On Tuesday, 38-year-old Joseph Baumiller of Dallas, Texas pleaded guilty to one count of conspiracy to defraud TRICARE, the health care program serving military members and their families. Baumiller, the former president of Trilogy Pharmacy, admitted to conspiring with several marketers, physicians, and other pharmacists to orchestrate a scheme involving the payment of kickbacks in exchange for prescription drugs.
According to the superseding indictment, marketers Richard Cesario and John Cooper used their marketing company, CCMGRX, LLC, to generate expensive compound prescriptions by paying illegal kickbacks to TRICARE beneficiaries and prescribing doctors. Cesario and Cooper then allegedly paid illegal kickbacks to pharmacies—including Baumiller’s Trilogy—in exchange for filling those prescriptions. The indictment further alleges that the conspirators disguised the illegal kickbacks paid to TRICARE beneficiaries as “grants” for participating in a bogus “Patient Safety Initiative Study.”
As part of his guilty plea, Baumiller admitted that TRICARE paid Trilogy more than $50 million for prescriptions tainted by the illegal kickbacks. The government has alleged that the scheme caused TRICARE to suffer an actual loss of more than $100 million. Baumiller is the first named defendant to plead guilty in the case; his alleged co-conspirators have opted to stand trial.
The Department of Justice recently has begun to crackdown on TRICARE fraud—particularly in connection with compound prescription drugs. Compounded prescriptions, which are essentially made-to-order by retail pharmacies, can cost thousands of dollars. Over the last several years, TRICARE experienced a huge surge in claims for unnecessary compounds. While TRICARE spent a total of $5 million on compound drugs in 2004, that number had skyrocketed to $514 million in 2014.
* * *If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.