Telemedicine pharmacy arrangements continue to be of significant interest to fraud enforcement. A 2018 case in which four individuals and seven companies were indicted ended in a month-long jury trial of one of the individuals, a Florida pharmacy owner. The federal jury trial in the billion-dollar telehealth pharmacy fraud scheme resulted in conviction on 22 counts of mail fraud, conspiracy to commit health care fraud and introduction of misbranded drugs into interstate commerce. Sentencing in the case is set for May of 2022. Other co-conspirators entered plea agreements along the way, pleading guilty to various charges including felony conspiracy to commit health care fraud, felony misbranding, conspiracy to commit wire fraud, and fraudulent telemarketing of dietary supplements, skin creams and testosterone. Many of these are still awaiting sentencing, also expected to be scheduled sometime in 2022.
The scheme involved several individuals, compounding pharmacies and telemarketers engaged in a conspiracy to commit health care fraud, mail fraud and introducing misbranded drugs into interstate commerce. Peter Bolos, along with two other co-conspirators, owned and operated Synergy Pharmacy in Palm Harbor, Florida. Working with HealthRight, a telemarketer, the co-conspirators generated prescriptions for drugs such as pain creams, scar creams, and vitamins. Using the HealthRight telemarketing platform, they would call consumers and deceive them into providing their personal insurance information and accept the drugs. HealthRight then communicated the prescription requests to physicians who authorized the prescriptions without ever interacting with the patients, and paid those physicians for issuance of the prescriptions. Through this scheme, the co-conspirators were able to solicitate insurance coverage information from consumers across the county for prescription pain creams, fraudulently obtain prescriptions, mark up the prices of the drugs and bill private insurance carriers.
Compounding pharmacies are subjected to special licensing and permitting rules because of the heightened risk of the very nature of what they do- customizing a prescription by combining, mixing or altering ingredients to create a sterile or non-sterile medication for a given patient. Pharmacies may only compound drugs where a commercially available drug/dose/formulation is not available. Because of the heightened risk coupled with the high cost of compounded drugs and the increased prescribing of these expensive drugs, compounding pharmacies continue to be at the tip of the enforcement spear and a target for investigations. This and the fact that the number of compounding pharmacies is only a fraction of the number of licensed pharmacies in the U.S., contributes to the increasing visibility when the U.S. Department of Justice prosecutes violators.
Growth of Compounding
From 2006 to 2015, the U.S. experienced a sevenfold increase in the prescribing of compounded drugs. Recently, the compounding pharmacies market was valued at more than $9 billion and is projected to grow by another $5 billion over the next 30 years.
Yet again, the fraud enforcement arm of the DOJ strikes out against fraud in the pharmacy industry. Two new cases shed continuing light on the ongoing fraud.
Announced last week by the DOJ, the owner/operator of five pharmacies in New York pled guilty to charges stemming from a scheme to defraud Medicare and Medicaid by billing for prescription drugs that were not dispensed, not prescribed, not medically necessary or dispensed when the pharmacy had no authority to dispense the prescription drugs. This blatant disregard for the law was magnified when the owner/operator used the ill-gotten gains of her scheme to purchase luxury items like cars and jewelry. Nothing screams “come and get me” like openly flaunting the money taken from the government.
In today’s practices there are many circumstances that call for the discarding of unused portion of drugs, and because of this drug waste can be a big-money issue for many practices. A perfect example is Botox which must be used within five hours of reconstitution, and if it is not used within that timeframe the only option a provider has is to discard the unused supply. What many providers may not be aware of though is that money can be recouped for drugs that have been discarded. The aim of this article is to educate providers that when applicable they may report drug waste in addition to the drug and its administration for Medicare Part B claim reimbursement.
How to Properly Report
For a provider to recoup and report the drug waste they must report the administered drug using the appropriate HCPCS Level II supply code, and the correct number of units in box24D of the CMS-1500 form. As a second line-item providers will want to enter all of the wasted units. It is very important to ensure that the provider documentation verifies the exact dosage of the drug injected, and the exact amount of and any reason for waste. Be aware If the provider did not assume the cost of the drug or administer the drug to the patient they may not bill for the unused portion.
In addition to listing the wasted units as a second line-item certain local contractors may require you to use the modifier JW Drug amount discarded/not administered to any patient to identify an unused drug from single-use vials or single-use packages that are appropriately discarded. Be aware that is inappropriate to use the modifier JW with an unlisted drug code. Therefore, it is imperative to be aware of the local contractor requirements, and appropriate drug codes.
This individual spearheaded a scheme involving kickbacks to marketers and prescribers to defraud TRICARE and other healthcare programs by submitting claims for unnecessary compounded medications, which also involved routine waiver of patient financial responsibility.
You do everything right. You’re careful to dot your i’s and cross your t’s. Compliance is hard-wired because you’re in an industry that’s highly regulated and you’ve built into your operations a series of compliance checks and balances. However, even with strong controls in place, compliance efforts sometimes fall short– and whether you’re a physician group, a pharmacy, a durable medical equipment company, a home health agency, or any other health care provider, someday you might find yourself face-to-face with law enforcement officials or regulatory enforcement authorities. What do you do? How do you assure the most successful outcome with minimal business disruption?
Compliance is the foundation to mitigating the risks inherent in any health care operation. Compliance can reduce the likelihood that regulators or law enforcement suddenly appear on your doorstep. But preparation for emergencies and uncertainties is the key to reducing the risk that non-compliance leads to lengthy business interruption. Although you may be saying “if”, you really should be thinking and acting more like “when”. It costs everything to be ill-prepared and it costs very little to be well-prepared. The following preparation can prevent much of the uncertainty that arises in these cases.
POLICIES AND PROCEDURES
First and foremost, make sure you have well-developed policies and procedures for what to do in such instances. You should review these policies and procedures with your employees regularly, focusing on the importance of compliance. Out of fear and uncertainty, employees can do things that create unnecessary challenges. Educating them as to what their rights and responsibilities are will mitigate those risks. Make sure your policies and procedures include the designation of who is in charge (“person in charge”) when the government does show up.
Following last year’s growth expansion, Florida Healthcare Law Firm in Delray Beach, FL has hired board certified attorney (in Health Law) Karen Davila, as of January 4, 2021. Karen will play an essential role representing healthcare businesses with a specialized focus on retail pharmacy owners and operators. Karen has nearly 30 years’ experience in the health law space and is licensed in both Florida and Illinois.
Florida Healthcare Law Firm has announced that they have added Karen Davila to the team. Karen brings a wealth of healthcare business expertise working with national corporate pharmacies, large hospitals and local family-run businesses. As part of the firm’s expert pharmacy law team, Karen will advise independent pharmacies on matters such as PBM audits, regulatory compliance and transactional support. She also has experience complex provider relationships, reimbursement, fraud and abuse, DEA and FDA regulatory compliance, scope of practice of health care professionals, and quality/patient safety issues across the health care continuum.
Pharmacies and their pharmacists are in a very tough spot in the current regulatory enforcement environment. This is particularly true with dispensing controlled substances. Headlines like the below are commonplace:
DEA RAIDS PHARMACY AS PART OF LOCAL DRUG SWEEP
PHARMACY PAYS $500,000 IN PENALTIES FOR CONTROLLED SUBSTANCES ACT VIOLATIONS
MAN ARRESTED USING DOCTOR’S PRESCRIPTION PAD TO WRITE FRAUDULENT RX’S
So, how do you avoid filling a fraudulent prescription for controlled substances? Before getting into the nitty gritty, it is important to lay the foundation of standard of care and the corresponding responsibility so pharmacies and pharmacists can evaluate what steps are most likely to mitigate these risks.
As background, federal law states that the primary responsibility for prescribing controlled substances rests with the prescriber. However, that same law places a “corresponding responsibility” on the pharmacist to assure each prescription is written for a legitimate medical purpose pursuant to a valid patient-prescriber relationship. 21 CFR §1306.04(a).
Under Florida law:
A pharmacist may not dispense a Schedule II-IV controlled substance to any patient or patient’s agent without first determining, in the exercise of her or his professional judgment, that the prescription is valid. F.S. §893.04 (2)(a).
A prescriber or dispenser must consult the prescription drug monitoring system, eForce, to review a patient’s controlled substance dispensing history before prescribing or dispensing a controlled substance.S. §893.055
Once you have a clear understanding of a pharmacist’s liability, you can then consider ways to mitigate the inherent risks in filling controlled substance prescriptions.
The 340B Discount Drug Program allows manufacturers participating in Medicaid to agree to provide outpatient drugs to certain designated clinics and hospitals at significantly reduced prices. The typical discount ranges from 30% to 50% off the drug’s list price. In turn those clinics/hospitals are able to reach more high-risk, high-need patients and provide more comprehensive services. Each designated clinic/hospital involved in the program is called a “covered entity.”
Covered entities may provide drugs purchased through the 340B Discount Drug Program to all eligible patients of that covered entity, regardless of a patient’s payer status. In order to be a “patient” of a specific covered entity, an individual (1) must have an established relationship with the covered entity such that the covered entity maintains records of the individual’s care; and (2) must receive care from a professional employed by or contracted with the covered entity such that responsibility for the care remains with the covered entity. Under the guidelines, an individual is not considered a patient of the covered entity if the individual only is dispensed a drug for the patient to take at home.
On August 19, an amendment to the Public Readiness and Emergency Preparedness Act was announced by HHS which allows pharmacists in every state to now administer childhood vaccinations to children ages 3 and older, subject to several requirements,
The vaccine must be approved or licensed by the Food and Drug Administration (FDA).
The vaccination must be ordered and administered according to the CDC’s Advisory Committee on Immunization Practices (ACIP) immunization schedules.
The licensed pharmacist must complete a practical training program of at least 20 hours that is approved by the Accreditation Council for Pharmacy Education (ACPE). This training program must include hands-on injection technique, clinical evaluation of indications and contraindications of vaccines, and the recognition and treatment of emergency reactions to vaccines.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.