United States Files False Claims Act Complaint Against Compounding Pharmacy (etc)

[nitpicker]

https://www.justice.gov/opa/pr/united-states-files-false-claims-act-complaint-against-compounding-pharmacy-private-equity

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Friday, February 23, 2018

United States Files False Claims Act Complaint Against Compounding Pharmacy, Private Equity Firm, and Two Pharmacy Executives Alleging Payment of Kickbacks

The United States has filed a complaint in intervention against Diabetic Care Rx LLC d/b/a Patient Care America (PCA), a compounding pharmacy located in Pompano Beach, Florida, alleging that the pharmacy paid illegal kickbacks to induce prescriptions for compounded drugs reimbursed by TRICARE, the Department of Justice announced today. The government has also brought claims against Patrick Smith and Matthew Smith, two pharmacy executives, and Riordan, Lewis & Haden Inc. (RLH), a private equity firm based in Los Angeles, California, which manages both the pharmacy and the private equity fund that owns the pharmacy, for their involvement in the alleged kickback scheme.

TRICARE is a federally-funded health care program for military personnel and their families. The government alleges that the Defendants paid kickbacks to marketing companies to target TRICARE beneficiaries for prescriptions for compounded pain creams, scar creams, and vitamins, without regard to the patients’ medical needs. According to the complaint, the compound formulas were manipulated by the Defendants and the marketers to ensure the highest possible reimbursement from TRICARE. The Defendants and marketers allegedly paid telemedicine doctors to prescribe the creams and vitamins without seeing the patients, and sometimes paid the patients themselves to accept the prescriptions. The scheme generated tens of millions of dollars in reimbursements from TRICARE in a matter of months, according to the complaint, which alleges that the Defendants and marketers split the profits from the scheme.
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The lawsuit, United States ex rel. Medrano and Lopez v. Diabetic Care Rx, LLC dba Patient Care America, et al., No. 15-CV-62617 (S.D. Fla.), was originally filed in the U.S. District Court for the Southern District of Florida by Marisela Medrano and Ada Lopez, two former employees of PCA. The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue for false claims against of the United States and to receive a share of any recovery. The Act permits the United States to intervene in such lawsuits, as the United States has done in this case.
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