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Health Care Fraud Enforcement Continues to Rock Pharmacy Industry

pharmacy fraudBy: Karen Davila

Yet again, the fraud enforcement arm of the DOJ strikes out against fraud in the pharmacy industry.  Two new cases shed continuing light on the ongoing fraud.

Announced last week by the DOJ, the owner/operator of five pharmacies in New York pled guilty to charges stemming from a scheme to defraud Medicare and Medicaid by billing for prescription drugs that were not dispensed, not prescribed, not medically necessary or dispensed when the pharmacy had no authority to dispense the prescription drugs.  This blatant disregard for the law was magnified when the owner/operator used the ill-gotten gains of her scheme to purchase luxury items like cars and jewelry.  Nothing screams “come and get me” like openly flaunting the money taken from the government.

In addition to health care fraud and conspiracy to commit health care fraud, this individual was charged with and pled guilty to mail fraud and is required to pay $6.5 million in restitution plus $5.1 million in forfeiture money to the federally funded health plans.  She also faces up to 40 years in prison for her illegal acts.

Justice News Press Release

In another ongoing case in which five defendants were previously sentenced, the sentencing of a sixth individual was announced earlier this month.  In many ways, this is the same story, but a different cast of characters.  In this case, the owner of several pharmacies was sentenced to four years in prison in connection with multiple health care fraud conspiracies, kickbacks, and fraudulent billing that cost federal, state, and private health care insurers nearly $8 million.  The fraud schemes spanning over four years included kickbacks for expensive drugs and devices as well as billing government and private payers for expensive drugs and devices that were not medically necessary, not prescribed by a physician, and/or never actually delivered to the patient.  The individuals involved in this conspiracy used their own names, the names of family members and pharmacy employees on prescriptions to bilk millions from health care payers.  To make matters worse, these individuals took advantage of the opioid epidemic in this country and paid kickbacks for referrals of prescriptions for expensive naloxone auto-injectors used to treat opioid overdose emergencies.  Prison terms were imposed previously on the other five individuals charged in the matter, including a pharmacist, two pharmacy technicians, a pharmaceutical sales specialist, and another individual.

Press Release

DOJ’s fraud enforcement strike forces should not be ignored.  For those health care providers trying hard to do the right thing and to “color between the lines”, the wrongdoing here is obvious.  But, there are times when knowing whether certain conduct is permissible under the law requires a bit more analysis.  That’s when an attorney specializing in health care can assist health care providers in navigating the myriad laws, rules and regulations that may apply.

And, while it goes without say that you shouldn’t bill the government for items or services not provided, some of the other questions you may face as you mature your health care practice may need a closer examination.

In the pharmacy industry, here are some simple and practical tips that can be used to avoid risks:

  • Never pay (or give anything of value to) a prescriber to send patients to your pharmacy.
  • Only fill a prescription when you know the prescription is written by a licensed health care provider within the scope of the provider’s practice and is medically necessary.
  • Always make sure a pharmacist is present whenever prescriptions are dispensed to patients.
  • When dispensing and billing for prescription drugs, make sure your inventory matches the NDCs that are dispensed.
  • Any time you fill a controlled substance prescription, take extra steps to assure:
    • The identity of the patient;
    • The identity of the prescriber;
    • The existence of a valid prescriber-patient relationship;
    • A legitimate medical purpose (medical necessity) for the drug prescribed;
    • The validity of the prescription itself (that it is not forged/altered);
    • The diagnosis provided by the prescriber is consistent with the dosage/quantity prescribed; and
    • Evaluation of the risk of misuse/abuse of the drug once dispensed by checking the state’s prescription drug monitoring program.

Your policies and procedures are the best offense to deter deviation from the legal requirements for dispensing prescription drugs.  The Florida Healthcare Law Firm is available to assist you in revamping your policies and procedures to mitigate these risks.  And if you find that you have a problem, don’t wait for law enforcement to come knocking- take proactive steps and contact a health care attorney right away.