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When Does the DEA Get Involved in Health Care Fraud Cases?

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Health care 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 health care 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 Health Care 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 health care 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 health care fraud investigations.

Investigations Targeting Providers’ Prescription-Related Billing Practices

Many health care fraud investigations focus on the providers’ billing practices. Under Medicare, Medicaid, Tricare, and the various other government health care 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 health care 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 health care 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

5 Factors Likely to Trigger DEA Health Care Fraud Investigations

With the extraordinary volume of reimbursement requests submitted to Medicare, Medicaid, Tricare, and the other government health care 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 health care fraud, they rely on generalizations and assumptions that lead to investigation of many legitimate and law-abiding health care businesses and practices as well. For example, the following are all factors that have the potential to trigger health care fraud investigations involving the DEA, but which are not necessarily indicative of health care 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 health care 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 health care providers and companies that bill federal health care 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 Health Care Business or Practice Being Targeted by the DEA?

If your health care business or practice is being targeted by the DEA, we can help. Oberheiden & McMurrey, LLP is a team of experienced defense attorneys and former federal prosecutors who focus on representing clients in health care fraud investigations. To get started with a free and confidential consultation, call our offices at (888) 519-4897 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 & McMurrey, LLP is a Texas LLP with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.

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