Pharmacy Executives and Pharmacists Sentenced to Prison for Health Care Fraud

The U.S. Attorney for the Western District of Michigan announced on August 27, 2015 that the former CEO of Kentwood Pharmacy pled guilty to conspiracy to commit health care fraud, and was sentenced to ten years in prison. The guilty plea related to billing Medicare Part D Plans, Medicaid, and private insurance plans for misbranded and adulterated drugs. In addition to the CEO, a total of 18 pharmacy employees were convicted of criminal offenses, including felony convictions of six licensed pharmacists. The sentences for the pharmacy defendants included 14 years in prison for the pharmacy’s Vice President of Sales, and 6 years imprisonment for the Pharmacist-in-Charge.

The pharmacy collected more than $79,000,000.00 for adulterated and misbranded drugs that were sent to patients at more than 800 nursing and adult foster care homes from 2006 to 2010. The conduct in question resulted from a variety of improper pharmacy practices including, returning drugs to pharmacy stock in a manner that caused cross-contamination of the drugs, improper labeling of drugs, placement of different drug dosages into stock bottles, and the placement of drugs into incorrect stock bottles.

 U.S. Attorney Patrick Miles said, “The public must be able to rely on those who own and run pharmacies to operate in compliance with the federal and state laws regulating the handling, packaging, and distribution of drugs. When health care providers violate regulations meant to protect the public and then bill public and private health care insurers for such drugs, my office will pursue serious charges, including health care fraud.”

The investigation that lead to the pleas and convictions involved multiple agencies including the FDA, HHS-OIG, FBI, DEA, IRS, the Michigan Attorney General’s Office and the Michigan State Police. The investigation of was triggered by confidential tips.

The sentences meted out reflect the seriousness of the crimes committed by various pharmacy stakeholders, and also illustrate the risks that pharmacy owners and pharmacists take when deviations from practice standards occur.

Pharmacy owners and pharmacists are well advised to have robust policies and procedures in place and maintain a constant vigil to assure compliance with the myriad of laws and regulations governing the practice of pharmacy. Failure to properly bill for medically necessary services is frequently the impetus that triggers investigations. Frequently, investigations occur because of complaints or tips from dissatisfied customers or disgruntled employees, and in some circumstances competitors.

Frier Levitt provides compliance advice to pharmacies that help minimize the risk of regulatory scrutiny. Our dedicated team of over 20 attorneys focuses almost exclusively on healthcare topics, providing our firm with unparalleled expertise in the pharmacy space. We offer a variety of compliance programs that can assist pharmacies in developing policies and procedures to help avoid future problems. Contact us today to speak to an attorney.

Share: