Watch Your “Scripts”: Fraud in the Pharmacy and Why New Jersey “Smart Cards” Make Sense

March 6, 2015Articles Garden State Gavel Blog

It looks like family dinners for two brothers and their mother may have to wait about sixteen years. According to the U.S. Attorney’s office, members of the Parrish family conspired to defraud the government out of over $351,000 by submitting fraudulent Medicare and Medicaid prescription claims from their family owned pharmacy in Florida.

For three years, the family used their pharmacy business to submit fraudulent prescription claims to federal insurance programs for reimbursement. To perpetrate the scheme, the conspirators used the identification of individuals who were enrolled in the insurance programs without their knowledge or consent. Needless to say, the prescriptions were never filled but the reimbursement found its way into the family coffers.

Perhaps the biggest break in the investigation took place when prescriptions started rolling in for deceased recipients. Apparently, the family was too busy collecting identification information to bother with such details.

In addition to stealing the identity of the living and the deceased, one of the conspirators utilized two different physicians’ DEA Registration Numbers to acquire controlled substances from other pharmacies in the area. Undoubtedly the physicians, themselves victims of the fraud, had to deal with many headaches surrounding the investigation.

Like many health insurance fraudsters, the Parrish conspirators employed a variety of means to place public benefits in their pockets. The manner in which they accomplished their unlawful ends serves as a reminder to all of us that our information is vulnerable and that vigilance is required to ensure protection.

The “take- away” from this pharmacy fraud is the recognition that health insurance information is valuable and subject to exploitation. Individuals should safeguard their identification records and review medical and prescription bills carefully to make sure that there is no evidence of services or prescriptions they never received or authorized.

If you run a medical practice or pharmacy, take steps to ensure that the unauthorized use of health insurance information is not taking place under your watch. Set up protocols and perform audits to ensure a safe and fraud- free zone in your business.

New Jersey is taking steps to prevent the ability of fraudsters like the Parrish’s from accomplishing their unlawful schemes. Just last month, legislation to establish a Medicaid Smart Card Program cleared the Senate Health, Human Services and Senior Citizens Committee. These “smart cards” contain a microchip that stores information about the Medicaid user in order to help protect against fraud by authenticating both the Medicaid recipient and the health care provider.

Now if we can just come up with a “smart card” to pay for college tuition…..