The COVID-19 pandemic opened a Pandora’s box leading to numerous allegations of healthcare fraud and abuse involving the telemedicine industry.
One of the reasons for the increase in healthcare fraud is that several regulations involving telehealth prescribing of controlled substances and provider state licensure requirements were eased during the pandemic, allowing online prescribing to take off with less oversight.
Now, the U.S. Department of Justice says it’s filed its first criminal drug distribution case related to telemedicine prescribing through a digital health company.
Suspects Charged
The suspects are Ruthia He, the founder and CEO of Done Global, a California-based startup company, and its clinical president David Brodey. The two were arrested for allegedly taking part in a healthcare fraud scheme to distribute Adderall over the internet, conspire to commit healthcare fraud in connection by submitting false and fraudulent claims for reimbursement for Adderall and other stimulants, and obstruction of justice.
The two are alleged to have provided easy access to these drugs by exploiting telemedicine and spending millions on deceptive advertisements on social media.
It’s alleged that He and Brody prescribed Adderall and other highly addictive medications to patients who bought a monthly subscription through the company’s online platform. They are accused of using deceptive advertisements to target those seeking drugs.
Easy Access
They also allegedly set up the company’s online platform “to facilitate access to Adderall and other stimulants, including by limiting the information available to Done prescribers, instructing Done prescribers to prescribe Adderall and other stimulants even if the Done member did not qualify, and mandating that initial encounters would be under 30 minutes.”
In some cases, prescriptions were written without any video or audio communication with Done members and were paid based on the volume of patients to whom they prescribed medication according to the indictment in this healthcare fraud scheme.
“Prescribers were able to obtain lucrative pay for minimal work, sometimes hundreds of thousands of dollars a year in exchange for writing prescriptions for Adderall and other stimulants without much, if any, in-person or audio-visual telemedicine consultation with the Done members,” according to the indictment.
Once the patients bought the monthly subscription, court documents alleged, the platform set up an “auto-refill” function that allowed subscribers to have a message requesting a refill be auto-generated every month.
Millions Paid by Insurers
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said the two generated more than $100 million in revenue by arranging for the prescription of more than 40 million pills. As a result of the healthcare fraud scheme, Medicare, Medicaid, and commercial insurers paid more than $14 million.
“As these charges make clear, corporate executives who put profit over the health and safety of patients—including by using technological innovation—will be held to account,” Argentieri said.
He and Brody allegedly continued in the conspiracy even after being made aware that material was posted on online social networks about how to use Done to obtain easy access to Adderall and other stimulants, and that Done members had overdosed and died.
They also allegedly concealed and disguised the conspiracy by making fraudulent representations to media outlets to forestall government investigations and action and induce third parties to continue doing business with Done.
Company Denies Wrongdoing
Done, in response to the arrest, has denied any wrongdoing. In a message on its website, Done said it would continue to operate “and do everything in our power to ensure that the more than tens of thousands Americans that rely on us do not lose access to their mental health care. At the same time, we will continue to support our clinicians as they exercise independent clinical judgment, practice evidence-based medicine, and provide best-in-class health care.
“Clinicians working through Done’s platform have full medical independence on patient care. Done does not improperly influence clinicians on prescribing medications to patients. Done has also implemented well-designed protocols to prevent potential abuse of medication. We are committed to operating a platform that sets the highest standard for psychiatric care and believe that our hybrid approach allows us to achieve the highest clinical quality and outcomes for our patients.”
If convicted, He and Brody each face a maximum penalty of 20 years in prison on the conspiracy to distribute controlled substances and distribution of controlled substances counts.
DEA Proposes New Rules
Last year, the Drug Enforcement Administration (DEA) and the U.S. Department of Health and Human Services (HHS) extended the telehealth prescribing flexibilities that were put in place during the pandemic. It was the second such extension for drugs like opioid use disorder medications or stimulants for ADHD.
However, the DEA has since drawn up new rules. They are being reviewed by the Office of Management and Budget, signaling that the regulations could be near.
How We Can Help
It’s imperative that healthcare providers and companies keep up to date with all changes taking place. Our experienced attorneys are available to assist you in knowing the ins and outs of the latest rules, regulations and laws.
And should you find yourself the target of an investigation, having an experienced healthcare lawyer on your side is imperative.
Contact us for additional information at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.
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