PMB Fraud Explained By a New York Criminal Attorney
Pharmacy benefits managers (PMBs) generally enter into contracts with insurance companies and with third-party payers, including Medicare prescription drug plans and federal Medicaid programs. The job of the pharmacy benefit manager is to oversee and facilitate the administration of pharmacy benefits provided by insurers.
PMBs enter into contracts with drug manufacturers as well as insurers. Through doing this work, PMBS are able to promote or suppress particular drugs within competitive drug classes. When PMBs are offered discounts or incentives, for example, benefit managers may limit insurance coverage to a particular brand or strain of drug, providing a tremendous cost incentive to the purchase of that medication over its competitors. Manufacturers typically reward PMBs with rebates for incentivizing the purchase of their drug, which PMBs are supposed to report and the proceeds of which should be passed on to the insurance program.
There are myriad opportunities for allegedly fraudulent behavior to occur as PMBs do their jobs, and it is imperative that pharmacy benefits managers are diligent in their record-keeping and reporting to reduce the risk of a fraud allegation. If claims of pharmaceutical fraud are raised, a PMB should consult with a New York criminal attorney for assistance in defending against serious allegations. Bukh Law Firm, PLLC is here to help.
What is PMB Fraud?
Pharmacy benefits managers may be accused of fraud for any acts or omissions which cause them to be unjustly enriched. Examples of past PMB fraud cases have arisen from:
- Allegations that pharmacy benefits managers knowingly solicited kickbacks from drug manufacturers in exchange for treating their products favorably or for steering patients towards the use of particular drugs.
- Allegations that PMBs accepted illegal kickbacks or bribes from drug manufacturing for favorable treatment of drugs.
- Allegations the PMB illegally paid improper kickbacks to current clients and to potential clients in order to induce clients to enter into contractual agreements.
- Allegations of submitting false claims which resulted in excess fees paid for fee-for-service agreements.
- Allegations that PMBs received flat fee rebates in exchange for including certain medications in pharmacy benefits plans and failed to pass rebated funds onto insurers.
- Allegations that PMBs steered patients away from more affordable products to more costly products to benefit drug manufacturers.
- Allegations that PMBs encouraged doctors to switch patients to certain name-brand drugs from lower cost medications.
These are just a few key examples of cases where PMBs have allegedly made material misstatements or misrepresentations while performing the service of managing pharmacy benefit plans.
Penalties for Pharmacy Benefits Fraud
Under Affordable Care Act, Pub. L. No. 111-148, § 6402(f)(2), 124 Stat 119 (2010), defendants may face penalties for violations of anti-kickback laws whenever a prosecutor is able to successfully demonstrate the defendant intended to offer, pay, or receive kickbacks for the provision of medical services, even when defendants were not aware of anti-kickback laws.
Penalties are serious, and defendants can face prosecution in federal court for multiple criminal counts, including a violation of 42 United States Code Section 1320a-7b(b), which imposes a penalty of up to five years incarceration and a maximum $25,000 fine for the receipt of illegal remuneration in connection with Medicaid, Medicare, Tricare, or other federal healthcare programs .
PMB fraud has also frequently led to False Claims Act civil claims, including a 2006 case in which state and federal governments recovered $184.1 million from Medco Health Solutions after a Qui Tam lawsuit was filed by a whistle blower against the pharmacy benefits manager. Qui Tam Actions allow employees or others who learn of wrongdoing to file civil claims to help the government recover funds obtained though fraud. The whistle blower who brings a Qui Tam action is paid a portion of the money recovered by the government.
Getting Help from a New York City Criminal Attorney
Because allegations of PMB fraud results in serious civil and criminal penalties, it is imperative all those accused begin to build a vigorous defense immediately. Bukh Law Firm, PLLC can provide legal representation to fight accusations of pharmaceutical fraud. Call today to schedule a consultation with a New York City criminal defense attorney at our firm who has the experience to handle this type of pharmaceutical fraud claim.