Prescription Audits: When the DEA or AG Come Knocking Anticipating and Responding to Heightened Investigations of Prescribing and Dispensing Practices

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Prescription Audits: When the DEA or AG Come Knocking Anticipating and Responding to Heightened Investigations of Prescribing and Dispensing Practices WEDNESDAY, AUGUST 16, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Ronald J. Friedman, Shareholder, Karr Tuttle Campbell, Seattle Lee H. Rosebush, Partner, BakerHostetler, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 PRESCRIPTION AUDITS: WHEN THE DEA OR AG COME KNOCKING (2017) Ronald J. Friedman, JD Karr Tuttle Campbell, Seattle, WA

6 WHO MAY VISIT? FEDERAL GOVERNMENT: SEARCH WARRANT OR DEA ADMINISTRATIVE INSPECTION AUTHORITY STATE AG: SEARCH WARRANT OR BOARD OF MEDICINE/DEPARTMENT OF HEALTH INVESTIGATION 6

7 WHAT IS AT RISK? CRIMINAL ACTIVITY = CRIMINAL ACTIVITY MORE ROUTINE CIVIL AND ADMINISTRATIVE INVESTIGATIONS NO LESS IMPORTANT.. CONSEQUENCES: FINES, RESTRICTIONS TO PRACTICE, REVOCATION AND SOMETIMES TURN CRIMINAL 7

8 DOCTORS ARE A TARGET 8

9 DOCTORS ARE A TARGET 9

10 DOCTORS ARE TARGETS 10

11 WHO IS AT RISK? ASSESSING RISK LEVELS: TYPE OF PRACTICE/TYPE OF ACTIVTY 11

12 RISK? 3 GREATEST RISK FACTORS AT FEDERAL/STATE LEVEL: PAIN VS. PODIATRY ARE YOU PRESCIBING/DISPENSING OPIATES OR OTHER CS OF ABUSE? DISPENSING VS PRESCRIPTION SUBOXONE 12

13 RISK FACTOR 1: OPIATE EPIDEMIC HUGE PRESSURE ON REGULATORS RIGHT NOW CLAMP DOWN AT ALL LEVELS DEA Tactical Diversion Squads POLITICAL PRESSURE PDMPs in Every State 13

14 PDMPS 8/14/

15 BROADER USE OF PDMPS Privacy Challenges defeated Much more sharing within State and With Feds Mining data for Outliers Investigations and Actions based on Improper Prescribing as revealed by data Pure metrics driven Greatest new area of risk Inconsistent As to Need for MD Review 15

16 MORE STATE PAIN RULES Many more states enacting prescribing guidelines or rules Requiring ICD-10 Diagnosis Codes (EG, Ohio) Feds new Prosecutor Task Forces 16

17 NEW FEDERAL TASK FORCES NYT August 2, 2017: US Prosecutors Will Help Addiction-Ravaged Cities COLUMBUS, Ohio The Justice Department will dispatch 12 federal prosecutors to cities ravaged by addiction who will focus exclusively on investigating health care fraud and opioid scams that are fueling the nation's drug abuse epidemic, Attorney General Jeff Sessions said Wednesday. 17

18 NEW FEDERAL TASK FORCES Sessions said the group of prosecutors he has dubbed the "opioid fraud and abuse detection unit" will rely on data in their efforts to root out pill mills and track down doctors and other health care providers who illegally prescribe or distribute narcotics such as fentanyl and other powerful painkillers. What does that mean??? A lot of potential for physicians being caught in crosshairs and chilling impact 18

19 ADVICE Center of the Road Driving (Prescribing) Is medication contributing to functionality of patient apart from addiction? Pay for staff to Review PDMPs before all Prescribing Try not to Dispense any CS; All prescriptions. 19

20 DEA ADMINISTRATIVE INSPECTION DEA Administrative Inspection Authority: Consent or Warrant (21 USC Section 880) Do I have to consent? What are they inspecting? Required records: So if no dispensing, no visit No search of sales or financial data Generally, not looking at patient chart Do I have to speak? What if I do? If dispensing, detailed records: Acquisition records, invoices signed and dated; biennial inventory; dispensing log; destruction records (21 CFR Sections 1304 and ; Diversion Website) 20

21 DISPENSING LOG The Name of the Substance Each Finished Form (10mg tab) & The Number of Units Name & Address of the Person to whom it was Dispensed Date of Dispensing Number of Units Dispensed Written or Typewritten Name or Initials of the Dispenser ** Beware multiple inventories/dea #s/clinic DEA # 21

22 PRESCRIPTIONS Law Enf can Multi-source prescriptions (pharmacy and/or practice) Trend in disciplinary actions based upon incomplete scripts: Dated as of, and signed on, the day when issued Full name and address of patient Drug name, strength, dosage form, quantity prescribed, direction for use Full name, address, and DEA registration of the practitioner And in some States, ICD disease state code 22

23 SUBOXONE Required to Inspect Required records: Copies of prescriptions; Log of patients. Instead of Script Review, Prescription log (Patient Identifier, drug, strength, quantity, date) List of Questions 23

24 DEA DISCIPLINE Letter of Admonition MOU Civil Action and/or Order to Show Cause re. Revocation 24

25 STATE INSPECTIONS Much broader authority General requirement to cooperate. Much broader review of records and may also include charts. To Talk or not to Talk 25

26 GENERAL THOUGHTS RE. ANTICIPATING AND RESPONSE Protocol (handout) Fire drills Consult with counsel at least get some advice 26

27 Contact: Ronald J. Friedman

28 Prescription Audits: When the DEA or AG Come Knocking: Anticipating and Responding to Heightened Investigations of Prescribing and Dispensing Practices August 16, 2017 Lee H. Rosebush

29 29

30 Current Topics and Trends Examples of DEA Actions Individual Prescribers Hospitals Pharmacies Wholesalers Constructive Delivery 30

31 Image from: Pittsburgh Post-Gazette, available at 31

32 Examples of DEA Actions 32

33 Examples of DEA Actions Samples of Administrative Actions Actions Against Individual Prescribers Recordkeeping Medical Needs Other offenses Actions Against Pharmacies Valid Prescriptions Conducting a Proper Inventory Largest Controlled Substance Fine Actions Against Wholesalers Compliance Program Monitoring State Actions Largest Controlled Substance Fine 33

34 Actions Against Individual Prescribers Recordkeeping Sigrid Sanchez, M.D. Application for registration denied due to violations of recordkeeping, physical security, employee oversight provisions of CSA/regulations by pharmacy respondent. Responsible for prior actions of the original owner/operator who ceased employment and passed on responsibilities to the respondent. The revocation was upheld despite arguments that the violations underlying the revocation may not have been initially perpetrated by the respondent (i.e. poor recordkeeping merely continued from prior operations as opposed to abrogation of adequate recordkeeping upon transfer). 34

35 Actions Against Individual Prescribers Medical Need Clair L. Pettinger, M.D. Registration revoked after DEA determined that the practitioner had issued 9 prescriptions for controlled substances absent legitimate medical need to undercover DEA agents. The revocation was upheld despite: The practitioner s introduction of evidence that the undercover agents may have deliberately induced diversionary prescription through symptomology deception; Evidence that the practitioner had undertaken significant efforts to improve identification of legitimate versus non-legitimate medical need. 35

36 Actions Against Individual Prescribers Other Offenses Sassan Bassiri, D.D.S. Registration application denied in 2017 after DEA determined that the practitioner had pled guilty to three charges of health care fraud in 2011 The denial was upheld despite: North Carolina State Board of Dental Examiners allowing him to resume practicing dentistry subject to certain limitations, including that he practice for one year "under the supervision of a [North Carolina licensed] dentist" and only practice (with the Board's prior approval) at an institution like a hospital or sanatorium, a non-profit health care facility servicing low-income patients, or for a State of North Carolina government agency or entity. 36

37 Actions Against Individual Prescribers Other Offenses Kofi Etru Shaw-Taylor, M.D. Medical license suspended by state of Maryland in May 2017 for overprescribing opioids Pain clinic shut down after DEA raid 37

38 Actions Against Hospitals Drug Diversion - Abington Memorial Hospital Hospital paid $510,000 to settle allegations that the hospital s practices enabled its employees to divert controlled substances DEA investigation uncovered that a pharmacist stole more than 35,000 pills Incomplete medication inventories Altered or missing drug records Pharmacist plead guilty to 25 counts of possession with intent to distribute Hospital implemented new plan to handle controlled substances 38

39 Actions Against Hospitals Deficiencies in handling controlled substances - Dignity Health In 2017, the nation s fifth largest health system agreed to pay $1.55 million to settle allegations of deficiencies in the handling of controlled substances Hospital reported losses of over 20,000 tablets of controlled substances DEA investigation revealed deficiencies in accurate record keeping Hospital will comply with detailed compliance regimen for 2 years 39

40 Actions Against Hospitals Lax controls for controlled substances - Massachusetts General Hospital Hospital agreed to pay $2.3 million to settle allegations involving the Controlled Substances Act A pediatric nurse with a 12-year substance abuse problem injected himself with a controlled substance while at work A physician prescribed controlled substances without seeing patients Several nurses were able to divert prescription drugs for many years without being detected Medical staff failed to properly secure controlled substances, even, on occasion, bringing them to lunch. Hospital will implement corrective action plan, including: creation of internal drug diversion team and the creation of a full-time drug diversion compliance officer position 40

41 Actions Against Pharmacies Valid Prescriptions S&S Pharmacy (d/b/a Platinum Pharmacy & Compounding) Registration revoked and all controlled substances seized after informants made cash purchases of Schedule II narcotics (oxycodone) from pharmacy employees based on fraudulent prescriptions. The informants provided fraudulent prescriptions for oxycodone to the pharmacy. 41

42 Actions Against Pharmacies Conducting a Proper Inventory Top RX Pharmacy Registration revoked for multiple CSA/regulatory violations, including: - Failure to conduct initial inventory - Providing false information to controlled substance distributors - Failure to maintain accurate and complete records and/or account for controlled substances - Diluting promethazine syrup before dispensing - Dispensing controlled substances under circumstances in which it knew or should have known that the drugs were being diverted from non-medical, illegitimate purposes. The pharmacy failed to conduct initial inventory or maintain accurate records of controlled substances received, which led to further investigations of the pharmacy s dispensing practices. 42

43 Actions Against Pharmacies Valid Prescriptions- CVS The DEA alleged that between 2008 and 2011 two large retail pharmacies in Florida had purchased quantities of oxycodone that considerably surpassed the amount ordinarily purchased by retail pharmacies. - Further, the DEA alleged that the pharmacies had dispensed controlled substances to customers under circumstances indicating that the drugs were illegally diverted and had failed to appropriately monitor dispensing habits. - The pharmacies argued that the high volume of dispensing was due to the fact that the two locations, one of which was open 24 hours a day, were busy stores, and that both locations had made significant efforts to implement robust anti-diversion procedures. The pharmacies implemented several programs, such as monitoring prescriber habits, to help ensure controlled substances were being used properly. 43

44 Actions Against Pharmacies Largest Controlled Substance Fine- Walgreens Pharmacy On June 11, 2013, a large retail pharmacy chain agreed to pay $80 million in civil penalties to the DEA the largest ever settlement at time involving a pharmacy for allegations based on the Controlled Substances Act. The settlement resolves allegations that the pharmacy chain had an unprecedented number of record-keeping and dispensing violations under the CSA. Specifically, the DEA alleged that the pharmacy chain negligently allowed controlled substances, such as oxycodone, to be diverted for abuse and black market sale. 44

45 Actions Against Pharmacies Other recent allegations made by DEA against a large pharmacy chain: - A chain pharmacy knowingly filled prescriptions for controlled substances that were not issued for a legitimate medical purpose pursuant to a valid physician-patient relationship in Kentucky and in New York. - A pharmacy chain did not properly notify the DEA of significant theft and loss of controlled substances, which allowed the diversion of controlled substances to continue and undermining DEA s ability to investigate such thefts and/or losses. - At pharmacies in California, Pennsylvania and Maryland, a pharmacy chain either failed to maintain or failed to furnish to the DEA upon request records that are required to be kept under the CSA. 45

46 Actions Against Pharmacies Other recent allegations made by DEA against a large pharmacy chain: - A pharmacy chain failed to properly execute DEA forms used to ensure that the amount of Schedule II drugs ordered by it were actually received. - The DEA also conducted accountability audits of controlled substances at a pharmacy chain to determine whether the chain could properly account for Schedule II and III controlled substances purchased and dispensed. The results of the audits revealed significant shortages or surpluses of the most highly abused drugs, including oxycodone and hydrocodone products, reflecting a pattern of non-compliance with the requirements of the CSA and federal regulations that led to the diversion of controlled substances. 46

47 Settlements Involving Pharmacies Other recent allegations made by DEA against a large pharmacy chain: - Health system agreed to pay $850,000 to settle allegations that one pharmacy location violated the Controlled Substances Act by filling prescriptions that were incomplete and failing to maintain proper records. - Large retail pharmacy agreed to pay $8,000,000 to settle allegations that its pharmacies in Maryland violated the Controlled Substances Act by dispensing controlled substances pursuant to prescriptions that were not issued for a legitimate medical purpose. 47

48 Actions Involving Wholesalers Compliance Program Monitoring - Cardinal On May 15, 2012, a large wholesale distributor agreed to a two-year suspension of its license to ship controlled substances from its Florida center. The DEA suspended the wholesaler s registration based on allegations that it knew or should have known that 4 of its customers, including two pharmacies in Sanford, Florida, were inappropriately filling prescriptions for oxycodone. Specifically, the DEA alleged that the wholesaler: - Failed to maintain effective controls against the diversion of controlled substances, including failing to conduct meaningful due diligence to ensure that controlled substances were not diverted; and - Failed to detect and report suspicious orders of controlled substances as required by the CSA, on or before May 14,

49 Actions Involving Wholesalers State Actions The West Virginia Attorney General filed a lawsuit against 14 drug distributors alleging that the entities have benefited from the state s prescription drug abuse problem and seeking damages and attempting to cut off the so-called pill mill process. The lawsuit alleges that the distributors provide a bridge between drug manufacturers and the nation's vast network of retail pharmacies. These entities have been targeted before for allegedly not doing enough to recognize and stop the flow of addictive pain pills. 49

50 Actions Involving Wholesalers Largest Ever Controlled Substance Fine - McKesson On January 17, 2017, one of the nation s largest distributors of pharmaceutical drugs, agreed to pay a record $150 million civil penalty-- the largest ever settlement at that time involving allegations based on the Controlled Substances Act. The settlement resolves allegations that the distributor failed to design and implement an effective system to detect and report suspicious orders for controlled substances distributed to its independent and small chain pharmacy customers. The settlement requires the distributor to engage an independent monitor to assess compliance the first independent monitor of its kind in a Controlled Substances Act civil penalty settlement The distributor agreed to enhance compliance for five years 50

51 Constructive Delivery 51

52 Constructive Delivery Congressional Intervention - Will we finally get to see new legislation? - Senate Bill 2825 of the 113 th Congress ( ) was introduced as Ensuring Safe Access to Prescription Medication Act of Never moved forward DEA policy is that the delivery must still be to the patient even for injectable medication. 52

53 Atlanta Chicago Cincinnati Cleveland Columbus Costa Mesa Denver Houston Los Angeles New York Orlando Philadelphia Seattle Washington, DC These materials have been prepared by Baker & Hostetler LLP for informational purposes only and are not legal advice. The information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should consult a lawyer for individual advice regarding your own situation. 53