HealthRight: Selling Prescriptions as Marketing Services

In the HealthRight telehealth fraud settlement, the telemarketing company, its chief executive and other marketing businesses agreed to pay $2.5 million over allegations that they sold unnecessary prescriptions to pharmacies as marketing services. The alleged fees followed the volume and value of the prescriptions. A business presented as patient acquisition was allegedly selling the prescription that made the pharmacy’s insurance claim possible.

The Justice Department’s August 1, 2019 settlement announcement named HealthRight, Health Savings Solutions, Vici Marketing and Vici Marketing Group, together with HealthRight’s chief executive, as the settling parties. The government alleged that their conduct caused false claims to federal health care programs. The settlement covered two pharmacy relationships, with different marketing companies receiving the money.

The announcement identified TRICARE, Medicare and the Federal Employees Health Benefits Program among the programs being protected. Taxpayers were funding prescriptions the government said patients did not need.

What the Civil Settlement Says HealthRight Sold

The government alleged that the marketing companies obtained consumers’ insurance information through deception, arranged prescriptions for pain creams and similar products, and sold the prescriptions to pharmacies. It said the prescriptions were medically unnecessary and did not come from a valid doctor-patient relationship.

The Oldsmar and Synergy Payment Allegations

The Oldsmar Pharmacy allegations concerned payments to Health Savings Solutions beginning in September 2014. The government alleged that the chief executive directed the arrangement and that payments tracked the value and volume of the prescriptions Health Savings Solutions solicited. Two whistleblowers brought those allegations in a False Claims Act qui tam case.

The whistleblower complaint against Vici gives a more concrete account of the alleged economics. It describes telemarketers recording patients’ insurance and medical information. Z Stat Medical, doing business as Oldsmar Pharmacy, allegedly paid Vici after the pharmacy received reimbursement:

The alleged payment rewarded the marketer for the pharmacy’s prescription business. The complaint also alleged that the prescribing physicians rarely or never communicated with the patients. Insurance information and a prescription could move through the operation while the patient had little or no contact with the physician whose name supported it.

The same complaint alleged that Z-Stat sought authorization even when it could not confirm the patient’s address:

The HealthRight arrangement involved Synergy Pharmacy. The civil settlement covered allegations that HealthRight received payments from Synergy from June 2015 through October 2018, again based on the prescriptions’ value and volume.

The government also addressed the HealthRight/Synergy conduct in a criminal case. In its announcement of the criminal charges and pleas, the Justice Department reported that HealthRight and its chief executive pleaded guilty to conspiracy for their roles in the prescription scheme in September 2018.

Why Marketing Services Was the Point

In HealthRight’s civil case, the government focused on what the marketing companies were paid to produce. The alleged price depended on prescriptions. That is why the connection between a marketing payment and the resulting orders tells more of the story than the service description alone.

The HHS Office of Inspector General described the wider arrangement in its July 2022 telemedicine fraud alert: companies recruit patients and practitioners, supply information for reviews, compensate practitioners and pass the resulting orders to businesses downstream. The alert identifies inadequate patient contact, compensation tied to order volume, restricted product choices and missing follow-up among the characteristics it examines together.

Synergy’s Prescription Claims and PBM Deception

The criminal case against a Synergy pharmacy owner shows how the prescription source mattered to pharmacy benefit managers. The Sixth Circuit’s account of the trial evidence describes HealthRight prescriptions generated with little clinical involvement and patients who had not sought the expensive medications.

The trial evidence described in that criminal opinion included prefilled prescription pads, rejected files sent to another doctor and the removal of HealthRight’s name. A rejection could become another opportunity to obtain a signature.

The contracts described lump-sum payments, but the trial evidence connected those payments to the prescriptions actually generated. Calling the payment a fixed fee did not explain what the pharmacy was buying. The connection to prescription volume was still there.

On the payer side, the criminal trial evidence described Synergy’s dealings with Express Scripts and CVS Caremark. Express Scripts’ contract required a valid doctor-patient relationship involving an interaction. CVS Caremark terminated Synergy after an audit. Concealing HealthRight’s role kept the source of the prescriptions out of the payer’s view.

The court rejected the pharmacy owner’s argument that delivering real drugs to real patients defeated the fraud case. Its analysis concerned deceptive reimbursement claims, including concealment of the referral source and representations about the prescriptions. A doctor’s signature did not settle whether the prescription was valid. The insurers paid for drugs on the strength of a clinical process that the claims misrepresented.

The earlier 2018 indictment announcement put the wider network’s alleged claims at no less than $931 million and alleged that private health benefit programs, including Blue Cross Blue Shield of Tennessee, were defrauded of approximately $174 million.

What Evidence Is Needed to Prove Fraud?

Proving healthcare fraud in a prescription-generation case means connecting decisions across several businesses. That is the work we do with an insider who knows what happened inside one of them.

A call-center employee may know how insurance and medical information entered the file. A platform worker may know how a rejected prescription reached a different clinician. A pharmacy or payment employee may understand how the contract’s stated fee related to prescription counts, or how the source of the prescriptions was described during an audit. Each perspective can explain a part of the transaction that the final claim leaves out.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

In this case, the Justice Department announced a combined share for the two whistleblowers who brought the Health Savings Solutions/Oldsmar allegations.

You Know What the Marketing Payment Bought

If you handled patient calls, prescription routing or pharmacy payments, speak to one of our whistleblower experts about what the marketing arrangement actually bought. We build the case with you, bring in telehealth fraud whistleblower lawyers who understand prescription-generation and pharmacy-payment arrangements, and stay beside you through the pursuit of a recovery.