A Utah pharmacy and a doctor’s office in Tennessee were allegedly involved in a kickback scheme that used US Marines in San Diego County to defraud TRICARE – the military’s health insurance service – out of at least $67 million.
The accusations are relate to the latest in a number of investigations into TRICARE fraud schemes involving compounded drugs. Similar scams have resulted in huge fraud losses to the federal government and caused a change in how TRICARE bills for compounded drugs.
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In the first four months of 2015 alone, the cost of TRICARE claims for compounded drugs was more than $1 billion, according to a report by the
San Diego Tribune. Federal investigators say that some of those claims came from The Medicine Shoppe, a Utah pharmacy that was for some reason issuing prescriptions to patients in Southern California.
The pharmacy, in Bountiful, Utah, has a license to ship drugs to California. It was opened in 1993 and sold in 2014 to two people who are identified in court documents only by the initials T.S. and W.W, according to the
Tribune. When the two new owners took over the shop, its TRICARE claims for compounded drugs spiked. In 2013, the year before The Medicine Shoppe was sold, it filled 218 compounded prescriptions for TRICARE patients. In 2014, it sold 541 of those prescriptions, and in the first four months of 2015, that number skyrocketed to 4,637 prescriptions – good for $67.3 million in reimbursement claims, according to the
Tribune.
Most of those prescriptions were authorized by emergency-room doctors who served as medical directors for Choice MD, a Tennessee-based medical practice owned by Jimmy and Ashley Collins. According to investigators, the prescriptions went to a group of San Diego-area Marines who were recruited by other Marines to participate in a medical study. The Marines were paid between $100 and $300 per month to talk to doctors over the phone, according to the
Tribune. While TRICARE allows telemedicine consultations, they must be held in doctor’s offices, not at home.
According to the
Tribune, investigators were able to track $45 million linked to The Medicine Shoppe to bank accounts owned by the Collinses or entities they controlled – including $4.4 million allegedly paid to recruiters in the scam. Prosecutors say that the Tennessee couple laundered the money by buying four properties for a total of nearly $5.7 million. The authorities are now trying to seize those properties under civil forfeiture laws.
As for The Medicine Shoppe, it was sold again in 2016 and renamed Bountiful Drug. The new owner, Mary Rogers, told the
Tribune that the business is no longer associated with its old owners.
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