Despite the COVID-19 pandemic and the government’s increased focus on CARES Act relief fund fraud, the government continues to investigate and enforce healthcare fraud unrelated to the COVID-19 pandemic.  A recent indictment demonstrates the government’s continued enforcement efforts. 

On August 27, 2021, a federal grand jury indicted a Louisiana doctor for his alleged participation in a scheme that distributed over 1.2 million doses of Schedule II controlled substances.  A Schedule II drug is a drug or other substance that has a high potential for abuse, and abuse of the drug or other substance may lead to severe psychological or physical dependence.  21 U.S.C. § 812(b)(2).  Since many prescriptions were filled and paid for using health insurance benefits, the Louisiana doctor was also charged with defrauding health care benefit programs of more than $5.1 million. 

According to the press release and indictment, the defendant formed Medex Clinical Consultants in Slidell, Louisiana in 2010.  Medex was a primary care clinic that purportedly offered general medical services; however, the government alleges that Medex primarily provided pain management services.  The government noted that Medex kept irregular business hours.  According to the indictment, patients frequently arrived at Medex before 5 a.m. and would enter the practice when the doors opened, frequently before 7 a.m.  The patients would remain in the practice until a nurse practitioner arrived, usually around 7:30 a.m. or 8 a.m.  The patients then exited as a group with prescriptions.  The indictment further alleges that Medex typically closed before noon.

In 2015, at the defendant’s direction, Medex discontinued accepting Medicare benefits for office visits.  The indictment notes that the defendant required patients to sign consent forms acknowledging that Medicare would not be billed or reimburse any services he provided “but that beneficiaries could utilize their Medicare benefits for other purposes.”  Because the consent forms noted that the beneficiaries could utilize their Medicare benefits for other purposes, the government alleges that the defendant knew that patients continued to use their insurance benefits to fill their Medex prescriptions at pharmacies.

In February 2015, the defendant maintained a full-time position at a VA Medical Center, an approximate 3.5-hour drive away from his Medex clinic.  The indictment noted that the defendant usually worked Monday through Friday from 8:00 a.m. until 4:30 p.m.  The defendant is accused of pre-signing prescriptions for Schedule II controlled substances to be issued at Medex when he was not physically in the office.  The indictment cited an instance on July 27, 2013, where the defendant wrote 66 prescriptions for patients at the VA Medical Center between 8:53 a.m. and 4:21 p.m. On the same day, Medex issued prescriptions with the defendant’s signature to 15 patients.  

In August 2016, the defendant took a leave of absence from his position at the VA Medical Center.  A few months later, the defendant hired a physician (co-conspirator) to work at Medex.  The defendant is accused of directing his co-conspirator to pre-sign prescriptions.  The co-conspirator pre-signed prescriptions for controlled substances and, at times, pre-signed blank prescriptions.  These pre-signed prescriptions were left with Medex office employees, including a non-medically trained employee. 

According to the indictment, Medicare paid over $1.8 million, Medicaid paid over $2.4 million, and Blue Cross paid over $800,000 for controlled substance prescriptions that the defendant and his co-conspirator pre-signed at the defendant’s direction.  These prescriptions were pre-signed without examinations being performed.   As a result of the scheme, the defendant is charged with one count of conspiracy to unlawfully distribute and dispense controlled substances, one count of maintaining a drug-involved premises, and four counts of unlawfully distributing and dispensing controlled substances.  If convicted, the defendant faces 20 years in jail for each of these charges.  The government also charged the defendant with one count of conspiracy to commit healthcare fraud, for which he faces up to 10 years in prison.  

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, including fraud investigations and prosecutions.  If you need assistance with such a matter, please contact us today.