Osborne v. Az Medical Board

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

ROBERT C. OSBORNE, Plaintiff/Appellant,

v.

ARIZONA MEDICAL BOARD, Defendant/Appellee.

No. 1 CA-CV 16-0250
FILED 6-13-2017

Appeal from the Superior Court in Maricopa County
No. LC 2014-000407-001
The Honorable Crane McClennen, Judge (Retired)

AFFIRMED

COUNSEL

Waterfall, Economidis, Caldwell, Hanshaw and Villamana PC, Tucson
By James W. Stuehringer
Counsel for Plaintiff/Appellant

Arizona Attorney General’s Office, Phoenix
By Michael Raine, Anne Froedge
Counsel for Defendant/Appellee
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Decision of the Court

MEMORANDUM DECISION

Presiding Judge Margaret H. Downie delivered the decision of the Court,
in which Judge Kenton D. Jones and Judge Donn Kessler joined.

D O W N I E, Judge:

¶1 Robert C. Osborne (“Appellant”) appeals the superior
court’s order upholding the revocation of his license to practice medicine
in Arizona by the Arizona Medical Board (“Board”). For the following
reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 The Board began investigating Appellant — a Board-
certified anesthesiologist with a pain-management practice — after
receiving a complaint from another physician expressing concern about
possible “dangerous prescribing practices” as to patients SM and SJ and
advising that the Arizona State Board of Pharmacy’s prescription
monitoring database (“CSPMP”) revealed “extraordinarily high and
potentially lethal doses of opioid analgesics filled for these patients as
prescribed by Dr. Osborne.” The Board forwarded the complaint to
Appellant and asked him to respond and provide the patients’ medical
records. Appellant submitted the requested records and response.

¶3 Jerome Julian Grove, M.D., who is board-certified in
anesthesiology and pain management, reviewed the matter as an outside
medical consultant for the Board. Dr. Grove identified several concerns,
including: (1) opioid levels “excessive for the amount of pathology” noted
in the patients’ medical records; (2) inadequate opioid management; (3)
inadequate communication with the patients’ psychiatric treatment
providers and lack of a “multidisciplinary approach;” and (4)
unaddressed “red flags” regarding both patients.

¶4 The Board also asked Richard J. Ruskin, M.D. — a board-
certified anesthesiologist with a subspecialty certification in pain
management — to offer an assessment. Dr. Ruskin opined that Appellant
deviated from the standard of care in several respects and identified both
actual and potential harm, including “perpetuat[ing] a situation of
extreme opioid dependence in SM” and rendering SJ “extremely opioid

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dependent for reasons that . . . were totally unnecessary and grossly
inappropriate.”

¶5 The Board filed a formal complaint against Appellant,
alleging violations of Arizona Revised Statutes (“A.R.S.”) sections 32-
1401(27)(e) (“[f]ailing or refusing to maintain adequate records on a
patient”) and 32-1401(27)(q) (“[a]ny conduct or practice that is or might be
harmful or dangerous to the health of the patient or the public”). A five-
day administrative hearing ensued before an administrative law judge
(“ALJ”).

¶6 The ALJ recommended that the Board revoke Appellant’s
medical license. She found clear and convincing evidence that Appellant
deviated from the standard of care in treating SM as follows:

 “[F]ailing to provide a coherent and organized history,
physical examination, assessment, and plan of care . . . .”

 “[F]ailing to more thoroughly consider what other treatment
modalities might be available rather than continuing to
escalate SM’s opioid dosage.”

 “[F]ailing to document a clear rationale as to why
[Appellant] felt it was necessary to accelerate SM’s opioid
dosage to the level of 600 morphine mg-equivalents per
day.”

 “[F]ailing to take into account [SM’s] co-morbid conditions,
including her 10-year history of methamphetamine
addiction, as well as bipolar disorder, and failing to contact
SM’s behavioral health specialists in order to discuss these
conditions in light of the high opioid doses she was
requiring.”

 “[F]ailing to recognize and intervene when there were clear
signs of opioid misuse and diversion, including violations of
SM’s opioid agreement by the use of multiple pharmacies,
SM’s report of taking diverted methadone, and SM’s report
that her medication had been stolen by her son.”

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 Failing to maintain adequate records in violation of A.R.S.
§ 32-1401(2).1

The ALJ also found clear and convincing evidence that Appellant deviated
from the standard of care in treating SJ as follows:

 “[F]ailing to provide a coherent and organized history,
physical examination, assessment, and plan of care . . . .”

 “[F]ailing to provide clear justification as to why it was
necessary to maintain SJ on the equivalent of almost 900 mg
of morphine a day.”

 “[F]ailing to clarify SJ’s co-morbid conditions and work
more closely with her rheumatologist and primary care
physicians.”

 “[F]ailing to more carefully consider what additional
treatment modalities might have been available to SJ other
than high-dose opioids.”

 Failing to maintain adequate records as required by A.R.S.
§ 32-1401(2).

¶7 The ALJ concluded Appellant had engaged in
unprofessional conduct, as defined by A.R.S. § 32-1401(27)(q), and
violated A.R.S. § 32-1401(2). In addressing the appropriate sanction, the
ALJ cited the statutory directive that the Board “consider all previous
nondisciplinary and disciplinary actions against a licensee,” A.R.S. § 32-
1451(U), and discussed prior Board matters involving Appellant. In 2009,
Appellant agreed to a letter of reprimand for violating the same statutes at
issue here. As to one patient in that case — MG — Appellant stipulated:

The standard of care when prescribing medications for
chronic non-malignant pain requires a physician to perform

1 Appellant does not challenge the determination that he failed to
maintain adequate records as to both SM and SJ, so we do not address that
issue. See MT Builders, L.L.C. v. Fisher Roofing, Inc., 219 Ariz. 297, 304 n.7,
¶ 19 (App. 2008) (arguments not developed on appeal are deemed
waived).

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an appropriate evaluation, to communicate and coordinate
with the referring physician, to periodically assess the need
for continued treatment and to investigate the patient for
non-compliance. The standard of care also requires a
physician to consider a new finding when increasing the
dosage for opioids.

[Appellant] deviated from the standard of care because he
did not perform an appropriate evaluation, he did not
communicate and coordinate with MG’s referring physician,
he did not periodically assess MG’s need for continued
treatment, he did not investigate MG for non-compliance
and he did not consider a new finding when he increased
the dosage of MG’s opioid medication.

Appellant also agreed that his deviation from the standard of care “could
have caused MG to suffer an inadvertent or purposeful prescription
opioid overdose.”

¶8 In the same 2009 proceeding, Appellant admitted violating
the standard of care as to three other patients “because he did not
properly evaluate the patients, he did not communicate and coordinate
with their prescribing physicians, he did not consider a multidisciplinary
approach, and he did not closely monitor the patients for non-compliance
or diversion.” And in 2010, the Board issued Appellant an Order for
Continuing Medical Education for “prescribing extremely high doses of
oxycodone to a high risk patient with a previous history of self medication
and psychiatric issues in violation of A.R.S. § 32-1401(27)(q).”

¶9 Based on Appellant’s disciplinary history, “in addition to
[his] repeated acts of unprofessional conduct,” the ALJ concluded that he
“engages in conduct or practices that are or might be harmful or
dangerous to the health of his patients or the public.” The ALJ
recommended that the Board revoke Appellant’s license.

¶10 Counsel for the Board asked the Board to adopt the ALJ’s
findings of fact, conclusions of law, and recommended order and to add
findings and conclusions that more specifically addressed the harm or
potential harm caused by Appellant’s conduct. The Board unanimously
adopted the ALJ’s findings of fact, as well as the additional proposed
finding of fact regarding harm, adopted the ALJ’s conclusions of law
without modification, and issued an order revoking Appellant’s medical

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license. After unsuccessfully seeking rehearing, Appellant appealed to the
superior court.

¶11 Appellant asked the superior court to hold an evidentiary
hearing, which it declined to do. After the superior court affirmed the
Board’s order, Appellant timely appealed to this Court. We have
jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1), -2101(A)(1), and -913.

DISCUSSION

¶12 Appellant identifies four issues on appeal:

(1) Whether the Board’s “decision was unsupported by
substantial evidence and contrary to law because it
failed to follow Webb [v. State ex rel. Ariz. Bd. of Med.
Exam’rs, 202 Ariz. 555 (App. 2002)]’s narrowing
construction of A.R.S. §32-1401(27)(q) thereby applying
the statute to Dr. Osborne in an unconstitutionally
vague manner.”

(2) Whether the Board’s “decision violated due process and
was an abuse of discretion because it failed to consider
supplemental evidence which went to the heart of [the
Board’s] criticism of Dr. Osborne’s care and treatment of
patient SM.”

(3) Whether the Board’s “decision to adopt credibility
findings regarding testifying patient SM was contrary to
law and an abuse of discretion.”

(4) Whether Appellant’s “rights to due process were
violated when the court below refused to conduct an
evidentiary hearing to determine if any of the [Board’s]
investigative hierarchy communicated with any Board
member regarding the Department of Justice and the
DEA’s criminal investigation of Dr. Osborne.”

We view the record in the light most favorable to upholding the Board’s
decision. Golob v. Ariz. Med. Bd., 217 Ariz. 505, 507 n.1, ¶ 1 (App. 2008).
Substantial evidence exists to support an administrative decision “even if
the record also supports a different conclusion.” Ritland v. Ariz. State Bd.
of Med. Exam’rs, 213 Ariz. 187, 189, ¶ 7 (App. 2006).

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I. A.R.S. § 32-1401(27)(q) Violation

¶13 The Board concluded Appellant violated A.R.S. § 32-
1401(27)(q), which includes within the definition of “unprofessional
conduct” any “conduct or practice that is or might be harmful or
dangerous to the health of the patient or the public.” Appellant contends
the Board applied this statute “in an unconstitutionally vague manner.”
We review questions of law and issues of statutory interpretation de novo.
Webb, 202 Ariz. at 557, ¶ 7.

¶14 In Webb, we noted the breadth of the “might be harmful or
dangerous” language in § 32-1401(27)(q).2 Id. at 561, ¶ 25. We observed
that there is “potential for harm in most prescriptive medication; and
some forms of treatment – radiation and chemotherapy, to name two –
involve near certainty of harm, yet harm accepted and acceptable in the
effort to alleviate still greater harm.” Id. Interpreting the statute in a
manner comporting with due process, we held that it applies only to
“those forms of treatment whose potential or actual harm is unreasonable
under the circumstances, given the applicable standard of care.” Id. at
¶ 27.

¶15 Neither the relevant statutes nor Webb requires the Board to
make an express finding that potential or actual harm is “unreasonable
under the circumstances.” “The legislature knows how to make written
findings a requirement.” Hart v. Hart, 220 Ariz. 183, 187, ¶ 17 (App. 2009);
see, e.g., A.R.S. §§ 13-702(B) (requiring factual findings on aggravating or
mitigating factors); 25-403(B) (mandating specific findings in contested
legal decision-making or parenting time matters); 8-538(A) (factual
findings required when terminating parental rights). We note, however,
that such a finding is not difficult to make, and in cases presenting a close
call as to the reasonableness of harm specifically found by the Board,
would assist reviewing courts in determining its adherence to the
statutory standard. As we discuss infra, though, this case presents no such
“close call.”

¶16 In its supplemental finding of fact, the Board stated: (1)
“Both Dr. Ruskin and Dr. Grove testified that SM was harmed by
[Appellant’s] conduct in that she was placed in a situation of extreme
opioid dependence;” (2) “Dr. Ruskin stated in his report that patient SJ

2 Webb interpreted an earlier version of the statute, though the
relevant language remains unchanged.

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was unnecessarily rendered extremely opioid dependent, as well;” and (3)
“[T]here was the potential for overdose and death.” Although the first
two findings could be construed as mere recitations of witness testimony,
read in context, the Board is clearly adopting the quoted testimony as
findings of fact. Moreover, the express finding that “there was the
potential for overdose and death” clearly satisfies the requirement that the
statute be applied only to treatment “whose potential or actual harm is
unreasonable under the circumstances, given the applicable standard of
care.” Webb, 202 Ariz. at 561, ¶ 27. Appellant does not suggest that
potential overdose or death was reasonable under the circumstances for
either patient. Indeed, at oral argument before this Court, Appellant
conceded that, “If a patient had died, that would not be reasonable.”

¶17 The Board’s supplemental finding is sufficient to comply
with Webb, and the record supports that finding. When SM began treating
with Appellant, she was taking five oxycodone 30 mg tablets per day. At
SM’s second appointment, Appellant wrote that she was “stabilized on
her medications,” yet he doubled her prescription to ten 30 mg tablets per
day, writing that, “I have slightly increased her medications and will try to
be supportive of her.” (Emphasis added). Appellant later increased SM’s
dosage again — to 360 tablets per month — although a progress note
states she was “stabilized on her medicine” with no “undercurrent
changes.”

¶18 The Board could reasonably conclude there was no
justification for or documentation explaining the substantial increases in
opioids. Dr. Ruskin testified that instead of exploring alternative
treatment modalities, Appellant simply prescribed “opioids, [and] more
opioids.” When questioned about harm, Dr. Ruskin testified that SM
“was put in a situation of extreme opioid dependence” and that “[d]eath
from opioid overdose, whether it be intentional or unintentional, that’s
clearly a risk.” He stated that “short of death, you have issues of
morbidity, ending up in the emergency room, requiring treatment for
drug overdose, requiring treatment for side effects related to opioid
therapy . . . [and] the potential for addiction.” At the conclusion of Dr.
Ruskin’s cross-examination, the following exchange occurred:

Q. It’s your belief that Dr. Osborne put SM at the risk of
death?

A. Yes.

Q. And you say that because of the level of opioids?

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A. I say that because of the level of opioids primarily,
yes.

Q. Even though there’s no ceiling for opioids, correct?

A. I’m not sure what that means. It still kills people.

Q. All right.

A. That’s a ceiling.

¶19 The record also substantiates that although SM was under
psychiatric care (including prescribed medications) for bipolar disorder
and had a ten-year history of methamphetamine abuse, Appellant did not
coordinate with her mental health providers, despite evidence that
psychiatric disease “is a known risk factor for opioid addiction and
abuse.” The risks were heightened by SM signing a document that
prohibited Appellant from sharing information with her other healthcare
providers, which Dr. Grove testified was a “tremendous concern” because
psychiatric medications interact with pain medications, and Appellant
would need to communicate with this “high risk” patient’s mental health
providers, or at the very least, “have that avenue open.”

¶20 Evidence also established Appellant’s failure to recognize
and intervene in the face of “clear signs” of opioid misuse and diversion
by SM. Appellant had SM sign an opioid agreement that stated:

I agree not to obtain any narcotics from any other physician
unless you are notified. I agree to obtain narcotics from only
one pharmacy at a time, and will inform you of any change
in pharmacy use.

Testimony established the importance of using only one pharmacy as a
means of tracking a patient’s medication usage due to the lack of
communication between pharmacies. During a three-month span
preceding her treatment with Appellant, SM received opioid prescriptions
from 11 different providers and filled those prescriptions at four different
pharmacies. And while treating with Appellant, SM violated the opioid
agreement by filling her prescriptions at multiple pharmacies and
obtaining narcotics from other prescribers. Nothing in Appellant’s
records indicate “he was aware of or had addressed the violations of the
narcotics agreement with SM.”

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¶21 SM also consistently sought early refills, suggesting she was
using her medications in excess of prescribed dosages. Appellant did not
question her about this issue. After running out of her medication on one
occasion, SM took methadone obtained from another person. Appellant
advised her that was “unacceptable” and required her to drug-test as a
result. According to Dr. Grove, SM’s conduct was “extremely concerning
and would typically completely change my plan of care for that patient.”
On a different occasion, SM reported that her son had stolen her
medication. Dr. Grove testified that, given these red flags, Appellant fell
below the standard of care in obtaining only four drug screens during his
treatment of SM.

¶22 Patient SJ saw Appellant for more than four years for
chronic pain. The only plan of care evident from Appellant’s records was
a regimen of opioids that escalated over time. Dr. Grove testified it was
inappropriate to expose SJ to such amounts of “highly addictive
substances.” He further opined that Appellant’s “level of assessment in
terms of the toxicology” was substandard and that the combination of SJ’s
medications could have caused respiratory depression or death.

¶23 Testimony established that SJ’s history of sexual abuse and
illicit drug use raised red flags and that sexual abuse “is a known variable
for risk stratification for mismanagement of medications.” As with SM,
Appellant did not address SJ’s violations of her opioid agreement after she
obtained prescriptions from multiple pharmacies. Nor did he address SJ’s
repeated early refills. Appellant documented an incident in which SJ
reported that her dog got into her purse and destroyed her pills.
Appellant wrote in her record that he was “very critical of this. This is her
only chance.” Dr. Grove described this incident as a possible indication of
diversion or addiction and testified that Appellant fell below the standard
of care by asking SJ to submit to only one drug screen that pre-dated the
report of a dog destroying her opioids.

¶24 We are not faced here with “a physician who came to work
with a head cold,” Webb, 202 Ariz. at 561, ¶ 24, or a record suggesting only
harm or potential harm reasonable under the circumstances. On the
contrary, substantial evidence established unreasonable potential harm
caused by Appellant’s deviations from the standard of care, including
death and overdose. Under these circumstances, we reject Appellant’s
contention that A.R.S. § 32-1401(27)(q), as applied by the Board, violated
his due process rights.

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II. Motion to Supplement Administrative Record

¶25 After the evidentiary hearing before the ALJ concluded,
Appellant moved to supplement the administrative record with evidence
he described as newly discovered. The evidence — all of which was
created after the hearing — consisted of SM’s medical records from other
healthcare providers, an operative report of surgery occurring after the
hearing, and Appellant’s own records regarding SM’s post-hearing visits.
The Board opposed the motion, and the ALJ denied it.

¶26 In arguing he was deprived of an opportunity to present a
complete defense, in violation of due process, Appellant cites the
following finding by the ALJ:

At the time of the hearing, close to four years after SM began
treatment with [Appellant], she had not had the
recommended surgery.

Contrary to Appellant’s assertion, the ALJ’s finding is not “simply
untrue.” It is undisputed that SM did not undergo surgery until after the
hearing. Moreover, the quoted finding appears in the context of a
discussion about Appellant’s failure “to more thoroughly consider what
other treatment modalities might be available rather than continuing to
escalate [SM’s] opioid dosage.” The point the outside medical consultants
and Board were making is that, for almost four years, Appellant failed to
revisit or amend his initial treatment plan for SM — smoking cessation
and surgery — focusing instead on an escalating dosage of narcotics
without explanation or justification. Under these circumstances, we agree
with the Board that “[a]dmitting evidence of an eventual surgery would
not have changed the experts’ opinions about the four years of treatment
before surgery.”

III. SM’s Credibility

¶27 Appellant next contends the Board erred by adopting the
ALJ’s credibility findings regarding SM. We disagree.

¶28 In discussing the theft of opioids by SM’s son, the ALJ
found:

SM’s testimony on this issue was inconsistent. SM first
testified that she was hospitalized for seven days in August
2011, and that her medications were stolen during her
hospitalization. When the Board’s counsel pointed out that

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SM had been hospitalized for seven days in June 2011, SM
then reported she was hospitalized again in August 2011.3
During an interview with [Appellant’s] counsel on October
18, 2013, SM stated she and her husband had gone to a
casino in Tucson and discovered the medications were
missing when they returned.

In her conclusions of law, the ALJ stated:

SM’s inconsistency as to when the medications were taken
by her son calls into question the veracity of her story. Had
[Appellant] more clearly recorded in his progress notes the
report he received from SM regarding the incident, there
would be a contemporaneous version of events that could
have shed more light on the events.

¶29 Because the ALJ observes the demeanor and attitude of
witnesses, “the Board should give deference to [her] credibility findings”
and may “overrule these findings only if it finds evidence in the record for
so doing.” Ritland, 213 Ariz. at 191, ¶ 14. A reviewing court should
uphold a Board’s credibility finding “if there is substantial evidence in the
record supporting it.” Id. at 191–92, ¶ 15.

¶30 Appellant’s contention that the ALJ “failed to take into
account SM’s mental health issues and periodic confusion” is, in essence, a
request to reweigh the ALJ’s first-hand observations and come to a
contrary conclusion. However, nothing in the record or the law required
the Board to do so. The record does not support Appellant’s suggestion
that the ALJ disregarded the entirety of SM’s testimony based on the
questionable veracity of her story about the medication theft. The
credibility finding expressly relates to that one incident, and the ALJ
credited other testimony by SM in her findings.

IV. Request for Evidentiary Hearing in Superior Court

¶31 Finally, Appellant challenges the denial of his request for an
evidentiary hearing in the superior court to explore the Board’s
involvement in or knowledge about ongoing criminal investigations of
him being conducted by the Department of Justice and Drug Enforcement

3 SM further testified she could not remember the dates of her
hospitalizations because the medication she was taking made her memory
“really foggy.”

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Administration. In his superior court filings, Appellant contended the
Board withheld information from him about communications with
investigating law enforcement entities, while providing Dr. Ruskin (and
perhaps others) with such information. The Board denied these
allegations, avowing that the “previously hidden information” notation in
its internal files referred to the fact it did not give Dr. Ruskin the report
authored by Dr. Grove or the Staff Investigational Review Committee
(“SIRC”) report before he submitted his initial report.

¶32 The superior court ordered the Board to disclose documents
relevant to this issue and permitted Appellant to depose Board
Investigator Elle Steger. The Board complied. Appellant thereafter filed a
renewed request for an evidentiary hearing, which the court denied. We
review that ruling for an abuse of discretion. Any Charity Unlimited, LLC
v. Ariz. Dep’t of Transp., No 1 CA-CV 14-0789, 2016 WL 2909386, at * 9, ¶ 38
(App. May 19, 2016).

¶33 Steger testified that she did not speak with any Board
member, Dr. Ruskin, or the ALJ regarding ongoing criminal
investigations. In terms of the “previously hidden information” notation,
she explained that the phrase referred to the Grove and SIRC reports that
were initially withheld from Dr. Ruskin so as not to compromise his
independent assessment. She testified that Board members had no access
to internal documents referring to a “US Department of Justice request” or
to communications Board staff had with investigating entities.

¶34 There is no evidence or inference that any Board member,
Dr. Ruskin, or the ALJ considered, or even had knowledge of the ongoing
criminal investigations of Appellant. The documents produced pursuant
to the superior court’s order revealed only that Board staff members
communicated with law enforcement. “Without a showing of actual bias
or prejudice,” Board members and the ALJ are presumed to be fair.
Lathrop v. Ariz. Bd. of Chiropractic Exam’rs, 182 Ariz. 172, 180 (App. 1995);
see also Hourani v. Benson Hosp., 211 Ariz. 427, 433, ¶ 21 (App. 2005) (“All
decision makers, judges and administrative tribunals alike, are entitled to
a presumption of ‘honesty and integrity.’” (citation omitted)). “[M]ere
speculation regarding bias” is insufficient to rebut the presumption.
Pavlik v. Chinle Unified Sch. Dist. No. 24, 195 Ariz. 148, 152, ¶ 11 (App.
1999).

¶35 The evidentiary hearing contemplated by A.R.S. § 12-910
offers a “safety net for the unusual case in which new evidence, had it
been presented in the administrative proceeding, would have changed the

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decision.” Shaffer v. Ariz. State Liquor Bd., 197 Ariz. 405, 409, ¶ 18 (App.
2000). Nothing in the record suggests that an evidentiary hearing was
necessary for the superior court to make its statutorily required
determinations. See A.R.S. § 12-910(A), (E) (“[T]he court shall hold an
evidentiary hearing . . . to the extent necessary to make the determination”
whether the agency’s action was unsupported by substantial evidence,
contrary to law, arbitrary and capricious, or an abuse of discretion.).
Under these circumstances, the court did not abuse its discretion by
denying Appellant’s requests for an evidentiary hearing.

CONCLUSION

¶36 For the foregoing reasons, we affirm the decision of the
Arizona Medical Board.

AMY M. WOOD • Clerk of the Court
FILED: AA

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