Tennessee Medical Group Settles for $200k Over Controlled Substances Act Violations

A medical company with over 30 clinics in Tennessee and Virginia will pay $200,000 in civil monetary penalties to settle claims that it violated the federal Controlled Substances Act’s recordkeeping requirements.

On Thursday, the Department of Justice announced that the State of Franklin Healthcare Associates, a multi-specialty physician-led medical group, had agreed to pay penalties in District Court in the Eastern District of Tennessee to resolve allegations that it violated the Controlled Substance Act (CSA).

The CSA requires persons who register with the DEA to create and keep documents outlining how controlled narcotics are obtained, distributed, and disposed of.

The claims against the State of Franklin Healthcare Associates (SOFHA) indicated that between October 2020 and January 2023, the medical organization failed to develop or keep the relevant documentation or was unable to provide it. According to the DOJ, the claims were that at the time, the documentation that could not be provided included:

SOFHA is responsible for transferring Schedule III and IV controlled substances from its physicians to an unregistered supply warehouse, transferring them to other physicians in the medical group, transferring them from the supply warehouse to unregistered SOFHA clinics for dispensing by registered SOFHA physicians, and preventing the loss or theft of a Schedule III controlled substance.

“When medical providers fail to follow the record-keeping requirements of the CSA, it significantly contributes to the risk of diversion of controlled substances from legitimate purposes to improper usage, causing harm to our citizens and communities,” said Francis M. Hamilton III, U.S. Attorney for the District “This settlement agreement demonstrates that the United States Attorney’s Office, the DEA, federal, state, and local law enforcement partners, are using all tools available to enforce the requirements of the CSA and degrade the diversion of controlled substances.”

The DOJ states that the DEA conducted the investigation, and SOFHA cooperated with it. According to the announcement, the claims settled in the agreement are simply allegations, and responsibility has yet to be determined.