DEA, Controlled Substances, HIPAA and Collateral Civil Health Care or Criminal Proceedings

Health care regulation many times involves more than the licensing agency issuing a license or permit to a health care professional. Often, federal or state statutes or regulations mandate certain requirements as to controlled substances, billing, medical records, privacy protections, standard of care issues and a plethora of “collateral matters” that touch upon a license holder’s legal and professional obligations. Collateral consequences occur when an action has been taken or is under review or investigation against a licensee outside his or her originating licensing agency. Many licensees or their legal counsel, or even the licensing agency, may fail to recognize or appreciate the potential serious “collateral consequences” or the very real after-effects of such outside agency action, whether the action is imposed by adjudication (trial) by the agency or whether voluntarily agreed to by the licensee.


Health care professionals with controlled substances authority have various ordering, inventory, dispensing and/or prescribing obligations under federal law. As opioid abuse has been at the forefront of Drug Enforcement Administration (“DEA”) and licensing agency priorities, every health care professional is well advised to be fully informed of the various controlled substances legal requirements as well as the “standard of care” with the prescribing of such medications. With this heightened scrutiny as to controlled substances and the potential for abuse or diversion of such medications, violations of federal statutes or regulations can lead to administrative fines literally in the tens or hundreds of thousands of dollars, loss of DEA registration, civil action by the Office of Inspector General (seeking fines or revocation of a permit) or even criminal prosecution.


Invariably, review or action by the DEA also triggers a state licensing agency review. Thus, a professional who is subject to fines due to a violation of federal statutes or regulations may still face further fines or action by a licensing agency (the commonly used term “double jeopardy” does not apply in these situations). Thus, it is highly advisable that when dealing with DEA or any other entity review, that legal representation be obtained with an objective to vigorously defend the matter if possible, or mitigate further adverse effects by other agencies by a reasonable settlement.


As to more serious violations, especially in matters where diversion, patient overdose or other patient harm has occurred, criminal prosecutions have increased and threaten not only a person’s livelihood but his or her freedom as well. In some scenarios, a legitimate medical practice may unfortunately be labeled or presumed to be a “pill mill” with surprise inspections by the DEA/Medical Board or other law enforcement, confiscation of records, a random and comprehensive in-office audit, requests for an immediate surrender of registration, and even threats of further civil fines or criminal prosecution. It is usually advisable to consider having both administrative/civil counsel and criminal counsel assessing the allegations, the strengths and weaknesses of the matter, and possible resolutions or rigorous defense.

Similar to federal DEA oversight on certain practice, health care professionals also now have comprehensive federal patient privacy requirements under the Health Insurance Portability and Accountability Act of 1996, otherwise commonly known as “HIPAA”. Though HIPAA requirements are many times delegated to other practice personnel, health care professionals remain liable for violations of the Act and regulations. Breaches of patient privacy have specific reporting requirements and may subject a professional to significant administrative fines and or civil action by the Office of Civil Rights (“OCR”), Department of Health and Human Services (DHHS). It is also routine for the OCR to mandate submission of a practice’s HIPAA policies and procedures, continuing education, and breach investigation and reporting activities. The OCR will usually attempt to resolve the case with the covered professional or entity by obtaining:

  • Voluntary compliance
  • Corrective action and/or
  • Resolution agreement

Failure to comply with HIPAA can also result in civil and criminal penalties. If a complaint describes an action that could be a violation of the criminal provision of HIPAA, the OCR may refer the complaint to the Department of Justice (DOJ) for investigation.

Finally, many health care professionals may find themselves the subject of an arrest and may be faced with possible adverse licensure effects from such proceedings. Most matters are reportable to licensing agencies in any initial application for a license or upon a license renewal. Some agencies also require reporting within a certain time frame from the arrest or after its disposition. Common arrest matters involve driving while intoxicated (DWI) or driving under the influence (DUI), assaults or domestic violence matters, and of course matters more directly related to medical practice such as billing fraud or billing conspiracy (Medicare, Medicaid, OIG etc.), criminal controlled substances issues, or alleged improper contact or relationships with patients. Many licensees may mistakenly assume or be advised that a criminal plea to an offense will not affect their license, however most agencies can and will still use a plea agreement against a licensee. Sharp & Cobos has handled various such matters in conjunction with associated criminal counsel, providing comprehensive and strategic criminal and administrative defense planning, preparation, and if needed, litigation of the issues in the respective forums.