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DOJ Task Force Begins Prosecuting Physicians Prescribing Hydroxychloroquine in Wake of COVID-19

Ronald W. Chapman @RonChapmanAtty is a healthcare fraud defense attorney specializing in representing healthcare providers facing federal white collar crime allegations. He has successfully represented a significant number of physicians to acquittal on unlawful prescribing and healthcare fraud allegations and investigation dismissals. He is a highly regarded expert in the field and regularly speaks and writes nationally on the topic. Family Physicians Are Being Prosecuted for Prescribing Hydroxychloroquine to Treat COVID-19 On March 23, 2020 the President signed an executive order to prevent hoarding and price gouging of crucial medical supplies needed to fight coronavirus. The executive order invokes 50 U.S.C. 4512, a rarely used wartime act designed to permit prosecution of hoarders and price gougers. By executive order, the President designated to the Secretary of Health and Human Services the power to create a list of scarce resources. To give full effect to the order, the Department of Justice created a federal task force designed to prosecute hoarders and price gougers. Violators of this law could be subject to prosecution for a federal felony offense and face serious fines and jail time. While all prescription medications in the United States must be FDA approved as safe and effective for their intended purpose, the FDA cannot and does not regulate the "off-label" prescribing of any particular drug. Pursuant to clearly established Federal Law, any physician can prescribe hydroxychloroquine to treat COVID-19 provided the doctor believes the use of the drug is medically appropriate. The reason for this is that traditionally medical judgment is crucial in advancing the practice of medicine and exploring alternative treatments. As a result, many physicians in the united states began prescribing hydroxychloroquine to patients when it first began to emerge as a possible treatment for COVID-19. Physicians who prescribed the drug are now facing grand jury subpoenas, investigation, and prosecution for prescribing the drug to patients. The Department of Justice convened a Federal Grand Jury in Jacksonville to investigate and prosecute a family doctor for 20 prescriptions of hydroxychloroquine and has sent grand jury subpoena to dozens of providers who prescribed hydroxychloroquine. Click Here to Read More About Federal Task Force's The striking issue with these DOJ tactics is the ever increasing criminalization of routine prescribing decisions that the Government later disagrees with. Interestingly, despite the existence of federal investigations and prosecutions of physicians the Secretary of Health and Human Services publicly stated "[i]f a doctor wants to prescribe [hydroxychloroquine] working with a patient, they may do that for any purpose they want to. This removes the barrier." Are You a Provider Facing Scrutiny? Read This Before Considering a Plea Physicians who prescribed hydroxychloroquine should conduct an internal review of their prescriptions, ensure that their medical decision-making is well documented and prepare their practice for the possibility of federal scrutiny.

Bye Bye "Good Faith": 6th Circuit Erodes Medical Decision Making in Opioid Prosecutions

Ronald W. Chapman @RonChapmanAtty is a healthcare fraud defense attorney specializing in representing healthcare providers facing federal white collar crime allegations. He has successfully represented a significant number of physicians to acquittal on unlawful prescribing and healthcare fraud allegations and investigation dismissals. He is a highly regarded expert in the field and regularly speaks and writes nationally on the topic. What is the fate of a well intended physician who practices "in Good faith" but fails to conform to shifting standards of medical practice? This is the question posed in United States v. Godofsky, 943 F.3d 1011 (2919) wherein the 6th Circuit Court of Appeals effectively tanked the "good faith" standard for prescribing narcotics. While this decision quietly slipped into physician drug trafficking jurisprudence, it has now been frequently cited by prosecutors to support further erosion of medical judgment in favor of shifting Government narratives as to the appropriateness of prescribing narcotics. This coupled with the American Medical Association's new disgust with the CDC guidelines, a tool wielded by Federal Prosecutors to supplant medical judgment, leaves us with the feeling that the appropriate standard of conduct for a physician is "whatever the government says it is, when it says it is, subject to change without notice". The good faith standard explained In opioid prescribing cases in the 6th Circuit, physicians who have the benefit of knowledgeable criminal defense counsel avail themselves of the "good faith" defense. This defense is codified in the 6th Circuit case United States v. Volkman where the 6th Circuit upheld a jury instruction that stated: It is the theory of the defense that Dr. X treated his patients in good faith. If a physician dispenses a drug in good faith in the course of medically treating a patient, then the doctor has dispensed the drug for a legitimate medical purpose in the usual course of accepted medical practice. That is, he has dispensed the drug lawfully. This "good faith" standard has been utilized to protect the well intended physician who unknowingly prescribes to a patient who is seeking a controlled substance "for other than a legitimate medical purpose and outside the course of professional practice" . If a physician was honestly exercising his professional judgment but was mistaken or even flat wrong, he or she can escape jail and prosecution. Put another way, if a physician's conduct did not conform to the (now hotly contested) CDC guidelines but they were honestly treating a patient's legitimate pain, they could be free from conviction. In another death blow to physician judgment, the 6th Circuit has determined that the subjective intent of a physician is not relevant and that physicians' actions must conform to the "reasonable physician standard" in order to be considered lawful. United States v. Godofsky Dr. Godofsky what charged along with several other defendants of running a "pill mill" called the Central Kentucky Bariatric and Pain Management clinic located in Georgetown, Kentucky. Dr. Godofsky worked there and prescribed pain medication to patients. The 6th Circuit opinion, like most in this area of law, spilled a lot of ink on the layout of the clinic, its staff, numbers of patients, and the overall feeling of the clinic but made no mention of the quality of patient care received by patients there. The opinion claims that the clinic did not accept medical insurance, had an armed guard at the door and the manager patrolled the premises with a German Shepard. The opinion did not discuss the illnesses of the patients, imaging studies, results of diagnostic testing and compliance protocols. The 6th Circuit opinion proclaimed that during his ten months at the clinic, Godofsky worked about 120 days and wrote nearly 6,000 prescriptions for over 552,000 dosage units as if the volume and quantity of an opioid prescription had something to do with its legitimacy. Moreover, the opinion claims that Dr. Godofsky received $200,000 during the time he worked there as if the amount of money a physician makes is a relevant factor in the legitimacy of a particular prescription. Dr. Godofsky's attorney argued vehemently for the instruction quoted above but was rejected by the trial judge in favor of a simple instruction stating that a physician must knowingly and intentionally prescribe for other than a legitimate medical purpose outside the course of professional practice in order to be convicted. Dr. Godofsky was convicted of drug trafficking and sentenced, his attorney appealed the instruction as given. In rejecting his appeal the 6th Circuit rejected the Volkman instruction sought by Dr. Godofsky's attorney because it could arguably be used to support the theory that a jury must acquit a doctor if they acted with "good intentions in accordance with what he believed to be proper medical practice" even if such beliefs were in violation of the law. The 6th Circuit opines: "a licensed professional has an obligation to know and comply with the regulations associated with his field he can't just say well I did what I thought was best, he must do what he knows or believes complies with the rules and regulations". The obvious and most dangerous part of the 6th Circuit's position is that there are no common "rules and regulations" that clearly define permissible conduct for those that practice the science and art of medicine. Even the CDC guidelines, a frequent tool of prosecutors, is being walked back and distanced due to its dangerous impact on patient care. The Court now appears to hold an "objective good faith" standard requiring physicians to conform to the conduct of a "reasonable doctor under the circumstances". The Court stated: "this is more or less objective good faith: whether a reasonable doctor under the circumstances could have believed, albeit mistakenly, that he had acted within the scope of ordinary professional practice for a legitimate medical purpose." The Court's "objective good faith standard" dangerously mirrors the medical malpractice standard and appears to subject 6th Circuit physicians to criminal penalties - up to and including life in jail - for mere acts of negligence or incompetence. A standard that subjects doctors to prosecution for mere acts of negligence is a dangerous precedent that erodes the practice of medicine, patient care, and the autonomy of a physician to treat his patients limited only by his professional judgment and medical ethics.

Groundbreaking 4th Cir Opioid Decision: Physician Conviction Overturned

Ronald W. Chapman @RonChapmanAtty is a healthcare fraud defense attorney specializing in representing healthcare providers facing federal white collar crime allegations. He has successfully represented a significant number of physicians to acquittal on unlawful prescribing and healthcare fraud allegations and investigation dismissals. He is a highly regarded expert in the field and regularly speaks and writes nationally on the topic. Learn more about Ron Finally some good news out of the 4th Circuit today. The United States Court of Appeals for the 4th Circuit overturned the conviction of a physician convicted of unlawful prescribing. The 4th Circuit ruled in United States v. Brizuela (order attached below) that patients whose treatment was not made at issue in an indictment cannot be called by the Government to prove the conduct in the indictment. This groundbreaking decision will have the impact of preventing the common Government tactic of indicting certain conduct and introducing other conduct at trial by surprise. When the Government issues an indictment, it's required to present a case to a grand jury and allow the grand jury to determine whether an offense has been committed. Typically, evidence of other crimes, acts or wrongs is not admissible at trial unless it's included in the indictment. See, Fed. R. Evid. 404(b). There are some exceptions where the conduct can show a motive, opportunity, method of operation, or common scheme or plan. In United States v. Brizuela, the 4th Circuit boldly held that evidence of other independent prescriptions was not evidence of a common scheme or plan because the decision to prescribe to a single patient is an isolated decision unless supported by some other evidence of a common scheme or plan (such as treatment of a recruiter's patients). Dr. Brizuela was a physician operating a pain management and addiction medicine clinic in West Virginia. He was indicted by the U.S. Attorneys Office after an investigation by the Drug Enforcement Administration related to complaints of a patient death. The US Attorneys office indicted him for 21 prescriptions to five different patients. However, at trial, the Government filed a 404(b) notice that it intended to offer prescriptions for other patients. The Government argued that this testimony was relevant because it showed that Dr. Brizuela's prescribing was not a mistake but rather an intentional act and that he practiced in a similar to other patients. Quoting another 4th Circuit case, United States v. Alerre, 430 F.3d 681, 691 (4th Cir. 2005), it argued that uncharged prescriptions can be used to prove the "extent and severity of Brizuela's violation". Click Here to Learn More About DOJ Tricks In Prosecuting Physicians In ruling very favorable to physicians facing drug trafficking prosecutions in the future, the 4th Circuit Court of Appeals determined that evidence of prescriptions not charged in an indictment and the testimony of patients whose treatment was not charged by the Government is inadmissible to establish indicted conduct. Intrinsic to this ruling is that the distribution of a specific prescription to a specific patient is a singular act and not a continuing scheme. The court boldly stated: "It is certainly true that in prosecuting doctors for unlawfully distributing controlled substances under § 841, the government must prove “beyond a reasonable doubt that the doctor was acting outside the bounds of professional medical practice.” Alerre, 430 F.3d at 690 (internal quotation marks omitted). And we have previously allowed “evidence that a physician consistently failed to follow generally recognized procedures [] to show that in prescribing drugs he was not acting as a healer but as a seller of wares.” Id. at 691. But neither Alerre nor any other case identified by the government allow admitting the testimony of patients whose treatment was not the basis for a defendant’s § 841 charges, or permit admitting uncharged acts that are not necessary to the stories of the prescriptions cited in a § 841 charge.9 See Alerre, 430 F.3d at 691; United States v. McIver, 470 F.3d 550, 561 (4th Cir. 2006). As stated above, a doctor’s violation of § 841 is prescription specific, and writing a prescription only violates § 841 if, in doing so, the doctor strays from bounds of professional medical practices in treating that specific patient. See Tran Trong Cuong, 18 F.3d at 1142; United States v. Singh, 54 F.3d 1182, 1187 (4th Cir. 1995). Therefore, the relevant “story” for a § 841 offense is whether in writing the cited prescription, the defendant doctor was treating the patient receiving the prescription within the bounds of professional medical practices. Because the Government in the Brizuela case did not "connect the story" between the unindicted patient treatment and the indicted patient treatment, Dr. Brizuela's conviction was overturned and remanded for a new trial. The Government has the option of appealing to the United States Supreme Court, however the Court is unlikely to hear the issue.

19 Detroit Healthcare Professionals Indicted for Unlawful Prescribing

Ronald W. Chapman II @RonChapmanAtty is a healthcare defense attorney and specializes in representing physicians and other health professional in government investigations and indictments related to the practice of medicine. He speaks nationally on the topic and has appeared in national publications. He obtains frequent victories for his clients facing government scrutiny. To learn more about Ron click here. The United States Attorney for the Eastern District of Michigan indicted nineteen healthcare professionals today, June 11, 2020. See Indictment Below. The indictment alleges that between September 2017 and June 2020 the Defendants engaged in a scheme involving the unlawful distribution of opioids. The indictment alleges that the conspiracy was between medical clinics, rehab centers and pharmacies involving nearly two million controlled substances of a value of over $41 million. The Indictment alleges over forty-four independent violations of 21 U.S.C. 841(a) and it also alleges that the nineteen defendants engaged in a conspiracy to violate 21 U.S.C. 846 - controlled substance conspiracy. The indictment was issued by Detroit's Healthcare Fraud Unit and will be prosecuted by Brandy McMillion and Mitra Jafary-Hariri, two federal prosecutors in that division. The Detroit Healthcare Fraud Unit is very experienced at prosecuting healthcare fraud and opioid trafficking cases. All defendants are innocent until proven guilty and prior experience with the Detroit Healthcare Fraud unit has revealed that it aggressively charges healthcare practices on the basis of statistics rather than actual patient care. This practice is a new tactic by the DOJ and can lead to charging errors and unnecessary government scrutiny. In order to convict health professional for unlawful distribution of controlled substances (sometimes referred to as running a pill mill) the Government must prove that the physicians prescribed controlled substances for "other than a legitimate medical purpose and outside the course of professional practice". This is a very difficult standard to meet. The Government must show that prescriptions were not for pain but rather in order to achieve some other unlawful purpose. To Learn More About the Standard See Our Resources Page Here To Learn More About the History of the Controlled Substance Act Click Here Defense of unlawful distribution charges requires a focused defense that highlights the patient care provided to each individual patient and knowledge of Federal Drug Laws, CDC Guidelines for Prescribing, and the standards of practice for pain management (ASIPP, ASAM, etc.). As this case progresses, there are sure to be a significant number of Michigan pain patients separated from their provider. Often, prosecutors and the DEA fail to consider this fact because they believe that all prescriptions issued in such a practice are unlawful. To Learn More About Government Prosecution Tricks Click Here Before agreeing to any plea to unlawful distribution, a physician must consult with an experienced healthcare defense attorney who understands the law, medicine, and applicable standards. If you are a provider facing Government scrutiny read this before considering a plea of guilty. The case is pending before Judge Bernard Friedman and Magistrate David R. Grand. More updates to follow. Ronald W. Chapman II@RonChapmanAtty is a healthcare defense attorney and specializes in representing physicians and other health professional in government investigations and indictments related to the practice of medicine. He speaks nationally on the topic and has appeared in national publications. He obtains frequent victories for his clients facing government scrutiny.

War On Opioids: Ten DOJ Tricks Used in Prosecutions Against Doctors and How to Avoid Them

Follow us on twitter: @HealthcareDef Ron Chapman II, LL.M @RonChapmanAtty is a healthcare defense attorney that specializes in white collar criminal defense and defending government investigations. He is the author of several notable publications on the issue and obtains frequent victories on behalf of his clients. I have had the opportunity to represent hundreds of healthcare professionals facing scrutiny from the federal government for healthcare fraud and drug trafficking. From this perspective I have been able to see the evolving playbook utilized by the DOJ to prosecute physicians. A playbook that has resulted in resounding success for the DOJ in the courtroom. It is only by knowing this playbook and preparing a trial strategy around the DOJ's litigation strategy that brings success to a healthcare fraud or opioid defense. Here are ten tricks used by the DOJ to convict physicians and other healthcare professionals for charges of healthcare fraud and unlawful prescribing. 1. Lowering the Standard The Department of Justice (DOJ) and Assistant United States Attorneys (AUSA) often attempt to lower the standard of proof in order to convince a jury that conduct more akin to malpractice is sufficient for a conviction. Attorneys must be weary of such efforts and ensure that any effort to lower the hefty burden of a federal prosecution is met with resistance. Not long ago a prosecutor approached me with a plea deal for a physician accused of prescribing controlled substances and healthcare fraud. He informed me that he had a great case against the physician and that he should plead guilty to drug trafficking and healthcare fraud. His theory was that the physician failed to check a box on DEA paperwork and was therefore not actually authorized to prescribe schedule II controlled substances. According to his theory, each subsequent prescription was unlawful. Even the most liberal interpretation of Federal law does not support the prosecutor's case. It was evident to me that this prosecutor did not appreciate (or flatly ignored) the applicable legal standard to prove unlawful prescribing. In order to be convicted of unlawful prescribing the Government must prove that the physician prescribed "for other than a legitimate medical purpose outside the course of professional practice". Likewise, in order to be convicted of healthcare fraud, the Government must prove that a physician devised and executed a scheme or artifice to defraud a federal healthcare program and that the physician knowingly billed a federal healthcare program in a fraudulent manner (i.e. upcodng, unbundling, billing for services not rendered). These standards essentially require that the physician knowingly engaged in criminal conduct. Violation of a regulation is not sufficient, nor is carelessness, recklessness or malpractice. If juries truly understand and apply the standard, it is much more difficult to convict a defendant. The majority of the trial must be spent on indoctrinating the jury to understand the applicable legal standard. It must be mentioned often, in opening statement, during the expert's testimony and during closing argument. 2. Improper Use of Statistical Data - "statistical profiling" Profile evidence is the use of data to show that a particular defendant fits the "profile" of a criminal and therefore is in fact a criminal. It has been used in gang prosecutions but later subject to harsh rebuke by appellate courts. Profile evidence is inherently a fallacy and only as probative of criminal conduct as the assumptions of criminality used to generate the data. Healthcare fraud and unlawful prescribing prosecutions generally begin with an analysis of data. The DOJ will determine that the physician is the #1 prescriber of oxycodone in his or her state or has preformed more procedures than any other physician in the state. The DOJ may introduce PDMP data to show the volume of prescribing relative to a physician's peers. Such data must be met at trial with an emphasis on individual patient care. This includes calling real patients as witnesses to have them testify to their experiences with the physician defendant. Moreover, if the physician and his or her counsel have the capability, additional data sets should be created and introduced that show that the physician is not an outlier in other areas. For instance, the provider may be the highest prescriber of oxycodone in the state but he or she may also be a high prescriber of NSAIDS and other treatments, suggesting that the oxycodone number was a function of volume and not improper treatment. 3. Use of "Red Flag Evidence" The DEA has historically used red flags during investigations of physicians. These red flags are widely known in the medical community. Some red flags include: asking for drugs by name, doctor shopping, showing up in groups, traveling long distances for treatment. The DEA typically has an undercover DEA agent or informant pose as a patient and exhibit several red flags to determine if the physician will prescribe. In a healthcare fraud investigation, the undercover agent will attend an office appointment to determine if the physician actually preformed the visit that he or she billed for. The issue with "red flags" is that they are also signs of completely legitimate patients as well. The use of "red flag" evidence must be met with a motion to exclude "red flag evidence" on the basis that it is improper profiling evidence and not based on any scientific or reliable methodology. 4. Conflating Medicare Regulations Medicare and medicaid regulations are detailed and complex. Many regulations are so complicated that professionals with healthcare compliance degrees still struggle to understand them. In healthcare fraud and opioid prosecutions the Government uses healthcare regulations such as Medicare rules and guidelines to create a heightened standard of care. The government argues that the physician should have known about the regulations and violating the regulation is flagrant disregard for the rules that the health professional agreed to follow when he or she signed the 855I (Medicare enrollment document). However, courts often permit a jury instruction to be read to the jury clarifying that violation of a medicare rule or regulation is not a criminal offense. This instruction must be pursued and used to indoctrinate the jury. 5. "The Early Bird Gets the Worm" Typically, prosecutors extend me a plea offer early in the case before I have had sufficient time to investigate. Prosecutors usually provide a deadline for the offer and inform me that my client better accept this plea agreement before the arbitrary deadline imposed by the prosecutors. Prosecutors claim that the first person to accept a plea deal will get the best deal because he or she can testify against co-defendants in the case and receive a reduced sentence due to the US Sentencing Guidelines over emphasis on reduced sentences for cooperating defendants. However, throwing important fundamental rights away simply to secure a rushed deal before fully analyzing the criminal case is a reckless strategy. If a prosecutor gives me a timeline to accept a deal, I commonly ask them to provide me sufficient data to analyze the Government's case and the evidence against my client in order to determine if it is a good deal or if I have sufficient defenses to begin trial preparation. Often we forgo the initial plea offer only to receive better offers as we near trial. I can recall a specific case where the Government offered me a sentence of probation and a plea to a misdemeanor literally on the courthouse steps right before a long jury trial was set to begin. My client declined the offer and we were victorious at trial. 6. Conceal Patient Sample to use at Trial When charging a healthcare fraud or drug trafficking case against a physician or other healthcare provider, the Government often casts a wide net wording the charges as broadly as possible to include as many interpretations of fraudulent conduct as possible. It is important to spend significant energy during the pre-trial motions phase to limit the scope of the prosecution as much as possible. Defense counsel can file a motion for a bill of particulars specifically detailing the alleged wrongful conduct or request discovery on the specific executions of healthcare fraud alleged. Defense counsel should request expert disclosure deadlines and discovery deadlines in order to ensure the ability to review evidence sufficiently before trial to prepare a defense. Defense counsel must prevent the government from entering a trial with the ability to pluck any number of patients, medicare bills, and prescriptions and conduct a trial by surprise. 7. Pre-trial Seizure of Assets Prosecutors know that financial stress causes defendants to plea. This is typically why the Government will go through great lengths to freeze and seize assets prior to the initiation of a prosecution. This forces many defendants to forgo representation by skilled defense attorneys who are experts in their field in favor of a court appointed attorney who accepts a wide manner of cases. While public defenders are often skilled litigants, lack of funding for experts, investigators, and trial resources prevent even public defenders from engaging in a robust defense of an accused health professional. The only way to prevent the Government from infringing on a healthcare defendant's sixth amendment right to choose his or her defense counsel with his or her funds is to obtain counsel before the initiation of an indictment. Defendants must, at the earliest sign of government involvement, obtain counsel and ensure that a sufficient amount to withstand a healthcare fraud investigation and trial is available to counsel. 8. Inaccurate Witness Statements I have read thousands of witness statements during my career and the majority stretched the facts so thin they were not capable of being relied upon to determine my client's trial posture. Government investigator statements such as FBI 302 statements and DEA 6 statements are drafted by law enforcement who generally have an inherent bias towards criminality. To the greatest extent possible, all witnesses must be interviewed by defense counsel and/or a defense investigator. Counsel and clients should not rely on governments statements when determining the facts in the case, information must be independently verified. 9. The DEA Voluntary Surrender Ploy I routinely receive calls from physicians whose offices have just been the subject of a DEA raid. The physician explains to me that during the raid the DEA requested that he "voluntarily surrender" his DEA registration as a "show of good faith". The DEA calmly explains that all the physician must do is re-apply to get it back. Unfortunately, this is false information. Re-application can take years and the DEA is not required to give the registration back, the physician's best change of remaining employed while dealing with a costly and stressful legal battle is to decline voluntary surrender and request the assistance of an attorney. The reason the DEA attempts to coerce physicians into voluntary surrender is because relieving a doctor of his or her DEA registration is a very time consuming and laborious process for the DEA. There are too many doctors targeted by the DEA an not enough DEA attorneys and administrative law judges to deal with the existing backlog of cases. If the physician described above responds with a simple "no thanks", he or she will likely be able to continue to prescribe during the pending criminal case subject only to any district court pre-trial release restrictions. 10. Flipping Patients and Flipping Office Staff Routinely, during a raid or during the investigation of a physician, the Government attempts to "flip" patients and office staff against a physician. This is done by offering sweetheart plea deals in exchange for witness testimony or by targeting patients with a prior criminal history who fear harsh federal sentences. Patients and office staff must be interviewed as early in the case as possible to ensure that their statements are "locked in" at the beginning of the case or during a pre-indictment internal investigation. This will ensure that defense counsel can preserve the truth before the Government begins making promises to witnesses. Ron Chapman II, LL.M@RonChapmanAtty is a healthcare defense that specializes in white collar criminal defense and defending government investigations. He is the author of several notable publications on the issue and obtains frequent victories on behalf of his clients.

DEA Now Authorized to Enforce Any Federal Crime Related to Death of George Floyd

Follow us on Twitter @HealthcareDef By Ronald Chapman, LL.M. @RonChapmanAtty According to a document released by Buzfeed, the DEA is now authorized to enforce a broader range of federal statutes in the wake of protests over the death of George Floyd. If this is the case, it would be a shocking and unprecedented exercise of agency power, Timothy J. Shea, the newly appointed Acting Administrator of the DEA just gave the DEA the authority to investigate and make arrests for non drug offenses. The DEA's authority was previously limited to enforcing Federal crimes enumerated under Title 21 - the Controlled Substances Act. The Controlled Substances Act relates solely to drug offenses. This recent unprecedented action authorizes the DEA to investigate and arrest citizens who are alleged to have committed non drug offenses. Essentially, the DEA has been given the broadest possible authority in investigating, surveilling, and arresting protesters engaging in protests over the Death of George Floyd. This recent action was likely at the behest of President Trump who seeks to mobilize a broad range of federal power to "shut down" recent protests over the death of George Floyd. He made this point clear during a Monday June 1, 2020 call with Governors. Due to covert drug operations the DEA excels in its ability to preform undercover operations posing as traditional citizens. This is likely why Mr. Trump feels the DEA is valuable to his cause. Read the Shocking Two Page Memo

The War on Opioids: Inside Appalachia's Opioid Task Force

By Ronald Chapman, LL.M. @RonChapmanAtty Follow us on Twitter @HealthcareDef What is the ARPO? Following a US Department of Health and Human Services report regarding opioid use in the Appalachian Region, the Department of Justice (DOJ) announced the creation of a new multi-agency task force: The Appalachian Regional Prescription Opioid Strike Force. The ARPO is a multi-agency task force comprised of agents and prosecutors from: The Department of Justice Eastern District of Kentucky Western District of Kentucky Southern District of Ohio Western District of Virginia Northern District of West Virginia Southern District of West Virginia Eastern District of Tennessee Middle District of Tennessee Western District of Tennessee Northern District of Alabama Western District of Alabama the FBI Cyber Response and Services Branch Health and Human Services DEA Diversion Control Center for Medicare and Medicaid Services What is its Mission? The ARPO is tasked with enforcing Federal Controlled Substance and Healthcare Fraud laws and regulations in Alabama, Ohio, West Virginia, Virginia, Kentucky, Pennsylvania, and Tennessee. In its report HHS claims that 48,584 pain patients in 5 states received high amounts of opioids that exceeded (the now hotly contested) CDC guidelines. The report claims that the amount of pain medication prescribed to Medicare beneficiaries above the CDC "guideline levels" raises concern. The report concludes that there is a hotspot of unlawful opiate prescribing in five states far exceed the national average. The report recommends that the Department of Health and Human Service strengthens public health surveillance, target the availability of "overdose-reversing drugs" and work with law enforcement to take down "pill mills" and illicit controlled substance prescribing. The ARPO's stated mission is to: "identify and investigate health care fraud schemes in the Appalachian region and surrounding areas, and to effectively and efficiently prosecute medical professionals and others involved in the illegal prescription and distribution of opioids" Are you defending charges of illicit prescribing? Read this before accepting a plea agreement. You may think twice. How Does it Prosecute Cases? The ARPO strike force is continuing to grow and will continue to aggressively target pain management physicians and pharmacists for prosecution. Typically investigations begin either by information from an informant who may be a patient treated by the practice or based on a statistical review of prescribing habits. For more information about the use of statistical data in healthcare fraud and opiate prescribing prosecutions - read this article by the same author Typically, agents from HHS and the FBI review statistical data related to Medicare Part D billing information or state prescription drug monitoring data to determine if a physician is prescribing above the (hotly contested) CDC guidelines. If law enforcement determines that there is sufficient information to move forward with an investigation, law enforcement may attempt undercover visits or interviews of patients who have prior interaction with law enforcement or are on probation. An undercover visit will typically be preformed by either an undercover agent (DEA, FBI, or HHS) posing as a patient or a patient who has experience as an informant - usually called a Confidential Informant. This informant will try to exhibit many "red flags" that the DEA believes should make a physician or pharmacist cautious about dispensing or prescribing. Many times, the undercover will indicate legitimate pain such as low back pain or neck pain. However, the DEA and prosecutors believe that even if a patient exhibits such pain, a physician should not dispense if there are a sufficient amount of "red flags present". DEA "Red Flags" Cash only Patients traveling from out of state High proportion of Schedule II controlled substance Physician operating outside of his "scope of practice" Pre-signed prescriptions Lack of Board Certification Arrives in a group Arrives with family members Doctor shopping Requests drugs by name Claims allergies to non-opioid alternatives Requests high doses of pain medications Obviously, many of the "red flags" listed above are shared by illicit and genuine pain patients alike. Moreover, the list of "red flags" was not created by any peer reviewed medical study but rather is a list solely compiled by law enforcement. If a physician issues a prescription for a controlled substance in the face of "red flags" the ARPO will continue to investigate compiling both statistical and surveillance data to make a case that the physician and practice is engaged in a conspiracy to distribute controlled substance. The task force has the ability to, among other things, wiretap phones, conduct electronic surveillance, mine data, interrogate patients, send subpoenas for medical records and execute search warrants. If the ARPO believes sufficient evidence exists to determine that a violation of Federal law, such as healthcare fraud or unlawful distribution, it will take the case to a prosecutor and obtain an indictment. The ARPO typically charges physicians and pharmacists with the following charges: 21 U.S.C. 841 (unlawful prescribing) 21 U.S.C. 846 (controlled substance conspiracy) 18 U.S.C. 1347 (healthcare fraud) 18 U.S.C. 1349 (healthcare fraud) What Should You Do if You Are Targeted by the ARPO? Attorney Ronald W. Chapman II is a healthcare defense attorney and defends physicians against the the DOJ and ARPO. He has obtained acquittals of physicians prosecuted by the ARPO. If you are defending allegations of healthcare fraud or unlawful prescribing brought by the ARPO contact Ronald W. Chapman II, LL.M. for a free consultation or second opinion today.

The War on Opioids: History of the Controlled Substances Act and its impact on physicians

In the nineteenth and twentieth centuries, drug control policy was largely a revenue measure in order to capture revenue from the extensive Chinese opium trade.[i] Noticing the growing problem of addiction due to the high availability of opium products, the United States enacted the Tariff Act of 1832 to curb addiction.[ii] While opium was not initially taxed as part of the law, in 1842, opium was placed on the tariff lists and a tax of 75 cents per pound was levied on all opium.[iii] As opium use became more popular, subsequent amendments to the Tariff Act of 1832 increased the tax until opium was taxed at the astonishing rate of 80% in 1862.[iv] During the late nineteenth century the national appetite for opium continued to grow, and chemists began making patent medicines heavily laced with opium, morphine, and cocaine.[v] The federal response to rampant opiate addiction in the early twentieth century was swift, but only focused on labeling restrictions in order to increase consumer information about the effects of opiates.[vi] The Pure Food and Drug Act of 1906 made it unlawful to sell a mixture containing opium, cocaine, and other listed substances if the label did not clearly indicate the presence of the listed substance.[vii] Further controls during the early twentieth century came in the form of import and export controls in order to stem the flow of opium from China.[viii] CHECK OUT OUR HEALTHCARE FRAUD DEFENSE RESOURCES PAGE The Harrison Narcotic Tax Act of 1914 (“the Act”) was the first substantial step towards the closed system of distribution of narcotics and the limitation of narcotics to prescriptions issued by physicians for “legitimate medical purposes.”[ix] Interestingly, like its predecessors, the Act was still a revenue measure essentially making it illegal to distribute narcotics without a tax stamp, which cost one dollar per year.[x] However, the Act went further and required that distributors register with the local Internal Revenue Collector and keep meticulous records of drug transfers.[xi] In addition, the Act required a “written order” which must be kept by the distributor or prescriber for two years.[xii] The Act also contained a specific exemption where an order for a drug was issued by a physician to a patient in the “course of his professional practice.”[xiii] CHECK OUT OUR OTHER BLOG ENTRIES United States v. Jin Fuey Moy was one of the first cases in which the Supreme Court was asked to determine the applicability of the Harrison Tax Act to a physician’s practice.[xiv] Dr. Jin Fuey Moy was indicted for engaging in a conspiracy with Willie Martin to distribute morphine sulphate.[xv] Mr. Martin was not registered with the local Internal Revenue Collector as required by the Act and, as such, could only receive the morphine sulfate pursuant to a written prescription.[xvi] Dr. Moy issued prescriptions to Mr. Martin and the indictment alleged that the prescriptions were not written “in good faith” and not for a “medical purpose” but rather simply for the purpose of supplying Mr. Martin drugs to feed his addiction.[xvii] Given that Mr. Martin was not registered under the Act and was not a patient receiving medication for a “medical purpose,” the government indicted Dr. Jin Fuey Moy.[xviii] The court reasoned that the Act was created pursuant to a treaty and was enacted pursuant to the government’s spending power and, therefore, did not apply generally to the public but rather only to those that the Act sought to regulate.[xix] The court declined to give the Act the power of a general police measure because it was enacted as a revenue act under Congress’s spending power.[xx] The constitutionality of passing a revenue measure that had the purpose and effect of an encroachment on the states’ police power to regulate the practice of medicine was revisited three years later in United States v. Doremus.[xxi] Dr. Doremus was indicted for providing heroin to an individual “not in the course of professional practice” but because the patient was a “dope fiend.”[xxii] The district court, following Jin Fuey Moy, declared that the Act was not a proper revenue measure and was an invasion of the police power reserved to the states.[xxiii] Declining to usurp Congress’ constitutional shell game, the Supreme Court disagreed and held that the Act cannot be declared unconstitutional simply because it accomplishes another purpose other than raising revenue.[xxiv] The effect of Doremus was sweeping; the Supreme Court gave Congress the authority to “supplant any contrary state law and impose a nationwide blanket prohibition on the sale of narcotics to be enforced with severe criminal penalties, excepting only distribution that the Treasury Department (and the Court) deemed to be in the regular course of the professional practice of medicine.”[xxv] The Supreme Court did not waste any time in weighing in on whether a physician’s practice was appropriate. On the same day as its decision in Doremus, the Supreme Court issued its opinion in Webb v. United States which was the first time the Supreme Court delved into the murky waters of determining the legality of a physician’s prescribing practices.[xxvi] Dr. Webb was a properly registered practicing physician who worked in close proximity with Mr. Goldbaum, a retail pharmacist in Memphis.[xxvii] Dr. Webb prescribed morphine for “addicts” without examination and solely for the purpose of treating addiction, provided they apply and pay the necessary office visit fee of 50 cents. Dr. Webb claimed that he would prescribe morphine in such a way that would tend to “cure” or “break the addiction.”[xxviii] Mr. Goldbaum regularly filled the prescriptions and ultimately filled “thirty times as much morphine” as was bought by the average pharmacy in Memphis.[xxix] With little fanfare, the Supreme Court declared that to consider such an order a “prescription would be so plain a perversion of meaning that no discussion of the subject is required.”[xxx] Six years later in Linder v. United States[xxxi] the Supreme Court appeared to claw back some of the power provided to Congress in its previous Harrison Act decisions. Justice McReynolds, joined by eight colleagues, writes, “[o]bviously, direct control of medical practice in the States is beyond the power of the Federal Government. Incidental regulation of such practice by Congress through a taxing act cannot extend to matters plainly inappropriate and unnecessary to reasonable enforcement of a revenue measure.”[xxxii] The court noted that the Act says nothing of “addicts” and does not undertake to prescribe methods for medical treatment. Furthermore, the unanimous opinion stated that the court cannot conclude that a physician acted inappropriately simply for prescribing to an “addict.”[xxxiii] Interpreting the Act to mean that a physician may “never give an addict moderate amounts of drugs for self-administration in order to relieve conditions incident to addiction would certainly “encounter grave constitutional difficulties.”[xxxiv] Leaving no question that the Supreme Court does not want Congress meddling in the proper bounds of the practice of medicine, the court left us with the following: The unfortunate condition of the recipient certainly created no reasonable probability that she would sell or otherwise dispose of the few tablets entrusted to her; and we cannot say that by so dispensing them the doctor necessarily transcended the limits of that profession, conduct with which Congress never intended to interfere.[xxxv] As the Nixon administration was attempting to reign in the rampant drug use left over from the 1960’s and the effects of the Vietnam war, the Nixon administration unveiled its “War on Drugs” initiative.[xxxvi] President Nixon’s major platform initiative during the 1970’s was to stem drug abuse and drug crime in the United States. The President’s anti-drug rhetoric was effective; Richard Nixon and Congress received a powerful mandate from the electorate, as President Nixon won every state but Massachusetts in the 1972 election.[xxxvii] The Controlled Substances Act was passed in 1970 as the Comprehensive Drug Abuse Prevention and Control Act of 1970 and received strong bi-partisan support with only six votes against passage.[xxxviii] It would not be long u [i] T.M. Quinn & G.T. McLaughlin, The Evolution of Federal Drug Control Legislation, 22:3 Catholic University L. Rev. (1973).

[ii] See Tariff Act of 1832, Ch. 227, § 3, 4 Stat. 590 (1832).

[iii] Ch. 270 § 8, 5 Stat. 548 at 558 (1842).

[iv] Ch. 163, § 5, 12 Stat. 543 at 548 (1862).

[v] See source cited supra note 21, p. 591.

[vi] Id.

[vii] Ch. 3915, 34 Stat. 768 (1906).

[viii] Ch. 100, 35 Stat. 614 (1909); International Opium Convention, The Hague (Jan. 23, 1912), 38 Stat. 1912 (1915).

[ix] Ch. 1, 38 Stat. 785 (1914).

[x] Ch. 1, § 6, 38 Stat. 785 (1914).

[xi] Id.

[xii] Ch. 1, § 3, 38 Stat. 785 (1914).

[xiii] Id.

[xiv] United States v. Jin Fuey Moy, 241 U.S. 394, 399 (1916).

[xv] The combination of substances found in Oxycontin. Id.

[xvi] Id.

[xvii] Id.

[xviii] Neither the government nor the court addressed the presumption that supplying medication to Mr. Martin for the purpose of satisfying his addiction was for a “non-medical” purpose. The court would not do so until Linder v. United States in 1925. Linder v. United States, 268 U.S. 5 (1925).

[xix] Id. at 400.

[xx] Id.

[xxi] United States v. Doremus, 249 U.S. 86 (1919).

[xxii] Id. at 90.

[xxiii] Id. at 94.

[xxiv] Id.

[xxv] Christopher Bryant, The Third Death of Federalism, 17 Cornell J. L. & Pub. Pol’y 101, 109.

[xxvi] Webb v. United States, 249 U.S. 96 (1919).

[xxvii] Id. at 97.

[xxviii] Likely a form of “weaning” as is commonly done with Suboxone and other opiate addiction treatment regimes.

[xxix] Id. at 99.

[xxx] Id.

[xxxi] Linder v. United States, 268 U.S. 5 (1925)

[xxxii] Id. at 18.

[xxxiii] Id.

[xxxiv] Id. at 22.

[xxxv] Id. at 22-23.

[xxxvi] Richard Nixon, 28 - Statement on Establishing the Office for Drug Abuse Law Enforcement, The American Presidency Project (Jan. 28, 1972), http://www.presidency.ucsb.edu/ws/?pid=3552.

[xxxvii] Election of 1972, The American Presidency Project, http://www.presidency.ucsb.edu/showelection.php?year=1972 (last visited May 20, 2018).

[xxxviii] House Vote #355 in 1970 (91st Congress), Govetrackhttps://www.govtrack.us/congress/votes/91-1970/h355 (last visited Jun. 6, 2018).

Federal Judge Awards Michigan Physician COVID Compassionate Release

The Hon. Judith E. Levy ordered the release of a Michigan physician sentenced to sixty months for unlawful prescribing. CLICK THE LINK BELOW TO READ THE OPINION AND ORDER The physician was represented by Ronald Chapman at sentencing and was facing over twenty years in prison after pleading guilty to healthcare fraud and unlawful distribution of controlled substances. He was sentenced in February 2018 to sixty months in prison. Now, after serving just nine of his required sixty months in custody, Judge Levy ordered his release under the Compassionate release program. The First Step Act modified compassionate release for federal inmates requiring that to conditions are satisfied, 1) exhaust administrative remedies available with the BOP or wait 30 days after sending a request for release to the warden of the Defendant's facility, and 2) the Defendant shows extraordinary circumstances. 18 U.S.C. 3582(c)(1)(A)(i). Since the outbreak of COVID-19 courts around the country have wrestled with the question of whether a judge may waive the 18 U.S.C. 3582(c) exhaustion requirement and reach the merits of a Defendant's petition. Many other judges, including those in the Eastern District of Michigan, have gone the other way. See, United States v. Reddy, No. 13-20358, 2020 WL 2320093, at *4 (E.D. Mich. May 11, 2020) (reaching the merits because “the purposes of the exhaustion requirement have been satisfied” and because “excusing strict exhaustion
. . . during the COVID-19 pandemic is consistent with the congressional intent underlying the exhaustion requirement”); United States v. Atwi, No. 18-20607, 2020 WL 1910152, at *3 (E.D. Mich. Apr. 20, 2020) (reaching the merits because of the “once-in-a-lifetime circumstances of COVID-19 and the personal characteristics of [the defendant] . . . it would respect Congress’ intent in placing a 30-day clock on the Warden to act, to allow [the] motion to be heard now”); United States v. Mathews, No. 14-20427, 2020 WL 1873360, at *2 (E.D. Mich. Apr. 15, 2020) (declining to reach the merits because “[t]he statute does not contain the type of exception contemplated by Defendant. Granting such an exception would rob the BOP of the opportunity to address Defendant’s request”);United States v. Alam, No. 15-20351, 2020 WL 1703881, at *2 (E.D. Mich. Apr. 8, 2020) (declining to reach the merits because “courts have a role in creating exceptions only if Congress wants them to . . . even if an exception to 18 U.S.C. § 3582(c)(1)(A)’s filing requirements for defendants is appropriate during the COVID-19 pandemic, the Court lacks authority to craft such an exception”). The physician in this case could not show that he satisfied the exhaustion of administrative remedies requirement because he did not exhaust his administrative remedies first with the BOP and did not wait 30 days after filing a request. Nonetheless, he moved for release in district court. Judge Levy, in a detailed written opinion, determined that the 30 day requirement was not a jurisdictional bar to judicial review of the case and determined that it merely bound the government - not the defendant. Moreover, she reasoned that the spirit of the 30 day requirement was met given COVID-19's impact on the BOP and the undeniable fact that the BOP cannot possibly process all of the requests currently before it. This decision is a bold step in opening up access to the Courts by defendants seeking relief from COVID-19. While we wait for the Federal Circuit Courts to definitively speak on the issue, we can expect a mixed bag of decisions in various Federal courts. CLICK BELOW TO READ THE ORDER

The Yates Memo (2015)

In September 2015, former Deputy AG Sally Yates authored a memo emphasizing the need to pursue individual prosecutions for CEOs engaged in corporate crimes while ensuring that corporations provide the DOJ all relevant facts about the individuals involved in corporate misconduct in order to be eligible for sentencing credit in both criminal and civil cases. The Yates Memo has broad applicability in the healthcare fraud context by clarifying the DOJ's position in healthcare fraud and FCA cases. In order to receive maximum corporate credit under Chapter 8 of the United States Sentencing Guidelines, a corporation must fully investigate the corporate misconduct and disclose those involved. Federal prosecutors require full cooperation against individual actors as a condition of leniency against any United States healthcare corporation. Corporations expecting to receive any credit under Chapter 8 of the US Sentencing Guidelines must fully disclose all corporate actors. Since the Yates Memo DOJ policy has slightly changed. In Criminal cases, the DOJ employs an "all or nothing" strategy, requiring full cooperation and disclosure of corporate actors in exchange for corporate leniency. In Civil cases - such as FCA cases - the DOJ no longer employs an all or nothing approach that requires companies to provide the DOJ with evidence of the civil liability of any individual employees in order for it to receive full credit.

URGENT: Expert Database Submissions Needed

One of the greatest threats to the pain community is the use of government paid “experts” who tout overly restrictive prescribing practices while testifying against well intended physicians. These “experts” put physicians in fear of prescribing pain medication under the threat of license discipline or criminal prosecution. Healthcaredefenseblog.com and Attorney Ronald Chapman II are looking for expert reports, CV’s, and testimony for an online Government expert database to aid physicians and other health professionals in cross examining these so called “experts”. This database will be free to access by any physician or defense attorney seeking information about a particular government expert. If you have been harmed by one of these “experts” please submit your material for the sake of your peers. Please submit your materials to resources@healthcaredefenseblog.com.

Provider Education: Avoiding Regulatory Hurdles in your Urine Drug Testing Program

In the current health care regulatory environment, testing of patients is an essential part of health care – especially pain management. Providers need to ensure, before providing powerful medications to their patients, that their patients are free of substances that may conflict or be independently harmful to the patient during their opioid or pain management treatment regime. Providers must ensure that patients are not abusing illicit drugs or other prescribed medication. Providers must also ensure that patients are taking their medication and not diverting. However, urine drug testing "UDT" has placed thousands of providers in the cross-hairs of the federal government. Prosecutors have indicted doctors under drug trafficking laws for failing to take action after seeing sings of diversion (i.e. negative result or positive for illicit opiates). Prosecutors have also indicted physicians, labs, and clinics for administering too many results or testing for too many different substances. So called "custom provider panels" have gotten a lot of physicians in trouble with federal regulators because they are too expensive and sometimes unnecessary. Physicians who prescribe controlled substances must have a comprehensive urine drug testing policy that stratifies risk across your patient population and is appropriately monitored to ensure proper utilization for medical decision making. Are you already in legal jeopardy? Read this before considering a plea of guilty to a healthcare offense. Urine Drug Testing Guidelines The urine drug test has become a required feature of any pain management practice but if not used properly, can be a vehicle for federal investigation or indictment. Providers should keep these simple rules in mind when testing and analyzing the results: Test every patient who receives controlled substances randomly Patients with zero risk may be tested once every six months according to the CDC Testing intervals must be increased with risk Document creatinine and temperature abnormalities Thoroughly review results and document aberrant behaviors Have a conversation with patients about unexpected results Understand common signs of pseudo-addiction (i.e. stockpiling, overuse) Only discharge when diversion is present Consider an addiction referral instead of discharge when signs of addiction are present Test only for substances that the patient is at risk of using Look out for signs of scraping (i.e. putting drugs directly in sample) When UDT results are inconsistent or abnormal you must have an honest conversation with your patient about the reason. Inconsistencies are not always signs of diversion. For instance, if the prescribed drug is not detected this could be an indication that the patient is not taking it but it could also be an indication of hoarding, binge use, or rapid metabolism - which could all be signs to increase the dosage. If an un-prescribed drug is detected, thsi could be a sign of diversion but also cold be a sign of supplemental pain relief. Want to know how you should respond to inconsistent results? Read this helpful article: Recommendations for Urine Drug Monitoring as a Component of Opioid Therapy in the Treatment of Chronic Pain. Peppin et. al. Pain Medicine 2012; 13: 886-896. Reimbursement for Testing: CMS Regulations Regarding Drug Testing When a healthcare provider[1] wishes to test a patient the provider orders a test and uses a diagnostic code, generally an ICD-10 code on a test requisition form to indicate the medical condition of the patient in justification for the test. The provider is also required to list the specific items tested for on a specific requisition form. The testing requested should generally correlate with the appropriate diagnosis code. The lab is responsible for ensuring that the diagnosis code on the requisition form justifies the test, this is because it is the lab that ultimately bills for the test. Each time a lab submits a test it certifies that the test is for a medically indicated and necessary reason.[2] While many labs believe they are not held responsible for a physician’s inappropriate tests, this is not the case, if the diagnosis code does not match the panel of testing ordered, the lab may be liable for submitting a false claim. Urine drug testing (UDT) in patients taking opioid medications “provide valuable and objective information that may assist the clinician in working through the differential diagnoses.”[3] In a pain management setting, random UDTs should be conducted to prevent patients from anticipating the test and “plan[ning] procedures to defeat the reliability of the tests.”[4] However, the frequency of the tests should be based off of the practitioner’s risk assessment of the patient and with the use of a “validated risk-assessment instrument.”[5] Medicare regulations require providers and suppliers to certify that they meet the requirements of the Medicare statute and regulations. 42 C.F.R. § 424.516(a)(1). In addition, an official must sign a CMS-855B which states that the supplier will follow all of the laws, regulations, and program instructions of the Medicare program. This includes regulations regarding the medical necessity of drug testing. In order to bill Medicare, drug testing laboratories must also meet the requirements of the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) as codified in 42 C.F.R. Part 493. Labs are able to become CLIA certified if they can show that they meet CLIA’s requirements. In some instances, physicians can preform “CLIA waived” testing which is comprised of in office testing of sample cups that is not subject to CLIA’s requirements. In order to be reimbursed for diagnostic laboratory tests, the tests must be “reasonable and necessary.”[6] This standard has been applied to urine drug testing through United States ex rel. Hobbs v. MedQuest Assocs., Inc.,.[7] Each test must be reasonable and necessary for the diagnosis or treatment of an individual patient’s illness or injury based on his or her medical condition.[8] A urine drug test (“UDT”) is considered reasonable and necessary when a patient presents with: (1) active treatment for substance abuse or dependence; (2) patients in chronic opioid therapy, if non-compliance or non-adherence to a program is suspected and documented, and/or there is a high risk for medication abuse due to psychiatric issues, aberrant drug-related behavior, or a history of substance abuse; or (3) for patients with chronic pain to determine if there are other substances in the patient’s system prior to starting treatment, detect illicit drugs, ensure adherence to a treatment plan.[9] Furthermore, drug testing is “reasonable and necessary” when an overdose is suspected and the patient: (1) is in an unexplained coma; (2) has an altered mental status; (3) has severe or unexplained cardiovascular instability; (4) has unexplained metabolic or respiratory acidosis; (5) is being testing on neonates suspected of prenatal drug exposure; or (6) has seizures with an undetermined history. Id. A physician may use two methods of measuring the presence of illicit drugs, non-prescribed prescription drugs, and alcohol: immunoassay (qualitative / presumptive testing) and chromatography (quantitative / confirmatory).[10] Qualitative testing only measures the presence or absence of a class of drugs and not the amount of a specific drug in the system. Quantitative testing is able to determine the exact amount of a specific drug or its metabolites in the system. In many cases, quantitative urine drug tests are not necessary since adequate information can be obtained via qualitative testing. Unfortunately, quantitative UDT to determine if a patient is taking their medication is not considered by CMS to be medically necessary because urine drug levels are not a good way to assess therapeutic drug levels.[11] In order to establish that a drug screen is “reasonable and necessary” is it is important to document: (1) the medical and behavioral health history; (2) presence or absence of aberrant behaviors related to chronic pain management; (3) document the current treatment plan; (4) medications prescribed; (5) asses the risk potential for drug misuse, diversion, and addiction; and (6) use a validate risk assessment tool.[12][13] CMS regulations encourage laboratories to request documentation from physicians regarding medical necessity. (iii) Medical necessity: The entity submitting the claim may request additional diagnostic and other medical information from the ordering physician or no physician practitioner to document that the services it bills are reasonable and necessary.[14] UDTs are not considered medically necessary in several situations, including: (1) when the criteria have not been met; (2) there is repeated preliminary or confirmatory testing prior to receiving an initial preliminary test’s results; (3) routing confirmatory testing when there are negative results, unless those resulted are documented as being inconsistent; (4) to ensure the patient is taking the correct dosage of prescribed medication; or (5) routine analysis for specimen integrity. Id. at 5-6. Furthermore, testing for the same drug using both a blood test and a urine test is considered not medically necessary.[15] In addition to the Guidance above, the Department of Health and Human Services, Office of Inspector General has published compliance guidance in the Federal Register entitled “Compliance Program Guidance for Clinical Laboratories”.[16] This guidance requires that order forms for laboratory testing should include the justification for each test ordered. The guidance also stressed that Medicare does not pay for tests for general screening purposes. Interestingly, the guidance also stated that standing orders are not prohibited in connection with an extended course of treatment, but did caution that they are discouraged and have led to abusive practices. Further the guidance said that “standing orders in and of themselves are not usually acceptable documentation that tests are reasonable and necessary”.[17] With respect to frequency, low risk patients must be tested randomly every three months depending on state licensing board treatment requirements and should be tested for commonly abused illicit drugs. Moderate risk patients must be tested randomly ever two months and must be tested for illicit drugs and other prescribed drugs. High risk patients must be tested randomly every month, testing ideally will not be at each scheduled office visit[18]. Thus, physicians must accurately document the need for urine drug testing, must ensure that it is specifically tailored to the patient’s need and physicians should generally avoid standing orders for drug testing panels. False Claims Act and “Stark” Liability Pursuant to the False Claims act, 31 U.S.C. §§ 3729-33 provides that a person who knowingly presents or causes to be presented a false or fraudulent claim for payment or approval; or knowingly makes, uses or causes to be made or used, a false record or statement material to a false or fraudulent claim is liable to the United States Government for a civil monetary penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461), plus three times the amount of damages to the government. For the purposes of the False claims act, the terms “knowing” and “knowingly” mean that a person who has actual knowledge that a claim is false or acts with deliberate ignorance of the truth or falsity of a information or acts in reckless disregard for the truth of information acts with the requisite intent.[19] The Government is not required to prove specific intent to defraud in order to sustain liability under the False Claims Act. According to the Stark Law, an entity may not submit claims to Medicare for clinical laboratory services if the services were referred to an entity by a physician with whom the entity had a financial relationship and there was no enumerated exception[20]. The term “financial relationship” includes a “compensation arrangement” between a physician and a laboratory where the physician is paid some form of compensation “directly or indirectly, overtly or covertly, in cash or in king” by the laboratory.[21] In addition to the Stark Law, the Anti-kickback statute prohibits the payment of remuneration for the referral of samples to a laboratory.[22] Compliance with the false claims act, CMS regulations, and the Stark Law is a condition of payment and Medicare will not pay for services if either is violated.[23] In 2015, Millennium Health, a national drug testing laboratory agreed to pay $256 million to resolve allegations of unnecessary drug and genetic testing.[24] According to the complaint, Millennium laboratories billed Medicare Part B for medically unnecessary laboratory test services furnished by physicians and other providers and suppliers.[25] In many cases, Millennium is alleged to have billed for panels of drug tests that tested for drug which were not reasonable and necessary. This was done with the use of practice wide standing order forms that did not require an individualized assessment of which tests were necessary for a given patient.[26] This practice resulted in testing that was not reasonable and necessary for the individual patient. To make matters worse, Millennium encouraged that physicians engage in such testing and paid them remuneration in the form of supplies in the form of laboratory cups which was tied to physician referrals. These “custom profile” or “test protocol” forms were kept on file at Millennium and remained in effect until they were changed. When a patient’s sample was sent to Millennium by a particular provider, that provider’s panel was automatically run on each patient. Unfortunately for Millennium the existence of a standing order is not sufficient documentation to validate the necessity of a large range of expensive drug testing for a particular payment. Moreover, the testing supplies provided to physicians in exchange for referrals was considered remuneration. As a result, Millennium paid out a significant settlement to the Government in order to avoid exclusion. Laboratories must be vigilant in protecting themselves from false claims act allegations by ensuring the medical necessity of each sample tested, this can be done by ensuring that the diagnosis code for each test matches the requisition form and only using custom panels for specific providers who demonstrate that a standing order is medically necessary for the patient population. [1] The specific provider that is treating the patient must be the one to order the test. 42 C.F.R. § 410.32(a)

[2] United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004).

[3] Greg T. Owen, M.D., et. al., Urine Drug Testing: Current Recommendations and Best Practices, Pain Physician Journal, at ES121 (2012).

[4] Id. at ES122.

[5] Id. at ES123.

[6] 42 C.F.R. § 410.32(d)(3)(iii).

[7] 711 F.3d 707, 715 (6th Cir. 2013) (applying the “reasonable and necessary” standard to diagnostic tests).

[8] 42 U.S.C. § 1395y(a)(1)(A)

[9] LCD: Drug Testing, Oct. 1, 2015, at 4.

[10] WPS Medical Affairs Policy, PUM 250-0013, at 2 (Jul. 1, 2017).

[11] Id. at 6.

[12] Id.

[13] 42 C.F.R. § 410.32(d)(3).

[14] 42 C.F.R. § 410.32(d)(3)

[15] LCD: Drug Testing, at 5.

[16] 63 Fed. Reg. 45076 (Aug. 24, 1998)

[17] Id. at 45079, 45081.

[18] WPS Medical Affairs Policy, PUM 250-0013, at 5 (Jul. 1, 2017).

[19] 31 U.S.C. § 3729(b)(1)

[20] 42 C.F.R. §§ 411.351 et sequ.

[21] 42 U.S.C. §§ 1395nn(h)(1)(A) and (h)(1)(B)

[22] 42 U.S.C. § 1320a-7b.

[23] 42 U.S.C. § 1320a-7(b)(7)

[24] Department of Justice Press Release. October 19, 2015.

[25] United States ex rel. Mark McGuire et al., v. Millennium Laboratories, Inc., and Millenium Health, LLC, No 12cv10132-NMG (2015)

[26] Id. at 23.

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