Florida Compounding Pharmacy Owner Agrees to Pay $4 Million To Settle TRICARE False Claims Allegations

Wednesday, October 26, 2016
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
On October 21, 2016, the part owner of a Florida compounding pharmacy reportedly agreed to pay $4.25 million to settle claims that he knowingly billed federal health care programs for services that were not eligible for reimbursement. The settlement of alleged False Claims Act (FCA) violations with the part owner of Maitland-based QMedRx, follows a similar deal authorities reached with several of his co-owners in September 2016. Maitland is a suburb of Orlando, Florida.

The case stems from an ongoing investigation into allegedly improper claims submitted to the Tricare program, a health care program that provides benefits for U.S. military personnel, their defendants and retired military personnel.

Alleged "Tainted" Claims.

QMedRx, a compound pharmacy which specializes in making custom-compounded (or mixed) prescription drugs, was accused of submitting claims for charges related to compounded prescriptions, from January 2013 to January 2014. The prescriptions were allegedly “tainted” within the meaning of the federal Anti-Kickback Statute (AKS), which bars the exchange of money or goods for any referral in a federal health care program.  The definition of "referral" includes a doctor's order for a prescription for medication or durable medical equipment (DME).

Officials estimates that up to $2 billion of the alleged tainted and unnecessary compound prescriptions were submitted to and paid by the government in its TRICARE investigation. According to officials, they have recovered almost $70 million in fines and penalties related to the investigation over the past 18 months.

"This settlement is yet another example of the continuing commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense health care program," Special Agent in Charge John F. Khin of the Southeast Field Office said in a statement.

Penalties For Participation in Fraud.

The U.S. Attorney’s Office for the Middle District of Florida said it seeks steep penalties and fines for those that allegedly participated in fraud cases like this. In September 2016, the federal government reached a $7.75 million settlement with the other co-owners of QmedRx for their involvement. Click here to read about the settlement.

To learn about fraud against Tricare, click here to read one of my previous blogs.

Click here to read the DOJ's press release in full.
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.


Hale, Nathan. "Fla. Pharmacy Owner To Settle Tricare Fraud Charges For $4M." Law360. (October 21, 2016). Web.

"United States Settles False Claims Act Allegations Against Compound Pharmacy Owners For $7.75 Million." Department of Justice. (October 25, 2016). Web.

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.

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