Florida Pharmacy Hit With FCA Suit for Illegal Kickback Scheme Targeting Tricare

George IndestBy George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On October 19, 2018, the federal government filed suit against a Florida pharmacy for allegations of illegal kickback schemes involving industry marketers. The U.S. Attorney’s Office for the Middle District of Florida alleges that Oldsmar Pharmacy was involved in illegal schemes that resulted in the federal Tricare program paying more than $21 million in reimbursements for prescriptions and False Claims Act (FCA) violations.

Suit Filed on Behalf of The Defense Health Agency (DHA).

The federal government filed the suit on behalf of the U.S. Department of Defense, including its Defense Health Agency (DHA). The DHA administers the Tricare program, which provides health insurance for active duty military personnel, military retirees and their dependents.

The government is seeking treble damages, civil penalties and restitution, based on its claims that the pharmacy submitted claims to Tricare for reimbursement for prescriptions of costly compound medications. The government claims that they knew were fraudulent under the FCA because of the kickbacks paid to marketers.

On October 18, 2018, the U.S. Department of Justice (DOJ) released a press release announcing the involvement of three military members in the scheme as sales representatives for Centurion Compounding, Inc. All three were indicted for paying kickbacks to Tricare beneficiaries to obtain prescriptions for compounded medications. You can learn more about this in the section below.21

Click here to read the DOJ’s press release.

Former Whistleblower Suit.

The lawsuit against Oldsmar Pharmacy and company President, Larry Smith, stems from a whistleblower suit filed in 2015 by Jennifer Silva and Jessica Robertson, former employees, according to the complaint.

The schemes allegedly occurred between September 2014 and February 2015 by Smith and Oldsmar and different pharmacy services administration organizations.

Tricare Reimbursements and Kickback Schemes.

According to the complaint, Centurion Compounding Inc., hired sales representatives as independent contractors who marketed costly compound medications to Tricare beneficiaries. Patients recruited by the sales reps were directed to send their prescriptions to Centurion, which then directed them to Oldsmar pharmacy.

From November 2014 to February 2015, Tricare paid about $18 million for approximately 4,000 claims for compound prescriptions as part of the kickback scheme, according to the federal government. Oldsmar paid Centurion more than $6.1 million in kickbacks, some of which was distributed to the individual sales representatives involved.

Additionally, prosecutors claim that pharmacy President, Larry Smith, entered into a second kickback scheme with several marketing companies. These companies published online advertisements offering free consultations for pain creams via telemedicine, without ever seeing a physician in person. In return, Oldsmar Pharmacy paid a 41 percent kickback to the marketers, the complaint alleges.

Click here to read the complaint in full.

The suit brings forward false or fraudulent claims; recovery of payments made by mistake by Tricare; and unjust enrichment. To learn more, click here to read one of my prior blogs on a similar case.

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 also represents both plaintiffs (whistle blowers or relators) and defendants in False Claims Act (whistle blower or qui tam) cases. 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:

Hale. Nathan. “Fla. Pharmacy Hit With False Claims Suit Over Kickbacks.” Law360. (October 19, 2018). Web.

Stringini, Mary. “St. Pete doctor pleads guilty to receiving kickbacks, BMW in $5.3 million pharmacy conspiracy.” ABC Action News. (March 8, 2018). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law is an attorney with 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 Avenue, Altamonte Springs, Florida 32714, Phone: (407) 331-6620.

KeyWords: Pharmacy legal representation, False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations representation, pharmacy representation, pharmacy defense attorney, pharmacist representation, pharmacist defense lawyer, TRICARE fraud attorney, The Health Law Firm, fraud investigations representation, health care fraud defense lawyer, compounding pharmacy lawyer, prescription reimbursement leagl representation, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2019 The Health Law Firm. All rights reserved.

Florida-Based Compounding Pharmacy Violated False Claims Act by Overcharging Tricare, Feds Claim

9 Indest-2008-6By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 3, 2017, a compounding pharmacy based in Tampa, Florida, charged Tricare at least 2,000 percent more for drugs than it charged cash payers, according to the government. Teh government claimed that the Florida pharmacy acted in violation of the False Claims Act (FCA), as it intervened in a whistleblower’s suit.

The government claimed that RS Compounding LLC and its owner, Renier Gobea, knew it was illegal to provide discounts to cash payers but not the government. However, the company still went through with a scheme to do it, the partial-intervention complaint says. Prosecutors are seeking triple damages and civil penalties.

The False Claims Act provisions in Tricare cases are a little different from those in Medicare cases. In Tricare cases, recovery can be had for any “fraud, waste or abuse.” It is not limited to just fraud or false claims. Abusive claims can lead to recoveries by the government and by whistle blowers.

The Whistleblower Suit.

The suit was brought forward by former sales representative McKenzie Stepe. She filed her whistleblower suit in December 2013. Stepe’s suit alleges that RS Compounding used the average wholesale price in place of the lower acquisition cost when reporting what it paid for drugs. Additionally, the company then reported the usual and customary cost of the compounded drug to be equal to the average wholesale price, and as a result the government paid more for the drug that it needed to when reimbursing RS Compounding, the complaint says.

Between January 1, 2012, and January 31, 2014, the company was charging cash customers less without telling the government, according to the complaint.

Click here to read the complaint in full.

Unfortunately, this is not the first time a Florida pharmacy has allegedly defrauded government programs such as Tricare through compounding activities. The Tricare program is a health care program that provides benefits for U.S. military personnel, their defendants and retired military personnel.

Click here to read one of my prior blogs on a similar case against Tricare.

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:

Kass, Dani. “Fla. Compounding Pharmacy Ripped Off Tricare, Feds Claim.” Law360. (July 3, 2017). Web.

“Florida Compounding Pharmacy Ripped Off Tricare.” Law of Compounding Medication. (July 4, 2017). 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.

KeyWords: False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2017 The Health Law Firm. All rights reserved.

 

Florida-Based Compounding Pharmacy Violated False Claims Act by Overcharging Tricare, Feds Claim

9 Indest-2008-6By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 3, 2017, a compounding pharmacy based in Tampa, Florida, charged Tricare at least 2,000 percent more for drugs than it charged cash payers, according to the government. Teh government claimed that the Florida pharmacy acted in violation of the False Claims Act (FCA), as it intervened in a whistleblower’s suit.

The government claimed that RS Compounding LLC and its owner, Renier Gobea, knew it was illegal to provide discounts to cash payers but not the government. However, the company still went through with a scheme to do it, the partial-intervention complaint says. Prosecutors are seeking triple damages and civil penalties.

The False Claims Act provisions in Tricare cases are a little different from those in Medicare cases. In Tricare cases, recovery can be had for any “fraud, waste or abuse.” It is not limited to just fraud or false claims. Abusive claims can lead to recoveries by the government and by whistle blowers.

The Whistleblower Suit.

The suit was brought forward by former sales representative McKenzie Stepe. She filed her whistleblower suit in December 2013. Stepe’s suit alleges that RS Compounding used the average wholesale price in place of the lower acquisition cost when reporting what it paid for drugs. Additionally, the company then reported the usual and customary cost of the compounded drug to be equal to the average wholesale price, and as a result the government paid more for the drug that it needed to when reimbursing RS Compounding, the complaint says.

Between January 1, 2012, and January 31, 2014, the company was charging cash customers less without telling the government, according to the complaint.

Click here to read the complaint in full.

Unfortunately, this is not the first time a Florida pharmacy has allegedly defrauded government programs such as Tricare through compounding activities. The Tricare program is a health care program that provides benefits for U.S. military personnel, their defendants and retired military personnel.

Click here to read one of my prior blogs on a similar case against Tricare.

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:

Kass, Dani. “Fla. Compounding Pharmacy Ripped Off Tricare, Feds Claim.” Law360. (July 3, 2017). Web.

“Florida Compounding Pharmacy Ripped Off Tricare.” Law of Compounding Medication. (July 4, 2017). 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.

KeyWords: False Claims Act defense attorney, FCA legal counsel, Anti-Kickback Statute (AKS) defense attorney, legal representation for allegations of violating Anti-Kickback Statute, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2017 The Health Law Firm. All rights reserved.

 

Federal Judge Refuses to Dismiss Florida Compounding Pharmacy’s FCA Suit

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On December 4, 2017, a Florida federal judge refused to dismiss the federal government’s False Claims Act (FCA) suit against a compounding pharmacy. RS Compounding LLC and its owner, Renier Gobea, are accused of overbilling Tricare for prescriptions. The federal judge refused the dismissal on the grounds that the government had sufficiently backed its allegations against both the company and its owner.

Judge Finds Claims Are Sufficiently Stated.

According to U.S. District Judge Virginia M. Hernandez Covington, the government adequately pled its claims that RS and Gobea had knowingly charged Tricare prices well in excess of what it charged cash payors for substantially the same drugs. “The United States’ amended complaint in partial intervention sufficiently states claims for unjust enrichment and violation of the FCA,” the judge said.

The government had also adequately backed its allegations that RS knew it had been overpaid but had made no attempt to refund the difference to Tricare, according to the judge.

Additionally, Judge Covington rejected the owner’s argument that claims against him personally should be dropped from the case pointing to his “extensive involvement” in RS’s operations and his profit-taking from the company.

The Relator’s FCA Suit.

The relator McKenzie Stepe, a former RS sales representative, originally filed her complaint in December 2013. She accused RS and Gobea of charging Tricare, Medicare and Medicaid excessively high rates for certain compounded drugs. Those drugs, all mixtures containing the anesthetic ketamine, were charged to the government at prices of between $400 and $3,000 per bottle when the equivalent rate for an uninsured cash payer was between $15 and $45 a bottle.

The relator’s complaint was dismissed in November 2017, based on what Judge Covington said was a lack of firsthand knowledge to support her claims, but with leave to file an amended complaint by December 7, 2017.

To read the court’s order in full, click here.

To learn about a similar case involving a Florida compounding pharmacy, click here to read one of my prior blogs.

 

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:

Wilson, Daniel. “Fla. Compounding Pharmacy Can’t Escape Tricare FCA Suit.” Law360. (December 4, 2017). Web.

Raymond, Nate. “Florida compounding pharmacy must face U.S. fraud suit – judge.” Reuters. (December 4, 2017). Web.

KeyWords: False Claims Act defense attorney, FCA legal counsel, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews, legal representation for pharmacies, legal representation for pharmacists, health law defense attorney, legal representation for health care professionals

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

 

Federal Judge Refuses to Dismiss Florida Compounding Pharmacy’s FCA Suit

10 Indest-2008-7By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On December 4, 2017, a Florida federal judge refused to dismiss the federal government’s False Claims Act (FCA) suit against a compounding pharmacy. RS Compounding LLC and its owner, Renier Gobea, are accused of overbilling Tricare for prescriptions. The federal judge refused the dismissal on the grounds that the government had sufficiently backed its allegations against both the company and its owner.

Judge Finds Claims Are Sufficiently Stated.

According to U.S. District Judge Virginia M. Hernandez Covington, the government adequately pled its claims that RS and Gobea had knowingly charged Tricare prices well in excess of what it charged cash payors for substantially the same drugs. “The United States’ amended complaint in partial intervention sufficiently states claims for unjust enrichment and violation of the FCA,” the judge said.

The government had also adequately backed its allegations that RS knew it had been overpaid but had made no attempt to refund the difference to Tricare, according to the judge.

Additionally, Judge Covington rejected the owner’s argument that claims against him personally should be dropped from the case pointing to his “extensive involvement” in RS’s operations and his profit-taking from the company.

The Relator’s FCA Suit.

The relator McKenzie Stepe, a former RS sales representative, originally filed her complaint in December 2013. She accused RS and Gobea of charging Tricare, Medicare and Medicaid excessively high rates for certain compounded drugs. Those drugs, all mixtures containing the anesthetic ketamine, were charged to the government at prices of between $400 and $3,000 per bottle when the equivalent rate for an uninsured cash payer was between $15 and $45 a bottle.

The relator’s complaint was dismissed in November 2017, based on what Judge Covington said was a lack of firsthand knowledge to support her claims, but with leave to file an amended complaint by December 7, 2017.

To read the court’s order in full, click here.

To learn about a similar case involving a Florida compounding pharmacy, click here to read one of my prior blogs.

 

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:

Wilson, Daniel. “Fla. Compounding Pharmacy Can’t Escape Tricare FCA Suit.” Law360. (December 4, 2017). Web.

Raymond, Nate. “Florida compounding pharmacy must face U.S. fraud suit – judge.” Reuters. (December 4, 2017). Web.

KeyWords: False Claims Act defense attorney, FCA legal counsel, TRICARE false claims legal defense attorney, TRICARE physician representation, legal representation violating False Claims Act, pharmaceutical fraud lawyer, compounding pharmacy attorney, fraudulent practices of pharmaceutical companies, whistle blower lawyer, FCA violations, fraud detection, financial interest in physician referrals, TRICARE fraud attorney, health attorney, defense attorney, The Health Law Firm, health law firm, fraud investigations, consumer reports of health care fraud, conflict of interest in physician referrals, compound medication prescriptions, compounding pharmacy lawyer, prescription reimbursement, legal defense of military physicians, legal defense of TRICARE providers, attorney reviews of The Health Law Firm, Veterans Administration (VA) physician defense attorney, The Health Law Firm attorney reviews, legal representation for pharmacies, legal representation for pharmacists, health law defense attorney, legal representation for health care professionals

“The Health Law Firm” is a registered fictitious business name of and a registered service mark of The Health Law Firm, P.A., a Florida professional service corporation, since 1999.
Copyright © 2018 The Health Law Firm. All rights reserved.

 

Go to Top