for Removal from the Medi-Cal Suspended and Ineligible Provider List (hereinafter, “Request”) to the Department. (AR 137.) The Request included numerous letters describing Dr. Lew’s efficacy as a physician and his standing in his community. (AR 187-209.) In the Request, petitioners asserted that Dr. Lew and Wellcare had changed their medical practices. (AR 141.) As a result of surrendering his DEA Registration, Dr. Lew no longer prescribed controlled substances, and other physicians at Wellcare had significantly curtailed their prescriptions for controlled substances. (AR 141.)

On March 30, 2023, the Department denied the Request. (AR 255-57.) In its denial letter, the Department noted that the suspension letters dated May 11, 2022, contained explicit instructions that petitioners were prohibited from submitting claims to the Medi-Cal program for services provided either directly or indirectly. (AR 257.) Despite this prohibition, Dr. Lew had submitted 308 claims for services to the Medi-Cal program between June 1, 2022 and September 7, 2022 for reimbursements totaling $1,835.83. (AR 257.) Given the facts underlying the initial charges, Dr. Lew’s plea agreement, and his subsequent attempts to receive funds from the Medi-Cal program despite his suspension, the Department determined that it was not reasonably certain that the behavior that led to the suspension would not recur. (AR 257.)

On July 15, 2022, petitioner filed a verified petition for writ of mandamus. On August 17, 2022, respondent filed an answer. On May 2, 2023, pursuant to stipulation, petitioner filed an amended petition for writ of mandamus. (See 3/7/23 Minute Order.) On June 1, 2023, respondent filed an answer to the amended petition.

On December 8, 2023, petitioner filed an opening brief. On January 8, 2024, respondent filed an opposition. On January 22, 2024, petitioner filed a reply. The Court has received an electronic and hard copy of the administrative record.

Petitioner seeks writ relief under both CCP § 1085 and 1094.5. (FAP ¶¶ 4, 5.)

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).)

CCP § 1094.5 is applicable to “any final administrative order or decision made as the result of a proceeding in which by law a hearing is required to be given….” (CCP § 1094.5(a).) Petitioners challenge the validity of the Department’s “final administrative orders.” (FAP ¶ 4; Opening Br. at 10:22-11:1.) Specifically, petitioners challenge the decision of the Department to indefinitely prohibit them from billing for or receiving payment from the Medi-Cal program, as reflected in letters dated May 11, 2022. (FAP ¶ 22 & Exs. 1, 2; FAP Prayer for Relief ¶ 2; AR 44-48.) Petitioners also challenge the Department’s decision to deny Dr. Lew’s request for reinstatement as a provider in the Medi-Cal program. (FAP ¶ 23 & Ex. 4; FAP Prayer for Relief ¶ 2; AR 255-59.)

With respect to the decision to suspend petitioners from participation under the Medi-Cal program and the denial of Dr. Lew’s request for reinstatement, Welfare and Institutions Code § 14043.65(a)[1] states that applicants who have been temporarily suspended or whose applications for enrollment as a provider are denied may submit a written appeal. (§ 14043.65(a).) Section 14043.65(a) expressly provides that the appeal “shall not include a formal administrative hearing under the Administrative Procedure Act….” (Ibid.) The director or the director’s designee reviews the appeal and issues a decision. (Ibid.) Any further appeal is filed pursuant to CCP § 1085. (Ibid.)

Based on the foregoing, petitioners’ allegation that they are entitled to an independent judgment standard of review is without merit. (Pet. ¶ 25.) The Court reviews the Department’s decisions pursuant to CCP § 1085. (Marvin Lieblein, Inc. v. Shewry (2006) 137 Cal.App.4th 700, 713.)

CCP § 1085(a) provides: “A writ of mandate may be issued by any court to any inferior tribunal, corporation, board, or person, to compel the performance of an act which the law specially enjoins, as a duty resulting from an office, trust, or station, or to compel the admission of a party to the use and enjoyment of a right or office to which the party is entitled, and from which the party is unlawfully precluded by that inferior tribunal, corporation, board, or person.”

“There are two essential requirements to the issuance of a traditional writ of mandate: (1) a clear, present and usually ministerial duty on the part of the respondent, and (2) a clear, present and beneficial right on the part of the petitioner to the performance of that duty.” (California Assn. for Health Services at Home v. State Dept. of Health Services (2007) 148 Cal.App.4th 696, 704.) “An action in ordinary mandamus is proper where…the claim is that an agency has failed to act as required by law.” (Id. at 705.)

“When a party seeks review of an administrative decision pursuant to Code of Civil Procedure section 1085, judicial review is limited to examining the agency proceedings to ascertain whether the agency's action has been arbitrary, capricious or lacking entirely in evidentiary support, or whether the agency failed to follow the proper procedure and give notices required by law. And, where the case involves the interpretation of a statute or ordinance, our review of the trial court's decision is de novo.” (Ideal Boat & Camper Storage v. County of Alameda (2012) 208 Cal.App.4th 301, 311, citing Pomona Police Officers' Assn. v. City of Pomona (1997) 58 Cal.App.4th 578, 584.) In independently reviewing legal questions, “An administrative agency's interpretation does not bind judicial review but it is entitled to consideration and respect.” (Housing Partners I, Inc. v. Duncan (2012) 206 Cal.App.4th 1335, 1343.)

An agency is presumed to have regularly performed its official duties. (Evid. Code § 664.) In a CCP § 1085 writ petition, the petitioner generally bears the burden of proof. (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1154.)

“The director shall suspend a provider of service [from participation under the Medi-Cal program] for conviction of any felony or any misdemeanor involving fraud, abuse of the Medi-Cal program or any patient, or otherwise substantially related to the qualifications, functions, or duties of a provider of service.” (§ 14123(a)(1).) “If the provider of service is a clinic, group, corporation, or other association, conviction of any officer, director, or shareholder with a 10 percent or greater interest in that organization, of a crime described in paragraph [(a)](1) shall result in the suspension of that organization and the individual convicted if the director believes that suspension would be in the best interest of the Medi-Cal program.” (§ 14123(a)(2).)

Dr. Lew maintains that he has not been convicted for the purposes of Welfare and Institutions Code § 14123(a)(2). Dr. Lew maintains that he did not plead guilty, because on October 13, 2021, he entered a so-called Alford plea. An Alford plea is one where the individual accused of a crime consents to punishment for a crime without admitting to having committed the crime. (North Carolina v. Alford (1970) 400 U.S. 25, 37.)

On October 13, 2021, Dr. Lew pled no contest to one felony count of Business and Professions Code § 2052(b), aiding and abetting the unlicensed practice of medicine. (AR 88, 92.) Petitioners do not dispute that the count was substantially related to the qualifications, functions, or duties of a provider of service. When questioned by the Deputy General whether he understood that the Court would treat his plea of no contest the same as a guilty plea for all purposes, including sentencing, Dr. Lew responded “Yes.” (AR 92.) The Court (Hon. Kevin P. Stennis) found that Dr. Lew freely and voluntarily entered into the plea, accepted the plea, and found Dr. Lew guilty of aiding and abetting the unlicensed practice of medicine. (AR 93, 100.)

“A plea or verdict of guilty, or a conviction following a plea of nolo contendere is deemed to be a conviction within the meaning of this section.” (§ 14123(a)(2); see also 22 C.C.R. § 51458(a) [“A plea or verdict of guilty or a conviction following a plea of nolo contendere made to a charge of a felony, or any offense involving moral turpitude, shall be deemed to be a conviction”].) Even though sentencing has been continued to allow Dr. Lew to comply with the terms of his plea (AR 93, 100), this does not mean that Dr. Lew was not convicted as defined in section 14123(a)(2). Contrary to the contention in the reply, no language in section 14123 indicates that a conviction depends on sentencing. (See Reply at 4:10-14.) A conviction “following” a no contest plea means that a no contest plea results in a conviction. Based on petitioner’s plea of no contest, Dr. Lew was convicted of a felony within the meaning of section 14123(a)(2).

Petitioners also contend that it was an abuse of discretion for the Director to determine that their suspension was in the best interest of the Medi-Cal program. (§ 14123(a)(2).) With respect to Dr. Lew, his suspension was not arbitrary, capricious, or lacking entirely in evidentiary support for the reasons stated in section IV.B below. With respect to Wellcare, Dr. Lew is the only full-time physician employed at Wellcare. (AR 169.) While Dr. Lew was registered with DHCS as a Medi-Cal provider, Wellcare never was. (AR 46, 138.) Thus, when Dr. Lew submitted Medi-Cal reimbursement claims, he was essentially acting on behalf of Wellcare. Through Dr. Lew’s conviction, the Department had a valid basis to place Wellcare on the Suspended and Ineligible Provider List. Even though Wellcare was never a registered provider, as petitioners argue (Opening Br. at 13:4-13), petitioners do not cite any authority indicating that Wellcare cannot be suspended from participation in the Medi-Cal program. Indeed, under section 14043.61(a), a provider that submits claims for payment to Medi-Cal through any suspended individual is also subject to suspension. (§ 14043.61(a).)[2]

For the foregoing reasons, it was not an abuse of discretion for the Department to suspend Dr. Lew and Wellcare from participation in the Medi-Cal program based on Dr. Lew’s felony conviction.

The Department argues that it was required to suspend Dr. Lew after he surrendered his pharmacy license under section 14043.6. (Opp. at 14:12-13.) Section 14043.6(a) states in relevant part:

[T]he department shall automatically suspend, as a provider in the Medi-Cal program, any individual who, or any entity that, has a license, certificate, or other approval to provide health care, which is revoked or suspended by a federal, California, or another state’s licensing, certification, or approval authority, has otherwise lost that license, certificate, or approval, or has surrendered that license, certificate, or approval while a disciplinary hearing on that license, certificate, or approval was pending. The automatic suspension shall be effective on the date that the license, certificate, or approval was revoked, lost, or surrendered.

(§ 14043.6(a).) Dr. Lew agreed to surrender his pharmacy license while disciplinary proceedings were pending. (AR 100, 142 [in request for reinstatement to Medi-Cal program, petitioner wrote, “Although the Pharmacy Board has issued an Accusation, it should be resolved by the surrender of Dr. Lew's pharmacy license as part of his plea deal, and should therefore not be the basis of another suspension, when that event occurs”].) Although Dr. Lew agreed to surrender his pharmacy license as part of the plea discussed above (AR 88, 100), the surrender did not take place until March 2023 and became effective on May 24, 2023 as a resolution of the disciplinary proceedings on his pharmacy license (AR 260, 264, 266). Accordingly, the Department could not invoke Dr. Lew’s surrender of the pharmacy license as a basis for automatic suspension on August 8, 2022. (AR 133.)

However, the Department was required to automatically suspend Dr. Lew as a Medi-Cal provider because he surrendered his DEA Certification of Registration. Petitioners contend that a disciplinary hearing was not pending when Dr. Lew surrendered his DEA Certification of Registration on April 19, 2021. (AR 133.) Section 14043.6 provides that the Department shall automatically suspend any individual who has surrendered a license or certificate to provide health care[3] while a disciplinary hearing on the license was pending. Section 14043.6 also provides that the Department shall automatically suspend any individual who “otherwise lost” a license or certificate to provide health care.

“The Medi-Cal program was created for the benefit of those eligible to receive assistance under it, and not for the economic advantage of [Medi-Cal providers] which render services to the beneficiaries. This basic premise imposes upon [courts] the duty to interpret the rules applicable to the program in a manner favorable to the beneficiaries unless constitutional prohibitions dictate otherwise.” (Paramount Convalescent Center, Inc. v. Department of Health Care Services (1975) 15 Cal.3d 489, 501.) Interpreting section 14043.6 in a manner designed to address quality of care to Medi-Cal beneficiaries, the phrase “while a disciplinary hearing on that license, certificate, or approval was pending” refers to surrender of the license, not loss of the license through other means. To allow Dr. Lew to escape automatic suspension because he voluntarily surrendered the DEA Certificate of Registration while no disciplinary proceeding on the license was pending, even though he “otherwise lost” the license, would be detrimental to Medi-Cal beneficiaries.

Section 14043.6 provides that “[t]he automatic suspension shall be effective on the date that the license, certificate, or approval was revoked, lost, or surrendered.” Because Dr. Lew surrendered or lost his DEA Certification of Registration on April 19, 2021, the Department was required to automatically suspend him from Medi-Cal as of April 19, 2021. (AR 133.)

Petitioners assert that the Department abused its discretion in denying their petition to be removed from the Medi-Cal Suspended and Ineligible Provider List.

In the March 30, 2023 letter denying petitioners’ request for reinstatement, the Department maintained that after Dr. Lew’s suspension, Dr. Lew “continued

to bill Medi-Cal on at least 308 separate occasions between June 1, 2022 and September 7, 2022, resulting in reimbursements totaling $1,835.83.” (AR 257.)

Dr. Lew stated during a Department interview that he notified his billing manager immediately upon receiving the May 2022 suspension letter that he had been placed on the Suspended and Ineligible Provider List. (AR 252-53.) Counsel for Dr. Lew also informed the Department investigator that counsel had notified Dr. Lew’s independent physician association (“IPA”) of Dr. Lew’s suspension by July 15, 2022. (AR 248.) Despite petitioner having asserted in the opening brief that he did not know that his office submitted Medi-Cal claims to the IPA (Opening Br. at 10, fn. 9, 16:1-3), the Department does not dispute petitioner’s assertion. Crediting petitioners’ assertions, it is possible that Dr. Lew did not intentionally submit claims for payment to Medi-Cal after his suspension.

In support of reinstatement, petitioners submitted letters from his patients attesting to his character and skill and commendations for service to the community. (AR 187-213.) Petitioners also asserted that to ensure that Dr. Lew spent sufficient time on examinations, he stopped taking new patients and curtailed the practice of accepting walk-in patients. (AR 141.) According to Dr. Lew, he no longer prescribes controlled drugs and other physicians have severely reduced their number of controlled substance prescriptions. (AR 141.) Dr. Lew and his office refer patients to appropriate specialists in the event non-controlled medications do not work. (AR 141.) Instead of having patients pick up prescriptions at his office, Dr. Lew enrolls patients in prescription delivery programs. (AR 141.) Dr. Lew has also taken a course in prescribing opioids and record keeping. (AR 244-45.)

The Court has considered petitioners’ evidence. Even crediting Dr. Lew’s character and skill, the Court cannot find that denial of reinstatement to Medi-Cal was arbitrary, capricious, or lacking entirely in evidentiary support.

Under federal regulations, the Department could reinstate petitioners to Medi-Cal “only if it is reasonably certain that the types of actions that formed the basis for the original exclusion have not recurred and will not recur.” (42 C.F.R. § 1002.215(a).) The Department interprets the federal regulation to mean that it “must reach its decision to an affirmative certainty.” (AR 256-57.) “If the [Department] is not reasonably certain, it cannot reinstate a provider.” (AR 257.)

Health and Safety Code § 11153 “prohibits practitioners from writing controlled substance prescriptions that have no legitimate medical purpose and that are outside the course of their usual professional practice.” (People v. Gandotra (1992) 11 Cal.App.4th 1355, 1363.) During the visits where the undercover agents posed as patients, Dr. Lew prescribed Ativan, Xanax, and Soma – controlled substances – to the agents without ascertaining whether there was a legitimate medical purpose, including during their first visits. (AR 4-6.) The agents did not mention any symptoms which may have constituted a legitimate medical purpose, including pain or anxiety. (AR 8, 9, 11, 13, 14, 16, 18, 19.) One time the prescription bottle did not indicate the dose or how often the patient should take the prescription. (AR 6.) Twice an agent mentioned she obtained Soma and Ativan from her sister; Dr. Lew proceeded to prescribe Soma and Ativan. (AR 9, 15.) Dr. Lew also advised one agent to go to two separate pharmacies to obtain Xanax and Soma prescriptions. (AR 14, 18.) Dr. Lew would not conduct any physical examination prior to prescribing the controlled substances, despite representations in the medical records that Dr. Lew performed a full medical examination. (AR 6, 18, 27-29.) Dr. Lew provided prescriptions for controlled substances merely on the agents’ assertion that the prescriptions made them feel good. (AR 9, 11, 16, 28-29.) There were a total of ten visits from December 2018 and October 2019. (AR 4-19.)

The Department was entitled to find that it could not be reasonably certain Dr. Lew would not repeat the same behavior that led to the plea. Dr. Lew admitted that other Wellcare physicians have “severely reduced the number of controlled substance prescriptions they issue.” (AR 141.) Thus, it is clear Wellcare physicians continue to prescribe controlled substances, but petitioners have not submitted evidence regarding the type of examination that the other physicians conduct before prescribing controlled substances.

Further, in the request for reinstatement, Dr. Lew contended that he “attempted to provide legitimate treatment to people he believed were patients for their purported medical conditions.” (AR 140.) Dr. Lew also contended that review of the medical records would have made clear his reasons for prescribing controlled substances. (AR 140.) Dr. Lew did not provide copies of such medical records, even in redacted form or even explain how his prescriptions were legitimate. Accordingly, the Department was entitled to rely on evidence from the agents, including from hidden monitoring and recording devices, to ascertain whether Dr. Lew prescribed the medications for legitimate medical purposes. (AR 4, 6, 7, 8, 10, 12, 19, 20.) The conduct of Dr. Lew is relevant to a determination of reinstatement. (42 C.F.R. § 1002.215(a)(2).) Fully acknowledging the wrongfulness of [one’s] actions is an essential step towards rehabilitation.” (Seide v. Committee of Bar Examiners (1989) 49 Cal.3d 933, 940.) By maintaining the propriety of his prescriptions, Dr. Lew has not fully acknowledged how his actions led to his conviction.

Petitioners maintain that his plea was not related to fraud or any service provided to any Medi-Cal beneficiary. The fact that Dr. Lew’s conviction arises from the distribution of controlled substances to undercover agent, as opposed to patients, is of no consequence. (See Gandotra, 11 Cal.App.4th at 1359-60 [conviction of doctor for aiding and abetting in the unlicensed practice of medicine upheld based on evidence from undercover agents posing as patients].) The fact that the undercover agents may not have been Medi-Cal beneficiaries does not mean that the Department could not consider his conviction in deciding whether to reinstate him to Medi-Cal.

Based on the foregoing, the Department did not abuse its discretion in denying petitioners’ request for reinstatement.

The petition is DENIED. Pursuant to Local Rule 3.231(n), respondent Michelle Baass, as Director of the California Department of Health Care Services shall prepare, serve, and ultimately file a proposed judgment.

[1] Subsequent statutory references are to the Welfare and Institutions Code unless otherwise stated.

[2] Section 14043.61(a) states: “A provider shall be subject to suspension if claims for payment are submitted for the services…provided…to a Medi-Cal beneficiary, by an individual or entity that is suspended, excluded, or otherwise ineligible because of a sanction to receive, directly or indirectly, reimbursement from the Medi-Cal program and the individual or entity is listed on either the Suspended and Ineligible Provider List, published by the department, to identify suspended and otherwise ineligible providers….”

[3] “Health care provided under this chapter may include diagnostic, preventive, corrective, and curative services and supplies essential thereto, provided by qualified medical and related personnel for conditions that cause suffering, endanger life, result in illness or infirmity, interfere with capacity for normal activity including employment, or for conditions which may develop into some significant handicap.” (§ 14059.)