Years ago, I was able to wipe a traffic ticket from my record by attending something billed as, as I recall, “comedy club traffic school.”
So, who says healthcare compliance stories can’t be funny?
We all know the expression “life imitating art”, but hardly anyone talks about “crimes imitating compliance”. That is, until today.
On June 8, 2023, a federal jury convicted the chief compliance officer of a pharmacy holding company, Steven King (yes, it would be funnier if his name were spelled “Stephen”), for fraudulently billing Medicare over $50 million for dispensing lidocaine and diabetic testing supplies that Medicare beneficiaries did not need or want.
The scam, which King and his co-conspirators ran through A1C Holdings LLC, involved pharmacies in multiple states. When A1C secured prescriptions and refills on behalf of its pharmacies for medically unnecessary lidocaine and diabetic testing supplies, it violated Medicare and pharmacy benefit manager rules.
Did the company hire King to keep them on the straight and narrow . . . but he strayed? Or did they hire him because they thought he knew how to run and, so they thought, conceal a scam? I have no idea.
However, the jury believed that King and his confederates ran and then took steps to conceal their scheme, including enrolling their mail order pharmacies as brick-and-mortar retail locations to evade more rigorous oversight, shipping prescription refills for high-reimbursing medications and supplies without patient consent, concealing the ownership of A1C Holdings LLC and its pharmacies, and transferring patients among pharmacies without patient consent.
As the DOJ put it in their press release: “King and his co-conspirators took each of these steps to ensure that Medicare continued to be billed for profitable medications and supplies. As chief compliance officer, King was in a unique position to prevent and report the fraudulent scheme, but he used his position to defraud Medicare instead.”
As I’ve mentioned many times on the blog, medical groups and facilities often create whistleblowers – their own compliance officers and other executives flip on them with regularity. Steven King flipped the entire thing on its head. And, as a result, he faces a maximum penalty of 20 years in prison on his conviction for conspiracy to commit health care fraud and wire fraud. His sentencing is scheduled for September 14, 2023.
Although Mr. King served us a heavy slice of schadenfreude, just as compliance, actual compliance, is far more than a compliance plan, he also showed us that compliance is far more than having a chief compliance officer. In fact, sometimes it’s the complete opposite.
