Tricare Pharmacy Fraud Reaches Epidemic Levels, Prosecutors Open Investigations In Four States

11.09.2015 | Surge Wire |

Fraud in the military’s health insurance program has become such an epidemic that federal prosecutors have opened investigations in four states.

Numerous pharmacies have been falsely billing the health insurance program Tricare by encouraging salesmen to bribe doctors, The Wall Street Journal reports.

These salesmen and marketers would receive up to 58 percent commission of the amount obtained from Tricare. Prosecutors referred to this practice as an improper kickback.

These doctors then would write prescriptions for beneficiaries of the insurance program, but those prescriptions took place without doctors seeing patients at all. Instead, doctors used telephone consultations as a substitute for in-person visits. According to prosecutors, that procedure violates the False Claims Act because it does not establish a genuine doctor-patient relationship.

The burgeoning investigation follows on the heels of a recent settlement with four pharmacies in Florida, which recently agreed to pay $12.8 million as a settlement. Civil allegations mentioned false billing regarding creams and gels for pain and scar tissue. In the settlements, which have not yet been released, the pharmacies reportedly do not admit to civil liability.

A. Lee Bentley, U.S. Attorney for the Middle District of Florida, intends to pursue criminal charges in early 2016 and is firm on the timeframe.

Tricare paid out $1.75 billion for compounded drugs in 2015. This is 18 times the amount paid in 2012, an incredible increase in just three years.

“I believe that the increase is due almost entirely to fraud,” Bentley told The Wall Street Journal.

Similar investigations are opening up in California, Mississippi and Texas.

A CBS News investigation from earlier this year in May found that compound pharmacies were billing military servicemembers at astronomical cost to taxpayers.

Army Maj. Gen. Richard Thomas, who oversees Tricare, told CBS that many doctors are complicit in the scam. This scam costs taxpayers hundreds of millions of dollars every month.

In one case, CBS News filled out a form on a website calling Healing for Heroes and received a package from a California pharmacy without ever seeing a doctor. One of the doctors told CBS News that hundreds of physicians are engaging in the same behavior.

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