Pharmacy Manager Found Guilty of $54M TRICARE Bribery and Kickback Scheme

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Close-up Of Two Businesspeople Shaking Hand And Taking Bribe Under Wooden Table On Grey Background, representing TRICARE bribery

A man from Florida was found guilty by a federal jury for his involvement in a $54 million TRICARE bribery and kickback scheme. TRICARE is a federal program that offers health insurance benefits to active duty and retired service members as well as their families.

Rhe DOJ, HHS-OIG, the U.S. Department of Defense Office of Inspector General (DOD-OIG), the U.S. Department of Veterans Affairs Office of Inspector General (VA-OIG), and the FBI Tampa Field Office announced that David Byron Copeland, a 55-year-old part-owner and senior sales manager at Florida Pharmacy Solutions (FPS), a pharmacy specializing in compounded prescription drugs, has been implicated in a scheme involving “test billing” to maximize reimbursement from TRICARE.

TRICARE Bribery and Kickback Scheme Involving Fraudulent Behavior

Copeland and his accomplices targeted physicians treating TRICARE beneficiaries and offered bribes, such as luxurious hunting trips and extravagant dinners, to encourage prescription referrals to FPS. Additionally, they utilized “blanket letters of authorization” to modify prescription components and further increase profits.

Copeland and his team of sales representatives were given kickbacks amounting to millions of dollars, which were calculated based on a percentage of the TRICARE reimbursements for their prescribed medications. This scheme created a strong motivation to prioritize expensive compounded drugs, including pain and scar creams. Copeland strategically organized the kickback operation using companies that he had set up to handle the payments. Between late 2012 and mid-2015, TRICARE was charged an excess of $54 million for the compounded pharmaceuticals provided by FPS.

The jury convicted Copeland of soliciting and receiving illegal health care kickbacks, as well as offering and paying illegal health care kickbacks. They acquitted him of conspiracy to defraud the United States and to pay and receive illegal health care kickbacks. Sentencing is set for Sept. 14, and he could face a maximum of 10 years in prison for each kickback count. A federal district court judge will determine the sentence, taking into account the U.S. Sentencing Guidelines and other factors.

James Wesley Moss, the former chief executive officer of FPS, and Michael Gordon, a former FPS sales representative, have both pleaded guilty for their involvement in the scheme. They are currently awaiting sentencing September 14th.

What is TRICARE?

TRICARE is a healthcare program that provides comprehensive coverage for eligible members of the military community. It offers various health plans and benefits to ensure the well-being of service members, retirees, and their families.

What are some other TRICARE False Claims Act cases?

  • In 2023, an Arkansas Doctor was sentenced to more than 8 years in federal prison for accepting kickbacks, defrauding TRICARE, and more.
  • In 2014, HMA, a hospital chain, agreed to pay $15 million to settle allegations that it violated the FCA by submitting false claims to TRICARE and other federal healthcare programs. The lawsuit alleged that HMA pressured emergency department physicians to admit patients who should have been treated on an outpatient basis to increase billings.
  • In 2016, LHC Group, a provider of home healthcare services, agreed to pay $1.75 million to resolve allegations that it violated the FCA by submitting false claims to TRICARE. The government alleged that LHC Group billed TRICARE for services that were not medically necessary or were not provided as claimed.
  • In 2018, MedComp Sciences, a clinical laboratory, agreed to pay $2.6 million to resolve allegations that it violated the FCA by paying kickbacks to physicians in exchange for patient referrals for urine drug testing services covered by TRICARE and other federal programs.
  • In 2018, Prime Healthcare Services and its CEO, Dr. Prem Reddy, agreed to pay $65 million to settle allegations that they violated the FCA by improperly admitting patients and billing TRICARE and other government healthcare programs for medically unnecessary inpatient services.