Southern California Physician Indicted For Illegally Prescribing Controlled Drugs Including to Out-of-State Residents Without an In-Person Physical Examination

The investigations of physicians for prescribing scheduled drugs to patients including Oxycodone, Xanax, Soma and other medications continues. Last week on July 6, 2017, a physician Jeffrey Olsen D.O. was Indicted in the Central District of California, Case No. SA CR-17-76. Dr. Olsen is presumed innocent and an Indictment is not evidence. 

One issue I have with these criminal cases is that in order to "catch" the physicians, the DEA will wait for a year or more to get the "evidence" to support criminal cases. In Dr. Olsen's case, the charges date from 2013 to January 2016. While it is not clear here, most cases I see have the government investigators sending in undercover agents and seeking to get evidence to support the criminal charges. In the meantime, allowing the physician to continue to prescribe. Public safety is being sacrificed to make sure the "criminal" case is as open and shut as possible. 

In Dr. Olsen's case, the DEA went in on or about March 18, 2016 and suspended his DEA registration. There was no arrest or charges at that point in time but I suspect that his charts were seized or reviewed by the DEA.

The Indictment alleges that Dr. Olsen allegedly sold prescriptions to addicts and drug dealers in exchange for fixed cash fees, without any medical basis for the prescriptions. It is also alleged that during the investigation, Dr. Olsen also sold hundreds of prescriptions to addicts in other states, such as Oregon, without ever seeing the “patients” for an in-person examination. 

It is alleged that in text messages to these out-of-state customers, Dr. Olsen allegedly told customers that, in exchange for fees up to $3,000, he would write prescriptions for them. It is alleged that Dr. Olsen let the patients select the medications and that he failed to follow the standard of practice and determine whether they were actually taking the prescribed drugs or whether they were getting additional narcotic prescriptions from other doctors. 

It is alleged that Dr. Olsen's prescriptions resulted in more than 1.2 million pills of narcotics, which were almost entirely at maximum strength, in addition to hundreds of thousands of pills of other controlled drugs such as the sedatives Xanax and Soma. Dr. Olsen was charged with 34 counts of drug related charges under 21 U.S. Code Section 841(a)(1) for "distributing" oxycodone, amphetamine salts, alparzolam and hydrocodone to various patients who are listed by initials in the Indictment. 

One questions why the Medical Board is not used to get an immediate administrative suspensions along with DEA when there is significant evidence of improper prescribing. Is it wise for the government to wait one or two years to "investigate" and build criminal cases just to make sure they can get high sentences against physicians? 

The final count was for a violation of 21 US Code Section 843(a)(4)(A) for making an alleged False Statement in a DEA Registration Application. This relates to Dr. Olsen applying for DEA registration on or about May 23, 2016 and failing to disclose his DEA suspension on March 18, 2016. It is critical for physicians to ensure they do not make any misrepresentations in filling out these forms.

It is not clear if the government offered Dr. Olsen the opportunity to plea or cooperate before Indictment. However, these charges are heavy handed and could expose Dr. Olsen to 20 years' in custody and a mandatory minimum term. I still wonder what would have happened if the conduct had been stopped back in 2013 or 2014.

Posted by Tracy Green, Esq.

Green and Associates

Email: tgreen@greenassoc.com

Office: 213-233-2260

California Facilities Owned By Rideout Health to Pay Civil Monetary Penalties and Agree to 3-Year Compliance Plan to Resolve Controlled Substance Act Claims

The Drug Enforcement Administration (DEA) is becoming more aggressive about enforcing recordkeeping and other rules for controlled substances in hospitals, surgery centers, urgent care clinics and so on. We have handled audits by the DEA and fines are a significant part of their enforcement. A recent case shows what can happen to health care facilities when the recordkeeping rules are not followed. This case also shows that even with cooperation the fines can be significant.

On December 6, 2016, Rideout Health entered into a settlement agreement in which it will pay the United States $2,425,000 to settle the federal claims of alleged violations of the Controlled Substances Act including record keeping. The alleged violations were by three of Rideout Health’s facilities in Yuba and Sutter Counties: Rideout Memorial Hospital, Fremont Medical Center, and Feather River Surgery Center. There were no allegations of diversion or improper prescribing. 

This settlement arises from a DEA investigation that began after DEA received information from the California State Board of Pharmacy that Fremont Medical Center’s DEA Registration had expired, and that from October 23, 2012, to October 23, 2014, pharmacy technicians at Rideout Memorial Hospital were transporting controlled substances between Rideout Health facilities with little or no security controls in place.

In addition, Rideout Health has agreed to a three-year compliance plan. The payment and plan resolve the United States' claims that the three Rideout Health facilities failed to properly record and maintain thousands of transactions involving controlled substances in violation of the Controlled Substances Act and its implementing regulations.

The settlement also resolves the United States’ contention that the system Rideout Health used during that time to distribute controlled substances between these facilities failed to provide sufficient security controls. 

There was a lot of cooperation here once the investigation began. Rideout Health worked with the DEA and the United States Attorney’s Office to develop a detailed compliance plan to address the deficiencies in Rideout Health’s handling of controlled substances. 

Rideout Health also took proactive steps to reorganize its Compliance Department to improve controls with respect to the purchase, storage and dispensing of controlled substances. The compliance plan with the DEA is designed to advance Rideout Health’s ability to meet its record keeping requirements and enhance its ability to detect and prevent drug diversion. These are the type of actions that begin once any entity becomes aware of an investigation. Being proactive is very important and does not indicate weakness or constitute an admission of wrongdoing. It is just good practice.

Posted by Tracy Green, Esq.
Email: tgreen@greenassoc.com
Green and Associates, Attorneys at Law

Pharmacist Sentenced To 120 Months For Dispensing Oxycodone Outside Legtimate Medical Purpose And Not In Usual Course of Professional Practice

In March 2013, U.S. District Judge James D. Whittemore sentenced pharmacist Emmanuel Mekowulu to 10 years (120 months) in federal prison for conspiring with other persons to knowingly and intentionally distribute and dispense and cause the distribution and dispensing of oxycodone outside of a legitimate medical purpose and not in the usual course of professional practice. 

The pharmacist had dispensed over 340 prescriptions from Neurology and Pain Center clinics. The physician presigned prescriptions for people that were not patients and 60 of the prescriptions were issued in the names of employees of the medical clinic. The court also ordered the pharmacist to forfeit his professional license and the pharmacy license he held for the Felky Pharmacy.

How can pharmacists be charged with distributing oxycodone or other Schedule II drugs?  The Controlled Substances Act, Title 21, United States Code, Sections 841(a)(1) and 846 make it unlawful for any person knowingly or intentionally to distribute or dispense a controlled substance or to conspire to do so. Medical professionals, such as physicians and pharmacists, are excepted from this general prohibition as long as they comply with the legal requirements of their licenses and DEA registration.

In the cases we have seen, the issues against pharmacists are based primarily on their “corresponding responsibility” to determine that a Schedule II prescription is based on a legitimate medical need and is not outside the usual scope of practice. In the past, pharmacists were not vigilant about confirming medical need and asking for medical records to satisfy themselves once the determined the physician wrote the prescription. Now that the pharmacy world knows that some physicians will write prescriptions to patients or fake patients, it is dangerous for pharmacists to trust physicians or the patients.

Where the pharmacist did not have actual knowledge that the physician wrote the prescription for cash payment without medical necessity, the government uses the theory of “willful blindness” or “deliberate ignorance” to show that the pharmacist dispensed the prescriptions without verifying the question or validity of the prescriptions where there were obvious red flags.

The juries in these pharmacy cases are allowed to consider model guidelines, federal DEA laws and regulations, state pharmacy laws and regulations, along with all other evidence, when determining whether or not the pharmacists dispensed controlled substances other than for a legitimate medical purpose and not in the usual course of professional practice. Evidence is then presented by experts about the red flags that appeared in these prescriptions and the fact that no one followed up on these issues.  Deliberate ignorance is used to show intent to join the conspiracy to distribute oxycodone. 

There is a war on prescription drugs and pharmacists must look at each prescription and create their own protocols and procedures in order to protect themselves from civil and criminal liability in these cases. Pharmacists who dispense Schedule II narcotics should have their practices reviewed by outside counsel or compliance experts and make sure that they comply with their own policies and procedures. 

Posted by Tracy Green, Esq.

Green and Associates

213-233-2260

tgreen@greenassoc.com