Free, Imported or Substituted Drugs: What the Practice Actually Billed

A physician practice cannot bill Medicare for free drugs it did not purchase. The administration service may still be payable if the drug would have been covered when purchased, as the Centers for Medicare & Medicaid Services’ drug billing manual explains. If you handle donated stock, prepare infusions or transmit claims, you may see the difference between what arrived at the practice, what the patient received and what Medicare paid for.

That difference runs through these physician billing fraud cases. The allegations include charges for free chemotherapy and imported medication that lacked approval for U.S. sale. Drug substitution adds another mismatch: the patient receives a cheaper medication than the one billed. We follow the source of the drug, its identity, its use and the claim together.

What Medicare Pays for in a Buy-and-Bill Drug Claim

Buy-and-bill joins a practice’s inventory to a drug claim and an administration claim. The practice acquires the medication, holds it and administers it before billing the covered drug and the work of giving it. Those charges describe different things: the product and quantity on one side, the administration service on the other. The patient’s chart must support medical necessity and the treatment actually given.

The usual Part B drug pricing method uses average sales price, a manufacturer-reported measure. The practice’s own purchase invoice records a different transaction.

The no-cost drug rule makes the separation especially clear. The Centers for Medicare & Medicaid Services describes a zero-charge drug line accompanying a potentially payable administration service. That distinction matters to a biller looking at a drug code on a claim: the code can identify the medication without requesting payment for the medication itself. The amount charged and the administration line belong beside the code when we examine what the practice represented.

Free Stock, Samples and Other Patients’ Purchases

Free stock can explain how a practice administered more medication than its purchase invoices account for. Charitable supplies, grant drugs, samples and medication purchased by another patient describe different sources of inventory. The receipt of that stock and the practice’s right to seek drug reimbursement are separate questions.

The useful comparison follows the actual supply to the patient. A charitable delivery identifies where the drug came from and may identify the intended recipient. The administration record identifies the product and dose given. The transmitted claim shows whether the practice charged Medicare for that drug, its administration or both. We want to understand how those records became a bill, including who knew the supply was free.

Progressive Oncology’s Free Chemotherapy Claims

Progressive Oncology & Hematology and its owner agreed to a $1,450,000 settlement over allegations that included charging for chemotherapy received free through charitable or grant programs. The Justice Department’s July 2026 announcement concerned a Frederick, Maryland practice and also described separate allegations about vial use and treatment that never occurred. The free-drug allegation put charitable patient-specific stock on the other side of a reimbursement claim.

The government also alleged that the practice divided single-use-vial wastage among patients while billing each as receiving a separate vial. It further alleged that the practice billed for prescribed chemotherapy that was never administered. These allegations point to different evidence: the source of the stock, how it was used across patients and whether an ordered treatment happened at all.

We see charity turned into a government bill in that allegation. A program supplies chemotherapy to help a patient, and the practice allegedly charges taxpayers for the same free supply. Charity in, invoice out.

Imported Chemotherapy and Approval for U.S. Sale

Imported chemotherapy can raise a reimbursement question about approval for U.S. sale even when the patient received treatment. A New Jersey oncology practice, its physician and its practice manager agreed to a $1,700,000 settlement resolving allegations that they administered imported chemotherapy lacking that approval and billed Medicare for the drugs and infusion services. The Justice Department’s February 2017 announcement placed the alleged conduct between April 2010 and January 2011.

The practice manager allegedly ordered the drugs from a foreign distributor. That procurement role matters alongside the physician’s administration and billing: the person arranging the supply may know something about the product that the person preparing the claim never sees. The supplier, the product received and the claim for the patient’s treatment connect the purchasing decision to Medicare money.

The government’s allegation tied the imported product’s approval status to reimbursement eligibility. For an insider, the useful detail is which product the practice ordered and administered, then how it described that product to Medicare.

The Drug on the Claim Must Match the Drug Given

Drug substitution fraud can put a higher-priced medication on the claim than the one the patient received. Busting Bad Medicine: a Call to Action Addressing Healthcare, Fraud, Waste, and Abuse, published in the Journal of AHIMA in 2017, makes the mechanism concrete with an illustrative example:

The article explains that the substitution reaches the payer by coding the cheaper product as the more expensive one. Product identity therefore belongs in the comparison alongside the dose. The label, lot information and medication administration record can answer a question a total drug charge cannot: what actually went into this patient’s treatment?

An Alaska Plea Described the Stock Behind the Claims

In her criminal plea agreement, an Alaska rheumatologist admitted conduct involving underdosing, free samples, expired or different medication and stock purchased by other patients. Those practices supported claims exceeding the clinic’s purchased medication units. The admitted scheme joins inventory source, expiration, product identity and dose in the same billing problem.

Each detail changes what an insider may recognize. When the medication or dose changes, the administration record and claim must account for what the patient actually received. The plea shows why an invoice-only review can miss how the practice supplied the treatments it billed.

The Dose, the Discarded Drug and the Infusion Time

The claim’s drug units must correspond to the supported product and quantity. Infusion time measures the administration service, while the drug line measures the medication under its billing code. Start and stop times, dose records and purchase records each answer a different part of the payment question.

The Progressive allegations show why the comparison can reach across patients: medication from one vial allegedly generated claims for separate vials. We examine the receipt, the actual use and every claimed quantity together, so a free delivery does not disappear from the accounting simply because it generated no purchase invoice.

What Evidence Does a Whistleblower Need?

A whistleblower needs evidence connecting the drug received, the treatment delivered and the claim sent to the government. Purchase and no-cost delivery records, inventory, patient orders, administration records and claim lines can show different stages of the same treatment. Which of these you hold, and how they fit, is what we work out with you.

We connect those records with your knowledge of how the practice worked. The person who received a shipment may understand a discrepancy that a reviewer looking only at the claim would miss.

A physician practice qui tam case connects that insider knowledge to false claims for government money. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The practical starting point with us is the drug and the bill you know do not match, and the decisions inside the practice that explain why.

You Know What Was in the Vial

If you handled free stock, ordered imported medication or saw a different drug reach the patient from the one billed, speak with our whistleblower experts about the practice’s drug claims. We work beside you to build the case around the product, the patient and the people who controlled the billing. We bring in healthcare fraud whistleblower lawyers who understand physician drug billing, and we stay with you through the case.