Thursday, the U.S. Attorney’s Office for the Northern District of Alabama announced that five employees of a Haleyville compounding pharmacy company have been indicted for allegedly conspiracy to defraud health insurance companies.
The conspirators allegedly included a district and an operations manager.
U.S. Attorney Jay E. Town announced the charges against employees of Northside Pharmacy, based in Haleyville and doing business as Global Compounding Pharmacy. The indictments were part of a nationwide health care fraud takedown. Global’s compounding and shipping facility was in Haleyville, but the pharmacy did its prescription processing, billing and customer service at its “call center” in Clearwater, Florida.
Attorney General Jeff Sessions and Department of Health and Human Services Secretary Alex M. Azar III on
Thursday announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts. Those charged include 165 doctors, nurses and other licensed medical professionals. The alleged health care fraud schemes involve more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
Doctors and other medical professionals, including pharmacists are largely responsible for the opioid epidemic which has dramatically increased the number of Americans addicted to opioids, leading to the deaths of 60,000 Americans in overdoses last year alone.
Thirty state Medicaid Fraud Control Units participated in Thursday’s arrests. In addition, HHS announced that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, FBI Deputy Director David L. Bowdich, Drug Enforcement Administration Assistant Administrator John Martin, HHS-Office of Inspector General Deputy Inspector General Gary Cantrell, IRS Criminal Investigation Deputy Chief Eric Hylton, Centers for Medicare and Medicaid Services Deputy Administrator and Director of the Center for Program Integrity Alec Alexander, and Defense Criminal Investigative Service Director Dermot F. O’Reilly.
Thursday’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced on Thursday aggressively target schemes billing Medicare, Medicaid, TRICARE, a health insurance program for members and veterans of the armed forces and their families, and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.
According to the CDC, approximately 115 Americans die every day of an opioid-related overdose, many of those Americans first became addicts due to drugs prescribed by their doctors.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation — and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
U.S. Attorney Town said, “The defendants in the north Alabama case helped their employer, Global Compounding Pharmacy, defraud millions from Medicare, Blue Cross Blue Shield of Alabama and other insurance systems by pushing unnecessary medications and billing for reimbursement. The greed of these defendants, and this company, resulted in the distribution of medication when there was no need, with the primary focus on profit rather than the efficacy of care. The costs are not just monetary, but have social and health impacts on us all.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money – it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
According to court documents, defendants from the national sweep allegedly participated in schemes to submit claims to Medicare, Medicaid and TRICARE for treatments that were medically unnecessary and often never provided.
In many cases, the charges are that patient recruiters, beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare.
Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of more than $2 billion in fraudulent billings. Virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
In the Global Compounding Pharmacy case in north Alabama, the defendants are charged with taking part in a multi-faceted, multi-million dollar scheme to defraud multiple insurance plans and their third-party pharmacy benefit managers by billing for fraudulent, often high-dollar prescriptions that Global would fill and bill for reimbursement. To maximize proceeds, Global engaged in additional fraudulent practices including automatically refilling and billing for prescriptions, regardless of patient need, and routinely waiving co-pays to incentivize patients to accept unnecessary medications and refills, according to charges and plea agreements in the case.
The U.S. Attorney’s Office charged Global Operations Manager Jeffrey South, District Manager Angie Nelson, sales representatives Roddrick Boykin, and Dawn Whitten, and biller Stacy Cardoza.
The defendants were all charged with one count of conspiracy to commit wire fraud, mail fraud and health care fraud. South, Nelson, Boykin and Whitten are also charged with varying counts of health care fraud. Whitten also faces a charge of aggravated identity theft.
South is 47 and lives in Florence, Alabama. Nelson is 40 and lives in Santa Rosa Beach, Florida. Boykin is 45 and lives in San Antonio, Texas. Whitten is 55 and lives in Columbus, Georgia. Cardozo is 28 and lives in Largo, Florida. Eight Global sales representatives of the company were previously charged by the U.S. Attorney’s Office and all have pled guilty to the conspiracy and scheme.
“These defendants, motivated by pure greed, helped conduct a complicated scheme to obtain unnecessary, high-priced medications, purely to gain the insurance reimbursement,” said Birmingham FBI Field Office Special Agent in Charge Johnnie Sharp Jr. “Rooting out health care fraud is central to the well-being of both our citizens and the overall economy. Health care fraud costs the country tens of billions of dollars a year, and the FBI seeks to identify and pursue investigations against the most egregious offenders involved in health care fraud through investigative partnerships with other federal agencies.”
According to court documents, Global hired sales representatives were responsible for generating prescriptions from physicians and other prescribers. To generate a high volume of prescriptions, Global hired representatives who were married or related to doctors and other prescribers, and encouraged sales representatives to volunteer at doctors’ offices where they would review patient files and push Global’s products to patients.
The FBI, U.S. Postal Inspection Service, HHS-OIG, DCIS and IRS-CI, investigated the Global cases, which Assistant U.S. Attorneys Chinelo Dike-Minor, Don Long and Nicole Grosnoff are prosecuting.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who, collectively, have falsely billed the Medicare program for more than $14 billion.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
A 2016 study estimated that illegal federal payments in Medicare and Medicaid cost taxpayers $140 billion a year, enough to build 13 Ford class aircraft carrier or almost seven times the NASA budget.
Alabama DHR announces grants providing temporary assistance for stabilizing child care
The Alabama Department of Human Resources announced on Friday a new grant program to provide assistance to licensed child care providers in the wake of the COVID-19 pandemic.
The Temporary Assistance for Stabilizing Child Care, or TASCC, grant program’s purpose is to stabilize the number of child care providers that are open and providing services, as well as encourage providers to reopen.
DHR is now accepting applications for TASCC grants. The deadline to apply is August 7, 2020. The total grant amounts will be based on each provider’s daytime licensed capacity with a base rate of $300 per child.
To be eligible for a grant, licensed providers must be open or plan to reopen no later than August 17, 2020, and continue to remain open for a period of one year from the date of receiving the grant award. As of this week, 1,306 of Alabama’s 2,448 child care facilities were open in the state.
“We are proud to offer this program as a support and an incentive to an important sector of our economy. These grants will give the support many providers need to reopen and assist those already open,” said Alabama DHR Commissioner Nancy Buckner. “This program is going to be vital for our child care numbers to reach the level required to provide adequate services as parents return to work. We have already made significant strides in reopening facilities over the past several months; in April only 14 percent were open while now 53 percent are open.”
These grants will provide support for paying employees, purchasing classroom materials, providing meals, purchasing cleaning supplies, providing tuition relief for families, as well as other facility expenses.
DHR recommends child care providers read all guidance prior to submitting a TASCC application. Child care providers need to complete the application to determine the estimated grant amount. Grant applications will be processed as they are received and grants awarded once approved.
An online fillable application is available for the TASCC grant at www.dhr.alabama.gov/child-care/. The application must include an Alabama STAARS Vendor Code in order to be processed. For questions regarding the application, please email DHR at [email protected].
Gov. Ivey awards grant for new system to aid child abuse victims
Gov. Kay Ivey has awarded a $375,000 grant to establish a statewide network that will ensure that victims of child abuse receive immediate and professional medical care and other assistance.
The grant will enable the Children’s of Alabama and the University of Alabama at Birmingham Department of Pediatrics to collaborate with the Alabama Network of Children Advocacy Centers in creating the Child Abuse Medical System.
“Child abuse is a horrendous crime that robs children of their youth and can negatively affect their future if victims do not receive the proper professional assistance,” Ivey said. “I am thankful for this network that will ensure children get the professional attention they need and deserve.”
The medical system will be a coordinated statewide resource that includes pediatric physicians, nurse practitioners, nurses and other medical professionals along with specialized sexual assault nurse examiners.
The Alabama Department of Economic and Community Affairs is administering the grant.
“ADECA is pleased to join with Gov. Ivey and those dedicated people who are part of the Child Abuse Medical System to support these children at a time they need it most,” said ADECA Director Kenneth Boswell.
Ivey notified Tom Shufflebarger, CEO of Children’s of Alabama, that the grant had been approved.
ADECA manages a range of programs that support law enforcement, economic development, recreation, energy conservation and water resource management.
U.S. Attorney Jay Town announces resignation
Jay Town, the U.S. attorney for the Northern District of Alabama, on Friday announced his resignation and plans to work at a Huntsville defense contractor and cybersecurity solutions company.
Town’s resignation will be effective Wednesday, July 15, according to a press release.
“After much thoughtful prayer and great personal consideration, I have made the decision to resign as the United States Attorney of the Northern District of Alabama. I have tendered my resignation to Attorney General William Barr. General Barr expressed his gratitude for my service to the Department of Justice and to the Northern District and, despite having hoped I would continue in my role, understood and respected my decision,” Town said in a statement.
“I am extremely grateful to President Trump, to whom I also tendered a letter, for his special trust and confidence in me to serve as the U.S. Attorney. It was an honor to be a part of this Administration with an unrivaled class of United States Attorneys from around the nation. I will forever remain thankful to those who supported my nomination and my tenure as the U.S. Attorney,” Town continued.
Town said his job with the unnamed Huntsville defense contractor and cybersecurity solutions company is to begin later this year, and the company is to announce his position “in a few weeks.”
“The Attorney General of the United States will announce my replacement in the coming days or weeks,” Town said in the release.
Town has served in his position since confirmation by the U.S. Senate in August 2017. Prior to that appointment, Town was a prosecutor in the Madison County District Attorney’s office from 2005 until 2017.
Attorney General William Barr in a statement Friday offered gratitude for Town’s three years of service.
“Jay’s leadership in his District has been immense. His contributions to the Department of Justice have been extensive, especially his work on the China Initiative and most recently as a Working Group Chair on the President’s Commission on Law Enforcement and the Administration of Justice. I appreciate his service to our nation and to the Justice Department, and I wish him the very best,” Barr said in a statement.
The U.S. Justice Department in April 2019 notified Gov. Kay Ivey that the department’s lengthy investigation into the state’s prisons for men found systemic problems of violence, sexual assaults, drugs and corruption which are likely violations of the inmates’ Constitutional protections from cruel and unusual punishment.
Town’s office leads the discussions between the U.S Department of Justice and the state on the prison conditions.
Problems with violence, deaths and drugs in Alabama’s overcrowded, understaffed prisons have not markedly improved in the year’s since the U.S. Department of Justice released its report.
Alabama’s daily COVID-19 deaths second highest since start of pandemic
In the past two weeks the state recorded 190 coronavirus deaths, a 38 percent increase from the previous two weeks.
Alabama saw 35 deaths from COVID-19 on Friday, the second highest daily number of deaths since the pandemic began.
The previous record daily high was May 12, when the state recorded 37 coronavirus deaths. Prior to that, the high was on April 22, when Alabama saw 35 deaths from the virus. In the past two weeks the state recorded 190 coronavirus deaths, a 38 percent increase from the previous two weeks.
While cases have been surging since mid-June, deaths have largely remained stable. Deaths are considered a lagging indicator, meaning that it takes longer for deaths to begin rising after cases and hospitalizations begin rising.
“The fact that we’re seeing these sharp increases and hospitalization in cases over the past week or two is really concerning,” said UAB expert Dr. Jodie Dionne-Odom earlier this week. “And we expect, given the lag that we know there is between cases and hospitalization — about a two-week lag, and a three-week lag between cases and deaths — that we’re on a part of the curve that we just don’t want to be on in our state.”
It’s unclear whether this new rise in deaths will become a trend, or whether it is a one-day anomaly, but the 14-day average of deaths per day is now nearly as high as the previous peak on May 14 — weeks after the state hit its first “peak” in cases per day in late April. The previous high of the 14-day average of deaths per day was 16 on May 14. The average is now at 14 deaths per day, on average.
The uptick in deaths comes after days of record-high new daily COVID-19 cases and hospitalizations. The state added 1,304 new COVID-19 cases Friday, down from Thursday’s record-high of 2,164, but the trend of rising daily cases has continued largely unabated since early June.
The 14-day average of daily tests was at an all-time high Friday, at 8,125, which was 308 more tests than the previous high, set Wednesday. The percent of tests that were positive also increased, however, so the new cases can’t be attributed solely to more testing.
The 14-day average of the percent positivity was 14.22 on Friday. Excluding Thursday’s figure, because the Alabama Department of Public Health didn’t publish total tests administered on Thursday, which threw off percent positive figures, Friday’s 14-day average was the highest it’s been since the beginning of the pandemic.
There were a few higher 14-day average percent positivity days in April, but those numbers were skewed as well, because ADPH wasn’t able to collect all testing data from commercial labs during that time period.
Along with surging new cases, the number of COVID-19 patients hospitalized on Thursday was higher than it’s been since the beginning of the pandemic. On Thursday 1,125 coronavirus patients were being treated in state hospitals, which was the fifth straight day of record current hospitalizations.
UAB Hospital’s COVID-19 Intensive care units were nearing their existing capacity earlier this week. The hospital has both a COVID ICU and a COVID acute care unit designated to keep patients separated from those who don’t have the virus, but it has more space in other non-COVID units should it need to add additional bed space.
Hospitals in Madison County this week are also seeing a surge of COVID-19 patients. Paul Finley, the mayor of the city of Madison, told reporters Wednesday that local hospitals were reporting record numbers.