Pharmacist faces prison sentence for obstructing Medicare audit

An Alabama pharmacist faces up to five years in prison and has been fined $2.5 million after admitting he obstructed a Medicare audit of two pharmacies he owned.

Earlier this month, the U.S. Department of Justice announced that Rodney Dalton Logan, 63, of Muscle Shoals, Ala. agreed to plead guilty to obstructing a Medicare audit in 2012 and to receiving more than $2.5 million in improper reimbursements. His sentencing date has not been scheduled.

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U.S. Attorney Joyce White Vance"This case revolves around the falsification of documents in an effort to defraud Medicare, which exists to provide healthcare services for the elderly," U.S. Attorney Joyce White Vance stated in a release. "My office and our law enforcement partners are committed to ensuring the integrity of government programs and to prosecuting those who would provide false information to criminally profit from those programs."

Logan owned and was lead pharmacist of Leighton Pharmacy-which did business as Sheffield Pharmacy and Homecare in Sheffield, Ala. and Russellville Pharmacy in Russellville, Ala. Both locations served as retail and compounding pharmacies.

The charges against Logan involved allegedly submitting claims for compounded medications using bulk pharmaceutical powders that made the drugs ineligible for Medicare reimbursement.

CVS/Caremark, which administers some drug claims for Medicare Part D, audited Leighton reimbursements claims on behalf of Medicare. Prosecutors said Logan submitted false documents claiming the compounded medications for which he sought reimbursement did not include bulk pharmaceutical powders. According to prosecutors, he falsely claimed that the compounded medications used tablet or capsule forms of ingredients, not bulk pharmaceutical powders.

The reimbursements were for drugs compounded after February 2009, when the prohibition on the use of bulk pharmaceutical powders took effect, and were mostly for topical pain creams.

The charges resulted from a joint investigation by the FBI, the Department of Health and Human Services' Office of Inspector General (HHS-OIG), and the FDA’s Office of Criminal Investigation.

“Obstructing a Medicare audit is something the OIG takes very seriously,” said HHS-OIG Special Agent in Charge Derrick L. Jackson. “Submitting documentation to Medicare to substantiate that tablets or capsules were utilized when, in fact, bulk pharmaceutical powders were actually used is straight-up fraud.”