July 06, 2020 Articles

Pill Mills: Administrative Law to the Rescue

Administrative law is a particularly effective remedy for addressing the opioid crisis.

By Karen McKenzie
Nearly every jurisdiction in the United States has been affected by the opioid crisis.

Nearly every jurisdiction in the United States has been affected by the opioid crisis.

Nearly every jurisdiction in the United States has been affected by the opioid crisis—more specifically, “pill mills.” Pill mill is a term that has been used “primarily by local and state investigators to describe a doctor, clinic or pharmacy that is prescribing or dispensing powerful narcotics inappropriately or for non-medical reasons.” These “thriving ‘pill mills’ helped seed an overdose epidemic that ended up devastating many of the communities where the pills were sent.” Administrative law is a particularly effective remedy for addressing the problem.

Case Example: Purdue Pharma Litigation

One remedy for addressing the pill mill problem is litigation.

The most famous overprescribing case of late, the Purdue Pharma litigation, involved not only “a clinic, doctor or pharmacy” but also a pharmaceutical company that heavily marketed and distributed narcotics to this pill mill and allegedly turned a blind eye to the ratio of prescriptions to number of patients in a certain geographic area. In this case, the wholesaler, Cardinal Health, was aware that the number of prescriptions dispensed exceeded the general population of end users in the West Virginia area. This landmark case marked one of the largest pharmaceutical settlements in the history of overprescribing.

While many states were able to join in the federal lawsuit, often through the work of many offices of attorneys general and their companion Medicaid Fraud and Elder Abuse Control Units, some states are still playing catchup. They, along with state Medicaid Fraud and Elder Abuse Control Units, are involved in multidistrict litigation.

Benefits of Administrative Law

Aside from litigation, what can states do to combat or prevent pill mills from popping up in their jurisdiction? And what can states do to intercede before a physician or clinic becomes a full-blown pill mill? Enter the power of administrative law.

Most, if not all, states have compiled dozens of administrative regulations that allow states to (1) more quickly identify overprescribing, (2) provide a mechanism for civil enforcement, and (3) assess penalties through the revocation of licenses and imposition of fines. These administrative regulations can improve early detection by providing for investigations for outlier activity and can improve prevention by establishing rules for combating current and future overprescribing. Furthermore, administrative laws can be utilized to institute fines and civil forfeitures, which would potentially discourage the temptation to continue to overprescribe.

Administrative Law Oversight: Licenses and Certifications

Licenses and certifications offer numerous opportunities for oversight through administrative law.

Many pill mills are facilitated through community-based clinics, substance abuse counseling programs, and integrated delivery networks. Each of these programs must be licensed and certified by the state department of health. And the provider of the prescription must in turn be licensed and certified by the state. Community-based and countywide programs also have county-level supervision and certify that the providers are following all of the rules.

After state certification and licensure and self-certification as a valid treatment center, the prescribers must adhere to the rules regarding the number of in-person visits, the number in-person evaluations, and documentation of these in-person visits. See, e.g., Wis. Dep’t Health Servs. Code (May 2019).

Most state departments of health have within them an Office of Inspector General or Department of Health investigative team that can run through applications, certifications, certificates, and documentation to search for outlier activity. More specifically, they are searching for upside-down numbers of high prescribers, or inordinately high volumes of prescriptions dispensed considering the number of patients that the provider is seeing. Yet another means of conducting outlier research is through the use of electronic data and health records to compare the number of requests for reimbursement for counseling with the actual population for that particular town, region, or county.

Administrative Law Penalties: Fines and Forfeitures

Once outliers have been identified, and perhaps a witness has corroborated the goings-on at a particular substance abuse clinic, what can be done to either immediately halt the overprescribing or prevent the practice from simply moving to another location?

Generally, these violations of Department of Health laws and/or licensing/regulation department statutes are subject to fines. What is compelling is that the fines are geared per incident: each violation carries a fine, which can be multiplied per prescription, falsified visit, or inadequate documentation of services for which reimbursement for the visit was requested.

Penalties can also involve licenses. When a prescriber simply shuts down in one area and moves to another, the state licensing laws may follow the unlawful behavior. However, there is sometimes a gap in time during which the regulatory agency must build another case and/or the authorities must deal with the details of revocation of the license.

Sanctions may also apply. “Physicians can face serious legal sanctions for inappropriate prescribing, including malpractice liability, medical board discipline, and criminal convictions.” A prescriber’s malpractice insurance also may be invoked to foot the bill.

When prescribers have accumulated excessive fines and penalties, an agency might move to attach liens to the prescriber’s personal holdings. Furthermore, it may be challenging for the prescriber to procure the necessary malpractice insurance coverage. In fact, insurance companies may decline to cover a practice where its behavior is shown to be intentional or criminal and not merely negligent. If that occurs, the provider would no longer be able to move to another state or county to begin the pill mill all over again because the provider would not be able to obtain the requisite license.

Conclusion

While ending the opioid epidemic will require work by many different parties, the remedies available under administrative law serve as one existing mechanism to attack the epidemic.

Karen McKenzie, JD, RN, is an attorney in Washington, D.C. She also is a member of the ABA Litigation Section’s Diverse Leaders Academy. 


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