U.S. Attorney Richard W. Moore, of the Southern District of Alabama, announced Friday that Fairhope pharmacy owners Christopher and Marti Burgess, of Heritage Compounding Pharmacy, LLC, had agreed to pay over $1.9 million to resolve allegations that they violated the False Claims Act (FCA) stemming from the payment of illegal kickbacks and the implementation of a refill scheme of medically unnecessary pain creams.
“The U.S. Attorney’s Office is committed to holding health care providers responsible who manipulate and abuse the TRICARE program in order to seek financial gain and who lack regard for TRICARE patients,” Moore said in a news release.
In a complaint filed on Oct. 29, 2019, the government alleged that between Jan. 1, 2013 to May 1, 2015, Heritage and its owners submitted false claims to TRICARE, a federally funded health care program for military personnel and their families. The government alleged that the defendants, through their “sales representatives,” paid physicians in the form of extravagant dinners and other entertainment perks to induce prescribing.
Heritage employed a sales force to strategically market pre-printed and pre-formulated topical pain cream prescriptions to prescribers in military populated territories such as Kansas City, Southwest Missouri, and Topeka/Manhattan. Many of these creams contained the Schedule III controlled substance Ketamine.
Per the complaint, taking advantage of TRICARE’s per ingredient reimbursement policy, without regard to patient needs, Heritage implemented a high dose refill scheme costing TRICARE over $27,000 per claim for medically unnecessary pain creams prescribed without a valid physician-patient relationship. The local pharmacy shipped large quantities of pre-formulated medication to TRICARE beneficiaries. The U.S. Department of Veterans Affairs (CHAMPVA) also suffered losses from this fraud scheme.
“The Defense Criminal Investigation Service will tirelessly pursue unscrupulous companies intent on defrauding and cheating TRICARE, the healthcare system serving our military and veterans. DCIS appreciates the U.S. Attorney’s Office requiring the owners of Heritage Compounding Pharmacy to remunerate TRICARE for prescriptions that were not medically necessary or even utilized by many of the beneficiaries,” stated Special Agent in Charge Cynthia A. Bruce, DCIS, Southeast Field Office.
The investigation and litigation were conducted by Moore’s office, DCIS and CHAMPVA. The FCA claims settled are allegations only, and there has been no determination of liability.
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