Marketing payments are driving many of the federal criminal cases involving compounding pharmacies. A recent Los Angeles federal case fits that profile.
An indictment unsealed on June 26, 2018, alleged a wide-ranging conspiracy that was responsible for more than
$250 million in claims for prescriptions (allegedly fraudulent or involving illegal referral fees or kickbacks) that were filled by
compounding pharmacies in Nevada and Southern California. An Indictment is not evidence and the defendants charged are presumed innocent.
The indictment charges
Irena Shut with allegedly paying kickbacks
to two podiatrists to authorize prescriptions written on pre-printed
prescription pads designed to maximize insurance payments, regardless of the
medical need for an expensive compounded formulary for each “patient.”
The indictment alleges that TYY Consulting, a Las Vegas, Nevada-based company used a nationwide network of marketers to refer prescriptions to
TYY-affiliated pharmacies (New Age Pharmaceuticals, Roxsan, Concierge Compounding, Precise Compounding) in exchange for payments that the government is alleging are "kickbacks."
It is alleged that the health care plans paid out nearly $175 million to the pharmacies. Ms. Shut, who worked as a marketer for TYY, received approximately $6.8 million, some of which was, in turn, allegedly given to the charged podiatrists.
The charged podiatrists, Domenic Signorelli of Irvine and Robert Joseph of Huntington Beach, along with several other unnamed co-conspirator
doctors, allegedly received improper payments (kickbacks) for “writing” the prescriptions. Once the
prescriptions were filled, it is alleged that other members of the conspiracy submitted fraudulent
claims to federal, state and private insurers for the compounded drugs. The insurers include the Department of Defense’s TRICARE program as well as federal and
state workers’ compensation programs.
In addition to paying the charged podiatrists and other medical
professionals, the Indictment alleges that TYY induced other doctors to participate in the scheme by
offering prostitutes, fancy meals, and expensive event tickets.
This case is related to other pending federal cases and there are numerous alleged unindicted marketers and doctors. It seems there will be other federal cases - whether plea agreements or further indictments - coming out of this matter.
