Northern California Pain Management Doctors Agree To Pay $260,000 To Settle Civil Claims Following DEA Inspection Regarding Adequacy of Controlled Substances Records

Drug Enforcement Administration (DEA) inspections can have significant financial repercussions if the logs and records of controlled substances are not properly maintained. A recent case illustrates how this happens and is a reminder for practices and pharmacies to be sure their business is compliant in this regard.  

In January 2014, the DEA inspected the controlled substance ordering and dispensing records relating to Pain Medicine Consultants, Inc., a medical practice which had offices in multiple Bay Area locations (Novato, Pleasant Hill, and Pleasanton). 

The government alleged that the DEA inspection uncovered multiple violations of the Controlled Substances Act, 21 U.S.C. § 801 by the practice and the physicians in the group who have the DEA registrations. The government specifically alleged that between January 10, 2012, through January 17, 2014, the medical practice and the physicians failed to:

(1) keep and maintain adequate records pertaining to controlled substances, as required by 21 C.F.R. § 1304, et seq.; 

Connecticut Hospital Paid Fines for Stark Law Violations for Renting Space to Medical Practice at Less Than Fair Market Value

On April 24, 2018, after it self-disclosed conduct to OIG, Hartford Hospital in Connecticut, agreed to pay $423,017.45 for allegedly violating the Civil Monetary Penalties Law provisions applicable to physician self-referrals and kickbacks. 

The OIG alleged that Hartford Hospital provided remuneration to a medical practice in the form of office space, where Hartford Hospital charged the practice rent at less than fair market value. The remuneration created a financial relationship between Hartford Hospital and the practice that caused Hartford Hospital to present claims for health services that resulted from prohibited referrals in violation of the Stark law.

Rental arrangements where there are patient referrals need to be reviewed for compliance with Stark and Anti-Kickback statutes. This case is an example of the high fines that can result. Luckily, the self-disclosure likely prevented more severe sanctions such as exclusion or criminal referral. 

Posted by Tracy Green

Green and Associates

U.S. Department of Justice Intervenes in Five Civil Qui Tam Lawuits in Los Angeles Accusing Insys Therapeutics of Paying Kickbacks in Form of Speaker Fees, Meals, Entertainment, Jobs, Etc. to Encourage Physicians Promote Sybsys, a Sublingual Spray Form of Fentanyl

On May 15, 2018, the United States intervened in five “whistleblower” lawsuits that have been consolidated in United States District Court in Los Angeles and accuse Insys Therapeutics, Inc. of paying illegal kickbacks and defrauding federal health programs in connection with the marketing of Subsys, an opioid painkiller manufactured and sold by the Arizona-based company.   The civil claims asserted against Insys are allegations only, and there has been no determination of liability.

The five cases brought pursuant to the False Claims Act were ordered unsealed late last week, as was the government’s complaint in intervention. The United States has separately pursued a number of criminal cases against Insys employees and Subsys prescribers.

The cases allege illegal marketing tactics related to Subsys, a sublingual spray form of fentanyl, an opioid painkiller. In 2012, Subsys was approved by the Food and Drug Administration for the treatment of persistent breakthrough pain in adult cancer patients who are already receiving, and tolerant to, around-the-clock opioid therapy.

The government’s complaint alleges that Insys paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. Many of these kickbacks allegedly took the form of sham speaker fees to physicians, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment.

The United States also alleges that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and that Insys employees lied to insurers about patients’ diagnoses in order to obtain reimbursement for Subsys prescriptions that had been written for Medicare and TRICARE beneficiaries.

Mandatory Use of CURES for California Physicians, Physician Assistants, Nurse Practitioners, Vets, and Other Health Care Providers Prescribing Schedules II, III and IV Starts October 2, 2018

The Controlled Substance Utilization Review and Evaluation System (CURES) was certified for statewide use by the Department of Justice (DOJ) on April 2, 2018. Therefore, the mandate to consult CURES prior to prescribing, ordering, administering, or furnishing a Schedule II–IV controlled substance becomes effective on October 2, 2018. Here is the California Medical Board link to everything you need to know to prepare for October.

Suboxone Practice: Family Practice and General Physicians Need to be Vigilant in Treating Patients. Case Study: Five Physicians Charged with Unlawfully Prescribing and Distributing Buprenorphine

With all the emphasis on treatment for those who have opioid dependency or addiction issues, more physicians are becoming prescribers of buprenorphine 
(known as Subutex and Suboxone). This is an area where providers should be careful especially if they are not addiction specialists. 

There are over 230 physicians listed on the Suboxone website who are within 20 miles of my office in downtown Los Angeles and are prescribing Suboxone. Family practice and general practice physicians need to be very careful in treating patients with buprenorphine, a Schedule III drug, and in determining when there is legitimate medical necessity to prescribe.