Recently, the Department of Justice (DOJ) joined a whistleblower lawsuit against several Florida pharmacies and pharmacy owners, alleging that the defendants defrauded Medicare, Medicaid, and TRICARE in a kickback scheme involving prescription creams and ointments. The lawsuit was filed against All Heart Pharmacy and owner Rasha Shenoda; Med Solutions Pharmacy, Inc.; Med-Care Pharmacy, Inc.; Family Pharmacy, LLC; Goodman Drugs, Inc. dba PS Drugs; Maktina LLC dba St. Simon Pharmacy; Health First Infusion, LLC; and Value Medical Supplies, Inc. Akram Girgis, M.D. and Amgad Girgis are also listed defendants and owners of all defendant companies, with the exclusion of All Heart Pharmacy, which is owned by defendant Rasha Shenoda.
In the lawsuits, it is alleged that the pharmacies and the owners violated the Federal False Claims Act by paying millions of dollars in kickbacks to identify patients enrolled in federal or state health insurance programs with specific conditions or symptoms, dispensing medications irrespective of the patient’s need, and routinely waiving co-payments to induce patients to accept and keep the prescriptions.
It is further alleged that the kickbacks paid were paid to third party companies, in exchange for identifying patients that were covered by federal health insurance who suffered from pain or who had dry skin. The third party companies also identified the treating physicians. The pharmacies would then seek a prescription from the doctor, often falsely representing that the patient had requested it or that the doctor had prescribed it to the patient. Medications were selected by the involved pharmacies – not the doctors – based on the amount that Medicare or Medicaid would pay for certain formulations.
After receiving the prescription, the pharmacies would then dispense prescriptions containing over-the-counter ingredients to treat pain, stiffness, and dryness, via “compounded” prescriptions. While compounded prescriptions can be legitimate if tailored to the patient’s specific needs, that was not the case here. Instead, it is likely that compounded medications were chosen as part of the scheme due to their higher rates of reimbursements. Whether the prescriptions dispenses were compounded or not, all pharmacies and pharmacy owners chose highly reimbursed prescriptions that posed minimal risks to patients.
Specifically, the DOJ alleges that Akram Girgis and Amgad Girgis started the fraud scheme around 2012, eventually involving the ten retail pharmacies the brothers owned and/or controlled during the relevant time period. The Complaint states that from January 2, 2012, to January 31, 2020, the Girgis Brothers had business relationships with more than 100 marketers. The marketing services agreements between the Brothers and the marketers expressly said the marketers would be paid per Lead and that the marketing companies would “forward contact information on purchased Leads to [the Girgis Pharmacies] electronically in a form acceptable to [the Girgis Pharmacies] at least weekly or as otherwise reasonably requested by [the Girgis Pharmacies].” In total, from January 2, 2013, to March 17, 2020, the Girgis Pharmacies paid approximately $16,741,625.95 to marketers for Leads.
The DOJ also notes that leads were assigned to the Girgis Pharmacies based on insurance eligibility and took into account the volume of leads that had been previously assigned to individual pharmacies. Once the lead was assigned to a pharmacy, Med Care or Value Med employees would contact the lead and select the topical creams to dispense, followed by obtaining the prescription and ensuring that the cream continued to be dispensed. The only duties performed by pharmacists and pharmacy technicians employed at the Girgis Pharmacies was to process the prescriptions, dispense the drugs, and handle any returns or customer complaints. The creams selected by the employees were determined based on profit and the “pre-selected” creams were even listed on preprinted prescription templates used by the pharmacies to get prescriber signatures.
The scheme was uncovered by a former Pharmacy Technician and Supervisor at All Heart Pharmacy, employed from July 2016 to August 2018. The relator also worked briefly for Med Care Pharmacy.