Owners of Florida Compound Pharmacy to Pay $7.75 Million to Resolve False Claims Act Allegations

Jacksonville, Florida – U.S. Attorney A. Lee Bentley III announced, on September 14, 2016, that Andy Miller, Tracy Miller and the Healthmark Investment Trust have agreed to pay $7.75 million to resolve allegations that QMedRx, a compound pharmacy partially owned by the Trust, knowingly billed federal healthcare programs for compounded prescriptions generated in violation of the Anti-Kickback Statute.

As the Trust was only a partial owner of QMedRx, the government is still pursuing penalties and fines from other owners and participants involved in the QMedRx fraud scheme.  This settlement is the latest of a number of settlements and criminal charges stemming from an outbreak of compounding pharmacy fraud, which primarily targeted TriCare, the health benefit program for U.S. military and veterans.  “The United States Attorney’s Office is committed to protecting TriCare and other federal health care programs from fraud,” said U.S. Attorney Bentley. “Those who violate the Anti-Kickback Statute to generate business will be held accountable.”

It is estimated that up to $2 billion of compound prescriptions that were unnecessary or tainted by kickbacks were submitted and paid by government healthcare programs, primarily TRICARE, since 2012.   Florida has been the epicenter of this fraud.  In the past 18 months the government has recovered almost $60 million in fines and penalties related to compounding pharmacy fraud in the Middle District of Florida alone.  Further, as reported by Fraudblawg, the Department of Justice recently charged 16 individuals in a massive $175 million compounding fraud scheme in the Southern District of Florida.  That criminal information described an enterprise that involved all aspects of billing for unnecessary compounded medications, including using cold-call telemarketers to solicit patients, kickbacks to prescribing doctors and manipulating compounding ingredients to maximize billing.  These practices led to stunning prices, such as $31,000 for single tube of medication.

Compounding pharmacy fraud has evolved into a major threat to the healthcare system.  Information from whistleblowers with knowledge of this type of fraud is necessary to eradicate the epidemic of compounding pharmacy fraud.