A Utah pharmacy and the husband-and-wife owners of a Tennessee medical practice have been indicted on allegations that they used Marines and sailors in San Diego County as pawns in a nearly $66 million medical insurance scheme, according to an indictment unsealed Friday.
Jimmy and Ashley Collins, who own Choice MD in Cleveland, Tenn., made their first court appearance Friday in Chattanooga, a precursor to an upcoming San Diego hearing.
The charges accuse the couple, as well as CFK Inc., owners of a pharmacy in Bountiful, Utah, of defrauding the military’s health insurance system TRICARE.
At the center of the alleged scheme are compound medications — drugs that are custom-made by pharmacists to tailor to a patient’s unique needs and are significantly more expensive than typical prescription drugs. The ingredients are not FDA approved.
Military members in San Diego would be paid to recruit other service members to participate in a fake medical study, according to the allegations. The participants were paid $100 to $300 to speak with a doctor in a telemedicine session and would be prescribed compound medication — some in cream form, according to details in a search warrant affidavit obtained last year by the Union-Tribune.
Many of the compound drugs came from the pharmacy in Utah, which was then known as The Medicine Shoppe but has since changed its name to Bountiful Drug under new ownership, according to the indictment.
The number of compound medications to TRICARE patients from the pharmacy skyrocketed, from 218 such medications in all of 2013 to 4,637 in the first four months of 2015, records say. The batch in 2015 elicited $67.3 million in reimbursement claims, according to court records.
Many of the prescriptions were authorized by physicians working for Choice MD.
Investigators tracked millions of dollars flowing among the office, the pharmacy and alleged recruiters. The Collinses were paid $45 million in kickbacks, according to the indictment. They bought up property around Tennessee, a yacht and luxury cars, including two Aston-Martins, prosecutors said.
The compound prescriptions stopped after a government audit in May 2015 looked into the sudden rise in claims and payment was denied.