Mesbahi v. Maryland State Board of Physicians

ZARNOCH, J. Appellants and cross-appellees, Dr. Kathy Mesbahi, Mina Nazemzadeh, and Aghdas Rahmati, challenge a judgment of the Circuit Court for Montgomery County upholding the decision of the Maryland Board of Physicians (“the Board”), appellee/ cross-appellant. The Board sanctioned Dr. Mesbahi for aiding an unauthorized person in the practice of medicine and unprofessional conduct in the practice of medicine, and the remaining appellants for practicing medicine without a license. In a cross-appeal, the Board challenges the circuit court’s finding that certain sanctions imposed against appellants/cross-appellees were arbitrary and capricious. The circuit court remanded the case to the Board with instructions to articulate its reasons for imposing those sanctions.

QUESTIONS PRESENTED Appellants 1 present the following questions for appellate ³²² review: 2 1. Did the Board erroneously rely on Declaratory Ruling 00-1 in concluding that laser hair removal is a surgical act constituting the practice of medicine? 2. Did the Board deprive appellants of their constitutional right to due process by failing to adequately notify them and the medical community about the issuance of Declaratory Ruling 00-1? 3. Was the Board required to prove that appellants knowingly violated Declaratory Ruling 00-1 to impose the sanctions against them?

In its cross appeal, appellee presents an additional question for our review: 4. Did the circuit court err as a matter of law in remanding the case to the Board in order for the Board to articulate its reasoning for exercising its discretionary authority to determine and impose fines and the cease and desist order as sanctions for violating the Maryland Medical Practice Act, Health Occ. §§ 14-101-14-702 ...? For the following reasons, the decision of the circuit court is affirmed in part and reversed in part. STATEMENT OF FACTS Dr. Mesbahi has been licensed to practice medicine in Maryland since 1982 and is board-certified in obstetrics and gynecology.

She maintains offices in Gaithersburg and Rock-ville. 3 In 1999, Dr. Mesbahi purchased her first laser machine and began to perform laser hair removal in her Rockville office. Dr. Mesbahi purchased another hair removal laser in June 2003 and signed a written sales quote certifying that: ³²³ [T]he [laser] medical device will be purchased by or on the order of a licensed practitioner, and used only by either a licensed physician or a licensed practitioner as defined by applicable state law. The regulations defining who can own and use a medical device vary from state to state and are subject to change. It is the buyer’s responsibility to ensure that all applicable state laws are followed.

Dr. Mesbahi later signed a sales contract and initialed the page of the contract which contained the following provision: Seller may provide educational sessions on the system ... provided, however, that the Buyer is solely responsible for the use and operation of the device in accordance with all applicable law and regulations, and for confirmation of all user qualifications. Buyer acknowledges improper use of the product carries a risk of injury to patients. Buyer represents and warrants that he, she, or it is in compliance with any and all applicable Federal, state, and local laws and regulations. Both of Dr. Mesbahi’s sisters worked in her Rockville office, Nazemzadeh as the business manager and Rahmati as the office receptionist.

Neither sister is licensed as a physician, nurse practitioner, or physician’s assistant. Nazemzadeh has an MBA and has been working as Dr. Mesbahi’s office manager for at least twenty years. Rahmati has a bachelor’s degree in “clinical lab” from Iran and worked as a hairdresser for several years before going to work as a receptionist for Dr. Mesbahi in 1989. In 2002, Nazemzadeh and Rahmati were trained by the laser machine manufacturer’s representative and certified competent to perform laser hair removal procedures.

Between early 2003 and August of 2005, Nazemzadeh performed approximately four to eight laser hair removal procedures a day in Dr. Mesbahi’s Rockville office. Rahmati performed one to two laser hair removal procedures per day in the Rockville office between the summer of 2004 and August of 2005. Appellants do not dispute that both Nazem-zadeh and Rahmati performed laser hair removal procedures, even when Dr. Mesbahi was not in the office. ³²⁴ Complaints and Investigation On December 1, 2004, a patient (“Patient A”) 4 filed a complaint with the Board questioning whether Nazemzadeh was authorized to perform laser hair removal. In her written complaint, the patient complained of “permanent sears and holes” in her body, as well as hypopigmentation, as a result of laser hair removal treatments performed by Nazemzadeh.

Patient A reported that she “found out from other laser places that the speedy way [Nazemzadeh] performs laser treatments, over the same spot more than thirty times, but fast, with the Light Sheer machine is incorrect and has left my body burnt all over.” According to Patient A, other professionals apparently took 2-3 hours to perform a treatment that Nazemzadeh completed in 15 minutes. She wrote that Nazemzadeh would use Dr. Mesbahi’s business cards to write appointments and she never saw any certifications or business cards with Na-zemzadeh’s name in the office, so the patient knew her only as “Mina” and was uncertain of her last name or qualifications. This complaint was later withdrawn. 5 The Board received a second complaint from Patient A in February 2005. In this complaint, Patient A elaborated that Nazemzadeh performed laser hair removal procedures on her twice a month from November 2003 until November 2004.

She claimed that the procedures left scabbing, visible scars, and/or hypopigmentation “about 22 times.” Patient A began to question Nazemzadeh’s competence after one particular incident where the laser gun caused her skin to “pop,” leaving a “white hole” in the area. She was later told by other professionals, who used the same kind of laser as Nazemza-deh, that going over the same area of skin “over 20 times” as Nazemzadeh did was “unheard of and dangerous.” Patient A ³²⁵ reported that she was unsure of Nazemzadeh’s title or qualifications, but she assumed that she was a physician’s assistant. Nazemzadeh had recommended that Patient A use Neosporin to treat her burns. When she was later interviewed as part of the Board’s investigation, Patient A stated that she had met Dr. Mesbahi only once for a gynecological exam, never for laser hair removal.

Patient A suggested that the Board’s investigator contact her friend, Patient B, who also went to Nazemzadeh for laser hair removal. In a telephone interview, Patient B told the investigator that she had received laser hair removal treatments from Nazemzadeh approximately twice a month for one and a half years. She stopped going in August or September of 2004 because she was concerned about ongoing exposure to the laser and she heard about Patient A’s burns and scars. Patient B also told the investigator that she has had laser treatments performed by other people.

In comparison, Na-zemzadeh’s technique was different and her sessions were much quicker. Patient B never sustained injuries as a result of her treatments. Like Patient A, Patient B reported that Nazemzadeh had performed the initial consultation and all treatments. She never met Dr. Mesbahi, even though she indicated a history of herpes simplex and accutane use on her intake form. 6 On May 23, 2005, the Board assigned compliance analyst Patricia Bramlet to conduct an investigation of the complaints.

As described above, Bramlet interviewed Patient A and Patient B. In August of 2005, Bramlet subpoenaed medical records and other documents from Dr. Mesbahi’s office and took recorded statements from Nazemzadeh and Dr. Mesbahi. In October 2005, the Board sent Cease and Desist Consent Orders for Nazemzadeh and Rahmati, which they signed. Their attorney advised the Board that Nazemzadeh and Rah- ³²⁶ mati had ceased providing laser hair removal services on August 18, 2005. Also in March 2006, Bramlet conducted a telephone interview with another patient (“Patient C”) who had received laser hair removal treatments from Dr. Mesb-ahf s office.

Patient C reported that she had received approximately five laser hair removal treatments performed by Rah-mati. She took a year off from the sessions when she became pregnant, but planned to resume treatments in April 2006. Patient C stated that her April treatments would be performed by Dr. Mesbahi, but she had no concerns or issues with the care received from Rahmati. Hearing and Board’s Decision ■ On April 18, 2006, Dr. Mesbahi, Nazemzadeh, and Rahmati received notice of the charges filed against them by the Board. 7 The Board alleged that Dr. Mesbahi fraudulently and deceptively used her license, that she was guilty of immoral or unprofessional conduct in the practice of medicine, and that she aided an unauthorized person in the practice of medicine by inappropriately and unlawfully delegating laser hair removal procedures to Nazemzadeh and Rahmati.

In separate charging documents, the Board alleged that Nazemzadeh and Rahmati practiced medicine without a license by performing laser hair removal services at Dr. Mesbahi’s office. The cases were consolidated for a hearing, which took place on January 11, January 19, and February 2, 2007 at the Office of Administrative Hearings. Dr. Mesbahi testified in her own defense, explaining that she did not consider laser hair removal to be “invasive surgery” because there “was no anesthesia involved, no cutting, no deep penetration to the tissue, no bleeding, no sedation required.” 8 Karen Wulff, a public policy ³²⁷ analyst, and Bramlet, the lead compliance analyst, testified on behalf of the Board. The Board dismissed the fraud charges against Dr. Mesbahi at the beginning of the first hearing.

On June 28, 2007, the administrative law judge (“ALJ”) issued a proposed decision, ruling against Nazemzadeh, Rahmati, and Dr. Mesbahi on all remaining charges. In addition to the sanctions later adopted by the Board, the ALJ recommended that Dr. Mesbahi be suspended from the practice of medicine for three months. The Board issued its final opinion and order on May 11, 2009. After adopting the ALJ’s findings of fact, the Board concluded that Dr. Mesbahi aided an unauthorized person in the practice of medicine, in violation of the Maryland Medical Practice Act, Md.Code Ann. (1981, 2009 Repl.Vol.), Health Occ.

Art. (HO) § 14-404(a)(2), (3) and (18), by inappropriately delegating laser hair removal procedures to Nazemzadeh and Rahmati. The Board also found that Dr. Mesbahi’s actions constituted unprofessional conduct in the practice of medicine. As for Nazemzadeh and Rahmati, the Board concluded that both sisters engaged in the unlicensed practice of medicine, in violation of HO §§ 14-301, 14-601, 14-602(a) and 14-606, as well as Code of Maryland Regulations (COMAR) 10.32.02.06B(2). The Board relied on Declaratory Ruling 00-1 in concluding that laser hair removal constitutes the practice of medicine. 9 DR 00-1 was issued by the Board on October 30, 2002, in response to a petition from the Board of Electrologists, 10 to address whether physicians may delegate laser hair removal ³²⁸ to non-physicians.

In DR 00-1, the Board of Physicians ruled that “[t]he use of lasers for hair removal is a surgical act. Only physicians, certified nurse practitioners, registered nurses pursuant to Board of Nursing Declaratory Ruling 97-1, and physician assistants may use lasers for hair removal.” 11 In concluding that appellants were guilty of the charges against them, the Board explained: The Board is bound by its declaratory rulings. COMAR 10.32.16.04A. In any event, none of the respondents presented any expert testimony to try to persuade the Board that the ruling should be re-examined, and the Board declines to do so.

Because laser hair removal is a surgical act that may only be performed by certain licensed individuals, the use of lasers for hair removal may not be delegated to an unlicensed individual. COMAR 10.32.12.04A. The Board also concluded that the sections of the Medical Practice Act violated by appellants do not require a finding that the appellants acted knowingly. Thus, the Board found that it was irrelevant whether appellants were aware of DR 00-1 or otherwise knew that laser hair removal constituted the practice of medicine.

The Board imposed the following sanctions on Dr. Mesbahi: (1) a reprimand; (2) one year probation; (3) an order to permanently cease and desist from the practice of laser hair removal; (4) an order to permanently cease and desist aiding unlicensed individuals in the practice of medicine; and (5) a $20,000 fine. The Board ordered both Nazemzadeh and Rahmati to cease and desist from engaging in the unauthorized practice of medicine. In addition, the ³²⁹ Board imposed fines of $5000 on Nazemzadeh and $1000 on Rahmati. 12 In an order dated January 11, 2010, the Circuit Court for Montgomery County affirmed the Board’s final decision. However, the court vacated the fines imposed on appellants and the permanent cease and desist order against Dr. Mesbahi on the grounds that they were “arbitrary and capricious because the Board did not sufficiently articulate its reasons for imposing these sanctions.” The court remanded the case for further proceedings, specifically instructing that “the Board, during any such proceedings, shall articulate its reasons for imposing the fine amounts upon Petitioners and for the cease and desist order imposed upon Dr. Mesbahi permanently banning her from performing laser hair removal surgery.” DISCUSSION In Maryland, an appellate court’s review of an administrative agency’s decision “is limited to determining if there is substantial evidence in the record as a whole to support the agency’s findings and conclusions, and to determine if the administrative agency’s decision is premised upon an erroneous conclusion of law.” United Parcel Service, Inc., v. People’s Counsel, 336 Md. 569, 576 , 650 A.2d 226 (1994).

See SG § 10-222 (discussing judicial review under the Administrative ³³⁰ Procedures Act). 13 As appellee points out in its brief, appellants do not dispute that there was substantial evidence in the record to support the Board’s factual findings that Nazemza-deh and Rahmati were not licensed health professionals and that they performed laser hair removal procedures at Dr. Mesbahi’s office without any medical supervision. Appellants’ remaining arguments concern questions of law or procedure. An appellate court generally owes no deference to agency decisions on pure issues of law, and is free to substitute its judgment for that of the agency on such questions. See Liberty Nursing Ctr. v. Dept.

Of Health & Mental Hygiene, 330 Md. 433, 443 , 624 A.2d 941 (1993). However, as the Court of Appeals explained in Finucan v. Maryland Board of Physician Quality Assurance: ‘Even with regard to some legal issues, a degree of deference should often be accorded the position of the administrative agency.’ We, therefore, ordinarily give considerable weight to the administrative agency’s interpretation and application of the statute that the agency administers. Furthermore, the expertise of the agency in its own field of endeavor is entitled to judicial respect. 380 Md. 577, 590 , 846 A.2d 377 (2004) (internal citations omitted). Finally, where the agency exercises its discretionary authority, as when imposing sanctions, its decision will be ³³¹ disturbed only if arbitrary or capricious.

See Spencer v. Board of Pharmacy, 380 Md. 515, 529 , 846 A.2d 341 (2004). I. The Board’s Reliance On DR 00-1 In Concluding That Laser Hair Removal Constitutes The Practice of Medicine Appellants first argue that the Board erroneously relied on DR 00-1 in concluding that laser hair removal is a surgical procedure that constitutes the practice of medicine. Appellants cite three reasons that the Board’s reliance on DR 00-1 is misplaced: (1) the Board erroneously treated DR 00-1 as a binding regulation; (2) DR 00-1 is void; and (3), even assuming DR 00-1 is valid and applicable, there was not substantial evidence to support the Board’s decision. We will address each of these in turn.

A. Board’s Treatment Of DR 00-1 As A Binding Regulation As an initial matter, appellants claim that the Board improperly treated DR 00-1 as if it were binding on appellants. We disagree. The Board correctly stated that it, not the appellants, was bound by DR 00-1. See SG § 10-305(b) (“A declaratory ruling binds the unit and the petitioner on the facts set forth in the petition”); COMAR 10.32.16.04A (same).

In Baltimore City Board of School Commissioners v. City Neighbors Charter School, the Court of Appeals explained that declaratory rulings are binding on an agency, but are “treated more in the nature of contested case adjudications than the adoption of a regulation.” 400 Md. 324, 346 , 929 A.2d 113 (2007). Administrative agencies do not need to strictly apply the principle of stare decisis when adjudicating contested cases, but “as a practical matter agencies frequently do use their prior decisions as precedents, and the standards through which a statute is implemented in one proceeding may well reappear in later proceedings.” Balt. Gas & Electric Co. v. Public Svc. Comm’n, 305 Md. 145, 167 , 501 A.2d 1307 (1986).

Here, the Board gave the appropriate weight to DR 00-1, treating it akin to a precedential adjudicatory ruling. The ³³² Board recognized that it could have reconsidered DR 00-1, but “none of the respondents presented any expert testimony to try to persuade the Board that the ruling should be reexamined.” In other words, appellants failed to prove to the Board that the facts in this case were significantly different from the facts in the petition on which DR 00-1 was based, or that DR 00-1 should otherwise be reconsidered. It appears that appellants would have the Board disregard DR 00-1 altogether, and conduct a de novo evaluation of whether laser hair removal constitutes the practice of medicine. However, the Board was not free to ignore its prior policy statements.

SG § 10-805(b). See United States v. Heffner, 420 F.2d 809, 811 (4th Cir.1969) (holding that “an agency of the government must scrupulously observe rules, regulations or procedures which it has established”); Hopkins v. Maryland Inmate Grievance Comm’n, 40 Md.App. 329, 335-36 , 391 A.2d 1213 (1978); Drafter’s Note to SG § 10-214, 1993 Laws of Maryland Ch. 59. We also reject the appellants’ contention that, by relying on DR 00-1, the Board gave it the force of a regulation. As we just discussed, the Board properly treated DR 00-1 as binding precedent, not as a regulation.

It is quite clear that appellants were charged with violating the Maryland Medical Practice Act, not DR 00-1. Moreover, we do not agree with appellants that the Board was required to address its laser hair removal policy through the formal rulemaking process. An administrative agency generally has discretion over whether to proceed by adjudication or by rulemaking in developing a particular policy. See Consumer Protection Div. v. Consumer Publishing Co., 304 Md. 731, 754-56 , 501 A.2d 48 (1985).

However, an agency must follow the formal rulemaking process when “a policy of general application, embodied in or represented by a rule, is changed to a different policy of general application.” CBS, Inc. v. Comptroller of Treasury, 319 Md. 687, 696 , 575 A.2d 324 (1990). Here, the Board’s reliance on DR 00-1 did not change prior policy of general application to a new policy of general appliea ³³³ tion. Appellants have submitted no evidence that, prior to their hearing, it was the generally applicable policy of the Board that a person who is not a nurse, physician assistant, or licensed health professional of any kind, may perform laser hair removal procedures without any medical supervision. 14 At most, appellants argue that they personally believed that to be the policy of the Board, a contention which we address in section III, infra. B. Validity of DR 00-1 Appellants also challenge the validity of DR 00-1 itself, arguing that the ruling is void because the Board failed to follow its own regulations in issuing the ruling.

The appellants did not make this argument in the proceedings below, and the Board argues that the argument is therefore waived. We agree. The Court of Appeals has repeatedly emphasized that a reviewing court “may not pass upon issues presented to it for the first time on judicial review and that are not encompassed in the final decision of the administrative agency.” Dept. Health & Mental Hygiene v. Campbell, 364 Md. 108, 123 , 771 A.2d 1051 (2001).

Appellants cite Motor Vehicle Administration v. Lytle, 374 Md. 37 , 821 A.2d 62 (2003), for the proposition that pure questions of law, like issues of statutory construction, are reviewable even if not raised in the initial agency proceedings. In Lytle , the Court held that the MVA did not waive its right to appeal the ALJ’s interpretation of a statute, even though it appeared at the administrative hearing only through submit ³³⁴ ted documents, presenting no additional argument. Id. at 55-56 , 821 A.2d 62 . The Court held that it was only limited to the hearing record on questions of fact, and that the purely legal issue of statutory interpretation was reviewable because the “grounds relied on by the agency are identical to the issues the MVA raises [on appeal.]” Id.

Thus, Lytle is fully consistent with Campbell and offers no support for the appellants. The administrative decision in this case in no way encompasses the question of whether the Board complied with procedures set forth by SG § 10-304(b) and COMAR 10.32.16.03(c) when it issued DR 00-1. Therefore, despite the purely legal nature of the question, it is not preserved for appellate review. C. Board’s Conclusion That Laser Hair Removal Is The Practice Of Medicine Next, appellants argue that “even assuming DR 00-1 was valid and could be used against appellants, the Board’s decision that laser hair removal constitutes the practice of medicine is entitled to little deference and was erroneous.” Rather than focusing on the board’s decision at the hearing below that laser hair removal constitutes the practice of medicine, appellants have chosen to attack the substance of DR 00-1 and the process by which the Board arrived at that ruling.

The Board issued DR 00-1 in 2002, one year before Nazemzadeh and Rahmati began performing laser hair removal and seven years prior to appellants’ hearing in this case. There is a statutory procedure for judicial review of declaratory rulings, SG § 10-305, and agency reconsideration of such rulings, COMAR 10.32.16.04. The time for appealing DR 00-1 has long since expired. See Md. Rule 7-203.

Thus we will not review DR 00-1, except to the extent that the ruling was discussed by witnesses at appellants’ hearing and relied upon by the Board in its final decision. The issue before us is whether the Board erroneously concluded that laser hair removal constituted the practice of medicine. Athough we review questions of law de novo, we give considerable weight to the Board’s interpretation of its own statute, and we generally will not disturb the ³³⁵ Board’s ruling as long as its interpretation of the statute is reasonable. See Bd. of Physician Quality Assurance v. Banks, 354 Md. 59, 69-70 , 729 A.2d 376 (1999).

As defined in, HO § 14—101(l)(1), to “practice medicine” is “to engage, with or without compensation, in medical: (i) diagnosis, (ii) healing, (iii) treatment, or (iv) surgery.” The question before the Board at appellants’ hearing was whether laser hair removal constituted “surgery,” as suggested by DR 00-1. Karen Wulff, a public policy analyst for the Board of Physicians, testified that the Practice of Medicine Committee (“POMC”) had made