Paying kickbacks for medically unnecessary and expensive compound medications violates the Anti-kickback Law and knowingly submitting fraudulent claims for reimbursement violates federal and state false claims acts
Compliance Perspective – Fraud
Policies/Procedures: The Compliance and Ethics Officer with the Administrator will review policies and procedures regarding the protocol and documentation for correctly prescribed compound medications.
Training: The Compliance and Ethics Officer with the Consulting Pharmacist will ensure that staff are trained regarding the protocol and documentation needed for obtaining correctly prescribed compound medications.
Audit: The Compliance and Ethics Officer with the Consulting Pharmacist will conduct an audit to determine if compound medications being used by residents have been properly prescribed based on a individual resident need.
A New Jersey man recently admitted to defrauding New Jersey state health benefits programs involving millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions. The man was one of several owners of a company formed to market prescription compounded medications.
From May 2015 through February 2016, the defendant and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications.
These conspirators discovered that certain compound medication prescriptions—including pain, scar, and antifungal creams along with vitamin combinations—were reimbursed for thousands of dollars for a one-month supply.
The defendant and the other conspirators entered into an agreement that paid them a percentage of the amounts paid to compounding pharmacies for prescriptions they secured. They recruited public employees, offered them hundreds of dollars per month, obtained their insurance and personal information, and convinced them to acquire prescription compounded medications without having a medical examination.
As a result of this scheme, New Jersey paid more than $2 million in fraudulent claims for compound medications and the defendant received $150,398 for his role in the scheme.
