A recent health care fraud guilty plea by a physician has caught the attention of prescribing physicians and the broader industry surrounding compounded medications.Under the plea agreement in New Jersey District Court, the physician admitted to prescribing approximately $25 million worth of compounded medications that were either medically unnecessary, or could have been prescribed for standard non-compounded medications.The physician admitted to receiving $25,000 for his role in the alleged conspiracy and faces up to ten years in prison.

Prosecutions based on compounded medication prescribing have been rare in the past. Traditionally, health care prosecutions have focused on violations of anti-kickback laws and the False Claims Act.This case, however, prominently features issues of medical necessity – whether the prescriber knowingly issued prescriptions for ineffective but expensive compounded medications just to rack up profits for the criminal group in exchange for kickbacks.Despite having admitted to only receiving $25,000 in kickbacks, the physician agreed to the full restitution of almost $25 million.

If you have questions or require legal guidance about a health care investigation, feel free to call the experienced attorneys in our Healthcare Investigations and White-Collar Defense Practice at (212) 668-0200 or email the firm at info@mdrxlaw.com