Mississippi, Florida Residents Part of Pharmaceutical Scheme

June 13, 2016

The U.S. government confiscated $11 million worth of properties involved in a healthcare fraud scheme centered in Mississippi that also involved residents of Florida, Alabama and Utah, according to a report in the Clarion-Ledger of Jackson, MS.

The Internal Revenue Service described the criminal activity as a compounding pharmacy scheme. The pharmacies engaged in “price rolling,” in which a pharmacy submits a bill to an insurance company to test the amount the provider will reimburse for a specific prescription. The claim is canceled, then another claim is sent for a compounded formula to see if that is reimbursed at a higher rate. Compounding is the process of creating a prescription unique for the patient’s particular needs, such as providing the same medicine in a pill and a liquid.

The IRS also said the scheme involved split billing, where a prescription is split into smaller portions. The split prescription can include separate dispensing fees as well as automatic refills that might not have been intended by the doctor.

Search warrants were served in January during the compounding pharmacy investigation. No arrests were made, but the properties were recently confiscated by the feds because evidence showed they were purchased with dirty money. Such civil forfeiture is based on the idea that the property, not the owner, has violated the law.

Following the 12 warrants, the government interviewed hundreds of people and confiscated 24 vehicles, five planes, two boats and money from 80 bank accounts totaling $15 million, according to a Mississippi Bureau of Narcotics spokeswoman.

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