On July 15th 2015, the U.S. Attorney for the Middle District of Florida announced an $8 million settlement with a Jacksonville-based compounding pharmacy for knowingly billing the government for improper and “medically unnecessary” compounded pain prescriptions. The settlement involved alleged violations of the Federal False Claims Act.
The alleged behavior occurred between February and April of 2015 with the government taking the position that the pharmacy submitted claims to the Federal government for compounded medications that were not medically necessary, and were written by physicians that had never actually seen the patients. Although not specifically stated in the government’s press release, the suspect prescription potentially resulted from “telemedicine” arrangements. While digital health may exist separate and independent from third party marketing companies, in the compounding industry, telemedicine often involves arrangements that channel patients to a physician through a marketing company. Such marketing companies often connect patients, doctors and pharmacies. The healthcare system will enjoy benefits from proper telemedicine, but such relationships must follow a complex maze of federal and state laws. Where arrangements involve physicians performing cursory history and physical exams over the phone, generating a prescriptions, that are ultimately directed to a pharmacy affiliated with the marketing company, problems abound. There exists a variety of state laws that potentially affect telemedicine, and the generation of prescriptions from such encounters. Pharmacies operating in multiple states are well advised ensure compliance with applicable state laws, as well as Pharmacy Benefit Managers’ Manuals.
Various U.S. Attorneys’ Offices have communicated to Frier Levitt that pursuit of compounding pharmacies that are improperly reimbursed by Tricare is an extremely high priority for the government. This sentiment is supported in this recent press release, as evidenced by particular quotes by government officials. U.S. Attorney A. Lee Bentley, III stated, “This case was developed as part of a broader effort by our office to identify and target unscrupulous compounding pharmacies” and “[s]ince the beginning of the year, we have been focusing on pharmacies that have abused the TRICARE program and defrauded the government.” Special Agent in Charge John F. Khin opined, “This settlement highlights another step forward by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense health care program.” Such quotes should inspire pharmacies to evaluate any telemedicine relationships they may be part of, or receive prescription from.
Multiple agencies participated in the investigation including, the Defense Criminal Investigative Service, the Federal Bureau of Investigation, the Defense Health Agency Program Integrity Office, and United States Attorney Office for the Middle District of Florida.
Frier Levitt has recently become involved in a number of client matters related to compound prescriptions resulting from telemedicine encounters. In some circumstance pharmacies have been charged with professional misconduct by state board of pharmacies, while others are subject to Federal investigations and PBM recoupments.
Telemedicine has gained widespread acceptance within the medical community, and many states have passed parity laws requiring that physicians be paid for such services in a manner commensurate with in-office visits. However, pharmacies must be particularly vigilant when filling telemedicine prescriptions or entering into relationships with telemedicine companies. Pharmacies have a duty to assure that prescriptions are the result of a Bona Fide physician patient relationship within the meaning of federal and state laws, as well as PBM manuals.
If you are contemplating integrating a telemedicine program into your pharmacy practice, or you believe you may be subject to investigations related to telemedicine, contact Frier Levitt for guidance.
