DOJ: Pharmacist Pleads Guilty to Defrauding Tricare Military Dependent Coverage

Yesterday, a Mississippi pharmacist pleaded guilty for his role in a multimillion-dollar ploy to defraud TRICARE and private insurance companies, according to a release from the Department of Justice. The conduct allegedly resulted in more than $180 million in fraudulent billings, including more than $50 million paid by federal healthcare programs. TRICARE is a program that provides healthcare benefits to military families.

The pharmacist, David “Jason” Rutland, 42, a co-owner of various compounding pharmacies, admitted that he participated in a scheme to defraud TRICARE and other health care benefit programs by distributing medically unnecessary compounded medications. Specific actions cited by the DOJ include:

  • Adjusting prescription formulas to ensure the highest reimbursement based on drug contents without regard to efficacy.
  •  soliciting recruiters to procure prescriptions for high-margin compounded medications and paying those recruiters commissions based on the percentage of reimbursements paid by pharmacy benefit managers and health care benefit programs, including commissions on claims reimbursed by TRICARE.
  •  Routinely and systematically waiving and/or reducing copayments to be paid by beneficiaries and members, including utilizing a purported copayment assistance program to falsely make it appear as if Rutland’s pharmacy and its affiliate compounding pharmacies had been collecting copayments.

Rutland pleaded guilty to conspiracy to defraud the United States and solicit, receive, offer and pay illegal kickbacks, and faces a maximum penalty of five years in prison. Sentencing is scheduled for Nov. 30.  A federal district court judge will determine any sentence after considering the U.S. sentencing guidelines and other statutory factors.

Rutland must also pay restitution and forfeit all assets traced to the ill-gotten gains.