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Saturday, September 26, 2020
US Pending Legislation that may help compounding pharmacies
Doctor in telemedicine case guilty--Dallas-area doctor pleaded guilty in a Little Rock courtroom--on charges of obstructing a federal health care investigation relating to compounded medications and now faces up to five years in prison
Former Co-Owner of New Jersey Marketing Company Admits Role in $8.8 Million Compounded Prescription Drug Scheme
Department of Justice
Former Co-Owner of New Jersey Marketing Company Admits Role in $8.8 Million Compounded Prescription Drug Scheme
NEWARK, N.J. – The former co-owner of a New Jersey marketing company today admitted her role in a scheme to defraud public and private health benefits programs of at least $8.8 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.
Lisa Curty, 43, of Staten Island, New York, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.
Between February 2015 and February 2017, Curty participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Curty exploited this opportunity by creating a New Jersey marketing company (Marketing Company-1) and hiring sales representatives to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which Marketing Company-1 or its affiliates paid, to receive the prescriptions.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which Marketing Company-1 conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Marketing Company-1 a percentage of the reimbursement amount. As one of the owners of Marketing Company-1, Curty retained a portion of the payment and provided a “commission” payment to the relevant sales representative.
Curty’s conspirator and co-owner of Marketing Company-1, Christine Myers, pleaded guilty on July 27, 2020, to conspiracy to commit health care fraud and is scheduled to be sentenced on Dec. 1, 2020.
Two sales representatives that worked for Marketing Company-1, Christopher Frusci and Enver Kalaba, were former Metropolitan Transportation Authority (MTA) employees. Since the MTA’s health insurance plan covered compounded medications, Frusci and Kalaba targeted co-workers at the MTA and paid them cash bribes for every compounded prescription they submitted. Frusci and Kalaba have both previously pleaded guilty to conspiracy to commit health care fraud charges based on their respective roles in the scheme. On Feb. 7, 2019, Kalaba was sentenced in Newark federal court to 20 months in prison and one year of supervised release, and must forfeit $138,630 in criminal proceeds he received for his role in the scheme and pay restitution of $2.9 million. Frusci is awaiting sentencing.
The count of conspiracy to commit health care fraud is punishable by a maximum of 10 years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Curty must forfeit $1.475 million in criminal proceeds she received for her role in the scheme and pay restitution of at least $8.8 million. Sentencing is scheduled for Jan. 26, 2021.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the Office of the Inspector General, Metropolitan Transportation Authority, under the direction of Inspector General Carolyn Pokorny, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Adam Baker of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.
Thursday, September 24, 2020
OCR Settles Five More Investigations in HIPAA Right of Access Initiative
Orthopedic Clinic Pays $1.5 Million to Settle Systemic
HIPAA Business Associate Pays $2.3 Million to Settle Breach
FDA Takes Actions to Help Lower U.S. Prescription Drug Prices
Final Rule, Guidance Fulfill Plan for Safe Importation of Certain Drugs Originally Intended for Foreign Markets
Today, the U.S. Department of Health and Human Services and the U.S. Food and Drug Administration took actions to help provide safe, effective, and more affordable drugs to American patients as part of the Safe Importation Action Plan, fulfilling the aspect of the July Executive Order on drug pricing to complete the rulemaking to allow states to import certain prescription drugs from Canada.
The final rule implements a provision of federal law that allows FDA-authorized programs to import certain prescription drugs from Canada under specific conditions that ensure the importation poses no additional risk to the public’s health and safety while achieving a significant reduction in the cost of covered products to the American consumer. The final guidance for industry describes procedures drug manufacturers can follow to facilitate importation of prescription drugs, including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that foreign country.
“Today’s action is an important part of FDA’s priorities to promote choice and competition. The Safe Importation Action Plan aims to clearly describe procedures to import drugs that would lower prices and improve access while also maintaining the high quality and safety Americans expect and deserve,” said FDA Commissioner Stephen M. Hahn, M.D. “The FDA will continue to assess and act on opportunities to increase competition in the prescription drug market and help reduce the cost of medicines.”
The rule allows states (including the District of Columbia and territories), Indian tribes and—in certain future circumstances—pharmacists and wholesalers, to submit importation program proposals to the FDA for review and authorization. An importation program can be co-sponsored by a state, Indian tribe, pharmacist or wholesaler. Referred to as Section 804 Importation Programs, these programs will be...