Katz v. South Dakota State Bd. of Medical and Osteopathic Examiners

Citation432 N.W.2d 274
Decision Date05 January 1989
Docket NumberNo. 16109,16109
PartiesIn the Matter of the Application of Harry M. KATZ, M.D., Appellant, v. SOUTH DAKOTA STATE BOARD OF MEDICAL AND OSTEOPATHIC EXAMINERS, Appellee.
CourtSupreme Court of South Dakota

Curtis L. Carroll, Vermillion, and Tom D. Tobin, Alvin Pahlke of Tobin Law Office, P.C., Winner, for appellant.

John H. Zimmer of Zimmer and Duncan, Parker, for appellee.

WUEST, Chief Justice.

Dr. Harry M. Katz (Katz) appeals a circuit court order upholding the decision of the State Board of Medical and Osteopathic Examiners (Board) denying his application for a license to practice medicine in South Dakota. Katz's licensure was requested upon reciprocity without an examination. We affirm.

Katz obtained his medical degree from the University of Alabama School of Medicine in Birmingham, Alabama, in 1950. In 1951, he obtained by written examination his initial medical license from the state of Alabama. This license was surrendered in 1972, after Katz was convicted by a federal jury in Florida of five felony counts of making false and fraudulent Medicare claims. 1 A subsequent application to reinstate the license was denied.

In 1953, Katz obtained by examination a license to practice medicine in Florida. This license was revoked in 1968 for improperly performing physical examinations for the Federal Aviation Administration (FAA) and permitting an unlicensed employee to practice medicine.

The record reveals that Katz also obtained licenses to practice medicine in Kentucky (1951) and in Missouri (1952). These licenses were obtained by reciprocity. Both licenses were revoked by the respective states, although Katz's license to practice in Missouri was later reinstated and is currently in force.

In 1973, Katz obtained a temporary institutional license to practice medicine in the Louisiana State Penitentiary and practiced under that license for seven and one-half years. That license is no longer in force and Katz's application for full licensure in Louisiana was denied. Katz's application for licensure in Kansas was also denied and his application for a license to practice in the District of Columbia was withdrawn prior to a contested hearing.

The record also indicates that Katz was previously refused hospital privileges in two Florida hospitals--one in 1955 and another in 1956--and in one Missouri hospital in 1982. In addition, Katz's license to distribute controlled substances in Missouri was placed on probationary status for five years in 1982, because his application for the license failed to disclose his prior offenses and license revocation proceedings.

Katz applied for licensure by reciprocity in South Dakota on September 17, 1981. Although he was no longer licensed to practice medicine in Alabama, Katz based his request for licensure on his written examination grades from that state. After a hearing on May 4, 1982, the Board entered a decision denying Katz a license to practice medicine in South Dakota. The Board determined that it was not in the best interest of the state to grant licensure to Katz for the following reasons:

(1) Katz's license to practice medicine in Florida was revoked for performing improper and incomplete FAA physical examinations and permitting an unlicensed employee to perform medical services;

(2) Katz was adjudged guilty of five felony counts of making false and fraudulent Medicare claims which resulted in his being incarcerated in a federal prison;

(3) After Katz's conviction of felonious Medicare fraud in Florida, his license to practice medicine in Alabama was surrendered or revoked and a subsequent application to reinstate the license was denied;

(4) Katz's application for licensure in South Dakota was predicated on examination grades he submitted from Alabama and Florida, states in which he no longer held current licenses to practice; and

(5) Katz was ineligible for medical licensure in this state without examination based upon his application and material furnished by him.

The Board further concluded that Katz's behavior upon which the revocation of his licenses was predicated would constitute unprofessional and dishonorable conduct in this state, as set forth in SDCL 36-4-30. 2

On July 14, 1986, Katz again applied to the Board for a license to practice medicine in this state. His request for licensure by reciprocity without examination was again based on his written examination grades from Alabama and certification of those grades from the Alabama Board of Medical Examiners accompanied his application. The Secretary of the Alabama Board of Medical Examiners, however, refused to certify that Katz's certificate to practice medicine in Alabama had not been suspended or revoked and that Katz possessed good moral character or was worthy of professional recognition. The Secretary further refused to recommend to the Board that Katz was a fit and proper person to receive recognition as an applicant for reciprocity.

In his application, Katz disclosed his previous conviction for Medicare fraud, the revocation of his licenses to practice medicine in Florida, Alabama and Kentucky, the denial of his applications for licensure in Louisiana and Kansas, and his having been refused hospital privileges in Florida and Missouri. Katz, however, failed to disclose that his controlled substances certificate had been placed on a five-year period of probation by the state of Missouri in 1982.

The Board conducted a hearing on Katz's application for licensure by reciprocity on January 14, 1987, at which it took notice of its findings of fact, conclusions of law and decision from Katz's previous application. Subsequently, the Board entered findings of fact, conclusions of law and its decision again denying Katz's application for a South Dakota license by reciprocity. The Board's denial was essentially based upon two grounds:

(1) Katz's request for licensure by reciprocity without examination was based upon his written examination grades from Alabama, but his license in Alabama had been revoked. His current license from Missouri had been obtained by reciprocity and was not issued upon any written examination. SDCL 36-4-19 only authorizes the Board to issue a license by reciprocity without examination if the applicant holds a currently valid license that was obtained by written examination. Because Katz's current license was not obtained by written examination, he could not be granted licensure by reciprocity.

(2) Katz's conduct which resulted in the revocation of his license in Florida and his conviction for Medicare fraud resulting in the revocation of his license in Alabama constituted unprofessional and dishonorable conduct under SDCL 36-4-30. This alone was basis for which licensure could be denied.

On appeal to this court, Katz essentially raises three issues. First, Katz contends that SDCL 36-4-19 operates to deny him licensure in this state in violation of his right to substantive due process under the 14th Amendment to the United States Constitution 3 and Article VI, Sec. 2 of the South Dakota Constitution. 4 Secondly, Katz claims that the Board was arbitrary and capricious in finding that he committed acts of unprofessional conduct. Finally, Katz asserts that the Board violated his right to procedural due process in that it was predisposed to deny his application.

We first address whether the denial of Katz's licensure by reciprocity under SDCL 36-4-19 violated his right to substantive due process under the federal and state constitutions. SDCL 36-4-19 provides:

The board of medical and osteopathic examiners may in its discretion, without examination, issue a license to any applicant holding a currently valid license or certificate which shall have been issued to an applicant by the examining board of the District of Columbia, or any state or territory of the United States, or the national board of osteopathic physicians and surgeons or any province of Canada, from which a license was obtained by a written examination given by such board, if the legal requirements of such examining board at the time of its issuing such license or certificate shall be in no degree or particular less than those of this state at the time when such license is presented for registration.... (Emphasis supplied).

This statute authorizes the Board to waive the examination usually required of applicants for licensure pursuant to SDCL 36-4-11 5 and issue a license by reciprocity to an applicant who holds a current license from another state issued upon written examination. Katz challenges the constitutionality of SDCL 36-4-19 as it applies to him. He contends that the statute's requiring a valid medical license issued upon written examination by another state as a prerequisite for licensure by reciprocity in this state is unreasonable and unrelated to the objectives sought to be achieved by SDCL title 36. We disagree with Katz's contention.

The enactment of laws regulating the practice of medicine is universally regarded as a duty of the state in the exercise of its inherent police power. State v. Doran, 28 S.D. 486, 491, 134 N.W. 53, 55 (1912). See also Michigan Ass'n of Psychotherapy v. Blue Cross, 118 Mich.App. 505, 325 N.W.2d 471, 480 (1982); State, Ex Rel. Iowa Dept. of Health v. Van Wyk, 320 N.W.2d 599, 605 (Iowa 1982); State Bd. of Registration v. Giffen, 651 S.W.2d 475, 479 (Mo. banc 1983); McCoy v. Com., Bd. of Medical Ed. & Licensure, 37 Pa.Cmwlth. 530, 391 A.2d 723, 727 (1978). The purpose of such laws is to "safeguard the public health and protect the public from incompetence, deception and fraud." Blue Cross, 325 N.W.2d at 479. See also Van Wyk, 320 N.W.2d at 605; Hill v. Highland Park General Hospital, 80 Mich.App. 334, 263 N.W.2d 362, 365 (1978); 70 C.J.S. Physicians and Surgeons Sec. 7 at 385 (1987). It is well-established that the state not only may prescribe qualifications which persons must possess...

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