Compounding Pharmacy Defense
The attorneys at Stumphauzer & Sloman have extensive experience defending government investigations of compounding pharmacies. Indeed, our lawyers have defended several compounding pharmacies throughout the nation on civil and criminal matters, and have also defended prescribing physicians, pharmacists-in-charge, marketing companies, individual marketing agents and telemedicine companies that have come under government scrutiny because of their roles in distribution of compounded pain creams and scar creams. With such a wealth of experience in defending compounding pharmacies and related individuals and entities, a Miami healthcare lawyer at Stumphauzer & Sloman is able to quickly identify the specific fact patterns and circumstances that triggered government scrutiny, and we can craft unique and comprehensive defense strategies to address each of the government’s prosecution theories.
- Defense of Compounding Pharmacy Owners and Compounding Pharmacists
- Defense of Physicians & Other Prescribers of Compounded Medications
- Defense of Compounding Pharmacy Marketing Agents
- Investigative Process for Compounding Pharmacies
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When defending against government investigations of compounding pharmacies, we also draw upon more than 30 years of combined experience as former federal prosecutors. Partner Jeff Sloman formerly served as the United States Attorney for the Southern District of Florida, which has been labeled “ground zero” for Medicare fraud. Partner Ryan Stumphauzer is also a former federal prosecutor and served as the Health Care Fraud Coordinator for the Southern District of Florida, where he supervised Miami’s Medicare Fraud Strike Force. Together, Mr. Sloman and Mr. Stumphauzer have personally handled or supervised hundreds of health care fraud investigations, from grand jury investigation through jury trial and sentencing. As a result, it is clear that a Miami healthcare lawyer at our firm can offer unique insight regarding the government’s investigative priorities, techniques and strategies, as well as the most effective defenses and strategies for avoiding devastating government penalties.
The Department of Justice has publicly announced that it will vigorously and relentlessly investigate compounding pharmacies, and will pursue civil and criminal charges against pharmacy owners, pharmacists, marketers, telemedicine companies and others involved in the distribution of compounded pain creams, scar creams and other compounded formulations. Indeed, the government contends that the Department of Defense’s Tricare program was defrauded of more than $2 billion, primarily for compounded pain creams and scar creams. The government’s focus on compounding pharmacy prosecutions was further intensified when the Wall Street Journal, Fortune Magazine and the CBS Nightly News published a series of investigative reports and video exposé stories related to compounding pharmacy fraud. You can view some these stories below.
Compounding Pharmacy News
- Possible Fraud Linked to Compounding Creams
- US Targets Pharmacies over Military Health Programs
- Probe into Billion Dollar Health Care Fraud
- Insurance Billed for Unwanted Pain Meds
As a result of the devastating losses to the Tricare program, and the intense media scrutiny that followed, the government has dedicated an unparalleled level of resources to compounding pharmacy investigations and prosecutions. Several pharmacy owners, pharmacists, marketing agents and other have faced devastating criminal charges, crippling civil fines and exclusion from federal health care programs. The government has several prosecution theories, and the following circumstances are likely to trigger government scrutiny:
- The government uses “data mining” to identify potential targets for prosecution, so compounding pharmacies that had a dramatic spike in Tricare billing from 2013 through mid-2015 are likely to attract government scrutiny, especially if a substantial portion of its billing was for pain cream and scar cream. Many compounding pharmacy owners did not even realize they were billing Tricare because their reimbursements flowed from Express Scripts, CVS Caremark and other private sector pharmacy benefit managers that serviced Tricare.
- Based on the same “data mining “ techniques, the government also focuses on physicians, physician assistants, podiatrists and chiropractors who prescribed a high volume of pain cream and scar cream prescriptions from 2013 through mid-2015. The government’s interest is piqued even further if there was a sudden and precipitous increase in the medical professional’s prescribing patterns, or if the physician never previously prescribed compounded drugs.
- Using “data mining,” the government also focuses upon physicians and other medical professionals who wrote compounded pain and scar prescriptions for out-of-state patients, leading to a potential inference that there was no lawful physician-patient relationship. This fact pattern often arises in cases where compounding pharmacies used “telemedicine” doctors and “call center” marketers.
- The government has also focused intense scrutiny on prescribing physicians who receive any compensation whatsoever from compounding pharmacies, whether in the form of Medical Director fees, research fees, or speaking fees. In cases involving “Medical Director Fees” and “Research Fees,” the government closely examines whether there was any legitimate, bona fide research or work.
- The government also focuses on marketing agents and marketing companies that were paid a flat percentage of the adjudicated claim amount, especially if the marketers were categorized as independent contractors. The government’s view is that these marketing arrangements violated the Anti-Kickback Statute, and do not fit within a safe harbor or statutory exception.
- The government also focuses on compounding pharmacies that filled a high volume of compounded medications that contained identical, or nearly identical, chemical components, leading to an inference that the drugs were not truly custom-compounded to meet a patient’s unique needs, but instead were bulk manufactured.
- The government focuses on compounding pharmacies that frequently changed or manipulated their compounded medicine formulations, especially if those changes consistently increased the reimbursement amount.
- The government has also focused its investigative resources on compounding pharmacies that utilized “mass marketing” call centers and/or “telemedicine companies.” The government’s scrutiny is further intensified if these call centers purposely targeted military personnel and Tricare beneficiaries.