Compound Pharmacy Fraud Investigations By the Department of Labor
Compounding pharmacies are becoming an important player in the health-care field, as many pharmacists see the need for personalized, patient-specific drugs – whether to make reduced dosages for children, to work around patient allergies, or to avoid oral medications for patients who have difficulty taking pills. However, concomitantly with the increase in such pharmacies has come an increase in fraud investigations by the federal government.
A New Trend. One of the latest trends in healthcare enforcement are Department of Labor investigations into compound pharmacies. Our attorneys have seen a sharp uptick in such investigations in recent months, and we believe that this focus is likely to continue.
Department of Labor. The Department of Labor, or DOL, has the power to investigate all health-care plans that are covered by ERISA. In the context of compound pharmacies, the DOL has been focused on healthcare fraud involving patients who are federal employees or former federal employees. Because these patients’ healthcare is federally funded, the DOL is incentivized to investigate any possible misuse of taxpayer money. While such investigations have been, in the past, a distant afterthought to Medicare fraud investigations, the DOL has recently engaged in widespread and powerful enforcement activities. Cases have been reported in Dallas, Houston, Austin, San Antonio and many other cities in the Southwest.
Compound Business. Compound pharmacies are generally lucrative businesses that bill high-dollar amounts for their products and services. Additionally, such pharmacies have become increasingly common over the last few years. Finally, the nature of the compounding business means that each pharmacy is empowered to create a medication in a way that it believes will best serve the patients for whom the medication is prescribed. These factors combine to create a “perfect storm” for a possible fraud investigation.
DOL Compound Fraud. The DOL will often allege that ingredients were added to a compound that were not needed or did not benefit the patient, but were merely for the purpose of increasing the pharmacy’s remuneration. Other common allegations made by the Department of Labor against compound pharmacies include overbilling, billing for unnecessary products, and providing automatic on-going refills, as well as billing for a compound that is identical to a commercially available product.
DOL Track Record. The attorneys of Oberheiden, P.C. have been hired extensively as lead defense counsel in complex Department of Labor investigations across the State of Texas and beyond.
Find out how a former chief healthcare prosecutor from the U.S. Attorney’s Office or managing partner Dr. Nick Oberheiden assess your case.
This information has been prepared for informational purposes only and does not constitute legal advice. Reading of this information does not create an attorney-client relationship. Prior results do not guarantee similar future outcomes. Oberheiden, P.C. is a Texas LLP with headquarters in Dallas. Mr. Oberheiden limits his practice to federal law.