Feds break up $18M Los Angeles-area Medicare scam

AP News
Posted: Oct 27, 2011 6:50 PM
Feds break up $18M Los Angeles-area Medicare scam

Federal authorities raided Los Angeles-area pharmacies Thursday, arresting 16 people in an alleged $18 million scheme to defraud Medicare that included the recruitment of veterans, homeless people, the poor and elderly.

A federal criminal complaint contends a doctor at Manor Medical Imaging Clinic of Glendale wrote prescriptions for anti-psychotic drugs.

The drugs, which included Abilify, Seroquel and Zyprexa, were billed to Medicare and Medi-Cal but didn't go to those recruited for the scheme. Instead, the drugs were allegedly sent to black market wholesalers and then funneled to the San Gabriel Valley pharmacies, where they were repackaged so they could be re-dispensed.

Some Medicare beneficiaries had their identities stolen for use in the scheme. As a result, some people were later denied coverage for drugs they needed, authorities said.

The main pharmacy named in the complaint _ Huntington Pharmacy in San Marino _ had fewer than $45,000 in Medi-Cal claims in 2009 but nearly $1.5 million last year, and most were prescriptions from the Manor's doctor, according to the criminal complaint.

Overall, more than $18 million in bills were submitted to federal authorities and about $7.3 million was paid out, authorities said.

More than 200 federal, state and San Marino law enforcement agents served search warrants in Thursday's raids, according to a statement from the U.S. attorney's office.

Those charged with conspiracy to commit health care fraud could face up to 30 years in federal prison if convicted. They include the Manor doctor and the owners of the Huntington Pharmacy.

A message left at Manor seeking comment wasn't immediately returned. A call to Huntington Pharmacy went unanswered.

"Prescription harvesting" schemes involving anti-psychotic drugs are on the increase, authorities said. Anti-psychotic prescriptions can be lucrative because the government will reimburse pharmacies up to $2,800 for a single bottle of pills.