On December 2, 2024, US District Judge Timothy J. Corrigan sentenced several individuals for their roles in a $54.3 million healthcare fraud scheme. The defendants paid kickbacks and bribes to telemarketers and telemedicine providers to secure orders for medically unnecessary prescriptions, which were then billed to Medicare.
Defendant 1, from West Palm Beach, was sentenced to three years and five months in federal prison. He was also ordered to forfeit $15,600,333.30 and pay $54,303,526 in restitution. Defendant 2, from Fort Lauderdale, received a sentence of 2 years and six months in federal prison, along with a forfeiture of $6,341,240.58 and restitution of $36,246,251. Defendant 3, also of Fort Lauderdale, was sentenced to 15 months in federal prison and ordered to forfeit $3,650,943.36, with restitution set at $8,374,175. Defendant 4, from Boca Raton, was sentenced to five years of probation, with a forfeiture of $894,116.45 and restitution of $3,017,135. All defendants had previously pleaded guilty to their roles in the conspiracy, which involved pharmacies they operated that participated in the Medicare program, including one in Jacksonville.
From approximately 2018 through 2021, the co-conspirators paid kickbacks and bribes to telemarketing companies to recruit Medicare beneficiaries into accepting prescriptions for medications—primarily topical creams—that they neither needed nor wanted. Some of the conspirators also ran companies that engaged in telemarketing to generate beneficiary leads.
The co-conspirators then paid kickbacks to telemedicine companies that employed physicians who signed the prescriptions, often without establishing a legitimate physician-patient relationship. The physicians typically approved prescriptions after brief phone calls with beneficiaries or with no contact at all. After securing the prescriptions, the conspirators submitted claims to Medicare for the unnecessary medications, sometimes through multiple pharmacies they controlled in a practice known as “recycling.” Over the course of the conspiracy, the defendants’ pharmacies received more than $54.3 million in reimbursement from Medicare Part D for the medically unnecessary prescriptions.
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. Under both federal and state anti-kickback statutes, it is illegal to knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward referrals for federal or state healthcare program business. Kickbacks can take various forms, such as bribes or rebates, and can be given in cash or in kind. This prohibition extends to both those who pay for referrals and those who receive them. Healthcare providers, including those involved in telemedicine arrangements, must ensure that any prescribing practices are based on legitimate medical need and not influenced by kickbacks or improper inducements. Prescribing unnecessary medications for financial gain violates the Anti-Kickback Statute, undermines medical decision-making, and exposes patients to potential harm. Failure to promptly report a kickback or improper prescribing can result in lawsuits, fines, and other sanctions under federal and state law.
Discussion Points
- Review policies and procedures regarding the use of telemedicine within the facility and preventing fraud, waste, and abuse. Also review your policies and procedures for operating an effective compliance and ethics program to ensure that the identifying and reporting of false claims or kickbacks is part of your policy.
- Provide education to nursing and business office personnel on their responsibility to identify and report any concerns that unnecessary medications, treatments, supplies, or equipment are being ordered for residents. Train staff about fraud, waste, and abuse and the prohibition regarding acceptance of illegal kickbacks and bribes in exchange for ordering medical equipment, performing lab tests, prescribing medications, and other activities. Staff who observe or reasonably suspect that kickbacks and bribes are being offered or accepted should report such suspicions to their supervisor or through the facility’s hotline.
- Periodically audit to determine if telemedicine tools are being used appropriately and that facility personnel are not being offered or accepting bribes or kickbacks. Also audit to ensure that staff are aware of their responsibility to identify compliance and ethics concerns and to promptly report violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
