$3.7 Million Paid in Settlement of Tricare False Claims Allegations

Friday, September 18, 2015
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

The government found a significant increase in compound drug prescriptions reimbursed by Tricare over the last year.  In April 2015, just four months into the fiscal year, it was already determined that total costs for compound drug prescriptions filled for Tricare recipients were likely to come close to $1 billion.  

The annual budget for the prescription drug benefit is currently set at $8.25 billion.  However, even with such a gratuitous budget, the Defense Health Agency expects it may need to reallocate funds at the end of this year if the current trend on compound drug prescriptions continues.  

For more on this story and the new screening process on compound drug prescriptions Tricare has enacted as a result of the increased reimbursements, click here

With prescription drug costs at an all-time high, the government is cracking down on health care fraud.  This includes the implementation of data mining for fraud detection and prevention.  

It was during one of these routine mining expeditions of reimbursement data that the United States Attorney's Office identified MediMix, a compounding pharmacy in Jacksonville, Florida, as the top-biller of compounding pain prescriptions.  More importantly, upon further investigation, it was found that Ankit Desai, M.D. was the top referring physician for MediMix.  

The significance in the correlation between the two is that, according to reports, Dr. Desai happens to be married to one of the top executives (Senior Vice President) of Medimix.

To read the press release on this story, click here.


Limitations on Physician Referrals.


Health care providers are generally prohibited from referring patients to another medical-related business in which they hold a financial interest of some kind, if there are payments made with federal funds.  

The prohibition on certain physician referrals is established under Section 1395nn, 42 United States Code (otherwise known as the Stark Law).  The Stark Law was specifically enacted to place limitations on physician referrals so as to avoid:

        (1)     conflicts of interests;

        (2)    self-referrals;

        (3)    overutilization of services;

        (4)    increased health care costs;

        (5)    a limit on competition by other medical providers;

        (6)    to prevent ineffective and unsafe treatment; and, ultimately-

        (7)    fraudulent practices.  

Click here for more information on the most common Federal fraud and abuse laws in health care


No Small Price to Pay.


MediMix reached a settlement agreement with the government which has avoided a determination of liability.  However, the Jacksonville-based compounding pharmacy did not get off without a significant penalty.  The settlement will cost MediMix an impressive $3,775,458.

Click here to read more about the government cracking down on what they determine to be "a significant threat to the [Department of Defense] DoD healthcare system." 

The FCA has been highly effective in exposing fraudulent practices of pharmaceutical companies.  Whistleblower cases brought under the FCA have assisted the government in recovering more than $19 billion in stolen funds due to varying pricing, billing and marketing schemes.

To read more about the importance of complying with Stark and other anti-fraud laws, read one of our previous blogs here

If you find yourself in a tricky situation with possible allegations of a FCA violation, it's best to contact an experienced health attorney immediately to properly evaluate your case and inform you of your rights.  


Comments?
Are you currently engaged in a questionable financial relationship?  Do you agree with the law on prohibiting certain referrals in which there is a financial interest?  Why or why not?


Contact Health Law Attorneys Experienced in Representing Pharmacies and Pharmacists.

The Health Law Firm represents pharmacists and pharmacies in DEA, DOH and FDA investigations, qui tam and whistleblower cases, regulatory matters, licensing issues, litigation, administrative hearings, inspections and audits. The firm’s attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Sources:

Department of Justice, The United States Attorney's Office, Middle District of Florida.  Press release.  "United States Settles False Claims Act Allegations Against Jacksonville-Based Compounding Pharmacy."  1 June 2015.  Web.  11 Sept. 2015.

Kime, Patricia.  "Tricare to Start Screening Compound Medications Friday."  Military Times.  A TEGNA Co., 1 May 2015. Web. 10 Sept. 2015.

Rumph, Alan, and Donna Lee Yesner.  "When Referrals And Marriage Don’T Mix: MD, Pharmacy Settle Case."  Report on Medicare Compliance.  Washington: Atlantic Information Services, Inc., 8 June 2015.  Web.  11 Sept. 2015.


About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area.  www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.


Keywords:  False Claims Act defense attorney, FCA, pharmaceutical fraud, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistleblowers lawyer, FCA violations, fraud detection, data mining, financial interest in physician referrals, Stark Law, Department of Defense, DoD, Tricare fraud attorneyhealth attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, qui tam attorney, financial relationship with physician, The Health Law Firm reviews
 
“The Health Law Firm” is a registered fictitious business name of George F. Indest III, P.A. – The Health Law Firm, a Florida professional service corporation, since 1999.
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9/18/2015

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