13 August 2020
Not only the big pharmaceutical companies are exploiting the national health insurance schemes, but also the small payers are doing the same. This is double blow to the tax payer.
Hayley Taff, CEO of Louisiana-based Central Rexall Drugs, admitted her role in a scam in which public-sector employees in New Jersey were recruited to get expensive compound, or specialty prescriptions they did not need and had not been prescribed. Taff and her conspirators learned that Pharmacy Benefits Administrator would reimburse thousands of dollars for a one-month supply of certain compounded medications – including pain, scar, antifungal, and libido creams, as well as vitamin combinations under an insurance scheme. Most New Jersey state and local government officers has this insurance coverage.
Taff’s conspirators designed compounded medications and manipulated the ingredients in the medications in order to obtain high insurance reimbursements. Central Rexall sent compounded medications to patients.
If for some reason the Pharmacy Benefits Administrator stopped covering one combination, Central Rexall would develop a compounded medication with a different combination of ingredients based solely on the insurance reimbursement even though the new combination of ingredients was not medically equivalent to the combination originally prescribed for the patients and without telling the patients or their doctor about the differences.
Central Rexall falsely declared to the Pharmacy Benefits Administrator that it was collecting co-payments. But in fact, they were delivering medication without co-payments as they were making huge profits on their medications.
Central Rexall defrauded New Jersey health benefits programs and other insurers by more than $50 million, U.S. Attorney Craig Carpenito announced.
In a similar scheme a federal grand jury in July indicted four men for their roles in a massive compounded medication fraud and kickback scheme they ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Craig Carpenito announced.
Jeffrey Andrews, 68, Chad Beene, 47, Adam Brosius, 55, and Robert Schneiderman, 77, were charged with conspiracy to commit health care fraud. They used a Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton for their scheme. They created a prescription pad for doctors which had just check boxes for doctors to select a particular compounded formula. There was also a place to select up to a dozen refills and a box authorizing the pharmacy to alter the ingredients itself in case an insurer wasn’t covering a particular compounded medication.
Main Avenue would disseminate the prescription pads to marketers across the country with whom it had contractual relationships. The marketing companies would in turn distribute the prescription pad to telemedicine companies and doctors with whom they had a financial arrangement. After Main Avenue obtained reimbursement from the health insurers, they would pay kickbacks to the marketers. Main Avenue would routinely waive co-payments of the patients to whom they were sending multiple prescriptions. This ensured that the patients would keep the medications whether they needed them or not. On compounded medications alone, Main Avenue received over $34 million in reimbursements from health care benefit programs. Approximately $8 million of that total was paid by federal payers.
Department of Justice, U.S. Attorney’s Office, District of New Jersey reported.