The chief compliance officer of a Florida pharmacy holding company faces up to 20 year’s imprisonment after a federal jury convicted him of fraudulently billing Medicare over $50 million today.
According to court documents and evidence presented at trial, Steven King was the chief compliance officer of a pharmacy holding company that fraudulently billed Medicare over $50 million for dispensing lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want. King and his co-conspirators operated A1C Holdings LLC, which held pharmacies in various states, including All American Medical Pharmacy in Warren, Michigan. When A1C secured prescriptions and refills on behalf of its pharmacies for medically unnecessary lidocaine and diabetic testing supplies, the jury found they violated Medicare and pharmacy benefit manager rules.
King and his co-conspirators took several steps to conceal their scheme, including enrolling their mail order pharmacies as brick-and-mortar retail locations to evade more rigorous oversight, shipping prescription refills for high-reimbursing medications and supplies without patient consent, concealing the ownership of A1C Holdings LLC and its pharmacies, and transferring patients among pharmacies without patient consent. The Justice Department charged King and his co-conspirators took each of these steps to continued billing Medicare for profitable medications and supplies.
As chief compliance officer, King was in a unique position to prevent and report the fraudulent scheme, but he used his position to defraud Medicare instead.
The jury convicted King of conspiracy to commit health care fraud and wire fraud. His sentencing is scheduled for September 14. He faces a maximum penalty of 20 years in prison.
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Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.
A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.
Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.
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This is a well-written and informative blog post. It is concerning to read about the fraudulent scheme to bill Medicare for unnecessary medications and supplies. My question is, what steps can be taken to prevent future occurrences of such fraudulent schemes and hold those involved accountable? Thank you for sharing this informative blog post. As a reader, I appreciate learning about these important issues affecting the healthcare industry. My question is, what measures can be taken to prevent fraudulent schemes like this from happening in the future and ensure those involved are held accountable?
There are a multitude of current federal and state activities targeting healthcare fraud. Unfortunately, the investments, disproportionately focus on nitpicky and often unreasonable harassment of healthcare providers well failing to identify and address, obvious fraudster, such as the one covered in this article.
Currently, most fraud detection and enforcement efforts are focused on creating often times retroactively hypertext, Michol guidance, and then auditing and enforcing it against physicians and other healthcare providers operating in good faith, but without a proper understanding of these hypertechnical, and often times late arriving rules. The government spends an extraordinary amount of money, directly and through its multiple levels of auditors to identify these technical Gochie claims and go after physicians and others, while ignoring obvious fraud such as this. Meanwhile provider cost, and the resulting cost of patients in the insert system are driven up by these misdirected fraud activities. Basically, the government needs to re-think it’s definition of fraud. It is allowed the industry for audits to become the mass, consumer of most of our healthcare, dollars at the expense of care while facilitating fraud such as this by actual fraudsters.
If the government redefined fraud wouldn’t they also become targets? Thank you for your answer and exposing the problem.