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In re Suspension or Revocation of the License of John G. Costino

October 12, 2010


On appeal from the New Jersey State Board of Medical Examiners, Division of Consumer Affairs, Docket No. BDS 736-08.

Per curiam.


Argued September 14, 2010

Before Judges Wefing, Payne and Baxter.

John G. Costino, Jr., D.O. appeals from a December 21, 2009 final agency decision of the State Board of Medical Examiners (the Board), revoking Costino's medical license for a minimum period of five years and imposing substantial monetary penalties based upon a finding that Costino fraudulently prescribed Percocet and deliberately falsified medical records to justify the issuance of those prescriptions. After a careful review of defendant's contentions in light of the record and applicable law, we reject his arguments that the Board: 1) abused its discretion in not remanding the case to the Administrative Law Judge (ALJ) to consider newly-discovered evidence before the Board issued its final decision; 2) made factual findings that was not supported by competent, credible and substantial evidence; and 3) imposed a penalty of license revocation and assessment of costs that were "disproportionate" to any offense he may have committed and "shocking to one's sense of fairness." We affirm.


At some point prior to April 2007, the United States Drug Enforcement Administration (DEA), the Cape May County Prosecutor's Office, the United States Postal Inspector, and the Insurance Fraud section of the Department of Law and Public Safety commenced a joint investigation to determine whether Costino was issuing prescriptions for Percocet, a narcotic, without medical justification and whether Costino was billing insurance carriers for services not performed. As part of that investigation, Little Egg Harbor Township police officer Tonya Anderson, acting in an undercover capacity, made seven visits to Costino's North Wildwood office pretending to be an exotic dancer and requesting Percocet to help her "relax and unwind." During each of those visits, Anderson covertly recorded her entire conversation with Costino.

On her first undercover visit, which took place on April 12, 2007, Anderson told Costino she had come to his office because she was on her feet all day, and it was hard for her to "unwind" at the end of her workday. She explained that one of the other dancers had given her some Percocet pills, which she had taken "just to kind of unwind" and the Percocet had helped her "relax." She explained that she was hoping Costino would give her a prescription for Percocet.

Costino told Anderson that Percocet was a pain medication, that it was "not for relaxation," and that Anderson should not want such an "addictive" medication unless "you've really got a real problem." When Anderson said the medication had worked for her before, Costino asked if she were addicted. Anderson stated she was not, and that she only used Percocet on nights when she worked.

Costino then asked Anderson if she was experiencing any pain; Anderson replied, "[n]o, no I wouldn't say pain. I don't have any" and stated that she had no "spine issues" or "major issues" of any kind. Costino did not conduct a physical examination of Anderson's neck or back or assess her physical functioning. Instead, his examination was limited to listening to Anderson's heart and lungs with a stethoscope. Anderson never said she had "pain" or "even soreness," and Costino left blank the "chief complaint" section of Anderson's medical record and entered a minus sign*fn1 next to "spine and extremities" on her medical chart.

Despite all of these negative findings, Costino entered a diagnosis of "acute lumbar and thoracic strain and sprain" in Anderson's chart. He gave Anderson a prescription for thirty 7.5 milligram Percocet tablets, instructing her to take one tablet "four or five nights a week," which would be enough "for like six weeks." When Anderson asked him when she should come back for her next visit, he answered "between five or six weeks." For the April 12, 2007 visit, Costino billed the insurance company using the current procedural terminology (CPT) code 99204, which requires the physician to complete a "comprehensive history, a comprehensive examination" and make a medical decision of "moderate complexity."

Anderson's next undercover office visit with Costino occurred on May 2, 2007. Anderson told Costino that the Percocet he prescribed had been "helping" her. Explaining that she had no discomfort at all, she told Costino the Percocet was "more [for] the relaxation." Like the visit on April 12, 2007, Costino's physical examination of Anderson was limited to listening to her chest with a stethoscope. The visit lasted nine minutes, and again, even though Costino entered a minus sign as his findings concerning Anderson's extremities and again left the "chief complaint" section blank, he wrote a diagnosis of acute lumbar sprain and strain.*fn2 Moreover, even though he told Anderson on April 12, 2007 that the prescription he was writing would provide her with enough medication to last six weeks, he gave her a prescription for thirty more Percocet tablets during the May 2, 2007 visit without asking her why she needed a refill a mere twenty days later.

During Anderson's third undercover office visit on June 7, 2007, she asked Costino if he would give her a prescription for ten milligram Percocet pills, which was stronger than the 7.5 milligram dosage Costino had prescribed on each of the first two visits. Anderson's explanation for that request was limited to her statement that she wanted "something a little stronger that lasts a little longer." Without asking her any questions and without conducting a physical examination to determine if Anderson was experiencing any problems with her back or legs, Costino immediately agreed to increase the dosage, stating "well you can go to 10's, yeah."

He reminded Anderson not to take the pills every day or she would develop a tolerance to the medication. The visit lasted approximately eight minutes, with Costino again limiting the examination to Anderson's chest sounds and writing the same diagnosis in her medical record. At this visit, Anderson signed a pain management agreement, which stated, among other things, that she would be honest about her pain and her reaction to the medicine, she would not use illegal substances, she would not share or sell her medication, and she would not obtain pain medication elsewhere.

On June 26, 2007, Anderson visited Costino's office, this time expressing a concern that the ten milligram Percocet pills he had prescribed on June 7 were no more effective than the 7.5 milligram pills he had prescribed earlier. After attributing the lack of any difference between the two to Anderson having developed an increased tolerance for the medication, he gave her another prescription for thirty ten milligram Percocet tablets.

The visit lasted approximately nine minutes, and Costino's examination, diagnosis and negative findings remained the same.

During the fifth visit, which occurred on July 13, 2007, again Anderson did not mention any pain or soreness, nor did she complain of any problems. The discussion of how Anderson had been feeling since her last visit was confined to the following:

[Costino]: So how's everything going, alright?

[Anderson]: Okay.

[Costino]: No real problems.

[Anderson]: No.

The remainder of the visit involved discussion of Costino's office hours, the weather and Anderson's approaching birthday. The physical examination, again limited to listening to her heart and lungs with a stethoscope, concluded with Costino's statement that Anderson had "nice healthy lungs." He made no attempt to determine if she was experiencing any back or leg pain and did not examine her spine. At the end of the visit, Costino gave Anderson a prescription for thirty ten milligram Percocet tablets.

On August 3, 2007, Anderson again visited Costino's office, this time accompanied by DEA Special Agent Margarita Abbattiscianni, who also posed as an exotic dancer. After Abbattiscianni told Costino she was hoping he would prescribe Percocet for her as he had done for Anderson, Costino asked her to describe any medical problems she was experiencing. Abbattiscianni responded "[i]t's just the pain and up all night. Long hours." Later in the examination, however, Abbattiscianni said that she was "100% healthy" and was experiencing no problems whatsoever. After listening to Abbattiscianni's chest sounds, which was the extent of his physical examination, the following exchange occurred:

[Costino]: Deep breath, again. Well you're clear as a bell too. Um you want to do the same thing? Take one of these [P]ercocets?

[Abbattiscianni]: Yes please.

[Costino]: Do you have any back pain every now and then?

[Abbattiscianni]: No back pain whatsoever.

[Costino]: No?

[Abbattiscianni]: Nothing, no.

. . . . [Costino]: Just take it when you're done your work you know it'll just relax you, takes the pain away.

[Abbattiscianni]: Um hum, um hum.

[Costino]: You know I'm sure you get these acute strains and sprains and this and that.

[Abbattiscianni]: You know I'm pretty flexible so not much pain. I do a lot of exercise[.]

Costino spent approximately three to five minutes taking a history from Abbattiscianni and discussing why she wanted Percocet. As with Anderson, without making any positive findings to support such a diagnosis, Costino diagnosed Abbattiscianni with thoracic-lumbar sprain and strain and issued her a prescription for thirty ten milligram Percocet tablets. He did the same for Anderson.

Anderson and Abbattiscianni visited Costino for the last time on August 23, 2007. Neither one complained of any pain and assured Costino they were doing well with the medication. When Abbattiscianni informed Costino that she and Anderson were about to leave for Florida for an extended period, he offered, without any request from either of them, to "double the amount" and handed each of them a prescription for sixty ten milligram tablets.

On December 5, 2007, the Attorney General filed a verified complaint with the Board accusing Costino of violating applicable regulations by indiscriminately prescribing Percocet and "upcoding" (charging insurance companies for services not provided).

The Board held a hearing on December 12, 2007 to consider the Attorney General's application for temporary suspension of Costino's medical license. The Board considered Costino's testimony that because the undercover agents gave no indication of addiction to, or diversion of, medication, he had agreed to give them prescriptions for Percocet because he believed they were experiencing pain resulting from their work as exotic dancers. The Board issued an order December 20, 2007 temporarily suspending Costino's medical license.

In anticipation of the plenary hearing before the ALJ, the Board issued an order on September 10, 2008 requiring the Attorney General to provide Costino with all medical records of Anderson or Abbattiscianni dealing with conditions or injuries of the cervical, thoracic or lumbar spine from April 12, 2006 to August 23, 2007. In response to the Board's September 10, 2008 order, Anderson issued a certification on September 19, 2008 asserting that from April 12, 2006 to August 23, 2007 she had no ...

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