Florida Compounding Pharmacy Settles False Claims Act Allegations Involving Telemedicine Prescriptions for $8 Million

On July 15, 2015, the U.S. Attorney’s Office for the Middle District of Florida announced that it settled False Claims Act allegations against Blanding Health Mart Pharmacy for more than $8 million. Blanding Health Mart Pharmacy is a compounding pharmacy based in Jacksonville, Florida. The settlement stems from allegations that the pharmacy “knowingly billed the government for improper and medically unnecessary compounding pain prescriptions” that were “written by physicians that had never actually seen the patients [i.e., telemedicine prescriptions].” It appears that the allegations involved TRICARE beneficiaries.
This settlement comes on the heels of increased regulatory scrutiny in the compounding pharmacy arena. In fact, U.S. Attorney A. Lee Bentley, III, said that pharmacies that have abused the TRICARE program have been the focus of his office since the beginning of the year. Special Agent in Charge John F. Khin stated that “[f]raud and abuse by pharmacies and medical providers which bill for compounded pain prescriptions is a significant threat to the [Department of Defense] health care system. TRICARE beneficiaries must be made aware that any medications that are not individually prescribed or dispensed by a bona fide treating physician for a specific medical condition can be ineffective or unsafe.” The office’s press release is available here.
Compounding pharmacies should carefully review any telemedicine prescriptions they receive. In particular, compounding pharmacies should review, or consult healthcare legal counsel with regard to, the laws of the state in which the patient resides and in which the physician practices. Many states have laws that require that an existing physician-patient relationship exist prior to prescribing via telemedicine. Some states have “face-to-face” requirements for prescribing certain medications. Pharmacies may also want to consider requesting an attestation from the prescribing physician that states all appropriate standards of care and state law have been met and complied with in writing the prescription. If there is any doubt, pharmacies should not fill the prescription and should contact healthcare legal counsel.
Lastly, pharmacies should also consider how the prescription ended up in their hands. For example, what is the relationship between the pharmacy and the physician? Was the prescription sent as the result of marketing directed at the physician or patient? Depending on the answers to these questions, the analysis may become more complex
For more information, please contact Adrienne Dresevic, Esq., at adresevic@thehlp.com or Clinton Mikel, Esq., at cmikel@thehlp.com or at (248) 996-8510.