October 2007
A $1.1 million fine imposed by the Food and Drug Administration (FDA) on a Maryland radiology center and its owner for performing 192 mammograms after the facility’s certification to do so had lapsed is not an excessive penalty, the U.S. Court of Appeals for the Fourth Circuit ruled August 17 (Korangy v. FDA, 4th Cir., No. 05-2300).
Under the Mammography Quality Standards Act (MQSA), Congress mandated that facilities providing mammographies be certified by FDA and authorized up to $10,000 in civil monetary penalties for each offense, Judge William B. Traxler said, writing for the court of appeals.
Here, FDA imposed a $3,000 penalty on both Dr. Amile A. Korangy and Korangy Radiology Associates (KRA), a mammography facility wholly owned by Dr. Korangy, for failing to obtain the required certificate to continue to perform mammograms and imposed a penalty for each of the 192 separate mammographies performed during the certification lapse, Traxler said. A penalty of $3,000 per violation "represents a substantial reduction of the penalty authorized by Congress," Traxler said.
Although the combined penalty of over $1.1. million is "substantial," the gravity of the offense committed by Dr. Korangy and KRA "does not diminish because they repeatedly committed the same offense," Traxler added. KRA lost its certification because its equipment failed to produce an image of adequate quality, the judge noted. "[T]he repeat offenses mean that more early [breast] cancers may have been missed and more patients may have missed their best chance for a cure."
The ruling affirmed the decision of the administrative law judge who imposed the monetary penalty and of the Departmental Appeals Board of the Department of Health and Human Services, which upheld the administrative law judge’s decision in a final agency determination.
Separate Penalties Warranted
In 1999, FDA issued a mammography facility certificate for the Baltimore Imaging Center, which was operated by KRA. An expiration date of May 6, 2002, was noted on the certificate.
In April 2002, the American College of Radiology (ACR), an FDA-approved accreditation body that inspects mammography equipment to determine compliance with MQSA, informed Dr. Korangy that the mammography equipment at his facility did not meet the necessary standards because it produced images of unacceptable quality.
Dr. Korangy purchased a new mammography unit that was provisionally certified for use on July 25, 2002, but continued to use the old unit. As a result, from May 7, 2002, (the day after his original certificate expired) until July 25, 2002, Korangy performed 192 mammograms at the facility without the required certification. When FDA learned Dr. Korangy was performing mammographies without certification, it filed an administrative complaint and sought civil penalties against both Dr. Korangy and KRA.
On appeal to the circuit court, KRA argued that FDA was not authorized under the MQSA to impose a penalty on it because it was merely a "facility."
Traxler agreed with KRA’s interpretation of 42 U.S.C. §263b(h)(3)(D), which authorizes penalties only for violations by "an owner, operator, or any employee of a facility required to have a certificate," not the facility itself. But, the judge noted, KRA already admitted in earlier proceedings that it was the owner of the mammography facility, not just a facility. It "cannot now be heard to challenge the ownership that it previously admitted," Traxler said.
Adequate Notice
Traxler also dismissed Dr. Korangy’s claims that he never received notice that his facility could face civil monetary penalties for continuing to operate without proper certification. Dr. Korangy argued that FDA’s guidance manual requires the agency to notify a facility after a certification lapse that the performance of mammograms could result in the imposition of civil penalties.
But Traxler agreed with the ALJ’s conclusion that Korangy received sufficient notice, both that his certification was about to expire and that he could face penalties if he continued to operate without certification.
Traxler acknowledged that the agency’s guidance manual requires prior notice to be given. However, he noted that "nothing in the manual mandates that notice must come in any particular form or that the notice must come from the FDA itself."
Here, the certificate FDA provided to Dr. Korangy and KRA in 1999 showed on its face that it would expire on May 6, 2002, Traxler said. Moreover, in April 2002, the ACR sent Dr. Korangy a letter stating that his equipment had failed the accreditation examination, that he should immediately stop performing mammograms, and that his continued use of the failed equipment "may result in official sanction and fines from the FDA."
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