Pharmacy Alert: Enforcement of Foot Bath Schemes

The government increasingly has its sights set on various healthcare frauds that result in major financial losses to its healthcare programs such as Medicare, Medicaid, and TRICARE. Recently, the expanded enforcement efforts have included the foot bath schemes which first appeared on the government’s radar as early as 2019. For a time, however, due to the COVID-19 pandemic, and other enforcement actions involving significant monetary recoveries, such as CGx testing, their efforts regarding foot bath fraud enforcement waned. However, that may change going forward as the government is once again steadily renewing its efforts to recoup the losses from a host of medically unnecessary procedures and/or prescriptions that have been billed to government-sponsored insurance programs in recent years, and especially during the COVID-19 pandemic. Fraud associated with medically unnecessary foot bath prescriptions has resulted in major financial loss, and therefore, could be a focus of various enforcement initiatives.

In what has become known as the foot bath scheme, various medications are prescribed purporting to treat and/or prevent several foot conditions including diabetic ulcers, bone and foot infections, ingrown toenails, pitted keratolysis, and cellulitis. The fraud is carried out when Medicare and/or other government healthcare programs are billed for very large quantities of these prescription antibiotics and/or antifungal drugs to be dissolved in foot baths. Drugs including Ciprofloxacin, Clindamycin, Tobramycin, and Vancomycin are often associated with the foot bath scheme. 

These prescription medications are costing the government between $6,000 – $18,000 per patient per month while providing no medically ascertainable benefit to patients. Moreover, the drugs prescribed come in many different forms ranging from capsules, injectables, powders, and creams. Not only are many of these prescription medications non-soluble in water, but they may cause harm and/or lead to antibiotic resistance.

Most often, this scheme is perpetrated by marketing companies who prey on elderly Medicare beneficiaries. They seek out and market to beneficiaries by promoting free foot bath units. However, to receive a free unit, the individuals are required to provide their health insurance information. In turn, that information is then forwarded to a prescriber to obtain a prescription for medically unnecessary antibiotics and/or antifungals. Thereafter, those individuals are enrolled in a monthly auto-ship program that they cannot opt out of receiving. These patients are rarely seeing a podiatrist and/or any other doctor to obtain these prescriptions and medication shipments. Instead, the marketers forward the prescriptions to various pharmacies they contract with to be filled and auto-shipped to these unsuspecting individuals.

Previously, the government focused its enforcement on the prescribing physicians, generally podiatrists, who prescribed large quantities of these medically unnecessary prescription drugs for the sole purpose of increasing profits, often by taking kickbacks from marketers in exchange for writing these prescriptions. By way of example, in November 2021, the government indicted a podiatrist who was involved in the foot bath fraud by not only writing medically unnecessary prescriptions, but also by filling them in his in-office pharmacies and dispensaries.

The government, however, may now be shifting its enforcement efforts to include independently owned pharmacies that were/are filling prescriptions for foot bath medications and shipping them to a large number of beneficiaries across the country. The government’s theory of liability focuses on the pharmacies’ knowledge, and the red flags the pharmacists ignore when filling medically unnecessary prescriptions for large quantities of expensive antibiotics and/or antifungals.

Notably, Medicare has been issuing alerts and warning against using prescription antibiotics or antifungal drugs in foot baths since 2019. As such, it is the government’s position that pharmacists were or should have been on notice of the scheme, and in turn, should have been flagging suspicious prescriptions for foot bath drugs and refusing to fill same.

The government is also positing that pharmacies are ignoring open and obvious red flags when filling these prescriptions. Red flags include, but not limited to, geographic abnormalities (where patients are located very far from their prescribing physicians), filling a large quantity of medications for off-label indications, and/or filling prescriptions for clients who had no previous relationship with the pharmacy.

Of particular note, because marketers are typically involved in this fraud as the middle-men who funnel the prescriptions first to the prescribers and then to the pharmacies, the government will undoubtedly focus its investigations on potential violations of the Anti-Kickback Statute. This is problematic for many pharmacies because marketers, who they typically employ as independent contractors, often have problematic fee structures and/or service agreements that may violate the Anti-Kickback Statute.

There are many areas of potential exposure and/or liability when it comes to filling prescription medications that have already been flagged in the foot bath fraud. If you own, manage, and/or operate a pharmacy business, it is critical that you evaluate your filling practices and self-audit your prescription claims data to ensure that your pharmacy is not improperly filling prescriptions in furtherance of the foot bath schemes.

If you suspect you have fallen victim to such schemes, you should immediately contact an experienced attorney to assess any potential liability and discuss appropriate next steps. Frier Levitt’s White Collar Defense and Government Investigations Team stands ready to respond to regulatory inquiries and criminal investigations, and if it becomes necessary, to put forth a rigorous criminal defense on your behalf.

Additionally, even if your pharmacy is not implicated in the above, you must ensure that all your employee agreements, specifically those with marketers and/or sales representatives, comply with the Anti-Kickback statute. Frier Levitt attorneys have extensive experience drafting contractual agreements for pharmacies, including developing arrangements that eliminate potentially problematic fee structures.