By: Jacqueline Bain
Monty Ray Grow was a defensive back on the Florida Gators’ football team from 1990 until 1993. He contracted to play for the Kansas City Chiefs in 1994 and then for the Jacksonville Jaguars in 1995 and 1996. On February 5, 2018, he was convicted by a federal jury in Miami for his chief role in a massive healthcare marketing scheme designed to defraud Tricare.
Tricare is a health benefit program that provides civilian benefits for U.S Armed Forces military personnel, retirees, their dependents, and some military reservists. Tricare is a Department of Defense Program.
In September 2014, Grow entered into an agreement with a compounding pharmacy in Pompano Beach, Florida, wherein the pharmacy would pay Grow’s marketing company a commission equal to fifty percent (50%) of what the pharmacy netted in Tricare reimbursement from Grow’s referral of Tricare beneficiaries to the pharmacy. (Later on, Grow became an employee of the pharmacy.) Grow then used his commission to offer and pay recruiters to convince Tricare beneficiaries to use this pharmacy. Additionally, Grow offered and paid Tricare beneficiaries themselves to use this pharmacy.
On February 5, 2018, a jury in the United States District Court, Southern District of Florida convicted Grow of the following offenses against the United States:
- 18 USC 371 (Conspiracy to Pay and Receive Health Care Kickbacks);
- 18 USC 1347 (Health Care Fraud);
- 18 USC 1349 (Conspiracy to Commit Health Care Fraud and Wire Fraud);
- 18 USC 1947 (Money Laundering);
- 42 USC 1320a-7b(a) (Payment of Kickbacks); and
- 42 USC 1320a-7b(b) (Receipt of Kickbacks).
Grow’s sentencing is scheduled for April 16, 2018 in Miami. He faces up to 20 years in prison.
Healthcare Marketing Lesson: What can we learn from Grow’s convictions?
First, commissions based compensation for marketers, even employed marketers, is a risky business. Grow was convicted of both receiving kickbacks from the pharmacy and for paying kickbacks. The jury was not given any instructions about whether Grow’s actions fit into a safe harbor of the Anti-Kickback Statute, or attempted to fit in any safe harbor. The fact that neither he nor any of the persons receiving his payments fit into a safe harbor means the jury wasn’t instructed on the safe harbors at all. Thus, there was no explanation to the jury of what it means to be a bona fide employee and, one can only guess, no analysis of whether Grow was a bona fide employee of the pharmacy. Further, there was no instruction to the jury as to whether Grow attempted to comply with the personal services and management contract safe harbor. Not fitting squarely within a safe harbor opens a marketer up to scrutiny that the marketer would otherwise avoid.
Second, the Federal Government can use more than just the Anti-Kickback Statute to prosecute offenses in health care businesses. The simple act of not involving Medicare in a scheme does not completely remove the Federal Government’s jurisdiction. For example, 18 USC 1347 (Health Care Fraud) applies regardless of whether a patient’s care is reimbursed by Medicare or any commercial payor, provided that the payor’s business impacts interstate commerce. Moreover, in the event that prosecutors are unable to establish healthcare fraud beyond a reasonable doubt, they may still be able to prove offenses like wire fraud and money laundering. (This point translates over to States as well— the State of Florida can use more than just the Patient Brokering Act to curb offenses against patients and insurance companies.)
There are all sorts of pieces of this case that are missing from the record. We have no way of knowing whether, for instance, Grow made any attempt to comply with the laws, or whether any of his apparent compliance measures were sincere or sham, or whether Grow obtained written advice of counsel prior to engaging in the marketing business.
The healthcare marketing space is constantly evolving, and doing what has always been done just won’t cut it anymore. Moreover, healthcare marketing clients who tell their attorneys just to put some contract together without being fully educated about the laws, options and risks are themselves assuming an unreasonable risk. If you choose to market in the healthcare space, be sure you are apprised not only on the laws, but also on how the laws are interpreted.