These compounds serve a vital purposes. However, the more popular that compounding pharmacies become, the more attention the government pays to potential fraud.
Fraud is serious on both a civil and criminal level. For pharmacists, fraud may result in huge monetary fines and prison time. A pharmacist may be held responsible for healthcare fraud due to their means of compounding medications. If you or your compound pharmacy is under investigation for potential fraud, it’s vital that you get in contact with an experienced attorney immediately.
Compounding Fraud Explained
As compounding pharmacies have grown in popularity, federal law enforcement has begun issuing more and more search warrants connected to them. It’s common for kickbacks and falsified records to be the source of a healthcare fraud indictment. But compound pharmacies have a unique struggle that other healthcare industries don’t.
Compound pharmacies are able to bill an insurance company for every ingredient that is used in formulating a medication. Most commonly, fraud charges are related to this. It’s common for the government to accuse the pharmacist of adding unnecessary ingredients to the medication just so they could get a bigger payout from the insurance company.
On top of that, compound pharmacies are subject to the same issues that many other healthcare practices are. The government may file charges regarding unnecessary billing, overbilling, kickbacks, automatic refills, or compounding drugs that are identical to those currently sold under brand names on the market.
Compounding fraud investigations are done through the Healthcare Fraud Provision and the False Claims Act. Investigators invoking these regulations have a choice of whether to seek civil or criminal damages. With civil penalties, the defendant may be ordered to pay massive amounts in fines and healthcare reimbursement. With criminal penalties, an individual may be indicted and prosecuted in court. The sentence for criminal convictions is typically prison time.
The Process of a Fraud Investigation
If a compound pharmacy is investigated for fraud, there are many agencies involved. These include:
- The Food and Drug Administration
- The Drug Enforcement Agency
- The Federal Bureau of Investigation
- The Department of Justice
- The Department of Labor
- The Department of Health and Human Services
- The Office of Inspector General
It’s common for a case to begin with the issuing of a subpoena from the Office of Inspector General. Included in the subpoena might be marketing agreements, financials, company records, and physician relationships. This might seem like harmless information to give, especially if you have nothing to hide, at least to your knowledge. But the subpoena will not tell you whether the involved investigation is criminal or civil. Usually, an experienced lawyer can analyze the language in the subpoena to determine whether the pharmacy is being investigated on a criminal or civil basis.
Another way that the investigation may begin is with the arrival of federal agents. These agents may come from the FBI, DEA, or another federal agency. They may knock on the door and request to talk to the staff. Sometimes this request is accompanied by a search warrant, while in other cases it’s a general inquiry. Regardless of the case, it’s important to insist that a lawyer is present when speaking to the investigators.
DEA and FBI agents have extensive training in gathering information and building cases. You may answer a question that seems innocent, only to find that the information is being used against you because of context you didn’t know.
In many cases, a lawyer can prevent the investigation from going further. It’s common for cases to happen because the subject of the investigation accidentally criminalized themselves when speaking. A lawyer can make sure you’re aware of your constitutional rights and keep you from saying anything that might land you in hot water.