San Joaquin County Doctor Convicted of Prescribing Opioids Without Medical Necessity to Patients in Federal Court

The problem with physicians prescribing opioid drugs to patients where there is not a proper medical and prescription history taken, lack of a proper medical examination to confirm the legitimacy of patients' pain complaints, and failure to assess the risk of addiction issues continues. 

On November 19, 2021, Dr. Edmund Kemprud, age 78, was convicted in Sacramento  federal court of 14 counts of illegally prescribing opioids and other controlled substances to patients. As is common in these cases, undercover officers went to his office in order to obtain evidence that would substantiate the charges. Usually pain medication patients do not want to testify against their physicians so undercover operations are common. 

According to evidence presented at trial, Dr. Kemprud was a physician licensed to practice medicine in California and worked in several locations around the East Bay and Central Valley. One of the more inflamatory allegations was that one of the offices was in the back room of a nail salon and medi-spa in Tracy, California. 

Dr. Kemprud prescribed commonly abused prescription drugs, including Hydrocodone, Alprazolam, and Oxycodone. The government introduced evidence that certain prescriptions were outside the usual course of professional practice and not for legitimate medical purpose. 

The government introduced evidence at trial showing that Dr. Kemprud ignored "red flags" which are indications that his patients were addicts or that they were diverting the drugs during the undercover patient visits. Dr. Kemprud charged $79 a visit and the evidence was that he often spent less than five minutes with a patient and would see 30 patients in less than a day. In family practice, those numbers are not unusual for follow up visits but when prescriptions for serious pain medications are being written -- a more extensive visit is expected.

Former California Physician Sentenced to 2 Years in Federal Prison for Defrauding Medicare by Prescribing Unnecessary Home Health Services for Kickbacks and Illegally Prescribing Opioid Drugs

Physicians who order home health where it is not medically necessary can be charged with Medicare fraud. If that same physician orders medications, especially controlled substances, without seeing the patient on a regular basis, that can be another ground for a fraud charge. 

The loss amounts can be huge since the physician will be held responsible for the total amount of billings by the home health agency and the pharmacy's prescriptions. A recent case illustrates a physician who ordered home health in exchange for payments and then also prescribed some pain medications that were medically unnecessary.  

On January 6, 2020, Kain Kumar, a former doctor, was sentenced to 24 months in federal prison after having pleaded guilty in April 2019 to one count of health care fraud and one count of distribution of hydrocodone. Mr. Kumar practiced internal medicine, maintained medical offices in Palmdale, Rosamond, and Ridgecrest, California and surrendered his medical license last year.

He was sentenced by U.S. District Judge Philip S. Gutierrez. Mr. Kumar was also ordered to pay financial penalties totaling more than $1 million, consisting of $509,365 in restitution, $494,900 in asset forfeiture, and a $72,000 fine.

Northern California Physician Indicted for Prescribing Opioids to Patients Without a Legitimate Medical Need

Physicians continue to face charges for prescribing opioids to patients without a legitimate medical purpose. This is one area where physicians and advanced practitioners must exercise extreme caution. A recent case shows that federal charges will be filed in these cases.

On December 5, 2019, a federal grand jury brought a 14-count indictment against  physician Dr. Edmund Kemprud of San Joaquin County, charging him with prescribing opioids to patients outside the usual course of professional practice and not for legitimate medical purpose. An indictment is not evidence and the physician is presumed innocent.

According to the indictment, Dr. Kemprud maintained a medical practice in the California cities of Dublin and Tracy. The indictment alleges that on 14 occasions between September 6, 2018 and March 13, 2019, Dr. Kemprud allegedly prescribed highly addictive, commonly abused prescription drugs, including Hydrocodone, Alprazolam, and Oxycodone – outside the usual course of professional practice and not for legitimate medical purpose. 

In these type of cases, the DEA or investigating agency usually uses undercover patients in order to establish the proof to file such charges. Dr. Kemprud pleaded not guilty at his arraignment.

Attorney Commentary: Physicians, Osteopaths and advanced practitioners should review the Medical Board's published pain guidelines. It's a 90 page guideline published in 2014, and is now considered to establish the standard of care in California. There are also links in the document on topics such as benzodiazapenes (Xanax/Alprazolam) at issue in this case and how to taper patients from them ("the Ashton manual"). There is free web-based training on prescribing opioids from the CDC that should be reviewed and where a provider can earn free continuing education credits.

Posted by Tracy Green, Esq.

Green and Associates

Orange County Psychiatrist Sentenced to More than Four Years in Federal Prison for Writing Illegal Opioid Prescriptions to Drug Dealer

On June 19, 2019, a psychiatrist who practiced at a Santa Ana clinic was sentenced to 57 months in federal prison for issuing prescriptions for controlled substances, such as oxycodone, hydrocodone, alprazolam and amphetamine salts, to a non-patient in exchange for cash, admitting in his plea agreement that the prescriptions were without a medical purpose and he knew the drugs would be diverted and sold on the street.

Dr. Robert Tinoco Perez was sentenced by Judge Andrew J. Guilford. Dr. Perez pleaded guilty on February 25, 2019 to one felony count of conspiracy to distribute controlled substances.

Dr. Perez admitted that he wrote prescriptions for “patients” he had never met or examined, including an undercover officer. Dr. Perez admitted that he created fictitious medical records for drug customers to provide justification for their prescriptions.

Ten Individuals Affiliated With Compounding Pharmacy, Including Owners, Pharmacist, Billing Manager, Sales Reps and Nurse Practitioner, Charged in Compounding Prescription Drug Case

In compounding cases, it is usually some very high billed creams that get attention. In a recent case, the government alleges that the defendants’ fraudulent conduct caused a prescription plan administrator to pay over $29,000 for one tube of a cream advertised as treating “general wounds.”
Another red flag in compounding cases are call centers with marketers. A recent case in Alabama has both. This case is also significant since it targeted many people who worked at the compounding pharmacy including sales representatives, billers, managers in addition to the owners and pharmacist.

On May 6, 2019, ten defendants were charged in a 103-count indictment, including a nurse practitioner, owners, a pharmacist, managers, sales representatives and billers, of an Alabama based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy. 

The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs.  An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.  The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements. 

According to the indictment, Global which allegedly described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Alabama facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Florida. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers.  The company also worked with affiliated pharmacies.

The indictment describes a multi-faceted operation in which the defendants billed for medically unnecessary drugs.  The indictment alleges that the wrongdoing included:  

• paying prescribers to issue prescriptions; 
• directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies; 
• altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine; 
• automatically refilling prescriptions—often as many as 12 times—regardless of patient need; 
• routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and 
• billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to the home of Global's owner and president.  

According to the indictment, the defendants evaded and obstructed audits and questions about billings through various efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies.  The defendants allegedly billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.

California Pharmacist Pleads Guilty in Federal Court in Los Angeles to Illegal Distribution of Prescription Opioids and Laundering the Proceeds of the Illicit Sales

The government likes giving catchy names to certain  investigations. A recent federal and state investigation into corrupt pharmacies, for example, was called dubbed “Operation Faux Pharmacy.” 

One of the cases from this investigation has resulted in a pharmacist and pharmacy each pleading guilty in federal court to one federal count of distributing oxycodone and one count of money laundering relating to the revenue generated by the sales. 

On April 29, 2019, California pharmacist Pauline Tilton and her pharmacy Oasis Pharmacy pleaded guilty to a federal charge of illegally distributing the opioid oxycodone, admitting in the plea agreement that she filled hundreds of counterfeit prescriptions. The red flag in this case was that the DEA number of the prescribing physician on the prescriptions was of a retired doctor.

Louisiana Neurologist Who Allegedly Pre-Signed Prescriptions for Controlled Substances Is Charged With Conspiracy to Unlawfully Dispense Controlled Substances and Health Care Fraud

A pain management neurologist has been charged with unlawful prescribing and health care fraud conspiracy relating to Medicare billings for the prescriptions billed to Medicare. This is an extension of government theories since as the prescribing physician, the pharmacy would have received the payments and and not the neurologist. The pharmacy has its own corresponding duties to Medicare. 

However, the twist here is that the government alleges that the prescriptions were pre-signed by the neurologist and that he did not see the patients. However, it is not clear if any other providers saw the patients or who else completed the prescriptions. One would assume there must be other facts relating to this pain management clinic that are not alleged in the charging documents.

On April 18, 2019, a two-count bill of information was filed against neurologist Anil Prasad, M.D., charging him with conspiracy to unlawfully dispense controlled substances and conspiracy to commit health care fraud. If Dr. Prasad does not waive Indictment or reach a plea agreement, there will probably be an Indictment arising from the information. An information is a charging document and is not evidence and Dr. Prasad is presumed innocent of all charges. 

Specifically, Dr. Prasad was charged with one count of prescribing controlled substances outside the course of professional practice and for no legitimate purpose and one count of conspiracy to commit health care fraud.  According to court documents, between November 2016 and July 2018, Dr. Prasad worked at a pain management clinic in Slidell, and during the course of his employment he pre-signed prescriptions for controlled substances, including oxycodone and hydrocodone, without performing patient examinations to determine medical necessity.

California Pharmacist Charged With Filling Fraudulent Prescriptions for Oxycodone and Hydrocodone.

The opioid prescription cases keep coming. On April 11, 2019, a Fresno pharmacist, Ifeanyi Vincent Ntukogu of New Life Pharmacy, in Madera was indicted one count of conspiracy to distribute and possess with intent to distribute controlled substances and 17 counts of distribution of controlled substances (oxycodone and hydrocodone). The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Two other non-medical persons to whom the medications were allegedly dispensed were also charged: Kelo White was charged with one count of conspiracy to distribute and possess with intent to distribute controlled substances and 12 counts of possession with intent to distribute controlled substances. Donald Ray Pierre was charged with one count of conspiracy to distribute controlled substances, 10 counts of possession with intent to distribute controlled substances, and two counts of identity theft. 

According to court documents, Mr. Ntukogu allegedly filled fraudulent prescriptions for oxycodone and hydrocodone, Schedule II controlled substances, at his pharmacy New Life Pharmacy between December 2014 and November 2018, and then dispensed the controlled substances to Mr. White and Mr. Pierre. 

San Jose Doctor Pleads Guilty To Federal Charge of Unlawfully Distributing Hydrocodone and Committing Health Care Fraud. Make Sure Your Practice Follows California Pain Medication Guidelines.

Record keeping and following the California pain management protocols are key for physicians who prescribe scheduled medications for pain management. California revised its protocols called “Guidelines for Prescribing Controlled Substances for Pain” in November 2014 and expects all physicians to be familiar with it. You can download a copy of it with its attachments from the link above which is my public dropbox account. 

Under federal and state law, if the physical examination does not demonstrate legitimate medical need which must be documented, then the prescription is no longer protected by the DEA rules allowing physicians to prescribe. It is then treated like an illegal drug and opioids, like cocaine, are treated harshly under the sentencing guidelines. Even board certified pain management doctors need to be careful to make sure their record keeping and physical examination protocols are up to date. Every doctor can have a bad or busy day, but with scheduled drugs such allowances are simply not tolerated.  I recommend that doctors and clinics systemize as much as they can which is sometimes not done in small or solo practices. A recent case shows why this is so important.

San Jose pain management physician Venkat Aachi, indicted on October 9, 2018, has now pleaded guilty to distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, and to health care fraud. This is a huge blow to his practice and profession.  On March 26, 2019, his guilty plea was accepted by the Honorable Edward J. Davila, U.S. District Judge.

Why Are Older Physicians More At Risk for Criminal Prescribing Charges? Recent Case: Older Santa Rosa Doctor Indicted For Unlawfully Prescribing Fentanyl And Oxycodone

I often see older physicians caught up in criminal prescribing cases. Part of it may due to impairment and part of it may be due to trusting others including patients. Older physicians need to seriously question their conduct and business arrangements since failure to follow the standard of care can be criminal if it involves scheduled drugs. The standard of care for pain management has changed drastically the last 10 years and the record keeping requirements have also increased.  

A recent case illustrates this issue. On October 2, 2018, a federal grand jury indictment against Santa Rosa neurologist Thomas Keller, age 72, was unsealed charging him with distributing Schedule II and IV controlled substances outside the scope of his professional practice and without a legitimate medical need. Dr. Keller was also charged with two counts of health care fraud related to billing. An indictment merely alleges that crimes have been committed, and Dr. Keller, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. 

According to the indictment filed September 27, 2018, and unsealed on October 2, 2018,  in June of 2017, Dr. Keller, 72, of Santa Rosa, was a licensed physician when he knowingly distributed Oxycodone to a person knowing that the distribution was outside the scope of his professional practice and not for a legitimate medical purpose.  

Former California Medical Doctor Sentenced To Over Three Years In Prison For Unlawfully Prescribing Oxycodone to a Patient. Judge Noted Doctor Did Not Run a Pill Mill But Feeding One Patient's "Habit" Is Enough.

Previously, only physicians who went far over the line and ran "pill mills" got targeted for prosecution. Times have changed. One recent case shows a prosecution for a prescription of opioids to a single patient over a couple of years who was an addict. That patient died and local police declined to file charges so federal charges were brought on the prescribing.

On September 18, 2018, former California physician Christopher Owens was sentenced to 41 months in prison for unlawfully prescribing oxycodone hydrochloride without a medical purpose. The sentence was handed down by the Judge Alsup, U.S. District Judge in San Francisco, California.

The former Dr. Owens pleaded guilty on March 20, 2018.  In sentencing Dr. Owens, Judge Alsup stated, “[Owens] was not running a pill mill, . . . but he was doing something just as bad . . ..  He used that prescription pad to feed a habit.”  

Dr. Owens acknowledged he prescribed the drugs without a legitimate medical need and outside of the course of medical practice.  According to his open plea application filed with the court, Dr. Owens of Indianapolis, Indiana was a medical doctor when he prescribed oxycodone hydrochloride, a Schedule II controlled substance, to an individual. His guilty plea came after an Indictment. On July 11, 2017, a federal grand jury indicted Dr. Owens charging him with distributing oxycodone without a medical need, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C).  

In addition to the prison term, Judge Alsup ordered Owens to serve three years of supervised release to begin after his prison term is completed and a $7,500 fine. Judge Alsup ordered Owens to surrender and begin serving his sentence on December 3, 2018.  As a consequence of the issues in this case, Dr. Owens lost his license to practice medicine.

 

Orange County Psychiatrist Arrested on Federal Charges Alleging Illegal Prescriptions for Opioids Without Legitimate Medical Need

The use of undercover officers who pose as "patients" are standard where physicians are charged with prescribing without legitimate medical necessity. A recent case used at least one undercover officer in its investigation.

A psychiatrist Dr. Robert Tinoco Perez who practices at a Santa Ana clinic was arrested on June 30, 2018 by special agents with the Drug Enforcement Administration on federal charges that allege he issued prescriptions for scheduled drugs, such as the opioid oxycodone, without a medical purpose.

    

Dr. Perez was named in a 14-count indictment returned by a federal grand jury on June 27. An indictment contains allegations that a defendant has committed a crime and is not evidence. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in court.

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.

San Diego Doctor and Seven Others Arrested for Allegedly Prescribing Opioids to Homeless, Dead and Incarcerated People With Medications Then Sold On the Street

The United State's Attorney's Office in San Diego has recently charged a physician and seven others in a case involving a clinic where pain medication prescriptions were then diverted.  Here is the press release from the U.S. Attorney's Office on the case. An Indictment is not evidence and the doctor and others are presumed innocent.

California Physician Sentenced in Sacramento Federal Court to over 4 Years in Prison for Prescribing Methadone and Pain Medications Without Proper Documented Medical Exams

One of the issues with physicians and former physicians is that the government can file charges years after the treatment. This is happening with those who prescribed pain medications years ago to patients. A recent case relates to patients from 2008 to 2012.

On February 22, 2018, a formerly licensed physician, Nicholas J. Capos Jr., 67, of Yuba City, was sentenced by U.S. District Judge Morrison C. England Jr. to four years and four months in prison for selling prescriptions of controlled substances such as oxycodone and methadone. This sentence followed a guilty plea.

According to court documents, between April 3, 2008, and October 30, 2012, Dr. Capos, who was then a licensed physician with a specialty in cardiology, allegedly knowingly and intentionally prescribed controlled substances without properly examining the patients and ignoring obvious signs that the patients were abusing or reselling the medications. He was charged with prescribed quantities far in excess of human tolerance and charged patients a “DEA Fee” of $100 per prescription, which is contrary to accepted medical practice. He is no longer licensed to practice medicine.

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

Indictment Filed Against Northern California Physician For 36 Counts of Unlawfully Distributing Oxycodone by Prescribing It "Outside the Course of Usual Professional Practice"

When it comes to prosecuting physicians for unlawful prescribing of opioids or scheduled drugs, federal authorities have more stringent laws and sentencing guidelines. Recently a physician was arrested last year by the San Francisco District Attorney's Office and charges were not filed. However, just more than six months later federal charges were filed against the same physician. 

On or about July 11, 2017, Christopher Owens, a physician licensed to practice in California, was indicted on charges relating to unlawfully prescribing oxycodone. Dr. Owens now lives in Indiana but previously practiced at UCSF. Dr. Owens is presumed innocent and charges in an Indictment are not evidence. The DEA is one of the investigating agencies and can also proceed administratively against the physician.

The Indictment alleges that over a three-year period between September of 2012 and June of 2015, Dr. Owens intended to act outside the course of usual professional practice and without a legitimate medical purpose when he prescribed oxycodone on numerous occasions.  In sum, Owens is charged with 36 counts of distributing oxycodone, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C). Each count of oxycodone prescription can carry a separate long sentence.

Dr. Owens was arrested on Tuesday, July 11, 2017, in Indianapolis, Indiana, and was to appear in Indiana before a U.S. Magistrate Judge for a detention hearing on Monday, July 17th. He will then be ordered to appear in San Francisco federal court.

Dr. Owens was a well known vascular surgeon who had privileges at UCSF. He was placed on administrative leave back in June 2016 according to UCSF just a few days after his girlfriend passed away due to a drug related overdose. Later, UCSF reported that they revoked his privileges in October 2016. 

Then in early November 2016, the San Francisco DA's Office filed 99 counts for distributing, prescribing or giving away controlled substances against Dr. Owens. The charges were dismissed and it seems there was a decision to allow the federal authorities to pursue the case.  

These federal charges for prescribing or distributing oxycodone can be very serious with sentences up to 20 years and a mandatory minimum 10 year sentence. The mandatory minimum sentence can be negotiated with a plea agreement but when the government picks and chooses the prescription counts, these cases can be difficult to defend unless there was legitimate medical need for the prescription. It is usually a battle of the experts and a microscope is taken to the medical records and the patients' prior medical history.

In addition to the criminal case, the physician will also face the DEA and the Medical Boards of each state in which he is licensed. There can also be potential malpractice cases although each of the prescriptions are more than two years old. Publicity can bring out malpractice cases. Collateral consequences of this type of case is often as punishing as the potential prison time and fines. 

Posted by Tracy Green, Esq. 
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Office: 213-233-2260

CVS Pharmacy Inc. Pays $5 Million to Settle Alleged Violations of the Controlled Substance Act in Sacramento Federal Case

As is the norm, national chain pharmacies get fines and compliance plans while small businesses get criminally prosecuted. A recent settlement between the Department of Justice and Drug Enforcement Administration (DEA) with a national chain pharmacy is no different.

On or about July 5, 2017, CVS Pharmacy Inc. agreed to pay $5 million to resolve federal Controlled Substances Act (CSA) allegations that its pharmacies in the Eastern District of California failed to keep and maintain accurate records of Schedule II, III, IV, and V controlled substances. This payment covered only one federal court district. 

CVS also agreed to an administrative compliance plan with the DEA. The payment and plan resolve the United States’ allegations that during the period from April 30, 2011, through April 30, 2013, CVS pharmacies failed to provide effective controls and procedures to guard against diversion when CVS allegedly failed to:
(1) record the amount received and the date received of Schedule II drugs on DEA-222 Forms;
(2) maintain DEA-222 Forms and keep them separate from other records;
(3) record the date of acquisition of controlled substances in Schedules II through V; and
(4) maintain invoices for drugs in Schedules III through V and keep the records separate from non-controlled substance records; and conduct a biennial inventory on one specific day.

Under the settlement reached July 5, 2017, CVS acknowledged that its DEA-registered pharmacies were and are required to comply with the CSA, and that nine CVS pharmacies in the Eastern District of California failed to fulfill these recordkeeping obligations in a manner fully consistent with CVS’s responsibilities under the CSA. The settlement and compliance plan cover the 168 CVS pharmacies that operated in the Eastern District of California from April 30, 2011, through April 30, 2013.

The allegations resolved by this settlement were uncovered during a DEA investigation that began in 2012 after CVS self-reported thefts and losses of hydrocodone, a Schedule III drug at the time, at five of its Sacramento-area pharmacies. Under the CSA, DEA-registered pharmacies are obligated to report any thefts or significant losses of controlled substances to DEA.

On the compliance side, to address the issues uncovered by this investigation, CVS made improvements to its pharmacies in the Eastern District of California by, among other things, instituting annual CSA compliance training of its pharmacy staff, increasing loss prevention oversight, and excluding controlled substances prescriptions from the volume metric that can impact pharmacy staff compensation.

All non-chain pharmacies can learn from this compliance plan and how record keeping issues can result in large fines. It's especially critical for non-chains since they can get their DEA pulled and even criminal prosecution.

Posted by Tracy Green, Esq.

Email: tgreen@greenassoc.com

Office: 213-233-2260

Redondo Beach Neurologist Pleads to Overprescribing Painkillers in Los Angeles County Case

On December 1, 2016, a Redondo Beach neurologist Gerard Goryl plead guilty to selling narcotics to undercover police officers two years ago. Dr. Goryl pleaded no contest to 38 counts, including illegally prescribing a controlled substance and possession for sale of a controlled substance in Los Angeles County Case No. BA425289. 

The sentence is an example of the new felony sentencing after realignment.  Dr. Goryl is expected to receive four years in local custody (which means that he will avoid state prison and serve the time in county jail with usually 2 years in and 2 years out and get credit for half time) and three years in a lockdown mental health facility when he is sentenced on Jan. 4.

The sentence to lockdown mental health facility shows that there were other factors in this case affecting the neurologist and that he needs treatment. The case was prosecuted by the Los Angeles County District Attorney's Office, Major Narcotics Division. The case was investigated by the Redondo Beach Police Department in conjunction with the Drug Enforcement Administration. Undercover agents were key to the case.

Dr. Goryl's medical clinic in Redondo Beach was run with with his assistant Wilfred Arvizo Jr. who was charged as a co-defendant. This was an undercover operation where evidence was gathered as officers posed as patients. Over a two-month period in 2014, both men allegedly sold or prescribed hydrocodone and Xanax to undercover officers. The government alleged that the drugs were sold without any type of physical examination or medical need. Mr. Arvizo faces six similar counts and is scheduled to return to court on Jan. 19, 2017.  

Attorney Commentary on Bail Pending Trial for Physicians: One of the difficult issues in these type of cases is that as a condition of bail, the Medical Board requested that Dr. Goryl cease practicing medicine while the case was pending. Initially the judge only limited Dr. Goryl from prescribing controlled substances and surrendering DEA certificate. Some additional facts must have occurred since two months later the judge amended the order and prohibited the doctor from practicing at all while the case was pending trial. This essentially shuts down the doctor's practice for two years. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Email: tgreen@greenassoc.com
Phone: 213-233-2260