The COVID-19 pandemic has created many new enforcement priorities for the U.S. Department of Justice (DOJ). From selling ineffective personal protective equipment (PPE) to companies fraudulently seeking loan forgiveness under the Paycheck Protection Program (PPP), the DOJ has been extremely busy since the pandemic reached the United States a little over a year ago.

But, while the DOJ has focused its efforts on combating fraud and other crimes related to the pandemic, it has continued to wage other wars as well.

In particular, the DOJ has remained steadfast in its efforts to combat the nation’s opioid epidemic. They have unveiled several initiatives focused on limiting the supply of unlawful opioids in the U.S. over the past few years—such as its Opioid Fraud and Detection Unit and Prescription Interdiction & Litigation (PIL) Task Force.

While the DOJ is targeting distributors, gang leaders, and others involved in the distribution of illegal narcotics such as cocaine, heroin, and fentanyl, it is also targeting health care providers who are suspected of facilitating the diversion of prescription opioid medications.

For example, in February 2021, the DOJ issued three press releases highlighting cases it is pursuing against physicians, pharmacists, and clinics. These follow several similar press releases from January and throughout 2020. However, this particular set of cases exemplifies the broad range of allegations and charges the Justice Department is pursuing against health care providers:

• Clinic Owner Accused of Facilitating Pill Mill Scheme – On February 8, the Department of Justice announced charges against a clinic owner who is accused of, “provid[ing] a base from which a notorious ‘pill mill’ doctor dispensed massive amounts of controlled substances.” According to the DOJ, the clinic employed a doctor who was recently convicted on 13 counts of unlawful dispensation of controlled substances and three counts of health care fraud, and the clinic owner concealed her income from unlawful opioid sales and kickback payments in her bankruptcy filing after the alleged pill mill was shut down.
• Physician, Pharmacy, and Clinic Owners Charged with Unlawful Dispensation – On February 19, the DOJ announced that it has filed a civil complaint against a physician who, “wrote prescriptions for potent and dangerous opioids outside the usual course of professional practice,” for patients at a cash-only pain clinic. The physician and clinic owners, who were also charged, also jointly owned a pharmacy where patients would often get their prescriptions filled.
• Pharmacist Charged with Ignoring “Red Flags” for Diversion – On February 24, the DOJ charged a pharmacist with unlawfully distributing opioids by “repeatedly fill[ing] prescriptions while disregarding ample warning signs of diversion, or ‘red flags,’ indicating the prescriptions were not legitimate.” Among other red flags, the DOJ alleges that the pharmacist filled a high volume of prescriptions for an oral fentanyl spray from a doctor who had pleaded guilty to illegally distributing prescription opioids, ignored clear evidence of tampering with written prescriptions, and filled prescriptions for dangerous combinations and quantities of opioid medications.

The DOJ Views Health Care Providers as High-Risk Sources of Opioids for Dependent Users

As a result of cases like these, the DOJ views health care providers as high-risk sources of opioids for dependent users. While the vast majority of health care providers do their best to comply with the Controlled Substances Act and have no intention of diverting dangerous medications, over the past several years, cases like these have become commonplace. This has forced the DOJ to take a very close look at health care providers’ opioid prescription practices—and the DOJ does not presume that any provider is in compliance with the law.

“The vast majority of physicians, pharmacists, and clinic owners never have any intention of unlawfully distributing opioid medications. In fact, their intent is quite the opposite. However, the prevalence of fraud and diversion cases involving health care providers is significant enough that the DOJ views providers as a high-risk source of illegally-dispensed hydrocodone, oxycodone, fentanyl, and other opioid drugs.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

In order to target health care providers for opioid diversion and other prescription-related offenses, the DOJ relies on information from a variety of different sources. One key source of information is the Drug Enforcement Administration (DEA). The DEA conducts routine audits and inspections of registered providers; and, if a DEA audit or inspection uncovers evidence of possible diversion or other opioid-related prescription fraud, the DEA may work with the DOJ to pursue a civil or criminal investigation.

In addition to the DEA, the DOJ also relies on information from the Federal Bureau of Investigation (FBI), U.S. Department of Health and Human Services Office of Inspector General (DHHS-OIG), the Centers for Medicare and Medicaid Services (CMS), and CMS’s “fee-for-service” audit contractors. These entities are all responsible for auditing and investigating health care providers’ program billing practices; and, in many cases, apparent billing violations can raise questions about the propriety of providers’ opioid prescription practices as well.

The DOJ also regularly conducts opioid fraud and diversion investigations as the result of information supplied by health care providers’ employees and patients. This includes whistleblower complaints as well as tips submitted to the DOJ and other agencies. As a result of its focus on combating the nation’s opioid epidemic, the DOJ takes all allegations of opioid fraud and diversion seriously, and substantiated allegations can quickly lead to invasive and large-scale investigations.

Health Care Providers Need to Take the DOJ’s Focus Into Account When Developing and Implementing Their Compliance Policies and Procedures

Given the DOJ’s focus on targeting health care providers as a potential source of illegally dispensed and distributed opioid medications, providers must take appropriate measures to both ensure and document federal compliance. In the event of a DOJ investigation, being able to demonstrate compliance with consistent and up-to-date documentation can be an effective defense tactic for legitimate health care providers.

So, what does this entail?

There are numerous aspects to opioid prescription compliance for health care providers. These aspects vary from one type of provider to the next. While pharmacies bear the brunt of the responsibility since they are on the front lines, physicians, clinics, and other providers are also subject to stringent compliance obligations. Additionally, for physicians who have ownership interests in, or financial relationships with, pharmacies, clinics, and other entities, Stark Law, Anti-Kickback Statute, and Eliminating Kickbacks in Recovery Act (EKRA) compliance are important issues as well.

Recognizing that different types of providers will need to undertake different specific compliance measures based upon their respective roles in the opioid supply chain, some of the key areas of compliance regarding opioid fraud and diversion control include:

1. Determination of Medical Necessity

Physicians have an obligation to make appropriate determinations of medical necessity prior to issuing opioid prescriptions. But, physicians are not the only providers that have compliance obligations in this area. Clinics and pharmacies must also make determinations about when a patient’s particular circumstances present a risk for opioid abuse or diversion.

2. Access to Prescription Pads and Electronic Prescription Systems

In order to prevent diversion, physicians, clinics, hospitals, and other practitioners and facilities must restrict access to their prescription pads and electronic prescription systems. Failure to implement adequate access restrictions can lead to prosecution in the event of unauthorized access by patients, family members, or staff.

3. Opioid Prescription Inventory Management

For pharmacies, clinics, hospitals, and other facilities that have opioid medications in their inventory, effective opioid prescription inventory management is vital. From ordering to dispensing, facilities must have adequate controls in place throughout the drug lifecycle. Documentation is critical here as well; and, during DOJ investigations, providers must be prepared to provide their inventory documentation in order to demonstrate compliance.

4. Evaluation of Prescriptions for Opioid Medications

Prior to filling prescriptions for opioid medications, providers must evaluate patients’ prescriptions for signs of fraud. This includes tampering by the patient as well as unlawful issuance. In order to identify fraudulent prescriptions, providers must implement appropriate policies and procedures and provide adequate training to their personnel.

5. Evaluation of Refill Requests

Refill requests present potential hazards for both physicians and pharmacists. When patients request refills, physicians must assess ongoing medical necessity, and pharmacists must ensure due medical authorization.

6. Business and Financial Relationships Between Providers

Business and financial relationships between providers present potential risks under the Stark Law, Anti-Kickback Statute, and EKRA. Within the context of a DOJ opioid diversion investigation, these relationships can ensnare multiple related and unrelated parties, and they can lead to several different types of charges. For example, in addition to civil or criminal charges under the Stark Law, Anti-Kickback Statute, and EKRA, providers targeted based on their business and financial relationships can face prosecution for Controlled Substances Act (CSA) violations, conspiracy, mail fraud, wire fraud, and money laundering as well.

7. “Red Flags” for Opioid Diversion

Finally, all health care providers must have policies and procedures in place that are designed to identify the DOJ’s “red flags” for opioid diversion. From fraudulent prescriptions to cash payments, and from repeat purchasers to physicians who issue high volumes of opioid prescriptions, there are numerous issues that can lead to trouble for providers that fail to exercise the necessary level of care.