A recently announced change in Drug Enforcement Administration policy regarding how it treats untimely renewals of a practitioner's registration could have unintended consequences that will place pharmacies and other providers at risk.
In passing the Comprehensive Drug Abuse Prevention and Control Act of 1970 and the Controlled Substances Import and Export Act (CSIEA) (21 U.S.C. 801-971), as amended (hereinafter, CSA), Congress empowered the DEA (as delegated by the attorney general) to maintain a closed system of distribution to ensure that controlled substances are readily available for the legitimate medical and scientific needs of the United States and to protect the public health and safety from the misuse and abuse of controlled substances. The linchpin of the closed system of distribution is the requirement that all persons and entities who manufacture, distribute, import or export controlled substances or List I chemicals, and those persons and entities who dispense or conduct research or chemical analysis with controlled substances maintain an active and valid registration issued by the DEA.
The DEA's regulations detail registration requirements and procedures, including the registration period for each category of registration. Prior to the expiration date of a registration, the DEA requires the person or entity to submit an application for renewal. According to the DEA's regulations, absent a renewal application, the DEA registration will expire and become invalid on the expiration date.
For several years, and without legal authority to do so, the DEA has allowed for a "grace period" for registrants who failed to file a timely renewal application. This practice was especially prevalent with respect to the approximately 1.6 million registrants categorized as practitioners (doctors, mid-level practitioners, pharmacies, etc.). For instance, if a doctor neglected to file a renewal application, the DEA would keep the doctor's registration active (in some cases for months) to allow the doctor an opportunity to file a renewal application. While this grace period policy was not promulgated in regulations or authorized by the CSA, it became an expectation of the registrant community. The grace period allowed for the continued use of the doctor's "expired" DEA registration number and the continued use of that same number after the untimely renewal application was filed with and adjudicated by DEA.
In a recent notice posted on the website for the DEA's Office of Diversion Control, the DEA announced a significant change to its registration renewal process whereby the DEA would no longer allow for a grace period. That is to say, if a timely renewal application is not filed, the DEA registration will automatically be retired on the date of expiration. The DEA indicated that the change in policy will be effective starting Jan. 1, 2017. At that time, the DEA will only send out one renewal notification, the renewal will be sent to the registrant’s “mail to” address, and no other reminders will be provided by the DEA. A failure to file a renewal application by midnight Eastern Time of the expiration date, will mean that the registrant’s DEA number will be retired and a new registration number will be issued upon the filing of an application for a new DEA registration.
Why does any of this matter?
While the scope of the impact of this policy change will not become apparent until after Jan. 1, 2017, it could have a significant adverse impact on controlled substance transactions, especially pharmacy transactions. Consider first that the DEA administrative case law states that the CSA and DEA's regulations do not require a pharmacy to check the DEA registration status for each and every dispensing of controlled substances. See JM Pharmacy Group Inc., d/b/a Farmacia Nueva and Best Pharma Corp; Decision and Order, 80 FR 28667, 28671 (2015) ("a pharmacist is not obligated to verify whether every prescription he fills has been issued by a practitioner who holds a valid DEA registration. Of course, if a pharmacist has actual knowledge that a prescriber does not hold a valid registration, or acts with willful blindness to this fact, a pharmacist violates the Controlled Substances Act if he proceeds to dispense that prescription."). Thus, absent specific knowledge to the contrary, a pharmacy should not be held accountable by the DEA for dispensing a prescription issued by a practitioner who failed to timely file a renewal application, which immediately renders his/her DEA registration number invalid.
That, however, is not the end of the discussion. While DEA enforcement action may not be an immediate concern, there are several unintended consequences of this policy change that could be problematic for pharmacies. Retail pharmacies have a plethora of regulatory obligations beyond those imposed by the DEA. They have state Prescription Drug Monitoring Program (PDMP) reporting obligations, third-party payor claims processing, and Medicare/Medicaid claims processing, among others.
If the pharmacy dispenses a prescription for controlled substances written by a physician after his/her DEA registration was automatically terminated on the expiration date, the validity of the prescription is at issue. The pharmacy's reporting to the state's PDMP would be incorrect and likely rejected by the state. Perhaps more importantly, if the pharmacy processed the invalid controlled substance prescription through a third-party payor or a state or federal program, the pharmacy could be found to have submitted false claims. At a minimum, the pharmacy may have a self-reporting and repayment obligation. Auditors for third-party payors may also use the invalid DEA registration to support recoupment of previously paid claims, and rely on extrapolation methodology to increase the amount they seek to recoup.
While the DEA does not routinely consider the unintended consequences of policy implementation and/or changes, it is critical that pharmacies and other registrants do so. Pharmacies will have to consider more aggressive policies and procedures to ensure that each and every prescription for controlled substances is written by a practitioner with a valid DEA number. While pharmacies, to a certain extent have always needed to address the validity of a state license or DEA registration, this change in policy by the DEA increases the risks and the likelihood that invalid prescriptions will be presented to a pharmacy.