Pharmacy Operators’ Telemedicine Scheme: Paid Remote Prescriptions Reused Across Pharmacies

The pharmacy operators’ telemedicine scheme brought in more than $54.3 million in Medicare Part D payments for medically unnecessary prescriptions, according to the Justice Department’s account of the criminal case. The criminal court documents summarized by the department describe how four pharmacy operators paid telemarketers to recruit beneficiaries and telemedicine companies to obtain physicians’ signatures. They then used the beneficiary information and prescriptions to bill Medicare, sometimes through multiple pharmacies they controlled. A prescription bought upstream could produce claims at more than one pharmacy downstream.

The department reported that each operator had pleaded guilty to a role in the conspiracy. The conduct ran from approximately 2018 through 2021, and the pharmacies included one in Jacksonville, Florida.

The Order Was the Product

According to the criminal court documents summarized by the Justice Department, the pharmacy operators paid to obtain prescriptions for medications that beneficiaries did not want or need, mainly topical creams. The business began with telemarketing companies recruiting Medicare beneficiaries to accept those prescriptions. Some of the pharmacy operators also ran companies that developed beneficiary leads.

The next payment bought access to the prescribing step. The operators paid telemedicine companies that employed or contracted with physicians who signed the prescriptions. Those physicians had no physician-patient relationship with the beneficiaries. They typically signed after a cursory telephone conversation or without contacting the beneficiary at all.

That sequence explains the business. Recruitment supplied the beneficiary, the telemedicine company supplied access to a physician’s signature, and the pharmacy submitted the claim. The clinical decision that should have justified the medication had become something the pharmacy operators paid to obtain. Medicare paid for creams the beneficiaries did not want or need.

Prescription Recycling Across Pharmacies

Prescription recycling in this criminal case meant submitting claims using the beneficiary information and signed prescriptions through multiple pharmacies the operators owned and controlled. The Justice Department describes the practice as “recycling.” The connection between the pharmacies is central to the story: the same operators controlled the businesses through which the purchased orders could be used again.

The remote prescription therefore mattered beyond the transaction that first produced it. We would examine where that prescription went, which pharmacy submitted each claim, and who controlled those decisions. A pharmacy’s own claim history shows one part of that path. Matching it with the beneficiary information, signed order and ownership records can show the relationship between submissions made under different pharmacy names.

What Does Kickback Mean in Healthcare?

In healthcare, a kickback buys a referral or order for something a program such as Medicare pays for. In this criminal case, the kickbacks paid for beneficiary recruitment and signed prescriptions that generated Medicare claims. The Justice Department identifies payments to both telemarketing companies and telemedicine companies. Following both payments explains how the pharmacy operators obtained the patient information and the order needed for their billing.

The HHS Office of Inspector General’s July 2022 telemedicine fraud alert describes the wider business model. Companies pay practitioners to produce orders for people with whom they have little or no contact, sometimes calling the work a review, audit, consultation or chart assessment. The resulting prescriptions or orders are then sold to businesses that bill for the items.

The alert also identifies arrangements that restrict practitioners to a single product category, provide insufficient clinical information or make no provision for follow-up. The workflow is built to produce a particular order, with the patient arriving through the sales process.

An Approval Fee Beside an Administrative Fee

In a separate civil case, Jackson & Coker LocumTenens and a physician admitted facts in the staffing company’s settlement agreement describing an approval fee alongside an administrative fee. The comparison for a pharmacy buyer is what earned the payment: an approved order.

Prescriptions Sold as Marketing Services

The same question runs through the civil allegations involving HealthRight and Vici Marketing. In that separate settlement announcement, the government alleged that the businesses obtained consumers’ insurance information, arranged unnecessary prescriptions without valid physician-patient relationships, and sold the prescriptions to pharmacies as purported marketing services. The price depended on the prescriptions’ volume and value.

That comparison belongs at the purchasing step. What the pharmacy bought, how the seller priced it and what the physician actually did can tell the same story even when the invoice calls the transaction marketing.

The Call Center’s View of the Prescription

A separate whistleblower complaint against Remote Solutions describes the order business from inside a call center. The complaint alleged that the company operated a Medicare durable medical equipment lead operation in Greenville, South Carolina. Its account of the call center’s purpose puts the clinical step inside the sales sequence:

This complaint concerns brace orders in a different operation. Its value as a comparison is the handoff it describes: the call center identifies insurance coverage, screens for a product and arranges the remote prescribing step before the referral is sold. A person working in that call center can see how the order begins, even when another business eventually sends the claim.

What an Insider Can Show

An insider can connect what the buyer paid for with what the practitioner signed and what the pharmacy billed. In a prescription-recycling case, we examine those connections across the pharmacies under common control.

Contracts, invoices and approval records show what earned a payment. Pharmacy ownership records and claim submissions then connect the order to the businesses that used it. We work with insiders to read those records together, including where the written description of the work differs from the work people actually performed.

Who Investigates Prescription Fraud?

The HHS Office of Inspector General and the FBI investigated this prescription fraud case. The U.S. Attorney’s Office for the Middle District of Florida and the Justice Department’s Criminal Division prosecuted it, according to the department’s announcement.

The order-purchasing pattern also matters to civil whistleblower cases. The Inspector General’s alert describes False Claims Act cases involving participants who caused claims for medically unnecessary items through paid remote orders. If you worked at a call center, staffing company or telehealth platform, our whistleblower experts can assess how your knowledge of the order buying and prescribing supports a civil case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Prescriptions Were Bought

If you saw payments for signatures or prescriptions passed between pharmacies under common control, speak to our whistleblower experts about how the prescriptions were bought. We build the case with you and bring in telehealth fraud whistleblower lawyers who understand prescription purchasing and Medicare pharmacy claims. We stay beside you as your knowledge of the operation becomes the evidence behind the case.