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August 01, 2017

Government Steps Up Fight Against Opioid Epidemic Through Fraud and Abuse Enforcement

Scott R. Grubman, Chilivis Cochran Larkins & Bever LLP, Atlanta GA

>On August 2, 2017, Attorney General Jeff Sessions announced the formation of the Department of Justice’s (DOJ) Opioid Fraud and Abuse Detection Unit.1 According to the DOJ’s press release, the pilot program will “utilize data to help combat the devastating opioid crisis that is ravaging communities across America.”2 The announcement represents a continuation of the federal government’s focus on fraud and abuse related to the opioid epidemic. This article will explore the history of those efforts and discuss the DOJ’s new pilot program.

Brief Overview of the Opioid Epidemic

According to the Department of Health and Human Services (HHS), opioid abuse is a “serious public health issue,” with drug overdose deaths representing the leading cause of injury death in the United States.3 The National Institute on Drug Abuse — part of the National Institutes of Health (NIH) — notes that young adults age 18 to 25 are the biggest abusers of prescription opioid pain relievers, attention deficit hyperactivity disorder (ADHD) stimulants, and anti-anxiety drugs.4 NIH reports that in 2014 alone, more than 1,700 young adults died from prescription drug overdoses, and most of those overdoses involved opioids.5

The Centers for Disease Control and Prevention (CDC) reports that over 90 Americans die every day from an opioid overdose.6 According to the CDC, more than 60 percent of drug overdose deaths involve an opioid and, since 1999, the number of overdose deaths involving opioids quadrupled.7

The Feds Fight Back

The federal response to the opioid epidemic has continued to intensify over the last several years. Perhaps not surprisingly, the Food and Drug Administration (FDA) was on the forefront of the fight against opioid addiction. In 2013, for example, the FDA issued draft industry guidance entitled “Abuse-Deterrent Opioids – Evaluating and Labeling.”8 That guidance was “intended to assist sponsors who wish to develop opioid drug products with potentially abuse-deterrent properties.”9 That industry guidance was finalized in April 2015.10 Similarly, in March 2016, the FDA released draft guidance entitled “General Principles for Evaluating the Abuse Deterrence of Generic Solid Oral Opioid Drug Products,”11 and in May 2017 issued draft guidance entitled “FDA Education Blueprint for Health Care Providers Involved in the Management or Support of Patients with Pain.”12

The FDA has also developed a comprehensive action plan to fight the opioid epidemic. The FDA’s Opioids Action Plan includes: (1) expanding the use of expert advisory committees before approving any new drug application for an opioid that does not have abuse-deterrent properties; (2) developing warnings and safety information for immediate-release (IR) opioid labeling; (3) strengthening requirements that drug companies generate post-market data on the long-term impact of using opioids; (4) updating the Risk Evaluation and Mitigation Strategy (REMS) Program, which requires sponsors to fund continuing medical education related to opioid issues; (5) expanding access to abuse-deterrent formulations to discourage abuse; (6) supporting better treatment by healthcare providers; and (7) reassessing the risk-benefit approval framework for opioid use.13

Like the FDA, the federal Office of the National Coordinator for Health Information Technology (ONC) has taken steps to combat opioid abuse. According to ONC guidance, one of the leading tools to combat opioid abuse is electronic prescribing.14 ONC states that:

Electronic prescribing of controlled substances (EPCS), legal in all 50 states, helps reduce fraud and abuse of controlled substances like prescription opioids. Moving from paper-based prescribing to EPCS enables providers to make use of enhanced security features that technology affords. Prescribers can be authenticated before prescribing a controlled substance and prescriptions may be transmitted to pharmacies securely without the risk of alteration or diversion.15

As of September 30, 2016 (which is the latest data available), over 88 percent of retail pharmacies and over 20 percent of e-prescribing providers were enabled for EPCS.16

Another important IT tool in the government’s fight against the opioid epidemic are prescription drug monitoring programs (PDMPs), which are state-run databases that provide information to healthcare providers related to a patient’s history of controlled substance prescription use. According to ONC, PDMPs “are one of the most promising tools available to address prescription drug misuse, abuse, and diversion.”17 ONC promotes the use of PDMPs to “avoid inappropriate prescribing, identify drug-seeking behavior, and allow[] providers to intervene when there are signs of prescription drug misuse.”18

HHS’ Office of Inspector General (OIG) has also taken an increasingly aggressive approach to fighting the opioid crisis. In addition to its partnership with the DOJ (discussed in more detail below), the OIG has used its own law enforcement and administrative powers to detect and punish opioid fraud and abuse. For example, in July 2017, the OIG published a report entitled “Opioids in Medicare Part D: Concerns about Extreme Use and Questionable Prescribing.”19 The “key takeaways” from the OIG’s report include:

  • One in three Medicare Part D beneficiaries received a prescription opioid in 2016;
  • About 50,000 beneficiaries received high amounts of opioids;
  • Almost 90,000 beneficiaries are at serious risk; some received extreme amounts of opioids, while others appeared to be doctor shopping;
  • About 400 prescribers had questionable opioid prescribing patterns for beneficiaries at serious risk.20

In its report, the OIG noted that prescribers “play a key role in combatting opioid misuse” and that such prescribers “must be given the information and tools needed to appropriately prescribe opioids when medically necessary.”21

The DOJ Jumps In

Even before the DOJ’s announcement regarding the Opioid Fraud and Abuse Detection Unit, the agency made clear that the fight against opioid fraud and abuse is a top priority under the new administration. In July 2017, for example, the DOJ announced the largest healthcare fraud takedown in history, charging more than 400 defendants in 41 federal districts with participating in fraud schemes related to federal healthcare programs.22 According to the DOJ’s press release about the July 2017 takedown, nearly one-third of the defendants charged were charged in schemes related to prescribing and dispensing opioids and other narcotic drugs:

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE . . . for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.23

The fact that the DOJ immediately followed up on this takedown by announcing the creation of the Opioid Fraud and Abuse Detection Unit demonstrates the agency’s long-term focus on such cases. In announcing the new unit, Attorney General Sessions stated that it will “focus specifically on opioid-related health care fraud using data to identify and prosecute individuals that are contributing to this prescription opioid epidemic.”24

As part of the initiative, the DOJ will fund 12 experienced Assistant United States Attorneys from various offices around the country for a three-year term to focus exclusively on investigating and prosecuting fraud related to prescription opioids, including pill mills and pharmacies that unlawfully divert or dispense prescription opioids for unlawful purposes. The 12 districts that will participate in the pilot program are: the Middle District of Florida, Eastern District of Michigan, Northern District of Alabama, Eastern District of Tennessee, District of Nevada, Eastern District of Kentucky, District of Maryland, Western District of Pennsylvania, Southern District of Ohio, Eastern District of California, Middle District of North Carolina, and Southern District of West Virginia.

According to the DOJ’s press release, data analysis will allow federal authorities to ascertain important information related to prescription opioids, including which physicians are outliers in the number of opioid prescriptions, how many of a prescriber’s patients die due to an opioid overdose, and which pharmacies are dispensing disproportionately large amounts of opioids.25 The DOJ will work with several federal agencies — including the Federal Bureau of Investigation (FBI), Drug Enforcement Administration (DEA), and HHS — as well as state and local law enforcement on the project.26

Likely Areas of Focus

There are several areas on which the government will likely focus in its opioid-related investigations. The first will likely be ensuring that providers prescribe opioids and other narcotics only when such drugs are truly medically necessary. One of the basic principles of Medicare reimbursement is that all items and services for which a provider seeks reimbursement must be “reasonable and necessary.”27 Providers who stand out as “outliers” when it comes to the volume of opioid prescriptions will likely receive subpoenas for relevant medical records from the DOJ and, if those records do not support the medical necessity of those prescriptions, will likely face administrative, civil, or even perhaps criminal liability.

Another focus will likely be on the relationships between prescribing physicians, on the one hand, and pharmaceutical companies and pharmacies, on the other. Because any financial relationship between a prescribing provider and a pharmaceutical company or pharmacy could potentially implicate both the Anti-Kickback Statute and the Stark Law, federal investigators will almost certainly probe any such relationships, particularly where a provider has questionable prescribing patterns or high utilization numbers. Other likely areas of focus will be on pharmacies that dispense a high number of opioids from providers with questionable prescribing habits, as well as enforcement of drug diversion regulations by the DEA.


The new administration has made clear that healthcare fraud and abuse enforcement will remain a top priority, and fraud and abuse enforcement related to the prescribing and dispensing of opioid drugs is now clearly front and center. Although the DOJ’s Opioid Fraud and Abuse Detection Unit is being called a “pilot program” and is currently limited to 12 districts, like many initiatives within the area of healthcare fraud and abuse28 this unit will likely grow into other jurisdictions in the not-so-distant future. As other types of healthcare providers, such as hospice providers, home health agencies, and hospitals have felt for years, pain management providers and pharmacies will now join them in the hot seat and will likely feel the heat of government enforcement for many years to come.


1 See

2 Id.



5 Id. 2014 data is the latest data available.


7 Id.


9 Id.






15 Id.

16 Id.


18 Id.



20 Id.

21 Id.




25 Id.

26 Id.

27 Social Security Act, § 1862, 42 U.S.C. § 1395y(a)(1)(A).

28 For example, the DOJ-HHS Medicare Fraud Strike Force started in 2007 in four cities, and quickly expanded to a number of other cities within just a couple of years. See

Scott R. Grubman

Chilivis Cochran Larkins & Bever LLP, Atlanta GA

Scott Grubman is a Partner with the law firm of Chilivis Cochran Larkins & Bever LLP in Atlanta, Georgia, where he focuses his practice on representing healthcare providers of all types and sizes in connection with government investigations, both civil and criminal, as well as False Claims Act litigation. Prior to joining private practice, Mr. Grubman served as a DOJ Trial Attorney and then as an Assistant United States Attorney, where he served on his District’s healthcare fraud task force. He serves as an Adjunct Professor of Law at both Georgia State and Emory University’s law schools, where he teaches courses on healthcare fraud and abuse. He may be reached at [email protected] or (404) 262-6505.