Private payers, including Blue Cross Blue Shield of Tennessee, were bilked out of about $174 million in the compounding pharmacy scam, which inflated prices for invalidly prescribed pain creams and other drugs.
Seven compounding pharmacies were indicted along with their owners in the scheme.
The scam affected tens of thousands of patients around the country.
The alleged scammers billed private payers for about $931 million in fraudulent claims.
Four Florida men were charged in a multistate telemedicine scheme that billed at least $931 million in fraudulent claims to private insurance companies, the Department of Justice said Monday.
According to a 32-count indictment filed in U.S. District Court in Greeneville, Tennessee, the four defendants, owners of seven compounding pharmacies in Florida and Texas, set up an elaborate telemedicine scheme that solicited insurance and prescription drug information from consumers across the country.
Physicians unwittingly approved the prescriptions for pain creams and other drugs without knowing that the defendants were jacking up the prices of the invalidly prescribed drugs, which were billed to private payers.
Tens of thousands of patients and more than 100 physicians in East Tennessee bore the brunt of the scam, which ran from mid-2015 through April 2018. Private payers in the region, including Blue Cross Blue Shield of Tennessee, were bilked out of about $174 million, prosecutors said.
BCBS Tennessee issued a statement on Tuesday noting that it was “only one of hundreds of insurers impacted by this case.”
“We remain committed to partnering with our customers, providers and law enforcement to fight fraud, waste, and abuse in the healthcare system,” BCBST said.
All totaled, the indictment alleges that the defendants submitted not less than $931 million in fraudulent claims for payment. It’s not clear how much was paid out.
The four Florida defendants were identified as Andrew Assad, 33, of Palm Harbor, Peter Bolos, 41, of Lutz, and Michael Palso, 44, of Odessa, and Larry Everett Smith, 48, of Pinellas Park.
The companies were identified as: Germaine Pharmacy in Tampa; Synergy Pharmacy Services, in Palm Harbor; Precision Pharmacy Management, Tanith Enterprises, ULD Wholesale Group, and Alpha-Omega Pharmacy, all in Clearwater; and Zoetic Pharmacy in Houston, Texas.
The four defendants were each charged with conspiracy to commit healthcare fraud, mail fraud, and introducing misbranded drugs into interstate commerce.
If convicted, the four men face prison terms of up to 20 years for each mail fraud charge, up to 10 years for conspiracy, and up to three years in prison for introducing misbranded drugs into interstate commerce.
The indictment also seeks forfeiture of approximately $154 million.
The indictments come on the heels of the related Sept. 26 guilty plea by Scott Roix, 52, the CEO of HealthRight LLC, a telemedicine company in Pennsylvania and Florida, for his role in the scheme. Roix and HealthRight also pleaded guilty to wire fraud charges in a separate scheme that fraudulently telemarketed dietary supplements, skin creams, and testosterone.