US District Judge Cecilia M. Altonaga sentenced five defendants, including a doctor, to federal prison terms for their roles in a scheme that defrauded Tricare and Medicare out of more than $9.6 million. The defendants tricked beneficiaries into having the federal healthcare programs pay for medically unnecessary compounded prescription medicines and cancer genetic tests. According to court records, the co-conspirators targeted Tricare for about 10 months, starting in 2014. After making their way onto US military bases, co-conspirators convinced Tricare beneficiaries to sign up for compounded prescription medications that the beneficiaries did not need. To encourage sign-up, co-conspirators falsely told the beneficiaries that the pharmacies would custom design their medications or that the medications were free. In fact, the medications were not custom designed and the patients had co-payments. Compounding pharmacies paid the co-conspirators millions of dollars in kickbacks in exchange for sending the pharmacies expensive prescription orders. In mid-2015, Tricare scaled back its reimbursements for compounded medications. The defendants turned to Medicare. They paid doctors to refer Medicare beneficiaries to a lab in Georgia for cancer genetic screening testing, even though the doctors had never examined the beneficiaries. As with the compounded medications, the cancer genetic screening tests were not medically necessary.
