An Alpharetta, Ga., man who worked as a medical sales representative pleaded guilty Tuesday in federal court to involvement in a scheme to bilk the military insurer Tricare out of millions of dollars by recruiting doctors to prescribe high-cost prescriptions from compounding pharmacies to be delivered to beneficiaries who didn't need the medications.
In the scheme, doctors and beneficiaries were paid kickbacks for their involvement in violation of the federal anti-kickback statute.
Kenneth Myers, 43, formerly of Maumelle, pleaded guilty before U.S. District Judge Kristine G. Baker to one count of conspiracy to generate kickbacks and generate fraudulent prescriptions in a scheme that defrauded the military insurer out of an estimated $12 million between 2015 and 2018 in the Eastern District of Arkansas alone. He is the ninth defendant in the Eastern District of Arkansas to plead in the matter.
Investigations began across the country after Tricare paid nearly $2 billion for compounded prescription drugs in 2015 alone, constituting an 18-fold increase over previous years.
Myers appeared before Baker via video conference link, as did his attorneys, Sonia Fonticiella and Latrece Gray. Assistant U.S. Attorney Alex Morgan was present in the courtroom, as was Baker.
In a nod to the sometimes precarious nature of such video proceedings, Baker advised Myers that if the connection were to fail, she would halt the hearing at that point until a connection could be reestablished.
Although Myers and his attorneys sometimes had difficulties hearing what was being said, the hearing proceeded uninterrupted.
Myers was indicted along with Derek Clifton, a former Baxter County High School basketball coach turned medical sales rep who was sentenced to four years in prison for his part in the scheme, and Dr. Joe David "Jay" May of Alexander.
Myers collected nearly $70,000 for recruiting Tricare beneficiaries to receive expensive compounded drugs, for which Tricare paid over $340,000. Myers acknowledged offering Tricare beneficiaries money to receive the drugs and that medical providers, including May, rubber-stamped those prescriptions without consulting the Tricare beneficiaries.
The compounded drugs in question included pain creams, scar creams, supplements and other compounds that prosecutors said were prescribed to patients who did not consult with the physician writing the prescription and often had no need of the drugs, but would receive payment for accepting the prescriptions.
Upon learning a federal agent planned to interview a Tricare beneficiary about his prescription, Myers instructed the man to lie by claiming he had been examined by a doctor before getting his prescription.
When Myers was later interviewed, he lied to the FBI by claiming he played no role in securing prescriptions and instead directed beneficiaries to consult their own doctor.
May is scheduled for trial Dec. 6. He faces charges of conspiracy, wire fraud, mail fraud, violating the anti-kickback statute, aggravated identity theft, lying to the FBI, and falsifying records in a federal investigation.
Others who were indicted and have entered pleas in the scheme include Albert Glenn Hudson, 40, of Sherwood; Derek Clifton, 39, of Alexander; Donna Crowder, 66, of North Little Rock; Jennifer Crowder (formerly Bracy), 38, of Little Rock; Keith Benson, 50, of North Little Rock; Keith Hunter, 52, of Little Rock; Angie Johnson, 50, of North Little Rock; and Blake Yoder, 40, of Scott.
Conspiring to violate the anti-kickback statute is punishable by up to five years in federal prison, three years of supervised release, and a $250,000 fine.
Nationally, it is estimated that fraudulent prescriptions from compounding pharmacies cost Tricare over $2 billion before the insurer cracked down on the scheme.