December 5, 2021

Volume XI, Number 339


December 03, 2021

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Ten DEA Compliance Issues for 2021

Compliance with the laws and regulations enforced by the U.S. Drug Enforcement Administration (DEA) is (or should be) among the top compliance priorities for doctor’s offices, pharmacies, hospitals, and other providers that administer and dispense controlled substance medications. Non-compliance can lead to severe consequences, up to and including loss of DEA registration and the potential for criminal prosecution. But, what does it mean for health care providers to be DEA compliant in 2021?

In many respects, the obligations health care providers face today are the same as they were in 2019. While 2020 brought about unprecedented change, the oversight of health care providers’ prescription drug practices stayed largely the same. However, the DEA has issued specific guidance related to the FDA-approved COVID-19 vaccines and certain other matters related to the ongoing pandemic, and providers must heed this advice while also continuing to monitor and enforce their existing DEA compliance policies. 

10 Key Areas of DEA Compliance for Health Care Providers in 2021

So, what does it take to establish (and maintain) DEA compliance in 2021? Here are 10 key areas of concern for providers in all segments of the healthcare industry: 

1. Alternate Delivery Sites and Other Compliance Matters Related to COVID-19 

The DEA has established several policies regarding alternate delivery sites, “pop-up” hospitals, and other matters related to the enormous health care challenges presented by the COVID-19 pandemic. Many of these policies have been in place since March or April of 2020; and, as a result, at this point, the DEA is expecting health care providers to be fully compliant. 

Some examples of the types of issues covered under these policies include: 

  • Alternate Delivery Sites – In order to dispense prescription medications from alternate delivery sites, health care providers must first request an emergency DEA number for each location. For each proposed alternate location, the request must include, “physical address; security measures; and, the name and complete contact information of the person who will be responsible for the controlled substances at this location.” Providers may not begin operating alternate delivery sites until they receive DEA approval. 

  • Dispensing Across State Lines – The DEA has temporarily allowed registered health care providers to dispense prescription medications across state lines even if they are only registered in a single state. In order to do so, providers must be licensed to practice in each state (under applicable state law), and they must comply with the laws of both states. 

  • Exception to the 5% Rule – The DEA has temporarily allowed registered health care providers to distribute in excess of five percent of their total dosage units to other registered providers. In order to do so, providers must, “continue to abide by all security, recordkeeping, and other applicable requirements of the DEA regulations.” Providers must also be cognizant of when this exception expires. 

2. Prescribing Controlled Substances Via Telemedicine 

Pursuant to the U.S. Secretary of Health and Human Services’ public health emergency declaration, the DEA has authorized practitioners to prescribe schedule II-V controlled substances via telemedicine without an in-person medical evaluation. In order to for a telemedicine prescription to be considered lawful without a prior in-person medical examination, the practitioner must ensure that: 

  • The prescription is being issued for a legitimate medical purpose within the usual course of the practitioner’s professional practice; 

  • The telemedicine consultation Is conducted, “using an audio-visual, real-time, two-way interactive communication system”; and, 

  • The prescription is being issued in full compliance with all other pertinent state and federal laws. 

With regard to the manner of issuing a prescription, the DEA states that practitioners, “may issue the prescription using any of the methods of prescribing currently available and in the manner set forth in the DEA regulations.” 

3. Importing Medications from China and Other Countries 

An issue that has received increased attention unrelated to the COVID-19 pandemic is the importation of prescription medications from China and other countries. While the DEA is concerned with the importation of illegitimate and unauthorized medications from all countries, it has placed particular emphasis on medications imported from China. This is due to a confirmed high rate of illegitimate and unauthorized medications being exported from China in recent years. 

Whether a provider intentionally orders an unauthorized medication or a provider unknowingly receives a counterfeit medication from a foreign supplier, the consequences for the public can be the same. As a result, the DEA takes both scenarios equally seriously. With this in mind – and with dangerous imports likely to remain a core DEA focus in 2021 – providers must ensure that their policies and procedures are adequate to confirm the legitimacy of all imported prescription medications. 

4. Prescription Drug Inventory Management 

DEA registrants are subject to extensive inventory requirements. As appropriate inventory management is often a central focus of DEA audits and inspections, providers must ensure not only (i) that they have adequate inventory controls in place, but also (ii) that they thoroughly document their inventory management practices so that they can affirmatively demonstrate compliance when necessary. 

While this is important across the board, it will be particularly important for providers that utilize the DEA’s five-percent-rule exception to supply medications to other providers. In order to avoid unwanted scrutiny, providers will need to have comprehensive documentation of when and to whom all medications that pass through their inventories have been dispensed.  

5. Prescription Drug Diversion Prevention 

Combating prescription drug diversion will continue to be a top DEA priority in 2021. The DEA’s Diversion Control Division remains extremely active, and the DEA and the U.S. Department of Justice (DOJ) work jointly to identify and prosecute cases of suspected diversion by doctor’s offices, pharmacies, and other providers. 

In order to prevent diversion (and demonstrate compliance to the DEA), registered providers must implement comprehensive and custom-tailored anti-diversion policies and procedures. These policies and procedures must address all stages of the prescription lifecycle, and they must be effective in preventing diversion by both patients and staff. 

6. Recordkeeping, Storage, and Disposal Practices 

All DEA registrants must adopt comprehensive recordkeeping practices and adhere to them on an ongoing basis. In the event of a DEA audit or inspection, the inability to demonstrate compliance can have the same outcome as noncompliance. 

DEA registrations must maintain compliant storage and disposal practices as well. Here, too, documentation is not only a critical component of compliance but an essential tool for achieving positive outcomes during DEA audits and inspections as well. 

7. DSCSA Compliance 

The Drug Supply Chain Security Act (DSCSA) is a federal law that establishes compliance obligations with respect to the manufacturing, ordering, receipt, storage, distribution, and disposal of prescription medications. Enacted in 2013, the DSCSA is a key weapon in the DEA’s fight against counterfeit medications entering the U.S. market, and yet it still remains relatively unknown amongst physicians, pharmacists, and other providers. 

With the DEA placing a particular emphasis on both preventing counterfeit imports and preventing the unlawful diversion of prescription drugs, providers will need to carefully address their compliance obligations under the DSCSA in 2021. In particular, pharmacies face stringent obligations, including the obligation to implement control measures such as: 

  • Ensuring all manufacturers and repackagers are registered with the U.S. Food and Drug Administration (FDA); 

  • Ensuring all wholesale distributors and logistics providers have FDA licenses; 

  • Confirming that other pharmacies are licensed with their state boards prior to distributing prescription drugs; 

  • Ensuring that all prescription drugs received are accompanied by appropriate product tracing documentation; and, 

  • Storing all product tracing documentation as required by law.

8. DEA Registration Compliance 

DEA registration carries compliance obligations of its own. Even if a registered provider theoretically did not engage in any of the activities that trigger the compliance concerns listed above, it would still need to manage an effective DEA compliance program in order to maintain its registration and avoid the risk of administrative penalties. 

The DEA registration and renewal processes both present challenges and potential stumbling blocks for health care providers. Among other concerns, providers must ensure that the contents of their registration and renewal applications are true and correct; they must maintain renewal programs that are designed to ensure continual registration; and, if a provider’s registration lapses, the provider must be prepared to cease all prescription-related activities as required by federal law. 

9. Managing Red Flags for Opioid Diversion 

While prescription drug diversion is a concern in general, the DEA and DOJ are continuing to devote substantial resources to combatting opioid diversion in particular in 2021. Among other steps, in order to avoid prosecution for opioid diversion, doctor’s offices, pharmacies, and other providers must adopt policies and procedures that address the following concerns—all of which the DEA considers to be “red flags” for possible opioid diversion: 

  • Inadequate policies and procedures regarding opioid dispensing 

  • Inadequate policies and procedures related specifically to diversion prevention 

  • Inadequate documentation of opioid prescription validation 

  • Inadequate communication with prescribing physicians 

  • High inventory error rates, high rates of prescribing high-risk medications, and a high volume of cash payments 

10. DEA Audit Preparedness 

When it comes to DEA compliance, being able to demonstrate compliance is, in many respects, just as important as compliance itself. With this in mind, DEA registrants must constantly be thinking in terms of what is necessary to prove compliance to the DEA’s auditors and inspectors. By placing due emphasis on both compliance and documentation of compliance, registered providers can protect their patients and themselves, and they can minimize the risk of minor oversights leading to substantial liability exposure. 

Oberheiden P.C. © 2021 National Law Review, Volume XI, Number 119

About this Author

Dr. Nick Oberheiden Federal Defense Lawyer Oberheiden PC

Dr. Nick Oberheiden focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation. He has defended clients in PPP Loan Fraud cases and COVID-19 investigations. Nick also directs internal corporate investigations and he leads defense teams in whistleblower actions, corporate defense cases, as well as cases involving national security and elected officials.

Clients from more than 45 U.S. states have hired Nick to seek effective protection against government...