Businesswoman Looking At Document Through Magnifying Glass

A registered pharmacist, the owner of two Alabama pharmacies, pleaded guilty to obstructing a 2012 federal audit of Medicare claims and agreed to pay a $2.5 million penalty to the government. The submission of the false and misleading documents by the pharmacy owner constituted obstruction of a federal audit of his Medicare claims, even though it was initially conducted by CVS/Caremark Inc., which administered prescription drug claims for Medicare Part D. Consequently, it is important to be aware of the role and authority of all auditors and to avoid submitting false or misleading documentation.

The pharmacies in question operated as both compounding and retail pharmacies. Medicare Part D generally will not reimburse pharmacies for compounded medications made using bulk pharmaceutical powders. Nevertheless, the pharmacies sought Part D reimbursement for compounded medications, primarily topical pain creams, made from bulk ingredients. To avoid claim denials, the “pharmacies, however, used the billing code for the tablet or capsule form of the ingredient[s].”

According to the charges and plea agreement, the owner obstructed a 2012 audit by CVS/Caremark when he caused to be submitted falsified and misleading documents stating that medications in tablet or capsule form had been used as ingredients for the compounded prescriptions by the pharmacies he owned.

The charges resulted from a joint investigation by the FBI, the HHS Office of Inspector General and the FDA’s Office of Criminal Investigation.