When Does the DEA Get Involved in Healthcare Fraud Cases? - Federal-Lawyer.com
WSJ logo
Forbes logo
Fox News logo
CNN logo
Bloomberg logo
Los Angeles Times logo
Washington Post logo
The Epoch Times logo
Telemundo logo
New York Times
NY Post logo
NBC logo
Daily Beast logo
USA Today logo
Miami Herald logo
CNBC logo
Dallas News logo
Quick Practice Area Locator

When Does the DEA Get Involved in Healthcare Fraud Cases?

fraud lawyer

Healthcare fraud investigations can involve many different federal agencies. From investigative and law enforcement agencies such as the Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) to agencies that administer government benefit programs (such as the Centers for Medicare and Medicaid Services (CMS) and the Department of Labor (DOL)), it is not unusual for the targets of these investigations to be contacted by agents and investigators from multiple federal authorities.

In some cases, another agency that will get involved is the Drug Enforcement Administration (DEA). While most people think of the DEA as the agency responsible for targeting large criminal drug dealing organizations, it also plays a central role in healthcare fraud investigations involving prescription medications. The DEA gets involved in cases involving both registered and non-registered individuals and entities, and its investigations can lead to charges under a variety of federal civil and criminal statutes.

Federal Healthcare Fraud Investigations Involving the DEA

The following are all common examples of situations in which the DEA may take an active role in a federal healthcare fraud investigation:

Investigations Involving Orders to Show Cause

An Order to Show Cause is a formal notice that the DEA intends to revoke, suspend, or deny an application for DEA registration. The DEA can issue an Order to Show Cause for a variety of reasons, including (but not limited to) Medicare or Medicaid exclusion, falsification of information, and acts “inconsistent with the public interest.” Whether an investigation into a provider’s actions involving controlled-substance medications triggers an Order to Show Cause or the allegations underlying an Order to Show Cause trigger a broader investigation, DEA registration proceedings will often go hand-in-hand with healthcare fraud investigations.

Investigations Targeting Providers’ Prescription-Related Billing Practices

Many healthcare fraud investigations focus on the providers’ billing practices. Under Medicare, Medicaid, Tricare, and the various other government healthcare benefit programs, all providers are subject to strict (and complicated) regulations regarding services and supplies that are eligible for reimbursement. Overbilling, double-billing, using the wrong billing code (intentionally or unintentionally), and various other forms of billing “fraud” can all trigger intensive and potentially dangerous federal investigations.

When billing fraud investigations focus on providers’ prescription practices, the DEA may get involved as well. The DEA has a mandate to aggressively target healthcare providers suspected of illegally prescribing and dispensing controlled-substance medications, and it has broad authority under the Controlled Substances Act of 1970 and other federal statutes. If another agency’s analysis of billing data or a whistleblower filing suggests that a healthcare provider is engaging in improper practices involving prescription medications, there is a strong likelihood that the DEA will get involved.

Investigations Involving Allegations of Drug Diversion

The DEA has a special division devoted to combatting the widespread practice of prescription drug diversion. Under the DEA’s Diversion Control Program, special agents, investigators, pharmacologists, program analysis, and other agency personnel are tasked with specifically targeting physicians, pharmacists, and other providers and businesses suspected of supplying controlled substances to individuals who do not need them for medical purposes. This includes all medications listed on Schedule II through Schedule V, and it covers all levels of involvement (both knowing and unknowing) in drug diversion schemes.

Some of the more-common examples of drug diversion investigations involving the DEA include those targeting:

  • Physicians’ prescription practices (such as selling prescriptions or providing prescriptions for drugs that are not medically-necessary)
  • Pharmacists’ sale of controlled-substance medications, falsification of prescriptions and pharmacy records, and use of other means to divert prescription medications
  • Staff theft of medications and prescription pads
  • Falsification of patient records and issuance of forged and fraudulent prescriptions

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

5 Factors Likely to Trigger DEA Healthcare Fraud Investigations

With the extraordinary volume of reimbursement requests submitted to Medicare, Medicaid, Tricare, and the other government healthcare benefit programs on a daily basis, federal authorities are forced to rely on data analysis to identify targets for potential investigations. While the government’s metrics are useful for identifying certain types of healthcare fraud, they rely on generalizations and assumptions that lead to investigation of many legitimate and law-abiding healthcare businesses and practices as well. For example, the following are all factors that have the potential to trigger healthcare fraud investigations involving the DEA, but which are not necessarily indicative of healthcare or prescription drug fraud:

1. Geographic Location

The DEA and other federal agencies consider a provider’s geographic location to be a relevant factor in assessing potential involvement in billing fraud and drug diversion schemes. Authorities have identified several “hot spots” for healthcare fraud and opioid abuse across the country, and there are special teams deployed in these areas to target local providers.

2. Prescription Volume

Simply dealing in a high volume of prescription medications can trigger a DEA investigation as well. While there are obviously numerous reasons why one physician may prescribe more medications or one pharmacy may fill more prescriptions than another, federal authorities consider high volume to be a potential red flag for fraud and diversion.

3. Prescription Consistency

Consistently prescribing or dispensing the same prescription medications is another benign factor that can trigger a DEA investigation. This is true for all types of providers but is particularly a concern for compounding pharmacies that can face accusations of mass-manufacturing drugs rather than developing specific formulas for individual patients’ needs.

4. Prior Mistakes

While all healthcare providers and companies that bill federal healthcare benefit programs and deal in controlled-substance medications are at risk for being targeted in federal investigations, those that have been targeted in the past may be more likely to face continued scrutiny.

5. Coding Errors

Coding errors, even unintentional ones, can lead to federal charges with steep civil or criminal penalties. When these errors involving billings for prescription medications, providers can face inquiries from the DEA as well.

Is Your Healthcare Business or Practice Being Targeted by the DEA?

If your healthcare business or practice is being targeted by the DEA, we can help. Oberheiden, P.C. is a team of experienced defense attorneys and former federal prosecutors who focus on representing clients in healthcare fraud investigations. To get started with a free and confidential consultation, call our offices at 888-680-1745 or tell us how we can help online now.

This information has been prepared for informational purposes only and does not constitute legal advice. This information may constitute attorney advertising in some jurisdictions. Reading of this information does not create an attorney-client relationship. Prior results cannot guarantee a similar future outcome in your case. Oberheiden, P.C. is a Texas PC with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

Contact Us Today

I accept the Terms and Conditions.(Required)
WordPress Lightbox