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Compounding Pharmacy Fraud

This archive displays posts tagged as relevant to compounding pharmacies and fraud related to compounding pharmacies. You may also be interested in our pages:

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November 15, 2019

Compounding pharmacy Midwest Compounders, Inc., and its owner Troy DeLong, agreed to pay $205,000 to resolve allegations that they submitted false claims to Tricare for prescriptions that resulted from unlawful arrangements between the pharmacy and prescribers or marketers, or otherwise overbilled for medically unnecessary dosages or redundant active ingredients.  The allegations were first made in a qui tam case filed by a whistleblower under the False Claims Act.  USAO ND Iowa

November 8, 2019

In the eleventh settlement involving the multi-state OK Compounding Pharmacy fraud scheme, podiatrist Jonathan Moore of Kentucky has agreed to pay $65,404 for the role he played in defrauding federal healthcare programs.  In exchange for illegal kickbacks disguised as “medical director fees,” Dr. Moore allegedly prescribed medically unnecessary compounded pain creams to patients, many of whom were insured by Medicare and TRICARE.  USAO NDOK

November 7, 2019

Compound drug ingredient supplier Fagron Holding USA LLC has agreed to pay over $22 million to resolve two qui tam suits involving three of Fagron’s wholly-owned subsidiaries.  According to whistleblowers, Freedom Pharmaceuticals Inc. grossly inflated the price of active pharmaceutical ingredients used in compound prescriptions, causing pharmacy customers to submit false claims to TRICARE.  Other allegations involved subsidiaries Pharmacy Services Inc. and B&B Pharmaceuticals Inc., which were accused of submitting false claims to federal healthcare programs, manipulating prescription drug pricing, paying kickbacks to physicians, and illegally waiving patient copays.  DOJ

October 31, 2019

In the largest healthcare fraud case ever to come out of Mississippi, pharmacy owner Thomas Spell has been sentenced to 10 years in prison and ordered to pay over $243 million in restitution for knowingly defrauding TRICARE.  Between 2014 and 2016, Spell and his co-conspirators had deviously marketed compounded medications based on their rate of reimbursement from TRICARE, paid illegal kickbacks to marketers in order to obtain prescriptions from TRICARE beneficiaries, and improperly waived mandatory copayments for TRICARE beneficiaries.  USAO SDMS

Florida Pharma Whistleblower Case Results in FCA Settlement by Private Equity Firm

Posted  09/27/19
Last week, the government announced that compounding pharmacy Diabetic Care Rx LLC, known as Patient Care America (“PCA”), its executives, and the private equity firm managing the pharmacy Riordan, Lewis & Haden Inc., had agreed to pay over $21 million to settle allegations they violated the False Claims Act (“FCA”) by executing a kickback scheme to generate referrals of TRICARE patients. The allegations...

September 26, 2019

Physician Philippe R. Chain will pay $300,000 to resolve allegations that he caused the submission of false claims to Tricare while working for telemedicine company CallMD. Chain allegedly issued and approved prescriptions for compounded medications, many of which were not medically necessary, without speaking to, examining, or otherwise having a physician-patient relationship with the patients.  USAO CT

September 18, 2019

Florida-based compounding pharmacy Diabetic Care Rx LLC, also known as Patient Care America, together with two of its executives, CEO Patrick Smith and VP of Operations Matthew Smith, and the private equity firm Riordan, Lewis & Haden Inc., will pay $21.36 million to resolve a case brought by two whistleblowers under the False Claims Act alleging that they paid unlawful kickbacks to secure referrals for patients covered by TRICARE, the federal healthcare program that covers military members and their families.  The pharmacy paid patient recruiters to target military members and their families for the prescription of compounded creams and vitamins formulated to ensure the highest possible reimbursement from TRICARE.  The marketers in turn paid doctors who issued the prescriptions, often without seeing or even speaking to the purported patients.  In addition, the pharmacy and marketing company often covered patient copayments through a sham charitable organization affiliated with the marketing company.  Private equity investor RLH was alleged to have known about and agreed to the kickback scheme.  Whistleblowers Marisela Medrano and Ada Lopez were, respectively, the former Director of Marketing and the Reimbursement Services Manager of PCA.  They will receive a yet-to-be-determined share of the U.S. recovery.  DOJ; SD FL

September 5, 2019

In yet another enforcement action relating to a nationwide compounding pharmacy fraud scheme involving OK Compounding, Dr. James Womack of Missouri has agreed to pay $471,221 to resolve his liability under the False Claims Act.  Womack allegedly accepting kickbacks disguised as medical director fees in exchange for prescribing medically unnecessary pain creams.  USAO NDOK

August 2, 2019

A Georgia man accused of masterminding a fraud scheme against TRICARE has been sentenced to 8 years in prison and ordered to pay a combined $8 million in restitution and forfeiture.  Coordinated by Michael Burton, the scheme ran from 2014 to 2015 and involved multiple co-defendants and a Florida-based pharmacy.  Together, their cumulative actions caused TRICARE to spent millions of dollars on medically unnecessary compounded prescription drugs, and earned Burton over $1.4 million in commissions.  USAO NDFL

July 5, 2019

A New York doctor is the latest defendant in a widespread OK Compounding pharmacy fraud scheme to settle with the government.  From 2014 to 2015, Dr. George Lehner allegedly prescribed compounded pain creams for his Medicare patients in exchange for an hourly “medical director fee” by OK Compounding LLC.  To settle the case against him, Lehner will pay about $130,000USAO NDOK
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