Government Cracks Down on TRICARE Fraud Involving Compounding Medications

In March 2020, Andrew E. Fisher, the owner of Physician Specialty Pharmacy, a compounding pharmacy in Pensacola, Florida, was convicted for his role in a $4.8 million TRICARE fraud scheme. A jury found Fisher guilty of conspiracy to commit healthcare fraud and money laundering, among other charges.

Compounded medications, including pain, wound, and scar creams, are prescribed when patients cannot tolerate certain ingredients. It is common for the government to pay thousands of dollars per prescription of these unique medications. 

Prosecutors claim Fisher conspired with Michael Scott Burton to recruit TRICARE beneficiaries illegally. Fisher’s pharmacy later filled prescriptions written by a doctor who had never seen the patients. Physician Specialty Pharmacy then proceeded to submit claims for payment for the compounding medications to TRICARE. 

Fisher allegedly directed employees to maximize TRICARE billings, which often amounted to $10,000 per medication. Burton was paid 50 percent of TRICARE’s reimbursements in exchange for recruiting patients.  

According to the U.S. Attorney for the Northern District of Florida, the conspiracy engineered by Fisher "stole from taxpayers at the expense of the health and well-being of heroes who willingly served our nation or supported loved ones as they did so." A spokesperson for the Department of Defense stated that the defendant “conspired to deprive the DoD of precious resources needed for the healthcare of DoD Families."

Prior to Fisher’s conviction, five of his co-conspirators pled guilty and were sentenced to up to eight years in prison. Fisher is scheduled for sentencing next month, and his sentence will likely be even harsher.   

Unfortunately, this is not an isolated occurrence, and Andrew E. Fisher is not the only compounding pharmacy owner who has conspired with others to deprive service members’ of critical resources. 

During the first half of 2015, TRICARE spent $1.5 billion on compounded medication reimbursements. In fact, the Department of Justice has prosecuted over 120 individuals, and convicted dozens, in a case involving fraud perpetrated by 100 compounding pharmacies controlled by Choice MD. 

In a massive scheme, conspirators allegedly paid service members and their dependents to accept compounded medications that were medically unnecessary. Choice MD doctors wrote the prescriptions, and kickbacks were paid all-around once the pharmacies had been reimbursed. Stretching from California to Tennessee, the alleged scheme involved companies and individuals from at least four states.

A single defendant in the case caused $7.6 million worth of false claims to be submitted to TRICARE, receiving kickbacks amounting to $200,000. In total, Choice MD defrauded the government program out of at least $65 million.

Choice MD’s egregious scheme began around 2013. By 2014, the government observed that the cost of compounded medication prescriptions was growing exponentially and decided to take a closer look at compounding pharmacy billings. Whistleblowers have been instrumental in launching many of the subsequent fraud investigations, which resulted in over $280 million restitution for TRICARE. 

Recently, the government imposed strict regulations to prevent compounded medication fraud against TRICARE. However, certain schemes may be ongoing. Besides, even if misconduct has stopped, it is possible to prosecute fraud against the federal government dating back up to five years. 

If you have information about TRICARE fraud involving compounded medications, you can file a False Claims Act (FCA) lawsuit with the help of a whistleblower attorney. Under the FCA, tipsters can receive up to 30 percent of any recoveries resulting from the evidence and information they provide.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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