Two Texas compounding pharmacies kicked out of private network for suspected fraud

A pharmacy benefits manager has dropped a Fort Worth, Texas, compounding pharmacy facing a federal fraud investigation, and another under the same ownership after an audit raised "significant concerns of fraud," according to the Dallas Morning News.

One pharmacy, RXpress, is currently under federal investigation and could face prosecution under a recently implemented state law that allows the Texas State Board of Pharmacy to examine financial records of pharmacies under investigation. A whistleblower lawsuit against RXpress has accused the company of recruiting physicians to become preferred shareholders in exchange for patient referrals, according to the article.

In 2014, pharmacy benefits manager Prime Therapeutics removed RXpress from its private payer network that includes insurers such as Blue Cross Blue Shield of Texas. Another Fort Worth pharmacy, Xpress Compounding, was kicked out of the network in January and has filed a lawsuit against Prime claiming the pharmacy was unlawfully removed. Both companies are owned by a Fort Worth pharmacist, Lewis Hall, and his son, Richard Hall.

Prime discovered a 91 percent error rate in Xpress' claims, according to the Dallas Morning News article. The review suggested that the company was billing for "incorrect quantities or dosages" or drugs that were bought from an unlicensed source at a lower price. Unusual billing patterns caught the attention of Prime's fraud and abuse team after claims submitted by Xpress jumped from 39 in October 2014 to nearly 1,200 two months later.

Federal investigators have been targeting compounding pharmacies in several southern states, estimating the industry is linked to $500 million in fraudulent payments. After raiding facilities in Mississippi, Florida, Alabama and Utah, the owners of a Dallas marketing firm were indicted on fraud charges totaling $65 million. Legal experts say huge payment spikes--particularly in Tricare--have exposed fraudulent billing practices of compound pharmacies.

To learn more:
- read the Dallas Morning News article

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