July 20, 2024 The Best Source of News, Culture, Lifestyle for Culver City, Mar Vista, Del Rey, Palms and West Los Angeles

Westside Pharmacy Involved in Health Care Fraud and Kickback Scheme

Compounding pharmacy and owner plead guilty to health care fraud and kickback Scheme that led to $14 million in payments

By Chad Winthrop

A Westside pharmacy owner pleaded guilty last week to federal criminal charges stemming from a scheme in which millions of dollars in reimbursements for compounded drugs were generated through the payment of illegal kickbacks for patient referrals and by fraudulently paying patients’ copayments.

On February 5, the Department of Justice U.S. Attorney’s Office Central District of California announced that Navid Vahedi, 41, of Brentwood, pleaded guilty to one count of conspiracy to commit health care fraud and payment of illegal remunerations. Vahedi last week also entered a guilty plea to the felony offense on behalf of his business, Fusion Rx Compounding Pharmacy.

According to prosecutors, Fusion Rx was a provider of compounded drugs, which are tailor-made products doctors may prescribe when the FDA-approved alternative does not meet the health needs of a patient. In their plea agreements, Vahedi and Fusion Rx admitted routing millions of dollars in kickback payments through the businesses of two marketers to steer prescriptions for compounded drugs to Fusion Rx. As part of the scheme, Vahedi and the two marketers provided physicians with preprinted prescription script pads that offered “check-the-box” options on the form to maximize the amount of insurance reimbursement for the compounded drugs. From May 2014 to at least February 2016, Fusion Rx received approximately $14 million in reimbursements on its claims for compounded drug prescriptions.

As part of its contracts with various insurance networks, Fusion Rx was obligated to collect copayments from patients. Because the copayments might discourage patients from requesting expensive and potentially unnecessary compounded drug prescriptions, Fusion Rx did not collect copayments with any regularity and, in other instances, it provided gift cards to patients to offset the amount of the copayments, according to court documents. After an audit raised concerns that Fusion Rx’s failure to collect copayments would be discovered, Vahedi directed Fusion Rx funds to be used to purchase American Express gift cards, which were then used to make copayments for certain prescriptions without the patients’ knowledge. Fusion Rx then submitted claims on these prescriptions to various insurance providers, falsely representing that patients had paid the required copayments.

Vahedi and Fusion Rx pleaded guilty before United States District Judge Christina A. Snyder, who scheduled a sentencing hearing on June 28, at which time Vahedi will face a statutory maximum sentence of five years in federal prison. Both defendants have agreed to pay restitution related to the copayment reimbursement part of the scheme, which is estimated to be $4,405,926. In addition to his obligation under the plea agreement to pay restitution, Vahedi also agreed to forfeit $1,338,511.

Under the terms of the plea agreements, Fusion Rx has also agreed to pay a fine sufficient to divest itself of all its remaining assets, Vahedi has agreed to have his pharmacist license revoked, and both Vahedi and Fusion Rx will be excluded from federal health care programs such as Medicare and Medicaid going forward.

The two marketers involved in the scheme – Joshua Pearson, 41, of St. George, Utah, and Joseph Kieffer, 40, of West Los Angeles – previously pleaded guilty in this case and are scheduled to be sentenced by Judge Snyder, respectively, on May 24 and June 28.

This matter was investigated by the Defense Criminal Investigative Service, the FBI, the Amtrak Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, and the Office of Inspector General for the United States Department of Health and Human Services.

in Crime, News
Related Posts

Cinespia Announces Additional Special Screenings at Hollywood Forever Cemetery

July 19, 2024

July 19, 2024

Featuring Tributes to Paul Reubens and Shelly Duvall and Annual Screenings Cinespia, the popular cinematic experience presented by Amazon MGM...

Michelle Bisnoff Arrested for $2 Million Investor Fraud Scheme

July 19, 2024

July 19, 2024

CEO of ESOS Rings Faces Securities and Wire Fraud Charges A Boca Raton woman was arrested today on charges of...

Felony Battery Suspect Arrested in South Brentwood Sexual Assault on July 16

July 18, 2024

July 18, 2024

26-Year-Old Taken Into Custody After Assault on Gretna Green Way Detectives from the Los Angeles Police Department’s West Los Angeles...

Culver City Opens Nomination Period for City Council Candidates This Week

July 18, 2024

July 18, 2024

Residents Invited to File Nomination Papers from July 15 to August 8  The nomination period for Culver City’s City Council...

(Video) Only One More Saturday Pop Up of Pa’s Biscuitisserie at Cardinale du Vin Left!

July 18, 2024

July 18, 2024

From 9 am to 2 pm, the best biscuits: their tribute to Red Lobster’s Cheddar Bay biscuits and the best...

(Video) Cold Brew Lou Celebrates Three Years at the Motor Avenue Farmers Market With New Coffee Drinks

July 17, 2024

July 17, 2024

Stay cool with Cold Brew Lou’s new creations, orange you curious? Check them out. @culvercitywlanews Cold Brew Lou Celebrates Three...

Danny Boy’s Famous Original’s New Location Now Open in Westwood Village

July 17, 2024

July 17, 2024

Acclaimed Chef Daniel Holzman Brings New York-Style Pizza to Westwood Daniel Holzman, celebrated chef and industry veteran, will open the...

New Restaurant Alert: All Roads Pinseria + Enoteca to Open in Brentwood on July 26

July 17, 2024

July 17, 2024

Roman-Style Eatery Boasts Unique Pinsa and Italian Specialties, Italian Wines Exciting news for the Westside: All Roads Pinseria + Enoteca,...

String of Car Burglaries Reported in Culver City Early Sunday, July 14

July 17, 2024

July 17, 2024

Residents Urged to Check Security Footage and Take Precautions A series of car burglaries occurred in Culver City early Sunday,...

Sexual Assault Reported in South Brentwood, Suspect at Large

July 16, 2024

July 16, 2024

LAPD Confirms Incident, Community Seeks Help to Identify Man A post on Nextdoor this evening reported the shocking news that...

Elon Musk Plans to Move Twitter and SpaceX HQs Out of California

July 16, 2024

July 16, 2024

Move Follows SAFETY Act Being Signed Into Law by Governor  Elon Musk, billionaire and CEO of Twitter, Space X, and...

Judge Issues Final Ruling in Favor of Barrington Plaza Tenants Association

July 16, 2024

July 16, 2024

Decision against Landlord Finds Intent Does Not Meet Ellis Act Standards The final ruling in the case of the Barrington...

Governor Signs Landmark SAFETY Act to Shield LGBTQ+ Students in California Schools

July 15, 2024

July 15, 2024

New Law Prohibits Forced Outing Policies in Schools to Keep Students Safe The Support Academic Futures & Educators for Today’s...

The Donald Kaufman Brentwood Branch Library Celebrates 30th Anniversary with Week of Events

July 15, 2024

July 15, 2024

A Musical Performance, Visit From the Reptile Family and Special Reception The Donald Kaufman Brentwood Branch Library is celebrating its...

Covid-19 Cases, Hospitalizations, and Test Positivity Rates Rise in Latest CDC Reports

July 15, 2024

July 15, 2024

California’s Wastewater COVID-19 Levels Are Very High; JN.1 Variant Dominates Covid 19 is making a comeback this summer, with infection...