Feds target compounding pharmacies as Tricare spending spikes

Federal and state investigators are targeting compounding pharmacies for fraudulently billing Tricare, leading four Florida pharmacies to pay a combined $12.8 million in settlments last month, according to the Wall Street Journal.

Although the Florida settlements have not yet been finalized, the WSJ reports that at least two pharmacies have agreed to settle civil allegations that they had sales representatives pay doctors to write prescriptions for pharmaceutical creams to treat pain and scars. The companies then billed Tricare for the prescriptions. However, A. Lee Bentley III, the U.S. attorney for the Middle District of Florida, told the WSJ that he expects to bring criminal charges against several other compounding pharmacies by early 2016.

Officials in California, Texas and Mississippi are also investigating compounding pharmacy billing, which could lead to civil and criminal charges. After facing criticism from the Government Accountability Office about its ability to identify fraudulent medical claims, Tricare has more than tripled its expenditures on compounded drugs nationwide, jumping from $500 million in 2014 to $2 billion in 2015, according to the WSJ. In May, Tricare reported an eight-fold jump in monthly spending on prescription medications, an increase officials credited to a spike in pain and scar creams.

Last year, high price tags associated with compounded drugs, including diaper rash treatment and scar reduction cream, led payers like Harvard Pilgrim, UnitedHealth Group and Blue Cross Blue Shield to cease coverage.

For more:
- here's the WSJ article

Related Articles:
GAO report criticizes TRICARE's medical claims review
$300M spike in TRICARE monthly spending linked to compounded drugs
Pricey compounded drugs come under scrutiny

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