By: Matt Fischer
The Drug Enforcement Administration (DEA) is responsible for the monitoring of all manufacturing and distribution of controlled substances in the country. Pharmacies, medical providers (i.e., who either administer, prescribe or dispense), and distributors and manufacturers of controlled substances are required to register with the DEA. The DEA’s Diversion Control Division is tasked with reviewing applications of potential registrants and monitoring existing registrants through audits and investigations. However, the question on many registrants’ minds is what happens if violations or deficiencies are discovered? The answer is it depends. The consequences will vary based on the level of noncompliance. Thus, it is essential to be familiar with the laws that apply and most importantly, have a full understanding of the administrative process in order to act quickly to minimize potential adverse action if noncompliance is found.
On one side of the spectrum, if an audit discloses a simple record violation (e.g., the record is not being maintained properly), then the likely avenue will be a Letter of Admonishment. This letter acts as a warning. This type of sanction is kept on file with the agency for further consideration during future audits. In contrast, if flagrant misconduct is found, greater administrative action will be taken or a criminal investigation may be opened. In this case, the DEA will issue an Order to Show Cause on the registrant. If received, an administrative hearing will be held before an Administrative Law Judge (ALJ), and the registrant will have to present a case on why the DEA registration should not be suspended or revoked. Following a hearing, the ALJ will issue a recommended order that will ultimately be forwarded to the DEA who may adopt, modify in part, or reject the findings.
In the alternative, middle ground can be reached via a Memorandum of Agreement (MOA). A MOA does not act as a written warning or sanction. This document is essentially a corrective action plan that sets forth actions to be taken by the registrant that will address the concerns of the DEA. When negotiating a MOA, it is important to narrow the scope in order to prevent wide ranging effects unrelated to the underlying problem.
The cost of administrative proceedings and potential license revocation are serious concerns for a healthcare business. Nevertheless, there are several steps a business or provider can take to protect itself. First, a business or provider should become very familiar with the regulations that apply to its business or profession. Secondly, a business or provider should have a plan in place ready for implementation if deficiencies are found. Finally, an experienced attorney can play a vital role in addressing the concerns of the DEA as they might arise during a DEA Audit. Given that much of the DEA audit process is at the discretion of the DEA investigators, it is important to involve counsel at the early stages to avoid costly administrative action.