Insurance Fraud NEWS

Coalition Against Insurance Fraud

Scammer admits to $505M in claims for meds in Florida, Texas

October 15, 2018, Nashville, TN — A man who owned a telemedicine company called HealthRight did not contest government claims the company was responsible for $505 million in fraudulent insurance claims that involved 531 patients in East Tennessee and tens of thousands of other victims across 22 other states, according to federal court documents unsealed Thursday afternoon.

Scott Gregory Roix pleaded guilty to conspiracy to commit both heath-care fraud and wire fraud on Sept. 26. Rather than wait on an indictment, Roix admitted guilt through a 32-page, scrupulously documented roadmap of the health-care fraud that commenced in June 2015 and concluded on April Fools’ Day 2017. Croix is scheduled to be sentenced on Feb. 13.

The scope and complexity of the fraud are staggering. It’s unclear why the case is being adjudicated in U.S. District Court in Greeneville.

Roix and his alleged coconspirators, four pharmacists or pharmacy owners in Florida and Texas, allegedly submitted more than $930 million in fraudulent insurance claims, according to a separate 40-page indictment unsealed Thursday afternoon.

The alleged coconspirators haven’t entered guilty pleas, but government-approved representations in Roix’s plea document appear to leave the four with no opportunity for a credible defense.

The cash cows for Heathright were suspect weight-loss pills, skin creams and testosterone supplements. HealthRight also obtained large quantities of inexpensive drugs – some of them not approved by the Food and Drug Administration – and then illegally sold them to the partner pharmacies to be marketed at wildly inflated prices, according to the criminal information.

In one instance, HealthRight marketed a $27 ointment that contained lidocaine, a mild painkiller, that sold for $381, a 1,311-percent markup. In another, an antacid that HealthRight purchased for $300 was sold for $3,413, a 1,038-percent markup. The markup on a single prescription for cyfrazol, a vitamin D supplement that’s not FDA-approved, was 1,227 percent, according to the indictment.

HealthRight generated tens of thousands of leads for unscrupulous boiler-room callers through patently false advertising on Facebook and Yahoo-related websites. HealthRight aggressively marketed a product called “pure garcinia cambogia,” which was targeted at overweight people uninterested in diets or calorie-burning exercise.

The telemedicine firm represented the “all-natural” substance “prevents fat from being made,” and “increases seratonin levels, which helps you feel fuller longer, helps maintain healthy stress hormonal cortisol that can decrease belly and thigh fat.”

One of the ironies of the nine-figure fraud is that telemedicine is promoted as a low-cost contact with a health professional that’s an alternative to a traditional office visit. Heathright did everything in its power to eliminate patient-doctor contact, and they were successful more than 95 percent of the time, according to court documents.

HealthRight falsely represented that patients’ complaints were reviewed by a doctor before the complaints were forwarded to a health professional in the state where the patient lived.

“During the conspiracy, Roix … caused HealthRight to prevent the formation of valid doctor-patient relationships … by preventing doctors and patients from speaking to one another; falsely representing to doctors that patients had requested a specific number of refills,” and lying about the patients’ medical histories.

“Scott Roix and HealthRight did this because they understood that if doctors were able to speak freely with patients, the doctors would not issue prescriptions for the inflated (medications) since the patients had not wanted the inflated (medications) in the first place,” the criminal information further states.

HealthRight “medical personnel” were telemarketers with no medical training, but were skilled in improperly obtaining health-insurance information. The company provided the telemarketers with scripts that indicated they knew the most about the drugs, and seeking information elsewhere would be misleading.

The telemarketer also had scripts for patients who wanted to discontinue the drug regimen and stop the inflated monthly drug charges.

What’s important is that HealthRight only prescribed drugs that it had obtained at a deep discount, regardless of the patients’ needs. HealthRight received a 50 percent kickback for the expensive drugs, which violates federal law.

If an insurance company declined to pay for a particular drug, HealthRight would substitute another high-priced drug without regard to its efficacy and without informing the patient. The participating pharmacies routinely “test-billed” expensive drug to learn the maximum amount of money the company could collect, according to court documents.

Federal law prevents companies like HealthRight from profiting from drug sales. The company hid drug sales to the partner pharmacies by accounting for the payments as “marketing services,” according to the criminal information.

Source: Citizen Tribune

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