Recently in pharma news it was reported that the FBI served search warrants at several pharmacies in Mississippi during a compounding pharmacy investigation. Warrants were also served at pharmacies in Alabama, Florida, and Utah according to Dolores Lewis, a Mississippi Bureau of Narcotics spokeswoman.
The investigation, which is reportedly connected to health care fraud, initially began with the state Bureau of Narcotics before federal authorities stepped in to help. IRS Special Agent, Darren Mayer, stated that those who were the subjects of the investigation own and operate multiple pharmacies, some of which allegedly billed for ingredients not used in the compounded medications they market and prepare. Mayer went on to say that price rolling was being done by many of the subjects, a process in which a claim is submitted to an insurance provider by the pharmacy to “test” how much the insurance provider will reimburse for a certain prescription before canceling the claim. An employee then attempts to find out if a compounded formulation may be reimbursed at a higher rate by submitting a claim for that formulation.
News reports reveal the IRS investigation uncovered health care fraud, money laundering, and other criminal acts and that the United States government claimed civil forfeiture of properties valued at a minimum of $11 million in Pine Belt and other areas.
Mayer said the pharmacies engaged in other techniques such as split billing and automatic refills that disregard the doctors’ orders or wishes of the patients. Split billing is simply splitting a prescription into smaller portions so that a dispensing fee can be charged. In an effort to hide their involvement in these activities from insurance programs, pharmacies may use shell companies or affiliates according to Mayer.
The investigation began in January of this year, and as of June had resulted in the seizure of five planes, two boats, 24 vehicles, and money totaling $15 million from 80 bank accounts.
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