Another red flag in compounding cases are call centers with marketers. A recent case in Alabama has both. This case is also significant since it targeted many people who worked at the compounding pharmacy including sales representatives, billers, managers in addition to the owners and pharmacist.
On May 6, 2019, ten defendants were charged in a 103-count indictment, including a nurse practitioner, owners, a pharmacist, managers, sales representatives and billers, of an Alabama based pharmacy, Northside Pharmacy doing business as Global Compounding Pharmacy.
The indictment charges them with fraudulently billing health care insurers and prescription drug administrators for over $200 million in prescription drugs. An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty. The charges stem from a larger investigation that has to date resulted in 18 additional individuals being charged and signing plea agreements.
According to the indictment, Global which allegedly described itself as “one of the top three largest compounding pharmacies in the United States,” primarily shipped compounded and other drugs from its Alabama facility, but did most of its prescription processing, billing and customer service at its “call center” in Clearwater, Florida. The company hired sales representatives who were located in various states and were responsible for generating prescriptions from physicians and other prescribers. The company also worked with affiliated pharmacies.
The indictment describes a multi-faceted operation in which the defendants billed for medically unnecessary drugs. The indictment alleges that the wrongdoing included:
- paying prescribers to issue prescriptions;
- directing employees to get medically unnecessary drugs for themselves, family members, and friends, to be filled and billed by Global and other related pharmacies;
- altering prescriptions to add non-prescribed drugs including controlled substances such as Tramadol and Ketamine;
- automatically refilling prescriptions—often as many as 12 times—regardless of patient need;
- routinely waiving and discounting co-pays to induce patients to obtain and retain medically unnecessary drugs; and
- billing for drugs without patients’ knowledge and hiding that conduct from patients by mailing the drugs to the home of Global's owner and president.
According to the indictment, the defendants evaded and obstructed audits and questions about billings through various efforts, including by providing false information in response to audits and diverting their billing through affiliated pharmacies. The defendants allegedly billed health insurance plans and their prescription plan administrators over $200 million and were paid over $50 million.
The indictment states that the defendants targeted multiple health insurance plans, including Global’s, Blue Cross Blue Shield of Alabama, and plans providing health insurance to the elderly, disabled, members of the military, and veterans—Medicare, TRICARE, and CHAMPVA, among others. In addition, the defendants targeted the health insurance plans of Medtronic, a medical device company, and Novartis Pharmaceuticals Corp., pharmaceutical company, both known by some of the defendants to have high-reimbursing health insurance.
According to the indictment, two of the owners of Global would hire individuals known to be on Medtronic and Novartis’s health insurance plans, and direct them to get prescriptions for medically unnecessary drugs for themselves, family members, and friends, and then pay them a commission for these prescriptions.
Some of the conduct described in the indictment includes billing for female sex creams issued to male patients, billing for drugs issued to children that Global stated were contraindicated for use by children, and billing for drugs that patients did not need and therefore simply discarded in the trash.
The indictment filed in U.S. District Court charged the following individuals:
1. John
Jeremy Adams of Florida, an owner and president of
Global, charged in 38 counts;
2. Ashley Adams of Florida, director of HR for Global, charged in 10 counts;
2. Ashley Adams of Florida, director of HR for Global, charged in 10 counts;
3. Jeffrey
Black of Destin, Florida, an owner and vice president and COO of Global,
charged in 18 counts;
4. James
A. Mays, III of Alabama, a pharmacist at Global, charged in 20
counts;
5. Jessica
Linton of Clearwater, Florida, the manager of the billing team at Global,
charged in 24 counts;
6. Lisa
Holmes of a district manager supervising sales
representatives at Global, charged in 12 counts;
7. John
Gladden of Florida, a district manager supervising sales
representatives at Global, charged in 9 counts;
8. Christi
Cunningham of Florida, a sales representative
at Global, charged in 9 counts;
9. Juan
Rodriguez of Tampa, a biller at Global, charged in 6 counts; and
10. Lori
Dawn Edenfield, 45, of Marianna, Florida, a nurse practitioner, charged in 32
counts.
The
indictment also charges the defendants with aggravated identity theft, charges three of the defendants with participating in a kickback conspiracy, and
charges three of them with multiple counts of spending the proceeds
of health care fraud and mail fraud. Purchases included for private plane
travel and expensive watches.
Those
individuals who have already agreed to plea agreements include Global Vice President of Sales Phillip Marks, Operations
Manager Jeffrey South, District Manager Angie Nelson, National Field Trainer
and sales representative Bridget McCune; sales representatives Bonita Amonett,
Roddrick Boykin, Joshlyn Bowen, Erin Brown, Vanessa Case, Peter Eodice II, Jody
Hobbs, Robin Lowry, Kelley Norris and Dawn Whitten; billers Fermin Alfonso,
Stacey Cardozo, and Christopher Nunez; and a nurse practitioner, Brandy
Lunsford.
Attorney Comment: This is a large number of charged individuals for one entity. It shows the government will prosecute more than the owners and managers and should make employees who work at such companies very mindful of their conduct when they know there are issues at a pharmacy or company. However, who knows how experienced the billers and staff were in this case or how involved they were.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Attorney Comment: This is a large number of charged individuals for one entity. It shows the government will prosecute more than the owners and managers and should make employees who work at such companies very mindful of their conduct when they know there are issues at a pharmacy or company. However, who knows how experienced the billers and staff were in this case or how involved they were.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
