Fraudster of the Week -- Monarch Medical Group
Last week, California state prosecutors charged 26 individuals, including 21 physicians and 2 pharmacists, in connection with a kickback scheme orchestrated by Tanya and Christopher King, the owners of a practice management company called Monarch Medical Group and other related companies. If convicted, the involved physicians could face up to 25 years in prison and the pharmacists could face up to 28 years. Tanya King—who has been charged with 91 counts of insurance fraud—could be sentenced to up to 117 years.
Monarch’s website billed the company as “a leader in the ancillary business,” focusing on orthopedic, pain management, and neurology practices that treat workers’ compensation patients and those in preferred provider organization health plans. Prosecutors allege that Monarch coordinated at least three scams based on its advertised ancillary services.
- The first scam involved pain creams, which the Kings directed a co-conspirator pharmacy to compound. According to prosecutors, the Kings bought tubes with a 3-g, 3-day supply of cream for $15 each and tubes with a 120-g, 30-day supply for $40 each. The Kings provided conspiring physicians with a supply of 3-g tubes to dispense to workers’ compensation patients in the physician’s office. Another King-owned company would then bill workers’ compensation insurers more than $200 per tube, kicking back up to 90% of the profits to the prescribing physician. In exchange for this deal, the physicians were required to prescribe the 120-g tubes to workers’ compensation patients, who received the creams directly from a conspiring pharmacy. Monarch would bill insurers $700 to $1000 for the 120-g tubes.
- In the second scam, Monarch Medical Group bought repackaged oral pain medications from two California pharmaceutical companies and distributed them to the conspiring physicians. When the physicians dispensed the medications, Monarch billed workers’ compensation insurers without disclosing the wholesale price or its role in purchasing the products for the prescribing physicians. Physicians received an agreed upon cut of these profits.
- The third scam involved bribing doctors to conduct urine drug-screening tests on workers’ compensation patients. Prosecutors allege that a Monarch-affiliated company would bill insurers for these tests, which were often performed onsite by a King-owned lab company, and kick back a percentage of the profits to the physician. Regardless of the results of the point-of-care test or medical necessity, the urine samples were referred to another lab for additional testing. Although the Kings paid the lab $60 per test, they allegedly billed insurers as much as $700.
“The Kings and their co-conspirators played with patients’ lives, buying and selling them for profit without regard to patient safety,” said Insurance Commissioner Dave Jones. “Patients have the right to expect treatment decisions by health care professionals are based on medical need and not unadulterated greed. The magnitude of this alleged crime is an affront to ethical medical professionals.”
Individuals with knowledge of insurance fraud should note that the California Insurance Fraud Prevention Act allows interested parties to blow the whistle on such fraud by bringing a civil suit against defendants who have defrauded (or attempted to defraud) private insurers. The act mirrors the False Claims Act in allowing whistleblowers to receive a financial award for reporting fraud to to the government. Those who violate the California Insurance Fraud Prevention Act are subject to penalties between $5,000 and $10,000 per violation, as well as three times the amount of each claim for compensation. In a successful action, the whistleblower who brought the suit may receive between 30 and 50% of the proceeds.
If you have knowledge of fraud against insurance companies in California, or other fraud involving pharmacies, please contact the whistleblower attorneys of Constantine Cannon to discuss your options.