Compounding Pharmacy and its Owners Will Pay More than $1.9 million to Settle FCA Allegations

by Andrew Murray | January 16th, 2020

The Department of Justice announced the settlement on December 20, 2019. The Press Release states:

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Heritage Compounding Pharmacy, LLC (Heritage), and its pharmacist owners, Christopher and Marti Burgess, of Fairhope, Alabama, have agreed to pay over $1.9 million to resolve allegations that they violated the False Claims Act (FCA) stemming from the payment of illegal kickbacks and the implementation of a refill scheme of medically unnecessary pain creams.

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In a complaint filed on October 29, 2019, the United States alleged that between January 1, 2013 to May 1, 2015, Heritage and its owners submitted false claims to TRICARE, a federally funded health care program for military personnel and their families.  The Government alleged that the Defendants, through their “sales representatives”, paid physicians in the form of extravagant dinners and other entertainment perks, to induce prescribing.  Heritage employed a sales force to strategically market pre-printed and pre-formulated topical pain cream prescriptions to prescribers in military populated territories such as Kansas City, Southwest Missouri, and Topeka/Manhattan.  Many of these creams contained the Schedule III controlled substance Ketamine.  Per the complaint, taking advantage of TRICARE’s per ingredient reimbursement policy, without regard to patient need, Heritage implemented a high dose refill scheme costing TRICARE over $27,000.00 per claim for medically unnecessary pain creams prescribed without a valid physician-patient relationship.  The local pharmacy shipped large quantities of pre-formulated medication to TRICARE beneficiaries.  The U.S. Department of Veterans Affairs (CHAMPVA) also suffered losses from this fraud scheme.

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