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Pain cream fraud cost the government over $400 million

On Behalf of | Mar 1, 2019 | Firm News |

A conspiracy that involved submitting fraudulent claims for pain and scar creams is now tied to Louisiana. According to the Lafayette Daily Advertiser, the owner of a medical administration company in Monroe, Joseph Wiley, has admitted to creating fraudulent records to help pharmacies defraud the government.

He is the latest medical professional to be convicted in this wide-reaching scam, which has cost the federal government more than $400 million. The investigation is centered in Mississippi, where Wiley and other healthcare professionals participated in the fraud.

Creams used for fraud cost as much as $14,000

The fraud centers around prescribing unnecessary prescriptions for compounded pain and scar creams. The creams cost as much as $14,000 a tube. Recruiters within the industry would promise patients kickbacks after doctors prescribed the unnecessary cream to them. Then the doctors would bill Medicare, Medicaid and Tricare for the cream.

His records claimed patients were making co-pays

Wiley’s company, Affordable Medical Solutions, fabricated records for at least four Mississippi pharmacies. These fraudulent records stated co-payments were made on the costly creams, which was crucial to recruiting patients for the fraud.

Wiley pled guilty to health care fraud

Court records show Wiley’s fraud totaled about $57 million. He has pleaded guilty to one count of attempt and conspiracy to commit health care fraud. He is to be sentenced in July.

Wiley is the twelfth person convicted in this far-reaching fraud case. USA Today found there are at least 15 separate federal cases, which include criminal prosecutions, forfeiture proceedings and a whistleblower lawsuit.

A whistleblower receives part of the money

A whistleblower lawsuit is brought under the False Claims Act. In a whistleblower suit, an individual accuses other people or companies of committing fraud against the federal government and tries to recover money defrauded from the government. A person who wins a whistleblower, or qui tam, suit receives part of the money recovered.

The cases usually involve fraud related to the health care industry, like submitting fake billing to Medicare or Medicaid.