A recent case highlights the importance of ordering and dispensing prescription medications in compliance with federal and state rules and regulations related to kickback, telehealth, and preprinted prescription pads. Specifically, in September, two executives of a New Jersey pharmacy pleaded guilty to conspiracy to commit healthcare fraud and violate the Anti-Kickback Statute.
In the $33 million kickback scheme, the mail-order pharmacy provided pre-printed prescription pads to marketers containing formulas for compound medications that would result in substantial reimbursement from payors, including Medicare. The prescription pads included an option for each prescriber to also grant the pharmacy permission to substitute medications where the original formula was not covered by the patient’s insurance. The marketers were tasked with distributing the prescription pads to telemedicine companies and prescribers, and were subsequently compensated by the pharmacy for the prescription orders generated by their efforts.
In addition to the kickbacks paid to marketers, most doctors who submitted orders using these pads claim to have used telehealth, but had never spoken with or otherwise examined the patient. When prescribers prescribe through telehealth, they must comply with applicable state and federal requirements for issuing valid prescriptions, including establishing bona-fide prescriber-patient relationships. In many states, pharmacists have a corresponding responsibility to ensure that prescriptions are validly issued before they may be dispensed. However, despite patient complaints that they had never met the prescriber, pharmacy employees convinced patients to keep the medications by waiving any required copayment. The pharmacy then used money orders to facilitate an illusion that the patients were remitting copayments to avoid scrutiny from PBMs for waiving patient responsibility. Separately, this matter reinforces past enforcement trends related to the misuse of preprinted prescription pads, which are commonly prohibited by state boards of pharmacy.
Creating and implementing practical but compliant marketing plans can be complex and can implicate various federal and state laws. Pharmacies are encouraged to contact competent healthcare counsel to seek advice in developing and refining these practices to avoid scrutiny. Failure to comply with applicable rules and regulations related to marketing, prescribing, and dispensing can expose pharmacies to not only disciplinary action from various regulatory bodies, but may make them vulnerable to criminal lability. Contact Frier Levitt for a review of your marketing practices, including your compensation methodologies and the use of preprinted prescription order forms.
