MTA Telemedicine Prescription Fraud: Cash for Prescriptions Employees Did Not Need

The MTA telemedicine prescription fraud scheme defrauded the Metropolitan Transit Authority’s health benefits plan of more than $2.8 million, according to the Justice Department’s account of the criminal case. A recruiter used cash payments to steer employees into medically unnecessary compounded prescriptions. The recruiter sent beneficiaries to remote doctors paid through the company marketing the drugs. For someone inside a benefit plan, a marketing operation or a pharmacy, the revealing connection is between the offer of money, the prescription it produced and the plan that received the bill.

In its February 7, 2019 account of the criminal case, the Justice Department described an MTA bus driver’s guilty plea and admission that he knowingly caused fraudulent billing for unnecessary compounded medications. Another former MTA bus driver had recruited him. Both worked as sales representatives for Company A, a New Jersey marketing company selling compounded prescriptions.

The MTA’s health benefit supplied the customer base. The doctor’s prescription supplied the route to billing it.

How the MTA Prescription Scheme Worked

The recruiters targeted MTA employees because their health benefits plan covered compounded medications. The bus driver admitted participating in the scheme from as early as April 2016 through August 2017.

The products included scar creams, pain creams and metabolic supplements. Compounding means combining, mixing or altering drug ingredients to make a medication tailored to an individual patient, as the Justice Department explains in its account of a separate compounded-prescription case.

In the MTA case, the admitted scheme worked backward from coverage. The bus driver whose admission the release describes paid beneficiaries to obtain the drugs and directed them to physicians paid through the marketing arrangement.

Company A marketed the prescriptions, its sales representatives recruited beneficiaries, and physicians prescribed the drugs that generated claims against the MTA plan. An employee recruiter could help generate a medical bill without practicing medicine.

What Does Kickback Mean in Healthcare?

In this prescription scheme, the kickback was a cash payment to get a beneficiary to obtain medication the beneficiary did not need. According to the Justice Department’s account of the bus driver’s admission, he paid monthly cash bribes of approximately $100 per prescription.

The payment was tied to the prescription, so obtaining the drug became a way for the beneficiary to earn money. The monthly arrangement gave the recruiter a recurring reason to keep prescriptions coming. For an insider who saw the offers or payments, that is a different view of the transaction from the prescription sitting in a pharmacy’s system.

Employees received cash for prescriptions they did not need. Their own health benefits plan bore the fraudulent bills. Bus drivers had become drug sales representatives, turning coworkers’ prescription coverage into a market for unnecessary medication.

The Remote Prescriber Completed the Transaction

The recruiter referred MTA beneficiaries to telemedicine physicians paid through Company A and affiliated businesses to ensure that the drugs were prescribed regardless of medical necessity, according to the same criminal-case account. The marketing arrangement reached both the beneficiary seeking the prescription and the physician writing it.

That connection puts the commercial relationship inside the clinical workflow. Someone reviewing only the prescription would see the drug and the prescriber. Someone familiar with the recruitment could explain why the beneficiary sought it and who directed the beneficiary to that doctor.

The wider telemedicine industry separates these roles across businesses. A platform can provide communications, a management company can handle scheduling and marketing, a professional practice can supply the clinician, and an employer or health plan can fund covered care.

The Department of Health and Human Services’ Office of Inspector General’s 2022 telemedicine fraud alert describes arrangements that recruit patients and practitioners, pay for reviews or signatures, and transfer resulting orders to downstream buyers. In that model, the order itself is the commercial output. The MTA case gives that wider concern a concrete form: beneficiaries received cash to obtain prescriptions, while the marketing business also financed the physicians to whom they were referred.

What an Insider Can Connect

A benefits employee may recognize the coverage being targeted. Someone in the marketing operation may know what beneficiaries were offered and how they reached the telemedicine service. For the MTA arrangement, the useful connection is between an offer made to a beneficiary, the prescription obtained through the referral and the claim charged to the plan.

A 2024 Rutgers University Law Review analysis, Plausible Cause: Connecting the FCA and AKS in the Context of Health Care Fraud, examines how payments that violate the Anti-Kickback Statute connect to false claims. That link, from the cash to the bill, is what an insider may be able to show.

That connection is where our whistleblower experts start. A person who understands why beneficiaries were recruited or how doctors received their referrals may be able to explain something the billing record alone leaves invisible.

The Payer Matters to the Whistleblower Case

The Metropolitan Transit Authority prosecution concerned a privately funded employer health plan. Whose money paid the claims shapes the case, and that is what we work out with you.

Compounded-prescription schemes have also reached TRICARE, the federal health care program for military members and their families. In the Patient Care America civil settlement, the government alleged that the pharmacy paid outside marketers to target military beneficiaries for creams and vitamins formulated to maximize reimbursement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We assess the payment route and the evidence with you to determine how your information fits a potential civil whistleblower case.

What Are Some Examples of Prescription Fraud?

Paid recruitment of beneficiaries, prescriptions generated without meaningful patient contact and sales of prescriptions to pharmacies all appear in the government’s telemedicine cases. The MTA case shows the employee-recruitment side. A separate civil case involving Vici Marketing and Health Savings Solutions shows how marketers allegedly earned money from the prescriptions themselves.

In that case, the government alleged that marketing businesses sold prescriptions to pharmacies under the guise of marketing services, with payments based on prescription volume and value. The whistleblower’s complaint described the thin patient contact behind the orders:

The allegation puts the missing medical conversation beside the commercial one. A marketer could know the insurance coverage and the value of a prescription while the prescriber barely knew the patient.

Across these cases, the recurring concern is control over the prescription: who brought in the beneficiary, who paid for access to the prescriber, what medical work occurred and who earned money when the order became a claim. An insider who can connect those decisions brings something more useful than an unexplained rise in pharmacy spending.

You Know Why the Prescription Was Written

If you saw employees paid for prescriptions or doctors fed referrals through a drug-marketing arrangement, speak to one of our Whistleblower Experts about how those prescriptions were bought. We build the case with you and bring in healthcare fraud whistleblower lawyers who understand prescription kickbacks and the health plans billed for them. We stay beside you through the pursuit of a civil recovery to build your strongest prescription fraud whistleblower case.