In addition to recent changes relating to network contracting, reimbursement, and coverage for compound medications for TRICARE beneficiaries, the Department of Defense (DOD) has recently launched a large-scale initiative to conduct investigations of compounding pharmacies. For several months, the DOD, Department of Justice, the FBI, and other Federal agencies have been conducting civil and criminal investigations of various pharmacies and compound marketing companies relating to TRICARE billing and marketing practices. These investigations have focused on marketing practices, validity of prescriptions, and financial relationships with prescribers.
However, in the recent weeks, the DOD has stepped up its actions, and has announced intentions to expand its audits and investigations of such entities. In late April 2015, the DOD announced that it was instituting suspension of payments to some pharmacies based on “suspicious billing practices,” and starting on April 24, 2015 began sending letters to certain pharmacies indicating that TRICARE payments would be suspended based on suspicion that the pharmacy had filled prescriptions written by a physician who may not have established a valid physician-patient relationship with the beneficiary.
In addition, on May 11th, the DOD announced a new policy shift, and indicated that it would be initiating an audit of “all compounding claims in the last 12 months to determine if recoupment is justified in cases where violations of state or federal law resulted in inappropriate reimbursement.” In addition to recoupment, the alert indicated that the Program Integrity office of the DOD, in consultation with the Office of General Counsel, would refer all cases of payment suspension of claims to the relevant State licensing boards for their awareness and action.
Finally, the DOD, in conjunction with other Federal law enforcement agencies (such as the FBI, NCIS, and Army CID), has engaged in targeted and in depth criminal investigations of pharmacies and marketers relating to TRICARE claims. These Federal agencies are conducting targeted investigations, focusing on certain specific marketing groups and pharmacies, specifically targeting the Florida area. These investigations are focusing on potential false claims, improper auto-refill programs, and potential kickback relationships, and as part of the criminal investigations, agents are interviewing pharmacy owners, pharmacy employees, marketing representatives, patients and prescribing physicians.
In the wake of these recent events, it is important for pharmacies to have the right attorney, not just the “convenient” attorney. While any attorney can do general criminal defense or representation, these types of investigations involve complex healthcare and pharmacy issues, and require counsel with detailed knowledge and experience in TRICARE and healthcare law. Frier Levitt is actively involved in representing dozens of pharmacies across the country in connection with ongoing civil and criminal investigations, as well as criminal trials. We have assisted Florida pharmacies in responding to investigation requests involving compound marketers, and have experienced criminal defense attorneys on staff. While our attorneys are licensed in seven States, we routinely become admitted “pro hac vice” in courts across the country, and can work with local counsel to assist pharmacies through these complex cases. If you have been contact by Federal investigators or have received a subpoena or search warrant, we would urge you to contact us today, because the way in which these matters are handled from the outset can impact not only the outcome of the case, but may also lead to broader legal and regulatory ramifications. Simply put, the choice of strategy in these investigations requires nuanced understanding of the complex regulatory backdrop, and any legal strategy must be delicately reconciled with experienced regulatory counsel to avoid positions that could hurt the pharmacy and its principals.
