Catch of the Week: Pharmacy Owner Convicted in $174 Million Telehealth Fraud That Targeted Consumers and PBMs
In yet another example of how unscrupulous providers can take advantage of the benefits of telehealth (or telemedicine) to commit healthcare fraud, on December 2, 2021, a federal jury in Tennessee convicted Peter Bolos, the owner and operator of Synergy Pharmacy, located in Florida, of 22 criminal counts, including violating the Food, Drug and Cosmetic Act (FDCA) by introducing a misbranded drug into interstate commerce. According to the DOJ press release, evidence at trial showed that Bolos was responsible for at least $89 million out of the total $174 million in fraudulent claims for prescription drugs paid by private and public insurers, including Medicaid and TRICARE. Bolos’ co-conspirators, including various business entities, had previously pled guilty for their role in the fraud.
Both Consumers and PBMs Were Deceived and Victimized
Although telehealth fraud is not new, what is notable about the Synergy Pharmacy fraud scheme is that not only individual patients but PBMs were deceived and victimized by Bolos’s and his co-conspirators’ actions.
At trial, the government team, which was led by attorneys from the USAO Eastern District of Tennessee and the DOJ Consumer Protection Branch, introduced evidence that Bolos had used a telemarketing company, HealthRight, to contact individual patients and generate prescriptions for various drugs, including pain and scar creams, as well as vitamins. Doctors paid by HealthRight signed the prescriptions without ever communicating directly with the patients, relying solely on HealthRight’s telemedicine screening procedures. Synergy Pharmacy, owned and controlled by Bolos, then purchased the invalid prescriptions from HealthRight, and, using deceptive means, passed them on to Pharmacy Benefit Managers (PBMs). Unaware of the underlying fraud, the PBMs processed and submitted claims for the drugs to public and private insurers. Once the claims were paid, the PBMs sent the insurance payments back to Synergy Pharmacy, which dispensed the misbranded drugs to patients.
The scope of the fraud was staggering. According to the government, between May 2015 and April 2018, Bolos and Synergy Pharmacy paid the telemarketer, HealthRight, more than $30 million for at least 60,000 prescriptions. It is unclear from the DOJ press release whether any physicians were held personally or professionally liable for signing the prescriptions that made the scheme possible.
Whistleblowers Can Help Protect the Drug Supply and Distribution System
On December 9, 2021, Deputy Assistant Attorney General Arun G. Rao spoke at the FDLI Enforcement, Litigation, and Compliance Conference and discussed the work of the DOJ Consumer Protection Branch.
Although he did not specifically mention telehealth fraud generally or the Synergy Pharmacy case in particular, DAAG Rao’s remarks underscore the important work of the branch in protecting consumers and businesses that participate in the drug supply and distribution system.
Sadly omitted from his comments is the role that whistleblowers can play in helping to bring fraud schemes to the government’s attention. One can only wonder whether, had a physician, pharmacy employee, or entity doing business with Synergy Pharmacy blown the whistle, the fraud scheme might have been prevented or stopped much sooner, saving public and private insurers millions of dollars, and better protecting individual patients.
If you have information about healthcare or telehealth fraud, or would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please contact us for a confidential consultation.
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