Compounding Pharmacy Fraud
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April 14, 2023
Nine defendants will spend a combined 70 years in prison for their respective roles in a $126 million compounding fraud scheme. The co-conspirators defrauded the Department of Labor’s Office of Workers’ Compensation Programs and TRICARE by submitting false claims and paying kickbacks to patient recruiters and physicians for prescribing certain medications, based not on medical necessity but instead on the drugs’ hefty reimbursement rates. The patients received the compounded medications via mail, despite never requesting, wanting, or needing them. DOJOctober 12, 2022
Four pharmacies have agreed to pay over $6.8 million to settle a qui tam suit that alleged they defrauded TRICARE and the Federal Employees Health Benefits Program, in violation of the False Claims Act. According to a former accountant for one of the pharmacies, DermaTran Health Solutions, LLC; Pharmacy Insurance Administrators, LLC; Legends Pharmacy; TriadRx; and Lake Side Pharmacy created a program to waive mandatory copays for beneficiaries of federal health insurers, overcharged the government for compounded pain creams, and traded out-of-network prescriptions with other pharmacies, which constituted a kickback. USAO NDGAOctober 3, 2022
Medical sales representative Steven Monaco has been sentenced to 14 years in prison for orchestrating two fraud schemes that led to multimillion dollar losses to federal, state, and private health insurance plans. In the first scheme, Monaco arranged for a doctor’s medical assistant to be placed on the payroll of a medical diagnostic laboratory in exchange for all of the doctor’s labwork. In the second scheme, Monaco arranged for doctors to sign medically unnecessary prescriptions for expensive compounded medications, on behalf of patients they never evaluated, in exchange for illegal kickbacks. Monaco received $36,000 from the first scheme and $350,000 from the second scheme, and caused over $4.6 million in losses to the insurance plans. USAO NJMay 18, 2022
Peter Bolos and Michael Palso, owners of Synergy Pharmacy, were sentenced to 14 years and 33 months in prison, respectively, and each will pay $24.6 million in restitution for defrauding pharmacy benefit managers into authorizing millions of dollars in claims paid to pharmacies controlled by the defendants. Bolos will forfeit an additional $2.5 million. The conspiracy involved cold-calling patients and deceiving them into accepting certain drugs (i.e., pain creams, scar creams, and vitamins) and providing their personal insurance information to receive them. The scheme impacted both private and public insurers, including Medicaid and TRICARE. DOJ, USAO EDTNApril 26, 2022
A former pharmacist in Mississippi named Mitchell Barrett has been sentenced to 10 years in prison and ordered to pay restitution as well as forfeit all assets stemming from a $180 million healthcare fraud scheme against TRICARE and other health benefit programs. Barrett had adjusted prescription formulas to ensure the highest possible reimbursement, solicited recruiters to procure prescriptions for expensive compounded drugs, paid those recruiters a commission based on reimbursements from TRICARE, routinely waived copayments required to be paid by TRICARE beneficiaries, and took steps to disguise the waived payments. DOJTop Ten Financial and Healthcare Fraud Prison Sentences of 2021
Posted 01/28/22
August 9, 2021
The owners of North Carolina compounding pharmacy Wellcare Compouding, David Tsui and Lois Tsui, paid $1.1 million to resolve allegations that they violated the False Claims Act by submitting false claims for payment to the TRICARE program in 2014 and 2015. The government alleged that Wellcare made improper payments to physicians and “marketers” in violation of the Anti-Kickback Statute and encouraged medically unnecessary prescriptions consisting of high-margin ingredients in order to maximize the pharmacy’s reimbursement. David Tsui had been convicted of healthcare fraud in 2009 and was excluded from participation in federal healthcare programs; the government alleged that his involvement and ownership was intentionally concealed. USAO MD NCMay 28, 2021
Erik Santos of Georgia was sentenced to more than 11 years in prison following his guilty plea on healthcare fraud charges. Santos conspired with Florida compounding pharmacy Patient Care America and others to recruit Tricare beneficiaries to fill prescriptions for expensive, supposedly tailor-made, compounded medications that consisted of little more than common pain or scar creams, but came with price tags as high as $10,000-$15,000 per month. The beneficiaries did not need the medications, which had little to no therapeutic value, and Santos secured the prescriptions by paying doctors, who had not actually seen the beneficiaries, to approve pre-printed prescriptions for large amounts of these medications. Santos’s fraudulent referrals caused an actual loss to the Tricare program of approximately $12 million. PCA pharmacy paid Santos over $7 million in prescription referral kickbacks. In addition to the prison sentence, the Court imposed restitution in the amount of $11.8 million and entered a forfeiture judgement of approximately $7.6 million. USAO SD FLCatch of the Week: Dozens of Fraudsters Sentenced in Multimillion Dollar Compounding Pharmacy Fraud
Posted 04/30/21
