Federal and State Prescription Fraud

Some of my blogs are extremely dense.  This and the next several blogs focus on the intersection of  federal and state criminal statutes and regulations concerning illegally written prescriptions and the potential criminal consequences.

Federal criminal statutes are intentionally written extremely broad.  Title 21, United States Code, Section 841(a)(1) is the Federal Drug Act.  Typically used for drug dealers, this provision is the tool federal prosecutors use to criminally charge physicians who improperly write prescriptions for controlled substances that are not medically necessary.  The language of the federal criminal statute is quite simple.

Title 21, United States Code, Section 841(a)(1), provides that “[e]xcept as authorized by this subchapter, it shall be unlawful for any person to knowingly or intentionally manufacture, distribute, or dispense, or possess with intent to manufacture, distribute or dispense, a controlled substance.”  Title 21, United States Code, Section 802(10), provides that the term “dispense” means to deliver a controlled substance to an ultimate user or research subject by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance and the packaging, labeling or compounding necessary to prepare the substance for delivery.

Section 821, provides that “[t]he Attorney General [of the United States] is authorized to promulgate rules and regulations …relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances.”   21 Code of Federal Regulations § 1306.04, governing the issuance of prescriptions, which provides, among other things, that a prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. Moreover, an order purporting to be a prescription issued not in the usual course of professional treatment is not a prescription within the meaning and intent of section 309 of the Act [21 U.S.C. § 829] and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the law relating to controlled substances.

The Pennsylvania Code of Professional and Vocational Standards, Title 49, Chapter 16.92, defines the authority of physicians licensed by the Commonwealth of Pennsylvania to prescribe or dispense controlled substances. Chapter 16.92 provides in pertinent part:

(a) A person licensed to practice medicine and surgery in this Commonwealth or otherwise licensed or regulated by the Board, when prescribing, administering or dispensing controlled substances, shall carry out, or cause to be carried out, the following minimum standards:

• Initial medical history and physical examination….. [B]efore commencing treatment that involves prescribing, administering or dispensing a controlled substance, an initial medical history shall be taken and an initial examination shall be conducted unless emergency circumstances justify otherwise. Alternatively, medical history and physical examination information recorded by another health care provider may be considered if the medical history was taken and the physical examination was conducted within the immediately preceding thirty days. The physical examination shall include an evaluation of the heart, lungs, blood pressure and body functions that relate to the patient’s specific complaint.
• Among the factors to be considered in determining the number and the frequency of follow-up evaluations that should be recommended to the patient are the condition diagnosed, the controlled substance involved, expected results and possible side effects. For chronic conditions, periodic follow-up evaluations shall be recommended to monitor the effectiveness of the controlled substance in achieving the intended results.

 

• Patient counseling. Appropriate counseling shall be given to the patient regarding the condition diagnosed and the controlled substance prescribed, administered or dispensed. Unless the patient is in an inpatient care setting, the patient shall be specifically counseled about dosage levels, instructions for use, frequency and duration of use and possible side effects.

 

• Medical Records. [C]ertain information shall be recorded in the patient’s medical record on each occasion when a controlled substance is prescribed, administered or dispensed. This information shall include the name of the controlled substance, its strength, the quantity and the date it was prescribed, administered or dispensed to a patient. The medical record shall also include a specification of the symptoms observed and reported, the diagnosis of the condition for which the controlled substance is being given and the directions given to the patient for the use of the controlled substance. If the same controlled substance continues to be prescribed, administered or dispensed, the medical record shall reflect changes in the symptoms observed and reported, in the diagnosis of the condition for which the controlled substance is being given and in the directions given to the patient.

When the federal law is read in conjunction with Pennsylvania’s Code governing appropriate medical practices, prescriptions written without a medical basis or therapeutic need but for which the physician bills federal, state, or private insurance companies for both visits and reimbursement, the physician is exposed criminal liability. The criminal liability is both for insurance fraud and violation of the federal drug act.

As a doctor of medicine, physicians are authorized to dispense to patients Schedules II, III, IV and V controlled substances and to prescribe medicine to patients, including controlled substances, for legitimate medical purposes and in the usual course of professional practice.

Call to discuss any federal criminal target letter or indictment.

Pennsylvania’s Stregthening Disciplinary Enforcement Environment

My law practice focuses on defending professional licensee disciplinary actions based upon criminal convictions, professional competence, and/or drug and alcohol addiction and professional impairment. I write blogs about Pennsylvania professional licensing disciplinary actions.  Recently, I reviewed all of Pennsylvania’s licensing board disciplinary actions for October and November of 2016. My case load is consistent with the disciplinary orders I reviewed; the cases reflect a stiffening enforcement environment for each of Pennsylvania’s 29 licensing boards.

In November 2016 Bureau of Professional and Occupational Affairs’ 29 professional licensing boards entered 135 different disciplinary orders.  Board orders range from accountancy, real estate, architecture, chiropractic, massage therapy, nursing, the numerous medical fields, social workers, to veterinary medicine. Of the 135 actions, 41 or 30% of the prosecutions were against non-Pennsylvania practicing licensees. Of the remaining 94 actions (70%), 30 cases or 31% were taken against licensees in Philadelphia and its five surrounding counties. The October 2016 statistics are about the same.

The consistency in the prosecutions is staggering. Many licensees are not represented by counsel. Many orders or settlements include significant civil penalty fines. In the dental profession, there is an increase in petitions for immediate temporary suspensions, pending hearings, on the grounds that the licensee’s practice constitute an immediate and clear danger to the public health and safety. Throughout the medical professions, including pharmacy, numerous disciplinary actions are based upon misdemeanor or felony Drug Act convictions.  Accountancy and real estate board prosecutions center on fraud issues.  The statistics suggest one main point; over 60 percent of cases are from the Philadelphia area and out of state but all of which prosecutions are based upon criminal convictions or drug impairment issues.  These types of disciplinary cases can be fought and penalties reduced.  Many licensees do not think so and either do not have any counsel or they hire the wrong, incompetent counsel.  This is a mistake.

A significant aspect of my practice is reflected in the disciplinary orders. Whether a medical doctor, osteopathic doctor, or nurse, almost one half of disciplinary actions are based upon allegations of inability to practice a profession with reasonable skill and safety to patients by reasons of a mental or physical illness or condition stemming from a dependence upon alcohol or drugs that impairs judgment or coordination. Fighting these cases and contesting any allegation of drug or alcohol impairment is mandatory to keep your license.  DO NOT TAKE THESE ALLEGATIONS LIGHTLY.  DO NOT GO TO THESE ASSESSMENTS WITH OUT AN ATTORNEY.  See my other blogs on this issue.  The orders of discipline clearly reflect licensees incompetently fighting their case without counsel.  I have written extensive blogs on the importance of having an attorney.

A significant percentage of enforcement actions are based upon in or out-of state guilty pleas to either misdemeanors or felonies under the Drug Act or felonies (typically sexual assault) involved in the professional practice. The Boards are collaterally prosecuting every licensee convicted of any offense involving drugs, the violations of norms of practice of that specific profession, or crimes of moral turpitude. The criminal offense, whether drugs, DUI, or a practice related sexual offense does not have to occur in Pennsylvania. Having the right criminal attorney fighting the underlying criminal prosecution is paramount to avoiding collateral licensing prosecution.  I handle all of these criminal cases in Pennsylvania and New Jersey.  Call me to discuss the underlying criminal charges.

Out-of-state licensee’s disciplinary actions reveal a pattern of significantly harsher disciplinary outcomes. Apparently many of these licensees’ indefinite or automatic suspensions are based upon decisions to not contest the Pennsylvania disciplinary action or licensees fighting their case without counsel. Either choice is the worst possible way to address a Pennsylvania based disciplinary action. Every out-of-state licensee should fight each and every disciplinary action.

Please call me to discuss the heightened enforcement environment in Pennsylvania and your pending disciplinary action. Do not attempt to handle these cases on your own. Pennsylvania’s licensing board prosecuting attorneys are much more familiar with appropriate potential negotiating positions then the licensee. The number of professionals I represent before the various boards, and my current pending case load with the same prosecutor on your case, uniquely positions me to fight your case.