The U.S. Attorney’s Office for the Eastern District of Texas announced on November 18, 2020 that a 43-year-old physician practicing in Beaumont, Texas was found guilty on November 18, 2020, after a four-day trial, of federal health care fraud violations involving twelve counts of health care fraud, three counts of aggravated identity theft, one count of making a false statement, and two counts of accepting kickbacks.
Evidence at trial showed that beginning in January 2015, the physician participated in a health care fraud scheme by issuing prescriptions for specially compounded scar creams using the names, dates of birth, and Health Insurance Claim Numbers of TRICARE beneficiaries, and caused the prescriptions to be forwarded directly to Memorial Compounding Pharmacy in Houston, Texas. These prescriptions were issued without consultation with the patient and without the patient’s knowledge.
The prescriptions were billed to the military health care program, TRICARE, by the pharmacy at approximately $9,000 to $13,000 per prescription, with multiple refills authorized per prescription. The physician issued over 600 prescriptions in the names of approximately 140 beneficiaries in furtherance of the scheme. Before the scheme could be detected, TRICARE paid approximately $6.7 million in TRICARE funds to Memorial Compounding Pharmacy. To conceal his criminal activity, the physician created fictitious patient files and records that falsely indicated that he had examined or consulted with those patients, and submitted those false records to the Defense Health Agency in response to an audit.
Additionally, the physician violated the Anti-Kickback Statute by requiring Medicare and Medicaid beneficiaries seeking opioid treatment to pay cash for an office visit in excess of the amount which would have been reimbursed by the Medicare and Medicaid programs.
The physician was taken into custody following his conviction and faces up to ten years in prison for each count of health care fraud and an additional two-year consecutive term of imprisonment for each count of aggravated identity theft. A sentencing date has not been set yet.
The case was investigated by the Defense Criminal Investigative Service, the Drug Enforcement Administration, Health and Human Services – Office of Inspector General, and the Texas Medicaid Fraud Control Unit.
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