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Compounding Pharmacies and Alleged Tricare Abuses Back in the Spotlight by Jacqueline Bain





Compounding Pharmacies and Alleged Tricare Abuses Back in the Spotlight by
Article Posted: 02/18/2016
Article Views: 351
Articles Written: 21
Word Count: 681
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Compounding Pharmacies and Alleged Tricare Abuses Back in the Spotlight


 
Law,Health,Business
On Thursday, February 11, 2016, the United States Attorneys’ Office from the Middle District of Florida announced a $10 million settlement with 4 physicians and 2 pharmacies regarding alleged abuses of Tricare program. The case against these physicians and pharmacies was prosecuted as part of the United States government’s large-scale effort to combat questionable compounding practices. Investigation revealed that patients were often prescribed compounded drugs that they never used, and that Tricare paid a mark-up cost of nearly 90% for compounded drugs over and above the pharmacy’s actual costs of making the drug. Roughly 40% of the claims submitted by the pharmacies in question were written by 4 physicians with an ownership or financial interest in the pharmacies. Tricare is a federal health care program designed to insure active duty military service members, reservists, members of the National Guard, retirees, survivors and their families. Tricare outpatient costs have almost doubled in the last 5 years, and compound drugs have accounted for a large portion of that increase. The anti-fraud and abuse regulation for the Tricare program is broader than the Federal Anti-Kickback Statute. For instance, the statute lays out that submitting claims that are not medically necessary is considered “abuse” of the Tricare program. Moreover, billing in excess of customary and reasonable charges is also considered “abuse”. Among the examples of what the government might consider “fraud” in the Tricare program is any arrangement that appears to be designed primarily to overcharge the program through fee-splitting or kickbacks. In 2015, to combat rising costs and perceived abuses, Tricare implemented a new process for Tricare’s pharmacy benefits manager (“PBM”) to determine whether scripts for compounded drugs meet coverage criteria for each insured, including whether the drug prescribed is safe, effective and medically necessary. It also implemented an appeal process in the event that it denies a drug that an insured (and his/her physician) believe is an appropriate treatment to a documented illness. Moreover, the Department of Justice has increased its focus on pursuing individual wrong-doers in cases of alleged corporate fraud. In September of 2015, Deputy Attorney General Sally Yates distributed a memorandum to several Assistant Attorneys General, the Director of the FBI, the Director for the Executive Office for United States Trustees and all United States Attorneys instructing them to strongly consider bringing to justice individuals in addition to corporations in cases of alleged fraud. The memo described steps that should be taken in any investigation of corporate misconduct. Those steps are as follows: 1. corporations hoping to be given credit for cooperating with an investigation must provide to the Department of Justice all relevant facts relating to the individuals responsible for the misconduct; 2. criminal and civil corporate investigations should focus not only on the corporation’s conduct as a whole, but also on individuals from the inception of the investigation; 3. criminal and civil attorneys handling corporate investigations should be in routine communication with one another; 4. the Department of Justice will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation only in extraordinary circumstances or based on an approved departmental policy; 5. Department of Justice attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and 6. civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual's ability to pay. What does this mean for our pharmacy clients? If your pharmacy is compounding AND submitting claims for reimbursement to Tricare, you should consider getting educated on the laws. Your relationship with Tricare may heap upon you individual liability in addition to corporate liability if you are dabbling in this space without the proper education. A general knowledge of the Federal Anti-Kickback Statute is not enough… billing Tricare means there is more to consider. You will also want to have your relationships with any referral sources / marketers reviewed to make sure those are in compliance.

Ask Attorney Jacqueline Bain a Question!

Related Articles - Compounding Pharmacy, Physician Referral, Anti Kickback Statute, Compliance, Stark Law, Physician Ownership, Health Law, Healthcare, Healthcare Law,

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