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How License Lookup Reduces the Financial Risk of Compliance Failures

The cost of failed compliance can be millions of dollars - and even business closure.

DEA, May 23, 2022

License Lookup is desktop software that allows end users to quickly and flexibly look up DEA registrations for credentialing and validation. This improves both regulatory compliance as well as employee productivity.

Healthcare credentialing refers to the process of verifying licensing, education, training, and proven skills of healthcare practitioners. Validation refers to the checking of a license most often when verifying a prescription, an insurance claim, or a shipment of drugs.

Improving compliance and productivity can have a tremendous financial impact.

Financial and Regulatory Risks

When it comes to working with heavily regulated schedule 2 to 5 medications, it is critical that your organization has a strong compliance regimen in place. Fraud and abuse by your own employees when they fall into addiction is a real risk.

The financial impact of poor controls can be quite high. For example, even just one prescription filled by a pharmacy for a doctor with an invalid/inactive DEA registration can result in a fine of $15,000. Even a small retail pharmacy can fill over 100,000 prescriptions per year, which leaves a lot of room for compliance issues. Accurate and efficient validation is critical.

In the news there have been several high profile compliance disasters over the last several years. One notable credentaling case was the Fake Walgreens Pharmacist who Filled 745,000 Prescriptions - and which led to Walgreens paying a $7.5 million fine.

In another case, UT Southwestern Paid a $4.5 Million Settlement for an assortment of "serial compliance failures". And in yet another case, the University of Michigan Hospital was forced by the government to pay $4.3 million. Among their many violations, they failed to validate the DEA registrations of off-site facilities that they shipped controlled drugs to.

The largest fine of all however is The $150 million McKesson Settlement with the DEA. McKesson failed to implement an effective system to detect and report "suspicious orders" over a period of many years.

Business and Legal Risk

In 2021 alone, 47 registrant actions were taken by the DEA which mostly resulted in the registrant being forced to cease doing business. In many cases, additional criminal legal action was taken by the DEA. Controlling access to DEA data as well as tracking the access and use of DEA data, is an important component to preventing fraud and abuse.

In the McKesson case mentioned above, in addition to fines McKesson was also forced to suspend sales of controlled substances from 4 of their major distribution centers - for multiple years - a business impact that might even be greater than the direct impact of the financial penalties.

Compliance with License Lookup

License Lookup has a number of key features which strengthen your DEA compliance.

For starters, it maintains strict control over the data itself. The data is contained in a segregated data container with military grade AES encryption. The only way to access the data is through the License Lookup interface with an end user subscription, and the activities of all end users are logged.

Control over the DEA data is not to be taken lightly. The DEA requires all registrants and approved entities to adhere to a strict data use agreement. As a part of this agreement, registrants must prevent unauthorized access to the DEA database.

The end user logging of activity helps customers with compliance in several ways. As an audit trail it works as proof that a DEA registration was checked/validated at a specific time on a specific day - a great peace of mind to have as a backup in case other records are misplaced.

But it also helps segregate the activities of each employee. If one employee is misusing the data, then corrective action can be taken - and hopefully not reflect badly on the entire organization in an audit.

And most importantly of all, having a powerful tool with the most accurate and timely information updated daily is the best way to insure accurate credentialing of employees and validation of orders.

For more information on License Lookup visit: License Lookup features and functionality.