Florida’s ‘MediMix’ Settles False Claims Act Allegations

A Florida compounding pharmacy has agreed to pay $3.775 million to settle allegations of improper referrals.
Image source: Wikimedia Commons

The federal and state governments expend billions of dollars annually to ensure this nation’s older and impoverished citizens have access to proper and affordable medical care through Medicare and Medicaid. In return, the government relies upon practitioners and healthcare companies to offer the lowest possible rates and fairest prices for goods and services. In keeping with this mandate, the government has outlawed certain financial relationships between providers that could ‘taint’ the patient’s treatment plan and/or artificially inflate the costs of medical care.

In today’s case, we review a recent settlement between the Department of Justice and a Jacksonville-based prescription drug compounding company known as MediMix.[1. Wolf, Alex, “Fla. Compounding Pharmacy Pays $3.8M To Settle FCA Suit.” http://www.law360.com/articles/662302/fla-compounding-pharmacy-pays-3-8m-to-settle-fca-suit] Also involved in the settlement was a Jacksonville physician who raised several red flags after being noted as a consistent top biller for MediMix services.

Details of lawsuit against MediMix

Pharmacy compounding is a service that provides a tailored mix of medications to treat a particular patient’s needs. According to the FDA, compounding is defined as “a practice in which a licensed pharmacist, a licensed physician, or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.”

In this case, MediMix was a regular provider of compounded pain medications to Dr. Ankit Desai, who is alleged to have sent thousands of prescriptions to the company for compounding services. In fact, Dr. Desai was noted by authorities to have been a top biller for compounding services with MediMix, and drew attention to himself after receiving millions of dollars in reimbursements from Medicare, Medicaid, and TRICARE.

So, how does this situation trigger False Claims Act liability? As it turns out, Dr. Desai is married to a senior vice president within the MediMix corporation, so the relationship presented an unlawful financial arrangement between two providers enrolled in federal healthcare programs. In general, the government does not allow for the referral of Medicaid, Medicare, or TRICARE patients between providers who are related, such as a husband and wife or a parent and their child.

In this case, MediMix and Dr. Desai are alleged to have focused a majority of their practices on TRICARE beneficiaries – those who are currently serving or have served in the U.S. military.[2. Scanlan, Dan, “Jacksonville pharmacy and doctor pay $3.775 million federal settlement”. June 1, 2015. http://jacksonville.com/news/crime/2015-06-01/story/jacksonville-pharmacy-and-doctor-pay-3775-million-federal-settlement] After proactively reviewing healthcare data, the relationship between MediMix and Dr. Desai triggered an audit of both – at which time the relationship was discovered.

The Department of Defense said in a statement, “Fraud and abuse by pharmacies and medical providers which bill for compounded pain prescriptions [are] a significant threat to the DOD healthcare system….TRICARE beneficiaries must be made aware that any medications that are not individually prescribed or dispensed by a bona fide treating physician for a specific medical condition can be ineffective or unsafe.”[3. FBI Press Release, “United States Settles False Claims Act Allegations Against Jacksonville-Based Compounding Pharmacy.” June 1, 2015. https://www.fbi.gov/jacksonville/press-releases/2015/united-states-settles-false-claims-act-allegations-against-jacksonville-based-compounding-pharmacy]

Contact Berger Montague today

If you are aware of misconduct, illegal billing practices, or ongoing kickback arrangements in the healthcare field, please do not hesitate to contact a reputable whistleblower attorney at Berger Montague today.