Recently, Elan Yaish was sentenced to three years in prison for his role in a health care kickback conspiracy involving prescriptions for Medicare and TRICARE beneficiaries. According to the Information filed, from at least as early as around September 2017 until around December 2020, Yaish operated pharmacies, including Apogee Bio-Pharm LLC, of which he was President. Apogee was owned by William B. Welwart and operated by William B. Welwart, Yaish, and Ethan B. Welwart.
While operating Apogee, Yaish worked with others to engage in a scheme to pay marketing companies to direct prescriptions for higher-priced medications to their own pharmacies. The marketing companies identified in the Information were Beacon Medical Marketing, LLC (which shared common ownership with Apogee) and Health Pain Solutions, LLC. The telemedicine company identified in the Information charging Yaish was RediDoc LLC. Owners and operators of the marketing and telemedicine companies were identified as co-conspirators but not charged in the Information.
In furtherance of the scheme, the marketing companies identified Medicare and TRICARE beneficiaries to target for more expensive drugs and would then contact them by phone to try to entice them to agree to try the expensive medications, including pain creams, scar creams, and migraine medications. The “leads” were identified through various sources, including overseas call centers, and often included information such as the Beneficiary’s personal and health insurance information.
Following the phone call with the leads, portions of the call recording were then sent to telemedicine companies with the Beneficiaries’ medical information and pre-written prescription pads for the expensive drugs. The marketers paid the telemedicine companies for each beneficiary referred for a prescription and the telemedicine companies would pay the doctors to approve the prescriptions – sometimes without having had any contact with the Beneficiary and/or without making a “bona fide assessment that the medications were medically necessary.”
The marketing companies would route the prescriptions to the pharmacies with which they had kickback arrangements. The pharmacies would then fill the prescriptions and seek reimbursement from federal health care benefit programs, including Medicare and TRICARE. Upon receipt of reimbursement, the pharmacies would pay a portion to the marketing companies as a kickback.
Additionally, the marketers sometimes told Beneficiaries that the medications would be “no cost,” even in instances where the insurance company did require a copay from the Beneficiary. To subsidize potential copays, Yaish and the co-conspirators set up patient copay assistance programs.
The scheme resulted in a more than $32 million loss to Medicare and other federal health care benefit programs.
Yaish was not only sentenced to three years in prison, but also three years of supervised release and to pay restitution of $32 million. He was charged with – and found guilty of – conspiracy to violate the Anti-Kickback Statute, which was punishable by a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain from the offense (whichever is greater).