Two Jacksonville Compounding Pharmacies and Their Owner Agree to Pay at Least $7.4 Million to Resolve False Claims Act Allegations

The Justice Department announced on June 15, 2023 that Smart Pharmacy, Inc., SP2, LLC, and owner Gregory Balotin have agreed to pay at least $7.4 million to resolve lawsuits filed in Jacksonville, Florida, alleging they violated the False Claims Act by adding the antipsychotic drug aripiprazole to topical compounded pain creams to boost reimbursement and by routinely waiving patient copayment obligations.

Aripiprazole, which is sold under the brand names Abilify, Abilify Maintena, and Aristada, is approved by the U.S. Food and Drug Administration to treat a number of psychological conditions such as schizophrenia and Tourette’s disorder. The United States alleged that the defendants crushed aripiprazole pills approved for oral use and included them in compounded creams used topically for pain treatment, while knowing that there was not an adequate clinical basis to do so.

The defendants allegedly included the drug in the pain creams to increase their profits on prescriptions paid for by Medicare Part D and TRICARE because both Medicare Part D and TRICARE reimburse

pharmacies for the individual ingredients included in compounded drugs, thus defendants increased their reimbursement by adding aripiprazole to the combination of drugs used in their pain creams despite no medical benefit to their patients.

The government also alleged that the defendants improperly waived patient copayments to induce patients to accept the pain cream prescriptions. Although copayments may be waived in certain unique circumstances, such as on the basis of an individualized assessment of a patient’s financial hardship, the defendants allegedly routinely waived copayments without regard to patient need.

“When pharmacies inflate their revenue with medically unsupported prescription ingredients, they compromise the quality of patient care and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will hold accountable those who undermine the integrity of federal healthcare programs for personal profit.”

At the Florida Healthcare Law Firm, we have compliance experts who can help your compounding pharmacy operate in compliance with applicable laws and regulations. Call now to get started.

Medical Marijuana in Florida Substance Abuse Treatment Programs & Recovery Residences as of July 1, 2023

As of July 1, 2023, the presence of medical marijuana on the premises of any substance abuse treatment provider licensed by the state of Florida is banned, and the use of medical marijuana on the premises of any certified recovery residence is banned. The bans have been enacted through statutory changes made by Senate Bill 210.

This ban pertaining to substance abuse treatment providers was accomplished through revisions to the licensure requirements applicable to treatment providers such that treatment providers must now demonstrate “. . . a prohibition on the premises against alcohol, marijuana, illegal drugs, and the use of prescribed medications by an individual other than the individual for whom the medication is prescribed. For the purposes of this paragraph, “marijuana” includes marijuana that has been certified by a qualified physician for medical use . . . .” See, SB 210, lines 36-41. While a prohibition against on-premises possession of alcohol, illegal drugs, and prescribed medications that have been diverted from their proper patient might not have been specifically required by the statutes or regulations governing Florida-licensed treatment providers, in my experience all or nearly all treatment providers implement such a prohibition as part of their policies and procedures. However, the statutory ban on the presence of medical marijuana is new, overbroad, and not conducive to the successful treatment of substance abuse disorder. 

Florida’s medical marijuana law (FS §381.986) lists those conditions that qualify an individual to receive medical marijuana. Most of those conditions are physical conditions and not mental health conditions (e.g. cancer, epilepsy, glaucoma, Crohn’s disease, chronic nonmalignant pain). Conceivably, a person with one of the qualifying physical ailments could also be a substance abuse treatment patient. Denying a substance abuse treatment patient relief from the symptoms of a qualifying ailment through a treatment recommended by a Florida-licensed physician acting within the scope of Florida law is unreasonable, unnecessary, and not conducive to that patient’s recovery from substance abuse disorder. As part of her/his recovery, a substance abuse treatment patient who uses medical marijuana must be counseled, trained, and supported in a recovery that includes the use of medical marijuana.

There is no indication in S.B. 210’s legislative history that a less restrictive prohibition was even considered. A restriction that requires licensed treatment providers to examine and, if appropriate, re-qualify medical marijuana users who present for substance abuse treatment would have been more palatable and would better support the patient’s recovery. Ironically, treatment providers must consider each patient individually before ordering a toxicology screen but not before denying a patient a physician-recommended treatment that was in place prior to the patient’s seeking substance abuse treatment. Unnecessary toxicology screens will not harm an individual; cessation of a physician-recommended course of treatment will.

Interestingly, with respect to recovery residences, the ban imposed by S.B. 210 applies to the on-premises use (not possession) of alcohol, medical and other marijuana, illegal drugs, and the use of prescribed medications by an individual other than the individual for whom the medication is prescribed. The ban on use, and not possession, allows those who live in recovery residences to store their medical marijuana on premises as long as they use the medical marijuana off premises. Treatment providers should expect non-residential levels of treatment to include issues resulting from patients who resume their medical marijuana treatments after having had those treatments denied at the residential levels. Does anybody expect payors to authorize additional days of non-residential treatment to cope with these new issues? I didn’t think so.

Florida does not license or directly regulate recovery residences. Florida regulates recovery residences indirectly by restricting the manner in which licensed treatment providers are allowed to interact with recovery residences. See, Florida Statute §397.4873. A Florida-licensed treatment provider may only refer patients to and receive referrals from certified recovery residences. Certified recovery residences are already equipped to comply with S.B. 210. The Florida Association of Recovery Residences (“FARR”) is the organization that certifies recovery residences in Florida. In order to be FARR-certified, a recovery residence must implement policies that (i) prohibit the use of alcohol and/or illicit drug use and seeking, and that (ii) address residents’ prescription and non-prescription medication usage and storage. See, Core Principals of the National Alliance of Recovery Residences as adopted by the Florida Association of Recovery Residences.

The ban on medical marijuana imposed by Senate Bill 210 is overly broad and likely to thwart the treatment and sustained recovery of medical marijuana users and will likely discourage them from seeking treatment in the first place. It behooves substance use treatment providers and recovery residence operators in Florida to understand this new law and to ensure that their policies and procedures are in compliance.

The Florida Healthcare Law Firm and I have a long history of advising recovery residences, substance abuse treatment providers, and their ancillary businesses nationally. You can reach us at [email protected].

This new law has been effective since July 1st!

FLORIDA EXPANDS TELEHEALTH CAPABILITIES: HB267 AND ITS IMPLICATIONS TO PRESCRIBING ANABOLIC STERIODS

Telephones are now an allowable method of technology for telehealth in Florida, effective July 1, 2023.  Under HB267, which was unanimously passed by the legislature and signed into law by the governor, Florida law now redefines telehealth to permit the use of “audio-only telephone calls” for all telehealth visits other than when used to prescribe a Schedule II controlled substance.

 Prior to July 1, 2023, Florida expressly prohibited providers to render telehealth services to their patients using audio-only telephones, e-mail messages, or facsimile transmissions. The new law now removes the prohibition on using audio-only telephones for telehealth visits, except for prescribing Schedule II controlled substances. Providers are still prohibited from providing telehealth services using e-mails or facsimile transmissions, and the restrictions for prescribing Schedule II medications remain.

Florida law considers anabolic steroids (i.e., any drug or hormonal substance, chemically and pharmacologically related to testosterone) as a Schedule III controlled substance. With HB267 signed into law, providers who prescribe anabolic steroids can now do so via audio-only telephone calls with their patients. This relieves a burden on telehealth providers who prescribe testosterone to their patients and were previously required to use synchronous or asynchronous telecommunication technology to provide such healthcare services. These providers can now confidently prescribe anabolic steroids over a telephone call knowing that they are compliant with Florida law. Other requirements, however, such as documenting a patient’s medical records, must be complied with when using telehealth.

In addition to Florida law, providers should keep in mind that federal law has its own restrictions to prescribing controlled substances using telehealth. The Drug Enforcement Agency (“DEA”) issued a Temporary Rule that briefly expanded the ability to prescribe controlled substances without an in-person evaluation, and subject to certain conditions. It is important to note that this Rule is only temporary, and the DEA indicated that it will be issuing a final rule in the coming months that will change the federal requirements of prescribing controlled substances through telehealth. Providers practicing telehealth in Florida must comply with both federal and Florida rules governing telehealth.

Florida’s expansion of telehealth to include telephone calls changes the telehealth landscape tremendously. Telehealth providers in Florida now can lawfully prescribe Schedule III medications, including testosterone, in their practice through a phone call with a patient.