July 17, 2020

The Cost of DEA Noncompliance in Veterinary Practices

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Your exposure may be greater than you think.

Takeaway: While DEA compliance may seem costly, you can’t afford to not prioritize it.

As a veterinarian or practice manager, your day-to-day focus is to provide patients with the best possible medical care while ensuring the practice runs efficiently and effectively. You’re also expected to wear many hats and adhere to a plethora of state and federal regulations. This can be a challenge for any practice.

Unfortunately, Drug Enforcement Administration (DEA) compliance seems to be one area where many practices fail to implement a cohesive and comprehensive program. One of the most common reasons veterinary professionals fail to implement a DEA compliance program is cost. We often hear, “It’s too expensive.” Or, “I can’t afford it right now.” DEA compliance, just like the care you provide your patients, is most effective when applied proactively. While DEA compliance is not “cheap,” it is an investment that pays countless dividends. Because failing to prioritize it can put you and your practice at risk.

Yes, it can happen to you.

Gone are the days when the DEA focused primarily on large hospitals and pharmacies. America’s opioid epidemic has resulted in the DEA looking more closely at how healthcare professionals of all types (including veterinarians) manage controlled substances. Today, the DEA uses advanced data analytics to track every controlled-substance purchase, specifically opioids sold to DEA registrants.

For example, the DEA now maintains a database that tracks the path of every pain pill sold in the United States, by manufacturers and distributors to pharmacies, in every town and city. The Washington Post sifted through nearly 500 million transactions from 2006–2014 that are detailed in the DEA’s database and analyzed shipments of oxycodone and hydrocodone pills, which account for three-quarters of the total opioid pill shipments to pharmacies. The Post is making this data available at the county and state levels to help the public understand the impact of years of prescription pill shipments on their communities. If you ordered during this time frame, your name is on the list.¹

Complacency is costly.

As noted in a collaborative article we wrote with AAHA in 2019, many veterinarians have become complacent about compliance because—for a long time—veterinary hospitals weren’t on the DEA’s radar. Veterinarians often dismiss warnings about lax compliance with some variation of, “In 20 years, the DEA has never come to my facility, so what do I have to worry about?” But times have changed, and the days of veterinarians flying under the radar are gone.²

Don’t allow yourself to be blindsided. The DEA’s process for investigating DVMs is anything but transparent. They do not release information concerning the number of DVMs they are targeting, actively investigating or have fined for violations. To make matters worse, if you are on the DEA’s radar, there will be no warning; they will simply show up unexpectedly to assess your practice. The good news is, you can take action now to ensure you are both ready for that visit and in a position to send the DEA home with a positive report.

Examples of veterinary fines.

A Colorado veterinarian had to pay $226,000 in DEA fines, surrender his DEA registration and permanently relinquish his Colorado veterinary medicine license to settle allegations that he violated multiple provisions of the Controlled Substances Act.³

A Marietta, GA veterinarian paid $90,000 to resolve allegations he violated the recordkeeping requirements of the Controlled Substances Act.⁴

Additional costs of DEA non-compliance.

The financial impact to your practice following a DEA inspection begins with mandated federal, and in some cases, state fines.

Federal fines. The cost for each DEA violation is $15,691. In more than three years of assisting the veterinary community with DEA compliance from New York to Hawaii, the number of potential violations we’ve identified has ranged from 6-27 per facility. When we are engaged to assist veterinarians after federal charges have been filed, we’ve never seen less than 11 violations.
State fines. In addition to federal fines, state fines are often assessed depending on the state in which you practice.

But fines are only the beginning of the potential consequences. You are likely to face numerous other expenses, including:

Attorney fees. When the DEA comes knocking, one of the first calls you will make is to an attorney. According to LegalMatch.com, attorney fees for criminal defense range from $150-$700/hour. Legal fees add up, and with an hourly fee structure, it is not uncommon for legal bills to quickly hit $10,000 to $15,000. A lawyer who works on an hourly rate may also require a retainer fee.⁵
Remediation Costs. Typically, a third party expert who specializes in DEA compliance is needed to remediate the problems and work with the DEA to reduce potential fines. This can easily add up to tens of thousands of dollars.
Employee Turnover. According to calculations by PeopleKeep.com, every time a business replaces a salaried employee, it costs an average of 6–9 months’ salary. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses. Others predict the cost is even more, estimating that losing a salaried employee can cost as much as twice their annual salary, especially for a high-earner or executive-level employee.⁶
Crisis Management. News travels quickly. When your reputation is on the line, you may need a PR firm to help keep you out of the headlines. Prices vary depending on your location, but can range from $2,000–$10,000+ per month.⁷
Loss of Patients. Even the best crisis management efforts rarely succeed in keeping felony allegations under wraps. When word gets out that you are the subject of a DEA investigation, loss of patients is an unavoidable and costly consequence.
Compliance Oversight. As part of sanctions, you may be required to undergo a compliance oversight monitoring program. Several clients we have worked with were ordered to undergo oversight programs for three years. The longer the program the higher the cost.
Rehabilitation Program. If you are found guilty of failure to prevent drug diversion and the diverting activity was committed by an employee, you will be financially responsible, to some degree, for associated costs for that employee’s rehabilitation program. We have worked with clients who had to pay as much as $20,000 per month toward a diverting employee’s rehabilitation program.
State Pharmacy Board Investigation. Veterinarians are subject to oversight by state veterinary medical boards as well as state boards of pharmacy, which have the authority to assess additional fines.
Loss of DEA License. Once you lose your DEA license, getting it back is not easy. If you’re lucky enough to get it back, you’re still looking at an 18-24 month process. Associated costs to regain your license add up. If you are unable to regain your license, you’ll incur the cost of sourcing and employing a new DEA registrant.
Lost inventory. If you are charged with failure to prevent drug diversion and the diversion was as a result of employee theft, you also incur the cost of the controlled substances diverted from your facility. And, you run the risk of being cut off from your controlled substance supplier.

When you add it all up, the cost of non-compliance can easily exceed $100,000. Choosing to proactively invest in DEA compliance, though not always at the top of your to-do list, will pay dividends down the road. Not to mention the daily peace of mind you’ll have knowing you’re protected.

For more than three years, TITAN Group has helped more than 160 facilities from New York to Hawaii. During this time, the minimum number of violations found during an inspection has never been less than six per facility. At $15,691 per violation, TITAN has potentially saved each of our clients at least $90,000 in potential fines, not to mention the potential revenue loss from a long-term DEA-imposed shutdown.

Am I at risk?

If you’re not sure if your compliance program could pass a DEA audit or inspection, find out in 60 seconds or less with TITAN’s free online risk assessment.

ASSESS YOUR RISK

Ready to take action?

TITAN Group DEA Compliance Analysis™

A TITAN Group DEA Compliance Analysis helps you get a head start on potential risks in your practice. This virtual analysis puts the power of TITAN in the palm of your hand and gives you the opportunity to assess the level of compliance in your practice. No matter what stage your practice is in, it is essential to operate with the confidence of knowing there are no risks to your invaluable DEA registration.

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