Close-up of a doctor's prescription pad and stethoscope

A Pharmacist's Guide to Prescription Drug Investigations: Learn How to Respond to Reduce Your Risk of Fraud Charges

Health care fraud can encompass a wide range of unlawful acts committed by physicians and health care providers who wrongfully acquire money from government programs or from private companies. This can include everything from billing and coding errors, kickbacks and bribes, and billing for medically unnecessary services to prescription drug fraud.

Prescription drug fraud has always been a focus for government regulators, but it has taken on new significance in today’s increasingly aggressive regulatory landscape. The Department of Justice, along with numerous other state and federal agencies, have ramped up their efforts to audit, investigate, and prosecute physicians, pharmacists, and others who administer prescription drugs. This is especially true amid America’s growing opioid epidemic, which has recently been deemed a national health crisis.

The added urgency now fuels aggressive enforcement efforts using data to identify suspicious patterns that may indicate prescription drug fraud, and, as the DOJ states, hold providers accountable for “contributing to the opioid epidemic.”

What Is Prescription Drug Fraud?

As with health care fraud, prescription drug fraud generally refers to a range of unlawful acts for which practitioners and providers can be held civilly and criminally accountable under various state and federal laws. Investigations, regardless of how they begin or are initiated, can target all types of providers involved in prescribing and supplying prescription medications – including physicians, nurse practitioners, psychiatrists, pharmacists, compounding pharmacies, orthopedic surgeons, pain management specialists, chiropractors, and others.

These agencies commonly target the following practices involving fraud and prescription medications:

  • Dispensing more medication than prescribed
  • Prescription drug refill and shorting schemes
  • False or fraudulent prescriptions
  • Illegal importation of prescription drugs
  • Improperly reporting evaluations / tests in order to prescribe medically unnecessary prescription drugs
  • Prescribing drugs without performing in-person evaluations, including failures to meet standards of telemedicine in absence of a real physician-patient relationship
  • Prescription medication diversion
  • Sales of false or fraudulent prescriptions
  • Increasing prescriptions for certain drugs, including compounded drugs, when there are commercial available drugs that serve the same purpose
  • Unauthorized or automatic prescription refills
  • Arrangements or kickbacks involving a high percentage of prescriptions from physicians

Prescription drug fraud may involve acts, arrangements, or other fraudulent and unlawful schemes, including those that violate the Anti-Kickback Statute, False Claims Act, the Stark Law, or state-law equivalents. This can include improper business relationships designed to induce referrals or remuneration, kickback arrangements, and more.

How Are Prescription Fraud Cases Investigated in Texas?

Given the heightened scrutiny over waste, fraud, and abuse, investigating prescription drug fraud can involve a number of enforcement tools and agencies that work to detect common schemes, suspicious billing patterns, and even mistakes that warrant further inquiry. A health care fraud investigation may therefore begin in a number of ways:

  • Audits that detect billing errors, overpayment, and suspicious patterns performed by Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), and Zone Program Integrity Contractors (ZPICs).
  • Reports filed with authorities or other government agencies by insiders or whistleblowers.
  • Complaints or reports filed by patients, including complaints filed with a state medical licensing agency (i.e. the Texas Medical Board).
  • Audits or investigations conducted by the Texas Department of Insurance (TDI).
  • Collaboration between any number of agencies and federal payors, including Medicare & Medicaid, TRICARE, the Texas Attorney General’s Office, the Medicaid Fraud Control Unit (MFCU), Department of Justice (DOJ), Drug Enforcement Agency (DEA), and others.
  • Office of Inspector General (OIG) investigations and subpoenas
  • Civil Investigative Demands

Any audit, investigation, or formal step taken by an auditor, or state or federal agency can create exposure to not only costly and time-consuming investigations and proceedings, but also the threat of substantial civil penalties, disciplinary actions, provider exclusion, and even criminal prosecution that threatens the personal and professional futures of providers and practitioners. Even if you believe you are not the subject of an investigation, or believe you can smooth things over after making accidental errors or unknowing mistakes, the aggressiveness with which prescription drug fraud and any health care fraud matter is pursued demands the following:

  • Immediate counsel and response – Be it an audit or an investigation, seeking immediate counsel is critical for any provider. By enlisting the help of attorneys with experience handling audits and investigations as soon as possible, providers can take appropriate steps to address pertinent issues, including resolving or disputing overpayment and recoupment efforts, opening lines of communication with regulators to define scope and establish credibility, managing costs and effort while meeting demands for documentation and other requests made by authorities, preserving evidence and ensuring compliance, preparing for interviews, taking actional steps, and negotiating resolutions or settlements, or crafting tailored defense strategies. The goal behind immediately obtaining counsel and waging a response is to reduce risks and exposure to penalties, explore options for ending any enforcement efforts as soon as possible, and especially ending them prior to administrative or civil cases becoming criminal.
  • Pre-emptive counsel and regulatory compliance from the start – Aside from dealing with any audits, investigations, and formal enforcement actions as soon as they arise, providers involved in any facet of prescribing or supplying medications should pre-emptively seek legal counsel to ensure their processes, procedures, arrangements, business structure, and billing practices comply with all applicable regulations. Regulatory compliance is not an easy task given the numerous laws and prohibitions placed on the health care industry, but it is a vital step to ensuring you do not violate the law, face undue scrutiny, or become subject to an investigation that poses the threat of devastating penalties and consequences. Our legal team has extensive experience counseling health care clients throughout the country on a proactive basis and providing the comprehensive support needed to ensure sound and compliant practices.

Are You the Subject of a Prescription Fraud Investigation? Seek Strategic Representation Today.

Hendershot Cowart P.C. has cultivated a reputation as one of the nation’s leading medical and health law firms, and has successfully represented a diverse clientele of practitioners and providers throughout Texas and the U.S. in a range of health care fraud matters, including those involving prescription drug fraud. Our depth of experience allows us to strategically counsel and represent clients at all phases of audits or investigations, even before allegations arise.

If you wish to discuss any pressing matter and learn how we can help you take action immediately, or would like to learn more about ensuring regulatory compliance on a proactive basis, do not hesitate to call our legal team – we’re standing by to help. Call (713) 909-7323 or contact us online to get started.