A New York City pharmacist is facing both a civil complaint and criminal charges after allegedly bilking Medicaid out of $11 million. The pharmacist is accused of giving kickbacks to Medicaid patients in exchange for the opportunity to refill their prescriptions -- or to buy the prescriptions outright and bill Medicaid despite never intending to fill them. The patients were typically poor and the prescriptions were often for expensive HIV medications.
The kickback scheme resulted in millions of dollars billed to Medicaid, sometimes entirely fraudulently. Much of the money was spent on luxury purchases and travel, according to New York Attorney General Eric T. Schneiderman's office. Both state and federal law prohibit paying kickbacks for prescriptions or patient referrals.
The scheme involved NY Pharmacy, Inc., in Manhattan, along with two other pharmacies, NYC Pharmacy and New York Health First Pharmacy, which are now closed.
"Stealing from Medicaid in order to purchase fancy accessories and travel tickets is absolutely shameful," said Schneiderman in a statement. "We will not allow Medicaid to serve as a personal piggy bank for criminals."
The fraud scheme was investigated by undercover agents from the Attorney General's Medicaid Fraud Control Unit, who were posing as Medicaid recipients. According to the allegations, the pharmacist billed and received over $60,000 for drug refills submitted by the undercover agents, some of which were predicated on kickbacks and others of which were never filled at all.
An investigational audit discovered evidence that the pharmacies didn't even purchase enough medication to fill all the orders it was billing for. The three pharmacies billed Medicaid and other insurance companies more than $15 million for prescriptions, but only purchased a fraction of the drugs required to fill them.
The Attorney General's Office has filed a civil lawsuit and forfeiture complaint seeking $11 million in damages. The pharmacist has also been charged with third-degree grand larceny and a felony crime called "Medical Assistance Provider: Prohibited Practices (Kickbacks). Additional charges may yet be filed. If convicted of the most serious charge, the pharmacist could face seven years in prison.